Full text of Federal Reserve Bulletin : August 1975

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A U G U S T

1975

FEDERAL RESERVE

BULLETIN




A 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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FEDERAL RESERVE BULLETIN
N U M B E R 8 □ V O L U M E 61 □ A U G U S T 1975

C O N T E N T S

A

4 6 3 R e c e n t D e v e lo p m e n t s in

1 F in a n c ia l a n d B u s in e s s S ta tis tic s

C o r p o r a te F in a n c e
4 7 2 S ta ff E c o n o m ic S tu d ie s : S u m m a r y

A

1 C o n te n ts

A

2 U .S . S t a t i s t i c s

A 5 8 I n te r n a tio n a l S t a t is ti c s
4 7 4 S ta te m e n ts to C o n g r e s s
A 7 8 B o a r d o f G o v e r n o r s a n d S ta ff
5 0 5 R e c o r d o f P o li c y A c t io n s
o f th e F e d e r a l O p e n M a r k e t C o m m it te e

A 8 0 O p e n M a r k e t C o m m itte e

and

S ta ff;

F e d e r a l A d v is o r y C o u n c il
5 1 3 L a w D e p a r tm e n t
A 81 F e d e r a l R e s e r v e B a n k s an d B r a n c h e s
5 3 4 A n n o u n c e m e n ts
A 8 2 F e d e r a l R e s e r v e B o a r d P u b lic a tio n s
5 3 7 In d u str ia l P r o d u c tio n
A 8 4 I n d e x to S ta tis tic a l T a b le s
A 8 6 M ap o f F ed eral R e se rv e S y stem
In s id e B a c k C o v e r :
G u id e to T a b u la r P r e s e n ta tio n
S ta tis tic a l R e le a s e s : R e f e r e n c e

P U B L IC A T IO N S

C O M M IT T E E

J. C h a r le s P a r te e

L y le E . G r a m le y

J o h n M . D e n k le r

R a lp h C . B r y a n t

Josep h R . C o y n e

J o h n D . H a w k e , Jr.

F r e d e r ic S o lo m o n

J a m e s L . K ic h lin e , S ta ff D ir e c to r

The Federal Reserve B u l l e t in is issued monthly under the direction of the staff publications com m ittee. This
com mittee is responsible for opinions expressed except in official statements and signed articles. Direction for
the art work is provided by Mack R. Row e. Editorial support is furnished by the Econom ic Editing Unit headed
by Elizabeth B. Sette.




R e c e n t D e v e lo p m e n ts in C o r p o r a te F in a n c e

T h is a r t i c l e w a s p r e p a r e d in th e C a p i ta l M a r ­
k e ts S e c ti o n o f th e D i v is io n o f R e s e a r c h a n d
S t a t is ti c s .

O v e r th e p a st d e c a d e , tr en d s

in c o r p o r a te

fin a n c e h a v e le d to a c o n s id e r a b le r e d u c tio n in
th e r e la tiv e im p o r ta n c e o f e q u ity in c o r p o r a te
b a la n c e s h e e t s . T h e sh a rp in c r e a s e in d e b t fi­

T h e c o n c u r r e n c e o f ra p id in fla tio n a n d d e c lin in g

n a n c in g in

rea l e c o n o m ic a c tiv ity p la c e d u n u s u a l fin a n c in g

c o r p o r a te d e b t -to -e q u ity r a tio s r o s e to u n p r e c e ­

p r e s s u r e s o n n o n fin a n c ia l b u s in e s s c o r p o r a tio n s

d e n te d l e v e l s . In a d d itio n , th e a lr e a d y u n fa v o r ­

in

1974.

E ven

th o u g h

rea l b u s in e s s

w e a k e n e d p r o g r e s s iv e ly
c u r r e n t-d o lla r

1 9 7 4 a c c e le r a t e d th is d e c li n e , a n d

a c t iv ity

a b le m a tu r ity str u c tu r e o f th e d e b t s h o w n o n

th r o u g h o u t th e y e a r ,

m a n y c o r p o r a te b a la n c e s h e e t s w a s w o r s e n e d b y

r e q u ir e m e n ts

by

in d u str y

fo r

th e c o n tin u e d h e a v y r e lia n c e o n sh o r t-te r m fi­

w o r k in g c a p ita l a n d in v e s tm e n t o u t la y s c o n t in ­

n a n c in g . B e c a u s e o f th is d e te r io r a tio n , m a n y

u e d to r is e b e c a u s e o f th e p e r s is te n t a d v a n c e o f

c o r p o r a tio n s f o u n d

p r ic e s a n d

t io n e d a n d th e ir a b ility to o b ta in e x te r n a l fu n d s

c o sts.

C o n s e q u e n tly ,

c o r p o r a tio n s

th e ir

c r e d it r a tin g s

q u es­

ta p p e d fin a n c ia l m a r k e ts fo r a r e c o r d v o lu m e o f

im p a ir e d at a tim e w h e n th eir in te rn a l fu n d s

fu n d s la s t y e a r . In c o n tr a s t, d u r in g th e first h a lf

w e r e d e c lin in g .

o f 1 9 7 5 to ta l d e m a n d s o n c r e d it m a r k e ts a b a te d

c r e a s in g ly

M a r k e t in v e s to r s b e c a m e

q u a lit y - c o n s c io u s ,

r e q u ir in g

in ­

la r g e

a s c o r p o r a tio n s m a d e s iz a b le c u tb a c k s in in v e n ­

r isk p r e m iu m s fo r lo w e r -r a te d c o r p o r a te is s u e s ;

to r ie s

a s a r e s u lt, firm s w ith l e s s th a n p r im e c r e d it

and

th e le s s,

fix e d

th e

in v e s t m e n t

v o lu m e

of

o u t la y s .

bond

N ever­

fin a n c in g

has

r a tin g s— in c lu d in g m a n y p u b lic u t ilit ie s — w e r e

r e a c h e d h is to r ic a lly h ig h l e v e l s in r e c e n t m o n th s

v ir tu a lly e x c lu d e d fr o m m a r k e t p a r tic ip a tio n fo r

as

m a n y m o n th s o f la st y e a r .

c o r p o r a tio n s

have

s h ifte d

fr o m

sh o r t-

to

to ta l o f

$77

b illio n

r a is e d

by

lo n g -te r m d e b t.
T h e record

E ffo r ts to rep a ir th e s e w id e s p r e a d fin a n c ia l
im b a la n c e s b e g a n la te in 1 9 7 4 a n d d o m in a te d

n o n fin a n c ia l c o r p o r a tio n s in e x te r n a l m a r k e ts in

c o r p o r a te fin a n c ia l s tr a te g y th r o u g h th e first h a lf

1 9 7 4 w a s 15 p e r c e n t m o r e th a n in th e b o o m

o f 1 9 7 5 . W ith th e e c o n o m y in th e m id s t o f th e

y e a r o f 1 9 7 3 . R a th er th an s e ll n e w e q u it y sh a r e s

d e e p e s t d e c lin e o f th e

at d e p r e s s e d 1 9 7 4 m a r k e t p r ic e s , firm s tu rn ed

n e s s e s c u r ta ile d th e ir c a p ita l o u t la y s a n d r e d u c e d

to d e b t m a r k e ts fo r fu n d s to m e e t th e ir in c r e a s e d

th e ir in v e n to r ie s sh a r p ly , th u s le s s e n i n g p r e s ­

p o s tw a r p e r io d , b u s i­

fin a n c in g r e q u ir e m e n ts . T h u s , w h ile n e t s to c k

s u r e s o n to ta l e x te r n a l fin a n c in g . T h e fu n d in g

is s u e s o f n o n fin a n c ia l c o r p o r a tio n s d e c lin e d to

o f sh o r t-te r m lia b ilit ie s in o r d e r to r estr u c tu r e

$ 4 .1 b i l li o n , th e lo w e s t v o lu m e s in c e 1 9 6 9 , n e t

b a la n c e s h e e ts a n d to r e b u ild liq u id it y h a s b e e n

is s u e s o f c o r p o r a te d e b t so a r e d to a r e c o r d $ 7 3

r e fle c te d in th e la r g e v o lu m e o f c o r p o r a te b o n d

b illio n . S h o r t-te r m d e b t a c c o u n te d fo r a s ig n if i­

o ffe r in g s an d th e p r o n o u n c e d d e c lin e in s h o r t­

c a n t sh a re o f th is in c r e a s e d c o r p o r a te b o r r o w ­

te rm

in g , w ith b a n k lo a n s to b u s in e s s e x p a n d in g at

M e a n w h ile , th e r e c o v e r y in s to c k p r ic e s h a s le d

th e s a m e a d v a n c e d p a c e in 1 9 7 4 a s in 1 9 7 3 .

to an in c r e a s e in th e v o lu m e o f n e w

C o r p o r a te is s u a n c e o f o p e n -m a r k e t p a p er a ls o

is s u e s , w ith p u b lic u tilit ie s

r o se s u b s ta n tia lly in 1 9 7 4 ; th is w a s in c o n tr a st

la r g e sh a re o f th is g r o w th .

b o r r o w in g s

d u r in g

th e

first 6

m o n th s .
e q u ity

a c c o u n tin g fo r a

to 1 9 7 3 , w h e n c o r p o r a tio n s h a d s u b s titu te d b a n k

T h e s e e ffo r ts h a v e im p r o v e d th e fin a n c ia l b a s e

lo a n s fo r fu n d s r a is e d th r o u g h s a le s o f c o m m e r ­

o f m a n y c o r p o r a tio n s , th o u g h c o n s id e r a b le r e ­

c ia l p a p er b e c a u s e o f th e m u c h lo w e r r e la tiv e

str u c tu r in g r e m a in s to b e d o n e . In p a r tic u la r ,

c o s t o f b a n k c r e d it.

a sig n ific a n t a c c u m u la tio n o f




fin a n c ia l a s s e ts

464

Federal Reserve Bulletin □ August 1975

p r o b a b ly w i l l n o t o c c u r u n til c o r p o r a te p ro fits
r e b o u n d fr o m

th e ir d e c lin e

e a r lie r th is y e a r .

T h e in c r e a s in g g a p b e t w e e n in te rn a l fu n d s
an d c a p ita l o u tla y s r e fle c te d in la r g e part th e

M o r e o v e r , fo r m a n y o f th e w e a k e r fir m s , im ­

im p a c t o f in fla tio n o n b u s in e s s in v e s tm e n t a c ­

p r o v in g th e ir fin a n c ia l p o s it io n

is an a r d u o u s

t iv ity . A lth o u g h c o r p o r a te p la n t a n d e q u ip m e n t

p r o c e s s , w h ic h c o u ld c o n c e iv a b ly b e h in d e r e d

e x p e n d itu r e s in rea l te r m s w e a k e n e d in th e first

if th e e c o n o m ic

h a lf o f 1 9 7 4 a n d a c tu a lly d e c lin e d in th e fin al

r e c o v e r y s h o u ld

sh a r p ly in ­

c r e a s e to ta l d e m a n d s o n c a p ita l m a r k e ts .

m o n th s , th e s e o u t la y s in cu r re n t d o lla r s w e r e
m o r e th an 8 p e r c e n t h ig h e r fo r th e y e a r a s a
w h o le th an in 1 9 7 3 . T h e la r g e s t in c r e a s e s o c ­

C A P IT A L
A N D

cu rred

E X P E N D IT U R E S

IN T E R N A L

am ong

m a n u fa c tu r e r s

of

n o n d u r a b le

g o o d s — p a r tic u la r ly p e t r o le u m , c h e m ic a ls , a n d

F U N D S

p a p er — b u t th e r e w e r e a ls o str o n g a d v a n c e s fo r
T h e g a p b e t w e e n c o r p o r a te in te rn a l fu n d s an d

d u ra b le g o o d s m a n u fa c tu r e r s . In th e n o n m a n u ­

c a p ita l e x p e n d it u r e s

fa c tu r in g s e c to r , p u b lic u tility o u t la y s e x p a n d e d

1 9 7 4 fo r

th e

fo u r th

w id e n e d

s u b s ta n tia lly

c o n s e c u t iv e

year.

As

in
a

at a rate c lo s e to 10 p er c e n t , e v e n th o u g h th e

r e s u lt, firm s h a d to turn to e x te r n a l s o u r c e s o f

u tilitie s w e r e s c a lin g

fu n d s to fin a n c e m o r e th a n $ 4 4 b illio n in to ta l

p e n d itu r e s th r o u g h o u t th e y e a r in r e s p o n s e to

b a c k th e ir p la n n e d e x ­

c a p ita l o u t la y s ( in c lu d in g in v e n to r y in v e s t m e n t)

sh a r p ly

d u r in g th e y e a r , $ 7 b illio n m o r e th an in 1 9 7 3

c o n s u m e r d e m a n d , a n d u n fa v o r a b le te r m s o f

an d $ 2 1 b illio n m o r e th an in 1 9 7 2 .

fin a n c in g .

r is in g

o p e r a tin g

co sts,

r e d u c tio n s

in

I n v e n to r y in v e s t m e n t in 1 9 7 4 w a s b e lo w th e
C a p ita l o u t la y s a n d in te r n a l fu n d s
Billons o f dollars

r ec o rd p a c e o f 1 9 7 3 , b u t it s till r e m a in e d h ig h
b y h is to r ic a l

sta n d a r d s.

A

la r g e

part o f

th e

in v e n to r y b u ild in g in th e first h a lf o f th e y e a r
w a s th e r e s u lt o f p r o d u c e r s ’ d e s ir e s to s t o c k p ile
m a te r ia ls that h a d b e e n , or m ig h t b e , in sh o rt
s u p p ly — e s p e c ia l l y s t e e l a n d c o a l. B u t a s th e
y e a r p r o g r e s s e d , in fla tio n a n d r is in g u n e m p lo y ­
m e n t a d v e r s e ly a ff e c t e d c o n s u m e r e x p e n d itu r e s ,
a n d s a le s f e ll o ff r a p id ly . T h e d e c lin e in d e m a n d
r e s u lte d in a s iz a b le in c r e a s e in in v e n to r ie s o f
fin ish e d g o o d s , d e s p ite v ig o r o u s e ffo r ts b y r e ­
ta ile r s to r e d u c e e x c e s s i v e s t o c k s . U n in te n tio n a l
in v e n to r y a c c u m u la tio n w a s m o s t a p p a re n t in
th e fo u r th q u arter in th e d u r a b le g o o d s in d u s ­
tr ie s , e s p e c ia l l y in n e w c a r s .
W h ereas

o u tla y s

fo r fix e d

in v e s tm e n t

in v e n to r ie s w e r e r is in g d u r in g m o s t o f
c o r p o r a te

ca sh

f lo w — r e ta in e d

c a p ita l c o n s u m p tio n

e a r n in g s

an d

1974,
p lu s

a llo w a n c e s — d e c lin e d o n

b a la n c e fo r th e y e a r . T h e r e d u c tio n in c a s h flo w
o c c u r r e d d e s p ite a la r g e in c r e a s e in b e fo r e -ta x
p r o fits, all o f w h ic h w a s a ttrib u ta b le to an e n o r ­
m o u s e x p a n s io n in in v e n to r y p r o fits— th a t i s ,
p rofits g e n e r a te d b y an in c r e a s e in th e v a lu e o f
in v e n to r ie s a s a r e s u lt o f in fla tio n .
Internal funds are undistributed profits (including foreign branch
profits) plus capital consumption allowances.
Flow of funds quarterly data for nonfinancial corporations at season­
ally adjusted annual rates. Data for 1975-11 are preliminary.




A lt h o u g h

in v e n to r y p ro fits are ta x e d th e s a m e a s a ll o th e r
e a r n in g s , th e y are o f f s e t b y in c r e a s e d c o s t s o f
in v e n to r ie s n e e d e d fo r r e p la c e m e n t a n d h e n c e

Recent Developments in Corporate Finance

465

C o m p o s it io n o f c a p ita l o u tla y s
Billions of dollars

Billions of dollars

10

Other fixed investment includes expenditures for multiunit and 1to 4-family residential construction.

Flow of funds quarterly data for nonfinancial corporations at season­
ally adjusted annual rates. Data for 1975-11 are preliminary.

d o n o t p r o v id e c o r p o r a tio n s w ith in te rn a l fu n d s

qu arter o f 1 9 7 5 — in part b e c a u s e o f th e im p r o v e ­

fo r a n y o th e r p u r p o s e .

m e n t in c a s h f lo w , b u t p r im a r ily b e c a u s e o f

W ith th e sh a rp r is e in p r ic e s — e s p e c ia l l y o f
f u e l— in

1974,

in v e n to r y

p ro fits b e c a m e

ex­

sh a rp r e d u c tio n s in c a p ita l o u t la y s . R e s p o n d in g
to th e a c c e le r a tin g d e c lin e in e c o n o m ic a c t iv it y ,

tr e m e ly la r g e a n d te n d e d to o b s c u r e th e p ic tu r e

in d u str ia l firm s— lik e th e u t ilitie s e a r lie r — b e g a n

o f fir m s’ liq u id ity . If in v e n to r y g a in s are e x ­

to s c a le d o w n or str e tc h o u t th e ir e x p e n d it u r e s .

c lu d e d fr o m r e p o r te d p r o fits, th e r e s u ltin g f ig ­

A s a r e s u lt, th e a n n u a l rate o f o u t la y s fo r p la n t

u r e — p ro fits fr o m cu rren t p r o d u c tio n — s h o w s a
s iz a b le d e c lin e in c o r p o r a te a fte r -ta x p ro fits fr o m
la te 1 9 7 3 to th e fo u r th q u arter o f 1 9 7 4 , th e first
s u s ta in e d d e c lin e

in s u c h p ro fits s in c e

1969.

C o r p o r a t e p r o fits
Billions o f dollars

R e ta in e d e a r n in g s (a d ju ste d to e x c lu d e in v e n ­
to r y p r o fits) f e ll e v e n m o r e sh a r p ly a s c o r p o r a ­
tio n s in c r e a s e d th e ir d iv id e n d p a y o u ts .

Profits before tax

G a in s fr o m in v e n to r y p ro fits d r o p p e d sh a r p ly
in e a r ly 1 9 7 5 , in part b e c a u s e firm s liq u id a te d
s to c k s a n d a ls o b e c a u s e m a n y o f th e m c h a n g e d
th e ir a c c o u n tin g m e th o d s fr o m fir s t-in , first-o u t

Inventory profits-

(F IF O ) to la s t - in , fir st-o u t (L IF O ) to m in im iz e
th e e f fe c t s o f in fla tio n o n r e p o r te d in v e n to r y
v a lu e s . T h e d e c lin e in in v e n to r y p ro fits c o n tr ib ­
u te d to a sh a rp r e v e r s a l in to ta l b e f o r e -ta x p rofits
of

n o n fin a n c ia l

q u a rters o f

th is

c o r p o r a tio n s
year.

th e

first t w o

N e v e r th e le s s,

in

a fte r -ta x

Before tax
Excluding inventory profits

p rofits a c tu a lly im p r o v e d , a s c o r p o r a te ta x l ia ­
b ilit ie s f e ll s ig n ific a n tly b e c a u s e o f th e sh arp

After tax
Excluding inventory profits

d r o p in in v e n to r y p ro fits an d th e r e lie f o b ta in e d
th r o u g h th e T a x R e d u c tio n A c t o f 1 9 7 5 .
T h e g a p b e t w e e n in te rn a l f u n d s a n d c a p ita l
e x p e n d itu r e s

narrow ed




m a r k e d ly

in

th e

first

Flow of funds quarterly data for nonfinancial corporations at season­
ally adjusted annual rates. Data for 1975-11 are preliminary.

466

and

Federal Reserve Bulletin □ August 1975

e q u ip m e n t

c o r p o r a tio n s

fo r th e th ird y e a r in a r o w , a c c o u n tin g fo r o n ly

b illio n b e t w e e n D e c e m b e r a n d

5 p er c e n t o f to ta l m a r k e t fu n d s r a is e d . T h e

M a r c h , a n d is e s t im a te d to h a v e d r o p p e d a n o th e r

m a jo r s u p p ly o f f u n d s c a m e fr o m d e b t m a r k e ts;

$ 1 . 9 b illio n in th e s e c o n d q u a rter. In a d d itio n ,

lo n g -te r m b o r r o w in g s in th e fo r m o f b o n d s a le s

dropp ed $ 3 .6

by

n o n fin a n c ia l

liq u id a tio n o f e x c e s s s to c k s o f in v e n to r ie s h a s

a n d m o r tg a g e d e b t p r o v id e d 4 2 p e r c e n t o f th e

p r o c e e d e d at a n a c c e le r a tin g rate s in c e th e b e ­

t o ta l, w h ile b a n k lo a n s a n d s a te s o f o p e n m a r k e t

g in n in g o f th e y e a r , N o n fin a n c ia l c o r p o r a tio n s

p a p er c o n tr ib u te d a p p r o x im a te ly 4 6 p e r c e n t.

r e d u c e d th e ir in v e n to r ie s at s e a s o n a lly a d ju ste d

T h e l o w v o lu m e o f s t o c k fin a n c in g r e s u lte d

a n n u a l r a te s o f m o r e th a n $ 1 3 b illio n in th e first

fr o m

q u arter a n d m o r e th a n $ 3 0 b illio n in th e s e c o n d

c o m p a n ie s to s e ll n e w s t o c k s at d e p r e s s e d m a r ­

(b a s e d o n p r e lim in a r y s e c o n d -q u a r te r fig u r e s ).

k e t p r ic e s . E x c e p t fo r a b r ie f r a lly e a r ly in 1 9 7 4 ,

th e in a b ility

o r u n w illin g n e s s

o f m any

s to c k p r ic e s g e n e r a lly m o v e d lo w e r th r o u g h o u t
th e y e a r , e x t e n d in g th e d e c lin e th at b e g a n in
E X T E R N A L
O F

1 9 7 3 . B y e a r ly O c to b e r

S O U R C E S

1 9 7 4 , th e c o m p o s it e

in d e x o f N e w Y o r k S t o c k E x c h a n g e c o m m o n

F U N D S

sh a r e s h a d r e a c h e d a 1 2 -y e a r l o w o f 3 3 . A n d

D e s p it e r is in g in te r e st r a tes a n d g r ea te r s e l e c ­

e v e n th o u g h it m o v e d u p s lig h t ly b e fo r e y e a r -

tiv it y

e n d , it w a s d o w n 3 0 p e r c e n t fo r th e y e a r a n d

on

th e

c o r p o r a tio n s

p art erf in v e s t o r s ,
in

1974

r a is e d

n o n fin a n c ia l

m ore

th a n

$77

d o w n a b o u t 4 5 p e r c e n t fr o m th e p e a k r e a c h e d

b illio n fr o m e x te r n a l s o u r c e s — a r e c o r d v o lu m e .

in

T h e s e fu n d s w e r e u s e d to fin a n c e th e g a p b e ­

s e le c t e d m a te r ia ls in sh o r t s u p p ly a n d o f e n -

t w e e n c a p ita l o u t la y s a n d in te rn a l fu n d s a n d fo r

e r g y -r e la te d in d u s tr ie s , a lm o s t a ll s e c to r s p a r ­

a c q u is itio n s o f liq u id a n d o th e r fin a n c ia l a s s e ts .

tic ip a te d in th e d e c lin e .

A s th e fig u r e s in T a b le 1 r e v e a l, n e t n e w e q u ity

1 9 7 3 . W ith th e e x c e p t io n o f p r o d u c e r s o f

A

fin a n c in g b y b u s in e s s c o r p o r a tio n s f e ll sh a r p ly

c o m b in a tio n

of

d e v e lo p m e n t s — c h ie fly

u n fa v o r a b le

e c o n o m ic

a c c e le r a t in g

in f la t io n ,

TABLE 1
N o n fin a n c ia l c o r p o r a tio n s : C o m p o s it io n o f fu n d s r a is e d in fin a n c ia l m a r k e ts
Amounts are shown in billions of dollars.

Equity

Total

Bonds

Mortgages

Bank loans

Period

Other credit
market
instruments

Amount

Per
cent

Amount

Per
cent

Amount

Per
cent

Amount

Per
cent

Amount

Per
cent

Amount

Per
cent

...................
...................
..................
....................
....................

39.5
46.8
55.0
67.1
77.1

100
100
100
100
100

5.7
11.4
10.9
7.4
4.1

14.4
24.4
19.8
11.0
5.3

19.8
18.9
12.5
11.0
21.3

50.1
40.4
22.7
16.4
27.6

5.2
11.4
15.6
16.1
10.9

13.2
24.4
28.4
24.0
14.1

5.6
4 .4
13.5
30.6
29.9

14.2
9.4
• 24.5
45.6
38.8

3.2
.7
2.5
2.0
11.0

8.1
1.5
4 .6
3.0
14.3

1974— 1 ............
11 ......... .
HI ......... .
IV .........

75.5
91.8
72.6
68.7

100
too
100
100

6.2
5.0

8.2
5.4

5.2

7.6

18.7
20.7
17.9
27.8

24.8
22.6
24.7
40.5

12.6
17.4
7.3
6.3

16.7
19.0
10.0
9 2

33.9
40.7
25.6
19.4

44.9
44.3
35.3
28.2

4.1
8.0
21.8
10.0

5.4
8.7
30.0
14 6

1975— 1 ............
II . . . . . . .

41.8
35.1

100
100

7.7
9.7

18.4
27.6

41.8
39.5

100.0
112.5

3.0
8.5

7.2
24.2

- 1 2 .0
- 1 9 .5

- 2 8 .7
- 5 5 .5

1.3
- 3 .1

3.1
—8.8

1970
1971
1972
1973
1974

N ote .— Net funds raised as shown in the flow of funds accounts. Quarterly data are at seasonally adjusted annual rates;
those for 1975-11 are preliminary. Other credit market instruments consist of commercial paper and loans from finance companies
and the U .S. Government.




467

Recent Developments in Corporate Finance

h ig h e r in te r e st r a te s , an d th e in c r e a s in g s la c k

c o s t s an d to s tr e n g th e n th e ir e q u ity str u c tu r e in

in e c o n o m ic a c t iv it y — c o n tr ib u te d to th e p o o r

r e s p o n s e to p r e s s u r e s fr o m th e r e g u la to r y a u ­

p e r fo r m a n c e o f th e s to c k m a r k e t la st y e a r . W ith

th o r itie s . F r e q u e n tly , h o w e v e r , th e s e firm s w e r e

sh o r t-te r m in te r e st r a tes r is in g r a p id ly a s a c o n ­

a b le to s e ll sh a r e s o n ly at p r ic e s b e l o w b o o k

s e q u e n c e o f str o n g c y c l i c a l c r e d it d e m a n d s , an

v a lu e , w h ic h te n d e d to d ilu te e x is t in g sh a r e ­

e s c a la t io n o f in fla tio n

h o ld e r s ’ e q u ity .

p r e m iu m s , a n d

a firm

m o n e ta r y p o l i c y , th e a ttr a c tiv e n e s s o f h ig h e r -

T h e u n a ttr a c tiv e n e s s o f th e e q u ity m a r k e ts a s
a s o u r c e o f lo n g - te r m fu n d s w a s an im p o r ta n t
fa c to r in e x p la in in g th e h e a v y v o lu m e o f c o r ­
p o r a te b o n d fin a n c in g s la st y e a r . N e t b o n d o f ­

S to c k m a r k e t p e r fo r m a n c e

fe r in g s o f n o n fin a n c ia l c o r p o r a tio n s — at c lo s e to
$ 2 1 b illio n — e x c e e d e d th e r e c o r d o f 1 9 7 0 a n d
m ig h t h a v e b e e n e v e n h ig h e r h a d n o t d e t e r io ­
r a tin g m a r k e t c o n d it io n s le d to c a n c e lla tio n s o f
s e v e r a l la r g e o ff e r in g s s c h e d u le d fo r th e sp r in g
a n d su m m e r .
A lt h o u g h th e v o lu m e o f n e w b o n d i s s u e s w a s
h e a v y d u r in g m o s t o f 1 9 7 4 , a n u m b e r o f fa c to r s
c o n tr ib u te d to a d e te r io r a tio n in b o n d m a r k e t
c o n d itio n s a s th e

year p ro g ressed .

A s n o te d

e a r lie r , th e r a p id r is e in sh o r t-te r m

ra tes a t­

tr a cte d m a n y in v e s to r s to m o n e y m a r k e t in str u ­
m e n ts . In a d d itio n , in th e sp r in g th e fin a n c in g
d iffic u ltie s o f t w o la r g e b a n k s , th e o m i s s i o n o f
a d iv id e n d p a y m e n t b y a la r g e p u b lic u t ilit y ,
a n d r u m o r s o f th e d iffic u ltie s f a c e d b y s o m e
o th e r firm s le d m a r k e t in v e s to r s to b e c o m e in ­
c r e a s in g ly c o n c e r n e d a b o u t th e a b ility o f c o r ­
p o r a tio n s to s e r v ic e th e ir d e b t o b l ig a t io n s .
As

a

r e s u lt,

in v e s to r

p r e fe r e n c e s

s h ifte d

to w a r d h ig h e r -q u a lity s e c u r it ie s , a n d a w id e rate
sp r e a d

d e v e lo p e d

b e tw e e n

y ie ld s

on

p r im e

q u a lity in str u m e n ts a n d th o s e w ith lo w e r c r e d it
r a tin g s. F r o m a d if fe r e n c e o f a p p r o x im a t e ly 7 5
b a s is p o in ts at th e b e g in n in g o f 1 9 7 4 , th e sp r e a d
b e t w e e n y ie ld s

on

season ed

c o r p o r a te is s u e s

rated B a a a n d t h o s e o n p r im e A a a i s s u e s r o s e
to m o r e th a n 1 6 0 b a s is p o in ts b y th e y e a r -e n d .
R e fle c tin g t h e s e d e v e lo p m e n t s , l e s s th a n 6 p er
r isk e q u ity m a r k e t in str u m e n ts w a s sh a r p ly d i ­

c e n t o f th e g r o s s n e w b o n d is s u e s s o ld in 1 9 7 4

m in is h e d . M o r e o v e r , d u r in g m u c h o f th e y e a r

c a rr ie d r a tin g s o f B a a or l e s s , a s c o m p a r e d w ith

th e m a r k e t w a s d istu r b e d b y e v e n t s a s s o c ia t e d

12 p er c e n t o n a v e r a g e in th e p r e c e d in g 5 y e a r s .

w ith th e e n e r g y sh o r ta g e a n d b y th e p r e v a ilin g

M o r e o v e r , m o s t o f th e lo w e r -r a te d is s u e s w e r e
s o ld b y u t ilitie s th at f a c e d a la r g e v o lu m e o f

p o lit ic a l u n c e r ta in tie s .
A lm o s t h a lf o f a ll c o m m o n s to c k a n d v ir tu a lly
a ll p r e fe r r e d s to c k is s u e s s o ld

in

1974 w ere

m a tu r in g d e b t a n d th u s c o u ld n o t e a s i ly p o s t ­
p o n e fin a n c in g s .

th o s e o f th e e le c t r ic a n d g a s u t ilitie s . D e s p it e

T h e in c r e a s e d s e l e c t iv i t y o f in v e s t o r s , c o m ­

lo w e r sh a re p r ic e s , u t ilit ie s w e r e fo r c e d to s e e k

b in e d w ith a r e lu c ta n c e o f is s u e r s to o ffe r v e r y

e q u it y fu n d s to fin a n c e r a p id ly r is in g e x p a n s io n

lo n g -te r m d e b t at h ig h y i e l d s , w a s r e fle c te d in




468

Federal Reserve Bulletin □ August 1975

TABLE 2
G r o s s is s u e s o f p u b lic ly o ffe r e d c o r p o r a te b o n d s
Firms with ratings
changed (M oody’s)

Maturity (in years)

M oody’s rating
Total
Aaa
& Aa

Year

Billion
dollars

Not
rated

Baa &
below

A

Less than
101

Per cent of total

20
or more

10-19

Decreases

Increases

Number

Per cent of total

1969
1970

12.7
25.4

41
48

23
32

22
10

14
10

15
22

3
3

82
75

11
15

20
21

1971
1972

24.9
18.4

44
41

21
18

15
9

20
32

7
25

12
5

81
70

14
19

29
25

1973
1974

13.6
25.3

55
57

26
29

4
6

15
8

7
29

2
11

90
60

21
39

27
61

1975-H1

22.7

60

31

7

2

25

22

53

42

24

UnoJudes serial bond issues.

a

s h o r te n in g

of

m a tu r itie s

on

new

is s u e s .

p a p er e x p a n d e d b y $ 5 . 4 b illio n in 1 9 7 4 — a lm o s t

W h e r e a s in th e 1 9 6 9 - 7 3 p e r io d n e a r ly 8 0 p er

t w ic e th e p r e v io u s r e c o r d p a c e o f

c e n t o f a ll n e w b o n d o f fe r in g s c a rr ie d m a tu r itie s

1970.

o f 2 0 y e a r s or m o r e , 6 0 p er c e n t o f su c h is s u e s

c o m m e r c ia l p a p er m a r k e t d e m a n d e d la r g e risk

h a d lo n g m a tu r itie s in 1 9 7 4 . In fa c t, a h e a v y

p r e m iu m s fr o m b o r r o w e r s , a n d firm s w ith lo w e r

c o n c e n tr a tio n o f is s u e s la st y e a r h a d te r m s o f

c r e d it r a tin g s w e r e u n a b le to o b ta in fu n d s fr o m

l e s s th an 10 y e a r s .

th is s o u r c e .

L ik e

th e b o n d

m a r k e ts ,

1 9 6 9 and

h o w e v e r , th e

T h e d e v e lo p m e n t o f su c h a tw o -tie r m a r k e t

T h e la r g e d e m a n d s fo r sh o r t-te r m c r e d it r e la ­

fo r lo n g -te r m d e b t m a d e it e x c e e d in g l y d iffic u lt
c r e d it

tiv e to th e m o d e r a te g r o w th in a v a ila b le s u p p lie s
p u t s tr o n g u p w a r d p r e s s u r e s o n in te r e st r a tes

r a tin g s to b o r r o w . M o r e o v e r , as d e b t b u r d e n s

d u r in g m o s t o f la st y e a r . C o m m e r c ia l b a n k s

fo r c o r p o r a tio n s
expand ed

w ith

and

le s s

th an

b u s in e s s

p r im e

a c tiv ity

d e c lin e d ,

in c r e a s e d th e ir p r im e le n d in g r a tes m o r e th an

M o o d y ’s I n v e s to r s S e r v ic e lo w e r e d th e c r e d it

2 p e r c e n ta g e p o in ts to a r e c o r d

r a tin g s o f m o r e th an 6 0 firm s in 1 9 7 4 , in c o n tr a st

b e t w e e n J a n u a ry a n d J u ly a n d a ls o tig h te n e d

to o n ly 21

in th e p r e v io u s r e c e s s io n y e a r o f

su b s ta n tia lly th e ir n o n p r ic e te r m s o f le n d in g .

1 9 7 0 . In lig h t o f u n fa v o r a b le m a r k e t c o n d it io n s ,
m a n y o f th e s e firm s d e c id e d to p o s t p o n e , or

L a te

c a n c e l, p r e v io u s ly s c h e d u le d b o n d is s u e s .

d e v e lo p in g

The

d e te r io r a tio n

in

lo n g -te r m

m a r k e ts

1 9 7 4 c o n tr ib u te d to a fu rth er in c r e a s e

in

in th e

a lr e a d y b u lg in g d e m a n d s fo r c r e d it at c o m m e r ­

12 p er c e n t

in

th e

year,

how ever,

th e

in c r e a s in g ly

r e s tr ic tiv e le n d in g p r a c tic e s o f b a n k s an d th e
w eak n ess

in

e c o n o m ic

a c tiv ity

b e g a n to d a m p e n th e g r o w th in sh o r t-te r m c o r ­
p o r a te

b o r r o w in g s .

S u b s e q u e n t ly ,

g r o w th

in

b u s in e s s lo a n s c a m e to a h a lt a n d sh o r t-te r m

c ia l b a n k s . S h o r t-te r m b a n k lo a n s to n o n fin a n ­

in te r e st ra tes d e c lin e d s h a r p ly , a s c o r p o r a tio n s

c ia l c o r p o r a tio n s

b e g a n to

ro se

by

a p p r o x im a te ly

$30

r estr u c tu r e

th e ir b a la n c e

s h e e ts

by

b illio n , a lm o s t e q u a lin g th e r e c o r d b o r r o w in g

r e p a y in g b a n k lo a n s w ith fu n d s r a is e d th r o u g h

of

s a le s o f lo n g -te r m s e c u r itie s .

1973

w h en

su ch

b o o m in g b u s in e s s

lo a n s w e r e b o ls te r e d b y
a r tific ia lly

A s in fla tio n an d th e h ig h e r c o s t o f c r e d it-

r e s tr a in e d p r im e rate. In a d d itio n , firm s w ith

m a r k e t b o r r o w in g p u t p r e ssu r e o n c a s h p o s it io n s

good

c r e d it

a c tiv ity

r a tin g s

so u g h t

an d

an

sh o r t-te r m

fu n d s

in

1974,

o th e r sh o r t-te r m

lia b ilit ie s

o f b u s i­

th r o u g h s a le s o f c o m m e r c ia l p a p er; f o l lo w in g

n esses

3 y e a r s o f c o n t r a c tio n , o u ts ta n d in g o p e n -m a r k e t

g r o w th o f trad e d e b t in th e first t w o q u a rters




a ls o

expand ed

r a p id ly .

The

rate

of

469

Recent Developments in Corporate Finance

S e le c te d in te r e s t r a te s

s t o c k is s u e s a n d r e te n tio n s o f p ro fits h a v e
a m o u n te d to o n ly $ 1 6 6 b illio n . T h e sh arp in ­
c r e a s e in d e b t fin a n c in g la s t y e a r r e s u lte d in a
fu rth er r e d u c tio n in e q u it y c u s h io n s . F o r m a n u ­
fa c tu r in g c o r p o r a tio n s — th e o n ly g r o u p o f n o n ­
fin a n c ia l c o r p o r a tio n s fo r w h ic h c o m p le t e b a l­
ance

Measures of
risk premium

Bond yields:
Moody’s Baa

sh eet

d a ta

are

a v a ila b le

on

a

cu rren t

b a s is — th e r e la tiv e sh a re o f s t o c k h o ld e r s ’ e q u ity
h a d d e c lin e d to s lig h t ly m o r e th a n 5 0 p e r c e n t
o f to ta l a s s e ts b y th e e n d o f 1 9 7 4 , c o m p a r e d
w ith 6 1

p er c e n t in

1965.

F u r th e r m o r e , th e

p r o n o u n c e d d e c lin e in s to c k p r ic e s d u r in g 1 9 7 3
a n d 1 9 7 4 sh a r p ly e r o d e d th e m a r k e t v a lu a tio n
o f o w n e r s h ip c la im s .
Moody’s Aaa

TABLE 3
C a p ita l stru ctu re o f m a n u fa c tu r in g c o r p o r a tio n s
In billions of dollars, unless otherwise noted

Aaa utilities
New issue

End
of
year
Bank prime rate
Commercial paper
4 to 6-month

Monthly averages. M oody’s Investors Service bond yields for sea­
soned Baa and Aaa corporate issues; prime commercial paper, dealer

offering rates; Aaa utility, weighted averages on new publicly offered
bonds rated Aaa, Aa, and A by M oody’s and adjusted to an Aaa utility
basis.

o f la st y e a r w a s m o r e th an h a lf a g a in a s la r g e

Total
assets
(1)

Less:
Liabili­
tie s
(2)

Col. 3
Equals:
col. 1
Stockholders’
equity
(per cent)
(3)
(4)

1965
1966
1967
1968
1969

....
....
....
....
....

359.1
402.3
437.2
485.9
543.7

140.9
165.5
182.9
212.7
246.6

218.1
236.8
254.3
273.2
297.1

60.8
58.9
58.2
56.2
54.6

1970
1971
1972
1973
1974

....
....
....
....
....

578.2
612.8
663.4
742.3
841.1

267.4
285.7
310.3
355.9
413.7

310.8
327.1
353.1
386.4
427.4

53.8
53.4
53.2
52.1
50.8

S o u r c e .— Federal Trade Commission, Quarterly Financial
Report for Manufacturing Corporations. Data for 1974 have
been converted by F.R. to adjust for changes in series coverage
and account classification from previous years.

a s in 1 9 7 3 . S u c h g r o w th s l o w e d , h o w e v e r , as
b u s in e s s a c tiv it y s la c k e n e d ; in th e fo u r th q u a r ­

A fu rth er r e s u lt o f th e g r o w th in d e b t a n d

ter trad e d e b t c o n tr a c te d sh a r p ly , a n d in th e first

th e s im u lt a n e o u s r is e in in te r e st ra tes h a s b e e n

h a lf o f 1 9 7 5 it f e ll s u b s ta n tia lly fu rth er.

a s iz a b le in c r e a s e in n e t in te r e st p a id b y n o n fi­
n a n c ia l

c o r p o r a tio n s .

In

1974

su ch

in te r e st

a m o u n te d to $ 2 3 b illio n — a lm o s t a f iv e f o ld in ­
IM P A C T S

O N

F IN A N C IA L
The

heavy

c r e a s e o v e r th e

C O R P O R A T E

S T R U C T U R E

r e lia n c e

on

borrow ed

1 9 6 4 to ta l. A t th e s a m e tim e

c o r p o r a te h o ld in g s o f liq u id a s s e t s r o s e m u c h
le s s r a p id ly th a n to ta l lia b ilit ie s , m a k in g it m o r e
fu n d s

that

d iffic u lt fo r firm s to carry th e ir d e b t b u r d e n s.

o c c u r r e d in 1 9 7 4 w a s an e x t e n s io n o f tr en d s that

A lt h o u g h c o r p o r a tio n s a d d e d m o d e r a te ly to th eir

h a d b e g u n e a r lie r . S in c e th e m i d - 1 9 6 0 ’s n o n ­

h o ld in g s o f liq u id a s s e t s — p r im a r ily th r o u g h a c ­

fin a n c ia l firm s h a v e in c r e a s e d th e ir c a p ita l m a r ­

q u is itio n s o f in te r e s t-e a r n in g tim e d e p o s it s a n d

k e t d e b t b y n e a r ly $ 3 8 5 b illio n w h ile n e t n e w

c o m m e r c ia l p a p er — sh o r t-te r m d e b t g r e w at a




470

Federal Reserve Bulletin □ August 1975

m a te d to h a v e b e e n l e s s th a n $ 3 9 b illio n at a

M e a s u r e s o f c o r p o r a t e liq u id it y
Per cent

s e a s o n a lly a d ju ste d a n n u a l r a te , or r o u g h ly h a lf
th e rate o f la st y e a r . W ith th e ir fin a n c in g n e e d s
r e d u c e d , firm s h a v e b e e n a b le to c o n c e n tr a te o n
r e b u ild in g liq u id ity p o s it io n s a n d fu n d in g sh o r t­

Short-term debt
Bonds

term d e b t. C o n s e q u e n t ly , b e t w e e n J a n u a ry a n d
J u ly th e r e w a s a n e t r e d u c tio n o f a lm o s t $ 7 . 5
b illio n in b u s in e s s lo a n s fr o m c o m m e r c ia l b a n k s
a n d o u ts ta n d in g n o n fin a n c ia l c o m m e r c ia l p a p e r .
T h is r e d u c tio n w a s a c c o m p a n ie d b y r e c o r d -

Liquid assets
Current liabilities

b r e a k in g v o lu m e s o f n e w c o r p o r a te b o n d is s u e s ,
a s firm s s o u g h t to le n g th e n th e m a tu r ity o f th eir
d e b t. In th e first t w o q u a r te r s, g r o s s is s u e s o f
p u b lic ly

o ffe r e d

and

p r iv a te ly

p la c e d

bonds

a v e r a g e d a r e c o r d $ 4 . 3 b illio n p er m o n th , c o m ­
Liquid assets are currency, demand and time deposits, U .S. Govern­
ment securities, State and local obligations, and open-market paper.
Current liabilities are short-term bank loans, trade debt, open-market
paper, finance company loans, U .S . Government loans, and profit taxes
payable. Short-term debt consists of short-term bank loans plus openmarket paper.
Flow of funds quarterly data for nonfinancial corporations, not sea­
sonally adjusted. Data for 1975-11 are preliminary.

p a r e d w ith $ 2 . 6 b illio n p e r m o n th in 1 9 7 4 . T h e
h e a v y v o lu m e o f c o r p o r a te o f fe r in g s w a s o n e
fa c to r th at lim ite d th e d e c lin e in lo n g - te r m in ­
te r e st r a te s; n e v e r t h e le s s , b o n d y ie ld s r e c e n tly
h a v e b e e n a p p r o x im a te ly 1 0 0 b a s is p o in ts b e lo w
th e ir 1 9 7 4 p e a k s , a n d th e y h a v e r e m a in e d r e la ­

m u c h fa ste r p a c e . C o n s e q u e n t ly , c o r p o r a te l i ­

t iv e ly s te a d y d e s p it e th e c o n tin u e d la r g e v o lu m e

q u id ity , a s m e a s u r e d b y th e r a tio o f liq u id a s s e ts

o f is s u e s o ffe r e d in th is m a r k e t.

to cu rren t lia b ilit ie s , f e ll to a n e w lo w in 1 9 7 4 .

A lth o u g h

th e

m a jo r

sh a re

to

of

recen t b on d

T h e d e c lin e w a s a c o n tin u a tio n o f th e p o s tw a r
d o w n tr e n d th at h a d b e e n te m p o r a r ily in te rr u p ted

in c r e a s in g n u m b e r o f is s u e s ra ted A a n d B a a

by

w e r e b r o u g h t to m a r k e t in th e s e c o n d q u arter.

b a la n c e - s h e e t

r e str u c tu r in g

in

1971

an d

p r im e

T h is s u g g e s t s th at th e r e h a s b e e n

1972.
In

be

of

is s u e s c o n tin u e s

sh o r t,

c o r p o r a te

b a la n c e

sh ee ts

w ere

p rovem en t

in

th e

fin a n c in g

q u a lity ,

an

s o m e im ­

o p p o r tu n itie s

of

w e a k e n e d s u b s ta n tia lly b y th e la r g e a m o u n ts o f

lo w e r -r a te d c o r p o r a tio n s . I n d e e d , s in c e th e b e ­

d e b t— p a r tic u la r ly sh o r t-te r m d e b t— is s u e d d u r ­

g in n in g o f th e y e a r th e r e h a v e b e e n

in g 1 9 7 3 a n d 1 9 7 4 . T h e u n fa v o r a b le e f f e c t s o f

i n d ic a tio n s o f s u c h im p r o v e m e n ts in th e c o r ­

th e s e fin a n c in g p a tte rn s o n c o r p o r a te liq u id it y ,

p o r a te fin a n c ia l e n v ir o n m e n t . D o w n g r a d in g o f

several

d e b t-t o - e q u ity r a tio s , a n d th e m a tu r ity stru ctu re

c o r p o r a te b o n d r a tin g s a n d p o s tp o n e m e n t s o f

o f c o r p o r a te c a p ita l sh a r p ly r e d u c e d th e fin a n ­

n e w is s u e s h a v e b e e n m u c h l e s s p r e v a le n t th an

c ia l fle x ib ilit y o f m a n y c o r p o r a tio n s a n d c o n ­

la st y e a r , a n d m a n y firm s w ith im p r o v e d liq u id ­

tr ib u te d to th e n u m e r o u s d o w n g r a d in g s in c r e d it

ity p o s it io n s h a v e h a d th e ir c r e d it r a tin g s r a is e d

r a tin g s th at o c c u r r e d la s t y e a r .

or r e in s ta te d . T h e n u m b e r a n d v o lu m e o f c u t ­
b a c k s in c a p ita l s p e n d in g p la n s , p a r tic u la r ly b y
th e

u t ilit ie s ,

have

a g e n c ie s h a v e b e e n
R E S T R U C T U R IN G
A s a r e su lt o f th e

IN

1975

la r g e c u tb a c k s

s u b s id e d .

And

r e g u la to r y

a llo w in g m o r e rap id a n d

g r ea te r rate in c r e a s e s ; a s a r e su lt o f s u c h in ­

in c a p ita l

c r e a s e s , th e e a r n in g s p o s itio n

o f th e u t ilit ie s

e x p e n d itu r e s a n d in v e n to r y liq u id a tio n in th e

a p p e a r s to h a v e s t r e n g th e n e d , im p r o v in g s o m e ­

first tw o q u a rters o f 1 9 7 5 , to ta l c o r p o r a te d e ­

w h a t th e ir a c c e s s to fin a n c ia l m a r k e ts .

sh a r p ly

In a d d itio n , th e d e c lin e in in te r e st ra tes a n d

fr o m 1 9 7 4 l e v e l s . I n d e e d , in th e first 6 m o n th s

p r o g r e s s in r e d u c in g in fla tio n h a v e c o n tr ib u te d

th e

to a m a r k e d im p r o v e m e n t in e q u it y m a r k e ts .

m a n d s o n c r e d it m a r k e ts h a v e fa lle n
v o lu m e

m a r k e ts b y

of

n e t fu n d s

n o n fin a n c ia l




r a is e d

in

fin a n c ia l

c o r p o r a tio n s is

e s ti­

D u r in g th e first h a lf o f 1 9 7 5 s to c k p r ic e s r o se

Recent Developments in Corporate Finance

b y a s m u c h a s 5 0 to 6 0 p er c e n t fr o m th e ir 1 9 7 4

471

c o r p o r a tio n s w ith l e s s th a n p r im e r a tin g s m u s t

l o w s . C o n c u r r e n tly , th e v o lu m e o f n e w e q u ity

w a it fo r fu rth er im p r o v e m e n t s in c a p ita l m a r k e ts

is s u e s e x p a n d e d s ig n ific a n tly , w ith u t ilit ie s in

b e fo r e is s u in g lo n g -te r m d e b t.

p a r ticu la r ta k in g a d v a n ta g e o f r is in g sh a re p r ic e s

A n d , e v e n th o u g h th e fin a n c ia l p o s it io n o f

to s e ll s t o c k s a n d th u s r e d u c e th e ir d e b t -to -e q -

m a n y firm s h a s im p r o v e d , th e r a tio o f sh o rt-

u ity r a tio s . A lth o u g h m a jo r s t o c k in d ic e s are

to lo n g -t e r m

s till m o r e th a n 2 0 p e r c e n t b e lo w th e ir p e a k s

h is to r ic a l sta n d a r d s.

d e b t r e m a in s r e la t iv e ly h ig h b y

in 1 9 7 3 , a m o d e r a te in c r e a s e in s to c k i s s u e s ,

n e s s e s h a v e in c r e a s e d th e ir h o ld in g s o f c a s h a n d

a lo n g w ith c o n tin u e d la r g e o ff e r in g s o f l o n g ­

m a r k e ta b le s e c u r it ie s , a c q u is itio n s o f su b s ta n tia l

A l s o , w h ile

m a n y b u s i­

and

a m o u n ts o f liq u id a s s e t s p r o b a b ly w ill n o t o c c u r

str e n g th e n c o r p o r a te b a la n c e s h e e t s th r o u g h th e

u n til c o r p o r a te p r o fits h a v e r e c o v e r e d fr o m th e ir

te rm

d e b t,

m ay

h e lp

to

r es tr u c tu r e

r e m a in d e r o f 1 9 7 5 .

r e c e n t d e c lin e s . O n b a la n c e , th e r e fo r e , it a p ­

D e s p it e th e s e

im p r o v e m e n t s , h o w e v e r , th e

p e a r s th at c o r p o r a tio n s h a v e o n ly p a r tia lly r e ­

m a r k e ts c o n tin u e to r e fle c t th e p r e fe r e n c e o f

c o v e r e d th e g r o u n d lo s t in 1 9 7 4 a n d m a y fin d

c r e d ito r s fo r h ig h -q u a lity o b lig a t io n s . R is k p r e ­

it n e c e s s a r y to c o n tin u e r e str u c tu r in g th r o u g h

m iu m s h a v e f a lle n o n ly s lig h t ly , an d n u m e r o u s

th e r e m a in d e r o f 1 9 7 5 .




□

472

S t a f f E c o n o m ic S tu d ie s

T h e r e s e a r c h s ta f f s o f th e B o a r d o f G o v e r n o r s

In a l l c a s e s th e a n a l y s e s a n d c o n c lu s io n s s e t

o f th e F e d e r a l R e s e r v e S y s te m a n d o f th e F e d ­

f o r th a r e th o s e o f th e a u th o r s a n d d o n o t n e c e s ­

e r a l R e s e r v e B a n k s u n d e r ta k e s t u d i e s th a t c o v e r

s a r il y

a w id e r a n g e o f e c o n o m i c a n d f in a n c ia l s u b ­

G o v e r n o r s , b y th e F e d e r a l R e s e r v e B a n k s , o r

in d ic a te

co n cu rren ce

by

th e B o a r d

of

je c ts , a n d o th e r s ta ff m e m b e rs p r e p a r e p a p e r s

b y th e m e m b e r s o f th e ir s ta ffs .

r e l a t e d to s u c h s u b je c ts . In s o m e in s ta n c e s th e

S i n g le c o p i e s o f th e f u ll te x t o f e a c h o f th e

F e d e r a l R e s e r v e S y s t e m f in a n c e s s i m il a r s t u d i e s

s t u d i e s o r p a p e r s s u m m a r iz e d in th e B u l l e t i n

b y m e m b e r s o f th e a c a d e m i c p r o f e s s io n .

a r e a v a i l a b l e in m im e o g r a p h e d f o r m . T h e l is t

F r o m tim e to tim e th e r e s u lts o f s t u d i e s th a t

o f F e d e r a l R e s e r v e B o a r d p u b l i c a t i o n s a t th e

a r e o f g e n e r a l i n t e r e s t to th e e c o n o m ic s p r o f e s ­

back o f each B

s io n a n d to o th e r s a r e s u m m a r iz e d — o r th e y m a y

s e c tio n e n t it l e d “ S t a f f E c o n o m ic S t u d i e s 99 th a t

b e p r i n t e d in f u l l — in th is s e c tio n o f th e F e d e r a l

e n u m e r a te s th e s t u d i e s f o r

R eserve B u l l e t in .

c u r r e n tly a v a i l a b l e in th a t f o r m .

S T U D Y

u l l e t in

in c lu d e s a s e p a r a t e
w h ic h

c o p ie s a r e

S U M M A R Y

T H E P E R F O R M A N C E O F IN D IV ID U A L B A N K H O L D IN G C O M P A N IE S
A r t h u r G. F ra a s — Formerly on the staff of the Board of Governors;
presently Assistant Professor of Econom ics, U .S . Naval Academ y, Annapolis, Maryland.

P repared as a staff p a p e r in June 1974.
A c o r n e r s to n e o f p u b lic p o l i c y to w a r d th e b a n k

T h e m e th o d o f a p p r o a c h a d o p te d u s e s s i n g l e ­

h o ld in g c o m p a n y m o v e m e n t h a s b e e n th e p r o p ­

e q u a tio n r e g r e s s io n m o d e ls

o s it io n that h o ld in g c o m p a n y a ffilia tio n le a d s to

e x p la in v a r ia tio n s in a s e le c t e d s e t o f p e r fo r m ­

in an

a tte m p t to

c h a n g e s in b a n k p e r fo r m a n c e that p r o m o te th e

ance

p u b lic in te r e st. T h is e x p e c ta t io n h a s n o t b e e n

fe r e n c e s in lo c a l m a r k e ts , th e s e m o d e ls c o n ta in

b o r n e o u t, h o w e v e r , b y s tu d ie s that c o m p a r e th e

s e v e r a l in d e p e n d e n t v a r ia b le s to r e p r e se n t lo c a l

p e r fo r m a n c e o f h o ld in g c o m p a n y a ffilia te s a s a

e c o n o m ic c o n d it io n s . In a d d itio n , a se t o f in d e ­

group

p e n d e n t v a r ia b le s — u s in g

w ith

th e

p e r fo r m a n c e

of

in d e p e n d e n t

m ea su res.

In

order

to

th e

correct

fo r d i f ­

s ta tis tic a l t e c h ­

b a n k s . T h e a b s e n c e o f a n y m a r k e d c h a n g e in

n iq u e

p e r fo r m a n c e m a y r e fle c t su b s ta n tia l, o ff s e ttin g

a ffilia tio n w ith in d iv id u a l b a n k h o ld in g c o m p a ­

d iff e r e n c e s in th e o p e r a tio n s o f in d iv id u a l h o ld ­

n ie s .

in g c o m p a n ie s th at a r is e b e c a u s e o f d iff e r e n c e s

r e s u lts a s s o c ia t e d w ith th e la tter se t o f v a r ia b le s

of

dum m y

F rom

v a r ia b le s — r e p r e se n ts

bank

th e s ta n d p o in t o f th is s tu d y , th e

in m a n a g e m e n t p h ilo s o p h y . T h is stu d y e x a m ­

in d ic a te th e d e g r e e o f d iffe r e n c e in p e r fo r m a n c e

in e s th e e x te n t o f d if fe r e n c e s in p e r fo r m a n c e o f

am ong

in d iv id u a l h o ld in g c o m p a n ie s .

T h e s e r e g r e s s io n m o d e ls w e r e a p p lie d s u c c e s ­




in d iv id u a l

bank

h o ld in g

c o m p a n ie s .

473

s i v e ly to s a m p le s o f a ll b a n k s fr o m th e S ta te s

to r e je c t th e h y p o t h e s is th at a ll h o l d in g - c o m ­

o f O h io an d C o lo r a d o w ith $ 1 0 m illio n to $ 7 5

p a n y -a ffilia te d b a n k s c a n b e tr ea te d a s e le m e n t s

m illio n in d e p o s it s .

o f a s in g le

T h e fin d in g s in d ic a te sig n ific a n t d iff e r e n c e s

m ea su res

g r o u p . M a n y o f th e p e r fo r m a n c e

in d ic a te
w ith

that

p a r ticu la r

o p e r a tio n s
h o ld in g

of

banks

in th e p e r fo r m a n c e o f in d iv id u a l h o ld in g c o m ­

a ffilia te d

c o m p a n ie s

p a n ie s . T h e s e d if fe r e n c e s are p a r tic u la r ly a p ­

d iffe r s ig n ific a n tly fr o m

p a r e n t in th e p o r t f o lio c h o i c e s o f th e a ffilia te s

b a n k s a n d o f b a n k s a ffilia te d w ith o th e r h o ld in g

th o s e o f in d e p e n d e n t

o f in d iv id u a l h o ld in g c o m p a n ie s — fo r e x a m p le ,

c o m p a n ie s . A s a m a tter o f p u b lic p o l i c y w ith

in th e p r o p o r tio n s o f to ta l a s s e ts h e ld a s in s t a l­

r e s p e c t to

m e n t lo a n s , r e s id e n tia l rea l e s ta te lo a n s , a n d

th e s e r e s u lts s u g g e s t th e im p o r ta n c e o f a s s e s s in g

o b lig a t io n s o f S ta te a n d lo c a l g o v e r n m e n ts . A s

th e o p e r a tin g

a r e s u lt, it is p o s s ib le in a n u m b e r o f in s ta n c e s

com p an y.




s p e c ific

h o ld in g

c h a r a c te r is tic s

c o m p a n ie s ,
o f each

th e n ,

h o ld in g
□

474

S ta te m e n ts t o C o n g re s s

S ta te m e n t

M em b er,

c r e d it is m a d e a v a ila b le to e q u a lly c r e d itw o r th y

o f th e F e d e r a l R e s e r v e

p e o p le o n a ju st a n d fa ir b a s is . T h e d e n ia l o f

S y s te m , b e f o r e th e S u b c o m m it t e e o n C o n s u m e r

c r e d it b a s e d u p o n a p e r s o n ’s m e m b e r s h ip in a

B o a rd

by

J e ffr e y

o f G overn ors

M.

B u ch er,

A f f a i r s o f th e C o m m i t te e o n B a n k i n g , H o u s i n g ,

group

a n d U r b a n A f f a i r s , U .S . S e n a t e , J u ly 1 7 , 1 9 7 5 .

q u a lific a tio n s w o r k s to th e e c o n o m ic d is a d v a n ­

w ith o u t

r e fe r e n c e

to

th at

in d iv id u a l’s

ta g e o f a p p lic a n ts a n d c r e d ito r s a lik e .
It is b e c a u s e w e b e l ie v e that fa ir a n d e q u a l
I a p p r e c ia te th e o p p o r tu n ity to a p p ea r b e fo r e

a c c e s s to c r e d it is a m a tter o f g r ea t im p o r ta n c e

o f th e

th at th e B o a r d r e c o m m e n d s th at th e C o n g r e s s

le g is la t io n

d e la y e n a c tm e n t o f th is le g is la t io n u n til th e r e

d e a lin g w ith th e E q u a l C r ed it O p p o r tu n ity A c t

h a s b e e n su ffic ie n t o p p o r tu n ity to b e n e fit fr o m

an d c o n s u m e r le a s in g . T h r e e b ills are b e fo r e th e

e x p e r ie n c e

c o m m it te e that w o u ld a m e n d th e E q u a l C r ed it

u n d e r th e s e x a n d m a r ita l sta tu s p r o v is io n s o f

O p p o r tu n ity A c t — H .R . 6 5 1 6 , S . 4 8 3 , a n d S .

th e E q u a l C r e d it O p p o r tu n ity A c t , w h ic h g o e s

th is s u b c o m m itte e
B oard

1927.

of

to o ffe r

G overnors

Two

on

le g is la t iv e

c o n s u m e r le a s in g — S .

th e v i e w s

prop osed

p r o p o s a ls
1 9 0 0 an d S .

to

r e g u la te

1 9 6 1 — are

in

im p le m e n t in g

in to e f fe c t in O c to b e r

th e

r e g u la tio n s

1 9 7 5 . In th e c o u r s e o f

o u r p r e p a r a tio n o f th is r e g u la tio n w e h a v e d e ­

a ls o u n d e r c o n s id e r a tio n . I w o u ld first lik e to

v e lo p e d an in c r e a s e d a p p r e c ia tio n o f th e m a n y

a d d r e ss m y s e l f to th e s u g g e s t e d a m e n d m e n ts to

c o m p le x it ie s in v o l v e d in im p le m e n t in g th e r e ­

th e E q u a l C r e d it O p p o r tu n ity A c t.

q u ir e m e n ts o f th is ty p e o f le g is la t io n . B a s e d

T h e th r e e E q u a l C r e d it O p p o r tu n ity b ills w o u ld

u p o n o u r e x p e r ie n c e to d a te , w e f e e l th at th e

a d d n e w c la s s e s to th e e x is t in g c a t e g o r ie s o f s e x

E q u a l C r e d it O p p o r tu n ity

an d

ad d

e x te n d e d w ith o u t a th o r o u g h e x p lo r a t io n , d e l in ­

th e c a t e g o r ie s o f r a c e , c o lo r , r e lig io n , n a tio n a l

e a t io n , an d r e s o lu tio n o f th e b a s ic i s s u e s p r e se n t

o r ig in , a n d a g e . S . 1 9 2 7 w o u ld a m e n d th e A c t

in r e g u la tin g t h e s e a r e a s.

m a r ita l

s ta tu s .

H .R .

6516

w o u ld

to in c lu d e n o t o n ly t h o s e c a t e g o r ie s c o v e r e d b y

A c t s h o u ld

not be

O u r e x p e r ie n c e in d r a ftin g r e g u la tio n s to im ­

H .R . 6 5 1 6 b u t a ls o d is c r im in a t io n b a s e d o n a

p le m e n t th e e x is t in g la w

p e r s o n ’s p o lit ic a l a ffilia tio n , r e c e ip t o f p u b lic

su r fa c e m a n y p r o b le m s th e s o lu t io n s to w h ic h

a s s is ta n c e b e n e fits , e x e r c is e o f r ig h ts u n d e r th e

m u s t b e te s te d in p r a c tic e b e f o r e w e c a n c o n f i­

A c t or o th e r p r o v is io n s o f la w , a n d s u c h o th e r

d e n tly a p p ly s im ila r a p p r o a c h e s in o th e r a r e a s.

h a s b r o u g h t to th e

c la s s ific a t io n s a s th e B o a r d o f G o v e r n o r s m a y

S o m e o f th e m o r e p e r p le x in g q u e s tio n s th at h a v e

e s ta b lis h

483

n o t y e t b e e n f in a lly r e s o lv e d in c lu d e th e e x te n t

w o u ld s im p ly a m e n d th e e x is t in g la w to p r o h ib it

to w h ic h a c r e d ito r s h o u ld b e r eq u ire d to c o n ­

by

r e g u la t io n .

In

c o n tr a s t,

S.

d is c r im in a tio n o n th e b a s is o f an “ arbitrary a g e

sid e r a lim o n y a s o r d in a r y in c o m e , th e e x te n t to

lim it .”

w h ic h a n o n w o r k in g s p o u s e sh o u ld b e n e fit fr o m

L e t m e b e g in b y s ta tin g , a s I d id b e fo r e th e

th e c r e d it h is to r y o f a jo in t a c c o u n t, an d th e

H o u s e S u b c o m m itte e o n C o n s u m e r A ffa ir s o n

p r o b le m o f h o w to p r o v id e th e c o n s u m e r w ith

A p r il 2 2 o f th is y e a r , th at th e B o a r d str o n g ly

a “ c le a r a n d m e a n in g f u l” s ta te m e n t o f th e r e a ­

fa v o r s th e e lim in a t io n in c r e d it tr a n sa c tio n s o f

s o n s fo r d e n ia l. In o u r e ffo r ts to r e c o n c ile th e

a ll d is c r im in a tio n b a s e d o n fa c to r s o th e r th an

sta tu to ry g o a l o f e q u a l c r e d it o p p o r tu n ity w ith

an in d iv id u a l’s c r e d it w o r th in e s s . A lth o u g h th ere

th e

is n o le g a l r ig h t to r e c e iv e c r e d it, th e B o a r d

d is tin g u is h

b e l ie v e s a g r ea t d e a l c a n b e d o n e to a ss u r e that

d iffe r e n t a p p lic a n ts w e h a v e p r o p o s e d s o lu t io n s




need

to

p reserv e

th e

le n d e r ’s

a b ility

to

a c c u r a te ly th e c r e d it w o r th in e s s o f

Statements to Congress

w h ose

su ccess

w ill

not be

know n

u n til

475

th e

g r e s s a llo w it s e lf m o r e tim e to c o n tin u e its stu d y

e f fe c t s o f th e ir a c tu a l o p e r a tio n c a n b e m e a s ­

o f th e p r o b le m s in v o lv e d in e x t e n d in g th e E q u a l

ured.

C r ed it O p p o r tu n ity A c t to th e p r o p o s e d n e w

S im ila r ly , e v e n

a p r e lim in a r y

lo o k

at th e

c a t e g o r ie s in o r d e r to a c h ie v e a th o r o u g h a n a ly ­

p r o h ib itio n a g a in s t a g e d is c r im in a t io n , a m a jo r

s is o f th e is s u e s . W e a ls o b e l ie v e th at b e fo r e

fe a tu r e o f a ll th r e e b i l ls , d is c l o s e s p a r tic u la r ly

e n la r g in g th e s c o p e o f th e E q u a l C r e d it O p p o r ­

c o m p le x

th e

tu n ity A c t , th e C o n g r e s s s h o u ld o b ta in th e b e n ­

p r o p o s e d l e g is la t io n , to w h a t e x te n t w ill it b e

efit o f th e e x p e r ie n c e o f c o n s u m e r s a n d c r e d ito r s

q u e s t io n s .

For

e x a m p le ,

under

p e r m is s ib le to u s e s ta tis tic a l d a ta in e v a lu a t in g

u n d er th e r e g u la tio n p e r ta in in g to s e x a n d m a r i­

a p p lic a n ts fo r c r e d it? C a n s ta tis tic a l d a ta r e la t­

tal sta tu s th at w i l l b e p u b lis h e d in fin al fo r m

in g to a g e b e u s e d in d e te r m in in g c r e d itw o r th ­

in th e n e x t f e w m o n th s .

in e s s in th e s a m e w a y th at in su r a n c e c o m p a n ie s
u t iliz e

a c tu a r ia l

ta b le s

to

e v a lu a te

in su r a n c e

I f , a fter r e v ie w in g th e s e c o n s id e r a t io n s , th e
c o m m it t e e n e v e r t h e le s s d e c id e s to p r o c e e d w ith

r is k s or s h o u ld th e a p p r o a c h b e s im ila r to that

th e

in

B o a r d o f G o v e r n o r s w i l l m a k e th e u tm o s t e ffo r t

th e

E qual

E m p lo y m e n t

g u id e lin e s w h ic h

d ir e c t

O p p o r tu n ity

“ in d iv id u a ls

prop osed

a m e n d m e n ts

at

th is

t im e ,

th e

be

to carry o u t its r u le -w r itin g an d e n f o r c e m e n t

c o n s id e r e d o n th e b a s is o f in d iv id u a l c a p a c itie s

r e s p o n s ib ilit ie s u n d e r th e b r o a d e n e d A c t in th e

an d n o t o n th e b a s is o f a n y c h a r a c te r is tic s g e n ­

fa ir e s t a n d m o s t e f f e c t iv e w a y p o s s ib le . W ith

e r a lly a ttrib u te d

th at in m in d , th e B o a r d w is h e s to e m p h a s iz e

to th e

th at

A c t1

g r o u p ” 2 an d th e r e b y

fo r b id th e r e lia n c e o n d a ta that r efle c t th e p e r ­

th e fa c t th at th e p r e s e n tly p r o p o s e d 6 -m o n th -

fo r m a n c e o f a p a r ticu la r g r o u p ?

r u le -w r itin g p e r io d is n o t a d e q u a te g iv e n th e

E a c h o f u s at th e B o a r d is in flu e n c e d b y th e
r e a liz a tio n o f h o w

c o m p le x it y o f th e is s u e s an d th e d ea rth o f p r e ­

m u c h is at sta k e in th e s e

v io u s w o r k in th e s e a r ea s o f c r e d it r e g u la tio n .

e n d e a v o r s . U n le s s th e y are c a rr ie d o u t in th e

In a c c o r d a n c e w ith o u r b e s t e s t im a te s , w e r e ­

b e s t p o s s ib le m a n n e r , w e m a y n o t o n ly fa il to

q u e s t th at th e e f f e c t iv e d a te o f th e a m e n d m e n ts

g a in th e p o s it iv e b e n e fits fo r o u r c it iz e n s that

b e se t at 2 y e a r s rather th a n 6 m o n th s a fter

are s o e a r n e s tly s o u g h t b u t w e m a y a ls o r e d u c e

e n a c tm e n t. O u r o b j e c tiv e is a tim e fr a m e that

th e a v a ila b ility o f c r e d it a n d b r in g d is c r e d it u p o n

w i l l p e r m it th e B o a r d to d is c h a r g e its r e s p o n ­

th e s e an d o th e r la u d a b le e ffo r ts to d is p e l b ia s

s ib ility in a m a n n e r th at w i l l f u lly carry o u t th e

a n d p r e ju d ic e b y th e r e a s o n e d a n d o r d e r ly d e ­

in te n t o f

v e lo p m e n t o f o u r le g a l s y s t e m . A n a ttem p t to

in te r e st.

im p o s e

th e s e

s o lu t io n s

w ith o u t

th e C o n g r e s s

an d s e r v e

th e p u b lic

su ffic ie n t

B a s e d u p o n o u r e x p e r ie n c e in w r itin g r e g u la ­

k n o w le d g e o f th e ir p o s s ib le r a m ific a tio n s c o u ld

tio n s u n d e r th e e x is t in g A c t , an d u n d e r th e T ru th

h a v e th e a d v e r s e e f fe c t o f r e d u c in g th e a v a il­

in L e n d in g a n d F a ir C r e d it B i ll i n g A c t s , th e

a b ility o f c r e d it b y in fla tin g c r e d ito r s ’ c o s t s an d

B o a r d is a w a r e th at th e fin a l v e r s io n o f a r e g u ­

e lim in a t in g

p rofit

la tio n o f th is k in d s h o u ld b e a d o p te d at le a s t

m a r g in c a n n o t s u sta in s u c h c o s t s . O u r b e s t h o p e

6 m o n th s b e fo r e it b e c o m e s e f f e c t iv e . T h e le a d

th e

sm a lle r

le n d e r

w h o se

fo r a c h ie v in g th e w o r th y o b j e c tiv e s o f th is p r o ­

tim e is e s s e n tia l to a c h ie v e th r e e b a s ic g o a ls :

p o s e d l e g is la t io n w i l l d e p e n d u p o n n o t o n ly th e

first, to g iv e th e B o a r d tim e to in fo r m c r e d ito r s

u n d e r s ta n d in g o f th e C o n g r e s s o f th is fu n d a ­

o f th eir n e w d u tie s a n d r e s p o n s ib ilit ie s u n d er

m e n ta l p r o b le m b u t a ls o o n o u r e ffo r ts to stu d y

th e r e g u la tio n ; s e c o n d , to g i v e c r e d ito r s tim e

a n d u n d e r s ta n d th e p r o b le m s as th o r o u g h ly a s

to r e v is e th e ir p r o c e d u r e s , r e w r ite th e ir fo r m s ,

p o s s i b l e , to c o n s u lt as e x t e n s i v e l y a s w e c a n ,

an d train th e ir p e o p le ; a n d th ir d , to a llo w th e

a n d th e n to d ra ft th e r e g u la tio n a s c a r e f u lly a n d

B o a r d to e d u c a te c o n s u m e r s as to t h e ir r ig h ts

o b j e c t iv e ly a s w e k n o w h o w .

u n d er th e a m e n d e d A c t . F o r e x a m p le , a m in i­

A c c o r d in g ly , w e w o u ld s u g g e s t th at th e C o n ­

m u m le a d tim e o f s e v e r a l m o n th s is n e e d e d
s im p ly to p rin t th e n e w a p p lic a tio n f o r m s in th e

1Title VII of the 1964 Civil Rights Act, as amended in 1972.
229 C.F.R. 1604.2 (Equal Employment Opportunity Com­
mission’s Guidelines).




q u a n titie s r e q u ir e d .
T h u s a p e r io d o f 2 y e a r s o n ly p r o v id e s 18
m o n th s in a c tu a lity fo r th e r u le -w r itin g p r o c e s s

476

Federal Reserve Bulletin □ August 1975

it s e lf . W e h a v e c o n s tr u c te d a tim e t a b le 3 that

g a r d in g d is c r im in a t io n o n th e b a s is o f an a p p li­

e x p la in s in d e ta il w h a t m u s t b e d o n e d u rin g th e

c a n t’s r e c e ip t o f p u b lic a s s is t a n c e b e n e fits . S u r ­

18 m o n th s n e e d e d fo r th e a c tu a l d r a ftin g and

v e y s r ep o rte d b y th e N a tio n a l C o m m is s io n o n

a d o p tio n o f a r e g u la tio n o f th e q u a lity w e b e ­

C o n s u m e r F in a n c e s u g g e s t th at th e p r o b le m is

l ie v e th e C o n g r e s s w a n ts a n d th e p u b lic in te r e st

s ig n if ic a n t .5 W e w o u ld a g r e e th at th e r e c e ip t o f

r e q u ir e s .

p u b lic a s s is t a n c e , b e it A id to D e p e n d e n t C h il­

I w o u ld n o w lik e to c o m m e n t u p o n s p e c ific

dren,

d is a b ilit y ,

or

s o c ia l

s e c u r ity

b e n e fits ,

p r o v is io n s o f th e th r e e b ills . W ith reg a rd to S .

sh o u ld n o t b y it s e lf d is q u a lif y o n e fo r c r e d it.

4 8 3 , th e o n ly p o in t I w o u ld lik e to r a ise c o n ­

In

c e r n s th e u s e o f th e w o r d “ a rb itra r y ” to m o d if y

p e r s o n ’s q u a lific a tio n s fo r c r e d it are th e a b ility

all

ca ses

th e

e s s e n t ia l

d e te r m in a n ts

of

a

th e te rm “ a g e l i m i t . ” T h e B o a r d h a s c o n c u r r e d

an d w i l li n g n e s s to r e p a y . S in c e c r e d it is o f t e n

w ith th e p o s it io n e x p r e s s e d b y th e C o n g r e s s in

e x te n d e d to c o v e r th e m o s t b a s ic

th e la n g u a g e o f th e cu rren t la w r e la tin g to s e x

in c lu d in g s h e lte r , c lo t h in g , a n d fu r n itu r e , th e

p u rch ases,

a n d m a r ita l sta tu s— that it w o u ld b e u n w is e to

c r e d it-g r a n tin g p r o c e s s s h o u ld o ffe r e v e r y a p ­

p la c e a n y q u a lif y in g la n g u a g e in th e s ta te m e n t

p lic a n t th e o p p o r tu n ity to d e m o n s tr a te h is or h er

o f th e A c t ’s b a s ic p r o h ib itio n . T h e a d d itio n o f

in d iv id u a l m e r its .

th e te rm “ a r b itr a r y ,” w h ile a p p e a r in g to m o d ify

S e c t io n 7 0 1 ( a ) ( 5 ) o f th e b ill w o u ld p r o h ib it

th e c la s s p r o te c te d b y th e A c t , in f a c t, g iv e s

d is c r im in a t io n

lit tle , if a n y , g u id a n c e to th e B o a r d as to w h a t

r ig h ts u n d e r th is a ct or o th e r p r o v is io n s o f l a w . ”

on

th e

b a s is

of

“ e x e r c is e

of

is in te n d e d . M o r e s ig n ific a n t, it m a y b e in c o n ­

W e h a v e n o d iffic u lty w ith th e first part o f th at

s is te n t w ith th e e x t e n s iv e b o d y o f c iv i l r ig h ts

c a t e g o r y , b u t th e te rm “ or o th e r p r o v is io n s o f

la w that d e fin e s th e w o r d “ d is c r im in a t e ” an d

l a w ” w o u ld b r in g w ith in th e A c t ’s p r o h ib itio n

e s ta b lis h e s th e le g a l sta n d a r d s o f sc r u tin y to b e

th e e x e r c is e o f th e e n tir e s p e c tr u m o f o th e r le g a l

u sed

r ig h ts , s o m e o f w h ic h a c r e d ito r m ig h t ju s tifi­

in d e te r m in in g w h e th e r

c o n d u c t is d i s ­

c r im in a t o r y .4 If th e C o n g r e s s w is h e s to q u a lif y

a b ly c o n s id e r in d e te r m in in g c r e d it w o r th in e s s .

th e c o v e r a g e o f th e a m e n d m e n t in th e area o f

T h e m o s t o b v io u s c a s e is th e e x e r c is e o f r ig h ts

a g e , it is r e c o m m e n d e d that s u c h q u a lific a tio n s

u n d e r th e b a n k r u p tc y la w . W e b e l ie v e a d i s ­

b e s p e lle d o u t w ith p a r tic u la r ity .

c h a r g e in b a n k r u p tc y to b e a v a lid c o n s id e r a tio n

L e t m e turn n o w to a s e c o n d b ill r e g a r d in g
E q u a l C r ed it O p p o r tu n ity — S .

1927.

S e c tio n

in a d e te r m in a tio n o f c r e d itw o r th in e s s an d o n e
that s h o u ld n o t b e p r o h ib ite d . W e s u g g e s t that

7 0 1 ( a ) o f th is b ill w o u ld e s ta b lis h th r e e s p e c ific

th is c a t e g o r y o f p r o h ib itio n b e r e v is e d to in c lu d e

c a t e g o r ie s o f p r o h ib ite d d is c r im in a tio n th at are

o n ly “ e x e r c is e o f r ig h ts u n d e r th is A c t . ”

n o t in c lu d e d in H .R . 6 5 1 6 . T h e s e are th e c a t e ­

S e c t io n s 7 0 1 ( b ) o f S .

1 9 2 7 an d 7 0 1 ( d ) o f

g o r ie s o f p o lit ic a l a ffilia tio n , r e c e ip t o f p u b lic

H .R . 6 5 1 6 p r o v id e , in e f fe c t , that th e c o n s i d ­

a s s is ta n c e b e n e fits , a n d e x e r c is e o f r ig h ts u n d er

e r a tio n o f an a p p lic a n t’s a g e w h e n u s e d fo r th e

th e A c t or o th e r p r o v is io n o f la w . W ith regard

p u r p o se o f a p p ly in g c r ite r ia fa v o r in g a p p lic a n ts

to th e in c lu s io n o f “ p o litic a l a ffilia tio n ”

as a

in a p a r ticu la r a g e c a t e g o r y sh a ll n o t c o n s titu te

c a te g o r y o f p r o h ib ite d d is c r im in a tio n , w e s u g ­

d is c r im in a tio n . T h e s e p r o v is io n s req u ire s o m e

g e s t th a t, b e c a u s e

we

r e v is io n to c la r ify th e ir s c o p e a n d in te n t. A c ­

e v id e n c e

d is c r im in a t io n ,

are n o t a w a r e o f a n y
w o u ld

c o r d in g to th e H o u s e c o m m it te e rep ort o n H .R .

a p p ea r to b e an a rea in w h ic h fu rth er in q u iry

6 5 1 6 a n d th e c o m m e n t s a c c o m p a n y in g th e in ­

o n th e c o m m i t t e e ’s part m a y b e a d v is a b le .

tr o d u c tio n o f S . 1 9 2 7 , th e p r o v is io n s w e r e in ­

of

su ch

th is

In c o n tr a st, e v id e n c e h a s b e e n p r e s e n te d r e ­

te n d e d to p e r m it th e u s e o f a g e in fo r m a tio n
w h e n c a r r y in g o u t a ffirm a tiv e a c tio n p r o g r a m s

3This m em orandum , which accom panied the original state­
m ent, is available upon request to Publications Services, D ivi­
sion of Adm inistrative Services, Board of Governors of the
Federal Reserve System , W ashington, D .C. 20551.
4See for exam ple, G rig g s v. D uke P o w e r C o ., 401 U .S.
424, 4 2 9 -3 0 (1971); A lb e m a rle P a p er Co. v. M o o d y, 95 S.
Ct. 2362 (1975).




d e s ig n e d to b e n e fit a p a r ticu la r a g e c a t e g o r y .
It w o u ld b e p r e fe r a b le if th e s e p r o v is io n s d e -

5“ Consum er Credit in the United S tates,” Report of the
National Com mission on Consum er Finance, pp. 155-60 (D e­
cember 1972).

Statements to Congress

A ll

s c r ib e d w ith s p e c ific ity w h ic h a g e c a t e g o r ie s are

B o a r d b e l ie v e s th at c o n s u m e r l e a s in g is an a p ­

d e e m e d to b e in n e e d o f su c h p r o te c t io n , an d

p r o p r ia te

th e n e x p lic it ly a u th o r iz e d th e B o a r d to im p le ­

c a s e s , o f p u r c h a s in g c o n s u m e r d u r a b le s . C o n ­

m e n t th e s e

o b j e c tiv e s

by

r e g u la tio n .

As

th e

p r o v is io n n o w r e a d s , it c r e a te s a l o o p h o le b y

su m e r

m e th o d

l e a s in g

of

has

u t iliz in g

and,

e x p e r ie n c e d

in

ra p id

som e
g r o w th

w ith in th e la st d e c a d e . T h is g r o w in g p o p u la r ity

m a k in g it p o s s ib le fo r a c r e d ito r w h o d is c r im ­

s u g g e s t s th at th e p u b lic is in c r e a s in g ly c o m in g

in a te d a g a in s t o n e a g e c a te g o r y to r a is e a s a

to v i e w l e a s in g a s a v ia b le a lte r n a tiv e to c r e d it

d e f e n s e th e a r g u m e n t th at its p o l i c y w a s d e ­

p u r c h a s e s fo r s o m e p r o d u c ts .
A v a ila b le

s ig n e d to fa v o r a n o th e r a g e c a te g o r y .
S e c t io n

7 0 1 (d )

of

S.

1927

w o u ld

req u ire

s ta tis tic s o n th e

g r o w th o f c o n ­

su m e r l e a s in g in d ic a te th at th e s o - c a lle d “ b ig -

c r e d ito r s to fu r n ish r e je c te d a p p lic a n ts w ith a

tic k e t d u r a b le s ,”

n o tic e o f th e r e a s o n s fo r d e n ia l or te r m in a tio n

t e le v is io n

o f c r e d it. A s th e c o m m it te e m a y b e a w a r e , th e

m o s t c o m m o n g o o d s le a s e d b y c o n s u m e r s . A u ­

p r o p o s e d r e g u la tio n is s u e d b y th e B o a r d u n d e r

to m o b ile s p r e s e n tly c o n s titu te th e m o s t p o p u la r

th e e x is t in g A c t c o n t a in s a sim ila r p r o v is io n that

le a s e d g o o d s , a n d th is a s p e c t o f c o n s u m e r l e a s ­

se ts,

su ch
and

a s a u t o m o b ile s , c o lo r

h o m e fu r n is h in g s

are

th e

w o u ld r e q u ir e n o t ic e o f r e a s o n s fo r d e n ia l o n ly

in g w i l l n o d o u b t a b so r b m u c h o f th e s u b c o m ­

w h e n r e q u e s te d b y an a p p lic a n t. T h e B o a r d is

m it t e e ’s a tte n tio n d u r in g its d e lib e r a t io n s o n th is

s till c o n s id e r in g th is e n tir e q u e s tio n . Its p r e se n t

le g is la t io n .

f e e l in g is that r e q u ir in g th e n o t ic e to b e g iv e n
o n ly

w h ere

r e q u e s te d

w o u ld

a c c o m p lis h

th e

A u t o m o b ile

le a s in g

has

e x p e r ie n c e d

rap id

g r o w th o v e r th e p a st d e c a d e . A c c o r d in g to s ta ­

p u r p o s e s o f th e r e q u ir e m e n t w it h o u t p u ttin g th e

tis tic s fr o m

c r e d ito r to th e u n n e c e s s a r y e x p e n s e o f p r o v id in g

A s s o c ia t io n , in

a w r itte n s ta te m e n t in a ll in s ta n c e s o f d e n ia l.

s o m e 1 4 p er c e n t o f th e to ta l n u m b e r o f a u to ­

T h e B o a r d b e l ie v e s th at th e e x is t in g la w p r o ­

m o b ile s p r o d u c e d , w e r e l e a s e d , a n d o n e -fifth

v id e s th e n e c e s s a r y a u th o r ity fo r a p r o v is io n o f

o f th is to ta l w a s le a s e d to in d iv id u a ls . B y 1 9 7 0

th is n a tu re; h o w e v e r , if th e C o n g r e s s d e s ir e s to

th e p e r c e n ta g e o f a u to m o b ile p r o d u c tio n that

in c lu d e th e p r o v is io n in th e a m e n d m e n ts to th e

w as

A c t , th e B o a r d w o u ld

m i ll i o n ) , m o r e th a n a q u arter o f w h ic h r e p r e ­

w e lc o m e

th is e x p lic it

le a s e d

th e N a tio n a l A u t o m o b ile D e a le r s
1965

had

m o r e th a n

grow n

to

24

1 .5

p er

m i ll i o n ,

cen t

( 2 .6

sta te m e n t o f its a u th o r ity a n d w o u ld s u g g e s t that

s e n te d le a s e s to in d iv id u a ls . A s o f

th e

m i ll i o n , a b o u t 2 6 p e r c e n t o f th e to ta l n u m b e r

C on gress

c o n s id e r

th e

m o d ifie d

v e r s io n

1 9 7 4 , 2 .8

o f c a rs m a d e , w e r e l e a s e d , a n d 3 6 p e r c e n t o f

c o n ta in e d in th e p r o p o s e d r e g u la tio n .
I w o u ld n o w lik e to a d d r e ss th e t w o l e g i s l a ­

th is to ta l w a s le a s e d to in d iv id u a ls . T h u s , o v e r

tiv e p r o p o s a ls , S . 1 9 0 0 a n d S . 1 9 6 1 d e a lin g w ith

a lm o s t a d e c a d e , th e p e r c e n ta g e o f to ta l a u to ­

co n su m er

is

m o b ile p r o d u c tio n le a s e d to in d iv id u a ls h a s tri­

c o n s id e r in g . T h e B o a r d is p a r tic u la r ly p le a s e d

p le d in s i z e — fr o m l e s s th a n 3 p er c e n t in 1 9 6 5

l e a s in g ,

that

th e

s u b c o m m itte e

to s e e l e g i s l a t i v e a c tio n b e g in n in g in th is area

to 9 . 2 p er c e n t in 1 9 7 4 . P r o je c t io n s fr o m a u to

b e c a u s e th e n e e d fo r c o n s u m e r l e a s in g d i s c l o ­

m a k e r s in D e tr o it , m o r e o v e r , e s t im a te th at 8 0

su r e s h a s b e e n o f s o m e c o n c e r n to u s o v e r th e

p er c e n t o f th e g r o w th in l e a s in g th r o u g h 1 9 8 0

la st 2 y e a r s . In its A n n u a l R e p o r t to C o n g r e s s

w ill b e s e e n in l e a s e s to in d iv id u a ls .

o n T ru th in L e n d in g fo r 1 9 7 3 , th e B o a r d p o in te d

T h e B o a r d ’s c o n c e r n w ith c o n s u m e r le a s in g

o u t s e v e r a l d is c lo s u r e p r o b le m s in th e a rea o f

is th at p r e s e n tly , e x c e p t fo r p r o v is io n s m a d e in

c o n s u m e r l e a s in g a n d s u g g e s t e d th at th e C o n ­

a f e w S ta te s t a tu te s , th e r e is n o r e q u ir e m e n t that

g r e s s m ig h t w is h to e x a m in e th is r a p id ly e x ­

a

p a n d in g f ie ld . T h e a d d itio n a l s te p o f r e c o m ­

g iv e n th e c o n s u m e r w h e n h e le a s e s g o o d s u n d e r

sta n d a r d iz e d

a g g r e g a te

co st

d is c lo s u r e

be

m e n d in g le g i s l a t i v e p r o v is io n s w a s ta k e n b y th e

a lo n g -te r m c o n tr a c t. T h e m a jo r p u r p o s e o f th e

B o a r d in its T ru th in L e n d in g R e p o r t fo r 1 9 7 4 ,

T ru th in

an d I w a s g r a tifie d to n o te th at m a n y o f th e

m e a n in g f u l c o n s u m e r

p r o v is io n s o f th e B o a r d ’s p r o p o s a l h a v e b e e n

m a r k e t b y p r o v id in g sta n d a r d iz e d d is c lo s u r e s o f

in c o r p o r a te d in to th e t w o b ills .

c r e d it c o s t s . W ith o u t c o m p a r a b le d is c lo s u r e s o n

I w o u ld lik e to sta te at th e o u ts e t th at th e




L e n d in g

A ct has

been

s h o p p in g

to f a c ilita te
o f th e

c r e d it

c o n s u m e r l e a s in g , it is d iffic u lt, if n o t i m p o s s i ­

478

Federal Reserve Bulletin □ August 1975

in th e e x p a n d in g

s u c h a s th o s e in w h ic h th e r e is n o o p tio n to

le a s in g m a r k e t. O u r h o p e is th at th e p a s s a g e

p u r c h a s e . In a d d itio n , w e b e l ie v e th at th e n u m ­

o f th is ty p e o f le g is la t io n w i l l h e lp c o n s u m e r s

ber o f l e a s e s w it h n o m in a l p u r c h a s e o p tio n s is

n o t o n ly to c o m p a r e l e a s in g a lte r n a tiv e s b u t a ls o

q u ite s m a ll.

b l e , fo r c o n s u m e r s to sh o p

T h e f o c a l p o in t o f th e B o a r d ’s c o n c e r n is th u s

to c o m p a r e le a s e tr a n s a c tio n s w ith c o n v e n t io n a l

th o s e lo n g - te r m l e a s e s o f p e r s o n a l p r o p e r ty to

c r e d it s a le s .
T h e n e e d fo r c o m p a r a b ility in d is c lo s u r e b e ­

b e u s e d fo r p e r s o n a l, f a m i ly , o r h o u s e h o ld p u r ­

tw e e n le a s e a n d c r e d it tr a n s a c tio n s is p a r tic u ­

p oses,

la r ly im p o r ta n t b e c a u s e m a n y c o n s u m e r le a s in g

p r o a c h in g th at o f a c r e d it -s a le a g r e e m e n t, a n d

a r r a n g e m e n ts n o w p r e v a le n t in th e m a r k e t are

p o te n t ia lly b in d th e l e s s e e to th e p a y m e n t o f

w h ic h

t y p ic a lly

have

a m a tu r ity

ap­

e s s e n t ia lly th e e q u iv a le n t o f c r e d it s a le s . T h e

an a g g r e g a te su m s u b s ta n tia lly e q u iv a le n t to th e

t e r m in o lo g y o f th e tr a d e , fo r e x a m p le , r efe rs

v a lu e o f th e g o o d s l e a s e d . T h is d o e s n o t in c lu d e

to

th e

c e r ta in

le a s e

a g r e e m e n ts

as

“ fin a n c in g

l e a s e s . ” T h e f a c t th at m a n y o f th e s e le a s e s are

sh o r t-te r m

c o n v e n ie n c e

l e a s in g

su ch

as

“ r e n t-a -c a r ” a r r a n g e m e n ts.

e s s e n t ia lly e q u iv a le n t to c r e d it s a le s is n o t c o in ­

W e f e e l th at sta n d a r d iz e d d is c lo s u r e s , c o m ­

c id e n t a l. F o r e x a m p le , b o th th e C o m p tr o lle r o f

p a r a b le to th o s e s e t fo r th u n d e r T ru th in L e n d ­

th e

in g , s h o u ld b e r e q u ir e d fo r le a s e a d v e r tis e m e n ts

C u rren cy

as

to

n a tio n a l

banks

an d

th e

B o a r d in its r u le s g o v e r n in g b a n k h o ld in g c o m ­

as

p a n y a c tiv itie s r e q u ir e th at le a s e s e n te r e d in to

H o w e v e r , w e d o n o t b e l ie v e th at rate d i s c l o ­

w e ll

a s fo r

co n su m er

le a s e

tr a n s a c tio n s .

b y t h e s e in s titu tio n s b e th e fu n c t io n a l e q u iv a le n t

s u r e s , a n a la g o u s to th e a n n u a l p e r c e n ta g e rate

o f a c r e d it tr a n sa c tio n a n d h a v e th u s lim ite d th e

u n d e r th e T ru th in L e n d in g A c t , are p r a c tic a l.

a s s e t r isk that b a n k s a n d b a n k -r e la te d le s s o r s

T h e d e v e lo p m e n t o f le a s e rate d is c lo s u r e s

m a y ta k e in

o p e r a tio n s .

im p r a c tic a l, w e f e e l , b e c a u s e o f th e d iffic u lty

T h e s e r u le s , d e s ig n e d to p r o te c t th e s a fe t y and

o f d e te r m in in g w h a t c o m m o n c o s t s s h o u ld b e

s o u n d n e s s o f b a n k s in w h ic h th e p u b lic d e p o s it s

is o la te d in th e c o m p u ta tio n o f s u c h r a te s.

e n g a g in g

in

l e a s in g

is

its fu n d s , h a v e th e e f fe c t o f p la c in g th e r isk o f

I w o u ld n o w lik e to c o m m e n t o n t w o s e c tio n s

a n y u n fo r e s e e n d e te r io r a tio n or d e p r e c ia tio n o f

o f S . 1 9 6 1 an d o n e s e c tio n o f S . 1 9 0 0 th at w e

th e p r o d u c t le a s e d o n th e l e s s e e . T h u s , l e g i s l a ­

r eg a rd a s h ig h ly im p o r ta n t. T h e first is S e c t io n

tio n to p r o te c t th e c o n s u m e r b y r e q u ir in g p rop er

1 8 3 , a s e c tio n a l r e f e r e n c e c o m m o n to b o th b ills ,

d is c lo s u r e o f th e c o n s u m e r l e s s e e ’s r is k s b e ­

w h ic h s e ts a lim it a t io n o n a c o n s u m e r l e s s e e ’s

c o m e s a ll th e m o r e im p o r ta n t. O t h e r w is e , th e

lia b ility . T h is s e c tio n o f th e t w o b ills a d d r e s s e s

l e s s e e m a y u n k n o w in g ly u n d e r ta k e n e a r ly a ll th e

th e lia b ilit y

b u r d e n s o f o w n e r s h ip , w ith o u t th e b e n e fit o f title

c o n s u m e r l e s s e e at th e e n d o f th e le a s e te rm .

or a d e q u a te c o s t d is c lo s u r e s .

It is

It is

p r e s e n tly

n o t p o s s ib le

th at th e le a s e m a y

n o t u n c o m m o n fo r

im p o s e o n a

co n su m er

le a s e s to

a s a p r a c tic a l

p r o v id e th at u p o n th e e x p ir a tio n o f th e le a s e

m a tter to r eq u ire a d e q u a te c o s t d is c lo s u r e s o n

th e p r o d u c t w i l l h a v e a s tip u la te d d e p r e c ia te d

le a s e s u n d e r th e T ru th in L e n d in g A c t.

The

v a lu e an d w i l l e ith e r b e p u r c h a s e d b y th e l e s s e e

T ru th in L e n d in g A c t b r in g s c e r ta in l e a s e s w it h ­

or s o ld to an in d e p e n d e n t p a r ty . U n d e r th e te r m s

in its d is c lo s u r e r e q u ir e m e n ts th r o u g h th e d e fin i­

o f su c h an a g r e e m e n t , if th e p r o d u c t is s o ld a n d

tio n o f c r e d it s a le c o n ta in e d in S e c t io n 1 0 3 (g ).

b r in g s le s s th a n th e d e p r e c ia te d v a lu e s tip u la te d

H o w e v e r , th e s e r e q u ir e m e n ts a p p ly o n ly w ith

in

r e s p e c t to th o s e l e a s e s that c o n ta in p r o v is io n s

d iffe r e n c e ; if it b r in g s m o r e , th e l e s s e e is e n t i­

p e r m ittin g th e l e s s e e to b e c o m e th e o w n e r o f

tle d to th e su r p lu s.

th e g o o d s le a s e d

th e

c o n tr a c t,

th e

le s se e

is

lia b le

fo r

th e

“ fo r n o o th e r or a n o m in a l

F or e x a m p le , a t y p ic a l 2 -y e a r a u to le a s e o n

c o n s id e r a t io n .” T h e B o a r d m ig h t c o n c e iv a b ly

a $ 5 , 4 0 0 car m ig h t c a ll fo r 2 4 $ 1 0 0 in s ta lm e n t

e x p a n d th is p r o v is io n b y a d o p tin g a b r o a d d e fi­

p a y m e n ts a n d s e t an e n d -te r m d e p r e c ia te d v a lu e

n itio n o f w h a t c o n s titu t e s a n o m in a l c o n s i d ­

o f $ 3 , 0 0 0 o n th e c a r. U n d e r s u c h an a g r e e m e n t,

e r a tio n . H o w e v e r , th is w o u ld s till n o t a c c o m ­

th e le s s e e m a y h a v e n o u n d e r s ta n d in g o f h o w

p lis h th e p u r p o s e o f a s s u r in g th at a d e q u a te c o s t

m u c h th e le a s e m a y c o s t u n le s s h e c a n a c c u ­

d is c lo s u r e s are g iv e n

r a te ly p r e d ic t th e s e c o n d h a n d m a r k e t v a lu e o f




in a ll c o n s u m e r l e a s e s ,

479

Statements to Congress

th e p r o d u c t. F o r e x a m p le , in th is c a s e th e d e ­

b e t w e e n l e s s e e an d le s s o r a n d w it h th e p o s s i ­

p r e c ia te d v a lu e o f th e car m ig h t b e $ 2 , 5 0 0 ,

b ility th at s u c h a la r g e r a m o u n t m ig h t b e o ffe r e d

w h ic h u n d e r th e le a s e c o n tr a c t w o u ld l e a v e th e

in a p r e -p r in te d fo r m c o n tr a c t o n a “ ta k e -it or

le s s e e lia b le fo r an a d d itio n a l $ 5 0 0 “ b a l l o o n ”

l e a v e - it ” b a s is . T h e y b e l ie v e , m o r e o v e r , th at

p a y m e n t. T h u s , if th e c o n tr a c t s e ts an u n r e a lis -

s o m e lim it a t io n tie d to in s ta lm e n t p a y m e n ts is

t ic a lly h ig h

h ig h ly d e s ir a b le b e c a u s e o f its a b ilit y to a ssu r e

d e p r e c ia te d

v a lu e

on

th e

le a s e d

g o o d s , th e c o n tin g e n t lia b ilit y o f th e l e s s e e w ill

that th e le a s e d p r o d u c t w i l l b e fa ir ly p r ic e d to

in c r e a s e a c c o r d in g ly , an d th e le s s o r c a n o ffe r

c o v e r a n tic ip a te d d e p r e c ia tio n .

d e c e p t iv e ly lo w m o n th ly ren ta l p a y m e n ts to an
u n w a r y p u b lic .
S e c t io n

183

T h e s e c o n d p r o v is io n o n w h ic h I w o u ld lik e
to c o m m e n t is S e c t io n 6 o f S . 1 9 6 1 . T h is s e c tio n

l e s s e e ’s

p la c e s an e f f e c t iv e d a te fo r th is le g is la t io n a s

c o n t in g e n t lia b ilit y a s th e le s s e r o f t w ic e th e

of

S.

1961

s e ts

th e

th e first d a y o f th e s e c o n d fu ll c a le n d a r m o n th

a v e r a g e m o n t h ly r en ta l p a y m e n t or 10 p er c e n t

a fter th e d a te o f e n a c tm e n t. A s w e h a v e m e n ­

o f th e to ta l r en ta l p a y m e n ts u n d e r th e l e a s e . T h e

tio n e d b e f o r e ,

c o m p a r a b le p r o v is io n in S . 1 9 0 0 s ta te s that th e

C o n g r e s s g r a n ts to an a g e n c y to im p le m e n t a

l e s s e e ’s c o n t in g e n t lia b ilit y w o u ld b e lim ite d to

g iv e n sta tu te h a s a d ir e c t b e a r in g o n th e q u a lity

we

b e l ie v e

th e

tim e

th at th e

th r e e tim e s th e m o n th ly ren ta l p a y m e n t or a

an d e f f e c t iv e n e s s o f th e a g e n c y ’s r e g u la t io n s .

la rg e r a m o u n t a g r e e d u p o n b y th e le s s o r a n d

W e b e l ie v e th e 2 - m o n th p e r io d a c c o r d e d u n d e r

l e s s e e . B o t h b ills p r o v id e an e x c e p t io n to th e

S . 1 9 6 1 is far t o o sh o rt to d e v e lo p w e l l- c o n s id ­

lim it p la c e d o n l e s s e e lia b ility in th e c a s e o f

e r e d im p le m e n t in g r e g u la tio n s that are fa ir to

d a m a g e b e y o n d n o r m a l w e a r a n d tear to th e

th e l e s s e e a n d le s s o r a lik e . T im e fo r c o n s u lta tio n

le a s e d p r o d u c t or in th e c a s e o f l e s s e e d e l in ­

w ith

q u en cy.

n e e d e d . T im e is a ls o n e e d e d to c o m p ly w ith

T h e p r o v is io n s o f b o th b ills are d e s ig n e d to

b o th

b u s in e s s

an d

co n su m er

groups

th e A d m in is tr a tiv e P r o c e d u r e A c t , w h ic h

is
re­

a ss u r e that th e l e s s e e is n o tifie d in a d v a n c e o f

q u ir e s p u b lic a tio n o f p r o p o s e d r u le s fo r c o m ­

th e e x te n t o f h is m a x im u m

m e n t. R e s p o n d in g c o m m e n t s m u s t b e c a r e fu lly

u n d e r th e le a s e .

By

c o n tr a c t lia b ility

in c o r p o r a tin g a m o n th ly

a n a ly z e d , an d an e ffo r t m u s t b e m a d e to e d u c a te

p a y m e n t fa c to r or a p e r c e n ta g e o f to ta l p a y m e n ts

c o n s u m e r s o n th e l e g is la t io n .

in to th e c o m p u ta tio n o f th is m a x im u m e n d -te r m

r e g u la tio n s are to b e p r o p e r ly c o m p lie d w it h ,

F in a lly ,

if th e

fig u r e , b o th b ills s e e k to a ss u r e th at th e le s s o r

in d u str y m u s t h a v e s o m e tim e to s tu d y th e m

w ill p r ic e th e r en ta l in s ta lm e n ts o f th e le a s e d

an d to c h a n g e b u s in e s s p r o c e d u r e s . T h e r e fo r e ,

g o o d s su ffic ie n tly h ig h to c o v e r e x p e c t e d d e p r e ­

th e B o a r d w o u ld r e s p e c t fu lly u r g e th at a m in i­

c ia t io n a n d th u s a v o id le a v in g

m u m o f 12 m o n th s b e p r o v id e d , a s S e c t io n 5

th e c o n s u m e r

l e s s e e w ith an u n d u ly la r g e b a llo o n p a y m e n t at

of S.

th e e n d o f th e le a s e te rm .

to b e c o m e e f f e c t iv e .

T h e B o a r d su p p o r ts th e p u r p o s e o f b o th o f

1 9 0 0 w o u ld p r o v id e , b e fo r e th is A c t is

In c lo s in g

I w o u ld

lik e

to c o m m e n d

th is

th e s e p r o te c tiv e fe a tu r e s . H o w e v e r , a s th e B o a r d

c o m m it t e e fo r th e a c tio n ta k e n in th e a rea o f

sta te d in

1 9 7 4 A n n u a l R e p o r t , it is n o t

c o n s u m e r le a s in g . T h is n e w an d e x p a n d in g a l­

c o m m itt e d to a n y s p e c ific lia b ility fo r m u la . T h e

its

te r n a tiv e to c r e d it p u r c h a s e s , w e f e e l , m e r its

3 -m o n th fo r m u la o f S . 1 9 0 0 or th e 10 p er c e n t

c a r e fu l a tte n tio n , a n d w e are h o p e fu l th at th e

a lte r n a tiv e in S . 1 9 6 1 b o th m a y b e q u ite a d e ­

C o n g r e s s w ill p r o v id e a sta tu to r y b a s is to a ss u r e

q u a te . T h e B o a r d w o u ld h o p e , h o w e v e r , that

that th e c o n s u m in g p u b lic w i l l h a v e th e n e c e s ­

w h a te v e r fo r m u la m a y b e c h o s e n

w ill r eflec t

sa r y in fo r m a tio n to m a k e in t e llig e n t s h o p p in g

in d u str y e x p e r ie n c e in a c c u r a te ly s e ttin g d e p r e ­

d e c is io n s in le a s e tr a n s a c tio n s . W ith r eg a r d to

c ia te d v a lu e s .

th e E q u a l C r e d it A c t a m e n d m e n t s , th e B o a r d

S o m e , b u t n o t a ll, m e m b e r s o f th e B o a r d h a v e

su p p o r ts th e

p u rp o ses

of

th e

le g is la t io n

but

c o n c e r n o v e r th e p r o v is io n in S . 1 9 0 0 , w h ic h

b e l ie v e s that fu rth er in q u ir y an d a n a ly s is are

a llo w s fo r th e s u b s titu tio n o f a la rg e r a m o u n t

n e e d e d to d e v is e th e m o s t s u ita b le m e th o d s o f

a g r e e d to b y th e l e s s e e an d le s s o r . T h e ir c o n c e r n

s e r v in g th e s e p u r p o s e s . W e b e l ie v e th e p r u d en t

is w ith th e l ik e ly d isp a r ity in b a r g a in in g p o w e r

c o u r s e w o u ld b e to d r a w u p o n th e e x p e r ie n c e




480

Federal Reserve Bulletin □ August 1975

th at w ill b e g a in e d a fter th e e x is t in g la w c o v e r ­

o f th e c o v e r a g e o f th e A c t u n til s u c h e x p e r ie n c e

in g s e x an d m a r ita l sta tu s h a s b e e n in e f fe c t

is a v a ila b le . I w i l l b e p le a s e d to r e s p o n d to a n y

fo r a r e a s o n a b le t im e , a n d to d e fe r e x t e n s io n s

o f y o u r q u e s t io n s .

S ta te m e n t

M em b er,

h a v e b e e n e x c e s s i v e l y w i d e . T h e fa c t th at m a n y

o f th e F e d e r a l R e s e r v e

e f f e c t iv e e x c h a n g e r a tes (a te rm I w i l l e x a m in e

B o a rd

by

H en ry

o f G overn ors

C.

W a l l ic h ,

□

S y s t e m , b e f o r e th e S u b c o m m it t e e o n I n te r n a ­

m o r e c lo s e l y

tio n a l T r a d e , I n v e s tm e n t a n d M o n e t a r y P o li c y

a b o u t th e l e v e l s at w h ic h th e y s to o d in M a r c h

in a m o m e n t ) h a v e retu rn ed to

o f th e C o m m i t te e o n B a n k i n g , C u r r e n c y , a n d

1 9 7 3 , or s h o r tly th e r e a fte r , s e e m s to s u g g e s t that

H o u s i n g , U .S . H o u s e o f R e p r e s e n t a t i v e s , a n d

th e in te r im flu c tu a tio n s w e r e u n n e c e s s a r y . S o m e

th e S u b c o m m it t e e o n I n te r n a tio n a l E c o n o m ic s

o b s e r v e r s g o fu rth er an d a r g u e that te m p o r a r y

o f th e J o in t E c o n o m ic C o m m itte e , o n “ P r o b l e m s

d e c lin e s in e x c h a n g e ra tes th at h a v e o c c u r r e d

o f I n te r n a tio n a l

have

M o n e ta r y

R e fo rm

and

E x-

been

in fla tio n a r y

in

m any

c o u n tr ie s

c h a n g e - R a te M a n a g e m e n t J u l y 2 1 , 1 9 7 5 .

th r o u g h a r a tch et e f fe c t o n c o s t- p r ic e str u c tu r e s.

I a m p le a s e d to a p p ea r b e fo r e th e s e c o m m it t e e s

c u r r e n c y c o u n tr ie s h a v e n o t b e e n a s in d e p e n d e n t

M o r e o v e r , m o n e ta r y p o l i c i e s o f n o n -r e s e r v e to d is c u s s th e fiv e q u e s tio n s p o s e d b y C h a ir m a n

under

R e e s ’ le tte r

M o n e ta r y p o l i c i e s th at g e n e r a te d a n d w e r e c o n ­

of

June

26.

In

o r d e r to

be

as

flo a tin g

ra tes

as

som e

had

e x p e cte d .

r e s p o n s iv e a s p o s s ib le to th e c o m m i t t e e s ’ n e e d s ,

str a in e d b y u n w a n te d flo w s o f fin a n c ia l c a p ita l

I h a v e o r g a n iz e d m y r em a r k s to d a y in to fiv e

am ong

s e c t io n s to c o r r e s p o n d w ith th e c o n c e r n s r a ise d

s e e m to h a v e g e n e r a te d a n d to h a v e b e e n c o n ­

b y y o u r c h a ir m a n .

c o u n tr ie s

under

fix e d

exchange

r a tes

str a in e d b y u n w a n te d c h a n g e s in e x c h a n g e r a tes
u n d e r a r e g im e o f g r ea te r f le x ib ility in e x c h a n g e

E V A L U A T IO N
W IT H

O F

F L E X IB L E

r a tes.

E X P E R IE N C E
E X C H A N G E

R A T E S

A n o th e r a s p e c t o f th e w o r ld m o n e ta r y s y s te m
that h a s attra cted a tte n tio n o f la te is th e fa c t

A fte r flo a tin g first b e c a m e

g e n e r a l in M a rc h

th at it is n o t a s y s t e m o f fr e e ly flo a tin g e x c h a n g e

1 9 7 3 , e a r ly

flo a tin g e x c h a n g e

r a te s. It is a m ix e d s y s t e m : s o m e c o u n tr ie s p e g

e v a lu a tio n s o f

r a tes w e r e m a r k e d b y c o n s id e r a b le r e lie f an d

th eir c u r r e n c ie s

to

s a tis fa c tio n th at in te r n a tio n a l trad e c o n tin u e d to

tr a d in g

so m e

e x p a n d an d that e x c h a n g e m a r k e ts f u n c tio n e d

c o u n tr ie s m a in ta in

p artn er;

th e

cu rrency
b lo c s ,

s ta b le

or

of

a m a jo r

grou p s,

r a tes a m o n g

of

th e m ­

w e l l. B o th th e b u s in e s s c o m m u n ity an d g o v e r n ­

s e l v e s w h ile flo a tin g m o r e fr e e ly w ith r e s p e c t

m e n ts s e e m e d to a d a p t q u ic k ly to th e n e w s y s ­

to th e rest o f th e w o r ld ; s o m e c o u n tr ie s a c t iv e ly

te m .

an d o n th e

m a n a g e th e ir flo a t to a g r ea te r or le s s e r e x te n t

w h o le h a v e n o t s in c e , r e s o r te d to a d m in is tr a tiv e

G o v e r n m e n ts d id n o t th e n ,

b y in te r v e n tio n in th e ir e x c h a n g e m a r k e ts ; a n d

c o n tr o ls or c o m p e tit iv e d e p r e c ia tio n to im p r o v e

a v e r y f e w c o u n tr ie s , a m o n g th e m th e U n it e d

th e ir cu rren t a c c o u n t p o s it io n s at th e e x p e n s e

S ta te s , flo a t— to th e e x te n t th at th e in te r v e n tio n s

o f o th e r s. T h e a b s e n c e o f c o n t r o ls , to g e th e r w ith

o f o th e r s w i l l a llo w

in c r e a s in g fa m ilia r ity w ith t e c h n iq u e s a v a ila b le

s m a ll a m o u n t o f in te r v e n tio n .

th e m — w ith

a r e la t iv e ly

fo r m in im iz in g r is k s a s s o c ia te d w it h e x c h a n g e -

R e c e n t c r it ic is m s o f flo a tin g e x c h a n g e ra tes

rate c h a n g e s , h a s c o n s id e r a b ly r e d u c e d in itia l

c o n tr ib u te to o u r u n d e r s ta n d in g o f th e cu rren t

s k e p t ic is m to w a r d flo a tin g r a tes e x p r e s s e d b y

w o r ld

s o m e m e m b e r s o f th e b u s in e s s c o m m u n it y .

w e ig h e d c a r e fu lly . O n th e o th e r h a n d , it w o u ld

R e c e n t ly , h o w e v e r , in c r e a s in g

c r itic is m

of

m o n e ta r y

sy stem

an d

d eserve

to

be

b e a m is ta k e to a llo w t h e s e c r it ic is m s to o v e r ­

flo a tin g r a tes h a s b e e n h e a r d . T h e m o s t p r e v a ­

sh a d o w th e b e n e fits th at g r ea te r e x c h a n g e - r a te

le n t c r it ic is m is th at e x c h a n g e - r a te flu c tu a tio n s

fle x ib ilit y h a s y ie ld e d .




E x c h a n g e -r a te flu c tu a ­

481

Statements to Congress

tio n s h a v e b e e n la r g e , to b e s u r e , b u t in g o o d

W ith th is in m in d , a n a ly s ts h a v e c o n s tr u c te d

part t h e s e flu c tu a tio n s h a v e r e fle c te d th e d i s ­

w e ig h t e d a v e r a g e s o f c o u n t r ie s ’ e x c h a n g e r a tes;

tu rb ed n atu re o f o u r t im e s . S in c e M a r c h 1 9 7 3

th e s e c a lc u la tio n s

w e h a v e e x p e r ie n c e d

a n d u n p r e d ic ta b le

“ e f f e c t iv e e x c h a n g e r a te ” o f a p a r ticu la r c u r ­

rates o f in fla tio n , a w o r ld w id e r e c e s s io n , an d

r e n c y . I h a v e p r o v id e d a b r ie f d e s c r ip tio n o f

th e

end

of

th e

h ig h

boom

in

c o m m o d it y

are

s o m e t im e s

la b e le d

th e

p r ic e s .

a lte r n a tiv e m e th o d s o f c a lc u la t in g e f f e c t iv e e x ­

M a s s iv e in c r e a s e s in o il p r ic e s h a v e p r o d u c e d

c h a n g e ra tes in th e a p p e n d ix to th is t e s t i m o n y .1

la r g e s h ifts in trad e f lo w s , an d th e p r o b le m s

F o r th e U . S . d o lla r , in c o n tr a st to s o m e o th e r

c o n n e c t e d w ith th e r e c y c lin g o f in v e s t m e n t s o f

c u r r e n c ie s , a lte r n a tiv e m e a s u r e s o f an e f f e c t iv e

th e O r g a n iz a tio n o f P e tr o le u m E x p o r tin g C o u n ­

rate y ie ld rather s im ila r r e s u lts .

tr ie s (O P E C ) to c o u n tr ie s in n e e d o f fin a n c in g
h a v e c r e a te d fu rth er u n c e r ta in tie s . F in a lly , c o n ­
sid e r a b le u n c e r ta in ty h a s p r e v a ile d c o n c e r n in g
th e p r e f e r e n c e s o f O P E C m e m b e r s fo r v a r io u s
fin a n c ia l a s s e t s . A s s e s s m e n t s that c o u ld b e m a d e

TO

W H A T

C E N T R A L
IN

E X T E N T
B A N K S

E X C H A N G E

SH O U L D
IN T E R V E N E

M A R K E T S?

b y m a r k e t p a r tic ip a n ts o f th e p r o b a b le im p a c ts

F lo a t in g h a s b e e n te m p e r e d b y o ffic ia l in te r v e n ­

o f th e s e fa c to r s o n in d iv id u a l c o u n tr ie s h a v e

tio n in e x c h a n g e m a r k e ts . T h e o ld s y s t e m o f

c h a n g e d r a p id ly . T h e s e c h a n g in g a s s e s s m e n t s

fix e d ra tes r eq u ire d in te r v e n tio n to b e c a rr ie d

have

in turn g e n e r a te d la r g e

c h a n g e r a te s.

But

c h a n g e s in e x ­

s u c h s h o c k s to

th e w o r ld

to th e p o in t o f n e a r ly c o m p le t e s ta b ility . U n d e r
flo a tin g , in te r v e n tio n h a s u s u a lly b e e n c a rr ie d

e c o n o m y w o u ld h a v e r eq u ire d u n u s u a lly la r g e

l e s s fa r.

an d fr e q u e n t e x c h a n g e - r a te c h a n g e s u n d e r a n y

m a n y , S w it z e r la n d , F r a n c e , I ta ly , J a p a n , an d

B u t s o m e c o u n tr ie s — in c lu d in g G e r ­

m o n e ta r y s y s t e m a n d w o u ld p r o b a b ly h a v e r e ­

th e

su lte d in s o m e e x c h a n g e -m a r k e t c r is e s u n d e r a

su b s ta n tia l s c a le in a tte m p ts to m o d if y th e e x ­

U n it e d

K in g d o m — h a v e

in te r v e n e d

on

a

r e g im e o f fix e d e x c h a n g e r a te s. A s a p r a c tic a l

c h a n g e v a lu e o f th eir c u r r e n c ie s . T h e first t w o

m a tter th e r e h a s b e e n n o a lte r n a tiv e to g r ea te r

c o u n tr ie s

fle x ib ility

m o d e r a te th e a p p r e c ia tio n o f th e ir c u r r e n c ie s ,

in

exch an ge

r a te s,

and

fo r

so m e

c o u n tr ie s th e r e m a y b e n o n e fo r th e f o r e s e e a b le

w h ile

fu tu r e .

d ir e c te d

T h e p r o b le m s

o f th e

p resen t

sy stem

have

have

in te r v e n e d

in te r v e n tio n

by

p r e d o m in a n tly

th e

p r e d o m in a n t ly ,

but

o th e r s

has

to

been

n ot e x c lu s iv e ly ,

to w a r d su p p o r tin g th e ir c u r r e n c ie s .

b e e n e x a g g e r a te d b y a t e n d e n c y o f p u b lic a t­

In te r v e n tio n in itia te d b y fo r e ig n g o v e r n m e n ts

te n tio n to c o n c e n tr a te o n th o s e f o r e ig n c u r r e n ­

to su p p o rt th e ir c u r r e n c ie s h a s b e e n fin a n c e d ,

c ie s s h o w in g th e w id e s t flu c tu a tio n s v i s - a - v i s th e

as in th e p a s t, p a r tly b y th e a c c u m u la t io n or

U . S . d o lla r . T h is in part r e fle c ts th e fa c t that

r e d u c tio n o f r e s e r v e s . B u t in s o m e c a s e s r e c e n t

in s o m e c a s e s an u p w a r d tren d in a c u r r e n c y

in te r v e n tio n h a s b e e n fin a n c e d b y o ffic ia l b o r ­

h a s te n d e d to attract in c r e a s in g a c tiv ity in to th e

r o w in g

m a r k e t fo r th at c u r r e n c y a s s p e c u la t iv e in te r e st

p a r tic u la r ly th e E u r o -d o lla r m a r k e t. In a d d itio n ,

o f d o lla r s

in

p r iv a te

c r e d it m a r k e ts ,

in it h a s m o u n te d . In p a r tic u la r , w id e s w in g s

s o m e “ in te r v e n tio n ” h a s n o t d ir e c tly in v o lv e d

in th e G e r m a n m ark a n d in th e S w is s fra n c

g o v e r n m e n ts at a ll b u t h a s ta k e n th e fo r m o f

a g a in s t th e d o lla r h a v e d o m in a te d th e n e w s fr o m

o ffic ia lly d ir e c te d b o r r o w in g o f fo r e ig n c u r r e n ­

th e e x c h a n g e m a r k e ts . B u t a ll fo r e ig n c u r r e n c ie s

c ie s b y s ta te - c o n tr o lle d firm s. T h e s e o f fic ia lly

d o n o t m o v e u p a n d d o w n a g a in s t th e d o lla r

d ir e c te d tr a n sa c tio n s h a v e th e s a m e im p a c t o n

at th e s a m e tim e o r at th e s a m e rate. A n d it

e x c h a n g e r a tes

is m is le a d in g to d e s c r ib e th e m o v e m e n t in th e

e x c h a n g e - m a r k e t in te r v e n tio n . T o g i v e ju st o n e

as m ore

tr a d itio n a l fo r m s

of

d o lla r b y c o n c e n tr a tin g o n a p a r ticu la r f o r e ig n

in d ic a t io n o f m a g n itu d e s , in th e first h a lf o f

c u r r e n c y th at is c u r r e n tly th e c e n te r o f m a r k e t

1 9 7 4 a lo n e e x c h a n g e -m a r k e t in te r v e n tio n o f a ll

a tte n tio n . T h e d o lla r h a s r is e n s in c e M a r c h 1 9 7 3
w ith r e s p e c t to s e v e r a l m a jo r f o r e ig n c u r r e n c ie s
in c lu d in g s te r lin g , th e C a n a d ia n d o lla r , lir a , an d
th e J a p a n e s e y e n .




Available upon request from Publications Services, Divi­
sion of Administrative Services, Board of Governors of the
Federal Reserve System, Washington, D.C. 20551.

482

Federal Reserve Bulletin □ August 1975

th e s e ty p e s to g e th e r a m o u n te d to n e a r ly $ 2 0

o f U .S .

b illio n .

w h ic h c u r r e n tly sta n d s at a b o u t $ 1 6 b illio n . T h e

T h e g r ea t b u lk o f

in te r v e n tio n

reserve a ssets,

th e g r o s s a m o u n t o f

b y fo r e ig n

s w a p f a c ilit ie s u tiliz e d b y th e F e d e r a l R e s e r v e

c o u n tr ie s o c c u r s in d o lla r s . W h ile th e in te n t and

to fin a n c e e x c h a n g e -m a r k e t in te r v e n tio n are d e ­

p r in c ip a l e f f e c t h a v e b e e n w ith r e s p e c t to th e

s ig n e d to b e sh o r t-te r m c r e d its a n d n o t s u b s t i­

c u r r e n c y o f th e in te r v e n in g c o u n tr y , a s ig n if i­

tu te s

c a n t e f f e c t h a s b e e n e x e r te d th e r e b y u p o n th e

S ta te s at tim e s f a c e s a sig n ific a n t t e c h n ic a l d i f ­

d o lla r . S a le s o f d o lla r s in su p p o rt o f s te r lin g ,

fic u lty b e c a u s e , in o r d e r to in te r v e n e o n a n y b u t

fo r

reserve

a ssets.

F in a lly ,

th e

U n ite d

th e F r e n c h fr a n c , a n d th e lir a te n d to r a ise th e se

a m o d e s t s c a l e , it w o u ld h a v e to in te r v e n e in

c u r r e n c ie s r e la tiv e to th e d o lla r . A t th e sa m e

m a n y f o r e ig n c u r r e n c ie s .

t im e , th e a c tio n te n d s to d e p r e s s th e d o lla r w ith

th an o th e r c o u n t r ie s , U . S . in te r v e n tio n in ju st

r e s p e c t to o th e r c u r r e n c ie s . H e n c e , w h ile s o m e

o n e fo r e ig n c u r r e n c y c o u ld su b s ta n tia lly d isto r t

d o lla r in te r v e n tio n h a s b e e n s u p p o r tiv e o f th e

th e e x c h a n g e ra tes b e t w e e n that o n e c u r r e n c y

d o lla r , o n b a la n c e in te r v e n tio n b y c en tr a l b a n k s

an d a ll o th e r f o r e ig n c u r r e n c ie s .

fin a n c e d w ith r e s e r v e s or w ith b o r r o w e d d o lla r s
h a s in s o m e d e g r e e d e p r e s s e d th e d o lla r .

S in c e w e are la rg e r

B e c a u s e o f th e im p o r ta n t r o le th at f o r e ig n
o ffic ia l in te r v e n tio n p la y s in cu rren t e x c h a n g e -

In c o n tr a st to d o lla r in te r v e n tio n in itia te d b y

rate a r r a n g e m e n ts , g u id e lin e s fo r in te r v e n tio n

f o r e ig n g o v e r n m e n ts , in te r v e n tio n in itia te d b y

w ith in th e e x is t in g m ix e d s y s t e m o f e x c h a n g e -

th e U n it e d S ta te s s in c e M a r c h

1973 has been

rate a r r a n g e m e n ts h a v e b e e n d e v e lo p e d b y th e

q u ite m o d e s t an d lim ite d in its p u r p o se to m a in ­

C o m m it te e o f T w e n t y . A s a d o p te d in J u n e 1 9 7 4

ta in in g o r d e r ly m a r k e t c o n d it io n s b y s m o o th in g

by

te m p o r a r y

M o n e ta r y F u n d (I M F ), th e s e g u id e lin e s are th e

and

d is r u p tiv e

flu c tu a tio n s

in

ex­

c h a n g e m a r k e ts .

E x e c u t iv e

D ir e c to r s

first ste p in o u tlin in g

of

th e

th e

In te r n a tio n a l

r ig h ts an d r e s p o n ­

D is o r d e r in e x c h a n g e m a r k e ts m a y ta k e s e v ­

s ib ilit ie s o f c o u n tr ie s w it h in th e e v o lv i n g s y s ­

era l fo r m s . O n e s u c h fo r m is a w id e n in g sp re a d

te m . T h e g u id e lin e s e n c o u r a g e in te r v e n tio n d e ­

b e t w e e n b id a n d o ffe r r a te s. In tim e s o f e x tr e m e

s ig n e d to m a in ta in o r d e r ly m a r k e t c o n d it io n s b y

d is tu r b a n c e , b id s an d o ffe r s m a y d isa p p e a r a lt o ­

m itig a tin g

g e th e r . R a te m o v e m e n t s th at are r e la tiv e ly d i s ­

c h a n g e -r a te c h a n g e s . A m e m b e r m a y a ls o in te r ­

c o n tin u o u s r e p r e se n t a n o th er fo r m o f d iso r d e r .

v e n e to m o d e r a te m o v e m e n t s in e x c h a n g e r a tes

S o m e p a r tic ip a n ts in e x c h a n g e m a r k e ts e n g a g e

o v e r lo n g e r tim e p e r io d s (m o n th to m o n th or

d a y -to -d a y

an d

w e e k -to -w e e k

ex-

in fr e q u e n t in -a n d -o u t tr a d in g b a s e d o n v e r y

qu arter to q u arter) w h e r e fa c to r s r e c o g n iz e d to

sh o r t-te r m o b j e c tiv e s ; flu c tu a tio n s g e n e r a te d b y

b e te m p o r a r y are at w o r k . T h e g u id e lin e s a ls o

s u c h tr a d in g m a y te m p o r a r ily s w a m p m o r e f u n ­

a llo w

d a m e n ta l fa c to r s . V a r io u s o th e r c ir c u m s ta n c e s

e x c h a n g e r a tes or fo r th e d e v e lo p m e n t o f th eir

m a y te m p o r a r ily b lo c k a r e s p o n s e to f u n d a m e n ­

reserves

ta ls.

t h o u g h , to d a te , n o c o u n tr y h a s a tte m p te d to

W h e n a p p r a isin g e x c h a n g e -m a r k e t in te r v e n ­
tio n b y th e U n it e d S t a te s ,

it is im p o r ta n t to

c o u n tr ie s
in

to e s t a b lis h

c o n s u lta tio n

ta r g et z o n e s fo r

w ith

th e

F u n d — a l­

s p e c if y z o n e s fo r e x c h a n g e r a tes or fo r c h a n g e s
in

th eir

reserve

p o s it io n s .

T h ese

g u id e lin e s

r e m e m b e r th e d iffic u ltie s an d c o n s tr a in ts that

a llo w g r ea te r s c o p e fo r in te r v e n tio n th an w e are

n e c e s s a r ily c ir c u m s c r ib e th e s e o p e r a tio n s . T h e

w illin g to u t iliz e .

to ta l v o lu m e o f fin a n c ia l a s s e ts d e n o m in a te d in

T h e g u id e lin e s a ls o r e c o g n iz e that m e m b e r s

U . S . d o lla r s m a y b e o n th e or d e r o f $ 5 tr illio n ,

w ho engage

in c lu d in g su b s ta n tia l a m o u n ts h e ld b y fo r e ig n e r s

sh o u ld b ear in m in d th e in te r e sts o f th e is s u in g

in th e U n ite d

c o u n tr ie s in w h o s e c u r r e n c ie s th e y in te r v e n e .

S ta te s

an d

m a r k e t, and

a r e la tiv e ly

th e s e

a s s e ts

d o lla r

is

in

th e

E u r o -d o lla r

la r g e p r o p o r tio n

in te r n a tio n a lly

of

m o b ile .

H e n c e p o te n tia l s h ifts b e t w e e n th e d o lla r and

in

e x c h a n g e -m a r k e t in te r v e n tio n

S in c e m o s t in te r v e n tio n

in v o l v e s d o lla r s , th e

U n it e d S ta te s h a s a le g it im a te c o n c e r n in th is
r eg a r d .

f o r e ig n c u r r e n c ie s are v e r y la r g e . T h e p o te n tia l

B e fo r e le a v in g th e s u b je c t o f in te r v e n tio n in

s c a le o f U . S . in te r v e n tio n , m o r e o v e r , w o u ld b e

e x c h a n g e m a r k e ts , I w o u ld lik e to p o in t o u t that

b o u n d to r e m a in m o d e s t , g iv e n th e sm a ll s iz e

m o n e ta r y p o l i c i e s , a n d in p a r ticu la r c e n tr a l b a n k




483

Statements to Congress

o p e r a tio n s in d o m e s t ic fin a n c ia l m a r k e ts , h a v e

e c o n o m ic r e la tio n s . F o r a la r g e c o u n tr y w ith a

im p o r ta n t im p lic a t io n s fo r e x c h a n g e r a te s. T h is

fo r e ig n trad e s e c to r th at is s m a ll r e la tiv e to its

is e s p e c ia lly tru e fo r a c u r r e n c y s u c h a s th e

d o m e s t ic e c o n o m y , a p r o p e r o r d e r in g o f p r io r i­

d o lla r b e c a u s e U . S . m o n e y m a r k e ts are fr e e o f

tie s p o in ts in th e o p p o s it e d ir e c tio n .

d ir e c t c o n tr o ls a n d b e c a u s e th e d o lla r is w id e ly

E v e n a c o m m itm e n t to m a in te n a n c e o f e x ­

h e ld b y in d iv id u a ls a n d firm s th at are s e n s it iv e

c h a n g e r a tes w ith in n a r r o w m a r g in s fo r a t e m ­

to in te r e st ra tes o n a lte r n a tiv e f o r e ig n c u r r e n c y

p o r a r y p e r io d w o u ld h a v e to b e c a r e fu lly s a f e ­

a s s e t s . H o w e v e r , m o s t c o u n tr ie s — a n d , a g a in ,

g u a r d e d b y an a g r e e d a d ju stm e n t m e c h a n is m .

p a r tic u la r ly th e U n it e d S ta te s — fin d it in th eir

In su c h a m e c h a n is m , su r p lu s an d d e fic it c o u n ­

in te r e st to g i v e p r io r ity to d o m e s t ic o b j e c tiv e s

tr ie s w o u ld h a v e to sh a re th e b u rd en o f a d ju st­

in d e te r m in in g th e ir m o n e ta r y p o l i c i e s . H e n c e

m e n t,

m o n e ta r y p o l i c i e s m a y h a v e u n w a n te d r e p e r ­

c h a n g e s in r a te s , p e r h a p s a lo n g th e lin e s o f th e

c u s s io n s

o u tlin e o f r e fo r m n e g o tia t e d b y th e C o m m itt e e

in

m o n e ta r y

exch ange

p o lic y ,

fo r

m a r k e ts— an e a s in g
in s t a n c e ,

p r o d u c in g

of
a

c h a n g e -m a r k e t

W ith in

in te r v e n tio n

m ay

lim it s , e x be

a b le

to

c u s h io n s u c h e f fe c t s .

it w o u ld

a ls o

have

to

a llo w

fo r

o f T w e n ty o f th e I M F .
T h e s e p r o b le m s a s s o c ia te d w ith a s y s t e m o f

w e a k e n in g in th e e x c h a n g e r a te, p o s s ib ly w ith
in fla tio n a r y c o n s e q u e n c e s .

an d

c o n v e r tib le c u r r e n c ie s b a s e d o n fix e d r a tes m a k e
it c le a r that an o p tio n to flo a t m u s t b e a v a ila b le
as part o f th e F u n d ’s e x c h a n g e -r a te r e g im e . A
s y s t e m u n d e r w h ic h a c o u n tr y c o u ld b e d e n ie d

SH O U L D
B Y

T H E

FO R

A

th e r ig h t to flo a t, o r w h e r e s o m e tim e lim it fo r

A U T H O R IZ A T IO N
IM F

B E

C O U N T R Y

r e tu rn in g

R E Q U IR E D
T O

to

fix e d

p a r itie s

w as

s p e c if ie d ,

or

w h e r e flo a tin g c o u n tr ie s c o u ld b e p e n a liz e d in

FL O A T ?

s o m e fo r m ,

T h e c o n s tr a in ts thj^t c ir c u m s c r ib e in te r v e n tio n

w o u ld

not m eet

th e f o r e s e e a b le

n e e d s o f th e U n ite d S ta te s .

o p e r a tio n s d e s c r ib e d in th e fo r e g o in g d is c u s s io n

A flo a tin g rate r e g im e , o f c o u r s e , is n o t a

a p p ly a fo r tio r i to th e e x t r e m e c a s e o f in te r v e n ­

lic e n s e

tio n — th at i s , a tte m p te d m a in te n a n c e o f a fix e d

p r a c t ic e s . A c o u n tr y w ith a flo a tin g c u r r e n c y c a n

ra te. S u c h a fix e d rate w o u ld b e im p lie d if th e

b e a g o o d in te r n a tio n a l c it iz e n an d h a s an o b l i ­

fo r

u n c o o p e r a t iv e

f o r e ig n

exchange

IM F h a d th e p o w e r to d e n y to a m e m b e r th e

g a tio n to a ct r e s p o n s ib ly an d fu lfill its in te r n a ­

rig h t to flo a t its c u r r e n c y , b e c a u s e th e a lte r n a tiv e

tio n a l c o m m itm e n ts . A c o m m itm e n t to c o o p e r ­

to flo a tin g is a fix e d rate m a in ta in e d b y in te r ­

a tiv e b e h a v io r rather th a n to a p a r ticu la r fo r m

v e n t io n , or c o n t r o ls , or tig h t p o lic y c o o r d in a ­

o f e x c h a n g e - r a te r e g im e s h o u ld b e at th e c o r e

tio n , or s o m e c o m b in a tio n o f th e s e . T h e rig h t

o f a c o u n t r y ’s o b lig a t io n s to th e IM F .

o f a c o u n tr y to flo a t w ith o u t p rio r a u th o r iz a tio n
b y th e IM F w a s o n e o f th e p r in c ip a l m a tter s
in d is p u te at th e r e c e n t m e e t in g o f th e IM F
In te r im C o m m itte e in P a r is.
E x c h a n g e - r a t e s ta b ility is p r e fe r a b le to in s ta ­

T H E
A S

R O L E
A

O F

G O L D

R E SE R V E

SA LE S

O F

I have

A SSE T

G O L D

in d ic a te d ,

B Y

th e

A N D

T H E

IM F

b ility . B u t fo r r e a s o n s a lr e a d y g i v e n , it w o u ld

As

b e d iffic u lt fo r th e U n it e d S ta te s to m a in ta in

p a r ticu la r

e x c h a n g e r a tes w ith in n a r r o w m a r g in s b y in te r ­

d e p e n d in th e o r y a n d in p r a c tic e o n th e n atu re

v e n tio n a lo n e an d u n d e s ir a b le to a ttem p t to d o

o f o th e r a s p e c ts o f th e in te r n a tio n a l m o n e ta r y

e x c h a n g e -r a te

a p p r o p r ia te n e ss
a r r a n g e m e n ts

of

w ill

s y s t e m , s u c h a s th e p la c e o f r e s e r v e a s s e t s in

so .
N o r d o e s c lo s e p o lic y

c o o r d in a tio n o ffe r a

th at s y s t e m . S im ila r ly , th e is s u e o f th e p o s s ib le

v ia b le a lte r n a tiv e as a m e a n s o f m a in ta in in g

u s e o f th e g o ld n o w h e ld b y th e IM F m u s t b e

e x c h a n g e r a tes w ith in n a r r o w m a r g in s , at le a s t

e x a m in e d in th e c o n t e x t o f th e b r o a d e r is s u e

fo r

o f th e r e la tio n s h ip b e t w e e n g o ld a n d o th e r r e ­

a

la r g e

c o u n tr y

lik e

th e

U n it e d

S ta te s.

S m a lle r c o u n tr ie s m a y fin d it p r e fe r a b le to lim it

se r v e a s s e ts in th e in te r n a tio n a l m o n e ta r y s y s ­

th e ir fr e e d o m o f d o m e s t ic p o l i c y in o rd er to

te m .

o b ta in th e b e n e fits o f m o r e s ta b le in te r n a tio n a l




A s you know ,

th e U n ite d

S ta te s w a n ts to

484

Federal Reserve Bulletin □ August 1975

e n su r e th a t th e r o le o f g o ld in th e in te r n a tio n a l

o n c e th e m a r k e t a d ju ste d to

m o n e ta r y s y s t e m is g r a d u a lly r e d u c e d . In te r n a ­

in c r e a s e d s u p p lie s fr o m th is s o u r c e , th e a c tu a l

th e p r o s p e c t o f

tio n a l r u le s o f b e h a v io r s h o u ld b e str u c tu r ed to

s a le s s h o u ld n o t h a v e a p a r tic u la r ly p r o n o u n c e d

h e lp

e f fe c t o n th e m a r k e t p r ic e . M o r e o v e r , su c h s a le s

a c h ie v e th is o b j e c t iv e .

T h e s e m ig h t in ­

b y th e IM F are l ik e ly to b e s m a ll a n d g r a d u a l.

c lu d e :
1. A p r o h ib itio n o n a n y a r r a n g e m e n ts that

T h e d a n g e r o f m a n ip u la tio n o f th e g o ld p r ic e

w o u ld h a v e th e e f fe c t o f fix in g a p r ic e , or a

a s a c o n s e q u e n c e o f IM F s a le s o f g o ld is fu rth er

p r ic e r a n g e , fo r g o ld .

red u ced by

m ore gen eral

c o n s id e r a tio n s .

An

2 . A g lo b a l lim ita tio n o n th e h o ld in g s o f g o ld

a ttem p t b y a n y c o u n tr y or g r o u p o f c o u n tr ie s

b y g o v e r n m e n ts a n d th e IM F ta k e n to g e th e r ; n o

to fix an o ffic ia l p r ic e o f g o ld w o u ld e n c o u n te r

g o v e r n m e n t w o u ld b e a llo w e d to p u r c h a s e g o ld

s e v e r e d iffic u ltie s o w i n g to th e e x is t e n c e o f a

fr o m

fr e e m a r k e t fo r g o ld . A n o ffic ia l p r ic e c o u ld n o t

w o u ld

th e

p r iv a te

p u sh

m a r k e t if

to ta l h o ld in g s

su ch

a p u rch ase

above

th e

g lo b a l

lo n g d e v ia t e fr o m th e fr e e p r ic e b e c a u s e m o n e ­

am ong

b e lo w th e fr e e p r ic e a n d w o u ld n o t w is h to b u y

lim it.
3.

tary a u th o r itie s w o u ld n o t w is h to s e ll at p r ic e s
P r o h ib itio n

of

g o ld

tr a n sa c tio n s

m o n e ta r y a u th o r itie s , e x c e p t in s p e c ia l c ir c u m ­

a b o v e it. M a in ta in in g e q u a lity b e t w e e n a fix e d

s ta n c e s s u c h as an e m e r g e n c y n e e d fo r a c o u n tr y

o ffic ia l p r ic e an d th e fr e e p r ic e w o u ld r eq u ire

to m o b iliz e its g o ld h o ld in g s ; g o ld w o u ld n o t

at le a s t o n e m o n e ta r y a u th o r ity to sta n d r e a d y

b e u s e d , d ir e c tly or in d ir e c tly , a s a m e a n s o f

to b u y or s e ll u n lim ite d q u a n titie s o f g o ld . S u c h

s e ttlin g p a y m e n ts

im b a la n c e s e x c e p t

in su c h

4.

C o n tin u a tio n

o f th e

rig h t o f in d iv id u a l

c o u n tr ie s to s e ll g o ld to th e p r iv a te m a r k e t.
R u le s g o v e r n in g th e u s e o f g o ld in tr a n sa c ­
tio n s w ith

an a r r a n g e m e n t w a s a tte m p te d u n d e r th e s o c a lle d G o ld P o o l a r r a n g e m e n ts in th e 1 9 6 0 ’s an d

s p e c ia l c ir c u m s t a n c e s .

p r o v e d u n w o r k a b le .
T h e e s ta b lis h m e n t o f r u le s

o f c o n d u c t fo r

in d iv id u a l g o v e r n m e n ts a n d fo r th e IM F a lo n g

a n d d ir e c tly b y th e IM F are a ls o

th e lin e s I h a v e in d ic a te d is c o n s is t e n t w ith th e

n e e d e d , su c h a s th at g o ld sh o u ld n o lo n g e r b e

o b j e c t iv e o f g r a d u a lly r e d u c in g th e r o le o f g o ld

a c c e p te d b y th e F u n d e ith e r fo r q u o ta p a y m e n ts

in th e

or fo r a n y o th e r p u r p o s e

a n d that th e F u n d

g r a d u a l a p p r o a c h to th is p r o b le m is c le a r ly e s ­

sh o u ld b e g r a n te d th e s a m e a u th o r ity th at e a c h

s e n tia l b e c a u s e g o ld is an im p o r ta n t a s s e t in th e

in te r n a tio n a l m o n e ta r y

sy stem .

Y et

a

m e m b e r g o v e r n m e n t n o w h a s to s e ll g o ld fr o m

in te r n a tio n a l r e s e r v e s o f a f e w c o u n tr ie s . It is

its p r e se n t s to c k

u n r e a lis tic to th in k th at th is a s s e t c a n b e e l i m i ­

p roceeds

fr o m

in th e p r iv a te

su ch

g o ld

s a le s

m a r k e t.
by

th e

The
IM F

n a te d fr o m th e in te r n a tio n a l m o n e ta r y s y s te m

s h o u ld b e u s e d fo r in te r n a tio n a lly a g r e e d u p o n

o v e r n ig h t. I n s te a d , its r o le s h o u ld b e g r a d u a lly ,

p u r p o s e s . M o b iliz a t io n o f a p o r tio n o f th e I M F ’s

e f f e c t iv e l y , an d e q u ita b ly r e d u c e d .

g o ld th r o u g h s a le s in th e p r iv a te m a r k e t c o u ld
ad d to th e r e s o u r c e s a v a ila b le to a s s is t th o s e
c o u n tr ie s m o s t s e r io u s ly a ffe c te d b y th e r is e in
o il p r ic e s ; s u c h s a le s w o u ld a ls o h e lp to e n su r e
th at th e s to c k o f m o n e ta r y

g o ld

is g r a d u a lly

red uced .

T H E
A S

R O L E
A

A N D

O F

R E SE R V E
T H E

T H E

D O L L A R

C U R R E N C Y

“ D O L L A R

O V E R H A N G ”

I turn n o w to th e q u e s t io n o f th e r o le o f r e s e r v e

S a le s o f th e I M F ’s g o ld o n th e p r iv a te m a r k e t

c u r r e n c ie s , an d p a r tic u la r ly th e r o le o f th e U . S .

s h o u ld n o t b e d e s ig n e d to fix th e m a r k e t p r ic e

d o lla r , in th e in te r n a tio n a l m o n e ta r y s y s t e m . In

o f g o ld . S u c h s a l e s , to g e th e r w ith an e f fe c t iv e

a n a ly z in g th is s u b je c t, a n d p a r tic u la r ly in c o n ­

g lo b a l lim it o n th e s to c k o f o ffic ia lly h e ld g o ld ,

s id e r in g

w o u ld m a k e it m o r e d iffic u lt fo r in d iv id u a l g o v ­

n e c e s s a r y to k e e p in m in d th e m u ltip le r o le s o f

th e

s o - c a lle d

d o lla r

overh ang,

it is

e r n m e n ts , if th e y w e r e s o in c lin e d , to fix th e

th e d o lla r in th e in te r n a tio n a l m o n e ta r y s y s te m :

m a r k e t p r ic e o f g o ld . T h e a n n o u n c e m e n t o f a

th e d o lla r is b o th th e w o r ld ’s m o s t w i d e l y u s e d

p r o g r a m o f s a le s o f IM F g o ld o n th e p r iv a te

in te r v e n tio n c u r r e n c y a n d its p r in c ip a l r e s e r v e

m a r k e t c o u ld d e p r e s s th e p r ic e o f g o ld if th e

c u r r e n c y ; th e d o lla r is u s e d b y firm s an d in d i­

a n n o u n c e m e n t to o k th e p u b lic b y su r p r ise . B u t

v id u a ls in m a n y c o u n t r ie s b o th to d e n o m in a te




485

Statements to Congress

a n d to e x e c u t e th e ir tr a n sa c tio n s; a n d , f in a lly ,
d o lla r -d e n o m in a te d

a ssets

an d

lia b ilit ie s

ord er to in te r v e n e in th e e x c h a n g e m a r k e ts in ­

are

ste a d o f r e d u c in g th e ir a c tu a l h o ld in g s o f d o l ­

b o th w id e ly h e ld a n d is s u e d b y firm s a n d in d i­

la r s. T h is is in d ic a t iv e o f a d e s ir e to p r e s e r v e

v id u a ls a r o u n d th e w o r ld .

e x is t in g l e v e l s o f r e s e r v e s .

T r a d itio n a lly , th e te rm d o lla r o v e r h a n g h a s
been

a p p lie d

to

th e

h o ld in g s

of

d o lla r s

by

F o u r th , s o m e c o u n tr ie s th at h a v e v e r y la r g e
d o lla r

a c c u m u la t io n s

r e c e iv e d

th ese

in

part

f o r e ig n m o n e ta r y a u th o r itie s th at are th o u g h t to

th r o u g h an in flo w o f liq u id c a p ita l. T h e s e fu n d s

b e in e x c e s s o f th e ir d e s ir e d h o ld in g s . L e a v in g

c o u ld d e p a r t s o m e d a y a n d th e r e fo r e m a y m a k e

a s id e th e a c c u m u la tio n s o f d o lla r -d e n o m in a te d

d e s ir a b le th e m a in te n a n c e o f s o m e w h a t la rg e r

a s s e t s b y th e o il- e x p o r t in g c o u n tr ie s , w h ic h are

reserves.

m o r e p r o p e r ly v i e w e d as in v e s tm e n ts an d n o t

It te n d s to b e m is le a d in g , t h e r e fo r e , in th e

a s r e s e r v e s , th e b u lk o f th e d o lla r b a la n c e s n o w

p r e se n t

h e ld b y f o r e ig n m o n e ta r y a u th o r itie s w a s a c c u ­

h o ld in g s a s an o v e r h a n g . T h e p o s s ib ilit y e x is t s ,

m u la te d

o f c o u r s e , that c o u n tr ie s n o w h o ld in g d o lla r s

b efo re

th e

w id e s p r e a d

a d o p tio n

of

e n v ir o n m e n t

to

v ie w

o ffic ia l

d o lla r

flo a tin g e x c h a n g e r a tes in M a r c h 1 9 7 3 . In d e ­

w i l li n g l y m a y c h a n g e th e ir m in d s . In a n y e v e n t ,

f e n s e o f th e ir e x c h a n g e p a r itie s , s e v e r a l c o u n ­

e v e n to th e e x te n t th at o b s e r v e r s d o s p e a k o f

tr ie s a c c u m u la te d m a s s iv e

an o v e r h a n g , th e U n it e d S ta te s c a n n o t n e c e s ­

r e s e r v e s in 1 9 7 0 - 7 1

a m o u n ts o f d o lla r

a n d in e a r ly 1 9 7 3 . T h e r e

s a r ily b e h e ld r e s p o n s ib le fo r it.

is n o w a y o f k n o w in g w h e th e r or n o t all o f th e s e

T h e c o n c e p t o f th e s o - c a lle d d o lla r o v e r h a n g

b a la n c e s are n o w “ w i l l i n g l y ” h e ld , b u t o n th e

h a s s o m e t im e s b e e n e x t e n d e d to in c lu d e p r iv a te

b a s is o f th e f o l lo w in g fa c to r s th e r e is r e a s o n

h o ld in g s o f d o lla r -d e n o m in a te d a s s e t s , p a r tic u ­

to b e l ie v e th at fo r th e m o s t part th e y are.

la r ly th o s e ta k in g th e fo r m

F ir st, s in c e M a r c h 1 9 7 3 , u n d e r a r e g im e o f
flo a tin g e x c h a n g e

r a te s ,

th e a c c u m u la tio n

o f E u r o -c u r r e n c y

c la im s . In m y v i e w , s u c h an e x t e n s io n o f th e

of

c o n c e p t o f th e d o lla r o v e r h a n g la c k s e c o n o m ic

d o lla r s b y f o r e ig n a u th o r itie s is n o lo n g e r an

m e a n in g . A t a n y m o m e n t in tim e th e s e p r iv a te

o b lig a t io n b u t rather an o p tio n . S o m e c o u n tr ie s

c la im s are w i l li n g l y h e ld . F o r th e m o s t p art,

m a y o n o c c a s io n in te r v e n e to h o ld d o w n th eir

th e y r e p r e se n t th e liq u id a s s e ts o f e n te r p r is e s

e x c h a n g e rate a n d s o

a c c u m u la te d o lla r s an d

e x p a n d th e ir m o n e y s u p p ly rather th an s e e th eir

an d in v e s to r s th at are r e q u ir e d fo r th e n o r m a l
c o n d u c t o f th eir o p e r a tio n s .

c u r r e n c ie s a p p r e c ia te . E v e n if o n e w e r e to r e ­

It is tr u e , o f c o u r s e , th at th e p r iv a te d e m a n d

g a rd th e s e d o lla r s as “ u n w a n te d ” a lth o u g h th e y

fo r d o lla r - d e n o m in a t e d a s s e t s , a s a g a in s t a s s e ts

w e r e a c q u ir e d b y c h o i c e , th e in flo w s m a y b e

in o th e r c u r r e n c ie s ,

q u ite u n r e la te d to th e U . S . b a la n c e o f p a y m e n t s .

c o u n tr ie s d e s ir e d to o f f s e t th e p r e s s u r e s o n e x ­

is s u b je c t to

change.

If

I n te r v e n tio n m a y b e e n g a g e d in b y th e E u r o p e a n

c h a n g e r a tes th at r e s u lt fr o m s u c h s h ift s in a s s e t

E c o n o m ic C o m m u n ity (E E C ) m e m b e r s , fo r e x ­

d e m a n d s , th e y w o u ld h a v e to b u y or s e ll d o lla r s

a m p le , fo r th e p u r p o s e s o f k e e p in g
c u r r e n c ie s w ith in

th e ir

“ sn a k e”

a g r e e d -u p o n m a r g in s .

in th e e x c h a n g e m a r k e ts . O ffic ia l p u r c h a s e s o f
d o lla r s u n d e r

s u c h c ir c u m s ta n c e s

c o u ld

con­

A lt e r n a tiv e ly , a c o u n tr y m a y b e fa c e d w ith th e

c e iv a b ly b e in te r p r e te d a s a d d itio n s to th e p o ­

c h o ic e o f in te r v e n in g in d o lla r s or le ttin g its

te n tia l d o lla r o v e r h a n g in th e m o r e tr a d itio n a l

e x c h a n g e rate a p p r e c ia te or d e p r e c ia te as a r e s u lt

s e n s e o f th e te rm . In th e p r e s e n t e n v ir o n m e n t,

o f th e a tte m p te d m o v e m e n t o f O P E C fu n d s .

h o w e v e r , situ a tio n s in w h ic h m a r k e t p r e ssu r e s

S e c o n d , th e r e c e n t u n c e r ta in tie s an d b a la n c e

le a d c o u n tr ie s to s e ll d o lla r s are a s lik e ly to

o f p a y m e n ts d iffic u ltie s a s s o c ia t e d w ith th e r is e

o c c u r a s s itu a tio n s in w h ic h c o u n tr ie s are le d

in p e tr o le u m p r ic e s h a v e p u t a p r e m iu m o n th e

to p u r c h a s e d o lla r s . C o u n tr ie s are n o t o b lig e d

h o ld in g

to d o e ith e r .

of

reserves.

T h is

d e v e lo p m e n t

s tr e n g th e n s th e p r e s u m p tio n th at cu rren t o ffic ia l
h o ld in g s o f d o lla r s are w i l li n g l y h e ld .
T h ir d , a s

in d ic a te d e a r lie r ,

T h e u s e o f th e d o lla r a s a r e s e r v e c u r r e n c y ,
w h ic h is th e c o r o lla r y o f th e c o n c e r n a b o u t an

c o u n tr ie s h a v e

o v e r h a n g , h a s a s s o c ia t e d c o s t s a n d b e n e fits fr o m

fr e q u e n tly b o r r o w e d d o lla r s o n th e in te r n a tio n a l

th e U . S . p e r s p e c tiv e . T h e m a in a d v a n ta g e fo r

c a p ita l m a r k e ts a n d h a v e u s e d th e s e d o lla r s in

th e U n it e d S ta te s h a s b e e n th e g r ea te r fle x ib ility




486

Federal Reserve Bulletin □ August 1975

th is

( S D R ’s ) h a s b e e n s u g g e s t e d . A c o n s o lid a t io n

c o u n tr y h a s e x p e r ie n c e d b e c a u s e it c o u ld is s u e

o f d o lla r r e s e r v e s m a y w e l l b e in v o lv e d in th e

lia b ilit ie s in s e t tle m e n t o f a d e fic it. T h is p r e ­

e v e n tu a l e s ta b lis h m e n t o f th e S D R at th e c e n te r

of

b a la n c e

of

p a y m e n ts

fin a n c in g

th at

s u m e d a d v a n ta g e , o f c o u r s e , is g r e a tly r e d u c e d

o f th e in te r n a tio n a l m o n e ta r y s y s t e m . B u t s u c h

u n d e r a r e g im e o f flo a tin g e x c h a n g e r a te s. O n

p r o p o s a ls r a is e q u e s t io n s r e g a r d in g te r m s— in ­

th e o th e r h a n d , th e u s e o f th e d o lla r a s a r e s e r v e

te r e st r a te s, e x c h a n g e g u a r a n te e s , a m o r tiz a tio n

c u r r e n c y h a s d im in is h e d o u r fr e e d o m to p u r su e

p r o v is io n s — th at

an a c tiv e e x c h a n g e - r a t e p o l i c y . A s I h a v e n o te d

C o m m it te e o f

a b o v e , f o r e ig n

in te r v e n tio n d e c is io n s

have

a

str o n g in flu e n c e o n th e e x c h a n g e v a lu e o f th e
d o lla r , s o m e t im e s in w a y s d e tr im e n ta l to U . S .

w ere

T w e n ty

d is c u s s e d

d u r in g

n e g o t ia t io n s .

The

th e
an­

s w e r s to th e s e q u e s tio n s a r e , o f c o u r s e , c r u c ia l
to th e in te r e s ts o f th e U n ite d S ta te s .
I w o u ld n o t w a n t to p r e ju d g e th e is s u e o f
c o n s o lid a t io n . It m a y w e l l b e that a s th e in te r ­

o b j e c tiv e s .
I b e l ie v e th at o n b a la n c e th e u s e o f th e d o lla r

n a tio n a l m o n e ta r y s y s t e m e v o l v e s , th e c a s e m a y

a s a r e s e r v e c u r r e n c y h a s m a d e an im p o r ta n t

g a in in p e r s u a s iv e n e s s . W e are fo r tu n a te to h a v e

c o n tr ib u tio n to th e s m o o th fu n c tio n in g o f th e

b e e n a b le to o b s e r v e th e o p e r a tio n o f th e in te r ­

w o r ld e c o n o m y d u r in g its r e c e n t, s e v e r e d iffi­

n a tio n a l m o n e ta r y s y s t e m

c u lt ie s . F o r th e lo n g e r te r m , h o w e v e r , th e r o le

w ith o u t b e in g fo r c e d b y e v e n ts in to h a s ty ar­

to b e p la y e d b y th e d o lla r an d o th e r r e s e r v e

r a n g e m e n ts th at m ig h t n o t h a v e s to o d th e te st

in th e p a st 2 y e a r s

c u r r e n c ie s in th e in te r n a tio n a l m o n e ta r y s y s t e m

o f tim e . T h e ta sk fo r th e fu tu r e is to a n a ly z e

is an im p o r ta n t, o p e n q u e s tio n . A c o n s o lid a t io n

th o r o u g h ly a n d b u ild o n th e e x p e r ie n c e w e h a v e

o f d o lla r r e s e r v e s in to S p e c ia l D r a w in g R ig h ts

a c c u m u la te d .

S ta te m e n t
B o a rd

by

R o bert

o f G overn ors

C.

H o lla n d ,

□

M em b er,

te n tia l p r o b le m b a n k c a s e s . T h is a c tio n h a s h a d

o f th e F e d e r a l R e s e r v e

first p r io r ity a m o n g o u r b r o a d s w e e p o f s tu d ie s

S y s t e m , b e f o r e th e S u b c o m m itte e o n F in a n c ia l

a d d r e s s in g k e y p r o b le m a r ea s in b a n k in g s u p e r ­

I n s titu tio n s

B a n k in g ,

v is io n an d r e g u la tio n . It is h u m a n ly i m p o s s i ­

H o u s i n g , a n d U r b a n A f f a i r s , U . S . S e n a t e , J u ly

b le — a n d e v e n u n d e s ir a b le — fo r s u p e r v is o r s to

22, 1975.

p r e v e n t a ll b a n k p r o b le m s ; b u t it is p r a c tic a l

of

th e

C o m m itte e

on

to a s p ir e , a s w e d o , to r e c o g n iz in g p r o b le m s
e a r ly a n d m o v in g p r o m p tly to try to r e m e d y
I a m p le a s e d to a p p ea r b e fo r e th is s u b c o m m it ­

th e m .

t e e , o n b e h a lf o f th e B o a r d o f G o v e r n o r s o f th e

T h e r e r e m a in s , h o w e v e r , a g a p in th e r a n g e

F e d e r a l R e s e r v e S y s t e m , to d is c u s s th e B o a r d ’s

o f f e a s ib le r e m e d ia l a c tio n s that c o u ld b e u n ­

reason s

d e r ta k e n if p r e v e n t iv e m e a s u r e s s h o u ld s o m e ­

fo r

r e c o m m e n d in g

th e

e n a c tm e n t o f

h o w n o t s u c c e e d in fo r e s t a llin g a b a n k fa ilu r e .

le g is la t io n e m b o d ie d in S . 8 9 0 .
T h e fin a n c ia l e x p e r ie n c e s o f th e la st 2 y e a r s

In th at e v e n t u a lit y ,

th e

b e s t s o lu tio n o f

th e

h a v e r a is e d m a n y sig n ific a n t is s u e s w ith reg a rd

p r o b le m in m o s t c a s e s is fo r th e tr o u b le d b a n k

to th e r e g u la tio n a n d s u p e r v is io n o f th e N a t i o n ’s

to b e ta k e n o v e r b y a n o th e r b a n k . B a n k m e r g e r s ,

b a n k in g in s titu tio n s .

w h e r e p e r m itte d b y S ta te b r a n c h in g l a w s , c a n

O n e v e r y im p o r ta n t a rea th at w e at th e F e d e r a l
R e s e r v e are g i v in g

in c r e a s e d a tte n tio n is th e

s o m e t im e s s e r v e th is p u r p o se e f f e c t iv e l y . T h e
a lte r n a tiv e o f b a n k h o ld in g c o m p a n y a c q u is itio n

of

o f a f a ilin g b a n k , h o w e v e r , e v e n w h e r e p e r m it­

d e a lin g w ith p r o b le m b a n k s . T h e F e d e r a l R e ­

te d b y S ta te l a w s , is s u b s ta n tia lly in h ib ite d b y

d e v e lo p m e n t

of

m ore

e x p e d it io u s

m eans

se r v e S y s t e m is s tr e n g th e n in g its p r o g r a m c o v ­

tw o F e d e r a l sta tu to r y c o n s tr a in ts . O n e e n f o r c e s

e r in g b a n k s u n d e r its ju r is d ic tio n to p la c e in ­

c e r ta in tim e d e la y s in th e a p p r o v a l a n d c o n s u m ­

c r e a s e d e m p h a s is o n th e id e n tific a tio n , s u r v e il­

m a tio n o f a ll b a n k h o ld in g c o m p a n y a c q u is i­

la n c e , a n d t im e ly r e s o lu tio n o f cu rren t a n d p o ­

t io n s .




The

secon d

e f f e c t iv e l y

p r e v e n ts

any

487

Statements to Congress

h o ld in g c o m p a n y

a c q u is itio n o f b a n k s a c r o s s

g iv in g s u c h a u th o r itie s o n ly an in fo r m a l c o n ­
s u ltin g r o le v is - a - v i s th e B o a r d ’s fin al d e c is io n

S ta te l in e s .
In o u r v i e w , e ith e r or b o th o f th o s e lim ita tio n s
c a n in te r fe r e w ith a c tio n s n e e d e d to p r o te c t th e

in th e c a s e .
T h e B o a r d in S e c t io n

1 (1 ) o f S .

8 9 0 has

p u b lic in te r e st in s o m e c a s e s . A c c o r d in g ly , th e

r e c o m m e n d e d , first, th at th e r e g u la r 3 0 - d a y n o ­

B o a r d h a s p la c e d t w o se p a r a te sta tu to ry r e c o m ­

tic e p e r io d b e s h o r te n e d to 10 d a y s if th e B o a r d

m e n d a t io n s b e f o r e th e C o n g r e s s , b o th o f w h ic h

a d v is e s th e s u p e r v is o r y a u th o r ity th at an e m e r ­

are n o w e m b o d ie d in S . 8 9 0 .

g e n c y e x is t s r e q u ir in g e x p e d it io u s a c tio n . S e c ­

T h e first r e c o m m e n d a tio n e s s e n t ia lly in v o lv e s

o n d ly , S e c t io n 1 (1 ) a s p r o p o s e d w o u ld g i v e th e

p r o c e d u r a l a m e n d m e n ts to th e B a n k H o ld in g

B o a r d th e a u th o r ity to w a iv e n o t ic e an d h e a r in g

C o m p a n y A c t th at are d e s ig n e d to p e r m it th e

r e q u ir e m e n ts e n tir e ly if th e B o a r d fin d s th at it

im m e d ia te or e x p e d it io u s c o n s u m m a tio n o f a

m u s t a c t im m e d ia t e ly o n an a p p lic a tio n to p r e ­

tr a n sa c tio n u n d e r th e B a n k H o ld in g C o m p a n y

v e n t th e p r o b a b le fa ilu r e o f a b a n k or b a n k

A c t in c e r ta in p r o b le m b a n k a n d b a n k h o ld in g

h o ld in g

c o m p a n y s itu a tio n s .

tr a n sa c tio n .

te n d e d to

T h e a m e n d m e n ts are in ­

p a r a lle l e x is t in g

p r o v is io n s

in

th e

com pany

in v o lv e d

B o th

o f th ese

in

th e

prop osed

su g g ested

am end­

m e n ts p a r a lle l p r o v is io n s s u b s e q u e n tly e n a c t e d

B a n k M e r g e r A c t. T h e s e c o n d r e c o m m e n d a tio n

in th e B a n k M e r g e r A c t — p r o v is io n s th at h a v e

w o u ld a m e n d th e B a n k H o ld in g C o m p a n y A c t

w o r k e d w e ll in th e n e a r ly 5 0 in s ta n c e s in w h ic h

to

th e y h a v e b e e n u s e d o v e r th e p a s t 10 y e a r s .

g ran t th e

B oard

a u th o r ity

to

ap p rove

an

a c q u is itio n o f a b a n k a c r o s s S ta te lin e s b y a

In th e B o a r d ’s ju d g m e n t, th e p r e s e n t r e q u ir e ­

b a n k h o ld in g c o m p a n y w h e n th e B o a r d d e te r ­

m e n t fo r 3 0 -d a y n o t ic e to th e r e le v a n t b a n k

m in e s that a la r g e b a n k or b a n k h o ld in g c o m ­

su p e r v is o r m ig h t w o r k a g a in s t th e p u b lic in te r e st

p a n y c o n t r o llin g a la r g e b a n k is in s e v e r e fin a n ­

in th e c o n te x t o f a p r o b le m b a n k h o ld in g c o m ­

c ia l d iffic u lty an d th e p u b lic in te r e st w o u ld b e s t

p a n y s itu a tio n w h e r e im m e d ia te or e x p e d it io u s

b e s e r v e d if th e b a n k in v o lv e d w a s a c q u ir e d b y

a c tio n is c a lle d fo r . F r o m a p r a c tic a l s ta n d p o in t,

an o u t - o f - S t a t e h o ld in g c o m p a n y . I w ill d is c u s s

th e

e a c h o f th e s e r e c o m m e n d a t io n s in tu rn , r efe r r in g

situ a tio n

to th e cu r re n t la w , th e m a in r e a s o n th e r e fo r ,

p rocess

th e k e y a r g u m e n ts fo r c h a n g in g th e la w at th is

w o u ld a ls o b e d e s ir o u s o f h a v in g an a c q u is it io n

t im e , a n d th e B o a r d ’s r e a s o n s fo r r e c o m m e n d ­

q u ic k ly c o n s u m m a te d . S im ila r ly , th e p r o tr a c te d

in g th e s p e c if ic a m e n d m e n ts p r o p o s e d in S . 8 9 0 .

h e a r in g

p r im a ry

s u p e r v is o r y

w o u ld
of

be

a u th o r ity

a c t iv e ly

s c r e e n in g

r e q u ir e m e n ts

p o te n tia l

in

in

su ch

in v o lv e d

th e

a

in

th e

a c q u ir e r s

an d

ca se

of

recom ­

C e r ta in tim e s c h e d u le s fo r th e p r o v is io n o f

m e n d e d d is a p p r o v a ls b y th e s u p e r v is o r y a u th o r ­

n o tic e a n d h e a r in g 1 w e r e e n a c te d a s part o f th e

ity are ill-s u it e d to a f a ilin g b a n k or b a n k h o ld ­

o r ig in a l B a n k H o ld in g C o m p a n y A c t o f 1 9 5 6 ,

in g c o m p a n y situ a tio n w h e r e th e p u b lic in te r e st

as a c o m p r o m is e b e t w e e n g iv in g b a n k c h a r ter ­

d e m a n d s that d e c is io n s b e m a d e q u ic k ly o n th e

in g a u th o r itie s an a b s o lu te r ig h t to d e n y a h o ld ­

b a s is o f a v a ila b le e v id e n c e .

in g c o m p a n y a p p lic a tio n to a c q u ir e a b a n k and

T h e r e is an a d d itio n a l sta tu to r y d e la y to b e
d e a lt w ith . U n d e r e x is t in g l a w , th e B o a r d m u s t

1 Under existing law , the Board, before approving an
application for the acquisition of voting shares or assets
of a bank under Section 3 of the Bank Holding Company
Act must: (1) give notice to the Comptroller of the
Currency if the applicant or bank involved is a national
or district bank or to the appropriate State supervisory
authority if the applicant or bank involved is a State
bank; (2) allow 30 days within which the view s and
recommendations of the Comptroller of the Currency
or the State supervisory authority, as the case may be,
may be submitted; and (3) if the supervisory authority
so notified files a written disapproval of the application
within the 30-day period, provide a hearing on the
application and base its decision on the record of that
hearing.




im m e d ia te ly n o tify th e A tto r n e y G e n e r a l o f a n y
ap p roval

of

a

p rop osed

bank

a c q u is it io n ,

m e r g e r , or c o n s o lid a t io n tr a n sa c tio n u n d e r S e c ­
tio n 3 o f th e B a n k H o ld in g C o m p a n y A c t , an d
s u c h tr a n sa c tio n m a y n o t b e c o n s u m m a te d b e ­
fo r e th e 3 0 th c a le n d a r d a y

a fter th e d a te o f

a p p r o v a l b y th e B o a r d .
T h is
H o ld in g

r e q u ir e m e n t w a s
C om pany

A ct

add ed
in

1966

to
in

th e

B ank

o r d e r to

c o n fo r m w ith th e sta n d a r d c o n s u m m a t io n p r o ­
c e d u r e s b e in g e s t a b lis h e d in th e B a n k M e r g e r
A c t . T h e p u r p o se o f th e p r o v is io n w a s to e l i m i ­

488

Federal Reserve Bulletin □ August 1975

n a te c o n flic ts

b e tw e en

th e B o a r d ’s d e c is io n s

o th e r N e w Y o r k C ity b a n k s . T h e h o ld in g c o m ­

u n d e r th e B a n k H o ld in g C o m p a n y A c t a n d th e

p a n y c a n b e a p r o c o m p e titiv e fo r m

A tto r n e y G e n e r a l’s e n f o r c e m e n t o f th e an titru st

e x p a n s io n , a n d its u s e s h o u ld n o t b e e f f e c t iv e ly

o f bank

l a w s , w h ic h m ig h t o t h e r w is e r e q u ir e th e u n ­

f o r e c lo s e d in in fr e q u e n t p r o b le m b a n k situ a tio n s

w in d in g o f a tr a n sa c tio n a fter th at tr a n sa c tio n

b e c a u s e o f d e la y r e q u ir e m e n ts n o t s im ila r ly im ­

had b een app roved

p o s e d in b a n k m e r g e r s .

u n d e r th e

B a n k H o ld in g

C o m p a n y A c t.

W a iv e r o f th e u s u a l

d e la y p r o v is io n s u n d o u b te d ly w o u ld b e w a r ­

H o w e v e r , th e B a n k M e r g e r A c t p r o v id e s fo r
an e x c e p t io n to th is d e la y

in p r o b le m

ca ses

w h ile th e B a n k H o ld in g C o m p a n y A c t d o e s n o t.
T h e B o a r d is r e c o m m e n d in g th a t, in c a s e s in ­

r a n ted in o n ly a s m a ll n u m b e r o f c a s e s , an d
in th o s e c a s e s th e w a iv e r sh o u ld p r o d u c e n e t
p u b lic b e n e fits .
A n o th e r — a n d m o r e s e n s it iv e — c o n str a in t o n

v o lv in g p r o b le m b a n k s or b a n k h o ld in g c o m p a ­

bank

n i e s , th e c o n s u m m a tio n p r o c e d u r e s o f th e B a n k

g r a p h ic a l in n a tu re . U n d e r th e B a n k H o ld in g

h o ld in g

com pany

a c q u is it io n s

is

geo­

H o ld in g C o m p a n y A c t b e f u lly c o n fo r m e d to

C o m p a n y A c t , th e B o a r d m a y n o t a p p r o v e a n y

th o s e in th e B a n k M e r g e r A c t.

fu rth er a c q u is itio n o f a b a n k b y a b a n k h o ld in g

A c c o r d in g ly , it is p r o p o s e d th a t, w h e n th e

c o m p a n y a c r o s s S ta te l i n e s . 2 T h is p r o v is io n w a s

B o a r d h a s a d v is e d a s u p e r v is o r y a u th o r ity o f an

m a d e part o f th e o r ig in a l B a n k H o ld in g C o m ­

e m e r g e n c y r e q u ir in g e x p e d it io u s a c t io n , c o n ­

p a n y A c t o f 1 9 5 6 in o rd er to h a lt th e fu rth er

su m m a tio n b e p e r m itte d fiv e c a le n d a r d a y s after

e x p a n s io n

th e d a te o f a p p r o v a l. In c a s e s w h e r e th e B o a r d

h o ld in g c o m p a n ie s th e n

h a s fo u n d th at it m u s t a c t im m e d ia t e ly to p r e v e n t

b a s e d in la r g e part o n th e c o n c e r n o f th e C o n ­

th e p r o b a b le fa ilu r e o f a b a n k or b a n k h o ld in g

g r e s s th a t, u n le s s th is tren d w e r e h a lte d , w i d e ­

c o m p a n y , it is r e c o m m e n d e d
c o n s u m m a tio n

be

p e r m itte d .

th at im m e d ia te
In

th e

of

sev era l

la r g e

m u lti-S ta te

in e x is t e n c e .

bank
It w a s

sp re a d an d fr e q u e n t a c q u is itio n s b y m a jo r b a n k

B o a r d ’s

h o ld in g c o m p a n ie s c o u ld e v e n t u a lly le a d to an

ju d g m e n t, th e r e a p p e a r s to b e n o p u b lic p o lic y

u n d u e c o n c e n tr a tio n o f b a n k in g r e s o u r c e s in th e

r e a s o n fo r n o t h a v in g p a r a lle l c o n s u m m a tio n

U n ite d S ta te s . In p a r tic u la r , it w a s th o u g h t th a t,

p r o c e d u r e s fo r b a n k m e r g e r s a n d b a n k h o ld in g

a b s e n t th is p r o v is io n , h o ld in g c o m p a n ie s w o u ld

c o m p a n y a c q u is it io n s in p r o b le m b a n k s itu a ­

b e u s e d to a v o id th e m u lti-S ta te b r a n c h in g p r o ­

tio n s b e c a u s e th e s a m e r e a s o n s e x is t fo r n o t

v is io n s o f th e M c F a d d e n A c t , a n d th u s it w a s

w a itin g

a ls o in te n d e d to p r e s e r v e th e r ig h ts o f th e S ta te s

30

days

fo r

th e

A tto r n e y

G e n e r a l’s

c o m p e tit iv e ju d g m e n t in b o th c a s e s . A s a p r a c ­

in th is a r e a .3

tic a l m a tter , th e F e d e r a l b a n k in g a g e n c ie s in
su ch

s itu a tio n s

have

r e g u la r ly

f o l lo w e d

th e

p r a c tic e o f in fo r m a lly c o n s u lt in g w ith th e A t ­
to r n e y G e n e r a l in a d v a n c e in a n y c a s e la r g e
e n o u g h to r a is e su b s ta n tia l c o m p e t it iv e q u e s ­
tio n s .
T h e e x is t in g sta tu to r y d e la y p r o v is io n s in th e
B a n k H o ld in g C o m p a n y A c t h a v e e f f e c t iv e ly
e lim in a te d b a n k h o ld in g c o m p a n ie s fr o m b id ­
d in g in e m e r g e n c y s itu a tio n s b e c a u s e a b a n k in
s e v e r e fin a n c ia l d iffic u lty m a y n o t b e a b le to
su r v iv e th e 3 0 - d a y c o n s u m m a tio n d e la y . T h e s e
p r o v is io n s h a v e th u s u n n e c e s s a r ily lim ite d th e
n u m b e r o f p o te n tia l

a c q u ir e r s

of

a p r o b le m

b a n k . T h is c a n in c r e a s e th e a n tic o m p e t itiv e r is k s
in su c h a c q u is it io n s b y o f te n lim itin g th e p o o l
o f p o te n tia l a c q u ir e r s to b a n k s a lr e a d y in d ir e c t
c o m p e tit io n

w ith

th e

p r o b le m

b a n k , fo r e x ­

a m p le , in th e c a s e o f F r a n k lin N a tio n a l B a n k ,




2 The precise words of Section 3 (d) provide that the
Board may not approve any application under Section
3 of the Bank H olding Company Act:
. . which
w ill permit any bank holding com pany or any subsidiary
thereof to acquire, directly or indirectly, any voting
shares o f, interest in, or all or substantially all of the
assets of an additional bank located outside of the State
in which the operations of such bank holding com pany’s
banking subsidiaries were principally conducted. . . . ”
3Under the terms of this provision, a bank holding
company can only acquire a bank outside of its principal
State if the State in which such bank is located takes
action to specifically permit such acquisition. If a State
took such action, the Board would still have to decide
the application under the statutory standards of the Bank
Holding Company Act. At the time of this A ct’s passage
in 1956, no State granted such permission. Except for
Iowa, which has enacted a law giving a single grandfa­
thered multi-State bank holding company permission to
acquire additional banks in that State, and M aine, which
recently enacted a law that would allow acquisition of
a Maine bank by an out-of-State bank holding company
if a M aine bank holding company is given reciprocal

489

Statements to Congress

T h e B o a r d is o f th e o p in io n that S e c t io n 3

The

B oard

th e r e fo r e

recom m en ds

several

(d ) c o u ld , in th e c a s e o f a la r g e p r o b le m b a n k

a m e n d m e n ts to th e B a n k H o ld in g C o m p a n y A c t

or a p r o b le m b a n k h o ld in g c o m p a n y c o n tr o llin g

d e s ig n e d to p e r m it o u t - o f - S t a t e a c q u is itio n s in

a la r g e b a n k , o p e r a te in c o n tr a v e n tio n o f b o th

c e r ta in e m e r g e n c y a n d f a ilin g b a n k s itu a tio n s

n a tio n a l a n d lo c a l in te r e s ts . T h e lim ita tio n to

in v o lv in g a la r g e b a n k or b a n k h o ld in g c o m p a n y

in -S ta te b id d e r s m a y , in th e c a s e o f a la r g e

c o n t r o llin g a la r g e b a n k . U n d e r S e c t io n 1 (3 ) o f

p r o b le m

nu m ber o f

S . 8 9 0 as p r o p o s e d , th e B o a r d w o u ld h a v e th e

p o te n tia l a c q u ir e r s a n d r e s u lt in an in c r e a s e d

b a n k , s e v e r e ly

a u th o r ity to m a k e e x c e p t io n s to th e m u lti-S ta te

c o n c e n tr a tio n

a

p r o h ib itio n s o f S e c t io n 3 (d ) w h e n e v e r th e B o a r d

S ta te — c o n tr a ry to th e in te n t o f th e C o n g r e s s in

fin d s th at an e m e r g e n c y r e q u ir in g e x p e d it io u s

of

lim it th e

b a n k in g

resou rces

p a s s in g th e B a n k H o ld in g C o m p a n y

w ith in
A c t.

In

a c tio n e x is t s w ith r e s p e c t to a b a n k or b a n k

m o s t o f o u r S ta te s , th e n u m b e r o f lo c a lly o w n e d

h o ld in g c o m p a n y , or th at it m u s t a c t im m e d i­

b a n k s b ig a n d s tr o n g e n o u g h to a b so r b a la r g e

a te ly in o rd er to p r e v e n t th e p r o b a b le fa ilu r e

p r o b le m b a n k are v e r y f e w . T h e o n ly s m a lle r

o f a b a n k or b a n k h o ld in g c o m p a n y . T h e p r o ­

b a n k s s tr o n g e n o u g h to u n d e r ta k e s u c h a v e n tu r e

p o s e d a u th o rity w o u ld b e lim ite d , h o w e v e r , to

m a y b e t h o s e a ffilia te d w ith p o w e r fu l c o m m e r ­

c a s e s in v o lv in g a b a n k h a v in g a s s e t s in e x c e s s

c ia l or fin a n c ia l in te r e sts d o m ic ile d e ith e r in th is

o f $ 5 0 0 m illio n

c o u n tr y or a b r o a d .

c o n tr o llin g a b a n k h a v in g a s s e ts in e x c e s s o f

or a b a n k h o ld in g c o m p a n y

T h e p r o b le m c r e a te d b y th e c o n s tr a in ts im ­

$ 5 0 0 m illio n . T h e r e are th r e e b a s ic r e a s o n s fo r

p o s e d b y S e c t io n 3 ( d ) h a s b e e n sh a r p e n e d as

lim itin g th is a u th o r ity to th e c a s e o f a la r g e b a n k

b an k s, h a v e m o v ed

o r b a n k h o ld in g c o m p a n y c o n tr o llin g a la r g e

in c r e a s in g ly fr o m a s s e t to lia b ilit y m a n a g e m e n t.

b an k : first, th e fa ilu r e o f su c h an in s titu tio n c a n

T h is s h ift

have

b a n k s , p a r tic u la r ly la r g e
in

e m p h a s is

has

le d

m any

la rg e r

in s titu tio n s to s e a r c h far a fie ld fo r m o n e y m a r k e t

d a m a g in g

e ffe c ts

in

b o th

n a tio n a l

an d

in te r n a tio n a l m a r k e ts an d o n th e n a tio n a l e c o n ­

fu n d s . W h ile th is h a s o ft e n b e e n o f c o n s id e r a b le

om y;

b e n e fit to th e c u s to m e r s a n d c o m m u n it ie s th e y

p r o s p e c tiv e

s e c o n d ly ,

th e r e

h a v e s e r v e d — p a r tic u la r ly in t h o s e a rea s w h e r e

w ith in a n y S ta te ; a n d th ir d ly , th e m o s t lik e ly

a c q u ir e r s

m ay
of

be

su c h

fe w ,
an

if

any,

in s titu tio n

w id e s p r e a d b r a n c h in g is n o t p e r m itte d an d lo c a l

in -S ta te a c q u ir e r s are l ik e ly to b e in s titu tio n s

d e p o s it g e n e r a tio n is th e r e b y lim ite d — lia b ility

o f c o m p a r a b le or g r e a te r s i z e , w h ic h m ig h t o f te n

m a n a g e m e n t h a s in c r e a s e d b a n k s ’ e x p o s u r e to

p ose

th e r is k s c r e a te d b y a n y su b s ta n tia l n e t o u tflo w

th r e a te n an in c r e a s e d c o n c e n tr a tio n o f b a n k in g

o f s u c h n o n lo c a l a n d o f t e n v o la t ile fu n d s .

r e s o u r c e s w ith in th e S ta te .
T h e B o a r d c h o s e a $ 5 0 0 m illio n a s s e t c u to ff

W h e n a d v e r s e n e w s tr ig g e r s e n o u g h o u tf lo w s

p r o b le m s

under

th e

it w o u ld

an titru st

cover

la w s

m a jo r

and

o f f u n d s to s ig n if ic a n t ly w e a k e n a b a n k , it m a y

fig u re b e c a u s e

b e c o m e n e c e s s a r y in th e p u b lic in te r e st to f o ld

c e n te r an d r e g io n a l b a n k s , w h o s e fa ilu r e m ig h t

m oney

it in to a la r g e r a n d str o n g e r in s titu tio n . A s y o u

h a v e an a d v e r s e e f fe c t o n r e g io n a l, n a t io n a l, or

k n o w , th is o c c u r r e d in N e w Y o r k an d C a lifo r n ia

e v e n in te r n a tio n a l fin a n c ia l m a r k e ts , y e t w o u ld

w h e r e b ig in -S ta te b a n k s w e r e a v a ila b le to a c ­

n o t b e s o e x t e n s i v e an e x c e p t io n as to c r e a te

q u ir e th e p r o b le m b a n k s in v o lv e d . H a d in s titu ­

a p o te n tia lly s ig n ific a n t l o o p h o le to th e m u lti-

tio n s o f th e s iz e o f F r a n k lin N a t io n a l or o f th e

S ta te p r o h ib itio n s o f th e A c t. A l s o ,

U n it e d S ta te s N a tio n a l B a n k o f S a n D i e g o fa ile d

i n v o lv in g s m a lle r p r o b le m b a n k s , lo c a l a c q u is i­

in m a n y o th e r S t a t e s , h o w e v e r , n o b a n k s in

tio n s w h e r e a p p ro p ria te c a n b e m o r e r e a d ily

in c a s e s

th o s e S ta te s w o u ld h a v e b e e n la r g e e n o u g h to

a rra n g ed b y th e F e d e r a l D e p o s it I n su r a n c e C o r ­

a c q u ir e th e m . In s u c h c ir c u m s t a n c e s , th e n e e d

p o r a tio n a n d S ta te a u th o r itie s th a n c a n tr a n sfe r s

to b e a b le to a rra n g e a c q u is it io n s a c r o s s S ta te

o f th e lia b ilit ie s a n d a s s e ts o f la r g e in s titu tio n s .

b o u n d a r ie s w o u ld b e c o m e v e r y r ea l.

The
v a r io u s

rights in that h o ld in g co m p a n y ’s S tate, the situation
rem ains essen tia lly u n ch an ged w ith no other States
granting su ch p erm ission .




c h o ic e
p u b lic

of

any

p o lic y

c u to ff

fig u r e

c o n s id e r a tio n s

in v o lv e s
by

th e

C o n g r e s s . T h e B o a r d sta n d s r e a d y to s u p p ly th e
s u b c o m m itte e w ith a d d itio n a l d a ta o n th is is s u e
if that w o u ld b e h e lp f u l. O n th e b a s is o f d a ta

490

Federal Reserve Bulletin □ August 1975

p r e p a r ed b y th e B o a r d ’s sta ff, a $ 5 0 0 m illio n

o n e , in o rd er n o t to e n c o u r a g e p o te n tia l b id d e r s

c u to ff w o u ld c o v e r n o t o n ly th e la r g e m o n e y

to w a it u n til an id e a l a c q u is itio n o p p o r tu n ity w a s

c e n te r a n d r e g io n a l b a n k s b u t a ls o ,

p r e s e n te d , b u t it c o u ld b e le s s th an f iv e , in ord er

in m o s t

c a s e s , th e la r g e s t b a n k in a n y S t a t e .4 F r o m ou r

to fo r e s ta ll e x c e s s i v e

a n a ly s is o f c a s e s in w h ic h e m e r g e n c y or f a ilin g

p o w e r . In o u r v i e w , th is k in d o f lim it w o u ld

e x p a n s io n s o f fin a n c ia l

b a n k p r o c e d u r e s h a v e b e e n u s e d u n d e r th e B a n k

s e r v e to p r e c lu d e a n y p o s s ib ilit y o f u n d u e c o n ­

M e r g e r A c t , it a p p ea r s that o n ly th r e e b a n k s

c e n tr a tio n o f e c o n o m ic r e s o u r c e s b e in g c r e a te d

a c q u ir e d u n d e r e m e r g e n c y a p p r o v a l p r o c e d u r e s

th r o u g h e x c e p t io n s to S e c t io n 3 ( d ) . 5

h a v e h a d a s s e ts in e x c e s s o f $ 5 0 0 m illio n ( S e ­

T h e B o a r d h o p e s , o f c o u r s e , th at n o s ig n if i­

c u r ity N a tio n a l B a n k o f L o n g I s la n d , F ra n k lin

c a n t b a n k w i l l s o m is b e h a v e th at it b e c o m e s

N a t io n a l B a n k o f N e w Y o r k , a n d U n it e d S ta te s

th r e a te n e d w ith f a ilu r e . It w o u ld b e im p r u d e n t,

N a t io n a l B a n k o f S a n D i e g o ) . T h u s , th e B o a r d

h o w e v e r , n o t to b e p r e p a r e d to d e a l w ith that

a n tic ip a te s th at th is p r o v is io n w o u ld b e a p p lic a ­
b le o n ly

in

ra re

c a ses w h ere

th e r e

m ay be

sig n ific a n t e f fe c t s u p o n th e n a tio n a l a n d in te r n a ­
tio n a l e c o n o m y .
U n d e r S e c t io n 1 (3 ) o f S . 8 9 0 th e B o a r d c o u ld
u s e th is a u th o r ity to a p p r o v e a m u lti-S ta te a c ­
q u is it io n o n ly w h e n it f in d s , in w e ig h in g th e
sta tu to ry c o m p e tit iv e a n d o th e r f a c to r s , th at th e
p u b lic in te r e st w o u ld b e s t b e s e r v e d if th e b a n k
or b a n k s i n v o lv e d w e r e a c q u ir e d b y an o u t- o fS ta te b a n k h o ld in g c o m p a n y . T h e B o a r d th u s
a n tic ip a te s th at th is a u th o r ity w o u ld ra re ly b e
u s e d a n d o n ly in c a s e s p r e s e n tin g v e r y s p e c ia l
c ir c u m s t a n c e s , s u c h as th o s e in v o lv in g F ra n k lin
N a tio n a l B a n k . In o u r v i e w , t h e s e r e la t iv e ly rare
situ a tio n s w o u ld n o t c o n tr a v e n e th e c e n tr a l p u r ­
p o s e o f th e m u lti-S ta te p r o h ib itio n o f th e B a n k
H o ld in g C o m p a n y A c t , w h ic h w a s d ir e c te d at
p r e v e n tin g la r g e c o n c e n tr a tio n s o f fin a n c ia l r e ­
so u r c e s th r o u g h

fr e q u e n t m u lti-S ta te a c q u is i­

tio n s o f b a n k in g in s titu tio n s .
T h e B o a r d is s e n s it iv e to th e fa c t th at th e
p r o h ib itio n o n m u lti-S ta te b r a n c h in g w a s d e ­
s ig n e d to p r e v e n t th e e v o lu t io n o f a f e w la rg e
b a n k in g in s titu tio n s . W h ile th ere w o u ld b e o n ly
a v e r y lim it e d n u m b e r o f in s ta n c e s in w h ic h th e
B o a r d w o u ld

c o n s id e r

m a k in g

e x c e p t io n s

to

S e c t io n 3 ( d ) , th e a m e n d in g la n g u a g e c o u ld b e
n a r r o w e d e v e n m o r e th an w a s o r ig in a lly s u g ­
g e s t e d . A str ict lim it c o u ld b e p la c e d o n th e
n u m b e r o f a c q u is itio n s a n y s in g le b a n k h o ld in g
c o m p a n y w o u ld b e a llo w e d to m a k e u n d er su c h
an e x c e p t io n . T h is lim it s h o u ld b e m o r e than
4From the Board’s figures as of D ec. 31, 1974, this
asset cutoff would appear to include some 210 com m er­
cial banks across the country, including the largest bank
in 39 States and the District of Columbia and the two
largest banks in 35 States and the District of Columbia.




5 As a corollary to its recommended amendment of
Section 3(d), the Board has felt it necessary to also
recommend an amendment in Section 2 of S. 890
overriding certain provisions of State law in situations
involving a problem bank or bank holding company
where expeditious or immediate action is required.
Section 7 of the Bank Holding Company Act reserves
to the States their rights to exercise such powers and
jurisdiction that they now or in the future may have
with respect to banks, bank holding com panies, and
subsidiaries thereof. In problem bank or bank holding
company situations, the normal circumstances that may
have led a State to enact a statute prohibiting the
formation of bank holding com panies within its borders
or otherwise restricting the entry of out-of-State bank
holding companies do not apply and therefore such
provisions should not be controlling when the Board
has approved such application under the immediate or
expeditious action provisions recommended in S. 890.
In such cases, the national interest argues that Federal
law be supreme. In practical terms, even though a State
may favor an acquisition by an out-of-State holding
company approved by the Board under its immediate
or expeditious action provisions as an alternative to
failure, it would probably be im possible either for the
State legislature to enact in time any necessary amend­
ments to its laws or for a State court to interpret the
terms of an unclear statute. The delays involved in
trying to pursue either of the above courses of action
could be crucial. Section 2 of S. 890 would solve these
problems by providing that in any case where the Board
has approved an application under the immediate or
expeditious action provisions of S. 890, the holding
company may acquire and operate the bank involved
as a subsidiary notwithstanding Section 7 or any provi­
sion of State law that would otherwise prevent the
acquisition or restrict the operations of that holding
company.
Section 2, how ever, leaves intact State restrictions
on multibank holding com panies, so that an out-of-State
bank holding com pany that acquired a bank with the
Board’s approval under the immediate or expeditious
action provisions could not gain a com petitive advantage
over an in-State holding com pany by acquiring a second
bank under those provisions. The McFadden Act re­
strictions on multi-State branching would not be affected
by Section 2 of S. 890, as such restrictions are a matter
of Federal law.

Statements to Congress

491

e v e n tu a lity . A s a m a tter o f g o o d c o n t in g e n c y

r e s o lu tio n o f p r o b le m b a n k a n d b a n k h o ld in g

p la n n in g , th e B o a r d r e c o m m e n d s p r o m p t e n a c t ­

c o m p a n y c a s e s w e m a y e n c o u n te r a n d b y in ­

m e n t o f S . 8 9 0 . It w ill s e r v e th e p u b lic in te r e st

c r e a s in g th e lik e lih o o d o f m o r e c o m p e t it iv e a c ­

b o th

q u is itio n s in s u c h s it u a tio n s .

by

fa c ilita tin g

S ta te m e n t
B o a rd
S y s te m ,

by

th e

A r th u r

o f G overn ars
b e fo re

sp eed y

F.

and

B u rn s,

e ffic ie n t

C h a ir m a n ,

o f th e F e d e r a l R e s e r v e

th e

C o m m itte e

□

p r ic e o f o i l , a n o th e r d e v a lu a tio n o f th e d o lla r ,
a n d th e c o in c id e n c e o f b o o m in g b u s in e s s a r o u n d

on

B a n k in g ,

th e w o r ld p la y e d th e ir part in th e in fla tio n a r y

H o u s in g , a n d U r b a n A f f a i r s , U . S .

H o u se o f

p r o c e s s d u r in g 1 9 7 3 a n d 1 9 7 4 .

R e p r e s e n t a t i v e s , J u ly 2 4 , 1 9 7 5 .

A s a r e su lt o f th e s e m y r ia d d e v e lo p m e n t s ,
s e e d s o f r e c e s s io n w e r e s o w n a c r o s s th e e c o n ­

I w e l c o m e th is o p p o r tu n ity to d is c u s s th e c o n ­

o m y . In fla tio n le d

d itio n o f th e n a tio n a l e c o n o m y a n d to c o n v e y

d e m a n d s , b o th p u b lic a n d p r iv a te , a n d in te r e st

th e F e d e r a l R e s e r v e ’s v i e w s o n m o n e ta r y p o l ­

ra tes so a r e d to u n p r e c e d e n te d h e ig h t s . R is in g

ic y .

to a b u r g e o n in g o f c r e d it

c o n s u m e r p r ic e s e r o d e d th e p u r c h a s in g p o w e r

T h e p e r fo r m a n c e o f ou r e c o n o m y d u r in g th e

o f w o r k e r s ’ in c o m e s a n d s a v in g s . T h e sh a rp r is e

p a st 2 y e a r s h a s b e e n d is a p p o in t in g . W e h a v e

in th e p r ic e o f o il c a u s e d a d iv e r s io n o f p u r ­

s u ffe r e d th e m o s t d a m a g in g p e a c e t im e in fla tio n

c h a s in g p o w e r to f o r e ig n s u p p lie r s . C o r p o r a te

in o u r N a t i o n ’s h is t o r y , a c r itic a l sh o r ta g e o f

p ro fits

energy

in

w e r e s lo w to r e c o g n iz e b e c a u s e o f a c c o u n tin g

b u s in e s s a c tiv it y s in c e th e e n d o f W o r ld W ar

t e c h n iq u e s th at f a ile d to ta k e a c c o u n t o f in fla ­

s u p p lie s ,

an d

th e

d eep est

d e c lin e

d im in is h e d — a

fa c t

th at

b u s in e s s m e n

II. S im ila r p r o b le m s h a v e p la g u e d p r a c tic a lly

tio n . C o n s tr u c tio n o f n e w d w e llin g s a n d o ffic e

e v e r y in d u str ia l c o u n tr y in th e w o r ld .

b u ild in g s p r o c e e d e d o n a s c a le th at g r e a tly e x ­

T h e r e c e s s io n o f 1 9 7 4 - 7 5 in o u r c o u n tr y w i l l ,

c e e d e d u n d e r ly in g d e m a n d . A n d in v e n to r ie s o f

I b e l ie v e , b e v i e w e d b y e c o n o m ic h isto r ia n s as

c o m m o d it ie s p ile d u p , o ft e n

th e c u lm in a tin g p h a s e o f a lo n g c y c l e in e c o ­

p a c e , a s b u s in e s s m e n r e a c te d to fe a r s o f s h o r t­

n o m ic a c tiv ity th at b e g a n in 1 9 6 1 . D u r in g th e

a g e s a n d o f a c c e le r a t in g p r ic e in c r e a s e s .

in d u str ia l p h a s e

of

th e

lo n g

u p s w in g — fr o m

at a v e r y ra p id

B y th e sp r in g o f 1 9 7 3 , s ig n s o f fa lte r in g in

1 9 6 1 th r o u g h 1 9 6 4 — p r o d u c tiv ity g r e w r a p id ly ,

th e p a c e o f e c o n o m ic e x p a n s io n

p r ic e s r e m a in e d q u ite s ta b le , an d rea l w a g e s an d

e m e r g e d . H o m e b u ild in g b e g a n to turn d o w n an d

p ro fits k e p t

a d v a n c in g .

s o t o o d id s a le s o f m o b ile h o m e s , n e w a u to s ,

y e a r s — fr o m

1 9 6 5 th r o u g h

D u r in g

th e

next

10

h a d a lr e a d y

1 9 7 4 — th e str e n g th

an d o th e r b ig - t ic k e t c o n s u m e r ite m s . A d e c li n ­

o f th e A m e r ic a n e c o n o m y w a s g r a d u a lly u n d e r ­

in g tren d in th e p h y s ic a l v o lu m e o f o th e r g o o d s

m in e d .

p u r c h a s e d b y c o n s u m e r s s o o n f o l lo w e d . T h e s e

A

s u c c e ssio n

of

in te r r e la te d ,

p a r tly

o v e r la p p in g , w a v e s o f s p e c u la t io n o c c u r r e d —

d e v e lo p m e n t s ,

first in m e r g in g b u s in e s s e n te r p r is e s an d o r g a n ­

lo o k e d b y a b u s in e s s c o m m u n it y c a u g h t u p in

how ever,

w ere

la r g e ly

over­

i z in g c o n g lo m e r a t e s , n e x t in th e s to c k m a r k e t,

th e e u p h o r ia c r e a te d b y in fla tio n . N e w o r d e r s

th e n in th e r ea l e s ta te m a r k e t, a n d fin a lly in th e

flo w in g

m a r k e ts fo r in d u str ia l m a te r ia ls a n d o th e r c o m ­

ord er b a c k lo g s g e n e r a lly in c r e a s e d , a n d s t o c k ­

m o d it ie s . D u r in g th is lo n g s p e c u la t iv e p h a s e ,

p ile s

p r o d u c tiv ity la n g u is h e d

m o u n te d . B y th e su m m e r o f 1 9 7 4 , th e p h y s ic a l

a n d e x p a n s io n in th e

to

of

m a n u fa c tu r e r s
m a te r ia ls

c o m m o d it ie s

v o lu m e

h ig h e r in r e la tio n to s a le s th an at a n y tim e s in c e

b y n o m e a n s e n tir e ly — in r e s p o n s e to th e la x

th e K o r e a n w a r . T h e sta g e w a s th u s s e t fo r a

fin a n c ia l p r a c tic e s o f th e F e d e r a l G o v e r n m e n t.

s ig n ific a n t e c o n o m ic a d ju stm e n t.

e x tr a o r d in a r y




in c r e a s e s

in

th e

in v e n to r ie s

r is e ,

p h y s ic a l v o lu m e o f o u tp u t d e c e le r a t e d , w h ile th e

h a r v e sts,

b u s in e s s

o th e r

to

p a c e o f in fla tio n k e p t q u ic k e n in g — m a in ly , b u t

B ad

of

and

c o n t in u e d

w as

a lr e a d y

T h e r e c e s s io n th at e n s u e d h a s c u t d e e p ly in to

492

Federal Reserve Bulletin □ August 1975

th e N a t io n ’s e c o n o m ic l if e . B e t w e e n S e p te m b e r

la r g e

1 9 7 4 an d M a y 1 9 7 5 , in d u str ia l o u tp u t f e ll b y

y e a r , a n d th e y h a v e u s e d m u c h o f th e p r o c e e d s

a m o u n ts

of

lo n g e r -te r m

s e c u r itie s

th is

H V i p er c e n t . T o ta l e m p lo y m e n t d r o p p e d b y 2Vi

to r e p a y sh o r t-te r m

m illio n fr o m its p e a k in O c to b e r 1 9 7 4 to a lo w

a s s e t s . T h e liq u id it y p o s it io n o f c o n s u m e r s h a s

d e b t or to a c q u ir e liq u id

in M a r c h o f th is y e a r . A n d th e rate o f u n e m ­

l ik e w is e b e e n str e n g th e n e d ; in s ta lm e n t d e b ts to

p lo y m e n t r o s e fr o m l e s s th an 5 p e r c e n t in la te

b a n k s an d o th e r le n d e r s h a v e b e e n p a id d o w n ,

1 9 7 3 to p e r h a p s 9 p e r c e n t at th e p r e s e n t tim e .

a n d m a n y m illio n s o f in d iv id u a ls h a v e a d d e d

In v i e w o f th e s e r io u s e c o n o m ic im b a la n c e s
c a u s e d b y in fla tio n , th e r e c e s s io n h a s b e e n p e r ­
fo r m in g a p a in fu l, b u t u n a v o id a b le , f u n c tio n .

su b s ta n tia lly to th e ir s a v in g s d e p o s it s an d o th e r
liq u id a s s e ts .
F in a n c ia l

in s t it u tio n s ,

to o ,

have

im p r o v e d

C o r r e c tiv e fo r c e s h a v e b e e n r e le a s e d an d th e y

th e ir

h a v e h e lp e d la y th e b a s is fo r a r e n e w a l o f s o u n d

h a v e ta k e n a d v a n ta g e o f th e r e d u c e d d e m a n d

e c o n o m ic e x p a n s io n .

fo r b u s in e s s an d c o n s u m e r lo a n s to r ep a y th eir

T h u s,

b u s in e s s

c o m p e tit io n

is

now

m uch

fin a n c ia l

b o r r o w in g s

c o n d it io n .

fr o m

C o m m e r c ia l

F ed eral R eserv e

banks

B an k s,

to

so u rc e s

of

k e e n e r th a n it w a s a y e a r or t w o a g o . B u s in e s s

red u ce

m a n a g e r s are a ls o d e v o t in g m o r e a tte n tio n to

fu n d s , a n d to r e b u ild liq u id a s s e ts . In th e ir tu rn ,

c o s t c o n tr o l a n d

im p r o v e m e n t s in e f fic ie n c y .

s a v in g s a n d lo a n a s s o c ia t io n s a n d m u tu a l s a v ­

P r ic e s o f in d u str ia l ra w m a te r ia ls h a v e fa lle n

in g s b a n k s r e d u c e d th e ir in d e b te d n e s s a n d e n ­

s u b s ta n tia lly . P r ic e in c r e a s e s at la ter s ta g e s o f

la r g e d th e ir h o ld in g s o f T r e a s u r y s e c u r itie s an d

th e ir

r e lia n c e

on

v o la t ile

p r o c e s s in g h a v e a ls o b e c o m e l e s s e x t e n s i v e . T h e

o th e r liq u id a s s e t s , th u s la y in g th e b a s is fo r a

r is e o f

r e n e w e d e x p a n s io n o f m o r tg a g e le n d in g in r e ­

th e g e n e r a l p r ic e le v e l

h a s th e r e fo r e

s l o w e d — fr o m an a n n u a l rate o f a b o u t 12 to 14
p er c e n t la te la st y e a r — to a b o u t h a lf that rate
r e c e n tly .

I n c r e a s e s o f w a g e r a te s , m o r e o v e r ,

c e n t m o n th s .
T h e s e s e lf - c o r r e c t iv e f o r c e s h a v e b e e n a id e d
p o w e r f u lly b y fisc a l a n d m o n e ta r y p o l i c i e s that

h a v e m o d e r a te d , a lth o u g h th e y s till are m u c h

so u g h t to c u s h io n th e e f fe c t s o f e c o n o m ic a d ­

h ig h e r th a n th e lo n g -r u n rate o f im p r o v e m e n t

v e r s it y , m o d e r a te r e c e s s io n a r y f o r c e s , an d p r o ­

in

p r o d u c tiv ity .

s ig n ific a n t

M e a n w h ile ,

in d ic a to r

of

th e

sto c k

p r ic e s — a

v id e s o m e

sta te

of

n e e d n o t d w e ll o n th e fisc a l m e a s u r e s that h a v e

c o n fi­

d e n c e — h a v e r is e n su b s ta n tia lly .

been

T h e s lo w d o w n in th e p a c e o f in fla tio n an d
th e r e v iv e d

s to c k m a r k e t h a v e

b o ls t e r e d

s tim u lu s to e c o n o m ic

a d o p te d to

recovery.

I

c o m b a t r e c e s s io n a r y fo r c e s ;

th e s e m e a s u r e s h a v e a lr e a d y b e e n w id e ly d i s ­

th e

c u s s e d . L e t m e n o te m e r e ly th at I b e l ie v e th e

c o n fid e n c e o f th e g e n e r a l p u b lic . E a r ly th is y e a r ,

C o n g r e s s a c te d w i s e l y in p r o v id in g o n ly a t e m ­

a s p r ic e c o n c e s s i o n s o n a u to s an d o th e r ite m s

p o ra ry fisc a l s tim u lu s th r o u g h th e T a x R e d u c tio n

b eca m e c o m m o n , co n su m er p u rch a ses— e s p e ­

A c t o f 1 9 7 5 . T h e c o n fid e n c e o f ou r c it iz e n s in

c ia lly o f d u r a b le g o o d s — b e g a n to p ic k u p . In

th e N a t io n ’s e c o n o m ic fu tu r e h a s b e e n b o ls te r e d

f a c t,

first

b y e v id e n c e th at r e s p o n s ib le m e m b e r s o f b o th

qu arter r o s e in rea l te r m s a s w e ll as in d o lla r s .

th e e x e c u t iv e a n d le g i s l a t i v e b r a n c h e s o f ou r

T h is

con su m er

e x p e n d itu r e s

str e n g th e n in g

q u a rte r , a s

c o n tin u e d

s p e n d a b le

d u rin g
in

in c o m e s o f

w e r e a u g m e n te d — first b y

th e

th e

secon d

G o v e r n m e n t are s e e k in g w a y s to s tim u la te r e ­

co n su m ers

c o v e r y w ith o u t r e le a s in g a n e w w a v e o f in fla ­

ta x r eb a te c h e c k s ,

tio n .

la ter b y e x tr a s o c ia l s e c u r ity c h e c k s . W ith c o n ­

T h is p r in c ip le h a s a ls o g u id e d m o n e ta r y p o l ­

su m e r b u y in g e x p a n d in g an d p r o d u c tio n d e c li n ­

ic y . L a st s u m m e r , as s ig n s o f w e a k e n in g in

in g , th e e ffo r ts o f b u s in e s s firm s to w o r k d o w n

e c o n o m ic a c t iv ity m u lt ip lie d , th e F e d e r a l R e ­

th e ir e x c e s s s to c k s h a v e b e e n r e m a r k a b ly s u c ­

se r v e b e g a n ta k in g s te p s to in c r e a s e th e a v a il­

c e s s f u l . I n v e n to r ie s o f m o s t c o n s u m e r g o o d s

a b ility

n ow seem

o p e r a tio n s w e r e o r ie n te d to w a r d a m o r e lib e r a l

to b e in rather g o o d b a la n c e w ith

s a le s .

m oney

and

c r e d it.

O pen

m arket

p r o v is io n o f r e s e r v e s to th e b a n k in g s y s te m ;

S ig n ific a n t p r o g r e s s h a s a ls o b e e n m a d e in
im p r o v in g

of

th e

fin a n c ia l p o s it io n

of

b u s in e s s

firm s. C o r p o r a tio n s h a v e is s u e d e x c e p t io n a lly




la te r , th e s e a c tio n s w e r e r e in fo r c e d b y s e v e r a l
r e d u c tio n s in th e d is c o u n t rate a n d in r e s e r v e
r e q u ir e m e n ts.

493

Statements to Congress

D u r in g th e fa ll a n d w in te r m o n th s th e d e m a n d

b o r r o w e r s in th e m u n ic ip a l b o n d m a r k e t. A l s o ,

fo r c r e d it b y b u s in e s s e s an d c o n s u m e r s w e a k ­

th e h u g e fin a n c in g d e m a n d s

e n e d o n a c c o u n t o f th e r e c e s s io n , a n d c o m m e r ­

h a v e b e e n a d istu r b in g e le m e n t in th e m o n e y

o f th e T r e a s u r y

c ia l b a n k s u s e d th e m o r e a b u n d a n t s u p p ly o f

a n d c a p ita l m a r k e ts .

r e s e r v e s to r e p a y th e ir in d e b te d n e s s to th e F e d ­

D e s p it e th e s e p r o b le m s c o n d it io n s in fin a n c ia l

e ra l R e s e r v e . G r o w th in M u th at i s , c u r r e n c y

m a r k e ts h a v e g r e a tly im p r o v e d o v e r th e p a s t 6 - 9

p lu s d e m a n d d e p o s it s , w a s th e r e fo r e s l o w

to

r efle c t th e e a s in g o f m o n e ta r y p o l i c y . W e at th e

m o n th s , an d a fin a n c ia l b a s is h a s b e e n e s t a b ­
lis h e d fo r an u p tu rn in b u s in e s s a c tiv ity .

F e d e r a l R e s e r v e w e r e c o n c e r n e d a b o u t th is d e ­

S ig n s h a v e m u ltip lie d in r e c e n t w e e k s that

v e lo p m e n t , b u t w e r e fu s e d to run th e r isk o f

th e e c o n o m y is m o v in g th r o u g h a tu r n in g z o n e

r e le a s in g fr e s h in fla tio n a r y f o r c e s a n d r e k in d lin g

fr o m r e c e s s io n to r e c o v e r y . A s a lr e a d y n o te d ,

in fla tio n a r y e x p e c t a t io n s . In a n y e v e n t , b r o a d e r

r e ta il s a le s h a v e b e e n g a in in g str e n g th p r o g r e s ­

m o n e ta r y a g g r e g a te s d is p la y e d a m o r e v ig o r o u s

s i v e ly s in c e e a r ly th is y e a r . T h e a p p r e c ia b le

r e s p o n s e to o u r e a s in g a c tio n s . F o r e x a m p le ,

p ic k -u p in n e w a u to s a le s o v e r th e p a s t s e v e r a l

flo w s

m o n th s

of

in d iv id u a l

s a v in g s

in to

c o m m e r c ia l

is

c o n tin u in g .

S a le s

of

new

h ou ses

b a n k s a n d th rift in s titu tio n s b e g a n to p ic k u p

sta r ted r is in g e a r ly th is y e a r , an d a s th e b a c k lo g

in th e fo u r th q u arter o f 1 9 7 4 , a n d b y th e first

o f u n s o ld u n its d e c lin e d b u ild in g p e r m its an d

q u arter o f th is y e a r th e s e d e p o s it s w e r e e x p a n d ­

n e w h o u s in g starts a ls o b e g a n to m o v e u p .

in g at a s e a s o n a lly a d ju ste d a n n u a l rate o f m o r e

W ith e x c e s s in v e n to r ie s at r e ta il, at w h o l e ­

th a n 13 p er c e n t . In f a c t , r e c e n t r a tes o f g r o w th

s a le , an d at m a n u fa c tu r in g firm s b e in g w o r k e d

o f th e m o n e ta r y a g g r e g a te s h a v e b e e n g e n e r a lly

o ff a n d th e c u r v e o f c o n s u m e r s a le s s till r is in g ,

h ig h e r th an d u r in g c o m p a r a b le p e r io d s o f e a r lie r

b u s in e s s m e n

p o s tw a r r e c e s s io n s .

about

T h e e ffo r ts o f th e F e d e r a l R e s e r v e to e a s e

th e

have
fu tu r e .

becom e
N ew

m ore

orders

g o o d s — an im p o r ta n t le a d in g

o p tim is tic

fo r

d u r a b le

in d ic a to r o f in ­

c r e d it c o n d it io n s , to g e th e r w ith th e w e a k e n in g

d u str ia l a c t iv ity — h a v e o f la te b e e n r is in g a g a in .

o f p r iv a te c r e d it d e m a n d s , r e s u lte d in a sh arp

M o r e o v e r , in d u str ia l p r o d u c tio n , a fter h a v in g

d e c lin e o f sh o r t-te r m ra tes o f in te r e st. T h e F e d ­

d e c lin e d fo r e ig h t c o n s e c u t iv e m o n th s , r e g i s ­

era l f u n d s rate— th at i s , th e in te r e st rate b a n k s

te re d its first a d v a n c e in J u n e .

pay

w h en

b o r r o w in g

o th e r — f e ll fr o m

reserves

fr o m

one

an­

In th e la b o r m a r k e t, t o o , th e r e are n u m e r o u s

a h ig h o f 13V2 p er c e n t la st

s ig n s o f im p r o v e m e n t. T h e r a n g e o f n o n fa r m

su m m e r to a b o u t 5 lA p er c e n t in e a r ly J u n e.

in d u str ie s a d d in g to th e n u m b e r o n th e ir p a y r o lls

T h e c o m m e r c ia l p a p er rate d e c lin e d fr o m m o r e

h a s b e e n w id e n in g s t e a d ily , fr o m a l o w o f 17

th an 12 p e r c e n t la s t J u ly to a l o w

o f about

p er c e n t in F e b ru a ry to a b o u t 5 0 p e r c e n t in

5% p er c e n t. A n d th e p r im e rate o f in te r e st o n

M a y a n d J u n e; to ta l e m p lo y m e n t h a s in c r e a s e d

b a n k lo a n s to b u s in e s s e s f e ll fr o m 12 p er c e n t

b y 6 0 0 , 0 0 0 o v e r th e p a s t 3 m o n th s ; th e a v e r a g e

to a l o w o f 7 p e r c e n t.

fa c to r y w o r k w e e k h a s le n g th e n e d ; a n d , o f la t e ,

In th e m a r k e ts fo r lo n g -te r m s e c u r itie s in te r e st
ra tes a ls o d e c lin e d ,
sh o r t-te r m

r a te s.

a lth o u g h m u c h l e s s th an

O f co u rse,

lo n g -te r m

in itia l c la im s fo r u n e m p lo y m e n t in su r a n c e h a v e
d r o p p e d sh a r p ly .

rates

W e m a y b e r e a s o n a b ly c o n fid e n t, th e r e fo r e ,

t y p ic a lly flu c tu a te w ith in a n a r r o w er r a n g e th an

that a r e c o v e r y in b u s in e s s a c tiv ity w i l l d e v e lo p

sh o r t-te r m r a te s; b u t in th e p r e se n t in s ta n c e ,

s o o n if it is n o t a lr e a d y u n d e r w a y . H o w s tr o n g

o th e r p o w e r fu l f a c to r s h a v e a ls o b e e n at w o r k .

th e r e c o v e r y w ill b e n o o n e c a n f o r e s e e w ith

F e a r s o f in fla tio n are s till w id e s p r e a d , a n d l o n g ­

a n y a s s u r a n c e . T h e r e are a m p le a m o u n ts o f id le

te rm in te r e st r a tes th e r e fo r e s till c o n ta in a s i z ­

la b o r

a b le in fla tio n p r e m iu m . M o r e o v e r , c o r p o r a tio n s

g r o w th o v e r th e n e x t s e v e r a l q u a rte r s. P a st c y ­

h a v e is s u e d an e n o r m o u s v o lu m e o f b o n d s in

c lic a l e x p e r ie n c e

th e first h a lf o f th is y e a r; S ta te a n d lo c a l g o v ­

s te e p d e c lin e in b u s in e s s a c tiv ity s u c h as w e

e r n m e n ts h a v e b o r r o w e d la r g e s u m s in th e c a p i­

h a v e e x p e r ie n c e d is u s u a lly f o l lo w e d b y a b r isk

tal m a r k e ts ; a n d tr o u b le s o m e u n c e r ta in tie s h a v e

recovery.

b e e n c r e a te d b y th e fin a n c ia l p r o b le m s o f s o m e




an d

c a p ita l

resou rces
su g g ests,

to

p e r m it

m oreover,

rap id
th at a

A c e n tr a l o b j e c tiv e o f F e d e r a l R e s e r v e p o lic y

494

Federal Reserve Bulletin □ August 1975

at th e p r e se n t tim e is to c o n tr ib u te to a su b s ta n ­

th e F e d e r a l R e s e r v e s h o u ld d e v o t e a lm o s t e x ­

tia l e x p a n s io n in o u tp u t a n d e m p lo y m e n t . T h e

c lu s iv e a tte n tio n to th e b e h a v io r o f M x— th a t i s ,

v ig o r

w ill

c u r r e n c y p lu s d e m a n d d e p o s it s . W e in th e F e d ­

d e p e n d l e s s o n th e rate o f e x p a n s io n in m o n e y

era l R e s e r v e d o n o t ta k e s o n a r r o w a v i e w o f

a n d c r e d it th a n o n th e c o n f id e n c e o f th e p u b ­

ou r r e s p o n s ib ilit ie s .

of

e c o n o m ic

recovery,

how ever,

l i c — in p a r tic u la r , th e w i l li n g n e s s o f b u s in e s s e s

The

p u b l i c ’s

dem and

fo r

cu rrency,

fo r

an d c o n s u m e r s to p u t th e e n o r m o u s v o lu m e o f

c h e c k in g d e p o s it s , fo r s a v in g s d e p o s it s , an d fo r

e x is t in g m o n e y b a la n c e s to w o r k .

a h o s t o f o th e r liq u id a s s e ts is c o n s t a n tly c h a n g ­

T h e tu r n o v e r o f m o n e y , or its v e lo c i t y , v a r ie s
w id e ly in th e c o u r s e o f a b u s in e s s c y c l e . D u r in g

in g . F in a n c ia l t e c h n o lo g y

in o u r c o u n tr y h a s

d e v e lo p e d r a p id ly in th e p a st 2 0 to 3 0 y e a r s .

th e first y e a r o f e a r lie r p o s tw a r r e c o v e r ie s , th e

A s a r u le ,

v e lo c i t y o f M x— th at i s , th e ra tio o f th e d o lla r

lo n g e r h o ld a ll, or e v e n m o s t , o f th eir s p e n d a b le

co n su m er

and

b u s in e s s

firm s

no

v a lu e o f th e g r o s s n a tio n a l p r o d u c t to th e n ar­

fu n d s in th e fo r m o f c u r r e n c y or d e m a n d d e p o s ­

r o w ly d e fin e d m o n e y s u p p ly — h a s u s u a lly r ise n

its. M o r e an d m o r e c o r p o r a te tr ea su rers h a v e

a b o u t 5 or 6 p er c e n t , c o m p a r e d w ith a rate

le a r n e d h o w to g e t a lo n g w ith a m in im u m o f

o f in c r e a s e in M x o f a r o u n d 3 or 4 p er c e n t.

d e p o s it s in th e ir c h e c k in g a c c o u n ts . C o n s u m e r s ,

A s c o n fid e n c e in th e e c o n o m y im p r o v e s in th e

t o o , h a v e le a r n e d to k e e p an in c r e a s in g part o f

m o n th s a h e a d , th e v e lo c i t y o f m o n e y — w h ic h

th eir tr a n sa c tio n s a n d p r e c a u tio n a r y b a la n c e s in

d e c lin e d d u r in g th e p a s t s e v e r a l q u a rte r s— w ill

th e fo r m

p r o b a b ly in c r e a s e s ig n ific a n t ly .

b a n k s , or d e p o s it s in s a v in g s an d lo a n a s s o c i a ­

T h is fa c to r is

of

s a v in g s

d e p o s it s
of

at c o m m e r c ia l

fr e q u e n tly n e g le c t e d b y e c o n o m is t s a n d o th e r s ,

t io n s , or c e r tific a te s

b u t w e at th e F e d e r a l R e s e r v e c a n n o t a ffo rd to

b i l ls , or sh a r e s in m o n e y m a r k e t f u n d s , or o th e r

d e p o s it , or T r e a s u r y

do so.

in c o m e -e a r n in g liq u id in str u m e n ts . T h e s e tr en d s

In c o n d u c tin g m o n e ta r y p o l i c y , w e w ill a ls o

are lik e ly to c o n tin u e . U s e o f s o - c a lle d n e g o t ia ­

h a v e to r e m a in m in d fu l o f th e u r g e n c y o f d e a l­

b le ord er o f w ith d r a w a l ( N O W ) a c c o u n ts an d

in g w ith th e lo n g e r -r u n p r o b le m o f in fla tio n as

o th e r in te r e s t-b e a r in g d e p o s it s fo r tr a n sa c tio n s

w e ll a s w ith th e cu r re n t p r o b le m o f u n e m p lo y ­

p u rp oses

m e n t. E c o n o m ic r e c o v e r y is a p p a r e n tly b e g in ­

tra n sfe r

n in g at a tim e w h e n th e rate o f in fla tio n , w h ile

p a y m e n ts m e c h a n is m a n d th e fo r m s in w h ic h

lo w e r th an a y e a r a g o , is s till w e l l a b o v e a

m o n e y is h e ld . In th is d a y a n d a g e n o s in g le

to le r a b le p a c e . O u r o b j e c tiv e a s a N a t io n sh o u ld

concep t

b e to a c h ie v e fu rth er m o d e r a tio n in th e a d v a n c e

s p e n d a b le fu n d s h e ld b y th e p u b lic .

is

g r o w in g ,

sy stem s

of

m ay

m oney

an d
w e ll

conveys

e le c tr o n ic

fu n d s

r e v o lu t io n iz e

a d e q u a te ly

th e

th e

o f th e g e n e r a l p r ic e l e v e l o v e r th e m o n th s a h e a d ,

V i e w e d in is o la t io n , th e b e h a v io r o f th e n ar­

an d w e sh a ll th e r e fo r e n e e d to a v o id a c tio n s that

r o w ly d e fin e d m o n e y s u p p ly , M u c a n a c tu a lly

th r e a te n an a c c e le r a tio n o f in fla tio n la ter o n — a

b e a m is le a d in g g u id e to th e d e g r e e o f m o n e ta r y

d e v e lo p m e n t th at w o u ld c r e a te e v e n m o r e in ­

e a s e or r estr a in t. F o r e x a m p le , in p e r io d s o f

tr a c ta b le e c o n o m ic p r o b le m s th a n w e h a v e y e t

d e c lin in g e c o n o m ic a c t iv it y , b o th th e tr a n sa c ­

e n c o u n te r e d . I w a s g la d to s e e th e S e n a te C o m ­

tio n s d e m a n d fo r c a s h a n d th e p r iv a te d e m a n d

m itte e o n B a n k in g , H o u s in g , a n d U r b a n A ffa ir s

fo r c r e d it w i l l te n d to w e a k e n a n d th u s s lo w

r e c o g n iz e th is b a s ic truth in its r e c e n t rep ort o n

th e g r o w th

m o n e ta r y

m a r k e t r a tes o f

p o lic y ,

w h ic h

s ta te s

u n e q u iv o c a lly

th at “ if in fla tio n is r e k in d le d , a n y r e c o v e r y w ill

o f M x. B u t d u rin g
in te r e st

u s u a lly

su c h p e r io d s
d e c lin e

and

th e r e b y s tim u la te fa ste r r a tes o f g r o w th o f c o n ­

b e s h o r t -liv e d a n d w i l l e n d in a n o th e r r e c e s s io n ,

su m e r -ty p e d e p o s it s at c o m m e r c ia l b a n k s a n d

o n e a lm o s t c e r ta in to b e m o r e v ir u le n t th an th e

o th e r fin a n c ia l in s titu tio n s .

p resen t o n e .”

D u r in g p e r io d s o f e c o n o m ic e x p a n s io n , th e

In t e s t ify in g b e f o r e th at c o m m itte e o n M a y

b e h a v io r o f M x m a y a g a in b e m is le a d in g . A t

1 o f th is y e a r , I in d ic a te d that th e c o u r s e o f

su c h t im e s la r g e d e m a n d s fo r c r e d it an d m o n e y

m o n e ta r y

p o lic y

ade­

are lik e ly to s tr e n g th e n th e g r o w th o f M ls b u t

q u a te ly b y f o c u s i n g o n a n y s in g le m e a s u r e o f

o p e n m a r k e t in te r e st r a tes w ill te n d to r is e an d

m o n e y b a la n c e s . S o m e o b s e r v e r s b e l ie v e that

th e r e b y c u r ta il th e flo w o f in d iv id u a l s a v in g s to




cann ot

be

u n d e r s to o d

Statements to Congress

banks and thrift institutions. A monetary policy
formulated on the basis of Mx alone would
ignore the pressures of disintermediation that
develop in periods of economic expansion and
thus threaten serious damage to the mortgage
market and to the homebuilding industry.
To avoid errors of this kind, the Federal
Reserve takes into account the behavior of nu­
merous monetary and credit aggregates in con­
ducting monetary policy. Among these is M2,
which includes—besides currency and demand
deposits—consumer-type time deposits at com­
mercial banks; M3, a still broader composite,
which includes also the deposits at savings
banks, savings and loan associations, and credit
unions; M4, which starts with M2 and adds large
certificates of deposit issued by commercial
banks; M5, which is more comprehensive than
any of the preceding aggregates because it in­
cludes the currency holdings of the public plus
all deposits at all financial institutions; and also
the credit proxy, which indicates the funds that
member banks have available for lending.
Besides following these and still other aggre­
gates, we pay careful attention to the condition
of financial markets—that is, to movements in
interest rates, lending terms, the liquidity needs
of businesses and financial institutions, and
other variables, including the foreign exchange
value of the dollar. All of these must be given
some weight in the conduct of monetary policy.
On May 1 of this year, I informed the Senate
Banking Committee that the Federal Reserve
was seeking a moderate rate of expansion in
the monetary and credit aggregates, and that the
course we are pursuing will promote an increase
in
of between 5 and IV2 per cent over the
12 months ending in March 1976. It was ex­
pected that the related growth rates of other
major aggregates would be somewhat higher—
with M2 increasing in a range of 8 V2 to IOV2
per cent; M3, in a 10-12 per cent range; and
the credit proxy, in a range of 6 V2 to 9Vi per
cent.
Economic prospects now are not materially
different than the Federal Reserve anticipated
2 or 3 months ago, and we therefore as yet see
no reason to alter the general course of monetary
policy. Accordingly, the Federal Open Market
Committee has reaffirmed its intent to seek the



495

growth ranges announced earlier. In view of the
erratic movements to which monthly figures on
money balances are subject, the projected
growth ranges for the several aggregates now
cover the 12-month span from the second quar­
ter of 1975 to the second quarter of 1976. In
the future, we will generally express our pro­
jected growth range of each monetary aggregate
from a quarterly base because a 3-month
average is less subject to erratic movements than
is a single-month base.
We have recently experienced some extreme
short-run fluctuations in the growth rate of
money balances. Such movements may give rise
to confusion regarding the course of monetary
policy. It may be helpful, therefore, to comment
on the huge bulge in the rate of growth of the
monetary aggregates during May and June.
This bulge was a direct result of the tax bill
passed earlier this year by the Congress. The
tax rebate checks and supplemental social secu­
rity payments disbursed by the Treasury were
temporarily added to the public’s holdings of
currency, demand deposits, and savings ac­
counts. Thus, Mx grew at an average annual
rate of more than 14.5 per cent during the
months of May and June, and M2 increased at
a rate of about 16 per cent. But by late June
and early July, as individuals disposed of their
additional funds, the explosion of the monetary
aggregates subsided.
The May-June bulge in the monetary aggre­
gates did not come as a surprise, but it was
larger than we had expected—and very much
larger than we desired. It must be clearly un­
derstood that the Federal Reserve has no inten­
tion of permitting rates of increase as high as
those in the second quarter to continue. The
special Treasury disbursements have come to an
end; and the Federal Reserve has already set
in motion forces that should, in the near future,
return the growth of the monetary aggregates
to the moderate path desired. True, these recent
actions have left their mark on short-term mar­
ket rates of interest. But we have succeeded in
avoiding during the past 2 to 3 months the
severe and damaging effects on credit markets
that would have occurred if we had pursued a
rigid money supply objective such as some
economists keep urging on us.

496

Federal Reserve Bulletin □ August 1975

As recent experience indicates, short-run
variations in the stock of money may not at all
reflect the intent or the underlying course of
Federal Reserve policy. My colleagues and I
have frequently noted that short-run movements
of the monetary stock have little significance,
and it is good to have the opportunity to state
once again that far more attention is given to
these short-run fluctuations than is warranted.
Actually, our studies indicate that large devia­
tions in the growth of money from a long-run
path may occur for half a year or even longer
and still have a negligible effect on the workings
of the real economy. We must learn to recognize
that monthly fluctuations such as those in the
rate of growth of the money stock, however
defined, are characteristic of almost any series
in which monthly changes are small relative to
the level of the series.
In view of considerations such as these, the
Federal Reserve focuses its attention principally
on an appropriate growth of money balances
over periods running from 6 months to a year.
Unfortunately, our ability to control this
longer-run rate of monetary expansion is less
precise than it should or could be. Deficiencies
in existing statistical data are part of the prob­
lem. Steps have been taken by the Federal
Reserve to speed the collection of data and to
improve its quality. We have also been explor­
ing, with the cooperation of the FDIC, methods
to obtain better estimates of money balances
held at nonmember banks. The information now
available regarding demand deposits at non­
member banks is entirely inadequate and at
times has misled the Federal Reserve and the
public as to the actual course of monetary ex­
pansion.
Our control over the Nation’s money stock
would be imprecise, however, even with the
best of statistical information. The Federal Re­
serve’s influence over the money stock is indi­
rect. The principal means we use to regulate the
growth of money and credit is to buy or sell
government securities in the open market. These
transactions are taken at our initiative and in
such dollar amounts as we deem appropriate.
The size of the Federal Reserve’s portfolio of
securities is thus under our control. The re­
sponse of the money stock to an open market



purchase or sale, however, is determined by
decisions of commercial banks and of the public
at large—decisions over which we have no
control.
For example, a purchase of securities by the
Federal Reserve would lead to little or no in­
crease in the reserves of member banks if there
were an equivalent rise in the public’s holdings
of currency, or if member banks used the addi­
tional funds to repay indebtedness to their Fed­
eral Reserve Banks. Alternatively, member
banks might choose to add to their excess re­
serves instead of employing the newly acquired
funds for lending or investing. In that event,
there would be no multiplier effect of reserve
expansion on deposit creation.
The choices made by the public as to the form
in which newly created deposits are held and
the type of commercial bank in which the funds
are deposited also influence the response of the
money stock, particularly
or M2, to a re­
serve injection. The response of the narrowly
defined money supply would be larger if the
public increased its holdings of demand deposits
at smaller member banks because reserve re­
quirements at these banks are lower than those
at the larger member banks. And, of course,
the freedom of the public to choose between
demand and time deposits can alter materially
the amount of aggregate deposits that can be
supported by a given volume of reserves.
Part of the imprecision in monetary control
also arises from the fact that a sizable fraction
of money balances is held at banks that are not
subject to the reserve requirements set by the
Federal Reserve. Once the Congress sees fit to
adopt the legislation on uniform reserve re­
quirements that we have been seeking for sev­
eral years, the Federal Reserve’s control over
the monetary aggregates will be improved and
financial institutions offering similar deposit
services will at the same time be treated more
equitably.
In closing, let me remind this distinguished
committee that the growth ranges for the mone­
tary aggregates that we have projected for the
next year may need to be adjusted one way or
another. Clearly, the growth rates presently
sought by the Federal Reserve, while appro­
priate in the present environment of high unem­

Statem ents to Congress

497

ployment and unused industrial capacity, could
not be maintained indefinitely without rekin­
dling inflationary forces. As the economy re­
turns to higher rates of resource utilization, it
will be necessary to reduce the rate of monetary
and credit expansion so that the basis for a
lasting prosperity is laid.
We must not lose sight of the fact that the
principal cause of the current recession is an
inflation that got out of control. Our Nation has
paid a heavy price during the past year for
neglect of this serious problem. All of us in

Government must work to promote a good re­
covery in economic activity ; but all of us must
also take great care lest the hard-won gains of
the past year are nullified by a new round of
inflation. The rise of the consumer price level
in June at an annual rate of more than 9 per
cent is a warning that the menace of inflation
is still very much with us. The task now facing
our country, therefore, is not only to hasten the
process of economic recovery but also to un­
wind the inflation and thus lay the basis for a
lasting prosperity.
□

Statement by Arthur F. Burns, Chairman ,
Board of Governors of the Federal Reserve
System , before the Joint Economic Committee ,
July 29, 1975.

a burgeoning of credit demands, both public and
private, and interest rates soared.
These developments, however, were largely
overlooked by a business community caught up
in the euphoria created by inflation. New orders
flowing to manufacturers continued to rise,
order backlogs generally increased, and stock­
piles of materials and other commodities
mounted. By the summer of 1974 the physical
volume of business inventories was already
higher in relation to sales than at any time since
the Korean war, but inventories still kept
climbing. The stage was thus set for a signifi­
cant economic adjustment.
Business activity began to decline sharply in
the autumn of last year. Between September
1974 and May 1975 industrial output fell by
12.5 per cent. As a result, a substantial part
of the Nation’s industrial plant became idle;
total employment dropped by 2.5 million from
its peak in October 1974 to a low in March
of this year; the length of the average workweek
declined; the rate of unemployment rose from
under 5 per cent in late 1973 to perhaps 9 per
cent at the present time; and business profits
slumped.
The recession has cut deeply into the Nation’s
economic life, but it has at the same time been
performing an unavoidable function. Because of
the neglect of inflation over the previous decade,
our national economy was in serious trouble a
year ago. Inflation was raging. Industrial com­
modity prices in wholesale markets were rising
at an annual rate of over 25 per cent. Interest

I am pleased to meet once again with this
distinguished committee to present the views of
the Board of Governors on the condition of the
national economy.
The performance of our economy during the
past 2 years has been disappointing. We have
suffered the most damaging peacetime inflation
in our Nation’s history, a critical shortage of
energy supplies, and the deepest decline in
business activity since the end of World War
II.
Signs of faltering in the pace of economic
expansion had already emerged in the spring of
1973. Homebuilding began to turn down, and
so too did sales of mobile homes, new autos,
and other big-ticket consumer items. A declin­
ing trend in the physical volume of other goods
purchased by consumers soon followed.
In the winter of 1973-74 the Arab embargo
on oil exports caused some interruption of eco­
nomic activities. A related and perhaps more
ominous development was a quickening of the
rate of inflation. The steep rise in oil prices
diverted purchasing power to foreign suppliers.
Rising prices of consumer goods and services
eroded the purchasing power of workers’ in­
comes and savings and resulted in a further
weakening of retail sales. Inflation also led to



498

Federal Reserve Bulletin □ August 1975

rates were at record highs. Not a few financial
and industrial firms were encountering difficul­
ties in rolling over their commercial paper or
in raising funds through other channels. Can­
cellations or postponements of corporate bond
and stock offerings were announced almost
daily. Stock prices plummeted. Fears spread
that real estate investment trusts, public utilities,
other business enterprises, and even banks
might be unable to weather the gathering finan­
cial storm. And many millions of American
workers, investors, and businessmen became
deeply concerned about their own and the Na­
tion’s economic future.
We have by no means found a satisfactory
solution to all the economic and financial prob­
lems that troubled us a year ago. Confidence,
however, is reviving as a result of the corrective
forces that have been at work in recent months.
Thus, business competition is now much
keener than it was a year or two ago. Business
managers are also devoting more attention to
cost control and improvements in efficiency.
Prices of industrial raw materials have fallen
substantially. Price increases at later stages of
processing have also become less extensive. The
rise of the general price level has therefore
slowed—from an annual rate of about 12 to 14
per cent late last year to about half that rate
recently. Increases of wage rates, moreover,
have moderated, although they are still much
higher than the long-run rate of increase in
productivity.
As industrial activity declined in our country,
the need to import industrial materials and other
goods diminished. Our merchandise exports, on
the other hand, continued to reflect the im­
provement of our competitive position in world
markets during the past 2 or 3 years. The foreign
trade balance of the United States therefore
moved from a sizable deficit in the first half of
1974 to a substantial surplus this year. This
development helped to cushion the decline in
domestic economic activity, and it also contrib­
uted to the strengthening of the dollar in foreign
exchange markets since last March. The dollar,
I am glad to say, is re-establishing itself as the
strongest currency in the world.
In financial markets the marked improvement
in sentiment over the past year has been re­



flected in a recovery of stock and bond prices.
Interest rates on short-term securities declined
very sharply. The Federal funds rate—that is,
the interest rate banks pay when borrowing
reserves from one another—fell from a high of
13V2 per cent last summer to about 5lA per cent
in early June. The commercial paper rate de­
clined from over 12 per cent last July to a low
of about 5Vi per cent. And the prime rate of
interest on bank loans to businesses fell from
12 per cent to a low of 7 per cent.
Interest rates on long-term securities declined
much less than short-term rates. Long-term rates
typically fluctuate within a narrower range than
short-term rates; but in the present instance
other powerful factors have also been at work.
Fears of inflation are still widespread among
both lenders and borrowers, and long-term in­
terest rates therefore still contain a sizable in­
flation premium.
As the condition of our money and capital
markets improved, so also did the financial
position of business firms. Corporations have
issued exceptionally large amounts of longerterm securities this year, and they have used
much of the proceeds to repay short-term debt
or to acquire liquid assets. The liquidity position
of consumers has likewise been strengthened;
instalment debts to banks and other lenders have
been paid down, and many millions of individ­
uals have added substantially to their savings
deposits and other liquid assets.
Financial intermediaries, too, have improved
their condition. Commercial banks have taken
advantage of the reduced demand for business
and consumer loans to repay their borrowings
from Federal Reserve Banks, to reduce reliance
on volatile sources of funds,, and to rebuild
liquid assets. In their turn, savings and loan
associations and mutual savings banks have
reduced their indebtedness and enlarged their
holdings of Treasury securities and other liquid
assets, thus laying the basis for the renewed
expansion of mortgage lending during recent
months.
The beneficial effects of easier conditions in
financial markets and of the moderation of in­
flation began to appear in markets for goods and
services while recessionary forces were still
spreading. For example, new mortgage loan

Statem ents to Congress

commitments of savings and loan associations
began to turn up in November of last year. By
January sales of new single-family homes were
also rising. The backlog of unsold units there­
fore declined, and residential building began to
recover.
In consumer markets price concessions on
autos and other items became common early this
year, and retail sales—especially of durable
goods—expanded. In fact, consumer expendi­
tures during the first quarter rose in real terms
as well as in dollars. This upward trend contin­
ued in the second quarter as spendable incomes
of consumers were augmented—first by tax re­
bate checks, later by extra social security
checks.
With consumer purchases expanding and
production declining, the efforts of business
firms to work down their excess stocks have
been remarkably successful. In the second
quarter of this year, inventory liquidation
reached an annual rate of around $35 billion—or
about 2 % per cent of the dollar value of the
gross national product. This is the largest de­
cline of inventories relative to the GNP in any
quarter of the entire postwar period. The rate
of production in the second quarter was thus
unusually low relative to final sales. With the
level of inventories in most consumer lines now
in rather good balance with sales, the base has
been laid for a recovery in aggregate economic
activity.
Correction of the economic and financial im­
balances of a year ago has resulted, in large
part, from the internal workings of the business
cycle. These self-corrective forces have been
aided powerfully, however, by fiscal and mone­
tary policies that sought to cushion the effects
of economic adversity, moderate recessionary
forces, and provide some stimulus to economic
recovery. I need not dwell on the fiscal measures
that have been adopted to combat recessionary
forces; these measures have already been widely
discussed. Let me note merely that I believe
the Congress acted wisely in providing only a
temporary fiscal stimulus through the Tax Re­
duction Act of 1975. The confidence of our
citizens in the Nation’s economic future has
been bolstered by evidence that responsible
members of both the executive and legislative



499

branches of our Government are seeking ways
to stimulate recovery without releasing a new
wave of inflation.
This principle has also guided monetary pol­
icy. Last summer, as signs of weakening in
economic activity multiplied, the Federal Re­
serve began taking steps to increase the avail­
ability of money and credit. Open market
operations were oriented toward a more liberal
provision of reserves to the banking system;
later, these actions were reinforced by several
reductions in the discount rate and in reserve
requirements.
During the fall and winter months the demand
for credit by businesses and consumers weak­
ened on account of the recession, and commer­
cial banks used the more abundant supply of
reserves to repay their indebtedness to the Fed­
eral Reserve. Growth in
—that is, currency
plus demand deposits—was therefore slow to
reflect the easing of monetary policy. We at the
Federal Reserve were concerned about this de­
velopment, but we refused to run the risk of
releasing fresh inflationary forces and rekindling
inflationary expectations. In any event, broader
monetary aggregates displayed a more vigorous
response to our easing actions. For example,
flows of individual savings into commercial
banks and thrift institutions began to pick up
in the fourth quarter of 1974; and by the first
quarter of this year, these deposits were ex­
panding at a seasonally adjusted annual rate of
more than 13 per cent.
Federal Reserve actions to increase the avail­
ability of reserves take some time to work their
way through the economic system. As a conse­
quence, some of the effects of easier Federal
Reserve policies during a recession may not
register in M1? the narrowly defined money
stock, until the demand for transactions balances
begins to strengthen. That may well have been
a factor in the huge bulge of the money supply
during May and June of this year. However,
a large part of this bulge was also the direct
result of the tax bill passed earlier this year by
the Congress. The tax rebate checks and sup­
plemental social security payments disbursed by
the Treasury were temporarily added to the
public’s holdings of currency, demand deposits,
and savings accounts. Thus, M x grew at an

500

Federal Reserve Bulletin □ August 1975

average annual rate of 14V2 per cent during the
months of May and June, and M2—which in­
cludes consumer-type time deposits at commer­
cial banks, besides currency and demand de­
posits—increased at a rate of about 16 per cent.
By late June and early July, as individuals
disposed of their additional funds, the explosion
of the monetary aggregates subsided.
Over the past three quarters as a whole—that
is, during the period of steeply declining busi­
ness activity—the additions to money and credit
supplies have been on the generous side for an
economy that is continuing to suffer from infla­
tion. In fact, the growth rates of the monetary
aggregates during this recession have been ap­
preciably higher than during comparable periods
of earlier postwar recessions. The narrowly de­
fined money stock, M1? increased at an annual
rate of about 5 per cent from the third quarter
of 1974 to the second quarter of this year.
Increases in broader measures of money bal­
ances were considerably larger over this period.
For example, M3—which includes all con­
sumer-type time deposits at depositary institu­
tions, in addition to currency and checking
accounts—rose at an annual rate of 9 per cent
over the three quarters. As these facts indicate,
Federal Reserve policy contributed materially to
establishing the financial basis for an upturn in
business activity.
In recent weeks signs have multiplied that the
economy is moving through a turning zone from
recession to recovery. Improved markets for
consumer goods have been leading the way,
with retail sales gaining strength progressively
since early this year. The appreciable pick-up
in new auto sales over the past several months
is continuing and so is the uptrend in sales of
residential real estate. Sales of new houses in
May were 50 per cent above their trough of last
December, and the backlog of unsold units is
down to 8 months’ supply at recent sales rates.
With excess inventories at retail, wholesale,
and manufacturing firms being worked off and
the curve of consumer sales still rising, busi­
nessmen have become more optimistic about the
future. New orders for durable goods—an im­
portant leading indicator of industrial activity—
have risen in each of the past 3 months. More­
over, industrial production, after having de­



clined in eight consecutive months, registered
its first advance in June.
In the labor market, too, there are numerous
signs of improvement. The range of nonfarm
industries adding to their payrolls has been
widening steadily, from a low of 17 per cent
in February to about 50 per cent in May and
June; total employment has increased by 600,000 over the past 3 months; the average factory
workweek has lengthened; and of late, initial
claims for unemployment insurance have
dropped substantially.
We may be reasonably confident, therefore,
that a recovery in business activity will develop
soon if it is not already under way. Inventory
liquidation in some lines—particularly among
producers of capital equipment—seems likely to
continue for a time, and an upturn in business
fixed investment may lag behind the expansion
in general economic activity. In many sectors,
however, the need to rebuild stocks in response
to improving sales will add a strong upward
thrust to industrial production and to employ­
ment in the months ahead. As uncertainties
about jobs and earned incomes abate, consumer
spending will advance further. A significant rise
in residential building activity may also be ex­
pected because the underlying improvement in
the condition of real estate markets has just
begun to register in rising new home con­
struction.
The outlook for our foreign trade balance,
while less clear, also appears to be favorable.
To be sure, recent trade surpluses reflect in part
the impact of the decline in domestic activity
on our imports—especially of fuels and indus­
trial supplies. A revival of economic activity
here will tend to boost these imports; but once
foreign economies begin to recover, which
seems likely before the year comes to an end,
our exports of industrial materials will also pick
up. Exports of machinery have been maintained
at a high level this year despite the weakness
of foreign economies; these exports may be
expected to do well over the next year. And
in view of unsatisfactory harvests abroad, our
exports of grain will be large—perhaps even
embarrassingly large.
Recovery from the recession of 1974-75 thus
seems likely to be broadly based. How strong

Statements to Congress

the recovery will be, no one can foresee with
any assurance. The amounts of idle labor and
capital resources are certainly sufficient to per­
mit rapid growth over the next several quarters.
Past cyclical experience suggests, moreover,
that a steep decline in business activity such as
we have experienced is usually followed by a
brisk recovery.
We must recognize, however, that our econ­
omy is confronted with some troublesome
problems to which public policy must attend if
full employment is to be regained. Energy prices
are extraordinarily high, and they may well rise
further. Shortages of energy supplies and other
industrial materials could become a serious im­
pediment to the expansion of production and
jobs in a year or two. Our financial markets,
meanwhile, will have to absorb a huge volume
of Treasury securities this fiscal year—at a time
when private credit demands will be expanding
to finance larger economic activity. To make
matters worse, inflation is still adding its own
dimension to pressures in financial markets.
The vigor of economic expansion in the year
ahead, and even more over the next few years,
will depend heavily on the ability of our Gov­
ernment to find ways to cope with these diffi­
culties. Let me therefore turn to the implications
of these problems for public policy.
As far as the Federal Reserve is concerned,
the only responsible policy is to pursue a mod­
erate course of monetary and credit expansion,
such as I described before the House Committee
on Banking, Currency, and Housing a few days
ago.
The relation over time between money bal­
ances and the physical volume of economic
activity is rather loose because so much depends
on the attitudes of businessmen and consumers
as well as on other governmental policies that
are pursued simultaneously. But with M 1 grow­
ing in a range of 5 to IV2 per cent, and more
comprehensive measures of money expanding
substantially faster than this, it should be en­
tirely possible to finance a recovery of normal
cyclical dimensions over the next year. History
teaches that the turnover of money—that is, the
willingness of people to use their existing
money balances—tends to rise much faster in
the recovery stage of the business cycle than



501

does the monetary stock itself. This basic fact
about the business cycle must never be over­
looked in judging the reasonableness of mone­
tary growth rates.
I might add that materially higher or lower
monetary aggregates than the Federal Reserve
has projected for the coming year would involve
serious risks. If, for example, the expansion of
Mxwere held down to 3 or 4 per cent, short-term
interest rates might rise rapidly and impede
economic recovery. On the other hand, if a
growth rate of 8 or 10 per cent were sought,
inflationary expectations would be intensified
and larger increases in prices and costs would
be encouraged. In these circumstances, long­
term interest rates would tend to rise because
investors would insist on getting, and borrowers
would be willing to pay, a higher inflation
premium. It is highly important to bear in mind
the longer-run effects of the policy alternatives
now available to the Federal Reserve. More
rapid monetary growth would indeed tend to
hold down short-term interest rates and thus
impart some immediate stimulus to economic
activity. But long-term interest rates would soon
rise and perhaps frustrate any reasonable pros­
pect of recovery in housing or business capital
investment.
As I noted earlier, the growth of monetary
aggregates in recent months has been well above
the longer-run rates of expansion that we have
been seeking. The Federal Reserve has no in­
tention of permitting rates of increase as high
as those in the second quarter to continue. The
special Treasury disbursements have come to an
end; and we have already set in motion forces
that should, in the near future, return the growth
of the monetary aggregates to the moderate path
desired. These recent actions have left their
mark, if only temporarily, on short-term market
rates of interest. But if that had not occurred,
the business and financial community, which
nowadays is highly sensitive to monetary
growth rates, might well have concluded that
the Federal Reserve is releasing a new wave
of inflation. Any such interpretation by market
participants could have had damaging effects on
economic prospects at this stage of the business
cycle.
As I believe this committee recognizes, the

502

Federal Reserve Bulletin □ August 1975

growth ranges for the monetary aggregates that
we have projected for the next 12 months may
need to be adjusted one way or another. Clearly,
the growth rates presently sought by the Federal
Reserve, while appropriate in the present envi­
ronment of high unemployment and unused in­
dustrial capacity, could not be maintained in­
definitely without giving up the fight against
inflation. As the economy returns to higher rates
of resource utilization, it will be necessary to
reduce the rate of monetary and credit expansion
in order that the basis for a lasting prosperity is
laid.
Timely steps may also be needed to reduce
the degree of fiscal stimulation as economic
recovery proceeds. The gigantic budget deficits
for fiscal 1975 and 1976—coming on top of the
persistent Federal deficits of the past decade—
are a major source of the inflationary expecta­
tions that are holding up long-term interest rates.
When anticipations of inflation are as pervasive
as they are today, the only effective device
available to the Federal Reserve for holding
down long-term interest rates is to pursue a
moderate monetary policy. But fiscal policy can
also be very helpful in this regard. The Ameri­
can people are awaiting further evidence that
their Government will restore the fiscal disci­
pline needed to cope with inflation. The Board
of Governors therefore urges this influential
committee to use its good offices to press for
moderation in fiscal affairs during this and the
next fiscal year.
Our country is confronted today with a
serious dilemma in its search for ways to move
the economy toward full employment. Highly
expansionary monetary and fiscal policies
might, for a short time, provide some additional
thrust to economic activity. But, later on, the
rate of inflation would accelerate sharply—a
development that would create even more
difficult economic problems than we have yet
encountered. The Senate Committee on Bank­
ing, Housing, and Urban Affairs has recognized
this basic truth. Its recent report on monetary
policy states unequivocally that “ if inflation is
rekindled, any recovery will be short-lived and
will end in another recession, one almost certain
to be more virulent than the present one.”
In the current economic and financial envi­



ronment, conventional thinking about a stabili­
zation policy is insufficient. We need to reopen
our economic minds and actively seek ways of
achieving reasonably full employment without
resorting to ever larger monetary and fiscal
stimuli.
A part of our recent problem of continuing
inflation amidst widespread unemployment
stems from a failure to attend sufficiently to
modernization and improvement of our Nation’s
industrial plant. Our country has been devoting
relatively less of its economic resources to
business capital expenditures than any other
major industrial nation in the world. The result
has been a diminishing rate of increase in pro­
ductivity, the emergence in 1973 and 1974 of
severe shortages of critically needed industrial
materials and supplies, and continuing upward
pressure on costs and prices. Renewed scarcities
of major materials—such as steel, industrial
chemicals, and plastics—could impede the pro­
jected economic recovery unless action is taken
soon to step up the rate at which modern facili­
ties are expanded in these industries.
The inadequate rate of investment among
American enterprises reflects to a large degree
the fact that business profits over the last decade
have fallen short of the amounts needed to
finance a good rate of growth of effective in­
dustrial capacity. Last year the after-tax domes­
tic profits of nonfinancial corporations—exclud­
ing inventory gains—were actually smaller than
they were 8 or 10 years ago when the dollar
volume of the output of these corporations was
about half what it is today.
The slump of profits, besides its adverse ef­
fect on investment, has led to increasing de­
pendence of business corporations on borrowed
funds. The amount of debt owed by corporations
relative to their equity position has risen sharply
for more than a decade, and many businesses
therefore no longer have the resiliency they once
had to resist economic and financial adversity.
There is a clear need in our country not only
for larger business capital investment but also
for larger reliance on equity funds in financing
capital expenditures.
These objectives may be promoted by an
overhaul of the structure of Federal taxation.
Value-added taxes are widely used in Western

Statements to Congress

Europe, and it may be instructive to re-examine
the merits of such a tax for our country. There
are, of course, numerous other possibilities. For
example, dividends on preferred stock might be
made tax deductible, as the President has rec­
ommended, or taxation of dividends that are
reinvested in new shares—at the option of the
shareholder—might be deferred. These and
other ways of integrating business and personal
taxes deserve thorough study by the Congress.
Another area that needs immediate action is
our national energy policy. Uncertainties
created by the delay in adopting legislation on
the oil-pricing problem are becoming a serious
obstacle to private economic planning and may
increasingly impede the recovery as time goes
on. In formulating a national energy program
it is of course necessary to give attention to
sources of energy besides oil. Shortages of
natural gas are likely to curtail production in
some States this winter, and this problem will
become more acute in later years if current
policies for controlling the price of natural gas
are not modified. And let us not overlook the
importance of expanding the rate of construction
in the electric utility industry. The President’s
Labor-Management Committee has developed a
series of recommendations to accomplish this
objective that I hope the Congress will weigh
carefully.
Among these recommendations is a sugges­
tion that environmental restrictions be stretched
out to facilitate the expansion of electric-gen­
erating capacity. Of course, the impact of en­
vironmental regulations on the economic activi­
ties of our Nation goes well beyond the electric
utility industry. A good deal of industrial con­
struction across our land is being held up by
environmental regulations and litigation. A sig­
nificant part of business capital outlays, more­
over, is now being channeled into equipment
for the abatement of pollution rather than for
expanding industrial capacity. For example, in
1974 producers of iron and steel, nonferrous
metals, and paper devoted more than 20 per cent
of their capital budgets to pollution control.
Regulations with respect to the environment and
safety have also been a major factor running
up auto prices in recent years and thus putting
a damper on auto sales and production.



503

We at the Federal Reserve are concerned, as
are all thoughtful citizens, with the need to
protect the environment and to improve in other
ways the quality of life. We are also concerned,
however, about the vigor of economic recovery
and the dampening effect of environmental reg­
ulations on business activity. Here, too, a mid­
dle ground is needed.
Governmental practices and programs affect­
ing labor markets also have to be reviewed in
any serious search for noninflationary measures
to reduce unemployment. For example, the
Federal minimum wage law is still pricing many
teenagers out of the job market. At times pro­
grams for unemployment compensation provide
benefits on such a generous scale that they may
be blunting incentives to work. Even in today’s
environment, with perhaps 9 per cent of the
labor force unemployed, there are numerous job
vacancies—perhaps because job seekers are un­
aware of the opportunities, or because the skills
of the unemployed are not suitable, or for other
reasons. It is hard to believe that better results
could not be achieved with more effective job
banks, more realistic training programs, and
other labor market policies.
Indeed, many structural reforms will prove
necessary to enhance the prospects for expanded
employment, while at the same time reducing
the pressures on costs and prices. We need to
gather the courage to reassess our laws directed
against restraint of trade by business firms, to
reassess the enforcement of these laws, also the
monopoly of first-class mail by the Post Office,
the various restrictions on entry into the profes­
sions, the effects of the Davis-Bacon Act on
construction wages and employment, the intri­
cacies of governmental regulation of trans­
portation, the role of trade unions in the public
sector, the effects on consumer prices of the
remaining fair trade laws, and other legislation
or practices that impede the competitive
process. Nor would I rule out the possibility
that some form of incomes policy, going beyond
the legislation governing the Council on Wage
and Price Stability but continuing to rely mainly
on voluntary compliance, may yet be of some
benefit in moving our Nation towards the goals
of full employment and a stable price level.
What I have tried to suggest in these brief

504

Federal Reserve Bulletin □ August 1975

comments on structural policies is that we can
make better progress in moving toward our
national goals by reducing the burden being
carried by monetary and fiscal policies. The
well-meaning citizens who now keep urging
stronger monetary and fiscal stimuli seem to
overlook the fact that excessive reliance on such
policies brought on an accelerating inflation
during the past decade. They overlook the fact
that the current recession was caused basically
by an inflation that got out of control. And they
also overlook the fact that a large part of the
effort that our Nation has directed during the
past decade or longer to improving the lot of
poor people—through increases in social secu­
rity benefits, welfare programs, and other




means—has been nullified by the cumulative
force of inflation.
Our Nation has paid a heavy price during the
past year for tolerating inflation and allowing
it to get out of control. All of us in Government
must now work to promote a good recovery in
jobs and production; but all of us must also take
great care lest the hard-won gains of the past
year be destroyed by a new round of inflation.
The rise of the consumer price level in June
at an annual rate of more than 9 per cent is
a warning that the menace of inflation is still
very much with us. The task facing our country,
therefore, is not only to hasten the process of
economic recovery but also to unwind the infla­
tion and lay the basis for a lasting prosperity. □

505

Record of Policy Actions
of the Federal Open Market Committee
M EETING HELD ON JUNE 16-17, 19751
1.

Domestic Policy Directive

The information reviewed at this meeting suggested that real output
of goods and services—which had fallen sharply during the two
preceding quarters—had leveled off in the second quarter of 1975
and that the rise in prices had moderated further. Staff projections
continued to suggest that real economic activity would expand in
the second half of the year and that the rise in prices would continue
to slow somewhat further.
In May retail sales increased strongly, most likely in response
to the disbursement of a large volume of rebates on Federal income
tax liabilities for 1974 and to a reduction in current income tax
withholdings. Industrial production declined slightly further, as
producers and distributors in many industries continued their efforts
to liquidate inventories; total business inventories had declined
appreciably in both March and April. Nonfarm payroll employment
increased in May, after having changed little in April, and total
employment advanced for the second consecutive month. Never­
theless, the unemployment rate rose further, from 8.9 to 9.2 per
cent, as the civilian labor force continued to grow at a rapid pace.
The index of average hourly earnings for private nonfarm pro­
duction workers rebounded in May, after having declined slightly
in April, but over the first 5 months of the year the rate of advance
in the index was considerably less rapid than the rate during the
second half of 1974. Average wholesale prices of industrial com­
modities rose slightly in May—by about as much as over the
preceding 2 months—while prices of farm and food products
increased moderately further. In April the rise in the consumer
price index had picked up, but the average rise over the first 4
months of the year had remained well below the pace during 1974.
Staff projections for the second half of 1975 suggested moderate
1This meeting was held over a 2-day period, beginning on the afternoon of
June 16.




506

Federal Reserve Bulletin □ August 1975




recovery in real output and substantial gains in nominal GNP. It
was anticipated that the recovery would be spurred by rapid growth
in consumption expenditures in response to the expansive income
tax measures; by increases in residential construction; and by a
considerable slowing in the rate of business inventory liquidation.
On the other hand, it was anticipated that business fixed investment
would decline somewhat further in real terms and that, as a result
of the recovery in business activity in this country, imports would
rise at a faster pace than exports.
Since mid-May the average exchange value of the dollar against
leading foreign currencies had changed little in relatively light
trading. In April the U.S. foreign trade balance remained in surplus;
however, the surplus was well below the first-quarter rate, reflecting
a substantially lower rate of exports. Banks’ liabilities to foreigners
rose more than claims in April, resulting in a small net inflow
of funds compared with a large net outflow in the first quarter
of the year.
Total loans and investments at U.S. commercial banks continued
to expand at a slow pace during May. Outstanding loans to business
declined markedly further—as did the outstanding volume of com­
mercial paper issued by nonfinancial businesses—in association
with inventory liquidation and a continued large volume of cor­
porate financing in the capital market. As in the preceding 3 months,
banks added substantially to their holdings of U.S. Government
securities.
Growth in deposits was exceptionally strong at banks and at
nonbank thrift institutions in May, reflecting in part the large
volume of income tax rebates disbursed during the month, and
M l5 M2, and M 3 all increased substantially. Banks continued to
reduce the outstanding volume of large-denomination CD’s in
response to the growth in other deposits and to the continued
weakness in loan demand, and the bank credit proxy increased
by only a small amount.
Interest rates in private short-term markets had changed little
over the period since mid-May. Market rates on Treasury bills also
changed little in the latter part of May, but they declined in early
June, partly in response to the seasonal reduction in the supply
of bills in prospect for the second half of the month. At the time
of this meeting the market rate on 3-month Treasury bills was 4.88

R ecord o f Policy A ctions of FO M C

per cent, compared with 5.11 per cent on the day before the May
meeting.
Yields on longer-term securities changed little in late May—
despite a continued heavy volume of corporate financing—and then
declined considerably in early June, in part because the prospective
size of Treasury financing through July was not so large as had
been expected. Public offerings of corporate bonds expanded to
a near-record volume in May, in part because of the marketing
of some issues that had been postponed, and a continued large
volume was in prospect for June. Offerings of State and local
government issues in May and the calendar for June also were
heavy. Yields on home mortgages eased in May, after having risen
somewhat in April.
System open market operations since the May 20 meeting had
been guided by the Committee’s decision to seek to maintain about
the prevailing money market conditions over the period immedi­
ately ahead, provided that monetary aggregates generally appeared
to be growing at rates within acceptable ranges of tolerance. The
Federal funds rate, which had been about 5Vs per cent in the days
before the May meeting, remained within a range of 5 to 5% per
cent. In the second week of June, just a few days before this
meeting, available data suggested that over the May-June period
both M x and M 2 would grow at rates well above the specified
ranges of tolerance. Consequently, the System sought some tight­
ening of bank reserve and money market conditions, and the Federal
funds rate rose into a range of 5 XA to 5 Vi per cent.
At this meeting the Committee reviewed the 12-month ranges
for rates of growth in the monetary and credit aggregates on the
average over the period from March 1975 to March 1976 that it
had specified 2 months earlier at the April meeting. The members
agreed that it would be consistent with the Committee’s broad
economic objectives if growth within the same percentage ranges
were to be realized on the average over the 12-month period to
June 1976 from the currently estimated levels for June 1975.2 The
ranges were as follows: M u 5 to IV2 per cent; M2, 8 V2 to 10 V2
2At its meeting on July 15 the Committee decided that the percentage ranges
should apply to the period from the second quarter of 1975 to the second quarter
of 1976, rather than from June to June.




507

508

Federal Reserve Bulletin □ August 1975




per cent; M3, 10 to 12 per cent; and the bank credit proxy, 6 Vi
to 9 xh per cent. As before, it was understood that these ranges,
as well as the particular list of aggregates for which such ranges
were specified, were subject to review and modification at subse­
quent meetings. It also was understood that from month to month
the rates of growth of the various aggregates might well fall outside
ranges contemplated for annual periods as a result of short-run
factors.
In considering current policy, the Committee took note of a staff
analysis suggesting that in the months ahead strong expansion in
transactions demands for money was likely if the substantial gains
projected in nominal GNP materialized. If monetary growth was
to be appropriately constrained, it appeared probable that some
tightening of bank reserve and money market conditions would
need to develop over the weeks immediately ahead.
The staff analysis also suggested that, even with some tightening
in bank reserve and money market conditions, the monetary aggre­
gates would grow at relatively rapid rates in the June-July period,
in large part because of the temporary effects of income tax rebates
and, in the second half of June, of one-time payments to social
security recipients. It was anticipated, however, that private short­
term credit demands would remain weak, as business firms contin­
ued to liquidate inventories and to issue longer-term securities in
large volume.
In the course of the Committee’s discussion a number of mem­
bers expressed uncertainty about the extent to which rapid growth
in the monetary aggregates was attributable to transitory rather than
to fundamental forces affecting the demand for money. No members
advocated aggressive operations at this time to tighten bank reserve
and money market conditions, and there was some sentiment for
continuing about the prevailing money market conditions in the
period until the next meeting on the grounds that additional data
might indicate that growth in the monetary aggregates was in the
process of subsiding. However, some members favored a modest
tightening in the period immediately ahead in order to restrain
growth in the monetary aggregates, and others were prepared to
accept some tightening if it proved to be necessary for that purpose.
At the conclusion of the discussion, the Committee decided that
growth in M x and M 2 over the June-July period at annual rates

R ecord of Policy A ctions of FO M C

within ranges of tolerance of 6 V2 to 9 V2 per cent and 9 to 12 per
cent, respectively, would be acceptable. The members concluded
that such growth rates would be likely to involve growth in reserves
available to support private nonbank deposits (RPD’s) within a
range of 5 to 8 per cent. They agreed that in the period until the
next meeting the weekly average Federal funds rate might be
expected to vary in an orderly fashion within a range of 5 to 6
per cent, if necessary, in the course of seeking monetary growth
rates within the ranges specified. The members also agreed that,
in the conduct of operations, account should be taken of develop­
ments in domestic and international financial markets.
The following domestic policy directive was issued to the Federal
Reserve Bank of New York:
The information reviewed at this meeting suggests that real output
of goods and services—after having fallen sharply for two quar­
ters—has leveled off in the current quarter. In May retail sales
strengthened considerably. Industrial production declined slightly
further, but total employment advanced for the second consecutive
month. The unemployment rate increased again, from 8.9 to 9.2
per cent, as the civilian labor force rose substantially further. The
rise in average wholesale prices of industrial commodities continued
to be slow; prices of farm and food products increased moderately
further. The advance in average wage rates so far this year has
been considerably less rapid than the increase during the second
half of 1974.
The foreign exchange value of the dollar has changed little since
mid-May. The U.S. foreign trade balance continued in substantial
surplus in April, but at a rate much reduced from the first quarter.
After large net outflows in the first quarter, there was a small net
inflow of funds through banks in April, as liabilities to foreigners
rose more than claims.
Growth in Mx, Af2, and M3 was substantial in May, reflecting
in part large Federal income tax rebates deposited at both banks
and nonbank thrift institutions. Business demands for short-term
credit both at banks and in the commercial paper market remained
unusually weak, while demands in the long-term market continued
very strong. Market interest rates in general changed little during
the latter part of May, but since then rates in longer-term markets
and on Treasury bills have declined. Mortgage rates have eased
over the past month.
In light of the foregoing developments, it is the policy of the




509

510

Federal Reserve Bulletin □ August 1975




Federal Open Market Committee to foster financial conditions con­
ducive to stimulating economic recovery, while resisting inflationary
pressures and working toward equilibrium in the country’s balance
of payments.
To implement this policy, while taking account of developments
in domestic and international financial markets, the Committee seeks
to achieve bank reserve and money market conditions consistent
with moderate growth in monetary aggregates over the months
ahead.
Votes for this action: Messrs. Burns, Baughman,
Eastburn, Holland, MacLaury, Mayo, Mitchell,
\yallich, and Debs. Votes against this action:
Messrs. Bucher and Coldwell.
Absent and not voting: Mr. Hayes. (Mr. Debs
voted as alternate for Mr. Hayes.)
Messrs. Bucher and Coldwell dissented from this action because
they believed that a tightening in money market conditions and
the associated increase in short-term interest rates would be prema­
ture at this time, and they preferred to specify a lower range for
the Federal funds rate than that adopted by the Committee. Both
stressed the influence of the tax rebates and payments to recipients
of social security benefits in bringing about high rates of monetary
growth. Mr. Bucher, in addition, thought that primary emphasis
should be given to promoting recovery in economic activity,
because he believed that as yet there were no clear indications
of the forces that would lead the recovery and because he saw
no threat of intensified inflationary pressures so long as rates of
resource use remained comparatively low.
Subsequent to the meeting, on June 26, the available data
suggested that the annual rates of growth in M x and M 2 in June
would be much more rapid than had appeared likely at the time
of the meeting and that growth in both aggregates over the
June-July period, therefore, would be substantially above the upper
limits of the ranges of tolerance established by the Committee.
In the statement week ending June 25 the Federal funds rate
averaged 5.72 per cent; in the latest 3 days it had been close to
6 per cent. The System Account Manager was planning to aim
for a rate of 6 per cent, the upper limit of the specified range
of tolerance.

R ecord of Policy A ctions of FO M C

Against that background and to give the Manager some flexi­
bility, Chairman Burns recommended on June 26 that the upper
limit of the funds rate constraint be raised to 6 xk per cent, on
the understanding that the additional leeway would be used only
in the event that another week’s data confirmed excessive strength
in the monetary aggregates. Members of the Committee—with the
exception of Messrs. Bucher, Holland, and Mitchell—concurred
in the Chairman’s recommendation.
2. A m endm ent to Authorization for Domestic Open M arket
Operations
The Committee amended paragraph 1(c) of the authorization for
domestic open market operations to authorize the Federal Reserve
Bank of New York to arrange repurchase agreements (RP’s) directly
with bank dealers. Prior to this action, the Bank had been authorized
to arrange RP’s with nonbank dealers only. With this amendment,
paragraph 1 (c) read as follows:
(c) To buy U.S. Government securities, obligations that are direct
obligations of, or fully guaranteed as to principal and interest by,
any agency of the United States, and prime bankers’ acceptances
of the types authorized for purchase under 1(b) above, from dealers
for the account of the Federal Reserve Bank of New York under
agreements for repurchase of such securities, obligations, or accept­
ances in 15 calendar days or less, at rates that, unless otherwise
expressly authorized by the Committee, shall be determined by
competitive bidding, after applying reasonable limitations on the
volume of agreements with individual dealers; provided that in the
event Government securities or agency issues covered by any such
agreement are not repurchased by the dealer pursuant to the agree­
ment or a renewal thereof, they shall be sold in the market or
transferred to the System Open Market Account; and provided
further that in the event bankers’ acceptances covered by any such
agreement are not repurchased by the seller, they shall continue
to be held by the Federal Reserve Bank or shall be sold in the
open market.




Votes for this action: Messrs. Burns, Baughman,
Bucher, Coldwell, Eastburn, Holland, MacLaury,
Mayo, Mitchell, Wallich, and Debs. Votes against
this action: None.

511

512

Federal Reserve Bulletin □ August 1975




Absent and not voting:.Mr. Hayes. (Mr. Debs
voted as alternate for Mr. Hayes.)
This action was taken on recommendation of a staff committee,
which advised that it would usefully broaden the scope of partici­
pation in System RP’s. The staff committee also reported that
experience with determination of interest rates on RP’s by compet­
itive bidding—provided for by action of the Committee in April
1972—had been satisfactory.
3. Revision of Guidelines for Operations in Federal Agency
Issues
On recommendation of the Manager, the Committee amended
number 5 of the guidelines for the conduct of System operations
in Federal agency issues to increase the limit on System holdings
of any one issue at any one time from 20 to 30 per cent of the
amount of the issue outstanding, and to increase the limit on System
holdings of the issues of any one agency from 10 to 15 per cent
of the amount of outstanding issues of that agency. The Manager
had advised that Desk operations in agency issues might soon be
inhibited by the existing limits; that flexibility for operations in
agency issues might prove especially useful; and that experience
gained over the past 3 x/2 years of operations in agency issues had
shown that the market was capable of absorbing a larger volume
of System purchases without undue impact on yields or other market
relationships.
Votes for this action: Messrs. Burns, Baughman,
Bucher, Coldwell, Eastburn, MacLaury, Mayo,
Mitchell, Wallich, and Debs. Vote against this
action: Mr. Holland.
Absent and not voting: Mr. Hayes. (Mr. Debs
voted as alternate for Mr. Hayes.)
Mr. Holland dissented from this action because he was concerned
that to date the System had bought but rarely had sold agency
issues and because the limits on System holdings of agency issues
might more appropriately be raised at a stage of the business cycle
when the volume of new agency issues being marketed was large.

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 45 days after the meeting and are subsequently published in
the Bulletin.

513

Law Department
S ta tu te s , r e g u la tio n s , in te r p r e ta tio n s , a n d d e c is io n s

INTEREST ON DEPOSITS

The Board of Governors has amended its Regu­
lation Q to permit member banks to offer a service
for making third party payments through pre-authorized transfers of funds from depositors’ sav­
ings accounts.
A M ENDM ENT TO REGULATION Q
Effective September 2, 1975, section 217.5(c)
of Regulation Q is amended to read as follows:
Section 217.5—
Withdrawal of Savings Deposits
(c) Manner of payment of savings deposits.
(1) Subject to the provisions of subparagraphs
(2) and (3) of this paragraph, a member bank may
permit withdrawals to be made from a savings
deposit only through payment7 to the depositor
(but not to any other person whether or not acting
for the depositor) except
(vii) Pursuant to nontransferable withdrawal
orders or authorizations received from a depositor
by a member bank for the payment of amounts
from such deposits to third parties, including the
bank (except as prohibited by subparagraph 2),
periodically or otherwise. Any such withdrawal
order or authorization that may be honored as a
withdrawal request for payment to a third party
may, if so authorized by the third party, be hon­
ored as a transfer to an account of such third party.
Any form for such withdrawal order or authori­
zation shall contain language in boldface type of
reasonable size to the effect that it is not negotiable
or transferable.

7 Paym ent from a savings deposit or presentation o f a pass­
book m ay be m ade over the counter, through the m ails, or
otherw ise.




(2) Notwithstanding the provisions of subpara­
graph ( 1) of this paragraph, no withdrawal shall
be permitted by a member bank to be made from
a savings deposit, through payment to the bank
itself or through transfer of credit to a demand
or other deposit account of the same depositor
(other than of interest on the savings deposit) if
such payment or transfer is made pursuant to any
advertised plan or any agreement, written or oral
which authorizes such payments or transfers of
credit to be made automatically or as a normal
practice in order to cover checks or drafts drawn
by the depositor upon the bank.
(3) The provisions of this paragraph do not
apply to deposits subject to negotiable orders of
withdrawal authorized by Federal law to be issued
in the States of Massachusetts and New Hamp­
shire.
sfc
5(5
He
s|c
TRUTH IN LENDING

The Board of Governors has amended its Regu­
lation Z to implement requirements of Title IV
of Pub. L. 93-495.
AM ENDM ENTS TO REG U LA TION Z
Effective August 8 , 1975, Regulation Z is
amended as follows:
1.
Sections 226.1(b) (1) and (c) are amended
to read as follows:
Section 226.1—
Authority, Scope, Purpose, etc.

(b) Administrative enforcement. (1) As set
forth more fully in section 108 of the Act, admin­
istrative enforcement of the Act and this Part with
respect to certain creditors and credit card issuers

514

Federal Reserve Bulletin □ August 1975

is assigned to the Comptroller of the Currency,
Board of Directors of the Federal Deposit Insur­
ance Corporation, Federal Home Loan Bank Board
(acting directly or through the Federal Savings and
Loan Insurance Corporation), Administrator of the
National Credit Union Administration, Civil
Aeronautics Board, Secretary of Agriculture, Farm
Credit Administration, and Board of Governors of
the Federal Reserve System.
He

*

*

*

*

(c) Penalties and liabilities. Section 112 of the
Act provides criminal liability for willful and
knowing failure to comply with any requirement
imposed under the Act and this Part. Section 134
provides for criminal liability for certain fraudulent
activities related to credit cards. Section 130 pro­
vides for civil liability in individual or class actions
for any creditor who fails to comply with any
requirement imposed under Chapter 2 or Chapter
4 of the Act and the corresponding provisions of
this Part, provides a defense for creditors comply­
ing in good faith with the provisions of the Part
or any interpretation thereof by the Board, and
provides that a multiple failure to disclose in
connection with a single account shall permit but
a single recovery. Section 115 provides for civil
liability for an assignee of an original creditor
where the original creditor has violated the disclo­
sure requirements and such violation is apparent
on the face of the instrument assigned, unless the
assignment is involuntary. Pursuant to Section 108
of the Act, violations of the Act or this Part
constitute violations of other Federal laws which
may provide further penalties.

2. Section 226.3(e) is added to read as follows:

3. Sections 226.7(a)(1) and (b)(9) are amended
to read as follows:
Section 226.7—Open End
Credit Accounts—Specific Disclosures
(a) ***
(1) The conditions under which a finance charge
may be imposed, including an explanation of the
time period, if any, within which any credit ex­
tended may be paid without incurring a finance
charge, except that the creditor may, at his option
and without disclosure, refrain from imposing such
finance charge even though payment is received
after the termination of such time period.

(b) ***
(9) The closing date of the billing cycle and
the outstanding balance in the account on that date,
using the term “ new balance,” accompanied by
the statement of the date by which, or the period,
if any, within which payment must be made to
avoid additional finance charges, except that the
creditor may, at his option and without disclosure,
refrain from imposing such additional finance
charges even though payment is received after
such date or termination of such period.

4. Sections 226.9(g)(5) is amended and
226.9(h) is added to read as follows:
Section 226.9—Right to
Rescind Certain Transactions
*

*

*

*

*

(g) ***
(5) Any transaction in which an agency of a
State is the creditor.
(h) Time limit for unexpired right of rescis­
(e) Agricultural credit transactions. Credit
sion. In the event the creditor fails to deliver to
transactions primarily for agricultural purposes,
the customer the disclosures required by this sec­
including real property transactions, in which the
tion or the other material disclosures required by
amount financed13 exceeds $25,000 or in which
this Part, a customer’s right to rescind a transaction
the transaction is pursuant to an express written
pursuant to this section shall expire the earlier of
commitment by the creditor to extend credit in
( 1) three years after the date of consummation of
excess of $25,000.
the transaction, or (2) the date the customer
* * * * *
transfers all his interest, both equitable and legal,
in the property.
la For this purpose, the amount financed is the amount w hich
is required to be disclosed under § 2 2 6 .8 (c )(7 ), or (d )(1 ), as
* * * * *
applicable, or w ould be so required if the transaction were
subject to this Part.
5. Section 226.10(f) is added to read as follows:
Section 226.3—E xempted Transactions




L aw D epartm ent

Section 226.10—Advertising Credit T erms
*

*

*

*

*

(f) Credit payable in more than four instal­
ments; no identified finance charge. Any adver­
tisement to aid, promote, or assist directly or
indirectly an extension of consumer credit repaya­
ble by agreement in more than four instalments
shall, unless a specific finance charge is or may
be imposed, state clearly and conspicuously: “ The
cost of credit is included in the price quoted for
the goods and services.”

515

AM ENDM ENTS TO
RULES REGARDING
D ELEGATION OF AUTHO RITY
Section 265.1a—Specific
Functions Delegated to Board Members

1. Effective July 31, 1975, paragraphs 1 through
5 of section 265.1a(a) are amended by inserting
the words “ or disapprove” after the words “ to
approve” in each paragraph.
2. Paragraphs 6 through 11 are added to section
265.1a(a) to read as follows:
(а) The Committee on Federal Reserve Bank
* * * * *
Activities, consisting of at least three members of
the Board designated by the Chairman, is author­
6 . Section 226.13(i) is added to read as follows:
ized, to act upon matters as set forth in this section
pursuant to the twenty-second paragraph of sec­
Section 226.13—Credit
tions 4 and ll(j) of the Federal Reserve Act (12
U.S.C. 307 and 248(j)) and subject to such general
Cards—Issuance and Liability
guidelines as may be prescribed by the Board.
With respect to any approval action taken by the
Committee pursuant to authority delegated herein
(i) Business use of credit cards. If 10 or more involving a controversial matter, a policy consid­
eration, or an expenditure of funds exceeding
credit cards are issued by one card issuer to a
$500,000, the Committee will inform the Board
single business or other organization for use by
by memo before giving notice of its approval to
its employees, nothing in this section prohibits the
the Reserve Bank. For a period of three days, any
card issuer from agreeing by contract with such
member of the Board may request that the matter
business or other organization as to liability for
be scheduled for review by the Board. The Com­
unauthorized use of any such credit cards without
mittee is authorized:
regard to the provisions of this section, but in no
case may any business or other organization or
* * * * *
card issuer impose liability on any employee of
such business or other organization with respect
(б) To approve or disapprove specific Reserve
to unauthorized use of such credit card except in
Bank
proposals to acquire land for current or future
accordance with, and subject to, the other liability
building purposes, provided that the Board has
limitations of this section.
previously authorized the general Reserve Bank
expansion or building program for which the land
is sought and provided that each proposed land
RULES REGARDING
acquisition requires commitment of no more than
DELEGATION OF AUTHORITY
one million dollars ($1 ,000,000).
(7) To approve or disapprove: (i) Reserve Bank
The Board of Governors has amended its Rules
studies, analyses and similar commitments for a
Regarding Delegation of Authority to delegate to
Reserve Bank building or expansion program at
a stage after the general Reserve Bank building
the Committee on Federal Reserve Bank Activities
certain responsibilities with respect to supervision
or expansion program has been approved by the
of Federal Reserve Bank land acquisition, con­
Board and prior to the Board decision to permit
the Reserve Bank to accept bids and award con­
struction programs, financial planning and control,
tracts, (ii) additional construction costs of a new
purchase of computer equipment and examination
Bank or Branch building in excess of costs origi­
and operations review. In addition, the Board has
amended its previous delegation of authority to the
nally approved by the Board provided such addi­
tional costs do not exceed the 5 per cent contin­
Committee to make explicit the Committee’s au­
thority to disapprove as well as to approve certain
gency portion of the Board-approved budget, (iii)
proposed remodeling or renovation of existing
Federal Reserve Bank expenditures.



516

Federal Reserve Bulletin □ August 1975

Bank or Branch buildings or additions to such
buildings where the total cost of such renovation,
remodeling or additions is in excess of two hun­
dred and fifty thousand dollars ($250,000) but not
in excess of one million two hundred fifty thousand
dollars ($1,250,000). (The initial two hundred
fifty thousand dollars ($250,000) may be commit­
ted solely by the Director of the Division of
Federal Reserve Bank Operations pursuant to sec­
tion 265.2(d)(5).)
(8) To approve or disapprove supplementary
budget requests and special incentive programs to
improve operations or reduce costs, provided that
the Board has previously approved the requesting
Reserve Bank’s budget and provided the supple­
mental request adheres to the Board’s expense
guidelines and provided the* amounts approved for
the System in a fiscal year do not exceed one per
cent of the total budget of all the Reserve Banks
in the System, as approved by the Board. (The
amount which the Committee may approve is in
addition to any amounts approved by the Director
of Federal Reserve Bank Operations pursuant to
section 265.2(d)(6) of these Rules.)
(9) To approve or disapprove specific projects
proposed in accordance with ongoing System pro­
grams previously approved by the Board, such as
the automated clearing house program, provided
the Committee adheres to the Board’s budgetary
constraints.
(10) To approve Reserve Bank purchases of
computers and other major automation equipment,
provided that the staff of the Division of Federal
Reserve Bank Operations indicates the return on
the investment is adequate to recapture the invest­
ment within 5 years and provided the total capital
commitment in the System for such purchases does
not exceed ten million dollars ($ 10,000,000) an­
nually.
(11) To review and approve reports on Federal
Reserve Bank examinations and Federal Reserve
Bank operations reviews provided that issues of
unusual import be presented to the Board and
provided that the Committee present an annual
summary of Reserve Bank operations and prob­
lems to the Board.
3. Effective July 31, 1975, sections 265.2(d)(5)
and (6), and 265.2(f)(33) are added to read as
follows:
Section 265.2—Specific
Functions Delegated to Board
Employees and Federal Reserve B anks




(d) The Director of the Division of Federal
Reserve Bank Operations (or in his absence the
Acting Director) is authorized:

(5) To approve or disapprove proposed remod­
eling or renovation of existing Reserve Bank or
Branch buildings or additions to such buildings
where the cost of such remodeling, renovation or
addition will be in excess of one hundred thousand
dollars ($100,000), provided that the cost of each
project approved by the Director may not be in
excess of two hundred and fifty thousand dollars
($250,000).
(6) To approve or disapprove supplementary
budget requests and special incentive programs to
improve operations or reduce costs, provided that
the Board has previously approved the budget of
the requesting Reserve Bank and provided that the
supplemental request adheres to the Board’s gen­
eral expense guidelines and such guidelines as the
Board may have imposed in approving the Reserve
Bank’s budget and provided that the amount ap­
proved by the Director may not exceed in any
budgetary year one hundred thousand dollars
($100,000) for each Reserve Bank and seven hun­
dred and fifty thousand dollars ($750,000) for all
Reserve Banks in the System.
(f) Each Federal Reserve Bank is authorized,
as to member banks or other indicated organi­
zations headquartered in its district or under subparagraph (25) of this paragraph as to its officers
or under subparagraph (33) as to its own facilities:

(33) Under the provisions of sections 3 and 11(j)
of the Federal Reserve Act (12 U.S.C. §§ 521
and 248(j)), to undertake remodeling, renovation
of or addition to its existing buildings or those
of its branches provided the expenditure for such
purpose does not exceed one hundred thousand
dollars ($100,000) within a single budget year.

The Board has also amended its Rules Regard­
ing Delegation of Authority to delegate to the
Director of the Office of Saver and Consumer
Affairs the authority to approve and issue report­
ing, examination, or inspection materials with
respect to the Board’s responsibilities under the
Consumer Credit Protection Act, the Securities
Exchange Act of 1934, and the Federal Trade
Commission Act, to grant State exemptions under

L aw D epartm ent

517

the Consumer Credit Protection Act and Regula­
tion Z (12 C.F.R. § 226.12), and to conduct
certain matters with respect to the Truth in Lending
Advisory Committee.

(а) to issue examination or inspection manuals,
registration, report, agreement, and examination
forms, guidelines, instructions or other similar
materials for use in connection with the adminis­
tration of
4.
Effective July 21, 1975 paragraph (h) of
(1) Sections 1 through 707 (excluding sections
section 265.2 is amended by adding paragraphs
201 through 500) of the Consumer Credit Protec­
(4), (5), and (6) as follows:
tion Act (15 U.S.C. §§ 1601-1691(e)),
(2) Sections 7 and 8 of the Securities Exchange
Section 265.2 —Specific
Act of 1934 (15 U.S.C. §§ 78(g) and (h)),
Functions Delegated to Board
(3) Sections 18(f)(l)-(3) of the Federal Trade
Employees and to Federal Reserve Banks.
Commission Act (Pub. L. 93-637 § 202(a)), and
rules and regulations issued thereunder.
(5) Pursuant to Sections 123 and 171(b) of the
Truth in Lending Act (15 U.S.C. §§ 1633 and
(h) The Director of the Office of Saver and
1666(j)) and the Board’s Regulation Z, (12 C.F.R.
Consumer Affairs (or in his absence, the Acting
§ 226.12), to grant, but not to deny or revoke,
Director) is authorized:
exemptions to States from the requirements of
Chapters 2 and 4 of the Truth in Lending Act (15
U.S.C. §§ 1631-1644 and 1666), where State law
(4) Pursuant to the provisions of Section 11(a) imposes substantially similar requirements, and
there is adequate provision for enforcement.
of the Federal Reserve Act (12 U.S.C. § 248(a)),
(б) Pursuant to Section 110 of the Consumer
Section 17(b) of the Securities Exchange Act of
Credit Protection Act (15 U.S.C. § 1609), to call
1934 (15 U.S.C. § 78(q)), Sections 108(b),
621(c), and 704(b) of the Consumer Credit Pro­
meetings of and consult with the Advisory Com­
mittee established under that section, to approve
tection Act (15 U.S.C. §§ 1607(b), 1681S(b),
the agenda for such meetings, and to accept any
1691C), and, Section 18(f)(3) of the Federal Trade
Commission Act (Pub. L. 93-637 Section 202(a)).
resignations from Advisory Committee members.
BA N K H O L D IN G C O M P A N Y AND
B A N K M E R G E R O R D E R S ISSU ED BY T H E B O A R D O F G O V E R N O R S
ORDERS UNDER SECTION 3
OF BANK HOLDING COMPANY ACT

Forest Park National Corporation,
Forest P ark, Illinois
Order Denying
Formation of Bank Holding Company

Forest Park National Corporation, Forest Park,
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)) to become a bank holding
company through acquisition of all of the voting
shares (less directors’ qualifying shares) of the
successor by merger to Forest Park National Bank,
Forest Park, Illinois (“ 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(c)
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 acqui­
sition of Bank (deposits of $37.3 million). Bank,
located approximately 10 miles west of downtown
Chicago, is the 131st largest bank in the Chicago
banking market1 and holds .09 per cent of the total
deposits in the market. (All banking data are as
of June 30, 1974). Inasmuch as the proposed
transaction represents a restructuring of the own­
ership of Bank from individuals (who acquired

1The C hicago banking market is approxim ated by C ook
C ounty, D uPage C ounty, and portions of Lake County.

518

Federal Reserve Bulletin □ August 1975

control of Bank in 1974) to a corporation owned
by the same individuals, and since Applicant has
no present subsidiaries, consummation of the pro­
posal would not eliminate existing or future com­
petition, nor have an adverse effect on any bank
in the relevant area.
A principal of Applicant is also a principal of
First National Corporation of Oak Brook, Oak
Brook, Illinois, a one-bank holding company (in
formation)2 which proposes to acquire 100 per cent
of First National Bank and Trust Company of Oak
Brook, Oak Brook, Illinois (“ First National” ).
First National (deposits of $16.8 million) ranks
as the 227th largest bank in the relevant banking
market with .04 per cent of total deposits therein.
In view of the relatively small size of the two
banks and the large number of competitors in the
market, it appears that there is no significant com­
petition between First National and Bank. Ac­
cordingly, based on the foregoing and other facts
of record, the Board concludes that competitive
considerations are consistent with approval of the
application.
Under the Bank Holding Company Act, the
Board is required to take into consideration the
financial and managerial resources and future
prospects of the proposed bank holding company
and the bank to be acquired. In the exercise of
that responsibility, the Board finds that such con­
siderations warrant denial of the application.
In regard to such considerations, it appears that
Bank’s presently marginal capital position may be
further weakened as a result of Applicant’s inten­
tion to take out substantial dividends from Bank
during the coming years. Such a dividend policy
flows from the substantial debt in excess of $1
million which has been incurred by the principals
of Applicant as a result of their purchase of Bank’s
stock. The dividend policy currently in effect as
well as that proposed involves levels of pay-out
which are inconsistent with the earnings retention
needed to maintain acceptable capital funds in
Bank. Accordingly, in the Board’s view, the above
factors reflect adversely on financial and manage­
rial considerations as they relate to Applicant and
Bank and warrant denial of the application.
The proposed formation represents merely a
restructuring of the ownership of Bank with no
changes in Bank’s operations or the services of­
fered to customers. Accordingly, considerations
relating to the convenience and needs of the com­
munity to be served lend no weight toward ap­
proval of the application.
2B y Order dated April 2 4 , 1975, the Board approved the
application o f First National Corporation o f Oak Brook to
becom e a bank holding com pany.




On the basis of all the circumstances concerning
this application, the Board concludes that the
banking considerations involved in the proposal
are adverse with respect to financial and manage­
rial considerations. Such adverse factors are not
out-weighed by any procompetitive effects or by
benefits which would result in serving the conven­
ience and needs of the community. Accordingly,
it is the Board’s judgment that approval of the
application would not be in the public interest,
and the application should be, and hereby is,
denied for the reasons summarized above.
By order of the Board of Governors, effective
July 2, 1975.
Voting for this action: Governors Bucher, Holland,
Wallich, and Coldwell. Absent and not voting: Chair­
man Burns and Governor Mitchell.
(Signed) T h e o d o r e E. A l l i s o n ,
[s e a l]

Secretary of the Board.

Scribner Banshares, Inc .,
Scribner, Nebraska
O rder Denying
Formation of Bank H olding Company

Scribner Banshares, Inc., Scribner, Nebraska,
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 hold­
ing company through acquisition of 96.7 per cent
or more of the voting shares of Scribner Bank,
Scribner, Nebraska (“ Bank” ).1 Applicant has also
applied, pursuant to § 4(c)(8) of the Act (12
U.S.C. 1843(c)(8)) and § 225.4(b)(2) of the
Board’s Regulation Y, for permission to retain
Scribner Insurance Agency (“ Agency” ), a com­
pany that engages in the activities of a general
insurance agency in a community with a popula­
tion not exceeding 5,000. SuchL activities have
been determined by the Board to be closely related
to banking (12 C.F.R. 225.4(a)(9)(iii)(a)).
Notice of receipt of these applications, affording
an opportunity for interested persons to submit
comments and views, has been given in accord­
ance with §§3 and 4 of the Act (40 Fed. Reg.
2625 (1975)). The time for filing comments and
views has expired, and the Board has considered
the applications and all comments received in the
light of the factors set forth in § 3(c) of the Act
(12 U.S.C. 1842(c)) and the considerations speci­
fied in § 4(c)(8) of the Act (12 U.S.C. 1843(c)(8)),
lrThe Board of G overnors also considered today the applica­
tion o f Winner B anshares, In c ., W inner, South D akota, to
acquire Farmers State B ank, W inner, South D akota, w hich
involves som e o f the sam e principal shareholders.

L aw D epartm ent

Applicant was formed for the purposes of be­
coming a bank holding company through the ac­
quisition of Bank and of operating a general in­
surance agency. Bank, with deposits of about
$10.3 million,2 is the only bank in Scribner, Ne­
braska, and is the fourth largest of 7 banks in the
relevant banking market,3 controlling approxi­
mately 8.9 per cent of the total deposits in com­
mercial banks in the market. Certain principals of
Applicant are also involved as shareholders,
directors and/or officers, in other one-bank holding
companies located in Nebraska, Iowa, and South
Dakota. The closest subsidiary bank of these bank
holding companies is 53 miles from Bank, and
none operates in the relevant market area. Ac­
cordingly, since the proposal represents a restruc­
turing of the ownership of Bank from individuals
to a corporation owned by the same individuals,
consummation of the proposal would have no
significantly adverse effects on competition in any
relevant area. Accordingly, the Board concludes
that competitive considerations are consistent with
approval of the application.
The Board has indicated on previous occasions
that it believes that a holding company should
provide a source of financial and managerial
strength to its subsidiary bank(s), and that every
proposed acquisition or formation will be closely
examined with such considerations in mind. In this
connection, the Board notes that Applicant will
incur a substantial debt as a result of the acquisi­
tion of Bank. Applicant proposes to service such
debt over an 11-year period with income from
Agency and dividends from Bank consistently
exceeding 50 per cent of Bank’s net income,
thereby limiting Bank’s ability to meet any un­
foreseen financial problems that might arise. Ac­
cordingly, the Board views the sizable acquisition
debt to be incurred by Applicant as an adverse
factor in the consideration of the subject proposal.
Turning to managerial considerations, it appears
that certain of the banks in which Applicant’s
principals are involved have experienced deterio­
rating capital positions. In addition, demands that
some of the principals appear to have placed upon
the resources of other banks under their control
have detracted from the overall financial condition
of some of these banks. The Board believes,
therefore, that managerial considerations weigh for
denial of the application.
The proposed formation represents merely a
restructuring of the ownership of Bank with no
significant changes in Bank’s operations or the
2A ll banking data are as o f June 3 0 , 1974.
3The relevant banking market is approxim ated by D odge
C ounty excludin g the C ity o f D odge.




519

services offered to customers. Consequently, con­
siderations relating to the convenience and needs
of the community to be served lend no weight
toward approval of the application.
On the basis of all the circumstances concerning
this application, the Board concludes that the
banking considerations involved in the proposal
present adverse factors bearing on the financial and
managerial resources of Applicant. Such adverse
factors are not outweighed by any procompetitive
effects or by benefits which would result in serving
the convenience and needs of the community.
Accordingly, it is the Board’s judgment that ap­
proval of the application would not be in the public
interest and that the application to become a bank
holding company should be, and is hereby, de­
nied.4
By order of the Board of Governors, effective
July 28, 1975.
Voting for this action: Governors Holland, Wallich,
Coldwell, and Jackson. Absent and not voting: Chair­
man Burns and Governors Mitchell and Bucher.
(Signed) T h e o d o r e E. A l l i s o n ,
[s e a l]

Secretary of the Board.

4ln view of the B oard’s action w ith respect to the application
to becom e a bank holding com pany, consideration of the §
4 (c )(8 ) application to retain the insurance activities becom es
m oot.

Winner Banshares, Inc .,
Winner, South Dakota
Order Denying
Formation of Bank Holding Company

Winner Banshares, Inc., Winner, South Dakota,
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 hold­
ing company through acquisition of 94.4 per cent
or more of the voting shares of Farmers State
Bank, Winner, South Dakota (“ Bank” ).1
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)).
*The Board of Governors also considered today the applica­
tion o f Scribner Banshares, In c., Scribner, Nebraska to acquire
Scribner Bank and to retain an insurance agency. T hese appli­
cations involve som e o f the sam e principal shareholders.

520

Federal Reserve Bulletin □ August 1975

Applicant, a newly-organized corporation, was
formed for the purpose of becoming a bank hold­
ing company through the acquisition of Bank.
Bank (deposits of $29.8 million) is the thirteenth
largest banking organization in South Dakota and
holds about 1.5 per cent of the total commercial
bank deposits in the State.2 With a total of four
offices in the relevant market (approximated by
Tripp, Todd and Mellette Counties), Bank controls
58.4 per cent of the total market deposits and ranks
as the largest of the three banking organizations
in the market. Certain principals of Applicant are
also involved as shareholders, directors and/or
officers, in other banks and one-bank holding
companies located in Nebraska, Iowa, and South
Dakota. Inasmuch as this proposal represents a
restructuring of the existing ownership of Bank,
and since none of the other banks with which
Applicant’s principals are involved is located in
the same market as Bank, it appears that consum­
mation of the proposal would not have adverse
effects on existing or potential competition. Ac­
cordingly, the Board concludes that competitive
considerations are consistent with approval of the
application.
The Board has indicated on previous occasions
that it believes that a holding company should
provide a source of financial and managerial
strength to its subsidiary bank(s), and that every
proposed acquisition or formation will be closely
examined with such considerations in mind. In this
connection, the Board notes that Applicant will
incur a debt as a result of the acquisition of Bank.
Applicant proposes to service such debt over a
12-year period through dividends from Bank
averaging about 50 per cent of its net income. In
the Board’s view, Applicant’s projections appear
somewhat optimistic, and the dividends required
from Bank to service the debt could result in the
impairment of Bank’s overall capital position.
Accordingly, the Board views the acquisition debt
to be incurred by Applicant as an adverse factor
in the consideration of the subject proposal.
Turning to managerial considerations, it appears
that certain of the banks in which Applicant’s
principals are involved have experienced deterio­
rating capital positions. In addition, demands that
some of the principals appear to have placed upon
the resources of other banks under their control,
have detracted from the overall financial condition
of some of these banks. The Board believes,
therefore, that managerial considerations weigh for
denial of the application.
2A11 banking data are as o f June 3 0 , 1974.




On the basis of all the circumstances concerning
this application, the Board concludes that the
banking considerations involved in the proposal
present adverse factors bearing on the financial and
managerial resources of Applicant. Such adverse
factors are not outweighed by any procompetitive
effects or by benefits which would result in serving
the convenience and needs of the community.
Accordingly, it is the Board’s judgment that ap­
proval of the application would not be in the public
interest and that the application to become a bank
holding company should be, and is hereby, denied.
By order of the Board of Governors, effective
July 28, 1975.
Voting for this action: Governors Holland, Wallich,
Coldwell, and Jackson. Absent and not voting: Chair­
man Burns and Governors Mitchell and Bucher.
(Signed) T h e o d o r e E. A l l i s o n ,
[s e a l]

Secretary of the Board.

Central Bancshares of the South , Inc .,
Birmingham, Alabama
Order Approving Acquisition of Bank

Central Bancshares of the South, Inc., Bir­
mingham, Alabama, 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 Citizens Bank of Tuscaloosa,
National Association, Tuscaloosa, Alabama
(“ Bank” ), a proposed new 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, including
those submitted by numerous independent banks
throughout Alabama (hereinafter collectively re­
ferred to as “ Protestants” ), 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 Alabama, controls nine banks with ag­
gregate deposits of $798.5 million, representing
approximately 10 per cent of total deposits in
commercial banks in the State. (All banking data
are as of June 30, 1974, and reflect formations
and acquisitions approved by the Board through
June 30, 1975.) Since Bank is a proposed new
bank, its acquisition would not increase the con­
centration of banking resources in Alabama nor
change Applicant’s rank in size in the State.

L aw D epartm ent

Applicant is seeking to make its initial entry
into the Tuscaloosa County banking market. There
are four banks in the market with the two largest
banks controlling approximately 94 per cent of the
deposits therein. Applicant’s closest subsidiary
bank is located about 53 miles northeast of Bank
in a separate banking market. It appears that Ap­
plicant’s acquisition of Bank would not eliminate
any existing competition; nor would consumma­
tion of the transaction have a substantially adverse
effect on future competition between any of Ap­
plicant’s banking subsidiaries and Bank in view
of the distances involved and the Alabama
branching laws. On the other hand, Applicant’s
acquisition of Bank should stimulate competition
in the market by introducing an additional banking
alternative to compete with the two largest organi­
zations in the market without having adverse ef­
fects on any competing banks. On the basis of
the facts of record, the Board concludes that the
competitive considerations of the transaction are
consistent with, and lend some weight toward,
approval of the application.
The financial and managerial resources and fu­
ture prospects of Applicant, its subsidiary banks,
and Bank are satisfactory, particularly in view of
Applicant’s commitment to inject additional equity
capital into one of its subsidiary banks. These
considerations relating to financial factors are con­
sistent with approval of the application. Bank’s
formation and acquisition by Applicant will pro­
vide an alternative source of banking services for
customers in the market so that considerations
relating to the convenience and needs of the com­
munity to be served lend weight toward approval
of the application.
During the course of its consideration of this
application, the Board has received numerous
comments from Protestants. These comments
contend generally that affiliation of Applicant with
Bank would contravene Alabama law prohibiting
branch banking (Alabama Code of 1940 (Recomp.
1958) Title 5, § 125 (1)). In addition, Protestants
claim that the subject proposal is prohibited under
State law because of Regulation 13, which was
issued by the Alabama State Banking Board. In
the Board’s view, however, the objections of
Protestants are not sufficient to warrant denial of
the subject application.1
With regard to the branching issue, the Board
has stated that a State’s restrictive branch banking
laws are not automatically applicable to bank
holding company operations. In a given case, the
Board examines the facts to determine whether a
particular acquisition by a bank holding company



521

would constitute an illegal branch under State law;
if the Board determines that a violation of State
law would result, it is required to disapprove the
transaction. ( Whitney National Bank v. Bank of
New Orleans, 323 F.2d 290 (D.C. Cir. 1963),
rev’d on other grounds, 379 U.S. 411 (1965)).
However, the facts of record in this case indicate
that Bank will be a separate corporation, with its
own capital stock and a loan limit based on such
capital stock; that Bank will be capitalized with
funds raised by Applicant through use of its own
capital resources and not with profits or other funds
of any other bank; and that Bank’s board of
directors are, or will be, unaffiliated with any other
bank owned by Applicant, will exercise inde­
pendent judgment with respect to the management
of Bank, and are, or will be, residents of Tusca­
loosa. Accordingly, the Board concludes that Bank
will not be operated in a unitary fashion with any
banking subsidiary of Applicant and thus this
proposal will not contravene Alabama’s statute
prohibiting branch banking. Further, the Board
concludes that Applicant is a “ traditionally recog­
nized bank holding company which, with its own
capital, invests in or buys the stock of banks” ,
Whitney National Bank v. Bank of New Orleans,
supra.

Finally, some Protestants have argued that Reg­
ulation 13, which was issued by the Alabama State
Banking Board, applies to de novo national banks
as well as de novo State chartered banks and thus
the Board is prevented by State law from approv­
ing the subject application.2 The Board does not
agree. National banks are organized and chartered
by the Comptroller of the Currency pursuant to
the provisions of the National Bank Act (12
U.S.C. §§ 21-27). Pursuant to that authority, the
Comptroller of the Currency issued his preliminary
charter approval for Bank on January 7, 1975. The
Board does not regard Regulation 13 as having
any legal effect on the chartering of national
banking associations and, therefore, Regulation 13
'Som e of the Protestants have also requested that the Board
hold a hearing on the application. Under § 3(b) of the A ct,
the Board is required to hold a hearing only w hen the primary
supervisor of the bank to be acquired recom m ends disapproval
of the application (12 U .S .C . 1842(b)). In this case, the
Comptroller o f the Currency issued preliminary charter ap­
proval for Bank on January 7 , 1975, and he has not subse­
quently recom m ended that the subject application be denied.
Thus, there is no statutory requirement that the Board hold
a hearing. M oreover, the Board is o f the view that the record
in this case is sufficiently com plete to render a decision.
2R egulation 13 reads in relevant part as follow s: “ R E­
SO L V E D that the Superintendent of B anks be prohibited from
approving charters of de novo applications by bank holding
com p a n ies.”

522

Federal Reserve Bulletin □ August 1975

has no effect on the Board’s authority to approve
Applicant’s application to acquire Bank, a de novo
national bank.
On the basis of all facts of record, it is the
Board’s judgment that the transaction would be
in the public interest and that the application
should be approved. Accordingly, 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
that date and (c) Citizens Bank of Tuscaloosa,
National Association, shall be opened for business
not later than six months after the effective date
of this Order. Each of the periods described in
(b) and (c) may be extended for good cause by
the Board or by the Federal Reserve Bank of
Atlanta pursuant to delegated authority.
By order of the Board of Governors, effective
July 9, 1975.
Voting for this action: Vice Chairman Mitchell and
Governors Bucher, Holland, and Coldwell. Absent and
not voting: Chairman Burns and Governor Wallich.
(Signed) T h e o d o r e E. A l l i s o n ,
[s e a l]

Secretary of the Board.

First Security Corporation,
Salt Lake City , Utah
Order Approving Acquisition of Bank

First Security Corporation, Salt Lake City,
Utah, 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 of First Security State Bank of
Kaysville, Kaysville, Utah.
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, including
those submitted on behalf of Barnes Banking
Company of Kaysville (“ Protestant” ), in light of
the factors set forth in § 3(c) of the Act (12 U.S.C.
1842(c)).
Applicant, the largest banking organization in
Utah, controls six Utah banks with aggregate de­
posits of $844.1 million, representing approxi­
mately 28.5 per cent of all commercial bank de­
posits in the State.1 In addition, Applicant controls
b a n k in g data are as o f D ecem ber 3 1 , 1974, unless otherw ise
indicated, and reflect holding com pany formations and acqui­
sitions approved through M ay 3 1 , 1975.




one bank in Idaho and one bank in Wyoming, each
of which was acquired by Applicant prior to the
enactment of the Bank Holding Company Act of
1956. Since Bank is a proposed new bank, its
acquisition by Applicant would not immediately
increase Applicant’s share of commercial bank
deposits in Utah.
Bank is to be located in Kaysville, a small
“ bedroom” community situated almost midway
between Ogden and Salt Lake City. Kaysville,
which is presently served by only one other bank,
the “ Protestant,” is located on the southern
boundary of the Ogden metropolitan area,2 a mar­
ket served by ten banks. Applicant’s lead bank
is the largest bank in this market, with a 30.9 per
cent share of total deposits (as of June 30, 1973).
Since Bank is a new bank, consummation of the
proposal would not eliminate any existing compe­
tition. Nor does it appear that the transaction
would have adverse effects on the development
of competition in the future. Accordingly, com­
petitive considerations are regarded by the Board
as being consistent with approval of the applica­
tion.
The financial and managerial resources and fu­
ture prospects of Applicant and its subsidiaries are
regarded as satisfactory. Bank, as a proposed new
bank, has no financial or operating history; how­
ever, its future prospects as a subsidiary of Appli­
cant appear favorable. Bank would provide a
source of additional full banking services to the
residents of the Kaysville area. Accordingly, con­
siderations relating to the convenience and needs
of the community to be served lend some weight
toward approval of the application.
In its consideration of the subject application,
the Board has considered the comments submitted
on behalf of Protestant, a bank located one block
from the proposed site of Bank. Protestant, a unit
bank with deposits of approximately $17 million,
contends that Applicant’s acquisition of Bank
would lessen competition, restrain trade, and tend
toward monopoly, without producing any coun­
tervailing advantage to the convenience and needs
of the citizens of Kaysville. These contentions
were presented before the Commissioner of Fi­
nancial Institutions of the State of Utah at a public
hearing during the pendency of the charter appli­
cation of Bank.3 In an Order dated August 22,
1973, the Commissioner approved the establish2Defined as the R and-M cN ally R .M .A . of O gden, Utah.
3Protestants have subm itted to the Board copies of the
C om m issioner’s findings o f fact, conclusions of law , and
Order, and the Board has made those materials part o f the
record on w hich it relied in this matter.

L aw D epartm ent

ment of Bank, pending approval by the Federal
Deposit Insurance Corporation of insurance for
Bank’s accounts and approval by the Board of the
application herein. Protestant appealed the Com­
missioner’s Order to the District Court in and for
the Salt Lake County, Utah, which granted a
Motion for Summary Judgment in favor of Appli­
cant and Bank on December 11, 1974. Subse­
quently, Protestant appealed the District Court
action to the Supreme Court of Utah, which has
not yet rendered its decision on the appeal.
In “ RESOLVED Board’s opinion, the objection
of Protestant does not warrant denial of the subject
application. The home-office protection laws of
Utah prevent any of Applicant’s existing banks
from establishing branches in Kaysville. Accord­
ingly, aside from the acquisition of Protestant, the
subject proposal represents Applicant’s sole means
of competing directly in the Kaysville community.
The establishment of Bank by Applicant should
foster competition by introducing a banking alter­
native to Protestant, the only bank in Kaysville.
Moreover, as a subsidiary of Applicant, Bank will
be able to offer a broad range of banking services
to the residents of the area. In the Board’s judg­
ment, the benefits likely to be derived from Appli­
cant’s proposal in terms of increased competition
and greater convenience and banking services are
such that approval of the application would be
appropriate. Accordingly, it is the Board’s judg­
ment that the proposed transaction 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, nor (b) later than three months after
that date, and (c) First Security State Bank of
Kaysville, Kaysville, Utah shall be opened for
business not later than six months after the effec­
tive date of this Order. Each of the periods de­
scribed in (b) and (c) may be extended for good
cause by the Board, or by the Federal Reserve
Bank of San Francisco pursuant to delegated au­
thority.
By order of the Board of Governors, effective
July 9, 1975.
Voting for this action: Vice Chairman Mitchell and
Governors Bucher, Holland, Wallich, and Coldwell.
Absent and not voting: Chairman Burns.
(Signed) Theodore E. A llison,
[seal]



Secretary of the Board.

523

Texas Commerce Bancshares, Inc .,
Houston, Texas
Order Approving Acquisition of Banks

Texas Commerce Bancshares, Inc., Houston,
Texas, a bank holding company within the mean­
ing of the Bank Holding Company Act, has ap­
plied 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’ quali­
fying shares) of the successors by merger to Casa
Linda National Bank of Dallas (“ Casa Linda
Bank” ); Fidelity Bank, National Association
(“ Fidelity Bank” ); Northwest National Bank of
Dallas (“ Northwest Bank” ); Royal National Bank
of Dallas (“ Royal Bank” ); and The Village Bank
(National Association) (“ Village Bank” ), all lo­
cated in Dallas Texas (collectively referred to as
“ Banks” ). The banks into which each of Banks
are to be respectively merged have no significance
except as means to facilitate acquisition of the
voting shares of Banks. Accordingly, the proposed
acquisition of the successor organizations is treated
herein as proposed acquisition of Banks.
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, the third largest banking organization
in Texas, controls 24 banks with aggregate depos­
its of approximately $2.5 billion, representing 6.3
per cent of total deposits in commercial banks in
the State.1 Acquisition of Banks (aggregate de­
posits of $45.1 million) would increase Appli­
cant’s share of commercial bank deposits in Texas
by less than 0.2 of one per cent, and would have
no appreciable effect upon the concentration of
banking resources in Texas.
Casa Linda Bank, the 68th largest of the 105
banking organizations in the Dallas banking mar­
ket,2 holds deposits of about $ 11.1 million, or 0.1
of one per cent of total market deposits. Fidelity
Bank is the 94th largest banking organization in
the market and holds approximately $3 million in
*A11 banking data are as of June 30 , 1974, and reflect holding
com pany formations and acquisitions approved through June
15, 1975.
2The D allas banking market, the relevant geographic market
for purposes of analyzing the com petitive effects of the subject
proposals, is approxim ated by the D allas R M A .

524

Federal Reserve Bulletin □ August 1975

deposits, representing less than 0.1 of one per cent
of market deposits. Northwest Bank is the mar­
ket’s 48th largest banking organization and holds
about $18 million in deposits, which represents
0.2 of one per cent of total market deposits. Royal
Bank, the 76th largest banking organization in the
market, holds deposits of approximately $8.4 mil­
lion, representing less than 0.1 per cent of total
market deposits. Village Bank is the 85th largest
banking organization in the market and holds ap­
proximately $4.9 million in deposits, or less than
0.1 of one per cent of total market deposits.
Applicant, the sixth largest banking organization
in the Dallas market, controls two suburban banks
which are located near Dallas and which hold
aggregate deposits of approximately $152.4 mil­
lion, representing 1.9 per cent of total deposits
in commercial banks in the market. The subsidiary
bank of Applicant clos'est to one of Banks is
separated by a distance of more than eight miles.
Each of Banks is relatively small and retailoriented and serves a predominantly residential
area. The resultant highly localized nature of
Banks’ respective service areas severely limits
effective competition among the five banks. In
view of the distances involved, the limited service
areas of each of Banks and the number of inter­
vening banks, there does not appear to be any
meaningful competition existing between Appli­
cant’s present subsidiaries and any of Banks.
These same factors of distance and intervening
banks, as well as Texas’ prohibitive branching
laws, appear to foreclose the development of
significant competition in the future. Accordingly,
on the basis of the record, it is concluded that
consummation of the proposed acquisitions would
not have significant adverse effects on existing or
potential competition in the relevant banking mar­
ket.
Considerations relating to the financial and
managerial resources and future prospects of Ap­
plicant, its subsidiaries, and Banks are regarded
as generally satisfactory and consistent with ap­
proval, particularly in view of Applicant’s pro­
jected addition of $240,000 to the equity capital
structure of each one of Banks through retention
of the capital of the respective interim banks.
Affiliation with Applicant should enable Banks to
expand and improve the banking services offered
to their customers. In particular, Applicant pro­
poses to expand banking hours, reduce minimum
deposits on certain types of savings accounts, and
expand the range of trust services. Accordingly,
these considerations relating to the convenience
and needs of the residents of the communities to



be served lend weight toward approval of the
proposal. It has been determined that the proposed
acquisition would be in the public interest and that
the application should be approved.
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 of (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 Secretary of the Board, acting
pursuant to delegated authority for the Board of
Governors, effective July 31, 1975.
(Signed)
[s e a l]

T heodore

E.

A llis o n ,

Secretary of the Board.

ORDER UNDER SECTION 4
OF BANK HOLDING COMPANY ACT

First H awaiian, Inc .,
Honolulu, Hawaii
Order Approving
Acquisition of Hawaii Thrift & Loan, Inc.

First Hawaiian, Inc., Honolulu, Hawaii, 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 and
section 225.4(b)(2) of the Board’s Regulation Y,
to acquire, through a newly-formed wholly-owned
subsidiary, certain assets and to assume certain
liabilities of Hawaii Thrift & Loan, Inc., Hono­
lulu, Hawaii (“ HT&L” ), a company that operates
as an industrial loan company under Chapter 408
of the Hawaii Revised Statutes and does not accept
demand deposits. Such activity has been deter­
mined by the Board to be closely related to bank­
ing (12 CFR § 225.4(a)(2)).
Notice of the application, affording opportunity
for interested persons to submit comments and
views on the public interest factors, has been duly
published (40 Federal Register 25042 (1975)).
The time for filing comments and views has ex­
pired, and the Board has considered all comments
received, including those of the Governor of
Hawaii, the Hawaii Consumer Finance Associa­
tion, and Mr. Ezau Hoogs 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)).

L aw D epartm ent

Applicant, the second largest banking organi­
zation in the State of Hawaii, controls First Ha­
waiian Bank (“ Bank” ) with total deposits of ap­
proximately $813 million, representing approxi­
mately 33 per cent of total deposits in the eight
commercial banks located in Hawaii.1 Bank is
Applicant’s only subsidiary.
HT&L, as an industrial loan company, accepts
thrift deposits in the form of investment certificates
and debentures, and with the proceeds of such
deposits makes real estate, consumer, and com­
mercial loans. As of April 30, 1975, HT&L had
total assets of $96.8 million. Applicant would
acquire a substantial portion of these assets.
HT&L has experienced consistent net operating
losses since 1970. On May 21, 1975, it was
announced that HT&L’s auditor withdrew its 1972
and 1973 audit reports and declined to issue an
audit report for 1974 in view of certain transactions
between HT&L, on the one hand, and its principal
shareholder and affiliates of that shareholder, on
the other.2 That announcement caused substantial
withdrawals of funds from HT&L by investment
certificate holders and HT&L has been unable to
borrow, other than from Applicant, to meet com­
mitments or to operate properly as an industrial
loan company. The Governor of the State of
Hawaii has, by telegram, requested that the Board
expedite its consideration of the instant application
and favors approval for the protection of the ap­
proximately 30,000 holders of investment
certificates and debentures issued by HT&L.
HT&L operates eleven offices in the State of
Hawaii, including eight on the island of Oahu,3
one on the island of Kauai, one on the island of
Maui, and one on the island of Hawaii. Bank
operates branch offices on each of these islands,
from which offices it accepts savings and time
deposits and makes commercial, consumer, and
real estate loans. The investment certificates and
debentures issued by HT&L are similar to deposits
accepted by Bank, but HT&L’s investment
certificates and debentures are uninsured and in­
volve considerably higher risk than deposits ac­
cepted by Bank (and, accordingly, the certificates
and debentures, on the one hand, and deposits of
Bank, on the other, may not be reasonable substi­
tutes for one another.) While for some “ deposi­
tors” , it is clear that Bank and HT&L are in direct

XA11 banking data are as o f D ecem ber 3 1 , 1974.
2That shareholder and its affiliates are neither parties to, nor
the subject o f the instant application.
3The opening o f a ninth office on Oahu is pending.




525

competition with one another, for others the risk
exposure may be understood.4 It is clear, also, that
Bank and HT&L, but for the present financial
condition of HT&L, would be direct competitors
in commercial, consumer, and real estate loan
markets in Hawaii. (However, HT&L, in view of
its present financial condition, is no longer an
effective competitor in those markets and accord­
ingly, consummation of the proposed acquisition
would not carry an adverse effect on competition,
existing or potential, in any market.)
Hawaiian governmental authorities have ex­
pressed the view that, absent consummation of the
proposed acquisition, a serious danger would exist
that HT&L would fail. The consequences of fail­
ure of HT&L would be serious financial loss to
some 30,000 uninsured investment certificate and
debenture holders, as well as possible liquidity
problems at other Hawaiian financial institutions,
possible harm to certificate holders in such institu­
tions, and serious consequences to Hawaii’s econ­
omy, according to the Governor of that State.
These consequences would be avoided by con­
summation of the proposed acquisition.
Based upon the foregoing and other consid­
erations reflected in the record, the Board has
determined, in accordance with the provisions of
section 4(c)(8) that the public benefits that can be
reasonably expected from consummation of the
proposed acquisition outweigh the adverse com­
petitive effects of such consummation. Accord­
ingly, the application is hereby approved. This
determination is subject to the conditions set forth
in section 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 consummated not later
than three months after the effective date of this
Order, unless such period is extended for good
4In any even t, consum m ation w ould elim inate potential
com petition betw een Applicant and HT& L. Applicant has
made efforts to form an industrial loan com pany in H aw aii,
but those efforts were unsuccessful due to the refusal o f the
Hawaii Director of Regulatory Institutions to grant the n e c es­
sary license. It is estim ated that HT&L held, on June 30, 1974,
28 per cent of investm ent certificates issued by Hawaiian
industrial loan com panies. Thus, but for H T & L ’s present
financial condition, the instant application w ould raise
significant problem s related to potential com petition in H aw ai­
ian markets for non-insured lendable funds, apart from its effect
in Hawaiian loan markets.

526

Federal Reserve Bulletin □ August 1975

cause by the Board or by the Federal Reserve Bank
of San Francisco, pursuant to authority hereby
delegated.
By order of the Board of Governors, effective
June 18, 1975.
Voting for this action: Chairman Burns and Gover­
nors Mitchell, Holland, Wallich, and Coldwell. Absent
and not voting: Governor Bucher.
(Signed) T h e o d o r e E. A l l i s o n ,
[s e a l]

Secretary of the Board.

ORDERS FOR HEARING

Mellon N ational Corporation,
Pittsburgh, Pennsylvania
Order for Hearing

Mellon National Corporation, Pittsburgh, Penn­
sylvania, has applied, pursuant to § 4(c)(8) of the
Bank Holding Company 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)) for permission
to acquire 100 per cent of the voting shares of
Local Loan Company, Chicago, Illinois. Notice
of the application was published between Sep­
tember 20 and 27, 1974 and on October 3, 11
and 12, 1974, in newspapers of general circulation
in each of the communities in which there is
located one or more of the 124 offices of Local
Loan Company located in the United States to be
retained by Applicant if the proposed transaction
is consummated. The subsidiaries of Local Loan
Company operate offices in the States of Califor­
nia, Colorado, Florida, Illinois, Indiana, Ken­
tucky, Minnesota, Nebraska, New York, Oregon,
Washington, and Wisconsin.
By notice published in the Federal Register on
December 6 , 1974 (39 Federal Register 42719
(1974)), the Board invited interested persons to
express their views on the question whether con­
summation of the proposal 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 concentration of resources,
decreased or unfair competition, conflicts of inter­
ests, or unsound banking practices.” The notice
further provided that any request for a hearing on
this question should be accompanied by a state­
ment summarizing the evidence the person re­
questing the hearing proposes to submit or to elicit
at the hearing and a statement of the reasons why
this matter should not be resolved without a hear­
ing.



By letter dated January 6 , 1975, Mr. Anthony
R. Martin-Trigona, Chicago, Illinois, requested
that the Board hold a formal hearing on the Mellon
application.1 His request, which was accompanied
neither by a statement summarizing the evidence
he proposed to submit or elicit nor by a statement
why the matter could not be resolved without a
hearing, stated his belief “ that the Board is well
aware of my standing as a party in interest.” In
response to Applicant’s challenge to his standing,
Mr. Martin-Trigona requested the Board to incor­
porate by reference in the record of this proceeding
certain earlier submissions to the Board made by
him with respect to his standing to oppose the
application of The Chase Manhattan Corporation,
New York, N.Y., to acquire Dial Financial Cor­
poration, Des Moines, Iowa.
On May 30, 1975, following receipt of several
further communications from both Mellon and Mr.
Martin-Trigona with respect to the standing issue,
and because Mr. Martin-Trigona had expressed a
desire to supplement his earlier submission on
standing in the Chase-Dial matter, the Board’s
General Counsel notified Mellon and Mr. MartinTrigona that he would hold an informal hearing
on June 12, 1975, to afford them the opportunity
to put before the Board any additional facts they
deemed relevant on the standing question. Appli­
cant and its counsel, as well as Mr. Martin-Trigona
and his counsel, participated in this proceeding,
and Mr. Martin-Trigona has taken the position that
he has carried his burden of establishing his
standing to obtain a formal hearing in this case.
A brief review of the history of Mr. MartinTrigona’s efforts to establish his standing in Board
proceedings under the Bank Holding Company Act
is necessary to put the present controversy in
perspective.
In November 1972, Mr. Martin-Trigona pro­
tested the application of BankAmerica Corpora­
tion, San Francisco, California (“ BankAmer­
ica” ), for permission to acquire GAC Finance,
Inc., Allentown, Pennsylvania. In response to an
inquiry from the Board asking whether he claimed
status as a “ party in interest” and, if so, request­
ing that he state the basis for that claim, Mr.
Martin-Trigona responded that his claim was made
“ on the basis of my undivided interest in the
public interest, as a citizen of the United States
and the State of Illinois, and as a person who
1 A lthough Mr. M artin-Trignoa’s letter stated that “ I w ould
again renew m y dem and for formal hearings on this applica­
tio n ,” no previous request for a hearing on the M ellon appli­
cation had been made by him .

L aw D epartm ent

stands to be injured by economic concentration.”
In addition, he asserted an interest in “ meaningful
and rigorous enforcement” of the antitrust laws.
By letter of June 26, 1973, the Board rejected
Mr. Martin-Trigona’s claim of party-in-interest
status in that case because, inter alia , he had not
shown what he was within the class sought to be
protected by the Bank Holding Company Act. In
July 1973, the Board denied BankAmerica’s ap­
plication, but BankAmerica requested recon­
sideration. In August 1973, Mr. Martin-Trigona
reaffirmed his opposition to the application and
again requested a hearing. However, he submitted
no additional material with respect to his claim
of standing and the Board denied his renewed
request for a hearing for the reasons it had stated
in its June 26 letter. Mr. Martin-Trigona petitioned
the U. S. Court of Appeals for the District of
Columbia Circuit for review of the Board’s denial
of his request. In his brief to the Court of Appeals,
Mr. Martin-Trigona, admitting that the matter was
“ not of record,” asked the Court to consider that
“ petitioner himself is a potential entrant in the
financial services industry and has been studying
an entry in the market himself for sometime in
1974.” He alleged that these plans “ will shortly
be coming to fruition” and he described his entry
as “ imminent.” On review, the Board’s conclu­
sion as to his standing was affirmed by the Court
of Appeals. Martin-Trigona v. Federal Reserve
Board , 509 F.2d 363 (D.C. Cir. 1975) (the
“BankAmerica-GAC case” ).2
In March 1974, as we have noted, Mr. MartinTrigona protested a renewed application of The
Chase Manhattan Corporation (“ Chase” ) to ac­
quire Dial Financial Corporation,3 and sought
leave to intervene on the ground that he was then
“ in the process of entering the financial services
industry himself and, accordingly, is within the
class of business competitors and potential com­
petitors who are guaranteed a right and standing
to intervene” by 12 U.S.C. § 1850. Elaborating
on this request in April 1974, he stated that he
had taken a number of preparatory steps to enter
the business,4 that he was “ prepared to commit
more funds in the next 60 days to begin operations,

2In 1970, the same court affirmed a decision o f the Federal
C om m unications C om m ission holding that Mr. M artin-Trigona
lacked standing to petition that agency for revocation o f the
licenses o f the three major N ew York television stations.
M artin -T rig o n a v. F ederal C om m inucations C om m ission , 43 2
F .2d 68 2 (D .C . Cir. 1970).
3C hase’s first application to acquire D ial, w hich was denied
in January 1974, w as not opposed by Mr. M artin-Trigona.




527

and that “ we should be operational on a pilot basis
some time in June or early July, and move into
full scale operations as soon as is practicable.”
In July 1974, he told the Board that he was waiting
until the prime rate fell below 9 per cent, and that
“ if we had a prime rate of 9 per cent, I think
we would be operational by the 1st of August.”
On October 31, 1974, the Board denied Chase’s
application without a hearing and, accordingly,
without resolving the question of Mr. MartinTrigona’s standing.
In the present case, Mr. Martin-Trigona con­
tinues to allege that he intends to enter the con­
sumer finance business in Chicago, and that he
therefore has standing as a potential competitor
of Mellon. While interest rates have decreased
well below the 9 per cent level that he referred
to in the Chase-Dial matter, he now states that
his uncertainty as to the “ regulatory climate” and
the general economy is deterring his entry. He
avers that “ I’ve got the money to go, and I can
start lending and earning a return on my assets
virtually instantly.” However, he states he is
waiting “ to determine what the position of the
Board will be” before he proceeds, and that “ if;
the Board proceeds to approve willy nilly acquisi­
tions of loan companies by bank holding compa­
nies,” the chances he will proceed with entry “ are
marginal, at best.” He further states that he has
been “ postponing our entry until the economy
appears to be moving out of the recession and until
the demand for funds moves to the positive side.”
We take as our present standard for determining
questions of standing in cases such as this § 105
of the Bank Holding Company Act Amendments
of 1970 (12 U.S.C. § 1850), and the recent deci­
sion of the U. S. Court of Appeals for the District
of Columbia Circuit in the BankAmerica-GAC
case.
Section 105 expressly provides that in a case
in which a bank holding company applies for
authority to acquire a company engaged in a non­
banking activity
“a party who would become a competitor of the applicant
or subsidiary thereof by virtue of the applicant’s . . . acquisi­
tion, . . . shall have the right to be a party in interest”

S p e c ific a lly , he stated he had surveyed relevant state law s,
appropriate corporate form s, and possible nam es; form ed cor­
porations and ordered a corporate logo; inquired of banks as
to lines o f credit; investigated banks to perform computer
bookkeeping and lock box services; raised a “ m odest initial
cash investm ent” ; and had d iscussion s with a “ possible fu ll­
tim e branch manager for the first o ffice .”

528

Federal Reserve Bulletin □ August 1975

in the Board’s proceeding with respect to the
application. Mr. Martin-Trigona is admittedly not
a present competitor of either Mellon of Local
Loan and he clearly would not become such “ by
virtue of” the proposed acquisition. However, in
the BankAmerica-GAC case, the Court pointed
out that a “ potential competitor” would be within
the “ zone of interest” protected by § 4 of the
Bank Holding Company Act “ if that potential
competitor may realistically be viewed as a possi­
ble entrant” into the relevant market. Further­
more, although it reserved judgment on the issue,
it suggested that a consumer of the services offered
by the applicant or the acquired firm would simi­
larly be considered to be within that “ zone of
interest.” In either event, the Court stated that,
in order to establish standing in a case such as
this, the claimant must satisfy three salient prin­
ciples: first, he must allege that the proposed
acquisition would cause him “ injury in fact, eco­
nomic or otherwise” ; second, the alleged “ injury
in fact” must be arguably within the zone of
interests protected or regulated by the statute; and,
third, the claimant “ may not merely allege the
existance of an injury,” but must go beyond and
allege “ facts showing that he is himself adversely
affected” by the proposed acquisition. The Court
further indicated that the test of whether a potential
competitor or consumer has standing based upon
allegations of injury resulting from the anticom­
petitive effects of an acquisition is whether he
would have standing under the Clayton Act (15
U.S.C. § 12 et seq.) to maintain a private antitrust
action with respect to the proposed acquisition.5
(509 F.2d at 365-66).
Assessing Mr. Martin-Trigona’s belated claim
of standing as a “ consumer” on the basis of the
standards articulated by the Court of Appeals, we
have little difficulty in concluding that he has not
established standing as a consumer. Mr. MartinTrigona admittedly has never borrowed from Local
Loan Company, although he states that he “ might
at some point in the future do so.” At the informal
hearing before the General Counsel he was not
responsive in answering questions about his past
“ consumer” borrowings, and he flatly refused,
“ simply on the basis of relevance,” to state when
in the past he had borrowed from any consumer

5Section 4 o f the C layton A ct (15 U .S .C . § 15) permits
private dam age actions by any person w ho has been injured
in his business or property by reason o f any conduct o f the
defendant violative o f the antitrust law s. Section 16 of the
C layton A ct (15 U .S .C . § 26) authorizes suits for injuctions
by any person threatened with injury by such conduct.




finance company. He has alleged no facts whatso­
ever that he even remotely indicated how he would
personally be adversely affected as a “ consumer”
by Mellon’s proposed acquisition of Local Loan.
Although he makes the conclusory claims that the
effect of this acquisition would be “ to force rates
higher,” and that an additional source of credit
would be provided if Mellon were encouraged to
enter the finance business de novo, rather than
through an acquisition of an existing company, the
Board does not consider these allegations to con­
stitute the type of factual allegations of particu­
larized injury called for in the test establishment
by the Court of Appeals.
A somewhat different question is presented,
however, with respect to Mr. Martin-Trigona’s
claim as a “ potential competitor.” Under the
approach dictated by the Court of Appeals in the
BankAmerica-GAC case, there are four elements
to be considered in determining whether a party
claiming standing as a potential competitor has
established the necessary intention and
preparedness to warrant a conclusion that he has
a protectable “ business” interest: ( 1) his back­
ground and experience in the prospective business,
(2) the affirmative action he has taken to engage
in the proposed business, (3) his financial ability
to purchase the necessary equipment and facilities
to engage in the business, and (4) the consumma­
tion of contracts relating to the proposed business.
See Waldron v. British Petroleum Co., 231 F.
Supp. 72, 81-82 (S.D.N.Y. 1964).6
Applying these tests, the Board has substantial
question whether Mr. Martin-Trigona can realisti­
cally be viewed as a potential competitor. He has
not alleged or proved that he has background or
experience in the consumer finance business; he
has not consummated any contracts relating to the
business; he has not obtained or applied for a State
license to engage in the business. While he claims
to have made certain “ surveys” and taken certain
very preliminary steps, such as the formation of
shell corporations, and while he claims to have
made “ inquiries” of banks as to lines of credit,
the Board has doubts that these steps constitute
meaningful “ affirmative action” and that his mere
“ inquiries” of banks establish his financial ability
to engage in the business. Moreover, his long
delay in actually entering the business since the
first time he informed the Board of his intention
to do so, and the unpersuasiveness of his explana­

6The W aldron case w as ex p ressly relied upon by the C ourt
o f A p p ea ls in the B a n kA m erica case. 509 F .2d at 366 n .1 2 .

L aw D epartm ent

tion for this delay, strongly suggest that his claim
of “ potential competitor” status has been ad­
vanced for the purpose of clothing himself with
standing in Board proceedings rather than as a
result of a bona fide intention to enter the consumer
finance business.
In short, there is reason to be skeptical about
Mr. Martin-Trigona’s claims, and the Board be­
lieves that the record in this matter would support
a conclusion that he should not, in the Court of
Appeals’ words, “ realistically be viewed as a
possible entrant” into the consumer finance busi­
ness. However, in the event a reviewing court
were to take a different review of the standing
issues the likely relief would be a remand for a
hearing. Because of its reluctance to foreclose the
parties prematurely from making full submissions
on the standing issue in this case the Board has
permitted the argument to carry on for a period
of several months, and the Board is hesitant at
this stage of the proceedings to infect this case
with possible procedural error, however remote
that possibility may be, that would in the long
run cause far more substantial delay in the final
resolution of this matter. Accordingly, the Board
has determined not to decide the question as to
Mr. Martin-Trigona’s standing as a potential com­
petitor in this case, but nevertheless to hold a
hearing on the merits of Mellon’s application and
to permit Mr. Martin-Trigona to participate in that
hearing.7
For the foregoing reasons, it is hereby ordered
that a public hearing be held with respect to the
application of Mellon National Corporation, Pitts­
burgh, Pennsylvania, pursuant to § 4(c)(8) of the
Bank Holding Company 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)), for permis­
sion to acquire 100 per cent of the voting shares
of Local Loan Co., Chicago, Illinois. The hearing
will commence at 10:00 a.m., September 3, 1975,
before Phillip J. LaMacchia, former Administra-

7In light o f his past expressions o f interest in participating
in Board proceedings, w e recognize that the question o f Mr.
M artin-Trigona’s standing m ay again be raised in future appli­
cation proceedings. T o the extent that he continues to claim
standing as a potential entrant into the consum er finance busi­
ness, the Board w ill, in any such future ca se, expect to be
presented with credible evidence that the intention he first
expressed in this regard in April 1974, has been m eaningfully
furthered by the taking o f concrete steps to enter that business.
O f course, whether or not Mr. M artin-Trigona is determined
to have sufficient standing to entitle him to a formal hearing
and to party-in-interest status, the opportunity is alw ays avail­
able to him to make a tim ely subm ission o f facts and arguments
in written form.




529

tive Law Judge, now retired, in Room 1202 of
the Board Building, Constitution Avenue between
20th and 21st Streets, Washington, D.C. 20551.
It is further ordered , that the issue to be con­
sidered as said hearing is whether the proposed
acquisition 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
concentration of resources, decreased or unfair
competition, conflicts of interest, or unsound
banking practices.8
By order of the Board of Governors, July 28,
1975.
Voting for this action: Governors Bucher, Wallich,
and Jackson. Voting against this action: Governors
Holland and Coldwell. Absent and not voting: Chairman
Burns and Governor Mitchell.
(Signed) T h e o d o r e E. A l l i s o n ,
[s e a l]

Secretary of the Board.

Dissenting Opinion of
Governors Holland and Coldwell

We share the view that Mr. Martin-Trigona’s
claim to be a potential entrant into the consumer
finance business is not creditable, but having
reached that view we would not further delay this
matter by holding a hearing.
His long delay in actually entering the business
and his weak explanations for the delay, compel
the inference that he has little real intention of
entering this business. For the Board to order a
hearing under these circumstances is in our opinion
simply to countenance an abuse of its procedures,
which were designed to protect the public interest.
The public interest is served by reasonably prompt
decision-making by a regulatory agency, and that
also is a factor to be weighed in the balance, in
our judgment, in deciding to what extremes the
provision of pre-decision opportunities for presen­
tation of arguments should be pushed.
It should be stressed that a determination that
Mr. Martin-Trigona lacks standing by no means
forecloses him from bringing relevant matters to
the attention of the Board. Although he has not
seen fit to submit anything with respect to the

8In view of the B oard’s decision to hold a hearing in this
matter and to afford Mr. M artin-Trigona the sam e opportunity
to participate that he w ould have had if he had established
his standing, the question o f standing w ill no longer be con ­
sidered to be an issue to be litigated in this proceeding before
the Board, and the hearing w ill be lim ited to the merits of
the application.

530

Federal Reserve Bulletin □ August 1975

merits of the Mellon application, despite repeated
invitations to do so, our procedures offer him
ample opportunity to make written submissions
contesting the facts upon which the application is
premised and to present us with additional facts,
expert opinion or legal argument of his own. The
Board is interested in informed decision-making,
and it is interested in receiving the views of both
competitors and consumers on matters coming
before it under the Bank Holding Company Act.
We would have welcomed any such contribution
that Mr. Martin-Trigona might have made on the
issues presented by cases such as this. Information
and arguments submitted by all parties will be fully
weighed by the Board in seeking to decide the
net public benefits in this case, as is mandated
by the statute.

Order for Hearing

pursuant to a decision by the United States Court
of Appeals for the Ninth Circuit, on the petition
of Patagonia Corporation, Tucson, Arizona, that,
on or before June 30, 1968, Pima Savings and
Loan Association, Tucson, Arizona was a subsid­
iary of Patagonia Corporation, as defined in section
2 (d)(3) of the Bank Holding Company Act (12
U.S.C. 1841(d)(3)). Pursuant to that Board Order
(40 Federal Register 30537), Philip J. LaMacchia,
former Administrative Law Judge, now retired,
was appointed as the Presiding Officer to conduct
the hearing in accordance with the Board’s Rules
of Practice for Formal Hearings (12 C.F.R. Part
263).
The hearing will commence at 10:00 a.m. on
September 30, 1975 in Tucson, Arizona, at the
Federal Building, 301 West Congress Street. The
hearing will be open to the public.
By order of the Secretary of the Board of
Governors, acting pursuant to delegated authority
from the Board of Governors, effective July 30,
1975.

On July 11, 1975, the Board of Governors of
the Federal Reserve System ordered a hearing,

[s e a l]

Patagonia Corporation,
Tucson, Arizona

(Signed)

T heodore

E.

A llis o n ,

Secretary of the Board.

O R D E R S N O T P R IN T E D IN T H IS ISSU E
ORDERS APPROVED BY THE BOARD OF GOVERNORS

During June or July 1975, the Board of Governors approved the applications listed below. The orders
have been published in the Federal Register, and copies of the orders are available upon request to
Publications Services, Division of Administrative Services, Board of Governors of the Federal Reserve
System, Washington, D.C. 20551.
ORDER UNDER SECTION 3(a)(1) OF BANK HOLDING COMPANY ACT—
APPLICATIONS FOR FORMATION OF BANK HOLDING COMPANY

Applicant

North Florida Bancshares,
Inc., Panama City, Florida




Bank(s)

The Bay National and
Trust Co. and The First
National Bank, both in
Panama City, Florida

Board action
(effective
date)

Federal
Register
citation

7/18/75

40 F.R. 31287
7/25/75

L aw D epartm ent

531

ORDER UNDER SECTION 3(a)(3) OF BANK HOLDING COMPANY ACT—
APPLICATIONS FOR ACQUISITION OF BANK

Applicant

Bank(s)

Mountain Banks, Ltd.,
Colorado Springs, Colorado

Fort Collins National
Bank, Fort Collins,
Colorado

Board action
(effective
date)

Federal
Register
citation

7/28/75

40 F.R. 33074
8/6/75

ORDERS UNDER SECTION 4(c)(8) OF BANK HOLDING COMPANY ACTAPPLICATIONS TO ENGAGE IN NONBANKING ACTIVITIES

Applicant

Allied Bancshares, Inc.,
Houston, Texas
The Central Bancorporation,
Inc., Cincinnati, Ohio

Nonbanking company
(or activity)

Allied Life Insurance
Company of Texas,
Houston, Texas
The Shawnee Life Insurance
Company, Phoenix, Arizona

Board action
(effective
date)

Federal
Register
citation

7/9/75

40 F.R. 30326
7/18/75

7/25/75

40 F.R. 32794
8/4/75

ORDERS UNDER SECTIONS 3 AND 4 OF BANK HOLDING COMPANY ACT—
APPLICATIONS TO FORM BANK HOLDING COMPANY AND ENGAGE IN
NONBANKING ACTIVITIES

Applicant

Bank(s)

Citizens State Bancorp,
Inc., Manhattan,
Kansas

Citizens State
Bank & Trust
Co., Manhattan,
Kansas

FOB, Corp., Belleville,
Indiana

First National
Bank of Belle­
ville, Belleville,
Illinois

Nonbanking
company
(or activity)

Sale of
credit life,
credit accident,
and health
insurance
Illinois State
Trust Company,
East St. Louis,
Illinois

Effective
date

Federal
Register
citation

6/27/75

40 F.R. 28872
7/9/75

7/18/75

40 F.R. 31285
7/25/75

ORDER UNDER SECTION 3(a)(1) OF BANK HOLDING COMPANY ACT—
APPLICATION FOR FORMATION OF BANK HOLDING COMPANY— AND
DETERMINATION UNDER SECTION 2(g)(3) OF BANK HOLDING COMPANY ACT

Applicant

Mercantile National
Corporation, Dallas,
Texas



Bank(s)

Mercantile National
Bank at Dallas,
Dallas, Texas

Board action
(effective)
date)

Federal
Register
citation

6/2/75

40 F.R. 28676
6/8/75

532

Federal Reserve Bulletin □ August 1975

ORDERS APPROVED BY THE SECRETARY OF THE BOARD

During July 1975, applications were approved by the Secretary of the Board under delegated authority
as listed below. The orders have been published in the Federal Register, and copies of the orders
are available upon request to Publications Services, Division of Administrative Services, Board of
Governors of the Federal Reserve System, Washington, D.C. 20551.
ORDERS UNDER SECTION 3(a)(1) OF BANK HOLDING COMPANY ACT—
APPLICATIONS FOR FORMATION OF BANK HOLDING COMPANY

Applicant

Kansas State Bancshares,
Inc., Manhattan, Kansas
The Landmands Corporation,
Kimballton, Iowa

Bank(s)

Kansas State Bank
of Manhattan,
Manhattan, Kansas
The Landmands National
Bank of Kimballton,
Kimballton, Iowa

Board action
(effective
date)

Federal
Register
citation

7/21/75

40 F.R. 31286
7/25/75

7/1/75

40 F.R. 28874
7/9/75

ORDERS UNDER SECTION 3(a)(3) OF BANK HOLDING COMPANY ACT—
APPLICATIONS FOR ACQUISITION OF BANK

Applicant

First International Banc­
shares, Inc., Dallas
Texas
Manufacturers National
Corporation, Detroit,
Michigan
Texas Commerce Bancshares,
Inc., Houston, Texas

Bank(s)

First International
Bank in El Paso
El Paso, Texas
Bay City Bank & Trust
Company, Bay City,
Michigan
Casa Linda National
Bank of Dallas; Fidelity
Bank, National Association;
Northwest National Bank
of Dallas; Royal National
Bank of Dallas; and The
Village Bank (National
Association), all located in
Dallas, Texas

Board action
(effective
date)

Federal
Register
citation

7/31/75

40 F.R. 33493
8/8/75

7/21/75

40 F.R. 31286
7/25/75

7/31/75

40 F.R. 33495
8/8/75

ORDERS APPROVED BY FEDERAL RESERVE BANKS

During July 1975, applications were approved by the Federal Reserve Banks under delegated authority
as listed below. The orders have been published in the Federal Register, and copies of the orders
are available upon request to the Reserve Bank.




L aw D epartm ent

533

ORDER UNDER SECTION 3(a)(1) OF BANK HOLDING COMPANY ACT—
APPLICATIONS FOR FORMATION OF BANK HOLDING COMPANY

Applicant

Butte State Company,
Butte, Nebraska

Bank(s)

Butte State Bank,
Butte, Nebraska

Reserve
Bank

Effective
date

Kansas City

7/3/75

Federal
Register
citation

40 F.R. 30158
7/17/75

ORDERS UNDER SECTION 3(a)(3) OF BANK HOLDING COMPANY ACT—
APPLICATIONS FOR ACQUISITION OF BANK

Applicant

CleveTrust Corporation,
Cleveland, Ohio
Winters National Cor­
poration, Dayton, Ohio
First Banc Group, Inc.,
Creve Coeur, Missouri




Bank(s)

The City Bank,
Kent, Ohio
Euclid National
Bank, Euclid,
Ohio
Commonwealth
Bank, Wentzville,
Missouri

Reserve
Bank

Effective
date

Cleveland

7/25/75

Cleveland

7/17/75

St. Louis

7/24/75

Federal
Register
citation

40 F.R. 33071
8/6/75
40 F.R. 31288
7/25/75
40 F.R. 33072
8/6/75

534

Announcements
ANALYSES OF
SYSTEM EXPENDITURES
The Board of Governors of the Federal Reserve
System on August 4, 1975, sent to the Congress
two analyses on various items of expenditures
made by the Federal Reserve System during the
calendar year 1974.
The analyses were sent to the chairman and
ranking members of the House Banking, Cur­
rency, and Housing Committee in response to a
staff report issued by the Subcommittee on Do­
mestic Monetary Policy covering 1974 expendi­
tures of the System and a report by the full
committee on H.R. 7590, a bill that would provide
for an audit of the Federal Reserve by the General
Accounting Office.
Expenditures by the System during 1974 were
consistent with provisions of the Federal Reserve
Act that authorize the Board of Directors of each
Reserve Bank to formulate operating policies under
the general supervision of the Board.
There were only a few cases where an expense
item seemed questionable to the Board, and for
such items action has been taken to avoid a recur­
rence.
In transmitting the analyses to the Congress,
Board Chairman Arthur F. Burns said:
The Board rejects categorically the Com­
mittee’s apparent judgment that Federal Re­
serve expenditures have grown at an exces­
sive rate. Any responsible analysis of the
System’s expenditures would show that in­
creases have been reasonable in light of the
System’s rapidly growing workload, the in­
creased responsibilities imposed by Con­
gress, and the rise in the cost of doing
business. As just one example, the average
salary of officers within the System rose at
an average annual rate of 5.3 per cent be­
tween 1964 and 1974; this is well below the
annual average increase for employees in the
Federal civil service.
The Board noted that items of expenditure re­
ported in the congressional documents were pro­




vided to the House Banking Committee by the staff
of the Board of Governors and the Federal Reserve
Banks. These expenditures were identified under
strict auditing and control procedures that have
been in effect within the System for many years.
NEW BILL-PAYING SERVICE
The Board of Governors of the Federal Reserve
System has authorized member banks to offer a
bill-paying service to their customers through the
preauthorized transfer of funds from the cus­
tomer’s savings account, effective September 2.
Prior to this action, a bill-paying service of this
type could be made only for the payment of the
principal, interest, or other charges related to a
real estate loan or mortgage.
The new authorization, in the form of an
amendment to the Board’s Regulation Q governing
the payment of interest on deposits, permits a
savings depositor to authorize the transfer of funds
to third parties for payments of any type, except
bank overdrafts.
The amendment as adopted was substantially the
same as proposed by the Board on April 7, with
three modifications:
—It specifies that transfers from savings ac­
counts may not be made to cover overdrafts or
the use of a checking account line of credit.
—The amendment makes it clear that it does
not permit a member bank to agree to transfer
funds automatically—that is, without specific in­
structions—from a customer’s savings account to
the customer’s checking account.
—The amendment indicates that withdrawal
orders or authorizations for payment to third par­
ties may be received by a member bank only from
a depositor.
The Board had previously invited public com­
ment on proposed arrangements for access to Fed­
eral Reserve clearing and settlement facilities con­
nected with automated clearing houses. Pending
further consideration of this matter, such Federal
Reserve facilities may not be used to clear the

Announcements

third-party transfers now authorized from savings
accounts. Rules presently in effect regarding the
clearing and settling of negotiable orders of with­
drawal (NOW’s) are not affected by the amend­
ment of Regulation Q.
The amendment gives member banks broad,
general authority to design and offer bill-paying
services by using funds in savings accounts. The
amendment does not, however, specify the form
of such services. The Board therefore offered the
following hypothetical outline of a possible billpaying service:
In most cases, a bill-paying service will be
based upon a written contract between the
bank and the depositor. . . . The transfer
. . . may be accomplished by means of an
internal bank transaction or by sending a
bank check to the transferee or the trans­
feree’s bank.
The depositor will give the bank the names
of those organizations or individuals to
whom funds are to be transferred, indicating
either the specific amount to be paid to each,
or a maximum amount and the frequency
of payment. . . .
Subsequent additions to the list of trans­
ferees or changes in instructions may be
communicated to the bank in person, in
writing or by telephone.
If the depositor uses a written withdrawal
form to convey transfer instructions to the
bank, such form must contain language in
boldface type that it is not negotiable or
transferable.
The System will monitor the development of
bill-paying services, and it is possible that addi­
tional regulations or guidelines may be issued in
the future. Member banks were advised to main­
tain data on accounts subject to third-party pay­
ment authorizations in a manner that will facilitate
identification of such deposits for reporting pur­
poses.
The Federal Deposit Insurance Corporation has
proposed similar changes in its regulations.
LETTER RE:
EM ERGENCY H OUSING ACT
The Board of Governors on August 12, 1975,
requested the Reserve Banks to send a letter to
the chief executive officers of State member banks
drawing their attention to the provisions of the




535

Emergency Housing Act of 1975. The Board’s
letter to State member banks, which urged that
they “ review the requirements and objectives of
the Emergency Housing Act of 1975, together with
the long-term prospects for repayment by delin­
quent borrowers before instituting foreclosure ac­
tion,” is as follows:
TO THE CHIEF EXECUTIVE OFFICER
OF EACH STATE MEMBER BANK
On July 2, 1975, Public Law 94-50 known as the
“ Emergency Housing Act of 1975” became ef­
fective. The Act gives the Department of Housing
and Urban Development standby authority to pro­
vide up to $250 per month assistance to home­
owners who are unable to make full mortgage
payments because of a substantial reduction in
income, as a result of involuntary unemployment,
or under-employment due to adverse economic
conditions, provided certain stipulated require­
ments are met. The assistance may take the form
of insurance for loans or advances from financial
institutions or direct loans from HUD on behalf
of delinquent mortgagors and is designed to pre­
vent widespread mortgage foreclosure and dis­
tressed sales of properties. The Department of
Housing and Urban Development expects to issue
Regulations dealing with the Act. In addition to
the standby authority given HUD, the Act notes
the obligations of prudent lenders to exercise re­
straint on the foreclosure of residential1 mortgages
where such relief might be available and effective.
The Act also charges the Federal supervisory
agencies, until one year from the date of enact­
ment, with respect to financial institutions subject
to their jurisdiction to: ( 1) “ take appropriate ac­
tion, not inconsistent with laws relating to the
safety or soundness of institution or mortgagee,
as the case may be, to waive or relax limitations
pertaining to the operations of such institutions or
mortgagees with respect to mortgage delinquencies
in order to cause or encourage forbearance in
residential mortgage loan foreclosures” , and (2)
“ request each such institution or mortgagee to
notify that Federal supervisory agency, the Secre­
tary of HUD and the mortgagor at least 30 days
prior to instituting foreclosure proceedings in con­
nection with any mortgage loan.”
*For the purposes of the Act, residential mortgages
include loans on 1- to 4-family homes, mobile homes,
and single condominium units. In each case, the unit
must be the principal residence of the mortgagor.

536

Federal Reserve Bulletin □ August 1975

The Federal Reserve, therefore, urges each State
member bank to review the requirements and ob­
jectives of the Emergency Housing Act of 1975,
together with the long-term prospects for repay­
ment by delinquent borrowers before instituting
foreclosure action. In this connection, the Sys­
tem’s examiners are being furnished a copy of this
letter and are being instructed to refrain from
criticizing forbearance in residential mortgage loan
foreclosures where such forbearance does not
threaten the safety and soundness of the bank
under examination.
With respect to the legal requirement for notifi­
cation of intent to foreclose on a residential mort­
gage loan, you will be advised in the near future
of the specific information which will be required
to fulfill the notification stipulation.
Your cooperation in this effort will be appreci­
ated.

Mr. Guenther, formerly Assistant Special Trade
Representative for Commercial Policy in the Ex­
ecutive Office of the President, is a cum laude
graduate of the University of Rochester and has
done graduate work at Yale University and Johns
Hopkins University.
The Board has also announced the promotion
of Stanley J. Sigel, Adviser in the Division of
Research and Statistics, as an Assistant to the
Board in the Office of Managing Director for
Research and Economic Policy, effective August
1, 1975.

CHANGES IN BOARD STAFF

Michigan

The Board has announced the appointment of
Kenneth A. Guenther as Assistant to the Board
in congressional liaison matters, replacing John
Rippey, who has resigned.

Minnesota




ADM ISSION OF STATE BANKS
TO M EM BERSH IP IN SYSTEM
The following banks were admitted to membership
in the Federal Reserve System during the period
July 16, 1975, through August 15, 1975:
Troy .............................. Detroit Bank—Troy
Victoria ........................ Victoria State Bank
West Virginia

Harpers Ferry .......... Bank of Harpers Ferry

537

Industrial Production
Released for publication August 15

Industrial production is estimated to have in­
creased 0.5 per cent in July following a similar
rise in June. Increases in July were fairly wide­
spread among consumer goods and nondurable
materials. But output of business equipment and
durable materials decreased further and con­
struction products changed little. The estimated
levels of total industrial production for both June
and May were revised upward (0.3 and 0.2, re­
spectively).
Among consumer goods, auto production in­
creased 5 per cent further in July and output of
appliances, furniture, and other consumer goods
continued to rise. Total consumer goods produc­
tion was up about 4 per cent from the March low.
Business equipment production declined about 1.5
per cent further in July, bringing the total cutback
in those industries to 15 per cent since last Sep­
tember. Output of construction products ap­
parently leveled off in July.
Total materials production is estimated to have
increased slightly in July following a moderate
increase in June. Further rises in output of the
textile, paper, and chemical industries and other
nondurable materials exceeded continued cutbacks
in durable materials production. Output of iron and

steel was practically unchanged from month-ago
levels, but further reductions occurred in the nonferrous metal industries.
INDUSTRIAL PRODUCTION
Seasonally adjusted, ratio scale, 1967=100
1 140
MATERIALS

1
1

,-3^/lpRODUC' 's- 1V I TOTAL
1
I I I

F.R . indexes, seasonally adjusted. Latest figures: July.
* A u to sales and stocks include imports.

Seasonally adjusted
1967 = 100
Per cent changes from —
1975

Industrial production
April

M ay

June1'

July'’

M onth
ago

Year
ago

Q1 to
Q2

..................................................................................

1 0 9 .9

1 0 9 .8

1 10.3

1 1 0 .8

.5

-1 1 .7

-1 .4

Products, total ..........................................................................
Final products ......................................................................
C onsum er goods ............................................................
Durable goods ..........................................................
Nondurable goods ...................................................
B usiness equipm ent ....................................................
Intermediate products ......................................................
Construction products .................................................

112.9

113.0
113.2

113.5
113.8

113.9
114.3
123.4
115.5
126.4
112.7

.4
.4

-

2 .4
.7
-1 .5

1 1 2 .6

.2

- 8 .1
- 6 .9
- 5.1
-1 2 .3
- 2.3
-1 4 .2
- 1 1 .9
-1 6 .7

- .6
-3 .8
- 2 .1
- 3 .7

Materials .....................................................................................

- 1 7 .5

-2 .7

T o ta l

^Preliminary.




'’Estimated.

1 1 2 .6

119.6
107.8
124.0
115.4
113.4

1 2 0 .6
1 1 0 .2

1 2 2 .0
1 1 2 .8

110.1

124.5
115.0
112.4
107.6

125.5
114.4
112.4
106.8

106.8

105.2

104.6

105.1

105.6

1.1

.5

.6

.3
1.3
7 .4

A 1

Financial and Business Statistics
CONTENTS

GUIDE TO TABULAR PRESENTA­
TION ON INSIDE BACK COVER
STATISTICAL RELEASES: REFER­
ENCE ON INSIDE BACK COVER
U.S. STATISTICS
A 2 M em ber bank reserves , R eserve Bank
A
A
A

A
A
A

A
A
A
A
A
A
A

A
A
A

A
A
A
A
A
A

credit , and related items
5 Federal funds— M oney market banks
6 R eserve Bank interest rates
1 R eserve requirements
8 Maximum interest rates; margin
requirements
9 Open market account
10 Federal R eserve Banks
11 Bank debits
12 M oney stock
13 Bank reserves; bank credit
14 Comm ercial banks , by classes
18 W eekly reporting banks
23 B usiness loans of banks
24 D em and deposit ownership
25 Loan sales by banks
25 Open market p a p er
26 Interest rates
29 Security markets
29 Stock market credit
30 Savings institutions
32 F ederal finance
34 U .S. Governm ent securities
37 F ederally sponsored credit agencies




A
A
A
A
A
A
A
A

38
41
42
45
48
50
50
52

A 53
A 53
A 54
A 56

Security issues
Business finance
R eal estate credit
Consumer credit
Industrial production
Business activity
Construction
L abor force, employment, and
unemployment
Consumer prices
W holesale prices
N ational product and income
Flow of funds

INTERNATIONAL STATISTICS
A
A
A
A

58
59
59
60

A 61
74
A 75
A 75
A

U.S. balance of paym ents
Foreign trade
U.S. reserve assets
G old reserves of central banks and
governments
International capital transactions
of the United States
Open market rates
Central bank rates
Foreign exchange rates

TABLES PUBLISHED PERIODICALLY
Banking Offices:
A 76 Num ber in the United States
A 77 Num ber of p a r and nonpar
A

84 INDEX TO STATISTICAL TABLES

BANK RESERVES AND RELATED ITEMS a AUGUST 1975

A2

MEMBER BANK RESERVES, FEDERAL RESERVE BANK CREDIT, AND RELATED ITEMS
(In millions o f dollars)
Factors supplying reserve funds
Reserve Bank credit outstanding
Period or date

U.S. Govt, securities 1

Total

Bought
out­
right2

Held
under
repur­
chase
agree­
ment

Loans

Float3

8

5
381
142
94

83
170
652
1,117
1,665
3,235
3,570
3,905
3,479
3,414

Other
F.R.
assets 4

Totals

Gold
stock

Special
Drawing
Rights
certificate
account

Treas­
ury
cur­
rency
out­
stand­
ing

Averages of daily figures
1939— D ec..................................
1941—D ec..................................
1945—D ec..................................
1950—D ec..................................
I960—D ec..................................

2,510
2,219
23,708
20,345
27,248

2,510
2,219
23,708
20,336
27,170

1969—D ec..................................

57,500
61,688
69,158
71,094
79,701

57,295
61,310
70,790
78,833

868

1,086
321
107
1,049
1,298

Oct...................................
N ov.................................
D ec..................................

84,313
84,493
84,384
83,735
84,052
86,679

83,496
84,221
84,049
83,303
83,395
85,202

817
272
335
432
657
1,477

3,308
3,351
3,287
1,793
1,285
703

1975—Jan...................................
Feb..................................
Mar.................................
Apr..................................
M ay................................
June................................
July?...............................

86,039
84,744
84,847
87,080
91,918
88,912
88,166

85,369
83,843
84,398
86,117
89,355
87,618
87,882

670
901
449
963
2,563
1,294
284

390
147
106

28.........................

92,125
91,358
92,529
92,156

88,923
89,449
89,494
89,724

3.202
1,909
3,035
2,432

4 .........................
1 1 .......................
18.........................
25.........................

90,748
86 150
87,281
89,859

88,833
86,150
86,957
88,434

1,915

2 .........................
9 .........................
16.........................
23 p .......................
30*.......................

91,559
89,020
87,497
87,997
87,868

88,834
88,473
87,263
87,850
87,609

2,725
547
234
147
259

222
202

91,029
89,895
86,966

88,953
89,665
86,966

2,076
230

91,579
91,356
95,465
94,337

89,209
89,655
89,505
89,640

2,370
1,701
5,960
4,697

18.........................
25.........................

89,002
84,979
89,273
93,269

88,142
84,979
88,167
88,738

1,106
4,531

2 .........................
9 .......................
16.........................
23 p .......................
3Qp .......................

90,026
84,483
89,369
88,662
88,064

89,512
84,483
87,729
87,631
87,112

1970—D ec..................................
1971—Dec..................................
1972—D ec..................................
1973—D ec..................................
1974—July.................................
Aug.................................

68,868

9
78
205
378
290
304

2,612
2,404
24,744
21,606
29,060

17,518
22,759
20,047
22,879
17,954

2,204
1,032
982
1,138
1,079

64,100
66,708
74,255
76,851
85,642

10,367
11,105
10,132
10,410
11,567

400
400
400
400

2,267
1,983
2,239
2,083
2,409
2,734

1,343
1,258
1,349
2,984
3,171
3,129

91,554
91,367
91,617
90,971
91,302
93,967

11,567
11,567
11,567
11,567
11,567
11,630

400
400
400
400
400
400

8,905
8,951
8,992
9,041
9,113
9,179

2,456
2,079
1,994
2,061
1,877
2,046
1,935

3,391
3,419
3,142
3,237
3,039
3,098
3,100

93,002
91,168
90,819
93,214
97,845
95,119
94,168

11,647
11,626
11,620
11,620
11,620
11,620
11,620

400
400
400
400
429
500
500

9,235
9,284
9,362
9,410
9,464
9,536
9,612

34
17

1,681
1,750

121

2 ,2 2 0

3,424
3,347
2,629
2,735

98,377
97,446
98,458
97,606

11,620
11,620
11,620
11,620

400
400
400
486

9,435
9,456
9,462
9,469

110

60
271
261

2,956
3*239
4*322
4*629
5*396
6,841
7,145
7,611
8,293
8 ,6 6 8

Week ending—
1975—May

7 .........................
14.........................
2 1 .........................

June

July

324
1,425

84

1,821

84
38
77
188

2,159
2,132
1,953

3,061
3,026
3,140
3,165

96,905
92,044
93,315
95,949

11,620
11,620
11,620
11,620

500
500
500
500

9,561
9,527
9,538
9,542

871

1,887
2,260
2,131
1,852
1,432

3,010
3,007
3,050
3,125
3,246

98,243
95,272
93,566
94,047
93,491

11,620
11,620
11,620
11,620
11,620

500
500
500
500
500

9,573
9,569
9,618
9,630
9,641

24
561
178

1,811
1,791
1,2 2 0

2,984
2,997
3,196

96,712
95,926
92,245

11,620
11,620
11,620

500
500
500

9,669
9,687
9,647

21
20

2,188
2,342
2,140
2,118

3,319
3,417
2,672
2,939

98,051
98,079
102,015
100,751

11,620
11,620
11,620
11,620

400
400
400
500

9,453
9,460
9,468
9,475

1,100

2,890
2,573
3,039
2,059

3,011
3,149
3,141
3,070

96,188
91,514
96,508
100,492

11,620
11,620
11,620
11,620

500
500
500
500

9,481
9,538
9,538
9,553

272
80
1,132
1,999
147

2,078
2,849
2,241
2,143
1,823

2,932
3,064
3,076
3,222
3,238

96,000
91,162
96,498
96,775
93,982

11,620
11,620
11,620
11,620
11,620

500
500
500
500
500

9,562
9,612
9,627
9,637
9,647

382
253

2 ,1 2 2

End of month
1975—M ay................................
June................................
July2*...............................
Wednesday
1975—May

7.........................
14.........................
2 1 .........................

28.........................
June

July

4 .........................

11 .........................

860

514
1,640
1,031
952

728
481
457
115
374

1 Includes Federal agency issues held under repurchase agreements
beginning Dec. 1, 1966, and Federal agency issues bought outright be­
ginning Sept. 29, 1971.
2 Includes, beginning 1969, 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.
3 Beginning with 1960 reflects a minor change in concept; see Feb.
1961 B u l l e t i n , p. 164.
4 Beginning Apr. 16, 1969, “Other F.R. assets” and “Other F.R.
liabilities and capital” are shown separately; formerly, they were netted
together and reported as “Other F.R. accounts.”
5 Includes industrial loans and acceptances until Aug. 21, 1959, when
industrial loan program was discontinued. For holdings o f acceptances




on Wed. and end-of-month dates, see table on F.R. Banks on p. A-10.
See also note 3.
6 Includes certain deposits o f domestic nonmember banks and foreignowned banking institutions held with member banks and redeposited in
full with F.R. Banks in connection with voluntary participation by non­
member institutions in the Federal Reserve System’s program o f credit
restraint.
As of Dec. 12, 1974, the amount o f voluntary nonmember and foreign
agency and branch deposits at F.R. Banks that are associated with margi­
nal reserves are no longer reported. However, deposits voluntarily held
by agencies and branches o f foreign banks operating in the United States
as reserves and Euro-dollar liabilities are reported.
Notes continued on opposite page.

AUGUST 1975 o BANK RESERVES AND RELATED ITEMS

A 3

MEMBER BANK RESERVES, FEDERAL RESERVE BANK CREDIT, AND RELATED ITEMS— Continued
(In millions o f dollars)

Factors absorbing reserve funds

Desposits, other
than member bank
reserves
with F.R. Banks

Cur­
rency
in
cir­
cula­
tion

Treas­
ury
cash
hold­
ings

7,609
10,985
28,452
27,806
33,019

2,402
2,189
2,269
1,290
408

616
592
625
615
522

53,591
57,013
61,060
66,060
71,646

656
427
453
350
323

74,556
74,709
75,098
75,654
77,029
78,951

Treas­
ury

For­
eign

Other 3,6

Other
F.R.
ac­
counts 4

Other
F.R.
lia­
bilities
and
capital4

Member bank
reserves
Period or date
With
F.R.
Banks

Cur­
rency
and
coin 7
Averages of daily figures

248
292
493
739
1,029

2,595

11,473
12,812
16,027
17,391
19,283

......................... 1939—Dec.
......................... 1941—Dec.
. . . . j ...............1945— Dec.
..........................1950—Dec.
..........................1960—Dec.

4,960
5,340
5,676
6,095
6,635

28,031
29,265
31,329
31,353
35,068

......................... 1969— Dec.
......................... 1970— Dec.
........................1971—Dec.
....................... 1972—Dec.
....................... 1973—Dec.

30,514
30.264
30,156
29,985
29,898
29,767

6,824
6,765
6,920
6,811
6,939
7,174

37,338
37,029
37,076
36,796
36,837
36,941

....................... 1974—July
....................................Aug.
.................................... Sept.
....................................Oct.
....................................Nov.
....................................Dec.

3,264
3,358
3,076
3,137
3,231
3,191
3,135

29,713
28,503
27,948
28.264
27,576
28,007
27,466

7,779
7,062
6,831
6,870
6,916
6,969
7,216

37.492
35,565
34,779
35,134
34.492
34,976
34,682

....................... 1975—Jan.
.................................... Feb.
.....................................Mar.
......................................Apr.
.....................................May
...................................... June
...................................... July**

688

472
697
911

3,141
3,125
3,278
3,313

28,098
27,212
28,233
27,444

7,139
7,305
6,469
6,765

35,237
34,517
34,702
34,209

................. 1975—May 7
.......................................... 14
.......................................... 21
...........................................28

285
258
306
243

1,294
1,108
1,069
823

3,297
3,009
3,135
3,258

27,618
26,627
27,861
28,008

6,893
7,080
7,076
6,698

34,511
33,707
34,937
34,706

............................... June 4
.......................................... 11
...........................................18
...........................................25

5,774
3,393
1,198
1,370
1,830

274
264
296
240
262

729
729
676
690
711

3,323
3,016
3,110
3,147
3,237

28,376
27,294
27,502
28,244
27,562

7,105
7,318
7,362
6,718
7,451

35,481
34,612
34,864
34,962
35,013

............................... July 2
.............................................9
...........................................16
...........................................23 v
...........................................30*>

373
364
370

7,036
5,773
2,675

310
373
369

1,159
701

686

3,396
3.354
3.354

26,445
25,976
25,227

6,893
7,105
7,548

33,338
33,081
32,775

......................... 1975—May
.......................................June
...................................... Julyp

78,989
79,382
79,400
79.972

330
329
338
321

9,162
6,871
7,017
7,687

257
253
253
294

482
482
694
1,318

3.080
3,187
3,342
3,392

27,223
29,055
32,459
29,362

7,139
7,305
6,469
6,765

34,362
36,360
38,928
36,127

...................1975— May 7
...........................................14
........................................... 21
...........................................28

80,251
80,935
80,879
80.972

390
383
370
370

1,858
1,057
2,639
5,497

254
254
295
294

1,098
1,165
885
741

3,027
3.080
3,207
3,452

30,911
26,298
29,891
30,839

6,893
7,080
7,076
6,698

37,804
33,378
36,967
37,537

................................June 4
........................................... 11
........................................... 18
...........................................25

81.708
82,372
82,193
81.709
81,478

369
370
354
349
370

5,291
1,381
597
1,333
1,386

253
239
224
276
284

765
694
673
795
574

2,877
3,022
3,193
3,171
3,339

26,418
24,817
31,011
30,899
28,318

7,105
7,318
7,362
6,718
7,451

33,523
32,135
38,373
37,617
35,769

................................July
2
.............................................9
...........................................16
23^
...........................................30 p

11,473
12,812
16,027
17,391
16,688
2,192
2.265
2,287
2,362
2,942

23,071
23,925
25,653
24,830
28,352

773
831
766
869
770
874

3,216
3,240
3,345
3,260
3,149
3.266

336
317
363
307
262
272
269

884
711
958
718
746
989
711

8,960
8,419
7,947
7,474

232
277
258
266

373
380
363
370

5,815
1,833
1,464
4,224

81,094
81,898
82,164
81,761
81,287

366
367
358
345
364

79,782
81,196
81,331

739
1,531
1,247
920
250

353
495

1,194
849
1.926
1,449
1,892

146
145
290
272
406

458
735
728
631
717

275
283
303
315
302

2,795
2,633
2,451
1,601
864
1,741

296
326
456
294
370
357

236
277
309
326
355
359

2,087
2,374
1,887
3,532
8,115
3,353
2,207

78,405
79,095
79,203
79,439

307
323
324
333

79,904
80,476
80,775
80,685

77,780
76,979
77,692
78,377
79,102
80,607
81,753

220
221

Week ending—

End of month

Wednesday

7 Part allowed as reserves Dec. 1, 1959—Nov. 23, 1960; all allowed
thereafter. Beginning Jan. 1963, figures are estimated except for weekly
averages. Beginning Sept. 12, 1968, amount is based on close-of-business
figures for reserve period 2 weeks previous to report date.
8 Beginning with week ending Nov. 15, 1972, includes $450 million o f
reserve deficiencies on which F.R. Banks are allowed to waive penalties
for a transition period in connection with bank adaptation to Regulation J




..........................

as amended effective Nov. 9, 1972. Beginning 1973, allowable deficiencies
included are (beginning with first statement week o f quarter): Q l, $279
million; Q2, $172 million; Q3, $112 million; Q4, $84 million. Beginning
1974, Q l, $67 million, Q2, $58 million. Transition period ended after
second quarter, 1974.
For other notes see opposite page.

A4

BANK RESERVES AND RELATED ITEMS □ AUGUST 1975
RESERVES AND BORROWINGS OF MEMBER BANKS
(In millions o f dollars)
All member banks

Large banks 2
All other banks

Period

Borrowings

New York City

City of Chicago

Excess

Excess

Total
held 1

Re­
quired

Excess 1

1939—D ec..
1941—D e c..
1945—D e c ..
1950—D e c ..

11,473
12,812
16,027
17,391

6,462
9,422
14,536
16,364

5,011
3,390
1,491
1,027

3
5
334
142

2,611
989
48
125

1960—Dec..
1965—Dec..

19,283
22,719

18,527
22,267

756
452

87
454

29
41

1967—Dec..
1968—Dec..
1969—Dec..
1970—Dec..
1971—Dec..

25,260
27,221
28,031
29,265
31,329

24,915
26,766
27,774
28,993
31,164

345
455
257
272
165

238
765
1,086
321
107

1972—Dec..
1973—Dec..

31,353
35,068

31,134
34,806

219
262

1,049
1,298

41

-2 3

1974—J u ly .,

37,338
37,029
37,076
36,796
36,837
36,941

37,161
36,851
36,885
36,705
36,579
36,602

177
178
191
91

149
165
139
117
67
32

45
-5 8
133
-4 9

339

3,308
3,351
3,287
1,793
1,285
703

37.492
35,565
34,779
35,134
34.492
34,976
34,682

37,556
35,333
34,513
35,014
34,493
34,428
34,687

-6 4
232
266

390
147
106

10

13

548
-5

60
271
261

11

37,274
36,868
37,824
37,417
37,204

36,905
36,590
37,840
37,302
37,020

369
278
-1 6
115
184

37,588
37,312
38,207
38,265
37,240

37,011
37,175
38,249
38,079
37,066

12.

36,974
36,029
35,118
34,606

5.

Aug..

Sept.,
Oct..,
Nov.

Dec..
1975—Jan...
Feb...
M ar..
Apr...
M a y .,
June..
July?.

Total

Sea­
sonal

18
100

56
34
25
-2 0

Borrow­
ings

192
58
19
111

Borrow­
ings

540
295
14

671
804

96
50

1,011

663

3
4
46
29

8

100

23

20

67

228

623
330

40
92

50
90

105
270
479
264

80
180
321
28
42

1

40
230
259
25
35

15
18
7

13
85
27
4

1

8

42
-3 5

22

267
250
177
189
174

301
74

13
43

55
28

-4 2
28

429
761

-1 6 0
133

264
435

19

70
23
17
36
14
18

-1 2

78
-7 7
36
90
39

848
860
792
569
566
323

125
152
115

933
1,004
816

138
163

448
282

23

-9 1
41
56
-4
-8 9
217
-2 4 5

87
29
28
38
13
114
60

162
143
137
115
137
142
110

131
71
46
33
23
65
124

137
52
15
80
38

72
84
-7 4
81
13

878
432
786
1,108
1,086

177
103
107
58
137

1,008
817
838
915
1,135

69

223
-2 6
-8 9
45
-2 4

218
107
108
130
33

301
135
176

260
168
115
136
109

12

8

-1 6
17

22

20

10
10

-2 3

14

-2 1

17

25
24
90
54

3,435
2.640
3,175
3.641
3,690

127
136
150
156
163

9
90
-7 5
17
33

1,412
1,339
1,536
1,538
1,431

577
137
-4 2
186
174

561
311
609
594
142

24
18

-8

36,579
35,970
34,960
34,447

395
59
158
159

90
229
180

34,795
34,482
34.510
34,819

34,386
34,252
34,490
34,675

409
230

20

70
60
167
155

35,087
34,663
35,295
35,249
35,495

34,808
34,552
35,076
35,179
35,306

279

51
30

219
70
189

165
241

35,237
34,517
34,702
34,209

34,926
34,518
34,631
34,045

311

34
17

34.511
33,707
34,937
34,706

34,177
33,743
34,603
34,615

35,481
34,612
34,864
34,962
35,013

35,085
34,479
34,791
34,693
34,718

110

Borrow­
ings

5

156
37

120
-1

Excess

8

-1 1 9
31
53
32
-2 8
142
-7 5

7
7
9

Borrow­
ings

4
15

-1 8
38
5

-8

132

Excess

1,188
1,303
418
232

1,457
1,464
1,662
502
257
80

258

Other

6
20

47
24

16

2

6

122

686

Week ending—
1974—July

1975—Jan.

1.
15.

22.
29.

5.

19.
26.
Mar.

12.

19.
26.
Apr.

2.

9.
16.
23.
30.
May

7.
14.

21.
28.
June

4.

11.

18.
25.
July

2......

9 ...........
16...........
23p ........
30p ........

144

111

-1 5

29

9
7

117

7

-9 6
54

4
15
-3 7
16

6

22

133
-3 7

-1 1

84

84
38
77
188

18
-7 6
80
19

396
133
73
269
295

871

57
18
-7 2
90

222
202
382
253

33
6

122

-3 0
62
25
-3

68

1
1

-1 3

140

334
-3 6
334
91

1 Beginning with week ending Nov. 15, 1972, includes $450 million of
reserve deficiencies on which F.R. Banks are allowed to waive penalties
for a transition period in connection with bank adaptation to Regulation J
as amended effective Nov. 9, 1972. Beginning 1973, allowable deficiencies
included are (beginning with first statement week o f quarter): Q l, $279
million; Q2, $172 million; Q3, $112 million; Q4, $84 million. Beginning
1974, Q l, $67 million; Q2, $58 million. Transition period ended after
second quarter, 1974. For weeks for which figures are preliminary, figures
by class o f bank do not add to the total because adjusted data by class are
not available.
2 Beginning Nov. 9, 1972, designation o f banks as reserve city banks




1

61
-2 7

55
-1 3 0
29
71

121

71
164

26
-4 1

12
12
10
11
10
11
10

177
-1 0 6
-3 3
53

-1

83
36
317
328

111
1

88
8

42
67

-2 0
-2 2

7
15
-1 4
16
1

39

19
-3 2

49
97

12

189
78
151

110

19
36
58

198
113
143

44

-2 0
10
-1 2

8

25
37

99
-5 1
36
-2 3
56
-5
-1 7
-3 4
-5

11

39
33
63

69
69
70

121

10

-4
-2 0
2

86

198

15
71

-2 6
9
4

61

145

20

90

21

98
9

84
-5
-1 8
35

111

140

137
-5 5
69
5
117

54
50

-2 0
6

-9 0
-1 4

86

60
41
43
45

7
4
77
71

203
85
172
80
143

1
2

118
148
129

54

112

21
21

2

160
127
173
71

23
25
28
53

183
155
137
73

214
132
54
134
162

38
468
90
16
47
91

102

43
23
18
21
66

34
16

for reserve-requirement purposes has been based on size of bank (net
demand deposits o f more than $400 million), as described in the B u l l e t i n
for July 1972, p. 626. Categories shown here as “Large” and “All other”
parallel the previous “Reserve city” and “Country” categories, respectively
(hence the series are continuous over time).
N o t e . — Monthly and weekly data are averages of daily figures within
the month or week, respectively.
Borrowings at F.R. Banks: Based on closing figures.
Effective Apr. 19, 1973, the Board’s Regulation A, which governs lend­
ing by F.R. Banks, was revised to assist smaller member banks to meet
the seasonal borrowing needs of their communities.

AUGUST 1975 □ MONEY MARKET BANKS

A 5

BASIC RESERVE POSITION, AND FEDERAL FUNDS AND RELATED TRANSACTIONS
(In millions o f dollars, except as noted)
Basic reserve position

Interbank Federal funds transactions

Gross transactions
Reporting banks
and
week ending—

Excess
re­
serves 1

Bor­
rowings
at F.R.
Banks

Net
inter­
bank
Federal
funds
trans.

Per cent
of
Surplus
avg.
or
deficit required
reserves

Pur­
chases

Sales

Related transactions with
U.S. Govt, securities dealers

Net transactions
Total
two-way
trans­
actions2

Pur­
chases
o f net
buying
banks

Sales
o f net
selling
banks

Loans
to
dealers 3

Bor­
row­
ings
from
dealers4

Net
loans

Total—46 banks
1975—June

4 ...........
1 1 ...........

1 8 ...........
2 5 ...........
July

2 ...........
9 ...........
16...........
2 3 ...........
3 0...........

19,745
22,227
22,029
21,050

5,679
4,881
4,917
5,438

5,166
4,477
4,457
4,356

14,579
17,751
17,572
16,694

513
404
460
1,082

3,198
4,597
3,938
2,730

649
533
389
725

2.548
4.005
3.549
2.005

86.6 20,100
22,688
22,263
18,962
18,494

6,474
5,909
4,916
4,566
5,204

4,847
5,310
4,671
4,375
4,550

15,253
17,378
17,592
14,587
13,945

1,627
599
244
191
655

2,139
2,957
3,083
2,195
1,616

629
542
601
664
641

1,511
2,415
2,483
1,531
975

72.7
103.0
91.7
95.2

5,570
7,110
6,773
6,683

906
767
797
730

906
560
742
730

4,665
6,550
6,031
5,952

206
54

1,393
1,671
1,774
1,269

241

220
181
273

1,152
1,451
1,593
996

-5 ,6 5 2
-6 ,5 9 3
-6 ,5 8 2
- 4 ,7 5 9
-4 ,3 0 6

86.3
103.1
100.3
74.3
68.3

6,074
7,451
7,208
5,347
5,186

531
789
737
676
763

531
789
737
674
764

5,544
6,662
6,471
4,673
4,422

1,087
1,356
1,386
981

271
294
292
340
343

816
1,063
1,095
860
637

9,401 -9 ,2 9 5
11,003 -1 0 ,9 5 7
11,135 -11,131
9,659 -9 ,6 3 9

100.4
119.4
117.5

4,773
4,114
4,121
3,626

4,260
3,916
3,715
3,626

11,201

102.8

14,175
15,117
15,256
14,367

513
198
406
1,082

1,805
2,927
2,165
1,461

409
313
208
451

1,397
2,614
1,956

8,083 -8 ,2 6 7
10,117 -1 0 ,1 2 4
10,877 -1 0 ,9 2 8
9,725 - 9 ,7 7 3
8,868 -8 ,7 8 5

86.9
108.7
115.3
104.4
93.5

14,026
15,238
15,055
13,615
13,309

5,943

9,709
10,716

4,179
3,701
4,441

4,317
4,522
3,934
3,701
3,786

1,627
599
244
189
655

1,052
1,601
1,697
995
636

357
248
309
324
298

695
1,353
1,388
671
338

123
4
23
84

61
13
49
124

14,066
17.347
17,112
15,612

-14,005
-17,355
-17,137
-15,652

210
121

503
58
132
205

13,626
16,779
17.347
14,396
13,290

-13,919
-16,717
-17,510
-14,532
-13,091

106.5
109.1
92.2
83.4

4,665
6,343
5,977
5,953

-4 ,7 0 9
- 6 ,3 9 9
-6 ,0 0 6
-6 ,0 1 3

5,544
6,662
6,471
4,671
4,422

-3 1
69

200

1

89.0

112.8
106.9
99.7

8 in New York C ity
1975—June

1 8 ...........
2 5 ...........

17
-5 5
19
37

2 ...........
9 ...........
16...........
2 3 ...........
3 0 ...........

81
70
-3 3
63
116

4 ...........
1 1 ...........

July

189
78
151

1,200

38 outside
New York City
1975—June

4 ...........
1 1 ...........

1 8 ...........
2 5 ...........
July

2 ...........
9 ...........
16...........
2 3 ...........
3 0 ...........

106
59
4
48
129
51

2

7
84

13
27
314
58
54
54

1

5,120

9.914

11,541
10,742

11,121
9.914
9,523

1,010

5 in City o f Chicago
1975—June

4 ...........
1 1 ...........
18 ...........
2 5 ...........

3,854
3,778
4,451
4,128

-3 ,8 3 0
-3 ,8 0 6
-4 ,4 4 5
-4 ,1 3 4

224.3
224.2
256.0
245.5

4,804
4,477
5,079
4,852

950
698
628
723

941
689
621
723

3,863
3,787
4,459
4,129

332
509
423
364

332
509
423
364

July

2 ...........
9 ...........
16...........
2 3 ...........
3 0 ...........

3,824
4,377
4,613
4,233
3,948

-3 ,7 8 9
-4 ,3 8 6
-4 ,6 7 0
-4 ,2 7 7
-3 ,9 2 0

219.7
265.1
268.3
257.7
239.1

4,690

5,221

5,303
4,960
4,862

865
844
691
727
914

865
833
689
727
913

3,825
4,388
4,614
4,233
3,949

278
413
508
374
235

278
413
508
374
235

5,547
7,225
6,684
5,531

-5 ,4 6 6
-7,1.51

-6,686
-5 ,5 0 5

72.4
95.6
86.4
71.6

9,371
10,641
10,176
9,516

3,823
3,416
3,492
2,903

3,319
3,227
3,094
2,903

6,052
7,413
7,082
6,613

504
189
398
1,082

1,473
2,418
1,742
1,096

409
313
208
451

1,064
2,105
1,533
645

4,258
5,740
6,264
5,493
4,920

-4 ,4 7 9
-5 ,7 3 8
-6 ,2 5 8
-5 ,4 9 6
-4 ,8 6 5

57.5
75.0
80.9
71.4
62.7

9,336
10,016
9,752
8,655
8,447

3,451
4,276
3,488
2,973
3,526

3,451
3,688
3,245
2.973
2.973

5,885
6,328
6,507
5,682
5,574

1,627
588
243
189
654

774
1,188
1,189
621
401

357
248
309
324
298

417
940
880
297
103

33 others
1975—June

4 ...........

1 1 ...........

1 8 ...........
2 5 ...........
July

82
76

-2

2 ...........
9 ...........
16...........
2 3 ...........
3 0 ...........

53

93
60

6
1

56

314
58

1 Based upon reserve balances, including all adjustments applicable to
the reporting period. Prior to Sept. 25, 1968, carryover reserve deficiencies,
if any, were deducted. Excess reserves for later periods are net o f all carry­
over reserves.
2 Derived from averages for individual banks for entire week. Figure
for each bank indicates extent to which the bank’s weekly average pur­
chases and sales are offsetting.
3 Federal funds loaned, net funds supplied to each dealer by clearing




banks, repurchase agreements (purchases o f securities 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 o f securities to
dealers subject to repurchase), resale agreements, and borrowings secured
by Govt, or other issues.
N o t e . —Weekly averages o f daily figures. For description o f series
and back data, see Aug. 1964 B u l l e t i n , pp. 944-74.

A 6

F.R. BANK INTEREST RATES □ AUGUST 1975

CURRENT RATES
(Per cent per annum)
Loans to member banks—
Under Sec. 10(b)2

Loans to all others under
last par. Sec. 134

Under Secs. 13 and 13a1
Federal Reserve
Bank

Special rate 3

Regular rate
Rate on
7/31/75

Effective
date

Previous
rate

Rate on
7/31/75

Effective
date

Previous
rate

6

5/16/75
5/16/75
5/16/75
5/16/75
5/16/75
5/16/75
5/16/75
5/16/75
5/23/75
5/16/75
5/16/75
5/16/75

614
614
614

61/2
61/2
61/2
61/2
61/2
61/2
61/2
61/2
61/2
61/2
61/2
61/2

5/16/75
5/16/75
5/16/75
5/16/75
5/16/75
5/16/75
5/16/75
5/16/75
5/23/75
5/16/75
5/16/75
5/16/75

634
634
634
634
63/4
634
634
634
634
634
63/4
634

Boston......................
New York...............
Philadelphia...........
Cleveland.................
Richmond...............
Atlanta.....................
Chicago...................
St. L ouis..................
Minneapolis............
Kansas C ity............
D allas.......................
San Francisco.........

6
6
6
6
6
6
6
6
6
6
6

61/4

614
614
614
614
61/2

614
61/4

614

1 Discounts o f 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 o f the F.R. Bank. Advances
secured by mortgages on 1- to 4-family residential property are made at
the Section 13 rate.

Rate on
7/31/75
7
7
7
7
7
7
7
7
7
7
7
1

7

Effective
date 3

Previous
rate

Rate on
7/31/75

Effective
date

7/2/75
6/24/75
6/9/75
6/9/75
6/9/75
6/3/75
6/9/75
7/15/75
6/9/75
7/9/75
6/9/75
6/24/75

71/2
7Vi

9
9
9
9
9
9
9
9
9
9
9
9

3/10/75
3/10/75
3/10/75
3/10/75
3/10/75
3/10/75
3/14/75
3/14/75
3/10/75
3/10/75
3/14/75
3/10/75

71/2

m
7Vi
m

71/2

m
7 Vi
m
m
m

3 Applicable to special advances described
Regulation A.
4 Advances to individuals, partnerships, or
member banks secured by direct obligations
guaranteed as to principal and interest by,
agency thereof.

Previous
rate
91/2

914
91/2

91/2
91/2

9Vi
9^
91/2

9 Vi
91/4
91/2
91/2

in Section 201.2(e)(2) o f
corporations other than
of, or obligations fully
the U.S. Govt, or any

SUMMARY OF EARLIER CHANGES
(Per cent per annum)
Range
(or level)—
All F.R.
Banks

F.R.
Bank
of
N.Y.

In effect Dec. 31, 1955........

2Vi

21/2

1956—Apr. 13......................
20......................

21/2-3
234-3
234-3
3

23/4
23/4
3
3

,

Effective
date

31......................
23......................
Nov. 15......................
Dec. 2 ......................

3 -3Vi
31/2
3 -3Vi
3

1958—Jan. 22.....................
24......................
Mar. 7 ......................
13......................
21......................
Apr. 18......................
May 9 ......................
Aug. 15......................
Sept. 12.....................
23......................
Oct. 24......................
Nov. 7 ......................

234-3
234-3
214-3
21/4-23,4

1959—Mar.

21/2-3
3
3 -3Vi
31/2
3!/2-4
4
3Vi-4
31/2-4

May
June
Sept.
1960—June
Aug.
Sept.
1963—July

6 .....................
16......................
29......................
12.....................
11......................
18......................
3......................
10......................
14......................
12......................
9 ......................
17.....................
26.....................

21/4

13/4-21/4
134
134-2
134-2
2
2 - 21/2
2Vi

31/2

3 - 31/2
3
3 -31/2
31/2

Range
(or level)—
All F.R.
Banks

F.R.
Bank
of
N .Y.

1964—Nov.
24.
1
30.

3Vi-4
4

4
4

1965—Dec.
1

4

4Vi
4Vi
4
4

Effective
date

6.
13.

3
3Vi
3
3

7.
14.
Nov. 20.
27.
1968— Mar. 15.

3
234
214
214
214
13/4

Apr. 19.
26.
Aug. 16.
30.
Dec. 18.

134
134

2
2
2
2i/4
3
3
31/2
31/2
4
4
4
31/2
31/2
3
3
31/2
31/2

-A pr.

22.

20.

1969—Apr.

4.

1970—Nov. 11.
13.
16.
Dec. 1.
4.

11.

1971—Jan.

8.
15.
19.

22.

29.
Feb. 13.
19.
July 16.
23.

N o t e . — Rates under Secs. 13 and 13a (as described in table and notes
above). For data before 1956, see Banking and Monetary Statistics, 1943,
pp. 439-42, and Supplement to Section 12, p. 31.




-4i/2
4 Vi
4 - 41/2
4
4 -4 Vi
41/2

414-5
5
5 -51/2

51/2

5 Vi-51/4
514

514-51/2
51/2
5Vi-6
6
5}4-6
53/4-6
53/4
5 Vi-5 3/4

51/2-534
51/2
5
5

514

-514
- 51/4
5
434-5
434
43/4-5
5

41/2
41/2

Effective
date

Range
(or level)—
All F.R.
Banks

1971—N ov. 11.....................
19.....................
Dec. 13.....................
17.....................
24.....................

434-5
434
41/2-434
41/2-434

1973—Jan. 15.....................
Feb. 26.....................
Mar. 2 .....................
Apr. 23.....................

5

534
53/4

51/2
51/2
51/4
51/4
51/4
5

5
5
434
5
5

5
434
43/4
41/2
41/2

5
-51/2
51/2
5i^-5!4
534
534-6
6
6 -6Vi
6Vi
7
7 -71,4
71/2

5
51/4
51/2

1974— Apr. 25.....................
3 0 ....................
Dec. 9 .....................
16.....................

714-8
8
734-8
734

8
8
734
734

1975—Jan.

71/ 4 - 73/4

73/4
714
71/4
634
634
6!/4

41/2
5

51/2
51/2
51/4
51/4
5Vi
51/2
6
6
6
53/4

41/2

F.R.
Bank
of
N .Y .

11.....................
18.....................
15.....................
July 2 .....................
Aug. 14.....................
23.....................

6 .....................
10.....................
24.....................
Feb. 5 .....................
7 .....................
Mar. 1 0....................
14.....................
May 16.....................
23.....................

In effect, July 31, 1 9 7 5 ....

714-734
714
634-71/4
634
61/ 4 -63 4
614
6 - 61/4

51/2

534
6
6
61/4
61/2

7

71/2

71/2

6

61/4
6
6

6

6

AUGUST 1975 □ RESERVE REQUIREMENTS

A 7

RESERVE REQUIREMENTS ON DEPOSITS OF MEMBER BANKS
(Deposit intervals are in millions o f dollars. Requirements are in per cent o f deposits.)
Net demand 2
Effective
date 1

Time 3
(all classes o f banks)

Reserve city

Other

Other time
Savings

Over 5

0-5
In effect
Jan. 1, 1963...........
1966—July 14?21
Sept. 8 ,1 5 . . . .
1967—Mar. 2 .............
Mar. 16..........
1968—Jan. 1 1 ,1 8 ....
1969—Apr. 17...........
1970—Oct. 1...............

0-5

Over 5

0-5

4

12

16^/2

Over 5

4

4

31/2
3

31/2
3

5
6

17
171/2

161/2
17

12
121/2

121/2

13

5
Beginning Nov. 9, 1972
Net demand 2, 4

Time 3
Other time

Effective
date
0-2

2 -1 0

10-100

100-400

Over
400

Savings

Over 5 5, maturing in—
0-5

1972—Nov. 9 .............
Nov. 16...........
1973

8

10

12

6 I 6 I/2

13

July 19.............

171/2

IOI/2

121/2

131/2

18

1974 —Dec. 1 2 ...........

7 3

71/2

10

12

13

I 61/2

In effect July 31, 1975

71/2

10

12

13

I 61/2

3

Present legal limits:
Net demand deposits, reserve city banks...........
Net demand deposits, other banks....................
Time deposits..........................................................
1 When two dates are shown, the first applies to the change at reserve
city banks and the second to the change at country banks. For changes
prior to 1963 see Board’s Annual Reports.
2 (a) Demand deposits subject to reserve requirements are gross de­
mand deposits minus cash items in process o f collection and demand
balances due from domestic banks.
(b) Requirement schedules are graduated, and each deposit interval
applies to that part o f the deposits o f each bank.
(c) Since Oct. 16, 1969, member banks have been required under
Regulation M to maintain reserves against foreign branch deposits
computed on the basis o f net balances due from domestic offices to their
foreign branches and against foreign branch loans to U.S. residents.
Since June 21, 1973, loans aggregating $100,000 or less to any U.S. resident
have been excluded from computations, as have total loans o f a bank to
U.S. residents if not exceeding $1 million. Regulation D imposes a similar
reserve requirement on borrowings from foreign banks by domestic offices
o f a member bank. The reserve percentage applicable to each o f these
classifications is 4 per cent. The requirement was 10 per cent originally,
was increased to 20 per cent on Jan. 7, 1971, was reduced to 8 per cent
effective June 21, 1973, and was reduced to the current 4 per cent effective
May 22, 1975. Initially certain base amounts were exempted in the com­
putation o f the requirements, but effective Mar. 14, 1974, the last of these
reserve-free bases were eliminated. For details, see Regulations D and M.
3 Effective Jan. 5, 1967, time deposits such as Christmas and vacation
club accounts became subject to same requirements as savings deposits.
For other notes see 2(b) and 2(c) above.
4 Effective Nov. 9, 1972, a new criterion was adopted to designate re­
serve cities, and on the same date requirements for reserves against net
demand deposits o f member banks were restructured to provide that each

180 days
and over
7 5

7 3

17%

1975 —Feb. 1 3...........




30-179
days

3

6

3

6

3

Minimum

Maximum

10

22

7
3

10

14

member bank will maintain reserves related to the size o f its net demand
deposits. The new reserve city designations are as follows: A bank having
net demand deposits o f more than $400 million is considered to have the
character o f business o f a reserve city bank, and the presence o f the head
office o f such a bank constitutes designation o f that place as a reserve
city. Cities in which there are F.R. Banks or branches are also
reserve cities. Any banks having net demand deposits o f $400 million or
less are considered to have the character o f business o f banks outside of
reserve cities and are permitted to maintain reserves at ratios set for banks
not in reserve cities. For details, see Regulation D and appropriate sup­
plements and amendments.
5 A marginal reserve requirement was in effect between June 21, 1973,
and Dec. 11, 1974, against increases in the aggregate o f the following types
of obligations: (a) outstanding time deposits o f $ 100,000 or more, (b)
outstanding funds obtained by the bank through issuance by a bank’s
affiliate o f obligations subject to existing reserve requirements on time
deposits, and (c) beginning July 12, 1973, funds from sales o f finance bills.
The requirement applied to balances above a specified base, but was not
applicable to banks having obligations o f these types aggregating less
than $10 million. For details, including percentages and maturity classifi­
cations, see “Announcements” in B u l l e t i n s for May, July, Sept., and
Dec. 1973 and Sept. and Nov. 1974.
6 The \6 l/ i per cent requirement applied for one week, only to former
reserve city banks. For other banks, the 13 per cent requirement was
continued in this deposit interval.
7 See columns above for earliest effective date o f this rate.
N o t e . —Required reserves must be held in the form o f deposits with
F.R. Banks or vault cash.

A 8

MAXIMUM INTEREST RATES; MARGIN REQUIREMENTS a AUGUST 1975
MAXIMUM INTEREST RATES PAYABLE ON TIME AND SAVINGS DEPOSITS
(Per cent per annum)
Rates July 20, 1966—June 30, 1973

Rates beginning July 1, 1973

Effective date
Type and size
ot deposit

July 20,
1966

Savings deposits...............
Other time deposits
Multiple maturity:2
30-89 days...........
90 days to 1 year.
1-2 years..............
2 years or m o re...
Single-maturity:
Less than $100,000:
30 days to 1 y ea r.,
1-2 years..............
2 years or m ore. .
$100,000 or more:
30-59 days............
60-89 days............
90-179 days.........
180 days to 1 year
1 year or more

Sept. 26,
1966

Effective date

Apr. 19,
1968

Jan. 21,
1970

Type and size
of deposit

4ft

Savings deposits.......................
Other time deposits (multipleand single-maturity):1, 2
Less than $100,000:
30-89 days........................
90 days to 1 year.............
1-2 f t years.......................
2 f t years or m ore...........
Minimum denomination
of $1,000:
4-6 years.......................
6 years or m ore...........
Governmental units........
$100,000 or m ore...............

4

4 ft
5
5 ft

5

5V4
5

5 ft

18

(3)
(3)
(3)
(3)
(3)

5 ft
5 ft

5V4

6
6%
6V4

5 ft

1

F o r e x c e p tio n s w ith r e s p e c t t o c e r ta in f o re ig n tim e d e p o s its , see
B u l l e t i n f o r F e b . 1968, p . 167.

2 Multiple-maturity time deposits include deposits that are automati­

cally renewable at maturity without action by the depositor and deposits
that are payable after written notice o f withdrawal.
3 Maximum rates on all single-maturity time deposits in denominations
o f $100,000 or more have been suspended. Rates that were effective
Jan. 21, 1970, and the dates when they were suspended are:
6 l/4
6 ft
6%
7
1 ft

30-59 days
60-89 days
90-179 days
180 days to 1 year
1 year or more

per
per
per
per
per

centl
cent f
cent j
cent [
centj

June 24, 1970
May 16, 1973

Rates on multiple-maturity time deposits in denominations o f $100,000
or more were suspended July 16, 1973, when the distinction between
single- and multiple-maturity deposits was eliminated.
4 Between July 1 and Oct. 31, 1973, there was no ceiling for certificates
maturing in 4 years or more with minimum denominations o f $1,000.
The amount o f such certificates that a bank could issue was limited to
5 per cent o f its total time and savings deposits. Sales in excess o f that

July 1,
1973

Nov. 1,
1973

Nov. 27,
1974

Dec. 23,
1974

5V2

5
5Vi

5
5 ft

6ft

6ft

5

5

6

5 ft

6

(4)
(5)
(3)

m

6ft

(5)
(3)

6

1V4
m

For credit extended under Regulations T (brokers and dealers),
U (banks), and G (others than brokers, dealers, or banks)
On margin stocks

1945— Feb.
July
1946—Jan.
1947—Jan.
1949— Mar.
1951—Jan.
1953— Feb.
1955—Jan.
Apr.
1958—Jan.
Aug.
Oct.
1960—July
1962—July
1963—Nov.
1968—Mar.

11
8
6
6
24

June
1970—May
1971—Dec.
1972—Nov.
1 1974—Jan.

1968— Mar.
June
1970—May
1971—Dec.
1972—Nov.

On convertible bonds

Ending
date

1937—Nov.
1
5
1945— Feb.
July
5
1946—Jan.
21
1
1947— Feb.
1949— Mar. 30
17
1951—Jan.
1953— Feb. 20
4
1955—Jan.
Apr. 23
16
1958—Jan.
Aug.
5
16
Oct.
1960—July
28
10
1962—July
1963—Nov.
6

4 ....................
3 1 ....................
16...................
3 ....................
2 2 ...................
15....................
9 ...................

5 ....................

O n s h o r t s a le s

(T)

40
50
75

50
50
75

100

100

75
50
75
50
60
70
50
70
90
70
50
70

75
50
75
50
60
70
50
70
90
70
50
70

70
80
65
55
65
50

50
60
50
50
50
50

70
80
65
55
65
50

N o t e . —Regulations G, T, and U, prescribed in accordance with the Securities Exchange Act o f 1934, limit the amount o f credit
Jo purchase and carry margin stocks that may be extended on securities as collateral by prescribing a maximum loan value, which is
a specified percentage o f the market value o f 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 o f Governors effective
Mar. 11, 1968.




1ft
m

(3>

N o t e . — Maximum rates that may be paid by member banks are estab­
lished by the Board o f Governors under provisions o f Regulation Q;
however, a member bank may not pay a rate in excess o f the maximum
rate payable by State banks or trust companies on like deposits under
the laws o f the State in which the member bank is located. Beginning
Feb. 1, 1936, maximum rates that may be paid by nonmember insured
commercial banks, as established by the FDIC, have been the same as
those in effect for member banks.
For previous changes, see earlier issues of the B u l l e t i n .

(Per cent o f market value)

Beginning
date

1V4

amount were subject to the 6 f t per cent ceiling that applies to time de­
posits maturing in 2 f t years or more.
Effective Nov. 1, 1973, a ceiling rate o f 7 ^ per cent was imposed on
certificates maturing in 4 years or more with minimum denominations
o f $1,000. There is no limitation on the amount o f these certificates that
banks may issue.
5 Prior to Nov. 27, 1974, no distinction was made between the time
deposits o f governmental units and o f other holders, insofar as Regula­
tion Q ceilings on rates payable were concerned. Effective Nov. 27, 1974,
governmental units were permitted to hold savings deposits and could
receive interest rates on time deposits with denominations under $100,000
irrespective o f maturity, as high as the maximum rate permitted on such
deposits at any Federally insured depositary institution.

MARGIN REQUIREMENTS
Period

(3>

6
6ft

AUGUST 1975 □ OPEN MARKET ACCOUNT

A 9

TRANSACTIONS OF THE SYSTEM OPEN MARKET ACCOUNT
(In millions o f dollars)
Outright transactions in U.S. Govt, securities, by maturity (excluding matched sale-purchase transactions)
Treasury bills1

Others within 1 year2

1-5 years

5-10 years

Over 10 years

Period
Gross
pur­
chases

Gross Redemp­
sales
tions

Gross
pur­
chases

11,074
8,896
8,522
15,517
11,660

5,214
3,642
6,467
4,880
5,830

2,160
1,064
2,545
3,405
4,550

99
1,036
125
1,396
450

1974— June.
Ju!y..
Aug..
Sept..
Oct...
N ov..
D e c ..

614
988
1,652
717
547
1,422
973

211

954

204

48
27

1,110

786
1,063
107

1975—Jan...
Feb..
Mar..
A pr..
M ay.
June.

341
357
760
2,119
903
421

197
197
197
197
197

0
1
2
3
4

850
565

273
426

6

600
900
487
506
407
612

945
460
156
318
354
161

Gross Exch. or Gross
sales maturity
pur­
shifts
chases

-3 ,4 8 3
- 6 ,4 6 2
2,933
-1 4 0
- 1 ,3 1 4

5,430
4,672
- 1 ,4 0 5
- 2 ,0 2 8
-6 9 7

-1 ,8 4 5
685
- 2 ,0 9 4
895
1,675

848
1,338
789
579
797
34
53

78
9

-200

65

148
85

-1,623
126

92
123

1,757
-1 2 6

78
53

-4 6 5

20

2,437
-1 ,4 9 4

305
129
361
485

-2 ,8 3 6
194

61
113
450
274

249

212

488

6,635
-5 2 9

-3,131
691

Matched
sale-purchase
transactions
(U.S. Govt,
securities)

Gross
sales

Gross
pur­
chases

Repurchase
agreements
(U.S. Govt,
securities)
Gross
pur­
chases

2,160
2,019
2,862
4,592
4,682

12,177
16,205
23,319
45,780
64,229

12,177
16,205
23,319
45,780
62,801

33,859
44,741
31,103
74,755
71,333

33,859
43,519
32,228
74,795
70,947

4,988
8,076
-3 1 2
8,610
1,984

1974— June.
July.
Aug..
Sept. ,
O ct..,
Nov..
D ec..

790
1,113
1,652
893
547
1,765
1,254

954

211

204

4,580

1,110

786
1,063
238

4,580
2,587
9,061
9,420
12,574
6,880
8,855

11,287
9,782
12,516
6,404
7,962

6,124
4,269
2,096
3,551
4,618
6,990
11,470

6,667
4,965
2,096
3.551
4,618
11,895

-9 1 1
-2,381
3,028
-9 6
-1 ,6 8 4
1,647
-4 9 8

1975- -Jan..
Feb..
Mar.
Apr..
May.
June.,

746
673
3.362
3,189
953
1,217

9,237
7,167
15,933
12,375
2,996
12,914

10,367
6,634
16,763
12,216
3,044
13,026

9,260
11,267
5,011
12,774
19,489
15,219

8,748
10,305
6,928
8.551
21,952
16,810

844
-2 5 8
332
6,428
-2 ,2 2 4
-8 7 3

850
565

273
426

945
460
156
318
354
161

6

600
900
1,788
506
407
450

1 Before Nov. 1973 B u l l e t i n , included matched sale-purchase trans­
actions, which are now shown separately.
2 Includes special certificates acquired when the Treasury borrows
directly from the Federal Reserve, as follows: June 1971, 955; Sept. 1972,
38; Aug. 1973, 351; Sept. 1973, 836; Nov. 1974, 131; Mar. 1975, 1,560.

6,121

-130
37
25

200

26
74

150

164

’298

-3 ,8 0 1
109

180

Gross
pur­
chases

Gross
sales

5,214
3,642
6,467
4 ,f
5,830

0
1
2
3
4

53

Outright

12.362
12,515
10,142
18,121
13,537

197
197
197
197
197

1,940

Federal agency obligations

Net
change
in U.S.
Govt,
securi­
ties

150
250
87
205

16
36

1,057

200

-102

93
311
167
129
196

22

20

Redemp­
tions

249
933
539
500
434

Gross Exch. or
sales maturity
shifts

-2 ,8 6 7

14

Period
Gross
sales

Gross Exch. or Gross
pur­
sales maturity
shifts
chases

1,579
148
50

Total outright1

Gross
pur­
chases

Exch.,
Gross maturity Gross
sales shifts, or pur­
redemp­ chases
tions

Sales or
redemp­
tions

485
1,197
865
3,087

370
239
322

309
761
238
207

72
35
3
16

Repur­
chase
agree­
ments,
net

Bankers
acceptances,
net
Net
change 3
Repur­
chase
agree­
ments

Out­
right

-6
22
-2

101
-88

511

-3 7 2
-2 7 0

121

-7 0
-2 0 7

-100

187
-185
218

3,322
322
-1 ,9 7 0
2,739
393

103

-136
39
-323
496
-375

387
309
-1 3 6
7,829
-3 ,2 0 7
-1 ,3 1 7

369
142

331
360

174
188

-409
246
-347
883
-567
-255

376

8,866

29
469

59
40

210

4,982
181
-1 4 5
-3 6
420

-9

-12

-5
24
55
-6 2

201

-121

272
9,227
6,149
-1 ,1 1 5

- 2,011

3 Net change in U.S. Govt, securities, Federal agency obligations, and
bankers’ acceptances.
N o t e . — Sales, redemptions, and negative figures reduce System hold­
ings; all other figures increase such holdings. Details may not add to
totals because of rounding.

CONVERTIBLE FOREIGN CURRENCIES HELD BY FEDERAL RESERVE BANKS
(In millions o f U.S. dollar equivalent)
Pounds
sterling

Belgian
francs

1970............................................
1971............................................
1972.............................................
1973.............................................

257
18
192
4

154
3
*
*

*
3
*

*
*
*
*

98
2
164
*

1
1
1
1

1974— M ay.......................
June................................
July.................................
Aug.................................
Sept.................................
Oct..................................
N ov.................................
D ec.................................

63
90
8
220
242
190
40
2

*
*
*
*
*
*
*
*

5
5
1
•
*
1
*
*

*
*
*
*
*
*
*
*

57
84
6
39
61
8
38
1

1
1
1
1
1
1
1
1

1975—Jan..................................
F e b ...............................
Mar................................
Apr.................................

2
2
19
2

*
*
*
*

*
*
*
*

*
*
*
*

1
1
17
*

1
1
1
1




Canadian
dollars

French
francs

German
marks

Italian
lire

Japanese
yen

Total

End o f period

Mexico
pesos

Nether­
lands
guilders
*
20

180
180
180

Swiss
francs

4
8
6
3

A 10

FEDERAL RESERVE BANKS o AUGUST 1975
CONSOLIDATED STATEMENT OF CONDITION OF ALL FEDERAL RESERVE BANKS
(In millions o f dollars)
Wednesday

End o f month

1975

Item
July 30

July 23

1975

July 16

July 9

July 2

July 31

1974

June 30

July 31

Assets
11,620
500

Gold certificate account....................................
Special Drawing Rights certificate account.
Cash........................................................... .
Loans:
Member bank borrowings...............
Other.....................................................
Acceptances:
Bought outright..................................
Held under repurchase agreements.
Federal agency obligations:
Bought outright...................................
Held under repurchase agreements.
U.S. Govt, securities:
Bought outright:
B ills..............................
Certificates—Special.
O ther..
N o te s...........................
Bonds......................... .
Total bought outright........................
Held under repurchase agreements.

11,620
500

11,620
500

11,620
500
315

11,620
500

11,620
500

11,620
500

11,460
400

351

338

360

201

272

178

561

3,589

690

685

682

218

5,083

5,085
61

3,585

37,020

34,475

37,172

35,464

42,886
4,522

42,886
4,522

42,886
4,522

42,886
4,522

39,781
2,858

i 82,645
1,451

i 79,399

i 84,428
415

i 84,580
169

i 78,103

332

320

311

147

1,999

1,132

673
37

673
76

680

5,083
53

5,083

211

5,084
189

5,084

34,621

35,140

35,237

31,991

42,886
4,522

42,886
4,522

42,886
4,522

i 82,029
899

i 82,548
820

686

2

Total U.S. Govt, securities.

82,928

83,368

84,096

79,399

84,843

81,883

84,749

78,103

Total loans and securities.....................
Cash items in process o f collection. . .
Bank premises......................................... .
Operating equipment..............................
Other assets:
Denominated in foreign currencies.
All other...............................................

88,921
*6,542
300

91,410
*7,026
298

91,181
7,902
298

85,249
8,353
290

90,990
7,449
290

87,829
*5,408
300

91,138
5,966
288

85,495
7,966
243

31
2,905

2,910

23
2,753

2,751

2,632

2,893

25
2,682

1,433

*111,153

*114,098

114,590

109,101

113,842

*108,891

112,581

107,206

2

Total assets.

2
12

2

2
21

2
8

2
1

2

Liabilities
F.R. notes...............................................
D eposits:
Member bank reserves....................
U.S. Treasury—General account.
Foreign...............................................
Other:
All other2 ......................................

72,533

72,741

73,230

73,444

72,867

72,392

72,229

65,771

*28,318
1,386
284

*30,899
1,333
276

31,011
597
224

24,817
1,381
239

26,418
5,291
253

*25,227
2,675
369

25,976
5,773
373

27,376
3,822
330

701

1,169

Total deposits.

*30,562

*33,303

32,505

27,131

32,727

*28,957

32,823

32,697

Deferred availability cash items............ .
Other liabilities and accrued dividends.

4,719
1,077

4,883

1,011

5,662
1,138

5,504
1,067

5,371
1,027

4,188
1,068

4,175
1,076

5,335
1,155

Total liabilities.......................................... .

*108,891

*111,938

112,535

107,146

111,992

*106,605

110,303

104,958

Capital paid in ...............................................................
Surplus.............................................................................
Other capital accounts.................................................

911
897
454

912
897
351

911
897
247

909
897
149

911
897
42

911
897
478

909
897
472

880
844
524

Total liabilities and capital accounts........................

*111,153

*114,098

114,590

109,101

113,842

108,891

112,581

107,206

42,435

41,423

41,055

40,272

40,065

*42,250

39,760

30,090

574

765

686

Capital accounts

Contingent liability on acceptances purchased for
foreign correspondents.................................................
Marketable U.S. Govt, securities held in custody for
foreign and international accounts........................

1,023

Federal Reserve Notes—Federal Reserve Agents* Accounts
78,081

78,073

77,922

77,532

77,156

78,070

77,001

70,346

11,596
302

11,596
302

11,596
302

11,596
302

11,595
292

11,596
302

11,596
292

2,225

68,670

68,650

69,030

68,650

69,600

80,568

80,537

80,928

80,538

71,825

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.

69,030

68,930

68,810

Total collateral...............

80,928

80,828

80,708

1 See note 2 on p. A-2.
2 See note 6 on p. A-2.




AUGUST 1975 □ FEDERAL RESERVE BANKS; BANK DEBITS

A 11

MATURITY DISTRIBUTION OF LOANS AND U.S. GOVERNMENT SECURITIES
HELD BY FEDERAL RESERVE BANKS
(In millions of dollars)
Wednesday

End o f month

1975

Item

91 days to 1 year..............................................................

16-90 days..........................................................................
5-10 years..........................................................................
Over 10 years....................................................................

1974

July 30

July 23

July 16

July 9

July 2

July 31

June 30

July 31

147
135

1,999
1,995
4

1,131
1,127
4

80
74

271
264
7

178
162
16

560
552

3,588
3,476

12

8

112

710
136
400
174

749
168
403
178

680
76
421
183

686

80
423
183

692
98
402
192

685
99
403
183

682
93
383
206

218
31
187

82,928
4,768
18,459
28,366
7,137
3,196

83,368
5,468
18,725
20,476
28,366
7,137
3,196

84,096
5,094
18,810
21,493
28,366
7,137
3,196

79,399
2,151
16,905
21,644
28,366
7,137
3,196

84,843
4,890
19,621
21,633
28,366
7,137
3,196

81,883
5,294
15,760
22,130
28,366
7,137
3,196

84,749
3,891
21,187
20,972
28,366
7,137
3,196

78,103
9,127
17,770
21,273
19,967
7,954

5,136
79
276
532
2,544
1,144
561

5,294
237
276
532
2,544
1,144
561

5,273
190
291
517
2,567
1,147
561

5,084

5,183
99
283
526
2,567
1,147
561

5,083
27
276
531
2,544
1,187
518

5,146
109
282
495
2,552
1,147
561

3,585
3
85
449
1,719
865
464

21 ,0 0 2

1-5 years............................................................................
5-10 years..........................................................................
Over 10 years....................................................................

1975

6

1

291
517
2,567
1,147
561

2 ,0 1 2

1 Holdings under repurchase agreements are classified as maturing
within 15 days in accordance with maximum maturity o f the agreements.

BANK DEBITS AND DEPOSIT TURNOVER
(Seasonally adjusted annual rates)
Turnover o f demand deposits

Debits to demand deposit accounts 1
(billions o f dollars)
Period

6 others 2

Total 232
SMSA’s
(excl.
N.Y.)

226
other
SMSA’s

Total
233
SMSA’s

N.Y.

9,065.7
9 ,1 4 0 .4
9 ,2 4 0 .8
9 ,9 7 0 .8
10,271.1
10,538.9
9 ,931.8

4,7 6 8 .0
4,892.1
5 ,1 7 3 .0
5,092.1
5 ,0 8 4 .7
5,1 6 0 .2
5,152.7

11,391.6
11,759.2
12,241.0
12,046.7
12,077.6
12,379.8
12,260.6

6 ,623.6
6,867.1
7,0 6 8 .0
6 ,954.7
6 ,9 9 3 .0
7 ,219.6
7 ,107.9

116.9
119.8
123.4
125.1
127.0
131.8
128.0

279.9
282.1
286.4
310.5
316.8
324.6
312.8

1 2 0 .0

10,157.8
10 , 9 1 8 .0
10,241.1
10,810.3
10,826.1
10,612.2

4 ,868.4
4,992.8
4,899.9
4 ,770.6
4,8 5 2 .6
4,755.5

11,698.4
12,034.7
71,941.8
*•11,897.5
rl l ,913.6
11,887.7

6,830.1
7,041.9
^11,041.9
*•7,126.9
*•7,016.0
7,132.1

127.2
133.3
*•125.1
*■128.3
*■129.7
124.7

321 .8
343.2
*■320.4
*•337.5
*•341.3
328.6

125.9
127.4
118.2
115.3
*•121.3
115.5

Leading SMSA’s
Total
233
SMSA’s

N.Y.

20,457.3
20,899.6
21,481.7
22,017.5
22,348.8
22,918.7
22,192.4

1975—Jan................................... 21,856.3
Feb.................................. 22,952.7
Mar................................. 22,182.9
Apr.................................. r22,707.7
M ay................................ r22,739.7
June................................ 22,499.8

1974—June..............................
July.................................
Aug.................................
Sept.................................
Oct...................................
N ov.................................
D ec..................................

1 Excludes interbank and U.S. Govt, demand deposit accounts.
2 Boston, Philadelphia, Chicago, Detroit, San Francisco-Oakland, and
Los Angeles-Long B e a c h .




Leading SMSA’s
6 others2

123.5
132.0
127.5
127.3
131.5
131.8

Total 232
SMSA’s
(excl.
N .Y .)

226
other
SMSA’s

79.8
82.8
86.3
83.8
84.1
87.5

64.3
67.0
68.9
66.9
67.5
70.6
69.3

8 6 .6

83.4
85.8
82.2
*•82.1
*•83.0
80.2

67.3
69.6
67.8
*•6 8 .8
6 8 .2

66.7

N o t e . —Total SMSA’s include some cities and counties not designated
as SMSA’s.
For b a c k d a ta see pp. 634—35 o f July 1972 B u l l e t i n .

A 12

MONEY STOCK o AUGUST 1975
MEASURES OF THE MONEY STOCK
(In billions o f dollars)
Seasonally adjusted
Period

Mi

Mi

M2

N ot seasonally adjusted

Mi

M6

Mi

Mi

Mi

M4

Ms

Composition o f measures is described in the Note below.

983.4

888.8

263.0
279.1

530.7
577.3

848.0
922.8

574.9
641.3

892.2
986.8

688.2
693.8
697.1
703.8

1.037.1
1.043.2
1.046.4
1.049.9
1.056.9
1.062.5
1.072.0

278.2
280.0
277.3
278.9
281 .2
285.1
292.3

596.5
599.2
598.4
600.3
605.7
609.8
618.6

957.2
960.9
958.7
960.8
967.4
972.8
985.1

676.2
681.9
685.5
689.0
694.5
696.8
709.1

1 ,036.8
1.043.7
1 .045.8
1.049.5
1 .05 6 .2
1 .059.9
1 .075.5

708.3
712.4
716.1
718.8
'722.9
731.3

1,079.8
1.087.6
1.097.0
1.105.6
-•1,115.3
1,130.4

289.3
280.4
283.3
288.7
284.9
292.1

621.5
617.9
625.9
634.8
635.5
646.7

992.4
993.3
1,008.6
1.023.9
rl , 029.6
1.047.9

713.4
707.1
713.9
720.6
719.6
729.1

1 .084.4
1 .082.5
1 .09 6 .6
1,109.8
rl ,113.7
1.130.2

1972—D e c..
1973—D e c..

255.8
271.5

525.7
572.2

844.9
919.6

569.7
636.0

1974— June.
July..
A ug..
Sept..
O ct...
Nov..
D e c..

280.0
280.4
280.5
280.7
281.6
283.6
284.4

597.1
599.6
601.9
603.4
607.6
611.6
613.5

955.8
959.6
962.6
965.0
970.7
976.9
981.7

678.4
683.2
685.7

1975—Jan...
Feb..
Mar..
A pr..
May.
June**

282.2
283.5
286.1
287.1
289.7
294.0

615.5
620.3
626.4
630.4
637.3
647.3

987.0
995.6
1 .0 0 7 .2
1 .017.2
'I ,029.7
1.046.3

N o t e . —Composition o f the money stock measures is as follows:

M i: Averages o f daily figures for (1) demand deposits o f commercial
banks other than domestic interbank and U.S. Govt., less cash items in
process o f 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: Averages o f daily figures for M i plus savings deposits, time de­
posits open account, and time certificates other than negotiable C D ’s of
$ 100,000 o f large weekly reporting banks.

M s: M 2 plus mutual savings bank deposits, savings and loan shares, and
credit union shares (nonbank thrift).
M 4: M 2 plus large negotiable C D ’s.
M 5: M i plus large negotiable C D ’s.
For a description of the latest revisions in Mi, M 2, and M 3, see “Revi­
sion o f Money Stock Measures and Member Bank Reserves and Deposits”
on pp. 817-27 o f the Dec. 1974 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 o f
Research and Statistics.

COMPONENTS OF MONEY STOCK MEASURES AND RELATED ITEMS
(In billions o f dollars)
Seasonally adjusted

N ot seasonally adjusted

Commercial banks

Commercial banks

Time and savings
deposits

Period
Cur­
ren­
cy

D e­
mand
de­
pos­
its

CD’s 1

Other

Total

N on­
bank
thrift
insti­
tu­
tions 2

Demand deposits
Cur­
ren­
cy

Time and savings
deposits

Total

Mem­
ber

D o­
mes­
tic
non­
mem­
ber

CD’s 1

Other

Total

N on­
bank
thrift
insti­
tu­
tions 2

U.S.
Govt.
de­
pos­
its 3

1972—Dec.................
1973—D ec.................

56.9
61.6

198.9
209.9

43.9
63.8

269.9
300.7

313.8
364.5

319.1
347.4

57.9
62.7

205.1
216.4

152.4
157.0

51.4
56.6

44.2
64.0

267.6
298.2

311.8
362.2

317.3
345.6

7 .4
6.3

1974—June...............
July................
Aug.................
Sept................
Oct..................
N ov................
D ec.................

64.6
64.8
65.5
65.9
66.5
67.4
67.9

215.4
215.6
215.0
214.8
215.2
216.2
216.5

81.3
83.6
83.8
84.8

398.4
402.8
405.2
407.5
412.1
413.6
419.4

358.7
360.0
360.7
361.7
363.2
365.3
368.2

64.8
65.3
65.7
65.8
66.4
67.9
69.0

213.5
214.7

153.6
154.4
152.3
153.3
154.4
156.0
160.4

56.1
56.5
56.1
56.6
57.1
57.7
58.9

79.6
82.8
87.1
88.7

318.3
319.2
321.1
321.3
324.6
324.6
326.3

397.9
402.0
408.2
410.1
413.3
411.7
416.8

360.7
361.7
360.3
360.5
361.7
363.0
366.5

6 .1

85.5
90.3

317.1
319.2
321.5
322.7
325.9
328.0
329.1

1975—Jan..................
Feb.................
Mar................
Apr.................
M ay...............
June*5.............

6 8 .2
6 8 .8

214.0
214.7
216.6
217.5
219.4

92.7
92.1
89.8
88.4
85.5
84.1

333.3
336.8
340.3
343.3
347.6
353.3

426.0
428.9
430.0
431.7
433.1
437.3

371.5
375.3
380.8
386.8
r392.4
399.0

67.8
67.9
68.9
69.2
70.1
71.3

221.5

158.9
152.4
154.0
157.6
154.1
157.9

58.7
56.6
57.1
58.8
57.8
60.0

91.9
89.2

332.2
337.4
342.6
346.1
350.6
354.6

424.1
426.6
430.6
432.0
434.7
436.9

371.0
375.4
382.7
389.1
r394.1
401.1

4 .0
3 .4
3.9
4 .2
4 .2
4 .2

69.5
69.6
70.3
71.1

2 2 2 .8

8 6 .2

1 Negotiable time certificates o f deposit issued in denominations of
$ 100,000 or more by large weekly reporting commercial banks.
2 Average o f 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.




2 1 1 .6

213.1
214.7
217.3
223.3
2 1 2 .6

214.4
219.5
214.8
2 2 0 .8

3 At all commercial banks.

See also N o t e above.

8 8 .8

87.1
90.5

88.1

85.8
84.1
82.3

5 .4
4 .0
5.5
3.7
3 .4
4.9

AUGUST 1975 □ BANK RESERVES; BANK CREDIT

A 13

AGGREGATE RESERVES AND MEMBER BANK DEPOSITS
(In billions o f dollars)
Member bank reserves, S.A.1

Deposits subject to reserve requirements 3
S.A.

Period
Total

N on­
bor­
rowed

Re­
quired

Avail­
able 2
Total

Total member
bank deposits
plus nondeposit
items 4

N.S.A.
Demand

Time
and
savings

Private

U.S.
Govt.

Total

Demand

Time
and
savings

Private

U.S.
Govt.

S.A.

N.S.A.

1971—D ec.......
1972—D ec.......
1973—D ec.......

31.33
31.46
35.16

31.20
30.41
33.87

31.15
31.17
34.86

29.03
29.09
32.97

360.3
402.0
442.2

210.7
242.0
280.0

143.8
154.5
158.2

5.8
5 .6
3.9

364.6
406.8
447.5

209.7
240.7
278.5

149.2
160.1
164.0

5.7
5 .0

365.2
406.4
448.7

369.5
411.2
454.0

1974— Jun e....
July.. . .
A ug.. ..
Sept___
Oct........
N o v .. . .
D ec.......

36.74
37.40
37.27
37.28
36.86
36.87
36.91

33.73
34.10
33.93
34.00
35.04
35.62
36.18

36.54
37.24
37.08
37.09
36.73
36.67
36.65

34.71
34.96
35.27
35.30
34.89
34.87
34.64

472.9
475.7
478.5
480.6
480.5
483.6
485.9

307.0
310.7
312.4
314.4
317.2
318.4
323.4

160.6
160.7
159.9
159.9
159.5
160.6
160.7

5.3
4 .2

470.0
474.3
475.1
479.7
480.5
481.2
491.8

306.4
310.1
315.3
317.2
318.6
317.4
321.7

158.9
160.0
157.0
158.3
159.1
161.4
166.6

4.7
4.1
2 .9
4 .2
2.7
2 .4
3.5

481.2
484.9
487.5
489.2
488.3
491.2
494.3

478.4
483.5
484.2
488.2
488.3
488.8
500.1

1975—Jan .. ,
Feb.......
M ar.. . .
Apr.......
M a y .. ..
June*\..

36.91
35.46
34.85
35.08
34.64
34.88

36.51
35.32
34.74
34.97
34.57
34.66

36.76
35.27
34.65
34.93
34.48
34.67

34.41
33.61
33.03
33.11
32.81
33.01

488.2
489.2
491.6
493.5
493.7
500.5

328.5
328.9
329.2
329.7
329.0
330.8

159.0
159.7
161 .7
161.7
162.6
165.9

495.1
487.0
491.6
495.4
491.8
497.5

327.2
326.5
328.9
329.1
329.8
330.2

165.0
158.0
159.8
163.2
159.0
164.2

2 .9
2 .4
2 .8

495.8
495.7
498.1
500.2
501.2
507.5

502.6
493.5
498.1
502.2
499.2
504.5

1 Averages o f daily figures. Member bank reserve series reflects actual
reserve requirement percentages with no adjustment to eliminate the
effect of changes in Regulations D and M. Required reserves were in­
creased by $660 million effective Apr. 16, 1969, and $400 million effective
Oct. 16, 1969; were reduced by $500 million (net) effective Oct. 1, 1970.
Required reserves were reduced by approximately $2.5 billion, effective
N ov. 9, 1972; by $1.0 billion, effective Nov. 15; and increased by $300
million effective Nov. 22.
2 Reserves available to support private nonbank deposits are defined
as ( 1) required reserves for (a) private demand deposits, (b) total time
and savings deposits, and (c) nondeposit sources subject to reserve re­
quirements, and (2) excess reserves. This series excludes required reserves
for net interbank and U.S. Govt, demand deposits.
3 Averages o f daily figures. Deposits subject to reserve requirements
include total time and savings deposits and net demand deposits as defined

6 .2

6.3
3.7
4.6
1.9
0.7
0 .6

0.7
2 .1
2.1

3.8

6 .1

3.1
3.0
3.1

by Regulation D . Private demand deposits include all demand deposits
except those due to the U.S. Govt., less cash items in process o f collection
and demand balances due from domestic commercial banks.
4
“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 t e . — For description o f revised series and for back data, see article
“ Revision o f Money Stock Measures and Member Bank Reserves and
Deposits” on pp. 817-27 of the Dec. 1974 B u l l e t i n .
Due to changes in Regulations M and D , member bank reserves include
reserves held against nondeposit funds beginning Oct. 16, 1969. Back data
may be obtained from the Banking Section, Division o f Research and
Statistics, Board o f Governors o f the Federal Reserve System, Washington,
D.C. 20551.

LOANS AND INVESTMENTS AT ALL COMMERCIAL BANKS
(In billions o f dollars)

Seasonally adjusted
Loans
Total
loans
and
invest­
ments 1

Date

Total i

Plus
loans
sold 2

N ot seasonally adjusted
Securities

Commercial
and industrial3
Total

Plus
loans
sold 2

U.S.
Treas­
ury

Other4

Total
loans
and
invest­
ments 1

Loans

Total i

Plus
loans
sold 2

Securities

Commercial
and industrial3
Total

Plus
loans
sold 2

U.S.
Treas­
ury

Other 4

1971—Dec. 3 1 ___
1972—Dec. 3 1 ___
1973—Dec. 3 1 ___

484.8
556.4
630.3

320.3
377.8
447.3

323.1
380.4
451.6

115.9
129.7
155.8

117.5
131.4
158.4

60.1
61.9
52.8

104.4
116.7
130.2

497.9
571.4
647.3

328.3
387.3
458.5

331.1
389.9
462.8

118.5
132.7
159.4

134.4
162.0

64.9
67.0
58.3

104.7
117.1
130.6

1974—July
Aug.
Sept.
Oct.
Nov.
Dec.

3 1 5 ....
28........
25 ,
30
2 7 6 ....
3 1 .......

687.5
693.9
689.9
690.8
692.5
687.1

494.8
501.5
500.2
502.0
503.8
'498.2

500.2
506.8
505.5
507.2
508.7
'503.0

178.0
181.0
181.4
183.2
184.3
182.6

180.9
183.9
184.2
186.0
187.0
185.3

5 5.9
55.3
52.3
49.8
49.1
r48.8

136.8
137.1
137.4
139.0
139.6
140.1

686.3
689.4
689.5
689.5
692.2
r705.6

497.2
500.6
501.2
500.7
502.0
510.7

502.6
505.9
506.5
505.9
506.9
515.5

178.4
179.4
181.5
182.0
183.2
186.8

181.3
182.3
184.3
184.8
185.9
189.5

52.2
52.0
50.7
50.7
52.1
54.4

136.9
136.8
137.6
138.1
138.1
140.5

1975—Jan.
Feb.
Mar.
Apr.
May
June
July

2 9 * \...
2 6 * \...
26p___
30^. . .
28 p___
30^___
30p___

689.3
691.0
694.7
696.2
698.3
698.8
702.1

500.7
497.6
496.4
492.4
489.6
484.5
485.8

505.3
502.1
501.1
497.0
494.3
489.2
490.3

183.9
182.1
180.4
179.8
178.2
175.3
176.0

186.6
184.8
183.2
182.5
181.0
178.2
178.8

48.8
53.3
58.7
64.5

139.8
140.1
139.6
139.3
139.9
141.3
142.3

688.3
685.3
690.2
695.2
694.7
703.0
700.6

495.9
491.5
490.3
490.6
488.4
491.8
487.9

500.5
496.0
495.0
495.2
493.1
496.5
492.4

181.7
180.3
180.0
180.4
177.8
177.9
175.9

184.4
183.0
182.8
183.1
180.6
180.8
178.7

53.6
54.7
59.6
63.7
65.6

138.9
139.1
140.3
140.9
140.6
142.4
142.4

6 8 .8

73.0
74.0

1 Adjusted to exclude domestic commercial interbank loans.
2 Loans sold are those sold outright for banks’ own foreign branches,
nonconsolidated nonbank affiliates o f the bank, the banks’ holding
company (if not a bank), and nonconsolidated nonbank subsidiaries o f
the holding company. Prior to Aug. 28, 1974, the institutions included
had been defined somewhat differently, and the reporting panel o f 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 o f loans at one large bank reduced these loans by
about $400 million as o f June 30, 1972.
4 Farmers Home Administration insured notes included in “Other
securities” rather than in loans beginning June 30, 1971, when such notes
totaled about $700 million.
5 Data beginning June 30, 1974, include one large mutual savings
bank that merged with a nonmember commercial bank. As o f that date
there were increases o f about $500 million in loans, $100 million in “Other
securities,”
and $600 million in “Total loans and investments.”
for
FRASER

Digitized


120.2

6 8 .8

70.4

6
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 o f loan re­
classifications at another large bank.
N o t e . — Total loans and investments: For monthly data, Jan. 1959June 1973, see Nov. 1973 B u l l e t i n , pp. A-96-A-97, and for 1948-58,
Aug. 1968 B u l l e t i n , pp. A-94-A-97. For a description o f the current
seasonally adjusted series see the Nov. 1973 B u l l e t i n , pp. 831-32, and
the Dec. 1971 B u l l e t i n , pp. 971-73. Commercial and industrial loans:
For monthly data, Jan. 1959-June 1973, see Nov. 1973 B u l l e t i n , pp.
A-96-A-98; for description see July 1972 B u l l e t i n , p. 683. Data are for
last Wednesday o f month except for June 30 and Dec. 31; data are partly
or wholly estimated except when June 30 and Dec. 31 are call dates.

A 14

COMMERCIAL BANKS □ AUGUST 1975
PRINCIPAL ASSETS AND LIABILITIES AND NUMBER, BY CLASS OF BANK
(Amounts in millions o f dollars)
Loans and investments

Classification by
FRS membership
and FDIC
insurance

Securities
Total
U.S.
Treas­
ury

Other

2

Total
assets—
Total
lia­
Cash
bilities
and
assets 3
capital
ac­
counts 4

Deposits
Interbank3
Total 3

Other
Demand

D e­
mand

Bor­
row­
ings

Total
capital
ac­
counts

Num ­
ber
of
banks

Times

Time
U.S.
Govt.

Other

Last-Wednesday-of-month series 6
All commercial banks:
1941—Dec. 3 1 ..
1947—Dec. 31 7.,
1960—Dec. 3 1 ..
1970—Dec. 318.
1971—Dec. 3 1 ..
1972—Dec. 3 1 ..
1973—Dec. 3 1 ..

50,746
116,284
199,509
461,194
516,564
598,f “
683,799

21,714
38,057
117,642
313,334
346,930
414,696
494,947

21,808
69,221
61,003
61,742
64,930
67,028
58,277

7,225
9,006
20,864
86,118
104,704
117,084
130,574

26,551
37,502
52,150
93,643
99,832
113,128
118,276

79,104
155,377
257.552
576,242
640,255
739,033
835,224

71,283
144,103
229,843
480,940
537,946
616,037
681,847

10,982
44,349
15,952
240 1,343 94,367 35,360
12,792
17,079 1,799 5,945 133.379 71,641
30,608 1,975 7,938 209,335 231,084
32,205 2,908 10,169 220,375 272,289
33,854 4,194 10,875 252,223 314,891
36,839 6,773 9,865 263,367 365,002

23
65
163
19,375
25,912
38,083
58,994

7,173
10,059
20,986
42,958
47,211
52,658
58,128

14,278
14,181
13,472
13,686
13,783
13,927
14,171

1974—July
Aug.
Sept.
Oct.
Nov.
Dec.

31 ..
2 8 ..
2 5 ..
309.
2 7 ..
31 r.

720,730
722,110
721,160
723,330
729,640
744,107

531,580
533,320
532,890
534,520
539,400
549,183

52,230
52,010
50,690
50,730
52,140
54,451

136,920107,850
136,780100,610
137,580107,390
138,080110,770
138,100116,220
140,473128,042

872,560
865,740
873,710
880,750
894,530
919.552

695,230
688,490
692,830
700,420
708,150
747,903

33,580 9.680
30,530 9,970
29,760 10,610
33,150 10,180
34,230 10,310
43,483 11,496

4,360
4,070
7,380
3,080
3,910
4,807

243,870
235,780
236,550
243,090
248.730
267;506

403,740
408,140
408,530
410,920
410,970
420,611

68,030
67,230
67.920
68,350
71,470
58,369

61.530
61.530
61,850
62,180
62,210
63,650

14,367
14,383
14,398
14,422
14,440
14,465

1975—Jan. 29*.
Feb. 26*.
Mar. 26*.
Apr. 30*.
May 28*.
June 25*.
July 30*.

724,080
724,010
729,500
728,300
730,170
733,230
734,710

531,630
530,160
529,590
523,680
523,950
523,060
521,940

53,560138 890101,400
54.720139 ,130103,470
59,620140 290105,230
63.720140 900113,280
65,580140 ,640113,340
67,980142 ,190110,710
70,370142 400105,750

873,940
877,120
886,450
895,310
896,550
898,130
894,870

701,390
701,120
710,440
720,410
722,290
721,170
720,670

29,900 11,740
29,770 10,440
30,160 11.680
32,790 11,880
32,030 11,200
31,210 10,830
32,640 10,640

4,530
2,640
3,970
7,950
2,980
3,810
2,260

233.730
234.380
236,540
242,150
245,960
244,600
243,100

421,490
423,890
428,090
425,640
430,120
430,620
432,030

61,320
63.920
62,830
60,620
60,810
62,720
60,780

64,010
64,460
65,100
64,940
64,890
65,430
65,920

14,475
14,497
14,523
14,535
14,555
14.569
14.569

Members of
F.R. System:
1941—Dec.
1947—Dec.
I960—Dec.
1970—Dec.
1971—Dec.
1972—Dec.
1973—Dec.

31 ..
3 1 ..
31 ..
318.
3 1..
3 1..
3 1 ..

43,521
97,846
165,619
365,940
405,087
465,788
528,124

18,021
32,628
99,933
253,936
277,717
329,548
391,032

19,539
57,914
49,106
45,399
47,633
48,715
41,494

5,961
7,304
16,579
66,604
79,738
87,524
95,598

23,113
32,845
45,756
81,500
86,189
96,566
100,098

132,060
216,577
465,644
511,353
585,125
655,898

68,121

61,717
122,528
193,029
384,596
425,380
482,124
526,837

10,385
12,353
16,437
29,142
30,612
31,958
34,782

140
50
1,639
1,733
2,549
3,561
5,843

1,709
1,176
5,287
6,460
8,427
9,024
8,273

37,136
80,609
112,393
168,032
174,385
197,817
202,564

12,347
28,340
57,273
179,229
209,406
239,763
275,374

4
54
130
18,578
25,046
36,357
55,611

5,886
8,464
17,398
34,100
37,279
41,228
44.741

6,619
6,923
6,174
5,767
5,727
5,704
5,735

1974—July
Aug.
Sept.
Oct.
Nov.
Dec.

3 1 ..
28 ..
2 5 ..
309.
27 ..
31 r.

552,643
552,845
550,843
548,622
556, ~~
568,532

418,088
418,727
417,631
415,941
421,428
429,537

35,858
35,878
34,683
34,813
36,394
38,921

98,697
98,240
98,529
97,868
98,266
100,073

91.430
84,947
91,002
93,674
98,603
106,995

680,511
673,296
679,160
680,173
694,743
715,615

533,807
527,573
531,194
535,128
542,515
575,563

31,153 8,598
28,487 8,887
27,831 9,522
31,043 9,089
32,422 9,222
41,062 10,052

3,180
2,958
5,782
2,117
2.859
3,183

186,360
179,429
180,114
184,573
189,688
204,203

304.516
307,812
307,945
308,306
308,324
317,064

63,042
61,781
62,166
60,803
65,411
52,850

46,907
46,816
47,054
47,131
47,320
48,240

5.766
5.766
5.774
5.775
5,774
5,780

1975—Jan.
Feb.
Mar.
Apr.
May
June
July

2 9 ..
2 6..
26 ..
30 ..
2 8 ..
25*.
30*.

550.264
549,144
552,957
550,756
551.264
553,091
553,545

414,426
412,076
411,446
406,676
405,803
404,580
403,742

37,549
38,628
42,544
45,142
46,918
48,695
50,050

98,289
98,440
98,967
98,938
98,543
99,816
99,753

86,321
88.430
89,685
96,694
96,455
94,405
89,898

676.905
678,970
685.906
692,147
691,485
692,583
688,756

536,256
535,250
542,076
549,824
549,996
548,631
547,222

28,31110,299
28,157 8,991
28,56410,231
31,10210,433
30,191 9,751
29,557 9,388
30,980 9,198

3,247 177,701 316,698 56,136 48,411
1,989 178,596 317.517 58,868 48.741
2,794 180,214 320,273 58,030 49,219
6,212 184,693 317,384 55,738 49,267
2,178 187,439 320,437 56,140 49,188
2.859 186,266 320,561 57,959 49,593
1,541 184,595 320,908 56,094 49,951

5,783
5.785
5.785
5.789
5.790
5.795
5.795

Call date series
j
Insured banks:
Total:
1941 _ D e c .
1947—Dec.
1960—Dec.
1 9 7 0 -D e c .
1971—Dec.
1972—Dec.
1973—Dec.

3 1 ...
49,290 21,259 21,046 6,984
3 1 ... 114,274 37,583 67,941 8,750
3 1 ... 198,011 117,092 60,468 20,451
318.. 458,919 312,006 61,438 85,475
3 1 ... 514,097 345,386 64,691 104,020
3 1 ... 594,502 411,525 66,679 116,298
3 1 ... 678,113 490,527 57,961 129,625

25,788
36,926
51,836
92,708
98,281
111,333
116,266

76,820
152,733
255,669
572,682
635,805
732,519
827,081

69,411
141,851
228,401
479,174
535,703
612,822
677,358

10,654
1,762 41,298 15,699
12,615
54 1,325 92,975 34,882
16,921 1,667 5,932 132,533 71,348
30,233 1,874 7,898 208,037 231,132
31,824 2,792 10,150 219,102 271,835
33,366 4,113 10,820 250,693 313,830
36,248 6,429 9,856 261,530 363,294

1974— June 3 0 ... 709,904 521,424 51,832 136,648 123,536 871,986 703,767 40,534 8,427
734,516 541,111 54,132 139,272 125,375 906,325 741,665 42,587 10,693
Dec. 31
National member:
1941—Dec. 3 1 ...
1947—Dec. 3 1 ...
1960—Dec. 3 1 ...
1970—Dec. 318..
1971—Dec. 3 1 ...
1972—Dec. 3 1 ...
1973—Dec. 3 1 ...

27,571
65,280
107,546
271,760
302,756
350,743
398,236

11,725
21,428
63,694
187,554
206,758
247,041
293,555

12,039
38,674
32,712
34,203
36,386
37,185
30,962

3,806
5,178
11,140
50,004
59,612
66,516
73,718

14,977
22,024
28,675
56,028
59,191
67,390
70,711

43,433
88,182
139,261
340,764
376,318
434,810
489,470

39,458
82,023
124,911
283,663
314,085
359,319
395,767

6 , 786
8,375
35
9,829
611
982
18,051
17,511 1,828
19,096 2,155
20,357 3,876

1974— June 3 0 ... 418,329 313,659 27,631 77,039 73,703 516,632 407,915 20,086 4,912
Dec. 31 ' . . 428,433 321,466 29,075 77,892 76,523 534,207 431,039 23,497 6,750

For notes see opposite page.




10

61
149
19,149
25,629
37,556
57,531

6,844
9,734
20,628
42,427
46,731
52,166
57,603

13,426
13,398
13,119
13,502
13,602
13,721
13,964

8,355 250,225 396,226 65,514 61,003 14,108
4,799 265,444 418,142 55,988 63,039 14,216
23,262
53,541
71,660
122,298
128,441
146,800
152,705

4
45

3,640
5,409

13,100
18,169
26,706
39,696

24,868
27,065
30,342
33,125

5,117
5,005
4,530
4,620
4,599
4,612
4,659

5,038 145,954 231,925 48,123 34,966
2,437 154,397 243,959 39,603 35,815

4,693
4,706

1,088
795
3,265
4,740
6,014
6,646
5,955

8,322
19,278
39,546
137,592
160,291
184,622
212,874

111 11,098

AUGUST 1975 □ COMMERCIAL BANKS

A 15

PRINCIPAL ASSETS AND LIABILITIES AND NUMBER, BY CLASS OF BANK— Continued
(Amounts in millions o f dollars)
Loans and investments
Classification by
FRS membership
and FDIC
insurance

Securities
Total

Loans
l

U.S.
Treas­
ury

Other
2

Total
assets—
Total
Cash
lia­
assets 3 bilities
and
Total3
capital
ac­
counts 4

Deposits
Interbank3

Other
Demand

D e­
mand

Time
5

Time
U.S.
Govt.

Bor­
row­
ings

Total
capital
ac­
counts

Num­
ber
of
banks

Other

Call date series
Insured banks (cont.):
State member:
1941_D ec. 3 1 .... 15,950 6,295
1947—Dec. 3 1 .... 32,566 11,200
1960—Dec. 3 1 .... 58,073 36,240
1970—Dec. 318... 94,760 66,963
1971—Dec. 3 1 .... 102,813 71,441
1972—Dec. 3 1 .... 115,426 82,889
1973—Dec. 3 1 .... 130,240 97,828
1974—June 3 0 . . . . 132,388 101,732
Dec. 3 1 .... 140,373 108,346
Nonmember:
1941—Dec.
1947—Dec.
1960—Dec.
1970—Dec.
1971—Dec.
1972—Dec.

5,776 3,241
3 1 ....
3 1 .... 16,444 4,958
32,411
17,169
3 1 ....
318... 92,399 57,489
67,188
108,527
3 1 ....
3 1 .... 128,333 81,594

7,500 2,155 8,145 24,688
19,240 2,125 10,822 43,879
16,394 5,439 17,081 77,316
11,196 16,600 25,472 125,460
11,247 20,125 26,998 135,517
11,530 21,008 29,176 150,697

22,259
3,'739
40,505 3,978
15
68,118 6,608
1 ,028
101,512 11,091
750
111,777 13,102
721
123,186 12,862 1 ,406

10,532 21,880 29,387 166,780 131,421
8,303 22,353
9,846 22,181

1,502
1,918
1,644
1,147
1,128
1,092

14,425

1 ,968

2,318 49,859 62,851 15,914 11,617

1,076

35,268 175,896 139,446 19,125
30,473 181,683 144,799 17,565

2,906
3,301

1,586 47,690 68,138 14,713 11,980
746 49,807 73,380 13,247 12,425

1,068
1,074

53
149
645
1,438
1,723
1,796

6,810
6,478
6,948
7,735
7,875
8,017

1,509
1,025 2,6 6 8
1,448 4,083
10.039
11,368 3,874 6,082
16.039 18,871 11,208
17,058 24,282 12,092
17,964 28,774 14,767

8,708
20,691
39,114
106,457
123,970
147,013

7,702
19,342
35,391
93,998
109,841
130,316

129
262
484
1,091

4
27
141
242
552

1,2 1 2

1,408

4,162 3,360
6
959
12,366 6,558
7 1,271
20,140 14,095
19 3,232
40,005 51,322
571 8,326
44,717 61,946
582 9,451
52,876 73,685 1,199 10,938

16,167 170,831 150,170

1,467

586

1,582 58,966 87,569

12,862

8,229

1974—June 3 0 . . . . 159,186 106,033 15,898 37,255 14,565 179,457 156,406
Dec. 3 1 .... 165,709 111,300 15,211 39,199 18,380 190,435 165,827

1,323
1,525

610
642

1,731 56,580 96,162 2,678 14,057
1,616 61,240 100,804 3,138 14,799

8,347
8,436

1973—Dec. 3 1 .... 149,638 99,143

Noninsured
nonmember:
1941—Dec.
1947—Dec.
1960—Dec.
1970—Dec.
1971—Dec.
1972—Dec.

16,467 34,027

621 13,874 4,025
1 2,246
381 27,068 9,062
9 3,055
40.733 17,727
20
6,299
1,720 45.734 42,218 5,478 9,232
2,412 45,945 49,597 6,878 10,214
2,378 51,017 55,523 9,651 10,8 8 6
2 ,0 2 2

763
576
314
934
1,551
1,794

2,283
2,643
1,883
4,365
5,130
7,073

1,872
2,251
1,443
2,570
2,923
3,775

329

1973—Dec. 3 1 ....

6,192

4,927

316

949

2 ,0 1 0

8,650

4,996

591

344

9

1974—June 3 0 . . . .
Dec. 3 1 ....

9,269
9,981

7,987
8,461

282
319

1,001
1,201

2,951
2,667

12,770
13,616

6,610
6,627

1,481
897

476
803

12
8

1,266 3,431 10,992
3,696 2,270
7,233
3 1 ....
1,703 4,659 23,334
3 1 .... 18,454 5,432 11,318
3 1 .... 33,910 17,719 11,904 4,287 6,396 40,997
318... 95,478 59,621 16,342 19,514 12,143 110,822
3 1 .... 111,674 69,411 17,297 24,966 13,643 129,100
3 1 .... 133,198 85,325 18,313 29,559 16,562 154,085

9,573
21,591
36,834
96,568
112,764
134,091

439
643
1,466
1,592
1,895

177
159
375
380
488

185
132
101

116
81

i157
190
160
243
359
633

18,177 179,480 155,165

2,057

930

1974—June 3 0 . . . . 168,456 114,020 16,180 38,256 17,516 192,227 163,016
Dec. 3 1 .... 175,690 119,761 15,530 40,400 21,047 204,051 172,454

2,804
2,422

1 ,086
1 ,445

1973—Dec. 3 1 .... 155,830 104,070

16,783 34,976

1 Loans to farmers directly guaranteed by CCC were reclassified as
securities and Export-Import Bank portfolio fund participations were
reclassified from loans to securities effective June 30, 1966. This reduced
“Total loans” and increased “Other securities” by about $1 billion.
“Total loans” include Federal funds sold, and beginning with June 1967
securities purchased under resale agreements, figures for which are in­
cluded in “ Federal funds sold, etc.,” on p. A-16.
Effective June 30, 1971, Farmers Home Administration notes were
classified as “Other securities” rather than “Loans.” As a result o f this
change, approximately $300 million was transferred to “Other securities”
for the period ending June 30, 1971, for all commercial banks.
See also table (and notes) at the bottom o f p. A-24.
2 See first 2 paragraphs o f note 1.
3 Reciprocal balances excluded beginning with 1942.
4 Includes items not shown separately. See also note 1.
5 See third paragraph o f note 1 above.
« For the last-Wednesday-of-the-month series, figures for call dates
are shown for June and December as soon as they became available.
7 Beginning with Dec. 31, 1947, the series was revised; for description,
see note 4, p. 587, May 1964 B u l l e t i n .
8 Figure takes into account the following changes, which became
effective June 30, 1969: (1) inclusion o f consolidated reports (including
figures for all bank-premises subsidiaries and other significant majorityowned domestic subsidiaries) and ( 2) reporting o f figures for total loans
and for individual categories o f securities on a gross basis—that is, before
deduction o f valuation reserves—rather than net as previously reported.




253
478
293
756
1,134
1,620

13
4
14
226
283
527

1,836

2,215

1,463

524

207

2,209
2,062

2,432 2,033
2,857 2,382

620
611

229
249

1,288
1,596
3,590
8,858
866
9,932
1,726 11,429

7,662
7,261
7,300
7,919
8,056
8,223

i,: 291
18 1,392
846
13
1,298
40
19 1,273
55 1,530

455
474
550
2,132
2,224
3,731

Total nonmember:
1941—Dec.
1947—Dec.
1960—Dec.
1970—Dec.
1971—Dec.
1972—Dec.

761
1,280
535
304
239
349

241
255
413
642
684
785

1,457
2,009
1,498
3,079
3,147
4,865

3 1 ....
317...
3 1 ....
3 1 8 ...
3 1 ....
3 1 ....

1,920

5,' 504
167 13,758
657 20,986
1,478 41,303
1,742 45,990
1,850 54,406

3,613
7,036
14,388
52,078
63,081
75,305

329
325
358
532
480
491

18
12

33
796

1,592 60,802 89,784 3,383

852
783
352
184
181
206

13,386

8,436

1,743 58,789 98,593 4,711 14,677
1,624 63,302 103,661 5,520 15,410

8,576
8,685

9 Member bank data for Oct. exclude assets o f $3.6 billion o f one large
bank.
N o t e . —Data are for all commercial banks in the United States (includ­
ing Alaska and Hawaii, beginning with 1959). Commercial banks represent
all commercial banks, both member and nonmember; stock savings
banks; and nondeposit trust companies.
Figures for member banks before 1970 include mutual savings banks
as follows: 3 before Jan. 1960 and 2 through Dec. 1960. Those banks
are not included in insured commercial banks.
Effective June 30, 1969, commercial banks and member banks exclude
a small national bank in the Virgin Islands; also, member banks exclude,
and noninsured commercial banks include, through June 30, 1970, a small
member bank engaged exclusively in trust business; beginning 1973,
exclude 1 national bank in Puerto Rico.
Beginning Dec. 31,1973, June 30,1974, and Dec. 31, 1974, respectively,
member banks exclude and noninsured nonmember banks include 1 , 2 ,
and 3 noninsured trust companies that are members o f the Federal Re­
serve System.
Comparability of figures for classes o f banks is affected somewhat by
changes in F.R. membership, deposit insurance status, and by mergers
etc.
Figures are partly estimated except on call dates.
For revisions in series before June 30, 1947, see July 1947 B u l l e t i n ,
pp. 870-71.

A 16

COMMERCIAL BANKS □ AUGUST 1975
ASSETS BY CLASS OF BANK, DECEMBER 31, 1974
(Amounts in millions o f dollars)
Member banks 1

Account

All
Insured
commercial commercial
banksc
banks c

Large banks
T otal0

New
York
City

City o f
Chicago

Other
large

All other 0

Non­
member
banks 1

Cash bank balances, items in process..............................
Currency and co in ...........................................................
Reserves with F.R. banks..............................................
Demand balances with banks in United States.........
Other balances with banks in United States..............
Balances with banks in foreign countries...................
Cash items in process o f collection..............................

128,042
11,658
27,109
36,073
4,173
1,751
47,278

125,375
11,633
27,109
34,317
3,872
1,331
47,113

106,995
8,846
27,109
21,685
2,602
1,165
45,588

27,604
691
4 960
7 ’265
62
412
14,214

4,816
198
1 783
’357
275
89
2,115

40,126
2,889
10,356
4 ’, 382
853
532
21,115

34,449
5,068
9*681
1,413
132
8,144

14,388
1,571
586
1,690

Total securities held—Book value....................................
U.S. Treasury....................................................................
Other U.S. Govt, agencies..............................................
States and political subdivisions...................................
All other securities...........................................................

194,924
54,451
32,841
100,376
7,256

193,404
54,132
32,380
6,882

138,995
38,921
20,858
74,261
4,954

16,412
5,332
2,005
8,288
787

5,612
1,820
874
2,706

47,254
13,323
6,450
25,761
1,719

69,716
18,445
11,529
37,507
2,235

55,929
15,529
11,984
26,115
2,302

Trade-account securities.................................................
U.S. Treasury................................................................
Other U.S. Govt, agencies..........................................
States and political subdivisions...............................
All other.........................................................................

7,989
2,548
1,352
3,370
719

7,984
2,543
1,352
3,370
719

7,916
2,521
1,347
3,337
710

3,040
970
541
1,341
188

831
461

3,805
1,037
637
1,612
519

240
53
49
135

74
27
4
34

Bank investment portfolios............................................
U.S. Treasury................................................................
Other U.S. Govt, agencies..........................................
States and political subdivisions...............................
All other.........................................................................

186,934
51,902
31,489
97,006
6,537

185,420
51,589
31,028
96,640
6,163

131,079
36,400
19,510
70,925
4,244

13,372
4,362
1,464
6,947
599

4,781
1,360
753
2,456

43,449
12,286
5,813
24,150

212

1 ,2 0 0

69,476
18,393
11,480
37,372
2,232

55,855
15,502
11,979
26,081
2,293

Federal funds sold and securities resale agreements...
Commercial banks...........................................................
Brokers and dealers.........................................................
Others..................................................................................

40,042
33,807
4,386
1,849

38,881
32,645
4,386
1,849

29,848
23,723
4,330
1,795

1,887
1,052
615

985
698
253
35

14,741
10,628
2,815
1,298

12,235
11,345
647
243

10,194
10,084
56
54

Other loans............................................................................
Real estate loans...............................................................
Secured by farmland...................................................
Secured by residential.................................................
1- to 4-family residences........................................
FHA insured.........................................................
VA guaranteed......................................................
Other......................................................................
Multifamily...............................................................
FHA insured.........................................................
Other......................................................................
Secured by other properties......................................

509,531
130,585
5,904
81,606
74,039
5,914
3,191
64,933
7,567
938
6,629
43,075

502,231
130,301
5,887
81,403
73,863
5,870
3,147
64,846
7,540
921
6,619
43,012

399,963
94,576
2,634
60,573
54,316
5,110
2,703
46,503
6,257
820
5,437
31,369

82,049
8,184
14
4,567
3,135
254
188
2,693
1,432
166
1,266
3,602

24,261
1,325

143,849
49,123
2,274
30,986
29,155

766
59
27
32
437

149,804
35,945
345
24,133
21,198
2,815
1,401
16,982
2,934
355
2,579
11,467

1,094
26,062
1,831
272
1,559
15,863

109,567
36,009
3,270
21,033
19,723
805
488
18,430
1,310
118
1,192
11,706

Loans to domestic and foreign banks.........................
Loans on securities to brokers and dealers................
Other loans for purch./carry securities.......................
Loans to farmers..............................................................
Commercial and industrial loans..................................

12,265
35,235
5,241
4,026
18,237
186,826

10,017
35,011
5,193
4,001
18,216
182,802

9,500
33,626
5,073
3,343
10,501
156,340

4,731
12,911
3,597
566
43,095

679
5,009
550
329
252
13,408

3,628
13,047
763
1,527
2,457
60,473

462
2,660
161
921
7,672
39,365

2,765
1,609
169
683
7,735
30,485

Loans to individuals........................................................
Instalment loans...........................................................
Passenger automobilies...........................................
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..................................................................

103,210
80,242
32,847
5,546
11,078
8,281
2,797
15,381
8,997
6,383
15,390
22,968
13,906

102,951
80,033
32,763
5,536
11,077
8,280
2,797
15,357
8,996
6,362
15,299
22,919
13,738

74,460
57,440
22,125
4,074
9,807
7,430
2,377
10,831
6,520
4,311
10,602
17,020
12,543

5,213
3,177
462
206
1,113
665
447
155
97
59
1,242
2,036
3,631

1,558
835
161
39
388
358
30
118
54
64
129
723
1,152

26,751
20,819
6,954
1,734
5,479
4,273
1,206
3,799
2,353
1,447
2,853
5,932
5,214

40,938
32,608
14,549
2,096
2,828
2,134
694
6,758
4,016
2,742
6,378
8,330
2,546

28,750
22,802
10,722
1,472
1,271
851
420
4,549
2,477
2,072
4,789
5,948
1,362

Total loans and securities...................................................

744,496

734,516

568,806

100,348

30,859

211,799

225,800

175,690

Fixed assets—Buildings, furniture, real estate...............
Investments in subsidiaries not consolidated.................
Customer acceptances outstanding..................................
Other assets............................................................................

15,106
1,763
10,857
19,677

15,027
1,739
10,648
19,020

11,374
1,723
10,364
16,628

1,116
768
5,629
5,104

448
134
451
872

4,622
752
3,912
7,132

5,189
69
372
3,519

3,732
41
493
3,049

Total assets............................................................................

919,941

906,325

715,890

140,569

37,581

268,343

269,398

204,051

Number o f banks.................................................................

14,465

14,216

5,780

13

9

155

5,603

8,685

L o a n s to o t h e r fin a n c ia l i n s t i t u t i o n s .................................

1 0 0,010

1 Member banks exclude and nonmember banks include 3 noninsured
trust companies that are members o f the Federal Reserve System, and
member banks exclude 2 national banks outside the continental United
States.
2 See table (and notes), Deposits Accumulated for Payment o f Personal
Loans, p. 24.
3 Demand deposits adjusted are demand deposits other than domestic
commercial interbank and U.S. Govt., less cash items reported as in
process of collection.




220

120

212

120

250

2

887
827
40
20

21,047
2,812

10 011

3

2 ,0 0 0

9

N o te .— D a ta in c lu d e c o n s o lid a te d r e p o r ts , in c lu d in g fig u re s f o r a ll
b a n k -p re m is e s s u b s id ia rie s a n d o t h e r sig n ific a n t m a jo r ity -o w n e d d o m e s tic
s u b s id ia rie s . F ig u re s f o r t o ta l lo a n s a n d f o r in d iv id u a l c a te g o rie s o f
s e c u ritie s a re r e p o r t e d o n a g ro ss b a s is — t h a t is, b e fo re d e d u c ti o n o f
v a lu a tio n rese rv e s.
Back data in lesser detail were shown in previous B u l l e t i n s . Beginning

with the fall Call Report, data for future spring and fall Call Reports will
be available from the Data Production Section o f the Division o f Data
Processing.
Details may not add to totals because o f rounding.

AUGUST 1975 □ COMMERCIAL BANKS

A 17

LIABILITIES AND CAPITAL BY CLASS OF BANK, DECEMBER 31, 1974
(Amounts in millions o f dollars)
Member banks 1

Account

Insured
All
commercial commercial
banksc
banks c

Large banks
T otal 0
New
York
City

Demand deposits..................................................................
Mutual savings banks.....................................................
Other individuals, partnerships, and corporations. .
U.S. Government.............................................................
States and political subdivisions...................................
Foreign governments, central banks, etc.....................
Commercial banks in United States............................
Banks in foreign countries.............................................
Certified and officers’ checks, etc..................................

315,796
1,363
235,774
4,807
18,615
2,124
35,316
6,804
10,993

312,829
1,197
234,780
4,799
18,484
1,882
35,053
6,336
10,297

248,448

Time and savings deposits..................................................
Savings deposits................................................................
Accumulated for personal loan payments2 ................
Mutual savings banks.....................................................
Other individuals, partnerships, and corporations. .
U.S. Government.............................................................
States and political subdivisions....................................
Foreign governments, central banks, etc.....................
Commercial banks in United States............................
Banks in foreign countries.............................................

432,496
135,597
389
479
221,752
477
50,102
12,683
8,611
2,406

428,836
135,353
387
463
219,947
477
49,930
12,049
8,417
1,814

Total deposits........................................................................

748,292

Federal funds purchased and securities sold under
agreements to repurchase...................................... ; . . .
Other liabilities for borrowed m oney..............................
Mortgage indebtedness.......................................................
Bank acceptances outstanding..........................................
Other liabilities.....................................................................

City o f
Chicago

Other
large

All other c

N on­
member
banks 1

88,451
190
67,111
815
3,889
357
11,985
1,192
2,912

93,134
370
75,327
2,106
8,353

1,465
14,399
4,593
2,833

11,307
3
7,538
36
218
24
3,039
198
251

327,390
97,585
275
451
170,180
352
37,057
11,891
7,858
1,742

51,799
6,061

17,491
2,060

261
30,329
39
2,060
7,369
4,119
1,561

3
11,996
1,307
1,315
775
29

119,486
34,273
69
171
62,467
146
16,494
3,174
2,546
145

138,614
55,191
206
16
65,388
160
17,196
32
418
7

105,106
38,012
115
28
51,572
125
13,046
792
753
663

741,665

575,838

107,355

28,799

207,936

231,748

172,454

52,325
6,045
715
11,433
28,788

51,139
4,848
712
25,047

48,349
4,501
509
10,936
20,426

10,048
1,571
77
6,155
4,397

4,295
63
4
469
1,346

26,357
2,406
259
3,938
8,029

7,649
460
169
373
6,653

3,976
1,544
206
497
8,362

Total liabilities......................................................................

847,597

834,632

660,559

129,603

34,977

248,927

247,052

187,038

Minority interest in consolidated subsidiaries...............
Total reserves on loans/securities.....................................
Reserves for bad debts (IR S)........................................
Other reserves on loans...................................................
Reserves on securities.....................................................

6
8,6 8 8

5
8,649
8,366
115
169

2

2

7,088
6,909
70

3
1,600
1,493
46
60

Total capital accounts.........................................................
Capital notes and debentures........................................
Equity capital....................................................................
Preferred stock.............................................................
Common stock.............................................................
Surplus............................................................................
Undivided profits.........................................................
Other capital reserves..................................................

63,650
4,290
59,360
54
14,820
25,396

8,402
116
171

11,221

1,121

180,792
3,183
13,125
1,855
33,824
6,116
8,431

55,556
559
30,816
226
666

6

1,594
1,593

488
488

2 ,6 6 8

48,240
3,422
44,818
24
11,014
19,226
13,905
649

9,372
755
8,616

2,115
61
2,054

16,748
1,673
15,076

2,188
3,720
2,704
4

568
1,140
301
44

1

110

2,598
17
53

8

4,401
134
2,436

2,338
2,229
51
57

67,348
242
54,982
1,624
5,489
269
1,492
688

2,562

15,410

3,560
6,840
4,398
267

20,005
933
19,072
13
4,698
7,525
6,502
334

968

63,039
4,226
58,813
43
14,723
25,224
17,917
904

Total liabilities, reserves, minority interest, capital
accounts..............................................................................

919,941

906,325

715,890

140,569

37,581

268,343

269,398

204,051

Demand deposits adjusted 3 ...............................................
Average total deposits (past 15 days)..............................
A v e ra g e t o ta l lo a n s ( p a s t 15 d a y s ) ..........................................

228,395
724,418
519,192

225,864
717,811
510,810

165,853
555,884
401,666

26,717
103,014
81,665

6,117
27,229
24,493

54,535
199,287
150,485

78,483
226,354
145,023

62,542
168,534
117,525

13.9

1 2 .8

25.9

10.3
27.4

Selected ratios:
Percentage o f totai assets
Cash and balances with other banks...........................

18,122

10

2 1 .2

13.8
21.3

14.9
19.4

19.6
11.7

1 2 .8

14.9

15.0
17.6

Total securities held.........................................................
Trading account securities..........................................
U.S. Treasury...........................................................
States and political subdivisions
...................
All other trading account securities...................

.9
.3
.4

.9
.3
.4

1.1

2 .2

.2

Bank investment portfolios........................................
U.S. Treasury............................................................
States and political subdivisions...........................
All other portfolio securities.................................

20.3
5 .6
10.5
4.1

Other loans and Federal funds sold ............................
All other assets.................................................................
Total loans and securities..............................................
Reserves for loans and securities..................................

.7

2 .2
1 .2

1.4
.4

1 .0

.5

.7
.3

.6

.2

.4
.5
.3

20.5
5 .7
10.7
4.1

18.3
5.1
9 .9
3.3

9.5
3.1
4.9
1.5

12.7
3.6
6.5

16.2
4 .6
9 .0

2 .6

2 .6

59.7
5 .2
80.9

59.7
5.1
81.0

60.0
5 .6
79.5

59.7
9 .0
71.4

67.2
5.1
82.1

61.3

1 .0

1 .0

6.5
7 .0

6.3
6.7

1.1
6.1

6.7

1.3
5.5
5 .6

5 .6

Total capital accounts.....................................................

.9
6.5
6 .9

Number of banks.................................................................

14,465

14,216

5,780

13

9

For notes see opposite page.




868

14,542
30
3,806
6,170
4,216
319

.1

.4

6.1

78.9

25.8
6 .8

27 .4
7 .6

13.9
5.1

1 2 .8

57.9
3.4
83.8

58.7
3 .6

7 .0

8 6.1

6 .2

.9
7.1
7 .4

7.1
7 .6

155

5,603

8,685

1 .0

.8

A 18

WEEKLY REPORTING BANKS □ AUGUST 1975
ASSETS AND LIABILITIES OF LARGE COMMERCIAL BANKS
(In millions o f dollars)
Loans
Federal funds sold, etc.1

Wednesday

Total
loans
and
invest­
ments

Other

To brokers
and dealers
involving—

Total

To
com­
mer­
cial
banks

For purchasing
or carrying securities

To
U.S. Other others
Treas­ se­
curi­
ury
se­
ties
curi­
ties

Total

Com­
mer­
cial
and
indus­
trial

Agri­
cul­
tural

To brokers
and dealers

To nonbank
financial
institutions

To
others

U.S.
U.S.
Treas­ Other Treas­ Other
ury
secs.
ury
secs.
secs.
secs.

Pers.
and
sales
finan.

Real
estate
Other

COS.,

etc.
Large banks—
Total
1974
1,039
918
1,071
935
1,881

495
482
402
406
581

484
461
454
488
647

294,749
294,955
295,938
294,567
297,975

125,614
125,813
126,581
126,158
126,143

3,924
3,922
3,942
3,908
3,928

418
462
493
421
1,726

4,440
3,994
3,886
4,008
4,696

122
120
108
111
113

2,682 9,979 21,379 58,411
2,669 10,089 21,618 58,526
2,670 10,230 21,580 58,710
2,664 9,844 21,423 58,833
2,677 10,215 21,648 59,008

4 ...................
11....................
1 8
2 5

392,798 19,635 16,049 2,256
395,880 21,301 15,234 4,588
396,191 19,758 15,734 2,574
389,756 15,796 12,675 1,871

770
885
893
637

560
594
557
613

282,872
282,222
282,519
281,778

122,004
121,961
122,155
121,885

3,390
3,404
3,431
3,456

1,897
1,961
1,306
605

3,507
3,335
3,398
3,663

84
85
83
114

2,336
2,337
2,349
2,340

9,256
9,028
9,426
9,430

20,134
20,190
20,395
20,477

59,245
59,251
59,228
59,204

2 p .................
9 p .................
I6 p .................
23 p .................
30*

394,903 18,803 15,607 1,710
397,932 20,947 15,694 3,911
391,959 17,054 14,162 1,751
387,697 14,082 11,746 1,441
388,990 15,441 13,217 1,427

719
640
465
333
335

767
702
676
562
462

283,900
284,553
282,233
280,742
280,682

122,326
122,077
121,729
121,082
120,666

3,477
981
3,501 2,948
3,505
939
3,518
879
3,535
766

3,896
3,242
3,488
3,528
3,647

101
101
102
114
109

2,348
2,338
2,342
2,331
2,312

9,378
9,329
9,136
8,962
9,133

20,600
20,468
20,340
20,137
20,039

59,209
59,124
59,116
59,067
59,048

29
33
32
37
36

72,342
72,191
72,499
72,006
74,683

37,587
37,614
37,845
37,606
37,525

136
326
128
393
140
410
133
354
135 1,611

2,586
2,192
2,207
2,259
2,949

23
23
23
28
30

560
557
558
557
557

3,507
3,523
3,586
3,348
3,507

7,933
8,068
8,066
8,066
8,140

6,879
6,913
6,965
7,003
7,053

105
120
72
154

70,509
70,353
70,287
69,986

37,165
37,255
37,330
37,331

84 1,648 2,405
82 1,605 2,267
82 1,099 2,341
83
516 2,575

18
18
18
49

457
466
478
470

3,204
3,117
3,328
3,380

7,830
7,778
7,906
7,863

7,438
7,440
7,422
7,422

80
825 2,788
79 2,630 2,230
78
691 2,431
80
772 2,464
90
648 2,578

39
38
36
50
45

473
477
481
450
439

3,277
3,176
3,146
3,046
3,150

8,002
7,955
7,978
7,934
7,791

7,405
7,405
7,424
7,445
7,449

July

3 ....................
10....................
1 7
2 4
3 1 ....................

June

July

394,699 16,326 14,308
393,974 16,038 14,177
393,409 14,930 13,003
389,976 12,800 10,971
397,781 16,527 13,418

1975

...........

New York City
197 4
July

89,065
88,265
89,006
88,023
92,098

2,269
1,862
2,545
1,869
2,807

2,232
1,793
2,504
1,776
2,716

5
9
56
55

4 ...................
I I
1 8
2 5

87,128
87,652
88,724
87,271

1,194
1,107
1,258
691

1,058
982
1,000
458

31
5
37
79

2 p .................
9 p .................
16p .................
23*>.................
30*>.................

88,847
89,337
88,517
86,916
87,850

1,198
1,001
2,147
1,482
2,284

768
769
1,875
1,032
1,862

46
9
53
224
236

74

310
223
219
226
186

71,317
72,205
70,214
69,359
69,454

37,649
37,452
37,235
36,773
36,735

14,057 12,076 1,031
913
14,176 12,384
12,385 10,499 1,062
879
10,931
9,195
13,720 10,702 1,826

495
451
402
406
581

455
428
422
451
611

222,407
222,764
223,439
222,561
223,292

88,027
88,199
88,736
88,552
88,618

3,788
3,794
3,802
3,775
3,793

92
69
83
67
115

1,854
1,802
1,679
1,749
1,747

99
97
85
83
83

2,122
2,112
2,112
2,107
2,120

6,472
6,566
6,644
6,496
6,708

13,446
13,550
13,514
13,357
13,508

51,532
51,613
51,745
51,830
51,955

212,363
211,869
212,232
211,792

3 ...................
1 0
1 7
2 4
3 1 ...................

8

31

1975
June

July

149

Outside
New York City
1974
July

3.

10.

17.
24.
31.

305,634
305,709
304,403
301,953
305,683

1975
June

4 ..

11..

18..

2 5 ..
July

Ip.
9P.

16*>.

23 p.
30*>.

305,670 18,441
308,228 20,194
307,467 18,500
302,485 15,105

14,991
14,252,
14,734
12,217

2,225
4,583
2,537
1,792:

770•
885
744
637

455
474
485
459

84,839 3,306
84,706 3,322
84,825 3,349
84,554 3,373

249
356
207
89

1,102
1,068
1,057
1,088

66
67
65
65

1,879
1,871
1,871
1,870'

6,052
5,911
6,098
6,050

12,304
12,412
12,489
12,614

51,807
51,811
51,806
51,782

306,056>
308,595!
303,442’
300,781
3 0 1 ,14C)

14,839'
14,925»
12,287r
10,714 h
11,355i

1,664 r
3,902:
1,6981
1,217
1,191

6451
64C1
465:
333
335i

457' 212,583 84,677 3,397
479'212,348 84,625! 3,422
457'212,019 84,494■ 3,427
336i 211,383 84,309» 3,438
276.211,228 83,931 3,445

156
318
248
107
118

1,108
1,012
1,057
1,064
1,069

62
63
66
64
64

1,875
1,861
1,861
1,881
1,873i

6,101
6,153
5,990i
5,916i
5,983

12,598
12,513
12,362
12,203
12,248

51,804
51,719
51,692
51,622
51,599

For notes see p. A-22.




17,605
19,946
14,907
12,60C
13,151

AUGUST 1975 □ WEEKLY REPORTING BANKS

A 19

ASSETS AND LIABILITIES OF LARGE COMMERCIAL BANKS— Continued
(In millions o f dollars)
Investments

Loans (cont.)
U.S. Treasury securities

Other (cont.)
To commer­
cial banks

D o­
mes­
tic

For­
eign

Other securities

Notes and bonds
maturing—

For­
Con­
sumer eign
instal­ govts.
ment

All
other

Total

Bills

Obligations
o f States
and
political
subdivisions

Certif­
icates

Other bonds,
corp. stocks,
and
securities

Wednesday

Total
Within 1 to
1 yr. 5 yrs.

After
5 yrs.

Tax
war­
rants 3

Certif.
of
All
All
other partici­ others
pation*
Large banks—
Total
1974

3,971
4,029
4,116
4,036
3,924

6,690
6,996
6,874
6,859
6,979

34,119 2,040 20,960 20,874 1,749
34,137 2,117 20,463 20,350 1,279
34,197 2,022 20,529 20,182 1,320
34,279 1,837 20,186 19,944 1,052
34,420 1,878 20,620 20,914 2,047

3,590
3,552
3,495
3,563
3,557

11,724
11,708
11,614
11,565
11,562

3,811
3,811
3,753
3,764
3,748

62,750
62,631
62,359
62,665
62,365

7,255
7,048
6,968
7,060
6,978

41,205
41,428
41,350
41,419
41,144

2,512
2,385
2,377
2,419
2,493

11,778 ....................July
3
11,770
.10
11,664
,17
11,767
.24
.31
11,750
1975

30,590
32,150
32,723
31,583

6,628
7,669
7,975
7,181

4,596
4,632
4,880
4,779

15,951
16,485
16,442
16,359

3,415
3,364
3,426
3,264

59,701
60,207
61,191
60,599

5,859
6,067
6,519
6,601

39,593
39,721
40,168
39,634

2,396
2,429
2,422
2,400

11,853
11,990
12,082
11,964

33,944 1,586 18,293 32,021
33,906 1,406 17,957 32,326
33,912 1,355 18,116 32,058
33,924 1,362 17,712 32,042
34,024 1,493 17,840 32,308

7,086
6,962
6,996
7,073
7,534

5,036
5,043
5,046
5,067
5,127

16,736
17,175
16,952
16,858
16,575

3,163
3,146
3,064
3,044
3,072

60,179
60,106
60,614
60,831
60,559

6,253
6,268
6,365
6,555
6,547

39,541
39,474
40,005
39,820
39,678

2,394
2,400
2,474
2,458
2,445

2v
11,991 ....................July
9p
11,964
11,770
.16*
.23*
11,998
. 30*
11,889

2,614 5,295 33,793
2,467 5,235 33,770
2,395 5,154 33,795
2,413 5,161 33,870
2,482
2,492
2,517
2,525
2,333

5,279
5,664
5,636
5,601
5,737

1,341
1,333
1,267
1,399

17,976
17,865
18,137
17,761

4
.11
.18
.25

New York City
1974
1,663
1,659
1,700
1,647
1,626

3.100
3,279
3,156
3.100
3,257

2,452
2,449
2,456
2,468
2,486

793
788
823
810
811

4,797
4,605
4,564
4,627
4,996

3,506
3,288
3,204
3,096
3,770

-4 0
-2 2 6
-1 7 3
-2 5 2
-3 6 9

404
377
365
373
426

1,884 1,258 10,948
1,877 1,260 10,924
1,806 1,206 10,758
1,759 1,216 11,052
1,767 1,208 10,838

2,246
2,155
2,128
2,354
2,272

5,844
5,911
5,844
5,892
5,743

631
546
543
545
551

2,227 ....................July
3
2,312
.10
2,243
.17
.24
2,261
2,272
.31

1,086
1,103
1,072
1,096

2,360
2,303
2,246
2,278

2,568
2,577
2,583
2,590

601
599
501
538

3,645
3,743
3,881
3,795

6,588
6,905
7,199
7,030

1,559
1,632
1,717
1,677

555
605
658
665

3,548
3,756
3,826
3,787

926
912
998
901

8,837
9,287
9,980
9,564

1,442
1,688
2,084
1,934

4,835
4,978
5,227
4,985

519
526
537
532

2,041
2,095
2,132
2,113

2,308
2,621
1,179 2,503
1,170 2,467
1,018 2,518

2.589
2.589
2.539
2.539
2,543

750
606
541
512
633

4,022
3,846
3,952
3,657
3,817

7,151
7,059
6,881
7,000
7,153

1,593
1,415
1,440
1,629
1,893

663
550
595
607
589

4,034
4,216
4,030
3,938
3,842

861
878
816
826
829

9,181
9,072
9,275
9,075
8,959

1,665
1,592
1,495
1,458
1,427

4,853
4,866
5,258
5,106
5,051

535
534
535
534
520

2p
2,128 ....................July
9p
2,080
16*
1,987
.23*
1,977
.30*
1,961

1975

1,110
1,101

4
11
18
.25

Outside
New York City
1974
2,308
2,370
2,416
2,389
2,298

3,590
3.717
3.718
3,759
3,722

31,667
31,688
31,741
31,811
31,934

1,247
1,329
1,199
1,027
1,067

16,163
15,858
15,965
15,559
15,624

17,368 1,789
17,062 1,505
16,978 1,493
16,848 1,304
17,144 1,678

3,186
3,175
3,130
3,190
3,131

9,840
9,831
9,808
9,806
9,795

2,553
2,551
2,547
2,548
2,540

51,802
51,707
51,601
51,613
51,527

5,009
4,893
4,840
4,706
4,706

35,361
35,517
35,506
35,527
35,401

1,881
1,839
1,834
1,874
1,942

9,551 ....................July
3
9,458
.10
9,421
.17
9,506
.24
9,478
.31

1,528
1,364
1,323
1,317

2,935
2,932
2,908
2,883

31,225
31,193
31,212
31,280

740
734
766
861

14,331
14,122
14,256
13,966

24,002
25,245
25,524
24,553

5,069
6,037
6,258
5,504

4,041
4,027
4,222
4,114

12,403
12,729
12,616
12,572

2,489
2,452
2,428
2,363

50,864
50,920
51,211
51,035

4,417
4,379
4,435
4,667

34,758
34,743
34,941
34,649

1,877
1,903
1,885
1,868

9,812
9,895
9,950
9,851

4
.11
.18
.25

1,372
1,391
1,338
1,355
1,315

2,971
3,043
3.133
3.134
3,219

31,355
31,317
31,373
31,385
31,481

836
800
814
850
860

14,271
14,111
14,164
14,055
14,023

24,870
25,267
25,177
25,042
25,155

5,493
5,547
5,556
5,444
5,641

4,373 12,702 2,302 50,998
4,493 12,959 2,268 51,034
4,451 12,922 2,248 51,339
4,460 12,920 2,218 51,756
4,538 12,733 2,243 51,600

4,588
4,676
4,870
5,097
5,120

34,688 1,859
34,608 1,866
34,747 1,939
34,714 1,924
34,627 1,925

9,863
9,884
9,783
10,021
9,928

2*
. 9*
.16*
.23*
.30*

1975

For notes see p. A-22.







/ REPORTING BANKS □ AUGUST 1975
ASSETS AND LIABILITIES OF LARGE COMMERCIAL BANKS— Continue
(In millions of dollars)
Deposits
Cash
items
in
process
of
collec­
tion

Re­
serves
with
F.R.
Banks

Cur­
rency
and
coin

Bal­
ances
with
do­
mestic
banks

Invest­
ments
in sub­
sidiar­
ies not
consol­
idated

Demand
Other
assets

Total
assets/
total
liabil­
ities

Total

IPC

States
and
polit­
ical
sub­
divi­
sions

U.S.
Govt.

V-

?S

36,811
31,247
33,180
31,874
35,192

23,874
23,899
25,660
26,683
20,314

3,911
4,558
4,515
4,591
4,489

10,045
10,041
11,149
10,253
11,466

1,609
1,607
1,602
1,573
1,594

26,451
26,516
26,091
26,875
28,772

497,400
491,842
495,606
491,825
499,608

164,144
157,390
158,172
153,925
161,763

114,626
112,955
114,364
111,748
115,119

6,409
5,971
5,892
5,666
6,272

935
859
745
637
733

34,689
33,455
34,358
32,898

24,526
20,231
23,545
24,262

4,291
4,734
4,711
4,945

11,832
11,823
12,261
11,858

1,730
1,735
1,739
1,761

37,553
37,372
36,389
36,572

507,419
505,230
509,194
502,052

163,432
162,574
166,493
160,567

116,625
118,749
119,008
115,245

5,991
5,933
6,130
7,084

771
728
742
646

35,959
32,615
34,022
30,758
31,346

20,618
18,612
25,019
23,845
21,914

4,566
4,731
4,828
4,986
5,034

12,504
12,207
12,717
11,634
11,625

1,755
1,776
1.750
1,743
1.751

38,905
37,855
36,542
36,282
36,904

509,210
505,728
506,837
496,945
497,564

169,097
162,384
163,819
157,217
158,928

121,565
117,715
119,284
115,375
115,896

6,413
5.932
5,968
5.933
5,956

914
868
764
699
736

12,100
10,166
10,879
12,787
13,547

6,816
7,846
7,366
8,322
6,433

457
523
508
504
506

4,178
3,881
5,064
4,715
5,522

726
710
711
710
710

8,202
8,473
8,373
8,876
9,506

121,544
119,864
121,907
123,937
128,322

44,487
45,433

24,872
24,223
24,449
25,370
26,215

410
349
297
347
461

558
492
399
343
399

12,143
12,472
12,088
13,032

7,423
6,360
7,310
7,294

505
511
517
539

4,627
5,003
4,909
5,444

788
789
795
795

13,172
13,006
12,195
12,223

125,786
125,793
126,538
126,598

25,333
25,802
26,713
26,073

366
454
310
1,118

416
387
382
329

12,004
11,044
11,364
10,601
11,076

6,352
6,405
7,572
6,753
6,001

511
520
504
515
544

5,225
4,953
5,589
5,371
4,752

800
800
795
798
795

13,712
13,454
12,677
12,547
13,219

127,451
126,513
127,018
123,501
124,237

27,286
25,482
25,799
25,174
25,906

325
228
268
318
335

520
477
422
384
405

24,711
21,081
22,301

17,058
16,053
18,294
18,361
13,881

3,454
4,035
4,007
4,087
3,983

5,867
6,160
6,085
5,538
5,944

883
897
891
863
884

18,249
18,043
17,718
17,999
19,266

375,856
371,978
373,699
367,888
371,286

89,754
88,732
89,915
86,378
88,904

5,999
5,622
5,595
5,319
5,811

377
367
346
294
334

17,103
13,871
16,235
16,968

3,786
4,223
4,194
4,406

7,205
6,820
7,352
6,414

942
946
944
966

24,381
24,366
24,194
24,349

381,633
379,437
382,656
375,454

t
i
i

91,292
92,947
92,295
'> 89,172

5,625
5,479
5,820
5,966

355
341
360
317

4,055
4,211
4,324
4,471
4,49Cl

7,279
7,254
7,128;
6,263
6,873i

955
976
955
945
956.

25,193
24,401
23,865
23,735
23,685

381,759
379,215
379,819
373,444
373,327

)

6,088
5,704
5,700
5,615
5,621

394
391
342
315
331

*
I
)
>

S 14,266
12,207
I 17,447
1 17,092
) 15,913
22.

47,631

94,279
92,233
93,485
[ 90,201
^ 89,990
r

AUGUST 1975 □ WEEKLY REPORTING BANKS

A 21

ASSETS AND LIABILITIES OF LARGE COMMERCIAL BANKS— Continued
(In millions of dollars)
Deposits (cont.)

Foreign

Govts.,
etc. 2

Com­
mer­
cial
banks

Borrowings
from—

Time and savings

Demand (cont.)

Certi­
fied
and
offi­
cers*
checks

IPC

Total6

Sav­
ings

Other

States
and
polit­
ical
sub­
divi­
sions

Do­
mes­
tic
inter­
bank

For­
eign
govts.2

Fed­
eral
funds
pur­
chased,
etc. 7

F.R.
Banks

Other
liabili­
ties,
etc. 8

Wednesday

Others

Large banks—
Total

1974
7,031
6,019
6,719
7,208
7,417

211,529
211,516
213,566
215,431
216,232

58,114
58,060
57,983
57,852
57,602

112,242
112,000
113,640
114,841
115,673

24,232
24,402
24,413
24,576
24,450

7,076
7,047
7,389
7,535
7,346

8,933
9,016
9,001
9,402
9,898

53,465
55,108
52,608
49,449
50,275

2,361
1,745
3,417
4.780
2.781

6,100
6,086
6,119
6,137
5,869

21,448
21,671
23,524
23,910
24,161

............... July 3
.......................... 10
........................... 17
........................... 24
........................... 31

1,262
1,197
1,246
1,296

4,745
4,431
4,729
4,591

7,257
7,132
6,879
7,316

224,283
224,776
223,053
223,660

64,338
64,629
64,874
64,981

113,107
113,458
112,135
112,905

24,905
24,559
24,130
23,740

7,992
7,987
7,885
7,870

12,450
12,595
12,553
12,708

51,527
49,960
52,210
50,141

430
89
340
972

3,406
3,224
3,236
3,190

23,317
23,519
22,909
22,585

............... June 4
........................... 11
............................18
........................... 25

1,462
1,081
1,132
1,117
1,163

4,720
4,956
4,921
4,946
5,013

7,999
6,455
6,464
6,188
6,019

223,211
223,137
222,672
223,091
222,709

65,483
65,664
65,638
65,574
65,406

112,922
112,639
112,658
113,290
113,214

22,834
22,882
22,865
23,006
22,975

7,928
7,793
7,677
7,691
7,685

12,592
12,683
12,391
12,040
11,983

49,659
53,268
52,108
47,729
48,499

176
34
1,055
1,852
21

3,530
3,577
3,635
3,740
3,780

22,299
22,104
22,426
22,218
22,508

.................July 2*
........................... 9*
........................... 16*
........................... 23*
; ......................... 30*

1,246
1,193
1,269
1,104
1,875 ^

4,970
5,469
5,143
5,088
5,431

1975

New York City

1974
1,042
971
1,048
908
1,645

3,695
4,081
3,864
3,802
4,149

3,040
2,385
2,936
3,871
3,835

42,581
42,687
43,413
44,401
44,686

5,067
5,062
5,056
5,039
5,006

25,314
25,078
25,420
25,945
26,091

1,906
1,970
2,106
2,087
2,069

4,663
4,705
4,926
4,947
4,667

5,151
5,345
5,317
5,715
6,155

12,862
13,206
11,664
11,300
12,780

1,015
995
1,018
1,095

3,422
3,220
3,387
3,328

3,668
3,652
3,307
3,876

44,399
44,683
44,079
44,232

5,815
5,885
5,926
5,883

24,939
24,982
24,530
24,816

1,244
1,304
1,297
1,262

3,581
3,521
3,474
3,348

7,807
7,947
7,871
7,963

14,396
14,339
15,248
14,255

1,273
896
894
904
943

3,378
3,651
3.670
3.670
3,712

3.610
2.610
2,818
2,832
2,727

44,396
44,517
44,380
44,496
44,162

5,930
5,933
5,886
5,853
5,806

25,087
25,221
25,411
25,699
25,511

1,137
1,168
1,186
1,194
1,262

3,439
3,337
3,257
3,307
3,289

7,848
7,885
7,690
7,456
7,338

14,268
16,452
15,388
12,865
13,733

100
890
861
150

2,413
2,355
2,402
2,374
2,130

7,894
7,824
9,024
9,540
9,560

................July 3
........................... 10
........................... 17
........................... 24
............................31

1,406
1,303
1,292
1,330

8,080
8,291
7,892
7,559

................June 4
........................... 11
........................... 18
........................... 25

1,609
1,511
1,579
1,676
1,709

7,473
7,624
7,900
7,828
7,866

................. July 2*
........................... 9*
........................... 16*
........................... 23*
............................30*

1975
430
340
680

546
1,055

Outside
New York City

1974
204
222
221
196
230

1,275
1,388
1,279
1,286
1,282

3,991
3,634
3,783
3,337
3,582

168,948
168,829
170,153
171,030
171,546

53,047
52,998
52,927
52,813
52,596

86,928
86,922
88,220
88,896
89,582

22,326
22,432
22,307
22,489
22,381

2,413
2,342
2,463
2,588
2,679

3,782
3,671
3,684
3,687
3,743

40,603
41,902
40,944
38,149
37,495

247
202
228
201

1,323
1,211
1,342
1,263

3,589
3,480
3,572
3,440

179,884
180,093
178,974
179,428

58,523
58,744
58,948
59,098

88,168
88,476
87,605
88,089

23,661
23,255
22,833
22,478

4.411
4,466
4.411
4,522

4,643
4,648
4,682
4,745

37,131
35,621
36,962
35,886

189
185
238;
213i
22C1

1,342
1,305
1,251
1,276
1,301

4,389
3,845
3,646
3,356
3,292

178,815
178,620
178,292
178,595
178,547

59,553
59,731
59,752
59,721
59,600

87,835
87,418
87,247
87,591
87,703

21,697
21,714
21,679
21,812
21,713

4,489
4,456
4,420
4,384
4,396

4,744
4,798
4,701
4,584
4,645

35,391
36,816
36,720
34,864
34,766

2,261
1,745
2,527
3,919
2,631

3,687
3,731
3,717
3,763
3,739

13,554
13,847
14,500
14,370
14,601

................. July 3
........................... 10
........................... 17
............................24
........................... 31

89
292

2,000
1,921
1,944
1,860

15,237
15,228
15,017
15,026

................. June 4
........................... 11
........................... 18
........................... 25

101
34
509
797
21

1,921
2,066
2,056
2,064
2,071

14,826
14,480
14,526
14,390
14,642

................. July 2*
........................... 9*
........................... 16*
........................... 23*
........................... 30*

1975

For notes see p. A-22.




A 22

WEEKLY REPORTING BANKS □ AUGUST 1975
ASSETS AND LIABILITIES OF LARGE COMMERCIAL BANKS— Continued
(In millions of dollars)
Reserves
for—

Wednesday
Loans

Secur­
ities

Memoranda
Total
capital
ac­
counts

Total
loans
(gross)
ad­
justed 9

Total
loans
and
De­
mand
invest­
ments deposits
ad­
(gross)
justed i o
ad­
justed^

Total

Large negotiable
time CD’s
included in time
and savings deposits11
Issued
to
IPC’s

Issued
to
others

All other large
time deposits12

Total

Issued
to
IPC’s

Issued
to
others

Gross
liabili­
ties of
banks
to
their
foreign
branches

Large banks—
Total

1974
5,040
5,033
5,035
5,030
5,068

33,251
33,231
33,103
33,101
33,397

292,796
292,787
293,749
292,360
297,160

376,420 98,406
375,768 101,219
376,290 100,952
374,969 99,577
380,439 101,655

80,848
81,129
82,973
84,791
85,491

56,228
56,190
57,542
58,605
59,109

24,620
24,939
25,431
26,186
26,382

4 ...................
11...................
1 8
2 5

5,777
5,786
5,754
5,724

35,179
35,234
35,131
35,145

283,844
285,822
284,148
282,486

374,135
378,179
378,062
374,668

101,962
104,715
104,376
103,280

82,663
83,122
81,464
81,996

54,542
54,862
53,558
54,152

28,121
28,260
27,906
27,844

35,487
35,214
34,581
34,330

18,440
18,281
18,039
17,949

17,047
16,933
16,542
16,381

2,533
2,545
2,368
1,883

2 p .................
9 p .................
16p .................
23 p .................
30*>.................

5,713
5,710
5,698
5,697
5,734

35,456
35,445
35,355
35,332
35,316

284,614
287,314
282,608
280,553
280,573

376,814
379,746
375,280
373,426
373,440

107,114
104,392
104,511
103,500
103,437

81,398
81,372
80,989
81,504
81,409

54,073
53,855
53,972
54,474
54,299

27,325
27,517
27,017
27,030
27,110

33,842
33,814
33,994
33,935
33,564

17,798
17,888
17,879
17,916
17,737

16,044
15,926
16,115
16,019
15,827

1,429
1,809
3,130
2,742
2,377

1,377
1.375
1.375
1,374
1,391

8,679
8,673
8,652
8,654
8,736

70,716
70,601
70,840
70,452
73,148

85,170
84,813
84,802
84,600
87,756

21,517
22,335
22,114
21,854
23,157

26,980
27,116
27,827
28,672
28,723

17,927
17,774
18,078
18,557
18,520

9,053
9,342
9,749
10,115
10,203

July

3 ...................
10...................
1 7
2 4
31...................

June

July

3,177
2,804
4,583
4,711
3,314

1975

New York City

1974
July

3.
10.
17.
24.
31.

June

4 ..
11..
18..
2 5 ..

1,695
1,705
1,679
1,664

9,260
9,264
9,251
9,247

69,559
69,375
69,473
69,123

84,984
85,567
86,652
85,717

22,077
22,038
23,029
22,787

27,815
27,922
27,408
27,596

17,507
17,556
17,119
17,350

10,308
10,366
10,289
10,246

8,131
8,279
8,120
8,083

4,867
4,895
4,813
4,816

3,264
3,384
3,307
3,267

1,663
1,856
1,620
1,225

July

2p .
9p .
16p .
23 p.
30».

1,643
1.650
1.651
1,653
1,676

9,410
9,396
9,402
9,382
9,357

70,637
71,336
69,307
68,639
68,858

86.969
87,467
85,463
84,714
84.970

24,388
22,300
22,507
22,681
22,952

27,697
27,919
28,002
28,373
28,171

17,544
17,791
18,094
18,462
18,273

10,153
10,128
9,908
9,911
9,898

8,059
8,067
8,018
7,820
7,707

4.869
4.870
4,862
4,804
4,777

3,190
3,197
3,156
3,016
2,930

712
1,052
2,231
1,901
1,390

3,663
3,658
3,660
3,656
3,677

24,572
24,558
24,451
24,447
24,661

222,080
222,186
222,909
221,908
224,012

291,250
290,955
291,488
290,369
292,683

76,889
78,884
78,838
77,723
78,498

53,868
54,013
55,146
56,119
56,768

38,301
38,416
39,464
40,048
40,589

15,567
15,597
15,682
16,071
16,179

4,082
4,081
4,075
4.060

25,919
25,970
25,880
25,898

214,285
216,447
214,675
213,363

289,151
292,612
291,410
288,951

79,885
82,677
81,347
80,493

54,848
55,200
54,056
54,400

37,035
37,306
36,439
36,802

17,813
17,894
17,617
17,598

27,356
26,935
26,461
26,247

13,573
13,386
13,226
13,133

13,783
13,549
13,235
13,114

870
689
748
658

4,070
4.060
4,047
4,044
4,058

26,046
26,049
25,953
25,950
25,959

213.977
215.978
213,301
211,914
211,715

289,845
292,279
289,817
288,712
288,470

53,701
53,453
52,987
53,131
53,238

36,529
36,064
35,878
36,012
36,026

17,172
17,389
17,109
17,119
17,212

25,783
25,747
25,976
26,115
25,857

12,929
13,018
13,017
13,112
12,960

12,854
12,729
12,959
13,003
12,897

717
757
899
841
987

1,919
1,574
2,730
3,656
2,422

1975

Outside
New York City

1974
July

3.
10.
17.
24.
31.

June

4.
11.
18.
25.

1,258
1,230
1,853
1,055
892

1975

July

2p .
9p .

16*>.
23*.
30*.

1 Includes securities purchased under agreements to resell.
2 Includes official institutions and so forth.
3 Includes short-term notes and bills.
4 Federal agencies only.
5 Includes corporate stocks.
6 Includes U.S. Govt, and foreign bank deposits, not shown separately.
7 Includes securities sold under agreements to repurchase.




8 Includes minority interest in consolidated subsidiaries.
9 Exclusive of loans and Federal funds transactions with domestic com­
mercial banks.
10 All demand deposits except U.S. Govt, and domestic commercial
banks, less cash items in process of collection.
11 Certificates of deposit issued in denominations of $100,000 or more.
12 All other time deposits issued in denominations of $100,000 or more
(not included in large negotiable CD’s).

AUGUST 1975 □ BUSINESS LOANS OF BANKS

A 23

COMMERCIAL AND INDUSTRIAL LOANS OF LARGE COMMERCIAL BANKS
(In millions of dollars)
Outstanding

Net change during—

1975

Industry

1975

1975

1974

1975

1974

IV

1st
half

2nd
half

July
30

July
23

July
16

July
9

July

1,988
7.070
3,527
2,492
4.070

1,995
7,118
3,543
2,530
4,085

2,011
7,235
3,570
2,577
4,148

2,018
7,328
3,537
2,664
4,157

2,030
7,344
3,482
2,665
4,145

-3 5
-357
17
-231
-71

18
-485
-7 7
-2 4
-152

-8 0
-201
-5 3
-138
-155

-21
-661
-295
-207
-297

39
-653
-7
19
-421

11
77
-127 -1,314
365 -302
-178
-188
-265
-718

140
222
705
75
247

3,080
3,243
2,538
2,837
2,219

3,154
3,321
2,497
2,895
2,235

3,128
3,295
2,499
2,956
2,245

3,168
3,317
2,516
3,015
2,253

3,253
3,271
2,606
3,078
2,248

-232
20
60
-285
-4

-238
-1
90
-122
57

-104
-6 4
-4 0
-7 3
-3 8

-517 -1,092
-136
-151
-51
279
-327
67
12 -295

484 -1,609
-725
-287
473
228
-2 6 0
-5 5
-135
-283

984
-618
967
256
23

5,082 5,092 5,057 4,976 5,012
1,126 1,069 1,069 1,081 1,121
5,611 5,598 5,636 5,667 5,681
6,145 6,238 6,260 6,225 6,288
6,009 6,009 5,996 6,034 6,040
2,127 2,207 2,267 2,277 2,283
7,100 7,030 7,108 7,132 7,231
5,573 5,552 5,551 5,520 5,516
10,723 10,797 10,831 10,834 10,883
9,840 9,866 9,812 10,006 9,731
2,315 2,228 2,349 2,285 2,316

203
21
-9
-164
-5 4
-1 7
-9 5
12
-111
80
55

83
-5 4
-107
-153
18
-71
-7 5
-2 5
-7
146
150

-5 9
-172
-107
-7 3
-164
-9 1
-2 1 4
-3 2
-1 7 0
-4 2 6
21

114 -2 7 2
-3 2 4
-648
-553
-555
-193
-205
-150
-173
14 -369
-405 -1,018
-541
-81
-422
-698
-8 2
-290
28
571

556 -158
703 -9 7 2
349 -1,108
-246
-398
261
-323
90 -355
609 -1,423
-6 2 2
-195
171 -1,120
387 -3 7 2
309
599

846
508
484
-465
283
-2
1,697
36
304
744
-5 6

4,880 4,851 4,819 4,705 4,714
99,595 99,910 100,419 100,715 100,938

349
-848

223
-31
241
53
-823 -2,464 -4,020 -6,653

294
-239
2,669 -10,673

-447
6,933

Total commercial and industrial loans
of large commercial banks.......... 120,666 121,082 121,729 122,077 122,326 -1,219

-844 -2 ,6 2 0 -3 ,8 6 8 -6,213

3,559 -10,081

8,354

Durable goods manufacturing:
Primary metals...............................
Machinery.......................................
Transportation equipment............
Other fabricated metal products. .
Other durable goods......................
Nondurable goods manufacturing:
Food, liquor, and tobacco............
Textiles, apparel, and leather........
Petroleum refining.........................
Chemicals and rubber...................
Other nondurable goods...............
Mining, including crude petroleum
and natural gas...........................
Trade: Commodity dealers...............
Other wholesale.....................
Retail......................................
Transportation...................................
Communication...............................
Other public utilities..........................
Construction.......................................
Services................................................
All other domestic loans...................
Bankers acceptances.........................
Foreign commercial and industrial
loans............................................
Total classified loans.........................
Comm, paper included in total clas­
sified loans1 .......................................

2

July

June

May

203

For notes see table below.

“TERM" COMMERCIAL AND INDUSTRIAL LOANS OF LARGE COMMERCIAL BANKS
(In millions of dollars)
Outstanding
Industry

Durable goods manufactur­
ing :
Primary metals...................
Machinery..........................
Transportation equipment.
Other fabricated metal
products..........................
Other durable goods..........
Nondurable goods manufac­
turing :
Food, liquor, and tobacco.
Textiles, apparel, and
leather.............................
Petroleum refining.............
Chemicals and rubber.......
Other nondurable goods. .
Mining, including crude pe­
troleum and natural gas.
Trade: Commodity dealers..
Other wholesale........
Retail.........................
Transportation.......................
Communication.....................
Other public utilities..............
Construction..........................
Services...................................
All other domestic loans . . . .
Foreign commercial and in­
dustrial loans..................
Total loans.............................

1974

1975

1975

June
25

May
28

Apr.
30

Mar.
26

Feb.
26

Jan.
29

Dec.
31

Nov.
27

II

I

1,269
3,864
1,725

1,288
3,977
1,740

1,280
4,269
1,726

1,323
4,302
1,705

1,284
4,071
1,672

1,237
4,117
1,712

1,249
4,138
1,737

1,210
4,145
1,673

1,176
4,049
1,586

4
-9 4
68

74
-7 4
-1

77
249
138

28
610
125

78
-1 6 8
67

1,196
2,058

1,222
2,090

1,245
2,122

1,280
2,210

1,312
2,251

1,323
2,256

1,243
2,288

1,197
2,391

1,113
2,361

-9 0
-161

115
-1 4 0

131
123

112
161

25
-301

IV

1st
half

III

1,440

1,514

1,616

1,571

1,561

1,614

1,703

1,763

1,674

-4 7

-2 0 2

114

78

-2 4 9

1,133
1,828
1,666
1,139

1,095
1,709
1,762
1,143

1,075
1,611
1,784
1,114

1,091
1,617
1,814
1,126

1,158
1,483
1,846
1,130

1,083
1,458
1,812
1,119

1,124
1,542
1,839
1,221

1,145
1,518
1,878
1,235

1,179
1,272
1,818
1,170

-6 3
226
-8 4
13

13
-3 5
-3 2
-105

-6
421
100
31

23
134
41
33

-5 0
191
-1 1 6
-9 2

3,801
152
1,344
2,111
4,399
1,130
4,018
2,360
5,155
3,237

3,734
148
1,329
2,136
4,425
1,133
4,045
2,314
5,140
3,258

3,646
140
1,344
2,143
4,424
1,159
4,047
2,291
5,246
3,186

3,626
142
1,387
2,192
4,492
1,148
4,017
2,272
5,352
3,210

3,537
150
1,450
2,283
4,524
1,135
4,034
2,197
5,430
3,082

3,446
153
1,420
2,298
4,505
1,125
3,870
2,191
5,370
3,144

3,523
169
1,472
2,369
4,455
1,158
3,885
2,224
5,320
3,079

3,701
155
1,492
2,594
4,550
1,082
3,963
2,294
5,532
3,224

3,620
171
1,431
2,602
4,379
1,076
3,987
2,281
5,417
3,255

197
-2
-121
-1 4 7
-9 9
-2
11
117
-2 9 0
176

-1 6 4
-5
-4 2
-311
-2 6
53
71
-9 7
-102
-1 4 2

362
16
43
67
201
53
291
22
182
102

209
-2
43
99
-7 6
-1
229
142
77
105

33
-7
-163
-4 5 8
-1 2 5
51
82
20
-3 9 2
34

2,676

2,594

2,547

2,596

2,528

2,544

2,524

2,457

2,473

66

71

56

-1 4 7

137

-3 2 2 -1,081

2,773

47,701 47,796 48,015 48,473 48,118 47,797 48,262 49,199 48,090

160 weekly reporting banks are included in this series;
these banks classify, by industry, commercial and industrial loans amount­
ing to about 90 per cent of such loans held by all weekly reporting banks
and about 70 per cent of those held by all commercial banks.




1974

1975

July
30

1 New item to be reported as of the last Wednesday of each month.
N o t e . — About

Net change during—

2,023 -1 ,4 0 3

For description of series see article “ Revised Series on Commercial and
Industrial Loans by Industry,” Feb. 1967 B u l l e t i n , p. 209.
Commercial and industrial “term” loans are all outstanding loans with
an original maturity of more than 1 year and 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.

A 24

DEMAND DEPOSIT OWNERSHIP □ AUGUST 1975
GROSS DEMAND DEPOSITS OF INDIVIDUALS, PARTNERSHIPS, AND CORPORATIONS1
(In billions o f dollars)
Type o f holder
Class o f bank, and quarter or month
Financial
business

Nonfinancial
business

Consumer

Foreign

All
other

Total
deposits,
IPC

All insured commercial banks:
1970—Dec.........................................................................................

17.3

92.7

53.6

1.3

10.3

175.1

1971—Sept........................................................................................

17.9
18.5

91.5
98.4

57.5
58.6

1.2
1.3

9 .7
10.7

177.9
187.5

1972—Mar.........................................................................................

20.2
17.9
18.0
18.9

92.6
97.6
101.5
109.9

54.7
60.5
63.1
65.4

1.4
1.4
1.4
1.5

12.3
11.0
11.4
12.3

181.2
188.4
195.4
208.0

1973—Mar........................................................................................
June........................................................................................
Sept........................................................................................
Dec.........................................................................................

18.6
18.6
18.8
19.1

102.8
106.6
108.3
116.2

65.1
67.3
69.1
70.1

1.7
2 .0
2.1
2 .4

11.8
11.8
11.9
12.4

200.0
206.3
210.3
220.1

1974—Mar........................................................................................
June.......................................................................................
Sept.........................................................................................
D ec.........................................................................................

18.9
18.2
17.9
19.0

108.4
112.1
113.9
118.8

70.6
71.4
72.0
73.3

2.3
2.2
2.1
2.3

11.0
11.1
10.9
11 .7

211.2
215.0
216.8
225.0

1975—Mar........................................................................................
June*.....................................................................................

18.6
19.4

111 .3
115.1

73.2
74.8

2.3
2.3

10.9
10.6

216.3
222.2

Weekly reporting banks:
1971

D ec.........................................................................................

14.4

58.6

24.6

1.2

5.9

104.8

1972

D ec.........................................................................................

14.7

64.4

27.1

1.4

6.6

114.3

1973

Dec.........................................................................................

14.9

66.2

28.0

2.2

6.8

118.1

1974

July........................................................................................
Aug.........................................................................................
Sept........................................................................................
Oct..........................................................................................
Nov........................................................................................
Dec.........................................................................................

14.4
14.1
13.9
14.7
14.6
14.8

63.5
62.6
64.4
64.4
65.9
66.9

28.5
28.0
28.4
28.4
28.7
29.0

2.1
1.9
2 .0
2 .0
2.1
2 .2

6.5
5.8
6.3
6 .4
6.5
6.8

115.1
112.5
115.0
115.8
117.7
119.7

1975

Jan..........................................................................................
Feb.........................................................................................
Mar........................................................................................
Apr.........................................................................................
M ay.......................................................................................
June*.....................................................................................

14.8
14.4
14.1
15.0
14.2
15.1

65.6
63.1
63.2
63.3
63.1
65.1

29.2
27.9
28.2
30.1
29.2
29.5

2.2
2.3
2.2
2.2
2.3
2.2

6.6
6.2
6 .4
6.5
6 .2
6.2

118.3
113.9
114.1
117.0
115.0
118.1

1 Including cash items in process o f collection.
N o t e . — Daily-average balances maintained during month as estimated

from reports supplied by a sample o f commercial banks. For a detailed
description o f the type o f depositor in each category, see June 1971
B u l l e t i n , p. 466.

DEPOSITS ACCUMULATED FOR PAYMENT OF PERSONAL LOANS
(In millions of dollars)
Class of
bank
All commercial............................
Insured......................................
National m em ber..................
State member...........................
All member..................................

Dec. 31,
1972
559
554
311
71
381

Dec. 31,
1973
507
503
288
64
352

June 30,
1974
460
457
265
65
330

Dec, 31,
1974
389
387
236
39
275

i Beginning Nov. 9,1972, designation o f banks as reserve city banks for
reserve-requirement purposes has been based on size o f bank (net demand
deposits o f more than $400 million), as described in the B u l l e t i n for
July 1972, p. 626. Categories shown here as “Other large” and “All other
member” parallel the previous “Reserve City” (other than in New York
City and the City o f Chicago) and “Country” categories, respectively
(hence the series are continuous over time).




Class of
bank
All member—Cont.
Other large banks 1............
All other member 1.............
All nonmember........................
Noninsured...........................

Dec. 31,
1972

69
313
177
172
5

Dec. 31,
1973

58
294
155
152
3

June 30,
1974

63
267
130
127
3

Dec, 31,
1974

69
206
115
112
3

N o t e . — Hypothecated deposits, as shown in this table, are treated one
way in monthly and weekly series for commercial banks and in another
way in call-date series. That is, they are excluded from “Time deposits”
and “Loans” in the monthly (and year-end) series as shown on p. A-14;
from the figures for weekly reporting banks as shown on pp. A-l 8-A-22
(consumer instalment loans); and from the figures in the table at the
bottom of p. A-l 3. But they are included in the figures for “Time de­
posits” and “Loans” for call dates as shown on pp. A-14-A-17.

AUGUST 1975 □ LOAN SALES BY BANKS; OPEN MARKET PAPER

A 25

LOANS SOLD OUTRIGHT BY LARGE COMMERCIAL BANKS
(Amounts outstanding; in millions of dollars)
To selected related institutions1
By type of loan

Date

Total
Commercial
and
industrial

Real
estate

All
other

1975—Apr.

2.........................
9.........................
16.........................
23.........................
30.........................

4,584
4,587
4,529
4,519
4,587

2,714
2,748
2,715
2,704
2,744

202
201
201
197
204

1,668
1,638
1,613
1,618
1,639

May

7.........................
14.........................
21.........................
28.........................

4,582
4,612
4,625
4,665

2,813
2,808
2,776
2,820

199
200
202
201

1,570
1,604
1,647
1,644

June

4.........................
11.........................
18.........................
25.........................

4,615
4,628
4,631
4,667

2,829
2,849
2,849
2,895

198
198
198
196

1,588
1,581
1,584
1,576

July

2.........................
9.........................
16.........................
23.........................
30.........................

4,648
4,599
4,484
4,470
4,500

2,907
2,827
2,755
2,734
2,763

196
192
189
188
186

1,545
1,580
1,540
1 ,548
1,551

1 To bank’s own foreign branches, nonconsolidated non­
bank affiliates of the bank, the bank’s holding company (if
not a bank), and nonconsolidated nonbank subsidiaries of
the holding company.
N o t e . — Series changed on Aug. 28, 1974. For a comparison
of the old and new data for that date, see p. 741 of the Oct.
1974 B u l l e t i n . Revised figures received since Oct. 1974
that affect that comparison are shown in note 2 to this table
in the Dec. 1974 B u l l e t i n , p. A-27.

COMMERCIAL PAPER AND BANKERS ACCEPTANCES OUTSTANDING
(In millions of dollars)
Dollar acceptances

Commercial paper

End
of
period

Bank-related 5

Financial

Held b y -

Based on-

c o m n a n ie s1

Non­
finan­
All
cial
issuers
com­ Dealer- Di­
Dealer- Diplaced2 rectly- panies4 placed rectlyplaced
placed 3

Total

Total

F.R. Banks

Own
bills

Bills
bought

Own
acct.

For­
eign
corr.6

Others

ImEx­
ports
ports
into
from
United United
States States

All
other

3,134
1,997

3,603
4,317
4,428
5,451
7,058

1,198
1,906
1,544
1,567
2,694

983
1,447
1,344
1,318
1,960

215
459
200
249
735

193
164
58
64
57

191
156
109
146
250

2,022
2,090
2,717
3,674
4,057

997
1,086
1,423
1,8fc9
2,601

829
989
952
1,153
1,561

1,778
2,241
2,053
2,408
2,895

524
1,226
1,938

1,449
1,411
2,943

7,889
6,898
8,892

3,480
2,706
2,837

2,689
2,006
2,318

791
700
519

261
106
68

254
179
581

3,894
3,907
5,406

2,834
2,531
2,273

1,546
1,909
3,499

3,509
2,458
3,120

10,046
9,968
10,562
10,885
12,659
14,003
14,532
12,694

1,978
1,579
1,465
2,425
2,185
2,046
1,947
1,874

5,106
5,373
5,585
6,350
6,446
6,408
6,697
6,444

11,727
13,174
15,686
16,167
16,035
16,882
17,553
18,484

3,089
3,535
3,499
3,388
3,347
3,291
3,789
4,226

2,642
3,066
2,983
2,866
2,942
2,872
3,290
3,685

447
469
516
522
405
419
499
542

373
304
218
277
504
218
611
999

732
795
1,023
1,202
1,459
2,037
'1,756
'1,109

7,532
8,540
10,947
11,300
10,724
11,335
'11,398
'12,150

2,952
3,287
3,589
3,585
3,526
3,793
3,810
4,023

2,899 5,876
3,219 6,668
3,774 8,323
3,933 8,649
3,806 8,703
3,759 9,330
3,709 10,035
4,067 10,394

14,648
14,732
14,264
14,018
12,607

1,946
1,854
1,738
1,654
1,587

6,625
7,228
7,190
6,931
7,017

18,602
18,579
18,730
18,727
18,108

4,357
4,864
4,773
4,485
4,450

3,903
4,370
4,085
3,900
3,892

454
494
688
585
558

966
993
665
1,185
865

r560
'325
'263
'235
234

'12,718
'12,398
'13,029
'13,034
12,559

4,120
3,974
3,845
3,690
3,665

4,314
4,210
4,296
4,206
4,186

196 6
196 7
196 8
196 9
1970...........

13,645
17,085
21,173
32,600
33,071

2,332
2,790
4,427
6,503
5,514

10,556
12,184
13,972
20,741
20,424

757
2,111
2,774
5,356
7,133

1,160
352

1971...........
1972...........
1973...........

32,126
34,721
41,073

5,297 20,582
5,655 22,098
5,487 27,204

6,247
6,968
8,382

1974—M ay..
June..
July..
Aug...
Sept..
O ct...
N o v ..
Dec. .

46,171
44,846
45,561
47,967
49,087
51,754
51,883
49,070

5,699
4,970
4,655
5,308
5,333
5,242
4,860
4,611

30,426
29,908
30,344
31,774
31,095
32,509
32,491
31,765

1975-Jan...
Feb...
M a r..
Apr. .
M ay..

51,528
52,325
50,745
51,552
51,238

5,029
5,167
5,342
5,461
5,889

31,851
32,426
31,139
32,073
32,742

1 Financial companies are 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 As reported by dealers; includes all financial company paper sold in
the open market.
3 As reported by financial companies that place their paper directly
with investors.




Accepting banks

10,168
10,396
10,589
10,831
10,257

4 Nonfinancial companies include public utilities and firms engaged
primarily in activities such as communications, construction, manufac­
turing, mining, wholesale and retail trade, transportation, and services.
5 Included in dealer- and directly-placed financial company columns.
Coverage of bank-related companies was expanded in Aug. 1974. Most
of the increase resulting from this expanded coverage occurred in directlyplaced paper.
6 Beginning November 1974, the Board of Governors terminated the
System guarantee on acceptances purchased for foreign official accounts.

A 26

INTEREST RATES o AUGUST 1975
PRIME RATE CHARGED BY BANKS
(Per cent per annum)

Effective date
1974—Apr. 11.
15.
19.

934- 98/10-

1974—June

10«
10b-10Vio1014

10-IO1 /10-

25.
26.

10.
21.

30.

111/2 B-1134118/10
111/ 2- 1134 .118/10

14............

July

5,
9,
23,

1034-11

IOI/2 -IO6 /10-

3.

IO6/10-1034 b

6.
7.

10.
13.
17.

20

1034 B -ll

-11
106/ 1^ 103411b
I 1B
11-1 1 ^ 1
11!4 B -ll 4/l0
1114-11-4/io
—11 Vi *
111/2 b-1134

Aug. 20,

1034-12B

Sept. 26,

1034- 111/ 21134 - 12b

Oct.

15,

21

N o t e .—Beginning Nov. 1971, several banks adopted a floating prime
rate keyed to money market variables. . denotes the predominant prime
rate quoted by a majority of large “money market” banks to large busi­
nesses.

3.
4.

10.
18.
24.

111/4

25............
Dec.

2 ............

934-10-1014
-101/2-

1975—Jan.

9 ............

91/2-10IOI/4 . IOI/2
91/2-934-10101/4.
91/2-93410.-1014
91/ 2-9 34 .-1 0
91/ 2 --9 34-10
91/ 2 --9 3 4

13............

1034-1 l ^ ll 34 b-12
103/4-111/4in /z 11%IO3/4-III/ 4iiV iny4

7.

1975—Feb.

10vi-103411.
101/ 2- 1034 . 11
10- 101/ 2103/4 .
10- 1014 101/ 2103/4 .
10- 1014 101/2 -

19............

1134m-118/10.
12
118/10—12b
12B-1214
1034-12b1214

3.

Effective date

1034-11.-

18.............

1134b-118/10

28.

1034-1111% -IH/2

4 ............

25.
26.

2.

Nov.

11............

106/io—

May

II I/i­
l l 1/4 -1 11/ 2 B

111/2 B-1134

101/2b

101/2B1034—11
101/2B-

Rate

24.

W Arn-W ho
10V4m104/io—
Id/2
1014-lOVio104/10-

Effective date

I li/2B-ll 6/10_ 1974— Oct. 28............
ny4
111/4-111/2 B116/10

3.
7.

10y4Apr. 23.
24.

Rate

Effective date

15............
2 0 ............
2 8 ............
2 9 ............

Mar.

3.
5.

6.

834-9-914-91/2-934
834-9-914"
834-9b
8V2-8 34 b-9
81/2B-83/4
814-81/281/4-81/2
734- 814 - -

17.
18.
24.
25.
31.

81/2
734-8.-814
734-8b
71/2-734.-8
71/ 2 --734-8
71/2--734
714- 71/ 2. -

May 20.
26.

7 14--7 i/i
7-7 14--7 Vi

June

9.

ey4-im -iy 4

July

18.
28.

7 -7 14-- 7 Vi

10.

734

714-71/2-

Effective Apr. 16, 1973, with the adoption of a two-tier or “dual prime
rate,” this table shows only the “large-business prime rate,” which is the
range o f rates charged by commercial banks on short-term loans to large
businesses with the highest credit standing.

RATES ON BUSINESS LOANS OF BANKS
Size o f loan (in thousands o f dollars)

1-9

All sizes

10-99

100-499

500-999

1,000 and over

Center
M ay

Feb.

1975

1975

M ay

1975

Feb.

1975

May

1975

Feb.

1975

M ay

1975

Feb.

1975

Short-term
35 centers.........................................
New York C ity..........................
7 Other Northeast.....................
8 North Central.........................
7 Southeast..................................
8 Southwest.................................
4 West Coast...............................

8.16
7.88
8.37
8.00
8.70
8.34
8.33

9.94
9.61
10.31
9.87
10.24
10.01
9.99

9.57
9.27
10.00
9.11
9.86
9.35
9.72

10.94
10.82
12.07
10.55
10.59
10.36
11.23

9.10
9.02
9.34
8.82
9.40
8.89
9.23

10.73
10.60
11 .31
10.49
10.52
10.47
10.75

8.52
8.55
8.63
8.32
8.97
8.32
8.58

10.25
10.14
10.64
10.09
10.21
10.11
10.22

8.18
7.86
8.51
7.91
8.67
8.24
8.23

9.93
9.74
10.09
9.85
10.22
9.83
10.05

7.90
7.76
7.95
7.82
8.15
8.15
8.18

9.73
9.50
9.96
9.74
10.12
9.84
9.84

10.14
9.98
9.97
10.97
10.35
10.57
9.77

8.23
8.16
7.56
8.12
7.97
8.47
8.40

10.18
9.87
10.98
10.24
9.00
10.75
10.17

7.84
7.88
7.91
8.03
8.40
8.29
7.69

8.98
7.61
10.90
10.22
9.76
10.37
9.40

10.57
10.46
10.51
10.17
11.11
10.46
11.28

8.47
9.02
7.96
8.09
9.47
8.68
8.67

10.16
9.78
10.20
9.45
11 .95
10.09
10.94

8.05
8.31
8.28
6.80
9.50
8.28
8.66

10.21
9.53
10.49
11.81
9.16
9.60
9.78

Revolving credit
35 centers.........................................
New York C ity..........................
7 Other Northeast.....................
8 North Central.........................
7 Southeast..................................
8 Southwest.................................
4 West C oast..............................

7.95
7.92
7.92
8.20
8.41
8.40
7.84

9.20
7.84
10.83
10.32
9.77
10.54
9.52

9.59
9.04
10.45
9.78
9.90
9.44
8.91

11 .03
10.98
12.05
11.77
10.61
11.61
10.67

8.91
8.94
8.66
10.01
8.61
8.66
8.54

10.56
10.59
10.60
11.14
10.41
11.18
10.13

8.58
8.37
8.21
9.24
8.68
8.51
8.44

Long-term
35 centers..................
New York C ity ..,
7 Other Northeast
8 North Central..
7 Southeast...........
8 Southwest..........
4 West Coast. . . .




8.22
8.38
8.53

7.22
8.91
8.47
8.71

10.26
9.62
10.48
11 .33
10.42
9.87
10.07

9.94
9.92
9.99
9.06
10.94
10.74
9.15

10.54
9.27
10.99
10.32
9.67
11 .99
8.36

9.36
9.50
9.76
8.68
9.14
9.86
9.20

10.55
10.82
10.77
10.25
10.47
10.12
10.77

8.83
8.69
9.41
8.64
7.93
8.37
9.06

AUGUST 1975 □ INTEREST RATES

A 27

MONEY MARKET RATES
(Per cent per annum)
Prime
commercial
paper1

Period

90-119
days
1967.........................
1968.........................
1969.........................

4 to 6
months

Finance
CO.
Prime
paper
bankers’
placed
accept­
ances,
directly,
90 days3
3 to 6
months2

U.S. Government securities5
Fed­
eral
funds
rate4

3-month bills6
Rate
on new
issue

Market
yield

6-month bills 6
Rate
on new
issue

Market
yield

9- to 12-month issues
1-year
bill (mar­ Other7
ket yield)6

3- to 5year
issues 7

5.10
5.90
7.83

4.89
5.69
7.16

4.75
5.75
7.61

4.22
5.66
8.21

4.321
5.339
6.677

4.29
5.34
6.67

4.630
5.470
6.853

4.61
5.47
6.86

4.71
5.46
6.79

4.84
5.62
7.06

5.07
5! 59
6.85
7.37

1970.........................
1971.........................
1972.........................
1973.........................
1974.........................

4.66
8.20
10.05

7.72
5.11
4.69
8.15
9.87

7.23
4.91
4.52
7.40
8.62

7.31
4.85
4.47
8.08
9.92

7.17
4.66
4.44
8.74
10.51

6.458
4.348
4.071
7.041
7.886

6.39
4.33
4.07
7.03
7.84

6.562
4.511
4.466
7.178
7.926

6.51
4.52
4.49
7.20
7.95

6.49
4.67
4.77
7.01
7.71

6.90
4.75
4.86
7.30
8.25

5.85
6.92
7.81

1974—July...............
Aug...............
Sept...............
Oct................
Nov...............
Dec...............

11.93
11.79
11.36
9.55
8.95
9.18

11.72
11.65
11.23
9.36
8.81
8.98

9.00
9.31
9.41
9.03
8.50
8.50

11.88
12.08
11.06
9.34
9.03
9.19

12.92
12.01
11.34
10.06
9.45
8.53

7.752
8.744
8.363
7.244
7.585
7.179

7.55
8.96
8.06
7.46
7.47
7.15

8.028
8.853
8.599
7.559
7.551
7.091

7.94
9.11
8.53
7.74
7.52
7.11

8.04
8.88
8.52
7.59
7.29
6.79

8.89
9.54
8.95
8.04
7.67
7.33

8.39
8.64
8.38
7.98
7.65
7.22

1975—Jan................
Feb...............
Mar...............
Apr...............
M ay..............
June..............
July...............

7.39
6.36
6.06
6.11
5.70
5.67
6.32

7.30
6.33
6.06
6.15
5.82
5.79
6.44

7.31
6.24
6.00
5.97
5.74
5.53
6.02

7.54
6.35
6.22
6.15
5.76
5.70
6.40

7.13
6.24
5.54
5.49
5.22
5.55
6.10

6.493
5.583
5.544
5.694
5.315
5.193
6.164

6.26
5.50
5.49
5.61
5.23
5.34
6.13

6.525
5.674
5.635
6.012
5.649
5.463
6.492

6.36
5.62
5.62
6.00
5.59
5.61
6.50

6.27
5.56
5.70
6.40
5.91
5.86
6.64

6.74
5.97
6.10
6.83
6.31
6.26
7.07

7.29
6.85
7.00
7.76
7.49
7.26
7.72

5 ...
12
19.. .
26

6.03
6.18
6.15
6.13

6.03
6.23
6.20
6.13

5.88
5.95
6.00
6.00

6.15
6.20
6.11
6.16

5.59
5.28
5.44
5.54

5.562
6.021
5.538
5.653

5.62
5.74
5.44
5.66

5.786
6.351
5.843
6.067

5.90
6.09
5.86
6.09

6.20
6.48
6.30
6.49

6.58
6.94
6.76
6.91

7.47
7.74
7.75
7.90

May

3........
10
17
24
31

6.03
5.98
5.78
5.48
5.38

6.15
6.08
5.93
5.60
5.50

6.00
6.00
5.78
5.55
5.50

6.07
6.00
5.83
5.58
5.45

5.71
5.42
5.20
5.13
5.14

5.716
5.356
5.182
5.115
5.206

5.51
5.41
5.04
5.16
5.23

6.158
5.724
5.481
5.412
5.469

5.95
5.77
5.51
5.45
5.50

6.36
6.13
5.81
5.74
5.80

6.81
6.52
6.20
6.15
6.21

7.87
7.64
7.45
7.34
7.38

June

7........
14
21 ,
2 8...

5.48
5.55
5.58
5.98

5.60
5.63
5.65
6.18

5.50
5.50
5.45
5.63

5.59
5.55
5.58
6.03

5.24
5.15
5.31
5.72

5.258
5.080
4.767
5.665

5.23
5.00
5.24
5.80

5.505
5.283
5.129
5.935

5.48
5.25
5.55
6.07

5.77
5.50
5.74
6.32

6.15
5.94
6.13
6.69

7.29
7.05
7.14
7.49

July

5 .......
12
19 . . . .
26.......

6.25
6.28
6.28
6.38

6.34
6.45
6.43
6.48

5.81
6.00
6.00
6.03

6.19
6.38
6.35
6.52

6.31
6.06
5.93
6.14

6.009
6.203
6.045
6.247

5.98
6.06
6.05
6.27

6.262
6.510
6.344
6.626

6.28
6.39
6.41
6.65

6.47
6.50
6.53
6.82

6.89
6.91
6.91
7.27

7.62
7.65
7.67
7.79

2 ........

6.43

6.53

6.18

6.49

6.25

6.318

6.28

6.719

6.69

6.86

7.35

7.86

5.11

Week ending—
1975—Apr.

Aug.

1 Averages of the most representative daily offering rate quoted by
dealers.
2 Averages of the most representative daily offering rate published by
finance companies, for varying maturities in the 90-179 day 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 Seven-day averages for week ending Wednesday. Beginning with
statement week ending July 25, 1973, weekly averages are based on the
daily average of the range of rates on a given day weighted by the volume




of transactions at these rates. For earlier statement weeks, the averages
were based on the daily effective rate—the rate considered most repre­
sentative of the day’s transactions, usually the one at which most trans­
actions occurred.
5 Except for new bill issues, yields are averages computed from daily
closing bid prices.
6 Bills quoted on bank-discount-rate basis.
7 Selected note and bond issues.
N o t e . —Figures for Treasury bills are the revised series described on p.
A-35 of the Oct. 1972 B u l l e t i n .

A 28

INTEREST RATES □ AUGUST 1975
BOND AND STOCK YIELDS
(Per cent per annum)

Government bonds

Corporate bonds

State and local
United
States
(long­
term)

Period

Aaa utility

Stocks

By selected
ratine

Dividend/
price ratio

By
group

Earnings/
price ratio

Total l
Total i

Aaa

Baa

New
issue

Re­
cently
offered

Aaa

Baa

Indus­
trial

Rail­
road

Public
utility

Pre­
ferred

Com­
mon

Com­
mon

Seasoned issues
1970..............
1971..............
1972..............
1973 ............
1974.............

6.59
5.74
5.63
6.30
6.99

6.42
5.62
5.30
5.22
6.19

6.12
5.22
5.04
4.99
5.89

6.75
5.89
5.60
5.49
6.53

8.68
7.62
7.31
7.74
9.33

8.71
7.66
7.34
7.75
9.34

8.51
7.94
7.63
7.80
8.98

8.04
7.39
7.21
7.44
8.57

9.11
8.56
8.16
8.24
9.50

8.26
7.57
7.35
7.60
8.78

8.77
8.38
7.99
8.12
8.98

8.68
8.13
7.74
7.83
9.27

7.22
6.75
7.27
7.23
8.23

3.83
3.14
2.84
3.06
4.47

6.46
5.41
5.50
7.12
11.60

1974—July
Aug. .
Sept..
O ct...

7.18
7.33
7.30
7.22
6.93
6.78

6.70
6.70
6.77
6.56
6.54
7.04

6.34
6.38
6.49
6.21
6.06
6.65

7.10
7.10
7.18
6.99
7.01
7.50

10.20
10.07
10.38
10.16
9.21
9.53

10.04
10.19
10.30
10.23
9.34
9.56

9.10
9.36
9.67
9.80
9.60
9.56

8.72
9.00
9.24
9.27
8.89
8.89

9.55
9.77
10.12
10.41
10.50
10.55

8.95
9.16
9.44
9.53
9.30
9.23

9.08
9.30
9.46
9.64
9.59
9.59

9.35
9.70
10.11
10.31
10.14
10.02

8.40
8.61
8.93
8.78
8.60
8.78

4.42
4.90
5.45
5.38
5.13
5.43

14.35

6.68
6.61
6.73
7.03
6.99
6.86
6.89

6.89
6.40
6.70
6.95
6.95
6.96
7.07

6.39
5.96
6.28
6.46
6.42
6.28
6.39

7.45
7.03
7.25
7.43
7.48
7.48
7.60

9.36
8.97
9.35
9.67
9.63
9.25
9.41

9.45
9.09
9.38
9.65
9.65
9.32
9.42

9.55
9.33
9.28
9.49
9.55
9.45
9.43

8.83
8.62
8.67
8.95
8.90
8.77
8.84

10.62
10.43
10.29
10.34
10.46
10.40
10.33

9.19
9.01
9.05
9.30
9.37
9.29
9.26

9.52
9.32
9.25
9.39
9.49
9.40
9.37

10.10
9.83
9.67
9.88
9.93
9.81
9.81

8.41
8.07
8.04
8.27
8.51
8.34
8.24

5.07
4.61
4.42
4.34
4.08
4.02
4.02

D ec..
1975—Jan .
Feb...
M ar...
A pr...
M ay. .
J u n e ..
Ju ly ..

12.97

10.18

Week ending1975—June

7.
14.
21.
28.

6.96
6.81
6.82
6.85

7.01
6.84
6.96
7.01

6.35
6.15
6.30
6.30

7.55
7.35
7.50
7.55

9.41
8.95
9.07
9.37

9.53
9.22
9.14
9.41

9.51
9.46
9.41
9.41

8.85
8.76
8.73
8.75

10.47
10.42
10.37
10.35

9.36
9.29
9.26
9.25

9.46
9.41
9.38
9.36

9.89
9.83
9.76
9.76

8.50
8.29
8.36
8.22

3.98
4.07
4.08
3.93

July

5.
12.
19.
26.

6.89
6.89
6.87
6.90

7.01
7.03
7.08
7.17

6.30
6.33
6.40
6.50

7.55
7.56
7.60
7.70

9.62
9.38
9.53
9.25

9.30
9.45
9.57
9.33

9.44
9.44
9.43
9.43

8.82
8.84
8.82
8.85

10.37
10.35
10.33
10.32

9.26
9.26
9.25
9.25

9.38
9.38
9.37
9.37

9.81
9.82
9.80
9.80

8.04
8.16
8.22
8.33

3.95
3.92
3.93
4.12

2.

6.92

7.07

6.40

7.58

9.37

9.35

9.44

8.86

10.31

9.26

9.37

9.82

8.45

4.19

14

20

5

5

121

20

30

41

30

40

14

500

Aug.

Number of
issues2, . .

1 Includes bonds rated Aa and A, data for which are n ot shown sep­
arately. Because of a limited number of suitable issues, the number
of corporate bonds in some groups has varied somewhat. As of Dec.
23, 1967, there is no longer an Aaa-rated railroad bond series.
2 Number of issues varies over time; figures shown reflect most recent
count.
N o t e . —Annual yields are averages of weekly, monthly, or quarterly
data.
Bonds: Monthly and weekly yields are computed as follows: (1) U.S.
Govt., averages of daily figures for bonds maturing or callable in 10 years
or more; from Federal Reserve Bank of New York. (2) State and local

500

govt., general obligations only, based on Thurs. figures, from Moody’s
Investors Service. (3) Corporate, rates for “New issue” and “Recently

offered” Aaa utility bonds, weekly averages compiled by the Board of
Governors of the Federal Reserve System; and rates for seasoned issues,
averages of daily figures from Moody’s Investors Service.
Stocks: Standard and Poor’s corporate series. Dividend/price ratios
are based on Wed. figures. Earnings/price ratios as of end of period.
Preferred stock ratio based on 8 median yields for a sample of noncallable issues—12 industrial and 2 public utility. Common stock ratios
on the 500 stocks in the price index. Quarterly earnings are seasonally
adjusted at annual rates.

NOTES TO TABLES ON OPPOSITE PAGE:
Security Prices:
N o t e . — Annual

data are averages of daily or weekly figures. Monthly
and weekly data are averages of daily figures unless otherwise noted and are
computed as follows: U.S. Govt, bonds, derived from average market
yields in table on p. A-28 on basis of an assumed 3 per cent, 20-year
bond. Municipal and corporate bonds, derived from average yields as
computed by Standard and Poor’s Corp., on basis of a 4 per cent, 20year bond; Wed. closing prices. Common stocks, derived from com­
ponent common stock prices. Average daily volume o f trading, presently
conducted 5 days per week for 6 hours per day.




Stock Market Customer Financing:
1 Margin credit includes all credit extended to purchase or carry stocks
or related equity instruments and secured at least in part by stock (Dec.
1970 B u l l e t i n , p. 920). 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 represent estimates for all
commercial banks based on reports by a reporting sample, which ac­
counted for 60 per cent of security credit outstanding at banks on June 30,
1971.
2 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.
3 Nonmargin stocks are those not listed on a national securities exchange
and not included on the Federal Reserve System’s list of over the counter
margin stocks. At banks, loans to purchase or carry nonmargin stocks are
unregulated; at brokers, such stocks have no loan value.
4 Free credit balances are in accounts with no unfulfilled commitments
to the brokers and are subject to withdrawal by customers on demand.

AUGUST 1975 □ SECURITY MARKETS

A 29

SECURITY PRICES
Common stock prices
Bond prices
(per cent of par)

Standard and Poor’s index
(1941-43= 10)

Period

U.S.
Govt.
(long­
term)

State
and
local

60.52
67.73
68.71
62.80
57.45

1974—Jul y
Aug.......
Sept.......
Oct........
Nov.......
Dec........
1975—Ja...........n
Feb........
Mar.......
Apr........
May
June
July.......

197
197
197
197
197

0
1
2
3
4

Volume of
Amer­
trading in
ican
stocks
Stock (thousands of
New York Stock Exchange index
Ex­
shares)
(Dec. 31, 1965 = 50)
change
total
index
(Aug.
Trans­
Fi­
31,
Total Indus­
porta­
Utility
nance
trial
1973= NYSE AMEX
tion
100)

New York Stock Exchange

Cor­
porate
AAA

Indus­
trial

Rail­
road

Public
utility

72.3
80.0
84.4
85.4
76.3

61.6 83.22 91.29
65.0 98.29 108.35
65.9 109.20 121.79
63.7 107.43 120.44
58.8 82.85 92.91

32.13
41.94
44.11
38.05
37.53

54.48
59.33
56.90
53.47
38.91

45.72
54.22
60.29
57.42
43.84

48.03
57.92
65.73
63.08
48.08

32.14
44.35
50.17
37.74
31.89

37.24
39.53
38.48
37.69
29.82

54.64
70.38
78.35
70.12
49.67

96.63
113.40
129.10
103.80

79.97

10,532
15,381
16,487
16,374
13,883

3,376
4,234
4,447
3,004
1,908

55.97
54.95
55.13
55.69
57.80
58.96

71.9
71.6
71.0
72.7
72.6
68.6

58.5
57.6
56.2
55.9
56.3
56.1

82.82
76.03
68.12
69.44
71.74
67.07

93.54
85.51
76.54
77.57
80.17
74.80

35.63
35.06
31.55
33.70
35.95
34.81

35.37
34.00
30.93
33.80
34.45
32.85

43.27
39.86
35.69
36.62
37.98
35.41

48.35
44.19
39.29
39.81
41.24
38.32

31.01
29.41
25.86
27.26
28.40
26.02

27.50
26.72
24.94
26.76
27.60
26.18

44.23
40.11
36.42
39.28
41.89
39.27

77.92
74.97
65.70
66.78
63.72
59.88

12,459
12,732
13,998
16,396
14,341
15,007

1,610
1,416
1,808
1,880
1,823
2,359

59.70
60.27
59.33
57.05
57.40
58.33
58.09

70.9
74.1
70.9
69.5
69.6
69.8
68.5

56.4
56.6
56.2
55.8
56.6
56.7
56.6

72.56 80.50
80.10 89.29
83.78 93.90
84.72 95.27
90.10 101.05
92.40 103.68
92.49 103.84

37.31
37.80
38.35
38.55
38.92
38.97
38.04

38.19
40.37
39.55
38.19
39.69
43.65
43.67

38.56
42.48
44.35
44.91
47.76
49.21
49.54

41.29
46.00
48.63
49.74
53.22
54.61
54.96

28.12
30.21
31.62
31.70
32.28
30.79
32.88

29.55
31.31
31.04
30.01
31.02
32.78
32.98

44.85
47.59
47.83
47.35
49.97
52.20
52.51

68.31
76.08
79.15
82.03
86.94
90.57
93.28

19,661
22,311
22,680
20,334
21,785
17,052
20,076

2,117
2,545
2,665
2,302
2,521
2,743
2,750

Total

Week ending—
July

5,
12.
19.
26,

58.14
58.11
58.24
58.02

69.4
69.0
68.3
67.2

56.5
56.6
56.8
56.6

94.65
94.24
94.45
90.69

106.27
105.87
106.05
101.76

39.44
39.04
38.92
36.92

44.89
44.05
44.48
43.22

50.57
50.43
50.65
48.67

56.12
56.05
56.24
53.91

33.12
33.37
33.93
32.41

33.58
33.22
33.46
32.66

53.84
53.57
53.80
51.62

92.94
93.78
96.13
93.90

19,338
22,456
22,756
18,632

2,555
3,400
3,344
2,414

Aug.

2,

57.88

68.4

56.5

88.49 112.75

36.07

42.23

47.37

52.46

31.37

32.06

49.66

89.84 15,572

1,828

For notes see opposite page.

STOCK MARKET CUSTOMER FINANCING
(In millions of dollars)
Margin credit at brokers and banks 1
Regulated 2
End of period

By type

By source
Margin stock
Total

Unregu­
lated 3

Brokers Banks

Convertible
bonds

Subscription
issues

Brokers Banks Brokers Banks Brokers Banks
1974—Apr....................................
M ay...................................
June...................................
July....................................
Aug....................................
Sept....................................
Oct.....................................
Nov....................................
Dec.....................................

6,567 5,558
'6,461 '5,441
'6,377 '5,340
'6,028 '5,005
'5,705 '4,752
'5,167 '4,243
'5,066 '4,150
'5,074 '4,183
'4,906 '4,050

1975—Jan.....................................
Feb.....................................
Mar....................................
Apr.....................................
M ay...................................
June...................................

4,934 '4,166
5,099 '4,339
5,244 4,400
5,407 4,583
5,746 4,927
5,220

For notes see opposite page.




Nonmargin
stock
credit at
banks

Free credit balances
at brokers 4

Margin
accts.

Cash
accts.

5,370
'5,260
'5,160
'4,840
'4,590
'4,090
'4,000
'4,040
'3,910

952
963
991
978
912
881
872
851
815

179
172
172
158
156
148
145
139
137

44
44
34
33
29
31
32
29
30

9
9
8
7
6
5
5
4
3

13
13
12
12
12
12
12
11
11

1,868
1,858
2,072
2,091
2,119
2,060
2,024
2,054
2,064

415
395
395
402
429
437
431
410
411

1,440
1,420
1,360
1,391
1,382
1,354
1,419
1,447
1,424

848 '4,030
830 '4,200
844 '4,260
824 4,440
819 4,780
5,070

806
783
*•800
781
779

134
136
134
138
140
146

29
34
30
30
27

2
3
6
5
7
4

13
13
14
13
13

1,919
1,897
1,882
1,885
1,883

410
478
515
505
520
519

1,446
1,604
1,760
1,790
1,705
1,790

1,009
1,020
1,037
1,023
953
924
916
891
856

A 30

STOCK MARKET CREDIT; SAVINGS INSTITUTIONS □ AUGUST 1975

EQUITY STATUS OF MARGIN ACCOUNT DEBT
AT BROKERS

SPECIAL MISCELLANEOUS ACCOUNT BALANCES
AT BROKERS, BY EQUITY STATUS OF ACCOUN1S

(Per cent of total debt, except as noted)

(Per cent of total, except as noted)

End of
period

Total
debt
(mil­
lions
of
dol­
lars) l

1974—June.
Ju ly ..
Aug..
Sept..
Oct...
Nov..
D ec..
1975—Ja n . .
Feb..
Mar..
A pr..
May.
June.

Equity class (per cent)
Net
credit
status

End of period
80 or
more

70-79

60-69

50-59

40-49

Under
40

'5,160
'4,840
'4,590
'4,090
'4,000
'4,040
'3,910

4.0
4.0
3.5
3.5
4.6
4.2
4.3

5.0
4.8
4.0
3.9
5.5
5.1
4.6

7.7
7.9
6.6
6.1
9.4
8.5
8.8

12.6
13.3
11.2
10.2
16.8
14.8
13.9

21.8
22.2
18.4
18.0
27.3
24.4
23.0

49.1
47.9
56.3
58.3
36.4
42.8
45.4

'4.030
'4,200
4,260
4,440
4,780
5,070

5.6
5.9
6.5
7.1
7.0
7.4

7.3
7.2
8.0
8.7
9.1
9.9

13.5
14.6
15.3
16.1
16.7
18.3

24.6
25.4
27.6
28.7
31.5
32.7

28.1
28.5
25.8
23.5
21 .0
20.4

21.2
18.4
16.9
15.9
13.4
11.4

1 Note 1 appears at the bottom of p. A-28.
N o t e . — Each customer’s equity in his collateral (market value of col­
lateral less net debit balance) is expressed as a percentage of current col­
lateral values.

July......................

1975—Jan.......................
Feb.......................
M ay.....................
June.....................

Equity class of accounts
in debit status

Total
balance
(millions
60 per cent Less than of dollars)
or more 60 per cent

40.3
40.2
39.9
40.7
40.9
40.0
41.1

37.4
36.5
34.0
31.2
35.1
34.6
32.4

22.4
23.2
26.0
27.0
24.0
25.3
26.5

6,538
6,695
6,783
7,005
7,248
6,926
7,013

41.1
42.2
44.4
45.2
44.5
45.9

39.3
40.1
40.1
41 .1
43.2
43.1

19.8
17.8
15.5
13.7
12.3
11.0

7,185
7,303
7,277
7,505
7,601
7,875

N o t e . —Special miscellaneous accounts contain credit balances that
may be used by customers as the margin deposit required for additional
purchases. Balances may arise as transfers based on loan values of other
collateral in the customer’s margin account or deposits of cash (usually
sales proceeds) occur.

MUTUAL SAVINGS BANKS
(In millions of dollars)
Loans

End of period

Mort­
gage

Other

Securities

U.S.
Govt.

State
and
local
govt.

Corpo­ Cash
rate
and
other1

Other
assets

Total
assets—
Total
liabili­
ties
and
general
reserve
accts.

Depos­
its

Mortgage loan
commitments 2
classified by maturity
(in months)

Other General
liabili­ reserve
ac­
ties
counts
3 or
less

3-6

6-9

Over
9

Total

1971...............
19723.............
1973...............
1974...............

62,069
67,563
73,231
74,891

2,808
2,979
3,871
3,812

3,334
3,510
2,957
2,555

385
873
926
930

17,674
21,906
21,383
22,550

1,389
1,644
1,968
2,167

1,711 89,369
2,117 100,593
2,314 106,651
2,645 109,550

81,440
91,613
96,496
98,701

1,810
2,024
2,566
2,888

6,118
6,956
7.589
7,961

1,047
1,593
1,250
664

627
713
598
418

463 1,310 3,447
609 1,624 4,539
405 1,008 3,261
232
726 2,040

1974—M ay...
June...
July. . .
Aug---Sept.. .
Oct---Nov—
D ec....

74,011
74,281
74,541
74,724
74,790
74,835
74,913
74,891

4,388
4,274
4,311
4,031
4,087
3,981
4,226
3,812

2,750
2,758
2,650
2,604
2,574
2,525
2,553
2,555

893
880
884
879
876
870
877
930

22,241
22,324
22,383
22,292
22,218
22,190
22,201
22,550

1,656
1,651
1,402
1,334
1,303
1,303
1,406
2,167

2,355
2,488
2,487
2,519
2,573
2,608
2,633
2,645

108,295
108,654
108,660
108,383
108,420
108,313
108,809
109,550

97,391
98,190
97,713
97,067
97,425
97,252
97,582
98,701

3,173
2,688
3,144
3,475
3,089
3,158
3,291
2,888

7,731
7,776
7,803
7,841
7,906
7,904
7,936
7,961

1,129
1,099
990
949
932
775
724
664

608
602
586
496
382
374
398
418

400 1,014 3,151
328 1,001 3,031
316 1,076 2,968
977 2,839
417
450
904 2,668
792 2,301
360
743 2,182
317
232
726 2,040

1975—Jan .. . .
F eb. . .
M ar.. .
Apr__
M ay...

74,957
75,057
75,127
75,259
75,440

4,287
4,658
4,736
4,407
4,593

2,571
2,677
2,975
3,419
3,616

967
1,017
1,095
1,121
1,137

22,979
23,402
24,339
24,994
25,579

1,706
1,856
2,101
1,841
2,077

2,663
2,709
2,672
2,780
2,811

110,130
111 ,376
113,045
113,821
115,252

99,211
100,149
102,285
102,902
104,056

2,948
3,211
2,712
2,849
3,080

7,971
8,016
8,049
8,071
8,116

726
654
824
913
955

400
360
312
335
383

225
217
294
312
300

1 Also includes securities of foreign governments and international
organizations and nonguaranteed issues of U.S. Govt, agencies.
2 Commitments outstanding of banks in New York State as reported to
the Savings Banks Assn. of the State of New York. Data include building
loans
3 Balance sheet data beginning 1972 are reported on a gross-of-valuation-reserves basis. The data differ somewhat from balance sheet data
previously reported by National Assn. of Mutual Savings Bank, which




620
579
564
538
573

1,971
1,810
1,994
2,098
2,211

were net of valuation reserves. For most items, however, the differences
are relatively small.
N o t e . — NAMSB data; figures are estimates for all savings banks in
the United States and differ somewhat from those shown elsewhere in
the B u l l e t i n ; the latter are for call dates and are based on reports filed
with U.S. Govt, and State bank supervisory agencies.

AUGUST 1975 □ SAVINGS INSTITUTIONS

A 31

LIFE INSURANCE COMPANIES
(In millions of dollars)
Business securities

Government securities
Total
assets

End of period

United State and Foreign1 Total
States
local

Total

Bonds

Stocks

Mort­
gages

Real
estate

Policy
loans

Other
assets

1971.........................................
1972.........................................
1973.........................................
1974.........................................

222,102
239,730
252,436
263,817

11,000
11,372
11,403
11,890

4,455
4,562
4,328
4,396

3,363
3,367
3,412
3,653

3,182 99,805
3,443 112,985
3,663 117,715
3,841 119,580

79,198
86,140
91,796
97,430

20,607
26,845
25,919
22,150

75,496
76,948
81,369
86,258

6,904
7,295
7,693
8,249

17,065
18,003
20,199
22,899

11,832
13,127
14,057
14,941

1974—Apr...............................
M ay.............................
June.............................
July..............................
Aug..............................
Sept..............................
Oct...............................
Nov..............................
Dec...............................

256,385
257,304
258,034
258,712
258,508
258,116
261,183
262,253
263,349

11,619
11,635
11,638
11,722
11,789
11,762
11,804
11,871
11,965

4,329
4,330
4,286
4,312
4,365
4,316
4,344
4,394
4,437

3,540
3,549
3,577
3,600
3,603
3,618
3,620
3,626
3,667

3,750
3,756
3,775
3,810
3,821
3,828
3,840
3,851
3,861

120,104
120,178
119,911
119,655
118,319
116,884
119,225
119,246
118,572

94,756
95,352
95,450
95,917
96,076
96,162
96,815
97,199
96,652

25,348
24,826
24,461
23,738
22,243
20,722
22,410
22,047
21,920

82,470
82,734
83,225
83,657
84,082
84,427
85,016
85,481
86,234

7,800
7,860
7,904
7,957
8,037
8,100
8,140
8,207
8,331

20,819
21,056
21,305
21,563
21,867
22,175
22,473
22,676
22,862

13,573
13,841
14,051
14,158
14,414
14,768
14,525
14,772
15,385

1975—Jan................................
Feb...............................
Mar..............................
Apr...............................

266,823
269,715
272,143
273,523

12,065
12,161
12,338
12,374

4,461
4,512
4,581
4,608

3,669
3,686
3,712
3,719

3,935
3,960
4,045
4,047

121,986 98,876
124,158 99,571
125,512 100,116
126,256 99,725

23,110
24,587
25,396
26,531

86,526
86,929
87,187
87,638

8,313
8,402
8,582
8,782

23,058
23,224
23,391
23,459

14,875
14,841
15,133
15,014

1 Issues of foreign governments and their subdivisions and bonds of
the International Bank for Reconstruction and Development.
N o t e . — Institute of Life Insurance estimates for all life insurance
companies in the United States.

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.”

SAVINGS AND LOAN ASSOCIATIONS
(In millions of dollars)
Assets
End of period
Mort­
gages

Invest­
ment
secur­
ities 1

Cash

Liabilities

Mortgage
loan com­
mitments
outstanding
at end of
period4

Other

Total
assets—
Total
liabilities

Savings
capital

Net
worth2

Bor­
rowed
money3

Loans
in
process

10,731
12,590
19,117
23,075

206,023
243,127
271,905
295,616

174,197
206,764
226,968
242,914

13,592
15,240
17,056
18,435

8,992
9,782
17,172
24,824

5,029
6,209
4,667
3,205

4,213
5,132
6,042
6,238

7,328
11,515
9,526
7,454

Other

1971..................................
1972..................................
19735................................
1974..................................

174,250
206,182
231,733
249,306

1974—June.......................
July.......................
Aug.......................
Sept.......................
Oct.........................
Nov.......................
Dec........................

243,400
245,135
246,713
247,624
248,189
248,711
249,306

23,003
23,052
22,081
21,166
22,126
23,249
23,235

21,614
21,926
22,361
22,758
23,016
23,306
23,075

288,017
290,113
291,155
291,548
293,331
295,266
295,616

238,114
237,631
236,472
237,877
238,304
239,530
242,914

17,838
18,101
18,377
18,201
18,444
18,674
18,435

20,347
21,708
22,891
24,136
24,544
24,550
24,824

5,033
4,867
4,584
4,226
3,809
3,444
3,205

6,685
7,806
8,831
7,108
8,230
9,068
6,238

11,732
10,844
9,851
9,126
8,127
7,723
7,454

1975—Jan.........................
Feb........................
Mar.......................
Apr........................
May.......................
June®.....................

249,734
250,845
252,463
254,748
257,930
261,365

25,382
26,995
28,293
29,035
30,635
30,967

23,338
23,754
24,295
24,955
25,611
25,880

298,454
301,594
305,051
308,738
314,176
318,212

246,182
249,480
255,973
258,831
262,726
268,944

18,585
18,815
18,653
18,881
19,127
18,990

23,398
21,938
20,417
19,889
19,362
18,925

3,022
3,015
3,239
3,567
4,056
4,393

7,267
8,346
6,769
7,570
8,905
6,960

7,887
8,787
10,050
11,653
12,557
12,296

18,185
2,857
21,574
2,781
21,055
23,235

1 Excludes stock of the Federal Home Loan Bank Board. Compensating
changes have been made in “Other assets.”
?. Includes net undistributed income, which is accrued by most, but not
all, associations.
3 Advances from FHLBB and other borrowing.
4 Data comparable with those shown for mutual savings banks (on
opposite page) except that figures for loans in process are not included
above but are included in the figures for mutual savings banks.
5 Beginning 1973, participation certificates guaranteed by the Federal
Home Loan Mortgage Corporation, loans and notes insured by the
Farmers Home Administration, and certain other Govt.-insured mortgagetype investments, previously included in mortgage loans, are included




in other assets. The effect of this change was to reduce the mortgage
total by about $0.6 billion.
Also, GNMA-guaranteed, mortgage-backed securities of the pass­
through type, previously included in “Cash” and “Investment securities”
are included in “Other assets.” These amounted to about $2.4 billion at
the end of 1972.
N o t e . — FHLBB data; figures are estimates for all savings and loan
assns. in the United States. Data are based on monthly reports of insured
assns. and annual reports of noninsured assns. Data for current and
preceding year are preliminary even when revised.

A 32

FEDERAL FINANCE □ AUGUST 1975
FEDERAL FISCAL OPERATIONS: SUMMARY
(In millions of dollars)
U.S. budget

Means of financing
Borrowings from the public

Period

Surplus
Less: Invest­
or
Public
ments by Govt,
debt Agency
Less: Equals:
deficit
accounts 1
securi­ securi­
Special Total
(-)
ties
notes 2
ties
Special Other
issues

Receipts Outlays

Fiscal year:
197 2
197 3
197 4
1975*...................

208,649
232,225
264,932
280,921

231,876
246,526
268,392
325,133

Half year:
1973—July-Dee..
1974—Jan.-June.
July-Dee..
1975—Jan.-June?5

124,256
140,676
P139,807
141,114

130,362 -6 ,1 0 6 11,756
138,032
2,647 5,162
153,399 -13,591 18,429
171,734 -30,621 40,524

Month:
1974—Jun e
July...........
Aug..........
Sept...........
Oct............

N ov............

Dec...........
1975—Ja.............. n
Feb...........
Mar..........
Apr......... .
M ay.........
June*.......

Less: Cash and
monetary assets

-23,227
-14,301
-3 ,4 6 0
-44,212

29,131 -1,269 6,796
30,881
216 11,712
16,918
903 13,673
58,953 -1,069 8,112
478
426
-646
-423

Trea­
sury
operat­
ing
balance

Other

Other
means
of
financ­
ing,
net3

1,623
109
1,140
685

19,442
19,275
3,009
50,853

1,362
2,459
-3,417
-1,570

1,108 6,003
-1,613 -4,129
898 -2,063
2,372 -5,840

5,376
8,297
2,840
5,272

845
295
150
835

6,014
-3 ,0 0 4
14,794
36,059

-2,202
-1,215
-3,228
4,798

-319 -2,429
1,089
231
248 -4,183
2,124 -1,657

2,711
-2,705
-1,012
3,244
-6,445
816
2,874

239 -2 5 2
-658 -1 ,5 3 4
83 -1 ,4 2 5
797 -1 9 4
-338
-6 7 7
96 -9 1 5
268
561

-5 8
-2,359
3,115
7,666
-5,757
-9 4 9 1

319
508
-132
-801
285
3
1,847
178
-732
349
537 -1 ,8 9 3

31,259
20,939
23,620
28,377
19,633
22,292
24,946

24,172
24,411
25,408
24,712
26,460
24,965
27,442

385
7,087
-3 ,4 7 2 1,109
-1 ,7 8 7 6,447
3,666 -326
-6 ,8 2 7 -1 ,2 4 2
-2 ,6 7 3 5,139
-2 ,4 9 6 7,300

29 4,178
-126
-858
-5 6 4,133
-1 6 7 -1,311
-2 4 2 -2,053
-1 7
653
-3 8 2,276

121
198
-2 5
250
-1 5 2
-3 1
-9 0

-3 ,8 8 6
1,644
2,283
569
721
4,500
5,077

25,020
19,975
20,134
31,451
12,793
31,741

28,934 -3 ,9 1 4
1,475
26,200 -6,225 5,571
27,986 -7 ,8 5 2 9,949
1,850 7,081
29,601
28,186 -15,394 11 ,418
30,827
914 5,030

-2 3 -2,173
-306 1,224
5 -1,216
-3 7
10
-6
3,296
-5 5 4,131

-4 2
-495
-7 9
-451
-4 4
276

3,667
4,535
11,249
7,485
8,556
567

Selected balances
Treasury operating balance
End
of
period
F.R.
Banks

Tax
and
loan

accounts

Other
deposi­
taries4

Borrowing from the public.

Total

Public
debt
securities

Agency
securities

Less:
Investments of
Govt, accounts 1
Special
issues

Other

Less:
Special
notes 2

Equals:
Total

Memo:
Debt of
Govt.sponsored
corps.—
Now
private 5

Fiscal year:
197 1
197 2
197 3
197 4
1975*...........

1,274
2,344
4,038
2,919
5,773

7,372
7,934
8,433
6,152
1,473

109
139
106
88
343

8,755
10,117
12,576
9,159
7,589

398,130
427,260
458,142
475,060
533,188

12,163
10,894
11,109
12,012
10,943

82,740
89,536
101,248
114,921
123,033

22,400
24,023
24,133
25,273
24,192

825
825
825
825
( 6)

304,328
323,770
343,045
346,053
396,906

37,086
41,814
51,325
65,411

Calendar year:
197 3
197 4

2,543
3,113

7,760
2,749

70
70

10,374
5,932

469,898
492,664

11,586
11,367

106,624
117,761

24,978
25,423

825
( 6)

349,058
360,847

59,857

Month:
1974—June.
Ju ly ..
A ug..
Sept..
O ct..,
N ov.,
Dec..

2,919
3,822
3,304
3,211
789
1,494
3,113

6,152
2,544
2,049
5,384
1,381
1,571
2,745

88
91
92
71

475,060
6475,344
481,792
481,466
480,224
485,364
492,664

12,012
11,895
11,831
11,664
11,422
11,404
11,367

114,921
114,063
118,196
116,885
114,832
115,485
117,761

25,273
25,471
25,446
25,696
25,544
25,513
25,423

825
( 6)

70

9,159
6,454
5,443
8,687
2,241
3,066
5,928

346,053
347,706
349,980
350,549
351,270
355,770
360,847

65,411
68,243
69,951
73,068
75,343
75,706
76,459

1975—J a n ....
F eb....
M ar.. .
Apr....
M ay...
June*.

3,541
2,884
4,269
8,363
r7,036
5,773

2,115
410
2,140
5,411
981
1,473

220
220
220
521
521
343

5,876
3,514
6,629
14,295
'8,538
7,589

494,139
499,710
509,659
516,740
528,158
533,188

11,343
11,037
11,042
11,004
10,998
10,943

115,588
116,812
115,596
115,606
118,902
123,033

25,380
24,886
24,807
24,355
23,915
24,192

364,514
369,049
380,298
387,783
396,339
396,906

76,921
75,964
76,392
77,124
75,140

1 With the publication of the Oct. 1974, Federal Reserve B u l l e t i n ,
these series have been corrected (beginning in fiscal year 1971) to exclude
special issues held by the Federal home loan banks and the General
Services Adm. Participation Certificate Trust, which are not Govt, ac­
counts.
2 Represents non-interest-bearing public debt securities issued to the
International Monetary Fund and international lending organizations.
New obligations to these agencies are handled by letters of credit.
3 Includes net outlays of off-budget Federal agencies, accrued interest
payable on public debt securities, deposit funds, miscellaneous liability
and asset accounts, and seigniorage.
4 As of Jan. 3, 1972, the Treasury operating balance was redefined to
exclude the gold balance and to include previously excluded “Other deposi­




taries” (deposits in certain commercial depositaries that have been con­
verted from a time to a demand basis to permit greater flexibility in
Treasury cash management).
5 Includes debt of Federal home loan banks, Federal land banks, R.F.K.
Stadium Fund, FNMA (beginning Sept. 1968), and Federal intermediate
credit banks and banks for cooperatives (both beginning Dec. 1968).
6 Beginning July 1974, public debt securities excludes $825 million o f
notes issued to International Monetary Fund to conform with Office o f
Management and Budget’s presentation of the budget.

Note.— Half years may not add to fiscal year totals due to revisions in
series that are not yet available on a monthly basis.

AUGUST 1975 □ FEDERAL FINANCE

A 33

FEDERAL FISCAL OPERATIONS: DETAIL
(In millions of dollars)
Budget receipts
Corporation
income taxes

Individual income taxes
Period
Pres.
Elec­ Non­
With- tion with­ Re­
held Cam­ held funds
paign
Fund1

Total

Net
total

Social insurance taxes
and contributions

Employment
taxes and
Excise
contribution2 Un- Other
taxes
Gross
empl. net
re­
Re­
Net
insur.
ceipts funds
total
Pay­ Selfceipts •
roll empl.
taxes

Cus­ Estate Misc.
toms and
re­
gift ceipts4

Fiscal year:
197 2
197 3
1974r...................
1975 ' ...................

208,649
232,225
264,932
280,921

83,200
98,093
112,064
122,004

25,679 14,143
27,017 21,866
28 30,812 23,952
34,299 34,014

94,737 34,926
103,246 39,045
118,952 41,744
122,322 45,746

2,760
2,893
3,125
5,120

44,C
52,505
62,878
71,782

3,437
3,614
4,051
4,461

53,914
64,542
76,780
86,429

15,477
16,260
16,844
16,542

3,287
3,188
3,334
3,666

5,436
4,917
5,035
4,589

3,633
3,921
5,369
6,747

Half year:
1973—July-Dee..
1974—Jan.-Juner
July-Dee..
1975—Jan.-June*

124,256
140,676
139,807
141,114

52,964
59,100
61,377
60,627

999
6,207
28 24,605 22,953
7,099 1,016
27,201 32,998

58,172
60,782
67,460
54,862

16,589
25,155
18,247
27,499

1,494
1,631
2,016
3,104

29,965
201 2,974 1,967
32,919 2,807 3,862 2,084
34,418
254 2,914 2,187
37,364 3,162 3,850 2,274

35,109
41,671
39,774
46,655

8,966
7,878
8,761
7,781

1,633
1,701
1,958
1,708

2,514
2,521
2,284
2,305

2,768
2,601
3,341
3,406

462
378
229
130
78
111
90

14,231
10,806
10,485
13,947
10,590
10,832
10,799

9,269
1,796
1,084
6,082
1,717
1,111
6,458

237
310
256
435
511
314
190

4,757
5,005
7,813
5,428
4,558
6,633
4,982

18
418
1,363
’240
62
221
762
"1 4
89

329
358
368
389
363
353
356

5,386
5,781
9,544
6,119
5,142
7,748
5,441

1,423
1,517
1,415
1,465
1,401
1,474
1,489

301
325
355
305
347
319
307

370
418
453
352
370
350
341

517
607
540
543
578
773
301

132
5,366
1,046 4,264
2,661 8,152
15 12,766 6,258
819 12,749
4,543 1,445

15,487
7,747
4,134
16,065

1,745
1,275
7,228
5,819
-1 ,6 3 0 1,192
13,059 10,211

557
496
649
726
18
658

4,802
223
245
7,670
732
225
21
6,268
208
557
5,438 1,743
340 2,209
7,689
86
5,552
373

402
352
373
388
350
407

5,673
8,979
6,870
8,126
10,588
6,419

1,351
1,277
1,160
1,166
1,373
1,455

307
260
295
286
270
292

385
399
356
317
459
390

629
535
741
399
559
543

Month:
1974—Jun e
July..........
Aug..........
Sept..........
Oct...........
Nov..........
Dec...........

4,077
957
491
4,323
561
305
461

31,259 10,611
20,939 10,227
23,620 10,223
28,3771 9,754
19,633 10,106
22,292 10,638
24,946 10,428

1975—Ja..............n
Feb...........
Mar..........
Apr...........
May.........
1974—June*.......

25,020
19,975
20,134
31,451
12,793
31,741

10,252
10,957
9,617
9,542
10,300
9,960

2,032
2,371
3,008
3,416

4,357
6,051
6,837
6,764

281

Budget outlays5
Gen­
eral
sci­
ence,
space,
and
tech.

Period

Total

Na­
tional
de­
fense

Fiscal year:
197 3
197 4
1975*..................
19768..................

246,526
268,392
325,133
358,900

75,072
78,569
88,289
94,100

2,956
3,593
4,215
5,500

4,169
4,154
4,157
4,600

Month:
27,986
1975—Mar..
Apr.......... 29,601
M ay........ 28,186
June*. . . . 30,827

7,435
7,555
8,000
7,905

503
109
408
567

379
368
384
259

Intl.
affairs

Nat­
Comural
Com­ mun.
Agri­
re­
and
cul­ sources, merce
and region.
envir.,
ture
and transp. devel­
energy
opment

4,855 5,461 9,938
2,230 6,390 13,100
2,009 8,020 15,546
2,000 10,300 15,700
347
275
42
196

723
611
679
887

1 Collections of these receipts, totaling $2,427 million for fiscal year
1973, were included as part of non withheld income taxes prior to Feb.
1974.
2 Old-age, disability, and hospital insurance, and Railroad Retirement
accounts.
3 Supplementary medical insurance premiums and Federal employee
retirement contributions.
4 Deposits of earnings by F. R. Banks and other miscellaneous receipts.
5 Budget outlays reflect the new functional classification of outlays
presented in the 1976 Budget. For a description of these functions, see
Budget o f the U.S. Government, Fiscal Year 1976, pp. 64-65.




1,4
1,088
995
1,285

Educa­
tion,
man­ Health
and
power,
and
wel­
social
fare
serv.

Vet­
erans

Inter­
est

5,869
4,910
4,482
6,100

11,874
11,600
15,061
16,800

91,790
106,505
136,763
151,800

12,013
13,386
16,599
17,100

22,813
28,072
31,035
34,400

1519
309
383
461

1,209
1,838
1,647
1,635

12,154
12,379
'11,968
14,588

1,811
1,466
1,468
1,416

2,656
2,716
2,607
2,535

Gen­
eral
Govt.,
law
en­
force.,
and
justice

Rev­
enue
shar.
and
fiscal
assist­
ance

Undistrib.
off­
setting
re­
ceipts6

4,813 7 7,222 -12,318
5,789 6,746 '-16,652
6,341 6,695 -14,080
6,500 7,300 -20,000
568
152
240
469

3 -1 ,2 3 6
1,524 -1 ,0 5 3
-873
20 -1 ,5 9 6

6 Consists of interest received by trust funds, rents and royalties on the
Outer Continental Shelf, and Govt, contributions for employee retirement.
7 Contains retroactive payments of $2,617 million for fiscal 1972.
8 Estimates presented in Mid-Session Review o f the 1976 Budget, May
30, 1975. Breakdowns do not add to totals because special allowances for
contingencies, civilian agency pay raises, and energy tax equalization pay­
ments totaling $6,800 million for fiscal 1976 are not included.
N o t e . —Half years may not add to fiscal year totals due to revisions in
series that are not yet available on a monthly basis.

A 34

U.S. GOVERNMENT SECURITIES □ AUGUST 1975
GROSS PUBLIC DEBT, BY TYPE OF SECURITY
(In billions of dollars)
Public issues (interest-bearing)
End of period

Total
gross
public
debt 1

Marketable
Total
Total

Certifi­
cates

Bills

Notes

Con­
vert­
ible
Bonds 2 bonds

Nonmarketable

Special
issues 5

Foreign Savings
Total 3 issues 4 bonds
and
notes

1968—Dec..
1969—Dec..
1970—Dec..

358.0
368.2
389.2

296.0
295.2
309.1

236.8
235.9
247.7

75.0
80.6
87.9

76.5
85.4
101.2

85.3
69.9
58.6

2.5
2.4
2.4

56.7
56.9
59.1

4.3
3.8
5.7

52.3
52.2
52.5

59.1
71.0
78.1

1971—Dec...
1972—Dec..
1973—Dec..

424.1
449.3
469.9

336.7
351.4
360.7

262.0
269.5
270.2

97.5
103.9
107.8

114.0
121.5
124.6

50.6
44.1
37.8

2.3
2.3
2.3

72.3
79.5
88.2

16.8
20.6
26.0

54.9
58.1
60.8

85.7
95.9
107.1

1974—July..
Aug..
Sept..
O ct..
Nov..
D ec..

475.3
481.8
481.5
480.2
485.4
492.7

359.7
362.0
362.7
363.9
368.2
373.4

268.8
272.1
272.6
273.5
277.5
282.9

107.3
110.6
111.1
112.1
114.6
119.7

128.4
127.7
127.7
127.7
129.6
129.8

33.0
33.9
33.8
33.8
33.3
33.4

2.3
2.3
2.3
2.3
2.3
2.3

88.7
87.6
87.8
88.1
88.4
88.2

24.4
23.2
23.2
23.1
23.1
22.8

62.7
62.8
63.0
63.3
63.6
63.8

114.6
118.7
117.4
115.3
115.9
118.2

1975—Jan...
Feb..
Mar..
A pr..
May.
June.
July..

494.1
499.7
509.7
516.7
528.2
533.2
538.2

377.1
381.5
392.6
399.8
407.8
408.8
416.3

286.1
289.8
300.0
307.2
314.9
315.6
323.7

120.0
123.0
124.0
127.0
131.5
128.6
133.4

131.8
132.7
141.9
145.0
146.5
150.3
153.6

33.3
34.1
34.1
35.3
36.8
36.8
36.7

2.3
2.3
2.3
2.3
2.3
2.3
2.3

88.8
89.4
90.4
90.3
90.6
90.9
90.4

23.0
23.3
24.0
23.6
23.5
23.2
22.2

64.2
64.5
64.8
65.2
65.5
65.9
66.3

116.0
117.2
116.0
116.0
119.2
123.3
120.9

1 Includes non-interest-bearing debt (of which $623 million on July 31,
1975, was not subject to statutory debt limitation).
2 Includes Treasury bonds and minor amounts of Panama Canal and
postal savings bonds.
3 Includes (not shown separately): despositary bonds, retirement plan
bonds, Rural Electrification Administration bonds, State and local govern­
ment bonds, and Treasury deposit funds.

4 Nonmarketable certificates of indebtedness, notes, and bonds in the
Treasury foreign series and foreign-currency-series issues.
5 Held only by U.S. Govt, agencies and trust funds and the Federal
home loan banks.
N o t e . — Based on Monthly Statement o f the Public Debt o f the United
States, published by U.S. Treasury. See also second paragraph in N o t e to

table below.

OWNERSHIP OF PUBLIC DEBT
(Par value, in billions of dollars)
Held by private investors

Held by—
Total
gross
public
debt

U.S.
Govt.
agencies
and
trust
funds

F.R.
Banks

Total

1968—Dec................
1969—Dec................
1970—Dec................

358.0
368.2
389.2

76.6
89.0
97.1

52.9
57.2
62.1

1971—Dec................
1972—Dec................
1973—Dec................

424.1
449.3
469.9

106.0
116.9
129.6

1974—M ay..............
June..............
July...............
Aug................
Sept...............
Oct.................
Dec................

474.7
475.1
475.3
481.8
481.5
480.2
485.4
492.7

1975—Jan.................
Feb................
Mar...............
Apr................
May*.............

494.1
499.7
509.7
516.7
528.2

End of
period

Foreign
and
inter­
national 1

Other
misc.
inves­
tors 2

23.3
29.0
29.1

14.3
11.2
20.6

21.9
25.0
19.9

54.4
57.7
60.3

18.8
16.2
16.9

46.9
55.3
55.6

15.6
17.0
19.3

29.2
28.3
28.8
29.2
29.3
28.8
28.7
29.2

61.7
61.9
62.2
62.3
62.5
62.8
63.2
63.4

18.3
18.8
19.4
20.3
20.8
21.0
21.1
21.5

57.3
57.7
56.9
56.0
56.0
56.6
58.3
58.4

18.5
17.3
18.8
19.0
19.5
20.3
20.1
22.4

30.0
30.5
29.7
29.8
29.6

63.7
64.0
64.4
64.7
65.1

21.6
21.3
21.4
21.4
21.4

61.5
64.6
65.0
64.9
68.4

22.3
21 .3
25.9
24.7
28.0

Mutual
savings
banks

Insur­
ance
com­
panies

Other
corpo­
rations

State
and
local
govts.

228.5
222.0
229.9

66.0
56.8
62.7

3.8
3.1
3.1

8.4
7.6
7.4

14.2
10.4
7.3

24.9
27.2
27.8

51.9
51.8
52.1

70.2
69.9
78.5

247.9
262.5
2bl.7

65.3
67.7
60.3

3.1
3.4
2.9

7.0
6.6
6.4

11.4
9.8
10.9

25.4
28.9
29.2

133.9
138.2
137.5
141.6
140.6
138.4
139.0
141.2

81.4
80.5
78.1
81.1
81.0
79.4
81.0
80.5

259.4
256.4
259.7
259.0
259.8
262.5
265.3
271.0

54.8
53.2
53.9
53.0
52.9
53.5
54.5
56.5

2.6
2.6
2.6
2.6
2.5
2.5
2.5
2.5

5.8
5.9
5.7
5.7
5.7
5.9
5.9
6.1

11.2
10.8
11.3
11.0
10.5
11.2
11.0
11.0

139.0
139.8
138.5
138.0
140.9

81 .3
81.1
81.4
87.8
85.6

273.8
278.9
289.8
290.9
301.7

54.5
56.9
62.0
63.0
65.7

2.6
2.7
2.9
3.2
3.4

6.2
6.2
6.6
6.7
6.9

11.3
11 .4
12.0
12.5
13.1

1 Consists of investments of foreign and international accounts in
the United States.
2 Consists of savings and loan assns., nonprofit institutions, cor­
porate pensions trust funds, and dealers and brokers. Also included
are certain Govt, deposit accounts and Govt.-sponsored agencies.
N o t e . —Reported data for F.R. Banks and U.S. Govt, agencies and
trust funds; Treasury estimates for other groups.




Individuals

Com­
mercial
banks

Other
Savings
bonds securities

The debt and ownership concepts were altered beginning with the
Mar. 1969 B u l l e t i n . The new concepts (1) exclude guaranteed se­
curities and (2) remove from U.S. Govt, agencies and trust funds
and add to other miscellaneous investors the holdings of certain
Govt.-sponsored but privately owned agencies and certain Govt, deposit
accounts. Beginning in July 1974, total gross public debt includes Federal
Financing Bank bills and excludes notes issued to the IMF ($825 million).

AUGUST 1975 o U.S. GOVERNMENT SECURITIES

A 35

OWNERSHIP OF MARKETABLE SECURITIES, BY MATURITY
(Par value, in millions of dollars)
Within 1 year
Type of holder and date

All holders:
1972—Dec.
1973—Dec.
1974—Dec.
1975—May
June

Total
Total

Bills

Other

1-5
years

5-10
years

10-20
years

Over
20 years

31........................................................
31........................................................
31........................................................
31........................................................
3 0 ........................................................

269,509
270,224
282,891
314,886
315,606

130,422
141,571
148,086
164,160
163,891

103,870
107,786
119,747
131,541
128,569

26,552
33,785
28,339
32,619
35,322

88,564
81,715
85,311
100,926
101,973

29,143
25,134
27,897
26,834
26,830

15,301
15,659
14,833
14,549
14,509

6,079
6,145
6,764
8,418
8,403

U.S. Govt, agencies and trust funds:
1972—Dec. 31................................................
1973—Dec. 31................................................
1974— Dec. 31................................................
1975—May 31................................................
June 30................................................

19,360
20,962
21,391
20,114
20,475

1,609
2,220
2,400
2,183
2,317

674
631
588
393
479

935
1,589
1,812
1,790
1,838

6,418
7,714
7,823
7,491
7,626

5,487
4,389
4,721
4,209
4,309

4,317
5,019
4,670
4,271
4,233

1,530
1,620
1,777
1,960
1,990

Federal Reserve Banks:
1972—Dec. 31................................................
1973—Dec. 31................................................
1974—Dec. 31................................................
1975—May 31................................................
June 30................................................

69,906
78,516
80,501
85,622
84,749

37,750
46,189
45,388
46,603
45,953

29,745
36,928
36,990
38,287
37,239

8,005
9,261
8,399
8,316
8,714

24,497
23,062
23,282
28,925
28,440

6,109
7,504
9,664
6,994
7,137

1,414
1,577
1,453
1,375
1,419

136
184
713
1,725
1,801

Held by private investors:
1972—Dec. 31................................................
1973—Dec. 31................................................
1974—Dec. 31................................................
1975—May 31................................................
June 3 0 ................................................

180,243
170,746
180,999
209,150
210,382

91,063
93,162
100,298
115,374
115,621

73,451
70,227
82,168
92,861
90,851

17,612
22,935
18,130
22,513
24,770

57,649
50,939
54,206
64,510
65,907

17,547
13,241
13,512
15,631
15,384

9,570
9,063
8,710
8,903
8,857

4,413
4,341
4,274
4,733
4,612

Commercial banks:
1972—Dec. 31........................................
1973—Dec. 31........................................
1974—Dec. 31.........................................
1975—May 31.........................................
June 30.........................................

52,440
45,737
42,755
51,065
53,335

18,077
17,499
14,873
18,309
19,643

10,289
7,901
6,952
8,527
9,241

7,788
9,598
7,921
9,782
10,402

27,765
22,878
22,717
27,359
28,415

5,654
4,022
4,151
4,487
4,394

864
1,065
733
621
639

80
272
280
290
244

Mutual savings banks:
1972—Dec. 31........................................
1973—Dec. 31........................................
1974—Dec. 31.........................................
1975—May 31.........................................
June 3 0 .........................................

2,609
1,955
1,477
2,276
2,435

590
562
399
501
519

309
222
207
224
212

281
340
192
277
307

1,152
750
614
1,055
1,150

469
211
174
369
406

274
300
202
235
243

124
131
88
117
116

Insurance companies:
1972—Dec. 31.........................................
1973—Dec. 31.........................................
1974—Dec. 31.........................................
1975—May 31.........................................
June 30........................................

5,220
4,956
4,741
5,537
5,542

799
779
722
793
762

448
312
414
450
421

351
467
308
343
341

1,190
1,073
1,061
1,534
1,549

976
1,278
1,310
1,637
1,707

1,593
1,301
1,297
1,164
1,170

661
523
351
408
354

Nonfinancial corporations:
1972—Dec. 31.........................................
1973—Dec 31.........................................
1974—Dec. 31.........................................
1975—May 31.........................................
June 30 .........................................

4,948
4,905
4,246
5,869
5,136

3,604
3,295
2,623
3,285
2,871

1,198
1,695
1,859
2,420
2,010

2,406
1,600
764
865
861

1,198
1,281
1,423
2,174
1,969

121
260
115
263
159

25
54
26
101
89

1
15
59
46
48

31........................................
31.........................................
31.........................................
31.........................................
30 ........................................

2,873
2,103
1,663
2,212
2,212

820
576
350
619
569

498
121
87
325
285

322
455
263
294
284

1,140
1,011
835
1,184
1,239

605
320
282
271
265

226
151
173
119
114

81
45
23
20
25

State and local governments:
1972—Dec. 31.........................................
1973—Dec. 31.........................................
1974—Dec. 31.........................................
1975—May 31.........................................
June 3 0 .........................................

10,904
9,829
7,864
8,089
8,022

6,159
5,845
4,121
4,397
4,290

5,203
4,483
3,319
3,661
3,466

956
1,362
802
736
824

2,033
1,870
1,796
1,716
1,700

816
778
815
676
717

1,298
1,003
800
831
838

598
332
332
469
476

101,249
101,261
118,253
134,100
133,700

61,014
64,606
77,210
87,470
86,967

55,506
55,493
69,330
77,254
75,216

5,508
9,113
7,880
10,216
11,751

23,171
22,076
25,760
29,487
29,885

8,906
6,372
6,664
7,927
7,735

5,290
5,189
5,479
5,831
5,764

2,868
3,023
3,141
3,384
3,348

S avings and loan associations:

1972—Dec.
1973—Dec.
1974—Dec.
1975—May
June

All others:
1972—Dec.
1973—Dec.
1974—Dec.
1975—May
June

31.........................................
31.........................................
31.........................................
31.........................................
3 0 .........................................

N o te . —Direct public issues only. Based on Treasury Survey of
Ownership.
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: (1) 5,562 commercial banks, 473 mutual savings




banks, and 732 insurance companies combined, each about 90 per cent;
(2) 458 nonfinancial corporations and 486 savings and loan assns., each
about 50 per cent; and (3) 502 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,

U.S. GOVERNMENT SECURITIES □ AUGUST 1975

A 36

DAILY-AVERAGE DEALER TRANSACTIONS
( P a r v a lu e , in m illio n s o f d o lla rs)

U.S. Government securities
By maturity
Period

Total

Within
1 year

1-5
years

By type of customer

5-10
years

Over
10 years

U.S. Govt, U.S. Govt,
securities securities
dealers
brokers

Com­
mercial
banks

All
other1

U.S. Govt,
agency
securities

1974—June.............................
July...............................
Aug..............................
Sept..............................
Oct................................
Nov..............................
Dec...............................

3,084
2,566
3,097
4,114
3,543
3,977
4,111

2,549
2,114
2,407
3,327
2,802
2,872
3,126

385
348
389
472
498
635
550

110
66
238
265
193
384
369

41
38
64
50
50
86
67

693
490
554
683
607
560
671

759
685
876
1,351
1,087
1,049
1,196

877
681
789
1,022
928
1,144
1,120

755
710
878
1,058
920
1,224
1,124

978
1,044
856
1,227
1,150
1,186
1,087

1975—Jan................................
Feb...............................
Mar..............................
Apr...............................
M ay.............................
June.............................

5,415
5,770
4,467
5,197
6,419
5,732

3,495
3,353
2,812
3,682
4,181
3,745

1,514
1,521
994
1,096
1,615
1,484

303
711
464
285
466
372

104
185
197
134
158
132

887
698
671
704
981
801

1,549
2,044
1,183
1,450
1,917
1,689

1,503
1,511
1,198
1,242
1,454
1,336

1,478
1,518
1,415
1,801
2,067
1,906

1,244
1,233
928
904
1,049
1,217

Week ending—
1975—June

4 .......................
11.......................
18.......................
25.......................

5,864
6,310
5,352
4,929

4,184
4,240
3,439
3,033

1,214
1,474
1,339
1,434

328
459
445
314

139
137
129
147

890
834
801
693

1,628
1,859
1,558
1,581

1,296
1,621
1,280
1,055

2,050
1,996
1,713
1,599

1,051
1,452
1,096
1,334

July

2 .......................
9.......................
16.......................
23.......................
30.......................

6,246
4,189
3,959
4,329
5,335

4,001
3,070
2,790
3,200
3,770

1,951
943
986
945
1,349

213
105
110
122
141

82
71
73
62
76

854
568
655
565
752

1,755
1,152
1,154
1,014
1,608

1,319
1,040
903
1,072
1,277

2,317
1,430
1,247
1,677
1,698

881
999
727
800
689

1 Since Jan. 1972 has included transactions of dealers and brokers in
securities other than U.S. Govt.
N o t e . —The transactions data combine market purchases and sales of
U.S. Govt, securities dealers reporting to the F.R. Bank of N e w York.

They do not include allotments of, and exchanges for, new U.S. Govt,
securities, redemptions of called or matured securities, or purchases or
sales of securities under repurchase agreement, reverse repurchase (resale),
or similar contracts. Averages of daily figures based on the number of
trading days in the period.

DAILY-AVERAGE DEALER POSITIONS

DAILY-AVERAGE DEALER FINANCING

(Par value, in millions of dollars)

(In millions of dollars)

U.S. Government securities, by maturity
Period

Within
All
1
maturi­
year
ties

1-5
years

5-10
years

Over
10
years

U.S.
Govt.
agency
securi­
ties

Commercial banks
Period

All
sources

New
York
City

Else­
where

Corpora­
tions 1

All
other

587
254
2,432
3,033
2,870
4,513
4,831

447
219
2,361
2,692
2,149
2,999
3,100

51
-5 2
215
329
430
728
975

73
85
337
328
260
618
559

16
3
66
59
31
169
197

1,200
908
1,041
1,190
1,445
1,531
1,803

1974—June...........
July...........
Aug............
Sept............
Oct.............
Nov...........
Dec............

2,477
1,710
4,138
4,709
4,621
5,626
6,904

241
6
988
1,312
1,194
1,466
2,061

884
596
1,248
1,247
1,003
1,245
1,619

268
216
548
480
571
561
691

1,083
892
1,354
1,671
1,853
2,355
2,534

1975—Jan................. 4,634
Feb................. 5,588
Mar................ 5,737
Apr................. 4,453
May............... 6,332
June............... 6,768

2,689
3,658
3,435
3,123
4,917
5,923

1,236
1,180
1,486
1,036
1,094
748

600
536
618
218
248
100

113
213
198
77
73
-3

1,578
1,469
1,444
937
896
790

1975—Jan.............
Feb............
Mar...........
Apr............
M ay..........
June..........

6,185
6,295
6,881
5,696
6,656
7,682

1,455
1,672
1,879
1,655
1,684
1,955

1,277
1,077
1,650
1,326
1,567
1,979

864
714
838
583
452
737

2,590
2,832
2,513
2,132
2,953
3,012

1974—June ' .............
Julyr ..............
Aug.r.............
Sept.r ............
Oct.................
Nov................
Dec.................

Week ending—

Week ending—

1975—May

7 ........
14
21
28

4,773
6,713
7,164
6,890

4,573
4,966
5,113
5,088

457
1,019
1,578
1,414

-1 3 6
583
324
258

-121
145
149
130

806
879
940
942

1975—May

7. ..
1 4 ...
21. ..
2 8 ...

5,108
6,189
7,945
7,222

1,113
1,768
2,328
1,704

1,199
1,143
1,602
2,060

315
464
570
471

2,482
2,815
3,445
2,988

June

4 ........
11 ,
18 ,
2 5 ........

6,268
6,471
7,550
6,745

5,215
5,794
6,788
5,999

852
553
644
740

159
117
86
31

41
7
33
-2 5

884
780
822
778

June

4 ...
11...
1 8 ...
2 5 ...

7,054
7,262
8,950
7,665

1,427
2,039
2,733
1,896

2,001
2,224
2,347
1,983

460
698
914
737

3,166
2,301
2,956
3,050

N o t e . —The figures include all securities sold by dealers under repur­
chase contracts regardless of the maturity date of the contract, unless the
contract is matched by a reverse repurchase (resale) agreement or delayed
delivery sale with the same maturity and involving the same amount of
securities. Included in the repurchase contracts are some that more
clearly represent investments by the holders of the securities rather than
dealer trading positions.
Average of daily figures based on number of trading days in the period.




1 All business corporations, except commercial banks and insurance
companies.
N o t e . —Averages of daily figures based on the number of calendar days
in the period. Both bank and nonbank dealers are included. See also
N o t e to the table on the left.

AUGUST 1975 □ FEDERALLY SPONSORED CREDIT AGENC

a

;

ING ISSUES OF FEDERALLY SPONSORED CREDIT AGENCIES, JUNE 30f !
Cou­ Amount
pon
(millions
rate of dollars)

7.95
7.88
7.15
6.50
7.05
9.10
8.70
7.38
8.75
9.20
7.20
7.45
7.80
9.55
8.60
9.55
7.20
8.05
8.70
6.95
7.15
8.80
6.75
7.45
9.15
9.38
7.60
9.10
8.65
9.45
8.65
8.75
9.50
8.15
7.50
7.75
7.05
7.80
6.60
8.65
7.30
7.38
8.75
7.38

300
500
400
350
600
700
400
300
300
600
600
300
500
700
600
500
500
500
500
200
300
600
300
300
700
400
500
500
600
600
500
400
500
500
500
350
300
200
200
400
183
400
300
400

7.05
6.15
8.60
7.75
7.15

400
350
140
150
150

8.20

300

2,140
4.38
7.40

248
250

3.58
5.48
5.85
5.92
5.50
5.49
5.74
8.63

53
5
71
35
10
21
81
200

Agency, and date of issue
and maturity
Federal National Mortgage
Association—Cont.
Debentures:
10/13/70 - 9/10/75........
3/12/73 -9/10/75............
3/10/72 - 12/10/75........
9/10/73 - 12/10/75..........
3/11/71 - 3/10/76............
6/12/73 - 3/10/76...........
6/10/71 -6/10/76...........
2/10/72 -6/10/76...........
9/10/74 -6/10/76...........
11/10/71 - 9/10/76.........
6/12/72-9/10/76...........
12/10/74 - 9/10/76..........
7/12/71 - 12/10/76..........
12/11/72- 12/10/76........
6/10/74-12/10/76..........
3/13/62 - 2/10/77..........
9/11/72 - 3/10/77...........
3/11/74 - 3/10/77...........
12/10/70 - 6/10/77........
5/10/71 -6/10/77...........
12/10/73 - 6/10/77.........
9/10/71 -9/12/77...........
9/10/73 - 9/12/77...........
7/10/73 - 12/12/77.........
10/1/73 - 12/12/77.........
6/10/74-3/10/78............
3/10/75-3/10/78..............
6/12/73 - 6/12/78...........
3/11/74 -9/11/78...........
10/12/71 - 12/11/78....
7/10/74- 12/11/78.........
12/10/73 - 3/12/79.........
9/10/73 -6/11/79...........
9/10/74-6/11/79...........
6/12/72-9/10/79..........
12/10/74 -9/10/79........
12/10/71 - 12/10/79...,
6/10/75 - 12/10/79........
2/10/72- 3/10/80..........
3/10/75-3/10/80............
4/1/75 -4/10/80............
6/10/74-6/10/80..........
2/16/73 - 7/31/80..........
2/16/73 -7/31/80..........
10/1/73 -9/10/80..........
1/16/73 - 10/30/80........
12/11/72 - 12/10/80___
6/29/72- 1/29/81..........
3/12/73 - 3/10/81..........
4/18/73 - 3/10/81..........
3/21/73 - 5/1/81............
3/21/73 - 5/1/81............
1/21/71 - 6/10/81........
9/10/71 -9/10/81..........
9/10/74-9/10/81..........
3/11/74-12/10/81........
7/10/74 - 3/10/82..........
6/28/72-5/1/82............
2/10/71 - 6/10/82..........
9/11/72 - 9/10/82..........
12/10/73 - 12/10/82....
3/11/71 -6/10/83..........
6/12/73 - 6/10/83..........
11/10/71 -9/12/83........
6/10/75 - 12/12/83........
4/12/71 -6/11/84..........
12/10/74-9/10/84........
12/10/71 - 12/10/84...
3/10/75-3/11/85............
3/10/72 - 3/10/92........
6/12/72-6/10/92..........
12/11/72- 12/10/97-82..

Cou­ Amount
pon
(millions
rate of dollars)

350
650
500
300
500
400
250
450
700
300
500
200
300
500
600
198
500
400
250
150
500
300
400
500
500
650
350
600
550
300
450
500
300
600
300
700
350
650
250
750
300
600
1
9
400
5
300
156
350
26
18
2
250
250
300
250
300
58
250
200
300
200
300
250
300
200
300
250
500
200
200
200

Agency, and date of issue
and maturity
Banks for cooperatives
Bonds:
1/2/75 -7 /1 /7 5 . . ..
2/3/75 - 8/4/75
3/3/75-9/2/75........
4/1/75 - 10/1/75...
5/1/75 - 11/3/75...
6/2/75 - 12/1/75...
10/1/73 -4 /4 /7 7 ...
12/2/74- 10/1/79..

493
478
407
353
374
439
200
201

Federal intermediate
credit banks
Bonds:
10/1/74-7/1/75.
1/3/72 -7 /1 /7 5 ..
11/4/74-8/4/75.
12/2/74-9/2/75.
1/2/75 - 10/1/75.
2/3/75 - 11/3/75 .
3/3/75-12/1/75. .
3/1/73 - 1/5/76. .
4/1/75 - 1/5/76..
5/1/75 -2/2/76. .
6/2/75 - 3/1/76..
7/2/73 - 1/3/77..
7/1/74 -4 /4 /7 7 ..
1/2/74 - 1/3/78. .
1/2/75 -1/2/79. .

769
302
758
783
563
824
897
261
,079
909
840
236
321
406
410

Federal land banks
Bonds:
2/15/72 - 7 /2 1 /7 5 ....
4/22/74-7/21/75___
7/20/71 - 10/20/75...
10/23/73 - 10/20/75..
4/20/72- 1/20/76....
7/22/74 - 1/20/76....
2/21/66 - 2/24/76...
1/22/73 - 4 /2 0 /7 6 ....
4 /2 2 /7 4 -4 /2 0 /7 6 ....
7/20/66 - 7/20/76...
1/21/74-7/20/76. . . .
4/23/73 - 10/20/76...
4/21/75 - 1/20/77....
4/22/74 - 4/20/77....
7/20/73 - 7/20/77... .
10/20/71 - 10/20/77..
10/21/74- 1/23/78. ..
2/20/63 - 2/20/73-78.
5/2/66 - 4 /2 0 /7 8 ....
1/20/75 -4/20/78. . . .
7/20/72 - 7/20/78...
7/22/74 - 7/20/78....
10/23/73 - 10/19/78..
2/20/67 - 1/22/79....
1/21/74- 1/22/79....
9/15/72 -4 /2 3 /7 9 ....
2/20/74 - 7/23/79....
10/23/72 - 10/23/79..
1/22/73 - 1/21/80....
7/20/73 -7 /2 1 /8 0 ....
10/21/74- 10/20/80. .
2/23/71 -4/20/81___
7/22/74 - 7/20/81
1/20/75 - 1/20/82___
4 /2 0 /7 2 -4 /2 0 /8 2 ....
4/21/75 -4 /2 0 /8 2 ....
4/23/73 - 10/20/82...
10/23/73 - 10/20/83..
6/23/75 - 7/22/85___

425
300
300
362
300
650
123
373
400
150
360
450
750
565
550
300
546
148
150
713
269
350
550
285
300
235
389
400
300
250
400
224
265
400
200
300
239
300
391

not guaranteed by the U.S. Govt.; see also note to table at top of p. A-38.




noun
illion
lollar

FEDERALLY SPONSORED CREDIT AGENCIES □ AUGUST 1975

A 38

MAJOR BALANCE SHEET ITEMS OF SELECTED FEDERALLY SPONSORED CREDIT AGENCIES
(In millions of dollars)
Federal home loan banks

End of
period

Assets

Federal National
Mortgage Assn.
(secondary market
operations)

Liabilities and capital
Cash
and
de­
posits

Ad­
vances
to
mem­
bers

Invest­
ments

1970.............
1971.............
1972.............
1973.............

10,614
7,936
7,979
15,147

3,864
2,520
2,225
3,537

105
142
129
157

10,183
7,139
6,971
15,362

2,332
1,789
1,548
1,745

1,607
1,618
1,756
2,122

1974—June..
Ju ly ..
Aug...
Sept...
O ct...
N o v ..
D ec...

17,642
18,582
19,653
20,772
21,409
21,502
21,804

2,564
2,578
2,052
2,681
3,224
2,568
3,094

115
150
80
135
105
106
144

16,393
17,390
18,759
20,647
22,058
21,474
21,878

2,158
1,954
1,935
2,160
2,129
2,182
2,484

1975—Jan .. .
Feb...
M a r..
Apr...
M ay..
June..

20,728
19,460
18,164
17,528
17,145
16,803

4,467
4,838
6,415
6,836
5,745
6,259

113 21,778
99 20,822
154 '20,754
98 '20,738
98 '19,463
134 19,396

2,612
2,819
3,025
2,651
2,708
2,831

Bonds
and
notes

Mem­
ber
de­
posits

Banks
for
cooperatives

Deben­ Loans
tures
to
and
cooper­
notes
atives
(L)
(A)

Bonds

15,502
17,791
19,791
24,175

15,206
17,701
19,238
23,001

2,413
2,450
2,495
2,543
2,580
2,603
2,624

26,559
27,304
28,022
28,641
29,139
29,407
29,709

2,699
2,698
2,677
2.660
2*656
2,653

29,797
29,846
29,870
29,931
29,977
30,136

Capital
stock

Mort­
gage
loans
(A)

N o t e . —Data from Federal Home Loan Bank Board, Federal National
Mortgage Assn., and Farm Credit Admin. Among omitted balance
sheet items are capital accounts of all agencies, except for stock of FHLB’s.
Bonds, debentures, and notes are valued at par. They include only publicly

Federal
intermediate
credit banks

Federal
land
banks

Bonds

(L)

Loans
and
dis­
counts
(A)

2,030
2,076
2,298
2,577

1,755
1,801
1,944
2,670

25,232
25,878
26,639
27,312
27,543
28,024
28,201

2,733
3,008
3,026
3,092
3,598
3,573
3,575

28,030
27,730
28,420
28,257
27,714
28,237

3,910
3,821
3,741
3,650
3,499
3,371

Bonds

(L)

Mort­
gage
loans
(A)

4,974
5,669
6,094
7,198

4,799
5,503
5,804
6,861

7,186
7,917
9,107
11,071

6,395
7,063
8,012
9,838

2,449
2,477
2,622
2,835
2,855
3,295
3,561

8,479
8,706
8,548
8,931
8,838
8,700
8,848

7,860
8,212
8,381
8,502
8,482
8,441
8,400

12,400
12,684
12,941
13,185
13,418
13,643
13,643

10,843
11,782
11,782
11,782
12,427
12,427
12,427

3,653
3,592
'3,439
3,329
'2,982
2,948

8,888
9,031
9,303
9,520
9,763
10,031

8,419
8,484
8,703
'9,061
'9,231
'9,357

14,086
14,326
14,641
14,917
15,180
15,437

13,020
13,021
13,021
13,571
13,571
13,961

(L)

offered securities (excluding, for FHLB’s, bonds held within the FHLB
System) and are not guaranteed by the U.S. Govt.; for a listing of these
securities, see table on preceding page. Loans are gross of valuation reserves
and represent cost for FNMA and unpaid principal for other agencies.

NEW ISSUES OF STATE AND LOCAL GOVERNMENT SECURITIES
(In millions of dollars)
All issues (new capital and refunding)
Type of issue

Period
Total

197
197
197
197

1
2
3
4

24,963
23,653
23,968
24,315

Gener­
al
obli­
gations

Reve­
nue

15,220 8,681
13,305 9,332
12,257 10,632
13,563 10,212

1974—June..
July. .
A u g ..
Sept..
O ct...
N ov..
D ec...

2,171
1,466
1,109
1,705
2,865
2,487
1,500

1,075
859
576
869
1,707
1,110
761

856
600
529
832
1,153
1,374
717

1975- -Jan.' .
F eb.'.
M a r'.
A pr.r.
May r.
June..

2,367
2,327
2,090
2,391
2,863
2,947

1,364
1,704
1,283
1,484
1,857
1,699

997
618
805
900
1,001
1,246

HAAl

Issues for new capital

Type of issuer
U.S.
Govt.
loans

State

Special
district
Other2
and
stat.
auth.

Use of proceeds
Total

Edu­ Roads
and
cation bridges

Util­
ities4

Hous­ Veter­
ans*
ings
aid

5,999 8,714 10,246
4,991 9,496 9,165
4,212 '9,505 10,249
4,784 8,638 10,817

24,495
19,959
22,397
23,508

5,278
4,981
4,311
4,730

2,642
1,689
1,458
768

5,214
4,638
5,654
5,634

2,068
1,910
2,639
1,064

721
158
400
641
974
1,005
558

864
761
565
611
1,558
789
700

2,079
1,456
1,067
1,669
2,738
2,403
1,475

220
314
228
251
343
698
297

62
58
85
11
110
4
64

664
154
257
380
236
866
424

334

702
582
673
876
1,196
1,092

1,293
861
1,045
1,143
852
918

2,332
2,287
2,035
2,311
2,769
2,733

710
432
463
405
419
420

49
206
94
61
210
159

644
417
471
733
559
756

172
105
35
38
25
36

1,000
959
1,022
461

62
57
'57
79

234

6
7
4
4
5
3
22

580
540
141
448
328
689
222

6
5
2
7
5
2

372
877
376
368
811
923

1 Only bonds sold pursuant to 1949 Housing Act, which are secured
by contract requiring the Housing Assistance Administration to make
annual contributions to the local authority.
2 Municipalities, counties, townships, school districts.
3 Excludes U.S. Govt, loans. Based on date of delivery to purchaser
and payment to issuer, which occurs after date of sale.




Total
amount
deliv­
ered3

15
21
110
9
53

4 Water, sewer, and other utilities.
5 Includes urban redevelopment loans.
N o t e . — Security Industries Assn. data; par amounts of long-term issues
based on date of sale unless otherwise indicated.
Components may not add to totals due to rounding.

AUGUST 1975 □ SECURITY ISSUES

A 39

TOTAL NEW ISSUES
(In millions of dollars)
Gross proceeds, all issues1
Noncorporate

Corporate

Period
Total

U.S.
Govt.2

Bonds

U.S.
Govt.
agency3

State
and local
(U.S.)4

Others

16,283
12,825
23,883

24,370
23,070
22,700

2,165
1,589
1,385

Total

Stock

Total

Publicly
offered

Privately
placed

Preferred

Common

44,914
40,787
33,391
'37,837

31,999
27,727
22,268
'31,551

24,790
18,347
13,649
25,337

7,209
9,378
8,620
'6,214

3,679
3,373
3,372
2,253

9,236
9,689
7,750
'4,033

1974—Apr..
May.
June.
Ju ly ..
A ug..
Sept..
Oct...
N ov..
Dec..,

'3,060
3,164
2,981
'3,257
2,668
'1,617
'4,609
'3,746
'3,505

'2,260
2,957
2,455
'2,702
2,341
'1,204
'3,778
'3,346
'3,052

1,594
2,350
1,939
2,086
2,042
897
3,423
3,016
2,172

666
607
516
'616
299
'307
355
'330
880

355
65
113
228
107
126
196
93
152

445
142
413
327
218
'287
635
307
301

1975—Ja n ...
Feb...
M ar..
Apr..,

'5,379
'4,526
'5,368
4,407

'4,790
'3,904
'4,471
3,131

3,657
3,201
'3,971
2,771

'1,133
'703
'500
360

235
173
253
347

'354
449
644
929

1971.
1972.
1973.
1974'

105,233
96,522
100,417

17,235
17,080
19,057

Gross proceeds, major groups of corporate issuers
Period

Real estate
and financial

Manufacturing

Commercial and
miscellaneous

Transportation

Bonds

Stocks

Bonds

Stocks

Bonds

Stocks

Bonds

Stocks

Bonds

Stocks

1971..............................................
1972..............................................
1973..............................................
1 974'............................................

9,551
4,796
4,329
9,890

2,102
1,812
643
543

2,158
2,669
1,283
'1,851

2,370
2,878
1,559
'956

2,006
1,767
1,881
983

434
187
43
22

7,576
6,398
5,585
8,872

4,201
4,967
4,661
3,964

4,222
3,680
3,535
3,710

1,596
1,127
1,369
222

6,484
8,415
5,661
'6,241

2,204
2,096
2,860
587

1974—Apr.................................
M ay...................................
June...................................
July....................................
Aug....................................
Sept....................................
Oct.....................................
Nov....................................
Dec..................................

1,194
847
434
1,051
601
186
725
1,697
1,456

9
15
43
43
4
2
3
2
196

238
332
303
'257
38
46
102
'116
180

56
71
139
93
62
'45
29
100
23

6
44
5
62
14
40
306
336
14

446
837
859
318
862
384
1,414
739
435

684
75
288
300
216
296
695
225
194

283
660
355
242
364
331
439
62
150

5
3
1
53

95
239
491
'773
462
'217
791
397
817

47
44
39
65
44
48
69
44
15

1975—Jan..................................... '1,898
Feb................................... '1,631
Mar.................................... '2,368
Apr.................................... 1,473

3
44
111
233

'179
'65
'271
289

'74
60
74
211

84
'75
83
67

'765
'1,471
828
794

507
486
679
614

'933
'124
'317
352

'930
'539
'604
156

32
'34
9

1 Gross proceeds are derived by multiplying principal amounts or
number of units by offering price.
2 Includes guaranteed issues.
3 Issues not guaranteed.
4 See N o t e to table at bottom of opposite page.




15
1
5

Public utility

Communication

18
36
31
25
5
1
209

Bonds

Stocks

5 Foreign governments and their instrumentalities, International Bank
for Reconstruction and Development, and domestic nonprofit organ­
izations.
N o t e . — Securities and Exchange Commission estimates of new issues
maturing in more than 1 year sold for cash in the United States.

A 40

SECURITY ISSUES □ AUGUST 1975
NET CHANGE IN OUTSTANDING CORPORATE SECURITIES
(In millions of dollars)
Derivation of change, all issuers1
All securities

Period

Bonds and notes

Common and preferred stocks

New issues

Retirements

Net change

New issues

Retirements

Net change

New issues

Retirements

Net change

1971.......................
1972.......................
1973.......................
1974.......................

46,687
42,306
33,559
39,334

9,507
10,224
11,804
9,935

37,180
32,082
21,754
29,399

31,917
27,065
21,501
31,554

8,190
8,003
8,810
6,255

23,728
19,062
12,691
25,098

14,769
15,242
12,057
7,980

1,318
2,222
2,993
3,678

13,452
13,018
9,064
4,302

1974—1..................
II................
I l l ...............
IV...............

8,973
9,637
8,452
12,272

2,031
2,048
2,985
2,871

6,942
7,589
5,467
9,401

6,810
7,847
6,611
10,086

1,442
1,584
1,225
2,004

5,367
6,263
5,386
8,082

2,163
1,790
1,841
2,186

588
465
1,759
866

1,575
1,326
82
1,319

1975—1.................

15,211

2,088

13,123

12,759

1 ,587

11,172

2,452

501

1,951

Type of issues

1971.
1972
1973.
1974.
1974III...............
IV...............
1975-

Commercial
and other 2

Manu­
facturing

Period

Transpor­
tation 3

Public
utility

Communi­
cation

Real estate
and financial 1

Bonds
and
notes

Stocks

Bonds
and
notes

Stocks

Bonds
and
notes

Stocks

Bonds
and
notes

Stocks

Bonds
and
notes

Stocks

Bonds
and
notes

Stocks

6,585
1,995
801
7,404

2,534
2,094
658
17

827
1,409
-109
1,116

2, >-90
2,471
1,411
-1 3 5

900
711
1,044
341

800
254
-9 3
-2 0

6,486
5,137
4,265
7,308

4,206
4,844
4,509
3,834

3,925
3,343
3,165
3,499

1,600
1,260
1,399
398

5,005
7,045
3,523
5,428

2,017
2,096
1,181
207

906
1,921
1,479
3,098

324
-1 2
-421
126

-1 1
698
189
240

363
213
-6 6 4
-47

-37
-1 3
49
342

-3 5
12
-6
9

2,172
1,699
1,358
2,079

827
1,038
862
1,107

675
1,080
1,116
628

76
-7
222
107

1,662
877
1,194
1,695

20
82
88
17

5,134

262

373

77

1

1

2,653

1,569

1,269

24

1,742

18

1 Excludes investment companies.
2 Extractive and commercial and miscellaneous companies.
3 Railroad and other transportation companies.
N o t e . —Securities and Exchange Commission estimates of cash trans­
actions only. As contrasted with data shown on preceding page, new issues

exclude foreign sales and include sales of securities held by affiliated com­
panies, special offerings to employees, and also new stock issues and cash
proceeds connected with conversions of bonds into stocks. Retirements
are defined in the same way and also include securities retired with in­
ternal funds or with proceeds of issues for that purpose.

OPEN-END INVESTMENT COMPANIES
(In millions of dollars)

Year

Sales and redemption
of own shares
Sales 1 Redemp­
tions

Net
sales

Assets (market value
at end of period)
Total 2

Cash
Other
position 3

1963..............
1964..............
1965..............

2,460
3,404
4,359

1,504
1,875
1,962

952 25,214
1,528 29,116
2,395 35,220

1,341
1,329
1,803

1966..............
1967..............
1968..............

4,671
4,670
6,820

2,005
2,745
3,841

2,665 34,829
1,927 44,701
2,979 52,677

2,971
2,566
3,187

1969..............
1970..............
1971..............

6,717
4,624
5,145

3,661
2,987
4,751

3,056 48,291
1,637 47,618
394 55,045

3,846
3,649
3,038

1972..............
1973..............
1974..............

4,892
4,358
5,346

6,563
5,651
3,937

-1,671 59,831
-1,261 46,518
1,409 35,777

3,035
4,002
5,637

Sales and redemption
of own shares
Sales 1 Redemp­
tions

23,873 1974—June..
July. .
27,787
33,417
Aug...
Sept...
31,858
O ct...
N ov...
42,135
49,490
Dec...

337
442
446
499
816
619
736

276
352
339
292
311
335
411

44,445 1975—Ja n ...
43,969
Feb...
M ar. .
52,007
Apr.. .
56,796
M ay..
42,516
Ju n e ..
30,140

1,067
889
847
808
677
704

428
470
623
791
735
811

1 Includes contractual and regular single-purchase sales, voluntary and
contractual accumulation plan sales, and reinvestment of investment in­
come dividends; excludes reinvestment of realized capital gains dividends.
2 Market value at end of period less current liabilities.
3 Cash and deposits, receivables, all U.S. Govt, securities, and other
short-term debt securities, less current liabilities.




Month

Net
sales
61
90
127
207
505
284
325

Assets (market value
at end of period)
Total 2

Cash
position 3

Other

40,040
37,669
35,106
31,985
37,115
36,366
35,777

4,461
4,609
4,953
5,078
5,652
5,804
5,637

35,579
33,060
30,153
26,907
31,463
30,562
30,140

639 3,7407
419 39,330
224 40,449
17 42,353
r —58 '43,832
-1 0 7 45,538

3,889
4,006
3,870
3,841
*•3,879
3,643

33,518
35,324
36,579
38,512
39,953
41,895

N o t e . — 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.

AUGUST 1975 □ BUSINESS FINANCE

A 41

CORPORATE PROFITS, TAXES, AND DIVIDENDS
(In billions of dollars)

Year

Profits
before
taxes

In­
come
taxes

Profits
after
taxes

Cash
divi­
dends

Undis­
tributed
profits

Corporate
capital
consump­
tion
allow­
ances 1

1968..............
1969..............
1970..............
1971..............
1972..............
1973..............
1974...............

87.6
84.9
74.0
83.6
99.2
122.7
140.7

39.9
40.1
34.8
37.5
41.5
49.8
55.7

47.8
44.8
39.3
46.1
57.7
72.9
85.0

23.6
24.3
24.7
25.0
27.3
29.6
32.7

24.2
20.5
14.6
21.1
30.3
43.3
52.4

46.a
51.9
56.0
60.4
66.3
71.2
76.7

1 Includes depreciation, capital outlays charged to current accounts, and
accidental damages.

Corporate
capital
Undis­
tributed consump­
tion
profits
allow­
ances 1

Quarter

Profits
before
taxes

In­
come
taxes

Profits
after
taxes

Cash
divi­
dends

1973—11....
I II...
IV ...

124.9
122.7
122.7

50.9
49.9
49.5

74.0
72.9
73.2

29.1
29.8
30.7

44.9
43.1
42.5

70.8
71.6
73.1

1974—1___
II. ..
III...
IV ...

135.4
139.0
157.0
131.5

52.2
55.9
62.7
52.0

83.2
83.1
94.3
79.5

31.6
32.5
33.2
33.3

51.6
50.5
61.1
46.2

74.1
75.7
77.6
79.3

1975—1___

101.2

39.0

62.3

33.8

28.5

81.2

N o t e . —Dept, of Commerce estimates. Quarterly data are at seasonally
adjusted annual rates.

CURRENT ASSETS AND LIABILITIES OF NONFINANCIAL CORPORATIONS
(In billions of dollars)
Current assets
Net
working
capital

End of period

Total

Cash

U.S.
Govt.
securi­
ties

Current liabilities

Notes and accts.
receivable
U.S.
Govt, 1

Other

Inven­
tories

Other

Total

Notes and accts.
payable
Accrued
Federal
income
U.S.
taxes
Other
Govt.1

Other

1970.............................. 187.4
1971.............................. 203.6
1972.............................. 221.3

492.3
529.6
573.5

50.2
53.3
57.5

7.7
11 .0
9.3

4.2
3.5
3.4

201.9
217.6
240.0

193.3
200.4
215.2

35.0
43.8
48.1

304.9
326.0
352.2

6.6
4.9
4.0

204.7
215.6
230.4

10.0
13.1
15.1

83.6
92.4
102.6

1973—1.........................
II .......................
I l l .....................
IV ......................

229.5
235.4
239.5
242.3

590.6
608.2
625.3
643.2

58.1
59.0
58.9
61.6

11.2
10.0
9.7
11.0

3.2
2.9
3.0
3.5

245.3
255.4
264.4
266.1

222.5
230.1
238.0
246.7

50.2
50.8
51.3
54.4

361.1
372.7
385.8
401 .0

4.1
4.5
4.4
4.3

231.7
241.7
250.2
261 .6

17.1
15.0
16.5
18.1

108.2
111 .6
114.7
117.0

1974—1.........................
II .......................
I l l .....................
IV ......................

250.1
253.9
259.5
261.5

666.2
685.4
708.6
712.2

59.4
58.8
60.3
62.7

12.1
10.7
11.0
11.7

3.2
3.4
3.5
3.5

276.2
289.8
295.5
289.7

258.4
269.2
282.1
288.0

56.9
53.5
56.1
56.6

416.1
431.5
449.1
450.6

4.5
4.7
5.1
5.2

266.5
278.5
287.0
287.5

20.6
19.0
22.7
23.2

124.5
129.1
134.3
134.8

1975—1......................... 260.4

698.4

60.6

12.1

3.2

281.9

285.2

55.4

438.0

5.3

271.2

21.8

139.8

1 Receivables from, and payables to, the U.S. Govt, exclude amounts
offset against each other on corporations’ books.

N o t e . —Based

on Securities and Exchange Commission estimates,

BUSINESS EXPENDITURES ON NEW PLANT AND EQUIPMENT
(In billions of dollars)

Total
Durable

Non­
durable

Public utilities

Transportation

Manufacturing
Period

Mining

Rail­
road

Air

Other

Commu­
nications
Electric andGas
other

Other i

Total
(S.A.
A.R.)

1
2
3
4

81.21
88.44
99.74
112.40

14.15
15.64
19.25
22.62

15.84
15.72
18.76
23.39

2.16
2.45
2.74
3.18

1.67
1.80
1.96
2.54

1.88
2.46
2.41
2.00

1.38
1.46
1.66
2.12

12.86
14.48
15.94
17.63

2.44
2.52
2.76
2.92

10.77
11.89
12.85
13.96

18.05
20.07
21.40
22.05

1973—1 ..
II..
III.
IV.

21.50
24.73
25.04
28.48

3.92
4.65
4.84
5.84

3.88
4.51
4.78
5.59

.63
.71
.69
.71

.46
.46
.48
.56

.52
.72
.57
.60

.32
.43
.44
.47

3.45
3.91
4.04
4.54

.50
.68
.77
.82

2.87
3.27
3.19
3.53

4.94
5.40
5.24
5.83

96.19
97.76
100.90
103.74

1974—1 ..
II .
III.
IV.

24.10
28.16
28.23
31.92

4.74
5.59
5.65
6.64

4.75
5.69
5.96
6.99

.68
.78
.80
.91

.50
.64
.64
.78

.47
.61
.43
.48

.34
.49
.58
.71

3.85
4.56
4.42
4.80

.52
.75
.78
.87

3.19
3.60
3.39
3.78

5.05
5.46
5.57
5.97

107.27
111.40
113.99
116.22

1975—1 ..
IP

25.82
28.63

5.10
5.42

5.74
6.46

.91
.94

.59
.81

.44
.54

.62
.63

3.84
4.38

.58
.75

3.11

4.8

114.57
113.39

197
197
197
197

1 Includes trade, service, construction, finance, and insurance.
2 Anticipated by business.




8.72

N o t e . —Dept, of Commerce and Securities and Exchange Commission
estimates for corporate and noncorporate business; excludes agriculture,
real estate operators, medical, legal, educational, and cultural service, and
nonprofit organizations.

A 42

REAL ESTATE CREDIT □ AUGUST 1975
MORTGAGE DEBT OUTSTANDING BY TYPE OF HOLDER
(In millions of dollars)
End of year

Type of holder, and type of property

1971

End of quarter

1972

1974

1973

1975

I

II

III

IV

I

ALL HOLDERS............................................
1- to 4-family................................................
Multifamily1................................................
Commercial..................................................
Farm.............................................................

499,758
307,200
67,367
92,333
32,858

564,825
345,384
76,496
107,508
35,437

634,954
386,240
85,401
123,965
39,348

645,920
391,751
86,582
127,384
40,203

664,298
402,137
88,258
132,122
41,781

678,693
410,184
90,270
135,048
43,191

688,576
414,961
92,043
137,281
44,291

695,358
418,680
93,016
138,179
45,483

PRIVATE FINANCIAL INSTITUTIONS..
1- to 4-family................................................
Multifamily1................................................
Commercial..................................................
Farm.............................................................

394,239
253,540
52,498
78,345
9,856

450,000
288,053
59,204
92,222
10,521

505,400
322,047
64,730
107,128
11,495

513,918
326,844
65,377
110,047
11,650

528,173
335,414
66,583
114,185
11,991

537,524
340,857
67,844
116,511
12,312

542,589
343,374
68,521
118,264
12,430

546,915
346,090
69,122
119,162
12,541

82,515

99,314

119,068

121,882

127,320

130,582

132,105

72,253
7,313
41,926
5,828

73,987
7,496
43,092
6,007

74,758
7,619
43,679
6,049

132,105

Commercial banks2......................................

1- to 4-family............................................
Multifamily1............................................
Commercial..............................................
Farm .........................................................

48,020
3,984
26,306
4,205
61,978

1- to 4-family............................................
Multifamily1............................................
Commercial..............................................
Farm .........................................................
1- to 4-family............................................
Multifamily1............................................
Life insurance companies .............................

57,004
5,778
31,751
4,781
67,556

67,598
6,932
38,696
5,442

41,650
15,490
10,354
62

73,230

73,929

44,246
16,843
12,084
57

44,443
17,002
12,425
59

44,398
17,070
12,698
59

44,604
17,208
12,938
59

44,670
17,234
12,956
60

44,796
17,292
12,997
75

174,250

206,182

231,733

236,136

243,400

247,624

249,306

252,463

142,275
17,355
14,620
75,496

167,049
20,783
18,350
76,948

187,750
22,524
21,459
81,369

22,350
17,153
31,767
5,678

FEDERAL AND RELATED AGENCIES..
1- to 4-family................................................
Multifamily1................................................
Commercial..................................................

39,357
26,453
4,555
11
8,338

45,790
30,147
6,086

55,664
35,454
8,489

9,557

Government National Mortgage Association

5,323

5,113

Farm.........................................................

1- to 4-family............................................
Multifamily1............................................
Commercial....................... .

Farmers Home Administration .....................

2,770
2,542
11
819

22,053
18,431
34,889
5,996

191,223
22,763
22,150
81,971

21,804
18,566
35,617
5,984

74,225

197,008
23,342
23,050
83,228

74,809

200,352
23,574
23,698
84,509

74,920

201,564
23,684
24,058
86,258

62,585
39,784
9,643

67,829
43,188
10,644

72,267
45,748
11,790

75,973
47,751
12,662

11,721

12,171

13,158

13,997

14,729

15,560

2,490
2,623

4,029

3,604

4,052

1,330
2,699

1,189
2,415

3,618

4,848

5,584

1,700

1,194
2,424

1,337
2,715

1,600
3,248

837

1,200

1,300

1,400

1,500

1,600

Federal Housing and Veterans Administra­
tions .......................................................

3,389

2,517
872

3,338

1- to 4-family............................................

3,476

3,514

3,619

3,765

1,980
1,639

2,037
1,728

3,900

Federal National Mortgage Association. . . .

17,791

24,175

24,875

20,516
4,359

26,559

28,641

20,370
3,805

2,199
1,139

19,791

17,697
2,094

550
650

2,013
1,463

596
704

1,964
1,550

Federal land banks (farm only).................

7,917

9,107

11,071

11,467

Federal Home Loan Mortgage Corporation.

964

1,789

2,604

2,637
2, A ll

934
30

GNMA Pools ................................................

3,154

1- to 4-family............................................
Multifamily1............................................

3,153
1

INDIVIDUALS AND OTHERS3................
1- to 4-family................................................
Multifamily1................................................
Commercial..................................................
Farm.............................................................

66,162
27,207
10,314
13,977
14,664

1,754
35

5,815

2,446
158

642
758

688
812

734
866

22,438
20,282
38,052
6,415

1,843
3,741
780
920

4,025

2,083
1,817

2,119
1,906

29,578
23,118

29,754

5,800

23,743
6,011

21,691
4,868

23,258
5,383

12,400

13,185

13,863

14,640

3,191

3,713

4,586
4 , 111

4,608

165

2,951
240

3,414
299

12,973

369

4,231
377

5,620
195

9,109

10,865

11,798

13,892

15,662

8,745
364

10,431
434

11,326
472

12,454
519

13,336
556

15,035
627

69,035
27,184
11,206
15,286
15,359

73,890
28,739
12,182
16,837
16,132

73,740
27,739
12,282
17,337
16,382

73,540
26,939
12,032
17,937
16,632

73,340
26,139
11,782
18,537
16,882

73,720
25,839
11,732
19,017
17,132

72,470
24,839
11,232
19,017
17,382

1 Structure of 5 or more units.
2 Includes loans held by nondeposit trust companies but not bank trust
departments.
3 Includes some U.S. agencies for which amounts are small or separate
data are not readily available.




87,187

58,262
37,168
8,923

22,382
19,984
37,571
6,321

387
450

1- to 4-family............................................
Multifamily1............................................

204,116
23,934
24,413

21,914
19,566
36,783
6,246

398
421

16,681
1,110

75,160

21,755
18,858
36,511
6,104

1- to 4-family............................................
Farm.........................................................

1- to 4-family............................................
Multifamily1.............................................

74,740
7,614
43,700
6,051

38,641
14,386
8,901
50

24,604
16,773
28,518
5,601

1- to 4-family............................................
Multifamily1.............................................

69,374
7,046
39,855
5,607

N o t e . — 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, where not
reported directly, and interpolations and extrapolations where required,
estimated mainly by Federal Reserve.

AUGUST 1975 □ REAL ESTATE CREDIT

A 43

FEDERAL NATIONAL MORTGAGE ASSOCIATION AND FEDERAL HOME LOAN MORTGAGE CORPORATIONSECONDARY MORTGAGE MARKET ACTIVITY
(In millions of dollars)
FNMA
Mortgage
transactions
(during period)

Mortgage
holdings

End of
period

FHLMC

Total i

FHAinsured

VAguaranteed

Pur­
chases

1971.
1972.
1973.
1974,

17,791
19,791
24,175
29,578

12,681
14,624
16,852
19,189

5,110
5,112
6,352
8,310

3,574
3,699
6,127
6,953

1974—Ju n e..
July. .
A ug...
Sept. .
O ct...
Nov...
Dec...

26,559
27,304
28,022
28,641
29,139
29,407
29,578

17,966
18,250
18,526
18,758
18,966
19,083
19,189

7,079
7,384
7,704
7,994
8,206
8,291
8,310

770
886
868
760
612
379
278

1975-—Ja n .. .
F eb ...
M a r..
A p r...
M ay..
Ju n e..

29,670
29,718
29,754
29,815
29,858
30,015

19,231
19,256
19,277
19,282
19,251
19,282

8,318
8,313
8,304
8,337
8,395
8,498

208
169
151
211
247
326

Mortgage
commitments

Sales

336
211
71
5

2

1

Mortgage
holdings

Mortgage
transactions
(during period)

Made
during
period

Out­
stand­
ing

Total

FHAVA

Con­
ven­
tional

Pur­
chases

9,828
8,797
8,914
10,765

6,497
8,124
7,889
7,960

968
1,789
2,604
4.586

821
1,503
1,743
1.904

147
286
861
2,682

778
1,298
1,334
2,191

537
1,175
1,202
997
878
201
231

9,019
9,044
9,115
9,043
8,987
8,532
7,960

3,191
3,309
3,451
3,713
4,107
4,352
4.586

1,877
1,883
1,886
1,896
1,910
1,908
1.904

1,314
1,426
1,565
1,817
2,197
2,445
2,682

146
137
639
913
621
557

7,285
6,672
6,636
6,890
6,615
6,549

4,744
4,533
4,608
4,634
4,773

1,900
1,893
1,887
1,890
1,920

2,845
2,640
2,722
2,744
2,854

i Includes conventional loans not shown separately.
from FNMA and FHLMC, respectively.

N o t e . —Data

For FN M A : Holdings include loans used to back bond issues guaranteed

by GNMA. Commitments include 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 FNMAGNMA Tandem Plan (Program 18).

Mortgage
commitments

Made
during
period

Out­
stand­
ing

64
408
409
52

1,606
1,629
4,553

182
198
186
2.390

222
129
155
273
410
270
266

7
12
16

628
1,127
81
69
30
28
34

2,598
3,583
3,500
3,278
2,871
2,621
2.390

199
113
113
121
203

26
309
19
71
38

26
21
52
297
42

2,190
2,070
1,040
1,161
969

Sales

For FHLM C: Data for 1970 begin with Nov. 26, when the FHLMC
became operational. Holdings and transactions cover participations as
well as whole loans. Holdings include loans used to back bond issues
guaranteed by GNMA. Commitments cover the conventional and Govt.underwritten loan programs.

TERMS AND YIELDS ON NEW HOME MORTGAGES
Conventional mortgages
Yields (per cent) in
primary market

Terms1
Period

FHAinsured
loans—Yield
in private
secondary
market5

Contract
rate (per
cent)

Fees and
charges
(per cent) 2

Maturity
(years)

Loan/price
ratio
(per cent)

Purchase
price (thous.
of dollars)

Loan
amount
(thous. of
dollars)

FHLBB
series 3

HUD
series4

1971...........................
1972...........................
1973...........................
1974...........................

7.60
7.45
7.78
8.71

.87
.88
1.11
1.30

26.2
27.2
26.3
26.3

74.3
76.8
77.3
75.8

36.3
37.3
37.1
40.1

26.5
28.1
28.1
29.8

7.74
7.60
7.95
8.92

7.75
7.64
8.30
9.22

7.70
7.53
8.19
9.55

1974—June...............
July................
Aug................
Sept................
Oct.................
Nov
Dec.................

8.65
8.75
8.87
8.97
8.95
9 04
9.13

1.25
1.28
1.32
1.30
1.37
1.40
1.44

26.3
26.1
26.4
26.1
26.7
26.2
27.5

76.9
74.4
75.3
74.8
74.7
73.6
75.5

39.7
40.5
40.2
42.4
42.3
41.3
42.4

30.1
29.6
29.5
31.1
30.7
30.2
31.3

8.85
8.96
9.09
9.19
9.17
9.27
9.37

9.25
9.40
9.60
9.80
9.70
9.55
9.45

9.46
9.85
10.30
10.38
10.13

1975—Jan.................
Feb.................
Mar................
A pr...
...
M ay...............
June®.............

9.09
8.88
8.79
8.71
8.63
8.74

1.51
1.44
1 .61
1 .53
1 .63
1.37

26.7
26.8
26.5
26.5
27.0
26.6

73.8
76.5
75.1
76.4
75.5
76.8

43.2
44.4
45.9
44.5
43.4
43.1

31.6
33.0
33.7
33.4
32.2
32.6

9.33
9.12
9.06
8.96
8.90
8.96

9.15
9.05
8.90
9.00
9.05
9.00

8.99
8.84
8.69

1 Weighted averages based on probability sample survey of character­
istics of mortgages originated by major institutional lender groups (in­
cluding mortgage companies) for purchase of single-family homes, as
compiled by Federal Home Loan Bank Board in cooperation with Federal
Deposit Insurance Corporation. Data are not strictly comparable with
earlier figures beginning Jan. 1973.
2 Fees and charges—related to principal mortgage amount—include
loan commissions, fees, discounts, and other charges, but exclude closing
costs related solely to transfer of property ownership.
3 Effective rate, reflecting fees and charges as well as contract rates
NOTE TO TABLE AT BOTTOM OF PAGE A-44:
American Life Insurance Association data for new commitments of
$100,000 and over each on mortgages for multifamily and nonresidential
nonfarm properties located largely in the United States. The 15 companies
account for a little more than one-half of both the total assets and the
nonfarm mortgages held by all U.S. life insurance companies. Averages,
which are based on number of loans, vary in part with loan composition
by type and location of property, type and purpose of loan, and loan




9.51

9.16
9.06

(as shown in first column of this table) and an assumed prepayment at
end of 10 years.
4 Rates on first mortgages, unweighted and rounded to the nearest
5 basis points.
5 Based on opinion reports submitted by field offices of prevailing
local conditions as of the first of the succeeding month. Yields are derived
from weighted averages of private secondary market prices for Sec. 203,
30-year mortgages with minimum downpayment and an assumed pre­
payment at the end of 15 years. Any gaps in data are due to periods of
adjustment to changes in maximum permissible contract interest rates.
amortization and prepayment terms. Data for the following are limited
to cases where information was available or estimates could be made:
capitalization rate (net stabilized property earnings divided by property
value); debt coverage ratio (net stabilized earnings divided by debt service);
and per cent constant (annual level payment, including principal and
interest, per $100 of debt). All statistics exclude construction loans,
increases in existing loans in a company’s portfolio, reapprovals, and loans
secured by land only.

A 44

REAL ESTATE CREDIT □ AUGUST 1975

FEDERAL NATIONAL MORTGAGE ASSOCIATION AUCTIONS OF COMMITMENTS TO BUY HOME MORTGAGES
Date of auction
Item

1975
Feb. 24 Mar. 10 Mar. 24

Apr. 7

Apr. 21

May 5

May 19

June 2

June 16 June 30

July 14

July 28

Amounts (millions of dollars):
Govt.-underwritten loans
Offered1.................................
Accepted...............................
Conventional loans
Offered1.................................
Accepted...............................

36.2
23.8

99.2
60.1

460.5
321.4

551.6
277.2

470.9
247.3

525.5
280.4

165.6
115.0

172.5
80.4

73.4
38.6

358.7
246.9

333.2
174.9

415.8
247.7

20.0
9.1

34.4
22.1

60.7
35.8

99.8
44.6

79.2
51.3

69.8
43.9

46.4
38.4

51.2
27.1

28.5
15.7

67.5
47.3

71.4
35.8

56.5
34.5

Average yield (per cent) on short­
term commitments 2
Govt.-underwritten loans........
Conventional loans..................

8.87
9.04

8.78
8.96

8.85
9.00

8.98
9.13

9.13
9.26

9.29
9.43

9.25
9.41

9.14
9.26

9.06
9.21

9.07
9.18

9.10
9.17

9.20
9.26

1 Mortgage amounts offered by bidders are total bids received.
2 Average accepted bid yield (before deduction of 38 basis-point fee
paid for mortgage servicing) for home mortgages assuming a prepayment

period of 12 years for 30-year loans, without special adjustment for
FNMA commitment fees and FNMA stock purchase and holding require­
ments. Commitments mature in 4 months.

MAJOR HOLDERS OF FHA-INSURED AND VA-GUARANTEED RESIDENTIAL MORTGAGE DEBT
(End of period, in billions of dollars)
Holder
All holders...................................................
F H A .........................................................
VA............................................................
Commercial banks......................................
FH A .........................................................
VA............................................................
Mutual savings banks.................................
FH A .........................................................
VA............................................................
Savings and loan assns...............................
F H A ......................................................... }
VA............................................................
Life insurance cos........................................
FH A .........................................................
VA............................................................
Others..........................................................
FH A .........................................................
VA............................................................

Sept. 30,
1973

Dec. 31,
1973

Mar. 31,
1974

June 30,
1974

Sept. 30,
1974

Dec. 31,
1974

Mar. 31,
1975

133.8
85.6
48.2
11.7
8.4
3.3
28.6
15.7
12.9

135.0
85.0
50.0
11.5
8.2
3.3
28.4
15.5
12.9

136.7
85.0
51.7
11.1
7.8
3.3
28.2
15.3
12.9

137.8
84.9
52.9
11.0
7.6
3.4
27.9
15.1
12.8

138.6
84.1
54.5
10.7
7.4
3.3
27.8
15.0
12.8

140.3
84.1
56.2
10.4
r7.2
3.2
27.5
14.8
12.7

142.0
84.3
57.7
10.5
7.2
3.3
27.6
14.8
12.8

30.1
13.7
9.3
4.5
50.0

}

29.7
13.6
9.2
4.4
52.1

}

N o t e . —VA-guaranteed residential mortgage debt is for 1- to 4-family
properties while FHA-insured includes some debt in multifamily structures.

29.8
13.3
9.0
4.3
54.3

}

29.7
13.1
8.8
4.3
56.1

1

29.8
12.9
8.7
4.2
57.4

}

29.8
12.7
8.6
4.2
59.9

}

29.8
12.5
8.4
4.1
61.6

Detail by type of holder partly estimated by Federal Reserve for first
and third quarters, and for most recent quarter.

COMMITMENTS OF LIFE INSURANCE COMPANIES FOR INCOME PROPERTY MORTGAGES

Number
of loans

Total
amount
committed
(millions of
(dollars)

1,664
2,132
2,140
1,166

1974—Jan..
Feb..
Mar.
Apr..
May.
June.
July.
Aug.
Sept.
O ct.,
Nov.
Dec.
1975—Jan.,
Feb.
Mar.

Period

197
197
197
197

1
2
3
4

Loan
amount
(thousands
of dollars)

Contract
interest
rate
(per cent)

Maturity
(yrs./mos.)

Loanto-value
ratio
(per cent)

Capitaliza­
tion rate
(per cent)

Debt
coverage
ratio

Per cent
constant

3.982.5
4.986.5
4,833.3
2,603.0

2,393
2,339
2,259
2,232

9.07
8.57
8.76
9.47

22/10
23/3
23/3
21/3

74.9
75.2
74.3
74.3

10.0
9.6
9.5
10.1

1.29
1.29
1.29
1.29

10.4
9.8
10.0
10.6

61
90
117
141
148
147
121
105
95
57
47
37

91.5
209.4
238.8
306.7
352.4
287.5
234.6
312.4
241.6
108.3
79.7
140.0

1,501
2,327
2,041
2,175
2.381
1,956
1,939
2,975
2,543
1,899
1,695
3,784

9.07
9.10
8.99
9.02
9.31
9.35
9.60
9.80
10.04
10.29
10.37
10.28

20/11
23/1
21/11
21/9
21/11
20/10
20/0
22/10
20/11
19/7
18/4
19/10

73.7
73.6
74.2
73.8
74.2
75.7
74.1
74.3
74.4
74.6
74.0
74.8

9.7
9.8
9.6
9.9
10.0
10.1
10.1
10.2
10.3
10.6
10.7
11.0

1.24
1.33
1.31
1.33
1.30
1.24
1.26
1.31
1.29
1.25
1.26
1.33

10.4
10.2
10.1
10.2
10.4
10.7
10.8
10.7
11.1
11.5
11.6
11.3

31
46
46

43.8
94.6
109.6

1,414
2,057
2.382

10.44
10.08
10.37

18/4
22/11
23/1

71.9
74.3
74.1

11.0
10.9
11.3

1.33
1.34
1.34

11.9
11.0
11.3

See N ote on preceding page.




Averages

AUGUST 1975 □ CONSUMER CREDIT

A 45

TOTAL CREDIT
(In millions of dollars)
Instalment
End of period

Total

Auto­
mobile
paper

Total

Noninstalment

Other
consumer
goods
paper

Home
improve­
ment
loans1

Personal
loans

Total

Single­
payment
loans

Charge accounts
Retail
outlets

Credit
cards2

Service
credit

1965.
1966.
1967.
1968.
1969.

89,883
96,239
100,783
110,770
121,146

70,893
76,245
79,428
87,745
97,105

28,437
30,010
29,796
32,948
35,527

18,483
20,732
22,389
24,626
28,313

3,736
3,841
4,008
4,239
4,613

20,237
21,662
23,235
25,932
28,652

18,990
19,994
21,355
23,025
24,041

7,671
7,972
8,558
9,532
9,747

5,724
5,812
6,041
5,966
5,936

706
874
1,029
1,227
1,437

4,889
5,336
5,727
6,300
6,921

1970..
1971..
1972..
1973..
1974

127,163
138,394
157,564
180,486
190,121

102,064
111,295
127,332
147,437
156,124

35,184
38,664
44,129
51,130
51,689

31,465
34,353
40,080
47,530
52,009

5,070
5,413
6,201
7,352
8,162

30,345
32,865
36,922
41,425
44,264

25,099
27,099
30,232
33,049
33,997

9,675
10,585
12,256
13,241
12,979

6,163
6,397
7,055
7,783
8,012

1,805
1,953
1,947
2,046
2,122

7,456
8,164
8,974
9,979
10,884

1974—June.........
July..........
Aug..........
Sept..........
Nov..........
Dec..........

183,425
184,805
187,369
187,906
188,023
188,084
190,121

150.615
152,142
154,472
155,139
155,328
155,166
156,124

51,641
52,082
52,772
52,848
52,736
52,325
51,689

48,099
48,592
49,322
49,664
49,986
50,401
52,009

7,930
8,068
8,214
8,252
8,287
8,260
8,162

42,945
43,400
44,164
44,375
44,319
44,180
44,264

32,810
32,663
32,897
32,767
32,695
32,918
33,997

13,311
13,192
13,202
13,131
13,003
12,950
12,979

7,002
6,936
6,983
6,876
7,027
7,174
8,012

2,104
2,204
2,282
2,277
2,156
2,144
2,122

10,393
10,331
10,430
10,483
10,509
10,650
10,884

1975--Jan...........
Feb...........
Mar..........
Apr..........
May.........
June.........

187,080
185,381
184,253
184,344
185,010
186,099

153,952
152,712
151,477
151,271
151,610
152,668

50,947
50,884
50,452
50,360
50,465
50,927

51,142
50,136
49,391
49,247
49,329
49,519

8,048
7,966
7,925
7,880
7,908
7,973

43,815
43,726
43,709
43,784
43,908
44,249

33,128
32,669
32,776
33,073
33,400
33,431

12,675
12,560
12,542
12,526
12,443
12,470

7,162
6,468
6,452
6,735
7,268
7,361

2,153
2,074
2,033
2,062
2,073
2,088

11,138
11,567
11,749
11,750
11,616
11,512

1 Holdings of financial institutions; holdings of retail outlets are in­
cluded in “Other consumer goods paper.”
2 Service station and miscellaneous credit-card accounts and homeheating-oil accounts.

N o t e . —Consumer credit estimates cover loans to individuals for
household, family, and other personal expenditures, except real estate
mortgage loans. For back figures and description of the data, see “Con­
sumer Credit,” Section 16 (New) of Supplement to Banking and Monetary
Statistics, 1965, and B u l l e t i n s for Dec. 1968 and Oct. 1972.

CONSUMER CREDIT HELD BY COMMERCIAL BANKS
(In millions of dollars)
Instalment

End of period

Total

Automobile paper
Total

Purchased

Direct

Nonin­
stalment

Other consumer goods paper
Mobile
homes
V------------

Other

Home
improve­
ment
loans

4,166
4,681
5,469
1,307
2,639

5,387
6,082

2,571
2,647
2,731
2,858
2,996

798
1,081

Credit
cards

Personal loans
Check
credit

Other

Single­
payment
loans

8,160
8,699

6,690
6,946
7,478
8,374
8,553

1965.....................
1966.....................
1967.....................
1968.....................
1969.....................

35,652
38,265
40,630
46,310
50,974

28,962
31,319
33,152
37,936
42,421

10,209
11,024
10,972
12,324
13,133

5,659
5,956
6,232
7,102
7,791

1970.....................
1971.....................
1972.....................
1973.....................
1974.....................

53,867
60,556
70,640
81,248
84,010

45,398
51,240
59,783
69,495
72,510

12,918
13,837
16,320
19,038
18,582

7,888
9,277
10,776
12,218
11,787

4,423
5,786
7,223
7,645

3,792
4,419
5,288
6,649
8,242

7,113
4,501
5,122
6,054
6,414

3,071
3,236
3,544
3,982
4,458

1,336
1,497
1,789
2,144
2,424

9,280
10,050
11,158
12,187
12,958

8,469
9,316
10,857
11,753
11,500

1974—June.........
July..........
Aug..........
Sept..........
Oct...........
Nov..........
Dec..........

83,417
84,078
84,982
85,096
84,887
84,360
84,010

71,615
72,384
73,302
73,455
73,372
72,896
72,510

19,220
19,377
19,511
19,389
19,246
18,981
18,582

12,169
12,250
12,344
12,314
12,195
12,031
11,787

7,564
7,623
7,681
7,706
7,709
7,700
7,645

7,076
7,222
7,491
7,638
7,749
7,846
8,242

6,420
6,484
6,541
6,527
6,530
6,469
6,414

4,224
4,316
4,409
4,445
4,480
4,490
4,458

2,230
2,266
2,312
2,348
2,376
2,362
2,424

12,712
12,846
13,013
13,088
13,087
13,017
12,958

11,802
11,694
11,680
11,641
11,515
11,464
11,500

1975—Jan...........
Feb...........
Mar..........
Apr..........
May.........
June.........

82,986
82,229
81,201
81,155
81,066
81,429

71,776
71,151
70,183
70,134
70,130
70,475

18,230
18,104
17,754
17,613
17,529
17,560

11,581
11,497
11,377
11,387
11,417
11,482

7,587
7,522
7,459
7,417
7,391
7,375

8,325
8,149
7,890
7,909
7,903
7,977

6,323
6,272
6,272
6,312
6,373
6,446

4,399
4,359
4,318
4,318
4,353
4,403

2,448
2,447
2,403
2,411
2,383
2,375

12,883
12,801
12,710
12,767
12,781
12,857

11,210
11,078
11,018
11,021
10,936
10,954

See N ote to table above.




6,357
7,011
7,748

A 46

CONSUMER CREDIT □ AUGUST 1975
INSTALMENT CREDIT HELD BY NONBANK LENDERS
(In millions of dollars)
Finance companies

End of period

Total

Other consumer
goods paper

Auto­
mobile
paper

Mobile
homes

1965.......................
1966.......................
1967.......................
1968.......................
1969.......................

23,851
24,796
24,576
26,074
27,846

9,218
9,342
8,627
9,003
9,412

1970.......................
1971.......................
1972.......................
1973.......................
1974.......................

27,678
28,883
32,088
37,243
38,925

9,044
9,577
10,174
11,927
12,435

2,464

1974—June............
July.............
Aug.............
Sept.............
Oct..............
Nov.............
Dec.............

38,159
38,479
38,943
38,921
38,901
38,803
38,925

1975—Jan..............
Feb..............
Mar.............
Apr.............
M ay............
June............

38,340
38,194
37,910
37,746
37,711
37,828

i

Other financial lenders

Home
improve­
ment
loans

Other

4,343
4,925
5,069
5,424
5,: 775

Per­
sonal
loans

Total

Credit
unions

Retail outlets

Mis­
cellaneous
lenders i

Total

Auto­
mobile
dealers

Other
retail
outlets

232
214
192
166
174

10,058
10,315

10,688

11,481
12,485

8,289
9,315
10,216
11,717
13,722

7,324
8,255
9,003
10,300
12,028

965
1,060
1,213
1,417
1,694

9,791
10,815
11,484
12,018
13,116

315
277
287
281
250

9,476
10,538
11,197
11,737

2,561
2,916
3,378
3,570

3,237
3,052
3,589
4,434
4,751

199
247
497
917
993

12,734
13,446
14,912
16,587
17,176

15,088
17,021
19,511
22,567
25,216

12,986
14,770
16,913
19,609
22,116

2,102
2,251
2,598
2,958
3,100

13,900
14,151
15,950
18,132
19,473

218
226
261
299
286

13,682
13,925
15,689
17,833
19,187

11,957
12,040
12,267
12,345
12,458
12,462
12,435

3,449
3,505
3,539
3,573
3,597
3.603
3,570

4,626
4,664
4,680
4,662
4,658
4,611
4,751

1,114
1,118
1,097
1,073
1,054

993

17,013
17,152
17,360
17,268
17,134
17,106
17,176

23,630
23,968
24,677
25,085
25,204
25,195
25,216

20,501
20,825
21,402
21,792
21,893
21,975
22,116

3,129
3,143
3,275
3,293
3,311
3,220
3,100

17,211
17,311
17,550
17,678
17,851
18,272
19,473

296
297
299
298
296
292
286

16,915
17.014
17,251
17,380
17,555
17,980
19,187

12,315
12,406
12,371
12,349
12,406
12,571

3,559
3,539
3,519
3,513
3,507
3,508

4,642
4,580
4,427
4,366
4,315
4,288

967
923
903
867
833
807

16,857
16,746
16,690
16,651
16,650
16,654

25,032
25,213
25,506
25,623
25,917
26,478

21,966
22,089
22,227
22,415
22,674
23,186

3,066
3,124
3,279
3,208
3,243
3,292

18,804
18,154
17,878
17,768
17,852
17,887

282
280
276
275
275
276

18,522
17,874
17,602
17,493
17,577
17,611

1,021

Savings and loan associations and mutual savings banks.

See also

N o te

12,866

to table at top of preceding page.

FINANCE RATES ON SELECTED TYPES OF INSTALMENT CREDIT
(Per cent per annum)
Commercial banks
New
automo­
biles
(36 mos.)

Mobile
homes
(84 mos.)

Other
consumer
goods
(24 mos.)

1973—June..........
July...........
Aug...........
Sept...........
Oct............
Nov...........
Dec............

10.08

10.57
10.84
10.95
11.06
10.98
11.19
11.07

12.57
12.51

1974—Jan.............
Feb............
Mar...........
Apr............

11.09
11.25
10.92
11.07
10.96

12.78
12.82
12.82
12.81

June..........
July...........
Aug...........
Sept...........
Oct............
Nov...........
Dec............

10.55
10.53
10.50
10.51
10.63
10.81
10.96
11.15
11.31
11.53
11.57
11.62

1975—Jan.............
Feb............
Mar...........
Apr............
M ay..........
June..........

11.61
11.51
11 .46
11.44
11.39
11.26

Month

10.10
10.25
10.44
10.53
10.49
10.49

11.21

11.46
11.71
11.72
11.94
11.87
11.71

11.66
11.66

12.14
11.78
11.57

12.02

Finance companies

(12 mos.)

Personal
loans

Creditcard
plans

12.78
12.75
12.84
12.96
13.02
12.94
13.12

New

Used

17.24
17.21
17.22
17.23
17.23
17.23
17.24

11.94

12.13
12.28
12.34
12.40
12.42

16.61
16.75
16.86
16.98
17.11
17.21
17.31

13.01
13.14
13.10
13.20
13.28
13.16
13.27

12.96
13.02
13.04
13.00
13.10
13.20
13.42
13.45
13.41
13.60
13.47
13.60

17.25
17.24
17.23
17.25
17.25
17.23
17.20
17.21
17.15
17.17
17.16
17.21

12.39
12.33
12.29
12.28
12.36
12.50
12.58
12.67
12.84
12.97
13.06
13.10

16.56
16.62
16.69
16.76
16.86
17.06
17.18
17.32
17.61
17.78
17.88
17.89

13.28
13.20
13.07
13.22
13.11
13.10

13.60
13.44
13.40
13.55
13.41
13.40

17.12
17.24
17.15
17.17
17.21
17.10

13.08
13.07
13.07
13.07
13.09
13.12

17.27
17.39
17.52
17.58
17.65
17.67

12.66

12.67
12.80
12.75

12.86

12.88

N o t e . —Rates are reported on an annual percentage rate basis as
specified in Regulation Z (Truth in Lending) of the Board of Governors.
Commercial bank rates are “ most common” rates for direct loans with




Automobiles

12.02

Mobile
homes

Other
consumer
goods

Personal
loans

12.77

18.93

20.55

12.90

i8.69

20.52

13.12

18.77

20.65

13.24

18.90

20.68

13.15

18.69

20.57

13.07

18.90

20.57

13.21

19.24

20.78

13.42

19.30

20.93

13.60

19.49

21.16

13.60

19.80

21.09

13.59

20.00

r20.86

13.57

19.63

20.75

specified maturities; finance company rates are weighted averages for
purchased contracts (except personal loans). For back figures and description of the data, see B u l l e t i n for Sept. 1973.

AUGUST 1975 □ CONSUMER CREDIT

A 47

INSTALMENT CREDIT EXTENDED AND REPAID
(In millions of dollars)
Type
Period

Total

Automobile
paper

Other
consumer
goods paper

Holder

Home
improve­
ment loans

Personal
loans

Commercial
banks

Finance
companies

Other
financial
lenders

Retail
outlets

Extensions
196 7
196 8
196 9

87,171
99,984
109,146

26,320
31,083
32,553

29,504
33,507
38,332

2,369
2,534
2,831

28,978
32,860
35,430

31,382
37,395
40,955

26,461
30,261
32,753

11,238
13,206
15,198

18,090
19,122
20,240

197
197
197
197
197

112,158
124,281
142,951
165,083
166,478

29,794
34,873
40,194
46,453
42,756

43,873
47,821
55,599
66,859
71,077

2,963
3,244
4,006
4,728
4,650

35,528
38,343
43,152
47,043
47,995

42,960
51,237
59,339
69,726
69,554

31,952
32,935
38,464
43,221
41,809

15,720
17,966
20,607
23,414
24,510

21,526
22,143
24,541
28,722
30,605

D e c .. . .

14,387
14,635
14,394
14,089
13,626
12,609
12,702

3,731
3,812
3,887
3,835
3,369
3,062
3,205

6,043
6,164
5,993
5,935
5,948
5,700
5,798

425
416
388
302
348
321
294

4,188
4,243
4 126
4 017
3 961
3 526
3; 405

6,076
6,129
6,034
6,050
5,600
5,390
5,012

3,729
3,6§5
3,476
3,408
3,229
2,823
3,240

2,040
2,201
2,290
2,079
160
863
901

2,542
2,620
2,594
2,552
2,637
2,533
2,549

1975—Jan .. ..
F eb ....
M ar.. .
A p r....
M ay...
June...

12,859
13,465
12,797
13,181
13,149
13,959

3,348
3,856
3,419
3,454
3,467
3,752

5,430
5,561
5,535
5,584
5,757
5,976

289
302
339
313
334
373

3,792
3,746
3,504
3,830
3,591
3,858

5,368
5,649
5,357
5,457
5,473
5,772

3,068
3,195
2,872
3,145
2,985
3,316

2,048
2,104
2,044
2,142
2,032
2,141

2,375
2,517
2,524
2,437
2,659
2,730

0
1
2
3
4

1974—June...
July. ..
A ug. . .
Sept.. .
O ct.. ..
N ov__

Repayments
83,988
91,667
99,786

26,534
27,931
29,974

27,847
31,270
34,645

2,202
2,303
2,457

27,405
30,163
32,710

29,549
32,611
36,470

26,681
28,763
30,981

10,337
11,705
13,193

17,421
18,588
19,142

107,199
115,050
126,914
144,978
157,791

30,137
31,393
34,729
39,452
42,197

40,721
44,933
49,872
59,409
66,598

2,506
2,901
3,218
3,577
3,840

33,835
35,823
39,095
42,540
45,156

40,398
45,395
50,796
60,014
66,539

31,705
31,730
35,259
38,066
40,127

14,354
16,033
18,117
20,358
21,861

20,742
21,892
22,742
26,540
29,264

1974—June
July .
Aug.
Sept.
O ct..
Nov.
Dec.,

13,301
13,310
12,882
13,412
13,224
13,009
13,516

3,577
3,563
3,443
3,604
3,470
3,423
3,668

5,615
5,610
5,444
5,700
5,499
5,561
6,037

335
320
309
279
321
325
341

3,774
3,817
3,686
3,829
3,934
3,700
3,470

5,564
5,541
5,463
5,808
5,542
5,671
5,803

3,405
3,513
3,166
3,371
3,250
2,981
3,308

1,835
1,819
1,851
1,723
1,962
1 ,860
1,822

2,497
2,437
2,402
2,510
2,470
2,497
2,583

1975—Jan..
Feb..
Mar.
Apr..
May.
June.

13,260
13,228
13,234
13,423
13,274
13,537

3,534
3,605
3,772
3,719
3,625
3,728

5,549
5,632
5,708
5,632
5,694
5,799

336
350
357
369
349
358

3,841
3,641
3,397
3,703
3,606
3,652

5,669
5,747
5,924
5,769
5,737
5,774

3,331
3,134
2,971
3,263
3,169
3,307

1,827
1,824
1 ,782
1,947
1,894
1,806

2,433
2,523
2,557
2,444
2,474
2,650

196 7
196 8
196 9
197
197
197
197
197

0
1
2
3
4

Net change
1967...........................
1968...........................
1969...........................

3,183
8,317
9,360

-2 1 4
3,152
2,579

1,657
2,237
3,687

167
231
374

1,573
2,697
2,720

1,833
4,784
4,485

-2 2 0
1,498
1,772

901
1,501
2,005

669
534
1,098

1970...........................
1971...........................
1972...........................
1973...........................
1974...........................

4,959
9,231
16,037
20,105
8,687

-343
3,480
5,465
7,001
559

3,152
2,888
5,727
7,450
4,479

457
343
788
1,151
810

1,693
2,520
4,057
4,503
2,839

2,977
5,842
8,543
9,712
3,015

-1 6 8
1,205
3,205
5,155
1,682

1,366
1,933
2,490
3,056
2,649

784
251
1,799
2,182
1,341

1974—June...............
July................
Aug................
Sept................
Oct.................
Nov................
Dec.................

1,086
1,325
1,512
677
402
-4 0 0
-8 1 4

154
249
444
231
-101
-361
-4 6 3

428
554
549
235
449
139
-239

90
96
79
23
27
-4
-4 7

414
426
440
188
27
-174
-6 5

512
588
571
242
58
-281
-791

324
172
310
37
-21
-158
-6 8

205
382
439
356
198
3
79

45
183
192
42
167
36
-3 4

1975—Jan.................
Feb.................
Mar................
Apr.................
May...............
June...............

-401
237
-437
-2 42
-125
422

-1 8 6
251
-353
-265
-158
24

-119
-7 1
-173
-4 8
63
177

-4 7
-4 8
-1 8
-5 6
-1 5
15

-4 9
105
107
127
-1 5
206

-301
-9 8
-567
-312
-264
-2

-263
61
-9 9
-118
-184
9

221
280
262
195
138
335

-5 8
-6
-3 3
-7
185
80

N o t e . — Monthly estimates are seasonally adjusted and include adjust­
ments for differences in trading days. Annual totals are based on data
not seasonally adjusted.
Estimates are based on accounting records and often include finance
charges. Renewals and refinancing of loans, purchases and sales of in­




stalment paper, and certain other transactions may increase the amount
of extensions and repayments without affecting the amount outstanding.
For back figures and description of the data, see “Consumer Credit,”
Section 16 (New) of Supplement to Banking and Monetary Statistics , 1965
and B u l l e t i n s for Dec. 1968 and Oct. 1972.

A 48

INDUSTRIAL PRODUCTION: S.A. □ AUGUST 1975
MARKET GROUPINGS
(1967 = 100)

Grouping

Total index.....................................
Products, total...................................
Final products .................................
Consumer goods.........................
Equipment..................................
Intermediate products....................
Materials............................................

1967
pro­
por­
tion

1974
aver­
age

1974
July

Aug.

Sept.

1975

Oct.

Nov.

Dec.

Jan.

Feb.

Mar.

Apr . r May

June*

July*

100.0 124.8 125.5 125.2 125.6 124.8 121.7 117.4 113.7 111.2 110.0 109.9 109.8 110.3 110.8
62.21 123.1 124.0 123.5 123.6 122.9 121.4 118.7 115.4 113.7 112.4
48.95 121.7 122.8 122.1 122.6 122.3 120.9 118.2 114.9 U 3 .3 ,i 112.2
28.53 128.8 130.0 129.8 128.8 128.2 126.3 123.4 120.1 118.8 118.2
20.42 111 .7 113.0 111.4 113.8 114.0 113.2 110.7 107.8 105.3 103.9
13.26 128.3 127.8 128.6 127.6 125.3 123.0 120.5 117.6 115.21 112.7
37.79 127.4 128.0 128.5 129.3 128.1 122.1 114.8 110.5 107.4 105.9

112.9 113.0! 113.5 113.9

112.6 113.2 113.

114.3

107.8 110.2 112

115.5

119.6
103.0
113.4
105.2

120.6
102.8
112.4
104.6

122.0
102.4
112.4
105.1

123.4
101.6
112.6
105.6

Consumer goods
Durable consumer goods ....................

Automotive products.....................
Autos...........................................
Auto parts and allied goods.. . .

Home goods............................... %. ..
Appliances, TV, and radios..........
Appliances and A /C ..............
TV and home audio...............
Carpeting and furniture................
Misc. home goods.........................
Nondurable consumer goods ..............

Clothing..........................................
Consumer staples...........................
Consumer foods and tobacco...
Nonfood staples.........................
Consumer chemical products.
Consumer paper products... .
Consumer fuel and lighting. .
Residential utilities.............

7.86 127.9 131.6 131.8 129.1

126.5 119.7 110.1

104.0 101.0 103.1

2.84 110.0 113.5 114.9 111.6 114.7 102.1 87.5 80.3 78.2 86.8 93.6 97.6 102.9 105.8
1.87 94.9 101.5 103.1 99.6 108.4 91.0 69.8 62.6 58.9 73.1 82.4 86.3 93.2 97.7
.97 139.0 136.9 137.6 134.5 126.9 123.6 121.5 114.4 115.5 113.2 115.2 119.3 121.6 121.1
5.02
1.41
.92
.49
1.08
2.53

138.0 141.8 141.2 139.0 133.2 129.7 123.0 117.5 114.0 112.3 115.9 117.4 118.4 121.1
132.0 139.3 139.1 133.2 120.9 115.3 102.5 94.4 89.0 85.0 96.7 101.1 104.6
148.8 151.7 156.2 150.2 139.5 131.9 119.8 108.0 104.8 99.1 114.2 118.4 118.3
153.5 155.3 157.1 155.4 151.8 144. 143.8 135.1 132.3 127.9 127.8 128.2 129.1
134.7 137.3 135.8 135.3 132.2 131.4 125.5 123.0 120.1 121.0 121.4 121.7 121.9 123.5

20.67 129.2 129.4 129.1 128.7 128.9 128.

128.4 126.3 125.5 124.1 124.0 124.5 125.5 126.4

4.32 109.0 108.6 106.4 106.0 104.5 103.1 102.0 95.0 94.5 90.9 89.2
16.34 134.5 134.9 135.1 134.8 135.4 135.6 135.5 134.5 133.6 132.7 133.3
8.37 125.4 125.5 124.4 124.4 125.2 126.2 125.3 123.3 123.2 120.7 122.7
7.98 144.0 144.7 146.5 145.7 146.1 145.3 146.2 146.4 144.5 145.3 144.3
2.64 158.4 154.6 159.0 157.7 159. 155.2 159.1 160.6 157.1 158.2 157.6
1.91 125.2 124.4 129.5 130.9 128.5 127.4 126.7 122.0 121.9 120.9 118.4
3.43 143.8 148.4 146.2 144.6 145.4 147.9 147.3 149.2 147.2 149.0 148.6
2.25 153.7 157.8 155.4 156.2 155.5 159.3 159.0 159.9 159.7 163.1 161.9

92.0
133.1 133.5 133.6
122.0 121.6 121.7
144.8
157.6
122.8
147.3
160.9

145.9 146.1
158.0
123.1
149.0

Equipment
Business equipment.....................

Industrial equipment..............
Building and mining equip..
Manufacturing equipment..
Power equipment................
Commercial, transit, farm equip.. .
Commercial equipment..........
Transit equipment..................
Farm equipment.....................

Defense and space equipment..............

Military products.............................

12.74 129.4 131.3 128

6.77
1.45
3.85
1.47

128.7
136.0
121.7
139.9

130.3
136.2
124.9
138.4

129.6
136.5
123.1
139.6

5.97
3.30
2.00
.67

130.3
141.1
109.6
138.7

132.5
143.5
111.4
141.4

7.68

82.3

8 2.6

5.15

81.2

81.4

132.3 132.0 131.0 127.1

122.3

119.3 117.0 115.4 115.0 114.4 112.7

132.0
139.8
124.4
144.2

130.9
141.2
122.5
142.8

129.3
140.1
119.4
144.5

126.7
137.4
116.5
142.6

127.6
134.0
109.3
150.5

132.8
143.3
111.8
144.1

133.2
144.1
111.2
145

132.9
143.1
109.8
151

127.6 121.6 118.0 115.1 114.2 114.7 115.0 113.4
139.3 135.2 130.4 127.8 123.2 121.5 121.2 119.1
102.9 91.8 91 .5 88.8 92.2 98.6 101.0 100.3
143.7 143.8 135.9 130.2 135.7 129.0 126.2

8 2.7

83.1

84.1

83.7

81.5

82.3

82.5

81.8

83.4

81.3

122.9
138.4
111.
136.6

83.

81.5

120.4
137.0
109.4
132.1

82.4

80.7

118.8
137.7
106.6
131.8

82.1

80.3

116.4
132.3
105.6
128.9

82.4

80.7

115.3
131.7
105.0
126.2

82.5

81.6

113.9
127.8
103.5
127.0

82.3

81 .0

112.1
125.6
101.9
125.3

83.3

82.3

Intermediate products
Construction products..........
Misc. intermediate products.

5.93 129.6 128.2 128.0 127.4 123.5 121.3 118.3 115.7 112.1 109.1 110.1 107.6 106.8 106.8
7.34 127.3 127.5 129.2 127.8 126.8 124.2 122.5 119.2 118.4 115.6 116.1 116.3 116.9

Materials
127.3 125.

128.1 129.2 129.3 123.5 114.2 110.3 107.0 104.7 101.6

Durable goods materials.. . .

20.91

Nondurable goods materials ...........

13.99 128.5 131.1 130.4 129.3 126.8 122.1

Consumer durable parts.
Equipment parts.............
Durable materials n ec...

Textile, paper, and chem. m at..
Nondurable materials n.e.c.......
Fuel and power, industrial............

99.6

99.0

98.4

84.7 86.0 87.1 89.4 92.0
4.75 112.1 117.2 117.5 117.2 115.2 104.1 91.7 83.7 82.1
5.41 123.8 120.6 125.8 125.0 124.0 122.2 118.3 116.9 112.0 108.7 104.6 102.1 97.8 95.8
10.75 135.9 132.3 133.9 136.6 138.3 132.7 122.9 118.8 115.4 111.4 106.9 103.8 104.0 102.4
116.2 109.2 105.7 105.3 107.9 109

111.7 113.9

106.2 110.4 112.4 116.2 118.9
8.58 139.8 143.6 143.2 142.2 138.1 131.1 122.9 112.9 108
5.41 110.6 111.3 110.0 108.9 108.9 107.8 105.7 103.3 101.1 103.9 104.0 104.2 105.0 105.8
2.89 122.6 128.0 123.5 129.0 126.4 112.7 113.0 117.8 118.2 118.0 117.5 119.5 119.0 120.7

Supplementary groups
Home goods and clothing.
Containers..........................

9.34 124.6 126.4 125.0 123.8 120.0 117.4 113.2 107.1 105.0 102.3 103.6 105.6 107.7 111.0
1.82 139.4 142.1 140.4 136.7 131.5 127.6 120.3 126.1 119.9 122.3 124.2 123.5 126.8

Gross value of products
in market structure
(In billions of 1963 dollars)
Products, total.................

Final products............
Consumer goods
Equipment...............
Intermediate products.
For Note see opposite page.




286.3

221.4
156.3
65.3
64.9

448.1 446.9 447.1 445.7 439.0 426.7 416.4 410.1 405.1 409.6 407.0 412.1

346.6
235.0
111.6
101.2

345.0
235.1
109.9
102.1

412.7

346.1 346.5 341.3 331.0 322.3 317.7 315.3 319.0 318.0 323.0 323.2
233.1 233.7 228.9 222.3 216.4 213.7 213.2 217.6 216.7 221.3 223.0
112.8 112.7 112.4 108.8 105.9 103.9 102.2 101.4 101.4 101.6 100.3
101.0 99.4 97.4 95.8 94.3 92.3 90.0 90.5 89.4 89.3 89.8

A 49

AUGUST 1975 □ INDUSTRIAL PRODUCTION: S.A.
INDUSTRY GROUPINGS
(1967 = 100)

Grouping

1967
pro­
por­
tion

1974
aver­
age

1975

1974
July

Aug.

Sept.

Oct.

Nov.

Dec.

Jan.

Feb.

Mar.

A pr.r

May

June® July®

88.55 124.4 125.2 125.2 125.5 124.6 120.9 116.1 111.7 109.2 107.7 107.9 107.8 108.5 108.9

102.6
116.9
126.1
106.1
151.5

102.2
118.6
126.5
106.9
151.0

98.9

98.1

103.5
113.7
128.
108.9
154.0

103.3
114.8
128.1
108.5
153.1

102.4
115.9
127.0
107.0
152.3

Primary and fabricated metals ............

12.55 127.5 126.9 126.5 127.2 127.6 124.4 116.0 112.4 107.7 105.1

103.2

99

Machinery and allied goods .................

32.44 116.3 117.3 117.8 118.8 118.4 114.9 109.6 105.4 102.4 101.5 101.9 101.6 102.2 101.5

Durable............................................ 52.33 120.7 121.6 121.6 122.1
Nondurable...................................... 36.22 129.7 130.8 130.4 130.5
Mining and utilities............................. 11.45 127.3 128.9 127.4 128.7
Mining..............................................
6.37 109.3 110.2 107.3 109.2
5.08 149.9 152.4 152.6 153.1

121.6
128.9
128.5
110.5
151.2

117.9
125.4
125.9
105.0
152.3

112.2
121.9
125.7
104.4
152.6

108.2
117.0
127.0
107.0
153.0

104
115.6
127.3
108.6
150.9

Durable manufactures
Primary metals.................................
Iron and steel, subtotal................
Fabricated metal products..............

6.61 124.1 123.2 121.9 123.0 126.0 121.0 108.6 107.2 102.1 98.1 95.0 89.8 87.7 87.2
4.23 119.9 119.9 120.7 119.1 123.9 117.7 107.9 110.6 105.0 103.1 99.4 90.1 87.0 86.8
5.94 131.4 131.1 131.5 132.0 129.6 128.2 124.1 118.2 113
112.9 112.4 110.9 111.1 110.4

Machinery......................................... 17.39 128.1 129.9 130.5 132.5 131.1 128.9
Nonelectrical machinery.............. 9.17 133.8 131.1 136.4 137.8 137.4 135.1
8.22 125.2 128.4 123.7 126.4 124.0 121.7
Electrical machinery....................
Transportation equipment.............. 9.29 96.9 98.7 99.9 100.4 102.1 93.7
4.56 113.2 117.3 117.8 118.6 123.0 107.1
M otor vehicles and parts............
Aerospace and misc. trans. e q ... 4.73 81.1 80.9 82.6 82.8 81.9 80.9
Instruments....................................... 2.07 143.9 146.7 146.7 144.9 142.0 142.3
Ordnance, private and Govt...........
3.69 86.1 87.2 87.1 87.5 87.2 86.6
Lumber and products.....................
Clay, glass, and stone products.. . .

Furniture and miscellaneous.................

Furniture and fixtures.....................
Miscellaneous manufactures...........

124.8
132.5
116.3
83.6
86.4
80.9
139.5
86.6

119.6
126.7
111.5
78.9
78.2
79.5
139.1
86.2

115.6
123.6
106.6
77.1
77.6
76.6
134.2
86.9

112.2
119.3
104.3
81.0
85.4
76.7
130.6
86.7

110.
116.9
104.0
84.7
93.1
76.6
131.1
86.7

109.0
113.7
103.
87.6
95.0
80.4
129.7
86.1

108.2
111 .9
103.9
90.9
101
81
130.7
86.3

107.2
110.2
104.0
90.4
100.9'
80.2
130.7
86.6

4 .44 123.6 125.5 123.4 120.6 117.8 113.7 111.0 109.6 104.6 102.6 104.8 105.6 106.2 106.6

1.65 120.1 121.6 121.5 116.6 109.3 105.2 101.3 99.9 99.6 99.8 104.1 108.0 108.2
2.79 125.7 127.7 124.6 123.0 122.9 118.8 116.9 115.3 107.8 104.2 105.4 104.2 105.1

2 .90 136.1 139.7 140.1

138.8 136.7 129.0 128.4 120.0 119.6 118.7 117.6 119.7 120.2 120.7

1.38 126.9 131.6 130.5 129.4 125.5 120.5 120.4 110.6 110.6 106.7 105.6 109.6 109.6
1.52 144.4 147.1 148.8 147.5 146.9 136.9 135.7 128.9 128.0 129.7 128.5 129.0 129.7

Nondurable manufactures
Textile mill products.......................
Apparel products.............................
Leather and products......................
Paper and printing ...............................

6.90 108.9 108.1 107.4 106.5 105.1

101.9

96.3

2.69 122.7 125.3 124.3 121.9 119.1 112.8 102.9
3.33 105.4 102.7 102.5 102.5 102.8 100.1 98.0
.88 77.3 75.7 73.4 74.2 70.6 74.7 69.7

88.9

95.6
94.0
66.1

89.6

93.3
92.6
66.7

87.5
96.8

86.4
63.5

90.4

92.6

93.7

100.4 103.7 106.2
88.2 89.6
68.0 69.8 72.4

7.92 121.0 122.4 121.0 122.7 120.8 115.7 112.3 108.2 106.6 104.2 102.4 103.9 105.2 106.4

Paper and products.........................
Printing and publishing...................

3.18 134.0 136.1 132.2 135.3 133.9 124.3 116.1 114.3 109.5 104.5 105.8 105.8 108.2
4.74 112.3 113.4 113.4 114.4 111.9 110.0 109.8 104.1 104.7 104.0 100.2 102.6 103.2 i 03! 0

Chemicals, petroleum , and rubber . . . .

11.92 151.7 153.9 154.4 154.7 152.4 146.5 141.6 136.5 132.4 130.2 131.0 132.5 134.2 136.5

Chemicals and products..................
Petroleum products.........................
Rubber and plastics products.........

Foods and tobacco ................................

Foods................................................
Tobacco products.............................

7.86 154.3 155.8 156.7 158.3 155.9 148.3 143.1 139.0 134.6 133.6 132.8 135.6 136.7 138.5
1.80 124.0 127.9 125.8 121.9 125.4 127.0 125.8 126.8 123.7 120.1 120.2 118.7 121.9 123.5
2.26 164.4 167.2 169.0 168.6 161.8 155.7 148.9 135.4 132.0 126.8 133.5 132.7 135.0
9.48

124.8 124.8 124.8 124.3 123.7 123.8 123.5 120.0 121.3 120.0 122.4 122.0 121.7 122.7

8.81 126.2 126.6 126.3 125.7 124.8 125.4 125.7 121.2 122.3 121.3 122.9 123.4 123.2 124.2
.67 106.4 101.5 104.2 106.0 110.3 103.8 96.2 104.7 108.4 102.6 115.9 103.8

Mining
Metal, stone, and earth minerals.........

Metal mining...................................
Stone and earth minerals................

Coal, oil, and ga s .................................

Coal..................................................

1.26 117.2 113.5 109.9 115.4 121.3 120.7 117.9 119.1

116.2 113.4 113.3 106.2 101.1

.51 129.2 120.3 110.0 130.5 141.4 136.8 134.7 133.8 131 .1 125.4 125.8 114.8 110.2
.76 109.1 108.8 109.9 105.0 107.5 109.8 106.4 109.0 106.1 105.1 104.7 100.4 95.0

5.11

107.3 109.4 106.7 107.7 107.8 101.2 101.1

103.9

105.8

106.8 107.7 107.4 107.2 107.4 107.1

.69 105.1 115.6 99.4 112.1 110.3 67.6 85.3 111 .3 117.5 117.4 112.2 119.1 120.5 120.7
4.42 107.7 108.4 107.9 107.1 107.4 106.4 103.6 102.9 105.0 106.1 106.6 105.3 105.4 104.9

Utilities
Gas................. .....................................

3.90 159.5 162.7 162.8 162.4 161.2 162.9 163.0 162.5 161.1
1.17 117.9

N o t e . — Data for the complete year of 1972 are available in a pamphlet
Industrial Production Indexes 1972 from Publications Services, Division
of Administrative Services, Board of Governors of the Federal Reserve
System, Washington, D.C. 20551.




165.4 164.1

163.0

Published groupings include series and subtotals not shown separately. Figures for individual series and subtotals are published in the
monthly Business Indexes release.

A 50

BUSINESS ACTIVITY; CONSTRUCTION a AUGUST 1975
SELECTED BUSINESS INDEXES
(1967= 100, except as noted)
Industrial production
Market

Period

Total
Total

Final
Inter­
Con­ Equip­ mediate
Total sumer ment
goods

Mate­
rials

Ca­
In­
Nonagdustry pacity
utiliza­ Conricultion
struc- tural
in mfg. tion
em­
(1967
con­
ploy­
Manu­ output tracts ment—
factur­ = 100)
Total i
ing

Manu­
facturing2

Prices4

Em­
ploy­
ment

Pay­
rolls

Total
retail
sales3

Con­
sumer

Whole­
sale
com­
modity

1955..
1956..
1957..
1958..
1959..

58.5
61.1
61.9
57.9
64.8

56.6
59.7
61.1
58.6
64.4

54.9
58.2
59.9
57.1
62.7

59.5
61.7
63.2
62.6
68.7

48.9
53.7
55.9
50.0
54.9

62.6
65.3
65.3
63.9
70.5

61.5
63.1
63.1
56.8
65.5

58.2
60.5
61.2
56.9
64.1

90.0
88.2
84.5
75.1
81.4

76.9
79.6
80.3
78.0
81.0

92.9
93.9
92.2
83.9
88.1

61.1
64.6
65.4
60.3
67.8

59
61
64
64
69

80.2
81.4
84.3
86.6
87.3

87.8
90.7
93.3
94.6
94.8

1960..
1961..
1962..
1963..
1964..

66.2
66.7
72.2
76.5
81.7

66.2
66.9
72.1
76.2
81.2

64.8
65.3
70.8
74.9
79.6

71.3
72.8
77.7
82.0
86.8

56.4
55.6
61.9
65.6
70.1

71.0
72.4
76.9
81.1
87.3

66.4
66.4
72.4
77.0
82.6

65.4
65.6
71.4
75.8
81.2

80.1
77.6
81.4
83.0
85.5

86.1
89.4

82.4
82.1
84.4
86.1
88.6

88.0
84.5
87.3
87.8
89.3

68.8
68.0
73.3
76.0
80.1

70
70
75
79
83

88.7
89.6
90.6
91.7
92.9

94.9
94.5
94.8
94.5
94.7

1965..
1966..
1967..
1968..
1969..

89.2 88.1 86.8 93.0 78.7 93.0
97.9 96.8 96.1 98.6 93.0 99.2
100.0 100.0 100.0 100.0 100.0 100.0
105.7 105.
106.6 104.7 105.7
105.
110.7 109.7 109.0 111.1 106.1 112.0

91.0
99.8
100.0
105.7
112.4

89.1
98.3
100.0
105.7
110.5

89.0 93.2
91.9 94.8
87.9 100.0
87.7 113.2
86.5 123.7

92.3
97.1
100.0
103.2
106.9

93.9
99.9
100.0
101.4
103.2

88.1
97.8
100.0
108.3
116.6

91
97
100
109
114

94.5
97.2
100.0
104.2
109.8

96.6
99.8
100.0
102.5
106.5

1970..
1971.
1972.
1973.
1974.

106.6
106.8
115.2
125.
124.

106.0
106.4
113.
123.4
123.1

104.5
104.7
111.9
121
121.7

110.3 96.3 111.7
115.7 89.4 112.6
123.6 95.5 121.1
131.7 106.7 131.1
128.8 111.7 128.3

107.7
107.4
117.4
129.3
127.4

105.2
105.2
114.0
125.2
124.4

78.3
75.0
78.6
83.0
78.9

123.1
145.4
165.3
181.3
168.6

107.7
108.1
111.9
116.7
118.9

98.1
94.2
97.6
103.1
102.1

114.1
116.7
131.5
148.9
156.6

120
122
142

116.3
121.2
125.3
133.1
147.7

110.4
113.9
119.8
134.7
160.1

1974—June..
July..
Aug..,
Sept..
Oct...
N ov..
Dec..,

125.8
125.5
125.2
125.6
124.
121.7
117.3

124.0
124.0
123.5
123
122.9
121 .4
118.7

122.6
122.8
122.1
122.6
122.3
120.9
118

130.2
130.0
129.8
128.8
128
126.3
123.4

112.0
113.0
111.4
113.8
114.0
113.2
110.7

128.9
127.8
128.6
127.6
125.3
123.0
120.5

128.8
128.0
128.5
129.3
128.1
122.1
114.8

580.1 166.0
125.6
125.2 ]
177.0
125.2 \ 79.4 170.0
125.5 j
187.0
124.6 |
148.0
75.7 154.0
120.9
116.1 J
176.0

119.1
119.2
119.4
119.7
119.8
119.1
118.0

103.2
103.0
102.6
102.5
101.7
99.4
96.3

157.9
159.5
161.5
162.0
162.1
157.0
152.6

170
177
180
176
175
170
171

146.9
148.0
149.9
151.7
153.0
154.3
155.4

155.7
161.7
167.4
167.2
170.2
171.9
171.5

1975—Jan ...
Feb...
M ar..
Apr. .
M ay.,
June.,
July.,

113.7
111 .2
110.0
109.9
109.8
110.3
110.8

115
113.7
112
112.9
113.0
113.5
113.9

114.9
113.3
112.2
112.6
113.2
113.8
114.3

120.1
118.8
118.2
119.6
120.6
122.0
123.4

107
105.3
103.9
103.0
102.8
102.4
101.6

117.6
115.2
112.7
113.4
112.4
112.4
112.6

110.5
107.4
105.9
105.2
104.6
105.1
105.6

111 .7
135.0
109.2 \ r68.2 135.0
107.7 j
153.0
107.9 j
189.0
107.8 >
182.0
I C
Dyfl
O. J^ 174.0
108.5
108.9

117.3
116.5
116.0
115.9
116.1
115.8
115.9

93.6
90.8
89.9
89.6
89.9
89.8
89.6

148.9
143.0
142.8
144.1
144.1
145.6
147.8

176
179
176
179
183
185

156.1
157.2
157.8
158.6
159.3
160.6

171.8
171 .3
170.4
172.1
173.2
173.7
175.7

1 Employees only: excludes personnel in the Armed Forces.
2 Production workers only. Revised back to 1968.
3 F.R. index based on Census Bureau figures.
4 Prices are not seasonally adjusted. Latest figure is final.
5 Figure is for second quarter 1974.
N o t e . — All series: Data are seasonally adjusted unless otherwise noted.
Capacity utilization: Based on data from Federal Reserve, McGrawHill Economics Department, and Dept, of Commerce.

Construction contracts; McGraw-Hill Informations Systems Company
F.W. Dodge Division, monthly index of dollar value of total construction
contracts, including residential, nonresidential, and heavy engineering.
Employment and payrolls: Based on Bureau of Labor Statistics data;
includes data for Alaska and Hawaii beginning with 1959.
Prices: Bureau of Labor Statistics data.

CONSTRUCTION CONTRACTS AND PRIVATE HOUSING PERMITS
(In millions of dollars, except as noted)

Type of ownership and
type of construction

1973

1974

1974
Juner

July

Aug.

Sept.

1975
Oct.

Nov.

Dec.

Jan.

Feb.

Mar.

Apr.

May

June

Total construction contracts 1........

99,304 93,076 8,220 9,295 8,416 8,359 7,227 6,179 7,304 5,100 4,955 6,574 9,598 9,143 9,324

By type of ownership:
Public........................................
Private 1....................................

26,563 32,209 2,943 3,242 3,311 3,273 2,720 2,391 2,496 2,254 2,031 2,182 2,768 2,875 3,891
72,741 60,867 5,278 6,053 5,105 5,689 4,508 3,788 4,809 2,846 2,924 4,393 6,830 6,268 5,432

By type of construction:
Residential building 1..............
Nonresidential building...........
Nonbuilding.............................

45,696 34,174 3,419 3,350 3,060 2,503 2,457 1,931 1,715 1,562 1,583 2,316 3,029 3,073 3,116
31,534 33,859 2,880 3,698 3,246 3,320 2,710 2,618 2,451 2,233 2,199 2,402 2,987 2,877 3,169
22,074 25,042 1,921 2,247 2,110 2,536 2,061 1,630 3,139 1,305 1,172 1,856 3,582 3,193 3,040

Private housing units authorizedr. . 1,820
(In thousands, S.A., A.R.)

1,074 1,115 1,040

928

1 Because of improved procedures for collecting data for 1-family homes,
some totals are not strictly comparable with those prior to 1968. To im­
prove comparability, earlier levels may be raised by approximately 3 per
cent for total and private construction, in each case, and by 8 per cent for
residential building.




853

811

770

837

689

701

677

837

r912

926

N o t e . —Dollar value of construction contracts as reported by the
McGraw-Hill Informations Systems Company, F.W. Dodge Division.
Totals of monthly data may differ from annual totals because adjustments
are made in accumulated monthly data after original figures have been
published.
Private housing units authorized are Census Bureau series for 14,000
reporting areas with local building permit systems.

AUGUST 1975 □ CONSTRUCTION

A 51

VALUE OF NEW CONSTRUCTION ACTIVITY
(In millions of dollars)
Private

Public 2

Nonresidential
Period

Total
Total

Buildings

Resi­
dential

Total

Total

Indus­
trial

Com­
mercial

Other
build-

Other

Mili­
tary

High­
way

Conser­
vation
and
develop­
ment

Other

51,995
51,967
59,021
65.404

25,715
25,568
30,565
33,200

26,280
26,399
28,456
32,204

6,679
6,131
6,021
6,783

6,879
6,982
7,761
9,401

5,037
4,993
4.382
4,971

7,685
8,293
10,292
11,049

24,007
25,536
27,605
27,964

727
695
808
879

8,405
8,591
9,321
9,250

2,194
2,124
1,973
1,783

12,681
14,126
15,503
16,052

94,167 66,071
109,950 80,079
124,077 93,893
135,456 102,894
134,814 96,388

31,864
43,267
54,288
57,623
55,020

34,207
36,812
39,605
45,271
41,368

6,538
5,423
4.676
6,243
7,745

9,754
11,619
13,462
15,453
16,029

5,125
5,437
5,898
5,888
5,951

12,790
14,333
15,569
17,687
11,643

28,096
29,871
30,184
32,562
38,426

718
901
1,087
1,170
1,188

9,981
10,658
10,429
10,559
12,105

1,908
2,095
2,172
2,313
2,781

15,489
16,217
16,496
18,520
22,352

D ec.. .

136,889
137,879
134,425
133,028
133,882
130,991
133,102

98.404
97,924
96,225
94,728
95,016
93,390
91,206

48,269
48,875
48,208
46,005
44,132
42,205
40,466

50,135
49,049
48,017
48,723
50,884
51,185
50,740

8,027
7,158
7,616
7.677
8,294
8,670
8,774

16,425
15,953
15.053
15,668
16,300
16,037
15,372

6,034
5,915
5,691
5,776
5,799
5,854
5,781

19,649
20,023
19,657
19,602
20,491
20,624
20,813

38,485
39,955
38,200
38,300
38,866
37,601
41,896

1,169
1,131
978
1,173
1,062
1,053
1,144

11,475
12,518
11,968
13,334
12,566
10,842
12,210

3,310
2,581
2,568
2,886
3,070
2,871
3,446

22,531
23,725
22,686
20,907
22,168
22,835
25,096

1975—Jan ...
Feb...
M ar..
Apr r. .
M ay..
June p .

131,559
128,909
124,352
122,686
120,239
121,232

89,774
88,614
85,040
83,382
83,084
84,213

38,922
38,153
37,257
36,694
37,402
38,802

50,852
50,461
47,783
46,688
45,682
45,411

8,525
8,734
7,981
7,375
8,044
8,166

15.053
15,249
13,289
12,677
12,405
11,787

5,779
5,844
5.382
5,682
5,276
5,328

21,495
20,634
21,131
20,954
19,957
20,130

41,785
40,295
39,312
39,304
37,155
37,019

1,305
1,440
1,520
1,435
1,241
1,138

12,718

2,974

24,788

76,002
77,503
86,626
93,728

1966
1967
1968
1969
197
197
197
197
197

0
1
2
3
4

1974—June..
July...
Aug.. .
Sept..
Oct__
N o v ..

N o t e . —Census Bureau data; monthly series at seasonally adjusted
annual rates.

1 Includes religious, educational, hospital, institutional, and other build­
ings.
2 By type of ownership, State and local accounted for 86 per cent
of public construction expenditures in 1974.

PRIVATE HOUSING ACTIVITY
(In thousands of units)
Under construction
(end of period)

Completions

Starts

New 1-family homes sold
and for sale 1
Units

Period
Total

1family

2-ormore
famiiy

Total

1family

2-ormore
family

Total

1family

2-ormore
family

Mobile
home
ship­
ments

Median prices
(in thousands
of dollars) of
units

Sold

For
sale
(end of
per­
iod)

461
487
490
448

Sold

For
sale

196
190
218
228

21.4
22.7
24.7
25.6

22.8
23.6
24.6
27.0

196
196
196
196

6
7
8
9

1,165
1,292
1,508
1,467

779
844
899
811

386
448
608
656

1.320
1,399

859
807

461
591

885

350

536

217
240
318
413

197
197
197
197
197

0
1
2
3
4

1,434
2,052
2,357
2,045
1,337

813
1,151
1,309
1,132

621
901
1,047
913
450

1,418
1,706
1,971
2,014
1,692

802
1,014
1,143
1,174
931

617
692
828
840
760

922
1.254
1,586
1,599
1,193

381
505
640
583
518

541
749
947
1,016
676

401
497
576
567
371

485
656
718
620
501

227
294
416
456
407

23.4
25.2
27.6
32.5
35.9

26.2
25.9
28.3
32.9
36.2

D ec...

1,533
1,314
1.156
1.157
1,106
1,017
880

1,000
920
826
845
792
802
682

534
394
329
313
314
215
198

1,805
1,655
1,592
1,562
1,627
1,657
1,606

1,053
934
919
899
908
893
852

752
721
674
663
719
763
754

1,480
1,443
1,406
1,372
1,322
1.255
1,229

581
578
570
565
553
541
545

899
864
836
807
769
714
684

398
340
316
252
217
195
195

524
509
466
495
433
435
382

436
430
425
414
409
404
400

35.1
36.8
35.7
36.2
37.2
37.3
37.4

35.0
35.3
35.5
35.7
35.9
36.0
36.2

1975—Jan.. .
Feb...
M ar...
Apr.r.
M ay..
June p

999
1,000
985
980
1,129
1,070

739
733
775
762
886
862

260
267
210
218
243
208

1,535
1.320
1,305
1,191
1,220

964
770
734
744
785

571
550
571
447
435

1,176
1,156
1,113
1,085
1,069

522
522
520
515
520

654
634
593
570
549

185
219
199
194
224

404
411
463
574
585

404
409
396
388
382

37.2
37.9
38.9
39.2
39.9

36.4
36.6
36.5
36.7
36.9

1974—June..
Ju ly ..
Aug...
Sept. .
Oct.. .
N o v ..

1 Merchant builders only.
N o t e . — All

series except prices, seasonally adjusted. Annual rates for
starts, completions, mobile home shipments, and sales. Census data except




for mobile homes, which are private, domestic shipments as reported by
the Mobile Home Manufacturers* Assn. and seasonally adjusted by
Census Bureau. Data for units under construction seasonally adjusted by
Federal Reserve.

A 52

EMPLOYMENT □ AUGUST 1975
LABOR FORCE, EMPLOYMENT, AND UNEMPLOYMENT
(In thousands of persons, except as noted)
Civilian labor force (S.A.)
Total noninstitutional
population
(N.S.A.)

Period

Not in
labor force
(N.S.A.)

Total
labor
force
(S.A.)

Unem­
ployed

Unemploy­
ment
rate2
(per cent;
S.A.)

Employed1
Total
Total

In nonagricultural
industries

In
agriculture

1969...........................
1970...........................
1971...........................
1972...........................
1973...........................
1974...........................

137,841
140,182
142,596
145,775
148,263
150,827

53,602
54,280
55,666
56,785
57,222
57,587

84,240
85,903
86,929
88,991
91,040
93,240

80,734
82,715
84,113
86,542
88,714
91,011

77,902
78,627
79,120
81,702
84,409
85,936

74,296
75,165
75,732
78,230
80,957
82,443

3,606
3,462
3,387
3,472
3,452
3,492

2,832
4,088
4,993
4,840
4,304
5,076

3.5
4.9
5.9
5.6
4.9
5.6

1974—July................
Aug................
Sept................
Oct.................
Nov................
Dec.................

150,922
151,135
151,367
151,593
151,812
152,020

55,426
56,456
57,706
57,489
57,991
58,482

93,503
93,419
93,922
94,058
93,921
94,015

91,283
91,199
91,705
91,844
91,708
91,803

86,403
86,274
86,402
86,304
85,689
85,202

82,970
82,823
82,913
82,864
82,314
81,863

3,433
3,451
3,489
3,440
3,375
3,339

4,880
4,925
5,303
5,540
6,019
6,601

5.3
5.4
5.8
6.0
6.6
7.2

1975—Jan.................
Feb.................
Mar................
Apr.................
May...............
June...............
July................

152,230
152,445
152,646
152,840
153,051
153,278
153,585

58,888
59,333
59,053
59,276
59,101
57,087
56,540

94,284
93,709
94,027
94,457
95,121
94,518
95,102

92,091
91,511
91,829
92,262
92,940
92,340
92,916

84,562
84,027
83,849
84,086
84,402
84,444
85,078

81,179
80,701
80,584
80,848
80,890
81,140
81,628

3,383
3,326
3,265
3,238
3,512
3,304
3,450

7,529
7,484
7,980
8,176
8,538
7,896
7,838

8.2
8.2
8.7
8.9
9.2
8.6
8.4

1 Includes self-employed, unpaid family, and domestic service workers.
2 Per cent of civilian labor force.
of Labor Statistics. Information relating to persons 16
years of age and over is obtained on a sample basis. Monthly data relate
N o t e . — Bureau

to the calendar week that contains the 12th day; annual data are averages
of monthly figures. Description of changes in series beginning 1967 is
available from Bureau of Labor Statistics.

EMPLOYMENT IN NONAGRICULTURAL ESTABLISHMENTS, BY INDUSTRY DIVISION
(In thousands of persons)
Contract
construc­
tion

Period

Total

Manufac­
turing

1971..........................................................

70,442
70,920
71,216
73,711
76,833
78,334

20,167
19,349
18,572
19,090
20,054
20,016

619
623
603
622
638
672

3,525
3,536
3,639
3,831
4,028
3,985

1974—July..............................................
Aug...............................................
Sept..............................................
Oct................................................
Nov...............................................

78,479
78,661
78,844
78,865
78,404
77,690

20,169
20,112
20,112
19,982
19,633
19,146

675
676
682
692
693
662

1975—Jan................................................
Feb...............................................
Mar...............................................
Apr...............................................
May..............................................
JuneP............................................
JulyP............................................

77,227
76,708
76,368
76,349
76,428
76,264
76,352

18,718
18,297
18,146
18,090
18,118
18,071
18,032

78,322
78,561
79,097
79,429
79,125
78,441
76,185
75,753
75,755
76,134
76,641
77,086
76,143

1973.........................................................
1974.........................................................

Transporta­
tion and
public
utilities

Trade

Finance

Service

Govern­
ment

4,435
4,504
4,457
4,517
4,646
4,699

14,704
15,040
15,352
15,975
16,665
17,011

3,562
3,687
3,802
3,943
4,075
4,173

11,228
11,621
11,903
12,392
12,986
13,506

12,202
12,561
12,887
13,340
13,742
14,285

3,920
3,965
3,939
3,911
3,861
3,798

4,693
4,701
4,679
4,699
4,697
4,668

17,107
17,140
17,166
17,160
17,048
16,912

4,157
4,168
4,176
4,185
4,183
4,182

13,516
13,573
13,647
13,705
13,721
13,734

14,242
14,326
14,443
14,531
14,568
14,588

700
702
706
703
710
707
710

3,789
3,596
3,486
3,475
3,472
3,404
3,360

4,607
4,561
4,512
4,511
4,495
4,474
4,470

16,863
16,832
16,799
16,794
16,820
16,854
16,919

4,173
4,164
4,157
4,163
4,161
4,154
4,161

13,747
13,771
13,754
13,754
13,759
13,712
13,779

14,630
14,785
14,808
14,859
14,893
14,888
14,921

20,066
20,288
20,350
20,142
19,763
19,175

688
690
688
693
693
657

4,187
4,286
4,191
4,150
3,981
3,722

4,740
4,734
4,721
4,718
4,702
4,663

17,064
17,058
17,153
17,225
17,342
17,591

4,219
4,222
4,180
4,172
4,309
4,161

13,665
13,668
13,647
13,719
13,707
13,665

13,693
13,615
14,167
14,610
14,771
14,807

18,538
18,132
18,005
17,967
18,038
18,212
17,948

689
3,372
4,552
687
4,497
3,229
691
3,218
4,476
697
3,333
4,479
711
4,495
3,465
JuneP............................................
723
3,571
4,532
723
4,515
3,589

16,687
16,475
16,509
16,664
16,791
16,930
16,877

4,131
4,127
4,132
4,146
4,161
4,200
4,223

13,513
13,606
13,658
13,768
13,869
13,904
13,931

14,703
15,000
15,066
15,080
15,111
15,014
14,337

Mining

seasonally adjusted

NOT SEASONALLY ADJUSTED
1974—July..............................................
Aug...............................................
Oct................................................
Nov...............................................
Dec...............................................
1975—Jan................................................
Feb...............................................
Mar..............................................
Apr...............................................
May..............................................
Julyp............................................

N o t e . — Bureau of Labor Statistics; data include all full- and parttime employees who worked during, or received pay for, the pay period
that includes the 12th of the month. Proprietors, self-employed persons,




domestic servants, unpaid family workers, and members of Armed
Forces are excluded.
Beginning with 1968, series has been adjusted to Mar. 1973 bench­
mark.

AUGUST 1975 □ PRICES

A 53

CONSUMER PRICES
(1967 = 100)
Housing
All
items

Food

51.3
38.8
44.1
53.9
88.7
94.5

48.3
30.6
38.4
50.7
88.0
94.4

53.7
59.1
90.2
94.9

1966.......................... 97.2
1967.......................... 100.0
1968.......................... 104.2
1969.......................... 109.8

99.1
100.0
103.6
108.9

1970.........................
K 7 1 .........................
1972.........................
1973.........................
1974.........................

116.3
121.3
125.3
133.1
147.7

1974—June..............
July...............
Aug...............

Health and recreation

Homeownership

Fuel
oil
and
coal

Gas
and
elec­
tricity

86.3
92.7

40.5
48.0
89.2
94.6

81.4
79.6
98.6
99.4

97.2
100.0
104.2
110.8

98.2 96.3
100.0 100.0
102.4 105.7
105.7 116.0

97.0
100.0
103.1
105.6

114.9
118.4
123.5
141.4
161.7

118.9
124.3
129.2
135.0
150.6

110.1
115.2
119.2
124.3
130.2

128.5
133.7
140.1
146.7
163.2

Oct................
Nov...............
Dec...............

146.9
148.0
149.9
151.7
153.0
154.3
155.4

160.3
160.5
162.8
165.0
166.1
167.8
169.7

149.2
150.9
152.8
154.9
156.7
158.3
159.9

129.8
130.3
130.9
131.4
132.2
132.8
133.5

1975—Jan................
Feb................
Mar...............
Apr...............
M ay..............
June..............

156.1
157.2
157.8
158.6
159.3
160.6

170.9
171.6
171.3
171.2
171.8
174.4

161 .2
162.7
163.6
164.7
165.3
166.4

134.0
135.1
135.5
135.9
136.4
136.9

Period

1929..........................
1933........ ................
1941..........................
1945..........................
1960..........................
1965..........................

Total

Rent

76.0
54.1
57.2
58.8
91.7
96.9

Fur­ Apparel Trans­
and
nish­
porta­
ings upkeep tion
and
opera­
tion

Total

Med­
ical
care

Per­
sonal
care

Read­ Other
ing
goods
and
and
recrea­ serv­
tion
ices

93.8
95.3

48.5
36.9
44.8
61.5
89.6
93.7

44.2
47.8
89.6
95.9

85.1
93.4

37.0
42.1
79.1
89.5

41.2
55.1
90.1
95.2

47.7
62.4
87.3
95.9

49.2
56.9
87.8'
94.2

99.6
100.0
100.9
102.8

97.0
100.0
104.4
109.0

96.1
100.0
105.4
111.5

97.2
100.0
103.2
107.2

96.1
100.0
105.0
110.3

93.4
100.0
106.1
113.4

97.1
100.0
104.2
109.3

97.5
100.0
104.7
108.7

97.2
100.0
104.6
109.1

110.1
117.5
118.5
136.0
214.6

107.3
114.7
120.5
126.4
145.8

113.4
118.1
121.0
124.9
140.5

116.1
119.8
122.3
126.8
136.2

112.7
118.6
119.9
123.8
137.7

116.2
122.2
126.1
130.2
140.3

120.6
128.4
132.5
137.7
150.5

113.2
116.8
119.8
125.2
137.3

113.4
119.3
122.8
125.9
133.8

116.0
120.9
125.5
129.0
137.2

161.2
163.2
165.4
167.9
170.1
171.7
174.0

214.2
218.5
220.9
222.7
225.5
229.2
228.8

144.5
146.2
148.5
150.2
151.5
154.0
156.7

139.2
141.4
143.9
146.6
149.0
151.0
152.3

135.7
135.3
138.1
139.9
141.1
142.4
141.9

138.8
140.6
141.3
142.2
142.9
143.4
143.5

139.4
141.0
142.6
144.0
145.2
146.3
147.5

149.4
151.4
153.7
155.2
156.3
157.5
159.0

136.5
137.8
139.3
141.2
143.0
144.2
145.3

133.5
134.6
135.2
137.0
137.8
138.8
139.8

135.8
137.7
139.4
140.4
141.4
142.7
143.9

175.6
177.3
178.2
179.4
180.1
181.4

228.9
229.5
228.3
229.0
230.2
230.6

160.2
162.7
164.0
166.3
167.3
169.4

153.2
154.7
155.6
156.8
157.4
158.1

139.4
140.2
140.9
141 .3
141.8
141.4

143.2
143.5
144.8
146.2
147.4
149.8

148.9
150.2
151.1
152.1
152.6
153.2

161.0
163.0
164.6
165.8
166.8
168.1

146.5
147.8
148.9
149.5
149.9
150.3

141.0
141.8
142.0
143.5
143.8
144.1

144.8
145.9
146.5
146.8
147.1
147.3

N o t e . —Bureau of Labor Statistics index for city wage-earners and
clerical workers.

WHOLESALE PRICES: SUMMARY
(1967 = 100, except as noted)
Industrial commodities

Period

I960.............................
1965.............................

Pro­
All Farm cessed
com­ prod­
foods
modi­ ucts
and
ties
feeds Total

94.9
96.6

97.2
98.7

89.5
95.5

95.3
96.4

Ma­
Non­ Trans­
Tex­ Hides, Fuel, Chem­ Rub­ Lum­ Paper, Met­ chin­
me­ porta­ Mis­
ery Furni­
ture,
tiles,
icals,
ber,
ber,
als,
tallic tion cella­
and
etc.
etc.
etc.
etc.
etc.
etc.
etc. equip­
etc.
etc.
min­ equip­ neous
erals ment1
ment
99.5
99.8

90.8
94.3

96.1 101.8 103.1
95.5 99.0 95.9

95.3
95.9

98.1
96.2

92.4
96.4

92.0
93.9

99.0
96.9

97.2
97.5

93.0
95.9

1966............................. 99.8 105.9 101.2 98.5 100.1 103.4 97.8 99.4 97.8 100.2 98.8 98.8 96.8 98.0 98.4
97.7
1967............................. 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
100.0
1968............................. 102.5 102.5 102.2 102.5 103.7 103.2 98.9 99.8 103.4 113.3 101.1 102.6 103.2 102.8 103.7
102.2
1969............................. 106.5 109.1 107.3 106.0 106.0 108.9 100.9 99.9 105.3 125.3 104.0 108.5 106.5 104.9 107.7 100.8 105.2
110.4
113.9
119.1
134.7
160.1

111.0
112.9
125.0
176.3
187.7

112.0
114.3
120.8
148.1
170.9

110.0
114.0
117.9
125.9
153.8

107.2
108.6
113.6
123.8
139.1

110.1
114.0
131.3
143.1
145.1

105.9
114.2
118.6
134.3
208.3

102.2
104.2
104.2
110.0
146.8

108.6
109.2
109.3
112.4
136.2

113.7
127.0
144.3
177.2
183.6

108.2
110.1
113.4
122.1
151.7

116.7
119.0
123.5
132.8
171.9

111.4
115.5
117.9
121.7
139.4

107.5
109.9
111.4
115.2
127.9

113.3
122.4
126.1
130.2
153.2

104.5
110.3
113.8
115.1
125.5

109.9
112.8
114.6
119.7
133.1

161.7
167.4
167.2
170.2
171.9
Dec................... 171.5

180.8
189.2
182.7
187.5
187.8
183.7

167.6
179.7
176.8
183.5
189.7
188.2

157.8
161.6
162.9
164.8
165.8
166.1

142.1
142.3
142.1
140.5
139.8
138.4

146.6
146.2
148.1
145.2
144.5
143.2

221.7
226.0
225.0
228.5
227.4
229.0

148.4
158.5
161.7
168.5
172.9
174.0

139.5
143.4
145.6
147.5
148.5
149.4

188.6
183.7
180.4
169.4
165.8
165.4

153.3
162.9
164.2
166.0
166.9
167.2

180.3
185.6
187.1
186.9
186.7
184.6

140.3
144.3
146.8
150.0
152.7
154.0

128.2
129.8
132.8
135.5
136.9
137.7

156.4
157.6
159.8
162.2
163.4
164.3

125.1
126.7
127.7
134.2
135.1
137.0

135.2
135.4
136.3
137.1
140.7
142.4

171.8
171.3
170.4
172.1
173.2
173.7
175.7

179.7
174.6
171.1
177.7
184.5
186.2
193.7

186.4
182.6
177.3
179.4
179.0
179.7
184.6

167.5
168.4
168.9
169.7
170.3
170.7
171.2

137.5
136.5
134.3
134.4
135.2
135.9
136.8

142.1
141.7
143.2
147.5
147.7
148.7
149.3

232.2
232.3
233.0
236.5
238.8
243.0
246.6

176.0
178.1
181.8
182.4
182.1
181.2
181.4

149.6
150.0
149.7
149.4
148.9
148.6
150.1

164.7
169.3
169.6
174.9
183.0
181.0
179.6

169.8
169.8
170.0
169.7
169.8
169.8
170.0

185.5
186.3
186.1
185.7
185.1
184.5
183.4

156.6
157.7
158.8
159.7
160.4
161.0
161.7

138.8
139.1
138.5
138.5
138.6
139.0
139.2

168.5
170.3
170.8
173.0
173.1
173.3
174.7

137.1
138.2
139.5
139.9
139.9
140.1
140.1

145.5
146.4
146.8
147.3
147.5
147.5
147.7

1970.............................
1971.............................
1972.............................
1973.............................
1974.............................
1974—July...................
Aug...................
Sept...................
Oct....................

1975—Jan....................
Feb...................
Mar..................
Apr...................
M ay.................
June.................
July..................
1 Dec. 1968=100.




A 54

NATIONAL PRODUCT AND INCOME □ AUGUST 1975
GROSS NATIONAL PRODUCT
(In billions of dollars)

Item

1929

1933

1941

1950

1970

1971

1972

1973

1974

1974
II

Gross national product..................................... 103.1

101.4

Services.........................................................

77.2
9.2
37.7
30.3

Gross private domestic investment...................

16.2

1.4

17.9

14.5
10.6

3 .0
2.4

13.4
9.5
2.9

1.1
7.0
5.9

Government purchases of goods and services..
Federal..........................................................
National defense......................................
Other.........................................................
State and local......................................

8.5

I

II

57.2 120.1 278.0 972.6 1,048.6 1,149.5 1,279.6 1,883.2 1,370.8 1,407.6 1,413.1 1,435.8 1,467.1

45.8
3.5
22.3
20.1

5.0
.9
5.6
1.5
4.0
.6
3.8
.5
1.7 - 1 .6
1.8 - 1 .4

Net exports of goods and services...................
Exports.........................................................
Imports.........................................................

IV

55.6 124.5 284.8 977.1 1,054.9 1,158.0 1,294.9 1,397.4 1,383.8 1,416.3 1,430.9 1,416.6 1,433.4

Final purchases.................................................

Structures..............................................
Producers’ durable equipment.............
Residential structures...............................
Nonfarm................................................

III

1975

80.6 191.0 617.6 667.1
9.6 30.5 91.3 103.9
42.9 98.1 263.8 278.4
28.1 62.4 262.6 284.8

6.6
3.9
3.7
4.5
4.0

.4
2.4
2.0

1.3
5.9
4.6

8.0

24.8

1.3

2 .0

16.9

7.2

6.0

13.8
3.1
7.9

729.0
118.4
299.7
310.9

805.2
130.3
338.0
336.9

876.7
127.5
380.2
369.0

869.1
129.5
375.8
363.8

901.3
136.1
389.0
376.2

895.8
120.7
391.7
383.5

913.2
124.9
398.8
389.5

938.1
130.0
408.5
399.6

54.1 136.3 153.7 179.3 209.4 209.4 211.8 205.8 209.4 163.1 147.3

47.3 131.7 147.4 170.8 194.0 195.2 198.3 197.1 191.6 182.2 181.0
27.9 100.6 104.6 116.8 136.8 149.2 149.4 150.9 151.2 146.9 144.6
9 .2
36.1 37.9 41.1 47.0 52.0 52.2 51.0 53.7 52.8 50.2

18.7
19.4
18.6
6.8
6.0

64.4
31.2
30.7
4.5
4.3

66.6
42.8
42.3
6.3
4.9

1.8
13.8
12.0

3.6
62.9
59.3

- . 2 - 6 .0
2.1 - 1 .5 - 3 .1
3.9
8.8
9.2
1.9
65.4 72.4 100.4 140.2 138.5 143.6 147.5 142.2 130.9
65.6 78.4 96.4 138.1 140.0 146.7 145.7 133.4 121.7

75.7
54.0
53.4
8.5
7.8

89.8
57.2
56.7
15.4
11.4

97.1
46.0
45.2
14.2
11.9

97.2
48.8
48.0
13.5
10.4

99.9
46.2
45.4
8.7
6.6

97.5 94.2 94.4
40.4 35.3 36.4
39.7 34.8 35.7
17.8 - 1 9 .2 - 3 3 .7
17.5 -1 7 .8 - 3 3 .4

37.9 219.5 234.2 255.7 276.4 309.2 304.4 312.3 323.8 331.6 338.8
18.4

96.2

97.6 104.9 106.6 116.9 114.3 117.2 124.5 126.5 128.6

14.1 74.6 71.2 74.8 74.4 78.7 76.6 78.4 84.0 84.7 85.4
4.3 21.6 26.5 30.1 32'. 2 38.2 37 7 38.8 40^6 41.8 43.2
19.5 123.3 136.6 150.8 169.8 192.3 190.1 195.1 199! 3 205.1 210’. 2

Gross national product in constant (1958)
dollars............................................................ 203.6 141.5 263.7 355.3 722.5 746.3 792.5 839.2 821.2 827.1 823.1 804.0 780.0 779.4
N o t e . —Dept, of Commerce estimates. Quarterly data are seasonally
adjusted totals at annual rates. For back data and explanation of series,

see the Survey o f Current Business (generally the July issue) and the
Aug. 1966 Supplement to the Survey.

NATIONAL INCOME
(In billions of dollars)

Item

1929

1933

1941

1950

1970

1971

1972

1973

1974

1974
II

III

1975
IV

I

1\ p

National income................................................

86.8

40.3 104.2 241.1 800.5 857.7 946.5 1,065.6 J.142.5 1,130.2 1,155.5 1,165.4 1,150.7

Compensation of employees.............................

51.1

29.5

64.8 154.6 603.9 643.1 707.1 786.0 855.8 848.3 868.2 877.7 875.6 885.5

Wages and salaries .......................................

50.4

29.0

62.1

146.8 542.0 573.6 626.8 691.6 750.7 744.6

761.5 769.2 765.1

773.1

Private.......................................................
Military.....................................................
Government civilian.................................

45.5
.3
4.6

Supplements to wages and salaries...............

.7

.5

2 .7

7.8

61.9

69.5

80.3

94.4 105.1

.1
.6

.1
.4

2.0
.7

4.0
3.8

29.7

32.2

33.1
36.4

38.6
41.7

48.4
46.0

53.6
51.4

53.2
50.5

54.5
52.3

54.6
54.0

55.3

55.2

55.7

Proprietors’ income..........................................
Business and professional...........................
Farm .............................................................

15.1
9.0
6.2

5.9
3.3
2.6

17.5
11.1
6.4

37.5
24.0
13.5

66.9
50.0
16.9

69.2
52.0
17.2

75.9
54.9
21.0

96.1
57.6
38.5

93.0
61.2
31.8

89.9
60.7
29.1

92.1
62.3
29.8

91.6
62.5
29.1

84.9
62.7
22.2

86.0
63.3
22.7

Rental income of persons.................................

5.4

2.0

3.5

9.4

23.9

25.2

25.9

26.1

26.5

26.3

26.6

26.8

27.0

27.1

10.5 - 1 .2

15.2

37.7

69.2

78.7

92.2 105.1 105.6 105.6 105.8 103.4

94.3

10.0

17.7

42.6

17.8

74.0

34.8

83.6

10.1

24.9

39.3

46.1

99.2 122.7 140.7 139.0 157.0 131.5 101.2
41.5 49.8 55.7 55.9 62.7 52.0 39*0
57.7
72.9 85.0 83' 1 94 3 79' 5 62.3

Employer contributions for social in­
surance ..................................................
Other labor income..................................

Corporate profits and inventory valuation
adjustment.....................................................
Profits before tax ..........................................

Profits tax liability....................................
Profits after tax ........................................
Dividends..............................................
Undistributed profits...........................

1.4

8.6

23.9
.3
4.9

1.0
.5
.4

5.8
2.8

2.0
- 1 .6

Inventory valuation adjustment..................

.5

- 2 .1

Net interest.......................................................

4.7

4.1

51.9 124.4 426.9 449.5 491.4 545.1 592.4 588.3 602.5 605.1 597.4 602.0
1.9
5.0 19.6 19.4 20.5 20.6 21.2 20.9 20.8 22.0 22.0 21.9
8.3 17.4 95.5 104.7 114.8 126.0 137.1 135.4 138.2 142.1 145.7 149.2

7.6

4.4
5.7

8.8
16.0

- 2 .5 i - 5 .0
3.2

- 4 .8

2.0 1 36.5;

N o t e . — Dept, of Commerce estimates. Quarterly data are seasonally
adjusted totals at annual rates. See also N o t e to table above.




24.7
14.6

37.5
25.0
21.1

- 4 .9
41.6

27.3
30.3

29.6
43.3

32.7
52.4

103.7 106.7 108.6

32.’5
50.5

33.‘2
61.1

33.’3
46.2

- 7 .0 -1 7 .6 -3 5 .1 - 3 3 .4 - 5 1 .2 -2 8 .1
45.6

52.3

61.6

60.1

62.8

65.9

110.5 112.4

56.7

33.’8
28.5

33.9

-7 .0

- 7 .9

68.9

71.9

AUGUST 1975 □ NATIONAL PRODUCT AND INCOME

A 55

RELATION OF GROSS NATIONAL PRODUCT, NATIONAL INCOME, AND PERSONAL INCOME AND SAVING
(In billions of dollars)
1929

Item

1933

1941

1950

1970

1972

1971

1973

1974

1974
II

103.1

Less: Capital consumption allowances..........

7.9

7.0

8.2

7.0
.6
.7

7.1
.7
.6

11.3
.5
.4

Plus: Subsidies less current surplus of gov-

Equals: National income..................................
Less: Corporate profits and inventory valu­

ation adjustment................................
Contributions for social insurance........
Excess of wage accruals over disburse­
ments ............................... ..................

- .1
86.8

IV

IIP

I

55.6 124.5 284.8 977.1 1,054.9 1,158.0 1,394.9 1,397.4 1,383.8 1,416.3 1,430.9 1,416.6 1,433.4

Gross national product.....................................
Indirect business tax and nontax lia­
bility....................................................
Business transfer payments...................
Statistical discrepancy...........................

III

1975

18.3

87.3

93.7 102.9 110.8 119.5 118.6 120.7 122.9 125.2 127.4

23.3 93.5 102.7 110.0 119.2 126.9 125.9 129.5 129.8 132.2 135.2
5.2
5.3
5.4
5.3
.8
4.9
5.2
5.5
4.0
4.3
4.6
.4
1.6
4.8
.3
3.0
1.5 - 6 .4 - 2 .3 - 3 .8 - 5 . 0

.1

.2

1.7

2.3

1.1

.6

- 2 .9

-3 .7

- 2 .4

-2 .7

- 1 .6

-1 .9

40.3 104.2 241.1 800.5 857.7 946.5 1,065.6 1,142.5 1,130.2 1,155.5 1,165.4 1,150.7

10.5 - 1 .2
.2
.3

15.2
2.8

37.7
6.9

69.2
57.7

78.7
63.8

92.2 105.1 105.6 105.6 105.8 103.4 94.3
73.0 91.2 101.5 100.8 103.0 103.2 104.6 105.4
- .1

.0

- .5

-.6

.0

.0

.6

.9

1.5

2.6

14.3

75.1

89.0

98.6 113.0 134.6 130.6 138.7 145.8 158.7 171.2

Business transfer payments...................

2.5
5.8
.6

1.6
2.0
.7

2.2
4.4
.5

7.2
8.8
.8

31.0
24.7
4.0

31.2
25.0
4.3

33.0
27.3
4.6

Net interest paid by government and
consumers..........................................

38.3
29.6
4.9

42.3
32.7
5.2

41.9
32.5
5.2

- 1 .5

.0

.0

Plus: Government transfer payments............

42.7
33.2
5.3

43.6
33.3
5.3

43.7
33.8
5.4

45.0
33.9
5.5

96.0 227.6 808.3 864.0 944.9 1,055.0 1,150.5 1,134.6 1,168.2 1,186.9 1,193.4 1,220.8

Equals: Personal income..................................

85.9

47.0

Less: Personal tax and nontax payments. . . .

2.6

1.5

Equals: Disposable personal income................

83.3

45.5

92.7 206.9 691.7 746.4 802.5 903.7 979.7 966.5 993.1 1,008.8 1,015.5 1,078.8

Less: Personal outlays.....................................

79.1
77.2
1.5

46.5
45.8
.5

81.7 193.9 635.5 685.9 749.9 829.4 902.7 894.9 927.6 922.3 939.5 964.1
80.6 191.0 617.6 667.1 729.0 805.2 876.7 869.1 901.3 895.8 913.2 938.1
.9
2.4 16.8 17.7 19.8 22.9 25.0 24.8 25.3 25.5 25.4 25.1

.3

.2

.2

Equals: Personal saving...................................

4.2

- .9

11.0

Personal consumption expenditures..
Consumer interest payments.............
Personal transfer payments to for­
eigners..............................................

3.3

20.7 116.6 117.6 142.4 151.3 170.8 168.2 175.1 178.1 178.0 142.0

.5

1.0

13.1

56.2

1.1

1.3

1.0

1.0

.9

.9

52.6

74.4

77.0

71.5

65.5

86.5

1.1
60.5

.9

.9

75.9 114.6

Disposable personal income in constant (1958)
dollars............................................................ 150.6 112.2 190.3 249.6 534.8 555.4 580.5 619.6 602.8 603.5 602.9 594.8 591.0 620.5
N o t e . — Dept, of Commerce estimates. Quarterly data are seasonally
adjusted totals at annual rates. See also N o t e to table at top of opposite
page.

PERSONAL INCOME
(In billions of dollars)

Item

1973

1974

1975

1974
June

July

Aug.

Sept.

Oct.

Nov.

Dec.

Jan.

Feb.

Mar.

Apr.

May

June®

Total personal income.............. 1,055.0 1,150.5 1,143.5 1,159.5 1,167.2 1,178.0 1,185.0 1,184.5 1,191.0 1,191.1 1,193.4 1,195.7 1,203.1 1,214.3 1,244.9
Wage and salary disbursements. 691.7 751.2 753.2
Commodity-producing in­
dustries .......................... 251.9 270.9 272.6

759.7

761.6

767.7

773.0

767.8

766.6

765.7 763.6

766.0

768.0 772.9 778.3

273.3

276.5

278.3

279.5

272.3

269.3

266.4

Distributive industries. . .. 165.1 178.9 179.1
Service industries................. 128.2 142.6 142.6
Government.......................... 146.6 158.8 158.9

180.8
143.5
162.1

206.4

180.7
144.9
159.5

183.1
146.4
159.9

209.7

260.5

261.2
203.8
184.3
152.4
170.3

196.6 211.3 212.5

214.0

215.5

217.8

219.4

183.8
146.9
162.8

214.2

183.9
147.4
164.2

183.8
148.3
165.2

183.2
149.8
166.2

260.7

202.9

203.1

184.0
151.2
167.6

183.8
152.6
169.2

262.2
204.5
186.1
153.5
171.1

264.4
206.3
187.2
154.8
171.9

Other labor income..................

46.0

51.4

51.1

51.7

52.3

52.9

53.5

54.0

54.5

54.9

55.3

55.7

56.2

56.7

57.2

Proprietors’ income..................
Business and professional...
F arm ......................................

96.1
57.6
38.5

93.0
61.2
31.8

86.9
61.2
25.7

90.0
61.9
28.1

93.1
62.5
30.6

93.2
62.5
30.7

91.7
62.5
29.2

91.6
62.5
29.1

91.5
62.5
29.0

88.7
62.7
26.0

85.0
62.8
22.2

80.9
62.5
18.4

83.6
63.0
20.6

86.4
63.4
23.0

88.1
63.6
24.5

Rental income...........................

26.1

26.5

26.7

26.6

26.6

26.6

26.7

26.8

26.9

27.0

27.0

27.0

27.1

27.1

27.2

Dividends..................................

29.6

32.7

33.0

33.1

33.2

33.4

33.5

33.6

32.7

33.9

33.8

33.7

33.9

34.0

33.8

Personal interest income..........

90.6 103.8 103.5

104.4

105.3

106.9

108.0

109.5

111.1

111.9

112.5

113.3

114.8 116.9 119.0

Transfer payments...................

117.8 139.8 137.0

142.5

143.6

146.0

147.6

149.8

156.1

158.6

165.5

168.3

168.9 169.9 191.3

47.9

48.5

48.4

48.6

48.9

48.5

48.4

49.5

49.2

49.3

Less: Personal contributions

for social insurance........

42.8

47.9

49.4

49.7

50.0

1,008.0 1,109.0 1,106.8 1,121.7 1,126.8 1,137.4 1,145.7 1,145.2 1,151.4 1,154.3 1,160.1 1,166.2 1,171.1 1,179.7 1,208.7
39.5
39.3
Agricultural income.................. 47.0 41.5 36.8
39.3
36.8
37.1
40.4
40.6
33.3
29.6
32.1 34.6 36.2
N o t e . —Dept, of Commerce estimates. Monthly data are seasonally
adjusted totals at annual rates. See also N o t e to table at top of opposite
page.




A 56

FLOW OF FUNDS □ AUGUST 1975
SUMMARY OF FUNDS RAISED IN U.S. CREDIT MARKETS
(Seasonally adjusted annual rates; in billions of dollars)
1974
Transaction category, or sector

1965

1966

1968

1967

1969

1970

1971

1972

1973

1974

HI

H2

Credit market funds raised by nonfinancial sectors
98.2 147.4 169.4 187.4 179.6 187.3 172.0
92.4 135.9 158.9 180.1 175.8 181.9 169.7

1
2

1 Total funds raised by nonfinancial sectors.................
2 E x clu d in g e q u itie s ................................................

69.9
69.6

67.9
66.9

82.4
80.0

96.0
96.0

3 U.S. Government.......................................................
4
Public debt securities..............................................
Agency issues and mortgages................................
5

1.8
1.3
.5

3.6
2.3
1.3

13.0
8.9
4.1

13.4 - 3 .7
10.4 - 1 .3
3.1 - 2 .4

12.8
12.9
- .1

18.9
20.2
- 1 .3

3
4
5

6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23

Corporate equities..................................................

Debt instruments .....................................................
P riv a te d o m e s tic
N o n fin a n cia l s e c to r s ......................................

25.5
26.0
- .5

17.3
13.9
3.4

9.7
7.7
2.0

12.0
12.0
*

5.1
3.9
1.2

68.1
.3

64.3
1.0

69.4
2.4

82.6
*

95.5
3.9

85.4 121.9 152.1 177.6 167.6 182.2 153.1
5.4
7.2
2.3
3.9
5.8 11.5 10.5

67.9

63.3

67.0

82.6

91.6

79.7 110.4 141.6 170.4 163.8 176.8 150.8

6
7
8

65.4
2.4

79.7
- .2

91.8
3.4

82.7 117.3 147.8 170.1 152.2 162.3 142.2
5.6
2.6
7.4
4.1
5.7 11.4 10.9

79.9

88.4

9
10
11
12
13
14
15
16
17
18
19
20
21
22
23

65.4
*

62.7
1.3

Corporate equities..............................................
Debt instruments..................................................
Debt capital instruments................................
State and local obligations.........................
Corporate bonds.........................................
Home mortgages ..........................................
Multifamily residential m ortgages ..............
Commercial m ortgages ...............................
Farm mortgages ...........................................
Other debt instruments...................................
Consumer credit..........................................
Bank loans n.e.c..........................................
Open-market paper.....................................
O ther............................................................

27.1
9.6
13.6
- .3
4.1

23.3
6.4
10.9
1.1
5.0

By borrowing sector: .........................................
State and local governments..........................
Households................. ...................................
F arm ................................................................
Nonfarm noncorporate...................................
Corporate........................................................

65.4
7.7
28.3
3.3
5.7
20.4

F o r e ig n ..................................................................
2.7
30
31
Corporate equities..............................................
.3
32
2 .4
Debt instruments..................................................
33
Bonds...............................................................
.5
34
Bank loans n.e.c..............................................
.5
- .1
Open-market paper.........................................
35
36
U.S. Government loans..................................
1.5
37 Memo: U.S. Govt, cash balance............................... - 1 .0
Totals net of changes in U.S. Govt, cash balances—
70.9
38 Total funds raised......................................................
2.8
By U.S. Government..............................................
39

24
25
26
27
28
29

91.8
87.9

65.4

38.4
7.3
5.4

15.4
3 .6
4 .4
2 .2

61.5

63.0

38.2
5.6
10.2

44.5
7.8
14.7

11.7
3.1
5 .7
1.8

11.5
3 .6
4 .7
2 .3

77.0 105.8 136.9 162.7 148.1

18.5
4.5
9.8
1.7
2.6

30.4
10.0
13.6
1.8
5.0

38.8
10.4
15.5
3.0
9.9

20.3
6.0
6.7
3.0
4.6

62.7
6.3
22.7
3.1
5.4
25.3

65.4
7.9
19.3
3.6
5.0
29.6

79.7
9.8
30.0
2.8
5.6
31.6

91.8
10.7
31.7
3.2
7.4
38.9

82.7 117.3 147.8 170.1 152.2 162.3 142.2 24
11.3 17.8 14.2 12.3 16.6 16.4 16.7 25
23.4 39.8 63.1 72.8 43.5 47.4 39.5 26
7.7
3.2
8.6
7.9 27
7.8
4.1
4.9
7.2
7.4 28
5.3
8.7 10.4
9.3
7.3
39.5 46.8 55.3 67.1 77.1 83.6 70.7 29

1.5
- .3

4.0
.1

2.8
.2

3.7
.5

2.7
.1

4.6
*

4.3
- .4

1.8

4 .0

2 .7

3 .2

2 .7
.9

4 .6
.9

4 .7

.7
- .2
- .1
1.3
- .4

1.2
- .3
.5
2.6
1.2

1.1
- .5
- .2
2.2
- 1 .1

1.0
- .2
.3
2.1
.4

68.3
4.0

81.3
11.8

97.1
14.6

91.4
-4 .1

12.8
5 .8
5 .3
1.8

26.1
8.8
10.0
2 .0

22.6
11.2
7.8
- 1 .2
4.8

39.6
10.3
14.8
2 .6

43.0
19.2
18.9
- .5
5.5

96.1
13.7
9.2

92.9
17.4
19.7

43.3
8.4
17.0
4 .4

31.6
7.8
11.5
4 .9
55.2

86.1
16.5
21 .3

49.6
9.9
12.0
15.7
4 .7
5 .3
1.9

83.2 93.8
17.6 . 14.4
18.8 12.2

99.6
18.3
18.1

49.5
9.5
12.9
15.1
3 .4
6 .4
2 .2

56.7
11.2
19.8

156.7 139.6

66.6
22.9
35.8
- .4
8.3

9.6
27.1
6.4
12.1

35.8
7.3
15.7
4.5

57.1
12.7
32.6
5.2
6.6

2 7.4
8 .3
7.3
5 .4

53.5
6.6
21.6
7.7
17.6

2.3
- .1
7.2
1.8
- 7 .1

30
31
32
33
34
35
36
37

95.5 144.2 169.7 189.0 184.2 189.3 179.1
7.1 26.0
10.0 22.3 17.6 11.4 16.6

38
39

- .3
.8
1.3
2.8

1.6
.3
1.8
3.2

1.0
2.9
- 1 .0
1.8
- .3

7.5
- .2
7.7
1.0
2.8
2.2
1.7
- 1 .7

15.4
- .2

19.9
- .2

10.9
- .3

15.7
2 .2

20.1

11.2

4.8
7.0
1.7
- 4 .6

2.1
9.6
6.9
1.5
- 2 .0

Credit market funds raised by financial sectors
1 Total funds raised by financial sectors................
2
Sponsored credit agencies......................................
3
U.S. Government securities...............................
Loans from U.S. Government...........................
4
5
Private financial sectors.........................................
6
Corporate equities..............................................
7
Debt instruments..................................................
8
Corporate bonds.............................................
9
Mortgages........................................................
Bank loans n.e.c..............................................
10
11
Open-market paper and RP’s ........................
12
Loans from FHLB’s .......................................

13.3 11.7
2.1
4.8
1.9
5.1
- .2
.2
11.2
6.9
3.2
3.7
3 .2
7.9
2.7
.9
* -.9
2.3 - 1 .0
3.3
2.3
.7
.9

.8
- 2 .8
5.6
- 5 .5
6.5

1
2
3
4
5
6
7
8
9
10
11
12

1.3
1.0
- 2 .0
1.9
- 2 .5

1.1
.4
2.5
3.6
.9

13 Total funds raised, by sector......................................
14
Sponsored credit agencies......................................
15
Private financial sectors.........................................
Commercial banks..............................................
16
17
Bank affiliates......................................................
Foreign banking agencies...................................
18
Savings and loan associations...........................
19
20
Other insurance companies................................
21
Finance companies.............................................
22
REITS..................................................................
23
Open-end investment companies......................

13.3
2.1
11.2
1.8
*
.8
.1
5.2

11.7
4.8
6.9
- .1

18.3
3.5
14.9
1.2

.1
.1
.1
3.1

2.0
- .6
2.6
.1
*
- 1 .7
.1
1.2

40.8 35.5
16.8 2 1 A
24.1
8.1
2.6 - 6 . 4
4.1
.7
2.7
3.1
8.6
4.0
.4
.3
3.6
4.1
- .5
2.8
- .8
2.8

13
14
15
16
17
18
19
20
21
22
23

3.2

3.7

3.0

79.6
3.7
1.1

84.4 114.3 125.5 110.8 163.9 198.3 239.4 217.8 228.1 207.5
1.0
- .8
3.0
2.6
- . 7 - 1 .6
2.8
5.8
4.8
1.1
9.6
6.7
3.1
4.9
5.2
7.7 13.6 13.6
2.5
.6

8.8
5.6
11.8
21.3
6.4
9.7
4.4
6.9

12.5
7.8
17.2
23.0
4.5
7.5
4.0
2.5

1
2
3
4
5
6
7
8
9
10
11
12

52.0
19.6
19.6

38.2 40.8
22.1
16.8
21.4 16.8
.7
16.1 • 'i 4 :i
2.0
.5

2.0
- .6
- .6
- .1
2.6
3.0

18.3
3.5
3.2
.2
14.9
6.4

33.7
8.8
9.1
- .3
24.9
6.1

12.6
8.2
8.2

16.5
3.8
3.8

28.9
6.2
6.2

4.3
4.6

12.7
3.3

22.8
2.4

-.4

8.5

18.8

-.3

3.1
.7
- .5
- 5 .0
1.3

9 .3

5.1
2.1
3.0
1.8
- 2 .7

20.3

31.6

7.0
2.3
1.7 - 1 .2
6.8 13.5
4.9
9.8
*
7.2

1.4
- 1 .3
7.2
.1
6.7

33.7 12.6
8.2
8.8
4.3
24.9
1.4 - 3 .1
4.2 - 1 .9
.2
.1
1.8
4.1
.5
.4
8.3
1.6
1.3
2.7
2.6
4.8

16.5
3.8
12.7
2.5
- .4
1.6
- .1
.6
4.2
3.0
1.1

28.9
6.2
22.8
4.0
.7
.8
2.0
.5
9.3
6.1
- .7

52.0
19.6
32.4
4.5
2.2
5.1
6.0
.5
9.4
6.3
- 1 .6

38.2
22.1
16.1
- 1 .9
2.4
2.9
6.3
.4
3.9
1.2
1.0

.i
1.1
.2
5.7
.7
5.8

1.5
.2
2.3
10.7
4.0

32.4
.8

14.1

23.6

2.0
.1
8.9
5.8
6.8

35.5

21A

26.0
1.4
8.1
3.6
4 .6

Total credit market funds raised, all sectors, by type
1 Total funds raised.......................................................
2
Investment company shares...................................
3
Other corporate equities.........................................
4
Debt instruments......................................................
5
U.S. Government securities...............................
6
State and local obligations.................................
7
Corporate and foreign bonds.............................
Mortgages............................................................
8
Consumer credit..................................................
9
10
Bank loans n.e.c..................................................
11
Open-market paper and RP’s ............................
12
Other loans..........................................................
N o t e . —Full

83.2
3.2
.3
79.7

3.7
7.3
8.6
25.6
9.6
16.4
1.9
6.5

74.9

statements for sectors and transaction types quarterly, and

annually for flows and for amounts outstanding, may be obtained from



79.0 107.9 115.5 100.4 149.1

16.7
9.5
15.0
27.4
10.0
15.7
5.2
8.3

5.5 21.1
9.9 11.2
14.5 23.8
27.8 26.4
10.4
6.0
17.6
5.8
14.1 - 1 .2
7.3
15.8

29.4
17.6
24.8
48.9
11.2
12.4
.9
4.0

185.4 231.3 211.9 222.2 201.7

23.6
14.4
20.2
68.8
19.2
28.5
3.3
7.4

29.4
13.7
12.5
71.9
22.9
52.1
11.6
17.2

33.5
17.4
23.3
54.4
9.6
39.1
13.6
21.1

21.9
18.3
22.2
63.4
12.7
51.1
17.8
14.9

45.1
16.5
24.4
45.4
6.6
27.0
9.4
27.3

Flow of Funds Section, Division of Research and Statistics, Board of
Governors of the Federal Reserve System, Washington, D.C. 20551.

AUGUST 1975 □ FLOW OF FUNDS

A 57

DIRECT AND INDIRECT SOURCES OF FUNDS TO CREDIT MARKETS
(Seasonally adjusted annual rates; in billions of dollars)
1!974
Transaction category, or sector

1 Total funds advanced in credit markets to
nonfinancial sectors.............................................
By public agencies and foreign
2
3
U.S. Government securities...................................
4
Residential mortgages............................................
5
FHLB advances to S&L’s ......................................
6
Other loans and securities.....................................
By agency—
7
U.S. Government...................................................
8
Sponsored credit agencies......................................
Monetary authorities..............................................
9
10
Foreign....................................................................
11 Agency borrowing not included in line 1.................
Private domestic funds advanced
12 Total net advances......................................................
13
U.S. Government securities...................................
14
State and local obligations.....................................
15
16
Residential mortgages............................................
17
Other mortgages and loans...................................
18
Less: FHLB advances............................................
19

P r iv a te fin a n c ia l in te r m e d ia tio n
Credit market funds advanced by private financial

20
21
22
23

Commercial banking..............................................
Savings institutions................................................
Insurance and pension funds.................................
Other finance..........................................................

24 Sources o f funds ..........................................................
25
Private domestic deposits.......................................
26
Credit market borrowing.......................................
27
28
29
30
31

Other sources..........................................................
Foreign funds......................................................
Treasury balances...............................................
Insurance and pension reserves.........................
Other, n et............................................................
P riv a te d o m e s tic n o n fin a n cia l in v e sto rs

1965

1966

1967

1968

1969

1970

1971

1972

1973

1974

HI

H2

69.6

66.9

80.0

95.9

88.0

92.5 135.9 158.9 180.1 175.8 181.9 169.7

1

8.9
3.7
.4
.7
4.1

11.9
3.4
2.8
.9
4.8

11.3
6.8
2.1
- 2 .5
4.9

12.2
3.4
2.8
.9
5.1

15.7
.7
4.6
4.0
6.3

28.1 41.7
15.9 33.8
5.7
5.7
1.3 - 2 . 7
5.2
4.9

2.8
4.9
2.2
5.1
3.8
3.5
.1 - 1 . 6
2.1
4.8

4.6
-.1
4.8
2.0
- .6

4.9
3.2
3.7
.3
3.5

2.9
8.9
4.2
- .3
8.8

2.8
10.0
5.0
10.3
8.2

62.8
*
7.3
6.0
18.6
31.6
.7

59.8 68.1
5.4
5.7
7.8
5.6
10.3 16.0
12.0 13.0
27.4 23.1
.9 - 2 .5

87.2
13.3
9.5
13.8
15.5
35.9
.9

81.1
4.8
9.9
12.5
15.7
42.2
4.0

62.9

45.4

63.5

75.3

55.3

62.9

45.4

63.5

50.0
- .4

75.3

45.9
8.5

55.3

22.5
3.2

16.6
.8
- 1 .0
11.4
5.4

19.8
3.7
- .5
13.6
3.0

13.9
2.3
.2
12.0
- .6

21.0
2.6
- .2
11.4
7.2

34.0 12.0 11.0
9.3 - 8 .5 - 3 . 2
*
2.9
2.2
10.8 13.1
9.1
13.8
4.4
2.9
44.5
17.0
8.7
6.6
10.2
2.0

28.7
14.3
13.6
6.2
38.4
7.9

35.9
15.0
12.9
- .3

17.5
7.9
15.5
4.5

38.7
15.6
14.0
7.0

18.2
14.5
12.7
9.9
2.6
18.8

18.3
8.4
5.2
*
4.6

33.2
11.0
7.6
7.2
7.5

49.3
8.6
13.8
6.7
20.2

39.6
6.9
11.7
6.8
14.2

59.0
10.4
15.9
6.5
26.2

2
3
4
5
6

2.6
7.0
.3
8.4
6.2

3.0
20.3
9.2
.7
19.6

7.5
24.1
6.2
11.6
22.1

2.4
20.5
6.1
10.6
16.8

12.5
27.6
6.2
12.7
27.4

7
8
9
10
11

72.6 98.1 146.7 166.5 148.6 159.1 138.1
5.2 - 4 . 4
15.2 18.4 24.8 15.0 34.7
11.2 17.6 14.4 13.7 17.4 18.3 16.5
20.0 19.5 13.2 10.1 20.5 19.2 21.8
12.8 29.1 44.6 44.1 25.5 31.4 19.6
24.6 33.7 59.5 87.4 67.0 82.1 52.0
*
1.3 - 2 . 7
7.2
6.7
6.8
6.5

12
13
14
15
16
17
18

3.2
3.2
8.9
26.4
3.8

19
41.3 20
19.8 21
39.4 22
8.2 23

74.9 110.7 153.4 158.8 132.1

155.6 108.6

74.9 110.7 153.4 158.8 132.1

155.6 108.6

35.1
16.9
17.3
5.7

63.2
- .3

50.6
41.4
13.3
5.3
90.3
9.3

70.5
49.3
17.7
15.8
97.5
20.3

86.6
35.1
22.1
15.0

84.9
31.6

64.4
27.5
34.3
6.0
72.0
14.1

87.5
35.1
29.1
3.8
93.5
23.6

50.5
4.6

24
25
26

35.5 42.4 46.0 38.5 53.5 27
5.2
6.5 13.6 11.6 15.5 28
.7 - 1 .0 - 5 .1 - 2 .1 - 8 .1 29
13.1 16.7 28.0 23.0 33.0 30
16.5 20.2
9.5
6.0 13.0 31

32 Direct lending in credit markets...............................
33
U.S. Government securities...................................
34
State and local obligations.....................................
35
36
Commercial paper..................................................
37
Other.......................................................................

7.9
2.9
2.6
1.0
1.5
- .1

4.2
17.6
8.4 - 1 .4
2.6 - 2 .5
2.0
4.6
1.9
2.3
2.3
1.7

20.4
8.1
- .2
4.7
5.8
2.1

38 Deposits and currency................................................
39
40
Large negotiable CD’s .......................................
41
Other at commercial banks...............................
42
At savings institutions........................................

40.5
32.7
3.6
16.0
13.2

24.4
20.3
- .2
13.3
7.3

52.1
39.3
4.3
18.3
16.7

48.3
5.4
33.9 - 2 .3
3.5 -1 3 .7
3.4
17.5
12.9
8.0

66.6
56.1
15.0
24.2
16.9

93.7 101.9
81.0 85.2
8.7
7.7
32.9 30.6
40.4 45.9

88.8
76.3
18.5
29.5
28.2

Demand deposits................................................
Currency..............................................................

7.8
5.6
2.1

4.1
2.1
2.0

12.8
10.6
2.1

14.5
12.1
2.4

7.7
4.8
2.8

10.5
7.1
3.5

12.7
9.3
3.4

12.6
8.6
3.9

13.1
4.6
8.5

- .5
- 4 .6
4.1

43
44
45

46 Total of credit market instr., deposits, and currency.

48.4

42.0

56.3

68.7

49.9

64.1

90.5 115.7 128.1 108.9 129.1

88.6

46

Public support rate (in per cent)...........................
Private financial intermediation (in per cent)........

12.8
100.1
.8

17.9
75.9
2.1

14.1
93.2
4.3

12.7
86.4
2.9

17.8 30.4 30.7 11.5
68.3 103.1 112.8 104.5
1.8 23.2 13.6
9.1

43
44
45
47
48
49

- 2 .6 - 3 .2
- 9 . 0 - 1 4 .0
- 1 .2
.6
9.3
10.7
- 4 .4
- .6
1.4
1.5

13.7
1.6
2.1
5.2
4.0
.8

16.7
12.3
4.4

39.3 30.5 27.1 34.0
18.8 18.4 13.9 22.8
4.4 10.7
8.3 13.0
1.1 - 2 .3 - 1 . 6 - 2 .9
11.3
.6
4.3 - 3 .1
3.8
3.2
2.2
4.3

18.4
95.4
7.2

78.3 102.0
72.0 88.9
23.6 30.0
26.6 32.3
21.8 26.6
6.3
*
6.3
28.0
88.9
25.2

21.8
97.8
22.2

32
33
34
35
36
37

54.6 38
55.1 39
17.2 40
21.0 41
16.9 42

34.8 47
78.7 48
28.2 49

Corporate equities not included above
1
Mutual fund shares................................................
2
3
4 Acquisitions by financial institutions.......................
5

6.4 10.0 10.4 14.8 12.9
8.0
3.5
4.8
5.5
5.8
4.8
2.6
3.0
- . 7 - 1 .6
3.2
1.1
3.7
.6
5.2
7.7 13.6 13.6
9.6
.3
1.1
2.5
10.8 12.2 11.4 19.3 16.0 13.4
6.0
9.1
6.1
—2.6 - 1 .2 - 3 .6 - 4 .4 - 2 .2 - 1 .0 - 4 .5 - 3 .1 - 5 . 4

Notes
Line
1. Line 2 of p. A-56.
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 -j- 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.




5.9
5.9
1.0 - . 8
4.9
6.7
6.4
8.4
- . 5 - 2 .5

5.9
2.8
3.1
4.4
1.5

1
2
3
4
5

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.
39+44. See line 25.
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.
Corporate equities
Line 1 and 3. Includes issues by financial institutions.

A 58

U.S. BALANCE OF PAYMENTS □ AUGUST 1975
1. U.S. BALANCE OF PAYMENTS SUMMARY
(In millions of dollars. Quarterly figures are seasonally adjusted unless shown in italics.)

Credits (+ ), debits ( —)

Line

1972

1973

1974

1974
II

-3,621
-3 ,0 2 4

-2 ,1 5 8
-2 ,6 9 2

-503
-5 1 3

-6 4 6
-717

-513
-721

-498
-741

-3 4 7
-5 0 7

Investment income, net 2.......................................
U.S. direct investments abroad 2 .................
Other U.S. investments abroad.....................
Foreign investments in the United States 2 .

4,321
5,179 10,121
8,841 17,679
6,416
8,389
3,746
5,157
-5,841 -8 ,8 1 9 -15,946

3,245
4,500
1,629
-2 ,8 8 4

1,964
4,399
2,048
-4 ,4 8 3

2.354
4,700
2.354
-4 ,7 0 0

2,559
4,080
2,358
-3 ,8 7 9

1,325
2,189
2,157
-3,021

936

Balance on goods, services, and remittances.
Not seasonally adjusted.............................

U.S. Government grants (excluding military)...............
Balance on current account...
Not seasonally adjusted.,

15
16
17
18
19

20
21
22
23
24
27
26

U.S. Government capital flows excluding nonscheduled
repayments, net 5....................................................................
Nonscheduled repayments of U.S. Government assets...........
U.S. Government nonliquid liabilities to other than foreign
official reserve agencies...........................................................
Long-term private capital flows, n et....................................... .
U.S. direct investments abroad..........................................
Foreign direct investments in the United States...............
Foreign securities..............................................................
U.S. securities other than Treasury issues.......................
Other, reported by U.S. banks.........................................
Other, reported by U.S. nonbanking concerns...............
Balance on current account and long-term capital 5.
Not seasonally adjusted..........................................

Nonliquid short-term private capital flows, net.............
Claims reported by U.S. banks................................
Claims reported by U.S. nonbanking concerns
Liabilities reported by U.S. nonbanking concerns.
Allocations of Special Drawing Rights (SDR’s).......... .
Errors and omissions, n e t...............................................
Net liquidity balance..............
Not seasonally adjusted..

2,803

3,222

3,830

886

4,177

3,574

2,915
4,197

-1,606

-1,903

-1,721

-3 7 0

-7,537

2,274

1,853

-2,173

-1,938

-9 ,7 1 0

1,049

1,032

-5

919
2,278

3,344
4,388

-4 5 7

-4 5 7

-439

-4 5 8

2,545
3,857

-4 5 7
-4 7 2

-7 1 8
- 3 ,3 6 6

480

1,834

2,886

-5 ,4 6 1

-2 ,5 9 6

-1 ,4 0 8

-808

-649

-7 3 8

335 - 3 ,6 0 8

4 -5 1
1,248

-1 ,8 6 5
- 1 ,9 4 6

- 1 ,5 2 6
- 4 ,1 3 0

-1 6 9
1,219

2,148
3,211

3,959

-2,933
289

408
1

41,314

273

-195

-985

-1,038

234
-6 9
-3 ,5 3 0
380
-618
4,507
-1 ,1 5 8
351

1,154
177
-4,968
2,656
-759
4,055
-706
-101

710
-8 ,4 3 7
-7 ,2 6 8
2,224
-1 ,9 9 0
672
-1 ,1 5 0
-925

97
264
-745
1,177
-6 4 6
692
-2 3
-191

211
-999
-1,572
1,700
-313
440
-9 0 6
-348

278
-2,157
-1,828
-1
-3 0 4
204
48
-276

125
-5,544
-3,123
-653
-726
-663
-269
-1 1 0

541
-2,126
-9 3 7
326
-2,033
604
-4 4 4
358

-977 -10,927

1,624
2,375

-2,380

-3,600

-2 ,5 1 9

-6 ,1 2 3

-6,573

-4 7 5

-3,908
-2,817
-1,508
417

-5,248
-5,319
-6 8 2
753

-1,462
-1,618
-2 7 6
432

-1 1 ,1 1 3

-4,238 -12,949
-3,886 -12,186
-1,183 -2 ,6 0 3
831
1,840

-4 ,6 6 0

50

-1 ,5 4 2
-1 ,4 5 7
-306
221
710
-1 ,1

-2,436

4,834

1,085

1,416

1,153

1,179

1,844

-1 3 ,8 2 9

-7,651

19,043

-1,199
-2 4 4

-6,212
-6 ,6 5 4

-3 ,9 0 9
-5,551

-7,725

3,071

2,343 10,669
-1,951 -6 ,1 1 3
-1,161 -5 ,9 8 0
-133
-7 9 0
4,722
4,294 16,782
3,717
3,028 12,636
103
377
1,295
902
889
2,851

1,751
-2,620
-2,343
-277
4,371
4,300
-5 3 0
601

2,020
-1,297
-1,306
9
3,317
2,413
298
606

4,028
-228
-7 3 2
504
4,256
3,150
219
887

2,870
1,968
1,599
-369
4,838
2,773
1,308
757

-6,294
-4,752
-5,059
307
-1,542
-2,619
847
230

552

-4,192
-4 ,0 4 8

119
-1 ,6 8 3

-4,855

-3,223

3,475
-1 ,2 4 7
-7 4 2
-505

42

Official reserve transactions balance, financed by changes in Not seasonally adjusted.........................................................

-1 0 ,3 5 4

46
47
48
49
50

960
-2 6 1
- 2 ,8 9 7

-1 ,7 0 6
137

Liquid private capital flows, net...............................
Liquid claims......................................................
Reported by U.S. banks............................
Reported by U.S. nonbanking concerns..
Liquid liabilities—..............................................
Foreign commercial banks........................
International and regional organizations.
Other foreigners........................................

45

-2 ,3 1 7
-2 ,8 6 2

- 5 ,9 3 0

34
35
36
37
38
39
40
41

43
44

-2 0 0 -1 ,5 3 7 -2,341 -1 ,4 5 0
1,841
22,451 24,206 25,026 26,585 27,222
■22,651 -25,743 -27,367 -28,035 -25,381

Military transactions, net.........
Travel and transportation, n et.

Remittances, pensions, and other transfers.

14

IV

-6 ,4 0 9
955 -5,5 2 8
49,388 71,379 98,268
-55,797 -70,424 -103,796

Other services, net 2 ..............................................

13

III

Merchandise trade balance i.
Exports...........................
Imports...........................

Balance on goods and services •
Not seasonally adjusted. ..

12

1975

-5 ,3 0 8

-8 ,3 7 4

1,406

-2,331
-2,432
-137
238

-6 ,5 9 4

-4,0 4 9

1,702
1,895
-9 5
-9 8

4,204

-2 ,1 8 8

9,734

4,456

8,481

-6 3

3,924

750

3,872

2,753

399

1,118

672

-2 7 7

183

135

631

800

189
32
547
-703
35
153

-475
209

655
-1,434

-210

443
-358

-1
-1,003

215
137

-4
-3 2 6

9
-172
233
3
-3 3 -1 ,2 6 5

-209

-2 9
-8 5
-244

-123
-1 5 2
-728

-2 0
241
-8 4

-1 4
-307

4,492

2,809

406

564

352

490

783

4,521

8,124

548

945

N et liquidity, not seasonally adjusted. .

-14,539

-7,651

-19,043

-2 4 4

-6 ,6 5 4

-5,551

-6 ,5 9 4

4,204

Official reserve transactions, N .S.A. ..

-11,064

-5 ,3 0 8

-8 ,3 7 4

1,406

-4 ,0 4 8

-1 ,6 8 3

-4 ,0 4 9

-2 ,1 8 8

Liquid liabilities to foreign official agencies.............................
Other readily marketable liabilities to foreign official agen­
cies 6........................................................................................
Nonliquid liabilities to foreign official reserve agencies re­
ported by U.S. Govt...............................................................
U.S. official reserve assets, net..................................................
G old.....................................................................................
SDR’s ...................................................................................
Convertible currencies........................................................
Gold tranche position in IM F ...........................................

-5

Memoranda:

Transfers under military grant programs (excluded from
lines 2, 4, and 14)...................................................................
Reinvested earnings of foreign incorporated affiliates of
U.S. firms (excluded from lines 7 and 20)............................
Reinvested earnings of U.S. incorporated affiliates of foreign
firms (excluded from lines 9 and 21).....................................

1,811

Balances excluding allocations of SDR’s :

For notes see opposite page.




AUGUST 1975 □ FOREIGN TRADE; U.S. RESERVE ASSETS

A 59

2. MERCHANDISE EXPORTS AND IMPORTS
(Seasonally adjusted; in millions of dollars)
Exports 1

Imports 1975

1972

1973

7,150
7,549
7,625
8,108
7,652
8,317
8,307
8,379
8,399
8,673
8,973
8,862

9,412
8,789
8,716
8,570
8,145
8,692

4,436
4,473
4,515
4,417
4,486
4,468
4,565
4,726
4,612
4,738
5,148
5,002

5,244
5,483
5,414
5,360
5,703
5,775
5,829
6,011
5,644
5,996
6,684
6,291

6,498
7,318
7,742
8,025
8,265
8,577
8,922
9,267
8,696
8,773
8,973
9,257

9,622
7,872
7,336
8,013
7,093
6,954

15,336
16,783
18,327
20,413

22,325
24,077
25,085
26,508

26,917
25,406

13,424
13,370
13,903
14,888

16,140
16,839
17,483
18,972

21,558
24,867
26,885
27,003

24,830
22,060

70,823

97,908

55,583

69,476

100,251

1972

1973

M onth:
Ja n .. .
F eb.. .
M ar...
A pr...
M ay..
June..
July...
Aug...
Sept...
O ct.. .
N ov...
D ec...

4.074
3,824
3,869
3,820
3,882
3,971
4.074
4,191
4,176
4,312
4,468
4,553

955
070
311
494
561
728
865
042
420
6;585
6,879
6,949

Quarter:
I
I I
I I I .. . .
IV .. . .

11,767
11,673
12,442
13,333

Year4..

49,199

1974 r

1 Exports of domestic and foreign merchandise (f.a.s. value basis);
excludes Department of Defense shipments under military grant-aid
programs.
2 General imports, which includes imports for immediate consumption
plus entries into bonded warehouses. See also note 3.
3 Beginning with 1974 data, imports are reported on an f.a.s. trans­
actions value basis; prior data are reported on a Customs import value

19743 »•

Trade balance
1975

1972

1973

19743r

-361
-649
-647
-596
-604
-497
-491
-535
-436
-426
-680
-449

-289
-413
-103
+ 133
-142
-4 7
+ 37
+ 32
+776
+589
+ 195
+658

+652
+231
-117
+ 83
-612
-2 6 0
-615
-888
-297
-1 0 0

-1,657
-1,697
-1,461
-1,555

-804
-5 6
+ 844
+ 1,441

+767
-790
-1 ,8 0 0
-495

-6,384

+ 1,347

-2 ,3 4 3

1975
-211
+917
+ 1,380
+557
+ 1,052
+ 1,737

-395
+2,087
+ 3,346

basis. For calender year 1974, the f.a.s. import transactions value was
$100.3 billion, about 0.7 per cent less than the corresponding Customs
import value of $101.0 billion.
4 Sum of unadjusted figures.
N o t e . —Bureau of the Census data. Details may not add to totals be­
cause of rounding.

3. U.S. RESERVE ASSETS
(In millions of dollars)
Gold stock i
Total2

T reasury

Con­
vertible
foreign
curren­
cies

18,753
17,220
16,843
16,672

16,947
16,057
15,596
15,471

16,889
15,978
15,513
15,388

116
99
212
432

1,690
1,064
1,035
769

1 9 6 5 ... 15,450
1 9 6 6 ... 14,882
1 9 6 7 ...
14,830
1 9 6 8 ...
15,710
1 9 6 9 ... 516,964

13,806
13,235
12,065
10,892
11,859

13,733
13,159
11,982
10,367
10,367

781
1,321
2,345
3,528
52,781

863
326
420
1,290
2,324

11,072
10,206
10,487
11,652
11,652

10,732
10,132
10,410
11,567
11,652

629
6 276
241
8
5

1,935
585
465
552
1,852

End of
year

Total

19 6 1 ...
1 9 6 2 ...
1 9 6 3 ...
1 9 6 4 ...

1 9 7 0 ...
14,487
1 9 7 1 ... 612,167
19727..
13,151
19738. . 14,378
1 9 7 4 ...
15,883

Reserve
position
in
IMF

Gold stock
SDR’s 3

Treasury

14,912
15,460
15,893
15,890
15,840
15,883

11,652
11,652
11,652
11,652
11,652
11,652

11,567
11,567
11,567
11,567
11,567
11,652

12
224
246
193
43
5

1,021
1,384
1,713
1,739
1,816
1,852

2,227
2,200
2,282
2,306
2,329
2,374

15,948
16,132
16,256
16,183
May. . . .
16,280
16,242
Ju n e.. . .
July___ 9 16,086

11,635
11,621
11,620
11,620
11,620
11,620
11,620

11,635
11,621
11,620
11.620
11,620
11,620
11,620

2
2
19
2
4
25
2

1,908
2,065
2,194
2,168
2,218
2,179
9 2,135

2,403
2,444
2,423
2,393
2,438
2,418
9 2,329

1974
July___
Aug. . .
Sept....
O ct... .
N ov....
Dec__
1975—

851
1,100
1,958
2,166
2,374

1 Includes (a) gold sold to the United States by the IM F with the right
o f repurchase, and (b) gold deposited by the IMF to mitigate the impact
on the U.S. gold stock of foreign purchases for the purpose of making
gold subscriptions to the IM F under quota increases. For corresponding
liabilities, see Table 5.
2 Includes gold in Exchange Stabilization Fund.
3 Includes allocations by the IMF of Special Drawing Rights 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.
4 For holdings of F.R. Banks only, see p. A-9.
5 Includes gain of $67 million resulting from revaluation of the German
mark in Oct. 1969, of which $13 million represents gain on mark holdings
at time of revaluation.
6 Includes $28 million increase in dollar value of foreign currencies
revalued to reflect market exchange rates as of Dec. 31, 1971.
7 Total reserve assets include an increase of $1,016 million resulting
from change in par value of the U.S. dollar on May 8, 1972; of which,

NOTES TO TABLE 1 ON OPPOSITE PAGE:
1 Adjusted to balance of payments basis; excludes exports under U.S.
military agency sales contracts, and imports of U.S. military agencies.
2 Fees and royalities from U.S. direct investments abroad or from
foreign direct investments in the United States are excluded from invest­
ment income and included in ‘ Other services.”
3 Includes special military shipments to Israel that are excluded from the
“ net exports of goods and services” in the national income and products
(GNP) accounts of the United States.
4 Includes under U.S. Government grants $2 billion equivalent, rep­




Total2

Con­
vertible
foreign
curren­
cies4

End of
month

Feb........

Total

Reserve
position
in
IMF

SDR’s 3

total gold stock is $828 million (Treasury gold stock $822 million), reserve
position in IMF $33 million, and SDR’s $155 million.
8 Total reserve assets include an increase of $1,436 million resulting
from change in par value of the U.S. dollar on Oct. 18, 1973; of which,
total gold stock is $1,165 million (Treas. gold stock $1,157 million)
reserve position in IMF $54 million, and SDR’s $217 million.
9 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 are also valued on this basis beginning July 1974. At valua­
tion used prior to July 1974 (SDR 1 = $1.20635) SDR holdings at end
of July amounted to $2,381 million, reserve position in IMF, $2,167
million, and total U.S. reserve assets, $16,170.
N o t e . —See Table 20 for gold held under earmark at F.R. Banks for
foreign and international accounts. Gold under earmark is not included
in the gold stock of the United States.

resenting the refinancing of economic assistance loans to India; a cor­
responding reduction of credits is shown in line 16.
5 Includes some short-term U.S. Govt, assets.
6 Includes changes in long-term liabilities reported by banks in the
United States and in investments by foreign official agencies in debt
securities of U.S. Federally-sponsored agencies and U.S. corporations.
N o t e . —Data are from U.S. Department of Commerce, Bureau of Eco­
nomic Analysis. Details may not add to totals because of rounding.

A 60

GOLD RESERVES □ AUGUST 1975
4. GOLD RESERVES OF CENTRAL BANKS AND GOVERNMENTS
(In millions of dollars; valued at $35 per fine ounce through Apr. 1972, at $38 from May 1972-Sept. 1973, and at $42.22 thereafter)
Esti­
mated
total
world1

Intl.
Mone­
tary
Fund

United
States

Esti­
mated
rest of
world

Algeria

Argen­
tina

1970..........................
1971..........................
1972..........................
1973..........................

41,275
41,160
44,890
49,850

4,339
4,732
5,830
6.478

11,072
10,206
10,487
11,652

25,865
26,220
28,575
31,720

191
192
208
231

140
90
152
169

239
259
281
311

714
729
792
881

1,470
1,544
1,638
1,781

791
792
834
927

82
80
87
97

64
64
69
77

85
85
92
103

1974—June..............
July...............

49,835

6.478
6.478
6.478
6.478
6.478
6.478
6.478

11.652
11.652
11.652
11.652
11.652
11.652
11.652

31,705

231
231
231
231
231
231
231

169
169
169
169
169
169
169

312
312
312
312
312
312
312

882
882
882
882
882
882
882

1.781
1.781
1.781
1.781
1.781
1.781
1.781

927
927
927
927
927
927
927

97
97
97
97
97
97
97

77
76
76
76
76
76
76

103
103
103
103
103
103
103

6.478
6.478
6.478
6.478
6.478
6.478

11,635
11,621
11,620
11,620
11,620
11,620

231
231
231
231
231
231

169
169
169
169

312
312
312
312
312
312

882
882
882
882
882
882

1.781
1.781
1.781
1.781
1.781
1.781

927
927
927
927
927
927

97
97
97
97
97
97

76
76
76
76
76
76

Ger­
many,
Fed.
Rep. of

Greece

Japan

Kuwait

Libya

Mexi­
co

Nether­
lands

End of
period

49,830
Dec................
1975—Jan.................
Feb................

End of
period

49,790
p 49,770

France

31,700
31,660
p 31,670

India

Iran

Iraq

Aus­
tralia

Italy

Aus­
tria

Bel­
gium

Canada

Leb­
anon

China,
Rep. of
(Taiwan)

Den­
mark

Egypt

1970..........................
1971..........................
1972..........................
1973..........................

3,532
3,523
3,826
4.261

3,980
4,077
4,459
4.966

117
98
133
148

243
243
264
293

131
131
142
159

144
144
156
173

2,887
2,884
3,130
3.483

532
679
801
891

86
87
94
120

288
322
350
388

85
85
93
103

176
184
188
196

1,787
1,909
2,059
2.294

1974—June..............
July...............
Aug...............
Sept...............
Oct.................
Nov...............
Dec................

4.262
4.262
4.262
4.262
4.262
4.262
4.262

4.966
4.966
4.966
4.966
4.966
4.966
4.966

150
150
150
150
150
150
150

293
293
293
293
293
293
293

159
158
158
158
158
158
158

173
173
173
173
173
173
173

3.483
3.483
3,483
3.483
3.483
3.483
3.483

891
891
891
891
891
891
891

130
130
130
130
138
138
148

389
389
389
389
389
389
389

103
105
107
103
103
103
103

154
154
154
154
154
154
154

2.294
2.294
2.294
2.294
2.294
2.294
2.294

1975—Jan.................
Feb................
Mar...............
Apr................
May..............
Junep ............

4.262
4.262
4.262
4.262
4.262
4.262

4.966
4.966
4.966
4.966
4.966
4.966

150
150
150
150
150
150

293
293
293
293

158
158
158
158
158
158

173
173
173
173
173

3.483
3.483
3.483
3.483
3.483
3.483

891
891
891
891
891
891

140
140
154
154
175
154

389
389
389
389
389
389

103
103
103
103
103
103

154
154

2.294
2.294
2.294
2.294
2.294
2.294

Portu­
gal

Saudi
Arabia

South
Africa

Thai­
land

Turkey

United
King­
dom

End of
period

Paki­
stan

Spain

Sweden Switzer­
land

Uru­
guay

Vene­
zuela

Bank
for Intl.
Settle­
ments2

1970..........................
1971..........................
1972..........................
1973..........................

54
55
60
67

902
921
1,021
1,163

119
108
117
129

666
410
681
802

498
498
541
602

200
200
217
244

2,732
2,909
3,158
3,513

92
82
89
99

126
130
136
151

1,349
775
800
886

162
148
133
148

384
391
425
472

-2 8 2
310
218
235

1974—June..............
July...............
Aug...............
Sept...............
Oct.................
Nov...............
Dec................

67
67
67
67
67
67
67

1,180
1,180
1,180
1,180
1,180
1,180
1,180

129
129
129
129
129
129
129

781
788
778
778
786
774
771

602
602
602
602
602
602
602

244
244
244
244
244
244
244

3.513
3.513
3.513
3.513
3,513
3.513
3.513

99
99
99
99
99
99
99

151
151
151
151
151
151
151

886
886
886
886
886
886
886

148
148
148
148
148
148
148

472
472
472
472
472
472
472

259
259
255
259
271
251
250

1975—Jan.................
Feb................
Mar...............
Apr................
M ay..............
June**............

67
67
67
67
67
67

1.175
1.175
1.175
1.175

129
129
129
129
129
129

764
759
755
747
742
744

602
602
602
602
602

244
244
244
244
244
244

3,513
3,513
3.513
3.513
3.513
3.513

99
99
99
99
99
99

151
151
151
151
151
151

886
886
886

148
148
148
148

472
472
472
472
472
472

265
272
259
260
239
262

i Includes reported or estimated gold holdings of international and
regional organizations, central banks and govts, of countries listed in
this table, and also of a number not shown separately here, and gold to be
distributed by the Tripartite Commission for the Restitution of Monetary
G old; excludes holdings of the U.S.S.R., other Eastern European coun­
tries, and China Mainland.




The figures included for the Bank for International Settlements are
the Bank’s gold assets net of gold deposit liabilities. This procedure
avoids the overstatement of total world gold reserves since most of the
gold deposited with the BIS is included in the gold reserves of individual
countries.
2 Net gold assets of BIS, i.e., gold in bars and coins and other gold
assets minus gold deposit liabilities.

AUGUST 1975 □ INTL. CAPITAL TRANSACTIONS OF THE U.S.

A 61

5. U.S. LIABILITIES TO FOREIGN OFFICIAL INSTITUTIONS, AND LIQUID
LIABILITIES TO ALL OTHER FOREIGNERS
(In millions o f dollars)

Liabilities to foreign countries

End
of
period

Total

Liquid
liabili­
ties to
IM F
arising
from
gold
trans­
actions 1

Official institutions2

Total

Short­
term
liabili­
ties re­
ported
by
banks
in
U.S.

Liquid liabilities to other
foreigners

Market­
Non­
able
market­
able U.S.
U.S.
Treas.
Treas.
bonds
bonds
and
and
notes4
notes3

1963..............

26,394

800

14,425

12,467

1,183

766

19649............

/29,313
\29,364

800
800

15,790
15.786

13,224
13,220

1.125
1.125

1.283
1.283

Other
readily
market­
able
liabili­
ties5

158
158

Liquid
liabili­
ties
to com­
mercial
banks
abroad6

Total

Short­
term
liabili­
ties re­
ported
by
banks
in
U.S.

Market­
able
U.S.
Treas.
bonds
and
notes3,7

Liquid
liabili­
ties to
non­
mone­
tary
inti,
and re­
gional
organi­
zations 8

5,817

3,387

3,046

341

1,965

7,271
7,303

3,730
3,753

3,354
3,377

376
376

1.722
1.722

1965'............

29,568

834

15,825

13,066

1,105

1.534

120

7,419

4,059

3,587

472

1,431

19669r ..........

J31,144
131,019

1,011
1,011

14,840
14,895

12,484
12,539

860
860

583
583

913
913

10,116
9,936

4.271
4.272

3.743
3.744

528
528

906
905

19679............

J35,819
135,667

1.033
1.033

18,201
18,194

14.034
14,027

908
908

1.452
1.452

1.807
1.807

11,209
11,085

4,685
4,678

4.127
4,120

558
558

691
677

19689............

(38,687
138,473

1.030
1.030

17,407
17,340

11.318
11.318

529
462

3.219
3.219

2.341
2.341

14.472
14.472

5,053
4,909

4.444
4.444

609
465

725
722

19699............

9/45 755
\45; 914

1,109 1015,975
1,019
15,998

11,054
11,077

346
346

10 3,070
3,070

1.505
1.505

23,638
23,645

4,464
4,589

3,939
4,064

525
525

659
663

1970—Dec. .

/47,009
146,960

566
566

23.786
23,775

19.333
19.333

306
295

3.452
3.452

695
695

17,137
17,169

4,676
4,604

4,029
4,039

647
565

844
846

1971—Dec. n

J67,681
167,808

544
544

51,209
50,651

39,679
39,018

1.955
1.955

9,431
9.534

144
144

10,262
10,949

4.138
4,141

3,691
3,694

447
447

1,528
1,523

1972—D ec...

82,862

61,526

40,000

5,236

15,747

543

14,666

5,043

4,618

425

1,627

1973—D ec...

92,443

66,814

43,923

5,701

15,529

1,661

17,694

5,932

5,502

430

2,003

1974—June..
July...
Aug...
Sept...
O ct.. .
Nov.r.
Dec.r .

104,059
107,116
109,991
110.761
112,083
115.761
119,024

70,030
71,117
71,029
72,716
73,822
75,184
76,623

47,465
48,455
48,440
50,149
50,921
51,858
53.035

5.013
5.013
4.940
4.880
4.880
4,906
5,059

15.985
15.985
15.985
15.985
16.196
16.196
16.196

1,567
1.664
1.664
1,702
1,825
2,224
2,333

25,119
26,816
29,373
28,045
28,071
29,770
30,330

7.139
7,312
7,494
8,010
8,070
8,336
8,783

6,776
6,935
7.128
7,617
7,639
7,855
8,285

363
377
366
393
431
481
498

1,771
1,871
2,095
1,990
2,120
2,471
3,288

1975—Ja n ....
Feb.. .
M ar...
A pr...
May®.
June®.

118,191
119,528
120,163
121,217
121,591
121,637

75,918
78,625
79,176
79,047
79,733
80,430

51,824
54,200
53,696
53,521
52,367
51,814

5,177
5,359
6,003
5.941
6,064
6,119

16.324
16.324
16.324
16,365
17,925
19,027

2,593
2,742
3,153
3,220
3,377
3,470

29,429
27,649
27,841
29,312
28.625
28.626

8,692
9,050
9,002
8,806
9,024
9,096

8,184
8,440
8,394
8,179
8,428
8,469

508
610
608
627
596
627

4,152
4,205
4,144
4,052
4,210
3,485

1 Includes (a) liability on gold deposited by the IM F to mitigate the
impact on the U.S. gold stock of foreign purchases for gold subscriptions
to the IM F under quota increases, and (b) U.S. Treasury obligations at
cost value and funds awaiting investment obtained from proceeds of sales
of gold by the IMF to the United States to acquire income-earning assets.
2 Includes BIS and European Fund.
3 Derived by applying reported transactions to benchmark data;
breakdown of transactions by type of holder estimated for 1963.
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 dollars to commercial banks
abroad and short-term liabilities payable in foreign currencies to commer­
cial banks abroad and to other foreigners.
7 Includes marketable U.S. Treasury bonds and notes held by commer­
cial banks abroad.
8 Principally the International Bank for Reconstruction and Develop­
ment and the Inter-American and Asian Development Banks.
9 Data on the 2 lines shown for this date differ because of changes
in reporting coverage. Figures on first line are comparable with those
shown for the preceding date; figures on second line are comparable with
those shown for the following date.




10 Includes $101 million increase in dollar value of foreign currency
liabilities resulting from revaluation of the German mark in Oct. 1969.
11 Data on the second line differ from those on first line because cer­
tain accounts previously classified as official institutions are included
with banks; a number of reporting banks are included in the series for
the first time; and U.S. Treasury securities payable in foreign currencies
issued to official institutions of foreign countries have been increased in
value to reflect market exchange rates as of Dec. 31, 1971.
N o t e . —Based on Treasury Dept, data and on data reported to the
Treasury Dept, by banks and brokers in the United States. Data correspond
generally to statistics following in this section, except for the exclusion
of nonmarketable, nonconvertible U.S. Treasury notes issued to foreign
official nonreserve agencies, the inclusion of investments by foreign
official reserve agencies in debt securities of U.S. Federally-sponsored
agencies and U.S. corporations, and minor rounding differences. Table
excludes IMF holdings of dollars, and holdings of U.S. Treasury ietters
of credit and nonnegotiable, non-interest-bearing special U.S. notes held
by other international and regional organizations.

A 62

INTL. CAPITAL TRANSACTIONS OF THE U.S. □ AUGUST 1975
6. U.S. LIABILITIES TO OFFICIAL INSTITUTIONS
OF FOREIGN COUNTRIES, BY AREA
(Amounts outstanding; in millions of dollars)
Total
foreign
countries

Western
Europe1

197 1
197 2
197 3

50,651
61,526
66,814

30,134
34,197
45,717

3,980
4,279
3,853

1,429
1,733
2,544

13,823
17,577
10,887

415
777
788

870
2,963
3,025

1974—June.
July. .
Aug..
Sept..
O ct.. .
Nov..
Dec..

70,030
71,117
71,029
72,716
73,822
75,184
76,623

43,200
43,002
42,292
42,649
43,006
43,178
44,150

4,201
4,125
3,953
3,819
3,805
3,705
3,662

4,022
3,951
4,157
4,445
4,046
3,768
4,419

14,012
15,235
15.554
16,299
17,329
18,673
18,604

1,854
2,055
2,272
2,850
2,947
3,204
3,161

2,741
2,749
2,801
2,654
2,689
2,656
2,627

1975—Jan.. .
Feb..
Mar..
A pr..
May*
June*

75,918
78,625
79,176
79,047
79,733
80,430

43,289
44,706
45,823
45,025
45,237
45,173

3,621
3,616
3,546
3,251
3,101
3,008

3,659
4,223
4,390
4,506
4,605
4,723

19.555
20,274
19,396
20,062
20,425
20,457

3,232
3,356
3,433
3,493
3,448
3,800

2,562
2,450
2,588
2,710
2,917
3,269

End of period

1 Includes Bank for International Settlements and European Fund.
2 Includes countries in Oceania and Eastern Europe, and Western Euro­
pean dependencies in Latin America.
N o t e . —Data represent short- and long-term liabilities to the official
nstitutions of foreign countries, as reported by banks in the United States;

Latin
American
republics

Canada

Asia

Other
countries2

Africa

foreign official holdings of marketable and nonmarketable U.S. Treasury
securities with an original maturity of more than 1 year, except for non­
marketable notes issued to foreign official nonreserve agencies; and in­
vestments by foreign official reserve agencies in debt securities of U.S.
Federally-sponsored agencies and U.S. corporations.

7. SHORT-TERM LIABILITIES TO FOREIGNERS REPORTED BY BANKS
IN THE UNITED STATES, BY TYPE
(Amounts outstanding; in millions of dollars)
To nonmonetary international
and regional organizations 6

To all foreigners
Payable in dollars
End of period

Total i

Deposits
Total

Demand

U.S.
Treasury
bills and
Time2 certifi­
cates 3

Other
short­
term
liab. 4

Payable
in
foreign
cur­
rencies

197 1
197 2
197 3

55,428
60,696
69,074

55,036
60,200
68,477

6,459
8,290
11,310

4,217
5,603
6,882

33,025
31,850
31,886

11,335
14,457
18,399

392
496
597

1974—June..
July..
Aug..
Sept..
Oct...
Nov..
Dec..,

81,014
83,951
86,863
87,710
88,628
91,816
94,815

80,222
83,285
86,117
87,015
87,909
91,072
94,049

12,856
12,222
11,841
12,769
11,228
12,860
14,054

8,253
8,643
9,091
9,240
9,807
9,550
10,089

34,038
34,178
33,179
33,467
34,187
35,212
35,662

25,074
28,241
32,006
31,539
32,686
33,450
34,244

1975—Jan...
Feb...
M ar..
A pr..
May*
June*

93,350
94,245
93,404
94,604
93,259
92,350

92,630
93,511
92,722
93,862
92,594
91,767

12,295
12,139
12,324
11,699
11,924
12,602

10,157
10,322
10,143
10,390
10,368
10,453

38,108
40,428
40,094
40,424
40,628
38,278

32,069
30,622
30,161
31,349
29,674
30,434

For notes see opposite page.




IMF
gold
invest­
m ent5

Deposits

Total

U.S.
Treasury
bills and
certifi­
Demand Time 2
cates

Other
short­
term
liab. 7

1,367
1,412
1,955

73
86
101

192
202
83

210
326
296

892
799
1,474

792
666
746
696
719
744
766

1,653
1,745
1,921
1,900
1,997
2,333
3,165

106
121
81
128
125
128
139

66
66
68
69
89
89
105

91
51
146
75
93
285
497

1,390
1,508
1,627
1,629
1,690
1,830
2,424

721
733
682
742
665
584

3,911
3,955
3,473
3,592
3,839
3,442

123
118
189
99
114
108

104
95
116
126
133
133

1,234
1,260
777
781
1,994
996

2,450
2,482
2,391
2,585
1,598
2,205

400

AUGUST 1975 □ INTL. CAPITAL TRANSACTIONS OF THE U.S.

A 63

7. SHORT-TERM LIABILITIES TO FOREIGNERS REPORTED BY BANKS
IN THE UNITED STATES, BY TYPE— Continued
(Amounts outstanding; in millions of dollars)
Total to official, banks and other foreigners
Payable in dollars
End of period

Total

Deposits
Demand

Time 2

U.S.
Treasury
bills and
certifi­
cates 3

Other
short­
term
liab.4

To official institutions 8
Payable
in
foreign
cur­
rencies

Payable in dollars
Total

Deposits
Demand

Time 2

U.S.
Treasury
bills and
certifi­
cates 3

Payable
Other
in
short­ foreign
term currencies
liab.7

1971........................
1972.......................
1973........................

53,661
59,284
67,119

6,386
8,204
11,209

4,025
5,401
6,799

32,415
31,523
31,590

10,443
13,659
16,925

392
496
597

39,018
40,000
43,923

1,327
1,591
2,125

2,039
2,880
3,911

32,311
31,453
31,511

3,177
3,905
6,248

165
171
127

1974—June............
July.............
Aug.............
Sept.............
Oct..............
Nov.............
Dec.............

79,360
82,206
84,941
85,811
86,631
89,483
91,650

12,750
12,102
11,760
12,641
11,104
12,732
13,915

8,187
8,578
9,023
9,171
9,718
9,461
9,984

33,947
34,128
33,033
33,392
34,094
34,927
35,165

23,684
26,733
30,379
29,910
30,996
31,620
31,821

792
666
746
696
719
744
766

47,465
48,455
48,440
50,149
50,921
51,858
53,035

2,643
2,562
2,474
2,825
2,168
2,472
2,951

4,277
4,445
4,429
4,282
4,400
4,058
4,257

33,745
33,749
32,687
32,955
33,634
34,467
34,656

6,673
7,571
8,722
9,960
10,591
10,734
11,044

127
127
127
127
127
127
127

1975—Jan..............
Feb..............
Mar.............
Apr.............
May*..........
June*..........

89,439
90,289
89,931
91,012
89,420
88,909

12,172
12,021
12,135
11,600
11,810
12,493

10,053
10,226
10,027
10,264
10,236
10,321

36,874
39,169
39,316
39,643
38,634
37,282

29,619
28,141
27,771
28,764
28,076
28,229

721
733
682
742
665
584

51,824
54,200
53,696
53,521
52,367
51,814

2,185
2,058
2,323
2,147
2,175
2,564

4,296
4,306
4,303
4,193
4,331
4,243

36,531
38,840
39,015
39,316
38,372
37,007

8,813
8,996
8,054
7,864
7,489
8,000

To other foreigners

To banks9

To banks
and other
foreigners

Payable in dollars
End of period

Total

Deposits
Total

Demand

Time 2

U.S.
Treasury
bills and
certifi­
cates

Other
short­
term
liab.4

Payable in
Deposits
Total

Demand

Time 2

U.S.
Treasury
bills and
certifi­
cates

Other
short­
term
liab.7

foreign
cur­
rencies

1971........................
1972.......................
1973.......................

14,643
19,284
23,196

10,721
14,340
17,224

3,399
4,658
6,941

320
405
529

8
5
11

6,995
9,272
9,743

3,694
4,618
5,502

1,660
1,955
2,143

1,666
2,116
2,359

96
65
68

271
481
933

228
325
469

1974—June............
July.............
Aug.............
Sept.............
Oct..............
Nov.............
Dec.............

31,895
33,752
36,502
35,661
35,710
37,626
38,615

24,454
26,277
28,754
27,476
27,492
29,154
29,691

7,689
7,105
6,890
7,096
6,361
7,622
8,253

996
1,165
1,444
1,625
1,896
1,795
1,931

95
204
200
258
268
253
232

15,675
17,803
20,220
18,497
18,967
19,484
19,275

6,776
6,936
7,129
7,617
7,626
7,855
8,285

2,418
2,435
2,396
2,721
2,574
2,638
2,710

2,915
2,967
3,150
3,264
3,422
3,608
3,796

107
175
145
179
193
207
277

1,336
1,359
1,437
1,454
1,438
1,402
1,502

665
539
618
568
591
617
639

1975—Jan..............
Feb..............
Mar.............
Apr.............
May*..........
June*..........

37,614
36,090
36,235
37,492
37,053
37,095

28,710
26,916
27,160
28,571
27,961
28,042

7,362
7,142
7,072
6,897
6,857
7,075

1,998
2,048
1,808
2,102
1,820
1,948

158
129
101
107
93
77

19,193
17,596
18,179
19,465
19,190
18,943

8,184
8,441
8,394
8,179
8,428
8,469

2,625
2,820
2,740
2,556
2,777
2,855

3,760
3,872
3,916
3,969
4,084
4,129

186
200
200
220
168
198

1,613
1,548
1,537
1,434
1,398
1,286

721
733
682
742
665
584

1 Data exclude “holdings of dollars” of the IMF.
2 Excludes negotiable time certificates of deposit, which are included
in “ Other short-term liabilities.”
3 Includes nonmarketable certificates of indebtedness and Treasury
bills issued to official institutions of foreign countries.
4 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, bankers’ acceptances, commercial paper, and negotiable
time certificates of deposit.
5 U.S. Treasury bills and certificates obtained from proceeds of sales of
gold by the IM F to the United States to acquire income-earning assets.
Upon termination of investment, the same quantity of gold was reac­
quired by the IMF.
6 Principally the International Bank for Reconstruction and Develop­
ment and the Inter-American and Asian Development Banks.
Includes difference between cost value and face value of securities in
IM F gold investment account.




7 Principally bankers’ acceptances, commercial paper, and negotiable
time certificates of deposit.
8 Foreign central banks and foreign central govts, and their agencies,
and Bank for International Settlements and European Fund.
9 Excludes central banks, which are included in “Official institutions.”
N o t e . —“Short term” refers to obligations payable on demand or having
an original maturity of 1 year or less. For data on long-term liabilities
reported by banks, see Table 9. Data exclude the holdings of dollars
of the International Monetary Fund; these obligations to the IMF consti­
tute contingent liabilities, since they represent essentially the amount of
dollars available for drawings from the IM F by other member countries.
Data exclude also U.S. Treasury letters of credit and nonnegotiable, noninterest-bearing special U.S. notes held by the Inter-American Develop­
ment Bank and the International Development Association.

INTL. CAPITAL TRANSACTIONS OF THE U.S. □ AUGUST 1975

A 64

8. SHORT-TERM LIABILITIES TO FOREIGNERS REPORTED BY BANKS
IN THE UNITED STATES, BY COUNTRY
(End of period. Amounts outstanding; in millions of dollars)

Area and country

1974

1973

1975

Sept.

Oct.

Nov.

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

597
1,933
268
219
3,574
9,337
293
3,138
2,498
1,023
435
377
1,096
8,393
100
8,714
151
3,122
40
149

568
2,047
285
223
3,933
8,623
255
2,748
3,009
1,131
411
347
1,071
8,974
121
7,570
136
3,263
44
136

557
2,295
338
262
3,835
9.102
213
2,192
3,177
1,181
338
332
1.103
9,378
102
8,186
105
3,432
33
140

607
2,506
369
266
4,287
9,420
248
2,617
3,234
1,040
310
382
1,138
10,007
152
7,548
183
4,051
82
206

40,742

45,456

44,896

46,300

Canada..................................................

3,627

3,754

4,226

3,725

Latin America:
Argentina..........................................
B aham as..........................................
Brazil................................................
Chile................................................ .
Colombia..........................................
Cuba................................................ .
Mexico..............................................
P anam a............................................
P eru................................................. ,
Uruguay..........................................
Venezuela........................................
Other Latin American republics...,
Netherlands Antilles and Surinam.
Other Latin America......................

924
852
860
158
247
7
1,296
282
135
120
1,468
884
71
359

1,105
1,232
893
266
293
7
1,647
511
182
120
3,217
1,214
123
553

1,017
1,691
894
270
292
6
1,731
484
177
128
2,992
1,113
138
508

7,664

11,361

38
757
372
85
133
327
6,967
195
515
247
1,202

Dec.
Europe:
Austria......................................................
Belgium-Luxembourg..............................
Denm ark..................................................
Finland......................................................
France.......................................................
Germany...................................................
Greece.......................................................
Italy...........................................................
Netherlands..............................................
Norway.....................................................
Portugal....................................................
Spain.........................................................
Sweden......................................................
Switzerland...............................................
Turkey.......................................................
United Kingdom .....................................
Yugoslavia................................................
Other Western Europe1..........................
U.S.S.R......................................................
Other Eastern Europe.............................
Total.

Total.
Asia:
China, People’s Rep. of (China Mainland)
China, Republic of (Taiwan)..............
Hong Kong..........................................
India.................................................... .
Indonesia..............................................
Israel.....................................................
Jap an ....................................................
K orea.................................................. .
Philippines...........................................
Thailand..............................................
O ther...................................................
Total.
Africa:
Egypt.............
Morocco.......
South Africa.
Zaire..............
Other.............
Total.
Other countries:
Australia
All other....... .
Total...................
Total foreign countries.
International and regional:
International2...................
Latin American regional..
Other regional3.................

Dec.

Jan.

Feb.

Mar.

Apr.

May®

597
2,391
369
204
4,206
9,948
253
2,101
3,208
874
310
379
1,132
9,601
169
6,660
187
3,128
65
172

624
2,647
324
204
4,035
10,801
242
2,260
3,242
826
303
320
1,215
9,453
131
6,205
168
2,859
59
120

599
2,539
370
202
4,226
11,235
192
2,449
3,414
843
288
358
1,209
8,862
243
7,050
158
2,641
35
218

629
2,810
340
212
4,600
10,229
202
2,498
3,302
827
247
361
1,477
8,807
103
7,065
122
2,516
34
123

627
2,875
323
181
4,982
8,203
273
2,157
3,351
846
267
341
1,697
8,587
87
7,006
126
2,467
61
148

627
3,070
355
365
5,397
6.461
254
2,298
3,532
945
264
362
1,847
8,471
124
6,416
83
2.462
62
370

48,655

45,953

46,037

47,130

46,503

44,605

43,768

3,503

3,405

3,789

3,456

3,955

3,953

3,620

938
1,747
952
297
305
7
1,746
474
183
140
2,921
1,176
135
839

886
1,452
1,034
276
305
7
1,770
488
272
147
3,413
1,316
158
515

900
2,161
859
284
319
6
1,747
500
256
152
2,918
1,211
155
892

894
2,050
927
281
317
6
1,734
476
238
164
3,351
1,263
133
468

822
1,755
1,065
258
326
6
1,668
519
225
171
3,501
1,348
143
492

886
2,463
1,077
278
313
6
1,727
656
217
174
3,559
1,401
113
738

964
2,045
984
260
307
6
1,875
513
206
168
3,864
1,353
123
897

989
2,181
1,081
289
400
7
1,823
473
219
154
3,724
1,505
134
983

11,442

11,862

12,038

12,361

12,302

12,300

13,610

13,566

13,961

40
822
621
158
943
217
10,136
304
748
362
4,726

43
797
470
140
1,600
218
10,407
313
726
328
4,832

45
808
551
156
1,363
279
10,891
309
731
333
5,681

50
818
530
261
1,221
386
10,897
384
747
333
5,446

50
977
558
179
1,327
417
10,442
315
702
337
6,003

73
1,015
546
177
1,083
473
10,909
327
642
327
6,136

62
1,037
528
183
497
508
11,390
311
745
455
4,651

63
1,038
543
127
582
490
11,043
345
660
446
4,827

56
999
596
168
279
536
11,109
341
662
342
5,176

65
1,071
598
145
365
470
11,223
361
697
370
4,756

10,839

19,076

19,874

21,147

21,073

21,307

21,708

20,368

20,162

20,262

20,119

35
11
114
87
808

73
79
157
43
2,893

109
73
138
41
2,973

109
59
155
82
3,199

103
38
130
84
,197

105
71
150
66
,272

106
81
188
41
,392

92
65
191
38
3,461

112
66
159
57
3,472

113
75
179
68
3,460

514
75
141
61
3,400

1,056

3,244

3,333

3,604

3,551

3,664

3,809

3,848

3,867

3,895

4,192

3,131
59

2,847
72

2,788
71

2,759
86

2,742
89

2,661
88

2,568
76

2,761
66

2,856
60

3,069
71

3,185
64

3,190

2,918

2,859

2,845

2,831

2,748

2,644

2,828

2,916

3,140

3,249

89,420

88,909

3,600
154
84

3,205
140
97

67,119

85,811

86,631

89,483

91,650

89,439

90,289

89,931

91,012

1,627
272
57

1,534
261
104

1,665
232
100

2,049
213
70

2,894
202
69

3,636
226
50

3,677
222
57

3,222
207
44

3,291
211
90

June®

Total............

1,955

1,900

1,997

2,333

3,165

3,911

3,955

3,473

3,592

3,839

3,442

Grand to tal.

69,074

87,710

88,628

91,816

94,815

93,350

94,245

93,404

94,604

93,259

92,350

For notes see opposite page.




AUGUST 1975 □ INTL. CAPITAL TRANSACTIONS OF THE U.S.

A 65

8. SHORT-TERM LIABILITIES TO FOREIGNERS REPORTED BY BANKS
IN THE UNITED STATES, BY COUNTRY— Continued
(End of period. Amounts outstanding; in millions of dollars)
Supplementary data4
1974

1973
Area and country

1973

1975

1974

1975

Area and country

Apr.

Dec.

Apr.

Dec.

Apr.

Other Western Europe:
Cyprus..................................... .
Iceland......................................
Ireland, Rep. o f........................

9
12
22

19
8
62

10
11
53

7
21
29

17
20
29

Other Latin American republics:
Bolivia.......................................
Costa Rica............................... .
Dominican Republic................
Ecuador.....................................
El Salvador...............................
Guatemala.................................
H aiti...........................................
Honduras..................................
Jam aica.....................................
Nicaragua.................................
Paraguay...................................
Trinidad and Tobago..............

65
75
104
109
86
127
25
64
32
79
26
17

68
86
118
92
90
156
21
56
39
99
29
17

102
88
137
90
129
245
28
71
52
119
40
21

96
117
127
122
129
214
35
88
69
127
46
107

93
120
214
157
144
255
34
92
62
125
38

Other Latin America:
Bermuda....................................
British West Indies...................

127
100

242
109

201
354

107
116

100
610

Other Asia:
Afghanistan...............................
Burma........................................
Cambodia..................................
Jordan........................................

19
17
3
4

22
12
2
6

11
42
4
6

18
65
4
22

19
'30*

1 Includes Bank for International Settlements and European Fund.
2 Data exclude holdings of dollars of the International Monetary Fund.
3 Asian, African, and European regional organizations, except BIS and
European Fund, which are included in “Europe.”

Apr.

Dec.

Other Asia—Cont.:
Laos.................................
Lebanon..........................
Malaysia.........................
Pakistan..........................
Singapore........................
Sri Lanka (Ceylon)........
Vietnam...........................
Oil-producing countries 5

3
55
59
93
53
6
98
486

3
62
58
105
141
13
88
652

Other Africa:
Algeria.........................
Ethiopia (incl. Eritrea)
G hana.........................
Kenya..........................
Liberia.........................
Libya...........................
Nigeria.........................
Southern Rhodesia. . .
Sudan..........................
Tanzania.....................
Tunisia........................
U ganda.......................
Zambia........................

51
75
28
19
31
312
140
1
3
16
11
19
37

111
79
20
23
42
331
78
2
3
12
7
6
22

All other:
New Zealand..............

34

39

Apr.

Dec.

Apr.

3
3
5
68
119
180
40
63
92
108
91
118
165
240
215
13
14
13
98
126
70
1,331 4,640 3,941

110
67
118
95
22
18
20
31
29
39
257
452
736 2,295
1
2
2
4
12
11
17
19
11
13
22
66
33

47

59
76
13
32
33
3
14
21
23
18
36

4 Represent a partial breakdown of the amounts shown in the other
categories (except “Other Eastern Europe”).
5 Includes Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia,
Syria, and United Arab Emirates (Trucial States).

9. LONG-TERM LIABILITIES TO FOREIGNERS REPORTED
BY BANKS IN THE UNITED STATES
(Amounts outstanding; in millions of dollars)

To
inti.
and
regional

Country or area

To foreign countries

End of period

Total

1971..............................
1070 2
1973..............................

902
J1,000
(1,018
1,462

446
562
580
761

457
439
439
700

144
93
93
310

257
259
259
291

56
87
87
100

164
165
165
159

52
63
63
66

30
32
32
245

111
136
136
132

3
1
1
5

87
32
32
78

9
10
10
16

1974—June..................
July...................
Aug....................
Sept...................
Oct.....................
Nov...................
Dec....................

1,635
1,673
1,498
1,367
1,293
1,354
1,285

974
978
1,005
920
849
905
822

661
695
493
447
445
449
464

321
337
136
93
111
112
124

268
284
281
281
263
262
261

73
75
76
73
71
75
79

150
155
153
153
153
152
152

56
56
55
55
43
43
43

220
231
32
32
32
32
32

144
142
141
123
116
116
115

2
2
1
1
1
1
1

77
97
97
70
87
88
101

12
13
13
13
13
17
20

1975—Jan.....................
Feb....................
Mar...................
Apr....................
MayP.................
June..................

1,406
1,441
1,543
1,410
1,446
1,405

846
776
795
626
585
518

560
666
748
784
861
887

223
336
426
462
544
572

266
264
255
253
248
245

71
66
67
68
69
70

150
147
137
135
129
126

42
41
41
41
41
41

26
23
24
24
27
25

118
119
120
121
121
121

1
1
1
1
1
1

200
313
403
439
520
550

21
21
21
22
21
22

Total

Official
institu­
tions

Other
Banks1 foreign­
ers

1 Excludes central banks, which are included with “Official institutions.”




Ger­
many

United
King­
dom

Total
Other
Latin
Europe America

Japan

Other
Asia

All
other
coun­
tries

2 Data on the 2 lines shown for this date differ because of changes in
reporting coverage. Figures on the first line are comparable in coverage
with those shown for the preceding date; figures on the second line are
comparable with those shown for the following date.

A 66

INTL. CAPITAL TRANSACTIONS OF THE U.S. □ AUGUST 1975
10. ESTIMATED FOREIGN HOLDINGS OF MARKETABLE U.S. TREASURY BONDS AND NOTES
(End of period; in millions of dollars)
1974
July

June
Europe:
Belgium-Luxembourg.....................
Sweden.............................................

7
260
34
424
89
5

Eastern Europe...............................

Aug.

9
260
35
426
97
5

9
260
34
439
101
5

Sept.

10
250
34
459
96
5

1975
Oct.

Nov.

Dec.

Jan.

Feb.

Mar.

Apr.

May®

June®

10
250
30
485
102
5

10
276
30
498
98
5

10
251
30
493
97
5

11
252
31
529
89
5

12
252
30
578
83
3

14
252
29
598
283
5

14
252
32
611
300
5

14
251
33
564
301
5

14
252
36
522
301
5

T otal.........................................

819

832

849

854

883

917

885

916

959

1,180

1,211

1,168

1,129

C anada.................................................

849

851

756

706

707

711

713

697

584

588

460

412

412

Latin America:
Latin American republics...............
Other Latin America......................

11
5

11
5

11
5

11
17

11
25

11
62

12
88

11
88

91
148

11
114

11
107

11
100

13
117

Total.........................................

16

16

16

28

36

74

100

99

239

125

119

112

131

Asia:
Japan................................................
Other A sia.......................................

3,498
12

3,497
12

3,498
12

3,497
12

3,497
12

3,498
12

3,498
212

3,498
325

3,496
541

3,496
1,071

3,496
1,121

3,496
1,291

3,496
1,397

T otal.........................................

3,510

3,509

3,510

3,509

3,509

3,509

3,709

3,822

4,037

4,567

4,617

4,787

4,893

Africa...................................................

157

156

151

151

151

151

151

151

151

151

161

181

181

25

25

25

25

25

25

5,376

5,390

5,306

5,273

5,311

5,387

5,557

5,685

5,969

6,611

6,568

6,660

6,746

57
60

51
75

102
71

23
68

71
52

71
67

61
61

180
61

190
59

592
79

383
77

306
65

-8
52

122

240

249

671

460

371

44

5,680 j 5,925

6,218

7,282

7,028

International and regional:
International.....................................
Total..........................................

117

126

173

91

123

138

Grand total...............................

5,493

5,516

5,479

5,364

5,434

5,525

N o t e . —Data represent estimated official and private holdings of marketable U.S. Treasury securities with an original maturity of more than 1

7,030 j 6,790

year, and are based on benchmark surveys of holdings and regular monthly
reports of securities transactions (see Table 14).

11. SHORT-TERM CLAIMS ON FOREIGNERS REPORTED BY BANKS
IN THE UNITED STATES, BY TYPE
(Amounts outstanding; in millions of dollars)
Payable in foreign currencies

Payable in dollars
End of period

Loans to—

Total
Total

Total

Official
institu­
tions

Accept­
Collec­ ances
tions
made
out­ for acct.
Banks1 Others2 stand­ of for­
ing
eigners

Other

Total

Foreign
govt, se­
Deposits curities,
with for­ coml.
eigners and fi­
nance
paper

Other

1971............................. 13,272
/15,471
1972 3
\15,676
1973.............................. 20,723

12,377
14,625
14,830
20,061

3,969
5,674
5,671
7,660

231
163
163
284

2,080
2,975
2,970
4,538

1,658
2,535
2,538
2,838

2,475
3,269
3,276
4,307

4,254
3,204
3,226
4,160

1,679
2,478
2,657
3,935

895
846
846
662

548
441
441
428

173
223
223
119

174
182
182
115

1974—June.................. 32,436
July................... 33,854
Aug................... 35,357
Sept................... 34,451
Oct..................... 34,593
Nov................... 36,784
Dec.................... 38,889

31,479
32,851
34,551
33,533
33,563
35,756
37,680

11,409
10,766
11,549
10,557
10,002
10,968
11,313

390
480
453
528
371
439
382

7,685
6,715
7,750
6,678
6,299
7,102
7,352

3,334
3,571
3,346
3,352
3,332
3,426
3,579

5,107
5,152
5,295
5,245
5,356
5,345
5,637

7,649
9,205
9,481
9,552
10,050
10,717
11,223

7,314
7,729
8,227
8,178
8,155
8,726
9,506

957
1,003
805
918
1,030
1,028
1,210

687
626
461
468
547
515
668

130
207
180
217
243
283
289

141
170
164
233
240
229
253

1975—Jan.....................
Feb....................
Mar...................
Apr....................
May®................
June®................

37,684
38,582
40,889
41,547
43,960
44,375

10,232
10,313
9,626
10,658
11,852
11,318

361
379
310
362
366
457

6,318
6,414
5,682
6,519
7,638
6,834

3,553
3,521
3,634
3,778
3,848
4,026

5,565
5,346
5,415
5,339
5,546
5,345

11,025
11,090
11,341
11,441
10,961
10,639

10,863
11,833
14,507
14,109
15,601
17,074

1,289
1,190
1,162
1,260
1,068
1,240

719
609
626
764
478
591

351
336
290
241
301
335

219
244
246
254
290
314

38,973
39,772
42,052
42,806
45,028
45,616

1 Excludes central banks, which are included with “Official institutions.”
2 Includes international and regional organizations.
3 Data on the 2 lines shown for this date differ because of changes




in reporting coverage. Figures on the first line are comparable in coverage with those shown for the preceding date; figures on the second line
are comparable with those shown for the following date.

AUGUST 1975 □ INTL. CAPITAL TRANSACTIONS OF THE U.S.

A 67

12. SHORT-TERM CLAIMS ON FOREIGNERS REPORTED BY BANKS
IN THE UNITED STATES, BY COUNTRY
(End of period. Amounts outstanding; in millions of dollars)
Area and country

1973

1974

Dec.
Europe:
Belgium-Luxembourg..............................
D enm ark...................................................

Netherlands.............................................
N orw ay.....................................................
Portugal....................................................
Switzerland...............................................
Turkey.......................................................
United Kingdom.....................................
Yugoslavia................................................
U.S.S.R.....................................................

Sept.

11
147
48
108
621
311
35
316
133
72
23
222
153
176
10
1,459
10
25
46
44

Oct.

17
164
51
146
637
342
59
354
130
113
26
253
159
377
15
2,228
28
18
21
102

1975

Nov.

Dec.

Jan.

Feb.

Mar.

Apr.

May*

June?

21
301
59
128
485
332
48
340
176
94
35
227
149
277
15
1,852
24
31
27
105

42
308
45
107
791
438
57
340
183
97
25
201
160
339
14
2,332
28
38
28
86

21
384
46
122
673
589
64
345
348
119
20
196
180
335
15
2,435
22
22
46
131

18
401
54
132
892
390
52
351
195
115
16
184
128
252
23
2,700
38
22
44
124

38
591
53
136
893
435
42
277
210
106
39
166
99
267
17
2,770
18
27
48
100

22
550
41
137
896
387
46
287
187
104
32
150
72
230
19
2,896
16
24
34
110

16
674
53
147
859
399
54
334
157
114
26
234
101
227
37
3,174
28
31
51
113

19
647
49
137
723
389
37
329
221
126
25
251
131
277
30
3,635
39
25
83
117

17
600
64
133
581
426
37
339
218
98
25
235
115
252
40
3,476
31
22
77
118

3,970

5,239

4,724

5,660

6,110

6,130

6,331

6,239

6,831

7,293

6,905

1,955

2,032

2,556

2,517

2,773

2,904

2,643

2,934

2,911

3,096

2,868

499
893
900
151
397
12
1,373
274
178
55
518
493
13
144

695
2,787
1,534
250
665
14
1,706
410
408
47
627
711
64
370

679
3,088
1,476
256
686
13
1,836
405
433
46
557
724
61
693

704
2,978
1,493
291
675
13
1,898
402
486
63
643
810
74
920

720
3,398
1,415
290
713
14
1,972
503
518
63
704
852
62
1,138

783
3,737
1,264
303
706
13
1,898
604
504
75
795
873
45
1,451

808
4,699
1,345
351
679
18
2,004
458
531
86
747
890
39
1,549

869
5,804
1,266
395
695
13
2,116
546
555
104
736
902
39
1,571

958
5,715
1,299
433
710
13
2,236
531
606
116
757
954
36
1,722

1,007
6,997
1,272
422
702
13
2,380
671
590
100
745
960
44
2,218

1,061
8,647
1,184
429
687
13
2,530
527
623
85
789
951
83
1,825

5,900

10,290

10,953

11,450

12,362

13,051

14,202

15,613

16,085

18,121

19,434

31
140
147
16
88
155
6,398
403
181
273
392

9
466
243
17
122
197
12,398
733
342
439
669

7
499
214
19
128
200
11,724
760
347
417
670

5
483
238
16
140
208
12,420
835
325
428
666

4
500
223
14
157
256
12,514
955
372
458
771

18
526
203
19
142
271
11,821
1,116
302
391
739

65
473
184
22
159
284
11,246
1,286
342
374
781

19
500
291
17
145
322
11,600
1,356
353
406
846

11
448
210
21
134
299
11,028
1,503
398
413
1,007

12
434
288
17
119
287
10,603
1,415
455
374
965

9
479
315
20
115
312
10,222
1,523
478
441
907

8,224

15,635

14,986

15,765

16,224

15,545

15,216

15,855

15,472

14,969

14,821

South Africa.............................................

35
5
129
60
158

97
10
243
94
311

93
11
282
107
311

91
12
299
101
291

111
18
329
98
299

106
19
364
31
265

114
15
396
38
291

122
19
413
31
290

142
10
458
37
326

138
12
475
41
351

149
10
498
43
369

Total..................................................

388

755

804

795

855

785

853

875

973

1,018

1,068

243
43

422
76

478
91

492
104

466
99

433
125

431
95

436
99

428
107

440
89

428
81

Latin America:

Chile..........................................................
Cuba..........................................................
Panama.....................................................
Peru...........................................................
Other Latin American republics.............
Netherlands Antilles and Surinam.........
Other Latin America...............................

Asia:
China, People’s Rep. of (China Mainland)
China, Republic of (Taiwan)..................
Hong Kong...............................................
India..........................................................
Israel..........................................................
Jap an........................................................
Korea........................................................
Philippines................................................
Thailand....................... ............................
O ther.........................................................

Africa:
Egypt.........................................................

Other countries:
Australia...................................................

International and regional...........................

286

498

569

597

565

558

526

535

535

528

509

20,723

34,448

34,593

36,783

38,889

38,972

39,771

42,051

42,805

45,026

45,605

1

1

1

1

2

11

38,889

38,973

39,772

42,052

42,806

45,028

45,616

1

2

1

1

20.723

34,451

34,593

36,784

N o t e .— Short-term claims are principally the following items payable
on demand or with a contractual maturity of not more than 1 year: loans
made to, and acceptances made for, foreigners; drafts drawn against
foreigners, where collection is being made by banks and bankers for




their own account or for account of their customers in the United States;
and foreign currency balances held abroad by banks and bankers and
their customers in the United States. Excludes foreign currencies held
by U.S. monetary authorities.

INTL. CAPITAL TRANSACTIONS OF THE U.S. □ AUGUST 1975
13. LONG-TERM CLAIMS ON FOREIGNERS REPORTED BY BANKS
IN THE UNITED STATES
(Amounts outstanding; in millions of dollars)
Type

Country or area

Payable in dollars
End of
period

Total

Loans to—
Other
Banks1 foreign­
ers2

Other
long­
term
claims

Payable
in
foreign
curren­
cies

United
King­
dom

Other
Europe

Latin
Canada America

Japan

Other
Asia

All
other
coun­
tries2

Total

Official
institu­
tions

1971'............... 3,667
J4,954
1972 3
\5,063
1973................. 5,996

3,345
4,539
4,588
5,446

575
833
844
1,160

315
430
430
591

2,455
3,276
3,314
3,694

300
375
435
478

22
40
40
72

130
145
150
148

593
704
703
1,124

228
406
406
490

1,458
1,996
2,020
2,116

246
319
353
251

583
881
918
1,331

429
503
514
536

1974—Ju n e.. . .
July. . . .
Aug.......
Sept.. . .
Oct
N ov.. . .
Dec.......

7,087
7,115
7,055
6,999
7,250
7,251
7,155

6,475
6,502
6,448
6,386
6,571
6,561
6,481

1,622
1,490
1,456
1,419
1,445
1,377
1,331

792
909
913
853
914
933
931

4,061
4,104
4,080
4,113
4,212
4,250
4,219

546
545
539
542
608
618
609

66
67
68
71
71
72
65

222
249
285
266
333
339
329

1,686
1,603
1,545
1,535
1,725
1,652
1,578

496
498
503
543
523
506
486

2,487
2,552
2,527
2,479
2,495
2,574
2,602

244
269
269
247
264
257
258

1,434
1,423
1,416
1,425
1,396
1,392
1,359

518
520
511
505
515
531
542

1975—Jan____
Feb
M ar.. . .
Apr.......
MayP...
June?...

7,262
7,457
7,554
7,583
7,870
7,773

6,624
6,797
6,900
6,896
7,194
7,136

1,368
1,378
1,395
1,239
1,287
1,263

968
1,035
1,063
1,110
1,186
1,213

4,289
4,384
4,442
4,547
4,721
4,660

583
606
598
624
610
559

54
54
55
63
66
77

323
347
357
375
402
389

1,669
1,749
1,769
1,813
1,923
1,885

475
485
485
490
476
446

2,603
2,675
2,695
2,786
2,848
2,849

248
248
247
242
254
264

1,388
1,355
1,409
1,249
1,289
1,261

557
598
592
630
677
678

1 Excludes central banks, which are included with “ Official institutions.”
2 Includes international and regional organizations.
3 Data on the 2 lines shown for this date differ because of changes in

reporting coverage. Figures on the first line are comparable in coverage
with those shown for the preceding date; figures on the second line are
comparable with those shown for the following date.

14. PURCHASES AND SALES BY FOREIGNERS OF LONG-TERM SECURITIES, BY TYPE
(In millions of dolla rs)
Marketable U.S. Treas. bonds and notes1

U.S. corporate
securities2

Foreign stocks

Net purchases or sales

Period
Total

Intl.
and
regional

Pur­
chases

Foreign
Total

Official

57
-165
75

3,258
470
-573

3,281
465
-6 4 2

Net pur­ Pur­
Sales chases or chases
sales

Sales

Net pur­
chases
sales

PurSales

Sales

Net pur­
chases or
sales

2,532
1,729
1,903

2,123
1,554
1,719

409
176
183

Other

1972................. .
1973r...............
I974r...............

3,316
305
-499

1975—Jan.-June?

1,110

-7 8

1,189

1,157

32

9,898

1974—Juner. ..
July r . ..
Aug.r__
Sept.r . . ,
Oct.r . . .
Nov.r . . ,
Dec.r. ..

-101
23
-3 7
-116
70
92
155

-9 7
9
47
-8 2
32
17
-1 6

-3
14
-8 4
-3 3
38
76
171

-7 3
-6 0
25
153

-3
14
-11
27
38
50
17

1,184
1,061
1,410
1,448
1,568
1,400
1,089

1975—Ja n
Feb.......
Mar.......
Apr.......
May*5. ..
June___

245
293
1,063
-2 5 4
3
240

118
9
422
-211
-8 9
-3 2 6

127
285
642
-4 3
92
87

118
182
644
-6 6
123
156

9
102
-3
23
-31
-6 8

1,207
1,704
1,752
1 ,636
1,845
1,754

- 2 3 19,083 15,015
6 18,574 13,810
69 15,796 14,305

1 Excludes nonmarketable U.S. Treasury bonds and notes issued to
official institutions of foreign countries.
2 Includes State and local govt, securities, and securities of U.S. Govt,
agencies and corporations. Also includes issues of new debt securities




Foreign bonds

4,068
4,764
1,492

1,901
1,474
1,045

7,840

2,058

993

3,948

-2 ,9 5 5

857

929

-7 2

923
1,055
1,133
1,183
1,365
1,513
1,245

260
5
277
265
203
-113
-156

74
94
59
72
86
92
101

269
251
214
152
362
170
524

-1 9 4
-158
-155
-8 0
-276
-7 8
-423

207
128
146
146
91
124
117

117
116
117
100
152
102
87

90
12
29
47
-6 2
22
30

897
1,385
1,152
1,394
1,679
1,332

309
318
600
242
166
422

131
118
186
167
172
221

1,207 -1 ,0 7 6
554
-436
647
-461
341
-1 7 4
345
-173
855
-635

147
134
148
155
145
129

156
173
159
141
157
143

-9
-3 9
-11
14
-1 2
-1 5

2,932 -1 ,0 3 1
2,467
-993
3,284 -2 ,2 4 0

sold abroad by U.S. corporations organized to finance direct investments
abroad.
N ote .—Statistics include transactions of international and regional
organizations.

AUGUST 1975 □ INTL. CAPITAL TRANSACTIONS OF THE U.S.

A 69

15. NET PURCHASES OR SALES BY FOREIGNERS OF U.S. CORPORATE STOCKS, BY COUNTRY
(In millions of dollars)
Period

Pur­
chases

Sales

197 2
197 3
1974'...........

14,361
12,767
7,634

12,173
9,978
7,095

2,188
2,790
540

Ger­
many

Net pur­
chases or France
sales (—)

Nether­ Switzer­ United
lands
land
King­
dom

372
439
203

-5 1
2
39

297
339
330

642
686
36

Other
Europe

Total
Europe

137
273
50

1,958
2,104
281

-7 8
99
-6

561
366
-377

Latin
Canada America

Asia Other l

-3 2
4
-3 3

256
577
288

83
9
17

7,427

5,573

1,854

78

80

134

411

329

33

1,065

99

9

679

1974—Ju n e.,
July '.

Aug '.
Septr.
O ctr. .
N ovr.
D ec..,

555
521
590
460
673
604
450

513
510
502
445
695
616
429

42
11
88
15
-2 2
-1 3
21

-1 5
13
19
-9
17
5
13

8
5
18
17
-3 0
1
13

33
39
16
21
9
-2
20

11
-9
15
-6
-3 9
-3 5
-1 0

-1 8
-6 4
-1 0
-3 8
-8 2
-51
-7 6

-3
3
-11
-3
11
4
9

16
-1 3
46
-1 9
-115
-7 7
-3 0

13
10
14
6
3
-2
14

-7
-2
9
4
2
-5
10

19
13
18
23
95
70
27

2
2
*
1
1
1
*

1975—Jan.. .
Feb..,
Mar..
A pr...
May*
June*,

731
1,383
1,148
1.318
1,527
1,321

541
849
913
1,058
1,149
1,063

190
533
236
259
378
258

34
21
12
-1 5
-6
32

15
25
11
23
4
1

8
14
40
26
27
19

42
115
39
44
100
71

-8
147
38
54
59
38

15
9
7
4
9
-1 0

107
331
146
136
193
152

12
20
15
-5
36
21

-1 5
18
-5
2
1
8

84
150
80
121
149
96

2
15
-1
3
-1
-1 9

1975—Jan.-June*

-1

i Includes international and regional organizations.

16. NET PURCHASES OR SALES BY FOREIGNERS OF U.S. CORPORATE BONDS, BY COUNTRY
(In millions of dollars)
Period

Ger­
many

Total

197 2
197 3
1974'...............

Nether­ Switzer­ United
Other
lands
land Kingdom Europe

1,881
1,948
952

336
201
96

74
-1 9
183

135
307
96

367
275
329

315
473
-5 9

Total
Europe

Latin
Canada America

Asia

Other Intl. and
Africa countries
regional

1,303
1,204
672

82
49
50

323
588
632

148
52
-455

151

12

-1 8

66

-149

-8 7

50

726

-5 3 9

1974—J u n e '..,
J u ly ....
Aug '. . .
Sept'. . .
O ct' __
N o v '.. .
Dec '. . . ,

218
-5
190
251
226
-1 0 0
-1 7 6

5
-1
1
1
10
4
1

116
72
1
-1
-1
2
-4

15
2
-1
2
13
-1
1

41
36
29
54
6
-2 0
54

-1 7
-11
-9
-3
-5
-6
5

161
100
21
55
23
-2 3
56

1
1
2
4
18
11
-4

-3
7
199
60
100
399
93

56
-128
-3 6
130
79
-4 8 6
-339

1975—Ja.......... n
F e b .'...
M ar.. . .
Apr.......
M ay*...
June*...

119
-2 6 9
365
-1 7
-2 1 2
164

2
-4
1
1
3
9

-1
-26
-1
8

6
3
10
35
7
5

59
-8 3
23
-9 9
-81
32

5
1
1
-1 3
-3
3

74
-8 0
32
-1 0 0
-7 2
58

14
16
4
5
7
4

152
37
322
81
69
64

-1 2 0
-242
10
-7
-218
38

1975—Jan.-June*

N o t e . —Statistics include State and local govt, 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 di­
rect investments abroad.

17. NET PURCHASES OR SALES BY FOREIGNERS OF
LONG-TERM FOREIGN SECURITIES, BY AREA

18.
FOREIGN CREDIT AND DEBIT
BALANCES IN BROKERAGE ACCOUNTS

(In millions of dollars)

(Amounts outstanding; in millions of dollars)

Period

1972..
1973..
1974'

Total

—622
—818
-2 ,0 5 6

Eu­
rope

Latin
Canada Amer­ Asia
ica

Af­
rica

Other
countries

—90
—532
505
139
—957 -141
- 6 0 -1 ,9 9 7 -5 4 6

—635 —69 —296
—569 —120 —168
-9 3
142
-1 ,5 2 9

-6 6
3
7

29
37
22

Intl.
and
re­
gional

Total
foreign
coun­
tries

1975—
Jan.—
June* -3 ,7 7 7 -1,612 -2,1 6 5

-122

-1,391

-110

-442

21

-105
-1 4 5
-125
-3 4
-3 3 8
-5 6
-3 9 3

3
1
2
12
2
3
-9 5

-107
-147
-127
-4 6
-340
-5 9
-298

-7 5
-6 3
-3 5
-41
-81
-2 1
-2 7

-121
-108
-126
-3 7
-244
-8
-190

-6
-1
-9
5
*
-1 4
-2 5

94
24
42
23
-1 6
-21
-6 7

1
-1
-1
1
-1
2
12

1975—Jan....... -1 ,0 8 5
-4 7 5
Feb.. . .
M a r....
-4 7 3
A pr.. ..
-1 6 0
May*. .
-185
June*. . -1 ,3 9 9

-5 7 2
-1 4 7
-117
-5 7
31
-7 5 0

-5 1 4
-328
-356
-103
-216
-6 4 9

-41
19
-6 6
-5 7
39
-1 7

-405
-159
-175
-6
-168
-478

-6 0
-2 8
-9 4
-9 7
-112
-3
17 -5 9
* -8 8
* -2 9

1974—J u n e .. .
J u l y '...
Aug '. . .
Sept'. . .
O c t'....
N o v ....
Dec.. . .




*
3
1
3
2
3
*

*
20
2
-2
1
*
2
-2
2
2 —127

End of
period

Credit
balances
(due to
foreigners)

Debit
balances
(due from
foreigners)

1972—June...........................
Sept............................
Dec............................

312
286
372

339
336
405

1973—Mar............................
Sept............................
Dec............................

310
316
290
333

364
243
255
231

1974—Mar............................
June...........................
Sept............................
Dec.*.........................

383
354
298
293

225
241
178
193

1975—Mar.*.........................

349

209

N o t e . —Data represent the money credit balances and
money debit balances appearing on the books of reporting
brokers and dealers in the United States, in accounts of
foreigners with them, and in their accounts carried by
foreigners.

A 70

INTL. CAPITAL TRANSACTIONS OF THE U.S. □ AUGUST 1975
19a. ASSETS OF FOREIGN BRANCHES OF U.S. BANKS
(In millions of dollars)
Claims on foreigners

Claims on U.S.
Location and currency form

IN ALL FOREIGN COUNTRIES
Total, all currencies.........................

Payable in U.S. dollars.

IN UNITED KINGDOM
Total, all currencies........

Payable in U.S. dollars.

IN BAHAMAS AND CAYMANS i
Total, all currencies...........................

For notes see p. A-74.



Month-end

Total

Total

Parent
bank

Other

Total

Other
branches
of parent
bank

Other
banks

1972—Dec..
1973—Dec..

78,202
121,866

4,678
5,091

2,113
1,836

2.565 71.304
3,205 111,974

1974—May.
June.
July. ,
Aug..
Sept..
Oct.. ,
Nov..
D ec.'

145,918
147,467
145,058
148.719
147.720
145,906
150,274
151,905

8,031
6,839
6,402
9,366
6,267
4,661
7,751
6,898

5,465
4.158
3,787
6,868
3,622
2,027
5.159
4,464

2.566
2,682
2,614
2,498
2,645
2,634
2,592
2,434

132,377
134,891
132,945
133,473
135,272
135,284
136,442
138,713

24,583
25,120
25,726
26,428
26,322
26,958
28,366
27,559

64,693
64,441
61,949
60,524
61,301
59,617
58,727
60,283

1975—J a n .'. . .
F e b .'. ..
M a r.'...
Apr.......
May?. . .

151,140
151,662
155,204
155,616
156,888

7,029
5,486
5,326
5,831
7,725

4,360
2,882
2,638
3,052
4,888

,669
,604
,688
,779
,837

138,143
140,345
143,750
143,949
143,081

27,894
28,969
28,330
29,195
27,568

58,863
58,794
61,611
60,292
60,325

52,636
79,445

4,419
4,599

2,091
1,848

2,327
2,751

47,444
73,018

1974—M ay..........
June..........
July...........
Aug...........
Sept...........
Oct............
Nov...........
Dec.' ........

100,266
101,704
101,534
105,827
104,345
101,977
105,066
105,969

7,685
6,51“
6,110
9,055
5,990
4,379
7,445
6,602

5,417
4,107
3,738
6,816
3,564
1,970
5,105
4,428

2,268
2,410
2,373
2,239
2,426
2,409
2,340
2,174

1975—Ja n .'. .
Feb.' .
M ar.'.
Apr...
May?.

105,776
104,360
107,519
108,399
111,622

6,706
5,141
5,012
5,466
7,315

Non­
Offi­
bank
cial
for­
insti­
tutions eigners

Other

1,594 22,432
2,693 33,736

2,220
4,802

3,703
3,610
3,689
3,423
3,721
3,849
4,019
4,077

39,398
41,721
41,580
43,098
43,927
44,860
45,330
46,795

5,510
5,736
5,711
5,880
6,181
5,962
6,081
6,294

4,152
4,246
4,407
4,353
4,496

47,234
48,335
49,402
50,109
50,692

5,968
5,832
6,127
5,836
6,082

7,869 26,251
12,799 39,527

1,059 12,264
1,777 18,915

773
1,828

90,066
92,568
92,733
93,893
95.304
94,650
94,581
96,210

16,890
17,478
18,480
19,694
19,413
19,785
20,623
19,688

47,373
47,819
46,422
45,681
46,517
44,832
43,741
45,067

2,841
2,803
2,889
2,780
2,873
3,006
3,192
3,289

22,962
24.467
24,942
25,738
26,501
27,027
27,026
28,166

2,514
2,619
2,691
2,879
3,050
2,948
3,039
3,157

4,318
2,839
2,607
3,009
4,824

2,387 95,989
2,302 96,327
2,405 99,637
2,456 100,231
2,491 101,369

20,448
20,827
19,836
20,993
21,270

43,151
42,672
46,118
45,172
45,398

3,370
3,431
3,604
3,599
3,687

29,020
29,397
30,079
30.467
31,015

3,082
2,891
2,870
2,702
2,938

1972—Dec. .
43,467 2,234
1973—De............. c
61,732
1,789

1,138
738

1,096
1,051

40,214
57,761

606 10,106
735 13,811

1,018
2.183

1974—May.
June.
July..
Aug..
Sept..
Oct..
Nov..
Dec..

71,982
71,305
69,197
70,382
70,965
68,123
69,137
69,804

3,792
3,561
3,046
3,599
2,860
1,325
3,387
3,248

2,969
2,612
2,205
2,858
2,037
502
2,568
2,472

823
949
840
741
774
823
818
776

66,008
65,617
63,974
64,496
65,596
64,462
63,571
64,111

11,759
11,886
12,486
12,790
12,436
12,386
13,122
12,724

37,920
36,468
34,575
33,942
34,959
33,608
32,128
32,701

889
812
718
666
829
887
753
788

15,439
16,452
16,195
17,097
17,372
17,581
17,567
17,898

2.183
2,126
2,177
2,287
2,509
2,336
2,179
2,445

1975—Jan.. .
Feb.. .
M ar...
Apr...
May?.

68,451
67,038
69.654
69,248
68,707

2,633
1,818
1,798
2,017
2,535

1,902
1,023
982
1,126
1,639

731
796
817
891
845

63,527
63,250
65.693
65,330
64,269

12,873
13,246
12,806
13,314
12,491

32,057
31,641
34,260
33,079
32.443

854
848
929
919
920

17,743
17,515
17,699
18,018
18,415

2,291
1,970
2,163
1,902
1,904

1972—Dec..
1973—Dec..

30,257
40,323

2.146
1,642

27,664
37,816

4,326
6,509

17,874
23,899

5,464
7,409

446
865

1974—May.
June.
July. ,
Aug..
Sept..
Oct..
Nov..
Dec..

49.654
49,363
48,158
49,406
50,075
47,968
48,710
49,211

3,693
3,462
2,953
3,507
2,774
1,235
3,277
3.146

44,825
44,774
44,061
44,677
45,960
45,421
44,198
44.693

9,285
9,425
9,932
10,529
10,305
10,234
10,796
10,265

26,994
26,147
24,698
24,512
25,720
25,233
23,551
24,326

8,546
9,203
9,432
9,637
9,937
9,954
9,852
10,102

1,135
1,126
1,138
1,222
1,339
1,312
1,235
1,372

1975—Jan............
Feb...........
Mar...........
Apr...........
May p ........

47,769
46,019
48,939
48,797
48,506

2,542
1,697
1 ,687
1,885
2,404

43,959
43,244
46,039
45,923
45,180

10,421
10,615
10,373
10,995
10,656

23,271
22,575
25,610
24,711
24,018

10,268
10,055
10,057
10,217
10,506

1,267
1,077
1,212
989
922

1972- -Dec..
1973- -Dec..

12,642
23,771

1,486
2,210

214
317

1,272
1,893

10,986
21,041

6,663
12,974

4,322
8,068

170
520

1974— May.
June.
July. ,
Aug..
Sept..
O ct..
Nov..
D ec.'

30,864
31,219
30,403
32,317
30,080
30,071
32,313
31,733

3,302
2,427
2,380
4,624
2,315
2,206
3,299
2,463

1 ,836
981
870
3,153
750
711
1,816
1,081

1,467
1,446
1,510
1,471
1,564
1,495
1,484
1,382

26,817
28,005
27,208
26,914
26,910
27,075
28,130
28,455

17,035
17,643
16,822
16,157
16,014
16,280
17,193
16,854

9,782
10,361
10,386
10,757
10,896
10,795
10,937
11,601

744
787
815
779
856
790
883
815

1975—Ja n .'. ,
F eb .'.
M ar.'.
A p r...
May?.

33,131
33,534
33,793
35,666
38,198

3,223
2,563
2,405
2,587
4,125

1,594
1,072
839
1,006
2,468

1,629
1,491
1,567
1,581
1,657

29,070
30,137
30,671
32,359
33,215

16,864
17,389
17,595
18,967
19,982

12,206
12,748
13,077
13,392
13,233

838
834
716
720
858

1972—Dec..
1973—Dec..

11,504 35,773
19,177 56,368

5,659 23,842
8,773 34.442

AUGUST 1975 □ INTL. CAPITAL TRANSACTIONS OF THE U.S.

A 71

19b. LIABILITIES OF FOREIGN BRANCHES OF U.S. BANKS
(In millions of dollars)
To U.S.
Total

Total

Parent
bank

To foreigners
Other

Total

Other
branches
of parent
bank

Other
banks

Offi­
Non­
cial
bank
for­
insti­
tutions eigners

Other

Month-end

11,121 41,218 8,351 11 432
18,213 65,389 10,330 17 683

2,580 ......... 1972—Dec.
4,641 .........1973—Dec.

131,978
132,328
128,616
132,774
131,016
128,910
131,619
132,990

23,941
24,234
25,313
26,007
26,337
26,619
27,717
26,941

74,193
71,692
66,855
68,772
66,071
62,606
63,596
65,675

12,187
14,388
15,030
16,304
17,488
18,171
19,979
20,185

21
22
21
21
21
21
20
20

657
015
418
690
121
514
327
189

5,665 .........1974—May
6,110
6,312 .....................July
6,527 .....................Aug.
6,723
6,548
6,755
6,933

5,476
5,954
6,557
6,233
6,494

132,775
132,594
133,540
135,485
134,550

27,019
28,185
28,214
30,083
27,486

64,147
63,402
63,419
62,287
64,682

21,683
21,951
22,577
23,236
22,223

19
19
19
19
20

926
057
330
879
158

6,533 ......... 1975—Jan.'
6,507 .....................Feb. »■
6,257
6,088
6,445

847
1,477

2,202
3,550

50,406
73,189

7,955 29,229
12,554 43,641

6,781
7,491

100,714 7,685
102,302 8,414
102,432 9,494
106,909 8,786
106,004 9,294
103,934 9,905
107,427 11,215
107,890 11,437

3,021
3,279
4,160
3,932
4,833
5,650
6,023
5,641

4,664
5,135
5,334
4,853
4,461
4,255
5,192
5,795

89,848
90,359
89,264
94,178
92,630
90,136
92,233
92,503

16,694
17,070
18,438
19,456
19,599
19,481
20,242
19,330

50,848
48,909
45,768
48,394
46,020
42,690
43,147
43,656

9,817
11,630
12,337
13,508
14,533
15,076
16,789
17,444

12
12
12
12
12
12
12
12

490
750
721
821
478
889
054
072

3,181 .........1974—May
3,529
3,675
3,945
4,080
3,893
3,979
3,951

108,190
106,125
109,501
110,405
114,086

11,368
12,063
14,795
13,389
15,292

6,204
6,460
8,660
7,628
9,225

5,164
5,603
6,135
5,760
6,067

93,044
90,426
91,338
93,603
95,195

19,999
20,109
19,880
21,574
21,283

42,854
40,701
41,216
40,996
43,845

18,343
18,708
19,303
19,909
18,928

11
10
10
11
11

848
907
939
123
139

3,778 ......... 1975—Jan .'
3,636 .....................Feb . r
3,368
3,414
3,599

43 467
61,732

1 453
2,431

113
136

1 340
2,295

41,020
57,311

2 961 24,596
3,944 34,979

71,982
71,305
69,197
70,382
70,965
68,123
69,137
69,804

3,729
3,744
3,439
3,701
3,503
3,227
4,376
3,978

749
606
611
713
635
683
889
510

2,979
3,138
2,828
2,988
2,867
2,544
3,487
3,468

66,156
65,429
63,557
64,309
64,919
62,621
62,397
63,409

4,890
4,913
5,099
4,794
5,428
5,237
5,071
4,762

39,596
36,711
34,393
33,920
33,766
30,621
30,352
32,040

9,273
11,289
11,543
12,737
13,544
14,051
15,454
15,258

12
12
12
12
12
12
11
11

398
516
521
858
181
712
521
349

2,097 .........1974—May
2,132
2,201
2,373
2,543
2,275
2,363
2,418

68,451
67,038
69,654
69,248
68,708

3,804
4,376
5,095
4,596
4,772

873
913
1,224
1,342
1,337

2,931
3,462
3,871
3,254
3,435

62,360
60,546
62,363
62,625
61,772

4,567
4,693
4,630
5,394
5,325

30,266
29,207
29,990
28,666
28,957

16,419
16,517
17,305
17,812
16,726

11
10
10
10
10

108
127
438
753
764

2,287 .........1975—Jan.
2,117
2,196
2,026
2,164

30,810
39,689

1,272
2,173

72
113

1,200
2,060

29,002
36,646

2,008 17,379
2,519 22,051

5,329
5,923

4 287
6 152

535 ......... 1972—Dec.
870 ......... 1973—Dec.

49,301
48,970
48,018
49,481
50,212
48,314
49,668
49,666

3,481
3,516
3,176
3,448
3,177
2,988
4,037
3,744

724
579
568
692
605
651
865
484

2,757
2,937
2,608
2,756
2,572
2,337
3,172
3,261

44,625
44,214
43,528
44,654
45,550
44,033
44,256
44,594

3,083
3,255
3,364
3,278
3,667
3,690
3,557
3,256

26,010
23,669
22,388
22,558
22,818
20,203
20,200
20,526

7,468
9,137
9,450
10,437
11,035
11,444
12,808
13,225

8
8
8
8
8
8
7
7

064
155
326
382
030
696
691
587

1,195 ......... 1974—May
1,239
1,314
1,380
1,486
1,294
1,375
1,328

48,490
46,698
49,533
49,177
49,479

3,599
4,164
4,805
4,297
4,487

854
895
1,189
1,313
1,314

2,744
3,269
3,616
2,984
3,173

43,578
41,350
43,546
43,758
43,784

3,172
3,266
3,072
3,886
4,220

19,061
17,673
19,128
17,997
18,640

13,736
13,932
14,688
15,158
14,135

7
6
6
6
6

609
479
658
717
789

1,313 ......... 1975—Jan.
1 ,184 .....................Feb.
1,183
1,122
1,208

78,203
121,866

3,501
5,610

997
1,642

2,504 72,121
3,968 111,615

145,918
147,467
145,057
148,719
147,720
145,906
150,275
151,905

8,275
9,028
10,129
9,419
9,981
10,449
11,901
11,982

3,218
3,488
4,373
4,123
5,058
5,853
6,249
5,809

5,057
5,540
5,757
5,296
4,923
4,596
5,652
6,173

151,140
151,662
155,204
155,617
156,888

11,831
12,561
15,407
14,044
15,893

6,356
6,607
8,849
7,812
9,398

54,878
80,374

3,050
5,027

6 441
9 502

6,433 7 030
8,140 10 248

IN ALL FOREIGN COUNTRIES
..........Xotal all currencies

1,422 ......... 1972 Dec.
2,158 .........1973—Dec.

994 ......... 1972—Dec
1,990 .........1973—Dec.

12,643
23,771

1,220
1,573

11,260
21,747

1,818
5,508

8. 105
14,563

1 338
1 676

163 ......... 1972—Dec.
451 ......... 1973—Dec.

30,864
31,219
30,403
32,317
30,080
30,071
32,313
31,733

2,567
2,855
3,684
2,909
3,721
4,311
4,426
4,815

27,706
27,725
26,039
28,670
25,626
24,995
27,107
26,140

8,255
7,642
7,663
8,079
7,072
7,211
8,538
7,702

17,217
17,593
16,223
18,403
16,259
15,650
16,427
16,427

2
2
2
2
2
2
2
2

233
490
153
188
295
135
141
011

591
639
681 .....................July
738
733
765
779
778

33,131
33,534
33,793
35,667
38,198

5,036
5,243
7,228
6,529
8,126

27,343
27,498
25,875
28,428
29,070

8,269
8,975
8,498
9,647
7,634

16,854
16,262
15,134
16,462
18,995

2
2
2
2
2

220
262
243
318
441

752 ......... 1975—Jan.r
793
690
711
1,001

notes see p. A-74.
Digitized forFor
FRASER


Location and currency form

IN UNITED KINGDOM
..........Total all currencies

IN BAHAMAS AND CAYMANS i
..........Total, all currencies

A 72

INTL. CAPITAL TRANSACTIONS OF THE U.S. □ AUGUST 1975
21. SHORT-TERM LIQUID CLAIMS ON FOREIGNERS
REPORTED BY NONBANKING CONCERNS

20. DEPOSITS, U.S. TREAS. SECURITIES,
AND GOLD HELD AT F.R. BANKS FOR
FOREIGN OFFICIAL ACCOUNT

(Amounts outstanding; in millions of dollars)

(In millions of dollars)
Payable in
Payable in dollars foreign currencies

Assets in custody
End of
period

Deposits

325
251
418

197 2
197 3
197 4

U.S. Treas.
securities *

Earmarked
gold

50,934
52,070
55.600

215,530
217,068
16.838

1974—July..
Aug..
Sept..
O ct...
Nov..
D ec..

330
372
411
376
626
418

54,317
53,681
53,849
54,691
55,908
55.600

16,964
16,917
16,892
16,875
16,865
16.838

1975—Jan ...
Feb. .
Mar..
Apr...
May.
June..
July..

391
409
402
270
310
373
369

58,001
60,864
60,729
60,618
61,539
61,406
60,999

16,837
16,818
16,818
16,818
16,818
16.803
16.803

End of
period

Total

United
King­
dom

Canada

1,491
1,141
11,648
\ 1,507

1,062
697
1,092
1,078

161
150
203
127

183
173
234
234

86
121
120
68

663
372
577
580

534
443
587
443

1973 ' ..................

11,965
12,374
3,162

1,446
1,910
2,588

169
55
37

307
340
427

42
68
109

702
911
1,118

485
536
770

1974—M ay........
June........
July.........
Aug.........
Sept.........
Oct.r ___
Nov . T. . . .
D ec.r. . . .

3,669
3,661
3,771
3,504
3,073
2,698
2,998
3,303

3,037
3,049
3,223
2,941
2,491
2,132
2,380
2,582

76
62
74
51
30
25
15
56

329
369
341
369
362
325
326
403

227
181
133
144
189
216
277
261

1,441
1,418
1,441
1,436
1,194
1,122
1,285
1,342

980
927
828
872
864
835
941
951

1975—J a n .'.
F e b .'.. . .
Mar........
Apr.*___
M ay*... .

3,215
3,326
3,234
3,359
3,182

2,511
2,512
2,434
2,449
2,216

45
46
66
39
47

314
356
347
313
391

345
412
387
559
527

1,136
1,079
1,055
1,065
905

1,112
1,136
1,132
1,277
1,238

1071 2
1070 7.

1 Marketable U.S. Treasury bills, certificates of in­
debtedness, 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 Oct. 1973.

Short­
Short­
term Deposits term
Deposits invest­
invest­
ments 1
ments 1

1 Negotiable and other readily transferable foreign obligations payable on demand
or having a contrac tual maturity of not more than 1 year from the date on which the
obligation was incurred by the foreigner.
2 Data on the 2 lines for this date differ because of changes in reporting coverage.
Figures on the first line are comparable in coverage with those shown for the preceding
date; figures on the second line are comparable with those shown for the following date.

N o t e . —Excludes

deposits and U.S. Treasury securities
held for international and regional organizations. Ear­
marked gold is gold held for foreign and international
accounts and is not included in the gold stock of the
United States.

N o t e . — Data represent the liquid 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 22.

22. SHORT-TERM LIABILITIES TO AND CLAIMS ON FOREIGNERS REPORTED BY
NONBANKING CONCERNS, BY TYPE
(Amount outstanding; in millions of dollars)
Claims

Liabilities

End of period

Total

Payable
in
dollars

Payable
in
foreign
currencies

Total

Payable
in
dollars

Payable in fbreign
currenciies
Deposits with
banks abroad
in reporter’s
name

Other

2,564
2,704
2,763

2,109
2,229
2,301

454
475
463

4,894
5,185
5,000

4,186
4,535
4,467

383
318
289

326
333
244

2,844
1972—Mar......................
2,925
June.....................
2,933
Sept......................
J
3,119
Dec.1................... \ 3,399

2,407
2,452
2,435
2,635
2,921

437
472
498
484
478

5,173
5,326
5,487
5,721
6,312

4,557
4,685
4,833
5,074
5,645

317
374
426
410
393

300
268
228
237
274

1973—Mar......................
June.....................
Sept......................
Dec.......................

3,307
3,286
3,574
3,962

2,828
2,754
2,915
3,249

478
532
659
713

7,028
7,304
7,648
8,438

6,150
6,453
6,710
7,522

456
493
528
485

422
358
411
431

1974 Mar......................
June.....................
Sept......................
Dec.......................

4,382
5,133
5,600
5,766

3,563
4,168
4,646
4,851

819
965
954
915

10,407
10,965
10,632
11,170

9,465
10,030
9,656
10,125

400
420
419
455

542
516
558
590

1975—M ar.*..................

5,723

4,860

863

10,792

9,679

398

715

1971—Sept......................
Dec.1................... /\

1 Data on the 2 lines shown for this date differ
because of changes in reporting coverage. Figures on
the first line are comparable with those shown for the




preceding date; figures on the second line are compa­
rable with those shown for the following date.

AUGUST 1975 o INTL. CAPITAL TRANSACTIONS OF THE U.S.

A 73

23. SHORT-TERM LIABILITIES TO AND CLAIMS ON FOREIGNERS REPORTED BY NONBANKING CONCERNS
(End of period. Amounts outstanding; in millions of dollars)
Claims on foreigners

Liabilities to foreigners

June

Mar.

1974

1975

1974

Area and country

Sept.

Dec.

Mar.*

June

Mar.

1975
Sept.

Dec.

Mar.*

Europe:
Austria....................................................
Belgium-Luxembourg...........................
Denmark................................................
Finland...................................................
France....................................................
Germany, Fed. Rep. of.........................
Greece....................................................
Italy........................................................
Netherlands............................................
Norway..................................................
Portugal..................................................
Spain......................................................
Sweden...................................................
Switzerland............................................
Turkey....................................................
United Kingdom...................................
Yugoslavia.............................................
Other Western Europe..........................
Eastern Europe......................................

5
226
17
8
134
237
21
121
114
9
24
60
43
92
9
1,118
16
3
29

12
417
18
9
177
220
28
131
104
8
17
45
52
112
11
1,244
18
6
34

18
500
22
12
164
246
28
137
120
10
20
48
40
106
20
1,415
17
7
80

20
515
24
16
202
314
39
128
117
9
19
56
38
140
8
1,216
40
5
70

26
467
23
16
151
350
25
113
121
9
13
54
32
157
12
1,101
52
5
54

16
152
37
42
384
337
87
322
103
22
112
406
74
91
23
1,839
15
19
79

17
139
27
80
511
348
76
395
126
35
101
409
106
78
28
1,871
23
23
97

15
114
25
91
463
328
69
415
144
32
69
414
97
154
24
1,768
23
20
90

26
128
42
120
431
339
65
397
148
36
81
369
89
136
26
1,853
22
21
142

15
103
35
76
329
276
59
315
157
34
42
359
66
86
33
1,635
33
23
114

Total...............................................

2,284

2,662

3,010

2,976

2,781

4,159

4,491

4,355

4,471

3,790

Canada.......................................................

338

312

298

298

260

1,534

1,577

1,570

1,615

1,868

Latin America:
Argentina...............................................
Bahamas................................................
Brazil......................................................
Chile.......................................................
Colombia...............................................
Cuba.......................................................
Mexico....................................................
Panama..................................................
Peru........................................................
Uruguay.................................................
Venezuela...............................................
Other L.A. republics.............................
Neth. Antilles and Surinam.................
Other Latin America.............................

19
211
78
7
18
*
77
14
17
3
50
45
5
37

19
307
125
10
22
*
76
19
11
2
43
60
7
59

28
325
160
14
13
*
64
21
15
2
53
63
8
50

36
281
118
22
14
*
63
28
14
2
49
83
24
81

31
299
121
23
11
*
72
18
18
3
39
65
48
114

52
746
411
78
44
1
260
94
65
6
136
172
13
167

53
977
523
64
51
1
263
84
60
5
172
172
17
157

59
518
419
124
49
1
287
114
40
6
190
182
14
169

69
594
461
106
51
1
297
132
44
5
190
193
20
147

75
616
376
69
51
1
325
110
46
15
178
194
16
192

Total................................................

581

761

818

816

862

2,245

2,599

2,169

2,308

2,266

Asia:
China, People’s Republic of (China
Mainland)..........................................
China, Rep. of (Taiwan).......................
Hong Kong............................................
India.......................................................
Indonesia................................................
Israel................................
Japan ......................................................
Korea......................................................
Philippines..............................................
Thailand.................................................
Other Asia..............................................

20
51
24
14
13
31
374
38
9
7
262

39
72
19
13
22
39
374
45
19
7
404

23
72
19
10
38
40
352
66
28
10
431

17
93
19
7
60
50
348
75
25
10
536

8
102
19
10
63
63
331
43
19
9
645

8
175
69
36
51
38
1,214
109
87
21
264

3
118
68
31
67
37
957
124
86
22
314

8
127
64
37
81
53
1,100
123
108
23
311

17
137
63
37
85
44
1,148
201
93
24
387

19
121
82
32
110
46
1,238
165
86
30
399

Total................................................

844

1,054

1,089

1,239

1,311

2,074

1,827

2,034

2,237

2,328

South Africa..........................................
Zaire........................................................
Other Africa..........................................

35
22
21
134

12
24
15
156

6
35
17
114

3
43
18
129

5
54
17
142

9
69
20
154

13
85
17
199

16
90
13
205

15
101
24
234

24
109
18
242

Africa:

Total................................................

212

206

172

193

217

253

314

325

374

393

Other countries:
Australia................................................
All other.................................................

73
22

51
24

57
32

56
30

60
31

110
31

117
39

134
44

116
49

100
44

Total...............................................

95

74

89

86

91

142

157

178

29

63

125

159

201

1

1

1

165
♦

144

International and regional........................
Grand total.....................................

4,382

5,133

5,600

5,766

5,723

10,407

10,965

10,632

11,170

10,792

N o t e . — Reported by exporters, importers, and industrial and commercial concerns and other nonbanking institutions in the United States.




1

Data exclude claims held through U.S. banks, and intercompany accounts
between U.S. companies and their foreign affiliates.

A 74

INTL. CAPITAL TRANSACTIONS OF THE U.S. □ AUGUST 1975

24. LONG-TERM LIABILITIES TO AND CLAIMS ON FOREIGNERS REPORTED BY NONBANKING CONCERNS
(Amounts outstanding; in millions of dollars)
Claims
Country or area

Total
liabilities

End of period

1971—Mar........................
June.......................
Sept........................

Total

United
Kingdom

Other
Europe

Canada

Brazil

Mexico

Other
Latin
America

Japan

Other
Asia

Africa

All
other

3,177
3,172
2,939
/ 3,159
1 3,138

2,983
2,982
3,019
3,118
3,068

154
151
135
128
128

688
687
672
705
704

670
677
765
761
717

182
180
178
174
174

63
63
60
60
60

615
625
597
652
653

161
138
133
141
136

302
312
319
327
325

77
75
85
86
86

72
74
75
85
84

1972—June.......................
Sept........................
D ec.11r .................... /\

3,300
3,448
3,540
3,592

3,206
3,187
3,312
3,284

108
128
163
191

712
695
715
745

748
757
775
759

188
177
184
187

61
63
60
64

671
662
658
703

161
132
156
133

377
390
406
378

86
89
87
86

93
96
109
38

1973—M ar.r.....................
June r .....................
Sept.r.....................
Dec. r .....................

3,770
3,771
3,979
3,867

3,421
3,472
3,632
3,695

156
180
216
290

802
805
822
763

775
782
800
854

165
146
147
145

63
65
73
79

796
825
832
824

123
124
134
122

393
390
449
450

105
108
108
115

45
48
51
53

1974—M ar.r.....................
Juner .....................
Sept........................
Dec.........................

3,816
3,514
3,340
3,677

3,813
3,809
3,932
4,112

368
363
370
364

737
696
702
640

888
907
943
975

194
184
181
187

81
138
145
143

800
742
776
1,018

118
117
114
107

448
477
523
505

119
122
118
121

61
61
59
54

1975—Mar.P.....................

3,924

4,113

339

653

1,019

182

160

966

102

528

130

54

1 Data on the 2 lines shown for this date differ because of changes
shown for the preceding date; figures on the second line are comparable
in reporting coverage. Figures on the first line are comparable with those
with those shown for the following date.

25. OPEN MARKET RATES
(Per cent per annum)

Month

France

United Kingdom

Canada
Treasury Day-tobills,
day
3 m onths1 money 2

Treasury
Prime
bank
bills,
3 months
bills,
3 months

Day-today
money

Clearing
banks’
deposit
rates

Germany,
Fed. Rep. of

Day-to- Treasury
bills,
day
money 3
60-90
days 4

Netherlands

Day-to- Treasury
bills,
day
money 5 3 months

Switzer­
land

Day-today
money

Private
discount
rate

1973.......................
1974.......................

5.43
7.63

5.27
7.69

10.45
12.99

9.40
11.36

8.27
9.85

7.96
9.48

8.92
.12.87

6.40
6.06

10.18
8.76

4.07
6.90

4.94
8.21

5.09
6.67

1974---JUly.............
Aug.............
Sept.............
Oct..............
Nov.............
Dec.............

8.88
8.76
8.70
8.67
7.84
7.29

8.52
8.83
8.84
8.56
7.86
7.44

13.21
12.80
12.11
11.95
12.07
12.91

11.20
11.24
10.91
10.93
10.98
10.99

8.70
11.11
10.69
10.81
7.70
7.23

9.50
9.50
9.50
9.50
9.50
9.50

13.75
13.68
13.41
13.06
12.40
11.88

5.63
5.b3
5.63
5.63
5.63
5.13

9.13
9.05
9.00
8.88
7.20
8.25

7.50
7.50
7.42
7.38
6.72
6.69

8.57
7.09
5.08
7.81
7.00
6.96

7.00
7.00
7.00
7.00
7.00
7.00

1975—Jan..............
Feb.. ..........
Mar.............
Apr.............
M ay............
June............
July. ..

6.65
6.34
6.29
6.59
6.89
6.96
7.22

6.82
6.88
6.73
6.68
6.88
6.88
7.17

11.93
11.34
10.11
9.41
10.00
9.72
9.86

10.59
9.88
9.49
9.26
9.47
9.43
9.71

8.40
7.72
7.53
7.50
7.81
7.00
7.34

9.30
9.50
8.22
7.09
6.25
6.25
6.25

11.20
9.91
9.06
8.34
7.56
7.31
7.25

5.13
3.88
3.38
3.38
3.38
3.38

7.54
4.04
4.87
4.62
5.32
4.91
3.98

6.60
6.56
5.94
5.53
3.82
2.78
2.98

6.18
7.33
5.87
4.13
1.98
1.37
1.99

7.00
7.00
7.00
6.50
6.50
6.50
6.50

1 Based on average yield of weekly tenders during month.
2 Based on weekly averages of daily closing rates.
3 Rate shown is on private securities.
4 Rate in effect at end of month.

5 Monthly averages based on daily quotations.
N o t e . —For

description and back data, see “International Finance,”
Section 15 of Supplement to Banking and Monetary Statistics , 1962.

NOTES TO TABLES 19a AND 19b ON PAGES A-70 AND A-71, RESPECTIVELY:
1 Cayman Islands included beginning Aug. 1973.
2 Total assets and total liabilities payable in U.S. dollars amounted to
$35,024 million and $35,301 million, respectively, on May 31, 1975.
N o t e . —Components




may not add to totals due to rounding.

For a given month, total assets may not equal total liabilities because
some branches do not adjust the parent’s equity in the branch to reflect
unrealized paper profits and paper losses caused by changes in exchange
rates, which are used to convert foreign currency values into equivalent
dollar values.

AUGUST 1975 □ CENTRAL BANK AND EXCHANGE RATES

A 75

26. CENTRAL BANK RATES FOR DISCOUNTS AND ADVANCES TO COMMERCIAL BANKS
(Per cent per annum)
Rate as of July 31, 1975

Rate as of July 31, 1975
Country

Per
cent
18.0
6.0
6.5
18.0

Argentina......................
Austria..........................
Belgium.........................
Brazil.............................
Canada..........................
Denmark.......................
France...........................
Germany, Fed. Rep. of

8.25
8.0
9.5
4.5

Country

Month
effective

Month
effective

Per
cent

Feb.
Apr.
May
Feb.

1972
1975
1975
1972

Italy...................
Japan.................
Mexico. .............
Netherlands. . . .

7.0
8.0
4.5
6.0

May
June
June
Mar.

1975
1975
1942
1975

Jan.
Apr.
June
May

1975
1975
1975
1975

Norway.............
Sweden..............
Switzerland........
United Kingdom
Venezuela..........

5.5
7.0
4.5
11 .0
5.0

Mar.
Aug.
May
July
Oct.

1974
1974
1975
1975
1970

N o t e . —Rates shown are mainly those at which the central bank either
discounts or makes advances against eligible commercial paper and/or
govt, securities for commercial banks or brokers. For countries with
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. Other rates for some of
these countries follow:
Argentina—3 and 5 per cent for certain rural and industrial paper, de­
pending on type of transaction;
Brazil—8 per cent for secured paper and 4 per cent for certain agricultural
paper;

Japan—Penalty rates (exceeding the basic rate shown) for borromings

from the central bank in excess of an individual bank’s quota;
United Kingdom—The Bank’s minimum lending rate, which is the
average rate of discount for Treasury bills established at the most recent
tender plus one-half per cent rounded to the nearest one-quarter per cent
above;
Venezuela—2 per cent for rediscounts of certain agricultural paper, 4 l/ 2
per cent for advances against government bonds, and 5l/ i per cent for
rediscounts of certain industrial paper and on advances against promissory
notes or securities of first-class Venezuelan companies.

27. FOREIGN EXCHANGE RATES
(In cents per unit of foreign currency)
Australia
(dollar)

Austria
(schilling)

Belgium
(franc)

1971.....................
1972.....................
1973.....................
1974....................

113.61
119.23
141.94
143.89

4.0009
4.3228
5.1649
5.3564

2.0598
2.2716
2.5761
2.5713

99.021
100.937
99.977
102.257

13.508
14.384
16.603
16.442

18.148
19.825
22.536
20.805

28.768
31.364
37.758
38.723

13.338
13.246
12.071
12.460

244.42
250.08
245.10
234.03

.16174
.17132
.17192
.15372

.28779
.32995
.36915
.34302

1974—July..........
Aug..........
Sept..........
Oct...........
Nov..........
Dec..........

147.99
148.24
144.87
130.92
131.10
131.72

5.4973
5.3909
5.2975
5.4068
5.5511
5.7176

2.6378
2.5815
2.5364
2.5939
2.6529
2.7158

102.424
102.053
101.384
101.727
101.280
101.192

16.858
16.547
16.111
16.592
16.997
17.315

20.984
20.912
20.831
21.131
21.384
22.109

39.174
38.197
37.580
38.571
39.836
40.816

12.759
12.525
12.316
12.416
12.397
12.352

238.96
234.56
231.65
233.29
232.52
232.94

.15522
.15269
.15103
.14992
.14996
.15179

.34372
.33082
.33439
.33404
.33325
.33288

1975—Jan...........
Feb...........
Mar..........
Apr...........
May.........
June.........
July..........

132.95
134.80
135.85
134.16
134.04
133.55
130.95

5.9477
6.0400
6.0648
5.9355
6.0033
6.0338
5.7223

2.8190
2.8753
2.9083
2.8433
2.8631
2.8603
2.7123

100.526
99.957
99.954
98.913
97.222
97.426
97.004

17.816
18.064
18.397
18.119
18.299
18.392
17.477

22.893
23.390
23.804
23.806
24.655
24.971
23.659

42.292
42.981
43.120
42.092
42.546
42.726
40.469

12.300
12.550
12.900
12.686
12.391
12.210
11.777

236.23
239.58
241.80
237.07
232.05
228.03
218.45

.15504
.15678
.15842
.15767
.15937
.15982
.15387

.33370
.34294
.34731
.34224
.34314
.34077
.33741

Nether­
lands
(guilder)

New
Zealand
(dollar)

Norway
(krone)

Portugal
(escudo)

Spain
(peseta)

Sweden
(krona)

Switzer­
land
(franc)

United
Kingdom
(pound)

Period

Period

Malaysia
(dollar)

Mexico
(peso)

Canada
(dollar)

Denmark
(krone)

France
(franc)

Germany
(Deutsche
mark)

South
Africa
(rand)

India
(rupee)

Ireland
(pound)

Italy
(lira)

Japan
(yen)

1971.....................
1972.....................
1973............. ..
1974......... .

32.989
35.610
40.988
41.682

8.0056
8.0000
8.0000
8.0000

28.650
31.153
35.977
37.267

113.71
119.35
136.04
140.02

14.205
15.180
17.406
18.119

3.5456
3.7023
4.1080
3.9506

140.29
129.43
143.88
146.98

1.4383
1.5559
1.7178
1.7337

19.592
21.022
22.970
22.563

24.325
26.193
31.700
33.688

244.42
250.08
245.10
234.03

1974—July..........
Aug..........
Sept..........
Oct...........
Nov..........
Dec..........

41.471
42.780
41.443
41.560
43.075
42.431

8.0000
8.0000
8.0000
8.0000
8.0000
8.0000

38.043
37.419
36.870
37.639
38.438
39.331

145.15
143.73
139.64
129.95
130.42
130.56

18.519
18.246
17.993
18.165
18.404
18.873

3.9886
3.9277
3.8565
3.9246
3.9911
4.0400

149.73
146.83
142.69
142.75
143.88
144.70

1.7525
1.7466
1.7339
1.7422
1.7522
1.7716

22.861
22.597
22.333
22.683
23.175
23.897

33.739
33.509
33.371
34.528
36.384
38.442

238.96
234.56
231.65
233.29
232.52
232.94

1975—Jan...........
Feb...........
Mar..........
Apr..........
May.........
June.........
July

43.359
44.136
44.582
43.797
44.278
43.856
41.442

8.0000
8.0000
8.0000
8.0000
8.0000
8.0000
8.0000

40.715
41.582
42.124
41.291
41.581
41.502
39.154

131.72
133.30
134.31
132.66
131.66
130.86
127.73

19.579
19.977
20.357
20.049
20.198
20.393
19.241

4.0855
4.1139
4.1276
4.0596
4.0933
4.1124
3.9227

145.05
147.16
148.70
147.01
146.69
146.31
139.75

1.7800
1.7784
1.7907
1 .7756
1.7871
1.7922
1.7446

24.750
25.149
25.481
25.171
25.422
25.532
24.213

39.571
40.450
40.273
39.080
39.851
40.086
38.272

236.23
239.58
241.80
237.07
232.05
228.03
218.45

N o t e . —Averages of certified noon buying rates in New York for cable
transfers. For description of rates and back data, see “International Fi­
nance,” Section 15 of Supplement to Banking and Monetary Statistics , 1962.




A 76

BANKING OFFICES □ AUGUST 1975
NUMBER OF BANKING OFFICES IN THE UNITED STATES
Commercial banks
Type of office and type of change

All
banks

Member
Total

Mutual savings
banks

Nonmember

Total

Na­
tional 1

State

Total

Insured

Non­ Insured 2 Noninsured
insured

Banks (head office):
Dec. 31, 1 9 3 4 ....
Dec. 31, 1 9 4 1 ....
Dec. 31, 1947 3 ...
Dec. 31, 1 9 5 1 ....
Dec. 31, 1965___
Dec. 31, 1970___
Dec. 31, 1971___
Dec. 31, 1972___
Dec. 31, 1973___
Dec. 31, 1974___
June 30, 1975___

16,063
14,826
14,714
14,618
14,309
14,181
14,273
14,413
14,653
14,936
15,048

15,484
14,278
14,181
14,089
13,804
13,688
13,784
13,928
14,172
14,457
14,570

6,442
6,619
6,923
6,840
6,221
5,768
5,728
5,705
5,737
5,782
5,796

5,462
5,117
5,005
4,939
4,815
4,621
4,600
4,613
4,661
4,710
4,732

980
1,502
1,918
1,901
1,406
1,147
1,128
1,092
1,076
1,072
1,064

9,042
7,662
7,261
7,252
7,583
7,920
8,056
8,223
8,435
8,675
8,774

7,699
6,810
6,478
6,602
7,320
7,735
7,875
8,017
8,229
8,438
8,526

Branches, additional offices, and facilities:
Dec. 31. 1934...........................................
Dec. 31, 1941...........................................
Dec. 31, 1947 3.........................................
Dec. 31, 1951.
Dec. 31, 1965.
Dec. 31, 1970.
Dec. 31, 1971.
Dec. 31, 1972.
Dec. 31, 1973.
Dec. 31, 1974.
June 30, 1975.

3,133
3,699
4,332
5,383
16,471
22,727
24,299
25,977
27,946
30,076
30,985

3,007
3.564
4,161
5,153
15,756
21,643
23,104
24,622
26,454
28,434
29,223

2,224
2,580
3,051
3,837
12,298
16,191
17,085
17,954
18,966
19,946
20,349

1,243
1,565
1,870
2,370
8,964
12,536
13,272
13,974
14,916
15,734
16,017

981
1,015
1,181
1,467
3,334
3,655
3,813
3,980
4,050
4,212
4,332

783
984
1,110
1,316
3,458
5,452
6,019
6,668
7.488
8.488
8,874

932
1,043
1,275
3.404
5.404
5,979
6,623
7,442
8,440
8,827

160
—2
-4
-2
2

159
-2
-4
-2
2

39
-1

10

110
-1
-4
-2
2

90
-1

-3 6
-5

-3 4
-5

-1 8
-3

-1 8
-2

-1

-2
-2

-2
-1

-i

Changes Jan.-June 30, 1975
Banks:
New banks.................................................
Placed in receivership...............................
Ceased banking operations.......................
Suspensions4..............................................
Reopening of suspended bank4...............
Consolidations and absorptions:
Banks converted into branches............
Other......................................................
Interclass changes:
Nonmember to national.......................
Nonmember to State member..............
State member to national.....................
State member to nonmenber................
National to nonmember.......................
National to State member....................
Noninsured to insured..........................
Noninsured mutual to insured mutual.
Net change................................................
Number of banks, June 30, 1975.............
Branches and additional offices:
De novo....................................................................
Banks converted.......................................................
Discontinued.............................................................
Sale of branch...........................................................
Interclass changes:
Nonmember to national......................................
Nonmember to State member........................... .
State member to national...................................
State member to nonmember..............................
National to State member................................. .
National to nonmember.....................................
Noninsured to insured.......................................
Noninsured mutual to insured mutual.............
Other.......................................................................
Facilities reclassified as branches............................
Net change..............................................................
Number of branches and additional offices, June
30, 1975...............................................................
Banking facilities:5
De novo.............................................
Facilities reclassified as branches....
Discontinued.................................... .
Interclass changes:
National to nonmember..............
Net change........................................
Number of facilities, June 30, 1975.

-9
-1

-7
-1

-2
2

68
52
194
202
328
328
326
325
321
319
322

52
67
41
54
48
40
45
46
48
47

32
124
165
583
891
983
1,113
1,241
1,387
1,468

511
496
339
327
177
165
163
160
160
160
156
126

103
47
65
132
193
212
242
251
255
294

20
-4

-2

-8
-1

112

113

14

22

15,048

14,570

5,796

4,732

1,064

,774

8,526

956
36
-9 1

836
34
-8 9

481
19
-7 6
-1

381
18
-5 2

100
1
-2 4
-1

355
15
-1 3
1

354
15
-1 3
1

-1 7
-1

-1 7
-1

-9 8
-2 7
9
2

9
2

7
1

10
1

-8

1
-4 0
-1 3
98

-3

99

11

248

5

3

322

-5
-4

156
47
—i

13

2
1

-7

2
1

912

792

409

290

"ll9

383

384

81

39

30,791

29,029

20,189

15,868

4,321

8,840

8,793

1,468

294

1
-2
-2

1
-1
-2

-1

-4
-3

194

-3

194

1 National bank figures include 1 bank in Puerto Rico and 1 bank in
Virgin Islands.
2 Insured mutual savings banks figures include 1 to 3 member mutual
savings banks, 1941 to 1962 inclusive, not reflected in total commercial
bank figures.
3 Series revised as of June 30, 1947. The revision resulted in an addition
of 115 banks and 9 branches.




-1 6
-2

783

1,343
852
783
650
263
185
181
206
206
237
248

-6

160

1
-1

-2

-4
-7
149

4 One bank involved in litigation was suspended and reopened twice.
5 Provided at military and other Govt, establishments through arrange­
ments made by the Treasury Dept.
N o t e . —Beginning with 1959, figures include all banks in Alaska and
Hawaii, but nonmember banks in territories and possessions are excluded.

AUGUST 1975 a BANKING OFFICES

A 77

NUMBER OF PAR AND NONPAR BANKING OFFICES
Par

Total
F.R. district,
State, or other area

Total

Member

Banks

Branches
and offices

Banks

Branches
and offices

Banks

Total, including other areas:
Dec. 31, 1974....................
June 30, 1975....................

14,334
14,439

28,684
29,469

14,247
14,362

28,627
29,414

5,782
5,796

F.R. districts, June 30, 1975
Boston...............................
New Y o rk i.......................
Philadelphia......................
Cleveland..........................
Richmond.........................
Atlanta..............................
Chicago.............................
St. Louis...........................
Minneapolis......................
Kansas City.......................
Dallas................................
San Francisco...................

374
484
399
768
794
1,976
2,695
1,427
1,398
2,185
1,480
459

2,005
4,507
2,139
2,505
4,195
2,515
3,022
1,430
385
618
441
5,707

374
484
399
768
789
1,939
2,695
1,427
1,398
2,185
1,445
459

2,005
4,507
2,139
2,505
4,195
2,475
3,022
1,430
385
618
426
5,707

State or area, June 30, 1975:
Alabam a...........................
Alaska...............................
Arizona.............................
Arkansas...........................
California..........................
Colorado...........................
Connecticut.......................
Delaware...........................
District of Columbia........
Florida...............................

294
9
16
260
194
269
72
17
16
736

436
83
433
297
3,531
52
556
132
127
167

294
9
16
260
194
269
72
17
16
736

446
8
24
1,217
406
662
614
341
253
45

670
150
196
203
877
394
142
485
561
281

Maryland...........
Massachusetts...
Michigan............
Minnesota..........
Mississippi.........
Missouri.............
M ontana............
Nebraska............
Nevada...............
New Hampshire.

114
150
346
744
184
701
154
448
8
79

New Jersey
New Mexico__
New Y ork.........
North Carolina.
North D akota..,
Ohio................. .
Oklahoma.........
Oregon............. .
Pennsylvania...,
Rhode Island. . .
South Carolina.
South D akota..
Tennessee.........
Texas................
U tah.................
Vermont...........
Virginia............
Washington.. . .
West Virginia..
Wisconsin........
Wyoming..........

Georgia. . .
H aw aii...,
Idaho___
Illinois
Indiana...
Iowa.........
K ansas...
Kentucky.
Louisiana.
Maine___

Other areas:
American Samoa2.
Guam2...................
Puerto Rico3.........
Virgin Islands3. . . .

Branches
and offices

Banks

Branches
and offices

20,012
20,403

8,465
8,566

8,615
9,011

201
317
260
459
407
657
929
429
508
823
663
143

1,283
3,904
1,374
1,998
2,515
1,403
1,896
703
207
323
212
4,585

173
167
139
309
382
1,282
1,766
998
890
1,362
782
316

722
603
765
507
1,680
1,072
1,126
727
178
295
214
1,122

436
83
433
297
3,531
52
556
132
127
167

112
5
3
83
65
147
26
5
14
327

303
71
297
169
3,035
32
335
3
117
58

182
4
13
177
129
122
46
12
2
409

133
12
136
128
1496
20
221
129
10
109

446
8
24
1,217
406
662
614
341
187
45

670
150
196
203
877
394
142
485
506
281

72
2
10
490
169
145
194
91
62
23

394
11
166
117
501
119
69
281
275
157

374
6
14
727
237
517
420
250
125
22

276
139
30
86
376
275
73
204
231
124

728
897
1,515
38
524
293
15
93
109
104

114
150
346
744
184
701
154
448
8
79

728
897
1,515
38
524
293
15
93
109
104

48
90
207
230
45
175
101
128
5
47

440
665
1,202
21
229
94
11
49
92
82

66
60
139
514
139
526
53
320
3
32

288
232
313
17
295
199
4
44
17
22

216
78
299
93
171
497
459
49
399
16

1,379
198
3,152
1,565
81
1,645
100
429
2,240
217

216
78
299
93
171
497
459
49
399
16

1,379
198
3,152
1,565
81
1,645
100
429
2,240
217

141
42
222
29
47
331
209
8
262
5

1,160
121
2,970
762
21
1,358
62
296
1,526
114

75
36
77
64
124
166
250
41
137
11

219
77
H82
803
60
287
38
133
714
103

91
159
342
1,327
57
33
291
96
217
621
77

594
119
748
131
192
134
1,160
671
29
329
2

86
159
342
1,321
57
33
291
96
217
621
77

594
119
748
131
192
134
1,160
671
29
329
2

26
60
90
613
16
17
175
29
130
162
59

307
85
406
32
134
47
875
548
18
104
1

60
99
252
708
41
16
116
67
87
459
18

287
34
342
99
58
87
285
123
11
225
1

1
15
8

3
16
216
30

1
15
8

3
16
216
30

1
9
22
29

1
14
7

2
7
194
1

1 Includes Los Angeles branch and 19 New York City branches of 3
insured nonmember Puerto Rican banks.
2 American Samoa and Guam assigned to the San Francisco District
for check clearing and collection purposes. All member branches in
Guam are branches of California and New York banks.
3 Puerto Rico and the Virgin Islands assigned to the New York District
for purposes of Regulation J, “Check Clearing and Collection.” Member
branches in Puerto Rico and all except 7 in the Virgin Islands are branches
of banks located in California, New York, and Pennsylvania. Certain
branches of Canadian banks (2 in Puerto Rico and 5 in Virgin Islands)




Nonmember

Nonpar
(nonmember)

Banks

Branches
and offices

87
77

57
55

5
37

40

35

15

66

55

are included above in the table as nonmember banks; and nonmember
branches in Puerto Rico include 8 branches of Canadian banks.
N ote.—Includes all commercial banking offices in the United States,
Puerto Rico, and the Virgin Islands on which checks are drawn, including
194 banking facilities. Number of banks and branches differs from that
in the table on p. A-76 of the Aug. 1975 Bulletin because this table
includes banks in Puerto Rico and the Virgin Islands but excludes banks
and trust companies on which no checks are drawn.

A 78

Board of Governors of the Federal Reserve System
A rthur

F.

B

u r n s,

Je f f r e y M . B
H enry C. W

Chairman

J o h n M . D e n k l e r , M anaging
R o b e r t J . L a w r e n c e , D epu ty

D irector
M anaging

D irector
A ssistan t D irector
and Program D irecto r for
Contingency Planning
W i l l i a m W . L a y t o n , D irecto r of Equal
Em ploym ent O pportunity
B r e n t o n C . L e a v i t t , Program D irector for
Banking Structure
P e t e r E . B a r n a , Program D irecto r for
Bank H olding C om pany A n alysis
G o r d o n B . G rim w o o d ,

DIVISION OF FEDERAL RESERVE BANK
OPERATIONS
R o n a l d G . B u r k e , D irecto r
J a m e s R . K u d l i n s k i , A sso cia te D irector
*E . M a u r i c e M c W h i r t e r , A sso cia te D irector
W i l l i a m H . W a l l a c e , A sso cia te D irector
W a l t e r A . A l t h a u s e n , A ssistan t D irector
C l y d e H . F a r n s w o r t h , J r . , A ssistan t D irector
H a r r y A . G u i n t e r , A ssista n t D irector
T h o m a s E. M e a d , A ssistan t D irector
P. D . R i n g , A ssistan t D irecto r

Vice Chairman
C. H o l l a n d
C. J a c k s o n , J r .

it c h e l l ,

R obert
P h il ip

a l l ic h

OFFICE OF M ANAGING DIRECTOR
FOR OPERATIONS




G eorge W . M

ucher

E.

P h il ip

C oldw ell

OFFICE OF MANAGING DIRECTOR FOR
RESEARCH AND ECONOMIC POLICY

OFFICE OF BOARD MEMBERS
T h o m a s J . O ’C o n n e l l ,

Counsel to the

Chairman
R o b e r t S o l o m o n , A d viser to the B oard
J o s e p h R . C o y n e , A ssistan t to the B oard
K e n n e t h A . G u e n t h e r , A ssistan t to the B oard
J o h n S . R i p p e y , A ssistan t to the B oard
J a y P a u l B r e n n e m a n , Special A ssistan t to the

Board
J o h n J . H a r t , Special A ssistan t to the
F r a n k O ’B r i e n , J r . , Special A ssistan t

B oard
to the

J. C h a r l e s P a r t e e , M anaging D irector
S t e p h e n H . A x i l r o d , A d viser to the B oard
A r t h u r L . B r o i d a , A ssistan t to the B oard
S t a n l e y J. S i g e l , A ssistan t to the B oard
M u r r a y A l t m a n n , Special A ssistan t to the
B oard
N o r m a n d R . V. B e r n a r d , Special A ssistant
to the B oard

B oard
D o n a l d J. W i n n ,

Special A ssistan t to the

B oard

LEGAL DIVISION
J o h n D . H a w k e , J r . , G en eral C ounsel
J o h n N i c o l l , D eputy G eneral Counsel
B a l d w i n B . T u t t l e , A ssistan t G eneral

Counsel
A ssistan t to the
General Counsel
A l l e n L. R a i k e n , A d viser
G a r y M . W e l s h , A d viser
C h a rle s R. M c N e ill,

DIVISION OF RESEARCH AND STATISTICS
L y l e E . G r a m l e y , D irector
P e t e r M . K e i r , A d viser
J a m e s L . K i c h l i n e , A d viser
J o s e p h S . Z e i s e l , A d viser
J a m e s B . E c k e r t , A ssociate A d viser
E d w a r d C . E t t i n , A ssociate A d viser
J o h n H . K a l c h b r e n n e r , A sso cia te A d viser
J o h n J . M i n g o , A ssociate A d viser
E l e a n o r J . S t o c k w e l l , A ssociate A d viser
R o b e r t M . F i s h e r , A ssistan t A d viser
J . C o r t l a n d G . P e r e t , A ssistan t A d viser
S t e p h e n P . T a y l o r , A ssistan t A d viser
H e l m u t F . W e n d e l , A ssistan t A d viser
L e v o n H . G a r a b e d i a n , A ssistan t D irector

DIVISION OF DATA PROCESSING

OFFICE OF SAVER AND CONSUMER AFFAIRS

C h a r l e s L. H a m p t o n , D irector
B r u c e M . B e a r d s l e y , A ssociate D irector
G l e n n L. C u m m i n s , A ssistan t D irector
W a r r e n N . M i n a m i , A ssistan t D irector
R o b e r t J . Z e m e l , A ssistan t D irector

A ssistan t to the
B o a rd and D irector
J a n e t O. H a r t , D eputy D irector
R o b e r t S . P l o t k i n , A ssistan t D irector

OFFICE OF THE SECRETARY

DIVISION OF PERSONNEL
K e i t h D . E n g s t r o m , D irector
C h a r l e s W . W o o d , A ssistan t

D irector

OFFICE OF THE CONTROLLER
J o h n K a k a l e c , C ontroller
T y l e r E . W i l l i a m s , J r . , A ssistan t

Controller

W a l t e r W . K r e i m a n n , D irector
D o n a l d E . A n d e r s o n , A ssistan t D irector
J o h n D . S m i t h , A ssistan t D irector

B r e n t o n C . L e a v i t t , D irector
F r e d e r i c k R . D a h l , A ssistan t D irector
J a c k M . E g e r t s o n , A ssistan t D irector
J o h n N . L y o n , A ssistan t D irector
J o h n T . M c C l i n t o c k , A ssistan t D irector
T h o m a s A . S i d m a n , A ssistan t D irector
W i l l i a m W . W i l e s , A ssistan t D irector
J o h n E . R y a n , A d viser
t O n loan from the Federal Reserve Bank of Dallas.

A 79




T h e o d o r e E . A l l i s o n , Secretary
G r i f f i t h L . G a r w o o d , A ssistan t Secretary
t R o b e r t S m i t h III, A ssistan t Secretary

R a l p h C . B r y a n t , D irector
J o h n E . R e y n o l d s , A sso cia te D irector
R o b e r t F . G e m m i l l , A d viser
R e e d J . I r v i n e , A d viser
* H e l e n B . J u n z , A d viser
S a m u e l P i z e r , A d viser
G e o r g e B . H e n r y , A ssociate A d viser
C h a r l e s J . S i e g m a n , A ssistan t A dviser
E d w i n M . T r u m a n , A ssistan t A dviser

DIVISION OF BANKING SUPERVISION
AND REGULATION

DIVISION OF ADMINISTRATIVE SERVICES

*O n leave of absence.

F r e d e r ic S o lo m o n ,

DIVISION OF INTERNATIONAL FINANCE

A 80

Federal Open Market Committee
A r t h u r F . B u r n s , Chairman
E r n est T . B a u g h m a n
Je f f r e y M . B u c h e r
P h ilip E . C o l d w e l l

P a u l A . V o l c k e r , Vice Chairman

D a v id P . E a s t b u r n
R obert C . H o l l a n d
B r u c e K. M a c L a u r y
R obert P. M ayo

G eo rg e W . M it c h e l l
H e n r y C . W a l l ic h
P h ilip C . J a c k s o n , Jr.

Econom ist
(Dom estic Business)
R o b e r t S o l o m o n , Econom ist
(International Finance)
E d w a r d G . B o e h n e , A ssociate Econom ist
R a l p h C . B r y a n t , A ssociate Econom ist
R i c h a r d G . D a v i s , A ssociate Econom ist
R a l p h T . G r e e n , A sso cia te Econom ist
J o h n K a r e k e n , A ssociate Econom ist
J o h n E . R e y n o l d s , A sso cia te Econom ist
K a r l O . S c h e l d , A ssociate Econom ist

Secretary
D eputy Secretary
N o r m a n d R . V. B e r n a r d , A ssistan t
Secretary
T h o m a s J . O ’C o n n e l l , G eneral Counsel
E d w a r d G . G u y , D eputy G eneral Counsel
J o h n N i c o l l , A ssistan t General Counsel
J . C h a r l e s P a r t e e , Senior Econom ist
S t e p h e n H . A x i l r o d , Econom ist
(D om estic Finance)

L y le E . G ra m le y ,

A r t h u r L . B ro id a ,
M u rra y A ltm a n n ,

M an ager, System Open M arket A ccount
D eputy M anager for D om estic O perations
S c o t t E . P a r d e e , D eputy M anager fo r Foreign O perations

A la n R . H o lm e s ,

P e te r D. S te rn lig h t,

Federal Advisory Council
T h o m a s I. S t o r r s , f i f t h
G

eorge

B. Rockw

e l l , f ir s t f e d e r a l

Edw

RESERVE DISTRICT
seco n d

fed era l

RESERVE DISTRICT

ltz

,

t h ir d

rence

A. M

il l ia m

F. M

fo u rth

eorge

H. D

ix o n

,

n in t h

fed era l

d a m s, ten th

B en F. L o v e ,

fed era l

eleventh

,

s ix t h

J am es B . M

federal

fed era l

fed era l

ayer, tw elfth

RESERVE DISTRICT
,

seventh

fed era l

RESERVE DISTRICT




fed er a l

RESERVE DISTRICT

e r r ig a n

urray

e ig h t h

RESERVE DISTRICT

RESERVE DISTRICT
W

G

E ugene H . A

fed era l

RESERVE DISTRICT
Law

S. Jo n e s,

RESERVE DISTRICT

RESERVE DISTRICT
C l a ir E . F u

in

RESERVE DISTRICT

E llm ore C . P a tter so n ,
J a m es F . B o d in e ,

President

f e d e ra l re se rv e d is tric t,

H erb ert
W illia m

V. P r o c h n o w , Secretary
A ssociate Secretary

J. K o r s v ik ,

federal

A 81

Federal Reserve Banks, Branches, and Offices
FEDERAL RESERVE BANK,
branch, or facility
Zip

Chairman
Deputy Chairman

President
First Vice President

BOSTON* ...............

02106

Louis W. Cabot
Robert M. Solow

Frank E. Morris
James A. McIntosh

NEW YORK*

10045

Roswell L. Gilpatric
Frank R. Milliken
Donald Nesbitt

Paul A. Volcker
Richard A. Debs

Buffalo ................. ..14240

Ronald B. Gray

PHILADELPHIA

19105

John R. Coleman
Edward J. Dwyer

David P. Eastburn
Mark H. Willes

CLEVELAND*

44101

Horace A. Shepard
Robert E. Kirby
Phillip R. Shriver
G. Jackson Tankersley

Willis J. Winn
Walter H. MacDonald

Robert W. Lawson, Jr.
E. Craig Wall, Sr.
James G. Harlow
Charles W. DeBell

Robert P. Black
George C. Rankin

Cincinnati ............
Pittsburgh ............

45201
15230

RICHMOND* ............ 23261
Baltimore ................. 21203
Charlotte .................28201
Culpeper Communications
Center ................. 22701
ATLANTA ..............

30303

Birmingham .........
Jacksonville .........
Miami ...................
Nashville ..............
New Orleans ........

35202
32203
33152
37203
70161

CHICAGO* ............

60690

Detroit ...................

48231

ST. LOUIS ..............

63166

Little Rock ...........
Louisville ............
Memphis ..............

72203
40201
38101

MINNEAPOLIS
Helena ...................
KANSAS CITY

55480
59601
64198

Denver .................
Oklahoma City ....
Omaha .................

80217
73125
68102

DALLAS .................

75222

El Paso .................
Houston ...............
San Antonio .........

79999
77001
78295

SAN FRANCISCO .. ..94120
Los Angeles ......... 90051
Portland ............... 97208
Salt Lake City .... 84110
Seattle ................... ..98124

Vice President
in charge of branch

Robert E. Showalter
Robert D. Duggan

Jimmie R. Monhollon
Stuart P. Fishburne
John G. Stoides

H. G. Pattillo
Clifford M. Kirtland, Jr.
Frank P. Samford, Jr.
James E. Lyons
Castle W. Jordan
John C. Tune
Floyd W. Lewis

Monroe Kimbrel
Kyle K. Fossum

Peter B. Clark
Robert H. Strotz
W. M. Defoe

Robert P. Mayo
Daniel M. Doyle

Edward J. Schnuck
Sam Cooper
Ronald W. Bailey
James H. Davis
Jeanne L. Holley

Darryl R. Francis
Eugene A. Leonard

Bruce B. Dayton
James P. McFarland
William A. Cordingley

Bruce K. MacLaury
Clement A. Van Nice

Robert T. Person
Harold W. Andersen
Maurice B. Mitchell
James G. Harlow, Jr.
Durward B. Varner

George H. Clay
John T. Boysen

John Lawrence
Charles T. Beaird
Herbert M. Schwartz
Thomas J. Barlow
Pete J. Morales, Jr.

Ernest T. Baughman
T. W. Plant

O. Meredith Wilson
Joseph F. Alibrandi
Joseph R. Vaughan
Loran L. Stewart
Sam Bennion
Malcolm T. Stamper

John J. Balles
John B. Williams

Hiram J. Honea
Edward C. Rainey
W. M. Davis
Jeffrey J. Wells
George C. Guynn

William C. Conrad

John F. Breen
Donald L. Henry
L. Terry Britt

Howard L. Knous

J. David Hamilton
William G. Evans
Robert D. Hamilton

Fredric W. Reed
James L. Cauthen
Carl H. Moore

Richard C. Dunn
Angelo S. Carella
A. Grant Holman
James J. Curran

* Additional offices of these Banks are located at Lewiston, M aine 04240; W indsor Locks, Connecticut 06096; Cranford,
New Jersey 07016; Jericho, New York 11753; Colum bus, Ohio 43216; Colum bia, South Carolina 29210; Des M oines, Iowa
50306; Indianapolis, Indiana 46204; and M ilwaukee, W isconsin 53202.




A 82

Federal Reserve Board Publications
A vailable from Publications Services, D ivision of A d ­
m inistrative Services, B oard of G overnors of the Fed­
eral R eserve System , W ashington, D .C . 20551. W here
a charge is indicated, rem ittance should accom pany

request and be made p a yable to the order o f the B oard
of G overnors of the F ederal R eserve System in a form
collectible at p a r in U .S. currency. (Stam ps and
coupons are not accepted.)

T he

I ndustrial P roduction — 1971 E d it io n . 1972. 383
pp. $4.0 0 each; 10 or more to one address, $3.5 0
each.
T he P erformance of B a nk H olding C om panies .
1967. 29 pp. $.25 each; 10 or more to one address,
$ .20 each.
B ank C redit -C ard a n d C heck -C redit P l a n s . 1968.
102 pp. $ 1 .0 0 each; 10 or more to one address,
$.85 each.
S urvey of F inancial C haracteristics of C o n ­
sum ers . 1966. 166 pp. $1.0 0 each; 10 or more
to one address, $.85 each.
S urvey of C hanges in F amily F in a n c e s . 1968. 321
pp. $1.00 each; 10 or more to one address, $.85
each.
R eport of the Joint T reasury -F ederal R eserve
S t udy of the U .S . G overnm ent S ecurities
M ark et . 1969. 48 pp. $.25 each; 10 or more to
one address, $ .20 each.
Joint T reasury -F ederal R eserve S tu dy of T he
G overnm ent S ecurities M arket : S taff S t u d ­
ies— P art 1. 1970. 86 pp. $ .5 0 each; 10 or more
to one address, $ .4 0 each. P art 2. 1971. 153 pp.
and P art 3. 1973. 131 pp. Each volum e $1.00;
10 or more to one address, $.85 each.
O pen M arket P olicies a n d O perating P roce ­
dures — S taff S t u d ie s . 1971. 218 pp. $2.0 0
each; 10 or more to one address, $1.75 each.
R eappraisal of the F ederal R eserve D iscount
M echanism . V ol. 1. 1971. 276 pp. V ol. 2. 1971.
173 pp. V ol. 3. 1972. 220 pp. Each volum e $3.00;
10 or more to one address, $2.5 0 each.
T he E conometrics of P rice D etermination C o n ­
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Oct. 1972. 397 pp. Cloth ed. $5.0 0 each; 10 or
more to one address, $ 4 .5 0 each. Paper ed. $4.00
each; 10 or more to one address, $3.6 0 each.
F ederal R eserve S taff S t u d y : W ays to M oderate
F luctuatio ns in H ousing C o n stru c tio n , D ec.
1972. 487 pp. $ 4 .0 0 each; 10 or more to one
address, $ 3 .6 0 each.
L ending F u nctions of the F ederal R eserve
B a n k s : A H istory , by Howard H. H ackley. 1973.
271 pp. $3.5 0 each; 10 or more to one address,
$3.00 each.
Introduction to F low of F u n d s . 1975. 64 pp. $ .50
each; 10 or more to one address, $ .4 0 each.
Improved F u n d A vailability at R ural B anks (R e­
port and study papers of the Committee on Rural
Banking Problems). June 1975. 133 pp. $1.00; 10
or more to one address, $.85 each.

F ederal R eserve S ystem — P urposes a nd
F u n c t io n s . 1974. 125 pp. $ 1 .0 0 each; 1 0 or more
to one address, $.75 each.
A n n u a l R eport

F ederal R eserve B u l l e t in . M onthly. $20 .0 0 per
year or $ 2 .0 0 each in the United States and its
possessions, and in B olivia, Canada, Chile, C o­
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same issue to one address, $ 18.00 per year or $1.75
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F ederal R eserve C hart B ook on F inancial a nd
B u siness S ta tistics . M onthly. Subscription in­
cludes one issue of Historical Chart Book. $12.0 0
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the countries listed above; 10 or more of same issue
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H istorical C hart B o o k . Issued annually in Sept.
Subscription to monthly chart book includes one
issue. $1.25 each in the United States and countries
listed above; 10 or more to one address, $1.0 0
each. Elsewhere, $ 1 .5 0 each.
T he F ederal R eserve A c t , as amended through D e­
cember 1971, with an appendix containing provi­
sions of certain other statutes affecting the Federal
Reserve System . 252 pp. $1.25.
R egulations of the B oard of G overnors of the
F ederal R eserve S ystem
P ublished Interpretations of the B oard of G ov ­
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S upplem ent to B ank ing a nd M onetary S tatistics .
S ec. 1. Banks and the Monetary System . 1962.
35 pp. $ .35. Sec. 2. Member Banks. 1967. 59
pp. $.50. Sec. 5. Bank Debits. 1966. 36 pp. $.35.
Sec. 6. Bank Incom e. 1966. 29 pp. $.35. Sec.
9 . Federal Reserve Banks. 1965. 36 pp. $ .3 5 . Sec.
10. Member Bank Reserves and Related Items.
1962. 64 pp. $.50. S ec. 11. Currency. 1963. 11
pp. $ .35. Sec. 12. M oney Rates and Securities
Markets. 1966. 182 pp. $ .65. Sec. 14. Gold. 1962.
24 pp. $.35. Sec. 15. International Finance. 1962.
92 pp. $.65. Sec. 16 (N ew ). Consumer Credit.
1965. 103 pp. $.65.
T he F ederal F u n d s M ark et . 1959. I l l pp. $1.0 0
each; 10 or more to one address, $.85 each.
T rading in F ederal F u n d s . 1965. 116 pp. $1.0 0
each; 10 or more to one address, $.85 each.




Federal R eserve B oard Publications

STAFF ECONOM IC STUDIES
Studies and p a p ers on econom ic and financial subjects
that are o f general interest in the field o f econom ic
research.
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 ited supply o f m im eographed copies o f full
text available upon request fo r single copies)
T he Impact of H olding C om pany A cquisitions on
A ggregate C oncentratio n in B a n k in g , by
Samuel H. Talley. Feb. 1974. 24 pp.
O perating P olicies of B ank H olding C om panies —
P art II: N o n ba nk in g S u bsidiaries , by Robert J.
Lawrence. Mar. 1974. 59 pp.
H ou seh o ld -S ector E conomic A c c o u n ts , by David
F. Seiders. Jan. 1975. 84 pp.
T he P erformance of In d iv id u a l B ank H olding
C o m pa nies , by Arthur G. Fraas. Aug. 1975. 27
pp.
P r in t e d

in

Full

in t h e

B u l l e t in

Staff E conom ic Studies shown in list b elo w .
REPRINTS
(Except fo r Staff P apers, Staff E conom ic Studies, and
som e leading articles, m ost o f the articles reprinted do
not exceed 12 p a g e s.)
S easo nal F actors A ffecting B ank R eserves . 2/58.
M easures of M ember B ank R eserves . 7/63.
R esearch on B ank ing S tructure a n d P erform ­
a n c e , Staff E con om ic Study by Tynan Smith.
4/66.
A R evised In dex of M a n u fa c tur ing C apacity ,
Staff E con om ic S tu dy by Frank de Leeuw with
Frank E. Hopkins and M ichael D . Sherman. 11/66.
U .S . In tern a tio n a l T r an sac tio n s : T rends in
1 9 60-67. 4/68.
E uro -D ollars : A C h a n g ing M a rk et . 10/69.
R ecent C hanges in S tructure of C ommercial
B a n k in g . 3/70.
M easures of S ecurity C r edit . 12/70.
M o netary A ggregates a n d M o ney M arket C o n ­
ditions in O pen M arket P o lic y . 2/71.
Interest R a tes , C redit F lo w s , a n d M onetary A g ­
gregates S ince 1964. 6/71.




A 83

I ndustrial P roduction — R evised a n d N ew M eas ­
u r e s . 7/71.
R evised M easures of M a nu fa c t ur ing C apacity
U t il iz a t io n . 10/71.
R evision of B ank C redit S eries . 12/71.
A ssets a n d L iabilities of F oreign B ranches of
U .S . B a n k s . 2/72.
B ank D ebits , D eposits , a n d D eposit T u rnover —
R evised S eries . 7/72.
Y ields on N ew ly I ssued C orporate B o n d s . 9/72.
R ecent A ctivities of F oreign B ranches of U .S .
B a n k s . 10/72.
R evision of C onsum er C redit S tatistics . 10/72.
O n e -B ank H olding C om panies B efore the 1970
A m en d m en ts . 12/72.
Y ields on R ecently O ffered C orporate B o n d s .
5/73.
C apacity U tilization in M ajor M aterials I n d u s ­
tries . 8/73.
C redit -C ard a n d C heck -C redit P l a ns at C ommer ­
cial B a n k s . 9/73.
R ates on C onsum er I n stalm ent L o a n s . 9/73.
N ew S eries for L arge M anu fa c tur ing C orpora ­
t io n s . 10/73.
M on ey S upply in the C ond uc t of M onetary
P olicy . 11/73.
U .S . E nergy S upplies a n d U ses , Staff E con om ic
Stu dy by Clayton Gehman. 12/73.
C apacity U tilization for M ajor M aterials : R e ­
vised M easu r es . 4/74.
N umerical S pecifications of F ina n cia l V ariables
a n d T heir R ole in M onetary P olic y . 5/74.
Infla tio n a n d S ta gn ation in M ajor F oreign I n ­
dustrial C o u n t r ie s . 10/74.
R evision of the M o ney S tock M easures a n d M em ­
ber B ank D eposits . 12/74.
C hanges in T ime a n d S avings D eposits at C om ­
mercial B a n k s , A pril - J uly 1974. 1/75.
U .S . I ntern a tio na l T ransactions in 1974. 4 /7 5 .
M onetary P olicy in a C h a n g ing F ina n cia l E n v i ­
ro n m e n t : O pen M arket O perations in 1974.
4/75.
T he S tructure of M argin C r edit . 4/7 5 .
C hanges in B ank L en din g P ractices , 1974. 4 /7 5 .
N ew S tatistical S eries on L oan C ommitments at
S elected L arge C ommercial B a n k s . 4/7 5 .
R ecent T rends in F ederal B udg et P olic y . 7 /75.
B a nk ing a n d M onetary S tatistics , 1974. Selected
series of banking and monetary statistics for 1974
only. 2/7 5 , 3 /7 5 , 4 /75 and 7 /75.

A 84

Federal Reserve Bulletin □ August 1975

Index to Statistical Tables
R eferen ces are to p ages A -2 th rough A -77 alth ou gh the prefix “ A ” is om itted in this ind ex

(For list of tables published periodically, but not m onthly, see inside back cover)
AC CEPTANC ES, bankers, 9, 25, 27
Agricultural loans of commercial banks, 16, 18
A ssets and liabilities (See also Foreigners):
Banks, by classes, 14, 16, 17, 18, 30
Federal Reserve Banks, 10
Nonfinancial corporations, current, 41
Automobiles:
Consumer instalment credit, 4 5 , 4 6 , 47
Production index, 4 8 , 49
BA N K credit proxy, 13
Bankers balances, 16, 17, 20
(See also Foreigners)
Banking offices:
Changes in number, 76
Par and nonpar, number, 77
Banks for cooperatives, 38
Bonds (See also U .S . G ovt, securities):
N ew issu es, 38, 39, 40
Y ields and prices, 28, 29
Branch banks:
A ssets, foreign branches of U .S . banks, 70
Liabilities of U .S . banks to their foreign branches
and foreign branches of U .S . banks, 22, 71
Brokerage balances, 69
Business expenditures on new plant and equipment, 41
Business indexes, 50
Business loans (See Commercial and industrial loans)
CAPACITY utilization, 50
Capital accounts:
Banks, by classes, 14, 17, 22
Federal Reserve Banks, 10
Central banks, 60, 75
Certificates of deposit, 22
Commercial and industrial loans:
Commercial banks, 13, 16
W eekly reporting banks, 18, 23
Commercial banks:
A ssets and liabilities, 13, 14, 16, 17, 18
Banking offices, changes in number, 76
Consumer loans held, by type, 45
D eposits at, for payment of personal loans, 24
Loans sold outright, 25
Number, by classes, 14
Real estate mortgages held, by type of holder and
property, 4 2 ^ -4
Commercial paper, 23, 25, 27
Condition statements (See A ssets and liabilities)
Construction, 50, 51
Consumer credit:
Instalment credit, 4 5 , 4 6 , 47
Noninstalment credit, 45
Consumer price indexes, 50, 53
Consumption expenditures, 54, 55
Corporations:
Profits, taxes, and dividends, 41
Security issues, 39, 40
Security yields and prices, 28, 29
Cost of living (See Consumer price indexes)
Currency and coin, 3, 16
Currency in circulation, 3, 12
Customer credit, stock market, 29, 30




DEBITS to deposit accounts, 11
Debt (See specific types o f d eb t or securities)
Demand deposits:
Adjusted, commercial banks, 11, 13, 17
Banks, by classes, 14, 17, 20, 21
Ownership by individuals, partnerships, and cor­
porations, 24
Subject to reserve requirements, 13
Turnover, 11
D eposits (See also specific types o f deposits):
Accumulated at com mercial banks for payment of
personal loans, 24
Banks, by classes, 14, 17, 20, 21, 30
Federal Reserve Banks, 10, 72
Subject to reserve requirements, 13
Discount rates at Federal Reserve Banks (See Interest
rates)
Discounts and advances by Reserve Banks (See Loans)
D ividends, corporate, 41
EM PLO YM ENT, 50, 52
FARM mortgage loans, 42
Federal agency obligations, 9 , 10, 11
Federal finance:
Receipts and outlays, 32, 33
Treasury operating balance, 32
Federal funds, 5, 16, 18, 21, 27
Federal home loan banks, 37, 38
Federal Home Loan M ortgage Corporation, 37, 4 2 , 43
Federal H ousing Administration, 4 2 , 4 3 , 44
Federal intermediate credit banks, 37, 38
Federal land banks, 37, 38, 42
Federal National M ortgage A ssn ., 37, 38, 4 2 , 4 3 , 44
Federal Reserve Banks:
Condition statement, 10
U .S . Govt, securities held, 2, 10, 11, 34, 35
Federal Reserve credit, 2, 4 , 10, 11
Federal Reserve notes, 10
Federally sponsored credit agencies, 37, 38
Finance companies:
Loans, 18, 4 6 , 47
Paper, 25, 27
Financial institutions, loans to, 16, 18
Float, 2
Flow of funds, 56, 57
Foreign:
Currency operations, 9 , 10
Deposits in U .S . banks, 3, 10, 17, 21, 72
Exchange rates, 75
Trade, 59
Foreigners:
Claims on, 66, 67, 68, 72, 73, 74
Liabilities to, 22, 61, 62, 6 4 , 65, 7 2 , 7 3 , 74
GOLD.
Certificates, 10
Earmarked, 72
Reserves of central banks and go v ts., 60
Stock, 2, 59
Government National M ortgage A ssn ., 42
Gross national product, 54, 55

A 85

R eferen ces are to pages A -2 th rou gh A -77 alth ou gh the prefix “ A ” is om itted in th is in d ex
H OUSING permits, 50
Housing starts, 51

Production, 4 8 , 4 9 , 50
Profits, corporate, 41

INCOM E, national and personal, 54, 55
Industrial production index, 4 8 , 4 9 , 50
Instalment loans, 4 5 , 46, 47
Insurance com panies, 31, 34, 35, 4 2 , 44
Insured commercial banks, 14, 16, 17, 24, 76
Interbank deposits, 14, 20
Interest rates:
Bond and stock yields, 28
Business loans of banks, 26
Federal Reserve Banks, 6
Foreign countries, 74, 75
M oney market rates, 27
M ortgage yields, 43, 44
Prime rate, com mercial banks, 26
Time and savings deposits, maximum rates, 8
International capital transactions of U .S ., 6 1 -7 4
International institutions, 6 0 -6 4 , 66, 6 7 -6 9 , 73
Inventories, 54
Investment com panies, issues and assets, 40
Investments (See also specific types o f investm ents):
Banks, by classes, 14, 16, 19, 30
Commercial banks, 13
Federal Reserve Banks, 10, 11
Life insurance com panies, 31
Savings and loan assns., 31

REAL estate loans:
Banks, by classes, 16, 18, 30, 42
M ortgage yields, 4 3 , 44
Type of holder and property
mortgaged, 42-A 4
Reserve position, basic, member banks, 5
Reserve requirements, member banks, 7
Reserves:
Central banks and go v ts., 60
Commercial banks, 17, 20, 22
Federal Reserve Banks, 10
Member banks, 3, 4 , 13, 17
U .S . reserve assets, 59
Residential mortgage loans, 43, 44
Retail credit, 4 5 , 4 6 , 47
Retail sales, 50

LABO R force, 52
Life insurance com panies (See Insurance com panies)
Loans (See also specific types o f loans):
Banks, by classes, 14, 16, 18, 30
Commercial banks, 13, 14, 16, 18, 23, 25, 26
Federal Reserve Banks, 2, 4 , 6, 10, 11
Insurance com panies, 31, 44
Insured or guaranteed by U .S ., 42, 4 3 , 44
Savings and loan assns., 31
M ANU FA CTUR ERS:
Capacity utilization, 50
Production index, 4 9 , 50
Margin requirements, 8
M ember banks:
A ssets and liabilities, by classes, 14, 16, 17
Banking offices, changes in number, 76
Borrowings at Federal Reserve Banks, 4 , 10
Number, by classes, 14
Reserve position, basic, 5
Reserve requirements, 7
Reserves and related item s, 2, 4 , 13
M ining, production index, 49
M obile hom e shipments, 51
M oney market rates (See Interest rates)
M oney stock and related data, 12
M ortgages (See Real estate loans and Residential
mortgage loans)
Mutual funds (See Investment com panies)
Mutual savings banks, 20, 30, 34, 4 2 , 44, 76
N A TIO NAL banks, 14, 24, 76
National defense expenditures, 33
National incom e, 54, 55
Nonm ember banks, 15, 16, 17, 24, 76
OPEN market transactions, 9
PAR and nonpar banking offices, number, 77
Payrolls, manufacturing index, 50
Personal incom e, 55
Prices:
Consumer and w holesale com m odity, 50, 53
Security, 29
Prime rate, commercial banks, 26




SAVING:
Flow of funds series, 56, 57
National incom e series, 54, 55
Savings and loan assns., 31, 35, 4 2 , 44
Savings deposits (See Tim e deposits)
Savings institutions, principal assets, 30, 31
Securities (See also U .S . G ovt, securities):
Federally sponsored agencies, 37, 38
International transactions, 68, 69
N ew issues, 38, 39, 40
Y ields and prices, 28, 29
Special Drawing Rights, 2, 10, 58, 59
State and local govts.:
D eposits, 17, 20
Holdings of U .S . Govt, securities, 34, 35
N ew security issues, 38, 39
Ownership of securities o f, 16, 19, 30
Y ields and prices of securities, 28, 29
State member banks, 15, 24, 76
Stock market credit, 29, 30
Stocks (See also Securities):
N ew issues, 39, 40
Yields and prices, 28, 29
TAX receipts, Federal, 33
Time deposits, 8, 13, 14, 17, 21, 22
Treasury currency, Treasury cash, 2, 3
Treasury deposits, 3, 10, 32
Treasury operating balance, 32
UNEM PLO YM ENT, 52
U .S . balance of paym ents, 58
U .S . Govt, balances:
Commercial bank holdings, 17, 20
Member bank holdings, 13
Treasury deposits at Reserve Banks, 3, 10, 32
U .S . Govt, securities:
Bank holdings, 14, 16, 19, 30, 34, 35
Dealer transactions, positions, and financing, 36
Federal Reserve Bank holdings, 2, 10, 11, 34, 35
Foreign and international holdings, 10, 66, 68, 72
International transactions, 66, 68
N ew issues, gross proceeds, 39
Open market transactions, 9
Outstanding, by type of security, 34, 35
O wnership, 34, 35
Yields and prices, 28, 29
U tilities, production index, 49
VETERANS Administration, 4 3 , 44
W EEKLY reporting banks, 18-22
YIELDS (See Interest rates)

A 86

The Federal Reserve System
B o u n d a r i e s o f F e d e r a l R e s e r v e D is t r ic t s a n d T h e ir B r a n c h T e r r it o r ie s

LEGEND
—

Boundaries of Federal Reserve Districts

----- Boundaries of Federal Reserve Branch
Territories
©

Board of Governors of the Federal
Reserve System




®

Federal Reserve Bank Cities

•

Federal Reserve Branch Cities
Federal Reserve Bank Facility

G u i d e t o T a b u la r P r e s e n t a t io n
SYMBOLS AND ABBREVIATIONS
e
c
P
r
rP
I, II,
III, IV
n .e.c.
A .R .
S .A .

N .S .A .

Estimated
Corrected
Preliminary
R evised
Revised preliminary
Quarters
Not elsew here classified
Annual rate
M onthly (or quarterly) figures adjusted for
seasonal variation

IPC
SM SA
A
L
S
U
*

M onthly (or quarterly) figures not adjusted
for seasonal variation
Individuals, partnerships, and corporations
Standard metropolitan statistical area
Assets
Liabilities
Sources of funds
U ses of funds
Amounts insignificant in terms of the partic­
ular unit (e .g ., less than 500 ,0 0 0 when
the unit is m illions)
(1) Zero, (2) no figure to be expected, or
(3) figure delayed

GENERAL INFORMATION
M inus signs are used to indicate (1) a decrease, (2)
a negative figure, or (3) an outflow.
A heavy vertical rule is used in the follow ing in­
stances: (1) to the right (to the left) of a total when
the components shown to the right (left) of it add to
that total (totals separated by ordinary rules include
more com ponents than those show n), (2) to the right
(to the left) of items that are not part of a balance sheet,
(3) to the left of memorandum items.
“ U .S . Govt, securities” may include guaranteed
issues of U .S . Govt, agencies (the flow of funds figures

also include not fully guaranteed issues) as w ell as direct
obligations of the Treasury. “ State and local g o v t.”
also includes m unicipalities, special districts, and other
political subdivisions.
In som e of the tables details do not add to totals
because of rounding.
The footnotes labeled N o t e (which always appear
last) provide (1) the source or sources of data that do
not originate in the System ; (2) notice when figures
are estimates; and (3) information on other charac­
teristics of the data.

TABLES PUBLISHED QUARTERLY, SEMIANNUALLY, OR ANNUALLY,
WITH LATEST BULLETIN REFERENCE
Q u a rte rly
S ales, revenue, profits, and
dividends o f large m anu­
facturing corporations ___

Issue

P age

A n n u ally— C ontinued
Banks and branches, number,
by class and State ............

July 1975

Page

Apr. 1975

A -76— A -77

A -7 6

Sem iannually
Number o f banking offices:
A nalysis o f changes ........ A ug. 1975
O n, and not on , Federal
R eserve Par List ............ A ug. 1975

Issue

A -7 6
A -77

R o w o f funds:
A ssets and liabilities:
1 9 6 2 -7 3 ........................... .... Oct. 1974 A -5 9 .1 4 — A -5 9 .2 8
Flows:
1 9 6 5 -7 3

........................... .... Oct. 1974

A -58— A -5 9 .1 3

A nnu ally
Bank holding com panies:
Banking offices and depos­
its o f group banks, D ec.
3 1 , 1974 ...........................

June 1975

Banking and monetary statistics:
1974 ......................................... Feb.
Mar.
Apr.
M ay
July

1975
1975
1975
1975
1975

A -7 6 — A -7 9
A -8 4 — A -85
A -7 9 — A -82
A -7 8 — A -85
337
A -77

Incom e and expenses:
Federal R eserve Banks
Feb.
Insured com m ercial banks June
M em ber banks:
Calendar year ..................... June
Incom e ratios ................. ... June
Operating ratios ................Sept.

1975
1975

A -80— A-81
A -80— A - 8 1

1975
1975
1974

A -80— A -89
A -90— A -95
A -8 0 — A -85

Stock market credit ................... Feb.

1975

A -8 6 — A -87

S ta tis tic a l R e le a s e s
LIST PUBLISHED SEM IANNUALLY, WITH LATEST BULLETIN REFERENCE
A nticipated schedule o f release dates for individual releases




........................................................................

Issue
June 1975

P age
A -101