Full text of Federal Reserve Bulletin : July 1977
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JULY 1977 Recent Labor Market Trends Insured Commercial Bank Income in 1976 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 additional copies may secure them at a special $10.00 annual rate. The regular subscription price in the United States and its possessions, and in Bolivia, Canada, Chile, Colombia, Costa Rica, Cuba, Dominican Republic, Ecuador, Guatemala, Haiti, Republic of Honduras, Mexico, Nicaragua, Panama, Paraguay, Peru, El Salvador, Uruguay, and Venezuela is $20.00 per annum or $2.00 per copy; elsewhere, $24.00 per annum or $2.50 per copy. Group subscriptions in the United States for 10 or more copies to one address, $1.75 per copy per month, or $18.00 for 12 months. The B u l l e t i n may be obtained from the Division of Administrative Services, Board of Governors of the Federal Reserve System, Washington, D.C. 20551, and remittance should be made payable to the order of the Board of Governors of the Federal Reserve System in a form collectible at par in U.S. currency. (Stamps and coupons are not accepted.) NUMBER 7 □ VOLUME 63 □ JULY 1977 FEDERAL RESERVE BULLETIN Board of Governors of the Federal Reserve System Washington, D.C. PUBLICATIONS COMMITTEE Stephen H. Axilrod □ Joseph R. Coyne □ John M. Denkler □ Janet O. Hart John D. Hawke, Jr. □ James L. Kichline □ Edwin M. Truman Richard H. Puckett, Staff Director The Federal Reserve B u l l e t i n is issued monthly under the direction of the sta ff publications committee. This committee is responsible for opinions expressed except in official statements and signed articles. Direction for the art work is provided by Mack R. Rowe. Editorial support is furnished by the Economic Editing Unit headed by Elizabeth B. Sette. Table of Contents 617 Recent L abor M arket T rends 644 Philip C. Jackson, Jr., Member of the Board of Governors, affirms the support of the Board for simplification of the Truth in Lending Act in tes timony before the Consumer Affairs Subcommittee of the Committee on Banking, Finance and Urban Affairs, U.S. Senate, July 11, 1977. 651 Stephen S. Gardner, Vice Chairman of the Board of Governors, testifies in support of the International Banking Act of 1977, before the Subcommittee on Financial Institutions Supervision, Regulation and Insurance of the Committee on Banking, Finance and Urban Affairs, U. S. House of Rep resentatives, July 12, 1977. 655 R ecord Although labor market conditions have improved considerably over the past year, the Nation’s economy con tinues to be characterized by exten sive underuse of both human and physical resources. 626 I n s u r e d C o m m e r c ia l B a n k In c o m e in 1976 Net profits of insured commercial banks improved during 1976 com pared with 1975, but gains were at a rate below the yearly averages be tween 1970 and 1974. Statem ents 636 643 to C o ng ress Arthur F. Burns, Chairman of the Board of Governors of the Federal Reserve System, testifies in support of proposed legislation authorizing NOW accounts nationwide and addressing the problem of the withdrawal of banks from Federal Reserve member ship, before the Subcommittee on Financial Institutions of the Com mittee on Banking, Housing and Urban Affairs, U.S. Senate, June 20, 1977. Chairman Burns also comments on a bill to provide—beginning February 1, 1982—for a 4-year term for the Chair man and Vice Chairman of the Board of Governors to start 1 year after the inauguration of the President, before the Subcom m ittee on Dom estic Monetary Policy of the Committee on Banking, Finance and Urban Affairs, U.S. House of Representatives, June 23, 1977. of P o l ic y A c t io n s o f t h e F e d e r a l O p e n M a r k e t C o m m it t e e In the meeting held on May 17, 1977, the Committee decided that growth in M -l and Af-2 over the M ay-June period at annual rates within ranges of 0 to 4 per cent and 3Vi to IVi per cent, respectively, would be appropriate. The Committee believed that such growth rates for the mone tary aggregates would be associated with a weekly-average Federal funds rate of about 53/s per cent. The Com mittee agreed that the operational ob jective for the funds rate could be modified within a range of 5lA to 53A per cent, depending on the growth rates of the aggregates over the 2-month period. 666 Law D epartm ent Various amendments, rules, and orders. A nnouncements Amendment to Regulation J con cerning wire transfer of funds between member banks. (See Law Depart ment.) State laws making contracts en forceable against married persons at a younger age than against unmarrieds have been ruled not in conflict with the Equal Credit Opportunity Act. Changes in Board staff. Proposed bank holding company activity as futures commission mer chant. Al F in a n c ia l a n d B u s in e s s S t a t is t ic s A3 Domestic Financial Statistics A46 Domestic Nonfinancial Statistics A54 International Statistics A 70 B o a r d o f G o v er n o r s a n d St a f f A 72 O p e n M a r k e t C o m m it t e e a n d S t a f f ; F e d e r a l A d v is o r y C o u n c il A 73 F e d e r a l R eserve B a n k s a n d B ranches A 74 F ed er a l R eserve B o ard P u b l ic a t io n s One State bank admitted to Federal Reserve membership. A 7 6 I n d e x to S t a t is t ic a l T a b l e s In d u s t r ia l P r o d u c t io n A 78 Output rose in June by an estimated 0.7 per cent—the fifth consecutive monthly increase. M ap of F e d e r a l R e se r v e S y stem In s id e B a c k C o v e r : Guide to Tabular Presentation and Statistical Releases Recent Labor Market Trends This article was prepared by Joyce K. Zickler of the Wages, Prices, and Productivity Sec tion, Division of Research and Statistics . Labor market conditions have improved con siderably since the spring of 1975, but exten sive underutilization of human and physical resources in an environment of unusually large increases in labor costs and prices continues to characterize the economy. Contributing to higher unemployment in this recovery is a secular increase in the number of inexperienced job seekers and, as a conse quence, an increase in the frictional compo nent of total unemployment. Rapid labor force growth—arising from large increases in the working-age population coupled with a con tinuing tendency of married women to seek paid employment—has sharply increased the portion of the labor force that is subject to temporary unemployment. Moreover, the rise in labor force participation of second household members has accelerated, intensified in part by the economic stringencies of recent years. Re flecting these factors, the number of unem ployed workers who have just entered or re-entered the labor force has increased since the cycle trough in 1975. Although unemployment among workers who lost their last job has declined sharply during the recovery, jobless rates for these workers are still very high by historical stand ards. The atypical nature of the recovery of demand, which was mainly sustained for its first year and a half by consumption spending, coupled with the severity of the earlier cyclical contraction has left many experienced workers still jobless. Their situation seems to derive in part from the belated and moderate recovery of business investment spending. The recovery of labor demand had not, until recently, re flected the effects of a decisive upturn in plant and equipment spending. In addition, the lib eralization of income maintenance programs has reduced the cost of longer spells of job search than had been the case during earlier business cycles, and this may have contribu ted to the pattern of extended unemployment for skilled and experienced workers. The sluggish recovery of business fixed in vestment also was associated with a 6-month slowdown in the recovery of employment dur ing 1976. Slow growth of final demand and a run-up of inventories early last year was asso ciated with a reduction of almost two-thirds in the rate of growth of payroll employment. This Selected economic indicators Millions of persons 100 Ratio scale, per cent sJabbT^force 4 'V. • ’v» I I 1973 I 1975 I 1977 BLS data, seasonally adjusted. Civilian labor force, employment, and unemployment rates are monthly household data. 618 Federal Reserve Bulletin □ July 1977 slowing was concentrated in goods-producing industries, where manufacturing employ ment about leveled off from April to October 1976. However, a vigorous bounceback of consumer demand late in the year laid the groundwork for a strong expansion this year. Business spending finally began to show significant gains during the first half of this year, and the over-all growth of jobs rose to a very rapid 5 per cent annual rate. Employment in goods-producing industries, which had been hard hit during the recession, began to increase as a share of total jobs, but employment in most hard-goods industries still has not reached pre recession peaks. Increases in compensation have moderated from the double-digit rates of 1974 but still continue to outpace productivity gains by a large margin. As a result, increases in labor costs have continued to be substantial. Indeed, over the year ending in the first quarter, unitlabor-cost increases for the nonfarm business sector were near 516 per cent, as productivity gains averaged near their long-run trend pace and hourly compensation rose about 8 per cent. While wage rate increases in the first half of 1977 are in line with their 1976 pace, recent run-ups in consumer prices may place upward pressure on compensation adjustments later this year and into 1978. EMPLOYMENT Almost 6V2 million persons have joined the ranks of the employed since total employment reached its cyclical low in March 1975. Virtu ally all industrial, occupational, and demo graphic groups have shared in this expansion, and the percentage of the population with jobs was near its all-time high in June 1977. As has been true for many years, the largest absolute and relative gains in employment have been registered by adult women; the number employed rose 2.5 million (10 per cent) over the 27-month expansion period, reflecting strong, com paratively steady growth in service-oriented occupations and in dustries, which are still the strongholds of job opportunity for women. Employment of teen agers also has risen strongly, advancing by 12 per cent from March 1975 to 20.7 million in June 1977. Because youth had experienced relatively heavy job losses during the contrac tion, however, their recent employment total was less than 2 per cent higher than during early 1974. Nearly 42.9 million adult men were em ployed in June 1977, an increase of 1.8 million from March 1975. Adult men suffered the most from job loss during the recession, and their number employed in June was only 2 per cent above its pre-recession peak. By contrast, employment of adult women had risen almost 8 per cent above its pre-recession peak by June. The less dramatic gains of employment for adult men reflect their greater concentration in industries and occupations where the recovery from the last recession has been slow and uneven. The industrial and, therefore, demographic composition of employment growth has sensi tively reflected the unusual composition of growth in real gross national product since the cycle trough in the first quarter of 1975. Total output increased by 12 per cent over the 2 years ending in the first quarter of 1977, with real personal consumption showing an equal rise. Strong growth of consumption demand stimulated large job gains in private serviceproducing industries and triggered a rebound of employment in the manufacture of softgoods and autos. The dramatic recovery of residential construction activity was an im portant factor in the recovery. Purchases of plant and equipment, however, rose only 7 per cent over the 2-year period, well be low the average recovery pace for this key sector of economic activity, and this seri ously damped the recovery of employment in the manufacture of capital goods, in related supplier industries, and in nonresidential con struction. The absence of significant growth of government construction activity over the re covery period also slowed growth of em ployment in goods-producing industries. As a result of these constraints on demand and production, em ploym ent in the goodsproducing industries has yet to reach its pre recession peak. R ecen t L a b o r M arket Trends Employment by industry C h an g e from Q l 1973, m illions o f p erso n s Based on BLS data, seasonally adjusted. During the first 12 months of recovery, pro duction and total employment expanded at about the same pace as in earlier recoveries. However, capital spending remained weak, and about a year after the upturn began, expan sion in economic activity slowed significantly as moderation in the growth of final demand led to an unintended accumulation of business inventories and to subsequent cutbacks in pro duction. Although growth of nonfarm payrolls slowed to about one-third of its earlier pace, manufacturing employment was most severely affected, as layoffs were reported at textile and apparel producers, small-car assembly plants, and steel mills. The already slow re covery of employment in durable goods man ufacturing stalled because of the weakness in demand caused in part by the shortfall in business fixed investment and a drop in auto sales. Strikes in the tire, auto, and agri cultural equipment industries, and their sec ondary effects, exacerbated and possibly pro longed the slowdown. Allowing for the direct effect of strikes, manufacturing payrolls grew at an annual rate of 50,000 between April and October 1976 after having risen by 815,000 over the first year of the recovery. The most recent phase of the expansion— since October 1976—has been characterized by a strong resurgence in the growth of labor demand as consum ption spending strengthened again and plant and equipment spending moved decisively higher. Following 619 a lag early in the recovery, gains in pro duction of business equipment and related employment accelerated in the first half of 1977. Widespread increases amounting to nearly half a million jobs were reported in the durable goods industries between October and June, as production of business equipment accelerated to an 18 per cent annual rate. There were notable employment and produc tion gains in the transportation, electrical equipment, and fabricated metals industries. In addition, jobs in machinery groups regis tered significant increases for the first time in the recovery. Complementing these gains were pick-ups in employment in the metals industries. Despite the recent strong upturn, capacity utilization and employment levels for most major hard goods industries remain far short of pre-recession highs. Due mainly to the earlier sluggishness of capital spending, jobs among all durable goods producers remained almost 5 per cent below their previous peak; the shortfall in primary metals employment was 10.2 per cent. Employment and expenditures Billions of 1972 dollars M illions o f persons D u ra b le m a n ufacturing em p lo y m en t Plant and ^ equipm ent spending Employment data from BLS payroll survey, seasonally adjusted quarterly averages; expenditure data from Dept, of Commerce, seasonally adjusted at an annual rate. 620 Federal Reserve Bulletin □ July 1977 Since October 1976 employment increases also resumed in nondurable goods manufactur ing, and by June 1977 employment in this sector was only marginally below its pre recession level. The principal exceptions were the apparel and textile industries, which ap pear to have experienced strong competition from imported goods. There also has been a sizable increase in contract construction jobs over the last 6 months, in large part because of the strong upturn in single-family housing starts. Growth between December 1976 and June 1977 accounts for about 70 per cent of the increase in construction employment since the recovery began 2 years ago. Nevertheless, building trades employment in June was more than 5 per cent below its early 1974 high as lagging nonresidential construction had damped gains. Growth of public payrolls has been modest throughout the recovery. Federal Government employment in June was marginally below the level of March 1975, and while Federal counter cyclical public service jobs programs provided funding for more than 300,000 jobs, State and local payrolls expanded only 525,000 over the same period. Growth of State and local government employment over this period was less than half of the average rate of expansion over the prior decade. Adjustment to budget ary constraints in some areas, coupled with declines in the school-age population, retarded expansion of both employment and building programs. LABOR SUPPLY AND UNEMPLOYMENT As is typical in a cyclical recovery, the im provement of labor demand was accompanied by an acceleration in the growth of the labor force. Since early 1975 the civilian work force has increased at a 2.6 million annual rate, well above the average pace over the preceding decade. The recent advanced rate reflects con tinued large increases in the working-age population and in the participation rate of the female population. In addition, as employ ment opportunities increased, the number of persons who were not in the labor force be cause they believed that they could not find jobs dropped 140,000, contributing slightly to the over-all expansion of the civilian labor force. More than half of the net gain in the labor force since early 1975 has been among adult women. This increase reflects the continua tion of the longer-run trend of rising labor force participation rates for women. That is, while their proportion of the population is not changing significantly, the number of women who seek work outside the home continues to increase. In 1960, adult women comprised 42 per cent of the civilian population and 27 per cent of the civilian labor force. By early 1977 their proportion of the civilian population was slightly lower, but they accounted for 30 per cent of the civilian labor force. In part, this trend may reflect economic pressure on family well-being. After declining between late 1973 and early 1975, real per capita income in creased only 8 per cent between early 1975 and early 1977, an unusually small rise for a recovery period. During the recession the erosion of family purchasing power was a fac tor in encouraging additional labor force par ticipation by secondary household members, and it is likely that this trend has continued as workers attempt to restore or expand real family incomes. The other significant source of labor force growth during the recovery has been youth. About one-fourth of the net increase in the civilian labor force over this period has been among youth aged 16 to 24. This increase is largely the result of past fertility patterns. The fertility rate, which began to climb about 30 years ago, peaked in 1957 and remained at a high level until 1961; the fertility rate then fell sharply and has continued at a low level. The bulge in the labor force due to the baby boom of the mid-1950’s, therefore, has moved from the teenage group into the 20- to 24-year age group. By contrast, adult men continue to consti tute a smaller share of the civilian work force. Over the long run, declining participation rates R ecen t L a b o r M arket Trends are the major factor for men generally, but they have been most significant for those aged 55 years and over. It has been among the older men that declines in participation have been concentrated during the recent recovery— apparently a continuation of the trend toward early retirement. However, among working men aged 25 to 44, recent participation has been relatively stable, as the improvement in economic conditions has attracted some pre viously discouraged workers back into the labor force. Total unemployment declined by about W i million during the recovery period with the entire reduction among experienced workers who had lost their last job; at 2.9 million in June their number was reduced by more than onethird from the level in the spring of 1975. This group included many blue-collar workers re turning to manufacturing production lines. On the other hand, the number of unemployed who had just entered or re-entered the labor force has risen almost 300,000 since the cycli cal trough. Unemployment by reason M illions o f persons ! 1973 1 1975 i 1977 BLS data, seasonally adjusted. At 7 per cent in the second quarter of 1977, the over-all unemployment rate was about midway between its cyclical peak of almost 9 per cent in the spring of 1975 and its pre recession low in late 1973. Because in many industries capacity utilization and employment in June was well below pre-recession levels, considerable labor market slack remained even among experienced workers. For exam ple, the unemployment rate for men aged 25 621 to 54, who account for a significant propor tion of the experienced work force, dropped 2 percentage points to 4.3 per cent by the second quarter of 1977, which was only half way back to its pre-recession low. The decline for adult women in the prime-age labor force group—to 6.4 per cent in that quarter—about equaled that of their male counterparts. How ever, many labor force entrants and re-entrants are included among adult women, who con stitute the fastest growing labor force group, and this contributes to high unemployment rates relative to adult men. The jobless picture for youth and minorities has improved relatively less over the recovery period. The unemployment rate for teenagers, which had climbed from 14Vi per cent in late 1973 to more than 20 per cent during the reces sion, was still 18 per cent in mid-1977. Youth aged 20 to 24 years— the second fastest grow ing labor force group—have seen a somewhat more substantial drop in unemployment, from 14Vi per cent in May 1975 to 10Vi per cent in mid-1977. However, neither group has made much progress in reducing its unemployment rate relative to that of more experienced workers. Similarly, the jobless rate for black and other minority workers improved rela tively more slowly throughout the recovery than the rate for whites. Recent unemployment rates have been well above the 5 per cent range maintained between the final months of 1972 and mid-1974 and even further above the 416 per cent rate of the 1955-57 period. This gap is due, in large part, to the incomplete nature of the current recovery, but it also is indicative of a variety of noncyclical factors that have been boosting the over-all unemployment rate for any given economic situation throughout the past two decades. Most significant among these noncyclical factors is the changing demographic structure of the labor force. Since the early 1960’s, the fastest growing groups in the civilian work force have been those more likely to experi ence frictional unemployment—youth and women. The youth labor force, in particular, includes a relatively high proportion of indi 622 Federal Reserve Bulletin □ July 1977 Selected unemployment rates BLS data, seasonally adjusted. viduals looking for their first job. In addition, younger workers are likely to have higher rates of turnover as they experiment—often by trial and error—with alternative jobs or with a combination of school and work. High unemployment rates among adult women also reflect a higher incidence of initial job search among new entrants as well as more frequent movement in and out of the labor force. As the chart shows, other things being equal, the current total unemployment rate is about 1 per centage point higher than it would be if the age-sex composition of the civilian labor force were the same as during the mid-1950’s. In addition to demographic changes, the cost of unemployment to individuals may have been declining due to changes in the structure and administration of income-support pro grams. More liberal benefits, as well as re cent extensions of coverage and duration of unemployment insurance, may have contrib uted to upward pressure on the unemploy ment rate. The after-tax level of unemploy ment benefits relative to wages has risen over time; recent studies have shown that those payments now replace from 50 to 80 per cent of previous earnings when taxes and work-related expenses are taken into account. Special extensions of the maximum duration of unemployment insurance—up to 65 weeks during 1975-76 and 52 weeks currently—have lengthened the average period of unemploy ment among recipients. Estimates of the effect of these extensions on the duration of unemployment range from increases of 15 to 30 per cent, which, according to some analysts, might have added as much as a percentage point to the 1976 jobless rate. Moreover, the temporary extension of bene fits to workers not previously covered by unemployment insurance had a notable impact on reported unemployment during the sum mers of 1975 and 1976, when about 400,000 seasonal workers—many employed on the support staffs of public schools—collected special unemployment assistance benefits. Increases in the level and coverage of the Actual and adjusted unemployment rates U N EM PLO Y M EN T R Adjusted Based on BLS data, seasonally adjusted. Unemployment rate calculated as the sum of unemployment rates for major age-sex groups weighted by their 1956 proportions of the civilian labor force. R ecen t L a b o r M arket Trends Federal minimum wage likely have reduced job opportunities for less skilled workers, youth in particular. According to recent esti mates, past increases in levels and coverage of the minimum wage have led to significant declines in teenage employment. Moreover, direct surveys of employers in the restaurant industry indicate cutbacks in their work forces because of an increased statutory minimum wage. WAGES AND COMPENSATION Nominal wage rate increases decelerated sig nificantly between 1975 and mid-1976 but have leveled off over the past year at about a 7 per cent annual rate. Although the decelera tion was partially the result of the high level of joblessness, the significant impact that high rates of inflation have on wages is apparent in the continuation of historically high rates of wage change in the face of considerable labor market slack. Over the past year the unemployment rate has averaged IVz per cent, yet wages of non farm production workers measured by the average hourly earnings index have risen almost 7 per cent—about twice the rate during the tight labor markets of the mid-1960’s when the jobless rate was below 4 per cent. The damp ening impact of high unemployment on the growth of wages appears to have weakened in recent years. 623 By contrast, wage increases seem to re spond strongly—after a lag of several quarters—to price movements. Beginning in early 1973, consumer prices accelerated to record rates led by fuel and food price in creases that were affected relatively little by the downturn in activity. Following these price developm ents, wage rate increases began to be more rapid in early 1974 and peaked at almost 9 per cent as economic activity was at its early 1975 trough. Con sumer prices decelerated sharply throughout 1975 and 1976, and the rate of wage change dropped to about 7 per cent. In large part, the relationship between wages and prices is the result of the general tendency to partially link compensation adjustments to changes in consumer prices. The movement of consumer prices is espe cially important as a determinant of wages paid to unionized workers. Cost-of-living es calator clauses now cover more than threefifths of the almost 10 million workers in major collective bargaining units—three times the coverage in the mid-1960’s. Moreover, catch up wage increases to compensate for the effect of past inflation typically are included in the first-year wage demands of uncovered or in completely protected unionized workers. First-year wage adjustments in negotiations covering 1,000 or more workers averaged 8.4 per cent during 1976, well below the 10.2 per cent rise recorded the previous year but still Wages, prices, and unemployment Percentage change from previous year Percent BLS data, seasonally adjusted. Wages are average hourly earnings index for private nonfarm production or nonsupervisory workers. 624 Federal Reserve Bulletin □ July 1977 substantially above the long-term trend of productivity improvement. Fringe benefits appeared to have increased about in line with wages. In negotiations covering 5,000 or more workers, first-year wages and benefits com bined rose 8.5 per cent in 1976, compared with an increase of 11.4 per cent in 1975. In a major round of collective bargaining, which began in 1976, similar pattern-setting packages have been negotiated in the automo bile and steel industries. The steel settle ment concluded early in 1977 increased wages and benefits by about 12Vi per cent in the first year and, assuming a 6 per cent annual rate of inflation, will result in compensation in creases totaling more than 30 per cent over the next 3 years. Upcoming negotiations in key areas involve the communications industry this summer, coal mining late in the year, and the Nation’s railroads at year-end. P ercentage change from previous year iRLY COMPENSATION PRODUCTIVITY UNIT LABOR COSTS BLS data, seasonally adjusted. Wages are average hourly earnings index for private nonfarm production or nonsupervisory workers. Negotiated wage and benefit changes in major collective bargaining units P er cent 12 8 4 0 BLS data. Wage and benefits changes for settlements covering 5,000 or more workers. Life of contract is annual rate excluding cost-of-living adjustments. Growth in hourly compensation for workers in the private nonfarm business sector moder ated considerably from the pace experienced just before and during the contraction. Com pensation per hour rose IVi per cent between early 1976 and 1977, compared with a rate of increase of 1IV2 per cent from mid-1974 to early Productivity and costs 1975. The moderation in hourly compensation growth, combined with a cyclical rebound of productivity, resulted in a sharp deceleration in unit labor costs from their double-digit rates of 1974 and early 1975. Between early 1976 and 1977, however, unit labor costs in the nonfarm business sector rose almost 5Vi per cent. Growth in productivity typically accelerates at a rapid pace early in a recovery as more intensive use is made of existing workers and equipment. This burst of productivity is gen erally followed by a significant deceleration as laid-off workers are rehired and new, often inexperienced employees are recruited in re sponse to the pick-up in demand. As the expansion is sustained, the growth of output per hour normally moderates to its longer-run trend—about 2Vi per cent annually between 1948 and 1973. Over the two quarters immediately follow ing the trough in the first quarter of 1975, nonfarm business productivity rose at more than a 10 per cent annual rate, as significant production gains outpaced the modest rise in hours of work. Then, as the recovery matured, 625 R ecen t L abor M arket Trends growth of productivity in the nonfarm business sector slowed to a rate about in line with its long-run trend. Although productivity gains over the past 2 years have followed the pattern of previous recoveries, they have not been sufficient to return the level of productivity to its postwar trend line, Indeed, a shortfall of IVx per cent from trend remained in early 1977, with the gap mainly reflecting the unprecedented 10 per cent drop in productivity from its postwar trend by late 1974. In addition to the severity of the business cycle, several longer-term factors appear to have weakened productivity performance since the late 1960’s, One important factor has been the change in the composition of the labor force to include a greater proportion of young and less experienced workers. In addi tion, the pattern of consumer demand has been changing, and there has been a corre sponding shift of employment and hours to ward relatively less productive serviceproducing industries. The shortfall in productivity also may result -K * : I ** • *■ i i i ’i i i mB 4 rh jv ? 1 91 H 1961________ 1965________ 1969 i h - <i i I Hi 1973 70 1977 BLS data, seasonally adjusted. in part from inadequate capital formation. In addition, the rise in relative energy prices may have led producers to forego the adoption of high-productivity, energy-intensive technolo gies and to abandon energy-inefficient capital stock. The reallocation of both capital and labor resources to pollution abatement may have contributed to the shortfall in productiv ity below its trend. D 626 Insured Commercial Bank Income in 1976 In order to present the broadest possible pic ture of commercial bank profitability, this year the focus of the annual review of bank earn ings has been moved from member banks to all insured commercial banks. This change brings into consideration more than half of the com mercial bank population and almost two-thirds of the banks with assets below $100 million. Appendix Table 2 presents the historical series of member bank income data in an update of the tables presented in earlier articles. 1. Income and Expenses of All Insured Commercial Banks As per cent of average assets1 Item 1972 1973 1974 1975 1976 Gross interest earned 2. . . Gross interest expense 3 .. Net interest margin. . . . Noninterest income 4. . . . Loa-n-Ioss provision 5, . .. Noninterest-expenseS. . .. 4.67 2.08 2 59 >0 .13 2.19 5.38 2.80 2 58 [69 .14 2.13 6.19 3.55 2 64 >0 .23 2.17 5.45 2.85 2 60 [81 .33 2.23 5.99 3.47 2 52 i!n .32 2.44 Income before tax.......... Taxes 7 ............. .. Other 8 ........................ .97 .24 .03 1.00 .24 -.0 1 .94 .21 -.0 1 .85 .17 .01 .88 .21 .03 Net income after ta x . . . Cash dividends de clared 9 ............... .76 .75 .72 .69 .70 .29 .28 .28 .29 .27 .47 .47 .44 .40 .43 3.05 3.01 3.06 3.02 2.93 746 870 985 1,059 1,131 Net retained earnings. . . . SUM M ARY Net profits of insured commercial banks in creased during 1976 and for the year were $7,861 million, up $600 million from the previ ous year. The rate of growth in profits, which at 8 per cent was considerably above the 3 per cent pace of 1975, nevertheless remained below the average of yearly gains achieved between 1970 and 1974. Similarly, the profitability of insured commercial banks as measured by net returns on average assets also improved moderately in 1976 although it too remained below the 1970-74 averages. As in 1975, the main impediments to more vigorous growth of profits at commercial banks were rising costs of operations and lowered interest returns net of the cost of funds. Provisions for loan losses, at large banks especially, also remained high relative to other income and expense items. The improvement in profitability between 1975 and 1976 is attributable to three factors. Note .—This article was prepared by Barbara N. Opper of the Board’s Division of Research and Statistics. Rebekah Wright provided valuable research assistance. Memoranda: Taxable equivalent net interest margin i o „ Average net assets, bil lions of dollars___ 1 Average of beginning- and end-of-year fully consolidated assets net of loan-loss reserves. 2 Represents the sum o f interest on loans, income from Federal funds sales and securities purchased under agreements to resell, interest on U.S. Treasury and Government agency obligations, in terest on State and local government issues, and income from other corporate securities. In 1976 dividends on Federal Reserve Stock and corporate stock, amounting to .01 o f average assets, was reported separately and included in noninterest income. 3 Includes interest on time and savings deposits, interest on deposits in foreign offices, expense of Federal funds purchased and securities sold under agreements to repurchase, interest on subordinated notes and debentures, and interest on other borrowed money. 4 In 1976, for the first time, interest on balances with banks was provided. It amounted to .39 o f the 1.11 total noninterest income in 1976, an amount that is believed to represent a sizable increase from prior years. It was left in noninterest income to preserve consistency with 1975 and earlier years. Other items included in noninterest income are income from direct lease financing, from fiduciary activities, from service charges on deposit accounts in domestic offices, from other commissions and fees, and from miscellaneous sources. s In 1976, the provision generally was made on the basis of proba bility of loss; for earlier years, conformance with regulatory guidelines tended to be the rule. 6 Includes costs for salaries and employee benefits, net occupancy expense of bank premises, furniture and equipment expenses, and other miscellaneous expenses. 7 Includes all taxes estimated to be due on income, on extraordinary gains, and on securities gains. 8 Includes securities gains or losses gross of taxes and gross extra ordinary gains or losses. 9 Represents cash dividends declared as of the statement date on common and preferred stock. i o For each bank, net interest income was increased by the lesser o f interest income from State and local government obligations or net profits before tax, but by no less than zero. That adjustment re flects the after-tax value to each bank of tax-exempt interest earned and lends consistency to the time series o f net interest earned by ab stracting changes that would result simply from shifts in the propor tion of tax-exempt interest income. The adjustment relates only to interest income; other tax-preference income, such as from direct lease investments, was not adjusted to a taxable equivalent basis. N ote. —Shaded area reflects domestic operations only. 627 Provisions for loan losses, while still very high, stabilized relative to other income and expense items. Second, after-tax securities gains increased, which at least partly was the result of opportunities presented by falling interest rates. And the third was an increase in noninterest income, although to some extent the improvement shown in that category dur ing 1976 is believed to reflect interest income.1 The components of net returns on average assets can be seen in Table 1, which shows the principal income and expense categories af fecting the rate of return on assets during the past 5 years. Appendix Tables 1 and 2 present the actual income and expense data for all insured commercial banks and for insured member banks. As explained in the notes on comparability of 1976 commercial bank in come data, part of the 1976 data shown in the tables are not reported on the same basis as in earlier years. As a result, conclusions on the factors contributing to changes in the rate of return must remain qualified. NET INTEREST MARGINS The net interest margin—the interest on assets after deducting the interest cost of funds— earned by all insured commercial banks nar rowed somewhat during 1976 as a result of shifts affecting both assets and liabilities. Those shifts served to increase the proportion of relatively low-risk, but low-yield, assets and on the other side of the balance sheet to in crease the proportion of interest-bearing claims. Moreover, declines in market interest rates during 1976 lowered portfolio returns, al though they also reduced the cost of interestbearing funds. during 1976, interest received on balances with banks was reported separately for the first time. In prior years, it was an undifferentiated component of other (noninterest) income, and thus for consistency it was analyzed as part of that category during 1976. In 1976 interest on balances with banks represented more than one-third of total noninterest income, an amount that is believed to be much larger than in earlier years because information now available for bank holding companies shows a sizable increase. G r o ss I n t e r e s t I n c o m e Interest income of commercial banks was in fluenced strongly during 1976 by persistently weak business loan demand and by an upgrad ing of the credit quality and marketability of NOTES ON THE COMPARABILITY OF 1976 COMMERCIAL BANK INCOME DATA Certain important definitions in the Report of Income and Dividends were changed in 1976, impairing comparability with prior years. The most important is the level of consolidation. Although net income after taxes in all of the years shown reflects fully consolidated operations, in 1975 and earlier years net income from foreign branches and subsidiaries was added as a part of “ all other income.” Beginning with 1976, the statement is fully consolidated so that all_ of the components—such as interest revenue, interesfexpense, and so on—include the gross revenues and expenses of foreign branches and subsidiaries. As a consequence, for example, the net interest margin reflects only the domestic margin before 1976. This change is perti nent only to the 145 commercial banks that operated foreign branches or subsidiaries during 1976, none of which had consolidated assets below $100 million. An additional change is that the loan-loss reserve in 1976 is subtracted from loans, and hence from assets. Before that, the loan-loss reserve was carried as a liabili ty. The asset base used to construct ratios shown in all tables has been adjusted for conformity by subtracting the loan-loss reserve from 1975 and earlier data. The loanloss reserve was more narrowly defined in 1976 to exclude valuation reserves. This valuation portion was shifted to the capital account. A change in the definition of “accretion of discount” also caused a one-time increase in equity capital. Another change affects gross interest income. In 1976, “interest on balances with banks” was set out separately for the first time. This item reflects primarily Euro-dollar redeposits and is believed to be considerably larger in 1976 than in earlier years. In order to assure consistency of the ratios, this item was left in “ noninterest income” for all the years shown in the ratio tables. Most of “interest on balances with banks” is accounted for by the largest banks and by those that operate abroad via subsidiaries or branches. Several other changes in the Report of Income and Dividends were made that are noteworthy. One is that in 1976 unearned income is deducted from loan portfolios for the first time in order to conform with generally accepted accounting principles. Income on securities other than those issued by governments is broken down in 1976 between interest income on obligations issued by non governmental units and dividend income earned on Fed eral Reserve and other stock. More detail was reported on interest paid on deposits in 1976; interest paid on large time certificates of deposit issued by domestic offices, interest on foreign deposits, and interest paid on other domestic time and savings deposits are now set out separately. Additionally, income from direct lease financ ing is now shown. 628 Federal Reserve Bulletin □ July 1977 2. Composition of Portfolios of All Insured Commercial Banks End-of-period d ata as per cent o f total assets gross of loan-loss reserves Domestic Fully consolidated Item 1972 1973 1974 1975 1976 1975 1976 Securities....................................................................... U.S. Treasury........................................................... U.S. Government agencies.................................... State and lo cal......................................................... O th er......................................................................... 77.0 52.7 24.3 8.8 2.9 11.9 .7 76.8 55.2 21.6 6.6 3.3 11.0 .7 75.9 55.4 20.5 5.7 3.4 10.7 .7 76.2 52.7 23.5 8.5 3.5 10.7 .8 75.2 51.5 23.7 9 .5 3.4 10.2 .6 74.1 53.5 20.6 7.4 3.0 9 .2 1.0 73.2 52.7 20.5 8.1 2.9 8.7 .8 M emorandum: total gross assets, billions of dollars, end of p erio d ........................................................... 733 826 906 944 1,010 1,091 1,185 Interest-earning assets.................................................... investment portfolios. Additionally, returns on domestic business loan portfolios were reduced during 1976 as the average prime rate fell below its 1975 level. As described in the notes on the comparability of 1976 data, gross interest income includes, for the first time, gross returns on assets held by the banks’ foreign branches and subsidiaries. This differ ence has an important impact on the year-toyear pattern of gross interest income;2 in 1976, assets invested by foreign branches and sub sidiaries amounted to 12 per cent of banks’ fully consolidated invested assets. Table 2 presents the major interest-earning assets as a percentage of total assets of insured commercial banks. In both the domestic and the fully consolidated portfolios, loans de clined as a percentage of assets. If portfolio growth had kept pace with asset growth, domestic loan portfolios would have been $12 billion larger at the end of 1976, and fully consolidated loan portfolios would have been $9 billion larger. The component of banks’ investment portfolios that showed the largest increase relative to total assets was their hold ings of U.S. Treasury issues—the least risky, most highly marketable, but lowest yielding of all of their investment choices. Average returns on commercial bank portfolios are shown in Table 3. As described in the technical note, the rate of return was computed in a way that takes into account the reinvestment of interest, and therefore it re flects a compounded, or effective, annual rate. Despite general declines between 1975 and 2The level of gross returns on foreign assets, in general, appears to be above that on portfolios held by domestic offices. Further simplified, it produces the expression described originally. TECHNICAL NOTE: Computation of Rate of Return Rather than to simply take interest income as a percentage of portfolio, or of average portfolio, the rate of re turn was calculated in a way that recognizes the com pounding of interest income. The expression used, which is a regulatory standard for life insurance companies in the computation of their annual rate of return on mean assets, is: 2i/(A + B - /) where i is interest received during the period; A is portfolio at the beginning of the period; B is portfolio at the end of the period. The derivation of this is that interest is assumed to accumulate evenly throughout the period and to be rein vested. Thus, the interest earned on the beginning portfolio (A) is accumulated and represented in the ending portfolio (B) and on average earned interest for one-half of a year. Instead of using in the denominator of the rate of return formula a simple average of beginning- and endportfolios, or A + B , the recognition of interest compound2 ing thereby produces a denominator of A + B i 2 " T which, simplified, produces a rate of return fraction of i l A + B - i) - Insured C om m ercial B ank Incom e in 1976 1976 in market yields on obligations of the U.S. Treasury and other domestic debt issuers represented in bank portfolios, the rate of return on these assets remained quite stable. To a large extent, that stability is a result of a lengthening in the maturities of bank holdings. For instance, in 1975 44 per cent of banks’ holdings of U.S. Treasury securities matured in 1 year or less; in 1976, only 38 per cent had that maturity. Bank holdings of U.S. Govern ment agency issues also lengthened; in 1975, 6 per cent matured in 10 years or more, but that ratio rose to 12 per cent in 1976. And finally, banks reduced both the longest and the short est maturity ranges of State and local obliga tions and increased their holdings in the 1- to 10-year range to 59 per cent of that portfolio, from 55 per cent in 1975. 629 3. Rates o f R eturn On P ortfolios o f A ll Insured C om m ercial Banks 1 In per cent Fully consoli dated portfolio Domestic portfolio Item Securities— U.S. T reasury............. U.S. Government agencies and corporations. . . . State and local 2 .......... 1972 1973 1974 1975 1976 5.48 5.95 6.64 6.91 6.96 6.18 4.26 7.11 6.23 4.42 7.10 7.13 4.85 8.32 7.57 5.11 8.17 7.41 5.15 8.07 7.43 8.73 10.30 9.03 8.89 1 Calculated as described in the Technical Note. 2 Taxable equivalent returns: State and local government securities... 8.58 8.92 9.63 9.98 10.11 All securities........................... 7.11 7.50 8.31 8.54 8.43 F or each bank, net interest income was increased by the lesser of interest income from State and local government obligations or net profits before tax, but by no less than zero. That adjustment reflects the after-tax value to each bank of tax-exempt interest earned. 3 Includes obligations o f nongovernmental units, Federal Reserve stock, and other corporate stock. G r o ss I n t e r e s t E x p e n s e The composition of financial claims at com mercial banks shifted toward the interestbearing category during 1976. Certain types of interest-bearing claims were increased in favor of others as banks sought both to economize on total interest costs and to coordinate the management of liabilities and investment portfolios. As a result of those efforts, and primarily because interest rates in general declined between 1975 and 1976, gross interest expenses fell in proportion to assets.3 3 Interest expenses on time and savings deposits in domestic offices during 1976 were about equal to the dol lar volume of those costs in 1975, even though those deposits increased by $37 billion. Because of the changes in reporting between the 2 years, the only two interest expense items providing strict comparability are time and savings deposits in domestic offices and interest on purchases of Federal funds. 4. C om p osition o f Financial Claim s o f A ll Insured Com m ercial Banks End-of-period data as per cent o f total assets net o f loan-loss reserves Domestic Fully consolidated Item 1972 1973 1974 1975 1976 1975 1976 Financial claims............................................................... Dem and deposits......................................................... 90.1 40.6 90.2 37.5 89.3 34.8 89.5 34.2 90.2 33.1 90.3 29.5 91.1 28.2 Interest-bearing claim s............................................... Time and savings accounts................................... Time C D ’s 1......................................................... In foreign offices................................................. Other domestic.................................................... 49.5 43.8 n.a. 52.7 45.1 15.5 54.5 47.8 19.0 55.3 48.7 16.7 57.1 49.1 13.5 n.a. 29.6 28.8 32.0 35.5 60.8 54.8 14.4 12.8 27.6 62.9 55.7 11.5 13.9 30.3 Subordinated notes and debentures................... Other borrowings.................................................... Gross Federal fu n d s............................................... Gross sales........................................................... Net Federal fu n d s.............................................. .6 .5 4 .6 3.5 1.1 .5 .9 6.2 4.2 2.0 .5 .5 5.7 4.3 1.4 .5 .5 5.6 4 .0 1.6 .5 .5 7.0 4 .6 2.4 .4 .7 4 .9 3.4 1.5 .4 .8 6.0 3.9 2.1 M emorandum: total net assets, billions of dollars, end of p erio d ........................................................... 726 819 898 936 1,004 1,083 1,179 i Of $100,000 and over issued by domestic offices, n.a.—N ot available. 630 Federal Reserve Bulletin □ July 1977 Large certificates of deposit (CD’s), for example, were allowed to run off in the aggre gate, due at least in part to the weakening in business loan demand. At the same time, however, there was an increase in funds raised by banks through purchases of Federal funds and through repurchase agreements (Rp’s), which largely are overnight funds. Banks minimized their short-term interest costs by partially replacing CD’s with shorter-term Federal funds and Rp’s, especially when short-term rates were falling. Table 4 shows the composition of financial claims at insured commercial banks, expressed as a percentage of total net assets. On a fully consolidated basis, time CD’s fell from 14.4 per cent of assets to 11.5 per cent; gross funds raised through Federal funds and Rp’s grew from 4.9 per cent to 6.0 per cent. An important source of funds during 1976 was time and savings accounts other than CD’s. During much of the year market yields remained below the maximum rates payable on those deposits, and as a consequence the public shifted large amounts of funds to such claims. Deposit growth at foreign branches and subsidiaries, especially at large banks, also increased the interest-bearing compo5. Rates Paid for Funds by All Insured Commercial Banks 1 As per cent o f average specific liability Fully consoli dated Domestic Item Time and savings accounts................... Time C D ’s 2................. Deposits in foreign Offices.................. Other deposits............ Subordinated notes and debentures. . . . O ther borrowings........... S u b to ta l ............................ 1972 1973 1974 1975 1976 4.76 n.a. 5.91 n.a. 7.21 n.a. 6.09 n.a. 5.74 4.97 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 5.96 5.98 6.24 4.44 6.40 9.54 5 .97 6.98 16.50 7.03 8.18 7.42 7.94 4 .6 6 7.3 4 6 .1 3 5 .7 8 5.05 9.68 12.49 6.63 5.53 G ross Federal funds and R p’s 2................ M em orandum : Gross sales (rates earned)................. 4.63 8.62 10.63 6.17 4.90 T otal......................... 4.80 6.36 7.89 6.18 5.76 1 Calculated as described in the Technical Note. 2 O f $100,000 and over issued by domestic offices, n.a.—N o t available. nent; virtually all deposits in foreign offices are interest bearing. Demand deposits fell as a proportion of total assets, continuing in a secular pattern. The proliferation of corporate cash management programs and in 1976 the extension of negotia ble order of withdrawal (NOW) account au thority to all the New England States influ enced that pattern. Banks’ gross interest expense during 1976 fell not only because the composition of their financial claims changed but also because av erage rates paid for interest-bearing funds fell. Table 5 presents the average interest rates paid on banks’ primary deposit and non deposit sources of funds. Strict comparability is hampered by the difference between 1975 and 1976 in level of consolidation, although the table probably accurately represents the direction of change, if not the exact mag nitude. Average interest rates paid on all time and savings accounts fell about 35 basis points during 1976. Some of that decline simply re flects the fact that growth in those deposits was very fast toward the year-end, shortening the average period for interest accumulation, which of course would be reflected in the actual dollar payout of interest. Nevertheless, some of the decline also reflects the behavior of offering rates. Market yields quoted on large 90-day CD’s dropped by an average of more than 40 basis points, for example. In addition, as short-term market yields fell and as deposit growth in savings and smalldenomination time accounts accelerated, more banks retreated from the Regulation Q maximum offering rates on those accounts.4 Counteracting that influence on total interest cost was strong growth in higher-rate, longer-maturity time and savings accounts. 4 According to the quarterly survey of time and savings deposits, some rate cutting by large banks occurred around the end of 1976, particularly in long-maturity time de posits and in business and government savings accounts. Because these reductions occurred at the end of the year, they probably had only a modest effect on interest actually paid on deposits. By the end of January 1977, 37 per cent of all small-denomination time and savings accounts were to mature in 4 or more years, in contrast to 31 per cent of that total a year earlier. Insured C om m ercial B ank Incom e in 1976 Rates earned by banks on Federal funds sales and reverse Rp’s fell, in step with the over-all declines in market yields. The average rate earned by banks declined 127 basis points between 1975 and 1976, whereas the average rate paid by banks on the counterpart source of funds declined 110 basis points. 631 years. The activity is generally concentrated at the biggest banks and at banks that operate abroad with branches or subsidiaries. The relative share and recent growth of the com ponents of “noninterest income” are shown in Table 6. LOAN-LOSS PROVISIONS NONINTEREST INCOME Although income from fiduciary activities in creased 12 per cent during 1976, the largest source of increase in ‘‘noninterest income” can only be deduced because of the changes in reporting. Before the 1976 revisions to the Report of Income and Dividends, interest on balances with banks—which represents in come from Euro-dollar redeposits—was not set out as a separate item but was a part of “other income.” 5 Information available from other sources for bank holding companies shows that the dollar volume of interest on these balances increased sharply over recent 5 Euro-dollar redeposits are Euro-dollars—dollar de posits with banks outside the United States—that foreign branches of U.S. banks have accepted and then placed with other banks or branches abroad. Generally, the depositing bank earns a small margin on the rate it earns over the rate it pays for these funds. 6. N oninterest Incom e o f Insured C om m ercial Banks In millions o f dollars Fully consoli dated Domestic Sources o f noninterest income Fiduciary activities........ Service charges on de posit accounts in domestic offices.. . . O ther service charges, commissions, and fees........................... S u b to ta l ................... Other sources1................ Interest on balances with banks.......... Direct lease financing. O th e r............................ Total......................... 1972 1973 1974 1975 1976 1,366 1,460 1,506 1,600 1,795 1,256 1,320 1,450 1,547 1,629 1,079 1,247 1,405 1,647 2,175 3,701 4 ,0 2 7 4,361 4 ,7 9 4 5 ,5 9 9 1,512 1,942 2,530 3,811 7,005 n.a. n.a. n.a. 5,213 n.a. n.a. n.a. 5,969 n.a. n.a. n.a. 6,891 n.a. n.a. n.a. 8,605 4,459 534 2,012 12,604 i Includes net income remitted from foreign branches and subsidi aries for the years 1972 through 1975. n.a.—N ot available. Provisions for loan losses during 1976 in creased slightly less than proportionally with banks’ total asset and loan portfolio growth. So unlike 1975, when dramatic increases in loan-loss provisions were one of the major causes of the fall in banks’ rate of return on assets, during 1976 those provisions had a neutral effect. They remained very high, rela tive to their pre-1975 levels, but they showed some minor improvement during 1976, as seen in Table 1. The pattern in loan-loss provisions shown for the banking industry as a whole actually masks some differences between large and small banks. Banks with less than $100 million in assets were the only size category in which loss provisions in 1976 grew faster than loan portfolios, but even for those banks the in crease over 1975 was minimal.6 For all other size categories of banks, it appears that provi sions for loan losses in 1976 grew smaller in relation to end-of-period loan portfolios and assets and to gross interest revenue. The im provement became stronger as the bank size increased. The effect of loan-loss provisions during 1976 was to reduce the rate of return on loan portfolios by 65 basis points. In other words, insured banks had a gross rate of return on loans of 8.89 per cent (Table 3). Since the loan-loss provision as now calculated reflects the probability of loss in the portfolio,7 it is Comparisons of loan-loss provisions from 1975 to 1976 must be qualified because even in 1975, when this item supposedly reflected domestic business only, many banks are believed to have reported provisions relevant to the banks’ foreign as well as domestic branches. 7Until 1975, calculation of the loan-loss provision had been based primarily upon regulatory guidelines; since then, it is based more closely upon the probability of credit loss in the portfolio. 632 Federal Reserve Bulletin □ July 1977 7. Loan Portfolio Losses and Recoveries of All Insured Commercial Banks in 1976 W ith consolidated assets of: Item Total Less than $100 million $100 million to $500 million $500 million to $1 billion $1 billion to $5 billion $5 billion and over In millions of dollars Losses charged....................... Recoveries............................... Net losses............................. Loan-loss provision............... 4,159 684 3,475 3,643 787 199 588 659 565 113 452 486 257 45 212 212 766 125 641 642 1,783 201 1,582 1,644 .64 .64 .64 .66 As per cent o f loan portfolio i N et losses.......... Loss provision. .56 .58 .39 .44 .51 .55 .56 .56 i Fully consolidated gross loan portfolios at end of period. reasonable to approximate loan portfolio re turn net of credit risk by deducting those provisions. In 1976, after deducting the provi sions for loan losses, the net loan portfolio return amounted to 8.24 per cent. Table 7 shows actual 1976 losses and re coveries on loans and also the different loss experience of small and large banks. In terms of both actual net loan losses and the loan-loss provision, smaller banks on average had better portfolio experience than larger banks. 8. Components of Noninterest Expense of All Insured Commercial Banks As per cent o f average assets Fully consoli dated Domestic Item Salaries and employee benefits..................... Occupancy expense: G ro ss............................ Rental income............ N e t................................ Furniture and equip ment ......................... 1972 1973 1974 1975 1976 1.21 1.16 1.17 1.19 1.30 .26 .05 .21 .25 .04 .20 .25 .04 .21 .26 .04 .22 .29 .04 .24 .15 .62 .14 .62 .14 .66 .14 .68 .15 .75 2.19 2.13 2.17 2.23 2.44 NONINTEREST EXPENSE N o t e .— T o ta ls m a y n o t add d u e to ro u n d in g . Rising costs of operations have had a major impact on the falling rate of return at commer cial banks since 1973. A major source of increase in these costs—defined here to in clude all expenses other than interest ex penses and loan-loss provisions—has been in outlays for salaries and employee benefits. Table 8, which presents those costs expressed in terms of average assets in order to relate to Table 1, shows that salaries and employee benefits in 1976 amounted to more than half of total noninterest expenses. The increase in these costs between 1975 and 1976 reflects both the difference in level of consolidation and the year-to-year change. NET RETURNS AND RETAINED EARNINGS Net securities gains were important in con tributing to the improved return on assets. More banks posted securities gains than in 1975, and more banks experienced gains that were sizable in relation to their income. In fact, the improvement in net profits before taxes (and before securities gains) was virtu ally offset by the increase in taxes paid during the year. That increase reflects both the larger taxable profits of banks and the greater Insured C om m ercial B ank Incom e in 1976 number of banks in 1976 that had taxable income. Because of the rise in taxes, there fore, net securities gains were an important factor in the improved return on assets. 633 11. Sources of Increase in Total Equity Capital at All Insured Commercial Banks Millions of dollars Net retained income 1 N et increase in equity capital Year Retained income as per cent of increase in equity capital 9. Profit Rates of Insured Commercial Banks In per cent Item 1972 1973 R eturn on average assets—All i .76 .75 R eturn on average equity—All 2 12.2 12.9 Less than $1 billion 3............ 12.6 13.2 $1 billion or more 3............... 11.9 12.5 1974 1975 .72 .69 12.6 11.8 12.5 11.3 12.8 12.5 1976 .70 11.6 11.6 11.6 1 Net income after taxes as a per cent o f average o f beginning- and end-period fully consolidated assets net o f loan-loss reserves. 2 Average o f beginning- and end-period equity capital, defined narrowly to exclude loan-loss reserves and subordinated debt. 3 Size categories are based upon fully consolidated assets. The dividend payout ratio at all banks re ceded during 1976, and for all size categories of banks that rate was equal to or below its 1974 values. Total cash dividends declared dur ing 1976 were only a little higher than in 1975, despite the profits improvement. By contrast, cash dividends declared had increased by 10 per cent during 1975 in an apparent attempt to offset the negative common stock price impact of the weaker earnings performance that year. Table 10 shows dividend payout ratios by size categories of banks. Net retained earnings at all insured com10. Cash Dividends Declared on Preferred and Common Stock by All Insured Commercial Banks As per cent o f net income after taxes Banks, by size 1974 1975 1976 W ith consolidated assets of— Less than $100 million............. $100 million-$500 million. . . . $500 million-$l billion............ $1 billion-$5 billion................. $5 billion and o v e r................... 28 41 49 46 45 30 44 51 50 47 28 40 47 47 44 All b a n k s........................................ 39 42 39 1972 1973 1974 1975........ 1976 Total Large banks 2 Total Large banks 2 Total 3,438 4,131 4,307 4,224 4,834 1,190 1,491 1,666 1,690 1,909 4,579 5,455 5,631 5,526 8,695 1,612 1,849 1,977 2,396 4,249 75 76 76 76 56 Large banks 2 74 81 84 71 45 1 Net income after taxes less cash dividends declared on preferred and common stock. 2 Includes banks with fully consolidated assets of $ 1 billion or more. N ote .— In 1976, equity capital was affected by one-time accounting changes in the treatment of loan-loss and valuation reserves. mercial banks therefore were helped in 1976 by both improved profits and stabilized cash dividend outlays. As Table 11 shows, retained income at all banks increased during 1976 by $600 million, in contrast to the decline of $83 million recorded during 1975. Equity capital of insured banks, in a reversal of a recent trend, grew in relation to total assets. At banks with assets below $100 million, equity capital grew from 7.7 to 7.9 per cent of assets; at banks with assets of $1 billion and more, it grew from 4.7 to 5 per cent during 1976. Although some of that increase came from the one-time defini tional changes that were described in the notes on comparability, a significant portion came from external equity capital, again in a reversal of a recent trend. At all insured banks, for example, $1.4 billion of the total $8.7 bil lion increase in equity capital arose because of definitional changes: even so, retained earn ings accounted for only two-thirds of the remaining increase in equity. At large banks also, retained income accounted for much less of the increase in equity capital during 1976 than in the four previous years. □ 634 Federal Reserve Bulletin □ July 1977 APPENDIX TABLES A.l Report of income for all insured commercial banks A mounts shown in millions of dollars Item 1969 Operating income—T o tal......................................................................... 30,710 Loans: Interest and fees................................................................................ 20,645 Interest on balance with banks...................................................... n.a. Federal funds sold and securities purchased under resale agreement.................................................................................... 811 Securities (excluding trading account income)— T o ta l: .......................................................................................... 5 ,7 3 3 U.S. Treasury securities................................................................... 2,837 U.S. Govt, agencies and corporations.......................................... 549 States and political subdivisions.................................................... 2,213 Other securities.................................................................................. 134 Trust departm ent.................................................................................. 1,035 Direct lease financing........................................................................... n.a. Service charges on deposits................................................................. 1,117 Other charges, fees, etc......................................................................... 690 Other operating income....................................................................... 680 On trading account (net)................................................................. 138 O ther.................................................................................................... 542 Equity in return of unconsolidated subsidiaries......................... n.a. Operating expenses—T o tal..................................................................... 23,992 Salaries, wages, and employee benefits............................................ 6,758 Interest on: Time and savings deposits.............................................................. 9,758 Interest on time C D ’s o f $100,000 or more issued by domestic offices..................................................................... n.a. Interest on deposits in foreign offices...................................... n.a. Interest on other deposits........................................................... n.a. Federal funds purchased and securities sold under repurchase agreements.................................................................................. 1,203 Other borrowed m oney................................................................... 432 Capital notes and debentures......................................................... 100 Occupancy expense............................................................................... 1,326 Less rental incom e................... ........................................................ 257 N e t....................................................................................................... 1,069 Furniture and equipm ent..................................................................... 770 Provision for loan losses..................................................................... 519 Other operating expenses.................................................................... 3,382 Minority interest in consolidated subsidiaries........................... O ther.................................................................................................... 3,382 1970 1971 1972 1973 34,574 36,204 40,065 52,794 22,859 n.a. 22,954 n.a. 25,498 n.a. 35,213 n.a. 1975 1976 67,872 66,285 80,390 46,942 n.a. 43,197 n.a. 51,472 4,459 1974 1,004 870 1,023 2,474 3,695 2,283 1,980 6 ,5 2 3 7 ,6 6 0 8,3 2 9 9 ,1 3 8 10,344 12,201 14,334 3,069 686 2,617 151 1,132 n.a. 1,174 839 1,043 348 695 n.a. 3,384 914 3,124 238 1,258 n.a. 1,226 981 1,256 344 912 n.a. 3,376 1,144 3,490 319 1,366 n.a. 1,256 1,079 1,512 257 1,255 n.a. 3,436 1,469 3,861 372 1,460 n.a. 1,320 1,247 1,942 341 1,601 n.a. 3,414 2,014 4,449 467 1,506 n.a. 1,450 1,405 2,530 430 2,100 n.a. 4,415 2,343 4,911 532 1,600 n.a. 1,547 1,647 3,811 508 3,303 n.a. 5,953 2,410 5,116 855 1,795 534 1,629 2,175 2,012 717 1,205 90 27,465 7,683 29,511 8,355 32,836 9,040 44,113 10,076 58,645 11,526 57,313 12,624 70,458 14,686 10,444 12,168 13,781 19,747 27,777 26,147 34,896 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 7,087 8,750 19,059 3,883 499 253 2,141 367 1,774 1,196 1,253 5,432 1 5,431 5,970 912 280 2,424 383 2,041 1,355 2,271 6,514 3,313 374 292 2,739 427 2,312 1,525 3,578 7,149 6,514 7,149 3,306 666 343 3,247 494 2,753 1,713 3,644 8,452 29 8,423 8,973 1,790 7,182 ' 35 32 7,249 9,932 2,289 7,643 190 26 7,861 3,025 3,031 n.a. n.a. n.a. n.a. n.a. n.a. 1,396 464 104 1,547 299 1,249 905 695 4,525 1,093 139 142 1,721 318 1,403 1,014 860 4,337 4,525 4,337 n.a. n.a. n.a. 1,425 115 212 1,915 340 1,575 1,083 964 4,640 1 4,639 Income before taxes and securities gains or losses............................ Applicable income tax es..................................................................... Income before securities gains or losses.......................................... Net securities gains or losses ( —) after taxes.................................. Extraordinary charges ( —) or credits after taxes........................... Net incom e................................................................................................. 6,718 2,166 4,552 -2 3 8 7 4,321 7,109 2,173 4,936 -1 0 5 -1 3 4,818 6,693 1,688 5,005 210 -1 5,213 7,229 1,708 5,522 90 18 5,630 8,681 2,120 6,560 -2 7 22 6,555 9,227 2,084 7,143 -8 7 12 7,068 Cash dividends declared.......................................................................... 1,768 2,036 2,227 2,191 2,423 2,760 See notes on comparability of 1976 commercial bank income data. Insured Commercial Bank Income in 1976 A.2 635 Report of income for member commercial banks Amounts shown in millions of dollars 1972 1973 1974 1975 1976 28,665 31,344 41,616 53,837 51,368 63,643 18,315 n.a. 20,053 n.a. 28,266 n.a. 38,063 n.a. 33,749 n.a. 40,901 4,263 Item 1969 1970 1971 Operating income—T otal......................................................................... L oan s: Interest and fees................................................................................ Interest on balance with banks...................................................... Federal funds sold and securities purchased under resale agreem ent.................................................................................... Securities (excluding trading account income)— T o ta l: .......................................................................................... U.S. Treasury securities................................................................... U.S. Govt, agencies and corporations.......................................... States and political subdivisions.................................................... Other securities.................................................................................. Trust departm ent.................................................................................. D irect lease financing........................................................................... Service charges on deposits................................................................. Other charges, fees, etc......................................................................... Other operating income....................................................................... On trading account (net)................................................................. O ther.................................................................................................... Equity in return of unconsolidated subsidiaries......................... 24,994 27,902 17,096 n.a. 18,698 n.a. 649 781 676 794 1,847 2,724 1,716 1,511 4 ,2 6 3 4 ,8 3 2 5 ,6 6 1 6 ,0 8 7 6 ,5 3 2 7 ,2 3 7 8 ,5 5 9 1 0 ,112 2,041 322 1,794 106 984 n.a. 835 557 609 137 472 n.a. 2,209 415 2,090 118 1,073 n.a. 867 682 970 346 624 n.a. 2,434 578 2,467 182 1,180 n.a. 895 796 1,130 340 800 n.a. 2,412 731 2,710 234 1,269 n.a. 905 864 1,372 254 1,118 n.a. 2,393 943 2,928 268 1,344 n.a. 940 998 1,789 338 1,451 b.a. 2,343 1,268 3,300 326 1,379 n.a. 1,023 1,152 2,261 425 1,836 n.a. 3,166 1,463 3,576 354 1,457 n.a. 1,086 1,359 3,442 497 2,945 n.a. 4,249 1,475 3,686 702 1,625 508 1,122 1,808 1,793 696 1,011 86 Operating expenses—T o tal..................................................................... 19,526 Salaries, wages, and employee benefits............................................ 5,440 Interest on: Time and savings deposits............................................................... 7,882 Interest on time C D ’s of $100,000 or more issued by domestic offices..................................................................... n.a. Interest on deposits in foreign offices...................................... n.a. Interest on other deposits........................................................... n.a. Federal funds purchased and securities sold under repurchase agreements.................................................................................. 1,177 Other borrowed m oney................................................................... 418 Capital notes and debentures......................................................... 89 Occupancy expense............................................................................... 1,092 Less rental incom e............................................................................ 225 N e t....................................................................................................... 867 Furniture and equipment..................................................................... 615 Provision for loan losses..................................................................... 381 Other operating expenses..................................................................... 2,657 M inority interest in consolidated subsidiaries........................... O th er.................................................................................................... 22,184 6,154 23,342 6,638 25,648 7,096 35,037 7,808 46,815 8,834 44,410 9,624 55,922 11,302 8,189 9,426 10,518 15,382 21,812 19,800 27,747 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 5,899 8,672 13,176 1,365 444 90 1,275 263 1,012 722 534 3,674 1,073 127 123 1,408 278 1,130 797 682 3,346 1,387 103 184 1,556 296 1,260 848 768 3,484 3,765 473 204 1,724 316 1,408 924 994 4,079 5,714 871 217 1,929 325 1,603 1,037 1,858 4,870 3,151 336 228 2,155 363 1,792 1,154 3,050 5,275 3,151 638 273 2,563 416 2,146 1,305 3,040 6,322 28 6,293 Income before taxes and securities gains or losses............................ Applicable income tax es...................................................................... Income before securities gains or losses.......................................... Net securities gains or losses ( —) after taxes.................................. Extraordinary charges ( —) or credits after taxes........................... Net incom e................................................................................................. 5,468 1,814 3,654 -2 0 9 5 3,450 5,718 1,774 3,942 -1 0 7 -1 5 3,821 5,322 1,348 3,974 144 -3 4,116 5,696 1,356 4,340 47 14 4,401 6,679 1,653 5,025 -3 0 15 5,011 7,022 1,591 5,431 -6 9 3 5,365 6,958 1,453 5,505 17 23 5,546 7,721 1,931 5,790 111 17 5,917 Cash dividends declared.......................................................................... 1,524 1,753 1,907 1,840 2,019 2,271 2,476 2,451 See notes on comparability of 1976 commercial bank income data. 636 Statements to Congress S ta tem en t by A rth ur F . B urns, C hairm an, B o a rd o f G overnors o f the F ederal R eserve S y ste m , before the S u b co m m ittee on F inan cial Institutions o f the C om m ittee on B anking, H ousing and U rban A ffa irs, C/.S. S e n a te , June 20, 1977. I am very pleased to testify today on behalf of the Board of Governors of the Federal Re serve System in support of S. 1664. This proposed legislation addresses two problems: first, the distortions caused by the rather haphazard spread of the payment of interest by depositary institutions on transactions bal ances; and second, the withdrawal of banks from Federal Reserve membership because of a growing sensitivity to the financial costs of membership. These are serious matters for our economy, as I trust my testimony will make clear, and they are closely interrelated. The bill before you deals with them in an integrated way. I cannot emphasize too strongly the Board’s view that the two major elements of this legislative package are inseparable. Despite our concern about the piecemeal and capri cious manner in which the Nation’s financial institutions have been moving toward the payment of interest on transactions balances, we could not support nationwide extension of negotiable order of withdrawal (NOW) ac count authority if that extension were not coupled with action to lighten the burden of Federal Reserve membership. The risk to the safety and soundness of our banking system on enacting the first part of the package with out the second would, in the Board’s judg ment, be intolerably large. The bill as it stands deals constructively with both matters, and the Board thus sup ports its basic thrust with enthusiasm. In our view, this bill will serve to enhance both consumer equity and competitive balance among financial institutions; it also will repair in significant measure the weakening of our banking structure that has been in process because of the erosion of Federal Reserve membership. The first major provision of this legislation authorizes the payment of interest on transac tions balances held by consumers in the form of NOW or share draft accounts. It thus seeks to extend and regularize a financial trend that has been developing for some time. The pro hibition on the payment of interest on demand deposits enacted in the 1930’s did not actually end such payments; rather it changed their form. In the case of individuals, commercial banks have been providing an implicit return on demand accounts in the form of free serv ices or of service charges below bank costs. The Board’s staff estimates that such services received by individuals are now equivalent, on average, to a rate of return of nearly 5 per cent on their demand deposits. Reflective of competitive pressures, an im plicit interest rate return is also being paid by banks on the demand accounts of businesses and other economic units, such as State and local governments. Large spending units have acquired the sophistication and skill to minimize the balances on which they receive an implicit return; that is to say, they have been increasingly investing their surplus funds in short-dated money market instruments, such as certificates of deposit or Treasury bills, that can be readily converted into trans actions balances. This, in effect, gives them an explicit return on a major part of their transac tions balances. An explicit interest rate return has one important advantage over an implicit rate of return: it is usable for any purpose the recip ient elects rather than just for the purchase of Statem ents to Congress bank services. In some degree, consumers, smaller businesses, and governmental units have also begun to enjoy explicit returns on transactions balances. This development re flects a broad range of competitive, legislative, and regulatory innovations in recent years that have facilitated shifts between savings and demand accounts or directly authorized the payment of interest on what for all practical purposes are demand balances. Since 1970 these innovations have included the following: limited preauthorized transfers from savings accounts by depositors in banks and savings and loan associations; NOW ac counts, at first available only at mutual sav ings banks in Massachusetts and New Hamp shire, and more recently at practically all depositary institutions in New England; resort to withdrawals of cash from money market mutual funds by negotiable draft; the use of credit union share drafts; the ability to transfer funds by telephone from savings accounts to demand deposits; resort to payments to third parties from savings deposits on instructions transmitted by telephone or otherwise; and the use of electronic terminals located in retail establishments so that savings and loan cus tomers can make direct payments to mer chants from savings accounts. In order to share in the opportunities that have been made possible by these innovations, consumers—of course—have to live in New England, or be members of a credit union offering share drafts, or live in an area outside New England where financial institutions offer a special payments plan, or more generally, be sophisti cated enough to be aware of the available alternatives. The broad movement toward explicit inter est on transactions balances has eroded the distinction between demand deposits and time or savings deposits, and it has significantly altered competitive relationships among in stitutions. This movement, moreover, con tinues to gain momentum and, in the judgment of the Board, has become irreversible. The question, therefore, is not whether we can stop it. The issue, rather, is whether we should try to give more specific guidance to an evolu tionary process that so far has been haphazard 637 and piecemeal—entailing, as a consequence, sundry inefficiencies, such as the maintenance of dual accounts by depositors, and various inequities, such as those to consumers to which I have already referred. If no broad Federal reform is made, the trends that I have described will continue, with benefits to con sumers to be sure, but with the creation of new inequities and with unnecessary inefficiencies. Simple prudence suggests that the move ment toward explicit payment of interest on transactions balances ought to proceed more deliberately than it has to date. Nationwide NOW and share-draft accounts limited to in dividuals, as proposed in S. 1664, would be a logical next step in the evolutionary process. That step would certainly result in greater equity for consumers—especially those who lack financial sophistication. It might also permit individuals to earn more on their trans actions balances than they now earn in implicit form. The New England evidence suggests that, at least in the short run, the combination of implicit and explicit payments would be appreciably larger than the implicit return that consumers now earn on their demand de posits. In time, of course, depositary institu tions could be expected to improve service charges in an effort to recover at least part of the costs of offering NOW accounts. They are also likely to be prodded to productivity gains that will limit the need for cost offsets. In the end, heightened competition for consumer de posits that would develop among depositary institutions, together with economizing by consumers in the use of checks, could well result in a rate of return to consumers above current levels. Not only would NOW accounts be advan tageous to consumers, they could also pro duce benefits to the Nation’s mortgage mar ket. Experience teaches that transactions bal ances are more stable over the business cycle—that is, less sensitive to change of interest rates—than are time and savings ac counts. Hence, as NOW accounts grow, the flow of deposits to thrift institutions should tend to stabilize. Such a development may ease the strains of disintermediation that these institutions have to cope with at times of credit 638 Federal Reserve Bulletin □ July 1977 tightness, and by so doing make the flow of mortgage funds somewhat more stable. Despite the potential benefits of NOW ac counts, they obviously will involve costs for financial institutions that must be carefully weighed by the Congress. If NOW account authority is extended, the thrift institutions availing themselves of the authority will be faced with new expenses in providing check services, while commercial banks offering NOW’s will face the need to adjust to explicit interest on transactions accounts after almost 45 years during which such payments were prohibited. Experience with NOW accounts in New England indicated that commercial banks suffer the largest relative decline in earnings when NOW’s are offered. That is to be ex pected because it is their transactions balances that have the greatest likelihood of being con verted into NOW form. Analysis by the Federal Reserve’s staff suggests that the transition burden of NOW accounts on bank profits is likely to be heaviest some 2 to 3 years after the effective date of the legislation and that thereafter it can be expected to decline gradually—perhaps being entirely eliminated in time. This ex pected cycle is predicated on an assumption that the initial stages of transition are likely to be dominated by an intense and quite costly competitive struggle for market shares, which will give way gradually to a situation in which competitors pay more attention to costs and to the establishment of appropriate service charges. Our staff calculates that at the point when profits are depressed most severely, the pre-tax earnings of commercial banks are likely to be running, on average, 5 to 6 per cent below the level that would prevail in the absence of nationwide NOW accounts for individuals. This estimated worst-point impact on profits is less than the impact being experienced currently in New England, partly because the competitive struggle between thrift institu tions and banks for NOW accounts is not likely to be as severe in most parts of the country as it has been in New England and partly because the proposed legislation struc tures NOW-account authority differently from the way it is used in New England. I must note, however, that the estimates of the profits impact of nationwide NOW-account authority involve assumptions that may prove to be incorrect. And I must also note that the indi cated average profits shortfall of 5 to 6 per cent could be appreciably exceeded by indi vidual institutions—those, for example, whose present deposits happen to be weighted heav ily toward consumer demand deposits or those that happen to be situated in communities in which competition becomes especially in tense. The Board is very much concerned about the implications of an adverse impact on bank earnings during the transition to a nationwide NOW environment. The potential impact on bank profits is a key reason for the particular structure of the legislative package embodied in S. 1664. Unless their profits are reasonably well maintained, banks will not be able to adequately serve their communities or effec tively support the expansion of our national economy. To minimize transition costs, S. 1664 limits eligibility for NOW and share-draft accounts to individuals—leaving for another day, when we have more knowledge of the impact and adjustment processes, any extension of such accounts to a broader range of depositors. The objective of minimizing transition costs is also the reason for requiring that the maximum interest rate on NOW accounts be set for a time below the rate on savings deposits at banks, and for the provision that would estab lish a reserve requirement range for NOW accounts that is lower than the existing de mand deposit range. The bill, moreover, con templates that the operative provisions of the legislation will not become effective until 1 year after enactment. This is intended to give financial institutions time for rational planning of their operational systems and marketing strategies, as well as to allow States time to adjust their statutes and regulations. Efforts to minimize the transitional costs of NOW accounts are important for all banks, particularly so in the case of Federal Reserve member banks. As you know, a substantial number of banks have given up membership in Statem ents to Congress the System in recent years, the preponderant reasons being to escape the financial burden that membership entails. Most nonmember banks can hold a significant portion of re quired reserves in the form of earning assets. Member banks, on the other hand, must keep their reserves entirely in nonearning form. The burden of Federal Reserve membership thus consists of the earnings that member banks forego because of their high cash reserves relative to those of nonmember banks; these foregone earnings must, of course, be adjusted for the monetary value of the services to member banks that are rendered by the Fed eral Reserve banks. It is obvious from the trend in Federal Reserve membership that more and more banks are becoming acutely aware of the cost burden of membership and of the competitive handicap arising from that burden. In 1976, 46 banks chose to give up membership and 9 banks left the System as a result of mergers with nonmembers. Over the past 8 years a total of 430 member banks have withdrawn from the System, and an additional 90 have left as a result of merger. Whereas most of the banks withdrawing from membership during this period were small, a trend has also de veloped recently toward departure by larger banks. Of some 42 banks that withdrew from the Federal Reserve System during the first 5 months of 1977, 13 had deposits of more than $100 million. The 5-month loss this year al most equalled the number of banks of such size that left the System in the preceding 3 years. Significantly, 9 of those 13 banks were located in New England. Indeed, almost onefourth of membership withdrawals so far in 1977 have involved New England banks, a strikingly high share considering that as of the end of 1976 that region’s members accounted for only 3 per cent of total System member ship. The influence of NOW accounts on the cost sensitivity of commercial banks is clearly visible in these statistics. The growing awareness of the burden of Federal Reserve membership is dramatically reflected in data on bank deposits for our country. As of May 30 this year, member banks held an estimated 73 per cent of total 639 deposits, down about 15 percentage points from the share held in 1950. In New England, the member banks share of deposits fell from 75 per cent at the end of 1974 to 70 per cent at the end of 1976; and the erosion accelerated sharply in the first 5 months of 1977, so that at the end of May, the New England member banks held only about 63 per cent of that region’s commercial bank deposits. The implications of these statistics are clear. The burden of membership has been causing banks to leave the Federal Reserve System at an accelerating rate, and the New England experience indicated that nationwide NOW accounts will probably accentuate the with drawal trend. It is thus imperative that author ity for extension of NOW accounts be com bined with action to lighten the burden of Federal Reserve membership. S. 1664 would accomplish that by providing for the payment of interest on all required reserve balances held at Federal Reserve Banks. This is an essential part of the administration’s legisla tive proposal. Without it, as I have indicated, it would be impossible for the Board to sup port the proposal to extend NOW accounts nationwide. The declining fraction of banks that are members of the Federal Reserve System is cause for concern on several counts. First, as the proportion of bank deposits at member banks declines, the links between bank re serves, on the one hand, and bank credit and the money supply, on the other, are loosened. This lessens the precision of the Federal Re serve’s monetary control. The problem is complicated by the variability in the relative growth rates of member and nonmember de mand deposits. Over the last decade about 45 per cent of the total rise in demand deposits has occurred at nonmember banks, but the proportion was as low as 23 per cent in 1967 and as high as 67 per cent in 1969. Swings of such magnitude add to uncertainty about the effects of open market operations on aggregate bank credit and deposits. The membership problem complicates the exercise of the System’s monetary control in still another way. At present, the Board’s ability to vary reserve requirements in the 640 Federal Reserve Bulletin □ July 1977 course of conducting monetary policy is cir cumscribed by the fact that any increase in reserve requirements would tend to worsen the competitive disadvantage of member banks, and thereby prompt a further erosion of membership and perhaps also some more loosening of the ties between reserves and the monetary aggregates. The nationwide NOW accounts proposed by S. 1664 would have the effect of further reducing the Federal Reserve’s control over transactions balances if reserve requirements were not imposed on the NOW accounts at all depositary institutions. That is why the legisla tion before you prescribes reserve require ments for NOW accounts at all depositary institutions. This is an essential element of the legislative package. As the New England ex perience indicates, thrift institutions can be expected to capture a significant share of personal transactions balances nationwide, from both member and nonmember banks. Furthermore, if the attrition of membership is not arrested, a rising share of transactions balances at commercial banks will be in the form of NOW accounts at nonmember banks. NOW accounts, however, are an integral part of the money stock. In order to bring this portion of the money stock under the influence of monetary policy, it is clearly necessary that all NOW accounts be brought under the re serve requirement control of the central bank. Aside from its implications for monetary control, the Board is deeply concerned about the structural weakening of the Nation’s bank ing system that is being caused by membership attrition. Nonmember banks do not, of course, have ready access to the Federal Reserve discount window; they must rely instead on correspondent banks to meet their urgent credit needs. However, banking history dem onstrates that correspondent banks cannot ful fill the function of lender of last resort in periods of strong over-all credit demands. The decline in membership increases li quidity risk not just for individual institutions but for the banking system at large. This problem, moreover, is exacerbated by the fact that some of the banks that have withdrawn from membership have been on the weak side. For such institutions, cost cutting is under standably a pressing matter. But it is precisely those banks that can least afford to forfeit the insurance of ready access both to Federal Reserve counsel and to the discount window. Remedial proposals for equal treatment of member and nonmember banks for reserve purposes are not new. In substance, the recommendation was embodied in a report of a congressional committee chaired by Senator Douglas in 1950, repeated in 1952 in a report of a congressional committee chaired by Con gressman Patman, endorsed by the Commis sion on Money and Credit in 1961, reaffirmed by the President’s Committee on Financial Institutions in 1963, and restated again in the 1971 report of the President’s Commission on Financial Structure and Regulation. Since 1964, the Federal Reserve Board has re peatedly urged the Congress to bring all insured commercial banks under the same reserve requirements, and to provide all these banks with equal access to the discount window. Regrettably, however, such legislative propos als have evoked little interest in either branch of the Congress. In view of the apparent reluctance of the Congress to enact uniform reserve require ments for all banks, the Board has considered other proposals for ending the erosion of Fed eral Reserve membership. Our conclusion is that the payment of interest on required re serve balances is the most straightforward and appropriate step. Since the Federal Reserve returns virtually all its net earnings to the Treasury, payments of interest on required reserve balances would reduce Treasury revenues—something, let me note with some emphasis, that would not occur if the Con gress were to enact uniform reserve require ments. The net reduction in Treasury reve nues would, of course, be considerably less than the total of interest payments to financial institutions, since part of the additional in come of commercial banks and their stockhold ers would be recovered through the income tax. Staff estimates indicate that the Treasury would recover about 55 cents of each dollar paid in interest by the Federal Reserve to financial institutions. Statem ents to Congress Even though the cost to the Treasury would be only about 45 per cent of the payments made by the Federal Reserve, the Board is very mindful of the budgetary impact. If the Congress enacts this legislation, I assure you that we intend to keep the net cost to the Treasury as low as possible. However, the Board will need sufficient flexibility to ac complish the purposes of the legislation. The bill before you limits the total payment that could be made to depositary institutions in any given year to a maximum of 10 per cent of the previous year’s net earnings of the Reserve Banks. At the present level of earnings, the indicated maximum could not exceed $600 million—roughly equal to 2 Va per cent of re quired reserve balances. Given the host of prevailing uncertainties, the Board doubts that the proposed 10 per cent ceiling will prove adequate for coping with unavoidable cost problems of member banks. If present esti mates are near the mark, overcoming the burden of membership will of itself require interest payments in the neighborhood of $500 million, so that there would be little room left for alleviating transition costs of NOW’s or for introducing charges on Federal Reserve pay ments services. We are concerned, therefore, that the 10 per cent constraint may reduce System flexibility to a degree that will thwart the basic objectives of this legislation. All the estimates of costs made by the Board’s staff inevitably are subject to a sub stantial margin of error that should be allowed for in setting the ceiling that will govern inter est payments on reserve balances. One simply cannot be sure, for example, what the transi tion costs of NOW’s will be for banks. Nor can one rule out the possibility of either higher interest rates or higher reserve requirements in some year or years in the future. Either or both would increase the net burden of Federal Reserve membership. In order to provide necessary flexibility, the Board urges that the maximum payment to depositary institutions be set at 15 per cent of Reserve Bank earnings instead of the 10 per cent specified in S. 1664. The additional mar gin of 5 percentage points may never be utilized, but having the extra latitude is a 641 necessary precaution. Over time, as the tran sitory costs of the NOW accounts subside and as the average reserve requirement declines as a result of the public’s shift from higher re serve ratio demand deposits to lower reserve ratio NOW accounts, the size of interest pay ments on reserves is likely to decline below 10 per cent of System earnings. But for the years immediately ahead, flexibility above the 10 per cent level is needed. In connection with the matter of making the Federal Reserve’s payments services directly available to thrift institutions and nonmember banks, as authorized by the proposed legisla tion, I think it is important to indicate the Board’s present thinking and intentions. We believe that open access to the System’s check collection services is desirable, providing a means can be devised for effectively equaliz ing the terms of access by all depositary institutions. Equalization requires that all in stitutions bear the same level of costs for a given level of services. Member banks, in effect, already pay for payments services re ceived through foregone income on reserves. The practicality of requiring equivalent bal ances from nonmembers is questionable in view of the apparent reluctance of the Con gress to enact a system of uniform reserve requirements. Thus, unless the Congress moves in this direction, equalization presuma bly will have to be accomplished by means of a system of equitable charges and respon sibilities applicable to all institutions. The Board is considering—and must con sider more fully—alternative systems for col lecting charges for services, such as requiring clearings balances or fees from all depositary institutions. The imposition of such charges, however, would have to make allowance for the fact that member banks are presently paying for the services they receive through income foregone. Such allowance is essential if we are to avoid reintroducing a burden of membership. Consequently, it will be neces sary to offset charges for services to members by payments of interest on reserves. Let me stress, however, that this additional interest will cause no net reduction in the amount of money turned over to the Treasury 642 Federal Reserve Bulletin D July 1977 by the Federal Reserve. That is so because interest payments made to the members for this purpose would be equal in the aggregate to the amount of the charges imposed. As the bill is now written, the interest paid to offset charging for services would be included in the total of all interest payments on reserves and would thus use up a substantial part of the amount available under the 10 per cent earn ings ceiling. This very fact indicates in yet another way the desirability of a higher limit than 10 per cent. Indeed, retention of the 10 per cent ceiling could preclude adoption by the Federal Reserve of a pricing schedule for its payments services. I must also advise this committee that while the Board desires to move to open access, it will in fact be a difficult and time-consuming task to construct a system of equitable charges, in view of the diverse situations of the Nation’s 15,000 banks and of the other depositary institutions that will be affected. Furthermore, since charges for Federal Re serve services will require significant adjust ments at individual institutions, the Board considers it important to defer imposing charges until the transition to nationwide NOW accounts has been well accomplished. Until such time as it proves feasible to impose charges, the Board contemplates that as of the effective date of this legislation the System’s check collection services will be made avail able to thrift institutions holding NOW re serves on terms comparable to those available to nonmember banks. Before concluding this statement, I would like to comment briefly on one other area treated in the proposed legislation, namely, general reserve requirements. In addition to providing for the extension of reserve re quirements at a uniform rate to all NOW and share-draft accounts, this bill widens the band within which reserve requirements against demand deposits may be set. It also con templates ending the anachronistic differentia tion between reserve city and country member banks. The Board welcomes these changes, since they provide the Federal Reserve with an added measure of flexibility in the use of its authority over reserve requirements. The Board seeks one amendment to the reserve requirement section of S. 1664. The statutory range from 3 to 10 per cent for time and savings deposits limits the Board’s ability to modify reserve requirements in the interest of inducing member banks to lengthen the maturity of their time deposits. Although the Board has reduced reserve requirements on longer-term time deposits to as little as 1 per cent for maturities of 4 years or more, most member banks cannot take advantage of this provision since their average reserve require ment on time and savings deposits has reached the legal minimum of 3 per cent. Consequently, the Federal Reserve Board wishes to have the lower boundary of the reserve requirement range on time and savings deposits reduced to 1 per cent. That, Mr. Chairman, completes the Board’s assessment of the major points of the pro posed legislation. In closing, I would just like to restate the essentials of the Board’s posi tion. Interest is increasingly being paid on transactions balances, but the incidence of such payments is capricious—determined by the accident of geography or by the financial sophistication of depositors. Congressional inaction will not stop the spread of interest payments on transactions balances; it will simply mean that the spread is to continue in haphazard, piecemeal fashion, attended by sundry inefficiencies and further distortion in competitive relationships among financial in stitutions. Official action to guide in an orderly manner the widening scope of interest pay ments on transactions balances is long over due. The extension of NOW-account authority should not occur, however, without simul taneous action to eliminate the burden of Federal Reserve membership. That burden— by inducing membership withdrawals—is weakening the structure of our banking sys tem. We should not risk a further weakening by legislating nationwide NOW-account au thority without addressing the membership problem. Most proposals for financial reform that have been considered in recent years have involved an unduly large number of compli cated provisions which, in their entirety, pre Statem ents to Congress 643 sented formidable difficulties to proper evalu ation. By contrast, S. 1664 addresses specific, pressing issues and has quite limited objec tives. The Board hopes that these features of the bill will enhance the prospect of early congressional action. □ S ta tem en t by A rth ur F. Burns, Chairm an, B oa rd o f G overnors o f the F ederal R eserve S y ste m , before the S u b co m m ittee on D o m e s tic M on etary P o licy o f the C om m ittee on Banking, F inance a n d Urban A ffa irs , U .S. H ouse o f R e p re se n ta tiv e s , June 23, 1977. pressures that surround the appointment of cabinet members by a new President. Moreover, by providing that the new proce dure will not take effect until 1982, the propos al is clearly not motivated by any personalized political concerns. On the other hand, my earnest evaluation of this and other proposals that would directly link the term of the Chairman of the Federal Reserve to the term of the President has led me to conclude not only that such linkage is unnecessary but that it would also be unwise—principally because it would amplify the political aspects of Federal Reserve ap pointments. Let me explain. The premise of the legisla tion is that every President should be assured of having his “ own man” as Chairman within a relatively short time after his inauguration. In my judgment, this premise is out of har mony with the Act’s provision of a 14-year term for Board members. By providing for 14-year terms, staggered so that one expires every 2 years—which this bill wisely would not change—the Congress constructed a solid foundation for a monetary authority having both independence and continuity. The as sumption underlying the 14-year term is that Board members will serve the public interest exclusively; and that even though they are appointed through the political process, as Federal judges indeed are, the assurance of a lengthy term will free them from political pressures that might affect officeholders with short terms. However, because H.R. 6273 would link the Chairmanship to the incumbency of a Presi dent, the likely result is that the person selected for that position would not serve his full term and would leave the Board only a year after the President who appointed him left his office. The consequence could be some It is a pleasure to meet with this subcommittee and to testify on H.R. 6273. The bill provides that, beginning on February 1, 1982, and at 4-year intervals thereafter, the Chairman and Vice Chairman of the Board of Governors of the Federal Reserve System shall be ap pointed by the President with the advice and consent of the Senate. It further provides that if a vacancy occurs in either of these offices, any portion of the term remaining shall be filled only for that unexpired portion. Let me say at the outset that at various times I, as well as many other students, have been on different sides of the principal issue raised by this bill. I have always felt, however, that the present procedure of appointing the Federal Reserve Chairman has worked quite well for more than four decades, and that no clear need has been demonstrated for chang ing that procedure. I recognize that there is some force in the argument that the Chairman of the Board of Governors should be congenial to the Presi dent, and this is essentially the philosophy underlying H.R. 6273. The manner in which the bill proposes to advance that objective is thoroughly responsible. By providing that the terms of the Chairman and Vice Chairman shall begin 1 year after a President is inaugu rated, H.R. 6273 would certainly reduce the extent to which these appointments might become enmeshed in the politics of presiden tial elections. The bill would thus encourage the selection of persons to fill these important offices in a deliberative manner, free from the 644 Federal Reserve Bulletin □ July 1977 politicizing of the Federal Reserve, and per haps some erosion of the independence of the Nation’s monetary authority. A corollary of the “linked” terms proce dure, of course, is that vacancies in the offices of Chairman and Vice Chairman can be filled only for the unexpired portions of the terms. This aspect of the proposal is also quite trou bling. Where only a relatively short portion of the 4-year term remains to be served, it may be quite difficult for a President to recruit a highly qualified individual in view of the need for an appointee to sever his prior relationship and divest or put in trust his investments. Nor could the President give any assurance of reappointment to a full term— where, for example, he himself was not eligible for reelection. Even where it might be possible for the President to reappoint his nominee for a full term, the individual appointed to fill an unex pired term would in effect be on probation until the partial term expired. The implications of this for the independence of the Federal Reserve during that period—the possibility that the individual will be inclined to act in such a way as to promote his own reappointment—are obvious. Moreover, the procedure for filling unexpired terms might result in the office of Chairman being unfilled until the President was in a position to make an appointment for a full 4-year term, thus leaving the central bank handicapped for that period. To my mind, these are serious limita tions. Finally, H.R. 6273 would require the ap pointment of the Chairman and Vice Chairman to be subject to Senate confirmation. While I see no compelling need for this procedure, since all nominees to the Board must be con firmed, I have no objection to it, as I informed Chairman Proxmire on June 3. Over the years, Presidents and Federal Re serve Chairmen have developed effective means of exchanging views and cooperating in the public interest without legislation identify ing the Chairman as the selection of a particu lar President. I believe your predecessors in the Congress acted wisely in creating a design for the Federal Reserve that insulated it from politics. That design has stood the test of time and experience exceptionally well. I urge you not to risk introducing a political dimension into the Federal Reserve by adopting legisla tion for which no need has been demon strated. □ S ta tem en t by Philip C. J a ck so n , Jr., G over nor, B oard o f G overnors o f the F ederal R e serve S ystem , before the C onsum er A ffairs S u bcom m ittee o f the C om m ittee on Banking, Finance an d U rban A ffairs, U .S . S en ate, July 11, 1977. Board. I will be commenting on the specifics of those proposals later on in this testimony. Simplification has several dimensions. To some people, it means a reduction in the number of disclosures or the combining of many items of information into a few. To others, it means a reduction in a creditor’s exposure to civil liability. To still others, it means a reduction in the number of court decisions and administrative interpretations of the statute. To many consumers, it means an easier to read, more usable Truth in Lending statement. The Board has been working on simplifica tion for some time. In order to attack the problem at a fundamental level, however, the Board retained several outside consultants to work with the staff and the Board on how the The Board of Governors of the Federal Re serve System wishes to commend this com mittee for considering this very complex con sumer issue and wants to affirm its wholehearted support for simplification of the Truth in Lending Act. Furthermore, the Board commends the sponsors of S. 1213, S. 1653, and S. 1501 and endorses in principle the simplification aspects of those measures. Cer tain features in these bills would implement some of the earlier recommendations from the Statem ents to Congress statute might be revised in order to remedy some of the complexities that have become evident in the closed-end provisions of the act. With me today as consultants to the Board are Professor Jonathan Landers of the Univer sity of Illinois School of Law, an acknowl edged expert in Truth in Lending; Professor Ralph Rohner of the Columbus School of Law of The Catholic University of America, who recently completed a term as counsel to your subcommittee; and Professor Steven Permut of the School of Organization and Manage ment of Yale University, who has specialized in how consumers process and use informa tion. They are available should you have ques tions. The initial product of the task force’s efforts on Truth in Lending simplification was a com prehensive draft statute raising several differ ent issues and approaches to simplification. That draft has been considered and com mented upon by the Board’s Consumer Advi sory Council, other Truth in Lending regula tory agencies, and interested members of the public. I am happy to submit this draft bill and an explanatory memorandum as attachments to this testimony.1 The basic thrust of the Board’s proposal is to improve the delivery of information to the consumer, emphasize the most significant dis closures, and clear up ambiguities and uncer tainties. Thus, our draft bill reduces required disclosures to: (1) the identity of the creditor; (2) the amount financed; (3) the total finance charge; (4) the annual percentage rate; (5) the schedule of payments; (6) the total of pay ments; and (7) in the case of credit sales, the total sales price including any downpayment. In addition, the Board recommends that certain important terms continue to be disclosed—terms that are less directly related to cost and credit shopping and more related to the consumer’s rights on default or prepay ment. The Board recommends that a summary statement with respect to late payment charges, security interests, and prepayment T he attachments to this statement are available on request from Publications Services, Division of Adminis trative Services, Board of Governors of the Federal Reserve System, Washington, D.C. 20551. 645 penalties or rebates be made along with a reference to the actual contract for details. There is no question that these are important terms and that the consumer should be aware of them. However, a complete disclosure de scribing these terms in utter detail is lengthy, legalistic, and of doubtful value in that form. On the other hand, any summary of the terms can be insufficiently informative. As a middle position, the Board recommends requiring a brief summary of certain terms plus a crossreference, to the contract for further details. Under our proposal the consumer would know, for example, that there may be a rebate of finance charges on refinancing. For a fuller explanation of when such a rebate will arise and how it is computed, the customer would need to review the terms of the contract. Similar short-form disclosures would be used for security interests and for late payments, and there would be a general reference to the contract for provisions dealing with the con sequences of default. I want to emphasize that the Board is not recommending that important information now being given be taken away from the consumer. Instead, we believe that clarity is better served if only the most important terms are emphasized on the disclosure statement. The rest will be in the contract, just as they are now. In making these recommendations to reduce disclosures, we are quite aware that reasonable persons may have different opin ions on how much information is important enough to be retained on the disclosure state ment. We believe that reaching a consensus on this question is the most critical step toward Truth in Lending simplification. The Board would like to endorse proposed provisions directing the issuance of model forms. To the extent that the number of dis closures is limited and the term disclosures summarized, the Board is confident that it can fulfill these statutory mandates. However, if a complete explanation of particular contract terms is required, drafting model forms be comes complicated and perhaps fruitless be cause provisions may vary from transaction to transaction and from State to State. The pre payment provision in Attachment A is an 646 Federal Reserve Bulletin □ July 1977 example of how complicated a detailed disclo sure may be. S. 1312 and S. 1501 would retain the basic disclosure requirements of present law but limit the penalties to certain important disclo sures. The Board supports this approach. But in our opinion, the total present disclosure requirements are simply too extensive to per mit effective use by the vast majority of con sumers. This view is based in part upon Pro fessor Permut’s advice that the mass of infor mation now provided may produce a kind of “information overload” that overpowers many consumers and renders the entire dis closure statement a forbidding and incom prehensible document. Indeed, behavioral re search suggests that when confronted with more than a few “bits” of information, con sumers cease to read or retain any of the material offered. Exhibits A and B attached offer some graphic evidence of what I am talking about. Exhibit A is part of a combination contractdisclosure statement currently in use in Mary land. The required Truth in Lending disclo sures are boxed, and you can see how they produce a long and cluttered form. Exhibit B is a form designed by a trade association of small creditors. It is a general purpose form for both loans and credit sales and consists exclusively of Truth in Lending disclosures. Looking at these forms, it is hard to avoid the impression of information overload. There is more information than most consumers can digest. By reducing the number of items of information disclosed as under the Board’s proposal, the important ones will receive a greater emphasis and there will be a greater likelihood of affecting consumer behavior. Stated another way, if consumers’ attention is focused on essential information, it is more likely that they will use it to become more aware of credit costs and in time, through experience, to shop more wisely for credit. Not only does the Board believe that the effectiveness of Truth in Lending will be in creased by limiting the number of items dis closed, but, in addition, it recommends two changes in how the information is delivered. Under the existing law creditors are allowed to integrate the disclosure statement with the terms of the note and security agreement. As evidenced in Exhibit A, this makes the dis closed items difficult to find and understand. Instead of allowing this integration, the Board recommends that the disclosure be made either on a separate piece of paper with no other information, or on the contract, but in a way which clearly identifies the disclosures and segregates them from the other informa tion. We would also recommend that the items to be disclosed contain brief explanations in everyday language. Exhibit C is an example of how the principal cost terms might be de scribed. Although these explanations add to the length of the disclosure statement, the Board believes that the benefits derived from these simple explanations, particularly by less sophisticated consumers, outweigh the costs involved in adding information to the disclo sure statement. In summary, the Board believes that by reducing the number of items emphasized, improving the manner in which the informa tion is delivered, and explaining in everyday language the meaning of the terms, the effec tiveness of the act could be substantially im proved. Another major issue raised in our draft bill is the treatment of credit insurance—an issue that has been controversial since the inception of Truth in Lending. The general rule of the act is that all charges that are incident to or a condition of the extension of credit are finance charges. On the one hand, credit insurance would not exist but for the credit transaction. On the other hand, such insurance is a product separate from the credit with a separate price. Under the existing law, credit insurance is excluded from the finance charge only if it is voluntary and the consumer elects to purchase such insurance after the additional cost has been disclosed. There has been some concern that, at least in some markets, credit insurance has been forced upon unwilling consumers. Although it has been suggested that insurance be a part of the finance charge in all cases, the Board believes that this would lead to compul sory insurance in some markets and would Statem ents to Congress complicate shopping for credit between trans actions in which insurance is offered and transactions in which it is not offered. There fore, the Board recommends that the volun tary nature of the insurance purchase be but tressed further by requiring that the creditor give the consumer 30 days to cancel the insur ance if the premiums are to be excluded from the finance charge. The Board has several recommendations with respect to real estate credit. In purchase money situations, the Board recommends early disclosure of Truth in Lending informa tion, at the same time and along with the estimate of closing costs required by the Real Estate Settlement Procedures Act. We believe that consumers would be better served by receiving estimates of credit costs at an early point in the negotiations, while the consumer still has an effective option to shop for credit. Purchasing a home is the transaction in which a consumer is most likely to shop from creditor to creditor for the best financing. Truth in Lending should encourage such be havior. The Board recommends that the general rule on what charges must be included in the finance charge be applied to real estate. This means eliminating some special exceptions in the present law. Such exceptions now permit certain charges, which are analytically part of the cost of credit, to be excluded from the finance charge—such as credit investigation fees, appraisal fees, creditor title insurance, and other costs associated with the mortgage. We believe that in addition to cleaning up the disclosure statement, simplification is best achieved by doing away with as many special rules and exceptions as possible. If the cost is one that would not be incurred by a prudent cash buyer, it should be part of the finance charge and the annual percentage rate. The Board also believes that real estate creditors should be required to disclose the total finance charge and the total of payments as is done in all other consumer credit transac tions. These exceptions were originally per mitted for real estate creditors because of concern that consumers would be discouraged from purchasing homes if told how much the 647 credit would cost over the full term of the mortgage. Certain States do require that these items be disclosed in real estate transactions, and we know of no evidence from these States that indicates that consumers are frightened away by this information. The value of these disclosures is that a consumer’s ability to assess the dollar difference between different annual percentage rates is improved. A V4 of 1 per cent difference in the annual percentage rate will take on greater significance when the dollar difference it makes over the life of the loan is disclosed. Finally, with respect to real estate, the Board recommends disclosure of whether a loan may be assumed on the original terms and conditions and disclosure if there may be a prepayment penalty. Since most real estate loans are paid off before maturity of the loan, the right of a subsequent purchaser to assume the loan and the existence of a prepayment penalty are matters for which a consumer might wisely shop. The Board is concerned with rescission rights that are exercised long after a proper rescission notice has been given. Present law permits this when there has been a technical error in the disclosure statement. The Board would recommend that the rescission right terminate 3 days after the creditor furnishes notice of the right and a Truth in Lending disclosure statement accurate in its annual percentage rate that discloses the existence of a security interest in the consumer’s home, and is otherwise completed in good faith. One issue that has spawned extensive litiga tion is who must make the disclosures if there is more than one creditor in the transaction. The Board recommends that only one disclo sure statement be required and that the obliga tion to disclose be placed upon the creditor to whom the obligation is made payable on its face. This provides a simple mechanical rule for creditors to follow and should insure that consumers get the required disclosures. As I have noted, our draft bill and this summary of the Board’s recommendations for simplifying Truth in Lending apply primarily to closed-end credit transactions. The Board ex pects to turn its attention shortly to the area of 648 Federal Reserve Bulletin □ July 1977 open-end credit. We will report promptly to this committee on the results of our efforts when completed. Now I would like to discuss some specific aspects of the three bills already before the committee. S. 1653 is directed principally at strengthen ing the authority of the Federal Trade Com mission, which is responsible for Truth in Lending supervision of over a million creditors, to enforce the act. The Board be lieves it is particularly desirable to strengthen the powers of administrative agencies in the light of proposals to limit consumer actions for redress to the substantive disclosures and to leave enforcement of the balance of the act to the administrative agencies. S. 1653 also gives throughtful attention to clarifying certain dif ficult areas involving assignee liability and the consumer’s right to rescission. The Board agrees that these questions deserve careful reconsideration in connection with this major review of Truth in Lending. The Board is pleased to see that both S. 1312 and S. 1501 incorporate many of the simplification recommendations made previ ously by the Board. Briefly, both bills, as well as the Board’s draft bill, would: 1. Eliminate those sections of the act that permit the use of the comparative index of credit costs. 2. Eliminate the right of rescission in the sale of vacant lots—transactions often subject to the Interstate Land Sales Disclosure Act. 3. Permit a single annual report by the Board to the Congress for the Truth in Lend ing, Equal Credit Opportunity, and Federal Trade Commission Improvement Acts. 4. Eliminate the requirement that certain charges listed in Section 106(d) be itemized in order to exclude them from the finance charge. The Board’s proposal goes further by including credit-related costs, such as filing fees and nonfiling insurance premiums, in the finance charge in all cases, while eliminating any charges payable in both cash and credit transactions from the finance charge, regard less of itemization. Both bills, and the Board’s draft, exempt agricultural credit from the act’s coverage. The Board believes that the inclusion of ag ricultural credit under Truth in Lending has caused complexity in the disclosure require ments and difficulties for creditors in making disclosures. In connection with the exemption for ag ricultural credit transactions, Section 2(c) of S. 1501 would exempt from the act’s coverage “credit transactions of borrower-owned Fed eral instrumentalities which extend credit under the supervision of an agent of the United States.” The suggested purpose of this section is to exempt Farm Credit System loans. The Board believes that the exemption for agricultural transactions should provide the necessary relief to agricultural lenders. A general exemption for certain types of creditors from the disclosure requirements is neither warranted nor equitable. Consumer loans to farmers for nonagricultural purposes should be subject to the act, regardless of the type of creditor granting that loan. Further more, the Board is concerned that the broad sweep of the exemption as written may well exempt credit unions from coverage as well. Both bills would amend the act’s current provisions regarding the disclosure of the type of security interest taken and an identification of the property taken as security. The Board’s draft also would eliminate disclosure of the type of security interest but would require identification only of collateral that was not the subject of the transaction. The Board believes that the bank enforce ment agencies now have ample powers to perform their responsibilities under the statute including requiring restitution of overcharges, notification of consumers, public exposure of violations, and cease-and-desist power over repeated offenses. Furthermore, the Board feels that selective application of these powers to individual violations is preferable to the requirements proposed in S. 1312. S. 1312 would eliminate the requirement to disclose monetary charges payable upon de fault but would retain the disclosure for late payment charges. This is essentially the same provision as recommended by the Board in 1976 and contained in the Board’s draft. Con trary to the provisions in S. 1501 that would Statem ents to Congress remove the disclosure requirement, the Board believes this late payment charge disclosure is an important one and should be continued. Section 15 of S. 1501 would substantially amend the act’s provisions regarding its rela tionship to State laws. The general impact would be to expand the act’s pre-emptive effect. The Board supports the thrust of this provision that responds to some of the con cerns I commented on in testimony before the Consumer Affairs Subcommittee of the House Committee on Banking, Housing and Urban Affairs on February 9, 1977. We are con cerned however, that the provisions of subparagraphs (2) and (3) may be so sweeping as to pre-empt all State laws regarding consumer credit, including laws that regulate interest rates and the terms of credit transactions. In considering this issue, the Congress should bear in mind that the appropriate degree of pre-emption of State law is related to the amount of information that will be required to be disclosed. The Board supports the broad objective of helping consumers to develop their creditshopping skills. But it strongly questions whether a massive survey of the scope con templated in S. 1312 would best meet that objective. The exclusive focus on annual per centage rates, for example, tends to deemphasize other important credit information. On the other hand, the intended coverage of all loan categories at all creditors—even if only in large standard metropolitan statistical areas (SMSA’s)—seems overly broad. Though limited to one substantive credit term (an nual percentage rate), the survey could still prove so formidable in the volume of its nu merical data that it would produce its own “information overload.” Coupled with the de lays inevitable in assembling, editing, publish ing, and disseminating the information re quired by the bill, the end product could be of very limited use to most consumers engaged in shopping for credit. The magnitude of the semiannual survey proposed in the bill raises additional issues. One would be the difficulty of identifying such creditors. Obviously, commercial banks and finance companies would be surveyed. Not 649 only would hundreds of thousands of retail outlets be involved but also retailers may have credit arrangements with more than one lender. That could mean that more than one possible rate per loan type would have to be disclosed for certain retailers. Even if retailers were to be excluded, scores of banks, finance companies, credit unions, and savings and loans would be covered in a large SMSA. For example, Chicago includes approximately 1,800; Dallas, over 600; New York, over 800; and Milwaukee, more than 300. These figures do not include branch offices. Not only would many creditors be involved in each area but the bill also specifies that all types of loans, excluding open-end credit, be surveyed. As many as 25 possible loan types may prevail at some institutions, and at least 10 at most creditors. If the proposed survey were to distinguish among loans of the same type but differing by maturity or downpay ment requirements, the volume of published data would be still more cumbersome. And while 75 SMSA’s would now be covered, no information would be available for residents of smaller localities, where nearly half of our total population lives. The reduction of the act’s restrictions on credit advertising, proposed by the bills, is intended to encourage the greater use of this method to inform the public of comparative costs. Advertising is more effective than any surveys in that it is usually directly related to the product or service that is the primary object of the consumer’s buying interest and reflects current credit cost information. We are sympathetic to the cost burdens of creditors that Section 6 of S. 1501 seeks to reduce. At times, we have considered delaying regulatory changes so that they could be bunched. However, most of the changes promulgated up to now have been either in response to court decisions or to creditor requests. If legislative emphasis is needed, a requirement that the Board give consideration to creditor costs as well as to consumer bene fits would be preferable to the mandated delay in changes. Section 7 of S. 1501 contains several provi 650 Federal Reserve Bulletin □ July 1977 sions relating to the right of rescission in certain credit transactions. The first would extend from 10 to 20 days the time frame in which creditors must return to customers property received in the transactions and ter minate security interests. It would also extend to 20 days the time the creditor has to take possession of property tendered by the cus tomer in a rescinded transaction. While the Board has no particular information indicating that the 10-day period is not sufficient, it would not oppose an extension to 20 days. More importantly, however, the act would be amended to provide that, with respect to transactions rescinded after the third business day, the customer could not rescind the trans action unless the customer also tenders the property, principal amount of the loan, or other consideration received from the creditor. Currently, the act requires the creditor, within 10 days of receipt of notifica tion of rescission, to cancel any lien and to return to the customer any money or property received from the customer. Once the creditor has performed, the customer must then tender to the creditor the property it has received as part of the transaction. Requiring the cus tomer to tender the property before the creditor acts could seriously inhibit any cus tomer from rescinding. A third major rescission provision is to provide a definition of “ material disclosures” as applicable to certain disclosures. The Board has addressed this same issue in its draft, providing that the rescission information and annual percentage rate must be stated accu rately and that the other elements of the disclosure must be completed in good faith. Section 8 of S. 1501 would eliminate the requirement of Section 126 of the act that creditors who choose to send periodic billing statements in connection with credit other than open end include certain disclosures on those billing statements. Since there are no requirements that creditors send such periodic statements, it does not seem necessary to impose requirements on those creditors who do. The Board supports this deletion. Section 9(c) of S. 1501 would permit creditors to send the notice of fair credit billing rights to customers annually rather than semiannually as is currently required. The Board believes that an annual notice is suffi cient and supports this relaxation. The Board concurs that the type of toler ance in long-term credit proposed in Section 10(d) and (e) of S. 1501 would aid in the administrative aspects of this type of credit. Section 13 of S. 1501 changes the advertising provisions of the current act to permit the advertising of the periodic rate and the annual percentage rate alone in open-end credit, without including other credit terms. In closedend credit advertising, Section 13 would elimi nate the requirement that the cash price or the amount of the loan and the downpayment must be disclosed if specific terms are men tioned in the advertisement. The Board would support the concept of limiting restrictions on advertising of terms but thinks that a final resolution should await a decision on possible changes in the disclosure requirements. Be cause of the multitude of ways of computing the finance charges in open-end credit accounts, the annual percentage rate standing alone is not a meaningful disclosure and, in fact, may be misleading in some cases. I am attaching to this testimony a technical analysis of the open-end and advertising provi sions of three bills that have been introduced as well as some technical comments on these bills. □ Statem ents to Congress S ta te m e n t b y S te p h e n S . G a r d n e r , V ic e C hairm an, B o a rd o f G overnors o f the F ederal R eserve S ystem , before the S u b co m m ittee on Financial In stitutions Supervision, R egu lation and Insurance o f the C o m m ittee on Banking, Finance and U rban A ffairs, U .S . H ou se o f R ep resen ta tives, July 12, 1977. Mr. Chairman, members of the committee, it is a pleasure to testify in support of the Inter national Banking Act of 1977. This landmark legislation is very important to American con sumers and businesses, to Federal and State bank regulatory authorities and legislators, to the management of monetary policy, and to U .S. relations with our trading partners. Without attempting to weigh the importance of each relative interest, because all must be considered fairly, I would emphasize that the bill is a domestic bank regulatory measure and should be so characterized. The only unique thing about foreign bank offices in this country is that they are owned and managed from abroad mostly by large multinational banks with worldwide assets exceeding $1 billion. As these hearings will indicate, they are also a very large and rapidly growing part of our domestic banking system. Their banking ser vices are sold to American consumers and businesses, and they compete directly with domestic banks that are regulated and super vised under a comprehensive system of Fed eral and State laws and regulations. I am optimistic that these hearings will lead to the enactment of a law that is fair and appropriate for all parties, embodying the principle of national treatment for foreign banks and conforming their regulation evenly and equitably to that imposed on similar domestic banking organizations. My optimism is based on these facts. Last year this commit tee did an outstanding job in proposing an International Banking Act to the full House, which passed as H.R. 13876. The appropriate subcommittee of the Senate held a full set of hearings on this proposal and was prevented from continuing this work only because of the adjournment of the Congress. Further, propos als of this kind have been before the Congress and before the public since 1974, and there has 651 been ample opportunity for the Congress to hear all points of view germane to this bill. Two things have happened in this process. First, the original legislative proposals have been changed significantly to meet some basic objections, and the Federal Reserve has rec ommended further changes that, in our judg ment, should meet the remaining points of controversy. Second, those who foresaw a continued and rapid growth of foreign bank operations in the United States have seen their predictions fulfilled. Since the introduction of the Board’s first proposal in 1974, foreign bank operations in this country have continued to grow in number, size, and importance. They have been assuming an increasingly important share of the market for commercial and indus trial loans, have been increasing their penetra tion into regional markets and retail banking services, and have been active participants in domestic money markets. Our most recent data show that 210 banking facilities are oper ated by 94 foreign banks in the United States. More than half of these foreign banks operate across State lines: 22 foreign banks have bank ing offices in three or more States, and another 28 foreign banks have banking offices in two States, an advantage denied to dom estic banks. Foreign bank interest in the United States is growing at a remarkably rapid pace, and even the most partisan of those who oppose any form of Federal regulation must grant that further delay will surely complicate the work of the Congress in enacting appropri ate legislation. Mr. Chairman, I am submitting with my testimony a Statistical Appendix providing data on the growth of foreign bank operations and a compendium of supporting documents intended for the committee’s use. In today’s statement, I would like to address those provi sions of the act that may be questioned by later witnesses. As recently as 3 years ago, many held the belief that foreign banks in our economy were highly specialized institutions operating only in port and gateway cities where interna tional trade was important, and those opposed to legislation argued that their chartering and regulation could be left to the States. Such 652 Federal Reserve Bulletin □ July 1977 arguments today, in view of the extraordinary expansion of these banks in the context of the development of multinational banking, have been thoroughly disproved. The rapid expansion of multinational bank ing has been occurring abroad as well as in the United States. The growth of this international financial community is testing the regulatory frameworks and monetary system in many other countries. In Belgium, the Netherlands, the United Kingdom, and Canada, banking laws are currently being revised. Other coun tries are reviewing their existing regulations and supervisory practices. The business this committee is about is thus very common in other nations, and it is an entirely responsible and appropriate activity. For the United States is alone among the leading trading na tions of the western world in having virtually no national policy, monetary controls, or na tional presence where foreign banks are con cerned. Over the past several years, as we have testified before, we have generally found the banking authorities in other countries to be sympathetic and understanding of the need to rationalize the treatment of foreign banks in our country with our domestic banking sys tem. Many foreign central bankers consider it surprising that the United States does not have a national policy on foreign banks, and, in particular, they recognize the logic of extend ing monetary and credit controls to foreign banks operating within our borders and con ducting transactions in our currency. This, of course, is a fundamental reason for enacting this bill. The committee should not be misled by criticism from commercial bankers abroad. The objections to the legislation addressed to those sections of the bill that would require divestitures or the closing of existing facilities can be dealt with during the legislative pro cess. Objections to the United States having appropriate powers to guide monetary and credit policies within this country should not be given undue weight. In the Board’s letter to you endorsing the present legislation, there are included propos als for amendments addressed to the most valid concerns of those opposing certain of its sections. I would like to touch on these amendatory proposals and underline their im portance to the success of the legislation before you. I have referred to monetary policy controls, and your bill largely accomplishes the objec tive of establishing for foreign banks a fair equivalant to the monetary regulations that affect comparable domestic banking institu tions. The bill does not require formal mem bership in the Federal Reserve System. It simply requires that those foreign banks operating in the United States that have $1 billion or more in worldwide bank assets main tain reserves in the same way as the largest U.S. banks, virtually all of which are members of the Federal Reserve System. There is, however, an omission in the pres ent bill. The State-chartered subsidiaries of large foreign banks are exempted from mone tary controls. The Board believes that the appropriate test for the imposition of mone tary controls is the size and the ability of a foreign bank to com pete and participate through its U.S. affiliates in our large money and credit markets. Thus, the Board recom mends that Section 7 of the bill be amended to require that Federal Reserve monetary con trols be applied to all the U.S. operations of a foreign bank that has $1 billion or more in worldwide bank a ssets, irrespective of whether they are conducted through agencies, branches, subsidiary banks, or subsidiary New York investment companies. If we omit one corporate form of organization from such restrictions, the bill’s purpose will be sub verted and its effectiveness will be severely reduced. Consistent with national treatment, Section 5 of the bill generally subjects foreign banks to the same multi-State restrictions that apply to domestic banks. The Board believes, how ever, that direct imposition of the branching restrictions of the McFadden Act should be limited to Federal branches and agencies. State branches should be put on the same competitive footing as State banks in their home State. In this way, foreign banks may benefit from future reciprocal interstate Statem ents to Congress branching legislation that may be agreed upon among the States. In our previous comments on the bill, we suggested that multi-State restrictions apply to both branches and agencies of foreign banks. I expect you will hear strong testimony from State authorities urging that agencies remain exempted from multi-State branching restric tions as the bill now provides. The Board has carefully considered these arguments, which arise quite naturally from those States in terested in attracting offices of foreign banks to assist in expanding their local industries’ participation in foreign trade. I would like now to propose what appears to be a reasonable alternative. That alternative would be to limit agencies of foreign banks that are licensed by the States in the future to powers that are no greater than Federally chartered Edge Act Corporations. These future State-licensed agencies would thus be able to conduct a full service international banking business and to promote the further development of interna tional trade and investment throughout the country. At the same time, the multi-State restrictions on banking offices conducting a full-service domestic banking business would not be compromised. To exempt agencies en tirely would, in our judgment, exacerbate the present multi-State advantages enjoyed by foreign banks, as, traditionally, agencies have been the most important form of foreign bank activity. This alternative would equitably meet the interests of the States that wish to have international banking agencies, the interests of foreign banks that wish to establish interna tional banking facilities in more than one trade center, and the public interest in competitive equality with our domestic banks. The issue of deposit insurance on foreign bank operations in order to protect U.S. con sumers and business has been debated since 1974. Following the action of this committee and the House vote on H.R. 13876 last year, the Federal Deposit Insurance Corporation (FDIC) suggested in comments to the Senate a method of applying deposit insurance to the domestic deposits of U.S. branches of foreign banks. In the judgment of the Board, that alternative is far more desirable than the pres 653 ent Section 6 of the bill. The Board favors compulsory FDIC insurance on deposits in branches of foreign banks. The arguments for extending FDIC insurance to these deposits are very direct and simple. The United States has enjoyed an extraordinarily successful sys tem of deposit insurance protecting in its end effect jobs, businesses, and our economies locally, regionally, and nationally since the 1930’s. It is a model act covering virtually all full-service commercial banks in this country. It is being studied and copied by foreign governments. It would be a curious turn of events to abandon our world leadership in this area by substituting an imperfect form of protection. Surety bonds or pledges of assets cannot be considered comparable to the cer tainty of FDIC insurance and the ability of the FDIC to protect our citizens from bank fail ures. Because of the continuing rapid growth of foreign bank operations in this country, it will become progressively more difficult to adopt grandfathering proposals for their existing ac tivities that are equitable and consistent with prior legislative precedent. Your bill grand fathers multi-State banking operations as of May 1, 1976. Nonbanking activities, other than securities affiliates, are permanently grandfathered as of December 3, 1974. The Board concurs strongly in the permanent grandfathering of these activities and believes it appropriate for the Congress to review the existing grandfathering dates. A majority of the Board believes these dates should be brought forward to afford equitable treatment to all existing facilities. As for securities affiliates, it will be recalled that the Senate hearings on the International Banking Act of 1976 produced extensive con troversy concerning the securities affiliate provisions in the present bill. The Board urges that the securities affiliations that are in place today be permanently grandfathered to quiet the controversy, and that, as a safeguard, the Board be given the discretion to review these activities under the nonbanking standards of the Bank Holding Company Act for any abuses that might arise over time. This would meet the concerns expressed by the regional 654 Federal Reserve Bulletin □ July 1977 stock exchanges. It would also provide some certainty to foreign banks that their securities affiliates, which are still a very small part of the securities industry, could continue to op erate in essentially the same form and relative size as at present. As we have indicated to the committee, the Board does not see the necessity for the detailed guideline provisions on foreign bank entry in Section 9 of the bill. The State and Federal regulatory agencies already have ap propriate statutory requirements that must be fulfilled by those who apply for permission to conduct a banking business in this country. The provisions of the bill, which provide for consultation between bank regulatory au thorities and the Secretaries of State and Treas ury on new foreign bank applications, would seem entirely adequate to insure that any important foreign policy issues are considered when appropriate. I would expect that in al most all cases this consultative procedure would be entirely routine. Legitimate issues that have been raised by foreign banks concerning fair national treat ment include a key issue related to the non banking prohibitions of the Bank Holding Company Act. Last year there apparently was a misconception on the part of some foreign bankers, who thought that the nonbanking pro hibitions that we apply to banks in our domestic market would seriously interfere with their nonbanking interests abroad. For that reason we have proposed a clarifying amend ment to this bill whereby foreign banks that are principally engaged in banking abroad would not be prohibited from retaining or ac quiring interests in foreign-chartered, non banking companies that have U.S. activities but which are principally engaged in business outside the United States. While the Board believes it has sufficient regulatory authority under present law to deal with such problems, we also believe it would be desirable for the Congress to embody this principle in the statute. In this proposal, we have included a requirement that any banking transactions with U.S. offices of such foreign affiliates be con ducted at competitive rates and terms. In this way the firm or bank involved would not have an unfair advantage over their respective U.S. competitors. The Board’s carefully considered and strong support of the International Banking Act of 1977 is based on the conviction that the pro posed bill with the amendments that we have recommended would fairly implement the principle of national treatment of foreign bank ing organizations operating in the United States. In the opinion of the Board, as we have repeatedly emphasized, that principle is the only workable and equitable method of deal ing with these organizations. As I have suggested in this testimony, most responsible objections to the legislation have been or can be met. The question then is simply: should we not put foreign and domes tic banks on a relatively equal footing now, for surely they should be in time. This legislation is an essential ingredient in the larger process of rationalizing and modernizing our own banking laws. That work will be fairer and easier if it is evenly applicable to all banks as it would be under this legislation. The conscientious and excellent work of the Congress and the committee should continue until this bill is passed. The Federal Reserve is ready to assist in any way necessary. □ 655 Record of Policy Actions of the Federal Open Market Committee MEETING HELD ON MAY 17, 1977 Domestic Policy Directive The information reviewed at this meeting suggested that real output of goods and services—which had increased at an annual rate of 5.2 per cent in the first quarter, according to preliminary estimates of the Commerce Department—was expanding at a rapid pace in the current quarter. The rise in average prices—as measured by the fixed-weighted price index for gross domestic business product— appeared to have slowed somewhat from the annual rate of 6.8 per cent estimated for the first quarter. According to staff estimates, real output was growing at a significantly faster pace in the current quarter than had been projected a month earlier. It now appeared that the expansion in consumer purchases of goods and services would be considerably stronger than had been anticipated, although still not so strong as in the first quarter; that the gain in business fixed investment would be larger than had been expected and that the recovery in net exports of goods and services would be greater, following a much larger decline in the first quarter than had been estimated a month ago. The staff projections for the second half of 1977 differed little from those made just before the previous meeting, which had incorpo rated assumptions about Federal fiscal measures that were later enacted or funded. Specifically, the assumptions included the in crease in the standard deduction for personal income taxes passed by the Congress on May 16 and the expansion in outlays for public service employment, for local public works, and for countercyclical revenue sharing. Growth in real GNP for the second half was projected to be substantial, although not so rapid as in the second quarter. It was anticipated that increases in Federal purchases of goods and serv ices would be larger; that expansion of business investment would 656 Federal Reserve Bulletin □ July 1977 remain relatively strong; and that investment in inventories would accelerate. At the same time, however, it was expected that growth in consumption expenditures would slow somewhat further; that the pace of the expansion in residential construction would moderate; and that net exports of goods and services would change relatively little from the second-quarter level. In April, expansion in economic activity remained vigorous. Industrial production rose by 0.8 per cent, following a gain of 1.4 per cent in March. Relatively large increases in output were widespread among both final products and materials. However, assemblies of automobiles declined somewhat, both because of strikes at a few motor vehicle plants and because of efforts to reduce the exces sive inventories of small-model cars. The rate of capacity utilization in April remained at 82 per cent for manufacturing as a whole and increased from 81 to 82 per cent for the materials-producing industries. These utilization rates were about 6 and 10 percentage points, respectively, below the peaks in the previous business expansion, when capacity restraints in a number of materials-producing industries limited growth in output and contributed to upward pressures on prices. The number of private housing units started in April had not been made public by the time of this meeting. In March, as reported just before the last meeting, starts had risen sharply further to an annual rate of about 2.1 million units—the highest rate in nearly 4 years. For the first quarter as a whole, starts were about the same as for the fourth quarter of 1976 and more than one-tenth above the total for the third quarter. Sales of new and existing homes combined remained vigorous in March, and nonbank thrift institutions con tinued to supply a substantial volume of mortgage credit with little change in interest rates, despite reduced inflows of deposits. Developments in labor markets continued to reflect the strength in economic activity. Payroll employment in nonfarm establishments expanded considerably in April, after a sharp rise in March; the increase since December—amounting to 1.3 million persons—was unusually large for a 4-month period. The unemployment rate declined further in April, by 0.3 of a percentage point, to 7.0 per cent. During the second half of 1976 the rate had fluctuated between 7.8 and 8.0 per cent. Growth in total personal income accelerated to an annual rate of R ecord o f Policy Actions o f FOMC 20 per cent in March from about 17 per cent in February, reflecting in large measure faster expansion in private wage and salary payments. The employment statistics suggested that wage and salary payments continued to grow in April, although at a less rapid pace than in the two preceding months. Consumer demands remained strong. In April total retail sales held at the advanced level reached in March and were 214 per cent above the monthly average for the first quarter. Sales of new automobiles declined somewhat, after having surged upward in March. However, sales of other consumer items rose by about 1 per cent, equaling the gain in the preceding month. New orders for nondefense capital goods rose as much in March as they had declined in February, and for the first quarter as a whole they were up about 6 per cent from the preceding quarter. Unfilled orders for such goods edged up during the first quarter. Contract awards for commercial and industrial buildings—measured in terms of floor space—shot upward in March, and the total for the first quarter was SV2 per cent above that for the preceding quarter. A private survey, conducted in late March and early April, indicated that businesses were planning to spend significantly more for plant and equipment in 1977 than had been shown by surveys taken in February and in the autumn of 1976. The index of average hourly earnings for private nonfarm produc tion workers rose at an annual rate of 6.8 per cent in April, about the same as the average increase during 1976; over the first quarter the rise had accelerated to a rate of 7.3 per cent, in large part because of an increase in the minimum wage at the beginning of 1977. Major collective bargaining settlements in the first quarter provided for first-year increases in wages averaging 7.6 per cent, compared with an average of 8.4 per cent for the first-year adjustments under contracts negotiated during 1976. However, compensation per hour for all persons in the nonfarm business sector of the economy rose at an annual rate of about 10 per cent in the first quarter, up from 7 per cent in the preceding quarter and from an average of about 8 per cent over the four quarters of 1976. The rise reflected not only the increase in the minimum wage but also an increase in taxes on employers for social security and unemployment insurance. The wholesale price index rose 1.1 per cent in April, marking the third consecutive month of increases of about 1.0 per cent. The 657 658 Federal Reserve Bulletin □ July 1977 index had risen 0.5 per cent on the average during the 6 months ending in January. The acceleration in the latest 3 months was attributable to sharp increases in prices of farm products and foods. At the same time, however, there were sizable advances among industrial commodities; the average for such commodities rose 2.0 per cent over the 3-month period. The consumer price index increased 0.6 per cent in March—less than in January and February but still somewhat more than the average during the second half of 1976. In March price increases averaged 0.6 per cent for foods, 0.4 per cent for nonfood com modities, and 0.8 per cent for services. The average value of the dollar against leading foreign currencies changed little on balance over the inter-meeting period. The dollar rose against the Japanese yen, but it declined against the currencies associated in the European “ snake” arrangement. The change in the dollar/yen rate reflected a sharp decline in short-term interest rates in Japan and market reaction to a decision by the U.S. Customs Court requiring the imposition of countervailing duties on imports of electronic products from Japan. Despite its recent weakening, the yen was nearly 6 per cent higher against the dollar than it had been at the end of 1976. The U.S. foreign trade deficit, already large in January and February, was still larger in March. The deficit for the first quarter as a whole was almost twice that for the final quarter of 1976, as imports rose 10 per cent and exports were virtually unchanged. Among imports, increases in the first quarter were largest for fuels, foods, automobiles from Canada, and consumer durable goods other than autos. The net outflow on bank-reported capital transactions declined sharply in the first quarter. At U.S. banks, growth in total credit accelerated during April from the already brisk pace of the first quarter. All major loan categories expanded significantly further, and holdings of taxexempt securities increased sharply for the first time since November. A sizable part of bank acquisitions of such securities consisted of tax-anticipation notes—particularly those issued by New York State—but banks in most areas of the country increased their holdings of long- as well as of short-term municipal issues. Bank holdings of U.S. Government securities declined. In April the strength in business credit at banks was concentrated R ecord o f Policy A ctions o f FOMC at smaller institutions. The relative weakness of business loan demand at large banks apparently reflected a preference of large corporations to cover their increased requirements for short-term financing at the lower interest costs prevailing in the commercial paper market. As a result, commercial paper issued by such corporations rose by the largest amount in 2Vi years. Growth in the narrowly defined money stock (M-l) accelerated to a record annual rate of nearly 20 per cent in April. Temporary influences contributed to this rapid growth, and data for early May indicated some shrinkage in money balances. In addition, however, the rapid expansion in economic activity appeared to have been raising transactions demands for money. Over the 12 months ending in April, M-l grew about 6Vi per cent. Inflows of the time and savings deposits included in M-2 and M-3 continued to moderate in April. However, the large increase in M-l produced a marked acceleration of growth in the broader aggregates in that month. Over the 12 months ending in April, M -2 grew about IOV2 per cent and M -3 about \2Va per cent. At its April meeting the Committee had decided that growth in M -l and M-2 in the April-May period at annual rates within ranges of 6 to 10 per cent and 8 to 12 per cent, respectively, would be appropriate. It had judged that these growth rates were likely to be associated with a weekly-average Federal funds rate of about 43A per cent. The Committee had agreed that if growth rates in the aggre gates over the 2-month period appeared to be deviating significantly from the midpoints of the indicated ranges, the operational objective for the weekly-average Federal funds rate should be modified in an orderly fashion within a range of AV2 to 5lA per cent. Data that had become available in the days immediately after the April meeting suggested that over the April-May period both M-l and M-2 would grow at rates well within their specified ranges, although it appeared that growth in April would be strong. Accord ingly, the Manager of the System Open Market Account sought to maintain the Federal funds rate at about 43A per cent or a shade higher. By late April, however, incoming data suggested that over the 2-month period M-l was likely to grow at a rate considerably above the upper limit of its specified range and that M-2 was likely to grow at a rate close to the midpoint of its range. In those circum stances System operations in late April and early May were 659 660 Federal Reserve Bulletin □ July 1977 conducted with a view to raising the Federal funds rate toward 5Va per cent, the upper limit of its specified range. On May 6 the Committee voted to increase the upper limit of the range for the Federal funds rate from 5X A to 5Vi per cent, with the understanding that the Manager would use the additional leeway only if new data becoming available before May 17, the date for this meeting, suggested that the aggregates were strengthening signifi cantly further on balance. Such additional strength did not develop in that period, and the Manager continued to aim for a funds rate of around 5lA per cent. In the final days of the period, the rate actually fluctuated between 5lA and 5% per cent. Short-term market interest rates rose generally by Vi to % of a percentage point during the inter-meeting period. The rate on 3-month commercial paper rose from 43A to 55/s per cent, and near the end of the period most major banks increased their prime interest rate on business loans from 6 lA to 6V2 per cent. Upward pressures on short-term rates were tempered by a significant reduction during the period in the outstanding volume of Treasury bills. Yields also rose somewhat in the longer-term markets, but—as in the short-term markets—upward pressures were moderated by Treasury operations. In its mid-May refinancing the Treasury re duced its outstanding debt by about $400 million. Moreover, it announced that it planned to reduce the debt by an additional $450 million when $2.0 billion of 2-year notes matured later in the month. In the corporate bond market, rate pressures were tempered by a significant drop in public offerings of new issues in April. Private placements of corporate issues were estimated to have remained large, but insurance companies continued to bid aggressively for privately placed securities. Bond offerings by State and local governments also were large in April. Net mortgage lending during the first quarter of 1977 was near the record rate of the previous quarter, and the volume apparently remained large in April. Issues of GNMA-guaranteed, mortgagebacked securities in April were close to the strong pace of the first quarter, and mortgage loans outstanding at commercial banks also continued to grow at a rapid rate. In March, the latest month for which data were available, mortgage commitments outstanding at savings and loan associations rose further to another new high. Average interest rates on new commitments for conventional home R ecord o f Policy Actions o f FOMC mortgages continued to edge higher in April, and yields in the secondary mortgage market for FHA/VA loans changed little on balance over the month. It appeared likely that the Treasury would be able to make additional reductions in the volume of bills outstanding over the rest of the current quarter but that it would need to raise a large volume of new money later in the year. At the same time, business demands for credit—especially for short-term credit—were expected to re main relatively large as a result of continuing improvement in economic activity. Projections of consumer expenditures implied a sustained high rate of growth in consumer credit and mortgage debt. At its April meeting the Committee had agreed that from the first quarter of 1977 to the first quarter of 1978 average rates of growth in the monetary aggregates within the following ranges appeared to be consistent with broad economic aims: M - 1, 4Vi to 6V2 per cent; M-2, 7 to 9Vi per cent; and M - 3, SV2 to 11 per cent. The associated range for growth in the bank credit proxy was 7 to 10 per cent. It was agreed that the longer-term ranges, as well as the particular aggre gates for which such ranges were specified, would be subject to review and modification at subsequent meetings. It also was under stood that short-run factors might cause growth rates from month to month to fall outside the ranges contemplated for annual periods. With respect to the economic situation and outlook, members of the Committee generally were of the view that the expansion in business activity was quite strong. In particular, they expected over-all growth to remain substantial for a number of quarters ahead. While not disagreeing with that view, a few members indicated that they would not exclude the possibility that growth in output would prove to be slower than generally expected. Two of these members focused on the possibility that a slowing of growth in consumption expenditures might be accompanied by inadequate expansion in other sectors. Specifically, it was suggested that substantial increases in business investment in fixed capital and inventories were not assured in the current business expansion, which was now in its third year and rather old by historical standards. It was also noted in this context that, according to statistics released a day or two ago, the level of inventories at the end of March had been higher than assumed, and that in the spring of 661 662 Federal Reserve Bulletin □ July 1977 1976 inventory demands had weakened rather promptly after the rise in retail sales had slowed. One member expressed concern that in ventory demands might be unsustainably high in the quarters im mediately ahead, leading first to relatively rapid growth in over-all activity and then to a slowing down. Other members felt that if anything the probabilities favored expansion at a faster rather than at a slower rate than generally expected. It was suggested that business confidence in the outlook for economic activity appeared to have increased considerably. One member expressed the opinion that there was nothing particularly abnormal about the current business expansion, despite the pick-up in the rate of increase in prices and the existence of various uncertainties. The recent acceleration in the rate of price rise was a source of concern. One member remarked that the sustainability of the expansion could be threatened by intensified upward pressures on labor costs and prices. The observation was made that the adminis tration’s proposals for increases in social security taxes on em ployers beginning in 1979 would raise unit labor costs substantially. It was felt that the prospects of such increases—especially in conjunction with certain features of the proposed energy policy— had contributed to business uncertainties. It was reported in the discussion that there had been a consider able volume of speculation in real estate in some parts of the country, accompanied by rapidly rising prices. While speculation was described as being greatest in residential properties on the West Coast—with turnovers at rising prices financed by credit from banks and savings and loan associations—it was also reported to be occurring in farmland in some other areas of the country. It was observed that, heretofore, the present business expansion had been free of the sort of speculation that had the potential to cause problems later on. As to policy for the period immediately ahead, members of the Committee thought that relatively slow growth in monetary aggre gates over the May-June period would be appropriate in order to compensate at least in part for the exceptionally rapid growth in April. In considering the ranges of growth to be specified for the 2-month period, they took account of a staff analysis that suggested that the extremely large expansion in M -1 in April appeared to have R ecord o f Policy Actions o f FOMC raised the money stock sufficiently to accommodate much of the public’s need for additional transactions balances in the second quarter and, consequently, that monetary growth was likely to be slow. The members did not differ a great deal in their preferences for ranges of growth in the monetary aggregates over the May-June period. For M - 1, most of them favored a range of 0 to 4 per cent for the annual rate of growth over the 2-month period. Some sentiment was expressed for slightly different ranges: -1 to 4 per cent, 0 to 5 per cent, and 1 to 5 per cent. For Af-2, most members favored a range of either 3 to 7 per cent or 4 to 8 per cent, but those who favored the wider ranges for M-l preferred comparably wider ranges for M - 2. Differences of view were somewhat greater concerning the Fed eral funds rate, and they turned in large part on the degree of leeway that should be provided for operations during the inter-meeting period in the event that the aggregates appeared to be deviating significantly from the midpoints of the specified ranges. In view of the rapid monetary growth in April, several members suggested that it would be desirable in the coming period to avoid any significant decline in the weekly-average Federal funds rate from its current level of 5lA to 53/s per cent even if growth in the aggregates appeared to be significantly below the midpoints of the specified ranges. Other members were prepared to accept a decline in the funds rate to 5 per cent under those circumstances. Most Committee members did not wish to see a rise in the weekly-average Federal funds rate above 53A per cent during the inter-meeting period—at least not without further consultation. In addition to advocating an upper limit of 53A per cent for the inter-meeting range, these members generally favored maintaining the funds rate at the outset of the period in the area of 5lA to 53/s per cent or permitting it to rise only slightly. In support of constraining the upper limit to 53A per cent, it was suggested that a further rise of 50 to 60 basis points—roughly the magnitude of the increase since the April meeting—was likely to have more significant repercussions on financial markets and that considerable uncertainty existed about the underlying strength of the monetary aggregates. A few members of the Committee suggested an upper limit of 6 per cent for the funds rate range and an initial objective of 5Vz or 55/s per cent, because they 663 664 Federal Reserve Bulletin □ July 1977 viewed the economic situation as quite strong and they thought such a course would be helpful in restraining excessive growth in the aggregates later on. At the conclusion of the discussion the Committee decided that growth in M - 1 and M-2 over the May-June period at annual rates within ranges of 0 to 4 per cent and 3Vi to IV i per cent, respectively, would be appropriate. It was understood that in assessing the behavior of the aggregates, the Manager should continue to give approximately equal weight to the behavior of M - 1 and M -2 . In the judgment of the Committee, such growth rates of the aggregates were likely to be associated with a weekly-average Federal funds rate of about 53/s per cent. The Committee agreed that if growth rates of the aggregates over the 2-month period appeared to be deviating significantly from the midpoints of the indicated ranges, the operational objective for the weekly-average Federal funds rate should be modified in an orderly fashion within a range of 5V\ to 53A per cent. As customary, it was understood that the Chairman might call upon the Committee to consider the need for supplementary instructions before the next scheduled meeting if significant inconsistencies appeared to be developing among the Committee’s various objectives. The following domestic policy directive was issued to the Federal Reserve Bank of New York: The information reviewed at this meeting suggests that real output of goods and services is growing at a rapid rate in the current quarter. In April industrial output and employment continued to expand at a substantial pace, and the unemployment rate declined from 7.3 to 7.0 per cent. Total retail sales remained at the advanced level reached in March. The wholesale price index for all commodities rose substan tially in April for the third consecutive month; increases again were particularly sharp among farm products and foods, and they remained sizable for industrial commodities. The average value of the dollar against leading foreign currencies has changed little on balance over the past month. The U .S . foreign trade deficit widened further in March; for the first quarter as a whole the deficit was twice as large as for the preceding quarter. The increase in Af-1, which had been moderate in the first quarter, was exceptionally large in April. Inflows of the time and savings deposits included in the broader aggregates were slower than earlier in the year, but because of the rapid expansion in M - 1, growth in M -2 and R ecord o f Policy Actions o f FOMC M-3 accelerated. Business short-term borrowing expanded sharply while corporate financing in the capital markets was reduced. Market interest rates have risen in recent weeks. In light of the foregoing developments, it is the policy of the Federal Open Market Committee to foster bank reserve and other financial conditions that will encourage continued economic expansion and help resist inflationary pressures, while contributing to a sustainable pat tern of international transactions. At its meeting on April 19, 1977, the Committee agreed that growth of M - l, M-2, and M-3 within ranges o f AVi to 6V2 per cent, 7 to 9 Vi per cent, and 8V2 to 11 per cent, respectively, from the first quarter of 1977 to the first quarter of 1978 appears to be consistent with these objectives. These ranges are subject to reconsideration at any time as conditions warrant. The Committee seeks to encourage near-term rates of growth in M -l and M-2 on a path believed to be reasonably consistent with the longer-run ranges for monetary aggregates cited in the preceding paragraph. Specifically, at present, it expects the annual growth rates over the May-June period to be within the ranges of 0 to 4 per cent for M -1 and 3Vi to 7 V2 per cent for M-2. In the judgment of the Committee such growth rates are likely to be associated with a weekly average Federal funds rate of about 53/s per cent. If, giving approximately equal weight to M -l and M-2, it appears that growth rates over the 2 -month period will deviate significantly from the midpoints of the indicated ranges, the operational objective for the Federal funds rate shall be modified in an orderly fashion within a range of 5Va to 53A per cent. If it appears during the period before the next meeting that the operating constraints specified above are proving to be significantly inconsistent, the Manager is promptly to notify the Chairman who will then decide whether the situation calls for supplementary instructions from the Committee. Votes for this action: Messrs. Burns, Volcker, Coldwell, Gardner, Guffey, Jackson, Lilly, Mayo, Morris, Partee, Roos, and Wallich. Votes against this action: None. Records of policy actions taken by the Federal Open Market Committee at each meeting, in the form in which they will appear in the Board’s Annual Report, are released about a month after the meeting and are subsequently published in the Bu lletin. 665 666 Law Department Statutes, regulations, interpretations, and decisions. COLLECTION OF CHECKS AND OTHER ITEMS AND TRANSFERS OF FUNDS The Board of Governors has amended its Regula tion J by establishing subpart B. That subpart sets forth the duties and liabilities of those parties transferring funds over the Federal Reserve Com munications Systems. Effective September 1, 1977. Regulation J is amended as set forth below: 1. The title of Part 210 is amended to read: S u b p a r t B— T r a n s f e r s o f F u n d s Section Section Section Section Section Section Section Section ‘ CO LLECTIO N OF C H EC K S A N D OTHER ITEMS A N D TRANSFERS OF F U N D S .” Section 2. The Table of Contents of Part 210 is amended to read as follows: Section Section Section S u b par t A — C o lle ct io n of C hecks a n d O th e r I tem s Section Section Section Section Section Section Section Section Section Section Section Section Section Section Section Section Section 210.1—Authority and scope 210.2— Definitions 210.3—General provisions 210.4— Sending of items to Federal Re serve Banks 210.5—Sender’s agreement 210.6— Status and warranties of Federal Reserve Bank 210.7—Presentment for payment 210.8—Presentment of noncash items for acceptance 210.9—Remittance and payment 210.10—Time schedule and availability of credits with respect to cash items 210.11—Availability of proceeds of non cash items 210.12—Return of cash items 210.13— Charge back of unpaid cash items and noncash items 210.14— Timeliness of action 210.15— Effect of direct presentment of certain warrants 210.16— Operating letters Section Section Section 210.50—Authority and scope 210.51—General provisions 210.52— Definitions 210.53—Approved media for issuance, transmission or recording of trans fer items 210.54— Requests for transfer items 210.55—Transferor’s agreement 210.56— Transferee’s agreement 210.57— Issuance of transfer items and request for transfer items 210.58— Handling of transfer items and requests for transfer items 210.59— Time limits 210.60— Advices of credit and debit 210.61— Handling of requests for revoca tion of transfer items and requests for return of funds 210.62— Final payment, right to withdraw or use funds 210.63—Timeliness of action 210.64— Liability of a Federal R eserve Bank 210.65— Operating circulars 3. Part 210 is amended by inserting immediately before § 210.1 a heading reading: “ SUBPART A— COLLECTION OF CHECKS AND OTHER ITEM S.” 4. Paragraph (a) of § 210.2 is amended, but without change in footnotes, to read as follows: (a) The term “ item ” means any instrument for the payment of money, whether negotiable or not, which is payable in a Federal Reserve district; is sent by a sender or a nonbank depositor to a Federal Reserve Bank for handling under this Part and is collectible in funds acceptable to the Federal Reserve Bank of the district in which the instru ment is payable; except that the term does not include any check that cannot be collected at par, nor does it include any item as defined in § 210.52(a) of this Part. L aw D ep a rtm en t 5. Part 210 is amended to change the words “ this Part” wherever they occur in §§ 210.1-210.16 to read “ this Subpart.” 6 . Part 210 is amended by adding after §210.16 the following: SUBPART B—TRANSFERS OF FUNDS S e c tio n 210.50— A u th o r ity a n d S cop e Pursuant to the provisions of paragraph 1 of section 13 of the Federal Reserve Act, as amended (12 U .S.C . § 342), paragraph (f) of section 19 of the Federal Reserve Act, as amended (12 U .S.C . § 464), paragraph 14 of section 16 of the Federal Reserve Act (12 U .S .C . § 248(o)), paragraphs (i) and (j) of section 11 of the Federal Reserve Act (12 U .S.C . § 248(i) and (j)), and other provisions of law, the Board of Governors of the Federal Reserve System has promulgated this Subpart governing the handling by Federal Reserve Banks of transfer items and requests for transfer items. S e c tio n 210.51— G e n e r a l P r o v is io n s (a) In order to afford a direct, expeditious, and economical system for the transfer of funds, each Federal Reserve Bank, in accordance with the terms set forth in this Subpart shall receive, process and act upon transfer items and requests for transfer items and, where appropriate, shall itself issue trans fer items. The provisions of this Subpart and the operating circulars of the Federal Reserve Banks shall be binding upon transferors and transferees. (b) Except as may be provided otherwise by any applicable statutes of the United States or regula tions issued or arrangements made thereunder, the provisions of this Subpart and of the operating circulars of the Federal Reserve Banks shall apply, as the case may be, to any department, agency, instrumentality, independent establishment or of fice of the United States, or any wholly-owned or controlled Government corporation, that maintains or uses an account with a Federal Reserve Bank, acting as transferor or transferee. S e c tio n 210.52— D e fin itio n s A s used in this Subpart, unless the context otherwise requires: (a) The term “ item ” means any instrument for the payment of m oney, issued, transmitted or re ceived in accordance with this Subpart. (b) The term “ transfer item ” means either ( 1) an 667 item issued by a transferor (other tha a Federal Reserve Bank) to a Federal Reserve Bank for debit to an account of the transferor at such Federal Reserve Bank and for credit to a transferee named in such item, or (2) an item issued by a Federal Reserve Bank to another Federal Reserve Bank for credit to such other Federal Reserve Bank or any other transferee; or (3) an item, issued by a Federal Reserve Bank at the request of a transferor for credit to a transferee. As used in this Subpart, the term “ transfer item ” includes only an item in a format provided for in operating circulars issued by Federal Reserve Banks under this Subpart. (c) The term “ instrument for the payment of m oney” means any writing contained in or on any medium approved by § 210.53 of this Subpart for the issuance, transmission or recording of transfer items, addressed by one person to another and evidencing a right to the payment of money. (d) The term “ transferor” means a member bank, a corporation that maintains an account with a Federal Reserve Bank in conformity with the requirements of § 211.7 of Part 211 of this Chapter (Regulation K), a Federal Reserve Bank, an inter national organization, foreign correspondent, or other institution maintaining or using an account with a Federal Reserve Bank, authorized by a Federal Reserve Bank to issue and send a transfer item to that Federal Reserve Bank, or to request that Federal Reserve Bank by telephone to issue a transfer item. (e) The term “ transferee” means a member bank, a corporation that maintains an account with a Federal Reserve Bank in conformity with the requirements of § 211.7 of Part 211 of this Chapter (Regulation K), a Federal Reserve Bank, an inter national organization, a foreign correspondent, or other institution maintaining or using an account on the books of a Federal Reserve Bank that is desig nated in a transfer item or request for a transfer item to receive the amount thereof. (f) The term “ beneficiary” means a person, firm or corporation (other than the transferee) desig nated in a transfer item or request for a transfer item to receive the amount thereof from the trans feree for the use of such person, firm or corpora tion. (g) The term “ international organization” means an international organization for which the Federal Reserve Banks are empowered to act as de positaries or fiscal agents subject to regulation by the Board of Governors of the Federal Reserve System and for which a Federal Reserve bank has opened and is maintaining an account. (h) The term “ foreign correspondent” means 668 Federal Reserve Bulletin □ July 1977 any of the following for which a Federal Reserve Bank has opened and is maintaining an account: a foreign bank or banker, a foreign state as defined in section 25(b) of the F ederal R eserve A ct, as amended (12 U .S.C . § 632), or a foreign corre spondent or agency referred to in section 14(e) of that Act, as amended (12 U .S.C . § 358). (i) The term “ tran sferor’s Federal R eserve Bank” means the office of a Federal Reserve Bank at which the transferor maintains or uses an ac count. (j) The term “ tran sferee’s Federal R eserve Bank” means the office of a Federal Reserve Bank at which the transferee maintains or uses an ac count. (k) The term ‘interoffice transaction” means a transaction involving a transfer item where the transferor and transferee do not maintain or use accounts at the same office of a Federal Reserve Bank. S e c tio n 210.53 — A pproved M e d ia S e c tio n 210.55— T r a n s f e r o r ’s A greem ent By its action in issuing and sending to the Federal Reserve Bank with which it maintains or uses an account any transfer item contained in any of the media specified in § 210.53 or requesting the is suance of a transfer item as provided in § 2 1 0 . 5 4 , a transferor shall be deemed: ( 1) to authorize that Federal Reserve Bank to debit the amount thereof to such account; (2) to authorize said Federal Reserve Bank to handle and act upon the transfer item or request for a transfer item, and the trans feree’s Federal Reserve Bank to handle and act upon a matching transfer item in the same amount and payable to the same transferee and beneficiary, if any, as designated by the transferor, in accor dance with the provisions of this subpart and the operating circulars of such Federal Reserve Banks; and (3) to agree that such provisions shall, insofar as they are made applicable thereto, govern the rela tionships between such transferor and such Federal Reserve Banks. fo r 210.56— T I s s u a n c e , T r a n s m is s io n o r R e c o r d in g o f S e c tio n T r a n s fe r Item s (a) By its action in maintaining or using an ac count at a Federal Reserve Bank, a transferee, other than a Federal Reserve Bank, designated in a transfer item to receive the amount thereof, shall be deemed to authorize that Federal Reserve Bank to credit the amount of such item to such account. (b) A transferee, other than a Federal Reserve Bank, receiving from a Federal Reserve Bank the amount of a transfer item designated for the use of a beneficiary, shall be deemed to agree ( 1) that it will prom ptly credit said b en eficia ry ’s account or otherwise make the amount of the transfer item available to the beneficiary for withdrawal or other use; and (2 ) that, if it is unable to do so because of circum stances beyond its control, it will give prompt notice of the facts to the Federal Reserve Bank from which it received such account. A transferor may issue and send a transfer item in any one of the following media that is specified in the operating circular of the Federal Reserve Bank with which the transferor maintains or uses an account: (a) a letter, memorandum or other similar writ ing; (b) a telegram (including TWX, TELEX and any similar form of communications); and (c) any form of communication, other than voice, that is registered upon, or is in form suitable for being registered upon, magnetic tape, disc or any other medium designed to capture and contain in durable form conventional signals used for the electronic communication of messages. S e c tio n 210.54— S e c tio n r a n s f e r e e ’s A g r e e m e n t 210.57 — I s s u a n c e o f T r a n sfe r R eq u e sts fo r T r a n s f e r Item s Item s a n d R e q u e s ts f o r T r a n s fe r Item s A transferor may, under special arrangement and in accordance with the provisions of § 210.57 and the operating circular of its Federal Reserve Bank, request that Federal Reserve Bank by telephone to issue a transfer item and transfer funds to a trans feree or to issue and send a transfer item to another Federal Reserve Bank for credit to such other Federal Reserve Bank or any other transferee. Such telephone messages may be recorded by the Federal Reserve Bank receiving such m essages. (a) Any transferor, other than a Federal Reserve Bank, may, in accordance with the provisions of this Subpart and the operating circulars of its Federal Reserve Bank, issue and send transfer items to that Federal Reserve Bank or request that Federal Re serve Bank to issue transfer items to transferees for their own use or the use of beneficiaries: P r o v id e d , That, at the end of a Federal Reserve Bank’s banking day, a transferor shall maintain or cause to be maintained a balance of actually and finally Law Departm ent collected funds sufficient to cover the amounts of transfer items debited to such account at the Fed eral Reserve Bank during the day and, if such balance is not sufficient to cover the amounts debited to such account during that day, that Fed eral Reserve Bank shall have a security interest in any or all assets of the transferor in the possession or held for the account of the Federal Reserve Bank: A n d fu rth e r p r o v id e d , That, if at any time during that Federal Reserve Bank’s banking day such transferor suspends payment or is closed and does not have a balance sufficient to cover the amounts so debited to such account, such Federal Reserve Bank shall have a security interest in any or all assets of such transferor then in the posses sion or held for the account of such Federal Reserve Bank. Notwithstanding the foregoing, a Federal Reserve Bank may, in its discretion, refuse to act upon a transfer item at any time when such Federal Reserve Bank has reason to believe that the balance maintained or used by such transferor is not sufficient to cover such item. (b) Any Federal Reserve Bank may, in accor dance with the provisions of this Subpart, issue and send transfer items to another Federal Reserve Bank, or request that Federal Reserve Bank by telephone to issue transfer items for its own use or the use of any other transferee or any beneficiary. (c) The Federal Reserve Banks may, from time to time, establish in their operating circulars the minimum or maximum dollar amounts, or both, that will be transferred, may impose reasonable charges for transfers of funds, and may impose specific format requirements for the receipt and handling of transfer items. S e c t i o n 210.58— H a n d l i n g o f T r a n s f e r Item s a n d R e q u e s ts f o r T r a n s fe r Ite m s (a) Where the transferor and the transferee main tain or use accounts at the same office of a Federal Reserve Bank, such office receiving a transfer item shall execute a transfer of funds, or receiving a request for a transfer item shall issue a transfer item and execute a transfer of funds, by making corre sponding debit and credit entries to those accounts. (b) In the case of an interoffice transaction, the transferor’s Federal Reserve Bank shall debit the account maintained or used by the transferor in the amount to be transferred and, acting as a transferor, shall issue to the transferee’s Federal Reserve Bank a matching transfer item in the same amount and payable to the same transferee and beneficiary, if any, as designated by the transferor, and the latter office shall execute a transfer of funds to the 669 transferee by making corresponding debit and credit entries, respectively, to the account of the transferor’s Federal Reserve Bank, and to the ac count maintained or used by the transferee. (c) When a Federal Reserve Bank obtains knowledge that, for whatever reason, it will be unable to effectuate transfers of funds on a timely basis, said Federal Reserve Bank shall, within a reasonable time thereafter, notify transferors of the delay. S e c tio n 210.59— T im e L im its (a) Each Federal Reserve Bank shall include in its operating circulars a schedule of the time limits showing, with respect to interdistrict, interoffice, and intraoffice transfers of funds, the hours on each business day during which it will receive and handle transfer items and requests for transfer items. (b) Each Federal Reserve Bank taking proper action on the day of receipt of a transfer item or request for a transfer item acts seasonably; taking proper action within a reasonably longer time may be seasonable but the Federal Reserve Bank has the burden of so establishing. In order for action to be taken on the day of receipt, such item or request must reach the Federal Reserve Bank not later than the time shown in its schedule of time limits. N o representation shall be made by a Federal Reserve Bank to the effect that transfers of funds will be consummated on the day requested. (c) In emergency or other unusual circum stances, a Federal Reserve Bank may, in its discretion, receive transfer items and requests for transfer items after the hours shown in its schedule of time limits. In the case of an interoffice transaction, the completion of each requested transfer shall be discretionary with the transferee’s Federal Reserve Bank. S e c t io n 210.60— A d v i c e s o f C r e d i t a n d D e b it (a) Advice of credit in respect of an executed transfer of funds shall be given to the transferee in any of the media specified in § 210.53 of this Subpart by the transferee’s Federal Reserve Bank. Such advice may be given for each transfer item or, if so provided in its operating circulars, for several transfer items. When the transferor or transferee has so requested and when such Federal Reserve Bank deems such action appropriate, or when in the judgment of such Federal Reserve Bank, the nature of the transaction or the amount involved justifies such an action, advice of credit shall be given to the transferee by telegraph, telephone, or any other 670 Federal Reserve Bulletin □ July 1977 means deemed appropriate by such Federal Re serve Bank. (b) After receiving a transfer item or request for a transfer item, the transferor’s Federal Reserve Bank shall send an advice of debit to the transferor in any of the media specified in § 210.53. Such advice may be given for each transfer item or, if so provided in its operating circulars, for several trans fer items. If, within 10 calendar days after the transferor receives an advice of debit, the trans feror fails to send to said Federal Reserve Bank written objection to such debit, the transferor shall be deemed to have approved such debit. S e c t i o n 210.61 — H a n d l i n g o f R e q u e s t s f o r R e v o c a tio n o f T r a n s fe r Item s a n d R e q u e sts f o r R e tu r n o f F u n d s (a) A Federal Reserve Bank, upon receipt from the transferor of a request for the revocation of an item, may cancel such item provided that the re quest for revocation is received at such time and in such manner as to afford 11?at F e rve Bank a reasonable opportunity to act. It Oie - not so cancelled, a Federal Reserve Bank may, in its sole discretion, upon request from the transferor (!) where the transferor and transferee maintain or use accounts at the same Federal Reserve Bank, send a request to the transferee to return the funds previ ously transferred or (2 ) in the case of an interoffice transaction, send a request to the transferee’s Fed eral Reserve Bank to request the transferee to return funds previously transferred. (b) In the case of an erroneous or otherwise irregular transfer of funds, a Federal Reserve Bank may, upon its own initiative or at the request of another Federal Reserve Bank, request the trans feree to return funds previously transferred. S e c tio n 210.62— F i n a l P a y m e n t, R ig h t to W it h d r a w o r U se F u n d s (a) A transfer item or request for a transfer item issued by a transferor is finally paid at the time the transfer item is sent, or advice of credit for such item is sent or telephoned, to the transferee by a Federal Reserve Bank, whichever occurs first. (b) Subject to the right of a Federal Reserve Bank to apply the transferred funds to an obligation owed to the Federal Reserve Bank by the trans feree, credit given by a Federal Reserve Bank for a transfer of funds to the transferee’s account be comes available for withdrawal as of right by the transferee upon final payment of the transfer item or request for a transfer item. S e c tio n 210.63— T i m e l i n e s s o f A c tio n If, because of circumstances beyond its control, a Federal Reserve Bank shall be delayed beyond applicable time limits provided in this Subpart or in the operating circulars of the Federal Reserve Bank or by law in taking any action with respect to a transfer item or a request for a transfer item, the time within which such action shall be completed shall be extended for such time after the cause of the delay ceases to operate as shall be necessary to take or complete the action, provided the Bank exercises such diligence as the circumstances re quire. S e c t i o n 210.64— L ia b il it y o f a F e d e r a l R e s e r v e B a n k (a) A Federal Reserve Bank, in connection with the matters specified in this Subpart or its operating circulars, shall not have, nor shall it assume, any responsibility to a transferee, a beneficiary, or any other party, except its immediate transferor, nor shall a Federal Reserve Bank have or assume any liability except for its own or another Federal Reserve Bank’s lack of good faith or failure to t ~dse ordinary care, and, except as herein pro vided federal Reserve Bank shall not be liable for the in ‘ ncy, neglect, misconduct, mistake, or def; !t *r >ther bank or person, including a transferor. (b) Subject to the lim itations on liability stated above, where a Federal Reserve Bank s conduct, notwithstanding its exercise of good faith and ordi nary care, results in a failure to credit the amount of a transfer item or request for a transfer item to the account maintained or used by a transferee on the day requested, the Federal Reserve Bank, unless otherwise instructed shall complete the transfer on the next business day with debits and credits posted to the appropriate accounts as of the day the transfer was to have been consummated. (c) Subject to the limitations on liability stated above, if the failure to credit the amount of the transfer item or request for a transfer item to the account maintained or used by the transferee re sulted from a failure on the part of any Federal Reserve Bank to exercise ordinary care or to act in good faith, the transferor shall have the right to recover from its Federal Reserve Bank any dam ages proximately caused by such failure: P ro v id e d , h ow ever, That whether any consequential damages are proximately caused by the Federal Reserve Bank’s failure to exercise ordinary care or lack of good faith is a question of fact to be determined in each case. Law Departm ent (d) The transferee’s Federal Reserve Bank shall be deemed to agree to indemnify the transferor’s Federal Reserve Bank for any loss or expense sustained (including but not limited to attorneys’ fees and expenses of litigation) as a result of the failure of the transferee’s Federal Reserve Bank to exercise ordinary care or to act in good faith with respect to a transfer item issued to it by the transferor’s Federal Reserve Bank at the request of transferor. S e c t io n 2 1 0 .6 5 — O p e r a t i n g C ir c u l a r s Each Federal Reserve Bank shall issue operating circulars (sometimes referred to as operating letters or bulletins), not inconsistent with this Subpart, governing the details of its funds transfer operations and containing such provisions as are required or permitted by this Subpart and such additional terms and conditions as each Federal Reserve Bank may impose. % RULES REGARDING DELEGATION OF AUTHORITY The Board of Governors has amended its Rules Regarding Delegation of Authority to expand the 671 scope of authority previously delegated regarding acquisitions of shares of a bank. Effective June 10, 1977, Part 265 is amended by renumbering subsections (33), (34), and (35) as (34), (35), and (36), respectively, and adding a new sub section (33) to read as follows: S e c t io n 2 6 5 .2 — S p e c if ic F u n c t io n s D e l e g a t e d to B o a r d E m plo y e es a n d to F ed eral R eserve B a n k s * * * * * (f) Each Federal Reserve Bank is authorized, as to member banks or other indicated organizations headquartered in its district or under subparagraph (f)(34) as to its own facilities: (33) Under the provisions of § 3(a)(3) of the Bank Holding Company Act (12 U .S.C . § 1842(a)(3)), to approve the acquisition by any bank holding company of additional voting shares of a bank in which such bank h o l d i n g company owns 25 per cent or more of any class of voting securities, if the proposal generally is in conformity with the conditions specified in section 265.2(f) (24) of this part. (12 U .S.C . 248(k) and 12 U .S.C . 1844(b)). BANK HOLDING COMPANY AND BANK MERGER ORDERS ISSUED BY THE BOARD OF GOVERNORS O r d e r s U n d e r S e c t io n 3 B a n k H o l d in g C o m p a n y A ct of Banco de Bogota and Banbogota, Inc., Bogota, Colombia O rder A pprovin g F orm ation o f B ank H oldin g C om pan ies Banco de Bogota, Bogota, Colombia, and its proposed w holly-ow ned subsidiary. Banbogota, Inc., N ew York, N ew York (“ Banbogota” ), have 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 bank holding companies through acquisition of 1 0 0 per cent of the voting shares (less directors’ qualifying shares) of Banco de Bogota Trust Company, N ew York, N ew York (‘Trust Company” ). Banbogota was organized solely for the purpose of acquiring and holding shares of Trust Company and has engaged in no business activities and has no subsidiaries. Accord ingly, the applications of Banco de Bogota and Banbogota have been considered together and this Order contains the Board’s findings and conclu sions with respect to both such applications. Notice of the applications, affording opportunity for interested persons to submit comments and views, has been given in accordance with § 3(b) of the Act. The time for filing comments and views has expired, and the Board has considered the applica tions and all comments received in light of the factors set forth in § 3(c) of the Act (12 U .S.C . § 1842(c)). Banco de Bogota (deposits of approximately $464 million), a Colombian commercial bank, is the largest of twenty-three private commercial banks in Colombia. Banco de Bogota operates 254 branches in Colombia and has subsidiary banks in Ecuador and Panama, in addition to being a major shareholder in several financial and nonfinancial institutions in South America. N one of these institutions con ducts any business in the United States. Banco de 672 Federal Reserve Bulletin □ July 1977 Bogota presently operates a branch in N ew York City with total deposits of approximately $22 mil lion . 1 A recently enacted Colombian law requires that all banks operating in Colombia be Colombian corporations and be at least 51 per cent owned by Colombian nationals. As a result of that law, United States banks are precluded from establishing branches in Colombia. N ew York State banking law provides that a foreign banking corporation or ganized under the laws of a foreign country may be licensed to maintain a branch or branches in New York if, under the laws of the foreign country, a New York bank or trust company may be au thorized either to maintain a branch or agency or to own all of the shares of a banking organization organized under the laws of the foreign country . 2 Banco de Bogota has been informed by the New York Banking Department that, as a result of the recently enacted Colombian law prohibiting branches of foreign banks and foreign control of local banks, Banco de Bogota will have to close its New York branch. It is, however, permissible under N ew York law for Banco de Bogota to main tain an agency in N ew York and to acquire a sepa rately chartered subsidiary bank. Upon consumma tion of the proposed transaction, Banco de Bogota would operate both an agency and a subsidiary bank in the State. Trust Company would acquire all of the demand deposits of Banco de Bogota’s N ew York branch and would rank 108th out of 121 banking organiza tions in the relevant banking market. 3 As indicated above, the proposed transaction represents a reor ganization of Banco de Bogota’s N ew York banking operations from a branch to a subsidiary bank and an agency. Accordingly, it does not appear that consummation of the proposed transaction would result in the elimination of any existing or potential competition in the relevant market. Competitive considerations, therefore, are consistent with ap proval of the applications. The financial and managerial resources of Banco de Bogota, Banbogota and Trust Company are considered satisfactory and the future prospects for each appear favorable. Banco de Bogota has com mitted that it will make available to Trust Company 1 All banking data are as of December 31,1976. 2 N.Y. Bank Law § 202-a (McKinney 1971). 3 The relevant geographic market is defined to include the five boroughs of New York City, Nassau County, Westchester Coun ty, Putnam County, Rockland County, and western Suffolk County in New York, as well as the northern two-thirds of Bergen County and eastern Hudson County in New Jersey, plus south western Fairfield County in Connecticut. up to $15 million in additional equity capital during the first three years of Trust Company’s operations. Thus, the banking factors are consistent with ap proval of the applications. Trust Company would conduct a wholesale commercial banking business that would promote trade between the United States and South America. The considerations re lating to the convenience and needs of the commu nity to be served are consistent with approval of the applications. It is the Board’s judgment that the proposed transaction would be consistent with the public interest and that the applications should be approved. On the basis of the record, the applications are approved for the reasons summarized above. The transaction shall not be made (a) before the thirtieth calendar day following the effective date of this Order or (b) later than three months after the date, and (c) Trust Company 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 N ew York pursuant to delegated authority. By order of the Board of Governors, effective June 22, 1977. Voting for this action: Vice Chairman Gardner and Governors Wallich, Coldwell, Jackson, Partee, and Lilly. Absent and not voting: Chairman Burns. (Signed) R u t h A. R e i s t e r , [s e a l] A ssista n t S e creta ry o f the B oard. D. H. Baldwin Company, Cincinnati, Ohio O rder D enying A cq u isitio n o f B ank D. H. Baldwin Company, Cincinnati, Ohio, a bank holding company within the meaning of the Bank Holding Company Act, has applied for the Board’s approval under § 3(a)(3) of the Act (12 U .S .C . 1842(a)(3)) to directly acquire all of the voting shares of Rifle Bank Agency, Inc., Rifle, Colorado (“ A gency” ), and to indirectly ac quire 89.6 per cent or more of A gency’s sole banking subsidiary, The First National Bank in Rifle, Rifle, Colorado (“ Bank ” ) . 1 1Agency, which became a bank holding company with respect to Bank as a result of the 1970 Amendments to the Bank Holding Company Act of 1956, currently engages in a general insurance business on Bank’s premises. Upon acquisition by Applicant, Agency would cease all activities except holding shares of Bank. Law Departm ent 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 applica tion and all comments received, including the denial recommendation of the United States Department of Justice, in light of the factors set forth in § 3(c) of the Act (12 U .S.C . 1842 (c)). Applicant, the fourth largest commercial banking organization in Colorado, controls 12 banks with aggregate deposits fo $651.4 million, representing approximately 7.9 per cent of the total deposits held by commercial banks in that State . 2 Acquisition of Bank (deposits of $12.9 million) would increase Applicant’s share of Statewide deposits by approx imately 0.1 per cent. Although consummation of this proposal would not result in a significant in crease in the concentration of banking resources in Colorado, it would have significant adverse effects upon both concentration and existing competition within the relevant banking market. Bank, the only bank in Rifle and the largest of two independent banks in Garfield County (the relevant banking market), is the third largest of four banks operating in the market and controls approx imately 17.0 per cent of market deposits. Appli cant’s sole banking subsidiary in the market is the largest bank therein and controls approximately 57.4 per cent of market deposits. Therefore, con summation of this proposal would further entrench Applicant as the market’s largest banking organi zation and would significantly increase Applicant’s share of market deposits to approximately 74.4 per cent. Furthermore, the two-bank concentration ratio in the market would becom e 94.1 per cent, a significant increase in the concentration of banking resources in the market. In addition to the significant adverse effects upon market concentration noted above, it appears that the proposal also would have substantially adverse effects upon existing competition within the Gar field County market. Applicant already operates in the relevant market and the record indicates that substantial competition between Applicant and Bank would be eliminated by this proposal. Fur thermore, consummation of this proposal would reduce the number of banking alternatives operat ing in the market from four to three. Moreover, approval of the proposed transaction would remove Bank as a viable entry vehicle for a Colorado bank 2A11 banking data are as of December 31, 1976, unless otherwise indicated, and reflect bank holding company formations and acquisitions approved as of May 31, 1977. 673 holding company not currently represented in the market. This factor is even more significant when considered in the light of the fact that the market is not particularly attractive for de n ovo entry by banking organizations seeking to gain access to the Garfield County market. On the basis o f the facts o f record, including the views of the Department of Justice and Applicant’s response thereto, the Board concludes that approval of the application would have substantially adverse effects upon existing competition. On the basis of the foregoing and other facts of record, the Board concludes that the competitive considerations relating to this application weigh sufficiently against approval so that it should not be approved unless the anticompetitive effects are clearly outweighed by benefits to the public in meeting the convenience and needs of the com munities to be served. The financial and managerial resources and fu ture prospects of Applicant, its subsidiary banks, Agency, and Bank are regarded as generally satis factory; however, these banking factors lend only slight weight for approval of the application. Acqui sition of Bank by Applicant would enable Bank to improve its physical plant and its internal opera tions, while also providing trust, leasing, and real estate loan packaging services to Bank’s customers. It appears, however, that the current convenience and needs of the community are already being served by Bank and that Applicant only offers the community marginal benefits for which there is no demonstrable need at this time. Therefore, con siderations relating to convenience and needs lend only slight weight for approval of the application. The Board concludes that neither the con siderations relating to banking factors nor those relating to convenience and needs are sufficient to outweigh the substantially adverse competitive ef fects of Applicant’s proposal. On the basis of the facts in the record, and in light of the factors set forth in § 3(c) of the Act, it is the Board’s judgment that approval of the proposal would not be in the public interest. Therefore, the application is denied for the reasons summarized above. By order of the Board of Governors, effective June 15, 1977. Voting for this action: Vice Chairman Gardner and Governors Coldwell, Jackson, Partee, and Lilly. Absent and not voting: Chairman Burns and Governor Wallich. (Signed) [s e a l] G r iffith L. G arw ood, Deputy Secretary of the Board. 674 Federal Reserve Bulletin □ July 1977 First City Bancorporation of Texas, Inc., Houston, Texas O rder A pprovin g A cq u isitio n o f B ank First City Bancorporation of Texas, Inc., Hous ton, Texas, a bank holding company within the meaning of the Bank Holding Company Act, has applied for the Board’s approval under § 3(a)(3) of the Act (12 U .S.C . § 1842(a)(3)) to acquire 100 per cent, less director’s qualifying shares, of the voting shares of City National Bank of Austin, Austin, Texas (“ Bank” ). Notice of the application, affording opportunity for interested persons to submit comments and views, has been given in accordance with § 3(b) of the Act. The time for filing comments and views has expired, and the Board has considered the applica tion and all comments received in light of the factors set forth in § 3(c) of the Act (12 U .S.C . § 1842(c)). Applicant, the second largest banking organiza tion in Texas as of December 31, 1976, controls 27 banks with aggregate deposits of approximately $3.4 billion, representing 7.1 per cent of the total deposits in commercial banks in the State . 1 Acqui sition of Bank, which holds deposits of $289 mil lion, would increase Applicant’s share of total deposits in commercial banks in the State by 0.6 per cent causing it to becom e the largest banking or ganization in the State. Bank, the third largest of 20 banks in the relevant market, 2 controls total deposits of $289 million, representing 16.3 per cent of total deposits in com mercial banking institutions in the market. Appli cant is not currently represented in the Austin banking market. There is virtually no existing com petition between Applicant’s banking subsidiaries and Bank. Applicant’s nearest bank subsidiary is located 118 miles southeast of Austin and Appli cant’s lead bank is located in Houston, 162 miles southeast of Austin. Thus, in view of the local nature of banking markets, consummation of Ap plicant’s proposal would not have any significant adverse effects on existing competition within the relevant market. The Board has expressed the opinion that, in view of the exceptionally rapid population and economic growth in the Austin area in recent years, it appears that the market is attractive for entry by U n less otherwise indicated, all banking data are as of Septem ber 30, 1976. 2The relevant geographic market is approximated by the Austin SMSA, which is comprised of Hays and Travis Counties. banking organizations . 3 The Board has also noted that a number of the State’s largest banking organi zations are not currently represented in that mar ket. Approval of this application will not foreclose the possibility of other competitors entering the market either de novo (as four groups have done in the last 17 months) or through acquisition of one of the many independent banks in the market, and thus Applicant’s acquisition of Bank should not significantly reduce the likelihood that the market will become less concentrated in the future . 4 While consummation of this proposal would elim inate the possibility of Applicant entering the A us tin market d e n ovo or through acquisition of one of the numerous smaller independent banks, the Board is of the view that Applicant’s entry into the Austin market should not be restricted to establish ing a bank de n ovo or acquiring a foothold entry. Thus, the Board is presently unable to conclude that consummation of the proposed transaction would have such adverse effects upon the concen tration of banking resources or upon potential com petition within the Austin banking market as to justify denial of the subject application. On the other hand, approval of this application may have a positive effect on competition in the market by introducing a new and aggressive competitor into the Austin banking market. The financial and managerial resources of Appli cant, its subsidiaries and Bank are considered gen erally satisfactory and the future prospects of all appear favorable. Thus, the Board is of the view that the banking factors involved in the proposal are consistent with approval. Information contained in the record indicates that banks within the Austin market are not presently fully meeting all of the banking needs of the area, es pecially the needs of large national and international corporations located in the Austin vicinity. Applicant proposes to provide Bank with its specialized exper tise in international banking, trust operations, data processing, and commercial and investment serv ices. Applicant also plans to expand Bank’s credit 3See Board’s Order of April 13, 1977, approving the application of Texas Commerce Bancshares, Inc., Houston, Texas, to merge with The BanCapital Financial Corporation, Austin, Texas, 42 Federal R egister 20500 (1977); 63 F ederal R eserve B u l l e t i n 500 (1977). 4It appears that the Austin market is undergoing deconcentra tion. The aggregate market shares of the three largest banking organizations in the market declined from 70.2 per cent, as of year-end 1970 to 65.0 per cent at the year-end 1975. The opening of four new banks in the market within the last 17 months also reflects the market’s trend toward deconcentration, but has not really lessened the market’s attractiveness for additional de novo entry. Law Departm ent capability to better service the credit needs of the community. Further, Applicant, through its insur ance subsidiary, would offer credit life and credit accident and health insurance in connection with extensions of credit by Bank at rates identical to those approved by the Board for Applicant’s other subsidiaries. These rates represent significant re ductions from the maximum rates now being charged by Bank. Accordingly, considerations re lating to the convenience and needs of the com munities to be served lend some weight toward approval of the application. In view of the forego ing, it is the Board’s judgment that Applicant’s acquisition of Bank would be in the public interest. On the basis of the record, the application is approved for the reasons summarized above. The transaction shall not be made (a) before the thirtieth calendar day following the effective date of this Order or (b) later than three months after the effec tive date of this Order, unless such period is ex tended for good cause by the Board, or by the Fed eral Reserve Bank of Dallas pursuant to delegated authority. By order of the Board of Governors, effective June 17, 1977. Voting for this action: Chairman Burns and Governors Gardner, Coldwell, Jackson, Partee, and Lilly. Voting against this action: Governor Wallich. (Signed) [s e a l] G riffith L. G a rw o o d , D ep u ty S ec reta ry o f the B oard. 675 market given the attractiveness of the Austin mar ket for de novo entry, the capability of Applicant to enter the market, and the expansion pattern dem onstrated by the Applicant. (Applicant has ex panded into seven of the State’s twenty-five SMS A or RMA markets.) Therefore, so long as Applicant remains poised in the “ wings” of the Austin mar ket, this potential competition exerts a beneficial effect on the Austin market. If and when this “ wings” effect is eliminated by actual entry of the Applicant into the Austin market, it should be by a route that offsets elimination of this effect by deconcentrating that market, through d e n ovo entry or by means of a “ foothold acquisition.” Prospects for deconcentration at a subsequent time, the probable future competition effect, are also reduced by this acquisition. With the consum mation of this acquisition, four of the five largest Texas organizations will already be represented in the market, with two of these owning two of the three largest banks in Austin, while the third owns the seventh largest Austin bank and the fifth largest organization owns the fourth largest Austin bank. The only one of these top five Texas holding companies that is not already in the market has expressed an interest in entering the Austin market. The chances of the Austin banking market becom ing less concentrated and more competitive in the future through de n ovo or foothold entry by the State’s major organizations have been significantly reduced by the approval of this and the previous applications. In my opinion, this application represents merely the first of many that the Board will be receiving I would deny the application of First City Ban- based upon the majority’s views enunciated in the Texas Commerce case. I interpret those views as corporation of Texas, Inc., to acquire City National indicating that de n ovo or foothold entry into attrac Bank of Austin, Austin, Texas. I cannot agree with tive markets will no longer be required of those the majority’s view that the proposed acquisition organizations most capable of entering new markets may have a positive effect on competition in the Austin banking market. My reasons are those that in that manner. While not rigidly adhering to the “ Tyler Doctrine” (which prevented any of the four were prescribed in my Dissenting Statement in the first-tier holding companies from acquiring the recent Texas Commerce decision . 1 My dissent in this case rests again on the adverse largest banks in any of the secondary markets), I effects of this acquisition on potential competition. am aware that this view would have prevented a result such as this where the largest banks in a The Austin market is highly concentrated. City National Bank of Austin is one of the largest banks secondary market are all acquired by the largest holding companies. A repetition of this pattern in in the market. I regard First City Bancorporation as other attractive secondary markets in Texas must one of the most likely potential entrants into the be expected. Such a pattern would increase the size disparity between the largest Texas banking organi zations and the rest of the State’s organizations, ^ e e The Dissenting Statement of Governor Wallich accom panying the Board Order approving the application of Texas thus leading to an increase in concentration ratios Commerce Bancshares, Inc., Houston, Texas to merge with The and a decrease in the number of effective com Bancapital Financial Corporation, Austin, Texas (63 Federal petitors and competition within the State. Key Reserve B u l l e t i n 500 (1977)). D issen tin g S ta te m e n t o f G o vern o r Wallich 676 Federal Reserve Bulletin □ July 1977 banks in attractive secondary markets might well be acquired by the largest organizations rather than be acquired by second-tier holding companies or form the nucleus of regional bank holding companies. Elimination of these large banks by acquisition by the State’s largest holding companies significantly reduces the number of firms most capable of grow ing into more effective competitors in the future. In addition, I believe that the convenience and needs considerations relied upon by the majority are insufficient to outweigh the significant adverse effects upon potential competition found in this acquisition. The Supreme Court has consistently held that benefits accruing to only a portion of the relevant market are insufficient to outweigh ad verse competitive effects in the entire market under the balancing test of the Bank Holding Company Act. Moreover, special service to large national and international firm s through the larger credit resources of acquired (or merged) banks was spe cifically rejected as a counter-balancing conve nience and needs argument to a local anticompeti tive effect in the P h illipsbu rg, Third N a tio n a l , and P hiladelphia N a tio n a l B an k cases. Banking markets are local markets and anticompetitive effects in those markets cannot be outweighed by some spe cialized service to a narrow segment of that market or by procompetitive effects in a different market. This application, and those that may follow, represent the fruit growing from the Board’s Texas Commerce decision. That decision, I believe, must be viewed as having an anticompetitive impact on Texas banking market structure, both within local markets such as Austin and throughout the entire State. For the foregoing reasons, I would deny this application. FrostBank Corporation, San Antonio, Texas O rder A pprovin g M erg er o f B ank H olding C om pan ies FrostBank Corporation, San Antonio, Texas, a registered bank holding company within the mean ing of the Bank Holding Company Act, has applied for the Board’s approval under § 3(a)(5) of the Act (12 U .S.C . § 1842(a)(5)) to merge with Cullen Bankers, Inc. (“ Cullen” ), a registered bank holding company under the charter and title of Applicant. N otice 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 applica tion and all comments received in light of the factors set forth in § 3(c) of the Act (12 U .S.C . § 1842(c)). Applicant, the tenth largest banking organization in the State of T exas , 1 presently controls five banks with aggregate deposits of $742.5 million, represent ing 1.5 per cent of the total deposits in commercial banks in the State. Cullen, the eighteenth largest banking organization in the State, presently con trols two banks with aggregate deposits of $279.4 million, representing 0 . 6 per cent of total deposits in commercial banks in the State. Upon consumma tion of the proposed transaction, Applicant would rank as the State’s eighth largest banking organiza tion and control 2 . 1 per cent of the total deposits in commercial banks in the State. In light of the present structure of banking in Texas, the Board is of the view that approval of this application would not have significantly adverse effects upon the concentration of banking resources in the State . 2 With respect to the effects of the proposal on existing competition, Applicant and Cullen do not compete directly in any banking market within the State. Applicant is the largest commercial banking organization in the San Antonio banking market3 with four of its subsidiaries controlling total de posits of $649 million or 23.8 per cent of total deposits in commercial banks in that market. 4 Ap plicant’s fifth banking subsidiary is located in the Corpus Christi banking market, 5 wherein it is the fourth largest banking organization and controls deposits of $38.4 million or 4.4 per cent of total deposits in commercial banks in the market. 6 On the other hand, Cullen’s lead bank, Cullen Center Bank & Trust, is located in the Houston banking market, approximated by the Houston RMA, wherein Cullen ranks as the ninth largest banking organization and holds $195 million in deposits of 1.9 per cent of total deposits in commercial banks in the market. Cullen’s second subsidiary bank, Citi zens National Bank of Dallas, is in the Dallas banking market, which is approximated by the XA11 banking data are as of June 30, 1976, unless otherwise specified and reflect bank holding company formations and acqui sitions approved through January 31, 1977. 2In particular, the Board notes that Applicant would rank a distant eighth behind four banking organizations with deposits in excess of $3 billion and three banking organizations with deposits substantially in excess of $1 billion. 3The San Antonio banking market is approximated by the San Antonio SMSA which is comprised of Bexar, Comal, and Guada lupe Counties. 4As of December 31, 1975. 5The Corpus Christi market is approximated by the Corpus Christi SMSA comprised of Nueces and San Patricio Counties. sSupra n.4. Law Departm ent Dallas RMA. Cullen is the ninth largest commercial banking organization in the Dallas market and holds $84 million in deposits or 1.1 per cent of the total deposits in commercial banks in the market. Inas much as the distance separating the closest of Applicant’s and Cullen’s subsidiary banks is about 197 miles and Applicant and Cullen do not compete in any relevant market, the Board concludes that consummation of the proposed merger would not have any adverse effect upon existing competition. Although consummation of the proposed merger would foreclose the possibility that either Applicant or Cullen would enter the banking market of the other, the Board believes there is little likelihood of significant competition developing between the two banking organizations in the absence of the subject proposal. It does not appear from the facts of record that Cullen is a likely entrant into any of the markets now served by Applicant. Although Appli cant does possess the necessary resources for entry into the Houston or Dallas market, this factor alone does not provide sufficient grounds for denial in view of the fact that Cullen does not occupy a significant position in either market. Accordingly, based on the foregoing and other facts of record, the Board concludes that consum mation of the subject proposal will not have any significant adverse effects upon either existing or potential competition. The financial and managerial resources of Appli cant, Cullen, and their respective subsidiaries are considered generally satisfactory and the future prospects for the resulting organization are satisfac tory. In particular, it appears that the resulting organization will possess greater managerial depth and financial resources than either of the organiza tions independently. Thus, the banking factors are consistent with approval of the application. There is no evidence indicating that the banking needs of the residents of the relevant markets are not presently being met by the existing institutions. However, as a result of this proposal, Applicant will be able to provide the subsidiaries of Cullen with increased expertise in the provision of trust and international banking services and Applicant will also provide Cullen banks and their customers with increased data processing services. Further, the larger combined legal lending limit for the resulting organization’s subsidiary banks would en able the subsidiary banks to meet the needs of larger borrowers. These considerations relating to convenience and needs are regarded as lending some weight toward approval of the application. Therefore, it is the Board’s judgment that consum mation of this transaction would be in the public 677 interest and that the application should be ap proved. On the basis of the record, the application is approved for the reasons summarized above. The transaction shall not be made (a) before the thirtieth calendar day following the effective date of this Order or (b) later than three months after the effec tive date of this Order, unless such period is ex tended for good cause by the Board, or by the Federal Reserve Bank of Dallas pursuant to dele gated authority. By order of the Board of Governors, effective June 6 , 1977. Voting for this action: Chairman Burns and Governors Gardner, Wallich, Coldwell, Jackson, Partee, and Lilly. (Signed) R u t h A. R e i s t e r , [s e a l ] A ssista n t S e c re ta ry o f the B oard. Granite Holding Corp., Granite Falls, Minnesota O rder D enying F orm ation o f B ank H oldin g C om pan y Granite Holding Corp., Granite Falls, Minnesota, has applied for the Board’s approval under section 3(a)(1) of the Bank Holding Company Act (12 U .S.C . § 1842(a)(1)) of formation of a bank holding company through acquisition of 1 0 0 per cent (less directors’ qualifying shares) of the voting shares of Granite Falls Bank, Granite Falls, Minnesota (“ Bank” ). Notice of the application, affording opportunity for interested persons to submit comments and views, has been given in accordance with section 3(b) of the Act. The time for filing comments and views has expired, and the application and all comments received have been considered in light of the factors set forth in section 3(c) of the Act (12 U .S.C . § 1842 (c)). Applicant is a recently chartered, nonoperating corporation, organized for the purpose of becoming a bank holding company by acquiring Bank, which holds deposits of $12.4 million . 1 Upon acquisition of Bank, Applicant would control the 169th largest commercial banking organization in the State of Minnesota and would control approximately 0.08 per cent of total deposits in commercial banks in that State. XA11 banking data are as of June 30, 1976. 678 Federal Reserve Bulletin □ July 1977 Bank, located in Granite Falls, Minnesota, is the fifth largest of 11 commercial banks in the relevant banking market and holds approximately 9.4 per cent of the total commercial bank deposits in the market. 2 Since Applicant has no subsidiaries and Applicant’s principals do not control any other banks, it appears unlikely that consummation of the proposal would have any adverse effect upon exist ing or potential competition or increase the concen tration of banking resources in any relevant area. Thus, the Board concludes that the competitive effects of the proposal are consistent with approval of the application. As part of this proposal, Applicant would assume approximately $325,000 in debt incurred by Bank’s principal shareholder in acquiring Bank’s shares. Applicant proposes to service this debt over a ten-year period exclusively with distributed earn ings of Bank. However, Bank’s historical earnings and the operating results of other banks located in the same geographic area suggest that Bank’s earn ings over the ten-year debt retirement period will not be of the magnitude projected by Applicant in planning for the servicing of its acquisition debt. In the Board’s view Bank would not provide Appli cant with necessary financial resources to meet Applicant’s annual debt servicing requirements as well as any unexpected problems that might arise at Bank. Furthermore, under the instant proposal, it does not appear that Bank would maintain an adequate level of capital throughout the debt re tirement period . 3 Accordingly, the Board concludes that Bank’s financial resources and future pros pects, upon which Applicant is dependent, weigh against approval of the application. No significant changes in Bank’s operations or in the services offered to customers of Bank are anticipated to follow from consummation of the proposed acquisition. Consequently, convenience and needs factors lend no weight toward approval. On the basis of the entire record before it, the Board concludes that the banking considerations involved in this proposal present adverse factors bearing upon the financial and managerial resources and future prospects of both Applicant and Bank. Such adverse factors are not outweighed by any procompetitive effects or convenience and needs 2The relevant banking market is approximated by southern Chippewa, eastern Lac Qui Parle, northeastern Yellow Medicine, and northwestern Renville Counties. 3Bank recently issued $300,000 of subordinated capital deben tures, scheduled to be retired in ten years. Since Applicant must rely on Bank’s dividends to service the acquisition debt, Bank will be unable to retain sufficient earnings to build an adequate and permanent capital base. factors. Accordingly, it is the Board’s judgment that approval of the application to become a bank holding company would not be in the public interest and that the application should be denied. On the basis of the facts of record, the application is denied for the reasons summarized above. By order of the Board of Governors, effective June 2, 1977. Voting for this action: Chairman Burns and Governors Gardner, Wallich, Coldwell, Jackson, Partee, and Lilly. (Signed) G r i f f i t h L. G a r w o o d , [s e a l ] D e p u ty S e creta ry o f the B oard. First National Charter Corporation, Kansas City, Missouri O rder A p p ro vin g A cq u isitio n o f B ank First National Charter Corporation, Kansas City, Missouri (“ Applicant” ), 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 ac quire 80 per cent or more of the voting shares of The Farmers Trust Company of L ee’s Summit, L ee’s Summit, Missouri (“ Bank” ). N otice 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 applica tion and all comments received in light of the factors set forth in § 3(c) of the Act (12 U .S.C . § 1842(c)). Applicant, the fourth largest banking organiza tion in Missouri, controls 18 banks with total de posits of $919.2 million, representing 5.4 per cent of the total deposits in commercial banks in the State . 1 Acquisition of Bank (deposits of $18.7 million) would increase Applicant’s share of commer cial bank deposits in Missouri by . 1 of one per cent and would have no appreciable effect upon concen tration of banking resources in Missouri. Bank, the 59th largest of 134 commercial banks in the relevant market2 holds approximately .4 per cent of the total commercial bank deposits in the market. Applicant has five banking subsidiaries in the Kansas City market and is the second largest banking data are as of June 30, 1976. 2The Kansas City banking market is made up of the northern half of Cass County, all of Clay, Jackson and Platte Counties in Missouri and Johnson and Wyandotte Counties in Kansas. Law Departm ent banking organization in the market, controlling 11.5 per cent of market deposits. Upon consummation of the proposed acquisition, Applicant’s share of commercial bank deposits in the market would increase to 11.9 per cent and Applicant would become the market’s largest banking organization. Inasmuch as Applicant and Bank are located in the relevant market, the proposed acquisition would eliminate some existing competition and increase the concentration of banking resources in that mar ket. However, the Board does not view such effects as being particularly serious in light of the competi tive banking structure in the Kansas City market. Eight of the twenty largest banking organizations in Missouri are also represented in the market and are among the ten largest banking organizations in the market. In addition, even with the addition of Bank, Applicant’s share of market deposits would be only slightly greater than the shares held by the second and third largest banking organizations in the mar ket. While consummation of the proposal would reduce the number of independent banking organi zations in the Kansas City market, this does not appear to be significant since ninety-seven inde pendent commercial banks or one-bank holding companies would remain competing in the market. In light of the above and other facts of record, the Board concludes that the proposed acquisition would have only slightly adverse effects on compe tition and, in light of the considerations discussed below, the Board does not view such effects as being so serious as to require denial of this pro posal. The financial and managerial resources and fu ture prospects of Applicant and its subsidiaries are regarded as generally satisfactory and consistent with approval of the proposal. Applicant has com mitted itself to take steps to improve Bank’s capital and intends to strengthen Bank’s management, particularly in the areas of loans and investments. Thus, the Board concludes that the financial and managerial resources and future prospects of Bank are consistent with, and lend some weight*toward, approval of the application. It appears that the proposed affiliation of Bank with Applicant is likely to result in an expansion of the services presently offered by Bank, including Bank’s trust services and its lending operations. Thus, considerations relating to the convenience and needs of the com munity to be served lend weight toward approval of the application and, in the Board’s view, are suffi cient to outweigh any slight adverse competitive effects that might result from consummation of the proposal. It is the Board’s judgment that the appli cation should be approved. 679 On the basis of the record, the application is approved for the reasons summarized above. The transaction shall not be made (a) before the thirtieth calendar day following the effective date of this Order or (b) later than three months after the effective date of this Order, unless such period is extended for good cause by the Board, or by the Federal Reserve Bank of Kansas City pursuant to delegated authority. By order of the Board of Governors, effective June 2, 1977. Voting for this action: Chairman Burns and Governors Gardner, Wallich, Coldwell, Jackson, Partee, and Lilly. (Signed) [s e a l ] Ruth A. R e is t e r , A ssistan t Secretary o f the Board. Republic of Texas Corporation, Dallas, Texas Order Denying Acquisition o f Bank Republic of Texas Corporation, Dallas, Texas, a bank holding company within the meaning of the Bank Holding Company Act, has applied for the Board’s approval under § 3(a)(3) of the Act (12 U.S.C. § 1842(a)(3)) to acquire all of the voting shares (less directors’ qualifying shares) of the successor by merger to Preston State Bank, Dallas, Texas (“Bank”). The bank into which Bank is to be merged has no significance except as a means to facilitate the acquisition of the voting shares of Bank. Accordingly, the proposed acquisition of shares of the successor organization is treated herein as the proposed acquisition of all the shares of Bank. Applicant presently indirectly controls voting shares of Bank. Notice of the application, affording opportunity for interested persons to submit comments and views, has been given in accordance with § 3(b) of the Act. The time for filing comments and views has expired, and the Board has considered the applica tion and all comments received in light of the factors set forth in § 3(c) of the Act (12 U.S.C. § 1842(c)). Applicant, the fourth largest banking organiza tion in the State of Texas, has eight banking sub sidiaries with aggregate deposits of $2.8 billion, representing 5.9 per cent of commercial bank de posits in the State. Acquisition of Bank, the State’s 30th largest banking organization, would increase Applicant’s share of commercial bank deposits in 680 Federal Reserve Bulletin □ July 1977 Texas by 0.35 per cent but would not alter Appli cant’s ranking in the State.1 By Order dated October 25, 1973 (38 F.R. 30581), the Board approved the application of Applicant to become a bank holding company through the direct acquisition of Republic National Bank of Dallas (“Republic Bank” ) and the indirect acquisition of 29.9 per cent of the voting shares of Oak Cliff Bank & Trust Company, Dallas, Texas. In addition to its interest in Bank, Republic Bank at the time also owned indirectly between 5 and 24.99 per cent of the voting shares in twenty other banks, seventeen of which were in the Dallas banking market.2 Ap plicant represented to the Board that it would file separate applications for prior approval by the Board for acquisition of additional shares in each of certain of those banks, and would divest completely its interests in others. In its Order the Board stated that each such application filed by the Applicant would be considered on its own merits in light of the statutory standards set forth in § 3 of the Act. Since that time Applicant has divested its interests in seven of the Dallas-area banks, and has applied to acquire additional shares of four of the Dallas-area banks.3 Bank is the seventh largest banking organization and the sixth largest bank in the Dallas banking market and holds deposits of $167.0 million, repre senting 1.8 per cent of the total deposits of com mercial banks in the market. Applicant is already a significant competitor in the Dallas banking market. The recent addition of Garland Bank and Dallas National Bank as subsidiaries increased Appli cant’s share of the deposits to 25.4 per cent, and at the present time Applicant controls the second and ninth largest banks in the market plus two smaller banks. In addition, the nine banks in the Dallas market (including Bank) in which Applicant pres ently holds minority interests have aggregate de posits of $416.3 million, representing 4.5 per cent of market deposits. The acquisition of Bank would increase Applicant’s share of market deposits to 27.2 per cent and entrench its position as the largest banking organization in the market. Accordingly, 1A11 banking data are as of June 30, 1976. By separate Order dated March 23, 1977 (42 F.R. 16855 and 16856) the Board approved Applicant’s acquisition of Dallas National Bank in Dallas (formerly Fair Park National Bank of Dallas) Dallas, Texas, and First National Bank in Garland, Garland, Texas (“Garland Bank”). Applicant consummated both of these acquisitions on May 2, 1977. 2The Dallas banking market is approximated by the Dallas RMA. 3By separate action of this date, the Board approved Applicant’s acquisition of Midway National Bank of Grand Prairie, Grand Prairie, Texas. the Board views the effects of the proposal on concentration in the Dallas banking market as an adverse factor in its consideration of this applica tion. Those effects are regarded as more significant in light of the fact that the market is already somewhat concentrated with the three largest bank ing organizations holding 60.7 per cent of the de posits. In addition to having adverse effects upon the concentration of banking resources in the Dallas banking market, consummation of the proposal would eliminate substantial existing competition between Bank and Applicant’s subsidiary banks, particularly Republic Bank. Applicant maintains that Bank and Republic Bank serve essentially different kinds of customers,4 and that the long standing relationship between Republic Bank and Bank lessens the competition between them. While Applicant or Republic Bank has indirectly owned 20 per cent or more of the shares of Bank since 1941, Republic Bank did not sponsor Bank’s forma tion in 1939, and it appears that the nature of the relationship has not been such that it has precluded the development of meaningful competition be tween Republic Bank and Bank. Furthermore, the record shows that each derives a significant amount of its deposits from the service area of the other, and that Republic Bank and Bank are, respectively, the first and second largest issuer of credit card plan loans in the market with 32.3 and 25.4 per cent, respectively, of all card plan loans held by banks in the Dallas banking market. Thus, the Board con cludes that consummation of the proposal would eliminate substantial existing competition between Applicant and Bank. Accordingly, the Board finds on the basis of the foregoing and other facts of record that competitive considerations relating to this application weigh sufficiently against approval so that it should not be approved unless the anti competitive effects are clearly outweighed by bene fits to the public in meeting the convenience and needs of the community to be served. The financial and managerial resources of Appli cant, its subsidiaries and Bank are regarded as generally satisfactory and consistent with approval of the application. Considerations relating to bank ing factors are also consistent with approval of the application. While Applicant proposes to expand Bank’s commercial and industrial lending, there is no indication that the needs of Bank’s customers 4Applicant characterizes the business of Republic Bank as “wholesale banking” and that of Bank as “consumer banking” . The Board does not view this as an appropriate distinction for purposes of competitive analysis. Law Departm ent are not currently being met, and that the proposed new loans cannot be obtained elsewhere in the Dallas banking market. Accordingly, the Board finds that considerations relating to convenience and needs of the community to be served do not outweigh the adverse competitive effects that would result from Applicant’s acquisition of Bank. On the basis of the facts in the record, and in light of the factors set forth in § 3(c) of the Act, it is the Board’s judgment that approval of the proposal would not be in the public interest. Accordingly, the application is denied for the reasons sum marized herein. By Order of the Board of Governors, effective June 20, 1977. Voting for this action: Vice Chairman Gardner and Governors Wallich, Jackson, Partee and Lilly. Absent and not voting: Chairman Burns and Governor Coldwell. (Signed) R u t h A. R e i s t e r , [s e a l] A ssistan t Secretary o f the Board. Republic of Texas Corporation, Dallas, Texas Order Approving Acquisition o f Bank Republic of Texas Corporation, Dallas, Texas, a bank holding company within the meaning of the Bank Holding Company Act, has applied for the Board’s approval under § 3(a)(3) of the Act (12 U.S.C. § 1842(a)(3)) to acquire all of the voting shares (less directors’ qualifying shares) of the successor by merger to Midway National Bank of Grand Prairie, Grand Prairie, Texas (“ Bank” ). The bank into which Bank is to be merged has no significance except as a means to facilitate the acquisition of the voting shares of Bank. Accord ingly, the proposed acquisition of shares of the successor organization is treated herein as the proposed acquisition of the shares of Bank. Appli cant presently indirectly controls 24.9 per cent of the voting shares of Bank. Notice of the application, affording opportunity for interested persons to submit comments and views, has been given in accordance with § 3(b) of the Act. The time for filing comments and views has expired, and the Board has considered the applica tion and all comments received, including those of the Comptroller of the Currency, in light of the factors set forth in § 3(c) of the Act (12 U.S.C. § 1842(c)). 681 Applicant, the fourth largest banking organiza tion in the State of Texas, has eight banking sub sidiaries with aggregate deposits of $2.8 billion, representing 5.9 per cent of commercial bank de posits in the State. Acquisition of Bank, one of the State’s smaller banking organizations, would in crease Applicant’s share of commercial bank de posits in Texas by only 0.06 per cent.1 By Order dated October 25, 1973 (38 F.R. 30581), the Board approved the application of Applicant to become a bank holding company through the direct acquisition of Republic National Bank of Dallas (“Republic Bank”) and the indirect acquisition of 29.9 per cent of the voting shares of Oak Cliff Bank & Trust Company, Dallas, Texas. In addition to its interest in Bank, Republic Bank at the time also owned indirectly between 5 and 24.99 per cent of the shares of twenty other banks, seventeen of which were in the Dallas banking market.2 Appli cant represented to the Board that it would file separate applications for prior approval by the Board for acquisition of additional shares in each of certain of those banks, and would divest completely its interests in others. In its Order the Board stated that each such application filed by Applicant would be considered on its own merits in light of the statutory standards set forth in § 3 of the Act. Since that time Applicant has divested its interests in seven of the Dallas-area banks, and has applied to acquire additional shares of four of the Dallas-area banks.3 Bank is the 34th largest banking organization in the Dallas banking market and holds deposits of $29.3 million, representing 0.3 per cent of the total deposits held by commercial banks in the market. Applicant is already a significant competitor in the Dallas banking market. The recent addition of Gar land Bank and Dallas National Bank as subsidiaries increased Applicant’s share of the deposits to 25.4 per cent, and at the present time Applicant controls the second and ninth largest banks in the market plus two smaller banks. In addition, the nine banks in the Dallas market (including Bank) in which Applicant presently holds minority interests have aggregate deposits of $416.3 million, representing 4.5 per cent of market deposits. XAI1 banking data are as of June 30, 1976. By separate Orders dated March 23, 1977 (42 F.R. 16855 and 16856) the Board approved Applicant’s acquisition of Dallas National Bank in Dallas (formerly Fair Park National Bank of Dallas) Dallas, Texas, and First National Bank in Garland, Garland, Texas (“Garland Bank”). Applicant consummated both of these acquisitions on May 2, 1977. 2The Dallas banking market is approximated by the Dallas RMA. 3By separate action of this date, the Board denied Applicant’s proposal to acquire Preston State Bank, Dallas, Texas. 682 Federal Reserve Bulletin □ July 1977 While consummation of the proposal would ap pear to eliminate some existing competition inas much as Applicant and Bank operate in the same market, the Board notes that Applicant, or its predecessor in interest, Republic Bank, has held 20 per cent or more of the shares of Bank since its formation in 1963, and that the nature of this relationship is such that little, if any, meaningful competition presently exists between Bank and Applicant’s subsidiary banks in the Dallas market. But for the history of the established relationship between Applicant and Bank, the effects on exist ing competition would be viewed as more serious, but viewed in light of that relationship the effects are only slight. Moreover, while Applicant is one of the largest organizations in the banking market, in view of the facts presented in the record of this application, the Board does not regard the slight increase in concentration of market deposits as significant. Accordingly, the Board concludes that the proposed acquisition of Bank by Applicant would not have significant adverse effects on com petition. The financial and managerial resources of Appli cant, its subsidiaries, and Bank are regarded as generally satisfactory and consistent with approval of the application. Considerations relating to bank ing factors are also consistent with approval of the application. Following consummation of the trans action, Applicant intends to assist Bank in expand ing its residential real estate lending activities, as well as its commercial loan and deposit services. These considerations relating to convenience and needs of the community to be served do not appear to be substantial but they do lend some weight toward approval of the application, and in the Board’s view, outweigh any slightly adverse effects on competition that might result from consumma tion of this proposal. Accordingly, it is the Board’s judgment that the proposed acquisition 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 thirtieth calendar day following the effective date of this Order or (b) later than three months after the effective day of this Order, unless such period is extended for good cause by the Board, or by the Federal Reserve Bank of Dallas pursuant to dele gated authority. By Order of the Board of Governors, effective June 20, 1977. Voting for this action: Vice Chairman Gardner and Governors Wallich, Jackson, Partee and Lilly. Absent and not voting: Chairman Burns and Governor Coldwell. (Signed) R u t h A. R e i s t e r , [se a l] A ssistan t Secretary o f the Board. The Royal Trust Company, Royal Trust Bank Corp., Montreal, Quebec, Canada Order Approving Acquisition o f Bank The Royal Trust Company, Montreal, Quebec, Canada (“Applicant” ), and its wholly-owned sub sidiary, Royal Trust Bank Corp., Miami, Florida (“Bank Corp.”), both of which are bank holding companies within the meaning of the Bank Holding Company Act, have applied for the Board’s ap proval under § 3(a)(3) of the Act (12 U.S.C. § 1842(a)(3)) to acquire all of the voting shares of Royal Trust Bank of South Dade, N .A., Dade County, Florida, a proposed new bank (“Bank”). Notice of the applications, affording opportunity for interested persons to submit comments and views, has been given in accordance with § 3(b) of the Act. The time for filing comments and views has expired, and the Board has considered the applica tions and all comments received in light of the factors set forth in § 3(c) of the Act (12 U.S.C. § 1842(c)). Applicant, with total assets of approximately $4.3 billion,1 is the largest trust company and the eighth largest financial institution in Canada, and oper ates, through its subsidiaries and other interests, in both Europe and the Caribbean Islands. In the United States, Applicant controls six Florida banks ($184.7 million in deposits)2 and one nonbank sub sidiary.3 Consummation of the subject proposal XA11 banking data are as of December 31, 1976, unless otherwise indicated and reflect bank holding company formations and acquisitions approved by the Board through April 30, 1977. 2Applicant currently controls five of these banks through Bank Corp. which was formed in 1976 as a wholly-owned subsidiary of Applicant in order to hold directly Applicant’s banking interests in the United States. information Systems Design of Florida, Inc., Miami, Florida (“ ISD-Florida” ) was formed as a subsidiary of Information Systems Design, Inc., Santa Clara, California (“ISD-California”) in 1971. While ISD-Florida is fully engaged in data processing activities permissible for bank holding companies within the scope of Regulation Y, 12 CFR § 225.4(a)(8), ISD-California is not. ISDCalifornia is, in turn, owned by Computel Systems, Ltd. (“Computel”), a Canadian data processing company. By Order of December 6, 1973, the Board denied Applicant’s retention of ISDCalifornia after Applicant’s acquisition of Computel pursuant to § 4(c)(9) of the Act [60 Fed. Res. B u l l e t i n 58 (1974)]. On January 31, 1977, the Board approved in principle a plan of divestiture of ISD- Law D epartm ent would not have an immediate effect upon the con centration of banking resources in Florida. Bank will be located in the southern part of Dade County approximately four miles from the Univer sity of Miami’s south campus. With two subsidiary banks in the relevant market,4 Applicant controls $107 million in deposits, or approximately 1.7 per cent of market deposits,5 and is the 18th largest of 46 banking organizations (with 110 banks) operating in the market. Florida’s six largest bank holding companies are also represented in the market. Although Applicant is already competing in the market, its lead bank and its closest subsidiary bank, Royal Trust Bank of Miami, N.A., is located 12.3 miles north of Bank’s proposed location.6 Due to the relative size of Applicant, the distances separating Bank from Applicant’s other subsidiary banks, and the fact that Bank is a proposed new bank, consummation of Applicant’s proposal would not appear to eliminate any potential competition, nor would it significantly increase the concentration of banking resources, in the relevant market. Ac cordingly, the Board concludes that competitive considerations are consistent with approval of the applications. The financial and managerial resources and fu ture prospects of Applicant, Bank Corp. and their subsidiaries are regarded as satisfactory. As a pro posed new bank, Bank has no financial or operating history; however, its prospects as a subsidiary of Applicant appear favorable. Considerations relating to banking factors, therefore, are consistent with approval of the application. Bank will serve as an additional full service banking alternative in the relevant market, and affiliation with Applicant will enable Bank to offer international banking services, accounts receivable financing, factoring, investment management, and investment portfolio analysis. Thus, these con siderations relating to the convenience and needs of the community to be served lend some weight California that had been submitted by Applicant. Immediately prior to consummation of the divestiture proposal, Applicant will retain ISD-Florida through a corporate reorganization by which ISD-Florida will be transferred to Applicant or to another subsidiary of Applicant. 4The Greater Miami banking market, the relevant market, includes Dade County and that portion of Broward County lying south of the Dania Canal. The northern boundary of the market area is delineated by the Dania Canal, the Miami International Airport, and a tract of undeveloped land extending across Broward County. 5A11 market data are as of June 30, 1976. 6In addition, Applicant’s lead bank, has received approval from the Regional Administrator of National Banks to open two branches, one 17 miles and the other 7.7 miles from Bank. 683 toward approval of the application. It is the Board’s judgment that the proposed acquisition would be in the public interest and that the applications should be approved. On the basis of the record, the applications are 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) Royal Trust Bank of South Dade, N.A ., Dade County, Florida, 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 June 20, 1977. Voting for this action: Chairman Burns and Governors Gardner, Wallich. Jackson, Partee, and Lilly. Absent and not voting: Governor Coldwell. (Signed) G r i f f i t h L. G a r w o o d , [s e a l] D eputy Secretary o f the Board. Trade Development Holland Holding B.V., Trade Development Finance (Netherlands Antilles) N.V. Amsterdam, The Netherlands Order Approving Formation o f Bank Holding Companies Trade D evelopm ent Holland Holding B .V . (“TDHH”), Amsterdam, The Netherlands, and its parent corporation, Trade Development Finance (Netherlands Antilles) N.V. (“TDFNA”), Curacao, The Netherlands Antilles, have applied for the Board’s approval under section 3(a)(1) of the Bank Holding Company Act (12 U.S.C. § 1842(a)(1)) to become bank holding companies through direct acquisition by TDHH of approximately 40 to 47 per cent of the voting shares of Republic New York Corporation (“Republic”), New York, New York, increasing thereby TDHH’s direct ownership and TDFNA’s indirect ownership of Republic’s voting shares from approximately 22 per cent to between 62 and 69 per cent. Republic is a bank holding company that owns all the voting shares, except directors’ qualifying shares, of Republic National Bank of New York (“ Bank”), New York, New York. Notice of the applications, affording opportunity for interested persons to submit comments and 684 Federal Reserve Bulletin □ July 1977 views, has been given in accordance with § 3(b) of the Act. The time for filing comments and views has expired, and the Board has considered the applications and all comments received in light of the factors set forth in § 3(c) of the Act (12 U.S.C. § 1842(c)). These applications are essentially for a reorgani zation of existing ownership interests in Republic. TDFNA is a wholly-owned subsidiary of Trade Development Bank Holding S.A. (“TDBH”), Lux embourg, Luxembourg, a foreign bank holding company registered under the Act by virtue of its indirect ownership of 62 per cent of Bank.1 Upon approval of these applications, TDHH will acquire approxim ately 40 per cent of the shares of Republic from two wholly-ow ned subsidiaries of TDBH. It will purchase approximately 27 per cent of R epublic’s shares from Trade Development Bank, Geneva, Switzerland, and approximately 13 per cent from Trade Development Europe Holding B.V., Amsterdam, The Nether lands. These transactions will result in direct ownership by TDHH and indirect ownership by TDFNA of approximately 62 per cent of Republic’s shares. The indirect interest of TDBH and its parent corporation, Saban S.A., Panama, Panama, which is also a registered bank holding company, will be unaffected. An additional seven per cent of Republic’s shares, however, may be purchased by TDBH from unaffiliated persons and transferred to TDHH under Applicants’ proposal. Since Ap plicants’ proposal represents essentially a reorgani zation of existing intermediate interests among TDBH’s subsidiaries, and does not affect ultimate control or beneficial ownership of Bank, consum mation of the proposal would not eliminate banking competition or increase the concentration of banking resources. Thus, competitive considera tions are consistent with approval of the applica tions. The financial and managerial resources and future prospects of Applicants and Bank are regarded as generally satisfactory and consistent with approval of the applications. Although there xBank is the fourteenth largest commercial bank in the Metropolitan New York Market, and holds $1.6 billion in consolidated deposits, or 0.7 per cent of the deposits in commercial banks in the market. All banking data are as of December 31, 1976. Market data are as of June 30, 1975. The Metropolitan New York banking market is approximated by the five boroughs of New York City, plus Nassau, Putnam, Rockland, and Westchester Counties, and western Suffolk County, all in New York State, as well as the northern two-thirds of Bergen County and eastern Hudson County in New Jersey and south western Fairfield County in Connecticut. will be no immediate change in the services offered by Bank as a result of consummation of the proposal, convenience and needs considerations are also consistent with approval of the applica tions. Therefore, it is the Board’s judgment that the proposed transactions should be approved. As part of their applications, Applicants have contended that they should be considered foreign bank holding companies. Under sections 2(h) and 4(c)(9) of the Act and section 225.4(g) of Regulation Y, foreign bank holding companies are entitled to greater regulatory freedom than domestic bank holding companies with regard to their foreign investments and foreign activities. Applicants are in the process of submitting to the Board information required to clarify their claim of foreign bank hold ing company status under § 225.4(g)(1) of the Board’s Regulation Y, but have asked the Board not to delay action on the present applications pending a determination of their status.2 The sig nificance of foreign bank holding company status under the Act and Regulation Y relates principally to exemptions from the nonbanking prohibitions of section 4 of the Act.3 For bank acquisitions under section 3 of the Act, the factors that the Board must consider under section 3(c) of the Act apply equally to both domestic and foreign companies. Since, as discussed below, it appears that only one existing foreign investment of Applicants may be affected by the ultimate determination of Applicants’ status as foreign or domestic bank holding companies and since it further appears that this investment does not bear significantly on the factors that the Board must consider under § 3(c) of the Act, the Board does not view the current inquiry regarding Appli cants’ status as an impediment to approval of these applications. Accordingly, Applicants shall be deemed to be domestic bank holding companies unless they later establish by satisfactory evidence their en 2Incident to Applicants’ request for expedited processing of these applications, Applicants’ counsel has advised them to undertake no activities and make no investments except in accordance with rules applicable to domestic bank holding companies. 3Bank holding companies that do not qualify as foreign bank holding companies under section 225.4(g) of Regulation Y must apply to retain or acquire shares of foreign companies under section 225.4(f) of Regulation Y which implements section 4(c)(13) of the Act. In general, under section 225.4(f) of Regulation Y domestic bank holding companies are limited to owning and controlling shares of foreign companies that are engaged in international or foreign banking and other foreign or international financial operations. In contrast, under section 4(c)(9) a foreign bank holding company can own and control shares of any foreign company, regardless of the activities the company is engaged in, so long as it is only engaged in incidental activities in the United States. Law Departm ent titlement under section 225.4(g) of Regulation Y to a different status.4 Upon consummation of the proposed acquisi tions, Applicants must conform their investments and activities to those provisions of the Act appli cable to domestic bank holding companies. Spe cifically, Applicants will be required by law to divest their voting shares of Trade Development Bank (France) S. A., Paris, France, in excess of five per cent, within two years after the date on which they become bank holding companies, unless within that time the Board determines Applicants to be foreign bank holding companies or approves their retention of those shares under section 4(c)(13) of the Act. On the basis of the record, the applications are approved for the reasons summarized above. The transactions shall not be made before the thirtieth calendar day following the effective date of this Order, or 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 New York pursuant to delegated authority. By order of the Board of Governors, effective June 20, 1977. Voting for this action: Vice Chairman Gardner and Governors Wallich, Coldwell, Jackson, Partee, and Lilly. Absent and not voting: Chairman Burns. (Signed) R u t h A. R e i s t e r , [se a l] A ssistan t Secretary o f the B o a rd . 4For some companies, domestic bank holding company status could entail a significant divestiture of interests in foreign companies, and this requirement could materially affect the financial resources and future prospects of the companies under section 3 of the Act. In connection with the present applications, however, domestic bank holding company status will not necessarily involve any significant divestiture by either Applicant. Valley Bancorporation, Appleton, Wisconsin Order Approving Acquisition o f Bank Valley Bancorporation, Appleton, Wisconsin, 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 80 per cent or more of the voting shares of Shawano National Bank, Shawano, Wisconsin (“ Bank”). 685 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 applica tion and all comments received, including, but not limited to, those on behalf of shareholders and customers of Bank filed by Messrs. Frank Feivor and Walter Karth (hereinafter collectively referred to as “Protestants” ) in light of the factors set forth in § 3(c) of the Act (12 U.S.C. § 1842(c)). Applicant, the sixth largest banking organization in Wisconsin, controls 14 banks with total deposits of $295.1 million, which represents 1.8 per cent of total deposits in commercial banks in the State.1 Bank, with deposits of $51.3 million, controls .31 per cent of total deposits in the State. Consumma tion of the proposed acquisition would increase Applicant’s share of statewide deposits to 2.1 per cent, and Applicant would become the fifth largest banking organization in the State of Wisconsin. Inasmuch as the five largest banking organizations in Wisconsin hold only 31.5 per cent of the total deposits in the State, consummation of the proposal would have no appreciable effect on the concentra tion of banking resources in the State. While Applicant is not currently represented in the relevant market, three of its subsidiary banks each maintain an office 28 to 30 miles from Bank’s sole office. The three offices are located in Out agamie County, in which Applicant’s subsidiary banks maintain six additional offices. Although eight of Applicant’s fourteen subsidiary banks de rive deposits from Bank’s service area, the aggre gate of those deposits amounts to less than $200,000, and none derives more than $62,000. The aggregate amount of loans Applicant’s subsidiaries derive from Bank’s service area is less than $30,000. Conversely, Bank does not derive signifi cant amounts of deposits or loans from the service areas of Applicant’s subsidiaries. Accordingly, it does not appear that Applicant’s acquisition of Bank would eliminate significant amounts of exist ing competition. Applicant proposes to enter the Shawano bank ing market2 by acquiring the largest of ten banking organizations in that market, with 32.8 per cent of total market deposits.3 The Shawano market does not appear attractive for de novo entry and 12 large *A11 banking data are as of December 31, 1976. 2The Shawano banking market is approximated by Shawano County and the southern one-half of Menominee County. 3Market data are as of June 30, 1976. 686 Federal Reserve Bulletin □ July 1977 multibank holding companies, including the five largest banking organizations in the State, appear to be as likely to enter the Shawano market as Appli cant. In light of the above, the Board concludes the proposed acquisition would not have significant adverse effects on potential competition. The financial and managerial resources of Appli cant and Bank are regarded as satisfactory and the future prospects for each appear favorable. Protes tants contend that this application should be denied on the grounds that the financial and managerial resources of Applicant are inadequate in that Ap plicant would assume more debt than it can retire without extracting earnings from Bank and Appli cant’s subsidiary banks. In connection with the acquisition of Bank, Applicant will incur debt of $5.5 million through the issuance of four-year unse cured promissory notes and 12-year corporate notes.4 Applicant proposes to service its new debt primarily through dividends from its subsidiary banks and consolidated tax benefits. Applicant’s projections of cash flow requirements and growth in assets, earnings, and capital of subsidiary banks appear reasonable in light of historical data. It appears, based upon those projections, that Appli cant can service the acquisition debt without impos ing excessive burdens on the capital of Bank and its other subsidiary banks. In light of the above the Board regards the financial and managerial re sources of Applicant and Bank as satisfactory and consistent with approval. Protestants argue that the manner in which ten der offers were made to Bank’s shareholders re flects adversely on the management of Applicant. Protestants assert that the presidents of Bank and Applicant conducted negotiations without the knowledge of Bank’s directors and that Bank’s directors did not have an opportunity to analyze the specific proposal, including the debt financing, that Applicant later submitted to the Board. The record before the Board in this case, including submissions by Protestants and Applicant, does not indicate any impropriety or questionable actions in the prepara tion of Applicant’s tender offer. The board of directors of Bank endorsed Applicant’s offer to Bank’s shareholders following a series of presenta tions to the board by Applicant and rival offerors, and any discussions between officers of Bank and Applicant were conducted in consultation with legal counsel. While Applicant did not submit its applica 4 Approximately $1 million of this debt will be used for corporate purposes other than the proposed acquisition, including improving the capital position of subsidiary banks. tion to the directors of Bank prior to making its tender offer, Applicant forwarded a copy of the application to Bank on the same day that it filed the application with the Federal Reserve Bank of Chicago. Furthermore, Applicant’s letter proposing the tender offer indicated that Applicant proposed to incur debt in connection with the acquisition, and the specific financing proposal was not put into final form until it was incorporated in the application which, as noted above, was promptly forwarded to Bank. Protestants state that Applicant’s tender offer is below the market value of Bank’s shares. The record in this application indicates the Applicant’s offer was the highest of the competing bids made to the shareholders, and that the protesting share holders were among those shareholders owning 97.5 per cent of the Bank’s shares who accepted the offer. Bank’s own analysis of the projected market value of its shares indicated that Applicant’s offer represented a premium on market value. There is nothing in the record to support Protestants’ opin ion that the offer was inadequate, other than a statement by Protestants that an unidentified expert indicated a higher market value for Bank’s shares. In light of the above and other facts of record, the Board is unable to conclude that Applicant’s con duct relating to the tender offer reflects adversely on its managerial resources. Protestants also claim that the convenience and needs of the community to be served would not be aided by the proposed acquisition. Specifically, they state that transferring control of Bank outside of the Shawano community will make Bank less responsive to local needs. In this connection Appli cant has indicated that a representative of the Shawano community would be named to Appli cant’s Board of Directors upon consummation of the proposal. In addition, while it appears that the banking needs of the Shawano area are adequately served at present, Applicant has stated its intention to improve and expand Bank’s services in the areas of real estate mortgages, farm loans, loan opera tions, employee fringe benefits, data processing, and personnel services. Applicant also proposes to offer investment advice at no charge to local municipalities and to provide equity capital to Bank when necessary. In light of these factors the Board regards considerations of the convenience and needs of the community to be served as lending weight in favor of approval of the application. On the basis of the record, the application is approved for the reasons summarized above. The transaction shall not be made (a) before the thirtieth Law Departm ent calendar day following the effective date of this Order or (b) later than three months after the effective date of this Order, unless such period is extended for good cause by the Board, or by the Federal Reserve Bank of Chicago pursuant to dele gated authority. By order of the Board of Governors, effective June 29, 1977. Voting for this action: Vice Chairman Gardner and Governors Wallich, Jackson, Partee and Lilly. Absent and not voting: Chairman Burns and Governor Coldwell. (Signed) R u t h A. R e i s t e r , [se a l] A ssistan t Secretary o f the Board. O r d e r s U n d e r S e c t io n 4 of B a n k H o l d in g C o m p a n y A ct BankAmerica Corporation, San Francisco, California Order Approving Continuation o f D ata Processing A ctivities through Finance Am erica BankAmerica Corporation, San Francisco, California, a bank holding company within the meaning of the Bank Holding Company Act (“Act” ), has applied for the Board’s approval, under § 4(c)(8) of the Act (12 U.S.C. § 1843(c)(8)) and § 225.4(b)(2) of the Board’s Regulation Y (12 C.F.R. § 225.4(b)(2)), to continue to engage in data processing activities through its wholly-owned sub sidiary, Finance America Corporation, Allentown, Pennsylvania (“ FAC” ). Applicant proposes that FAC continue to engage in the activities of provid ing bookkeeping and data processing activities for the internal operations of Applicant’s direct and indirect subsidiaries, and storing and processing banking, financial or related economic data, for certain insurance underwriting companies (collec tively referred to as the “ Stuyvesant group” ) .1 Such activities have been determined by the Board to be closely related to banking (12 C .F.R . § 225.4(a)(8)). Notice of the application, affording opportunity for interested persons to submit comments and views on the public interest factors, has been duly irThe companies are: The Stuyvesant Insurance Company, Stuyvesant Life Insurance Company, Trans-Oceanic Life Insur ance Company, and National American Insurance Company of New York, all of which are headquartered in Allentown, Pennsyl vania. 687 published (42 Federal R egister 17524). The time for filing comments and views has expired, and the Board has considered the application and all com ments received in the light of the public interest factors set forth in § 4(c)(8) of the Act (12 U.S.C. § 1843(c)(8)). Applicant is a one-bank holding company con trolling the largest commercial bank in the world, Bank of America NT&SA, San Francisco, Califor nia. As of December 31, 1976, Bank of America NT&SA held total domestic deposits of approxi mately $33.5 billion, representing 37.7 per cent of total deposits in commercial banks in the State of California, and total foreign deposits of approxi mately $27.9 billion. Applicant also controls non banking subsidiaries primarily engaged in providing data processing services, leasing activities, invest ment advisory services, the sale and underwriting of credit-related insurance, the sale and issuance of travelers’ checks, and mortgage banking. By Order dated August 14, 1973, the Board approved, subject to certain conditions, Appli cant’s proposal to acquire shares of GAC Finance, Inc., Allentown, Pennsylvania (“Finance”). As a subsidiary of Applicant, Finance was renamed Finance America Corporation. FAC is lawfully en gaged in the activities of making direct loans to consumers; purchasing sales financing paper; financing inventories; servicing receivables arising from inventory financing by certain manufacturers; and selling credit-related insurance to its direct consumer borrowers. Prior to the acquisition of Finance by Applicant on January 1, 1974, Finance owned, and provided data processing services to, the Stuyvesant group, which was sold to H.F. Ahmanson & Company, Los Angeles, California on the same date. As part of the terms of that sale, Finance committed to continue to provide the Stuyvesant group with data processing services. While the particular services provided to the Stuyvesant group appear to be within the scope of data processing activities that bank holding com panies may perform under the Board’s Regulation Y, Applicant had not sought the Board’s prior approval to engage in the provision of such serv ices.2 The subject application seeks to obtain such approval. 2Section 4 of the Act and section 225.4 of Regulation Y prohibit a bank holding company from engaging in any nonbanking activity without the Board’s prior approval. In addition, § 225.4(c)(2) of Regulation Y specifically states that, after the Board approves an application, “the activities involved [in an application] shall not be altered in any significant respect from those considered by the 688 Federal Reserve Bulletin □ July 1977 In acting on an application to continue to engage, through a subsidiary, in an activity that is permissi ble for bank holding companies under § 4(c)(8) of the Act and § 225.4(a) of Regulation Y, the Board applies the same standards that it applies to an application to acquire a company engaged in such an activity. The Board analyzes the competitive effects of the proposal both at the time of the acquisition of the company engaged in the activity and at the time of the application to continue to engage in the activity. Prior to Finance’s acquisi tion by Applicant, Finance provided data process ing services for itself and its subsidiaries, which included the Stuyvesant group.3 It does not appear that Applicant competed with Finance for the pro vision of data processing services to the Stuyvesant group at the time of the acquisition, nor does it appear that Applicant was likely to enter into such competition at that time. Thus, it does not appear that Applicant’s provision of such services to the Stuyvesant group had any significant adverse ef fects on competition at that time. With respect to competitive effects as of the present, Applicant would limit FAC’s data processing activities to providing services to FAC and its subsidiaries and providing financially-related data processing serv ices to the Stuyvesant group. Again, it does not appear that, but for FAC’s performance of these services, Applicant would be competing for those services or likely to do so. Therefore, it does not appear from the facts of record that the continua tion of such services to only Stuyvesant would have any significant adverse effects on existing or poten tial competition. The continuation of such services should provide benefits to the public by assuring the Stuyvesant group of a continued and convenient source for financially-related data processing serv ices. Moreover, there is no evidence in the record indicating that the continuation of such data pro cessing group would result in any undue concentra tion of resources, unfair competition, conflicts of interests, unsound banking practices or other ad verse effects on the public interest. Based upon the foregoing and other con siderations reflected in the record, the Board has determined that the balance of the public interest factors the Board is required to consider under § 4(c)(8) is favorable. Accordingly, the application is hereby approved. This determination is subject to the conditions set forth in § 225.4(c) of Regulation Y and to the Board’s authority to require such modifi cation or termination of the activities of a holding company or any of its subsidiaries as the Board finds necessary to assure compliance with the pro visions and purposes of the Act and the Board’s regulations and orders issued thereunder, or to prevent evasion thereof. By order of the Board of Governors, effective June 7, 1977. Voting for this action: Chairman Bums and Governors Wallich, Coldwell, Jackson, and Lilly. Absent and not voting: Governors Gardner and Partee. (Signed) R u t h A. R e i s t e r , [se a l] Board in making the determination . . . .” Accordingly, it is the Board’s judgment that Applicant, by engaging in data processing activities without prior Board approval, violated the Act. Applicant has stated that the violation occurred because indi viduals unfamiliar with the requirements of the Act negotiated the terms of sale of the Stuyvesant group and that individuals unfamil iar with the Act reviewed the ancillary data processing agreement on behalf of Applicant. The Board has examined the circum stances surrounding the provision of data processing services without the Board’s prior approval. Applicant’s senior manage ment has taken affirmative steps to prevent violations of the Act from occurring in the future, having established procedures for centralized internal review of all of Applicant’s activities for compliance with the substantive and procedural requirements of the Act and Regulation Y. The Board expects that these actions will assist Applicant in avoiding any recurrence of violations of law. Based upon an examination of all of the facts of record, it is the Board’s judgment that the facts are such that they do not warrant denial of the instant application. “Finance, FAC’s predecessor, had on occasion provided certain data processing services to businesses in the Allentown, Pennsyl vania area. However, such services were quite limited in scope and were usually limited to excess capacity. The revenue gained from providing such services was de minimis. Therefore, such services are not viewed as being significant for purposes of analyzing the competitive effects of the acquisition of FAC’s data processing activities. FAC has terminated providing such services to any company other than those in the Stuyvesant group. A ssistan t Secretary o f the Board. NBC Co., Lincoln, Nebraska Order Denying Acquisition o f Fremont S tate Company NBC Co., Lincoln, Nebraska, a bank holding company within the meaning of the Bank Holding Company Act, has applied for the Board’s approval under § 4(c)(8) of the Act and § 225.4(b)(2) of the Board’s Regulation Y to acquire all of the voting shares of the Fremont State Company, Fremont, Nebraska (“ Company” ), an industrial loan and investment company, and to act as agent in the sale of credit life and credit accident and health insur ance directly related to extensions of credit by Company. Such activities have been determined by the Board to be closely related to banking (12 CFR § 225.4(a)(2) and (9)). Law Departm ent Notice of the application, affording opportunity for interested persons to submit comments and views on the public interest factors, has been duly published (42 Fed. Reg. 21661 (1977)). The time for filing comments and views has expired, and the Board has considered the application and all com ments received in the light of the public interest factors set forth in § 4(c)(8) of the Act (12 U.S.C. § 1843(c)(8)). Applicant, the fifth largest banking organization in Nebraska, controls one bank with deposits of $256.9 million, representing 3.8 per cent of total deposits in commercial banks in the State.1 Appli cant also controls three industrial loan companies, Mutual Savings Company, Lincoln, Nebraska, Nebraska Savings Company, Scottsbluff Nebraska, and Mutual Savings Company of Omaha, Omaha, Nebraska, with total deposits of $24.1 million, representing 17.3 per cent of total deposits in the 14 industrial loan companies in Nebraska. Company operates as an industrial loan company and issues one type of “ certificate of indebted ness” , a fully paid certificate that is similar to a savings account. Company is subject to regulation and examination by State supervisory authorities. In its lending capacity, Company makes commer cial, mortgage and personal consumer loans. Com pany also engages in general insurance agency and real estate brokerage activities that would not be acquired by Applicant as part of the proposed transaction. Company, with total deposits of $0.9 million, is located in the Fremont banking market, the rele vant market in which to assess the competitive effects of the proposed acquisition.2 In that market, Company competes for deposits and/or loans with seven commercial banks, two savings and loan associations, three credit unions, and five con sumer finance companies. Of the seven commercial banks in the Fremont market, Applicant is affiliated with Fremont First National Company, a holding company that controls First National Bank & Trust Company of Fremont, and is also affiliated with Fremont First State Company, a holding company that controls First State Bank, also of Freemont.3 Unless otherwise indicated, banking data are as of December 31, 1976. 2The Fremont banking market is approximated by the southern half of Dodge County, the extreme southwest portion of Washing ton County, and northern Saunders County. 3The affiliation exists because shareholders of Applicant own controlling interests in Fremont First National Company and in Fremont First State Company. Applicant maintains management and director interlocks with both companies and their subsidiary banks, as well as management contracts with the subsidiary banks. 689 These two banks, the first and third largest com mercial banks in the Fremont market, together control total deposits of $72.4 million, representing 50.9 per cent of the total commercial bank deposits in the market. These two banks compete with Company for IPC (individual, partnership and corporation) time and savings deposits and ac count for approximately 19.9 per cent ($39.2 million) of the total IPC deposits in the Fremont market. Since Company controls IPC deposits representing 0.5 per cent ($0.9 million) of such total deposits in the Fremont market. Appli cant, or at least those that manage or control Applicant, upon its acquisition of Company, would control approximately 20.4 per cent of the total IPC time and savings deposits in the Fremont market. In the Board’s opinion, the increased concentration in this product market, although only slight, weighs adversely against the subject proposal. In addition to competing for deposits, Appli cant’s affiliated banks and Company compete for the origination of consumer loans in the Fremont banking market. The two affiliated banks have total consumer loans outstanding of $11.3 million, repre senting 39.4 per cent of the total consumer loans made in the Fremont market, by far the largest market share held by any of the fifteen sources of consumer loans in Fremont.4 Company, with con sumer loans outstanding of approximately $0.9 mil lion, representing 3.1 per cent of such loans in the market, is the sixth largest of the fifteen sources of consumer loans in the market. The market shares of the four most significant sources of consumer loans in the market aggregate to approximately 80.6 per cent and thus the Fremont market for consumer loans appears quite concentrated. Applicant, or at least those that manage or control Applicant, upon its acquisition of Company, would hold approximately 42.5 per cent of the total consumer loans in the Fremont market. In the Board’s opinion, this in crease in concentration and reduction in existing competition that would derive from elimination of Company as an independent competitive alterna^ tive source for consumer loans in the market weigh substantially against approval of the subject propo sal. On the basis of the foregoing and other facts of record, the Board concludes that approval of the application would result in a significant decrease in competition within the Fremont banking market. Accordingly, the competitive factors lend substan tial weight toward denial of the application. 4Applicant’s affiliated banks are considered one source for pur poses of consumer loan data. 690 Federal Reserve Bulletin □ July 1977 The subject proposal contemplates a purchase of stock involving a cash outlay of $25 thousand for all of the voting shares of Company and a contribution to Company’s equity capital account of $150 thousand. Applicant intends to raise these funds from a combination of cash and a liquidation of notes receivable. While Applicant’s investment in Company would not require a substantial cash outlay and Applicant’s present financial condition is generally satisfactory, that investment, in light of recent events, may continue to place a burden on Applicant and its subsidiaries. The expenses inci dent to the construction and financing of a new office building for Applicant’s bank subsidiary placed and may continue to place a strain upon Applicant’s earnings and may otherwise result in an increase in financial leverage.5 In these circum stances, the Board is of the opinion that it would be preferable for Applicant to conserve its resources for the benefit of its existing subsidiaries rather than for expansion of Applicant’s nonbanking interests at this time. Applicant proposes to expand the types of in struments by which Company raises lendable funds, and to offer second mortgage loans. While these considerations lend some weight toward ap proval of this application; they do not outweigh the substantially adverse effects of Applicant’s propo sal, as discussed above. Based upon the foregoing and the other facts of record, it is the Board’s judgment that approval of the application would not be in the public interest and that the application should be, and hereby is, denied. By order of the Board of Governors, effective June 29, 1977. Voting for this action: Vice Chairman Gardner and Governors Coldwell, Jackson, Partee, and Lilly. Voting against this action: Governor Wallich. Absent and not voting: Chairman Burns. (Signed) G r i f f i t h L. G a r w o o d , [s e a l] D eputy Secretary o f the Board. 5During 1976, Bank incurred operating expenses almost $2 mil lion more than in 1975, due primarily to increased mortgage and occupancy expenses. As a result, Applicant’s consolidated earn ings in 1976 were $1.5 million, compared to $2.6 million in 1975. Peoples Credit Co., Kansas City, Missouri Order Approving Retention o f M idw est D ata Processing Peoples Credit Co., Kansas City, Missouri, a bank holding company within the meaning of the Bank Holding Company Act, has applied for the Board’s approval, under § 4(c)(8) of the Act (12 U.S.C. § 1843(c)(8)) and § 225.4(b)(2) of the Board’s Regulation Y (12 C.F.R. § 225.4(b)(2)), to retain the assets of Midwest Data Processing, Kansas City, Missouri, a division of Peoples Credit Co. that engages in bookkeeping and data processing ac tivities for its subsidiary banks and other commer cial banks and commercial businesses. Such ac tivities have been determined by the Board to be closely related to banking (12 C.F.R. § 225.4(a)(8)). Notice of the application, affording opportunity for interested persons to submit comments and views on the public interest factors, has been duly published (42 Federal R egister 19399). The time for filing comments and views has expired, and the Board has considered the application and all com ments received in the light of the public interest factors set forth in § 4(c)(8) of the Act (12 U.S.C. § 1843(c)(8)). The Board regards the standards of § 4(c)(8) for the retention of a nonbanking activity to be the same as the standards for a proposed commence ment of a § 4(c)(8) nonbanking activity. Applicant controls three banks with total deposits as of De cember 31, 1975 of $36.3 million, representing .21 per cent of total deposits of all Missouri banks. Two of Applicant’s subsidiary banks are in the Kansas City banking market and control .62 per cent of total deposits in that market. Applicant commenced the operations of Midwest de novo in December 1966 and it now provides data processing services for Applicant’s subsidiary banks, other commercial banks and several businesses in Kansas and Mis souri. It appears that the de novo establishment of Midwest by Applicant had positive effects on com petition in the area serviced by Midwest, which is approximately the area within a 30-mile radius of Kansas City, Missouri. It appears that retention of Midwest by Applicant would have no adverse ef fects on competition in any relevant area. There is no evidence indicating that the retention of Mid west by Applicant would lead to an undue concen tration of resources, conflicts of interests, or un sound banking practices. Furthermore, approval of the application should enable Midwest to remain a Law Departm ent viable competitor in serving the data processing needs of the relevant community. Based upon the foregoing and other con siderations reflected in the record, the Board has determined that the balance of the public interest factors the Board is required to consider under § 4(c)(8) is favorable. Accordingly, the application is hereby approved. This determination is subject to the conditions set forth in § 225.4(c) of Regulation Y and to the Board’s authority to require such modifi cation or termination of the activities of a holding company or any of its subsidiaries as the Board finds necessary to assure compliance with the pro visions and purposes of the Act and the Board’s regulations and orders issued thereunder, or to prevent evasion thereof. By order of the Board of Governors, effective June 3, 1977. Voting for this action: Chairman Burns and Governors Gardner, Wallich, Coldwell, Jackson, Partee and Lilly. (Signed) G r i f f i t h L. G a r w o o d , [s e a l] D eputy Secretary o f the Board. O r d e r s U n d e r s S e c t io n s 3 & 4 o f B a n k H o l d in g C o m p a n y A ct Chalfen-Holiday, Inc., Minneapolis, Minnesota Order Approving Formation o f Bank Holding Company and Retention o f Nonbanking A ctivity Chalfen-Holiday, Inc., Minneapolis, Minnesota, has applied for the Board’s approval under § 3(a)(1) of the Bank Holding Company Act (12 U.S.C. 1942(a)(1)) of formation of a bank holding company through acquisition of 70 per cent or more of the voting shares of First National Bank in Anoka, Anoka, Minnesota (“ 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 applica tion and all comments received in light of the factors set forth in § 3(c) of the Act (12 U.S.C. 1842(c)). Applicant, an Ohio corporation, was formed in 1965, at which time it acquired from its principal his 20 per cent interest in a joint venture, International Holiday on Ice Company, London, England 691 (“IHOI”).1 Applicant has filed a separate applica tion pursuant to § 4(c)(13) of the Act (12 U.S.C. 1843(c)(13)) to retain its interest in IHOI and the Board’s action on that application is also con sidered herein. Bank (deposits of approximately $43.8 million2) controls .6 of one per cent of the total deposits held by commercial banks in the relevant banking market3 and is the fifteenth largest of 114 banking organizations operating in that market. Upon acquisition of Bank, Applicant would control .3 of one per cent of total deposits in the State. Applicant engages in no activities in the United States. Consummation of the proposed transaction would not eliminate any existing or potential com petition. Competitive considerations, therefore, are consistent with approval of the application. The financial and managerial resources and fu ture prospects of Applicant and Bank are con sidered satisfactory. Applicant will incur debt of approximately $3.2 million in order to purchase shares of Bank. A substantial portion of that debt would be serviced by funds generated from Appli cant’s investment in IHOI. In addition, Applicant’s principal has irrevocably subscribed to $2 million in preferred stock of Applicant that would be available for debt reduction should the funds to be generated from Applicant’s investment in IHOI fall below projected levels. The preferred stock subscription is secured by the principal’s pledge of municipal bonds bearing a face amount of approximately $1.9 million. In view of the foregoing and Bank’s and IHOI’s earnings history, it appears that Applicant’s income will be sufficient to enable it to service its debt without impairing the financial resources of Bank. Accordingly, considerations relating to the banking factors are consistent with approval of the application. Consummation of the transaction would have no immediate effect on the area’s banking convenience and needs; however, con siderations relating to the convenience and needs of the community to be served are regarded as being consistent with approval of the application. It is the Board’s judgment that consummation of the pro posed transaction would be consistent with the public interest and that the application to become a bank holding company should be approved. IHOI is a joint venture owned 20 per cent by Applicant and 80 per cent by International Holiday Applicant also has an inactive subsidiary. Chalfen Produc tions, Inc., which will be liquidated prior to consummation of the proposed transaction. 2All banking data are as of June 30, 1976. 3The relevant banking market is approximated by the Min neapolis/St. Paul RMA, including all of Carver County. 692 Federal Reserve Bulletin □ July 1977 on Ice, Inc., New York, New York, a whollyowned indirect subsidiary of Madison Square Gar den Corporation, New York, New York. IHOI is operated subject to the terms and conditions of a joint venture agreement (the “Agreement”) be tween the parties dated June 30, 1965, as amended. Applicant’s 20 per cent interest in IHOI represents an investment of approximately $625,000. IHOI engages in the business of producing and presenting touring ice shows in Europe and South America. It conducts no business in the United States. Appli cant’s principal, a founder of IHOI, was president of IHOI from its establishment in 1965 until 1972. From 1972 until 1975, he served as a consultant to IHOI. Since that time he has not been involved in the operations of IHOI and maintains his 20 per cent interest through Applicant for investment pur poses only. In connection with its application to become a bank holding company, Applicant has applied pursuant to § 4(c)(13) of the Act to retain its interest in IHOI. Section 4(c)(13) of the Act provides that the nonbanking prohibitions of § 4 of the Act shall not apply to the shares of, or activities conducted by, any company which does no business in the United States except as an incident to its international or foreign business, if the Board by regulation or order determines that, under the circumstances and sub ject to the conditions set forth in the regulation or order, the exemption would not be substantially at variance with the purposes of the Act and would be in the public interest. In § 225.4(f)(1) of Regulation Y implementing section 4(c)(13) of the Act, the Board has deter mined that a bank holding company may, with the Board’s consent, own or control voting shares of any company in which a company organized under § 25(a) of the Federal Reserve Act [12 U.S.C. 611] (an Edge Corporation) may invest. Edge Corpora tions are organized for the purpose of engaging in international or foreign banking or other interna tional or foreign financial operations. In keeping with this statutory purpose, it has been Board policy that it is inappropriate for an Edge Corpora tion to acquire a significant ownership interest in a foreign company that is not engaged in international or foreign banking or other international or foreign financial operations. The Board does not believe that an Edge Corporation should engage indirectly in nonfinancial activities abroad that the Board would not otherwise permit an Edge Corporation to engage in directly. In general, the Board considers a significant ownership interest to be any investment representing more than 24 per cent of the foreign com pany’s outstanding voting shares. In the Board’s judgment, once the 25 per cent line is passed, the Edge Corporation or bank holding company usually ceases to be a mere passive inves tor and takes an active operating interest in the company. The Board, however, makes this judg ment on the particular facts of each case. From the facts of record, it is clear that IHOI is not a subsidiary of Applicant for purposes of the Act, that Applicant otherwise does not have a significant operating interest in IHOI, and that Applicant’s investment is purely passive in nature. Accordingly, the only issue presented by this appli cation is a narrow one—whether Applicant’s reten tion of its passive minority investment in IHOI, under the particular circumstance of this applica tion, would not be substantially at variance with the purposes of the Act and would be in the public interest. It is clear that one of the principal purposes of the Act is to separate banking from commerce in order to avoid undue concentration of resources, de creased or unfair competition, conflicts of interests, unsound banking practices or similar adverse ef fects that may derive from the common ownership of banking and commercial enterprises. In the usual case of a U .S. banking organization investing abroad to expand its foreign banking capabilities, the Board, in light of such purpose, would not be disposed to grant its specific consent to an invest ment in a wholly commercial concern such as IHOI where, as in this case, the investment is not incident to a greater banking or financing relationship or transaction. There is, however, no evidence in the record of this application indicating that retention of IHOI by Applicant would result in any effects that would be substantially at variance with the purposes of the Act or that would otherwise be inconsistent with the public interest. The passive noncontrolling nature of Applicant’s investment, its ability under the Agreement to unconditionally re quire that its interest be purchased by the co venturer and its stated intention to do so should the venture become unprofitable, the absence of any existing or proposed credit relationship between Applicant and Bank and IHOI, the unique expertise of Applicant’s principal in IHOI’s activities, and the fact that these activities are conducted wholly outside the United States all combine to indicate that retention of IHOI would involve an insignifi cant amount of risk to Applicant and Bank. In fact, IHOI’s earnings record indicates that it will contribute significantly to Applicant’s ability to service the debt incurred in acquiring Bank, thus minimizing any servicing burden on Bank’s earn ings. It is the Board’s judgment in these unique Law Departm ent circumstances that approval of Applicant’s applica tion to retain its interest in IHOI would not be substantially at variance with the purposes of the Bank Holding Company Act and would be in the public interest. On the basis of the foregoing and all the facts of record, the Board has determined that the con siderations affecting the competitive, banking, and convenience and needs factors under section 3(c) of the Act, and the factors the Board must consider under section 4(c)(13) of the Act in permitting a bank holding company to retain an investment in a foreign company both favor approval of the applica tions. Accordingly, the applications are approved based on the record and for the reasons sum marized above. The acquisition of Bank shall not be made (a) before the thirtieth calendar day following the effective date of this Order or (b) later than three months after the effective date of this Order, unless such period is extended for good cause by the Board or by the Federal Reserve Bank of Minneapolis pursuant to delegated authority. By order of the Board of Governors, effective June 6, 1977. Voting for this action: Chairman Burns and Governors Wallich, Coldwell, Jackson, and Lilly. Absent and not voting: Governors Gardner and Partee. (Signed) G r i f f i t h L. G a r w o o d , [se a l] D eputy Secretary o f the Board. Industrial Loan and Investment Company, S e d a lia , M issou ri Order Approving Formation o f a Bank Holding Company and Continuation o f Industrial Loan Company and Insurance A gency A ctivities Industrial Loan and Investm ent Company, Sedalia, Missouri, has applied for the Board’s ap proval under § 3(a)(1) of the Bank Holding Com pany Act (“Act” ) (12 U.S.C. § 1842(a)(1)) of forma tion of a bank holding company through acquisition of 87.67 per cent of the voting shares of Bank of Ionia, Ionia, Missouri (“ Bank” ). At the same time, Applicant has 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 (12 CFR § 225.4(b)(2)), for permission to continue to engage in the activities of an industrial loan company and to continue to engage in the sale of credit life and credit accident and health insurance directly related to extensions 693 of credit by Applicant. Such activities have been determined by the Board to be closely related to banking (12 CFR § 225.4(a)(2) and (9)). Notice of the applications, affording opportunity for interested persons to submit comments and views, has been given in accordance with §§3 and 4 of the Act (41 Federal R egister 35908). The time for filing comments and views has expired, and the Board has considered the applications and all com ments received in light of the factors set forth in § 3(c) of the Act and the considerations specified in § 4(c)(8) of the Act. Applicant is chartered as an industrial loan com pany under Chapter 368 of the Missouri Revised Statutes and engages in the activity of making small loans. Pursuant to the provisions of State law, Applicant also engages in the business of selling debt instruments in the form of uninsured passbook investment certificates and term investment certifi cates, an activity similar to the deposit-taking activities of a commercial bank.1 Applicant is a relatively small institution (assets of $9.1 million) and operates its sole office in Sedalia, Missouri.2 Bank (deposits of $2.6 million) is the smallest of five banks operating in the War saw banking market, and controls 6.1 per cent (as of December 31, 1975) of the total deposits in com mercial banks in that market.3 Although Applicant and Bank offer some similar services, Applicant does not compete in the Warsaw banking market, and the proposed acquisition would not result in the elimination of any existing competition. Moreover, in view of the relatively small size of Applicant and Bank, it appears that the proposal would not have significant adverse effects upon potential competi tio n , nor would it in c r e a se the c o n c en tra tio n of banking resources. Accordingly, on the basis of the facts of record, the Board concludes that competi tive considerations are consistent with approval of the application to acquire Bank. The financial and managerial resources and fu ture prospects of Applicant and Bank are regarded as satisfactory and consistent with approval of the Although chartered by the State, Applicant at the present time is not subject to any significant regulation or examination by a State regulatory authority. However, upon becoming a bank holding company, Applicant would become subject to the Bank Holding Company Act and supervision and regulation by the Board. In addition, pursuant to section 5(c) of the Act, Applicant would be required to file regular reports with the Board and would be subject to examination. 2Unless otherwise indicated, all banking data are as of December 31, 1976. 3The Warsaw banking market is approximated by Benton County. 694 Federal Reserve Bulletin □ July 1977 application. Although consummation of the pro posed transaction may not result in any immediate benefits to the public, Applicant is substantially larger than Bank and possesses some managerial and technical resources that are unavailable to Bank due to its relatively small size. It is antici pated that the proposed acquisition would provide Bank with access to Applicant’s greater resources and thereby enhance Bank’s ability to improve services to the community. Accordingly, con siderations relating to the convenience and needs of the community to be served lend some weight toward approval of the application. It is the Board’s judgment that consummation of the proposal to form a bank holding company would be in the public interest and the application should be ap proved. In connection with the application to become a bank holding company, Applicant has also applied, pursuant to § 225.4(a)(2) and (9) of Regulation Y, to continue to engage in the activities of an industrial loan company and continue selling credit life and credit accident and health insurance directly related to extensions of credit by the industrial loan com pany.4 Approval of these applications would enable Applicant to acquire Bank, which acquisition is viewed as being in the public interest. Moreover, approval of these applications would serve to as sure the residents of Sedalia and nearby areas of a convenient source of industrial loan and creditrelated insurance services, and the Board views these results as being in the public interest. It does not appear that Applicant’s continuation of these activities would have any significant adverse effects on competition. Furthermore, there is no evidence in the record indicating that consummation of the proposal would result in any undue concentration of resources, unfair competition, conflicts of inter ests, unsound banking practices or other adverse effects on the public interest. Based on the foregoing and other considerations reflected in the record, the Board has determined that the considerations affecting the competitive factors under § 3(c) of the Act and the balance of the public interest factors the Board must consider under § 4(c)(8) of the Act both favor approval of Applicant’s proposals. Accordingly, the applications are approved for the reasons summarized above. The acquisition of 4Applicant is also engaged in leasing activities of a type generally permissible for bank holding companies. Applicant has indicated that upon becoming a bank holding company it would promptly file an application, pursuant to the relevant provisions of Regulation Y, to continue to engage in such leasing activities. Bank shall not be made (a) before the thirtieth calendar day following the effective date of this Order; nor (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 Kansas City pursuant to delegated authority. The determination as to Appli cant’s industrial loan and insurance activities is subject to the conditions set forth in § 225.4(c) of Regulation Y and to the Board’s authority to re quire reports by, and make examinations of, hold ing companies and their subsidiaries and to require such modification or termination of the activities of a bank holding company or any of its subsidiaries as the Board finds necessary to assure compliance with the provisions and purposes of the Act and the Board’s regulations and orders issued thereunder or to prevent evasion thereof. By order of the Board of Governors, effective June 10, 1977. Voting for this action: Chairman Burns and Governors Gardner, Wallich, Coldwell, Jackson, Partee, and Lilly. (Signed) R u t h A. R e i s t e r , [se a l] A ssistan t Secretary o f the Board. Midland Capital Co., Oklahoma City, Oklahoma Order Approving Formation o f Bank Holding Company and Acquisition o f M idland M ortgage Co. Midland Capital Co., Oklahoma City, Oklahoma, has applied for the Board’s approval under § 3(a)(1) of the Bank Holding Company Act (12 U.S.C. § 1842(a)(1)) of formation of a bank holding com pany through acquisition of 100 per cent of the voting shares of Northwest Bank, Oklahoma City, Oklahoma (“ Bank”). 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 the Board’s ap proval to acquire 75 per cent of the voting shares of Midland Mortgage Co., Oklahoma City, Oklahoma (“Mortgage” ), a company principally engaged di rectly and through a wholly owned subsidiary, Johnston-Records Co., in the general business of mortgage banking, including the origination and servicing of conventional, FHA and VA residential and commercial mortgages,1 The mortgage banking activities that Applicant proposes to engage in have Mortgage also currently owns 100 per cent of Midland Property Management Co. and Midland Center Co. These corporations Law Departm ent been determined by the Board to be closely related to banking (12 C.F.R. § 225.4(a)(1)). Notice of the applications, affording opportunity for interested persons to submit comments and views, has been given in accordance with §§3 and 4 of the Act (42 Federal R egister 26247). The time for filing comments and views has expired, and the Board has considered the applications and all com ments received in light of the factors set forth in § 3(c) of the Act and the considerations specified in § 4(c)(8) of the Act. Applicant is a non-operating corporation or ganized for the purposes of becoming a bank hold ing company through the acquisition of Bank and of engaging in the general business of mortgage bank ing through the acquisition of Mortgage. Bank, with deposits of approximately $24.5 million, holds ap proximately 0.2 per cent of total commercial bank deposits in the State and is the 35th largest banking organization in the Oklahoma City market,2 con trolling 0.7 per cent of the total deposits therein. Inasmuch as Applicant has no existing operations, consummation of the proposal insofar as it relates to the acquisition of Bank would have no adverse effects on existing or potential competition. Ac cordingly, the Board concludes that considerations relating to the competitive factors are consistent with approval of the application to become a bank holding company. The financial and managerial resources and fu ture prospects of Applicant, which are dependent upon those of Bank and Mortgage, are considered satisfactory and consistent with approval of the application to become a bank holding company. The debt to be incurred by Applicant appears to be serviceable primarily from dividends to be derived from Bank and Mortgage without having adverse effects on the financial condition of either Bank or Mortgage. Therefore, considerations relating to banking factors are regarded as being consistent with approval. Consummation of the proposed transaction would result in an organization that appears capable of enhancing Bank’s ability to exist solely for the purpose of owning Midland Realty Co., a general partnership that holds title to and operates Midland Center, an office building in downtown Oklahoma City in which Mortgage’s head office is located. Discussion of the acquisition of Midland Center appears infra. 2The relevant market for both banking and the origination of mortgage loans is approximated by the five-county Oklahoma City, Oklahoma SMSA. Within this market there are 76 banks, 15 savings and loan associations, and some of the largest mortgage companies in the country. 695 improve its operating efficiency and thereby be come a stronger competitor within the market. Accordingly, considerations relating to conveni ence and needs are consistent with approval. It is the Board’s judgment that the proposed acquisition of Bank would be in the public interest and that the application to become a bank holding company should be approved. In connection with the application to become a bank holding company, Applicant has also applied for approval to acquire 75 per cent of the outstand ing voting shares of Mortgage, a company that, along with its wholly owned subsidiary, JohnstonRecords Co., engages in the general business of mortgage banking, as described above, at four locations in the Oklahoma City area and in Lawton, Tulsa, and Broken Arrow, Oklahoma; Tucson, Phoenix, and Prescott, Arizona; Houston and San Antonio, Texas; Denver, Colorado Springs, Pue blo, and Canon City, Colorado; and Tustin, California.3 As of July 31, 1976, Mortgage ranked as the 56th largest mortgage servicer in the United States, with a mortgage loan servicing portfolio of $575.5 million. During 1976, it originated in excess of $121 million in residential and commercial loans. Bank and Mortgage are presently under common ownership, Bank having been acquired by a princi pal of Mortgage during the latter half of 1976. Bank and Mortgage both compete in the Oklahoma City market in the origination of mortgage loans on 1-4 family residential properties. During 1976, Mortgage originated $19.5 million of such mortgages while Bank originated $0.4 million. Ap proval of Applicant’s proposal would have some adverse effects on competition in the origination of loans on 1-4 family residential properties in the relevant market, but the Board does not regard such effects as being particularly significant in view of the relatively small market shares (Bank and Mortgage accounted for about three per cent of the 1-4 family mortgage originations) and the large number of competitors within the market. On the other hand, consummation of the proposal whereby Applicant will acquire Bank and Mortgage will result in a well-managed and financially strong 3Prior to July 31, 1976, Mortgage held stock ownership interests in various other companies engaged in certain activities not heretofore deemed permissible for bank holding companies. Through a series of transactions on July 31, 1976, Mortgage divested its ownership interests in all but one of these companies. On April 26, 1977, Mortgage completed its series of planned divestitures through the sale of Midmark Co., a company whose only activity was the shared operation of an airplane that Mortgage uses in connection with its mortgage banking business. 696 Federal Reserve Bulletin □ July 1977 organization with resources capable of providing an increased variety of banking and mortgage ac tivities to the public. The Board regards such results as positive factors in its consideration of the proposal. In addition, with respect to other con siderations, the Board finds no evidence in the record that consummation of the proposal would result in an undue concentration of resources, con flicts of interests, unsound banking practices or other adverse effects upon the public interest. In connection with the application to acquire Mortgage, the Board has also considered Mortgage’s ownership of 100 per cent of the shares of Midland Property Management Co. and Midland Center Co., both of which are essentially inactive corporations that exist for the sole purpose of owning Midland Realty Co., a general partnership that holds title to and operates Midland Center, an office building in downtown Oklahoma City, Ok lahoma, that serves as the head office for Mortgage’s operation. Mortgage currently occupies approximately 18.9 per cent of the total available space in Midland Center with the remainder leased to third parties with an annual rental of approxi mately $600,000. Although Applicant has indicated that it and its subsidiaries ultimately plan to occupy all of the space in Midland Center and that it expects to occupy up to 25 per cent of the building through the establishment of a data processing system for Mortgage’s operation, it is estimated that it will be nine years before the building is at least 50 per cent occupied by Applicant. Based upon these facts and Applicant’s projec tions for the future utilization of Midland Center, the Board is unable to conclude that Applicant’s interest in Midland Center is insignificant or that it should be regarded as “ incidental activi ties . . . necessary to carry on the activities” of Mortgage, within the meaning of § 225.4(a) of Regu lation Y. Accordingly, under § 4(a)(2) of the Act, Applicant is required to dispose of its direct or indirect ownership or control of Midland Center within two years from the date it becomes a bank holding company. Based on the foregoing and other considerations reflected in the record, the Board has determined that the considerations affecting the competitive factors under § 3(c) of the Act and the balance of the public interest factors set forth in § 4(c)(8) of the Act both favor approval of Applicant’s proposed transaction, and that these applications should be approved. The acquisition of Bank shall not be made before the thirtieth calendar day following the effective date of this Order; and neither the acquisition of Bank nor the commencement of the above described mortgage business activities shall be accomplished later than three months after the effec tive date of this Order, unless such period is ex tended for good cause by the Board, or with respect to Bank, by the Federal Reserve Bank of Kansas City pursuant to delegated authority, and, with respect to Mortgage, pursuant to authority hereby delegated. The determination as to Applicant’s proposed non-banking activities is also subject to the conditions set forth in § 225.4(c) of Regulation Y and to the Board’s authority to require such modification or termination of the activities of a holding company or any of its subsidiaries as the Board finds necessary to assure compliance with the provisions and purposes of the Act and the Board’s regulations and orders issued thereunder, or to prevent evasion thereof. By order of the Board of Governors, effective June 30, 1977. Voting for this action: Vice Chairman Gardner and Governors Wallich, Jackson, Partee and Lilly. Absent and not voting: Chairman Burns and Governor Coldwell. (Signed) [s e a l ] G r if f it h L. Garw ood, D eputy Secretary o f the Board. P r io r C e r t if ic a t io n s P u r s u a n t t o t h e B a n k H o ld in g C om p an y T a x A c t o f 1976 American General Insurance Company, Houston, Texas [Docket No. TCR 76-141] American General Insurance Company, Hous ton, Texas (“AG”), has requested a prior certifica tion pursuant to § 1101(b) of the Internal Revenue Code (the “ Code”), as amended by § 2(a) of the Bank Holding Company Tax Act of 1976 (the “Tax Act”), that its proposed divestiture of all of the 2,632,042 nonvoting shares of common stock (the “TCB Shares” ) of Texas Commerce Bancshares, Inc., Houston, Texas (“ TCB” ), presently held by AG,1 through the pro rata distribution of such shares of the holders of common stock of AG, is necessary or appropriate to effectuate the policies JBy Order of April 11, 1972, the Board determined that AG had ceased to be a bank holding company for purposes of the BHC Act. The Board’s determination was conditioned, in part, upon Law Departm ent of the Bank Holding Company Act (12 U.S.C. § 1841 et seq.) (“ BHC Act” ).2 In connection with this request, the following information is deemed relevant, for purposes of issuing the requested certification:3 1. AG is a corporation organized under the laws of the State of Texas on May 8, 1926. 2. AG, directly and through four wholly-owned subsidiaries, acquired ownership or control of a total of 104,363 shares of Texas Commerce Bank, Houston, Texas (“ Bank”), by purchase from unre lated parties prior to December 31, 1967. On Febru ary 28, 1968, AG and its subsidiaries received 9,523 additional shares of Bank’s stock as the result of a stock dividend. On May 17, 1968, AG and 10 of its subsidiaries purchased 807,375 shares, representing approximately 28 per cent of Bank’s stock, from Houston Endowment, Inc. Between February 9, 1968 and March 26, 1969, various subsidiaries of AG acquired additional shares of Bank’s stock by purchase from unrelated parties. Numerous inter company sales among AG’s subsidiaries occurred between May 17, 1968 and May 13, 1974; however, the only purchase of Bank’s stock by AG or its subsidiaries from unrelated parties after July 7, 1970, was 6.0034382 shares acquired on March 4, 1971 to round off fractional shares received by AG and its subsidiaries in connection with the stock dividend of . 1034482 shares of Bank stock for each share of Bank stock outstanding paid by Bank on that date.4 On July 7, 1970, AG, directly and through its subsidiaries, owned or controlled AG exchanging all voting shares of TCB then held by AG for a new class of shares of TCB that would be nonvoting while held by AG. AG was further required to divest of all its nonvoting shares of TCB by December 31, 1980. See 58 Federal Reserve B u l l e t i n 487 (1972). 2By Order of April 14, 1977 (42 Federal Register 20662), the Board approved a plan submitted by AG, whereby AG would divest its interest in TCB through distributions to AG’s common shareholders at a rate of not less than one TCB share for every 100 shares of AG common stock owned. AG has committed to divest itself of all interest in TCB by December 31, 1980. 3This information derives from AG’s correspondence with the Board concerning its request for this certification, AG’s Registra tion Statement filed with the Board pursuant to the BHC Act, and other records of the Board. 4Under subsection (c) of § 1101 of the Code, property acquired after July 7, 1970 generally does not qualify for the tax benefits of § 1101(b) when distributed by an otherwise qualified bank holding company. However, where such property was acquired by a qualified bank holding company in a transaction in which gain was not recognized under § 305(a) of the Code, then § 1101(b) is applicable. AG has indicated that pursuant to § 305(a) of the Code, no gain was recognized as a result of the March 4, 1971 stock dividend declared by Bank in which AG received 98,738 additional shares of Bank’s stock. 697 954,410 shares of Bank’s stock, which represented approximately 34.7 per cent of the outstanding voting shares of Bank. On July 7, 1971, as part of the formation of TCB, Bank was merged into a newly created, wholly-owned subsidiary of TCB. Pursuant to the terms of the merger, holders of Bank’s stock exchanged their Bank stock for com mon stock in TCB on a share-for-share basis.5 On May 30, 1972, pursuant to the previously noted condition of the Board’s Order of April 11, 1972, AG and its subsidiaries exchanged their shares of TCB common stock on a share-for-share basis for new Class B stock in TCB, which is in all respects identical to TCB common stock except that while the Class B stock is held by AG and/or its sub sidiaries the stock has no voting rights. Upon disposition of the Class B stock by AG and its subsidiaries, the transferee has the right to ex change the Class B stock for TCB common stock on a share-for-share basis. AG has indicated that no gain or loss was recognized on the exchange of the TCB common stock for the Class B stock.6 3. AG became a bank holding company on De cember 31, 1970 as a result of the 1970 Amendments to the BHC Act, by virtue of its direct and indirect ownership and control at that time of more than 25 per cent of the outstanding voting shares of Bank, and it registered as such with the Board as a bank holding company on August 23, 1971. AG would have been a bank holding company on July 7, 1970 if the BHC Act Amendments of 1970 had been in effect on such date, by virtue of its direct and indirect ownership and control on that date of more than 25 per cent of the outstanding voting shares of Bank. 4. AG holds property acquired by it on or before July 7, 1970, the disposition of which would be necessary or appropriate to effectuate § 4 of the BHC Act if AG were to continue to be a bank 5In connection with the formation of TCB, a ruling was obtained from the Internal Revenue Service that the transaction whereby TCB acquired control of Bank and Bank’s stockholders ex changed their shares of Bank’s stock for common stock of TCB was a qualified tax-free reorganization pursuant to § 368(a)(1)(A) of the Code. Accordingly, even though the TCB stock was received by AG after July 7, 1970, it nevertheless qualifies as property eligible for the tax benefits provided in § 1101(b) of the Code, by virtue of § 1101(c) of the Code, since it was received in a reorganization described in § 368(a)(1)(A) of the Code and no gain was recognized by AG. 8AG has indicated that for accounting and tax purposes, this exchange of its TCB common stock for Class B stock was treated as a recapitalization under § 368(a)(1)(E) of the Code. Accordingly, even though the Class B stock was acquired by AG after July 7, 1970, it would nevertheless qualify as property eligible for the tax benefits provided in § 1101(b) of the Code, by virtue of § 1101(c), since the Class B stock was received in a transaction described in § 368(a)(1)(E) of the Code in which no gain was recognized. 698 Federal Reserve Bulletin □ July 1977 holding company beyond December 31, 1980, which property is “prohibited property” within the meaning of § 1103(c) of the Code. 5. AG has committed to divest itself of all inter est in TCB by December 31, 1980, and no director, officer or policymaking employee of AG does or will serve in a similar capacity with TCB or any of its subsidiaries. Moreover, no officer, director, or policymaking employee of AG, or a person owning 25 per cent or more of the shares of AG or any combination of such persons, does or will own or control, directly or indirectly, 25 per cent or more of the voting shares of TCB or any of its sub sidiaries. On the basis of the foregoing information, it is hereby certified that: (A) AG is a qualified bank holding corporation, within the meaning of subsection (b) of section 1103 of the Code, and satisfies the requirements of that subsection;7 (B) the shares of TCB that AG proposes to distribute to its shareholders are all or part of the property by reason of which AG controls (within the meaning of § 2(a) of the BHC Act) a bank or a bank holding company ; and (C) the distribution of su.ch shares is necessary or appropriate to effectuate the policies of the BHC Act. This certification is based upon the representa tions made to the Board by AG and upon the facts set forth above. In the event the Board should determine that facts material to this certification are otherwise than as represented by AG, or that AG has failed to disclose to the Board other material facts, it may revoke this certification. By order of the Board of Governors, acting through its General Counsel, pursuant to delegated authority (12 C.F.R. 265.2(b)(3)), effective June 23, 1977. Transohio Financial Corporation, Cleveland, Ohio [Docket No. TCR 76-109] Transohio Financial Corporation, Cleveland, Ohio (“Transohio”), as the successor in interest to Union Financial Corporation, Cleveland, Ohio (“Union”), has requested a prior certification pur suant to § 6158(a) of the Internal Revenue Code (the “ Code”), as amended by § 3(a) of the Bank Holding Company Tax Act of 1976 (the “Tax Act”), that the sale on May 31, 1974, by Union of Port Clinton National Bank (“Bank”), to Union Commerce Corporation, Cleveland, Ohio (“ Com merce”), was necessary or appropriate to effec tuate the policies of the Bank Holding Company Act (12 U.S.C. § 1841 et seq.) (“BHC Act” ). Transohio has also requested a final certification pursuant to § 6158(c)(2) of the Code that Union has (before the expiration of the period prohibited property is permitted under the BHC Act to be held by a bank holding company) ceased to be a bank holding company.1 D eputy Secretary o f the Board. In connection with these requests, the following information is deemed relevant for purposes of issuing the requested certification:2 1. Transohio is a corporation organized under the laws of the State of Delaware on December 22, 1970. Union was a corporation organized under the laws of the State of Ohio on January 25, 1960. 2. Between August 25, 1964, and April 2, 1970, Union acquired ownership and control of 69,534 shares, representing 86.9 per cent of the outstand ing voting shares, of Bank. 3. Union became a bank holding company on December 31, 1970, as a result of the 1970 Amend ments to the BHC Act, by virtue of its ownership and control at that time of more than 25 per cent of the outstanding voting shares of Bank, and it regis tered as such with the Board on September 1, 1971. Union would have been a bank holding company on 7Although the Board determined in 1972 that AG had ceased to be a bank holding company for purposes of the BHC Act, that determination was conditioned upon AG’s divestiture by Decem ber 31, 1980 of the new class of nonvoting shares it was to acquire as another condition of that determination. Accordingly, until all conditions of the Board’s determination have been satisfied, the Board believes that for purposes of the Tax Act AG should be deemed to continue to control TCB, even though the Board has for regulatory purposes treated the conversion of AG’s stock in TCB to nonvoting shares as sufficient basis for relieving AG from the controls of the BHC Act pending final divestiture of those shares. 1Pursuant to §§ 2(d)(2) and 3(e)(2) of the Tax Act, in the case of any sale that takes place on or before December 31, 1976, (the 90th day after the date of the enactment of the Tax Act), the certifica tion described in § 6158(a) shall be treated as made before the sale, and the certification described in § 6158(c)(2) shall be treated as made before the close of the calendar year following the calendar year in which the last such sale occurred, if application for such certification was made before the close of December 31, 1976. Transohio’s application for such certifications was received by the Board on December 10, 1976. 2This information derives from Transohio’s correspondence with the Board concerning its request for this certification, Union’s Registration Statement filed with the Board pursuant to the BHC Act, and other records of the Board. (Signed) G r i f f i t h L. G a r w o o d , [s e a l] Law Departm ent July 7, 1970, if the BHC Act Amendments of 1970 had been in effect on such date, by virtue of its ownership and control on that date of more than 25 per cent of the voting shares of Bank. 4. On May 31, 1974, Union sold 79,358 shares,3 representing 99.2 per cent of the total outstanding voting shares, of Bank to Commerce for cash. 5. On May 31, 1974, Union held property ac quired by it on or before July 7, 1970, the disposi tion of which would, but for the proviso of § 4(a)(2) of the BHC Act, have been necessary or appropri ate to effectuate § 4 of the BHC Act if Union were to have remained a bank holding company beyond December 31, 1980, and which property would, but for such proviso, have been “prohibited property” within the meaning of §§ 6158(f)(1) and 1103(c) of the Code. Section 1103(g) of the Code provides that any bank holding company may elect, for purposes of Part VIII of subchapter 0 of chapter 1 of the Code, to have the determination whether property is “prohibited property” or is property eligible to be distributed without recognition of gain under § 1101(b)(1) of the Code, made under the BHC Act as if such Act did not contain the proviso of § 4(a)(2) thereof. Transohio, as successor to Union, has represented that it will make such an election.4 6. On June 11, 1974, Union and Transohio merged pursuant to the laws of Ohio and Delaware with Transohio continuing as the surviving corpora tion. Pursuant to contract and the laws of Ohio and Delaware, Transohio succeeded to all the properties, assets, and rights and liabilities of Union. 7. Neither Transohio nor any subsidiary of Transohio holds any interest in Bank, Commerce, or any subsidiary of Commerce, or in any other bank or any company that controls a bank. 8. Neither Commerce, nor any subsidiary of Commerce, including Bank, holds any interest in Transohio or any subsidiary of Transohio. 9. No officer, director (including honorary or advisory director) or employee with policy-making functions of Transohio or any subsidiary of Trans ohio also holds any such position with Commerce or any subsidiary of Commerce, including Bank, or with any other bank or any company that owns a bank. 699 10. Transohio does not control in any manner the election of a majority of directors, or exercise a controlling influence over the management or policies, of Commerce, including Bank, or of any other bank or company that controls a bank. On the basis of the foregoing, it is certified that: (A) at the time of its sale of the shares of Bank to Commerce, Union was a qualified bank holding corporation, within the meaning of subsection (b) of section 1103 of the Code, and satisfied the require ments of that subsection; (B) the shares of Bank that Union sold to Com merce were all or part of the property by reason of which Union controlled (within the meaning of § 2(a) of the BHC Act) a bank or bank holding company; (C) the sale of the shares of Bank by Union was necessary or appropriate to effectuate the policies of the BHC Act; (D) Union has (before the expiration of the period prohibited property is permitted under the BHC Act to be held by a bank holding company) ceased to be a bank holding company; and (E) Union has disposed of all banking property. This certification is based upon the representa tions made to the Board by Transohio and upon the facts sets forth above, and is conditioned upon Transohio making the election required by § 1103(g) of the Code at such time and in such manner as the Secretary of the Treasury or his delegate may by regulations prescribe. In the event the Board should hereafter determine that facts material to this certification are otherwise than as represented by Transohio, or that Transohio has failed to disclose to the Board other material facts, it may revoke this certification. By order of the Board of Governors acting through its General Counsel, pursuant to delegated authority (12 CFR § 265.2(b)(3)) effective June 24, 1977. (Signed) R u t h A. R e i s t e r , [s e a l] A ssistan t Secretary o f the B oard . The Wachovia Corporation, Winston-Salem, North Carolina [Docket No. TCR 76-105] 3Of the 79,358 shares of Bank sold by Union on May 31, 1974, 9,824 shares had been acquired by Union after July 7, 1970. 4Section 1103(g) requires that an election thereunder be made “at such time and in such manner as the Secretary [of the Treasury] or his delegate may by regulations prescribe.” As of this date, no such regulations have been promulgated. The Wachovia Corporation, Winston-Salem, North Carolina (“ Wachovia”) has requested a prior certification pursuant to § 6158(a) of the Internal Revenue Code (the “ Code”), as amended by § 3(a) of the Bank Holding Company Tax Act of 1976 (the 700 Federal Reserve Bulletin □ July 1977 “Tax Act” ), that the sale on August 31, 1976 of all the 10 issued and outstanding shares of common stock of North Carolina Title Company, WinstonSalem, North Carolina (“ Title Company” ), held by Wachovia Mortgage Company, Winston-Salem, North Carolina (“ Mortgage” ), a wholly-owned subsidiary of Wachovia, to Chicago Title Insurance Company, Chicago, Illinois (“ Chicago Title” ) for $600,000 cash, was necessary or appropriate to effectuate § 4 of the Bank Holding Company Act (12 U.S.C. § 1843) (“ BHC Act” ).1 In connection with this request, the following information is deemed relevant for purposes of issuing the requested certification:2 1. Wachovia is a corporation organized under the laws of the State of North Carolina on Septem ber 19, 1968 to acquire and hold all the shares of Wachovia Bank and Trust Company, N.A. (“Bank” ). 2. December 31, 1968, Wachovia acquired ownership and control of all of the outstanding voting shares (less directors’ qualifying shares) of Bank. 3. Wachovia became a bank holding company on December 31, 1970, as a result of the 1970 Amend ments to the BHC Act, by virtue of its ownership and control at that time of more than 25 per cent of the outstanding voting shares of Bank, and it regis tered as such with the Board on January 20, 1972. Wachovia would have been a bank holding com pany on July 7, 1970, if the BHC Act Amendments of 1970 had been in effect on such date, by virtue of its ownership and control on that date of more than 25 per cent of the voting shares of Bank. Wachovia presently owns and controls 100 per cent (less directors’ qualifying shares) of the outstanding vot ing shares of Bank. 4. Title Company is a corporation organized under the laws of the State of North Carolina on January 1, 1969, as a wholly-owned sub sidiary of Mortgage. Title Company engaged in the business of acting as agent for the sale of title insurance policies insuring the title to real property, which policies were underwritten by Chicago Title. 1Pursuant to § 3(e)(2) of the Tax Act, in the case of any sale that takes place on or before December 31, 1976 (the 90th day after the date of the enactment of the Tax Act), the certification described in 6158(a) shall be treated as made before the sale, if application for such certification was made before the close of December 31, 1976. Wachovia’s application for such certification was received by the Board on November 19, 1976. 2This information derives from Wachovia’s correspondence with the Board concerning its request for this certification, Wachovia’s Registration Statement filed with the Board pursuant to the BHC Act and other records of the Board. Mortgage is a corporation organized under the laws of the State of North Carolina on January 1, 1969 as a wholly-owned subsidiary of Wachovia. On Au gust 31, 1976 Mortgage owned and controlled 10 shares of common stock, representing 100 per cent of the issued and outstanding voting shares, of Title Company, all of which were acquired by it before July 7, 1970. 5. Wachovia did not file an application with the Board, or otherwise obtain the Board’s approval, pursuant to § 4(c)(8) of the BHC Act to retain the shares of Title Company or engage in the activities carried on by Title Company,3 and the disposition of the shares of Title Company was necessary or appropriate to effectuate § 4 of the BHC Act if Wachovia were to be a bank holding company beyond December 31, 1980. 6. On August 31, 1976, Wachovia and Mortgage sold the shares of Title Company to Chicago Title for cash. On the basis of the foregoing information it is hereby certified that: (A) At the time of the sale by Mortgage of its shares of Title Company, Wachovia was a qualified bank holding corporation, within the meaning of § 6158(f)(1) and subsection (b) of section 1103 of the Code, and satisfied the requirements of that sec tion, and Mortgage was a subsidiary of Wachovia within the meaning of §§ 6158(f)(1), 1103(b)(2)(A) and 1103(a)(1)(B) of the Code and § 2(d) of the BHC Act; (B) The shares of Title Company that Mortgage sold to Chicago Title were “prohibited property” within the meaning of §§ 6158(f)(2) and 1103(c) of the Code; and (C) The sale of the shares of Title Company by Mortgage was necessary or appropriate to effec tuate § 4 of the BHC Act. This certification is based upon the representa tions made to the Board by Wachovia and upon the facts set forth above. In the event the Board should hereafter determine that facts material to this cer tification are otherwise than as represented by Wachovia, or that Wachovia has failed to disclose 3It does not appear that Title Company’s activities would qualify for approval by the Board had an application been filed. Although § 225.4(a)(9) of Regulation Y, 12 CFR § 225.4(a)(9) permitted certain insurance agency activities by bank holding companies, the scope of that provision was narrowed substantially by a decision of the United States Court of Appeals for the Fifth Circuit. Alabama Association of Insurance Agents v. Board of Governors of the Federal Reserve System, 522 F. 2d 224 (1976), vacated in part and modified in part, 544 F. 2d 572 (1977). Law Departm ent 701 to the Board other material facts, it may revoke this certification. authority (12 CFR § 265.2(b)(3)), effective June 17, 1977. By order of the Board of Governors acting through its General Counsel, pursuant to delegated [s e a l ] (Signed) G r if f it h L. Ga r w ood, D eputy Secretary o f the Board. ORDERS APPROVED UNDER BANK HOLDING COMPANY ACT By the B oard of G overnors During June 1977, the Board of Governors approved the applications listed below. The orders have been published in the Federal Register, and copies are available upon request to Publications Services, Division of Administration Services, Board of Governors of the Federal Reserve System, Washington, D.C. 20551. Section 3 Applicant Bank(s) First International Bancshares, Inc., Dallas, Texas Florida Bankshares, Inc., Hollywood, Florida Peoples State Bank of Baytown, Bay town, Texas First National Bank of Sebring, Sebring, Florida Commercial State Bank, Marshall town, Iowa Omaha State Bank, Omaha, Nebraska Hawkeye Bancorporation, Des Moines, Iowa Omaha State Corporation, Omaha, Nebraska B oard action (ieffective d a te) Federal R egister citation 6/15/77 42 F.R. 31635 m in i 6/29/77 42 F.R. 34553 7/6/77 6/17/77 42 F.R. 31838 6/23/77 6/17/77 42 F.R. 30537 6/15/77 Sections 3 and 4 A pplicant Bank(s) Krey Co. Ltd., Pratt, Kansas Peoples Bank, Pratt, Kansas Nonbanking company (or activity) Consumer finance and insur ance agency activities Reserve Bank Effective date Kansas City 6/3/77 Federal R egister citation 42 F.R. 29343 6/8/77 702 Federal Reserve Bulletin □ July 1977 PENDING CASES INVOLVING THE BOARD OF GOVERNORS* BankAmerica Corporation v. Board o f G overnors , Memphis Trust Com pany v. Board o f G overnors , filed May 1977, U.S.D.C. for the Northern Dis trict of California. BankAmerica Corporation v. Board o f G overnors , filed May 1977, U.S.C.A. for the Ninth Circuit. First Security Corporation v. Board o f G overnors , filed March 1977, U.S.C.A. for the Tenth Cir cuit. Farmers State Bank o f Crosby v. Board o f G over nors, filed January 1977, U.S.C.A. for the Eighth Circuit. N ational Autom obile D ealers Association, Inc. v. Board o f G overnors , filed November 1976, U.S.C.A. for the District of Columbia. First Security Corporation v. Board o f G overnors , filed August 1976, U.S.C.A. for the Tenth Cir cuit. Central Wisconsin Bankshares, Inc. v. Board o f G overnors , filed June 1976, U.S.C.A. for the Seventh Circuit. N ational Urban League, et al. v. Office o f the Comptroller o f the Currency, et al., filed April 1976, U.S.D.C. for the District of Columbia Circuit. filed February 1976, U .S.D.C. for the Western District of Tennessee. First Lincolnwood Corporation v. Board o f G over n o rs , filed February 1976, U.S.C.A. for the Seventh Circuit. Roberts Farm, Inc. v. Com ptroller o f the Currency, et a l., filed November 1975, U.S.D.C. for the Southern District of California. Florida Association o f Insurance Agents, Inc. v. Board o f G overnors , and National Association of Insurance Agents, Inc. v. Board of Gover nors, filed August 1975, actions consolidated in U.S.C.A for the Fifth Circuit. t XDavid R. M errill , et al. v. Federal Open M arket Com mittee o f the F ederal R eserve System , filed May 1975, U.S.D.C. for the District of Colum bia, appeal pending, U .S.D.A. for the District of Columbia. Louis J. Roussel v. Board o f G overnors, filed April 1975, U.S.D.C. for the Eastern District of Louisiana. Georgia Association o f Insurance A gents, et al. v. Board o f G overnors , filed October 1974, U.S.C.A. for the Fifth Circuit. Alabama Association o f Insurance Agents, et al. v. Board o f G overnors , filed July 1974, U.S.C.A. for the Fifth Circuit. Bankers Trust N ew York Corporation v. Board o f G overnors , filed May 1973, U.S.C.A. for the Second Circuit. Farmers & M erchants Bank o f Las Cruces, N ew Mexico v. B oard o f G overnors , filed April 1976, U.S.C.A. for the District of Columbia Circuit. Grandview Bank & Trust Company v. Board o f G overnors , filed March 1976, U.S.C.A. for the Eighth Circuit. Association o f Bank Travel Bureaus, Inc. v. Board o f G overnors , filed February 1976, U.S.C.A. for the Seventh Circuit. *This list of pending cases does not include suits against the Federal Reserve Banks in which the Board of Governors is not named a party. tDecisions have been handed down in these cases, subject to appeals noted. tThe Board of Governors is not named as a party in this action. 703 Announcements REGULATION J: Amendment The Board of Governors of the Federal Reserve System has amended Regulation J (Collection of Checks and Other Items by Federal Reserve Banks) by adding a new section concerning the wire transfer of funds between member banks. The new part of Regulation J is designated Sub part B. It codifies rules and procedures evolved by the Federal Reserve System since it began wire transfer of funds in 1915, and puts the rules into regulatory form. The existing Regulation J rules for check collection remain unchanged and become Subpart A of the regulation. The wire transfer service of the Federal Reserve utilizes the System’s computerized communica tions network linking the Board and all Federal Reserve Banks and their offices, to allow member banks to transfer funds almost instantly from their reserve balances to the reserve accounts of other member banks, for their own account or for a customer. The most frequent use of this service is for the transfer of excess reserves of member banks to banks needing additional reserves and the trans fer of funds for corporations. The use of wire transfer has risen during the past 10 years from $6.6 trillion in 1967 to $35 trillion in 1976. The greatly increased use of the System’s wire transfer services led the Board to conclude that it should put rules now contained in Reserve Bank operating circulars into regulatory form, clarifying the duties and responsibilities of partici pants using the System’s wire transfer facilities. Subpart B covers only wire transfer of funds and does not touch on other electronic payments such as those processed through automated clearing houses (where payments instructions recorded on magnetic tape, rather than on checks, are cleared) or point-of-sale transactions (in which electronic means are used for verification of checks, or to charge customers’ bank accounts for their pur chases of goods or services). The wire transfer rules adopted by the Board are a revision from proposed wire transfer rules the Board had published in November 1973 and repub lished in revised form in January 1976. The rules as adopted reflect Board consideration of hundreds of comments received on its proposals. A third subpart to Regulation J is in preparation. It will deal with the processing of payments recorded on magnetic tape by using Federal Re serve facilities. The Board had included such draft rules in its January 1976 proposal concerning elec tronic payments. INTERPRETATION The Board of Governors has ruled that State laws making contracts enforceable against married people at a younger age than against those who are not married do not conflict with the Equal Credit Opportunity Act. Creditors may, therefore, act according to such laws in making credit decisions without violating the Equal Credit Opportunity Act or the Board’s Regulation B. The Board made its ruling in response to in quiries whether sections of Alabama and Nevada laws (Alabama Code 34, Sections 76 and 76(1) and Nevada Revised Statute 38, Section 101) are incon sistent with—and are therefore pre-empted by—the Federal law. Both of the State laws establish a younger age of majority for persons who are married than for unmarried persons. The Board determined that this does not conflict with provisions of the Equal Credit Opportunity Act and Regulation B making it illegal to discriminate in granting credit on the basis of age or marital status. CHANGES IN BOARD STAFF The Board of Governors has announced the follow ing organizational changes and staff promotions and appointments: William H. Wallace, Director, Division of Fed eral Reserve Bank Examinations and Budgets, has been named Staff Director for Federal Reserve Bank 704 Federal Reserve Bulletin □ July 1977 Activities, effective June 20, 1977. He will have responsibility for overseeing the Divisions of Fed eral Reserve Bank Operations and Federal Reserve Bank Examinations and Budgets. Edwin M. Truman, Associate Director of the Division of International Finance, has been ap pointed Director of the division, effective June 20, 1977. John E. Reynolds, Acting Director, has been named Counselor to the Division of International Finance, effective June 20, 1977. Robert F. Gemmill, Senior International Division Officer, has been named Associate Director of the Division of International Finance, effective June 20, 1977. George B. Henry, Senior International Division Officer, has been appointed Associate Director of the Division of International Finance, effective June 20, 1977. Charles J. Siegman, Senior International Division Officer, has been appointed Associate Director of the Division of International Finance, effective June 20, 1977. John E. Ryan, Acting Director of the Division of Banking Supervision and Regulation, has been named Director of that division, effective June 20, 1977. Frederick C. Schadrack, Vice President for Bank Supervision at the Federal Reserve Bank of New York, will be on loan to the Board to serve as Deputy Director of the Division of Banking Super vision and Regulation, effective August 1, 1977. Mr. Schadrack has been on the staff of the Federal Reserve Bank of New York since 1960. Frederick R. Dahl, Assistant Director of the Division of Banking Supervision and Regulation, has been named Associate Director of that divi sion, effective June 20, 1977. Don E. Kline has been appointed Assistant Di rector of the Division of Banking Supervision and Regulation, effective June 20, 1977. Mr. Kline, who joined the Board’s staff in 1963, holds a B.S. degree from Juniata College, Huntingdon, Pennsylvania, and graduated from the Stonier Graduate School of Banking at Rutgers University. William Taylor has been appointed Assistant Director of the Division of Banking Supervision and Regulation, effective June 20, 1977. Mr. Taylor has been with the Board since 1976. He has a B.A. degree from Cornell College, Mt. Vernon, Iowa, and was on the staff of the Federal Reserve Bank of Chicago from 1961-69. PROPOSED BHC ACTIVITY The Board of Governors has decided to take under consideration proposals by four bank holding com panies to have a subsidiary engage in the business of acting as a futures commission merchant to execute futures contracts covering gold and silver bullion and coins. The deadline for comments was July 13, 1977. SYSTEM MEMBERSHIP: Admission of State Bank The following State bank was admitted to member ship in the Federal Reserve System during the period June 16, 1977, through July 15, 1977: Ohio Columbus ..................Columbus Trust Company 705 Industrial Production R eleased fo r publication July 15 Industrial production in June increased by an esti mated 0.7 per cent, following gains of 1.0 per cent in May and 0.7 per cent in April. Automotive products, business equipment, and durable goods materials contributed substantially to the June ad vance, while output of nondurable consumer goods and nondurable goods materials was little changed over the month. Industrial production rose at about a 12Vi per cent annual rate between the first and second quarters, after a weatherdamped 5.3 per cent annual rate of increase for the first quarter. rials continued to increase rapidly. Iron and steel output rose further but at a slower rate than that of the previous 3 months. Seasonally adjusted, ratio scale, 1967 = 10 0 Auto assemblies rose about 5Vi per cent from May to a 9.7-million-unit annual rate in June, con tributing significantly to the sharp rise in output of durable consumer goods. Production of busi ness equipment continued to advance strongly, rising 1.5 per cent in June and at about an 18 per cent annual rate for the second quarter as a whole. Output of home goods and nondurable consumer goods rose slightly in June. Production of nondurable goods materials was about unchanged in June, but durable goods mate F.R. indexes, seasonally adjusted. Latest figures: June. *Auto sales and stocks include imports. Seasonally adjusted, 1967 = 100 Per cent changes from— Industrial production 1977 Mar. Apr. Mayp Junep Month ago Total ............................................................................. 135.2 136.2 137.6 138.6 Products, total .................................................................... Final products ................................................................ Consumer goods ....................................................... Durable goods ....................................................... Nondurable goods ................................................... Business equipment ................................................. Intermediate products ................................................... Construction supplies ............................................... Materials ............................................................................. 134.9 133.0 142.8 152.4 139.0 144.5 141.9 136.4 135.5 136.2 134.4 143.6 152.0 140.3 147.0 142.8 137.4 136.4 137.2 135.3 143.9 152.6 140.4 149.3 144.6 139.6 137.9 138.3 136.3 144.7 155.2 140.7 151.6 145.8 141.1 138.9 pPreliminary. Estimated. Year ago Q1 to Q2 .7 6.5 3.0 .8 .7 .6 1.7 .2 1.5 .8 1.1 .7 6.8 6.8 5.0 7.6 4.1 12.3 7.3 7.1 5.9 2.4 2.6 2.0 3.7 1.3 4.3 1.8 2.4 3.6 A 1 Financial and Business Statistics CONTENTS DOMESTIC FINANCIAL STATISTICS W A3 A4 A5 Assets and Liabilities of— A20 All reporting banks A21 Banks in New York City A22 Banks outside New York City A23 Balance sheet memoranda A24 Commercial and industrial loans A6 Monetary aggregates and interest rates Factors affecting member bank reserves Reserves and borrowings of member banks Federal funds transactions of money market banks A8 Federal Reserve Bank interest rates A9 Member bank reserve requirements A 10 Maximum interest rates payable on time and savings deposits at Federally insured institutions A 10 Margin requirements A 11 Federal Reserve open market transactions F ed er a l R eser ve B a n k s A12 Condition and F.R. note statements A13 Maturity distribution of loan and secu rity h o ld in g s and C r e d it A F in a n c ia l M arkets A25 Commercial paper and bankers acceptances outstanding A26 Prime rate charged by banks on short-term business loans A26 Interest rates charged by banks on business loans A27 Interest rates in money and capital markets A28 Stock market— Selected statistics ggregates ssets a n d L ia b il it ie s A 16 Last-Wednesday-of-month series A17 Call-date series A18 Detailed balance sheet, Dec. 31, 1976 anks A29 Savings institutions— Selected assets and liabilities A13 Demand deposit accounts— Debits and rate of turnover A 14 Money stock measures and components A15 Aggregate reserves and deposits of member banks A 15 Loans and investments of all commercial banks C o m m e r c ia l B a n k A R e p o r t in g C o m m e r c ia l B A25 Gross demand deposits of individuals, partnerships, and corporations P o l ic y I n s t r u m e n t s M onetary eek ly F e d e r a l F in a n c e A30 Federal fiscal and financing operations A31 U.S. Budget receipts and outlays A32 Federal debt subject to statutory limitation A32 Gross public debt of U.S. Treasury— Types and ownership A33 U.S. Government marketable securities— Ownership, by maturity A34 U.S. Government securities dealers— Transactions, positions, and financing A35 Federal and Federally sponsored credit agencies— Debt outstanding A2 Federal Reserve Bulletin □ July 1977 S e c u r it ie s M arkets a n d C o r po ra te F in a n c e A36 New security issues— State and local government and corporate A37 Corporate securities— Net change in amounts outstanding A37 Open-end investment companies— Net sales and asset position A38 Corporate profits and their distribution A38 Nonfinancial corporations— Assets and liabilities A38 Business expenditures on new plant and equipment A39 Domestic finance companies— Assets and liabilities; business credit R ea l E sta te A40 Mortgage markets A41 Mortgage debt outstanding INTERNATIONAL STATISTICS A54 U.S. international transactions— Summary A55 U.S. foreign trade A55 U.S. reserve assets A56 Selected U.S. liabilities to foreigners and to foreign official institutions R epo rted A57 A59 A60 A61 B anks by Short-term Long-term Short-term Long-term in the U n it e d S tates: liabilities to foreigners liabilities to foreigners claims on foreigners claims on foreigners A62 Foreign branches of U.S. banks— Balance sheet data S e c u r it ie s H o l d in g s and T r a n s a c t io n s A42 Total outstanding and net change A43 Extensions and liquidations A64 Marketable U.S. Treasury bonds and notes— Foreign holdings and transactions A64 Foreign official accounts A65 Foreign transactions in securities Flow R epo rted C o n s u m e r I n s t a l m e n t C r e d it of Funds the A44 Funds raised in U.S. credit markets A45 Direct and indirect sources of funds to credit markets DOMESTIC NONFINANCIAL STATISTICS A46 Nonfinancial business activity— Selected measures A46 Output, capacity, and capacity utilization A47 Labor force, employment, and unemployment A48 Industrial production A50 Housing and construction A51 Consumer and wholesale prices A52 Gross national product and income A53 Personal income and saving U N by n it e d o n b a n k in g Concerns in S ta tes: A66 Short-term liabilities to and claims on foreigners A67 Long-term liabilities to and claims on foreigners In t e r e s t and E x c h a n g e R ates A68 Discount rates of foreign central banks A68 Foreign short-term interest rates A68 Foreign exchange rates SPECIAL TABLE A69 Sales, revenue, profits, and dividends of large manufacturing corporations INSIDE BACK COVER Guide to Tabular Presentation and Statistical Releases Domestic Financial Statistics A3 1.10 MONETARY AGGREGATES AND INTEREST RATES 1976 1977 1977 Item Q3 Q4 Q2 Ql Feb. M ar. Apr. M ay June M onetary and credit aggregates (annual rates of change, seasonally adjusted in per cent)1 Member bank reserves 1 2 3 4 Total.................................................................... R equired........................................................................ N onborrow ed.................................................. ............ Concepts of money 1 M -l...................................................................... 2.7 2 .4 2.6 4.4 4 .0 4.8 2.7 3.0 2.6 -13.1 -10.9 -13.3 -3 .1 -3 .8 -4 .3 13.0 13.9 14.1 1.5 0.9 -3 .1 5 6 M -2 ................................................................................ M -3 ................................................................................ 4.4 9.1 11.4 r6 .5 M 2.5 r 14.4 r4.2 r9.9 r 11. 3 0 .8 HA r8.9 '5 .4 r8 .6 '9 .4 M 9.4 M 3.5 M 2.4 '0 .7 r4.7 r7.2 7 8 9 Time and savings deposits Commercial banks: T o ta l.......................................................................... Other than large C D ’s ............................................ Thrift institutions 2 ..................................................... 7 .0 12.8 14.8 M2.2 r 17 .1 17.3 M2.5 M 4.0 13.4 M 0.7 M l.7 M l.7 r6 . 7 M 0.7 M 0.9 r6 .9 r9 . 5 M 0.5 r8 .3 r7 .6 M 0.9 10 Total loans and investments at commercial banks 3 6.9 10.8 14.7 10.0 10.3 Interest rates (levels, per cent per annum) 11 12 13 14 Short-term rates Federal funds 4 ......................................... Treasury bills (3-month m arket yield) 5 Commercial paper (90- to 119-day) 6 .. Federal Reserve discount 7..................... 5.28 5.15 5.41 5.50 4.88 4.67 4.91 5.39 4.66 3.63 4.74 5.25 5.16 4.84 5.15 5.25 4.68 4.67 4.76 5.25 4.69 4.60 4.75 5.25 4.73 4.54 4.75 5.25 5.35 4.96 5.26 5.25 5.39 5.02 5.42 5.25 15 16 17 Long-term rates B onds: U.S. Govt. 8 ........................................... State and local government 9 ............ Aaa utility (new issue) i o ................... 7.90 6.64 8.48 7.54 6.18 8.15 7.62 5.88 8.17 7.68 5.70 7.64 5.89 8.22 7.74 5.89 8.25 7.67 5.73 8.26 7.74 5.75 8.33 7.64 5.62 8.21 18 Conventional mortgages 11.................... 9.03 8.95 8.82 8.80 8.85 8.90 8.95 1 M -l equals currency plus private demand deposits adjusted. M-2 equals M -l plus bank time and savings deposits other than large negotiable C D ’s. M-3 equals M-2 plus deposits at m utual savings banks, savings and loan associations, and credit union shares. 2 Savings and loan associations, mutual savings banks, and credit unions. 3 Quarterly changes calculated from figures shown in Table 1.23. 4 Seven-day averages o f daily effective rates (average o f the rates on a given date weighted by the volume o f transactions at those rates). 5 Quoted on a bank-discount rate basis. 6 M ost representative offering rate quoted by five dealers. 7 Rate for the Federal Reserve Bank of New York. 8 M arket yields adjusted to a 20-year maturity by the U.S. Treasury. 9 Bond Buyer series for 20 issues of mixed quality. I o Weighted averages of new publicly offered bonds rated Aaa, Aa, and A by M oody’s Investors Service and adjusted to an Aaa basis. Federal Reserve compilations. II Average rates on new commitments for conventional first mortgages on new homes in primary markets, unweighted and rounded to nearest 5 basis points, from Dept, o f Housing and Urban Development. 12 Unless otherwise noted, rates o f change are calculated from average amounts outstanding in preceding m onth or quarter. A4 Domestic Financial Statistics □ July 1977 1.11 FACTORS AFFECTING MEMBER BANK RESERVES Millions o f dollars M onthly averages o f daily figures Weekly averages o f daily figures for weeks ending— 1977 1977 Factors Apr. May June? M ay 18 M ay 25 June 1 June 8 June 15 June? 22 June? 29 SU PPLY IN G RESERVE FU N D S 108,558 112,694 109,450 112,988 111,751 109,165 104,434 103,365 111,543 117,235 U.S. Govt, securities1.................... Bought outright......................... Held under repurchase agree ment ......................................... Federal agency securities............. Bought outright......................... Held under repurchase agree ment ......................................... 95,316 94,534 99,023 97,000 95,337 94,132 99,334 97,263 98,491 96,707 96,431 96,312 90.899 90.899 90.289 90.289 97,194 96,244 101,992 98,359 782 6,813 6,766 2,023 7,259 7,077 1,205 7,312 7,176 2,071 7,357 7,077 1,784 7,275 7,077 119 7,078 7,077 7.077 7.077 7.059 7.059 950 7,165 7,110 3,633 7,878 7,436 47 182 136 280 198 1 55 442 Acceptances.................................... L o an s............................................... F lo a t................................................. Other Federal Reserve assets. . . 284 73 2,992 3,080 489 200 2,773 2,950 228 261 3,430 2,882 520 127 2,643 3,007 409 311 2,708 2,556 66 230 2,497 2,862 56 226 3,502 2,675 52 223 2,979 2,762 203 271 3,802 2,906 565 334 3,446 3,020 Gold stock.......................................... Special Drawing Rights certificate account........................................ 14 Treasury currency outstanding____ 11,636 11,632 11,628 11,633 11,629 11,629 11,629 11,629 11,629 11,626 1,200 11,010 1,200 11,056 1,200 11,099 1,200 11,055 1,200 11,069 1,200 11,066 1,200 11,083 1,200 11,091 1,200 11,110 1,200 11,113 94,295 452 94,968 442 96,029 437 95,152 440 94,888 438 95,394 433 95,933 433 96,146 434 95,993 440 95,951 441 7,369 294 633 10,997 322 559 7,057 277 675 10,862 365 525 10,505 263 548 6,932 321 822 3,300 279 559 1,320 287 715 8,690 261 600 14,058 259 628 1 Reserve Bank credit outstanding.. . 2 3 4 5 6 7 8 9 10 11 12 13 ABSORBING RESERVE FU N D S 15 16 Currency in circulation..................... Treasury cash holdings.................... Deposits, other than member bank reserves with F.R. B anks: 17 Treasury.......................................... 18 Foreign............................................ 19 Other 2.............................................. 20 21 Other F.R. liabilities and cap ital. . . M ember bank reserves with F.R. B anks............................................... SU PPLY IN G RESERVE FU N D S 3,266 3,324 3,260 3,281 3,375 3,476 3,012 3,125 3,289 3,525 26,096 25,970 25,643 26,251 25,632 25,681 24,831 25,258 26,209 26,315 End-of-month figures W ednesday figures 1977 1977 Apr. May Junep May 18 M ay 25 June 1 June 8 June 15 June*’ 22 June** 29 22 Reserve Bank credit outstanding. .. 114,406 111,838 117,311 112,369 109,586 110,286 101,784 105,657 115,631 117,349 23 24 25 U.S. Govt, securities1..................... Bought o u trig h t........................ Held under repurchase agree m ent ........................................ Federal agency securities............... Bought o u trig h t......................... Held under repurchase agree m ent ......................................... 99,967 97,993 97,394 96,560 102,239 98,163 98,162 97,043 95.906 95.906 95.252 95.252 87.309 87.309 90.720 90.720 99,451 96,709 101,864 98,310 1,974 7,201 7,077 834 7,087 7,077 4,076 8,033 7,423 1,119 7,353 7,077 7.077 7.077 7.077 7.077 7.077 7.077 7.056 7.056 2,742 7,680 7,436 3,554 7,778 7,436 124 10 610 276 244 342 29 30 31 32 Acceptances.................................... L o a n s............................................... F lo a t................................................. O ther Federal Reserve assets. . . 881 379 2,735 3,243 108 400 3,993 2,856 621 258 3,238 2,922 358 211 3,531 2,754 60 451 3,404 2,688 58 222 3,660 4,017 54 767 3,901 2,676 49 974 4,005 2,853 399 1,212 3,906 2,983 456 605 3,664 2,982 33 34 Gold sto ck .......................................... Special Drawing Rights certificate account............................................ Treasury currency o u tsta n d in g ... . 11,636 11,629 11,620 11,629 11,629 11,629 11,629 11,629 11,629 11,620 1,200 10,984 1,200 11,026 1,200 11,116 1,200 11,058 1,200 11,073 1,200 11,073 1,200 11,083 1,200 11,096 1,200 11,112 1,200 11,116 93,960 439 95,606 433 96,685 443 95,223 440 95,242 433 96,018 429 96,343 432 96,318 435 96,116 441 96,678 441 13,628 305 591 5,838 436 831 15,183 379 748 10,848 279 536 9,044 274 713 4,946 325 1,996 2,723 293 554 1,228 344 657 12,958 250 631 16,115 287 592 26 27 28 35 A BSORBING RESERVE FU N D S 36 37 Currency in circulation.................... Treasury cash holdings..................... Deposits, other than m ember bank reserves with F.R . B anks: 38 Treasury.......................................... 39 Foreign............................................ 40 Other 2.............................................. 41 42 O ther F.R. liabilities and cap ital. . M ember bank reserves with F.R. B anks............................................... 3,528 3,539 3,616 3,296 3,425 3,517 3,011 3,173 3,348 3,526 25,773 29,009 24,194 25,635 24,357 26,956 22,340 27,427 25,829 23,647 1 Includes securities loaned—fully guaranteed by U.S. Govt, securities pledged with F.R. Banks—and excludes (if any) securities sold and sched uled to be bought back under matched sale-purchase transactions. 2 Includes certain deposits o f foreign-owned banking institutions voluntarily held with member banks and redeposited in full with Federal Reserve Banks. N ote .— For amounts of currency and coin held as reserves, see Table 1.12. Member Banks A5 1.12 RESERVES AND BORROWINGS Member Banks Millions o f dollars Monthly averages of daily figures Reserve classification 1975 1977 1976 Dec. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May JuneP All member banks R eserves: At F.R. B anks................... Currency and c o in ........... Total held1......................... R equired......................... Excess1........................... Borrowings at F.R . B anks:2 T o ta l.................................... Seasonal.............................. 27,215 7,773 34,989 34,727 262 26,127 8,025 34,305 34,116 189 26,458 8,180 34,797 34,433 364 26,430 8,548 35,136 34,964 172 27,229 8,913 36,290 35,796 494 25,725 8,326 34,199 34,234 -3 5 25,849 8,134 34,135 33,870 265 26,096 8,368 34,613 34,602 11 25,970 8,610 34,732 34,460 272 25,643 8,610 34,401 34,291 110 127 13 66 32 84 21 62 12 61 8 79 12 110 13 73 14 200 31 261 54 8 9 10 11 Large banks in New York City Reserves held............................ R equired............................... Excess.................................... Borrowings2............................. 6,812 6,748 64 63 6,374 6,346 28 6,589 6,485 104 36 6,520 6,602 -8 2 15 7,076 6,948 128 6 6,442 6,537 -9 5 47 6,331 6,259 72 44 6,264 6,351 -8 7 16 6,310 6,279 31 18 6,175 6,188 -1 3 36 12 13 14 15 Large banks in Chicago Reserves held............... R equired................... Excess....................... Borrowings2................. 1,740 1,758 -1 8 1,648 1,635 13 3 1,621 1,602 19 1,632 1,641 —9 4 1,731 1,698 33 2 1.624 1.624 1,610 1,611 -1 3 1,629 1,634 -5 * 1,637 1,634 3 4 1,601 1,626 -2 5 15 16 17 18 19 Other large banks Reserves held. . . R equired........ Excess............. Borrowings2. . . . 13,249 13,160 89 26 12,704 12,706 -2 17 12,889 12,802 87 7 13,117 13,053 64 14 13,556 13,427 129 25 12,683 12,765 -8 2 4 12,779 12,705 74 29 13,090 13,110 -2 0 23 13,067 12,996 71 62 12,790 12,938 -1 4 8 79 20 21 22 23 All other banks Reserves held. R equired... Excess........ Borrowings2.. 13,188 13,061 127 38 13,579 13,429 150 46 13,698 13,544 154 41 13,867 13,668 199 29 13,927 13,723 204 28 13,450 13,308 142 28 13,415 13,295 120 34 13,630 13,507 123 34 13,718 13,551 167 116 13,630 13,5*39 91 131 Weekly averages o f daily figures for weeks ending— 1977 Apr. 27 M ay 4 May 11 May 18 May 25 June 1 June 8 June 15 All member banks Reserves: A t F.R. B anks................... Currency and c o in ........... Total heldi ......................... Required......................... Excess1........................... Borrowings at F.R. B anks:2 29 T o ta l.................................... 30 Seasonal.............................. 26,746 8,341 35,240 35,076 164 26,786 8,892 35,831 35,529 302 25,527 8,998 34,678 34,632 46 26,251 8,543 34,946 34,728 218 25,632 8,149 33,933 33,798 135 25,681 8,585 34,418 34,009 409 24,831 8,751 33,734 33,701 33 25,258 8,695 34,104 33,858 246 26,209 8,364 34,720 34,616 104 26,315 8,624 35,086 34,916 170 99 15 215 19 156 21 127 29 311 35 230 45 226 52 223 48 271 51 334 68 31 32 33 34 Large banks in New York City Reserves held......................... R equired............................. Excess.................................. Borrowings2........................... 6,259 6,290 -3 1 34 6,516 6,467 49 54 6,299 6,307 -8 25 6,454 6,432 22 5,988 6,034 -4 6 27 6,312 6,227 85 9 6,042 6,099 -5 7 83 6,118 6,065 53 16 6,165 6,231 -6 6 57 6,368 6,316 52 35 36 37 38 Large banks in Chicago Reserves held......................... Required............................. Excess.............................. Borrowings2........................... 1,629 1,621 8 1 1,732 1,699 33 1,595 1,625 -3 0 1,728 1,706 22 18 1,559 1,568 -9 1,670 1,594 76 1,578 1,594 -1 6 1,627 1,629 -2 49 1,511 1,651 -1 4 0 14 1,516 1,636 -1 2 0 39 40 41 42 Other large banks Reserves held.......................... Required............................. Excess.................................. Borrowings2........................... 13,407 13,339 68 27 13,526 13,470 56 88 13,093 13,140 -4 7 51 13,129 13,107 22 31 12,757 12,680 77 111 12,804 12,749 55 62 12,664 12,678 -1 4 51 12,864 12,828 36 74 13,023 13,059 -3 6 69 13,047 13,176 -1 2 9 125 43 44 45 46 All other banks Reserves held.......................... R equired............................. Excess.................................. Borrowings2........................... 13,945 13,826 119 37 14,057 13,893 164 73 13,691 13,560 131 80 13,635 13,483 152 78 13,629 13,516 113 173 13,632 13,439 193 159 13,450 13,330 120 92 13,495 13,336 159 84 13,783 13,675 108 131 13,881 13,788 93 209 24 25 26 27 28 June 22 p June 29 *> 1 Adjusted to include waivers o f penalties for reserve deficiencies in nonmember bank joins the Federal Reserve System. For weeks for which accordance with Board policy, effective Nov. 19, 1975, of permitting figures are preliminary, figures by class o f bank do not add to total transitional relief on a graduated basis over a 24-month period when a because adjusted data by class are not available. nonmember bank merges into an existing member bank, or when a 2 Based on closing figures. A6 Domestic Financial Statistics □ July 1977 1.13 FEDERAL FUNDS TRANSACTIONS of Money Market Banks Millions o f dollars, except as noted 1977, week ending W ednesday- Type M ay 4 M ay 11 May 18 June 1 May 25 June 8 June 15 June 22 June 29 Total, 46 banks 1 Basic reserve position Excess reserves1........................... 142 -2 0 64 54 164 -2 0 68 17 36 107 31 18 62 19 87 105 96 51 15,076 18,142 16,727 14,942 13,970 18,101 17,921 16,742 12,789 -1 5 ,0 4 2 -1 8 ,1 9 3 -1 6 ,6 8 1 -1 4 ,9 4 9 -1 3 ,8 2 5 -1 8 ,2 0 8 -1 7 ,9 5 8 -1 6 ,8 2 1 -1 2 ,8 0 4 98.1 121.7 110.1 104.5 94.6 125.7 123.4 113.2 85.5 24,040 8,963 5,589 25,762 7,620 5,026 24,063 7,336 5,227 22,870 7,929 5,619 21,749 7,779 5,391 24,451 6,350 4,711 23,993 6,072 4,732 24,407 7,665 5,462 21,551 8,763 5,170 18,450 3,374 20,736 2,594 18,836 2,110 17,251 2,309 16,358 2,389 19,740 1,639 19,261 1,340 18,945 2,203 16,381 3,593 2,899 2,029 870 2,914 2,091 822 2,857 2,327 530 2,930 2,770 160 2,909 1,707 1,202 5,462 2,187 3,274 4,593 1,968 2,625 2,895 1,733 1,162 1,905 2,235 -3 2 9 -1 8 40 -5 71 83 16 57 L ess: 2 3 4 5 Borrowings at F.R. B anks. . . N et interbank Federal funds transactions....................... E q u a l s : N et surplus, or deficit ( —): A m o u n t...................................... Per cent o f average required reserves............................... Interbank Federal funds transactions Gross transactions: Purchases....................................... Sales................................................. Two-way transactions2................... N et transactions: Purchases o f net buying b a n k s.. Sales o f net selling b a n k s............ 11 12 13 Related transactions with U.S. Govt, securities dealers Loans to dealers3................... Borrowing from dealers4 . . . N et loans.................................. 8 banks in New Y ork City 14 Basic reserve position Excess reserves1.................................. L ess: 15 16 17 18 Borrowings at F.R . Banks. . N et interbank Federal funds transactions............................. E q u a l s : N et surplus, or deficit ( —): A m ount............................................ Per cent o f average required reserves..................................... 22 23 Interbank Federal funds transactions Gross transactions: Purchases.......................................... Sales................................................... Two-way transactions2..................... N et transactions: Purchases o f net buying b an k s. . . Sales o f net selling b a n k s............. 24 25 26 Related transactions with U.S. Govt, securities dealers Loans to dealers3................................ Borrowing from dealers4 ................. N et loans.............................................. 19 20 21 30 -2 3 53 29 5 54 25 5,815 7,329 5,656 5,088 4,445 6,062 5,438 5,551 4,305 -5 ,8 4 0 -7 ,3 4 9 -5 ,6 2 7 -5 ,1 3 3 - 4 ,3 9 2 - 6 ,1 6 3 -5 ,4 1 4 -5 ,6 1 2 - 4 ,2 3 4 99.2 128.2 96.0 93.9 77.5 111.3 98.4 99.4 73.9 6,951 1,136 1,135 8,249 920 920 7,083 1,427 1,427 6,659 1,572 1,571 5,835 1,390 1,390 6,900 838 838 6,660 1,222 1,222 6,878 1,327 1,327 5,566 1,261 1,261 5,815 7,329 5,656 5,088 4,445 6,062 5,438 5,551 4,305 1,535 631 904 1,569 849 721 1,533 1,019 514 1,590 1,097 494 1,705 679 1,026 2,661 737 1,924 2,067 466 1,602 1,425 720 705 868 581 287 29 21 -3 5 21 38 banks outside New York City 27 Basic reserve position Excess reserves1................................ 113 -2 4 34 78 111 19 4 89 39 51 L ess: 28 29 30 31 Borrowings at F.R. B anks......... N et interbank Federal funds transactions........................... E q u a l s : N et surplus, or deficit ( —): A m o u n t.......................................... Per cent o f average required reserves................................... Interbank Federal funds transactions Gross transactions: Purchases....................................... Sales................................................. Two-way transactions2................... N et transactions: Purchases o f net buying b an k s.. Sales o f net selling b an k s........... 37 38 39 Related transactions with U.S. Govt, securities dealers Loans to dealers3................... Borrowing from dealers4. . . . N et loans.................................. For notes see end o f table. -2 54 6 18 41 9,261 10,813 11,070 9,854 9,525 12,038 12,483 11,191 8,483 -9 ,2 0 2 -1 0 ,8 4 3 -1 1 ,0 5 4 -9 ,8 1 7 - 9 ,4 3 3 -1 2 ,0 4 4 -1 2 ,5 4 3 -1 1 ,2 0 9 - 8 ,5 7 0 97.3 117.7 119.1 111.0 105.4 134.7 138.6 121.7 92.6 17,089 7,828 4,454 17,513 6,700 4,106 16,979 5,909 3,800 16,211 6,357 4,048 15,914 6,389 4,001 17,551 5,512 3,873 17,333 4,850 3,510 17,529 6,337 4,135 15,985 7,501 3,909 12,635 3,374 13,407 2,594 13,180 2,110 12,163 2,309 11,913 2,389 13,678 1,639 13,824 1,340 13,394 2,203 12,076 3,593 1,364 1,398 -3 4 1,345 1,243 102 1,324 1,308 16 1,340 1,674 -3 3 4 1,204 1,028 175 2,801 1,450 1,351 2,526 1,503 1,024 1,470 1,014 457 1,038 1,653 -6 1 6 Federal Funds A7 1.13 Continued 1977, week ending W ednesday- Type M ay 4 May 11 May 18 May 25 June 1 June 8 June 15 June 22 June 29 -7 -6 5 banks in City o f Chicago 40 Basic reserve position Excess reserves1............................ 38 -1 2 18 4 61 6 20 L e ss : 41 42 Borrowings at F.R. Banks. .. N et interbank Federal funds transactions....................... 18 49 14 5,410 5,883 5,908 5,227 5,066 5,973 6,042 5,882 4,994 - 5 ,3 7 2 -5 ,8 9 6 - 5 ,9 0 7 -5 ,2 2 3 - 5 ,0 0 6 - 5 ,9 6 7 -6 ,0 7 1 - 5 ,9 0 3 -5 ,0 0 1 337.8 388.4 369.0 356.4 322.1 400.5 398.1 381.7 326.7 E q u a l s : N et surplus, or 43 44 deficit ( —): A m o u n t.................................... Per cent o f average required reserves............................ 6,600 1,190 1,178 6,780 897 897 6,904 996 996 6,246 1,018 1,018 6,038 972 972 6,783 811 811 6,708 666 666 6,902 1,020 1,020 6,122 1,128 1,128 48 49 Interbank Federal funds transactions Gross transactions: Purchases........................................ Sales................................................ Two-way transactions2 ................... N et transactions: Purchases o f net buying b an k s.. Sales o f net selling b a n k s........... 5,421 12 5,883 5,908 5,228 5,066 5,972 6,042 5,882 4,994 50 51 52 Related transactions with U.S. Govt, securities dealers Loans to dealers 3............................. Borrowing from dealers4 ............... N et loans............................................ 365 543 -1 7 8 295 512 -2 1 7 229 561 -3 3 3 244 600 -3 5 6 292 460 -1 6 8 497 411 86 401 406 -5 379 401 -2 2 176 557 -3 8 1 -2 9 45 46 47 33 other banks 53 Basic reserve position Excess reserves1.................................. L e ss : 54 55 Borrowings at F.R. B anks........... N et interbank Federal funds transactions............................. 75 -1 2 54 6 3,852 4,930 -3 ,8 3 0 4 8.7 16 74 50 9 28 41 19 -7 4 40 25 51 5,163 4,627 4,459 6,066 6,441 5,309 3,489 -4 ,9 4 8 -5 ,1 7 4 - 4 ,5 9 4 -4 ,4 2 7 -6 ,0 7 7 -6 ,4 7 3 - 5 ,3 0 6 -3 ,5 6 9 64.3 67.0 62.2 59.5 81.5 86.0 69.2 46.2 10,489 6,638 3,276 10,733 5,803 3,209 10,075 4,913 2,803 9,965 5,339 3,030 9,875 5,417 3,029 10,768 4,702 3,062 10,625 4,184 2,843 10,627 5,317 3,115 9,862 1,373 2,781 7,214 3,362 7,523 2,594 7,272 2,110 6,936 2,309 6,847 2,389 7,705 1,639 7,782 1,340 7,512 2,203 7,081 3,593 999 855 144 1,050 731 319 1,095 746 349 1,096 1,073 22 912 569 343 2,304 1,039 1,265 2,125 1,097 1,028 1,091 613 479 862 1,092 -2 3 4 E q u a l s : N et surplus, or 56 57 deficit ( —): A m ount............................................ Per cent o f average required reserves..................................... 58 59 60 61 62 Interbank Federal funds transactions Gross transactions: Purchases.......................................... Sales................................................... Two-way transactions2 ..................... N et transactions: Purchases o f net buying b an k s. . . Sales o f net selling b a n k s............. 63 64 65 Related transactions with U.S. Govt, securities dealers Loans to dealers3............................... Borrowing from dealers4 .................. N et loans.............................................. 1 Based on reserve balances, including adjustments to include waivers o f penalties for reserve deficiencies in accordance with changes in Board policy effective Nov. 19, 1975. 2 Derived from averages for individual banks for entire week. Figure for each bank indicates extent to which the bank’s average purchases and sales are offsetting. 3 Federal funds loaned, net funds supplied to each dealer by clearing banks, repurchase agreements (purchases from dealers subject to resale), or other lending arrangements. 4 Federal funds borrowed, net funds acquired from each dealer by clearing banks, reverse repurchase agreements (sales o f securities to dealers subject to repurchase), resale agreements, and borrowings secured by U.S. Govt, or other securities. N ote .—Weekly averages o f daily figures. For description o f series, see Federal Reserve B u lletin for August 1964, pp. 944—53. Back data for 46 banks appear in the Board’s Annual Statistical Digest, 1971-1975, Table 3. A8 1.14 Domestic Financial Statistics □ July 1977 F ED ER A L RESERVE B A N K INTEREST RATES Per cent per annum C urrent and previous levels Loans to member banks— Loans to all others under Sec. 13, last p a r.4 U nder Sec. 10(b)2 Federal Reserve Bank U nder Secs. 13 and 13a1 Special ra te 3 R egular rate R ate on 6/30/77 Effective date Previous rate R ate on 6/30/77 Effective date 5V4 5Va 5V4 5Va 11/22/76 11/22/76 11/22/76 11/22/76 11/22/76 11 /22/76 5V2 5Va 5Va 5 Va 5Ya 5Va 5Va 5Va 5 Va 5Va 5Va 11 /22/76 B o sto n .................. New Y o rk ........... Philadelphia........ Cleveland............. R ichm ond........... A tlan ta................. C hicago................ St. Louis.............. M inneapolis........ Kansas C ity......... D allas................... San F rancisco. .. 5V4 5Ya 5Ya 5V4 5V4 5V4 5V4 5Va U 122176 11126116 11/22/76 11/22/76 11/22/76 11/22/76 5Vi 5Vz 5V2 5V2 5V2 5V2 5V2 5Vi 5V2 5V2 5% 5% 5% Previous rate R ate on 6/30/77 Effective date Previous rate R ate on 6/30/77 Effective date Previous rate 6% 6% 6*4 6% 11/22/76 6 I/2 8% 81/4 m 11/22/76 8i/i U /2 2 /1 6 8Vi 6Va U /2 2 /1 6 U 122/16 11 /22/76 11 /22/76 I I 122116 U 122/16 11122/16 11/22/16 \\/2 2 /1 6 11/22/76 6 Ya 11/22/76 11/22/76 11/26/76 11/22/76 11/22/76 11/22/76 11/22/76 6V a 6Va 6V a 11/26/76 11/22/76 11/22/76 11/22/76 11/22/76 6 Va 61/4 6V4 6Vi 6i/i 61/2 6Vi 6i/i 6i/i 6Vi 61/2 6 i/ 2 6% 61/2 81/4 81/4 11/22/76 11/22/76 11/22/76 SVa sy4 U /2 2 /1 6 11/22/16 81/4 8V4 81/4 81/4 8V4 11/26/76 11/22/76 11/22/76 11/22/76 11/22/76 8i/i 8i/i 8Vi 8Vi 8V4 8Vi 8Vi 8Vi 8Vi 8Vi Range o f rates in recent years5 Effective date Range (or level)— All F.R. Banks In effect Dec. 31, 1970........ 1971—Jan. Feb. July Nov. Dec. 8 ..................... 15..................... 19..................... 22..................... 29..................... 13..................... 19..................... 16..................... 23..................... 11..................... 19..................... 13..................... 17..................... 24..................... F.R . Bank of N.Y. 5Vi 5Vi 51/4- 51/2 51/4 514 51/4 5 5 5 434 5 5 5 434 434 514 -514 -514 5 434-5 5 5 434 434-5 5 434-5 434 41/2-434 41/ 2-434 41/2 41/2 4Vi Range or level)— All F.R. Banks F.R. Bank of N.Y. I 973 —Jan. 15................... Feb. 26................... M ar. 2. Apr. 23................... M ay 4 ................... 11................... 18................... June 11................... 15................... July 2 ................... Aug. 14................... 23................... 5 5-51/2 5 Vi 51/2-534 534 53/4-6 6 6-6 Vi 5 51/2 51/2 5Vi 534 6 6 1974— Apr. 25................... 30................... Dec. 9 ................... 16................... 7Vi-8 8 734-8 7*4 Effective date 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. 3 Applicable to special advances described in Section 201.2(e)(2) of Regulation A. 61/2 7 7-7Vi 7Vi 61/2 61/2 7 71/2 7 Vi 8 8 734 IV a Effective date 1975—Jan. 6 ................... 10................... 24................... Feb. 5 ................... 7 ................... M ar. 10................... 14................... M ay 16................... 23................... 1976—Jan. 19................... 23................... Nov. 22................... 26................... In effect June 30, 1977. .. Range (or level)— All F.R Banks F.R . Bank of N.Y. 71/4-73/4 71/4-73/4 71/4 6 V4-IV 4 6 Y4 6V4-6V4 6V4 734 71/4 714 63/4 634 6 V4 6 614 6 6 5 Vi-6 5% 5Vi 5Vi 51/4-51/2 5% 514 514 5% 514 6 - 61/4 4 Advances to individuals, partnerships, or corporations other than member banks secured by direct obligations of, or obligations fully guaranteed as to principal and interest by, the U.S. Govt, or any agency thereof. 5 Rates under Secs. 13 and 13a (as described above). For description and earlier data, see the following publications of the Board o f G overnors: Banking and Monetary Statistics, 1914-1941, Banking and Monetary Statistics, 1941-1970, and Annual Statistical Digest, 1971-75. Policy Instruments 1.15 A9 M EM BER B A N K RESERVE R E Q U IR E M E N T S1 Per cent o f deposits Requirements in effect June 30, 1977 Type o f deposit, and deposit interval in millions o f dollars N et dem and:2 0 - 2 ............................................................................................................ 2 -10 ......................................................................................................... 10-100..................................................................................................... 100-400................................................................................................... Over 400..........................; ..................................................................... T im e:2,3 Savings..................................................................................................... Other tim e: 0-5, m aturing in— 30-179 d ay s................................................................................... 180 days to 4 y ears...................................................................... 4 years or m o re ............................................................................ Over 5, m aturing in— 30-179 days.................................................................................... 180 days to 4 years...................................................................... 4 years or m o re ............................................................................ Previous requirements Per cent Effective date Per cent Effective date 7 9% 11% 123^ 161/4 12/30/76 12/30/76 12/30/76 12/30/76 12/30/76 m 10 12 13 161/2 2/13/75 2/13/75 2/13/75 2/13/75 2/13/75 3 3/16/67 3 Vi 3/2/67 3 42 ^ 41 3/16/67 1/8/76 10/30/75 3i/i 3 3 3/2/67 3/16/67 3/16/67 6 4 21/2 41 12/12/74 1/8/76 10/30/75 5 3 3 10/1/70 12/12/74 12/12/74 Legal limits, June 30, 1977 Net dem and: Reserve city banks Other b a n k s.......... T im e........................... 1 F or changes in reserve requirements beginning 1963, see Board’s Annual Statistical Digest, 1971-1975 and for prior changes, see B oard’s Annual Report for 1976, Table 13. 2 (a) Requirement schedules are graduated, and each deposit interval applies to th at p art o f the deposits o f each bank. Demand deposits subject to reserve requirements are gross demand deposits minus cash items in process o f collection and demand balances due from domestic banks. (b) The Federal Reserve Act specifies different ranges o f requirements for reserve city banks and for other banks. Reserve cities are designated under a criterion adopted effective Nov. 9, 1972, by which 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. The presence o f the head office o f such a bank constitutes designation o f th at 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 o f reserve cities and are permitted to maintain reserves at ratios set for banks n ot in reserve cities. For details, see the Board’s Regulation D. M inimum M aximum 10 7 3 22 14 10 (c) Member banks are required under the B oard’s 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. Loans aggregating $100,000 or less to any U.S. resident are excluded from computations, as are 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. A reserve o f 4 per cent is required for each of these classifications. 3 Negotiable orders o f withdrawal (NOW ) accounts and time deposits such as Christmas and vacation club accounts are subject to the same requirements as savings deposits. 4 The average o f reserves on savings and other time deposits must be at least 3 per cent, the minimum specified by law. N ote .—Required reserves must be held in the form of deposits with F.R. Banks or vault cash. A 10 1.16 Domestic Financial Statistics n July 1977 M A X IM U M INTEREST RATES PAYABLE on Time and Savings Deposits at Federally Insured Institutions Per cent per annum Commercial banks Type and m aturity o f deposit In effect June 30, 1977 Previous maximum Effective date Per cent 7/1/73 1 Savings......................................................... 2 Negotiable order o f withdrawal (NOW) accounts1....................................... Savings and loan associations and m utual savings banks Effective date 1/21/70 41/2 1/1/74 Time (multiple- and single-maturity unless otherwise indicated):2 30-89 days: 3 M ultiple-m aturity........................... 4 Single-m aturity................................ In effect June 30, 1977 Per cent Effective date 5Va ( 5) 5 1/1/74 Previous maximum Per cent Effective date ( 6) 1/21/70 9/26/66 ( 7) 7/20/66 9/26/66 3 5Y4 ( 5) 5*4 1/21/70 5Vi 5Va 5Va 1/21/70 1/21/70 1/21/70 6V2 6Y4 ( 5) ( 5) 5V4 6 1/21/70 1/21/70 1/21/70 7/1/73 41/2 5Vi 7/1/73 5 6 7/1/73 7/1/73 5 ( 7) 5 6 90 days to 1 year: M ultiple-m aturity........................... Single-m aturity................................. 7 8 9 1 to 2 years3 ........................................ 2 to 2 Vi years3..................................... 2 Vi to 4 years3.................................... 10 11 4 to 6 years4........................................ 6 years or m ore4................................. 7 !/4 71/2 11/1/73 12/23/74 ( 8) m 11/1/73 71/2 1V4 11/1/73 12/23/74 ( 8) m 11/1/73 12 G overnmental units (all m aturities). IV a 12/23/74 m 11/27/74 1V4 12/23/74 m 11 j l l HA 61/2 1 For authorized States only. Federally insured commercial banks, savings and loan associations, cooperative banks, and mutual savings banks were first permitted to offer NOW accounts on Jan. 1, 1974. A uthorization to issue NOW accounts was extended to similar institu tions throughout New England on Feb. 27, 1976. 2 For exceptions with respect to certain foreign time deposits see the Federal Reserve B u l l e t in for October 1962 (p. 1279), August 1965 (p. 1094), and February 1968 (p. 167). 3 A minimum o f $1,000 is required for savings and loan associations, except in areas where mutual savings banks permit lower minimum de nominations. This restriction was removed for deposits maturing in less than 1 year, effective Nov. 1, 1973. 4 $1,000 minimum except for deposits representing funds contributed to an individual retirement account (IRA) o r a Keogh (H.R. 10) plan es tablished pursuant to the Internal Revenue Code. The $1,000 minimum requirement was removed for such accounts in December 1975 and N o vember 1976, respectively. 5 July 1, 1973, for mutual savings banks; July 6, 1973, for savings and loan associations. 6 Oct. 1, 1966, for m utual savings banks; Jan. 21, 1970, for savings and loan associations. 7 No separate account category. 1.161 I 6 8 Between July 1, 1973, and Oct. 31, 1973, there was no ceiling for certificates maturing in 4 years or more with minimum denominations o f $1,000; however, the am ount of such certificates that an institution could issue was limited to 5 per cent o f its total time and savings deposits. Sales in excess of th a t am ount, as well as certificates of less than $1,000, were limited to the 6Vi per cent ceiling on time deposits maturing in 2Vi years or more. Effective Nov. 1, 1973, the present ceilings were imposed on certificates maturing in 4 years or more with minimum denominations o f $1,000. There is no limitation on the am ount o f these certificates that banks can issue. N o te —M aximum rates that can be paid by Federally insured commer cial banks, mutual savings banks, and savings and loan associations are established by the Board o f Governors o f the Federal Reserve System, the Board o f D irectors o f the Federal D eposit Insurance Corporation, and the Federal Home Loan Bank Board under the provisions o f 12 C FR 217, 329, and 526, respectively. The maximum rates on time de posits in denominations of $100,000 or more were suspended in mid1973. For inform ation regarding previous interest rate ceilings on all ty p e s o f a c c o u n ts , se e earlier issues o f the Federal Reserve B u l l e t in , the Federal Home Loan Bank Board Journal, and the Annual Report o f the Federal D eposit Insurance Corporation. M A R G IN R EQ U IR EM EN TS Per cent o f market value; effective dates shown. Type o f security on sale M ar. 11, 1968 June 8, 1968 M ay 6, 1970 Dec. 6, 1971 Nov. 24, 1972 Jan. 3, 1974 1 M argin stocks............................................................ 2 Convertible bo n d s.................................................... 3 Short sales.................................................................. 70 50 70 80 60 80 65 50 65 55 50 55 65 50 65 50 50 50 N o t e .— Regulations G, T, and U o f the Federal Reserve Board of Governors, prescribed in accordance with the Securities Exchange Act of 1934, limit the am ount o f credit to 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 of the collateral at the time the credit is extended. Margin requirements are the difference between the market value (100 per cent) and the maximum loan value. The term “ margin stocks” is defined in the corresponding regulation. Regulation G and special margin requirements for bonds convertible into stocks were adopted by the Board o f Governors effective M ar. 11, 1968. Policy Instruments All 1.17 FEDERAL RESERVE OPEN MARKET TRANSACTIONS Millions o f dollars Type o f transaction 1974 1975 1976 11,660 5,830 4,550 11,562 5,599 26,431 14,343 8,462 2 5,017 Dec. Jan. 346 480 600 975 1,546 2,535 313 110 801 368 1,671 260 19 472 18 59 45 107 41 20 252 ’ 63 -266 374 Nov. Feb. M ar. Apr. May U.S. GOVT. SECURITIES Outright transactions (excl. matched salepurchase transactions) Treasury bills: Gross purchases. Gross sales........... Redemptions 681 489 400 Others within 1 year: 1 Gross purchases..................... Gross sales............................... Exchange, or m aturity shift. R edem ptions........................... -1,183 131 -4 3,549 792 1,047 1 to 5 years: Gross purchases...................... Gross sales............................... Exchange, or m aturity shift. 797 2 3,284 9 10 -697 3,854 2 3,202 177 -2 ,5 8 8 430 11 12 13 5 to 10 years: Gross purchases.................... Gross sales............................... Exchange, or m aturity shift. 434 1,510 1,048 62 1,675 -4 ,6 9 7 1,572 -1,167 14 15 16 Over 10 years: Gross purchases..................... Gross sales............................... Exchange, or m aturity shift. 196 1,070 642 73 205 848 225 -310 17 18 19 All m aturities: 1 Gross purchases. Gross sales........... Redemptions 13,537 5,830 4,682 221,313 5,599 29,980 19,707 8,639 25,017 612 480 600 2,004 1,546 3,229 313 797 801 298 368 2,160 260 19 681 489 400 450 113 681 170 475 348 174 327 -252 -8 8 0 266 -374 151 46 104 128 48 81 -8 6 5 1,174 *5 i 7 119 -1 ,2 0 9 37 38 300 900 20 21 Matched sale-purchase transactions Gross sales.................................... Gross purchases.......................... 64,229 62,801 151,205 196,078 152,132 196,579 22,675 21,525 23,193 24,343 24,595 22,544 22,674 23,447 30,115 30,828 32,287 32,852 28,532 27,306 22 23 Repurchase agreements Gross purchases. . . Gross sales.............. 71,333 70,947 140,311 232,891 139,538 230,355 17,612 20,173 30,872 27,119 23,820 27,573 13,853 12,921 14,368 14,860 13,397 11,862 29,308 30,448 5,361 -2 ,8 8 7 1,702 151 3,980 -2 ,5 7 3 24 N et change in U.S. Govt, securities.......... 1,984 7,434 9,087 -4 ,1 7 9 3,087 1,616 891 115 322 246 169 14 63 23,204 22,735 15,179 15,566 10,520 10,360 897 976 1,380 1,102 930 1,208 689 612 511 420 163 -3 5 -5 4 5 410 -9 -1 4 0 795 -5 -7 9 5 -1 8 149 6,149 8,539 9,833 -4,307 6,379 -3,969 1,886 FE D ER A L A G EN C Y OBLIGATIONS 28 29 Outright transactions: Gross purchases........... Gross sales..................... Redem ptions................. Repurchase agreements: Gross purchases........... Gross sales..................... 30 31 Outright transactions, n e t. .. Repurchase agreements, n e t. 25 26 27 346 36 523 546 709 639 2,164 2,278 -5 1 653 -4 5 -7 2 9 4,998 -3 ,4 6 1 BANKERS ACCEPTANCES 32 Net change in total System Account. 1 Both gross purchases and redemptions include special certificates created when the Treasury borrows directly from the Federal Reserve, as follows (millions o f dollars): 1974,131; 1975, 3,549; and 1976 to present, none. 2 In 1975, the System obtained $421 million o f 2-year Treasury notes in exchange for m aturing bills. In 1976 there was a similar transaction 50 amounting to $189 million. Acquisition o f these notes is treated as a purchase; the run-off of bills, as a redemption. N ote .— Sales, redemptions, and negative figures reduce holdings of the System Open M arket A ccount; all other figures increase such holdings. Details may not add to totals because of rounding. A12 1.18 Domestic Financial Statistics □ July 1977 F E D E R A L RESERVE B A N K S Condition and F.R . N ote Statements Millions o f dollars Account June 1 June 8 Wednesday End of M onth 1977 1977 June 15 June 22*> June 29^ Apr. May June*5 Consolidated condition statement ASSETS 11,629 11,629 1,200 11,629 1,200 11,629 1,200 1,200 11,620 1,200 11,636 1,200 11,629 11,620 1,200 1,200 315 309 311 313 313 340 319 315 222 767 974 1,212 605 379 400 258 58 54 49 47 352 43 413 103 778 58 50 43 578 7,077 7,077 7,056 7,436 244 7,436 342 7,077 124 7,077 10 7,423 610 38,386 30,443 33,854 39,373 40,974 41,127 39,694 40,827 48,732 8,134 95,252 48,732 8,134 87,309 48,732 8,134 90,720 49,088 8,248 96,709 2,742 49,088 8,248 98,310 3.554 49,632 7.234 97,993 1,974 48,732 8,134 96,560 834 49,088 8,248 98,163 4,076 17 Total U.S. Govt, securities. 95,252 87,309 90,720 99,451 101,864 99,967 97,394 102,239 18 Total loans and securities.. 102,609 95,207 98,799 108,742 110,703 108,428 104,989 111,151 11,212 369 9,324 371 10,530 371 9,715 371 9,501 370 8.234 366 8,360 369 8,520 371 59 3,589 59 2,246 59 2,423 60 2,552 57 2.555 56 2,821 60 2,427 57 2,494 130,982 120,345 125,322 134,582 136,319 133,081 129,353 135,728 Gold certificate account.................................. Special Drawing Rights certificate account. 3 C o in 1. 8 9 Loans: M ember bank borrow ings................. O th er....................................................... A cceptances: Bought o utright.................................... Held under repurchase agreem ents., Federal agency obligations: Bought o u trig h t.................................... Held under repurchase agreem ents., 10 11 12 13 14 15 16 U.S. Govt, securities Bought outright: B ills..................................................... Certificates—Special....................... O th e r......................... N otes.................................................. Bonds................................................. Total2..................................................... Held under repurchase agreements. 4 5 6 7 19 20 21 22 Cash items in process o f collection..., Bank prem ises.......................................... O ther assets: Denominated in foreign currencies. All other................................................ 23 Total assets. LIABILITIES 24 25 26 27 28 F.R . notes.............................................. D eposits: M em b er b a n k r e se r v e s ....................... U.S. Treasury—General account. F oreign............................................... O ther 3................................................. 29 Total deposits. 30 31 Deferred availability cash item s............ O ther liabilities and accrued dividends. 32 Total liabilities...................................... 85,690 86,001 85,968 85,757 86,315 83,757 85,333 86,326 26,956 4,946 325 1,996 22,340 2,723 293 554 27,427 1,228 344 657 25,829 12,958 250 631 23,647 16,115 287 592 25,773 13,628 305 591 29,009 5,838 436 831 24,194 15,183 379 748 34,223 25,910 29,656 39,668 40,641 40,297 36,114 40,504 7,552 992 5,423 898 6,525 952 5,809 1,007 5,837 1,090 5,499 1,052 4,367 1,016 5,282 1,165 128,457 118,232 123,101 132,241 133,883 130,605 126,830 133,277 CAPITAL ACCOUNTS 33 34 35 Capital paid in ............................................................. Surplus.......................................................................... O ther capital accounts.............................................. 999 983 543 1,000 983 130 1,000 1,000 1,000 983 358 983 453 993 983 500 1,000 983 238 983 540 1,000 983 468 36 Total liabilities and capital accounts....................... 130,982 120,345 125,322 134,582 136,319 133,081 129,353 135,728 37 M emo : M arketable U.S. Govt, securities held in custody for foreign and inti, acco u n t............... 58,395 58,593 57,624 57,809 58,032 60,092 58,214 57,867 Federal Reserve note statement F.R . notes outstanding (issued to B ank)........ Collateral held against notes outstanding: Gold certificate account.................................. Special Drawing Rights certificate a cco u n t.. . . A cceptances....................................................... U.S. Govt, securities........................................ 90,294 90,574 90,843 90,980 91,171 89,630 90,242 91,250 39 40 41 42 11,625 643 11,625 752 11,625 752 11,625 752 11,616 752 11,631 643 11,625 643 11,616 752 79,383 79,258 79,755 79,905 79,965 78,933 79,283 80,015 43 Total collateral. 91,651 91,635 92,132 92,282 92,333 91,207 91,551 92,383 38 1 Effective Jan. 1, 1977, Federal Reserve notes o f other Federal Reserve Banks were merged into the liability account for Federal Reserve notes. 2 Includes securities loaned—fully guaranteed by U.S. Govt, securities pledged with F.R. Banks—and excludes (if any) securities sold and scheduled to be bought back under matched sale-purchase transactions. 3 Includes certain deposits o f domestic nonmember banks and foreign- owned banking institutions voluntarily held with member banks and redeposited in full with F.R . Banks. N ote .— Beginning Jan. 1, 1977, “Operating equipment” was transferred to “ Other assets.” Reserve Banks 1.19 FEDERAL RESERVE BANKS A13 Maturity Distribution o f Loan and Security Holdings Millions o f dollars End of m onth Wednesday 1977 Type and m aturity June 1 June 8 June 15 June 22 June 29 Apr. 30 M ay 31 June 30 1 Loans............................. 2 W ithin 15 days 3 16 days to 90 d a y s. 4 91 days to 1 y e a r.. 220 201 19 769 747 22 973 947 26 1,212 11 605 596 9 377 371 6 398 386 12 258 235 22 5 Acceptances................. 6 W ithin 15 days 7 16 days to 90 d a y s. 8 91 days to 1 y e a r... 58 9 45 4 54 8 42 4 49 6 39 4 399 37 358 4 456 426 26 4 881 812 51 18 108 59 45 4 621 591 26 4 U.S. Govt, securities............ W ithin 15 day s1................ 16 days to 90 d a y s........... 91 days to 1 year.............. Over 1 year to 5 y ears. . , Over 5 years to 10 y ears. Over 10 y ears.................. 95,252 1,937 18,195 27,673 29,930 11,165 6,352 87,309 3,118 9,801 26,943 29,930 11,165 6,352 90,720 3,520 12,777 26,976 29,930 11,165 6,352 99,451 7,484 17,343 26,796 30,129 11,233 6,466 101,864 7.778 17,712 28,546 30,129 11,233 6,466 99,967 6,259 22,770 24,327 31,168 9,991 5,452 97,394 2,629 19,615 27,703 29,930 11,165 6,352 102,239 6,195 17,712 30,981 29,652 11,233 6,466 16 Federal agency obligations. 17 W ithin 15 d ay s1................ 18 16 days to 90 d a y s.......... 19 91 days to 1 year.............. 20 Over 1 year to 5 y ears. . , 21 Over 5 years to 10 years . 22 Over 10 years................... 7,077 71 277 7,077 71 327 1,052 3,450 1,387 790 7,056 12 440 1,025 3,403 1,386 790 7,680 304 393 1,025 3,636 1,499 823 7.778 402 393 1,025 3,636 1,499 823 7,201 170 289 1,091 3,490 1,371 790 7,087 149 277 1,034 3,450 1,387 790 8,033 657 393 1,025 3,636 1,499 823 1,102 3,450 1,387 790 1,201 1 Holdings u nder repurchase agreements are classified as maturing within 15 days in accordance with maximum maturity o f the agreements. 1.20 DEMAND DEPOSIT ACCOUNTS Debits and Rate of Turnover M onthly data are at seasonally adjusted annual rates. 1977 Standard m etropolitan statistical area 1974 1975 1976 Jan. Feb. Mar. Apr. M ay 32,024.0 Debits (billions o f dollars)2 1 All 233 SM SA’s ............................................................. 22,192.2 23,565.1 28,911.0 29,288.1 30,145.4 30,421.7 '30,5 8 5 .5 2 New York C ity .............................................................. 9 ,9 3 1 .8 10,970.9 13,835.0 14,411.8 14,898.0 14,612.1 14,988.9 15,739.7 3 232 SM SA ’s ................................................................... 4 6 leading SMSA’s other than N .Y .C .1............... 5 226 others................................................................... 12,260.6 5,152.7 7,107.9 12,594.2 4,937.5 7,661.8 15,076.1 5,917.1 9,159.0 14,876.3 5,864.3 9,012.0 15,247.4 5,887.1 9,36 0 .2 15,809.6 6,155.7 9,653.9 H5,95 6 .5 6,055.5 '9 ,5 4 1 .1 16,284.2 6 ,420.4 9,863.8 Turnover of deposits (annual rate) 6 All 233 SM SA’s ............................................................ 128.0 131.0 153.5 154.3 153.3 *■155.2 '158.2 160.2 7 New Y ork C ity ................................ ............................. 312.8 351.8 419.8 443.5 437.3 436.0 465.2 474.9 8 232 SM SA’s................................................................... 9 6 leading SMSA’s other than N .Y .C .1............... 10 226 others................................................................... 131.8 69.3 86.6 84.7 118.4 71.6 97.0 136.9 81.7 94.6 133.9 19 A 93.8 129.9 79.8 97.3 135.2 82.5 96.3 134.7 '82.1 97.7 139.8 81.7 1 Boston, Philadelphia, Chicago, D etroit, San Francisco-Oakland, and Los Angeles-Long Beach. 2 Excludes interbank and U.S. Govt, demand deposit accounts. N ote .— Total SMSA’s includes some cities and counties not designated as SMSA’s. A 14 1.21 Domestic Financial Statistics □ July 1977 M O N EY STOCK M EASU RES A N D CO M PO NEN TS Billions of dollars, averages o f daily figures 1976 1973 Dec. 1974 Dec. 1977 1975 Dec. Nov. Item Dec. Jan. Feb. Mar. Apr. M ay 314.0 750.7 1,258.2 814.0 1,321.5 315.4 756.1 1,268.1 818.2 1,330.3 320.5 764.6 1,281.2 826.2 1,342.8 320.7 767.6 1,288.9 829.9 1,351.2 Seasonally adjusted M EASURES i 1 2 3 4 5 M - l.......................................... M -2 .......................................... M -3.......................................... M -4.......................................... M -5.......................................... 270.5 571.4 919.6 634.4 982.5 283.1 612.4 981.5 701.4 1,070.5 294.8 664.3 1.092.6 746.5 1.174.7 310.4 732.3 1,223.4 794.6 1,285.6 312.4 740.3 1,237.1 803.5 1,300.3 313.8 746.3 1,248.9 809.3 1,312.0 COMPONENTS 6 Currency................................. Commercial bank deposits: 7 D em an d .............................. 8 Time and savings............... 9 Negotiable C D ’s 2......... 10 O ther............................... 61.5 67.8 73.7 80.2 80.5 81.1 81.8 82.2 83.1 83.6 209.0 363.9 63.0 300.9 215.3 418.3 89.0 329.3 221.0 451.7 82.1 369.6 230.2 484.2 62.2 422.0 231.9 491.1 63.3 427.9 232.7 495.6 63.1 432.5 232.1 500.0 63.3 436.7 233.2 502.8 62.2 440.6 237.4 505.7 61.6 444.1 237.1 509.2 62.3 446.9 11 N onbank thrift institutions3 348.1 369.1 428.3 491.0 496.8 502.6 507.5 512.1 516.6 521.3 309.9 747.2 1,253.1 808.5 1,314.4 312.4 756.2 1,269.8 817.0 1,330.7 322.3 770.0 1,290.2 830.1 1,350.3 315.5 766.2 1,290.0 827.4 1,351.2 N ot seasonally adjusted M EASURES i 12 13 14 15 16 M - l........................................................... M -2 ........................................................... M -3 ........................................................... M -4........................................................... M -5........................................................... 278.3 576.5 921.8 640.5 985.8 291.3 617.5 983.8 708.0 1,074.3 303.2 669.3 1,094.3 752.8 1,177.7 312.3 730.0 1,216.3 792.8 1,279.2 321.3 745.3 1,237.9 809.5 1,302.1 319.7 751.2 1,251.4 814.3 1,314.5 COMPONENTS 17 C urrency................................................. Commercial bank deposits: 18 Demand............................................... 19 M em ber........................................... 20 Domestic nonm em ber.................. 21 Time and savings................................ 22 Negotiable C D ’s 2 ......................... 23 O th e r............................................... 24 N onbank thrift institutions3............... 25 U.S. Govt, deposits (all commercial banks).............................................. 62.7 69.0 75.1 80.7 82.0 80.5 80.8 81.6 82.8 83.4 215.7 156.5 56.3 362.2 64.0 298.2 222.2 159.7 58.5 416.7 90.5 326.3 228.1 162.1 62.6 449.6 83.5 366.2 231.6 162.5 65.8 480.5 62.9 417.7 239.3 168.5 67.3 488.2 64.3 423.9 239.2 168.1 67.5 494.6 63.1 431.5 229.1 161.0 64.6 498.6 61.3 437.3 230.9 162.1 65.2 504.6 60.8 443.8 239.6 167.6 68.3 507.7 60.1 447.7 232.1 161.8 66.6 511.8 61.2 450.7 345.3 366.3 424.9 486.3 492.6 500.2 505.9 513.6 520.5 523.8 6.3 4.9 4.1 4.2 4.7 4.2 4.4 4.5 5.6 3.8 1 Composition of the money stock measures is as follows: M - l : 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: M -l plus savings deposits, time deposits open account, and time certificates o f deposit (C D ’s) other than negotiable C D ’s o f $100,000 or m ore o f large weekly reporting banks. M -3 : M-2 plus the average o f the beginning- and end-of-month deposits o f mutual savings banks, savings and loan shares, and credit union shares (nonbank thrift). M-4: M-2 plus large negotiable C D ’s. M -5 : M-3 plus large negotiable C D ’s. For a description of the latest revisions in the money stock measures see “ Money Stock Measures: Revision” on pp. 305 and 306 of the M arch 1977 B u l l e t in . Latest monthly and weekly figures are available from the Board’s H.6 release. Back data are available from the Banking Section, Division of Research and Statistics. 2 Negotiable time C D ’s issued in denominations o f $100,000 or more by large weekly reporting commercial banks. 3 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. NOTES TO TABLE 1.23: 1 Adjusted to exclude domestic commercial interbank loans. 2 Loans sold are those sold outright to banks’ own foreign branches, nonconsolidated nonbank affiliates of the bank, the banks’ holding company (if not a bank), and nonconsolidated nonbank subsidiaries of the holding company. Prior to Aug. 28, 1974, the institutions included h ad 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 reduced these loans by about $1.2 billion as o f Mar. 31, 1976. 4 D ata 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 “ O ther” securities, and $600 million in “ Total loans and investments.” As of Oct. 31, 1974, “ Total loans and investments” o f all commercial banks were reduced by $1.5 billion in connection with the liquidation of one large bank. Reductions in other items were: “ Total loans,” $1.0 billion (of which $0.6 billion was in “ Commercial and industrial loans” ), and “ Other securities,” $0.5 billion. In late November “ Commercial and industrial loans” were increased by $0.1 billion as a result of loan re classifications at another large bank. N ote . —D ata are for last Wednesday of month except for June 30 and Dec. 31; data are partly or wholly estimated except when June 30 and Dec. 31 are call dates. Monetary Aggregates 1.22 AGGREGATE RESERVES AND DEPOSITS A15 Member Banks Billions of dollars, averages o f daily figures 1976 1973 Dec. Item 1974 Dec. 1975 Dec. Oct. 1977 Nov. Dec. Jan. Feb. M ar. Apr. | M ay Seasonally adjusted 1 Reserves 1.......................................................................... 34.94 2 N onborrow ed............................................................... 33.64 3 R equired........................................................................ 34.64 4 Deposits subject to reserve requirements 2 ................. 442.3 5 Time and savings........................................................ 279.2 D em and: Private....................................................................... 158.1 6 5.0 7 U.S. G ovt................................................................. 33.60 35.87 36.34 486.2 322.1 34.73 34.60 34.46 505.4 337.9 34.51 34.41 34.29 520.0 346.2 34.85 34.78 34.59 524.9 350.2 34.95 34.90 34.68 529.6 355.0 34.78 34.71 34.51 532.5 357.3 34.40 34.33 34.20 532.0 360. 1 34.31 34,20 34,09 535.2 361.3 34.68 34.61 34.49 538.4 361.4 34.72 34.52 34.51 537.6 363.1 160.6 3.5 164.5 3.0 170.4 3.4 170.7 4 .0 171.4 3.2 172.5 2.7 169.5 2.5 171.1 2 .8 173.4 3.6 172.3 2.1 448.9 494.6 513.8 529.0 534.0 538.8 540.8 539.5 542.9 546.1 545.4 8 Deposits plus nondeposit items 3 .................................. N ot seasonally adjusted 9 Deposits subject to reserve requirements 2 ................. Time and savings......................................................... 10 D em an d : 11 Private....................................................................... U.S. G ovt.................................................................. 12 447.5 278.5 491.8 321.7 510.9 337.2 518.9 346.7 522.5 347.6 534.8 353.6 537.7 357.0 528.7 358.4 534.0 361.7 541.3 362.3 538.8 364.7 164.0 5.0 166.6 3.4 170.7 3.1 169.5 2.8 171.9 3.0 177.9 3.3 177.8 2.9 167.2 3.1 169.1 3.2 175.0 4 .0 168.5 2.5 13 Deposits plus nondeposit items 3 .................................. 454.0 500.1 519.3 527.9 531.5 544.0 546.0 536.2 541.7 549.0 543.6 1 Series reflects actual reserve requirement percentages with no adjust ment to eliminate the effect o f changes in Regulations D and M. There are breaks in series because of changes in reserve requirements effective Dec. 12, 1974; Feb. 13, May 22, and Oct. 30,1975; Jan. 8, and Dec. 30,1976. In addition, effective Jan. 1, 1976, statewide branching in New York was instituted. The subsequent merger o f a number of banks raised required reserves because o f higher reserve requirements on aggregate deposits at these banks. 2 Includes total time and savings deposits and net demand deposits as defined by Regulation D. Private demand deposits include all demand deposits except those due to the U.S. Govt., less cash items in process of collection and demand balances due from domestic commercial banks. 3 “ Total member bank deposits” subject to reserve requirements, plus Euro-dollar borrowings, loans sold to bank-related institutions, and certain other nondeposit items. This series for deposits is referred to as “ the adjusted bank credit proxy.” N ote .— Back data and estimates of the impact on required reserves and changes in reserve requirements are shown in Table 14 o f the Board’s Annual Statistical Digest, 1971-1975. 1.23 LOANS AND INVESTMENTS All Commercial Banks Billions of dollars; last Wednesday o f m onth except for June 30 and Dec. 31 1973 Dec. 31 1974 4 Dec. 31 1975 Dec. 31 1977 1976 Dec. 31 Category Jan. 26 V Feb. 23 V Mar. 30 Apr. 27 V V May 25 V June 30 V Seasonally adjusted 2 Including loans sold outright2 ............................ 633.4 637.7 690.4 695.2 721.1 725.5 784.4 788.2 786.6 790.6 796.4 800.3 803.0 807.0 812.4 816.4 819.4 823.4 825.5 829.5 3 4 5 6 L oans: T o tal.......................................................................... Including loans sold outright2 ........................ Commercial and industrial3 ................................ Including loans sold outright2, 3..................... 449.0 453.3 156.4 159.0 500.2 505.0 183.3 186.0 496.9 501.3 176.0 178.5 538.9 542.7 179.5 181.9 540.9 544.9 179.8 182.4 545.4 549.3 181.2 183.8 551.0 555.0 182.9 185.6 557.7 561.7 184.9 187.7 562.1 566.1 185.9 188.7 567.0 571.0 188.3 191.1 7 8 Investm ents: U.S. T reasury.......................................................... O th e r......................................................................... 54.5 129.9 50.4 139.8 79.4 144.8 97.3 148.2 96.9 148.8 101.5 149.5 103.6 148.4 102.8 151.9 104.6 152.7 1 L o a n s a n d in v e s tm e n ts 1 ..................................................... 105.3 153.2 1 N ot seasonally adjusted 9 Loans and investments1............................................. 10 Including loans sold o u trig h t.............................. 647.3 651.6 705.6 710.4 737.0 741.4 801.6 805.4 784.9 788.9 790.0 793.9 801.1 805.1 809.6 813.6 816.6 820.6 830.5 834.5 11 12 13 14 L oans: T o tal1........................................................................ Including loans sold outright2 ........................ Commercial and industrial3 ................................ Including loans sold outright2,3..................... 458.5 462.8 159.4 162.0 510.7 515.5 186.8 189.5 507.4 511.8 179.3 181.8 550.2 554.0 182.9 185.3 536.0 540.0 177.8 180.4 538.9 542.8 179.4 182.0 547.7 551.7 182.8 185.5 553.5 557.5 185.1 187.9 561.3 565.3 186.1 188.9 574.4 578.4 190.7 193.5 15 16 Investm ents: U.S. T reasury.......................................................... O th e r......................................................................... 58.3 130.6 54.5 140.5 84.1 145.5 102.5 148.9 101.1 147.9 102.6 148.5 104.7 148.7 103.0 153.1 101.9 153.4 101.7 154.4 For notes see bottom o f opposite page. A16 Domestic Financial Statistics □ July 1977 1.24 CO M M ER CIA L B A N K ASSETS A N D LIABILITIES Last-W ednesday-of-M onth Series Billions o f dollars except for number o f banks 19763 1975 1977 Account Dec. 31 Sept. Oct. Nov. Dec. Jan. | Feb. M ar. Apr.** M ayp June All commercial 1 Loans and investments................. 2 Loans, gross.............................. Investm ents: 3 U.S. Treasury securities. .. 4 O th e r...................................... 775.8 546.2 800.8 560.2 808.0 566.5 817.6 571.0 846.4 594.9 824.2 575.3 831.6 580.4 840.4 587.0 846.5 590.4 853.1 597.8 8,645 6,095 84.1 145.5 93.5 147.0 94.4 147.1 98.0 148.6 102.5 148.9 101.1 147.9 102.6 148.5 104.7 148.7 103.0 153.1 101.9 153.4 101.3 153.7 5 6 7 8 9 133.6 12.3 26.8 47.3 47.3 119.8 12.4 29.8 37.0 40.7 116.9 12.7 26.4 38.2 39.7 127.0 11.9 29.1 42.5 43.5 136.1 12.1 26.1 49.6 48.4 120.1 12.8 28.6 39.2 39.6 127.1 12.5 28.6 41.5 44.4 122.8 12.9 26.9 41.9 41.1 122.7 13.3 28.2 40.1 41.0 119.4 13.1 24.0 41.3 41.0 124.5 13.6 23.5 42.9 44.4 10 Total assets/total liabilities and capital1...................................... 964.9 969.7 973.7 995.7 1,030.7 996.7 1,011.6 1,018.2 1,024.8 1,026.9 1,044.9 11 786.3 779.2 784.4 796.5 838.2 801.0 809.3 817.1 819.4 818.9 833.7 41.8 3.1 278.7 34.6 5.8 255.2 34.0 3.7 260.8 39.1 3.4 264.0 45.4 3.0 288.4 35.3 4 .0 260.6 36.6 3.8 264.5 37.6 3.1 263.1 33.9 7.4 267.9 35.2 3.6 262.8 37.3 3.0 272.5 O th er...................................... 12.0 450.6 9 .6 473.9 9.2 476.6 9.1 481.0 9 .2 492.2 8.8 492.3 8.6 495.9 8.9 504.4 8.6 501.6 8.5 508.8 8.9 511.9 17 Borrowings.................................... 18 Total capital accounts2 ............... 60.2 69.1 78.1 73.7 76.7 74.3 84.6 74.8 80.2 78.1 82.5 76.3 87.6 76.8 84.5 77.1 88.2 77.5 87.6 78.1 90.2 78.7 14,633 14,656 14,660 14,674 14,671 14,667 14,688 14,685 14,690 14,695 14,695 Cash assets.................................... Currency and coin................... Reserves with F.R . B anks. . . Balances with ban k s................ Cash items in process o f collection.. D em an d : 12 13 14 15 16 19 U.S. G ovt............................ O th e r.................................... Time: M em o : N um ber of banks.......... M ember 578.6 416.4 585.7 417.2 590.7 421.6 597.6 424.1 620.5 442.9 600.9 426.3 605.9 429.9 611.8 434.6 614.8 435.9 620.2 441.5 629.1 450.1 22 23 Loans and investments................ Loans, gross.............................. Investments: U.S. Treasury securities. .. O ther...................................... 61.5 100.7 67.0 101.5 67.7 101.4 70.8 102.7 74.6 103.1 72.6 102.0 73.7 102.3 74.9 102.3 73.0 105.8 72.6 106.1 72.6 106.4 24 25 26 27 28 Cash assets, to ta l......................... Currency and coin................... Reserves with F.R . B an k s. ., Balances with b a n k s ............... Cash items in process o f collection.. 108.5 9 .2 26.8 26.9 45.5 98.9 9 .2 29.8 20.6 39.3 94.9 9.5 26.4 20.9 38.2 103.0 8.9 29.1 23.3 41.8 108.9 9.1 26.0 27.4 46.5 97.7 9.5 28.6 21.5 38.1 102.8 9.3 28.6 22.2 42.7 100.0 9 .6 26.9 24.0 39.5 99.4 9.9 28.2 21.9 39.4 95.7 9.7 24.0 22.6 39.3 100.5 10.0 23.5 24.2 42.7 29 Total 733.6 726.8 727.6 744.8 772.9 744.6 755.1 759.7 762.7 763.9 778.9 590.8 573.9 576.1 584.8 618.7 587.0 592.0 598.1 597.8 597.4 609.4 38.6 3.2 210.8 32.7 4.3 191.0 32.2 2.9 194.7 37.2 2.4 196.0 42.4 2.1 215.5 33.1 3.0 193.7 34.1 2.7 196.6 35.3 2.1 195.9 31.6 5.9 199.0 32.9 2 .7 195.1 34.9 2 .2 202.7 10.0 329.1 7.5 338.4 7.1 339.2 7.0 342.1 7.2 351.5 6.8 350.3 6.6 351.9 6.9 357.9 6.6 354.7 6.5 360.3 6.9 362.7 53.6 52.1 70.6 55.7 69.1 56.2 76.4 56.6 71.7 58.6 73.6 57.7 78.0 57.9 75.3 58.1 78.1 58.3 77.5 58.8 80.0 59.2 5,788 5,774 5,769 5,767 5,759 5,739 5,740 5,739 5,726 5,708 5,708 20 21 assets/total liabilities 30 D eposits....................................... D em and: In terb an k............................. 31 U.S. G ovt.............................. 32 O th er.................................... 33 Time: Interbank............................. 34 O th er.................................... 35 3.6 37 Total capital accounts2 ............. 38 M em o : N um ber o f ban k s____ and 1 Includes items not shown separately. Effective M ar. 31, 1976, some o f the item “reserve for loan losses” and all o f the item “ unearned income on loans” are no longer reported as liabilities. As o f that date the “ valuation” portion o f “ reserve for loan losses” and the “ unearned income on loans” have been netted against “ other assets,” and against “ total assets” as well. Total liabilities continue to include the deferred income tax portion of “ reserve for loan losses.” 2 Effective M ar. 31, 1976, includes “ reserves for securities” and the contingency portion (which is small) o f “ reserve for loan losses.” 3 Figures partly estimated except on call dates. N ote .— Figures include all bank-premises subsidiaries and other sig nificant majority-owned domestic subsidiaries. Commercial banks: All such banks in the United States, including member and nonmember banks, stock savings banks, nondeposit trust companies, and U.S. branches o f foreign banks, but excluding one na tional bank in Puerto Rico and one in the Virgin Islands. Member banks: The following numbers o f noninsured trust companies that are members o f the Federal Reserve System are excluded from mem ber banks in Tables 1.24 and 1.25 and are included with noninsured banks in Table 1.25: 1974— June, 2; December, 3; 1975—June and December, 4; 1976 (beginning m onth shown)—July, 5, December, 7; 1977-January 8. Commercial Banks A17 1.25 COMMERCIAL BANK ASSETS AND LIABILITIES Call-Date Series Millions o f dollars except for number o f banks 1976 1975 1976 1975 Account June 30 Dec. 31 June 30 Dec. 31 June 30 Total insured Dec. 31 June 30 Dec. 31 National (all insured) 1 Loans and investments, Gross................................. Loans: Gross..................................................................... N et......................................................................... Investments: 4 U.S. Treasury securities.................................... 5 Other..................................................................... 6 Cash assets................................................................... 736,164 762,400 773,696 827,692 428,167 441,135 443,955 476,602 526,272 ( 2) 535,170 ( 2) 539,017 520,970 578,712 560,069 312,229 ( 2) 315,738 ( 2) 315,624 305,275 340,679 329,968 67,833 142,060 125,181 83,629 143,602 128,256 90,947 143,731 124,072 101,459 147,520 129,578 37,606 78,331 75,686 46,799 78,598 78,026 49,688 78,642 75,488 55,729 80,193 76,074 7 914,781 944,654 942,510 1,004,020 536,836 553,285 548,697 583,315 746,348 775,209 776,957 825,001 431,646 447,590 444,251 469,378 2 3 Total assets/total liabilities1...................................... 8 Deposits........................................................................ Demand: U.S. G ovt............................................................. Interbank............................................................. Other..................................................................... Time: Interbank............................................................. Other..................................................................... 3,106 41,244 261,903 3,108 40,259 276,384 4,622 37,503 265,670 3,020 44,072 285,190 1,723 21,096 152,576 1,788 22,305 159,840 2,858 20,329 152,382 1,674 23,148 163,347 10,252 429,844 10,733 444,725 9,407 459,754 8,250 484,468 6,804 249,446 7,302 256,355 5,532 263,148 4,909 276,298 14 Borrowings................................................................... 15 Total capital accounts................................................ 59,310 65,986 56,775 68,474 63,823 68,989 75,308 72,070 41,954 37,483 40,875 38,969 45,183 39,502 54,420 41,323 16 14,320 14,372 14,373 14,397 4,730 4,741 4,747 4,735 9 10 11 12 13 M em o: Number o f banks........................................ State member (all insured) Insured nonmember 17 Loans and investments, Gross.................................. Loans: Gross................................................................. N et......................................................................... Investments: 20 U.S. Treasury securities.................................... 21 Other..................................................................... 22 Cash assets................................................................... 134,759 137,620 136,915 144,000 173,238 183,645 192,825 207,089 100,968 (2) 100,823 ( 2) 98,889 96,037 102,278 99,475 113,074 ( 2) 118,609 ( 2) 124,503 119,658 135,754 130,626 12,004 21,787 31,466 14,720 22,077 30,451 16,323 21,702 30,422 18,847 22,874 32,859 18,223 41,942 18,029 22,109 42,927 19,778 24,934 43,387 18,161 26,882 44,451 20,644 23 Total assets/total liabilities........................................ 179,787 180,495 179,645 189,573 198,157 210,874 214,167 231,130 24 141,995 143,409 142,061 149,481 172,707 184,210 190,644 206,141 443 18,751 48,621 467 16,265 50,984 869 15,834 49,658 429 19,296 52,194 940 1,397 60,706 853 1,689 65,560 894 1,339 63,629 917 1,627 69,648 28 29 Deposits........................................................................ Demand: U.S. G ovt............................................................. Interbank.............................................................. Other..................................................................... Time: Interbank............................................................. Other..................................................................... 2,771 71,409 2,712 72,981 3,074 72,624 2,384 75,177 676 108,989 719 115,389 799 123,980 957 132,991 30 31 Borrowings................................................................... Total capital accounts................................................. 14,380 12,773 12,771 13,105 15,300 12,791 17,318 13,199 2,976 15,730 3,128 16,400 3,339 16,696 3,569 17,547 32 M em o: Number o f banks........................................ 1,064 1,046 1,029 1,023 8,526 8,585 8,597 8,639 18 19 25 26 27 Noninsured nonmember Total nonmember 33 Loans and investments, Gross.................................. Loans: Gross..................................................................... N et......................................................................... Investments: 36 U.S. Treasury securities.................................... 37 Other...................................................................... 38 Cash assets.................................................................... 11,725 13,674 15,905 18,819 184,963 197,319 208,730 225,908 34 35 9,559 ( 2) 11,283 ( 2) 13,209 13,092 16,336 16,209 122,633 ( 2) 129,892 ( 2) 137,712 132,751 152,091 146,836 358 1,808 3,534 490 1,902 5,359 472 2,223 4,362 1,054 1,428 6,496 18,581 43,750 21,563 22,599 44,829 25,137 25,407 45,610 22,524 27,936 45,880 27,141 39 16,277 20,544 21,271 26,790 214,434 231,418 235,439 257,921 8,314 11,323 11,735 13,325 181,021 195,533 202,380 219,467 11 1,338 2,124 6 1,552 2,308 4 1,006 2,555 4 1,277 3,236 951 2,735 62,830 859 3,241 67,868 899 2,346 66,184 921 2,904 72,884 957 3,883 1,291 6,167 1,292 6,876 1,041 7,766 1,633 112,872 2,010 121,556 2,092 130,857 1,998 140,758 Total assets/total liabilities........................................ 40 44 45 Demand: U.S. G ovt............................................................. Interbank.............................................................. Other..................................................................... Time: Interbank.............................................................. Other..................................................................... 46 47 Borrowings................................................................... Total capital accounts................................................. 3,110 570 3,449 651 3,372 663 4,842 818 6,086 16,300 6,577 17,051 6,711 17,359 8,412 18,366 48 M em o: Number o f banks...................................... .. 253 261 270 275 8,779 8,846 8,867 8,914 41 42 43 1 Includes items not shown separately. Not available. 2 For Note see Table 1.24. A18 Domestic Financial Statistics □ July 1977 1.26 CO M M ERCIAL B A N K ASSETS A N D LIABILITIES Detailed Balance Sheet, D ecem ber 31, 1976-* Asset and liability items are shown in millions o f dollars. M ember b anks1 Asset account All Insured commercial commercial banks banks N on member ban k s1 Large banks Total All other New York City City o f Chicago Other large 1 Cash bank balances, items in process....................... 2 Currency and c o in .................................................... 3 4 D em and balances with banks in United States. . 5 O ther balances with banks in United States___ 6 Balances with banks in foreign countries........... 7 Cash items in process o f collection....................... 136,075 12,124 25,968 36,815 6,972 5,823 48,374 129,578 12,115 25,968 32,964 5,763 4,509 48,260 108,934 9,066 25,968 19,711 3,623 4,046 46,520 29,494 832 3,585 7,389 193 836 16,659 3,934 220 1,423 196 34 23 2,038 40,471 3,048 10,627 3,324 1,434 2,102 19,937 35,034 4,965 10,334 8,804 1,961 1,085 7,886 27,141 3,059 8 Total securities held—Book value.............................. 9 U.S. Treasury............................................................. 10 Other U.S. G ovt, agencies...................................... 11 States and political subdivisions........................... 12 All other securities................................................... n Unclassified to ta l...................................................... 249,882 102,514 35,838 104,661 6,732 137 247,439 101,460 35,269 104,374 6,220 116 176,333 74,577 22,150 75,310 4,217 78 21,349 11,823 1,355 7,751 421 8,157 4,072 500 3,349 236 57,755 25,735 6,237 24,546 1.191 47 89,072 32,948 14,059 39,665 2,370 30 73,549 27,937 13,688 29,350 2,515 60 17,103 3,349 1,777 1,854 14 15 16 17 18 19 Trading-account securities....................................... U.S. Treasury......................................................... O ther U.S. Govt, agencies.................................. States and political subdivisions....................... All other trading acct. securities....................... 7,904 5,011 991 1,324 440 137 7,882 5,011 991 1,324 440 116 7,650 4,861 975 1,297 440 78 3,251 2,386 259 479 127 832 582 55 110 86 3,246 1,705 624 660 209 47 322 188 38 48 17 30 253 151 15 27 20 21 22 23 24 Bank investment portfolios...................................... U.S. Treasury........................................................ Other U.S. Govt, agencies.................................. States and political subdivisions....................... All other portfolio securities............................. 241,979 97,503 34,847 103,336 6,292 239,557 96,449 34,279 103,049 5,780 168,683 6 9 ,111 21,175 74,013 3,778 18,098 9,437 1,096 7,272 293 7,325 3,490 445 3,239 151 54,510 24,030 5,613 23,885 981 88,750 32,760 14,021 39,617 2,352 73,296 27,786 13,672 29,323 2,515 60 25 F.R . stock and corporate sto ck ................................ 1,580 1,541 1,313 281 86 497 449 268 26 Federal funds sold and securities resale agreement. . 27 Commercial banks.................................................... 28 Brokers and dealers.................................................. 29 O thers......................................................................... 48,346 40,199 5,775 2,373 45,767 37,876 5,693 2,198 36,378 28,780 5,499 2,099 1,993 979 610 404 1,339 1,035 192 113 19,648 14,217 3,981 1,450 13,398 12,550 716 132 11,968 11,419 275 273 30 Other loans, gross......................................................... 31 L e ss : Unearned income on loans......................... 32 Reserves for loan lo ss.................................. 33 Other loans, n et........................................................ 546,704 12,577 6,192 527,934 532,945 12,526 6,116 514,303 406,579 8,614 4,899 393,066 75,468 561 1,185 73,722 21,807 82 300 21,426 148,516 2,856 1,751 143,909 160,788 5,117 1,663 154,008 140,124 3,963 1,293 134,869 34 35 36 37 38 39 40 41 42 43 44 Other loans, gross, by category Real estate loans....................................................... Construction and land development................ Secured by farm land............................................ Secured by residential.......................................... 1- to 4-family residences.................................. FHA-insured or VA-guaranteed............... Conventional................................................ Multifamily residences..................................... FH A -insured................................................. Conventional................................................ Secured by other properties............................... 149,483 16,644 6,721 84,922 80,394 7,956 72,438 4,528 388 4,140 41,195 149,276 16,638 6,710 84,784 80,265 7,919 72,346 4,519 387 4,132 41,144 104,714 13,153 2,868 60,487 57,201 6,859 50,342 3,286 323 2,963 28,206 9,419 2,801 16 4,433 3,992 611 3,381 441 122 320 2,169 1,848 382 14 944 845 49 797 99 25 74 509 37,462 6,039 295 21,816 20,639 3,670 16,968 1,178 95 1,083 9,311 55,984 3,931 2,543 33,294 31,726 2,529 29,196 1,568 82 1,486 16,216 44,769 3,491 3,853 24,435 23,193 1,097 22,096 1,242 64 1,177 12,989 45 46 47 48 49 50 51 52 53 54 55 Loans to financial institutions................................. To R E IT ’s and mortgage com panies............... To domestic commercial banks......................... To banks in foreign countries........................... To other depositary institutions....................... To other financial institutions........................... Loans to security brokers and dealers................. O ther loans to purch./carry securities................. Loans to farmers—except real estate................... Commercial and industrial lo an s......................... Loans to individuals................................................ 42,427 9,982 4,531 10,880 1,482 15,552 11,420 4,032 23,282 182,920 118,408 35,738 9,855 2,774 6,617 1,340 15,151 11,075 4,015 23,259 177,128 118,051 33,760 9,516 2,196 6,487 1,173 14,389 10,793 3,329 12,971 145,849 82,896 12,048 3,496 606 3,022 163 4,761 6,900 336 128 37,893 6,003 4,383 1,301 127 290 24 2,641 1,417 317 149 11,018 1,820 14,349 4,045 1,126 2,717 789 5,672 2,267 1,701 3,028 55,108 29,066 2,981 674 337 457 198 1,315 209 975 9,667 41,830 46,005 8,666 466 2,335 4,393 309 1,164 627 703 10,311 37,071 35,512 56 57 58 59 60 61 62 63 64 65 66 67 Instalment loans......................................................... Passenger autom obiles.................................... Residential-repair/modernize......................... Credit cards and related plans....................... Charge-account credit card s...................... Check and revolving credit p lan s............. Other retail consumer goods......................... Mobile h o m es............................................... O ther............................................................... O ther instalment lo an s.................................... Single-payment loans to individuals................. All other loans........................................................... 94,078 39,862 6,523 14,358 11,317 3,041 15,937 8,743 7,195 17,397 24,330 14,732 93,751 39,588 6,522 14,353 11,317 3,036 15,930 8,742 7,189 17,358 24,300 14,405 65,619 25,641 4,589 12,675 10,172 2,504 10,974 6,217 4,757 11,739 17,276 12,267 4,428 790 324 1,649 1,186 463 327 173 154 1,338 1,575 2,741 1,040 136 55 669 637 33 73 28 44 106 781 855 23,385 7,397 1,808 6,935 5,731 1,205 3,886 2,231 1,654 3,360 5,681 5,533 36,766 17,318 2,403 3,422 2,618 803 6,689 3,785 2,904 6,935 9,239 3,137 28,458 14,221 1,933 1,683 1,146 537 4,963 2,525 2,438 5,658 7,054 2,466 68 Total loans and securities, n e t.................................... 827,742 809,050 607,089 97,344 31,009 221,810 256,927 220,653 5,111 19,539 2,341 9,505 30,498 5,111 19,448 2,303 9,147 29,384 4,865 14,616 2,272 8,758 26,355 1,088 1,949 1,000 4,125 9,322 129 662 206 177 1,651 2,910 5,680 978 4,169 11,257 738 6,325 89 288 4,126 246 4,923 68 747 4,142 74 Total assets..................................................................... 1,030,811 1,004,020 772,890 144,323 37,767 287,274 303,526 257,922 69 70 71 72 73 Direct lease financing.................................................. Fixed assets—Buildings, furniture, real e sta te . . . . Investment in unconsolidated subsidiaries............. Custom er acceptances outstanding........................... Other assets.................................................................... For notes see opposite page. Commercial Banks A19 1.26 Continued M ember banks1 Liability or capital account All Insured commercial commercial banks banks Large banks5 Total All other New York City City of Chicago N on member b anks1 Other large 75 Demand d e p o s its .......... ......................................................... 76 M utual savings banks............................................ 77 O ther individuals, partnerships, and corporations..................................................... 78 U.S. G ovt................................................................. 79 States and political subdivisions......................... 80 Foreign governments, central banks, etc........... 81 Commercial banks in United States................... 82 Banks in foreign countries.................................... 83 Certified and officers’ checks, etc........................ 336,800 1,684 332,283 1,385 260,090 1,254 60,201 624 10,267 2 92,746 268 96,876 360 76,711 430 255,433 3,025 17,715 2,414 36,256 7,410 12,864 254,221 3,020 17,648 1,846 35,926 6,761 11,475 192,616 2,103 12,071 1,813 34,679 6,512 9,041 32,600 134 645 1,365 16,412 5,345 3,076 7,552 41 125 35 2,022 174 318 72,262 669 3,568 387 11,852 862 2,878 80,201 1,259 7,733 26 4,394 132 2,769 62,818 921 5,644 601 1,577 898 3,822 84 Time deposits............................................................... 85 86 M utual savings banks............................................ 87 Other individuals, partnerships, and c o rp o ra tio n s................................................... 88 U.S. G ovt................................................................. 89 States and political subdivisions......................... 90 Foreign governments, central banks, etc........... 91 Commercial banks in United States................... 92 Banks in foreign countries.................................... 298,276 146 339 289,949 146 317 212,936 118 296 33,842 12,151 145 6 73,759 10 125 93,183 108 20 85,340 28 43 233,964 675 44,165 10,044 7,139 1,803 228,522 675 43,885 8,481 6,709 1,213 166,393 514 30,407 8,218 5,858 1,132 25,005 66 1,203 4,574 2,148 702 8,745 27 861 1,408 1,011 94 56,289 205 12,835 2,185 1,878 231 76,354 216 15,508 52 820 106 67,571 161 13,758 1,827 1,281 670 93 Savings deposits........................................................... 94 Individuals and nonprofit organizations........... 95 Corporations and other profit organizations. . . 96 U.S. G ovt................................................................. 97 All o th e r................................................................... 203,251 188,391 8,642 6,103 115 202,770 187,922 8,633 6,100 114 145,835 134,596 6,420 4,719 100 11,157 10,209 480 388 79 2,983 2,782 175 25 54,407 49,570 2,761 2,060 16 77,288 72,036 3,003 2,245 4 57,416 53,795 2,222 1,384 15 98 Total deposits............................................................... 838,328 825,002 618,860 105,200 25,401 220,912 267,347 219,468 99 Federal funds purchased and securities sold under agreements to repurchase.................................. 100 Commercial banks.................................................. 101 Brokers and dealers................................................ 102 O thers........................................................................ 103 Other liabilities for borrowed money..................... 104 Mortgage indebtedness.............................................. 105 Bank acceptances outstanding................................. 106 O ther liabilities.............................. ............................. 72,847 42,819 5,603 24,425 7,304 776 10,118 23,389 70,188 40,613 5,577 23,998 5,120 774 9,755 16,013 66,899 39,195 5,345 22,360 4,840 548 9,366 13,772 15,000 6.523 949 7,529 2,500 66 4,714 4,539 8,643 7,241 29 1,373 49 15 177 805 34,537 20,844 3,651 10,041 1,919 271 4,186 5,298 8,719 4,587 716 3,416 372 196 288 3,129 5,948 3,624 258 2,066 2,464 227 752 9,617 107 Total liabilities............................................................. 952,761 926,852 714,285 132,020 35,091 267,122 280,052 238,476 108 Subordinated notes and debentures....................... 5,161 5,098 4,082 1,124 83 1,823 1,053 1,079 109 Equity capital............................................................... 110 Preferred stock........................................................ 111 Common stock........................................................ 112 Surplus...................................................................... 113 Undivided profits.................................................... 114 Other capital reserves............................................ 72,889 73 16,238 29,205 25,505 1,868 72,070 67 16,143 28,791 25,266 1,803 54,522 25 11,882 21,407 19,929 1,279 11,179 2,593 2,453 4,229 4,406 91 570 1,243 728 52 18,329 2 3,818 7,655 6,422 432 22,421 23 5,041 8,280 8,373 705 18,366 48 4,356 7,798 5,575 589 115 Total liabilities and equity capital........................... 1,030,811 1,004,020 772,890 144,323 37,767 287,274 303,526 257,922 M emo items : 116 Dem and deposits adjusted2...................................... Average for last 15 or 30 days: 117 Cash and due from b a n k ...................................... 118 Federal funds sold and securities purchased under agreements to resell........................... 119 Total loans............................................................... 120 Time deposits o f $100,000 or m o re .................... 121 Total deposits.......................................................... 122 Federal funds purchased and securities sold under agreements to repurchase................. Other liabilities for borrowed m oney................. 123 249,146 245,076 176,787 26,996 6,167 60,288 83,336 72,359 129,797 125,226 106,860 29,510 4,372 39,824 33,154 22,936 48,860 529,177 139,381 816,113 45,794 515,977 132,893 803,019 35,440 394,113 109,644 600,420 2,307 73,976 28,517 98,932 1,425 21,349 9,682 24,869 17,825 143,957 43,372 213,361 13,883 154,831 28,073 263,259 . 13,420 135,064 29,736 215,693 80,161 6,936 77,949 4,686 74,703 4,396 20,453 2,165 9,340 53 35,775 1,842 9,135 335 5,458 2,540 124 Standby letters of credit outstanding..................... 125 Time deposits o f $100,000 or m o re........................ 126 Certificates o f deposit............................................ 127 Other time deposits................................................ 13,493 141,153 117,258 23,895 12,969 135,031 113,275 21,756 11,340 111,415 92.891 18,524 6,494 28,795 24,451 4,344 921 9,582 8,276 1,306 3,162 44,546 35,878 8,668 762 28,492 24,285 4,207 2,153 29,738 24,368 5,371 128 Number o f ban k s....................................................... 14,672 14,397 5,758 12 9 154 5,583 8,914 1 Member banks exclude and nonmember banks include 8 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 Demand deposits adjusted are demand deposits other than domestic commercial interbank and U.S. Govt., less cash items reported as in process of collection. N ote .— D ata include consolidated reports, including figures for all bank-premises subsidiaries and other significant majority-owned do mestic subsidiaries. Securities are reported on a gross basis before deduc tions of valuation reserves. Holdings by type of security will be reported as soon as they become available. Back data in lesser detail were shown in previous B u ll e tin s . Details may not add to totals because o f rounding. A20 1.27 Domestic Financial Statistics □ July 1977 ALL LA R G E W EEK LY R EPO RTIN G CO M M ER CIA L B A N K S Assets and Liabilities Millions o f dollars, Wednesday figures 1977 A ccount May 11 M ay 18 M ay 25 June 1 June 8 June 15 June 22 June 29 416,589 418,864 417,430 423,242 422,968 425,999 421,099 424,309 20,626 15,941 22,221 17,216 22,297 16,840 25,512 20,211 24,905 16,653 23,217 16,534 21,562 17,268 23,405 19,209 2,589 488 1,608 2,805 431 1,769 3,334 346 1,777 3,048 409 1,844 5,878 570 1,804 4,221 466 1,996 2,274 436 1,584 2,227 299 1,670 292,498 117,928 4,483 293,685 117,752 4,521 292,717 117,620 4,541 295,037 117,982 4,570 294,032 117,744 4,595 296,999 118,371 4,628 295,845 119,653 4,688 297,531 119,666 4,694 1,171 8,406 1,661 8,928 1,720 8,178 1,802 8,342 2,158 7,810 2, 177 8,748 880 8,178 1,014 8,633 95 2,493 98 2,525 92 2,519 95 2,509 92 2,509 95 2,519 95 2,509 93 2,539 7,482 15,789 65,768 7,408 15,786 65,957 7,389 15,594 66,072 7,488 15,720 66,304 7,473 15,557 66,452 7,727 15,718 66,825 7,410 15,533 67,069 7,414 15,664 67,214 1,978 5,735 40,676 1,641 18,853 1,953 5,743 40,812 1,626 18,915 1,880 5,616 41,053 1,599 18,844 2,096 6,015 41,198 1,587 19,329 1,780 5,808 41,330 1,576 19,148 2,062 5,543 41,592 1,506 19,488 1,849 5,515 41,749 1,527 19,190 2,113 5,734 41,924 1,530 19,299 8,828 283,670 8,880 284,805 8,908 283,809 8,901 286,136 8,979 285,053 9,028 287,971 9,065 286,780 8,970 288,561 48,713 8,703 48,390 8,880 47,673 8,361 48,273 8,814 49,784 9,942 50,788 10,959 49,024 9,601 48,407 9,131 8,327 27,548 4,135 63,580 8,467 26,876 4,167 63,448 8,356 26,809 4,147 63,651 8,797 26,562 4,100 63,321 8,820 27,080 3,942 63,226 8,890 26,930 4,009 64,023 8,773 26,834 3,816 63,733 8,910 26,392 3,974 63,936 9,139 40,891 8,748 40,947 8,724 41,142 8,533 41,135 8,563 41,121 8,468 41,622 8,400 41,608 8,289 41,686 2,086 11,464 2,060 11,693 2,114 11,671 2,031 11,622 2,045 11,497 2,063 11,870 2,046 11,679 2,099 11,862 37 Balances with domestic ban k s.....................'............. 38 Investments in subsidiaries not consolidated......... 39 O ther assets.................................................................... 35,088 20,998 5,820 11,828 2,641 53,562 40,525 19,038 5,770 12,898 2,684 52,512 35,813 17,261 5,947 13,054 2,667 53,123 46,473 20,129 5,752 14,528 2,617 55,766 36,147 16,109 5,709 14,2692,694 55,522 44,728 21,267 5,729 12,788 2,691 54,593 38,133 18,691 5,919 12,738 2,674 54,123 38,934 16,398 6,081 14,502 2,676 55,033 40 Total assets/total liabilities.......................................... 546,526 552,291 545,295 568,507 553,418 567,795 553,377 557,933 166,628 122,621 5,751 1,670 173,809 124,296 5,844 2,350 168,388 121,485 5,922 1,814 185,989 132,874 6,678 1,083 171,771 123,597 5,577 921 191,280 134,465 6,237 9,912 173,446 125,874 6,083 1,900 176,278 127,156 6,167 1,408 23,072 816 25,136 828 24,188 783 29,090 972 26,984 870 25,474 786 23,534 780 25,477 831 1,013 5,679 6,006 234,393 95,007 1,379 5,788 8,188 235,143 94,890 1,103 5,689 7,404 235,910 94,606 1,215 5,985 8,092 235,803 94,411 1,508 5,982 6,332 236,847 94,477 1,152 5,665 7,589 236,053 94,144 982 6,256 8,037 236,861 93,981 1,276 6,363 7,600 238,667 94,109 105,774 20,198 4,596 7,375 106,192 20,340 4,567 7,665 107,026 20,644 4,518 7,573 107,152 20,552 4,542 7,606 108,361 20,352 4,712 7,370 108,050 20,131 4,750 7,380 108,866 20,062 4,847 7,449 110,419 19,877 4,850 7,603 73,927 71,647 68,359 72,550 70,098 65,106 68,754 68,834 261 3,268 25,702 138 3,507 25,638 339 3,850 26,005 114 4,121 27,208 708 4,535 26,796 894 4,640 27,226 1,075 4,617 25,933 379 5,024 25,996 42,347 42,409 42,444 42,722 42,663 42,596 42,691 42,755 1 Total loans and investments........................................ 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 L oans: Federal funds sold1................................................... To commercial b anks.......................................... To brokers and dealers involving— U.S. Treasury securities.................................. Other securities................................................. To o th e rs................................................................ Other, gross................................................................ A gricultural........................................................... F or purchasing or carrying securities: To brokers and dealers: U.S. Treasury securities............................. O ther securities............................................. To others: U.S. Treasury securities............................. To nonbank financial institutions: Personal and sales finance cos., etc.............. O ther................................................................... To commercial banks: Foreign................................................................ Consumer instalm ent.......................................... Foreign governments, official institutions, etc.. All other loans....................................................... L ess: Loan loss reserve and unearned income on lo a n s ..................................................... Other loans, n e t......................................................... Investm ents: U.S. Treasury securities.......................................... Bills.......................................................................... Notes and bonds, by m aturity: W ithin 1 year..................................................... 1 to 5 years........................................................ After 5 years...................................................... Other securities.......................................................... Obligations o f States and political subdivisions: Tax warrants, short-term notes, and bills.............................................................. All o th er............................................................. Other bonds, corporate stocks, and securities: Certificates o f participation2......................... All other, including corporate stocks.......... 34 Cash items in process o f collection.......................... 35 Reserves with F.R. B an k s.......................................... 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 D eposits: Demand deposits....................................................... Individuals, partnerships, and corporations .. States and political subdivisions....................... U.S. G ovt............................................................... Domestic interbank: Com m ercial....................................................... M utual savings.................................................. Foreign: Governments, official institutions, etc......... Commercial b a n k s ........................................... Certified and officers’ checks............................. Time and savings deposits3 .................................... Savings4 ................................................................. Time: Individuals, partnerships, and corporations States and political subdivisions................... D omestic in terb an k ......................................... Foreign govts., official institutions, etc........ 56 Federal funds purchased, etc.5 .................................. Borrowings fro m : 57 58 59 O ther liabilities, etc.6 ................................................... 60 Total equity capital and subordinated notes/debentures7 ................................................. 1 Includes securities purchased under agreements to resell. 2 Federal agencies only. 3 Includes time deposits o f U.S. Govt, and o f foreign banks, which are not shown separately. 4 F o r am ounts o f these deposits by ownership categories, see Table 1.30. 5 Includes securities sold under agreements to repurchase. 6 Includes minority interest in consolidated subsidiaries and deferred tax portion o f reserves for loans. 7 Includes reserves for securities and contingency portion o f reserves for loans. Weekly Reporting Banks A21 1.28 LARGE WEEKLY REPORTING COMMERCIAL BANKS IN NEW YORK CITY Assets and Liabilities Millions o f dollars, Wednesday figures 1977 Account 1 Total loans and investments........................................ 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 Loans: Federal funds sold 1................................................... To commercial ban k s.......................................... To brokers and dealers involving— U.S. Treasury securities.................................. Other securities................................................. To o th ers................................................................ Other, gross................................................................ Commercial and industrial................................. A gricultural........................................................... For purchasing or carrying securities: To brokers and dealers: U.S. Treasury securities.............................. Other securities............................................. To others: U.S. Treasury securities.............................. Other securities............................................. To nonbank financial institutions: Personal and sales finance cos., etc.............. O ther................................................................... Real estate.............................................................. To commercial banks: D om estic............................................................ Foreign............................................................... Consumer instalm ent.......................................... Foreign governments, official institutions, etc. All other loans...................................................... L e ss : L o a n lo ss reserve a n d u n ea rn ed in c o m e o n l o a n s ............................................................... Other loans, net......................................................... June 15 June 22 June 29 91,205 93,897 91,018 92,491 4,009 2,491 3,361 1,808 3,715 2,460 3,627 2,512 4,503 3,304 800 0 703 778 0 740 1,119 1 433 685 0 570 494 3 618 563 0 636 67,457 33,230 136 67,001 33,222 138 67,665 33,538 136 67,318 33,503 131 68,739 33,856 129 67,064 34,467 157 67,850 34,446 149 953 4,412 1,424 4,963 1,503 4,387 1,572 4,314 1,888 4,084 1,900 4,730 690 4,252 812 4,507 25 345 25 348 24 347 24 347 24 346 24 345 24 346 24 347 2,497 5,081 8,779 2,340 5,041 8,772 2,374 5,020 8,788 2,381 5,039 8,798 2,395 A,921 8,761 2,619 4,968 8,777 2,446 4,900 8,761 2,402 4,893 8,732 685 2,594 4,041 389 3,597 598 2,591 4,060 369 3,560 606 2,593 4,069 356 3,574 760 2,781 4,070 340 3,565 479 2,770 4,090 326 3,594 738 2,569 4,109 305 3,670 545 2,511 4,124 332 3,509 750 2,698 4,144 331 3,615 1,642 65,216 1,652 65,805 1,648 65,353 1,670 65,995 1,682 65,636 1,688 67,051 1,678 65,386 1,633 66,217 11,939 3,428 12,327 3,824 11,712 3,253 11,611 3,092 11,941 3,441 12,669 4,449 11,676 3,553 11,373 3,258 910 6,791 810 10,413 1,149 6,532 822 10,467 1,040 6,511 908 10,461 1,173 6,392 954 10,378 1,182 6,489 829 10,267 1,180 6,199 841 10,462 1,174 6,156 793 10,329 1,232 6,018 865 10,398 2,563 6,053 2,503 6,087 2,482 6,140 2,437 6,153 2,435 6,059 2,451 6,200 2,418 6,172 2,355 6,238 214 1,583 213 1,664 212 1,627 213 1,575 213 1,560 214 1,597 214 1,525 211 1,594 14,804 4,543 877 5,914 1,267 12,851 4,067 865 6,333 1,284 14,982 6,396 881 6,222 1,286 12,186 4,862 885 7,643 1,284 15,515 5,931 870 5,701 1,284 13,595 4,972 882 5,735 1,285 14,358 4,006 906 6,907 1,289 May 25 June 1 M ay 11 M ay 18 91,057 93,020 91,386 91,993 3,489 2,021 4,421 2,773 3,860 2,357 851 0 617 915 0 733 66,858 33,326 134 June 8 32 33 Investm ents: U.S. Treasury securities........................................... Bills.......................................................................... Notes and bonds, by m aturity: W ithin 1 year..................................................... 1 to 5 years........................................................ After 5 years..................................................... Other securities.......................................................... Obligations of States and political subdivisions: Tax warrants, short-term notes, and b ills .. All o th er............................................................. Other bonds, corporate stocks, and securities: Certificates o f participation2......................... All other, including corporate stocks.......... 34 35 36 37 38 39 Cash items in process o f collection.......................... Reserves with F.R. B anks........................................... Currency and c o in ........................................................ Balances with domestic b anks.................................... Investments in subsidiaries not consolidated......... O ther assets.................................................................... 10,984 5,514 919 5,394 1,268 1 8 ,7 6 1 1 8 ,3 7 7 1 8 ,7 4 4 1 9 ,5 1 4 1 9 ,7 6 6 1 8 ,7 1 0 1 8 ,9 7 6 1 8 ,7 2 0 40 Total assets/total liabilities.......................................... 133,897 138,802 135,530 141,274 137,831 141,908 136,463 138,677 45,651 26,208 A ll 259 50,507 26,932 566 424 48,625 26,140 514 305 53,583 29,495 672 90 49,478 25,610 652 85 55,989 30,536 760 3,178 49,948 27,282 649 324 51,992 28,307 529 112 10,548 412 12,260 422 11,945 403 13,160 529 13,903 466 12,061 378 11,181 391 12,747 416 784 4,328 2,635 42,219 10,943 1,139 4,351 4,413 42,654 10,918 871 4,335 4,112 42,670 10,841 967 4,620 4,050 42,440 10,766 1,247 4,594 2,921 42,302 10,776 911 4,356 3,809 41,960 10,781 750 4,884 4,487 42,215 10,741 1,062 4,974 3,845 42,360 10,694 22,999 1,474 1,867 4,142 23,102 1,504 1,803 4,488 23,186 1,514 1,760 4,487 22,939 1,550 1,766 4,541 23,198 1,469 1,792 4,169 22,943 1,441 1,821 4,104 23,100 1,412 1,889 4,187 23,366 1,357 1,874 4,180 21,510 20,953 18,638 19,465 19,735 17,384 18,517 18,813 175 1,211 11,140 0 1,438 11,266 190 1,589 11,828 0 1,597 12,149 580 1,837 11,846 110 1,812 12,601 396 1,721 11,535 0 1,793 11,579 11,991 11,984 11,990 12,040 12,053 12,052 12,131 12,140 24 25 26 27 28 29 30 31 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 D eposits: Demand deposits........................................................ Individuals, partnerships, and corporations.. States and political subdivisions....................... U.S. G ovt................................................................ Domestic interbank: C om m ercial....................................................... M utual savings................................................. Foreign: Governments, official institutions, etc......... Commercial b a n k s ........................................... Certified and officers’ checks.............................. Time and savings deposits3...................................... Savings4 .................................................................. Time: Individuals, partnerships, and corporations States and political subdivisions................... Domestic in terb an k ......................................... Foreign govts., official institutions, etc........ 56 Federal funds purchased, etc.5 .................................. Borrowings from : 57 F.R. B anks................................................................. 58 O thers.......................................................................... 59 Other liabilities, etc.6 ................................................... 60 Total equity capital and subordinated notes/debentures7 ................................................. 1 Includes securities purchased under agreements to resell. 2 Federal agencies only. 3 Includes time deposits o f U.S. Govt, and o f foreign banks, which are not shown separately. 4 For amounts o f these deposits by ownership categories, see Table 1.30. 5 Includes securities sold under agreements to repurchase. 6 Includes minority interest in consolidated subsidiaries and deferred tax portion o f reserves for loans. 7 Includes reserves for securities and contingency portion o f reserves for loans. A22 1.29 Domestic Financial Statistics □ July 1977 LA R G E W EEKLY R EPO RTIN G CO M M ERCIAL B A N K S O U T SID E N EW Y O R K CITY Assets and Liabilities Millions o f dollars, W ednesday figures 1977 Account May 11 May 18 May 25 June 1 June 8 June 15 June 22 June 29 325,532 325,844 326,044 331,249 331,763 332,102 330,081 331,818 17,137 13,920 17,800 14,443 18,437 14,483 21,503 17,720 21,544 14,845 19,502 14,074 17,935 14,756 18,902 15,905 1,738 488 991 1,890 431 1,036 2,534 346 1,074 2,270 409 1,104 4,759 569 1,371 3,536 466 1,426 1,780 433 966 1,664 299 1,034 225,640 84,602 4,349 226,228 84,522 4,385 225,716 84,398 4,403 227,372 84,444 4,434 226,714 84,241 4,464 228,260 84,515 4,499 228,781 85,186 4,531 229,681 85,220 4,545 218 3,994 3,965 111 217 3,791 230 4,028 270 3,726 277 4,018 190 3,926 202 4,126 70 2,148 73 2,177 2, i l l 68 71 2,162 68 2,163 71 2,174 71 2,163 69 2,192 4,985 10,708 56,989 5,068 10,745 57,185 5,015 10,574 57,284 5,107 10,681 57,506 5,078 10,630 57,691 5,108 10,750 58,048 4,964 10,633 58,308 5,012 10,771 58,482 1,293 3,141 36,635 1,252 15,256 1,355 3,152 36,752 1,257 15,355 1,274 3,023 36,984 1,243 15,270 1,336 3,234 37,128 1,247 15,764 1,301 3,038 37,240 1,250 15,554 1,324 2,974 37,483 1,201 15,818 1,304 3,004 37,625 1,195 15,681 1,363 3,036 37,780 1,199 15,684* 7,186 218,454 7,228 219,000 7,260 218,456 7,231 220,141 7,297 219,417 7,340 220,920 7,387 221,394 7,337 222,344 36,774 5,275 36,063 5,056 35,961 5,108 36,662 5,722 37,843 6,501 38,119 6,510 37,348 6,048 37,034 5,873 7,417 20,757 3,325 53,167 7,318 20,344 3,345 52,981 7,316 20,298 3,239 53,190 7,624 20,170 3,146 52,943 7,638 20,591 3,113 52,959 7,710 20,731 3,168 53,561 7,599 20,678 3,023 53,404 7,678 20,374 3,109 53,538 6,576 34,838 6,245 34,860 6,242 35,002 6,096 34,982 6,128 35,062 6,017 35,422 5,982 35,436 5,934 35,448 1,872 9,881 1,847 10,029 1,902 10,044 1,818 10,047 1,832 9,937 1,849 10,273 1,832 10,154 1,888 10,268 37 Balances with domestic ban k s................................... 38 Investments in subsidiaries not consolidated......... 39 O ther assets.................................................................... 24,104 15,484 4,901 6,434 1,373 34,801 25,721 14,495 4,893 6,984 1,417 34,135 22,962 13,194 5,082 6,721 1,383 34,379 31,491 13,733 4,871 8,306 1,331 36,252 23,961 11,247 4,824 6,626 1,410 35,756 29,213 15,336 4,859 7,087 1,407 35,883 24,538 13,719 5,037 7,003 1,389 35,147 24,576 12,392 5,175 7,595 1,387 36,313 40 Total assets/total liabilities.......................................... 412,629 413,489 409,765 427,233 415,587 425,887 416,914 419,256 D eposits: Demand deposits......................................................... Individuals, partnerships, and corporations .. States and political subdivisions....................... U.S. G ovt............................................................... Domestic interbank: 120,977 96,413 5,274 1,411 123,302 97,364 5,278 1,926 119,763 95,345 5,408 1,509 132,406 103,379 6,006 993 122,293 97,987 4,925 836 135,291 103,929 5, A ll 6,734 123,498 98,592 5,434 1,576 124,286 98,849 5,638 1,296 12,524 404 12,876 406 12,243 380 15,930 443 13,081 404 13,413 408 12,353 389 12,730 415 229 1,351 3,371 192,174 84,064 240 1,437 3,775 192,489 83,972 232 1,354 3,292 193,240 83,765 248 1,365 4,042 193,363 83,645 261 1,388 3,411 194,545 83,701 241 1,309 3,780 194,093 83,363 232 1,372 3,550 194,646 83,240 214 1,389 3,755 196,307 83,415 82,775 18,724 2,729 3,233 83,090 18,836 2,764 3,177 83,840 19,130 2,758 3,086 84,213 19,002 2,776 3,065 85,163 18,883 2,920 3,201 85,107 18,690 2,929 3,276 85,766 18,650 2,958 3,262 87,053 18,520 2,976 3,423 52,417 50,694 49,721 53,085 50,363 47,722 50,237 50,021 86 2,057 14,562 138 2,069 14,372 149 2,261 14,177 114 2,524 15,059 128 2,698 14,950 784 2,828 14,625 679 2,896 14,398 379 3,231 14,417 30,356 30,425 30,454 30,682 30,610 30,544 30,560 30,615 1 Total loans and investments........................................ 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 Loans: Federal funds sold1................................................... To commercial b anks.......................................... To brokers and dealers involving— U.S. Treasury securities.................................. Other securities................................................. To o th e rs ................................................................ Other, gross................................................................ Commercial and in d u strial................................ A gricultural........................................................... For purchasing or carrying securities: To brokers and dealers: U.S. Treasury securities.............................. Other securities............................................. To others: U.S. Treasury securities.............................. O ther securities............................................. To nonbank financial institutions: Personal and sales finance cos., etc.............. O th e r................................................................... Real estate.............................................................. To commercial banks: Dom estic............................................................. F oreign............................................................... Consumer instalm ent........................................... Foreign governments, official institutions, etc. All other loans....................................................... L ess : Loan reserve and unearned income on loans......................................................... 23 24 25 26 27 28 29 30 31 32 33 Investm ents: U.S. Treasury securities........................................... Bills.......................................................................... Notes and bonds, by m aturity: W ithin 1 year..................................................... 1 to 5 years........................................................ After 5 y ears...................................................... Other securities.......................................................... Obligations o f States and political subdivisions: Tax warrants, short-term notes, and b ills .. All o th er............................................................. Other bonds, corporate stocks, and securities: Certificates o f participation2......................... All other, including corporate stocks.......... 34 Cash items in process o f collection........................... 35 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 Foreign: Governments, official institutions, etc......... Commercial b a n k s........................................... Certified and officers’ checks............................. Time and savings deposits3...................................... Savings4 ................................................................. Time: Individuals, partnerships, and corporations States and political subdivisions................... Domestic in terb an k ......................................... Foreign govts., official institutions, etc........ 56 Federal funds purchased, etc.5 .................................. Borrowings fro m : 57 F. R. B anks................................................................ 58 O th ers.......................................................................... 59 Other liabilities, etc.6 ................................................... 60 Total equity capital and subordinated notes/debentures7 ................................................. 1 Includes securities purchased under agreements to resell. 2 Federal agencies only. 3 Includes time deposits o f U.S. Govt, and o f foreign banks, which are not shown separately. 4 For am ounts o f these deposits by ownership categories, see Table 1.30. 5 Includes securities sold under agreements to repurchase. 6 Includes minority interest in consolidated subsidiaries and deferred tax portion o f reserves for loans. 7 Includes reserves for securities and contingency portion of reserves for loans. Weekly Reporting Banks A23 1.30 LARGE WEEKLY REPORTING COMMERCIAL BANKS Balance Sheet Memoranda Millions o f dollars, Wednesday figures 1977 Account and bank group Total loans (gross) and investments, adjusted1 May 11 May 18 M ay 25 June 1 June 8 June 15 June 22 June 29 2 3 New Y ork City b a n k s ......................................... Banks outside New Y ork C ity .......................... 407,498 89,993 317,505 408,575 91,301 317,274 407,618 90,071 317,547 409,836 90,412 319,424 413,514 90,600 322,914 416,431 92,387 324,044 411,047 89,639 321,408 411,957 90,070 321,887 4 5 6 Total loans (gross), adjusted Large banks............................................................... New Y ork City b a n k s......................................... Banks outside New Y ork C ity .......................... 295,205 67,641 227,564 296,737 68,507 228,230 296,294 67,898 228,396 298,242 68,423 229,819 300,504 68,392 232,112 301,620 69,256 232,364 298,290 67,634 230,656 299,614 68,299 231,315 106, 798 23,860 82,938 105,798 23,019 82,779 106,573 23,524 83,049 109,343 25,351 83,992 107,719 23,304 84,415 111,166 25,235 85,931 109,879 24,848 85,031 110,459 24,775 85,684 60,909 20,961 39,948 61,547 21,299 40,248 62,362 21,368 40,994 62,224 21,044 41,180 62,983 20,786 42,197 62,558 20,338 42,220 63,321 20,593 42,728 64,485 20,737 43,748 39,644 13,978 25,666 39,942 14,016 25,926 40,717 14,128 26,589 40,582 13,768 26,814 41,588 13,942 27,646 41,056 13,547 27,509 41,629 13,690 27,939 42,856 13,930 28,926 21,265 6,983 14,282 21,605 7,283 14,322 21,645 7,240 14,405 21,642 7,276 14,366 21,395 6,844 14,551 21,502 6,791 14,711 21,692 6,903 14,789 21,629 6,807 14,822 25,653 5,020 20,633 I S ,191 5,108 20,684 26,029 5,132 20,897 26,069 5,276 20,793 26,239 5,381 20,858 26,070 5,395 20,675 26,163 5,418 20,745 26,306 5,466 20,840 14,033 3,777 10,256 14,101 3,814 10,287 14,162 3,794 10,368 14,206 3,876 10,330 14,391 3,959 10,432 14,469 4,015 10,454 14,594 4,014 10,580 14,703 4,039 10,664 11,620 1,243 10,377 11,691 1,294 10,397 11,867 1,338 10,529 11,863 1,400 10,463 11,848 1,422 10,426 11,601 1,380 10,221 11,569 1,404 10,165 11,603 1,427 10,176 87,406 9,820 77,586 87,265 9,783 77,482 87,101 9,752 77,349 87,037 .9,732 77,305 87,014 9,716 77,298 86,707 9,688 77,019 86,653 9,688 76,965 86,807 9,681 77,126 5,039 577 4,462 5,071 569 4,502 5,093 570 4,523 5,072 570 4,502 5,130 572 4,558 5,048 566 4,482 5,061 564 4,497 5,180 567 4,613 2,493 504 1,989 2,478 513 1,965 2,357 484 1,873 2,251 433 1,818 2,285 458 1,827 2,334 492 1,842 2,209 451 1,758 2,062 411 1,651 69 42 27 76 53 23 55 35 20 51 31 20 48 30 18 55 35 20 58 38 20 60 .35 25 3,580 2,423 1,157 4,005 2,512 1,493 3,716 2,152 1,564 3,106 1,899 1,207 3,155 1,911 1,244 5,597 4,349 1,248 3,751 2,398 1,353 4,497 2,636 1,861 2,735 210 983 2,733 201 972 2,758 216 991 2,727 204 981 2,698 204 1,053 2,742 216 1,028 2,834 217 1,009 2,844 193 985 Demand deposits, adjusted2 9 Banks outside New Y ork C ity .......................... Large negotiable time CD’s included in time and savings deposits3 T o tal: 11 12 New Y ork C ity ..................................................... Banks outside New Y ork C ity .......................... Issued to IP C ’s: 14 15 New York City B an k s........................................ Banks outside New Y ork C ity .......................... Issued to o th ers: 17 18 New Y ork City b a n k s......................................... Banks outside New Y ork C ity .......................... All other large time deposits4 Total: 19 Large banks.................................................................... 20 New Y ork City b a n k s......................................... 21 Banks outside New Y ork C ity .......................... Issued to IP C ’s: 22 Large banks............................................................... 23 New Y ork City b a n k s......................................... 24 Banks outside New Y ork C ity .......................... Issued to others: 25 Large banks................................................................ 26 New Y ork City b a n k s......................................... 27 Banks outside New Y ork C ity .......................... 28 Savings deposits, by ownership category Individuals and nonprofit organizations: Large banks............................................................... 30 Banks outside New Y ork C ity .......................... Partnerships and corporations for p rofit:5 31 Large banks................................................................ 32 New Y ork City b a n k s......................................... 33 Banks outside New Y ork C ity .......................... Domestic governmental u n its: 35 36 New Y ork City b a n k s......................................... Banks outside New Y ork C ity .......................... All o th e r:6 37 Large banks................................................................ 38 New Y ork City b a n k s......................................... 39 Banks outside New Y ork C ity .......................... 40 41 42 Gross liabilities of banks to their foreign branches Large banks................................................................ New Y ork City b a n k s......................................... Banks outside New Y ork C ity .......................... Loans sold outright to selected institutions by all large banks7 44 45 Real estate................................................................. All o th e r..................................................................... 1 Exclusive o f loans and Federal funds transactions with domestic commercial banks. 2 All demand deposits except U.S. Govt, and domestic commercial banks, less cash items in process o f collection. 3 Certificates o f deposit (C D ’s) issued in denominations o f $100,000 or more. 4 All other time deposits issued in denominations of $100,000 or more (not included in large negotiable C D ’s). 5 Other than commercial banks. « Domestic and foreign commercial banks, and official international organizations. 7 To bank’s own foreign branches, nonconsolidated nonbank af filiates o f the bank, the bank’s holding company (if not a bank), and nonconsolidated nonbank subsidiaries o f the holding company. A24 1.31 Domestic Financial Statistics □ July 1977 LA R G E W EEK LY REPO RTIN G CO M M ERCIAL BA N K S Commercial and Industrial Loans Millions of dollars O utstanding N et change during— 1977 Industry group June 1 June 8 June 15 1977 June 22 June 29 1977 Apr. Q2 Ql June May Total loans classified2 1 T o tal......................................................... 96,038 95,885 96,305 97,453 97,336 -9 1 6 1,542 197 -1 3 6 1,481 2 3 4 5 6 D urable goods m anufacturing: Primary m etals.................................. M achinery........................................... Transportation equipm ent............... Other fabricated metal p ro d u c ts... Other durable g o o d s........................ 2,424 4,804 2,391 1,892 3,482 2,459 4,827 2,385 1,911 3,564 2,475 4,844 2,373 1,957 3,604 2,460 4,970 2,426 1,964 3,651 2,416 4,804 2,398 1,961 3,667 377 108 74 181 90 -1 6 1 38 94 70 323 -1 6 4 17 77 16 110 -7 -3 5 35 -1 8 -1 5 10 56 -1 8 72 228 7 8 9 10 11 N ondurable goods manufacturing: Food, liquor, and tobacco.............. Textiles, apparel, and le a th er......... Petroleum refining............................. Chemicals and ru b b e r...................... O ther nondurable go o d s................. 3,286 3,634 2,498 2,734 2,041 3,266 3,732 2,440 2,724 2,071 3,268 3,778 2,380 2,738 2,059 3,292 3,831 2,493 2,748 2,038 3,328 3,852 2,621 2,757 2,022 -1 5 1 381 -3 0 5 131 147 -2 1 475 285 68 -2 2 -6 3 138 83 84 -2 -1 111 68 -4 8 13 43 226 134 32 -3 3 7,826 7,843 8,033 8,188 8,172 94 757 184 170 403 1,776 6,716 6,727 4,970 1,279 5,458 4,145 11,264 1,621 6,588 6,766 4,934 1,283 5,534 4,182 11,237 1,615 6,641 6,703 4,961 1,316 5,629 4,230 11,293 1,748 6,833 6,764 4,987 1,326 5,669 4,289 11,345 1,703 6,761 6,887 5,037 1,196 5,552 4,267 11,284 204 465 405 -1 4 0 -1 0 -6 1 64 398 -4 3 4 36 380 -1 2 8 -1 5 2 12 294 331 -1 3 1 120 84 -1 4 1 -3 9 -1 5 2 61 121 -2 1 7 -1 2 4 156 -1 4 -6 -3 85 187 -8 6 40 140 27 -1 0 7 167 148 23 7,606 3,711 7,632 3,624 7,609 3,599 7,691 3,587 7,721 3,680 -3 0 3 - 2 ,9 3 0 105 -2 6 3 -1 0 4 14 140 -2 8 3 69 6 5,374 5,262 5,200 5,153 5,250 -1 3 5 -5 4 5 -1 1 6 -3 3 0 -9 9 318 -2 1 6 -3 4 -9 4 -1 0 70 119,439 203 2,648 856 -2 7 1,819 12 Mining, including crude petroleum and natural g a s.............................. Trade: 13 Commodity dealers........................... 14 Other wholesale................................. 15 R etail................................................... 16 T ransportation ....................................... 17 Communication...................................... 18 O ther public utilities............................. 19 C onstruction........................................... 20 Services.................................................... 21 All other domestic lo a n s ..................... 22 Bankers acceptances.............................. 23 Foreign commercial and industrial M em o: 24 Commercial paper included in total classified lo an s1 ................. 25 Total commercial and industrial loans of all large weekly reporting banks.............................. 117,982 117,744 118,371 119,653 1977 1977 Feb. 23 M ar. 30 Apr. 27 May 25 June 29 1977 Q2 Ql Apr. May “ Term” loans classified3 26 T o tal......................................................... 45,735 45,841 45,893 46,107 46,585 630 744 52 214 478 27 28 29 30 31 D urable goods m anufacturing: Primary m etals................................... M achinery........................................... Transportation equipm ent............... O ther fabricated metal p ro d u cts... Other durable goods......................... 1,481 2,551 1,298 815 1,585 1,521 2,552 1,339 820 1,625 1,344 2,499 1,383 841 1,630 1,342 2,490 1,386 826 1,647 1,390 2,522 1,382 839 1,728 204 -3 3 -1 3 44 -1 3 1 -3 0 43 19 103 -1 7 7 -5 3 44 21 5 -2 -9 3 -1 5 17 48 32 -4 13 81 32 33 34 35 36 N ondurable goods manufacturing: Food, liquor, and tobacco.............. Textiles, apparel, and le a th er......... Petroleum refining............................ Chemicals and ru b b e r...................... Other nondurable g oods................. 1,447 1,036 1,901 1,522 987 1,412 1,071 1,770 1,547 1,032 1,374 1,099 1,805 1,589 1,101 1,438 1,163 1,824 1,615 1,172 1,436 1,150 1,940 1,642 1,135 14 -2 7 -2 0 2 103 78 24 79 170 95 103 -3 8 28 35 42 69 64 64 19 26 71 -2 -1 3 116 27 -3 7 5,761 5,856 6,015 6,043 6,375 173 519 159 28 332 219 1,478 2,212 3,830 829 3,869 1,683 5,216 2,352 199 1,479 2,268 3,773 779 3,907 1,661 5,111 2,433 199 1,489 2,274 3,695 802 3,796 1,720 5,188 2,408 202 1,519 2,353 3,604 793 3,796 1,722 5,283 2,465 172 1,506 2,329 3,649 748 3,775 1,838 5,310 2,432 -1 16 223 -1 6 4 -6 8 243 32 113 -1 6 7 -2 7 27 61 -1 2 4 -3 1 -1 3 2 177 199 -1 10 6 -7 8 23 -1 1 1 59 77 -2 5 3 30 79 -9 1 -9 2 95 57 -3 0 -1 3 -2 4 45 -4 5 —21 116 27 -3 3 3,663 3,686 3,642 3,424 3,287 62 -3 9 9 -4 4 -2 1 8 -1 3 7 37 Mining, including crude petroleum and natural g a s.............................. Trade: 38 Commodity dealers........................... 39 Other wholesale................................. 40 R etail................................................... 41 T ransportation....................................... 42 C o m m u n ic atio n .................................. 43 Other public utilities............................. 44 C onstruction.......................................... 45 Services.................................................... 46 All other domestic lo a n s..................... 47 Foreign commercial and industrial lo a n s................................................ 1 Reported for the last Wednesday o f each month. 2 Includes “ term ” loans, shown below. 3 Outstanding loans with an original maturity o f more than 1 year and all outstanding loans granted under a formal agreement—revolving credit or standby—on which the original m aturity of the commitment was in excess o f 1 year. Deposits and Commercial Paper 1.32 A25 G RO SS D E M A N D DEPOSITS o f Individuals, Partnerships, and Corporations Billions o f dollars, estimated daily-average balances All commercial banks Type o f holder 2 Financial business....................................................... 4 Consum er...................................................................... 1972 Dec. 1973 Dec. 1975 1974 Dec. 1976 1977 Sept. Dec. Mar. June Sept. Dec. M ar. 208.0 220.1 225.0 227.0 236.9 227.9 234.2 236.1 250.1 242.3 18.9 109.9 65.4 1.5 12.3 19.1 116.2 70.1 2 .4 12.4 19.0 118.8 73.3 2.3 11.7 19.0 118.7 76.5 2.2 10.6 20.1 125.1 78.0 2.4 11.3 19.9 116.9 77.2 2.4 11.4 20.3 121.2 78.8 2.5 11.4 19.7 122.6 80.0 2.3 11.5 22.3 130.2 82.6 2.7 12.4 21.6 125.1 81.6 2 .4 11.6 All weekly reporting banks 1973 Dec. 1974 Dec. 1977 1976 1975 Dec. Nov. Dec. Jan. Feb. Mar. Apr. May? 7 All holders, I P C .......................................................... 118.1 119.7 124.4 124.3 128.5 127.4 123.0 124.7 127.5 124.4 8 Financial business....................................................... 14.9 66.2 28.0 2 .2 6.8 14.8 66.9 29.0 2 .2 6.8 15.6 69.9 29.9 2.3 6.6 16.2 68.7 30.4 2.5 6.6 17.5 69.7 31.7 2.6 7.1 16.7 69.5 32.0 2.2 7.1 15.6 67.4 31.1 2.4 6.5 16.7 67.8 31.5 2.2 6.5 16.7 68.5 33.5 2.3 6.6 17.0 67.2 31.5 2 .4 6.4 10 C onsum er...................................................................... 12 O ther.............................................................................. N ote .— Figures include cash items in process o f collection. Estimates o f gross deposits are based on reports supplied by a sample o f commercial 1.33 banks. Types of depositors in each category are described in the June 1971 B u l l e t in , p. 466. CO M M ER CIA L PAPER A N D BA N K E R S ACCEPTANCES O U T ST A N D IN G Millions o f dollars, end o f period 1976 Instrum ent 1974 Dec. 1975 Dec. 1977 1976 Dec. Nov. Dec. Jan. Feb. Mar. Apr. May Commercial paper (seasonally adjusted) 1 Financial com panies: 1 Dealer-placed p a p er:2 2 T o ta l...................................................................... 3 Bank-related......................................................... Directly-placed p a p er:3 4 T o tal...................................................................... 5 49,742 48,145 52,623 51,503 52,623 52,778 52,775 54,546 56,715 57,434 4,599 1,814 6,220 1,762 7,271 1,900 6,869 1,825 7,271 1,900 7,053 1,895 6,931 1,929 7,196 1,839 7,286 1,778 7,555 1,805 31,801 6,518 31,230 6,892 32,365 5,959 32,113 5,944 32,365 5,959 32,726 5,637 32,073 5,502 33,873 6,126 34,753 5,703 34,949 5,999 13,342 10,695 12,987 12,521 12,987 12,999 13,771 13,475 14,676 14,930 D ollar acceptances (not seasonally adjusted) 7 T o tal.............................................................................. 18,484 18,727 22,523 20,678 22,523 22,362 22,187 22,694 r22,899 23,201 4,226 3,685 542 7,333 5,899 1,435 10,442 8,769 1,673 9,031 7,706 1,325 10,442 8,769 1,673 8,183 7,011 1,172 7,991 6,654 1,337 7,787 6,367 1,421 r7 ,761 6,309 r 1,381 7,326 6,141 1,108 999 1,109 1,126 293 991 375 188 349 991 375 191 374 322 440 r280 435 881 394 108 385 11 12 H eld by: Accepting banks....................................................... Own b ills.............................................................. Bills b o u g h t......................................................... F.R. Banks: Own account....................................................... Foreign correspondents.................................... 13 O thers........................................................................ 12,150 9,975 13,447 11,111 10,715 13,615 13,434 M4,191 >•13,863 15,382 Based on: 14 Im ports into United S tates.................................. 15 Exports from U nited States................................. 16 All o th er.................................................................... 4,023 4,067 10,394 3,726 4,001 11,000 4,992 4,818 12,713 4,667 4,628 11,383 4,992 4,818 12,713 4,992 5,137 12,233 5,138 5,074 11,974 4,983 5,222 12,489 *•5,114 r5,376 ’•12,410 5,124 5,642 12,436 8 9 10 1 Institutions engaged prim arily in activities such as, but not limited to, commercial, savings, and mortgage banking; sales, personal, and mortgage financing; factoring, finance leasing, and other business lending; insurance underwriting; and other investment activities. 2 Includes all financial company paper sold by dealers in the open market. 3 As reported by financial companies that place their paper directly with investors. 4 Includes public utilities and firms engaged primarily in activities such as communications, construction, manufacturing, mining, wholesale and retail trade, transportation, and services. A26 Domestic Financial Statistics □ July 1977 1.34 PRIME RATE CHARGED BY BANKS on Short-term Business Loans Per cent per annum Effective date M ar. 3 10 18 24 00 00 1975—Feb. Rate 5 10 18 24 8 Va 8 7Va m Effective date 1975—Oct. 27 9Va 9 Nov. Rate M onth m 1975—O ct...................................... N ov..................................... Dec..................................... 7.96 7.53 7.26 1976—Jan...................................... Feb...................................... M ar..................................... A pr..................................... M ay.................................... June.................................... J u ly .................................... A ug..................................... Sept..................................... O ct...................................... 7.00 6.75 6.75 6.75 6.75 7.20 7.25 7.01 7.00 6.78 6.50 6.35 5 m 7 l/4 Dec. 2 1976—Jan. 12 21 June 1 7 7 6 Va 7 IVa M ay 20 71/4 June 9 7 Aug. 2 7 July 18 28 IVa IVi Oct. 4 6 Va Nov. 1 6% Aug. 12 m Sept. 15, 8 Dec. 13 6 Va 1977—May 13. 31. 6 Vi 6 Va Average i D ec..................................... 1977—Jan ...................................... Feb...................................... M ar..................................... A pr...................................... 6.25 6.25 6.25 6.25 6.41 6.75 J u n e ................................... 1.35 INTEREST RATES CHARGED BY BANKS on Business Loans Per cent per annum Size o f loan (in thousands o f dollars) All sizes Center 1-9 1976 Nov. 1976 Aug. 1976 Nov. 100-499 10-99 1976 Aug. 1976 Nov. 1976 Aug. 1976 Nov. 1976 Aug. 500-999 1976 Nov. 1,000 and over 1976 Aug. 1976 Nov. 1976 Aug. Short-term rates 1 All 35 centers.......................... 2 3 4 5 6 7 New Y ork C ity ................... 7 Other N o rth e a st.............. 8 N orth C en tral.................. 7 S outheast.......................... 8 Southw est......................... 4 West C oast....................... 7.28 6.88 7.62 7.28 7.51 7.33 7.52 7.80 7.48 8.18 7.70 7.95 7.75 8.15 8.83 8.56 9.22 8.45 9.13 8.51 8.69 9.06 8.18 8.58 7.66 7.99 7.31 7.84 7.02 7.61 8.85 9.41 8.65 9.33 8.83 9.26 7.94 8.34 8.12 8.48 7.82 8.46 8.40 8.84 8.50 8.76 8.24 8.79 7.43 7.88 7.69 7.71 7.39 7.88 7.91 8.25 7.85 8.00 7.80 8.28 7.24 7.49 7.36 7.04 7.21 7.44 7.77 8.16 7.71 7.85 7.61 8.06 6.74 7.34 7.03 7.07 7.12 7.34 7.36 7.98 7.55 7.54 7.55 8.05 Revolving credit rates 8 All 35 centers........................... 9 10 11 12 13 14 New Y ork C ity................... 7 O ther N o rth east............. 8 N o rth C en tral.................. 7 S outheast.......................... 8 Southw est......................... 4 West C oast....................... 7.19 7.87 8.37 8.70 8.14 8.33 7.60 8.02 7.41 7.80 7.12 7.88 7.18 6.92 7.54 7.05 7.45 7.11 8.14 7.59 7.96 7.48 7.81 7.73 7.23 8.15 8.52 8.31 8.19 8.77 7.25 8.00 8.94 8.75 8.74 9.10 7.86 8.20 8.95 8.09 7.96 7.85 8.26 8.22 9.03 8.40 8.09 8.08 7.21 7.26 8.05 7.56 7.74 7.58 7.70 7.67 8.50 8.16 8.20 7.95 6.97 7.75 7.88 6.77 7.24 7.45 7.56 8.36 7.74 7.47 7.91 7.19 6.75 7.39 6.83 7.39 7.01 8.19 7.47 7.90 7.13 7.80 7.68 8.55 8.13 8.60 7.24 8.40 8.06 7.92 8.99 4.00 8.44 7.78 8.44 7.50 8.36 8.18 8.69 10.00 7.26 5.73 7.32 7.79 7.20 8.03 8.56 8.70 7.92 8.06 8.30 8.46 Long-term rates 15 All 35 centers.......................... 16 17 18 19 20 21 New Y ork C ity................... 7 O ther N ortheast.............. 8 N orth C en tral.................. 7 Southeast.......................... 8 Southw est......................... 4 West C oast....................... 7.48 7.36 6.64 7.66 7.59 7.73 8.04 8.45 8.52 8.62 8.05 8.88 8.42 8.67 9.39 7.19 9.22 9 .20 9.8 7 10.54 8.70 9.61 9.40 8.83 9.60 10.85 9.28 N ote .— W eigh ted -avera g e rates b a se d o n sa m p le o f lo a n s m a d e during first 7 d a y s o f th e survey m o n th . 8.88 8.55 8.84 9.03 9.35 9.05 8.54 9.02 8.27 9.43 9.07 9.08 9.04 8.58 8.14 7.93 7.95 8.35 7.93 8.28 8.31 8.05 8.93 8.26 9.88 8.23 8.81 Securities Markets 1.36 IN TER EST RATES A27 M oney and Capital Markets Averages, per cent per annum Instrum ent 1974 1975 1977 1976 Mar. Apr. 1977, week ending— May June June 4 June 11 June 18 June 25 July 2 Money m arket rates 1 2 Prime commercial paper 1 90- to 119-day.............................................. 4- to 6-m onth............................................... 10.05 9.87 6.26 6.33 5.24 5.35 4.75 4.87 4.75 4.87 5.26 5.35 5.42 5.49 5.48 5.53 5.48 5.51 5.40 5.50 5.40 5.48 5.38 5.44 3 Finance company paper, directly placed, 3- to 6-month 2........................................ 8.62 6.16 5.22 4.77 4.81 5.13 5.38 5.38 5.38 5.38 5.38 5.38 4 Prime bankers acceptances, 90-day 3.......... 9.92 6.30 5.19 4.80 4.78 5.34 5.39 5.42 5.42 5.41 5.39 5.35 5 Federal funds 4................................................. 10.51 5.82 5.05 4.69 4.73 5.35 5.39 5.36 5.31 5.37 5.43 5.43 Large negotiable certificates o f deposit 6 3-month, secondary m arket 5................... 7 3-month, prim ary m arket 6....................... 10.27 6.43 5.26 5.15 4.83 4.74 4.81 4.72 5.20 5.13 5.42 5.35 5.50 5.40 5.46 5.38 5.42 5.35 5.39 5.30 5.40 5.30 8 Euro-dollar deposits, 3-month 7................... 10.96 6.97 5.57 5.13 5.16 5.70 U.S. Govt, securities Bills: 8 M arket yields: 3-m onth................................................. 6-m onth................................................. 1-year..................................................... Rates on new issue: 3-m onth................................................. 6-m onth................................................. 7.84 7.95 7.71 5.80 6.11 6.30 4.98 5.26 5.52 4.60 4.88 5.19 4.54 4.80 5.10 4.96 5.20 5.43 5.02 5.21 5.41 5.03 5.23 5.42 5.06 5.24 5.43 5.01 5.20 5.40 5.01 5.22 5.41 4.97 5.19 5.39 7.886 7.926 5.838 6.122 4.989 5.266 4.613 4.883 4.540 4.790 4.942 5.193 5.004 5.198 4.993 5.192 5.048 5.234 5.000 5.167 5.012 5.222 4.965 5.173 8.25 6.70 5.84 5.50 5.37 5.81 5.76 5.83 5.80 5.75 5.74 5.68 8.18 6.76 5.88 5.50 5.44 5.84 5.80 5.86 5.83 5.80 5.79 5.72 9 10 11 12 13 14 Notes and bonds m aturing in— 9 9 to 12 m o n th s......................................... Constant m aturities: 1o Capital market rates Government notes and bonds U.S. Treasury: Constant m aturities: 1o 2-yea r 3-yea r 5-year............................ 7-year............................ 10-year.......................... 20-year.......................... 30-year.......................... 7.82 7.80 7.71 7.56 8.05 7.49 7.77 7.90 7.99 8.19 6.31 6.77 7.18 7.42 7.61 7.86 6.09 6.47 6.93 7.20 7.46 7.73 7.80 5.96 6.31 6.79 7.11 7.37 7.67 7.73 6.25 6.55 6.94 7.26 7.46 7.74 7.80 6.13 6.39 6.76 7.05 7.28 7.64 7.64 6.20 6.49 6.87 7.17 7.38 7.68 7.74 6.16 6.46 6.84 7.13 7.35 7.68 7.68 6.11 6.35 6.72 7.01 7.24 7.63 7.61 6.11 6.35 6.72 7.01 7.25 7.63 7.61 6.07 6.32 7.81 6.99 7.55 6.98 6.94 6.78 6.73 7.20 6.58 7.14 6.76 7.17 6.58 6.99 6.71 7.10 6.68 7.07 6.56 6.96 6.54 6.95 6.49 ' 6.90 5.89 6.53 6.17 6.42 7.62 7.05 5.66 7.49 6.64 5.21 6.41 5.89 5.18 6.27 5.73 5.23 6.23 5.75 5.21 6.05 5.62 5.26 6.16 5.72 5.20 6.12 5.65 5.20 6.02 5.55 6.00 5.20 5.61 5.18 5.95 5.56 9.03 9.57 9.01 8.51 8.49 8.47 8.38 8.45 8.42 8.36 8.35 8.32 8.57 8.84 9.20 9.50 8.83 9.17 9.65 10.61 8.43 8.75 9.09 9.75 8.10 8.28 8.55 9.12 8.04 8.28 8.55 9.07 8.05 8.28 8.55 9.01 7.95 8.19 8.46 8.91 8.00 8.27 8.53 8.98 7.98 8.24 8.52 8.95 7.94 8.19 8.43 8.89 7.94 8.14 8.42 8.8 8 7.91 8.11 8.40 8.87 Aaa utility b o n d s: 14 New issue....................... Recently offered issues. 9.33 9.34 9.40 9.41 8.48 8.49 8.25 8.29 8.26 8.22 8.33 8.31 8.08 8.12 8.15 8.25 8.22 8.11 8.01 8.06 8.07 8.07 8.03 Common stocks Dividend/price ra tio : 35 Preferred stocks............ 36 Common sto ck s........... 8.23 4.47 8.38 4.31 7.97 3.77 7.56 4.37 4.47 7.60 4.39 7.63 7.62 4.60 7.60 4.69 7.68 4.63 7.68 4.57 7.61 4.54 7.51 4.56 23 24 25 26 27 Notes and bonds maturing in— 9 3 to 5 years.................................. Over 10 years (long-term )......... State and local: 11 M oody’s series: B a a ..................... Bond Buyer series Corporate bonds Seasoned issues 13 All industries......... By rating g roups: A a a ..................... A a ....................... A ......................... B a a ..................... 33 34 1 Averages o f the m ost representative daily offering rate quoted by dealers. 2 Averages o f the m ost representative daily offering rates published by finance companies for varying maturities in this range. 3 Beginning Aug. 15, 1974, the rate is the average o f the midpoint of the range o f daily dealer closing rates offered for domestic issues; prior data are averages o f the m ost representative daily offering rate quoted by dealers. 4 Weekly figures are 7-day averages o f daily effective rates for the week ending W ednesday; the daily effective rate is an average o f the rates on a given day weighted by the volume o f transactions at these rates. 5 Averages o f the daily midpoints as determined from the range o f offering rates in the secondary market. 6 Posted rates, which are the annual interest rates most often quoted on new offerings o f negotiable C D ’s in denominations o f $100,000 or more. R ates prior to 1976 not available. Weekly figures are for Wednes day dates. 7 Averages o f daily quotations for the week ending Wednesday. 6.68 6.98 7.22 7.57 7.57 8 Except for new bill issues, yields are computed from daily closing bid prices. Yields for all bills are quoted on a bank-discount basis. 9 Unweighted averages for all outstanding notes and bonds in maturity ranges shown, based on daily closing bid prices. “ Long-term” includes all bonds neither due nor callable in less than 10 years. Yields on the more actively traded issues adjusted to constant maturities by the U.S. Treasury, based on daily closing bid prices. 11 General obligations only, based on figures for Thursday, from M oody’s Investors Service. 12 Twenty issues of mixed quality. 13 Averages of daily figures from M oody’s Investors Service. 14 Compilation of the Board o f Governors o f the Federal Reserve System. Issues included are long-term (20 years or more). New-issue yields are based on quotations on date o f offering; those on recently offered issues (included only for first 4 weeks after termination o f underwriter price restrictions); on Friday close-of-business quotations. A28 1.37 Domestic Financial Statistics □ July 1977 STOCK M A R K ET Selected Statistics 1976 Indicator 1974 1975 1977 1976 Dec. Jan. Feb. M ar. A pr. May June 53,96 58.13 43.25 41.14 54.80 54.31 58.44 43.29 41.59 55.15 Prices and trading (averages o f daily figures) Common stock prices 1 New York Stock Exchange (Dec. 31,1965 = 50). 2 In d u strial.................................................................. 3 T ran sp o rtatio n ........................................................ 4 U tility ....................................................................... 5 Finance..................................................................... 43.84 48.08 31.89 29.82 49.67 45.73 51.88 30.73 31.45 46.62 54.45 60.44 39.57 36.97 52.94 56.34 61.54 41.77 40.61 57.45 56.28 61.26 41.93 41.13 57.86 54.93 59.65 40.59 40.86 55.65 54.67 59.56 40.52 40.18 54.84 53.92 58.47 41.51 40.24 54.30 6 Standard & Poor’s Corporation (1941-43 = 10)1.. 82.85 85.17 102.01 104.66 103.81 100.96 100.57 99.05 98.76 99.29 7 American Stock Exchange (Aug. 31,1973 = 100). 79.97 83.15 101.63 104.06 111.04 112.17 111.77 111.70 113.72 116.28 Volume of trading (thousands of shares)2 New York Stock Exchange.................................. American Stock Exchange................................... 13,883 1,908 18,568 2,150 21,189 2,565 23,621 3,095 23,562 3,268 19,310 2,830 17,814 2,580 17,380 2,500 18,700 2,440 20,478 2,720 8 9 Custom er financing (end-of-period balances, in millions of dollars) 11 12 13 14 15 16 17 18 10 Regulated margin credit at brokers/dealers and banks3................................................ Brokers, total..................................................... M argin stock4.............................................. Convertible bonds....................................... Subscription issues...................................... Banks, total....................................................... Margin stocks............................................... Convertible bonds........................................ Subscription issues...................................... 4,836 3,980 3,840 137 3 856 815 30 11 6,500 5,540 5,390 147 3 960 909 36 15 '9,011 8,166 7,950 204 2 r845 '800 '30 '15 9,011 8,166 7,960 204 2 r845 '800 '30 '15 9,301 8,469 8,270 196 3 r832 '788 27 17 9,523 8,679 8,480 197 2 r844 '799 '28 17 9,701 8,891 8,690 199 2 '810 '767 '25 '18 9,887 9,078 8,880 196 2 809 766 25 18 10,068 9,267 9,070 196 1 801 761 25 15 19 Unregulated nonmargin stock credit at banks5 2,064 2,281 '2,817 '2,817 '2,8 4 4 '2,850 '3,3 9 0 2,878 2,886 M emo: Free credit balances at brokers6 20 M argin-account................................................ 21 Cash-account.................................................... 410 1,425 475 1,525 585 1,855 585 1,855 645 1,930 605 1,815 605 1,720 '615 '1,715 625 1,710 M argin-account debt at brokers (percentage distribution, end o f period) 22 T o tal.......................................... 23 24 25 26 27 28 By equity class (in per cent): Under 4 0 ............................... 40-49..................................... 50-59..................................... 60-69...................................... 70-79...................................... 80 or m o re............................ 100.0 100.0 45.4 23.0 13.9 24.0 28.8 22.3 8.8 4.6 4.3 11.6 6.9 5.3 100.0 100.0 100.0 100.0 100.0 100.0 100.0 15.0 28.8 28.0 13.0 8.3 5.8 17.6 34.9 23.4 11.3 7.3 5.5 16.5 36.8 23.2 16.5 34.1 25.4 11.6 11.8 6.8 17.8 35.6 23.0 11.0 7.0 5.0 12.0 12.0 23.0 35.0 15.0 8.7 23.0 35.0 15.0 8.7 6.0 6.0 6.7 5.3 5.4 Special miscellaneous-account balances at brokers (end o f period) 29 T otal balances (millions o f dollars) 8 . .. , D istribution by equity status (per cent) 30 N et credit s tatu s.................................... D ebit status, equity of— 31 60 per cent or m o re .......................... 32 Less than 60 per cen t....................... 7,290 8,776 8,776 9,070 9,170 9,350 9,300 41.1 43.8 41.3 41.3 42.3 42.9 42.3 41.4 41.0 46.0 11.7 46.3 12.4 46.3 12.6 32.4 26.5 40.8 15.4 1 Effective July 1976 includes a new financial group, banks and in surance companies. W ith this change the index includes 400 industrial stocks (formerly 425), 20 transportation (formerly 15 rail), 40 public utility (formerly 60), and 40 financial. 2 Based on trading for a 5 Vi-hour day. 3 M argin credit includes all credit extended to purchase or carry stocks or related equity instruments and secured at least in part by stock. C redit extended by brokers is end-of-month data for member firms of the New Y ork Stock Exchange; June data for banks are universe totals; all other data for banks are estimates for all commercial banks based on data from a sample o f reporting banks. In addition to assigning a current loan value to margin stock generally, Regulations T and U permit special loan values for convertible bonds and stock acquired through exercise o f subscription rights. 4 A distribution o f this total by equity class is shown below. 9,360 7,010 47.8 10.9 47.8 10.9 46.6 11.1 45.5 11.6 5 N onmargin stocks are those not listed on a national securities ex change and not included on the Federal Reserve System’s list of over-thecounter margin stocks. At banks, loans to purchase or carry nonmargin stocks are unregulated; at brokers, such stocks have no loan value. 6 Free credit balances are in accounts with no unfulfilled commitments to the brokers and are subject to withdrawal by customers on demand. 7 Each custom er’s equity in his collateral (market value o f collateral less net debit balance) is expressed as a percentage of current collateral values. 8 Balances that may be used by customers as the margin deposit re quired for additional purchases. Balances may arise as transfers based on loan values of other collateral in the custom er’s margin account or deposits o f cash (usually sales proceeds) occur. N o te .—For table on “ Margin Requirements” see p. A-10, Table 1.161. Thrift Institutions 1.38 SA V IN G S IN ST IT U T IO N S A29 Selected Assets and Liabilities Millions o f dollars, end o f period 1976 1974 1975 1977 1976 Sept. Account Nov. Oct. Dec. Jan. Feb. | Mar. A pr. r May Savings and loan associations 1 Assets........................................ 295,545 338,233 391,999 379,747 385,013 389,173 391,999 398,299 403,591 409,357 414,425 421,873 2 M ortgages................................ 249,301 278,590 323,130 311,847 315,742 319,273 323,130 326,056 329,086 333,703 338,984 344,642 3 Cash and investment 30,853 35,660 35,209 36,442 36,605 35,660 38,252 23,251 39,505 39,656 39,060 40,470 32,829 33,295 33,209 33,991 35,998 36,381 35,000 36,761 4 O ther.......................................... 22,993 28,790 33,209 32,691 5 Liabilities and net worth........ 295,545 338,233 391,999 379,747 385,013 389,173 391,999 398,299 403,591 409,357 414,425 421,873 6 7 8 9 10 11 Savings capital......................... 242,974 285,743 336,030 323,800 327,252 329,833 336,030 341,211 344,616 352,194 354,318 357,958 18,256 18,283 18,880 19,857 Borrowed money...................... 24,780 20,634 19,087 19,083 18,810 18,715 19,087 18,455 17,524 15,571 15,832 15,636 15,708 15,029 15,708 14,661 14,325 14,809 15,007 FH LBB................................. 21,508 3,251 3,110 3,379 3,174 3,144 3,379 3,272 3,426 3,595 3,958 4,071 4,850 O ther...................................... 5,128 6,836 6,688 6,735 6,753 6,836 3,244 6,718 6,783 7,351 7,899 8,504 Loans in process..................... 8,779 6,949 8,015 11,918 8,015 10,531 6,105 9,667 11,418 8,833 10,350 12,250 O ther.......................................... 12 N et w orth2............................... 18,442 19,779 22,031 21,398 21,685 21,954 22,031 22,248 22,518 22,696 22,978 23,304 13 M emo : M ortgage loan com mitments outstanding3.. 7,454 10,673 14,828 15,449 15,319 15,467 14,828 15,079 16,796 19,304 21,241 22,253 M utual savings banks 14 A ssets........................................ 109,550 121,056 134,702 131,413 132,455 133,361 134,812 135,906 137,307 138,901 139,496 15 16 17 18 19 20 21 L oans: M ortgage.............................. 74,891 3,812 O ther..................................... Securities: 2,555 U.S. G ovt.............................. 930 State and local government. Corporate and other4........ 22,550 2,167 C a sh .......................................... 2,645 Other assets.............................. 77,221 4,023 81,554 5,192 80,145 5,478 80,543 5,549 80,884 5,801 81,630 5,183 81,826 5,956 81,982 6,254 82,273 6,389 82,653 6,088 4,740 1,545 27,992 2,330 3,205 5,911 2.420 33,676 2,374 3,574 5,851 2,359 32,432 1,581 3,567 5,796 2,429 32,793 1,695 3,649 5,836 2,466 33,074 1,668 3,632 5,840 2,417 33,793 2,355 3,593 5,917 2,295 34,475 1,800 3,637 6,096 2,366 35,088 1,835 3,686 6,360 2,431 35,928 1,823 3,668 6,323 2,504 36,323 1,900 3,704 22 Liabilities.................................. 109,550 121,056 134,702 131,413 132,455 133,361 134,812 135,906 137,307 138,901 139,496 23 24 25 26 27 28 29 30 D evosits.................................... R egular:5.............................. Ordinary savings............. Time and o th e r............... O ther..................................... Other liabilities....................... General reserve acco u n ts.. . . M emo : Mortgage loan commitments outstanding6 .. 98,701 109,873 122,802 119,590 120,360 120,971 122,877 123,864 124,728 126,687 126,938 98,221 109,291 121,874 118,510 119,346 120,125 121,961 122,874 123,721 125,624 125,731 64,286 69,653 74,483 73,484 73,610 73,857 74,535 74,621 75,038 76,260 76,336 33,935 39,639 47,391 45,027 45,736 46,268 47,426 48,253 48,683 49,364 49,395 928 582 1,080 1,014 480 916 989 846 1,007 1,063 1,207 2,755 2,853 2,898 3,140 2,884 2,888 3,376 2,940 3,368 2,939 3,230 8,428 9,047 8,925 8,955 7,961 9,052 9,102 9,015 9,211 9,275 9,329 2,040 1,803 2,439 2,671 2,548 2,553 2,439 2,584 2,840 3,161 3,287 Life insurance companies 31 A ssets........................................ 263,349 289,304 321,552 312,873 314,845 317,499 321,552 323,407 325,094 326,753 328,786 Securities: 32 33 34 35 36 37 38 39 40 41 42 10,900 13,758 17,942 17,450 18,019 18,390 17,942 18,198 18,443 18,470 18,500 5,419 5,821 5,992 5,368 5,368 3,372 4,736 5,537 5,592 5,546 5,544 5,463 5,594 5,406 5,594 5,533 5,657 3,667 4,508 5,709 5,732 5,758 State and local................. 6,735 4,514 6,980 6,625 6,865 6,980 7,004 7,142 3,861 7,192 7,198 F oreign8........................... 119,637 135,317 157,246 152,088 153,291 154,382 157,246 159,213 160,463 161,214 162,816 97,717 107,256 122,984 118,918 120,610 121,763 122,984 125,910 127,603 128,596 130,057 32,619 34,262 33,303 32,860 32,618 32,759 34,262 33,170 32,681 Stocks................................ 21,920 28,061 M ortgages................................ Real estate................................ Policy loans.............................. O ther assets.............................. 86,234 8,331 22,862 15,385 89,167 9,621 24,467 16,971 91,552 10,476 25,834 18,502 90,202 10,130 25,494 17,509 90,293 10,231 25,594 17,417 90,794 10,244 25,695 17,994 91,552 10,476 25,834 18,502 91,566 10,556 25,911 17,963 91,585 10,629 26,034 17,940 91,786 10,738 26,207 18,338 92,200 10,802 26,364 18,104 Credit unions 43 Total assets/liabilities and capital............................. Federal............................. State................................. 31,948 16,715 15,233 38,037 20,209 17,828 44,897 24,164 20,733 43,079 23,198 19,881 43,415 23,283 20,132 44,089 23,668 20,421 44,835 24,164 20,671 44,906 24,188 20,718 45,798 24,756 21,042 47,111 25,596 21,515 47,348 25,697 21,651 48,322 26,259 22,063 46 Loans outstanding................. 47 Federal............................. 48 State................................. 24,432 12,730 11,702 28,169 14,869 13,300 34,033 18,022 16,011 33,093 17,458 15,635 33,275 17,522 15,753 33,732 17,786 15,946 34,293 18,202 16,091 34,188 18,081 16,107 34,549 18,275 16,274 35,411 18,776 16,635 36,019 19,050 16,969 36,936 19,583 17,353 49 Savings.................................... 50 Federal (shares)............... 51 State (shares and deposits) 27,518 14,370 13,148 33,013 17,530 15,483 39,264 21,149 18,115 37,436 20,167 17,269 37,854 20,358 17,496 38,281 20,597 17,684 38,968 20,980 17,988 39,344 21,165 18,179 39,981 21,559 18,442 41,161 22,346 18,815 41,394 22,524 18,870 42,125 22,955 19,170 44 45 For notes see bottom of page A30. A30 Domestic Financial Statistics □ July 1977 1.39 FEDERAL FISCAL AND FINANCING OPERATIONS Millions o f dollars Fiscal year Type o f account or operation 1975 1976 Transition quarter (JulySept. 1976) Calendar year 1975 H2 U.S. Budget Receipts................................................ O u tla y s1,2.......................................... Surplus, or deficit ( —) ................. . Trust fu n d s..................................... Federal funds 3............................. . 280,997 326,105 -4 5 ,1 0 8 7,419 -5 2 ,5 2 6 300,005 366.466 -6 6 ,4 6 1 2,409 -6 8 ,8 7 0 81,773 94,746 -1 2 ,9 7 3 - 1 ,9 5 2 Off-budget entities surplus, or deficit ( —) 6 Federal Financing Bank outlays. . 7 O th e r 1,4 ............................................ -6 ,3 8 9 - 1 ,6 5 2 1 2 3 4 5 U.S. Budget plus off-budget, in cluding Federal Financing Bank Surplus, or deficit ( —) ..................... Financed by: 9 Borrowing from the public 2. . . 10 Cash and monetary assets (de crease, or increase ( —) ) . . . . 11 Other 5............................................ 8 M em o items: 12 Treasury operating balance (level, end of period)........................................ 13 F.R. B anks........................................ 14 Tax and loan accounts................... 15 Other demand accounts 6............... 1977 1976 H2 Apr. M ay 11,021 139,455 185,097 -4 5 ,6 4 2 -3 ,1 2 5 -4 2 ,5 1 7 160,552 181,369 -2 0 ,8 1 6 5,503 -2 6 ,3 2 0 157,961 193,719 -3 5 ,7 5 8 -4 ,6 2 1 -3 1 ,1 3 7 25,171 34,646 -9 ,4 7 5 -1 ,4 4 1 - 8 ,0 3 3 40,016 35,547 4,469 647 3,822 27,672 33,715 - 6 ,0 4 3 7,542 -1 3 ,5 8 4 -5,915 -1,355 -2 ,5 7 5 793 -2 ,6 9 3 -2 3 6 -3 ,2 2 2 -1 ,1 1 9 -5 ,1 7 6 3,809 -8 4 3 -8 3 581 -1 1 4 -2 9 9 245 -53,149 -73,731 -14,755 -4 8 ,5 7 1 -25,158 -37,125 -10,402 4,936 - 6 ,0 9 7 50,867 82,922 18,027 49,361 33,561 35,457 5,351 1,206 -2 ,8 7 1 -3 2 0 2,602 -7 ,7 9 6 -1 ,3 9 6 -2,899 -3 7 3 -2 ,0 4 6 1,256 -7 ,9 0 9 -4 9 5 2,153 -4 8 5 5,610 -5 5 9 - 9 ,4 2 2 3,280 11,268 - 2 ,3 0 0 7,591 5,773 1,475 343 14,836 11,975 2,854 7 17,418 13,299 4,119 8,452 7,286 1,159 7 14,836 11,975 2,854 7 11,670 10,393 1,277 9,023 7,149 1,874 17,763 13,628 4,135 6,992 5,836 1,156 - 1 Outlay totals reflect the reclassification o f the Export-Im port Bank from off-budget status to unified budget status. 2 Export-Im port Bank certificates o f beneficial interest (effective July 1, 1975) and loans to the Private Export Funding Corp. (PEFCO), a wholly owned subsidiary o f the Export-Im port Bank are treated as debt rather than asset sales. 3 H alf years calculated as a residual o f total surplus/deficit and trust fund surplus/deficit. 4 Includes Pension Benefit G uaranty Corp., Postal Service Fund, Rural Electrification and Telephone Revolving Fund, R ural Telephone Bank, and Housing for the Elderly or H andicapped Fund. 5 Includes: Public debt accrued interest payable to the public; deposit funds; miscellaneous liability (including checks outstanding) and asset accounts; seignorage; increment on gold; net gain/loss for U.S. currency valuation adjustm ent; net gain/loss for IM F valuation adjustment. 6 Excludes the gold balance but includes deposits in certain commercial depositories that have been converted from a time deposit to a demand deposit basis to permit greater flexibility in Treasury cash management. S o u r c e .— “ M onthly Treasury Statement of Receipts and Outlays o f the U.S. Governm ent,” Treasury Bulletin, and U.S. Budget, Fiscal Year 1978. NOTES TO TABLE 1.38 1 Stock o f the Federal Home Loan Bank Board (FHLBB) is included in “other assets.” 2 Includes net undistributed income, which is accrued by most, but not all, associations. 3 Excludes figures for loans in process, which are shown as a liability. 4 Includes securities o f foreign governments and international organiza tions and nonguaranteed issues o f U.S. Govt, agencies. 5 Excludes checking, club, and school accounts. 6 Commitments outstanding (including loans in process) o f banks in New York State as reported to the Savings Banks Assn. o f the State of New York. 7 Direct and guaranteed obligations. Excludes Federal agency issues not guaranteed, which are shown in this table under “ business” securities. 8 Issues o f foreign governments and their subdivisions and bonds of the International Bank for Reconstruction and Development. N o t e . —Savings and loan associations: Estimates by the FHLBB for all associations in the United States. D ata are based on monthly reports o f Federally insured associations and annual reports o f other associations. Even when revised, data for current and preceding year are subject to further revision. Mutual savings banks: Estimates of N ational Association o f M utual Savings Banks for all savings banks in the U nited States. D ata are re ported on a gross-of-valuation-reserves basis. Life insurance companies: Estimates o f the Institute o f Life Insurance for all life insurance companies in the United States. Annual figures are annual-statement asset values, with bonds carried on an amortized basis and stocks at year-end market value. Adjustments for interest due and accrued and for differences between market and book values are not made on each item separately but are included, in total, in “ other assets.” Credit unions: Estimates by the N ational Credit Union A dministration for a group of Federal and State-chartered credit unions that account for about 30 per cent o f credit union assets. Figures are preliminary and revised annually to incorporate recent benchmark data. Federal Finance A31 1.40 U.S. BUDGET RECEIPTS AND OUTLAYS Millions o f dollars Calendar year Fiscal year Transition quarter (JulySept. 1976) Source or type 1977 H2 HI H2 Apr. May Receipts 1 All sources.............................................. 280,997 300,005 81,773 139,455 160,552 157,961 25,171 40,016 27,672 2 3 4 122,386 122,071 131,603 123,408 38,801 32,949 65,835 59,549 65,767 63,859 75,094 68,023 6,131 12,961 18,660 11,797 9,413 12,993 32 34,296 34,013 34 35,528 27,367 1 6,809 958 7,649 1,362 33 27,879 26,004 1 8,426 1,356 10 2,719 9,559 7 14,581 7,725 6 2,092 5,678 45,747 5,125 46,783 5,374 9,808 1,348 18,810 2,735 27,973 2,639 20,706 2,886 9,131 412 8,461 488 1,465 369 86,441 92,714 25,760 40,886 51,828 47,596 7,412 10,703 14,203 71,789 76,391 21,534 35,443 40,947 40,427 6,569 6,670 9,912 3,417 6,771 4,466 3,518 8,054 4,752 269 2,698 1,259 268 2,861 2,314 3,250 5,193 2,438 286 4,379 2,504 290 126 428 2,328 1,296 409 248 3,582 461 16,551 3,676 4,611 6,711 16,963 4,074 5,216 8,026 4,473 1,212 1,455 1,612 8,761 1,927 2,573 3,397 8,204 2,147 2,643 4,630 8,910 2,361 2,943 3,236 1,283 466 625 534 1,392 393 376 517 1,485 427 501 548 Individual income taxes, net............... W ithheld............................................ Presidential Election Campaign F u n d ........................................... N onwithheld...................................... 5 6 R efunds.............................................. 7 Corporation income taxes: Gross receipts.................................... 8 9 R efunds.............................................. 10 Social insurance taxes and contribu tions, net......................................... Payroll employment taxes and 11 contributions 1 .......................... 12 Self-employment taxes and contributions 1......................... 13 Unemployment insurance............... 14 Other net receipts 2 ......................... 15 16 17 18 Excise taxes............................................ Custom s.................................................. Estate and g ift....................................... Miscellaneous receipts 3 ..................... Outlays 19 All types 4 .......................................... 326,105 366,466 94,746 185,097 181,369 193,719 34,646 35,547 33,715 20 21 22 N ational defense.............................. International affairs 4 ..................... General science, space, and technology.................................. N atural resources, environment, and energy................................. A griculture........................................ 86,585 5,862 89,996 5,067 22,518 1,997 46,214 2,574 44,052 2,668 45,002 3,028 8,572 521 7,976 548 8,555 284 3,989 4,370 1,161 2,415 1,708 2,377 403 356 350 9,537 1,660 11,282 2,502 3,324 584 5,018 1,489 6,900 417 7,206 2,019 1,180 564 1,077 737 1,239 138 Commerce and tran sp o rtatio n .. . . Community and regional developm ent.............................. Education, training, employment, and social services................... H e alth ................................................. Income security................................ 16,010 17,248 4,700 11,496 5,766 9,643 1,265 1,316 1,586 4,431 5,300 1,530 2,548 2,411 3,192 496 579 525 15,248 27,647 108,605 18,167 33,448 127,406 5,013 8,720 32,796 8,423 16,681 61,655 9,116 17,008 65,336 9,083 19,329 65,456 1,645 2,674 13,045 1,604 3,241 11,632 1,628 3,317 11,568 16,597 30 Veterans benefits and services. . . . 2,942 31 Law enforcement and justice......... 3,089 32 General government........................ 33 Revenue sharing and general purpose fiscal assistance......... 7,005 30,974 34 Interest5.............................................. 35 U ndistributed offsetting receipts 5- 6 -1 4 ,0 7 5 18,432 3,320 2,927 3,962 859 878 9,010 1,589 1,929 9,450 1,784 870 8,542 1,839 1,734 1,611 292 284 1,684 305 113 1,625 285 488 7,119 34,589 -1 4 ,7 0 4 2,024 7,246 -2 ,5 6 7 3,528 15,180 -4 ,6 5 2 3,664 18,560 - 8 ,3 4 0 4,729 18,409 - 7 ,8 6 9 31 2,522 -4 5 9 2,103 2,751 -4 7 5 45 2,690 -6 0 9 23 24 25 26 27 28 29 1 Old-age, disability and hospital insurance, and Railroad Retirement accounts. 2 Supplementary medical insurance premiums, Federal employee re tirement contributions and Civil Service retirement and disability fund. 3 Deposits o f earnings by F.R. Banks and other miscellaneous receipts. 4 Outlay totals reflect the reclassification o f the Export-Im port Bank from off-budget status to unified budget status. Export-Im port Bank certificates o f beneficial interest (effective July 1, 1975) and loans to the Private Export Funding Corp. (PEFCO), a wholly owned subsidiary o f the Export-Im port Bank, are treated as debt rather than asset sales. 5 Effective September 1976, “ Interest” and “ U ndistributed Offsetting Receipts” reflect the accounting conversion for the interest on special issues for U.S. Govt, accounts from an accrual basis to a cash basis. 6 Consists o f interest received by trust funds, rents and royalties on the Outer Continental Shelf, and U.S. Govt, contributions for em ployee retirement. A32 1.41 Domestic Financial Statistics □ July 1977 F ED ER A L D EBT SUBJECT TO STA TUTO RY LIM ITATIO N Billions o f dollars 1973 1974 1975 1976 Item Dec. 31 June 30 Dec. 31 June 30 Dec. 31 1977 June 30 Sept. 30 Dec. 31 M ar. 31 1 Federal debt outstanding....................... 480.7 486.2 504.0 544.1 587.6 631.9 2 646.4 665.5 680.1 2 Public debt securities.............................. 3 Held by p u b lic.................................... 4 Held by agencies................................ 469.1 339.4 129.6 474.2 336.0 138.2 492.7 351.5 141.2 533.7 387.9 145.3 576.6 437.3 139.3 620.4 470.8 149.6 634.7 488.6 146.1 653.5 506.4 147.1 669.2 524.3 144.9 5 Agency securities..................................... 6 Held by p u b lic............... ..................... 7 Held by agencies................................ 11.6 12.0 11.3 9.3 2 .0 10.9 9 .0 1.9 10.9 8.9 2 .0 11.5 9.5 2 .0 11.6 12.0 10.0 1.9 10.9 9.1 1.8 9 .6 2 .0 10.0 2 .0 29 . 7 1.9 8 Debt subject to statutory lim it.............. 470.8 476.0 493.0 534.2 577.8 621.6 635.8 654.7 670.3 9 Public debt securities............................. 10 O ther debt i .............................................. 468.4 2.4 473.6 2.4 490.5 2.4 532.6 1.6 576.0 1.7 619.8 1.7 634.1 1.7 652.9 1.7 668.6 1.7 11 M em o: Statutory debt lim it................. 475.7 495.0 495.0 577.0 595.0 636.0 636.0 682.0 682.0 1 Includes guaranteed debt o f Govt, agencies, specified participation certificates, notes to international lending organizations, and D istrict of Columbia stadium bonds. 2 Gross Federal debt and Agency debt held by the public increased 1.42 G RO SS PU BLIC D EBT OF U .S. TR E A SU R Y $0.5 billion due to a retroactive reclassification of the E xport-Im port Bank certificates of beneficial interest from loan asset sales to debt, effective July 1, 1975. N o t e . —D ata from Treasury Bulletin (U.S. Treasury Dept.). Types and Ownership Billions of dollars, end of period Type and holder 1 Total gross public debt1........................................... 1973 469.9 1974 492.7 1977 1975 576.6 1976 653.5 Feb. Mar. Apr. M ay 663.3 669.2 671.0 672.1 By type: 467.8 270.2 107.8 124.6 37.8 197.6 2 .3 26.0 60.8 108.0 491.6 282.9 119.7 129.8 33.4 208.7 2.3 22.8 63.8 119.1 575.7 363.2 157.5 167. 1 38.6 212.5 2.3 21.6 67.9 119.4 652.5 421.3 164.0 216.7 40.6 231.2 2.3 22.3 72.3 129.7 662.3 431.6 164.2 225.9 41.6 230.7 2.3 22.1 73.0 127.8 668.2 435.4 164.3 229.6 41.5 232.8 668.5 434.1 162.0 230.7 41.4 234.4 671.0 431.4 157.9 230.2 43.3 239.5 22.1 73.4 128.2 21.9 73.9 129.0 21.8 74.3 133.0 By holder:® 12 U.S. Govt, agencies and trust funds................. 13 F.R. B an k s............................................................. 129.6 78.5 141.2 80.5 139.3 87.9 147.1 97.0 144.4 95.8 145.0 96.0 145.5 99.8 14 15 16 17 18 19 Private investors..................................................... Commercial banks............................................ M utual savings b a n k s...................................... Insurance com panies........................................ Other corporations........................................... State and local governm ents.......................... 261.7 60.3 2.9 6.4 10.9 29.2 271.0 55.6 2.5 6.1 11.0 29.2 349.4 85.1 4 .5 9 .3 20.2 33.8 409.5 102.5 5.5 12.3 25.5 41.6 423.1 104.5 5.7 12.2 27.9 42.3 428.3 106.0 5.2 12.2 26.0 43.4 425.7 103.5 5.2 12.1 26.3 46.9 20 21 Individuals: Savings bonds................................................ Other securities.............................................. 60.3 16.9 63.4 21.5 67.3 24.0 72.0 28.8 72.8 28.7 72.8 29.1 73.6 28.6 22 23 Foreign and international7............................. Other miscellaneous investors8...................... 55.5 19.3 58.4 23.2 66.5 38.6 78.1 43.2 82.3 46.7 84.7 48.9 85.9 43.6 3 4 5 6 7 8 9 10 11 M arketable............................................................. Bills...................................................................... N o tes................................................................... Bonds................................................................... Nonmarketable2 ..................................................... Convertible bonds3 .......................................... Foreign issues4................................................... Savings bonds and n o te s................................. 1 Includes $1.0 billion o f non-interest-bearing debt (of which $611 million on June 30, 1977, was not subject to statutory debt limitations). 2 Includes (not shown separately): Securities issued to the Rural Electrification A dm inistration and to State and local governments, de positary bonds, retirement plan bonds, and individual retirement bonds. 3 These nonmarketable bonds, also known as Investment Series B Bonds, may be exchanged (or converted) at the owner’s option for 1Vi per cent, 5-year marketable Treasury notes. Convertible bonds that have been so exchanged are removed from this category and recorded in the notes category above. 4 N onmarketable certificates o f indebtedness, notes, and bonds in the Treasury foreign series and foreign-currency series. 5 Held only by U.S. Govt, agencies and trust funds. 2.2 2.2 2.2 June 674.4 673,4 431 1 155.1 232.9 43.2 242.2 2 ,2 21.7 74.7 134.8 6 D ata for F.R. Banks and U.S. Govt, agencies and trust funds are actual holdings; data for other groups are Treasury estimates. 7 Consists of the investments o f foreign balances and international accounts in the United States. Beginning with 1974, the figures exclude non-interest-bearing notes issued to the International M onetary Fund. 8 Includes savings and loan associations, nonprofit institutions, cor porate pension trust funds, dealers and brokers, certain Govt, deposit accounts, and Govt.-sponsored agencies. N o t e . —Gross public debt excludes guaranteed agency securities and, beginning in July 1974, includes Federal Financing Bank security issues. D ata by type o f security from Monthly Statement o f the Public Debt o f the United States, U.S. Treasury D ept.; data by holder from Treasury Bulletin. Federal Finance A33 1.43 U.S. GOVERNMENT MARKETABLE SECURITIES Ownership, by maturity Par value; millions o f dollars, end o f period 1977 Type o f holder 1975 1975 1976 Apr. 1977 1976 May Apr. All maturities M ay 1 to 5 years 1 All holders....................................................................................... 363,191 421,276 434,065 431,447 112,270 141,132 144,528 143,011 2 U.S. G ovt, agencies and trust fu n d s......................................... 3 F. R. B anks.................................................................................... 19,347 87,934 16,485 96,971 15,528 99,837 15,434 97,394 7,058 30,518 6,141 31,249 5,950 31,649 5,949 30,239 4 Private investors............................................................................. 5 Commercial b a n k s.................................................................... 6 M utual savings banks............................................................... 7 Insurance com panies................................................................ 8 Nonfinancial corporations...................................................... 9 Savings and loan associations................................................ 10 State and local governm ents.................................................. 11 All o th e rs.................................................................................... 255,860 64,398 3,300 7,565 9,365 2,793 9,285 159,154 307,820 78,262 4,072 10,284 14,193 4,576 12,252 184,182 318,699 78,234 4,510 9,959 14,448 5,288 16,102 190,159 318,619 77,048 4,450 10,158 13,607 5,170 16,201 191,985 74,694 29,629 1,524 2,359 1,967 1,558 1,761 35,894 103,742 40,005 2,010 3,885 2,618 2,360 2,543 50,321 106,929 43,089 2,141 3,810 3,530 2,521 4,590 47,247 106,823 41,129 2,093 4,088 3,120 2,662 4,573 49,157 Total, within 1 year 5 to 10 years i 12 All holders....................................................................................... 199,692 211,035 216,788 213,662 26,436 43,045 45,806 45,972 13 U.S. Govt, agencies and trust fu n d s......................................... 14 F. R. Banks..................................................................................... 2,769 46,845 2,012 51,569 1,910 52,459 1,821 49,630 3,283 6,463 2,879 9,148 2,145 10,192 2,141 11,172 15 Private investors............................................................................. 16 Commercial b a n k s.................................................................... 17 M utual savings banks............................................................... 18 Insurance com panies................................................................ 19 Nonfinancial corporations....................................................... 20 Savings and loan associations................................................ 21 State and local governm ents................................................... 22 All o th ers.................................................................................... 150,078 29,875 983 2,024 7,105 914 5,288 103,889 157,454 31,213 1,214 2,191 11,009 1,984 6,622 103,220 162,419 27,270 1,357 1,756 10,250 2,511 8,690 110,585 162,211 28,622 1,407 1,720 9,861 2,297 8,747 109,556 16,690 4,071 448 1,592 175 216 782 9,405 31,018 6,278 567 2,546 370 155 1,465 19,637 33,469 7,156 32,658 6,576 654 2,791 380 140 1,253 20,865 Bills, within 1 year 111 2,833 422 184 1,240 20,917 10 to 20 years 23 All holders....................................................................................... 157,483 163,992 161,977 157,931 14,264 11,865 11,685 11,656 24 U.S. Govt, agencies and trust fu n d s......................................... 25 F. R. B anks.................................................................................... 207 38,018 449 41,279 285 41,689 280 40,065 4,233 1,507 3,102 1,363 3,102 1,410 3,102 1,374 26 Private investors............................................................................. 27 Commercial b a n k s.................................................................... 28 M utual savings banks............................................................... 29 Insurance companies................................................................. 30 Nonfinancial corporations....................................................... 31 32 State and local governm ents................................................... 33 All o th ers.................................................................................... 119,258 17,481 554 1,513 5,829 518 4,566 88,797 122,264 17,303 454 1,463 9,939 1,266 5,556 86,282 120,003 11,218 476 816 8,771 1,515 7,255 89,951 117,597 11,410 445 728 8,178 1,268 6,916 88,651 8,524 552 232 1,154 61 82 896 5,546 7,400 339 139 1,114 142 64 718 4,884 7,173 320 135 1,085 171 56 666 4,741 7,180 301 134 1,076 159 56 663 4,790 Other, within 1 year Over 20 years 34 All holders....................................................................................... 42,209 47,043 54,811 55,731 10,530 14,200 15,258 17,146 35 U.S. Govt, agencies and trust fu n d s......................................... 2,562 8,827 1,563 10,290 1,625 10,770 1,541 9,576 2,053 2,601 2,350 3,642 2,421 4,127 2,421 A,919 37 Private investors............................................................................. Commercial b a n k s.................................................................... 38 39 M utual savings banks............................................................... 40 41 Nonfinancial corporations....................................................... 42 Savings and loan associations................................................ 43 State and local governm ents.................................................. 44 All o th ers.................................................................................... 30,820 12,394 429 511 1,276 396 722 15,092 35,190 13,910 760 728 1,070 718 1,066 16,938 42,416 16,052 881 940 1,479 996 1,435 20,634 44,614 17,212 962 992 1,683 1,029 1,831 20,905 5,876 271 112 436 57 22 558 4,420 8,208 A ll 143 548 55 13 904 6,120 8,709 399 161 475 73 15 917 6,669 9,746 419 162 483 87 15 965 7,616 N o t e . — Direct public issues only. Based on Treasury Survey o f Owner ship from Treasury Bulletin (U.S. Treasury Dept.). D ata complete for U.S. Govt, agencies and trust funds and F.R. Banks, but data for other groups include only holdings o f those institutions that report. The following figures show, for each category, the number and proportion reporting as o f May 31, 1977; (1) 5,498 commercial banks, 467 mutual savings banks, and 724 insurance companies, each about 90 per cent; (2) 447 nonfinancial corporations and 486 savings and loan assns., each about 50 per cent; and (3) 499 State and local govts., about 40 per cent. “ All others,” a residual, includes holdings o f all those not reporting in the Treasury Survey, including investor groups n o t listed separately. A34 1.44 Domestic Financial Statistics □ July 1977 U .S. G O V E R N M E N T SECURITIES D EA LER S Transactions Par value; averages o f daily figures, in millions o f dollars 1977 1977. week ending Wednesday— Item 1974 1975 1976 M ar. Apr. May M ay 25 June 1 June 8 June 15 June 22 June 29 1 U.S. Govt, securities............... 3,579 6,027 10,449 11,128 13,597 10,306 '10,555 8,874 7,725 10,037 7,445 9,052 By maturity: Bills........................................ Other within 1 y e ar........... 1-5 y ears.............................. 5-10 years............................ Over 10 years...................... 2,550 250 465 256 58 3,889 223 1,414 363 138 6,676 210 2,317 1,019 229 7,445 234 2,373 883 193 8,829 215 2,727 1,592 235 6,495 183 1,981 1,322 325 '6,607 122 '2,632 945 249 5,809 244 1,992 658 170 4,851 167 1,727 653 327 5,707 239 2,356 1,280 455 4,083 171 1,896 926 369 4,895 230 2,305 1,081 541 By type of customer: U.S. Govt, securities dealers.......................... 8 U.S. Govt, securities brokers......................... 9 Commercial b a n k s............. 10 All o th ers1........................... 652 885 1,360 1,492 1,523 1,059 1,068 994 1,077 1,125 739 N /A 965 998 964 1,750 1,451 1,941 3,407 2,426 3,257 3,300 2,528 3,808 4,795 2,705 4,575 3,975 2,095 3,177 4,274 2,176 '3,036 2,898 1,972 3,010 2,043 1,786 2,817 3,331 2,350 3,232 2,025 1,606 3,075 N /A N /A N /A 11 Federal agency securities. . . . 965 1,043 1,548 '1 , 589 '2,0 0 8 1,786 '2,285 1,945 1,800 2,281 2,030 2,342 2 3 4 5 6 7 1 Includes—among others—all other dealers and brokers in commodi Transactions are market purchases and sales of U.S. Govt, securities ties and securities, foreign banking agencies, and the F.R. System. dealers reporting to the F.R. Bank o f New York. The figures exclude allotments of, and exchanges for, new U.S. Govt, securities, redemptions N o t e .— Averages for transactions are based on num ber of trading days of called or m atured securities, or purchases or sales o f securities under in the period. repurchase, reverse repurchase (resale), or similar contracts. 1.45 U .S. G O V E R N M E N T SECURITIES DEA LER S Positions and Sources o f Financing Par value; averages o f daily figures, in millions o f dollars 1977, week ending Wednesday— 1977 Item 1974 1975 1976 Apr. Mar. May Apr. 20 A pr. 27 May 4 May 11 May 18 M ay 25 Positions2 1 U.S. Govt, securities............... 2,580 5,884 7,592 5,266 5,911 3,900 7,667 2,860 3,489 3,657 3,581 3,584 2 3 4 5 6 1,932 4,297 -6 265 265 886 302 1 300 88 | 136 6,290 188 515 402 198 4,864 237 -1 4 52 128 5,215 253 211 101 131 3,786 198 -1 0 1 -7 0 87 6,566 278 403 216 203 2,279 280 237 -8 3 148 3,128 221 335 -2 0 1 6 3,459 217 -1 3 1 -3 1 143 3,871 183 -4 3 2 -1 2 3 82 3,647 230 -2 5 9 -1 1 1 76 729 383 '687 539 1,049 648 429 397 597 481 Bills........................................ Other within 1 y e a r........... 1-5 y ears.............................. 5-10 y ears............................ Over 10 y ears...................... 7 Federal agency securities. . . . 1,212 943 Sources o f financing 3 8 All sources............................... 3,977 6,666 8,715 9,433 '10,301 9,351 12,799 9,020 8,920 9,423 9,976 9,338 Commercial banks: New York C ity................... Outside New Y ork C ity ... C orporations1......................... All o th e r................................... 1,032 1,064 459 1,423 1,621 1,466 842 2,738 1,896 1,660 1,479 3,681 1,552 1,910 2,131 3,839 1,948 2,174 1,891 '4,288 881 1,735 1,806 4,929 2,761 2,629 2,141 5,268 1,757 1,383 1,674 4,207 1,029 1,123 1,343 5,426 707 1,712 1,623 5,381 861 1,906 1,898 5,312 840 1,711 2,103 4,683 9 10 11 12 1A11 business corporations except commercial banks and insurance companies. 2 Net amounts (in terms o f par values) o f securities owned by nonbank dealer firms and dealer departments o f commercial banks on a commit ment, that is, trade-date basis, including any such securities that have been sold under agreements to repurchase. The maturities of some repurchase agreements are sufficiently long, however, to suggest that the securities involved are not available for trading purposes. Securities owned, and hence dealer positions, do not include securities purchased under agree ments to resell. 3 Total amounts outstanding o f funds borrowed by nonbank dealer firms and dealer departments o f commercial banks against U.S. Govt, and Federal agency securities (through both collateral loans and sales under agreements to repurchase), plus internal funds used by bank dealer departments to finance positions in such securities. Borrowings against securities held under agreement to resell are excluded where the borrowing contract and the agreement to resell are equal in am ount and m aturity, that is, a matched agreement. N o t e . —Averages for positions are based on num ber o f trading days in the period; those for financing, on the number o f calendar days in the period. Federal Finance 1.46 F E D E R A L A N D F ED ER A LLY SPO N SO R E D CREDIT AG ENC IES A35 D ebt Outstanding Millions o f dollars, end o f period 1965 Agency 1973 1974 1977 1975 Nov. Dec. Jan. Feb. M ar. Apr. 1 Federal and Federally sponsored agencies............ 71,594 89,381 97,680 r103,381 >•103,274 r103,502 102,976 103,688 105,594 2 Federal agencies......................................................... 3 Defense D ep artm en t1.......................................... 4 Export-Im port B ank2, 3....................................... 5 Federal Housing A dm inistration4..................... 6 G overnment N ational M ortgage Association participation certificates 5........................... 7 Postal Service6 ....................................................... 8 Tennessee Valley A u th o rity ................................ 9 United States Railway Association6................. 11,554 1,439 2,625 415 12,719 1,312 2,893 440 19,046 1,220 7,188 564 r22,611 1,117 8,336 585 r22,385 1,113 8,574 575 22,183 1,095 8,557 579 22,322 1,086 8,580 581 22,428 1,077 8,615 592 22,477 1,068 8,610 598 4,390 250 2,435 4,280 721 3,070 3 4,200 1,750 3,915 209 *•4,111 3,498 4,865 99 >■4,086 2,998 4,935 104 3,860 2,998 4,985 109 3,860 2,998 5,005 212 3,860 2,998 5,070 216 3,818 2,998 5,155 230 10 Federally sponsored agencies.................................... 11 Federal home loan banks.................................... 12 Federal Home Loan Mortgage C o rp o ratio n .. 13 Federal National M ortgage A ssociation........ 14 Federal land b a n k s ............................................... 15 Federal intermediate credit banks..................... 16 Banks for cooperatives......................................... 17 Student Loan M arketing A ssociation7............. 18 O th e r........................................................................ 60,040 15,362 1,784 23,002 10,062 6,932 2,695 200 3 76,662 21,890 1,551 28,167 12,653 8,589 3,589 220 3 78,634 18,900 1,550 29,963 15,000 9,254 3,655 310 2 80,770 16,807 1,150 30,413 17,127 10,669 4,207 395 2 80,889 16,811 1,150 30,565 17,127 10,494 4,330 410 2 81,321 16,805 1,350 30,394 17,304 10,631 4,425 410 2 80,654 16,587 957 30,143 17,304 10,556 4,695 410 2 81,260 16,626 957 30,392 17,304 10,670 4,899 410 2 83,117 16,678 957 30,684 18,137 10,990 5,254 415 2 4,474 17,154 27,028 28,711 29,848 30,328 31,312 30,823 500 220 895 3 4,595 1,500 310 1,840 209 4,768 3,248 395 2,890 99 5,208 2,748 410 3,110 104 5,208 2,748 410 3,160 109 5,237 2,748 410 3,180 212 5,273 2,748 410 3,245 216 5,273 2,748 415 3,330 230 7,000 566 1,134 10,250 1,674 3,704 10,750 1,768 4,613 11,450 1,509 5,254 11,450 1,584 5,507 11,750 1,677 5,993 11,750 1,806 5,271 M em o item s: 19 Federal Financing Bank debt6, 8 ............................. Lending to Federal and Federally sponsored agencies: 20 Export-Im port B ank3 .......................................... 21 Postal Service6 ....................................................... 22 Student Loan M arketing A ssociation7............ 23 Tennessee Valley A u th o rity ................................ 24 United States Railway Association6 ................. 25 26 27 O ther lending:9 Farmers Home A dm inistration......................... R ural Electrification A dm inistration................ O ther........................................................................ 2,500 356 1 Consists o f mortgages assumed by the Defense D epartm ent between 1957 and 1963 under family housing and homeowners assistance programs. 2 Includes participation certificates reclassified as debt beginning Oct. 1, 1976. 3 Off-budget Aug. 17, 1974 through Sept. 30, 1976; on-budget thereafter. 4 Consists o f debentures issued in payment o f Federal Housing Ad m inistration insurance claims. Once issued, these securities may be sold privately on the securities market. 5 Certificates o f participation issued prior to fiscal 1969 by the Govern ment N ational M ortgage Association acting as trustee for the Farmers Home Administration; D epartm ent o f H ealth, Education, and Welfare; D epartm ent o f Housing and U rban Development; Small Business A d ministration; and the Veterans Administration. 6 Off-budget. 7 Unlike other Federally sponsored agencies, the Student Loan Marketing Association may borrow from the Federal Financing Bank (FFB) since its obligations are guaranteed by the D epartm ent o f Health, Education, and Welfare. 8 The FFB, which began operations in 1974, is authorized to purchase or sell obligations issued, sold, or guaranteed by other Federal agencies. Since FFB incurs debt solely for the purpose o f lending to other agencies, its debt is not included in the main portion of the table in order to avoid double counting. 9 Includes FFB purchases o f agency assets and guaranteed loans; the latter contain loans guaranteed by numerous agencies with the guarantees of any particular agency being generally small. The Farmers Home Administration item consists exclusively of agency assets, while the R ural Electrification Administration entry contains both agency assets and guaranteed loans. A36 1.47 Domestic Financial Statistics □ July 1977 N EW SEC U R ITY ISSU ES State and Local Government and Corporate Millions o f dollars 1976 Type o f issue or issuer, or use 1974 1975 1977 1976 Dec. Jan. Feb. M ar. Apr. M ay State and local government 1 All issues, new and refunding 1.................................................. 24,315 30,607 35,313 2,352 3,429 3,150 4,140 3,566 4,167 By type of issue: General obligation................................................................... Revenue...................................................................................... Housing Assistance Administration 2................................. U.S. Govt, lo a n s...................................................................... 13,563 10,212 461 79 16,020 14,511 18,040 17,140 1,176 1,166 1,867 1,552 1,624 1,518 1,812 2,323 1,701 1,862 1,994 2,169 76 133 10 10 8 5 3 4 By type o f issuer: 6 State............................................................................................ 7 Special district and statutory a u th o rity .............................. 8 Municipalities, counties, townships, school districts. . . . 4,784 8,638 10,817 7,438 12,441 10,660 7,054 15,304 12,845 361 1,251 732 468 1,786 1,166 441 1,335 1,367 705 1,818 1,612 769 1,388 1,407 875 1,724 1,565 9 Issues for new capital, to ta l........................................................ 23,508 29,495 32,108 1,847 3,084 3,019 3,209 2,938 3,674 By use o f proceeds: E ducation.................................................................................. T ransportation.......................................................................... Utilities and conservation...................................................... Social w elfare............................................................................ Industrial a id ............................................................................ Other purposes......................................................................... 4,730 1,712 5,634 3,820 494 7,118 4,689 2,208 7,209 4,392 445 10,552 4,900 2,586 9,594 6,566 483 7,979 334 107 723 233 63 387 489 104 1,050 483 15 943 502 410 935 580 12 580 472 180 804 600 38 1,115 248 119 703 658 42 1,168 474 506 1,210 392 127 965 2 3 4 5 10 11 12 13 14 15 Corporate 16 All issues 3........................................ 38,313 53,619 53,356 6,480 3,989 2,708 5,495 17 Bonds................................................ 32,066 42,756 42,262 5,560 3,387 1,888 4,300 19 By type o f offering: Public............................................ Private placement....................... 25,903 6,160 32,583 10,172 26,453 15,808 2,568 2,992 2,786 601 1,108 780 2,610 1,690 20 21 22 23 24 25 By industry group: M anufacturing............................ Commercial and miscellaneous Transportation........................... Public utility................................ C om m unication.......................... Real estate and financial.......... 9,867 1,845 1,550 8,873 3,710 6,218 16,980 2,750 3,439 9,658 3,464 6,469 13,243 4,361 4,357 8,297 2,787 9,222 2,275 696 564 560 196 1,271 817 743 165 634 50 979 568 346 47 210 290 426 1,049 454 243 756 808 991 26 Stocks............................................... 6,247 10,863 11,094 920 602 820 1,195 By type: 27 Preferred...................................... 28 C om m on...................................... 2,253 3,994 3,458 7,405 2,789 8,305 308 612 103 499 128 692 520 675 By industry group: M anufacturing............................ Commercial and miscellaneous T ransportation........................... Public utility................................ Com m unication.......................... Real estate and financial.......... 544 940 22 3,964 217 562 1,670 1,470 1 6,235 1,002 488 2,237 1,183 24 6,101 776 771 110 198 89 136 175 94 596 352 is 25 225 267 60 76 114 125 842 18 29 30 31 32 33 34 1 Par amounts o f long-term issues based on date o f sale. 2 Only bonds sold pursuant to the 1949 Housing Act, which are secured by contract requiring the Housing Assistance Administration to make annual contributions to the local authority. 3 Figures, which represent gross proceeds o f issues maturing in more than 1 year, sold for cash in the United States, are principal am ount or number o f units multiplied by offering price. Excludes offerings o f less 38 than $100,000, secondary offerings, undefined or exempted issues as defined in the Securities Act o f 1933, employee stock plans, investment companies other than closed-end, intracorporate transactions, and sales to foreigners. S o u r c e s . —State and local government securities, Securities Industry Association; corporate securities, Securities and Exchange Commission. Corporate Finance 1.48 CO RPO RATE SECURITIES A37 N et Change in Am ounts Outstanding Millions o f dollars 1976 1975 Source o f change, or industry 1974 1975 1976 Q2 Q3 Q4 Q1 Q2 Q3 Q4 All issues1 1 New issues.................................................................... 39,344 2 R etirem ents.................................................................. 9,935 3 Net change.................................................................... 29,399 53,255 10,991 42,263 53,123 12,184 40,939 15,602 3,211 12,390 9,079 2,576 6,503 13,363 3,116 10,247 13,671 2,315 11,356 14,229 3,668 10,561 11,385 2,478 8,907 13,838 3,723 10,115 Bonds and notes 4 New issues................................................................... 5 R etirem ents.................................................................. 6 Net change: T otal....................................................... 31,354 6,255 25,098 40,468 8,583 31,886 38,994 9,109 29,884 11,460 2,336 9,124 6,654 2,111 4,543 9,595 2,549 7,047 9,404 1,403 8,001 10,244 3,159 7,084 8,701 1,826 6,875 10,645 2,721 7,924 By industry: M anufacturing.................................................... Commercial and o th er2.................................... Transportation, including railroad................. Public utility ....................................................... Com m unication.................................................. Real estate and financial.................................. 7,404 1,116 341 7,308 3,499 5,428 13,219 1,605 2,165 7,236 2,980 4,682 8,978 2,259 3,078 6,829 1,687 7,054 4,574 483 429 1,977 810 852 1,442 221 147 1,395 472 866 2,069 528 1,588 1,211 429 1,222 2,966 203 985 1,820 498 1,530 1,529 726 488 1,260 953 2,128 1,551 610 1,092 2,109 335 1,178 2,932 720 513 1,640 -9 9 2,218 Common and preferred stock 13 New issues................................................................... 14 R etirem ents.................................................................. 15 Net change: T o tal....................................................... 7,980 3,678 4,302 12,787 2,408 10,377 14,129 3,075 11,055 4,142 875 3,266 2,425 465 1,960 3,768 567 3,200 4,267 912 3,355 3,985 509 3,477 2,684 652 2,032 3,193 1,002 2,191 By industry: M anufacturing................................. .................. Commercial and o th er2.................................... Transportation, including railroad................. Public u tility........................................................ Com m unication.................................................. Real estate and financial.................................. 17 -1 3 5 -2 0 3,834 398 207 1,607 1,137 65 6,015 1,084 468 2,634 762 96 6,171 854 538 500 490 7 1,866 359 43 412 108 53 1,043 97 247 433 462 4 1,537 604 160 838 88 5 2,174 47 203 1,120 318 25 1,300 735 -2 1 744 117 17 932 19 203 -6 8 239 49 1,765 53 153 7 8 9 10 11 12 16 17 18 19 20 21 1 Excludes issues o f investment companies. 2 Extractive and commercial and miscellaneous companies. N o te .—Securities and Exchange Commission estimates o f cash trans actions only, as published in the Commission’s Statistical Bulletin. 1.49 O PE N -E N D IN V EST M EN T CO M PANIES New issues and retirements exclude foreign sales and include sales of securities held by affiliated companies, special offerings to employees, new stock issues and cash proceeds connected with conversions o f bonds into stocks. Retirements, defined in the same way, include securities retired with internal funds or with proceeds o f issues for that purpose. N et Sales and Asset Position Millions o f dollars 1977 1976 Item 1975 1976 Nov. Dec. Jan. Feb. Mar. Apr. May INVESTM ENT COMPANIES excluding money market funds 1 2 3 Sales o f own shares1............................................ Redemptions o f own shares2 ............................ Net sales................................................................. 3,302 3,686 -3 8 4 4,226 6,802 2,496 446 419 27 661 628 33 655 628 141 423 463 -4 0 463 553 -9 0 r558 r468 r63 421 531 -1 1 0 4 5 6 Assets3 .................................................................... Cash position4.................................................. O ther................................................................... 42,179 3,748 38,431 47,537 2,747 44,790 45,369 2,635 42,734 47,537 2,747 44,790 45,760 2,958 42,802 45,040 3,260 41,780 44,516 3,474 41,042 44,862 '2,776 '42,086 44,403 2,859 41,544 1 Includes reinvestment o f investment income dividends. Excludes reinvestment o f capital gains distributions and share issue o f conversions from one fund to another in the same group. 2 Excludes share redem ption resulting from conversions from one fund to another in the same group. 3 M arket value at end o f period, less current liabilities. 4 Also includes all U.S. Govt, securities and other short-term debt securities. N o t e . — Investment Company Institute data based on reports o f mem bers, which comprise substantially all open-end investment companies registered with the Securities and Exchange Commission. D ata reflect newly formed companies after their initial offering o f securities. A38 1.50 Domestic Financial Statistics □ July 1977 CO RPO RATE PRO FITS A N D TH EIR D ISTR IBU TIO N Billions o f do llars; quarterly data are at seasonally adjusted annual rates. 1974 Account 1975 1975 1976 Q3 1976 Q4 Ql Q2 1977 Q3 Q4 Ql 1 Profits before ta x .......................................................... 127.6 114.5 147.9 126.9 131.3 141.1 146.2 150.2 154.2 160.0 2 Profits tax liability....................................................... 3 Profits after ta x ............................................................. 52.4 75.2 49.2 65.3 64.4 83.5 54.8 72.1 57.2 74.1 61.4 79.7 63.5 82.7 65.1 85.1 67.4 86.8 68.8 91.2 4 D ividends........................................................................ 5 U ndistributed profits................................................... 30.8 44.4 32.1 33.2 35.2 48.3 32.6 39.5 32.2 41.9 33.1 46.6 34.4 48.3 35.4 49.7 37.7 49.1 37.6 53.6 6 Capital consumption allowances............................... 7 N et cash flow............................. ................................... 81.6 126.0 89.4 122.6 97.3 145.6 90.5 130.0 92.9 134.8 94.3 140.9 96.2 144.5 98.2 147.9 100.5 149.6 102.6 156.2 S o u r c e . — U .S . Dept, o f Commerce, Survey o f Current Business. 1.51 N O N F IN A N C IA L CO RPO RATIO N S Current Assets and Liabilities Billions o f dollars, end o f period I A ccount 1972 1971 1973 1975 1974 1976 Q3 Q4 Ql Q2 Q3 Q4 1 Current assets.............................................................. 529.4 574.4 643.2 712.2 716.5 731.6 753.5 775.4 791.8 816.8 2 3 4 5 6 7 8 Notes and accounts receivable.............................. U.S. G o v t.1......................................................... O ther..................................................................... Inventories............................................................... O th e r......................................................................... 53.3 11.0 221.1 3.5 217.6 200.4 43.8 57.5 10.2 243.4 3.4 240.0 215.2 48.1 61.6 11.0 269.6 3.5 266.1 246.7 54.4 62.7 11.7 293.2 3.5 289.7 288.0 56.6 65.6 14.3 298.0 3.3 294.7 279.6 59.0 68.1 19.4 298.2 3.6 294.6 285.8 60.0 68.4 21.7 310.9 3.6 307.3 288.8 63.6 70.8 23.3 321.8 3.7 318.1 295.6 63.9 71.1 23.9 328.5 4.3 324.2 302.1 66.3 77.0 26.4 328.2 4 .3 323.9 315.4 69.8 9 Current liabilities......................................................... C ash .......................................................................... 326.0 352.2 401.0 450.6 444.7 457.5 465.9 475.9 484.1 499.9 Notes and accounts payable.................................. U.S. G o v t.1......................................................... O th er..................................................................... Accrued Federal income tax es............................ O th e r......................................................................... 220.5 4.9 215.6 13.1 92.4 234.4 4 .0 230.4 15.1 102.6 265.9 4.3 261.6 18.1 117.0 292.7 5.2 287.5 23.2 134.8 279.6 6.2 273.4 19.4 145.6 288.0 6.4 281.6 20.7 148.8 286.9 6.4 280.5 23.9 155.0 293.8 6.8 287.0 22.0 160.1 291.7 7 .0 284.7 24.9 167.5 302.9 7 .0 295.9 26.8 170.2 15 Net working cap ital.................................................... 203.6 221.3 242.3 261.5 271.8 274.1 287.6 299.5 307.7 316.9 10 11 12 13 14 1 Receivables from, and payables to, the U.S. Govt, exclude amounts S o u r c e . —Securities and Exchange Commission estimates published offset against each other on corporations’ books. in the Commission’s Statistical Bulletin. 1.52 BUSINESS EX PE N D IT U R E S on New Plant and Equipment Billions o f dollars; quarterly data are at seasonally adjusted annual rates. 1975 Industry 1976 1977 1976 1975 Q4 Ql Q2 Q3 Q4 Ql Q2 Q3 2 1 All industries................................................................ 112.75 120.82 111.80 114.72 118.12 122.55 125.22 130.16 134.46 136.91 M anufacturing 2 Durable goods industries...................................... 3 Nondurable goods industries.............................. 21.88 26.13 23.50 29.22 21.07 25.75 21.63 27.58 22.54 28.09 24.59 30.20 25.50 28.93 26.30 30.13 26.42 32.20 28.30 33.46 Nonmanufacturing M ining...................................................................... Transportation : 5 R ailroad............................................................... 4 3.80 3.98 3.82 3.83 3.83 4.21 4.13 4.24 4.42 4.54 7 2.56 1.87 3.03 2.35 1.31 3.56 2.39 1.65 3.56 2.08 1.18 3.29 2.64 1.44 4.16 2.69 1.12 3.44 2.63 1.41 3.49 2.71 1.62 2.96 2.69 1.52 2.39 2.37 1.94 2.43 16.99 3.14 12.76 20.61 18.90 3.47 12.93 20.87 17.92 3.00 12.22 20.44 18.56 3.36 12.54 20.68 18.82 3.03 12.62 20.94 18.22 3.45 13.64 20.99 19.49 3.96 14.30 21.36 21.19 4.16 14.19 22.67 21.09 4.56 > 39.16 21.58 4 .14 38.14 8 9 10 11 O ther..................................................................... Public utilities: Electric................................................................. Gas and o th er..................................................... Communication...................................................... Commercial and other *........................................ 1 Includes trade, service, construction, finance, and insurance. 2 Anticipated by business. N o t e . —Estimates for corporate and noncorporate business, excluding agriculture; real estate operators; medical, legal, educational, and cultural service; and nonprofit organizations. S o u r c e .— U .S . Dept, of Commerce, Survey o f Current Business. Corporate Finance 1.521 DOMESTIC FINANCE COMPANIES A39 Assets and Liabilities Billions o f dollars, end o f period 1972 Account 1973 1976 1975 1974 1977 Q3 Q4 Ql Q2 Q3 Q4 Ql ASSETS Accounts receivable, gross C onsum er................................................................. B usiness.................................................................... Total...................................................................... L e ss: Reserves for unearned income and losses Accounts receivable, n e t........................................... Cash and bank deposits............................................ Securities...................................................................... All o th er........................................................................ 31.9 27.4 59.3 7.4 51.9 2.8 .9 10.0 35.4 32.3 6 7.7 8.4 59.3 2.6 .8 10.6 36.1 37.2 73.3 9 .0 64.2 3.0 .4 12.0 35.4 38.6 74.1 9 .2 64.8 3.1 .8 11.7 36.0 39.3 75.3 9 .4 65.9 2.9 1.0 11.8 35.7 41.2 76.9 9 .4 67.4 2.8 .8 12.5 36.7 42.4 79.2 9.8 69.4 2.7 .8 12.4 37.6 42.4 80.0 10.2 69.9 2 .6 1.2 12.7 38.6 44.7 83.4 10.5 72.9 2 .6 1.1 12.6 39.247.5 86 .7 10.6 76.1 2.7 1.0 13.0 9 Total assets................................................................... 65.6 73.2 79.6 80.5 81.6 83.5 85.3 86.4 89.2 92.8 5.6 17.3 7.2 19.7 9.7 20.7 8.2 20.8 8.0 22.2 7 .4 22.2 6.9 22.2 5.5 21.7 6.3 23.7 6.1 24.8 4.3 22.7 4.8 4.6 24.6 5.6 4.9 26.5 5.5 4.5 26.7 7.7 4.5 27.6 6.8 4.9 28.4 7.8 5 .0 30.1 7.8 5.2 31.0 9.5 5 .4 32.3 8.1 4.5 34.0 9.5 1 2 3 4 5 6 7 8 LIABILITIES 10 Bank loans.................................................................... 11 Commercial paper...................................................... D ebt: 12 Short-term, n.e.c..................................................... 13 Long-term, n.e.c...................................................... 14 O ther.......................................................................... 15 Capital, surplus, and undivided profits................. 10.9 11.5 12.4 12.6 12.5 12.8 13.2 13.4 13.4 13.9 16 Total liabilities and capital........................................ 65.6 73.2 79.6 80.5 81.6 83.5 85.3 86.4 89.2 92.8 N o t e . — Components may not add to totals due to rounding. 1.522 DO M ESTIC F IN A N C E CO M PANIES Business Credit Millions o f dollars, seasonally adjusted except as noted Type 1 Retail automotive (commercial vehicles)........ 2 Wholesale autom otive........................................ 3 Retail paper on business, industrial, and farm equipm ent............................................ 4 Loans on commercial accounts receivable. . . 5 Factored commercial accounts receivable... . 6 All other business cre d it.................................... 1 N ot seasonally adjusted. Accounts receivable outstand ing M ay 31, 1977 i Changes in accounts receivable during— Extensions Repayments 1977 1977 1977 M ar. r A p r.r 10,339 10,642 230 386 307 164 12,388 3,789 2,164 10,126 -3 9 16 -2 176 76 60 124 112 M ay M a r.r A p r.r M ay M a r.r A p r.r M ay 229 361 927 5,534 1,005 5,261 943 5,120 697 5,148 698 5,097 714 4,759 113 37 -1 4 273 745 2,516 1,603 1,322 752 2,585 1,721 1,310 731 2,333 1,541 1,392 784 2,500 1,605 1,146 676 2,525 1,597 11,198 618 2,296 1,555 1,119 A40 1.53 Domestic Financial Statistics □ July 1977 M O R TG A G E M ARK ETS Millions o f dollars. Exceptions noted. 1976 Item 1974 1975 1977 1976 Dec. Jan. Feb. M ar. Apr. M ay Terms and yields in prim ary and secondary m arkets PR IM A R Y M ARKETS 1 2 3 4 5 6 Conventional mortgages on new homes T erm s: 1 Purchase price (thous. dollars)..................... A m ount o f loan (thous. d o llars)................. Loan/price ratio (per cent)............................ M aturity (years).............................................. Fees and charges (per cent o f loan amount) C ontract rate (per cent per an n u m )........... 40.1 29.8 74.3 26.3 1.30 8.71 44.6 33.3 74.7 26.8 1.54 8.75 48.4 35.9 74.2 27.2 1.44 8.76 51.0 37.1 74.7 27.7 1.38 8.87 52.5 39.0 76.3 28.2 1.38 8.82 53.1 39.3 75.8 27.8 1.31 8.78 53.8 40.9 77.5 28.0 1.34 8.74 53.4 39.6 75.5 27.3 1.30 8.73 52.1 39.4 77.3 27.9 1.34 8.74 7 8 Yield (per cent per annum ): FHLBB series 3................................................. H U D series4..................................................... 8.92 9.22 9.01 9.10 8.99 8.99 9.10 8.90 9.05 8.80 8.99 8.80 8.95 8.85 8.94 8.90 8.96 8.95 9.55 8.72 9.19 8.52 8.82 8.17 8.25 7.59 8.40 7.85 8.50 7.98 8.58 8.06 8.57 7.96 8.04 9.31 9.43 9.26 9.37 8.99 9.11 8.45 8.84 8.48 8.55 8 .6 8 8.82 8. 8 6 8.91 8.67 8.97 8.74 9.08 SE C O N D A R Y M ARK ETS 9 10 11 12 Yields (per cent per annum) on— FH A mortgages (H U D series)5................... G N M A securities6.......................................... FN M A auctions:7 Government-underwritten lo a n s............. Conventional lo an s.................................... Activity in secondary markets FE D ER A L N A TIO N A L M O R TG A G E ASSOCIATION 13 14 15 16 M ortgage holdings (end o f period) T otal............................................................. FH A -insured.......................................... VA-guaranteed...................................... C onventional.......................................... 29,578 19,189 8,310 2,080 31,824 19,732 9,573 2,519 32,904 18,916 9,212 4,776 32,904 18,916 9,212 4,776 32,848 18,854 9,162 4,833 32,792 18,771 9,115 4,906 32,830 18,739 9.099 4.992 32,938 18,745 9,125 5,069 33,580 18,939 9,399 5,241 17 18 M ortgage transactions (during period) Purchases................................................ Sales............................................................. 6,953 4 ,263 2 ,606 191 141 150 283 391 947 7 19 20 Mortgage com m itm ents:8 Contracted (during period)................... Outstanding (end o f period)................... 10,765 7,960 6,106 4,126 6,247 3,398 290 3,398 1,180 4,142 968 4,707 1,119 5,184 716 5,411 1,452 5,773 5,462.6 2.3 7 1 .4 7,042.6 3.848.3 4,929.8 2,787.2 56.9 41.5 747.4 549.1 868.4 484.7 1,138.2 612.0 456.1 269.8 1,842.8 1,027.4 1.195.4 656.5 1.401.3 765.0 2 ,595.7 1,879.2 150.2 135.4 326.8 238.3 300.0 235.8 373.9 268.1 348.1 280.7 1,164.6 751.7 3,896 1,594 2,302 3,672 1,580 2,092 3,557 1,564 1,993 3,355 1,542 1,813 3,285 1,523 1,762 98 290 200 285 235 388 310 329 170 533 459 760 606 1,112 525 1,314 A uction o f 4-month commitments to buyG overnment-underwritten lo an s: Offered 9.................................................. A ccepted................................................. Conventional lo an s: 23 Offered 9................................................... 24 A ccepted................................................. 21 22 86 FE D ER A L H O M E LOAN M O R TG A G E C O RPO R A TIO N 25 26 27 M ortgage holdings (end o f perio d )1o T o tal............................................................ FH A /V A ................................................. Conventional.......................................... 4,586 1,904 2,682 4,987 1,824 3,163 4,269 1,618 2,651 4,269 1,618 2,651 28 29 Mortgage transactions (during period) Purchases.................................................... Sales............................................................. 2,191 52 1,716 1,020 1,175 1,396 208 60 30 31 Mortgage com m itm ents: 11 Contracted (during period)................... O utstanding (end o f period)................... 4,553 2,390 982 111 1,477 333 105 333 1 Weighted averages based on sample surveys o f mortgages originated by m ajor institutional lender groups. Compiled by the Federal H ome Loan Bank Board in cooperation with the Federal D eposit Insurance Cor poration. 2 Includes all fees, commissions, discounts, and “ points” paid (by the borrower or the seller) in order to obtain a loan. 3 Average effective interest rates on loans closed, assuming prepayment a t the end o f 10 years. 4 Average contract rates on new commitments for conventional first mortgages, rounded to the nearest 5 basis points; from Dept, o f Housing and U rban Development. 5 Average gross yields on 30-year, minimum-downpayment, Federal H ousing Administration-insured first mortgages for immediate delivery in the private secondary market. Any gaps in data are due to periods of adjustment to changes in maximum permissible contract rates. 6 Average net yields to investors on G overnment N ational Mortgage Association-guaranteed, mortgage-backed, fully-modified pass-through 250 462 securities, assuming prepayment in 12 years on pools o f 30-year FH A /V A mortgages carrying the prevailing ceiling rate. M onthly figures are unweighted averages of M onday quotations for the month. 7 Average gross yields (before deduction o f 38 basis points for mortgage servicing) on accepted bids in Federal N ational M ortgage Association’s auctions of 4-month commitments to purchase home mortgages, assuming prepayment in 12 years for 30-year mortgages. N o adjustments are made for FN M A commitment fees or stock related requirements. M onthly figures are unweighted averages for auctions conducted within the month. 8 Includes some multifamily and nonprofit hospital loan commitments in addition to 1- to 4-family loan commitments accepted in FN M A ’s free m arket auction system, and through the F N M A -G N M A Tandem plans. 9 M ortgage am ounts offered by bidders are total bids received. 10 Includes participations as well as whole loans. 11 Includes conventional and Government-underwritten loans. Real Estate Debt 1.54 A41 M O R TG A G E DEBT O U T ST A N D IN G Millions o f dollars, end o f period 1977 1976 Type of holder, and type o f property 1972 1973 1974 1975 Q2 Q3 Q4 Ql 1 All holders...................................................... 2 1- to 4-family............................................ 3 M ultifam ily................................................ 4 C om m ercial............................................... 5 F a rm ........................................................... 603,417 372,793 82,572 112,294 35,758 682,321 416,883 92,877 131,308 41,253 742,504 449,937 99,851 146,428 46,288 801,640 491,568 100,471 158,724 50,877 840,813 521,705 100,790 164,209 54,109 864,345 541,224 100,344 167,070 55,707 888,958 558,415 102,380 170,870 57,293 910,625 574,534 102,591 174,233 59,267 6 M aior financial institutions......................... 7 Commercial banks1.................................. 8 1- to 4-family........................................ 9 M ultifamily........................................... 10 C om m ercial........................................... 11 F a rm ....................................................... 450,000 99,314 57,004 5,778 31,751 4,781 505,400 119,068 67,998 6,932 38,696 5,442 542,552 132,105 74,758 7,619 43,679 6,049 581,296 136,186 77,018 5,915 46,882 6,371 611,524 143,699 82,900 6,107 48,125 6,567 629,949 147,636 86,013 6,201 48,749 6,673 647,314 150,869 87,897 6,336 49,817 6,819 661,851 154,007 89,725 6,468 50,853 6,961 12 13 14 15 16 Mutual savings banks.............................. 1- to 4-fam ily........................................ M ultifamily............................................ C om m ercial........................................... F a rm ....................................................... 67,556 46,229 10,910 10,355 62 73,230 48,811 12,343 12,012 64 74,920 49,213 12,923 12,722 62 77,249 50,025 13,792 13,373 59 78,838 51,326 13,674 13,780 58 80,249 52,250 13,915 14,028 56 81,734 53,217 14,173 14,287 57 82,273 53,568 14,266 14,381 58 17 18 19 20 Savings and loan associations................. 1- to 4-family........................................ M ultifamily........................................... C om m ercial.......................................... 206,182 167,049 20,783 18,350 231,733 187,750 22,524 21,459 249,293 201 ,553 23,683 24,057 278,693 224,710 25,417 28,566 299,296 241,623 26,817 31,456 311,847 251,629 27,505 32,713 323,130 260,895 28,436 33,799 333,697 270,094 29,032 34,571 21 22 23 24 25 Life insurance companies......................... 1- to 4-family........................................ M ultifamily........................................... C om m ercial........................................... F a rm ....................................................... 76,948 22,315 17,347 31,608 5,678 81,369 20,426 18,451 36,496 5,996 86,234 19,026 19,625 41,256 6,327 89,168 17,590 19,629 45,196 6,753 89,691 16,861 19,374 46,456 7,000 90,217 16,458 19,256 47,322 7,181 91,581 16,108 19,201 48,854 7,418 91,874 15,780 19,064 49,405 7,625 26 Federal and related agencies...................... 27 Government National Mortgage Assn. .. 28 1- to 4-family........................................ 29 M ultifamily........................................... 40,157 5,113 2,513 2,600 46,721 4,029 1,455 2,574 58,320 4,846 2,248 2,598 66,891 7,438 4,728 2,710 66,033 5,557 3,165 2,392 67,314 5,068 2,486 2,582 66,753 4,241 1,970 2,271 66,248 4,013 1,670 2,343 30 31 32 33 34 Farmers Home Admin.............................. 1- to 4-family........................................ M ultifamily........................................... C om m ercial........................................... F a rm ....................................................... 1,019 279 29 320 391 1,366 743 29 218 376 1,432 759 167 156 350 1,109 208 215 190 496 830 228 46 151 405 1,355 754 143 133 325 1,064 454 218 72 320 500 98 28 64 310 35 36 37 Federal Housing and Veterans Admin... 1- to 4-family........................................ M ultifamily............................................ 3,338 2,199 1,139 3,476 2,013 1,463 4,015 2,009 2,006 4,970 1,990 2,980 5,111 1,781 3,330 5,092 1,716 3,376 5,150 1,676 3,474 5,406 1,732 3,674 38 39 40 Federal National Mortgage Assn........... 1- to 4-family........................................ M ultifamily............................................ 19,791 17,697 2,094 24,175 20,370 3,805 29,578 23,778 5,800 31,824 25,813 6,011 32,028 26,112 5,916 32,962 27,030 5,932 32,904 26,934 5,970 32,830 26,836 5,994 41 42 43 Federal land banks.................................... 1- to 4-family........................................ F a rm ....................................................... 9,107 13 9,094 11,071 123 10,948 13,863 406 13,457 16,563 549 16,014 17,978 575 17,403 18,568 586 17,982 19,125 601 18,524 19,942 611 19,331 44 45 46 Federal Home Loan Mortgage Corp. . . . 1- to 4-family........................................ M ultifamily............................................ 1,789 1,754 35 2,604 2,446 158 4,586 4,217 369 4,987 4,588 399 4,529 4,166 363 4,269 3,917 352 4,269 3,889 380 3,557 3,200 357 47 Mortgage pools or trusts2........................... 48 Government National Mortgage Assn. .. 49 1- to 4-family........................................ 50 Multifamily............................................ 14,404 5,504 5,353 151 18,040 7,890 7,561 329 23,799 11,769 11,249 520 34,138 18,257 17,538 719 41,225 23,634 22,821 813 44,960 26,725 25,841 884 49,801 30,572 29,583 989 54,811 34,260 33,190 1,070 51 52 53 Federal Home Loan Mortgage Corp... 1- to 4-family........................................ M ultifamily............................................ 441 331 110 766 617 149 757 608 149 1,598 1,349 249 2,153 1,831 322 2,506 2,141 365 2,671 2,282 389 3,570 3,112 458 54 55 56 57 58 Farmers Home Admin.............................. 1- to 4-family........................................ M ultifamily............................................ Com mercial.................................. ........ F a rm ....................................................... 8,459 5,017 131 867 2,444 9,384 5,458 138 1,124 2,664 11,273 6,782 116 1,473 2,902 14,283 9,194 295 1,948 2,846 15,438 9,670 541 2,104 3,123 15,729 9,587 535 2,291 3,316 16,558 10,219 532 2,440 3,367 16,981 10,423 530 2,560 3,468 59 Individuals and others3................................ 60 1- to 4-family........................................ 61 Multifamily............................................ 62 C om m ercial........................................... 63 F a rm ....................................................... 98,856 45,040 21,465 19,043 13,308 112,160 51,112 23,982 21,303 15,763 117,833 53,331 24,276 23,085 17,141 119,315 56,268 22,140 22,569 18,338 122,031 59,246 21,095 22,137 19,553 122,122 60,816 19,298 21,834 20,174 125,090 62,690 20,011 21,601 20,788 127,715 64,495 19,307 22,399 21,514 1 Includes loans held by nondeposit trust companies but not bank trust departments. 2 Outstanding principal balances o f mortgages backing securities in sured or guaranteed by the agency indicated. 3 Other holders include mortgage companies, real estate investment trusts, State and local credit agencies, State and local retirement funds, noninsured pension funds, credit unions, and U.S. agencies for which amounts are small or separate data are not readily available. 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, o f Commerce. Separation o f nonfarm mortgage debt by type o f property, if not re ported directly, and interpolations and extrapolations where required, are estimated mainly by Federal Reserve. Multifamily debt refers to loans on structures o f 5 or more units. A42 1.55 Domestic Financial Statistics □ July 1977 C O N SU M E R IN ST A L M E N T C R ED IT Total Outstanding, and N et Change Millions of dollars 1976 Holder, and type o f credit 1974 1975 1977 1976 Nov. Dec. Jan. Feb. M ar. Apr. May A mounts outstanding (end of period) 1 155,384 162,237 178,775 175,333 178,775 I l l , 91S 178,252 179,695 182,265 185,280 2 3 4 5 6 By holder: Commercial b a n k s ............................ Finance companies........................... Credit unions...................................... R etailers1............................................ O thers2................................................ 75,846 36,208 22,116 17,933 3,281 78,703 36,695 25,354 18,002 3,483 85,379 39,642 30,546 19,178 4,030 84,278 39,129 30,053 17,726 4,147 85,379 39,642 30,546 19,178 4,030 85,051 39,665 30,410 18,693 4,156 85,005 39,831 30,701 18,322 4,393 85,916 39,889 31,448 18,068 4,374 87,481 40,361 31,912 18,205 4,306 88,769 40,953 32,704 18,402 4,452 7 8 9 10 11 12 13 By type o f credit: Automobile........................................... Commercial b a n k s........................ In d irect........................................ D irect.......................................... Finance com panies....................... Credit unions................................. O thers.............................................. 50,392 30,994 18,687 12,306 10,618 8,414 366 53,028 31,534 18,353 13,181 11,439 9,653 402 60,498 35,313 19,642 15,671 13,059 11,633 493 60,002 35,095 19,575 15,520 12,957 11,442 508 60,498 35,313 19,642 15,671 13,059 11,633 493 60,349 35,284 19,566 15,719 12,973 11,579 513 60,774 35,492 19,640 15,852 13,042 11,690 550 61,841 36,232 20,005 16,227 13,084 11,976 549 63,183 37,145 20,468 16,678 13,347 12,152 539 64,551 37,910 20,823 17,087 13,627 12,455 559 14 15 Mobile homes: Commercial b a n k s........................ Finance com panies....................... 8,972 3,524 8,704 3,451 8,233 3,277 8,254 3,295 8,233 3,277 8,146 3,248 8,094 3,207 8,076 3,197 8,100 3,177 8,123 3,155 16 17 Home improvement............................ Commercial b a n k s........................ 7 ,754 4,694 8,004 4,965 8,773 5,381 8,790 5,388 8,773 5,381 8,736 5,340 8,750 5,307 8,816 5,343 8,923 5,425 9,111 5,531 18 19 Revolving credit: Bank credit card s.......................... Bank check credit......................... 8,281 2,797 9,501 2,810 11,075 3,010 10,329 2,935 11,075 3,010 10,996 3,031 10,820 3,039 10,705 3,030 10,877 3,045 10,931 3,094 20 21 22 23 24 25 26 27 All other............................................... Commercial banks, to ta l............. Personal loans........................... Finance companies, to ta l............ Personal lo an s........................... C redit unions.................................. R etailers.......................................... O thers.............................................. 73,664 20,108 13,771 21,717 16,961 13,037 17,933 869 76,738 21,188 14,629 21,655 17,681 14,937 18,002 956 83,910 22,368 15,606 23,178 19,043 17.993 19,178 1,193 81,728 22,277 15,517 22,748 18,773 17,706 17,726 1,271 83,910 22,368 15,606 23,178 19,043 17,993 19,178 1,193 83,469 22,254 15,569 23,319 19,002 17,915 18,693 1,288 83,568 22,253 15,590 23,454 18,998 18,086 18,322 1,453 84,031 22,531 15,769 23,480 19,048 18,524 18,068 1,428 84,959 22,888 16,003 23,709 19,235 18,799 18,205 1,358 86,315 23,180 16,180 24,043 19,524 19,264 18,402 1,426 Net change (during period)3 28 8,952 6,843 16,539 1,243 1,823 1,918 2,022 2,717 2,660 2,526 29 30 31 32 33 By holder: Commercial b a n k s ............................ Finance com panies........................... Credit unions...................................... R etailers.............................................. O thers..................... ............................. 3,975 806 2,507 1,538 126 2,851 483 3,238 69 202 6,678 2,946 5,192 1,176 547 381 245 395 98 124 913 364 537 64 -5 5 565 481 416 249 207 829 442 540 118 93 1,462 373 717 238 -7 2 1,295 559 557 191 58 1,050 516 679 198 82 34 35 36 37 38 39 40 By type o f credit: Automobile.......................................... Commercial b a n k s........................ Indirect........................................ D irect.......................................... Finance com panies....................... Credit unions.................................. O ther................................................ 327 -5 0 8 -3 1 0 -1 9 8 -1 0 0 958 -2 3 2,631 535 -3 4 0 875 821 1,239 36 7,470 3,779 1,289 2,490 1,620 1,980 91 477 221 70 151 98 144 14 1,013 652 330 322 146 207 8 758 418 160 258 99 174 66 884 504 239 265 161 213 6 1,201 759 385 373 194 267 -1 9 1,174 686 357 329 282 203 2 1,091 539 235 304 270 265 17 41 42 Mobile homes: Commercial b a n k s........................ Finance companies....................... 632 168 -2 6 8 -7 3 -4 7 1 -1 7 4 -4 3 -1 6 32 -1 6 -4 3 -1 8 -2 6 -4 3 16 3 17 -1 5 5 -2 2 43 44 Home improvement............................ Commercial b a n k s........................ 804 611 248 111 768 416 103 55 73 54 130 36 73 14 97 75 106 66 108 56 45 46 Revolving credit: Bank credit card s.......................... Bank check credit......................... 1,443 543 1,220 14 1,576 199 71 6 -3 3 7 28 41 170 32 293 38 246 49 176 90 47 48 49 50 51 52 53 54 All other.............................................. Commercial banks, to ta l............. Personal loans........................... Finance companies, to ta l............ Personal loans........................... Credit unions.................................. R etailers.......................................... Others.............................................. 5,036 1,255 898 803 479 1,473 1,538 -3 3 3,072 1,080 858 -6 4 111 1,900 69 87 7,172 1,180 977 1,523 1,362 3,056 1,176 237 645 72 47 163 161 239 98 73 747 199 148 236 113 313 64 -6 6 1,023 85 101 401 178 227 249 60 931 134 114 320 129 312 118 48 1,069 281 200 175 168 428 238 -5 4 1,083 231 160 291 251 336 191 34 1,078 183 141 269 212 395 198 32 1 Excludes 30-day charge credit held by retailers, oil and gas companies, and travel and entertainment companies. 2 M utual savings banks, savings and loan associations, and auto dealers. 3 N et change equals extensions minus liquidations (repayments, chargeoffs, and other credits); figures for all months are seasonally adjusted. N o t e . — Total consumer noninstalment credit outstanding—credit scheduled to be repaid in a lump sum, including single-payment loans, charge accounts, and service credit—amounted to $39.0 billion at the end of 1976, $35.0 billion at the end of 1975, and $33.4 billion at the end o f 1974. Comparable data for Dec. 31, 1977, will be published in the B u l l e t i n for February 1978. Consumer Debt 1.56 C O N SU M E R IN ST A L M E N T C R ED IT A43 Extensions and Liquidations Millions of dollars 1977 1976 Holder, and type o f credit 1974 1975 1976 Nov. Dec. Jan. Feb. M ar. Apr. May Extensions1 1 T o ta l......................................................... 160,008 163,483 186,221 15,763 16,702 16,870 17,186 18,253 18,077 17,902 2 3 4 5 6 By holder: Commercial b a n k s............................ Finance com panies........................... Credit unions...................................... R etailers2............................................ Others 3................................................ 72,605 35,644 22,403 27,034 2,322 77,131 32,582 24,151 27,049 2,570 88,666 35,956 28,829 29,569 3,201 7,486 3,059 2,395 2,467 356 8,182 3,157 2,688 2,480 194 7,546 3,431 2,683 2,775 436 8,055 3,437 2,743 2,603 347 8,715 3,559 2,978 2,817 185 8,670 3,442 2,933 2,722 310 8,524 3,364 2,922 2,759 333 7 8 9 10 11 12 13 By type o f credit: Automobile.......................................... Commercial b a n k s........................ Indirect........................................ D irect.......................................... Finance com panies....................... Credit unions.................................. O thers.............................................. 43,209 26,406 15,576 10,830 8,630 7,788 385 48,103 28,333 15,761 12,572 9,598 9,702 470 55,807 32,687 17,600 15,087 11,210 11,336 574 4,632 2,691 1,426 1,265 927 957 57 5,263 3,170 1,723 1,446 992 1,051 51 4,940 2,892 1,544 1,349 964 974 110 5,205 3,075 1,641 1,435 999 1,075 55 5,654 3,350 1,818 1,532 1,151 1,124 30 5,474 3,243 1,735 1,507 1,101 1,072 49 5,445 3,131 1,636 1,496 1,130 1,120 63 14 15 Mobile homes: Commercial b a n k s........................ Finance com panies....................... 3,486 1,413 2,681 771 2,449 690 207 54 267 53 195 50 207 52 254 57 260 58 251 49 16 17 Home improvement............................ Commercial b a n k s........................ 4,571 2,789 4,398 2,722 5,034 3,036 464 276 461 288 494 262 457 251 478 308 488 301 506 298 18 19 Revolving credit: Bank credit card s.......................... Bank check credit......................... 17,098 4,227 20,428 4,024 25,481 4,832 2,181 410 2,217 426 2,117 462 2,332 448 2,434 456 2,509 452 2,521 486 20 21 22 23 24 25 26 27 All other.............................................. Commercial banks, to ta l............. Personal lo an s........................... Finance companies, to ta l............ Personal lo an s........................... Credit unions.................................. R etailers.......................................... Others.............................................. 86,004 18,599 13,176 25,316 16,691 14,228 27,034 827 83,079 18,944 13,386 22,135 17,333 13,992 27,049 959 91,928 20,182 14,463 24,014 19,610 16,911 29,569 1,253 7,815 1,721 1,238 2,072 1,696 1,389 2,467 166 8,015 1,815 1,317 2,108 1,688 1,582 2,480 30 8,612 1,618 1,213 2,413 1,787 1,656 2,775 151 8,484 1,742 1,281 2,379 1,843 1,612 2,603 149 8,920 1,913 1,379 2,346 1,814 1,792 2,817 52 8,836 1,905 1,389 2,268 1,775 1,803 2,722 139 8,644 1,837 1,349 2,178 1,680 1,740 2,759 130 Liquidations1 28 T o ta l......................................................... 151,056 156,640 169,682 14,520 14,879 14,952 15,164 15,536 15,418 15,376 By holder: Commercial b a n k s ............................ Finance com panies........................... Credit unions...................................... R etailers2 ............................................ O thers3................................................. 68,630 34,838 19,896 25,496 2,196 74,280 32,099 20,913 26,980 2,368 81,988 33,010 23,637 28,393 2,654 7,105 2,814 2,000 2,369 232 7,269 2,793 2,151 2,416 249 6,981 2,949 2,267 2,526 228 7,227 2,995 2,203 2,485 254 7,253 3,186 2,261 2,579 257 7,375 2,883 2,377 2,531 252 7,474 2,848 2,242 2,561 251 29 30 31 32 33 By type of credit: 34 35 36 37 38 39 40 Commercial b a n k s........................ Indirect........................................ D irect.......................................... Finance com panies....................... Credit unions.................................. O thers............................................... 42,883 26,915 15,886 11,029 8,730 6,830 408 45,472 27,798 16,101 11,697 8,777 8,463 434 48,337 28,908 16,311 12,597 9,590 9,356 483 4,155 2,470 1,356 1,114 829 813 43 4,250 2,517 1,393 1,124 846 843 43 4,183 2,474 1,384 1,090 866 800 43 4,320 2,571 1,402 1,169 838 862 49 4,453 2,591 1,432 1,159 957 857 49 4,300 2,557 1,378 1,178 828 869 47 4,354 2,592 1,401 1,192 860 856 46 41 42 Mobile homes: Commercial b a n k s........................ Finance com panies....................... 2,854 1,245 2,949 844 2,921 864 250 70 234 70 238 67 233 96 238 53 243 73 246 71 43 44 Commercial b a n k s........................ 3,767 2,178 4,150 2,451 4,266 2,620 360 221 388 234 364 227 385 237 382 233 382 236 398 242 45 46 Revolving credit: Bank credit c ard s.......................... Bank check credit......................... 15,655 3,684 19,208 4,010 23,905 4,632 2,110 404 2,250 419 2,089 421 2,161 416 2,141 419 2,264 403 2,345 396 47 48 49 50 51 52 53 54 All other............................................... Commercial banks, to ta l............. Personal lo an s............................ Finance companies, to ta l............ Personal lo an s............................ Credit unions.................................. R etailers.......................................... O thers.............................................. 80,969 17,345 12,278 24,513 16,212 12,755 25,496 860 80,007 17,864 12,528 22,199 16,616 12,092 26,980 872 84,757 19,002 13,486 22,491 18,248 13,855 28,393 1,016 7,170 1,649 1,191 1,909 1,535 1,150 2,369 93 7,268 1,615 1,169 1,872 1,575 1,268 2,416 96 7,590 1,533 1,111 2,012 1,608 1,429 2,526 90 7,553 1,608 1,167 2,059 1,714 1,300 2,485 101 7,850 1,632 1,179 2,171 1,646 1,363 2,579 105 7,753 1,674 1,229 1,976 1,524 1,467 2,531 105 7,567 1,653 1,208 1,909 1,468 1,345 2,561 98 1 M onthly figures are seasonally adjusted. 2 Excludes 30-day charge credit held by retailers, oil and gas companies, and travel and entertainm ent companies. 3 M utual savings banks, savings and loan associations, and auto dealers. A44 1.57 Domestic Financial Statistics □ July 1977 F U N D S R A ISE D IN U .S. CR ED IT M ARK ETS Billions o f dollars; half-year data are at seasonally adjusted annual rates. 1975 Transaction category, or sector 1971 1972 1973 1974 1975 1976 1976 HI H2 HI H2 Nonfinancial sectors 1 Total funds raised ................................................... 2 Excluding equities.............................................. By sector and instrument: 3 U.S. Govt............................................................. 4 Public debt securities.................................... 5 Agency issues and m ortgages..................... 6 All other nonfinancial sectors........................... 7 C orporate equities......................................... 8 D ebt instrum ents........................................... 9 Private domestic nonfinancial sectors......... 10 Corporate equities..................................... 11 Debt instruments........................................ 12 Debt capital instruments....................... 13 State and local obligations............. 14 Corporate bonds............................... M ortgages: H o m e............................................... 15 Multifamily residential................. 16 C om m ercial.................................... 17 18 F arm ................................................ 19 Other debt instruments.......................... 20 Consumer cre d it................................ 21 Bank loans n.e.c................................. 22 Open market p ap er........................... 23 O th e r................................................... 1 151.0 139.6 176.9 166.4 197.6 190.0 188.8 185.0 210.4 200.3 271.6 260.8 184.2 173.8 236.5 226.9 256.6 243.0 286.3 278.2 1 2 24.7 26.0 -1 .3 126.3 11.5 114.8 121.1 11.4 109.7 86.8 17.5 18.8 15.2 14.3 1.0 161.7 10.5 151.2 157.7 10.9 146.8 102.8 15.4 12.2 8.3 7.9 .4 189.4 7.7 181.7 183.1 7.9 175.3 106.7 16.3 9.2 12.0 12.0 * 176.8 3.8 173.0 161.6 4.1 157.5 101.2 19.6 19.7 85.2 85.8 -.6 125.2 10.0 115.1 112.2 9.9 102.3 101.3 17.3 27.2 69.0 69.1 -.1 202.6 10.8 191.8 181.1 10.5 170.5 123.6 17.2 22.8 80.8 82.0 -1 .2 103.4 10.5 93.0 94.9 10.3 84.6 97.5 16.2 33.4 89.6 89.7 -.1 146.9 9.6 137.3 129.4 9.5 119.9 105.1 18.4 21.0 71.6 71.5 .1 185.0 13.6 171.4 169.1 13.3 155.8 113.5 18.1 20.7 66.6 66.9 -.3 219.7 8.1 211.7 192.5 7.7 184.8 133.8 16.4 25.0 3 4 5 6 7 8 9 10 11 12 13 14 28.6 9.7 9.8 2 .4 22.8 11.6 6.5 -.4 5.1 42.6 12.7 16.4 3.6 44 .0 18.6 18.1 .8 6.5 46.4 10.4 18.9 5.5 68.6 21.7 34.8 2.5 9.6 34.6 7 .0 15.1 5.1 56.3 9.8 26.2 6.8 13.5 40.8 -.1 10.9 5 .2 1.0 8.5 - 1 4 .5 - 2 .2 9.1 64.4 1.1 11.7 6 .4 46.9 20.5 7.7 3.5 15.3 33.5 * 8.7 5 .6 -1 2 .8 1.1 - 2 3 .5 -.2 9.7 48.1 -.2 13.1 4.8 14.8 16.0 -5 .5 -4 .2 8.5 58.1 1.6 9.8 5.1 42.3 19.4 2 .2 8.2 12.6 70.7 .6 13.5 7.6 51.0 21.6 12.7 -1 .3 17.9 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 By borrowing sector. ................................. State and local governm ents............... H ouseholds............................................. F arm ......................................................... Nonfarm noncorporate........................ C orporate................................................ 121.1 17.8 42.1 4.5 10.3 46.4 157.7 15.2 64.8 5.8 13.1 58.8 183.1 14.8 73.5 9.7 12.3 72.9 161.6 18.6 45.2 7.9 6.7 83.1 112.2 14.9 49.7 9 .4 1.2 37.1 181.1 16.8 90.7 12.3 4.7 56.6 94.9 13.9 39.0 9 .4 -.8 33.5 129.4 15.9 60.4 9 .4 3.2 40.6 169.1 16.4 88.3 11.0 4.2 49.3 192.5 17.2 93.0 13.6 4.8 63.9 24 25 26 27 28 29 30 31 32 33 34 35 36 Foreign............................................................. C orporate equities..................................... Debt instruments........................................ B onds....................................................... Bank loans n.e.c..................................... Open m arket pap er............................... U.S. Govt, loans.................................... 5 .2 * 5.2 .9 2.1 .3 1.8 4 .0 -.4 4.4 1.0 3.0 -1 .0 1.5 6.2 -.2 6.4 1.0 2.8 .9 1.7 15.3 -.2 15.5 2.1 4.7 7.1 1.6 13.0 .1 12.8 6 .2 4 .0 -.1 2.8 21.5 .3 21.2 8.4 6.8 2.5 3.6 8.5 .1 8.4 5.7 .6 -1 .2 3.3 17.4 .1 17.3 6.7 7 .4 1.0 2.2 15.9 .3 15.6 7.3 4.2 .8 3.2 27.2 .3 26.9 9 .4 9.3 4.2 4 .0 30 31 32 33 34 35 36 Financial sectors 37 Total funds raised................................................... By instrument: U.S. Govt, related.............................................. Sponsored credit agency securities............. M ortgage pool securities............................. Loans from U.S. G ovt.................................. Private financial sectors..................................... C orporate equities......................................... Debt instruments............................................. Corporate bonds........................................ M ortgages................................................... Bank loans n.e.c......................................... Open m arket paper and R p’s ................. Loans from FH LB’s .................................. 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 By sector: Sponsored credit agencies................................ M ortgage pools.................................................. Private financial sectors.................................... Bank affiliates................................................. Foreign banking agencies............................ Savings and loan associations..................... Other insurance com panies......................... Finance com panies........................................ R EIT’s ............................................................. Open-end investment com panies............... 17.0 29.1 56.7 43.0 14.8 29.8 14.4 15.3 27.5 32.1 37 5 .9 1.1 4 .8 8 .4 3.5 4 .9 19.9 16.3 3.6 11.1 3.5 7.6 3.8 2.1 3.5 .9 -2 .7 2 0 .7 2 .8 18.0 5.1 1.7 6.8 4.4 * 36.8 1.5 35.3 3.5 -1 .2 14.0 11.8 7.2 23.1 16.6 5.8 .7 19.9 1.0 18.9 2.1 -1 .3 7.5 3.9 6.7 13.5 2.3 10.3 .9 1.3 1.2 .1 2.9 2.3 -3 .9 2.8 -4 .0 17.7 2 .4 15.7 - .4 12.1 1.8 10.3 5.8 1.9 - 3 .3 7 .8 -2 .0 14.0 1.4 11.5 1.1 .4 1.2 -.8 2.5 1.2 -4 .7 7 .6 -7 .3 13.1 3.3 9.2 .6 2.1 1.2 1.0 3.3 3.4 -3 .2 -1 .9 -.6 18.0 3.9 14.2 * 9 .5 .3 9.1 7 .2 1.0 -3 .6 6.8 -2 .3 17.4 .9 17.2 -.7 14.7 3.3 11.4 4 .4 2.8 -3 .0 8.8 - 1 .7 38 39 40 41 42 43 44 45 46 47 48 49 1.1 4 .8 11.1 2 .4 -.4 1.6 -.1 .6 2.7 2.9 1.3 3.5 4.9 2 0 .7 4.8 .7 .8 2 .0 .5 6.2 6.3 -.5 16.3 3.6 36.8 8.1 2.2 5.1 6 .0 .5 9 .4 6.5 - 1 .2 17.3 5 .8 19.9 -1 .1 3.5 2.9 6.3 .9 4.5 1.1 -.5 2 .4 3.2 10.3 1.3 1.7 .3 -.3 -2 .1 .9 .7 - 1 .9 .8 1.3 2 .0 15.7 12.1 7 .6 - .8 .4 -.1 1.0 6.1 -2 .1 .3 -.3 2.5 11.5 .4 5.7 .9 -.9 -7 .8 .9 -.8 -1 .6 1.5 2 .6 4 .0 9.2 2.1 - 2 .3 -.3 .2 3.6 1.0 2.1 -2 .2 .1 * 3.9 14.2 9 .5 9.9 - 1 .3 -1 .5 - 1 .0 1.0 6 .0 -1 .8 -1 .1 -.7 .2 17.2 14.7 5.3 -.3 2 .4 .7 1.0 6.2 - 2 .5 1.8 .2 50 51 52 53 54 55 56 57 58 59 60 61 198.6 1.5 10.2 187.0 93.6 16.2 41.6 49.1 1.1 -2 7 .6 6 .2 6.8 251.8 .1 10.7 241.0 102.4 18.4 31.0 69.0 16.0 - 1 .2 -5 .1 10.7 284.1 -1 .1 15.0 270.2 89.8 18.1 35.2 75.7 19.4 2.9 15.8 13.4 318.4 1.8 9.6 307.0 84.7 16.4 38.8 95.2 21.6 19.1 11.8 19.5 62 63 64 65 66 67 68 69 70 71 72 73 All sectors 62 Total funds raised, by instrument........................ 63 Investment company sh ares............................ 64 O ther corporate equities.................................. 65 Debt instruments................................................. 66 U.S. Govt, securities.................................... 67 State and local obligations.......................... 68 C orporate and foreign b o n d s..................... 69 M ortgages....................................................... 70 Consumer cred it............................................. Bank loans n.e.c............................................. 71 72 73 Other lo a n s...................................................... 168.1 1.3 13.7 153.1 30.7 17.5 23.5 52.5 11.6 12.1 .9 4 .2 206.0 -.5 13.8 192.8 23.7 15.4 18.4 76.8 18.6 27.8 4.1 8 .0 254.3 - 1 .2 10.4 245.2 28.3 16.3 13.6 79.9 21.7 51.6 15.2 18.5 231.8 -.5 5 .4 227.0 34.5 19.6 23.9 60.5 9.8 38.4 17.8 22.5 225.2 .8 10.4 214.0 98.0 17.3 36.3 59.0 8.5 -1 4 .4 .5 8.7 301.4 .3 12.3 288.7 87.2 17.2 37.0 85.4 20.5 11.2 13.8 16.5 Flow o f Funds 1.58 A45 D IR E C T A N D IN D IR E C T SO UR CES OF F U N D S TO C R ED IT M ARK ETS Billions o f dollars, except as noted; half-year data are at seasonally adjusted annual rates. 1975 Transaction category or sector 1 Total funds advanced in credit markets to nonfinancial sectors........................................ 1971 1972 1973 1974 1975 1976 1976 HI H2 HI H2 139.6 166.4 190.0 185.0 200.3 260.8 173.8 226.9 243.0 278.2 1 43.4 34.4 7 .0 -2 .7 4.6 19.8 7 .6 7 .0 * 5.1 3 4.2 9 .6 8.2 7 .2 9 .2 52 .7 11.9 14.7 6.7 19.5 44.2 22.5 16.2 -4 .0 9.5 55.9 26.8 12.8 -2 .0 18.2 51 .9 32.6 15.9 -7 .3 10.6 3 6 .6 12.4 16.5 -.6 8.3 50.5 26.7 10.8 - 2 .3 15.3 61.2 26.9 14.8 - 1 .7 21.1 2 3 4 5 6 2 .8 5 .2 8.9 26.4 5.9 1.8 9 .2 .3 8.4 8.4 2 .8 21.4 9.2 .7 19.9 9.8 25.6 6 .2 11.2 23.1 15.1 14.5 8.5 6.1 13.5 10.2 20.6 9.8 15.2 17.7 14.9 15.9 7 .0 14.2 14.0 15.2 13.2 10.1 -2 .0 13.1 5.6 20.0 13.6 11.4 18.0 14.9 21.3 6.1 19.0 17.4 7 8 9 10 11 Private domestic funds advanced 12 Total net advances.................................................. 13 U.S. Govt, securities......................................... 14 State and local obligations.............................. 15 Corporate and foreign b o n d s......................... 16 Residential m ortgages...................................... 17 Other mortgages and lo an s............................. 18 L e ss : FHLB advances...................................... 102.1 - 3 .7 17.5 19.5 31.2 35.0 -2 .7 155.0 16.1 15.4 13.1 48.1 62.3 * 175.7 18.7 16.3 10.0 48.5 89.3 7.2 155.3 22.6 19.6 20.9 26.9 71.9 6.7 169.6 75.5 17.3 32.8 24.4 15.7 -4 .0 222.6 60.4 17.2 30.3 52.7 60.1 -2 .0 135.9 61.0 16.2 38.9 17.7 - 5 .2 -7 .3 203.4 90.0 18.4 26.7 31.1 36.5 -.6 210.5 63.1 18.1 27.0 48.9 51.1 -2 .3 234.4 51.8 16.4 33.5 56.4 68.6 -1 .7 12 13 14 15 16 17 18 Private financial intermediation 19 Credit market funds advanced by private financial institutions....................................... 20 Commercial b an k in g........................................ 21 Savings institutions............................................ 22 Insurance and pension fu n d s.......................... 23 Other finance...................................................... 109.7 50.6 39.1 14.2 5 .9 149.4 70.5 47.2 17.8 13.8 163.8 86.5 36.0 23.8 17.4 126.2 64.6 27.0 30.1 4.5 116.0 27.6 51.0 39.3 - 1 .8 181.8 51.1 69.1 44.2 10.1 97.7 13.5 49.8 36.4 -1 .9 134.3 41.7 52.2 42.3 - 1 .8 161.9 41.5 71.0 44.3 5.1 201.1 73.6 68.2 44.2 15.1 19 20 21 22 23 24 Sources o f funds...................................................... 25 Private domestic deposits................................ 26 Credit market borrow ing................................. 109.7 89.4 7 .6 149.4 100.9 18.0 163.8 86.4 35.3 126.2 69.4 18.9 116.0 90.5 .1 181.8 122.7 10.3 97.7 90.3 -.8 134.3 90.6 1.0 161.9 103.8 9.1 201.1 141.4 11.4 24 25 26 27 28 29 30 31 Other sources....................................................... Foreign fu n d s................................................. Treasury balances.......................................... Insurance and pension reserves.................. O ther, n et........................................................ 12.6 -3 .9 2 .2 8.6 5 .7 30.5 5 .3 .7 11.6 12.8 42.1 6 .9 -1 .0 18.4 17.8 37.8 14.5 -5 .1 26.0 2 .4 2 5.4 -.4 -1 .7 29.9 -2 .4 48.8 2.5 -.1 34.3 12.1 8 .2 -5 .1 -3 .5 27.4 -1 0 .1 42.7 5 .0 .1 32.5 5.2 49.0 -2 .7 3.9 33.6 14.2 48.3 1.1 -4 .2 35.0 9.9 27 28 29 30 31 Private domestic nonfinancial investors 32 Direct lending in credit markets........................... 33 U.S. Govt, securities......................................... 34 State and local obligations.............................. 35 Corporate and foreign b o n d s......................... 36 Commercial p a p e r............................................. 37 O th e r.................................................................... * - 1 0 .8 .5 8.3 - 1 .1 3.2 2 3 .6 4 .2 3.1 4 .2 3 .0 9.1 47.2 19.4 7.5 .9 12.5 6 .9 40.8 17.9 12.2 5.3 4 .6 8.1 53.7 23.0 9.9 10.4 3.1 7.3 51.1 19.6 7.1 5.9 6; 3 12.2 37.4 5 .0 10.3 12.9 3.5 5 .6 70.1 41.0 9.6 7.9 2.7 8.9 57.7 21.5 6 .0 8.2 10.6 11.3 4 4.7 17.6 8.2 3.6 2 .0 13.2 32 33 34 35 36 37 38 Deposits and currency............................................ 39 Time and saving accounts.................................. 40 Large negotiable C D ’s ................................. 41 Other at commercial banks......................... 42 At savings institutions.................................. 92.8 79.1 6.3 33.2 39.6 105.3 83.7 7.7 30.6 45 .4 90.3 76.2 18.3 29.6 28.4 75.7 67.4 18.9 26. 1 22.4 96.7 84.8 - 1 3 .3 39.0 59.2 130.0 113.2 - 1 4 .1 58.1 69.2 9 5.7 75.0 -2 7 .3 39.4 63.0 97.7 94.7 .1 38.5 55.4 107.9 97.9 - 1 7 .9 50.0 65.7 151.9 128.5 - 1 0 .3 66.2 72.7 38 39 40 41 42 43 44 45 Money................................................................... D em and deposits........................................... C urrency.......................................................... 13.7 10.4 3.4 21.6 17.2 4 .4 14.1 10.2 3.9 8.3 2.0 6.3 11.9 5.1 6.2 16.8 9.5 7.3 20.7 15.3 5 .4 3 .0 - 4 .0 7.1 10.1 5.9 4.2 23.3 12.9 10.5 43 44 45 46 Total of credit market instruments, deposits and currency.................................................... 2 3 4 5 6 7 8 9 10 11 By public agencies and foreign: Total net advances................................................... U.S. Govt, securities......................................... Residential m ortgages....................................... FHLB advances to S&L’s ................................ Other loans and securities................................ Totals advanced, by sector U.S. G ovt............................................................. Sponsored credit agencies................................ M onetary au th o rities........................................ Foreign................................................................. Agency borrowing not included in line 1 ......... 92.9 129.0 137.5 123.7 150.4 181.2 133.1 167.8 165.6 196.5 46 Public support rate (in per cent)..................... Private financial intermediation (in per cent) Total foreign funds............................................ 31.1 107.4 22.5 11.9 96.4 13.7 18.0 93.2 7.6 28.5 81.2 25.7 22.1 68.4 5.7 21.4 81.6 17.7 29.9 71.9 8.5 16.1 66.0 3.0 20.8 76.9 8.7 22.0 85.8 26.6 47 48 49 M e m o : Corporate equities not included above 50 Total net issues....................................................... 51 M utual fund sh ares........................................... 52 Other equities..................................................... 53 Acquisitions by financial institutions................. 54 O ther net p urchases.............................................. 15.0 1.3 13.7 17.8 -2 .9 13.3 -.5 13.8 15.3 -2 .1 9.2 -1 .2 10.4 13.3 -4 .1 4 .9 -.5 5 .4 5.5 -.7 11.2 .8 10.4 8.3 2.9 12.7 .3 12.3 12.0 .7 11.7 1.5 10.2 9 .2 2 .4 10.8 .1 10.7 7 .4 3.4 14.0 -1 .1 15.0 11.8 2.1 11.4 1.8 9.6 12.1 -.7 50 51 52 53 54 47 48 49 N o tes by l in e n o . 1. 2. 6. 11. 12. 17. 25. 26. 28. Line 2 of p. A-44. Sum of lines 3-6 or 7-10. Includes farm and commercial mortgages. Credit market funds raised by Federally sponsored credit agencies, and net issues o f Federally related mortgage pool securities. Included below in lines 3, 13, and 33. 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. Includes farm and commercial mortgages. Lines 39 plus 44. Excludes equity issues and investment company shares. Includes line 18. Foreign deposits at commercial banks, bank borrowings from foreign branches, and liabilities of foreign banking agencies to foreign af filiates. 29. Demand deposits at commercial banks. 30. Excludes net investment of these reserves in corporate equities. 31. Mainly retained earnings and net miscellaneous liabilities. 32. Line 12 less line 19 plus line 26. 33-37. Lines 13-17 less amounts acquired by private finance. Line 37 includes mortgages. 45. Mainly an offset to line 9. 46. Lines 32 plus 38 or line 12 less line 27 plus line 45. 47. Line 2/line 1. 48. Line 19/line 12. 49. Lines 10 plus 28. 50. 52. Includes issues by financial institutions. N o t e .—Full statements for sectors and transaction types quarterly, and annually for flows and for amounts outstanding, may be obtained from Flow of Funds Section, Division of Research and Statistics, Board of Governors of the Federal Reserve System, Washington, D.C, 20551. A46 2.10 Domestic Nonfinancial Statistics □ July 1977 N O N F IN A N C IA L BU SIN E SS ACTIVITY Selected Measures 1967 = 100; m onthly and quarterly data are seasonally adjusted. Exceptions noted. i M easure 1974 1975 12 9.3 M arket groupings: 1976 1977 1976 Nov. Dec. Jan. Feb. M ar. Apr. May June 117.8 1 29. 8 131 .8 133.1 132.1 13 3 .2 13 5 .2 13 6 .2 1 37 .6 1 3 8. 6 7 129.3 119.3 129.3 131.7 133.8 133.1 133.9 134.9 136.2 137.2 138.3 4 5 6 7 125.1 128.9 120.0 135.3 132.4 118.2 124.0 110.2 123.1 115.5 127.3 136.8 114.3 136.8 130.5 129.8 139.1 116.9 138.8 131.9 132.1 142.0 118.6 139.8 131.9 130.8 140.2 117.8 141.8 130.7 131.8 141.0 119.0 141.8 132.4 133.0 142.8 119.7 141.9 135.5 134.4 143.6 121.8 142.8 136.4 135.3 143.9 123.3 144.6 137.9 136.3 144.7 124.9 145.8 138.9 8 Industry groupings: M anufacturing......................................................... 129.4 116.3 129.4 131.9 132.8 131.5 132.9 135.2 136.3 137.9 138.7 9 10 Capacity utilization (per cen t)1 in— M anufacturing............................................................. Industrial materials industries.................................. 8 4. 2 8 7.7 73 .6 73 .6 80.1 80.3 8 0 .8 8 0.3 8 1 .2 80.1 80 .2 79.1 80 .8 80.0 82.1 81 .6 82. 5 82.1 83 .3 8 2 .8 83 .5 83.2 11 C.nnstrnr.tinn rnntracts2.................................................... 173.9 162.3 190.2 186.0 183.0 2 0 3 .0 2 0 7 .0 2 0 7 .0 2 5 0 .0 31 7 .0 17 lMnnnpriniltiirnl pmnlnvmpnf. total3............................... Goods-producing, to ta l............................................. 13 M anufacturing, to ta l.............................................. 14 Manufacturing, production-w orker.................... 15 16 Service-nroducine........................................................... 119.1 106.2 103.1 102.1 126.1 116.9 9 6 .9 94. 3 91. 3 127.8 12 0.6 100.3 97 .5 9 5 .2 131.7 12 1. 6 10 0.9 98.0 95.6 132.9 12 2.0 101.0 9 8 .2 9 5 .7 133.5 122. 3 101.3 9 8 .8 9 6 .5 133.8 1 22 .7 101.9 98 .9 9 6 .5 134.1 12 3.6 103.2 99 .8 9 7 .6 134.8 '1 2 4 . 0 '104 .1 '10 0 .4 '98 .3 '13 4 .9 '1 2 4 .4 '1 0 4 . 5 '1 0 0 .8 '9 8 .9 '1 35 .3 17 Pprsnnnl inrnmp. tntal4 .................................................... Wages and salary disbursements............................. 18 M anufacturing............................................................. 19 184.1 178.9 157.6 199.4 188.7 157.9 219.1 208 .3 176.7 226. 8 21 3. 2 182.4 2 2 9.7 2 1 7 .6 184.1 2 3 0.0 2 1 8 .4 185.0 2 3 3 .7 2 2 1. 5 188.4 23 7.2 2 2 4 .8 192.6 23 9 .0 '22 6 .9 ' 1 94 .3 P240.5 *290.1 *196.9 i>124.6 *10 4.6 *100 .7 * 9 8.7 *135.5 20 Disposable personal income.......................................... 180.5 198.5 2 1 7 .0 218.1 21 Retail sales5..................................................................... 171.2 186.0 206. 6 212.3 22 1.2 216. 5 21 5.7 2 2 7.4 2 2 7.6 22 9.3 22 6.3 Prices : 6 C onsum er..................................................................... 22 W holesale...................................................................... 23 147.7 160.1 161.2 174.1 170.5 182.9 173.8 185.6 174.3 187.1 175.3 188.0 177.1 190.0 178.2 191.9 179.6 194.3 180.6 195.2 181.8 194.4 1 Ratios of indexes o f production to indexes o f capacity. Based on data from Federal Reserve, McGraw-Hill Economics Department, and De partment of Commerce. 2 Index of dollar value o f total construction contracts, including residential, nonresidential, and heavy engineering, from McGraw-Hill Informations Systems Company, F. W. Dodge Division. 3 Based on data in Employment and Earnings (U.S. Dept, of Labor). Series covers employees only, excluding personnel in the Armed Forces. 4 Based on data in Survey o f Current Business (U.S. Dept, of Com merce). Series for disposable income is quarterly. 2.11 23 4 .2 5 Based on Bureau of Census data published in Survey o f Current Business (U.S. Dept, of Commerce). 6 D ata without seasonal adjustment, as published in Monthly Labor Review (U.S. Dept, o f Labor). Seasonally adjusted data for changes in the price indexes may be obtained from the Bureau o f Labor Statistics, U.S. Dept, of Labor. N o t e . — Basic data (not index numbers) for series mentioned in notes 3, 4. and 5, and indexes for series mentioned in notes 2 and 6 may also be found in the Survey o f Current Business (U.S. Dept, of Commerce). O UTPUT, CAPACITY, A N D CAPACITY UTILIZATION Seasonally adjusted 1976 1977 1977 1976 1977 1976 Series Q3 Q4 Q2* Ql Output (1967 = 100) Q3 Q4 Ql Q2* Capacity (per cent of 1967 output) 03 Q4 Ql Q2* Utilization rate (per cent) i 1 M anufacturing.................................................. 131.1 131.5 133.2 137.6 162.3 163.2 164.3 165.6 80.8 80.6 81.1 83.1 146.6 132.8 168.8 158.8 170.1 159.6 171.4 160.6 172.9 161.8 82.5 79.6 81.7 79.9 81.7 80.6 84.8 82.1 Primary processing...................................... Advanced processing.................................. 139.3 126.3 138.9 127.5 140.1 129.4 4 M aterials........................................................... 132.6 131.8 132.9 137.7 163.1 164.3 165.5 166.6 81.3 80.2 80.3 82.7 D urable goods.............................................. Basic m e ta l............................................... N ondurable goods...................................... Textile, paper, and chem ical................ Textile.................................................... P a p e r..................................................... C hem ical............................................... E nergy........................................................... 130.7 117.1 146.6 151.2 114.4 131.9 175.1 119.9 128.4 107.7 147.0 151.5 111.7 130.2 177.6 121.5 129.0 107.9 149.3 153.7 111.1 131.7 181.4 121.7 135.9 117.0 154.8 160.6 113.3 135.6 191.6 121.5 166.7 143.7 172.5 180.1 139.8 146.7 211.2 142.7 167.8 144.4 174.1 182.0 140.6 147.9 213.7 143.9 169.0 144.8 175.6 183.6 141.4 148.9 216.2 144.3 170.3 145.1 177.2 185.4 141.9 150.1 218.7 144.7 78.4 81.5 85.0 84.0 81.8 89.9 82.9 84.0 76.5 74.6 84.4 83.2 79.4 88.1 83.1 84.4 76.3 74.5 85.0 83.7 78.6 88.4 83.9 84.3 79.8 80.7 87.4 86.6 79.9 90.4 87.6 83.9 2 3 5 6 7 8 9 10 11 12 Manpower 2.12 A47 LABO R FORCE, EM PLO YM ENT, A N D U N E M P L O Y M E N T Thousands o f persons; m onthly data are seasonally adjusted. Exceptions noted. Category 1977 1976 1974 1975 1976 Jan. Dec. Feb. M ar. Apr. May June Household survey data 1 Noninstitutional population1................ 2 Labor force (including Armed Forces)1........................................... 3 Civilian labor force............................... E m ploym ent: 4 Nonagricultural industries2........ A griculture...................................... 5 Unem ploym ent: 6 N u m b er........................................... 7 Rate (per cent o f civilian labor force)........................................ 8 Not in labor force.................................. 150,827 153,449 156,048 157,176 157,381 157,584 157,782 157,986 158,228 158,456 93,240 91,011 94,793 92,613 96,917 94,773 98,106 95,960 97,649 95,516 98,282 96,145 98,677 96,539 98,892 96,760 99,286 97,158 99,770 97,641 82,443 3,492 81,403 3,380 84,188 3,297 85,184 3,257 85,468 3,090 85,872 3,090 86,359 3,116 86,763 3,260 87,022 3,386 87,341 3,338 5,076 7,830 7,288 7,517 6,958 7,183 7,064 6,737 6,750 6,962 5 .6 8.5 7.7 7.8 7.3 7.5 7.3 7.0 6 .9 7.1 57,587 58,655 59,130 59,071 59,732 59,302 59,104 59,094 58,943 58,686 81,395 19,404 842 3,759 4,568 18,189 4,453 15,149 15,031 '81,686 '19,528 '847 '3,842 '4,575 '18,203 '4,463 '15,182 '15,046 '81,921 '19,599 '844 '3,867 '4,585 '18,226 '4,481 '15,205 '15,114 *>82,056 2*19,575 2*859 2*3,898 2*4,574 2*18,237 2*4,493 2*15,281 2*15,139 Establishment survey data 9 Nonagricultural payroll employment3 10 M anufacturing.................................... 11 M ining................................................. 12 Contract construction....................... 13 Transportation and public utilities. 14 T rade.................................................... Finance................................................ 15 16 Service.................................................. G overnm ent........................................ 17 78,413 20,046 694 3,957 4,696 17,017 4,208 13,617 14,177 77,050 18,347 745 3,515 4,499 16,997 4,222 14,008 14,773 79,443 18,958 783 3,593 4,508 17,694 4,315 14,645 14,947 1 Persons 16 years o f age and over. M onthly figures, which are based on sample data, relate to the calendar week that contains the 12th day; annual data are averages o f monthly figures. By definition, seasonality does not exist in population figures. Based on data from Employment and Earnings (U.S. Dept, o f Labor). 2 Includes self-employed, unpaid family, and domestic service workers. 80,344 19,095 808 3,605 4,553 17,898 4,403 14,936 15,046 80,561 19,211 817 3,561 4,549 17,981 4.423 15;010 15,009 80,824 19,233 823 3,645 4,553 18,067 4,431 15,068 15,004 3 D ata include all full- and part-time employees who worked during, or received pay for, the pay period that includes the 12th day o f the month, and exclude proprietors, self-employed persons, domestic servants, unpaid family workers, and members o f the Armed Forces. D ata are adjusted to the February 1977 benchmark. Based on data from Employ ment and Earnings (U.S. Dept, o f Labor). A48 2.13 Domestic Nonfinancial Statistics □ July 1977 IN D U S T R IA L P R O D U C T IO N 1967 = 100 except as noted; m onthly data are seasonally adjusted. Grouping 1967 pro p or tion 1976 1976 aver age Apr. May 1977 June Jan. Feb. Mar. Apr. May? Ju n ee M ajor market groupings 1 Total index................................................. 100.00 129.8 128.4 129.6 130.1 132.1 133.2 135.2 136.2 137.6 138.6 2 P roducts..................................................... 3 Final products........................................ 4 Consumer g oods.............................. 5 Equipm ent......................................... 6 Intermediate products......................... 7 M aterials.................................................... 60.71 47.82 27.68 20.14 12.89 39.29 129.3 127.3 136.8 114.3 136.8 130.5 128.0 126.3 136.1 112.9 134.7 129.2 128.9 127.3 137.4 113.5 135.0 130.6 129.5 127.6 137.8 113.8 135.9 131.1 133.1 130.8 140.2 117.8 141.8 130.7 133.9 131.8 141.0 119.0 141.8 132.4 134.9 133.0 142.8 119.7 141.9 135.5 136.2 134.4 143.6 121.8 142.8 136.4 137.2 135.3 143.9 123.3 144.6 137.9 138.3 136.3 144.7 124.9 145.8 138.9 8 9 10 11 12 Consumer goods Durable consumer goods..................... Automotive p ro d u cts...................... Autos and utility vehicles.......... A utos.......................................... Auto parts and allied goods........ 7.89 2.83 2.03 1.90 .80 141.5 154.8 149.9 132.0 167.2 141.1 155.2 152.1 134.3 163.1 143.2 154.0 153.4 134.4 135.6 144.2 156.6 156.6 137.5 156.9 145.1 164.0 155.8 136.9 184.9 146.1 161.8 152.7 132.8 184.5 152.4 178.3 176.1 155.8 184.1 152.0 174.9 171.2 150.6 184.8 152.6 172.3 166.8 148.5 186.5 155.2 179.0 175.8 156.8 187.8 13 14 15 16 17 Home goods...................................... Appliances, A/C, and TV .......... Appliances and T V ................. Carpeting and fu rniture............. Misc. home g oods....................... 5.06 1.40 1.33 1.07 2.59 134.1 115.8 118.6 144.1 139.9 133.1 117.2 119.6 143.0 137.8 137.2 123.5 126.4 142.6 142.5 137.4 123.8 126.7 142.5 142.6 134.6 113.4 116.0 142.7 142.8 137.3 118.5 121.1 145.9 144.0 137.9 124.1 126.5 144.6 142.7 139.0 126.3 129.7 144.8 143.5 141.6 132.2 136.0 148.2 144.0 141.9 133.8 18 19 20 21 Nondurable consumer goods............... C lothing............................................. Consumer staples............................. Consumer foods and to b acco . . 19.79 4.29 15.50 8.33 134.9 126.9 137.2 130.8 134.0 129.6 135.2 128.4 135.1 132.1 135.8 129.8 135.1 127.9 137.1 130.8 138.3 138.9 124.2 | 124.2 142.2 142.9 132.9 135.4 139.0 124.0 143.3 136.5 140.3 125.0 144.5 138.1 140.4 140.7 143.8 137.8 143.7 22 23 24 25 26 N onfood staples........................... Consumer chemical products Consumer paper p ro d u cts. . . Consumer energy p ro d u cts. . Residential utilities............. 7.17 2.63 1.92 2.62 1.45 144.6 166.6 113.3 145.4 143.3 162.1 114.2 145.9 154.5 142.7 161.4 113.8 145.1 154.7 144.5 165.4 112.3 147.2 153.2 153.1 178.5 117.0 154.1 151.6 175.7 113.3 155.3 151.1 175.9 117.4 151.3 151.7 178.1 116.6 151.1 151.0 177.4 117.1 149.6 150.4 27 28 29 30 31 Equipment Business equipment............................... Industrial equipm ent....................... Building and mining equip........ M anufacturing equipm ent......... Power equipm ent......................... 12.63 6.77 1.44 3.85 1.47 136.1 127.9 177.4 106.4 135.3 134.1 125.3 170.7 105.4 132.7 134.6 126.9 174.6 106.4 134.0 135.0 127.4 174.9 106.5 135.4 142.0 131.4 187.9 107.8 137.5 143.1 133.2 192.9 108.5 139.3 144.5 133.9 195.9 109.0 138.3 147.0 136.3 200.5 112.0 136.7 149.3 138.8 206.1 113.2 139.7 151.6 140.3 207.8 114.6 141.3 32 33 34 35 Commercial transit, farm e q u ip ... Commercial equipm ent.............. Transit equipm ent....................... Farm equipm ent.......................... 5.86 3.26 1.93 .67 145.5 173.2 103.8 130.6 144.6 170.0 105.6 132.7 143.7 169.5 104.2 133.1 143.8 171.4 102.9 128.0 154.5 185.2 108.4 138.0 154.6 185.2 108.7 137.7 156.6 186.1 113.0 138.8 159.2 189.7 114.7 140.0 161.5 192.0 115.8 144.4 164.5 195.4 118.9 36 144.4 Defense and space equipment............ 7.51 77.9 77.3 78.2 78.3 77.1 78.5 78.3 79.4 79.6 80.0 Intermediate products 37 Construction supplies......................... 38 Business supplies................................. 39 Commercial energy products........ 6.42 6.47 1.14 132.0 141.5 156.5 128.0 141.3 156.8 130.9 139.0 157.1 131.8 140.1 156.1 136.1 147.3 162.3 135.7 147.8 165.7 136.4 147.4 164.2 137.4 148.1 165.9 139.6 149.5 167.4 141.1 40 41 42 43 44 Materials Durable goods materials..................... Durable consumer p a rts................. Equipment p a rts .............................. D urable materials n.e.c.................. Basic metal m aterials................. 20.35 4.58 5.44 10.34 5.57 126.6 121.6 133.9 125.0 109.8 124.5 119.2 130.5 123.5 107.8 126.8 123.0 133.0 125.2 113.2 127.0 123.1 134.0 125.0 111.3 126.8 121.5 135.1 124.8 104.7 128.0 124.1 137.3 124.9 104.8 132.1 126.8 137.8 131.3 114.1 134.1 130.3 140.7 132.2 115.1 135.9 133.4 142.1 133.7 117.5 137.6 135.6 144.6 134.8 45 46 47 48 49 Nondurable goods materials............... Textile, paper, and chem. m a t.. . . Textile materials.......................... Paper m aterials............................ Chemical m aterials..................... 10.47 7.62 1.85 1.62 4.15 146.4 151.2 114.4 131.1 175.5 146.9 152.2 114.1 132.1 ill.2 146.2 150.9 116.4 131.2 173.9 147.5 151.8 116.1 134.2 174.7 144.6 148.8 110.6 127.6 174.2 150.3 154.2 110.4 133.2 181.9 153.1 158.2 112.4 134.3 188.0 153.8 159.5 112.8 133.6 190.6 155.3 161.3 113.8 136.8 192.2 155.4 161.0 50 51 52 53 54 Containers, nondurable................. Nondurable materials n.e.c............ Energy m aterials.................................. Primary energy................................. Converted fuel m aterials................ 1.70 1.14 8.48 4.65 3.82 142.6 120.0 120.3 107.0 136.4 141.9 120.4 118.8 105.0 135.7 140.7 123.2 120.6 106.2 138.1 146.6 119.6 120.6 107.5 136.7 139.5 122.6 122.6 102.9 146.5 150.7 124.3 120.8 103.1 142.3 148.9 126.1 121.7 107.0 139.6 146.9 126.0 120.5 105.4 139.0 149.7 123.7 121.2 106.5 139.0 55 56 57 58 Supplementary groups Home goods and clothing................. Energy, to tal......................................... Products............................................ M aterials............................................ 9.35 12.23 3.76 8.48 130.8 129.0 148.8 120.3 131.5 128.2 149.3 118.8 134.9 129.3 148.8 120.6 133.0 129.7 149.9 120.6 129.8 133.0 156.5 122.6 131.3 132.4 158.4 120.8 131.5 132.0 155.2 121.7 132.5 131.3 155.6 120.5 135.2 131.6 155.0 121.2 For N o t e see opposite page. 136.4 132.3 Output 2.13 A49 Continued Grouping SIC code 1967 pro p o r tion 1976 aver age 1976 Apr. May 1977 June Jan. Feb. M ar. Apr. Mayz> Junee Gross value o f products in m arket structure (annual rates, in billions of 1972 dollars) 1 ? 3 4 5 Interm ediate p ro d u cts................................ 1507.4 1390.9 1277.5 U 13.4 545.0 551.5 552.4 564.2 570.3 578.1 580.5 586.5 589.8 4 2 6 .2 4 2 1 .8 4 2 7 .5 4 2 8 .3 4 3 6 .5 4 4 1 .2 4 4 9 .0 303.7 123.7 309.3 127.2 312.6 128.6 317.6 131.7 4 4 9 .5 316 .9 4 5 7 .1 299.9 122.1 305.5 123.1 4 5 3 .9 302.9 123.5 132.4 318.9 135.1 321.3 135.6 1116.6 124.3 123.0 123.7 124.1 127.8 128.6 129.3 130.8 132.4 132.7 550.6 M ajor industry groupings 7 8 9 10 M ’ nnufarturine................................... ...... ........... 11 N ondurable................................................... 12 D u rab le......................................................... 1 2 .0 5 1 3 1 .9 13 1 .2 13 2 .0 1 3 1 .9 136.1 1 3 6 .4 1 3 6 .2 1 3 4 .6 113.5 150.8 165.7 113.0 153.0 169.8 113.2 161.5 116.5 158.8 120.2 154.2 137.1 114.1 151.7 114.4 151.2 167.2 1 3 5 .8 6.36 5.69 3.88 118.7 152.4 119.5 154.0 122.3 153.9 8 7 .9 5 1 2 9 .4 128.5 140.7 120.1 130.2 141.3 122.3 1 3 2 .9 141.0 121.4 129.6 140.9 121.7 131.5 35.97 51.98 143.7 123.0 145.7 124.0 135.2 147.0 126.8 136.3 148.1 128.0 137.9 149.4 130.0 138.7 149.5 131.2 133.6 119.9 13 14 15 16 Mining Metal mining................................................ C o al................................................................ Oil and gas extraction................................ Stone and earth minerals........................... 10 11, 12 13 14 .51 .69 4.40 .75 122.8 116.9 112.0 118.3 124.3 114.4 111.3 117.5 118.3 119.2 110.8 116.7 118.3 122.7 112.3 116.5 135.6 95.3 112.0 121.6 132.3 100.8 115.8 124.9 133.8 124.1 117.0 126.1 127.5 118.4 116.7 124.7 123.9 122.4 117.9 124.0 17 18 19 20 21 Nondurable manufactures F o o d s............................................................. Tobacco products........................................ Textile mill products.................................. Apparel pro d u cts........................................ Paper and p ro d u cts.................................... 20 21 22 23 26 8.75 .67 2.68 3.31 3.21 132.0 117.2 135.9 126.1 133.1 129.2 115.4 135.7 126.1 133.9 131.2 114.5 138.0 130.3 134.0 130.5 115.4 138.1 126.8 139.1 135.5 114.8 131.8 123.6 130.6 137.1 117.0 133.0 125.2 136.5 138.5 115.3 133.1 123.5 135.5 140.6 112.1 135. 5 124.2 136.5 140.1 139.2 139.3 22 23 24 25 26 Printing and publishing............................. Chemicals and products............................. Petroleum p ro d u cts.................................... R ubber & plastic p ro d u cts........................ Leather and products................................. 27 28 29 30 31 4.72 7.74 1.79 2.24 .86 120.7 169.4 132.7 199.8 82.0 122.0 168.7 131.6 198.2 87.7 120.5 166.6 .132.7 •185.6 , 9 1 .4 119.7 170.0 135.1 189.1 84.0 124.3 172.0 141.0 218.7 74.8 122.4 175.1 145.4 220.4 75.0 124.3 179.0 145.1 225.6 73.8 123.4 180.6 145.9 226.0 73.8 123.9 181.6 145.3 232.7 75.4 124.0 27 28 29 30 Durable manufactures Ordnance, pvt. & govt................................ Lum ber and products................................. Furniture and fixtures................................ Clay, glass, stone p ro d ............................... 19, 91 24 25 32 3.64 1.64 1.37 2.74 71.7 125.1 132.8 135.8 69.1 122.8 131.7 132.7 ' 71.4 123.0 131.0 133.9 73.1 120.3 130.1 136.1 70.8 132.7 135.1 137.3 72.4 132.2 137.1 139.0 72.3 132.1 135.1 143.7 73.8 131.6 135.4 144.5 73.7 132.2 137.0 145.5 73.4 31 32 33 34 35 Primary m etals............................................. Iron and steel........................................... Fabricated metal p ro d ....... ........................ Nonelectrical m achinery............................ Electrical machinery.................................... 33 331,2 34 35 36 6.57 4.21 5.93 9.15 8.05 108.0 104.4 123.3 134.7 131.7 105.4 103.5 121.5 133.5 130.0 113.2 110.7 121.4 134.0 131.8 111.5 110.0 124.0 133.5 132.0 100.0 89.8 125.7 139.5 134.0 100.4 91.3 126.0 139.4 137.6 108.3 97.9 127.5 140.4 137.6 112.3 104.0 128.6 142.9 139.6 117.0 111.2 130.1 145.5 142.0 118.0 112.5 131.1 147.5 143.0 36 37 38 39 40 Transportation equip.................................. M otor vehicles & p ts .............................. Aerospace & misc. tr. eq....................... Instrum ents................................................... Miscellaneous m frs..................................... 37 371 372,9 38 39 9.27 4.50 4.77 2.11 1.51 110.6 140.7 82.2 148.2 143.5 110.6 141.3 81.7 145.4 140.7 112.9 144.3 83.3 149.0 145.5 112.6 146.5 80.7 149.5 145.9 113.5 145.5 83.4 153.7 147.8 113.4 145.4 83.3 157.0 147.9 120.5 161.2 82.3 156.9 147.4 119.7 157.8 83.7 157.8 145.8 120.1 158.0 84.4 158.5 147.8 122.7 162.7 85.0 159.7 148.0 i 1972 dollars. N o t e .— Published groupings include some series and subtotals not shown separately. For summary description and historical data, see B u l l e t in for June 1976, pp. 470-79. Availability o f detailed descriptive and historical data will be announced in a forthcoming B u l l e t in . 137.9 i44! 7 A50 Domestic Nonfinancial Statistics □ July 1977 2.14 HOUSING AND CONSTRUCTION M onthly figures are at seasonally adjusted annual rates. Exceptions noted. 1976 Item 1974 r 1975' 1977 1976' N o v .' D ec.' J a n .r F e b .r M ar.' A p r.' May Private residential real estate activity (thousands of units) NEW U NITS 1 Permits authorized......................... 2 1-family....................................... 3 2-or-more-family....................... ,074 644 431 927 669 278 1,281 895 386 1,590 1,072 518 1,514 1,053 461 1,307 927 380 1,529 1,064 465 1,712 1,208 504 1,563 1,030 533 1,606 1,070 536 4 Started............................................. 5 1-fam ily....................................... 6 2-or-more-family....................... ,338 888 450 1,160 892 268 1,540 1,163 377 1,706 1,236 470 1,889 1,324 565 1,384 1,006 378 1,802 1,424 378 2,089 1,503 586 1,899 1,433 466 1,929 1,461 468 7 Under construction, end o f period 8 1-fam ily....................................... 9 2-or-more-family....................... ',189 516 673 1,003 531 472 1,157 656 501 1,168 671 497 1,192 686 507 1,198 692 506 1,215 710 505 1,240 735 505 1,275 754 521 10 Completed........................................ 11 1-fam ily....................................... 12 2-or-more-family....................... ',692 931 760 1,297 866 430 1,362 1,026 336 1,399 1,068 331 1,444 1,078 366 1,416 1,103 313 1,637 1,242 395 1,705 1,232 473 1,510 1,197 313 13 Mobile homes shipped................. 329 213 250 247 248 258 275 275 252 501 407 544 383 639 433 694 429 808 431 827 431 887 433 827 435 726 440 35.9 36.2 39.3 38.9 44.2 41.6 45.8 41.2 45.9 41,6 45.5 41.9 47.4 42.0 46.0 42.9 48.9 43.3 38.9 42.5 48.1 50.0 50,6 50.7 52.6 51.4 55.1 55.0 1,212 2,452 3,002 3,300 3,470 3,190 3,080 3,410 3,300 3,450 32.0 35.8 35.3 39.0 38.1 42.2 38.8 42.9 39.0 43.3 39.6 44.0 40.7 45.1 41.0 45.5 42.0 46.5 42.2 46.8 14 15 16 17 18 M erchant builder activity in 1-family units: Number s o ld .................................. Number for sale, end of period1. Price (thous. of dollars)2 M edian: Units sold............................... Units for sale......................... A verage: Units sold............................... 242 EX ISTING U NITS (1-family) 19 N um ber so ld .................................. Price of units sold (thous. of dollars):2 20 M edian.................................... 21 Average................................... Value of new construction 3 (millions of dollars) CONSTRU CTIO N 22 Total put in place.................................. 138,501 134,293 147,481 153,837 155,425 148,393 157,117 163,346 166,298 169,578 23 Private...................................................... 24 R esidential.......................................... 25 Nonresidential, to ta l........................ Buildings: 26 In d u strial.................................... 27 C ommercial................................ 28 O ther............................................ 29 Public utilities and o th e r............. 100,166 50,376 49,790 93,623 46,472 47,151 109,500 60,500 48,980 118,958 69,574 49,384 121,153 71,094 50,059 116,410 66,785 49,625 122,634 72,378 50,256 127,942 76,209 51,733 130,113 78,126 51,987 131,547 80,420 51,127 7,902 15,944 5,791 20,153 8,018 12,806 5,582 20,745 7,183 12,756 6,152 22,889 6,727 12,566 6,500 23,591 6,559 12,796 6,507 24,197 6,157 12,537 6,068 24,963 6,262 12,542 6,061 25,391 7,162 13,677 5,850 25,044 7,279 13,851 6,271 24,586 6,986 13,881 6,136 24,124 30 Public....................................................... 31 M ilitary................................................ 32 Highway.............................................. 33 Conservation and developm ent. . . O ther4.................................................. 34 38,334 1,185 12,065 2,741 22,343 40,670 1,390 10,861 3,234 25,165 37,981 1,508 9,764 3,722 22,997 34,879 1,525 8,502 3,856 20,996 34,273 1,474 8,162 3,651 20,986 31,983 1,498 34,483 1,552 35,403 1,452 36,185 1,494 38,031 1,640 2,731 27,754 3,111 29,820 2 ,9 i8 31,033 3,271 31,420 2,856 33,535 1 N ot at annual rates. 2 N ot seasonally adjusted. 3 Value o f new construction data in recent periods may not be strictly comparable with data in prior periods due to changes by the Bureau of the Census in its estimating techniques. For a description o f these changes see Construction Reports (C-30-76-5), issued by the Bureau in July 1976. 4 Beginning Jan. 1977 Highway imputations are included in Other. N o te . —Census Bureau estimates for all series except (a) mobile homes, which are private, domestic shipments as reported by the M anu factured Housing Institute and seasonally adjusted by the Census Bureau, and (b) sales and prices o f existing units, which are published by the N ational Association o f Realtors. All back and current figures are avail able from originating agency. Permit authorizations are for 14,000 jurisdictions reporting to the Census Bureau. Prices A51 2.15 CONSUMER AND WHOLESALE PRICES Percentage changes based on seasonally adjusted data, except as noted. 12 months to— 3 months (at annual rate) to— Item 1976 May 1976 1977 May June Sept. Dec. 1 m onth to— 1977 1976 Mar. Dec. 1977 Feb. M ar. Apr. May Index level May 1977 (1967 = 100)1 C onsumer prices 1 AM item s............................................................. 6.2 6 .7 6.1 5.3 4 .2 10.0 1.0 .6 .8 .6 180.6 2 Commodities...................................................... 3 F o o d ............................................................... 4 Commodities less fo o d ............................... 5 D u rab le...................................................... 6 N ondurable.............................................. 4 .9 4 .8 5 .0 6 .0 4.6 6 .2 6.5 5.9 6 .4 6 .0 6 .0 6.2 5.6 6.5 5.0 3 .9 1.6 5.5 5.0 6.0 3 .4 0 .0 5.7 6.0 5.4 10.4 14.6 7.4 10.5 10.1 1.2 2 .0 .7 .9 1.5 .5 .6 .4 .6 .5 .8 1.5 .4 .5 .9 .5 .7 .4 .2 .5 174.3 191.7 164.7 163.4 178.3 7 Services............................................................... 8 R e n t................................................................ 9 Services less re n t......................... ................ 8 .4 5.4 8.9 7.8 5 .8 8.0 6 .5 5.4 6.7 7.5 5.4 7.7 5.1 5.3 5.4 9 .8 6.3 10.4 .6 .3 .7 .8 .5 .8 .8 .7 .8 .4 .7 .7 192.3 152.2 199.5 O ther groupings: All items less fo o d 1.................................... All items less sh elter1................................. Homeo w nership1......................................... 6.7 6 .4 5.3 6 .8 6 .8 6.7 7 .0 6.9 4.3 7.4 5.6 8.0 5.3 4.3 1.2 6.9 9.4 9.1 .6 1.1 .7 .6 .6 .6 .7 .8 .9 .6 .5 .6 177.3 178.4 202.3 10 11 12 .4 .3 .3 .1 Wholesale prices 13 All commodities................................................ 5.0 7.3 6.6 3.5 7.1 10.2 .6 .9 1.1 1.1 .4 195.2 14 Farm products, and processed foods and feeds............................................................ 15 Farm p roducts............................................. 16 Processed foods and feeds......................... 2 .0 4 .4 .5 6 .5 6.1 6.7 13.4 18.2 10.3 -1 2 .0 - 1 1 .9 - 1 1 .8 6 .6 5.8 6.5 19.1 26.0 15.6 2.1 2.6 1.8 2 .0 2 .2 1.8 2.1 2 .5 1.9 2 .9 3.4 2.5 .3 -2 .3 1.8 196.8 204.3 192.0 6 .0 7 .6 4 .8 8 .0 7.6 7.9 .3 .6 .8 .6 .4 194.2 9 .0 5.8 15.6 7 .2 16.4 3.5 10.6 8.3 21.6 7.1 21.9 8.0 -2 .2 .5 4 .0 .6 2.3 .9 .3 .6 .8 .3 284.5 201.6 5.5 4 .4 6.2 6.3 7.3 5.5 8.4 6 .4 3.6 3.1 3.8 4.3 7.7 5.1 9.1 4 .7 5.2 3.3 6.5 9.5 8.5 7.0 9.5 5.3 .3 .1 .3 .7 .3 .5 .2 .5 .8 .4 1.0 .4 .7 .7 .7 .6 .5 .4 .5 .6 171.0 150.8 184.6 182.4 3.1 5.0 13.2 - 1 3 .1 8.4 12.7 2.8 2 .0 1.1 2 .5 2.1 192.4 17 Industrial commodities.................................... M aterials, supplies, and components o f w hich: 18 Crude m aterials2...................................... 19 Interm ediate materials 3......................... Finished goods, excluding fo o d s: 20 C onsum er.................................................. 21 D urable................................................. 22 N ondurable.......................................... 23 Producer.................................................... M em o: 24 Consumer fo o d s............................................... 1 N ot seasonally adjusted. 2 Excludes crude foodstuffs and feedstuffs, plant and animal fibers, oilseeds, and leaf tobacco. 3 Excludes intermediate materials for food manufacturing and manufactured animal feeds. S o u r c e .— Bureau of Labor Statistics. A52 Domestic Nonfinancial Statistics □ July 1977 2.16 GROSS NATIONAL PRODUCT AND INCOME Billions o f current dollars except as n o ted ; quarterly data are at seasonally adjusted annual rates. 1975 Account 1974 1975 1976 1977 1976 Q4 Q2 Q1 Q3 Q4 Ql Gross national product 1 1,413.2 1 ,516.3 1,691.6 1,588.2 1,636.2 1,675.2 1,708.9 1,745.1 *1,799.3 2 3 4 5 By source: Personal consumption expenditures..................... D urable g o o d s................................................... N ondurable g oods............................................ Services............................................................... 887.5 121.6 376.2 389.6 973.2 131.7 409.1 432.4 1,079.7 156.5 440.4 482.8 1,012.0 141.8 421.6 448.6 1,043.6 151.4 429.1 463.2 1,064.7 155.0 434.8 474.9 1,088.5 157.6 441.8 489.1 1,122.0 162.0 456.0 504.0 1,159.1 174.0 464.7 520.4 6 7 8 9 10 11 12 Gross private domestic investment...................... Fixed investm ent............................................... Nonresidential................................................ Structures.................................................... Producers’ durable equipm ent............... Residential structures.................................. N o n fa rm ..................................................... 215.0 204.3 149.2 54.1 95.1 55.1 52.7 183.7 198.3 147.1 52.0 95.1 51.2 49.0 239.6 227.7 160.0 55.3 104.7 67.7 65.1 201.4 205.7 148.7 52.1 96.6 57.0 54.2 229.6 214.7 153.4 53.2 100.2 61.3 58.6 239.2 223.2 157.9 54.9 103.0 65.3 62.9 247.0 231.9 163.0 56.0 107.0 68.9 66.3 242.8 241.0 165.6 57.0 108.6 75.5 72.7 267.9 254.1 173.9 56.6 117.4 80.2 77.4 13 14 Change in business inventories...................... N o n farm ......................................................... 10.7 12.2 - 1 4 .6 - 1 7 .6 11.9 11.9 -4 .3 - 9 .5 14.8 12.7 16.0 17.3 15.1 15.6 1.7 2 .2 13.8 13.0 15 16 17 N et exports o f goods and services....................... E x p o rts................................................................ Im p o rts ............................................................... 7.5 144.4 136.9 20.5 148.1 127.6 6 .6 162.7 156.0 21.0 153.7 132.7 8 .4 154.1 145.7 9 .3 160.3 151.0 4 .7 167.7 163.0 4 .2 168.5 164.3 r —6 .2 *•171.4 *•177.6 18 19 20 Govt, purchases o f goods and services............... Federal................................................................. State and lo c a l................................................... 303.3 111.6 191.6 339.0 124.4 214.5 365.6 133.4 232.2 353.8 130.4 223.4 354.7 129.2 225.5 362.0 131.2 230.9 369.6 134.5 235.0 376.2 138.9 237.4 378.5 138.2 240.3 21 22 23 24 25 26 By m ajor type o f product: Final sales, to ta l.................................................... Goods................................................................... Durable go o d s............................................... N ondurable.................................................... Services............................................................... Structures........................................................... 1,402.5 639.7 247.2 392.4 626.6 146.9 1,531.0 681.7 254.4 427.3 692.5 142.1 1,679.7 760.2 300.5 459.8 772.0 159.3 1,592.5 719.7 270.0 449.7 719.5 149.1 1,621.4 742.3 282.7 459.6 742.6 151.3 1,659.2 758.4 301.2 457.1 759.6 157.3 1,694.7 766.1 308.2 457.9 781.5 162.2 27 28 29 Change in business inventories.......................... D urable goods................................................... Nondurable goods............................................ 10.7 7.1 3.6 - 1 4 .6 - 1 2 .1 -2 .6 11.9 2.7 9 .2 -4 .3 - 1 0 .6 6.3 14.8 -3 .6 18.5 16.0 5.4 10.6 15.1 6.8 8.3 1.7 2 .0 -.3 13.8 8.2 5 .6 1 ,214.0 1,191.7 1,264.7 1,219.2 1,246.3 1,260.0 1,272.2 1,280.4 *•1,302.0 1,743.4 *■1,785.5 774.3 802.9 333.7 309.8 464.5 469.1 804.4 *•827.4 166.5 169.0 M em o : 30 Total GNP in 1972 dollars.................................... N ational income 1,135.7 1,207.6 1,348.4 1,264.6 1,304.7 1 ,337.4 1,362.5 1,389.3 *1,435.2 32 Compensation o f employees................................... 33 Wages and salaries................................................ 34 Government and Government enterprises.. 35 O th e r................................................................... 36 Supplement to wages and salaries....................... 37 Employer contributions for social insurance..................................................... 38 Other labor incom e.......................................... 875.8 764.5 160.4 604.1 111.3 928.8 806.7 175.8 630.8 122.1 1,028.4 890.4 190.7 699.7 138.0 963.1 836.4 182.2 654.1 126.7 994.4 861.5 185.4 676.1 132.9 1,017.2 881.1 188.7 692.4 136.2 1,037.5 897.8 191.7 706.1 139.6 1,064.5 921.0 197.0 723.9 143.5 1,097.7 947.1 200.0 747.1 150.5 55.8 55.5 59.7 62.5 67.9 70.1 61.6 65.2 65.9 67.1 67.1 69.0 68.6 71.1 70.2 73.3 74.7 75.8 39 Proprietors' income1.................................................. 40 Business and professional1.................................. 41 F a rm 1...................................................................... 86.9 61.1 25.8 90.2 65.3 24.9 96.7 73.8 22.8 97.2 69.0 28.3 93.2 71.4 21.9 100.3 72.8 27.5 96.1 74.4 21.7 97.1 76.8 20.3 103.6 79.6 24.0 42 Rental income o f persons2...................................... 21.0 22.4 23.5 22.9 23.3 23.1 23.4 24.3 25.1 43 Corporate profits1..................................................... 44 Profits before tax3................................................ 45 Inventory valuation adjustm ent......................... 46 Capital consumption adjustm ent....................... 84.8 127.6 - 3 9 .8 -3 .0 91.6 114.5 -1 1 .4 - 1 1 .5 117.8 147.9 - 1 4 .6 - 1 5 .5 105.6 131.3 - 1 2 .3 - 1 3 .5 115.1 141.1 - 1 1 .5 - 1 4 .5 116.4 146.2 - 1 4 .4 -1 5 .4 122.0 150.2 - 1 2 .6 -1 5 .7 117.8 154.2 -2 0 .0 -1 6 .4 *■119.9 *•160.0 - 2 3 .1 -1 7 .0 47 N et interest................................................................. 67.1 74.6 82.0 75.8 78.6 80.3 83.5 85.6 88.9 31 1 W ith inventory valuation and capital consumption adjustments. 3 For after-tax profits, dividends, etc., see Table 1.50. 2 W ith capital consumption adjustments. S o u r c e . —Survey o f Current Business (U.S. Dept, o f Commerce). National Income Accounts A53 2.17 PERSONAL INCOME AND SAVING Billions o f current dollars; quarterly data are at seasonally adjusted annual rates. Exceptions noted. 1974 Account 1975 1975 1977 1976 1976 Q4 Q2 Ql Q3 Q4 Ql Personal income and saving 1 Total personal income............................................... 1,1 5 3 .3 1,249 7 1,375.3 1,299.7 1,331.3 1,362.0 1 ,386.0 1,421.7 1 ,4 6 4 .a 2 Wage and salary disbursements............................... 3 Commodity-producing industries...................... 4 M anufacturing................................................... 5 Distributive industries.......................................... 6 Service industries.................................................. 7 Government and government enterprises........ 765.0 273.9 211.4 184.4 145.9 160.9 806.7 275.3 211.7 195.6 159.9 175.8 890.4 304.8 237.0 214.9 180.0 190.7 836.4 285.8 220.3 202.3 166.1 182.2 861.5 295.3 229.6 208.3 172.4 185.4 881.1 302.9 235.6 212.8 176.7 188.7 897.8 307.0 238.9 216.5 182.7 191.7 921.0 314.0 243.9 221.9 188.1 197.0 947.1 323.9 253.0 229.2 194.0 200.0 8 Other labor incom e.................................................. 55.5 62.5 70.1 65.2 67.1 6 9.0 71.1 73.3 75.8 9 Proprietors' income1.................................................. 10 Business and professional1.................................. 11 F a rm 1...................................................................... 86.9 61.1 25.8 90.2 65.3 24.9 96 .7 73.8 22.8 97.2 69.0 28.3 93.2 71.4 21.9 100.3 72.8 27.5 96.1 74.4 21.7 97.1 76.8 20.3 103.6 79.6 2 4.0 12 R ental income o f persons2...................................... 21 .0 22.4 23.5 22.9 23.3 23.1 23.4 24.3 25.1 13 D ividends.................................................................... 30.8 32.1 35.1 32.2 33.1 34.4 35.4 37.7 37.6 14 Personal interest incom e.......................................... 101.4 110.7 123.0 114.4 118.0 120.7 125.0 128.4 131.6 15 Transfer paym ents..................................................... 16 Old-age survivors, disability, and health insurance benefits.......................................... 140.3 175.2 191.3 182.5 188.6 187.6 192.4 196.6 202.8 70.1 81.4 93.0 86.3 88.1 89.5 95.8 98.5 100.0 17 L e s s : Personal contributions for social insurance......................................................... 47.6 50.0 54.9 51.0 53.4 54.3 55.2 56.6 59.7 18 E q u a l s : Personal incom e....................................... 1,153.3 1,249.7 1,375.3 1,299.7 1,331.3 1,362.0 1,386.0 1,421.7 1,464.0 L e s s : Personal tax and nontax p a y m e n ts.. . . 170.4 168.8 193.6 179.8 183.8 189.5 195.8 205.3 218.2 20 E q u a ls : Disposable personal incom e.................. 19 982.9 1,080.9 1,181.7 1,119.9 1,147.6 1,172.5 1,190.2 1,216.5 1,245.8 21 910.7 996.9 1,105.2 1,036.2 1,068.0 1,089.6 1,114.3 1,148.6 1,186.1 72.2 84.0 76.5 83.7 79.5 82.9 75.8 67.8 59.7 3,968.0 887.5 840.8 7 .3 4,007.0 973.2 855.5 7 .8 4,140.0 1,079.7 890.5 6.5 4,04 9 .0 1,012.0 867.5 7.5 4,103.0 1,043.6 880.4 6.9 4 ,143.0 1,064.7 890.5 7.1 4,1 4 2 .0 1,088.5 892.0 6 .4 4,1 6 8 .0 1,122.0 899.6 5 .6 4 ,1 9 5 .0 1,159.1 907.0 4 .8 L e s s : Personal outlays........................................ 22 E q u a l s : Personal saving.................................. .. M em o : Per capita (1972 dollars): 23 Gross national p roduct........................................ 24 Personal consumption expenditures................. 25 Disposable personal incom e............................... 26 Saving rate (per cen t)............................................... Gross saving 27 Gross private saving.................................................. 211.6 255.6 274.6 269.4 273.8 279.1 278.9 266.7 '265.3 28 29 30 Personal saving...................................................... Undistributed corporate profits1....................... Corporate inventory valuation adjustm ent.. . . 72.2 1.7 -3 9 .8 84.0 10.3 -1 1 .4 76.5 18.3 -1 4 .6 83.7 16.2 - 1 2 .3 79.5 20.6 - 1 1 .5 82.9 18.5 - 1 4 .4 75.8 21.5 -1 2 .6 67.8 12.7 -2 0 .0 59.7 r 13.5 —23.1 31 32 33 Capital consumption allowances: C o rp o rate........................................................... N oncorporate..................................................... Wage accruals less disbursements..................... 84.6 53.1 100.9 60.4 112.8 67.0 106.4 63.2 108.8 64.8 111.6 66.1 113.9 67.7 116.9 69.3 119.5 72.6 - 4 .2 - 1 1 .5 7 .3 - 6 4 .4 - 7 1 .2 6 .9 -4 4 .7 -5 8 .6 14.0 -6 1 .5 -6 9 .4 7.9 -5 1 .6 -6 3 .8 12.2 —44.9 - 5 4 .1 9 .2 -4 4 .7 -5 7 .4 12.7 - 3 7 .4 -5 9 .3 21.9 r —21.0 r —41.2 '2 0 .2 34 Government surplus, or deficit ( —), national income and product accounts........................... 35 Federal.................................................................... 36 State and lo cal....................................................... 37 Capital grants received by the United States, n e t........................................................................ -2 .0 38 Investment................................................................... 39 Gross private dom estic........................................ 40 N et foreign............................................................. 211.9 215.0 -3 .0 195.6 183.7 11.9 237.7 239.6 -2 .0 214.0 201.4 12.6 229.4 229.6 -.2 240.0 239.2 .8 242.9 247.0 -4 .1 238.4 242.8 -4 .3 ' 252.9 267.9 r —14.9 41 Statistical discrepancy.............................................. 6.8 4 .4 7.7 6.1 7 .2 5.8 8.7 9.2 '8 .6 1 W ith inventory valuation and capital consumption adjustments. 2 W ith capital consumption adjustment. S o u r c e .—Survey o f Current Business ( U .S . Dept, o f Commerce). A54 3.10 International Statistics □ July 1977 U .S. IN T E R N A T IO N A L TR A N SA C TIO N S Summary Millions of dollars; quarterly data are seasonally adjusted except as noted.1 1976 Item credits or debits 1974 1975 1977 1976 Ql Q2 Q3 Q4 Ql 1 Merchandise exports..................................................................... 2 Merchandise im p o rts.................................................................... M erchandise trade balance2 ................................................... 3 98,306 103,673 -5 ,3 6 7 107,088 98,043 9,045 114,700 123,917 -9 ,2 1 7 26,998 28,324 -1 ,3 2 6 28,379 29,914 -1 ,5 3 5 29,603 32,387 -2 ,7 8 4 29,720 33,292 -3 ,5 7 2 29,476 36,456 - 6 ,9 8 0 4 M ilitary transactions, n et............................................................. 5 Investment income, n et................................................................ 6 Other service transactions, n e t................................................... -2 ,0 8 3 8,744 865 -8 7 6 5,954 2,042 366 9,808 2,743 -6 5 2,437 523 -3 9 2,280 839 235 2,667 781 235 2,424 598 82 3,170 556 7 Balance on goods and services3 .................................................. 2,160 16,164 3,699 1,569 1,545 889 -3 1 5 - 3 ,1 7 2 Remittances, pensions, and other transfers......................... U.S. Govt, grants (excluding military)................................. -1 ,7 1 4 -5 ,4 7 5 -1 ,7 1 9 -2 ,8 9 3 - 1 ,8 7 8 - 3 ,1 4 6 -4 8 5 -5 4 4 -4 5 9 -5 5 6 -4 6 1 -1 ,4 7 5 -4 7 3 -5 7 2 -5 1 8 -6 2 7 10 Balance on current account........................................................... 11 -5 ,0 2 8 11,552 -1 ,3 2 4 540 1,475 530 661 - 1 ,0 3 7 -3 ,7 8 5 - 1 ,3 6 0 325 -4 ,3 1 7 - 3 ,6 2 2 - 1 ,1 4 2 8 9 12 Change in U.S. Govt, assets, other than official reserve assets, net (increase, —) ...................................................... 13 Change in U.S. official reserve assets (increase, —) ................ 14 G o ld .............................................................................................. 15 SD R ’s ........................................................................................... Reserve position in I M F ......................................................... 16 17 Foreign currencies..................................................................... 365 -3 ,4 6 3 -4 ,2 1 3 -7 2 3 -9 4 4 -1 ,4 0 5 -1 ,4 3 4 -6 0 7 -2 ,5 3 0 -7 7 3 - 1 ,5 7 8 -4 0 7 -1 7 2 -1 ,2 6 5 3 -6 6 -4 6 6 -7 5 -7 8 -2 ,2 1 2 -2 4 0 -4 5 -2 3 7 -4 9 1 14 -7 9 8 -7 9 4 -1 8 -7 1 6 327 228 -5 8 -2 9 -4 6 1 718 -8 9 5 -3 8 8 -3 8 9 59 18 Change in U.S. private assets abroad (increase,—) ................ -2 5 ,9 6 0 -2 7 ,4 7 8 -3 6 ,2 1 6 - 9 ,2 5 4 - 7 ,2 5 7 -6 ,5 9 7 -1 3 ,1 0 8 1,734 19 20 21 Bank-reported claims................................................................. -1 9 ,5 1 6 Long-term ................................................................................ -1 ,1 8 3 Short-term ............................................................................... -1 8 ,3 3 3 - 1 3 ,5 3 2 - 2 ,3 5 7 -1 1 ,1 7 5 -2 0 ,9 0 4 -2 ,1 2 4 -1 8 ,7 8 0 - 3 ,6 3 0 -2 8 9 -3 ,3 4 1 -4 ,7 5 4 -3 7 7 -4 ,3 7 7 -3 ,3 7 2 -9 7 8 -2 ,3 9 4 -9 ,1 4 8 -4 8 0 -8 ,6 6 8 2,374 -5 4 1 3,815 22 23 24 25 26 Nonbank-reported claims.......................................................... Long-term ................................................................................ Short-term ............................................................................... U.S. purchase of foreign securities, n e t................................ U.S. direct investments abroad, n e t...................................... -3 ,2 2 1 -4 7 4 -2 ,7 4 7 - 1 ,8 5 4 - 1 ,3 6 8 - 1 ,4 4 7 -4 3 2 -1 ,0 1 5 - 6 ,2 3 6 -6 ,2 6 4 -1 ,9 8 6 10 -1 ,9 9 6 -8 ,7 3 0 -4 ,5 9 6 -7 3 8 -1 9 1 -5 4 7 -2 ,4 6 0 -2 ,4 2 7 - 1 ,0 0 4 145 -1 ,1 4 9 -1 ,3 5 7 -1 4 2 723 66 657 - 2 ,7 4 3 -1 ,2 0 5 -9 6 7 -1 0 -9 5 7 -2 ,1 7 1 -8 2 2 -3 5 9 38 -3 9 7 -6 4 9 -5 3 2 27 Change in foreign official assets in the United States (increase, - f ) ................................................................................ U.S. Treasury securities........................................................... 28 Other U.S. Govt, obligations.................................................. 29 Other U.S. Govt, liabilities4 ................................................... 30 Other U.S. liabilities reported by U.S. banks..................... 31 Other foreign official assets5 ................................................... 32 10,981 3,282 902 724 5,818 254 6,960 4,408 905 1,701 - 2 ,1 5 8 2,104 17,945 9,333 566 4,938 893 2,215 3,847 1,998 68 1,524 -4 1 2 669 4,051 2,166 316 743 135 691 3,070 1,260 66 1,819 -5 9 9 524 6,977 3,909 116 852 1,769 331 5,852 4,980 99 1,005 -4 0 5 173 22,631 7,376 16,575 3,009 3,333 5,131 5,102 - 2 ,7 8 5 16,017 9 16,008 1,844 -9 0 1,934 697 378 3,695 628 -2 8 0 908 240 334 -9 4 2,590 2,503 1,414 10,982 175 10,807 -6 1 6 -9 4 7 331 2,783 1,250 2,176 672 -1 0 5 111 161 -2 3 3 394 437 1,030 709 3,528 -1 6 3,544 -2 3 8 -1 6 2 -7 6 -5 9 2 131 504 1,774 75 1,699 -2 9 7 -2 4 1 -5 6 3,026 68 561 5,008 221 4,787 -2 4 2 -3 1 1 69 -8 8 21 403 - 5 ,2 4 9 96 -5 ,3 4 5 -4 3 3 -2 3 8 -1 9 5 1,191 879 827 -1 ,5 5 5 5,660 9,763 3,355 111 1,865 129 1,244 —2,622 3,303 1,780 799 470 -1 ,5 5 5 5,660 9,763 2,638 1,736 3,866 1,523 329 -1 ,4 3 4 10,257 -6 0 7 5,259 - 2 ,5 3 0 13,007 -7 7 3 2,323 -1 ,5 7 8 3,308 -4 0 1 1,251 228 6,125 -3 8 8 4,847 10,841 7,092 9,324 3,482 3,263 1,774 805 3,178 1,817 2,217 386 50 86 156 94 32 33 Change in foreign private assets in the United States (in 34 35 36 37 38 39 40 41 42 U.S. bank-reported liabilities................................................... Long-term ............................................................................... Long-term ............................................................................... Foreign private purchases o f U.S. Treasury securities, n e t. Foreign purchases o f other U.S. securities, n e t................. Foreign direct investments in the United States, n e t........ 43 A llo c a tio n s o f S D R ’s ................................................................................ 45 46 Owing to seasonal adjustm ents.............................................. Statistical discrepancy in recorded data before seasonal adjustm ent.......................................................................... M em o: Changes in official assets: U.S. official reserve assets (increase,—) ................................ 47 Foreign official assets in the U.S. (increase,+ ) .................. 48 49 Changes in OPEC official assets in the U.S. (part o f line 27 above)...................................................................................... 50 Transfers under military grant program s (excluded from lines 1, 4, and 9 above)........................................................ 1 Seasonal factors are no longer calculated for lines 13 through 50. 2 D ata are on an international accounts (IA) basis. Differs from the Census basis primarily because the IA basis includes imports into the U.S. Virgin Islands, and it excludes military exports, which are part of Line 4. 3 Differs from the definition o f “ net exports o f goods and services” in the national income and product (G N P) account. The G N P definition excludes certain military sales to Israel from exports and excludes U.S. Govt, interest payments from imports. 4 Primarily associated with military sales contracts and other transac tions arranged with or through foreign official agencies. 5 Consists of investments in U.S. corporate stocks and in debt securi ties of private corporations and state and local governments. N o t e . —D ata are from Bureau o f Economic Analysis, Survey o f Cur rent Business (U.S. Departm ent o f Commerce). Trade and Reserve Assets 3.11 A55 U.S. FOREIGN TRADE Millions o f dollars; monthly data are seasonally adjusted. 1977 1976 Item 1974 1975 1976 1 EXPORTS o f domestic and foreign merchandise excluding grant-aid shipm ents............................................ 97,908 107,130 114,807 2 G EN ERA L IM PO RTS including merchandise for immediate con sumption plus entries into bonded warehouses.......................................... 100,252 96,115 3 Trade balance.......................................... - 2 ,3 4 4 + 1 1 ,0 1 4 Nov. Dec. Jan. Feb. M ar. Apr. May 9,589 10,410 9,599 9,808 10,072 9,970 10,395 120,677 10,623 11,020 11,269 11,674 12,459 12,593 11,616 -5 ,8 7 0 - 1 ,0 3 4 -6 1 0 -1 ,6 7 0 -1 ,8 6 6 - 2 ,3 8 7 - 2 ,6 2 3 - 1 ,2 2 1 N o t e .— Bureau o f Census data reported on a free-alongside-ship (f.a.s.) value basis. Before 1974 imports were reported on a customs import value basis. For calendar year 1974 the f.a.s. import value was $100.3 billion, about 0.7 per cent less than the corresponding customs import value. The international-accounts-basis data shown in Table 3.10 adjust the Census basis data for reasons o f coverage and timing. On the export side, the largest adjustments are: (a) the addition o f exports to Canada not covered in Census statistics, and (b) the exclusion o f military 3.12 exports (which are combined with other military transactions and are reported separately in the “service account” ). On the import side, the largest single adjustment is the addition o f imports into the Virgin Islands (largely oil for a refinery on St. Croix), which are not included in Census statistics. S o u r c e .—U.S. Dept, o f Commerce, Bureau o f the Census, Summary o f U.S. Export and Im port Merchandise Trade (FT 900). U .S. RESERVE ASSETS Millions o f dollars, end o f period 1976 Type 1974 1973 1975 Dec. 1977 Jan. Feb. Mar. Apr. M ayp June? 4 19,156 1 T o tal......................................................... 3 14,378 15,883 16,226 18,747 19,087 19,122 19,120 18,868 19,195 2 Gold stock, including Exchange Stabilization F u n d 1.......................... 3 11,652 11,652 11,599 11,598 11,658 11,658 11,658 11,658 11,658 11,658 3 Special Drawing R ights2..................... 3 2,166 2,374 2,335 2,395 2,375 2,383 2,389 2,384 2,470 4 2,486 4 Reserve position in International M onetary F u n d ..................... ............ 3 552 1,852 2,212 4,434 4,682 4,819 4,812 4,720 4,972 4 4,920 5 Convertible foreign currencies........... 8 5 80 320 372 262 261 106 95 92 1 Gold held under earm ark at F.R. Banks for foreign and international accounts is not included in the gold stock o f the United States; see Table 3.24. 2 Includes allocations by the International M onetary Fund o f SD R ’s as follows: $867 million on Jan. 1, 1970; $717 million on Jan. 1, 1971; and $710 million on Jan. 1, 1972; plus net transactions in SD R ’s. 3 Change in par value o f U.S. dollar on Oct. 18, 1973 increased total reserve assets by $1,436 million, gold stock by $1,165 million, SD R ’s by $217 million, and reserve position in IM F by $54 million. 4 Beginning July 1974, the IM F adopted a technique for valuing the SD R based on a weighted average o f exchange rates for the currencies o f 16 member countries. The U.S. SD R holdings and reserve position in the IM F also are valued on this basis beginning July 1974. At valuation used prior to July 1974 (SDR1 = $1.20635) total U.S. reserve assets at end o f May amounted to $19,369; SD R holdings, $2,565, and reserve position in IM F, $5,051; figures for June are not yet available. A56 International Statistics □ July 1977 3.13 SELECTED U .S. LIABILITIES TO FOREIG NERS Millions o f dollars, end o f period 1974 H older, and type o f liability 1976 1977 1975 1973 Dec. D ec.9 Jan. Feb. M ar. A pr.p M ayp 1 T o tal......................................................... 92,490 119,240 119,164 126,552 151,329 147,913 149,008 151,903 157,006 161,224 2 Foreign countries.................................... 90,487 115,918 115,842 120,929 142,846 139,994 141,023 143,806 149,298 152,530 3 Official institutions1............................... 4 Short-term, reported by banks in the United States.2................... U.S. Treasury bonds and notes: 5 M arketable3................................... 6 N onm arketable4 ........................... 7 Other readily m arketable liabilities5............................... 66,861 76,801 76,823 80,712 91,900 93,046 93,858 96,782 99,748 101,267 43,923 53,057 53,079 49,530 53,528 54,515 54,796 56,040 57,486 58,258 5,701 15,564 5,059 16,339 5,059 16,339 6,671 19,976 11,788 20,648 12,017 20,622 12,725 20,495 13,772 21,106 14,694 20,976 15,676 20,950 1,673 2,346 2,346 4,535 5,936 5,892 5,842 5,864 6,592 6,383 17,694 30,314 30,106 29,516 37,377 33,510 33,088 32,858 35,342 36,274 5,932 8,803 8,913 10,701 13,569 13,438 14,077 14,166 14,208 14,989 5,502 8,305 8,415 10,000 12,592 12,441 13,056 13,008 12,878 13,693 430 498 498 701 977 997 1,021 1,158 1,330 1,296 2,003 3,322 3,322 5,623 8,483 7,919 7,985 8,097 7,708 8,694 1,955 3,171 3,171 5,292 5,450 4,625 3,918 4,278 5,282 6,559 48 151 131 331 3,033 3,294 4,067 3,819 2,426 2,135 Commercial banks ab ro ad : 8 Short-term, reported by banks in the United States2,6................. 9 Other foreigners...................................... 10 Short-term, reported by banks in the United States2 .................... 11 M arketable U.S. Treasury bonds and notes3,7............................... 12 Nonmonetary international and regional organization8................... 13 Short-term, reported by banks in the U nited States2 ........... 14 M arketable U.S. Treasury 1 Includes Bank for International Settlements. 2 Includes Treasury bills as shown in Table 3.15. 3 Derived by applying reported transactions to benchmark data. 4 Excludes notes issued to foreign official nonreserve agencies. 5 Includes long-term liabilities reported by banks in the United States and debt securities o f U.S. Federally sponsored agencies and U.S. cor porations. 6 Includes short-term liabilities payable in foreign currencies to com mercial banks abroad and to other foreigners. 7 Includes marketable U.S. Treasury bonds and notes held by com mercial banks abroad and other foreigners. 8 Principally the International Bank for Reconstruction and Develop ment and the Inter-American and Asian Development Banks. 3.14 9 D ata in the two columns shown for this date differ because o f changes in reporting coverage. Figures in the first column are comparable in cover age with those for the preceding date; figures in the second column are comparable with those shown for the following date. N o t e . —Based on Treasury Dept, data and on data reported to the Treasury Dept, by banks (including Federal Reserve banks) and brokers in the United States. D ata exclude the holdings o f dollars o f the Inter national M onetary Fund derived from payments of the U.S. subscription, and from the exchange transactions and other operations of the IM F. D ata also exclude U.S. Treasury letters of credit and nonnegotiable, noninterest-bearing special U.S. notes held by nonmonetary international and regional organizations. SELECTED U.S. LIABILITIES TO FO R E IG N OFFICIAL IN STITUTIO NS Millions o f dollars, end o f period 1974 A rea 1973 1975 D ec.3 1976 Dec. 1977 Jan. Feb. M ar. Apr.p May*3 1 T o tal......................................................... 66,861 76,801 >76,823 80,712 91,900 93,046 93,858 96,782 99,748 101,267 2 3 4 5 6 7 45,764 3,853 2,544 10,887 788 3,025 44,328 3,662 4,419 18,604 3,161 2,627 >•44,328 3,662 4,419 18,627 3,160 2,627 45,701 3,132 4,450 22,551 2,983 1,895 45,855 3,406 4,853 34,112 1,893 1,781 45,927 3,197 4,546 35,562 1,757 2,057 46,108 2,844 4,525 36,458 1,771 2,152 47,932 2,684 4,826 37,730 1,628 1,982 48,733 2,752 4,396 39,946 1,883 2,038 49,924 2,798 4,666 40,182 1,821 1,876 Western Europe 1............................. C anada................................................ Latin American republics............... Asia...................................................... A frica.................................................. Other countries 2............................... 1 Includes Bank for International Settlements. 2 Includes countries in Oceania and Eastern Europe, and Western European dependencies in Latin America. 3 See Note 9 to Table 3.13. N o t e .— D ata represent breakdown by area of line 3, Table 3.13. Bank-reported Data 3.15 SH O RT-TERM LIABILITIES TO F O R EIG N ER S By Holder and by Type o f Liability A57 Reported by Banks in the United States Millions o f dollars, end o f period 1974 Holder, and type o f liability 2 Payable in dollars................................................... D eposits: Jan. Dec. D ec.8 1 All foreigners, excluding the International M onetary F u n d ................................................... 1977 1976 1975 1973 M ar. Feb. Apr.*3 M ayp 104,858 106,184 110,988 114,784 9AM l 94,771 94,338 108,947 105,091 68,477 94,081 94,004 93,780 108,223 104,359 104,043 105,323 110,179 114,131 14,068 10,106 35,662 34,246 14,051 9,932 35,662 34,359 13,564 10,250 37,414 32,552 16,803 11,297 40,744 39,380 15,314 11,395 41,275 36,374 16,098 11,205 42,669 34,071 15,101 11,239 43,498 35,485 15,382 11,277 44,661 38,860 16,741 11,859 45,463 40,068 724 732 815 861 809 653 69,074 3 4 5 6 U.S. Treasury bills and certificates2.............. Other short-term liabilities3 ............................ 11,310 6,882 31,886 18,399 7 Payable in foreign currencies................................ 597 766 766 558 1,955 3,171 3,171 5,293 5,450 4,625 3,918 4,278 5,282 6,559 1,955 3,171 3,171 5,284 5,445 4,621 3,912 4,275 5,279 6,553 101 83 296 1,474 139 111 497 2,424 139 111 497 2,424 139 148 2,554 2,443 290 205 2,701 2,250 166 230 2,890 1,335 216 237 2,779 680 203 236 2,743 1,093 119 202 2,849 2,109 172 166 2,977 3,237 8 5 4 6 3 3 6 15 Official institutions, banks, and other foreigners.. 67,119 91,676 91,600 89,046 103,497 100,466 100,940 101,906 105,706 108,225 66,522 90,910 90,834 88,497 102,778 99,738 100,131 11,209 6,799 31,590 16,925 13,928 9,995 35,165 31,822 13,912 9,796 35,165 31,961 13,426 10,102 34,860 30,109 15,148 11,166 38,386 35,039 8 Nonmonetary international and regional 9 Deposits: 10 11 12 13 T im e1............................................................... U.S. Treasury bills and certificates................ Other short-term liabilities5 ............................ 14 16 17 18 19 20 Payable in dollars................................................... D eposits: D em an d ........................................................... T im e1................................................................ U.S. Treasury bills and certificates2 .............. Other short-term liabilities3 ............................ 21 16,513 11,092 38,042 37,130 15,882 10,968 39,889 33,391 101,048 104,901 14,898 11,003 40,755 34,392 15,262 11,076 41,813 36,750 107,578 16,569 11,693 42,485 36,831 Payable in foreign currencies................................ 597 766 766 549 719 728 809 858 805 647 22 Official institutions6 ................................................... 43,923 53,057 53,079 49,530 53,528 54,515 54,796 56,040 57,486 58,258 23 Payable in dollars................................................... D eposits: D em an d ........................................................... T im e1............................................................... U.S. Treasury bills and certificates2.............. Other short-term liabilities5 ............................ 43,795 52,930 52,952 49,530 53,528 54,515 54,796 56,040 57,486 58,258 24 25 26 27 2,125 3,911 31,511 6,248 2,951 4,257 34,656 11,066 2,951 4,167 34,656 11,178 2,644 3,423 34,199 9,264 3,394 2,289 37,725 10,120 2,931 2,456 38,081 11,047 2,404 2,376 39,559 10,457 2,629 2,269 40,399 10,744 2,747 2,335 41,508 10,896 2,671 2,449 42,197 10,942 28 Pnvahle in fnreien c u rren cie s...................................... 127 127 127 38,619 38,520 39,515 49,969 45,951 46,144 45,866 48,221 49,967 22,727 17,224 37,980 29,676 37,881 29,467 38,966 28,966 49,250 36,658 45,223 32,788 45,335 32,279 45,008 32,000 47,415 34,537 49,320 35,627 6,941 529 11 9,743 8,248 1,942 232 19,254 8,231 1,885 232 19,119 7,534 1,856 335 19,241 9,104 2,279 119 25,156 8,475 2,074 122 22,111 9,387 1,779 102 21,011 8,401 1,739 108 21,752 8,712 1,670 104 24,051 9,787 1,748 108 23,984 29 Banks and other foreigners........................................ 30 31 32 33 34 35 B anks7 .................................................................. D eposits: D e m an d ....................................................... T im e1........................................................... U.S. Treasury bills and certificates............ O ther short-term liabilities3........................ 23,196 Other foreigners................................................. D eposits: D em an d ....................................................... Tim e1........................................................... U.S. Treasury bills and certificates............ Other short-term liabilities5 ........................ 5,502 8,304 8,414 10,000 12,592 12,441 13,056 13,008 12,878 13,693 37 38 39 40 2,143 2,359 68 933 2,729 3,796 277 1,502 2,730 3,744 277 1,664 3,248 4,823 325 1,604 4,015 6,524 198 1,854 3,741 6,636 183 1,876 4,091 6,813 229 1,924 3,868 6,996 248 1,896 3,803 7,070 201 1,804 4,111 7,496 180 1,906 41 Payable in foreign currencies................................ 469 639 639 549 719 728 809 858 805 647 36 1 Excludes negotiable time certificates o f deposit, which are included in “ Other short-term liabilities.” 2 Includes nonm arketable certificates o f indebtedness and Treasury bills issued to official institutions o f foreign countries. 3 Includes liabilities o f U.S. banks to their foreign branches, liabilities o f U.S. agencies and branches o f foreign banks to their head offices and foreign branches o f their head offices, bankers acceptances, commercial paper, and negotiable time certificates o f deposit. 4 Principally the International Bank for Reconstruction and Develop ment, and the Inter-American and Asian Development Banks. 5 Principally bankers acceptances, commercial paper, and negotiable time certificates o f deposit. 6 Foreign central banks and foreign central governments and their agencies, and Bank for International Settlements. 7 Excludes central banks, which are included in “ Official institutions.” 8 D ata in the two columns shown for this date differ because o f changes in reporting coverage. Figures in the first column are comparable with those for the preceding date; figures in the second column are comparable with those shown for the following date. N o t e . — “ Short-term obligations” are those payable on demand, or having an original maturity o f 1 year or less. A58 3.16 International Statistics □ July 1977 SH O RT-TERM LIABILITIES TO FO R EIG NERS By Country Reported by Banks in the United States Millions o f dollars, end o f period 1974 A rea and country 1976 1973 Dec. 7 1 69,074 1977 1975 Dec. Jan. Feb. M ar Apr.* M ayp 94,847 94,771 94,338 108,947 105,091 67,119 91,676 91,600 89,046 103,497 100,466 100,940 101,906 105,706 108,225 3 Europe......................................................................... 40,742 4 A u stria.................................................................. 161 Belgium-Luxembourg........................................ 1,483 5 659 6 D en m ark .............................................................. 165 7 Finland................................................................. 3,483 8 9 G erm any............................................................... 13,227 389 10 Greece................................................................... 11 Italy....................................................................... 1,404 12 N etherlands......................................................... 2,886 13 965 534 14 P ortugal................................................................ 305 15 1,885 16 Sw eden................................................................. 3,377 17 98 18 19 United K ingdom ................................................ 6,148 20 Yugoslavia........................................................... 86 3,352 21 Other Western E urope1.................................... 22 22 U .S.S.R................................................................. Other Eastern E u ro p e....................................... 110 23 48,667 607 2,506 369 266 4,287 9,420 248 2,617 3,234 1,040 310 382 1,138 9,986 152 7,559 183 4,073 82 206 48,813 607 2,506 369 266 4,287 9,429 248 2,577 3,234 1,040 310 382 1,138 10,139 152 7,584 183 4,073 82 206 43,988 754 2,898 332 391 7,733 4,357 284 1,072 3,411 996 195 426 2,286 8,514 118 6,886 126 2,970 40 200 2 Foreign countries......................................................... 46,923 348 2,268 363 419 4,875 5,965 403 3,206 3,007 785 239 565 1,693 9,453 166 9,999 188 2,672 51 255 43,765 373 2,376 419 389 4,701 5,304 421 2,858 2,832 566 172 492 1,613 9,571 85 8,996 113 2,263 47 172 104,858 106,183 110,988 114,783 43,584 401 2,411 419 367 4,590 5,495 346 2,703 2,817 793 228 546 1,593 9,619 82 8,711 121 2,136 45 162 44,363 499 2,566 569 312 4,817 4,677 302 2,361 3,181 746 209 555 1,717 8,927 88 10,368 96 2,144 50 178 45,040 509 2,607 809 306 4,748 4,490 350 2,625 2,924 906 184 501 2,047 8,798 81 10,695 111 2,132 41 176 48,246 466 2,640 974 242 4,920 4,825 409 3,509 3,111 999 238 586 2,431 8,512 66 11,910 102 2,056 66 183 24 Canada...................................................................... 3,627 3,517 3,520 3,076 4,784 4,519 4,815 4,324 4,823 4,869 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 Latin America......................................................... A rgentina............................................................. Baham as............................................................... B razil.................................................................... C hile..................................................................... C olom bia............................................................. 7,664 924 852 860 158 247 7 1,296 282 135 120 1,468 884 71 359 12,038 886 1,448 1,034 276 305 7 1,770 488 272 147 3,413 1,316 158 519 11,754 886 1,054 1,034 276 305 7 1,770 510 272 165 3,413 1,316 158 589 14,942 1,147 1,827 1,227 317 417 6 2,066 1,099 244 172 3,289 1,494 129 1,507 19,010 1,538 2,789 1,432 335 1,017 6 2,848 1,140 257 245 3,060 1,740 140 2,139 17,847 1,648 1,979 1,292 325 1,090 6 2,710 909 244 250 2,986 2,033 151 2,223 18,529 1,820 2,439 1,272 302 1,152 6 2,782 1,002 228 239 2,909 2,226 157 1,995 19,089 1,890 2,184 1,108 403 1,201 6 2,747 1,001 246 241 2,927 2,429 162 2,545 20,437 1,845 4,001 1,225 329 1,253 6 2,699 1,008 255 263 2,440 2,284 173 2,656 19,978 1,971 2,744 1,175 430 1,171 8 2,764 984 219 251 2,991 2,270 215 2,785 40 41 42 43 44 45 46 47 48 49 50 51 52 Asia............................................................................ China, People’s Republic o f (M ain lan d ).. . . China, Republic o f (T aiw an).......................... H ong K o n g ......................................................... In d ia ...................................................................... Indonesia............................................................. Israel..................................................................... J a p a n .................................................................... K o re a .................................................................... Philippines........................................................... Thailand............................................................... Middle East oil-exporting countries3............ O ther4................................................................... 10,839 38 757 372 85 133 327 6,967 195 515 247 21,073 50 818 530 261 1,221 386 10,897 384 747 333 4,633 813 21,130 50 818 530 261 1,221 389 10,931 384 747 333 4,623 844 21,539 123 1,025 623 126 369 386 10,218 390 698 252 6,461 867 28,461 47 985 892 648 340 385 14,380 437 627 275 8,073 1,373 29,789 47 1,058 941 510 695 430 14,481 448 602 301 9,029 1,245 29,258 47 1,158 1,039 559 546 547 13,358 483 554 313 9,276 1,377 29,614 52 1,067 1,018 538 480 509 13,271 382 652 312 9,987 1,346 30,457 52 1,138 993 648 887 436 13,071 430 624 308 10,399 1,471 30,216 55 1,492 950 722 531 503 12,481 472 634 275 10,437 1,664 53 54 55 56 57 58 59 A frica........................................................................ E g y p t.................................................................... M orocco............................................................... South A frica........................................................ Z aire..................................................................... Oil-exporting countries5 ................................... O ther4 ................................................................... 1,056 35 11 114 87 808 3,551 103 38 130 84 2,814 383 3,551 103 38 130 84 2,814 383 3,373 343 68 169 63 2,239 491 2,300 333 88 143 35 1,116 585 2,207 209 97 211 48 1,033 609 2,406 244 105 155 41 1,132 728 2,285 251 94 136 39 964 802 2,589 245 91 176 28 1,151 898 2,753 360 93 184 30 1,205 881 60 61 62 Other countries........................................................ A ustralia.............................................................. All o th er............................................................... 3,190 3,131 59 2,831 2,742 89 2,831 2,742 89 2,128 2,014 114 2,019 1,911 108 2,339 2,224 116 2,348 2,231 118 2,231 2,101 130 2,361 2,223 138 2,162 2,026 135 63 Nonmonetary international and regional organizations............................................................ 1,955 3,171 3,171 5,293 5,450 4,625 3,918 4,278 5,282 6,559 64 65 66 1,627 272 57 2,900 202 69 2,900 202 69 5,064 187 5,091 136 223 4,275 160 190 3,599 132 187 3,960 131 187 4,995 105 182 6,229 119 211 Panam a................................................................. P e ru ....................................................................... U ruguay............................................................... Venezuela............................................................. Other Latin American republics..................... O ther Latin A m erica........................................ International............................................................ Latin American regional...................................... Other regional6....................................................... For notes see bottom o f p. A59. 1,202 1 42 Bank-reported Data 3.17 SH O RT-TERM LIABILITIES TO F O R EIG N ER S Supplemental “ Other” Countries 1 A59 Reported by Banks in the United States Millions o f dollars, end o f period 1974 1976 1975 1974 Dec. Apr. Other Western Europe: C yprus.......................... Iceland.......................... Ireland, Republic o f .. 17 20 29 4 5 6 7 8 9 Other Eastern Europe: B ulgaria........................................ Czechoslovakia........................... G erman Dem ocratic Republic. H ungary........................................ P o la n d ........................................... R um an ia....................................... 13 11 18 11 42 14 19 32 17 13 66 44 69 127 46 93 120 214 157 144 255 34 92 62 125 38 110 124 169 120 171 260 38 99 41 133 43 107 31 131 Other Latin American republics: B olivia....................................... Costa R ica................................ D ominican R epublic............. E cuad o r.................................... El Salvador.............................. G uatem ala................................ H aiti.......................................... H onduras.................................. Jam aica..................................... N icaragua................................. P araguay.................................. Surinam 2 .................................. Trinidad and Tobago............ 23 24 Other Latin America: B erm uda.................. . British West In d ies., 96 118 128 122 129 219 35 88 116 449 Apr. Dec. 1 2 3 10 11 12 13 14 15 16 17 18 19 20 21 22 Dec, 69 40 1976 34 21 19 77 19 117 134 170 150 212 368 48 137 59 158 50 13 44 133 141 275 319 178 397 47 137 35 119 49 167 197 170 177 100 627 1,311 2,284 1,874 LO NG -TERM LIABILITIES TO FO R EIG N ER S Dec. Apr. Dec. Apr. 57 44 34 3 23 25 26 27 28 29 30 31 32 33 34 35 36 37 Other Asia: A fghanistan................... Bangladesh.................... B urm a............................ C am bodia...................... J o rd a n ............................ L a o s................................ Lebanon......................... M alaysia........................ N e p a l.............................. Pakistan......................... Singapore....................... Sri Lanka (Ceylon)___ V ietnam ......................... 18 21 65 4 22 3 126 63 25 91 245 14 126 19 50 49 4 30 5 180 92 22 118 215 13 70 41 54 31 4 39 2 117 77 28 74 256 13 62 132 130 34 92 344 10 66 38 39 40 41 42 43 44 45 46 47 48 Other Africa: Ethiopia (incl. Eritrea) G hana............................. Ivory C o a st................... K enya............................. L iberia............................ Southern R hodesia.. . . S udan............................. T anzania........................ T unisia........................... U ganda........................... Z am bia........................... 95 18 7 31 39 2 4 11 19 13 22 76 13 11 32 33 3 14 21 23 38 18 60 23 62 19 53 72 45 17 39 63 12 30 29 22 78 49 All Other: New Zealand................. 47 36 42 Dec. 57 "i3 4 37 1 140 396 33 189 280 23 66 2 1 41 27 10 46 77 1 22 1 17 20 34 50 14 20 43 48 45 2 Surinam included with Netherlands Antilles until January 1976. 1 Represents a partial breakdown of the amounts shown in the “ Other” categories on Table 3.16. 3.18 1975 Area and country Area and country Reported by Banks in the United States Millions o f dollars, end o f period 1976 Holder, and area or country 1 1974 1973 1,462 1,285 1977 1975 1,812 Nov. Dec. Jan. Feb. M ar.p Apr.*1 M ay2* 2,324 2,408 2,352 2,297 2,295 2,510 2,283 2 Nonmonetary international and regional organizations............................................................ 761 822 415 313 264 263 248 262 255 262 3 Foreign countries......................................................... 4 Official institutions, including central banks. .. 5 Banks, excluding central b a n k s.......................... 6 Other foreigners...................................................... 700 310 291 100 464 124 261 79 1,397 931 r366 100 2,011 1,311 526 173 2,144 1,352 588 204 2,090 1,262 604 224 2,049 1,192 627 230 2,033 1,163 648 222 2,256 1,358 631 267 2,022 1,042 630 350 Area or co u n try : E u ro p e ...................................................................... 7 8 9 United K ingdom ................................................ 470 159 66 226 146 59 330 214 66 517 309 127 537 313 134 555 313 144 580 296 122 571 354 103 583 304 131 594 297 148 10 11 C anad a...................................................................... Latin A m erica......................................................... 8 132 19 115 23 140 26 152 29 230 31 244 29 267 37 263 35 264 34 254 12 13 Middle East oil-exporting countries1................. O ther A sia2 ............................................................. 82 94 7 894 8 1,239 75 1,251 96 1,186 67 1,104 67 1,091 67 1,304 68 1,069 68 14 15 African oil-exporting countries3 ......................... O ther A frica4........................... ............................... * 1 * 1 * * 1 * 1 * 2 * 2 * 2 * 2 16 All other countries................................................. 7 * * 1 1 4 1 1 1 1 4 Includes African oil-exporting countries until December 1974. 1 Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Q atar, Saudi Arabia, and United Arab Emirates (Trucial States). 2 Includes M iddle East oil-exporting countries until December 1974. 3 Comprises Algeria, Gabon, Libya, and Nigeria. o f more than 1 year. NOTES TO TABLE 3.16: 1 Includes Bank for International Settlements. 2 Surinam included with Netherlands Antilles until January 1976. 3 Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab Emirates (Trucial States). 4 Includes oil-exporting countries until December 1974. 5 Comprises Algeria, Gabon, Libya, and Nigeria. 6 Asian, African, and European regional organizations, except BIS, which is included in “ Other W estern Europe.” 7 D ata in the two columns shown for this date differ because o f changes in reporting coverage. Figures in the first column are comparable with those shown for the preceding date; figures in the second column are comparable with those shown for the following date. N o t e . — Long-term obligations are those having an original maturity A60 International Statistics □ July 1977 3.19 SHORT-TERM CLAIMS ON FOREIGNERS Reported by Banks in the United States By Country Millions o f dollars, end o f period 1976 Area and country 1973 1974 1977 1975 Nov. Dec. Jan. Feb. Mar. A pr.p May? 1 20,723 39,056 50,231 63,313 69,126 63,719 63,447 65,187 65,865 68,018 2 Foreign countries......................................................... 20,723 39,055 50,229 63,307 69,121 63,712 63,442 65,181 65,860 68,014 3,970 11 147 48 108 621 311 35 316 133 72 23 222 153 176 10 1,459 10 25 46 44 6,255 21 384 46 122 673 589 64 345 348 119 20 196 180 335 15 2,580 22 22 46 131 8,987 15 352 49 128 1,471 436 49 370 300 71 16 249 167 237 86 4,718 38 27 103 108 10,790 54 501 129 136 1,098 577 76 877 240 85 53 304 93 511 140 5,591 38 53 103 132 12,162 44 662 85 141 1,448 563 79 929 304 98 65 429 177 482 173 6,158 45 52 99 130 10,486 41 554 72 137 1,246 511 57 875 246 124 80 362 112 539 199 4,960 60 53 82 178 10,764 42 611 64 131 1,372 667 85 802 510 127 90 375 85 530 207 4,671 64 60 95 175 10,887 58 570 67 141 1,343 535 54 870 252 133 98 291 74 496 274 5,218 37 56 104 218 12,033 63 470 84 126 1,511 550 70 946 385 142 90 363 116 496 291 5,939 31 51 108 203 12,845 43 589 88 130 1,539 502 65 964 362 148 100 301 79 471 322 6,756 54 40 82 209 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 Europe....................................................................... A u stria.................................................................. Belgium-Luxembourg........................................ D en m ark .............................................................. Finland................................................................. France................................................................... G erm any............................................................... Greece................................................................... Italy....................................................................... N etherlands......................................................... N orw ay................................................................. P o rtugal............................................................... Spain..................................................................... Sweden................................................................. Switzerland.......................................................... T urkey.................................................................. United K ingdom ................................................ Yugoslavia........................................................... Other Western Europe...................................... U.S.S.R................................................................. Other Eastern Europe....................................... 24 Canada...................................................................... 1,955 2,776 2,817 3,136 3,100 2,944 3,512 3,737 3,701 3,541 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 Latin America......................................................... A rgentina............................................................. Bahamas............................................................... Brazil..................................................................... C hile..................................................................... C olom bia............................................................. C u b a..................................................................... M exico................................................................. Panam a................................................................. Peru....................................................................... Uruguay............................................................... Venezuela............................................................. Other Latin American republics..................... Netherlands A ntilles1........................................ Other Latin A m erica........................................ 5,900 499 883 900 151 397 12 1,373 274 178 55 518 493 13 154 12,377 720 3,405 1,418 290 713 14 1,972 505 518 63 704 852 62 1,142 20,532 1,203 7,570 2,221 360 689 13 2,802 1,052 583 51 1,086 967 49 1,885 31,010 858 14,021 3,254 358 523 14 3,290 781 630 35 1,512 1,069 43 4,623 34,060 962 15,340 3,378 396 575 13 3,419 1,021 690 38 1,552 1,140 40 5,495 31,459 937 13,872 3,456 370 593 13 3,366 760 737 41 1,296 1,127 45 4,848 31,487 867 14,102 3,145 379 598 13 3,332 869 739 39 1,260 1,120 41 4,985 32,057 914 15,431 2,951 357 544 13 3,295 849 733 39 1,241 1,132 41 4,518 31,781 873 14,148 3,186 420 565 13 3,302 753 756 35 1,197 1,079 54 5,401 32,539 885 15,115 3,058 361 505 13 3,213 835 738 36 1,359 1,175 36 5,208 40 41 42 43 44 45 46 47 48 49 50 51 52 Asia.......................................... ................................. China, People’s Republic o f (M ainland). . . China, Republic of (Taiwan)........................... Hong K o n g ......................................................... In d ia ..................................................................... Indonesia............................................................. Israel..................................................................... Japan..................................................................... K o re a ................................................................... Philippines........................................................... Thailand............................................................... Middle East oil-exporting countries2............ O ther3................................................................... 8,224 31 140 147 16 88 155 6,398 403 181 273 16,226 4 500 223 14 157 255 12,518 955 372 458 330 441 16,057 22 736 258 21 102 491 10,776 1,561 384 499 524 684 16,365 3 1,099 267 48 120 330 10,428 1,577 495 414 1,082 503 17,765 3 987 361 41 76 554 10,992 1,722 559 422 1,312 735 16,686 4 1,028 229 28 54 344 10,579 1,710 592 421 981 715 15,471 30 1,089 265 23 55 337 9,472 1,574 479 446 1,050 651 16,118 5 1,124 317 32 53 328 9,486 1,736 463 491 1,389 693 15,760 3 1,099 337 24 41 287 9,397 1,807 490 468 1,170 638 16,571 18 1,212 296 34 39 280 9,581 1,909 488 519 1 469 ’724 53 54 55 56 57 58 59 A frica. ...................................................................... Egypt..................................................................... M orocco............................................................... South Africa........................................................ Z aire..................................................................... Oil-exporting countries4................................... O ther3................................................................... 388 35 5 129 61 158 855 111 18 329 98 115 185 1,228 101 9 545 34 231 308 1,394 109 14 748 25 213 284 1,486 132 13 763 29 256 293 1,519 151 19 798 16 238 298 1,478 126 13 797 11 249 282 1,603 149 26 792 10 343 283 1,572 146 35 783 8 291 309 1,556 149 34 778 7 243 344 60 61 62 Other countries........................................................ A ustralia............................................................... All other............................................................... 286 243 43 565 466 99 609 535 73 612 502 110 549 450 99 618 512 105 729 604 125 779 663 116 1,013 894 119 963 846 117 63 Nonmonetary international and regional organizations........................................................... 1 1 6 5 7 5 6 5 4 392 * 1 Includes Surinam until January 1976. 2 Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and United A rab Emirates (Trucial States). 3 Includes oil-exporting countries until December 1974. 4 Comprises Algeria, Gabon, Libya, and Nigeria, Bank-reported Data 3.20 SH O RT-TER M CLA IM S O N FO R EIG N ER S By Type o f Claim A61 Reported by Banks in the United States Millions o f dollars, end o f period Type 1973 1975 Nov. 1 T o tal.............................................................................. 2 Payable in dollars....................................................... 3 4 5 6 7 8 9 Loans, to ta l............................................................. Official institutions, including central ban k s. Banks, excluding central banks...................... All other, including nonmonetary interna tional and regional organizations............... 1977 1976 1974 Dec. Jan. Feb. Mar. Apr.* May* 39,056 50,231 63,313 69,126 63,719 63,447 65,187 65,865 68,018 37,859 48,683 61,508 67,481 61,987 61,488 63,290 64,180 66,258 7,660 284 4,538 11,287 381 7,332 13,194 613 7,665 16,141 1,267 9,628 18,300 1,451 11,076 16,072 1,251 9,334 16,234 935 9,764 15,756 784 9,730 16,484 741 10,638 16,625 966 10,614 2,838 3,574 4,916 5,245 5,773 5,487 5,535 5,241 5,105 5,045 5,846 12,367 30,968 5,833 12,018 28,064 5,868 12,009 27,378 6,190 12,793 28,550 6,316 12,976 28,403 6,292 13,015 30,324 20,723 20,061 Collections oustanding.......................................... Acceptances made for accounts o f foreigners... Other claim s1.......................................................... 4,307 4,160 3,935 5,637 11,237 9,694 5,467 11,147 19,054 5,628 11,422 28,316 10 Payable in foreign currencies.................................... 662 1,196 1,368 1,805 1,645 1,732 1,959 1,897 1,686 1,760 11 12 428 669 656 1,084 1,063 1,126 1,091 1,100 863 824 119 115 289 238 340 372 89 632 89 493 145 460 272 596 323 474 332 490 377 559 13 Deposits with foreigners....................................... Foreign government securities, commercial and finance p a p e r.............................................. Other claims............................................................ 1 Includes claims o f U.S. banks on their foreign branches and claims made to, and acceptances made for, foreigners; drafts drawn against o f U.S. agencies and branches o f foreign banks on their head offices and foreigners, where collection is being made by banks and bankers for foreign branches o f their head offices. their own account or for account o f their customers in the United States; and foreign currency balances held abroad by banks and bankers and N o t e . — Short-term claims are principally the following items payable their customers in the United States. Excludes foreign currencies held on demand or with a contractual maturity o f not more than 1 year: loans by U.S. monetary authorities. 3.21 LO NG -TERM CLAIM S O N FO R EIG N ER S Reported by Banks in the United States Millions of dollars, end of period Type, and area or country 1973 1974 1977 1976 1975 Nov. Dec. Jan. Feb. Mar. Apr.* May* 9,536 11,596 11,660 11,684 11,829 12,201 12,481 12,288 1 T o tal.............................................................................. 5,996 7,179 By type: 2 Payable in dollars................................................... 5,924 7,099 9,419 11,449 11,512 11,534 11,618 12,012 12,280 12,085 9,846 1,367 2,170 9,935 1,422 2,212 9,953 1,404 2,178 10,131 1,535 2,218 10,411 1,625 2,192 10,557 1,647 2,215 10,393 1,641 2 , 111 3 4 5 6 Loans, total......................................................... Official institutions, including central banks Banks, excluding central banks.................. All other, including nonmonetary interna tional and regional organizations.......... 5,446 1,156 591 6,490 1,324 929 8,316 1,351 1,567 3,698 4,237 5,399 6,310 6,301 6,371 6,377 6,591 6,695 6,481 7 Other long-term claim s......................................... 478 609 1,103 1,603 1,577 1,581 1,487 1,604 1,723 1,693 8 Payable in foreign currencies................................ 72 80 116 147 148 150 211 190 201 202 By area or country: 9 E urope...................................................................... 10 C anada ..................................................................... 11 Latin Am erica......................................................... 1,271 490 2,116 1,908 501 2,614 2,704 555 3,468 3,283 590 4,694 3,232 586 4,806 3,309 518 4,878 3,362 536 4,906 3,616 566 4,908 3,689 558 4,990 3,650 499 5,036 1,619 258 384 977 1,795 296 220 1,279 1,881 364 141 1,376 1,882 387 146 1,349 1,835 383 117 1,334 1,841 363 123 1,356 1,896 417 152 1,327 1,964 416 181 1,368 1,884 420 149 1,316 12 13 14 15 Asia............................................................................ Japan..................................................................... Middle East oil-exporting countries1............ Other Asia2 ......................................................... 1,582 251 16 17 18 A frica........................................................................ Oil-exporting countries3................................... O ther4................................................................... 355 355 366 62 305 747 151 596 888 269 619 883 264 619 856 201 655 876 206 670 890 211 678 953 228 725 898 213 685 19 All other countries 5............................................... 181 171 267 261 269 288 308 327 327 321 1,331 1 Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab Emirates (Trucial States). 2 Includes M iddle East oil-exporting countries until December 1974. 3 Comprises Algeria, Gabon, Libya, and Nigeria. 4 Includes oil-exporting countries until December 1974. 5 Includes nonmonetary international and regional organizations. A 62 3.22 International Statistics □ July 1977 F O R E IG N B R A N C H ES OF U .S. BA N K S Balance Sheet Data Millions o f dollars, end of period 1976 Asset account 1973 1974 1977 1975 Oct. Nov. Dec. Jan. J F e b .' Mar. Apr.P All foreign countries 121,866 151,905 176,493 206,599 207,734 219,432 212,415 215,914 223,222 223,044 2 3 4 Claims on United States................... Parent b a n k .................................... O ther................................................ 5,091 1,886 3,205 6,900 4,464 2,435 6,743 3,665 3,078 9,968 6,863 3,105 7,639 4,359 3,281 7,999 4,435 3,564 6,563 2,999 3,563 7,062 3,759 3,303 7,252 3,658 3,594 8,826 5,462 3,364 5 6 7 8 9 Claims on foreigners......................... Other branches o f parent bank Other banks.................................... Official institutions....................... N onbank foreigners..................... 111,974 19,177 56,368 2,693 33,736 138,712 27,559 60,283 4,077 46,793 163,391 34,508 69,206 5,792 53,886 189,502 41,825 76,303 9,205 62,169 192,886 42,747 77,401 9,550 63,188 204,390 45,894 83,765 10,608 64,123 198,241 46,086 77,415 10,836 63,905 201,416 41,166 77,923 11,188 64,538 208,551 48,645 81,719 11,766 66,421 207,244 47,826 79,713 12,356 67,350 10 Other assets........................................ 4,802 6,294 6,359 7,129 7,208 7,043 7,612 7,436 7,420 6,973 11 Total payable in U.S. dollars.............. 79,445 105,969 132,901 156,146 156,597 167,717 163,026 165,461 172,352 171,956 1 Total, all currencies............................... 12 13 14 Claims on United States................... Parent b a n k .................................... O ther................................................ 4,599 1,848 2,751 6,603 4,428 2,175 6,408 3,628 2,780 9,623 6,818 2,805 7,297 4,296 3,001 7,705 4,375 3,330 6,283 2,960 3,323 6,774 3,714 3,061 6,853 3,611 3,242 8,453 5,419 3,034 15 16 17 18 19 Claims on foreigners.......................... Other branches of parent b a n k .. Other banks.................................... Official institutions....................... N onbank foreigners..................... 73,018 12,799 39,527 1,777 18,915 96,209 19,688 45,067 3,289 28,164 123,496 28,478 55,319 4,864 34,835 143,169 34,064 59,380 7,885 41,840 145,986 34,399 60,352 8,298 42,936 156,808 37,848 66,331 9,017 43,611 152,831 38,362 60,816 9,468 44,185 155,063 39,822 60,909 9,853 44,479 161,973 40,922 64,642 10,469 45,940 160,200 39,960 62,951 11,056 46,233 20 Other assets........................... ............ 1,828 3,157 2,997 3,354 3,315 3,204 3,912 3,623 3,526 3,303 United Kingdom 21 Total, all currencies............................... 61,732 69,804 74,883 76,854 77,249 81,466 76,482 78,708 81,268 80,150 22 23 24 Claims on United States................... Parent b a n k .................................... O ther................................................ 1,789 738 1,051 3,248 2, A ll 116 2,392 1,449 943 3,256 2,413 843 3,426 2,538 888 3,354 2,376 978 2,262 1,377 885 1,772 1,011 761 2,311 1,302 1,009 2,541 1,698 843 25 26 27 28 29 Claims o f foreigners.......................... Other branches o f parent b a n k .. Other banks.................................... Official institutions....................... N onbank foreigners..................... 57,761 8,773 34,442 735 13,811 64,111 12,724 32,701 788 17,898 70,331 17,557 35,904 881 15,990 71,162 18,358 35,336 1,211 16,257 71,477 17,949 35,846 1,168 16,514 75,859 19,753 38,089 1,274 16,743 71,995 19,483 34,827 1,377 16,309 74,713 21,450 35,517 1,615 16,130 76,865 21,115 37,074 1,606 17,070 75,559 21,733 35,559 1,611 16,656 30 Other assets........................................ 31 2,183 2,445 2,159 2,436 2,345 2,253 2,225 2,224 2,092 2,050 40,323 49,211 57,361 57,161 57,699 61,587 57,758 60,038 62,353 61,179 32 33 34 Claims on United States................... Parent b a n k .................................... O ther................................................ 1,642 730 912 3,146 2,468 678 2,273 1,445 828 3,124 2,406 719 3,313 2,523 789 3,275 2,374 902 2,185 1,372 813 1,684 1,008 676 2,173 1,297 876 2,430 1,690 740 35 36 37 38 39 Claims on foreigners.......................... Other branches o f parent b a n k .. Other banks.................................... Official institutions....................... N onbank foreigners..................... 37,817 6,509 23,389 510 7,409 44,694 10,265 23,716 610 10,102 54,121 15,645 28,224 648 9,604 53,112 15,829 26,421 912 9,950 53,541 15,405 27,008 817 10,311 57,488 17,249 28,983 846 10,410 54,735 17,183 26,184 1,110 10,258 57,492 19,114 26,767 1,340 10,271 59,342 18,712 28,352 1,310 10,968 57,894 19,256 26,917 1,297 10,424 40 Other assets........................................ 865 1,372 967 925 845 824 838 862 839 855 Bahamas and Caymans 41 Total, all currencies............................... 23,771 31,733 45,203 63,578 61,886 66,774 66,479 66,134 69,562 70,980 42 43 44 Claims on United States................... Parent b an k .................................... O ther................................................ 2,210 317 1,893 2,464 1,081 1,383 3,229 1,477 1,752 5,492 3,519 1,973 2,970 845 2,126 3,506 1,141 2,365 3,192 811 2,381 3,722 1,418 2,303 3,395 1,073 2,321 4,993 2,734 2,259 45 46 47 48 49 Claims on foreigners.......................... Other branches o f parent b a n k .. Other banks.................................... Official institutions....................... N onbank foreigners..................... 21,041 1,928 9,895 1,151 8,068 28,453 3,478 11,354 2,022 11,599 41,040 5,411 16,298 3,576 15,756 56,847 7,296 22,175 6,040 21,336 57,683 7,389 22,481 6,485 21,327 62,050 8,144 25,354 7,101 21,451 61,539 8,463 23,836 7,004 22,236 60,999 7,815 23,435 7,225 22,523 64,834 9,060 25,390 7,495 22,890 64,687 8,095 25,148 7,784 23,660 50 Other assets........................................ 520 815 933 1,239 1,232 1,217 1,748 1,413 1,333 1,300 51 Total payable in U.S. dollars.............. 21,937 28,726 41,887 59,289 57,799 62,705 62,266 61,605 64,982 66,396 O verseas Branches A63 3.22 Continued 1976 Liability account 1973 1974 1977 1975 Oct. Nov. Dec. Jan. F e b .' M ar. Apr.* All foreign countries 52 Total, all currencies............................. 121,866 151,905 176,493 206,599 207,734 219,432 212,415 215,914 223,222 223,044 53 54 55 To United States.............................. Parent b a n k .................................. O ther.............................................. 5,610 1,642 3,968 11,982 5,809 6,173 20,221 12,165 8,057 28,984 17,869 11,115 30,290 19,059 11,231 32,836 19,894 12,942 30,411 18,728 11,683 30,515 19,261 11,253 34,455 21,054 13,402 33,166 18,396 14,770 56 57 58 59 60 To foreigners..................................... Other branches o f parent bank. Other banks.................................. Official institutions..................... N onbank foreigners................... 111,615 18,213 65,389 10,330 17,683 132,990 26,941 65,675 20,185 20,189 149,815 34,111 72,259 22,773 20,672 170,770 41,052 79,415 25,019 25,284 170,690 41,711 78,369 23,967 26,643 179,862 44,309 83,852 25,828 25,873 175,124 44,288 79,486 25,771 25,580 178,540 46,327 78,295 26,631 27,288 181,905 47,661 80,036 26,194 28,014 182,967 46,175 82,669 26,125 27,998 61 Other liabilities................................ 4,641 6,933 6,456 6,845 6,755 6,734 6,880 6,859 6,862 6,910 62 Total payable in U.S. dollars............ 80,374 107,890 135,907 160,553 161,054 173,092 167,589 170,533 177,247 177,092 63 64 65 To United States.............................. Parent b a n k .................................. O ther.............................................. 5,027 1,477 3,550 11,437 5,641 5,795 19,503 11,939 7,564 28,210 17,633 10,576 29,399 18,821 10,578 32,049 19,680 12,368 29,475 18,480 10,996 29,601 19,015 10,585 33,512 20,800 12,712 32,202 18,151 14,051 66 67 68 69 70 To foreigners..................................... Other branches of parent bank. Other banks.................................. Official institutions..................... N onbank foreigners................... 73,189 12,554 43,641 7,491 9,502 92,503 19,330 43,656 17,444 12,072 112,879 28,217 51,583 19,982 13,097 128,943 33,853 56,711 21,910 16,468 128,231 34,008 55,900 20,924 17,398 137,527 37,037 60,597 22,877 17,016 134,352 37,706 56,772 23,038 16,836 137,290 39,372 56,096 23,598 18,223 140,155 40,691 57,755 23,406 18,303 141,221 39,096 60,514 23,216 18,395 71 Other liabilities................................ 2,158 3,951 3,526 3,400 3,424 3,516 3,761 3,643 3,580 3,669 United Kingdom 72 Total, all currencies............................. 61,732 69,804 74,883 76,854 77,249 81,466 76,482 78,708 81,268 80,150 73 74 75 To United States.............................. Parent b a n k .................................. O ther.............................................. 2,431 136 2,295 3,978 510 3,468 5,646 2,122 3,523 5,310 1,468 3,842 5,520 1,459 4,061 5,997 1,198 4,798 5,101 1,211 3,889 4,871 1,191 3,681 6,365 1,537 4,828 6,272 1,515 4,756 76 77 78 79 80 To foreigners.................................... Other branches o f parent bank. Other banks.................................. Official institutions..................... N onbank foreigners................... 57,311 3,944 34,979 8,140 10,248 63,409 4,762 32,040 15,258 11,349 67,240 6,494 32,964 16,553 11,229 69,151 6,826 32,488 17,567 12,270 69,368 6,783 33,690 16,181 12,713 73,228 7,092 36,259 17,273 12,605 69,202 7,663 '32,336 '16,975 12,228 71,523 7,981 32,097 18,204 13,242 72,665 8,252 33,830 17,711 12,872 71,787 7,764 33,747 17,260 13,016 81 Other liabilities................................ 1,990 2,418 1,997 2,394 2,360 2,241 2,179 2,313 2,238 2,091 82 Total payable in U.S. dollars............ 39,689 49,666 57,820 58,031 58,757 63,174 59,009 61,331 63,346 62,373 83 84 85 To United States.............................. Parent b a n k .................................. O ther.............................................. 2,173 113 2,060 3,744 484 3,261 5,415 2,083 3,332 5,152 1,448 3,704 5,330 1,447 3,883 5,849 1,182 4,666 4,876 1,195 3,681 4,704 1,166 3,538 6,189 1,506 4,683 6,108 1,498 4,610 86 87 88 89 90 To foreigners.................................... Other branches o f parent bank. Other banks.................................. Official institutions..................... N onbank foreigners................... 36,646 2,519 22,051 5,923 6,152 44,594 3,256 20,526 13,225 7,587 51,447 5,442 23,330 14,498 8,176 52,017 5,742 21,493 15,550 9,233 52,503 5,520 23,040 14,283 9,660 56,372 5,874 25,527 15,423 9,547 53,230 6,573 '22,137 '15,184 9,336 55,675 6,906 22,211 16,345 10,213 56,283 7,188 23,841 15,817 9,437 55,390 6,563 23,815 15,394 9,617 91 Other liabilities................................ 870 1,328 959 862 924 953 903 953 874 875 Bahamas and Caymans 92 Total, all currencies............................. 23,771 31,733 45,203 63,578 61,886 66,774 66,479 66,134 '69,562 70,980 93 94 95 To United States.............................. Parent b a n k .................................. O ther.............................................. 1,573 307 1,266 4,815 2,636 2,180 11,147 7,628 3,520 20,167 14,000 6,167 20,676 14,797 5,879 22,723 16,163 6,560 21,689 15,191 6,499 21,672 15,241 6,431 r24,314 '17,146 '7 ,167 23,090 14,545 8,545 96 97 98 99 100 To foreigners.................................... Other branches o f parent bank. Other banks.................................. Official institutions..................... N onbank foreigners................... 21,747 5,508 14,071 492 1,676 26,140 7,702 14,050 2,377 2,011 32,949 10,569 16,825 3,308 2,248 42,358 13,381 22,615 2,784 3,577 40,111 12,931 19,923 3,198 4,059 42,897 13,801 21,758 3,573 3,765 43,376 13,551 22,256 3,607 3,963 43,166 14,406 21,006 3,314 4,439 ' 43,863 '14,931 '20,475 '3,302 '5,155 46,641 14,123 23,780 3,892 4,845 101 Other liabilities................................ 451 778 1,106 1,053 1,099 1,154 1,413 1,295 '1,385 1,249 102 Total payable in U.S. dollars............ 22,328 28,840 42,197 r60,036 '58,367 63,417 62,851 62,416 '65,792 67,199 A64 3.23 International Statistics a July 1977 M ARK ETABLE U .S. TR E A SU R Y B O N D S A N D NOTES Foreign Holdings and Transactions Millions o f dollars Country or area 1977 Jan.— May? 1976 1975 1976 Nov. 1977 Jan. Dec. Feb. Mar. A pr.p M ay33 Holdings (end of period) 4 1 1 Estimated to tal....................... 7,703 15,798 15,063 15,798 16,307 17,813 18,748 18,450 19,107 2 Foreign countries................... 7,372 12,765 12,337 12,765 13,014 13,746 14,929 16,024 16,972 3 4 5 6 7 8 9 1,085 13 215 16 276 55 363 143 4 2,330 14 764 288 191 261 485 323 4 2,293 14 746 288 192 291 433 325 4 2,330 14 764 288 191 261 485 323 4 2,300 14 764 287 191 271 476 293 4 2,504 14 789 367 188 324 512 306 4 2,870 14 894 388 188 317 713 354 4 3,505 14 1,112 388 188 397 1,069 332 4 3,475 11 1,112 418 148 429 1,037 315 4 Europe................................. Belgium-Luxembourg.. G erm any......................... N etherlands................... Sweden........................... Switzerland..................... United K ingdom .......... Other W estern Europe. Eastern E u ro p e............. 10 11 12 C anada................................ 395 256 250 256 256 261 270 268 271 13 14 15 16 Latin A m erica.................................. Venezuela...................................... Other Latin America republics. Netherlands Antilles 1............... 200 4 29 161 312 149 35 118 302 149 28 115 312 149 35 118 314 149 21 125 295 149 21 121 405 258 26 120 448 193 21 119 472 193 21 113 17 18 A sia.................................................... Japan.............................................. 5,370 3,271 9,323 2,687 8,950 2,587 9,323 2,687 9,637 2,682 10,330 2,806 11,068 3,123 11,476 3,174 12,448 3,773 19 A frica................................................ 321 543 543 543 506 356 305 305 279 20 All o th er........................................ * * * * * * 11 23 27 21 Nonmonetary international and regional organizations........................................ 331 3,033 2,726 3,033 3,294 4,068 3,819 2,426 2,135 22 23 322 9 2,905 128 2,655 71 2,905 128 3,180 114 3,948 119 3,700 118 2,318 108 2,032 103 657 International...................... Latin American regional. Transactions (net purchases, or sales ( —), during period) 24 T o tal....................... 1,994 8,095 3,309 577 735 510 1,505 936 -2 9 8 25 Foreign countries. 1,814 5,393 4,207 383 428 249 732 1,184 1,094 948 26 27 1,612 202 5,116 276 3,888 319 340 43 421 6 229 21 709 23 1,047 137 922 173 982 -3 5 180 2,702 -8 9 8 193 307 261 773 -2 4 8 -1 ,3 9 2 -2 9 1 1,797 170 3,887 221 1,817 -2 6 4 630 11 140 254 -3 7 505 -1 5 0 408 -5 1 338 312 -2 6 Official institutions. Other foreign........... 28 Nonmonetary international and regional organizations........................................ 29 30 M e m o : Oil-exporting countries Middle East 2 ........................................... Africa 3...................................................... 1 Includes Surinam until January 1976. 2 Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab Emirates (Trucial States). D ata not available until 1975. 3 Comprises Algeria, Gabon, Libya, and Nigeria. D ata not available until 1975. 3.24 4 Estimated official and private holdings o f marketable U.S. Treasury securities with an original m aturity o f more than I year. D ata are based on a benchmark survey o f holdings as o f Jan. 31, 1971, and monthly transactions reports. Excludes nonmarketable U.S. Treasury bonds and notes held by official institutions of foreign countries. FO R EIG N O FFICIAL ASSETS H ELD AT FED ER A L RESERVE BA N K S Millions o f dollars, end o f period 1976 Assets 1973 1974 1977 1975 Dec. Jan. Feb. Mar. Apr. May June 1 D eposits....................................................................... 251 418 353 352 383 361 349 305 436 379 Assets held in custody: 2 U.S. Treasury securities1...................................... 3 Earm arked gold2 ................................................... 52,070 17,068 55,600 16,838 60,019 16,745 66,532 16,414 66,992 16,343 68,653 16,304 71,435 16,271 73,261 16,282 73,964 16,221 74,098 16,184 1 M arketable U.S. Treasury bills, certificates o f indebtedness, notes, and bonds; and nonmarketable U.S. Treasury securities payable in dollars and in foreign currencies. 2 The value o f earmarked gold increased because o f the changes in par value o f the U.S. dollar in May 1972 and in October 1973. N o t e . — Excludes deposits and U.S. Treasury securities held for inter national and regional organizations. Earm arked gold is gold held for foreign and international accounts and is not included in the gold stock o f the United States. Investment transactions 3.25 A65 FOREIGN TRANSACTIONS IN SECURITIES Millions o f dollars Transactions, and area or country 1977 1975 1976 1976 Jan.MayP Nov. r 1977 D ec.r J a n .r F e b .r M ar. Apr.*5 j May*5 U.S. corporate securities 1 2 Stocks: Foreign purchases.................................................. Foreign sales........................................................... 15,347 10,678 18,227 15,474 6,033 5,044 977 1,025 1,562 1,287 1,425 1,137 1,162 1,036 1,101 980 1,135 913 1,210 978 3 Net purchases, or sales ( —) .................................. 4,669 2,752 989 -4 9 274 288 126 121 222 232 4 Foreign countries..................................................... 4,651 2,740 964 -5 0 281 290 124 116 222 212 5 6 7 8 9 10 E u ro p e.................................................................. France............................................................... G erm any.......................................................... N etherlands..................................................... Switzerland...................................................... United K ingdom ............................................ 2,491 262 251 359 899 594 336 256 68 -1 9 9 -1 0 0 340 482 12 65 29 134 244 -1 1 8 -2 5 -1 3 -2 9 -4 4 -5 111 37 24 -3 5 -7 84 130 27 1 24 39 39 47 -1 0 -7 -5 23 36 72 4 -4 -1 0 30 55 105 -6 38 -7 38 47 128 -3 37 27 4 67 11 12 13 14 15 16 C an ad a................................................................. Latin A m erica..................................................... Middle E ast1....................................................... Other A sia2 ......................................................... A frica.................................................................... Other countries.................................................. 361 -7 1,640 142 10 15 325 155 1,803 117 7 -4 9 70 356 44 * 4 1 25 64 -2 3 1 * 60 1 115 9 2 -1 7 8 4 100 46 * 2 30 14 50 -1 7 * 1 9 14 17 3 * 1 -5 21 97 5 * -1 -3 3 17 92 7 * 1 17 Nonmonetary international and regional organizations................................................... 18 12 25 2 -6 -2 1 5 1 20 Bonds3 18 Foreign purchases.................................................. 19 Foreign sales............................................................ 5,408 4,642 5,529 4,322 2,611 1,405 355 364 533 524 400 322 534 214 348 208 856 243 473 418 20 Net purchases, or sales ( —) ................................. 766 1,207 1,206 -9 9 78 320 140 613 55 21 Foreign countries..................................................... 1,795 1,248 1,167 110 6 73 329 112 568 85 22 23 24 25 26 27 E u ro p e .................................................................. France............................................................... G erm any.......................................................... N etherlands..................................................... Sw itzerland...................................................... United K ingdom ............................................ 113 82 -6 -8 117 -5 2 92 49 -5 0 -2 9 158 23 392 -2 2 9 -3 8 93 314 24 5 4 3 -3 15 53 7 1 -2 0 13 54 8 -5 -4 2 15 8 281 -3 4 -2 32 225 75 -2 * -3 31 43 102 -5 -4 -7 -4 109 -7 4 -7 13 -2 8 19 -7 1 28 29. 30 31 32 33 C an ad a................................................................. Latin A m erica..................................................... Middle E ast1....................................................... Other A sia2 ......................................................... A frica.................................................................... Other countries.................................................. 128 31 1,553 -3 5 5 1 96 94 1,179 -1 6 5 -2 5 -2 1 70 7 696 8 -2 * 16 6 74 -8 -2 * 7 27 -2 1 -4 3 -1 4 -2 11 -5 59 1 * * 55 8 -7 -8 * * -3 1 48 -6 -2 * 6 3 454 4 * * 1 * 142 17 * * Nonmonetary international and regional organizations................................................... - 1 ,0 3 0 -4 1 36 -1 1 9 3 4 -9 27 45 -3 1 34 Foreign securities -1 8 9 1,541 1,730 -3 2 2 1,937 2,259 -2 3 6 859 1,094 -1 167 168 4 217 213 -1 8 181 199 -1 0 9 130 238 -6 2 187 249 -4 0 157 197 -7 204 211 38 Bonds, net purchases, or sales ( —) ......................... -6 ,3 2 5 39 Foreign purchases.................................................. 2,383 40 Foreign sales........................................................... 8,708 -8 ,6 5 2 4,932 13,584 1,328 3,236 4,564 481 455 936 -1 ,3 2 3 670 1,993 -3 0 818 848 -3 7 4 581 955 -5 6 628 684 -1 1 606 617 -8 5 7 603 1,460 35 Stocks, net purchases, or sales ( —) ........................ 36 Foreign purchases.................................................. 37 Foreign sales........................................................... 41 Net purchases, or sales ( —) of stocks and b o n d s.. - 6 ,5 1 5 -8 ,9 7 3 -1 ,5 6 5 -4 8 1 - 1 ,3 1 9 -4 9 -483 -1 1 8 -5 1 -8 6 4 42 Foreign countries......................................................... - 4 ,3 2 3 43 E u ro p e...................................................................... -5 3 44 C anad a ..................................................................... -3 ,2 0 2 45 Latin A m erica......................................................... -3 0 6 46 A sia........................................................................... -6 2 2 47 A frica........................................................................ 15 48 Other countries....................................................... -1 5 5 -7 ,0 7 8 -1 ,1 6 3 -8 4 4 -2 9 7 -5 ,1 6 8 -8 5 5 3 158 -7 0 0 -1 8 5 1 48 14 -4 1 6 -3 5 1 -1 7 -4 0 -2 6 -7 0 * -1 9 7 -7 9 0 -1 4 0 -6 6 8 37 -2 4 2 3 -3 3 8 -2 1 -2 9 8 25 -5 3 -1 9 -4 8 8 -2 0 7 -2 6 5 42 -6 1 2 1 -1 4 9 54 -8 3 35 -1 5 5 * * 4 2 -9 4 69 25 2 -1 9 2 -1 2 5 -1 1 5 -1 3 59 * 2 49 Nonmonetary international and regional organizations....................................................... - 2 ,1 9 2 -1 ,8 9 8 -4 0 2 -1 3 2 -5 2 9 290 5 31 -5 5 -6 7 3 1 Comprises oil-exporting countries as follows: Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab Emirates (Trucial States). 2 Includes Middle East oil-exporting countries until 1975. 3 Includes State and local government securities, and securities o f U.S. Govt, agencies and corporations. Also includes issues o f new debt securities sold abroad by U.S. corporations organized to finance direct investments abroad. A66 3.26 International Statistics □ July 1977 SH O RT-TERM LIABILITIES TO A N D CLAIM S O N FO R EIG NERS in the United States Reported by Nonbanking Concerns Millions o f dollars, end o f period 1975 1976 1975 1976 Type, and area or country Dec. Mar. June Sept. Dec.p Dec. Mar. Liabilities to foreigners 1 By type: 2 Payable in dollars................................................... 3 4 Payable in foreign currencies................................ Deposits with banks abroad in reporter’s Sept. Dec.P Claims ion foreigners 6,006 6,350 6,301 6,318 6,477 12,151 12,698 13,847 13,190 14,148 5,402 5,700 5,676 5,702 5,867 11,048 11,713 12,912 12,211 13,211 605 650 625 615 610 1,103 985 935 980 936 564 539 478 508 496 439 493 487 379 557 6,269 2,122 10 166 7 4 198 173 48 97 141 29 13 40 34 187 13 811 123 7 9 13 12,150 4,499 16 133 39 91 291 355 33 381 167 40 44 408 62 242 28 1,901 36 14 150 70 12,697 4,935 17 116 35 36 355 305 41 406 176 58 45 516 80 207 26 2,280 30 18 106 80 13,846 5,330 17 193 30 138 363 358 47 335 146 52 22 432 84 270 31 2,599 28 14 96 75 13,189 5,155 21 195 26 139 413 492 56 358 142 43 28 336 62 254 23 2,363 30 17 81 79 14,147 5,250 21 163 50 79 426 377 51 383 162 49 40 . 369 89 241 25 2,437 26 19 156 85 5 By area or country: 6 Foreign countries......................................................... 7 Europe....................................................................... 8 A u stria................................................................. 9 Belgium-Luxembourg........................................ 10 D enm ark.............................................................. 11 Finland................................................................. France................................................................... 12 13 G erm any.............................................................. 14 Greece................................................................... Italy....................................................................... 15 16 N etherlands......................................................... 17 N orw ay................................................................ P ortugal............................................................... 18 19 Spain..................................................................... Sweden................................................................. 20 21 22 T urkey.................................................................. 23 United K ingdom ................................................ 24 Yugoslavia........................................................... 25 Other Western Europe...................................... 26 U.S.S.R................................................................. 27 Other Eastern E u rope...................................... June 5,602 2,333 14 299 9 14 149 149 19 171 114 20 4 81 29 130 25 998 76 8 20 11 6,132 2,344 6 296 12 10 205 152 25 125 162 23 3 68 25 159 14 929 91 6 23 10 6,055 2,286 13 233 12 7 159 228 29 116 170 22 3 51 24 213 20 846 108 7 10 16 6,131 2,270 15 183 13 21 185 256 28 128 141 24 5 36 35 241 16 789 113 8 19 14 28 Canada...................................................................... 295 313 369 324 377 2,109 2,234 2,202 2,216 2,449 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 Latin America......................................................... Argentina............................................................. B aham as............................................................... B razil.................................................................... C hile..................................................................... C olom bia............................................................. C uba..................................................................... M exico................................................................. Panam a................................................................. P eru....................................................................... U ruguay............................................................... Venezuela............................................................. Other Latin American republics..................... Netherlands Antilles 1...................................... Other Latin A m erica........................................ 912 36 277 96 14 17 * 82 16 29 3 100 71 35 138 1,176 41 376 91 11 16 * 92 10 30 2 163 71 58 214 1,077 42 330 90 15 19 * 72 12 31 3 184 95 55 130 1,011 41 251 53 16 11 * 74 10 32 3 222 100 68 129 1,017 38 260 65 17 13 * 95 34 25 4 219 137 10 101 2,367 58 667 409 36 49 1 362 91 41 4 178 159 12 301 2,563 48 883 475 27 47 1 332 84 38 4 156 170 7 292 3,053 43 1,150 462 46 57 1 332 101 39 4 186 184 10 437 2,813 39 925 417 26 66 1 352 83 35 22 215 179 9 444 3,557 44 1,368 682 34 59 1 332 74 42 5 194 270 9 442 44 •45 46 47 48 49 50 51 52 53 54 55 Asia............................................................................ China, People’s Republic o f (M ainland).. . . China, Republic o f (T aiw an).......................... Hong K o n g ......................................................... In d ia ..................................................................... Indonesia............................................................. Israel..................................................................... Jap a n .................................................................... K o rea................................................................... Philippines........................................................... Thailand............................................................... Other A sia........................................................... 1,721 6 97 18 7 137 31 295 69 14 18 1,031 1,733 5 110 23 9 141 26 307 53 18 18 1,022 1,752 8 124 28 10 133 34 290 62 18 11 1,035 2,027 1 129 33 11 144 32 275 85 28 23 1,260 2,080 20 112 40 23 136 39 228 77 53 24 1,326 2,631 65 164 111 39 140 54 1,130 263 96 22 549 2,489 35 100 66 60 155 42 1,161 105 106 20 638 2,727 23 215 104 51 160 53 1,169 131 114 19 691 2,419 11 136 88 53 193 48 1,008 142 93 23 624 2,330 23 199 96 55 209 41 912 120 86 22 567 56 57 58 59 60 61 Africa........................................................................ Egypt.................................................................... M orocco............................................................... South A frica....................................................... Z aire..................................................................... Other A frica....................................................... 390 37 8 99 6 239 502 30 7 113 7 345 527 22 32 88 12 372 432 25 42 65 24 276 597 27 43 54 36 438 405 22 10 93 24 256 343 22 10 80 23 207 378 28 12 83 25 230 407 36 9 78 28 257 390 28 10 87 21 245 62 63 64 Other countries........................................................ Australia............................................................... All other............................................................... 70 55 14 65 47 18 44 32 12 67 50 18 76 57 19 141 102 39 133 97 36 155 100 56 178 112 67 171 106 65 65 Nonmonetary international and regional organizations....................................................... 276 219 246 186 208 1 1 1 1 1 1 Includes Surinam until 1976. N o t e . — Reported by exporters, importers, and industrial and com- mercial concerns and other nonbanking institutions in the United States. D ata exclude claims held through U.S. banks and intercompany accounts between U.S. companies and their affiliates. Nonbank-reported Data A67 3.27 SHORT-TERM CLAIMS ON FOREIGNERS Reported by Large Nonbanking Concerns in the United States Millions o f dollars, end o f period 1976 Type and country 1973 1974 1975 1 T o tal.............................................. 3,164 3,357 By type: 2 Payable in dollars.................. 3 D eposits.............................. 4 Short-term investments 1. 2 ,6 2 5 2,588 37 1977 Oct. Nov. Dec. Jan. Feb. M ar.2* Apr.? 3,792 4,897 5,123 5,419 5,358 5,575 6,286 6,208 2 ,6 6 0 3,0 3 8 4 ,3 2 6 4 ,6 0 0 4 ,8 0 2 4 ,7 4 3 4 ,9 4 1 5 ,6 7 3 5 ,5 3 8 2,591 69 2,706 332 3,935 391 4,213 387 4,429 373 4,375 368 4,564 377 5,218 455 4,956 582 5 6 7 Payable in foreign currencies D eposits.............................. Short-term investments 1. 540 697 756 571 523 618 616 634 614 670 435 105 429 268 510 246 339 232 307 216 332 286 308 308 336 298 312 302 360 310 8 9 10 11 12 By country: United Kingdom ................... C anada.................................... Bahamas.................................. Japan....................................... All other.................................. 1,118 765 589 306 386 1,350 967 390 398 252 1,304 1,153 546 343 445 1,640 1,429 1,059 116 653 1,693 1,552 1,059 135 684 1,835 1,539 1,247 110 688 1,851 1,291 1,312 127 1,844 1,321 1,396 164 850 1,871 1,468 1,707 147 1,093 1,712 1,503 1,649 154 1,190 1 Negotiable and other readily transferable foreign obligations payable on demand or having a contractural maturity o f n o t more than 1 year from the date on which the obligation was incurred by the foreigner. 111 N o t e . —D ata represent the assets abroad of large nonbanking con cerns in the United States. They are a portion o f the total claims on foreigners reported by nonbanking concerns in the U nited States and are included in the figures shown in Table 3.26. 3.28 LONG-TERM LIABILITIES TO AND CLAIMS ON FOREIGNERS Reported by Nonbanking Concerns in the United States Millions o f dollars, end o f period 1975 1976 1975 1976 Area and country Dec. Mar. June Sept. Dec.? Dec. Liabilities to foreigners Mar. June Sept. Dec.p Claims on foreigners 1 T o tal.............................................................................. 4,256 4,069 3,935 3,725 3,507 4,977 5,177 5,034 4,971 4,910 2 E u ro p e.......................................................................... 3 G erm any.................................................................. 4 N etherlands............................................................. 5 Switzerland.............................................................. 6 United K ingdom .................................................... 3,267 506 202 522 1,604 3,114 446 214 484 1,577 2,992 425 214 467 1,493 2,820 406 270 327 1,445 2,697 396 258 260 1,407 1,026 37 217 59 396 973 34 219 56 349 984 35 211 56 365 953 73 211 54 298 910 72 156 57 297 7 C anada......................................................................... 155 144 166 111 86 1,426 1,473 1,516 1,511 1,534 8 Latin A m erica............................................................. 9 Bahamas................................................................... 10 B razil........................................................................ 11 C hile......................................................................... 12 M exico..................................................................... 269 210 4 1 3 248 184 5 1 6 222 157 5 1 6 230 132 5 1 7 241 138 5 1 15 1,634 8 170 315 216 1,770 7 182 312 209 1,602 37 164 306 187 1,547 37 171 244 219 1,520 36 203 248 195 14 496 397 495 394 489 388 498 402 423 397 669 90 685 91 710 85 737 80 771 80 Ja p a n ........................................................................ 15 A frica............................................................................ 2 2 2 2 2 168 214 163 165 189 16 All other *................................................................... 66 65 64 64 58 55 61 59 58 58 i Includes nonmonetary international and regional organizations. A68 3.29 International Statistics □ July 1977 D ISC O U N T RATES OF FO R EIG N C EN TRAL BA N K S Per cen t per an n u m R ate on June 30, 1977 Rate on June 30, 1977 Country Per cent A rgentina.......................... A ustria............................... Belgium .............................. B razil.................................. C an ad a .............................. D enm ark............................ Country M onth effective 18.0 5.5 6 .0 28.0 7.5 9 .0 Feb. June June May May M ar. Per cent 1972 1977 1977 1976 1977 1977 10.5 3.5 13.0 5.0 4.5 3.5 Germany, Fed. Rep. of. N etherlands.................... N ote .— R ates s h o w n are m a in ly th o s e at w h ic h th e cen tra l b a n k either d isco u n ts or m a k es a d v a n c e s a g a in st e lig ib le c o m m ercia l paper a n d /o r g overn m en t secu rities for c o m m e r c ia l b a n k s or b rokers. F o r c o u n tr ie s w ith 3.30 Rate on June 30, 1977 Country M onth effective Sept. Sept. June Apr. June May 1976 1975 1977 1977 1942 1977 Per cent U nited K ingdom ........... 6.0 8.0 2 .0 8.0 5.0 M onth effective Sept. Oct. June May Oct. 1976 1976 1976 1977 1970 m o re th a n o n e rate a p p lic a b le to su c h d isco u n ts or a d v a n ces, th e rate s h o w n is th e o n e at w h ich it is u n d e r sto o d th e cen tra l b a n k tra n sa cts th e la rg est p r o p o r tio n o f its c red it o p e r a tio n s. F O R E IG N SH O RT-TERM IN TEREST RATES Per ce n t per a n n u m , a verages o f d a ily figures 1 E uro-dollars............................................................... 2 United K ingdom ....................................................... 3 C an ad a........................................................................ 4 5 6 7 1977 1974 C ountry, or type 1975 1976 Feb. M ar. Apr. May June 11.01 13.34 10.47 7.02 10.63 8.00 5.58 11.35 9.39 5.14 13.53 8.24 5.08 11.56 7.78 5.13 10.31 7.63 5.16 8.59 7.58 5.80 7.63 7.44 5.78 7.81 7.16 9.80 4.87 3.01 5. 17 7.91 4.19 1.45 7.02 8.65 4.70 1.24 6.18 10.02 4.64 1.68 6.04 9.81 4.70 2.88 5.73 9.87 4.57 2.61 4.89 9.33 4.43 3.98 3.03 9.13 4.24 3.80 2.84 9.01 10.37 6.63 11.64 16.32 10.25 7.70 15.68 8.49 7.50 15 .86 7.59 7.50 16.57 7.07 7.20 16.26 7.01 6.46 15.49 6.94 5.75 14.65 6.88 6.05 G erm any..................................................................... Switzerland................................................................. N etherlands................................................................. F ran ce.......................................................................... 8 Ita ly .............................................................................. 9 Belgium....................................................................... 10 Ja p a n ............................................................................ N ote .— R ates are for 3 -m o n th interb an k lo a n s ex cep t fo r— C an ad a, fin an ce c o m p a n y p ap er; B elg iu m , tim e d e p o sits o f 2 0 m illio n fran cs and 3.31 Jan. o v e r ; an d J ap an , lo a n s an d d isco u n ts th a t can b e ca lled after b ein g h eld o v e r a m in im u m o f tw o m o n th -e n d s. FO R EIG N E X C H A N G E RATES Cents per unit o f foreign currency Country/currency 1974 1975 1977 1976 Jan. Feb. Mar. Apr. May June 1 2 3 4 5 A ustralia/dollar.................... Austria/shilling..................... Belgium/franc....................... C anada/dollar....................... D enm ark/krone................... 143.89 5.3564 2.5713 102.26 16.442 130.77 5.7467 2.7253 98.30 17.437 122.15 5.5744 2.5921 101.41 16.546 108.53 5.8852 2.7249 98.985 16.967 109.04 5.8453 2.7114 97.295 16.891 109.94 5.8822 2.7258 95.125 17.038 110.53 5.9252 2.7509 95.103 16.710 110.31 5.9533 2.7700 95.364 16.638 110.80 5.9647 2.7713 94.549 16.544 6 7 8 9 10 Finland/m arkka................... France/franc......................... Germany/deutsche m a rk ... India/rupee........................... Ireland/pound....................... 26.565 20.805 38.723 12.460 234.03 27.285 23.354 40.729 11.926 222.16 25.938 20.942 39.737 11.148 180.48 26.313 20.108 41.792 11.231 171.24 26.169 20.083 41.582 11.285 171.03 26.296 20.075 41.812 11.313 171.74 24.899 20.133 42.119 11.310 171.90 24.530 20.190 42.394 11.320 171.85 24.524 20.240 42.453 11.286 171.91 11 12 13 14 15 Italy/lira................................. Japan/yen.............................. Malaysia/ringgit................... M exico/peso......................... Netherlands/guilder............ 16 17 18 19 20 New Zealand/dollar............ N or way/krone...................... Portugal/escudo................... South A frica/rand............... Spain/peseta......................... 140.02 18.119 3.9506 146.98 1.7337 121.16 19.180 3.9286 136.47 1.7424 99.115 18.327 3.3159 114.85 1.4958 94.839 18.946 3.1276 114.94 1.4577 95.192 18.904 3.0717 115.00 1.4475 95.689 19.035 2.5778 115.00 1.4530 96.129 18.909 2.5752 114.93 1.4536 96.002 18.956 2.5818 115.00 1.4491 96.264 18.915 2.5802 114.88 1.4404 21 22 23 24 Sri Lanka/rupee................... Sw eden/krona....................... Switzerland/franc................. United K ingdom /pound. . . 14.978 22.563 33.688 234.03 14.385 24.141 38.743 222.16 11.908 22.957 40.013 180.48 11.421 23.734 40.127 171.24 11.442 23.543 39.669 171.03 12.820 23.726 39.209 171.74 13.676 23.004 39.582 171.90 13.700 22.962 39.694 171.85 13.664 22.625 40.170 171.91 84.11 82.20 89.68 90.35 90.55 90.45 90.13 89.99 89.91 .15372 .34302 41.682 8.0000 37.267 .15328 .33705 41.753 8.0000 39.632 .12044 .33741 39.340 6.9161 37.846 .11372 .34359 39.718 4.8114 39.953 .11327 .35087 40.011 4.4084 39.813 .11276 .35687 40.152 4.3978 40.079 .11264 .36339 40.305 4.4076 40.464 .11279 .36046 40.255 4.3890 40.7009 .11295 .36652 40.270 4.3582 40.326 M emo: 25 United States/dollar 1........ 1 Index o f weighted-average exchange value o f U.S. dollar against curN o t e . — Averages o f certified noon buying rates in New Y ork for cable rencies o f other G-10 countries plus Switzerland. May 1970 parities = 100. transfers. Weights are 1972 global trade o f each o f the 10 countries. Business Finance 4.10 A69 SALES, R EV EN U E, PROFITS, A N D D IV ID E N D S —Large Manufacturing Corporations Millions o f dollars 1975 Industry 1975 Ql 1 2 3 4 5 6 Total (170 corps.) Sales...................................................................... Total revenue...................................................... Profits before taxes............................................ Profits after taxes............................................... M e m o : PAT u n ad j.1.................................... 1976 1976 Q2 Q3 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 Total revenue...................................................... Profits before taxes............................................ Profits after taxes............................................... M e m o : PAT un ad j.1.................................... D urable goods industries (84 corps.):3 Sales..................................................................... Total revenue...................................................... Profits before taxes............................................ Profits after taxes.............................................. M e m o : PAT u n ad j.1.................................... Selected industries: Food and kindred products (28 corps.): Sales...................................................................... T otal revenue...................................................... Profits before taxes............................................ Profits after taxes............................................... M e m o : PAT u nadj.1.................................... Chemical and allied products (22 corps.): Sales..................................................................... Total revenue...................................................... Profits before taxes............................................ Profits after taxes.............................................. M e m o : PAT u n ad j.1 .................................... Petroleum refining (15 corps.): Sales...................................................................... Total revenue...................................................... Profits before taxes............................................ Profits after taxes............................................... M e m o : PAT un ad j.1.................................... Primary metals and products (23 corps.): Sales...................................................................... Total revenue...................................................... Profits before taxes............................................ Profits after taxes............................................... M e m o : PAT unadj.1.................................... Machinery (27 corps.): Sales...................................................................... Total revenue...................................................... Profits before taxes............................................ Profits after taxes............................................... M e m o : PAT unadj.1.................................... Ql r Q2 - Q3 Q4 166,452 168,958 18,902 9,539 9,490 3,449 161,596 164,631 16,894 8,442 8,550 3,480 180,462 181,546 18,587 8,113 9,340 4,371 86,927 88,179 10,674 4,809 4,829 1,879 87,404 88,864 10,595 4,833 4,809 1,947 88,678 90,967 10,632 4,871 4,962 1,990 99,926 100,174 10,793 4,058 4,868 2,094 69,828 70,852 6,435 3,300 3,663 1,388 72,384 73,282 6,828 3,804 3,807 1,308 79,048 80,094 8,307 4,706 4,681 1,502 72,918 73,664 6,262 3,571 3,588 1,490 80,536 81,372 7,794 4,055 4,472 2,277 586,948 667,821 595,337 676,596 60,356 71,885 27,040 34,707 27,810 36,016 12,458 14,491 138,392 140,482 12,925 5,566 5,682 3,132 145,898 147,811 14,875 6,715 6,603 3,036 148,008 149,841 15,507 7,102 7,054 3,076 323,136 362,935 328,502 368,184 40,905 42,694 16,303 18,571 16,719 19,468 7,228 7,910 77,297 78,616 9,378 3,586 3,572 1,815 78,656 79,940 9,989 3,919 3,900 1,784 82,361 83,595 10,924 4,441 4,439 1,803 84,822 86,351 10,614 4,357 4,808 1,826 263,812 304,886 266,835 308,412 19,451 29,191 10,737 16,136 11,091 16,548 5,230 6,577 61,095 61,866 3,547 1,980 2,110 1,317 67,242 67,871 4,886 2,796 2,703 1,252 65,647 66,246 4,583 2,661 2,615 1,273 N ondurable goods industries (86 corps.):2 7 8 9 10 11 12 Q4 154,650 159,311 157,203 161,461 17,049 17,502 7,657 8,613 8,471 8,636 3,214 3,191 57,149 58,156 5,025 2,496 2,601 1,100 62,568 63,142 5,750 2,890 3,013 1,259 13,490 13,708 1,066 502 526 268 14,117 14,356 1,190 607 615 271 14,600 14,844 1,385 719 745 274 14,942 15,248 1,384 668 715 287 14,762 14,993 1,471 665 667 307 15,057 15,395 1,507 778 785 325 16,048 16,221 1,462 817 827 309 16,701 16,533 1,310 630 734 318 57,735 58,376 7,082 3,889 4,015 1,723 64,125 64,837 8,197 4,511 4,622 1,918 13,618 13,756 1,647 932 927 430 14,329 14,503 1,622 929 937 425 14,660 14,791 1,858 1,035 1,028 429 15,128 15,326 1,955 993 1,123 439 15,756 15,899 2,179 1,244 1,225 444 16,081 16,242 2,117 1,208 1,153 445 15,878 16,084 2,008 1,130 1,163 481 16,410 16,612 1,893 929 1,081 548 172,645 175,915 26,305 8,551 8,712 3,801 196,154 199,688 25,857 9,555 10,168 4,089 41,988 42,851 6,227 1,905 1,871 966 41,342 42,100 6,612 2,078 2,040 937 43,873 44,633 6,961 2,300 2,268 949 45,442 46,331 6,505 2,268 2,533 949 46,656 47,407 6,254 2,481 2,512 971 46,065 46,888 6,210 2,383 2,404 1,017 46,923 48,744 6,559 2,606 2,635 1,036 56,510 56,649 6,834 2,085 2,617 1,065 48,578 49,534 2,921 1,822 2,003 945 54,044 54,825 2,834 1,652 1,947 926 12,482 12,782 1,015 633 639 273 12,393 12,604 711 478 485 227 12,274 12,479 487 396 381 216 11,429 11,669 708 315 498 229 12,733 12,904 633 409 416 218 14,441 14,650 924 603 610 227 13,751 13,958 701 513 521 230 13,119 13,313 576 127 400 251 79,049 80,000 8,735 4,837 4,899 2,031 87,274 88,519 11,320 6,181 6,202 2,383 18,315 18,535 1,757 986 990 487 19,907 20,130 2,105 1,186 1,180 489 19,786 19,977 2,233 1,232 1,239 523 21,041 21,358 2,640 1,433 1,490 532 20,455 20,707 2,469 1,355 1,354 537 21,627 22,072 2,781 1,528 1,517 581 21,133 21,280 2,700 1,461 1,467 602 24,059 24,460 3,370 1,837 1,864 663 85,863 107,563 86,475 108,394 3,077 8,909 1,471 4,870 1,604 4,918 2,062 1,121 18,866 19,011 -9 8 -1 2 7 -1 2 294 22,275 22,341 854 451 455 276 21,005 21,083 590 328 280 274 23,717 24,040 1,731 819 881 277 26,395 26,702 2,494 1,331 1,337 285 28,710 28,942 3,056 1,668 1,658 422 24,250 24,500 1,272 705 704 372 28,208 28,250 2,087 1,166 1,219 983 M otor vehicles and equipment (9 corps.): 49 50 51 52 53 54 Total revenue...................................................... Profits before taxes............................................ Profits after taxes............................................... M e m o : PAT unadj.1 .................................... Dividends............................................................. 1 Profits after taxes unadjusted are as reported by the individual com panies. These data are not adjusted to eliminate differences in accounting treatments of special charges, credits, and other nonoperating items. 2 Includes 21 corporations in groups not shown separately. 3 Includes 25 corporations in groups not shown separately. N o t e . — D ata are obtained from published reports o f companies and reports made to the Securities and Exchange Commission. Sales are net o f returns, allowances, and discounts, and exclude excise taxes paid di rectly by the company. Total revenue data include, in addition to sales, income from nonmanufacturing operations and nonoperating income. Profits are before dividend payments and have been adjusted to exclude special charges and credits to surplus reserves and extraordinary items not related primarily to the current reporting period. Income taxes (not shown) include Federal, State and local government, and foreign. Previous series last published in June 1972 B u l l e t i n , p. A-50. A 70 Board of Governors of the Federal Reserve System A r t h u r F. B u r n s , Chairman S t e p h e n S. G a r d n e r , Vice Chairman P h il ip E. C o l d w e l l H e n r y C . W a l l ic h OFFICE OF STAFF DIRECTOR FOR MANAGEMENT J o h n M . D e n k l e r , S taff D irecto r R o b e r t J. L a w r e n c e , D epu ty Staff E. A ssista n t D irecto r for Construction M anagem ent G o r d o n B . G r im w o o d , A ssista n t D irector and Program D irecto r fo r 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 onald OFFICE OF STAFF DIRECTOR FOR MONETARY POLICY OFFICE OF BOARD MEMBERS T h o m a s J. O ’C o n n e l l , Counsel to the Chairman M il t o n A ssista n t to the W . H u d so n , Chairman D irecto r D D a v id M. L illy J. C h ar l es P a r tee P h il ip C . J a c k s o n , Jr . A nderso n, Jo s e p h R. C o y n e , A ssista n t to the B oard K e n n e t h A. G u e n t h e r , A ssista n t to the J a y P a u l B r e n n e m a n , Special A ssista n t B oard to the S t e p h e n H . A x i l r o d , Staff D irecto r A r t h u r L . B r o i d a , D eputy Staff D irector M u r r a y A l t m a n n , A ssistan t to the B oard P e t e r M . K e i r , 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 N o r m a n d R. V. B e r n a r d , Special A ssistan t S pecial A ssista n t to the F r a n k O ’B r i e n , J r ., B oard J o s e p h S . S i m s , Special A ssista n t to D o n a l d J. W i n n , S pecial A ssista n t the B oard to the DIVISION OF RESEARCH AND STATISTICS B oard J a m e s L . K i c h l i n e , D irector J o s e p h S . Z e i s e l , D eputy D irecto r E d w a r d C . E t t i n , A sso cia te Director, J o h n H. K a l c h b r e n n e r , A sso cia te D irector DIVISION OF DATA PROCESSING 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 sso cia te D irector U y l e s s D . B l a c k , A ssistan t D irecto r G l e n n L. C u m m i n s , A ssistan t D irecto r R o b e r t J . Z e m e l , A ssista n t D irecto r LEGAL DIVISION E l e a n o r J. S t o c k w e l l , J o h n D. H a w k e , J r ., B a l d w in B . T u t t l e , G eneral Counsel D eputy G eneral R obert E. D a v i d L. S h a n n o n , C harles W . W o o d , D irecto r A ssistan t D irecto r Senior Research D ivision Officer Ja m e s R . W etzel, Senior R esearch D ivision Officer Counsel M a n n io n , A ssistan t G eneral Counsel DIVISION OF PERSONNEL to the B oard B oard A l l e n L . R a i k e n , A ssistan t G eneral Counsel G a r y M . W e l s h , A ssistan t G eneral Counsel C h a r l e s R . M c N e i l l , A ssista n t to the General Counsel A. E i s e n b e i s , A sso cia te Research D ivision Officer $ J o h n J. M i n g o , A sso cia te R esearch D ivision Officer J. C o r t l a n d G . P e r e t , A sso cia te R esearch D ivision Officer R obert DIVISION OF CONSUMER AFFAIRS OFFICE OF THE CONTROLLER J o h n K a k a l e c , C on troller 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 J o h n D. S m i t h , A ssistan t D irector OFFICE OF STAFF DIRECTOR FOR FEDERAL RESERVE BANK ACTIVITIES S ta ff D irector DIVISION OF FEDERAL RESERVE BANK EXAMINATIONS AND BUDGETS A l b e r t R . H a m i l t o n , A ssociate 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 J o h n F . H o o v e r , A ssista n t D irector P. D. R i n g , A ssistan t D irector DIVISION OF FEDERAL RESERVE BANK OPERATIONS J a m e s R . K u d l i n s k i , D irector W a l t e r A . A l t h a u s e n , A ssistan t D irector B r i a n M. C a r e y , A ssistan t D irector H a r r y A . G u i n t e r , A ssistan t D irector elm ut F. W endel, A sso cia te Research D ivision Officer J a n e t O. H a r t , D irecto r N a t h a n i e l E. B u t l e r , A ssociate D irector J e r a u l d C. K l u c k m a n , A sso cia te D irecto r Ja m es M . B r u n d y , A ssista n t Research D ivision Officer J a r e d J. E n z l e r , A ssista n t Research D ivision Officer DIVISION OF ADMINISTRATIVE SERVICES W il l ia m H . W a l l a c e , t H R o bert M . Fish e r , OFFICE OF THE SECRETARY A ssista n t Research D ivision Officer R ic h a r d H . P u c k e t t , T h e o d o r e E. A l l i s o n , S ecretary G r i f f i t h L. G a r w o o d , D eputy Secretary * R u t h A . R e i s t e r , A ssistan t Secretary A ssista n t Research D ivision Officer Steph en P. T aylo r, A ssista n t Research D ivision Officer L e v o n H . G a r a b e d ia n , A ssista n t D irector DIVISION OF BANKING SUPERVISION AND REGULATION J o h n E . R y a n , D irector I F r e d e r i c k C . S c h a d r a c k , D eputy D irector F r e d e r i c k R . D a h l , A sso cia te D irector W i l l i a m W . W i l e s , A ssociate D irector Ja c k M . E g e r t s o n , A ssista n t D irector D o n E . K l i n e , A ssista n t D irector T h o m a s E . M e a d , A ssistan t D irector R o b e r t S . P l o t k i n , A ssista n t D irector T h o m a s A. S i d m a n , A ssistan t D irector S a m u e l H . T a l l e y , A ssista n t D irector W i l l i a m T a y l o r , A ssista n t D irector DIVISION OF INTERNATIONAL FINANCE E d w i n M . T r u m a n , D irector J o h n E . R e y n o l d s , Counselor R o b e r t F. G e m m i l l , A ssociate D irector G e o r g e B . H e n r y , A ssociate Director C h a r l e s J. S i e g m a n , A ssociate D irector R e e d J. I r v i n e , Senior International Division Officer Senior International Division Officer S a m u e l P iz e r , *0n loan from the Federal Reserve Bank of Minneapolis, t On loan from the Federal Reserve Bank of New York. t On leave of absence. A72 Federal Open Market Committee A rthur P h il ip F . B u r n s , C h a irm a n E. C o l d w e l l S teph en S. G ardner Paul A. V P h i l i p C . J a c k s o n , Jr . J. C h a r l e s P a r t e e D L a w r e n c e K . R oos a v id M . L il l y R obert P. M R oger G u ffe y Frank Secretary D eputy Secretary B e r n a r d , A ssistan t A natol B albach, R ic h a r d G . D a v is , Secretary G eneral Counsel D eputy G eneral Counsel T u t t l e , A ssistan t General T h o m a s J . O ’C o n n e l l , Edw ard G. G u y , Counsel S t e p h e n H . A x il r o d , a l l ic h A sso cia te Econom ist A sso cia te Econom ist T h o m a s D a v i s , A ssociate Econom ist R o b e r t E i s e n m e n g e r , A ssociate Econom ist E d w a r d C . E t t i n , A ssociate Econom ist J a m e s L . K i c h l i n e , A ssociate Econom ist J o h n E . R e y n o l d s , A ssociate Econom ist K a r l S c h e l d , A sso cia te Econom ist E d w i n M . T r u m a n , A ssociate Econom ist J o s e p h S . Z e i s e l , A sso cia te Econom ist A r t h u r L . B r o id a , B a l d w in B . H enry C. W ayo E. M o r r is M urray A ltm a n n , N orm and R . V . V ic e C h a irm a n olcker, Econom ist M an ager , System Open M arket A ccount D eputy M anager for D om estic O perations D eputy M anager for Foreign O perations A lan R . H olm es, P e t e r D . S t e r n l ig h t , Scott E. P a rd ee, Federal Advisory Council R ic h a r d D . H i l l , f ir s t f e d e r a l r e s e r v e d is t r i c t , G il b e r t F . B r a d l e y , t w e l f t h fed era l W a l t e r B . W r is t o n , se c o n d f e d e r a l reserve d is t r ic t d is t r ic t reserve reserve reserve reserve fed era l d is t r ic t J. K o r s v ik , d is t r ic t Secretary A ssociate Secretary H erbert V . Pro c h n o w , W il l ia m federal d is t r ic t B en F. L o v e , elev en th d is t r ic t federal d is t r ic t J. W . M c L e a n , t e n t h d is t r ic t F r a n k A . P l u m m e r , s ix t h f e d e r a l reserve d is t r ic t R ic h a r d H . V a u g h a n , n in t h d is t r ic t J o h n H . L u m p k in , f if t h f e d e r a l reserve P resident Vice President , D o n a l d E . L a s a t e r , e ig h t h M . B r o c k W e ir , f o u r t h f e d e r a l reserve d is t r ic t E d w a r d B y r o n S m it h , s e v e n t h fe d e r a l reserve R o g e r S . H il l a s , t h ir d f e d e r a l reserve reserve federal A73 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 Frank R. Milliken Robert H. Knight Paul A. Miller Paul A. Volcker Thomas M. Timlen Buffalo .................... .14240 John T. Keane PHILADELPHIA 19105 John W. Eckman Werner C. Brown David P. Eastburn Vacant CLEVELAND* 44101 Horace A. Shepard Robert E. Kirby Lawrence H. Rogers, 11 G. Jackson Tankersley Willis J. Winn Walter H. MacDonald E. Angus Powell E. Craig Wall, Sr. I. E. Killian Robert C. Edwards Robert P. Black George C. Rankin Cincinnati ............... 45201 Pittsburgh ............... 15230 RICHMOND* ............. 23261 Baltimore .................. 21203 Charlotte ...................28230 Culpeper Communications and Records Center. . 22701 ATLANTA ................. 30303 Birmingham ............ Jacksonville ............ Miami ...................... Nashville ................. New Orleans .......... 35202 32203 33152 37203 70161 CHICAGO* ............... 60690 Detroit ...................... 48231 ST. LOUIS ................. 63166 Little Rock .............. 72203 Louisville ............... 40201 Memphis ................. 38101 MINNEAPOLIS 55480 Helena ...................... 59601 KANSAS CITY 64198 Denver .................... 80217 Oklahoma City ....... 73125 Omaha .................... 68102 DALLAS .................... 75222 El Paso .................... 79999 Houston ................... 77001 San Antonio ............ 78295 SAN FRANCISCO ... .94120 Los Angeles ............ Portland .................. Salt Lake City Seattle ...................... 90051 97208 84110 98124 Vice President in charge of branch Robert E. Showalter Robert D. Duggan Jimmie R. Monhollon Stuart P. Fishburne Albert D. Tinkelenberg H. G. Pattillo Clifford M. Kirtland, Jr. William H. Martin, III Gert H. W. Schmidt David G. Robinson John C. Bolinger George C. Cortright, Jr. Monroe Kimbrel Kyle K. Fossum Peter B. Clark Robert H. Strotz Jordan B. Tatter Robert P. Mayo Daniel M. Doyle Edward J. Schnuck William B. Walton Ronald W. Bailey James C. Hendershot Frank A. Jones, Jr. Lawrence K. Roos Vacant James P. McFarland Stephen F. Keating Patricia P. Douglas Mark H. Willes Clement A. Van Nice Harold W. Andersen Joseph H. Williams A. L. Feldman James G. Harlow, Jr. Durward B. Varner Roger Guffey Henry R. Czerwinski Irving A. Mathews Charles T. Beaird Gage Holland Alvin I. Thomas Marshall Boykin, III Ernest T. Baughman Robert H. Boykin Joseph F. Alibrandi Cornell C. Maier Joseph R. Vaughan Loran L. Stewart Sam Bennion Lloyd E. Cooney 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 John D. Johnson Wayne W. Martin William G. Evans Robert D. Hamilton Fredric W. Reed J. Z. Rowe Carl H. Moore Richard C. Dunn Angelo S. Carella A. Grant Holman James J. Curran * Additional offices of these Banks are located at Lewiston, Maine 04240; Windsor Locks, Connecticut 06096; Cranford, New Jersey 07016; Jericho, New York 11753; Columbus, Ohio 43216; Columbia, South Carolina 29210; Des Moines, Iowa 50306; Indianapolis, Indiana 46204; and Milwaukee, Wisconsin 53202. A 74 Federal Reserve Board Publications A vailable from Publications Services, D ivision of A d m inistrative Services, B o a rd 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 of the B oard of G overnors of the Federal R eserve System in a form collectible a t p a r in U .S. currency. (Stam ps and coupons are not accep ted .) The B ank C F ederal F u n c t io R eser v e n s. S y stem — P u r po ses and 1974. 125 pp. r e d it -C a r d a n d 102 p p . $ 1 .0 0 C each; heck -C r e d it P l a n s . 1968. 10 o r m o r e to o n e a d d r e s s , $.85 A nnual R eport each. F in a n c ia l C h a r a c t e r ist ic s o f C o n s u m e r s . 1966. 166 p p . $1.0 0 e a c h ; 10 o r m o r e S urvey R e s e r v e B u l l e t i n . M onthly. $20 .0 0 per year or $2.0 0 each in the United States, its posses sions, Canada, and M exico; 10 or more of same issue to one address, $ 18.00 per year or $1.75 each. Elsewhere, $24 .0 0 per year or $2.5 0 each. B a n k in g a n d M o n e t a r y S t a t ist ic s, 1914-1941. (Reprint of Part 1 only) 1976. 682 pp. $5.00. B a n k in g a n d M o n e t a r y S t a t i s t i c s , 1941-1970. 1976. 1,168 pp. $15.00. A n n u a l S t a t i s t i c a l D i g e s t , 1970-75. 1976. 339 pp. $4.00 per copy for each paid subscription to Fed eral Reserve Bulletin. All others, $ 5 .0 0 each. F e d e r a l R e s e r v e M o n t h l y C h a r t B o o k . Subscrip tion includes one issue of Historical Chart Book. $ 12.00 per year or $1.25 each in the United States, its possessions, Canada, and M exico; 10 or more of same issue to one address, $ 1 .0 0 each. E lse where, $ 1 5 .0 0 per year or $ 1 .5 0 each. H i s t o r i c a l C h a r t B o o k . Issued annually in Sept. Subscription to Monthly Chart Book includes one issue. $1.25 each in the United States, its posses sions, Canada, and M exico; 10 or more to one address, $ 1 .0 0 each. Elsewhere, $1.5 0 each. C a p i t a l M a r k e t D e v e l o p m e n t s . W eekly. $ 15.00 per year or $ .40 each in the United States, its posses sions, Canada, and M exico; 10 or more of same issue to one address, $13 .5 0 per year or $.35 each. Elsewhere, $20 .0 0 per year or $ .5 0 each. F ederal S e l e c t e d In t e r e s t S e r ie s $.40 C of each Exchange and h a r ts. in t h e W e e k ly . U n ite d r a tes— $ 1 5 .0 0 S ta te s, it s W 252 B pp. oard G p o s s e s s io n s , is s u e each. as o f of overnors the B T r e a su r y -F e d e r a l U .S . the of the oard of Gov G R eser ve S e c u r it ie s overnm ent M a r k e t . 1969. 48 p p . $.25 e a c h ; 10 o r m o r e t o o n e a d d r ess, $ .2 0 e a c h . Jo i n t T r e a s u r y - F e d e r a l R e s e r v e S t u d y o f t h e G o v e r n m e n t S e c u r it ie s M a r k e t : S t a f f S t u d i e s — P a r t 1. 1970. 86 p p . $ .50 each; 10 or more to one address, $ .4 0 each. P a r t 2. 1971. 153 p p . and P a r t 3. 1973. 131 p p . Each volum e $1.00; 10 or more to one address, $.85 each. O M P o l ic ie s a n d O p e r a t in g Proce S t a f f S t u d i e s . 1971. 218 p p . $2.00 e a c h ; 10 o r m o r e t o o n e a d d r e s s , $1.75 e a c h . R e a p p r a is a l o f t h e F e d e r a l R e s e r v e D is c o u n t pen arket du res— M e c h a n ism . 173 p p . Vol. Vol. 1. 1971. 276 p p . Vol. 2. 1971. 3. 1972. 220 p p . Each volum e $3.00; 10 or more to one address, $2.50 each. T he E c o n o m e t r ic s o f P r ic e D e t e r m in a t io n O c t o b e r 30-31, 1970, W a s h i n g t o n , 1972. 397 p p . C lo t h e d . $5.0 0 e a c h ; 10 o r to o n e a d d r e s s , $4 .5 0 e a c h . P a p e r e d . $4.0 0 10 o r m o r e t o o n e a d d r e s s , $3.60 e a c h . ference, F e d er a l R eser v e S ta ff S t u d L e n d in g B H F u n c t io n s y 10 of : W M ay s to Con D .C . m ore each; oderate C o n s t r u c t io n . o u s in g 1972. or m o r e to o n e a d d r e s s, the F ederal 1973. 271 p p . $3.5 0 a d d r e s s , $ 3 .0 0 e a c h . a n k s. to o n e June 30, 1976. $7.50. I n d u s t r i a l P r o d u c t i o n — 1971 E d i t i o n . 1972. 383 pp. $4.0 0 each; 10 or more to one address, $3.50 each. ern o r s, of each; F e d e r a l R ese r v e S y stem P u b l is h e d In t e r p r e t a t io n s Jo in t the Study 1968. 321 $.85 o r m o r e to o n e a d d r e s s, 487 p p . $4.00 $3.60 e a c h . $1.25. of each. R eport of 10 each; p er y e a r or s i o n s o f c e r t a in o t h e r s t a t u t e s a f f e c t i n g t h e F e d e r a l the $1.0 0 in T h e F e d e r a l R e s e r v e A c t , a s a m e n d e d th ro u g h D e c e m b e r 1971, w it h a n a p p e n d i x c o n t a i n i n g p r o v i of pp. F l u c t u a t io n s 10 o r m o r e o f s a m e t o o n e a d d r e s s , $ 13.50 p e r y e a r o r $.35 E l s e w h e r e , $20.00 p e r y e a r o r $ .5 0 e a c h . R e g u l a t io n s t o o n e a d d r e s s , $.85 e a c h . S u r v e y o f C h a n g e s in F a m il y F i n a n c e s . eekly C a n a d a , an d M e x ic o ; R ese r v e S y ste m . of each; 10 R eser ve or m ore 1975. 64 p p . $.50 $ .4 0 e a c h . I m p r o v i n g t h e M o n e t a r y A g g r e g a t e s (Report of the Advisory Com m ittee on Monetary Statistics). 1976. 43 pp. $ 1 .0 0 each; 10 or more to one address, $.85 each. A n n u a l P e r c e n t a g e R a t e T a b l e s (Truth in Lend ing— Regulation Z) Vol. I (Regular Transactions). 1969. 100 p p . Vol. II (Irregular Transactions). 1969. 116 p p . Each volum e $ 1 .0 0 , 10 or more of same volum e to one address, $.85 each. In t r o d u c t i o n each; 10 to F lo w of Fu n d s. or m o r e to o n e a d d r e ss, Federal Reserve Board Publications CO NSUM ER EDUCATION PAM PHLETS (Short pam phlets suitable fo r classroom use. M ultiple copies available without charge.) T h e E q u a l C r e d it O p p o r t u n it y A c t a n d . . . A g e T h e E q u a l C r e d it O p p o r t u n it y A c t a n d . . . D octo rs, L aw y ers, S m all R e t a il e r s , and O t h e r s W h o M a y P r o v id e In c id e n t a l C r e d it T h e E q u a l C r e d it O p p o r t u n it y A c t a n d . W om en F a ir C r e d it B il l in g If Y o u B o r r o w T o B U .S. W C uy S Truth hat in R e v is e d M e a s u r e s o f M a n u f a c t u r in g C a p a c it y U t i l i z a t i o n . 10/71. R e v i s i o n o f B a n k C r e d i t S e r i e s . 12/71. A s s e t s a n d L ia b il it ie s o f F o r e ig n B r a n c h e s o f U .S . B a n k s . 2/72. B a n k D e b it s , D e p o s it s , a n d D e p o s it T u r n o v e r — R e v i s e d S e r i e s . 7/72. Y i e l d s o n N e w l y I s s u e d C o r p o r a t e B o n d s . 9/72. R e c e n t A c t i v i t i e s o f F o r e i g n B r a n c h e s o f U .S . B a n k s . 10/72. R e v i s i o n o f C o n s u m e r C r e d i t S t a t i s t i c s . 10/72. O n e - B a n k H o l d i n g C o m p a n i e s B e f o r e t h e 1970 tock A urrency Y L e n d in g M eans to Y R ates (L im ited supply of m im eographed copies of full text available upon request fo r single copies.) H u l t ib a n k o l d in g Com p a n ie s : 1956-73, by Gregory E. Boczar. Apr. 1976. 27 pp. E x t e n d in g M e r g e r A n a l y s is B e y o n d t h e S in g l e M a r k e t F r a m e w o r k , b y S te p h e n A . R h o a d e s . M ay S easonal 1976. 25 l is h e d A A of M x— l t e r n a t iv e R. Fry. May 1976. 22 pp. E f f e c t s o f NOW A c c o u n t s o n of C o m m e r c ia l B anks M C urrently C o sts in E a r n in g s b y John D. arket Struc 1977. 26 pp. ew P r i n t e d in F u l l in t h e B u l l e t i n Staff E conom ic Studies shown in list below. REPRINTS (Except fo r Staff P apers, Staff E conom ic Studies, and som e leading articles, m ost of the articles reprinted do not exceed 12 p a g e s.) N of M a n u fa c tu r in g C a p a c ity , Staff Economic Study by Frank de Leeuw with Frank E. Hopkins and M ichael D. Sherman. 1 1/66. U .S . I n te r n a tio n a l T r a n s a c tio n s : 1960-67. 4/68. M easures of S e c u r it y C T rend s in 12/70. -C r e d it P l a n s C o n su m e r In s t a l m on at C om m er M Lo ent a n s. a n u f a c t u r in g 9/73. C orpora of M a r g in on C r e d it . 4/75. L o a n C o m m it m e n t s at S e l e c t e d L a r g e C o m m e r c i a l B a n k s . 4/75. R e c e n t T r e n d s i n F e d e r a l B u d g e t P o l i c y . 7/75. R e c e n t D e v e l o p m e n t s in I n t e r n a t i o n a l F i n a n c i a l M a r k e t s . 10/75. MINNIE: A S m a l l V e r s i o n o f t h e M I T - P E N N - S S R C E c o n o m e t r i c M o d e l , Staff Economic Study by Douglas Battenberg, Jared J. Enzler, and Arthur M . Havenner. 11/75. A n A s s e s s m e n t o f B a n k H o l d i n g C o m p a n ie s , Staff Economic Study by Robert J. Lawrence and Samuel H . Talley, 1/76. I n d u s t r i a l E l e c t r i c P o w e r U s e . 1/76. R e v i s i o n o f M o n e y S t o c k M e a s u r e s . 2/76. S urvey R e v ise d F in a n c e C o m p a n ie s , S e r ie s f o r M e m b e r B of ggregate R 1975. 3/76. ank D e p o s it s and 4/76. 1976 R e v i s i o n . 6/76. eser v es. In d u s t r i a l P r o d u c t i o n — F e d e r a l R e s e r v e O p e r a t i o n s in P a y m e n t M e c h a n i s m s : A S u m m a r y . 6/76. R e c e n t G r o w t h i n A c t i v i t i e s o f U .S . O f f i c e s o f B a n k s . 10/76. N e w E s t im a t e s o f C a p a c it y U t i l i z a t i o n : M a n u f a c t u r i n g a n d M a t e r i a l s . 11/76. U .S . I n t e r n a t i o n a l T r a n s a c t i o n s i n a R e c o v e r i n g E c o n o m y . 4/77. H o l d in g C o m p a n y F in a n c ia l D ank evelopm ents 1976. 4/77. C h a n g e s i n B a n k L e n d i n g P r a c t i c e s , 1976. 4/77. S u r v e y o f T erm s o f B a n k L e n d in g — N e w S e r ie s . 5/77. C hanges in m e r c ia l r e d it . heck S t a t is t ic a l S e r ie s ew in In d ex o nds. 9/73. an k s. T he S tructure B R e v is e d B S e r ie s fo r L a r g e t i o n s . 10/73. A A B E n e r g y S u p p l i e s a n d U s e s , Staff Economic b y C la y t o n G e h m a n . 12/73. In f l a t i o n a n d S t a g n a t i o n in M a j o r F o r e ig n I n d u s t r i a l C o u n t r i e s . 10/74. and 1974-75, P a u lu s . Sept. 1976. 49 pp. R e c e n t T r e n d s in L o c a l B a n k i n g M t u r e , by Samuel H. Talley. May C orporate Study Pub by Edward eth o d s, ffered U .S . pp. d ju st m e n t and N C ard a n d c ia l S u m m a r i e s O n l y P r i n t e d in t h e B u l l e t i n M O 5/73. Studies and papers on econom ic and financial subjects that are of general interest in the field of econom ic research. of R ecently on C r e d it -C row th 12/72. m endm ents. ie l d s ou STAFF ECONOM IC STUDIES T he G A 75 T im e B and T h e C o m m e r c ia l S a v in g s D e p o s it s O ct. - J a n . 1977. 6/77. P a p e r M a r k e t . 6 /77. a n k s, at Com A76 Federal Reserve Bulletin □ July 1977 Index to Statistical Tables References are to pages A-3 through A-69 although the prefix “ A” is omitted in this index ACCEPTANCES, bankers, 11, 25, 27 Agricultural loans, commercial banks, 18, 20-22 Assets and liabilities (See also Foreigners): Banks, by classes, 16, 17, 18, 20-23, 29 Domestic finance companies, 39 Federal Reserve Banks, 12 Nonfinancial corporations, current, 38 Automobiles: Consumer instalment credit, 42, 43 Production, 48, 49 BAN K credit proxy, 15 Bankers balances, 16, 18, 20, 21, 22 (See also Foreigners) Banks for cooperatives, 35 Bonds (See also U .S . Govt, securities): N ew issues, 36, 37 Yields, 3 Branch banks: A ssets and liabilities of foreign branches of U .S . banks, 62 Liabilities of U .S . banks to their foreign branches, 23 Business activity, 46 Business expenditures on new plant and equipment, 38 Business loans (See Commercial and industrial loans) CAPACITY utilization, 46, 47 Capital accounts: Banks, by classes, 16, 17, 19, 20 Federal Reserve Banks, 12 Central banks, 68 Certificates of deposit, 23, 27 Commercial and industrial loans: Commercial banks, 15, 18, 23, 26 W eekly reporting banks, 20, 21, 22, 23, 24 Commercial banks: Assets and liabilities, 3, 15-18, 20-23 Business loans, 26 Commercial and industrial loans, 24 Consumer loans held, by type, 42, 43 Loans sold outright, 23 Number, by classes, 16, 17, 19 Real estate mortgages held, by type of holder and property, 41 Commercial paper, 3, 24, 25, 27, 39 Condition statements (See A ssets and liabilities) Construction, 46, 50 Consumer instalment credit, 42, 43 Consumer prices, 46, 51 Consumption expenditures, 52, 53 Corporations: Profits, taxes, and dividends, 38 Sales, revenue, profits, and dividends of large manufacturing corporations, 69 Security issues, 36, 37, 65 Cost o f living (See Consumer prices) Credit unions, 29, 42, 43 Currency and coin, 5, 16, 18 Currency in circulation, 4, 14 Customer credit, stock market, 28 DEBITS to deposit accounts, 13 Debt (See specific types o f debt or securities) Demand deposits: Adjusted, commercial banks, 13, 15, 19 Banks, by classes, 16, 17, 19, 20-23 Ownership by individuals, partnerships, and corporations, 25 Subject to reserve requirements, 15 Turnover, 13 Deposits (See also specific types o f d ep o sits): Banks, by classes, 3, 16, 17, 19, 20-23, 29 Federal Reserve Banks, 4, 12 Subject to reserve requirements, 15 Discount rates at F.R. Banks (See Interest rates) Discounts and advances by F.R . Banks (See Loans) Dividends, corporate, 38, 69 EMPLOYMENT, 46, 47 Euro-dollars, 15, 27 FARM mortgage loans, 41 Farmers Home Administration, 41 Federal agency obligations, 4, 11, 12, 13, 34 Federal and Federally sponsored credit agencies, 35 Federal finance: Debt subject to statutory limitation and types and ownership o f gross debt, 32 Receipts and outlays, 30, 31 Treasury operating balance, 30 Federal Financing Bank, 35 Federal funds, 3, 6, 18, 20, 21, 22, 27, 30 Federal home loan banks, 35 Federal Home Loan Mortgage Corp., 35, 40, 41 Federal Housing Administration, 35, 40, 41 Federal intermediate credit banks, 35 Federal land banks, 35, 41 Federal National Mortgage A ssn., 35, 40, 41 Federal Reserve Banks: Condition statement, 12 Discount rates (See Interest rates) U .S. Govt, securities held, 4, 12, 13, 32, 33 Federal Reserve credit, 4, 5, 12, 13 Federal Reserve notes, 12 Federally sponsored credit agencies, 35 Finance companies: A ssets and liabilities, 39 Busines credit, 39 Loans, 20, 21, 22, 42, 43 Paper, 25, 27 Financial institutions, loans to, 18, 20-23 Float, 4 Flow of funds, 44, 45 Foreign: Currency operations, 12 Deposits in U .S . banks, 4, 12, 19, 20, 21, 22 Exchange rates, 68 Trade, 55 Foreigners: Claims on, 60, 61, 66, 67 Liabilities to, 23, 56-59, 64-67 GOLD: Certificates, 12 Stock, 4, 55 Government National Mortgage A ssn., 35, 40, 41 Gross national product, 52, 53 Federal Reserve Bulletin □ July 1977 HOUSING, new and existing units, 50 INCOME, personal and national, 46, 52, 53 Industrial production, 46, 48 Instalment loans, 42, 43 Insurance companies, 29, 32, 33, 41 Insured commercial banks, 17, 18, 19 Interbank deposits, 16, 17, 20, 21, 22 Interest rates: Bonds, 3 Business loans of banks, 26 Federal Reserve Banks, 3, 8 Foreign countries, 68 Money and capital market rates, 3, 27 Mortgages, 3, 40 Prime rate, commercial banks, 26 Time and savings deposits, maximum rates, 10 International capital transactions of the United States, 56-67 International organizations, 56-61, 65-67 Inventories, 52 Investment companies, issues and assets, 37 Investments (See also specific types o f investm ents): Banks, by classes, 16, 17, 18, 20, 21, 22, 29 Commercial banks, 3, 15, 16, 17, 18 Federal Reserve Banks, 12, 13 Life insurance companies, 29 Savings and loan assns., 29 LABOR force, 47 Life insurance companies (See Insurance companies) Loans (See also specific types o f loans): Banks, by classes, 16, 17, 18, 20-23, 29 Commercial banks, 3, 15-18, 20-23, 24, 26 Federal Reserve Banks, 3, 4, 5, 8, 12, 13 Insurance companies, 29, 41 Insured or guaranteed by U .S ., 40, 41 Savings and loan assns., 29 M ANUFACTURERS: Capacity utilization, 46, 47 Production, 46, 49 Margin requirements, 28 Member banks: Assets and liabilities, by classes, 16, 17, 18 Borrowings at Federal Reserve Banks, 5, 12 Number, by classes, 16, 17, 19 Reserve position, basic, 6 Reserve requirements, 9 Reserves and related items, 3, 4, 5, 15 Mining production, 49 Mobile home shipments, 50 Monetary aggregates, 3, 15 Money and capital market rates (See Interest rates) Money stock measures and com ponents, 3, 14 Mortgages (See Real estate loans) Mutual funds (See Investment companies) Mutual savings banks, 3, 10, 20-22, 29, 32, 33, 41 NATIONAL banks, 17, 19 National defense outlays, 31 National income, 52 Nonmember banks, 17, 18, 19 OPEN market transactions, 11 PERSONAL income, 53 Prices: Consumer and wholesale, 46, 51 Stock market, 28 Prime rate, commercial banks, 26 Production, 46, 48 Profits, corporate, 38, 69 REAL estate loans: Banks, by classes, 18, 20-23, 29, 41 Life insurance companies, 29 Mortgage terms, yields, and activity, 3, 40 Type of holder and property mortgaged, 41 Reserve position, basic, member banks, 6 Reserve requirements, member banks, 9 Reserves: Commercial banks, 16, 17, 18, 20, 21, 22 Federal Reserve Banks, 12 Member banks, 3, 4, 5, 15, 16, 18 U .S. reserve assets, 55 Residential mortgage loans, 40 Retail credit and retail sales, 42, 43, 46 SALES, revenue, profits, and dividends of large manufacturing corporations, 69 Saving: Flow of funds, 44, 45 National income accounts, 53 Savings and loan assns., 3, 10, 29, 33, 41, 44 Savings deposits (See Time deposits) Savings institutions, selected assets, 29 Securities (See also U .S . Govt, securities): Federal and Federally sponsored agencies, 35 Foreign transactions, 65 N ew issues, 36, 37 Prices, 28 Special Drawing Rights, 4, 12, 54, 55 State and local govts.: Deposits, 19, 20, 21, 22 Holdings of U .S . Govt, securities, 32, 33 N ew security issues, 36 Ownership of securities of, 18, 20, 21, 22, 29 Yields of securities, 3 State member banks, 17 Stock market, 28 Stocks (See also Securities): N ew issues, 36, 37 Prices, 28 TAX receipts, Federal, 31 Time deposits, 3, 10, 15, 16, 17, 19, 20, 21, 22, 23 Trade, foreign, 55 Treasury currency, Treasury cash, 4 Treasury deposits, 4, 12, 30 Treasury operating balance, 30 UNEM PLOYM ENT, 47 U .S. balance of payments, 54 U .S. Govt, balances: Commercial bank holdings, 19, 20, 21, 22 Member bank holdings, 15 Treasury deposits at Reserve Banks, 4, 12, 30 U .S. Govt, securities: Bank holdings, 16, 17, 18, 20, 21, 22, 29, 32, 33 Dealer transactions, positions, and financing, 34 Federal Reserve Bank holdings, 4, 12, 13, 32, 33 Foreign and international holdings and transactions, 12, 32, 64 Open market transactions, 11 Outstanding, by type of security, 32, 33 Ownership, 32, 33 Rates in money and capital markets, 27 Yields, 3 Utilities, production, 49 VETERANS Administration, 40. 41 WEEKLY reporting banks, 20-24 Wholesale prices, 46 YIELDS (See Interest rates) A ll A 78 The Federal Reserve System Boundaries of Federal Reserve Districts and Their Branch Territories LEGEND — Boundaries of Federal Reserve Districts ----- Boundaries of Federal Reserve Branch Territories Q Board of Governors of the Federal Reserve System ® Federal Reserve Bank Cities • Federal Reserve Branch Cities Federal Reserve Bank Facility Guide to Tabular Presentation and Statistical Releases GUIDE TO TABULAR PRESENTATION S ym bols p r rp e c n .e.c. Rp’s IPC’s and A b b r e v ia t io n s Preliminary R evised R evised preliminary Estimated Corrected N ot elsew here classified Repurchase agreements Individuals, partnerships, and corporations S M S A ’s REIT’s * Standard metropolitan statistical areas Real estate investm ent trusts Amounts insignificant in terms of the partic ular unit ( e .g ., less than 5 0 0 ,0 0 0 when the unit is m illions) (1) Zero, (2) no figure to be expected, or (3) figure delayed or, (4) no change (when figures are expected in percentages). G e n e r a l In f o r m a t io n M inus signs are used to indicate (1) a decrease, (2) a negative figure, or (3) an outflow. “ U .S . G ovt, securities” may include guaranteed issues of U .S . G ovt, 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 o f rounding. STATISTICAL RELEASES L is t P u b l i s h e d S e m i a n n u a l l y , w it h L a t e st B u l l e t in R e fe r e n c e Anticipated schedule of release dates for individual releases ............................................... Issue P age D ec. 1976 A -82
@FedFRASER