Full text of Federal Reserve Bulletin : April 1977
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A P R IL 19 7 7
FEDERAL RESERVE
R T I FTTN
Tt
U .S . I n te r n a tio n a l T r a n s a c tio n s in a R e c o v e r in g E c o n o m y
T h e Im p le m e n ta tio n o f M o n e ta ry P o lic y in
1976
B a n k H o ld in g C o m p a n y F in a n c ia l D e v e lo p m e n ts in
C h a n g e s in B a n k L e n d in g P r a c tic e s ,
1976
1976
C h a n g e s in T im e a n d S a v in g s D e p o s its , J u ly - O c to b e r 1 9 7 6
copy of the Federal Reserve B u l l e t i n is sent to each member bank without charge; member banks desiring
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The B u l l e t i n may be obtained from the Division of Administrative Services, Board of Governors of the
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of the Board of Governors of the Federal Reserve System in a form collectible at par in U .S . currency.
(Stamps and coupons are not accepted.)
A
NUM BER 4 □
V O L U M E 63 □
A P R IL 1977
FEDERAL RESERVE
BULLETIN
B o a rd o f G o v e rn o rs o f th e F e d e ra l R e s e rv e S y s te m
W a s h in g to n , D .C .
P U B L IC A T IO N S
C O M M IT T E E
Stephen H. Axilrod □ Joseph R. Coyne □ John M. Denkler □ Janet O. Hart
John D. Hawke, Jr. □ James L. Kichline □ John E. Reynolds
Richard H. Puckett, Staff Director
The Federal Reserve B u l l e t i n is issued monthly under the direction of the staff publications committee. This
committee is responsible for opinions expressed except in official statements and signed articles. Direction for
the art work is provided by Mack R. Rowe. Editorial support is furnished by the Economic Editing Unit headed
by Elizabeth B. Sette.
Table of Contents
311 U.S. International Transactions
a Recovering Economy
The pattern of international transac
tions was reversed in 1976 as economic
recovery in the United States advanced
more rapidly than economic recovery
abroad.
323 The Implementation
Policy in 1976
of
lation to the growth rates established by
the Federal Reserve for the monetary
aggregates in testimony before the Com
mittee on the Budget, U.S. Senate,
March 22, 1977.
in
362
Henry C. Wallich, Member of the
Board of Governors, discusses interna
tional lending by U.S. banks before the
Subcommittee on Financial Institutions
Supervision, Regulation, and Insurance
of the Committee on Banking, Finance,
and Urban Affairs of the U.S. House of
Representatives, March 23, 1977.
366
David M. Lilly, Member of the Board
of Governors, reviews the economic im
plications of Federal Government loan
guarantees and the treatment of such
guarantees in the budgetary process be
fore the Subcommittee on Economic
Stabilization of the Committee on Bank
ing, Finance, and Urban Affairs, U.S.
House of Representatives, March 30,
1977.
370
J. Charles Partee, Member of the
Board of Governors, evaluates the im
plications of U.S. Treasury financing re
quirements for monetary policy before
the Subcommittee on Domestic Mone
tary Policy of the Committee on Bank
ing, Finance, and Urban Affairs, U.S.
House of Representatives, March 30,
1977.
375
Philip E. Coldwell, Member of the
Board of Governors, presents a broadbased review of the expenditures and
budgets of the Federal Reserve Banks
and the Board of Governors before the
Committee on Banking, Housing, and
Urban Affairs, U.S. Senate, April 7,
1977.
M onetary
Annual report on domestic operations
of the Federal Open Market Committee.
337 B ank H olding Company F inancial
D evelopments in 1976
B H C ’s experienced significant
growth, improved liquidity, and in
creased earnings last year.
341 Changes
1976
in
B ank Lending Practices,
Evidence from the lending practices
surveys indicates that demand for busi
ness loans at large commercial banks
was weak through most of 1976 but
began to pick up in the last quarter.
347 Changes in Time and S avings D epos
its at Commercial B anks , July -O c
tober 1976
Growth in time and savings deposits
at insured commercial banks proceeded
at a moderate pace for the 3 months
ending October 28, 1976.
S tatements
358
to
Congress
Arthur F. Burns, Chairman of the
Board of Governors, reports on general
economic and financial conditions in re
380 Record of Policy A ctions of the
Federal Open M arket Committee
Proposed amendment to Regulation H
and proposed interpretation of Regula
tion Z.
At the meeting held on February 15,
1977, the FOMC reviewed the domestic
policy directive and decided to continue
to maintain about the current stance;
approved a statement of policy regarding
the Government in the Sunshine Act;
amended its rules regarding availability
of information; and revised the guide
lines for System operations in Federal
agency issues.
Changes in Board staff.
New President of the Federal Reserve
Bank of Minneapolis.
Fair C redit Billing pamphlet.
Changes in price of two Board publi
cations.
Four State banks admitted to Federal
Reserve membership.
395 Law D epartment
Amendment to Regulation Q and mis
cellaneous guidelines, rulings, and
orders.
432 Industrial Production
Output rose 1.4 per cent in March, the
largest increase in 19 months.
426 A nnouncements
Regulation Q amended to create a new
class of retirement savings deposits. (See
Law Department for text of amendment.)
Establishment of the Consumer Com
pliance and Education Program of the
Board of Governors.
Regulation Z amended to require ad
vance disclosure of any variable rate
clause in a credit contract that may result
in increased cost to the consumer; and
to permit disclosures under the regula
tion to be made in Spanish in Puerto
Rico.
Regulation H amended to conform
with recent changes in the Flood Disaster
Protection Act of 1973.
Interpretations of Regulations Z and
C.
Nonadoption of proposed amendment
to Regulation Q.
Al
Financial
and
B usiness S tatistics
A3 Domestic Financial Statistics
A46 Domestic Nonfinancial Statistics
A54 International Statistics
A69 Guide to Tabular Presentation
and S tatistical Releases
A70 B oard
of
Governors
and
S taff
A72 Open M arket Committee and
S taff ; Federal A dvisory Council
A73 Federal Reserve B anks
B ranches
and
A74 Federal R eserve B oard
Publications
A76 Index
A78 M ap
to
of
S tatistical Tables
F ederal R eserve S ystem
U.S. International Transactions
in a Recovering Economy
The relative strength and timing of economic
recoveries in the United States and abroad led
to a striking reversal in the pattern of U.S.
international transactions last year. From the
recession-induced record surplus in current-account transactions in 1975, the United States
returned abruptly in 1976 to the near balance
in such transactions that had prevailed in both
1973 and 1974.
The greatest swing occurred in the merchan
dise trade balance, which shifted from a $9
billion surplus in 1975 to a $9.2 billion deficit
in 1976, primarily due to cyclical factors. In
1974 and 1975 with the United States undergo
ing a more severe recession than the rest of the
developed world, U.S. imports declined rela
tively more in volume than exports. The situa
tion has reversed during the recovery. Economic
growth in the United States, as measured by
the increase in real gross national product, was
6.1 per cent in 1976 compared with a weighted
average of nearly 5 per cent in six other major
industrial countries (Chart 1). Growth of indus
trial production in the United States exceeded
10 per cent versus a weighted average of some
what less than 8 per cent in six other major
industrial countries. Hence, there was a strong
pick-up in U.S. merchandise imports while ex
ports rose only moderately.
Several other factors accentuated the swing
in the merchandise trade balance. For one, the
1974-75 recession had been accompanied by an
1. R ea l G N P a n d . . .
in d u s tr ia l p r o d u c t io n
This article was prepared by John M . Under
wood of the U.S. International Transactions
Section of the D ivision of International Finance.
Ql 1973=100
United States
Indexes of foreign real GNP and industrial production (1973
Q l = 100) are weighted averages for Canada, France, Germany,
Italy, Japan and, the United Kingdom. Foreign real GNP index
weights are proportional to country share in 6-country total
real GNP in 1973-76. Foreign industrial production index
weights are proportional to U .S . exports to these respective
countries in 1973. Data are from national sources.
U .S. real GNP is based on Dept, of Commerce data; U .S.
industrial production is the F.R. index.
312
1.
Federal Reserve Bulletin □ April 1977
U.S. international transactions
In billions of dollars
1976*
Item
1975
1976
Ql
Q2
Q3
Q4
- 1 .3
27.0
28.3
2.7
(2.3)
( -.1 )
(.5)
- 1 .0
- 1 .5
28.4
29.9
3 .0
(2.5)
( -.2 )
(.8)
-.9
- 2 .8
29.6
32.4
3 .9
(2.8)
(.3)
(.9)
- 1 .2
-3 .6
29.7
33.2
3 .7
(3.0)
(.1)
(.6)
- 1 .0
CURRENT ACCOUNT
1. Merchandise trade balance ..................................................
Exports ...................................................................................
Imports ...................................................................................
2. M ilitary and service transactions, n et2 ............................
Investment income, net .....................................................
Military transactions, net2 ..................................................
Other services, net ............................................................
3. Unilateral transfers1* ..............................................................
2
9.0
107.1
98.1
7.0
(6.0)
( - 1 .2 )
(2.2)
-4 .0
4. Balance on current account2 ............................................
12.0
- 9 .2
114.7
123.9
13.3
(10.5)
(.1)
(2.7)
- 4 .1
♦
.3
.6
-.1
- .9
U .S. FUNDS (outflow/increase ( —» 3
5. Net change in positions of U .S. banking offices
vis-a-vis banks abroad ..........................................................
6. Banks’ claims on foreign nonbanks ..................................
7. U .S. net purchases of foreign securities ...........................
8. U .S. direct investments abroad ..........................................
9. Other U .S. private claims on foreigners .........................
10. U .S. Govt, capital, net of repayments (excl.
reserve assets)* .........................................................................
11. U.S. reserve assets ................................................................
Of which:
Reserve position in the IMF ..........................................
Convertible currencies and other ...................................
12. Total: lines 5-11
...................................................................
- 1 0 .9
- 3 .2
- 6 .2
- 6 .3
- 1 .5
7.4
5.1
- 8 .7
- 5 .0
- 1 .8
- 2 .2
- .2
- 2 .5
- 1 .8
- .8
- 1 .1
- 1 .5
- 1 .4
- .2
- 1 .0
- .8
- .5
- 2 .7
- 1 .4
.7
- 3 .2
- 2 .9
- 2 .1
- 1 .6
- .8
- 3 .5
- .6
-4 .3
- 2 .5
- .7
- .8
- 1 .0
- 1 .6
-1 .5
- .4
- 1 .2
.2
( - .5 )
( - .1 )
( - 2 .2 )
( - .3 )
( -.2 )
( -.5 )
( -.8 )
( -.8 )
( -.7 )
(.3)
( -.5 )
(.7)
- 3 2 .2
- 3 4 .8
-9 .0
- 7 .8
-6 .6
- 1 1 .6
FOREIGN FUNDS (inflow/increase (+ ))
13. OPEC official assets in the U .S ............................................
14. Assets of other foreign official institutions2 ...................
15. A ssets of private nonbank foreigners ................................
O f which:
Direct investments in U .S ..................................................
U .S. securities incl. Treas. issues ................................
Claims on U .S. banking offices .....................................
Claims on nonbanks of unaffiliated foreigners ...........
7.1
- .5
9.0
9.5
8.0
6 .8
3.5
.4
.3
3.3
.8
1.1
1.7
.6
3.3
1.0
6.1
2.3
(2.4)
(5.2)
(1.2)
(.2)
(.6)
(4.1)
(2.7)
(-6 )
( -.7 )
(1.5)
( -.5 )
(*)
(.4)
( - .5 )
(1.4)
(-.2 )
(.7)
(3.1)
( -.2 )
( -.3 )
(.2)
(*)
(2.1)
(*)
16. Total: lines 13-15 .................................................................
15.6
24.3
4.2
5.2
5.6
9.4
17. Statistical discrepancy ............................................................
4.6
10.5
4.3
1.9
1.2
3.1
pPreliminary.
*Less than $50 million.
in clu d es U .S. Government grants and pensions, and private
remittances.
2Excludes special U .S. Government grants to Israel and
associated export and capital-account entries.
3Includes inflow from foreign banks to U .S. banks.
N o t e .— Current-account items are seasonally adjusted; sea
sonal factors are no longer calculated for capital transactions;
quarterly values of the statistical discrepancy include residuals
due to incomplete seasonal adjustment. Data from U .S. Dept,
of Commerce, Bureau of Economic Analysis. Details may not
add to totals because of rounding.
inventory liquidation that was much greater than
in other recent downturns, so the rebuilding of
inventories during the recovery stimulated both
industrial production and the demand for im
ports early in 1976. In addition to increased
demand due to the recovery, higher prices for
oil, reduced domestic oil production, and
colder-than-average weather in the fourth quar
ter of 1976 led to a sharply higher bill for
imported oil.
Furthermore, part of the swing in the trade
balance may have resulted from some loss in
U.S. price competitiveness associated with the
appreciation of the dollar by 15 per cent against
a weighted average of the currencies of the other
Group of Ten countries plus Switzerland be
tween March 1975 and January 1977. (The
dollar exchange rate to which references are
made throughout this article is this weighted
average. Weights are calculated as the sum of
U.S. International Transactions
2.
313
U .S. m erchandise trade
International accounts basis; quarterly data at seasonally adjusted annual rates
1976
1975
1974
Item
1975
1976
Ql
Q2
Q3
Q4
Ql
Q2
Q3
Q4
B illions o f dollars
98.3
107.1
114.7
108.1
103.4
106.2
110.6
108.0
113.5
118.4
118.9
2 2 .4
7 5 .9
2 2 ,2
8 4 .8
2 3 ,4
9 1 .3
2 4 .2
8 3 .9
19.5
8 3 .9
22 .3
8 4 .0
2 3 .0
8 7 .7
2 1 .5
86 .5
23.1
9 0 .5
2 5 .3
93.1
2 3 .7
95 .2
Im port values ................
103.7
98.1
123.9
102.3
90.3
97.9
101.7
113.3
119.7
129.5
133.2
Fuel ...................................
N onfuel ...........................
2 7 .5
7 6 .2
2 8 .5
6 9 .5
37.1
8 6 .8
2 7 .8
7 4 .5
2 6 .7
6 3 .6
3 0 .0
6 7 .9
2 9 .5
7 2 .2
3 2 .5
8 0 .8
35 .3
8 4 .4
40.1
8 9 .5
4 0 .7
9 2 .5
- 5 .4
9.0
-9 .2
5.8
13.1
8.3
8.9
- 5 .3
-6 .1
- 1 1 .1
- 1 4 .3
Export values
................
Agricultural .....................
Nonagricultural ............
Balance
............................
1974=100
Volumes
Agricultural exports ..
Nonagricultural exports
Fuel imports ..................
N onfuel imports ..........
1 00.0
100.0
1 00.0
100.0
101.5
9 6 .3
100.2
82 .5
113.5
9 7 .2
123.1
101.9
101.5
9 5 .7
9 7 .3
8 7 .6
89.5
9 4 .7
9 4 .2
7 3 .6
104.7
9 4 .8
107.1
82 .3
110.0
9 7 .4
102.8
8 8 .0
104.7
94.1
109.2
9 7 .5
113.1
9 7 .2
117.6
9 9 .6
121.6
9 9 .0
132.8
103.8
114.4
9 8 .4
132.5
106.6
100.0
10 0 .0
1 00.0
100.0
9 7 .7
116.1
103.5
110.6
9 2 .0
123.8
109.7
111.8
106.4
115.4
1 0 4.0
111.5
9 7 .4
116.7
103.1
113.4
9 4 .8
116.7
102.1
108.3
93.1
118.6
104.4
107.7
9 1 .6
121.0
108.2
108.8
9 1 .0
122.7
109.1
111.2
9 2 .8
1 23.9
109.7
113.1
9 2 .5
127.4
111.6
114.0
Unit values
Agricultural exports ..
Nonagricultural exports
Fuel imports ..................
N onfuel imports ..........
N o t e . — D etails may not add to totals because o f rounding. Data from U .S . Dept, o f C om m erce, Bureau o f E conom ic A nalysis
and Bureau o f the C ensus.
each country’s exports and imports (f.o.b.) in
1972 divided by total 1972 trade of the other
10 countries.) While U.S. prices rose less than
those of most of its trading partners, this relative
price performance did not fully offset the ex
change-rate rise. Last, the Organization of Pe
troleum Exporting Countries (OPEC) appears to
have come to the end of its period of rapid
growth as a market for exports. The value of
total OPEC imports is estimated to have in
creased by only about $10 billion in 1976 com
pared with $22 billion in 1975; U.S. exports
to OPEC increased by just $1.8 billion in 1976,
after increasing by $4.0 billion in 1975.
Some of the decline in the merchandise trade
balance was offset by a significant rise in the
surplus on net military and service transactions.
Larger inflows of net direct investment and
interest income from abroad accounted for twothirds of the increase. The surplus on net mili
tary transactions, continuing its upward trend,
accounted for another 20 per cent of the in
crease.
The large shift in the U.S. current-account
position, from a record surplus in 1975 to near
balance in 1976, was by definition matched by
a shift in capital flows from a large over-all net
outflow to a small net inflow. Recorded data
identify only part of the adjustment; a large part
appears in the statistical discrepancy entry in
Table 1. In spite of the shift to a net capital
inflow, the United States continued to be a
source of sizable amounts of funds to overseas
borrowers through loans from U.S. banking
offices and foreign bond issues in the United
States. The swing from surplus to deficit in the
current account in 1976 was accomplished
without a large depreciation of the dollar. In
fact, the dollar appreciated slightly on a tradeweighted basis although most of the rise oc
curred early in the year. Factors contributing
to the appreciation included the slower rise in
314
Federal Reserve Bulletin □ April 1977
prices in the United States than the average for
foreign countries, official dollar purchases, and
a further accumulation of dollar-denominated
assets by OPEC.
3. I m p o r ts a n d th e in v e n to r y c y c le
Billions of 1972 dollars
40 Change in
1972=100
120
business inventories
N O N F U E L I M P O R T S : A q u ic k
r e b o u n d a s th e e c o n o m y r e c o v e r s
The pace of the U.S. economic recovery that
had begun in the second quarter of 1975 re
mained rapid in the early part of 1976. Sub
stantial rates of growth were recorded for both
real GNP and industrial production, and import
demand expanded along with economic activity.
Most categories of nonfuel imports followed a
similar pattern, showing especially strong
growth in the first quarter of 1976 (Chart 2).
During the recession the volume of nonfuel
imports showed a proportionately greater de
cline than either real GNP or industrial produc
tion. Similarly, during the recovery such im
ports have shown proportionately larger growth
than either of these measures of U.S. economic
activity. Real GNP grew by 6.1 per cent in 1976
and industrial production by more than 10 per
cent, whereas the volume of nonfuel imports
increased by 24 per cent. Imports of industrial
supplies, autos, and other consumer goods grew
the most rapidly of these groupings from their
recession-reduced levels in 1975.
2. U .S . im p o r t s o f
m a jo r n o n fu e l c o m m o d it y g r o u p in g s
1973
1974
1975
1976
Dept, o f C om m erce data. Shaded area marks the period of
decline in the F.R . industrial production index.
Imports of
T
nonfuel
industrial supplies
Dept. of C om m erce data for imports and inventory changes,
with inventory changes at annual rates. F.R . industrial produc
tion index.
Percentage swings in import volumes during
the most recent recession were larger than in
other recessions since 1956, in part a reflection
of the sensitivity of nonfuel imports to inventory
behavior. Large stocks of both materials and
products were built up during the period of
rising prices preceding the recession. Just as the
inventory liquidation that accompanied the
downturn had contributed to the reduction in
nonfuel imports, so too the build-up of invento
ries early in 1976 not only helped to propel the
recovery but also added to the demand for
imports, especially of nonfuel industrial sup
plies (Chart 3). The rate of accumulation of
nonfarm business inventories, which had been
negative throughout most of 1975, jumped
sharply in the first quarter of 1976 and then
remained relatively flat until late in the year.
In contrast, imports of nonfuel industrial sup
plies continued to grow rapidly in the second
and third quarters before dropping off in the
fourth quarter.
The price of nonfuel imports, as measured
by the unit-value index, averaged only about
1 per cent higher in 1976 than in 1975. Import
unit values had declined during the second half
of 1975, reflecting the rapid appreciation of the
dollar and falling commodity prices, but rose
at a fairly steady pace through 1976 as the
trade-weighted appreciation of the dollar slowed
and commodity prices rose again. Prices of
imported primary commodities increased
sharply during the rapid recovery of the econ
U.S. International Transactions
3.
315
U.S. imports from selected countries or regions
1974
Country or region
Canada ...............................
W estern Europe ..............
(Germ any) ...................
(Other EEC) ................
Japan ...................................
N on-oil exporting
developing countries1
C om m unist countries ..
N onfuel imports, total ___
1975
1976
B illions
o f dollars
Per cent
o f nonfuel
imports
B illions
o f dollars
Per cent
o f nonfuel
imports
Percentage
increase
over 1974
B illions
o f dollars
Per cent
o f nonfuel
imports
Percentage
increase
over 1975
17.3
2 2 .2
(6 .2 )
(1 1 .6 )
12.3
2 2 .7
29.1
(8 .1 )
(1 5 .2 )
16.1
16.9
2 0 .0
(5 .2 )
(1 0 .8 )
11.2
2 4 .3
2 8 .8
(7 .5 )
(1 5 .5 )
16.1
-2 .3
-9 .9
( - 1 6 .1 )
( - 6 .9 )
-8 .9
2 1 .5
2 1 .6
(5 .5 )
(1 1 .5 )
15.5
2 4 .8
2 4 .9
(6 .3 )
(1 3 .2 )
17.9
2 7 .2
8 .0
(5 .8 )
(6 .5 )
3 8 .4
19.1
.8
25.1
1.0
17.8
.7
2 5 .6
1.0
-6 .8
-1 2 .5
2 3 .5
.9
27.1
1.0
3 2 .0
2 8 .6
7 6 .2
100.0
6 9 .5
100.0
-8 .8
86 .8
100.0
2 4 .9
in c lu d e s a sm all quantity o f fuel imports.
N o t e . — Data from U .S . Dept, o f C om m erce, Bureau o f E conom ic A nalysis and Bureau o f the Census.
omy in the first half of 1976, peaked in July,
and then fell back before advancing again late
in the year. Import unit values of coffee and
cocoa— two commodities in short supply— rose
at a fairly steady rate all year, and are still far
below spot prices, mainly because of the long
lags between orders and deliveries.
Not all countries shared equally in the growth
in U.S. nonfuel imports in 1976. Imports from
developed countries— including some fuels—
were up by $11 billion over 1975, led by a $4
billion increase in nonfuel imports from Japan
(Table 3). However, the value of nonfuel im
ports from the European Economic Community
(EEC) increased by only 7 per cent— less than
$1 billion— and was lower in 1976 than in 1974;
imports from Germany accounted for over half
of this decline. U.S. imports from non-oil de
veloping countries increased almost twice as fast
as imports from developed countries. Exports
from these developing countries to the United
States rose by $6 billion. Most of this increase
was in manufactured goods from South Korea,
Taiwan, and Hong Kong, countries whose ex
ports to the United States had dropped off
sharply in 1975.
the quantity of imported oil accounted for about
70 per cent of the total rise in value. A higher
average import unit value, $12.13 per barrel
from $11.42 in 1975, associated with OPEC
price increases, accounted for the remainder of
the rise in the value of fuel imports.
Nearly three-fourths of the growth in the
quantity of imported oil represented a rise in
demand that would normally be associated with
the increase in real GNP that occurred during
the year; declines in domestic production of oil
and the cold weather during 1976 each contrib
uted about equally to the remaining increase in
the U.S. demand for imported oil. The fourth
quarter of 1976 was almost 20 per cent colder
than average, as measured in degree-days— the
number of degrees per day by which the average
temperature falls short of 65 degrees. The pat
tern of fuel imports during the year was also
influenced by the working off of inventories in
the first quarter of 1976 that had been accumu
lated in anticipation of the OPEC price increase
of October 1975 and by a renewed accumulation
in the second half of 1976 in anticipation of
another price rise at the year-end.
N O N A G R IC U L T U R A L E X P O R T S:
F U E L IM P O R T S : In crea sed d em an d
a n d d e c lin in g d o m e s t ic p r o d u c tio n
U.S. imports of petroleum and its products rose
to $34.6 billion during 1976, up about $7.6
billion from the previous year. An increase in
S lu g g is h rea l g r o w th
The value of nonagricultural exports was 7.5
per cent higher in 1976 than in 1975, but most
of the change reflected price increases. In real
terms, exports of nonagricultural goods grew by
316
Federal Reserve Bulletin □ April 1977
only 0.7 per cent to an annual total still 3 per
cent below the record 1974 volume. A combi
nation of factors contributed to this slug
gishness: the weakening of the economic re
coveries in our major industrial trading partners
as the year progressed; the marked slowing of
the growth in exports to OPEC countries; and
the measures taken by a number of countries—
especially developing countries— to slow the
rate of growth of their imports in response to
balance of payments financing difficulties.
Exports of all the major nonagricultural com
modity groups shared in the pattern of slow real
growth, as shown in Chart 4. The pattern of
nonagricultural exports closely paralleled the
behavior of industrial production of the major
trading partners of the United States.
A second striking feature shown by the chart
is that the strong rise in the volume of capital
goods exported during 1973 and 1974, years of
sharply higher capital spending in most regions
of the world, was only somewhat eroded in 1975
and 1976. The rise in U.S. exports of capital
goods followed a significant improvement in the
price competitiveness of the United States in
response to both the net depreciation of the
4. U S . e x p o r ts o f m a jo r
n o n a g r ic u ltu r a l c o m m o d it y g r o u p in g s
t
i
r
1973_______ 1974_______1975_______ 1976
100
Dept, of Commerce data for exports. Foreign industrial
production index, except for the change in base period, is as
defined in the note to Chart 1.
4.
Machinery export prices for the
United States, Germany, and Japan1
Dollar-equivalent indexes, 1970= 100
U.S.2
Germany
Japan
1970 ............
1971 ............
1972 ............
100.0
101.0
101.6
100.0
113.0
128.7
100.0
104.4
112.1
1973 ............
1974 ............
1975 ............
19763 ...........
105.8
119.0
143.1
151.0
162.9
184.3
212.6
213.8
130.4
150.2
150.9
151.5
.........
.........
.........
.........
139.3
142.5
144.0
146.5
220.1
221.2
205.6
203.3
153.8
153.1
149.8
147.0
.........
.........
.........
.........
149.3
150.8
152.8
155.8
210.1
213.8
217.4
148.6
151.1
154.8
155.0
Period
1975
Ql
Q2
Q3
Q4
1976
Ql
Q2
Q3
Q4
1Based on transactions price data, rather than export unit
values. The U .S. index is constructed from Bureau of Labor
Statistics data. The German and Japanese indexes are available
from national sources in local currency units, converted into
dollars at current exchange rates.
2U .S. data for 1970-74 are based on June prices, the only
data available prior to 1974.
3January-September data.
dollar since 1970 and the better performance of
the United States, relative to its major competi
tors, in holding down unit labor costs.
Export prices for machinery, which in 1976
represented 82 per cent of U.S. exports of
capital goods and 27 per cent of total U.S.
exports, are shown in Table 4 for the United
States, Germany, and Japan. These three coun
tries accounted for more than half of the value
of world exports of machinery in 1973. Between
1970 and 1973, prices of machinery exported
from the United States rose substantially less
than those for Germany and Japan, reflecting
the sharp depreciation of the dollar versus the
mark and yen during that period. Since 1973,
U.S. price competitiveness has held fairly
steady compared with Germany but has eroded
against Japan.
The impact of relative price changes on U.S.
machinery exports is reflected in the changing
U.S. share of the export volumes of the three
countries combined (Table 5). Between 1970
and the first three quarters of 1976 the U.S.
share rose from 43 to 48 per cent, while Ger
many’s share fell from 40 to 33 per cent and
Japan’s share increased from 17 to 19 per cent.
U.S. International Transactions
5.
317
Machinery export volumes
for the United States, Germany, and Japan
Billions of 1970 dollars1
Percentage shares
Year
U .S.
Germany
Japan
Total
U .S.
Germany
Japan
1970 ..
1971 ..
1972 ..
11.37
11.46
13.04
10.57
10.69
11.33
4.39
5.12
6.08
26.33
27.27
30.45
43.2
42.0
42.8
40.1
39.2
37.2
16.7
18.8
20.0
1973 ..
1974 ..
1975 ..
19762
16.19
19.91
19.75
20.48
12.63
14.17
13.27
14.00
6.97
7.85
8.53
8.24
35.79
41.93
41.55
42.72
45.2
47.5
47.5
47.9
35.3
33.8
32.0
32.8
19.5
18.7
20.5
19.3
Constructed by deflating export value data (from national sources) by local-currency
price indexes for machinery exports (from sources noted in Table 4).
2January to September data at annual rates (January to August for Japan).
The total value of German and Japanese ex
ports of all commodities to countries other than
the “ big three” increased a little faster than
U.S. exports to these areas in 1976. In terms
of these countries, West Germany increased its
exports by 13 per cent, to about $95 billion;
Japanese exports rose by 12 per cent, to about
$48 billion; and U.S. nonagricultural exports
rose by 8 per cent, to about $81 billion. While
the value of U.S. nonagricultural exports to all
but the petroleum-exporting countries grew
slowly in 1976, German and Japanese exports
to certain areas increased rapidly, especially to
other countries in Western Europe.
For the last few years, OPEC has been a
major source of growth in export demand for
the United States, Germany, and Japan (Table
6). Exports to OPEC countries continued to
increase in 1976, but the rate of increase was
much slower than in 1975. Thus it appears that
the period of rapid growth in total OPEC im
ports is over. Such imports, which had increased
more than 60 per cent in 1975, grew more
slowly in 1976 and for the year are estimated
to have risen 17 per cent to about $68 billion.
Nine OPEC countries, four with intermediate
absorptive capacities— Iraq, Iran, Libya, and
Nigeria— and five with high absorptive capaci
ties— Algeria, Ecuador, Gabon, Indonesia, and
Venezuela, have accounted for this slowdown.
These nine countries accounted for more than
three-fourths of total OPEC imports in 1975;
their share in U.S. exports to OPEC was nearly
as large. In 1975 each of these countries had
experienced a rapid reduction in its current-account surplus as development spending and im
ports grew rapidly. If they had tried to continue
this pattern of high import growth, financing
constraints would likely have arisen. So, in
1976 they curbed their imports somewhat.
Nevertheless, the low-absorbing OPEC coun
tries— Kuwait, Qatar, Saudi Arabia, and the
United Arab Emirates— have continued to in
crease their imports rapidly, but their persistent
surpluses on current account reflect the restric
tions on import growth imposed by limited
resource bases (except for oil and gas reserves),
6.
U .S .,1 German, and Japanese
exports to OPEC
Item
1974
1975
1976e
Billions of dollars
Germany ............................
Japan ...................................
United States1 ....................
Total OPEC imports
4.3
5.5
5.2
*36
7.1
8.4
9.3
*58
8.6
8.8
10.9
68
Percentage increase,
year over year
Germany ..................................
Japan .........................................
United States1 .......................
Total OPEC imports
65.1
52.7
78.8
61.1
21.1
4.8
17.2
17.2
Nonagricultural exports.
Estimated.
Note.—Data from OECD, Statistics Division, and U .S.
Dept, of Commerce, Bureau of the Census.
318
Federal Reserve Bulletin □ April 1977
a shortage of manpower, and small domestic
markets. In addition, all of the countries with
low absorptive capacities, except Kuwait, face
severe port congestion, a condition that is ex
pected to limit the growth of imports at least
through 1977.
A G R IC U L T U R A L E X P O R T S :
S e n s i t i v i t y t o w o r ld s u p p l y
Both the volume and the value of U.S. agricul
tural exports rose to record levels in 1976 even
though export prices fell to their lowest levels
since 1973. Because of a crop failure in 1975,
the Soviet Union bought large amounts of agri
cultural goods, mainly corn, from the United
States, and these purchases supported agricul
tural exports in the first half of 1976. As these
shipments dropped off in the second half of the
year, agricultural exports to drought-stricken
West European countries increased sharply.
Record crops in the United States and in most
of the rest of the world led to falling agricultural
prices, especially in the last few months of
1976. Prices of wheat and corn dropped to levels
not experienced since 1973. On the other hand,
soybean and cotton prices rose during the year.
The 1976 soybean crop was small; U.S. plant
ings were reduced due to fears by farmers of
increased palm oil imports and Brazilian com
petition in export markets, while domestic and
foreign demand for soybeans for livestock feed
remained strong. Cotton prices rose because of
increased demand and a reduction in the 1976
crop as the result of bad weather, a situation
that was exacerbated by an already small carry
over stock.
The U .S.-Soviet grain agreement that be
came effective in October 1976 appears to be
achieving its goal of lessening the variation in
the volume of Soviet grain purchases from the
United States. Soviet purchases of U.S. grain,
which have averaged 8.8 million metric tons
(mmt.) over the last 5 years, have varied from
a high of 14.3 mmt. in 1973 to a low of 3.4
mmt. in 1974. In spite of a record Soviet grain
crop in 1976, the U.S.S.R . has already pur
chased slightly more than the 6 mmt. minimum
amount called for during the first 12 months of
the grain agreement.
NEW
M IL IT A R Y A N D
S E R V IC E
T R A N S A C T I O N S : A n o ff s e t to th e
m e r c h a n d i s e tr a d e d e f i c it
Between 1975 and 1976, net receipts from mil
itary and service transactions increased by $6.3
billion (Table 7). About two-thirds of the in
crease resulted from larger net receipts on in
vestments, and another $1.3 billion was in net
military transactions. Amounting to $13.3 bil
lion in 1976, the net inflow of funds from all
military and service transactions more than off
set the large deficit in the merchandise trade
balance.
Net investment income receipts increased by
$4.5 billion to a total of $10.5 billion in 1976;
most of the rise was in receipts as payments
were little changed from 1975 levels. Returns
on U.S. direct investments abroad— apart from
undistributed profits— amounted to $12.5 billion
in 1976, a one-third increase from levels of a
year earlier. Much of the rise resulted from
higher returns from foreign affiliates of U.S.
petroleum companies as the demand for oil rose
and as oil prices increased. Other private income
receipts increased by nearly $1.5 billion, mostly
returns on securities and bank loans. Payment
of income on foreign investments in the United
States declined slightly in 1976. Most of the
decline was in payments other than on direct
investments. There was a sizable addition to the
stock of foreign funds in the United States, but
domestic interest rates fell during the year.
7.
Net military and service transactions
In billions of dollars
Item
Net m ilitary and
service transactions
1975
1976
Change
7.0
13.3
6.3
N et investment income . . .
6 .0
10.5
D irect investm ents, net
Other, net .......................
N et military .........................
Sales ...................................
Expenditures ....................
Travel, net
(incl. passenger fares)
Transportation, net ............
Other services, net ............
7 .3
- 1 .3
10.2
.3
4.5
2.9
- 1 .2
(3 .6 )
(4 .8 )
- 2 .9
.1
(4 .9 )
(4 .8 )
1.6
1.3
(1 .3 )
( . .. )
4 .7
-2 .4
.2
4 .9
.4
-.1
.2
4 1 .0
3 4 .0
4 9 .2
3 5 .9
8 .2
1.9
.4
M em o:
Total receipts ..................
Total paym ents ..............
N o t e . — Details may not add to totals because of rounding.
Data from U .S. Dept, of Commerce, Bureau of Economic
Analysis.
U.S. International Transactions
Foreign sales of U.S. military goods and
services exceeded U.S. military expenditures
abroad for the first time in 1976; net receipts
were $0.1 billion in 1976 compared with net
expenditures of $1.2 billion in 1975. Transfers
under U.S. military agency sales contracts in
creased strongly in 1976, with a sharp rise in
deliveries of equipment to Iran and technical
assistance to Saudi Arabia. Military sales of
goods and services amounted to $4.9 billion in
1976. U.S. military expenditures abroad, at
$4.8 billion, were little changed from a year
earlier.
Other service transactions showed a small net
increase in 1976, in large part because receipts
from foreign travelers in the United States in
creased faster than U.S. payments for foreign
travel and because fees and royalty receipts from
foreign affiliates of U.S. firms continued to
increase steadily.
319
5. W e ig h te d -a v e r a g e
e x c h a n g e v a lu e s o f th e U .S . d o lla r
M
arch 1973=100
DEFLATED BY FOREIGN TO DOMESTIC
Consumer
price ratio
W
holesale
ratio
Index of weighted-average exchange value of the dollar
against currencies of other Group of Ten countries plus Swit
zerland divided by the ratios of weighted-average foreign to
domestic wholesale and consumer price indexes. F.R. index
of dollar exchange value. Foreign price data from national
sources. Domestic price data from the U .S. Dept, of Labor,
Bureau of Labor Statistics.
N ov.-D ec. WPI estimated for the Netherlands.
C A P IT A L T R A N S A C T IO N S A N D
E X C H A N G E -R A T E M O V E M E N T S
The shift in the U.S. current-account position
from a surplus of $12.0 billion in 1975 to near
balance was, of course, matched by an equal
and opposite shift of capital flows from a net
outflow to a small inflow in 1976. Despite this
swing the Federal Reserve’s trade-weighted
measure of the exchange value of the dollar
against 10 leading foreign currencies appreci
ated 4.5 per cent during the year. The dollar
was supported by prospects for a slower rise
in prices in the United States compared with
the average abroad, official intervention pur
chases by Japan and several other countries, and
a decided preference by OPEC for dollar-denominated assets.
On a price-adjusted basis, the dollar showed
little movement in 1976 after having risen
sharply in the second half of 1975 (Chart 5).
The two price-adjusted dollar exchange rates
shown in the chart were calculated by dividing
the trade-weighted average exchange value of
the dollar by the ratio of foreign to domestic
price indexes, both consumer and wholesale.
Indeed, the net change in the dollar’s exchange
value over the nearly 4 years of generalized
floating has been quite consistent with move
ments in U.S. prices relative to those in other
countries, though there have been substantial
short-run deviations from this relationship.
Recorded net outflows of U.S. funds—
including transactions between U.S. banking
offices and banks abroad and net acquisitions
of assets abroad by U.S. residents and the U.S.
Government— increased by $2.6 billion in
1976, and recorded net inflows of foreign funds
rose by $8.7 billion. This shift in net recorded
capital inflows of $6.1 billion was equal to half
of the $12 billion swing in the current account.
Another large part of the financial adjustment—
or perhaps some error in compiling the currentaccount data— remains concealed within the
statistical discrepancy, which grew by $5.9 bil
lion from 1975 to 1976.
It is likely that the large change in the statis
tical discrepancy reflected a net increase in
unreported capital items rather than any sub
stantial errors in recording merchandise or ser
vice transactions. One important type of capital
inflow that may have been underreported is an
increase in accounts payable, particularly those
related to petroleum imports. In addition, ex-
320
8.
Federal Reserve Bulletin □ April 1977
New foreign bond issues in the United States
In billions of dollars
Period
1974
1975
1976
Ql
Q2
Q3
Q4
.......................................
.......................................
.......................................
.....................................
.....................................
.....................................
.....................................
Total
Canada
2.4
7.2
9.8
2.9
1.6
3.0
2.3
1.7
3.2
5.2
2.0
.9
1.3
1.0
Development
finance
institutions1
2.0
1.7
.3
European
Community’s
organizations2
.l
.4
.6
.3
.9
.5
"3
Developed
countries
Developing
countries
.2
1.2
1.6
.5
.3
.4
.4
.4
.4
.7
.1
.l
3.4
.1
1Includes the Asian Development Bank, the Inter-American Development Bank, and the World Bank.
2Includes the European Coal and Steel Community, European Economic Community, and the European Investment Bank.
3Includes National Power Company of the Philippines issue guaranteed by the U .S. Export-Import Bank.
N o t e . — Data from F.R. Bank of N e w York.
pectations of sharp declines in the exchange
values of some currencies— for example, the
British pound, the Italian lira, the French franc,
and the Mexican peso— coupled with political
uncertainties in some countries, may have
prompted some flight of capital to the United
States that was not recorded.
Although reduced from the 1975 total, the
net outflow of bank-reported private capital in
1976 still amounted to almost $10 billion. This
high level of net foreign lending by U.S. bank
ing offices reflected a continued strong foreign
demand for U.S. bank credit at a time when
the domestic demand for bank credit was
weak— owing to a combination of improved
corporate cash flow, favorable access to capital
markets for new equity and bond financing, and
cautious revivals of capital spending and inven
tory investment. A substantial part of the foreign
demand was in the form of official borrowings
for balance of payments purposes. In 1976,
banking offices (including agencies and
branches of foreign banks) supplied $7.4 bil
lion, net, to foreign commercial banks (includ
ing their own overseas branches). These funds
supported lending in the Euro-currency market
and provided liquidity that facilitated the issuing
of a record volume of Euro-bonds.
The decline in U.S. interest rates provided
an incentive for the pronounced acceleration of
the outflow in the fourth quarter of 1976. Much
of the outflow occurred in December, when the
demand for funds by European banks was aug
mented by a desire to build up stocks of liquid
domestic assets in order to “ window-dress”
year-end balance sheets. The rise in private
bank-reported flows in December was offset by
additions by European central banks to their
dollar holdings in the United States, accommo
dating the demand for domestic liquidity on the
part of the head offices of the European banks.
The U.S. bond market was an important
source of funds for borrowers from indus
trialized countries and multinational develop
ment institutions in 1976. New bond flotations
by foreigners were at a rate of $9.8 billion in
1976. As in previous years, Canadians were the
largest foreign borrowers in the United States.
Their total new bond placements amounted to
$5.2 billion, an increase of $2 billion over those
of 1975. A major incentive for the increase in
Canadian bond flotations was the unusually
large differential that persisted until the end of
the year between Canadian and U.S. long-term
interest rates, a product of a relatively restrictive
Canadian monetary policy.
After the Quebec provincial election in N o
vember, the interest rate premium on bond
issues by Quebec in the United States increased
sharply. Nevertheless, this rise did not have
much effect on Canadian borrowings in 1976
because no large new bond issues by Quebec
had been scheduled for the remainder of the
year. The larger interest premium has, however,
decreased, or at least delayed, some Canadian
bond issues in the United States in 1977.
Borrowers who had been subject to the inter
est equalization tax (those from developed
U.S. International Transactions
countries, other than Canada, and the EC’s
organizations) placed $2.2 billion in the U.S.
bond market in 1976 compared with a negligible
amount in 1975. Unlike borrowers from the
developing countries, these issuers found that,
owing to their preferred credit standing, a por
tion of their balance of payments financing
needs could be satisfied in the U.S. bond mar
ket. France, Australia, and Norway were the
three largest individual country borrowers
among the issuers of so-called Yankee bonds.
U.S. reserve assets increased by $2.5 billion
in 1976. The increase was mostly the counter
part of foreign countries’ drawings of dollars
from the International Monetary Fund (IMF),
which automatically result in an increase in the
U.S. reserve position in the IMF. The IMF
credit facilities were utilized intensively during
1976 to provide the financing of balance of
payments positions of various countries. The
United Kingdom was the largest drawer on the
IMF’s General Account facilities, while the
liberalized Compensatory Financing Facility
provided funds for more than 40 developing
countries that are members of the IMF.
The increase of $9.5 billion in OPEC official
assets in the United States was only moderately
above that of 1975, despite a larger rise in
OPEC’s collective current-account position in
1976. However, as already noted, some of the
unrecorded inflows may have been associated
with accounts due to OPEC.
Non-OPEC countries as a group increased
their official assets in the United States by $8.0
billion— a capital inflow— after a reduction of
$0.5 billion in 1975. The net swing was partly
the result of a build-up by Japan of reserves
held in the United States. Excluding Japan,
developed countries reduced their reserve hold
ings in the United States during 1976, while
the developing countries added to their reserves
held here. Developing countries also collec
tively added to reserves held outside the United
States. These reserve increases included some
special cases, but they also reflected a desire
on the part of a few developing countries to
tap international sources of credit under the
relatively favorable borrowing conditions of
1976.
321
RECENT DEVELO PM ENTS
A N D OUTLOOK
The U.S. merchandise trade deficit increased
substantially in the first 2 months of 1977.
Though some of the increase can be attributed
to the unusually cold weather, the continuation
of the pattern of more rapid growth in the United
States than abroad that began in 1975 is likely
to result in increasing U.S. merchandise trade
and current-account deficits throughout 1977.
However, the increase in these deficits between
1976 and 1977 will probably be smaller than
the shifts between 1975 and 1976. Conse
quently, further adjustments in the over-all U.S.
capital account need not be so large.
As U.S. imports of merchandise have risen
with the relatively strong U.S. recovery, pro
tests that various U.S. industries are being
damaged by competing goods from abroad have
increased. Although individual cases should be
judged on their merits, it should also be recog
nized that a rise in U.S. imports of goods
relative to exports over the long term might be
expected on the basis of the changing structure
of U.S. international accounts. Part of such a
shift would reflect the gradual industrialization
of some developing countries, whose growth is
dependent on finding markets in the high-income countries. In fact, imports of manufac
tures from such countries rose from $10 billion
in 1975 to $14 billion in 1976, about 32 per
cent of the total rise in U.S. imports of manu
factures. In recent years there has also been a
very rapid rise in the net receipts in the service
and military sectors of the U.S. international
accounts, from $2.4 billion in 1973 to $13.3
billion in 1976. In addition, a move toward
deficit in the merchandise trade balance will help
contribute to a healthier pattern of world pay
ments in light of continuing OPEC current-ac
count surpluses.
Changes in U.S. international transactions in
the period ahead will be part of a larger pattern
of international adjustment. The pace of recov
ery in other industrial countries is expected to
be slow on average. Many of these countries
will seek to reduce their external deficits. Con
sequently, the aggregate deficit of this group of
countries might be somewhat lower than in
322
Federal Reserve Bulletin □ April 1977
1976, which would offset some of the increase
in the U.S. deficit. Barring a reduction in the
cartel price of oil, the OPEC surplus is not likely
to change significantly. Hence, the non-oilproducing, less-developed countries, after re
ducing their aggregate deficit substantially dur
ing 1976, may have difficulty reducing it further
this year. This suggests that there may be a
larger role in the future for official financing
of balance of payments deficits. Such financing
may be necessary to ease the strain on private
markets.
On balance, therefore, the problems asso
ciated with considerable slack in the world
economy, with continuing high inflation rates,
and with large external deficits for many coun
tries— exacerbated by the sharp rise in oil
prices— are not likely to diminish quickly. In
these circumstances, it is especially important
to guard against a resurgence of measures to
restrict trade and instead to emphasize the ben
efits of achieving adjustment through a steady
noninflationary expansion of the world econ
omy.
□
323
The Implementation of
Monetary Policy in 1976
This article is adapted from a report subm itted
to the Federal Open M arket Committee by A lan
R. H olm es, M anager of the System Open M a r
ket A ccount and Executive Vice President o f the
Federal R eserve Bank of N ew York, and by
Peter D. Sternlight, D eputy M anager fo r D o
mestic Operations of the System Open M arket
Account and Senior Vice President of the N ew
York Bank. John S. H ill, Senior Economist,
and Christopher J. M cCurdy, Economist, were
prim arily responsible fo r its preparation.
The Federal Open Market Committee (FOMC),
in setting open market policy in 1976, sought
to foster economic expansion following the
1974-75 recession and to achieve further mod
eration in the rate of inflation. The dampening
of inflationary expectations that emerged con
tributed to a considerable decline in long-term
interest rates, and over the course of the year,
the credit markets financed another large Federal
deficit more readily than had been generally
anticipated.
The Committee’s decisions were heavily in
fluenced by its perception of the tempo of the
economic recovery, which first speeded up and
then slowed down. A surge in activity early in
the year generated expectations of continued
strong economic expansion that might necessi
tate actions to restrain growth of the monetary
aggregates. When the aggregates grew strongly
in the spring, the Committee began limiting the
extent to which it accommodated the demand
for member bank reserves. As the summer pro
gressed, however, the rate of economic expan
sion moderated and growth of the labor force
began to exceed growth of employment. The
rate of monetary expansion also receded. Grad
ually, the FOMC shifted emphasis to promote
a step-up in the growth of the aggregates
through a more accommodative approach to the
provision of reserves. By the year-end the pace
of economic advance seemed to be quickening
once more.
In formulating its broad policy approach, the
Committee continued to focus on a 1-year time
horizon for growth of the monetary and credit
aggregates. It also adopted short-run instruc
tions that prescribed a Trading Desk response,
through open market operations, to indications
of undesired strength or weakness in the mone
tary aggregates. The Committee’s instructions
to the Account Management were in essentially
the same format as in recent years. In imple
menting its instructions, the Trading Desk found
market participants in 1976 acutely sensitive to
movements in the monetary aggregates as well
as to the conduct of open market operations.
At the same time, recent changes in the Treas
ury’s cash management policies increased the
volatility of Treasury cash balances and thereby
posed difficult operational challenges to the
Desk.
This report focuses on the Trading Desk’s
implementation of the FOMC’s directives dur
ing the year. After presenting an overview of
the Committee’s policy decisions in 1976, it
describes the procedures used by the Desk to
bring reserve supplies into line with the Com
mittee’s objectives. It discusses particularly in
teresting periods in detail in order to illustrate
how the Desk carried out operations against the
background of the sensitive financial environ
ment that prevailed over much of the year.
M O N E T A R Y P O L IC Y
A N D T H E F IN A N C IA L M A R K E T S
Establishing Growth R anges
In seeking both sustainable economic expansion
and a reduction of price inflation, the Committee
on balance lowered its ranges for annual growth
324
Federal Reserve Bulletin □ April 1977
Federal Open Market Committee’s annual growth ranges for
monetary aggregates and adjusted bank credit proxy
Seasonally adjusted annual percentage rates
Period
1975
1975
1976
1976
1976
Q3
Q4
Ql
Q2
Q3
M onth established
to
to
to
to
to
1976
1976
1977
1977
1977
Q3
Q4
Ql
Q2
Q3
O ctober 1975
January 1976
April 1976
July 1976
N ovem ber 1976
M-1
5 to
to
to
to
to
AV2
4V2
4V2
4 y2
M -2
IV2
IY2
7
7
6^2
of the major monetary aggregates (see table).
At its October 1975 meeting, the Committee had
set a range of 5 to I V 2 per cent for growth of
M-1— demand deposits plus currency in the
hands of the public— over the four-quarter pe
riod ended in the third quarter of 1976. In
January 1976 it reduced the lower limit of this
longer-run range by Vi of a percentage point.
Later it narrowed the range through two reduc
tions in the upper end of V of a percentage
2
point each. Thus, the range adopted for M-1
in November 1976 for the annual period ending
in the third quarter of 1977 was 4V£ to 6 V per
2
cent.1 The annual range for M-2— M-1 plus time
and savings deposits at commercial banks other
than large negotiable certificates of deposit
(CD’s)— had been set at IV2 to IOV2 per cent
at the October 1975 FOMC meeting and the
range was reduced, on balance, through subse
quent modifications, to IV2 to 10 per cent for
the annual period ending in the third quarter of
1977. At the October 1975 meeting the Com
mittee had adopted a range of 9 to 12 per cent
for M-3— M-2 plus deposits at thrift institutions.
A range of 9 to IIV2 per cent was established
about a year later in November 1976.2
JOne factor influencing the Committee’s decision to
reduce the growth range in November was increasing
efficiency in the use of cash balances. The growth of
transactions balances held in the form of M-1 was
curtailed by the growing use of overdraft facilities,
negotiable orders of withdrawal accounts, savings ac
counts that permit telephonic transfers to checking ac
counts or settlement of monthly bills, and savings
accounts by businesses and State and local governments.
One study by John Paul us and Stephen H. Axilrod
(Board of Governors of the Federal Reserve System,
“ Recent Regulatory Changes and Financial Innovations
Affecting the Growth of the Monetary Aggregates” )
indicated that, without these developments, the growth
of M-1 in the year ended in the third quarter of 1976
might have been roughly IV2 to 2 percentage points
higher than actually occurred.
2This note appears in opposite column.
IV2
IV2
IV2
7V2
7*/2
to
to
to
to
to
M -3
WV2
10 V
2
10
9V2
10
9
9
9
9
9
to
to
to
to
to
12
12
12
11
11 %
Credit proxy
6 to 9
6 to 9
6 to 9
5 to 8
5 to 8
The Committee, in assessing the growth of
the monetary aggregates early in the year, ex
pected the demand for money to pick up in view
of projected gains in economic activity. There
had been an unusually rapid increase in the
income velocity of M-1 in the second half of
1975. However, there was uncertainty whether
innovations in the management of cash would
continue to depress the rate at which demand
balances would grow, given the expected gains
in income and prevailing interest rate levels
After a slow start, growth in M-1 strengthened
markedly during the spring and reached an
average annual rate of 7 per cent, seasonally
adjusted, over the first 5 months of the year.
Its expansion moderated thereafter, and only in
October did it again display significant strength.
Measured from the fourth quarter of 1975 to
the fourth quarter of 1976, M-1 increased 5Vz
per cent. Commercial bank time and savings
deposits other than large CD’s grew rapidly
during the year, as the interest rates on passbook
accounts proved attractive in comparison with
market rates. Consequently, M-2 grew by 11
per cent.
Im p l e m e n t a t io n o f t h e
F O M C ’s P o l i c y O b j e c t i v e s
Efforts of the Open Market Committee to
achieve its longer-run objectives required con
tinuing judgments on the extent to which open
market operations should supply nonborrowed
reserves in relation to the demand for them.
After a brief move toward augmenting reserve
2The upper ends of the ranges for M-2 and M-3 were
reduced around midyear, but they were raised slightly
in November because time and savings deposit inflows
appeared likely to remain heavy, given that market
interest rates had declined relative to those paid by banks
and thrift institutions.
The Implementation of Monetary Policy in 1976
availability and lowering the Federal funds rate
during the first 2 weeks in January, the Com
mittee was content to see Federal funds continue
to trade around 4 3 per cent through the winter.
A
Policy directives issued following the January
and February meetings instructed the Account
Management to maintain prevailing money
market conditions unless the growth rates of the
monetary aggregates appeared to be deviating
significantly from the midpoints of their speci
fied short-run ranges. Indications of strong
growth of the aggregates at the end of February
led to a very slight shift toward a less accom
modative stance, but this was reversed soon
afterward on the basis of further information.
The Committee continued to hold to a steady
course until mid-April. Then, rapid growth of
the aggregates, especially in M -l, and evidence
of a vigorous economic expansion prompted a
shift toward a less accommodative stance that
had been long expected in the financial markets.
The System provided nonborrowed reserves less
freely, and the Federal funds rate rose by 3
A
of a percentage point over the next 6-week
period to 5Vi per cent by the end of May.
During the second half of the year, as evi
dence developed that over-all economic growth
had slowed, the thrust of open market operations
was toward easier money market conditions.
The initial approach of the Committee was rela
tively cautious. At the June meeting it set a
narrower-than-usual range for movements in the
Federal funds rate, and at the August meeting
it stressed the maintenance of stability in money
market conditions. As concern about the eco
nomic outlook increased, however, at its Sep
tember meeting the Committee opted for a range
for the Federal funds rate that provided more
rdom for downward than for upward movement.
Thereafter, the Committee acted to promote a
more accommodative financial climate. The
trading level for Federal funds declined in three
stages from about 5 lh per cent at midyear to
around 4% per cent at the year-end.
B e h a v io r o f F in a n c ia l M a r k e t s
Expectations of market participants were greatly
responsible for the sharp rise in interest rates
that developed during the spring. Even though
325
interest rates had declined substantially since the
previous autumn, market participants generally
anticipated a cyclical upturn in rates during the
year. Their expectations were based on a pre
sumption that expanded private credit demands
would compete with heavy Federal borrowing
in a period when the Federal Reserve was likely
to be taking steps to restrain growth of the
money stock.
When reserve conditions did tighten briefly
in late February, market interest rates rose
sharply and returned to previous levels only
gradually, even after the tightening in reserves
proved to be temporary. When the Federal funds
rate rose 75 basis points between mid-April and
late May, other short-term rates advanced by
as much as 80 to 100 basis points; long-term
yields rose roughly 40 basis points. In the mar
ket for Treasury securities these rate increases
were larger than the declines that had developed
earlier in the year.
These expectations that interest rates would
rise over the rest of the year proved wrong.
Economic growth decelerated in the second
half, while the Federal deficit turned out to be
smaller than had been anticipated. Domestic
corporations reduced their borrowings in the
bond market in the second half as capital
spending recovered slowly. This environment
led investors— flush with cash and encouraged
by the progress being made in dampening infla
tionary forces— to push yields significantly
lower over the final 7 months of the year. By
December, rates on Treasury bills were as much
as 125 basis points below the levels that had
prevailed at the beginning of the year. Yields
on long-term Treasury issues were down by
about 75 basis points, while those on corporate
and tax-exempt issues showed substantially
larger declines. In some markets, long-term
interest rates were at their lowest levels in about
3 years.
During 1976 the Treasury raised $58 billion
of new cash, second only to the record amount
raised in 1975. It also extended the average
maturity of its debt for the first year since 1964.
It continued to regularize its debt offerings and
to reduce uncertainty about prospective financ
ings by keeping the market informed about its
borrowing plans. The Treasury filled the re
326
Federal Reserve Bulletin □ April 1977
maining maturities in its monthly 2-year note
cycle and established quarterly 4- and 5-year
note cycles. New Federal legislation aided the
Treasury’s debt extension program by extending
the maximum maturity of Treasury notes from
7 years to 10 years and by increasing from $10
billion to $17 billion the amount of long-term
bonds that could be issued without regard to
the 4 lA per cent interest rate ceiling.
The Treasury took advantage of this added
flexibility by offering an intermediate-term note
and a long-term bond in each of its quarterly
refundings as well as a short-term 2- or 3-year
note. In the first three refundings the Treasury
sold one 7-year and two 10-year notes, with
fixed coupons and prices, through subscription.
All other securities were sold on an auction
basis. The subscription sales drew heavy de
mand for the attractively priced notes, enabling
the Treasury to increase the total size of the
subscription issues to $18.5 billion, $7.5 billion
more than the amounts initially offered.
The volume of secondary market trading in
U.S. Government securities expanded consid
erably in 1976; flurries of speculative activity
contributed to periods of unusual price volatil
ity. The increase in trading activity stemmed
partly from the large volume of Treasury fi
nancing. But there was also a surge in the
trading activity of portfolio managers who
sought to outperform the rate of return provided
by more conservative investment strategies.
Traders necessarily sought to anticipate the fu
ture course of rates by analyzing economic and
monetary data as they appeared and by project
ing the data yet to be published. In this envi
ronment, participants were often quick to react,
or to overreact, to new data that they thought
might presage shifts in monetary policy and
credit conditions.
Most sectors of the economy added further
to their liquidity, continuing the rebuilding
process that had dominated credit markets in the
previous year. Corporate borrowers flocked to
the bond market during the first half, reducing
their short-term debt and seeking to secure
long-term funds before the expected rise in
interest rates. At the same time, favorable cash
flows generated by the rebound in corporate
profits allowed businesses to finance a substan
tial portion of their capital needs internally. As
a result, the pick-up in short-term borrowing by
businesses from banks and in the commercial
paper market over the second half of the year
fell short of participants’ anticipations. More
over, the entire rebound in the aggregate of
business loans at banks reflected acquisitions of
bankers acceptances.
Commercial banks, disappointed by the slack
demands of their business customers, turned to
buying intermediate-term Treasury coupon se
curities in order to take advantage of the higher
returns available toward the longer end of the
upwardly sloping yield curve. Thrift institutions
easily accommodated the rising demand for
mortgages as their deposits continued to expand
rapidly. In addition, they continued to rebuild
their liquidity, although not by so much as in
1975.
Long-term tax-exempt issues posted larger
yield declines over the year than taxable securi
ties. Investors largely overcame the acute fears
that had been triggered by New York City’s
financial problems in late 1975— although New
York City itself did not regain access to the
market for its own obligations. In addition, with
an improved earnings position, fire and casualty
insurance companies expanded their interest in
tax-exempt securities, and commercial banks
also showed some renewed interest in such
issues as the year progressed.
T E C H N IQ U E S
O F P O L IC Y IM P L E M E N T A T IO N
The FOMC’s instructions to the Manager of the
System Open Market Account regarding the
management of bank reserves provide— to a
considerable extent— for the accommodation of
the public’s demand for money in the short run,
while at the same time prescribing a response
when growth of money appears inconsistent
with the Committee’s long-term objectives. At
each meeting the Committee specifies conditions
to be achieved for bank reserve availability as
measured by the Federal funds rate. It also
specifies a procedure for changing the Federal
funds rate within designated limits if current
projections of growth in the monetary aggre
The Implementation of Monetary Policy in 1976
gates indicate significant weakness or strength
relative to ranges specified by the Committee
for the 2-month period covering the month of
the latest meeting and the following month.
In 1976, the Committee instructed the Desk
to assign approximately equal weight to M-l
and M -2 in evaluating the short-run behavior
of the aggregates, rather than placing primary
emphasis on M-l as it had in the past. The
Committee continued to include in its directive
an instruction that the Manager take account of
developments in the domestic and international
financial markets.
Following each FOMC meeting, the Account
Manager seeks to achieve the Committee’s cur
rent objectives through operations in Treasury
and Federal agency securities and bankers ac
ceptances. Decisions about the size and type of
operations and their timing are based partly on
projections of reserve availability. The Manager
also looks to the behavior of the Federal funds
rate for additional information on factors affect
ing the supply of, and demand for, bank re
serves. But participants in the Federal funds
market have become more reluctant to trade at
rates that they perceive to be out of line with
the System’s objective. Thus, the role of the
funds rate as a short-run objective for open
market operations tends to reduce its usefulness
as a guide to reserve availability. Furthermore,
the Manager, in shaping open market opera
tions, has to take into account the sensitivity
of market expectations to the behavior of the
funds rate.
In evaluating the prospective behavior of the
Federal funds market, the Manager and his staff
seek to appraise the demand for, and supply of,
bank reserves over the statement week ending
on Wednesday. Member banks must meet their
reserve requirements on average each week, and
in addition they hold some margin of excess
reserves as the result of the rapid shift of bal
ances within the banking system. Required re
serves are determined by deposits on the banks’
books 2 weeks earlier and are thus known by
each bank and the Federal Reserve at the start
of the statement week. The Manager estimates
the excess reserves that banks are likely to hold,
taking into account seasonal deposit flows, the
size and distribution of reserve excesses (or
327
deficiencies) carried over from the previous
week, the presence of holidays or statementpublishing dates, and interest rate movements.
The Manager then has in hand an estimate of
the total reserves likely to be demanded by the
banking system in the current week.
With these demand considerations in mind,
the Manager reviews projections of the supply
of nonborrowed reserves in the banking system
for the week. These projections estimate the
impact on reserves of “ market factors,” such
as Federal Reserve float, currency in circulation,
and the Treasury’s balance at the Federal Re
serve Banks. The Manager will then have an
estimate of nonborrowed reserve levels stretch
ing out 4 to 6 weeks into the future, based on
the assumption that the Trading Desk takes no
action to affect reserves.
The Manager is thus able to compare the
projected level of nonborrowed reserves over
the week ahead with estimates of total reserves
demanded. He can then determine the appro
priate volume of reserves to be added or sub
tracted on a daily-average basis if open market
operations are to maintain the existing rate on
Federal funds. In doing this, account is taken
of the expected addition to reserves likely to
arise from borrowings at the discount window.
The Manager’s approach to operations each
week is shaped partly with an eye on the extent
to which nonborrowed reserves in subsequent
weeks are expected to fall short of, or exceed,
projected reserve requirements. If reserve defi
cits extend into future weeks, the Desk is more
likely to use outright purchases of securities to
meet a reserve need. If the need is temporary,
greater reliance on repurchase agreements is
likely. Conversely, when reserve surpluses are
projected over several weeks, outright sales and
redemptions of maturing securities may be ap
propriate. If there is only a temporary need to
absorb reserves, matched sale-purchase transac
tions are employed.3
3The System temporarily adds reserves through
repurchase agreements and withdraws reserves through
matched sale-purchase transactions. In making repur
chase agreements, the Desk enters into a contract under
which dealers sell U .S. Government securities, Federal
agency issues, and bankers acceptances to the System
and agree to buy them back at a specified time, usually
1 day to a week later, at the same price plus a competi-
328
Federal Reserve Bulletin □ April 1977
The Manager also relies on the behavior of
trading in Federal funds as a source of additional
information on the supply and demand forces
affecting the money market. The Desk may
defer putting its program into effect until the
trading level of Federal funds in the money
market confirms the statistical estimates of re
serve availability. Care is taken to avoid actions
that might lead to misinterpretation of the Sys
tem’s intentions by market participants. Thus,
when a need to supply reserves is anticipated,
the Manager may wait for the funds rate to edge
up at least to or above the operational objective
before entering the market. When an over
abundance of reserves is projected, the Manager
may wait for the funds rate to edge down at
least to or below the objective before entering
the market to absorb reserves.
At times, the money market may not reflect
the projected conditions of reserve abundance
or scarcity. In this case the Manager may merely
delay carrying out his plans to affect reserves.
However, when reserves are estimated to be
abundant (scarce) and the funds rate threatens
to rise (fall) significantly above (below) the
desired level, that situation calls into question
the accuracy of the estimates of the supply of,
and the demand for, reserves. The System’s
absence from the market in that event could be
misleading, and the Manager is likely to enter
the market to counteract undesirably firm (easy)
conditions.
The value of the Federal funds rate as an
indicator of the conditions of reserve availability
probably has diminished in recent years. Large
shifts in the Treasury’s balances at the Reserve
tively determined rate of return. The Desk generally
permits dealers to offer customer securities as well as
the dealers’ own holdings. Repurchase agreements ei
ther may allow dealers to buy securities back at a date
earlier than specified initially or may not allow such
early withdrawals— an alternative form introduced in
1976. The Manager’s decision on the amount of securi
ties to be purchased is partly based on the statistical
estimates of reserve supplies. The volume and aggres
siveness of the dealers’ offerings provide additional
information on the size of the reserve need. Under
matched sale-purchase transactions the System sells
Treasury bills to the market, and at the same time
contracts to buy them back on a certain day, usually
up to a week later. The rate at which bills are sold
and repurchased is set through competitive bidding by
the dealers. Matched sale-purchase transactions cannot
be terminated before maturity.
Banks have led to much greater day-to-day
volatility in the level of nonborrowed reserves.
Exposed to such volatility, money position
managers at the banks are less likely to react
to the immediate ebb and flow of funds because
they expect the Federal Reserve to compensate
for these massive surges. They appear to be
willing to accumulate larger reserve deficits or
surpluses before taking offsetting actions in the
Federal funds market. Thus, the actual Federal
funds rate tends to remain close to the market’s
perception of the System’s objective for the rate
until rather late in a statement week.
The primary source of the large shifts in the
Treasury’s balance has been the Treasury’s cash
management policy of holding the bulk of its
balances at the Federal Reserve Banks rather
than in its tax and loan accounts at commercial
banks. The Treasury’s balance at the Federal
Reserve tends to fall early in the month as social
security and other regular payments are made
and then to rise later in the month when taxes
and other revenues are received. The average
weekly change in the Treasury’s balance at the
Reserve Banks amounted to $2 billion in 1976,
a 45 per cent increase from 1975 and a fourfold
increase from 1974. In 14 weeks in 1976 the
change exceeded $3 billion. As a result, the
Trading Desk undertook substantially enlarged
operations just to counteract short-run swings
in bank reserves.
Faced with shifts in reserves of this magni
tude, the Manager often needs to enter the
market very early in the week to take offsetting
action. But the reserve estimates available at the
start of a week are often in error— by about $490
million on average in 1976, a 55 per cent
increase from the year before. Since Federal
funds tend to trade close to the market’s per
ception of the Desk’s objective, it is difficult
to get confirmation from the money market of
the magnitude of the reserve need or surplus
before the calendar weekend. To deal with this
situation the Manager may seek to compensate
for a major part of the reserve swings by an
nouncing, on Wednesday, intentions to supply
or to absorb reserves on the first day of the
forthcoming statement period.4 Even so, the
4This note appears on opposite page.
The Implementation of Monetary Policy in 1976
scale of operations needed after the weekend
often remained quite large.
The Account Management often has the op
tion of engaging directly in transactions with
foreign accounts to carry out System reserve
objectives rather than acting as agent to execute
these foreign orders with dealers in the market.
For example, when the Desk receives foreign
orders to buy securities, it may elect to meet
such orders by selling directly from the Sys
tem’s own portfolio at prevailing market prices.
Similarly, when the foreign order is to sell
securities, the Desk may buy for the System
Account. When the Desk arranges foreign
transactions with the System Account in this
way, the transactions have the same effect on
bank reserves as System operations through
dealers in the market.
Foreign accounts often also have funds avail
able for overnight investment. When this is the
case, the Desk may arrange matched sale-pur
chase transactions with the System Account to
drain reserves overnight rather than to act as
agent and place these funds in the market as
repurchase agreements with dealers. When a
reserve abundance is projected, System matched
sale-purchase transactions made directly with
foreign accounts can help to reduce the excess.
Moreover, when the reserve levels are expected
to be approximately satisfactory, or in some
what short supply, and the Federal funds rate
is below the desired level, transactions directly
with foreign accounts can sometimes be used
to encourage a firming of conditions in the
money market.
OPEN M ARK ET
O P E R A T IO N S IN
1976
Ja n u a r y t o M i d - A p r il
The FOMC’s view at the beginning of the year
was that the economy was expanding in an
orderly manner, as industrial production, retail
sales, and employment all displayed good-sized
4 Reserve operations affecting an entire week have
been employed with increasing frequency. The Manager
arranged 6- or 7-day operations either to add or to absorb
reserves during 28 weeks in 1976. Futhermore, nine
of the week-long repurchase operations were annou need
329
gains. Although growth in the money stock was
expected to rebound from the slow rate that had
developed during the second half of 1975, there
were significant uncertainties in the forecast. It
was difficult to assess the impact on growth of
M-l likely to result from continued techno
logical change in business and household man
agement of cash balances and from the further
growth of savings accounts recently authorized
for businesses. Moreover, seasonal adjustment
of the money stock was problematical, with
alternative adjustment techniques producing
different results.
Against this background, the Committee pre
ferred not to allow modest deviations in the
projected growth of the aggregates relative to
the Committee’s short-run ranges to prompt
changes in the Desk’s Federal funds rate objec
tive. The directives issued after the January and
February meetings instructed the Manager to
maintain prevailing money market conditions
unless growth of the aggregates deviated signif
icantly from the midpoints of their specified
ranges.5 Such a “ money market” directive
places primary emphasis on maintaining pre
scribed money market conditions.
At the January 1976 meeting, the Committee
specified ranges for the aggregates that were
somewhat wider than usual. This specification
reduced the likelihood that the Federal funds
rate would change. The behavior of the money
stock measures was divergent in the weeks that
followed, but taken together the estimates for
the 2 months ended in Feburary did not warrant
a change in reserve conditions. M -l remained
near the bottom of its range, while M-2 was
at or above the top of its range.
A money market directive was also adopted
in February. But the aggregates showed strength
shortly thereafter, with estimates of both M-l
and M-2 moving well up in their ranges. Acto the dealers on Wednesday afternoon and executed
on Thursday morning to allow the dealers additional
time to round up securities from customers. Prean
nouncing also diminished any significance that might
be attached to the funds rate prevailing when the trans
actions were completed the next day.
5 When significant weakness had developed in the
aggregates during late December and early January, the
Desk had lowered the Federal funds rate objective to
4 3 per cent.
A
330
Federal Reserve Bulletin □ April 1977
cordingly, the Trading Desk sought to hold back
slightly on supplying nonborrowed reserves rel
ative to the emerging demand by banks. On
Friday, February 27, it began seeking conditions
consistent with Federal funds edging up from
4% per cent to a 4 3 to 4% per cent range.
A
That afternoon, when Federal funds were trad
ing at 4 1 /16 per cent, the Desk entered the market
3
as agent to arrange repurchase agreements for
customer accounts. This was contrary to market
expectations that the Desk would enter to pro
vide reserves on behalf of the System when
funds were trading at that level. It was inter
preted by participants as indicating a change in
the System’s previous stance. The funds rate
moved swiftly to 4 1 /16 and 5 per cent that
5
afternoon, though this occurred when it was too
late for the Desk to make any significant volume
of repurchase transactions for its own account
for payment that day. By Monday funds were
trading at 5 per cent and above, and the Desk
provided reserves in volume. The money market
remained unduly tight until shortly before the
end of the statement week even though the
banking system held a substantial volume of
excess reserves at the week’s end.
The financial markets had expected interest
rates to move higher in view of the improvement
in the economy, but the late-February evidence
of firming by the System occurred sooner than
had been expected. Interest rates moved up
sharply: the rate on 3-month Treasury bills rose
by around 30 basis points over the week, while
long-term bond yields moved about 15 basis
points higher.
During the following statement week, new
data suggested that the aggregates were not, in
fact, moving outside the Committee’s tolerance
ranges, and the Desk returned to the 4 3 per
A
cent Federal funds rate objective. A surfeit of
reserves was being provided by a declining
Treasury balance, but the surfeit had to be
reinforced by additional System reserve injec
tions in order to put enough downward pressure
on the funds rate to bring it close to 4 3 per
A
cent by the week’s end. Other markets were
somewhat slower to settle back. Participants in
these markets continued to view underlying ec
onomic conditions as suggesting a rise in short
term rates.
At its March meeting the Committee favored
essentially little change in conditions of reserve
availability but expressed greater willingness at
that point to resist any strengthening that might
develop in the monetary aggregates. Conse
quently, the Committee voted for an “ aggre
gates” directive, the more common form of its
operational instructions. Such a directive places
primary emphasis on the behavior of the aggre
gates, thereby establishing a somewhat greater
likelihood that conditions of reserve availability
will be altered between meetings. The aggre
gates, in fact, behaved about as expected over
the next month, and thus the Federal funds rate
remained around 4 3 per cent through midA
April.
M i d - A p r il t h r o u g h M a y
At the April and May meetings the recovery
appeared to be proceeding at a vigorous pace,
with preliminary estimates indicating that real
gross national product (GNP) had expanded at
a IV2 per cent rate in the first quarter. The
outlook for economic growth appeared bright,
with prospects of further inventory accumula
tion and continued sizable advances in consumer
spending. Also the underlying demand for
money appeared to be strengthening. Growth in
M -1 in February and March had averaged about
6 per cent at an annual rate, and the staff
projected very rapid growth in April. Expansion
in M-2 and M-3 was also quite fast. Most
members preferred to restrain such strong
growth of the aggregates and were willing to
tolerate some firming in money market condi
tions after both the April and the May meetings.
At the April meeting the Committee directed
the System Account Manager to seek reserve
conditions consistent with Federal funds trading
around 4% per cent— within a tolerance range
of 4Vi to 5 lA per cent. In addition, the Commit
tee’s directive allowed the Desk to respond
further to indications of undesired strength in
the money supply. Throughout the interval be
tween the two meetings, expected growth in the
aggregates was high relative to the Committee’s
specified ranges, prompting the Account Man
agement to continue to hold back on nonbor
rowed reserves in relation to demand. By the
The Implementation of Monetary Policy in 1976
time of the May meeting, Federal funds were
trading at 5 X per cent, the top of the range.
A
The Committee called for an immediate increase
in the Federal funds objective to around 5 3 per
/s
cent, and by the end of May the Federal funds
objective had been raised to 5 x per cent under
h
an aggregates directive.
At the time of the Committee meeting in
April, interest rates on short- and long-term debt
had fallen to the lowest levels reached thus far
in the year. Three-month Treasury bills traded
at rates as low as about 4.70 per cent in midApril, and long-term Government bond yields
were down to around 7.80 per cent. Still, parti
cipants in the markets were cautious about the
interest rate outlook as they prepared to face
a large volume of offerings during the ap
proaching quarterly Treasury refunding. Indica
tions of vigorous economic growth strengthened
market expectations that the System might well
resist the rapid growth of the monetary aggre
gates that was emerging.
During the 6 weeks from mid-April to late
May, when the Desk pursued a less accommo
dative policy toward provision of reserves, the
yield curve for Treasury securities moved sub
stantially higher and flattened out a bit. Rates
on Treasury bills due in 3 and 6 months in
creased by about 90 basis points; yields on
coupon issues maturing in 3 to 7 years moved
up by about 55 to 70 basis points; yields on
long-term bonds advanced about 35 basis
points. During this period bond quotations be
came especially volatile, particularly on Thurs
day afternoons following publication of the
weekly money stock data, as participants sought
to anticipate future System actions. About
three-quarters of the over-all increase in yields
on long-term Treasury bonds over the period
was concentrated in market trading late on
Thursdays and during the day on Fridays.
One episode during this period provides an
interesting setting for examining the methods
that the Trading Desk uses to implement System
policy as well as the market’s response to the
Desk’s actions and other influences. Operations
during the bank statement week running from
Thursday, May 6, to Wednesday, May 12,
posed a particularly difficult challenge: how to
effect a change in the System’s posture while
331
contending with volatile reserve flows and sen
sitive securities markets in the midst of a Treas
ury refunding operation. Prior to the start of that
statement week the System’s operations had
already led to a rise in the Federal funds rate
from about 4 3 per cent in mid-April to a 5
A
per cent level in early May.
On the first day, Thursday, May 6, reserve
projections indicated that a fall in the Treasury’s
balance at Federal Reserve Banks would release
about $3 billion of reserves, on average, to the
banking system during the statement week be
ginning that day, although there would be some
offsetting reserve absorption by other factors.
These estimates thus pointed to an over
abundance of about $1 billion of nonborrowed
reserves that week. Federal funds were trading
at 4 1 /16 per cent, only slightly on the comfort
5
able side of the 5 per cent level sought at that
time.
In these circumstances the Desk sought ini
tially to absorb reserves unobtrusively, limiting
its operations to transactions directly with
foreign accounts. The System sold Treasury
bills outright to these accounts and also arranged
overnight matched sale-purchase transactions
with them, thereby meeting overnight invest
ment requirements of the foreign accounts.
Since overnight customer orders were not placed
in the market on Thursday, participants con
cluded that the Desk was draining reserves to
a certain extent. By early afternoon, however,
the weight of the reserve excess began to tell
in the money market, with funds threatening to
trade at 4% per cent. The Desk then entered
the market to drain reserves by arranging a
moderate amount of 4-day matched sale-purchase transactions. These efforts did not affect
the expectations of market participants because
the Treasury balance typically declines near the
start of each month and the need to drain re
serves was widely expected.
Through most of Thursday, prices of U.S.
Government securities had been edging lower
in quiet activity as the market adjusted to the
previous rise in the Federal funds rate. There
was also some nervousness because the market
was still awaiting the results of the Treasury’s
offering of 10-year 7% per cent notes— the
centerpiece of the May refinancing— on which
332
Federal Reserve Bulletin □ April 1977
subscriptions had been taken on the preceding
day. In this atmosphere, the announcement of
a large increase in the wholesale price index
added to the market’s concern about renewed
inflationary pressures. Then late in the day, the
weekly money stock data were released, show
ing a decline of $800 million in the level of
M-l for the statement week ended April 28.
However, this decline was smaller than some
market participants had expected and did little
to offset the substantial growth recorded in pre
vious weeks. Consequently, market observers
grew more concerned that the System might
continue to press for a higher trading level of
the Federal funds rate. In this uneasy market
atmosphere, securities prices continued to de
cline.
Market weakness persisted on Friday morning
after the Treasury announced that it would in
crease the size of the 10-year note issue by $1.2
billion to $4.7 billion because of heavy sub
scriptions from investors. While dealers and
others subscribing for large amounts had been
allotted 15 per cent of their subscriptions, some
of these subscribers by that time were hoping
to receive few, if any, of the new notes. Dealers
felt uncomfortable with their awards, and there
was further downward pressure on prices in
advance of the final refunding auction that day
of an additional $750 million of 77s per cent
bonds, due February 15, 2000. From the time
just prior to the release of the money stock data
to the close of trading on Friday, Treasury bill
rates rose about 5 to 12 basis points, while
prices of intermediate-term Treasury issues fell
about lA to % of a point. Prices of long-term
bonds fell about lVs points, as the market grew
less willing to take on additional bonds in the
auction.
On Friday morning the new projections of the
monetary aggregates continued to show unde
sirable strength. The data suggested that growth
of M -l would be well above the range of 4V2
to 8 V per cent specified by the Committee for
2
the April-May interval, while M-2 was running
well up in the 8 to 12 per cent range. This
information indicated that it would be appro
priate for the Desk to seek conditions of reserve
availability consistent with the Federal funds
rate moving up from about 5 per cent to around
5V per cent by Wednesday, the end of the
s
statement week.
In view of the sensitive state of the securities
markets in the midst of the Treasury’s refund
ing, the Desk proceeded cautiously in seeking
this adjustment. Reserve projections on Friday,
May 7, suggested adequate reserve availability
because of the System’s operations on the pre
vious day and a substantial downward revision
in the estimate of reserves likely to be released
by a decline in the Treasury balance. Federal
funds traded at 4 1 /16 per cent and then at 5 per
5
cent. In an effort to achieve a firmer money
market by Wednesday, the Desk again drained
reserves unobtrusively by selling Treasury bills
outright and arranging over-the-weekend
matched sale-purchase transactions, in both
cases with foreign accounts. Given the sensitive
state of the securities markets and the Treasury’s
long bond auction that day, no overt action to
drain reserves was taken in the market.
By Monday, new estimates of reserve avail
ability suggested the need to add about $1
billion to the weekly average, reflecting another
large downward revision in the estimates of
reserves expected to be provided by the decline
in the Treasury balance and other factors. With
Federal funds opening at 5 per cent, the Desk
confined its initial action to a modest purchase
of Treasury bills from foreign accounts. When
the funds rate began to rise above 5 per cent,
the Desk entered the market to fill a good portion
of the projected reserve deficit by arranging
3-day repurchase agreements.
The securities markets remained apprehen
sive. The bonds sold in Friday’s auction had
an average yield of 8.19 per cent, higher than
many had anticipated. Treasury bill rates rose
an additional 5 basis points or so during the
day, while prices of longer-maturity coupon
issues fell by nearly V point. The corporate
2
market also reflected supply pressures, as unsold
issues piled up in dealers’ inventories and a
heavy forward calendar grew even larger.
On Tuesday, reserve estimates indicated ade
quate availability for the week, due to the
Desk’s injection of the previous day and an
upward revision in the effect of market factors
on reserves of about $350 million for the week.
Federal funds traded predominantly at 5 Vie P^r
The Implementation of Monetary Policy in 1976
cent during the day. The Desk took no action
in the market to affect reserve supplies but did
drain reserves through matched sale-purchase
transactions with foreign accounts to establish
conditions that would promote a slightly firmer
money market on the following day.
Federal funds traded at 5 Vs per cent on the
morning of Wednesday, May 12, and reserve
projections indicated a moderate need to add
reserves for the statement week ended that day.
With conditions in the money markets about as
desired, the Desk arranged temporary invest
ment orders from foreign accounts in the market
and awaited further developments. Funds traded
steadily at 5Vs per cent until the noon hour and
then moved higher. The Desk entered the mar
ket at this point to provide reserves through
overnight repurchase agreements. The funds
rate thereafter moved back to about 5 Vs per cent.
The credit markets, still digesting the recent
Treasury offerings, remained quite sensitive to
the Desk’s toleration of higher trading levels in
Federal funds. Treasury bill rates moved up
about 5 to 12 basis points, and prices of coupon
issues generally fell by Vs to % of a point.
The Desk’s caution during the week stemmed
from the fragile state of the securities markets.
Until recent years, the System typically tried
to avoid changes in its posture with regard to
reserve management while the Treasury was
formulating its offering and while underwriters
were taking on and distributing Treasury se
curities on a large scale. Such “ even keel”
considerations have diminished considerably in
the past few years. The use of the auction
technique for selling coupon securities since
1970 has substantially increased the ability of
underwriters to adjust their expectations of fu
ture rate levels up to the time of the Treasury’s
sale. The regularization of the Treasury’s debt
offerings has also reduced uncertainty regarding
the size and timing of the Treasury’s borrow
ings. Furthermore, given the increased fre
quency of the Treasury’s sales of coupon issues,
the System could no longer maintain an even
keel if it were to retain flexibility in pursuing
an open market policy consistent with its long
term objectives. Nonetheless, the sharp rise in
interest rates during the May 1976 period had
not been fully anticipated in the market, and
333
underwriters incurred significant losses on this
occasion.
Ju n e t o M i d - O c t o b e r
In early June, with projections of the aggregates
showing a somewhat more moderate growth
than in late May, the Manager continued to seek
a Federal funds rate of around 5 x per cent.
h
By the June FOMC meeting, economic
growth appeared to be slowing from the rapid
pace seen earlier in the year, and most members
viewed this deceleration as a healthy develop
ment. In addition, monetary growth appeared
to be settling back to a more acceptable rate.
Therefore, while awaiting further information
on the economic situation, the Committee fa
vored relative stability in money market condi
tions, preferring to avoid both a significant eas
ing, which might have to be reversed shortly,
and also a significant firming. It adopted an
aggregates directive but specified a relatively
narrow Federal funds rate range of 5 lA to 5 3
A
per cent, thus limiting the potential response to
deviations in the aggregates. As it turned out,
the estimates of M - 1 and M-2 weakened in early
July, prompting the Manager to provide reserves
more readily, and the Federal funds rate fell
from around 5Vi per cent to about 5 lA per cent
by mid-July.
The Committee retained a steady posture with
respect to reserve availability over the rest of
the summer. While there were signs of hesita
tion in the pace of the economy, data on con
sumer and business spending at times suggested
that the deceleration could be temporary and
similar to those observed in the recovery phases
of previous business cycles. At the July meet
ing, the Committee selected a wider range for
the Federal funds rate as part of the specifi
cations for an aggregates directive, though sev
eral members still favored keeping the range
narrow in view of the uncertainties in the out
look. These concerns were more widespread in
August, and the Committee voted for a money
market directive at that time. The aggregates
remained well within the specified ranges after
both meetings, and the thrust of open market
operations was not altered.
During the summer the financial markets
334
Federal Reserve Bulletin □ April 1977
began a prolonged rally, which gained consid
erable momentum in August. The short-term
markets were buoyed by the moderation in the
growth of the money supply and the over-all
stability of Federal funds trading. Long-term
markets were aided by growing confidence that
inflationary pressures were waning and by a
cutback in demand from corporate borrowers.
From the beginning of June to mid-September,
3-month Treasury bill rates fell by about 50
basis points and long-term bond yields declined
around 35 basis points. With commercial banks
and others extending the maturities of their
purchases of Treasury coupon securities, yields
on intermediate-term issues registered the larg
est declines— about 65 basis points.
At the September meeting, FOMC members
noted the significant interest rate declines that
had been registered in the debt markets. While
growth in M-l had slowed, M-2 was expanding
at a relatively rapid pace. As the pause in
economic growth persisted, however, more at
tention was given to the possibility that future
growth would fall below expectations. Against
this background, the Committee in September
voted for an aggregates directive, structuring the
Federal funds rate range to permit greater room
for easing than for firming. The range was
established at 4 3 to 5Vi per cent with the focal
A
point at 5 lA per cent, thus allowing for the
possibility of a 50-basis-point decline should
growth in the aggregates turn out lower than
expected at the time of the meeting.
In the statement week that followed the
meeting, the week ended September 29, the
Federal funds objective remained at 5 lA per
cent. However, the Account Management ex
perienced considerable difficulty in achieving
this objective, as the Treasury’s operations
drained a larger-than-expected volume of re
serves. Initially, the Desk faced a sizable esti
mated reserve deficit of $3% billion to $4 billion
(daily average), mainly due to the continuing
build-up in the Treasury’s accounts at the Fed
eral Reserve Banks after the September 15 tax
date. On the first day of that week, the Desk
arranged $3.8 billion of 7-day repurchase
agreements, an operation that had been an
nounced to the market on the previous after
noon. Whereas the reserve injections that day
about met the week’s need, the Manager ex
pected that withdrawals from the repurchase
agreements would necessitate further reserve
injections late in the week.
Indeed, early terminations of such contracts,
which came to $1.3 billion on a daily-average
basis, substantially eroded the net reserve injec
tion. Furthermore, upward revisions in the esti
mates of the Treasury’s balance, amounting to
$1.1 billion on average, enlarged the reserve
deficit. Consequently, the money market be
came quite firm beginning on Monday, Sep
tember 27, and the Desk arranged five additional
rounds of repurchase agreements over the rest
of the statement week. Despite taking virtually
all propositions for repurchase agreements on
the two final days, the Desk still was unable
to depress the Federal funds rate from around
53 and 5 Vi per cent to the 5% per cent objec
/s
tive. On Wednesday night, holdings in the
repurchase account, including bankers accept
ances, reached a record $8.7 billion.6 The se
curities markets seemed to show little reaction
to the tight conditions after the weekend, partly
because they could observe the Desk making
every effort to counteract the money market
firmness.
To prevent a repetition of the money market
strains and the uncertainties associated with
sizable early terminations of repurchase agree
ments, the Desk instituted an alternative form
of repurchase contract in the week of October
6, one that did not permit termination before
maturity. On the first day of the new statement
period, the Desk arranged about $1.4 billion of
such agreements in addition to $4.6 billion of
4-day contracts that carried the right of early
termination. As expected, most of the securities
involved in the nonterminable contracts came
from the portfolios of banks and other institu
tions while the dealers themselves, both bank
and nonbank, exhibited a preference for the
terminable contracts.
In early October the projections of the mone
tary aggregates began to indicate a substantial
weakening, in the growth of demand deposits
for the September-October interval, although
growth in M-2 remained near the middle of its
6This record was eclipsed on December 29 when such
holdings built up to $10.7 billion.
The Implementation of Monetary Policy in 1976
range. In view of this, the Desk began to seek
Federal funds trading in a range of 5 V to 5 X
s
A
per cent instead of the previous 5 lA per cent
objective. When subsequent projections con
firmed this picture, the Desk became steadily
more accommodative, and by the time of the
October meeting funds were trading at around
5 per cent.
M i d -O c t o b e r t o t h e Y e a r - e n d
Most FOMC members favored a slight easing
in money market conditions at the October
meeting. The economy’s lackluster performance
continued; the growth of real GNP had slowed
a little further in the third quarter from the rather
modest pace of the second quarter. Moreover,
the risks of a shortfall from expectations had
increased, since it appeared that the slow growth
of personal income, the protracted sluggishness
in consumer spending, and the decline in stock
market prices could, if extended, dampen busi
ness confidence and adversely affect investment
plans. The Committee voted an aggregates direc
tive and decided to seek a decline in the Federal
funds rate from 5 to 47s per cent (the middle of
a 4Vi to 5% per cent range) during the first full
statement week after the meeting.
A few days after the meeting, however, the
outlook for the monetary aggregates displayed
surprising strength, with both M-l and M-2
projected near the upper limits of their tolerance
ranges. M orever, it was apparent that, unless
later data contradicted this outlook, an easing
move would only have to be reversed 1 week
later. Accordingly, the Committee concurred in
the Chairman’s recommendation that the Man
ager should hold the System’s posture un
changed. Data received in the following week
continued to indicate unexpected strength, and
the Manager again consulted with the Chairman
who advised that any significant increase in the
Federal funds rate objective would be inconsis
tent with the Committee’s intent. The Desk
continued to seek reserve conditions consistent
with Federal funds trading at around 5 per cent
until the November meeting.
At its November meeting, the Committee
concluded after its review of economic and
financial developments that a decline in the
335
Federal funds rate to about 47s per cent would
be appropriate within the first week after the
meeting, followed by a further decline to around
4 3 per cent during the second week. The Fed
A
eral funds rate range was set at 4 V to 5 lA per
2
cent. Subsequent changes in the objective would
depend on the outlook for the aggregates. This
time the monetary growth rates remained closer
to expectations, although growth in M -l was
slowing. In these circumstances, the Desk held
to the 4 3 per cent objective through early
A
December and then shifted to 4% per cent when
it appeared that M -l was weakening further.
The deliberations at the December meeting
struck a more optimistic chord as most members
agreed that the business situation had strength
ened. Indications of strong gains in personal
consumption and residential construction sug
gested that, once the decline in inventory accu
mulation had run its course, economic growth
would soon accelerate. The Committee pre
ferred to maintain the prevailing money market
conditions in the weeks ahead. In part, this
reflected the difficulties in assessing the signifi
cance of monetary growth rates over the December-January period. Also, improvement in
the economy and substantial interest rate de
clines strengthened expectations for the future.
The Committee voted a money market directive
and the Desk continued aiming for conditions
of reserve availability consistent with Federal
funds trading at 4% per cent through the year’s
end.
The securities markets extended the summer
time rally through the end of the year. Over
the last 3 months, interest rates fell consid
erably, with both short- and long-term Treasury
securities posting declines of about 70 basis
points. The economy’s sluggish advance
through most of the fourth quarter had suggested
that two of the markets’ major concerns— the
possibility of heavy demands from borrowers
and a rebound in inflationary pressures— would
not prove troublesome for the time being. In
addition, very sharp price gains were recorded
in the markets during those intervals when the
System had shifted toward a more accommo
dative interest rate stance. In late November and
December the markets’ perceptions of the
Desk’s moves toward ease, in conjunction with
336
Federal Reserve Bulletin □ April 1977
a reduction in the Federal Reserve discount rate
from 5Vi per cent to 5 lA per cent, and a flow
of news that emphasized the economy’s slow
growth generated expectations in the markets of
further accommodative steps. The markets also
reacted bullishly to the Federal Reserve’s re
duction in reserve requirements in December.
Speculative enthusiasm was widespread among
market participants, and dealers built up inven
tories of Government securities to record levels
in December.
Against this background, the retreat in the
securities markets that followed in the first few
weeks of 1977 was especially pronounced. New
economic data indicating a strengthening in
business activity, the absence of further accom
modative steps by the System, and participants’
attempts to capture profits all gave rise to heavy
selling pressure. Moreover, there were anxieties
over the inflationary pressures that might arise
out of the severe winter conditions and the new
administration’s proposed fiscal stimulus pro
gram. By the end of January, the back-up in
yields on Treasury issues had eliminated a sub
stantial portion of the declines posted in the
fourth quarter of 1976; the sell-off in the cor
porate and tax-exempt sector was less pro
nounced.
□
337
Bank Holding Company
Financial Developments in 1976
The year 1976 was a period of recovery for the
American banking system. Following signifi
cant reversals in the two previous years, bank
holding companies (BHC’s) in 1976 experi
enced significant growth, improved liquidity,
and increased earnings. Moreover, as the year
progressed there was evidence of increasing
public confidence in BHC’s as a group.
This article reviews the major financial de
velopments of BHC’s— both one-bank and
multibank— during 1976 and is based largely on
data recently released by these organizations.
Since financial data for all BHC’s are not yet
available, this review is limited to the 100
largest BHC’s. These 100 organizations, how
ever, have the bulk of the assets held by all
BHC’s, and their financial developments should
depict developments of the entire group.
BHC A SSET AND LO A N GROW TH
Between year-end 1975 and year-end 1976 the
consolidated total assets of the 100 largest
BHC’s increased from $626.4 billion to $678.0
billion, or 8.2 per cent.1 This rise, in large part
reflecting the growth of holding company banks,
far outpaced the unusually slow 2.7 per cent
increase in 1975. However, the growth in total
assets in 1976 was somewhat less than the
growth of gross national product as measured
in current dollars.
Net loans2 of the 100 largest BHC’s increased
N o t e .— A n th on y C yrnak and S am u el T a lley o f the
B o a rd ’s D iv isio n o f R esearch and S tatistics prepared
this a rticle.
*See T ab le 1 for the asset grow th o f the largest 10
and largest 25 B H C ’s.
2 N et loan s equal gross loan s m inus unearned in com e
from loan s and reserves for loan lo ss e s. M ajor B H C ’s
began reporting loan s on a net b asis in 1975.
1. Selected balance sheet items
for major bank holding companies
Amounts in billions of dollars
BHC’s
Year-end
1975
Year-end
1976
Percentage
change
Total assets
Largest 10 ................
25 ................
100 ..............
322.5
449.9
626.4
354.4
488.5
678.0
9.9
8.6
8.2
Net loans
Largest 10 ................
2 5 ..................
100 ..............
183.3
251.2
342.2
197.0
269.0
364.3
7.5
7.1
6.5
Stockholders’ equity
Largest 10 ................
25 ................
100 ..............
12.2
18.4
29.1
13.6
20.3
31.5
11.5
10.3
8.2
during 1976 from $342.2 billion to $364.3 bil
lion, or 6.5 per cent. This growth, which was
slightly less than the growth of total assets,
stands in contrast to the unusual 1.3 per cent
decline experienced the previous year. During
1976 consumer instalment and real estate loans
proved to be the major areas of loan growth.
In contrast, business loan demand was relatively
weak, continuing the pattern of the previous
year.
During 1976 the liquidity of most major
BHC’s improved significantly. This strengthen
ing occurred on both sides of BHC balance
sheets. On the asset side, for example, the ratio
of net loans to total assets for the top 100 BHC’s
fell from 54.6 per cent to 53.7 per cent. This
decline was mainly offset by a continuation of
the sharp rise in U.S. Government security
holdings that had begun in 1975. On the liability
side, BHC’s experienced a shift toward more
338
Federal Reserve Bulletin □ April 1977
stable sources of funds with savings-type de
posits displacing relatively volatile money mar
ket instruments such as negotiable certificates
of deposit.
3. Selected performance data
for major bank holding companies
Amounts in millions of dollars
Item
B H C C A P IT A L
The stockholders’ equity of the 100 largest
BHC’s increased from $29.1 billion to $31.5
billion, or 8.2 per cent, during 1976. However,
because total assets of these organizations also
increased 8.2 per cent, the ratio of stockholders’
equity to total assets remained unchanged from
year-end 1975 to year-end 1976 at 4.65 per cent.
This stability during 1976 contrasts both with
a sharp deterioration in BHC equity capital
ratios during the early 1970’s and with a signif
icant increase in 1975.
The 10 largest BHC’s recorded the greatest
percentage gain in stockholders’ equity in 1976
(Table 1). However, these money center orga
nizations, which are heavily involved in inter
national banking, also experienced the largest
percentage gains in total assets. Consequently,
this group posted only a very slight increase in
their equity capital ratio.
2. Selected balance sheet ratios
for major bank holding companies
In per cent
BHC’s
Year-end
1975
Year-end
1976
Change
Net loans to total assets
Largest 10 ................
25 ................
100 ..............
56.8
55.8
54.6
55.6
55.1
53.7
(1.2)
( -7)
( -9)
Stockholders’ equity to total assets
Largest 10 ................
25 ................
100 ..............
3.78
4.09
4.65
3.84
4.16
4.65
.06
.07
.00
B H C P R O F IT S
Profits for the 100 largest BHC’s rose moder
ately during 1976 after increasing very little
during the previous year. Consolidated aggre
1975
1976
Percentage
change
Income before securities gains
and losses (after tax) .......
Provisions for loan losses ...
Net loan charge-offs ..............
Reserves for loan losses .......
3,267
2,815
2,359
3,734
3,437
2,624
2,492
3,874
5.2
(6.8)
5.6
3.7
Ratio of reserves for loan losses
to year-end net loans .......
1.09
1.06
gate income before securities gains and losses
increased to $3,437 million— 5.2 per cent
greater than the $3,267 million recorded in 1975
(Table 3). Although changes in profits at indi
vidual BHC’s varied significantly, the increase
in over-all profitability was generally broadbased with 70 of the 100 firms posting an
increase.
The continued existence of substantial interest
rate spreads— the difference between the rates
received on interest-bearing assets and the rates
paid on interest-bearing liabilities— was an im
portant factor contributing to 1976 BHC profits.
Although these spreads were somewhat nar
rower than the record levels during 1975, they
combined with moderate asset growth to increase
net interest revenues at many major BHC’s.
Other factors that bolstered profits at many
BHC’s included tight control over non-interest
costs and an increase in revenues from both bond
transactions and trust operations.
A reduction in loan loss provisions also im
proved BHC profits during 1976. The level of
loan loss provisions for the 100 largest BHC’s
declined 6.8 per cent from the previous year.
This decline was in large part due to the as
sumption that actual loan charge-offs during
1976 would not increase so dramatically as in
1975. As expected, aggregate net loan chargeoffs for the 100 largest BHC’s increased only
5.6 per cent during 1976— far below the sharp
increase that had occurred in the previous
year.
Despite the decline in loan loss provisions,
loan loss reserves rose from $3,734 million in
1975 to $3,874 million in 1976. Under current
BHC accounting methods, loan loss provisions
Bank Holding Company Financial Developments in 1976
increase the reserve for loan losses, while net
loan charge-offs reduce the reserve. During
1976 loan loss provisions exceeded net chargeoffs by $132 million and were largely responsi
ble for the 3.7 per cent increase in reserves.
However, with net loans rising faster than re
serves, the ratio of reserves to year-end net loans
declined slightly during 1976 from 1.09 per cent
to 1.06 per cent.
Profits at the 10 largest BHC’s during 1976
rose at roughly one-half the rate of those at the
remaining 90— 3.6 per cent compared with 6.8
per cent. One factor contributing to the slower
profit growth for the 10 largest was that their
provisions for loan losses fell only 4.8 per cent
compared with 9 per cent for the remaining 90
BHC’s.3 Another factor was a slowdown in the
growth of earnings from foreign activities, in
which the 10 largest organizations are heavily
engaged. Continued high volume but somewhat
narrower interest rate spreads on foreign loans
reduced the over-all contribution to profits from
this important source at a majority of the 10
largest BHC’s.
339
4. Long-term debt and equity issues
by bank holding companies
Amounts in millions of dollars
Year
1973
1974
1975
1976
................
................
................
................
Long-term
debt
877
2,314
1,320
1,639
Common
stock
48
10
38
340
Preferred
stock
10
121
Total
925
2,334
1,479
1,979
volved common stock, unlike 1975 when more
than three-fourths was preferred stock.
There were several significant aspects of bond
financing by BHC’s during 1976. First, bond
financing was dominated by the 10 largest
BHC’s, which accounted for about 53 per cent
of the total for all BHC’s. Second, BHC’s
resorted heavily to the private placement market
in 1976, with 41 per cent of total BHC bond
offerings being sold through this market. This
widespread use of private placements in 1976
compares with only 10 per cent of BHC bonds
being privately placed in 1975 and 2 per cent
in 1974.
B H C S E C U R IT Y IS S U E S
BHC STO CK A N D B O N D TR EN D S
During 1976 BHC’s issued nearly $2 billion of
long-term debt and equity issues. This amount
was up from almost $1.5 billion in 1975, but
trailed the $2.3 billion issued in 1974 when
BHC’s sold more than $1 billion of floating rate
notes. About half of the financing in 1976 oc
curred during the final quarter of the year.
The composition of the securities issued in
1976 was quite different from recent years
(Table 4). For example, during the 1973-75
period less than 5 per cent of BHC security
financing was in the form of equity. In 1976,
however, equity financing amounted to 17 per
cent of the total. This increase in equity financ
ing was apparently due to improved BHC stock
prices and a desire by some BHC’s to boost
their equity capital ratios, which in many cases
had declined sharply during the early 1970’s.
All of the equity financing done in 1976 in-
Prices of BHC common stock, which were
relatively low at the end of 1975, rose signifi
cantly during 1976. However, there were con
siderable differences in the price performance
of various groups of BHC’s. For example,
Standard and Poor’s stock price index for New
York City banks rose about 13 per cent during
1976, whereas the index for banks outside New
York City rose about 37 per cent.4 This was
the second consecutive year that so-called re
gional BHC stocks outpaced New York City
BHC stocks. One likely reason for the relatively
poor performance of the organizations in New
York City is that several recorded poor earnings
in 1976.
Between year-end 1975 and year-end 1976
the yield to maturity of a representative group
of long-term BHC bonds dropped from almost
3N et loan ch a rg e-offs o f the 10 largest B H C ’s fell
0 .3 per cent during 1976 but rose nearly 13 per cent
for the rem aining 9 0 .
-------------------4Standard and P o o r’s co m p o site 5 0 0 -sto ck in d ex rose
about 19 per cen t during 1976.
340
Federal Reserve Bulletin □ April 1977
IOV4 per cent to about 8 V per cent. This sharp
2
decline in part reflects the general downward
trend in bond yields during 1976. However, it
also seems to reflect increased investor confi
dence in BHC’s as measured by the difference
between the yields on long-term BHC bonds and
on long-term U.S. Government bonds that are
free from credit risk. Between year-end 1975
and year-end 1976 this risk premium dropped
from about 2 x percentage points to slightly less
h
than IV2 percentage points.
C O N C L U S IO N
In retrospect, 1976 represented a period of con
tinuing recovery for BHC’s from the problems
encountered during the recent recession. During
the year BHC assets and loans increased signif
icantly, liquidity improved, earnings rose mod
erately, and capital ratios remained constant.
Moreover, there appeared to be an increase in
public confidence in BHC’s, as suggested by
sharply increasing BHC stock prices and a sig
nificant decline in the risk premiums attached
to BHC bonds.
While BHC’s had a satisfactory year in 1976,
they still face certain problems as they enter
1977. For example, some BHC’s still have a
sizable amount of nonaccruing loans to real
estate investment trusts on their books. In addi
tion, some observers have become increasingly
concerned over bank loans to the non-oilproducing, less-developed countries. Finally,
there has been evidence in recent months of
narrowing interest rate spreads in both domestic
and foreign markets. As 1977 unfolds, these
factors will undoubtedly warrant attention. □
341
Changes in Bank Lending Practices, 1976
The Federal Reserve has conducted quarterly
surveys of changes in bank lending practices at
large commercial banks in February, May, Au
gust, and November of each year since 1964.
The surveys provide information about changes
in recent and anticipated demand for business
loans, in price and nonprice terms of lending,
and in banks’ willingness to make various types
of loans other than short-term business loans.
This article continues the series of annual re
views of the surveys and summarizes the re
sponses of the 121 banks included in the 1976
sample.
During most of 1976 the demand for business
loans was weak, reflecting the modest recovery
of business capital spending coupled with heavy
long-term financing aimed at restructuring bal
ance sheets to rebuild liquidity and reduce risk
exposure. Despite a substantial recovery in cor
porate profit margins during 1976, the typical
cyclical resurgence of business spending for
fixed capital and inventories did not materialize.
With capital spending restrained and long-term
financings large, corporations continued to re
duce their indebtedness to banks for much of
the year, as they had in 1975.
In the last quarter of the year, business loans
began to increase. Although some of the
strength in late 1976 represented heavy acquisi
tions of bankers acceptances, which are in
cluded in business loans, other business loans
still had a positive growth rate. The evidence
from the lending practices surveys suggests that
the recent growth in business loans reflects both
N o t e .— John T . S cott o f the B oard ’s D iv isio n o f
R esearch and S tatistics prepared this article. R ichard
C . S te v en s o f the D iv isio n o f D ata P rocessin g provid ed
the author w ith cu m u lative totals; in a cu m u lative total
each bank is cou n ted o n ly o n c e , w h ereas the table data
in clu d e the bank each tim e it reported in a particular
categ o ry for each su rvey period.
a moderate upturn in demand and somewhat
easier lending terms at some banks.
The behavior of the terms of lending at large
commercial banks during 1976 can in part be
explained by the same forces that weakened the
demand for business loans. Businesses were
reluctant to make commitments for new capital
spending, despite favorable profit and liquidity
positions, in view of reduced capacity utilization
rates and a cautious attitude toward investment
stemming from the turbulent economic environ
ment of recent years. Bankers also displayed
a cautious attitude throughout 1976 because of
their experience during the recent years of in
stability in the economy. The quarterly survey
tables show that in the face of weak business
loan demand, only a growing minority of large
banks eased slightly some terms of lending to
nonfinancial business during the year; over all,
banks did not substantially ease their terms. In
general, the banks’ policies toward interest rates
and standards of creditworthiness illustrate their
careful approach to terms of lending throughout
1976; their policies regarding compensating
balance requirements and the maturity of term
loans illustrate the moderate easing in policy
that did occur at some banks.
In the first survey of 1976 taken in February,
almost half of the banks reported weaker de
mand for business loans and less than one-tenth
reported stronger demand. Half of the respond
ents reported a moderately easier policy with
regard to interest rates.1 About one-sixth of the
in te rp reta tio n o f th ese resp on ses is com p licated b e
cau se so m e banks h ave at tim es con sid ered a ch an ge
in the prim e rate a ch a n g e in p o lic y , w h ile others h ave
fo cu sed on the relation sh ip b etw een the prim e rate and
open m arket rates. T h is com p lication is reflected in the
February resp on se. D uring the 3 m onth s p reced in g the
February su rvey, both the prim e rate and the rate on
90- to 119-day com m ercial paper fe ll, but the h istori
ca lly h igh spread o f about 165 b asis p oin ts b etw een
these rates ch an ged very little.
342
Federal Reserve Bulletin □ April 1977
had not picked up by mid-May when the second
survey of the year was taken. About one-fourth
of the respondents reported moderately weaker
demand for business loans, while demand was
about the same as in mid-February for more than
three-fifths of the banks. Most bankers reported
that their policy on interest rates was un
changed, and almost all of the other respondents
reported moderately easier policy. Although the
prime rate was unchanged at 6 3 per cent
A
throughout this survey period, the spread be-
banks reported moderately easier policy on
compensating balances, but other nonprice
terms of lending were essentially unchanged.
Almost one-third of the respondents were more
willing to make consumer instalment loans and
term loans to businesses, while a smaller num
ber were more disposed to make other types of
loans. This pattern of reported increasing will
ingness to make various types of loans persisted
throughout 1976.
Demand for commercial and industrial loans
QUARTERLY SURVEY—FEBRUARY 1976
Changes in bank lending practices at selected large banks:
Policy on February 15, 1976, compared with policy 3 months earlier
N u m b er o f b a n k s; figures in parentheses indicate percentage distribution o f total banks reporting
Much
stronger
Item
Strength of demand for commercial and in
dustrial loans:1
Compared with 3 months earlier.............
Anticipated in next 3 m onths...................
Much firmer
policy
121
121
121
121
(100.0)
(100.0)
(100.0)
(100.0)
121
121
121
1
21
(100.0)
(100.0)
(100.0)
(100.0)
(.8)
(.8)
(.8)
(.8)
121 (100.0)
121 (100.0)
Essentially
unchanged
Moderately
weaker
9
42
121 (100.0)
121 (100.0)
Total
Loans to nonfinancial businesses:
Terms and conditions:
Interest rates charged..............................
Compensating or supporting balances.
Standards o f creditworthiness...............
Maturity of term loans..........................
Moderately
stronger
56
66
53
(7.4)
(34.7)
Moderately
firmer policy
(.8)
(46.3)
(54.6)
Essentially
unchanged
(43.8)
(9.9)
(2.5)
Moderately
easier policy
Much
easier policy
12
(2.5)
(2.5)
(6.6)
(.8)
(.8)
58
99
110
108
(47.9)
(81.8)
(90.9)
(89.3)
60
19
1
10
(2.5)
(5.0)
(2.5)
(9.9)
103
94
107
95
(85.1)
(77.7)
(88.4)
(78.6)
20
10
104
105
(86.0)
7
(86.7)
10
(5.8)
(8.3)
(2.5)
(2.5)
(3.3)
(9.1)
98
117
115
101
(81.0)
(96.7)
(95.0)
(83.4)
20
1
2
7
(.8)
(16.5)
(8.3)
(10.7)
(7.4)
(5.0)
( 1 .7 )
Much
weaker
(49.6)
(15.7)
(.8)
(8.3)
(16.5)
(.8)
(1.7)
(5.8)
(.8)
P ractice c o n c e rn in g rev iew o f cred it lin es
or loan applications:
Established customers............................
New customers.........................................
Local service area customers.................
Nonlocal service area customers.........
Factors relating to applicant:2
Value as depositor or source o f collat
eral business..........................................
Intended use of the loan........................
Loans to independent finance companies:3
Terms and conditions:
Interest rates charged..............................
Compensating or supporting balances.
Enforcement of balance requirements.
Establishing new or larger credit lines.
121
121
121
121
(100.0)
(100.0)
(100.0)
(100.0)
Total
Willingness to make other types of loans:
Term loans to businesses...........................
Consumer instalment loans.......................
Single-family mortgage loans...................
Multifamily mortgage loans......................
All other mortgage loans...........................
Participation loans with correspondent
banks......................................................
Loans to brokers..........................................
121
120
120
120
120
121
121
( 1 .7 )
Considerably
less willing
(100.0)
(100.0)
(100.0)
(100.0)
(100.0)
(100.0)
(100.0)
1 After allowance for bank’s usual seasonal variation.
2 For these factors, firmer means the factors were considered to be
more important in making decisions for approving credit requests,
and easier means they were considered to be less important.
3
6
3
12
3
3
4
11
Moderately
less willing
Essentially
unchanged
14
13
(11.6)
Moderately
more willing
4
3
1
7
3
(3.3)
(2.5)
(.8)
(5.8)
(2.5)
79
81
103
109
109
(65.3)
(67.5)
(85.9)
(90.9)
(90.9)
37
34
13
3
7
(30.6)
(28.3)
(10.8)
(2.5)
(5.8)
5
1
(.8)
(.8)
(.8)
(4.1)
(.8 )
92
98
(76.1)
(81.0)
24
21
(19.8)
(17.4)
Considerably
more willing
1
2
2
(.8)
(1.7)
(1.7)
(.8)
3 “Independent,” or “noncaptive,” finance companies are finance
companies other than those organized by a parent company mainly
for the purpose of financing dealer inventory and carrying instalment
loans generated through the sale of the parent company’s products.
Changes in Bank Lending Practices, 1976
tween the prime rate and the rate on 90- to
119-day prime commercial paper had decreased
somewhat.
One-fifth of the respondents reported some
what easier policy on compensating balances in
mid-May, bringing to more than one-fourth the
proportion that had indicated easier require
ments on balances on one or both of the first
two surveys of 1976. There was no marked
change of policy on other nonprice terms of
lending in the May survey. The pattern of in
343
creased willingness to make certain types of
loans continued.
In May the responding bankers had reported
a relatively optimistic projection of the upcom
ing strength of business loan demand. However,
the August survey showed that on balance de
mand was essentially unchanged at responding
banks, with three-fifths of the banks reporting
unchanged demand and the rest equally divided
between the moderately weaker and moderately
stronger categories. Bankers reported some eas-
QUARTERLY SURVEY—MAY 1976
Changes in bank lending practices at selected large banks:
Policy on May 15, 1976, compared with policy 3 months earlier
Number of banks; figures in parentheses indicate percentage distribution of total banks reporting
Much
stronger
Item
Strength of demand for commercial and in
dustrial loans:1
Compared with 3 months earlier...............
Anticipated in next 3 m onths.....................
Moderately
stronger
Total
Much firmer
policy
Moderately
weaker
Much
weaker
17
64
121 (100.0)
121 (100.0)
Essentially
unchanged
75
55
28
2
1
Moderately
firmer policy
Loans to nonfinancial businesses:
Terms and conditions:
Interest rates charged..............................
Compensating or supporting balances.
Standards o f creditworthiness...............
Maturity o f term loans..........................
120
121
121
121
(100.0)
(100.0)
(100.0)
(100.0)
Practice concerning review o f credit lines
or loan applications:
Established customers............................
New customers.........................................
Local service area customers.................
Nonlocal service area customers.........
121
121
121
121
(100.0)
(100.0)
(100.0)
(100.0)
Factors relating to applicant:2
Value as depositor or source o f collat
eral business..........................................
Intended use o f the lo a n ........................
121 (100.0)
121 (100.0)
9
3
121
121
121
121
Loans to independent finance companies:3
Terms and conditions:
Interest rates charged..............................
Compensating or supporting balances.
Enforcement o f balance requirements.
Establishing new or larger credit lines.
Willingness to make other types of loans:
Term loans to businesses...........................
Consumer instalment loans.......................
Single-family mortgage loans...................
Multifamily mortgage loans......................
All other mortgage loans...........................
Participation loans with correspondent
banks......................................................
Loans to brokers..........................................
(62.1)
(45.4)
Essentially
unchanged
17
23
3
13
111
14
(7.4)
(2.5)
103
115
(85.2)
(95.0)
1
(.8)
(2.5)
(5.0)
117
116
110
102
(96.7)
(95.9)
(90.9)
(84.2)
121
120
120
118
120
(100.0)
(100.0)
(100.0)
(100.0)
(100.0)
1
(-8)
(.8)
1
2
2
(.8)
(1.7)
(1.7)
(2.5)
(1.7)
121
121
(100.0)
(100.0)
1
1
(.8)
(-8)
(.8)
Much
easier policy
(6.6)
(H.6)
(91.7)
(85.9)
(94.2)
(88.5)
Moderately
less willing
(-8)
(14.2)
(19.0)
(2.5)
(10.7)
3
6
Considerably
less willing
Moderately
easier policy
(84.1)
(78.5)
(91.7)
(88.5)
104
114
107
(.8)
(23.1)
(1.7)
101
95
111
107
(.8)
(.8)
(1.7)
(2.5)
1 After allowance for bank’s usual seasonal variation.
2 For these factors, firmer means the factors were considered to be
more important in making decisions for approving credit requests,
and easier means they were considered to be less important.
(1.7)
(1.7)
(4.1)
(.8)
(.8)
(1.7)
(100.0)
(100.0)
(100.0)
(100.0)
Total
(14.0)
(52.9)
Essentially
unchanged
6
12
(5.0)
(9.9)
(7.4)
(2.5)
3
5
8
11
(2.5)
(4.1)
(6.6)
(9.1)
(1.7)
Moderately
more willing
Considerably
more willing
88
80
97
111
103
(72.8)
(66.6)
(80.9)
(94.1)
(85.9)
31
32
18
3
13
(25.6)
(26.7)
(15.0)
(2.5)
(10.8)
8
1
1
(.8)
99
101
(81.8)
(83.5)
18
17
(14.9)
(14.0)
3
2
(2.5)
(1.7)
(6.7)
(.8)
3 “Independent,” or “noncaptive,” finance companies are finance
companies other than those organized by a parent company mainly
for the purpose of financing dealer inventory and carrying instalment
loans generated through the sale of the parent company’s products.
344
Federal Reserve Bulletin □ April 1977
pensating balance requirements. As in midMay, about one-fourth of the responding banks
reported an increased willingness to make term
loans to businesses and consumer instalment
loans.
Despite the strong upturn in business loans
during October— after allowance for usual sea
sonal variation, bankers by and large remained
skeptical that business loan demand had finally
strengthened. It should be noted that a portion
of the upturn in business loans in October had
ing of interest rate policy between the May and
August surveys; one-fifth reported moderately
easier interest rate policy, with almost all of the
remainder reporting unchanged policy.2 They
also reported further easing of policy on com-
2This further illustrates the difficulty in interpreting
the responses about interest rate policy. The spread
between the prime rate and the 90- to 119-day commer
cial paper rate had increased somewhat to about its
February level.
QUARTERLY SURVEY—AUGUST 1976
Changes in bank lending practices at selected large banks :
Policy on August 15, 1976, compared with policy 3 months earlier
Number of banks; figures in parentheses indicate percentage distribution of total banks reporting
Item
Total
Strength of demand for commercial and in
dustrial loans:1
Compared with 3 months earlier.............
Anticipated in next 3 m onths...................
Much
stronger
Moderately
stronger
Total
Loans to nonfinancial businesses:
Terms and conditions:
Interest rates charged..............................
Compensating or supporting balances.
Standards o f creditworthiness...............
Maturity o f term loans..........................
121
121
121
121
(100.0)
(100.0)
(100.0)
(100.0)
Practice concerning review o f credit lines
or loan applications:
Established customers............................
New customers.........................................
Local service area customers.................
Nonlocal service area customers.........
121
121
121
121
Factors relating to applicant:2
Value as depositor or source of collat
eral business..........................................
Intended use of the loan........................
Much firmer
policy
Loans to independent finance companies:3
Terms and conditions:
Interest rates charged..............................
Compensating or supporting balances.
Enforcement of balance requirements.
Establishing new or larger credit lines.
24
3
Moderately
firmer policy
(60.4)
(44.6)
Essentially
unchanged
Much
weaker
(19.8)
(2.5)
Moderately
easier policy
(2.5)
(1.7)
(2.5)
(4.1)
93
107
117
104
(76.8)
(88.4)
(96.7)
(86.0)
25
12
12
(9.9)
(100.0)
(100.0)
(100.0)
(100.0)
2
6
3
5
(1.7)
(5.0)
(2.5)
(4.1)
112
111
112
109
(92.5)
(91.7)
(92.5)
(90.1)
7
4
6
7
(5.8)
(3.3)
(5.0)
(5.8)
121 (100.0)
121 (100.0)
10
(8.3)
(3.3)
105
109
(86.7)
(90.1)
(5.0)
(5.0)
(2.5)
(5.0)
(5.0)
108
116
113
105
(89.2)
(95.9)
(93.4)
(86.7)
Much
easier policy
(20.7)
(9.9)
(4.1)
121
121
121
121
(.8)
4
(100.0)
(100.0)
(100.0)
(100.0)
121
120
120
119
120
121
121
(1.7)
(.8)
(.8)
0 .7 )
Considerably
less willing
(100.0)
(100.0)
(100.0)
(100.0)
(100.0)
(100.0)
(100.0)
1 After allowance for bank’s usual seasonal variation.
2 For these factors, firmer means the factors were considered to be
more important in making decisions for approving credit requests,
and easier means they were considered to be less important.
73
54
(19.8)
(52.9)
3
2
3
5
Total
Willingness to make other types of loans:
Term loans to businesses...........................
Consumer instalment loans.......................
Single-family mortgage loans...................
Multifamily mortgage loans.....................
All other mortgage loans...........................
Participation loans with correspondent
banks......................................................
Loans to brokers..........................................
Moderately
weaker
24
64
121 (100.0)
121 (100.0)
Essentially
unchanged
Moderately
less willing
Essentially
unchanged
(.8)
114
108
(71.9)
(70.9)
(85.0)
(95.8)
(90.1)
(2.5)
0 .7 )
96
107
(79.3)
(88.4)
(4.1)
(.8)
0 .7 )
87
85
102
(6.6)
(.8)
(.8)
(6.6)
Moderately
more willing
29
31
14
4
10
21
1
1
(24.0)
(25.8)
(11.7)
(3.4)
(8.3)
(17.4)
(9.1)
Considerably
more willing
(2.5)
(.8)
(.8)
(.8)
3 “Independent,” or “noncaptive,” finance companies are finance
companies other than those organized by a parent company mainly
for the purpose of financing dealer inventory and carrying instalment
loans generated through the sale of the parent company’s products.
Changes in Bank Lending Practices, 1976
been the result of large purchases of bankers
acceptances included in the business loan cate
gory. However, taken together, the mid-August
and mid-November surveys suggest that about
30 per cent of the sample had experienced an
unambiguous strengthening in demand over the
6-month period;3 the decline in the strength of
345
business loan demand during the first half of
the year had clearly stopped.4
In mid-November, half of the respondents
reported moderately easier policy on interest
rates, with almost all of the rest reporting an
unchanged policy. The trend toward easing un
doubtedly reflected the fact that the prime rate
had fallen from 7 per cent to 6 V per cent; but
2
3Unambiguous strength means that strengthening de
mands were reported in either or both periods and that
no weakening was reported.
4Subsequently the strengthening in business loan de
mand has become more prevalent.
QUARTERLY SURVEY—NOVEMBER 1976
Changes in bank lending practices at selected large banks:
Policy on November 15, 1976, compared with policy 3 months earlier
Number of banks; figures in parentheses indicate percentage distribution of total banks reporting
Total
Strength of demand for commercial and in
dustrial loans:1
Compared with 3 months earlier.............
Anticipated in next 3 m onths...................
121 (100.0)
121 (100.0)
Much
stronger
Moderately
stronger
Essentially
unchanged
Moderately
weaker
1
23
43
81
69
15
9
(.8)
Much firmer
policy
Loans to nonfinancial businesses:
Terms and conditions:
Interest rates charged..............................
Compensating or supporting balances.
Standards o f creditworthiness...............
Maturity o f term loans..........................
121
121
121
121
(100.0)
(100.0)
(100.0)
(100.0)
Practice concerning review o f credit lines
or loan applications:
Established customers............................
New customers.........................................
Local service area customers.................
Nonlocal service area customers.........
121
1
21
1
21
121
(100.0)
(100.0)
(100.0)
(100.0)
Factors relating to applicant:2
Value as depositor or source o f collat
eral business..........................................
Intended use of the lo a n ........................
Loans to independent finance companies:3
Terms and conditions:
Interest rates charged..............................
Compensating or supporting balances.
Enforcement o f balance requirements.
Establishing new or larger credit lines.
Essentially
unchanged
(12.4)
(7.4)
Moderately
easier policy
2
1
1
2
(1.7)
(.8)
(.8 )
(1.7)
57
90
117
100
(47.1)
(74.4)
(96.7)
(82.6)
62
27
2
19
(51.2)
(22.3)
(1.7)
(15.7)
(-8)
2
3
2
5
(1.7)
(2.5)
(1.7)
(4.1)
105
103
112
103
(86.7)
(85.1)
(92.5)
(85.1)
14
14
7
11
121 (100.0)
121 (100.0)
10
1
(8.3)
(.8)
98
108
(81.0)
(89.3)
13
12
3
2
3
5
(2.5)
(1.7)
(2.5)
(4.1)
95
115
114
98
(78.5)
(95.0)
(94.2)
(81.0)
23
4
4
16
(-8)
Much
easier policy
(10.7)
(9.9)
(100.0)
(100.0)
(100.0)
(100.0)
1
(11.6)
(11.6)
(5.8)
(9.1)
(19.0)
(3.3)
(3.3)
(13.2)
1
21
11
2
121
121
1
(1.7)
Considerably
less willing
(100.0)
(100.0)
(100.0)
(100.0)
119 (100.0)
120 (100.0)
121 (100.0)
121
120
120
120
1 After allowance for bank’s usual seasonal variation.
2 For these factors, firmer means the factors were considered to be
more important in making decisions for approving credit requests,
and easier means they were considered to be less important.
Moderately
firmer policy
(67.0)
(57.1)
(.8)
Total
Willingness to make other types of loans:
Term loans to businesses............................
Consumer instalment loans.......................
Single-family mortgage loans....................
Multifamily mortgage loans ......................
All other mortgage loans...........................
Participation loans with correspondent
banks.......................................................
Loans to brokers..........................................
(19.0)
(35.5)
Much
weaker
Moderately
less willing
Essentially
unchanged
Moderately
more willing
(3.3)
(1.7)
(1.7)
73
90
98
117
108
(60.3)
(75.0)
(81.7)
(97.5)
(90.7)
44
26
16
(36.4)
(21.7)
(13.3)
9
(.8)
91
100
(75.8)
(82.7)
26
16
(21.7)
(13.2)
(2.5)
Considerably
more willing
1
(-8)
(7.6)
(2.5)
(.8)
(.8)
(.8)
3
1
(.8)
3
2
(2.5)
(1.7)
(1.7)
(2.5)
3 “Independent,” or “noncaptive,” finance companies are finance
companies other than those organized by a parent company mainly
for the purpose of financing dealer inventory and carrying instalment
loans generated through the sale of the parent company’s products.
346
Federal Reserve Bulletin □ April 1977
the spread between the prime rate and open
market rates had changed little. One-fourth of
the respondents had eased policy on compen
sating balances, bringing to almost one-half the
proportion that had eased such policy at some
time during the year. About one-sixth of the
banks reported easier policy on the maturity of
term loans to businesses, and willingness to
make most of the specific types of loans covered
in the survey again increased. The cumulative
proportions of respondents that at some time
during 1976 expressed greater willingness to
make term loans to businesses and consumer
instalment loans were greater than one-half.
347
Changes in Time and Savings Deposits
at Commercial Banks, July-October 1976
This article describes the results of the survey
of time and savings deposits that was conducted
in October 1976 jointly by the Federal Reserve
System and the Federal Deposit Insurance Cor
poration. In addition, it shows revisions of data
for the survey conducted in July and originally
published in the December B u l l e t i n . 1 A s
noted in December, the original July estimates
reflected deposit relationships from the call re
port for March. Now that such data for June
are available, these initial figures have been
re-estimated.2 The revisions also reflect some
unusually large corrections of reported data,
particularly among the categories of small de
nomination time deposits issued to govern
mental units. These items had not been collected
before July, and the dearth of historical data
made editing difficult.
For the 3 months ending October 28, 1976,
growth in time and savings deposits at insured
commercial banks proceeded at a moderate
pace, as the continuing absolute decline in
large-denomination ($100,000 and over) time
deposits offset only in part the fairly strong
growth in savings and small-denomination (less
than $100,000) time deposits. Total time and
N o t e .— Jo h n R . W illia m s o f th e B o a r d ’s D iv is io n
o f R e se a r c h a n d S ta tis tic s p r e p a red th is a r tic le .
P u r v e y s o f tim e a n d s a v in g s d e p o s its ( S T S D ) at all
m e m b e r b a n k s w e r e c o n d u c te d b y th e B o a rd o f G o v e r
nors in la te 1 9 6 5 , in e a r ly 1 9 6 6 , a n d q u a rterly in 1 9 6 7 .
In Ja n u a ry a n d J u ly 1 9 6 7 th e s u r v e y s a ls o in c lu d e d data
fo r a ll in su r e d n o n m e m b e r b a n k s c o lle c t e d b y th e F e d
eral D e p o s it In su ra n ce C o r p o r a tio n (F D I C ). S in c e th e
b e g in n in g o f 1 9 6 8 th e B o a rd o f G o v e r n o r s an d th e F D IC
h a v e jo in tly c o n d u c te d q u a rterly s u r v e y s to p r o v id e
e stim a te s fo r a ll in su r e d c o m m e r c ia l b a n k s b a s e d on
a p r o b a b ility s a m p le o f b a n k s. T h e r esu lts o f a ll ea rlier
s u r v e y s h a v e a p p ea r e d in p r e v io u s B u l l e t i n s fr o m
1 9 6 6 to 1 9 7 6 , th e m o s t r ec e n t b e in g D e c e m b e r 1 9 7 6 .
2 D a ta fo r O c to b e r are b a s e d o n d e p o s it r e la tio n s h ip s
fr o m th e S e p te m b e r c a ll rep ort.
savings deposits increased during the period by
$7.9 billion, or at a 6.8 per cent annual rate,
not seasonally adjusted. With banks generally
maintaining offering rates on consumer deposits
at the Federally imposed maximum levels—
even as Treasury yields fell below the ceilings
on savings and most maturities of time depos
its— savings and interest-bearing, small-denom
ination time deposits expanded by $14.7 billion,
or at an annual rate of nearly 18 per cent. In
contrast, interest-bearing, large-denomination
time deposits declined $6.6 billion, or at an
annual rate of almost 20 per cent, as banks again
allowed certificates of deposit to run off in view
of still modest loan growth coupled with rapid
inflows of other deposits.
SAVINGS DEPOSITS
Between July and October, yields on short-term
market securities, such as Treasury bills, de
clined from just above the maximum rate pay
able on savings deposits to just below the ceil
ing; therefore, savings deposits at commercial
banks provided an attractive temporary invest
ment alternative throughout the period. In reac
tion, inflows to savings accounts totaled $7.4
billion, or 16 per cent at an annual rate, not
seasonally adjusted. Among ownership classes
of savings deposits, the portion held by individ
uals and nonprofit organizations grew least rap
idly, rising about 12 per cent on an annual basis.
Higher growth rates prevailed for holdings of
governmental units and businesses, reflecting
the continued adaptation by such customers to
the opportunity to substitute savings for demand
deposits as well as portfolio adjustments in
duced by low market rates. Profit-making orga
nizations, which had become eligible to own
348
Federal Reserve Bulletin □ April 1977
savings deposits in November 1975, increased
deposit balances at about an 85 per cent annual
rate, not seasonally adjusted, while domestic
governmental units, eligible since November
1974, increased their balances at a rate of nearly
80 per cent.
At the end of October, commercial banks in
general were continuing to pay maximum al
low able rates on savings accounts. The
weighted-average rate paid on inflows to all
savings deposits remained unchanged from July
at 4.91 per cent. Moreover, the proportion of
banks paying the ceiling rate for new deposits
of individuals and nonprofit organizations fell
only slightly, with the decline limited to banks
with total deposits under $100 million. Indeed,
the share of personal savings at banks that were
paying the maximum rate remained steady at
86 per cent. Commercial banks apparently were
still reluctant to cut offering rates on consumer
deposits in view of expectations of generally
higher interest rate levels in 1977 and stiff
deposit competition with thrift institutions.
SMALL-DENOMINATION
TIME DEPOSITS
Strong growth in interest-bearing, small-denom
ination time deposits over the August-October
period was entirely concentrated in holdings
other than those of domestic governmental
units. Such time deposits held by nongovern
mental entities expanded by more than 20 per
cent at an annual rate to a level of $148 billion.
In contrast, small-denomination time deposits
1. Types of time and savings deposits held by insured commercial banks on survey date,
July 28, and October 27, 1976
Deposits
Number o f issuing banks
In millions o f dollars
Type o f deposit
July 28
Oct. 27
July 28
Oct. 27
Percentage change
July 28-Oct. 27,
1976
Total time and savings deposits.................................
14,365
14,384
469,811
477,722
1.7
Savings.......................................................................
Issued to :
Individuals and nonprofit organizations........
Partnerships and corporations operated for
profit (other than commercial banks). ..
Domestic governmental units...........................
All other................................................................
14,332
14,384
183,946
191,388
4.0
14,332
14,384
174,349
179,700
3.1
7,958
6,183
1,046
8,146
6,080
748
6,210
3,248
139
7,553
3,880
256
21.6
19.5
84.7
14,058
14,080
145,173
152,414
5.0
10,592
10,407
4,422
4,176
-5 .6
4,865
7,412
4,168
7,773
13,974
4,301
7,498
4,375
7,786
14,049
1,499
1,170
756
997
140,751
1,141
1,168
688
1,178
148,238
- 2 3 .9
-0 .2
-9 .0
18.2
5.3
6,153
11,574
8,697
13,195
12,056
11,762
7,992
6,324
11,464
8,951
13,553
12,204
11,773
8,168
7,855
27,064
4,854
33,008
18,690
41,372
7,909
7,319
29,844
4,414
33,919
18,445
44,921
9,377
-6 .8
10.3
-9 .1
2.8
-1 .3
8.6
18.6
11,154
11,186
133,733
127,158
-4 .9
1,609
1,315
628
1,667
1,415
683
4,802
1,556
3,246
4,876
1,588
3,288
1.5
2 .0
1.3
8,962
9,021
2,158
1,887
- 1 2 .6
Interest-bearing time deposits in denominations
of less than $100,000.......................................
Issued to :
Domestic governmental units..............................
Accounts with original maturity o f:
30 up to 90 days..............................................
90 up to 180 days............................................
180 days up to 1 year.....................................
1 year and over................................................
Other than domestic governmental units..........
Accounts with original maturity o f:
30 up to 90 days..............................................
90 up to 180 days............................................
180 days up to 1 year.....................................
1 up to 2l/ i years............................................
2 Vi up to 4 years............................................
4 up to 6 years.................................................
6 years and over..............................................
Interest-bearing time deposits in denominations
of $100,000 or more........................................
Non-interest-bearing time deposits in denomi
nations o f..........................................................
Less than $100,000..............................................
Club accounts (Christmas savings, vacation,
or similar club account).................................
N ote .— All banks that had either discontinued offering or never
offered certain deposit types as o f the survey date are not counted as
issuing banks. However, small amounts o f deposits held at banks that
had discontinued issuing certain deposit types are included in the
amounts outstanding.
Figures may not add to totals because o f rounding.
Changes in Time and Savings Deposits
2.
349
Small-denomination time and savings deposits held by insured commercial banks on
July 28, and October 27, 1976, by type of deposit, by most common rate paid on new de
posits in each category, and by size of bank
Size o f bank
(total deposits in millions of dollars)
All banks
Deposit group, and dis
tribution o f deposits by
most common rate
Less than 100
Oct. 27
Size o f bank
(total deposits in millions of dollars)
All banks
July 28
Oct. 27
July 28
100 and over
Oct. 27
July 28
Less than 100
Oct. 27
Number o f banks, or percentage distribution
14,384
100
4 .7
10.3
85.0
14,332
100
3 .0
10.3
86.8
13,466
100
4 .6
10.5
84.9
13,440
100
2 .8
10.4
86.8
918
100
6.2
7.2
86.6
892 179,700
100
100
5.9
4 .0
8.0
9 .6
86. 1
86.5
86.0
86.3
Partnerships and cor
porations
Issuing banks.............
Distribution, total. . .
4.00 or less.............
4 .01-4.50.................
4.51-5.00.................
8,146
100
1.7
5.7
92.7
7,958
100
1.7
9 .0
89.3
7,248
100
1.6
5.7
92.7
7,082
100
i .6
9 .2
89.1
898
100
2.2
5.2
92.6
875
100
2.3
6.8
91.0
7.553
100
1.6
4.3
94.1
6,080
100
2.9
8.4
88.7
6,183
100
.6
9 .5
90.0
748
100
.3
.3
99.4
1,046
100
.2
14.0
85.8
4,301
100
1.7
73.5
19.9
5.0
Paying ceiling r a t e 1. ..
Domestic governmental
units
Issuing banks.............
Distribution, total. . .
4.00 or less.............
4.01-4.50.................
4.51-5.00.................
Paying ceiling r a t e 1...
All other
Issuing banks.............
Distribution, total. . .
4.00 or less.............
4.01-4.50.................
4.51-5.00.................
Paying ceiling r a t e 1. ..
84.8
92.3
86.8
99.4
86.6
89.0
84.7
86.6
88.7
5,537
100
3.0
8.8
88.2
5,647
100
.5
9 .9
89.6
Oct. 27
July 28
110,202
100
4 .2
9.3
86.5
86.7
86.4
105,899
100
4. 1
10.6
85.3
2,266
100
2 .2
6.2
91.6
1,889
100
1.7
7.7
90.6
5,287
100
1.4
3.5
95.1
90.6
94.5
4,321
100
1.3
4.3
94.5
1,932
100
2,221
100
1.3
1.6
97.0
1,312
100
.6
2.5
96.9
79
99
100
1.0
.2
98.8
174,349
100
3.7
10.4
85.9
69,498
100
3.5
10.1
86.4
68,450
100
3.0
10.1
86.9
86.1
6,210
100
1.4
5.3
93.3
85.8
92.8
543
100
1.9
3.9
94.2
536
100
1.4
4.9
93.7
3,244
100
.3
4.1
95.7
1,659
100
1.0
7.6
91.4
87.6
93.9
93.5
3,880
100
1.2
4 .2
94.6
943
100
( 2)
15.1
84.9
84.9
94.3
93.4
256
100
.3
( 2)
99.7
134
100
.7
.2
99.1
100.0
80
100
3.1
2.5
94.3
103
100
2.3
4.3
93.4
85.8
668
100
( 2)
( 2)
100.0
99.7
99.1
177
100
( 2)
( 2)
100.0
100.0
100.0
99.1
4,865
100
1.3
69.3
24.5
4 .9
( 2)
3,686
100
1.7
72.3
20.6
5.5
4,258
100
1.3
70.0
23.5
5.2
615
100
1.6
80.5
15.5
2.4
608
100
1.4
64.5
31.1
3.0
1,141
100
1.2
63.4
31.7
3.7
484
100
.9
75.2
15.2
8.7
804
100
.4
54.4
36.1
9.1
657
100
1.5
54.6
43.8
.1
( 2)
(2)
(2)
(2)
(2)
1,498
100
.3
50.6
43.1
6 .0
( 2)
(2)
(2)
(2)
695
100
.3
46.1
51.1
2.4
( 2)
94.2
95.2
91.6
85.2
93.6
86.2
92.5
July 28
90.9
88.2
92.3
86.5
Oct. 27
Amount of deposits (in millions of dollars),
or percentage distribution
Savings deposits
Individuals and non
profit organizations
Issuing banks.............
Distribution, total. . .
4.00 or less.............
4.01-4.50.................
4 .51-5.00.................
Paying ceiling r a t e 1...
July 28
100 and over
91.0
(2)
5.2
94.8
94.5
35
100
( 2)
( 2)
100.0
96.5
100
.9
( 2)
99.1
93.7
96.2
98.8
Time deposits in denominanations of less than
$100,000
Domestic governmental
units:
Maturing in—
30 up to 90 days
Issuing banks.............
Distribution, total. . .
4.50 or less.............
4.51-5.00.................
5.01-5.50.................
5.51-7.75.................
Paying ceiling r a t e 1...
(2)
90 up to 180 days
Issuing banks.............
Distribution, total. . .
4.50 or less.............
4.51-5.00.................
5.01-5.50.................
5.51-7.75.................
7,498
100
.7
8 .6
81.1
9 .6
6,858
100
.8
8.2
80.8
10.2
.5
6,815
100
.8
7 .7
87.2
4 .3
.5
640
100
( 2)
13.4
83.7
2.9
( 2)
596
100
.6
12.8
80.9
5.7
( 2)
1,168
100
.5
10.7
81.8
7.0
1,169
100
.5
2.4
88.3
8.8
775
100
.8
10.3
82.5
6.4
867
100
.7
1.7
87.0
10.6
.4
7,412
100
.8
8.1
86.7
4 .4
.5
393
100
( 2)
11.5
80.4
8.1
( 2)
302
100
.1
4 .4
91.7
3.7
( 2)
180 days up to 1 year
Issuing banks.............
Distribution, total. . .
4.50 or less.............
4.51-5.00.................
5.01-5.50.................
5.51-7.75.................
4,375
100
( 2)
8.3
70.0
21.8
3,871
100
( 2)
8.4
69.2
22.4
3,692
100
( 2)
8.4
74.2
17.4
429
100
( 2)
4 .7
64.1
31.2
410
100
( 2)
9 .2
52.8
37.9
.8
.9
.9
476
100
1.0
8.6
69.7
20.8
( 2)
756
100
.1
9 .7
65.9
24.3
Paying ceiling r a t e 1...
504
100
( 2)
6.8
76.0
17.2
( 2)
688
100
( 2)
8.4
69.3
22.2
.8
4,168
100
.1
8.4
73.7
17.8
.1
.1
.1
259
100
( 2)
14.7
77.9
7.4
( 2)
346
100
.1
10.3
81.5
8.1
( 2)
1 year and over
Issuing banks.............
Distribution, total. . .
5.00 or less.............
5.01-5.50.................
5.51-6.00.................
6.01-7.75........ ..
7,786
100
2 .8
5.5
65.9
25.9
7,773
100
4 .4
8.3
61.9
25.4
7,181
100
2 .6
5.0
66.2
26.2
7,186
100
4.2
8.4
61.9
25.5
606
100
4.3
11.1
62.4
22.2
587
100
6.0
6.3
62.9
24.8
1,177
100
.5
4.3
63.7
31.6
983
100
.3
3.9
60.4
35.3
822
100
1.1
9.8
61.3
27.8
194
100
1.3
6.1
80.2
12.5
174
100
2.1
3.0
74.2
20.7
.4
.5
.5
.5
.8
.1
995
100
1.3
8.6
63.5
26.6
.2
.1
.1
Paying ceiling r a t e 1...
Paying ceiling r a t e 1...
(2)
.2
.1
.1
.3
.2
(2)
.3
350
Federal Reserve Bulletin □ April 1977
TABLE 2—Continued
Size o f bank
(total deposits in millions of dollars)
Deposit group, and dis
tribution o f deposits by
most common rate
All banks
All banks
Less than 100
Oct. 27
July 28
Oct. 27
July 28
100 and over
Oct. 27
July 28
Number o f banks, or percentage distribution
Time deposits in denomina
tions of less than
$100,000 (cont.)
Other than domestic
governmental units:
Maturing in—
30 up to 90 days
Issuing banks.............
Distribution, total. . .
4.50 or less.............
4.51-5.00.................
Size of bank
(total deposits in millions of dollars)
Less than 100
Oct. 27
July 28
Oct. 27
July 28
100 and over
Oct. 27
July 28
Amount of deposits (in millions of dollars),
or percentage distribution
6,324
100
.2
99.8
94.2
6,153
100
2.9
97.1
96.9
5,529
100
( 2)
100.0
94.4
5,379
100
3.2
96.8
96.8
796
100
1.4
98.6
92.8
774
100
1.1
98.9
97.6
7,319
100
1.2
98.8
92.1
7,854
100
.1
99.9
99.8
1,929
100
( 2)
100.0
93.5
2,115
100
.2
99.8
99.8
5,390
100
1.6
98.4
91.6
5,739
100
.1
99.9
99.8
11,464
100
.5
12.7
86.8
86.1
11,432
100
.6
10.2
89.2
86.3
10,562
100
.5
13.3
86.1
85.6
10,558
100
.5
10.6
88.9
86.0
902
100
( 2)
5.3
94.7
92.0
874
100
1.4
5.1
93.6
90.8
29,844
100
( 2)
6.0
94.0
92.8
26,901
100
( 2)
5.4
94.6
93.0
12,554
100
( 2)
7.3
92.7
92.6
11,795
100
( 2)
8.0
92.0
91.5
17,289
100
( 2)
5.1
94.9
92.9
15,105
100
( 2)
3.4
96.6
94.2
8,951
100
.4
5.3
94.3
91.7
8.697
100
.7
4 .2
95.1
92.6
8,159
100
.3
5.4
94.2
91.7
7.911
100
.7
4 .4
94.9
92.4
792
100
.4
4.5
95.1
91.4
786
100
.6
2.6
96.9
94.7
4,377
100
.1
2.2
97.7
91.2
4,811
100
.1
2 .7
97.2
95.6
2,745
100
( 2)
2.6
97.4
94.1
2,805
100
( 2)
3.5
96.4
96.1
1,631
100
.3
1.5
98.2
86.2
2,007
100
.2
1.5
98.3
95.0
13,553
100
( 2)
1.8
98.2
96.4
13,195
100
( 2)
2.9
97.1
96.1
12,650
100
( 2)
1.8
98.2
96.4
12,318
100
( 2)
3.1
96.9
96.0
903
100
.2
1.2
98.6
96.3
877
100
.3
.3
99.4
98.0
33,919
100
( 2)
1.3
98.7
96.6
33,008
100
.2
3.2
96.7
91.9
22,117
100
( 2)
1.8
98.2
97.4
21,145
100
( 2)
5.0
95.0
94.1
11,802
100
( 2)
.5
99.5
95.1
11,863
100
.5
( 2)
99.5
87.9
12,204
100
1.8
98.2
97.1
12,056
100
1.9
98. 1
97.6
11,323
100
1.9
98.1
97.0
11,209
100
1.9
98.1
97.6
881
100
.9
99.1
98.4
848
100
1.0
99.0
98.2
18,421
100
1.6
98.4
96.6
18.662
100
1.9
98.1
97.2
11,260
100
1.4
98.6
97.0
11,647
100
2.7
97.3
97.0
7,162
100
1.8
98.2
95.8
7,014
100
.5
99.5
97.7
4 up to 6 years
Issuing banks............. 11,773
Distribution, total. . .
100
.9
6.50 or less.............
6.51-7.00.................
14.8
7.01-7.25.................
84.2
Paying ceiling rate 1...
84.2
11,762
100
.8
13.8
85.4
85.4
10,902
100
.8
15.5
83.7
83.7
10,909
100
.7
14.3
85.0
85.0
871
100
1.9
6.6
91.5
91.5
853
100
1.6
7.2
91.2
91.1
44,500
100
1.8
9.8
88.4
88.4
41,005
100
2.7
9.3
88.0
87.9
22,343
100
.6
13.1
86.4
86.4
20,100
100
.7
13.3
86.1
86.1
22,157
100
3.0
6.5
90.5
90.5
20,905
100
4 .6
5.5
89.9
89.7
Paying ceiling r a t e 1. ..
8,168
100
( 2)
4.9
95.1
95.1
7.992
100
1.9
6.6
91.5
91.5
7,413
100
( 2)
4.9
95.1
95.1
7.273
100
2 .0
6.8
91.3
91.3
755
100
( 2)
4.9
95.1
95.1
719
100
1.7
4.4
93.9
93.8
9,243
100
( 2)
6.9
93. 1
93.1
7,696
100
( 2)
6.2
93.7
91.5
4,017
100
( 2)
4 .2
95.8
95.8
3,247
100
( 2)
3.5
96.5
96.5
5,226
100
( 2)
9 .0
91.0
91.0
4,449
100
( 2)
8.2
91.8
87.9
Club accounts
Issuing banks.............
Distribution, total. . .
0.00...........................
0.01-4.00.................
4.01-4.50.................
4.51-5.50.................
9.021
100
55.6
13.5
7 .2
23.6
8,962
100
53.3
13.4
9.3
24. 1
8,384
100
57.8
13.4
7.0
21.8
8,266
100
54.7
13.5
9 .3
22.5
637
100
27.2
15.1
10.2
47.5
696
100
36.7
11.3
9.5
42.5
1,837
100
22.8
11.0
10.8
55.5
1,894
100
25.4
13.5
16.4
44.7
911
100
31.8
11.9
6.4
49.9
893
100
34.2
13.9
14.8
37.1
926
100
13.9
10.1
15.1
60.9
1.001
100
17.5
13.1
17.9
51.4
Paying ceiling r a t e 1. ..
90 up to 180 days
Issuing banks.............
Distribution, total. . .
4.50 or less.............
4.51-5.00.................
5.01-5.50.................
Paying ceiling r a t e 1. ..
180 days up to 1 year
Issuing banks.............
Distribution, total. . .
4.50 or less.............
4.51-5.00.................
5.01-5.50.................
Paying ceiling r a t e 1...
1 up to 2 Vi years
Issuing banks.............
Distribution, total. . .
5.00 or less.............
5.01-5.50.................
5.51-6.00.................
Paying ceiling r a t e 1...
2Vi up to 4 years
Issuing banks.............
Distribution, total. . .
6.00 or less.............
6.01-6.50.................
Paying ceiling r a t e 1...
6 years and over
Issuing banks.............
Distribution, total. . .
5.00 or less.............
5.01-7.25.................
7.26-7.50.................
1 See p. A -10 for maximum interest rates payable on time and
savings deposits at the time o f each survey. The ceiling rate is included
in the rate interval in the line above.
2 Less than .05 per cent.
N ote .— All banks that either had discontinued offering or had
never offered particular deposit types as o f the survey date are not
counted as issuing banks. Moreover, the small amounts of deposits
held at banks that had discontinued issuing deposits are not included
in the amounts outstanding. Therefore, the deposit amounts shown
in Table 1 may exceed the deposit amounts shown in this table.
The most common interest rate for each instrument refers to the
stated rate per annum (before compounding) that banks paid on the
largest dollar volume o f deposit inflows during the 2-week period
immediately preceding the survey date.
Figures may not add to totals because o f rounding.
Changes in Time and Savings Deposits
held by domestic governmental units declined
$4 billion, or at about a 20 per cent annual rate
over the August-October period. Average de
posit maturities in both ownership classes
lengthened between July and October; growth
in nongovernmental time deposits maturing in
4 years or more accounted for nearly 70 per
3.
351
cent of total small-denomination time deposit
growth.
Despite relatively low market yields through
out the maturity structure and the resultant large
deposit inflows, commercial banks seemed un
willing to make any significant decrease in of
fering rates between the July and October sur-
Average of most common interest rates paid on various categories of time and savings
deposits at insured commercial banks on July 28, and October 27, 1976
Bank size
(total deposits in millions o f dollars)
Type o f deposit
All size
groups
Less
than 20
20 up
to 50
50 up
to 100
100 up
to 500
500 up
to 1,000
1,000
and over
October 27, 1976
Savings and small-denomination time deposits..................
5.54
5.71
5.66
5.58
5.50
5.42
5.40
Savings, total...............................................................................
Individuals and nonprofit organizations..........................
Partnerships and corporations............................................
Domestic governmental units............................................
All other..................................................................................
4.91
4.91
4.96
4.97
4.99
4.93
4.93
5.00
4.96
5.00
4.88
4.88
4.90
4.98
5.00
4.94
4.94
4.97
4.90
5.00
4.91
4.91
4.96
4.98
4.88
4.86
4.85
4.96
5.00
4.93
4.93
4.98
4.97
5.00
Time deposits in denominations of less than $100,000, total
Domestic governmental units, total..................................
Maturing in—
30 up to 90 days................................................................
90 up to 180 days..............................................................
180 days up to 1 year.......................................................
1 year and over..................................................................
6.32
5.58
6.24
5.75
6.43
5.67
6.36
5.55
6.33
5.37
6.29
5.39
6.26
5.35
5.15
5.44
5.53
6.17
5.35
5.46
5.59
6.24
5.03
5.48
5.60
6.06
4.99
5.23
5.58
6.36
5.15
5.46
5.41
6.05
5.13
5.42
5.59
5.98
4.99
5.41
5.35
5.92
Other than domestic governmental units, total...............
Maturing in—
30 up to 90 days................................................................
90 up to 180 days..............................................................
180 days up to 1 year.......................................................
1 up to 2Vi years...............................................................
2 Vi up to 4 years...............................................................
4 up to 6 years...................................................................
Over 6 years........................................................................
6.34
6.27
6.45
6.38
6.36
6.30
6.28
4.98
5.47
5.47
5.99
6.49
7.21
7.47
5.00
5.47
5.48
5.98
6.48
7.22
7.49
4.99
5.48
5.50
6.00
6.50
7.19
7.50
4.98
5.44
5.47
5.98
6.48
7.23
7.48
4.99
5.49
5.49
5.99
6.49
7.21
7.48
4.95
5.47
5.47
5.98
6.45
7.23
7.46
4.98
5.45
5.43
5.98
6.49
7.19
7.43
M emo: Club accounts..............................................................
3.69
2.11
2.17
4.52
3.75
3.70
4.52
July 28, 1976
Savings and small-denomination time deposits..................
5.52
5.66
5.64
5.56
5.49
5.41
5.39
Savings, total..............................................................................
Individuals and nonprofit organizations..........................
Partnerships and corporations............................................
Domestic governmental units.............................................
All other..................................................................................
4.91
4.91
4.96
4.98
4.98
4.95
4.95
4.99
5.00
5.00
4.89
4.89
4.92
4.98
5.00
4.93
4.93
4.96
4.89
5.00
4.91
4.91
4.96
4.99
4.88
4.85
4.84
4.97
5.00
4.93
4.92
4.97
4.96
5.00
Time deposits in denominations of less than $100,000, total
Domestic governmental units, total..................................
Maturing in—
30 up to 90 days................................................................
90 up to 180 days..............................................................
180 days up to 1 year.......................................................
1 year and over..................................................................
6.29
5.56
6.19
5.70
6.37
5.68
6.34
5.39
6.32
5.37
6.26
5.52
6.25
5.46
5.21
5.51
5.54
6.14
5.36
5.48
5.42
6.18
5.23
5.61
5.70
6.05
5.08
5.58
5.73
6.37
5.15
5.45
5.45
6.02
5.21
5.43
5.60
6.20
5.32
5.48
5.65
5.94
Other than domestic governmental units, total..............
Maturing in—
30 up to 90 days................................................................
90 up to 180 days..............................................................
180 days up to 1 year.......................................................
1 up to 2l 2 years...............................................................
/
2 l/ i up to 4 years...............................................................
4 up to 6 years...................................................................
Over 6 years........................................................................
6.31
6.21
6.39
6.38
6.36
6.27
6.26
5.00
5.45
5.48
5.97
6.49
7.20
7.46
5.00
5.34
5.49
5.93
6.47
7.21
7.49
5.00
5.46
5.50
6.00
6.50
7.19
7.50
5.00
5.43
5.46
5.99
6.49
7.23
7.48
5.00
5.49
5.50
6.00
6.50
7.22
7.48
5.00
5.48
5.47
5.99
6.49
7.24
7.40
5.00
5.47
5.49
5.98
6.49
7.16
7.44
M emo: Club accounts..............................................................
3.46
1.94
2.30
4.10
3.48
2.82
4.43
1 No deposits outstanding.
2 Club accounts are excluded from all of the above categories.
N ote .— T h e average rates w ere ca lcu la ted b y w eigh tin g th e m o st
c o m m o n rate rep orted o n e a ch typ e o f d e p o sit at e a ch b a n k by th e
amount of that type o f deposit outstanding. All banks that had either
discontinued offering or never offered particular deposit types as o f the
survey date were excluded from the calculations for those specific
deposit types.
352
Federal Reserve Bulletin □ April 1977
OTHER TIME DEPOSITS
veys. On government deposits with original
maturities shorter than 1 year, banks cut rates
modestly, but they raised rates slightly on such
deposits maturing in 1 year or more. Because
of the general lengthening of maturities, the
aggregate weighted-average rate on government
deposits increased. Similarly, banks made no
significant changes in rates paid on time deposits
issued to nongovernmental customers, but ex
tremely rapid growth among deposits maturing
in over 4 years produced an increase in the
over-all average rate paid. Well over four-fifths
of issuing banks still paid the maximum rate
allowed by Federal banking regulatory authori
ties on each nongovernmental time deposit cat
egory.
The remaining portion of time deposits is dis
tributed among three deposit categories. Inter
est-bearing, large-denomination time deposits
continued the pattern begun in early 1975, fall
ing by $6.6 billion during the August-October
period. Since the end of 1974 such deposits have
contracted by more than $40 billion. Non-inter
est-bearing deposits (other than club accounts)
grew to a level of about $4.9 billion in October;
most deposits in this category are believed to
consist of escrow accounts and compensating
balances held against loans. Deposits out
standing in club accounts declined seasonally
to a level of about $1.9 billion in October.
R evised appendix tables fo r the July survey are available on request from Publications S ervices , D ivision
of Adm inistrative S ervices, B oard of G overnors of the Federal R eserve S ystem , Washington, D .C .
20551.
A P P E N D IX
A l.
TABLES
Savings deposits issued to individuals and nonprofit organizations
Most common interest rates paid by insured commercial banks on new deposits, October 27, 1976
Most common rate paid (per cent)
Group
Total
Most common rate paid (per cent)
Total
4.00
or
less
4.01
to
4.50
4.51
to
5.00
Memo:
ceiling
rate*
4.00
or
less
NUMBER OF BANKS
All banks....................................................................
14,384
675
1,481
12,227
Size of bank (total deposits in millions of
dollars):
Less than 20.........................................................
20-50......................................................................
50-100....................................................................
100-500.................................................................
500-1,000..............................................................
1,000 and over.....................................................
8,888
3,493
1,085
731
103
84
497
66
55
45
8
4
878
498
39
41
16
9
7,513
2,928
991
645
79
71
4.01
to
4.50
4.51
to
5.00
Memo:
ceiling
rate1
MILLIONS OF DOLLARS
12,198 179,700
7,122
19,142
29,253
21,103
38,488
18,237
53,477
556
903
996
2,095
1,514
1,057
7,485
2,928
991
645
78
71
17,199 155,379 155,063
1,257
4,998
750
2,488
2,482
5,224
17,329
23,352
19,357
33,905
14,241
47,195
17,164
23,352
19,357
33,905
14,091
47,195
NOTES TO APPENDIX TABLES 1-16:
1 See page A10 for maximum interest rates payable on time and
saving deposits at the time o f each survey. The ceiling rate is included
in the rate interval to the left.
2 Omitted to avoid individual bank disclosure.
3 Less than $500,000.
N ote.—All banks that either had discontinued offering or had
never offered particular deposit types as o f the survey date are not
counted as issuing banks. Moreover, the small amounts o f deposits
held at banks that had discontinued issuing deposits are not included
in the amounts outstanding. Therefore, the deposit amounts shown
in Table 1 may exceed the deposit amounts shown in these tables.
The most common interest rate for each instrument refers to the
stated rate per annum (before compounding) that banks paid on the
largest dollar volume o f deposit inflows during the 2 week period
immediately preceding the survey date.
Figures may not add to totals because of rounding.
Changes in Time and Savings Deposits
A2.
353
Savings deposits issued to partnerships and corporations operated for profit
Most common interest rates paid by insured commercial banks on new deposits, October 27, 1976
Most common rate paid (per cent)
Most common rate paid (per cent)
Group
Total
Total
4.00
or
less
4.01
to
4.50
4.51
to
5.00
Memo:
ceiling
rate1
4.00
or
less
NUMBER OF BANKS
4.01
to
4.50
4.51
to
5.00
Memo:
ceiling
rate1
MILLIONS OF DOLLARS
All banks.........................................................
8,146
135
461
7,549
7,520
7,553
121
326
7,106
7,072
Size of bank (total deposits in millions of
dollars):
Less than 20...............................................
20-50...........................................................
50-100.........................................................
100-500.......................................................
500-1,000...................................................
1,000 and over..........................................
3,303
2,939
1,006
711
103
84
100
16
17
2
1
375
39
28
12
7
3,303
2,464
951
666
89
76
3,275
2,464
951
666
89
75
448
1,008
810
1,725
899
2,662
43
6
42
( 2)
( 2)
108
33
59
( 2)
( 2)
448
857
771
1,625
846
2,559
446
857
771
1,625
846
2,527
A3.
Savings deposits issued to domestic governmental units
Most common interest rates paid by insured commercial banks on new deposits, October 27, 1976
Most common rate paid (per cent)
Group
Total
Most common rate paid (per cent)
Total
4.00
or
less
4.01
to
4.50
4.51
to
5.00
Memo:
ceiling
rate 1
4.00
or
less
NUMBER OF BANKS
4.01
to
4.50
4.51
to
5.00
M em o:
ceiling
rate1
MILLIONS OF DOLLARS
6,080
Size of bank (total deposits in millions of
dollars):
Less than 20.........................................................
20-50......................................................................
50-100....................................................................
100-500..................................................................
500-1,000..............................................................
1,000 and over.....................................................
A4.
175
511
5,395
5,280
3,880
46
162
3,672
3,654
3,430
1,617
491
406
75
62
164
113
338
39
10
6
5
3,153
1,279
451
391
67
54
3,040
1,279
451
391
67
52
556
645
459
801
402
1,018
17
6
26
95
12
( 2)
( 2)
533
619
364
779
402
974
527
619
364
779
402
963
5
2
3
9
( 2)
( 2)
Savings deposits issued to all others
Most common interest rates paid by insured commercial banks on new deposits, October 27, 1976
Most common rate paid (per cent)
Group
Total
4.00
or
less
4.01
to
4.50
Most common rate paid (per cent)
Total
4.51
to
5.00
Memo:
ceiling
rate1
NUMBER OF BANKS
748
744
744
Size of bank (total deposits in millions of
dollars):
Less than 20...............................................
20-50...........................................................
50-100.........................................................
100-500.......................................................
500-1,000...................................................
1,000 and over...........................................
300
328
39
64
300
328
39
62
300
328
39
62
14
14
14
For notes, see p. 352.
4.01
to
4.50
4.51
to
5.00
Memo:
ceiling
rate1
MILLIONS OF DOLLARS
All banks.........................................................
2
4.00
or
less
256
(2)
(2
)
161
(2
)
13
19
(2
)
60
(2
)
(2
)
255
255
161
(2)
13
( 2)
( 2)
60
161
( 2)
13
( 2)
( 2)
60
354
A5.
Federal Reserve Bulletin □ April 1977
Government time deposits in denominations of less than $100,000—
Maturities of 30 up to 90 days
Most common interest rates paid by insured commercial banks on new deposits, October 27, 1976
Most common rate paid (per cent)
Group
Most common rate paid (per cent)
Total
Total
4.50
or
less
4.51
to
5.00
5.01
to
5.50
Memo:
ceiling
rate1
5.51
to
7.75
4.50
or
less
NUMBER OF BANKS
4.51
to
5.00
Memo:
ceiling
rate1
5.51
to
7.75
MILLIONS OF DOLLARS
All banks...............................
4,301
3,231
854
216
1,141
Size of bank (total deposits
in millions of dollars):
Less than 20.....................
20-50.................................
50-100...............................
100-500.............................
500-1,000..........................
1 000 and over.................
2,160
1,198
328
460
91
64
1,354
1,108
265
390
62
53
638
57
64
55
29
11
168
33
251
100
134
452
85
120
A6.
5.01
to
5.50
15
737
1
361
43
150
92
127
241
28
99
60
6
7
210
56
21
40
2
1
Government time deposits in denominations of less than $100,000—
Maturities of 90 up to 180 days
Most common interest rates paid by insured commercial banks on new deposits, October 27, 1976
Most common rate paid (per cent)
Group
Most common rate paid (per cent)
Total
Total
4.50
or
less
4.51
to
5.00
5.01
to
5.50
Memo:
ceiling
rate1
5.51
to
7.75
4.50
or
less
NUMBER OF BANKS
5.01
to
5.50
5.51
to
7.75
Memo:
ceiling
rate1
MILLIONS OF DOLLARS
All banks.............................
7,498
702
6,078
718
Size of bank (total deposits
in millions of dollars):
Less than 20...................
20-50...............................
50-100.............................
100-500...........................
500-1,000........................
1,000 and over...............
4,246
2,145
467
492
85
63
359
188
70
50
18
17
3,394
1,751
398
432
60
44
492
207
A7.
4.51
to
5.00
33
131
956
81
500
184
91
165
51
177
9
7
2
1,168
25
16
45
16
435
159
46
131
35
149
40
9
(2
)
(2
)
17
(2
)
(2
)
Government time deposits in denominations of less than $100,000—
Maturities of 180 days up to 1 year
Most common interest rates paid by insured commercial banks on new deposits, October 27, 1976
Most common rate paid (per cent)
Group
Total
4.50
or
less
4.51
to
5.00
5.01
to
5.50
5.51
to
7.75
Most common rate paid (per cent)
Memo:
ceiling
rate1
Total
4.50
or
less
NUMBER OF BANKS
4,375
361
3,062
952
Size of bank (total deposits
in millions of dollars):
Less than 20...................
20-50...............................
50-100.............................
100-500............................
500-1,000........................
1,000 and over...............
2,185
1,414
272
373
74
57
304
1,518
1,005
155
279
53
51
363
409
94
68
13
5
For notes, see p. 352.
5.01
to
5.50
Memo:
ceiling
rate1
5.51
to
7.75
MILLIONS OF DOLLARS
All banks............................. .
23
25
8
1
4.51
to
5.00
33
688
58
477
153
195
213
18
33
132
132
46
81
7
21
180
22
56
12
(2)
(2)
135
13
53
(2
)
(2
)
8
Changes in Time and Savings Deposits
A8.
355
Government time deposits in denominations of less than $100,000—
Maturities of 1 year or more
Most common interest rates paid by insured commercial banks on new deposits, October 27, 1976
Most common rate paid (per cent)
Most common rate paid (per cent)
Total
Total
Group
5.01
to
5.50
5.00
or
less
5.51
to
6.00
6.01
to
7.75
Memo:
ceiling
rate1
5.01
to
5.50
5.51
to
6.00
6.01
to
7.75
Memo:
ceiling
rate1
MILLIONS OF DOLLARS
NUMBER OF BANKS
All banks.............................
7,786
214
425
5,128
2,018
Size of bank (total deposits
in millions of dollars):
Less than 20...................
20-50................................
50-100.............................
100-500...........................
500-1,000........................
1,000 and over...............
4,136
2,459
586
479
75
51
139
33
16
20
4
2
164
155
39
39
17
11
2,291
2,124
336
305
42
31
1,542
147
195
115
12
7
A9.
5.00
or
less
33
6
564
293
126
111
27
55
( 3)
50
749
372
2
1
1,177
21
3
15
6
2
3
298
270
26
88
21
47
242
19
86
16
( 2)
( 2)
2
( 2)
( 2)
Other time deposits in denominations of less than $100,000—
Maturities of 30 up to 90 days
Most common interest rates paid by insured commercial banks on new deposits, October 27, 1976
Most common rate paid (per cent)
Most common rate paid (per cent)
Group
Total
Total
4.50
or
less
4.51
to
5.00
Memo:
ceiling
rate1
4.50
or
less
11
6,324
Size of bank (total deposits in millions of
dollars):
Less than 20...............................................
20-50...........................................................
50-100.........................................................
100-500.......................................................
500-1,000....................................................
1,000 and over..........................................
2,986
1,770
773
621
98
77
A10.
Memo:
ceiling
rate1
MILLIONS OF DOLLARS
NUMBER OF BANKS
All banks.........................................................
4.51
to
5.00
6,313
5,959
2,986
1,770
773
616
93
76
2,850
1,630
741
595
80
64
86
608
360
961
1,502
1,402
2,486
7,233
6,741
(2
)
73
(2
)
7,319
608
360
961
( 2)
1,329
( 2)
584
348
873
1,444
1,221
2,272
Other time deposits in denominations of less than $100,000—
Maturities of 90 up to 180 days
Most common interest rates paid by insured commercial banks on new deposits, October 27, 1976
Most common rate paid (per cent)
Group
Total
Most common rate paid (per cent)
Total
4.50
or
less
4.51
to
5.00
5.01
to
5.50
Memo:
ceiling
rate1
4.50
or
less
NUMBER OF BANKS
4.51
to
5.00
5.01
to
5.50
Memo:
ceiling
rate1
MILLIONS OF DOLLARS
All banks.........................................................
11,464
55
1,457
9,951
9,872
29,844
1,791
28,049
27,685
Size of bank (total deposits in millions of
dollars):
Less than 20...............................................
20-50...........................................................
50-100.........................................................
100-500.......................................................
500-1,000...................................................
1,000 and over..........................................
6,510
3,037
1,014
719
99
84
55
967
309
133
26
14
8
5,488
2,728
881
693
85
76
5,433
2,728
881
680
79
71
3,655
5,192
3,707
7,124
2,731
7,434
200
238
474
146
153
579
3,451
4,954
3,232
6,977
2,578
6,855
3,442
4,954
3,232
6,929
2,518
6,610
For notes, see p. 352.
.
356
A ll.
Federal Reserve Bulletin □ April 1977
Other time deposits in denominations of less than $100,000—
Maturities of 180 days up to 1 year
Most common interest rates paid by insured commercial banks on new deposits, October 27, 1976
Most common rate paid (per cent)
Group
Total
Most common rate paid (per cent)
Total
4.50
or
less
4.51
to
5.00
5.01
to
5.50
Memo:
ceiling
rate1
4.50
or
less
NUMBER OF BANKS
4.51
to
5.00
Memo:
ceiling
rate1
MILLIONS OF DOLLARS
All banks.........................................................
8,951
32
479
8,440
8,204
4,377
Size of bank (total deposits in millions of
dollars):
Less than 20...............................................
20-50...........................................................
50-100.........................................................
100-500.......................................................
500-1,000...................................................
1,000 and over..........................................
5,271
2,093
794
615
98
79
29
411
4,832
2,093
763
589
90
74
4,640
2,093
747
576
82
1,733
373
639
560
345
726
A12.
5.01
to
5.50
66
95
4,276
3,990
(3
)
41
(2
)
(2
)
30
2
)
2
)
13
1,693
373
610
548
340
714
1,610
373
602
546
329
530
Other time deposits in denominations of less than $100,000—
Maturities of 1 up to 2y2 years
Most common interest rates paid by insured commercial banks on new deposits, October 27, 1976
Most common rate paid (per cent)
Group
Total
Most common rate paid (per cent)
Total
5.00
or
less
5.01
to
5.50
5.51
to
6.00
Memo:
ceiling
rate1
5.00
or
less
NUMBER OF BANKS
All banks.........................................................
Size of bank (total deposits in millions of
dollars):
Less than 20...............................................
20-50...........................................................
50-100.........................................................
100-500.......................................................
500-1,000...................................................
1,000 and over..........................................
A 13.
240
13,311
13,059
33,919
8,112
164
33
32
8
1
2
7,947
3,436
1,037
711
97
82
7,756
3,413
1,021
696
95
78
10,551
8,021
3,545
4,848
1,839
5,116
100
84
5.51
to
6.00
Memo:
ceiling
rate1
MILLIONS OF DOLLARS
13,553
3,469
1,069
719
5.01
to
5.50
( 2)
( 2)
33,468
32,757
241
35
113
20
( 2)
( 2)
( 2)
10,311
7,986
3,432
4,828
( 2)
( 2)
10,119
7,986
3,430
4,687
1,736
4,798
Other time deposits in denominations of less than $100,000—
Maturities of 2y2 up to 4 years
Most common interest rates paid by insured commercial banks on new deposits, October 27, 1976
Most common rate paid (per cent)
Group
Total
Most common rate paid (per cent)
Total
6.00
or
less
6.01
to
6.50
Memo:
ceiling
rate1
6.00
or
less
NUMBER OF BANKS
All banks......................................................................
Size of bank (total deposits in millions of
dollars):
Less than 20............................................................
20-50........................................................................
100-500....................................................................
500-1,000.................................................................
1,000 and over.......................................................
For notes, see p. 352.
12,204
224
6,910
3,422
991
707
96
79
193
11,980
6.01
to
6.50
Memo:
ceiling
rate1
MILLIONS OF DOLLARS
11,856
18,421
294
18,128
17,786
6,717
6,688
4,464
100
3,422
3,356
4,825
23 50-100...................................................................... 63
968
945
1,971
704
3
702
2,730
( 2)
5
91
89
1,144
87
1
78
77
3,288
( 2)
4,364
4,825
1,908
( 2)
1,058
( 2)
4,248
4,767
1,908
2,665
1,021
3,178
Changes in Time and Savings Deposits
A14.
357
Other time deposits in denominations of less than $100,000—
Maturities of 4 up to 6 years
Most common interest rates paid by insured commercial banks on new deposits, October 27, 1976
Most common rate paid (per cent)
Total
Group
Most common rate paid (per cent)
Total
6.50
or
less
6.51
to
7.00
7.01
to
7.25
Memo:
ceiling
rate1
6.50
or
less
NUMBER OF BANKS
6.51
to
7.00
7.01
to
7.25
Memo:
ceiling
rate1
M ILLIONS OF DOLLARS
Ml banks...................................................................
11,773
107
1,748
9,918
9,918
44,500
783
4,357
39,360
39,360
Size of bank (total deposits in millions of
dollars):
Less than 20.........................................................
20-50......................................................................
50-100....................................................................
100-500.................................................................
500-1,000..............................................................
1,000 and over.....................................................
6,794
3,118
991
694
98
79
57
33
942
639
110
46
6
6
5,795
2,445
881
641
88
68
5,795
2,445
881
641
88
68
6,547
10,015
5,781
9,301
4,086
8,770
8
122
774
1,795
348
799
259
383
5,765
8,099
5,433
8,341
3,796
7,927
5,765
8,099
5,433
8,341
3,796
7,927
A15.
8
4
5
161
32
461
Other time deposits in denominations of less than $100,000—
Maturities of 6 years or more
Most common interest rates paid by insured commercial banks on new deposits, October 27, 1976
Most common rate paid (per cent)
Group
Total
5.00
or
less
5.01
to
7.25
7.26
to
7.50
Memo:
ceiling
rate1
Most common rate paid (per cent)
Total
5.00
or
less
NUMBER OF BANKS
5.01
to
7.25
7.26
to
7.50
Memo:
ceiling
rate1
MILLIONS OF DOLLARS
All banks.........................................................
8,168
402
7,765
7,765
9,243
638
8,606
8,606
Size of bank (total deposits in millions of
dollars):
Less than 20...............................................
20-50.......................................... ................
50-100.........................................................
100-500.......................................................
500-1,000...................................................
1,000 and over..........................................
4,244
2,287
882
592
87
77
191
80
94
20
9
8
4,052
2,206
788
572
78
69
4,052
2,206
788
572
78
69
699
1,832
1,486
1,940
936
2,351
15
25
127
67
121
282
684
1,806
1,359
1,873
815
2,068
684
1,806
1,359
1,873
815
2,068
A16.
Club accounts—Christmas savings, vacation, or similar club accounts
Most common interest rates paid by insured commercial banks on new deposits, October 27, 1976
Most common rate paid (per cent)
Group
Most common rate paid (per cent)
Total
Total
.01
to
4.00
0.00
4.01
to
4 .50
4.51
to
5.50
Memo:
ceiling
rate1
0.00
NUMBER OF BANKS
.01
to
4.00
4.01
to
4.50
4.51
to
5.50
Memo:
ceiling
rate1
MILLIONS OF DOLLARS
All banks..............................
9,021
5,015
1,219
654
2,133
180
1,837
418
201
198
1,019
209
Size of bank (total deposits
in millions of dollars):
Less than 2 0 ...................
2 0 -5 0 ................................
50-100..............................
100-500............................
500-1,000.........................
1,000 and over...............
4,921
2,622
842
504
75
58
3,286
1,298
258
133
24
16
552
501
70
80
11
5
359
174
55
45
10
10
722
648
460
246
30
27
121
46
12
237
245
430
371
125
431
122
118
50
75
24
29
37
60
11
52
19
22
17
8
33
36
33
71
60
59
335
208
48
308
19
187
3
For notes, see p. 352.
358
Statements to Congress
Statement by A rthur F. Burns , Chairman ,
B oard of Governors of the Federal Reserve
System , before the Committee on the B udget ,
£/.S. Senate, M arch 22, 7977.
It is a special pleasure for me, Mr. Chairman,
to meet with this committee. The action taken
by the Congress in 1974 to establish a formal
legislative budget is one of the great events of
our time. In my judgment, the work of this new
committee and of your counterpart in the House
has already amply demonstrated the wisdom of
the Congressional Budget Act.
In August of 1976, when I last communicated
with this committee, there was a considerable
concern in our country over the slowing in the
pace of economic recovery. I then called atten
tion to the fact that temporary pauses were not
uncommon during business-cycle expansions
and went on to suggest that reacceleration of
economic growth would probably occur soon
because improving conditions were discernible
in key sectors of the economy.
It is clear now that a quickening of the eco
nomic tempo did occur in the latter months of
1976. Retail sales began to show improvement
last autumn across a broad spectrum of mer
chandise lines, and by Christmas it was evident
that consumers generally were in a spending
mood. Brisk consumer buying during the fourth
quarter enabled business firms to work off
excess inventories that had accumulated during
previous months when retail demand was
weaker. With sales and inventories coming into
better balance, production and new orders began
to quicken and the demand for labor increased.
Employment rose strongly in the final 2 months
of last year and again in the first 2 months of
this year— with the cumulative rise over the 4
months amounting to 1lA million persons.
These developments testify to the fact that
as 1977 began, our Nation’s economy was al
ready emerging from its phase of slowing. That
fact would be better appreciated, I believe, were
it not for preoccupation with gross national
product (GNP) numbers as such. The figure for
the fourth quarter of last year was obviously
disappointing, showing as it did an annual rate
of gain of only 2.6 per cent in constant-dollar
terms. That outcome, however, reflected the
inventory adjustment that was in progress.
When inventory changes are removed from the
GNP figure— in other words, when we focus on
final sales of goods and services— we have a
better indicator of the underlying trend of the
economy. This magnitude showed a decidedly
stronger rate of gain in last year’s final quar
ter— an annual rate of growth of 5.7 per cent.
Indeed, when one abstracts from the inventory
changes that overlay broad economic trends
during the course of 1976, the picture of steadily
improving final sales is impressive. And it
would have been even more impressive, I be
lieve, had it not been for the distortions caused
by strikes in the rubber and automobile indus
tries. It is noteworthy that the annual rate of
growth in final sales, measured in constant dol
lars, rose in successive quarters of 1976, while
the corresponding figures for GNP kept declin
ing.
For a brief period, the unusual weather of
January and February tended to obscure the
reacceleration under way in the Nation’s econ
omy. January numbers, in particular, were
badly distorted, and, of course, we still do not
know how seriously agricultural production will
be affected this year by the drought in parts of
the West. Recent data, however, preponderantly
confirm a smart snapback from the weatherrelated disturbances, and we may reasonably
expect good gains in general economic activity
during the remainder of 1977 and on into 1978.
Statements to Congress
The economy is now relatively free of the
kind of speculation and imbalances that devel
oped in the early 1970’s. Consumer purchasing
power— badly hurt for some years by inflation’s
heavy toll— is exhibiting a healthier trend. So
too is business income. Material improvement
has occurred in personal and corporate balance
sheets. Inventories in general seem to be pru
dently related to sales trends. The housing in
dustry is steadily working out of the difficulties
brought on by the overbuilding of the early
1970’s. Even business investment— while lag
ging in its recovery pace relative to earlier
business-cycle expansions— is gradually gaining
strength. And, I might add, the financial envi
ronment in our country is now conducive to
economic expansion, as is evidenced both by the
state of liquidity that generally prevails and by
the truly striking fact that the level of interest
rates is appreciably lower than at the beginning
of the recovery.
In view of this combination of circumstances,
as I have indicated in other recent congressional
testimony, it seems doubtful that any special
governmental efforts are now needed to assure
substantial gains in our economy this year. A
few months ago, when plans aimed at bolstering
aggregate demand first began to take shape, the
case for supportive action had greater plausi
bility. But some significant developments have
since then occurred— particularly, of course, the
demonstration that economic expansion is reaccelerating and that the reacceleration has ap
parently survived the weather disturbance.
Such reservations as I or others at the Federal
Reserve have about the immediate need for new
fiscal stimuli should not be interpreted to mean
that the Federal Reserve will stop short of doing
what it can to foster a satisfactory rate of eco
nomic growth this year. On the contrary, as I
have repeatedly stated, the President’s objec
tives for 1977, with regard to both the growth
of output and decline of unemployment, appear
to be entirely reasonable.
The growth ranges that we at the Federal
Reserve have established for monetary expan
sion this year, as reported to the House Banking
Committee in February, are adequate in our
judgment to permit a significantly faster rise in
359
physical output during 1977 than occurred dur
ing 1976. For M-1, the narrowly defined money
stock— which includes only currency and de
mand deposits— the Federal Open Market
Committee (FOMC) has specified a growth
range of 4 x per cent to 6 V per cent for the
h
2
year ending with the fourth quarter of 1977. For
M-2, a broader measure of money, which in
cludes savings and consumer-type time deposits
at commercial banks as well, the range is 7 to
10 per cent. For M-3, a still broader aggregate,
which also includes the deposits of thrift insti
tutions, the range is 8 V to IIV2 per cent.
2
It is highly important to recognize that the
ability of these monetary aggregates to accom
modate economic growth depends not just on
their size but also on the intensity with which
money balances are used— that is, on the turn
over of money. The turnover of the narrowly
defined money stock— or, if you prefer, its
velocity— has been rising especially rapidly in
recent years, reflecting numerous innovations in
financial technology that have enabled individ
uals and business firms to reduce reliance on
demand deposits for handling their monetary
transactions. Our judgment is that such econo
mizing in the use of cash balances will continue,
and— of necessity— we must take that consid
eration into account in setting our monetary
expansion ranges.
The growth ranges that the FOMC has estab
lished for monetary growth are, of course, not
immutable. Large uncertainties always surround
economic forecasts, and the relationships that
exist between financial and real variables are
complex and often loose. For these reasons we
are very mindful at the Federal Reserve that
constant reappraisal of the appropriateness of
our monetary growth ranges is required. Should
developments in the months ahead indicate that
the ranges established for monetary expansion
are inconsistent with the achievement of satis
factory performance of our economy, the
FOMC would alter them— either upward or
downward, depending on what signals emerge.
Indeed, a formal detailed review of our longerterm monetary growth ranges occurs every 3
months, with the next such review scheduled
for the FOMC’s mid-April meeting.
360
Federal Reserve Bulletin □ April 1977
The judgments that go into our process of
reassessing monetary growth rates are literally
continuous, and they are not made lightly. The
members of the Federal Open Market Commit
tee make the final decisions, but in doing so
we rely heavily on the investigations and
knowledge of our excellent staff. We also bene
fit greatly from the knowledge and experience
of the officers and directors of the Federal Re
serve banks and branches across our country.
I want to assure you, moreover, that commit
tee meetings such as today’s are very helpful
to us in clarifying congressional intent and pur
pose. So, too, are the oversight hearings con
ducted by the banking committees of the Con
gress. The Federal Reserve does not operate in
an ivory tower. We well understand the need
for checking and expanding our knowledge, and
we therefore supplement interchange of the kind
we are having today with a great deal of infor
mal contact with individual members of the
Congress and with officials of the Treasury
Department, the Council of Economic Advisers,
the Office of Management and Budget, and other
agencies. Such dialogue is, in fact, continuously
occurring.
The subject of money and banking can at
times be difficult even for experts. I recall vi
vidly the questions concerning monetary policy
raised by some members of this committee soon
after the disbursal of the tax-rebate and special
Social Security checks in 1975. Since pending
legislation before the Congress would involve
another substantial rebate program this spring,
it may be helpful to review the earlier episode
and at the same time share with you our plans
for adjusting monetary actions to this year’s
proposed rebates.
The objective of the Federal Reserve in 1975
was to accommodate as smoothly as possible
the sudden large flow of funds through bank
accounts occasioned by the rebate program.
This involved action to supply bank reserves to
the market in the period before the rebate checks
were mailed, since the Treasury was then
building up its balances at Federal Reserve
banks in anticipation of making the dis
bursements. Had we not acted supportively in
the pre-rebate period, total bank reserves would
have tended to fall— as would private holdings
of money— and interest rates would have been
subjected to upward pressure. For the rebate
period itself, our intent was to allow the depos
iting of rebate checks in bank accounts to go
forward without any special effort on our part
to influence the impact of such deposit activity
on money growth. We recognized, of course,
that the money supply would accelerate signifi
cantly for a while, but we also anticipated that
it would subsequently moderate as households
and businesses disposed of deposits that had
temporarily risen above accustomed levels.
As events actually unfolded in May and June
of 1975, the rise that took place in the money
supply was much larger than the Federal Re
serve staff had estimated would occur as a result
of the rebate program. The inference we drew
was that the demand for money was expanding
rapidly quite apart from the rebate program. We
therefore took mildly restrictive action toward
the end of June to reassure the Nation that the
Federal Reserve would not countenance mone
tary expansion on a scale that might release a
new wave of inflation. Differences of judgment
existed then— and still do— as to the appro
priateness of that mild tightening action. Let me
say only that if we erred, the mistake was
technical in origin— that is, it grew out of the
difficulty in making good estimates of the taxrebate impact on deposit growth. In any event,
monetary growth rates soon moderated, and we
lost very little time in returning to an easier
monetary stance.
Fortunately, in judging the monetary effects
of this year’s proposed rebate program, we have
a better basis for making estimates because the
1975 experience is available for guidance.
Whereas our 1975 estimates of how money
supply growth would be affected were single
point estimates, this time we will make a range
of estimates in recognition of the uncertainties
inherent in trying to gauge how much of their
rebates people will elect to hold in money form
and for what length of time. In short, I expect
that our zone of tolerance in permitting mone
tary expansion to run at high rates for a while
will be somewhat wider this time. But if we
then find that monetary growth does not soon
Statements to Congress
moderate in the expected degree, we may need
to take action to absorb bank reserves tempo
rarily. All in all, my belief is that we learned
something in 1975 and that consequently a re
bate program this year has a good chance of
being handled relatively smoothly.
A basic working premise of the Federal Re
serve is that there is an urgent national need
to create job opportunities for the millions of
Americans who want to work but who never
theless now find themselves idle. The solution
to this problem, and especially amelioration of
the difficulties that young people have in finding
employment, is not to be found exclusively— or
even mainly— in government programs aimed
at enlarging aggregate demand. It is of crucial
importance that our citizens understand better
than they do that inflation is itself a prime source
of much of our nationwide unemployment.
There is no doubt in my mind, as I read the
record of the early 1970’s, that inflationary
distortions were the principal cause of the recent
severe recession. Nor do I have much doubt that
the expansion of employment now in process
will be threatened if we fail to develop a strong
anti-inflation policy.
That is why monetary policy, while fully
supportive of economic growth, has diligently
sought to avoid the release of new inflationary
forces. That is also why I have been so con
cerned that the Congress recognize the powerful
momentum that has been built into Federal
spending by the “ entitlement” programs en
acted in the 1960’s. We need to take great care
in adding new permanent programs to the
budget, lest they accentuate underlying budget
pressures that will manifest themselves later on
and create financial stresses that jeopardize eco
nomic growth and employment.
Fortunately, we have made considerable
progress since 1974 in lowering the rate of
inflation. Consumer prices rose about 5 per cent
last year, down from 12 per cent 2 years earlier.
But it is going to be difficult to achieve further
significant reductions in the immediate future.
Substantial amounts of idle capacity and man
power provide little assurance that price pres
sures will not mount as the economic growth
rate speeds up. Indeed, the historical record of
361
business cycles in our country clearly demon
strates that the average level of sensitive com
modity prices tends to start rising at or close
to the very beginnings of a business-cycle
upswing and that the prices of final goods and
services gather substantial upward momentum
well before full utilization of resources is
achieved.
We are now witnessing in fact some disturb
ing manifestations of price pressures in our
economy. The prices of basic commodities in
wholesale markets have been moving up at a
rapid pace since last fall. The wholesale prices
of industrial commodities at all stages of proc
essing have increased at an annual rate of 8 per
cent during the past half year. At the consumer
level, even abstracting from the temporary im
pact of weather on some food items, there has
been a tendency recently for prices of many
goods and services to rise at an increased rate.
These developments suggest the need for
great care in fashioning fiscal and monetary
policies. Our official actions must not contribute
to inflationary psychology. Not only that, but
we need to convince both businessmen and
consumers that a break with the past is under
way— particularly, that our Nation’s finances
will henceforth be handled with greater pru
dence than they have in the past.
The task of effecting a transition to a noninflationary environment is one to which the Fed
eral Reserve must make a major contribution.
The monetary growth ranges established during
the past 2 years have been considerably higher
than they should be over the long run. Ideally,
the combination of increases in the money stock
and increases in velocity should approximate the
economy’s longer-term growth rate of physical
output, which is about 3 l/i per cent. If we could
come close to such an alignment, the trend of
the general price level would tend to stabilize
and inflation would be a thing of the past.
We are, of course, a long way from that
objective and, as a practical matter, we cannot
move to it in one fell swoop. The shock of
adjustment would be too abrupt in view of the
need to keep the economy moving along a
satisfactory path of expansion. But the diffi
culties inherent in moving swiftly to appropriate
362
Federal Reserve Bulletin □ April 1977
growth rates for money do not mean we should
be acquiescent. Rather, a policy of gradual
reduction in monetary growth rates toward
levels consistent with reasonable price stability
must be adhered to. The Federal Reserve has
in fact been gradually lowering its projected
growth ranges for the monetary aggregates. We
know that we must do better in order to lay
a foundation for lasting prosperity. I assure you
that we will be striving in that direction.
□
Statem ent by Henry C. W allich, M em ber,
B oard of Governors of the Federal R eserve
System , before the Subcommittee on Financial
Institutions Supervision, R egulation, and In
surance of the Committee on Banking, Finance,
and Urban Affairs of the U.S. House of R epre
sentatives, M arch 23, 1977.
tions that have increased the needs of these
multinational corporations for international fi
nancial services.
Superimposed on these broad trends were two
further developments that have greatly added to
international credit demands from U.S. and
other banks. The first of these developments was
the substantially increased credit demands from
a large number of countries, many of which had
embarked on expansionary programs during the
commodity price surge and worldwide inflation
of the early 1970’s and subsequently found
themselves with unsustainable rates of growth
of imports. Borrowers in this position— not only
the developing countries but also other primary
producers and some highly industrialized coun
tries— have obtained substantial amounts of
loans from American banks and also from banks
of other major industrial countries.
The second major development was the sharp
increase in oil prices and the special financing
problems that resulted from the emergence of
a current-account surplus for the Organization
of Petroleum Exporting Countries (OPEC),
which has aggregated close to $150 billion in
the past 3 years. The rapid accumulation of debt
appeared relatively manageable so long as it
seemed probable that the OPEC surplus would
diminish fairly rapidly. Developments that be
came apparent in the course of 1976 indicate
that the OPEC surpluses will be larger and
persist longer than had been expected several
years ago. This changed outlook makes more
difficult the situation of the borrowing countries,
calls for a more deliberate process of balance
of payments adjustment on their part, and may
also make it necessary to develop alternative
financial arrangements.
Growth in international lending by U.S.
banks in the late 1960’s and early 1970’s was
I appreciate the opportunity to appear before this
subcommittee to discuss the important and
timely topic of international lending by U.S.
banks. In my statement this morning I will
present a brief survey of: (1) the growth in scope
of U.S. banks’ international lending, with em
phasis on recent developments, (2) some prob
lems and concerns that arise from the interna
tional operations of U.S. banks, and (3) actions
that the Board of Governors of the Federal
Reserve System has taken in the supervisory
area as growth in international operations has
proceeded. It seems appropriate to keep this
review brief since this subcommittee, together
with the House Committee on Banking, pub
lished an extensive study of “ U.S. Banks
Abroad,” only 9 months ago as part of the
Financial Institutions and the Nation’s Economy
(FINE) study.
GROWTH OF U .S. B A N K S’
INTERNATIONAL ACTIVITIES
The expansion of U.S. banks’ international ac
tivities in the past decade has reflected a number
of developments, in addition to the central role
of the dollar in international finance. In part,
the expansion was the consequence of the
growth of international trade, which has more
than quadrupled over this period, and the greatly
expanded activities of multinational corpora
Statements to Congress
concentrated at foreign branches, since foreign
credits extended by U.S. offices were subject
to the Voluntary Foreign Credit Restraint
(VFCR) program. Subsequently, foreign lend
ing from U.S. offices expanded rapidly as the
VFCR program was relaxed and terminated. By
the end of 1976, total claims on foreigners by
both domestic offices and foreign branches of
U.S. banks amounted to $207 billion, most of
which were held by foreign branches.
In addition, majority-owned foreign subsidi
aries of U.S. banks had total assets of $30
billion at the end of 1975, the latest date for
which comprehensive data are available. The
activities of these subsidiaries, which include
both banks and other financial institutions, are
in most cases similar to those conducted through
overseas branches. A preference for subsidi
aries, where it exists, reflects mainly reasons
relating to corporate structure or to legal and
regulatory requirements in particular foreign
countries.
Let me now turn to the geographic distri
bution of foreign claims at head offices and
foreign branches. At the end of 1976, U.S.
banks held $45 billion of claims on non-oil less
developed countries (LDC’s). Loans to Mexico
and Brazil each accounted for about one-fourth
of the total, and the remaining loans were
mainly to a few major Latin American coun
tries, and to Korea, the Philippines, and
Taiwan. Thus lending by U.S. banks to coun
tries classified as LDC’s has been concentrated
in the upper-income LDC’s whose economies
have been growing rapidly in recent years.
Many of these countries have been traditional
customers of U.S. banks because of longstand
ing economic relations with the United States.
U.S. bank lending to LDC’s with some of the
more highly publicized problems has actually
been relatively small.
The largest share of the foreign assets of U.S.
banks represents claims on the Group of Ten
(G-10) countries and Switzerland, and claims
on offshore banking centers such as the Ba
hamas, Singapore, Panama, and Hong Kong.
Altogether, these claims total about $125 bil
lion. A large proportion of these claims, espe
cially in the case of the United Kingdom and
the offshore banking centers, are interbank
363
placements with offices of major international
banks, including foreign branches of nonaffil
iated U.S. banks. These placements typically
have short maturities and frequently serve as
secondary liquidity reserves in Euro-currency
banking. These interbank placements result in
some enlargement of reported U.S. bank claims
on individual countries since the placements
between different U.S. banks are not netted out.
Apart from interbank transactions, the claims
on G-10 countries include a wide variety of
credits— longer-term credits to multinational
companies, short-term trade finance, and equip
ment leases as well as some loans to major
public-sector borrowers.
It should be emphasized that these aggregate
figures on loans to individual countries cannot
be used to measure the amount of exposure of
our banks in these countries. Part of the aggre
gate represents interbank placement where the
exposure is generally regarded as small; part
represents local-currency lending funded lo
cally; and other portions may be externally
guaranteed or possess different characteristics
offering protection to the lending banks.
PROBLEMS AND CONCERNS
Rapid growth of international lending by U.S.
banks has given rise to some problems. These
problems are a subject of legitimate concern to
bank supervisors and to the banks themselves.
Before turning to some of these problems and
concerns, perspective requires recognition of the
benefits that have been derived from the expan
sion of international lending by commercial
banks.
First of all, this lending has filled a traditional
and important role in the financing of our foreign
trade. It has also contributed to the efficient
functioning of world credit and capital markets
and to the financing of vital projects such as
North Sea oil development.
Another important benefit from international
lending has been the contribution to the earnings
of U.S. banks. In recent years, reported inter
national earnings have accounted for as much
as 60 to 70 per cent of total earnings for a few
of the largest banks, and for close to half of
364
Federal Reserve Bulletin □ April 1977
total earnings for a number of other large banks.
Earnings from international operations have en
abled the banks to add to their capital resources
and have helped provide a cushion to absorb
the effects of domestic loan losses.
Nevertheless, the expansion of the banks’
international activities has necessarily been ac
companied by greater risk exposure. The
principal elements of this exposure are the tra
ditional credit risks in international loan portfo
lios, the separate risks arising out of lending
in different sovereign jurisdictions (the “ country
risk” problem), and the risks associated with
the banks’ foreign exchange operations under
floating exchange rates.
Many of the credit risks in international lend
ing are the same as in domestic lending, even
though the banking practices and the legal and
regulatory environments may differ. On the
other hand, international lending is subject to
special kinds of risk, usually subsumed under
the heading of “ country risk.” This type of risk
may be divided into two categories:
1. Balance of payments difficulties resulting
from external or internal economic causes that
can lead to devaluation, foreign exchange con
trols, or some form of debt rescheduling or even
default;
2. Risks arising from social or political up
heavals.
Concern about the country-risk element in
international loans has, of course, been greatly
enlarged by the effect of the oil crisis on the
payments positions of many countries and the
large payments deficits and growing volume of
external indebtedness that have ensued.
Despite these special risks in international
lending, U.S. banks’ loan loss experience to
date has been better internationally than domes
tically. Over the 5 years from 1971 to 1975,
the loss ratio on international loans of the seven
largest U.S. banks was about one-third of the
loss ratio on the total loan portfolio. Even in
1975 and 1976 when loan losses rose sharply
on all types of loans, the loan/loss ratio on
international loans remained substantially below
that for domestic loans. So far, problem inter
national loans seem to have been concentrated
in real estate, as has been true of problem
domestic loans. Nonetheless, it would be un
wise to project automatically into the future the
low international loan losses of the past.
Besides these risks in international credits,
the potential exposure of banks in their foreign
exchange operations has been increased by the
shift in the international monetary system to
floating exchange rates and by the actual fluctu
ations that have occurred in foreign currency
values. The contribution of improper foreign
exchange dealings to the failure of Franklin
National Bank is well known, as are the losses
incurred by some banks overseas. While U.S.
banks appear to have adopted management pro
cedures adequate to limit their exposure in their
foreign exchange dealings, their success in con
trolling that exposure must be a matter of con
tinuing concern to regulatory authorities.
In addition to these concerns about the expo
sure of the banks, the view has sometimes been
expressed that foreign lending by U.S. banks
is occurring at the expense of lending to credit
worthy domestic borrowers. On this subject,
several points should be kept in mind. The great
bulk of the international lending by American
banks is financed by foreign-source funds. This
statement applies not only to the loans made
by the overseas branches of American banks but
also to loans made from offices in this country.
There is, of course, some cyclical variation in
the extent to which foreign lending from U.S.
offices is matched by foreign sources of funds
to the banking system. In periods of relatively
reduced domestic demand for bank loans, as
occurred in 1975 and 1976, banks may rely
more heavily on U.S.-source funds to finance
foreign loans, while in periods of high credit
demands in our economy, U.S. banking offices
may become net users of foreign-source funds,
as occurred in 1974.
But, more broadly, it must be stressed that
at times such as the present, when the United
States has a deficit on its international transac
tions in goods and services (current account),
we are a net capital importer.
If American banks lend additional amounts
abroad, and if the foreign borrowers do not buy
more of our goods and services but instead
purchase goods and services from other coun
tries, a company, bank, or official institution
abroad will acquire additional financial assets
Statements to Congress
in the United States, such as U.S. Treasury bills
or securities.
ACTIONS TAKEN BY
THE FEDERAL RESERVE
This review of some of the current problems
in international lending is necessarily abbre
viated. While care needs to be taken not to
exaggerate these problems, concern about them
is legitimate and, as I indicated earlier, is shared
in the banking industry as well. One indication
of such concern is the steps that have been, and
are being, taken within the banks to review and
tighten their procedures and controls in the
international area.
Bank supervisors have also responded to
changes in the international activities of U.S.
banks. I should like therefore to turn to the
measures that have been taken and are being
taken within the Federal Reserve System in the
exercise of its supervisory responsibilities in this
area.
First, however, I should emphasize that zerorisk banking is not an objective of bank super
vision. Banks must make judgments and take
reasonable risks. One way bank supervisors can
strengthen the banking system is by ensuring
that adequate information is available to the
banks. An example is the current effort by the
Federal Reserve System, in cooperation with the
Bank for International Settlements (BIS) and
other central banks of the G-10 countries, to
obtain data on the total amounts, maturity dis
tribution, and guarantee status of bank credits
to borrowers in individual countries other than
those developed countries participating in this
effort. The expanded coverage and the maturity
information in this report will represent a
marked improvement over data currently avail
able to banks and bank supervisors. Moreover,
for the first time, aggregate information will be
available that includes the geographic distri
bution of credits that are covered by guarantees
external to the borrowing country.
In addition, other reports received by the
System are being reviewed and in some cases
revamped to make them more useful from a
supervisory point of view to the monitoring of
365
the banks’ international operations. In the same
vein, the frequency of our overseas examina
tions has been stepped up and the procedures
by which examiners scrutinize bank manage
ment systems and controls over their interna
tional operations are under active review.
Secondly, the banks have been encouraged
to keep their international, as well as their
domestic, expansion within prudent limits
through the Board’s “ go-slow” policy. The
Board has been unwilling to approve proposals
for new expansionary ventures or investments
when in the Board’s judgment management’s
priority attention should be directed to im
provement of the bank’s own condition and
particularly to strengthening its capital structure.
The Board has also cautioned the banks about
their exposure in international joint ventures. In
a policy statement issued early last year, the
Board indicated that, in considering applications
to make investments in foreign joint ventures,
it would take into account the possibility that
the applicant might for business reasons accept
a degree of financial responsibility for the
foreign joint venture well beyond that indicated
by its investment.
In the area of foreign exchange the Federal
Reserve conducted a survey in late 1974 of bank
practices regarding foreign exchange exposure
and controls over their foreign exchange opera
tions. That survey, the results of which were
sent to the Congress in 1975, indicated that the
banks surveyed set conservative limits on their
foreign exchange positions and that the meas
ures followed by them in controlling that expo
sure through reporting practices, internal con
trols, and auditing procedures were generally
adequate. However, we are continuing to work
with the banks and the Comptroller of the Cur
rency to develop minimum standards for the
internal control of banks’ foreign exchange
operations.
Among other efforts to improve our supervi
sion of international lending, the Federal Re
serve is currently conducting, through inter
views, an informal survey of commercial bank
practices in defining, monitoring, and control
ling country risk. This survey, which covers
about 25 large banks, reveals that U.S. banks
engaged in international financial activities
366
Federal Reserve Bulletin □ April 1977
typically have systems for measuring and con
trolling country risk, although the content of
these internal systems differs from bank to bank.
The banks surveyed are aware of the complexity
of measuring country exposure and are actively
seeking to improve their internal systems.
Finally, I should like to mention the initia
tives that have been taken to improve interna
tional cooperation in the supervision of interna
tional activities. The Federal Reserve is an ac
tive member of the BIS Committee on Bank
Regulation and Supervisory Practices. That
committee was established in early 1975 as a
means of promoting exchanges of information
and views about bank supervisory practices and
bank supervisory problems. In addition to the
educational value of such exchanges, the con
tacts established and maintained through this
committee have materially strengthened the
ability of bank supervisors in the major coun
tries to deal with individual problems as they
emerge.
Over the longer run, one of the benefits of
these international cooperative efforts will be
improved supervision of our banks’ operations
overseas with the assistance of foreign banking
authorities and from their point of view, im
proved supervision of their banks’ activities in
the United States with the assistance of Ameri
can bank supervisors.
One complication in development of close
cooperation in banking supervision between na
tional authorities is the fact that supervisory
authority over the entry and activities of foreign
banks in the United States is primarily the
responsibility of the State banking authorities.
The United States is unique in this respect. To
improve this situation, and also because of the
growing importance of foreign banks in the
functioning of U.S. credit and money markets,
the Board has been urging enactment of Federal
legislation for the regulation of foreign banks
in the United States. It is sincerely hoped that
these proposals will be reviewed this year and
that they will soon be incorporated into U.S.
law.
□
Statement by D avid M . L illy, M em ber, B oard
of Governors of the Federal R eserve System ,
before the Subcomm ittee on Econom ic S tabili
zation of the Committee on Banking , Finance ,
and Urban A ffairs, U.S. House of R ep re
sentatives, M arch 30, 1977.
existing guarantee programs or would involve
the use of the Government’s guarantee of loans
for a number of new purposes, particularly in
the energy field. These developments clearly
point to the need for the Congress to make a
thorough assessment of the public policy impli
cations of programs that utilize the Federal
Government’s credit standing and to improve
procedures for evaluating and accounting for
such programs.
As you noted in your letter, the character of
the Government’s loan guarantee activities has
been changing. Old, well-established programs
generally have involved the provision of a
guarantee on relatively small loans in the agri
cultural, mortgage, or small business areas.
Under these programs, risk has been spread
among a large number of borrowers and over
a wide geographical area, and default rates have
proven to be low and fairly predictable. In the
case of Federal Housing Administration (FHA)
Section 203b insured mortgages, as an out
standing example, premiums charged for this
I appreciate the opportunity to appear before you
this morning to discuss Federal Government
loan guarantees. I would like to say at the outset
that I am not an expert on the wide range of
specific guarantee programs. I intend, therefore,
to focus my remarks on the general question
of the economic implications of loan guarantees
and the treatment of such guarantees in the
budgetary process.
The volume of guaranteed loans has been
rising rapidly in recent years, reflecting growth
under longstanding programs as well as the
introduction of additional programs established
to foster a variety of new public policy objec
tives. The Congress has also been deluged of
late with proposals that would further expand
Statements to Congress
insurance have more than covered all losses to
date.
Most of these older programs were estab
lished to remedy imperfections thought to exist
in the private credit markets that resulted in a
smaller flow of credit into certain uses than
seemed warranted by underlying economic cir
cumstances. Such imperfections were attributed
to lenders’ inability to pool large amounts of
risk, their lack of knowledge about the charac
teristics of borrowers, and/or their reluctance to
innovate new lending terms. It was, in part, to
acquaint lenders with new opportunities that
these programs were administered in ways that
involved the private sector in the origination,
servicing, and even coinsurance of loans. This
strategy has often succeeded. In the home
mortgage area, for example, an active and ex
panding private sector has increasingly assumed
the risk-taking functions originally performed
by the Government.
Many of the loan guarantee programs estab
lished more recently have been quite different
in nature. They have involved the use of the
Government’s guarantee of loans to underwrite
spending that has been judged to yield desirable
social objectives, but which may offer only
indifferent prospects of being financially suc
cessful. Programs such as student loans and
assistance for low- and moderate-income home
buyers, for example, would appear to involve
a sizable element of risk to the Government and
subsidy to the recipients since the full repayment
of these loans is recognized to be uncertain.
Other newly proposed programs would in
volve use of loan guarantees to aid in the fi
nancing of projects, particularly in the energy
area, whose exceptionally large size relative to
the borrowing unit virtually precludes private
lenders from providing funds on an unassisted
basis. Also, in some cases, there is considerable
uncertainty as to the feasibility of the technology
to be used or as to whether the economic condi
tions likely to prevail in the future will justify
the undertaking. Thus, in these instances, the
Government would incur a contingent liability
whose size, while unknown, can be presumed
to be quite large.
Moreover, even though such programs are to
be authorized in the form of loan guarantees,
367
private involvement in a large percentage of
them is likely to be modest because the Federal
Financing Bank (FFB) probably will originate,
service, and hold the great bulk of these loans.
As you know, since it began operating in 1974,
the FFB has not only made direct loans to
Government agencies but has also acquired a
substantial volume of Government-guaranteed
loans as well. There is, in any case, little
substantive difference between a direct loan and
a guaranteed loan held by a private borrower
in which risk of failure to repay is assumed by
the U.S. Government. The FFB’s acquisition
of guaranteed loans further blurs this distinction,
however, and in effect converts guaranteed
loans into direct loans.
There are, however, clear advantages gained
when the FFB acquires guaranteed loans. Such
acquisitions serve to consolidate and bring order
to the process of issuing Government-guaran
teed debt instruments. Potential disruptions to
the functioning of securities markets that could
be caused by numerous public sales of guaran
teed security issues are thus avoided. In addi
tion, the FFB loans funds that it has borrowed
from the Treasury, and it is therefore able to
hold the interest rates it charges to levels that
are just above the rates the Treasury pays when
it borrows in the market. Guaranteed loans,
when placed in private hands, normally carry
interest rates significantly higher than rates on
Treasury securities of similar maturity because
such loans lack the liquidity of direct Treasury
issues. The savings realized by what, in effect,
amounts to the substitution of direct Treasury
debt for guaranteed loans can accrue either to
the borrower through lower interest charges or
to the taxpayer if a fee is levied on the guaran
teed loan.
Concerns have been expressed in some quar
ters that the advantages offered by the FFB may
be encouraging growth of guaranteed loans. In
my view such concerns are perhaps misdirected.
I would prefer to attribute the growth of such
loans to the way they have been treated in the
budgetary process. As you are well aware, the
exclusion of loan guarantee programs from the
regular appropriation process eases their initia
tion and impedes their subsequent control. The
amount of guaranteed loans does not appear in
368
Federal Reserve Bulletin □ April 1977
functional categories of the budget, and some
individual guarantee programs extend over
many years, with little periodic zero-base re
view or control other than over-all limits set by
the Congress. Moreover, new loan guarantee
programs have little or no impact on current
budgets. There is no formal mechanism in many
programs for establishing reserves when loan
guarantees are made in order to cover defaults
that might occur while the loans are outstanding.
Instead, losses on guaranteed loans are reflected
in the budget at the time they occur.
Loan guarantee programs also impose other
costs on the taxpayer. In some guarantee pro
grams, such as guaranteed student loans, subsi
dies are provided explicitly to those receiving
guarantees. In addition, there are programs in
which the cost of processing loan applications
and servicing loans are borne by the Govern
ment. Loan guarantees also tend to raise the
amount of interest that must be paid on the
national debt. This occurs because instruments
bearing the full faith and credit guarantee of the
Federal Government are viewed as close substi
tutes for direct Government debt by many in
vestors, and the competition from such instru
ments might tend to increase the cost of the
Treasury’s own debt financing operations.
Loan guarantees also have other significant
effects on the economy that are difficult to
quantify and almost never find their way into
budgetary discussions. These effects are the
shifts in resource allocation patterns caused by
the operation of loan guarantees. The principal
reason for loan guarantees, of course, is to
redistribute credit to favored sectors so as to
stimulate production of particular types of goods
or services.
In the case of many programs, the credit
provided finances activities that would not oth
erwise have been undertaken. Many of the pro
grams proposed for energy development, for
example, are of this latter type. In the case of
other programs, guaranteed loans may not pro
duce an equivalent increase in spending in the
area because funds might be shifted by the
borrower from one use to another or because
credits obtained under a guarantee may simply
replace borrowing that would have otherwise
occurred. But even in these latter cases, it seems
quite likely that the reduced cost of financing
induces some additional outlays.
While loan guarantees generally result in a
net increase in credit used to finance selected
types of expenditures, it must be stressed that
coincidentally the volume of funds available for
loans to borrowers not favored by such pro
grams tends to be diminished and the cost of
these funds may be raised. As a result, the
additional spending on projects backed by loan
guarantees will be offset to some extent by
reduced expenditures for other purposes.
To sum up then, loan guarantees, as well as
other forms of Federal credit assistance, make
funds available to finance certain types of
spending that have been deemed through the
legislative process to be of high social value.
These funds are not provided without cost,
however. Defaults on guaranteed loans result in
a direct drain on the Treasury’s tax revenues,
and there are other types of attendant costs
including the higher interest rates on Treasury
debt caused by enlarging the supply of securities
carrying the full faith and credit of the Federal
Government.
Recognition that loan guarantees are not
costless or without side effects does not neces
sarily lead to the conclusion that such programs
should be eliminated. But it does highlight the
need for careful evaluation of the relationship
between their benefits and costs. I do not believe
this is being done adequately at present since
budgetary procedures do not establish for the
Congress a suitable framework for making such
assessments.
While there is widespread agreement that
reforms in the budget treatment of credit pro
grams are desirable, there is little consensus on
what a revised budget should contain. Some
budget authorities have argued that all the credit
activities of the Federal Government should be
incorporated in the unified budget. Under this
approach, outlays would include all loan con
tracts guaranteed by the Government and its
agencies as well as all direct loans. The budget
would then measure the increase in the actual
and potential financial liability of the Govern
ment, thereby providing a comprehensive ac
counting of the Government’s involvement in
the credit markets.
Statements to Congress
An all-inclusive budget would also focus at
tention on the total resource allocation effects
of Government activity. Congressional commit
tees responsible for various functional areas of
the budget would be better able to consider
Federal credit programs in tandem with taxation
and expenditure programs. Thus, judgment on
the advisability of adopting alternative ap
proaches to achieving budgetary goals would be
improved and a better understanding of the
over-all impact of the Government on the econ
omy would be obtained.
An alternative approach to the budgetary
treatment of credit activities would be one in
which Federal credit extensions, whether in
volving direct loans or guaranteed loans, would
be excluded from the unified budget and kept
track of in a separate set of accounts. This
approach has been recommended by analysts
who emphasize the difference between outlays
that involve the acquisition of financial assets,
on the one hand, and purchases of goods and
services or transfers of income on the other. In
the former case, the Government receives a
claim on a borrower as an offset to its provision
of funds; in the latter, it does not.
By affording similar status to direct and
guaranteed loans and carrying them in a separate
loan account, this approach would also highlight
the Federal Government’s impact on the credit
allocation process. At the same time, the unified
budget would conform more closely to a busi
ness firm’s statement of income and expense.
Loan transactions under this approach would not
be reflected in the unified budget except to the
extent that defaults and/or subsidies on these
loans give rise to outlays. In a proper accounting
scheme, of course, these types of costs should
enter the budget on an accrual basis when the
potential liability is incurred, rather than on a
cash basis at the time of default. To implement
this procedure, the Congress would have to
estimate the potential for defaults on loans made
in any year, and then appropriate sufficient funds
to be held in a reserve account to cover the
defaults as they occur.
Requiring current estimates of eventual costs
to taxpayers might well produce a more careful
appraisal of various Federal credit proposals.
But the difficulties that would be encountered
369
in making these estimates would be substantial,
especially in the case of programs instituted or
proposed more recently that involve large ele
ments of unknown risk. Yet, it is clear that some
estimates, however tenuous, would be prefera
ble to current practice, which in general ignores
possible future costs of such programs.
The need to distinguish between Federal
credit programs and other expenditures was
recognized by the 1967 Presidential Commis
sion on the Budget. Specifically, with respect
to direct loans the Commission advised that
while such transactions should be placed in the
comprehensive budget, they should be set apart
from other outlays. Such a different treatment
was advised in order to permit the calculation
of an expenditure account surplus or deficit and
to facilitate analysis of the impact of direct
loans. The Commission also recommended that
subsidy elements in direct loans should be esti
mated and reflected in expenditure accounts.
With regard to the budgetary treatment of
loan guarantees, the Commission offered no
specific recommendations because it had not had
time to study this question sufficiently. It indi
cated, however, that coordinated surveillance of
direct and guaranteed loans was desirable and
that a summary should be prepared with the
budget, setting forth amounts of guaranteed and
insured loans outstanding and direct loans.
In adopting the Unified Budget concept in
1968, the President accepted the Commission’s
recommendation to include direct loans in the
budget. The recommendation to delineate be
tween loan disbursements and other outlays was
also adopted initially, but this practice has been
abandoned in recent budgets. Also, the recom
mendation for estimating subsidy elements was
introduced in only a very few instances. Over
the years, greater attention has been brought to
bear on loan guarantees, as they have been
reviewed in some detail— along with direct
loans— in a chapter of the Special Analysis
document that accompanies the budget. This
approach, however, is obviously no substitute
for one that would require consideration of
Federal credit programs in the formal budget
process, and it was disappointing that the Bud
get Control Act of 1974 did not mandate such
treatment.
370
Federal Reserve Bulletin □ April 1977
The problems of budgetary management of
Federal credit programs under review by this
Committee are obviously as complex as they
are important. Careful study and deliberation
will be required before a comprehensive budg
etary system can be derived that will best serve
the various needs of the Congress. I will not
attempt to offer specific recommendations for
a program that might best serve these objectives,
but I would like to mention several points that
I believe deserve careful consideration in your
deliberations.
First, if it is decided to continue including
the direct loans of Government-owned agencies
in the budget, it seems clear to me that all such
loans should be so treated. In this regard, last
year’s congressional decision to return the Ex
port-Import Bank to the budget was a salutary
development. Similar treatment, I believe,
should be considered for other agencies, in
cluding the FFB. There is no difference in
substance between a direct Federal loan and a
loan that is guaranteed by a Government agency
and acquired by the FFB. If one type of loan
is included, then so should the other.
A problem that could very well arise from
including the FFB in the budget, however, is
that its lending and investing operations could
become an easy target for those wanting to make
pseudo cuts in the budget. In that case, the
financing of loans guaranteed by Federal agen
cies might tend to be shifted back to the piece
meal and costly approach that prevailed prior
to the initiation of the FFB. Accordingly, any
changes in the budgetary status of the FFB
would have to be accompanied by other meas
ures that prevent the loss of the cost saving
benefits that are provided by the FFB. Perhaps,
legislation could be enacted that would require
agencies to place certain types of loan guaran
tees exclusively with the FFB. This point clearly
would need detailed exploration.
Second, should the decision be made to con
tinue to keep privately held loan guarantees off
the budget, it is imperative that steps be taken
to achieve more effective congressional surveil
lance and control of these programs. At a mini
mum all such loans should be included on a
separate line in the concurrent budget resolu
tion. This highlighting of the total of Govern ment-loan guarantees will provide both the
Congress and the public with a more complete
picture of the Government’s involvement in the
economy.
The Congress should also establish rules re
quiring reconsideration of each loan guarantee
program on a yearly basis. In carrying out this
task, I would further advise the initiation of
zero-base budgeting; that is, the Congress
should ask whether a program continues to be
necessary before it decides to continue and
expand it.
Finally, the Congress should require the for
mulation of estimates of the potential defaults
on loans that have been guaranteed and should
make provisions for these losses in the budget
by setting up reserve accounts. Such reserves
are not needed for direct loans or guaranteed
loans held by Government agencies if they are
already reflected as outlays in the budget.
In concluding, I would like to say that we
at the Board regard the passage of the Congres
sional Budget Act, and its implementation in
the past 2 years, as a major advance in the
interests of sound budget management. The
reforms in the treatment of Federal credit pro
grams and loan guarantee programs that may
result from the efforts of this committee would
constitute an additional substantial step toward
this important goal.
□
Statement by J. Charles Partee, M em ber, B oard
of G overnors o f the Federal R eserve System ,
before the Subcommittee on D om estic M onetary
Policy of the Committee on Banking, Finance,
and Urban A ffairs, U.S. House of R ep re
sentatives, M arch 30, 1977.
I am happy to appear on behalf of the Board
of Governors to discuss the implications of U.S.
Treasury financing requirements for monetary
policy. Your chairman has asked me to com
ment, in particular, on whether the increased
Federal deficit financing needs soon to be
Statements to Congress
created by the administration’s proposed fiscal
package are likely to complicate the manage
ment of monetary policy.
At the outset, I should emphasize that under
the institutional arrangements in the United
States, decisions on monetary policy and Treas
ury debt management are kept relatively inde
pendent from one another. When the Treasury
seeks to issue new debt, it generally does so
in the securities market, paying rates that are
competitive with those available on debt securi
ties of other borrowers. This market-oriented
approach permits the Treasury to cover its fi
nancing requirements without special support
from the central bank. The Federal Reserve is
then left free to pursue its monetary policy
objectives, which are set with reference to what
we believe consistent with the emerging needs
of the over-all economy.
In some other countries, new public debt is
financed initially at the central bank, often at
rates below the cost of borrowing from market
sources. When this approach is followed, the
central bank in effect creates money to pay the
government’s bills, at least until such time as
it can successfully resell the securities to the
private investment community. Monetary policy
is thus subordinated to the immediate require
ments of financing the public debt, and in the
process the central bank may sometimes lose
control of the nation’s supplies of money and
credit. Sooner or later, this lack of control is
likely to bring escalating rates of domestic in
flation, along with the economic distortions and
instabilities that rapid inflation breeds.
The fact that our governmental structure sep
arates responsibility for debt management from
that for monetary policy, however, does not
mean that the Federal Reserve is not vitally
interested in successful Treasury debt manage
ment. A failure by the Treasury to cover its
financing requirements, in addition to precipi
tating a crisis in public credit, would disrupt
financial markets and create serious problems
for other borrowers as well. Such a development
would doubtless make it necessary for the Fed
eral Reserve to divert open market operations
for a time from more fundamental objectives
to the task of coping with the immediate finan
cial market difficulty.
371
To help minimize the possibility of Treasury
financing failures, the Federal Reserve during
the 1950’s and 1960’s followed the practice of
maintaining an “ even-keel” posture in mone
tary policy at the time of major debt manage
ment operations. Basically, this commitment
meant that during the critical days of important
Treasury financings in the coupon market, the
Federal Reserve would not take overt monetary
actions— such as a change in the Federal Re
serve discount rate or a significant shift in the
thrust of open market operations— which might
be construed by participants in the U.S. Gov
ernment securities market as a basic adjustment
in monetary policy. In more recent years there
has been a gradual relaxation in the constraints
on monetary actions imposed by this “ evenkeel” commitment. This relaxation has been
possible mainly because the Treasury has intro
duced debt management innovations that have
made its financings less vulnerable to sudden
variations in market interest rates.
Perhaps the most significant of these innova
tions has been the increased emphasis on the
auctioning of new debt offerings. In the 1950’s
and 1960’s when the Treasury sold new notes
and bonds, it generally announced fixed interest
rates on the new issues 5 or 6 days in advance
of taking subscriptions. Under this procedure
the financing could be jeopardized by any siz
able, unexpected increase in market interest
rates that developed between the announcement
and actual offering of the new issues. When
yields on outstanding market securities rose just
before the offering date, the terms of the new
issues naturally looked less attractive to inves
tors. If this erosion of investor interest went too
far, the Treasury ran the risk of failing to sell
enough of its new debt and thus of being tem
porarily embarrassed for lack of funds. Under
the auction procedure now used this risk is
reduced because the yields and prices of new
issues are determined through bidding on the
date of the financing itself, rather than some
days before.
A second innovation in debt management that
has diminished the constraint of “ even-keel”
considerations on the conduct of monetary pol
icy has been the restructuring of much of the
marketable debt into regularized cycles of debt
372
Federal Reserve Bulletin □ April 1977
offerings that can be handled on a rather routine
basis. Financings are split into moderate-sized
auctions that occur on a definite schedule, which
encourages investors to accumulate funds for
regular placement in Treasury issues.
It is fortunate that the Treasury has been able
to channel much of its recent borrowing into
these relatively routine debt offering cycles be
cause the heavy Federal deficits of the past few
years have greatly expanded both the aggregate
volume of Government financing and the fre
quency of new issues. Last year, for example,
the Treasury sold in the market $93 billion in
new notes and bonds to refund maturing debt
and to raise new cash, far above the $25 billion
average annual volume that had prevailed during
the decade from 1965 to 1974. Moreover, last
year’s financings included 30 separate issues of
new marketable debt other than Treasury bills,
compared with an average of 12 per year from
1965 to 1974.
Against this background, if a rigorous
“ even-keel” approach to Treasury financings
were required, the greater frequency of opera
tions could often delay needed Federal Reserve
actions and to that extent reduce the flexibility
of monetary policy. Of course, there is always
a free and full exchange of information on such
matters as financial market conditions and Fed
eral financing requirements between the Treas
ury and the Federal Reserve. But if we are to
be successful in maintaining effective control
over longer-run growth in the monetary aggre
gates, sufficient leeway to make timely adjust
ments in the supply of bank reserves is an
essential prerequisite.
This brings me to the more immediate ques
tion of whether the administration’s proposed
tax rebate and social security payment package
is likely to create any special difficulties for
Federal Reserve policy during the months just
ahead. Two possible sources of difficulty have
been identified.
First, some analysts have speculated that the
sheer weight on financial markets of Treasury
borrowing to finance this package might inhibit
the flexibility of Federal Reserve actions. I do
not think that this is a realistic possibility.
Although the $10 billion or so expected to be
distributed as tax rebates and associated pay
ments during the next few months is a very large
sum, it is not likely to create a major financing
problem for the Treasury. Not only will the bulk
of the payments be occurring during a part of
the year when regular income tax receipts would
otherwise be creating a seasonal surplus, but the
persistent shortfall in Federal spending below
budget estimates thus far in the current fiscal
year has held aggregate deficit financing re
quirements somewhat below market expecta
tions.
In a broader sense, the addition of another
$10 billion to the Treasury’s borrowing needs
extends the period of exceptionally heavy deficit
financing and increases the risk that adverse
financial market effects could begin to accumu
late. The Federal deficit in the current calendar
year— including the deficits of off-budget agen
cies— now seems likely to approach $80 billion,
up $17 billion from last year and only moder
ately less than in calendar year 1975. If these
large deficit financing needs persist into the time
when private credit demands are rising strongly
in response to continued economic recovery,
substantial pressures on both the cost and avail
ability of credit might very well develop. But
this is a longer-run and more generalized con
cern.
The second aspect of the fiscal package that
poses a potential problem for the Federal Re
serve is the likelihood that the rebates will
produce temporary— but difficult to interpret—
distortions in the monetary aggregates. To the
extent that these temporary rebate effects dis
guise the more fundamental influences on mon
etary growth, it will be difficult for a time to
determine the near-term course in money growth
and interest rates that is most likely to be con
sistent with the developing financial require
ments of the economy.
To help understand why the impact of the
tax rebates on monetary growth is so difficult
to predict, let me briefly discuss the relationship
of U.S. Treasury cash balances to the money
supply. First, it should be noted that although
the Treasury holds its cash balances as demand
deposits, partly with commercial banks and
partly with Federal Reserve Banks, neither type
of deposit is included in statistics on the money
supply. Deposits held by other key types of
Statements to Congress
spending units— households, businesses, and
State and local governments— do, of course, all
appear in the monetary aggregates.
The rationale for excluding Treasury deposits
from the various measures of money has tradi
tionally been that spending decisions by the
Federal Government are not at all influenced
by the size of its cash position. Federal spending
programs are legislated by the Congress and
supported by tax revenues or borrowed funds.
Thus, the level of the Treasury’s bank balance
at any given point simply reflects different flow
patterns of outlays and receipts.
The spending decisions of other economic
units, on the other hand, do appear to be in
fluenced significantly by the size of their liquid
balances. Since this relationship is a critical link
in understanding the probable impact of mone
tary developments on aggregate spending in the
economy, it is important to have statistics on
the monetary aggregates that provide the most
meaningful analytic measures of these variables.
The exclusion of Treasury balances from the
published money supply statistics, however,
may occasionally present difficulties in inter
preting short-run movements in these data.
Whenever taxpayers or investors make net pay
ments to the Federal government, their deposit
balances tend to be drawn down and those of
the Treasury rise. Similarly, when the Treasury
spends more than it receives, its balances are
drawn down and those of other units in the
economy tend to rise. But most of these shifts
in cash position between the public and the
Treasury are regularly recurring events related,
for example, to the timing of tax payment dates
and periodic Treasury financings. Therefore,
they tend to wash out in the seasonally adjusted
measures of the money supply that are used as
guides to monetary policy.
Even after taking out the seasonal, our statis
tical studies have not shown a predictable, con
sistent relationship between variations in the
Treasury’s balance and changes in money
growth rates. This is probably because of the
myriad of transactions that go through deposit
accounts each day, and also because most large
depositors typically adjust their demand bal
ances promptly to desired levels. In the rebate
case, however, the Treasury disbursements will
373
be especially large; they will be concentrated
in timing and nonseasonal in character; and the
payments will be made to families rather than
to business units. There will probably be some
delay as families deliberate on how to use the
windfall, and, if so, there will be a sharp tem
porary upsurge in their average cash balances
and a resulting spurt in the growth of the mone
tary aggregates. Later, as these balances are
spent, there should be a reversal of the money
bulge, and a concomitant slowing in monetary
growth until the recipients have used the funds
and cash balances have been reduced to normal
working levels. This is the pattern of response
that seemed to occur in the money growth
numbers during the prior tax rebate episode in
1975.
Looking to the months ahead, it is hard to
judge with any precision how large the distor
tions in money growth rates triggered by the
1977 fiscal package may be. We have only one
prior experience to draw upon, and today’s
economic setting differs in important respects
from that of 2 years ago. Hence, the Federal
Reserve is likely to have considerable difficulty
as the period progresses in assessing the more
fundamental developments in the underlying
trend of money growth.
Most analysts clearly recognize the compli
cations in evaluating money growth rates during
and immediately after the forthcoming rebate
period. But the intriguing point to me is that
different experts commenting on how the Fed
eral Reserve should cope with this problem are
offering us diametrically opposing advice.
Some argue that because the data on the
monetary aggregates can be expected to behave
erratically, the Federal Reserve should disregard
them in the period during and immediately after
the rebate period. Instead they recommend that
we focus on keeping money market condi
tions— including the Federal funds rate— from
tightening. Since the economy is operating at
substantially below its optimum rate, they see
little risk in adopting this policy approach.
Others argue, on the other hand, that even
temporary abandonment of the aggregates as a
guide to policy would be risky, given the long
lags with which monetary conditions affect the
economy. If the expansion is now gaining mo
374
Federal Reserve Bulletin □ April 1977
mentum, which seems probable, resorting to a
stable interest rate policy might lead to a sub
stantial overrun in growth of the aggregates—
going well beyond the temporary rebate influ
ence. If this were to happen, it is feared that
the Federal Reserve would experience difficulty
holding the longer-run growth rates of the ag
gregates within the ranges that have been speci
fied, with probably adverse future consequences
for the rate of inflation. To avoid the threat of
excessive longer-run monetary growth, this
group recommends keeping a close control over
the aggregates even during the rebate period.
It seems clear that any rigorous effort to hold
down monetary growth rates during the rebate
period would bring substantial and potentially
unsettling short-run interest rate movements—
first upward, and then downward— as the ad
justments in money balances are made. Such
fluctuations would seem to serve little purpose
and could be misleading and disadvantageous
to both borrowers and lenders. A total lack of
attention to the aggregates, on the other hand,
could permit a sizable lasting expansion in
money and credit to get under way, particularly
if the economy continues to strengthen generally
over the period ahead.
In my view, there is a safer middle course
between these two recommended policy ap
proaches. This course would be to attempt to
estimate, in advance, the deviations from other
wise expected patterns of money growth that
might develop due to the special Treasury pay
ments. These estimates would allow both for
an initial period of temporary acceleration in
monetary growth and a succeeding period of
temporary slowing. A need for possible Federal
Reserve actions to counter unusual develop
ments in the monetary aggregates would then
be indicated only to the extent that actual growth
rates moved well beyond the parameters estab
lished by these allowances.
While this was the general approach followed
by the Federal Reserve during the tax rebate
period of 1975, only a single point projection
of the rebate effect was formulated and there
was no prior experience on which to base the
estimate. As it turned out, that point estimate
was on the low side. Consequently, policy
makers inferred that the monetary expansion
actually observed in the spring of 1975 was
greater than could be attributed to the rebate
and hence greater than would be subsequently
reversed. Looking back to that experience, both
the rebate influence and the reversal appear to
have been underestimated.
This time around, I would expect greater
recognition to be given to the uncertainties sur
rounding estimates of what proportions of the
rebates and other distributions will be retained
in money form, and for how long. It may well
be that a range of projections will prove more
reliable than a single point estimate in order to
bracket the various possibilities. Thus it is
probable, as Chairman Burns stated at a Senate
Budget Committee hearing last week, that our
zone of tolerance in permitting monetary ex
pansion to run at high rates for a while will
be somewhat wider this time. But if we find
that monetary growth does not subsequently
moderate in the expected degree, we may then
need to act to keep longer-run expansion of the
monetary aggregates within our stated ranges.
While it is clear that observed money growth
rates are likely to show sizable fluctuations in
the period to come, Federal Reserve policy will
continue to seek longer-run growth rates appro
priate to the requirements of the economy. At
the same time, it is undesirable and unnecessary
to expose the economy to the uncertainties and
destabilizing effects of movements in interest
rates if these are likely to be reversed shortly.
Careful monitoring of emerging economic and
financial developments during and after the re
bate period should permit us to allow for any
needed adjustments in money growth rates and
interest rates on a reasonably timely basis. This
is so since a major virtue of monetary policy
as an instrument of demand management is its
operational flexibility.
□
Statements to Congress
Statement by Philip E. C oldw ell , M em ber ,
B oard of G overnors of the Federal R eserve
System , before the Committee on Banking ,
Housing , and Urban A ffairs, ( 7 .5 . Senate,
A pril 7, 1977.
My appearance before this committee today
represents an opportunity to present and discuss
the expenditures and budgets of the Federal
Reserve Banks and Board of Governors. In this
statement I shall supplement the statistical in
formation already sent to the committee by
providing a broad-based review of the amount
and character of System expenditures and of the
progress achieved in improving productivity,
cost effectiveness, and quality of service.
The Federal Reserve System serves the Na
tion, its Government, the banks, and the general
public, in a variety of ways. First, as the Na
tion’s central bank, the Federal Reserve formu
lates and implements national monetary and
credit policy. Second, as the banker to the
Government, the Federal Reserve issues, re
deems, and exchanges Government securities,
handles most of the Government cash balances,
and provides processing capability for tax pay
ments and food stamps. Third, as a service to
the banking system and the general public, the
Federal Reserve issues and redeems currency
and coin, and clears and processes personal and
business checks. Finally, as a part of the bank
regulatory structure of the Nation, the Federal
Reserve examines, regulates, and supervises
bank holding companies, State-chartered mem
ber banks, and all Edge Act Corporations. The
Federal Reserve provides these various services
through a network of 50 offices employing over
26,000 people.
The System operating budget for 1977
amounts to $753.4 million1 or 7.6 per cent over
1976 expenditures. Of this current year’s bud
get, the Board’s assessment accounts for $48.6
million or 6.5 per cent, while the Federal Re
serve Bank expenses are expected to reach
$704.8 million. System expenditures have in
creased at an annual average growth rate of 11.5
per cent from 1970 to 1977 and at an 8.5 per
1N et 1977 operating expenses (after reimbursements
and recoveries) are expected to be $698.6 million.
375
cent rate from 1974 to 1977. For comparison,
it should be noted that expenditures of the
Federal Government have risen at an annual
average rate of 15.9 per cent in this recent
3-year period.
While maintaining this relatively good costcontrol position, the System has undertaken new
responsibilities assigned by the Congress, has
met sharp increases in bank supervisory work
and rising volumes of operational work at the
Federal Reserve Banks, and has absorbed the
impact of inflation upon wage, material, and
service costs.
Among the principal changes in System re
sponsibilities resulting from congressional ac
tion have been the new supervisory activities
required by the 1970 Amendments to the Bank
Holding Company Act. All one-bank holding
companies formerly exempt from the provisions
of the act were brought under the System’s
jurisdiction by those amendments. Thus, in
1971 the System’s regulatory responsibility was
increased to cover all 1,500 bank holding com
panies contrasted with the 121 multibank hold
ing companies supervised by the System at the
end of 1970. Since then, the number of bank
holding companies has increased to slightly
more than 1,900, which control about two-thirds
of the bank deposits of the Nation. This increase
in the number of holding companies in con
junction with the new requirement to apply for
perm issible nonbank activities led to a
mushrooming application load for the System.
From May 1956, when the Bank Holding Com
pany Act was first implemented, through De
cember 1970, the System acted on 470 bank
holding company applications, an average of 32
per year. From 1971 through 1976, the System
acted on 5,079 applications, an average of 846
per year.
In addition to the processing of holding com
pany applications, the System was assigned
ongoing supervisory responsibilities for bank
holding companies. The Federal Reserve has
had to monitor the activities of these firms, and
to do this has increased its examination staff,
expanded training for examiners, and has
created an extensive financial reporting arrange
ment to support a computer-based surveillance
system.
376
Federal Reserve Bulletin □ April 1977
Turning to another bank supervisory area,
there has been a dramatic growth in the interna
tional activities of U.S. banks in the past few
years. The total assets of foreign branches of
U.S. banks increased from $52 billion in 1970
to over $180 billion by year-end 1976. U.S.
banks were also expanding through foreign
subsidiaries. By year-end 1975 these subsidi
aries had total assets of $30 billion. Federal
Reserve approval is needed for both the opening
of foreign branches and the investment in
foreign subsidiaries. The Federal Reserve also
has ongoing supervisory responsibility over the
operations of foreign subsidiaries and the
foreign branches of State member banks.
The Federal Reserve also has supervisory
authority over State-chartered banks that are
members of the Federal Reserve System. In the
past 6 years, total assets held by State member
banks have increased sharply, and the scope and
complexity of their operations have increased
as well. Such growth has placed a greater bur
den on the System’s examination resources.
Another major area of responsibility assigned
by the Congress is the enlarged System role in
the consumer credit field. The Board is the
principal agency charged with writing regula
tions to implement Federal legislation to protect
consumers and prevent discrimination in exten
sions of consumer credit. The Board first be
came involved in writing consumer protection
regulations with passage of the Federal Truth
in Lending Act in 1968, and since 1969 there
have been four major amendments to Truth in
Lending, including the Fair Credit Billing Act
of 1974 and the Consumer Leasing Act of 1976,
all of which required extensive rule writing by
the Board. In addition, the Board has the re
sponsibility for drafting regulations implement
ing five other consumer protection Acts: the
Equal Credit Opportunity Act of 1974, the Real
Estate Settlement Procedures Act of 1974
(RESPA), the Federal Trade Commission Im
provement Act of 1975, the Home Mortgage
Disclosure Act of 1976, and the 1976 amend
ments to the Equal Credit Opportunity Act.
The System has experienced increases in vol
ume in all functions, but especially in wire
transfers of funds, currency distribution and
destruction, and food stamp and check process
ing. The volume of wire transfers handled by
the Reserve Banks increased 182 per cent from
1970 to 1976. The wire transfer system, in
conjunction with the Federal Reserve’s bookentry system, supports the trading of Govern
ment securities by providing a convenient
mechanism for transferring ownership of these
securities. In addition, the wire system handles
nearly 75,000 funds transfers each day, repre
senting more than $150 billion in bank-to-bank
transfers. This wire system provides the means
by which the Nation’s financial system settles
its business transactions each day in Federal
funds and facilitates better cash management,
thereby improving services to customers and to
the general public.
Currency processed rose 33 per cent in the
period from 1970 to 1976. New innovative
methods are under development to meet this
increasing volume. For example, the System is
currently developing new high-speed currency
equipment that should result in further gains in
productivity in handling currency volumes as
well as yielding improvements in the currency
verification and destruction process.
In 1971 legislation extensively revising the
Food Stamp program resulted in a 44.8 per cent
increase in the volume of food stamps processed
and destroyed by the Federal Reserve over 1970
levels. The 2.0 billion food stamps processed
and destroyed in 1976 represent a 58.2 per cent
increase over the 1970 level, requiring addi
tional personnel, destruction equipment, and
storage facilities.
The System presently handles about 50 mil
lion checks per day or 85 per cent more than
in 1970. While computer processing has mate
rially improved productivity, the problems of
handling this increased volume have required
additional personnel and raised costs since such
operations remain labor-intensive. A concen
trated search for new and better ways of dealing
with this rising flood of paper has paid off in
better service to the public and a slower rate
of growth in expenses over the past few years.
To improve the payments mechanism, the Sys
tem has established 11 new regional checkprocessing facilities since 1970 and has adjusted
operating schedules and transportation arrange
ments to provide for more rapid clearing of
Statements to Congress
checks and a reduction of check-clearing float.
Concurrent with these service improvements,
the System undertook an extensive operations
improvement program that has kept unit-cost
increases for check processing below the rate
of inflation.
The Federal Reserve has taken positive steps
to encourage conversion from costly paper
checks to more efficient electronic payment.
Together with the U.S. Treasury, the System
has established a program of Direct Deposit of
Recurring Federal Payments that allows recipi
ents of Government payments to have their
paychecks, benefit payments, and welfare pay
ments deposited directly to their accounts at any
financial institution through the use of the Fed
eral R eserve data processing and com
munications facilities. Approximately 5.5 mil
lion Government payments are currently made
this way each month, providing a high level of
security, convenience, and reliability, while re
ducing Government disbursement costs by ap
proximately $7 million annually.
As an alternative to making commercial pay
ments by check, the System in conjunction with
its member banks has implemented a program
called the Automated Clearing House. This
program, endorsed by the National Commission
on Electronic Fund Transfers, allows payments
to be made in electronic form rather than paper
check. It is expected that substantial savings to
the private sector as well as to the Federal
Reserve will result as more payments are made
by electronic means.
Of course, a major cause of increased System
expenditures since 1970 has been the very sharp
run-up in prices that we have been forced to
pay for our resources. Since 1970 the Consumer
Price Index has advanced at a compounded
annual rate in excess of 6 per cent and in the
last 3 years the average rate has exceeded 7 per
cent. Advancing wage rates, which stem in large
part from inflationary trends, have a dramatic
impact on System expenditures.
Other costs for such items as machinery and
equipment, office supplies, vehicles, and other
business-related items have also increased rap
idly in this decade. According to the Gross
Business Product Fixed Weight Price Index,
which is a good indicator of cost increases in
377
the business sector for such resources, these
costs have increased by approximately 50 per
cent since 1970, or at an average annual rate
of more than 6 per cent.
Let me now turn your attention to our expense
categories, especially those for personnel; for
postage and expressage; for original cost, ship
ping, and redemption of Federal Reserve notes;
for heat, light, power, water, and taxes; and
for rental of furniture and operating equipment.
These five categories account for about 86 per
cent of the 1977 budgeted expenses of both the
Reserve Banks and the Board.
Personnel costs represent the largest object
of expense in the System and account for 58
per cent of Reserve Bank costs and 81 per cent
of Board operating expenses. Employment in
the Federal Reserve System in 1977 is budgeted
at 25,178 persons in the Federal Reserve Banks
and 1,476 at the Board of Governors, for a total
staffing of 26,654— 5 less than the 1976 level.
From 1970 through 1977, the average annual
growth rate in employment is estimated at 2.8
per cent for the System, but since 1974 em
ployment at the Federal Reserve Banks has
declined by 1,389 persons or 5.2 per cent. In
terms of the 1977 budget for the System, per
sonnel costs are expected to be about 8.8 per
cent above comparable expenses for 1976. This
increase reflects both the rising costs of retire
ment funding and medical benefits, and allow
ance for merit and promotional as well as costof-living increases.
The postage and expressage costs of the Re
serve Banks are expected to increase about 3.7
per cent from 1976 to 1977 and now represent
about one-tenth of total costs. Although the
System has made intensive efforts to hold down
courier and carrier expenses, the impact of ris
ing postal rates and of gasoline, wages, and
security costs to the contract courier companies
has led to some increases.
The third major object of expense, the cost
of Federal Reserve currency— representing
about 7 per cent of the Reserve Banks’ ex
penses— is one largely beyond the control of the
System since the Bureau of Engraving and
Printing sets the price for printing. Such costs
are expected to advance about 8 per cent over
1976, with both a higher unit price from the
378
Federal Reserve Bulletin □ April 1977
Bureau and a larger demand for currency ac
counting for the advance.
Utilities and taxes paid by the Reserve Banks
are also mainly beyond the control of the Sys
tem. These expenditures have increased as a
result of rising energy prices and sharply in
creasing real estate taxes. Such expenses ac
count for nearly 4 per cent of total Bank costs
and are expected to advance about 10 per cent
in 1977.
Finally, rental of furniture and operating
equipment, representing over 5 per cent of Sys
tem expenses, is expected to decline slightly
from 1976 to 1977. This reduction stems pri
marily from the conversion of rented to pur
chased equipment. While such capital purchases
are separate from the operating budgets, the
depreciation charge is reflected in the budget.
It may be helpful to describe the budget and
cost-control process that enables the System
to plan for efficient use of resources in meeting
its responsibilities. The Reserve Bank budget
process begins with the development of the
System-wide budget objective for the forth
coming year. This percentage rate of increase
is set after extensive discussions between the
Board of Governors and Reserve Bank Presi
dents. Factors considered are the specific goals
and objectives for the coming budget year,
expected inflationary impacts, the current and
projected level of Federal Reserve operations,
and the estimated productivity and cost per
formance. Approval of the budget objective by
the Board of Governors occurs before mid-year.
With the help of a highly competent group
of Directors, the Reserve Banks develop their
budgets in light of the budget objective. In
recent years, a competitive atmosphere on pro
ductivity and cost reduction has pervaded the
Reserve Banks’ budget efforts and has resulted
in major savings in operating expenses. This
budget process culminates in a careful review
by the Boards of Directors of the Reserve
Banks, who take an intense interest in the
progress and relative performance rankings of
the Banks.
Receipt of budget information from the Re
serve Banks begins in September with submis
sion of revised current-year expenses and
Budget Overviews depicting total budget pro
jections by output service, object classification,
and capital outlay. Information is also provided
on personnel costs and budget-year and mul
tiyear objectives. The budgets are analyzed by
the Board staff and presented to the Board’s
Committee on Federal Reserve Bank Activities,
which is composed of three Board Members.
The Committee meets with each Federal Re
serve Bank President for intensive review,
analysis, and redirection when necessary. Fol
lowing the budget meetings and with the Com
mittee’s guidance in hand, the final detailed
budgets are prepared and submitted to the Board
for final action in early December.
The budgets of the Federal Reserve Banks
include an assessment for the operating and
construction expenses of the Board of Gover
nors. These expenditures, which form the basis
of the assessment, are subjected to a separate
but similar budget process.
Both the Reserve Bank and Board budget
processes include an intensive screening of pro
posed capital expenditures. Approval of the
budgets, however, does not mean final approval
of land, buildings, computers, or large equip
ment purchases. Each of these must be sepa
rately justified and specifically approved by
the Board of Governors.
An added feature of the System’s control over
expenses is attributable to the sharing of the
effort with the Federal Reserve Banks’ Boards
of Directors. The Chairman of each Reserve
Bank Board tneets personally each year with the
Board’s Committee on Federal Reserve Bank
Activities to review and appraise the operating
efficiency of the Bank and the performance of
its senior officers. These conferences permit
frank exchanges about the strengths and weak
nesses of each Bank and the relative position
of each against the performance of others.
Efforts to improve productivity and decrease
costs are in the forefront in all of the budgeting
and planning guidelines and procedures fol
lowed by the Board and Reserve Banks, and
we believe that these efforts have succeeded.
As an indication of this improvement, actual
output per manhour in our measurable output
functions was estimated to have increased by
almost 12 per cent in 1976 following an increase
of 6 per cent in 1975.
Statements to Congress
In the conventional check-processing area,
which accounts for more than 20 per cent of
Reserve Bank employment, output per manhour
increased by 20 per cent in 1976, and unit costs
for check processing declined by more than 4
per cent in spite of higher prices for resources
and higher charges for usage of automated
equipment. Currency operations have also re
flected sharp efficiency gains with unit costs in
1976 declining by more than 5 per cent.
Some of the gains in output per manhour,
of course, result directly from substitution of
capital for labor. However, the unit costs reflect
an amortization charge for the cost of capital,
and the unit costs have been declining in many
of our operating areas since 1974.
The Board’s staff has made an estimate of
the increase in total factor productivity in the
measurable functions since 1971. This measure
of productivity compares output to the sum of
labor and capital inputs and thus weighs the
increased cost of capital against the decrease in
personnel costs as capital substitution takes
place. The System estimate of total factor pro
ductivity for 1971 through 1974 matches the
estimates that leading economists have calcu
lated for the private sector. Since 1974, how
ever, the System’s total productivity has been
considerably larger than that estimated for the
private sector.
379
To improve the System’s performance, the
Federal Reserve Banks have developed and im
plemented a new expense monitoring and re
porting system that will be used, in part, to
assess the efficiency of the Banks. With the
introduction of Planning and Control System
(PACS) in January 1977, the Federal Reserve
Banks greatly expanded the number of opera
tional measurements available through their ex
pense accounting system. In addition, for over
a year, we have been in the process of testing
and evaluating the feasibility of adopting zerobase budgeting in the Federal Reserve System.
This budgeting approach entails a thorough re
view and analysis of all spending decisions
regardless of prior year commitments. Although
it is too early to predict the outcome of our two
pilot tests, we believe the information and anal
ysis generated by using zero-base budgeting
may develop alternatives with cost-saving im
plications and afford decision-makers a wider
choice of budget options.
The Board believes that its review and budget
processes have created a cost-consciousness
throughout the System and that this has resulted
in better productivity, cost efficiency, and serv
ice to the public. Our developing technological
improvements and new budgeting programs
offer the possibilities of further progress in the
years ahead.
□
380
Record o f Policy Actions
o f the Federal Open Market Committee
MEETING HELD ON FEBRUARY 15, 1977
1.
Domestic Policy Directive
Growth in real output of goods and services had slowed to an
annual rate of 3.0 per cent in the fourth quarter of 1976— from
3.9 per cent in the third quarter and 4.5 per cent in the second—
according to preliminary estimates of the Commerce Department.
However, the pace of growth had accelerated as the quarter pro
gressed. The information reviewed at this meeting suggested un
derlying strength in economic activity, although activity in January
and early February had been affected by the unusually severe
weather.
The index of industrial production had risen appreciably in
November and December, to some extent in recovery from strikes.
The index fell in January because of the severe winter weather
and also, after midmonth, because of shortages of natural gas for
industrial uses. Decreases in output were widespread among durable
and nondurable manufacturing industries, and coal mining was
curtailed sharply. However, electric and gas utilities expanded
production to meet increased demand.
Retail sales had expanded 1% per cent in November and about
4 per cent in December. In January, according to the advance
report, sales declined 2 per cent, reflecting decreases for most types
of stores apparently because of the weather.
The number of new domestic automobiles sold in the first 20
days of January appeared to have held near the annual rate of 9%
million recorded in December, when sales were stimulated to some
extent by recovery from the strike that had limited output and sales
earlier. However, sales fell sharply in the latter part of January,
and for the month as a whole the annual rate was about 8% million.
Labor market surveys completed by mid-January indicated that
employment had continued to expand. In the survey of payroll
employment in nonfarm establishments, gains were reported in
Record of Policy Actions of FOMC
two-thirds of the industries covered, and the total rose substantially
for the third consecutive month. By the time of the survey,
however, the severe weather had already induced a reduction in
employment in construction and a shortening in the length of the
average workweek in manufacturing. In the household survey, the
unemployment rate was reported to have fallen from 7.8 per cent
in December to 7.3 per cent in January. Much of the decline
reflected a drop in the number of persons seeking work, which
may have been caused in part by the weather.
Personal income had expanded vigorously in the last 2 months
of 1976; from the third quarter to the fourth it rose at an annual
rate of about 11 per cent. This sizable gain reflected a rebound
in manufacturing payrolls after termination of strikes, a recovery
in farm income, an increase in Federal pay scales, and the dis
bursement by corporations of unusually large year-end dividends.
Indicators of residential construction activity had remained strong
in the closing months of 1976. In December private housing starts
rose sharply to an annual rate of more than 1.9 million units, the
highest since the autumn of 1973. The rise was broadly based by
region. For the fourth quarter as a whole starts were at an annual
rate of about 1.8 million units, up 15 per cent from the third quarter.
Starts of multifamily units gained more than 30 per cent from the
third quarter to the fourth, reflecting not only a substantial increase
in starts of units covered under Federally subsidized programs but
also a large rise in units not so subsidized.
Businesses were planning to spend 11.3 per cent more for plant
and equipment in 1977 than in 1976, according to the Department
of Commerce annual survey conducted in December. New orders
for nondefense capital goods in December recovered a part of the
sharp decline recorded in November. Contract awards for commer
cial and industrial buildings— measured in terms of floor space—
also had declined sharply in November and then in December
recovered a part of the loss.
The staff projections, like those of a month earlier, incorporated
assumptions that rebates of Federal income taxes and one-time
payments to recipients of social security would be disbursed in
the second quarter; that both personal income taxes and corporate
taxes would be reduced; and that Federal spending for job-creating
programs would be expanded. The projections continued to suggest
381
382
Federal Reserve Bulletin □ April 1977
that real GNP would grow at a substantially higher rate in the
first half of 1977 than it had in the second half of 1976. As to
the first quarter, it was still anticipated that growth in domestic
final purchases of goods and services in real terms would be
relatively well sustained, despite the severe winter weather, but
the rebound in growth in real GNP was now expected to be
considerably less than had been anticipated a month earlier. The
projections now suggested that the rate of business inventory
accumulation would decline further in the first quarter and that
imports, specifically of fuels, would rise more than had been
anticipated.
It was expected that the weather-induced output losses of the
first quarter would soon be made up; for the second quarter, the
projections suggested that real final sales would grow at a rapid
rate and that business inventory investment would increase. It was
anticipated that real GNP would grow at a relatively good rate
in the second half of 1977. The projections still suggested that
the rate of increase in the fixed-weighted price index for gross
business product would change relatively little during this year.
Wage increases provided for in the first year of major collective
bargaining agreements negotiated during 1976 were somewhat more
moderate than those negotiated in 1975. Moreover, the index of
average hourly earnings for private nonfarm production workers
advanced 6 % per cent over the 12 months of 1976, compared with
almost 8 per cent during the previous year. In January 1977 the
index rose sharply; however, the sharpness of the rise reflected
marked increases in the indexes for the construction and service
sectors, where rates of change from month ,to month have been
volatile.
The wholesale price index for all commodities rose 0.5 per cent
in January, almost the same as the average increase in the last
3 months of 1976. Average prices of industrial commodities rose
a little more than in December but less than in the preceding 3
months. Increases were again widespread among industrial com
modity groups; as in December, however, a decline was reported
for the fuel and power group, reflecting some price reductions that
actually had occurred a month or two earlier. Average prices of
farm products and foods also rose, but the increase was relatively
small.
Record of Policy Actions of FOMC
The consumer price index rose 0.4 per cent in December,
resulting in an increase of 4.8 per cent over the 12 months of
1976; during 1975 the index had risen 7.0 per cent. Average retail
prices of foods changed little during 1976, in contrast with a rise
of 6.5 per cent over the previous year. Average prices of other
commodities and of services rose about 5 and 7 per cent, respec
tively, compared with increases of about 6 and 8 per cent in 1975.
The average value of the dollar rose somewhat against leading
foreign currencies between mid-January and mid-February, with
most of the rise occurring in the early part of the period. The
value of the dollar increased against most continental European
currencies and against the Canadian dollar but declined against the
Japanese yen. The pound sterling was subjected to strong upward
pressure in reaction to the international agreements concluded in
early January to provide the United Kingdom with substantial funds
to finance possible future intervention in support of the sterling
exchange rate. However, the pound did not rise against the dollar,
mainly as a result of exchange market intervention by the Bank
of England. The Mexican peso, which had been trading steadily
at 5.0 U .S. cents since early December, fell abruptly on January
20 to 4.3 cents; later, it gradually recovered to 4.5 cents.
The U .S. foreign trade deficit increased further in December,
and the deficit on an international accounts basis was a little larger
in the fourth quarter than in the third. For all of 1976 the trade
balance was in deficit by almost $10 billion, whereas for 1975
it had been in surplus by $9 billion.
Total credit at U .S. commercial banks increased considerably
in January, following a small rise in December. Data for both
months, however, were distorted by special influences— particularly a
substantial increase in bank holdings of bankers acceptances late
in 1976 that was largely reversed in January. Over the 2 months
together, growth of total bank credit— although somewhat above
the rather slow pace in the first half of 1976— was significantly
below the rates in both the third quarter and the October-November
period. Growth of business loans— excluding bankers accep
tances— slowed sharply from the rate in the October-November
period, and at the same time banks shifted from substantial acqui
sition to moderate liquidation of securities other than U .S . Treasury
issues.
383
384
Federal Reserve Bulletin □ April 1977
In the December-January period the outstanding volume of
commercial paper issued by nonfinancial corporations rose sharply,
after having changed little over the preceding 2 months. Never
theless, the combined total of nonfinancial commercial paper and
business loans at banks (excluding bankers acceptances) grew
somewhat less in the latter 2-month period than in the earlier one,
when business needs for financing had apparently been augmented
to some extent by involuntary accumulation of inventories.
The narrowly defined money stock (M -l), which had grown at
an annual rate of about 8 per cent in December, slowed to a rate
of about 4% per cent in January. Although the month-to-month
expansion in M -l recently had been erratic, the average annual
rate of growth over the 6 months ending in January was about
5Vi per cent.1
Growth in M-2 and M-3 slowed appreciably in January from
the rapid rates evident in December and in the fourth quarter. At
banks and thrift institutions, inflows of the time and savings deposits
included in the broader aggregates slowed somewhat, apparently
because of reductions in interest rates paid on these deposits by
some banks and thrift institutions and a rise in rates on competing
market securities.
At its January meeting, the Committee had agreed that early
in the inter-meeting period the Manager of the System Open Market
Account should aim for a Federal funds rate in the area of 4%
to 4 3 per cent and that afterwards the weekly-average Federal
A
funds rate might be expected to vary in an orderly way within
a range of 4 lA to 5 per cent. Throughout the inter-meeting period
incoming data suggested that growth in both M -l and M-2 over
the January-February period would be well within the ranges that
had been specified by the Committee. Accordingly, the Manager
continued to direct operations toward maintaining the Federal funds
rate in the area of 4% to 4 3 per cent.
A
Market interest rates— which had risen abruptly after the turn
of the year— rose somewhat further in the weeks just after the
Revised measures of monetary aggregates, reflecting new benchmark data for
deposits at nonmember banks and revised seasonal factors, were published on
February 17, 1977. On the basis of the revised figures, the annual rate of growth
in M-l in January and also over the 6 months ending in January was about 5%
per cent.
Record of Policy Actions of FOMC
mid-January meeting of the Committee, partly in reaction to the
Treasury’s announcement of the terms of its mid-February refund
ing and of cash needs during the first quarter. Later, however,
rates backed down to about their mid-January levels. At their levels
in mid-Feburary, market interest rates in general were significantly
above their December lows, but they were still a little lower than
at mid-November.
In the 4 weeks since the January FOMC meeting, the U .S.
Treasury had raised $6.5 billion of new cash, including $3.8 billion
raised in connection with the mid-February refinancing. New issues
in the refinancing included $3.0 billion of 3-year notes, $2.0 billion
of 7 -year notes, and $750 million of 30-year bonds. The over-all
size of the offerings was near the upper limit of market expectations.
However, investor interest in the new issues proved to be consid
erable.
In the market for new corporate bonds, the volume of publicly
offered new issues in January was not quite so large as had been
expected because increased interest rates had prompted the post
ponement or cancellation of several issues. Nevertheless, the Jan
uary volume was substantially above the monthly average in the
fourth quarter of 1976. Offerings of new long-term securities by
State and local governments rose sharply in January to $3.4
billion— a record for the month. About $500 million of this supply
was attributable to the issuance of bonds in advance refundings,
and about $700 million represented financing by municipal utilities.
During January yields rose in secondary mortgage markets along
with those in other markets, but interest rates on new commitments
for conventional home loans edged off somewhat further. At the
end of December outstanding mortgage commitments at savings
and loan associations had reached another new high, even though
mortgage takedowns during the month had remained substantial.
At its January meeting the Committee had agreed that from the
fourth quarter of 1976 to the fourth quarter of 1977, average rates
of growth in the monetary aggregates within the following ranges
appeared to be consistent with broad economic aims: M -1, 4V6
to 6 V per cent; M -2, 7 to 10 per cent; and M-3, 8 V to IIV 2
2
2
per cent. The associated range for growth in the bank credit proxy
was 7 to 10 per cent. It was agreed that the longer-term ranges,
as well as the particular aggregates for which such ranges were
385
386
Federal Reserve Bulletin □ April 1977
specified, would be subject to review and modification at subsequent
meetings. It also was understood that short-run factors might cause
growth rates from month to month to fall outside the ranges
contemplated for annual periods.
In their discussion of recent economic developments and pros
pects, members of the Committee agreed that the underlying
situation was strong and that the losses in output, hours of work,
and income resulting from the weather would soon be made up.
Most members agreed in general with the staff projections suggest
ing that growth in real GNP would accelerate to a rapid pace in
the second quarter— reflecting not only the recovery from the
weather-induced losses but also the disbursement of tax rebates
and related payments— and then would continue at a relatively good
rate throughout the second half of the year.
However, one or two members expressed concern that the
weather disturbance and the tax rebates might cause large swings
in business inventory investment and therefore in total GNP. In
this connection, it was suggested that more attention should be
paid to the behavior of final sales than to that of total output.
Despite the broad consensus on the outlook, several members
called attention to actual and possible developments that might
cause real GNP to deviate from the projected path. It was observed,
for example, that severe weather— while having temporary effects
on output, inventories, and incomes much like those of a major
strike— would also transfer purchasing power from consumers to
sellers of fuels, who most likely had a lower propensity to spend.
Partly because of the high fuel bills, it was suggested, the tax
rebates and related payments might have less impact on consumer
spending than one might have expected on the basis of the 1975
experience with rebates.
Looking to the latter part of 1977 and into 1978, some questions
were raised about the adequacy of industrial capacity. In this
connection, attention was called to the recent revisions in the
Federal Reserve estimates of the rate of capacity utilization in
manufacturing in the 1971-76 period. Concern was expressed that
the margin of unused plant capacity that could be drawn into
production might be low in relation to the amount of unemployed
labor. It was also observed that rates of capacity utilization varied
considerably among industries and that during business expansions
Record of Policy Actions of FOMC
bottlenecks begin to spread through the industrial system long
before over-all measures of capacity utilization reach relatively high
levels.
It was suggested that the rise in prices might become more rapid
as activity expanded during the period ahead. Historically, it was
noted, average wholesale prices of industrial commodities had
begun to rise at about the time that business activity had begun
to recover, reflecting increases in prices of raw materials. In the
current business expansion, that pattern had been superimposed
upon the longer-run trend of inflation in the economy. With respect
to the outlook for prices, it was noted also that the severe drought
in the western part of the country may sharply reduce crops of
fruits and vegetables.
One or two members of the Committee suggested that— although
economic prospects appeared to be good— businessmen seemed to
have become somewhat more uneasy in recent weeks about the
near-term effects of the adverse weather, about the longer-term
energy problem, about the possibility of imposition of some form
of price controls, about the Government’s fiscal policy, and about
prospects for inflation. It was felt that this uneasy mood could
inhibit decisions to make expenditures for plant and equipment.
However, another member noted that some of the uncertainties
that had worried businessmen only a few months ago— such as
the “ pause” in growth of economic activity and the size of the
prospective increase in prices of imported oil— had been resolved.
In his opinion, businessmen would soon take a more favorable
view of the climate for capital investment. Still another member
expressed concern about the possibility that business capital invest
ment would rise too strongly at a late stage in the business
expansion.
As to policy for the period immediately ahead, Committee
members in general advocated continuation of about the current
stance. They differed little in their preferences for ranges of growth
in the monetary aggregates over the February-March period. For
M -l, the members endorsed a range of 3 to 7 per cent, although
one indicated a mild preference for a range of 3 V to IV 2 per cent.
2
For M -2, many members favored a range of 7 to 11 per cent.
However, some advocated a slightly lower range— 6 to 10 per
cent— because M-2 had grown over recent months at a rate that
387
388
Federal Reserve Bulletin □ April 1977
was high relative to the Committee’s longer-run range for that
aggregate.
Almost all members favored directing operations initially toward
the objective of maintaining the Federal funds rate in the area of
4% to 4 3 per cent. However, they differed somewhat in their
A
preferences for the upper and lower limits of the inter-meeting
range. The largest number of members preferred to continue the
range of 4 lA to 5 per cent that had been specified at the January
meeting. Some favored ranges of 4 X to 5 lA per cent or AVi to
A
5% per cent, because they believed that additional leeway for
System operations should be provided in the event that growth
in the aggregates over the February-March period appeared to be
significantly faster than now expected.
At the conclusion of the discussion the Committee decided that
growth in M -1 and M-2 over the February-March period at annual
rates within ranges of 3 to 7 per cent and 6 Vz to 10 Vi per cent,
respectively, would be appropriate. It was understood that in
assessing the behavior of the aggregates, the Manager should
continue to give approximately equal weight to the behavior of
M-1 and M-2.
In the judgment of the Committee, such growth rates of the
aggregates were likely to be associated with a weekly-average
Federal funds rate in the area of 4% to 4 3 per cent. The Committee
A
agreed that if growth rates of the aggregates over the 2-month period
appeared to be deviating significantly from the midpoints of the
indicated ranges, the operational objective for the weekly-average
Federal funds rate should be modified in an orderly fashion within
a range of 4 V to 5 per cent. As customary, it was understood
*
that the Chairman might call upon the Committee to consider the
need for supplementary instructions before the next scheduled
meeting if significant inconsistencies appeared to be developing
among the Committee’s various objectives.
The following domestic policy directive was issued to the Federal
Reserve Bank of New York:
The information reviewed at this meeting suggests underlying
strength in economic activity, although industrial production and
retail sales were held down in January by the effects of unusually
severe weather. Housing starts rose sharply in December, and labor
Record of Policy Actions of FOMC
market surveys completed by mid-January indicated a further rise
in employment and a decline in the unemployment rate from 7.8
to 7.3 per cent. The wholesale price index for all commodities
continued to rise, reflecting increases in the averages both for farm
products and foods and for industrial commodities. The index of
average wage rates rose sharply in January as a result of marked
increases in the volatile construction and service sectors.
The average value of the dollar against leading foreign currencies
has risen somewhat over the past month. In December the U.S.
foreign trade deficit increased further; in the fourth quarter as a
whole the deficit was a little larger than in the third quarter.
M -l, which had expanded appreciably in December, grew at a
moderate pace in January. Growth in M-2 and M-3 also moderated.
At banks and thrift institutions, inflows of time and savings deposits
other than large-denomination C D ’s slowed somewhat. Interest rates
have changed relatively little on balance since mid-January.
In light of the foregoing developments, it is the policy of the
Federal Open Market Committee to foster bank reserve and other
financial conditions that will encourage continued economic expan
sion, while resisting inflationary pressures and contributing to a
sustainable pattern of international transactions.
At its meeting on January 18, 1977, the Committee agreed that
growth of M -l, M-2, and M-3 within ranges of 4 l/z to 6 V per
2
cent, 7 to 10 per cent, and 8 V to 1 W 2 per cent, respectively, from
2
the fourth quarter of 1976 to the fourth quarter of 1977 appears
to be consistent with these objectives. These ranges are subject to
reconsideration at any time as conditions warrant.
The Committee seeks to encourage near-term rates of growth in
M -l and M-2 on a path believed to be reasonably consistent with
the longer-run ranges for monetary aggregates cited in the preceding
paragraph. Specifically, at present, it expects the annual growth rates
over the February-M arch period to be within the ranges of 3 to
7 per cent for M -l and 6 V to 10V2 per cent for M-2. In the judgment
2
of the Committee such growth rates are likely to be associated with
a weekly average Federal funds rate of about 4% to 4 3 per cent.
A
If, giving approximately equal weight to M -l and M-2, it appears
that growth rates over the 2-month period will deviate significantly
from the midpoints of the indicated ranges, the operational objective
for the Federal funds rate shall be modified in an orderly fashion
within a range of 4 X to 5 per cent.
A
If it appears during the period before the next meeting that the
operating constraints specified above are proving to be significantly
389
390
Federal Reserve Bulletin □ April 1977
inconsistent, the Manager is promptly to notify the Chairman who
will then decide whether the situation calls for supplementary
instructions from the Committee.
Votes for this action: Messrs. Burns, Volcker,
Balles, Black, Coldwell, Gardner, Jackson, Kim
brel, Lilly, Partee, Wallich, and Winn. Votes
against this action: None.
2. Statement of Policy Regarding
the Government in the Sunshine Act
From time to time at recent meetings the Committee had discussed
the applicability of the Government in the Sunshine Act to its
meetings. At this meeting the Committee concurred in an opinion
of counsel that the act would not apply because the Committee
did not come within the definition of “ agency” contained in the
act. The Committee further agreed that its present procedures and
disclosure policy were already conducted in accordance with the
intent and spirit of the act and that its current practices in that
regard would be continued.
After reaching these judgments, the Committee approved the
following statement of policy:
On September 13, 1976, there was enacted into law the Govern
ment in the Sunshine Act, Pub. L. No. 94-409, 90 Stat. 1241
( “ Sunshine A ct” ), established for the purpose of providing the
public with the “ fullest practicable information regarding the deci
sionmaking processes of the Federal Government . . . while pro
tecting the rights of individuals and the ability of the Government
to carry out its responsibilities.” 2 The Sunshine Act applies only
to those Federal agencies that are defined in Section 552(e) of Title
5 of the United States Code and “ headed by a collegial body
composed of two or more individual members, a majority of whom
are appointed to such position by the President with the advice and
consent of the Senate, and any subdivision thereof authorized to
act on behalf of the agency.” 3
The Federal Open Market Committee ( “ FOM C” ) is a separate
2Government in the Sunshine Act, Public Law 94-409, §2, 90 Stat. 1241 (1976).
3 Ibid., §3(a), 1241.
Record of Policy Actions of FOMC
and independent statutory body within the Federal Reserve System.
In no respect is it an agent or “ subdivision” of the Board. It was
originally established by the Banking Act of 1933 and restructured
in its present form by the Banking Act of 1935 and subsequent
legislation in 1942 (generally see 12 U .S.C. §263(a)). The FO M C’s
membership is composed of the seven members of the Board of
Governors of the Federal Reserve System ( “ Board of Governors” )
and five representatives of the Federal Reserve Banks who are
selected annually in accordance with the procedures set forth in
Section 12A of the Federal Reserve Act, 12 U .S.C . §263(a).
Members of the Board of Governors serve in an ex officio capacity
on the FOMC by reason of their appointment as Members of the
Board of Governors, not as a result of an appointment “ to such
position” (the FOMC) by the President. Representatives of the
Reserve Banks serve on the FOMC not as a result of an appointment
“ to such position” by the President, but rather by virtue of their
positions with the Reserve Banks and their selection pursuant to
Section 12A of the Federal Reserve Act. It is clear therefore that
the FOMC does not fall within the scope of an “ agency” or
“ subdivision” as defined in the Sunshine Act and consequently is
not subject to the provisions of that Act.
As explained below, the Act would not require the FOMC to
hold its meetings in open session even if the FOMC were covered
by the Act. However, despite the conclusion reached that the
Sunshine Act does not apply to the FOMC, the FOMC has deter
mined that its procedures and timing of public disclosure already
are conducted in accordance with the spirit of the Sunshine Act,
as that Act would apply to deliberations of the nature engaged in
by the FOMC.
In the foregoing regard, the FOMC has noted that while the Act
calls generally for open meetings of multi-member Federal agencies,
10 specific exemptions from the open meeting requirement are
provided to assure the ability of the Government to carry out its
responsibilities. Among the exemptions provided is that which
authorizes any agency operating under the Act to conduct closed
meetings where the subject of a meeting involves information “ the
premature disclosure of which would— in the case of an agency
which regulates currencies, securities, commodities, or financial
institutions, be likely to lead to significant financial speculation in
currencies, securities, or com m odities.” 4
4
Ibid., 1242.
391
392
Federal Reserve Bulletin □ April 1977
As to meetings closed under such exemption, the Act requires
the maintenance of either a transcript, electronic recording or min
utes and sets forth specified, detailed requirements as to the contents
and timing of disclosure of certain portions or all of such minutes.
The Act permits the withholding from the public of the minutes
where disclosure would be likely to produce adverse consequences
of the nature described in the relevant exemptions.
The FOMC has reviewed the agenda of its monthly meetings
for the past three years and has determined that all such meetings
could have been closed pursuant to the exemption dealing with
financial speculation or other exemptions set forth in the Sunshine
Act. The FOMC has further determined that virtually all of its
substantive deliberations could have been preserved pursuant to the
A ct’s minutes requirements and that such minutes could similarly
have been protected against premature disclosure under the provi
sions of the Act.
The FO M C’s deliberations are currently reported by means of
a document entitled “ Record of Policy Actions” which is released
to the public approximately one month after the meeting to which
it relates. The Record of Policy Actions complies with the A ct’s
minutes requirements in that it contains a full and accurate report
of all matters of policy discussed and views presented, clearly sets
forth all policy actions taken by the FOMC and the reasons therefor,
and includes the votes by individual members on each policy action.
The timing of release of the Record of Policy Actions is fully
consistent with the A ct’s provisions assuring against premature
release of any item of discussion in an agency’s minutes that contains
information of a sensitive financial nature. In fact, by releasing the
comprehensive Record of Policy Actions to the public approximately
a month after each meeting, the FOMC exceeds the publication
requirements that would be mandated by the letter of the Sunshine
Act.
Recognizing the congressional purpose underlying enactment of
the Sunshine Act, the FOMC has determined to continue its current
practice and timing of public disclosures in the conviction that its
operations thus conducted are consistent with the intent and spirit
of the Sunshine Act.
Votes for this action: Messrs. Burns, Volcker,
Balles, Black, Coldwell, Gardner, Jackson, Kim
brel, Lilly, Partee, Wallich, and Winn. Votes
against this action: None.
Record of Policy Actions of FOMC
3. Amendment to
Rules Regarding Availability of Information
At this meeting, the Committee approved an amendment, effective
March 12, 1977, to Section 271.6(a) of its rules regarding avail
ability of information to implement an amendment to the Freedom
of Information Act effected by the Government in the Sunshine
Act. After incorporating this amendment the Section read as fol
lows:
§271.6 Information not Disclosed
Except as may be authorized by the Committee, information of
the Committee that is not available to the public through other
sources will not be published or made available for inspection,
examination, or copying by any person if such information
(a) is specifically exempted from disclosure by statute (other than section
552b of Title 5 United States Code), provided that such statute (A) requires
that the matters be withheld from the public in such a manner as to leave
no discretion on the issue, or (B) establishes particular criteria for with
holding or refers to particular types of matters to be withheld; or is
specifically authorized under criteria established by an executive order to
be kept secret in the interest of national defense or foreign policy and
is in fact properly classified pursuant to such executive order.
Votes for this action: Messrs. Burns, Volcker,
Balles, Black, Coldwell, Gardner, Jackson, Kim
brel, Lilly, Partee, Wallich, and Winn. Votes
against this action: None.
4. Revision of Guidelines for
Operations in Federal Agency Issues
At this meeting the Committee amended number 4 of the guidelines
for the conduct of System operations in Federal agency issues to
take account of the operations of the Federal Financing Bank. The
change, which was effective immediately, limits Federal Reserve
purchases of Federal agency securities to issues of those agencies
that are not eligible to borrow funds from the Federal Financing
Bank, which began operations in m id-1974. Securities of the Bank
itself are eligible for purchase by the System, although none is
outstanding at present. Securities of Government-sponsored agen
cies— such as the Federal home loan banks, the Federal National
393
394
Federal Reserve Bulletin □ April 1977
Mortgage Association, Federal land banks, Federal intermediate
credit banks, and the banks for cooperatives— will continue to be
eligible for System purchase under the new rules.
As amended, guideline number 4 read as follows:
Purchases will be limited to fully taxable issues, not eligible for
purchase by the Federal Financing Bank, for which there is an active
secondary market. Purchases will also be limited to issues outstand
ing in amounts of $300 million or over in cases where the obligations
have a maturity of five years or less at the time of issuance, and
to issues outstanding in amounts of $200 million or over in cases
where the securities have a maturity of more than five years at the
time of issuance.
Votes for this action: Messrs. Burns, Volcker,
Balles, Black, Coldwell, Gardner, Jackson, Kim
brel, Lilly, Partee, Wallich, and Winn. Votes
against this action: None.
Records of policy actions taken by the Federal Open Market Committee at each
meeting, in the form in which they will appear in the Board’s Annual Report,
are released about a month after the meeting and are subsequently published in
the B u l l e t i n .
395
Law Department
S ta tu te s , r e g u la tio n s , in te rp re ta tio n s , a n d d e c is io n s
INTEREST ON DEPOSITS
a time deposit contract that results in an increase
in the rate of interest paid or in a change on the
A mendments to R egulation Q
maturity of the deposit constitutes a payment of
The Board of Governors of the Federal Reserve
the time deposit before maturity. P rovided further,
System has approved two amendments to section
That Investment Certificates issued in negotiable
217.4(d) of Regulation Q (12 C .F.R . 217). The
form by a member bank pursuant to subpart 3 of
first amendment modifies the structure of the cur
§ 217.7(b) may not be paid before maturity. This
rent paragraph of Regulation Q that states the
provision does not prevent a member bank from
arranging the sale or purchase of such a certificate
Board’s early withdrawal penalty rule and excep
on behalf of the holder or prospective purchaser
tions to that rule by providing a listing of those
of a certificate issued under that subpart. A mem
exceptions. This modification, which is intended
ber bank may not, however, repurchase such cer
to improve the clarity of the B oard’s penalty rule,
tificates for its own account. P rovided further,
is a structural change only and is not intended to
That a time deposit may be paid before maturity
alter the substance of the Board’s penalty rule.
without a reduction or forfeiture of interest as
The second amendment provides an additional
prescribed by this paragraph in the following cir
exception to the Board’s early withdrawal penalty
cumstances:
rule.
(1) where a member bank pays all or a portion
Effective March 24, 1977, Regulation Q is
of a time deposit upon the death of any person
amended as follows:
whose name appears on the time deposit passbook
Section 217.4— P ayment of
or certificate;
Time D eposits B efore M aturity
(2) where a member bank pays all or a portion
of a time deposit representing funds contributed
to an Individual Retirement Account or a Keogh
(d)
PENALTY FOR EARLY WITHDRAWALS. (H.R. 10) plan established pursuant to 26 U .S.C .
Where a time deposit, or any portion thereof, is
(I.R.C. 1954) §§ 408, 401 when the individual
paid before maturity, a member bank may pay
for whose benefit the account is maintained attains
interest on the amount withdrawn at a rate not to
age 59V2 or is disabled (as defined in 26 U .S.C .
exceed that currently prescribed in § 217.7 for a
(I.R.C. 1954) § 72(m)(7)) or thereafter; or
savings deposit: P rovided , That the depositor shall
(3) where a member bank pays that portion of
forfeit three months of interest payable at such
a time deposit on which Federal deposit insurance
rate. If, however, the amount withdrawn has re
has been lost as the result of the merger of two
mained on deposit for three months or less, all
or more Federally insured banks in which the
interested shall be forfeited. Where necessary to
depositor previously maintained separate time de
comply with the requirements of this paragraph,
posits, for a period of one year from the date of
any interest already paid to or for the account of
the merger.
the depositor shall be deducted from the amount
restrictions of § 2 1 7 .4 (d ) in effect prior to July 5, 1973, w hich
requested to be w ithdraw n.11 Any amendment of
11
The provisions o f this paragraph apply to all time deposit
contracts entered into after July 5 , 1973, and to all existing
tim e deposit contracts that are extended or renewed (whether
by automatic renew al or otherw ise) after such date, and to
all time deposit contracts that are am e n d ed a fter such date so
as to increase the rate of interest paid. A ll contracts not sub
ject to the provisions of this paragraph shall be subject to the
permitted paym ent of a tim e deposit before maturity only in
an em ergency where necessary to prevent great hardship to
the depositor, and w hich required the forfeiture of accrued and
unpaid interest for a period of not less than 3 m onths on the
amount withdrawn if an amount equal to the amount w ith
drawn had been on deposit for 3 m onths or longer, and the
forfeiture of all accrued and unpaid interest on the amount
withdrawn if an amount equal to the amount withdrawn had
been on deposit less than 3 m onths.
396
Federal Reserve Bulletin □ April 1977
Loan -to-Lender Programs
The Board has reviewed the question of whether
funds obtained by member banks on their notes
issued to State and municipal housing authorities
under “ Loan-to-Lender” agreements should be
regarded as “ deposits” under the Board’s Regu
lation D (§ 204.1(f)) and Regulation Q (§
217.1(f)).
“ Loan-to-Lender” programs usually involve
the issuance by a State or municipal housing
authority of tax-exempt bonds and the subsequent
lending of the bond revenue funds to financial
institutions under the requirement that these funds
be used to make specified types of real estate loans
(generally mortgage loans to low or moderate
income home buyers). The funds advanced to
financial institutions pursuant to a “ Loan-toLender” program are evidenced by a loan agree
ment and a promissory note issued by the financial
institution to the housing authority. These pro
grams enable State and municipal authorities to
channel funds obtained into housing programs
through financial institutions possessing special
ized expertise in real estate lending and con
struction financing. At the present time such pro
grams are in operation in 11 States. Thirteen other
State legislatures have approved legislation
authorizing such programs. On the basis of avail
able information, “ Loan-to-Lender” programs
currently represent approximately $800 million in
funds lent for these purposes.
By letter of August 6, 1975, the Board requested
that the Federal Reserve Banks inform member
banks in their districts that funds obtained by
member banks on their notes issued to State or
municipal housing authorities under “ Loan-toLender” programs are funds to be used in the
banking business and, therefore, should be treated
as deposits subject to Regulation D reserve re
quirements and Regulation Q interest rate limita
tions .
On September 29, 1975, the Board announced
that, in response to requests for such action, it
would review the deposit status of funds received
by member banks on their notes issued to State
and municipal housing authorities under “ Loanto-Lender” type programs. In conjunction with
that review, the Board suspended the effectiveness
of its determination of August 6, 1975, and waived
the maintenance of required reserves on “ Loanto-Lender ’ ’ obligations.
The Board has conducted an extensive review
of all known “ Loan-to-Lender” type programs.
Based upon this review, the Board has determined
to continue, for an indefinite period, the suspen
sion of its August 6, 1975, determination regard
ing the deposit status of “ Loan-to-Lender” funds.
(This suspension was first announced on Sep
tember 29, 1975). This action is based upon the
Board’s belief that a determination on the deposit
status of funds obtained by member banks under
“ Loan-to-Lender” programs should be deferred
pending the completion of broader based studies
of possible statutory and regulatory reforms per
taining to interest on deposits and reserves held
by member banks. The continued suspension will
also provide the Board with further opportunity
to assess the potential impact of application of
reserve requirements and interest rate limitations
on funds obtained by member banks through par
ticipation in “ Loan-to-Lender” programs.
The Board recognizes that its decision to defer
for an indefinite period a final determination re
garding the deposit status of funds obtained by
member banks under “ Loan-to-Lender” agree
ments may result in some uncertainty among
member banks presently participating in such pro
grams or contemplating participation at a future
date. Accordingly, in order to avoid any uncer
tainty with respect to member bank participation
in “ Loan-to-Lender” programs during the time
this suspension is in effect, the Board has deter
mined that any funds obtained by member banks
as the result of “ Loan-to-Lender” agreements
entered into during this suspension period will
continue to be exempt from interest rate limitations
and reserve requirem ents, regardless of any future
decision of the Board to reinstate its determination
of August 6, 1975.
RULES REGARDING
PUBLIC OBSERVATION OF MEETINGS
The Board of Governors has added a new Part
261b to provide for the procedures under which
the open meeting requirements of subsections (b)
through (f) of the Government in the Sunshine Act
will be met.
Effective March 12, 1977 Part 261b is added
to read as follows:
Section 261b. 1— B asis
and
Scope
This Part is issued by the Board of Governors
of the Federal Reserve System (“ the Board” )
under section 552b of Title 5 of the United States
Code, the Government in the Sunshine Act (“ the
Law Department
Act” ), to carry out the policy of the Act that the
public is entitled to the fullest practicable infor
mation regarding the decision making processes
of the Board while at the same time preserving
the rights of individuals and the ability of the
Board to carry out its responsibilities. These regu
lations fulfill the requirement of subsection (g) of
the Act that each agency subject to the provisions
of the Act shall promulgate regulations to imple
ment the open meeting requirements of subsections
(b) through (f) of the Act.
S e c t io n 2 6 l b . 2 — D e f in it io n s
For purposes of this Part, the following defini
tions shall apply:
(a) The term “ agency” means the Board and
subdivisions thereof.
(b) The term “ subdivision” means any group
composed of two or more Board members that is
authorized to act on behalf of the Board.
(c) The term “ meeting” means the deliberations
of at least the number of individual agency mem
bers required to take action on behalf of the agency
where such deliberations determine or result in the
joint conduct or disposition of official Board busi
ness, but does not include (1) deliberations re
quired or permitted by subsection (d) or (e) of the
Act, or (2) the conduct or disposition of official
agency business by circulating written material to
individual members.
(d) The term “ number of individual agency
members required to take action on behalf of the
agency” means in the case of the Board, a major
ity of its members except that (1) Board determi
nation of the ratio of reserves against deposits
under section 19(b) of the Federal Reserve Act
requires the vote of four members, (2) Board
action with respect to advances, discounts and
rediscounts under sections 10(a), 11(b) and 13(3)
of the Federal Reserve Act requires the vote of
five members and (3) Board action with respect
to the percentage of individual member bank capi
tal and surplus which may be represented by loans
secured by stock and bond collateral under section
1 l(m) of the Federal Reserve Act requires the vote
of six members. In the case of subdivisions of
the Board, the term means the number of members
constituting a quorum of the designated subdivi
sion.
(e) The term “ member” means a member of
the Board appointed under Section 10 of the Fed
eral Reserve Act. In the case of certain Board
proceedings pursuant to 12 U .S.C . 1818(e), the
Comptroller of the Currency is entitled to sit as
397
a member of the Board and for these proceedings
he shall be deemed a “ member” for the purposes
of this Part. In the case of any subdivision of the
Board, the term “ member” means a member of
the Board designated to serve on that subdivision.
(f) The term “ public observation” means that
the public shall have the right to listen and observe
but not to record any of the meetings by means
of cameras or electronic or other recording devices
unless approval in advance is obtained from the
Public Affairs Office of the Board and shall not
have the right to participate in the meeting, unless
participation is provided for in the Board’s Rules
of Procedure.
(g) The term “ Federal agency” means an
“ agency” as defined in 5 U .S.C . 551(1).
S e c t io n 2 6 1 b .3 —
C o n d u c t o f A g e n c y B u s in e s s
Members shall not jointly conduct or dispose
of official agency business other than in accordance
with this Part.
S e c t io n 2 6 l b . 4—
M e e t in g s O p e n to P u b l ic O b s e r v a t io n
Except as provided in section 261b.5 of this
Part, every portion of every meeting of the agency
shall be open to public observation.
S e c t io n 2 6 l b . 5— E x e m p t io n s
(a) Except in a case where the agency finds that
the public interest requires otherwise, the agency
may close a meeting or a portion or portions of
a meeting under the procedures specified in section
26lb .7 or 2 6 lb .8 of this Part, and withhold infor
mation under the provisions of section 2 6 lb .6,
261b.7, 261b.8, or 261b. 11 of this Part, where
the agency properly determines that such meeting
or portion or portions of its meeting or the disclo
sure of such information is likely to:
(1) disclose matters that are (A) specifically
authorized under criteria established by an Execu
tive order to be kept secret in the interests of
national defense or foreign policy, and (B) in fact
properly classified pursuant to such Executive
order;
(2) relate solely to internal personnel rules and
practices;
(3) disclose matters specifically exempted from
disclosure by statute (other than section 552 of
Title 5 of the United States Code), provided that
such statute (A) requires that the matters be with
held from the public in such a manner as to leave
398
Federal Reserve Bulletin □ April 1977
no discretion on the issue, or (B) establishes par
ticular criteria for withholding or refers to particu
lar types of matters to be withheld;
(4) disclose trade secrets and commercial or
financial information obtained from a person and
privileged or confidential;
(5) involve accusing any person of a crime, or
formally censuring any person;
(6) disclose information of a personal nature
where disclosure would constitute a clearly un
warranted invasion of personal privacy;
(7) disclose investigatory records compiled for
law enforcement purposes, or information which
if written would be contained in such records, but
only to the extent that the production of such
records or information would (A) interfere with
enforcement proceedings, (B) deprive a person of
a right to a fair trial or an impartial adjudication,
(C) constitute an unwarranted invasion of personal
privacy, (D) disclose the identity of a confidential
source and, in the case of a record compiled by
a criminal law enforcement authority in the course
of a criminal investigation, or by a Federal agency
conducting a lawful national security intelligence
investigation, confidential information furnished
only by the confidential source, (E) disclose in
vestigative techniques and procedures, or (F) en
danger the life or physical safety of law enforce
ment personnel;
(8) disclose information contained in or related
to examination, operating, or condition reports
prepared by, on behalf of, or for the use of the
Board or other Federal agency responsible for the
regulation or supervision of financial institutions;
(9) disclose information the premature disclo
sure of which would—
(A) be likely to (i) lead to significant specu
lation in currencies, securities, or commodities,
or (ii) significantly endanger the stability of any
financial institution; or
(B) be likely to significantly frustrate imple
mentation of a proposed action, except that subparagraph (B) shall not apply in any instance
where the Board has already disclosed to the public
the content or nature of its proposed action, or
where the Board is required by law to make such
disclosure on its own initiative prior to taking final
action on such proposal; or
(10) specifically concern the issuance of a sub
poena, participation in a civil action or proceeding,
an action in a foreign court or international tribu
nal, or an arbitration, or the initiation, conduct,
or disposition of a particular case of formal agency
adjudication pursuant to the procedures in section
554 of Title 5 of the United States Code or
otherwise involving a determination on the record
after opportunity for a hearing.
S e c tio n
26lb .6—
P u b lic
A n n o u n c e m e n ts o f M e e tin g s
(a) Except as otherwise provided by the Act,
public announcements of meetings open to public
observation and meetings to be partially or com
pletely closed to public observation pursuant to
section 2 6 lb .8 of this Part will be made at least
one week in advance of the meeting. Except to
the extent such information is determined to be
exempt from disclosure under section 2 6 lb .5 of
this Part, each such public announcement will state
the time, place and subject matter of the meeting,
whether it is to be open or closed to the public,
and the name and phone number of the official
designated to respond to requests for information
about the meeting.
(b) If a majority of the members of the agency
determines by a recorded vote that agency business
requires that a meeting covered by subsection (a)
of this section be called at a date earlier than that
specified in subsection (a), the agency will make
a public announcement of the information speci
fied in subparagraph (a) of the earliest practicable
time.
(c) Changes in the subject matter of a publicly
announced meeting, or in the determination to
open or close a publicly announced meeting or
any portion of a publicly announced meeting to
public observation, or in the time or place of a
publicly announced meeting made in accordance
with the procedures specified in section 26lb .9 of
this Part will be publicly announced at the earliest
practicable time.
(d) Public announcements required by this sec
tion will be posted at the Board’s Public Affairs
Office and Freedom of Information Office and may
be made available by other means or at other
locations as may be desirable.
(e) Immediately following each public an
nouncement required by this section, notice of the
time, place and subject matter of a meeting,
whether the meeting is open or closed, any change
in one of the preceding announcements, and the
name and telephone number of the official desig
nated by the Board to respond to requests about
the meeting, shall also be submitted for publication
in the Federal Register.
Law Department
399
corded vote of a majority of the members of the
agency when it is determined that the meeting or
the portion of the meeting or the withholding of
information qualifies for exemption under section
(a) Since the Board qualifies for the use of ex
26lb .5 of this Part. Votes by proxy are not al
pedited procedures under subsection (d)(4) of the
lowed.
Act, meetings or portions thereof exempt under
(b) Except as provided in subsection (c) of this
paragraph (4), (8), (9)(A) or (10) of section
section, a separate vote of the members of the
26lb .5 of this Part, will be closed to public obser
agency will be taken with respect to the closing
vation under the expedited procedures of this sec
or the withholding of information as to each meet
tion. Following are examples of types of items
ing or portion thereof which is proposed to be
that, absent compelling contrary circumstances,
closed to public observation or with respect to
will qualify for these exemptions: matters relating
which information is proposed to be withheld pur
to a specific bank or bank holding company, such
suant to this section.
as bank branches or mergers, bank holding com
(c) A single vote may be taken with respect to
pany formations, or acquisition of an additional
a series of meetings, a portion or portions of
bank or acquisition or de novo undertaking of a
which are proposed to be closed to public obser
permissible nonbanking activity; bank regulatory
vation or with respect to any information concern
matters, such as applications for membership, is
ing such series of meetings proposed to be with
suance of capital notes and investment in bank
held, so long as each meeting or portion thereof
premises; foreign banking matters; bank supervi
in such series involves the same particular matters
sory and enforcement matters, such as cease-andand is scheduled to be held no more than thirty
desist and officer removal proceedings; monetary
days after the initial meeting in such series.
policy matters, such as discount rates, use of the
(d) Whenever any person’s interests may be di
discount window, changes in the limitations on
rectly affected by a portion of a meeting for any
payment of interest on time and savings accounts,
of the reasons referred to in exemption (5), (6)
and changes in reserve requirements or margin
or (7) of section 2 6 lb .5 of this Part, such person
regulations.
may request in writing to the Secretary of the
(b) At the beginning of each meeting, a portion
Board such portion of the meeting be closed to
or portions of which is closed to public observa
public observation. The Secretary, or in his or her
tion under expedited procedures pursuant to this
absence, the Acting Secretary of the Board, will
section, a recorded vote of the members present
transmit the request to the members and upon the
will be taken to determine whether a majority of
request of any one of them a recorded vote will
the members of the agency votes to close such
be taken whether to close such meeting to public
meeting or portions of such meeting to public ob
observation.
servation.
(e) Within one day of any vote taken pursuant
(c) A copy of the vote, reflecting the vote of
to subparagraphs (a) through (d) of this section,
each member, and except to the extent such infor
the agency will make publicly available at the
mation is determined to be exempt from disclo
Board’s Public Affairs Office and Freedom of In
sure under section 2 6 lb .5 of this Part, a public
formation Office a written copy of such vote re
announcement of the time, place and subject mat
flecting the vote of each member on the question.
ter of the meeting or each closed portion thereof,
If a meeting or a portion of a meeting is to be
will be made available at the earliest practicable
closed to public observation, the agency, within
time at the Board’s Public Affairs Office and Free
one day of the vote taken pursuant to subpara
dom of Information Office.
graphs (a) through (d) of this section, will make
publicly available at the Board’s Public Affairs
Office and Freedom of Information Office a full,
S e c t io n 2 6 l b . 8— M e e t in g s
written explanation of its action closing the meet
C l o s e d to P u b l ic O b s e r v a t io n
ing or portion of the meeting together with a list
U n d er R eg ular Procedures
of all persons expected to attend the meeting and
(a)
A meeting or a portion of a meeting will their affiliation, except to the extent such infor
be closed to public observation under regular pro
mation is determined by the agency to be exempt
cedures, or information as to such meeting or por
from disclosure under subsection (c) of the Act
tion of a meeting will be withheld, only by re
and section 261b.5 of this Part.
S e c t io n 2 6 1 b .7 — M e e t in g s
C l o s e d to P u b l ic O b s e r v a t io n
U n d e r E x p e d it e d P r o c e d u r e s
400
Federal Reserve Bulletin □ April 1977
S e c t io n 2 6 1 b . 9 — C h a n g e s W it h
R esp e c t to P u b l ic l y A n n o u n c e d M e e t in g
The subject matter of a meeting or the determi
nation to open or close a meeting or a portion
of a meeting to public observation may be
changed following public announcement under
section 2 6 lb .6 only if a majority of the members
of the agency determines by a recorded vote that
agency business so requires and that no earlier an
nouncement of the change was possible. Public
announcement of such change and the vote of
each member upon such change will be made pur
suant to section 2 6 lb.6(c). Changes in time, in
cluding postponement and cancellations of a pub
licly announced meeting or portion of a meeting
or changes in the place of a publicly announced
meeting will be publicly announced pursuant to
section 2 6 lb.6(c) by the Secretary of the Board
or, in the Secretary’s absence, the Acting Secre
tary of the Board.
S e c t io n 2 6 1 b . 10—
C e r t if ic a t io n o f G e n e r a l C o u n s e l
Before every meeting or portion of a meeting
closed to public observation under section 2 6 lb .7
or 2 6 lb .8 of this Part, the General Counsel, or
in the General Counsel’s absence, the Acting
General Counsel, shall publicly certify whether or
not in his or her opinion the meeting may be
closed to public observation and shall state each
relevant exemptive provision. A copy of such cer
tification, together with a statement from the pre
siding officer of the meeting setting forth the time
and place of the meeting and the persons present,
will be retained for the time prescribed in section
261b. 11(d).
S e c t io n 2 6 1 b . 1 1 —
T r a n s c r ip t s , R e c o r d in g s , a n d M in u t e s
(a) The agency will maintain a complete tran
script or electronic recording or transcriptions
thereof adequate to record fully the proceedings
of each meeting or portion of a meeting closed
to public observation pursuant to exemption (1),
(2), (3), (4), (5), (6), (7) or (9)(B) of section
261b.5 of this Part. Transcriptions of recordings
will disclose the identity of each speaker.
(b) The agency will maintain either such a tran
script recording or transcription thereof, or a set
of minutes that will fully and clearly describe all
matters discussed and provide a full and accurate
summary of any actions taken and the reasons
therefor, including a description of each of the
views expressed on any item and the record of
any roll call vote (reflecting the vote of each
member on the question), for meetings or portions
of meetings closed to public observation pursuant
to exemption (8), (9)(A) or (10) of section 2 6 lb .5
of this Part. The minutes will identify all docu
ments considered in connection with any action
taken.
(c) Transcripts, recordings or transcriptions
thereof, or minutes will promptly be made avail
able to the public in the Freedom of Information
Office except for such item or items of such dis
cussion or testimony as may be determined to
contain information that may be withheld under
subsection (c) of the Act and section 2 6 lb .5 of
this Part.
(d) A complete verbatim copy of the transcript,
a complete copy of the minutes, or a complete
electronic recording or verbatim copy of a tran
scription thereof of each meeting or portion of a
meeting closed to public observation will be
maintained for a period of at least two years or
one year after the conclusion of any agency pro
ceeding with respect to which the meeting or por
tion thereof was held, whichever occurs later.
S e c t io n 2 6 1 b . 1 2 — P r o c e d u r e s
I n s p e c t io n a n d O b t a in in g
for
C o pies o f T r a n s c r ip t io n s a n d M i n u t e s
(a) Any person may inspect or copy a tran
script, a recording or transcription of a recording,
or minutes described in section 261b. 11(c) of this
Part.
(b) Requests for copies of transcripts, record
ings or transcriptions of recordings, or minutes
described in section 261b. 11(c) of this Part shall
specify the meeting or the portion of meeting de
sired and shall be submitted in writing to the Sec
retary of the Board, Board of Governors of the
Federal Reserve System, Washington, D.C.
20551. Copies of documents identified in minutes
may be made available to the public upon request
under the provision of 12 C.F.R. 261 (Rules Re
garding Availability of Information).
S e c t io n 2 6 1 b . 1 3 — F e e s
(a) Copies of transcripts, recordings or tran
scriptions of recordings, or minutes requested
pursuant to section 261b. 12(b) of this Part will
be provided at a cost of 100 per standard page
Law Department
for photocopying or at a cost not to exceed the
actual cost of printing, typing, or otherwise
preparing such copies.
401
(b) Documents may be furnished without
charge where total charges are less than $2.
*
*
*
*
*
BANK HOLDING COMPANY AND
BANK MERGER ORDERS ISSUED BY THE BOARD OF GOVERNORS
Audubon Investment Company, Audubon,
Iowa, has applied for the Board’s approval under
§ 3(a)(1) of the Bank Holding Company Act (12
U.S.C. § 1842(a)(1)) of formation of a bank
holding company through acquisition of 97.83 per
cent (or more) of the voting shares of Audubon
State Bank (formerly First State Bank), Audubon,
Iowa (“ Bank” ).
Notice of the application, affording opportunity
for interested persons to submit comments and
views, has been given in accordance with § 3(b)
of the Act. The time for filing comments and views
has expired, and the Board has considered the
application and all comments received in light of
the factors set forth in § 3(c) of the Act (12 U.S.C.
§ 1842(c)).
Applicant, a nonoperating corporation with no
subsidiaries, was organized for the purpose of
becoming a bank holding company through the
acquisition of Bank. Bank, with deposits of $21.4
million,1 is the largest of three banks in the rele
vant market2 and controls approximately 53 per
cent of the total deposits in commercial banks in
the market. Upon acquisition of Bank, Applicant
would control the 141st largest banking organi
zation in Iowa holding . 18 per cent of the total
deposits in commercial banks in the State. The
proposed transaction is merely a restructuring of
present ownership into corporate form. Applicant
presently has no subsidiaries and does not engage
in any activities. Principals of Applicant are asso
ciated with three other one-bank holding compa
nies and two other banks in Iowa. None of the
five banks involved is located in the relevant
market and the amount of actual competition be
tween any of them and Bank appears slight. It
does not appear probable that such competition
would increase in the foreseeable future. Consum
mation of the proposal would neither eliminate
significant existing or potential competition nor
increase the concentration of banking resources in
any relevant market. Accordingly, competitive
considerations are consistent with approval of the
applications.
The Board applies multi-bank holding company
standards in assessing the managerial and financial
resources of an applicant seeking to become a
one-bank holding company where the principals
of the applicant are engaged in establishing a series
or chain of one-bank holding companies.3 The
three other one-bank holding companies and their
respective subsidiary banks with which Appli
cant’s principals are associated appear to be in
satisfactory condition, which suggests that Appli
cant’s principals would conduct the operations of
the proposed holding company and of Bank in a
satisfactory manner. In addition, Applicant has
committed to inject new capital into Bank if such
action becomes necessary to maintain a satis
factory ratio of capital to assets. Although Appli
cant will incur some debt in connection with this
proposal, it appears that income from Bank will
provide sufficient revenue to service the debt ade
quately without adversely affecting the financial
resources or condition of either Applicant or Bank.
Accordingly, considerations relating to the finan
cial and managerial resources and future prospects
of Applicant and Bank are consistent with and lend
some weight in favor of approval.
Although consummation of the transaction
would have no immediate effect on area banking
needs, considerations relating to the convenience
and needs of the community to be served are
consistent with approval of the application. It is
the Board’s judgment that consummation of the
! A11 banking data are as of December 31, 1975.
2The relevant market is approxim ated by the northern ninetenths of Audubon County.
3See the B oard’s Order of June 14, 1976 denying the
application of Nebraska Banco, Inc., Ord, Nebraska (62 Fed.
Res. B u l l e t i n 638 (1976)).
O rd er s U n d e r S e c t io n 3
of
B a n k H o l d in g C o m p a n y A ct
Audubon Investment Company,
Audubon, Iowa
O rd e r A p p ro v in g
F orm ation o f B ank H o ld in g C om pan y
402
Federal Reserve Bulletin □ April 1977
proposed transaction would be consistent with the
public interest and that the application should be
approved.
On the basis of the record, the application is
approved for the reasons summarized above. The
transaction shall not be made (a) before the thir
tieth calendar day following the effective date of
this Order or (b) later than three months after the
effective date of this Order, unless such period
is extended for good cause by the Board, or by
the Federal Reserve Bank of Chicago pursuant to
delegated authority.
By order of the Board of Governors, effective
March 23, 1977.
V o tin g for this action: Chairm an Burns and G o v er
nors G ardner, C o ld w e ll, Jack son , and Partee. A b sent
and not voting: G overn ors W allich and L illy.
(Signed)
[s e a l ]
G
r if f it h
L.
G
arw ood,
D e p u ty S e c re ta ry o f the B o a rd .
Bancorporation of Montana,
Great Falls, Montana
O rd e r D en yin g A c q u isitio n o f B ank
Bancorporation of Montana, Great Falls, Mon
tana, a bank holding company within the meaning
of the Bank Holding Company Act, has applied
for the Board’s approval under § 3(a)(3) of the
Act (12 U.S.C. § 1842(a)(3)) to acquire 100 per
cent of the voting shares (less directors’ qualifying
shares) of Bank of Montana, Helena, Montana
( “ Bank” ).
Notice of the application, affording opportunity
for interested persons to submit comments and
views, has been given in accordance with § 3(b)
of the Act. The time for filing comments and views
has expired, and the Board has considered the
application and all comments received in light of
the factors set forth in § 3(c) of the Act (12 U.S.C.
§ 1842(c)).
Applicant, the third largest banking organization
in Montana, controls thirteen banks with aggregate
deposits of $171 million, representing approxi
mately 5.9 per cent of the total commercial bank
deposits in Montana.1 Acquisition of Bank would
increase Applicant’s share of State deposits by
only 0.4 per cent and its ranking Statewide would
remain unchanged.
Bank ($11.1 million in deposits) is the fourth
*A11 banking data are as of December 31, 1975, but reflect
structural changes through January 12, 1976.
largest of six banks in the Helena banking market
and controls 7.6 per cent of the total deposits in
commercial banks in the market.2 Both of the two
largest banks in the relevant market are subsidi
aries of bank holding companies and hold, respec
tively, 38.5 and 37.6 per cent of the total deposits
in commercial banks in the market. There are no
subsidiary banks of Applicant presently competing
in the relevant market, and Applicant’s subsidiary
bank closest to Bank is located approximately 63
miles from the Helena banking market. Thus,
consummation of this proposal would not result
in the elimination of a significant amount of exist
ing competition and, in view of the distance in
volved, would not appear to foreclose the devel
opment of a significant amount of competition in
the future. Accordingly, competitive consid
erations are consistent with approval of the appli
cation.
The Board has indicated on previous occasions
that it believes a bank holding company should
constitute a source of both financial and managerial
strength to its subsidiary bank(s). Accordingly, in
acting upon any application under the Act, the
Board will closely examine the financial condition,
managerial resources, and future prospects of an
applicant and its subsidiary bank(s) with these
factors in mind. Based upon an evaluation of such
factors with respect to this application, the Board
has determined that denial of this application is
warranted.
With respect to the financial and managerial
resources and future prospects associated with this
application, it appears that, while Applicant’s
managerial resources are regarded as satisfactory
and consistent with approval of the application,
Applicant’s overall financial condition will not
permit it to serve as a source of financial strength
to Bank. Rather, based upon an examination of
all the facts of record, the Board concludes that
consummation of this proposal with the attendant
assumption of acquisition debt would increase
Applicant’s debt to equity ratio from a level al
ready regarded as high to a point considerably
higher than that which the Board regards as ac
ceptable for a multi-bank holding company the size
of Applicant. Consequently, it appears that Appli
cant’s proposal, if consummated, would result in
2 The Helena banking market is the relevant banking market
and is approximated by the southern half of Lewis and Clark
county, the northern half of Jefferson County, and the northern
half of Broadwater County.
Law Department
substantial added financial burden to Applicant and
that for several years following consummation, it
may become necessary for Applicant to draw ex
cessive dividends from its subsidiary banks in
order to service the debt associated with the ac
quisition of Bank. Based on the above and other
facts of record, the Board concludes that the
banking factors weigh against approval of this
application and that Applicant’s funds could be
better utilized in support of its existing subsidi
aries.
While there is no evidence in the record to
indicate that the banking needs of the Helena
community are not being met, Applicant states that
following consummation of this proposal, it would
make available to Bank such services as loan
review, automated accounting services, invest
ment consulting, and personnel advice. While
considerations relating to the convenience and
needs of the community to be served are consistent
with approval of the application, they are not
sufficient, in the Board’s judgment, to outweigh
the aforementioned adverse banking factors re
flected in the record. Accordingly, it is the Board’s
judgment that approval of the application would
not be in the public interest and that the application
should be denied.
On the basis of the record, the application is
denied for the reasons summarized above.
By order of the Board of Governors, effective
March 2, 1977.
V o tin g for this action: G overnors W a llich , C o ld w e ll,
Jack son , and L illy . A b sen t and not voting: Chairm an
Burns and G overn ors G ardner and Partee.
(Signed)
[se a l]
G
L.
G
arw ood,
Du Sce r oth Bad
e ty ertay f e or.
p
r if f it h
The Jacobus Company, Inland Heritage
Corporation, and Inland Beloit Corporation,
Wauwatosa, Wisconsin
O rd e r A p p ro v in g F orm ation
o f a B an k H o ld in g C o m p a n y and
A c q u isitio n o f T w o B a n k H o ld in g C om p a n ies
The Jacobus Company, Wauwatosa, Wisconsin,
and its 45.4 per cent owned subsidiary, Inland
Heritage Corporation, Wauwatosa, Wisconsin
(hereinafter jointly referred to as “ Applicant” ),
both of which are bank holding companies within
the meaning of the Bank Holding Company Act,
have applied for the Board’s approval under § 3
of the Bank Holding Company Act (12 U.S.C.
§ 1842) to acquire all of the voting shares of
403
Financial Network Corporation ( “ FNC” ), a onebank holding company that owns 95.4 per cent
of the voting shares of The Beloit State Bank
(“ Beloit Bank” ), and to acquire all the voting
shares of Community Holding Corporation
(“ CHC” ), a one-bank holding company that owns
75.3 per cent of the voting shares of Community
Bank of Beloit (“ Community Bank” ), all of
which are located in Beloit, Wisconsin. The pro
posed acquisition of FNC and CHC would be
effected through the formation of a new holding
company to be named Inland Beloit Corporation,
Milwaukee, Wisconsin, a corporation that is to be
wholly owned by Inland Heritage Corporation and
for which a § 3(a)(1) application has been filed
with the Board. The proposed acquisitions would
involve the merger of FNC and CHC into Inland
Beloit Corporation, giving Inland Beloit Corpora
tion direct ownership of FNC and CHC. As the
parent companies of Inland Beloit Corporation,
The Jacobus Company and Inland Heritage Cor
poration would thereby gain indirect ownership of
FNC and CHC. FNC and CHC serve no purpose
other than to hold the stock of their respective
banks in corporate form, and Inland Beloit Cor
poration serves no purpose other than to facilitate
the acquisition of FNC and CHC. Accordingly,
the proposed acquisition of FNC and CHC by
Inland Beloit Corporation is treated herein as the
proposed acquisition of Beloit Bank and Commu
nity Bank by Applicant.
Notice of the applications, affording opportunity
for interested persons to submit comments and
views, has been given in accordance with § 3(b)
of the Act. The time for filing comments and views
has expired, and the Board has considered the
applications and all comments received in light of
the factors set forth in § 3(c) of the Act (12 U.S.C.
§ 1842(c)).
By Order dated February 7, 1977, the Board
denied Applicant’s previous applications to ac
quire Beloit Bank and Community Bank.1 Appli
cant’s current applications differ from its earlier
applications only with respect to their financial
aspects.
Applicant presently controls four banks with
aggregate deposits of $146.8 million.2 Applicant’s
acquisition of Beloit Bank and Community Bank
(aggregate deposits of $85.6 million) would rep
l 42 F ederal R eg iste r 9059.
2 All banking data are as of December 31, 1975, unless
otherwise indicated.
404
Federal Reserve Bulletin □ April 1977
resent Applicant’s initial entry into the Janes villeBeloit banking market, and would result in Appli
cant controlling approximately 21.9 per cent of
the deposits therein.3 For reasons cited in the
Board’s earlier Order, the Board concludes that
consummation of the proposed acquisitions would
not have any significant adverse effects on existing
or potential competition.
While competitive considerations were found to
be consistent with approval of the proposed acqui
sitions, the Board was concerned with the financial
aspects of Applicant’s earlier proposal and con
cluded that the adverse financial considerations
involved warranted denial of those applications.
In its February 7th Order, the Board noted that
the proposed acquisitions would result in a sub
stantial addition ($3.6 million) to Applicant’s al
ready high level of long-term debt, and stated that
it was concerned that Applicant would not be able
to meet the increased debt servicing requirements
and also maintain and strengthen the capital of its
existing subsidiary banks. The Board concluded
that Applicant should direct its financial resources
toward strengthening its existing subsidiaries be
fore seeking further expansion of its banking in
terests.
In the context of Applicant’s current proposal,
the Board regards the financial and managerial
resources and future prospects of Applicant, its
subsidiaries, and the banks to be acquired, as
generally satisfactory and consistent with approval
of the applications. Applicant’s current applica
tions contain a substantially stronger financial pro
posal than that previously considered, and the
Board is of the view that it would enable Applicant
to meet the increased debt servicing requirements
without placing additional funding requirements
on its existing subsidiary banks. Pursuant to its
revised financial plan, Applicant intends to
promptly reduce the acquisition debt from $4.8
million to $1.3 million, and to bolster the capital
positions of two of its existing subsidiary banks
and of Beloit Bank by amounts totaling $1.25
million. Applicant'would also maintain approxi
mately $0.7 million as a reserve for future capital
contributions to subsidiary banks which would be
made as the need arose.4 Accordingly, in view
3The Janesville-Beloit banking m arket is approxim ated by
Rock County.
4In order to effect these actions, Applicant, in addition to
using existing funds, has com m itted to issue and has received
subscriptions for $2.0 million in convertible debentures, and
has committed to sell $1.5 million in additional common stock
of Inland Heritage Corporation.
of the substantially revised financial aspects of the
proposal, the Board concludes that banking factors
are consistent with approval of the applications.
In its earlier Order, the Board noted that con
siderations relating to the convenience and needs
of the community to be served were not sufficient
to outweigh the adverse financial factors involved
with the proposal. In view of the improved finan
cial considerations reflected herein, it now appears
that the proposed affiliation of the two Beloit banks
with Applicant would enhance their operations and
thereby benefit the residents of the area served by
the two banks. Accordingly, convenience and
needs considerations are consistent with approval
of the applications. It is the Board’s judgment that
the proposed acquisitions would be in the public
interest and that the applications should be ap
proved.
On the basis of the record, the applications are
approved for the reasons summarized above. The
transactions shall not be made (a) before the thir
tieth calendar day following the effective date of
this Order, or (b) later than three months after the
effective date of this Order, unless such period
is extended for good cause by the Board or by
the Federal Reserve Bank of Chicago, pursuant
to delegated authority.
By order of the Board of Governors, effective
March 25, 1977.
V otin g for this action: Chairm an Burns and G o v er
nors G ardner, W a llich , C o ld w e ll, and Partee. A b sent
and not voting: G overn ors Jackson and L illy.
(Signed)
[s e a l ]
G
r if f it h
L.
G
arw ood
,
D e p u ty S ec re ta ry o f the B o a rd .
King Ranch, Inc.,
Kingsville, Texas
O rd e r A p p ro v in g
R eten tio n o f S h a res o f B an k
King Ranch, Inc., Kingsville, Texas, a bank
holding company within the meaning of the Bank
Holding Company Act ( “ Act” ), has applied for
the Board’s approval under § 3(a)(3) of the Act
(12 U.S.C. § 1842(a)(3)) to retain 1.5 per cent
of the outstanding voting shares of State Bank of
Kingsville, Texas (“ Bank” ).
Notice of the application, affording opportunity
for interested persons to submit comments and
views, has been given in accordance with § 3(b)
of the Act. The time for filing comments and views
has expired, and the Board has considered the
application and all comments received in light of
Law Department
the factors set forth in § 3(c) of the Act (12 U.S.C.
§ 1842(c)).
Applicant,1 a one-bank holding company by
virtue of its ownership of approximately 35.6 per
cent of the outstanding voting shares of Kleberg
First National Bank of Kingsville, Kingsville,
Texas (“ Kleberg Bank” ), seeks Board approval
to retain 337 shares of Bank (1.5 per cent) acquired
without the Board’s prior approval as a result of
Applicant’s p ro rata participation as of right in
a 1973 increase in the number of outstanding
shares of Bank’s common stock.2 Both prior to
the offering and after its purchase, Applicant
owned 16.02 per cent of the total outstanding
voting shares of Bank. Bank ($18.9 million in
deposits) is among the smaller banks in the State
of Texas, and controls less than one tenth of one
per cent of the total deposits in commercial banks
in the State.3
Kleberg Bank and Bank are both located in
Kingsville, Texas, and rank first and second, re
spectively, among the three banks located in the
Kleberg County banking market (the relevant
market). Applicant does not control Bank’s poli
cies or activities nor does Applicant have any
officers or directors in common with Bank. More
over, it appears that Applicant’s retention of 1.5
per cent of Bank’s outstanding voting shares will
not increase its ability to direct Bank’s operations
as Applicant’s proportionate stock interest will
remain unchanged. Retention of Bank’s shares
405
would involve neither an expansion of Applicant
nor an increase in the banking resources controlled
by it. It is the Board’s judgment that retention of
this stock would eliminate neither existing nor
potential competition nor increase the concentra
tion of banking resources in any relevant area.
Thus, competitive considerations are consistent
with approval of the application.
The financial and managerial resources and fu
ture prospects of Applicant are satisfactory, while
such considerations in the case of Bank are gener
ally satisfactory. Overall, banking factors are con
sistent with approval. There is no indication in
the record that the convenience and needs of the
community to be served are not currently being
met; however, such considerations are consistent
with approval. Therefore, it is the Board’s judg
ment that the retention of the shares of Bank would
be in the public interest and that the application
should be approved.
On the basis of the record, the application is
approved for the reasons summarized above.
By order of the Board of Governors, effective
March 21, 1977.
V otin g for this action: Chairm an Burns and G o v er
nors G ardner, W a llich , C o ld w e ll, and Partee. P resent
and A b stain in g: G overn or Jack son . A b sen t and not
voting: G overn or L illy .
(Signed)
[s e a l ]
G
r if f it h
L.
G
arw ood
,
D e p u ty S e c re ta ry o f the B o a rd .
Lincoln National Company,
Bala Cynwyd, Pennsylvania
a p p lic a n t is engaged in a variety of nonbanking activities
including a worldwide cattle ranching operation. Applicant also
holds various oil and mineral interests on its properties. These
nonbanking activities are exem pt from the prohibitions of
section 4 of the Act by virtue of section 4(c)(ii) of the Act
(12 U .S .C . § 1843(c)(ii)).
2117050 of the B oard’s Interpretations (12 C .F .R . §
225.103), which has been effective since 1957, states in part:
. . . [I]t is the B oard’s opinion that receipt of bank stock
by means of a stock dividend or stock split, assuming no
change in class of stock, does not require the B oard’s prior
approval under the Act, but that purchase of bank stock
by a bank holding com pany through the exercise of rights
does require the B oard’s prior approval, unless one of the
exceptions set forth in section 3(a) is applicable.
It appears from the facts of record that the acquisition of
the shares of Bank was based on a misunderstanding of the
applicable statutes and regulations relating to the acquisition
of the voting stock of banks by bank holding com panies. In
accord with the B oard’s position with respect to violations of
the Act, the Board has scrutinized the underlying facts sur
rounding the acquisition of the shares of Bank. Upon its
examination of all the facts of record, including A pplicant’s
undertaking to guard against violations in the future, the Board
is of the view that the facts surrounding the violation are not
such as would call for denial of the application.
3All banking data are as of December 31, 1975.
O rd e r A p p ro v in g
A cq u isitio n o f S h a res o f B an k
Lincoln National Company, Bala Cynwyd,
Pennsylvania, a bank holding company within the
meaning of the Bank Holding Company Act, has
applied for the Board’s approval under section
3(a)(3) of the Act (12 U .S.C . § 1842(a)(3)) to ac
quire, indirectly, 9.9 per cent of the voting shares
of The Bryn Mawr Trust Company, Bryn Mawr,
Pennsylvania ( “ Bank” ).
Notice of the application, affording opportunity
for interested persons to submit comments and
views, has been given in accordance with section
3(b) of the Act. The time for filing comments and
views has expired, and the Board has considered
the application and all comments received in light
of the factors set forth in section 3(c) of the Act
(12 U .S.C. § 1842 (c)).
Applicant, a one-bank holding company, owns
406
Federal Reserve Bulletin □ April 1977
all of the voting shares (less directors’ qualifying
shares) of Lincoln Bank, Bala Cynwyd, Pennsyl
vania,1 with deposits of $94.6 million, repre
senting 0.2 per cent of the total deposits in com
mercial banks in Pennsylvania.2 Applicant also has
one nonbanking subsidiary, Lincoln National
Leasing Co., Bala Cynwyd, Pennsylvania, which
is engaged in the leasing of personal property and
equipment on a full payout basis. Applicant’s
indirect acquisition of shares of Bank would have
no appreciable effect on the concentration of
banking resources in Pennsylvania.
Applicant’s subsidiary bank, Lincoln Bank, a
State-chartered insured bank that is not a member
of the Federal Reserve System, proposes to acquire
for cash 9.9 per cent of the voting shares of Bank
pursuant to Title 7 Pennsylvania Statutes, section
311 (d)(ii)(B), which authorizes Pennsylvania
banks to acquire and hold up to 10 per cent of
the shares of another Pennsylvania bank or trust
company.3 The instant shares of Bank were pre
viously held by Centennial Bank, Philadelphia,
Pennsylvania, a bank that was ordered closed by
the Commonwealth of Pennsylvania Department
of Banking on October 19, 1976. In subsequent
liquidation proceedings by the Federal Deposit
Insurance Corporation, Lincoln Bank purchased
certain assets and assumed certain deposit liabili
ties of Centennial Bank and, in addition, Lincoln
Bank obtained an option to purchase the subject
shares of Bank from the FDIC, as receiver.
Bank (deposits of $56.7 million) is the 25th
largest banking organization in the Philadelphia-Camden banking market4 and holds 0.4 per
cent of total market deposits.5 Lincoln Bank,
through its twelve offices, also competes in the
Philadelphia-Camden banking market and ranks as
the 18th largest banking organization therein, with
0.7 per cent of total deposits in the market. Al
though Lincoln Bank and Bank compete in the
1A pplicant became a bank holding company with respect
to Lincoln Bank on December 31, 1970 as a result of enactm ent
of the 1970 Amendments to the Bank Holding Company Act.
2Unless otherwise noted, all banking data are as of June
30, 1976.
3The Secretary of Banking of the Commonwealth of Penn
sylvania, by letter dated February 15, 1977, has recommended
approval of the subject application.
4The Philadelphia-Cam den banking market is approximated
by all of Philadelphia and Delaware Counties, portions of
Chester, M ontgom ery and Bucks Counties in Pennsylvania,
plus Camden, and portions of Burlington and Gloucester
Counties in New Jersey.
5All market data are as of June 30, 1975.
same banking market, it does not appear that
consummation of this proposal would have signif
icant adverse effects on competition. The com
bined market share of Lincoln Bank and Bank
would represent only 1.1 per cent of total deposits
in the Philadelphia-Camden market. Accordingly,
the Board concludes that consummation of the
proposal would not have significant adverse effects
on existing or potential competition; thus, com
petitive considerations are consistent with approval
of the subject application.
The Board notes that neither Applicant nor
Lincoln Bank will incur any debt in connection
with the acquisition of shares of Bank. The finan
cial and managerial resources and future prospects
of Applicant, Lincoln Bank, and Bank are consid
ered to be generally satisfactory. Accordingly,
banking factors are consistent with approval of the
application. There is no indication that the con
venience and needs of the community to be served
are not currently being met. Although there will
be no immediate increase in the services offered
by Bank, convenience and needs considerations
are consistent with approval of the application.
This application presents the Board with a situ
ation in which rather than acquiring control, Ap
plicant, through its subsidiary bank, is making a
relatively small investment in Bank. This invest
ment would not appear to have any adverse effects
on Applicant or Lincoln Bank. An acquisition of
less than a 25 per cent interest is not a normal
acquisition for a bank holding company. However,
the Bank Holding Company Act authorizes in
vestments of up to 5 per cent without Board
approval, and, by requiring prior Board approval
for the acquisition of more than 5 per cent of the
voting shares of a bank, clearly contemplates in
vestments between 5 and 25 per cent.6
It is the Board’s judgment that the proposed
transaction would be in the public interest and that
the application should be approved. On the basis
of record, the application is approved for the
reasons summarized above. The transaction shall
not be made (a) before the thirtieth calendar day
following the effective date of this Order or (b)
later than three months after the effective date of
this Order, unless such period is extended for good
6See the B oard’s Order of May 16, 1973 approving the
application of First Piedmont Corporation, G reenville, South
Carolina, to acquire shares of First Palmetto State Bank and
Trust Com pany, Colum bia, South Carolina, 38 F ederal R e g is
ter 14204 (1973), 59 Federal Reserve B u l l e t i n 456 (1973).
Law Department
cause by the Board, or by the Federal Reserve
Bank of Philadelphia pursuant to delegated au
thority.
By order of the Board of Governors, effective
March 11, 1977.
V o tin g for this action: V ic e Chairm an G ardner and
G overnors W a llich , Jack son , P artee, and L illy . A b sent
and not voting: Chairm an Burns and G overnor C old w ell.
(Signed)
[s e a l ]
G
r if f it h
L.
G
arw ood,
D e p u ty S e c re ta ry o f the B o a rd .
OLD CANAL BANKSHARES, INC.,
Lockport, Illinois
O rd e r D en yin g F orm ation
o f B ank H o ldin g C om pan y
OLD CANAL BANKSHARES, INC., Lock
port, Illinois, has applied for the Board’s approval
under § 3(a)(1) of the Bank Holding Company Act
(12 U .S.C . § 1842(a)(1)) of formation of a bank
holding company through acquisition of 80 per cent
or more of the voting shares of Heritage First Na
tional Bank of Lockport, Lockport, Illinois
(“ Bank” ).
Notice of the application, affording opportunity
for interested persons to submit comments and
views, has been given in accordance with § 3(b)
of the Act. The time for filing comments and views
has expired, and the application and all comments
received have been considered in light of the
factors set forth in § 3(c) of the Act (12 U.S.C.
§ 1842(c)).
Applicant is a recently chartered, nonoperating
corporation organized under the law s of D elaw are
for the purpose of becoming a bank holding com
pany by acquiring Bank ($50.2 million in depos
its).1 Upon acquisition of Bank, Applicant would
control the 186th largest commercial banking or
ganization in the State of Illinois and would control
approximately 0.08 per cent of total deposits in
commercial banks in the State.
Bank, located in Lockport, Illinois, approxi
mately 30 miles southwest of Chicago, is the
fourth largest of 22 commercial banks in the rele
vant banking market2 and holds approximately 7.9
per cent of the total commercial bank deposits in
d e p o s i t data as of December 31, 1975.
2The relevant banking market is approximated by Will
County, Illinois.
407
the market. The proposed transaction involves the
transfer of ownership of Bank from individuals to
a corporation owned by the same individuals.
Since the subject proposal is essentially a corporate
reorganization and Applicant has no subsidiaries,
it appears unlikely that consummation of the pro
posal would have any adverse effect upon existing
or potential competition or increase the concentra
tion of banking resources, or have any adverse
competitive effect. Thus, the Board concludes that
competitive effects of the instant proposal are not
adverse.
The Board had indicated on previous occasions
that a bank holding company should constitute a
source of financial and managerial strength to its
subsidiary bank(s), and that the Board will closely
examine the condition of an applicant with this
consideration in mind. With respect to the subject
application, it appears that the financial and mana
gerial resources and future prospects of Applicant
are entirely dependent upon Bank. The managerial
resources of Applicant and Bank are regarded as
generally satisfactory. However, as part of this
proposal, Applicant would assume certain debt
that its principals incurred in acquiring Bank’s
shares. Thus, Applicant proposes to initially incur
approximately $2.1 million in acquisition debt
which it proposes to service over a twelve-year
period through distributed earnings of Bank. The
projected earnings for Bank, in the Board’s view,
would not provide Applicant with the necessary
financial resources to meet its annual debt servic
ing requirements as well as any unexpected prob
lems that might arise at Bank. Under the instant
proposal, it does not appear that Bank would
maintain an adequate level of capital throughout
the debt retirement period.3
It does not appear that Bank’s management
proposes any significant changes in Bank’s opera
tions that might provide the necessary Bank earn
ings. In conclusion, the proposal would not pro
vide Applicant the necessary financial flexibility
to service its debt while maintaining adequate
capital in Bank, and therefore Applicant’s and
Bank’s financial resources and future prospects
weigh against approval of the application.
3 W ithin 180 days of approval of the subject proposal Appli
cant proposes to reduce the debt it would incur by $100,000.
This would result from the issuance by Bank of $500,000 in
9 per cent preferred stock that would be funded through the
sale of additional comm on stock in Applicant, which will be
purchased by its principals for $600,000.
408
Federal Reserve Bulletin □ April 1977
No significant changes in Bank’s operations or
in the services offered to customers of Bank are
anticipated to follow from consummation of the
proposed acquisition. Consequently, convenience
and needs factors lend no weight toward approval.
On the basis of the circumstances concerning
the instant application to become a bank holding
company, the Board concludes that the banking
considerations involved in this proposal present
adverse factors bearing upon the financial re
sources and future prospects of both Applicant and
Bank. Such adverse factors are not outweighed by
any procompetitive effects, the managerial re
sources of Applicant or Bank, or benefits that
would better satisfy the convenience and needs of
the community to be served. Accordingly, it is
the Board’s judgment that approval of the applica
tion to become a bank holding company would
not be in the public interest and that the application
should be denied.
On the basis of the facts of record, the applica
tion to become a bank holding company is denied
for the reasons summarized above.
By order of the Board of Governors, effective
March 9, 1977.
V o tin g for this action: V ic e Chairm an Gardner and
G overnors W a llich , Jack son , and L illy . A b sent and not
voting: Chairm an Burns and G overnors C o ld w ell and
Partee.
(Signed)
[s e a l ]
G
r if f it h
L.
G
arw ood,
D e p u ty S e c re ta ry o f the B o a rd .
Republic of Texas Corporation,
Dallas, Texas
O rd e r A p p ro v in g A c q u isitio n o f B ank
Republic of Texas Corporation, Dallas, Texas,
a bank holding company within the meaning of
the Bank Holding Company Act, has applied for
the Board’s approval under § 3(a)(3) of the Act
(12 U.S.C. § 1842(a)(3)) to acquire all of the
voting shares, less directors’ qualifying shares, of
the successor by merger to Dallas National Bank
in Dallas, Dallas, Texas ( “ Bank” ). The bank into
which Bank is to be merged has no significance
except as a means to facilitate the acquisition of
the voting shares of Bank. Accordingly, the pro
posed acquisition of shares of the successor orga
nization is treated herein as the proposed acquisi
tion of the shares of Bank.
Notice of the application, affording opportunity
for interested persons to submit comments and
views, has been given in accordance with § 3(b)
of the Act. The time for filing comments and views
has expired, and the Board has considered the
application and all comments received in light of
the factors set forth in § 3(c) of the Act (12 U.S.C.
§ 1842(c)).
Applicant, the fourth largest banking organi
zation in Texas, controls eight banks with aggre
gate deposits of approximately $3.1 billion, which
represents 6.5 per cent of total commercial bank
deposits in Texas.1 Acquisition of Bank ($32.0 mil
lion in deposits) would increase Applicant’s share
of Statewide commercial bank desposits by less
than 0.1 per cent and would have no appreciable
effect upon the concentration of banking resources
in Texas.
By Order dated October 25, 1973, the Board
approved the application of Applicant to become
a bank holding company through the direct acqui
sition of Republic National Bank of Dallas, Dallas,
Texas (“ Republic Bank” ), and the indirect acqui
sition of 29.9 per cent of the voting shares of Oak
Cliff Bank & Trust Company, Dallas, Texas
(“ Oak Cliff Bank” ). At that time, Republic Bank
owned indirectly between 5 and 24.9 per cent
interests in twenty-one non-subsidiary banks,
eighteen of which were in the Dallas banking
market.2 Applicant represented to the Board that
it would file separate applications for prior ap
proval by the Board for acquisition of additional
shares in each of certain of those banks, and would
divest completely its interest in others. The Board
in its Order stated that each such application filed
by Applicant would be considered on its own merit
in light of the statutory standards set forth in § 3
of the Act. Since that time Applicant has divested
its interests in seven of the Dallas-area banks. This
is Applicant’s second application to acquire addi
tional shares in one of the Dallas-area banks.3
Bank is the 37th largest of 132 banks in the
Dallas banking market and controls 0.4 per cent
of the total deposits of commercial banks in the
market. Applicant presently has two subsidiary
banks in the Dallas banking market.4 Republic
*A11 banking data are as of December 31, 1975, and reflect
bank holding company form ations and acquisitions approved
through February 28, 1977.
2The relevant banking market is approximated by the Dallas
RMA.
3By separate action of this date, the Board approved Appli
cant’s acquisition of First National Bank in Garland, Garland,
Texas ( “ Garland B ank” ).
4Upon acquiring Garland Bank, Applicant will control a
third subsidiary bank in the Dallas market and will thereby
control an additional 0.7 per cent of market deposits.
Law Department
Bank is the largest bank in that market with 25.5
per cent of the total deposits in commercial banks
in the market, and Oak Cliff Bank & Trust Com
pany is the eighth largest bank in the market with
1.2 per cent of market deposits. The eleven non
subsidiary banks in the Dallas market (including
Bank and Garland Bank) in which Applicant pres
ently holds minority interests have aggregate de
posits of $505.0 million, representing 5.4 per cent
of market deposits.
While consummation of the proposal would
appear to eliminate some existing competition
since Applicant and Bank operate in the same
market, the Board notes that Applicant, or its
predecessor in interest, Republic Bank, has con
trolled 20 per cent or more of the shares of Bank
since 1947, that officers and directors of Republic
Bank were instrumental in the formation of Bank,
and that the duration and nature of this relationship
is such that little, if any, meaningful competition
presently exists between Bank and Applicant’s
subsidiary banks in the Dallas market. Absent the
history of the long established relationship be
tween Applicant and Bank, the effects on existing
competition would be regarded as more serious;
however, in light of that relationship, the effects
are considered as only slight. Moreover, while
Applicant is the largest organization in the banking
market, in view of all the facts of record, the Board
does not regard the slight increase in concentration
of market deposits as significant. Accordingly, the
Board concludes that the proposed acquisition of
Bank by Applicant would not have significant
adverse effects on competition.
The financial and managerial resources and fu
ture prospects of Applicant, its subsidiaries, and
Bank are regarded as satisfactory and consistent
with approval of the application. Following con
summation of the transaction, Applicant intends
to improve and expand the services presently of
fered to customers of Bank. Applicant also has
indicated that it would support and encourage
Bank’s efforts to aid the community it serves, by
having Bank continue to engage in community
development activities, which include programs
for loans to minority businesses and home-improvement loans to low-income families. These
considerations relating to convenience and needs
of the community to be served lend weight toward
approval of the application and, in the Board’s
view, outweigh any slightly adverse competitive
effects that might result from consummation of the
proposal. Accordingly, it is the Board’s judgment
that the proposed acquisition would be in the
409
public interest and that the application should be
approved.
On the basis of the record, the application is
approved for the reasons summarized above. The
transaction shall not be made (a) before the thir
tieth calendar day following the effective date of
this Order or (b) later than three months after the
effective date of this Order, unless such period
is extended for good cause by the Board, or by
the Federal Reserve Bank of Dallas pursuant to
delegated authority.
By order of the Board of Governors, effective
March 23, 1977.
V otin g for this action: Chairm an Burns and G o v er
nors G ardner, W allich , C o ld w e ll, Jack son , P artee, and
L illy.
(Signed)
[s e a l ]
G
r if f it h
L.
G
arw ood
,
D eputy Secretary of the Board.
Republic of Texas Corporation,
Dallas, Texas
O rder A pprovin g A cquisition of Bank
Republic of Texas Corporation, Dallas, Texas,
a bank holding company within the meaning of
the Bank Holding Company Act, has applied for
the Board’s approval under § 3(a)(3) of the Act
(12 U.S.C. § 1842(a)(3)) to acquire all of the
voting shares (less directors’ qualifying shares) of
the successor by merger to First National Bank
in Garland, Garland, Texas (“ Bank” ). The bank
into which Bank is to be merged has no significance
except as a means to facilitate the acquisition of the
voting shares of Bank. Accordingly, the proposed
acquisition of shares of the successor organization
is treated herein as the proposed acquisition of the
shares of Bank.
Notice of the application, affording opportunity
for interested persons to submit comments and
views, has been given in accordance with § 3(b)
of the Act. The time for filing comments and views
has expired, and the Board has considered the
application and all comments received in light of
the factors set forth in § 3(c) of the Act (12 U .S .C.
§ 1842(c)).
Applicant, the fourth largest banking organi
zation in the State of Texas, controls eight bank
subsidiaries with aggregate deposits of $3.1 bil
lion, representing 6.5 per cent of commercial bank
deposits in the State.1 Acquisition of Bank would
JA11 banking data are as of December 31, 1975 unless
otherwise stated.
410
Federal Reserve Bulletin □ April 1977
increase Applicant’s share of commercial bank
deposits in Texas by 0.14 per cent but would not
alter Applicant’s State-wide ranking.
By Order dated October 25, 1973, the Board
approved the application of Applicant to become
a bank holding company through the direct acqui
sition of Republic National Bank of Dallas
(“ Republic Bank” ), and the indirect acquisition
of 29.9 per cent of the voting shares of Oak Cliff
Bank and Trust Company, Dallas, Texas ( “ Oak
Cliff Bank” ). At that time Republic Bank owned
indirectly between 5 and 24.99 per cent interest
in twenty-one non-subsidiary banks, eighteen of
which were in the Dallas banking market.2 Appli
cant represented to the Board that it would file
separate applications for prior approval by the
Board for acquisition of additional shares in each
of certain of those banks, and would divest com
pletely its interests in others. The Board in its
Order stated that each such application filed by
Applicant would be considered on its own merits
in light of the statutory standards set forth in §
3 of the Act. Since that time Applicant had di
vested its interests in seven of the Dallas-area
banks. This is Applicant’s first application to ac
quire additional shares in one of the Dallas-area
banks.3
Bank is the 16th largest of 132 banks in the
Dallas banking market and holds deposits of $66.4
million, representing 0.7 per cent of the total
deposits of commercial banks in the market. Ap
plicant presently has two subsidiary banks in the
Dallas banking market. Republic Bank is the larg
est bank in that market with 25.5 per cent of the
total deposits in commercial banks in the market,
and Oak Cliff Bank is the eighth largest bank in
the market with 1.2 per cent of market deposits.
The eleven non-subsidiary banks in the Dallas
market (including Bank) in which Applicant pres
ently holds minority interests have aggregate de
posits of $505.0 million, representing 5.4 per
cent of market deposits.
While consummation of the proposal would
appear to eliminate some existing competition in
asmuch as Applicant and Bank operate in the same
market, the Board notes that Applicant, or its
predecessor in interest, Republic Bank, has held
20 per cent or more of the shares of Bank for
30 years, and that the duration and nature of this
relationship are such that little, if any, meaningful
competition presently exists between Bank and
Applicant’s subsidiary banks in the Dallas market.
But for the history of the long established rela
tionship between Applicant and Bank, the effects
on existing competition would be viewed as more
serious, but viewed in light of that relationship
the effects are only slight. Moreover, while Ap
plicant is the largest organization in the banking
market, in view of the facts presented in the record
of this application, the Board does not regard the
slight increase in concentration of market deposits
as significant. Accordingly, the Board concludes
that the proposed acquisition of Bank by Applicant
would not have significant adverse effects on
competition.
The financial and managerial resources of Ap
plicant, its subsidiaries, and Bank are regarded as
satisfactory and consistent with approval of the
application. Considerations relating to banking
factors are also consistent with approval of the
application. Following consummation of the
transaction, Applicant intends to improve and ex
pand services presently offered to customers of
Bank. These considerations relating to conven
ience and needs of the community to be served
do not appear to be substantial but they do lend
some weight toward approval of the application,
and in the Board’s view, outweigh any slightly
adverse effects on competition that might result
from consummation of this proposal. Accordingly,
it is the Board’s judgment that the proposed ac
quisition would be in the public interest and that
the application should be approved.
On the basis of the record, the application is
approved for the reasons summarized above. The
transaction shall not be made (a) before the thir
tieth calendar day following the effective date of
this Order or (b) later than three months after the
effective date of this Order, unless such period
is extended for good cause by the Board, or by
the Federal Reserve Bank of Dallas pursuant to
delegated authority.
By order of the Board of Governors, effective
March 23, 1977.
V otin g for this action: Chairm an Burns and G o v er
nors G ardner, W a llich , C o ld w e ll, Jack son , Partee, and
L illy.
2The relevant banking market is approxim ated by the Dallas
RMA.
3By separate action of this date, the Board approved Appli
can t’s acquisition of Dallas National Bank (formerly Fair Park
National Bank), Dallas, Texas.
(Signed) Griffith L. Garwood,
[seal]
D e p u ty S e c re ta ry o f the B oa rd.
Law Department
The Sumitomo Bank, Limited,
Osaka, Japan
O rder A pprovin g
A cquisition of A dditional Shares of Bank
The Sumitomo Bank, Limited, Osaka, Japan,
a bank holding company within the meaning of
the Bank Holding Company Act, has applied for
the Board’s approval under § 3(a)(3) of the Act
(12 U.S.C. § 1842(a)(3)) to exercise preemptive
rights to acquire additional voting shares of Central
Pacific Bank, Honolulu, Hawaii (“ Bank” ). As a
result of the exercise of these rights, Applicant
would continue to hold 13.7 per cent of the voting
shares of Bank.
Notice of the application, affording opportunity
for interested persons to submit comments and
views, has been given in accordance with § 3(b)
of the Act. The time for filing comments and views
has expired, and the Board has considered the
application and all comments received in light of
the factors set forth in § 3(c) of the Act (12 U .S.C.
§ 1842(c)).
Applicant presently owns 13.7 per cent of the
voting shares of Bank. With deposits of approxi
mately $240 million, Bank controls 8.5 per cent
of the total deposits held by commercial banks in
Hawaii and is the third largest bank in the State.1
Applicant proposes to acquire 6,867 additional
voting shares of Bank through the exercise of its
preemptive rights in connection with a new issue
of Bank’s voting shares. If all of Bank’s new
shares are purchased, Applicant’s percentage
ownership of shares of Bank will not increase as
a result of the proposal. Consummation of the
proposal would not have any adverse effect on
existing or potential competition, nor would it
increase the concentration of banking resources or
have any adverse effect on other banks in the area.
Thus, competitive considerations are consistent
with approval of the application.
The financial condition and managerial re
sources of Applicant and Bank are considered
satisfactory and the future prospects for each ap
pear favorable. Thus, the banking factors are con
sistent with approval of the application. Although
there will be no immediate change or increase in
the services offered by Bank as a result of the
proposed transaction, the considerations relating
to the convenience and needs of the community
'A ll banking data are as of December 31, 1975.
411
to be served are consistent with approval of the
application. It is the Board’s judgment that the
proposed transaction would be consistent with the
public interest and that the application should be
approved.
Under section 3(d) of the Bank Holding Com
pany Act [12 U.S.C. 1842(d)] the Board may not
approve an application by a bank holding company
under section 3 of the Act to acquire shares of
any “ additional bank” located outside of the State
in which the operations of the bank holding com
pany’s banking subsidiaries were principally con
ducted as of July 1, 1966, or the date on which
it became a bank holding company, whichever is
later, unless such acquisition is specifically au
thorized by the statute laws of the State in which
the bank whose shares are to be acquired is lo
cated. Applicant became a bank holding company
on December 31, 1970, by virtue of its ownership
of a majority of the voting shares of The Sumitomo
Bank of California, San Francisco, California, and
thus, California is the State of Applicant’s
principal banking operations. The statute laws of
the State of Hawaii do not specifically authorize
the acquisition of shares or assets of a State bank
by an out-of-State bank holding company. Thus,
the Board may only approve the subject applica
tion if Bank is not considered an “ additional
bank” for purposes of section 3(d).
Applicant’s investment in Bank originated in
1954, prior to the enactment of the Bank Holding
Company Act. Since section 3(d) is prospective
in its application, that investment was effectively
grandfathered at the time Applicant became a bank
holding company in 1970. Consummation of the
proposed transaction would enable Applicant to
maintain its present interest in Bank.
The Board has considered the legislative history
of section 3(d), particuarly the intent of that sec
tion to prevent the interstate expansion of the
commercial banking operations of bank holding
companies, and has determined that, based on the
particular facts and circumstances of this case,
Bank should not be considered an “ additional
bank” for purposes of that section. Approval of
this application would not permit Applicant either
to acquire control of an additional bank or to
expand its grandfathered interest in Bank. How
ever, in keeping with the policy of section 3(d),
this approval is granted subject to the condition
that, in the event all of Bank’s newly issued shares
are not subscribed, Applicant will only acquire and
hold such shares as are necessary in order to
maintain its present interest in Bank.
412
Federal Reserve Bulletin □ April 1977
In a letter of this date to Applicant, the Board
has issued a preliminary determination, based
upon the rebuttable presumptions of control in
section 225.2(b)(1) of Regulation Y [12 CRF §
225.2(b)(1)], that Applicant exercises a controlling
influence over the management or policies of
Bank. The Board’s decision to approve the subject
application was made independent of that prelim
inary determination of control, and does not sig
nify a Board decision on any further action that
may result from such preliminary determination.
On the basis of the record, the application is
approved for the reasons summarized above. The
transaction shall not be made (a) before the thir
tieth calendar day following the effective date of
this Order or (b) later than three months after the
effective date of this Order, unless such period is
extended for good cause by the Board, or by the
Federal Reserve Bank of San Francisco pursuant
to delegated authority.
By order of the Board of Governors, effective
March 29, 1977.
V o tin g for this action: Chairm an Burns and G o v er
nors C o ld w e ll, Jack son , Partee, and L illy . A b sen t and
not voting: G overn ors Gardner and W a llich .
(Signed)
[s e a l ]
G
r if f it h
L.
G
arw ood,
D e p u ty S e cre ta ry o f the B o a rd .
O r d er s U n d e r S e c t io n 4 ( c)(8 )
of
B a n k H o l d in g C o m p a n y A ct
D. H. Baldwin Company,
Cincinnati, Ohio
O rd e r A p p ro v in g A c q u isitio n
o f L o u isville M o rtg a g e S e rv ic e C om pan y
D. H. Baldwin Company, Cincinnati, Ohio, a
bank holding company within the meaning of the
Bank Holding Company Act, has applied for the
Board’s approval, under § 4(c)(8) of the Act (12
U.S.C. § 1843(c)(8)) and § 225.4(b)(2) of the
Board’s Regulation Y (12 CFR § 225.4(b)(2)), to
acquire Louisville Mortgage Service Company,
Louisville, Kentucky (“ Service” ), a company that
engages in the activities of mortgage banking,
including originating and servicing, for its own
account and the account of others, conventional
and guaranteed residential mortgage loans. Service
also acts as insurance agent for the sale of insur
ance that is directly related to extensions of credit
by Service, including mortgage cancellation in
surance and credit accident and health insurance.1
Such activities have been determined by the Board
to be closely related to banking (12 CFR §
225.4(a)(1), (3), and (9)).
Notice of the application, affording opportunity
for interested persons to submit comments and
views on the public interest factors, has been duly
published (41 F ed era l R e g iste r 50031 (1976)).
The time for filing comments and views has ex
pired, and the Board has considered the application
and all comments received in light of the public
interest factors set forth in § 4(c)(8) of the Act
(12 U .S.C . § 1843(c)(8)).
Applicant, the fourth largest banking organi
zation in Colorado, controls twelve subsidiary
banks in that State, with aggregate deposits of
$582 million, representing approximately 7.7 per
cent of the total deposits in commercial banks in
Colorado. Applicant also engages through subsid
iaries in a variety of nonbanking activities, in
cluding savings and loan, mortgage banking, per
sonal and real property leasing, consumer finance,
and insurance agency and insurance underwriting.
Applicant also engages in the manufacture and sale
of musical instruments pursuant to indefinite
grandfather benefits under section 4(a)(2) of the
Act.2
Service operates a single office in Louisville,
Kentucky. As of June 30, 1975, Service, with a
real estate mortgage servicing portfolio of $176.0
million,3 ranked 170th among all mortgage com
panies in the United States. Service engages
principally in the origination and servicing of loans
on 1-4 family residential properties in the Louis
1 Applicant originally proposed to continue Service’s sale of
property damage and casualty insurance. On January 10, 1977,
the United States Court of Appeals for the Fifth Circuit ruled,
in A la b a m a A sso c ia tio n o f Insurance A g en ts v. B o a rd of
G overn ors, 544 F.2d 1245 (1977), that the sale of property
damage and casualty insurance in connection with extensions
of credit by a nonbank subsidiary of a bank holding company
is not closely related to banking and, therefore, is not a
permissible activity. In a letter to the Board dated January
20, 1977, Applicant com m itted itself to halt the sale of
property damage and casualty insurance upon consummation
of the acquisition of Service.
A p p lic a n t’s nonbank activities are described in detail in a
Board determination dated June 14, 1973, relating to A ppli
cant’s grandfather benefits (59 Federal Reserve B u l l e t i n 536
(1973)).
3A m erican B anker of October 21, 1975. Service was not
listed in the A m erican B an ker of October 25, 1976, as among
the 300 largest mortgage com panies as of June 30, 1976.
Applicant indicates that Service had a servicing portfolio of
$181.5 million as of May 31, 1976, which would rank Service
176th among all mortgage banking com panies as of mid-year
1976.
Law Department
ville market,4 and in 1975 originated approxi
mately only 3 per cent (in dollar value) of the
mortgage loans in that area. Service competes with
at least 20 other mortgage banking companies
(including six of the nation’s largest), six banks,
and twelve savings and loan associations. Appli
cant is currently engaged in mortgage banking
through its wholly-owned subsidiary, C. C.
Fletcher Mortgage Company, Cincinnati, Ohio
(“ FMC” ).5 While Service primarily originates 1-4
fam ily residential m ortgage loans, FM C ’s
principal business is originating commercial and
industrial mortgage loans. Accordingly, it appears
that there is no significant existing competition
between Service and FMC. In addition, though
Applicant’s banking and savings and loan subsidi
aries engage in mortgage lending, their activities
are concentrated in Colorado and the western
United States. Accordingly, it appears that there
is not significant competition between Service and
these subsidiaries. Thus approval of the proposed
acquisition should have no adverse effect on exist
ing competition.
The facts of record indicate that Service’s mar
ket share has declined in recent years. It is antici
pated that Service’s affiliation with Applicant will
provide Service with access to Applicant’s exper
tise, substantial financial resources, and wide
spread investor relationships and thereby enable
Service to strengthen and revitalize itself as a
viable and aggressive competitor in the mortgage
banking business. On balance, the Board con
cludes that the benefits to the public that can
reasonably be expected to result upon consumma
tion of this proposal outweigh any possible adverse
effects on the public interest that might result from
the proposed acquisition.
There is no evidence in the record indicating
that consummation of the proposed acquisition
would result in undue concentration of resources,
conflicts of interests, unsound banking practices,
or other adverse effects.
Service’s wholly-owned subsidiary, General
Realty Corporation of Kentucky, Inc., Louisville,
Kentucky (“ General” ), is engaged primarily in
holding real property for sale, which is an acitivty
4The Louisville mortgage banking market is approxim ated
by the Louisville SMSA (which includes Jefferson, Oldham ,
and Bullitt counties in Kentucky, and Floyd and Clark counties
in Indiana), plus Fayette County, Kentucky.
5As of June 30, 1976, FMC had a mortgage servicing
portfolio of $35.9 million.
413
the Board has not determined to be permissible
for bank holding companies. Therefore, Service
must dispose of all the real estate holdings of
General no later than two years from the effective
date of this Order.6
Based upon the foregoing and other consid
erations reflected in the record, the Board has
determined that the balance of the public interest
factors the Board is required to consider under §
4(c)(8) is favorable. Accordingly, the application
is hereby approved subject to the conditions that
Service dispose of the real estate holdings of
General no later than two years from the effective
date of this Order and reduce its interest in Heart
to no more than 5 per cent of Heart’s outstanding
voting shares upon consummation of this proposal.
This determination is subject to the conditions set
forth in § 225.4(c) of Regulation Y and to the
Board’s authority to require such modification or
termination of the activities of a holding company
or any of its subsidiaries as the Board finds neces
sary to assure compliance with the provisions and
purposes of the Act and the Board’s regulations
and orders issued thereunder, or to prevent evasion
thereof. The transaction shall be made not later
than three months after the effective date of this
Order, unless such period is extended for good
cause by the Board or by the Federal Reserve Bank
of Kansas City.
By order of the Board of Governors, effective
March 24, 1977.
V otin g for this action: Chairm an Burns and G over-.
n o rs G a rd n e r, C o ld w e ll, Ja c k s o n , a n d P a rte e . A b s e n t
and not voting: G overn ors W allich and L illy .
(Signed)
[s e a l ]
G
r if f it h
L.
G
arw ood,
D ep u ty S e c re ta ry o f the B o a rd .
6In accom plishing a divestiture of such property, Applicant
has agreed to transfer irrevocably the real estate held by
General to an independent trustee who shall have the duty of
divesting the property within the applicable time period.
Service also holds in excess of 5 per cent of the voting
stock of Heart of Louisville, Inc., Louisville, Kentucky
(“ H eart” ), which engages in real property leasing that is not
in compliance with the requirem ents of § 225.4(a)(6)(b) of
Regulation Y (12 CFR § 225.4(a)(6)(b)). Applicant has stated
it will reduce Service’s interest in Heart to no more than 5
per cent upon consum mation of the subject proposal.
414
Federal Reserve Bulletin □ April 1977
Republic of Texas Corporation,
Dallas, Texas
O rd e r A p p ro v in g R eten tio n o f
R ep u b lic C om m erce C o m p a n y, R e p u b lic
M o n ey O rd e rs, In c ., a n d R e p u b lic M o n ey
O rd ers o f C a lifo rn ia , In c ., a ll o f D a lla s, T exas
Republic of Texas Corporation, Dallas, Texas,
a bank holding company within the meaning of
the Bank Holding Company Act, has applied for
the Board’s approval, under section 4(c)(8) of the
Act [12 U.S.C. 1843(c)(8)] and § 225.4(b)(2) of
the Board’s Regulation Y [12 CFR 225.4(b)(2)],
to retain ownership of the voting shares of Repub
lic Commerce Company, Dallas, Texas (“ Com
pany” ), and indirect ownership of the voting
shares of Republic Money Orders, Inc. ( “ RMO” ),
and Republic Money Orders of California, Inc.
(“ RMO of California” ), both of Dallas, Texas.
Company engages in no activities directly but
merely serves as owner of record of all shares of
RMO. RMO engages in the activity of issuing
money orders and travelers checks to third party
agents who, in turn, sell the instruments at the
retail level.1 RMO of California is a wholly-owned
subsidiary of RMO which, until 1972, also issued
money orders and travelers checks. RMO of Cali
fornia is inactive and will be liquidated in 1985
when any money orders that remain unclaimed at
that time escheat to the State of California.
The Board has previously invited comment on
a proposal to amend its Regulation Y to add the
activity of issuing and selling payment instru
ments, such as money orders, to the list of activi
ties permissible pursuant to section 4(c)(8) of the
Act [41 F edera l R e g is te r 14902]. In addition,
notice of the instant application, affording oppor
tunity for interested persons to submit comments
and views on the public interest factors, has been
duly published [40 F e d era l R e g iste r 44634 and
41 F ederal R e g iste r 14902]. The time for filing
comments and views has expired, and the Board
has considered the entire record of this proposal,
including all comments received, and has deter
mined that the activity of issuing and selling
money order-like payment instruments is closely
related to banking. However, the Board has de
cided that it will leave the rulemaking proceeding
open and that it will not at present amend Regula
*By Order of June 25, 1976, the Board approved the subject
application as it related to the issuance and sale of travelers
checks [62 Federal Reserve B u l l e t i n 630].
tion Y to include this activity among those gener
ally permissible for bank holding companies.
Rather, it will consider applications for permission
to engage in the activity on a case-by-case basis,
applying the public benefits test of § 4(c)(8) to
the facts in each case. The Board also has deter
mined that the application of Republic of Texas
Corporation should be approved.
By Order dated October 25, 1973, the Board
approved the application of Applicant to become
a bank holding company through the acquisition
of Republic National Bank of Dallas (“ Republic
Bank” ) and 29.99 per cent of the voting shares
of Oak Cliff Bank and Trust Company, Dallas,
Texas. Applicant became a bank holding company
on May 9, 1974. At the time that Applicant
became a bank holding company, it also acquired,
from Republic Bank, direct ownership of Com
pany. Republic Bank was itself a bank holding
company by virtue of the 1970 Amendemnts to
the Act and owned various bank and nonbank
interests. RMO and its subsidiary, RMO of Cali
fornia, were established as d e n ovo subsidiaries
of the profit sharing plan of Republic Bank. Pur
suant to the provisions of § 4(a)(2) of the Act,
Applicant had two years, subject to the possibility
of three one-year extensions, from the date on
which it became a bank holding company to divest
its nonbank activities or, in the alternative, to
apply to the Board for approval to retain them.
In this proposal Applicant has applied to retain
its money order activities. The Board regards the
standards under § 4(c)(8) of the Act for retention
of shares of a company to be the same as the
standards for a proposed acquisition.
In order to authorize a bank holding company
to engage in a nonbanking activity pursuant to §
4(c)(8) of the Bank Holding Company Act
(“ Act” ), the Board must first determine whether
the activity is closely related to banking or man
aging or controlling banks. The Board finds that
banks historically have been in the business of
issuing money orders and similar payment instru
ments, such as cashier’s checks and certified
checks. Such instruments evolved from the need
for a safe method of transmitting funds over long
distances and the need for a method of assuring
payments. They are a functional equivalent of cash
when used to effect payments, and are of particular
usefulness to persons of limited resources who do
not or cannot practically maintain checking ac
counts. The instruments that are the subject of this
proposal extend, on an economical and convenient
basis, the efficient payments mechanism of the
La w Departm ent
commercial banking system to persons other than
demand deposit customers of banks. Since the
proposed activity is comparable to certain func
tions of banks, involves financial skills generally
possessed by banks, and is a service that banks
traditionally have performed, the Board concludes
that the proposed activity is closely related to
banking.
In order to approve the subject application, the
Board must also find that the performance of the
proposed activity by an affiliate of Applicant “ can
reasonably be expected to produce benefits to the
public, such as greater convenience, increased
competition, or gains in efficiency, that outweigh
possible adverse effects, such as undue concentra
tion of resources, decreased or unfair competition,
conflicts of interests, or unsound banking prac
tices.” This balancing test necessitates a positive
showing of public benefits, outweighing possible
adverse effects of any proposal, before an applica
tion may be approved. An applicant seeking ap
proval to engage in a nonbanking activity under
this section must bear the burden of showing the
public benefits that would flow from its proposal.
Applicant, the fourth largest banking organi
zation in Texas, controls eight banks with total
domestic deposits of approximately $3 billion,
representing about 6.5 per cent of the total deposits
in commercial banks in the State.2 In addition,
Applicant engages indirectly through a group of
corporations, referred to collectively as The How
ard Corporation, in various nonbanking activities
that are described in a Board determination dated
September 10, 1973, relating to the grandfather
benefits of Republic Bank [59 Federal Reserve
B u l l e t i n 768 (1973)]. The Board has previously
ruled that Applicant would not be a successor to
the grandfather privileges of Republic Bank, and
Applicant has committed, and is required, to
dispose of the impermissible activities within the
two-year statutory period prescribed in § 4(a)(2)
of the Act.3
RMO was established de novo by Republic
Bank in 1959. It sells money orders and travelers
checks through outlets located in all 50 States and
some foreign countries. In 1976 it had total money
2Unless otherwise noted, all banking data are as of D e
cember 31, 1975, and reflect bank holding company formations
and acquisitions approved through December 31, 1976.
•*The Federal Reserve Bank of Dallas, acting pursuant to
delegated authority, has extended the period within which
Applicant must dispose of its impermissible activities for one
year to May 9, 1977, as perm itted under § 4(a)(2) of the Act.
415
order issues of approximately $1 billion.4 In view
of the highly concentrated nature of the money
order industry and the fact that RMO was estab
lished de novo , as a subsidiary of Applicant’s lead
bank, the Board concludes that Applicant’s reten
tion of RMO would not result in any adverse
effects on competition in any relevant area. Fur
thermore, there is no evidence in the record to
indicate that the proposed retention of RMO by
Applicant would lead to an undue concentration
of resources, unfair competition, conflicts of in
terests, or unsound banking practices.
The Board notes that the wholesale aspect of
the money order business in the United States is
presently dominated by a few nonfinancial compa
nies that are not subject to the Federal Reserve
System’s reserve requirements. The Board be
lieves that the development of new competition
in this business on a national scale may not be
forthcoming under the present statutory framework
unless a degree of competitive equity can be es
tablished between the nonfinancial institutions al
ready in the business and potential bank holding
company entrants. Such equity cannot be achieved
if some competitiors are subject to reserve re
quirements while others are not. In such unique
circumstances, the Board finds that there are public
benefits associated with enabling bank holding
companies to compete with the dominant organi
zations in this business on an equal basis by
permitting what is essentially a consumer-oriented
demand deposit business to be conducted by non
bank affiliates of member banks.5
Unlike other issuers of money orders, RMO
does not set a schedule of commissions that its
agents must charge. As a result, RMO’s agents
have greater flexibility in dealing with retail cus
4A11 of the money orders Applicant now issues have a
maximum face value of $200, and this limit is specified on
the instrument. The Board regards A pplicant’s m oney orders
as being essentially a consum er-oriented type of paym ent
instrument, and believes that in no event should the instruments
have a face value greater than $1,000, in order to assure that
they are intended primarily for use by consumers.
5It should be noted, however, that the B oard’s decision with
respect to money orders under the particular circum stances
present in this proposal does not signify any change in the
Board’s opinion that there is a need for universal reserve
requirements on dem and deposits of nonmem ber banks, as well
as member banks. As the Board stated in its Order of June
14, 1973, authorizing BankAm erica Corporation, San Fran
cisco, California, to engage in the business of issuing traveler’s
checks [38 F ederal R eg iste r 16280 (1973)], it continues to
believe that all institutions engaged in deposit banking should
be subject to com mon reserve requirem ents.
416
Federal Reserve Bulletin □ April 1977
tomers and, in certain circumstances, may reduce
retail prices. In addition to possible lower rates,
continued affiliation of Applicant and RMO should
increase the possibilities that RMO will expand
the number of retail outlets that handle its money
orders. Money orders are of particular usefulness
to persons of limited resources who do not or
cannot practically maintain checking accounts, and
approval of this proposal will assure the continued
availability to such persons of these instruments,
which are issued by a large financial organization
and enjoy ready acceptability. Accordingly, it is
the Board’s view that approval of the subject
application would result in continued benefits to
the public and is, therefore, in the public interest.6
Based upon the foregoing and other consid
erations reflected in the record, the Board has
determined, in accordance with the provisions of
§ 4(c)(8) of the Act, that consummation of this
proposal can reasonably be expected to result in
benefits to the public that outweigh possible ad
verse effects. Accordingly, the application is
hereby approved. This determination is subject to
the conditions set forth in § 225.4(c) of Regulation
Y and to the Board’s authority to require such
modification or termination of the activities of a
holding company or any of its subsidiaries as the
Board finds necessary to assure compliance with
the provisions and purposes of the Act and the
Board’s regulations and orders issued thereunder,
or to prevent evasion thereof.
By order of the Board of Governors, effective
March 11, 1977.
V o tin g for this action: V ic e Chairm an G ardner and
G overnors W a llich , Jack son , Partee, and L illy . A b sen t
and not voting: Chairm an Burns and G overnor C old w ell.
(Signed)
[s e a l ]
G
r if f it h
L.
G
arw ood,
D e p u ty S e cre ta ry o f the B o a rd .
6The Board is concerned that because purchasers of money
orders may view this instrument as a close equivalent to a
personal check, such persons may misapprehend their right
to stop paym ent on such instrum ents. Indeed, whether such
a right exists may turn upon technicalities in the form of such
instruments. So that purchasers are not misled, the Board urges
that the issuer disclose on the instruments whether or not such
a right exists and, if so, how it may be exercised. W hile the
Board is not at this time requiring such a disclosure as a
condition of engaging in the activity, it notes that, if experience
should indicate that consum ers are in fact being misled in this
regard, the subject may be an appropriate one to be dealt with
by the Federal Trade Com mission or the Board under their
respective jurisdictions to define unfair or deceptive practices.
Citicorp,
New York, New York
O rd e r A p p ro v in g
E n gagin g in N on b a n k A c tiv ity
Citicorp, New York, New York, a bank holding
company within the meaning of the Bank Holding
Company Act, has applied for the Board’s ap
proval, under § 4(c)(8) of the Act (12 U.S.C. §
1843(c)(8)) and § 225.4(b)(2) of the Board’s Reg
ulation Y (12 C.F.R. 225.4(b)(2)), to engage to
d e n o vo , through a new nonbank subsidiary, Citi
corp Services, Inc. (“ Services” ), in the activity
of issuing and offering on a consignment basis
general purpose variable denominated payment
instruments.
Notice of the application, and of proposed rulemaking to amend the Board’s Regulation Y to add
the activity of issuing and selling money order-like
payment instruments to the list of activities per
missible pursuant to § 4(c)(8) of the Act, was duly
published (41 F ed era l R e g iste r 14902 (1976)) in
order to afford opportunity for interested persons
to submit comments and views on the public
interest factors with respect to the application, and
on the question of whether the proposed activity
is so closely related to banking or managing or
controlling banks as to be a proper incident
thereto.
The Board has considered the entire record of
this proposal, including all comments received,
and has determined that the activity is closely re
lated to banking. However, the Board has decided
that it will leave the rulemaking proceeding open
and that it will not at present amend Regulation
Y to include this activity among those generally
permissible for bank holding companies. Rather,
it will consider applications for permission to
engage in the activity on a case-by-case basis,
applying the public benefits test of § 4(c)(8) to
the facts in each case. The Board also has deter
mined that the application of Citicorp should be
approved to the extent that it involves the issuance
and marketing of payment instruments of a sort
that would primarily be of use to consumers.
In order to authorize a bank holding company
to engage in a nonbanking activity pursuant to §
4(c)(8) of the Bank Holding Company Act
(“ Act” ), the Board must first determine whether
the activity is closely related to banking or man
aging or controlling banks. The Board finds that
banks historically have been in the business of
issuing money orders and similar payment instru
ments, such as cashier’s checks and certified
Law Department
checks. Such instruments evolved from the need
for a safe method of transmitting funds over long
distances and the need for a method of assuring
payments. They are a functional equivalent of cash
when used to effect payments, and are of particular
usefulness to persons of limited resources who do
not or cannot practically maintain checking ac
counts for effecting payment transactions. The
instruments that are the subject of this proposal
would extend, on an economical and convenient
basis, the efficient payments mechanism of the
commercial banking system to persons other than
the typical demand deposit customers of banks.
Since the proposed activity is comparable to cer
tain functions of banks, involves financial skills
generally possessed by banks, and is a type of
service that banks traditionally have performed,
the Board concludes that the proposed activity is
closely related to banking.
In order to approve the subject application, the
Board must also find that the performance of the
proposed activity by a nonbank affiliate of Appli
cant “ can reasonably be expected to produce ben
efits to the public such as greater convenience,
increased competition, or gains in efficiency, that
outweigh possible adverse effects, such as undue
concentration of resources, decreased or unfair
competition, conflicts of interests, or unsound
banking practices.” This balancing test necessi
tates a positive showing of public benefits out
weighing the possible adverse effects of any pro
posed acquisition before an application may be
approved. An applicant seeking approval to en
gage in a nonbanking activity under this section
must bear the burden of showing the public bene
fits that would flow from its proposal.
Applicant, the largest banking organization in
New York State and the second largest banking
organization in the United States, controls two
subsidiary banks,1 which together operate banking
offices throughout New York State and control
combined deposits of approximately $19.5 billion,
representing about 14.4 per cent of the total de
posits in commercial banks in New York State.2
E ffectiv e January 1, 1976, four of A pplicant’s up-State
banking subsidiaries were merged to form Citibank (New York
State), N .A ., Buffalo, New York. The two remaining banking
subsidiaries were merged into A pplicant’s lead bank, Citibank,
N .A ., New York, New York (formerly First National City
Bank).
2Deposit data are as of December 31, 1975.
417
Applicant engages in a variety of permissible non
bank activities through some 85 direct and indirect
domestic nonbank subsidiaries. Applicant’s non
bank activities include mortgage banking,3 leas
ing, consumer and sales financing, and insurance
agency activities for insurance which is directly
related to extensions of credit by Applicant’s sub
sidiaries.
Applicant proposes to issue and offer on a
consignment basis general purpose, variable de
nominated payment instruments to vendors or
agents who would then sell such instruments to
the general public. The purchasers would specify
the denomination of the instrument. Applicant
proposes to engage in this activity de novo through
its wholly owned subsidiary, Citicorp Services,
Inc., which will act as the distributing and mar
keting agent in connection with offering the in
struments. Applicant’s payment instruments are
intended to serve as substitutes or replacements
for money orders, cashier’s checks, teller’s checks,
dollar drafts, certified checks, and similar types of
payment instruments. The instruments that Citicorp
proposes to issue will be of two types: one will
have a $1,000 limit on its face value and will be
similar to the traditional personal money order ; the
second type will be unlimited in face value.
The facts of record on this proposal indicate that
consumer-type payment instruments, such as tra
ditional money orders, are marketed nationally on
the wholesale level by a few large organizations
and locally on a retail level by a wide variety of
financial and nonfinancial institutions. On the na
tional scale, the market is highly concentrated,
being dominated by only a few large organi
zations.4 Entry into this business on a national
scale involves overcoming significant barriers
3Applicant engages in mortgage banking activities through
Advance M ortgage Com pany ( “ A dvance” ), Southfield, M ich
igan, a nonbank subsidiary which Applicant acquired on June
15, 1970. Under the provisions of § 4(a)(2) of the Act,
Applicant may not retain the shares of Advance beyond De
cember 31, 1980, without Board approval. By Order dated
December 26, 1973, the Board denied A pplicant’s application
to retain Advance pursuant to § 4(c)(8) of the Act. [60 Federal
Reserve B u l l e t i n 50].
4The Board notes that traditional m oney orders generally
have a maximum face value printed on the instrum ent, that
this ceiling is usually relatively low, perhaps $200 or $500,
and that money orders are primarily used to transmit money
by members of the consumer public who do not or cannot
maintain checking accounts. The Board regards paym ent in
struments of this type as being clearly “ consum er-type pay
ment instrum ents,” and believes that the imposition of a
$1,000 limitation on the face value of each instrument will
assure that it is intended primarily for use by consum ers.
418
Federal Reserve Bulletin □ April 1977
since a potential entrant must possess the capabil
ity for managing the extensive sales and servicing
operation necessary for handling a low unit price,
high volume product. Such capabilities frequently
are associated with banking organizations of sig
nificant size. Applicant already has an established
organization of this type, and is one of a limited
number of companies with such a capability so
as to be regarded as a potential entrant. Appli
cant’s entry into this market would result in in
creased competition in this industry and may be
expected ultimately to result in increased prospects
for some deconcentration of the industry in the
future. Accordingly, the Board views Applicant’s
proposal as procompetitive and in the public inter
est insofar as it relates to the issuance of instru
ments that are intended primarily for use by con
sumers.
The Board notes that the wholesale aspect of
the money order business in the United States is
presently dominated by nonfinancial companies
that are not subject to the Federal Reserve Sys
tem’s reserve requirements. The Board believes
that the development of new competition in this
business on a national scale may not be forth
coming under the present statutory framework
unless a degree of competitive equity can be es
tablished between the nonfinancial institutions al
ready in the business and potential bank holding
company entrants. Such equity cannot be achieved
if some competitors are subject to reserve require
ments while others are not. In such unique cir
cumstances, the Board finds that there are public
benefits associated with enabling a bank holding
company to compete with the dominant organi
zations in this business on an equal basis by
permitting the issuance of a consumer-oriented
instrument by a nonbank affiliate of a member
bank.5 However, the Board is unconvinced at this
time that the public interest would be best served
by permitting the issuance and marketing of such
instruments without the imposition of a specific
limitation on their denomination because of the
5It should be noted that the B oard’s decision under the
particular circum stances present in this proposal does not
signify any change in the B oard’s opinion that there is a need
for universal reserve requirements on demand deposits of
nonm em ber banks, as well as m ember banks. As the Board
stated in its Order of June 14, 1973, authorizing BankAm erica
Corporation, San Francisco, California, to engage in the busi
ness of issuing traveler’s checks (38 F ederal R eg iste r 16280
(1973)), it continues to believe that all institutions engaged
in deposit banking should be subject to com mon reserve
requirements.
potential for adverse effects on the reserve base
that could result from such action. Reserve re
quirements serve as an essential tool of monetary
policy and, in the Board’s view, any action that
would have the effect of diminishing the reserve
base should be taken only if there are compelling
reasons for doing so. The Board is concerned that
approval of this proposal without any restrictions
on the size of the instruments to be issued would
result in an erosion of the reservable deposits of
the banking system in an unquantifiable magni
tude. There is nothing in the record of this proposal
that would support a finding that a sufficiently
compelling reason from a public interest stand
point exists to justify such action. Indeed, the
public benefits that are likely to flow from Appli
cant’s proposal are directly associated with the
consumer-oriented instruments that may be is
sued. Accordingly, in order to provide such bene
fits but at the same time to limit the adverse impact
on the reserve base that the issuance of such
instruments by a nonbanking affiliate of a member
bank may have, the Board finds that the imposition
of a $1,000 maximum face value on the proposed
instruments would be in the public interest.
In addition to increased competition, Applicant
proposes to provide a benefit to the public through
reduced costs and increased convenience to the
purchaser.8 Toward this end, Applicant states that
lost or stolen instruments will be reissued at no
charge to the customer and, in cases where a
stop-payment cannot be made because an instru
ment has already been paid, photocopies of the
instrument will be provided without charge. The
Board believes that this would benefit the pur
chasers of these instruments as it appears to repre
sent a cost savings when compared to the policies
of other companies in the industry.
In summary, the Board finds that consumeroriented payment instruments are of particular
usefulness to persons of limited resources who do
not or cannot practically maintain checking ac
counts; that approval of this proposal will increase
the availability to such persons of these instru
ments, which will be issued by a large financial
organization and will enjoy ready acceptability;
and that certain of the proposed features of Appli
6 Applicant proposes that one means of providing a benefit
to the public through reduced costs to the purchaser will be
by offering its instruments to the selling agents at a price that
Applicant believes to be lower than the fees charged for
com peting instruments.
Law Department
cant’s instruments will offer greater convenience
and benefits to the public and foster increased
competition in the industry.7 The Board further
finds that the record of this proposal does not
support a conclusion that the issuance by a non
bank subsidiary of a bank holding company of a
payment instrument in a denomination in excess
of $1,000 would offer sufficient public benefits to
support approval.
Based upon the foregoing and other consid
erations reflected in the record, the Board has
determined that the balance of the public interest
factors the Board is required to consider under §
4(c)(8) is favorable with respect to the activity of
issuing consumer-oriented payment instruments
having a maximum face value of $1,000. This
determination is subject to the considerations set
forth in § 225.4(c) of Regulation Y and to the
Board’s authority to require such modification or
termination of the activities of a holding company
or any of its subsidiaries as the Board finds neces
sary to assure compliance with the provisions and
purposes of the Act and the Board’s regulations
and orders issued thereunder, or to prevent evasion
thereof.
The activities approved hereby shall be com
menced not later than three months after the ef
fective date of this Order, unless such period is
extended for good cause by the Board or by the
Federal Reserve Bank of New York.
By order of the Board of Governors, effective
March 11, 1977.
V o tin g for this action: V ic e Chairm an Gardner and
G overnors W a llich , Jack son , P artee, and L illy . A b sent
and not voting: Chairm an Burns and G overn or C oldw ell.
(Signed)
[s e a l ]
G
r if f it h
L.
G
arw ood,
Trust Company of Georgia,
Atlanta, Georgia
O rd e r A p p ro v in g
A cq u isitio n o f A d a ir M o r tg a g e C om pan y
Trust Company of Georgia, Atlanta, Georgia,
a bank holding company within the meaning of
the Bank Holding Company Act, has applied for
the Board’s approval, under section 4(c)(8) of the
Act [12 U.S.C . § 1843(c)(8)] and section
225.4(b)(2) of the Board’s Regulation Y [12 CFR
§ 225.4(b)(2) (1976)], to acquire direct ownership
of 100 per cent of the voting shares of Adair
Mortgage Company, Atlanta, Georgia ( “ Adair” ),
from Trust Company of Georgia Associates, At
lanta, Georgia ( “ Associates” ), a wholly-owned
subsidiary of Applicant’s lead bank.1 Adair en
gages in the general activities of a mortgage bank
ing company. Applicant has also applied to engage
de novo through Adair, in the activities of a
mortgage banking company at an office to be
located in College Park, Georgia, and to relocate
the main office of Adair from Atlanta to Cobb
County, Georgia.2 Each of the aforementioned
activities has been determined by the Board to be
closely related to banking [12 CFR § 225.4(a)(1)
and (3) (1976)].
Notice of the applications, affording opportunity
for interested persons to submit comments and
views on the public interest factors, has been duly
published [41 F edera l R e g iste r 54542 (1976)].
The time for filing comments and views has ex
pired, and the Board has considered the applica
tions and all comments received in the light of
the public interest factors set forth in section
4(c)(8) of the Act [12 U.S.C. § 1843(c)(8)].
Applicant, the third largest banking organization
in Georgia, directly controls Trust Company Bank,
D ep u ty S e cre ta ry o f the B o a rd .
7The Board is concerned that because purchasers of these
instruments may view them as a close equivalent to a personal
check, such persons may misapprehend their right to stop
payment on such instruments. Indeed, whether such a right
exists may turn upon technicalities in the form of such instru
ments. So that purchasers are not misled, the Board urges that
the issuer disclose on the instruments whether or not such a
right exists and, if so, how it may be exercised. While the
Board is not at this time requiring such a disclosure as a
condition of engaging in the activity, it notes that, if experience
should indicate that consum ers are in fact being misled in this
regard, the subject may be an appropriate one to be dealt with
by the Federal Trade Com mission or the Board under their
respective jurisdictions to define unfair or deceptive practices.
419
1 Adair, and its wholly-owned subsidiary, Adair Mortgage
Company of Florida, were acquired by Associates on January
29, 1971, pursuant to section 4(c)(5) of the Act [12 U .S.C .
§ 1843(c)(5)]. Section 4(c)(5) of the Act generally permits a
bank holding com pany to acquire, without Board approval,
shares that are of the kinds and amounts explicitly eligible
by statute for investm ent by national banking associations
under the provisions of section 5136 of the Revised Statutes.
Applicant’s subject proposal contemplates its acquisition of
Adair from Associates pursuant to section 4(c)(8) of the Act
as an internal corporate reorganization to simplify A pplicant’s
structure.
2In a related m atter, the Board today approved A pplicant’s
application filed pursuant to section 4(c)(8) of the Act and
section 225.4(b)(2) of Regulation Y, to acquire, through Adair,
loan servicing contracts and certain other assets (primarily
shares of Federal National Mortgage Association) of Georgia
Loan and Trust Com pany, M acon, Georgia.
420
Federal Reserve Bulletin □ April 1977
Atlanta, Georgia (“ Atlanta Bank” ) (deposits of
$796 million), and, through Associates, indirectly
controls five other banks (aggregate deposits of
$400 million).3 The aggregate deposits of Appli
cant’s six subsidiary banks represent approxi
mately 10 per cent of the total deposits in com
mercial banks in the State. Through its banking
subsidiaries, Applicant engages in real estate mort
gage lending as a part of its commercial banking
business. Through Adair, Applicant also engages
in mortgage banking activities including: origina
tion of permanent mortgages secured by both oneto-four family and multi-unit residential proper
ties; origination of permanent mortgages secured
by commercial properties; origination of con
struction and development loans to facilitate
Adair’s permanent origination business; servicing
of permanent loans; and origination of second
mortgage loans.4
Applicant indirectly acquired Adair in 1971
pursuant to section 4(c)(5) of the Act and, through
this application, seeks permission to operate Adair
pursuant to section 4(c)(8) of the Act. The Board
regards the standards of section 4(c)(8) for the
retention of shares in a nonbanking company,
previously operated by a bank holding company
pursuant to section 4(c)(5), to be the same as the
standards for a proposed acquisition under section
4(c)(8). Accordingly, the Board must find that
neither the operation of the nonbanking company
under section 4(c)(5) nor the Board’s approval of
the section 4(c)(8) application would result in an
undue concentration resources, decreased or unfair
competition, conflicts of interests, or unsound
banking practices.
Prior to its acquisition of Adair in 1971, Atlanta
Bank competed with Adair in a regional market
with respect to construction, commercial, and
multi-family residential loans. Nevertheless, the
Atlanta banking market5 was, and remains, the
principal geographic area in which both Adair and
Atlanta Bank originate permanent mortgages se
cured by one-to-four unit residential property. In
1969, $637 million in all types of mortgages were
recorded in the Atlanta area by the numerous
competitors therein6 with Adair accounting for
$6.6 million and Atlanta Bank for $20.8 million.
With respect to total originations of one-to-four
family residential mortgages in the market, Atlanta
Bank accounted for approximately 2 per cent and
Adair for approximately 1.2 per cent of that total.
By contrast, in 1975, the numerous organizations7
competing in the Atlanta area recorded $ 1,050
million in all types of mortgages in that area with
Adair accounting for $7.9 million and Atlanta
Bank for $6.4 million, both representing less than
1 per cent of the total. With respect to total
recordings of one-to-four family residential mort
gages in the market, Adair accounted for approxi
mately 1 per cent and Atlanta Bank for approxi
mately two-tenths of 1 per cent of that total.
While it appears that acquisition of Adair by
Applicant did eliminate some direct competition
in originations of mortgage loans, it appears that
the effect of such elimination in the relevant mar
ket was not significantly adverse due to the large
number of other competitors therein and the fact
that neither Atlanta Bank nor Adair held substan
tial shares of the mortgage markets that are subject
to definitive measurement prior to the time of
acquisition. Therefore, it appears that the amount
of existing competition that was eliminated was
not substantial nor was any significant amount of
competition foreclosed through Applicant’s acqui
sition of Adair. The Board concludes that inas
much as Applicant has continuously owned Adair
since 1971 with limited adverse effects upon com
petition in the relevant market, Applicant’s con
tinued retention of Adair would not have any
3 All banking data are as of December 31, 1975, unless
otherwise indicated. In addition to its six subsidiary banks,
Applicant received the B oard’s approval, on December 7,
1976, to acquire Security National Bank, Smyrna, Georgia
(deposits of $17.4 million). [See 41 F ederal R eg iste r 54541
(1976); 1977 Federal Reserve B u l l e t i n 77 (January).] Also,
on January 3, 1977, A pplicant received the B oard’s approval
to acquire, through merger, Central Bankshares Corporation,
Jonesboro, G eorgia, that firm’s sole subsidiary bank (deposits
of $13.7 m illion), and its two non-banking activities. [See 42
F ederal R eg iste r 2354 (1977); 1977 Federal Reserve B u l l e t i n
161 (February).]
4A dair’s wholly-owned subsidiary in Florida engages in the
origination of com mercial loans; however, its business did not
and does not overlap with Applicant or its subsidiaries.
5The Atlanta banking m arket is approxim ated by Clayton,
Cobb, DeKalb, Douglas, Fulton, G winett, Henry, and Rock
dale Counties.
6These included 41 mortgage com panies, 20 savings and
loan associations, nine banking organizations, all with offices
in the Atlanta Standard M etropolitan Statistical Area
( “ SM SA ” ), as well as 42 other lenders outside the SMSA.
The nation’s fourth, eighth, and ninth largest mortgage com
panies had offices in the market.
7In 1975, there were 36 mortgage com panies, eight banking
organizations, 20 savings and loan associations, nine insurance
com panies, all with offices in the m arket, as well as 76 other
lenders with offices outside the market. The N ation’s first,
second, fourth through seventh, and ninth largest mortgage
com panies had offices in the m arket.
Law Department
significant adverse effects upon either actual or
potential competition. To the contrary, Adair’s
affiliation with Applicant has enabled the latter to
provide funds to Adair, which financial assistance
has maintained Adair’s ability to both operate as
a viable competitor and make construction and
development and second mortgage loans. Accord
ingly, the Board regards these considerations as
being in the public interest.
Applicant has also proposed, in connection with
this application, that it engage d e n o vo , in the
southern portion of metropolitan Atlanta, through
Adair, in the following activities pursuant to sec
tion 4(c)(8) of the Act: making permanent resi
dential and commercial mortgages for resale to
investors; making loans for acquisition and devel
opment of real estate; making construction loans;
servicing mortgages and acting as broker in plac
ing permanent mortgages. Finally, Applicant has
also proposed to relocate Adair’s main office from
its current location to an area wherein it will
continue to serve the northern portion of metro
politan Atlanta. In that these latter two proposals
are a part of Applicant’s internal corporate re
structuring, it does not appear that there would be
any significant adverse effect upon either existing
or potential competition as a result of Applicant’s
consummation of these two transactions.
It is the Board’s judgment that the benefits that
can reasonably be expected to result from each
of these proposals are consistent with approval of
the applications. There is no evidence in the record
indicating that consummation of the proposed
transactions would result in any undue concentra
tion of resources, unfair competition, conflicts of
interests, unsound banking practices or other ad
verse effects upon the public interest.
Based upon the foregoing and other consid
erations reflected in the record, the Board has
determined that the balance of the public interest
factors the Board is required to consider under
section 4(c)(8) is favorable. Accordingly, the ap
plications are hereby approved. This determination
is subject to the conditions set forth in section
225.4(c) of Regulation Y and to the Board’s au
thority to require such modification or termination
of the activities of a bank holding company or
any of its subsidiaries as the Board finds necessary
to assure compliance with the provisions and
purposes of the Act and the Board’s regulations
and orders issued thereunder, or to prevent evasion
thereof.
The transactions shall be made not later than
three months after the effective date of this Order,
421
unless such period is extended for good cause by
the Board or by the Federal Reserve Bank of
Atlanta, pursuant to authority hereby delegated.
By order of the Board of Governors, effective
March 4, 1977.
V otin g for this action: G overn ors W allich , C o ld w e ll,
Jack son , and L illy . A b sen t and not voting: Chairm an
Burns and G overn ors G ardner and P artee.
(Signed)
[s e a l ]
G
r if f it h
L.
G
arw ood,
D ep u ty S e c re ta ry o f the B o a rd .
Trust Company of Georgia,
Atlanta, Georgia
O rd e r A p p ro v in g A c q u isitio n
o f G eo rg ia L o a n a n d T ru st C om pan y
Trust Company of Georgia, Atlanta, Georgia,
a bank holding company within the meaning of
the Bank Holding Company Act, has applied for
the Board’s approval, under section 4(c)(8) of the
Act [12 U.S.C. § 1843(c)(8)] and section
225.4(b)(2) of the Board’s Regulation Y [12 CFR
§ 225.4(b)(2) (1976)], to acquire through its
wholly-owned subsidiary, Adair Mortgage Com
pany, Atlanta, Georgia ( “ Adair” ) ,1 loan servicing
contracts and certain other assets (primarily shares
of Federal National Mortgage Association) of
Georgia Loan and Trust Company, Macon, Geor
gia ( “ GL&T” ), a company that engages in the
general business of mortgage banking.2 Such ac
tivity has been determined by the Board to be
closely related to banking [12 CFR § 225.4(a)(3)
(1976)].
Notice of the application, affording opportunity
for interested persons to submit comments and
views on the public interest factors, has been duly
published [41 F ed era l R e g iste r 54542 (1976)].
The time for filing comments and views has ex
pired, and the Board has considered the application
and all comments received in the light of the public
interest factors set forth in section 4(c)(8) of the
Act [12 U .S.C. § 1843(c)(8)].
Applicant, the third largest banking organization
*In a related m atter, the Board today approved A pplicant’s
application filed pursuant to section 4(c)(8) of the Act to acquire
direct ownership of Adair from a wholly-owned subsidiary of
A pplicant’s lead bank; to engage de novo, through Adair in
mortgage banking activities in College Park, Georgia; and to
relocate A dair’s main office from Atlanta to Cobb County,
Georgia.
2It is G L & T ’s intention to sell all of its m arketable assets
and to cease its operations as a m ortgage company. However,
GL&T will continue its insurance agency activities.
422
Federal Reserve Bulletin □ April 1977
in Georgia, directly controls Trust Company Bank,
Atlanta, Georgia (deposits of $796 million), and,
through that bank’s wholly-owned subsidiary,
Trust Company of Georgia Associates, Atlanta,
Georgia, indirectly controls five other banks (ag
gregate deposits of $400 million).3 The aggregate
deposits of Applicant’s six subsidiary banks rep
resent approximately 10 per cent of the total de
posits in commercial banks in the State. Through
its banking subsidiaries, Applicant engages in res
idential mortgage lending as a part of its commer
cial banking business. Applicant, through Adair,
also engages in mortgage banking activities.
GL&T engages in the general business of mort
gage banking, including originating, warehousing,
servicing, and selling mortgage loans.4 GL&T
currently operates in Macon from its only office5
and competes with Applicant in a regional market
for the servicing of mortgage loans. As of August
31, 1976, GL&T was servicing 5,025 loans with
outstanding principal balances totalling approxi
mately $64 million. As of the same date, Applicant
was servicing mortgage loans with outstanding
principal balances totalling approximately $281
million.6 Although GL&T and Adair compete in
the regional market for mortgage servicing busi
ness, Adair’s total servicing portfolio is a very
small fraction of that area’s mortgage servicing
while GL&T’s total servicing portfolio is an even
smaller fraction. Therefore, it does not appear that
any significant existing competition would be
eliminated as a result of the consummation of this
proposal.
The possibility of competition developing in the
future between Adair and GL&T would be elimi
nated by consummation of this proposal. How
ever, such adverse competitive effects are miti
gated by the large number of competitors in the
relevant regional market, which includes nu
merous mortgage banking companies, savings and
loan associations, and commercial banking orga
nizations. In addition, GL&T has recently experi
enced financial adversities and would not be likely
to continue as a competitor in the field of mortgage
servicing. Therefore, the Board concludes that
consummation of this proposal would not have
significant adverse effects upon future competition.
It is the Board’s judgment that the benefits that
can reasonably be expected to result from this
proposal lend some weight toward approval of the
application. There is no evidence in the record
indicating that consummation of the proposed
transaction would result in any undue concentra
tion of resources, unfair competition, conflicts of
interests, unsound banking practices, or material
adverse effects upon the public interest.
Based upon the foregoing and other consid
erations reflected in the record, the Board has
determined that the balance of the public interest
factors the Board is required to consider under
section 4(c)(8) is favorable. Accordingly, the ap
plication is hereby approved. The determination
is subject to the conditions set forth in section
225.4(c) of Regulation Y and to the Board’s au
thority to require such modification or termination
of the activities of a bank holding company or
any of its subsidiaries as the Board finds necessary
to assure compliance with the provisions and pur
poses of the Act and the Board’s regulations and
orders issued thereunder, or to prevent evasion
thereof.
The transaction shall be made not later than
three months after the effective date of this Order,
unless such period is extended for good cause by
the Board or by the Federal Reserve Bank of
Atlanta, pursuant to authority hereby delegated.
By order of the Board of Governors, effective
March 4, 1977.
V otin g for this action: G overn ors W a llich , C o ld w e ll,
and L illy . V otin g against this action: G overnor Jackson.
A b sent and not voting: Chairm an Burns and G overnors
Gardner and Partee.
(Signed)
[s e a l ]
G
r if f it h
L.
G
arw ood
,
D e p u ty S e c re ta ry o f the B o a rd .
3All banking data are as of December 31, 1975, unless
otherwise indicated. In addition to its six subsidiary banks,
Applicant received the B oard’s approval on December 7, 1976,
to acquire Security National Bank, Sm yrna, Georgia (deposits
of $17.4 million). [See 41 F ederal R eg iste r 54541 (1976);
1977 Federal Reserve B u l l e t i n 77 (January).] Also, on Jan
uary 3, 1977, Applicant received the B oard’s approval to
acquire, through m erger, Central Bankshares Corporation,
Jonesboro, Georgia, that firm’s sole subsidiary bank (deposits
of $13.7 m illion), and two non-banking activities. [See 42
F ederal R eg iste r 2354 (1977); 1977 Federal Reserve B u l l e t i n
161 (February).]
4GL&T also operates a property and casualty insurance
agency; however, GL&T intends to retain this portion of its
activities.
5A second office, located in Atlanta, engaged in originations
of mortgage loans; however, it has been closed because of
financial considerations.
6Adair accounted for $262 million.
Law Department
423
ORDERS APPROVED UNDER BANK HOLDING COMPANY ACT
By
the
B oard
of
G overnors
During March 1977, the Board of Governors approved the applications listed below. The orders
have been published in the Federal Register, and copies are available upon request to Publications
Services, Division of Administration Services, Board of Governors of the Federal Reserve System,
Washington, D.C. 20551.
Section 3
B a n k (s)
A p p lic a n t
Cresco National
Bank, Cresco,
Iowa
East Dallas Bank,
Dallas, Texas
Associated Bank
Corporation, Mason
City, Iowa
First City Bancorpor
ation of Texas, Inc.,
Houston, Texas
Page Bank Holding
Company, Page,
North Dakota
Texas Commerce Banc
shares, Inc., Houston,
Texas
Page State Bank,
Page, North Dakota
Southern Bank and
Trust Company,
Garland, Texas
B o a rd action
(effective
d a te )
F ed era l
R e g iste r
citation
3/21/77
42 F.R. 16479
3/28/77
3/7/77
42 F.R. 13865
3/14/77
3/2/77
42 F.R. 13155
3/9/77
3/31/77
42 F.R. 18450
4/7/77
Sections 3 and 4
B a n k (s)
A p p lic a n t
Kruse Insurance
Agency, Inc.,
Mineola, Iowa
B y F ederal R
eserve
Mineola State
Bank, Mineola,
Iowa
N on ban kin g
com pan y
(o r a ctivity)
Credit
life and
accident
insurance
B o a rd
action
(effective
d a te )
3/18/77
F ed era l
R e g iste r
citation
42 F.R. 15967
3/24/77
B anks
During February and March 1977, applications were approved by the Federal Reserve Banks as
listed below. The orders were published in the Federal Register, and copies are available upon request
to the Reserve Banks.
424
Federal Reserve Bulletin □ April 1977
Section 3
A pplican t
TNB Financial
Corporation,
Springfield,
Massachusetts
Trust Company
of Georgia,
Atlanta,
Georgia
Bancorporation
of Wisconsin,
West Allis,
Wisconsin
Marshall &
Ilsley Corpora
tion, Milwaukee,
Wisconsin
Spencer Financial
Corporation,
Spencer, Iowa
Farmers Bancshares,
Inc., Hardinsburg,
Kentucky
Fort Sam Houston
Bankshares, Inc.,
San Antonio,
Texas
Bank(s)
First Nation
al Bank of
Athol, Athol,
Massachusetts
The First Na
tional Bank
of Albany,
Albany, Georgia
West Allis
State Bank,
West Allis,
Wisconsin,
and South
west Bank,
New Berlin,
Wisconsin
Fox Heights
State Bank,
Green Bay,
Wisconsin
Spencer Nation
al Bank,
Spencer, Iowa
The Farmers
Bank, Hardins
burg, Kentucky
Northern Hills
Bank of San
Antonio, San
Antonio, Texas
Federal
R egister
citation
R eserve
Bank
Effective
date
Boston
2/2/71
42 F.R. 8708
2/11/77
Atlanta
3/16/77
42 F.R. 16673
3/29/77
Chicago
2/24/77
42 F.R. 13354
3/10/77
Chicago
3/11/77
42 F.R. 15466
3/22/77
Chicago
3/7/77
42 F.R. 14921
3/17/77
St. Louis
3/2/77
42 F.R. 14170
3/13/77
Dallas
2/2/77
42 F.R. 8708
2/11/77
PENDING CASES INVOLVING THE BOARD OF GOVERNORS*
First Security Corporation v. B oard of G over
nors , filed March 1977, U.S.C.A. for the
Tenth Circuit.
Farmers State Bank of Crosby v. B oard of
G overnors , filed January 1977, U.S.C.A. for
the Eighth Circuit.
N ational A utom obile D ealers A ssociation, Inc.
v. B oard of G overnors, filed November 1976,
U.S.C.A. for the District of Columbia.
First Security C orporation v. B oard of G over
nors , filed August 1976, U.S.C.A. for the
Tenth Circuit.
First State Bank of Clute, Texas , e ta l. v. Board
of Governors, filed July 1976, U.S.C.A. for
the Fifth Circuit.
North Lawndale Econom ic D evelopm ent C or
poration v. B oard of G overnors , filed June
1976,
U.S.C.A. for the Seventh Circuit.
Central W isconsin Bankshares , Inc. v. B oard
of G overnors, filed June 1976, U.S.C.A. for
*This list of pending cases does not include suits against
the Federal Reserve Banks in which the Board of Governors
is not named a party.
the Seventh Circuit.
N ational Urban League, et al. v. Office of the
C om ptroller of the Currency, et a l., filed
Law Department
April 1976, U.S.D.C. for the District of
Columbia Circuit.
Farmers & M erchants Bank of L as Cruces,
N ew M exico v. B oard of G overnors, filed
April 1976, U.S.C.A. for the District of
Columbia Circuit.
G randview Bank & Trust Com pany v. B oard
of G overnors , filed March 1976, U.S.C.A.
for the Eighth Circuit.
A ssociation of Bank Travel B ureaus, Inc. v.
B oard of G overnors, filed February 1976,
U.S.C.A. for the Seventh Circuit.
M em phis Trust Com pany v. B oard of G over
nors, filed February 1976, U.S.D.C. for the
Western District of Tennessee.
First Lincolnw ood Corporation v. B oard of
G overnors , filed February 1976, U.S.C.A.
for the Seventh Circuit.
R oberts Farms, Inc. v. C om ptroller of the Cur
rency , et a l., filed November 1975, U.S.D.C.
for the Southern District of California.
N ational Com puter A n alysts, Inc. v. Decimus
C orporation, ef a/., filed November 1975,
U.S.D.C. for the District of New Jersey.
Florida A ssociation of Insurance A gen ts, Inc.
v. B oard of G overnors, and N ational A sso
ciation of Insurance A gen ts, Inc. v. B oard
of G overnors , filed August 1975, actions
425
consolidated in U.S.C.A. for the Fifth Cir
cuit.
t tD a v id R . M errill , era/, v. Federal Open M arket
Com mittee of the Federal R eserve System,
filed May 1975, U.S.D.C. for the District of
Columbia, appeal pending, U.S.D.A. for the
District of Columbia.
L ouis J. R oussel v. B oard of G overnors, filed
April 1975, U.S.D.C. for the Eastern District
of Louisiana.
G eorgia A ssociation of Insurance A gents, et al.
v. B oard of G overnors, filed October 1974,
U.S.C.A. for the Fifth Circuit.
A labam a A ssociation of Insurance A g en ts , et
al. v. B oard o f G overnors, filed July 1974,
U.S.C.A. for the Fifth Circuit,
t Consumers Union of the United States, Inc., et
al. v. B oard of G overnors, filed September
1973, U.S.D.C. for the Distruct of Columbia.
Bankers Trust o f N ew York C orporation v.
B oard of G overnors , filed May 1973,
U.S.C.A. for the Second Circuit.
tD ecisions have been handed down in these cases, subject
to appeals noted.
$The Board of Governors is not nam ed as a party in this
action.
426
Announcements
REGULATION Q: Amendment
The Board of Governors of the Federal Reserve
System announced on April 7, 1977, that it was
establishing a new category of time deposit ac
counts to benefit individuals saving for their re
tirement.
The Board’s action amended Regulation Q (In
terest on Deposits) to create a category of deposits
under which member banks could pay maximum
interest rates for consumer-type time deposits to
savers in individual retirement accounts1 and
Keogh plan2 retirement accounts.
The main features of the new class of retirement
savings deposits are as follows:
1. It will become effective after 90 days (July
6, 1977).
2. Member banks may pay interest on IRA and
Keogh plan time deposits at a rate of interest equal
to the highest rate permissible under Regulation
Q, for time deposits of any maturity or denomi
nation under $100,000, by a Federally insured
commercial bank, mutual savings bank, or savings
and loan association. The rate is presently 7.75
per cent.
3. No minimum denomination will be required
for this class of deposit.
4. A maturity of 3 years or more will be re
quired.
5. However, as with other types of IRA or
Keogh accounts, withdrawals may be made before
maturity without penalty for early withdrawal if
the depositor reaches age 5 9 ^ , or is disabled.
6. Member banks may modify existing IRA or
Keogh plan agreements to permit retirement savers
to take advantage of this new rule.
xT h e E m p lo y ee R etirem en t In com e S ecu rity A ct of
1974 (E R ISA ) perm its in d ivid u als not co v ered b y a
retirem ent plan to d ep osit in in d ivid u al retirem ent a c
cou n ts (IR A ’s) for retirem ent p u rp oses, tax-deferred
contributions up to $ 1 ,5 0 0 a year, or 15 per cent of
gross in co m e, w h ich ev er is le s s.
2K eo g h (H .R . 10) plan accou n ts w ere authorized
under the S elf-E m p lo y ed In d ivid u als T ax R etirem ent
A ct o f 19 6 2 . T h e act currently perm its a se lf-em p lo y ed
person to d ep o sit in a K eo g h plan accou n t tax-deferred
con trib ution s up to $ 7 ,5 0 0 a year, or 15 per cen t of
gross in c o m e , w h ich ev er is le ss.
Retirement savers may elect to use other types
of time deposits for their IRA or Keogh plan funds,
such as ordinary savings accounts or time deposits
with maturities of less than 3 years. In such cases,
the accounts will be subject to the existing ceiling
rates of interest prescribed by Regulation Q.
In taking its action the Board noted a congres
sional report indicating that about half of all em
ployees in private employment are not covered by
retirement plans.
The Board estimated that for retirement savers
contributing the maximum yearly amount under
a Keogh plan at a member bank for 30 years, the
higher interest allowable under the new category
could increase retirement savings by up to $50,000
and that the increase for participants under IRA’s
could be up to $10,000. At present, Regulation
Q permits thrift institutions to pay lA of a per cent
more interest on such deposits than commercial
banks may pay.
“ Such a penalty for choosing deposits at a
particular type of institution is clearly inconsistent
with the objectives of maximizing the total amount
of earnings on retirement savings that the Congress
sought to encourage through establishment of IRA
and Keogh programs,” according to the Board’s
announcement.
The announcement noted that issues relating to
the creation of a new deposit category for IRA
or Keogh funds have been the subject of substan
tial public comment for nearly 2 years.
In June 1975 the Board requested public com
ment on a number of questions relating to IRA’s,
including the questions whether the existing
schedule of interest rate ceilings that can be paid
on IRA deposits should be increased and whether
member banks should be permitted to pay interest
on IRA deposits at rates equal to those that may
be paid by savings and loan associations and
mutual savings banks. In July 1976 the Board
announced that it was of the view that IRA parti
cipants should be permitted to obtain the highest
rate of interest permissible on their retirement
savings regardless of where the funds are main
tained. It was anticipated that further action by
the Board to permit member banks to offer IRA’s
on a fully competitive basis would be appropriate
Announcements
in early 1977. “ Accordingly,” the Board said,
“ the public has had ample opportunity to comment
on the issues relevant to the Board’s action estab
lishing a special category of deposit for IRA’s and
Keogh’s .”
By adopting a final rule at this time, the Board
said, public uncertainty about IRA and Keogh
accounts will be removed and retirement savers
may begin immediately to plan their retirement
programs. The 90-day deferral of the effective date
gives member banks time to make operational and
other changes and will give them opportunity to
compete for IRA and Keogh deposits on an equal
basis.
The Board’s announcement pointed out that
preferred tax treatment was given to IRA’s to
encourage savings for retirement, and not to ex
tend a competitive advantage for a particular class
of financial institution.
A survey conducted by the Board indicated that
as of December 31, 1976, commercial banks had
obtained only 35 per cent of the IRA market while
accounting for 47 per cent of the total household
time and savings deposit market.
The Board’s action was taken at this time be
cause of a number of other reasons that it found
compelling, including the following:
1. A large number of people eligible to estab
lish IRA or Keogh accounts still have not done
so, owing in part, the Board believes, to lack of
advertising of such accounts by commercial banks
due to their noncompetitive position.
2. Making retirement savings accounts of equal
value at all depositories early in the year may avoid
substantially diminishing the number of people
who start retirement savings this year.
3. Banks and other financial institutions offer
ing IRA and Keogh plan accounts will require a
substantial amount of lead time to develop mar
keting plans that can be put into effect sufficiently
in advance of year-end to be useful.
By previous action the Board had made IRA
and Keogh plan deposits subject to the same rules
under Regulation Q.
CONSUMER COMPLIANCE
AND EDUCATION PROGRAM
The Board of Governors on March 30, 1977,
announced the establishment of a Systemwide
program designed to improve compliance by
member banks with consumer credit protection
laws and regulations.
The program entitled “ Consumer Compliance
427
and Education Program of the Board of Governors
of the Federal Reserve System” has two main
parts:
1. A program designed to educate all member
banks, both State and national, in the requirements
of consumer credit protection laws.
2. A companion program to conduct special
examinations of State member banks to assess
compliance with consumer laws by examiners
especially trained for that purpose.
The following procedures will be followed at
State member banks:
Examiners who find what they regard as evi
dence of discrimination in credit transactions will
report all findings to the appropriate Reserve Bank.
The Reserve Bank, in consultation with the
Board’s Division of Consumer Affairs, will deter
mine whether additional investigation is needed,
and what if any corrective measures are appro
priate .
In the event of overcharges, the bank will gen
erally be required to reimburse customers for the
amount of the overcharge. Customers will be given
an explanation of the overcharge for which resti
tution is required.
In other cases of violations, State member banks
will be instructed to make prompt correction of
their policies, practices, procedures, or forms to
avoid similar future violations.
In all cases of violations, the examiner’s find
ings will be made known to the bank’s board of
directors.
The special examinations will assess compliance
with the following laws and regulations for which
the Board has enforcement responsibilities with
respect to State member banks:
Fair Credit Reporting Act
Fair Housing Act
Real Estate Settlement Procedures Act
Regulation B (Equal Credit Opportunity
Act)
Regulation C (Home Mortgage Disclosure
Act)
Regulation Z (Truth in Lending, Fair Credit
Billing, and Consumer Leasing acts)
Regulation A A (Unfair or Deceptive Acts
or Practices by banks, and handling of
consumer complaints)
Regulation H (Provisions related to national
flood insurance)
Regulation Q (Interest on Deposits)
Any new consumer laws or regulations affecting
State member banks for which the Board is given
enforcement authority will be incorporated into the
special consumer affairs compliance examinations.
The special examinations are to be uniform
among all Federal Reserve Banks.
428
Federal Reserve Bulletin □ April 1977
T h e E d u c a t io n P r o g r a m
The Board has directed each Federal Reserve Bank
to establish an educational and advisory service
for all member banks (including national banks).
To carry out this program, each Reserve Bank will
be prepared to send a specialist to any member
bank that requests such a service.
The purpose of the visits is to assist member
bankers to develop appropriate policies, proce
dures, and forms in the consumer credit protection
area, and to answer questions of bank personnel
regarding the consumer credit protection laws and
regulations, and compliance with them.
These specialists, in most cases, will receive
special training through attendance at consumer
affairs schools at the Federal Reserve Board.
T h e S p e c ia l E x a m in a t io n P r o g r a m
Aspects of this program not already cited are as
follows:
1. The program will begin with a test period
running through the end of 1978, after which the
results will be evaluated and any indicated changes
will be made.
2. Each Federal Reserve Bank will conduct a
special examination of every State member bank
in its district once within the next 12 months
(through the end of March 1978). Additional ex
aminations will be made in the remaining 9 months
of the test period if the results of the first special
examination indicate that a follow-up examination
is needed.
3. Whenever possible, compliance examiners
will be selected from the System’s commercial
bank examination force. They will be given special
training, including attendance at consumer affairs
schools conducted at the Board to educate exam
iners in consumer credit protection law require
ments. Special compliance examiners not drawn
from the commercial examiner force will have
training also in commercial examination.
4. Generally, compliance examinations will be
conducted concurrently with commercial exami
nations, but the Reserve Banks may make excep
tions in certain circumstances.
5. Manuals explaining the laws and regulations
cited above have been developed and will be used
by the compliance examiners.
6. Compliance examiners will be provided with
special checklists to help make their examinations
efficient and comprehensive.
7. The compliance examiners will make use of
special instructions in connection with sampling
of loan files, reporting of violations and correction
of violations, reimbursement of overcharges, and
rating of banks for compliance with the consumer
credit protection laws and regulations listed above.
These instructions include directions for actions
to be taken in the various types of violations noted
above (violations involving overcharges, discrim
inations, and other types of violations).
8. A special examination report to incorporate
compliance examiners’ findings has been devel
oped, including pages for each consumer law and
regulation covered by the compliance examination
program. A copy of this report is to be transmitted
to the board of directors of the State member bank
examined, with a copy to the Federal Reserve
Board’s Division of Consumer Affairs. A report
summary form has also been developed to be sent
to the Board’s Division of Consumer Affairs.
REGULATION Z: Amendments
The Board of Governors on April 12, 1977,
amended its Regulation Z (Truth in Lending) to
require advance disclosure of any variable rate
clause in a credit contract that may result in an
increase in the cost of the credit to the customer.
The new rule will become effective October 10,
1977.
The amendment adopted was substantially sim
ilar to a proposal issued by the Board for public
comment last October.
The main requirements of the new rule include
disclosure of the following:
1. The fact that the annual percentage rate on
the transaction is subject to increase. (The October
proposal would have applied to all situations in
which the annual percentage rate was subject either
to an increase or decrease.)
2. The conditions under which the rate may
increase, including identification of any index to
which the rate is tied, and any limitation on the
increase.
3. The manner in which an increase may be
effected, including an increase in payment
amounts, a change in the number of scheduled
payments, or an increase in the amount due at
maturity.
4. Numerical examples— in the case of home
mortgage transactions only— based on a hypo
thetical immediate increase of lA of a percentage
Announcements
point in the annual percentage rate, effected
through a change in the number of scheduled
payments, or an increase in the amount of those
payments.
The requirement for numerical examples for
residential mortgages applies to transactions in
which a security interest is taken in real property
used or expected to be used as the customer’s
dwelling and need not be made in transactions
primarily for agricultural purposes.
The Board of Governors has also amended
Regulation Z to permit— but not require— disclo
sures called for by the Truth in Lending Act and
Regulation Z to be made in Spanish in Puerto
Rico. At the customer’s request disclosures must
be provided in English.
REGULATION H: Amendments
The Board of Governors on April 13, 1977, an
nounced adoption of four technical amendments
to the flood insurance provisions of its Regulation
H (Membership of State Banking Institutions in
the Federal Reserve System) to make the regula
tion conform to recent changes in the Flood Dis
aster Protection Act of 1973 (“ Flood Act” ).
Regulation H now provides, pursuant to the
Flood Act, that State member banks may not
make, increase, extend, or renew loans on prop
erty located in areas identified by the Department
of Housing and Urban Development (HUD) as a
flood-hazard area, unless the property is covered
by Federally subsidized flood insurance.
The technical amendments to Regulation H
adopted by the Board exempt from the flood in
surance requirements of the regulation the follow
ing:
1. Loans secured by a dwelling occupied as a
residence before March 1, 1976.
2. Loans on an office or other building of a
small business occupied before January 1, 1976,
up to a dollar limit to be established by the
Secretary of HUD. The Secretary has proposed
a $100,000 ceiling.
3. Improvement or rehabilitation loans on resi
dences occupied before January 1, 1976, when
such loans do not exceed $5,000.
4. Loans to finance nonresidential additions or
improvements on a farm, up to a dollar limit to
be established by the Secretary of HUD. The
Secretary has proposed a $25,000 ceiling.
429
INTERPRETATIONS
The Board of Governors on March 31, 1977,
adopted three interpretations intended to clarify
certain aspects of its consumer credit protection
regulations.
The Board adopted an interpretation of Regula
tion Z (Truth in Lending) stating that the amount
of a dealer’s participation in the finance charge
on the credit purchase of an automobile or other
durable goods need not be disclosed as a separate
part of the finance charge. At the same time, the
Board withdrew a proposal that would have re
quired disclosure of the fact but not the amount
of a dealer’s participation. The Board took these
actions because it did not feel that disclosure of
a dealer participation in a finance charge would
significantly benefit consumers in shopping for
credit.
At the same time, the Board adopted two tech
nical interpretations of its Regulation C (Home
Mortgage Disclosure). The Home Mortgage Dis
closure Act and Regulation C require depositary
institutions with offices in metropolitan areas to
disclose publicly the geographic area where they
are making their residential mortgage loans.
The first technical interpretation permits a de
positary institution subject to the act that is major
ity owned by another depository to disclose its
mortgage loan data separately from that of the
parent.
The second technical interpretation of Regula
tion C clarifies the disclosures that must be made
by depositories that were exempt from the provi
sions of the act, but lose their exemption. A
depository is exempt if (1) it does not have an
office in a standard metropolitan statistical area
(SMSA), (2) it does not have assets on the last
day of its fiscal year of $10 million or more, or
(3) it is a State-chartered institution subject to a
State disclosure law that the Board has determined
imposes disclosure requirements substantially
similar to those of the Home Mortgage Disclosure
Act. The Board’s interpretation makes it clear that
previously exempt institutions that become subject
to the act (by extension of an SMSA to cover one
or more of its offices or by growth of its assets)
may report on their mortgage lending during their
last full fiscal year by Postal ZIP code areas and
thereafter by Census Bureau census tracts. This
is the same treatment accorded depositories in the
first year after Regulation C became effective (June
28, 1976).
430
Federal Reserve Bulletin □ April 1977
REGULATION Q:
Proposed Amendment Not Adopted
The Board of Governors on April 1, 1977, an
nounced that it had determined not to adopt at this
time a regulatory proposal to prohibit member
banks from paying interest on pooled time deposits
of $100,000 or more at a rate above Regulation
Q ceilings.
In deciding not to adopt the proposed amend
ment— issued by the Board in March 1976— the
Board noted that in February the Federal Deposit
Insurance Corporation limited the amount of Fed
eral deposit insurance coverage for certain pooled
deposits to $40,000 in any one bank. The Board
said it believed the FDIC action may minimize
the potential for disruptive shifts of funds among
depositary institutions as a result of pooling.
PROPOSED AMENDMENT AND
INTERPRETATION
The Board of Governors proposed on April 13,
1977, an amendment to Regulation H (Member
ship of State Banking Institutions in the Federal
Reserve System) that generally would prohibit
State member banks from purchasing loans on
improved real estate or mobile homes located in
a flood-hazard area if the property is not covered
by flood insurance. The Board will receive com
ment through May 20, 1977.
The Board of Governors also on April 13, 1977,
proposed an interpretation of Regulation Z (Truth
in Lending) affecting credit-card issuers that bill
customers in full on a transaction-by-transaction
basis and impose no finance charges. The Board
will receive comment through May 16, 1977.
search Division Officer, in the Division of Re
search and Statistics, effective March 27, 1977.
Robert A. Eisenbeis has been appointed Asso
ciate Research Division Officer in the Division of
Research and Statistics, effective March 27, 1977.
Mr. Eisenbeis joined the Board’s staff first in 1967,
went to the Federal Deposit Insurance Corporation
in 1968, and returned to the Board in July 1976.
He holds an A.B. from Brown University, and
M.A. and Ph.D. degrees from the University of
Wisconsin.
Joseph S. Sims, Washington Information Man
ager for the U.S. League of Savings Associations,
has been appointed Special Assistant to the Board,
effective April 18, 1977. Prior to his association
with the U .S. League of Savings Associations,
Mr. Sims served as a free-lance writer in Brazil,
Deputy Director of Public Affairs for the Federal
Home Loan Bank Board, and Manager, Public
Relations, for Pan American World Airways in
Brazil. He holds an A.B. from Indiana University.
The Board has also announced the retirement
of Brenton C. Leavitt, Director of the Division
of Banking Supervision and Regulation, on March
31, 1977.
NEW BANK PRESIDENT
The Federal Reserve Bank of Minneapolis has
announced that Mark H. Willes has been appointed
as President of the Bank to succeed Bruce MacLaury, who resigned in February.
Mr. Willes, formerly First Vice President of the
Federal Reserve Bank of Philadelphia, began his
service at Minneapolis on April 16, 1977.
NEW PAMPHLET:
Fair Credit Billing
CHANGES IN BOARD STAFF
The Board of Governors has announced the fol
lowing official staff actions:
Charles J. Siegman has been promoted from
Associate International Division Officer to Senior
International Division Officer, in the Division of
International Finance, effective March 27, 1977.
James R. Wetzel has been promoted from As
sociate Research Division Officer to Senior Re
The Board of Governors has issued a consumer
pamphlet on Fair C redit Billing. It explains how
a billing dispute may be resolved in a way that
protects an individual’s credit rating.
For copies of the pamphlet, or for answers to
questions about Fair Credit Billing, write to any
Federal Reserve Bank or to the Board of Gover
nors of the Federal Reserve System, Washington,
D.C. 20551.
Announcements
431
BOARD PUBLICATIONS:
Two Price Changes
SYSTEM MEMBERSHIP:
Admission of State Banks
The Board of Governors has approved distribution
of the System book— The F ed era l R e se rv e S ystem :
P u rp o ses and F unctions— as a free publication. On
April 12, 1977, the Board removed the $1.00
charge that has applied to the book’s sixth edition
since it was first issued in September 1974.
Also approved was an increase from $2.50 to
$7.50 in the charge for P u b lish ed In terp reta tio n s
The following State banks were admitted to mem
bership in the Federal Reserve System during the
period between March 16, 1977, through April 15,
1977:
o f the B o a rd o f G o vern o rs o f the F ed era l R e se rv e
S y ste m , effective May 1, 1977. This, the first price
change since the compilation was originally pub
lished in 1961, represents increases in production
and mailing costs.
C aliforn ia
San Rafael ...................... Independent Bankers
Trust Company
C o lo ra d o
Colorado Springs.......Garden of the Gods Bank
South C a ro lin a
Marion ...................... Colonial State Bank Inc.
W yom in g
Edgerton
............................Citizens State Bank
432
Industrial Production
steel rose sharply; among nondurable goods mate
rials, large gains occurred for textiles and paper.
R e le a se d fo r p u b lic a tio n A p r il 14
Industrial production in March increased by an
estimated 1.4 per cent to 135.1 per cent of the
1967 average, following the 1.0 per cent gain in
February. In March, gains in output were wide
spread among consumer goods, business equip
ment, construction supplies, and materials; but
production by utilities declined appreciably. About
one-third of the advance in total output reflected
a stepped-up pace of motor vehicle production.
March output of factories, mines, and utilities was
20.9 per cent above the recession low 2 years
earlier and about 2.5 per cent above the pre-reces
sion high in June 1974.
Output of durable consumer goods increased 5.7
per cent in March, with auto assemblies up 21
per cent to an annual rate of 9.9 million units.
Announced schedules for auto assemblies indicate
an annual rate for April of 9.4 million units.
Output of nondurable consumer goods rose
slightly. Production of business equipment in
creased 1.5 per cent.
Output of materials in March rose by 1.1 per
cent. Production gains were widespread in both
durable goods and nondurable goods materials.
Among durable goods materials, output of iron and
Seasonally adjusted, ratio scale, 1967=100
F.R. indexes, seasonally adjusted. Latest figures: M arch.
*A uto sales and stocks include imports.
Seasonally adjusted, 1967 = 100
Per cent changes from—
Industrial production
1977
1976
Dec.
Jan.
F eb . p
Mar. e
Month ago
....................................
133.1
132.0
133.3
135.1
Products, total ............................
Final products .........................
Consumer goods ................
Durable goods ..............
Nondurable goods .......
Business equipm ent .........
Interm ediate products ...........
Construction supplies .......
Materials .......................................
133.8
132.1
142.0
151.2
138.4
143.2
139.8
135.5
131.9
133.0
130.8
140.1
145.1
138.1
142.0
141.3
135.4
130.5
133.7
131.5
140.9
145.5
139.0
142.9
141.9
135.6
132.5
135.7
133.7
143.4
153.8
139.2
145.1
142.8
137.2
134.0
T o tal
P relim in ary .
^Estimated.
Year ago
Q4 to Q l
1.4
5.5
1.3
1.5
1.7
1.8
5.7
.1
1.5
.6
1.2
1.1
5.9
5.8
5.4
9.5
3.6
8.3
5.9
6.6
4.5
1.8
1.7
1.6
2.3
1.2
2.5
2.2
.7
.4
A 1
Financial and Business Statistics
CONTENTS
DOMESTIC FINANCIAL STATISTICS
A3
A4
A5
A6
M o n eta ry a g g r eg a te s and in terest rates
F actors a ffec tin g m em b er ban k r eser v es
R e se r v e s and b o r r o w in g s o f m em b er
b an k s
F ed eral fu n d s tran saction s o f m o n e y
m arket ban ks
W
eek ly
A 20
A 21
A 22
A 23
A 24
A 25
P o l ic y I n s t r u m e n t s
A8
F ed eral R e se r v e B an k in terest rates
A9
M em b er bank reserv e req u irem en ts
A 10 M a x im u m in terest rates p a y a b le on
tim e and sa v in g s d e p o s its at F ed er a lly
in su red in stitu tio n s
A 11 F ed eral R e se r v e o p e n m arket
tran saction s
A 25
A 26
A 26
A 27
C o n d itio n and F .R . n o te sta tem en ts
M aturity d istrib u tion o f lo a n and
secu rity h o ld in g s
A 28
A 29
M onetary
and
C r e d it A g g r e g a t e s
A 13
A s se ts and L ia b ilitie s o f —
A ll rep ortin g b an k s
B a n k s in N e w Y ork C ity
B a n k s o u tsid e N e w Y ork C ity
B a la n c e sh e e t m em oran d a
C o m m e rc ia l and ind ustrial lo a n s
G ro ss d em a n d d e p o s its o f in d iv id u a ls ,
p artn ersh ip s, and co rp o ra tio n s
F in a n c ia l M a rk ets
F ed er a l R eserv e B a n k s
A 12
A 13
R e p o r t in g C o m m e r c ia l B a n k s
C o m m e rc ia l pap er and b an kers
a c c e p ta n c e s ou tsta n d in g
P rim e rate c h a rg ed b y b an k s on
sh ort-term b u sin e ss lo a n s
In terest rates c h a r g ed b y b an k s o n
b u sin e ss lo a n s
In terest rates in m o n e y and cap ital
m arkets
S to c k m arket— S e le c te d sta tistic s
S a v in g s in stitu tio n s— S e le c te d a sse ts
and lia b ilitie s
D e m a n d d e p o s it a c c o u n ts— D e b its and
rate or turnover
A 14 M o n e y sto c k m e a su r es and c o m p o n e n ts
A 1 5 A g g r e g a te r eser v es and d e p o s its o f
m e m b er b an k s
A 1 5 L o a n s and in v e stm e n ts o f all
c o m m e r c ia l b an k s
A 30
A 31
A 32
F ed eral fiscal and fin a n cin g o p era tio n s
U.S. B u d g e t r ec eip ts and o u tla y s
F ed eral d eb t su b ject to statu tory
lim ita tio n
A 32
C o m m e r c ia l B a n k A sse t s
A 33
G ro ss p u b lic d eb t o f U.S. T reasu ry—
T y p e s and o w n e r sh ip
U.S. G o v er n m e n t m ark etab le
se c u r itie s— O w n e r sh ip , b y m aturity
U.S. G o v er n m e n t se c u r itie s d e a ler s—
T r a n sa c tio n s, p o s itio n s , and fin a n cin g
and
L ia b il it ie s
A 16 L a st-W e d n e s d a y -o f-m o n th se ries
A 17 C a ll-d a te se r ie s
A 1 8 D e ta ile d b a la n ce sh e e t, June 3 0 , 1 9 7 6
F e d e r a l F in a n c e
A 34
A 35
F ed eral and F ed er a lly sp o n so re d cred it
a g e n c ie s — D e b t ou tsta n d in g
A2
Federal Reserve Bulletin □ April 1977
S e c u r it ie s M
arkets a n d
C orpo rate
F in a n c e
A36 New security issues— State and local
government and corporate
A37 Corporate securities—Net change in
amounts outstanding
A37 Open-end investment companies—Net
sales and asset position
A3 8 Corporate profits and their distribution
A3 8 Nonfinancial corporations—Assets and
liabilities
A39 Business expenditures on new plant
and equipment
R eal E state
A40 Mortgage markets
A41 Mortgage debt outstanding
INTERNATIONAL STATISTICS
A54 U.S. international transactions—
Summary
A55 U.S. foreign trade
A55 U.S. reserve assets
A56 Selected U.S. liabilities to foreigners
and to foreign official institutions
R eported
A57
A59
A60
A61
by
B
Short-term
Long-term
Short-term
Long-term
a n k s in
A42 Total outstanding and net change
A43 Extensions and liquidations
Flow
of
Funds
A44 Funds raised in U.S. credit markets
A45 Direct and indirect sources of funds to
credit markets
DOMESTIC NONFINANCIAL STATISTICS
A46 Nonfinancial business activity—
Selected measures
A47 Output, capacity, and capacity
utilization
A47 Labor force, employment, and
unemployment
A48 Industrial production
A50 Housing and construction
A51 Consumer and wholesale prices
A52 Gross national product and income
A53 Personal income and saving
U
n it e d
Sta tes:
liabilities to foreigners
liabilities to foreigners
claims on foreigners
claims on foreigners
A62 Foreign branches of U.S. banks—
Balance sheet data
S e c u r it ie s H o l d in g s
C o n s u m e r In s t a l m e n t C r e d it
the
and
T r a n s a c t io n s
A64 Marketable U.S. Treasury bonds and
notes—Foreign holdings and
transactions
A64 Foreign official accounts
A65 Foreign transactions in securities
R epo rted
the
by
N
o n b a n k in g
Concerns
in
U n it e d S t a t e s :
A66 Short-term liabilities to and claims on
foreigners
A67 Long-term liabilities to and claims on
foreigners
In t e r e s t
and
E x c h a n g e R ates
A68 Discount rates of foreign central banks
A68 Foreign short-term interest rates
A68 Foreign exchange rates
A69 Guide to Tabular Presentation and
Statistical Releases
Domestic Financial Statistics
A3
1.10 MONETARY AGGREGATES AND INTEREST RATES
1977
1976
Item
Q2
Q3
Q4
Ql
1976
Nov.
1977
Dec.
Jan.
Feb.
Mar.
Monetary and credit aggregates
(annual rates of change, seasonally adjusted in per cent)1
Member bank reserves
0.6
1.1
0.4
2.7
2.4
2.6
4.4
4.0
4.8
11.8
10.5
12.6
4.9
4.3
5.6
10.9
11.3
10.4
-13.1
-10.9
-13.3
8.2
10.5
11.8
4.2
9.2
11.4
6.3
12.3
14.3
0.0
10.1
12.3
8.1
12.6
13.0
5.4
9.2
M l.3
0.8
6.8
8.6
Commercial banks:
T otal...........................................................................
Other than large C D ’s ............................................
Thrift institutions 2 .....................................................
5.4
12.4
13.7
7.3
13.0
14.8
11.8
16.8
17.3
15.3
17.6
15.6
16.1
15.6
M3.9
10.0
12.4
r 14.0
10.2
11.1
11.4
10 Total loans and investments at commercial banks 3
5.4
6.0
8.7
1
2
3
T otal...............................................................................
Required........................................................................
Nonborrowed...............................................................
Concepts of money 1
4
5
6
M - l.................................................................................
M -2.................................................................................
M -3.................................................................................
Time and savings deposits
7
8
9
Interest rates (levels, per cent per annum)
11
12
13
14
Short-term rates
Federal funds 4...................................................................
Treasury bills (3-month market yield) 5...........................
Commercial paper (90- to 119-day) 6...............................
Federal Reserve discount 7................................................
5.19
5.16
5.45
5.50
5.28
5.15
5.41
5.50
4.88
4.67
4.91
5.39
4.66
4.63
4.74
5.25
4.95
4.75
4.98
5.43
4.65
4.35
4.66
5.25
4.61
4.62
4.72
5.25
4.68
4.67
4.76
5.25
4.69
4.60
4.75
5.25
15
16
17
Long-term rates
Bonds:
U.S. Govt. 8....................................................................
Aaa utility (new issue) 9................................................
State and local government 10......................................
8.01
8.69
6.78
7.90
8.48
6.64
7.54
8.15
6.18
7.62
8.17
5.88
7.64
8.17
6.29
7.30
7.94
5.94
7.48
8.08
5.87
7.64
8.22
5.89
7.74
8.25
5.89
18
Conventional mortgages **...............................................
8.98
9.03
8.95
8.95
8.90
8.80
8.80
8.85
1 M-l equals currency plus private demand deposits adjusted.
M-2 equals M-l plus bank time and savings deposits other than large
CD’s.
M-3 equals M-2 plus deposits at mutual savings banks, savings and
loan associations, and credit union shares.
2 Savings and loan associations, mutual savings banks, and credit
unions.
3 Quarterly changes calculated from figures shown in Table 1.23.
4 Seven-day averages of daily effective rates (average of the rates on
a given date weighted by the volume of transactions at those rates).
5 Quoted on a bank-discount rate basis.
6 Most representative offering rate quoted by five dealers.
7 Rate for the Federal Reserve Bank of New York.
8 Market yields adjusted to a 20-year maturity by the U.S. Treasury.
9 Weighted averages of new publicly offered bonds rated Aaa, Aa, and
A by Moody’s Investors Service and adjusted to an Aaa basis. Federal
Reserve compilations.
10 Bond Buyer series for 20 issues of mixed quality.
11 Average rates on new commitments for conventional first mortgages
on new homes in primary markets, unweighted and rounded to nearest
5 basis points, from Dept, of Housing and Urban Development.
12 Unless otherwise noted, rates of change are calculated from average
amounts outstanding in preceding month or quarter.
A4
1.11
Domestic Financial Statistics □ April 1977
F A C T O R S A F F E C T IN G M E M B E R B A N K R E S E R V E S
Millions of dollars
Monthly averages of daily figures
1977
1976
Factor
End-of-month figures
1977
Sept.
Oct.
Nov.
Dec.
Jan.
Feb.
Mar.p
Jan.
Feb.
Mar.P
105,880
107,270
106,522
107,632
108,700
109,021
108,101
107,253
108,413
108,728
93,412
94,513
95,843
95,310
94.134
95,837
95,987
94,905
95,547
SUPPLYING RESERVE FUNDS
1 Reserve Bank credit outstanding.. . .
0
3
4
91,966
93,535
92,659
91,031
92,905
94,674
1,608
1,169
997
6,846
6,782
Bought outright.........................
Held under repurchase agree-
89,926
Federal agency securities,.............
6,831
68
82
44
111
92
59
32
Other Federal Reserve assets. . . .
447
75
2,880
3,681
323
66
2,763
3,744
326
84
3,094
3,511
457
62
3,536
3,249
413
61
3,514
3,315
330
79
2,899
3,024
11,598
11,598
11,598
11,598
11,638
703
10,737
1,123
10,778
1,200
10,826
1,200
10,865
1,200
10,897
89,863
442
90,312
482
91,988
458
93,730
464
Foreign...........................................
Other..............................................
8,270
249
1,071
9,199
266
1,012
6,709
259
947
6,138
306
974
20 Other F.R. liabilities and capital. . . .
21 Member bank reserves with F.R.
Banks.............................................
3,315
3,372
3,326
3,253
3,223
3,224
3,206
3,475
3,630
3,457
25,708
26,127
26,458
26,430
27,229
25,725
25,865
23,411
22,916
27,074
5
6
7
Bought outright.........................
Held under repurchase agree-
8
9
10
11
12 Gold stock.........................................
13 Special Drawing Rights certificate
14 Treasury currency outstanding........
2,040
6,763
91,886
91,527
1,649
1,132
2,381
6,839
6,848
6,916
6,757
6,804
6,805
94,313
94.134
932
440
6.790
6,844
6,785
77
54
289
111
2,848
2,761
191
47
2,482
3,609
322
24
2,595
2,791
280
270
2,547
2,859
11,658
11,646
11,658
11,650
11,636
1,200
10,930
1,200
10,966
1,200
10,865
1,200
10,884
1,200
10,990
92,582
461
91,753
499
92,831
494
91,164
502
91,697
506
93,415
471
7,850
269
820
10,698
294
616
8,577
271
669
11,397
383
642
12,179
362
856
7,150
349
637
6,884
6,792
6,787
6,750
6.790
6,767
6,731
ABSORBING RESERVE FUNDS
15
16
Deposits, other than member bank
reserves with F.R. Banks:
17
18
19
Weekly averages of daily figures for weeks ending—
Wednesday figures
1977
1977
Mar. 2
Mar. 9
Mar. 16 Mar. 23*> Mar. 30*> Mar. 2
Mar. 9
Mar. 16
Mar. 23*> Mar. 30p
SUPPLYING RESERVE FUNDS
109,068
22 Reserve Bank credit outstanding. . . .
110,353
106,909
105,067
110,049
109,386
110,136
105,929
103,964
115,106
23
24
25
U.S. Govt, securities *.....................
96,930
92.611
96,387
94,976
95,455
92.669
90.359
92.611
96,996
92.669
94.193
96,758
99,864
95,124
94.193
90.359
94,855
96,112
26
27
28
Federal agency securities ................
1,806
6,882
6,770
6.767
6.767
6.744
6.744
1,893
6,778
6,744
2,020
6,815
6,744
932
6,844
6,767
6.767
6.767
6,744
6,744
5,009
6,903
6,744
6.744
6.744
34
71
77
29
30
31
32
Acceptances...................................
Loans.............................................
Float..............................................
Other Federal Reserve assets. . . .
111
2 , 111
20
3,098
2,653
174
24
2,816
2,698
341
339
3,035
2,798
444
58
2,191
2,883
326
41
3,861
2,677
174
33
3,598
2,688
171
29
3,858
2,803
460
2,196
2,762
2,921
155
149
2,937
2,971
11,655
11,651
11,651
11,647
11,636
11,651
11,651
11,651
11,636
11,636
1,200
10,931
1,200
10,953
1,200
10,962
1,200
10,969
1,200
10,986
1,200
10,939
1,200
10,957
1,200
10,962
1,200
10,979
1,200
10,990
91,814
505
92,273
509
93,084
504
93,086
492
93,013
470
92,125
500
92,975
508
93,382
493
93,219
491
93,469
471
11,588
283
833
8,696
256
703
5,803
301
676
9,800
251
649
9,182
259
592
11,614
277
735
7,082
249
707
4,274
243
781
10,764
261
525
7,769
288
563
Bought outright........................
Held under repurchase agree-
Bought outright.........................
Held under repurchase agree
ment
.................................
33 Gold stock........................................
34 Special Drawing Rights certificate
account ........................................
35 Treasury currency outstanding........
112
462
30
3,331
94,865
96,112
159
ABSORBING RESERVE FUNDS
36 Currency in circulation....................
37 Treasury cash holdings.....................
Deposits, other than member bank
reserves with F.R. Banks:
Treasury.........................................
38
Foreign..........................................
39
Other..............................................
40
41 Other F.R. liabilities and capital. ..
42 Member bank reserves with F.R.
Banks.............................................
3,390
2,998
3,131
3,273
3,375
3,030
3,071
3,191
3,346
3,426
25,725
25,278
25,381
26,312
26,316
25,645
25,145
25,413
30,315
26,907
1 Includes securities loaned—fully guaranteed by U.S. Govt, securities
N o t e .—For amounts of currency and coin held as reserves, see Table
pledged with F.R. Banks—and excludes (if any) securities sold and sched1.12.
uled to be bought back under matched sale-purchase transactions.
Member Banks
A5
1.12 RESERVES AND BORROWINGS Member Banks
Millions o f dollars
Monthly averages of daily figures
Reserve classification
1975
Dec.
All member banks
Reserves:
At F.R. Banks...................
Currency and coin............
Total held 1.........................
Required.........................
Excess1...........................
Borrowings at F.R. Banks:2
Total...................................
Seasonal.............................
8
9
10
11
Large banks in New York City
Reserves held ..........................
Required.............................
Excess.................................
Borrowings2...........................
12
13
14
15
Large banks in Chicago
Reserves held ..............
Required.................
Excess.....................
Borrowings2...............
16
17
18
19
Other large banks
Reserves held. ..
Required.......
Excess............
Borrowings2___
20
21
22
23
All other banks
Reserves held.
Required...
Excess........
Borrowings2..
1976
July
Aug.
Sept.
1977
Oct.
Nov.
27,215
7,773
25,933
8,064
26,001
7,989
25,708
8,113
26,127
8,025
34,989
34,146
34,141
33,979
26,458
8,180
34,305
34,797
34,727
262
127
13
6,812
34,076
70
13,061
127
38
27,229
8,913
25,725
8,326
34,199
34,149
61
8
79
12
111
13
6,310
34,964
172
66
32
84
21
6,507
6,559
6,372
6,374
6,589
35,796
494
62
12
6,520
1,672
13,188
34,433
364
1,690
-1 8
13
12,633
12,660
-2 7
11
13,334
13,178
156
62
6,501
58
28
1,684
1,625
59
6
12,610
12,549
61
20
13,288
13,169
119
50
6,308
64
22
1,615
1,617
-2
3
12,584
12,521
63
3
13,408
13,246
162
47
6,346
28
6,485
104
36
1,648
1,621
1,635
13
3
12,704
12,706
-2
17
13,579
13,429
150
46
1,602
19
12,889
12,802
87
7
13,698
13,544
154
41
Mar.?
36,290
75
31
1,740
13,160
89
26
34,116
189
Feb.
26,430
8,548
104
28
6,i48
-4 1
37
13,249
33,692
287
Jan.
35,136
123
24
6,748
64
63
1,758
-1 8
33,844
297
Dec.
34,234
-3 5
25,865
8,138
33,879
270
7,076
6,442
6,602
-8 2
15
6,948
128
6
6,537
-9 5
47
1,632
1,731
1.624
1,609
1,698
33
2
1.624
1,613
-4
3
13,117
13,556
13,427
129
25
12,683
12,645
13,053
64
14
13,867
13,927
13,450
13,415
Mar. 23^
Mar. 30^
1,641
—9
4
13,668
199
29
13,723
204
28
12,765
-8 2
4
13,308
142
28
6,259
51
44
12,700
-5 5
30
13,307
108
34
Weekly averages of daily figures for weeks ending1977
Jan. 26
All member banks
Reserves:
At F.R. Banks...................
Currency and coin............
Total held 1.........................
Required.........................
Excess1...........................
Borrowings at F.R. Banks:2
Total...................................
Seasonal.............................
31
32
33
34
Large banks in New York City
Reserves held .........................
Required.............................
Excess.................................
Borrowings2...........................
35
36
37
38
Large banks in Chicago
Reserves held ..............
Required.................
Excess.....................
Borrowings2...............
39
40
41
42
Other large banks
Reserves held . . .
Required.......
Excess............
Borrowings 2. . . .
43
44
45
46
Feb. 2
Feb. 9
Feb. 16
27,233
8,812
26,328
8,797
25,684
8,763
36,193
25,837
8,568
26,416
7,594
35,275
34,595
34,553
34,157
35,769
424
35,145
130
34,339
256
34,389
164
Feb. 23
33,928
229
Mar. 2
Mar. 9
Mar. 16
25,725
8,212
25,278
8,181
25,381
8,500
33,607
34,029
26,312
7,498
26,316
8,299
34,083
33,955
34,759
33,933
150
33,334
273
33,861
168
33,843
112
34,440
319
89
8
86
11
75
12
129
13
36
11
30
12
20
11
24
11
339
13
58
14
7,010
6,623
6,621
6,706
6,439
6,326
5,993
6,385
6,164
6,501
1,628
1,621
1,643
1,552
1,669
12,699
12,686
12,623
12,642
-1 9
1
12,579
12,903
12,549
137
1
12,653
-74
117
12,940
-3 7
11
13,430
13,307
13,378
13,463
13,566
6,915
95
6,663
-40
41
6,596
25
43
6,714
-8
98
6,391
48
7
1,632
1,662
1,632
1,670
1,596
13,542
13,119
12,857
12,765
12,709
12,809
-4 4
3
12,618
91
13,871
13,485
13,412
13,413
1,616
16
13,385
157
58
1,666
-4
13,155
-3 6
19
1,605
27
12,782
75
7
1,654
16
1,621
-2 5
6,362
-3 6
1,593
35
12,730
-3 1
1
5,988
5
1,616
5
6,380
5
1,631
12
6,234
-7 0
167
1,575
-2 3
6,401
100
1,638
31
14
All other banks
Reserves held.
Required...
Excess........
Borrowings2..
14,009
13,853
156
31
13,661
210
26
13,356
129
25
13,212
200
28
13,298
115
29
13,248
182
29
13,181
126
19
13,208
170
23
13,381
82
55
13,461
105
33
1 Adjusted to include waivers of penalties for reserve deficiencies in nonmember bank joins the Federal Reserve System. For weeks for which
accordance with Board policy, effective Nov. 19, 1975, of permitting
figures are preliminary, figures by class of bank do not add to total
transitional relief on a graduated basis over a 24-month period when a
because adjusted data by class are not available.
nonmember bank merges into an existing member bank, or when a
2 Based on closing figures.
A6
1.13
Domestic Financial Statistics □ April 1977
F E D E R A L F U N D S T R A N S A C T IO N S o f M on ey M arket Banks
M illions o f dollars, except as noted
1977, week ending—
Type
Feb. 2
Feb. 9
Feb. 16
Feb. 23
Mar. 2
Mar. 9
Mar. 16
Mar. 23
Mar. 30
Total, 46 banks
Basic reserve position
Excess reserves1....................................
L ess :
2
Borrowings at F.R . B an k s............
3
N et interbank Federal funds
transactions...............................
E quals : N et surplus, or
deficit ( —):
4
A m ou n t................................................
5
Per cent o f average required
1
13
73
9
95
37
46
91
7
14,175
18,004
17,687
16,755
15,664
18,027
79
124
49
19
147
241
14
18,488
16,396
14,363
- 1 4 ,1 9 9
- 1 7 ,9 7 7
-1 7 ,7 7 0
- 1 6 ,6 6 6
- 1 5 ,5 8 5
- 1 7 ,9 0 3
- 1 8 ,4 3 9
- 1 6 ,6 1 8
- 1 4 ,2 3 1
reserves ..................................
92.8
119.9
116.9
113.5
106.3
125.7
125.3
114.5
95.5
Interbank Federal funds transactions
Gross transactions:
6
P u rchases............................................
7
Sales......................................................
8 T w o-way transactions2 .......................
N et transactions:
9
Purchases o f net buying b a n k s...
10
Sales o f net selling b a n k s..............
21,637
7 ,4 6 2
5 ,5 6 4
24,143
6 ,139
5,041
23,795
6,1 0 8
4 ,7 5 6
23,441
22,763
7 ,0 9 9
5 ,3 5 8
2 4 ,4 7 8
6,451
4 ,8 6 4
25,141
6 ,6 5 3
4 ,6 2 0
23,263
5 ,2 0 0
6,868
4 ,5 7 4
2 2 ,8 1 9
8,4 5 7
5,3 3 8
16,073
1,898
19,102
1,098
19,039
1,352
18,241
1,487
17,405
1,741
19,614
1,588
20,521
2 ,0 3 4
18,689
2 ,2 9 3
17,481
3 ,1 1 8
3,0 6 0
1,864
1,196
2,541
1,513
1,028
2 ,7 4 8
1,380
1,369
2 ,437
1,775
662
2 ,5 6 0
2 ,0 0 8
553
3,489
1,829
1,660
4 ,4 9 6
1,671
2,8 2 5
2,8 1 9
1,892
927
2 ,4 6 9
1,895
574
-1 8
-2 4
51
11
12
13
R elated transactions with U .S .
Govt, securities dealers
Loans to dealers3..................................
Borrowing from dealers4 ...................
N et loan s........... ......................................
6,686
8 banks in N ew
Basic reserve position
Excess reserves1....................................
L ess :
15
Borrowings at F R Banks
16
N et interbank Federal funds
transactions...............................
E quals : N et surplus, or
deficit ( —):
17
A m ou n t................................................
18
Per cent o f average required
14
reserves ..................................
22
23
Interbank Federal funds transactions
Gross transactions:
Purchases.............................................
S ales......................................................
Two-way transactions2 .......................
N et transactions:
Purchases o f net buying b ank s. . .
Sales o f net selling b a n k s..............
24
25
26
Related transactions with U .S.
Govt, securities dealers
Loans to dealers3..................................
Borrowing from dealers4 ...................
N et loan s.................................................
19
20
21
York City
-2 3
-11
-8
29
37
32
89
7
4,233
5 ,6 2 6
6,191
5,611
4 ,7 0 9
6 ,3 5 3
6 ,8 9 4
4,901
4 ,9 8 4
- 4 ,2 9 3
- 5 ,6 8 0
- 6 ,2 8 8
-5 ,5 8 9
-4 ,7 1 6
-6 ,3 5 3
-6 ,9 1 2
-5 ,0 7 9
- 4 ,9 3 3
70.9
94.5
102.6
96.4
81.6
117.1
118.7
89.5
84.6
5 ,557
1,324
1,324
6 ,623
997
997
6 ,9 3 2
742
742
6 ,6 0 4
994
994
5 ,8 0 7
1,098
1,097
7 ,2 7 5
922
922
6 ,5 0 3
609
609
5 ,9 3 6
1,035
1,035
6 ,1 7 2
1,188
1,187
4,2 3 3
5,6 2 6
6,191
5,611
4 ,7 1 0
6 ,3 5 3
6 ,8 9 4
4,901
4 ,9 8 4
1,671
765
906
1,516
680
836
1,809
621
1,187
1,602
648
954
1,611
795
816
2 ,0 4 0
822
1,218
2 ,4 8 0
788
1,702
1,593
871
722
1,353
804
549
67
43
75
-7
153
38 banks outside N ew York City
Basic reserve position
Excess reserves1....................................
L ess :
28
Borrowings at F R Banks
29
N et interbank Federal funds
transactions...............................
E quals : N et surplus, or
deficit ( —):
30
A m ou n t...............................................
31
Per cent o f average required
27
reserves..................................
35
36
Interbank Federal funds transactions
Gross transactions:
Purchases............................................
Sales......................................................
Two-way transactions2 .......................
N et transactions:
Purchases o f net buying b an k s. . .
Sales o f net selling b a n k s..............
37
38
39
R elated transactions with U .S .
Govt, securities dealers
Loans to dealers3..................................
Borrowing from dealers4....................
N et loan s..................................................
32
33
34
For notes see end o f table.
36
84
17
3
3
9 ,9 4 2
12,378
11,496
11,144
10,955
11,674
11,594
11,495
9 ,3 7 9
- 9 ,9 0 5
- 1 2 ,2 9 7
- 1 1 ,4 8 2
- 1 1 ,0 7 7
- 1 0 ,8 6 9
- 1 1 ,5 5 0
- 1 1 ,5 2 7
- 1 1 ,5 3 9
- 9 ,3 1 8
107.1
136.9
126.5
124.7
122.4
131.0
129.7
130.5
102.5
16,080
6 ,1 3 8
4 ,2 4 0
17,520
5 ,1 4 2
4,0 4 3
16,862
5 ,3 6 6
4 ,0 1 4
16,837
5,6 9 3
4,207
16,956
4 ,2 6 0
17,203
5,5 2 9
3 ,942
17,638
6 ,0 4 4
4,011
17,328
5,833
3,539
16,648
7 ,2 6 9
4,151
11,840
1,898
13,476
1,098
12,848
1 ,3 5 2
12,630
1,487
12,696
1,741
13,262
1,588
13,627
2 ,0 3 4
13,788
2 ,2 9 3
12,497
3 ,1 1 8
1,390
1,025
833
192
940
758
181
835
1,127
-2 9 2
950
1,213
-2 6 4
1,449
1,007
442
2 ,0 1 6
893
1,123
1,226
1,117
1,091
25
1,100
290
67
85
124
88
6,001
1,022
205
14
Federal Funds
Al
1.13 Continued
1977, week ending—
Type
Feb. 2
Feb. 9
Feb. 16
Feb. 23
Mar. 2
Mar. 9
Mar. 16
Mar. 23
Mar. 30
5 banks in City of Chicago
40
Basic reserve position
Excess reserves1.........................
13
26
42
24
44
17
L ess:
41
42
Borrowings at F.R. Banks. ..
Net interbank Federal funds
transactions.....................
14
5,506
5,994
: Net surplus, or
deficit ( —
):
Amount.................................
-5,494
-5,968
-5,623
Per cent o f average required
reserves ..........................
352.6
398.3
363.2
6,280
774
743
6,839
844
828
5,537
31
333
257
75
5,972
6,182
6,105
-5,747
-5,941
-6,158
-6,061
-6,143
-5 ,6 1 5
378.7
399.3
408.0
401.6
419.1
367.4
6,473
807
807
6,784
1,032
1,035
6,893
921
921
6,8
706
707
6,850
745
745
6,794
658
658
6,575
958
958
6,011
17
5,665
5,749
7
5,972
6,182
6,105
6,136
5,617
298
235
62
254
402
-148
174
488
-314
205
525
-320
413
412
1
460
393
67
310
493
-183
226
481
-255
79
5,617
E q ua ls
43
44
48
49
Interbank Federal funds transactions
Gross transactions:
Purchases....................................
Sales............................................
Two-way transactions2.................
Net transactions:
Purchases of net buying banks..
Sales of net selling banks..........
50
51
52
Related transactions with U.S.
Govt, securities dealers
Loans to dealers 3.................
Borrowing from dealers4. . .
Net loans...............................
45
46
47
33 other banks
53
Basic reserve position
Excess reserves1.........................
58
Borrowings at F.R. Banks. ..
Net interbank Federal funds
transactions.....................
-2 5
50
3
L ess:
54
55
3
88
4,436
6,384
5,841
5,402
4,982
5,492
5,489
5,359
3,762
Net surplus, or
deficit ( —
):
Amount.................................
-4,412
-6,329
-5,859
-5,330
-4,928
-5,392
-5 ,4 6 6
-5,396
-3,683
Per cent o f average required
reserves..........................
57.4
84.5
77.8
72.4
6 6 .7
73.8
74.1
73.2
48.9
9,800
5,364
3,497
10,681
4,298
3,216
10,390
4,559
3,207
10,053
4,651
3,172
10,063
5,080
3,339
10,315
4,823
3,235
10,788
5,299
3,266
10,533
5,175
2,882
10,073
6,311
3,193
6,303
1,868
7,465
1,082
7,183
1,352
6,881
1,480
6,723
1,741
7,080
1,588
7,522
2,034
7,652
2,293
6,880
3,118
1,057
842
215
727
598
130
685
356
329
661
639
22
744
688
57
1,036
595
441
1,555
500
1.056
916
528
388
891
611
280
E qua ls :
56
57
52
Interbank Federal funds transactions
Gross transactions:
Purchases....................................
Sales............................................
Two-way transactions2 ................. .
Net transactions:
Purchases of net buying banks...
Sales of net selling banks...........
53
54
Related transactions with U.S.
Govt, securities dealers
Loans to dealers3.................
Borrowing from dealers4. . .
58
59
60
61
55
N e t l o a n s ___________________
1 Based on reserve balances, including adjustments to include waivers
of penalties for reserve deficiencies in accordance with changes in Board
policy effective Nov. 19, 1975.
2 Derived from averages for individual banks for entire week. Figure
for each bank indicates extent to which the bank’s average purchases
and sales are offsetting.
3 Federal funds loaned, net funds supplied to each dealer by clearing
banks, repurchase agreements (purchases from dealers subject to resale),
or other lending arrangements.
4 Federal funds borrowed, net funds acquired from each dealer by
clearing banks, reverse repurchase agreements (sales of securities to
dealers subject to repurchase), resale agreements, and borrowings secured
by U.S. Govt, or other securities.
N o t e . — Weekly averages of daily figures. For description of series,
see Federal Reserve B u l l e t i n for August 1964, pp. 944-53. Back data for
46 banks appear in the Board’s Annual Statistical Digest, 1971-1975,
Table 3.
A8
Domestic Financial Statistics □ April 1977
1.14 FEDERAL RESERVE BANK INTEREST RATES
Per cent per annum
Current and recent levels
Loans to member banks—
Federal Reserve
Bank
Loans to all others
under last par. Sec. 134
Under Sec. 10(b)2
Under Secs. 13 and 13a1
Special rate3
Regular rate
Boston..................
New Y ork............
Philadelphia..........
Cleveland.............
Richmond............
Atlanta.................
Chicago................
St. Louis...............
Minneapolis..........
Kansas City..........
Dallas...................
San Francisco. . . .
5%
5Va
5V4
5V4
5V4
5V4
51/4
5V4
5V4
5V4
51/4
5 lA
Effective
date
Previous
rate
Rate on
3/31/77
Effective
date
Previous
rate
Rate on
3/31/77
Effective
date3
Previous
rate
11/22/76
Rate on
3/31/77
5%
5%
5%
5%
5%
5%
5%
5%
5%
5%
5%
5%
5%
11/22/76
11/22/76
11/22/76
11/22/76
11/22/76
11/22/76
11/22/76
11/26/76
11/22/76
11/22/76
11/22/76
11/22/76
6
6
6
6
6
6
6
6
6
6
6
6
6lA
6V
4
6lA
6V
4
6Va
6Va
6 lA
6V
4
6V
4
6V
4
6V4
6V
4
11/22/76
11/22/76
11/22/76
11/22/76
11/22/76
11/22/76
11/22/76
11/26/76
11/22/76
11/22/76
11/22/76
11/22/76
6%
6%
6%
6%
6%
6%
6%
6%
6%
6%
6%
6%
11/22/76
11/22/76
11/22/76
11/22/76
11/22/76
11/22/76
11/26/76
11/22/76
11/22/76
11/22/76
11/22/76
5V4
sy 4
5V4
53/4
sy 4
534
534
sy 4
534
5*A
534
Rate on
3/31/77
Effective
date
Previous
rate
81/4
11/22/76
11/22/76
11/22/76
11/22/76
11/22/76
11/22/76
11 /22/76
11/26/76
11/22/76
11/22/76
11/22/76
11/22/76
8%
8%
8%
8%
8%
8%
8%
8%
8%
8%
8%
8%
Range
(or level)—
All F.R.
Banks
F.R.
Bank
of
N.Y.
714-734
71/4- 73/4
714
634-714
634
6V4-634
614
734
714
714
634
634
8i/4
81/4
8i/4
81/4
81/4
Wa
81/4
81/4
814
8i/&
8V
4
Range of rates in recent years5
Effective date
In effect Dec. 31, 1970.......
1971—Jan.
Feb.
July
Nov.
Dec.
8...................
15...................
19...................
22...................
29...................
13...................
19...................
16...................
23...................
11...................
19...................
13...................
17...................
24...................
Range
(or level)—
All F.R.
Banks
F.R.
Bank
of
N.Y.
5%
5%
514-5 %
51/4
5 -514
5 -514
5
434-5
434
434-5
5
434-5
434
4%-43/4
4%-434
4%
514
514
51/4
5
5
5
434
5
5
5
434
434
4%
4%
Effective date
Range
(or level)—
All F.R.
Banks
F.R.
Bank
of
N.Y.
1973—Jan. 15.................
Feb. 26..................
Mar. 2..................
Apr. 23.................
May 4..................
11..................
18..................
June 11..................
15..................
July 2.................
Aug. 14.................
23.................
5
5-5%
5%
5% - 5%
5%
5%-6
6
6-6%
6%
7
7-7%
7%
5
5%
5%
5%
1974—Apr. 25.................
30.................
Dec. 9.................
16.................
7%-8
8
7%-8
8
8
7%
1 Discounts of eligible paper and advances secured by such paper or by
U.S. Govt, obligations or any other obligations eligible for F.R. Bank
purchase.
2 Advances secured to the satisfaction of the F.R. Bank. Advances
secured by mortgages on 1- to 4-family residential property are made at
the Section 13 rate.
3 Applicable to special advances described in Section 201.2(e)(2) of
Regulation A.
m
S*
6
6%
6%
7
7%
7%
m
Effective date
1975—Jan.
6..................
10..................
24..................
Feb. 5.................
7.................
Mar. 10.................
14.................
May 16.................
23.................
1976—Jan. 19.................
23..................
Nov. 22.................
26.................
In effect Mar. 31, 1977. ..
6-614
6
614
614
6
6
5%-6
5%
5%
5%'
51/4-5%
514
514
514
514
5Y4
4 Advances to individuals, partnerships, or corporations other than
member banks secured by direct obligations of, or obligations fully
guaranteed as to principal and interest by, the U.S. Govt, or any agency
thereof.
5 Rates under Secs. 13 and 13a (as described above). For description
and earlier data, see the following publications of the Board of Governors:
Banking and Monetary Statistics, 1914-1941, Banking and Monetary
Statistics, 1941-1970, and Annual Statistical Digest, 1971-75.
Policy Instruments
A9
1.15 MEMBER BANK RESERVE REQUIREMENTS1
Per cent o f deposits
Type of deposit, and deposit interval
in millions of dollars
Requirements in effect
Mar. 31, 1977
Previous requirements
Per cent
Effective date
Per cent
Effective date
7
9%
11 %
m
161/4
12/30/76
12/30/76
12/30/76
12/30/76
12/30/76
10
12
13
16Vt
2/13/75
2/13/75
2/13/75
2/13/75
2/13/75
3
3/16/67
3%
3/2/67
3
4 2%
41
3/16/67
1/8/76
10/30/75
3%
3
3
3/2/67
3/16/67
3/16/67
6
4 2%
41
12/12/74
1/8/76
10/30/75
5
3
3
Net demand:2
10-100............................................................................................
100-400..........................................................................................
Over 400.........................................................................................
Time:2,3
Savings............................................................................................
Other time:
0-5, maturing in—
180 days to 4 years................................................................
Over 5, maturing in—
nyA
10/1/70
12/12/74
12/12/74
Legal limits, Mar. 31, 1977
Minimum
Net demand:
Reserve city banks.........................................................................
Other banks...................................................................................
10
7
3
Maximum
22
14
10
(c) Member banks are required under the Board’s Regulation M to
maintain reserves against foreign branch deposits computed on the basis
of net balances due from domestic offices to their foreign branches and
2 (a) Requirement schedules are graduated, and each deposit interval
against foreign branch loans to U.S. residents. Loans aggregating $100,000
applies to that part of the deposits of each bank. Demand deposits
or less to any U.S. resident are excluded from computations, as are total
subject to reserve requirements are gross demand deposits minus cash
loans of a bank to U.S. residents if not exceeding $1 million. Regulation D
items in process of collection and demand balances due from domestic
imposes a similar reserve requirement on borrowings from foreign banks
banks.
by domestic offices of a member bank. A reserve of 4 per cent is required
(b) The Federal Reserve Act specifies different ranges of requirements for each of these classifications.
for reserve city banks and for other banks. Reserve cities are designated
3 Negotiable orders of withdrawal (NOW) accounts and time deposits
under a criterion adopted effective Nov. 9, 1972, by which a bank having
such as Christmas and vacation club accounts are subject to the same
net demand deposits of more than $400 million is considered to have the
requirements as savings deposits.
character of business of a reserve city bank. The presence of the head
4 The average of reserves on savings and other time deposits must be
office of such a bank constitutes designation of that place as a reserve
at least 3 per cent, the minimum specified by law.
city. Cities in which there are F.R. Banks or branches are also reserve
cities. Any banks having net demand deposits of $400 million or less
N o t e .—Required reserves must be held in the form of deposits with
are considered to have the character of business of banks outside of
F.R. Banks or vault cash.
reserve cities and are permitted to maintain reserves at ratios set for banks
not in reserve cities. For details, see the Board’s Regulation D.
1 For changes in reserve requirements beginning 1963, see Board’s
Annual Statistical Digest, 1971-1975 and for prior changes, see Board’s
Annual Report for 1975, Table 13.
A 10
1.16
Domestic Financial Statistics □ April 1977
M A X IM U M IN T E R E S T R A T E S P A Y A B L E on T im e and Savings D ep o sits a t F ed erally Insured In stitu tion s
Per cent per annum
Commercial banks
In effect Mar. 31, 1977
Type and maturity of deposit
Per cent
Time (multiple- and single-maturity
unless otherwise indicated):2
30-89 days:
3
Multiple-maturity...........................
4
Single-maturity................................
5
6
90 days to 1 year:
Multiple-maturity...........................
Single-maturity................................
7
8
9
1 to 2 years3 .........................................
2 to 2Yi years3.....................................
2 Yz to 4 years......................................
10
11
4 to 6 years..........................................
6 years or more...................................
12
Governmental units (all maturities).
Previous maximum
Effective
date
5
Per cent
1/1/74
7/1/73
/
5
}
5Vi
6
61/2
7/1/73
7/1/73
71/4
71/2
11/1/73
12/23/74
7%
/
\
12/23/74
5%
Per cent
5
(4)
Effective
date
1/1/74
( 5)
1/21/70
9/26/66
}
7/20/66
9/26/66
} 2534
(4)
5Yz
53/4
53/4
1/21/70
1/21/70
1/21/70
}
6i/2
6%
(4)
(4)
C)
7Y4
11/1/73
71/2
m
11/1/73
12/23/74
71/2
11/1/73
7Yz
11/27/74
i iA
12/23/74
71/2
11/27/74
41/2
5
5
I
\
Previous maximum
Effective
date
5
7/1/73
}
1/21/70
41/2
1 For authorized States only. Federally insured commercial banks,
savings and loan associations, cooperative banks, and mutual savings
banks were first permitted to offer NOW accounts on Jan. 1, 1974.
Authorization to issue NOW accounts was extended to similar institu
tions throughout New England on Feb. 27, 1976.
2 For exceptions with respect to certain foreign time deposits see the
Federal Reserve B u l l e t in for October 1962 (p. 1279), August 1965 (p.
1094), and February 1968 (p. 167).
3 A minimum of $1,000 is required for savings and loan associations,
except in areas where mutual savings banks permit lower minimum de
nominations. This restriction was removed for deposits maturing in less
than 1 year, effective Nov. 1, 1973.
4 July 1, 1973, for mutual savings banks; July 6, 1973, for savings and
loan associations.
5 Oct. 1, 1966, for mutual savings banks; Jan. 21, 1970, for savings and
loan associations.
6 No separate account category.
7 Between July 1, 1973, and Oct. 31, 1973, there was no ceiling for
certificates maturing in 4 years or more with minimum denominations
of $1,000; however, the amount of such certificates that an institution
could issue was limited to 5 per cent of its total time and savings deposits.
Sales in excess of that amount, as well as certificates of less than $1,000,
In effect Mar. 31, 1977
Effective
date
Per cent
7/1/73
5
1 Savings.........................................................
2 Negotiable order o f withdrawal (NOW)
accounts1.......................................
Savings and loan associations and
mutual savings banks
{
(6)
(6)
51/4
/
\
1/21/70
53/4
1/21/70
1/21/70
1/21/70
6
6
(7)
were limited to the 6 Yi per cent ceiling on time deposits maturing in 2 Yi
years or more.
Effective Nov. 1, 1973, the present ceilings were imposed on certificates
maturing in 4 years or more with minimum denominations of $1,000.
There is no limitation on the amount of these certificates that banks can
issue. In December 1975, the Federal regulatory agencies removed the
minimum-denomination requirement on time deposits representing funds
contributed to an individual retirement account (IRA) established pursuant
to the Internal Revenue Code. Similar action was taken for Keogh (H.R.
10) plans in November 1976.
N o t e — Maximum rates that can be paid by Federally insured commer
cial banks, mutual savings banks, and savings and loan associations are
established by the Board of Governors of the Federal Reserve System,
the Board of Directors of the Federal Deposit Insurance Corporation,
and the Federal Home Loan Bank Board under the provisions of 12
CFR 217, 329, and 526, respectively. The maximum rates on time de
posits in denominations of $100,000 or more were suspended in mid1973. For information regarding previous interest rate ceilings on all
types of accounts, see earlier issues of the Federal Reserve B u l l e t in ,
the Federal Home Loan Bank Board Journal, and the Annual R eport
of the Federal Deposit Insurance Corporation.
A ll
Policy Instruments
1.17 FEDERAL RESERVE OPEN M ARKET TRANSACTIONS
M illions o f dollars
1976
Type of transaction
1974
1975
1976
11,660
5,830
4,550
11,562
5,599
26,431
Aug.
Sept.
14,343
8,462
2 5,017
1,100
1,125
171
Oct.
1977
Nov.
Dec.
Jan.
Feb.
2,535
313
110
801
U.S. GOVT. SECURITIES
Outright transactions (excl. matched salepurchase transactions)
1
9
4
5
6
7
8
q
10
Treasury bills:
Others within 1 year: 1
1 to 5 years:
450
3,886
472
42
-4
3,549
792 -1,5 2 5
-285
797
2 3,284
346
480
600
975
1,546
18
59
45
107
66
1,047
7
252
63
113
681
475
348
-6 6
430
—7
-2 5 2
-8 8 0
62
170
128
129
-1 ,1 8 3
131
618
200
-697
2 3,202
177
3,854 -2 ,5 8 8
301
580
-7 9
285
272
11
12
13
5 to 10 years:
Gross purchases.......................................
Gross sales................................................
Exchange or maturity shift
434
1,510
1,048
72
1,675
-4 ,6 9 7
1,572
1,354
14
15
16
Over 10 years:
Gross purchases.......................................
Gross sales................................................
Exchange or maturity shift
...............
196
1,070
642
65
205
848
225
250
17
18
19
All maturities:1
Gross purchases.......................................
Gross sales...............................................
Redemptions............................................
13,537
5,830
4,682
221,313
5,599
29,980
19,707
8,639
25,017
1,579
20
21
Matched sale-purchase transactions
Gross sales....................................................
Gross purchases...........................................
64,229
62,801
151,205 196,078
152,132 196,579
16,389
16,180
22
23
Repurchase agreements
Gross purchases...........................................
Gross sales....................................................
71,333
70,947
140,311 232,891
139,538 230,355
24
Net change in U.S. Govt, securities...............
1,984
-1 ,1 6 7
73
95
119
48
-3 1 0
2,202
171
151
517
81
300
200
612
480
600
2,004
1,546
3,229
313
797
801
19,828
19,563
23,289
24,501
22,675
21,525
23,193
24,343
24,595
22,544
22,674
23,447
26,641
24,655
24,108
23,477
16,603
18,821
17,612
20,173
30,872
27,119
23,820
27,573
13,853
12,921
3,357
2,397
-588
-4 ,1 7 9
5,361
-2 ,8 8 7
1,702
618
7,434
9,087
1,616
891
246
169
27
22
14
63
4
24
15,179
15,566
10,520
10,360
769
674
1,071
889
705
949
897
976
1,380
1,102
930
1,208
689
612
-5 5
85
-9
-4 9 2
-9
-1 4 0
8
795
-5
-795
-1 8
149
2,587 -1 ,3 3 2
-4 ,3 0 7
6,379 -3 ,9 6 9
1,886
FEDERAL AGENCY OBLIGATIONS
25
26
27
28
29
Outright transactions:
Gross purchases
.....................................
3,087
Gross sales....................................................
322
Redemptions................................................
Repurchase agreements:
Gross purchases........................................... 23,204
Gross sales.................................................... 22,735
115
BANKERS ACCEPTANCES
30
31
Outright transactions, n et...............................
Repurchase agreements, n et...........................
511
420
163
-3 5
-545
410
-6 8
220
32
Net change in total System Account........
6,149
8,539
9,833
3,577
1 Both gross purchases and redemptions include special certificates
created when the Treasury borrows directly from the Federal Reserve,
as follows (millions of dollars): 1973, 1,187; 1974, 131; and 1975, 3,549.
2 In 1975, the System obtained $421 million of 2-year Treasury notes
in exchange for maturing bills. In 1976 there was a similar transaction
amounting to $189 million. Acquisition of these notes is treated as a
purchase; the run-off of bills, as a redemption.
N o t e .— Sales, redemptions, and negative figures reduce holdings of
the System Open Market Account; all other figures increase such holdings.
Details may not add to totals because of rounding.
A 12
1.18
Domestic Financial Statistics □ April 1977
F E D E R A L R ESER VE B A N K S
Millions of dollars
C on d ition and F .R . N o te S tatem en ts
1977
Account
Mar. 2
Mar. 9
1977
Mar. 16
Mar. 23 v
Mar. 30^
Jan.
Feb.
Mar.p
Consolidated condition statement
ASSETS
1 Gold certificate account................................
2 Special Drawing Rights certificate account.
11,651
1,200
11,651
1,200
11,651
1,200
11,636
1,200
11,636
1,200
11,658
1,200
11,651
1,200
3 Cash................................................................
377
374
372
370
359
395
388
41
33
29
2,196
149
47
24
270
177
149
174
171
161
299
155
191
173
149
154
126
6,767
77
6,767
6,744
6,744
159
6,744
6,790
6,767
77
6,731
54
39,376
36,590
34,280
38,478
39,735
38,742
38,826
39,170
48,920
7,159
95,455
932
48,920
7,159
92,669
48,920
7,159
90,359
49,181
7,196
94,855
5,009
49,181
7,196
96,112
48,619
6,773
94,134
48,920
7,159
94,905
932
49,181
7,196
95,547
440
8
9
Loans:
Member bank borrowings...............
Other..................................................
Acceptances:
Bought outright.................................
Held under repurchase agreements.
Federal agency obligations:
Bought outright................................
Held under repurchase agreements.
10
11
12
13
14
15
16
U.S. Govt, securities
Bought outright:
Bills................................................
Certificates—Special...................
O ther.......................
Notes............................................
Bonds............................................
Total i ...............................................
Held under repurchase agreements.
4
5
6
7
11,636
1,200
17 Total U.S. Govt, securities.
96,387
92,669
90,359
99,864
96,112
94,134
95,837
95,987
18 Total loans and securities..
103,598
99,643
97,303
109,423
103,160
101,162
103,027
103,322
10,013
370
8,997
372
10,401
373
8,147
374
8,543
373
5,995
366
6,378
371
7,306
372
44
2,263
44
2,272
50
2,380
51
2,496
58
2,540
222
3,021
62
2,358
61
2,426
129,516
124,553
123,730
133,697
127,869
124,019
125,435
126,683
19 Cash items in process of collection...
20 Bank premises......................................
21 Operating equipment...........................
Other assets:
22
Denominated in foreign currencies.
23
All other............................................
24 Total assets.
LIABILITIES
25 F.R. notes..........................................
Deposits:
26
Member bank reserves.................
27
U.S. Treasury—General account.
28
Foreign..........................................
29
Other 2............................................
82,063
82,900
83,285
83,101
83,310
81,198
81,709
83,257
25,645
11,614
277
735
25,145
7,082
249
707
25,413
4,274
243
781
30,315
10,764
261
525
26,907
7,769
288
563
23,411
11,397
383
642
22,916
12,179
362
856
27,074
7,150
349
637
30 Total deposits.
38,271
33,183
30,711
41,865
35,527
35,833
36,313
35,210
6,152
1,019
5,399
946
6,543
953
5,385
996
5,606
998
3,513
980
3,783
1,193
4,759
1,016
127,505
122,428
121,492
131,347
125,441
121,524
122,998
124,242
34 Capital paid in.......................................................
35 Surplus...................................................................
36 Other capital accounts...................................... i .
989
983
39
989
983
153
990
983
265
991
983
376
990
983
455
986
983
526
989
983
465
991
983
467
37 Total liabilities and capital accounts.....................
129,516
124,553
123,730
133,697
127,869
124,019
125,435
126,683
54,290
54,987
55,922
56,190
56,409
52,271
53,991
56,623
31 Deferred availability cash items...........
32 Other liabilities and accrued dividends.
33 Total liabilities...................................
CAPITAL ACCOUNTS
38
Marketable U.S. Govt, securities held in
custody for foreign and inti, account.............
M em o:
Federal Reserve note statement
88,185
88,223
88,494
88,589
88,563
88,603
88,205
88,664
11,645
643
11,646
643
11,646
643
11,634
643
11,634
643
11,656
643
11,645
643
11,633
643
40
41
42
43
39 F.R. notes outstanding (issued to Bank).............
Collateral held against notes outstanding:
Gold certificate account.....................................
Special Drawing Rights certificate account....
Acceptances........................................................
U.S. Govt, securities..........................................
78,030
78,030
78,130
78,130
78,130
78,100
78,030
78,130
44 Total collateral.
90,318
90,319
90,419
90,407
90,407
90,399
90,318
90,406
1 Includes securities loaned—fully guaranteed by U.S. Govt, securities
pledged with F.R. Banks—and excludes (if any) securities sold and
scheduled to be bought back under matched sale-purchase transactions.
2 Includes certain deposits of domestic nonmember banks and foreignowned banking institutions voluntarily held with member banks and
redeposited in full with F.R. Banks.
A13
Reserve Banks
1.19 FEDERAL RESERVE BANKS
Maturity Distribution of Loan and Security Holdings
Millions of dollars
Wednesday
1977
Type and maturity
End of month
1977
Mar. 16
Mar. 23
Mar. 30
34
27
7
30
30
2,196
2,192
4
149
145
4
46
44
2
24
19
5
270
267
3
326
167
106
53
174
171
19
155
22
50
460
320
93
47
90
43
191
39
95
57
322
169
106
47
280
147
90
43
16 days to 90 days...............................................
91 days to 1 year..................................................
Over 1 year to 5 years.........................................
Over 5 years to 10 years......................................
Over 10 years.......................................................
96,387
5,132
20,996
24,640
30,401
9,841
5,377
92,669
1,913
19,703
25,434
30,401
9,841
5,377
90,359
2,565
16,832
25,343
30,401
9,841
5,377
99,864
9,177
19,562
25,248
30,575
9,888
5,414
96,112
5,595
20,422
24,218
30,575
9,888
5,414
94,134
3,957
18,096
26,979
30,933
9,173
4,996
95,837
3,994
20,962
25,362
30,401
9,841
5,377
95,987
3,494
20,422
25,928
30,841
9,888
5,414
16 Federal agency obligations.......................................
17 Within 15 days 1 ...................................................
18 16 days to 90 days...............................................
19 91 days to 1 year..................................................
Over 1 year to 5 years.........................................
20
21
Over 5 years to 10 years......................................
22
Over 10 years........................................................
6,844
199
171
1,139
3,358
1,217
760
6,767
6,744
13
296
1,169
3,300
1,206
760
6,903
6,744
41
268
1,178
3,291
1,206
760
6,790
40
330
1,037
3,361
1,281
741
6,844
247
171
1,091
3,358
1,217
760
6,785
82
268
1,178
3,291
1,206
760
Mar. 9
Mar. 2
1
?,
3
A
Within 15 days.....................................................
16 days to 90 days
.......................
Ql
1
6
7
8
91 days to 1 year..................................................
9 U.S. Govt, securities................................................
10
11
12
13
14
15
43
37
6
22
98
54
122
239
1,071
3,358
1,217
760
102
200
268
1,178
3,291
1,206
760
Jan. 31
Feb. 28
Mar. 31
1 Holdings under repurchase agreements are classified as maturing
within 15 days in accordance with maximum maturity of the agreements.
1.20
D E M A N D D E P O S IT A C C O U N T S
Seasonally adjusted annual rates
D eb its and R ate o f T urnover
1977
1976
Standard metropolitan statistical area
1973
1974
1975
Oct.
Nov.
Dec.
Jan.
Feb.
30,143.3
Debits (billions of dollars ) 2
1 All 233 SMSA’s.......................................................
18,641.3
22,192.2
23,565.1
27,406.2
28,061.4
28,914.6
'29,286.7
2 New York City........................................................
8,097.7
9,931.8
10,970.9
13,522.0
13,495.5
13,835.0
14,411.8
14,898.0
3 232 SM SA’s .............................................................
4 6 leading SMSA’s other than N.Y.C . 1 ..............
5 226 others..............................................................
10,543.6
12,260.6
12,594.2
13,884.2
14,565.9
15,079.7
r14,874.9
15,245.3
4,462.8
6,080.8
5,152.7
7,107.9
4,937.5
7,661.8
5,447.9
8,436.3
5,693.2
8,872.7
5,917.1
9,162.6
5,864.3
r9,010 . 6
5,887.1
9,358.1
Turnover of deposits (annual rate)
110.2
128.0
131.0
146.4
147.2
153.3
154.3
153.3
7 New York City........................................................
269.8
312.8
351.8
416.2
395.1
419.8
443.5
437.3
8 232 SM SA’s ..............................................................
9 6 leading SMSA’s other than N.Y.C . 1 ..............
10 226 others..............................................................
115.0
60.6
6 All 233 SMSA’s .......................................................
75.8
86.6
131.8
69.3
1 Boston, Philadelphia, Chicago, Detroit, San Francisco-Oakland, and
Los Angeles-Long Beach.
2 Excludes interbank and U.S. Govt, demand deposit accounts.
84.7
118.4
71.6
89.8
126.6
75.6
93.1
131.7
78.3
r96.9
136.9
r81.5
r9 4 .5
r 133.9
r79.4
93.8
129.9
79.8
N o t e .—Total SMSA’s includes some cities and counties not designated
as SMSA’s.
A 14
1.21
Domestic Financial Statistics □ April 1977
M O N E Y STO C K M E A SU R E S A N D C O M PO N EN T S
Billions of dollars; averages of daily figures
Item
1973
Dec.
1974
Dec.
1975
Dec.
1976
1977
J
Aug.
Sept.
Oct.
Nov.
Dec.
Jan.
Feb.
Seasonally adjusted
MEASURES i
1
2
3
4
5
M -l......................................................
M -2......................................................
M -3......................................................
M -4......................................................
M -5......................................................
270.5
571.4
919.6
634.4
982.5
283.1
612.4
981.5
701.4
1,070.5
294.8
664.3
1,092.9
746.5
1,175.1
306.3
710.5
1,181.4
775.5
1,246.3
306.6
716.5
1,194.5
779.5
1,257.6
310.1
725.9
1.211.2
788.2
1,273.6
310.1
732.0
1,223.6
794.3
1,285.8
312.2
313.6
739.7
745.4
1,236.9 rl ,248.5
r802.9
808.4
1,300.2 1,311.5
313.8
749.6
1,257.4
812.8
1,320.7
COMPONENTS
6 Currency..............................................
Commercial bank deposits:
7 Dem and...........................................
8 Time and savings .............................
9
Negotiable CD’s2........................
10
Other............................................
61.5
67.8
73.7
78.6
79.2
79.9
80.3
80.7
81.3
82.0
209.0
215.3
221.0
227.7
230.3
469.1
231.6
418.3
451.7
229.8
363.9
221A
472.9
232.3
490.7
494.8
231.8
11 Nonbank thrift institutions3..............
348.1
63.0
300.9
89.0
329.3
82.1
369.6
369.1
428.6
65.0
404.1
63.1
409.9
470.9
478.0
478.1
62.3
415.8
485.3
484.2
62.2
421.9
491.6
63.3
427.4
499.0
63.1
431.8
63.3
435.8
503.1
507.9
321.1
319.5
744.7
750.3
1,237.7 1,250.9
809.0
813.4
1,302.0 ' I , 314.0
309.7
746.1
1,252.3
807.4
1,313.6
497.3
Not seasonally adjusted
MEASURES i
12
13
14
15
16
M -l......................................................
M-2......................................................
M-3......................................................
M -4......................................................
M -5......................................................
278.3
576.5
921.8
640.5
985.8
291.3
617.5
983.8
708.0
1,074.3
303.2
669.3
1,094.6
752.8
1,178.1
303.3
707.3
1,178.6
773.6
1,244.9
304.6
712.8
1,189.2
778.1
1,254.5
309.0
723.0
1,205.5
787.1
1,269.7
312.1
729.7
1,216.5
792.6
1,279.4
COMPONENTS
17 Currency.............................................
Commercial bank deposits:
18 Demand ...........................................
19
Member.......................................
20
Domestic nonmember................
21
Time and savings .............................
22
Negotiable CD’s2 .......................
23
Other...........................................
24 Nonbank thrift institutions3..............
25 U.S. Govt, deposits (all commercial
banks)..........................................
62.7
69.0
75.1
78.9
79.0
79.7
80.8
82.2
80.7
81.0
215.7
222.2
228.1
224.4
225.6
229.3
231.2
228.8
416.7
449.6
470.3
473.5
162.6
r65 .4
238.8
362.2
161.7
r64.4
239.0
478.2
480.5
487.8
493.9
497.6
345.3
366.3
6.3
4.9
156.5
56.3
64.0
298.2
159.7
58.5
90.5
326.3
162.1
62.6
83.5
366.2
158.4
r62.6
159.0
r63.5
168.5
r66.9
168.2
r6 7 .1
161.1
64.2
66.3
404.0
65.3
408.2
64.2
414.0
425.3
471.3
476.4
482.6
486.8
493.1
500.6
506.2
4.1
3.7
4.9
3.9
4.0
4.4
3.8
4.1
1 Composition of the money stock measures is as follows:
M - l: Averages of daily figures for (1) demand deposits of commercial
banks other than domestic interbank and U.S. Govt., less cash items in
process of collection and F.R. float; (2) foreign demand balances at F.R.
Banks; and (3) currency outside the Treasury, F.R. Banks, and vaults
of commercial banks.
M-2: M-l plus savings deposits, time deposits open account, and time
certificates of deposits (CD’s) other than negotiable CD’s of $100,000 or
more of large weekly reporting banks.
M -3: M-2 plus the average of the beginning and end-of-month deposits
of mutual savings banks, savings and loan shares, and credit union shares
(nonbank thrift).
62.9
417.6
64.3
423.5
63.1
430.7
61.3
436.4
M-4: M-2 plus large negotiable CD’s.
M-5: M-3 plus large negotiable CD’s.
For a description of the latest revisions in the money stock measures’
see “ Money Stock Measures Revisions” on pp. 305-306 of the March
1977 B u l l e t i n .
Latest monthly and weekly figures are available from the Board’s H.6
release. Back data are available from the Banking Section, Division of
Research and Statistics.
2 Negotiable time CD’s issued in denominations of $100,000 or more
by large weekly reporting commercial banks.
3 Average of the beginning- and end-of-month figures for deposits of
mutual savings banks, for savings capital at savings and loan associations,
and for credit union shares.
NOTES TO TABLE 1.23:
1 Adjusted to exclude domestic commercial interbank loans.
2 Loans sold are those sold outright to banks’ own foreign branches,
nonconsolidated nonbank affiliates of the bank, the banks’ holding
company (if not a bank), and nonconsolidated nonbank subsidiaries of
the holding company. Prior to Aug. 28, 1974, the institutions included
had been defined somewhat differently, and the reporting panel of banks
was also different. On the new basis, both “Total loans” and “Com
mercial and industrial loans” were reduced by about $100 million.
3 Reclassification of loans reduced these loans by about $1.2 billion
as of Mar. 31, 1976.
4 Data beginning June 30, 1974, include one large mutual savings
bank that merged with a nonmember commercial bank. As of that date
there were increases of about $500 million in loans, $100 million in
“Other securities,” and $600 million in “Total loans and investments.”
As of Oct. 31, 1974, “Total loans and investments” of all commercial
banks were reduced by $1.5 billion in connection with the liquidation
of one large bank. Reductions in other items were: “Total loans,” $1.0
billion (of which $0.6 billion was in “Commercial and industrial loans” ),
and “Other securities,” $0.5 billion. In late November “Commercial and
industrial loans” were increased by $0.1 billion as a result of loan re
classifications at another large bank.
5 Data revised beginning Jan. 1976 to conform with June 1976 call
report benchmarks. Complete revisions will be published in the Annual
Statistical Digest, 1972-1976.
N o t e .— Data are for last Wednesday of month except for June 30
and Dec. 31; data are partly or wholly estimated except when June 30
and Dec. 31 are call dates.
A15
M onetary Aggregates
1.22 AGGREGATE RESERVES AND DEPOSITS
Member Banks
Billions o f dollars; averages o f daily figures
1973
Dec.
Item
1974
Dec.
1975
Dec.
1976
July
Aug.
Sept.
1977
Nov.
Oct.
Dec.
Jan.
Feb.
Seasonally adjusted
1 Reserves 1...................................................................
2 Nonborrowed.........................................................
3 Required.................................................................
4 Deposits subject to reserve requirements 2................
5 Time and savings...................................................
Demand:
Private..................................................................
6
U.S. Govt............................................................
7
34.94
33.64
34.64
442.3
''279.2
33.60 34.73
35.87 34.60
36.34 r34.46
486.2 505.4
322.1 337.9
34.34
34.21
34.11
514.1
343.5
34.51
34.41
34.31
514.2
341.7
34.34
34.27
34.14
515.6
343.3
34.51
34.41
34.29
520.0
346.2
34.85
34.78
34.59
524.9
350.2
34.95
34.90
34.68
529.6
355.0
34.78
34.71
34.51
532.5
357.3
34.40
34.33
34.20
532.0
360.1
158.1
5.0
160.6
3.5
164.5
3.0
167.9
2.7
168.6
3.9
168.7
3.6
170.4
3.4
170.7
4.0
171.4
3.2
172.5
2.7
169.5
2.5
8 Deposits plus nondeposit items 3...............................
448.9
495.6
513.8 *•522.8 '523.1
'523.8
'529.0
'534.0
'538.8
'540.8
539.5
Not seasonally adjusted
9 Deposits subject to reserve requirements 2................ 447.5
10 Time and savings.................................................... 278.5
Demand:
11
Private................................................................. 164.0
5.0
12
U.S. Govt............................................................
491.8
321.7
510.9
337.2
513.9
343.7
511.3
342.7
514.9
344.1
518.9
346.7
522.5
347.6
534.8
353.6
537.7
357.0
528.7
358.4
166.6
r3.4
170.7
3.1
167.7
2.5
165.9
2.7
167.2
3.6
169.5
'2.8
171.9
'3 .0
177.9
3.3
177.8
2.9
167.2
3.1
454.0
500.1
519.3
r522.7 r520.2 '523.1
'527.9
'531.5
'544.0
546.0
'536.2
13 Deposits plus nondeposit items 3...............................
1 Series reflects actual reserve requirement percentages with no adjust
ment to eliminate the effect of changes in Regulations D and M. There
are breaks in series because of changes in reserve requirements effective
Dec. 12, 1974; Feb. 13, May 22, and Oct. 30, 1975; and Jan. 8, 1976.
In addition, effective Jan. 1, 1976, statewide branching in New York
was instituted. The subsequent merger of a number of banks raised
required reserves because of higher reserve requirements on aggregate
deposits at these banks.
2 Includes total time and savings deposits and net demand deposits as
defined by Regulation D. Private demand deposits include all demand
1.23
deposits except those due to the U.S. Govt., less cash items in process of
collection and demand balances due from domestic commercial banks.
3 “Total member bank deposits” subject to reserve requirements, plus
Euro-dollar borrowings, loans sold to bank-related institutions, and
certain other nondeposit items. This series for deposits is referred to as
“the adjusted bank credit proxy.”
N o te .— Back data and estimates of the impact on required reserves
and changes in reserve requirements are shown in Table 14 of the Board’s
Annual S tatistical D igest, 1971-1975.
L O A N S A N D IN V E S T M E N T S A ll C om m ercial Banks
Billions of dollars; last Wednesday of month except for June 30 and Dec. 31
Category
1973
1974 4
1975
Dec. 31 Dec. 31 Dec. 31
1976 5
1977
Sept. 29 Oct. 27 Nov. 24 Dec. 31
p
V
V
P
Jan. 26
p
Feb. 23 Mar. 30
p
p
Seasonally adjusted
1 Loans and investments1........................................
2 Including loans sold outright2..........................
633.4
637.7
690.4
695.2
721.1
725.5
759.8
763.7
767.6
771.4
773.8
777.6
774.9
778.7
780.5
784.5
790.1
794.0
797.1
801.1
3
4
5
6
Loans:
Total....................................................................
Including loans sold outright2......................
Commercial and industrial3.............................
Including loans sold outright2,3...................
449.0
453.3
156.4
159.0
500.2
505.0
183.3
186.0
496.9
501.3
176.0
178.5
517.9
521.8
174.4
176.9
525.8
529.6
177.2
179.6
528.4
532.2
179.3
181.7
528.1
531.9
178.8
181.2
535.0
539.0
179.9
182.5
539.3
543.2
181.4
184.0
545.3
549.3
183.0
185.7
7
8
Investments:
U.S. Treasury.....................................................
O ther...................................................................
54.5
129.9
50.4
139.8
79.4
144.8
94.4
147.5
93.8
148.0
94.7
150.7
96.9
149.9
96.1
149.4
100.7
150.1
102.7
149.1
Not seasonally adjusted
9 Loans and investments1.........................................
10 Including loans sold outright............................
647.3
651.6
705.6
710.4
737.0
741.4
760.2
764.1
765.9
769.7
773.5
777.3
792.0
795.8
778.8
782.8
783.8
787.7
795.2
799.2
11
12
13
14
Loans:
Total1..................................................................
Including loans sold outright2......................
Commercial and industrial3..............................
Including loans sold outright2,3...................
458.5
462.8
159.4
162.0
510.7
515.5
186.8
189.5
507.4
511.8
179.3
181.8
519.9
523.8
174.9
177.4
524.7
528.5
176.6
179.0
527.2
531.0
178.6
181.0
539.2
543.0
182.2
184.6
530.1
534.1
177.9
180.5
532.9
536.8
179.6
182.2
542.0
546.0
182.9
185.6
15
16
Investments:
U.S. Treasury.....................................................
O ther...................................................................
58.3
130.6
54.5
140.5
84.1
145.5
93.0
147.3
93.8
147.4
97.3
149.1
102.1
150.7
100.2
148.5
101.7
149.2
103.8
149.4
For notes see bottom o f opposite page.
A16
Domestic Financial Statistics □ April 1977
1.24
C O M M E R C IA L B A N K A S S E T S A N D L IA B IL IT IE S
Billions of dollars, except for number of banks
19763
1975
Account
Dec. 31
L ast-W ed n esd ay-of-M on th Series
June
July?
Aug.P
Sept.2
3
1977
Oct.**
N ov . p
Dec.?3
Jan.P
Feb.?
Mar.P
All commercial
1 Loans and investments.............
2
Loans, gross.........................
Investments:
3
U.S. Treasury securities . .
4
Other.................................
775.8
546.2
789.4
552.1
780.6
544.8
790.0
551.6
798.4
558.1
804.9
563.7
813.9
567.6
834.7
583.5
819.7
571.0
827.0
576.1
836.1
582.9
84.1
145.5
91.4
146.0
89.9
146.0
92.2
146.2
93.0
147.3
93.8
147.4
97.3
149.1
101.6
149.7
100.2
148.5
101.7
149.2
103.8
149.4
5 Cash assets...............................
6
Currency and coin...............
7
Reserves with F.R. Banks..
8
Balances with banks............
9
Cash items in process of collection..
133.6
12.3
26.8
47.3
47.3
128.4
12.0
28.2
42.7
45.5
110.8
12.2
28.0
33.7
36.8
108.6
12.0
25.4
35.5
35.7
118.0
12.3
29.8
35.3
40.7
114.5
12.6
26.4
35.9
39.6
123.8
11.8
29.1
39.5
43.4
128.0
13.9
29.9
38.7
45.2
117.0
12.6
28.6
36.3
39.5
123.5
12.3
28.6
37.9
44.3
119.3
12.8
26.9
38.7
40.9
964.9
10 Total assets/total liabilities
capital i .................................
and
11 Deposits....................................
Demand:
12
Interbank..........................
13
U.S. Govt..........................
14
Other.................................
Time:
15
16
Other...................................
17 Borrowings.................................
18 Total capital accounts2.............
19
M em o:
Number of banks.........
963.6
939.5
945.8
965.4
967.9
988.4 1,016.2
988.6 1,003.1 1,010.1
786.3
788.5
765.2
763.5
777.3
892.0
793.4
816.4
796.6
804.8
812.9
41.8
3.1
278.7
38.5
4.6
268.2
32.8
3.5
251.8
33.1
3.6
248.8
34.9
5.7
254.3
34.4
3.6
259.5
39.6
3.2
262.3
38.8
3.3
277.1
35.4
3.8
258.6
36.6
3.6
262.4
37.6
2.9
261.1
12.0
450.6
10.7
466.4
10.2
466.9
9.7
468.3
9.6
473.0
9.2
475.2
9.1
479.2
9.2
487.9
8.9
490.0
8.7
493.5
9.0
502.1
60.2
69.1
67.2
74.6
66.7
72.5
72.2
72.9
77.4
73.5
75.9
74.0
83.5
74.4
87.9
75.4
81.1
75.9
86.0
76.3
83.1
76.7
14,633
14,643
14,636
14,650
14,656
14,660
14,674
14,671
14,667
14,688
14,688
Member
20 Loans and investments...............
21
Loans, gross...........................
Investments:
22
U.S. Treasury securities. ..
23
Other...................................
578.6
416.4
580.8
414.4
572.3
407.5
580.3
412.9
585.7
417.2
590.7
421.6
597.6
424.1
614.9
437.5
600.9
426.3
605.9
429.9
611.8
434.6
61.5
100.7
66.0
100.3
64.5
100.3
66.7
100.7
67.0
101.5
67.7
101.4
70.8
102.7
74.3
103.1
72.6
102.0
73.7
102.3
74.9
102.3
24 Cash assets, total.......................
25
Currency and coin.................
26
Reserves with F.R. Banks. . .
27
28
Cash items in process of collection..
108.5
9.2
26.8
26.9
45.5
105.9
9.0
28.2
24.8
43.9
92.3
9.2
28.0
19.6
35.5
89.4
9.0
25.4
20.5
34.4
98.9
9.2
29.8
20.6
39.3
94.9
9.5
26.4
20.9
38.2
103.0
8.9
29.1
23.3
41.8
107.6
10.5
29.9
23.5
43.7
97.7
9.5
28.6
21.5
38.1
102.8
9.3
28.6
22.2
42.7
100.0
9.6
26.9
24.0
39.5
29 Total assets/total liabilities and
capital i ....................... . .........
733.6
728.3
706.3
710.7
726.8
727.6
744.8
769.1
744.6
755.1
759.7
30 Deposits......................................
Demand:
31
32
U.S. Govt...........................
33
Other...................................
Time:
34
Other..................................
35
590.8
586.2
565.2
562.3
573.9
576.1
584.8
604.6
587.0
592.0
598.1
38.6
3.2
210.8
36.2
3.7
202.0
30.7
2.7
188.7
30.9
2.8
185.9
32.7
4.3
191.0
32.2
2.9
194.7
37.2
2.4
196.0
36.4
2.5
208.6
33.1
3.0
193.7
34.1
2.7
196.6
35.3
2.1
195.9
10.0
329.1
8.6
335.6
8.2
334.9
7.6
335.1
7.5
338.4
7.1
339.2
7.0
342.1
7.2
349.9
6.8
350.3
6.6
351.9
6.9
357.9
36 Borrowings.................................
37
53.6
52.1
60.5
56.2
60.3
55.1
65.9
55.4
70.6
55.7
69.1
56.2
76.4
56.6
80.4
57.3
73.6
57.7
78.0
57.9
75.3
58.1
Number of banks.......
5,788
5,777
5,768
5,772
5,774
5,769
5,767
5,759
5,739
5,740
5,740
38
M em o:
1 Includes items not shown separately.
Effective Mar. 31, 1976, some of the item “reserve for loan losses”
and all of the item “unearned income on loans” are no longer reported
as liabilities. As of that date the “valuation” portion of “reserve for
loan losses” and the “unearned income on loans” have been netted
against “ other assets,” and against “total assets” as well.
Total liabilities continue to include the deferred income tax portion of
“reserve for loan losses.”
2 Effective Mar. 31, 1976, includes “reserves for securities” and the
contingency portion (which is small) of “reserve for loan losses.”
3 Figures partly estimated except on call dates.
N o t e .—Figures include all bank-premises subsidiaries and other sig
nificant majority-owned domestic subsidiaries.
Commercial banks: All such banks in the United States, including
member and nonmember banks, stock savings banks, nondeposit trust
companies, and U.S. branches of foreign banks, but excluding one na
tional bank in Puerto Rico and one in the Virgin Islands.
Member banks: The following numbers of noninsured trust companies
that are members of the Federal Reserve System are excluded from mem
ber banks in Tables 1.24 and 1.25 and are included with noninsured banks
in Table 1.25: 1974—June, 2; December, 3; 1975—June and December,
4; 1976 (beginning month shown)—July, 5, December, 7; 1977-January 8.
Commercial Banks
A17
1.25 CO M M ERCIAL BANK ASSETS AND LIABILITIES Call-Date Series
M illions o f dollars except for number o f banks
Account
1974
1976
1975
June 30
Dec. 31
Dec. 31
1974
June 30
Dec. 31
Total insured
1976
1975
June 30
Dec. 31
June 30
National (all insured)
1 Loans and investments, Gross...............................
Loans:
Gross...............................................................
Net...................................................................
Investments:
4
U.S. Treasury securities.................................
5
O ther...............................................................
6 Cash assets..............................................................
734,516
736,164
762,400
773,696
428,433
428,167
441,135
443,955
541,111
(2)
526,272
(2)
535,170
(2)
539,017
520,970
321,466
(2)
312,229
(2)
315,738
(2)
315,624
305,275
54,132
139,272
125,375
67,833
142,060
125,181
83,629
143,602
128,256
87.413
147,266
124,072
29,075
77,892
76,523
37,606
78,331
75,686
46,799
78,598
78,026
47,409
80,922
75,488
7 Total assets/total liabilities1..................................
906,325
914,781
944,654
942,511
534,207
536,836
553,285
548,698
8 Deposits..................................................................
Demand:
9
U.S. G ovt.......................................................
10
Interbank........................................................
11
Other..............................................................
Time:
12
Interbank........................................................
13
Other...............................................................
741,665
746,348
775,209
776,957
431,039
431,646
447,590
444,251
4,799
42,587
265,444
3,106
41,244
261,903
3,108
40,259
276,384
4,622
37,503
265,670
2,437
23,497
154,397
1,723
21,096
152,576
1,788
22,305
159,840
2,858
20,329
152,382
10,693
418,142
10,252
429,844
10,733
444,725
9,407
459,753
6,750
243,959
6,804
249,446
7,302
256,355
5,532
263,148
14 Borrowings.............................................................
15 Total capital accounts............................................
55,988
63,039
59,310
65,986
56,775
68,474
63,824
68,990
39,603
35,815
41,954
37,483
40,875
38,969
45,184
39,504
16
14,216
14,320
14,372
14,373
4,706
4,730
4,741
4,747
2
3
M em o:
Number of banks.....................................
State member (all insured)
17 Loans and investments, Gross...............................
Loans:
18
Gross...............................................................
19
Net...................................................................
Investments:
20
U.S. Treasury securities.................................
21
Other...............................................................
22 Cash assets..............................................................
Insured nonmember
140,373
134,759
137,620
136,915
165,709
173,238
183,645
192,825
108.346
(2)
100,968
(2)
100,823
(2)
98,889
96,036
111,300
(2)
113,074
(2)
118,609
(2)
124,503
119,658
9,846
22,181
30,473
12,004
21,787
31,466
14,720
22,077
30,451
15,096
22,929
30,422
15,211
39,199
18,380
18,223
41,942
18,029
22,109
42,927
19,778
24,907
43,414
18,161
23 Total assets/total liabilities....................................
181,683
179,787
180,495
179,644
190,435
198,157
210,874
214,167
24 Deposits..................................................................
Demand:
25
U.S. G ovt.......................................................
26
Interbank.........................................................
27
Other...............................................................
Time:
28
Interbank........................................................
29
Other...............................................................
144,799
141,995
143,409
142,061
165,827
172,707
184,210
190,644
746
17,565
49,807
443
18,751
48,621
467
16,265
50,984
869
15,834
49,658
1,616
1,525
61,240
940
1,397
60,706
853
1,689
65,560
894
1,339
63,629
3,301
73,380
2,771
71,409
2,712
72,981
3,074
72,624
. 642
100,804
676
108,989
719
115,389
799
123,980
30 Borrowings..............................................................
31 Total capital accounts.............................................
13,247
12,425
14,380
12,773
12,771
13,105
15,300
12,790
3,138
14,799
2,976
15,730
3,128
16,400
3,339
16,696
1,074
1,064
1,046
1,029
8,436
8,526
8,585
8,597
32
M em o:
Number of banks.....................................
Noninsured nonmember
33 Loans and investments, Gross...............................
Loans:
Gross...............................................................
Net...................................................................
Investments:
36
U.S. Treasury securities.................................
37
Other................................................................
38 Cash assets..............................................................
34
35
Total nonmember
9,981
11,725
13,674
15,905
175,690
184,963
197,319
208,730
8,461
(2)
9,559
(2)
11,283
(2)
13,209
13,092
119,761
(2)
122,633
(2)
129,892
(2)
137,712
132,751
319
1,201
2,667
358
1,808
3,534
490
1,902
5,359
472
2,223
4,362
15,530
40,400
21,047
18,581
43,750
21,563
22,599
44,829
25,137
25,379
45,637
22,524
39 Total assets/total liabilities.....................................
13,616
16,277
20,544
21,271
204,051
214,434
231,418
235,439
40 Deposits..................................................................
Demand:
41
U.S. Govt........................................................
42
Interbank........................................................
43
Time:
44
Interbank........................................................
Other................................................................
45
6,627
8,314
11,323
11,735
172,454
181,021
195,533
202,380
8
897
2,062
11
1,338
2,124
6
1,552
2,308
4
1,006
2,555
1,624
2,422
63,302
951
2,735
62,830
859
3,241
67,868
899
2,346
66,184
803
2,857
957
3,883
1,291
6,167
1,292
6,876
1,445
103,661
1,633
112,872
2,010
121,556
2,092
130,857
46 Borrowings..............................................................
47 Total capital accounts............................................
2,382
611
3,110
570
3,449
651
3,372
663
5,520
15,410
6,086
16,300
6,577
17,051
6,711
17,359
249
253
261
270
8,685
8,779
8,846
8,867
48
M em o:
Number of banks.....................................
1 Includes items not shown separately.
2 Not available.
For N o te see Table 1.24.
A18
Domestic Financial Statistics □ April 1977
1.26
C O M M E R C IA L B A N K A S S E T S A N D L IA B IL IT IE S
Asset and liability items are shown in millions of dollars.
D eta iled B alan ce Sh eet, June 30, 1976
M ember banksi i
<
Asset account
Insured
All
commercial commercial
banks
banks
Large banks
Total
New York
City
City of
Chicago
Other
large
All other
Nonmember
banks 1
1 Cash bank balances, items in process.....................
2 Currency and coin...............................................
3
4 Demand balances with banks in United S tates..
5 Other balances with banks in United States___
6 Balances with banks in foreign countries..........
7 Cash items in process of collection....................
128,435
11,984
28,212
30,921
6,833
4 r948
45,537
124,072
11,972
28,212
28,765
6,041
3,623
45,459
105,911
8,987
28,212
17,838
3,818
3,179
43,877
26,914
686
4,956
6,562
93
327
14,290
4,699
184
2,174
286
7
33
2,016
41,097
3,054
11,508
3,351
1,478
1,767
19,939
33,20i
5,063
9,575
7,639
2,240
1,052
7,633
22,524
2,997
8 Total securities held—Book value...........................
9 U.S. Treasury.......................................................
10 Other U.S. Govt, agencies..................................
11 States and political subdivisions.........................
12 All other securities..............................................
n
235,836
91,420
34,264
102,994
6,995
162
233,184
90,948
33,729
102,694
5,701
113
165,113
66,013
20,706
74,465
3,849
80
18,349
9,209
996
7,718
425
7,553
3,766
348
3,225
214
53,364
22,163
5,880
24,322
970
30
85,847
30,875
13,482
39,201
2,239
50
70,723
25,408
13,558
28,529
3,146
83
261
141
13,083
3,015
1,769
1,660
14
15
16
17
18
19
Trading-account securities....................................
5,795
5,745
5,654
2,612
678
2,103
U.S. Treasury...................................................
Other U.S. Govt, agencies...............................
States and political subdivisions.....................
All other trading acct. securities.....................
3,535
665
1,043
391
162
3,535
665
1,043
391
113
3,507
659
1,025
383
80
1,950
244
316
103
494
44
80
60
970
342
557
204
30
93
28
73
17
50
20
21
22
23
24
Bank investment portfolios ...................................
230,041
227,439
159,460
15,737
6,875
51,261
85,586
70,582
87,413
33,064
101,651
5,310
62,506
20,047
73,440
3,466
7,260
752
7,403
323
3,272
304
3,145
155
21,193
5,538
23,764
766
30,782
13,454
39,128
2,223
25,380
13,552
28,512
3,138
U.S. Treasury...................................................
Other U.S. Govt, agencies...............................
States and political subdivisions.....................
All other portfolio securities...........................
87,886
33,600
101,952
6,604
28
6
17
8
83
25 F.R. stock and corporate stock.............................
1,539
1,495
1,244
248
78
470
448
295
26 Federal funds sold and securities resale agreement..
27 Commercial banks................................................
28 Brokers and dealers.............................................
29 Others...................................................................
36,120
30,954
2,658
2,507
34,262
29,471
2,459
2,333
26,819
22,170
2,376
2,273
1,929
1,094
180
655
1,150
1,016
108
26
14,110
10,937
1,703
1,470
9,630
9,124
384
123
9,300
8,784
283
234
30 Other loans, gross....................................................
31 L e s s : Unearned income on loans.......................
32
Reserves for loan loss...............................
33 Other loans, net....................................................
516,107
12,000
6,163
497,944
504,755
11,941
6,105
486,709
387,695
8,286
4,916
374,493
67,105
471
1,112
65,522
20,802
81
331
20,390
147,088
2,824
1,830
142,434
152,699
4,910
1,642
146,148
128,412
3,714
1,248
123,451
141,964
141,737
100,545
8,693
1,988
36,933
52,930
41,419
75,826
75,692
54,450
3,563
821
52
20,034
30,032
21,376
101
1,134
99
1,531
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
Other loans, gross, by category
Real estate loans ..................................................
Construction and land development..............
Secured by farmland........................................
Secured by residential......................................
1- to 4-family residences ...............................
FHA-insured or VA-guaranteed.............
Conventional............................................
Multifamily residences..................................
FHA-insured............................................
Conventional............................................
Secured by other properties.............................
Loans to financial institutions ..............................
16,568
6,355
80,203
16,562
6,344
80,062
8,297
67,529
8,262
67,429
412
3,965
38,839
411
3,960
38,769
321
2,859
26,612
41,609
36,645
34,684
4,377
4,371
13,586
2,717
57,630
7,150
47,300
3,180
To REIT’s and mortgage companies..............
To domestic commercial banks.......................
To banks in foreign countries.........................
To other depositary institutions.....................
To other financial institutions.........................
Loans to security brokers and dealers...............
Other loans to purch./carry securities................
Loans to farmers—except real estate.................
Commercial and industrial loans.......................
Loans to individuals............................................
10,556
5,182
8,625
1,637
15,608
7,743
4,032
22,174
174,384
110,393
10,510
3,201
6,076
1,572
15,285
7,521
4,018
22,149
169,345
110,031
10,172
2,527
5,907
1,424
14,652
7,390
3,373
12,380
140,087
77,597
Instalment loans....................................................
87,465
87,141
Passenger automobiles.................................
Residential-repair/modernize.......................
Credit cards and related plans....................
Charge-account credit cards....................
Check and revolving credit plans............
Other retail consumer goods.......................
Mobile homes...........................................
Other..........................................................
Other instalment loans.................................
Single-payment loans to individuals...............
All other loans......................................................
36,951
6,107
12,196
9,517
2,680
15,536
8,720
6,815
16,675
22,927
13,807
36,685
6,106
12,193
9,516
2,677
15,526
8,719
6,807
16,630
22,891
13,309
68 Total loans and securities, net.................................
56
57
58
59
60
61
62
63
64
65
66
67
3,119
2
3,976
533
3,030
532
14
922
6,352
288
21,168
3,584
2,413
31,563
2,981
3,638
22,573
769
3,958
16,076
2,607
27,425
121
293
1,596
25
76
521
1,035
9,125
77
1,455
15,370
90
1,107
12,227
12,206
4,548
14,980
2,949
6,925
413
1,147
20,229
1,197
3,753
806
2,297
185
5,165
4,535
428
77
33,896
4,680
1,457
138
324
25
2,605
987
314
135
10,435
1,627
4,193
1,215
2,873
1,064
5,635
1,734
1,720
2,988
55,517
27,854
769
369
413
151
1,248
134
911
9,179
40,239
43,435
384
2,655
2,718
212
956
353
659
9,795
34,297
32,796
61,238
3,322
916
22,383
34,617
26,227
24,065
4,320
10,746
8,540
2,206
10,730
6,238
4,493
11,376
16,358
11,639
510
263
1,127
817
310
203
112
91
1,219
1,358
2,589
150
37
534
504
30
86
33
52
109
711
766
7,291
1,747
6,112
4,987
1,125
3,884
2,300
1,584
3,350
5,471
5,362
16,114
2,274
2,973
2,232
741
6,557
3,792
2,765
6,698
8,818
2,922
12,886
1,787
1,450
977
473
4,805
2,483
2,323
5,299
6,569
2,168
771,439
755,650
567,670
86,047
29,171
210,378
242,074
203,769
Direct lease financing..............................................
Fixed assets—Buildings, furniture, real estate. . . .
Investment in unconsolidated subsidiaries............
Customer acceptances outstanding.........................
Other assets..............................................................
4,675
18,585
2,107
10,682
27,861
4,675
18,484
2,104
10,316
27,210
4,455
13,902
2,063
9,990
24,353
983
1,626
827
5,278
9,081
128
611
160
517
1,627
2,714
5,605
1,005
3,924
9,775
630
6,060
70
271
3,871
221
4,683
44
692
3,507
74 Total assets...............................................................
963,783
942,511
728,344
130,756
36,912
274,499
286,177
235,440
69
70
71
72
73
For notes see opposite page.
Commercial Banks
A19
1.26 Continued
Member banks 1
Liability or capital
account
75 Demand deposits......................................................
76 Mutual savings banks..........................................
77 Other individuals, partnerships, and
corporations........................................ ........
78 U.S. Govt..............................................................
79 States and political subdivisions.........................
80 Foreign governments, central banks, etc............
81 Commercial banks in United States...................
82 Banks in foreign countries..................................
83 Certified and officers’ checks, etc........................
All
Insured
commercial commercial
banks
banks
Large banks
Total
New York
City
City of
Chicago
Other
large
All other
Non
member
banks 1
311,363
1,299
307,796
1,113
241,932
1,014
54,110
491
9,807
2
87,697
229
90,318
291
69,431
286
236,614
4,627
17,336
1,757
30,870
6,341
12,520
235,547
4,623
17,216
1,295
30,573
5,817
11,612
179,037
3,728
12,278
1,250
29,454
5,697
9,477
29,740
474
620
981
13,524
4,240
4,038
7,268
154
155
21
1,781
148
278
67,579
1,604
3,732
230
10,589
1,192
2,542
74,449
1,496
7,770
17
3,560
117
2,619
57,577
900
5,058
507
1,416
644
3,043
84 Time deposits...........................................................
85 Accumulated for personal loan payments..........
86 Mutual savings banks.........................................
87 Other individuals, partnerships, and
corporations..................................................
88 U.S. Govt.............................................................
89 States and political subdivisions.........................
90 Foreign governments, central banks, etc............
91 Commercial banks in United States...................
92 Banks in foreign countries..................................
293,204
171
481
285,431
171
458
212,740
136
445
32,483
13,165
266
7
77,746
13
135
89,347
123
36
80,464
35
36
227,578
678
43,942
10,143
8,082
2,129
222,500
678
43,653
9,029
7,522
1,419
163,935
550
30,739
8,778
6,797
1,360
22,766
77
803
5,255
2,613
702
9,494
1
1,106
1,295
1,162
100
58,633
251
13,711
2,187
2,337
478
73,042
220
15,121
41
685
80
63,643
128
13,203
1,366
1,285
769
93 Savings deposits........................................................
94 Individuals and nonprofit organizations............
95 Corporations and other profit organizations. . .
96 U.S. Govt..............................................................
97 All other................................................................
184,126
175,381
6,049
2,648
47
183,730
174,995
6,043
2,645
47
131,640
125,270
4,521
1,805
44
8,752
8,332
262
130
28
2,715
2,611
95
9
48,362
45,993
1,982
376
11
71,811
68,334
2.182
i;290
4
52,486
50,111
1,529
843
4
98 Total deposits...........................................................
788,693
776,957
586,312
95,345
25,687
213,805
251,476
202,381
99 Federal funds purchased and securities sold under
agreements to repurchase...............................
100 Commercial banks.............................................
101 Brokers and dealers...........................................
102 Others.................................................................
103 Other liabilities for borrowed money...................
104 Mortgage indebtedness..........................................
105 Bank acceptances outstanding..............................
106 Other liabilities......................................................
60,719
35,182
8,053
17,484
6,478
789
11,287
21,262
58,944
33,936
7,976
17,031
4,881
787
10,917
16,198
55,906
32,667
7,512
15,727
4,579
577
10,591
14,148
11,224
6,445
735
4,045
2,243
53
5,854
4,736
7,215
4,883
1,073
1,259
80
16
525
892
29,308
17,374
4,903
7,032
1,806
316
3,938
5,575
8,158
3,965
801
3,392
450
192
274
2,945
4,813
2,514
542
1,757
1,899
212
696
7,114
107 Total liabilities........................................................
889,228
868,684
672,114
119,456
34,415
254,749
263,495
217,114
108 Subordinated notes and debentures.....................
4,901
4,837
3,935
1,099
83
1,752
1,001
966
109 Equity capital.........................................................
110 Preferred stock...................................................
Ill
Common stock...................................................
112 Surplus................................................................
113 Undivided profits...............................................
114 Other capital reserves........................................
69,655
81
15,963
27,903
23,842
1,867
68,991
75
15,843
27,648
23,630
1,794
52,295
34
11,723
20,676
18,566
1,296
10,201
2,414
2,264
3,966
3,858
114
570
1,155
645
44
17,998
10
3,894
7,509
6,154
431
21,681
24
4,995
8,047
7,909
706
17,360
47
4,239
7,226
5,276
571
115 Total liabilities and equity capital.........................
963,783
942,511
728,344
130,756
36,912
274,499
286,177
235,440
116
Demand deposits adjusted 2.....................
Average for last 15 or 30 days:
Cash and due from bank...................................
Federal funds sold and securities purchased
under agreements to resell.........................
Total loans..........................................................
Time deposits of $100,000 or m ore..................
Total deposits.....................................................
Federal funds purchased and securities sold
under agreements to repurchase................
Other liabilities for borrowed money................
230,329
227,142
164,874
25,822
5,857
55,566
77,629
65,455
123,703
119,246
102,291
26,314
4,360
39,625
31,992
21,412
38,280
502,155
146,166
775,140
35,632
490,759
140,300
763,837
27,149
377,741
115,892
574,789
2,253
66,363
29,258
89,888
1,341
20,569
10,747
25,003
13,353
143,388
48,444
209,900
10,202
147,421
27,443
249,999
11,131
124,414
30,275
200,350
64,655
6,485
62,022
4,782
58,970
4,474
14,334
2,064
7,184
87
29,212
1,957
8,240
367
5,695
2,011
124 Standby letters of credit outstanding...................
125 Time deposits of $100,000 or m ore......................
126 Certificates of deposit........................................
127 Other time deposits............................................
10,950
146,783
122,071
24,712
10,535
141,105
118,464
22,641
9,927
117,342
97,455
19,887
5,289
28,910
24,503
4,407
954
11,159
8,937
2,221
3,043
49,561
39,866
9,696
641
27,712
24,149
3,563
1,023
29,441
24,616
4,825
128 Number of banks..................................................
14,643
14,373
5,776
11
9
155
5,601
8,867
117
118
119
120
121
122
123
M em o:
1 Member banks exclude and nonmember banks include 5 noninsured
trust companies that are members of the Federal Reserve System, and
member banks exclude 2 national banks outside the continental United
States.
2 Demand deposits adjusted are demand deposits other than domestic
commercial interbank and U.S. Govt., less cash items reported as in
process of collection.
N o t e .— Data include consolidated reports, including figures for all
bank-premises subsidiaries and other significant majority-owned do
mestic subsidiaries. Securities are reported on a gross basis before deduc
tions of valuation reserves. Holdings by type of security will be reported
as soon as they become available.
Back data in lesser detail were shown in previous B u l l e t in s . Details
may not add to totals because of rounding.
A20
1.27
Domestic Financial Statistics □ April 1977
A L L L A R G E W E E K L Y R E P O R T IN G C O M M E R C IA L B A N K S
Millions of dollars, Wednesday figures
A ssets and L iab ilities
1977
Account
Feb. 9
1 Total loans and investments.....................................
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
Loans:
Federal funds sold 1..............................................
Feb. 16
Feb. 23
Mar. 2
Mar. 9
Mar. 16
Mar. 23
Mar. 30
404,696
408,189
406,996
409,782
412,780
416,040
409,678
410,064
20,082
21,317
21,281
21,703
23,990
23,769
20,589
21,648
To commercial banks......................................
To brokers and dealers involving—
U.S. Treasury securities...............................
Other securities............................................
15,906
16,862
2,223
827
1,126
2,536
911
1,008
2,089
1,076
999
2,507
1,080
1,182
3,163
1,170
1,320
3,884
1,036
1,927
2,488
451
1,534
2,757
662
1,953
Other, gross ..........................................................
284,798
285,987
115,035
4,174
285,368
287,263
286,819
289,683
287,931
288,131
For purchasing or carrying securities:
To brokers and dealers:
U.S. Treasury securities...........................
Other securities.........................................
To others:
U.S. Treasury securities...........................
114,851
4,187
1,417
7,832
1,257
8,474
1,283
7,575
1,317
7,728
1,596
7,656
2,520
7,892
1,125
7,513
1,362
7,719
75
2,540
77
2,520
75
2,512
71
2,510
70
2,514
71
2,528
69
2,518
72
2,527
7,071
16,128
64,136
7,001
16,006
64,381
6,972
15,837
64,463
7,102
15,861
64,496
7,132
15,907
64,503
7,263
15,910
64,824
7,293
15,767
64,930
7,248
15,784
64,948
1,761
5,591
39,382
1,897
17,930
1,813
5,845
39,457
1,888
18,059
1,843
5,828
39,472
1,861
18,031
1,982
5,894
39,545
1,828
18,540
1,956
5,668
39,492
1,768
18,009
2,082
5,684
39,516
1,757
18,331
2,064
5,492
39,591
1,828
18,391
2,062
5,450
39,755
1,859
18,303
Commercial and industrial.............................
To nonbank financial institutions:
Personal and sales finance cos., etc.............
Real estate........................................................
To commercial banks:
Foreign..........................................................
Consumer instalment.......................................
Foreign governments, official institutions, etc..
All other loans..................................................
L ess : L o a n lo ss re s e rv e a n d u n e a rn e d in c o m e
o n l o a n s ...............................................................
Other loans, n et ....................................................
17,117
115,451
4,165
16,934
116,198
4,191
18,337
116,325
4,223
16,922
117,060
4,245
16,116
117,099
4,251
16,276
116,774
4,268
8,613
8,674
8,687
8,685
8,734
8,773
8,783
277,313
8,679
276,185
276,681
278,578
278,085
280,910
279,148
279,452
48,147
49,238
10,534
48,752
49,645
10,189
10,216
50,651
50,691
49,872
10,993
10,859
10,442
48,890
7,654
25,512
3,988
7,694
26,913
4,097
7,805
26,810
3,948
8,060
27,594
3,775
8,054
28,090
3,757
8,046
27,901
3,885
8,101
27,690
3,639
7,923
27,431
3,746
60,282
59,856
60,054
60,670
60,069
60,074
Investments:
U.S. Treasury securities .......................................
Bills....................................................................
Notes and bonds, by maturity:
Within 1 year................................................
1 to 5 years....................................................
After 5 years.................................................
Other securities.....................................................
Obligations of States and political
subdivisions:
Tax warrants, short-term notes, and
bills........................................................
10,750
9,790
60,282
60,321
6,485
40,114
6,297
40,177
6,227
40,319
6,190
40,088
6,234
40,185
6,607
40,538
6,365
40,287
6,190
40,456
2,218
11,465
2,182
11,665
2,147
11,589
2,154
11,424
2,206
11,429
2,214
11,311
2,276
11,141
2,297
11,131
37 Balances with domestic banks.................................
38 Investments in subsidiaries not consolidated........
39 Other assets..............................................................
31,676
23,029
5,265
10,922
2,535
51,819
35,372
20,987
5,447
12,063
2,515
49,773
38,696
22,129
5,656
12,279
2,507
50,534
38,300
19,670
5,343
13,479
2,506
51,375
32,126
18,934
5,283
12,665
2,522
50,421
37,776
19,418
5,582
12,620
2,579
51,181
35,642
23,786
5,735
12,126
2,543
51,485
35,947
21,399
5,863
14,375
2,530
51,878
40 Total assets/total liabilities......................................
529,942
534,346
538,797
540,455
534,731
545,196
540,995
542,056
162,147
167,657
121,973
6,161
1,983
169,719
173,207
164,326
178,073
167,195
120,055
6,046
1,255
170,095
21,229
796
23,787
802
24,854
789
25,902
860
23,813
821
24,610
842
23,552
722
26,193
754
869
5,624
6,273
793
5,773
6,385
1,116
5,925
6,346
1,302
5,847
6,939
1,160
5,684
5,829
868
5,721
6,484
1,019
5,484
7,271
1,146
5,848
6,619
30
31
32
33
Other bonds, corporate stocks, and
securities:
Certificates of participation2.......................
All other, including corporate stocks.........
34 Cash items in process of collection........................
35 Reserves with F.R. Banks.......................................
41
42
43
44
45
46
47
48
49
50
Deposits:
Demand deposits ...................................................
Individuals, partnerships, and corporations..
States and political subdivisions.....................
U.S. Govt..........................................................
Domestic interbank:
Mutual savings..............................................
Foreign:
Governments, official institutions, etc.........
Certified and officers’ checks...........................
122,817
6,199
1,673
124,820
6,223
1,314
120,164
5,603
1,252
126,723
5,969
6,856
121,706
6,315
1,126
122,736
5,739
1,060
231,523
230,765
230,274
230,610
231,890
231,912
233,261
234,313
States and political subdivisions.....................
92,038
105,476
19,991
5,410
7,293
92,101
104,748
20,076
5,323
7,179
92,387
104,239
20,068
5,169
7,058
92,716
104,539
19,930
5,097
6,939
93,337
104,974
20,038
5,183
6,948
93,723
104,568
19,908
5,352
6,950
94,119
105,507
20,038
5,311
6,876
94,628
105,976
20,055
5,420
6,837
67,003
51
52
53
54
55
Time and savings deposits 3...................................
65,721
69,062
66,331
68,637
64,690
67,909
61,211
58
3,995
23,344
705
4,093
23,659
50
4,177
23,785
10
3,696
24,743
7
3,693
24,223
5
3,804
24,842
2,081
3,945
24,722
109
3,925
24,512
41,782
41,746
41,730
41,858
41,955
41,870
41,882
41,825
Individuals, partnerships, and corporations:
Foreign governments, official institutions, etc.
Borrowings from :
57 F.R. Banks...........................................................
58
59 Other liabilities, etc.5..............................................
60 Total equity capital and subordinated
notes/debentures6.............................................
1 Includes securities purchased under agreements to resell.
2 Federal agencies only.
3 Includes U.S. Govt, and foreign bank deposits not shown separately.
4 Includes securities sold under agreements to repurchase.
5 Includes minority interest in consolidated subsidiaries and deferred
tax portion of reserves for loans.
6 Includes reserves for securities and contingency portion of reserves
for loans.
Weekly Reporting Banks
A21
1.28 LARGE WEEKLY REPORTING CO M M ERCIAL BANKS IN NEW YO RK CITY Assets and Liabilities
Millions o f dollars, Wednesday figures
1977
Account
Feb. 9
1 Total loans and investments........................................
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
Loans:
Federal funds sold 1..............................................
To commercial banks.......................................
To brokers and dealers involving—
U.S. Treasury securities...............................
Other securities.............................................
To others..........................................................
Other, gross ..........................................................
Commercial and industrial..............................
Agricultural......................................................
For purchasing or carrying securities:
To brokers and dealers:
U.S. Treasury securities...........................
Other securities........................................
To others:
U.S. Treasury securities...........................
Other securities.........................................
To nonbank financial institutions:
Personal and sales finance cos., etc.............
Other..............................................................
Real estate........................................................
To commercial banks:
Domestic.......................................................
Foreign..........................................................
Consumer instalment.......................................
Foreign governments, official institutions, etc.
All other loans..................................................
L ess : Loan loss reserve and unearned income
on loans.....................................................
Other loans, net ....................................................
Feb. 16
Feb. 23
Mar. 2
Mar. 9
Mar. 16
Mar. 23
Mar. 30
88,562
89,235
88,435
89,938
88,967
90,432
90,398
91,896
2,608
3,125
2,852
3,141
2,899
3,393
2,026
2,000
2,221
302
388
254
568
369
263
308
346
504
615
503
386
725
554
142
717
413
237
494
0
641
641
145
1,036
67,433
68,031
67,437
68,159
69,410
33,641
113
34,045
113
67,868
33,577
115
66,839
67,206
1,192
4,435
1,071
4,912
1,097
4,291
1,427
4,206
2,158
A,211
A,611
896
4,080
1,154
4,210
13
382
13
378
13
374
12
374
12
374
12
373
11
371
11
372
2,357
5,354
8,923
2,315
5,317
8,991
2,314
5,262
8,990
2,396
5,240
8,955
2,422
5,255
8,953
2,508
5,231
8,979
2,433
5,174
8,991
2,492
5,129
8,924
471
2,429
4,034
470
3,609
553
2,629
4,037
474
3,649
602
2,670
4,040
459
3,571
646
2,768
4,045
405
3,738
726
2,603
4,045
374
3,374
718
2,583
4,018
403
3,460
628
2,416
3,998
366
3,457
628
2,397
3,977
426
3,426
1,664
33,642
122
1,925
1,694
1,637
1,145
1,478
33,982
115
34,170
120
3,135
33,897
121
4,043
33,939
121
1,685
1,687
1,706
1,720
1,720
1,697
65,773
66,346
65,750
66,453
66,148
67,690
65,142
65,588
11,494
11,836
2,917
11,798
12,315
3,128
742
6,783
841
639
7,273
1,007
8,560
1,660
Investments:
1,618
12,775
3,549
12,232
11,877
3,081
3,064
11,230
2,602
657
7,309
847
817
7,622
795
831
7,677
718
868
7,266
819
889
7,227
697
868
7,078
682
8,631
8,567
8,523
8,576
8,581
8,408
8,374
926
5,967
929
6,019
6,040
909
893
5,954
869
5,974
939
6,063
995
5,936
843
5,975
235
1,432
221
1,462
222
1,396
220
1,456
220
1,513
220
1,359
220
1,257
220
1,336
Cash items in process of collection........................
Reserves with F.R. Banks.......................................
Currency and coin...................................................
Balances with domestic banks.................................
Investments in subsidiaries not consolidated........
Other assets....................................................................
11,210
7,556
775
4,760
1,166
19,019
11,725
6,373
784
5,528
1,167
17,450
12,475
6,080
803
5,267
1,173
17,262
11,854
5,353
763
6,603
1,184
17,820
10,316
6,081
815
5,869
1,157
17,012
12,355
5,128
892
5,473
1,190
17,424
13,398
6,048
913
5,739
1,191
17,901
13,596
5,386
921
6,757
1,165
40 Total assets/total liabilities..........................................
132,921
132,965
132,027
134,009
131,648
134,358
133,752
134,605
47,879
49,478
46,048
51,125
48,958
49,793
21,621
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
U.S. Treasury securities.......................................
Bills...................................................................
Notes and bonds, by maturity:
Within 1 year................................................
1 to 5 years...................................................
After 5 years.................................................
Other securities.....................................................
Obligations of States and political
subdivisions:
Tax warrants, short-term notes, and bills..
All other........................................................
Other bonds, corporate stocks, and
securities:
Certificates of participation2.......................
All other, including corporate stocks.........
Deposits:
Demand deposits ...................................................
Individuals, partnerships, and corporations..
States and political subdivisions.....................
U.S. Govt..........................................................
Domestic interbank:
Commercial..................................................
Mutual savings.............................................
Foreign:
Governments, official institutions, etc.........
Commercial banks.......................................
Certified and officers’ checks...........................
Time and savings deposits3...................................
Individuals, partnerships, and corporations:
Savings..........................................................
O ther.............................................................
States and political subdivisions.....................
Domestic interbank..........................................
Foreign governments, official institutions, etc.
56 Federal funds purchased, etc.4...............................
Borrowings from:
57 F.R. Banks............................................................
58 Others.................................................. ................
59 Other liabilities, etc.5..............................................
60 Total equity capital and subordinated
notes/debentures 6.............................................
46,228
47,074
27,671
733
158
17,545
28,880
657
1,994
11,743
419
11,069
419
11,102
436
10,841
347
12,494
381
870
4,599
3,018
1,057
4,498
3,209
925
4,385
2,647
657
4,337
3,062
800
4,192
4,216
912
4,510
3,267
42,371
41,955
41,881
41,875
41,609
41,748
42,163
10,602
23,410
1,208
2,306
4,105
10,609
23,090
1,220
2,227
4,065
10,701
23,143
1,176
2,096
4,003
10,739
23,065
1,193
2,091
4,025
10,767
22,753
1,219
2,109
3,997
10,773
23,083
1,219
2,003
3,910
10,920
23,190
1,333
2,099
3,861
19,373
18,070
17,502
18,121
19,619
16,978
17,275
18,018
0
2,125
10,472
685
2,184
10,683
50
2,178
10,559
0
1,846
10,778
0
1,791
10,401
0
1,650
11,087
1,107
1,729
11,015
0
1,861
10,841
11,879
11,898
11,904
11,905
11,914
11,909
11,920
11,929
26,960
629
294
27,325
620
180
9,450
426
10,636
406
10,866
401
635
4,231
3,113
579
4,517
3,053
42,844
10,548
23,877
1,127
2,390
4,153
27,903
543
106
3,279
26,011
511
81
27,566
676
131
1 Includes securities purchased under agreements to resell.
2 Federal agencies only.
3 Includes U.S. Govt, and foreign bank deposits not shown sepaately.
4 Includes securities sold under agreements to repurchase.
2,985
500
102
5 Includes minority interest in consolidated subsidiaries and deferred
tax portion of reserves for loans.
6 Includes reserves for securities and contingency portion of reserves
for loans.
A22
1.29
Domestic Financial Statistics □ April 1977
L A R G E W E E K L Y R E P O R T IN G C O M M E R C IA L B A N K S O U T S ID E N E W Y O R K C IT Y
A ssets and L iab ilities
Millions of dollars, Wednesday figures
1977
Account
Feb. 9
1 Total loans and investments.....................................
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Loans:
To commercial banks.......................................
To brokers and dealers involving—
U.S. Treasury securities...............................
Other securities.............................................
To others..........................................................
Other, gross ..........................................................
Commercial and industrial..............................
Agricultural......................................................
For purchasing or carrying securities:
To brokers and dealers:
U.S. Treasury securities...........................
Other securities.........................................
To others:
U.S. Treasury securities...........................
Other securities.........................................
To nonbank financial institutions:
Personal and sales finance cos., etc.............
O ther.............................................................
Real estate........................................................
To commercial banks:
Domestic.......................................................
Consumer instalment.......................................
Foreign governments, official institutions, etc.
All other loans..................................................
Less : Loan reserve and unearned income on
loans....................................................
Investments:
U.S. Treasury securities........................................
Feb. 16
Feb. 23
Mar. 2
Mar. 9
Mar. 16
Mar. 23
Mar. 30
316,261
318,251
318,029
319,350
322,382
324,144
321,116
320,829
17,474
18,192
18,429
18,562
21,091
20,376
17,454
17,605
14,242
14,937
15,423
15,297
16,859
14,896
14,116
14,055
1,921
439
872
1,968
542
745
1,781
730
495
1,892
577
796
2,438
616
1,178
3,167
623
1,690
1,994
451
893
2,116
517
917
217,365
217,956
217,931
219,104
218,951
220,273
221,092
220,925
81,209
4,065
81,458
4,059
81,810
4,052
82,153
4,078
82,343
4,108
82,890
4,125
83,202
4,130
82,835
4,147
225
3,397
186
3,562
186
3,284
172
3,451
169
3,450
362
3,215
229
3,433
208
3,509
62
2,158
64
2,142
62
2,138
59
2,136
58
2,140
59
2,155
58
2,147
61
2,155
4,714
10,774
55,213
4,686
10,689
55,390
4,658
10,575
55,473
4,706
10,621
55,541
4,710
10,652
55,550
4,755
10,679
55,845
4,860
10,593
55,939
4,756
10,655
56,024
1,290
3,162
35,348
1,427
14,321
1,260
3,216
35,420
1,414
14,410
1,241
3,158
35,432
1,402
14,460
1,336
3,126
35,500
1,423
14,802
1,230
3,065
35,447
1,394
14,635
1,364
3,101
35,498
1,354
14,871
1,436
3,076
35,593
1,462
14,934
1,434
3,053
35,778
1,433
14,877
6,953
210,412
6,989
7,000
7,014
210,931
6,979
7,053
7,086
210,967
212,125
211,937
213,220
214,006
213,864
36,653
37,402
36,954
37,330
37,876
38,459
37,995
37,660
7,178
20,635
3,066
7,212
20,463
2,942
7,055
20,353
3,064
7,865
7,617
7,204
7,135
7,201
7,580
7,061
32
33
Bills....................................................................
Notes and bonds, by maturity:
Within 1 year................................................
1 to 5 years....................................................
After 5 years.................................................
Other securities .....................................................
Obligations of States and political
subdivisions:
Tax warrants, short-term notes, and bills..
All other........................................................
Other bonds, corporate stocks, and
securities:
Certificates of participation2.......................
All other, including corporate stocks.........
34
35
36
37
38
39
Cash items in process of collection.........................
Reserves with F. R. Banks......................................
Currency and coin....................................................
Balances with domestic banks.................................
Investments in subsidiaries not consolidated........
Other assets..............................................................
20,466
15,473
4,490
6,162
1,369
32,800
23,647
14,614
4,663
6,535
1,348
32,323
26,221
16,049
4,853
7,012
1,334
33,272
26,446
14,317
4,580
6,876
1,322
33,555
21,810
12,853
4,468
6,796
1,365
33,409
25,421
14,290
4,690
7,147
1,389
33,757
22,244
17,738
4,822
6,387
1,352
33,584
22,351
16,013
4,942
7,618
1,365
34,333
40 Total assets/total liabilities.......................................
397,021
401,381
406,770
406,446
403,083
410,838
407,243
407,451
115,919
120,583
121,840
123,729
118,278
126,948
118,237
120,302
26
27
28
29
30
31
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
Deposits:
Demand deposits....................................................
Individuals, partnerships, and corporations..
States and political subdivisions.....................
U.S. Govt..........................................................
Domestic interbank:
Commercial..................................................
Mutual savings.............................................
Foreign:
Governments, official institutions, etc.........
Commercial banks.......................................
Certified and officers’ checks...........................
Individuals, partnerships, and corporations:
Savings..........................................................
States and political subdivisions.....................
Domestic interbank..........................................
Foreign governments, official institutions, etc.
56 Federal funds purchased, etc.4...............................
Borrowings from :
57 F. R. Banks..........................................................
58 Others....................................................................
59 Other liabilities, etc. 5..............................................
60 Total equity capital and subordinated
notes/debentures 6.............................................
6,912
18,729
3,147
7,188
51,722
7,055
19,640
3,090
7,148
19,501
3,101
7,243
19,972
2,980
7,223
20,413
3,039
51,690
51,715
51,333
51,478
52,089
51,661
51,700
5,559
34,147
5,368
34,158
5,318
34,279
5,297
34,134
5,365
34,211
5,668
34,475
5,370
34,351
5,347
34,481
1,983
10,033
1,961
10,203
1,925
10,193
1,934
9,968
1,986
9,916
1,994
9,952
2,056
9,884
2,077
9,795
92,489
5,370
1,124
95,013
5,532
1,689
95,492
5,579
1,493
96,917
5,680
1,208
94,153
5,092
1,171
97,843
5,312
4,862
94,035
5,582
968
95,109
5,239
958
11,779
370
13,151
396
13,988
388
14,159
441
12,744
402
13,508
406
12,711
375
13,699
373
234
1,393
3,160
214
1,256
3,332
246
1,326
3,328
245
1,349
3,730
235
1,299
3,182
188,679
188,394
188,319
211
1,384
3,422
219
1,292
3,055
234
1,338
3,352
188,729
190,015
190,303
191,513
192,150
81,490
81,599
18,864
3,020
3,140
81,499
81,338
18,868
3,017
3,074
81,778
81,149
18,848
2,942
2,993
82,015
81,396
18,754
3,001
2,936
82,598
81,909
18,845
3,092
2,923
82,956
81,815
18,689
3,243
2,923
83,346
82,424
18,819
3,308
2,966
83,708
82,786
18,722
3,321
2,976
47,630
47,651
51,560
48,210
49,018
47,712
50,634
49,259
58
1,870
12,872
20
1,909
12,976
0
1,999
13,226
10
1,850
13,965
7
1,902
13,822
5
2,154
13,755
974
2,216
13,707
109
2,064
13,671
29,993
29,848
29,826
29,953
30,041
29,961
29,962
29,896
1 Includes securities purchased under agreements to resell.
2 Federal agencies only.
3 Includes U.S. Govt, and foreign bank deposits not shown sepa
rately.
4 Includes securities sold under agreements to repurchase.
7,378
5 Includes minority interest in consolidated subsidiaries and deferred
tax portion of reserves for loans.
6 Includes reserves for securities and contingency portion of reserves
for loans.
Weekly Reporting Banks
A23
1.30 LARGE W EEKLY REPORTING CO M M ERCIAL BANKS Balance Sheet Memoranda
M illions o f dollars, W ednesday figures
1977
Account and bank group
Feb. 9
1
2
3
Total loans (gross) and investments, adjusted1
Large banks ......................................................
New York City banks.................................
Banks outside New York City....................
A
5
6
Total loans (gross), adjusted
Large banks ......................................................
New York City banks.................................
Banks outside New York City....................
7
8
9
Demand deposits, adjusted2
Large banks ......................................................
New York City banks.................................
Banks outside New York City....................
10
11
12
13
14
15
16
17
18
Large negotiable time CD’s included in time and
savings deposits3
Total:
Large banks..........................................................
New York City............................................
Banks outside New York City....................
Issued to IPC’s :
Large banks ......................................................
New York City Banks.................................
Banks outside New York City....................
Issued to others:
Large banks ......................................................
New York City banks.................................
Banks outside New York City....................
All other large time deposits4
Total:
19 Large banks................................... ......................
20
New York City banks.................................
21
Banks outside New York City....................
Issued to IPC’s :
22 Large banks ......................................................
23
New York City banks.................................
24
Banks outside New York City....................
Issued to others:
25 Large banks ......................................................
26
New York City banks.................................
27
Banks outside New York City....................
37
38
39
Savings deposits, by ownership category
Individuals and nonprofit organizations:
Large banks ......................................................
New York City banks.................................
Banks outside New York City....................
Partnerships and corporations for profit:5
Large banks ......................................................
New York City banks.................................
Banks outside New York City....................
Domestic governmental units:
Large banks ......................................................
New York City banks.................................
Banks outside New York C ity....................
All other:6
Large banks ........................................................
New York City banks...................................
Banks outside New York City.....................
40
41
42
Gross liabilities of banks to their foreign
branches
Large banks ........................................................
New York City banks...................................
Banks outside New York City.....................
43
44
45
Loans sold outright to selected institutions by all
large banks7
Commercial and industrial...............................
Real estate.........................................................
All other.............................................................
28
29
30
31
32
33
34
35
36
Feb. 16
Feb. 23
Mar. 2
Mar. 9
Mar. 16
Mar. 23
Mar. 30
395,642
398,188
396,723
399,551
401,221
405,809
400,281
400,405
87,960
307,682
89,145
309,043
287,213
288,629
67,906
219,307
68,678
219,951
107,987
106,515
25,437
82,550
62,148
22,155
39,993
40,737
287,689
67,993
219,696
104,496
89,855
309,696
290,050
107,691
107,135
61,225
21,639
39,586
60,374
21,184
39,190
60,206
20,916
39,290
39,912
39,350
39,375
14,706
25,206
21,411
21,313
14,384
24,966
21,024
6,800
14,224
290,516
68,563
221,953
24,358
80,138
15,170
25,567
89,914
311,307
69,017
221,033
24,419
82,096
25,775
81,916
24,582
82,553
60,774
20,941
39,833
39, 733
90,872
314,937
294,448
70,059
224,389
108,831
25,674
83,157
60,277
20,472
39,805
39,141
87,631
312,650
290,340
291,441
106,875
106,895
67,346
222,994
24,561
82,314
68,400
223,041
23,601
83,294
61,253
20,642
40,611
61,768
20,858
40,910
40,113
40,473
14,282
25,093
14,265
25,468
13,829
25,312
14,205
25,908
20,831
21,041
21,136
21,140
14,251
26,222
21,295
6,933
14,380
26,101
5,289
20,812
26,076
5,247
20,829
26,141
5,287
20,854
26,091
5,303
20,788
25,990
5,200
20,790
25,928
5,303
20,625
25,778
5,247
20,531
25,723
5,252
20,471
14,239
14,224
14,253
14,303
14,221
14,224
14,065
14,113
3,898
10,341
3,876
10,348
11,862
11,852
1,391
10,471
84,600
1,371
10,481
84,656
3,888
10,365
11,888
1,399
10,489
84,891
515
4,218
524
4,276
2,565
2,607
2,613
110
26
78
27
2,671
3,036
2,545
212
1,137
2,553
211
1,096
1,722
949
2,009
1,027
85,209
4,810
4,733
509
4,228
105
1,352
10,436
4,800
4,737
136
11,788
9,628
75,581
9,567
75,089
442
2,165
3,951
10,352
9,587
75,304
9,511
75,089
418
2,147
6,634
14,197
88,004
312,401
6,985
14,426
1 Exclusive of loans and Federal funds transactions with domestic
commercial banks.
.
2 All demand deposits except U.S. Govt, and domestic commercial
banks, less cash items in process of collection.
3 Certificates of deposit (CD’s) issued in denominations of $100,000 or
more.
4 All other time deposits issued in denominations of $100,000 or more
(not included in large negotiable CD’s).
88,358
308,365
6,676
14,365
3,862
10,359
11,769
1,338
10,431
85,728
6,437
14,703
3,842
10,223
11,713
1,405
10,308
86,572
6,607
14,688
3,861
10,252
11,610
1,391
10,219
87,031
9,745
76,827
9,816
77,215
533
4,333
533
4,398
4,931
4,978
2,600
2,570
2,521
452
2,148
446
2,124
422
2,099
2,510
A ll
103
92
95
83
59
96
24
74
22
3,831
3,515
2,644
205
1,106
86,195
4,866
471
2,130
2,612
212
1,118
1,401
10,303
4,906
2,601
2,486
1,029
11,704
9,716
76,479
531
4,375
2,930
901
3,902
10,322
9,675
76,053
528
4,282
439
2,174
6,643
14,493
81
22
72
20
73
22
3,158
4,785
3,682
2,359
799
2,667
211
1,073
3,827
958
2,674
173
1,078
2,643
1,039
2,718
213
1,067
544
4,434
2,038
109
88
21
3,789
3,027
762
2,721
216
1,105
5 Other than commercial banks.
6 Domestic and foreign commercial banks, and official international
organizations.
7 To bank’s own foreign branches, nonconsolidated nonbank af
filiates of the bank, the bank’s holding company (if not a bank), and
nonconsolidated nonbank subsidiaries of the holding company.
A24
1.31
Domestic Financial Statistics □ April 1977
L A R G E W E E K L Y R E P O R T IN G C O M M E R C IA L B A N K S
Millions of dollars
C om m ercial and Industrial L oan s
Outstanding
Industry group
Net change during—
1977
Mar. 2
Mar. 9
Mar. 16
1976
Mar. 23
Mar. 30
Q4
1977
Jan.
Ql
Feb.
|
Mar.
Total loans classified2
1 Total....................................................
95,735
95,739
96,240
96,148
95,946
4,037
-7 6 0
-2 ,1 9 6
664
I ll
2
3
4
5
6
Durable goods manufacturing:
Primary metals...............................
Machinery.......................................
Transportation equipment.............
Other fabricated metal products...
Other durable goods......................
2,579
4,704
2,190
1,778
3,231
2,621
4,711
2,171
1,829
3,275
2,626
4,866
2,296
1,889
3,365
2,619
4,790
2,310
1,888
3,350
2,577
4,762
2.294
1,886
3,358
138
41
-1 8 0
22
-249
377
104
64
176
104
189
-7 2
-2 0
-1 2
-1 4 7
148
44
-1 3
77
81
40
132
97
111
170
7
8
9
10
11
Nondurable goods manufacturing:
Food, liquor, and tobacco.............
Textiles, apparel, and leather........
Petroleum refining..........................
Chemicals and rubber....................
Other nondurable goods................
3,310
3,318
2,489
2,616
1,972
3,345
3,397
2,446
2,661
1,995
3,377
3,414
2,352
2,714
2,020
3,378
3.408
2,340
2,726
2,018
3,366
3,375
2,348
2,690
2,037
128
-5 0 4
120
18
14
-1 3 4
379
-293
132
140
-8 8
121
-2
-1 3
2
-4 3
128
-1 1 7
31
61
-3
130
-1 7 4
114
77
12 Mining, including crude petroleum
and natural gas...........................
Trade:
13 Commodity dealers.........................
14 Other wholesale..............................
15 Retail...............................................
16 Transportation....................................
17 Communication..................................
18 Other public utilities...........................
19 Construction.......................................
20 Services................................................
21 All other domestic loans...................
22 Bankers acceptances...........................
23 Foreign commercial and industrial
loans............................................
M
7,422
7,451
7,477
7,443
7,436
361
115
84
12
19
2,158
6,488
6,374
5,216
1,588
5,648
3,935
10,854
2,142
6,610
6,405
5,174
1,475
5,604
3,932
10,909
2,187
6,693
6,452
5,203
1,512
5,619
3,903
10,913
2,134
6,695
6,546
5,196
1,443
5,591
3,968
10,919
2,140
6,730
6,532
5,178
1,349
5,556
3,974
10,965
377
211
-268
81
-131
-101
-203
129
207
470
434
-1 2 7
-9
-4 5
65
410
-2 1
-5 2
3
-263
53
12
-4 8
243
197
165
100
135
183
92
67
62
31
357
331
1
-245
-149
46
105
7,542
4,378
7,451
4,201
7,512
3,972
7,679
3,870
7,656
3,903
576
3,285
-263
-2 ,9 7 0
-415
-1,811
-1 0 6
-631
258
-528
5,945
5,934
5,878
5,837
5,834
172
-9 6
61
-9
-1 4 8
320
241
-248
-1 9 2
-4 2
-1 4
116,774
4,264
191
-2 ,1 4 5
1,013
1,323
em o:
24 Commercial paper included in
total classified loans1.................
25 Total commercial and industrial
loans of all large weekly
reporting banks...........................
116,198
116,325
117,060
1977
1976
Nov. 24
117,099
Dec. 29
Jan. 26
Feb. 23
1976
Mar. 30
1977
Q4
Ql
1977
Jan.
Feb.
Mar.
“Term” loans classified3
26 Total....................................................
r44,812
45,211
45,291
45,735
45,838
r450
627
80
444
103
27
28
29
30
31
Durable goods manufacturing:
Primary metals................................
Machinery.......................................
Transportation equipment.............
Other fabricated metal products...
Other durable goods.......................
1,253
2,637
1,303
777
1,655
1,317
2,585
1,352
776
1,625
1,449
2,587
1,365
767
1,549
1,481
2,551
1,298
815
1,585
1,521
2,552
1,339
820
1,625
103
-9 0
-2 9
20
r- l l l
204
-3 3
-1 3
44
132
2
13
-9
-7 5
32
-3 6
-6 7
48
36
40
1
41
5
40
32
33
34
35
36
Nondurable goods manufacturing:
Food, liquor, and tobacco.............
Textiles, apparel, and leather........
Petroleum refining..........................
Chemicals and rubber....................
Other nondurable goods................
1,392
1,118
1,864
1,449
950
1,398
1,098
1,972
1,444
954
1,449
1,033
1,925
1,456
975
1,447
1,036
1,901
1,522
987
1,412
1,071
1,770
1,547
1,032
-3 7
-4 6
r64
-2 0
r 19
14
-2 7
-202
103
78
51
-6 5
-4 6
12
20
-2
3
-2 4
66
12
-3 5
35
-131
25
45
5,517
5,683
5,793
5,761
5,856
341
173
110
-3 2
95
r219
1,474
2,249
3,809
913
3,549
rl ,665
5,151
2,567
200
1,463
2,045
3,937
847
3,664
1,629
4,998
2,600
227
1,483
2,085
3,720
810
3,762
1,638
5,212
2,383
219
1,478
'2,212
r3,830
829
3,869
1,683
5,216
2,352
199
1,478
2,273
3,773
779
3,907
1,661
5,111
2,426
-9
69
-8 9
27
20
40
-218
-3 7
98
9
214
-217
-8
-5
-2 0
-5 6
60
r —62
31
181
-1
15
228
-1 6 4
-6 8
243
32
113
-1 7 4
r3,301
3,624
3,623
3,663
3,686
'108
62
37 Mining, including crude petroleum
and natural gas...........................
Trade:
38 Commodity dealers.........................
39 Other wholesale..............................
40 Retail...............................................
41 Transportation...................................
42 Communication..................................
43 Other public utilities...........................
44 Construction.......................................
45 Services................................................
46 All other domestic loans...................
47 Foreign commercial and industrial
loans............................................
1 Reported for the last Wednesday of each month.
2 Includes “term” loans, shown below.
3 Outstanding loans with an original maturity of more than 1 year and
r3
-1
'110
19
107
45
4
40
61
-5 7
-5 0
38
-2 2
-105
74
-3 1
23
m i
all outstanding loans granted under a formal agreement—revolving credit
or standby—on which the original maturity of the commitment was in
excess of 1 year.
A25
Deposits and Commercial Paper
1.32
G R O S S D E M A N D D E P O S IT S o f In d ivid u als, Partnerships, and C orp oration s
Billions of dollars; estimated daily-average balances
All commercial banks
Type of holder
1972
Dec.
1973
Dec.
1974
Dec.
1975
1976
June
Sept.
Dec.
Mar.
June
Sept.
Dec.
1 All holders, IP C .....................................................
208.0
220.1
225.0
222.2
227.0
236.9
227.9
234.2
236.1
250.1
2 Financial business..................................................
3 Nonfinancial business............................................
18.9
109.9
65.4
1.5
12.3
19.1
116.2
70.1
2.4
12.4
19..0
118.8
73.3
2.3
11.7
19.4
115.1
74.8
2.3
10.6
19.0
118.7
76.5
2.2
10.6
20.1
125.1
78.0
2.4
11.3
19.9
116.9
77.2
2.4
11.4
20.3
121.2
78.8
2.5
11.4
19.7
122.6
80.0
2.3
11.5
22.3
130.2
82.6
2.7
12.4
5 Foreign....................................................................
6 Other.......................................................................
All weekly reporting banks
1973
Dec.
1974
Dec.
1975
Dec.
7 All holders, IP C .....................................................
118.1
119.7
8 Financial business..................................................
9 Nonfinancial business............................................
14.9
66.2
28.0
2.2
6.8
14.8
66.9
29.0
2.2
6.8
11 Foreign....................................................................
12 Other.......................................................................
N o t e .— Figures include cash items in process of collection. Estimates of
gross deposits are based on reports supplied by a sample of commercial
1.33
Instrument
1 Commercial paper, all issuers...............................
49,144
Financial companies: 1
Dealer-placed paper:2
Total................................................................
Bank-related....................................................
Directly-placed paper:3
Total................................................................
Bank-related....................................................
4,611
1,814
4
5
1977
Aug.
Sept.
Oct.
Nov.
Dec.
Jan.
Feb.
124.4
112.9
121.4
123.8
124.3
128.5
127.4
123.0
15.6
69.9
29.9
2.3
6.6
15.0
61.4
29.2
1.8
5.6
15.4
66.6
30.7
2.2
6.6
16.8
68.4
29.6
2.4
6.6
16.2
68.7
30.4
2.5
6.6
17.5
69.7
31.7
2.6
7.1
16.7
69.5
32.0
2.2
7.1
15.6
67.4
31.1
2.4
6.5
banks. Types of depositors in each category are described in the June 1971
B u l l e t in , p. 466.
C O M M E R C IA L P A P E R A N D B A N K E R S A C C E P T A N C E S O U T S T A N D IN G
Millions of dollars, end of period
1974
Dec.
2
3
1976
31,839
6,518
1975
Dec.
1976
Dec.
47,690 r52,041
6,239
1,762
7,294
’•1,900
1977
1976
Aug.
Sept.
Oct.
Nov.
Dec.
Jan.
r50,100 r49,852 r51,370 r53,116 r52,041 r53,905
6,243
rl ,612
6,347
*•1,644
6,674
rl ,703
7,294
*■1,900
Feb.
54,216
7,347
*•1,895
7,291
1,929
31,276 *•32,416 r31.537 r31,476 r31,880 *•32,691 *32,416 *■32,753
6,892 r5,959 r5,916
r6 ,250 *•5,864 *•5,944 *•5,959 *•5,637
32,176
5,502
7,113
*•1,825
12,694
10,175
12,331
12,320
12,029
12,816
13,312
12,331
13,805
14,749
18,484
6 Nonfinancial companies4......................................
18,727
22,523
19,383
19,599
20,312
20,678
22,523
22,362
22,187
6,798
9,031
10,442
Held by:
7,333
5,899
1,435
10,442
8,769
1,673
6,107
3,685
542
Foreign correspondents.................................
999
1,109
1,126
293
991
375
808
442
Others..................................................................
12,150
9,975
Based on:
14 Imports into United States...............................
15
16 All other..............................................................
4,023
4,067
10,394
3,726
4,001
11,000
8
9
10
11
12
13
Accepting banks..................................................
F.R. Banks:
4,226
1 Institutions engaged primarily in activities such as, but not limited to,
commercial, savings, and mortgage banking; sales, personal, and mortgage
financing; factoring, finance leasing, and other business lending; insurance
underwriting; and other investment activities.
2 Includes all financial company paper sold by dealers in the open
market.
5,449
658
4,530
4,355
10,498
7,991
7,011
1,172
6,654
1,337
991
375
191
374
322
440
11,629 *•11,111 *•10,715 *•13,615
13,434
4,992
5,137
12,233
5,138
5,074
11,974
7,706
1,325
838
417
337
387
188
349
4,498
4,420
10,680
8,183
8,769
1,673
6,789
1,170
13,447 r 12,026 *•11,545
4,992
4,818
12,713
7,959
5,865
933
4,737
4,715
10,860
4,667
4,628
11,383
4,992
4,818
12,713
3 As reported by financial companies that place their paper directly
with investors.
4 Includes public utilities and firms engaged primarily in activities such
as communications, construction, manufacturing, mining, wholesale and
retail trade, transportation, and services,
A26
Domestic Financial Statistics □ April 1977
1.34 PRIM E RATE CHARGED BY BANKS on Short-term Business Loans
Per cent per annum
Rate
Effective date
1975—Jan.
Feb.
9
15
20
28
Month
1975—Aug. 12
1014
10
3
10
18
24
Effective date
9Va
9
9%
Oct. 27
5
m
Dec.
2
iv a
83/4
81/2
m
1976—Jan.
12
21
7
6V4
m
m
June
May 20
1
7
7
7V4
m
June
Aug.
2
7
7
Oct.
4
Nov.
1
6V
4
6V2
6V
4
8
9
July 18
28
7%
m
Dec. 13
7.00
6.75
6.75
6.75
6.75
7.20
7.25
7.01
7.00
6.78
6.50
6.35
1977—Jan..
Feb.
Mar.
m
Nov.
7.66
7.88
7.96
7.53
7.26
1976—Jan..
Feb.
Mar.
Apr.
May
June
July.
Aug.
Sept.
O ct.,
Nov.
Dec.
8
5
10
18
24
Mar.
1.35
1975—Aug.
Sept.
Oct..
Nov.
Dec.
7%
Sept. 15
9V4
Average rate
6.25
6.25
6.25
IN T E R E S T R A T E S C H A R G E D B Y B A N K S on B usiness L oan s
Per cent per annum
Size of loan (in thousands of dollars)
All sizes
Center
10-99
1--9
1976
Nov.
1976
Aug.
1976
Nov.
1976
Aug.
1976
Nov.
100-499
1976
Aug.
1976
Nov.
1976
Aug.
500-999
1976
Nov.
1,000 and over
1976
Aug.
1976
Nov.
1976
Aug.
Short-term rates
1
2
3
4
5
6
7
7.28
New York C ity.................
7 Other Northeast............
8 North Central................
8 Southwest.......................
4 West Coast.....................
7.80
8.83
9.06
8.18
8.58
7.66
7.99
7.31
7.84
7.02
7.61
6.88
7.62
7.28
7.51
7.33
7.52
7.48
8.18
7.70
7.95
7.75
8.15
8.56
9.22
8.45
9.13
8.51
8.69
8.85
9.41
8.65
9.33
8.83
9.26
7.94
8.34
8.12
8.48
7.82
8.46
8.40
8.84
8.50
8.76
8.24
8.79
7.43
7.88
7.69
7.71
7.39
7.88
7.91
8.25
7.85
8.00
7.80
8.28
7.24
7.49
7.36
7.04
7.21
7.44
7.77
8.16
7.71
7.85
7.61
8.06
6.74
7.34
7.03
7.07
7.12
7.34
7.36
7.98
7.55
7.54
7.55
8.05
Revolving credit rates
8 All 35 centers........................
9
10
11
12
13
14
New York City.................
7 Other N ortheast............
8 North Central................
7 Southeast........................
4 West Coast.....................
7.19
7.87
7.18
6.92
7.54
7.05
7.45
7.11
8.14
7.59
7.96
7.48
7.81
7.73
8.37
8.70
8.14
8.33
7.60
8.02
7.41
7.80
7.12
7.88
7.23
8.15
8.52
8.31
8.19
8.77
7.25
8.00
8.94
8.75
8.74
9.10
7.86
8.20
8.95
8.09
7.96
7.85
8.26
8.22
9.03
8.40
8.09
8.08
7.21
7.26
8.05
7.56
7.74
7.58
7.70
7.67
8.50
8.16
8.20
7.95
6.97
7.56
7.75
8.36
7.74
7.88
6.77
7.24 " '7 A 7
7.91
7.45
7.19
6.75
7.39
6.83
7.39
7.01
8.19
7.47
7.90
7.13
7.80
7.68
Long-term rates
15 All 35 centers........................
7.48
8.45
9.39
16
17
18
19
20
21
7.36
6.64
7.66
7.59
7.73
8.04
8.52
8.62
8.05
8.88
8.42
8.67
7.19
9.22
9.20
9.87
10.54
8.70
New York City.................
7 Other Northeast.............
8 North Central................
7 Southeast........................
8 Southwest.......................
4 West Coast.....................
9.61
8.88
9.02
8.14
8.55
8.13
8.60
7.24
8.40
9.40
8.83
9.60
10.85
9.28
8.55
8.84
9.03
9.35
9.05
8.54
8.27
9.43
9.07
9.08
9.04
8.58
7.93
7.95
8.35
7.93
8.28
8.31
8.05
8.93
8.26
9.88
8.23
8.81
8.06
7.92
8.99
4.00
8.44
7.78
8.44
7.50
8.36
8.18
8.69
10.00
7.26
5.73
7.32
7.79
7.20
8.03
8.56
8.70
7.92
8.06
8.30
8.46
N o t e .—Weighted-average rates based on sample of loans made during
first 7 days of the survey month.
Securities M a r k e ts
A 27
1.36 INTEREST RATES Money and Capital Markets
Averages, per cent per annum
Instrument
1974
1975
1976
1977
1976
Dec.
Feb.
Jan.
1977, week ending—
Mar.
Mar. 5 Mar. 12 Mar. 19 Mar. 26 Apr. 2
Money market rates
1
2
Prime commercial paper 1
90- to 119-day...............
4- to 6-month................
10.05
9.87
6.26
6.33
5.24
5.35
4.66
4.70
4.72
4.74
4.76
4.82
4.75
4.87
4.75
4.85
4.75
4.85
4.75
4.88
4.75
4.88
4.75
4.88
4.85
3 Finance company paper, directly placed,
3- to 6- month 2.................................
8.62
6.16
5.22
4.56
4.64
4.75
4.77
4.75
4.75
4.75
4.85
4 Prime bankers acceptances, 90-day 3.
9.92
6.30
5.19
4.62
4.81
4.83
4.80
4.83
4.84
4.81
4.79
4.76
5 Federal funds 4...................................
10.51
5.82
5.05
4.65
4.61
4.68
4.69
4.68
4.63
4.62
4.77
4.74
10.27
6.43
5.26
5.15
4.67
4.44
4.82
4.68
4.65
4.69
4.83
4.74
4.88
4.75
4.87
4.75
4.83
4.75
4.80
4.71
4.81
4.75
10.96
6.97
5.57
5.01
5.14
5.08
5.13
5.15
5.09
5.10
7.84
7.95
7.71
5.80
6.11
6.30
4.98
5.26
5.52
4.35
4.51
4.64
4.62
4.83
5.00
4.67
4.90
5.16
4.60
4.88
5.19
4.66
4.93
5.23
4.63
4.92
5.22
4.59
4.87
5.18
4.57
4.85
5.17
4.57
4.81
5.15
7.886
7.926
5.838
6.122
4.989
5.266
4.354
4.513
4.597
4.783
4.662
4.896
4.613
4.883
4.708
4.943
4.652
4.965
4.545
4.813
4.553
4.826
4.609
4.870
6
7
Large negotiable certificates of deposit
3-month, secondary market 5............
3-month, primary market ...............
8 Euro-dollar deposits, 3-month ?.
9
10
11
12
13
U.S. Govt, securities
Bills: 8
Market yields:
3-month................
6-month................
1-year.............
Rates on new issue:
3-month................
6-month................
5.24
14
15
Notes and bonds maturing in— 9
9 to 12 m onths.........................
3 to 5 years...............................
8.25
7.81
6.70
7.55
5.84
6.94
4.92
5.96
5.34
6.49
5.50
6.69
5.50
6.73
5.55
6.76
5.54
6.77
5.50
6.71
5.46
6.68
5.45
6.70
16
17
18
19
Constant maturities: 10
1-yea r
2-yea r
3-yea r
5-year.........................
8.18
6.76
7.82
7.80
7.49
7.77
5.88
6.31
6.77
7.18
4.89
5.38
5.68
6.10
5.29
5.90
6.22
6.58
5.47
6.09
6.44
6.83
5.50
6.09
6.47
6.93
5.55
6.11
6.49
6.96
5.52
6.12
6.50
6.96
5.49
6.08
6.46
6.90
5.49
6.06
6.44
6.89
5.45
6.05
6.45
6.94
7.22
7.46
7.75
7.81
7.21
7.23
7.49
7.76
7.82
7.22
7.17
7.45
7.72
7.78
7.20
7.18
7.45
7.71
7.77
7.18
7.22
7.45
7.73
7.79
7.19
Capital market rates
20
21
22
23
24
Government notes and bonds
U.S. Treasury:
Constant maturities:10
7-year................................................
10-year........................... ..................
20-year..............................................
30-year..............................................
Long-term 9..........................................
25
26
27
State and local: 11
Moody’s series:
A aa....................................................
B aa....................................................
Bond Buyer series 12............................
7.71
7.56
8.05
7.90
7.99
8.19
7.42
7.61
7.86
6.37
6.87
7.30
6.92
7.21
7.48
7.16
7.39
7.64
6.99
6.98
6.78
6.39
6.68
7.15
7.20
7.46
7.73
7.80
7.20
5.89
6.53
6.17
6.42
7.62
7.05
5.66
7.49
6.64
5.07
6.73
5.94
5.10
6.58
5.87
5.17
6.50
5.89
5.21
6.41
5.89
5.20
6.47
5.92
5.23
6.43
5.92
5.20
6.40
5.90
5.20
6.40
5.88
5.20
6.35
5.85
9.03
9.57
9.01
8.47
8.41
8.48
8.51
8.51
8.52
8.50
8.51
8.53
29
30
31
32
Corporate bonds
Seasoned issues 13
All industries........................................
By rating groups:
A aa....................................................
A a......................................................
A ........................................................
Baa....................................................
8.57
8.84
9.20
9.50
8.83
9.17
9.65
10.61
8.43
8.75
9.09
9.75
7.98
8.24
8.53
9.12
7.96
8.16
8.45
9.08
8.04
8.26
8.49
9.12
8.10
8.28
8.55
9.12
8.10
8.27
8.52
9.16
8.12
8.26
8.53
9.15
8.09
8.28
8.54
9.10
8.09
8.29
8.56
9.09
8.10
8.31
8.59
9.11
33
34
Aaa utility bonds:14
New issue..............................................
Recently offered issues.........................
9.33
9.34
9.40
9.41
8.48
8.49
7.94
7.93
8.08
8.09
8.22
8.19
8.25
8.29
8.27
8.30
8.32
8.23
8.27
8.22
8.29
8.25
8.26
35
36
Common stocks
Dividend/price ratio:
Preferred stocks....................................
Common stocks...................................
8.23
4.47
8.38
4.31
7.97
3.77
7.70
3.99
7.54
3.99
7.55
4.21
7.56
4.37
4.35
7.51
4.37
7.61
4.29
7.51
4.38
7.56
4.47
7.60
28
1 Averages of the most representative daily offering rate quoted by
dealers.
2 Averages of the most representative daily offering rates published by
finance companies for varying maturities in this range.
3 Beginning Aug. 15, 1974, the rate is the average of the midpoint of
the range of daily dealer closing rates offered for domestic issues; prior
data are averages of the most representative daily offering rate quoted by
dealers.
4 Weekly figures are 7-day averages of daily effective rates for the week
ending Wednesday; the daily effective rate is an average of the rates on
a given day weighted by the volume of transactions at these rates.
5 Averages of the daily midpoints as determined from the range of
offering rates in the secondary market.
6 Posted rates, which are the annual interest rates most often quoted
on new offerings of negotiable CD’s in denominations of $100,000 or
more. Rates prior to 1976 not available. Weekly figures are for Wednes
day dates.
7 Averages
of daily quotations for the week ending Wednesday.
8 Except for new bill issues, yields are computed from daily closing
bid prices. Yields for all bills are quoted on a bank-discount basis.
9 Unweighted averages for all outstanding notes and bonds in maturity
ranges shown, based on daily closing bid prices. “Long-term” includes
all bonds neither due nor callable in less than 10 years.
Yields on the more actively traded issues adjusted to constant
maturities by the U.S. Treasury, based on daily closing bid prices.
11 General obligations only, based on figures for Thursday, from
Moody’s Investors Service.
12 Twenty issues of mixed quality.
13 Averages of daily figures from Moody’s Investors Service.
14 Compilation of the Board of Governors of the Federal Reserve
System.
Issues included are long-term (20 years or more). New-issue yields are
based on quotations on date of offering; those on recently offered issues
(included only for first 4 weeks after termination of underwriter price
restrictions), on Friday close-of-business quotations.
A 28
D om estic Financial Statistics □ A pril 1977
1.37 STOCK MARKET Selected Statistics
1976
Indicator
1974
1975
1976
Sept.
Oct.
1977
Nov.
Dec.
Jan.
Feb.
Mar.
Prices and trading (averages of daily figures)
Common stock prices
1 New York Stock Exchange (Dec. 31,1965 = 50).
=
2 Industrial................................................
3 Transportation.......................................
4 Utility......................................................
5 Finance....................................................
43.84
48.08
31.89
29.82
49.67
45.73
51.88
30.73
31.45
46.62
54.45
60.44
39.57
36.97
52.94
56.30
62.34
40.36
38.77
54.51
54.43
60.07
38.37
38.33
52.74
54.17
59.45
39.28
38.85
53.25
56.34
61.54
41.77
40.61
57.45
56.28
61.26
41.93
41.13
57.86
54.93
59.65
40.59
40.86
55.65
54.67
59.56
40.52
40.18
54.84
6 Standard and Poor’s Corporation (1941-43 = 10)1
82.85
85.17
102.01
105.45
101.89
101.19
104.66
103.81
100.96
100.57
7 American Stock Exchange (Aug. 31,1973 = 100).
79.97
83.15
101.63
102.92
98.99
99.20
104.06
111.04
112.17
111.77
13,883
1,908
18,568
2,150
21,189
2,565
18,892
1,902
17,397
1,700
19,370
2,211
23,621
3,095
23,562
3,268
19,310
2,830
17,814
2,580
Volume of trading (thousands of shares)2
8 New York Stock Exchange...................
9 American Stock Exchange....................
Customer financing (end-of-period balances, in millions of dollars)
10 Regulated margin credit at brokers/dealers
and banks3............................................
11
12
13
14
15
16
17
18
Brokers, total.....................................................
Margin stock4..........................................
Convertible bonds....................................
Subscription issues...................................
Banks, total.......................................................
Margin stocks...........................................
Convertible bonds....................................
Subscription issues...................................
4,836
6,500
r8,995
3,980
5,540
8,166
3,840
137
3
856
5,390
147
3
960
909
815
30
11
r8,788
7,707
7,960
204
2
r829
r786
7,704
'8,640
8,995
8,166
7,790
7,530
168
6
r1,081
7,610
178
2
1,068
r850
r29
r 14
36
15
8,772
7,530
174
3
'1,032
f34
r 15
1,019
34
15
7,960
204
2
829
'801
35
14
'786
'29
14
9,289
8,469
8,270
196
3
8,679
8,480
197
2
820
lie
27
17
19 Unregulated nonmargin stock credit at banks3
2,064
2,281
"3,684
'2,651
2,774
'3,737
'3,684
3,693
M emo: Free credit balances at brokers6
20
Margin-account............................................
21
Cash-account................................................
410
1,425
475
1,525
585
1,855
555
1,710
611
1,580
615
1,740
585
1,855
645
1,930
605
1,815
Margin-account debt at brokers (percentage distribution, end of period)
22 Total......................................
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
By equity class (in per cent):
Under 40............................
40-49..................................
50-59..................................
60-69..................................
70-79..................................
80 or m o r e ................................
45.4
23.0
13.9
8.8
4.6
4.3
25.0
28.8
22.3
11.6
6.9
5.3
13.0
22.0
35.0
15.0
8.7
6.0
12.2
29.9
29.6
14.1
8.0
6.3
15.0
34.0
25.6
12.7
7.2
5.7
14.0
32.0
27.0
13.0
8.0
6.0
13.0
22.0
35.0
15.0
8.7
6.0
15.0
23.0
35.0
13.0
8.0
6.0
23
24
25
26
27
28
Margin requirements® (per cent of market value) effective—
Mar. 11, 1968
29 Margin stocks........................................................
30 Convertible bonds..................................................
31 Short sales..............................................................
June 8, 1968
70
50
70
1 Effective July 1976 includes a new financial group, banks and in
surance companies. With this change the index includes 400 industrial
stocks (formerly 425), 20 transportation (formerly 15 rail), 40 public
utility (formerly 60), and 40 financial.
2 Based on trading for a 5 Vi-hour day.
3 Margin credit includes all credit extended to purchase or carry
stocks or related equity instruments and secured at least in part by stock.
Credit extended by brokers is end-of-month data for member firms of
the New York Stock Exchange; June data for banks are universe totals;
all other data for banks are estimates for all commercial banks based on
data from a sample of reporting banks.
In addition to assigning a current loan value to margin stock generally,
Regulations T and U permit special loan values for convertible bonds
and stock acquired through exercise of subscription rights.
4 A distribution of this total by equity class is shown below.
5 Nonmargin stocks are those not listed on a national securities ex
change and not included on the Federal Reserve System’s list of over-the-
80
60
80
May 6, 1970
65
50
65
Dec. 6, 1971
55
50
55
Nov. 24, 1972
65
50
65
Jan. 3, 1974
50
50
50
counter margin stocks. At banks, loans to purchase or carry nonmargin
stocks are unregulated; at brokers, such stocks have no loan value.
6 Free credit balances are in accounts with no unfulfilled commitments
to the brokers and are subject to withdrawal by customers on demand.
7 Each customer’s equity in his collateral (market value of collateral
less net debit balance) is expressed as a percentage of current collateral
values.
8 Regulations G, T, and U, prescribed in accordance with the Securities
Exchange Act of 1934, limit the amount of credit to purchase and carry
margin stocks that may be extended on securities as collateral by pre
scribing a maximum loan value, which is a specified percentage of the
market value of the collateral at the time the credit is extended. Margin
requirements are the difference between the market value (100 per cent)
and the maximum loan value. The term “margin stocks” is defined in
the corresponding regulation.
Regulation G and special margin requirements for bonds convertible
into stocks were adopted by the Board of Governors effective Mar. 11,
1968.
T h r ift I n s titu tio n s
A 29
1.38 SAVINGS INSTITUTIONS Selected Assets and Liabilities
Millions of dollars, end of period
1974
1975
1976
1976
June
Account
July
Aug.
1977
Sept.
Oct.
Nov.
Dec.
Jan.
Feb.
Savings and loan associations
1 Assets..................................... 295,545 338,233 391,999 366,425 371,770 376,188 379,747 385,013 389,173 391,999 398,299 403,597
2 Mortgages............................. 249,301 278,590 323,130 299,296 303,527 307,766 311,847 315,742 319,273 323,130 326,056 329,104
3 Cash and investment
23,251 30,853 35,660 35,258 35,968 35,815 35,209 36,442 36,605 35,660 38,252 39,503
4 Other...................................... 22,993 28,790 33,209 31,871 32,275 32,607 32,691 32,829 33,295 33,209 33,991 34,990
5 Liabilities and net worth........ 295,545 338,233 391,999
366,425 371,770 376,188 379,747 385,013 389,173 391,999 398,299 403,597
242,974 285,743 336,030 312,904 316,072 318,227 323,800 327,252 329,833 336,030 341,211 344,603
7 Borrowed money .................... 24,780
8 FHLBB............................... 21,508
3,272
3,244
10 Loans in process...................
6,105
11 Other......................................
20,634
19,087
18,173
17,524
3,110
5,128
6,949
15,708
3,379
6,836
8,015
15,016
3,157
6,397
8,176
15,139
3,221
6,572
9,756
18,442
19,779
22,031
20,775
21,010
7,454
10,673
14,828
16,610
16,301
12 Net worth2.............................
M emo:
13 Mortgage loan commitments
outstanding 3.................
18,360
18,856
19,083
18,810
15,832
3,251
6,688
8,779
15,636
3,174
6,735
10,531
21,280
21,398
21,685
21,954
22,031
22,248
22,520
15,773
15,449
15,319
15,467
14,828
15,079
16,914
15,495
3,361
6,628
11,197
18,715
15,571
3,144
6,753
11,918
19,087
15,708
3,379
6,836
8,015
18,455
15,029
3,426
6,718
9,667
18,271
14,661
3,610
6,785
11,418
Mutual savings banks
14 Assets..................................... 109,550 121,056 134,702 128,436 129,826 130,571 131,413 132,455 133,361 134,702 135,827
15
16
17
18
19
20
21
Loans:
Mortgage........................... 74,891
3,812
Other..................................
Securities:
2,555
U.S. Govt...........................
930
State and local government.
Corporate and other4....... 22,550
Cash....................................... 2,167
2,645
Other assets...........................
77,221
4,023
81,554
5,192
78,803
5,137
79,398
5,341
79,781
5,210
80,145
5,478
80,543
5,549
80,884
5,801
81,554
5,192
81,771
5,964
4,740
1,545
27,992
2,330
3,205
5,911
2.420
33;676
2,374
3,574
5,635
2,337
31,493
1,558
3,470
5,640
2,376
32,028
1,538
3,505
5,733
2,339
32,319
1,552
3,576
5,851
2,359
32,432
1,581
3,567
5,796
2,429
32,793
1,695
3,649
5,836
2,466
33,074
1,668
3,632
5,911
2,420
33,676
2,374
3,574
5,991
2,298
34,359
1,814
3,629
109,550 121,056 134,702 128,436 129,826 130,571 131,413 132,455 133,361 134,702 135,827
23 Deposits .................................
24 Regular:5...........................
25
Ordinary savings............
26
Time and other..............
27 Other..................................
28 Other liabilities.....................
29 General reserve accounts.. . .
M emo:
30 Mortgage loan commitments
outstanding 6.................
98,701
109,873 122,802 116,876 117,883 118,225 119,590 120,360 120,971
122,802 123,773
98,221 109,291 121,874 115,985 116,895 117,203 118,510 119,346 120,125 121,874 122,815
64,286 69,653 74,483 72,763 73,223 72,872 73,484 73,610 73,857 74,483 74,591
33,935 39,639 47,391 43,223 43,662 44,331 45,027 45,736 46,268 47,391 48,224
1,022
582
890
988
1,080
1,014
928
480
846
928
958
2,841
3,161
3,490
2,898
2,755
2,853
3,140
3,376
2,853
2,952
2,888
8,719
8,855
8,428
8,781
8,925
8,955
9,015
9,047
7,961
9,047
9,101
2,040
1,803
2,439
2,402
2,433
2,459
2,671
2,548
2,553
2,439
2,584
Life insurance companies
31 Assets.....................
32
33
34
35
36
37
38
39
40
41
42
Securities:
Government........
United States7,
State and local
Foreign 8..........
Business ..............
Bonds..............
Stocks..............
Mortgages..............
Real estate..............
Policy loans............
Other assets............
263,349 289,304 320,555 304,728 307,005 309,295 312,044 313,960 316,505 320,555 322,489
10,900
3,372
3,667
3,861
13,758
4,736
4,508
4,514
17,270
5,156
5,551
6,563
15,947
4,863
5,196
5,888
16,672
5,150
5,263
6,259
16,902
5,922
5,324
6,286
16,862
5,150
5,364
6,348
17,329
5,448
5,446
6,435
17,565
5,606
5,467
6,492
17,270
5,156
5,551
6,563
17.549
5,291
5,614
6,644
119,637 135,317 157,625 147,193 148,617 150,303 152,125 153,298 154,502 157,625 159,464
97,717 107,256 123,149 114,583 116,101 117,806 118,706 120,358 121,659 123,149 125,892
21,920 28,061 34,476 32,610 32,516 32,497 33,419 32,940 32,843 34,476 33,572
86,234
8,331
22,862
15,385
89,167
9,621
24,467
16,971
91,581
10,526
25,849
17,704
89,691
10,004
25,142
16,751
89,753
10,050
25,257
16,656
89,891
10,146
25,383
16,670
90,217
10,175
25,505
17,160
90,323
10,285
25,607
17,118
90,808
10,310
25,710
17,610
91,581
10,526
25,849
17,704
91,615
10.550
25,921
17,390
Credit unions
43 Total assets/liabilities and
capital.............................
44 Federal...............................
45 State...................................
31,948
16,715
15,233
38,037
20,209
17,828
44,897
24,164
20,733
41,884
22,520
19,364
41,729
22,385
19,344
42,266
22,698
19,658
43,079
23,198
19,881
43,415
23,283
20,132
44,089
23,668
20,421
44,835
24,164
20,671
44,906
24,188
20,718
45,798
24,756
21,042
46 Loans outstanding.................
24,432
34,293
34,188
34,549
28,169
34,033
31,089
31,555
32,300
33,093
33,275
33,732
12,730
11,702
14,869
13,300
18,022
16,011
16,421
14,668
16,614
14,941
17,065
15,235
17,458
15,635
17,522
15,753
17,786
15,946
49 Savings ................................... 27,518
50 Federal (shares)................. 14,370
51 State (shares and deposits). 13,148
33,013
39,264
36,675
36,615
36,752
37,436
19,663
16,952
19,783
16,969
20,167
17,269
37,854
38,281
48
State...................................
For notes see bottom of page A30.
17,530
15,483
21,149
18,115
19,696
16,979
20,358
17,496
20,597
17,684
18,202
16,091
38,968
20,980
17,988
18,081
16,107
39,344
21,165
18,179
18,275
16,274
39,981
21,559
18,422
A 30
D om estic Financial Statistics □ A pril 1977
1.39 FEDERAL FISCAL AND FINANCING OPERATIONS
Millions of dollars
Fiscal year
Type of account or operation
1
2
3
4
5
U.S. Budget
Receipts........................................
Outlays 1,2 ...................................
Surplus, or deficit ( — ..............
)
Trust funds...............................
Federal funds 3 .........................
6
7
Off-budget entities surplus, or
deficit ( —
)
Federal Financing Bank outlays.
Other 1 / .......................................
U.S. Budget plus off-budget, in
cluding Federal Financing Bank
Surplus, or deficit ( — ...................
)
Financed by:
9
Borrowing from the public 2. . .
10
Cash and monetary assets (de
crease, or increase ( —
))___
11
O th ers........................................
8
M emo:
12 Treasury operating balance (level, end
of period)....................................
13 F.R. Banks.....................................
14 Tax and loan accounts..................
15 Other demand accounts 6..............
1975
1976
Transition
quarter
(JulySept.
1976)
1976
1977
HI
H2
160,552
181,369
-20,816
5,503
-26,320
157,961
193,719
29,472
31,891
29,977
32,640
-1 ,9 5 2
-11,021
139,455
185,097
-45,642
-3,125
-42,517
- 3 5 ,7 5 8
- 2 ,4 1 9
-2 ,6 6 4
280,997
326,105
300,005
366,466
81,773
94,746
-6 6 ,4 6 1
-12,973
2,409
-68,870
1975
H2
- 4 5 ,1 0 8
7,419
-52,526
Calendar year
-4,621
-31,137
Jan.
1,737
-4 ,1 5 6
-2 ,3 4 4
-321
24,327
30,880
- 6 ,5 5 4
1,099
-7 ,6 5 4
-6 ,3 8 9
-1 ,6 5 2
-5,915
-1,355
-2,575
793
-2,6 9 3
-236
-3 ,2 2 2
-1 ,1 1 9
-5 ,1 7 6
3,809
-1,598
48
-1 ,0 0 9
-1,881
-460
9
-53,149
-7 3 ,7 3 1
-14,755
-48,571
-25,158
-37,125
-3 ,9 6 9
-5 ,5 5 4
-7 ,0 0 5
50,867
82,922
18,027
49,361
33,561
35,457
6,306
3,157
9,118
-320
2,602
-7 ,7 9 6
-1 ,3 9 6
-2 ,8 9 9
-373
-2 ,0 4 6
1,256
-7 ,9 0 9
-495
2,153
-485
-3,527
1,189
-1,5 8 3
3,980
-1 ,1 9 4
-9 2 0
7,591
5,773
1,475
343
14,836
11,975
2,854
7
17,418
13,299
4,119
8,452
7,286
1,159
7
14,836
11,975
2,854
7
11,670
10,393
1,277
11,670
10,393
1,277
12,688
11,397
1,292
14,599
12,179
2,420
1 Outlay totals reflect the reclassification of the Export-Import Bank
from off-budget status to unified budget status.
2 Export-Import Bank certificates of beneficial interest (effective July
1, 1975) and loans to Pefco are treated as debt rather than asset sales.
3 Half years calculated as a residual of total surplus/deficit and trust
fund surplus/deficit.
4 Includes Pension Benefit Guaranty Corp., Postal Service Fund, Rural
Electrification and Telephone Revolving Fund, Rural Telephone Bank,
and Housing for the Elderly or Handicapped Fund.
5 Includes: Public debt accrued interest payable to the public; deposit
funds; miscellaneous liability (including checks outstanding) and asset
accounts; seignorage; increment on gold; net gain/loss for U.S. currency
valuation adjustment; net gain/loss for IMF valuation adjustment.
6 Excludes the gold balance but includes deposits in certain commercial
depositories that have been converted from a time deposit to a demand
deposit basis to permit greater flexibility in Treasury cash management.
Source.—“Monthly Treasury Statement of Receipts and Outlays of
the U.S. Government”, Treasury Bulletin, and U.S. Budget, Fiscal Year
1978.
NOTES TO TABLE 1.38
1 Stock of the Federal Home Loan Bank Board (FHLBB) is included
in “other assets.”
2 Includes net undistributed income, which is accrued by most, but not
all, associations.
3 Excludes figures for loans in process, which are shown as a liability.
4 Includes securities of foreign governments and international organiza
tions and nonguaranteed issues of U.S. Govt, agencies.
5 Excludes checking, club, and school accounts.
6 Commitments outstanding (including loans in process) of banks in
New York State as reported to the Savings Banks Assn. of the State of
New York.
7 Direct and guaranteed obligations. Excludes Federal agency issues
not guaranteed, which are shown in this table under “business” securities.
8 Issues of foreign governments and their subdivisions and bonds of the
International Bank for Reconstruction and Development.
Note. —Savings and loan associations: Estimates by the FHLBB for
all associations in the United States. Data are based on monthly reports
of Federally insured associations and annual reports of other associations.
Even when revised, data for current and preceding year are subject to
further revision.
Mutual savings banks: Estimates of National Association of Mutual
Savings Banks for all savings banks in the United States. Data are re
ported on a gross-of-valuation-reserves basis.
Life insurance companies: Estimates of the Institute of Life Insurance
for all life insurance companies in the United States. Annual figures are
annual-statement asset values, with bonds carried on an amortized basis
and stocks at year-end market value. Adjustments for interest due and
accrued and for differences between market and book values are not
made on each item separately but are included, in total, in “ other assets.”
Credit unions: Estimates by the National Credit Union Administration
for a group of Federal and State-chartered credit unions that account for
about 30 per cent of credit union assets. Figures are preliminary and
revised annually to incorporate recent benchmark data.
F ederal Finance
A31
1.40 U.S. BUDGET RECEIPTS AND OUTLAYS
Millions of dollars
Fiscal year
Source or type
1975
1976
Transition
quarter
(JulySept.
1976)
Calendar year
1975
H2
1977
1976
HI
H2
Dec.
Jan.
Feb.
24,327
Receipts
1 All sources...........................................
280,997
300,005
81,773
139,455
160,552
157,961
29,472
29,977
2 Individual income taxes, n et ..............
3
Withheld.........................................
4
Presidential Election Campaign
122,386
131,603
38,801
65,835
65,767
75,094
12,663
18,108
123,408
32,949
59,549
63,859
68,023
32
34,296
34,013
34
35,528
27,367
1
6,809
958
7,649
1,362
33
27,879
26,004
9,808
1,348
18,810
2,735
27,973
2,639
122,071
8,515
12,179
11,979
11,398
1
8,426
1,356
678
194
1
6,141
13
8
1,154
4,045
20,706
2,886
7,838
205
2,007
313
1,311
363
5
Non withheld...................................
6
Refunds..........................................
7 Corporation income taxes:
8
Gross receipts.................................
9
Refunds..........................................
10 Social insurance taxes and contribu
tions, n et .....................................
11
Payroll employment taxes and
contributions 1.......................
12
Self-employment taxes and
contributions 1.......................
13
Unemployment insurance..............
14
Other net receipts 2.......................
45,747
5,125
46,783
5,374
86,441
92,714
25,760
40,886
51,828
47,596
6,207
7,320
10,764
71,789
76,391
21,534
35,443
40,947
40,427
5,809
6,271
9,110
3,417
6,771
4,466
3,518
8,054
A,152
269
2,698
1,259
268
2,861
2,314
3,250
5,193
2,438
286
4,379
2,504
17
-2 6
407
240
347
462
247
997
410
15
16
17
18
16,551
3,676
4,611
6,711
16,963
4,074
5,216
8,026
4,473
1,212
1,455
1,612
8,761
1,927
2,573
3,397
8,204
2,147
2,643
4,630
8,910
2,361
2,943
3,236
1,513
412
502
542
1,447
381
504
521
1,294
347
1,890
568
Excise taxes........................................
Customs..............................................
Estate and gift...................................
Miscellaneous receipts 3....................
Outlays
19 AH types 4 ..........................................
326,105
366,466
94,746
185,097
181,369
193,719
31,891
32,640
30,880
20 National defense................................
21 International affairs 4 .......................
22 General science, space, and
technology...................................
23 Natural resources, environment,
and energy..................................
24 Agriculture.........................................
86,585
5,862
89,996
5,067
22,518
1,997
46,214
2,574
44,052
2,668
45,002
3,028
7,575
472
7,082
349
8,131
381
3,989
4,370
1,161
2,415
1,708
2,377
418
304
333
9,537
1,660
11,282
2,502
3,324
584
5,018
1,489
6,900
417
7,206
2,019
1,217
507
1,042
582
895
350
25 Commerce and transportation..........
26 Community and regional
development...............................
27 Education, training, employment,
and social services......................
28 Health.................................................
29 Income security.................................
16,010
17,248
4,700
11,496
5,766
9,643
995
681
-323
4,431
5,300
1,530
2,548
2,411
3,192
506
397
480
15,248
27,647
108,605
18,167
33,448
127,406
5,013
8,720
32,796
8,423
16,681
61,655
9,116
17,008
65,336
9,083
19,329
65,456
1,563
4,071
10,533
1,541
2,961
11,652
1,585
3,064
11,719
Veterans benefits and services..........
16,597
Law enforcement and justice............
2,942
General government..........................
3,089
Revenue sharing and general
purpose fiscal assistance............
7,005
34 Interest5..............................................
30,974
35 Undistributed offsetting receipts 5, 6 -14,075
18,432
3,320
2,927
3,962
859
878
9,010
1,589
1,929
9,450
1,784
870
8,542'
1,839
1,734
1,467
297
326
1,630
340
93
1,606
244
285
7,119
34,589
-14,704
2,024
7,246
-2,567
3,528
15,180
-4 ,6 5 2
3,664
18,560
-8 ,3 4 0
4,729
18,409
-7 ,8 6 9
127
6,025
-4 ,2 0 7
2,062
2,382
-4 6 0
44
2,674
-5 8 8
30
31
32
33
1 Old-age, disability and hospital insurance, and Railroad Retirement
accounts.
2 Supplementary medical insurance premiums, Federal employee re
tirement contributions and Civil Service retirement 'and disability fund.
3 Deposits of earnings by F.R. Banks and other miscellaneous receipts.
4 Outlay totals reflect the reclassification of the Export-Import Bank
from off-budget status to unified budget status. Export-Import Bank
certificates of beneficial interest (effective July 1, 1975) and loans to Pefco
are treated as debt rather than asset sales.
1
5 Effective September 1976, “Interest” and “ Undistributed Offsetting
Receipts” reflect the accounting conversion for the interest on special
issues for U.S. Govt, accounts from an accrual basis to a cash basis.
6 Consists of interest received by trust funds, rents and royalties on
the Outer Continental Shelf, anc} U.S. Govt, contributions for em
ployee retirement.
A 32
1.41
D om estic Financial Statistics □ A pril 1977
F E D E R A L D E B T S U B JE C T T O S T A T U T O R Y L IM IT
Billions of dollars
1974
1973
1975
1976
Item
June 30
Dec. 31
June 30
Dec. 31
June 30
Dec. 31
June 30
Sept. 30
Dec. 31
1 Federal debt outstanding.....................
468.4
480.7
486.2
504.0
544.1
587.6
631.9
2646.4
665.5
2 Public debt securities ...........................
3 Held by public.................................
4 Held by agencies.............................
457.3
469.1
474.2
533.7
333.9
123.4
339.4
129.6
336.0
138.2
492.7
351.5
141.2
387.9
145.3
576.6
620.4
437.3
139.3
470.8
149.6
634.7
653.5
5 Agency securities ..................................
6 Held by public.................................
7 Held by agencies.............. ...............
11.1
11.6
12.0
11.3
10.9
10.9
11.5
9.1
2.0
10.0
2.0
9.6
2.0
9.3
2.0
9.0
1.9
8.9
2.0
9.5
2.0
488.6
146.1
11.6
29.7
1.9
506.4
147.1
12.0
10.0
1.9
8 Debt subject to statutory lim it............
459.1
470.8
476.0
493.0
534.2
577.8
621.6
635.8
654.7
9 Public debt securities...........................
10 Other debt i ..........................................
456.7
2.4
468.4
2.4
473.6
2.4
490.5
2.4
532.6
1.6
576.0
1.7
619.8
1.7
634.1
1.7
652.9
1.7
11 M emo: Statutory debt limit...............
465.0
475.7
495.0
495.0
577.0
595.0
636.0
636.0
682.0
1 Includes guaranteed debt of Govt, agencies, specified participation
certificates, notes to international lending organizations, and District of
Columbia stadium bonds.
2 Gross Federal debt and Agency debt held by the public increased
1.42
G R O S S P U B L IC D E B T O F U .S . T R E A S U R Y
Billions of dollars, end of period
Type and holder
1973
$0.5 billion due to a retroactive reclassification of the Export-Import Bank
certificates of beneficial interest from loan asset sales to debt, effective
July 1, 1975.
Source.—U.S. Treasury Bulletin.
T y p e s a n d O w n e rsh ip
1974
1976
1975
1977
Oct.
1 Total gross public debt1......................
Nov.
Dec.
Jan.
Feb.
Mar.
663.3
669.2
668.2
469.9
492.7
576.6
637.6
644.6
653.5
653.9
'467.8
'491.6
'575.7
270.2
363.2
'635.1
282.9
'643.6
'652.5
'653.0
662.3
421.3
424.0
431.6
2
3
4
5
6
7
8
9
10
11
By type:
Interest-bearing debt............................
M arketable .......................................
Bills...............................................
N otes............................................
Bonds............................................
Nonmarketable2 ...............................
Convertible bonds3.....................
Foreign issues4.............................
Savings bonds and notes.............
Govt, account series5..................
12
13
By holder:6
U.S. Govt, agencies and trust funds
F.R. Banks.......................................
129.6
78.5
141.2
80.5
139.3
87.9
144.6
95.7
14
15
16
17
18
19
Private investors...............................
Commercial banks.......................
Mutual savings banks.................
Insurance companies...................
Other corporations......................
State and local governments. . . .
261.7
60.3
2.9
6.4
10.9
29.2
271.0
55.6
2.5
6.1
11.0
29.2
349.4
85.1
4.5
9.3
20.2
33.8
20
21
Individuals:
Savings bonds...........................
Other securities.........................
60.3
16.9
63.4
21.5
22
23
Foreign and international7..........
Other miscellaneous investors8. .
55.5
19.3
58.4
23.2
107.8
124.6
37.8
197.6
2.3
26.0
60.8
108.0
119.7
129.8
33.4
208.7
2.3
22.8
63.8
119.1
1 Includes $1.0 billion of non-interest-bearing debt (of which $612
million on Mar. 31, 1977, was not subject to statutory debt limitations).
2 Includes (not shown separately): Securities issued to the Rural
Electrification Administration and to State and local governments, de
positary bonds, retirement plan bonds, and individual retirement bonds.
3 These nonmarketable bonds, also known as Investment Series B
Bonds, may be exchanged (or converted) at the owner’s option for 1%
per cent, 5-year marketable Treasury notes. Convertible bonds that have
been so exchanged are removed from this category and recorded in the
notes category above.
4 Nonmarketable certificates of indebtedness, notes, and bonds in the
Treasury foreign series and foreign-currency series.
5 Held only by U.S. Govt, agencies and trust funds.
157.5
167.1
38.6
212.5
408.6
161.5
207.3
39.8
226.5
415.4
161.7
213.0
40.7
228.2
164.0
216.7
40.6
164.0
219.5
40.5
2.3
22.3
72.3
129.7
2.3
22.2
72.6
126.8
231.2
229.0
144.9
91.7
147.1
97.0
408.1
99.8
5.3
12.2
24.2
42.1
409.5
102.5
5.5
12.3
25.5
41.6
71.3
28.8
71.6
29.0
72.0
28.8
75.2
43.6
76.0
47.7
78.1
43.2
232.8
72.4
28.6
66.5
38.6
230.7
415.8
101.0
5.6
12.2
27.8
44.4
67.3
24.0
164.3
229.6
41.5
144.0
94.1
397.3
94.8
5.3
12.1
24.7
41.5
435.4
164.2
225.9
41.6
80.3
43.4
2.3
21.6
67.9
119.4
2.3
22.3
71.5
127.2
2.3
22.5
71.9
127.4
2.3
'22.1
73.0
127.8
2.2
22.1
73.4
128.2
6 Data for F.R. Banks and U.S. Govt, agencies and trust funds are
actual holdings; data for other groups are Treasury estimates.
7 Consists of the investments of foreign balances and international
accounts in the United States. Beginning with 1974, the figures exclude
non-interest-bearing notes issued to the International Monetary Fund.
8 Includes savings and loan associations, nonprofit institutions, cor
porate pension trust funds, dealers and brokers, certain Govt, deposit
accounts, and Govt.-sponsored agencies.
N ote.—Gross public debt excludes guaranteed agency securities and,
beginning in July 1974, includes Federal Financing Bank security issues.
Source.—For data by type of security, Monthly Statement o f the Public
Debt o f the United States , U.S. Treasury Department; for data by holder,
Treasury Bulletin.
F ederal Finance
A 33
1.43 U.S. GOVERNMENT MARKETABLE SECURITIES Ownership, by maturity
Par value; millions of dollars; end of period
Type of holder
1975
1977
1976
Jan.
1975
1977
1976
Feb.
Jan.
All maturities
Feb.
1 to 5 years
1 All holders................................................................................ 363,191
421,276
423,995
431,607
112,270
141,132
138,727
143,927
19,347
87,934
16,485
96,971
16,214
94,134
15,788
95,837
7,058
30,518
6,141
31,249
6,143
30,933
6,167
31,076
4 Private investors ....................................................................... 255,860
5 Commercial banks..............................................................
64,398
6 Mutual savings banks.........................................................
3,300
7 Insurance companies...........................................................
7,565
8 Nonfinancial corporations..................................................
9,365
9 Savings and loan associations............................................
2,793
10
9,285
11 All others............................................................................. 159,154
307,820
313,647
319,982
78,262
4,072
10,284
14,193
4,576
12,252
184,182
78,077
4,169
10,070
15,330
4,808
14,836
186,357
79,706
4,304
10,121
16,367
5,138
12,883
191,463
74,694
103,742
101,651
106,684
2 U.S. Govt, agencies and trust funds.....................................
3
29,629
1,524
2,359
1,967
1,558
1,761
35,894
Total, within 1 year
40,005
2,010
3,885
2,618
2,360
2,543
50,321
40,110
1,941
3,706
2,981
2,310
2,620
47,984
42,533
2,114
3,765
3,884
2,475
2,746
49,168
5 to 10 years
12 All holders................................................................................
199,692
211,035
213,558
217,404
26,436
43,045
45,731
43,223
13 U.S. Govt, agencies and trust funds................ .....................
14 F. R. Banks..............................................................................
2,769
46,845
2,012
51,569
1,767
49,033
1,934
49,528
3,283
6,463
2,879
9,148
2,870
9,173
2,163
9,856
15 Private investors .......................................................................
16 Commercial banks..............................................................
17 Mutual savings banks.........................................................
18 Insurance companies...........................................................
19 Nonfinancial corporations..................................................
20 Savings and loan associations................... ........................
21
State and local governments..............................................
22 All others.............................................................................
150,078
157,454
162,758
165,942
16,690
31,018
33,688
31,204
6,278
567
2,546
370
155
1,465
19,637
7,466
716
2,589
359
313
1,488
20,756
29,875
983
2,024
7,105
914
5,288
103,889
31,213
1,214
2,191
11,009
1,984
6,622
103,220
29,805
1,238
2,173
11,751
2,115
9,083
106,592
30,035
1,262
1,998
11,942
2,404
6,997
111,305
4,071
448
1,592
175
216
782
9,405
Bills, within 1 year
23 All holders................................................................................
157,483
163,992
10 to 20 years
164,005
164,175
14,264
11,865
11,814
11,764
4,233
1,507
3,102
1,363
3,102
1,370
3,102
1,371
8,524
7,400
7,342
7,291
24 U.S. Govt, agencies and trust funds.....................................
25 F. R. Banks...........................................................................
207
38,018
449
41,279
239
38,743
269
38,865
26 Private investors .......................................................................
27 Commercial banks..............................................................
28 Mutual savings banks.........................................................
29 Insurance companies...........................................................
30 Nonfinancial corporations..................................................
31 Savings and loan associations............................................
32
33 All others.............................................................................
119,258
122,264
125,023
125,041
17,481
554
1,513
5,829
518
4,566
88,797
17,303
454
1,463
9,939
1,266
5,556
86,282
6,367
649
2,500
295
188
1,466
19,740
15,136
429
1,416
10,504
1,341
8,057
88,137
14,314
426
1,128
10,628
1,445
5,689
91,410
552
232
1,154
61
82
896
5,546
Other, within 1 year
339
139
1,114
142
64
718
4,884
343
132
1,074
181
55
713
4,842
322
136
1,339
169
58
700
4,567
Over 20 years
42,209
47,043
49,553
53,229
10,530
14,200
14,165
15,288
35 U.S. Govt, agencies and trust funds.....................................
36 F. R. Banks.............................................................................
2,562
8,827
1,563
10,290
1,528
10,290
1,665
10,663
2,053
2,601
2,350
3,642
2,331
3,626
2,421
4,006
37 Private investors .......................................................................
38 Commercial banks. ............................................................
39 Mutual savings banks.........................................................
40 Insurance companies...........................................................
41
42
43 State and local governments..............................................
44
30,820
35,190
37,735
40,901
5,876
8,208
8,208
8,861
12,394
429
511
1,276
396
722
15,092
Note.—Direct public issues only. Based on Treasury Survey of Owner
ship from Treasury Bulletin (U.S. Treasury Dept.).
Data complete for U.S. Govt, agencies and trust funds and F.R. Banks,
but data for other groups include only holdings of those institutions
that report. The following figures show, for each category, the number
and proportion reporting as of February 28, 1977; (1) 5,499 commercial
13,910
760
728
1,070
718
1,066
16,938
14,669
809
757
1,247
774
1,026
18,455
15,721
836
870
1,314
959
1,308
19,895
271
112
436
57
22
558
4,420
427
143
548
55
13
904
6,120
353
141
527
58
14
931
6,184
449
143
519
77
14
975
6,684
banks, 468 mutual savings banks, and 727 insurance companies, each
about 90 per cent; (2) 447 nonfinancial corporations and 486 savings
and loan assns., each about 50 per cent; and (3) 500 State and local
govts., about 40 per cent.
“All others,” a residual, includes holdings of all those not reporting
in the Treasury Survey, including investor groups not listed separately.
A 34
1.44
D om estic Financial Statistics □ April 1977
U .S . G O V E R N M E N T S E C U R I T I E S D E A L E R S
Par value; averages of daily figures, in millions of dollars
Transactions
1976
Item
1974
1977
1977
1975
Week ending Wednesday
Dec.
Jan.
Feb.
Feb. 23
Mar. 2
Mar. 9
Mar. 16 Mar. 23 Mar. 30
1 U.S. Govt, securities.............................
3,579
6,027
13,059
12,502
12,871
'10,933
13,334
11,340
10,049
10,517
10,738
2
3
4
5
6
By maturity:
Bills....................................................
Other within 1 year...........................
1-5 years............................................
5-10 years..........................................
Over 10 years.....................................
2,550
250
465
256
58
3,889
223
1,414
363
138
7,511
172
3,355
1,653
368
7,630
156
2,805
1,604
307
7,593
283
3,262
1,388
346
'6,355
192
'2,899
'1,184
'303
7,842
333
3,946
941
272
7,564
221
2,527
803
224
7,003
263
2,025
588
140
7,048
235
2,351
697
187
7,094
245
2,088
1,122
189
7
8
9
10
By type of customer:
U.S. Govt, securities dealers............
U.S. Govt, securities brokers...........
Commercial banks.............................
All others i .........................................
652
965
998
964
885
1,750
1,451
1,941
1,650
4,444
2.999
3,966
1,641
4,586
2,884
3,392
1,537
4,428
3,013
3,893
'1,475
'3,613
'2,486
'3,359
1,652
4,241
3,337
4,105
1,399
3,411
2,679
3,851
1,433
2,661
2,271
3,683
1,553
2,869
2,503
3,592
1,456
3,441
2,194
3,647
11 Federal agency securities......................
965
1,043
2,025
1,764
1,579
'1,648
1,623
1,299
1,366
1,984
1,586
Transactions are market purchases and sales of U.S. Govt, securities
1 Includes—among others—all other dealers and brokers in commodi
dealers reporting to the F.R. Bank of New York. The figures exclude
ties and securities, foreign banking agencies, and the F.R. System.
allotments of, and exchanges for, new U.S. Govt, securities, redemptions
of called or matured securities, or purchases or sales of securities under
N ote.—Averages for transactions are based on number of trading days
repurchase, reverse repurchase (resale), or similar contracts.
in the period.
1.45
U .S . G O V E R N M E N T S E C U R I T I E S D E A L E R S
Par value; averages of daily figures, in millions of dollars
P o sitio n s a n d S o u rc e s o f F in a n c in g
Item
1974
1975
Dec.
1977
1977
1976
Jan.
Week ending Wednesday
Feb.
Jan. 26
Feb. 2
Feb. 9
Feb. 16 Feb. 23
Mar. 2
Positions2
1 U.S. Govt, securities..............................
2,580
5,884
10,840
8,914
6,251
8,426
5,582
6,937
6,365
6,295
5,431
2
3
4
5
6
Bills....................................................
Other within 1 year...........................
1-5 years...........................................
5-10 years..........................................
Over 10 years.....................................
1,932
-6
265
302
88
4,297
265
886
300
136
8,394
155
1,336
596
359
6,596
138
1,270
532
379
4,646
193
587
417
407
6,181
151
1,348
436
310
3.888
196
857
348
292
4,552
209
923
745
508
4,751
137
460
501
516
5,325
211
247
178
334
4,511
221
347
126
226
7 Federal agency securities......................
1,212
943
1,435
923
466
891
423
501
491
482
421
Sources of financing3
3,977
9
10
11
12
Commercial banks:
New York City.................................
Outside New York City...................
Corporations1.......................................
A llo th er................................................
6,666
14,032
11,938
9,017
11,371
8,922
8,108
8,903
10,049
9,433
1,032
1,064
459
1,423
1,621
1,466
842
2,738
2,567
2,839
2,437
6,188
2,362
2,353
2,141
5,082
1,360
1,727
2,038
3,892
1,904
1,872
2,213
5,381
1,430
1,666
2,068
3,759
1,372
1,574
1,847
3,315
1,314
1.780
2; 044
3,764
1,383
1,832
2,187
4,648
1,451
1,771
2,173
4,038
1A business corporations except commercial banks and insurance
11
companies.
2 Net amounts (in terms of par values) of securities owned by nonbank
dealer firms and dealer departments of commercial banks on a commit
ment, that is, trade-date basis, including any such securities that have been
sold under agreements to repurchase. The maturities of some repurchase
agreements are sufficiently long, however, to suggest that the securities
involved are not available for trading purposes. Securities owned, and
hence dealer positions, do not include securities purchased under agree
ments to resell.
3 Total amounts outstanding of funds borrowed by nonbank dealer
firms and dealer departments of commercial banks against U.S. Govt,
and Federal agency securities (through both collateral loans and sales
under agreements to repurchase), plus internal funds used by bank dealer
departments to finance positions in such securities. Borrowings against
securities held under agreement to resell are excluded where the borrowing
contract and the agreement to resell are equal in amount and maturity,
that is, a matched agreement.
N ote.—Averages for positions are based on number of trading days
in the period; those for financing, on the number of calendar days in the
period.
Federal Finance
1.46
F E D E R A L A N D F E D E R A L L Y S P O N S O R E D C R E D IT A G E N C IE S
Millions of dollars; end of period
Agency
1973
1974
A 35
D e b t O u ts ta n d in g
1976
1975
1977
Aug.
Sept.
Oct.
Nov.
Dec.
Jan.
1 Federal and Federally sponsored agencies...........
71,594
89,381
97,680
101,724
102,456
103,865
103,415
103,308
103,487
2 Federal agencies ....................................................
3 Defense Department1.......................................
4 Export-Import Bank2,3....................................
5 Federal Housing Administration4...................
6 Government National Mortgage Association
Participation Certificates5.........................
7 Postal Service6..................................................
8 Tennessee Valley Authority.............................
9 United States Railway Association6...............
11,554
12,719
19,046
21,453
22,676
1,312
2,893
440
1,220
7,188
564
1,152
7,945
582
21,895
22,645
22,419
22,168
4,390
250
2,435
4,280
721
3,070
3
4,200
1,750
3,915
209
4,145
2,998
4,535
96
4,145
3,498
4,713
97
4,145
3,498
4,865
98
4,145
3,498
4,865
99
4,120
2,998
4,935
104
3,845
2,998
4,985
109
10 Federally sponsored agencies.................................
11 Federal home loan banks.................................
12 Federal Home Loan Mortgage Corporation..
13 Federal National Mortgage Association........
14 Federal land banks...........................................
15 Federal intermediate credit banks...................
16 Banks for cooperatives.....................................
17 Student Loan Marketing Association7............
18 Other ..................................................................
60,040
76,662
78,634
80,271
80,561
81,189
80,889
81,321
18,900
1,550
29,963
15,000
9,254
3,655
310
17,113
1,150
30,429
16,566
10,687
3,919
405
17,061
1,150
30,685
16,566
10,791
3,901
405
17,122
1,150
30,656
17,124
10,712
4,023
400
80,770
21,890
1,551
28,167
12,653
8,589
3,589
220
16,807
1,150
30,413
17,127
10,669
4,207
r395
16,811
1,150
30,565
17,127
10,494
4,330
410
16,805
1,350
30,394
17,304
10,631
4,425
410
2
2
2
2
M emo:
19 Federal Financing Bank debt6, 8...........................
Lending to Federal and Federally sponsored
agencies:
20 Export-Import Bank3.......................................
21 Postal Service6..................................................
22 Student Loan Marketing Association7...........
23 Tennessee Valley Authority.............................
24 United States Railway Association6...............
25
26
27
Other lending:9
Farmers Home Administration.......................
Rural Electrification Administration..............
Others................................................................
1,439
2,625
415
15,362
1,784
23,002
10,062
6,932
2,695
200
3
1,113
8,574
575
1,095
8,557
579
4,474
17,154
25,052
25,888
26,636
27,028
28,711
29,848
500
220
895
3
4,595
1,500
310
1,840
209
4,985
2,748
405
2,560
96
4,768
3,248
405
2,738
97
4,768
3,248
400
2,810
98
4,768
3,248
395
2,890
99
5,208
2,748
410
3,110
104
5,208
2,748
410
3,160
109
7,000
566
1,134
9,650
1,215
3,393
9,650
1,514
3,468
10,250
1,573
3,489
10,250
1,674
3,704
10,750
1,768
4,613
11,450
1,509
5,254
1 Consists of mortgages assumed by the Defense Department between
1957 and 1963 under family housing and homeowners assistance programs.
2 Includes participation certificates reclassified as debt beginning
Oct. 1, 1976.
3 Off-budget Aug. 17,1974 through Sept. 30,1976 on-budget thereafter.
4 Consists of debentures issued in payment of Federal Housing Ad
ministration insurance claims. Once issued, these securities may be sold
privately on the securities market.
5 Certificates of participation issued prior to fiscal 1969 by the Govern
ment National Mortgage Association acting as trustee for the Farmers
Home Administration; Department of Health, Education, and Welfare;
Department of Housing and Urban Development; Small Business Ad
ministration; and the Veterans Administration.
6 Off-budget.
1,117
8,336
585
2
356
2
1,128
8,353
589
3
2,500
2
1,136
7,728
578
7 Unlike other Federally sponsored agencies, the Student Loan
Marketing Association may borrow from the Federal Financing Bank
(FFB) since its obligations are guaranteed by the Department of Health,
Education, and Welfare.
8 The FFB, which began operations in 1974, is authorized to purchase
or sell obligations issued, sold, or guaranteed by other Federal agencies.
Since FFB incurs debt solely for the purpose of lending to other agencies,
its debt is not included in the main portion of the table in order to avoid
double counting.
9 Includes FFB purchases of agency assets and guaranteed loans;
the latter contain loans guaranteed by numerous agencies with the
guarantees of any particular agency being generally small. The Farmers
Home Administration item consists exclusively of agency assets, while the
Rural Electrification Administration entry contains both agency assets
and guaranteed loans.
A 36
1.47
D om estic Financial Statistics □ A pril 1977
N E W S E C U R I T Y IS S U E S
Millions of dollars
S ta te a n d L o c a l G o v e rn m e n t a n d C o r p o r a te
Type of issue or issuer,
or use
1974
1975
1976
1976
July
Aug.
Sept.r
Oct.
Nov.
Dec.
State and local government
1 All issues, new and refunding 1......................................
24,315
30,607
2,691
2,765
2,808
By type of issue:
General obligation......................................................
Revenue.......................................................................
Housing Assistance Administration 2.......................
U.S. Govt, loans........................................................
13,563
10,212
461
79
16,020
14,511
1,186
1,496
1,269
1,488
1,265
1,538
76
9
8
5
By type of issuer:
6 State.............................................................................
7 Special district and statutory authority....................
8 Municipalities, counties, townships, school districts
4,784
8.638
10^17
7,438
12,441
10,660
308
1,261
1,118
669
1,162
930
470
1,229
1,104
9
Issues for new capital, total...........................................
23,508
29,495
2,470
2,504
2,590
10
11
12
13
14
15
By use of proceeds:
Education...................................................................
Transportation...........................................................
Utilities and conservation..........................................
Social welfare.............................................................
Industrial aid..............................................................
Other purposes...........................................................
4,730
1,712
5,634
3,820
494
7,118
4,689
2,208
7,209
4,392
445
10,552
309
36
1,000
488
66
571
373
166
784
694
24
463
356
251
747
767
30
439
2
3
4
5
Corporate
'38,313 '53,619
53,608
3,216
3,365
4,832
4,427
3,458
6,334
32,066
42,756
42,515
2,587
2,687
4,278
3,479
2,768
5,414
By type of offering:
18 Public........................................
19 Private placement.....................
25,903
6,160
32.583
10,172
26,853
15,662
1,239
1,348
1,565
1,122
2,100
2,178
2,729
750
1,656
1,112
2,568
2,846
By industry group:
Manufacturing.........................
Commercial and miscellaneous
Transportation.........................
Public utility.............................
Communication.......................
Real estate and financial.........
9,867
1,845
1,550
8,873
3,710
6,218
16,980
2,750
3,439
9,658
3,464
6,469
13,161
4,321
4,350
8,287
2,801
9,601
1,090
171
118
621
20
568
749
319
48
663
218
692
687
543
1,205
1,118
147
577
1,261
75
240
803
155
946
512
376
193
795
163
728
2,196
661
564
550
194
1,250
26 Stocks...........................................
6,247
10,863
11,093
629
678
554
948
690
920
By type:
27 Preferred...................................
28 Common...................................
2,253
3,994
3,458
7,405
2,788
8,305
89
540
214
464
136
418
275
673
282
408
308
612
By industry group:
Manufacturing. .......................
Commercial and miscellaneous
T ransportation.........................
Public utility.............................
Communication.......................
Real estate and financial.........
544
940
22
3,964
217
562
1,670
1,470
1
6,235
1,002
488
2,236
1,183
24
6,101
776
771
108
164
282
69
13
257
3
54
83
33
7
347
87
73
9
34
110
198
611
177
532
27
88
596
84
16 All issues 3....................................
17 Bonds............................................
20
21
22
23
24
25
29
30
31
32
33
34
1 Par amounts of long-term issues based on date of sale.
2 Only bonds sold pursuant to the 1949 Housing Act, which are secured
by contract requiring the Housing Assistance Administration to make
annual contributions to the local authority.
3 Figures, which represent gross proceeds of issues maturing in more
than 1 year, sold for cash in the United States, are principal amount or
number of units multiplied by offering price. Excludes offerings of less
311
6
40
15
than $100,000, secondary offerings, undefined or exempted issues as
defined in the Securities Act of 1933, employee stock plans, investment
companies other than closed-end, intracorporate transactions, and sales to
foreigners.
Sources.—State and local government securities, Securities Industry
Association; corporate securities, Securities and Exchange Commission.
C orporate Finance
A 37
1.48 CORPORATE SECURITIES Net Change in Amounts Outstanding
Millions of dollars
1975
Source of change, or industry
1973
1974
1975
1976
Ql
Q2
Q3
Q4
Ql
Q2
Q3
All issues1
33,559
2 Retirements............................................................ 11,804
3 Net change.............................................................. 21,754
39,344
9,935
29,399
53,255
10,991
42,263
15,211
2,088
13,123
15,602
3,211
12,390
9,079
2,576
6,503
13,363
3,116
10,247
13,671
2,315
11,356
14,229
3,668
10,561
11,385
2,478
8,907
Bonds and notes
4 New issues.............................................................. 21,501
8,810
5 Retirements............................................................
6 Net change: Total.................................................. 12,691
31,354
6,255
25,098
40,468
8,583
31,886
12,759
1,587
11,172
11,460
2,336
9,124
6,654
2,111
4,543
9,595
2,549
7,047
9,404
1,403
8,001
10,244
3,159
7,084
8,701
1,826
6,875
By industry:
Manufacturing................................................
Commercial and other2.................................
Transportation, including railroad...............
Public utility...................................................
Communication..............................................
Real estate and financial...............................
801
-109
1,044
4,265
3,165
3,523
7,404
1,116
341
7,308
3,499
5,428
13,219
1,605
2,165
7,236
2,980
4,682
5,134
373
1
2,653
1,269
1,742
4,574
483
429
1,977
810
852
1,442
221
147
1,395
472
866
2,069
528
1,588
1,211
429
1,222
2,966
203
985
1,820
498
1,530
1,529
726
488
1,260
953
2,128
1,551
610
1,092
2,109
335
1,178
Common and preferred stock
13 New issues.............................................................
14 Retirements............................................................
15 Net change: Total..................................................
12,057
2,993
9,064
7,980
3,678
4,302
12,787
2,408
10,377
2,452
501
1,951
4,142
875
3,266
2,425
465
1,960
3,768
567
3,200
4,267
912
3,355
3,985
509
3,477
2,684
652
2,032
658
1,411
-9 3
4,509
1,399
1,181
17
-1 3 5
-2 0
3,834
398
207
1,607
1,137
65
6,015
1,084
468
262
77
1
1,569
24
18
500
490
7
1,866
359
43
412
108
53
1,043
97
247
433
462
4
1,537
604
160
838
88
5
2,174
47
203
1,120
318
25
1,300
735
-2 1
744
117
17
932
19
203
7
8
9
10
11
12
16
17
18
19
By industry:
Manufacturing................................................
Commercial and other2.................................
Transportation, including railroad...............
Public utility...................................................
21
Real estate and financial...............................
1 Excludes issues of investment companies.
2 Extractive and commercial and miscellaneous companies.
N ote.—Securities and Exchange Commission estimates of cash trans
actions only, as published in the Commission’s Statistical Bulletin.
1.49
O P E N -E N D IN V E S T M E N T C O M P A N IE S
Millions of dollars
New issues and retirements exclude foreign sales and include sales of
securities held by affiliated companies, special offerings to employees,
new stock issues and cash proceeds connected with conversions of bonds
into stocks. Retirements, defined in the same way, include securities
retired with internal funds or with proceeds of issues for that purpose.
N e t S ales a n d A sse t P o sitio n
1977
1976
Item
1975
1976
Aug.
Sept.
Oct.
Nov.
Dec.
Jan.
Feb.
INVESTMENT COMPANIES
Excluding money market funds:
1
2
3
Redemptions of own shares2..........................
Net sales............................................................
3,302
3,686
-384
4,226
6,802
2,496
256
536
-2 8 0
338
573
-235
378
450
-7 2
446
419
27
661
628
33
655
628
141
423
463
-4 0
4
Assets3..............................................................
42,179
47,537
45,457
46,138
44,858
45,369
47,537
45,760
44,948
Other.............................................................
3,748
38,431
2,747
44,790
2,561
42,896
2,507
43,631
2,434
42,424
2,635
42,734
2,747
44,790
2,958'
42,802'
3,276
41,672
5
6
1 Includes reinvestment of investment income dividends. Excludes
reinvestment of capital gains distributions and share issue of conversions
from one fund to another in the same group.
2 Excludes share redemption resulting from conversions from one fund
to another in the same group.
3 Market value at end of period, less current liabilities.
4 Also includes all U.S. Govt, securities and other short-term debt
securities.
N ote.—Investment Company Institute data based on reports of mem
bers, which comprise substantially all open-end investment companies
registered with the Securities and Exchange Commission. Data reflect
newly formed companies after their initial offering of securities.
A 38
1.50
D om estic Financial Statistics □ April 1977
C O R P O R A T E P R O F IT S A N D T H E IR D IS T R IB U T IO N
Billions of dollars; quarterly data are at seasonally adjusted annual rates.
Account
1974
1975
1975
1976
1976
Q2
Q3
Q4
Ql
Q2
Q3
Q4
1 Profits before ta x .....................................................
127.6
114.5
148.0
105.8
126.9
131.3
141.1
146.2
150.2
154.5
2 Profits tax liability...................................................
3 Profits after tax........................................................
52.4
75.2
49.2
65.3
64.4
83.6
44.8
61.0
54.8
72.1
57.2
74.2
61.4
79.7
63.5
82.7
65.1
85.1
67.5
86.9
4 Dividends.................................................................
5 Undistributed profits..............................................
30.8
44.4
32.1
33.2
35.2
48.4
31.9
29.1
32.6
39.5
32.2
42.0
33.1
46.6
34.4
48.3
35.4
49.7
37.7
49.2
6 Capital consumption allowances with capital con
sumption adjustment.......................................
7 Net cash flow...........................................................
81.6
126.0
89.4
122.6
97.3
145.7
87.9
117.0
90.5
130.0
92.9
134,9
94.3
140.9
96.2
144.5
98.2
147.9
100.5
149.7
Source.—U.S. Dept, of Commerce, Survey o f Current Business,
1.51
N O N F I N A N C I A L C O R P O R A T IO N S
Billions of dollars, end of period
Account
C u rre n t A ssets a n d L ia b ilitie s
1971
1972
1973
1975
1974
1976
Q2
1 Current assets.........................................................
2
3
4
5
6
7
8
Cash....................................................................
U.S. Govt, securities.........................................
Notes and accounts receivable ...........................
U.S. Govt.1....................................................
Other...............................................................
Inventories..........................................................
Other...................................................................
9 Current liabilities....................................................
Q3
Q4
Ql
Q2
Q3
791.8
529.4
574.4
643.2
712.2
703.2
716.5
731.6
753.5
775.4
53.3
11.0
57.5
10.2
61.6
11.0
62.7
11.7
65.6
14.3
68.1
19.4
71.1
23.9
221.1
243.4
269.6
288.1
298.0
298.2
68.4
21.7
70.8
23.3
293.2
63.7
12.7
3.6
294.6
285.8
60.0
321.8
328.5
3.3
294.7
279.6
59.0
310.9
3.5
217.6
200.4
43.8
3.4
240.0
215.2
48.1
3.5
266.1
246.7
54.4
3.5
289.7
288.0
56.6
3.3
284.8
281.4
57.3
3.6
307.3
288.8
63.6
3.7
318.1
295.6
63.9
4.3
324.2
302.1
66.3
326.0
352.2
401.0
450.6
434.2
444.7
457.5
465.9
475.9
484.1
Notes and accounts payable ...............................
220.5
4.9
215.6
13.1
92.4
234.4
4.0
230.4
15.1
102.6
265.9
4.3
261.6
18.1
117.0
292.7
5.2
287.5
23.2
134.8
275.9
5.8
270.1
17.7
140.6
279.6
288.0
286.9
293.8
6.8
287.0
22.0
160.1
291.7
7.0
284.7
24.9
167.5
15 Net working capital...............................................
203.6
221.3
242.3
261.5
269.0
271.8
274.1
287.6
299.5
307.7
10
11
12
13
14
U.S. Govt.1....................................................
Other...............................................................
Accrued Federal income taxes.........................
Other..................................................................
1 Receivables from, and payables to, the U.S. Govt, exclude amounts
offset against each other on corporations’ books.
6.2
273.4
19.4
145.6
6.4
281.6
20.7
148.8
6.4
280.5
23.9
155.0
Source.—Securities and Exchange Commission estimates published
in the Commission’s Statistical Bulletin.
Corporate Finance
1.52
A 39
B U S IN E S S E X P E N D I T U R E S o n N ew P la n t a n d E q u ip m e n t
Billions of dollars; quarterly data are at seasonally adjusted annual rates.
1976
1975
Industry
1975
1976
1977
Q3
Q4
Ql
Q2
Q3
Q4
Ql 2 r
Q22
1 All industries..........................................................
112.75
120.82
112.16
111.80
114.72
118.12
122.55
125.22
129.19
132.71
Manufacturing
2 Durable goods industries...................................
3 Nondurable goods industries............................
21.88
26.13
23.50
29.22
21.01
26.38
21.07
25.75
21.63
27.58
22.54
28.09
24.59
30.20
25.50
28.93
25.33
30.84
26.77
31.13
4
5
6
7
8
9
10
11
Nonmanufacturing
Mining................................................................
Transportation:
Railroad..........................................................
Air...................................................................
Other...............................................................
Public utilities:
Electric............................................................
Gas and other................................................
Communication.................................................
Commercial and other1.....................................
3.80
3.98
3.82
3.82
3.83
3.83
4.21
4.13
4.26
4.16
2.56
1.87
3.03
2.35
1.31
3,56
2.75
2.12
2.99
2.39
1.65
3.56
2.08
1.18
3.29
2.64
1.44
4.16
2.69
1.12
3.44
2.63
1.41
3.49
2.37
1.76
2.87
2.68
1.45
2.45
16.99
3.14
12.76
20.61
18.90
3.47
12.93
20.87
16.58
3.21
12.95
20.34
17.92
3.00
12.22
20.44
18.56
3.36
12.54
20.68
18.82
3.03
12.62
20.94
18.22
3.45
13.64
20.99
19.49
3.96
14.30
21.36
20.44
4.08
| J /• / j
21.96
4.24
1 Includes trade, service, construction, finance, and insurance.
2 Anticipated by business.
d I^o I
N ote.—Estimates for corporate and noncorporate business, excluding
agriculture; real estate operators; medical, legal, educational, and cultural
service; and nonprofit organizations.
Source.—U.S. Dept, of Commerce, Survey o f Current Business.
A 40
1.53
D om estic Financial Statistics □ A pril 1977
M O RTG A G E M ARKETS
Millions of dollars, except as noted
1976
Item
1974
1975
1976
Sept.
Oct.
1977
Nov.
Dec.
Jan.
Feb.
Terms and yields in primary and secondary markets
PRIMARY MARKETS
1
2
3
4
5
6
7
8
Conventional mortgages on new homes
Terms: 1
Purchase price (thous. dollars).....................
Amount of loan (thous. dollars).................
Loan/price ratio (per cent)...........................
Maturity (years)............................................
Fees and charges (per cent of loan amount)2.
Contract rate (per cent per annum)............
Yield (per cent per annum):
FHLBB series 3..............................................
HUD series4..................................................
40.1
29.8
74.3
26.3
1.30
8.71
44.6
33.3
74.7
26.8
1.54
8.75
48.4
35.9
74.2
27.2
1.44
8.76
50.6
37.4
75.6
27.7
1.42
8.85
49.0
36.2
75.3
28.0
1.38
8.85
48.6
36.0
75.6
27.0
1.36
8.83
51.0
37.1
74.7
27.7
1.38
8.87
'52.5
'39.0
'76.3
28.2
'1.38
'8.82
51.8
38.6
76.1
27.7
1.29
8.77
8.92
9.22
9.01
9.10
8.99
8.99
9.08
9.00
9.07
9.00
9.05
8.95
9.10
8.90
9.05
8.80
8.98
8.80
9.55
8.72
9.19
8.52
8.82
8.17
8.82
8.10
8.55
7.98
8.45
7.93
8.25
7.59
8.40
7.85
8.50
7.98
9.53
9.70
9.31
9.36
8.92
9.12
8.88
9.11
8.75
9.05
8.66
9.00
8.45
8.84
8.48
8.82
8.55
8.86
SECONDARY MARKETS
9
10
11
12
Yields (per cent per annum) on—
FHA mortgages (HUD series)5...................
GNMA securities6........................................
FNMA auctions:7
Government-underwritten loans..............
Conventional loans...................................
Activity in secondary markets
FEDERAL NATIONAL
MORTGAGE ASSOCIATION
13
14
15
16
Mortgage holdings at end of period:
Total...................................................................
FHA-insured..................................................
VA-guaranteed..............................................
Conventional.................................................
29,578
19,189
8,310
2,080
31,824
19,732
9,573
2,519
32,904
18,916
9,212
4,776
32,062
19,133
9,366
3,563
32,019
19,077
9,314
3,628
32,929
18,986
9,264
4,679
32,904
18,916
9,212
4,776
32,848
18,854
9,162
4,833
32,792
18,771
9,115
4,906
17
18
Mortgage transactions during period:
Purchases...........................................................
S a le s...............................................................
6,953
4
4,263
2
3,606
86
199
162
1,131
8
191
141
150
19
20
Mortgage commitments:8
Contracted during period................................
Outstanding at end of period...........................
10,765
7,960
6,106
4,126
6,247
3,398
463
3,983
480
3,672
615
3,649
290
3,398
1,180
4,142
968
4,707
Auction of 4-month commitments to buy—
Government-underwritten loans:
Offered9.........................................................
Accepted........................................................
Conventional loans:
23
Offered9.........................................................
24
Accepted........................................................
5,492.7
2,371.4
7,042.8
3,848.3
4,929.8
2,787.2
221.0
117.9
235.5
107.1
494.1
221.1
56.9
41.5
747.4
549.1
868.4
484.7
1,206.8
656.4
1,401.1
765.2
2,595.7
1,879.3
321.7
225.4
297.5
215.8
353.3
296.9
150.2
135.4
326.8
238.3
300.0
235.8
4,586
1,904
2,682
4,987
1,824
3,163
4,269
1,618
2,651
4,269
1,679
2,590
4,190
1,660
2,530
4,162
1,638
2,523
4,269
1,618
2,651
3,896
1,594
2,302
3,672
1,580
2,092
98
290
21
22
FEDERAL HOME LOAN
MORTGAGE CORPORATION
25
26
Mortgage holdings at end of period: 1o
Total..................................................................
FHA/VA........................................................
28
29
Mortgage transactions during period:
Purchases...........................................................
Sales...................................................................
2,191
52
1,716
1,020
1,175
1,396
88
93
78
116
101
91
208
60
16
51
30
31
Mortgage commitments: 11
Contracted during period.
.........................
Outstanding at end of period...........................
4,553
2,390
982
111
1,477
333
163
243
171
326
245
452
105
333
250
462
1 Weighted averages based on sample surveys of mortgages originated
by major institutional lender groups. Compiled by the Federal Home Loan
Bank Board in cooperation with the Federal Deposit Insurance Cor
poration.
2 Includes all fees, commissions, discounts, and “points” paid (by
the borrower or the seller) in order to obtain a loan.
3 Average effective interest rates on loans closed, assuming prepayment
at the end of 10 years.
4 Average contract rates on new commitments for conventional first
mortgages, rounded to the nearest 5 basis points; from Dept, of Housing
and Urban Development.
5 Average gross yields on 30-year, minimum-downpayment, Federal
Housing Administration-insured first mortgages for immediate delivery
in the private secondary market. Any gaps in data are due to periods of
adjustment to changes in maximum permissible contract rates.
6 Average net yields to investors on Government National Mortgage
Association-guaranteed, mortgage-backed, fully-modified pass-through
securities, assuming prepayment in 12 years on pools of 30-year FHA/VA
mortgages carrying the prevailing ceiling rate. Monthly figures are
unweighted averages of Monday quotations for the month.
7 Average gross yields (before deduction of 38 basis points for mortgage
servicing) on accepted bids in Federal National Mortgage Association’s
auctions of 4-month commitments to purchase home mortgages, assuming
prepayment in 12 years for 30-year mortgages. No adjustments are made
for FNMA commitment fees or stock related requirements. Monthly
figures are unweighted averages for auctions conducted within the month.
8 Includes some multifamily and nonprofit hospital loan commitments
in addition to 1- to 4-family loan commitments accepted in FNMA’s
free market auction system, and through the FNMA-GNMA Tandem
plans.
9 Mortgage amounts offered by bidders are total bids received.
10 Includes participations as well as whole loans.
11 Includes conventional and Government-underwritten loans.
R e a l E sta te D eb t
1.54
A41
M O R T G A G E D E B T O U T S T A N D IN G
Millions of dollars
End of quarter
End of year
Type of holder, and type of property
1976
1972
1973
1974
1975
Ql
Q2
Q3
Q4
1 All holders..................................................
7
1- to 4-family........................................
3 Multifamily............................................
4 Commercial...........................................
5 F arm ......................................................
603,417
372,793
82,572
112,294
35,758
682,321
416,883
92,877
131,308
41,253
742,504
449,937
99,851
146,428
46,288
801,546
491,678
100,348
158,644
50,876
817,278
503,402
100,487
161,024
52,365
'838,761
519,437
'100,548
164,527
54,249
'862,229
'537,321
'100,755
168,144
56,009
'883,843
'552,994
'101,131
171,978
57,740
6 Maior financial institutions.......................
7
Commercial banks 1...............................
8
1- to 4-family.....................................
9
Multifamily........................................
10
Commercial.......................................
Farm ..................................................
11
450,000
505,400
542,552
592,061
609,086
626,487
642,851
119,068
132,105
581,296
99,314
77,018
5,915
46,882
6,371
78,218
5,515
47,812
6,441
57,004
5,778
31,751
4,781
67,998
6,932
38,696
5,442
74,758
7,619
43,679
6,049
136,186
137,986
141,086
80,218
5,115
49,112
6,641
12
13
14
15
16
Mutual savings banks ............................
67,556
73,230
46,229
10,910
10,355
62
48,811
12,343
12,012
64
49,213
12,923
12,722
62
50,025
13,792
13,373
59
50,344
13,876
13,456
62
50,989
14,030
13,653
63
17
18
19
20
Savings and loan associations................
206,182
231,733
249,293
278,693
286,556
299,574
21
22
23
24
25
Life insurance companies......................
1- to 4-family.....................................
Multifamily........................................
Commercial.......................................
Farm ..................................................
1- to 4-family.....................................
Multifamily........................................
Commercial.......................................
167,049
20,783
18,350
76,948
187,750
22,524
21,459
81,369
74,920
201,553
23,683
24,057
86,234
77,249
224,710
25,417
28,566
89,168
77, 738
231 ,337
25,847
29,372
89,781
78,735
241,996
26,722
30,856
89,691
143,986
81,928
5,040
50,251
6,767
80,145
146,586
83,402
5,072
51,233
6,879
81,554
51,902
14,282
13,897
64
52,814
14,534
14,141
65
312,139
323,130
252,521
27,468
32,150
90,217
261,732
28,116
33,282
91,581
1- to 4-family....................................
Multifamily........................................
Commercial.......................................
Farm ..................................................
22,315
17,347
31,608
5,678
20,426
18,451
36,496
5,996
19,026
19,625
41,256
6,327
17,590
19,629
45,196
6,753
17,321
19,726
45,907
6,827
16,861
19,374
46,456
7,000
16,458
19,256
47,322
7,181
16,058
19,276
48,766
7,481
26 Federal and related agencies....................
27 Government National Mortgage Assn..
1- to 4-family.....................................
28
Multifamily........................................
29
40,157
46,721
58,320
'66,033
4,846
66,891
67,350
4,029
7,619
5,557
'67,314
'66,755
5,113
7,438
2,513
2,600
1,455
2,574
2,248
2,598
4,728
2,710
4,886
2,733
1,019
1,366
1,432
1,109
650
30
31
32
33
34
Farmers Home Admin ...........................
35
36
37
Federal Housing and Veterans Admin. ..
38
39
40
Federal National Mortgage Assn..........
41
42
43
Federal land banks.................................
1- to 4-family.....................................
F arm ..................................................
13
9,094
123
10,948
44
45
46
Federal Home Loan Mortgage C orp....
1,789
2,604
2,446
158
4,217
369
4,588
399
4,247
355
47 Mortgage pools or trusts2.........................
48 Government National Mortgage Assn. ..
49
1- to 4-family.....................................
50
Multifamily........................................
14,404
18,040
23,799
34,138
37,684
7,890
11,769
18,257
20,479
1- to 4-family....................................
Multifamily........................................
Commercial.......................................
Farm ..................................................
1- to 4-family.....................................
Multifamily........................................
1- to 4-family.....................................
Multifamily........................................
1- to 4-family.....................................
Multifamily........................................
51
52
53
Federal Home Loan Mortgage Corp...
54
55
56
57
58
Farmers Home Admin ...........................
1- to 4-family.....................................
Multifamily........................................
279
29
320
391
743
29
218
376
3,338
3,476
759
167
156
350
4,015
208
215
190
496
4,970
2,199
1,139
2,013
1,463
2,009
2,006
1,990
2,980
19,791
24,175
29,578
31,824
17,697
2,094
9,107
1,754
35
5,504
5,353
151
441
331
110
20,370
3,805
11,071
7,561
329
766
23,778
5,800
13,863
406
13,457
4,586
11,249
520
757
617
149
608
149
25,813
6,011
16,563
549
16,014
4,987
17,538
719
1,598
1,349
249
3,165
2,392
830
5,068
2,486
2,582
1,355
4,241
1,970
2,271
1,064
97
23
96
434
228
46
151
405
5,033
1 ,908
3,125
'5,777
1,781
'3,330
r5,092
'1,716
'3,376
'5,750
'1,676
'3,474
32,182
32,028
32,962
32,904
26,262
5,920
17,264
563
16,701
4,602
26,112
5,916
27,030
5,932
17,978
18,568
575
17,403
4,529
4,166
363
41,225
23,634
19,693
786
22,821
813
1,999
2,153
1,698
301
754
143
133
325
586
17,982
454
218
72
320
26,934
5,970
19,127
603
18,524
4,269
4,269
3,917
352
3,889
380
44,960
49,801
26,725
30,572
25,841
884
29,583
989
1,831
322
2,506
2,671
2,141
365
2,282
389
16,558
5,017
131
867
2,444
9,384
5,458
138
1,124
2,664
11,273
14,283
15,206
15,438
15,729
1- to 4-family.....................................
Multifamily........................................
Commercial.......................................
Farm ..................................................
9,670
541
2,104
3,123
9,587
535
2,291
3,316
10,219
532
2,440
3,367
59 Individuals and others3.............................
60
1- to 4-family.....................................
Multifamily........................................
61
62
Commercial.......................................
63
Farm ..................................................
98,856
45,040
21,465
19,043
13,308
112,160
51 ,112
23,982
21,303
15,763
117,833
53,331
24,276
23,085
17,141
119,221
56,378
22,017
22,489
18,337
120,183
c122,417
59,024
c21,584
22,195
19,614
123,468
60,454
20,540
22,100
20,374
124,436
61,378
19,910
22,044
21,104
8,459
1 Includes loans held by nondeposit trust companies but not bank trust
departments.
2 Outstanding principal balances of mortgages backing securities in
sured or guaranteed by the agency indicated.
3 Other holders include mortgage companies, real estate investment
trusts, State and local credit agencies, State and local retirement funds,
noninsured pension funds, credit unions, and U.S. agencies for which
amounts are small or separate data are not readily available.
6,782
116
1,473
2,902
9,194
295
1,948
2,846
9,516
542
2,122
3,026
57,312
21,738
22,259
18,874
N ote.—Based on data from various institutional and Govt, sources,
with some quarters estimated in part by Federal Reserve in conjunction
with the Federal Home Loan Bank Board and the Dept, of Commerce.
Separation of nonfarm mortgage debt by type of property, if not re
ported directly, and interpolations and extrapolations where required, are
estimated mainly by Federal Reserve. Multifamily debt refers to loans on
structures of 5 or more units.
A 42
D om estic Financial Statistics □ A pril 1977
1.55 CONSUMER INSTALMENT CREDIT Total Outstanding, and Net Change
Millions of dollars
1977
1976
Holder, and type of credit
1974
1975
1976
Aug.
Sept.
Oct.
Nov.
Dec.
Jan.
Feb.
Amounts outstanding (end of period)
1 Total....................................................
155,384
162,237
178,775
171,160
172,918
173,930
175,333
178,775
177,975
178,252
2
3
4
5
6
By holder:
Commercial banks..........................
Finance companies.........................
Credit unions...................................
Retailers1.........................................
Others2.............................................
75,846
36,208
22,116
17,933
3,281
78,703
36,695
25,354
18,002
3,483
85,379
39,642
30,546
19,178
4,030
82,961
38,398
28,956
16,911
3,934
83,714
38,575
29,600
17,012
4,017
84,152
38,809
29,711
17,205
4,053
84,278
39,129
30,053
17,726
4,147
85,379
39,642
30,546
19,178
4,030
85,051
39,665
30,410
18,693
4,156
85,005
39,831
30,701
18,322
4,393
7
8
9
10
11
12
13
By type of credit:
Automobile .......................................
Commercial banks......................
Indirect....................................
Direct.......................................
Finance companies.....................
Credit unions...............................
Others...........................................
50,392
53,028
60,498
58,665
59,270
59,717
60,002
35,095
19,575
15,520
12,957
11,442
508
60,498
60,349
35,009
19,611
15,398
12,901
11,311
496
35,313
19,642
15,671
13,059
11,633
493
35,284
19,566
15,719
12,973
11,579
513
60,774
8,294
3,309
8,254
3,295
8,233
3,277
8,146
3,248
8,726
8,790
8,773
14
15
16
17
Mobile homes:
Commercial banks......................
Finance companies.....................
Home improvement.........................
Commercial banks......................
Revolving credit:
18
19
Bank credit cards........................
Bank check credit.......................
20
21
22
23
24
25
26
27
All other ...........................................
Commercial banks, total............
Personal loans.........................
Finance companies, total............
Personal loans.........................
Credit unions...............................
Retailers.......................................
Others...........................................
30,994
18,687
12,306
10,618
8,414
366
8,972
3,524
7,754
31,534
18,353
13,181
11,439
9,653
402
35,313
19,642
15,671
13,059
11,633
493
34,414
19,404
15,010
12,748
11,024
479
8,704
3,451
8,233
3,277
8,379
3,323
8,340
3,319
8,004
8,773
8,562
8,665
4,694
4,965
5,381
5,263
8,281
2,797
9,501
2,810
11,075
3,010
73,664
20,108
13,771
21,717
16,961
13,037
17,933
869
34,701
19,495
15,206
12,808
11,270
491
76,738
21,188
14,629
21,655
17,681
14,937
18,002
956
83,910
22,368
15,606
23,178
19,043
17.993
19,178
1,193
5,318
10,153
2,922
10,232
2,933
79,438
80,249
80,719
22,112
15,308
22,192
18,275
17,060
16,911
1,163
22,280
15,450
22,316
18,371
17,438
17,012
'1,203
22,325
15,534
22,469
18,509
17,505
17,205
1,215
8,094
3,207
8,750
5,381
5,340
5,307
10,329
2,935
11,075
3,010
10,996
3,031
10,820
3,039
81,728
22,277
83,910
83,469
83,568
5,359
9,924
2,870
8,736
35,492
19,640
15,852
13,042
11,690
550
5,388
15,517
22,748
18,773
17,706
17,726
1,271
22,368
15,606
23,178
19,043
17,993
19,178
1,193
22,254
15,569
23,319
19,002
17,915
18,693
1,288
22,253
15,590
23,454
18,998
18,086
18,322
1,453
Net change (during period)3
28 T otal....................................................
8,952
6,843
16,539
1,403
1,481
1,564
1,243
1,823
1,918
2,022
29
30
31
32
33
By holder:
Commercial banks..........................
Finance companies.........................
Credit unions...................................
Retailers..........................................
Others..............................................
3,975
806
2,507
1,538
126
2,851
483
3,238
69
202
6,678
2,946
5,192
1,176
547
518
169
386
183
148
697
233
483
24
45
671
317
280
263
33
381
245
395
98
124
913
364
537
64
-5 5
565
481
416
249
207
829
442
540
118
93
34
35
36
37
38
39
40
By type of credit:
Automobile .......................................
Commercial banks......................
Indirect.....................................
Direct.......................................
Finance companies.....................
Credit unions...............................
Other............................................
327
2,631
535
-340
875
821
1,239
36
7,470
3,779
1,289
2,490
1,620
1,980
91
621
-508
-310
-198
-1 0 0
958
-2 3
605
528
477
1,013
Commercial banks......................
Finance companies.....................
632
168
-268
-7 3
-471
-174
Home improvement.........................
804
41
42
43
44
45
46
47
48
49
50
51
52
53
54
Mobile homes:
377
159
218
62
136
46
376
125
251
28
172
28
350
117
233
77
105
-4
221
70
151
98
144
14
-3 5
-1 6
-5 3
-1 6
-5 6
-1 6
-4 3
-1 6
39
65
73
103
248
768
611
271
416
25
Bank credit cards........................
Bank check credit.......................
1,443
543
1,220
14
1,576
199
A ll other ...........................................
5,036
3,072
7,172
1,080
858
-6 4
717
1,900
69
87
1,180
977
1,523
1,362
3,056
1,176
237
Commercial banks......................
Revolving credit:
Commercial banks, total............
Personal loans.........................
Finance companies, total...........
Personal loans.........................
Credit unions...............................
Retailers.......................................
Others...........................................
1,255
898
803
479
1,473
1,538
-3 3
1 Excludes 30-day charge credit held by retailers, oil and gas companies,
and travel and entertainment companies.
2 Mutual savings banks, savings and loan associations, and auto dealers.
3 Net change equals extensions minus liquidations (repayments, chargeoffs, and other credits); figures for all months are seasonally adjusted.
43
44
86
-6
166
17
714
698
71
46
126
106
240
183
96
148
108
223
198
297
24
5
504
239
265
161
213
6
32
-1 6
-4 3
-1 8
-2 6
-4 3
73
130
73
54
123
27
71
6
884
645
72
47
163
161
239
98
73
884
418
160
258
99
174
66
55
183
161
258
237
166
263
15
758
652
330
322
146
207
8
36
14
-3 3
7
28
41
170
32
747
1,023
931
199
148
236
113
313
64
-6 6
85
101
401
178
227
249
60
134
114
320
129
312
118
48
Note.—Total consumer noninstalment credit outstanding—credit
scheduled to be repaid in a lump sum, including single-payment loans,
charge accounts, and service credit—amounted to $39.0 billion at the
end of 1976, $35.0 billion at the end of 1975, and $33.4 billion at the end
of 1974. Comparable data for Dec. 31, 1977, will be published in the
Bulletin for February 1978.
C onsum er D eb t
A 43
1.56 CONSUMER INSTALMENT CREDIT Extensions and Liquidations
Millions of dollars
Holder, and type of credit
1974
1975
1977
1976
1976
Aug.
Sept.
Oct.
Nov.
Dec.
Jan.
Feb.
Extensions1
1 Total....................................................
160,008
163,483
186,221
15,685
15,775
16,055
15,763
16,702
16,870
17,186
By holder:
2 Commercial b a n k s.........................
3 Finance companies.........................
4 Credit unions..................................
5
6 Others3............................................
72,605
35,644
22,403
27,034
2,322
77,131
32,582
24,151
27,049
2,570
88,666
35,956
28,829
29,569
3,201
7,487
2,965
2,313
2,548
372
7,546
3,072
2,424
2,463
271
7,618
3,148
2,350
2,673
266
7,486
3,059
2,395
2,467
356
8,182
3,157
2,688
2,480
194
7,546
3,431
2,683
2,775
436
8,055
3,437
2,743
2,603
347
43,209
48,103
55,807
4,712
2,762
4,769
4,587
2,691
1,426
1,265
927
957
57
5,263
2,846
1,511
1,335
891
963
69
2,770
1,479
1,291
904
875
37
4,632
1,480
1,282
937
928
84
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
By type of credit:
Automobile ..................... ................
Commercial banks......................
Indirect.....................................
Direct.......................................
Finance companies.....................
Credit unions..............................
Others..........................................
Mobile homes:
26,406
15,576
10,830
8,630
7,788
385
Commercial banks......................
Finance companies.....................
3,486
1,413
Home improvement.........................
4,571
28,333
15,761
12,572
9,598
9,702
470
32,687
17,600
15,087
11,210
11,336
574
3,170
1,723
1,446
992
1,051
51
2,892
1,544
1,349
964
974
110
4,940
5,205
3,075
1,641
1,435
999
1,075
55
2,681
771
2,449
690
186
54
200
53
178
59
207
54
267
53
195
50
207
52
400
463
Revolving credit:
Bank credit cards........................
Bank check credit.......................
Commercial banks, total............
Personal loans....................... .
Finance companies, total............
Personal loans.........................
Credit unions...............................
Retailers.......................................
Others...........................................
2,789
2,722
4,398
5,034
3,036
242
434
266
282
464
276
461
288
494
262
251
17,098
4,227
20,428
4,024
25,481
4,832
2,183
413
2,165
375
2,198
413
2,181
410
2,217
426
2,117
462
2,332
448
86,004
Commercial banks......................
83,079
91,928
7,737
7,779
8,158
7,815
8,015
8,612
8,484
18,599
13,176
25,316
16,691
14,228
27,034
827
18,944
13,386
22,135
17,333
13,992
27,049
959
20,182
14,463
24,014
19,610
16,911
29,569
1,253
1,702
1,197
1,970
1,607
1,338
2,548
180
1,693
1,193
2,125
1,745
1,410
2,463
87
1,777
1,286
2,182
1,776
1,426
2,673
100
457
1,721
1,238
2,072
1,696
1,389
2,467
166
1,815
1,317
2,108
1,688
1,582
2,480
30
1,618
1,213
2,413
1,787
1,656
2,775
151
1,742
1,281
2,379
1,843
1,612
2,603
149
Liquidations1
28 Total....................................................
151,056
156,640
169,682
14,282
14,294
14,491
14,520
14,879
14,952
15,164
29
3Q
31
32
33
By holder:
Commercial banks..........................
Finance companies.........................
Credit unions...................................
Retailers2........................................
Others3............................................
68,630
34,838
19,896
25,496
2,196
74,280
32,099
20,913
26,980
2,368
81,988
33,010
23,637
28,393
2,654
6,970
2,796
1,927
2,365
224
6,849
2,839
1,941
2,439
226
6,947
2,831
2,070
2,410
233
7,105
2,814
2,000
2,369
232
7,269
2,793
2,151
2,416
249
6,981
2,949
2,267
2,526
228
7,227
2,995
2,203
2,485
254
34
35
36
37
38
39
40
By type of credit:
Automobile .......................................
Commercial banks......................
Indirect.....................................
Direct.......................................
Finance companies.....................
Credit unions...............................
Others...........................................
42,883
45,472
48,337
4,090
4,165
4,059
4,155
4,250
4,183
2,517
1,393
1,124
846
843
43
2,474
1,384
1,090
866
800
43
4,320
233
74
250
70
234
70
238
67
233
96
41
42
43
44
45
46
47
48
49
50
51
52
53
54
Mobile homes:
Commercial banks......................
Finance companies.....................
Commercial banks......................
Revolving credit:
26,915
15,886
11,029
8,730
6,830
408
27,798
16,101
11,697
8,777
8,463
434
28,908
16,311
12,597
9,590
9,356
483
2,385
1,321
1,064
874
792
39
2,470
1,386
1,084
862
791
42
2,854
1,245
2,949
844
2,921
864
222
70
253
69
3,767
4,150
4,266
2,620
361
2,451
369
2,178
216
2,420
1,363
1,058
827
770
42
2,470
1,356
1,114
829
813
43
2,571
1,402
1,169
838
862
49
390
234
364
227
385
239
360
388
223
221
237
Bank credit cards........................
Bank check credit.......................
15,655
3,684
19,208
4,010
23,905
4,632
2,097
419
2,000
358
2,074
386
2,110
404
2,250
419
2,089
421
2,161
416
All other ...........................................
80,969
80,007
84,757
7,023
1,631
1,151
1,844
1,501
1,098
2,365
85
7,081
7,274
7,170
7,268
7,590
7,553
Commercial banks, to tal............
Personal loans.........................
Finance companies, total...........
Personal loans.........................
Credit unions...............................
Retailers.......................................
Others...........................................
17,345
12,278
24,513
16,212
12,755
25,496
860
17,864
12,528
22,199
16,616
12,092
26,980
872
19,002
13,486
22,491
18,248
13,855
28,393
1,016
1 Monthly figures are seasonally adjusted.
2 Excludes 30-day charge credit held by retailers, oil and gas companies,
and travel and entertainment companies.
1,545
1,085
1,902
1,547
1,113
2,439
82
1,594
1,125
1,924
1,539
1,260
2,410
86
1,649
1,191
1,909
1,535
1,150
2,369
93
1,615
1,169
1,872
1,575
1,268
2,416
96
1,533
1,111
2,012
1,608
1,429
2,526
90
1,608
1,167
2,059
1,714
1,300
2,485
101
3 Mutual savings banks, savings and loan associations, and auto dealers.
A 44
D om estic Financial Statistics □ A pril 1977
1.57 FUNDS RAISED IN U.S. CREDIT MARKETS
Billions of dollars; half-year data are at seasonally adjusted annual rates.
i
Transaction category, or sector
1 NONFINANCIAL SECTORS.........................
2 Excluding equities ...........................................
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
By sector and instrument:
U.S. Govt........................................................
Public debt securities.................................
Agency issues and mortgages...................
All other nonfinancial sectors.........................
Corporate equities.....................................
Debt instruments.......................................
Private domestic nonfinancial sectors........
Corporate equities..................................
Debt instruments .....................................
Debt capital instruments .....................
State and local obligations............
Corporate bonds.............................
Mortgages:
Hom e...........................................
Multifamily residential...............
Commercial.................................
Farm ............................................
Other debt instruments .......................
Consumer credit.............................
Bank loans n.e.c..............................
Open market paper.........................
O ther...............................................
By borrowing sector ...................................
State and local governments.............
Households.........................................
Farm ....................................................
Nonfarm noncorporate......................
Corporate............................................
1971
151.0
1972
1973
1974
188.8
210.4
200.3
257.7
184.2
247.3
236.5
173.8
238.3
277.2
226.9
224.7
269.9
24.7
26.0
- 1 .3
126.3
11.5
114.8
121.1
11.4
15.2
14.3
1.0
161.7
10.5
151.2
157.7
10.9
8.3
7.9
.4
189.4
7.7
181.7
183.1
7.9
12.0
12.0
*
176.8
3.8
173.0
161.6
4.1
85.2
85.8
- .6
125.2
10.0
115.1
112.2
9.9
68.9
69.1
- .2
188.8
10.5
178.3
168.5
10.1
80.8
82.0
- 1 .2
103.4
10.5
93.0
94.9
10.3
89.6
89.7
- .1
146.9
9.6
137.3
129.4
9.5
102.3
101.3
158.4
122.0
84.6
97.5
16.2
71.7
71.8
- .1
166.6
13.6
153.0
151.1
13.3
119.9
105.1
33.4
18.4
21.0
137.8
110.6
66.2
66.5
- .4
211.0
7.3
203.7
185.8
6.9
33.5
*
8.7
5.6
48.1
- .2
13.1
4.8
109.7
86.8
17.5
18.8
146.8
102.8
15.4
12.2
175.3
106.7
16.3
9.2
157.5
101.2
19.6
19.7
28.6
9.7
9.8
2.4
42.6
12.7
16.4
3.6
46.4
10.4
18.9
5.5
34.6
7.0
15.1
5.1
22.8
4 4.0
68 .6
56.3
11.6
6.5
- .4
5.1
121.1
17.8
42.1
4.5
10.3
46.4
5.2
*
18.6
18.1
.8
6.5
157.7
15.2
64.8
5.8
13.1
58.8
21.7
34.8
2.5
9.6
183.1
14.8
73.5
9.7
12.3
72.9
168.5
94.9
129.4
151.1
185.8
24
25
26
27
28
29
25.2
.4
13.0
.1
20.3
.4
12.8
20.0
56.7
16.3
3.6
3 6.8
2.3
10.3
.9
2.4
15.2
- .2
2.3
- 3 .9
2.8
- 4 .0
5.7
2.0
- 3 .9
9.3
- 2 .0
15.3
30.5
28.3
40
14.0
13.1
18.0
.4
2.1
1.2
1.0
12.4
41
.9 42
16.2 43
—.3 44
11.4 45
1.1 46
10.3 47
4.3 48
2.8 49
- 4 .9 50
9.9 51
- 1 .7 52
17.3
5.8
3.2
10.3
19.9
1.3
1.1
3.9
14.2
*
.3
12.1
1 .2
1.2
2.2
15.2
2.5
11.5
4.0
9.2
3.9
14.2
11.9
.4
5.1
.9
-.9
2.1
12.4
11.9
24.8
16.9
- 7 .8
.9
- .8
- 1 .6
1.5
2.6
- 2 .3
- .3
.2
3.6
1.0
2.1
- 2 .2
.1
*
- 1 .3
- 1 .5
- .7
1.0
6.6
- 1 .7
- 1 .1
- .7
.7 53
16.2 54
55
6.8 56
- . 3 57
.5 58
.8 59
1.0 60
4.3 61
- 1 .0 62
- . 7 63
.2 64
287.1
198.6
251.8
268.7
305.5
65
- .9
12.1
1.5
10.2
- 1 .1
15.1
275.9
.1
10.7
- .7
9.1
187.0
241.0
254.8
297.1
66
67
68
69
70
71
72
73
74
75
76
- 1 .1
3.5
2.9
6.3
.9
4.5
1.1
- .5
2.4
.3
- .3
- 2 .1
.9
.7
- 1 .9
.8
1.3
9.3
- .8
-.5
*
1.0
5.4
-1 .4
- .9
- .3
65 ALL SECTORS, by instrument.......................
168.1
206.0
254.3
231.8
225.2
Investment company shares..........................
Other corporate equities...............................
Debt instruments ............................................
U.S. Govt, securities.................................
State and local obligations.......................
Corporate and foreign bonds...................
Mortgages...................................................
Consumer credit.........................................
Bank loans n.e.c.........................................
Open market paper and Rp’s ...................
Other loans.................................................
1.3
13.7
- .5
- 1 .2
10.4
- .5
5.4
.8
10.4
245.2
227.0
214.0
98.0
17.3
36.3
59.0
8.5
- 1 4 .4
.5
8.7
1.2
-.8
2.5
1.2
-4 .1
1 .6
3.3
9.2
.6
- 2 .8
8.7
- 2 .3
8.1
2.2
5.1
6.0
.5
9.4
6.5
- 1 .2
34.5
19.6
23.9
60.5
9.8
38.4
17.8
22.5
1.4
11.5
1.1
- 7 .3
.8
2.0
.5
6.2
6.3
- .5
14.4
6.7
7.4
1.0
2.2
5.2
3.3
3.4
- 3 .2
- 1 .9
- .6
2.4
- .4
1.6
-.1
.6
2.7
2.9
1.3
N ote.—Full statements for sectors and transaction types quarterly, and
annually for flows and for amounts outstanding, may be obtained from
38
39
11.9
.1
11.2
1.0
2.1
- 1 .3
7.5
3.9
6.7
28.3
16.3
13.6
79.9
21.7
51.6
15.2
18.5
282.6
71.6
1.3
1.2
.1
2.9
19.9
18.9
23.7
15.4
18.4
76.8
18.6
27.8
4.1
8.0
227.2
60.6
17.4
35.3
n .s
192.8
231.3
84.4
13.5
36.8
30.7
17.5
23.5
52.5
11.6
12.1
.9
4.2
10.3
6.1
4.2
4.2
-5 .4
23.1
18.0
153.1
7.3
3.8
.8
3.2
11.1
29.4
16.6
5.8
.7
19.3
88.5
13.5
5.7
58.8
30
31
32
33
23
35
36
37
14.8
2 0 .7
.1
15.1
43.0
7 .6
4.8
15.4
.3
17.3
183.7
80.3
11.1
3.5
4.9
17.4
.1
254.9
66.1
19.9
16.2
71.9
11.9
3.8
47.3
8.5
.1
207.5
82.3
8 .4
15.9
60.4
9.4
3.2
40.6
8 .4
5.7
.6
- 1 .2
3.3
.5
3.5
4.9
20 .7
6.2
4.0
-.1
2.8
2.9
13.9
39.0
9.4
- .8
33.5
8.8
5.0
2.5
3.7
2.8
1.1
4.8
11.1
17.7
80.2
12.7
4.7
53.1
15.5
29.1
1.1
4.8
14.9
49.7
9.4
1.2
37.1
15.3
- .2
3.5
- 1 .2
14.0
11.8
7.2
45.5
112.2
18.6
45.2
7.9
6.7
83.1
6 .4
5.1
1.7
6.8
4.4
*
27.2
15
16
17
18
19
20
21
22
23
161.6
6.2
- .2
1.5
64.8
1.9
13.7
7.8
21.6
8.6
- 1 .3
16.5
4 .4
2.8
14.8
53.5
.7
11.9
6.0
19.4
-1 2 .9
8.2
12.6
4.0
- .4
16.3
3.6
-1 2 .8
18.6
26.7
16.0
- 5 .5
- 4 .2
8.5
17.0
3.8
2.1
3.5
.9
- 2 .7
36 .4
178.9
133.4
1.1
-2 3 .5
- .2
9.7
40 FINANCIAL SECTORS.................................
3.5
1.0
59.1
1.3
12.8
6.9
17.9
20.7
20.5
- 2 .2
3.5
14.6
193.4
16.6
5 .9
40.8
- .1
10.9
5.2
18.2
23.7
3
4
5
6
7
8
9
10
11
12
13
14
8.5
-1 4 .5
- 2 .2
9.1
199.3
9.9
5 .2
17.3
27.2
1
2
9.8
26.2
6.8
13.5
177.2
15.5
66
67
68
69
70
71
72
73
74
75
76
H2
185.0
147.8
21.6
By sector:
Sponsored credit agencies.............................
Mortgage pools..............................................
Private financial sectors .................................
Commercial banks.....................................
Bank affiliates.............................................
Foreign banking agencies..........................
Savings and loan associations...................
Other insurance companies.......................
Finance companies.....................................
REIT’s ........................................................
Open-end investment companies..............
Money market funds.................................
HI
190.0
2.1
4.7
7.1
1.6
- 4 .6
53
54
55
56
57
58
59
60
61
62
63
64
H2
197.6
1.0
2.8
.9
1.7
- 1 .7
Sponsored credit agencies.........................
Mortgage pool securities...........................
Loans from U.S. Govt...............................
Private financial sectors .................................
Corporate equities.....................................
Debt instruments .........................................
Corporate bonds.....................................
Mortgages...............................................
Bank loans n.e.c......................................
Open market paper and Rp’s ...............
Loans from FHLB’s...............................
HI
1976
176.9
1.0
3.0
- 1 .0
1.5
- .3
U.S. Govt, related ...........................................
1975
166.4
.9
2.1
.3
1.8
3.2
41
42
43
44
45
46
47
48
49
50
51
52
1976
139.6
Foreign........................................................
30
Corporate equities.................................
31
32
Debt instruments .....................................
Bonds..................................................
33
34
Bank loans n.e.c..................................
Open market paper............................
35
U.S. Govt, loans.................................
36
37 M emo: U.S. Govt, cash balance.....................
Totals net of changes in U.S. Govt, cash
balance:
38 Total funds raised..........................................
By U.S. Govt..............................................
39
By instrument:
1975
86.6
18.2
38.2
82.0
20.5
- 1 .1
15.3
16.1
93.6
16.2
41.6
49.1
1.1
- 2 7 .6
6.2
6.8
102.4
18.4
31.0
69.0
16.0
- 1 .2
- 5 .1
10.7
89.9
17.9
35.2
73.2
19.4
-1 1 .9
17.7
13.5
11.4
83.4
18.6
41.3
90.8
21.6
9.8
12.8
18.8
Flow of Funds Section, Division of Research and Statistics, Board of
Governors of the Federal Reserve System, Washington, D.C. 20551.
Flow o f Funds
1.58
D IR E C T A N D IN D IR E C T S O U R C E S O F F U N D S T O C R E D IT M A R K E T S
Billions of dollars, except as noted; half-year data are at seasonally adjusted annual rates.
1975
Transaction category or sector
1 Total funds advanced in credit markets to
nonfinancial sectors....................................
2
3
4
5
6
7
8
9
10
11
By public agencies and foreign:
Total net advances..............................................
U.S. Govt, securities....................................... .
Residential mortgages...................................
FHLB advances to S&L’s .............................
Other loans and securities.............................
Totals advanced, by sector
U.S. Govt........................................................
Sponsored credit agencies.............................
Monetary authorities.....................................
Foreign............................................................
Agency borrowing not included in line 1........
Private domestic funds advanced
12 Total net advances ..............................................
13 U.S. Govt, securities.....................................
14 State and local obligations...........................
15 Corporate and foreign bonds.......................
16 Residential mortgages...................................
17 Other mortgages and loans...........................
18 L ess: FHLB advances...................................
Private financial intermediation
19 Credit market funds advanced by private
financial institutions....................................
20 Commercial banks.........................................
21
Savings institutions....................................
22
Insurance and pension funds....................
23 Other finance........... .....................................
24 Sources o f funds .................................................
25 Private domestic deposits.............................
26 Credit market borrowing..............................
27
28
29
30
31
Other sources ..................................................
1971
1972
1973
1974
1975
1976
HI
200.3
247.3
173.8
226.9
224.7
269.9
1
4 3 .4
19.8
34.2
5 2 .7
4 4 .2
5 4 .5
2 5.6
12.7
5 1 .9
3 6 .6
5 0 .8
26.6
34.4
7.0
- 2 .7
4.6
7.6
7.0
*
5.1
9.6
8.2
7.2
9.2
11.9
14.7
6.7
19.5
22.5
16.2
-4 .0
9.5
- 2 .0
18.1
32.6
15.9
- 7 .3
10.6
12.4
16.5
- .6
8.3
58.3
11.1
- 2 .3
15.4
24.7
14.4
- 1 .7
20.9
2
3
4
5
6
2.8
5.2
8.9
26.4
5.9
1.8
9.2
.3
8.4
8.4
2.8
21.4
9.2
.7
19.9
9.8
25.6
6.2
11.2
23.1
15.1
14.5
8.5
6.1
13.5
10.7
20.3
9.8
13.8
17.4
14.9
15.9
7.0
14.2
14.0
15.2
13.2
10.1
-2 .0
13.1
5.9
20.0
13.6
11.4
18.0
15.5
20.6
6.1
16.1
16.9
7
8
9
10
11
102.1
155.0
175.7
155.3
22.6
169.6
75.5
17.3
32.8
24.4
15.7
- 4 .0
210.2
135.9
203.4
191.9
228.4
19.6
20.9
26.9
71.9
6.7
12
13
14
15
16
17
18
126.2
116.0
195.1
19
20
21
22
23
195.1
24
25
26
- 3 .7
17.5
19.5
31.2
35.0
- 2 .7
109.7
50.6
39.1
14.2
5.9
109.7
89.4
7.6
16.1
15.4
13.1
48.1
62.3
*
149.4
70.5
47.2
17.8
13.8
149.4
100.9
18.0
18.7
16.3
10.0
48.5
89.3
7.2
163.8
86.5
36.0
23.8
17.4
163.8
86.4
35.3
126.2
69.4
18.9
-1 .0
18.4
17.8
14.5
- 5 .1
26.0
2.4
Private domestic nonfinancial investors
32 Direct lending in credit markets ........................
33 U.S. Govt, securities.....................................
34 State and local obligations...........................
35 Corporate and foreign bonds.......................
36 Commercial paper.........................................
37 Other..............................................................
*
- 1 0 .8
.5
8.3
- 1 .1
3.2
2 3 .6
47.2
40.8
38 Deposits and currency........................................
39
Time and saving accounts ...............................
40
Large negotiable CD’s ...............................
41
Other at commercial banks.......................
42
At savings institutions...............................
92.8
79.1
105.3
8 3 .7
43
44
45
13.7
7.7
31.8
39.6
42.1
6.9
64.6
27.0
30.1
4.5
5.3
.7
11.6
12.8
4.2
3.1
4.2
3.0
9.1
19.4
7.5
.9
12.5
6.9
90.3
76.2
8.7
29.7
45.4
18.4
29.4
28.4
21 .6
14.1
10.4
3.4
17.2
4.4
3 7.8
17.9
12.2
5.3
4.6
8.1
75.7
67.4
27.6
51.0
39.3
- 1 .8
116.0
90.5
.1
25 .4
- .4
- 1 .7
29.9
-2 .4
53 .7
23.0
9.9
10.4
3.1
7.3
9 6 .7
84.8
61.0
18.2
31.5
47.6
49.9
- 2 .0
168.2
42.6
72.3
46.5
6.7
168.2
108.1
11.2
4 8 .9
61.0
16.2
38.9
17.7
- 5 .2
- 7 .3
9 7 .7
13.5
49.8
36.4
- 1 .9
9 7 .7
90.3
- .8
8 .2
4.9
- .2
35.6
8.6
-1 0 .1
53.1
37 .4
22.4
6.5
5.9
6.3
12.0
115.8
105.6
- 5 .7
- 3 .5
27 A
90.0
18.4
26.7
31.1
36.5
- .6
134.3
41.7
52.2
42.3
- 1 .8
134.3
90.6
1.0
4 2 .7
5.0
.1
32.5
5.2
70.1
5.0
10.3
12.9
3.5
5.6
41.0
9.6
7.9
2.7
8.9
9 5 .7
75.0
9 7 .7
9 4 .7
2.9
63.3
17.9
27.0
43.1
38.4
- 2 .3
141.3
20.8
71.1
44.3
5.1
141.3
88.8
12.1
64.5
73.5
48.8
8.3
127.3
10.3
- 4 .1
37.6
16.4
57.5
7 .6
27
28
29
30
31
6 2 .7
43 .7
32
33
34
35
36
37
93.0
85.1
138.5
126.0
38
39
40
41
42
28.3
7.1
6.4
9.4
11.6
16.5
5.9
5.4
3.2
12.6
23.6
21.4
22.4
- 9 .7
35.4
59.2
-1 5 .1
51.5
69.2
-2 2 .3
34.4
63.0
8.3
11.9
10.2
2.5
2 0 .7
15.3
5.4
- 4 .0
7.1
7.9
3.7
4.1
12.5
7.7
1.3
11.2
43
44
45
182.1
46
10.2
3.9
2.0
6.3
5.7
6.2
36.4
55.4
3 .0
- 2 3 .0
42.1
66.0
92.9
129.0
137.5
123.7
150.4
168.9
133.1
167.8
155.7
31.1
107.4
22.5
11.9
96.4
13.7
18.0
93.2
7.6
28.5
81.2
25.7
22.1
68.4
5.7
22.0
80.0
18.6
29.9
71.9
8.5
16.1
66.0
3.0
22.6
73.6
13.5
M emo : Corporate equities not included above
50 Total net issues...................................................
51 Mutual fund shares.......................................
52 Other equities.................................................
53 Acquisitions by financial institutions...............
54 Other net purchases...........................................
15.0
1.3
13.7
17.8
- 2 .9
13.3
- .5
13.8
15.3
- 2 .1
9.2
- 1 .2
10.4
13.3
- 4 .1
4.9
- .5
5.4
5.5
- .7
11.2
.8
10.4
8.3
2.9
11.2
- .9
12.1
10.4
.8
11.7
1.5
10.2
9.2
2.4
10.8
.1
10.7
7.4
3.4
14.0
- 1 .1
15.1
11.8
2.2
N otes by line no.
1. Line 2 of p. A-44.
2. Sum of lines 3-6 or 7-10.
6. Includes farm and commercial mortgages.
11. Credit market funds raised by Federally sponsored credit agencies.
Included below in lines 13 and 33. Includes all GNMA-guaranteed
security issues backed by mortgage pools.
12. Line 1 less line 2 plus line 11. Also line 19 less line 26 plus line 32.
Also sum of lines 27, 32, 39, and 44.
17. Includes farm and commercial mortgages.
25. Lines 39 plus 44.
26. Excludes equity issues and investment company shares. Includes
line 18.
28. Foreign deposits at commercial banks, bank borrowings from foreign
branches, and liabilities of foreign banking agencies to foreign af
filiates.
58.8
18.6
35.9
52.1
61.4
- 1 .7
2.1
3.8
33.6
.9
40 .4
Public support rate (in per cent)...................
Private financial intermediation (in per cent)
Total foreign funds........................................
H2
185.0
30 .5
46 Total of credit market instruments, deposits
and currency................................................
H2
190.0
12.6
Demand deposits.......................................
Currency.....................................................
HI
166.4
- 3 .9
2.2
8.6
5.7
Money ..............................................................
1976
139.6
Foreign funds.............................................
Treasury balances......................................
Insurance and pension reserves................
Other, net....................................................
47
48
49
A 45
- 7 .4
60.9
72.4
21.6 47
85.4 48
23.8 49
8.4
- .7
9.1
9.1
- .6
50
51
52
53
54
29. Demand deposits at commercial banks.
30. Excludes net investment of these reserves in corporate equities.
31. Mainly retained earnings and net miscellaneous liabilities.
32. Line 12 less line 19 plus line 26.
33-37. Lines 13-17 less amounts acquired by private finance. Line 37
includes mortgages.
45. Mainly an offset to line 9.
46. Lines 32 plus 38 or line 12 less line 27 plus line 45.
47. Line 2/line 1.
48. Line 19/line 12.
49. Lines 10 plus 28.
50. 52. Includes issues by financial institutions.
A 46
2.1 0
D om estic N onfinancial Statistics □ A pril 1977
S E L E C T E D M E A S U R E S O F N O N F I N A N C I A L B U S IN E S S A C T IV IT Y
1967 = 100 except as noted; monthly and quarterly data are seasonally adjusted
1976
Measure
1974
1975
1977
1976
Aug.
1 Industrial production..................................................
2
3
4
5
6
7
Market groupings:
Products, total ....................................................
Final, total......................................................
Consumer goods.........................................
Equipment..................................................
Intermediate....................................................
Materials.............................................................
8
Sept.
Oct.
Nov.
Dec.
Jan.
Feb.
Mar.
129.3
117.8
129.8
131.3
130.8
130.4
131.8
133.1
132.0
133.3
135.1
129.3
119.3
129.3
130.3
129.7
129.6
131.7
133.8
133.0
133.7
135.7
127.3
136.8
114.3
136.8
130.5
128.3
137.5
115.7
137.8
133.0
116.3
129.4
131.6
130.7
129.9
131.9
132.8
131.1
132.6
135.0
73.6
73.6
80.1
80.3
81.1
81.6
80.4
81.0
79.7
80.3
80.8
80.3
81.2
80.1
80.0
79.0
80.7
80.1
82.0
80.8
125.1
128.9
120.0
135.3
132.4
118.2
124.0
110.2
123.1
115.5
Industry groupings:
Manufacturing....................................................
129.4
Capacity utilization (per cent)1 in :
9 Manufacturing........................................................
10 Industrial materials industries...............................
84.2
87.7
127.4
136.2
115.2
138.7
132.5
127.4
136.9
114.4
138.3
131.6
129.8
139.1
116.9
138.8
131.9
132.1
142.0
118.6
139.8
131.9
130.8
140.1
117.9
141.3
130.5
131.5
140.9
118.7
141.9
132.5
133.7
143.4
120.5
142.8
134.0
11 Construction contracts2............................................
173.9
162.3
190.2
186.0
182.0
237.0
186.0
183.0
203.0
207.0
12 Nonagricultural employment, total3..........................
13 Goods-producing, total..........................................
14
Manufacturing, total..........................................
15
Manufacturing, production-worker..................
16 Service-producing...................................................
119.1
106.2
103.1
102.1
126.1
116.9
96.9
94.3
91.3
127.8
120.6
100.3
97.5
95.2
131.7
120.9
100.2
97.6
95.2
132.2
121.4
100.8
98.2
96.1
132.6
121.2
100.2
97.4
94.9
132.7
121.6
100.9
98.0
95.6
132.9
122.0
101.0
98.2
95.7
133.5
122.3
101.3
98.8
96.5
133.8
122.7 *■123.5
'101.8 *103.0
98.8 *99.7
'96.4 *97.8
134.2 *134.7
17 Personal income, total4..............................................
18 Wages and salary disbursements...........................
19 Manufacturing........................................................
184.1
178.9
157.6
199.4
188.7
157.9
219.1
208.3
176.7
221.1
208.8
178.1
222.1
209.9
178.9
224.9
211.3
179.1
226.8
213.2
182.4
229.7 '230.0
217.6 '218.4
184.1 '185.0
'233.2 *237.1
'221.5 *224.4
'187.8 P191.5
20 Disnosahle nersonal income......................................
180.5
198.5
217.0
217.0
21 Retail sales5................................................................
171.2
186.0
206.6
208.8
206.7
208.8
212.3
221.2
216.5
222.2
227.6
Prices:6
22 Consumer...............................................................
23 Wholesale................................................................
147.7
160.1
161.2
174.1
170.5
182.9
171.9
183.7
172.6
184.7
173.3
185.2
173.8
185.6
174.3
187.1
175.3
188.0
177.1
190.0
191.9
1 Ratios of indexes of production to indexes of capacity. Based on data
trom Federal Reserve, McGraw-Hill Economics Department, and De
partment of Commerce.
2 Index of dollar value of total construction contracts, including
residential, nonresidential, and heavy engineering, from McGraw-Hill
Informations Systems Company, F. W. Dodge Division.
3 Based on data in Employment and Earnings (U.S. Dept, of Labor).
Series covers employees only, excluding personnel in the Armed Forces.
4 Based on data in Survey o f Current Business (U.S. Dept, of Com
merce). Series for disposable income is quarterly.
218.1
234.1
5 Based on Bureau of Census data published in Survey o f Current
Business (U.S. Dept, of Commerce).
6 Data without seasonal adjustment, as published in Monthly Labor
Review (U.S. Dept, of Labor). Seasonally adjusted data for changes in
the price indexes may be obtained from the Bureau of Labor Statistics,
U.S. Dept, of Labor.
N ote.—Basic data (not index numbers) for series mentioned in notes
3, 4, and 5, and indexes for series mentioned in notes 2 and 6 may also be
found in the Survey o f Current Business (U.S. Dept, of Commerce).
C apacity a nd M anpow er
2.11
A 47
OUTPUT, CAPACITY, AND CAPACITY UTILIZATION
Seasonally adjusted
1976
Series
Q2
Q3
1977
1976
Q2
Ql*
Q4
Output (1967 = 100)
1977
Q3
Ql*
Q4
Capacity (per cent of 1967 output)
1976
Q2
1977
Q4
Q3
Ql*
Utilization rate (per cent)
1 Manufacturing..............................................
129.4
131.1
131.5
132.9
161.3
162.3
163.2
164.3
80.2
80.8
80.6
80.9
Primary processing...................................
Advanced processing...............................
136.6
125.2
139.3
126.3
138.9
127.5
138.7
129.9
167.5
158.0
168.8
158.8
170.1
159.6
171.4
160.6
81.5
79.3
82.5
79.6
81.7
79.9
80.9
80.9
4 M aterials......................................................
130.3
132.6
131.8
132.3
161.7
163.1
164.3
165.5
80.6
81.3
80.2
80.0
Durable goods..........................................
Basic m etal...........................................
Nondurable goods...................................
Textile, paper, and chemical...............
Textile...............................................
Paper.................................................
Chemical...........................................
Energy......................................................
126.1
110.8
146.9
151.6
115.5
132.5
175.3
120.0
130.7
117.1
146.6
151.2
114.4
131.9
175.1
119.9
128.4
107.7
147.0
151.5
111.7
130.2
177.6
121.5
128.5
105.8
147.5
152.2
112.0
131.7
178.3
122. 8
165.5
143.1
171.0
178.3
139.0
145.7
208.7
141.5
166.7
143.7
172.5
180.1
139.8
146.7
211.2
142.7
167.8
144.4
174.1
182.0
140.6
147.9
213.7
143.9
169.0
144.8
175.6
183.6
141.4
148.9
216.2
144.3
76.2
77.4
85.9
85.0
83.1
90.9
84.0
84.8
78.4
81.5
85.0
84.0
81.8
89.9
82.9
84.0
76.5
74.6
84.4
83.2
79.4
88. 1
83.1
84.4
76.0
2
3
5
6
7
8
9
10
11
12
2.12
84.0
82.9
85.1
LABOR FO RCE, EM PLO Y M EN T, A N D U N EM PLO Y M EN T
Thousands of persons; monthly data are seasonally adjusted; except as noted.
Category
1974
1975
1976
1976
Sept.
Oct.
1977
Nov.
1
| Dec.
Jan.
Feb.
Mar.*
Household survey data
1 Noninstitutional population1..............
2 Labor force (including Armed
Forces)1.......................................
3 Civilian labor force.............................
Employment:
4
Nonagricultural industries2........
5
Agriculture...................................
Unemployment:
6
Num ber.......................................
7
Rate (,per cent o f civilian labor
force ) ....................................
8 Not in labor force...............................
150,827
153,449
156,048
156,595
156,788
157,006
157,176
157,381
157,584
157,782
93,240
91,011
94,793
92,613
96,917
94,773
97,387
95,242
97,449
95,302
98,020
95,871
98,106
95,960
97,649
95,516
98,282
96,145
98,677
96,539
82,443
3,492
81,403
3,380
84,188
3,297
84,516
3,278
84,428
3,310
84,972
3,248
85,184
3,257
85,468
3,090
85,872
3,090
86,359
3,116
5,076
7,830
7,288
7,448
7,564
7,651
7,517
6,958
7,183
7,064
5 .6
8 .5
7.7
7.8
7.9
8 .0
7.8
7.3
7.5
7.3
57,587
58,655
59,130
59,208
59,339
58,986
59,071
59,732
59,302
59,104
80,344
19,095
808
3,605
4,553
17,898
4,403
14,936
15,046
'80,561
'19,211
'817
'3,561
'4,549
'17,981
'4,423
'15,010
'15,009
'80,816
'19,217
'827
'3,636
'4,555
'18,086
'4,438
'15,068
'14,989
81,304
19,383
841
3,731
4,579
18,177
4,458
15,124
15,011
Establishment survey data
9 Nonagricultural payroll employment3
10 Manufacturing................................
11 Mining.............................................
12 Contract construction.....................
13 Transportation and public utilities.
14 Trade................................................
15 Finance............................................
16 Service..............................................
17 Government....................................
78,413
20,046
694
3,957
4,696
17,017
4,208
13,617
14,177
77,050
18,347
745
3,515
4,499
16,997
4,222
14,008
14,773
79,443
18,958
783
3,593
4,508
17,694
4,315
14,645
14,947
1 Persons 16 years of age and over. Monthly figures, which are based
on sample data, relate to the calendar week that contains the 12th day;
annual data are averages of monthly figures. By definition, seasonality
does not exist in population figures. Based on data from Employment
and Earnings (U.S. Dept, of Labor).
2 Includes self-employed, unpaid family, and domestic service workers.
79,918
19,100
798
3,565
4,528
17,839
4,338
14,798
14,952
79,819
18,941
800
3,582
4,506
17,824
4,359
14,819
14,988
80,106
19,065
805
3,619
4,519
17,808
4,381
14,873
15,036
3 Data include all full- and part-time employees who worked during,
or received pay for, the pay period that includes the 12th day of the
month, and exclude proprietors, self-employed persons, domestic servants,
unpaid family workers, and members of the Armed Forces. Data are
adjusted to the February 1977 benchmark. Based on data from Employ
ment and Earnings (U.S. Dept, of Labor).
A 48
2.13
D om estic N onfinancial Statistics o A pril 1977
IN D U S T R IA L P R O D U C T IO N
Unless otherwise noted, figures are indexes (1967 = 100) except as noted; monthly data are seasonally adjusted.
Grouping
1967
pro
por
tion
1975
1976p
aver
age
1976
Dec.
Jan.
1976
Sept.
Oct.
1977
Nov.
Dec.
Jan.
Feb.
Mar.
Major market groupings
1 Total index.........................................
100.00
129.8
124.4
125.7
130.8
130.4
131.8
133.1
132.0
133.3
135.1
2 Products.............................................
3 Final products .................................
4
Consumer goods.......................
5
Equipment..................................
6 Intermediate products...................
7 Materials............................................
60.71
129.3
124.9
126.0
129.7
127.4
133.0
127.4
129.8
132.1
130.8
131.5
135.7
27.68
20.14
12.89
39.29
132.3
111.5
129.9
123.3
123.9
133.8
136.8
114.3
136.8
130.5
123.5
131.7
133.7
127.3
129.6
134.0
139.4
143.7
151.2
161.6
154.6
139.1
179.3
180.4
180.1
159.8
181.7
145.1
145.5
148.8
137.9
121.5
176.6
Consumer goods
47.82
2.83
2.03
1.90
.80
7.89
141.5
Automotive products................
Autos and utility vehicles___
Autos..................................
Auto parts and allied goods...
13
14
15
16
17
Home goods...............................
Appliances, A/C, and T V ....
Appliances and T V ............
Carpeting and furniture........
Misc. home goods.................
5.06
1.40
1.33
1.07
2.59
134.1
115.8
118.6
144.1
139.9
18
19
20
21
Nondurable consumer goods ..........
19.79
Clothing......................................
Consumer staples.......................
Consumer foods and tobacco
4.29
15.50
8.33
134.9
22
23
24
25
26
Nonfood staples.........................
Consumer chemical products.
Consumer paper products.. .
Consumer energy products. .
Residential utilities............
7.17
2.63
1.92
2.62
1.45
144.6
166.6
113.3
145.4
Business equipment.........................
12.63
6.77
1.44
3.85
1.47
136.1
Industrial equipment.................
Building and mining equip...
Manufacturing equipment. ..
Power equipment...................
32
33
34
35
Commercial transit, farm equip,
Commercial equipment.........
Transit equipment.................
Farm equipment....................
36
8
9
10
11
12
27
28
29
30
31
Durable consumer goods ................
Equipment
154.8
149.9
132.0
167.2
126.9
137.2
130.8
147.7
140.0
122.8
167.0
133.1
111.2
133.6
125.3
136.2
115.2
138.7
132.5
134.7
138.4
136.9
114.4
138.3
131.6
139.1
116.9
138.8
131.9
142.0
118.6
139.8
131.9
140.1
117.9
141.3
130.5
140.9
118.7
141.9
132.5
133.7
143.4
120.5
142.8
134.0
153.8
142.8
133.4
118.9
167.4
147.4
139.1
120.9
168.6
126.4
101.1
104.4
142.0
133.6
130.3
107.8
110.6
144.8
136.6
133.3
111.4
115.1
146.3
139.8
134.1
115.8
118.6
147.0
138.6
133.8
115.3
117.6
143.6
139.9
134.9
111.7
113.8
144.7
143.6
135.0
113.4
116.0
141.3
144.1
137.0
117.4
120.0
144.5
144.4
145.0
131.5
132.5
135.3
135.8
137.1
138.4
138.1
139.0
139.2
143.0
133.3
142.7
127.4
133.9
128.5
123.0
138.7
133.0
141.0
159.7
113.4
142.8
152.0
140.2
157.3
113.3
142.4
154.5
131.6
131.0
123.9
133.6
127.2
126.4
141.7
132.8
163.4
156.6
136.9
180.7
160.5
154.3
132.8
176.3
181.9
182.6
159.8
179.8
137.9
119.0
125.9
138.5
133.2
126.4
140.0
132.5
145.4
169.2
111.9
145.9
154.3
144.8
168.3
109.9
146.9
154.4
149.0
174.4
113.8
149.0
151.8
177.9
117.7
150.9
152.9
177.8
117.0
154.5
154.3
178.6
117.8
156.4
152.8
137.5
135.9
140.2
131.3
181.5
109.9
138.0
143.2
142.0
142.9
145.1
129.9
180.9
107.9
137.8
124.2
141.9
132.4
127.9
177.4
106.4
135.3
124.5
172.9
101.3
137.6
5.86
3.26
1.93
.67
145.5
173.2
103.8
130.6
139.7
164.4
102.9
125.6
139.7
165.0
100.2
131.5
146.1
176.8
99.3
131.4
142.7
177.5
98.3
102.0
150.5
179.7
107.6
132.2
154.4
185.3
109.1
134.8
153.9
185.2
107.0
137.0
154.5
185.7
107.3
138.4
156.4
187.0
110.7
Defense and space equipment........
7.51
77.9
77.7
78.0
77.7
78.5
77.9
77.4
77.4
78.1
79.1
Intermediate products
37 Construction supplies...................
38 Business supplies...........................
39
Commercial energy products...
6.42
6.47
1.14
132.0
141.5
156.5
124.1
135.9
147.9
126.8
140.3
158.1
134.3
143.0
156.4
134.0
142.5
154.0
135.7
141.7
155.4
135.5
144.2
156.7
135.4
147.2
162.0
135.6
148.3
162.1
137.2
Durable goods materials ................
20.35
4.58
5.44
10.34
5.57
126.6
115.5
Durable consumer parts............
Equipment parts........................
Durable materials n.e.c.............
Basic metal materials............
118.3
130.0
128.5
128.5
128.3
126.6
128.5
130.3
45
46
47
48
49
Nondurable goods materials ..........
10.47
7.62
1.85
1.62
4.15
147.5
147.2
Textile, paper, and chem. m at..
Textile materials....................
Paper materials......................
Chemical materials................
152.5
112.6
132.1
178.2
151.3
108.8
131.0
178.3
146.2
144.2
148.5
149.9
50
51
52
53
54
Containers, nondurable............
Nondurable materials n.e.c.......
Energy materials...........................
Primary energy...........................
Converted fuel materials..........
123.5
55
56
57
58
Supplementary groups
Home goods and clothing............
Energy, total..................................
Products.....................................
Materials....................................
40
41
42
43
44
Materials
For Note see opposite page.
123.5
171.4
101.2
134.6
129.8
180.4
108.6
135.6
133.5
187.4
110.7
140.0
131.5
187.9
107.9
137.7
132.8
189.3
109.0
139.7
121.6
133.9
125.0
109.8
111.6
123.9
112.9
96.1
146.4
142.6
151.2
114.4
131.1
175.5
147.9
118.9
125.9
169.5
1.70
1.14
8.48
4.65
3.82
142.6
120.0
120.3
107.0
136.4
136.1
116.7
118.7
107.3
132.3
139.0
118.3
120.6
107.7
136.3
143.5
122.8
119.6
108.4
133.2
141.7
122.4
119.6
109.0
132.7
145.9
122.2
121.7
107.1
139.5
143.8
119.7
123.1
106.6
143.2
137.6
122.5
122.7
104.2
145.2
146.9
120.6
122.2
102.4
146.4
9.35
12.23
3.76
8.48
130.8
129.0
148.8
120.3
125.2
126.6
144.5
118.7
129.9
128.8
147.2
120.6
128.7
128.6
149.1
119.6
130.3
128.6
149.1
119.6
130.4
130.7
150.9
121.7
131.0
132.2
152.7
123.1
130.1
133.1
156.7
122.7
131.0
133.2
158.1
122.2
111.7
125.7
117.4
101.9
142.9
147.5
117.8
126.5
168.9
123.5
138.3
128.4
113.9
147.8
152.6
113.6
131.0
178.2
119.4
138.0
127.5
112.0
126.2
137.2
124.9
106.3
124.7
138.8
124.2
104.7
150.6
113.6
127.6
176.3
120.6
135.1
124.6
104.7
148.9
110.6
127.6
174.4
123.0
138.8
125.3
105.6
153.1
111.5
132.4
177.9
135.3
194.9
110.5
142.3
127.6
139.6
126.7
154.7
132.6
132.9
O u tp u t
A 49
2.13 Continued
Grouping
SIC
code
1967
pro
por
tion
1976
aver
age
1975
1976
1976
Sept.
1977
Jan.
Nov.
Feb.
Mar.
Gross value of products in market structure
(annual rates, in billions of 1972 dollars)
5
426.2
528.4
531.9
^221.4
1156.3
165.3
302.9
123.5
292.0
118.9
292.3
119.1
300.7
121.7
164.9
1 - 2 Products, total. ........
Final products
3
Consumer goods.
4
Equipment..........
124.3
117.9
120.8
126.6
. 1286.3
Intermediate products.
550.6
410.6
410.9
548.8
422.2
549.4
423.6
558.3
432.2
302.2
121.4
307.4
125.0
126.0
126.2
570.6
443.9
315.7
128.2
563.4
435.8
308.9
126.9
569.1
440.0
312.5
127.6
580.0
450.2
319.1
131.1
126.5
127.3
129.0
129.9
136.0
136.5
136.9
Major industry groupings
6 Mining and utilities.
7 Mining................
8 Utilities............... .
9
Electric.............
12.05
Mining
Metal mining...................
C oal...................................
Oil and gas extraction
Stone and earth minerals.
17
18
19
20
21
Nondurable manufactures
Foods...........................
Tobacco products........
Textile mill products. .
Apparel products........
Paper and products. ..
22
23
24
25
26
27
28
29
30
Printing and publishing.. . .
Chemicals and products....
Petroleum products............
Rubber & plastic products.
Leather and products..........
Durable manufactures
Ordnance, pvt. & govt..
Lumber and products..
Furniture and fixtures..
Clay, glass, stone prod.
31
32
33
34
35
Primary metals................
Iron and steel..............
Fabricated metal prod. . .
Nonelectrical machinery.
Electrical machinery........
36
37
38
39
40
Transportation equip..........
Motor vehicles & p ts___
Aerospace & misc. tr. eq .,
Instrument...........................
Miscellaneous m frs.. . . . . . .
114.1
151.7
87.95
10 Manufacturing.
11 Nondurable.
12 D u ra b le ....
13
14
15
16
131.9
6.36
5.69
3.88
129.4
35.97
51.98
112.9
147.2
162.3
123.6
141.0
121.4
136.9
114.4
131.8
131.9
113.6
152.0
167.4
115.7
150.1
167.8
125.2
130.7
138.4
115.8
142.6
122.4
134.1
116.2
154.0
134.8
116.7
151.2
168.8
129.9
133.1
116.2
155.5
114.3
160.2
115.2
160.5
119.5
156.3
131.9
143.5
123.8
132.8
131.1
132.6
135.0
142.2
121.5
123.9
117.0
143.7
125.2
143.1
122.9
145.1
124.0
146.3
127.3
10
11, 12
13
14
.51
.69
4.40
.75
122.8
116.9
112.0
118.3
117.9
109.9
113.1
111.5
122.2
111.2
112.5
117.1
123.6
121.3
113.3
119.2
127.4
132.3
112.5
120.0
128.1
125.1
112.4
121.4
130.4
125.9
112.8
117.9
136.6
95.3
113.5
121.6
136.3
100.8
114.1
120.2
20
21
22
23
26
8.75
.67
2.68
3.31
3.21
132.0
117.2
135.9
126.1
133.1
128.5
116.0
139.0
121.2
129.5
129.2
117.3
137.6
123.8
130.3
135.7
115.4
135.7
122.5
132.1
134.7
118.3
134.2
126.4
132.3
134.7
119.7
132.2
125.9
132.5
134.3
119.1
133.3
128.0
131.8
134.6
115.0
131.8
123.6
130.6
136.0
134.9
135.9
27
28
29
30
31
4.72
7.74
1.79
2.24
.86
120.7
169.4
132.7
199.8
82.0
118.4
163.3
126.3
185.3
83.2
120.0
162.9
125.7
188.4
86.0
120.6
170.5
134.1
212.4
77.9
119.2
170.6
130.2
211.1
77.2
119.3
174.2
135.8
215.7
75.8
123.1
173.5
138.9
212.3
73.4
124.7
172.0
141.3
211.9
74.8
124.5
174.6
145.1
214.7
75.2
125.1
19,91
24
25
32
3.64
1.64
1.37
2.74
71.7
125.1
132.8
135.8
70.1
116.4
130.3
129.4
69.9
123.5
132.7
128.6
73.2
128.7
133.0
138.4
73.3
130.7
134.5
138.4
72.2
129.0
134.0
142.2
71.8
127.5
135.7
142.0
71.4
132.7
134.1
137.2
71.0
132.2
134.8
140.1
72.2
33
6.57
4.21
5.93
9.15
8.05
108.0
104.4
123.3
134.7
131.7
92.6
89.1
117.3
128.6
122.7
98.1
92.9
116.6
129.0
124.7
114.1
110.3
126.6
136.8
133.7
109.9
105.1
123.5
134.1
135.0
107.3
103.1
126.7
137.5
135.8
102.7
95.6
128.2
141.2
135.6
99.2
89.8
125.3
139.6
134.0
100.4
91.7
125.5
139.5
138.6
102.8
95.0
127.9
140.9
140.2
9.27
4.50
4.77
2.11
1.51
110.6
140.7
82.2
148.2
143.5
106.7
130.1
84.7
140.9
137.3
105.8
126.7
86.1
142.0
139.5
104.4
130.2
80.1
148.7
143.8
104.7
129.3
81.4
150.3
142.2
112.7
145.8
81.6
150.3
143.7
118.2
156.4
82.4
155.7
146.8
113.5
145.4
83.4
153.7
146.4
113.7
144.8
84.6
156.8
149.6
124.1
164.5
85.9
156.8
149.8
24
35
36
37
i 1972 dollars.
N ote.—Published groupings include some series and subtotals not shown
separately. For summary description and historical data, see Bulletin for
June 1976, pp. 470-79. Availability of detailed descriptive and historical
data will be announced in a forthcoming Bulletin.
129.2
133.7
145.6
A 50
2 .14
D om estic N onfinancial Statistics □ April 1977
H O U S IN G A N D C O N S T R U C T IO N
Monthly figures at annual rates except as noted
1
Item
1974
1975
1976
1976'
Aug.'
Sept.'
O ct.'
1977
N ov.'
D ec.'
Ja n .'
F eb.'
Private residential real estate activity
(thousands of units; monthly figures, seasonally adjusted; exceptions noted)
NEW UNITS
1 Permits authorized..............................
2
1-family............................................
3 2-or-more-family.............................
1,074
927
1,281
895
386
644
431
669
278
1,338
1,160
1,540
892
268
1,163
377
7 Under construction, end o f period
8 1-family...........................................
9 2-or-more-family.............................
1,189
1,003
10 Completed............................................
11 1-family...........................................
12 2-or-more-family............................
1,692
13 Mobile homes shipped.......................
329
6
14
15
16
17
18
2-or-more-family.............................
Merchant builder activity in
1-family units:
Number sold.......................................
Number for sale end of period..........
Price (thous. of dollars)1
Median:
Units sold....................................
Units for sale...............................
Average:
Units sold....................................
888
450
1,296
874
422
1,530
1,172
358
1,504
1,492
926
578
998
494
1,768
1,715
1,254
514
1,269
446
1,157
1,107
1,140
662
495
1,074
A ll
641
466
662
478
1,297
1,354
1,401
1,094
307
1,387
1,326
1,021
333
213
250
252
255
501
407
544
383
635
656
410
35.9
36.2
39.3
38.9
44.2
41.6
38.9
'42.5
2,272
32.0
35.8
516
673
931
760
531
622
452
1,590
1,072
518
1,514
1,053
461
1,307
'927
'380
1,706
1,889
1,192
1,214
1,399
1,075
439
1,386
1,168
1,514
1,236
470
671
497
1,324
565
687
506
1,010
376
701
514
1,435
1,074
361
1,373
1,068
331
111
251
252
258
714
415
728
420
688
430
785
433
765
436
44.2
40.8
44.7
41.0
45.3
41.0
45.7
41.2
46.1
41.6
45.2
41.9
48.1
48.5
48.2
50.4
50.0
50.9
51.0
53.1
2,452
3,002
3,070
3,250
3,230
3,300
3,470
3,190
3,080
35.3
39.0
38.1
42.2
39.4
43.4
38.7
AU
38.5
42.4
38.8
42.9
39.0
43.3
39.6
44.0
40.7
45.1
866
430
1,017
370
989
337
1,060
313
EXISTING UNITS (1-family)
19 Number sold.......................................
Price of units sold (thous. of
dollars): 1
20 Median................................................
21 Average...............................................
Value of new construction 2
(millions of dollars; monthly figures, seasonally adjusted)
CONSTRUCTION
22 Total put in place...............................
138,526
132,043
144,821
141,887
146,631
148,475
152,819
152,185
137,076
150,511
23 Private .................................................
24 Residential......................................
25 Nonresidential, to tal......................
Buildings:
26
Industrial.................................
27
Commercial.............................
28
Other........................................
29
Public utilities and other............
100,179
93,034
108,424
104,538
109,000
114,503
118,752
118,918
107,153
117,714
30 Public ..................................................
31 Military............................................
32 Highway..........................................
33 Conservation and development. . .
34 Other................................................
46,476
46,558
7,902
15,945
5,797
20,157
8,017
12,804
5,585
20,152
6,910
12,586
6,252
22,728
6,902
12,984
6,689
22,718
6,894
12,786
6,669
23,521
6,407
12,560
6,489
23,642
6,461
12,522
6,677
23,911
6,453
12,859
6,497
23,158
6,088
12,178
5,978
19,505
6,613
12,813
6,190
22,633
38,347
39,009
36,397
37,349
37,631
33,972
34,067
33,267
29,923
32,797
1,188
12,069
2,741
22,349
1,391
10,345
3,227
24,046
59,948
48,476
1,479
9,112
3,659
22,147
1 Not seasonally adjusted.
2 Value of new construction data in recent periods may not be strictly
comparable with data in prior periods due to changes by the Bureau of
the Census in its estimating techniques. For a description of these changes
see Construction Reports (C-30-76-5), issued by the Bureau in July 1976.
55,245
49,293
63,404
43,749
50,378
49,801
1,450
9,596
3,618
22,685
59,130
49,870
1,352
8,856
4,281
23,142
65,405
49,098
1,467
8,738
2,949
20,818
69,181
49,571
1,622
7,843
A,011
20,525
69,951
48,967
1,567
7,508
3,856
20,336
1,509
6,112
3,435
18,867
69,465
48,249
1,597
N ote.—Census Bureau estimates for all series except (a) mobile
homes, which are private, domestic shipments as reported by the Manu
factured Housing Institute and seasonally adjusted by the Census Bureau
and (b) sales and prices of existing units, which are published by the
National Association of Realtors. All back and current figures are avail
able from originating agency. Permit authorizations are for 14,000
jurisdictions reporting to the Census Bureau.
P rices
2.15
A51
C O N S U M E R A N D W H O L E S A L E P R IC E S
Percentage changes based on seasonally adjusted data, except as noted.
12 months to—
1976
Feb.
1977
Feb.
3 months (at annual rate) to—
1 month to—
1976
Mar.
June
1976
Sept.
Dec.
Oct.
1977
Nov.
Dec.
Jan.
Feb.
Index
level
Feb.
1977
(1967
= 100)1
Consumer prices
1 All items........................................................
3
4
5
6
Food..........................................................
Commodities less food...................... .
Durable.................................................
Nondurable...........................................
6.3
6.0
3.9
6.1
5.3
4.2
.3
.3
.4
.8
1.0
177.1
5.1
5 .3
.2
- 5 .4
4.0
7.2
1.8
6 .0
6.2
3 .9
3 .4
.3
.2
.4
.8
170.9
5.6
6.5
5.0
1.2
2 .0
.1
.9
6 .5
4.9
5.4
6.4
4.8
4.3
5.8
7.0
4.7
8 .3
10.6
5.3
3.0
1.9
8
9
R ent..........................................................
Services less rent.......................................
5.2
8.8
7.2
5.7
7.4
10
11
12
Other groupings:
All items less food1.................................
All items less shelter1..............................
Homeownership1......................................
6.8
6.4
6.4
6.5
6.1
5.0
6.1
11.2
1.6
5.5
5.0
6.0
0.0
5.7
6.0
5.4
.2
.4
.3
.4
- .3
.4
.4
.4
.1
.6
.7
.4
.9
.7
.9
.5
5.4
6.7
7.5
5.4
7.7
5.1
5.3
5.4
.4
.4
.5
.4
.4
.5
.6
.3
.7
188.7
.4
.9
r .8
.9
7.0
6.9
4.3
7.4
5.6
8.0
5.3
4.3
1.2
.5
.4
.2
.5
.4
0.0
.3
.3
.1
.4
.5
.9
.6
1.1
.7
174.0
173.1
196.7
.6
.6
.5
.9
190.0
.4
.4
1.5
187.7
161.6
159.7
175.0
150.2
195.6
Wholesale prices
1.6
6.4
3.3
—9 .5
12 J
- 1 2 .2
1.0
-.1
- .5
- .6
- .5
.5
.1
2.1
2.6
1.8
.5
1.1
- .2
2.0
2.2
1.8
188.4
16.5 -1 2 .1
10.3 - 1 2 .2
6 .7
5.1
4.5
8 .2
.8
.9
.7
.3
.5
.6
189.9
4.9
5.1
18.1
6.3
5.2
5.8
16.8
3.5
10.8
8.1
- .5
.9
3.7
.8
3.5
.5
- 2 .2
.5
- 1 .2
.5
4.0
.6
273.7
196.6
.4
.2
.7
.4
.3
.1
.3
.7
1.0
.7
1.1
.4
.3
.5
.2
.5
168.1
149.2
180.7
180.2
2.0
180.5
4.7
4.7
1.4
9.4
- 3 .4
3 .5
4.2
3.1
- 1 2 .2
- 7 .7
5 .7
13 All commodities............................................
14 Farm products, and processed foods and
.7
.3
.5
-.6
15
16
Farm products.........................................
Processed foods and feeds.......................
18
19
Materials, supplies, and components of
which:
Crude materials2..................................
Intermediate materials 3.......................
Finished goods, excluding foods:
21
22
23
Durable.............................................
Nondurable.......................................
P ro d u c e r............................................
6.4
4.8
7.2
7.3
5.5
4.4
6.2
6.1
3.1
4.0
2.4
7.1
3.0
2.8
3.1
4.5
8.2
5.1
9.9
5.0
.9
.6
.9
.6
.5
.5
.6
1.1
M emo :
24 Consumer foods..........................................
2.7
2.7
-1 3 .7
13.2
—13.8
0.0
- .5
1 Not seasonally adjusted.
2 Excludes crude foodstuffs and feedstuffs, plant and animal fibers,
oilseeds, and leaf tobacco.
- .3
2.8
- .1
199.0
181.9
3 Excludes intermediate materials for food manufacturing and manufactured animal feeds.
Source.—Bureau of Labor Statistics.
A 52
2 .1 6
D om estic N onfinancial Statistics □ A pril 1977
G R O S S N A T IO N A L P R O D U C T A N D IN C O M E
Billions of current dollars except as noted; quarterly data are at seasonally adjusted annual rates.
1975
Account
1974
1975
1976
1976
Q3
Q4
Ql
Q2
Q3
Q4
Gross national product
1,413.2
1
By source:
1,516.3
'1,691.6
973.2
1,0 7 9 .7
1,548.7
1,588.2
1,636.2
1,675.2
1,708.9
'1,745.1
987.3
1,012.0
1 ,043.6
1,06 4 .7
1,088.5
1,1 2 2 .0
Personal consumption expenditures...................
887.5
Durable goods.. . ........................................
Nondurable goods........................................
Services..........................................................
121.6
376.2
389.6
131.7
409.1
432.4
6
7
8
9
10
11
12
Gross private domestic investment....................
215.0
204.3
183.7
239.6
197.7
239.2
205.7
229.6
214.7
223.2
247.0
242.8
149.2
198.6
201.4
Fixed investment...........................................
Nonresiden tial ............................................
Structures...............................................
Producers’ durable equipment..............
Residential structures...............................
N onfarm ................................................
147.1
160.0
146.1
148.7
153.4
157.9
163.0
56.0
107.0
68.9
66.3
165.6
54.9
103.0
65.3
62.9
13
14
Change in business inventories....................
Nonfarm....................................................
10.7
12.2
-1 4 .6
-1 7 .6
11.9
11.9
- 2 .0
- 4 .2
- 4 .3
- 9 .5
14.8
12.7
16.0
17.3
15.1
15.6
1.7
2.2
15
16
17
Net exports o f goods and services.....................
Exports..........................................................
Imports..........................................................
144.4
136.9
148.1
127.6
162.7
'156.0
148.2
126.8
153.7
132.7
18
19
20
Govt, purchases o f goods and services ..............
303.3
339.0
365.6
343.2
353.8
130.4
223.4
129.2
225.5
1,531.0 '1,679.7
1,550.6
1,592.5
2
3
4
5
Federal...........................................................
State and local..............................................
54.1
95.1
55.1
52.7
7.5
111.6
191.6
21
22
23
24
25
26
By major type of product:
Final sales, total................................................
Goods..............................................................
Durable goods...........................................
Nondurable................................................
Services..........................................................
Structures......................................................
27
28
29
Change in business inventories........................
Durable goods...............................................
Nondurable goods........................................
10.7
7.1
3.6
M emo :
30 Total GNP in 1972 dollars.................................
1,214.0
1,402.5
639.7
247.2
392.4
626.6
146.9
198.3
52.0
95.1
51.2
49.0
20.5
124.4
214.5
681.7
156.5
440.4
482.8
227.7
55.3
104.7
67.7
65.1
r6 .6
133.4
232.2
760.2
136.0
414.6
436.7
51.8
94.2
52.6
50.2
21.4
124.6
218.6
703.5
141.8
421.6
448.6
151.4
429.1
463.2
52.1
96.6
57.0
54.2
53.2
100.2
61.3
58.6
8 .4
21.0
155.0
434.8
474.9
9 .3
157.6
441.8
489.1
231.9
4 .7
162.0
456.0
504.0
241.0
57.0
108.6
75.5
72.7
r4 .2
154.1
145.7
160.3
151.0
167.7
163.0
'168.5
'164.3
354.7
362.0
369.6
376.2
1,621.4
1,659.2
1,694.7
719.7
742.3
131.2
230.9
758.4
134.5
235.0
766.1
138.9
237.4
'1,743.4
774.3
254.4
427.3
692.5
142.1
300.5
459.8
'772.0
159.3
265.0
438.4
700.2
145.0
270.0
449.7
719.5
149.1
282.7
459.6
742.6
151.3
301.2
457.1
759.6
157.3
308.2
457.9
781.5
162.2
309.8
464.5
'804.4
166.5
-1 4 .6
-1 2 .1
- 2 .6
11.9
2.7
9.2
- 2 .0
- 7 .0
5.0
- 4 .3
-1 0 .6
6.3
14.8
-3 .6
18.5
16.0
5.4
10.6
15.1
6.8
8.3
1.7
2.0
- .3
1,191.7 '1,264.7
1,209.3
1,219.2
1,246.3
1,260.0
1,272.2
'1,280.4
National income
1,135.7
1,207.6
'1,348.5
1,233.4
1,264.6
1,304.7
1,337.4
1,362.5
1,389.5
32 Compensation of employees................................
33
Wages and salaries............................................
34
Government and Government enterprises..
35
Other............................................................
36 Supplement to wages and salaries.....................
37
Employer contributions for social
insurance................................................
Other labor income.......................................
38
875.8
928.8
1,028.4
935.2
963.1
994.4
1,017.2
1,037.5
1,064.5
806.7
890.4
811.7
836.4
31
764.5
160.4
604.1
861.5
634.4
185.4
676.1
881.1
897.8
182.2
654.1
123.5
126.7
139.6
60.2
63.3
61.6
65.2
95.5
97.2
921.0
188.7
692.4
197.0
'723.9
132.9
136.2
191.7
706.1
65.9
67.1
67.1
69.0
68.6
71.1
70.2
73.3
93.2
100.3
175.8
630.8
111.3
122.1
190.7
699.7
55.8
55.5
59.7
62.5
67.9
70.1
39 Proprietors' income1..............................................
40 Business and professional1...............................
Farm 1................................................................
41
8 6.9
90.2
96 .7
42 Rental income of persons2...................................
21.0
22.4
23.5
22.1
22.9
23.3
23.1
23.4
24.3
43 Corporate profits1................................................
44 Profits before tax3............................................
45 Inventory valuation adjustment.......................
46 Capital consumption adjustment.....................
84.8
127.6
-3 9 .8
- 3 .0
91.6
114.5
-1 1 .4
-1 1 .5
'117.9
'148.0
-1 4 .6
-1 5 .5
105.3
126.9
- 9 .0
-1 2 .6
105.6
131.3
-1 2 .3
-1 3 .5
115.1
141.1
-1 1 .5
-1 4 .5
116.4
146.2
-1 4 .4
-1 5 .4
122.0
150.2
- 1 2 .6
-1 5 .7
118.1
154.5
- 2 0 .0
-1 6 .4
47 Net interest............................................................
67.1
74.6
82.0
74.9
75.8
78.6
80.3
83.5
85.6
61.1
25.8
65.3
24.9
1 With inventory valuation and capital consumption adjustments.
2 With capital consumption adjustments.
138.0
73.8
22.8
111.3
66.3
29.2
69.0
28.3
71.4
21.9
72.8
27.5
143.5
96.1
97.1
74.4
21.7
76.8
20.3
3 For after-tax profits, dividends, etc., see Table 1.50.
Source.—Survey of Current Business (U.S. Dept, of Commerce).
A 53
N a tio n a l I n c o m e A c c o u n ts
2.17 PERSONAL INCOME AND SAVING
Billions of current dollars except as noted; quarterly data are at seasonally adjusted annual rates.
Account
1974
1975
1975
1976
Q3
1976
Q4
Ql
Q2
Q3
Q4
1,421.7
Personal income and saving
1 Total personal income...........................................
1,153.3
1,249 7
1,375.3
1,265.5
1,299.7
1,331.3
1,362.0
1,386.0
2 Wage and salary disbursements .............................
3 Commodity-producing industries....................
4
Manufacturing..............................................
5 Distributive industries......................................
6 Service industries..............................................
7 Government and government enterprises.......
765.0
273.9
211.4
184.4
145.9
160.9
806.7
275.3
211.7
195.6
159.9
175.8
890.4
811.7
836.4
961.5
881.1
897.8
304.8
237.0
214.9
180.0
190.7
272.2
212.5
196.8
161.3
177.3
285.8
220.3
202.3
166.1
182.2
295.3
229.6
208.3
172.4
185.4
302.9
235.6
212.8
176.7
188.7
307.0
238.9
216.5
182.7
191.7
921.0
314.0
r243.9
221.9
188.1
197.0
8 Other labor income..............................................
55.5
62.5
70.1
63.3
65.2
67.1
69.0
71.1
73.3
9 Proprietors’ income 1..............................................
10 Business and professional1...............................
11 Farm 1................................................................
86.9
90.2
73.8
22.8
95.5
97.2
93.2
100.3
96.1
97.1
61.1
25.8
65.3
24.9
96 .7
12 Rental income of persons2...................................
21.0
22.4
23.5
13 Dividends..............................................................
30.8
32.1
35.1
14 Personal interest income.......................................
101.4
110.7
15 Transfer payments................................................
16 Old-age survivors, disability, and health
insurance benefits......................................
140.3
70.1
17
66.3
29.2
69.0
28.3
71.4
21.9
22.4
22.9
23.3
32.6
32.2
33.1
123.0
111.0
114.4
175.2
191.3
179.1
81.4
93.0
84.7
72.8
27.5
74.4
21.7
76.8
20.3
23.1
23.4
24.3
34.4
35.4
37.7
118.0
120.7
125.0
128.4
182.5
188.6
187.6
192.4
196.6
86.3
88.1
89.5
95.8
98.5
Less: Personal contributions for social
insurance....................................................
47.6
50.0
54.9
50.1
51.0
53.4
54.3
55.2
56.6
18 Equals: Personal income...................................
1,153.3
1,249.7
1,375.3
1,265.5
1,299.7
1,331.3
1,362.0
1,386.0
1,421.7
19
L ess : Personal tax and nontax payments. . . .
170.4
168.8
193.6
174.0
197.8
183.8
189.5
195.8
205.3
20 Equals : Disposable personal income................
982.9
1,080.9
1,181.7
1,091.5
1,119.9
1,147.6
1,172.5
1,190.2
1,216.5
21
Less: Personal outlays.....................................
910.7
996.9
1,105.2
1,011.1
1,036.2
1,068.0
1,089.6
1,114.3
1,148.6
22 E quals: Personal saving.....................................
72.2
84.0
r76.5
80.5
83.7
79.5
82.9
75.8
67.8
M emo:
Per capita (1972 dollars):
23 Gross national product..................................... 3,968.0
24 Personal consumption expenditures................
887.5
25 Disposable personal income.............................
840.8
26 Saving rate (per cent)...........................................
7.3
4,007.0
973.2
855.5
7.8
4,140.0
1,079.7
890.5
6.5
4,009.0
987.3
857.1
7.4
4,049.0
1,012.0
867.5
7.5
4,103.0
1,043.6
880.4
6.9
4,143.0
1,064.7
890.5
7.1
4,142.0
1,088.5
892.0
6.4
4,168.0
1,122.0
899.6
5.6
Gross saving
27 Gross private saving..............................................
211.6
255.6
r274.7
262.7
269.4
273.8
279.1
278.9
266.8
28
29
30
Personal saving..................................................
Undistributed corporate profits1.....................
_
Corporate inventory valuation adjustment_
72.2
1.7
-3 9 .8
84.0
10.3
- 1 1 .4
76.5
r 18.4
—14.6
80.5
17.9
- 9 .0
83.7
16.2
-1 2 .3
79.5
20.6
-1 1 .5
82.9
18.5
-1 4 .4
75.8
21.5
- 1 2 .6
67.8
12.8
- 2 0 .0
31
32
33
Capital consumption allowances:
Corporate......................................................
Noncorporate................................................
Waee accruals less disbursements...................
84.6
53.1
100.9
60.4
112.8
67.0
103.1
61.3
106.4
63.2
108.8
64.8
111.6
66.1
113.9
67.7
116.9
69.3
- 5 8 .1
-6 1 .5
34 Government surplus, or deficit ( — national
),
income and product accounts .........................
35 Federal..............................................................
36 State and local..................................................
37 Capital grants received by the United States,
n e t..................................................................
—4 .2
-1 1 .5
7.3
- 6 4 .4
-7 1 .2
6.9
- 6 6 .0
7.9
*237.7
209.8
-5 1 .6
—44.9
-6 9 .4
7.9
-6 3 .8
12.2
-5 4 .1
9.2
214.0
229.4
240.0
-4 4 .7
- 3 7 .3
-5 7 .4
12.7
-5 9 .2
21.9
242.9
r238.4
- 2 .0
38 Investment..............................................................
39 Gross private domestic....................................
40 Net foreign........................................................
211.9
41 Statistical discrepancy..........................................
6.8
215.0
- 3 .0
195.6
183.7
11.9
239.6
r —2.0
4.4
n .i
1 With inventory valuation and capital consumption adjustments.
2 With capital consumption adjustment.
* - 4 4 .6
r—
58.6
14.0
196.7
13.1
201.4
12.6
5.1
6.1
229.6
- .2
7.2
239.2
.8
247.0
- 4 .1
5.8
8.7
242.8
r —4.3
Source.—Survey o f Current Business (U.S. Dept, of Commerce).
8.9
A 54
3.10
International Statistics □ A pril 1977
U .S . I N T E R N A T IO N A L T R A N S A C T I O N S S u m m a ry
Millions of dollars; quarterly data are seasonally adjusted except as noted.1
1975
Item credits or debits
1974
1975
1976
1976
Q4
Ql
Q2
Q3
Q4
98,310
103,679
-5 ,3 6 9
107,088
98,058
9,030
114,692
123,916
-9 ,2 2 4
27,657
25,437
2,220
26,997
28,324
-1 ,3 2 7
28,378
29,914
-1 ,5 3 6
29,600
32,387
-2,787
29,717
33,291
-3 ,5 7 4
-2,083
10,227
812
1 Merchandise exports...............................................................
2 Merchandise im ports..............................................................
3 Merchandise trade balance2...............................................
-883
6,007
2,163
391
10,538
2,696
12
1,670
455
-1 5
2,286
475
-155
2,468
781
339
2,784
860
223
3,000
578
3,586
16,316
4,401
4,357
1,419
1,558
1,196
227
Remittances, pensions, and other transfers.......................
U.S. Govt, grants (excluding military)..............................
-1 ,7 1 0
-5,475
-1,7 2 7
-2 ,8 9 3
-1 ,8 6 6
-3 ,1 3 9
-433
-818
-483
-635
-4 5 2
-468
-446
-1 ,4 7 9
-487
-557
10 Balance on current account......................................................
11 Not seasonally adjusted ........................................................
-3 ,5 9 8
11,697
-6 0 4
3,106
301
638
4,305
1,449
742
-729
-8 1 7
- 3 ,6 7 7
883
-1 ,1 5 3
7 Balance on goods and services3..............................................
8
9
12 Change in U.S. Govt, assets, other than official reserve
assets, net (increase, — ..................................................
)
365
-3 ,4 6 3
-4,295
-9 5 2
-6 8 4
-1 ,0 0 9
-1 ,4 5 0
13 Change in U.S. official reserve assets ( increase, — ..............
)
-1 ,4 3 4
-6 0 7
- 2 ,5 3 0
89
—773
- 1 ,5 7 8
-4 0 7
14
15
G old.....................................................................................
SDR’s ...................................................................................
228
Foreign currencies...............................................................
-6 6
-4 6 6
-7 5
-7 8
-2 ,2 1 2
-240
-2 1
-5 7
167
-4 5
-237
-491
14
17
—172
-1,265
3
-798
-794
-1 8
-716
327
-2 9
-461
718
18 Change in U.S. private assets abroad (increase, — ............... -32,323
)
-27,523
-36,195
-10,375
-8 ,5 5 0
-7 ,2 8 8
-6 ,8 2 4
-13,534
19
20
Bank-reported claims............................................................ -1 9 ,4 9 4
-2 0 ,7 4 2
-5 ,3 4 8
- 3 ,5 8 2
-4 ,7 6 7
-3 ,3 5 5
Long-term.........................................................................
-1,183
-18,311
-1 3 ,4 8 7
22
Nonbank-reported claims.....................................................
-3 ,2 2 1
-1 ,5 2 2
25
26
U.S. purchase of foreign securities, net.............................
U.S. direct investments abroad, net...................................
27 Change in foreign official assets in the United States (in
crease, + ) .........................................................................
28 U.S. Treasury securities......................................................
29 Other U.S. Govt, obligations.............................................
31
32
Other U.S. liabilities reported by U.S. banks...................
Other foreign official assets5..............................................
33 Change in foreign private assets in the United States (in
34
36
37
38
39
40
41
42
U.S. bank-reported liabilities ...............................................
Short-term........................................................................
U.S. nonbank-reported liabilities .........................................
Long-term.......................................................................
Short-term........................................................................
Foreign private purchases of U.S. Treasury securities, n et.
Foreign purchases of other U.S. securities, n e t................
Foreign direct investments in the United States, net........
43 Allocations of SDR’s ..............................................................
44 Discrepancy ..............................................................................
45
Owing to seasonal adjustments..........................................
46 Statistical discrepancy in recorded data before seasonal
adjustment....................................................................
M emo:
Changes in official assets:
47
U.S. official reserve assets (increase,—
).............................
48
Foreign official assets in the U.S. (increase,+ ) .................
49 Changes in OPEC official assets in the U.S. (part of line 27
above)...............................................................................
50 Transfers under military grant programs (excluded from
lines 1, 4, and 9 above)...................................................
-2 ,0 9 8
-18,644
-1 ,7 7 2
-943
-4,4 0 5
-9 7 2
-2 5 0
-3 ,3 3 2
-7 5 1
-474
-2,7 4 7
-1 ,8 5 4
-7,7 5 3
-441
-1,081
-6 ,2 0 6
-6 ,3 0 7
-1 4
-1 ,7 5 8
-8 ,6 8 2
-5 ,0 0 0
-379
-593
-2,361
-1 ,6 9 4
—187
-5 6 4
-2 ,4 6 0
-1 ,7 5 7
10,981
6,899
18,107
2,771
3,942
721
-7 8 0
146
-1 ,1 0 8
-1 ,3 5 7
-202
53
668
-2 ,7 4 3
-1 ,4 4 7
4,105
2,999
15,022
3,103
1,454
3,225
5,248
5,095
647
10,974
172
10,802
691
146
545
675
3,518
1,766
5,015
171
-5 8 8
-6 8
24
-2 4 8
-3 2 4
-2 5
3,543
1,261
66
1,746
-598
524
7,061
8,427
-9 1
766
2,166
316
797
135
691
-2 6
-7 5 4
-2 ,1 2 3
-1 ,5 9 3
16,017
-3 0 0
947
1,998
68
1,482
-275
669
-4 7 0
-8 ,5 6 8
21,452
1,615
1,069
307
499
134
762
-9 6 2
-9 ,0 3 8
-993
-2 ,3 6 2
4,338
891
1,732
-2 ,1 5 8
2,095
9
16,008
9,301
566
5,013
1,012
2,215
-385
-4 ,3 8 2
3,282
902
724
5,818
254
67
1,699
-212
1,827
697
378
2,745
345
-174
2,667
2,505
2,437
-1,017
429
2,825
1,250
561
10
-7 8
213
1,038
1,229
-332
356
453
1,030
-728
4,557
4,570
10,495
2,258
4,310
1,907
958
73
-2 ,8 0 0
1,275
-188
-6 0
-598
131
422
3,876
116
988
1,750
331
221
4,794
-4 0
-285
-3 9
3,026
68
712
-2 1 2
172
-5 6
21
155
1,163
3,120
1,773
4,557
4,570
10,495
983
3,352
1,834
3,963
1,347
-1 ,4 3 4
10,257
-607
5,166
-2 ,5 3 0
13,094
89
2,272
-773
2,460
-1,578
3,308
-407
1,253
228
6,073
10,841
7,108
9,517
1,996
3,491
3,339
1,687
1,000
1,817
2,232
400
177
50
99
156
95
1 Seasonal factors are no longer calculated for capital transactions—
lines 13 through 50.
2 Data are on an international accounts (IA) basis. Differs from the
Census basis primarily because the IA basis includes imports into the
U.S. Virgin Islands, and it excludes military exports, which are part of
Line 4.
3 Differs from the definition of “net exports of goods and services” in
the national income and product (GNP) account. The GNP definition
-2 ,3 7 3
-11,114
excludes certain military sales to Israel from exports and excludes U.S.
Government interest payments from imports.
4 Primarily associated with military sales contracts and other transac
tions arranged with or through foreign official agencies.
5 Consists of investments in U.S. corporate stocks and in debt securi
ties of private corporations and state and local governments.
Note.—
Data are from Bureau of Economic Analysis, Survey of Cur
rent Business (U.S. Department of Commerce).
A 55
T ra d e a n d R e s e rv e A s s e ts
3.11
U.S. FOREIGN TRADE
Millions of dollars; monthly data are seasonally adjusted.
1977
1976
Item
1974
1975
1976
1 EXPORTS of domestic and foreign
merchandise excluding grant-aid
shipments................. *.....................
97,908
107,130
2 GENERAL IMPORTS including
merchandise for immediate con
sumption plus entries into bonded
warehouses......................................
100,252
Aug.
Sept.
Oct.
Nov.
Dec.
Jan.
Feb.
114,807
9,737
9,788
9,699
9,589
10,410
9,599
9,808
96,115
120,677
10,477
10,651
10,555
10,623
11,020
11,269
11,674
-2 ,3 4 4 +11,014
-5 ,8 7 0
-7 4 0
-863
—857
-1 ,0 3 4
-6 1 0
—1,670
-1,866
Note.—Bureau of Census data reported on a free-alongside-ship
(f.a.s.) value basis. Before 1974 imports were reported on a customs
import value basis. For calendar year 1974 the f.a.s. import value was
$100.3 billion, about 0.7 per cent less than the corresponding customs
import value. The international-accounts-basis data shown in Table 3.10
adjust the Census basis data for reasons of coverage and timing. On the
export side , the largest adjustments are: (a) the addition of exports to
Canada not covered in Census statistics, and (b) the exclusion of military
3.12
exports (which are combined with other military transactions and are
reported separately in the “service account”). On the import side, the
largest single adjustment is the addition of imports into the Virgin Islands
(largely oil for a refinery on St. Croix), which are not included in Census
statistics.
Source.—U.S. Dept, of Commerce, Bureau of the Census, Summary
of U.S. Export and Import Merchandise Trade (FT 900).
U .S . R E S E R V E A S S E T S
Millions of dollars, end of period
1976
Type
1973
1974
1975
1977
Sept.
Oct.
Nov.
Dec.
Jan.
Feb.
Mar.
4 19,120
1 Total.................................................... 314,378
15,883
16,226
18,945
19,013
19,416
18,747
19,087
19,122
2 Gold stock, including Exchange
Stabilization Fund1„...................... 3 11,652
11,652
11,599
11,598
11,598
11,598
11,598
11,658
11,658
11,658
3 Special Drawing Rights2...................
32,166
2,374
2,335
2,357
2,352
2,365
2,395
2,375
2,383
4 2,389
4 Reserve position in International
Monetary Fund...............................
3 552
1,852
2,212
3,952
3,997
4,307
4,434
4,682
4,819
4 4,812
5 Convertible foreign currencies..........
8
5
80
1,038
1,066
1,146
320
372
262
261
1 Gold held under earmark at F.R. Banks for foreign and international
accounts is not included in the gold stock of the United States; see Table
3.24.
2 Includes allocations by the International Monetary Fund of SDR’s
as follows: $867 million on Jan. 1, 1970; $717 million on Jan. 1, 1971;
and $710 million on Jan. 1, 1972; plus net transactions in SDR’s.
3 Change in par value of U.S. dollar on Oct. 18, 1973 increased total
reserve assets by $1,436 million, gold stock by $1,165 million, SDR’s
by $217 million, and reserve position in IM F by $54 million.
4 Beginning July 1974, the IMF adopted a technique for valuing the
SDR based on a weighted average of exchange rates for the currencies
of 16 member countries. The U.S. SDR holdings and reserve position in
the IMF also are valued on this basis beginning July 1974. At valuation
used prior to July 1974 (SDR1 ** $1.20635) total U.S. reserve assets
at end of March amounted to $19,304; SDR holdings, $2,487; and
reserve position in IMF, $4,898.
A 56
3.13
International Statistics □ A pril 1977
S E L E C T E D U .S . L IA B IL IT IE S T O F O R E IG N E R S
Millions of dollars, end of period
1974
Holder, and type of liability
1976
1975
1973
Dec. 9
1977
Sept.
Oct.
Nov.
Dec.
Jan.
Feb.
1 Total....................................................
92,490
119,240
119,164
126,552
140,834
143,728
144,643
151,329
147,775
149,253
2 Foreign countries.................................
90,487
115,918
115,842
120,929
133,072
136,093
136,411
142,846
139,831
157,276
3 Official institutions 1............................
4 Short-term, reported by banks in
the United States.2.................
U.S. Treasury bonds and notes:
5
Marketable3................................
6
Nonmarketable4 .........................
7 Other readily marketable
liabilities5.............................
66,861
76,801
76,823
80,695
86,085
86,827
87,745
91,850
92,996
93,835
43,923
53,057
53,079
49,513
49,654
49,017
49,273
53,478
54,465
54,784
5,701
15,564
5,059
16,339
5,059
16,339
6,671
19,976
10,800
19,803
11,027
20,876
11,367
21,131
11,788
20,648
2,017
20,622
12,725
20,496
1,673
2,346
2,346
4,535
5,828
5,907
5,974
5,936
5,892
5,830
17,694
30,314
30,106
29,516
34,641
36,940
35,384
37,429
33,359
33,283
5,932
8,803
8,913
10,718
12,346
12,326
13,282
13,567
13,476
14,112
5,502
8,305
8,415
10,017
11,475
11,399
12,312
12,591
12,479
13,092
430
498
498
701
871
927
970
976
997
1,020
2,003
3,322
3,322
5,623
7,762
7,635
8,232
8,483
7,944
8,023
1,955
3,171
3,171
5,292
5,966
5,102
5,506
5,450
4,650
3,956
48
151
151
331
1,796
2,533
2,726
3,033
3,294
4,067
Commercial banks abroad:
8 Short-term reported by banks in
the United States2,6...............
9 Other foreigners ..................................
10 Short-term, reported by banks in
the United States2..................
11 Marketable U.S. Treasury bonds
12 Nonmonetary international and re
gional organization8....................
13
Short-term, reported by banks
in the United States2..........
14
Marketable
U.S.
Treasury
bonds and notes3................
1 Includes Bank for International Settlements.
2 Includes Treasury bills as shown in Table 3.15.
3 Derived by applying reported transactions to benchmark data.
4 Excludes notes issued to foreign official nonreserve agencies.
5 Includes long-term liabilities reported by banks in the United States
and debt securities of U.S. Federally sponsored agencies and U.S. cor
porations.
6 Includes short-term liabilities payable in foreign currencies to com
mercial banks abroad and to other foreigners.
7 Includes marketable U.S. Treasury bonds and notes held by com
mercial banks abroad and other foreigners.
8 Principally the International Bank for Reconstruction and Develop
ment and the Inter-American and Asian Development Banks.
3.14
9 Data in the two columns shown for this date differ because of changes
in reporting coverage. Figures in the first column are comparable in cover
age with those for the preceding date; figures in the second column are
comparable with those shown for the following date.
N ote.—Based on Treasury Dept, data and on data reported to the
Treasury Dept, by banks (including Federal Reserve banks) and brokers
in the United States. Data exclude the holdings of dollars of the Inter
national Monetary Fund derived from payments of the U.S. subscription,
and from the exchange transactions and other operations of the IMF.
Data also exclude U.S. Treasury letters of credit and nonnegotiable, noninterest-bearing special U.S. notes held by nonmonetary international
and regional organizations.
S E L E C T E D U .S . L IA B IL IT IE S T O F O R E IG N O F F IC IA L IN S T IT U T IO N S
Millions of dollars, end of period
Area
1973
1974
1976
1976
Dec.3
Sept.
Oct.
1977
Nov.
Dec.
Jan.
Feb.
1 Total....................................................
66,861
76,801
76,823
80,695
86,085
86,827
87,745
91,850
92,996
93,835
3
4
5
Canada............................................
Latin American republics..............
Asia..................................................
7
Other countries 2............................
45,764
3,853
2,544
10,887
788
3,025
44,328
3,662
4,419
18,604
3,161
2,627
44,328
3,662
4,419
18,626
3,161
2,627
45,685
3,132
4,450
22,550
2,984
1,894
41,565
3,417
4,287
32,434
2,759
1,623
41,933
3,389
4,086
33,438
2,415
1,566
44,075
2,406
4,087
33,906
1,925
1,346
45,855
3,406
4,853
34,112
1,843
1,781
45,927
3,197
4,541
35,561
1,707
2,603
46,114
2,844
4,546
36,458
1,721
2,152
1 Includes Bank for International Settlements.
2 Includes countries in Oceania and Eastern Europe, and Western
European dependencies in Latin America.
3 See Note 9 to Table 3.13.
N ote.—Data represent breakdown by area of line 3, Table 3.13.
B a n k-rep o rted D a ta
3.15
S H O R T - T E R M L IA B IL IT I E S T O F O R E I G N E R S
A 57
R e p o rte d b y B a n k s in th e U n ite d S tates
B y H o ld e r a n d b y T y p e o f L ia b ility
Millions of dollars, end of period
Holder, and type of liability
1974
1973
1976
1975
Dec. 8
Sept.
1977
Nov.
Oct.
Dec.
Jan.p
Feb.p
1 All foreigners, excluding the International
Monetary Fund............................................... 69,074
94,847
94,771
94,338 101,736 102,458 102,474 108,949 104,953 105,115
2
68,477
94,081
94,004
93,780 101,034 101,692 101,693 108,225 104,227 104,316
Payable in dollars ...............................................
3
4
5
6
Deposits:
Dem and......................................................
Time1..........................................................
U.S. Treasury bills and certificates2.............
Other short-term liabilities 3..........................
11,310
6,882
31,886
18,399
14,068
10,106
35,662
34,246
14,051
9,932
35,662
34,359
13,564
10,348
37,414
32,466
14,793
10,644
40,119
35,478
14,658
10,546
38,934
37,552
15,811
10,757
38,643
36,484
16,803
11,546
40,744
39,133
15,314
11,430
41,275
36,207
16,098
11,236
42,760
34,222
7
558
702
766
781
724
726
799
Payable in foreign currencies.............................
597
766
766
8 Nonmonetary international and regional
organizations4.................................................
1,955
3,171
3,171
5,293
5,966
5,102
5,506
5,450
4,650
3,957
9
1,955
3,171
3,171
5,284
5,692
5,098
5,502
5,445
4,646
3,951
101
83
296
1,474
139
111
497
2,424
139
111
497
2,424
139
148
2,554
2,443
331
151
4,031
1,449
256
164
3,196
1,482
287
199
3,604
1,412
290
208
2,701
2,247
166
230
2,890
1,360
209
239
2,824
678
8
4
4
4
5
4
6
15 Official institutions, banks, and other foreigners.. 67,119
91,676
91,600
89,046
95,770
97,356
96,969 103,499 100,303 101,159
16
66,522
90,910
90,834
88,497
95,073
96,594
96,193 102,780
99,581
100,365
11,209
6,799
31,590
16,925
13,928
9,995
35,165
31,822
13,912
9,821
35,165
31,935
13,426
10,200
34,860
30,023
14,462
10,493
36,086
34,029
14,402
10,383
35,736
36,070
15,524
10,558
35,039
35,072
15,148
11,201
38,386
34,847
15,888
10,997
39,935
33,544
Payable in dollars ...............................................
10
11
12
13
Deposits:
Demand......................................................
Time1..........................................................
U.S. Treasury bills and certificates..............
Other short-term liabilities5..........................
14
Payable in foreign currencies.............................
Payable in dollars ...............................................
17
18
19
20
Deposits:
Demand......................................................
Time1..........................................................
U.S. Treasury bills and certificates2............
Other short-term liabilities 3..........................
21
16,513
11,338
38,042
36,886
Payable in foreign currencies.............................
597
766
766
549
697
762
776
719
722
794
22 Official institutions6...............................................
43,923
53,057
53,079
49,513
49,654
49,017
49,273
53,478
54,465
54,784
23
43,795
52,930
52,952
49,513
49,654
49,017
49,273
53,478
54,465
54,784
2,125
3,911
31,511
6,248
2,951
4,257
34,656
11,066
2,951
4,167
34,656
11,178
2,644
3,423
34,182
9,264
2,544
2,144
35,651
9,314
2,706
2,127
35,241
8,943
2,685
2,149
34,656
9,783
3,394
2,335
37,675
10,075
2,931
2,456
38.031
11,047
2,411
2,376
39,555
10,443
24
25
26
27
28
Payable in dollars .............. ...............................
Deposits:
Dem and......................................................
Time1..........................................................
U.S. Treasury bills and certificates2.............
Other short-term liabilities 5..........................
Pnvnhle in fnrpicm rurrenripc
127
127
127
29 Banks and other foreigners....................................
23,196
38,619
38,520
39,533
46,115
48,339
47,696
50,021
45,838
46,374
30
31
22,727
37,980
37,881
38,984
45,418
47,577
46,920
49,302
45,116
45,580
32
33
34
35
Payable in dollars ...............................................
Banks7 ............................................................
Deposits:
Dem and..................................................
Time1......................................................
U.S. Treasury bills and certificates...........
Other short-term liabilities3......................
17,224
29,676
29,467
28,966
33,944
6,941
529
11
8,248
1,942
232
19,254
8,231
1,910
232
19,094
7,534
1,942
335
19,155
8,233
2,578
176
22,956
8,361
2,291
223
25,303
8,897
1,949
174
23,589
9,104
2,479
169
24,957
8.474
2;071
172
21,920
9,387
1,773
152
21,177
9,743
36,178
34,608
36,710
32,637
32,489
5,502
8,304
8,414
10,017
11,475
11,399
12,312
12,592
12,479
13,091
37
38
39
40
Other foreigners.............................................
Deposits:
Demand..................................................
Time1......................................................
U.S. Treasury bills and certificates...........
Other short-term liabilities 5......................
2,143
2,359
68
933
2,729
3,796
277
1,502
2,730
3,744
277
1,664
3,248
4,823
342
1,605
3,686
5,771
259
1,759
3,335
5,965
274
1,824
3,943
6,461
209
1,700
4,015
6,524
198
1,854
3,743
6,673
183
1,880
4,091
6,848
229
1,924
41
Payable in foreign currencies.............................
469
639
639
549
697
762
776
719
722
794
36
1 Excludes negotiable time certificates of deposit, which are included
in “ Other short-term liabilities.”
2 Includes nonmarketable certificates of indebtedness and Treasury
bills issued to official institutions of foreign countries.
3 Includes liabilities of U.S. banks to their foreign branches, liabilities
of U.S. agencies and branches of foreign banks to their head offices and
foreign branches of their head offices, bankers acceptances, commercial
paper, and negotiable time certificates of deposit.
4 Principally the International Bank for Reconstruction and Develop
ment, and the Inter-American and Asian Development Banks.
5 Principally bankers acceptances, commercial paper, and negotiable
time certificates of deposit.
6 Foreign central banks and foreign central governments and their
agencies, and Bank for International Settlements.
7 Excludes central banks, which are included in “ Official institutions.”
8 Data in the two columns shown for this date differ because of changes
in reporting coverage. Figures in the first column are comparable with
those for the preceding date; figures in the second column are comparable
with those shown for the following date.
N ote.—“Short-term obligations” are those payable on demand, or
having an original maturity of 1 year or less.
A 58
3 .16
International Statistics □ A pril 1977
S H O R T - T E R M L IA B IL IT IE S T O F O R E IG N E R S
R e p o rte d b y B a n k s in th e U n ite d S ta te s
B y C o u n try
Millions o f dollars, end o f period
Area and country
1973
1974
1976
1975
Dec. 7
Sept.
Oct.
1977
Nov.
Dec.
Jan.p
Feb.p
1
69,074
94,847
94,771
2 Foreign countries.........................................................
67,119
91,676
91,600
89,046
95,770
97,356
96,969 103,499 100,303 101,159
40,742
48,667
48,813
43,988
40,177
39,967
42,480
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
Austria..................................................................
Belgium-Luxembourg........................................
Denmark..............................................................
Finland.................................................................
France..................................................................
Germany...............................................................
Greece...................................................................
Italy.......................................................................
Netherlands.........................................................
N orway................................................................
Portugal................................................................
Spain.....................................................................
Sweden.................................................................
Switzerland..........................................................
Turkey..................................................................
United Kingdom................................................
Yugoslavia...........................................................
Other Western Europe1....................................
U.S.S.R.................................................................
Other Eastern Europe.......................................
161
1,483
659
165
3,483
13,227
389
1,404
2,886
965
534
305
1,885
3.377
98
6,148
86
3,352
22
110
607
2,506
369
266
4,287
9,420
248
2,617
3,234
1,040
310
382
1,138
9,986
152
7,559
183
4,073
82
206
607
2,506
369
266
4,287
9,429
248
2.577
3,234
1,040
310
382
1,138
10,139
152
7,584
183
4,073
82
206
94,338 101,736 102,458 102,475 108,949 104,953 105,115
754
2,898
332
391
7,733
4,357
284
1,072
3,411
996
195
426
2,286
8,514
118
6,886
126
2,970
40
200
335
1,946
317
415
4,363
5,964
336
1,574
2,566
789
193
540
1,979
9,016
65
7,296
128
2,103
70
182
334
1,879
372
407
4,409
6,532
405
1,583
2,534
690
177
506
1,295
8,331
74
7,953
131
2,089
80
184
332
2,085
416
378
4,642
5,418
378
2,884
2,694
740
206
478
1,420
8,846
88
8,401
147
2,639
84
203
46,925
348
2,268
363
419
4,875
5,965
403
3,206
3,007
785
239
565
1,693
9,453
166
10,001
188
2,672
51
255
43,614
373
2,376
419
389
4,701
5,304
421
2,858
2,832
566
172
492
1,613
9,571
85
8.844
113
2,263
47
172
43,581
401
2,411
419
367
4,596
5,487
346
2,703
2,786
823
228
546
1,593
9,661
82
8,711
121
2,092
45
162
24
Canada ................................................................
3,627
3,517
3,520
3,076
4,796
4,033
3,944
4,784
4,519
4,900
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
Latin America ....................................................
Argentina.............................................................
Bahamas...............................................................
Brazil....................................................................
C hile......................................................................
Colombia.............................................................
Cuba......................................................................
M exico..................................................................
Panama.................................................................
Peru.......................................................................
Uruguay...............................................................
Venezuela.............................................................
Other Latin American republics.....................
Netherlands Antilles2........................................
Other Latin America.........................................
7,664
12,038
11,754
14,942
886
1,054
1,034
276
305
7
1,770
510
272
165
3,413
1,316
158
589
1,147
1,827
1,227
317
417
6
2,066
1,099
244
172
3,289
1,494
129
1,507
19,065
17,684
19,010
17,836
18,665
886
1,448
1,034
276
305
7
1,770
488
272
147
3,413
1.316
158
519
17,490
40
41
42
43
44
45
46
47
48
49
50
51
52
Asia .....................................................................
China, People’s Republic o f (Mainland)___
China, Republic o f (Taiwan)..........................
10,839
21,073
21,130
28,406
29,745
28,982
i ,202
50
818
530
261
1,221
389
10,931
384
747
333
4,623
844
21,539
50
818
530
261
1,221
386
10,897
384
747
333
4,633
813
48
1,182
887
1,048
1,154
310
14,663
366
582
223
7,741
1,539
59
1,092
859
910
314
325
14,736
324
606
244
8,124
1,388
53
54
55
56
57
58
59
A frica ..................................................................
Egypt....................................................................
M orocco...............................................................
South Africa........................................................
Zaire.....................................................................
Oil-exporting countries5 ...................................
Other4 ...................................................................
1,056
3,551
3,551
3,373
3,076
2,782
60
61
62
Other countries...................................................
Australia..............................................................
All other...............................................................
3,190
Hong K ong....................................................
India......................................................................
Indonesia.............................................................
Israel......................................................................
Japan....................................................................
Korea....................................................................
Philippines...........................................................
Thailand...............................................................
Middle East oil-exporting countries3............
Other4...................................................................
924
852
860
158
247
7
1,296
282
135
120
1,468
884
71
359
38
757
372
85
133
327
6,967
195
515
247
35
11
114
87
808
3,131
59
63 Nonmonetary international and regional
103
38
130
84
2,814
383
103
38
130
84
2,814
383
123
1,025
623
126
369
386
10,218
390
698
252
6,461
867
343
68
169
63
2,239
491
1,437
2,628
1,132
325
767
6
2,348
912
236
244
3,208
1,750
147
2,348
45
1,122
874
985
995
300
14,424
350
622
215
7,198
1,276
186
80
165
37
2,075
532
1,374
4,817
1,323
298
804
6
2,475
866
247
233
2,644
1,676
160
2,142
213
85
183
45
1,732
524
2,742
89
2,128
2,742
89
2,014
114
1,824
1,711
114
1,763
1,645
119
2,831
2,831
1,293
2,654
1,168
315
922
6
2,860
1,188
243
238
3,009
1,740
157
1,890
1,538
2,789
1,432
335
1,017
6
2,848
1,140
257
245
3,060
2,064
140
2,139
1,648
1,979
1,292
325
1,090
6
2,710
909
244
250
2,986
2,033
151
2,212
28,461
29, 789
47
985
892
648
340
385
14,380
437
627
275
8,073
1,373
47
1,058
941
510
695
430
14,481
448
602
301
9,029
1,245
2,281
2,300
2,207
2,406
1,598
1,486
112
2,019
171
72
132
64
1,321
521
333
88
143
35
1,116
585
1,911
108
209
97
211
48
1,033
609
1,820
2,553
1,272
302
1,152
6
2,782
1,002
228
239
2,921
2,235
157
1,995
29,258
47
1,158
1,039
559
546
547
13,358
483
554
313
9,276
1,378
244
105
155
41
1,125
735
2,339
2,348
2,224
116
2,231
118
organizations............................................................
64
65
66
1,955
3,171
3,171
5,293
5,966
5,102
5,506
5,450
4,650
3,957
International............................................................
Latin American regional......................................
Other regional6.......................................................
1,627
272
57
2,900
202
69
2,900
202
69
5,064
187
42
5,613
154
199
4,717
182
203
5,109
160
237
5,091
136
223
4,300
160
189
3,599
177
181
For notes see bottom of p. A59.
B a n k-rep o rted D a ta
A 59
3.17 SHORT-TERM LIABILITIES TO FOREIGNERS Reported by Banks in the United States
Supplemental “Other” Countries 1
Millions of dollars, end of period
Area and country
1974
Dec.
Other Western Europe:
Other Eastern Europe:
38
43
39
69
40
13
11
18
11
42
14
19
32
17
13
66
44
13
10
3
10
65
28
93
120
214
157
144
255
34
92
62
125
38
110
124
169
120
171
260
38
99
41
133
43
131
25
26
27
28
29
30
31
32
33
34
35
36
37
133
141
275
319
178
397
47
137
35
119
49
31
104
69
149
150
128
177
33
69
49
89
43
12
44
116
449
19
77
19
38
39
40
41
42
43
44
45
46
47
48
167
170
197
177
100
627 1,311 2,284 1,874
49
1 Represents a partial breakdown of the amounts shown in the “Other”
categories on Table 3.16.
3.18
L O N G - T E R M L IA B IL IT I E S T O F O R E I G N E R S
Millions of dollars, end of period
Holder, and area or country
1974
1973
1975
1976
Dec.
34
21
107
Bolivia...................................
Costa Rica.............................
Dominican Republic............
Ecuador.................................
El Salvador............................
Guatemala.............................
H aiti.......................................
Honduras...............................
Jamaica..................................
Nicaragua..............................
Paraguay...............................
Surinam2...............................
Trinidad and Tobago...........
Bermuda..................
British West Indies..
Dec.
96
118
128
122
129
219
35
88
69
127
46
Other Latin American republics:
Other Latin America:
Apr.
36
34
36
14
55
25
Bulgaria...................................
Czechoslovakia.......................
German Democratic Republic
Hungary...................................
Poland.....................................
Rumania.................................
23
24
Dec.
6
33
75
Apr.
7
21
29
Cyprus........................
Iceland.......................
Ireland, Republic o f..
1974
Area and country
Ethiopia (incl. Eritrea)
Ghana..........................
Ivory Coast.................
Kenya...........................
Liberia.........................
Southern Rhodesia.. . .
Sudan...........................
Tanzania......................
Tunisia.........................
Uganda........................
Zambia.........................
All Other:
New Zealand...............
Dec.
19
50
49
4
30
5
180
92
22
118
215
13
70
41
54
31
4
39
2
117
77
28
74
256
13
62
54
41
34
3
20
2
132
105
34
89
34
9
33
57
76
13
11
32
33
3
14
21
23
38
18
60
23
62
19
53
1
12
30
29
22
78
70
45
76
37
63
1
17
18
33
50
14
41
27
10
46
77
1
22
47
Other Africa:
Apr.
95
18
7
31
39
2
4
11
19
13
22
Afghanistan............... .
Bangladesh..................
Burma..........................
Cambodia....................
Jordan..........................
Laos.............................
Lebanon.......................
Malaysia......................
Nepal...........................
Pakistan.......................
Singapore.....................
Sri Lanka (Ceylon)....
Vietnam.......................
Dec.
18
21
65
4
22
3
126
63
25
91
245
14
126
Other Asia:
Apr.
36
42
29
45
13
4
37
1
140
396
33
189
280
23
66
20
43
2 Surinam included with Netherlands Antilles until January 1976.
R e p o rte d b y B a n k s in th e U n ite d S ta te s
1977
1976
1975
Aug.
1 Total.......................................................................
2 Nonmonetary international and regional
3 Foreign countries....................................................
4 Official institutions, including central banks. ..
5 Banks, excluding central banks........................
6 Other foreigners.................................................
Area or country:
7 Europe................................................................
1,462
1,285
1,812
Sept.
Oct.
Nov.
Dec.
Jan.*
Feb.*
2,242
2,206
2,315
2,310
2,393
2,353
2,245
761
822
415
246
214
333
308
261
264
259
700
310
291
100
464
124
261
79
1,397
931
364
100
1,996
1,402
445
149
1,991
1,386
446
159
1,983
1,314
499
170
2,003
1,313
524
165
2,132
1,352
585
194
2,090
1,262
604
224
1,987
1,180
577
230
470
159
66
226
146
59
330
214
66
457
311
88
458
312
87
489
310
99
507
309
125
525
313
132
555
313
144
529
245
131
19
115
23
140
26
122
26
125
26
151
26
152
29
230
31
244
29
255
894
8
*
1
*
1,369
19
*
1
1,340
41
*
1
1,286
27
*
1
1,239
77
*
1
1,251
96
*
1
1,186
68
*
2
1,104
67
*
1
1
1
1
1
1
4
1
10
11
Canada................................................................
Latin America................................................
8
132
12
13
Middle East oil-exporting countries1...............
Other Asia2....................................................
82
14
15
African oil-exporting countries3.......................
Other Africa4......................................................
1
94
7
*
1
16
All other countries............................................
7
*
4 Includes African oil-exporting countries until December 1974.
1 Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia,
and United Arab Emirates (Trucial States).
2 Includes Middle East oil-exporting countries until December 1974.
3 Comprises Algeria, Gabon, Libya, and Nigeria.
N ote.—Long-term obligations are those having an original maturity
of more than 1 year.
NOTES TO TABLE 3.16:
1 Includes Bank for International Settlements.
2 Surinam included with Netherlands Antilles until January 1976.
3 Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia,
and United Arab Emirates (Trucial States).
4 Includes oil-exporting countries until December 1974.
5 Comprises Algeria, Gabon, Libya, and Nigeria.
6 Asian, African, and European regional organizations, except BIS,
which is included in “ Other Western Europe.”
7 Data in the two columns shown for this date differ because of changes
in reporting coverage. Figures in the first column are comparable with
those shown for the preceding date; figures in the second column are
comparable with those shown for the following date.
A 60
3.19
International Statistics □ A pril 1977
S H O R T - T E R M C L A IM S O N F O R E IG N E R S
R e p o rte d by B a n k s in th e U n ite d S ta te s
B y C o u n try
Millions of dollars, end of period
Area and country
1973
1974
1977
1976
1975
Aug.
Sept.
Oct.
Nov.
Dec.
Jan.p
Feb.*
1
20,723
39,056
50,231
58,014
60,317
60,986
63,890
69,011
63,650
63,289
2 Foreign countries....................................................
20,723
39,055
50,229
58,002
60,305
60,981
63,884
69,005
63,643
63,284
3,970
6,255
8,987
9,479
9,436
10,435
42
10,797
12,072
44
10,415
10,642
42
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
Europe.................................................................
Austria............................................................
Belgium-Luxembourg....................................
Denmark........................................................
Finland............................................................
France.............................................................
Germany.........................................................
Greece.............................................................
Italy................. ...............................................
Netherlands....................................................
Norway...........................................................
Portugal..........................................................
Spain...............................................................
Sweden ............................................................
Switzerland.....................................................
Turkey............................................................
United Kingdom............................................
Yugoslavia......................................................
Other Western Europe..................................
U.S.S.R...........................................................
Other Eastern Europe....................................
11
147
48
108
621
311
35
316
133
72
23
222
153
176
10
1,459
10
25
46
44
21
384
46
122
673
589
64
345
348
119
20
196
180
335
15
2,580
22
22
46
131
15
352
49
128
1,471
436
49
370
300
71
16
249
167
237
86
4,718
38
27
103
108
24
465
50
176
929
412
68
617
268
78
57
239
143
442
77
5,167
40
50
53
125
47
437
57
129
1,169
498
117
648
256
68
55
265
106
417
80
4,844
28
56
52
107
504
64
137
1,096
585
88
733
399
79
46
264
101
499
125
5,376
37
54
83
123
54
501
129
136
1,098
577
76
877
240
85
53
304
93
511
140
5,591
38
58
103
134
662
85
141
1,448
562
79
929
304
98
65
429
177
472
183
6,068
45
52
99
130
41
554
72
137
1,246
511
81
875
246
124
80
362
112
539
199
4,864
60
53
82
177
609
64
133
1,371
666
85
805
510
127
90
385
85
530
207
4,538
64
60
95
175
24
Canada ................................................................
1,955
2,776
2,817
3,050
3,169
3,129
3,136
3,100
2,944
3,510
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
Latin America ....................................................
5,900
499
12,377
27,607
30,042
29,275
31,580
34,034
31,476
937
31,418
883
900
151
397
12
1,373
274
178
55
518
493
13
154
720
3,405
1,418
290
713
14
1,972
505
518
63
704
852
62
1,142
20,532
13,899
3,456
370
593
13
3,356
770
737
41
1,296
1,127
45
4,838
867
14,079
3,149
379
598
13
3,332
862
748
39
1,261
1,120
41
4,932
8,224
16,226
4
17,765
3
987
16,672
4
15,466
361
41
76
554
10,992
1,722
559
422
1,312
735
1,028
229
28
54
352
10,581
1,710
592
421
981
690
40
41
42
43
44
45
46
47
48
49
50
51
52
Argentina........................................................
Bahamas.........................................................
Brazil...............................................................
Chile...............................................................
Colombia........................................................
Cuba...............................................................
Mexico............................................................
Panama...........................................................
Peru.................................................................
Uruguay..........................................................
Venezuela........................................................
Other Latin American republics...................
Netherlands Antilles1....................................
Other Latin America.....................................
1,203
7,570
2,221
360
689
13
2,802
1,052
583
51
1,086
967
49
1,885
1,149
11,519
2,772
352
501
13
3,559
778
666
31
1,503
978
29
3,759
961
14,192
2,891
343
459
13
3,457
809
694
28
1,305
1,112
42
3,737
16,057
22
15,832
4
939
15,695
4
251
36
108
257
10,116
1,551
459
437
836
838
981
252
33
119
313
10,220
1,594
472
434
721
553
5
991
208
64
117
320
10,534
1,555
478
415
765
647
1,382
1,394
1,486
1,519
132
13
763
29
257
292
151
19
798
16
238
298
661
612
549
618
China, People’s Republic of (Mainland). . .
China, Republic of (Taiwan)........................
Hong K ong....................................................
India...............................................................
Indonesia........................................................
Israel...............................................................
Japan...............................................................
K orea..............................................................
Philippines......................................................
Thailand..........................................................
Middle East oil-exporting countries2...........
Other3.............................................................
31
140
147
16
88
155
6,398
403
181
273
392
500
223
14
157
255
12,518
955
372
458
330
441
53
54
55
56
57
58
59
A frica ..................................................................
388
855
1,228
1,395
1,332
158
111
18
329
98
115
185
60
61
62
Other countries...................................................
286
565
609
638
631
63 Nonmonetary international and regional
organizations......................................................
1
Egypt...............................................................
Morocco.........................................................
South Africa...................................................
Zaire...............................................................
Oil-exporting countries4. ..............................
Other3.............................................................
Australia.........................................................
All other.........................................................
35
5
129
61
243
43
466
99
*
1 Includes Surinam until January 1976.
2 Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia,
and United Arab Emirates (Trucial States).
736
258
21
102
491
10,776
1,561
384
499
524
684
101
9
545
34
231
308
535
73
1
115
15
695
24
268
278
553
85
12
114
17
691
23
176
312
521
110
12
902
12,587
3,125
350
517
13
3,211
1,119
638
28
1,338
1,037
41
4,369
16,099
106
8
772
14
215
267
858
14,594
3,259
358
523
14
3,285
781
629
35
1,512
1,068
43
4,620
16,365
3
1,099
267
48
120
330
10,428
1,577
495
414
1,082
503
109
14
748
25
213
284
558
103
502
110
5
6
962
15,340
3,383
396
575
13
3,414
1,021
690
38
1,553
1,140
40
5,469
30
1,089
265
23
55
337
9,474
1,576
479
446
1,036
658
1,518
126
13
838
U
249
282
729
450
99
512
105
605
125
5
7
5
3 Includes oil-exporting countries until December 1974.
4 Comprises Algeria, Gabon, Libya, and Nigeria,
B a n k-rep o rted D a ta
3.20
S H O R T - T E R M C L A IM S O N F O R E I G N E R S
A61
R e p o rte d b y B a n k s in th e U n ite d S ta te s
B y T y p e o f C la im
Millions of dollars, end of period
Type
1973
1974
1976
1975
Aug.
Sept.
Oct.
1977
Nov.
Dec.
Jan.*
Feb.*
1 Total.......................................................................
20,723
39,056
50,231
58,014
60,317
60,986
63,890
69,011
63,650
63,289
2 Payable in dollars ..................................................
20,061
37,859
48,902
59,556
58,661
59,330
62,085
67,365
61,907
61,258
7,660
11,291
13,205
15,270
14,914
16,221
16,191
18,347
16,094
16,350
3
4
5
6
Loans, to ta l ........................................................
Official institutions, including central banks.
Banks, excluding central banks.....................
All other, including nonmonetary interna
tional and regional organizations.............
2,838
3,579
4,926
5,202
5,130
5,151
5,282
5,815
5,503
5,576
7
8
9
Collections oustanding......................................
Acceptances made for accounts of foreigners...
Other claims1.....................................................
4,307
4,160
3,935
5,637
11,237
9,689
5,467
11,147
19,082
5,495
11,144
24,562
5,746
11,213
26,789
5,586
11,461
26,015
5,628
11,422
28,843
5,846
12,367
30,805
5,834
12,018
27,962
5,866
11,963
27,078
10 Payable in foreign currencies.................................
662
1,196
1,329
1,542
1,656
1,704
1,805
1,645
1,743
2,031
Deposits with foreigners....................................
Foreign government securities, commercial
and finance paper..........................................
Other claims.......................................................
428
669
656
903
1,029
1,052
1,084
1,063
1,137
1,089
119
115
289
238
301
372
143
496
120
507
102
550
85
635
84
498
145
460
272
671
11
12
13
284
4,538
381
7,332
613
7,665
1,009
9,060
781
9,003
1,055
10,015
1,269
9,639
1,452
11,081
1,250
9,341
935
9,839
1 Includes claims of U.S. banks on their foreign branches and claims made to, and acceptances made for, foreigners; drafts drawn against
of U.S. agencies and branches of foreign banks on their head offices and
foreigners, where collection is being made by banks and bankers for
their own account or for account of their customers in the United States;
foreign branches of their head offices.
and foreign currency balances held abroad by banks and bankers and
N ote.—Short-term claims are principally the following items payable
their customers in the United States. Excludes foreign currencies held
by U.S. monetary authorities.
on demand or with a contractual maturity of not more than 1 year: loans
3.21
L O N G -T E R M C L A IM S O N F O R E IG N E R S
Millions of dollars, end of period
Type, and area or country
1973
R e p o rte d b y B a n k s in th e U n ite d S ta te s
1974
1976
1975
1977
Aug.
1
5,996
Sept.
Oct.
Nov.
Dec.
Jan.*
Feb.*
7,179
9,540
10,955
11,205
11,345
11,612
11,687
11,711
11,870
By type:
2 Payable in dollars...................................................
5,924
7,099
9,423
10,822
11,063
11,206
11,465
11,539
11,561
11,693
3
4
5
6
Loans, total ........................................................
5,446
6,490
8,316
9,551
9,670
9,837
1,324
929
1,350
1,567
9,357
9,933
1,420
2,212
9,950
1,404
2,202
10,128
3,698
4,237
7
Other long-term claims.................................
478
609
8 Payable in foreign currencies.................................
72
By area or country:
9 Europe................................................................
10 Canada................................................................
11 Latin America....................................................
Official institutions, including central banks
Banks, excluding central banks.....................
All other, including nonmonetary interna
tional and regional organizations.............
12
13
14
15
Asia .....................................................................
16
17
18
A frica ..................................................................
19
All other countries5...........................................
Japan...............................................................
Middle East oil-exporting countries1...........
Other Asia2 ....................................................
Oil-exporting countries 3................................
Other4.............................................................
1,338
1,979
1,312
2,039
1,323
2,115
1,364
2,164
5,399
6,040
6,201
6,232
6,308
6,298
6,344
6,376
1,107
1,465
1,512
1,536
1,628
1,606
1,611
1,564
80
116
133
142
139
147
148
150
177
1,271
490
2,116
1,908
501
2,614
2,708
555
3,468
3,093
592
4,382
3,133
623
4,519
3,191
570
4,565
3,285
590
4,694
3,246
586
4,806
3,325
520
4,878
3,377
538
4,948
1,582
1,619
1,795
1,835
1,856
1,901
1,885
1,886
1,839
1,846
771
800
839
888
269
1,156
591
251
1,331
355
355
181
258
384
977
366
62
747
355
187
1,667
305
151
596
226
545
171
267
282
1 Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia,
and United Arab Emirates (Trucial States).
2 Includes Middle East oil-exporting countries until December 1974.
296
220
1,279
370
171
1,315
381
171
1,349
236
564
259
580
274
281
368
141
1,376
391
146
1,349
883
387
117
1,335
1,532
2,220
367
123
1,357
852
876
619
264
619
201
651
201
675
270
280
296
284
3 Comprises Algeria, Gabon, Libya, and Nigeria.
4 Includes oil-exporting countries until December 1974.
5 Includes nonmonetary international and regional organizations.
A 62
3.22
International Statistics □ A pril 1977
F O R E I G N B R A N C H E S O F U .S . B A N K S
Millions of dollars; end of period
Asset account
1973
1974
B a la n ce S h eet D a ta
1976
1975
July
Aug.
Sept.
1977
Oct.
Nov.
Dec.
Jan.*
All foreign countries
121,866
151,905
176,493
196,865
196,174
199,843
206,383
207,372
219,811
213,030
5,091
6,743
8,709
6,628
9 ,939
7,557
6,834
3,105
4,280
3,276
4,390
3,519
6,514
3,665
3,078
3,248
3,381
7,909
Parent bank.................................
Other............................................
5,575
3,134
6,980
1,886
3,205
6,900
5
6
7
8
9
Claims on foreigners .......................
111,974
138,712
163,391
181,323
182,499
186,192
189,317
192,609
204,861
198,908
19,177
56,368
2,693
33,736
27,559
60,283
4,077
46,793
10
Other assets.....................................
1 Total, all currencies............................
?,
3
4
Other branches of parent bank
Other banks.................................
Official institutions.....................
Nonbank foreigners...................
4,464
2,435
34,508
69,206
5,792
53,886
41,738
71,762
8,444
59,379
3,934
3,046
41,000
71,802
8,766
60,932
41,174
74,796
9,208
61,015
41,812
76,152
9,205
62,148
42,729
77,179
9,540
63,162
46,582
83,546
10,598
64,135
2,935
3,579
47,135
77,094
10,825
63,855
12
13
14
Claims on United States .................
Parent bank.................................
Other............................................
4,802
6,294
6,359
6,834
6,695
7,022
7,128
7,206
7,041
7,608
79,445
105,969
132,901
149,124
147,245
150,434
156,031
156,364
168,222
163,791
6,603
6,408
8,440
6 ,666
6,269
9,595
7,615
6,235
4,599
1,848
2,751
4,428
2,175
3,628
2,780
5,530
2,910
15
16
17
18
19
73,018
12,799
39,527
1,777
18,915
96,209
123,496
137,293
Other branches of parent bank..
Other banks.................................
Official institutions.....................
Nonbank foreigners...................
28,478
55,319
4,864
34,835
33,843
56,597
7,148
39,705
20
Other assets.....................................
1,828
3,157
2,997
3,392
19,688
45,067
3,289
28,164
2 , 111
3,184
3,085
137,374
140,919
3,895
7,214
6,790
2,805
4,218
2,996
4,330
3,285
143,083
145,837
157,405
34,382
60,246
8,289
42,920
38,537
66,227
9,007
43,634
2,896
3,338
153,646
33,009
56,422
7,606
40,337
33,358
58,877
7,906
A0,119
34,051
59,316
7,885
41,831
3,206
3,246
3,353
3,314
3,202
3,910
39,412
60,618
9,457
44,159
United Kingdom
61,732
69,804
74,883
73,494
73,229
73,589
76,854
77,249
81,466
76,482
22
23
24
Claims on United S tates .................
1,789
2,392
1,862
1,758
2,036
3,256
3,4 2 6
3,354
2,262
738
1,051
3,248
2, A ll
lie
2,376
978
1,357
905
25
26
27
28
29
Claims o f foreigners ........................
57,761
64,111
69,217
75,859
71,995
30
Other assets....................................
2,183
2,445
2,159
2,273
2,173
2,335
2,436
2,345
2,253
2,225
31 Total payable in U.S. dollars.............
40,323
49,211
57,361
54,871
54,522
54,547
57,161
57,699
61,587
57,758
1,642
3,146
2,273
1,780
1,445
828
997
783
1,658
54,121
52,250
21 Total, all currencies............................
Parent bank.................................
Other............................................
Other branches of parent bank..
Other banks.................................
Official institutions.....................
Nonbank foreigners...................
32
33
34
Claims on United States .................
35
36
37
38
39
Claims on foreigners .......................
40
Other assets....................................
Parent bank.................................
Other............................................
Other branches of parent bank..
Other banks.................................
Official institutions.....................
Nonbank foreigners...................
8,773
34,442
735
13,811
730
912
37,817
12,724
32,701
788
17,898
2,468
678
44,694
1,449
943
1,002
860
938
821
70,331
69,359
69,298
17,557
35,904
881
15,990
6,509
23,389
510
7,409
10,265
23,716
610
10,102
15,645
28,224
648
9,604
865
1,372
967
18,843
33,589
909
16,018
16,204
25,370
659
10,018
841
18,044
34,135
1,007
16,112
1,081
955
17,745
34,405
1,138
15,929
2,413
843
2,538
888
71,162
71,477
18,358
35,336
1,211
16,257
17,949
35,846
1,168
16,514
19,753
38,089
1,274
16,743
19,483
34,827
1,377
16,309
1,902
3,313
2,185
2,406
719
2,523
789
3,275
1,064
838
3,124
934
724
52,006
51,782
53,112
53,541
15,405
27,008
817
10,311
57,488
54,735
15,829
26,421
912
9,950
858
863
925
845
824
838
15,401
25,826
799
9,980
15,195
25,866
862
9,859
2,374
902
17,249
28,983
846
10,410
1,352
833
17,183
26,184
1,110
10,258
Bahamas and Caymans
41 Total, all currencies............................
42
43
44
Claims on United States .................
45
46
47
48
49
Claims on foreigners ........................
50
Other assets....................................
Parent bank.................................
Other............................................
Other branches of parent bank..
Other banks.................................
Official institutions.....................
Nonbank foreigners...................
51
23,771
31,733
45,203
59,913
57,677
60,753
63,508
61,758
67,398
67,393
2,210
2,464
3,229
5,835
3,554
3,330
5,464
2,892
3,420
3,148
1,641
1,913
1,257
2,072
3,490
1,973
766
2,126
1,095
2,325
767
2,381
52,898
52,933
56,255
56,806
57,634
62,498
6,791
20,217
5,929
19,995
7,250
22,447
6,059
20,498
7,296
22,136
6,040
21,334
7,389
22,438
6,485
21,322
62,760
7,149
20,669
5,699
19,381
317
1,893
21,041
1,928
9,895
1,151
8,068
1,081
1,383
28,453
3,478
11,354
2,022
11,599
1,477
1,752
41,040
5,411
16,298
3,576
15,756
3,864
1,971
8,853
25,324
7,101
21,483
9,521
23,748
7,004
22,225
520
815
933
1,180
1,190
1,169
1,239
1,232
1,217
1,747
21,937
28,726
41,887
56,076
53,520
56,600
59,219
57,672
63,329
63,180
O verseas Branches
A 63
3.22 Continued
Liability account
1973
1974
1976
1975
July
Aug.
Sept.
1977
Oct.
Nov.
Dec.
Jan.p
All foreign countries
121,866
151,905
176,493
196,865
196,174
199,843
206,383
207,372
219,811
213,030
53
54
55
To United States .........................
5,610
11,982
28,616
29,978
29,457
30,757
5,809
6,173
12,165
8,057
15,947
12,669
27,118
1,642
3,968
20,221
31,559
30,343
56
57
58
59
60
To foreigners ...............................
111,615
132,990
149,815
161,637
181,421
175,816
61
Other liabilities........................... .
4,641
6,933
6,456
6,612
6,346
6,547
6,844
6,753
6,831
6,871
62 Total payable in U.S. dollars...........
80,374
107,890
135,907
153,221
151,788
155,149
160,440
160,824
173,594
168,330
5,027
11,437
19,503
27,848
26,348
15,691
12,157
16,254
10,094
29,088
28,683
29,866
11,939
7,564
30,771
29,402
52 Total, all currencies.........................
Parent bank.............................
Other........................................
Other branches of parent bank
Other banks.............................
Official institutions.................
Nonbank foreigners................
18,213
65,389
10,330
17,683
26,941
65,675
20,185
20,189
34,111
72,259
22,773
20,672
41,064
74,211
22,279
24,084
16,495
10,623
162,711
40,071
74,367
23,428
24,844
63
64
65
To United States ......................... .
66
67
68
69
70
To foreigners ............................... .
Other branches of parent bank,
Other banks..............................
Official institutions................. .
Nonbank foreigners.................
12,554
43,641
7,491
9,502
19,330
43,656
17,444
12,072
92,503
112,879
121,997
122,187
71
Other liabilities.............................
2,158
3,951
3,526
3,377
3,252
Parent bank..............................
Other........................................ .
1,477
3,550
73,189
5,641
5,795
28,217
51,583
19,982
13,097
33,852
53,573
19,625
14,947
32,690
53,298
20,620
15,579
18,957
11,020
163,318
40,119
75,054
23,731
24,414
18,624
10,464
17,869
11,588
170,083
41,044
78,912
25,019
25,107
17,633
11,049
19,058
11,699
169,862
41,650
77,810
23,967
26,436
18,821
11,046
18,192
13,367
46,458
83,410
25,828
25,725
17,979
12,793
18,673
11,670
45,444
79,439
25,480
25,453
18,419
10,982
122,677
128,358
127,535
139,208
135,171
3,383
3,400
3,422
3,614
3,758
32,921
53,505
20,787
15,465
33,850
56,302
21,910
16,296
33,951
55,464
20,924
17,196
39,189
60,270
22,877
16,872
38,836
56,867
22,747
16,720
United Kingdom
72 Total, all currencies........................
61,732
69,804
74,883
73,494
73,229
73,589
76,854
77,249
81,466
76,482
2,431
3,978
5,646
5,628
5,266
5,379
5,310
5,520
1,468
3,842
1,459
4,061
5,997
5,101
66,026
69,151
69,368
73
74
75
To United S tates .........................
Parent bank.............................
O th e r......................................
136
2,295
76
77
78
79
80
To foreigners ...............................
57,311
81
Other liabilities........................... .
1,990
2,418
1,997
2,272
2,080
2,184
2,394
2,360
2,241
2,179
82 Total payable in U.S. dollars...........
39,689
49,666
57,820
55,978
55,701
55,625
58,031
58,757
63,174
59,009
2,173
3,744
5,415
5,443
5,093
5,183
5,152
5,330
1,447
3,883
1,182
4,666
5,849
4,876
Other branches of parent bank,
Other banks.............................
Official institutions..................
Nonbank foreigners.................
3,944
34,979
8,140
10,248
510
3,468
63,409
4,762
32,040
15,258
11,349
2,122
3,523
67,240
6,494
32,964
16,553
11,229
1,727
3,901
65,594
6,927
31,487
15,462
11,718
1,520
3,746
65,883
6,668
30,834
16,147
12,234
1,442
3,938
6,788
31,015
16,389
11,834
6,826
32,488
17,567
12,270
6,783
33,690
16,181
12,713
1,198
4,798
73,228
7,092
36,259
17,273
12,605
1,211
3,889
69,202
7,663
32,627
16,684
12,228
83
84
85
To United States ...........................
86
87
88
89
90
To foreigners .................................
36,646
44,594
51,447
5,442
23,330
14,498
8,176
49,691
49,746
5,604
20,910
14,296
8,936
49,579
5,790
20,526
14,418
8,846
52,017
52,503
56,372
5,878
21,765
13,604
8,444
53,230
91
Other liabilities.............................
870
1,328
959
844
862
862
862
924
953
903
Parent bank...............................
Other..........................................
Other branches of parent bank.
Other banks...............................
Official institutions...................
Nonbank foreigners.................
113
2,060
2,519
22,051
5,923
6,152
484
3,261
3,256
20,526
13,225
7,587
2,083
3,332
1,703
3,740
1,498
3,595
1,404
3,779
1,448
3,704
5,742
21,493
15,550
9,233
5,520
23,040
14,283
9,660
5,874
25,527
15,423
9,547
1,195
3,681
6,573
22,428
14,893
9,336
EBahamas and Caymans
92 Total, all currencies........................
23,771
31,733
45,203
307
1,266
4,815
2,636
2,180
11,147
21,747
26,140
32,949
59,913
57,677
60,753
63,508
61,758
67,398
67,392
19,370
18,237
21,218
20,640
21,144
21,446
21,617
41,815
39,515
93
94
95
To United States .........................
96
97
98
99
100
To foreigners ...............................
101
Other liabilities...........................
451
778
1,106
1,131
1,059
1,125
1,053
1,099
1,154
1,412
102 Total payable in U.S. dollars.........
22,328
28,840
42,197
56,636
54,154
57,232
59,972
58,244
64,046
63,770
Parent bank.............................
Other........................................
Other branches of parent bank,
Other banks.............................
Official institutions.................
Nonbank foreigners................
1,573
5,508
14,071
492
1,676
7,702
14,050
2,377
2,011
7,628
3,520
10,569
16,825
3,308
2,248
11,611
7,759
39,411
13,317
20,350
2,811
2,933
12,311
5,927
38,380
12,416
20,125
2,857
2,982
15,243
5,975
38,411
11,854
20,621
2,712
3,224
14,000
6,640
13,381
22,240
2,784
3,409
14,797
6,347
12,931
19,525
3,198
3,861
14,462
6,984
44,798
16,085
21,515
3,573
3,626
15,136
6,481
44,363
14,665
22,236
3,607
3,856
A 64
3.23
International Statistics □ A pril 1977
MARKETABLE U.S. TREASURY BONDS AND NOTES Foreign Holdings and Transactions
Millions of dollars
Country or area
1974
1975
1976
1976
Aug.
Sept.
Oct.
1977
Nov.
Dec.
Jan.*
Feb.*
Holdings, end of period 4
1 Estimated total...
5,708
7,703
12,153
13,467
14,487
15,063
15,798
16,307
17,813
2 Foreign countries.
5,557
7,372
10,746
11,671
11,954
12,337
12,765
13,014
13,746
885
1,085
1,733
9
2,024
9
2,064
2,293
2,330
14
764
2,300
2,504
288
191
261
485
323
4
14
764
287
191
271
476
293
4
3
4
5
6
7
8
9
10
11
Europe ..............................
Belgium-Luxembourg..
Germany.......................
Netherlands.................
Sweden.........................
Switzerland...................
United Kingdom.........
Other Western Europe.
Eastern Europe............
10
9
6
251
30
493
81
5
13
215
16
276
55
363
143
4
324
283
275
171
383
284
4
518
282
240
268
396
307
4
13
535
283
242
267
403
317
4
14
746
288
192
291
433
325
4
14
789
367
188
324
529
289
4
12
Canada.
713
395
337
386
390
250
256
256
261
13
14
15
16
Latin America...............................
Venezuela...................................
Other Latin America republics.
Netherlands Antilles 1..............
100
4
3
83
200
4
29
161
271
4
38
222
178
4
26
138
160
4
32
113
302
149
28
115
312
149
35
118
314
149
31
125
293
149
31
121
17
18
Asia.......
Japan.
3,709
3,498
5,370
3,271
7,883
2,952
8,552
3,052
8,808
3,093
8,950
2,587
9,323
2,687
9,637
2,682
10,330
2,806
19
Africa........
20
All other.
151
*
321
*
521
*
531
*
531
*
543
*
543
*
506
*
356
*
151
331
1,406
1,796
2,533
2,726
3,033
3,294
4,068
97
53
322
9
1,388
18
1,768
28
2*504
28
2,655
71
2,905
128
3,180
114
3,948
119
21 Nonmonetary international and regional
organizations.....................................
22
23
International....................
Latin American regional.
Transactions, net purchases, or sales ( — during period
),
24 Total.....................
-4 7 2
1,994
8,095
729
1,315
1,019
577
735
510
1,505
25 Foreign countries.
-5 7 3
1,814
5,393
396
925
283
383
428
254
731
26
27
-6 4 2
69
1,612
202
5,116
276
316
80
964
-3 9
227
56
340
43
421
6
229
21
709
23
101
180
2,702
333
390
736
193
307
261
773
1,797
170
3,886
221
228
20
315
10
98
630
11
140
254
-3 7
505
150
Official institutions.
Other foreign..........
28 Nonmonetary international and regional
organizations.....................................
M emo: Oil-exporting countries
29 Middle East 2..........................
30 Africa 3....................................
1 Includes Surinam until January 1976.
2 Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia,
and United Arab Emirates (Trucial States). Data not available until 1975.
3 Comprises Algeria, Gabon, Libya, and Nigeria. Data not available
until 1975.
3.24
4 Estimated official and private holdings of marketable U.S. Treasury
securities with an original maturity of more than 1 year. Data are based
on a benchmark survey of holdings as of Jan. 31, 1971, and monthly
transactions reports. Excludes nonmarketable U.S. Treasury bonds and
notes held by official institutions of foreign countries.
F O R E IG N O F F IC IA L A SSET S H E L D A T F E D E R A L R E S E R V E B A N K S
Millions of dollars, end of period
Assets
1973
1974
1976
1975
Sept.
Oct.
1977
Nov.
Dec.
Jan.
Feb.
Mar.
1 Deposits..................................................................
251
418
352
393
362
305
352
383
361
349
Assets held in custody:
2 U.S. Treasury securities1...................................
3 Earmarked gold2...............................................
52,070
17,068
55,600
16,838
60,019
16,745
64,215
16,590
64,942
63,962
16,457
66,532
16,414
66,992
16,343
68,653
16,304
71,435
16,271
1 Marketable U.S. Treasury bills, certificates of indebtedness, notes,
and bonds; and nonmarketable U.S. Treasury securities payable in dollars
and in foreign currencies.
2 The value of earmarked gold increased because of the changes in
par value of the U.S. dollar in May 1972 and in October 1973.
16,505
N ote.—Excludes deposits and U.S. Treasury securities held for inter
national and regional organizations. Earmarked gold is gold held for
foreign and international accounts and is not included in the gold stock
of the United States.
In ve stm en t transactions
A 65
3.25 FOREIGN TRANSACTIONS IN SECURITIES
Millions of dollars
Transactions, and area or country
1975
1976
1977
Jan.Feb.*
1976
Aug.
Sept.
1977
Oct.
Nov.
Dec.
Jan.*
Feb.*
1,562
1,287
1,425
1,137
1,162
1,035
U.S. corporate securities
1
2
Stocks
Foreign purchases..............................................
Foreign sales......................................................
15,347
10,678
18,227
15,474
2,587
2,172
1,062
971
1,124
1,116
1,226
1,321
977
1,025
3
Net purchases, or sales ( — ...............................
)
4,669
2,752
415
91
9
-9 5
-4 9
274
288
127
4
Foreign countries................................................
4,651
2,740
415
87
7
-9 8
-5 0
281
290
125
5
6
7
8
9
10
Europe............................................................
France..........................................................
Germany.....................................................
Netherlands................................................
Switzerland..................................................
United Kingdom........................................
2,491
262
251
359
899
594
336
256
68
-199
-1 0 0
340
177
17
-6
19
62
75
-1 5
28
-1 3
-2 1
6
13
-6 0
23
-6
-2 6
-5 5
29
-251
-1 2
-1 6
-3 7
-9 5
-7 2
-118
-2 5
-1 3
-2 9
-4 4
-5
111
37
24
-3 5
-7
84
130
27
1
24
39
39
47
-1 0
-7
-5
23
36
11
12
13
14
15
16
Canada............................................................
Latin America................................................
Middle East1..................................................
Other Asia2....................................................
Africa..............................................................
Other countries..............................................
361
-7
1,640
142
10
15
325
155
1,803
117
7
-4
38
18
150
29
1
3
35
-2 6
92
-2
-3
2
5
10
60
-4
-4
*
18
-1 7
126
28
-3
1
1
25
64
-2 3
1
*
60
1
115
9
2
-17
8
4
100
46
*
2
30
14
50
-1 7
1
1
17
Nonmonetary international and regional
organizations...............................................
18
12
3
2
4
2
-6
-2
1
Bonds3
18 Foreign purchases..............................................
19 Foreign sales......................................................
5,408
4,642
5,529
4,322
411
237
361
375
625
386
355
364
533
524
400
322
534
214
-1
934
536
20
Net purchases, or sales ( —) ...............................
766
1,207
398
174
-1 4
239
-9
9
78
320
21
Foreign countries................................................
1,795
1,248
402
173
-9
203
110
6
73
329
22
23
24
25
26
27
Europe............................................................
France..........................................................
Germany.....................................................
Netherlands................................................
Switzerland.................................................
United Kingdom........................................
113
82
-6
-8
117
-5 2
92
49
-5 0
-2 9
158
23
289
-8
*
*
47
233
29
4
-3
-3
16
23
-1 6
-1
*
*
-7
7
-1 0
-1
5
-5
-2
*
24
5
4
3
-3
15
53
7
1
-2 0
13
54
8
-5
-4
2
15
8
281
-3
4
-2
32
225
28
29
30
31
32
33
Canada............................................................
Latin America................................................
Middle East1..................................................
Other Asia?....................................................
Africa..............................................................
Other countries..............................................
128
31
1,553
-3 5
5
1
96
94
1,179
-165
-2 5
-2 1
66
3
52
-7
*
*
9
9
121
5
*
*
18
5
18
-1 5
-1 9
*
-1
29
156
3
-2
*
16
6
74
-8
-2
*
7
27
-2 1
-4 3
-1 4
-2
11
-5
59
1
*
*
55
8
-7
-8
*
*
Nonmonetary international and regional
organizations............................................... -1 ,0 3 0
-4 1
-5
-4
64
-119
3
4
-1
167
168
4
217
213
-1 8
181
199
-1 0 9
130
239
-4 0 0 -1 ,2 9 8
455
670
855
1,968
-3 0
818
848
-359
588
947
34
*
-9
Foreign securities
35 Stocks, net purchases, or sales ( — ......................
)
36 Foreign purchases..............................................
37 Foreign sales......................................................
-3 2 2
1,937
2,259
-127
311
438
-1 1
123
134
-2 7
126
153
-1
132
133
38 Bonds, net purchases, or sales ( —)....................... -6 ,3 2 4 -8 ,5 4 7
39 Foreign purchases.............................................. 2,383
4,932
40 Foreign sales......................................................
8,707 13,479
-389
1,406
1,795
-478
333
811
-4 2 7
363
790
-3 6 7
452
819
-189
1,541
1,730
-8 ,8 7 0
-518
-489
-4 5 4
-369
-4 0 2
-1 ,2 9 4
-4 9
-469
42 Foreign countries.................................................... -4 ,3 2 3 -6 ,9 7 2
43 Europe................................................................
-5 3
-836
44 Canada................................................................ -3 ,2 0 2 -5 ,1 2 9
45 Latin America....................................................
-3 0 6
1
46 Asia.....................................................................
-6 2 2
-6 4 0
47 Africa..................................................................
15
48
48 Other countries..................................................
-155
-416
-812
-213
-563
67
-1 1 4
-4 2 3
-6 0
-9 8
47
-3 1 7
1
3
-471
-145
-331
20
-1 6
*
2
-2 8 2
-3 7
-301
13
34
1
9
-2 7 0
-1 0
-2 6
-2 8
-1 0
*
-1 9 7
-7 6 5
-1 4 0
-643
37
-2 4
2
3
-338
-2 1
-298
25
-5 3
-1
9
-4 7 4
-1 9 2
-265
42
-6 1
1
1
-8 7
-1 3 2
-529
290
5
41 Net purchases, or sales ( — of stocks and bonds. . -6 ,5 1 4
)
49 Nonmonetary international and regional
organizations................................................... -2 ,1 9 2
-1 ,8 9 8
1 Comprises oil-exporting countries as follows: Bahrain, Iran, Iraq,
Kuwait, Oman, Qatar, Saudi Arabia, and United Arab Emirates (Trucial
States).
2 Includes Middle East oil-exporting countries until 1975.
10
295
-6 6
17
3 Includes State and local government securities, and securities of U.S.
Govt, agencies and corporations. Also includes issues of new debt securities
sold abroad by U.S. corporations organized to finance direct investment
abroad.
A 66
3.26
International Statistics □ A pril 1977
S H O R T - T E R M L IA B IL IT IE S T O A N D C L A IM S O N F O R E IG N E R S
in th e U n ite d S ta te s
Millions of dollars; end of period
1974
1975
Dec.
Type, and area or country
Dec.
1976
Mar.
June
R e p o rte d b y N o n b a n k in g C o n c e rn s
1974
Sept.*
1975
Dec.
Dec.
Liabilities to foreigners
3
4
June
Mar.
Sept.*
Claims on foreigners
5,927
6,010
6,326
6,301
6,335
11,266
12,172
12,733
13,889
13,220
Payable in dollars ...............................................
5,017
5,393
5,659
5,663
5,696
10,241
11,025
11,688
12,895
12,173
Payable in foreign currencies.............................
910
617
667
638
639
1,024
1,146
1,045
994
1,048
473
551
565
581
483
562
501
493
505
543
11,265
12,171
1
2
1976
By type:
Deposits with banks abroad in reporter’s
5
By area or country:
6 Foreign countries....................................................
7 Europe.................................................................
8
Belgium-Luxembourg....................................
9
10
Denmark........................................................
11
Finland............................................................
12
France.............................................................
Germany.........................................................
13
14
Greece.............................................................
Italy.................................................................
15
16
Netherlands....................................................
17
Portugal..........................................................
18
19
20
Sweden............................................................
21
22
23
24
Other Western Europe...................................
25
26
U.S.S.R...........................................................
Other Eastern Europe...................................
27
5,769
3,016
20
524
24
16
202
313
39
124
117
9
19
56
41
138
8
1,256
40
5
48
16
5,734
2,338
14
299
9
14
149
149
19
172
114
20
4
81
29
130
25
996
76
8
20
11
6,108
2,342
6
296
12
10
205
152
25
124
162
22
3
68
25
159
14
928
91
6
23
10
6,056
2,284
13
233
12
7
159
228
29
115
170
22
3
51
24
213
20
845
108
7
10
!6
6,149
2,282
16
181
13
21
185
256
28
126
141
24
5
36
35
239
16
806
113
8
19
14
4,450
26
128
42
120
428
335
65
395
143
36
81
367
89
136
26
1,847
22
21
91
50
12,732
13,888
13,220
4,504
4,946
5,344
5,162
16
133
39
91
293
355
33
380
167
41
44
407
62
242
27
1,905
36
14
150
70
17
116
35
36
358
305
41
406
176
58
45
516
80
207
26
2,289
30
18
106
80
17
193
30
138
365
360
47
335
147
52
22
432
84
270
31
2,609
28
14
96
75
21
195
26
139
418
489
56
357
141
43
28
335
62
254
23
2,370
30
17
81
79
28
Canada ................................................................
307
295
316
373
332
1,613
2,109
2,244
2,211
2,224
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
Latin America ....................................................
929
914
1,177
1,073
1,007
2,336
2,369
2,564
3,055
48
883
475
27
47
1
331
86
37
4
156
171
7
292
43
1,150
462
46
57
1
332
103
39
4
186
185
10
437
2,814
1,749
2,024
2,326
2,634
65
2,418
164
110
39
143
54
1,130
263
96
22
549
35
100
66
60
158
42
1,161
105
106
20
640
2,729
7
129
33
11
146
26
275
83
28
23
1,263
17
138
62
37
92
44
1,230
201
97
24
384
2,493
8
124
28
10
133
28
290
62
18
11
1,038
532
22
437
25
374
414
22
351
22
391
422
36
9
79
33
267
44
45
46
47
48
49
50
51
52
53
54
55
Argentina........................................................
Brazil..............................................................
Chile...............................................................
Colombia........................................................
Cuba...............................................................
Panama...........................................................
Peru.................................................................
Uruguay..........................................................
Other Latin American republics...................
Netherlands Antilles 1...................................
Other Latin America.....................................
China, People’s Republic of (Mainland)---China, Republic of (Taiwan)........................
Hong Kong....................................................
India...............................................................
Indonesia........................................................
Israel...............................................................
Japan..............................................................
K orea.............................................................
38
374
118
22
14
*
60
28
14
2
49
83
26
101
36
277
96
14
17
*
82
24
23
3
100
71
35
138
41
376
91
11
16
*
92
17
24
2
163
71
58
214
1,237
1,719
1,699
Thailand..........................................................
Other Asia......................................................
17
92
19
7
60
50
348
75
25
10
536
56
57
58
59
60
61
Africa ..................................................................
193
395
508
Other Africa...................................................
3
14
43
18
115
37
8
100
6
245
30
7
113
7
351
62
63
64
Other countries...................................................
86
73
65
Australia.........................................................
All other.........................................................
56
30
55
17
47
18
65 Nonmonetary international and regional
organizations..................................................
158
276
219
Egypt..............................................................
South Africa...................................................
6
97
17
7
137
29
295
69
14
18
1,031
1 Includes Surinam until 1976.
N ote.—Reported by exporters, importers, and industrial and com-
5
110
23
9
137
23
307
53
18
18
995
42
330
90
15
19
*
72
14
26
3
184
95
54
130
41
251
53
16
11
*
74
11
28
3
222
100
68
129
67
594
468
106
54
1
308
132
44
5
193
199
20
147
42
65
24
281
15
7
101
24
227
43
67
246
186
32
88
12
377
32
12
50
18
58
667
409
36
49
1
362
92
41
4
178
160
12
301
23
215
104
51
166
53
1.169
127
114
19
691
39
924
417
26
66
1
352
84
35
22
215
180
9
445
11
136
83
53
196
48
1,008
143
93
22
625
10
93
28
261
10
78
28
213
28
12
86
30
235
165
141
133
157
116
49
102
39
97
36
101
56
180
113
67
*
1
1
1
1
mercial concerns and other nonbanking institutions in the United States.
Data exclude claims held through U.S. banks and intercompany accounts
between U.S. companies and their affiliates.
N o n b a n k-rep o rted D a ta
A 67
3.27 SHORT-TERM CLAIMS ON FOREIGNERS Reported by Large Nonbanking Concerns in the United States
Millions of dollars, end of period
1977
1976
Type and country
1973
1974
1975
1 Total.......................................................................
3,164
3,357
3,791
Payable in dollars ...............................................
2,625
2,588
37
2,660
Deposits..........................................................
Short-term investments 1...............................
Payable in foreign currencies.............................
540
697
429
268
510
246
1,118
765
589
306
386
1,350
967
390
398
252
2
3
4
By type:
5
6
7
Deposits..........................................................
Short-term investments 1...............................
By country:
10
11
12
Bahamas.............................................................
Japan...................................................................
All other.............................................................
435
105
2,591
69
i Negotiable and other readily transferable foreign obligations payable
on demand or having a contractural maturity of not more than 1 year
from the date On which the obligation was incurred by the foreigner.
3.28
July
Aug.
Sept.
Oct.
Nov.
Dec.
Jan.P
5,185
5,142
4,750
4,869
5,133
5,402
5,358
3,035
4,552
4,284
4,774
4,742
4,192
360
4,538
4,075
2,703
332
4,119
419
3,705
370
3,893
391
4,210
387
4,401
373
4,375
367
756
634
604
675
586
535
628
616
1,304
1,153
546
343
445
2,068
1,415
918
139
645
2,082
1,397
823
137
703
1,712
1,356
810
146
726
1,641
1,400
1,059
116
653
1,691
1,563
1,059
135
685
1,891
1,551
1,228
128
676
1,762
1,290
1.312
127
867
431
203
377
227
1974
1975
Dec.
Dec*
344
242
308
227
328
300
308
308
N ote.—Data represent the assets abroad of large nonbanking concerns in the United States. They are a portion of the total claims on
foreigners reported by nonbanking concerns in the United States and
are included in the figures shown in Table 3.26.
L O N G -T E R M L IA B IL IT IE S T O A N D C L A IM S O N F O R E IG N E R S
in th e U n ite d S ta te s
Millions of dollars, end of period
Area and country
447
228
4,597
R e p o rte d b y N o n b a n k in g C o n c e rn s
1976
Mar.
Junep
1974
Sept p
1975
Dec.
Dec.
Liabilities to foreigners
1976
Mar.
JuneP
Sept.*
Claims on foreigners
1 Total.......................................................................
3,889
4,277
4,092
3,960
3,705
4,544
4,959
5,152
5,008
4,958
2 Europe....................................................................
3 Germany............................................................
4 Netherlands.......................................................
5 Switzerland.........................................................
3,033
474
218
572
1,256
3,280
506
202
505
1,629
3,128
446
214
466
1,601
3,007
425
214
448
1,520
2,790
406
270
308
1,441
1,007
23
280
44
364
1,002
41
217
55
396
949
38
219
52
349
959
39
211
52
365
925
77
211
50
290
7 Canada...................................................................
110
164
153
175
121
1,290
1,426
1,473
1,516
1,510
8 Latin America........................................................
9 Bahamas.............................................................
269
210
4
1
3
248
184
5
1
6
222
157
5
1
6
230
132
5
1
7
1,384
19
187
435
153
1,633
8
171
315
216
1,770
7
182
312
209
1,602
37
164
306
187
1,547
37
171
244
219
496
397
496
394
489
388
498
402
681
112
669
90
685
91
709
85
736
80
11
12
Chile...................................................................
Mexico................................................................
216
177
3
1
3
14
Japan..................................................................
460
367
15 Africa.....................................................................
6
2
2
2
2
127
168
214
163
181
16 All other 1..............................................................
65
66
65
64
64
54
60
62
59
58
1 Includes nonmonetary international and regional organizations.
A 68
3.29
International Statistics □ A pril 1977
D IS C O U N T R A T E S O F F O R E IG N C E N T R A L B A N K S
Per cent per annum
Rate on Mar. 31, 1977
Country
Month
effective
Per
cent
Argentina........................
Austria.............................
Belgium...........................
Brazil...............................
Canada............................
Denmark.........................
Rate on Mar. 31, 1977
Country
Feb.
June
Feb.
May
Feb.
Mar.
18.0
4.0
7.0
28.0
8.0
9.0
1972
1976
1977
1976
1977
1977
Per
cent
Netherlands..................
N ote.—Rates shown are mainly those at which the central bank either
discounts or makes advances against eligible commercial paper and/or
government securities for commercial banks or brokers. For countries with
3.30
10.5
3.5
15.0
6.0
4.5
5.0
Germany, Fed. Rep. of.
Rate on Mar. 31, 1977
Country
Month
effective
Sept.
Sept.
Oct.
Mar.
June
Jan.
1976
1975
1976
1977
1942
1977
Per
cent
6.0
8.0
2.0
9.5
5.0
United Kingdom..........
1976
1976
1976
1977
1970
more than one rate applicable to such discounts or advances, the rate
shown is the one at which it is understood the central bank transacts the
largest proportion of its credit operations.
|
1974
1976
1976
1975
1977
Oct.
1 Euro-dollars..........................................................
2 United Kingdom..................................................
3 Canada..................................................................
Nov.
Dec.
Jan.
Feb.
Mar.
11.01
13.34
10.47
7.02
10.63
8.00
5.58
11.35
9.39
5.46
14.57
9.34
5.29
14.75
9.08
5.01
14.27
8.51
5.14
13.53
8.24
5.08
11.56
7.78
5.13
10.31
7.63
9.80
4.87
3.01
5. 17
7.91
4.19
1.45
7.02
8.65
4.76
1.80
10.23
10.39
4.61
2.12
8.22
10.41
4.82
1.98
6.51
10.55
4.70
1.24
6.18
10.02
4.64
1.68
6.04
9.81
4.70
2.88
5.73
9.87
10.37
6.63
11.64
16.32
10.25
7.70
18.61
13.94
7.50
17.76
12.48
8.00
17.13
10.73
8.00
15.68
8.49
7.50
15.86
7.59
7.50
16.57
7.07
7.20
Germany...............................................................
Switzerland............................................................
Netherlands...........................................................
France...................................................................
8 Italy.......................................................................
9 Belgium.................................................................
10 Japan.....................................................................
N ote.—Rates are for 3-month interbank loans except for—Canada,
finance company paper; Belgium, time deposits of 20 million francs and
3.31
Sept.
Oct.
June
Mar.
Oct.
F O R E I G N S H O R T - T E R M IN T E R E S T R A T E S
Per cent per annum; averages of daily figures
Country, or type
4
5
6
7
Month
effective
over; and Japan, loans and discounts that can be called after being held
over a minimum of two month-ends.
F O R E IG N E X C H A N G E R A T E S
Cents per unit of foreign currency
Country/currency
1974
1975
1976
1976
1977
Oct.
1
2
3
4
5
Australia/dollar..................
Austria/shilling...................
Belgium/franc.....................
Canada/dollar.....................
Denmark/krone.................
143.89
5.3564
2.5713
102.26
16.442
6
7
8
9
10
Finland/markka.................
France/franc.......................
Germany/deutsche m ark...
India/rupee.........................
Ireland/pound.....................
26.565
11
12
13
14
15
Italy/lira..............................
Japan/yen...........................
Malaysia/ringgit.................
Mexico/peso.......................
Netherlands/guilder............
16
17
18
19
20
New Zealand/dollar...........
Norway/krone....................
Portugal/escudo.................
South Africa/rand..............
Spain/peseta.......................
21
22
23
24
Sri Lanka/rupee.................
14.978
Sweden/krona.....................
22.563
Switzerland/franc...............
33.688
United Kingdom/pound.. . 234.03
M emo:
25 United States/dollar 1........
20.805
38.723
12.460
234.03
.15372
.34302
41.682
8.0000
37.267
140.02
18.119
3.9506
146.98
1.7337
84. 11
Dec.
Jan.
Feb.
Mar.
130.77
5.7467
2.7253
98.30
17.437
122.15
5.5744
2.5921
101.41
16.546
123.40
5.7960
2.6822
102.81
16.968
120.66
5.8332
2.7047
101.46
16.934
105.29
5.9061
2.7483
98.204
17.145
108.53
5.8852
2.7249
98.985
16.967
109.04
5.8453
2.7114
97.295
16.891
109.94
5.8822
2.7258
95.125
17.038
27.285
23.354
40.729
11.926
222.16
25.938
20.942
39.737
11.148
180.48
25.938
20.072
41.165
11.243
163.77
26.073
20.042
41.443
11.155
163.81
26.315
20.055
41.965
11.296
167.84
26.313
20.108
41.792
11.231
171.24
26.169
20.083
41.582
11.285
171.03
26.296
20.075
41.812
11.313
171.74
.15328
.33705
41.753
8.0000
39.632
.11684
.34344
39.575
4.8535
39.265
.12044
.33741
39.340
6.9161
37.846
.11554
.33879
39.513
4.0200
39.678
.11521
.33933
39.550
4.8626
40.240
.11372
.34359
39.718
4.8114
39.953
.11327
.35087
40.011
4.4084
39.813
.11276
.35687
40.152
4.3978
40.079
121.16
19.180
3.9286
136.47
1.7424
99.115
18.327
3.3159
114.85
1.4958
98.484
18.812
3.1920
114.85
1.4675
95.392
18.954
3.1742
114.88
1.4626
92.179
19.193
3.1674
114.95
1.4634
94.839
18.946
3.1276
114.94
1.4577
95.192
18.904
3.0717
115.00
1.4475
95.689
19.035
2.5778
115.00
1.4530
14.385
24.141
38.743
222.16
11.908
22.957
40.013
180.48
11.453
23.511
40.876
163.77
11.479
23.699
40.958
163.81
11.246
24.051
40.823
167.84
11.421
23.734
40.127
171.24
11.442
23.543
39.669
171.03
12.820
23.726
39.209
171.74
82.20
89.68
90.88
91.06
90.55
90.35
90.55
90.45
1 Index of weighted-average exchange value of U.S. dollar against currencies of other G-10 countries plus Switzerland. May 1970 parities = 100.
Weights are 1972 global trade of each of the 10 countries.
Nov.
N ote.—Averages of certified noon buying rates in New York for cable
transfers.
A 69
G u id e to
T a b u la r P re s e n ta tio n an d S ta tis tic a l R eleases
G U ID E T O T A B U L A R P R E S E N T A T IO N
S
ym bols
p
r
rp
e
c
n .e .c .
R p ’s
I P C ’s
G
and
A
b b r e v ia t io n s
P re lim in a ry
R e v is e d
R e v is e d p re lim in a ry
E s tim a te d
C o rre c te d
N o t e ls e w h e re classified
R e p u rc h a s e a g re e m e n ts
In d iv id u a ls , p a r tn e rs h ip s , an d c o rp o ra tio n s
eneral
In fo rm
S M S A ’s
R E I T ’s
*
S ta n d a rd m e tro p o lita n s ta tis tic a l a re a s
R e a l e s ta te in v e s tm e n t tru sts
A m o u n ts in sig n ific a n t in te rm s o f th e p a r tic
u la r u n it ( e .g ., le s s th a n 5 0 0 ,0 0 0 w h e n
th e u n it is m illio n s )
(1) Z e ro , (2 ) n o fig u re to b e e x p e c te d , o r
(3) fig u re d e la y e d o r, (4) n o c h a n g e (w h e n
fig u res are e x p e c te d in p e rc e n ta g e s ).
a t io n
M in u s sig n s are u se d to in d ic a te (1) a d e c re a s e , (2)
a n e g a tiv e fig u re , o r (3) a n o u tflo w .
“ U .S . G o v t, s e c u ritie s ” m a y in c lu d e g u a ra n te e d
iss u e s o f U .S . G o v t, a g e n c ie s (th e flow o f fu n d s fig u res
a ls o in c lu d e n o t fu lly g u a ra n te e d iss u e s) as w ell as d ire c t
o b lig a tio n s o f th e T re a s u ry . “ S ta te a n d lo c a l g o v t .”
also in c lu d e s m u n ic ip a litie s , sp e c ia l d is tr ic ts , a n d o th e r
p o litic a l s u b d iv is io n s.
In s o m e o f th e ta b le s d e ta ils d o n o t a d d to to ta ls
b e c a u s e o f ro u n d in g .
S T A T IS T IC A L R E L E A S E S
L
is t
P u b l is h e d S e m
ia n n u a l l y
,
w it h
L
a test
B
u l l e t in
R
eferen ce
Issue
A n tic ip a te d sc h e d u le o f re le a se d a te s fo r in d iv id u a l re le a se s
...............................
P age
D e c . 1976
A -8 2
A 70
B o a rd o f G o v e rn o rs o f th e F ed eral R eserve System
A r t h u r F . B u r n s , C h a ir m a n
H
enry
C. W
S t e p h e n S . G a r d n e r , V ic e C h a ir m a n
P h il ip E . C o l d w
a l l ic h
P h il ip C . J a c k s o n , J r .
O F F IC E O F
S T A F F D IR E C T O R F O R M A N A G E M E N T
D
J. C h a rles P a r tee
O F F IC E O F B O A R D M E M B E R S
a v id
ell
M . L il l y
O F F IC E O F S T A F F
D IR E C T O R F O R M O N E T A R Y P O L IC Y
T h o m a s J . O ’C o n n e l l , C o u n s e l t o t h e
J o h n M . D e n k l e r , S ta ff D ir e c to r
R o b e r t J. L a w r e n c e , D e p u ty S ta ff
C h a ir m a n
D ir e c to r
G o rd o n
B . G r im w o o d , A s s is ta n t D ir e c to r
an d P rogram
D ir e c to r f o r
C o n tin g e n c y P la n n in g
W illia m
C h a ir m a n
M i l t o n W . H u d s o n , A s s i s t a n t to th e
W . L a y t o n , D ir e c to r o f E q u a l
E m p lo y m e n t O p p o r tu n ity
J o s e p h R . C o y n e , A s s is ta n t to th e B o a r d
K e n n e t h A . G u e n t h e r , A s s i s t a n t to th e B o a r d
J a y P a u l B r e n n e m a n , S p e c ia l A s s i s t a n t to th e
B o a rd
B o a rd
B o a rd
L E G A L D IV IS IO N
J o h n D . H a w k e , J r ., G en era l C ou n sel
B a ld w in B . T u t t l e , D e p u ty G e n e r a l
C ou n sel
R o b e r t E . M a n n io n , A s s is ta n t G e n e ra l
W illia m H . W a l l a c e , D ir e c to r
A l b e r t R . H a m i l t o n , A s s o c ia te D ir e c to r
C l y d e H . F a r n s w o r t h , J r . , A s s is ta n t D ir e c to r
J o h n F . H o o v e r , A s s is ta n t D ir e c to r
P . D . R in g , A s s is ta n t D ir e c to r
th e B o a r d
F r a n k O ’B r i e n , J r . , S p e c i a l A s s i s t a n t t o t h e
J o s e p h S . S im s , S p e c i a l A s s i s t a n t t o t h e B o a r d
D o n a l d J . W i n n , S p e c i a l A s s i s t a n t to th e
D IV IS IO N O F F E D E R A L R E S E R V E
B A N K E X A M IN A T IO N S A N D B U D G E T S
S t e p h e n H . A x i l r o d , S ta ff D ir e c to r
A r t h u r L . B r o i d a , D e p u ty S ta ff D ir e c to r
M u r r a y A l t m a n n , A s s i s t a n t to th e B o a r d
P e t e r M . K e i r , A s s i s t a n t to th e B o a r d
S t a n l e y J . S i g e l , A s s i s t a n t to th e B o a r d
N o r m a n d R . V . B e r n a r d , S p e c i a l A s s i s t a n t to
C ou n sel
A l l e n L. R a ik e n , A s s is ta n t G e n e ra l C o u n se l
G a r y M . W e ls h , A s s is ta n t G e n e ra l C o u n se l
C h a r l e s R . M c N e i l l , A s s i s t a n t t o th e
G en era l C o u n sel
D IV IS IO N O F R E S E A R C H A N D S T A T IS T IC S
Ja m e s L . K ic h lin e , D ir e c to r
J o s e p h S . Z e is e l, D e p u ty D ir e c to r
E d w a r d C . E t t i n , A s s o c ia te D ir e c to r
J o h n H . K a l c h b r e n n e r , A s s o c ia te D ir e c to r
J a m e s B . E c k e r t , S e n io r R e s e a r c h D iv is io n
O ffic e r
E l e a n o r J. S t o c k w e l l , S e n io r R e s e a r c h
D iv is io n O ffic e r
J a m e s R . W e t z e l , S e n io r R e s e a r c h D iv is io n
O ffic e r
R o b e r t A . E is e n b e is , A s s o c ia te R e s e a r c h
D iv is io n O ffic e r
tJ o H N J . M i n g o , A s s o c ia te R e s e a r c h D iv is io n
O ffic e r
J. C o r t l a n d G . P e r e t , A s s o c ia te R e se a rc h
D iv is io n O ffic e r
DIVISION OF
FEDERAL RESERVE BA N K OPERATIONS
Ja m e s R . K u d lin s k i, D ir e c to r
W a l t e r A . A l t h a u s e n , A s s is ta n t D ir e c to r
B r i a n M . C a r e y , A s s is ta n t D ir e c to r
H a r r y A . G u i n t e r , A s s is ta n t D ir e c to r
D IV IS IO N O F C O N S U M E R A F F A IR S
H e l m u t F . W e n d e l, A s s o c ia te R e se a rc h
J a n e t O . H a r t , D ir e c to r
N a t h a n i e l E . B u t l e r , A s s o c ia te D ir e c to r
J e r a u l d C . K lu c k m a n , A s s o c ia te D ir e c to r
Ja m e s M . B r u n d y , A s s is ta n t R e se a rc h
D iv is io n O ffic e r
O ffic e r
R o b e r t M . F is h e r , A s s is ta n t R e se a rc h
O F F IC E O F T H E S E C R E T A R Y
D IV IS IO N O F D A T A P R O C E S S IN G
C
B
U
G
R
h a r l e s L . H a m p to n , D ir e c to r
r u c e M . B e a r d s l e y , A s s o c ia te D ir e c to r
y le s s D . B l a c k , A s s is ta n t D ir e c to r
l e n n L . C u m m in s , A s s is ta n t D ir e c to r
o b e r t J. Z e m e l, A s s is ta n t D ir e c to r
D IV IS IO N O F P E R S O N N E L
D a v id L . S h a n n o n , D ir e c to r
C h a r l e s W . W o o d , A s s is ta n t D ir e c to r
O F F IC E O F T H E C O N T R O L L E R
J o h n K a k a l e c , C o n tr o lle r
T y l e r E . W i l l i a m s , J r . , A s s is ta n t C o n tr o lle r
D iv is io n O ffic e r
J a r e d J. E n z l e r , A s s is ta n t R e s e a r c h D iv is io n
D iv is io n
O ffic e r
R ic h a r d H . P u c k e t t , A s s is ta n t R e se a rc h
T h e o e m d re E . A l l i s o n , S e c r e ta r y
G r i f f i t h L . G a r w o o d , D e p u ty S e c r e ta r y
* R u t h A . R e is t e r , A s s is ta n t S e c r e ta r y
D iv is io n O ffic e r
S te p h e n P . T a y l o r , A s s is ta n t R e se a rc h
D iv is io n O ffic e r
L e v o n H . G a r a b e d i a n , A s s is ta n t D ir e c to r
D IV IS IO N O F B A N K IN G
S U P E R V IS IO N A N D R E G U L A T IO N
J o h n E . R y a n , A c tin g D ir e c to r
W illia m W . W ile s , A s s o c ia te D ir e c to r
P e t e r E . B a r n a , A s s is ta n t D ir e c to r
F r e d e r ic k R . D a h l , A s s is ta n t D ir e c to r
J a c k M . E g e r t s o n , A s s is ta n t D ir e c to r
J o h n T . M c C l i n t o c k , A s s is ta n t D ir e c to r
T h o m a s E . M e a d , A s s is ta n t D ir e c to r
R o b e r t S. P l o t k i n , A s s is ta n t D ir e c to r
T h o m a s A . S id m a n , A s s is ta n t D ir e c to r
D IV IS IO N O F IN T E R N A T IO N A L F IN A N C E
J o h n E . R e y n o ld s , A c tin g D ir e c to r
E d w in M . T r u m a n , A s s o c ia te D ir e c to r
R o b e r t F . G e m m ill, S e n io r I n te r n a tio n a l
D iv is io n O ffic e r
G e o r g e B . H e n r y , S e n io r I n te r n a tio n a l
D iv is io n O ffic e r
R e e d J. I r v i n e , S e n io r I n te r n a tio n a l
D iv is io n O ffic e r
S a m u e l P i z e r , S e n io r I n te r n a tio n a l D iv is io n
O ffic e r
D IV IS IO N O F A D M IN IS T R A T IV E S E R V IC E S
C h a r l e s J. S ie g m a n , S e n io r I n te r n a tio n a l
D iv is io n O ffic e r
W a l t e r W . K r e im a n n , D ir e c to r
D o n a l d E . A n d e r s o n , A s s is ta n t D ir e c to r
J o h n D . S m ith , A s s is ta n t D ir e c to r
*O n loan from the Federal Reserve Bank of M inneapolis.
tO n leave of absence.
A 72
F ed eral O p en M a rk e t C o m m itte e
A rth u r F. B u rn s,
Ph
E. C
il ip
R
G
oger
P
u ffey
a v id
R
ardner
h il ip
D
oldw ell
Steph en S. G
P a u l A . V o lc k e r,
C h a ir m a n
obert
V ic e
C h a ir m a n
C . Jackson, Jr .
J. C
M. L
L
aw rence
H
enry
il l y
P. M
Frank E. M
ayo
harles
P a rtee
K. R
C. W
oos
a l l ic h
o r r is
A r t h u r L . B r o i d a , S e c r e ta r y
A n a t o l B a l b a c h , A s s o c ia te E c o n o m is t
M u r r a y A l t m a n n , D e p u ty S e c r e ta r y
R i c h a r d G . D a v is , A s s o c ia te E c o n o m is t
N o r m a n d R . V . B e r n a r d , A s s is ta n t
T h o m a s D a v is , A s s o c ia te E c o n o m is t
R o b e r t E is e n m e n g e r , A s s o c ia te E c o n o m is t
S e c r e ta r y
T h o m a s J . O ’C o n n e l l , G e n e r a l C o u n s e l
E d w a r d C . E t t i n , A s s o c ia te E c o n o m is t
E d w a r d G . G u y , D e p u ty G e n e ra l C o u n se l
J a m e s L . K i c h l i n e , A s s o c ia te E c o n o m is t
B a ld w in B . T u t t l e , A s s is ta n t G e n e ra l
J o h n E . R e y n o ld s , A s s o c ia te E c o n o m is t
K a r l S c h e l d , A s s o c ia te E c o n o m is t
C ou n sel
S t e p h e n H . A x i l r o d , E c o n o m is t
E d w in M . T r u m a n , A s s o c ia te E c o n o m is t
J o s e p h S . Z e i s e l , A s s o c ia te E c o n o m is t
A l a n R . H o lm e s , M a n a g e r , S y s te m O p e n M a r k e t A c c o u n t
P e t e r D . S t e r n l i g h t , D e p u ty M a n a g e r f o r D o m e s tic O p e r a tio n s
S c o t t E . P a r d e e , D e p u ty M a n a g e r f o r F o r e ig n O p e r a tio n s
Federal A d v is o ry C o u n c il
R i c h a r d D . H i l l , f i r s t f e d e r a l r e s e r v e d i s t r i c t , P r e s id e n t
G ilb e r t F. B ra d le y , t w e lf th
W
alter
B. W
reserve
r is t o n
,
seco n d
fed era l
fe d e ra l re se rv e d is tric t,
E dw ard B
reserve
d is t r ic t
R oger S. H
il l a s , t h ir d
federal
M . B rock W
e ir
,
fourth
fed era l
r e s e r v e d is t r ic t
John H . L u m
p k in
,
f if t h
fed era l
m e r , s ix t h
federal
seventh
e ig h t h
federal
federal
aughan
,
n in t h
fed era l
d is t r ic t
,
tenth
fed era l
d is t r ic t
B en F. L o v e ,
eleventh
d is t r ic t
H e r b e r t V . P r o c h n o w , S e c r e ta r y
W illia m
,
d is t r ic t
cL ea n
reserve
V ic e P r e s id e n t
it h
d is t r ic t
R ic h a r d H . V
J. W . M
Sm
E . L a sa ter,
reserve
r e s e r v e d is t r ic t
onald
reserve
r e s e r v e d is t r ic t
Frank A. Plum
D
reserve
r e s e r v e d is t r ic t
yron
J. K o r s v ik , A s s o c ia te S e c r e ta r y
fed era l
A 73
F ed eral R eserve B anks, B ranches, and O ffices
FED ERAL RESERVE BAN K,
branch, o r fa c ility
Zip
BO STO N * ..................
Chairman
Deputy Chairm an
President
First V ice President
02106
Louis W. Cabot
Robert M. Solow
Frank E. M orris
James A. M cIntosh
NEW Y O R K * ............. 10045
Frank R. M illiken
Robert H. Knight
Paul A. Miller
Vice President
in charge of branch
Paul A. Volcker
Thomas M. Tim len
Buffalo .....................
14240
John T. Keane
PH ILA DELPHIA
19105
John W . Eckm an
W erner C. Brown
David P. Eastburn
Vacant
CLEV ELA N D *
44101
Horace A. Shepard
Robert E. Kirby
Lawrence H. Rogers, II
G. Jackson Tankersley
W illis J. W inn
W alter H. M acDonald
E. Angus Powell
E. Craig W all, Sr.
James G. Harlow
Robert C. Edwards
Robert P. Black
George C. Rankin
Cincinnati ................ 45201
Pittsburgh ................ 15230
RICHM OND*
.............. 23261
Baltim ore ....................21203
Charlotte ....................28230
Robert E. Showalter
Robert D. Duggan
Jim m ie R. M onhollon
Stuart P. Fishburne
C u lp ep er C om m unications
an d R ec o rd s C e n te r.. 22 7 0 1
ATLANTA
.................. 30303
Birm ingham .............
Jacksonville ............
M iami .......................
Nashville ..................
New Orleans ...........
C H ICA G O *
35202
32203
33152
37203
70161
................ 60690
Detroit ....................... 48231
ST. LOUIS .................. 63166
Little Rock .............. 72203
Louisville ................ 40201
M em phis .................. 38101
M INNEAPOLIS
55480
Helena ....................... 59601
KANSAS CITY
64198
Denver ..................... 80217
Oklahom a City ....... 73125
O m aha ..................... 68102
DALLAS
..................... 75222
El Paso ..................... 79999
Houston .................... 77001
San Antonio ............ 78295
SAN FRA NCISCO ... .94120
Los Angeles .............
Portland ....................
Salt Lake City .......
Seattle .......................
90051
97208
84110
98124
Albert D. Tinkelenberg
H. G. Pattillo
Clifford M. Kirtland, Jr.
W illiam H. M artin, III
Gert H. W. Schmidt
David G. Robinson
John C. Bolinger
George C. Cortright, Jr.
M onroe Kimbrel
Kyle K. Fossum
Peter B. Clark
Robert H. Strotz
Jordan B. Tatter
Robert P. Mayo
Daniel M. Doyle
Edward J. Schnuck
W illiam B. W alton
Ronald W . Bailey
Jam es C. Hendershot
Frank A. Jones, Jr.
Lawrence K. Roos
Eugene A. Leonard
Jam es P. M cFarland
Stephen F. Keating
Patricia P. Douglas
M ark H. W illes
Clem ent A. Van Nice
Harold W. Andersen
Joseph H. W illiams
A. L. Feldman
James G. Harlow, Jr.
Durward B. Varner
Roger Guffey
Henry R. Czerwinski
Irving A. Mathews
Charles T. Beaird
Gage Holland
Alvin I. Thomas
Marshall Boykin, III
Ernest T. Baughman
Robert H. Boykin
Joseph F. Alibrandi
Cornell C. Maier
Joseph R. Vaughan
L oran L. Stewart
Sam Bennion
Lloyd E. Cooney
John J. Balles
John B. W illiam s
Hiram J. Honea
Edward C. Rainey
W. M. Davis
Jeffrey J. W ells
George C. G uynn
W illiam C. Conrad
John F. Breen
D onald L. Henry
L. Terry Britt
John D. Johnson
W ayne W . M artin
W illiam G. Evans
Robert D. H am ilton
Fredric W. Reed
J. Z. Rowe
Carl H. M oore
Richard C. Dunn
Angelo S. Carella
A. Grant H olm an
Jam es J. Curran
*
A dditional offices of these Banks are located at L ew iston , M aine 04240; W indsor L ock s, C onnecticut 06096; Cranford,
N ew Jersey 070 1 6 ; Jericho, N ew York 11753; C olum bus, O hio 43216; C olum bia, South Carolina 29210; D es M oines, Iow a
50306 ; Indianapolis, Indiana 462 0 4 ; and M ilw aukee, W iscon sin 53202.
A 74
Federal R eserve B o ard P u b licatio n s
A v a i l a b l e f r o m P u b lic a tio n s S e r v i c e s , D iv is i o n o f A d
r e q u e s t a n d b e m a d e p a y a b l e to th e o r d e r o f th e B o a r d
m in is tr a tiv e S e r v ic e s , B o a r d o f G o v e r n o r s o f th e F e d
o f G o v e r n o r s o f th e F e d e r a l R e s e r v e S y s te m in a f o r m
e r a l R e s e r v e S y s t e m , W a s h in g to n , D .C . 2 0 5 5 1 . W h e r e
c o lle c ti b le
a ch arge
The
is in d i c a t e d , r e m itta n c e s h o u ld a c c o m p a n y
F ed e r a l R eser v e S ystem — P u rpo ses
F u n c t i o n s . 1974. 125 p p .
and
A n n u a l R eport
F e d e r a l R e s e r v e B u l l e t i n . M o n th ly . $ 2 0 .0 0 p er
y e a r o r $ 2 .0 0 e a c h in th e U n ite d S ta te s , its p o s s e s
s io n s , C a n a d a , a n d M e x ic o ; 10 o r m o re o f sa m e
issu e to o n e a d d re s s , $ 1 8 .0 0 p e r y e a r o r $ 1 .7 5
e a c h . E ls e w h e r e , $ 2 4 .0 0 p e r y e a r o r $ 2 .5 0 e a c h .
B a n k in g a n d M o n e t a r y S t a t is t ic s , 1 9 1 4 -1 9 4 1 .
(R e p rin t o f P a rt 1 o n ly ) 1976. 6 8 2 p p . $ 5 .0 0 .
B a n k in g a n d
M o n e t a r y S t a t is t ic s , 1 9 4 1 -1 9 7 0 .
1976. 1 ,1 6 8 p p . $ 1 5 .0 0 .
A n n u a l S t a t i s t i c a l D i g e s t , 1 9 7 0 -7 5 . 1976. 3 3 9 p p .
$ 4 .0 0 p e r c o p y fo r e a c h p a id su b s c rip tio n to F e d
eral R e s e rv e B u lle tin . A ll o th e rs , $ 5 .0 0 e a c h .
F e d e r a l R e s e r v e M o n t h l y C h a r t B o o k . S u b s c r ip
tio n in c lu d e s o n e iss u e o f H isto ric a l C h a rt B o o k .
$ 1 2 .0 0 p e r y e a r o r $ 1 .2 5 e a c h in th e U n ite d S ta te s,
its p o s s e s s io n s , C a n a d a , an d M e x ic o ; 10 o r m o re
o f sa m e issu e to o n e a d d re s s , $ 1 .0 0 e a c h . E ls e
w h e re , $ 1 5 .0 0 p e r y e a r o r $ 1 .5 0 e a c h .
H i s t o r i c a l C h a r t B o o k . Iss u e d a n n u a lly in S ep t.
S u b sc rip tio n to M o n th ly C h a rt B o o k in c lu d e s o n e
iss u e . $ 1 .2 5 e a c h in th e U n ite d S ta te s , its p o s s e s
s io n s , C a n a d a , a n d M e x ic o ; 10 o r m o re to o n e
a d d re s s , $ 1 .0 0 e a c h . E ls e w h e re , $ 1 .5 0 e a c h .
C a p i t a l M a r k e t D e v e l o p m e n t s . W e e k ly . $ 1 5 .0 0 p e r
y e a r o r $ .4 0 e a c h in th e U n ite d S ta te s, its p o s s e s
sio n s , C a n a d a , a n d M e x ic o ; 10 o r m o re o f sa m e
issu e to o n e a d d re s s , $ 1 3 .5 0 p e r y e a r o r $ .3 5 e a c h .
E ls e w h e re , $ 2 0 .0 0 p e r y e a r o r $ .5 0 e a c h .
S e le c te d I n t e r e s t a n d E x c h a n g e R a te s — W e e k ly
S e r i e s o f C h a r t s . W e e k ly . $ 1 5 .0 0 p e r y e a r or
$ .4 0 e a c h in th e U n ite d S ta te s, its p o s s e s s io n s ,
C a n a d a , a n d M e x ic o ; 10 o r m o re o f sa m e issu e
to o n e a d d re s s , $ 1 3 .5 0 p e r y ear o r $ .3 5 e a c h .
E ls e w h e re , $ 2 0 .0 0 p e r y e a r o r $ .5 0 e a c h .
T h e F e d e r a l R e s e r v e A c t , as a m e n d e d th ro u g h D e
c e m b e r 1 9 7 1 , w ith an a p p e n d ix c o n ta in in g p r o v i
sio n s o f c e rta in o th e r sta tu te s a ffe c tin g th e F e d e ra l
R e se rv e S y ste m . 2 5 2 p p . $ 1 .2 5 .
R e g u l a t io n s o f t h e B o a r d o f G o v e r n o r s o f t h e
F e d e r a l R e s er v e S y stem
P u b l is h e d I n t e r p r e t a t io n s o f t h e B o a r d o f G o v
e r n o r s , as o f J u n e 3 0 , 1976. $ 7 .5 0 .
T r a d in g in F e d e r a l F u n d s . 1965. 116 p p . $ 1 .0 0
e a c h ; 10 o r m o re to o n e a d d re s s , $ .8 5 e a c h .
I n d u s t r ia l P r o d u c t io n — 1971 E d i t i o n . 1972. 383
p p . $ 4 .0 0 e a c h ; 10 o r m o re to o n e a d d re s s , $ 3 .5 0
each.
at
par
in
U .S .
cu rren cy.
( S ta m p s
and
c o u p o n s a r e n o t a c c e p t e d .)
T h e P e r f o r m a n c e o f B a n k H o l d in g C o m p a n ie s .
1967. 2 9 p p . $ .2 5 e a c h ; 10 o r m o re to o n e a d d re ss ,
$ .2 0 e a c h .
B a n k C r e d it -C a r d a n d C h e c k -C r e d it P l a n s . 1968.
102 p p . $ 1 .0 0 e a c h ; 10 o r m o re to o n e a d d re ss ,
$ .8 5 e a c h .
S u r v e y o f F i n a n c ia l C h a r a c t e r is t ic s o f C o n
s u m e r s . 1966. 166 p p . $ 1 .0 0 e a c h ; 10 o r m o re
to o n e a d d re s s , $ .8 5 e a c h .
S u r v e y o f C h a n g e s in F a m il y F i n a n c e s . 1968. 321
p p . $ 1 .0 0 e a c h ; 10 o r m o re to o n e a d d re s s , $ .8 5
each.
R e p o r t o f t h e J o in t T r e a s u r y -F e d e r a l R e s e r v e
S t u d y o f t h e U .S . G o v e r n m e n t S e c u r it ie s
M a r k e t . 1969. 4 8 p p . $ .2 5 e a c h ; 10 o r m o re to
o n e a d d re s s , $ .2 0 e a c h .
J o in t T r e a s u r y - F e d e r a l R e s e r v e S t u d y o f t h e
G o v e r n m e n t S e c u r it ie s M a r k e t : S t a f f S t u d
ie s — P a r t 1. 1970. 86 p p . $ .5 0 e a c h ; 10 o r m o re
to o n e a d d re s s , $ .4 0 e a c h . P a r t 2. 1971. 153 p p .
a n d P a r t 3. 1973. 131 p p . E a c h v o lu m e $ 1 .0 0 ;
10 o r m o re to o n e a d d re s s , $ .8 5 e a c h .
O p e n M a r k e t P o l ic ie s a n d O p e r a t in g P r o c e
d u r e s — S t a f f S t u d i e s . 1971. 2 1 8 p p . $ 2 .0 0
e a c h ; 10 o r m o re to o n e a d d r e s s , $ 1 .7 5 e a c h .
R e a p p r a is a l o f t h e F e d e r a l R e s e r v e D is c o u n t
M e c h a n is m . V o l. 1. 1971. 2 7 6 p p . V o l. 2 . 1971.
173 p p . V o l. 3 . 1972. 2 2 0 p p . E a c h v o lu m e $ 3 .0 0 ;
10 o r m o re to o n e a d d re s s , $ 2 .5 0 e a c h .
T h e E c o n o m e t r ic s o f P r ic e D e t e r m in a t io n C o n
f e r e n c e , O c to b e r 3 0 -3 1 , 1 9 7 0 , W a s h in g to n , D .C .
1972. 397 p p . C lo th e d . $ 5 .0 0 e a c h ; 10 or m o re
to o n e a d d re s s , $ 4 .5 0 e a c h . P a p e r e d . $ 4 .0 0 e a c h ;
10 o r m o re to o n e a d d re s s , $ 3 .6 0 e a c h .
F e d e r a l R eser v e S t a f f S t u d y : W ays to M o d er a te
F l u c t u a t io n s in H o u s in g C o n s t r u c t io n . 1972.
4 8 7 p p . $ 4 .0 0 e a c h ; 10 or m o re to o n e a d d re s s ,
$ 3 .6 0 e a c h .
L e n d in g F u n c t io n s o f t h e F e d e r a l R e s e r v e
B a n k s . 1973. 271 p p . $ 3 .5 0 e a c h ; 10 o r m o re
to o n e a d d re s s , $ 3 .0 0 e a c h .
I n t r o d u c t io n t o F l o w o f F u n d s . 1975. 6 4 p p . $ .5 0
e a c h ; 10 o r m o re to o n e a d d re ss , $ .4 0 e a c h .
I m p r o v in g t h e M o n e t a r y A g g r e g a t e s (R e p o rt o f th e
A d v is o ry C o m m itte e o n M o n e ta ry S ta tistic s ).
1976. 43 p p . $ 1 .0 0 e a c h ; 10 or m o re to o n e
a d d re s s , $ .8 5 e a c h .
A n n u a l P e r c e n t a g e R a t e T a b l e s (T ru th in L e n d
in g — R e g u la tio n Z ) V o l. I (R e g u la r T ra n s a c tio n s ).
1969. 100 p p . V o l. I I (Irre g u la r T ra n s a c tio n s ).
1969. 116 p p . E a c h v o lu m e $ 1 .0 0 . 10 or m o re
o f sa m e v o lu m e to o n e a d d re s s , $ .8 5 e a c h .
F ed e ra l R e s e r v e B o a r d P u b lic a tio n s
C O N S U M E R E D U C A T IO N P A M P H L E T S
( S h o r t p a m p h l e ts s u ita b le f o r c la s s r o o m u s e . M u ltip le
c o p ie s a v a ila b le w ith o u t c h a r g e .)
F a ir C r e d it B il l in g
If Y o u B orro w T o B u y Sto ck
U .S . C u r r e n c y
W h a t T r u t h in L e n d in g M e a n s
to
Y ou
S T A F F E C O N O M IC S T U D IE S
S tu d ie s a n d p a p e r s o n e c o n o m ic a n d f in a n c ia l s u b je c ts
th a t a r e o f g e n e r a l in t e r e s t in th e f ie ld o f e c o n o m ic
resea rch .
S u m m a r ie s O n l y P r in t e d
in t h e
B u l l e t in
( L im ite d s u p p ly o f m im e o g r a p h e d c o p ie s o f fu ll te x t
a v a ila b le u p o n r e q u e s t f o r s in g le c o p i e s . )
T h e G r o w t h o f M u l t i b a n k H o l d i n g C o m p a n ie s :
1 9 5 6 -7 3 , b y G re g o ry E . B o c z a r. A p r. 1976. 27
pp.
E x t e n d i n g M e r g e r A n a l y s is B e y o n d t h e S in g l e M a r k e t F r a m e w o r k , b y S te p h e n A . R h o a d e s.
M a y 19 7 6 . 25 p p .
S e a s o n a l A d ju s t m e n t o f M i— C u r r e n t l y P u b
l is h e d a n d A l t e r n a t iv e M e t h o d s , b y E d w a rd
R . F ry . M a y 1976. 22 p p .
E f f e c t s o f N O W A c c o u n t s o n C o st s a n d E a r n in g s
o f C o m m e r c ia l B a n k s in 1 9 7 4 -7 5 , b y J o h n D .
P a u lu s. S e p t. 1976. 4 9 p p .
P r in t e d
in
Full
in t h e
B u l l e t in
S ta f f E c o n o m ic S tu d ie s s h o w n in lis t b e lo w .
R E P R IN T S
(E x c e p t f o r S ta f f P a p e r s , S ta f f E c o n o m ic S tu d ie s , a n d
s o m e le a d in g a r t i c l e s , m o s t o f th e a r tic le s r e p r in te d d o
n o t e x c e e d 12 p a g e s .)
S e a s o n a l F a c t o r s A f f e c t in g B a n k R e s e r v e s . 2 /5 8 .
M e a s u r e s o f M e m b e r B a n k R e s e r v e s . 7 /6 3 .
R e s e a r c h o n B a n k in g S t r u c t u r e a n d P e r f o r m
a n c e , S ta f f E c o n o m ic S tu d y b y T y n a n S m ith .
4 /6 6 .
A R e v is e d I n d e x o f M a n u f a c t u r in g C a p a c it y ,
S ta f f E c o n o m ic S t u d y b y F ra n k d e L e e u w w ith
F ra n k E . H o p k in s a n d M ic h a e l D . S h e rm a n . 1 1 /6 6 .
U .S . I n t e r n a t io n a l T r a n s a c t io n s : T r e n d s in
1 9 6 0 - 6 7 . 4 /6 8 .
M e a s u r e s o f S e c u r it y C r e d i t . 1 2 /7 0 .
R e v is e d M e a s u r e s o f M a n u f a c t u r in g C a p a c it y
U t i l i z a t i o n . 1 0 /7 1 .
A 75
R e v is io n o f B a n k C r e d it S e r ie s . 1 2 /7 1 .
A ss e t s a n d L ia b il it ie s o f F o r e ig n B r a n c h e s o f
U .S . B a n k s . 2 /7 2 .
B a n k D e b it s , D e p o s it s , a n d D e p o s it T u r n o v e r —
R e v is e d S e r ie s . 7 /7 2 .
Y ie l d s o n N e w l y I s s u e d C o r p o r a t e B o n d s . 9 /7 2 .
R e c e n t A c t iv it ie s o f F o r e ig n B r a n c h e s o f U .S .
B a n k s . 1 0 /7 2 .
R e v is io n o f C o n s u m e r C r e d it S t a t is t ic s . 1 0 /7 2 .
O n e -B a n k H o l d in g C o m p a n ie s B e f o r e t h e 197 0
A m e n d m e n t s . 1 2 /7 2 .
Y ie l d s o n R e c e n t l y O f f e r e d C o r p o r a t e B o n d s .
5 /7 3 .
C r e d it -C a r d a n d C h e c k -C r e d it P l a n s a t C o m m e r
c ia l B a n k s . 9 /7 3 .
R a t e s o n C o n s u m e r I n s t a l m e n t L o a n s . 9 /7 3 .
N e w S e r ie s fo r L a r g e M a n u f a c t u r in g C o r p o r a
t i o n s . 1 0 /7 3 .
U .S . E n e r g y S u p p l ie s a n d U s e s , S ta f f E c o n o m ic
S tu d y b y C la y to n G e h m a n . 1 2 /7 3 .
I n f l a t io n a n d S t a g n a t io n in M a jo r F o r e ig n I n
d u s t r ia l C o u n t r i e s . 1 0 /7 4 .
T h e S t r u c t u r e o f M a r g in C r e d i t . 4 /7 5 .
N e w S t a t is t ic a l S e r ie s o n L o a n C o m m it m e n t s a t
S e l e c t e d L a r g e C o m m e r c ia l B a n k s . 4 /7 5 .
R e c e n t T r e n d s in F e d e r a l B u d g e t P o l i c y . 7 /7 5 .
R e c e n t D e v e l o p m e n t s in I n t e r n a t io n a l F in a n c ia l
M a r k e t s . 1 0 /7 5 .
M IN N IE :
A
S m all
V e r s io n
of
th e
M I T - P E N N - S S R C E c o n o m e t r ic M o d e l , S ta ff
E c o n o m ic S tu d y b y D o u g la s B a tte n b e rg , J a re d J.
E n z le r, an d A rth u r M . H a v e n n e r. 1 1 /7 5 .
A n A s s e s s m e n t o f B a n k H o l d in g C o m p a n ie s , S ta f f
E c o n o m ic S t u d y b y R o b e rt J. L a w re n c e a n d
S a m u e l H . T a lle y , 1 /7 6 .
I n d u s t r ia l E l e c t r ic P o w e r U s e . 1 /7 6 .
R e v is io n o f M o n e y S t o c k M e a s u r e s . 2 /7 6 .
S u r v e y o f F in a n c e C o m p a n ie s , 19 7 5 . 3 /7 6 .
R e v is e d S e r ie s f o r M e m b e r B a n k D e p o s it s a n d
A g g r e g a t e R e s e r v e s . 4 /7 6 .
I n d u s t r ia l P r o d u c t io n — 1976 R e v is io n . 6 /7 6 .
F e d e r a l R e s e r v e O p e r a t io n s in P a y m e n t M e c h a
n is m s : A S u m m a r y . 6 /7 6 .
R e c e n t G r o w t h in A c t iv it ie s o f U .S . O f f ic e s o f
F o r e ig n B a n k s . 1 0 /7 6 .
N e w E s t im a t e s o f C a p a c it y U t i l i z a t i o n : M a n u
f a c t u r in g a n d M a t e r i a l s . 1 1 /7 6 .
U .S . I n t e r n a t io n a l T r a n s a c t io n s in a R e c o v e r in g
E c o n o m y . 4 /7 7 .
B a n k H o l d in g C o m p a n y F in a n c ia l D e v e l o p m e n t s
in 1976. 4 /7 7 .
C h a n g e s in B a n k L e n d in g P r a c t ic e s , 1 976. 4 /7 7 .
C h a n g e s in T im e a n d S a v in g s D e p o s it s a t C o m
m e r c ia l B a n k s , J u ly - O c t. 1 976. 4 /7 7 .
A 76
Federal R eserve B ulletin □ April 1977
In d e x to S ta tis tic a l T ab les
R e f e r e n c e s a r e t o p a g e s A -3 t h r o u g h A -6 8 a lt h o u g h t h e p r e f ix “ A ” is o m i tt e d in t h i s in d e x
A C C E P T A N C E S , b a n k e rs , 11, 2 5 , 27
A g ric u ltu ra l lo a n s o f c o m m e rc ia l b a n k s , 18, 2 0 - 2 2
A s se ts an d lia b ilitie s ( S e e a ls o F o re ig n e rs ):
B a n k s, b y c la s s e s , 16, 17, 18, 2 0 - 2 3 , 2 9
F e d e ra l R e se rv e B a n k s, 12
N o n fin an cial c o rp o ra tio n s , c u rre n t, 38
A u to m o b ile s:
C o n s u m e r in sta lm e n t c re d it, 4 2 , 43
P ro d u c tio n , 4 8 , 4 9
B A N K c re d it p ro x y , 15
B a n k e rs b a la n c e s , 16, 18, 2 0 , 2 1 , 22
{ S e e a ls o F o re ig n e rs )
B a n k s fo r c o o p e ra tiv e s , 35
B o n d s ( S e e a ls o U .S . G o v t, se c u ritie s ):
N e w is s u e s , 3 6 , 37
Y ie ld s , 3
B ra n c h b a n k s:
A s se ts a n d lia b ilitie s o f fo re ig n b ra n c h e s o f U .S .
banks, 62
L ia b ilitie s o f U .S . b a n k s to th e ir fo re ig n
b ra n c h e s , 23
B u s in e ss a c tiv ity , 4 6
B u s in e ss e x p e n d itu re s o n n e w p la n t a n d e q u ip m e n t,
39
B u s in e ss lo a n s ( S e e C o m m e rc ia l a n d in d u stria l lo an s)
C A P A C IT Y u tiliz a tio n , 4 6 , 4 7
C a p ita l a c c o u n ts :
B a n k s, b y c la s s e s , 16, 17, 19, 2 0
F e d e ra l R e se rv e B a n k s, 12
C e n tra l b a n k s , 6 8
C e rtific ates o f d e p o s it, 2 3 , 27
C o m m e rc ia l a n d in d u stria l lo an s:
C o m m e rc ia l b a n k s , 15, 18, 2 3 , 26
W e e k ly re p o rtin g b a n k s , 2 0 , 2 1 , 2 2 , 2 3 , 2 4
C o m m e rc ia l b a n k s:
A s se ts a n d lia b ilitie s , 3 , 1 5 - 1 8 , 2 0 - 2 3
B u s in e ss lo a n s , 2 6
C o m m e rc ia l an d in d u stria l lo a n s , 2 4
C o n s u m e r lo a n s h e ld , b y ty p e , 4 2 , 43
L o a n s so ld o u trig h t, 23
N u m b e r, b y c la s s e s , 16, 17
R e al e s ta te m o rtg a g e s h e ld , b y ty p e o f h o ld e r an d
p ro p e rty , 41
C o m m e rc ia l p a p e r, 3 , 2 4 , 2 5 , 27
C o n d itio n s ta te m e n ts ( S e e A s se ts a n d lia b ilitie s)
C o n s tru c tio n , 4 6 , 5 0
C o n s u m e r in s ta lm e n t c r e d it, 4 2 , 43
C o n s u m e r p ric e s , 4 6 , 51
C o n s u m p tio n e x p e n d itu re s , 5 2 , 53
C o rp o ra tio n s :
P ro fits, ta x e s , an d d iv id e n d s , 38
S e c u rity iss u e s, 3 6 , 3 7 , 65
C o s t o f liv in g ( S e e C o n s u m e r p ric e s)
C re d it u n io n s , 2 9 , 4 2 , 43
C u rre n c y a n d c o in , 5 , 16, 18
C u rre n c y in c irc u la tio n , 4 , 14
C u s to m e r c re d it, sto c k m a rk e t, 28
D E B IT S to d e p o s it a c c o u n ts , 13
D e b t ( S e e s p e c if ic ty p e s o f d e b t o r s e c u r itie s )
D e m a n d d e p o s its :
A d ju s te d , c o m m e rc ia l b a n k s , 13, 15, 19
D e m a n d d e p o s its — C o n tin u e d
B a n k s, by c la s s e s , 16, 17, 19, 2 0 - 2 3
O w n e rsh ip b y in d iv id u a ls , p a rtn e rs h ip s , an d
c o rp o ra tio n s , 25
S u b je c t to re se rv e re q u ire m e n ts , 15
T u rn o v e r, 13
D e p o s its ( S e e a ls o s p e c if ic ty p e s o f d e p o s it s ):
B a n k s, b y c la s s e s , 3 , 16, 17, 19, 2 0 - 2 3 , 29
F e d e ra l R e se rv e B a n k s , 4 , 12
S u b je c t to re se rv e r e q u ire m e n ts , 15
D isc o u n t ra te s at F .R . B a n k s ( S e e In te re s t ra te s)
D isc o u n ts a n d a d v a n c e s b y F .R . B a n k s ( S e e L o a n s)
D iv id e n d s , c o rp o ra te , 38
EM PLO Y M E N T, 46, 47
E u ro -d o lla rs , 15, 27
F A R M m o rtg a g e lo a n s , 41
F a rm e rs H o m e A d m in is tra tio n , 41
F e d e ra l a g e n c y o b lig a tio n s , 4 , 11, 12, 13, 34
F e d e ra l an d F e d e ra lly s p o n s o re d c re d it a g e n c ie s , 35
F e d e ra l finance:
D e b t su b je c t to s ta tu to ry lim ita tio n an d
ty p e s a n d o w n e rs h ip o f g ro ss d e b t, 32
R e c e ip ts a n d o u tla y s , 3 0 , 31
T re a s u ry o p e ra tin g b a la n c e , 30
F e d e ra l F in a n c in g B a n k , 35
F e d e ra l fu n d s , 3 , 6 , 18, 2 0 , 2 1 , 2 2 , 2 7 , 30
F e d e ra l h o m e lo a n b a n k s , 35
F e d e ra l H o m e L o a n M o rtg a g e C o r p ., 3 5 , 4 0 , 41
F e d e ra l H o u s in g A d m in is tra tio n , 3 5 , 4 0 , 41
F e d e ra l in te rm e d ia te c re d it b a n k s , 35
F e d e ra l lan d b a n k s , 3 5 , 41
F e d e ra l N a tio n a l M o rtg a g e A s s n ., 3 5 , 4 0 , 41
F e d e ra l R e se rv e B a n k s:
C o n d itio n s ta te m e n t, 12
D isc o u n t ra te s ( S e e In te re s t ra te s)
U .S . G o v t, s e c u ritie s h e ld , 4 , 12, 13, 3 2 , 33
F e d e ra l R e se rv e c re d it, 4 , 5 , 12, 13
F e d e ra l R e se rv e n o te s , 12
F e d e ra lly sp o n s o re d c re d it a g e n c ie s , 35
F in a n c e c o m p a n ie s :
L o a n s , 2 0 , 2 1 , 2 2 , 4 2 , 43
P a p e r, 2 5 , 27
F in a n c ia l in s titu tio n s, lo a n s to , 18, 2 0 , 2 1 , 2 2 , 23
F lo a t, 4
F lo w o f fu n d s , 4 4 , 45
F o re ig n :
C u rre n c y o p e ra tio n s , 12
D e p o s its in U .S . b a n k s , 4 , 12, 19, 2 0 , 2 1 , 22
E x c h a n g e ra te s , 68
T ra d e , 55
F o re ig n e rs :
C la im s o n , 6 0 , 6 1 , 6 6 , 67
L ia b ilitie s to , 2 3 , 5 6 - 5 9 , 6 4 - 6 7
GOLD.
C e rtific a te s, 12
S to c k , 4 , 55
G o v e rn m e n t N a tio n a l M o rtg a g e A s s n ., 3 5 , 4 0 , 41
G ro ss n a tio n a l p ro d u c t, 5 2 , 53
H O U S IN G , n e w a n d e x is tin g u n its , 50
A ll
I N C O M E , p e rso n a l a n d n a tio n a l, 4 6 , 5 2 , 53
In d u stria l p ro d u c tio n , 4 6 , 48
In sta lm e n t lo a n s , 4 2 , 43
In su ra n c e c o m p a n ie s , 2 9 , 3 2 , 3 3 , 41
In su re d c o m m e rc ia l b a n k s , 17, 18
In te rb a n k d e p o s its , 16, 17, 2 0 , 2 1 , 22
In te re s t rates:
B onds, 3
B u s in e ss lo a n s o f b a n k s , 26
F e d e ra l R e se rv e B a n k s, 3 , 8
F o re ig n c o u n trie s , 68
M o n e y an d c a p ita l m a rk e t ra te s, 3, 27
M o rtg a g e s , 3, 4 0
P rim e ra te , c o m m e rc ia l b a n k s , 2 6
T im e an d sa v in g s d e p o s its , m a x im u m ra te s , 10
In te rn a tio n a l c a p ita l tra n sa c tio n s o f th e
U n ite d S ta te s, 5 6 - 6 7
In te rn a tio n a l o r g a n iz a tio n s , 5 6 - 6 1 , 6 5 - 6 7
In v e n to rie s , 52
In v e s tm e n t c o m p a n ie s , issu es a n d a s se ts , 37
In v e stm e n ts ( S e e a ls o s p e c if ic ty p e s o f in v e s tm e n ts ):
B a n k s, b y c la s se s , 16, 17, 18, 2 0 , 2 1 , 2 2 , 29
C o m m e rc ia l b a n k s , 3 , 15, 16, 17
F e d e ra l R e se rv e B a n k s, 12, 13
L ife in su ra n c e c o m p a n ie s , 29
S a v in g s an d lo an a s s n s ., 29
L A B O R fo rc e , 4 7
L ife in su ra n c e c o m p a n ie s ( S e e In su ra n c e c o m p a n ie s )
L o a n s ( S e e a ls o s p e c if ic ty p e s o f lo a n s ):
B a n k s, b y c la s s e s , 16, 17, 18, 2 0 - 2 3 , 2 9
C o m m e rc ia l b a n k s , 3 , 1 5 - 1 8 , 2 Q -2 3 , 2 4 , 26
F e d e ra l R e se rv e B a n k s, 3 , 4 , 5 , 8 , 12, 13
In s u ra n c e c o m p a n ie s , 2 9 , 41
In su re d o r g u a ra n te e d b y U .S ., 4 0 , 41
S a v in g s an d lo an a s s n s ., 29
M ANUFACTURERS:
C a p a c ity u tiliz a tio n , 4 6 , 47
P ro d u c tio n , 4 6 , 4 9
M a rg in r e q u ire m e n ts , 28
M em ber banks:
A s se ts an d lia b ilitie s , b y c la s s e s , 16, 17, 18
B o rro w in g s at F e d e ra l R e se rv e B a n k s, 5 , 12
N u m b e r, b y c la s s e s , 16, 17
R e se rv e p o s itio n , b a s ic , 6
R e se rv e re q u ire m e n ts , 9
R e se rv e s an d re la te d ite m s, 3 , 4 , 5 , 15
M in in g p ro d u c tio n , 4 9
M o b ile h o m e s h ip m e n ts , 50
M o n e ta ry a g g re g a te s , 3 , 15
M o n e y an d c a p ita l m a rk e t ra te s ( S e e In te re s t ra te s)
M o n e y sto c k m e a s u re s a n d c o m p o n e n ts , 3, 14
M o rtg a g e s ( S e e R e al e s ta te lo a n s)
M u tu a l fu n d s ( S e e In v e stm e n t c o m p a n ie s )
M u tu a l sa v in g s b a n k s , 3 , 10, 2 0 - 2 2 , 2 9 , 3 2 , 3 3 , 41
N A T IO N A L b a n k s , 17
N a tio n a l d e fe n se o u tla y s , 31
N a tio n a l in c o m e , 52
N o n m e m b e r b a n k s , 17, 18
O P E N m a rk e t tra n s a c tio n s , 11
P E R S O N A L in c o m e , 53
P r ic e s :
C o n s u m e r an d w h o le s a le , 4 6 , 51
S to c k m a rk e t, 28
P rim e ra te , c o m m e rc ia l b a n k s , 2 6
P ro d u c tio n , 4 6 , 4 8
P ro fits, c o rp o ra te , 38
R E A L e s ta te lo an s:
B a n k s, by c la s s e s , 18, 2 0 - 2 3 , 2 9 , 41
L ife in su ra n c e c o m p a n ie s , 2 9
M o rtg a g e te rm s, y ie ld s, an d a c tiv ity , 3 , 4 0
T y p e o f h o ld e r a n d p ro p e rty m o rtg a g e d , 41
R e se rv e p o s itio n , b a s ic , m e m b e r b a n k s , 6
R e se rv e re q u ire m e n ts , m e m b e r b a n k s , 9
R e se rv e s:
C o m m e rc ia l b a n k s , 16, 17, 2 0 , 2 1 , 22
F e d e ra l R e se rv e B a n k s , 12
M e m b e r b a n k s , 3 , 4 , 5 , 15, 16
U .S . re se rv e a s se ts , 55
R e sid e n tia l m o rtg a g e lo a n s , 4 0
R e ta il c re d it an d re ta il sa le s, 4 2 , 4 3 , 4 6
S A V IN G :
F lo w o f fu n d s , 4 4 , 45
N a tio n a l in c o m e a c c o u n ts , 53
S a v in g s a n d lo an a s s n s ., 3 , 10, 2 9 , 3 3 , 4 1 , 4 4
S a v in g s d e p o s its ( S e e T im e d e p o s its )
S a v in g s in s titu tio n s, se le c te d a s s e ts , 29
S e c u ritie s ( S e e a ls o U .S . G o v t, se c u ritie s):
F e d e ra l an d F e d e ra lly sp o n s o re d a g e n c ie s , 35
F o re ig n tra n sa c tio n s , 65
N e w iss u e s, 3 6 , 37
P ric e s , 28
S p e c ia l D ra w in g R ig h ts , 4 , 12, 5 4 , 55
S tate an d lo cal g o v ts .:
D e p o s its, 19, 2 0 , 2 1 , 22
H o ld in g s o f U .S . G o v t, s e c u ritie s , 3 2 , 33
N e w se c u rity iss u e s, 36
O w n e rsh ip o f se c u ritie s o f, 18, 2 0 , 2 1 , 2 2 , 29
Y ie ld s o f s e c u ritie s , 3
S tate m e m b e r b a n k s , 17
S to ck m a rk e t , 28
S to c k s ( S e e a ls o S e c u ritie s):
N e w iss u e s, 3 6 , 37
P ric e s, 28
T A X r e c e ip ts, F e d e ra l, 31
T im e d e p o s its , 3, 10, 15, 16, 17, 19, 2 0 , 2 1 , 2 2 , 23
T ra d e , fo re ig n , 55
T re a s u ry c u rre n c y , T re a s u ry c a s h , 4
T re a s u ry d e p o s its , 4 , 12, 30
T re a s u ry o p e ra tin g b a la n c e , 30
U N E M P L O Y M E N T , 47
U .S . b a la n c e o f p a y m e n ts , 54
U .S . G o v t, b a la n c e s:
C o m m e rc ia l b a n k h o ld in g s , 19, 2 0 , 2 1 , 22
M e m b e r b an k h o ld in g s , 15
T re a s u ry d e p o s its at R e se rv e B a n k s, 4 , 12, 30
U .S . G o v t, se c u ritie s:
B a n k h o ld in g s, 16, 17, 18, 2 0 , 2 1 , 2 2 , 2 9 , 3 2 , 33
D e a le r tra n s a c tio n s , p o s itio n s , an d fin a n c in g , 34
F e d e ra l R e se rv e B a n k h o ld in g s , 4 , 12, 13, 3 2 , 33
F o re ig n an d in te rn a tio n a l h o ld in g s an d
tra n sa c tio n s , 12, 3 2 , 6 4
O p e n m a rk e t tra n s a c tio n s , 11
O u ts ta n d in g , b y ty p e o f se c u rity , 3 2 , 33
O w n e rs h ip , 3 2 , 33
R a te s in m o n e y a n d c a p ita l m a rk e ts , 27
Y ie ld s , 3
U tilitie s, p ro d u c tio n , 4 9
V E T E R A N S A d m in is tra tio n , 4 0 , 41
W E E K L Y re p o rtin g b a n k s , 2 0 - 2 4
W h o le s a le p ric e s, 4 6
Y IE L D S ( S e e In te re s t ra te s)
A 78
T h e F ed eral R eserve System
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F e d e ral R e se rv e
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F e d e ra l R e s e r v e B a n k C itie s
F e d e ra l R e s e rv e B r a n c h C itie s
T e rrito rie s
F e d e ra l R e s e rv e B a n k F a c ility
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B o a rd o f G o v e rn o rs o f th e F e d e ra l
R e s e rv e S y s te m
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