Full text of Federal Reserve Bulletin : October 1977
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OCTOBER 1977
FEDERAL RESERVE
BULLETIN
Consumption and Fixed Investment in Economic Recovery Abroad
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NUMBER 10 • VOLUME 63 • OCTOBER 1977
FEDERAL RESERVE
BULLETIN
Board of Governors of the Federal Reserve System
Washington, D.C.
PUBLICATIONS C O M M I T T E E
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 BULLETIN is issued monthly under the direction of the staff publications committee. This
committee is responsible for opinions expressed except in official statements and signed articles. Direction for
the art work is provided by Mack R. Rowe. Editorial support is furnished by the Economic Editing Unit headed
by Elizabeth B. Sette.
Table of Contents
871
Monetary Policy of the Committee on
Banking, Finance and Urban Affairs,
U.S. House of Representatives, September 27, 1977.
CONSUMPTION A N D
FIXED INVESTMENT IN
THE ECONOMIC RECOVERY A B R O A D
In most of the major foreign industrial countries, economic activity is
recovering slowly and sluggishly from
the 1 9 7 4 - 7 5 recession. Two important
factors contributing to the weak recovery abroad have been the behavior
of personal consumption and fixed
nonresidential investment expenditures.
882
889
Philip E. Coldwell, Member of the
Board of Governors, testifies on the
Safe Banking Act of 1977, stating that
some of the provisions are constructive and necessary but others must
undergo extensive study to establish
their necessity and desirability, before
the Subcommittee on Financial Institutions Supervision, Regulation and
Insurance of the Committee on Banking, Finance and Urban Affairs, U.S.
House of Representatives, September
28, 1977.
898
Vice Chairman Gardner expresses
the Board's support of many of the
consumer safeguards under the proposed " E l e c t r o n i c Fund Transfer
Consumer Protection A c t " but urges
further study of the proposed act's
possible anticompetitive effects and
increased costs to the consumer,
before the Subcommittee on Consumer Affairs of the Committee on
Banking, Housing and Urban Affairs,
U.S. Senate, October 4, 1977.
902
Governor Coldwell describes the
scope of participation of the Federal
Reserve System in the Nation's payments mechanism and how that participation serves the public interest, at
the same time stressing the effects on
the payments mechanism of the erosion of bank membership in the
System, before the Committee on
Banking, Housing and Urban Affairs,
U.S. Senate, October 11, 1977.
S T A T E M E N T S T O CONGRESS
Stephen S. Gardner, Vice Chairman
of the Board of Governors, offers the
Board's support for many of the
consumer safeguards for electronic
fund transfer systems as outlined in a
bill under consideration by the Subcommittee on Consumer Affairs of
the Committee on Banking, Finance
and Urban Affairs, U.S. House of
Representatives, September 22, 1977.
886
891
Vice Chairman Gardner presents
the views of the Board of Governors
on the need for additional statutory
and regulatory safeguards on oversight and regulation of the banking
industry, before the Committee on
Banking, Housing and Urban Affairs,
U.S. Senate, September 26, 1977.
J. Charles Partee, Member of the
Board of Governors, presents an
update of recent monetary developments (supplementing Chairman
Burns' statement on July 29, 1977),
before the Subcommittee on Domestic
909
inition pf adverse action that requires
notification to the consumer that an
application for credit has been refused
and to Regulation Z (Truth in Lending) relating to billing for cash-advance check transactions.
R E C O R D OF P O L I C Y A C T I O N S OF T H E
FEDERAL OPEN MARKET COMMITTEE
In the meeting held on August 16,
1977, the Committee decided that
rates of growth in M-\ and M-2 over
the August-September period at annual rates within ranges of 0 to 5 per
cent and 3 to 8 per cent, respectively,
would be appropriate. The weeklyaverage Federal funds rate likely to be
associated with these ranges for the
monetary aggregates would be about
6 per cent. The Committee agreed that
it could be modified within a range of
5% to 6V4 per cent, depending on the
growth rate of the aggregates.
920
LAW
Two State banks were admitted to
membership in the Federal Reserve
System.
964
INDUSTRIAL PRODUCTION
Output increased by an estimated
0.4 per cent in September.
DEPARTMENT
Amendments to Regulations H and
Y and various rules and bank holding
company and bank merger orders.
962
Revision of Board's series on bank
debits and deposit turnover.
ANNOUNCEMENTS
Amendments to Regulation H
(Membership of State Banks in the
Federal Reserve System) and Regulation Y (Bank Holding Companies)
relative to operations of certain clearing agencies for stock market transactions. (See Law Department.)
The Board acted to encourage bank
holding companies that are required to
carry out divestitures by the end of
1980 under Regulation Y to submit
plans for doing so no later than June
30, 1978.
Proposed for public comment are
amendments to Regulation B (Equal
Credit Opportunity) affecting the def-
A1
F I N A N C I A L A N D BUSINESS STATISTICS
A3 Domestic Financial Statistics
A46 Domestic Nonfmancial Statistics
A54 International Statistics
A69
GUIDE
TO T A B U L A R
PRESENTATION
A N D STATISTICAL RELEASES
A70
B O A R D OF G O V E R N O R S A N D S T A F F
A72
OPEN MARKET COMMITTEE A N D
STAFF; FEDERAL ADVISORY COUNCIL
A73
F E D E R A L RESERVE B A N K S ,
BRANCHES, A N D OFFICES
A74
F E D E R A L RESERVE B O A R D
PUBLICATIONS
A76
I N D E X TO STATISTICAL TABLES
A78
M A P OF F E D E R A L R E S E R V E S Y S T E M
Consumption and Fixed Investment
in the Economic Recovery Abroad
This article was prepared by David H. Howard
and Raymond Lubitz of the World Payments
and Economic Activity Section, Division of
International Finance.
Economic activity in most of the major foreign
industrial countries is recovering from the
1974-75 recession, although the recovery has
been hesitant and somewhat sluggish. Unemployment rates are still high—and indeed are
rising in some countries—and in all but a few
of the major countries industrial production
remains below its pre-recession peaks. In addition, rates of wage and price inflation remain
high.
Contributing to the lack of a strong and
sustained economic recovery abroad has been
the behavior of personal consumption and of
fixed nonresidential investment expenditures.
In this article, only these two major components of aggregate demand will be discussed.
Personal consumption is important not only
because it is the largest component of aggregate demand but also because personal saving
rates have been exceptionally high in recent
years, thus dampening consumption expenditures during the present recovery period.
Fixed nonresidential investment has been
lagging more than it had in some past cycles.
Investment expenditures typically are more
volatile than consumption expenditures and
play a key role in business-cycle behavior.
Moreover, since investment creates future
productive capacity, the rate of investment in
an economy has an importance beyond its role
as a component of aggregate demand.
PERSONAL CONSUMPTION
Recent rates of growth in real personal consumption in the major foreign industrial countries are shown in Table 1. Of these countries,
only Canada, which is not a net oil importer.
1. Real personal consumption and disposable income
Ratio scale, Q1 1973=100
1974
1975
1977
1973
1974
1975
1976
1973
Data from national sources. Japanese personal disposable income data seasonally adjusted by F.R. staff.
1976
1977
A872
1.
Federal Reserve Bulletin • October 1976
Rates of growth of real personal consumption
Percentage change from previous perioa, seasonally adjusted annual rate
Country
Canada
France
Germany
Italy
Japan
United Kingdom
Annual
average,
l%0-72
4.9
'5.4
4.9
5.6
8.9
2.7
1975
1973
6.8
5.5
2.5
5.9
8.3
4.5
1974
5.0
2.2
0.3
2.5
1.4
-1.1
1975
6.7
3.1
2.5
-1.4
6.1
-0.9
1976
1977
1976
6.1
4.9
3.6
3.2
4.4
0.4
HI
H2
5.1
2.8
2.4
-3.0
6.7
-0.6
10.6
9.0
3.5
5.8
4.7
-5.3
HI
H2
6.4
2.3
4.2
1.6
5.3
2.8
6.3
3.5
2.7
4.1
2.3
1.7
HI
1.1
3.0
2-8.1
3.7
-3.9
M%2-72.
^Based on change between the fourth quarter of 1976 and the first quarter of 1977.
NOTE.—Data f r o m national sources; the Italian data were seasonally adjusted by F . R . staff. The French annual and semiannual data
are not necessarily consistent due to revisions in the former series not yet reflected in the latter.
did not experience a sharp cutback in consumption growth in 1974 following the increase in the price of oil. Although consumption has recovered somewhat since 1974 in most
of the countries—the United Kingdom being the
exception—the latest data available indicate
that some weakening occurred in the first half
of this year.
To a large extent, movements in personal
consumption are determined by movements in
personal disposable income, and the pattern in
consumption, therefore, can be attributed in
part to the depressing effect of the oil-price
increase on real incomes. However, households determine how much of their disposable
income is spent on consumption and how
much is saved; that is, they determine the
personal saving rate—the ratio of personal
saving to personal disposable income. Thus,
along with movements in personal disposable
income, factors that influence the saving rate
are important for determining the level of
consumption expenditures.
Indexes of real personal consumption and
real personal disposable income for Canada,
Germany, Japan, and the United Kingdom are
plotted in Chart 1. Two features stand out: the
strong relationship between movements in incom,e and consumption, and the fact that consumption appears to move more smoothly
than income over time—^perhaps because the
household sector takes into account some
notion of its normal income when making
consumption plans. For example, in the first
2. Personal saving, inflation, and unemployment
A n n u a l rate, per cent
FRANCE
GERMANY
20
10
'68
72
76
The annual inflation rate is measured as fourth quarter over
fourth quarter of previous year.
Consumption and Fixed Investment Abroad
quarter of 1974 Japanese consumers did not
adjust their consumption by as much as their
income fell because at least some of the income decline may have been viewed as temporary.
The four countries have experienced differing
consumption patterns. I n Canada, where activity was less affected by the oil-price increase, consumption has increased rather
steadily since 1973, broadly in line with disposable income. I n Germany real consumption and disposable income were flat in 1973
after the first quarter, in part because of
increases in personal income taxes early in the
year. Although income began to recover in
1974, consumption did not resume its growth
until 1975. I n the first quarter of 1974 following
the oil-price increase, Japan experienced a
sharp drop i n disposable income and
consumption—attributable to production cutbacks and to a sharp increase in prices—but
both rebounded quickly. I n sharp contrast to
the experience in these three countries, consumption in the United Kingdom has been
more or less flat or even declining since 1973,
although the decline is exaggerated by the high
level of consumption in the first quarter of
1973 in anticipation of the introduction of a
sales tax. Personal disposable income in the
United Kingdom also has been flat or declining,
except for a temporary bulge in late 1974 and
early 1975.
873
The course of personal income taxation has
had an important influence on personal disposable income and hence on personal consumption. For example, in the United Kingdom tax rebates were mainly responsible for
the increase in disposable income in the third
quarter of 1976. I n Germany the reduction in
income tax rates and the increase in personal
exemptions that became effective at the beginning of 1975 contributed to an upturn in
personal disposable income and thus affected
consumption.
Deliberate tax changes are not the only
channel through which taxes influence personal disposable income, however. Inflation
raises the money value of income, and if the
tax system is progressive but is not indexed to
take into account the effects of inflation, effective tax rates will rise. I n Canada the income tax
system has been indexed since January 1, 1974,
but in the other countries discussed in this
article, inflation's tax-raising effect has inhibited
growth in real personal disposable incomes
and i n personal consumption. I n some
countries—^for example, Japan and France—
this effect has been at least partially offset
from time to time by tax reductions. I n addition, government transfer payments have
helped to sustain personal incomes and consumption in the face of high unemployment.
The faster rise of income compared with
consumption shown in Chart 1 indicates a rise
Annual rate, per cent
JAPAN
UNITED KINGDOM
A
20
10
1
Data from national sources. International
comparable with later data.
1
t
1
1
1
t
1
1
1
Financial Statistics, and OECD. The Italian personal saving rate data before 1974 are not strictly
A874
Federal Reserve Bulletin • October 1976
in the personal saving rate. In all four countries,
personal saving rates have increased since the
first quarter of 1973. The increase, partly
reversed in recent quarters, remains substantial in Canada, Japan, and the United Kingdom, although, again, comparison with the first
quarter of 1973 is somewhat misleading for the
United Kingdom.
One possible explanation for the increase in
saving rates may be the increase in the rates of
inflation experienced during recent years. Inflation can be expected to increase the rate of
saving in two important ways. First, it reduces
the real value of the household sector's financial assets, such as savings deposits, that are
fixed in money value. I n order to restore the
real value of their holdings of these assets,
consumers cut down on their consumptionexpenditure plans and increase their saving.
Second, it has been argued that inflation
creates a feeling of uncertainty and pessimism
about the future that leads consumers to save a
greater proportion of their income. On the
other hand, by increasing the expected rate of
return on real assets—including stocks of consumer goods—relative to that on assets fixed
in money value, expectations of inflation actually might encourage consumption expenditures. I n any event, the data from the six major
foreign industrial countries shown in Chart 2
are broadly consistent with a net positive
relationship between inflation and personal
saving rates.
Theoretical arguments suggest that unemployment can have either a positive or a
negative effect on the personal saving rate.
Since periods of unemployment usually represent temporary shortfalls in income, the unemployed can be expected to finance some
consumption out of past savings accumulated
for just such a situation; thus the aggregate saving rate would decline. However, unemployment, and particularly increasing unemployment, can be expected to create uncertainty
about the future and to increase precautionary saving on the part of those still holding
jobs, thereby raising the aggregate saving rate.
The data are consistent with the view that the
latter effect has been dominant in recent
years. Thus, Chart 2 points out the increase in
personal saving rates during the 1970's in all
six countries, and the apparent relationship
between the increases in saving rates and the
increases in the rates of inflation and unemployment.
Another factor that influences the household sector's consumption is its net wealth. As
already mentioned, inflation affects one part of
household wealth by eroding the real value of
(net) assets fixed in nominal value. Weakness in
equity values—another important component of
household wealth—also has tended to discourage consumption. The high nominal rates
of interest prevailing in recent years also may
have contributed to the increased personal
saving rates, by depressing the value of bonds
held by the household sector and perhaps by
increasing the expected real rate of return on
saving. However, the latter effect cannot readily be detected because of the difficulties involved in measuring inflation expectations and
thus the real rate of return.
Finally, there are special factors in each
country that have influenced the behavior of
personal consumption expenditures. I n the
United Kingdom, for example, controls on
wages since the third quarter of 1975 probably
have dampened the growth of personal disposable income. I n Italy the wage-indexation
scheme (the scala mobile) probably has kept
nominal personal income higher than it would
otherwise have been and may have also
boosted real personal income.
I n summary, personal consumption expenditures in the major foreign industrial countries have been influenced by the behavior of
personal disposable income and probably by
the relatively high rates of inflation and unemployment that have been experienced abroad.
These last two factors may have contributed to
the exceptionally high personal saving rates
that have persisted during the 1970's. These
high saving rates have tended to restrain personal consumption demand and the economic
recovery abroad. The combination of exceptionally high rates of personal saving, inflation, and unemployment has made the present
cycle unique and has complicated greatly the
current recovery process as compared with
that in previous postwar cycles.
Consumption and Fixed Investment Abroad
2.
875
Real gross fixed investment
Annual data, percentage change from preceding year.
Category, by country
Annual
average,
l%0-73
1974
1975
1976
Canada-^Total
Residential construction
Nonresidential fixed investment
Nonresidential construction
Machinery and equipment
5.8
8.1
5.6
4.3
7.7
5.5
-0.4
7.4
7.6
8.2
3.9
-6.7
7.1
13.5
3.4
0.8
17.6
-3.6
-6.4
-0.4
France—Total
Residential construction
Nonresidential fixed investment
n.a.
n.a.
n.a.
0.9
5.0
-0.7
-3.4
-3.8
-3.2
4.5
1.45.8^
Germany Total
Residential construction
Nonresidential fixed investment
Nonresidential construction
Machinery and equipment
4.5
3.4
5.2
4.2
5.5
-9.9
-16.8
-7.0
-3.2
-10.2
-4.2
-10.4
-1.8
-4.2
0.4
5.1
6.7
4.5
1.4
7.3
Italy—Total
Residential construction
Nonresidential fixed investment
Nonresidential construction
Machinery and equipment
5.5
n.a.
n.a.
n.a.
6.4
3.5
2.7
3.9
-0.2
6.6
-13.0
-10.9
-13.8
-5.6
-18.9
2.3
-1.2
3.7
-1.1
7.2
Japan—Total
Residential construction (private)
Nonresidential fixed investment (private)
Public investment
14.1
14.9
14.5
13.8
-10.2
-12.8
-10.8
-6.7
-2.8
7.2
-13.1
11.1
4.5
10.4
2.1
4.3
4.5
4.0
4.6
4.1
5.0
-1.9
-3.2
-1.6
-1.1
-1.9
-1.2
6.8
-2.8
4.3
-7.5
-4.1
-I.O
-4.8
-8.8
-1.8
United Kingdom—Total
Residential construction
Nonresidential fixed investment
Nonresidential construction
Machinery and equipment
NOTE.—Data from national sources and OECD national accounts statistics. Canada—total
fixed investment and nonresidential fixed investment are public and private, other items,
private (including government enterprises); France—^public and private; Germany—all items
are public and private except residential construction, private only; Italy—public and private;
Japan—total, public and private, others as indicated, with government enterprises in public,
data prior to 1970 are partially estimated by F.R. staff; United Kingdom—public and private,
n.a.—Not available.
®Estimated.
FIXED INVESTMENT
Total real fixed investment generally increased
in the major industrial countries in 1976 except
for the United Kingdom, where it declined for
a third consecutive year, and Canada, where it
was flat after having risen for 2 years (Table
2). Nonresidential fixed investment—the focus
of this discussion—has in general followed a
similar path. The pace of recovery has been
slower than in previous cyclical upswings, and
the 1976 rate of nonresidential fixed investment (public and private) was still generally
below its 1973 levels—by 4.6 per cent in
Germany, 7.2 per cent in Italy, and 9.0 per
cent in the United Kingdom. Private investment in Japan in 1976 was 20.1 per cent below
Its 1973 level; in France total nonresidential
investment in 1976 was 1.7 per cent higher
than in 1973 because public investment (excluding nationalized enterprises) rose over 6
per cent, more than offsetting a 1.4 per cent
decline in private investment (including nationalized enterprises).
Fixed investment rose in the first half of
1977 in Japan, Germany, Italy, and Canada
and continued to decline in the United Kingdom. The annual rate of increase (1977 H I
compared with 1976 H2) of total fixed investment in Germany was nearly 4 per cent and
was more than 7 per cent in Italy. I n Japan
private nonresidential fixed investment rose
5V2 per cent and in Canada total nonresidential
investment increased by more than 7 per cent.
In the United Kingdom total fixed investment
fell at an annual rate of more than 13 per cent.
A striking indicator of investment weakness
has been the widespread fall since the early
A876
Federal Reserve Bulletin • October 1976
3. Nonresidential fixed investment as per cent of GNP
Per cent
Per cent
UNITED K I N G D O M
Current prices
JAPAN
i
i 16
Constant prices
t
i-.a^a
.J-
.J
t
1
f
r
-t
ITALY
16
Data from national sources, OECD national accounts, and F.R.
staff estimates. Gross domestic product (GDP) for Italy and
United Kingdom. Data for Italy before 1970 are not strictly
comparable w i t h later data. Data f o r Japan f o r 1976 are
partially estimated. Constant price series are on 1970 base except 1971 for Canada.
1970's in the ratio of nonresidential fixed investment to gross national product, as shown
in Chart 3. This ratio (measured in constant
prices) fell from a peak of more than 29 per
cent in 1973 in Japan to about 24 per cent in
1976—the most prolonged decline in this ratio
since 1960; the German ratio (also in constant
prices) dropped from 18.5 per cent in 1972 to
about 16 per cent in 1976.
The 1976 investment ratios in Japan and
Germany also are weak in terms of a longerterm comparison—the 1965-73 average level
for the ratio was 26.3 per cent in Japan and
17.8 per cent in Germany. The Italian and
British ratios also have been weak recently;
the French investment ratios (not shown in
Chart 3 because of a lack of data prior to 1970
consistent with more recent data) have displayed less weakness.
Movements in the investment ratio differ
when measured in constant and current prices.
Because the price of capital goods generally
has fallen relative to the GNP deflator—since
the price of services, included in GNP, has risen
relative to the price of manufactured goodsthe investment ratio expressed in current
prices has fallen relative to that in constant
prices. This pattern is most clearly evident in
Germany and Japan.
A fall in the investment ratio is a normal
concomitant of weak economic activity and in
itself, unless prolonged, is not a matter of
serious concern. I n the normal course of economic growth, capital accumulation will rise
above and fall below trend rates, and shortfalls
of capital in periods of recession tend to be
made up during upswings. However, lower
investment will even in the short run reduce
aggregate demand, and a permanently lowered
investment ratio will lead in the longer run to
slower growth of the capital stock. I f the rate
of capital accumulation falls and if capitallabor ratios do not decline, the growth of
employment will also slow. I f labor markets
adjusted smoothly, real wages would fall, encouraging more labor-intensive methods of
production and allowing a greater growth of
labor demand for a given growth of capital.
Consumption and Fixed Investment Abroad
However, such real wage adjustments, even
relative to productivity growth stemming from
technological advances, may occur only with
difficulty.
I N V E S T M E N T
D E M A N D
The influences acting on investment behavior
reflect both the incentives to invest and the
cost and availability of funds for investment.
On the investment-demand side one might
categorize the forces at work as follows: (1)
the rate of return or profitability of investment; (2) higher capital requirements; (3) the
effects of the degree of capacity utilization;
and (4) the uncertainty pertaining to the rate of
return.
PROFITABILITY
Although reliable data on rates of profit on
capital are not available for most foreign countries, there are some indications from data on
profit shares and labor costs that there was a
general cyclical decline in profitability during
the 1970's. This decline was slightly reversed
in 1976 although the data on shares suggest
that the level of profitability prevailing in 1970
has not been regained. These share data must
be used cautiously because, among other reasons, movements in profit shares do not translate directly into movements in profit rates
unless capital-output ratios are constant.
Also, recorded data may recently have
overstated profitability because of the failure
to adequately account for inflation. Under
accounting procedures used by many firms,
the increase in the value of inventories may be
improperly counted as profits. Moreover, depreciation allowances often are based on historical rather than replacement costs of plant
and equipment. Since corporate taxes are
often based on accounting profits uncorrected
for inflation, real after-tax profits may be
reduced by inflation. Also, if firms do not
adequately account for inflation, dividend
payouts may be higher than desired if a truer
profit picture were available. Consequently,
877
real resources available for investment may be
reduced by the interaction of inflation and
generally used accounting procedures.
With these cautions in mind, there does seem
to be a clear pattern for all the major industrial
economies—except Canada—of falling shares of
profits (or property income) and rising shares of
labor income during 1970-75, with a reversal in
most cases in 1976. Thus, in Germany gross
property income fell as a share of gross value
added in the private-enterprise sector from
more than 32 per cent in 1970 to 29 per cent in
1975; in the United Kingdom the gross profit
share in the corporate sector fell from 20 per
cent in 1970 to nearly 14 per cent in 1975. I n
both countries, data for shares in the corporate sector are not available for 1976, but other
data from the national accounts indicate a
reversal of the trend in 1976. I n France gross
operating surplus fell as a share of corporate
value added from nearly 29 per cent in 1970 to
24 per cent in 1975 before rising to 25 per cent
in 1976. Only aggregate national accounts data
are available for Japan and Italy, but they
indicate a similar pattern: in Japan income of
private corporations plus interest payments
fell as a share of national income from more
than 20 per cent in 1970 to more than 15 per
cent in 1975 before rising in the first quarter of
1976. I n Italy net property and business income fell from more than 40 per cent of
national income in 1970 to 30 per cent in 1975.
A further indication of a shift toward wages
from profits comes from data on unit labor
costs and manufacturing selling prices. During
1970-75 unit labor costs rose faster than selling prices in all of the major industrial countries except Canada. I n 1976 unit labor costs
for manufacturing either fell or rose less rapidly
than selling prices.
A reduction in the profitability of investment resulting from higher real wages will
lower the desired amount of p r o d u c t i v e
capacity (determined by labor and other inputs as well as capital). However, raising the
cost of labor relative to capital will increase
the capital-intensity of production and thereby
may lead to higher investment levels. The
direction of the effect on investment of an
A878
Federal Reserve Bulletin • October 1976
increase in the real wage is thus ambiguous.
However, even if the effect of an increase in
real wages on investment is positive, it will be
associated with lower levels of employment.
HIGHER CAPITAL
REQUIREMENTS
There has been a good deal of discussion in the
past few years suggesting that the industrial
economies face higher capital requirements—
that is, more capital is needed to produce a
given amount of final output. These higher
capital requirements arise inter alia from environmental regulations requiring capital
spending on pollution control and from the
increase in energy prices, causing a shift toward more capital-intensive technology. A t
the same t i m e , the p o l i t i c a l objective of
greater energy self-sufficiency will require
more investment in the capital-intensive energy sector. Also, the sharp shift in relative
factor prices, it is conjectured, has increased
the rate of obsolescence in energy-intensive
industries and therefore has raised the rate of
capital scrapping.
Little quantitative work on this question has
been done outside the United States. The results of a study, published in the 1976 Annual
Report of the Council of Economic Advisers,
tentatively suggest that if "the legal, technological and energy-related factors that raise
capital requirements" are allowed for, the ratio
of business fixed investment to GNP over the
period 1971-80 would rise from the 9.9 per
cent—that would otherwise have been needed
to meet a specified full employment output in
1980—to 11.4 per cent. Higher capital requirements, defined as greater capital needs per unit
of output, do not imply that investment ratios
will rise in proportion to the greater requirements. Since higher capital requirements imply
higher capital-output ratios and a shift in the
demand for capital, some substitution toward
less capital-intensive techniques and output
might take place.
CAPACITY
UTILIZATION
The factor that is perhaps most frequently
advanced to explain the weakness of invest-
4. Nonresidential fixed investment and capacity utilization
Per cent
Percentage change
CANADA
Utilization
j ^ ^ ^ A n n u a l rate
^ ^
^ ^ 9 6 0 - 7 0 avg.
Investment^
r
t
f
1
-
1972
t
.i
-i-r-"-''-!
-r.
1974
1976
1972
Capacity utilization index f r o m Wharton Economic Forecasting Associates; Germany, Japan, France, and Canada—private
nonresidential f i x e d investment w h i c h includes government
1974
1976
1972
1974
1976
enterprises except for Japan; Italy and United Kingdom—public
and private,
Consumption and Fixed Investment Abroad
ment is the historically low levels of capacity
utilization. Capacity utilization indexes have
been subject to a great deal of criticism, and
the various methods used to construct
them—statistical production functions, the fitting of trends to output peaks, or survey
data—all have drawbacks. I n addition, as
noted, factor-price increases, especially relative increases in the price of energy, may have
reduced capacity by accelerating capital scrapping. Thus capacity indexes may overstate
the true margin of excess capacity. Indeed,
as pointed out in the "McCracken Report" to
the Organization for Economic Cooperation
and Development (OECD), Towards Full Employment and Price Stability, there seems to be
a growing divergence between "judgmental"
and "nonjudgmental" estimates of capacity;
the former, presumably reflecting business
estimates of increased obsolescence, shows
progressively smaller estimates relative to the
latter. However, these data should be treated
with caution since judgmental estimates of capacity in general tend to fall more than nonjudgmental estimates during recessions, and
the depressed economic activity of the past
few years may have produced this result.
Despite the caution one must exercise in
using these indexes, there is still a similarity in
the movements of different capacity utilization
indexes in the major foreign OECD countries.
Investment might be expected to respond to
capacity pressures with a lag, but in Chart 4,
which contains annual data, investment behavior
does rather closely parallel the movement in
capacity utilization as measured by the index
published by Wharton Economic Forecasting Associates. Thus, in 1975 nonresidential
fixed investment fell in all the major foreign industrial economies while capacity utilization
also fell that year (and generally in 1974 as
well); in 1976 nonresidential fixed investment
rose in Japan, France, Germany, and Italy mirroring the rise in utilization. Utilization rates
have been historically low, as shown in Chart
4. This reflects the over-all weakness of recovery; only in Germany and Canada did
industrial production exceed previous peaks
in mid-1977 and in those countries by less
than 2 per cent.
879
UNCERTAINTY
Another consideration often cited to explain
investment weakness is a rise in the degree of
uncertainty, although this influence is not easily measured. Greater uncertainty reflects
several factors. First, because of shocks to the
economic system since 1973, there is a lack of
confidence in the sustainability and strength of
economic growth. For example, a recent survey of German firms indicated that future
growth is expected to be significantly lower
than previous German experience. Second,
there may be uncertainty over future relative
factor prices—particularly for energy and
labor—that will affect the expected profitability of different production techniques.
Third, the rate of inflation may—as in the
case of consumption—be acting to reduce
investment, although it conventionally has
been thought that inflation would stimulate the
acquisition of real assets. Higher rates of
inflation might increase the variance of expected returns from investment if the variance
of selling prices and costs is increased; in turn
this may lower investment. Finally, economic
policy may be more restrictive because of high
inflation and will probably be more unpredictable in an environment of stagnation and
inflation.
FINANCING
I N V E S T M E N T
The forces continuing to depress investment
do not seem in general to arise from financing difficulties, although such difficulties
may have existed earlier and some financial
constraints on investment may still be significant in a few countries.
Internal funds available for investment depend in significant part on the profits earned
by business; the total volume of profits is
related to profitability and the level of economic activity. I n 1975 a low level of total
profits may have inhibited investment, but
profitability and economic activity generally
recovered in 1976, and profits have recovered
as well. Similarly, businesses faced severe
liquidity problems in 1974, but since then,
according to the OECD, balance-sheet restruc-
A880
Federal Reserve Bulletin • October 1976
turing appears to have taken place. OECD calculations {Economic Outlook, July 1977) indicate that liquidity positions have improved
since 1974. For example, there have been substantial increases i n the ratio of internal
funds to total capital outlays in Japan, Germany, France, and the United Kingdom; reductions in the ratio of short-term debt to total
debt in Japan, Germany, and the United Kingdom; and increases in the ratio of liquid assets
to short-term debt in Germany, France, and
the United Kingdom.
The cost of capital, as indicated by nominal
interest rates and dividend-price ratios for
equities, has declined since 1974 in most of the
major countries, reinforcing the view that
financing is not a major constraint on capital
formation. Although nominal long-term interest rates are still quite high, they have fallen in
Japan and Germany since 1974, in Canada
since 1975, and in the United Kingdom since
1976. The German rate declined from more
than 10 per cent in 1974 to less than 6 per
cent currently. I n France rates fell from 1974
to early last year but have risen since; in Italy
long-term rates climbed from 1973 until mid1977. Since the decline in nominal interest
rates in part reflects a decline in inflation
expectations, expected real rates of interest
may not have fallen. But, expected real rates do
not appear high given inflation expectations
and mid-1977 nominal interest rates in the 6 to
8 per cent range in Germany, Japan, and
Canada, and 10 to 14 per cent range in France,
the United Kingdom, and Italy. However,
high nominal interest rates—even if expected
real rates are low—may discourage investment by imposing cash-flow problems in the
early stages of an investment project, before
returns are forthcoming.
The cost of equity capital, as measured by
available dividend-price ratios, also has declined since 1974. These ratios had peaked at
the end of 1974 in Canada, Japan, Germany,
France, and the United Kingdom, and in mid1977 were below those levels, although in
Canada, Germany, and France the ratios have
risen since mid-1976. With the exception of
Japan, the ratios are still higher than pre-recession levels. These movements i n the
dividend-price ratio to a large extent have
reflected stock market movements. I n Italy,
according to survey data, the dividend-price
ratio rose steadily from 1971-75 due to the
continuing fall of equity prices and declined in
1976 because dividends fell even more sharply
than equity prices.
POLICIES AFFECTING
CONSUMPTION AND INVESTMENT
A wide range of policy measures can affect the
behavior of consumption and investment.
Many of these policies encourage one while
discouraging the other. For example, an incomes policy, in which wages, profits, and prices
are subject to direct government influence,
can alter the distribution of income between
wages and profits and thus can change the
relative levels of consumption and investment
spending. On the other hand, policies that encourage consumption may, by increasing pressure on productive capacity, also encourage
investment.
Of the measures available to influence consumption, perhaps the most important is tax
policy. Recent examples include the German
and British income tax measures mentioned
earlier and the Italian Government's increases
in various indirect taxes and in prices for
public-sector services. As an example of
another way in which public policy can encourage investment and discourage consumpt i o n , the B r i t i s h authorities have issued
guidelines that favor bank lending to industry.
In many countries, tax and credit policies
are intended to encourage investment, both
over all and in specific sectors and regions. I n
addition, investment policy can be varied for
cycUcal demand-management purposes. Investment can be increased directly by the
public administration or by nationalized industries. For example, the German Government
this year announced its Medium-term Program
to Improve Infrastructure involving 16 billion
marks of investment expenditure spread over
several years. I n Japan, among the various
steps taken to increase investment is a program for larger public works expenditures;
Consumption and Fixed Investment Abroad
and in France the government has increased
nationalized enterprise investments in 1976
and 1977.
In addition, governments can provide incentives to the private sector—such as investment
tax credits, accelerated depreciation allowances, and interest rate subsidies, all of which
have the effect of either increasing the aftertax return on investment or reducing the cost
of capital—as well as direct loans. Recent
examples include the extension of the investment tax credits in Canada and a special
investment tax credit in France, more generous accelerated depreciation allowances in
France and Germany, interest rate subsidies in
the United Kingdom, and government loans at
subsidized rates in France. Governments also
can try to influence the amount of investment
at a given level of total output by choosing a
mix of fiscal and monetary policy that is
intended to result in an interest rate that will
produce the desired level of investment.
CONCLUSION
The increases in the propensity to save in the
major foreign industrial countries in recent
years have lowered personal consumption expenditures relative to what they would have
been, given the level of personal disposable
income. I n addition, investment expenditures
have been slow to recover from the past
recession. Thus, two of the major elements of
final domestic demand have been sluggish,
and investment expenditures, in particular,
have recovered more slowly than in previous
cycles.
The present recovery differs in character
f r o m previous recoveries because of the
greater amount of uncertainty that exists—due
in part to the economic shocks sustained by
the international economic system in the past
881
few years—and because inflation rates have
remained high despite several years of economic slack. Both consumption and investment behavior appear to have been affected
adversely by this environment of uncertainty
and high inflation. Moreover, the restrained
growth of consumption demand, in turn, has
contributed to the low level of pressure on
existing capacity, which is discouraging investment.
The increase in the household sector's
propensity to save, coupled with reluctance on
the part of potential investors to invest, means
that some adjustment must have taken place in
order to match saving and investment, since
personal saving and fixed investment are important components of total saving and investment. I n the absence of changes in governmental and external stimuli, economic
theory would suggest that this process would
take the form either of an adjustment—in the
present case, downward—in the rate of return
on saving and in the rate of return necessary to
make an investment profitable and/or an
adjustment—again, i n the present case,
downward—in income. These factors have
tended to depress real rates of return (as
measured by actual rates of return adjusted for
realized inflation) and incomes in the major
foreign countries during recent years, although there has been some offset to this
process due to changes in government policy.
The prospects for a stronger recovery in
consumption and especially i n investment
appear to rest heavily on reducing the rate of
inflation and reducing the degree of prevailing
uncertainty. I t is true that, as the investment
slowdown is prolonged, the need for replacement investment will probably provide some
incentive for higher over-all gross investment.
Nevertheless, sustainable growth requires extensions to capacity, and businesses would be
more likely to expand if future growth were
more assured.
•
882
Statements to Congress
Statement by Stephen S, Gardner,
Vice
Chairman, Board of Governors of the Federal
Reserve System, before the Subcommittee on
Consumer Affairs of the Committee on Banking, Finance and Urban Affairs, U.S. House
of Representatives, September 22, 1977.
Mr. Chairman, I am glad to have this opportunity to participate on behalf of the Board of
Governors in your committee's hearings on
consumer safeguards for electronic funds
transfer systems. The need for such
safeguards has been recognized by the Congress, the Board of Governors of the Federal
Reserve System, the National Commission on
Electronic Fund Transfers, and many other
representatives of the general public. The
Board commends your committee for undertaking this essential work. These issues are of
vital importance to consumers.
The new world of electronics provides opportunities to broaden consumer payment alternatives and to improve consumer convenience and service while reducing the costs of
making payments. Direct deposit of Government payroll and social security benefit payments through automated clearinghouses has
helped people receiving funds by improving
the security and convenience of such payments and has resulted in substantial cost
savings to the Government. Installation of
teller machines by the financial institutions
has offered consumers longer banking hours
and more convenient banking facilities at costs
much less than regular branches. The retailing
industry has successfully installed electronic
cash registers that have demonstrated the
convenience and cost savings expected of
electronic fund transfers (EFT) at the point of
purchase.
Nonetheless, EFT is developing at a more
moderate and cautious pace than many pre
dicted. The major reasons for this slow development are found in the many uncertainties
that surround the substitution of electronic
systems for the traditional use of paper bills,
checks, receipts, and ledgers. Consumers,
businessmen, and depositary institutions are
unsure of their rights and liabilities in EFT
systems. There also may be antitrust questions that need to be clarified since cooperation among competing depositary institutions
may be necessary in many markets to successfully introduce the new technology. It is not
surprising, then, that we are applying only a
fraction of the technology we possess and that
businesses are reluctant to make the substantial investment necessary to utilize present
knowhow.
Clearly, the work of this committee can
speed the process by which we can realize the
cost savings and conveniences that our inventive technology can bring to the simple, normal daily tasks of life.
H.R. 8753 addresses consumer rights and
interests and is directed at quieting many of
these fears. The Board endorses the intent of
the proposed EFT consumer legislation. EFT
can deliver substantial public benefits. Many
of the issues covered by H.R. 8753, as you
know, have also been considered by the National Commission on Electronic Fund
Transfers in that Commission's detailed
deliberations.
While the proposed b i l l has benefited
from the Commission's earlier Interim Report,
I am sure the committee will want to review
carefully the Commission's final recommendations on consumer issues. As you
know, these have been completed within the
past 2 weeks. Finally, H.R. 8753 recognizes
but does not appear to address consumer
privacy, a most important issue. The Commission has considered the privacy issue exten-
Statements to Congress
sively, and I suspect this committee will want
to study the subject carefully.
The Board believes that consumer protection legislation should start with the premise
that keen competition is an aid to consumers
when b o t h suppliers and purchasers are
numerous. Competition is most hkely to develop when there are many participants in the
marketplace. Therefore, legislation establishing a legal framework for EFT should make it
possible for any and all depositary institutions
to set up EFT plans for their customers. The
goal should be to afford individuals, small
businesses, and other users of EFT at least the
same breadth of choice among alternative
suppliers of EFT services that they now have
among alternative suppliers of checking accounts. I f every depositary institution can
provide EFT capabiHties to its depositors,
every depositary institution can compete effectively, and competition w i l l generate a
broad choice of alternatives for the public.
Limits on the ability of institutions to offer
EFT plans, whether imposed by legislation or
by the nature of EFT technology, could result
in the same sort of highly concentrated market
that characterizes the bank credit card industry. Such an outcome would probably not be
in the public interest.
H.R. 8753's most important provisions deal
with the information the institution supplies to
the consumer and the substantive rights of the
consumer. The Board particularly supports the
advance disclosure of EFT terms in readily
understandable language. Disclosure would
cover both the consumer's right to obtain
information from the institution and the consumer's rights when something goes wrong.
The Board beUeves disclosure of transaction
terms is necessary as it will facilitate the
consumer's control over his personal finances.
The Board also endorses the concept of descriptive periodic statements describing the
activity that has taken place in the consumer's
account and recommends that the statements
should include the transaction date, amount,
location, means of transfer, type of transaction, other parties to the transaction, and
transaction number. These statements are particularly important because they will serve
883
many of the functions now being provided by
cancelled checks.
The Board also approves of H.R. 8753's
definition of certain inherent consumer rights,
such as a limit on liabihty for unauthorized use
of funds transfer cards, the right to stop payment on a purchase transaction, as well as the
right to require prompt correction of errors.
The Board endorses the limit proposed in
H.R. 8753 on a consumer's liability for unauthorized transfers by means of an EFT card.
This provision parallels the earlier Board recommendations. Unauthorized uses of EFT
cards, beyond minimal amounts, represent
avoidable or insurable risks that the Board
beheves institutions, not consumers, are better able to bear.
The Board similarly approves the provision
in H.R. 8753 that makes the institution liable
for consequential damages suffered by the
consumer as a result of a failure to carry out
transactions ordered by the consumer. Under
the present check payment system, a bank ''is
liable to its customers for damages proximately caused by the wrong dishonor o f " a
check.^ Thus, if the consumer writes a check
to pay for a fire insurance premium on a home,
the bank erroneously refuses to pay it, the
insurance coverage lapses for nonpayment,
and the home burns down, the bank is liable
for the damages incurred by its customer, not
just for the amount of the check. This same
principle should apply to consequential damages suffered because of EFT lapses by the
institution.
The Board further supports the provision in
H.R. 8753 that gives the customer the right to
stop EFT transactions. The EFT customer's
right to stop payment on purchase transactions
is quite similar to the customer's present right
to stop payment on a check. The stop payment
right was originally included in the Uniform
Commercial Code on the grounds that depositors ''expect and are entitled to receive
(this right) . . . notwithstanding its difficulty,
inconvenience, and expense."^ The same rationale applies to EFT transactions. However,
^ U.C.C. § 4-402
2U.C.C. § 4-403, n.2.
A884
Federal Reserve Bulletin • October 1976
stop payment transactions will probably occur
infrequently, and significant costs to the consumer may be associated with them. Therefore, the Congress may want to consider alternatives, such as ''value dating," a system that
permits the consumer and the merchant to
agree on a future date on which a payment will
become final.
N o one doubts that both mechanical and
human errors will occur under an EFT system.
Consumers have a particular reason under
EFT to expect prompt error correction. Errors
may reduce or deplete the funds in the consumer's account needed for day-to-day living
expenses. The Board, therefore, favors the
provisions of H.R. 8753 concerning error resolution and the requirement that statements contain sufficient identifying information to enable
the consumer to detect mistakes. The error
resolution procedure derives in part from the
Fair Credit Billing Act.
I n H.R. 8753 the institution must acknowledge alleged errors within 7 days and correct
such errors within 30 days. That may not be
feasible for EFT. I n the case of credit errors
the consumer must decide only whether or not
to pay an erroneous bill. When the consumer
is confronted with errors in his deposit account, however, he may be temporarily without funds. The Board believes that 37 days is
too long for a consumer to be without his
funds, and that the error resolution period
should be substantially shortened.
I also want to bring to the committee's
attention other basic concerns of the Board.
They are the risk that the bill could have
anticompetitive effects and could increase
costs that EFT systems should reduce.
Vigorous competition between financial institutions constitutes an important form of consumer protection. The prohibition of H.R. 8753
upon circulation of EFT cards that consumers
have not requested can impose a substantial
barrier to supplier entry into the EFT market.
The new EFT institution faces more difficult
start-up problems than even that experienced
by a credit-card issuer. A large base of cardholders is essential to attract merchant participants. Without such a base of participating
merchants, consumers will not find the system
attractive. I n urging reconsideration of the ban
on unsolicited credit card distribution, I want
to point out that the abuses that occurred in
the mid-1960's when regional, three-party
credit-card systems were being established can
now be controlled. Consumers enjoy the protection of error resolution and strictly limited
liability. We should not recreate the extreme
concentration that presently exists in the
credit card industry in ' ' d e b i t " or EFT cards.
I hope the committee will revisit this issue,
which has been so controversial. Under the
bill the consumer bears no liability for unauthorized use of an EFT card unless the consumer requested and received the card. Thus,
all liabiUty for unauthorized use of unsolicited
cards appropriately rests with the institution
instead of the consumer. Further, there may
be a worthy compromise in permitting the
unsoHcited distribution of EFT cards, while
requiring that the access code necessary for
the card's use be sent only if the customer
accepts the plan.
Of equal importance is the resolution of
questions that will be raised governing the use
of shared systems. While it is not in H.R.
8753, surely the Congress will want to give
considerable attention to this issue. E F T
should serve the consumer by presenting as
few barriers as possible to the consumer's
access to all advantages of the network. Consumers should be able to make a purchase
from any merchant willing to accept their EFT
card, regardless of which institution has issued
the card. The consumer can get little benefit
from his EFT account if he cannot use his card
in a store having a terminal because the
switching network will not accept the transaction.
H.R. 8753 seeks to assure that the check
payment system will continue as an alternative
to EFT. The Board supports the retention of
the checking alternative, but opposes the provisions in the bill that require institutions to
charge as much for their EFT services as for
checks. Both consumer protection and overall competition will be better served if price
competition remains unrestricted so that consumers can realize any cost savings available
through EFT. A poHcy of competitive pricing
Statements to Congress
would parallel the recent interest in unbundling
of bank charges and T r u t h in L e n d i n g ' s
authorization of discounts for cash.
The Board's concern about legislation prohibiting price competition requires me to
comment on the provision that affects charges
for credit. We are opposed to this type of
Federal price fixing. It invades the businessdecision f l e x i b i l i t y of sellers and w o u l d
supplant or conflict with much State legislation.
Another issue of particular interest to the
Board is the effect of the proposed bill on the
cost of electronic payment services to the
consumer. H.R. 8753 would require that EFT
generate written documentation of virtually all
transactions: sales, loans, debits, and credits.
The cost of this broad requirement could nullify the benefits and conveniences EFT offers.
A requirement of such records at the point of
sale or loan appears reasonable. Simply handing a receipt to the consumer presents few
logistical problems, entails no mailing costs,
and permits the EFT institution to obtain the
user's signature for potential comparison with
the account holder's in the event of a disputed
transaction. However, concurrent mailing of a
record of a nonpoint-of-sale or loan transaction to the consumer involves significant
costs. Since the transaction will generate no
consumer signature, the degree of protection
afforded the consumer by this procedure has
hmits. The Board, therefore, wonders if the
nonpoint-of-sale or loan transaction, particularly a periodic deposit or preauthorized transfer, warrants the expense of concurrent documentation, when it may result in so little
additional consumer protection but will add
substantially to costs. The Board suggests that
negative notice, failure by an institution to
receive a regular automatic deposit, for example, would provide sufficient consumer protection against missed transfers at greatly reduced cost.
The Board's interest in reducing the cost of
electronic payment services to the consumer
also extends to notice requirements. H.R.
8753 would compel institutions and credit-card
issuers to include with their respective cards a
885
notice to the effect that Federal law prohibits
the distribution of unsolicited cards. Even if
this committee decides not to reconsider the
Board's recommendation that the Congress
repeal or alter the^ ban on unsolicited cards,
the Board believes that the very slight degree
of protection conferred on consumers by this
notice requirement may not justify the expense, confusion, and paperwork associated
w i t h printing, enclosing, and mailing the
notices.
The Board's interest in the reduction of
costs also applies to recent proposals to replace descriptive billing for open-end credit
with a requirement that the creditor enclose
copies of written receipts with periodic statements. The Board has experience with some
consumer complaints about descriptive billing
such as inadequate or misleading identification
of transactions. On balance, the Board believes that the loss of information by nonreturn of receipts and the occasional inconvenience at having to request copies will not
outweigh the increased paperwork and cost
involved in their automatic collection, sorting,
and return.
Many people feel that EFT proponents have
focused attention upon EFT issues involving
technology and marketing and have not paid
sufficient heed to safeguarding consumers.
H.R. 8753 is a most important step in balancing these concerns. That is the reason I have
offered the Board's strong support for the
work of this committee on many of the key
provisions i n the b i l l . Comments urging
further study on consumer privacy issues, the
possible anticompetitive effects of shared systems, and the costs to the consumer of producing duphcate records are offered in the spirit of
helping the committee improve the legislation.
The Board believes that many of these problems can be resolved after further careful
study. With your approval, Mr. Chairman, I
plan to submit a technical appendix for the
record offering appropriate suggestions for
some of the points I have raised this morning.
I hope these comments have been helpful,
and I will be pleased to try to answer whatever
questions you may have.
•
A886
Federal Reserve Bulletin • October 1976
Statement by Stephen S. Gardner,
Vice
Chairman, Board of Governors of the Federal
Reserve System, before the Committee on
Banking, Housing and Urban Affairs, U.S.
Senate, September 26, 1977.
I am pleased to appear before the committee
on behalf of the Board of Governors of the
Federal Reserve System to assist you in
gathering information on banking practices
and to express the Board's judgment on the
need for additional statutory and regulatory
safeguards. It is important to have a full and
balanced evaluation of this question. We have
a great deal of statutory restrictions and regulations levied on domestic depositary institutions in this country, and this oversight legislation and regulation is very effective. Further,
the Board has proposed, as you know, additions to its regulatory powers for a number of
years. This committee, to its great credit, and
the Senate have recently enacted most of the
Board's proposals in S. 71. House action on
that supervisory powers bill is expected soon.
The proposals in S. 71 grew out of years of
regulatory experience and they will strengthen
the agencies' ability to deal with unsafe and
unsound banking practices. In addition, the
Board is ready to support some other improvements in regulatory powers. But we
must not prohibit legitimate practices or crush
the vitality of an industry so essential to our
economy.
In accordance with the committee's rules,
my testimony will consist of summary comments on the series of questions contained in
your letters. Detailed answers to the questions
also appear in the appendix to this statement.'
As the appendix states, we are in the midst of
a definitive study, in response to your request,
of banking practices related to bank stock
loans. A l l the Federal bank regulators are
participating in this work, and the study is
expected to be completed by December 1. The
preliminary data that we have drawn from this
study indicate that some loans to purchase
^ The appendix to this statement is available on request
from Publications Services, Division of Administrative
Services, Board of Governors of the Federal Reserve
System, Washington, D.C. 20551.
more than 10 per cent of a bank's stock are
made at rates below prime and in amounts in
excess of the purchase price of the shares. A
study of 163 banks where changes in control in
1975 were financed by stock loans, however,
shows that no over-all deterioration has occurred in the condition of those banks. While
these preliminary indications are consistent
with Federal Reserve experience, they may be
qualified when the complete study is finished.
In discussing bank stock loans, I want to
examine the underlying civic and economic
benefits that derive from such credit. There
are some 14,500 commercial banks in the
United States, and almost all of these corporations are small businesses judged by any
standard of bank measurement. The larger
shareholders are typically successful small
businessmen or women or farmers or professionals, including doctors, dentists, lawyers,
and their families or heirs. The local market for
such bank stock is extremely limited, but local
ownership is prized as a civic asset. When
owners' estates must be settled or retirement
plans met, f i n a n c i n g that permits local
ownership to continue is often essential as
with any similar business transaction. Since a
bank is prohibited from lending on its own
stock, the small banker as with so much of his
regular business transactions turns first to his
city correspondents for assistance. The principal correspondent is most familiar with the
bank's affairs, condition, and principals.
Further, to gain such a relationship the correspondent has routinely helped the smaller
bank with any problem within its capacity, and
it does it, of course, because the smaller bank
is a prime customer. This process clearly
improves the marketability of small bank
stock, enhances the attractiveness of such
stock as an investment, and provides for continuity of local ownership.
Violations of law or good procedure can
occur in any lending practice, and bank stock
loans are subject to particular scrutiny in our
examiners' instructions because of the difficult evaluation an examiner must make of
three troublesome possibiHties. First, it is at
least a breach of fiduciary duty for a bank
official to obtain preferential terms on a bank
Statements to Congress
stock loan by utilizing his bank's deposits in a
correspondent bank. Second, bank stock
loans can be a vehicle for circumventing
branching and holding company restrictions
when the purchase of stock by "straw men"
acting on behalf of a larger lending bank are
financed by that bank. Finally, when an individual finances the purchase or control of a
bank, his loan amortization may require that
large dividends and salary be paid to him.
Through the examination process, and the
requirements surrounding formations of bank
holding companies and acquisitions of new
banks by bank holding companies, the Federal
Reserve has dealt with these problems. As
explained in my letter to you of September 7,
1977, we have taken a number of steps to
prevent such problems. These have ranged
from Chairman Burns' 1970 letter to the chief
executive officer of each State member bank
setting forth the view of the Justice Department
that the use of interbank deposits as compensating balances for loans to individuals could constitute a violation of criminal law, to the referral
to the Justice Department or U.S. Attorney of
37 cases of possible misapplication of bank
funds through loans to officers of other banks
and loans on bank stock. We have sufficient
supervisory and regulatory powers to deal
with ''straw men" and excessive dividends
and salaries, but the issue of correspondent
balances is more difficult. None of the cases
we have referred to the Justice Department
have been prosecuted. Because of the nature
of correspondent accounts, it is extremely
difficult to prove that there has been a misapplication of bank funds connected with loans
to officers or controlling shareholders of a
smaller bank, and in most cases there has
probably been no violation. But alternative
approaches clearly deserve consideration by
the Committee in order to prevent real abuses,
and I will submit Board recommendations covering disclosure and margin requirements and
the requirement that bank stock loans be made
at market rates and terms, in response to three
of the suggestions made in paragraph I.G. of
your outline.
As the statement in the appendix indicates,
the regulatory authorities have adequate
887
supervisory powers to deal with the subject of
''preferential t r e a t m e n t . " Competition for
profitable bank business is no less common
than competition in all other types of business.
Legitimate and effective marketing strategy
guides banks in offering as many services as
possible to customers. The prime rate is offered to the most creditworthy borrowers that
maintain relationships that the banks f i n d
most profitable. Plans offering group rates for
banking services to the employees as well as
the officers of large business customers of
banks are just as normal as benefits employees, as a group, may obtain from a group
insurance contract with an insurance firm.
There is no reason to " c u r b " such normal
banking practices, and the term "favored customer" needs very careful definition if it is
meant to imply the existence of practices that
are harmful to the bank or to the economy.
As the appendix indicates, a small survey of
commercial bank overdrafts at 41 State
member banks indicates that only 8 such
banks had overdrafts outstanding to officers,
directors, and major shareholders, and the
aggregate amount of such overdrafts was less
than two-thirds of 1 per cent of the total overdrafts reported by the same banks. Overdraft
practices varied at the banks. Eight had fairly
liberal standards, but we found no evidence
in that preliminary study that the application
of overdraft policies could be termed discriminatory.
Under Section 22g of the Federal Reserve
Act, which imposes ceiHngs on loans to executive officers, overdrafts are considered to be
unsecured extensions of credit and hmited by
that regulation to $5,000 for an executive
officer. We believe there are sufficient bank
regulatory procedures in place to administer
proper oversight of overdraft policies and
practices at banks. However, the Federal Deposit Insurance Corporation is making a more
comprehensive survey of overdraft policies at
selected banks and we will, of course, carefully review the results of that study before
expressing a final conclusion on that subject.
It is our oversight experience that the majority
of banks conscientiously endeavor to comply
with applicable banking laws and regulations.
A888
Federal Reserve Bulletin • October 1976
Earlier this year at hearings before House
committees, we testified that the General Accounting Office (GAO) study on Federal bank
supervision quite correctly pointed out that
the majority of violations of law and regulations uncovered by bank examiners were of a
technical nature and had little or no impact on
the financial soundness of the institution. This
is entirely germane to your inquiry about the
extent to which banks comply with appropriate law and regulation. As the appendix indicates, in providing specific answers to your
questions about violations of provisions limiting loans to executive officers and requiring
disclosure of loans from other banks, we are
confident that the provisions of S. 71 will
provide the base for even better compliance in
the future.
The payment of insurance premiums to
bank officials on credit-related health and
life insurance arising from credit extensions
is covered in detail in the appendix. This is
a common practice of smaller, rural banks,
especially in the Midwest, and particularly
in States that have statutes and regulations
that prohibit banks from receiving such insurance commissions. The Board's staff is
engaged in a detailed study and evaluation of
the merits and difficulty of such procedures.
On the one hand, the practice permits small
banks to supplement salaries and attract more
competent management. I n addition, such
premium income frequently assists in servicing and retiring bank stock loans that are not
criticizable. On the other hand, it appears to
be a diversion of income from the bank. I
cannot report that the Board has taken a
position on this practice generally, but it has
carefully administered the provisions of S.
106(b) of the Bank Holding Company Act to
assure that no impermissible tie-in provisions
are present in bank lending practices. Further,
we have no evidence that unsound loans are
made by member banks in an effort to generate insurance income. This would be a selfdefeating practice in that bad loans could have
a serious impact on an institution many times
larger than the mere receipt of insurance
commissions.
I have included in the appendix a complete
list of 35 orders and agreements executed by
the Board during the last 5 years under the
powers granted in the Financial Institutions
Supervisory A c t of 1966. I n addition, 14
agreements have been entered into by Reserve
Banks and State member banks during this
period.
There are specific and sufficient laws covering the l i a b i l i t y of directors for improper
banking practices. I n addition, directors receiving excessive salaries or dividends or misusing bank assets are subject to proceedings
under the Financial Institutions Supervisory
Act since such practices would appear to
constitute "unsound banking practice." The
Board has taken action to terminate excessive
salaries and dividends paid to a director and
controlling shareholder by a bank holding
company. These same conditions would most
probably invite civil suit by other corporate
shareholders as well.
I want to point out also that two of the
Board proposals incorporated in S. 71 will
clarify the Board's authority to issue ceaseand-desist orders against individual officers
and directors. Further, the criteria for removing an officer or director that is expanded to
cover gross negligence in S. 71 will expedite
Federal Reserve action in the case of directors
who flagrantly ignore their fiduciary responsibilities.
Comments are included in the appendix
citing Title 18 in Secfion 411(b) of the United
States Code, which deals with impermissible
bank pohtical activities.
While there is no specific prohibition against
pledging the same collateral for different loans
at different financial institutions, it is our
opinion that none is needed. The Uniform
Commercial Code with great detail and specificity sets up the rights and priorities between creditors to collateral pledged to secure
loans.
I have also provided an answer to your
question about the application of conflict-ofinterest regulations affecting examiners who
may take positions after their Federal service
with banks. The G A O reviewed this question
Statements to Congress
in the study mentioned previously in my testimony and concluded ''since few examiners
left to work for banks they examined, we see
no threat to their objectivity as long as the
agencies continue r o t a t i n g examiners-incharge among banks examined and review
examination reports at regional offices and
District banks." Professional bank examiners
have in the past been a source of good management talent for the banking industry. They
are subject to c a r e f u l conflict-of-interest
policy governing any dealings with banks
while they are examiners. Their work and
recommendations are reviewed by the Federal
Reserve Bank senior staff as well as senior
Board officials. We do not believe any addition to the current protections are necessary.
The issue of whether or not there should be
a Federal statute requiring supervisory approval for the transfer of control of banks has
been examined carefully by the Board. Such
requirements are presently necessary for the
chartering of new banks or the acquisition or
control of banks by corporations or partnerships. However, there is no prior approval
required of individuals who purchase controlling interests in banks. I n the suggestions for
new authority that I will send you, we will
include a strengthening of disclosure and reporting requirements covering the acquisition
of 25 per cent or more of the ownership of a
bank by an individual. A t present the institution must make such a report, but since it may
not be aware of such changes, the Board will
Statement
Board
by J.
Charles
of Governors
System,
before the Subcommittee
tic Monetary
Banking,
Partee,
Policy
Finance
Member,
of the Federal
of
and
House of Representatives,
on
Reserve
Domes-
the
Committee
Urban
Affairs,
on
U.S.
September 27, 1977.
I am pleased to appear before this committee
today to present the views of the Board of
Governors of the Federal Reserve System
w i t h respect to recent m o n e t a r y de-
889
recommend that the acquiring shareholder be
required to file the disclosure report.
I n summary, the complex and comprehensive Federal oversight and regulation of the
banking industry has effectively served the
public purpose of stopping all but an incredibly small number of bank failures in the
United States. N o other private industry is
subject to such detailed Federal and State
financial oversight. This system has evolved
and has met changing conditions in our economy. I believe the passage of S. 71 is part of
this careful development of regulatory restrictions aimed at controlling unsafe and unsound
banking practices. I beheve some modest additional measures, as indicated in this testimony, will be helpful today. I reject the
concept that we need to propose pervasive
and severely Hmiting broader restrictions on
banking institutions and their managers. I
cannot resist pointing out one anachronism.
A l l of our Federal laws governing banking
institutions cover only domestic banks. We
have no such Federal oversight for the growing and significant population of foreign banks
operating in this country. This committee in
the past has considered such legislation. The
House is presently deliberating over an International Banking A c t , and I can say categorically that the one area where some form of fair
and comparable regulation is needed is that
which addresses the powers and oversight of
foreign institutions operating in the United
States.
•
velopments. As I understand it, the purpose of
this hearing is to provide an updating of the
recent monetary oversight hearings of your
parent committee at which Chairman Burns
appeared. M y remarks therefore will supplement his, and I think it would be appropriate
to include a copy of the Chairman's testimony
on that occasion as an attachment to my much
briefer statement. (August 1977 B U L L E T I N ,
pp. 721-28.)
As Chairman Burns indicated at the July 29
A890
Federal Reserve Bulletin • October 1976
hearings, the Federal Open Market Committee
( F O M C ) at its July meeting adopted new
longer-run growth ranges for the monetary
aggregates that it expected to be appropriate
to the needs of the economy over the coming
year. These growth rate ranges were 4 to 6V2
per cent for M-1 (defined to include currency
and demand deposits at banks), 7 to W i per
cent for M-2 (which is M-1 plus savings and
time deposits—except for large negotiable
certificates of deposit (CD's)—at the banks),
and SV2 to 11 per cent for M - 3 (which is M - 2 plus
deposits at the thrift institutions). The Chairman also noted that implicit in these projections for monetary growth was the expectation
that the velocity of M - 1 would continue to increase at a faster rate than it had during comparable periods of previous business-cycle
expansions, and that, because of heightened
uncertainty as to the relationship between rates
of monetary expansion and the performance of
the economy, the Federal Reserve would continue to maintain a posture of vigilance and
flexibility in the period ahead.
The fact is that the pace of monetary expansion now appears to have been unusually rapid
during recent months. This is especially true
of the narrowly defined money supply, where
the increase over the past 6 months—from
February to August—is indicated to have been
at an annual rate of 9.1 per cent. This rate of
expansion, of c o u r s e , is w e l l above the
FOMC's stated longer-run range of projections. Broader measures of the money supply,
on the other hand, have grown at rates only a
little above the upper end of the Committee's
projected ranges. During the past 6 months,
M - 2 and M - 3 have increased at annual rates of
9.9 per cent and 11.3 per cent, respectively. I
might note that over longer time periods—the
past year, for example—growth in M - 1 has
been more moderate while the increases in
M - 2 and M - 3 have been somewhat higher than
those I have just cited. A n d over all of the
period of economic recovery, dating f r o m
the first quarter of 1975, the expansion in the
narrow money supply has averaged just over 6
per cent per annum.
As the recent expansion in the monetary
aggregates tended to run above the F O M C ' s
expectations. System operations have been
directed toward holding down on the provision
of bank reserves needed to support the larger
monetary totals. Just as in any other market,
the more l i m i t e d a v a i l a b i l i t y of reserve
supplies relative to demands has meant that
prices—in this case, interest rates—have gone
up on day-to-day bank borrowings (Federal
funds) and other very short-term sources of
financing. The rate paid on Federal funds, for
example, is up about IVi percentage points
from the lows prevailing early this year, with
almost all of the rise taking place during and
after the A p r i l and July run-ups in the narrow
money supply. Other short-term market interest rates also have been affected, but longerterm interest rates, which are of much greater
significance to the economy, have not increased on balance despite the firming since
April in short-term market conditions.
Some would argue that the Federal Reserve
should have responded more forcefully to the
April and July bulges in the money supply.
Indeed, a few would say that the reserves
necessary to support the deposit expansion
simply should not have been provided, letting
financial markets and the economy suffer
whatever consequences might result. But the
F O M C continues to believe that the wiser
course is to limit the speed with which money
market conditions are adjusted to changing
monetary growth rates. We believe this partly
because
the
monetary
aggregates—
particularly M-1—have proved to be inherently unstable in the short run. Bulges of a
month or two in duration are often reversed
subsequently, as was the case in the spring
and summer of 1975 and again in 1976. Prudence in our actions is dictated also by the fact
that the relationship between the various measures of monetary growth and the performance of the economy is loose and unreliable,
since it is subject to rather abrupt shifts as the
result of changing financial practices and economic conditions.
In the current situation, for example, there
are a number of ambiguities for which we do
not yet have the answers. U n t i l there is more
Statements to Congress
information, it seems to me that one should be
very cautious about prescribing a policy of
stern monetary restraint.
First, the excessive growth in the narrow
money supply this year has been concentrated
in just two 1-month periods—April and July.
We do not have a good explanation for these
bulges. It may be that they reflect in part a
shift in the seasonal pattern of money demand.
I f so, it is entirely possible that a period of
adjustment in money growth could lie ahead,
just as it has in the latter part of other recent
years.
Second, the abnormal expansion that has
occurred over the past 6 months has been
concentrated in the narrow money supply,
w h i l e the g r o w t h i n broader m o n e t a r y
measures—though substantial—has been
much closer to our expectations. One reason
for this development may be that the accelerated pace at which other forms of deposit and
liquid asset instruments were being substituted for bank checking account balances has
now slowed, at least temporarily. That would
modify the meaning of the changed relative
growth rates of the various monetary aggregates, in terms of probable impact on future
economic performance, since it would simply
reflect a shift in holder preference from one
form of deposit to another.
Third, the behavior of the economy this
spring and summer, though generally satisfactory, does not suggest that a major new boom
is in the process of developing. Indeed, both
the growth in real activity and the pace of
inflation have slowed somewhat in recent
Statement
Board
by Philip
of Governors
System,
before
nance
and
Coldwell,
the Subcommittee
cial Institutions
Insurance
E.
Supervision,
of the Committee
Urban
Representatives,
Member,
of the Federal
Affairs,
September
Reserve
on
Finan-
Regulation
and
on Banking,
Fi-
U.S.
28,
House
of
1977.
M r . Chairman, I appreciate the opportunity to
testify before this subcommittee on behalf of
891
months, following acceleration earlier in the
year.
This has been true also abroad, where
most developed countries to date have shown
only rather sluggish recoveries. N o r has there
been a rush of business borrowing at the
banks, though credit demands in general have
been well sustained. Thus the current economic data do not suggest that businesses and
households are building up cash balances with
a view to increasing abruptly their rate of
expenditure. Since sizable unused resources
s t i l l exist i n this and other economies,
moreover, there is no immediate need to restrain excessive expansion, and there should
be time to check any speculative surge in
spending and investment that might develop.
I can assure you that the Federal Reserve
has been concerned about the recently accelerated growth in the narrow money supply and
that we are m o n i t o r i n g this development
closely. A n d I want to emphasize that we have
by no means given up on our views as to the
ranges of growth for the family of monetary
aggregates that are appropriate in the longer
run to the needs of the economy. The recent
tendency toward excess has proceeded in fits
and starts, however, and we cannot yet be
sure how durable—or meaningful—these increases are likely to be. Our efforts to restrain
the monetary expansion must therefore be
judicious. With the unemployment rate nationally still hovering around 7 per cent, we
would not want to contribute to conditions in
credit markets that might imperil the prospects
for sustained economic recovery.
•
the Board of Governors of the Federal Reserve System on H . R . 9086, the Safe Banking
Act of 1977. Before I address some of the
more important provisions of the bill directly,
the Board believes that it is important to place
the bill in the context of prior efforts.
As you are aware, M r . Chairman, in September 1975 the Board proposed legislation on
behalf of the three bank regulatory agencies
designed to improve supervisory effective-
A892
Federal Reserve Bulletin • October 1976
ness. These proposals arose from a study by
the agencies subsequent to the Franklin National Bank failure of possible legislative actions to aid the agencies in their goal of
preventing or ameliorating difficult bank situations.
The legislation recommended by the agencies was included in the Financial Reform Act
and was in large part embodied in S. 2304,
which was reported out of the Senate Committee on Banking, Housing and Urban Affairs in
the 94th Congress. This legislation was subsequently found to be necessary and was supported by the General Accounting Office in its
study entitled Federal Supervision of State
and National Banks. I n this session of the
Congress, the majority of these proposals
were reported out of the Senate Banking
Committee as S. 71 and, in fact, recently
passed the full Senate.
The Board believes that the proposals embodied in S. 71 are relatively noncontroversial
and are needed in our ongoing supervisory
work. As you are aware, H . R . 9086 contains a
large number of provisions that are unrelated
to the basic supervisory thrust of S. 71 or raise
new issues. Furthermore, many of these provisions are likely to be controversial, and we
are frankly concerned that such controversy
will interfere with the passage of the other
necessary, noncontroversial provisions.
Many of the additional titles, which go beyond the basic supervisory thrust of S. 71,
represent a potential overreaction to recent
pubHc discussion of certain practices. The
Board does not condone abuse of a bank for
the benefit of insiders. I n fact, the majority of
the proposals reflected in the Board's original
legislative recommendations in the supervisory field are designed to curb such abuses and
enable the agencies to take more effective
supervisory action when such abuses are discovered. However, we believe that the adoption of additional restrictions without the benefit of a full factual analysis could result in
significant harm to the business of banking and
interfere with the provision of credit to the
economy. I f the practices sought to be corrected are indeed potentially harmful and
widespread, then legislative action may be
needed. However, if such practices appear to
be sometimes beneficial or reflected in only a
few banks, then examination, supervisory,
and perhaps regulatory action reinforced by
the additional tools of S. 71 would appear to be
adequate to meet the problem.
The combination of the existing provisions
of S. 71 with the additional restrictions in H.R.
9086 are excessive in light of existing knowledge of the problem and too severely restrict
the a b i l i t y of banks to p r o v i d e loans to
creditworthy local businesses. Furthermore,
the legislation will severely interfere with the
ability of financial institutions to obtain qualified outside directors. The provisions relating
to transfers of bank stock by individuals are
too restrictive in view of the known nature of
the problem and would interfere with the
ability of banks to obtain capable successor
management through which it would serve the
community. Again, substantial revisions are
proposed in the bank holding company area
without a demonstration that there is a problem needing to be remedied. These portions of
the bill should not be enacted without extensive analysis and study of the problems involved.
For these reasons, we urge that the subcommittee go forward with those noncontroversial provisions of H.R. 9086 that are embodied in S. 71 and for which the agencies
have an ongoing need, and separate out other
portions of the bill for further study and consideration. Board testimony on S. 71 reflects
many of the prime reasons for this supervisory
thrust, and I ask that it be placed in the record
on these hearings. (Statement, September 26,
1977, by Governor Gardner.)
I would now like to turn to the Board's
comments on some of the specific provisions
of the bill. The bill is, as I have already noted,
so extensive and touches on so many important areas that, in the time allowed, I will only
be able to provide the Board's comments on
some of the major issues raised by the bill. I
am submitting for the record a section-bysection analysis of the bill, which sets forth the
Board's comments on those provisions of
concern to the Board.
I will now turn to Title I of the bill, which
Statements to Congress
i n c o r p o r a t e s many of the p r o p o s e d improvements in the bank supervisory and regulatory area that passed the Senate in S. 71.
As I have noted earlier, the Board strongly
supports these provisions and urges their immediate enactment. H o w e v e r , the B o a r d
questions the need for some of the changes
that have been made. I n the area of 'insider
lending" particularly, the changes to S. 71 that
are made in Title I are too restrictive and
would unduly constrain legitimate lending
practices without measurable countervailing
public benefit. The net result of these provisions would be to prevent many businessmen
from lending their expertise to bank boards
of directors.
Title I would modify the aggregate lending
provisions of S. 71 so that they would apply
to a director and his related companies whether
or not that director was an officer or a 10
per cent shareholder. The Board believes that
such a provision would severely limit the
availability of qualified directors for banks,
particularly in smaller communities. I n such
smaller communities, it is not at all unusual for
an outside director to control more than one
local business. This bill would force the outside director to choose between the local
availability of credit for those businesses and
his service as a bank director. The result of
such a choice could be to deprive the bank of
experience and advice.
I n our view, the requirement elsewhere in
Title I—that loans to insiders be approved by
two-thirds of the board of directors and that
such loans not be extended unless they are
made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions
with other persons and do not involve more
than the normal risk of repayment or present
other unfavorable features—adequately protects against possible abuses. Unless a director were also an officer or a 10-per-cent-orgreater shareholder, it is unlikely that he
would be able to induce the other directors to
make a questionable loan, particularly in view
of the liability to which the other directors
would subject themselves under the civil penalty provisions.
893
The requirement that the aggregate loan
limitation on loans to covered insiders be set
at 50 per cent of the statutory loan limit to an
individual borrower will again provide a strong
disincentive for outside directors to serve on
bank boards. Once the statute has been
amended to aggregate all loans for a particular
insider and his related interests, it does not
appear that there is any substantial decrease in
risk to the bank's safety or solvency by moving from 10 per cent to 5 per cent of the total
capital and surplus of the bank.
Title I further places a ceiling on aggregate
lending to all insiders. We do not believe such
a provision to be necessary or appropriate.
The aggregation of loans to the interests of any
one insider is based on the premise that such a
concentration is more risky in the case of an
insider because those loans might be made on
less than an arm's-length basis. While an argument might be made that similar considerations of risk would support an additional Hmitation on the aggregate of a bank's loans to all
insiders and their interests, our experience
has not shown that an additional limitation
is necessary. I n cases that have come to our
attention involving insider lending abuses,
those abuses have been limited to one or a
few, generally controlling, individuals and
have not typically involved the entire board,
particularly its outside directors. A n additional
limitation on the aggregate of loans to insiders
and their interests, which would rule out the
major portion of such loans, would be a serious
deterrent to the ability of banks to attract independent outside directors. I n addition, it would
restrict a bank's ability to lend to companies
and individuals best known by the bank to be
creditworthy and would require banks to ration credit among the directors and companies
they control.
In closing the Board's comments on Title I
of the bill, we believe that it is necessary to
consider the cumulative effect of the proposals
that have been made. I n sum, if the proposals
are adopted as proposed, a bank may find it
impossible to obtain qualified outside directors as is required by a subsequent title
of this bill. Such, almost punitive, provisions
should not be imposed since there is no show-
A894
Federal Reserve Bulletin • October 1976
ing of any significant number of instances
where outside directors have abused their
positions. Again, with respect to other insiders, the harshness of the remedy far exceeds
the frequency of demonstrated abuses.
The next major portion of the bill on which
the Board wishes to comment is Title V I ,
which would radically change the ground rules
for the transfer of ownership of bank stock by
requiring prior approval of the Federal Deposit Insurance Corporation (with input from
the Comptroller of the Currency or the Board,
as the case may be) before any individual
could acquire control of an insured bank.
Since 1956 in its consideration of the Bank
H o l d i n g C o m p a n y A c t and the various
amendments thereto, the Congress has carefully drawn a distinction between corporate
and individual ownership. In fact, it was not
until 1970 that the Congress expanded the
coverage of the Bank Holding Company Act
to partnerships owning bank stocks. Similar
distinctions have been consistently drawn
under the Savings and Loan Holding Company Act. These previous actions on the part
of the Congress have basically reflected a
concern for the marketability of bank stocks, a
desire not to unduly discourage changes in the
control of banks, and a respect for the individual's rights to buy or sell stock. Particularly
in the Nation's smaller communities, successor ownership and management have to be
readily available, and many changes in control
and management of banks result in more effective and responsible ownership, are highly
desirable, and should be encouraged.
Any regulatory requirement for prior approval would necessarily impose burdens,
costs, and delays that w o u l d hinder such
changes, desirable as well as undesirable, restrict the marketability of bank stock, and
discourage some young persons of promise
from entering the banking industry. The costs
and burdens of this type of Federal legislation
should not be imposed on the more than 14,400
insured banks in the country without better
demonstration that there is a compelling need
for the legislation or that the goals of bank safety and soundness cannot be reached through
less obtrusive legislation. Undoubtedly there
are instances in which changes of control have
led or will lead to adverse impacts on the bank
involved. However, the Board seriously questions whether the approval process contemplated w o u l d prevent enough of these
instances to justify the costs involved. Additionally, we are concerned whether appropriate standards for the exercise of discretion to
permit or deny individual ownership can be
drafted that will adequately balance the individual's rights with the protection of the institution. We believe the standards imposed in
the title as drafted are too indefinite and would
give too much authority to the supervisory
authority. Further, a conflict could arise between the standards applied for individual
ownership under this title and those imposed
for corporate ownership under the Bank Holding Company Act.
I n this regard, the Board believes that there
is a less disruptive method by which the goal
of attempting to prevent adverse impacts of
bank ownership changes can be achieved.
Section 7(j) of the Federal Deposit Insurance
Act presently requires that reports of change
of control of financial institutions be filed by
the institution when it realizes that such a
change has occurred. The Board beheves that
it might be appropriate to require filing of a
report by the acquiring person no later than
the date of consummation of any change of 25
per cent or more ownership. Civil penalties
should apply for the failure to file such a
report, and the report should contain much of
the information required by Title V I . I n this
manner, if there were any circumstances regarding such a substantial ownership change
as to give rise to a suspicion by the bank
regulatory agency that the bank i n v o l v e d
might be abused as a result of such change, the
bank regulatory agency would be in a position
to have its personnel monitor developments at
the bank and take action before the bank
suffered any serious adverse impact. We believe that such an approach would adequately
balance supervisory concerns with individual
rights and the necessity for the marketability
of bank stock.
The Board believes that under certain circumstances there is some merit to the concept
Statements to Congress
introduced in the bill of applying a margin
requirement to all bank stocks whether or not
they are publicly traded. However, we believe
a requirement of a 50 per cent margin as
proposed by the bill would make it extremely
difficult to provide for successor ownership
and management at smaller institutions in
smaller communities. Rather, we believe a
more appropriate margin would be 25 per cent
and that there should be regulatory exemptive
authority depending on the circumstances.
Such a margin requirement should apply when
control is being acquired and where the loan
involved is from a commercial bank. Otherwise, such bank stock loans should be set on
the same terms and conditions as other bank
loans.
With respect to the provisions relating to
correspondent balances, the basic purpose of
Title V I I I of the bill appears to be to prevent
an insider of one bank from influencing the
placement of such balances as a means of
obtaining loans, p r o b a b l y at preferential
terms, from another bank. To this end the title
would prohibit bank A , which has a correspondent account from bank B, from lending
to insiders of bank B, or if bank A has lent to
insiders at bank B, from opening up a correspondent account for bank B.
The title goes on to prohibit a bank keeping
a correspondent balance with another bank
from making a loan to an insider of that
correspondent or a bank having such a loan
from opening up a correspondent account at
such bank. With respect to the latter prohibition, there appear to be few, if any, known
cases where banks providing correspondent
accounts were abused in the manner that the
provision is apparently designed to prevent,
and we question its necessity.
The Board strongly supports the purpose of
preventing insiders from profiting through the
placement of correspondent balances, and we
have previously taken action to attempt to
insure that such abuses do not occur. The
exposure to such abuse is particularly high in
the case of an officer or controlling stockholder of a bank. However, rather than prohibit such relationships, the Board believes
that limits could be imposed on shifts of corre
895
spondent accounts or the size of the accounts
not justified by services rendered. I n addition,
we believe that a requirement for no preferential treatment should be imposed on all bank
stock loans whether or not a correspondent
balance exists. Such requirements should be
backed up with civil penalties, and the committee may wish to consider the desirability of
such a p r o v i s i o n in c o n j u n c t i o n w i t h the
aforementioned margin requirement as an alternative to the prohibitions of Title V I I I .
The bill, however, would also reach ''outside directors" and will prevent creditworthy
loans by banks that have correspondent
relationships with the bank on whose board
they sit. It must be remembered that in many
instances a correspondent bank is in the best
position to judge the credit of people in a
downstream correspondent. I n view of the
restrictions proposed in Title I relating to
insiders borrowing from their own institutions,
the provision is overly broad and would unfairly restrict the ability of these individuals to
obtain credit. The Board, therefore, beheves
that outside directors, that is, directors who
are not otherwise officers or 10 per cent
shareholders, should be removed from the
prohibitions of Title V I I I and that only the
requirement of nonpreferential treatment be
instituted with respect to loans to such individuals. That is, the loans should be required
to be on no more favorable terms and present
no more risk of collectability than comparable
loans to third parties.
As it has in the past, the Board favors
enactment of a right to financial privacy bill
and one that w o u l d , as w o u l d T i t l e X I ,
extend the disclosure prohibition to any person rather than just covering disclosure to
governmental agencies. We are somewhat
concerned, however, that there may be certain
technical details in this bill that would impede
the Board's ability to carry out its statutory
functions.
Section 1110(e) should be amended to make
it clear that the title does not authorize withholding of financial information that regulatory agencies have a statutory right to collect
whether or not a statute specifically requires
the information to be reported. Furthermore,
A896
Federal Reserve Bulletin • October 1976
we believe that 1110(b) should be amended to
i n c l u d e n o t o n l y s u p e r v i s o r y b u t also
monetary and regulatory functions.
Section 1109 could have the unintended
effect of disabling the bank supervisory agencies f r o m exchanging information among themselves or f r o m making relevant information
available to the Department of Justice and
the Securities and Exchange Commission for
enforcement purposes. We therefore believe
that a sentence should be added at the end of
1109 that states:
Nothing in this title prohibits any supervisory
agency from exchanging examination reports
or other information. with another supervisory agency, or from supplying information to
a prosecutorial or enforcement agency concerning a possible violation of a regulation or
statute administered by the supervisory
agency.
We are concerned, however, with section
1104 of the bill relating to the nonauthorized
use of terminals and disclosure of a customer's
transactions at those terminals. While the
Board is generally in favor of such precautions, we believe that this p o r t i o n of the bill is
o v e r l y vague. A n y p r o v i s i o n s r e l a t i n g to
E F T systems security should set forth standards and methods of security w i t h great specificity i n order to enable financial institutions
to properly comply w i t h the section. For this
reason, we recommend that this section of the
bill be deleted so that it may be later considered in greater detail.
The title of the bill relating to holding companies incorporates a number of provisions,
which were embodied in S. 71, that would improve the Board's supervisory authority over
bank holding companies, and the Board urges
the immediate enactment of these. I n addition,
this title w o u l d authorize the waiver of the
30-day notice requirement in the Bank Holding Company A c t in the case of emergency or
faihng bank situations. The Board believes
that enactment of this provision is extremely
important, and while it was not incorporated
in S. 71, the Board beheves it to be completely
n o n c o n t r o v e r s i a l and r e c o m m e n d s its immediate enactment.
Section 1307 of the title w o u l d require the
Board to promulgate regulations requiring that
each bank holding company and its banking
subsidiaries include on its board a ''reasonable" number of persons who are not affiliated
with the holding company or its subsidiaries.
The Board believes such a provision preempts the prerogative of shareholders under
both national and State law. T o our knowledge such a requirement is without precedent,
and we are aware of no showing of a compelling
need to interfere w i t h the rights of shareholders
in this regard.
Title X I I I of the bill also contains, in Sections 1308 through 1313, provisions that would
drastically alter the present regulatory scheme
for bank holding companies contained in the
B a n k H o l d i n g C o m p a n y A c t o f 1956, as
amended. As I noted in my introduction, the
Board is quite concerned that, due to the size
and complexity of H . R . 9086 and the number
of important issues covered therein, adequate
consideration may not be given as to the
desirability of these amendments.
The amendments would prohibit any bank
acquisition by a bank holding company if it
would result in the bank holding company
holding more than 20 per cent of the total
assets held by all banks and bank holding
companies in the State in w h i c h the bank is
located. We seriously question the desirabihty
of such a rigid asset limitation and do not
beheve any need has been shown to impose
such a hmitation. Recent studies have shown
no trend, on a nationwide basis, toward increased concentration during 1968 through
1975. I n f a c t , aggregate concentration declined. Further, during the period 1960-74
there was no over-all trend toward increased
Statewide concentration.
As a general matter, a requirement of this
nature could lead to anticompetitive market
protection for some banks. Furthermore, as
drafted, the limitation might have inequitable
results between various banking organizations
depending on whether the assets were interState or intra-State or perhaps derived f r o m
an international business, or State deposits
that may fluctuate. The focus on the total
assets approach also overlooks the impact of
p r e s e n t and f u t u r e b a n k - t y p e a u t h o r i t y
Statements to Congress
granted nonbank financial intermediaries that
might intensify competition to commercial
banks for some banking services.
Further, no single percentage figure would
be appropriate for all the States due to a
number of factors, including, among others,
the number of bank and nonbank competitors,
competition from out-of-State institutions, the
existing size distribution of competitors, the
recent history of bank expansion, and legal or
economic impediments to unrestrained competition such as home office protection laws.
The provision further interferes with the right
of a State to determine the desirable banking
structure for that State.
We note, however, that section 1308 would
allow the Board to deny a bank acquisition
that was not in the public interest even though
the anticompetitive effects of the acquisition
would not rise to the level of a violation of the
antitrust laws. We believe that this would
constitute a desirable clarification of existing
law.
The bill also makes numerous changes in
section 4(c)(8) of the Bank Holding Company
Act. A number of these changes are consistent
with present Board practices or make minor
changes in emphasis that would have no substantial effect on the administration of the act.
We would note, however, that the proposed
revised standards delete the provision of present law that permits the Board to differentiate
between activities undertaken de novo and
activities commenced by the acquisition of a
going concern. We beheve the authority to
encourage de novo acquisitions has promoted
competition, and we strongly recommend that
it be retained.
The Board is quite concerned with the requirement that a nonbank activity be not only
closely related to banking but also ' ' d i r e c t l y "
related and that it be not only a proper incident
thereto, but a ''necessary" incident. A l l of the
nonbanking activities presently permitted by
the Board were carefully considered under the
guidance furnished by the legislative history of
the 1970 amendments and after obtaining extensive public comment. A major change in
the standards for permissible activities such as
that contemplated in Section 1309 should only
897
be based on substantial factual evidence that
the change is needed. The Board's staff is
currently preparing a rather comprehensive
study and review of bank holding company
a c t i v i t y that w o u l d assist i n d e t e r m i n i n g
whether any change in the present standards
for permissible activities would be in the public interest. We believe a major change such as
suggested in Section 1310 should await the
outcome of this study and other factual evidence.
The Board believes that Section 1311 of the
bill relating to "sound and competitive financing of nonbanking activities" is generally consistent with existing Board authority and practices under the Bank Holding Company Act.
We do, however, object to the requirement
that intercompany transaction reports be
made available to the public, as these reports
contain sensitive information comparable in
some respects to bank examination reports.
The Board strongly objects to the additional
hearing and administrative procedures contained in Section 1312 et seq. The Board's
present procedures under the Bank Holding
Company Act are consistent with the Administrative Procedure Act and provide for an
adjudicative hearing on individual applications
when there are disputed questions of fact.
Section 1312 would depart from the Administrative Procedure Act by requiring a formal
hearing for the promulgation of regulations
and all individual case determinations whether
or not there are factual matters in controversy.
The courts and other authorities on administrative law have long recognized the distinction established by the Administrative
Procedure A c t between rulemaking and adjudication. Adjudication and a formal hearing are
required to determine facts about particular
parties, t h e i r a c t i v i t i e s , businesses, and
property. On the other hand, a rule-making
proceeding is less formal because typically the
issues do not relate to evidentiary facts as to
which the veracity and demeanor of witnesses
would be important. We believe that the precedents in administrative law demonstrate that
the public interest is safeguarded and best
served by avoiding the cumbersome procedures of formal adversary hearings. I n connec-
A898
Federal Reserve Bulletin • October 1976
tion with rulemaking, the experience of those
few agencies who use formal hearings is that
such rule-making proceedings are unreasonably lengthy. Accordingly, we beHeve that
the Board's present procedures should be continued.
Finally, we are concerned with the provisions requiring the Board to process a petition
to commence a proceeding to consider the
issuance, amendment, or repeal of any order
or regulation relating to nonbank activities.
We note that under the Administrative Procedure Act there is a present right for any person
to petition the Board for the adoption or
amendment of a regulation. Additionally, the
Board recognizes its responsibility to continually review its regulations and supervise on an
ongoing basis the operation of nonbank activities by bank holding companies. However,
we believe that the procedure established to
challenge the operation of individual companies provides a continuing possibility of
collateral attacks on a bank holding company
wishing to engage in a bank-related activity.
The continuing possibility of unfounded attacks could deter many bank holding companies from engaging in nonbanking activities.
This in turn would result in the curtailment of
the possible benefits obtained under the Bank
Holding Company Act from more innovative
and c o m p e t i t i v e services i n bank-related
fields.
I n conclusion, M r . Chairman, I would again
like to emphasize that the Board believes that
the provisions of H.R. 9086, which were originally embodied in S. 71, are constructive and
necessary. We commend the committee on
having included them in this bill and recommend their immediate adoption. While the
Board is in sympathy with a number of objectives of the additional provisions and might
support modified versions of some of the
proposals, we believe extensive study should
establish the necessity and desirability of any
additional legislation. The Board would be
happy to cooperate with and assist the committee in any such study it may wish to
undertake.
•
Statement
by Stephen
S. Gardner,
Vice
Chairman, Board of Governors of the Federal
Reserve System before the Subcommittee
on
Consumer Affairs of the Committee on Banking, Housing and Urban Affairs,
U.S.
Senate, October 4, 1977.
commends your committee for undertaking
this essential work.
I will begin today as I did in my House
testimony by mentioning the public benefits
that E F T can provide to our society. The
electronic fund transfer systems open up opportunities to broaden consumer payment alternatives and to improve consumer convenience and service while reducing the costs of
making payments. Direct deposit of Government payroll and social security benefit payments through automated clearinghouses has
already helped people receiving funds by improving the security and convenience of such
payments and has resulted in substantial cost
savings to the Government. Installation of
teller machines by the financial institutions
has offered consumers longer banking hours
and more convenient banking facilities at costs
much less than regular branches. The retailing
industry has successfully installed electronic
cash registers that have demonstrated the
M r . Chairman, the Board of Governors of the
Federal Reserve System is pleased to participate in your committee's hearings on consumer safeguards under the proposed "Electronic Fund Transfer Consumer Protection
A c t . " As you may know, I recently testified
on a similar bill before the Subcommittee on
Consumer Affairs of the House Banking, Finance and Urban Affairs Committee. It is
clear that the need f o r such consumer
safeguards in electronic fund transfers (EFT)
has been widely recognized—by the Congress, the Board, the National Commission on
Electronic Fund Transfers, and many representatives of the general public. The Board
Statements to Congress
convenience and cost savings expected of
EFT at the point of purchase.
But E F T is developing at a more moderate
and cautious pace than many predicted. The
major reasons for this slow development are
found in the many uncertainties that surround
the substitution of electronic systems for the
traditional use of paper in bills, checks, receipts, and ledgers. Consumers, businessmen,
and depositary institutions are unsure of their
rights and HabiHties in E F T systems. There are
antitrust questions that need to be clarified
since cooperation among competing depositary institutions may be necessary in many
markets to successfully introduce the new
technology. It is not surprising, then, that we
are applying only a fraction of the technology
we possess and that businesses are reluctant
to make the substantial investment necessary
to utiHze present know-how.
Clearly, the work of this committee can
speed the process by which we can realize the
cost savings and conveniences that our inventive technology can bring to the simple, normal daily tasks of life by helping establish a
legal framework for the rights, liabilities, and
responsibihties of participants in EFT. S. 2065
addresses consumer rights and interests and is
directed at quieting many of the fears. The
Board endorses the intent of the proposed
EFT consumer legislation.
The Board believes that consumer protection legislation should start with the premise
that keen competition is an aid to consumers
when b o t h suppliers and purchasers are
numerous. Competition is most Hkely to develop when there are many participants in the
marketplace. Therefore, legislation establishing a legal framework for E F T should make it
possible for any and all depositary institutions
to set up E F T plans for their customers. The
goal should be to afford individuals, small
businesses, and other users of E F T at least the
same breadth of choice among alternative
supphers of E F T services that they now have
among alternative suppliers of checking accounts. I f every depositary institution can
provide E F T capabilities to its depositors,
every depositary institution can compete effectively, and competition w i l l generate a
899
broad choice of alternatives for the public.
Limits on the ability of institutions to offer
EFT plans, whether imposed by legislation or
by the nature of E F T technology including
economies of scale, could result in the same
sort of h i g h l y c o n c e n t r a t e d m a r k e t that
characterizes the bank credit-card industry.
Such an outcome would probably not be in the
public interest.
The most important provisions of S. 2065
would prescribe the information the institution
supplies to the consumer as well as the substantive rights of the consumers. The Board
particularly supports the advance disclosure
of EFT terms. The Board believes that this
disclosure should be in easily understood language and should include a list of all of the
consumer's rights and remedies that concern
his EFT account. The bill's requirement for
semiannual disclosure of E F T terms, however, would increase E F T costs, and it is
d o u b t f u l that repeated disclosures w i l l
heighten consumer awareness.
The Board is also concerned about the prov i s i o n r e q u i r i n g semiannual r e n e w a l of
preauthorized transfers. This would add substantially to the costs of providing such transfers and b u r d e n consumers by r e q u i r i n g
periodic attention to a variety of authorization
dates at the peril of having an unplanned
interruption of automatic payments such as for
rent, utihties, insurance premiums, and so
forth.
The Board also endorses the concept of
descriptive periodic statements describing the
activity that has taken place in the consumer's
account. The Board recommends that the
statements i n c l u d e the t r a n s a c t i o n date,
amount, location, means of transfer, type of
transaction, other parties to the transaction,
and transaction number. A n appropriate descriptive statement is particularly important
because it will serve many functions now being
provided by cancelled checks.
S. 2065 would also require that EFT generate written documentation of v i r t u a l l y all
transactions: sales, loans, debits, and credits.
The cost of this broad requirement could nullify the benefits and conveniences E F T offers.
A requirement of such records at the point of
A900
Federal Reserve Bulletin • October 1976
sale or loan appears reasonable. Simply handing a receipt to the consumer presents few
logistical problems, entails no mailing costs,
and permits the E F T institution to obtain the
user's signature for potential comparison with
the account holder's in the event of a disputed
transaction.
However, concurrent mailing of a record
of a nonpoint-of-sale or loan transaction
to the consumer involves significant costs.
Since the t r a n s a c t i o n w i l l generate no
consumer signature, the degree of protection
afforded the consumer by this procedure has
l i m i t s . The B o a r d , t h e r e f o r e , questions
whether the nonpoint-of-sale or loan transact i o n , p a r t i c u l a r l y a p e r i o d i c deposit or
preauthorized transfer, warrants the expense
of concurrent documentation when it may
result in so Httle additional consumer protection and will add substantially to costs.
The Board commends the negative notice
provisions of S. 2065 for regular credits to an
EFT account as a partial solution to the documentation cost problem. The committee may
also wish to extend this approach to regular
debits.
The Board also approves of the bill's provisions on liability, error resolution, and the
prohibitions against compulsory use of EFT.
The Board endorses the limit proposed in S.
2065 on a consumer's l i a b i l i t y f o r unauthorized transfers by means of an E F T card.
This provision roughly parallels an earlier
Board recommendation. Unauthorized uses of
EFT cards, beyond minimal amounts, represent avoidable or insurable risks that the
Board believes institutions, not consumers,
are better able to bear.
The Board similarly approves of the provision in S. 2065 that makes financial institutions
solely liable for consequential damages suffered by the consumer as a result of a failure of
the financial institution to carry out transactions as ordered by the consumer, except
where the failure resulted from a technical
malfunction caused by an act of God or other
circumstances beyond the institution's control. This provision parallels a similar provision for checks in the U n i f o r m Commercial
Code.
The bill would provide that a financial institution shall reverse an electronic funds
transfer upon request of the consumer within
three business days after the transfer. The
provision in the bill for reversing purchase
transactions is quite similar to the customer's
present right to stop payment on a check. The
Board supports the intent of this provision.
However, there may be other worthy alternatives to an arbitrary reversal period such as
value dating, a system that permits the consumer and the merchant to agree on a future
date on which a payment will become final.
Mechanical and human errors will occur
under an E F T system as they do in the paper
payments system. Consumers have a particular reason under E F T to expect prompt error
correction. Errors may reduce or deplete the
funds in the consumer's account needed for
day-to-day living expenses. The Board, therefore, favors rapid error resolution and the
requirement of S. 2065 that statements contain
sufficient identifying information to enable the
consumer to detect rnistakes. The bill would
set different resolution deadlines depending on
when the consumer brings the error to the
institution's attention. The Board questions
the need for this distinction.
The bill would provide that financial institutions have a fiduciary duty to protect and
safeguard E F T deposit account information.
''Fiduciary d u t y " is a legal term of art encompassing a good deal of unstated meaning.
Applying this concept to E F T could change
the existing relationship between depositary
institutions and depositors from that of debtor
and creditor to one of trustee and beneficiary.
Thus, for example, a trustee is not permitted
to mingle the beneficiary's funds with his own,
whereas a depositary institution routinely
does so. The Board believes that a better
approach may be to prescribe with specificity
the scope of any institutional duty to protect
the consumer's privacy.
Another concern of the Board is that the bill
could have anticompetitive consequences.
Vigorous competition between financial institutions constitutes an important form of
consumer protection. The prohibition of S.
2065 upon circulation of E F T cards that con-
Statements
sumers have not requested can impose a substantial barrier to entry into the E F T market.
The new E F T institution faces more difficult
start-up problems even than those experienced by a credit-card issuer. A large base of
cardholders is essential to attract merchant
participants. W i t h o u t such a base of part i c i p a t i n g m e r c h a n t s , consumers w i l l n o t
find the system attractive. We should not
recreate the extreme concentration that presently exists in the credit card industry in
' ' d e b i t " or E F T cards.
E F T cards are inherently safer than credit
cards. Depositary institutions and consumers
are not exposed to any liability f r o m the
unsolicited issuance of E F T cards because the
card cannot be used without an access code—
that is, the personal identification number
(PIN)—or if the consumer does not have a
deposit account with the issuer. Moreover, the
bill properly provides that the depositary institution is fully liable for unauthorized uses of
an unaccepted card, that is, one that the
consumer has not a f f i r m a t i v e l y requested.
T h u s , the consumer gains f r o m enhanced
competition would seem to outweigh any additional consumer protections that a ban on
unsolicited issuance might provide. Further,
there may be a worthy compromise in permitting the unsolicited distribution of E F T cards,
while requiring that the access code necessary
for the card's use be sent only if the customer
accepts the plan.
Of equal importance is the resolution of
questions that w i l l be raised governing the use
of shared point-of-sale systems. While it is not
in S. 2065, surely the Congress will want to
give considerable attention to this issue. E F T
should serve the consumer by presenting as
few barriers as possible to the consumer's
access to all advantages of the network. Consumers should be able to make a purchase
f r o m any merchant willing to accept their E F T
card, regardless of which institution issued the
card. The consumer can get little benefit f r o m
this E F T account i f he cannot use his card in a
store having a terminal because the switching
network w i l l not accept the transaction. This
sharing issue was addressed by the National
Commission on Electronic Fund Transfers in
to Congress
901
its final recommendations, and the Commission appears to have taken a somewhat different view.
Finally, the Board notes that S. 2065 covers
E F T accounts held by nondepositary insitutions. Thus, i f the consumer uses E F T to
access his balance at a securities brokerage
house, mutual fund, or retail seller, he enjoys
the same safeguards as for his E F T balance at
a depositary institution. The Board endorses
the concept of uniform protection but hopes
that this bill w i l l avoid becoming accidentally
embroiled in the controversy over what institutions may offer banking services. As this
committee knows, the definition of a deposit,
the i n s t i t u t i o n s h o l d i n g deposits, and the
means by which depositors obtain access to
their funds have become increasingly flexible.
The Board supports competition in deposit
services, but believes that legislation should
address this issue separately f r o m E F T consumer p r o t e c t i o n ; indeed, separately f r o m
EFT.
Many people feel that E F T proponents have
focused attention upon E F T issues involving
technology and marketing and have not paid
sufficient heed to safeguarding consumers. S.
2065 is a most important step to balance these
concerns. That is the reason I have offered the
Board's strong support for the w o r k of this
committee on many of the key provisions in
the bill. Comments urging further study of the
possible anticompetitive effects of the bill and
the increased costs to the consumer are offered in the spirit of helping the committee
improve the legislation. The Board believes
that many of these problems can be resolved
after further careful study. W i t h your approval, M r . Chairman, I plan to submit a technical appendix for the record offering appropriate
suggestions for some of the points I have
raised this morning.^
I hope these comments have been helpful,
and I will be pleased to try to answer whatever
questions you may have.
•
^ The appendix to this statement is available on request
from Publications Services, Division of Administrative
Services, Board of Governors of the Federal Reserve
System, Washington, D.C. 20551.
A902
Federal Reserve Bulletin • October 1976
Statement
by Philip E. Coldwell,
Board of Governors of the Federal
System, before the Committee
on
Housing
and Urban Affairs,
U.S.
October 11, 1977.
Member,
Reserve
Banking,
Senate,
I am pleased to be able to discuss with this
distinguished committee the role that the Federal Reserve System plays in the Nation's
payments mechanism. M y testimony will describe the scope of Federal Reserve participation in the payments mechanism, and how that
participation serves the public interest. I n
addition, I shall address the issues of pricing
and access and t h e i r r e l a t i o n s h i p to the
deepening problem of- member bank withdrawal from the Reserve System.
The Federal Reserve System provides a
public alternative to private check collection
arrangements that ensures the safety,
solvency, and certainty of the national check
collection system. This operational role exerts
a public regulatory presence that protects the
interests of the general public in using checks.
Before the Federal Reserve System was established, p r i v a t e arrangements cleared all
checks and drafts, but these arrangements
were judged by the Congress and by the
designers of the Reserve System to be inefficient and a burden on commerce. These clearing arrangements also were inextricably intertwined with the pyramiding of balances at
correspondent banks—a primary contributing
factor to recurring money panics like the one
that occurred in 1907. The National Monetary
Commission that was set up in 1910 to study
solutions to the problem of money panics
recommended that an association of banks be
organized that would provide a nationwide,
centralized clearing union supported by the
Federal Government.
The Federal Reserve A c t was passed in 1913
at least partly to accomplish this objective,
although the Congress substantially altered
this original proposal—principally to require
membership by national banks and to increase
governmental oversight. Later, the Act was
amended to assign to the Federal Reserve
many of the payments functions that were then
performed by the Subtreasuries. As a result.
one major role of the System is that of providing a largely voluntary, nationwide, governmentally controlled clearing bank of questionable solvency. The other major payments role
of the System is to carry on functions of the
Subtreasuries, such as issuing Federal Reserve notes and serving as fiscal agent of the
United States. The Federal Reserve Act has
been amended on several occasions since the
System's role in the payments mechanism was
defined, but those sections dealing with the
payments role have hardly been altered.
As a consequence of carrying out its charter, the Reserve System exerts a pervasive
and beneficial influence on the Nation's payments mechanism. This influence is exerted
through four payments activities: cash, check
processing, wire transfers of funds, and automated clearinghouses. I should like to describe each activity briefly.
The cash operations of the Reserve Banks
involve the distribution of the supply of currency and coin for the economy. Since 1920
when the functions of the Assistant Treasurers
of the United States were transferred to the
Reserve Banks, the System has been authorized and directed by the Treasury to distribute available suppHes of currency and coin
directly to commercial banks. Important pubHe service activities of the System's cash
operations include counterfeit detection and
maintenance of a high quality of money in
circulation.
Currently, 37 Federal Reserve offices provide cash services to approximately 25,000
banking offices served by armored carrier for
currency and coin pick-up and delivery. During 1976, 7.0 billion pieces of currency and
12.6 billion pieces of coin were processed, and
2.6 billion pieces of unfit currency were destroyed. Including the cost of printing Federal
Reserve notes, amounting to $45.3 million,
System direct expenses for cash operations
were approximately $113 million during 1976.
Check collection operations comprise the
largest single activity of the Reserve Banks.
Although the Federal Reserve actually processes less than 40 per cent of all checks
written, the System is the major participant in
check clearing, having worked in cooperation
Statements to Congress
w i t h the banking industry over the years
through its operations and regulations to provide a smoothly f u n c t i o n i n g and efficient
check-clearing system. Last year the public
and private check collection systems handled
an estimated 28 billion checks, drawn on approximately 106 million accounts.
Each day some 50 million checks are transported in timely fashion by contract courier
and U.S. Postal Service facilities from Federal
Reserve processing sites to the institutions
upon which they are drawn or the payer
banks' designated processing centers. Fully 95
per cent of the checks processed by the System are deposited by member banks; the remaining 5 per cent are received from nonmember banks depositing at Federal Reserve
Regional Check Processing Centers. Because
some 40 per cent of the checks processed by
the System are deposited originally in banks
outside the Federal Reserve territory in which
they are payable, the System also employs an
extensive air charter network to move checks
among Federal Reserve offices. During 1976
the 48 Federal Reserve offices that process
checks handled more than 12 billion items;
processed approximately 2.8 million adjustment cases; and returned almost 143 milhon
dishonored or uncollectible checks to the
banks depositing them with the Federal Reserve. I n 1976 the direct expense to the Federal Reserve of check collection totaled $131.1
million.
The third major payments mechanism activity is the Federal Reserve Communications
System. The need to move financial and administrative data rapidly between offices has
existed since the early days of the Federal
Reserve System. To meet that need, the System operates communications facilities interconnecting Federal Reserve offices, the Board
of Governors, member banks, the Treasury
Department, and other Government agencies.
The speed and sophistication of these facilities
have improved through the years as communications technology has advanced. Three types
of messages are handled through the communications facilities: transfer of reserveaccount balances between member banks;
transfer of U . S . Government and Federal
903
agency securities; and administrative and
monetary policy-related information.
Reserve balances are t r a n s f e r r e d by
member banks to purchase or sell Federal
funds, to move correspondent bank balances
from one bank to another, and to shift funds to
other members on behalf of customers. The
communications network is used by the Treasury Department and Government agencies to
disburse and collect monies and to transfer
Treasury and Government agency securities.
I n 1976, 21 million such reserve balance transfers took place, amounting in the aggregate to
about $35.6 triUion. I n the same year 2.3
million securities transfers for $7 trilHon were
processed. The direct expense of transfers of
reserve-account balances between member
banks totaled $5.7 milHon.
The fourth payments mechanism activity of
the Federal Reserve System is operation of
automated clearinghouses. The automated
clearinghouse (ACH) concept was originated
by the b a n k i n g i n d u s t r y to u t i l i z e new
technology to slow or even to reverse the
growing volume and increased cost of processing paper checks. Over the past 5 years
bankers and thrift industry representatives
have formed associations to implement the
A C H concept in their regions. A l l but 2 of the
29 A C H associations have requested Federal
Reserve assistance—use of clearing and settlement facilities—in processing payments
contained on magnetic tapes. The two privately
operated A C H facilities use the transportation
network and reserve-account settlement facilities of the Federal Reserve. Currently the
volume of commercial payments processed by
Federal Reserve A C H operations approximates 800,000 items per month. Federal Reserve operation of automated clearinghouses
has been endorsed by the National Commission on Electronic Fund Transfers.
The Treasury Department uses the electronic payments processing capabilities of the
Federal Reserve, including the same general
procedures and computer systems used for
commercial A C H processing, for its program
of direct deposit of Federal recurring payments. Currently the volume of payments
made under the Government's direct deposit
A904
Federal Reserve Bulletin • October 1976
program is approximately 7.3 million items
monthly. By 1980 it is estimated that this
program will save the Treasury approximately
$25 million annually in reduced disbursement
costs. The total direct expense to the Federal
Reserve to provide both commercial A C H and
Government direct-deposit processing was
$1.6 million during 1976.
System participation in the payments mechanism provides significant benefits to consumers
and to business. For example, the acceptability
of consumers' checks is greatly enhanced
by the nationwide network of Federal Reserve offices and the speed with which those
offices process checks..In addition, the System grants uniform availability of credit for
checks drawn on similarly situated banks.
These facets of System participation in and
regulation of the payments mechanism reduce
the impact of the geographic location of the
banks on which the checks are drawn. Furthermore, obligations of all sizes can be settled
by check because the System collects all
items, large or small, at par on the same terms.
By reducing the time required to collect funds,
by passing credit on a uniform schedule, and
by collecting at par, the System reduces the
risk taken by merchants that accept checks.
Expeditious clearing also improves the functioning of financial markets generally by ensuring that funds in the clearing process are
immobilized for a relatively short time.
Finally, the presence of the System as a
major factor in the check-clearing process
permits the Nation's clearing arrangements to
be regulated in the public interest. The Uniform Commercial Code permits the regulations of the Board and the operating circulars
of the Federal Reserve Banks to govern many
of the terms and conditions for collection of
checks. By this mechanism, the System can
readily make desirable changes in the checkclearing process. I n the past decade many of
the innovations in the check collection mechanism, such as the Regional Check Processing
Centers—which have reduced the time required to collect checks—have been sponsored or implemented by the Federal Reserve
System. Similarly, establishment of the automated clearinghouses was achieved partly by
Federal Reserve i n v o l v e m e n t and assistance.
The presence of the Reserve Banks in the
payments mechanism also benefits commercial banks, particularly smaller and more remote ones, because the System stands ready
to collect checks at par for any member bank
on the same terms. The Reserve Banks provide an alternative to the services provided by
the correspondent banks. The private clearing
network processes 60 per cent of the checks
written in the country. But the existence of the
public alternative, which will clear all checks
on equal terms, has eliminated some of the
abuses that existed prior to 1914.
The Board holds the view that the difficulties characterizing the check-clearing system
prior to 1914 are inherent in the nature of the
clearing process, and that a valuable discipline
is imposed by a centralized nationwide clearing a u t h o r i t y — p u b l i c or q u a s i - p u b l i c —
performing a par-clearing role similar to that
now assumed by the Reserve Banks. There
does not appear to be any essential difference in
this respect between paper and electronic
clearing systems. Traditionally, enterprises of
such a centralized nature either are operated
by the Government or are governmentally
regulated.
Federal Reserve participation ensures that
the entire Nation has the benefit of a uniform,
basic level of payments mechanism services.
Banks that are remote from the financial centers or that have low volume are afforded very
nearly the same payments services by the
System that are available to the large city
banks. Only a centralized nationwide clearinghouse can provide for such uniformity of
service in check collection.
I n recent years changes in law and regulation have broadened the classes of institutions
capable of offering third-party payments accounts to their customers and have authorized
new types of payments instruments, such as
negotiable order of withdrawal (NOW) drafts
and credit union share drafts. Many of these
institutions can offer electronic payments services as well. The emergence of thrift institutions as participants in third-party payments
mechanisms has created a demand f o r
Statements to Congress
broadened access to Federal Reserve payments services.
I n the past the question of access was not
pressing. I f a bank wanted direct access to
System services, it could simply become a
member bank. However, this option is by law
not available to most of the new participants in
the payments mechanism. With the exception
of mutual savings banks, thrift institutions
cannot become members of the System. A t
least partly to circumvent this prohibition, we
have recently seen groups of credit unions
purchasing banks, thereby obtaining access to
Federal Reserve services. Similarly, a group
of mutual savings banks in the State of Washington formed a bank and applied for membership. A group of nonmember commercial
banks in Minnesota has done the same thing.
Thrift institutions also have sought direct access to Federal Reserve-operated automated
clearinghouse facilities, and the Board has
responded with its ' i n t e r i m " access policy of
January 1976, granting such access.
We previously have suppHed the committee
with a description of the current access arrangements for the System's payments services. We believe these access arrangements
are equitable, and we do not believe that any
depositary institution has suffered serious
competitive disadvantage because of this access policy.
The policy attempts to balance a number of
conflicting considerations. First, services produced by a quasi-public organization should
be available to all depositary institutions on the
same terms. But because most thrift institutions cannot become members, access cannot
be provided on cost and benefit terms equal to
those afforded members. Institutions that are
not eligible for membership cannot receive the
full benefits or bear all of the costs of membership.
Second, if the System were to charge for its
services and to equaHze other terms of access
between members and nonmembers, any inequities in costs and benefits arising solely
from usage of payments mechanism services
could be ehminated. However, charging for
services would inequitably impose another
cost on member banks over and above that of
905
maintaining interest-free reserves. Over-all
terms for use of the services would still not be
the same.
Finally, the System could charge for its
services in order to encourage private competition. But even assuming that private competition could develop, it is by no means evident
that the outcome—including the effect on the
efficiency of the payments mechanism on the
whole, on the level of service available to
individual consumers and businesses, and on
the erosion of membership in the System—
would be in the public interest.
Recognizing the possibility that charging for
payments mechanism services might have beneficial effects under some circumstances, the
Board stated in conjunction with the ''interi m " access poHcy that it intended to pubHsh a
pricing schedule for comment. Since that time
the problem of establishing charges has been
investigated in much greater detail, and the
benefits of charging have been seriously questioned. One cannot k n o w f o r certain the
ramifications of charges by the Federal Reserve upon the present level of services provided by correspondent banks, upon the potentially differing impact on institutions of
different size, volume, and location, or upon
the competitive effects of the significant shifts
in payment flows that might result from imposing charges. Furthermore, the administrative
costs of operating a system of charges would
lessen any possible benefits.
Our studies show that the benefits of charging would be minimal if charges were not
imposed upon all users of the services. Because the overwhelming majority of the System's volume is deposited by member banks,
any approach omitting the member banks from
such charges would have very little impact on
improving efficiency, would quite probably be
inequitable, and would probably not induce
private sector competition. Member banks already pay indirectly for the payments services
they receive, and imposing additional charges
upon them would be inequitable.
The compensation member banks provide
to the System for these and other services they
receive takes the form of earnings foregone on
required reserve balances held on deposit with
A906
Federal Reserve Bulletin • October 1976
the Reserve Banks. These reserves are partly
analogous to the balances that correspondent
banks require from their respondents. Reserve
balances total well in excess of $25 billion. Our
studies have shown that these balances are
larger than necessary to compensate the System for the services member banks receive,
and they also are larger than the compensating
balances that would be required if all of these
services could be and were provided by the
correspondent banking system. Of course, the
balances required of members serve many
other functions, including those related to
monetary policy.
Imposition of additional charges related to
System services would have the effect of
increasing the operating costs of member
banks by comparison with the costs of nonmember institutions. The relationship between
the value of services received by members
from the System and the earnings foregone on
member reserve balances w o u l d become
further distorted. Thus, the erosion of System
membership that has been under way in recent
years would be Hkely to accelerate.
The Board beHeves that its responsibility to
the public interest under the Federal Reserve
Act does not permit it to take actions that
aggravate the loss of membership. For that
reason, the Board is not inclined to change its
present access and pricing policy unless and
until the special costs of belonging to the
Nation's central banking system are recognized and offset. I f S. 2055 is enacted, the
Board has stated that it will make provision for
equitable access to System clearing services
for all institutions holding N O W reserves.
However, the Board does not believe that it
would be prudent to impose upon depositary
institutions another major change, such as the
introduction of additional charges for System
services, until the transition costs arising from
the introduction of N O W accounts have been
largely assimilated.
Once the burden of membership has been
eliminated and the transition to nationwide
N O W accounts is well under way, the Board
could consider introduction of full access and
pricing based upon three principles. First, all
depositary institutions could be permitted di-
rect access to payments services. Second,
institutions could be charged for the services
used, either by holding compensating balances
at the Reserve Banks or by fees paid in cash.
Third, any depositary institution could be
permitted to open a clearing account at Federal Reserve Banks for use in settling transactions with the Reserve Banks. The balance
required in such an account—in addition to
any compensating balances the institution may
choose to hold—would have to be sufficient to
pay for the amount of the checks and other
items that the Reserve Bank would charge to
the account each day. Otherwise, overdrafts
on the reserve account might occur.
As to the schedule of charges to be imposed
under these principles, many difficult poHcy
issues as well as some complex accounting
questions must be dealt w i t h before the
schedule can be determined. It may appear
easy to compute prices for the services;
theoretically one need only add up the total
cost of providing the service, divide by the
amount of service provided, and add whatever
mark-up is appropriate for the situation. I n
practice, there are many unresolved questions. To what service should we assign a
specific portion of costs incurred to carry out
multiple functions? Should long-run or shortrun costs be employed? Over what geographic
area—local or national—should prices be uniform? Other technical questions involve cost
accounting. The expense data collected by the
System are adequate for auditing and expenditure control purposes, and they suffice for
management information about the efficiency
of Reserve Bank operations; but for purposes
of charging, they may not be comparable with
cost information collected by private industry.
Further examples of questions to be resolved
include: Should System prices include a return
on the capital employed, and if so, at what
rate? Should capital be valued at historical or
replacement cost? H o w should taxes be
treated? A myriad of such issues have been
identified and are being studied prior to consideration by the Board. These difficulties are
technical, but the Reserve System could resolve them in one way or another. They are
not the principal impediment to introduction of
Statements to Congress
charges for System services. The main impediment is the fact that charging would exacerbate the membership problem.
The Congress created the Reserve System
to be a largely voluntary association of banks,
attracting membership broadly from the entire
industry. I n this way the widest variety of
viewpoints, interests, and needs could be
brought to the attention of the Board in the
formulation of monetary policy, discount and
loan policy, and operating policy toward the
payments mechanism. Continuing erosion of
membership threatens to alter the very nature
of the System, cutting off this broad interaction with the banking industry, and through
the industry, with its customers. Because the
burden of membership falls more heavily on
smaller banks, the erosion of membership is
most pronounced among those institutions.
There is a very real danger that if the erosion
continues, the Nation's central bank will become an organization to which only the larger
banks belong. I hope we can all agree that
such an outcome is not in the best interests of
monetary policy formation nor of the public
generally.
There are other cogent reasons in the public
interest to prefer the Reserve System to have
as many members as possible. One of these
reasons is the part that the member banks play
in monetary management. Balances held at the
Reserve Banks serve as the fulcrum for the
economic stabilization actions of the central
bank. Required reserve balances enable the
Federal Reserve to gauge the Hkely effect of
its monetary management actions on the supply of money and of bank credit. As more and
more transactions balances are held by the
public at institutions that are not subject to
reserve requirements, monetary policy inevitably becomes less precise, and prediction of
the effect of particular policy alternatives becomes more uncertain.
Furthermore, the implementation of monetary policy is critically dependent upon timely
and accurate data flowing to the System's
money managers. A t the present time, only
member banks provide the needed data in the
time frame to make it most useful Cooperative efforts with the Federal Deposit Insurance
907
Corporation (FDIC) are just beginning to provide a flow of data from a sample of nonmember banks. As thrift institutions take on
bank-like payments powers, their actions will
have an increasing impact upon monetary
management. With respect to balances providing such bank-Hke transactions services, thrift
institutions should provide the same data and
be subject to the same reserve requirements as
commercial banks. Perhaps an equally important aspect of membership is its relationship to
the safety and soundness of the banking system. Only member banks have ready access to
the discount window and to the Federal Reserve counsel and assistance that accompany
use of the window. Ready access to adjustment credit cannot be guaranteed by the correspondent banking system—especially in
times of stress in financial markets. Access to
the discount window may be a major benefit to
member banks; but more important, it is the
ultimate guardian of our banking system
against Hquidity crises. Less obviously, the
mere holding of deposits at Reserve Banks
increases the soundness of the banking system.
Reserve balances are essentially demand deposits held in riskfree form. The same balances held at correspondent banks would be
subject to some risk, however small. Therefore, the greater the portion of the banking
system's assets that is held at Reserve Banks,
the lower the riskiness of the banking system
as a whole.
I have dwelt at length this morning on the
reasons that broad membership in the Federal
Reserve is in the public interest. I t is for those
reasons that the Board is so concerned about
the accelerating erosion of membership. Basically the cause of the loss of members is the
burden of earnings foregone by members on
the sterile reserves that they hold at the Reserve Banks.
There are a number of techniques that could
be employed to equalize the costs of reserve
requirements between member and nonmember depositary institutions. Uniform reserve requirements would be the best and the
simplest solution. It would impose the costs of
sterile reserves equally on all depositary institutions and provide significant benefits for
A908
Federal Reserve Bulletin • October 1976
monetary management. A n d it could do so
without weakening our dual banking system or
independent thrift institutions. However, the
Congress has not been convinced of the ultimate need for such complete coverage.
Another way to equalize costs is to lower
reserve requirements to the degree necessary
to offset the costs of the excess of reserves
over the value of services received. Such
action would require lowering of the legal
limits for reserve requirements. This solution
has the disadvantage that the "insurance"
value of reserves would be reduced because a
smaller proportion of the total assets of the
banking system would be held in risk-free
reserve balances.
Yet another way in which benefits could be
equated with costs is by increasing the type,
quantity, and quality of services provided by
the Reserve Banks. Providing additional services, p a r t i c u l a r l y to smaller banks, could
upset traditional banking patterns; in any case,
the System might not be able to provide attractive services in sufficient quantity to offset the
earnings lost on the sterile reserves. Finally,
this lost income could be offset by the payment of interest on reserve balances. Interest
on reserves affords the greatest flexibility,
while interfering least with the existing institutional arrangements in the banking industry.
Furthermore, it makes explicit the fact that the
System is offsetting the special costs of membership.
The Board believes that Title I I of S. 2055 is
the best presently available alternative for
resolving the membership problem, and we
trust that it will be enacted. I f nationwide
N O W accounts are authorized, the banks offering such accounts will face immediate cost
increases that will reduce net earnings and
force further consideration of the costs of a
sterile reserve requirement. Moreover, with
new competition for transaction accounts,
banks may feel it necessary to protect against
a loss of deposits. These forces could bring
even greater pressure on membership, and the
provisions of Title I I will be essential to prevent an acceleration of withdrawals. Whether
or not N O W accounts are extended nationwide, however, the Board beheves that the
case for rehef of the burden of membership is
overwhelming and urges the adoption of Title
I I of S. 2055.
M y testimony today has been lengthy and
somewhat technical. I apologize for both of
these shortcomings. But the issue of the Federal Reserve's role in the payments mechanism is a complex and technical one. Because
the System's role is justified by the benefits
provided to the public interest, costs arising
from that role should not be imposed mostly
upon the minority of banks that are members
of the System. I hope I have been able to
convey to this committee some of the sense of
urgency that the Board feels about the risks
posed by the decline in System membership.
909
Record of Policy Actions
of the Federal Open Market Committee
M E E T I N G H E L D O N A U G U S T 16, 1977
Domestic Policy D i r e c t i v e
The information reviewed at this meeting suggested that real output
of goods and services—which had increased at an annual rate of 6.4
per cent in the second quarter, according to preliminary estimates of
the Commerce Department—was growing less rapidly in the current
quarter. A t the same time the rise in average prices, as measured by
the fixed-weighted price index for gross domestic business product,
appeared to be slowing from that of the second quarter, estimated to
have been at a 7.0 per cent annual rate. Staff projections suggested
that growth in real GNP was likely to remain less rapid over the
remainder of 1977, and to slow a little further in 1978. The projections also suggested that the rate of increase in prices would
moderate from that in the first half, but would still remain high.
According to the staff projections, rising activity in a number of
sectors would contribute to a continuation of the economic expansion over the year. Growth in consumer spending, which had slowed
appreciably in the second quarter, was projected to pick up gradually. Relatively strong growth was anticipated in business capital
outlays, and inventory investment seemed likely to continue as an
expansive factor, although much less so than in the first half of 1977.
Increases in Federal purchases of goods and services were expected
to remain substantial. Spending by State and local governments was
projected to continue rising briskly, in part because of the stimulus
of expanded Federal pubHc works and job-related grant programs.
On the negative side, slow export growth and rising imports seemed
likely to exert a drag on economic activity over much of the
projection period. And the increase in residential construction
activity was expected to level off as the period progressed.
In July industrial production rose by 0.5 per cent, a little less than
in June and roughly half of the substantial increase in May. The rate
of capacity utilization in manufacturing edged higher, to an esti-
A910
Federal Reserve Bulletin • October 1976
mated 83.7 per cent. The July rise in production reflected sizable
increases in the output of consumer durable goods and business
equipment. Production of nondurable consumer goods changed
little, and steel output declined. Auto assemblies rose slightly, but it
was expected that production schedules would be reduced more
than usual in August by the beginning of the changeover to the new
model year.
Nonfarm payroll employment expanded by more than a quarter of
a million in July, half again as much as in June, with factory jobs
rising by 70,000. According to the household survey data, however,
total employment—after increasing
million between December
and June—declined in July, due to a sharp reduction in agricultural
jobs. The labor force also contracted in July, almost wholly as a
result of reduced participation by teenagers, and the unemployment
rate decHned 0.2 of a percentage point, returning to the May level of
6.9 per cent.
Personal income had advanced briskly during the first half of 1977
as a result of the large gains in employment. The rise in wage and
salary payments slowed in June, but for the second quarter as a
whole the increase was the largest since the tlrst quarter of 1976. I n
July wage and salary payments apparently rose at a moderate rate,
and growth in personal income was bolstered by a cost-of-living
increase for social security recipients.
Available reports suggested that corporate profits had improved
during the second quarter. Although comprehensive data were not
yet available, the information at hand implied a second-quarter level
of corporate profits that was significantly above the relatively low
levels recorded in the third and fourth quarters of 1976 and the first
quarter of 1977. As a proportion of GNP, however, corporate profits
still remained below their longer-run average and well below previous postwar peaks.
The dollar value of retail sales had increased 0.5 per cent in July,
according to the advance report. However, data for June—which
had initially indicated no change from May—had been revised to
show a decline of 1.3 per cent. For the second quarter as a whole the
value of retail sales was now estimated to have risen 1.6 per cent,
down from the eariier estimate of 2.1 per cent. I n July there were
sizable advances in sales at stores in the G A F (general merchandise,
apparel, furniture and appliance) grouping. But auto sales fell to an
Record of Policy Actions of FOMC
annual rate of 10.8 million units, from the near-record pace of 11.8
million units in June.
Businesses appeared to be making prompt adjustments to evidence
of developing imbalances in inventories of nondurable goods. I n
June the book value of such inventories declined at both manufacturers and wholesalers—at the latter, for the second consecutive
month—^following large increases earlier in the year. Inventories of
durable goods continued to rise at a relatively rapid rate at both
manufacturers and wholesalers, but the growth was about in line
with the advance in sales.
Private housing starts declined to an annual rate of about 1.8
million units in June, the latest month for which data were available.
This was close to the average rate that had prevailed since late 1976.
I n the second quarter as a whole, single-family starts—at an annual
rate of 1.4 million units—were the highest for any quarter on record.
Mortgage lending activity had remained strong in recent months; the
rate of growth in mortgage debt outstanding was estimated to have
been at a record during the second quarter, and it appeared to have
risen somewhat further in July.
New orders for nondefense capital goods increased by about 5 per
cent in June. Contract awards for commercial and industrial
buildings—as measured in terms of floor space—edged off from the
high May level; for the second quarter as a whole, however, they
were 4.5 per cent above their level in the first quarter.
The index of average hourly earnings for private nonfarm production workers rose in July at an annual rate of
per cent—close to
the average rise over the preceding 18 months. Major collective
bargaining settlements in the first half of 1977 provided for first-year
wage increases averaging 8.0 per cent, compared with an average of
8.4 per cent under contracts negotiated in 1976. On the other hand,
compensation per hour in the private nonfarm business sector rose
at an annual rate of about 9.5 per cent in the first half, a little faster
than in 1976.
The wholesale price index for all commodities, which had decHned in June, was about unchanged in July. Average prices for farm
products and foods—after having risen sharply in the early months
of 1977—declined for the second successive month. Average prices
for industrial commodities continued to advance but at a more
moderate pace than in the earlier months of the year.
911
A912
Federal Reserve Bulletin • October 1976
The consumer price index in June rose 0.6 per cent—about the
same as in the preceding 3 months. While the advance for commodities other than foods slowed to 0.2 per cent, the increases for
foods and for services edged up to 0.8 per cent.
By the time of this Committee meeting, the average value of the
dollar against leading foreign currencies had recoverd more than 1
per cent from the low reached on July 25, but it was still below its
late-June level. The strengthening of the dollar since late July
reflected reaction in the foreign exchange markets to statements by
U.S. officials indicating the importance that the United States
attaches to maintaining the strength of the dollar, and also to the
recent relative rise in interest rates on dollar-denominated assets.
The dollar appreciated most sharply against the German mark and
the Japanese yen. It depreciated against sterling, however, after
authorities in the United Kingdom elected to discontinue their
earlier policy of maintaining a target ceiling rate for sterling defined
exclusively in terms of the U.S. dollar.
The U.S. trade deficit rose sharply in June as imports rebounded
from the somewhat reduced level in May and exports declined. For
the second quarter as a whole, the trade deficit as measured in the
international accounts was at an annual rate of $31 billion.
A t U.S. commercial banks, total credit expanded slightly faster in
July than in June, but the pace in July remained below the average
for the first half of the year. Holdings by banks of U.S. Treasury
securities declined sharply in July, while their holdings of other
securities increased moderately. Total loans rose more rapidly than
in any other month since last October, reflecting strength in most
major categories. However, business loans grew considerably less
than in June, when corporations had borrowed to finance an
unusually large volume of Federal income tax payments. Also, the
outstanding volume of commercial paper issued by nonfinancial
corporations declined slightly in July.
Growth in the narrowly defined money stock (M-1) accelerated to
an annual rate of about 18 per cent in July. While much of the
increase apparently was temporary, part seemed to reflect rising
transactions demands for money. For the 7 months ending with July,
M - 1 grew at an annual rate of nearly 8 per cent.
Growth in the more broadly defined measures of money (M-2 and
M - 3 ) also accelerated sharply in July, to annual rates of about 17 and
Record of Policy Actions of FOMC
16 per cent, respectively. The high rates of expansion in these
measures were due primarily to the large increases in M - 1 , but
inflows of the time and savings deposits included in M - 2 and M - 3
also picked up from their reduced rates in June. For the 7 months
ending with July, M - 2 and M - 3 grew at annual rates of 10 and 11 per
cent, respectively.
A t its July meeting the Committee had decided that growth in M - 1
and M-2 in the July-August period within ranges of W2 to IV2 per
cent and 6V2 to lOVi 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 5% per cent. The
Committee had agreed that if growth rates in 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 SVA to 5% per cent.
Data that had become available in the days immediately following
the July meeting suggested that over the July-August period both
M - 1 and M - 2 would grow at rates in the upper parts of their specified
ranges. These data were considered especially tentative, however,
because unusual patterns in the figures received just after the power
failure in New Y o r k City suggested that the failure might have
introduced statistical distortions. The System Account Manager,
therefore, continued to seek a Federal funds rate of about 5% per
cent. Later, however, when new data not only confirmed the initial
signs of strength but also suggested that growth in the aggregates
would be somewhat above the upper limits of the specified ranges.
System operations were directed at achieving a higher Federal funds
rate. During the statement week ending August 3, the funds rate
averaged 5.80 per cent, approximately equal to the 5% per cent
upper limit of the Committee's range.
Information that became available on August 4 suggested that the
growth rates in the aggregates in the July-August period would be
well above the ranges specified by the Committee, and on August 5
the Committee voted to increase the upper limit of the range for the
funds rate to 6 per cent. I t was understood that the Manager would
use this additional leeway very gradually and only in the event that
the aggregates continued to register values far in excess of the
Committee's objectives. When such strength in the aggregates did
913
A914
Federal Reserve Bulletin • October 1976
persist, the Account Manager aimed at a Federal funds rate of about
6 per cent.
I n markets for short- and medium-term securities, interest rates
generally rose by % to Vi of a percentage point over the intermeeting period. Yields on corporate and municipal bonds, however,
showed little change over the period, and those on Treasury bonds
posted only small advances.
During the 4 weeks of the inter-meeting period the U.S. Treasury
raised about $4.0 biUion of new money in securities markets,
including $3.0 billion obtained in connection with its mid-August
refinancing. Issues offered in the refinancing consisted of $3.0 billion
of 3-year notes, $2.25 billion of 7-year notes, and $1.0 billion of
(reopened) I W i year bonds.
I n July the volume of new publicly offered corporate bonds was
slightly larger than in June and was above the monthly average for
the second quarter. Offerings by industrial issuers—which had been
exceptionally low in June—were at their highest level since December 1976, while new issues by utilities were below their advanced
second-quarter pace. The volume of new State and local government
bonds dropped more than seasonally during July, following a record
supply of new issues both in June and for the second quarter as a
whole. The heavy volume of new municipal offerings in recent
months included a large number of advance refundings, as well as
issues offered earlier than originally planned, apparently in the
expectation that interest costs would rise later in the year.
Average prices of common stocks traded on the New Y o r k Stock
Exchange declined during the inter-meeting period-- i n the case of
one widely used index, to the lowest level since early 1976. Indexes
of issues traded on the American Stock Exchange and over the
counter also declined somewhat during the period, but they remained near their highest levels since 1973.
I n markets for home mortgages, average interest rates on new
commitments for conventional loans were relatively stable in the
weeks just prior to this meeting, following small advances in late
June and early July. Meanwhile, yields in the secondary market for
home mortgages generally edged higher.
I n the Committee's discussion of the economic situation, the
members agreed that the expansion was likely to continue for some
time. Several members suggested that the apparent moderation in
Record of Policy Actions of FOMC
economic growth from the rapid pace of the first half of the year was
an essentially healthy adjustment; continued expansion at the earlier
pace might well have led in time to a reacceleration of inflation and
created price distortions that would have brought the expansion to
an early end. I t was observed that the economy was experiencing
few imbalances at present and that needed adjustments in business
inventories were being made promptly. The view was widespread
among members that the upward trend of business capital investment would persist and very likely would strengthen.
While the members agreed that the economic expansion was likely
to continue, they differed regarding its probable profile over the
quarters ahead. Specifically, several members thought that the rate
of economic growth was likely to be slower in the second half of
1977, and faster in the first half of 1978, than suggested by the staff
projections. With respect to the second half of 1977, these members
thought that spending on consumer goods and housing would rise
less than indicated, and they found it difficult to identify offsetting
sources of strength. For the longer run, however, they believed that
economic growth would be fostered by sustained increases in
business capital outlays and in spending by Federal and State and
local governments. I t was suggested that such a pattern might well
be associated with a slower rate of price advance than that projected
by the staff.
Other members of the Committee indicated that, while they
expected more strength in the economy in the second half of 1977
than their colleagues did, they were not persuaded that the rate of
growth would rise after the turn of the year. I n this connection they
identified several potential problems. One was the possibility that
the recent upcreep in unit costs of production relative to selling
prices might continue, with a consequent further narrowing of profit
margins. I t was noted that when this process had developed in the
past, an economic downturn had typically occurred within 1 to 2
years. Other potential problems mentioned were the recent rapid
increase in consumer credit and the evidence of speculation in some
real estate markets. One member of the Committee, in commenting
on the erosion of profit margins, observed that businesses did not
appear to be pressing as actively as they might to hold labor costs
down, fearing the impact of strikes and assuming that inflation
would continue.
915
A916
Federal Reserve Bulletin • October 1976
I n the discussion of the outlook for business investment, it was
noted that outlays were falling short of what might have been
expected on the basis of past cyclical expansions, even in industries
where the need for increased plant and equipment spending was
clearly evident. A number of members expressed the view that
narrow profit margins were tending to constrain investment spending. One member offered the hypothesis that a more typical increase
in such spending might continue to be delayed until profit margins
were widened by increases in product prices as capacity limits were
approached. Among other factors mentioned as inhibiting investment was the unusual degree of uncertainty prevailing in business
circles, particularly with respect to public policy on such matters as
inflation control, energy, and tax reform.
Several members of the Committee cited the recent declines in
stock prices as evidence of uncertainties about the prospects for
corporate profits. I n the discussion Committee members identified
other factors they believed might help to account for some of the
weakness in stock prices. One was the restructuring of investment
portfolios being undertaken by many institutional investors to
increase emphasis on fixed-rate instruments. Another was efforts by
stockholders to realize accumulated capital gains, as a precaution
against the possible enactment of legislation limiting the special tax
treatment of capital gains.
A t its July meeting the Committee had agreed that from the
second quarter of 1977 to the second 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 , 4 to 6V2
per cent; M - 2 , 7 to 9V2 per cent; and M - 3 , SV2 to 11 per cent. The
associated range for the rate of growth in commercial bank credit
was 7 to 10 per cent. It was agreed that the longer-run ranges, as well
as the particular aggregates for which such ranges were specified,
would be subject to review and modification at subsequent meetings.
I n considering policy for the period immediately ahead, members
of the Committee noted that growth in the monetary aggregates was
expected to slow markedly in August and September. Because of the
sharp increases in July, however, expansion in the third quarter as a
whole—particularly in M-1—would be relatively rapid. I t was observed that considerably slower growth rates would be needed in
Record of Policy Actions of FOMC
subsequent quarters if monetary growth for the year ending with the
second quarter of 1978 was to be kept within the ranges that the
Committee had decided upon in July.
While the views of members on appropriate short-run policy did
not differ greatly, a number of members placed particular stress on
the need to resist further sizable increases in the monetary aggregates, noting that continued rapid growth would foster inflationary
expectations and weakening of confidence within the business community. Other members put more emphasis on the sizable increase
that had occurred since late A p r i l in the Federal funds rate and other
short-terrn interest rates, and some expressed reluctance to seek
further tightening in the money market at a time when growth in
economic activity was showing signs of moderating. These members
suggested that, in the absence of unusual behavior in the monetary
aggregates, it would be desirable to maintain relatively stable
conditions in the money market for the time being.
The members agreed that, in view of the July bulge in the
monetary aggregates, no easing of money market conditions should
be sought in the coming interval even if growth rates in the
aggregates during the August-September period appeared to be
quite low. For M - 1 , most members favored a growth range for the
August-September period of 0 to 5 per cent or 0 to 6 per cent; a few
preferred slightly higher ranges. F o r M - 2 , most members favored a
range of 3 to 8 per cent.
A l l members of the Committee favored directing inter-meeting
operations initially toward the objective of maintaining the Federal
funds rate at about the prevailing level of 6 per cent. Views differed
somewhat with respect to the degree of leeway 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,
but most members preferred ranges for the funds rate of
to 6V4
per cent or
to 6V2 per cent. Some members suggested that more
weight than usual should be placed on money market conditions in
the directive to be issued to the Federal Reserve Bank of New Y o r k ,
but a majority preferred to continue to stress the monetary aggregates.
A t the conclusion of the discussion the Committee decided that
growth i n M - 1 a n d M - 2 over the August-September period at annual
rates within ranges of 0 to 5 per cent and 3 to 8 per cent.
917
A918
Federal Reserve Bulletin • October 1976
respectively, would be appropriate. I t was understood that i n
assessing the behavior of these aggregates the Manager should
continue to give approximately equal weight to the behavior of M - 1
and M - 2 .
I t was the Committee's judgment that such growth rates were
Hkely to be associated w i t h a weekly-average Federal funds rate of
about 6 per cent. The members agreed that i f growth rates of the
aggregates over the 2-month period appeared to be deviating significantly f r o m 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 5% to 614 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 i f 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 N e w Y o r k :
The information reviewed at this meeting suggests that real output
of goods and services is growing less rapidly in the current quarter
than in the second quarter. In July industrial output rose a little less
than in June. The rise in payroll employment in nonfarm establishments was substantial. According to the household survey data, total
nonagricultural employment was unchanged and the unemployment
rate edged down to 6.9 per cent, the same as in May. The dollar value
of total retail sales rose somewhat, after 2 months of decline. The
wholesale price index for all commodities was about unchanged in
July; average prices of farm products and foods declined sharply
further, and average prices of industrial commodities continued to rise
at a more moderate pace than in the early months of 1977. The index
of average hourly earnings has continued to advance at about the
same pace that it had on the average during 1976.
The weighted average exchange rate for the dollar against leading
foreign currencies has recovered more than 1 per cent from the low
point reached in late July. In June the U.S. foreign trade deficit rose
sharply, and the deficit was larger for the second quarter as a whole
than for the first.
The increase in M-1 was exceptionally large in July. Inflows to
banks of the time and savings deposits included in the broader
monetary aggregates strengthened, and growth in M-2 and M-3 also
accelerated sharply. Business short-term borrowing moderated from
Record of Policy Actions
of FOMC
the rapid pace in June. Interest rates on short- and intermediate-term
market instruments have risen appreciably in recent weeks, while
yields on longer-term bonds have changed little.
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
pattern of international transactions.
At its meeting on July 19, 1977, the Committee agreed that growth
of M-1, M-2, and M-3 within ranges of 4 to 6V2 per cent, 7 to 9V2
per cent, and SV2 to 11 per cent, respectively, from the second quarter
of 1977 to the second 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-1 and M-2 on a path beheved 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 August-September period to be within the ranges of 0 to 5
per cent for M-1 and 3 to 8 per cent for M-2. In the judgment of the
Committee such growth rates are hkely to be associated with a weeklyaverage Federal funds rate of about 6 per cent. If, giving approximately
equal weight to M-1 and M-2, it appears that growth rates over the 2month period will deviate significantly from the midpoints of the
indicated ranges, the operadonal objective for the Federal funds rate
shall be modified in an orderly fashion within a range of 5% to 6V4
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 acfion: 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 i n the
BULLETIN.
919
920
Law Department
Statutes, regulations, interpretations, and decisions
MEMBERSHIP OF
STATE
B A N K I N G INSTITUTIONS
THE FEDERAL RESERVE
B A N K HOLDING
IN
SYSTEM;
COMPANIES
The Board of Governors has amended its Regulations H and Y to provide for notices by State
member bank clearing agencies of disciplinary
sanctions and for stays and appeals of such actions.
Effective October 3, 1977, section 208.8 is
amended by adding the following new paragraphs
(g), (h), and (i) as follows:
SECTION 2 0 8 . 8 — B A N K I N G
PRACTICES
(g) S T A T E M E M B E R B A N K S
CLEARING AGENCIES
AS
REGISTERED
(1) Requirement
of
notice.
Any
State
member bank or any of its subsidiaries that is a
registered clearing agency pursuant to Section
17A(b) of the Securities Exchange Act of 1934 (the
' A c t " ) , which imposes any final discipHnary sanction on any participant therein, denies participation
to any applicant or prohibits or limits any person in
respect to access to services offered by such registered clearing agency, shall file with the Board and
the appropriate regulatory agency (if other than the
Board) for a participant or applicant notice thereof
in the manner prescribed herein.
(2) Notice
of final
disciplinary
action.
A n y registered clearing agency for which the
Board is the appropriate regulatory agency that
takes any final disciplinary action with respect to
any participant shall promptly file a notice thereof
with the Board in accordance with subparagraph (3)
of this paragraph. For the purposes of this paragraph 'Tmal disciplinary action" shall mean the
imposition of any disciplinary sanction pursuant to
§ 17A(b)(3)(G) of the Act or other action of a
registered clearing agency which, after notice and
opportunity for hearing, results in any final disposition of charges of:
(A) one or more violations of the rules of such
registered clearing agency; or
(B) acts or practices constituting a statutory
disqualification of a type defined in subparagraph
(D) or (E) (except prior convictions) of Section
3(a)(39) of the Act.
H o w e v e r , i f a registered clearing agency fee
schedule specifies certain charges for errors made
by its participants in giving instructions to the
registered clearing agency which are de minimis on
a per error basis and whose purpose is in part to
provide revenues to the registered clearing agency
to compensate it for effort expended in beginning to
process an erroneous i n s t r u c t i o n , such error
charges shall not be considered a 'Tmal disciplinary
action" for purposes of this paragraph.
(3) Content of notice required by subparagraph
(2). A n y notice f i l e d pursuant to subparagraph (2) of this paragraph shall consist of
the following, as appropriate:
(A) the name of the respondent concerned
together with the respondent's last known address
as reflected on the records of the registered clearing
agency and the name of the person, committee, or
other organizational unit that brought the charges
involved; except that, as to any respondent who has
been found not to have violated a provision covered
by a charge, identifying information with respect to
such person may be deleted insofar as the notice
reports the disposition of that charge and, prior to
the fiHng of the notice, the respondent does not
request that identifying information be included in
the notice;
(B) a statement describing the investigative or
other origin of the action;
Law Department
(C) as charged in the proceeding, the specific
provision or provisions of the rules of the registered
clearing agency violated by such person or the
statutory disqualification referred to in clause (B) of
subparagraph (2) of this paragraph and a statement
describing the answer of the respondent to the
charges;
(D) a statement setting forth findings of fact
with respect to any act or practice in which such
respondent was charged with having engaged in or
omitted; the conclusion of the registered clearing
agency as to whether such respondent violated any
rule or was subject to a statutory disqualification as
charged; and a statement of the registered clearing
agency in support of its resolution of the principal
issues raised in the proceedings;
(E) a statement describing any sanction imposed, the reasons therefor, and the date upon
which such sanction has or will become effective;
and
(F) such other matters as the registered clearing agency may deem relevant.
(4) Notice affinal denial, prohibition,
termination or limitation based on qualification
or administrative rules. Any registered clearing agency
for which the Board is the appropriate regulatory
agency that takes any final action which denies
participation to, or conditions the participation of,
any person or prohibits or limits any person with
respect to access to services offered by the
clearing agency based on an alleged failure of such
person to:
(A) comply with the qualification standards
prescribed by the rules of such registered clearing
agency pursuant to Section 17A(b)(4)(B) of the Act;
or
(B) comply with any administrative requirements of such registered clearing agency (including
failure to pay entry or other dues or fees or to file
prescribed forms or reports) not involving charges
of violations which may lead to a disciplinary
sanction
shall not be considered a ^Tmal disciplinary acfion"
for purposes of subparagraph (2), but notice thereof
shall be promptly filed with the Board and the
appropriate regulatory agency (if other than the
Board) for the affected person in accordance with
subparagraph (5); provided however, that no such
action shall be considered ' t i n a l " pursuant to this
subparagraph that results merely from a notice of
such failure to the person affected, if such person
has not sought an adjudication of the matter, includ-
921
ing a hearing, or otherwise exhausted his administrative remedies w i t h i n the registered clearing
agency with respect to such a matter.
(5) Content
of notice
required
by subparagraph (4). Any notice filed pursuant to subparagraph (4) of this paragraph shall consist of the
following, as appropriate:
(A) the name of each person concerned together with each such person's last known address
as reflected in the records of the registered clearing
agency;
(B) the specific grounds upon which the action
of the registered clearing agency was based, and a
statement describing the answer of the person concerned;
(C) a statement setting forth findings of fact
and conclusions as to each alleged failure of the
person to comply with qualification standards, or
comply with administrative obligations, and a
statement of the registered clearing agency in support of the resolution of the principal issues raised
in the proceeding;
(D) the date upon which such action has or will
become effective; and
(E) such other matters as the registered clearing agency deems relevant.
(6) Notice of final action based upon prior
adjudicated
statutory
disqualifications.
Any
registered clearing agency for which the Board
is the appropriate regulatory agency that takes
any final action with respect to any person that:
(A) denies or conditions participation to any
person or prohibits or limits access to services
offered by such registered clearing agency; and
(B) is based upon a statutory disqualification
of a type defined in subparagraph (A), (B) or (C) of
Section 3(a) (39) of the Act or consisting of a prior
conviction as described in subparagraph (E) of said
Section 3(a) (39)
shall promptly file notice thereof with the Board
and the appropriate regulatory agency (if other
than the Board) for the affected person in accordance with subparagraph (7) of this paragraph;
provided, however, that no such action shall be
considered " f i n a l " pursuant to this subparagraph
which results merely from a notice of such failure
to the person affected, if such person has not
sought an adjudication of the matter, including a hearing, or otherwise exhausted his administrative remedies w i t h i n the registered clearing
agency with respect to such a matter.
A922
Federal Reserve B u l l e t i n • October 1976
(7) Content
of
notice
required
by
subparagraph (6). Any notice filed pursuant to
subparagraph (6) of this paragraph shall consist of
the following, as appropriate:
(A) the name of the person concerned, together with each such person's last known address
as reflected in the records of the registered clearing
agency;
(B) a statement setting forth the principal issues raised, the answer of any person concerned,
and a statement of the registered clearing agency in
support of its resolution of the principal issues
raised in the proceeding;
(C) any description furnished by or on behalf
of the person concerned of the activities engaged in
by the person since the adjudication upon which the
disqualification is based;
(D) a copy of the order or decision of the
court, the appropriate regulatory agency or the
self-regulatory organization which adjudicated the
matter giving rise to such statutory disqualification;
(E) the nature of the action taken and the date
upon which such action is to be made effective; and
(F) such other matters as the registered clearing agency deems relevant.
(8) Notice
of
summary
suspension
of
participation.
A n y registered clearing agency
for which the Board is the appropriate regulatory
agency that summarily suspends or closes the accounts of a participant pursuant to the provisions of
Section 17A(b)(5)(C) of the Act, shall within one
business day after the effectiveness of such action
file notice thereof with the Board and the appropriate regulatory agency for the participant (if other
than the Board) of such action in accordance with
subparagraph (9) of this paragraph.
(9) Content
of
notice
of
summary
suspension of participation.
A n y notice pursuant to subparagraph (8) of this paragraph shall
contain at least the following information, as appropriate:
(A) the name of the participant concerned together with the participant's last known address as
reflected in the records of the registered clearing
agency;
(B) the date upon which such summary action
has or will become effective;
(C) if such summary action is based upon the
provisions of Section 17A(b)(5)(C)(i) of the Act, a
copy of the relevant order or decision of the selfregulatory organization if available to the registered
clearing agency;
(D) if such summary action is based upon the
provisions of Section 17A(b)(5)(C)(ii) of the Act, a
statement describing the default of any delivery of
funds or securities to the registered clearing
agency.
(E) if such summary action is based upon the
provisions of Section 17A(b)(5)(C)(iii) of the Act, a
statement describing the financial or operating difficulty of the participant based upon which the
registered clearing agency determined that such
suspension and closing of accounts was necessary
for the protection of the clearing agency, its participants, creditors or investors;
(F) the nature and effective date of the suspension; and
(G) such other matters as the registered clearing agency deems relevant.
(h) A P P L I C A T I O N S F O R S T A Y S O F D I S C I P L I N A R Y S A N C T I O N S OR S U M M A R Y S U S P E N S I O N S
BY A REGISTERED CLEARING AGENCY
I f a registered clearing agency for which the
Securities and Exchange Commission is not the
appropriate regulatory agency imposes any final
d i s c i p l i n a r y sanction pursuant to Section
17A(b)(3)(G) of the Act, or summarily suspends or
limits or prohibits access pursuant to Section
17A(b)(5)(C) of the Act, any participant aggrieved
thereby for which the Board is the appropriate
regulatory agency may file with the Board, by
telegram or otherwise, a request for a stay of
imposition of such action. Such request shall be in
writing and shall include a statement as to why such
stay should be granted.
(i) A P P L I C A T I O N FOR R E V I E W OF F I N A L DISC I P L I N A R Y S A N C T I O N S , D E N I A L S OF P A R T I C I P A T I O N OR P R O H I B I T I O N S OR L I M I T A T I O N S OF
ACCESS T O S E R V I C E S I M P O S E D B Y R E G I S T E R E D
CLEARING AGENCIES
(1) Scope. Proceedings on an application to the
Board under Section 19(d)(2) of the Act by a person
that is subject to the Board's jurisdiction for review
of any action by a registered clearing agency for
which the Securities and Exchange Commission is
not the appropriate regulatory agency shall be governed by this paragraph.
(2) Procedure.
(A) A n application for review pursuant to Section 19(d)(2) of the Act shall be filed with the Board
within 30 days after notice is filed by the registered
clearing agency pursuant to Section 19(d)(1) of the
Act and received by the aggrieved person applying
for review, or within such longer period as the
Board may determine. The Secretary of the Board
Law Department
shall serve a copy of the application on the registered clearing agency, which shall, within ten days
after receipt of the application, certify and file with
the Board one copy of the record upon which the
action complained was taken, together with three
copies of an index to such a record. The Secretary
shall serve upon the parties copies of such index
and any papers subsequently filed.
(B) Within 20 days after receipt of a copy of
the index, the applicant shall file a brief or other
statement in support of his application which shall
state the specific grounds on which the application
is based, the particular findings of the registered
clearing agency to which objection is taken, and the
relief sought. Any application not perfected by such
timely brief or statement may be dismissed as
abandoned.
(C) Within 20 days after receipt of the applicant's brief or statement the registered clearing
agency may file an answer thereto, and within 10
days of receipt of any such answer the applicant
may file a reply. Any such papers not filed within
the time provided by items (A), (B), or (C) will not
be received except upon special permission of the
Board.
(D) On its own motion, the Board may direct
that the record under review be supplemented with
such additional evidence as it may deem relevant.
Nevertheless, the registered clearing agency and
persons who may be aggrieved by such clearing
agency's action shall not be entitled to adduce
evidence not presented in the proceedings before
the registered clearing agency unless it is shown to
the satisfaction of the Board that such additional
evidence is material and that there were reasonable
grounds for failure to present such evidence in the
proceedings before the registered clearing agency.
Any request for leave to adduce additional evidence
shall be filed promptly so as not to delay the
disposition of the proceeding.
(E) Oral argument before the Board may be
requested by the applicant or the registered clearing
agency as follows:
(i) by the applicant with his brief or statement or within 10 days after receipt of the registered clearing agency's answer, or
(ii) by the registered clearing agency with its
answer.
The Board, in its discretion, may grant or deny any^
request for oral argument and, where it deems it
appropriate to do so, the Board will consider an
application on the basis of the papers filed by the
parties, without oral argument.
923
(F) The Board's Rules of Practice for Formal
Hearings shall apply to review proceedings under
this rule to the extent that they are not inconsistent
with this rule. Attention is directed particularly to
Section 263.21 of the Rules of Practice relating to
formal requirements as to the papers filed.
Effective October 3, 1977, section 225.5 is
amended by adding the following new paragraphs
(d) and (e) as follows:
SECTION
225.5—ADMINISTRATION
(d) A P P L I C A T I O N S F O R S T A Y S O F D I S C I P L I N A R Y S A N C T I O N S OR S U M M A R Y S U S P E N S I O N S
BY A REGISTERED CLEARING AGENCY
I f a registered clearing agency for which the
Securities and Exchange Commission is not the
appropriate regulatory agency, imposes any final
d i s c i p l i n a r y sanction pursuant to Section
17A(b)(3)(G) of the Act, or summarily suspends or
hmits or prohibits access pursuant to Section
17A(b)(5)(C) of the Act, any participant aggrieved
thereby for which the Board is the appropriate
regulatory agency may file with the Board, by
telegram or otherwise, a request for a stay of
imposition of such action. Such request shall be in
writing and shall include a statement as to why such
stay should be granted.
(e) A P P L I C A T I O N S FOR R E V I E W O F F I N A L DISC I P L I N A R Y SANCTIONS, D E N I A L S OF PARTICIP A T I O N OR P R O H I B I T I O N S OR L I M I T A T I O N S O F
ACCESS T O S E R V I C E S I M P O S E D B Y R E G I S T E R E D
CLEARING AGENCIES
(1) Scope. Proceedings on an application to the
Board under Section 19(d)(2) of the Act by a person
that is subject to the Board's jurisdiction for review
of any action by a registered clearing agency for
which the Securities and Exchange Commission is
not the appropriate regulatory agency shall be governed by this paragraph.
(2) Procedure.
(A) A n application for review pursuant to Section 19(d)(2) of the Act shall be filed with the Board
within 30 days after notice is filed by the registered
clearing agency pursuant to Section 19(d)(1) of the
Act and received by the aggrieved person applying
for review, or within such longer period as the
Board may determine. The Secretary of the Board
shall serve a copy of the application on the registered clearing agency, which shall, within ten days
A924
Federal Reserve Bulletin • October 1976
after receipt of the application, certify and file with
the Board one copy of the record upon which the
action complained was taken, together with three
copies of an index to such record. The Secretary
shall serve upon the parties copies of such index
and any papers subsequently filed.
(B) Within 20 days after receipt of a copy of
the index, the applicant shall file a brief or other
statement in support of his application which shall
state the specific grounds on which the application
is based, the particular findings of the registered
clearing agency to which objection is taken, and the
relief sought. Any application not perfected by such
timely brief or statement may be dismissed as
abandoned.
this rule to the extent that they are not inconsistent
with this rule. Attention is directed particularly to
Section 263.21 of the Rules of Practice relating to
formal requirements as to papers filed.
(C) Within 20 days ^fter receipt of the applicant's brief or statement the registered clearing
agency may file an answer thereto, and within 10
days of receipt of any such answer the applicant
may file a reply. Any such pcipers not filed within
the time provided by items (A), (B), or (C) will not
be received except upon special permission of the
Board.
DELEGATION
(D) On its own motion, the Board may direct
that the record under review be supplemented with
such additional evidence as it may deem relevant.
Nevertheless, the registered clearing agency and
persons who may be aggrieved by such clearing
agency's action shall not be entitled to adduce
evidence not presented in the proceedings before
the registered clearing agency unless it is shown to
the satisfaction of the Board that such additional
evidence is material and that there were reasonable
grounds for failure to present such evidence in the
proceedings before the registered clearing agency.
Any request for leave to adduce additional evidence
shall be filed promptly so as not to delay the
disposition of the proceeding.
(E) Oral argument before the Board may be
requested by the applicant or the registered clearing
agency as follows:
(i) by the applicant with his brief or statement or within 10 days after receipt of the registered clearing agency's answer, or
(ii) by the registered clearing agency with its
answer.
The Board, in its discretion, may grant or deny any
request for oral argument and, where it deems it
appropriate to do so, the Board will consider an
application on the basis of the papers filed by the
parties, without oral argument.,
(F) The Board's Rules of Practice for Formal
Hearings shall apply to review proceedings under
RULES
REGARDING
OF
A U T H O R I T Y
The Board of Governors has delegated to the
Secretary of the Board authority to permit member
banks to waive the penalty for early withdrawal of a
time deposit in § 217.4(d) of Regulation Q for
depositors suffering disaster-related losses in areas
declared a major disaster area by the President.
Effective September 27, 1977, a new paragraph
265.2(a)(18) is added to read as follows:
SECTION 265.2—SPECIFIC
D E L E G A T E D TO B O A R D
FUNCTIONS
EMPLOYEES
A N D TO F E D E R A L RESERVE
BANKS
(a) The Secretary of the Board (or, in the Secretary's absence, the Acting Secretary) is authorized:
*
^
*
*
(18) Under the provisions of section 19(j) of the
Federal Reserve Act (12 U.S.C. § 371b) and
§§ 217.4(a) and (d) of Regulation Q (12 CFR
§§ 217.4(a) and (d)) to permit member banks to
waive the penalty for early withdrawal of a time
deposit in § 217.4(d) if all of the following conditions are met:
(1) The President of the United States declares
an area a major disaster area pursuant to section
301 of the Disaster Relief Act of 1974 (42 U.S.C.
§ 5141) and Executive Order No. 11795 of July 11,
1974.
(2) A waiver is limited in effectiveness to depositors suffering disaster-related losses in the officially designated disaster area.
(3) The appropriate Reserve Bank recommends
approval.
(4) All relevant divisions of the Board's staff
recommend approval.
Law Department
B A N K
H O L D I N G
B A N K
MERGER
C O M P A N Y
A N D
ORDERS ISSUED BY T H E BOARD
ORDERS U N D E R SECTION 3
OF B A N K H O L D I N G C O M P A N Y
ACT
Daniels Insurance Agency, Inc.,
Hobbs, New Mexico
Order Approving Acquisition
of Bank Shares
Daniels Insurance Agency, Inc., Hobbs, New
Mexico, a bank holding company within the meaning of the Bank Holding Company Act, has applied
for the Board's approval under § 3(a)(3) of the Act
(12 U.S.C. § 1842(a)(3)) to exercise rights to acquire
voting shares of First National Bank of Lea County,
Hobbs, New Mexico ( ' ' B a n k " ) . As a result of the
exercise of these rights, Applicant would continue
to hold directly or indirectly 38.5 per cent of the
voting shares of Bank. Applicant has also applied
to retain 6,221 shares of Bank previously acquired
without prior approval of the Board. The shares
acquired without prior Board approval represent
4.25 per cent of Bank's voting shares.
Notice of the application, affording opportunity
for interested persons to submit comments and
views, has been given in accordance with § 3(b) of
the Act. The time for filing comments and views has
expired, and the Board has considered the application and all comments received in light of the
factors set forth in § 3(c) of the Act (12 U.S.C.
§ 1842(c)).
Bank, the largest of three banks in the relevant
banking market,^ holds deposits of approximately
$96.9 million, representing 44.2 per cent of the total
deposits in commercial banks in the market. Applicant presently owns directly or indirectly 38.5 per
cent of the voting shares of Bank.^ I n view of the
fact that Applicant presently controls Bank, consummation of the proposal would not have any
'The relevant banking market is approximated by Lea County.
Hn 1975 and 1976 Applicant, without the prior approval of the
Board, acquired additional shares of Bank. The 1975 acquisition
involved the repurchase by Applicant of shares that it had recently
sold to a third party. The 1976 acquisition consisted of Applicant's
participation in a rights offering by Bank. As a result of these
acquisitions, Applicant's interest in Bank increased by less than
one per cent. Prior to 1973 Applicant owned more than 50 per cent
of the voting shares of Bank. At that time, because it owned a
majority of the voting shares of Bank, Applicant could have
acquired additional shares of Bank without the prior approval of
the Board, in view of § 3(a)(B) of the Act. In 1973 Applicant's
interest in Bank was reduced to less than 50 per cent. It appears
that at the time that it made the above acquisitions. Applicant
mistakenly believed that § 3(a)(B) was still available to it.
OF
GOVERNORS
adverse effect on existing or potential competition,
nor would it increase the concentration of banking
resources or have an adverse effect on other banks
in the area. Competitive considerations, therefore,
are consistent with approval of the application.
The financial and managerial resources and future prospects of Applicant appear favorable. The
same considerations with respect to Bank are regarded as generally satisfactory. Thus, the banking
factors with respect to both Applicant and Bank are
consistent with approval of the application. Although there will be no immediate increase in the
services offered by Bank as a result of the proposed
transaction, and considerations relating to the convenience and needs of the community to be served
are consistent with approval of the application. It is
the Board's judgment that the proposed transaction
would be consistent with the public interest and
that the application should be approved.
On the basis of the record, the application is
approved for the reasons summarized above, but
with the distinct understanding that Applicant will
take steps to maintain compliance with the Act and
the Board's regulations. 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
Dallas pursuant to delegated authority.
By order of the Board of Governors, effective
September 19, 1977.
V o t i n g f o r this action: Chairman Burns and Governors
Gardner, W a l l i c h , C o l d w e l l , Jackson, Partee, and L i l l y .
[SEAL]
925
(Signed) GRIFFITH L . GARWOOD,
Deputy Secretary of the Board.
Applicant's acquisition of additional shares of Bank without
prior Board approval violated the Act. It appears, however, that
such violations resulted from a misunderstanding of the applicability of § 3(a)(B) of the Act and were inadvertent. The Board has
scrutinized the underlying facts surrounding the acquisition of
shares of Bank without the Board's prior approval. In particular,
the Board notes that Applicant has taken prompt action to bring its
investment in Bank into conformity with the Act and has taken
steps to insure that such violations will not occur in the future. The
Board is of the opinion that the above violations, in view of the
facts surrounding them and the entire record on this application,
do not reflect so adversely on management of Applicant as to
warrant denial of the subject application.
A926
Federal Reserve B u l l e t i n • October 1976
D E T R O I T B A N K Corporation,
Detroit, Michigan
Order Approving
of Bank Holding
Merger
Companies
D E T R O I T B A N K Corporation, Detroit, Michigan
( " D E T R O I T B A N K " ) , a bank holding company
within the meaning of the Bank Holding Company
Act, has appHed for the Board's approval under
§ 3(a)(5) of the Act (12 U.S.C. § 1842(a)(5)) to acquire all of the voting shares of the successor by
merger to Lake Shore Financial Corporation, Muskegon, Michigan, and thereby indirectly acquire
shares of Hackley Union National Bank and Trust
Company of Muskegan, Muskegon, Michigan
("Bank").
Notice of the application, affording opportunity
for interested persons to submit comments and
views, has been given in accordance with § 3(b) of
the Act. The time for filing comments and views has
expired, and the Board has considered the application and all comments received including those of
the United States Department of Justice and those
of National Lumberman's Bank and Trust Company, Muskegon, Michigan ("Protestant"), in light
of the factors set forth in § 3(c) of the Act (12
U.S.C. § 1842(c)).
D E T R O I T B A N K controls six banks with aggregate deposits of $2.8 billion, representing 8.8 per
cent of the total deposits in commercial banks in
Michigan, and is the third largest banking organization in the State. ^ Consummation of the proposed
merger would increase Applicant's share of deposits in commercial banks in Michigan by 0.6 per
cent and would have no appreciable effect upon the
concentration of banking resources in Michigan.
A l l but one of Applicant's subsidiary banks are
located in the Detroit banking market, approximately 170 miles from Muskegon.^ Approval of this
application would not eliminate any significant
amount of existing competition.
With respect to potential competition, the Department of Justice and Protestant have expressed
the opinion that Applicant is a likely entrant into the
market and that approval of the application would
^Banking data are as of December 31, 1976.
2Applicant recently entered western Michigan by acquiring
Kentwood Bank located 40 miles from Muskegon in a suburb of
Grand Rapids. The application under the Bank Holding Company
Act to acquire that bank was approved under delegated authority
by the Federal Reserve Bank of Chicago on July 7, 1977.
Kentwood Bank is not located in the relevant market, but rather
competes in the adjacent Grand Rapids market. Bank derives only
a nominal amount of deposits and loans from the Grand Rapids
market.
result in the elimination of potential competition
and decrease the likelihood of the market becoming
less concentrated in the future. While it appears
that consummation of the proposal would result in
some slight adverse effects on potential competition, for the reasons discussed below, the Board is
unable to conclude that consummation of the proposal would result in a significant loss of potential
competition.
Bank is the largest of six banking organizations in
the Muskegon banking market.^ Bank holds total
deposits of $188 million, representing approximately 33.5 per cent of the total deposits in commercial banks in the Muskegon market. The Board
has previously found that the Muskegon market,
with the exception of the Norton Shores area, was
not attractive for de novo entry.^ Since that finding
was made, an application for a charter for a de novo
bank in Norton Shores has been filed with chartering authorities and, if that application is granted,
the attractiveness of the Norton Shores area for de
novo entry by others will be lessened.
Moreover, it appears that the overall Muskegon
market continues to be generally unattractive for de
novo entry. The deposits per banking office ratio
for the Muskegon Standard Metropolitan Statistical
Area is below the State average. Population of the
Muskegon County portion of the market increased
0.2 per cent between 1970 and 1975, ranking fifteenth in population growth among the 17 Michigan
counties with population in excess of 100,000. It is
anticipated that Muskegon County's population
growth will continue to lag behind that of the other
Michigan counties at least until 1980. In view of the
apparent lack of attractiveness of the Muskegon
area for de novo entry,^ particularly vis-a-vis other
areas in Michigan in which Applicant is not currently represented, the Board is unable to conclude
that Applicant is one of the most likely de novo
entrants into the Muskegon area.
Of the six banks currently represented in the
Muskegon market, three are affiliated with multi-
=^The Muskegon banking market, the relevant market, is approximated by all of Muskegon County, except for Casnovia Township, plus Grand Haven, Spring Lake, and Crockery Townships in
Ottawa County.
^See Board's Order of March 26, 1975, denying application of
Old Kent Financial Corporation, Grand Rapids, Michigan, 61 Fed.
Res. Bull. 247 (1975) and Board's Order of January 25, 1974,
denying application of Old Kent Financial Corporation, Grand
Rapids, Michigan, 60 Federal Reserve BULLETIN 133 (1974).
•^Applicant's subsidiary banks are barred by Michigan's restrictive branching law (Mich. Stat. Ann. § 23.710 (171)) from branching into Muskegon. However, Michigan law does not prohibit the
formation of de novo banks by Applicant and it is this form of de
novo entry referred to in the text.
Law Department
bank holding companies.^ While " f o o t h o l d " entry
into the market would be preferable to Applicant's
acquisition of the largest bank in the market, only
two possibilities exist for Applicant to acquire an
established bank as a means of entry into the
market and neither of those appears feasible. The
two banks that might be available for acquisition
are Protestant, the second largest bank in Muskegon, and a bank located in the town of Coopersville
that is prohibited by Michigan law from branching
into the city of Muskegon and conducts its operations primarily in the Grand Rapids banking market. The former would not constitute a true "foothold" entry in view of its size and market share.
Acquisition of the latter would not be likely to
produce any significant procompetitive benefit in
the Muskegon market.
Considerations relating to the financial and managerial resources and future prospects of Bank,
Applicant, and Applicant's subsidiaries are regarded as generally satisfactory. Although Applicant would incur some debt as a result of this
acquisition, it appears that dividends from Bank
would be sufficient to retire that debt.
Applicant has stated its intention to augment the
services of Bank by providing equipment leasing,
accounts receivable financing, international services, cash management services, money market
services, and real estate trust services. Bank does
not currently provide many of these services. In
addition, affiliation with Applicant would increase
bank's lending limits at a time when there appears
to be an increasing demand by local industries for
large loans. Thus, considerations relating to the
convenience and needs of the community to be
served lend weight toward approval of the application and outweigh any slight adverse competitive
effects that may result from the proposal.
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 Chicago pursuant to delegated authority.
By order of the Board of Governors, effective
September 1, 1977.
®A pending de novo charter application, if approved, would
enable a fourth multibank holding company, Old Kent Financial
Corporation, Grand Rapids, Michigan, to enter this market and
would thus increase the number of banking organizations in the
market from six to seven.
927
V o t i n g f o r this action: Chairman B u r n s and Governors
Caldwell, Partee, and L i l l y . V o t i n g against this action:
Governor W a l l i c h . A b s e n t and not voting: Governors
Gardner and Jackson.
( S i g n e d ) ROBERT E . M A T T H E W S ,
[SEAL]
Assistant Secretary of the Board.
Dissenting Statement of Governor
Wallich
I would deny the application of D E T R O I T B A N K
to merge with Lake Shore Financial Corporation,
Muskegon, Michigan and thereby acquire Hackley
U n i o n N a t i o n a l Bank and Trust Company of
Muskegon ( " B a n k " ) , Muskegon, Michigan. M y
reasons are those that were set forth in my Dissenting Statements in the recent Texas Commerce
Bancshares, Inc. and the First City Bancorporation
of Texas, Inc. decisions.'
My dissent in this case rests again on the adverse
effects of this proposal on potential competition.
Bank is the largest of six commercial banking
organizations in the concentrated Muskegon market, with 33.5 per cent of the commercial bank
deposits in the market. I regard D E T R O I T B A N K
as one of the most likely potential entrants into the
market given the financial resources and expressed
intent of Applicant to expand into western Michigan. So long as Applicant remains poised in the
" w i n g s " of the Muskegon market, this potential
competition exerts a beneficial effect on the
Muskegon market. If and when this " w i n g s " effect
is eliminated by actual enry of Applicant into the
market, it should be by a route that offsets elimination of this effect by deconcentrating that market,
through de novo entry or by means of a "foothold
acquisition."
In my opinion, this application represents a continuation of the trend established in the Texas
decisions noted above. The majority is in danger of
being misinterpreted as indicating that de novo
entry or foothold entry into highly concentrated
markets is no longer expected of those organiza-
^See the Dissenting Statements of Governor Wallich accompanying the Board Orders approving the applications of Texas
Commerce Bancshares, Inc., Houston, Texas to merge with The
BanCapital Financial Corporation, Austin, Texas (63 Federal
Reserve BULLETIN 500 (1977)) and First City Bancorporation of
Texas, Inc., Houston, Texas to acquire City National Bank of
Austin, Austin, Texas (63 Federal Reserve BULLETIN 674 (1977)).
A928
Federal Reserve B u l l e t i n • October 1976
tions that are most capable of entering new markets
in that manner. Such an approach would increase
the disparity in size between the largest banking
organizations of a State and the rest of the State's
organizations, leading to an increase in concentration ratios and a decrease in the number of effective
competitors and competition within the State.
The present decision is an unfortunate outgrowth
of the Board's Texas Commerce decision. That
decision, I believe, had an anticompetitive effect
upon the Austin market and the structure of commercial banking in Texas. Approval of this application may well have the same effects upon the
Muskegon market and the structure of commercial
banking in Michigan.
For the foregoing reasons, I would deny this
application.
First City Bancorporation of Texas, Inc.
Houston, Texas
Order Approving
Acquisition
of Bank
First City Bancorporation of Texas, Inc., Houston, Texas ( " A p p l i c a n t " ) , a bank holding company
within the meaning of the Bank Holding Company
Act, has appHed 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 directors' qualifying
shares) of the voting shares of the successor by
merger to The City National Bank of Bryan, Bryan,
Texas C'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 the
successor organization is treated herein as the
proposed acquisition of the shares of Bank.
Notice of the application, affording opportunity
for interested persons to submit comments and
views, has been given in accordance with § 3(b) of
the Act. The time for filing comments and views has
expired, and the Board has considered the application and all comments received in light of the
factors set forth in § 3(c) of the Act (12 U.S.C.
§ 1842(c)).
Applicant, the largest banking organization in
Texas, controls 28 banks with aggregate deposits of
$4.14 billion, representing 7.81 per cent of total
deposits in commercial banks in the State.^ Acqui^All banking data are as of December 31, 1976 and reflect bank
holding company formations and acquisitions approved through
June 30, 1977.
sition of Bank, which holds deposits of $54.8 million, would increase Applicant's share of total
deposits in commercial banks in the State by 0.1 per
cent.
Bank is the second largest of six banks in the
relevant geographic market.^ Its $54.8 million in
deposits represent 25.1 per cent of market deposits.
The largest bank in the market holds 27 per cent of
the market deposits. The third, fourth, and fifth
largest banks in the market hold, respectively 19.6
per cent, 14.1 per cent, and 13.2 per cent of market
deposits. The smallest bank in the market, organized in 1976, controls just under 1 per cent of
market deposits. It appears that none of the banks
in the market is currently held by a bank holding
company.
Applicant's nearest subsidiary is located 90 miles
south of Bank in Wallis, Texas. Several subsidiaries
of Applicant derive only marginal amounts of business from the relevant market and none derives any
substantial amounts. Thus, and in view of the local
nature of banking markets, consummation of Applicant's proposal would not have any significant
adverse effects on existing competition within the
relevant market.
Although the market's ratio of population to
banking offices is 1.4 times the State average, per
capita deposits in the market are only 67 per cent of
the State average. The market has experienced
considerable population growth since 1970. The
market, on balance, appears slightly attractive for
de novo entry. Although Applicant may be considered a potential entrant into this market, it
should be noted that no other bank holding companies are represented in the Bryan market. Thus,
the loss of Applicant as a potential entrant is not
considered significant in view of the relatively large
number of remaining bank holding companies that
are potential entrants into the market. Bank holds
approximately $12 million more in market deposits
(5.5 per cent of market deposits) than the third
largest bank and approximately $4 million less
(about 2 per cent) than the largest bank in the
market. The similarity in size of the five largest of
the six banks in the market suggests the absence of
alternative foothold means of entry into the market
since it does not appear that the smallest bank in the
^The relevant geographic market is approximated by the
Bryan-College Station Standard Metropolitan Statistical Area
which encompasses all of Brazos County. The January 1, 1977
population estimated for the market was 76,700 persons, an
increase of 32.2 per cent over 1970. The recent expansion of Texas
A & M University, located at College Station, contributed significantly to this increase. Texas population growth Statewide was
estimated at 12 per cent for the same period.
Law Department
market is available for acquisition. For the foregoing reasons, approval of this application will have
only a slightly adverse effect, if any, on potential
competition.
The financial and managerial resources of Applicant and its subsidiaries and of Bank are considered
generally satisfactory and the future prospects of all
appear favorable. Thus, the Board believes that the
banking factors involved in the proposal are consistent with approval.
Information contained in the record indicates that
most of the banking needs of the area are currently
being met. However, the growth in the area has
created demands for new services not currently
available within the market. Applicant through
Bank has the capability of providing these services.
Bank has maintained a quite conservative loan to
deposit ratio; Applicant intends to infuse capital
into Bank to increase commercial and consumer
lending. It plans within two years of acquisition to
provide credit related insurance through Apphcant's subsidiary. First City Life Insurance Company, at rates less than those currently charged by
an affiliate of Bank. Applicant also intends to
expand mortgage lending services. 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 appHcation 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 Dallas pursuant to delegated authority.
By order of the Board of Governors, effective
September 1, 1977.
V o t i n g f o r this action: V i c e Chairman Gardner and
Governors W a l l i c h , C o l d w e l l , Jackson, Partee, and L i l l y .
Absent and not voting: Chairman Burns.
(Signed) ROBERT E. M A T T H E W S ,
[SEAL]
Assistant
Secretary
of the
Board.
929
First National Holding Corp.
Atlanta, Georgia
Order Approving
Acquisition
of Banks
First National Holding Corp., Atlanta, Georgia, a
bank holding company within the meaning of the
Bank Holding Company Act, has applied for the
Board's approval under section 3(a)(3) of the Act
(12 U.S.C. § 1842(a)(3)) to acquire 100 per cent of
the voting shares of F i r s t Bank of Savannah
(''Savannah"), Savannah, Georgia, and approximately 78 per cent of the voting shares of The First
National Bank of Dalton ( " D a l t o n " ) , Dalton, Georgia. In acquiring Dalton, Applicant would formally
acquire indirect ownership of 64.4 per cent of the
voting shares of The Bank of Dalton, Dalton,
Georgia. These shares are held by National Loan
Company, Dalton, Georgia, a wholly-owned subsidiary of Dalton.
Notice of the applications, affording opportunity
for interested persons to submit comments and
views, has been given in accordance with section 3
of the Act (41 Fed, Reg. 46059; 42 Fed. Reg.
12236). The time for fihng comments and views has
expired, and the Board has considered the appHcations and all comments received in light of the
factors specified in section 3(c) of the Act.
The applications are consolidated because of a
set of facts common to them. I n both instances
AppHcant seeks the Board's permission to acquire
bank shares held by, or subject to a contractual
right to acquire held by, former directors of AppHcant's subsidiary bank, The First National Bank of
Atlanta ("Atlanta B a n k " ) , Atlanta, Georgia, pursuant to arrangements made in 1969 and 1970. Under
those arrangements Atlanta Bank financed the ultimate acquisition of controlling interests in Savannah
and Dalton by persons affiliated with Atlanta Bank
at preferenfial terms and without risk of loss to the
borrowers. The Board has previously determined
that similar arrangements may evidence indirect
control of bank shares by a company and, if undertaken without prior Board approval, may constitute
violations of the Bank Holding Company Act.^ I n
connection with these proposals, the Board has
scrutinized the underlying facts surrounding the
acquisitions of shares of Dalton and Savannah and
the acquisition of rights to acquire shares of Dalton
by Applicant's subsidiary bank acting through persons related to it, and has concluded that Atlanta
Bank, by virtue of these arrangements, acquired
indirect ownership and control of more than 25 per
^See, e.g., The Jacobus Company and Inland Financial Corporation, 60 Federal Reserve BULLETIN 130 (1974); MidAmerica
Bancorporation, 60 Federal Reserve BULLETIN 131 (1974); First
United Bancorporation, Inc., 61 Federal Reserve BULLETIN 889
(1975).
A930
Federal Reserve Bulletin • October 1976
cent of the shares of both banks without the
Board's prior approval in violation of section 3 of
the Act.2 In accordance with its policy regarding
violations of the Act, and, upon its examination of
all the facts of record, the Board is of the view that
the specific facts involved in the original indirect
acquisitions, even viewed in isolation and absent
other adverse considerations, might require denial
of the applications but for Applicant's thorough and
definite undertakings to guard against violations in
the future.^
Applicant, the second largest banking organization in Georgia, controls one bank other than Dalton and Savannah, holding total deposits of $1.2
billion, or approximately 10 per cent of the total
deposits in commercial banks in the State.^ Savannah is the fourth largest of nine commercial banks
located in the Savannah banking market, ' and holds
deposits of $33.4 million,, or 6 per cent of the
^The material facts, summarized here, are undisputed. In the
case of Savannah, Atlanta Bank in March 1969 lent, without
interest, $2.7 million to an unrelated individual to acquire all but
the directors' qualifying shares of that bank. In April 1970, the
bank shares and loan were transferred to the former chairman of
Atlanta Bank's executive committee. This loan was structured so
that the borrower assumed no personal liability on his debt to
Atlanta Bank beyond the shares of Savannah pledged as collateral
for that loan, and so that interest would equal dividends paid by
Savannah. In September 1971, Atlanta Bank lent this individual on
the same basis an additional $500,000 to acquire additional shares
of Savannah. Since 1971 Applicant has invested an additional $4.4
million directly in Savannah's preferred shares and capital notes.
Since 1972, Savannah's executive committee has voted the shares
of Savannah held by Atlanta Bank's former director pursuant to
proxies executed by him.
In the case of Dalton, several individual shareholders of Dalton,
unrelated to Atlanta Bank, placed shares of Dalton in a trust in
January 1969, with a view to preventing another Georgia bank
from gaining control of Dalton. Under the terms of the trust four
directors and former directors of Atlanta Bank agreed to buy from
the trust shares of any shareholder-beneficiary who died or who
decided to sell, at a formula price, if the remaining shareholderbeneficiaries declined to do so. A t the same time Atlanta Bank
agreed to lend to its designated directors the funds necessary to
buy shares from the trust, without personal liability and at interest
equal to dividends. Over time additional shares were placed in
trust. These arrangements involved about 78 per cent of Dalton's
voting shares, 39 per cent that are still held in trust and another 39
per cent that passed through the trust to Atlanta Bank's former
directors between 1969 and 1976.
^The record also reflects that before initiating these transactions
Atlanta Bank had reason to believe them lawful, and that Applicant openly disclosed its transactions regarding Dalton and
Savannah to its shareholders and to the Board as soon as those
transactions were questioned and cooperated with efforts by the
Board's staff to resolve the violations question. Applicant's cooperation, the nature of the violations, the fact that the transactions
originated before the Board publicized its policy on such transactions and that management has changed since the transactions
originated, coupled with Applicant's undertaking a definite program regarding its future conduct, together persuade the Board
that the violations do not reflect so adversely on Applicant's
management as to require denial of these applications, though no
one of those considerations standing alone might be persuasive.
''Banking data are as of December 31, 1976.
^The Savannah banking market is approximated by Chatham
and Effingham Counties and those portions of Liberty and Bryan
Counties that lie east of Fort Stewart.
deposits in commercial banks in that market. Dalton is the largest of six banks in the Dalton banking
market,® and holds deposits of $74 million, or
approximately 46 per cent of the deposits in commercial banks in that market. The Bank of Dalton,
which also is located in the Dalton banking market,
holds deposits of $20.8 million (11 per cent of
market deposits), and is the third largest commercial bank in that market. Taken together, Dalton
and The Bank of Dalton control approximately 51
per cent of the market's commercial bank deposits.
Applicant's direct subsidiary bank is located in
the Adanta banking market,^ which is approximately 250 miles from Savannah and over 50 miles
from Dalton, and Applicant's nonbank subsidiaries
are not significant competitors in either the Savannah or Dalton banking markets. Viewing the competitive situation as it existed in 1969 and 1970 when
Adanta Bank arranged to obtain control of Dalton
and Savannah, it appears that, in light of the fact that
Dalton, Savannah, and Atlanta Bank serve separate
banking markets, the acquisitions eliminated and,
viewed as present acquisitions would ehminate, no
existing banking competition in the relevant markets. Furthermore, consummation of the Dalton
proposal may have a procompetitive effect, inasmuch as Apphcant has committed, if its application
is approved, to sever the affiliation between Dalton
and The Bank of Dalton that has existed since
1918.« This would estabhsh The Bank of Dalton as
an independent new competitor in a relatively concentrated market. Moreover, continued affiliation
between Applicant and Savannah may preserve
Savannah's ability to compete with the larger organizations in the market.-' The Board accordingly
concludes that competitive considerations are consistent with approval of both applications and lend
weight to approval of the application to acquire
Dalton.
Considerations relating to the convenience and
needs of the communities to be served are also
consistent with approval of both applications. Applicant states that it will provide a number of new
services to both banks, and Applicant has provided
assistance to both banks under its present relationship with them.
®The Dalton banking market is approximated by Whitfield and
Murray Counties.
n^he Atlanta banking market is approximated by Fulton, DeKalb, Cobb, Gwinnett, Clayton, Douglas, Henry, and Rockdale
Counties.
^Applicant has filed a written commitment that upon consummation of the proposed acquisition of shares held by Atlanta's
former directors it will cause director and officer interlocks
between Dalton and The Bank of Dalton to be severed, and cause
termination of Applicant's direct and indirect ownership and
control of, and power to vote, voting shares of The Bank of Dalton
at the earliest practicable time and in any event within two years.
^The two largest banking organizations in the Savannah banking
market control approximately 70 per cent of the market's deposits,
and a majority of the market's deposits are controlled by the
State's largest and third largest banking organizations.
931
The financial and managerial resources and future prospects of Dalton and Savannah are viewed
as generally satisfactory. Applicant's managerial
resources and future prospects are also considered
generally satisfactory. Its financial resources,
which suffered during the downturn in the real
estate industry in the Southeast, are improving.
There is no indication in the record that Applicant's
recovery is progressing at an unsatisfactory rate,
but the Board believes that Applicant should continue to strengthen those financial resources before
it attempts to expand through proposals involving a
diversion of its existing resources.
These proposed transactions, however, represent
essentially the reorganization of existing indirect
investments, one that would have only a minimal or
conceivably a positive effect on the financial resources of Applicant. Applicant made most of its
proposed investments in Dalton and Savannah beginning in 1969. In the case of Savannah, converting
Applicant's indirect investment to a direct investment requires an additional outlay of only $10,000.
Acquisition of 39 per cent of the shares of Dalton
can Hkewise be accompHshed at negligible cost, and
the Board is satisfied that Apphcant's commitments
regarding the circumstances under which it will
acquire additional shares of Dalton sufficiently insure that the acquisition will not have any materially adverse effect on Applicant or Atlanta Bank.
Moreover, Applicant's ability to consolidate the
earnings of Savannah after consummation of that
proposed transaction should enhance its financial
resources. On the other hand, divestiture of the
shares and rights held by Atlanta's former directors
could involve adverse financial consequences to
Applicant. Having considered all aspects of the
proposed transactions, including Applicant's most
recent financial information, the Board concludes
that on balance considerations relating to Applicant's financial resources are consistent with approval of these applications.'®
Accordingly, based on the record and for the
reasons summarized herein, these applications are
approved. Approval of the application to acquire
Dalton is subject to the condition that Applicant
cause complete divestiture of The Bank of Dalton in
accordance with its commitment, subject to continuing review and the imposition of such further
terms as the Board or its General Counsel may
direct. A p p l i c a n t is directed to submit to the
Board's General Counsel within 30 days after the
effective date of this Order reasons why the divestiture of The Bank of Dalton should not be ordered
^"There is nothing in the record to show that Atlanta Bank's
financial resources at the time it arranged to obtain control of
Savannah and Dalton were incompatible with those investments at
the time they were made. Instead it appears that the problems
Apphcant has experienced were chiefly those common to other
banking organizations and arose several years later.
earlier than Applicant proposes, and authority is
hereby delegated to the Board's General Counsel to
order such earher divestiture, and to impose conditions that will insure that the divestiture is complete
and effective, if the reasons submitted in his judgment warrant such action. The transactions hereby
approved 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 Atlanta pursuant to delegated authority.
By order of the Board of Governors, effective
September 28, 1977.
V o t i n g f o r this action: Chairman Burns and Governors
Gardner, W a l l i c h , and Partee. V o t i n g against this action:
Governors C o l d w e l l , Jackson, and L i l l y .
[SEAL]
(Signed) G R I F F I T H L . G A R W O O D ,
Deputy Secretary of the Board.
Dissenting Statement of
Governors Coldwell and Jackson
We would deny the applications by First National
Holding Corp. to acquire The First National Bank of
Dalton 'Dalton") and First Bank of Savannah
("Savannah"), I n our view, any other action would
result in a reward of Applicant's violations of the
Bank Holding Company Act and would be contrary
to the standards the Board normally applies to bank
holding company appHcations. The subject applications propose that a bank holding company whose
financial resources do not meet the Board's normal
standards for expansion acquire directly shares of
two banks that it acquired indirectly several years
ago in violation of law. We do not agree that the
Board should permit this to happen.
In essence the Board's Order in these cases turns
Applicant's violations of the Act into a positive
factor favoring approval. It is our view that if the
violations had not occurred the Board would probably have denied these applications. I f that is true
the logical conclusion is that the violations have lent
weight toward approval of these applications. We
might be willing to agree under the special circumstances of supervisory authorities' actions in these
cases that the violations should be a neutral factor,
but we cannot agree that they should be a positive
one.
We believe the Board's majority has attached
undue weight to the estimates of financial injury
which divestiture might cause Applicant, Dalton, or
Savannah. Any damage will unlikely be severe. To
a large extent "bookkeeping" losses that could be
incurred as a result of divestiture already exist in
A932
Federal Reserve Bulletin • October 1976
Applicant's consolidated financial resources, and
divestiture of Dalton might enhance Applicant's
financial resources rather than injure them. Furthermore, divestiture, once complete, should allow
Applicant to focus its managerial resources more
completely on its existing organization, which we
consider a material benefit. On the other side, we
do not see that retention of Dalton or Savannah will
improve Applicant's financial resources in any important way. While the bulk of Applicant's present
investments in Savannah and Dalton were made
several years ago, its proposed additional investment in Dalton may involve a diversion of existing
financial resources, and a complex, uncertain plan
for purchase of the additional shares.
A bank holding company may by various means
and for various reasons seek to avoid or postpone
review by the Board of its investments in banks and
other enterprises as Applicant did. A company that
elects to pursue such a course, and particularly if
undertaken in circumvention of the Act's requirements, should run the risk, however, that approval
may be foreclosed by the violation itself or by
events occurring between the time the investment is
made and the time it is presented to the Board for
evaluation.
For the foregoing reasons, we would deny these
applications.
Huntington Bancshares Incorporated
Columbus, Ohio
Order Approving Acquisition of Bank
Huntington Bancshares Incorporated, Columbus, Ohio ("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 Bank Holding Company Act (12
U.S.C. § 1842(a)(3)) C ' A c t ' ) to acquire 100 per
cent of the voting shares (less directors' qualifying
shares) of the successor by merger to The Central
National Bank of London, London, Ohio
("Bank"). The bank into which Bank is to be
merged has no significance except as a means to
facilitate the acquisition of the voting shares of
Bank. Accordingly, the proposed acquisition of
shares of the successor organization is treated
herein as the proposed acquisition of the shares of
Bank.
Notice of the application, affording opportunity
for interested persons to submit comments and
views, has been given in accordance with § 3(b) of
the Act. The time for filing comments and views has
expired, and the Board has considered the application and all comments received, including those of
the Department of Justice, in light of the factors set
forth in § 3(c) of the Act (12 U.S.C. § 1842(c)).
Applicant, the seventh largest banking organization in Ohio, controls twelve banking subsidiaries^
with aggregate deposits of approximately $1.4 billion, representing 4.1 per cent of total commercial
bank deposits in Ohio.^ Acquisition of Bank ($24.8
million in deposits) would increase Applicant's
share of Statewide commercial bank deposits by
0.07 per cent and would have no appreciable effect
upon the concentration of banking resources in
Ohio.
Bank is headquartered in the city of London,
Ohio, about 25 miles west of downtown Columbus,
and is the twelfth largest of 27 commercial banking
organizations (with 193 banking offices) located in
the Columbus banking market controlling approximately 0.7 per cent of the total commercial bank
deposits in the market.^ Applicant is the second
largest banking organization in the relevant market
with approximately 23.2 per cent of market deposits. While acquisition of Bank would increase
Applicant's market share, Applicant would remain
the second largest banking organization in the market, since the largest in the market (and the second
largest banking organization in the State) controls
43 per cent of market deposits. Also located in the
relevant market are banking subsidiaries of four
other Ohio multibank holding companies, all ranked
within the top eight banking organizations in the
State. Even though Applicant and Bank operate in
the same market and some existing competition
would be eliminated. Applicant's banking office
closest to Bank is located 8.3 miles east of Bank, in
Franklin County, and is separated from Bank by
seven intervening banking offices. Based upon the
above and other facts of record, it appears to the
Board that approval of the application would have
only a slightly adverse effect upon existing competition.
In assessing the effects of the proposal upon
future competition, the Board is of the view that
although Applicant may possess the capabilities to
^By action of August 31, 1977, the Board approved the acquisition by Applicant of the successor by merger to Bellefontaine
National Bank, Bellefontaine, Ohio.
^All banking data other than market deposit data are as of
December 31, 1976, and reflect bank holding company formations
and acquisitions approved as of June 30, 1977. A l l market data are
as of June 30, 1976.
^The relevant market is the Columbus banking market which is
approximated by the five-county Columbus SMS A. It includes all
of Franklin and Fairfield Counties, all of Pickaway County except
Perry and Salt Creek Townships, the southern two-thirds of
Madison County, all of Delaware County except the northernmost
townships, and the western half of Licking County.
Law Department
enter Madison County de novo and acquisition of
Bank would eliminate one independent banking
alternative in the relevant market, there are other
facts of record that mitigate these slightly adverse
competitive effects. Ohio's restrictive branching
law, which limits branching to home office counties, prohibits Applicant's present subsidiaries from
branching into the Madison County portion of the
market. Moreover, it appears unlikely that Applicant would enter Madison County de novo since the
population and deposits-per-banking-office ratios
are below State averages and the area of growth in
the Columbus Metropolitan Area is primarily north
and east of Columbus rather than southwest where
Bank is located. Furthermore, following approval
there would remain 20 other independent banks as
possible entry points into the market. Accordingly,
on the basis of the above and other facts of record,
it is concluded that consummation of the proposal
would have only slightly adverse effects upon potential competition.
In analyzing the competitive consequences of the
subject proposal, the Board has considered the
comments by the Department of Justice that consummation would have adverse competitive effects. However, in light of the Board's findings
described above, it does not appear that such
effects would be significant, and, balanced against
the convenience and needs considerations discussed below, the Board is of the view that denial of
the applicafion is not warranted.
The financial and managerial resources and future prospects of Applicant, its subsidiaries and
Bank are regarded as generally satisfactory and
consistent with approval. Affiliafion with Applicant
will enable Bank to provide its customers a much
greater variety of banking services beyond those it
currently offers and thereby increase its competitiveness in the market. The services Applicant has
indicated Bank will be able to provide its customers
which are not now offered by Bank include time
and savings deposits offering a wide range of
maturities, compounding of interest daily, expanded checking services to include Applicant's
'^All-in-One Account," and a bank credit card
service. Applicant w i l l also make available to
Bank's customers more specialized and diversified
trust and data processing services. The Board finds,
therefore, that considerations relating to the convenience and needs of the community to be served
lend such weight toward approval as to outweigh
any slightly adverse competitive effects that might
result from approval of the proposal. Accordingly,
it is the Board's judgment that the proposed acqui-
933
sition would be in the public interest and that the
application should be approved.
During its consideration of this application the
Board noted that, as a result of management and
director interlocks and other indicia of a close
relationship between Bank and The London Home
and Savings Company, acquisition of Bank might
cause Applicant, following consummafion of the
subject proposal, to be indirectly engaging in the
activity of operating a savings and loan association
(See Board Order of February 22, 1977, denying the
application of D. H . Baldwin Company, Cincinnati,
Ohio, to retain Empire Savings, Building and Loan
Association, Denver, Colorado (63 Federal Reserve
B U L L E T I N 280 (1977) . Accordingly, The Board's action herein is conditioned upon Applicant complying with its commitment to take steps following
acquisition of Bank which will result in the severance of the above interlocks, and the establishment
within one year after the acquisifion of Bank of The
London Home and Savings Company as a completely independent financial institution in the
Columbus banking market.
On the basis of the record, and for the reasons
summarized herein, the application is approved
subject to the condition set forth 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 Cleveland pursuant to
delegated authority.
By order of the Board of Governors, effective
September 14, 1977.
V o t i n g for this action: V i c e Chairman Gardner and
Governors Jackson and Partee. V o t i n g against this action:
Governor Coldwell. Absent and not voting: Chairman
Burns and Governors Wallich and L i l l y .
(Signed) G R I F F I T H L . GARW^OOD,
[SEAL]
Deputy
Secretary
Dissenting Statement of Governor
of the
Board.
Coldwell
As noted in the majority's opinion, the instant
proposal involves the acquisifion of a bank in the
Columbus banking market by the second largest
banking organizafion in the market, Huntington
Bancshares, Inc. Where a banking organization is
already represented in the market, a horizontal
acquisition such as the one proposed here results in
some elimination of exisfing competifion.
A934
Federal Reserve B u l l e t i n • October 1976
I n view of the absolute size of H u n t i n g t o n
Bancshares and its position in the market, it is my
opinion that the effects of the proposal on existing
competition are adverse. The Bank Holding Company Act requires the Board to deny the proposed
horizontal acquisition unless its anticompetitive effects are outweighed by other factors in the record.
It appears to me that the other factors are not
sufficient to outweigh the anticompetitive effects
present in this proposal. Therefore, I would deny
this application.
Jackson Hole Banking Corporation
Jackson, Wyoming
Order Denying
Formation of Bank Holding
Company
Jackson Hole Banking Corporation, Jackson,
Wyoming, has applied for the Board's approval
under § 3(a)(1) of the Bank Holding Company Act
(12 U.S.C. § 1842(a)(1)) of formation of a bank
holding company through acquisition of 91.3 per
cent of the common voting shares of The Jackson
State Bank, Jackson, Wyoming ( " B a n k " ) . Applicant also proposes to acquire nonvoting preferred
shares of Bank.
Notice of the application, affording opportunity
for interested persons to submit comments and
views, has been given in accordance with § 3(b) of
the Act. The time for filing comments and views has
expired, and the Board has considered the application and all comments received in light of the
factors set forth in § 3(c) of the Act (12 U.S.C.
§ 1842(c)).
Applicant is a nonoperating Wyoming corporation organized for the purpose of becoming a bank
holding company through the acquisition of Bank
($44.2 million in deposits).' Upon acquisition of
Bank, Applicant would control the 10th largest
banking organization in the State of Wyoming and
approximately 2.4 per cent of total deposits in
commercial banks in the State.
Bank is the larger of the two banks located in
Teton County, which approximates the relevant
banking market, and holds approximately 81.7 per
cent of the total commercial bank deposits in the
market. The proposed transaction involves the
transfer of ownership of Bank from individuals to a
corporation owned by the same individuals. Since
'Unless otherwise indicated, all banking data are as of December 31, 1976.
Applicant has no other subsidiaries, consummation
of the proposal would not have any adverse effect
upon existing or potential competition nor would it
increase the concentration of banking resources.
Thus, the Board concludes that the competitive
effects of the instant proposal are not adverse and
are consistent with approval.
The Board has indicated on previous occasions
that a h o l d i n g company should c o n s t i t u t e a
source of financial and managerial strength to its
subsidiary bank(s), and that the Board will closely
examine the condition of an applicant in each case
with this consideration in mind.^ Having examined
such factors in light of the record in this application,
the Board concludes that the record presents adverse considerations as they relate to the applicant
bank holding company that warrant denial of the
proposal to place the ownership of Bank into corporate form.
The president of Bank, along with members of
his family, are the principal shareholders of Bank
and, under this proposal, would become the president and principal shareholders of Applicant. The
president of Bank has served in that capacity for
approximately ten years. Material in the record
reflects that Bank's earnings and capital position
have generally been lower than those of similarly
situated banks in the State. Such results appear to
be attributable to the policies and practices currently in evidence in Bank's operations. Inasmuch
as no management changes are contemplated by
Applicant and this proposal would continue and
enhance management's control of Bank, the Board
is of the view that the record of Bank's operations
indicates that managerial factors are an adverse
consideration.
With respect to financial considerations, the
Board notes that Applicant would incur a sizable
debt in connection with the proposed acquisition of
Bank's shares. Applicant proposes to service this
debt over a 12-year period through dividends to be
declared by Bank and tax benefits to be derived
from filing consolidated tax returns. The projected
^The Bank Holding Company A c t is clear in its mandate that the
Board, in acting on an apphcation to acquire a bank, inquire into
the financial and managerial resources of an applicant. While this
proposal involves the transfer of the ownership of Bank f r o m
individuals to a corporation owned by essentially the same individuals, the A c t requires that before an organization is permitted
to become a bank holding company and thus obtain the benefits
associated with the holding company structure, it must secure the
Board's approval. Section 3(c) of the A c t provides that the Board
must, in every case, consider, among other things, the financial
and managerial resources of both the applicant company and the
bank to be acquired. The Board's action in this case is based on a
consideration of such factors.
Law Department
earnings for Bank contained in the application are
higher than Bank has generally enjoyed in the past,
as well as being higher than other banks in the area.
In addition, the projected asset growth of Bank is
much less than that experienced in recent years.
Based upon more realistic earnings and growth
projections, it is the Board's judgment that AppHcant would not have the necessary financial resources to meet its annual debt servicing requirements, maintain adequate capital at Bank, and meet
any unexpected problems that might arise at Bank.
It is true that Applicant's plan calls for it to incur
debt for the purpose of injecting capital into Bank;
however, a more appropriate means of achieving
capital improvement considering Bank's present
condition would be a retention of earnings and a
curtaiHng of dividends. In sum, the Board does not
view Applicant's overall financial plan as one that
would enable it to serve as a source of strength to
Bank or one that would enhance Bank's prospects.
Therefore, the Board concludes that considerations
relating to financial resources and future prospects
weigh against approval of this application.
No significant changes in Bank's operations or in
the services offered to customers are anticipated to
follow from consummation of the proposed acquisition. Consequently, convenience and needs factors
lend no weight towards approval of this proposal.
On the basis of the circumstances concerning this
application, 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 Applicant and Bank. Such adverse factors are not
outweighed by any procompetitive effects or by
benefits that would result in better serving the
convenience and needs of the community. Accordingly, it is the Board's judgment that approval of the
application would not be in the public interest and
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
September 30, 1977.
V o t i n g for this action: V i c e Chairman Gardner and
Governors Jackson, Partee, and L i l l y . Absent and not
v o t i n g : C h a i r m a n B u r n s and G o v e r n o r s W a l l i c h and
Cold well.
[SEAL]
(Signed) G R I F F I T H L . G A R W O O D ,
Deputy Secretary of the Board.
935
Metropolitan Bank and Trust Company,
Philippine Securities Corporation and
Tytana Corporation
Mikati, Rizal, Philippines
Amendment to Order Approving
Formation of Bank Holding Companies
By Order dated August 10, 1977, the Board
approved the applications of Metropolitan Bank
and Trust Company ("Metropolitan"), Philippine
Securities Corporafion and Tytana Corporation, all
of Makati, Rizal, PhiHppines, to become bank holding companies through the direct or indirect acquisition of up to 35 per cent of the voting shares of
Internafional Bank of California ( " B a n k " ) , Los
Angeles, California. Applicants have indicated that
Metropolitan intends to enter into a voting trust
agreement with shareholders of Bank, which voting
trust would be controlled by Metropolitan. The
shares in the voting trust would consist of the
shares to be owned by Applicants and such additional shares as are necessary for the voting trust to
control more than 50 per cent of the voting shares of
Bank. As a result of the voting trust. Applicants
would directly or indirectly control voting shares of
Bank in addition to the 35 per cent for which prior
Board approval was previously requested and approved. Applicants have amended their applications to reflect the fact that they intend to acquire
directly or indirectly ownership or control of more
than 50 per cent of the voting shares of Bank and
have requested that the Board amend its Order of
August 10, 1977, accordingly.
Notice of the amended 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 amended applications and all comments
received in light of the factors set forth in § 3(c) of
the Act (12 U.S.C. 1842(c)).
The request for amendment of the Board's previous Order presents no significant issues, and the
Board finds that the statutory considerations discussed in the Board's Order of August 10, 1977,
continue to be consistent with approval of the
applications for the reasons discussed therein. Accordingly, it is the Board's judgment that approval
of Applicants' requests would be in the pubhc
interest and that the request for amendment to the
Board's previous Order should be approved.
On the basis of the record, Apphcants' requests
are approved for the reasons summarized above.
The Board's Order of August 10, 1977, is hereby
936
Federal Reserve B u l l e t i n • October 1977
amended such that Applicants may acquire directly
or indirectly ownership or control of more than 50
per cent of the voting shares of Bank. The transactions 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 San Francisco pursuant to
delegated authority.
By order of the Board of Governors, effective
September 22, 1977.
V o t i n g f o r this action: Chairman B u r n s and Governors
Gardner, W a l l i c h , C o l d w e l l , Jackson, Partee, and L i l l y .
(Signed) G R I F F I T H L . G A R W O O D ,
[SEAL]
Deputy
Secretary
of the
Board.
Phillipsco, Inc.
Denver, Colorado
Order Approving
Formation of Bank Holding
Company
Phillipsco, I n c . , Denver, Colorado ( ' ' A p p l i cant"), has applied for the Board's approval under
§ 3(a)(1) of the Bank Holding Company Act ('^the
A c t " ) (12 U. S. C. § 1842(a)( 1)) of formation of a bank
holding company by acquiring 97.5 per cent of the
voting shares of The F i r s t N a t i o n a l Bank of
Holyoke, Holyoke, Colorado ( " B a n k " ) .
Notice of the application, affording opportunity
for interested persons to submit comments and
views, has been given in accordance with § 3(b) of
the Act. The time for filing comments and views has
expired, and the application and all comments
received have been considered in light of the factors
set forth in § 3(c) of the Act (12 U.S.C. § 1842(c)).
Applicant is a recently chartered, nonoperating
corporation, organized for the purpose of becoming
a bank holding company by acquiring Bank, which
holds deposits of $12.8 million.^ Upon acquisition
of Bank, Applicant would control the 139th largest
commercial bank in the State of Colorado. Appli-
'All banking data are as of December 31, 1976.
cant would control approximately 0.15 per cent of
total deposits in commercial banks in the State.
Bank, located in H o l y o k e , Colorado, is the
largest of three commercial banks in the relevant
banking market and holds approximately 55.9 per
cent of the total commercial bank deposits in the
market.2 It was recently purchased by Applicant's
principals. One of the principals of AppHcant is also
a director of a large Colorado multibank holding
company and an officer and director of one of its
subsidiary banks. However, that company currently has no subsidiaries in the relevant market,
and, therefore, there is no significant competition
between that company and Bank at this time. In
addition, it appears unlikely that consummation of
this proposal would have any adverse effect upon
potential competition or increase the concentration
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.
On February 15, 1977, Applicant agreed to acquire, subject to Board approval, shares of Bank
that Applicant's principals had purchased two
months earlier. In originally purchasing the shares
that are the subject of this application, those principals incurred debt which, if this application is
approved and the proposed transaction consummated, will be assumed by Applicant.
Upon consideration of the size and terms of this
debt, service of which will be dependent upon
Bank's earnings, the historic growth of the relevant
banking market in particular and Colorado banks in
general. Bank's historical earnings and the operating results of other banks located in the same
geographic area, the Board believes that Applicant's acquisition debt, the debt temporarily assumed by its principals in anticipation of Applicant's formation, can be serviced without adversely
affecting the financial resources of Bank, which are
considered generally satisfactory. In reaching this
conclusion, the Board is influenced by several
facts. First, Applicant will be able to service its
debt if Bank achieves earnings equal to the average
of banks in its area, and current Bank earnings are
well ahead of Applicant's projections. Second,
while Applicant is somewhat leveraged, the individual investors incurred no personal debt in mak-
^The relevant banking market is approximated by Phillips
County. Holyoke is the County Seat. Phillips County is in
northeastern Colorado. Population of this agricultural county
declined 7 per cent between l%Oand 1970 to 4,131. However, the
population of Holyoke increased 5.5 per cent in this same period to
1,646.
Law Department
ing a substantial capital contribution to Applicant.
Third, the principals of Applicant have many years
of banking experience. Finally, Applicant does not
plan any immediate expansion of its operations and
intends to limit its activities in the near future solely
to the ownership and management of Bank, thereby
permitting its entire resources to be devoted to
Bank. The Board therefore concludes that the financial resources and future prospects of Bank and
Applicant lend weight toward approval of the Application.
The Board also concludes that considerations
relating to the managerial resources of Bank and
Applicant lend weight toward approval of this
application. Applicant's managerial resources are
considered satisfactory and Applicant's principals
in the brief period they have controlled Bank pending disposition of this application have actively
strengthened Bank's managerial resources. Before
Applicant's principals acquired Bank, Bank had no
middle management and no plans for succession,
and the two senior officers were near or above
retirement age. Applicant's principals have substantial banking experience and have provided
Bank with experienced management which will
ensure management succession which was lacking
before.
Regarding convenience and needs factors. Applicant states that there are no plans for significant
changes in the kinds of services provided by Bank.
Under new ownership, however. Applicant's principals have initiated a more aggressive loan policy,
with the result that Bank has become more responsive to the borrowing needs of the area. In this
connection. Bank has been able to increase its loan
to deposit ratio without injury to the quality of its
loan portfolio. The Board regards the expansion of
Bank's lending services as a positive factor and,
therefore, concludes that convenience and needs
considerations lend weight toward approval of the
application.
For the reasons discussed above, the Board
concludes that approval of the application to become a bank holding company would be in the
public interest and that the application should be
approved.
On the basis of the facts of record and for the
reasons summarized above, the application is approved. 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 pur-
937
suant to delegated authority.
By order of the Board of Governors, effective
September 27, 1977.
V o t i n g f o r this action: Governors C o l d w e l l , Jackson,
Partee, and L i l l y . Absent and not v o t i n g : Chairman Burns
and Governors Gardner and W a l l i c h .
(Signed) G R I F F I T H L . G A R W O O D ,
[SEAL]
Deputy
Secretary
of the
Board.
Twin Lakes Financial Corporation
Wichita. Kansas
Order Approving
Formation of Bank Holding
Company
T w i n Lakes Financial Corporation, Wichita,
Kansas, has applied for the Board's approval under
§ 3(a)(1) of the Bank Holding Company Act (12
U.S.C. § 1842 (a)(1)) of formation of a bank holding
company through acquisition of 98.9 per cent of the
voting shares of Twin Lakes State Bank, Wichita,
Kansas ( " B a n k " ) .
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 fiHng comments and views has
expired, and the Board has considered the application and all comments received, in light of the
factors set forth in § 3(c) of the Act (12 U.S.C.
§ 1842(c)).
Applicant is a newly formed corporation organized under the laws of Kansas for the purpose of
becoming a bank holding company through the
acquisition of Bank. Bank ($28.4 million in deposits) ranks 84th among the 616 commercial banks
in Kansas and controls 0.3 per cent of the total
commercial bank deposits in the State.' Bank is the
14th largest of 28 commercial banks in the Wichita
banking market (the relevant market) and controls
approximately 1.9 per cent of the total deposits held
by commercial banks in that market.^ In addition to
Bank, there are two other banks in the Wichita
banking market affiliated with Applicant's principals."^ Applicant's principals also are affiliated with
^All banking data are as of December 31, 1976, and reflect bank
holding company formations and acquisitions approved as of July
31, 1977.
^The Wichita banking market is approximated by Sedgwick
County, Kansas.
3Wichita State Bank ($28.5 million in deposits) and United
American Bank & Trust Company ($29.9 million in deposits), with
1.9 and 2.0 per cent, respectively, of the total commercial bank
deposits in the Wichita banking market.
A938
Federal Reserve B u l l e t i n • October 1976
a bank in lola, Kansas, Allen County State Bank
($30.7 million in deposits), which is located over
100 miles east of Wichita, in a separate banking
market. It appears that the proposal would result in
some elimination of existing competition; however,
on the basis of all the facts of record, including the
relative size of the affiliated banking organizations
in the Wichita market (in the aggregate they control
5.75 per cent of total market deposits and together
would rank as the fifth largest banking organization
therein), the number of banking alternatives remaining in the market, the fact that consummation
of the proposal would not alter the competitive
relationship between Bank and the two other affiliated banks in the Wichita market, and the proposed transaction is essentially a reorganization of
existing ownership interests, the Board concludes
that consummation of this proposal would not have
any significant adverse effects upon either existing
or potential competition within the relevant market.
Applicant proposes to sell 24.9 per cent of its
voting shares to Sierra Petroleum Co., I n c . ,
Wichita, Kansas, and 24.9 per cent of its voting
shares to K & B Producers, Inc., Wichita, Kansas.^
As a result, Applicant will receive additional funding which it appears will allow Applicant to have
the necessary financial resources available to service its debt without impairing the financial condition of Bank."' In addition, as part of this proposal.
Bank's capital will be increased. Accordingly, the
financial and managerial resources and future prospects of Applicant and Bank are considered to be
satisfactory and consistent with approval of the
application.
Although there will be no immediate changes in
the operations or services of Bank as a result of this
proposal, considerations relating to the convenience and needs of the community to be served are
consistent with approval of the application. Based
upon the foregoing and other considerations reflected in the record, it is the Board's judgment that
the proposed acquisition is in the public interest and
that the apphcation should be approved.
On the basis of the record, the application is
approved for the reasons summarized above. The
acquisition of Bank shall not be made (a) before the
^Applicant's principals are also controlling shareholders in
Sierra Petroleum Co. Inc., and K. & B Producers, Inc., registered
bank holding companies by virtue of their control, respectively, of
United American Bank & Trust Company and Allen County State
Bank.
^In a related action, the Board today approved the applications
by Sierra Petroleum Co., Inc., Wichita, Kansas, and K & B
Producers, Inc., Wichita, Kansas, to acquire 24.9 per cent each of
the voting shares of Applicant.
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
September 29, 1977.
V o t i n g f o r this action: Governors W a l l i c h , Jackson,
Partee, and L i l l y . V o t i n g against this action: G o v e r n o r
Cold well. Absent and not voting: C h a i r m a n Burns and
G o v e r n o r Gardner.
[SEAL]
(Signed) G R I F F I T H L . G A R W O O D ,
Deputy Secretary of the Board.
Sierra Petroleum Co. Inc.
K & B Producers, Inc.
Order Approving Acquisition of
Shares of a Bank Holding Company
Sierra Petroleum Co., Inc., Wichita, Kansas
C'Sierra"), a bank holding company by virtue of its
ownership of 87.2 per cent of the voting shares of
United American Bank & Trust Company, Wichita,
Kansas C'United B a n k " ) , and K & B Producers,
Inc., Wichita, Kansas ( " K & B " ) , a bank holding
company by virtue of its ownership of 95.8 per cent
of the voting shares of Allen County State Bank,
lola, Kansas C'Allen B a n k " ) , have applied for the
Board's approval under § 3(a)(3) of the Bank Holding Company Act (12 U.S.C. § 1842(a)(3)) for each
to acquire 24.9 per cent of the voting shares of Twin
Lakes Financial Corporation, Wichita, Kansas
( " T w i n Lakes"), a proposed bank holding company with respect to Twin Lakes State Bank,
Wichita, Kansas ( ' T w i n Lakes 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 applications and all comments
and views received have been considered by the
Board in light of the factors set forth in § 3(c) of the
Act (12 U.S.C. § 1842(c)).
^In a related action, the Board approved today an application by
Twin Lakes to become a bank holding company through the
acquisition of 98.9 per cent of the voting shares of Twin Lakes
Bank.
^Pursuant to the Supreme Court's holding in Whitney National
Bank of Jefferson Parish v. Bank of New Orleans and Trust
Company, 379 U.S. 411, 419 (1965) the Board may not approve an
application by a bank holding company if Board approval of the
Law Department
Twin Lakes Bank ($28.4 million in deposits)
ranks 84th among 616 commercial banks in Kansas
and controls 0.3 per cent of the total commercial
bank deposits in the State.^ Twin Lakes Bank is the
I4th largest of 28 commercial banks in the Wichita
banking market (the relevant market) and controls
approximately 1.9 per cent of the total deposits held
by commercial banks in that market.^ Sierra's subsidiary bank, United Bank ($29.9 million in deposits), controls 2.0 per cent of the total deposits
held by commercial banks in the relevant market
and is the eighth largest commercial bank in that
market. K & B ' s subsidiary bank, Allen Bank ($30.7
million in deposits), is located in lola, Kansas, over
100 miles east of Wichita, in a separate banking
market. United Bank and Twin Lakes Bank are
located in the same banking market, along with a
third commercial bank' also controlled by the principals of Sierra and K & B ; thus, consummation of
the proposals would result in some elimination of
existing competition. However, it appears that the
proposed transactions will not have any significant
adverse competitive effects due to the relative size
of these banking organizations in the Wichita market (in aggregate they control only 5.75 per cent of
the total deposits in commercial banks in the market, and together would rank as the fifth largest
organization therein), the number of remaining
banking alternatives in the market, and the common
ownership ties between the three institutions. Accordingly, on the basis of the facts of record, the
Board concludes that consummation of the proposals would not have any significant adverse competitive effects in any relevant area.
The financial and managerial resources and future prospects of Sierra and its subsidiary bank
proposal contemplated by such application would result in the
violation of a valid State law. Kansas law prohibits the formation
of multi-bank holding companies. The relevant statute generally
defines a bank holding company as any company that directly or
indirectly owns, controls, or holds with power to vote, 25 per cent
or more of the voting shares of each of two or more banks; or
controls in any manner the election of a majority of the directors of
each of two or more banks (K.S.A. § 9-504). Notice of the subject
proposals has been given to the Kansas Banking Commissioner, as
required by § 3(b) of the Bank Holding Company Act (12 U.S.C.
§ 1842(b)). The Banking Commissioner has indicated that consummation of the proposals, which involve the direct acquisition by
Sierra and K & B of 24.9 per cent each of the voting shares of Twin
Lakes, would not contravene the provisions of Kansas law.
^All banking data are as of December 31, 1976, and reflect bank
holding company formations and acquisitions approved as of July
31, 1977.
^The relevant market is the Wichita banking market, approximated by Sedgwick County, Kansas.
•'Wichita State Bank, Wichita, Kansas ($28.5 million in deposits)
controls 1.9 per cent of total commercial bank deposits and ranks
13th in the relevant banking market.
939
and K & B and its subsidiary bank are considered
satisfactory and consistent with approval. The acquisition of T w i n Lakes' shares by Sierra and
K & B will not adversely affect the overall financial
conditions of Sierra, United Bank, K & B , Allen
Bank, or Twin Lakes Bank. To the contrary, the
proposals would have the effect of enabling Twin
Lakes to reduce the debt incurred in connection
with the acquisition of Twin Lakes Bank. Considerations relating to the convenience and needs of
the communities to be served also appear to be
consistent with approval of the applications. It is
the Board's judgment that the proposed transactions would be consistent with the public interest,
and that the applications to acquire shares of T w i n
Lakes should be approved.®
Based upon the foregoing and other considerations reflected in the record, the applications are
approved for the reasons summarized above. The
transactions to acquire shares of Twin Lakes 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
September 29, 1977.
V o t i n g f o r this section: Governors W a l l i c h , Jackson,
Partee, and L i l l y . V o t i n g against this action: G o v e r n o r
Coldwell. Absent and not voting: C h a i r m a n Burns and
Governor Gardner.
[SEAL]
(Signed) G R I F F I T H L . G A R W O O D ,
Deputy Secretary of the Board.
Dissenting Statement of Governor
Coldwell
I would deny the companion applications of
T w i n Lakes F i n a n c i a l C o r p o r a t i o n ( " T w i n
Hn connection with its consideration of the subject proposals,
the Board has by letters of today's date notified both Sierra and
K & B that, upon consummation of the proposals, the Board has
determined, on the basis of the record, that Sierra and K & B would
be capable of exercising a "controlling influence" over the
management or policies of Twin Lakes within the meaning of
§ 2(a)(c)(C) of the Act. Accordingly, upon consummation of the
proposals. Sierra and K & B are required to report Twin Lakes, as
well as its subsidiaries, as subsidiaries of Sierra and K & B and to
comply with the applicable provisions of the Act with respect to
such subsidiaries. Sierra and K & B have waived the requirement
of notice and opportunity for a hearing provided in the statute, and
this determination becomes final upon consummation of the
proposals.
A940
Federal Reserve Bulletin • October 1976
Lakes"), Sierra Petroleum Co., Inc. ("Sierra"),
and K & B , which are not outweighed by an benefit to the public. In connection with an earlier
cations involves a pyramiding arrangement and
entails an unsound debt structure that may have
adverse effects upon the subsidiary banks of Sierra
and K & B , which are not outweighed by an benefit to the pubhc. In connection with an earlier
application involving a practically identical debt
financing method,^ I expressed concerns which I
feel are also presented by these applications.
The public benefit to be derived from these
arrangements has not, in my opinion, been made
apparent and may even be regarded as negative. In
summary, it is my view that the basic financial
position of Sierra and K & B , as a result of the
proposal, would be such as to lessen the ability of
each to resolve unforseen financial problems that
may occur in their respective subsidiary banks,
and, thereby might reduce those banks' overall
ability to continue to serve the needs of their
respective communities. Further, the Hkelihood
that Twin Lakes would serve as a source of
strength for Twin Lakes State Bank would be
lessened in light of the fact that upon consummation of the proposal Twin Lakes would be owned
in part by bank holding companies which would
have the interests of their banking subsidiaries to
consider. The public benefits, if any, that may be
present are not sufficient to outweigh the negative
financial effects that will result from approval of
the applications.
For the above reasons, I would deny the applications.
ORDER
APPROVING
D E S I G N A T I O N OF PURCHASER OF SHARES
The Alfred I. Dupont Testamentary Trust
Florida National Banks of Florida, Inc.
By letter dated December 10, 1974, the Board
approved a plan of divestiture ( ' T l a n " ) proposed
by the Alfred I. duPont Testamentary Trust
C'duPont Trust") to divest all of its 2,330,638
shares (''Shares") of Florida National Banks of
Florida, Inc., Jacksonville, Florida ("Florida National"), representing 23.7 per cent of the out^See dissenting statement to the Board's Order of September 15,
1975, approving the application of Valley View Bancshares, Inc.,
Overland Park, Kansas, to acquire shares of Industrial
Bancshares, Inc., Kansas City, Kansas (61 Federal Reserve
B U L L E T I N . 6 7 6 , a t 678 (1975)).
standing voting shares of Florida National. Pursuant to the Plan, custody, title and voting rights
to the Shares were transferred to the Peoples First
National Bank of Miami Shores, Miami Shores,
Florida ("Miami Bank"), as Trustee under an
Irrevocable L i v i n g Trust Agreement, dated
December 23, 1974 (the 'irrevocable Trust").
Under the terms of the Irrevocable Trust, the
Miami Bank is required to sell the Shares at $18
per share or the publicly quoted bid price per share
for such stock on a date 60 days after the day on
which the sale of such stock by the Trust pursuant
to the Plan was approved by the Board, whichever
price is greater,^ to Florida National Associates,
Inc. ( " F N A " ) , a corporation organized by the
presidents of five of Florida National's subsidiary
banks, provided FNA qualified within 33 months
after the effective date of the Irrevocable Trust as
financially able to purchase the Florida National
Shares.
Under the Plan, the stock of FNA was to be offered
to officers, directors and employees of Florida
National and its subsidiaries and certain customers
of Florida National's subsidiaries. However, FNA
has the right under the Plan to elect not to purchase the Shares itself and instead to designate a
person or persons to purchase the Shares by "private placement," provided that such purchaser is
approved by the Board within the 33 month
period. If FNA fails to qualify as financially able to
purchase the Shares or fails to designate a purchaser approved by the Board within that period,
FNA's rights under the Plan terminate and the
terms of the Irrevocable Trust provide that the
Miami Bank as trustee must sell the Shares at
public sale by a registered secondary offering.
By letter dated August 25, 1977, FNA advised
the Board that FNA had designated Florida National as the purchaser of the Shares, and FNA
requested the Board's approval of its designation.
Florida National proposes to purchase the Shares,
which will be held in its treasury, for $18 per
share, or an aggregate of approximately $42 million
cash, as required by the Plan.^ In connection with
'Since the quoted market price of Florida National stock has at
no time been as high as $18 per share since the Board's approval of
the Plan, $18 is the minimum sale price fixed by the Irrevocable
Trust.
2By letter dated August 26, 1977, Florida National notified the
Federal Reserve Bank of Atlanta, pursuant to § 225.6(a) of
Regulation Y (12 C.F.R. § 225.6(a)), that Florida National intended to purchase 2,330, 638 shares of its own common stock and
it requested a waiver of the 45-day waiting period required by that
section. Because the Board has already examined and approved
the proposed purchase of the Shares by Florida National, it hereby
waives the 45-day period.
Law Department
the Board's consideration of FNA's designation of
Florida National, Florida National has indicated to
the Board its willingness to take certain actions
designed to insure an effective and complete
termination of any control relationship between
the duPont Trust and Florida National and the
complete separation of Florida National's banking
and related interests from the nonbanking interests
of the duPont Trust.
On the basis of the record before it, including
the above-mentioned commitments by Florida National, the Board has determined that the acquisition of the Shares by Florida National pursuant to
the terms of this Order is consistent with the
Board's objectives in approving the Plan and will
fully and effectively implement the intent of Congress as reflected in the 1966 Amendments to the
Bank Holding Company Act to separate the banking and nonbanking interests then held by the
duPont Trust. Accordingly, the application by
FNA for approval of its designation of Florida
National as the purchaser of the Shares is hereby
approved. Any provision of the Plan that may be
inconsistent with the Board's action herein is
deemed to be modified to conform with this action
of the Board.
In connection with its approval of FNA's designation of Florida National as the purchaser of the
Shares, and pursuant to the Board's power under
section 5(b) of the Act (12 U.S.C. § 1844(b)) to
issue orders to administer and carry out the purposes of the Act and to prevent evasions thereof,
the Board hereby further orders as follows:
1. No past, present or successor individual trustee, policy-making employee or agent of the duPont Trust nor any director, officer or policymaking
employee of any subsidiary or affiliate of the Trust
(or any person related to, partner of or associated
or affiliated with, subject to influence by, or related by blood or marriage to any such individual)
shall be eligible for election to the board of directors or to serve as an officer or policy-making
employee of Florida National or any of its bank or
nonbank subsidiaries.
2. No person who is serving, or who has in the
preceding three years served, as legal counsel to
the Trust or any subsidiary or affiliate of the Trust
or to any individual trustee, agent or policymaking employee of the duPont Trust (or any
person related to, partner of, or associated or
affiliated with, or subject to influence by or related
by blood or marriage to any such individuals), or
to any person described in paragraph 1 above,
shall be eligible for election to the board of direc-
941
tors of or to serve as an officer or policy-making
employee of Florida National or any of its bank or
nonbank subsidiaries.
3. No person indebted to the Trust, or to any
subsidiary or (affiliate of the Trust, or to any
person described in paragraph 1 or 2 above, shall
be eligible for election to the board of directors of
or to serve as an officer or policy-making
employee of Florida National or any of its bank or
nonbank subsidiaries.
4. Commencing not later than the next regular
meetings of shareholders in 1978, at least twothirds of the board of directors of Florida National
and two-thirds of the board of directors of Florida
First National Bank of Jacksonville, Jacksonville,
Florida, shall be persons who are unconnected
with management and who are not officers or
employees of Florida National or any of its subsidiaries or affiliates ("outside directors").
5. Florida First National Bank of Jacksonville,
Jacksonville, Florida, shall resign (or be removed)
as Corporate Trustee of the Alfred I. duPont Testamentary Trust as soon as possible, but in no
event later than June 30, 1978. Thereafter, neither
the Florida First National Bank of Jacksonville nor
any other subsidiary or affiliate of Florida National
shall serve as a trustee of the duPont Trust.
6. If Florida National or any of its bank or
nonbank subsidiaries wishes to retain or continue
to retain any attorney or law firm that has in the
past represented or at this time represents the
duPont Trust, or any subsidiary or individual trustee of the Trust, such action must be approved by
a majority vote of the outside directors of Florida
National or the subsidiary wishing to retain such
counsel.
7. No director, officer, employee or agent of
Florida National or any bank or nonbank subsidiary or affiliate thereof shall communicate in
any manner with any trustee, policy-making
employee, agent or representative of the duPont
Trust or any of its subsidiaries concerning any
matter relating to the management, policies or
operations of Florida National or any bank or
nonbank subsidiary or affiliate thereof, except in
the same manner and under the same circumstances as communications are made to all
shareholders of Florida National.
8. Florida National and each of its subsidiary
banks will provide a certified copy of a resolution
adopted by their respective boards of directors to
the effect that neither the duPont Trust nor any of
its subsidiaries or affiliates nor any individual trustee of the duPont Trust presently controls or exer-
A942
Federal Reserve Bulletin • October 1976
cises a controlling influence over the management
or policies of such company or its subsidiary bank,
and that such company or subsidiary will not in the
future permit the exercise over it of control or a
controlling influence by the Trust, its subsidiaries
or affiliates, or individual trustees, either directly
or indirectly.
9. No person shall be selected by Florida National to act as proxy for the voting of shares of
Florida National at any meeting of shareholders
who is an officer or employee of Florida National
or any subsidiary or affiliate thereof.
10. No director, officer,
policymaking
employee, or agent of Florida National or any of
its subsidiaries or affiliates (and no person affiliated with, related to by blood or marriage or
indebted to any of the foregoing) shall act or serve
in any similar capacity with the duPont Trust or
any of its subsidiaries or affiliates or as trustee of
the duPont Trust.
11. All loan and deposit relationships between
Florida National (and its subsidiaries) and the duPont Trust or any of its subsidiaries or affiliates
shall be entered into and maintained on substantially the same terms and conditions as those prevailing at that time for comparable transactions
with other persons.
12. Florida National shall submit such reports
under oath, in writing or otherwise as the General
Counsel of the Board or the Federal Reserve Bank
of Atlanta may require to insure compliance with
the terms and purposes of this Order.
The foregoing requirements, as well as the requirements contained in the Plan approved by the
Board on December 10, 1974, shall remain obligatory upon Florida National and its subsidiaries and
the duPont Trust, its trustees, subsidiaries and
affiliates, unless and until the Board of Governors
may determine otherwise.
A full Statement relating to this action will be
issued at a later date.
By order of the Board of Governors, effective
September 21, 1977.
V o t i n g for this action: Chairman Burns and Governors
Gardner, Wallich, Coldwell, Jackson, Partee, and L i l l y .
(Signed)
[SEAL]
THEODORE E . A L L I S O N ,
Secretary of the Board.
Statement
By letter dated August 25, 1977, Florida National Associates, Inc., Jacksonville, Florida
( " F N A " ) , requested, pursuant to the provisions of
the Plan of Divestiture ("Plan") submitted by the
Alfred L duPont Testamentary Trust ("duPont
Trust") with respect to its 2,330,638 shares (the
"Shares") of Florida National Banks of Florida,
Inc. Jacksonville, Florida ("Florida National"),
the approval of the Board of FNA's designation of
Florida National as purchaser of the Shares. The
Plan was approved by the Board on December 10,
1974. By Order dated September 21, 1977, the
Board approved FNA's designation of Florida National as purchaser of the Shares, and in connection with such approval, and acting pursuant to the
Board's authority under section 5(b) of the Bank
Holding Company Act (the " A c t " ) (12 U.S.C.
§ 1844(b)), the Board directed Florida National to
comply with certain requirements set forth in the
Order designed to insure the effective and complete separation of Florida National's banking and
related interests from the nonbanking interests of
the duPont Trust that was mandated by Congress
in 1966.
The Alfred I. duPont Testamentary Trust was
established in 1935 with assets of about $27 milHon, consisting mainly of shares in E.I. duPont
de Nemours & Co., Florida real estate and properties, and controlling interests in a number of banks
in Florida. M r . Edward Ball, M r . duPont's
brother-in-law, was named as one of the four original trustees of the duPont Trust and continued to
manage the Florida properties owned by the Trust
as he had done prior to Mr. duPont's death. With
Mr. Ball serving, in effect, as managing trustee,
the Trust expanded its bank holdings to include
some 30 banks located throughout the State of
Florida. Together these banks constituted the
largest banking organization in Florida prior to
1970. The Trust's nonbanking interests, which
continued to expand after Mr. duPont's death,
included among others, the St. Joe Paper Company and the Florida East Coast Railway Company.
As originally enacted in 1956, the Bank Holding
Company Act did not include testamentary trusts,
such as the duPont Trust, as companies subject to
the Act's prohibitions against the ownership of
nonbanking interests by firms that controlled
banks. In 1966, however, focusing primarily upon
the extensive banking and industrial interests in
the duPont Trust, Congress amended the Act's
definition of " c o m p a n y " to include long-term
Law Department
trusts and it removed the Act's exemption for
religious, charitable and educational institutions.
The 1966 Amendments to the Act required that
within 5 years, (that is, by July 1, 1971) the duPont
Trust either divest its nonbanking interests or
cease to be a bank holding company. In 1970, the
duPont Trust submitted to the Board its plan to
comply with the 1966 Congressional mandate. It
proposed: (1) to transfer the Trust's banking interests to a newly formed bank holding company in
return for stock in the holding company, and (2)
thereafter to reduce the Trust's interest in the new
holding company to less than 25 per cent of its
voting shares.
On August 13, 1970, the Board approved, as the
first step in the Trust's compliance with the 1966
Amendments, the application of Florida National
to become a bank holding company through an
exchange of its own shares for all of the shares of
the 30 banks owned by the duPont Trust. In its
Order approving the reorganization, the Board advised the duPont Trust that in order to comply
with the Act, the Trust would have to eliminate all
relationships with Florida National that would enable the Trust to exercise control or a controlling
influence over the holding company or its subsidiary banks.
On February 11, 1971, Florida National consummated its acquisition of nearly all of the shares
of the 30 banks owned by the duPont Trust. The
duPont Trust thereby acquired 59.6 per cent of
Florida National's outstanding shares. Officers, directors, and employees of the Florida National
banks acquired almost 9 per cent. Mr. Ball personally acquired 6.4 per cent, and the estate of Mr.
Ball's sister, Jessie Ball duPont, acquired 4.5 per
cent. On June 24, 1971, the duPont Trust sold over
3 million of its Florida National shares to the
public, thereby reducing the Trust's holding of
Florida National's voting shares to 24.9 per cent.
In May 1971, Mr. Ball resigned his position as
Coordinator of the Florida National banks,^ as
well as all other official positions he held with
Florida National and its subsidiary banks, including his seats on the boards of directors of four of
the subsidiary banks.^ By early 1972, all interlockT r i o r to July 1, 1971, Mr. Ball, through the Coordinator's
Office, which he headed, dominated completely the management,
operations and policies of the 30 Florida National banks owned by
the duPont Trust.
^Mr. Ball did, however, select the president for Florida National
(a position equivalent to that of Coordinator held by Mr. Ball until
May 1971) and all of its initial directors. The Coordinator's Office
formed the nucleus of Florida National, The staff of the
Coordinator's Office became basically the staff of Florida National.
943
ing officers and directors between the duPont
Trust and its subsidiaries, on the one hand, and
Florida National and its subsidiary banks, on the
other hand, were terminated.
In September 1971, the Board adopted, as an
amendment to its Regulation Y, certain presumptions of control designed to implement the expanded definition of "control" brought about by
the 1970 Amendments to the Act.=^ One of the
rebuttable presumptions (12 C.F.R. § 225.2(b)(2))
provided, in effect, that shares of a bank holding
company held by officers, directors or trustees of a
second company would be considered to be indirectly controlled by the second company where
the second company itself owned or controlled
more than 5 per cent of the holding company's
shares and the combined stock ownership in the
holding company of the second company and its
officers, directors and trustees together amounted
to 25 per cent or more of the holding company's
shares. Under this provision, the duPont Trust's
24.9 per cent interest in Florida National coupled
with Mr. Ball's 6.4 per cent gave rise to the
presumption that the duPont Trust continued to
control Florida National, and thus indicated a finding that the duPont Trust's divestiture of its banking interest had not been complete or effective.
On July 5, 1973, acting pursuant to the procedures set forth in Regulation Y, the Board issued a
preliminary determination that the duPont Trust
exercised control and/or a controlling influence
over the management or policies of Florida National and its subsidiary banks and, therefore, had
failed to divest control of Florida National and its
subsidiary banks as required by the 1966 Amendments to the Act. The Board's preliminary determination was based on six factors:
1. The duPont Trust's ownership of over 24 per
cent of Florida National's shares.
2. The apparent continuation, after July 1, 1971,
of pre-existing relationships between the duPont
Trust and its trustees and Florida National.
3. Trustee Ball's service for 20 years as Coordinator of the Florida National banks.
4. Trustee Ball's ownership of Florida National's shares.
5. The ownership of 4.5 per cent of Florida
National's shares by the Estate of Mrs. duPont
(Trustee Ball's sister), the executors of which were
individuals who served as trustees of the duPont
Trust.
=^The 1970 Amendments added § 2(a)(2)(c) to the Act, which
defined " c o n t r o l " to include the exercise of a controUing influence
over the management or policies of another firm.
A944
Federal Reserve Bulletin • October 1976
6. The fact that no person (other than the Trust
and Trustee Ball) owned more than 5 per cent of
the voting shares of Florida National.
The duPont Trust did not contest the preliminary determination of control and indicated to the
Board its willingness to divest itself of its entire
interest in Florida National. By Order dated October 15, 1973, the Board made final its determination that the duPont Trust had continued after July
1, 1971, to exercise control and/or a controlling
influence over Florida National and, therefore, had
remained a bank holding company. Accordingly,
the Board ordered the duPont Trust to terminate
its control and/or controlling influence over
Florida National and to divest the 2,330,638 shares
of Florida National held by the duPont Trust no
later than December 31, -1974. The duPont Trust
was further ordered to submit a specific plan of
divestiture.
By letter dated December 10, 1974, the Board
approved a plan of divestiture that provided for the
immediate and irrevocable transfer of custody,
title and voting rights to the Shares to the Peoples
First National Bank of Miami Shores, Miami
Shores, Florida ("Miami Bank"), as trustee under
an Irrevocable Living Trust. Under the terms of
the Irrevocable Trust, the Miami Bank was required to sell the Shares at $18 per share or the
publicly quoted bid price per share for such stock
on a date 60 days after the day on which the sale of
such stock by the duPont Tmst pursuant to the Plan
was approved by the Board, whichever price was
greater,^ to FNA, a corporation organized by the
presidents of five of Florida National's subsidiary
banks, provided FNA qualified within 33 months
after the effective date of the Irrevocable Trust as
financially able to purchase the Florida National
Shares.
Under the Plan, the stock of FNA was to be
offered to officers, directors and employees of
Florida National and its subsidiaries and certain
customers of Florida National's subsidiaries.
However, FNA had the right under the Plan to
elect not to purchase the Shares itself and instead
to designate a person or persons to purchase the
Shares by "private placement," provided that
such purchaser was approved by the Board within
the 33 month period. If FNA failed to qualify as
financially able to purchase the Shares or failed to
^Since the quoted market price of I^lorida National stock has at
no time been as high as $18 per share since the Board's approval of
the Plan, $18 was, in effect, the minimum sale price fixed by the
Irrevocable Trust.
designate a purchaser approved by the Board
within that period, FNA's rights under the Plan
were to terminate, and the Miami Bank was required to sell the Shares at public sale. At such
public sale, persons affiliated with the duPont
Trust, its trustees or any of the subsidiaries of the
duPont Trust were to be prohibited from purchasing the Shares.
During 1977, it became clear to FNA that it
would not be able to demonstrate its financial
capacity to purchase the Shares by the time its
purchase rights were to expire under the Plan.
Accordingly, FNA elected to exercise its rights
under the Plan to designate a purchaser and on
August 25, 1977, FNA requested Board approval
of its designation of Florida Nafional.-^ Florida
National proposed to purchase the Shares, which
will be held in its treasury, for $18 per share, or an
aggregate of approximately $42 million cash, all of
which will be borrowed. Florida National anticipates that approximately $17 million of the principal amount will be repaid early in 1978 with funds
available to Florida National as the result of mergers among several of its subsidiary banks. Florida
National, with 32 subsidiary banks having aggregate
assets of $1.6 billion (as of December 31, 1976) is the
fourth largest banking organization in Florida. Florida
National's financial and managerial resources are
regarded as safisfactory and its future prospects
appear favorable. While the purchase of the Shares
by Florida National will result in a significant
increase in the company's debt, the Board believes
that Florida National has sufficient resources to
service the debt and still remain a source of financial strength to its subsidiary banks.
Following receipt of FNA's August 25, 1977
designation of Florida National as purchaser of the
Shares, an extensive field investigation was conducted by staff of the Board and the Federal
Reserve Bank of Atlanta to determine the extent to
which, if at all, the duPont Trust or any of its
trustees or any other person affiliated with the
duPont Trust may have continued after December
10, 1974 (the date the Board approved the duPont
Trust Plan of Divesfiture) to exercise control or a
^In connection with its analysis of FNA's designation of Florida
National, Board staff reviewed F N A ' s designation of Duke University, Durham, North Carolina, as alternative purchaser of the
Shares, as well as the offers to purchase the Shares submitted to
F N A by Combanks Corporation, Winter Park, Florida. However,
the Duke designation was withdrawn by F N A , and was in any
event not to be considered by the Board unless it disapproved the
Florida National designation, and F N A did not accept Combanks' ofifer. Accordingly, the Board was not called upon to consider the merits of these proposals. However, the documents relating
to these proposals were in the record before the Board.
Law Department
controlling influence over the affairs of Florida
National and its subsidiary banks, and to assess the
effect that a purchase of the Shares by Florida
National might have with respect to any existing or
potential control relationship between the duPont
Trust and Florida National.® The investigation indicated that following the transfer of the Shares to the
Miami Bank under the Irrevocable Living Trust,
the previous control relationship between the duPont Trust and Florida National began to dissipate
substantially. Management of Florida National and
its subsidiary banks assumed working control over
Florida National, new directors were added to the
Florida National board who had no prior affiliation
with the Trust or its trustees, and substantial operational and policy changes were effected independent of and without consultation with, or review,
influence or control by the duPont Trust, its individual trustees or any subsidiary or affiliate of the
duPont Trust. With the exception of the duPont
Trust's contacts with Florida National's lead bank,
Florida First National Bank of Jacksonville,
Jacksonville, Florida (''Jacksonville Bank"), in its
capacity as corporate trustee of the duPont Trust,
the investigation disclosed no evidence of efforts by
or on behalf of the Trust to influence the day-to-day
operations or policies of Florida National. The lack
of such evidence, in the Board's view, was significant indication of Florida National's ability to carry
on its operations independent of the duPont Trust
or any of its related interests.
While it thus appeared to the Board that the 1974
divestiture of the Shares by the duPont Trust to the
Miami Bank was substantially effective in terminating the control relationship between Florida National and the duPont Trust, the Board was concerned that if Florida National were to purchase the
Shares, certain other relationships between the
duPont Trust and Florida National might provide
the duPont Trust with the potential ability to influence the affairs of Florida National and its subsidiary banks in a manner inconsistent with the
objectives sought by Congress in the 1966 Amendments to the Act. This potential would, of course,
have been significantly lessened if the Shares had
been sold to F N A, or to a third party block purchaser because a countervailing ownership force
would thereby have been created and the pur-
®In the course of the investigation, the Board's representatives
personally interviewed all of the trustees of the duPont Trust, all
of the F N A officers, senior officials and directors of Florida
National and its subsidiary banks, as well as a number of other
persons whose interests were known to be adverse to those of the
duPont Trust, Mr. Ball or F N A .
945
chaser's very substantial equity investment in the
Shares would have created a strong incentive on the
part of the purchaser to act in its own interest and
independent of the duPont Trust.
Because Florida National's purchase of the
Shares would eliminate the possible creation of
such an independent ownership interest, it was
necessary, in the Board's view, that an approval of
that purchase be accompanied by the imposition of
protective restraints that would assure an effective
and permanent separation of Florida National's
banking and related interests from the duPont
Trust's nonbanking interests in order to carry out
the 1966 mandate of Congress. The requirements
imposed in the Baord's Order of September 21,
1977, were designed and are intended by the Board
to remove any remaining potential for the duPont
Trust to exert control or a controlling influence
over Florida National and its subsidiary banks.
These protective requirements should also
strengthen the ability and resolve of the management of Florida National to continue to operate the
holding company independent of the duPont Trust.
The Order directs the termination of all remaining
relationships between the duPont Trust and Florida
National, and prohibits the creation of future relationships that offer the potential for a continuation
of reestablishment of the duPont Trust in a control
relationship with respect to Florida National.
Significant among the relationships that the
Board has directed be terminated, is the continued
service of the Jacksonville Bank as corporate trustee of the duPont Trust. So long as the Jacksonville
Bank remained a trustee of the duPont Trust it not
only shared legal title to the nonbanking assets held
in the Trust, ^ but potentially held a position as the
deciding and controlling vote in the event of disagreements among the individual trustees. ^In view of the
continuing disagreement and litigation among the
individual trustees, the significance of the Jacksonville Bank's position in this regard could have
provided an incentive for the Trust or individual
trustees to attempt to exert influence over Florida
National with regard to the administration of the
affairs of the Trust. In the Board's judgment, these
^Section 4(c)(4) of the Act exempts fi-om the Act's prohibitions
against ownership or control of nonbanking assets by a bank
holding company shares held in good faith in a fiduciary capacity,
except where such shares are held under a trust that itself
constitutes a "company" as defined in the Act. Since the duPont
Trust is a "company" within the Act's definition, this exemption
is not available to Florida National.
®As corporate trustee, the Jacksonville Bank had power not
only to break a tie vote among the individual trustees, but to vote
in such a way as to create a tie vote among the trustees and then to
vote again to break the tie.
A946
Federal Reserve B u l l e t i n • October 1976
factors, as well as the desirability in general of
separating the Jacksonville Bank from involvement
with the business interests of the Trust, weighed
heavily for removal of the Jacksonville Bank as
corporate trustee.
Although the Board's Order does not contain
provisions addressed directly to the personal stock
ownership in Florida National of Mr. Ball or the
Estate of Jessie Ball duPont, the Board recognizes
that at present these interests together represent the
largest single block of stock in Florida National.
The Board believes, however, that the protective
provisions contained in the Order are fully adequate
to insure that this stock interest cannot be used to
reestablish a control relationship between the duPont Trust and Florida National.
The Board intends to monitor closely the operations of Florida National and relationships between
Florida National and the duPont Trust and its
representatives and it will not hesitate to take
action to insure compUance with the terms and
purposes of this Order. In this regard, the Board
emphasizes that the officers and directors of
Florida National and its subsidiaries, and particularly those directors who are not also officers, bear
a heavy responsibility for assuring that both the
letter and spirit of the Order are faithfully observed.
Board of Governors of the Federal Reserve System, October 3, 1977.
[SEAL]
(Signed) T H E O D O R E E . A L L I S O N ,
Secretary of the Board.
ORDER U N D E R SECTIONS 3 A N D 4
OF T H E B A N K H O L D I N G C O M P A N Y
ACT
D. H . Baldwin Company
Cincinnati, Ohio
Order Approving Formation of Bank Holding
Company and Acquisiton of Nonbanking
Activities
D. H . Baldwin Company, Cincinnati, Ohio,^ has
applied for the Board's approval under § 3(a)(1)
of the Bank Holding Company Act (12 U.S.C.
§ 1842(a)( 1)) to form a bank holding company through
^The original application was filed by New Parent Company (a
Delaware corporation), Cincinnati, Ohio; however, New Parent
Company's name was changed to D. H. Baldwin Company in
order to protect that name in Delaware.
acquisition of 87.2 per cent of the voting shares of
the successor by merger to D. H . Baldwin Company, Cincinnati, Ohio ( " B a l d w i n - O h i o " ) , ^ and
thereby .to acquire indirectly Baldwin-Ohio's direct
and indirect interests in its twelve subsidiary banks.
The company into which Baldwin-Ohio is to be
merged has no significance except as a means to
facilitate the acquisition of the voting shares of
Baldwin-Ohio. Therefore, the proposed acquisition
of shares of the successor organization is treated
herein as the proposed acquisition of the shares of
Baldwin-Ohio.
Applicant has also applied, pursuant to § 4(c)(8)
of the Act (12 U.S.C. § 1843(c)(8)) and § 225.4(b)(2)
of the Board's Regulation Y , for permission to
indirectly engage in the following nonbanking activities of Baldwin-Ohio: data processing, mortgage
banking, real and personal property leasing, consumer finance, and credit-related insurance agency
activities. Such activities have been previously
determined by the Board to be closely related to
banking (12 CFR § 225.4(a)(1), (3), (6), (8), and
(9)(ii)).
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 Register 33805 (1977)). 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)), and the
considerations
specified
in
§ 4(c)(8) o f the
Act
(12 U.S.C. § 1843(c)(8)).
Applicant, a nonoperating Delaware corporation,
was organized as part of a corporate reorganization
whereby Applicant will acquire control of an existing multibank holding company, Baldwin-Ohio,
with a view toward eventual separation of its banking and commercial activities in furtherance of the
purposes of the Act. The proposal involves applicant's direct acquisition of 87.2 per cent of the voting
shares of Baldwin-Ohio and indirect acquisition of
^Baldwin-Ohio became a bank holding company as a result of
the 1970 Amendments to the Bank Holding Company Act of 1956
by virtue of its indirect ownership of more than 25 per cent of the
voting shares of The Central Bank and Trust Company, Denver,
Colorado. Baldwin-Ohio has been engaged in the manufacturing
and selling of musical instruments for over 100 years and continues to engage in these activities on the basis of permanent
grandfather privileges pursuant to the proviso contained in
§ 4(a)(2) of the Act, Baldwin-Ohio also engages through subsidiaries
in the activities of operating a savings and loan association and
underwriting life and casualty insurance, which may not be
retained beyond December 31, 1980, pursuant to § 4(a)(2) of the
Act (see 59 Federal Reserve BULLETIN 536 (1973) and 63 Federal
Reserve BULLETIN 280 (1977)).
Law Department
the banking and nonbanking subsidiaries of
Baldwin-Ohio. Accordingly, the nature and scope
of Applicant's banking and nonbanking activities
will be identical to that of Baldwin-Ohio.
Baldwin-Ohio, the fourth largest commercial
banking organization in Colorado, controls 12
banks with aggregate deposits of $664.5 million,
representing approximately 7.9 per cent of the total
deposits held by commercial banks in the State.^
Inasmuch as the proposed transaction is merely a
corporate reorganization of existing ownership interests, the Board finds that consummation of the
proposal would not eliminate existing or potential
competition or increase the concentration of banking resources in any relevant market. Accordingly,
competitive considerations are consistent with approval of the application. .
The financial and managerial resources and future prospects of Applicant, which are dependent
upon those of Baldwin-Ohio, are considered to be
generally satisfactory and their future prospects
appear favorable. Thus, considerations relating to
banking factors are consistent with approval.
While consummation of the proposal would result in no immediate alterafions of Baldwin-Ohio's
banking operafions and it appears that the needs of
its banking customers are being adequately met,
considerations relating to convenience and needs of
the community to be served are consistent with
approval. Accordingly, it is the Board's judgment
that Applicant's proposal to form a bank holding
company would be consistent with the public interest and that the applicafion should be approved.
In connection with its application to become a
bank holding company, Applicant has also applied
to acquire indirectly the following permissible nonbanking activities and subsidiaries of BaldwinOhio: Computer Congenerics Corporation of Colorado (data processing), located in Denver and
Grand Junction, Colorado; C. C. Fletcher Mortgage
Company (mortgage banking), Cincinnati, Ohio;
Baldwin Finance Company and its subsidiary. The
Baldwin Company (real and personal property leasing and consumer finance), both located in Cincinnati, Ohio; FMC-Baldwin Leasing Company (personal property leasing), Chicago, Illinois; and
Louisville Mortgage Service Company (mortgage
banking and credit-related insurance), Louisville,
Kentucky. Since the proposed transaction is essentially a corporate reorganization and Baldwin-Ohio
presently engages in such activities, it does not
^All banking data are as of December 31,1976, unless otherwise
indicated.
947
appear that approval of Applicant's proposal would
have any significant effect on existing or future
competifion. On the other hand, approval of the
applications would assure Baldwin-Ohio's customers of the continuation of convenient sources of
such nonbanking services. Furthermore, there is no
evidence in the record indicating that consummation of this proposal would result in any undue
concentrafion of resources, unfair competition,
conflicts of interests, unsound banking practices, or
other adverse effects upon the public interest.
Based upon the foregoing and other considerations reflected in the record, the Board has determined in accordance with the provisions of § 4(c)(8)
of the Act that consummafion of this proposal can
reasonably be expected to produce benefits to the
public that outweigh possible adverse effects and
that the applicafions to engage in certain nonbanking activities should be approved.
The proposed acquisition of Baldwin-Ohio by
Applicant also involves the acquisition by the latter
of certain nonbanking activities that are being engaged in by Baldwin-Ohio pursuant to the provisions of § 4(a)(2) of the Act, including the grandfather proviso of that section. The Board regards
Applicant as a "successor" to Baldwin-Ohio within
the meaning of § 2(e) of the Act,^ and as such it will
be entitled to all the rights accorded by, and subject
to all the obligations imposed by the Act upon
Baldwin-Ohio.^ Accordingly, the Board believes
that Applicant may retain and engage in those
nonbanking activities to the same extent and duration that Baldwin-Ohio is presently entitled to
engage in such activities.
On the basis of the record, the applications are
approved for the reasons summarized above. The
acquisition of Baldvv'in-Ohio's banking subsidiaries
shall not be made before the thirtieth calendar day
following the effective date of this Order; and the
acquisition of neither the banking nor the nonbanking subsidiaries shall be accomplished later than
three months after the effective date of this Order
unless such period is extended for good cause by
^As a "successor" to Baldwin-Ohio, Applicant is deemed,
pursuant to § 2(a)(6) of the Act, to be a bank holding company
from the date on which Baldwin-Ohio became a bank holding
c o m p a n y , D e c e m b e r 31, 1970.
•'In this connection, the Board notes that Baldwin-Ohio has
indicated that it intends to file, upon approval of the subject
applications, an irrevocable declaration pursuant to § 4(c)(12) of
the Act and § 225.4(d) of Regulation Y that it will cease to be a
bank holding company. In the event that such a declaration is filed
and the proposed transaction is consummated, the Board would
also view Applicant, Baldwin-Ohio's successor pursuant to § 2(e)
of the Act, as a successor to the privileges and commitments
imposed by such declaration.
A948
Federal Reserve B u l l e t i n • October 1976
the Board or by the Federal Reserve Bank of
Kansas City, with respect to the banking subsidiaries, pursuant to delegated authority, and, with
respect to the nonbanking subsidiaries, pursuant to
authority delegated hereby. The determination as to
Apphcant's permissible nonbanking activities is
subject to the conditions set forth in § 225.4(c) of
Regulation Y and to the Board's authority to require reports by, and to make examinations of,
bank holding 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 fmds 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
September 14, 1977.
V o t i n g f o r this action: V i c e Chairman Gardner and
Governors Cold w e l l , Jackson, and Partee. Absent and not
voting: Chairman Burns and Governors W a l l i c h and L i l l y .
[SEAL]
(Signed) G R I F F I T H L . G A R W O O D ,
Deputy Secretary of the Board.
ORDERS U N D E R SECTION 4
OF B A N K H O L D I N G C O M P A N Y
ACT
Financial Services Corporation of the Midwest
Rock Island, IlHnois
Order Approving
Acquisition of a Consumer Finance
Company
Financial Services Corporation of the Midwest,
Rock Island, Illinois, 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, through a recently estabHshed subsidiary. Federal Discount Company, all
of the voting shares of Federal Discount Corporation, Dubuque, Iowa ( " F D C " ) , a company that
engages, through seven subsidiary companies, in
the activities of making consumer instalment loans,
purchasing consumer instalment sales finance contracts, and acting as agent for the sale of credit life
and credit accident and health insurance related to
extensions of credit by the subsidiaries of FDC.
Such activities have been determined by the Board
to be closely related to banking (12 C.F.R. §
225.4(a)(1) and (9)(ii)).
Notice of the application, affording opportunity
for interested persons to submit comments and
views on the public interest factors, has been duly
pubhshed (42 Fed. Reg. 34553 (1977)). The time for
filing comments and views has expired, and the
Board has considered the application and all comments received in light of the public interest factors
set forth in § 4(c)(8) of the Act (12 U.S.C. §
1843(c)(8)).
Applicant controls one bank, the ninety-first
largest commercial bank in Illinois, with deposits of
approximately $88 million, representing approximately 0.14 per cent of total deposits in commercial
banks in the State. ^ Apphcant also controls FSC
Money Shops, a consumer finance subsidiary with
offices in Moline, East MoHne, and Milan, lUinois.
FDC operates its consumer finance business in
the States of Iowa, Illinois, Wisconsin, Minnesota,
and North Dakota, through subsidiaries known as
Thrift Plan, Inc. (Iowa), Community Loan Corporation (lUinois), Citizens Loan and Investment Company (Wisconsin and Minnesota), Phoenix Budget
Loans, Inc. (Minnesota), Citizens Loan and Finance Company (Wisconsin), and Phoenix Finance
Company (North Dakota). ^ F D C also controls
20.49 per cent of the outstanding stock of Dubuque
Bank and Trust Company, Dubuque, Iowa, all of
which stock w i l l be distributed to the present
common stockholders^ of FDC as part of the acqui-
'Unless otherwise noted, banking data are as of December 31,
1976.
^FDC and its consumer finance subsidiaries sell short-term
subordinated invenstment notes and certificates ("thrift notes") to
small investors in order to augment their operating funds. As of
June 30, 1977, the aggregate amount of such thrift notes, excluding
approximately $4.0 million issued in passbook form by two of
FDC's subsidiaries licensed as industrial loan companies and
examined on a periodic basis by State regulatory authorities, was
$12.0 million, representing approximately 30 per cent of FDC's
total consolidated assets, less its investments in Life of MidAmerica Insurance Company and Dubuque Bank and Trust Company (both of Dubuque, Iowa), which will be divested as part of
the acquisition transaction, (a) no sales of thrift notes issued by
FDC or its finance company subsidiaries would be made by them
in the principal service area of Applicant's subsidiary bank; (b) all
such thrift notes would indicate that they are not obligations of or
guaranteed by any bank and are not covered by federal deposit
insurance; (c) the net proceeds from the sale of such notes by FDC
and its subsidiaries would be used solely for the purpose of
providing funds for FDC's consumer finance business; and (d)
within a year of consummation of the proposed acquisition, the
aggregate principal amount of such notes and certificates would be
reduced so as not to exceed 25 per cent of FDC's total consolidated assets. On the basis of all of the facts of record, the Board
has determined that the issuance and sale of such notes by FDC
and its subsidiaries subject to the above conditions would not
result in a violation of the Banking Act of 1933 (the Glass-Steagall
Act) by reason of the affiliation of Applicant's member bank
subsidiary with FDC.
^At no point will Applicant or its recently estabhshed subsidiary, Federal Discount Company, own or control any of such
bank's stock.
Law Department
sition transaction. I n addition, FDC owns all of the
capital stock of an insurance company, Life of
Mid-America Insurance Company, Dubuque, Iowa,
which as a part of this application, FDC has committed to divest.
FDC competes in fifty-eight local consumer finance markets, one of which—the "Quad Cities"
consumer finance market, the Davenport, Iowa/
Rock Island, Illinois Ranally Metropolitan Area,
the relevant geographic market for purposes of
reviewing this application—^is also the primary consumer finance market in which Applicant's subsidiary bank and consumer finance company compete. Applicant holds, through its bank subsidiary
and three offices of its consumer finance subsidiary, approximately $16.7 million in consumer
finance receivables originated in the Quad City
market area, representing approximately 8.5 per
cent of the total amount of such receivables originated by financial institutions in the market. FDC
controls, through t w o offices of its consumer
finance subsidiary operating in Illinois, approximately $1.2 million of consumer finance receivables
that were originated in the Quad Cities market,
representing 0.6 per cent of total receivables
originated by financial institutions in the market. ^
Thus, upon consummation of the proposed acquisition, AppHcant's share of the Quad Cities consumer
finance market would increase only slightly. In
view of the insubstantial increase in Applicant's
market share and the competitive structure of
consumer finance lending in the Quad Cities market, it appears that consummation of the proposal would not have any significant adverse effects
on existing competition in the relevant area. In that
Applicant is not one of the most likely entrants into
other consumer finance markets in which FDC
competes, it does not appear that consummation of
the proposed acquisition would eliminate any substantial amounts of competition. Furthermore,
there is no evidence in the record indicating that
consummation of this proposed transaction would
result in any undue concentration of resources,
unfair competition, conflicts of interests, unsound
banking practices, or other adverse effects upon the
public interest.
C o n s u m m a t i o n of the proposed acquisition
would facilitate FDC's provision of increased consumer services, such as home improvement loans,
secondary mortgages on developed real estate, and
vehicle financing. Accordingly, it appears that the
^Within the Quad Cities market, Applicant and FDC generally
compete with 28 consumer finance companies, 27 commercial
banks and 125 credit unions.
949
acquisition proposal would produce benefits to the
public that are consistent with and lend weight
toward approval of this application.
Based upon the foregoing and other considerations
reflected in the record, the Board has determined,
in accordance with the provisions of § 4(c)(8) of the
Act, that Applicant's acquisition of FDC can reasonably be expected to produce benefits to the
public that outweigh possible adverse effects. Accordingly, the application is hereby approved. This
determination is subject to the conditions set forth
in § 225.4(c) of Regulation Y and to the Board's
authority to require such modification or termination of the activities of a holding company or any of
its subsidiaries as the Board finds necessary to
assure comphance with the provisions and purposes of the Act and the Board's regulations and
orders issued thereunder, or to prevent evasion
thereof.
The transaction shall be made not later than three
months after the effective date of this Order, unless
such period is extended for good cause by the
Board or by the Federal Reserve Bank of Chicago,
pursuant to authority hereby delegated.
By order of the Board of Governors, effective
September 9, 1977.
V o t i n g f o r this action: C h a i r m a n B u r n s and Governors
Gardner, W a l l i c h , C o l d w e l l , and L i l l y . A b s e n t and not
voting: Governors Jackson and Partee.
(Signed) GRIFFITH L . GARWOOD,
[SEAL]
Deputy
Secretary
of the
Board.
First Commerce Corporation
New Orleans, Louisiana
Order Approving
Acquisition of Downtown Finance Plan,
Inc.
First Commerce Corporation, N e w Orleans,
Louisiana, a bank holding company within the
meaning of the Bank Holding Company Act, has
applied for the Board's approval, under section
4(c)(8) of the Act (12 U.S.C. § 1843(;c)(8)) and
section 225.4(b)(2) of the Board's Regulation Y (12
C.F.R. § 225.4(b)(2)) to acquire indirectly through
its wholly-owned subsidiary. First Money, Inc.,
( " M o n e y " ) certain consumer promissory note obligations of Downtown Finance Plan, Inc. ("Company") a company that engages in the activity of
making of both secured and unsecured consumer
extensions of credit and the sale of credit life and
credit accident and health insurance in connection
A950
Federal Reserve Bulletin • October 1976
with those extensions of credit. Such activities have
been determined by the Board to be closely related
to banking (12 C.F.R. § 225.4(a)(1) and (9)). Although title to the stock of Company will remain in
its current shareholders, these shareholders plan to
liquidate Company after the sale of assets to Applicant, and, accordingly, the proposed acquisition of
Company's assets is treated herein as an acquisition
of Company.
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 Register 37598 (1977)). The
time for filing comments and views has expired, and
the Board has considered the application and all
comments received in light of the public interest
factors set forth in section 4(c)(8) of the Act (12
U.S.C. § 1843(c)(8)).
Applicant, the second largest banking organization in Louisiana, controls the First National Bank
of Commerce, New Orleans, Louisiana, with
aggregate deposits of $611.9 million representing
approximately 4.7 per cent of the total deposits in
commercial banks in the State. ^ Money engages in
the activities of extending credit to consumers,
selling credit life and credit accident and health
insurance, and engaging in certain leasing activities.
Applicant proposes to acquire assets of Company
valued at approximately $145,000 and to serve
customers of Company affected by the sale from a
nearby office of Money.
Although Money engages in consumer finance
activities at the present time, it does not appear that
any significant existing competition would be eliminated by this acquisition inasmuch as Company is
one of 195 finance companies operating in the New
Orleans metropolitan area^ and accounts for a small
proportion of the business of these companies.
Company will close its sole office irrespective of
the Board's action on the instant application and
thus the market would lose a competitor in any
case. Accordingly, the Board finds that Applicant's
acquisition of Company would not have any significant effect upon competition.
It appears that consummation of this proposal
would not result in any undue concentration of
resources, conflicts of interests, unsound banking
practices, or any other adverse effects on the public
interest.
'All banking data are as of December 31, 1976.
^The New Orleans metropolitan area consists of Orleans, Jefferson, St. Bernard, Plaquemines, and St. Tammany Parishes.
As a result of this proposal. Money will be able to
offer Company's customers a greater variety of
loans than those now offered by Company and a full
range of other consumer finance services. In the
Board's judgment, the slight addition to market
concentration that would result from this proposal
is outweighed by the public benefits that will result
from the proposal.
Based upon the foregoing and other considerations 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
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.
The transaction shall be made not later than three
months after the effective date of this Order, unless
such period is extended for good cause by the
Board or by the Federal Reserve Bank of Atlanta,
pursuant to authority hereby delegated.
By order of the Board of Governors, effective
September 21, 1977.
V o t i n g f o r this action: C h a i r m a n B u r n s and Governors
Gardner, W a l l i c h , C o l d w e l l , Jackson, Partee, and L i l l y .
[SEAL]
(Signed) G R I F F I T H L . G A R W O O D ,
Deputy Secretary of the Board.
Landmark Banking Corporation of Florida
Fort Lauderdale, Florida
Order Approving Application to
Engage in the Activity of
Providing Management Consulting Advice
Landmark Banking Corporation of Florida, Fort
Lauderdale, Florida, a bank holding company
within the meaning of the Bank Holding Company
Act, has applied for the Board's approval, under
§ 4(c)(8) of the Act (12 U.S.C. § 1843(c)(8)) and
§ 225.4(b)(2) of the Board's Regulation Y (12 CFR
§ 225.4(b)(2)), to engage de novo in the activity of
providing management consulting advice to nonaffiliated commercial banks. Such activity has been
determined by the Board to be closely related to
banking (12 CFR § 225.4(a)(12)).
Law Department
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. 34554 (1977)). The time for
filing comments and views has expired, and the
Board has considered the application and all comments received, including those submitted by the
United States Department of Justice, in the light of
the public interest factors set forth in § 4(c)(8) of the
Act (12U.S.C. § 1843(c)(8)).
Applicant, the eighth largest commercial banking
organization in Florida, controls seventeen banks
with aggregate deposits of approximately $869 million, representing 3.2 per cent of the total deposits
in commercial banks in the State.' Applicant is also
engaged, through nonbank subsidiaries, in the permissible nonbank activities of providing investment
advisory and mortgage banking services.
Applicant proposes to engage de novo in providing management consulting advice to nonaffiliated
commercial banks on an explicit fee basis only.
Such consulting services would include advice concerning bank operations, systems and procedures,
computer operations and mechanization, cost
analysis, and site planning. Since Applicant proposes to engage in these activities de novo, it does
not appear that any meaningful competition would
be eliminated or potential competition foreclosed as
a result of approval of the application. Rather, it
appears that Applicant's de novo entry into this
industry should have a procompetitive effect by
increasing the number of firms offering this specialized consulting advice. Furthermore, by making
this service available on an explicit fee basis rather
than as a correspondent banking service, clients
will be able to analyze more accurately the cost of
such services and may be able to allocate their
funds more efficiently.
There is no evidence in the record to indicate that
Applicant's engaging in the activity of providing
management consulting advice would result in any
undue concentration of resources, unfair competition, conflicts of interests or unsound banking practices.^
Based upon the foregoing and other considerations reflected in the record, the Board has
'Unless otherwise noted,all banking data are as of December
31, 1976.
^In connection with the subject application, the United States
Department of Justice submitted a letter expressing concern that
possible conflicts of interests could result from approval of this
proposal. However, at the time the Board adopted the activity of
providing management consulting advice to nonaffiliated banks
pursuant to section 4(c)(8) of the Act, the Board considered the
potential for conflicts of interests resulting from a bank holding
951
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
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.
The transaction shall be made not later than three
months after the effective date of this Order, unless
such period is extended for good cause by the
Board or by the Federal Reserve Bank of Atlanta,
pursuant to authority hereby delegated.
By order of the Board of Governors, effective
September 26, 1977.
V o t i n g f o r this action: G o v e r n o r s W a l l i c h , C o l d w e l l ,
Jackson and Partee. A b s e n t and not voting: Chairman
Burns and G o v e r n o r s Gardner and L i l l y .
[SEAL]
(Signed) G R I F F I T H L . G A R W O O D ,
Deputy Secretary of the Board.
Republic New York Corporation
New York, New York
Order Approving
Retention of Republic Clearing Corporation
Republic New York Corporation (''Republic"),
New York, New York, and its five parent bank
holding companies have applied, pursuant to section 4(c)(8) of the Bank Holding Company Act (12
U.S.C. § 1843(c)(8)) and section § 225.4(a) and
(b)(2) of the Board's Regulation Y (12 C.F.R.
§ 225.4(a) and (b)(2)), for permission to retain voting shares of their subsidiary, Republic Clearing
Corporation C'RCC"), New York, New York, after
that company expands the activities in which it
engages to include acting as a futures commission
merchant to execute, for the account of persons
company's engaging in this activity. In recognition of this potential, the Board incorporated in Regulation Y a number of restrictions upon a bank holding company's performance of this activity,
including the stipulation that any bank holding company providing
management consulting advice must disclose to each potential
client bank the names of all banks that are affiliates of the
consulting company and the names of all existing client banks
located in the same market area(s) as the potential client. The
Board is of the opinion that these restrictions provide ample
protection against possible conflicts of interests.
A952
Federal Reserve Bulletin • October 1976
whose business is entirely or substantially devoted
to trading and dealing in gold and silver bullion and
coins ("precious metals professionals"), futures
contracts covering gold and silver bullion and coins
on contract markets of which RCC is a member.^
RCC now provides this service for the account of
two affiliated banks, and the sole purpose of these
applications is to permit RCC to extend the same
service to certain customers of those banks. This
activity has not been specified by the Board in
section 225.4(a) of Regulation Y as permissible for
bank holding companies.
Notice of receipt of these applications, affording
opportunity for interested persons to submit views
and comments, has been given in accordance with
section 4 of the Act (42 Fed. Reg. 31626 and 38015)
and the time for filing views and comments has
expired. No request for a hearing has been received, but the Board has received a number of
comments, favoring and opposing approval, and
has considered the applications and those comments in light of the considerations specified in
section 4(c)(8) of the Act (12 U.S.C. § 1843(c)(8)).
Applicants are bank holding companies by virtue
of their direct and indirect ownership of voting
shares of Republic National Bank of New York
("Bank"), New York, New York.^ RCC is a direct
wholly owned subsidiary of Republic and is consequendy an indirect subsidiary of the remaining
Applicants. RCC was organized in December 1974,
and is held by AppHcants under authority of section
4(c)(1)(C) of the Act, which permits a bank holding
company to own shares of a company engaged
solely in furnishing or performing services for the
bank holding company or of its banking subsidiaries. In accordance with that limitation, RCC
has become a member of four contract markets^
and has acted as a futures commission merchant^
executing futures contracts in gold and silver solely
for the account of Bank and Trade Development
Bank, one of its parent bank holding companies."
Applicants now propose that RCC extend this service to those customers of Bank and Trade Development Bank who are precious metals professionals. Such an expansion requires Board approval
because RCC would no longer be engaged solely in
furnishing or performing services for Bank and its
parent bank holding companies, and it would accordingly lose the benefit of the exemption it currently enjoys under section 4(c)(1)(C) of the Act.^
In order to approve these applications under
section 4(c)(8), the Board must determine that the
proposed activity is so closely related to banking or
managing or controlling banks as to be a proper
incident thereto. The Board has previously determined certain gold and silver coin and bullion
activities to be closely related to banking. In its
Order of September 27, 1973, the Board, on the
basis of that determination, permitted Standard and
Chartered Banking Group, Limited, London, England, a foreign bank holding company, to acquire
directly 30 per cent of the voting shares of Mocatta
Metals, Inc. ("Mocatta"), New York, New York,
and to acquire indirectly Mocatta's five subsidiaries, one of which was organized to engage in
the same activity that is the subject of the present
applications.^ Bank has been active in international
banking activities and in the precious metals field
for a number of years, and upon examination of the
facts of record of the present applications, including
the fact that the proposed service appears to be an
integral adjunct to precious metals professionals'
other gold and silver deahngs with Bank and is
fundamentally a substitute for or variation of other
^Trade Development Holland Holding B.V., Amsterdam, The
Netherlands; Trade Development Finance (Netherlands Antilles)
N . V . , Curacao, The Netherlarids Antilles; Trade Development
Bank, Geneva, Switzerland; Trade Development Bank Holding
S.A., Luxembourg, Luxembourg; and Saban S.A., Panama,
Panama.
^Pursuant to a reorganization approved by the Board June 20,
1977 (63 Federal Reserve BULLETIN 683), Trade Development
Bank has no actual direct or indirect ownership of Bank's shares,
and a request is now pending before the Board, approval of which
would have the effect of terminating Trade Development Bank's
status as a bank holding company.
^Commodity Exchange, Inc. and New York Mercantile Exchange, New York, New York; Internationa] Money Market
Division of Chicago Mercantile Exchange, Inc., Chicago, Illinois;
and Winnepeg Commodity Exchange, Winnepeg, Canada. Bank
could itself become a clearing member of an exchange and engage
in the activities now engaged in by RCC under section 4(c)(1)(C).
See letter of March 12, 1975, to Bank from J. T. Watson, Deputy
Comptroller of the Currency. RCC is not a clearing member of the
Winnepeg Commodity Exchange.
^A futures commission merchant, as defined in 7 U.S.C. § 2,
includes a corporation engaged in soliciting or accepting orders for
the purchase or sale of a commodity for future delivery on or
subject to the rules of any contract market and that accepts, in
connection with such business, money or other property (or
extends credit in lieu thereof) to margin, guarantee, or secure any
resulting trades or contracts.
'RCC also now acts as a futures commission merchant in
executing futures contracts in foreign exchange on behalf of Bank
and Trade Development Bank, but under Applicant's proposal
RCC would not offer this service to other persons,
•^In addition to prior Board approval, RCC must register as a
futures commission merchant with the Commodity Futures Trading Commission before it offers its service to precious metals
professionals.
^38 Fed. Reg. 27552. The Board's Order was based in part on
the express statutory authority of national banks to purchase and
sell bullion and coin, and the Order specifically required Mocatta
to terminate its trading activities in platinum, palladium, and all
other commodities not so authorized.
Law Department
precious metals services Bank currently provides to
its customers, the Board has determined that in this
instance acting as a futures commission merchant
for the execution of futures contracts covering gold
and silver bullion and coins on contract markets is
closely related to banking.
To approve these applications the Board must
also determine that the proposed activity is a proper
incident to banking or managing or controlling
banks. This test requires the Board to consider
whether the performance of the proposed activity
by RCC in accordance with the terms of these
applications "can reasonably be expected to produce benefits to the public, such as greater convenience, increased competition, or gains in efficiency, that outweigh possible adverse effects, such
as undue concentration of resources, decreased or
unfair competition, conflicts of interests, or unsound banking practices."
Commencement by RCC of the proposed activity
may be expected to serve the convenience of Applicants' precious metals customers, and it would
have a procompetitive effect in the limited precious
metals field, permitting Applicants to compete on a
more equal footing with their competitors by providing a full range of precious metals services
required by Applicants' customers and generally
available from their competitors. Approval is expected to result as well in certain gains in efficiency, as spreading the fixed costs of RCC's existing
operation over a greater volume of business will
result in lower costs per transaction.
With respect to possible adverse effects, nothing
in the record indicates that Applicants' proposal
would result in any undue concentration of resources or unfair competition. The Board recognizes there is some potential in the proposal for
conflicts of interests and for financial exposure that
could lead to unsound banking practices. Both
areas of concern, however, are subject to regulation
and safeguards prescribed by the exchanges and the
Commodity Futures Trading Commission, and the
Board is particularly influenced by Bank's long
experience and demonstrated competence in the
coin and bullion field in concluding that in this
specific case the public benefits to be derived from
Applicant's proposal outweigh these potential adverse effects. The Board is also influenced by the
fact that RCC will provide its futures commission
merchant service only to those customers of Bank
and Trade Development Bank who are precious
metals professionals, and RCC does not propose to
solicit or provide the service to any other unaffiliated person.^
953
Accordingly, on the basis of the record and for
the reasons summarized above, the applications are
approved, subject to the limitations specified in the
applications that Applicants restrict RCC's gold
and silver futures commission merchant service to
Bank, Trade Development Bank, and those of their
customers whose business is entirely or substantially devoted to dealing or trading in gold and silver
bullion and coins (including futures contracts pertaining thereto), and that RCC not solicit or accept
such business from other persons or advertise the
service in the financial press or other mass media.
RCC shall commence its proposed activity not later
than three months after the effective date of this
Order, unless such period is extended for good
cause by the Board or by the Federal Reserve Bank
of New York pursuant to authority hereby delegated. This determination is subject to the conditions set forth in section 225.4(c) of Regulation Y,
and to the Board's authority to require reports by
and make examinations of bank holding 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 or to prevent
evasion thereof.
By order of the Board of Governors, effective
September 14, 1977.
V o t i n g f o r this action: V i c e C h a i r m a n Gardner and
Governors W a l l i c h and Partee. V o t i n g against this action:
Governors Jackson and L i l l y . A b s e n t and not v o t i n g :
Chairman Burns and G o v e r n o r C o l d w e l l .
[SEAL]
(Signed) G R I F F I T H L . G A R W O O D ,
Deputy Secretary of the Board.
®Under section 4(c)(8) the Board may proceed either by Order
or regulation to determine whether an activity is closely related
and a proper incident to banking. The Board has determined to act
on these applications by Order. The record reflects that the
financial risks associated with a "wholesale" futures business,
such as that specifically proposed, are materially less than those
inherent in a "retail" futures business, and the Board has not
undertaken to assess generally the balance of public interest
factors outside the narrow and limited scope of Applicants'
specific proposal. This balance could be struck differently in the
case of any bank holding company less fit than Applicants by
experience and by the character of its general banking business to
engage in the activity, or in the case of any proposal to solicit or
serve a broad range of customers.
A954
Federal Reserve Bulletin • October 1976
Dissenting Statement of Governor Jackson
I would not approve these applications because I
do not consider the activity of a futures commission
merchant business, even limited to gold and silver,
closely related or a proper incident to banking or
managing or controlling banks. While dealing in
gold and silver is specifically authorized by law,
banks in this country do not engage in the business
of commodity brokerage. I do not believe that the
brokerage function is necessary to perform the
dealership function. An adverse effect of authorizing the brokerage function in addition to the dealer
function is the potential conflict of interest which
would arise when the broker is called upon to
service the needs of its affiliate banks at the same
time outside customers require similar services.
This potential for conflict is obvious in commodity
futures operations, which have daily trading limits.
In view of the narrow range of customers that
Applicant proposes to serve and the availability of
these services elsewhere, I see insufficient public
benefits to offset this adverse effect.
DETERMINATIONS
REGARDING ''GRANDFATHER
PRIVILEGES"
UNDER BANK HOLDING COMPANY
ACT
Colorado Funding Company
Denver, Colorado
Section 4 of the Bank Holding Company Act (12
U.S.C. 1843) provides certain privileges (^'grandfather privileges") with respect to nonbanking activities of a company that, by virtue of the 1970
Amendments to the Bank Holding Company Act,
became subject to the Bank Holding Company Act.
Pursuant to § 4(a)(2) of the Act, a ''company
covered in 1970" may continue to engage, either
directly or through a subsidiary, in nonbanking
activities that such company was lawfully engaged
in on June 30, 1968 (or on a date subsequent to June
30, 1968, in the case of activities carried on as a
result of the acquisition by such company or subsidiary, pursuant to a binding written contract entered into on or before June 30, 1968, of another
company engaged in such activities at the time of
the acquisition), and has been continuously engaged in since June 30, 1968 (or such subsequent
date).
Section 4(a)(2) of the Act provides, inter alia,
that the Board of Governors of the Federal Reserve
System may terminate such grandfather privileges
if, having due regard to the purposes of the Act, the
Board determines that such action is necessary to
prevent undue concentration of resources, decreased or unfair competition, conflicts of interest,
or unsound banking practices. The Board is required to make such a determination with respect to
a company that controls a bank with assets in
excess of $60 million on or after December 31,1970.
Notice of the Board's proposed review of the
grandfather privileges of Colorado Funding Company, Denver, Colorado, affording an opportunity
for interested persons to submit comments and
views or request a hearing, has been given (40 Fed.
Reg. 57398). The time for filing comments, views,
and requests has expired, and all those received
have been considered by the Board in light of the
factors set forth in § 4(a)(2) of the Act.
On the evidence before it, the Board makes the
following findings. Colorado Funding Company,
Denver, Colorado ("Registrant"), became a bank
holding company on December 31, 1970, as a result
of the 1970 Amendments to the Act, by virtue of
Registrant's ownership of approximately 97.5 per
cent of the voting shares of The Colorado State
Bank of Denver, Denver, Colorado ("Bank") (assets
of $66.5 million as of December 31, 1973). Bank,
control of which was acquired by Registrant in
November 1964, had total deposits of approximately $67.1 million as of December 31, 1976,
representing 1.3 per cent of the aggregate deposits
in commercial banks in the Denver banking market,' and is the eleventh largest banking organization in that market. Bank's managerial and financial
resources, and its future prospects are regarded as
generally satisfactory, and the Board has found no
evidence of any unsound banking practices.
On June 1, 1967, Registrant purchased Brancucci
Produce Company, and has operated it as a subsidiary since that time. Brancucci Produce Company is based on Adams City, Colorado, a suburb
of Denver, and is engaged in the wholesale processing and distribution of produce. In 1976 net income
from this operation was $62,000 representing 6.9
per cent of Registrant's income for that year. Since
Registrant has been engaged in this activity continuously since prior to June 30, 1968, it appears to
be eligible for grandfather privileges.
'The Denver banking market is approximated by Denver,
Adams, Arapahoe and Jefferson Counties, Colorado, and the
Broomfield portion of Boulder County, Colorado.
Law Department
On June 30, 1968, Registrant was engaged directly in the sale of credit life, health and accident
insurance in connection with instalment loans
made by Bank. However, since Registrant discontinued its insurance activities in December 1975,
such activities are not eligible for grandfather
privileges because Registrant has not been engaged
in them continuously since June 30, 1968.
Registrant owns indirectly through Bank 100 per
cent of Colorado State Bank Corporation, a limited
partner in a partnership owning 50 per cent of the
building occupied by Bank. Since such activities
appear to be exempt from the prohibitions of section 4 of the Act by virtue of section 4(c)(1)(A) of
the Act, Registrant need not rely on § 4(a)(2) of the
Act for authority to continue such activities.
On the basis of the foregoing and all the facts
before the Board, it appears that the volume, scope,
and nature of the grandfathered activity of Registrant and its subsidiary do not demonstrate an
undue concentration of resources, decreased or
unfair competition, conflicts of interest or unsound
banking practices.
There appears to be no reason to require Registrant to terminate its interest in its grandfathered
subsidiary. It is the Board's judgment that, at this
time, termination of the grandfather privileges of
Registrant is not necessary in order to prevent an
undue concentration of resources, decreased or
unfair competition, conflicts of interest, or unsound
banking practices. However, this determination is
not authority to enter into any activity that was not
engaged in on June 30, 1968 and continuously
thereafter, or any activity that is not the subject of
this determination.
A significant alteration in the nature or extent of
Registrant's grandfathered activities or a change in
location thereof (significantly different from that
described in this determination) will be cause for a
re-evaluation by the Board of Registrant's activities
under the provisions of § 4(a)(2) of the Act, that is,
whenever the alteration or change is such that the
Board finds that a termination of the grandfather
privileges is necessary to prevent an undue concentration of resources or any of the other adverse
effects designated in the Act. No merger, consolidation, acquisition of assets other than in the ordinary course of business, or acquisition of any
interest in a going concern, to which the Registrant
or its nonbank subsidiary is a party, may be consummated without prior approval of the Board.
Further, the provision of any credit, property, or
service by the Registrant or any subsidiary thereof
shall not be subject to any condition which, if
955
imposed by a bank, would constitute an unlawful
tie-in arrangement under section 106 of the Bank
Holding Company Act Amendments of 1970.
The determination herein does not preclude a
later review by the Board of Registrant's nonbank
activities and a future determination by the Board
in favor of termination of grandfather benefits of
Registrant. The determination herein is subject to
the Board's authority to require modification or
termination of the activities of Registrant or any of
its nonbanking 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 evasions thereof.
By determination of the Board of Governors,
effective September 9, 1977.
Voting for this action: Vice Chairman Gardner and
Governors Wallich, Coldwell, and Jackson. Absent and
not voting: Chairman Burns and Governors Partee and
Lilly.
[SEAL]
(Signed) G R I F F I T H L . G A R W O O D ,
Deputy Secretary of the Board.
General Educational Fund, Inc.
Burlington, Vermont
Section 4 of the Bank Holding Company Act (12
U.S.C. 1843) provides certain privileges ("grandfather privileges") with respect to nonbanking activities of a company that, by virtue of the 1970
Amendments to the Bank Holding Company Act,
became subject to the Bank Holding Company Act.
Pursuant to § 4(a)(2) of the Act, a "company
covered in 1970" may continue to engage, either
directly or through a subsidiary, in nonbanking
activities that such company was lawfully engaged
in on June 30, 1968 (or on a date subsequent to June
30, 1968, in the case of activities carried on as a
result of the acquisition by such company or subsidiary, pursuant to a binding written contract entered into on or before June 30, 1968, of another
company engaged in such activities at the time of
the acquisition), and has been continuously engaged in since June 30, 1968 (or such subsequent
date).
Section 4(a)(2) of the Act provides, inter alia,
that the Board of Governors of the Federal Reserve
System may terminate such grandfather privileges
if, having due regard to the purposes of the Act, the
Board determines that such action is necessary to
A956
Federal Reserve Bulletin • October 1976
prevent undue concentration of resources, decreased or unfair competition, conflicts of interests,
or unsound banking practices. The Board is required to make such a determination with respect to
a company that controls a bank with assets in
excess of $60 million on or after December 31, 1970.
Notice of the Board's proposed review of the
grandfather privileges of General Educational
Fund, Inc., Burlington, Vermont, affording an opportunity for interested persons to submit comments and views or request a hearing, has been
given (40 Fed. Reg. 57398). The time for filing
comments, views, and requests has expired, and all
those received have been considered by the Board
in light of the factors set forth in § 4(a)(2) of the Act.
On the evidence before it, the Board makes the
following findings. General Educational Fund, Inc.,
BurHngton, Vermont (''Registrant"), became a
bank holding company on December 31, 1970, as a
result of the 1970 Amendments to the Act, by virtue
of Registrant's ownership of more than 25 per cent
of the outstanding voting shares of The Merchants
Bank (formerly The Merchants National Bank of
Burlington), Burlington, Vermont ("Bank") (assets
of $64 million as of December 31, 1972). As of
December 31, 1976, Bank was the fifth largest
commercial bank in Vermont, controlling deposits
of $86.7 million representing 5.8 per cent of total
commercial bank deposits in the State. It is the
smallest of three banks in the Chittenden County
banking market, and controls 18.5 per cent of
deposits in commercial banks in that market.
Bank's managerial and financial resources and its
future prospects are regarded as generally satisfactory, and the Board has found no evidence of any
unsound banking practices.
Registrant is a charitable trust incorporated in
1918 under the laws of the State of Vermont " . . .
for the purpose of aiding young men and women to
obtain a common school or University Education,
or both, or to learn a trade . . . provided that only
those persons be aided, who, in the best judgment
of the trustees of said corporation or their successors are worthy to receive such aid and are in need
of same." Since Registrant has conducted these
charitable activities continuously since prior to
June 30, 1968, it would appear to be eligible for
grandfather privileges for its charitable activities.
During the 1920's Registrant received as a donation over 50 per cent of the common stock of Bank
and all of the common stock of The Farmers Trust
Company, Burhngton, Vermont ("Trust Company"). Since Trust Company does not accept
deposits that the depositor has a legal right to
withdraw on demand and does not engage in the
business of making commercial loans, it is not a
"bank" as defined in the Act. Accordingly, Registrant's ownership of the shares of Trust Company
must be treated as an interest in a nonbanking
organization. Since Registrant has controlled directiy or indirecdy 100 per cent of the shares of
Trust Company continuously since prior to June 30,
1968, it would appear to be eligible for grandfather
privileges for the activities of Trust Company.
Trust Company is a State-chartered trust company with total assets of $17.4 million as of December 31, 1973. Registrant's activities, investments
and supervision are managed in a fiduciary capacity
of Trust Company. Trust Company also functions
as the trust department of the Bank and over the
years, several proposals have been made to merge
the two. In view of the longstanding relationship
between Bank and Trust Company, as well as the
fact that Bank engages in its trust activities through
Trust Company, continuation of the existing relationship would not present any serious anticompetitive effects.
Registrant indirectly through Bank has two
wholly-owned subsidiaries. Merchants Properties,
Inc., and Batreal, Inc., each of which owns the land
and buildings occupied by Bank. Additionally, Registrant indirectly through Bank owns 50 per cent of
the shares of Vermont Realty, Inc., which owns a
parking lot used for and by Bank. The activities of
these companies appear to be exempt from the
prohibitions of section 4 of the Act by virtue of
section 4(c)(1)(A) of the Act, and Registrant need
not rely on section 4(a)(2) of the Act to continue to
engage in these activities.
On the basis of the foregoing and all the facts
before the Board, it appears that the volume, scope,
and nature of the grandfathered activities of Registrant and its subsidiary do not demonstrate an
undue concentration of resources, decreased or
unfair competition, conflicts of interest or unsound
banking pracfices.
There appears to be no reason to require Registrant to cease engaging in the activities it engages in
directly nor to require Registrant to terminate its
interest in its grandfathered subsidiary. It is the
Board's judgment that, at this time, termination of
the grandfather privileges of Registrant is not
necessary in order to prevent an undue concentration of resources, decreased or unfair competition,
conflicts of interest, or unsound banking practices.
However, this determination is not authority to
enter into any activity that was not engaged in on
June 30, 1968 and continuously thereafter, or any
Law Department
activity that is not the subject of this determination.
A significant alteration in the nature or extent of
Registrant's grandfathered activities or a change in
location thereof (significantly different from that
described in this determination) will be cause for a
re-evaluation by the Board of Registrant's activities
under the provisions of § 4(a)(2) of the Act, that is,
whenever the alteration or change is such that the
Board finds that a termination of the grandfather
privileges is necessary to prevent an undue concentration of resources or any of the other harmful
effects designated in the Act. No merger, consolidation, acquisition of assets other than in the ordinary course of business, or acquisition of any
interest in a going concern, to which the Registrant
or its nonbank subsidiary is a party, may be consummated without prior approval of the Board.
Further, the provision of any credit, property, or
service by the Registrant or any subsidiary thereof
shall not be subject to any condition which, if
imposed by a bank, would constitute an unlawful
tie-in arrangement under section 106 of the Bank
Holding Company Act Amendments of 1970.
The determination herein does not preclude a
later review by the Board of Registrant's nonbank
activities and a future determination by the Board
in favor of termination of grandfather benefits of
Registrant. The determination herein is subject to
the Board's authority to require modification or
termination of the activities of Registrant or any of
its nonbanking 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 evasions thereof.
By determination of the Board of Governors,
effective September 13, 1977.
Voting for this action: Vice Chairman Gardner, Governors Wallich, Coldwell, and Jackson. Absent and not
voting: Chairman Burns and Governors Partee and L i l l y .
[SEAL]
(Signed) G R I F F I T H L . G A R W O O D ,
Deputy Secretary of the Board.
957
Valley Financial Services, Inc.
Elkhart, Indiana
Determination
Regarding ''Grandfather Privileges''
Under Bank Holding Company Act
Section 4 of the Bank Holding Company Act (12
U.S.C. 1843) provides certain privileges ("grandfather privileges") with respect to nonbanking activities of a company that, by virtue of the 1970
Amendments to the Bank Holding Company Act,
became subject to the Bank Holding Company Act.
Pursuant to § 4(a)(2) of the Act, a "company
covered in 1970" may continue to engage, either
directly or through a subsidiary, in nonbanking
activities that such company was lawfully engaged
in on June 30, 1968 (or on a date subsequent to June
30, 1968, in the case of activities carried on as a
result of the acquisition by such company or subsidiary, pursuant to a binding written contract entered into on or before June 30, 1968, of another
company engaged in such activities at the time of
the acquisition), and has been continuously engaged in since June 30, 1968 (or such subsequent
date).
Section 4(a)(2) of the Act provides, inter alia,
that the Board of Governors of the Federal Reserve
System may terminate such grandfather privileges
if, having due regard to the purposes of the Act, the
Board determines that such action is necessary to
prevent undue concentration of resources, decreased or unfair competition, conflicts of interests,
or unsound banking practices. The Board is required to make such a determination with respect to
a company that controls a bank with assets in
excess of $60 million on or after December 31, 1970.
Notice of the Board's proposed review of the
grandfather privileges of Valley Financial Services,
Inc., Elkhart, Indiana, affording an opportunity for
interested persons to submit comments and views
or request a hearing, has been given (40 Fed. Reg.
57398). The time for filing comments, views, and
requests has expired, and all those received have
been considered by the Board in light of the factors
set forth in § 4(a)(2) of the Act.
On the evidence before it, the Board makes the
following findings. Valley Financial Services, Inc.,
Elkhart, Indiana ("Registrant"), became a bank
holding company on December 31, 1970, as a result
of the 1970 Amendments to the Act, by virtue of
Registrant's ownership of approximately 81 per
cent of the voting shares of Valley Bank and Trust
Company, Mishawaka, Indiana ("Bank") (assets of
$67.5 million as of December 31, 1974). Bank,
A958
Federal Reserve Bulletin • October 1976
control of which was acquired by Registrant in
January, 1966, had total deposits of approximately
$77.4 million as of December 31, 1976, representing
6.5 per cent of the total deposits in the South Bend
banking market,^ and is the seventh largest of
fifteen banking organizations in that banking market. Bank's managerial and financial resources and
future prospects are regarded as generally satisfactory, and the Board has found no evidence of any
unsound banking practices.
Registrant is a finance company and engages
direcdy in sales finance and secured and unsecured
direct instalment lending, and apparently has engaged in such activities continuously since before
June 30, 1968. In addition. Registrant has three
wholly-owned subsidiary finance companies which
also engage in sales finance and direct instalment
lending: Owners Discount Corporation of Nappanee, Nappanee, Indiana (organized in March
1959); Owners Discount Corporation of Goshen,
Goshen, Indiana (organized in July 1959); and
O.D.C. Corporation of Elkhart, Elkhart, Indiana
(organized in November 1967). Goods financed
directly by Registrant and its subsidiaries are
primarily autos and other consumer-type purchases. Registrant and its subsidiary finance companies also provide funds to auto dealers. As of December 31, 1975, Registrant and the finance company
subsidiaries had total loan receivables of $5.8 million.
Numerous other finance companies and lenders
providing similar services compete with Registrant
and its subsidiaries in their respective markets.
Since Registrant has been engaged, directly and
indirectly through its subsidiaries, in sales finance
activities continuously since June 30, 1968, these
activities appear to be eligible for grandfather
privileges.
Registrant, through its wholly-owned subsidiary,
Michiana Life Insurance Company, Elkhart, Indiana, engages in underwriting as reinsurer credit
life insurance related to extensions of credit by
Registrant and its credit granting subsidiaries. Insurance premium income in 1975 was $153,000.
Michiana Life Insurance Company was organized
by Registrant in 1956, and has been continuously
engaged in its insurance acfivities since that time.
Accordingly, such activities appear to be eligible
for grandfather privileges.
In January 1969 Registrant acquired, as a result
of a binding written contract entered into before
June 30, 1968, Cast Products Corporadon, a distributor of plumbing supplies for the mobile home
^The South Bend banking market consists of the South Bend
SMSA.
industry. Cast Products Corporation, with sales of
$2.4 million in 1975, accounts for approximately 0.2
per cent of the total industry volume of $1.5 billion.
Since Registrant has engaged in the activity of
distributing plumbing supplies for mobile homes
continuously since January 1%9 as a result of an
acquisition made by it pursuant to a binding written
contract entered into prior to June 30, 1968, of a
company engaging in that activity on the date of
acquisition, such activity appears to be eligible for
grandfather privileges.
On the basis of the foregoing and all the facts
before the Board, it appears that the volume, scope,
and nature of the grandfathered activities of Registrant and its subsidiaries do not demonstrate an
undue concentration of resources, decreased or
unfair competition, conflicts of interest or unsound
banking practices.
There appears to be no reason to require Registrant to cease engaging in the activities it engages in
directly nor to require Registrant to terminate its
interest in its grandfathered subsidiaries. It is the
Board's judgment that, at this time, termination of
the grandfather privileges of Registrant is not
necessary in order to prevent an undue concentration of resources, decreased or unfair competition,
conflicts of interest, or unsound banking practices.
However, this determinafion is not authority to
enter into any activity that was not engaged in on
June 30, 1968 and continuously thereafter, or any
activity that is not the subject of this determination.
A significant alteration in the nature or extent of
Registrant's grandfathered activities or a change in
location thereof (significandy different from that
described in this determination) will be cause for a
re-evaluation by the Board of Registrant's activities
under the provisions of § 4(a)(2) of the Act, that is,
whenever the alteration or change is such that the
Board finds that a termination of the grandfather
privileges is necessary to prevent an undue concentration of resources of any of the other adverse
effects designated in the Act. No merger, consolidation, acquisition of assets other than in the ordinary course of business, or acquisition of any
interest in a going concern, to which the Registrant
or its nonbank subsidiaries is a party, may be
consummated without prior approval of the Board.
Further, the provision of any credit, property, or
service by the Registrant or any subsidiary thereof
shall not be subject to any condition which, if
imposed by a bank, would constitute an unlawful
tie-in arrangement under section 106 of the Bank
Holding Company Act Amendments of 1970.
The determinafion herein does not preclude a
Law Department
later review by the Board of Registrant's nonbank
activities and a future determination by the Board
in favor of termination of grandfather benefits of
Registrant. The determination herein is subject to
the Board's authority to require modification or
termination of the activities of Registrant or any of
its nonbanking 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 evasions thereof.
959
By determination of the Board of Governors,
effective September 9, 1977.
[SEAL]
(Signed) GRIFFITH L . GARWOOD,
Deputy Secretary of the Board.
Voting for this action: Vice Chairman Gardner and
Governors Wallich, Coldwell and Jackson. Absent and
not voting: Chairman Burns and Governors Partee and
Lilly.
ORDERS APPROVED U N D E R B A N K H O L D I N G COMPANY
ACT
B Y T H E B O A R D OF GOVERNORS
During September, 1977, the Board of Governors approved the appUcations 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
Barnett Banks of Florida,
Inc., Jacksonville, Florida
The Hinsdale Capital Corporation, Chicago, Illinois
Holt County Investment, St.
Joseph, Missouri
Landmark Bancshares Corporation, St. Louis, Missouri
Bank(s)
Amelia Island Bank, Fernandina Beach, Florida
The First National Bank of
Hinsdale, Hinsdale, Illinois
Zook and Roecker State Bank,
Oregon, Missouri
Fidelity Bank and Trust Co.,
Creve Coeur, Missouri
Board action
(effective
date)
Federal
Register
citation
9/28/77
42 F.R. 53997
10/4/77
42 F.R. 52486
moni
42 F.R. 54000
10/4/77
42 F.R. 54466
10/6/77
9/23/77
mini
9/29/77
A960
Federal Reserve Bulletin • October 1976
Section 4
Nonbanking company
{or activity)
Applicant
CleveTrust Corporation, Cleveland, Ohio
First Security National Corporation, Beaumont, Texas
Lake Life Insurance Company,
Wilmington, Delaware
F.S.N. Life Insurance Company,
Beaumont, Texas
Board action
(effective
date)
Federal
Register
citation
9/26/77
42 F.R. 53998
10/4/77
42 F.R. 95373
9/9/77
9/1/77
Sections 3 and 4
Applicant
Bank(s)
Platte Valley
Saratoga BankBancorporashares, Inc.,
tion, Saratoga, Saratoga,
Wyoming
Wyoming
PENDING
Nonbanking
company
(or activity)
CASES
Credit-related
insurance
agency
activities
I N V O L V I N G
T H E
B O A R D
Plaza Bank of West Port v. Board of Governors,
filed September 1977, U.S.C.A. for the Eighth
Circuit.
First State Bank of Abilene, Texas v. Board of
Governors, filed August 1977, U.S.C.A. for the
District of Columbia.
BankAmerica Corporation v. Board of Governors, filed May 1977, U.S.D.C. for the Northern
District of California.
BankAmerica Corporation v. Board of Governors, filed May 1977, U.S.CA. for the Ninth Circuit.
First Security Corporation v. Board of Governors, filed March 1977, U.S.C.A. for the Tenth
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.
Reserve
Bank
Effective
date
Kansas City
9/20/77
OF
Federal
Register
citation
42 F.R. 49843
9/28/77
GOVERNORS^
Farmers State Bank of Crosby v. Board of Governors, fiXtd January 1977, U.S.C.A. for the Eighth
Circuit.
National Automobile Dealers Association, Inc.
V. Board of Governors, filed November 1976,
U.S.C.A. for the District of Columbia.
First Security Corporation v. Board of Governors, filed August 1976, U.S.C.A. for the Tenth
Circuit.
Central Wisconsin Bankshares, Inc. v. Board of
Governors, filed June 1976, U.S.C.A. for the
Seventh Circuit.
National Urban League, et al. v. Office of the
Comptroller of the Currency, et al., filed April
1976, U.S.D.C. for the District of Columbia Circuit.
Farmers & Merchants Bank of Las Cruces, New
Mexico V. Board of Governors, filed April 1976,
U.S.C.A. for the District of Columbia Circuit.
Law Department
Grandview Bank & Trust Company v. Board of
Governors, filed March 1976, U.S.C.A. for the
Eighth Circuit.
Association of Bank Travel Bureaus, Inc. v.
Board of Governors Jilcd February 1976, U.S.C.A.
for the Seventh Circuit.
Memphis Trust Company v. Board of Governors,
filed February 1976, U.S.D.C. for the Western
District of Tennessee.
First Lincolnwood Corporation v. Board of Governors, filed February 1976, U.S.C.A. for the
Seventh Circuit.
Roberts Farms, Inc. v. Comptroller of the Currency, et al., filed November 1975, U.S.D.C. for
the Southern District of California.
Florida Association of Insurance Agents, Inc. v.
Board of Governors, and National Association of
Insurance Agents, Inc. v. Board of Governors, filed
August 1975, actions consolidated in U.S.C.A. for
the Fifth Circuit.
961
-ftDavid R. Merrill, et al. v. Federal Open Market Committee of the Federal Reserve System, filed
May 1975, U.S.D.C for the District of Columbia,
appeal pending, U.S.D.A. for the District of Columbia.
Louis J. Roussel v. Board of Governors, filed
April 1975, U.S.D.C. for the Eastern District of
Louisiana.
Georgia Association of Insurance Agents, et al.
V. Board of Governors, filed October 1974,
U.S.C.A. for the Fifth Circuit.
Alabama Association of Insurance Agents, et al.
V. Board of Governors, filed July 1974, U.S.C.A.
for the Fifth Circuit.
Bankers Trust New York Corporation v. Board of
Governors, filed May 1973, U.S.C.A. for the Second Circuit.
tDecisions have been handed down in these cases, subject to
appeals noted.
$The Board of Governors is not named as a party in this action.
962
Announcements
REGULATIONS H AND Y:
AMENDMENTS
The Board of Governors of the Federal Reserve
System has adopted, without substantial change,
proposed revisions of two of its regulations relative
to the operations of certain clearing agencies for
stock market transactions.
The changes, which became effective October 3,
1977, were made in conformity with requirements
of the Securities Acts Amendments of 1975. They
were proposed by the Board in June 1976.
The Board's actions affect State member banks,
or their subsidiaries, that are registered clearing
agencies, and State member banks, bank holding
companies, and nonbank subsidi-aries of bank holding companies that are participants in bank clearing
agencies.
The Board amended Regulation H (Membership
of State Banking Institutions in the Federal Reserve
System) to require that State member banks or their
subsidiaries that are registered clearing agencies
must file notice with the Board of all final disciplinary sanctions imposed by them on any firm participating in the operations of the clearing agency.
State member banks acting as clearing agencies are
also required to file notice with the Board of any
denials of applications to participate in their clearing operations.
The Board amended Regulation Y (Bank Holding
Companies) and Regulation H to establish procedures for requesting stays and review by the Board
of disciplinary sanctions and denials of participation imposed by bank clearing agencies when the
Board is the appropriate regulatory agency.
properties at a disadvantage to meet a legal deadline
set by the Bank Holding Company Amendments of
1970.
The 1970 amendments provided, among other
things, that companies that became bank holding
companies by virtue of these amendments (that is,
one-bank holding companies) and that had nonbank
activities acquired between June 30, 1968, and
December 30, 1970, had until December 31, 1980, to
(1) divest such nonbank activities or (2) obtain Board
approval for keeping them. Alternatively, such a
company could cease to be a bank holding company by divesting its bank holdings by the end of
1980.
Since the December 31, 1980, deadhne cannot be
extended, the Board designated June 30, 1978, as a
voluntary target date for bank holding companies
affected by the deadline to submit applications or
divestiture plans for Federal Reserve approval. The
Board added that it intends to establish a later,
mandatory date for submitting such plans or applications to assure that the actions required by December 31, 1980, can be carried out in timely and
orderly fashion.
The divestiture deadline does not apply to nonbanking activities permanently grandfathered under
the 1970 amendments. These are subsidiaries that
were held by the bank holding company on June 30,
1968, and have been held continuously since.
The Board's present action follows up a general
policy statement on divestitures issued February 15
of this year. This urged early action on the divestitures required by December 31, 1980, but set no
dates.
PROPOSED AMENDMENTS
REGULATION Y: ACTION
The Board of Governors on October 13, 1977, acted
to encourage bank holding companies that are required to carry out divestitures by the end of 1980 to
submit plans for doing so not later than June 30,
1978.
The action is designed to avoid situations in
which bank holding companies may have to sell off
The Board of Governors announced on September
29, 1977, a proposal to modify existing provisions of
Regulation Z (Truth in Lending) relating to billing
for cash-advance check transactions. Comments
must be received by November 1, 1977.
The Board on October 3, 1977, proposed for
public comment two alternative amendments to
Regulation B (Equal Credit Opportunity) affecting
Announcements
the definition of adverse action that requires notification to the customer that an application for credit
had been refused. The Board requested comment
by November 15, 1977.
REVISION OF BANK DEBITS
AND DEPOSIT TURNOVER SERIES
Data for bank debits and demand deposit turnover,
published in the Board's G.6 statistical release,
have been revised. The new series, which begins
with July 1977 and is based on reports from a
national sample of about 300 member banks, replaces the series for 233 standard metropolitan
statistical areas (SMSA's), which was terminated
with the June 1977 data. The new series provides
monthly estimates of debits, deposits, and deposit
turnover at all commercial banks for demand deposits, total savings deposits, business savings deposits, and savings deposits of all other customers.
For purposes of the new series, demand deposits
include deposits of individuals, partnerships, and
corporations and of States and political subdivisions in the United States. All debits and turnover
estimates are expressed as annual rates.
963
Back data for the period January 1970 through
June 1977 have been estimated for the demand
deposit series based on data from the former 233
SMSA series and from member bank deposit reports. Seasonal factors based on these back data
will be applied to current estimates for the demand
deposit series. The back data are available on
request from Publications Services. Division of
Administrative Services, Board of Governors of the
Federal Reserve System, Washington, D.C., 20551.
Figures for debits, deposits, and turnover of savings deposits will be available only on an unadjusted basis until sufficient data are available for
computation of seasonal adjustments.
SYSTEM MEMBERSHIP:
Admission of State Banks
The following banks were admitted to membership
in the Federal Reserve System during the period
September 16, 1977, through October 15, 1977:
Utah
Salina
Virginia
Ruckersville
Utah Independent Bank
Bank of Greene
964
Industrial Production
Released for publication October 14
Industrial production in September increased by an
estimated 0.4 per cent to 138.8 per cent of the 1967
average, offsetting the revised 0.4 per cent decline
during August. About one-third of the September
rise is attributable to the resumption of production
after the end of strikes. Increases were widespread
during the month—as declines had been in August.
Industrial production in the third quarter of 1977
was 1.2 per cent above that in the second
quarter—about half the increase from the first to
the second quarter. Compared with a year earlier,
industrial production in September was up 6.3 per
cent.
Output of consumer goods in September increased 0.3 per cent, following a decline in August.
Auto assemblies were about unchanged at a relatively high annual rate of 9.5 million units, seasonally adjusted. Production of business equipment
increased 0.3 per cent in September to a level 10.4
per cent above a year earlier; output of construction
products rose 0.5 per cent from August.
Production of durable goods materials increased
0.5 per cent last month, with a post-strike increase
in copper production more than offsetting a decline
in steel output. Output of nondurable goods mate-
rials advanced modestly; the production of energy
materials surged 1.1 per cent, largely reflecting a
post-strike increase in coal mining and an increase
in Alaskan crude oil production.
Seasonally adjusted, ratio scale, 1 9 6 7 = 1 0 0
_
TOTAL INDEX
MATERIALS CAPACITY
160
140
120
BUSINESS EQUIPMENT
MATERIALS:
Nondurable
Energy
^
\
^^
/ Durable
CONSUMER GOODS:
^ / - ' V ^ ^^ Durable^
i
F.R. indexes, seasonally adjusted. Latest figures: September.
* Auto sales and stocks include imports.
Seasonally adjusted, 1967 = 100
Per cent changes from—
1977
Industrial production
June
July
Aug^
Sept.^
Month ago
Total
137.8
138.8
138.2
138.8
.4
6.3
1.2
Products, total
Final products
Consumer goods
Durable goods
Nondurable goods
Business equipment
Intermediate products
Construction supplies
Materials
137.3
135.4
143.8
155.8
139.1
150.1
144.7
139.9
138.7
138.6
136.5
145.0
157.7
140.1
151.1
146.2
141.1
139.0
138.1
136.1
144.2
154.7
139.9
150.9
145.9
140.9
138.5
138.5
136.4
144.6
155.1
140.2
151.3
146.3
141.6
139.3
.3
.2
.3
.3
.2
.3
.3
.5
.6
7.0
7.5
6.6
11.8
4.2
10.4
5.5
5.6
5.2
1.4
1.2
.9
1.7
.6
1.6
1.8
1.9
.9
p Preliminary.
' Estimated.
Year ago
Q2 to Q3
A 1
Financial and Business Statistics
CONTENTS
DOMESTIC FINANCIAL STATISTICS
WEEKLY
A3
A4
A5
Assets and Liabilities of—
A20
A l l 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
POLICY
RESERVE
BANKS
A12 Condition and F.R. note statements
A13 Maturity distribution of loan and
security holdings
MONETARY
AND CREDIT
FINANCIAL
A25 Commercial paper and bankers
acceptances outstanding
A26 Prime rate charged by banks on
short-term business loans
A26 Terms of lending at commercial banks
A27 Interest rates in money and capital
markets
A28 Stock market—Selected statistics
A29 Savings institutions- -Selected assets
and liabilities
FEDERAL
BANK
ASSETS A N D
LIABILITIES
A16 Last-Wednesday-of-month series
A17 Call-date series
A18 Detailed balance sheet, Mar. 31, 1977
MARKETS
AGGREGATES
A13 Demand deposit accounts—Debits and
deposit turnover
A14 Money stock measures and components
A15 Aggregate reserves and deposits of
member banks
A15 Loans and investments of all
commercial banks
COMMERCIAL
BANKS
A25 Gross demand deposits of individuals,
partnerships, and corporations
INSTRUMENTS
A8 Federal Reserve Bank interest rates
A9 Member bank reserve requirements
AlO Maximum interest rates payable on
time and savings deposits at Federally
insured institutions
AlO Margin requirements
A l l Federal Reserve open market
transactions
FEDERAL
REPORTING COMMERCIAL
FINANCE
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. TreasuryTypes 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 • October 1976
SECURITIES M A R K E T S
CORPORATE
AND
FINANCE
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
REAL
ESTATE
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
REPORTED
A57
A59
A60
A61
BY B A N K S
Short-term
Long-term
Short-term
Long-term
IN
THE U N I T E D
STATES:
liabilities to foreigners
liabilities to foreigners
claims on foreigners
claims on foreigners
A62 Foreign branches of U.S. banks—
Balance sheet data
SECURITIES H O L D I N G S
AND
TRANSACTIONS
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
REPORTED BY N O N B A N K I N G
CONSUMER
OF
INSTALMENT
CREDIT
FUNDS
THE U N I T E D
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—Indexes and
gross value
A50 Housing and construction
A51 Consumer and wholesale prices
A52 Gross national product and income
A53 Personal income and saving
CONCERNS
IN
STATES:
A66 Short-term liabilities to and claims on
foreigners
A67 Long-term liabilities to and claims on
foreigners
INTEREST A N D E X C H A N G E
RATES
A68 Discount rates of foreign central banks
A68 Foreign short-term interest rates
A68 Foreign exchange rates
A69 GUIDE TO TABULAR PRESENTATION
AND STATISTICAL RELEASES
Domestic Financial Statistics
1.10
MONETARY
AGGREGATES
A N D
INTEREST
A3
RATES
1977
1976
1977
Item
Q3
Q4
Ql
Q2
Apr.
May
June
July
Aug.
Monetary and credit aggregates
(annual rates o f change, seasonally adjusted in per cent) 12
1
2
3
Member bank reserves
Total
Required
Nonborrowed
4
5
6
7
8
9
2.7
2.4
2.6
4.4
4.0
4.8
2.7
3.0
2.6
3.0
3.5
1.9
13.0
13.9
14.1
1.5
0.9
-3.1
4.8
6.9
2.9
16.9
12.5
14.9
9.8
12.5
-15.4
Concepts of money i
M-1
M-2
M-3
4.4
9.1
11.4
6.5
12.5
14.4
4.2
9.9
11.3
8.4
9.2
10.0
19.4
13.5
12.4
0.7
4.7
7.3
4.5
8.1
9.8
18.3
16.6
'•16.0
5.5
6.4
11.4
Time and savings deposits
Commercial banks:
Total
Other than large C D ' s
T h r i f t institutions 2
7.0
12.8
14.8
12.2
17.1
17.3
12.5
14.0
13.4
8.3
9.8
11.1
6.9
9.5
10.5
8.3
7.6
11.2
13.2
10.7
12.0
11.0
15.4
15.3
6.9
7.1
18.7
6.9
10.8
8.8
11.9
14.0
10.3
8.9
9.3
12.3
10 T o t a l loans and investments at commercial banks 3
1976
Q4
1977
Ql
Q2
1977
Q3
May
June
July
Aug.
Sept.
Interest rates (levels, per cent per annum)
11
12
13
14
Short-term rates
Federal funds ^
Treasury bills (3-month market yield) 5
Commercial paper (90- to 119-day)'6
Federal Reserve discount 7
4.88
4.67
4.91
5.39
4.66
3.63
4.74
5.25
5.16
4.84
5.15
5.25
5.82
5.50
5.74
5.42
5.35
4.96
5.26
5.25
5.39
5.02
5.42
5.25
5.42
5.19
5.38
5.25
5.90
5.49
5.75
5.27
6.14
5.81
6.09
5.75
15
16
17
Long-term rates
Bonds:
U.S. Govt. 8
State and local government 9
Aaa utility (new issue) i o
7.54
6.18
8.15
7.62
5.88
8.17
7.68
5.70
8.21
7.60
5.59
8.09
7.74
5.75
8.33
7.64
5.62
8.08
7.60
5.63
8.14
7.64
5.62
'•8.04
7.57
5.51
8.07
8.95
8.82
8.95
8.95
9.00
9.00
9.00
18
Conventional mortgages ^ ^
1 M - 1 equals currency plus private demand deposits adjusted,
M - 2 equals M - 1 plus bank time and savings deposits other than large
negotiable CD's.
M - 3 equals M - 2 plus deposits at mutual savings banks, savings and
loan associations, and credit union shares.
2 Savings and loan associations, mutual savings banks, and credit
unions.
3 Quarterly changes calculated f r o m figures shown in Table 1.23.
4 Seven-day averages o f daily effective rates (average o f the rates o n
a given date weighted by the volume o f transactions at those rates).
5 Quoted o n a bank-discount rate basis.
6 M o s t representative offering rate quoted by five dealers.
7 Rate for the Federal Reserve Bank o f N e w Y o r k .
8 M a r k e t yields adjusted to a 20-year maturity by the U.S. Treasury.
9 Bond Buyer series for 20 issues o f mixed quality.
10 Weighted averages o f new publicly offered bonds rated Aaa, A a ,
and A by M o o d y ' s Investors Service and adjusted to an Aaa basis.
Federal Reserve compilations.
11 Average rates on new commitments f o r conventional first mortgages
on new homes i n primary markets, unweighted and rounded to nearest
5 basis points, f r o m Dept. o f Housing and U r b a n Development.
12 Unless otherwise noted, rates o f change are calculated f r o m average
amounts outstanding i n preceding m o n t h or quarter.
A46
1.11
DomesticNonfinancialStatistics • October 1977
FACTORS AFFECTING
MEMBER
B A N K
RESERVES
M i l l i o n s o f dollars
M o n t h l y averages o f daily
figures
Weekly averages o f daily figures f o r weeks ending—
1977
1977
Factors
July
Aug.
Sept.f
A u g . 17
A u g . 24
A u g . 31
Sept. 7
Sept. 14
Sept. 21 f
Sept. 28P
Reserve Bank credit outstanding...
113,886
110,886
112,251
110,161
111,224
110,752
108,300
109,084
111,992
117,290
U.S. Govt, securities^
Bought outright
H e l d under repurchase agreement
Federal agency securities
Bought outright
H e l d under repurchase agreement
98,359
96,930
95,977
95,835
95,201
95,201
96,162
96,162
94,226
94,226
94,747
94,059
96,723
96,723
102,860
99,354
1,429
7,611
7,423
142
7,412
7,403
7,411
7,411
7,411
7,411
7,354
7,354
688
7,366
7,343
7,329
7,329
3,506
7,554
7,329
SUPPLYING RESERVE
1
8
9
10
11
FUNDS
Acceptances
Loans
Float
Other Federal Reserve assets
12
13
G o l d stock
Special D r a w i n g Rights certificate
account
Treasury currency outstanding
14
ABSORBING RESERVE
17
18
19
Other 2
Other F . R . liabilities and capital
M e m b e r bank reserves w i t h F . R .
Banks
20
21
SUPPLYING
RESERVE
1,191
7,419
7,338
96,626
96,All
154
7,394
7,372
188
9
81
213
336
4,005
3,362
34
1,071
3,543
2,850
109
635
3,713
2,757
8
901
3,745
2,896
6
1,665
3,594
2,386
23
1,393
2,847
2,469
4
636
3,588
2,494
74
337
3,943
2,618
4
738
4,297
2,901
262
719
3,085
2,810
11,609
11,595
11,595
11,595
11,595
11,595
11,595
11,595
11,595
11,595
1,200
11,141
1,200
11,189
1,200
11,228
1,200
11,191
1,200
11,196
1,200
11,200
1,200
11,211
1,200
11,225
1,200
11,229
1,200
11,242
91,All
431
97,780
433
98,180
436
98,080
428
97,719
434
97,484
428
98,220
440
98,704
440
98,154
433
97,714
431
8,843
324
759
6,025
310
607
6,956
368
668
A,961
284
607
6,271
325
599
5,853
367
604
3,687
390
643
3,842
464
661
6,188
283
733
12,089
346
603
22
23
225
FUNDS
Currency i n circulation
Treasury cash holdings
Deposits, other than member bank
reserves w i t h F . R . Banks:
Treasury
Foreign
15
16
97,618
96,All
3,395
26,663
3,341
16,'ill,
3,434
3,271
3,369
3,541
3,172
3,311
3,545
3,622
26,232
26,510
26,498
26,470
25,755
25,683
26,681
26,523
E n d - o f - m o n t h figures
Wednesday figures
1977
1977
July
Aug.
Sept.p
A u g . 17
A u g . 24
A u g . 31
Sept. 7
Sept. 14
Sept. 21 f
Sept. 2 8 f
FUNDS
22
Reserve Bank credit o u t s t a n d i n g . . .
113,916
113,641
119,011
110,776
110,434
113,641
105,902
111,945
113,630
120,319
23
24
25
U.S. Govt, securities^
Bought o u t r i g h t
H e l d under repurchase agreement
Federal agency securities
Bought outright
H e l d under repurchase agreement
98,711
96,381
98,436
97,357
104,715
102,405
95,859
95,859
94,831
94,831
98,436
97,357
91,486
91,486
96,114
95,300
96,878
96,878
104,275
99,595
2,330
7,768
7,423
1,079
7,505
7,354
2,310
7,639
7,329
7,411
7,411
7,411
7,411
1,079
7,505
7,354
7,354
7,354
814
7,370
7,329
7,329
7,329
4,680
7,680
7,329
345
151
310
29
30
31
32
Acceptances
Loans
Float
Other Federal Reserve assets. . .
393
788
2,543
3,713
131
1,265
3,842
2,462
482
1,069
2,233
2,873
7
1,010
4,171
2,318
6
2,323
3,475
2,388
131
1,265
3,842
2,462
4
570
3,945
2,543
150
358
5,270
2,683
4
2,706
4,017
2,696
436
1,292
3,634
3,002
33
34
G o l d stock
Special D r a w i n g Rights certificate
account
Treasury currency o u t s t a n d i n g . . . .
11,595
11,595
11,595
11,595
11,595
11,595
11,595
11,595
11,595
11,595
1,200
11,119
1,200
11,161
1,200
11,246
1,200
11,194
1,200
11,198
1,200
11,161
1,200
11,213
1,200
11,227
1,200
11,231
1,200
11,246
97,048
426
97,943
440
97,866
433
98,178
430
97,776
428
97,943
440
98,921
442
98,754
433
98,091
434
98,101
429
8,789
469
578
6,115
535
679
15,740
382
853
6,516
281
543
6,562
351
532
6,115
535
679
4,841
475
111
3,989
324
616
9,803
249
757
11,197
300
769
26
27
28
35
A B S O R B I N G RESERVE
36
37
38
39
40
41
42
41
351
FUNDS
Currency i n circulation
Treasury cash holdings
Deposits, other than member bank
reserves w i t h F . R . Banks:
Treasury
Foreign
Other 2
Other F . R . liabilities and capital. . .
M e m b e r bank reserves w i t h F . R .
Banks
.
3,606
3,623
3,659
3,290
3,435
3,623
3,108
3,332
3,395
3,696
26,912
28,262
24,119
25,527
25,343
28,262
21,403
28,519
24,927
29,868
1 Includes securities loaned—fully guaranteed by U.S. G o v t , securities
pledged w i t h F . R . Banks—and excludes ( i f any) securities sold and scheduled to be bought back under matched sale-purchase transactions.
2 Includes certain deposits o f foreign-owned banking institutions
151
voluntarily held w i t h member banks and redeposited i n f u l l w i t h Federal
Reserve Banks.
NOTE.—For amounts o f currency and coin held as reserves, see Table
1.12.
Member Banks
1.12
RESERVES A N D B O R R O W I N G S
A5
Member Banks
Millions o f dollars
M o n t h l y averages o f daily figures
Reserve classification
1977
1976
Dec.
Jan.
Feb.
Mar.
Apr.
May
June
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
-35
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
25,646
8,609
34,406
34,293
113
62
12
61
8
79
12
110
13
73
14
200
31
6,520
6,602
-82
15
7,076
6,948
128
6
6,442
6,537
-95
47
6,331
6,259
72
44
6,264
6,351
-87
16
1,632
1,641
—9
4
1,731
1,698
33
2
1,624
1,624
1,610
1,611
1,629
1,634
-5
13,117
13,053
64
14
13,556
13,427
129
25
12,683
12,765
-82
4
12,779
12,705
74
29
13,867
13,668
199
29
13,927
13,723
204
28
13,450
13,308
142
28
13,415
13,295
120
34
July
Aug.
Sept.f
26,663
8,622
35,391
35,043
348
26,373
8,712
35,186
34,987
199
26,232
8,887
35,241
34,964
211
262
55
336
60
1,071
101
635
113
6,310
6,279
31
18
6,241
6,188
53
36
6,359
6,342
17
74
6,272
6,247
25
157
5,920
6,022
-102
75
1,637
1,634
3
4
1,662
1,627
35
15
1,573
1,606
-33
6
1,653
1,622
31
5
1,603
1,634
-31
11
13,090
13,110
-20
23
13,067
12,996
71
62
12,869
12,943
-74
80
13,438
13,286
152
79
13,290
13,270
20
530
13,118
13,352
-234
111
13,630
13,507
123
34
13,718
13,551
167
116
13,634
13,535
99
131
14,021
13,809
212
111
13,971
13,848
123
379
14,069
13,956
113
372
A l l member banks
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
A t F.R. Banks
Currency and coin
Total hem
Excess 1
Borrowings at F.R. Banks:2
Total
Seasonal
Large banks in New York City
Reserves held
Excess
Large banks in Chicago
Reserves held
Required
Borrowinas^
Other large banks
Reserves held
Excess
A l l other banks
20
21
22
23
Excess
3
*
Weekly averages o f daily figures for weeks ending—
1977
A l l member banks
Reserves:
A t F.R. Banks
Currency and coin
Total held^
Required
Excess 1
Borrowings at F.R. Banks:2
Total
29
Seasonal
30
24
25
26
27
28
31
32
33
34
35
36
37
38
Large banks in New York City
Reserves held
Required
Excess
Borrowings 2
Large banks in Chicago
Reserves held
Excess
Borrowings 2
July 27
Aug. 3
Aug. 10
Aug. 17
Aug. 24
Aug. 31
Sept. 7
Sept. 14
Sept.P 21 Sept.f 28
26,265
8,829
35,195
35,121
74
26,887
8,932
35,919
35,495
424
25,796
8,993
34,890
34,787
103
26,510
8,789
35,401
35,199
202
26,498
8,201
34,800
34,772
28
26,470
8,773
35,345,
34,974
371
25,755
8,941
34,797
34,566
231
25,683
9,281
35,060
34,739
321
26,681
8,189
34,959
34,928
31
26,523
9,109
35,820
35,381
439
295
68
598
69
585
72
901
99
1,665
116
1,393
130
636
114
337
108
738
110
719
116
6,296
6,205
91
6,408
6,439
-31
119
6,386
6,270
116
6,306
6,428
-122
225
6,178
6,110
68
443
6,128
6,100
28
26
5,995
6,037
-42
49
6,202
6,046
156
5,676
5,905
-229
218
5,939
6,028
-89
1,571
1,582
-11
1,631
1,618
13
21
1,611
1,623
-12
1,659
1,645
14
1,572
1,586
-14
1,681
1,634
47
1,612
1,611
1
1,695
1,667
28
1,618
1,660
-42
29
1,468
1,597
-129
15
39
40
41
42
Other large banks
Reserves held
Required
Excess
Borrowings 2
13,170
13,302
-132
81
13,719
13,488
231
165
13,037
13,151
-114
410
13,441
13,326
115
350
13,052
13,167
-115
798
13,480
13,341
139
729
13,199
13,121
78
137
13,243
n,Tii
-34
54
13,018
13,392
-374
171
13,165
13,527
-362
294
43
44
45
46
A l l other banks
Reserves held
Required
Excess
Borrowings 2
14,158
14,032
126
214
14,161
13,950
211
293
13,856
13,743
113
175
13,995
13,800
195
326
13,998
13,909
89
424
14,056
13,899
157
638
13,991
13,797
194
450
13,920
13,749
171
283
14,045
13,971
74
320
14,290
14,229
61
410
1 Adjusted to include waivers o f penalties for reserve deficiencies i n
accordance with Board policy, effective Nov. 19, 1975, o f permitting
transitional relief on a graduated basis over a 24-month period when a
nonmember bank merges into an existing member bank, or when a
nonmember bank joins the Federal Reserve System. For weeks for which
figures are preliminary, figures by class o f bank do not add to total
because adjusted data by class are not available.
2 Based on closing figures.
A46
1.13
DomesticNonfinancialStatistics • October 1977
F E D E R A L F U N D S T R A N S A C T I O N S of Money Market Banks
Millions o f dollars, except as noted
1977, week ending Wednesday—
Type
Aug. 3
Aug. 10
Aug. 17
Aug. 24
Aug. 31
Sept. 7
j Sept. 14
Sept. 21
Sept. 28
Total, 46 banks
1
Basic reserve position
Excess reserves i
121
24
-38
156
13
210
156
248
416
925
225
58
5
264
76
16,468
18,096
17,454
16,166
15,102
18,968
21,174
19,406
14,978
-16,467
-18,223
-17,847
-17,129
-15,171
-19,014
-20,968
-19,687
-15,002
107.7
122.3
117.4
116.5
102.2
129.7
141.1
133.3
100.6
24,439
7,971
5,187
24,885
6,788
4,738
24,449
6,994
5,536
22,528
6,361
4,857
22,411
7,309
4,788
26,178
7,210
4,901
28,075
6,902
4,984
26,430
7,024
4,866
23,969
8,991
5,156
19,252
2,784
20,147
2,050
18,912
1,458
17,671
1,505
17,624
2,522
21,277
2,309
23,091
1,917
21,564
2,159
18,813
3,835
2,533
2,019
514
4,177
2,122
2,056
4,465
2,231
2,234
3,777
1,921
1,856
3,497
1,629
1,868
4,230
1,950
2,281
4,138
1,865
2,273
3,374
1,636
1,739
2,594
2,969
-375
100
-24
36
157
-17
52
LESS:
2
3
4
5
Borrowings at F . R . Banks
Net interbank Federal funds
transactions
EQUALS: Net surplus, or
deficit ( - ) :
Amount
Per cent of average required
reserves
9
10
Interbank Federal funds transactions
Gross transactions:
Purchases
Sales
Two-way transactions 2
Net transactions:
Purchases o f net buying b a n k s . .
Sales o f net selling banks
11
12
13
Related transactions with U.S.
Govt, securities dealers
Loans to dealers 3
Borrowing f r o m dealers 4
Net loans
6
7
8
8 banks in New Y o r k City
14
Basic reserve position
Excess reserves 1
LESS:
15
16
Borrowings at F R B a n k s . . .
Net interbank Federal funds
transactions
24
122
107
-57
25
62
-69
225
430
26
29
199
6,591
6,579
5,252
4,564
4,927
7,187
8,090
7,218
6,832
-6,675
-6,458
-5,534
-4,969
-4,892
-7,285
-7,990
-7,441
-6,797
114.4
113.5
95.1
90.0
88.8
133.0
145.7
139.0
124.4
7,525
934
934
7,446
866
866
6,498
1,246
1,246
5,582
1,018
1,018
5,835
908
908
8,065
878
878
8,744
654
654
7,808
590
590
7,902
1,070
1,070
6,591
6,580
5,252
4,564
A,921
7,187
8,090
7,218
6,832
1,282
916
366
2,464
950
1,515
2,408
1,093
1,315
1,990
975
1,015
1,690
791
899
2,218
859
1,359
2,439
899
1,540
2,107
1,083
1,024
1,425
1,086
338
EQUALS : N e t s u r p l u s , o r
17
18
19
20
21
22
23
24
25
26
deficit ( - ) :
Amount
Per cent of average required
reserves
Interbank Federal funds transactions
Gross transactions:
Purchases
Sales
Two-way transactions 2
Net transactions:
Purchases o f net buying b a n k s . . .
Related transactions with U.S.
Govt, securities dealers
Loans to dealers 3
Borrowing f r o m dealers'^
Net loans
38 banks outside New Y o r k City
27
Basic reserve position
Excess reserves 1
LESS:
28
29
30
31
32
33
34
35
36
Borrowings at F.R. Banks
Net interbank Federal funds
transactions
EQUALS: Net surplus, or
deficit ( - ) :
Amount
Per, cent of average required
reserves
Interbank Federal funds transactions
Gross transactions:
Purchases
Sales
Two-way transactions 2
Net transactions:
Purchases o f net buying b a n k s . . .
Sales o f net selling banks
Related transactions with U.S.
Govt, securities dealers
Loans to dealers 3
Borrowing f r o m dealers 4
39
Net loans
37
38
For notes see end o f table.
133
81
-63
95
82
110
4
65
49
248
191
495
199
29
5
66
76
9,877
11,517
12,202
11,603
10,175
11,781
13,084
12,188
8,146
-9,792
-11,765
-12,313
-12,161
-10,279
-11,729
-12,979
-12,249
-8,157
103.6
127.8
131.2
132.5
110.1
127.8
138.4
130.1
86.3
16,913
7,037
4,253
17,439
5,922
3,872
17,951
5,749
4,291
16,946
5,343
3,839
16,576
6,401
3,880
18,113
6,332
4,032
19,331
6,248
4,330
18,622
6,434
4,276
16,067
7,921
4,086
12,661
2,784
13,567
2,050
13,660
1,458
13,107
1,505
12,696
2,522
14,090
2,309
15,001
1,917
14,346
2,159
11,981
3,835
1,251
1,103
147
1,713
1,172
541
2,057
1,138
919
1,787
947
841
1,806
837
969
2,013
1,091
922
1,699
966
734
1,267
553
714
1,169
1,883
-714
Federal Funds
A7
1.13 Continued
1977, week ending Wednesday—
Type
Aug. 3
Aug. 10
A u g . 17
Aug. 24
A u b . 31
Sept. 7
Sept. 14
Sept. 21
Sept. 28
4
-3
5 banks i n City o f Chicago
40
Basic reserve position
Excess reserves i
16
-13
19
6
48
17
39
LESS:
41
42
43
44
Borrowings at F.R. Banks. . .
N e t interbank Federal funds
transactions
EQUALS: N e t surplus, or
deficit ( - ) :
Amount
Per cent of average required
reserves
Interbank Federal funds transactions
Gross transactions:
Purchases
Sales
Two-way transactions 2
N e t transactions:
Purchases o f net buying b a n k s . .
Sales o f net selling banks
50
51
52
Related transactions with U.S.
Govt, securities dealers
Loans to dealers 3
Borrowing f r o m dealers4. . .
N e t loans
18
21
5,578
5,833
6,403
5,854
5,614
6,636
7,035
6,761
4,684
-5,584
-5,846
-6,384
-5,848
-5,566
-6,619
-6,997
-6,775
-4,687
369.9
385.8
415.2
395.3
364.7
440.6
448.6
436.2
314.7
6,786
1,208
1,208
6,923
1,090
1,090
7,599
1,196
1,196
6,873
1,019
1,019
6,763
1,149
1,149
7,584
948
947
7,875
840
838
7,720
959
955
5,934
1,250
1,208
5,578
5,833
6,403
5,854
5,613
6,636
7,037
2
6,765
4
4,727
43
188
363
-175
265
322
-57
343
172
172
292
145
147
281
125
156
421
144
277
330
312
18
239
108
131
190
846
-657
33 other banks
53
Basic reserve position
Excess reserves i
LESS:
54
55
56
57
Borrowings at F.R. Banks. . .
N e t interbank Federal funds
transactions
EQUALS : N e t surplus, or
deficit ( - ) :
Amount
Per cent of average required
reserves
61
62
Interbank Federal funds transactions
Gross transactions:
Purchases
Sales
Two-way transactions 2
N e t transactions:
Purchases o f net buying b a n k s . .
Sales o f net selling banks
63
64
65
Related transactions with U.S.
Govt, securities dealers
Loans to dealers 3
Borrowing f r o m dealers'*. . .
Net loans...
58
59
60
117
13
62
-69
47
65
71
3
19
27
248
191
495
199
29
5
48
76
4,299
5,684
5,799
5,749
4,561
5,145
6,048
5,427
3,462
-4,208
-5,919
-5,928
-6,313
-4,713
-5,110
-5,982
-5,472
-3,519
53.0
76.9
75.5
82.0
60.3
76.5
69.6
44.2
10,127
5,829
3,045
10,517
4,832
2,782
10,352
4,553
3,095
10,073
4,325
2,820
9,813
5,252
2,730
10,530
5,385
3,076
11,456
5,408
3,492
10,902
5,475
3,321
10,133
6,671
2,879
7,083
2,784
7,134
2,050
7,257
1,458
7,253
1,505
7,083
2,522
7,454
2,309
7,964
1,915
7,581
2,155
7,254
3,792
1,063
740
322
1,448
850
598
1,714
967
747
1,496
802
694
1,525
713
813
1,592
947
645
1,369
654
715
1,028
445
583
980
1,037
-57
1 Based on reserve balances, including adjustments to include waivers
o f penalties for reserve deficiencies i n accordance w i t h changes i n Board
policy effective N o v . 19, 1975.
2 Derived f r o m 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 f r o m dealers subject to resale),
or other lending arrangements.
66.6
4 Federal funds borrowed, net funds acquired f r o m each dealer by
clearing banks, reverse repurchase agreements (sales o f securities t o
dealers subject to repurchase), resale agreements, and borrowings secured
by U.S. Govt, or other securities.
NOTE.—Weekly averages o f daily figures. For description o f series,
see Federal Reserve BULLETIN for August 1964, pp. 944-53. Back data f o r
46 banks appear i n the Board's Annual Statistical
Digest,
1971-1975,
Table 3.
A8
1.14
Domestic Financial Statistics • October 1977
F E D E R A L RESERVE B A N K INTEREST RATES
Per cent per annum
Current and previous levels
Loans to member banks—
Loans to all others
under Sec. 13, last par.4
Under Sec. 10(b)2
Federal Reserve
Bank
Under Sees. 13 and 13a i
Regular rate
Rate on
9/30/77
Boston
New Y o r k
Philadelphia...
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis...
Kansas C i t y . . .
Dallas
San Francisco.
54
5y4
ilt
5y4
Eflfective
date
9/2/77
8/31/77
8/30/77
8/30/77
8/30/77
8/30/77
8/30/77
8/30/77
8/30/77
9/2/77
9/2/77
9/2/77
Previous
rate
Rate on
9/30/77
61/4
6V4
6V4
5V4
Hi
51/4
514
61/4
6V4
61/4
61/4
61/4
614
61/4
Effective
date
Special rate 3
Previous
rate
Rate on
9/30/77
Effective
date
634
63/
9/2/77
8/31/77
8/30/77
8/30/77
8/30/77
8/30/77
8/30/77
8/30/77
8/30/77
9/2/77
9/2/77
9/2/77
9/2/77
8/31/77
8/30/77
8/30/77
8/30/77
8/30/77
8/30/77
8/30/77
8/30/77
9/2/77
9/2/77
9/2/77
i!
634
634
634
634
634
634
634
Previous
rate
Rate on
9/30/77
614
Effective
date
9/2/77
8/31/77
8/30/77
8/30/77
8/30/77
8/30/77
8/30/77
8/30/77
8/30/77
9/2/77
9/2/77
9/2/77
614
614
614
614
614
614
614
Previous
rate
814
814
814
814
814
814
Range o f rates in recent years 5
Effective date
I n effect Dec. 31, 1970
1971—Jan.
8
15
19
22
29
Feb. 13
19
July 16
23
N o v . 11
19
Dec. 13
17
24
Range
(or level)—
A l l F.R.
Banks
F.R.
Bank
of
N.Y.
51/i
514
514
514
5
5
5
434
5
5
5
41^
41/1
Effective date
1973—Jan. 15.
Feb. 26.
M a r . 2.
A p r . 23.
M a y 4.
11.
18.
June 11.
15.
July
2.
Aug. 14,
23,
1974—Apr. 25,
30,
Dec. 9,
16,
Range
(or level)—
A l l F.R.
Banks
F.R.
Bank
of
N.Y.
5
5-5 i / i
51/i
5i/i-534
534
534-6
6
6-61/i
61/i
7
1-m
m
5
5 Vi
51/i
51/i
5^
6
6
61/i
61/2
7
m
m
7i/i-8
8
8
8
7^
734
734-8
734
Effective date
1975—Jan.
6
10
24
Feb. 5
7
M a r . 10
14
M a y 16
23
1976—Jan.
19
23
1977_Aug. 30
Sept.
714-734
714-734
714
6I4-634
614
6-614
6
5i/i-6
51/i
514-534
514-534
2
I n effect Sept. 30, 1977
F.R.
Bank
of
N.Y.
N o v . 22
26
31
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 i n Section 201.2(e)(2) of
Regulation A .
Range
(or level)—
A l l F.R.
Banks
5V4
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 Sees. 13 and 13a (as described above). For description
and earlier data, see the following publications o f the Board o f Governors:
Banking and Monetary Statistics, 1914-1941, Banking and Monetary
Statistics, 1941-1970, and Annual Statistical Digest, 1971-75.
Policy Instruments
1.15
A9
M E M B E R B A N K RESERVE R E Q U I R E M E N T S ^
Per cent o f deposits
Requirements i n effect
Sept. 30, 1977
Previous requirements
Type o f deposit, and deposit interval
i n m i l l i o n s o f dollars
Per cent
Effective date
Per cent
Effective date
7
9y2
12/30/76
12/30/76
12/30/76
12/30/76
12/30/76
m
10
12
13
I6I/2
2/13/75
2/13/75
2/13/75
2/13/75
2/13/75
Net demand:2
0-2
2-10
10-100
100-400
Over 400
Time: 2,3
Savings
Other t i m e :
0-5, maturing in—
30-179 days
180 days t o 4 years.
4 years o r m o r e . . . .
Over 5, m a t u r i n g i n —
30-179 days
180 days t o 4 years.
4 years or m o r e . . . .
113/4
16%
3
3/16/67
6
4 214
4 1
3/2/67
3/16/67
1/8/76
10/30/75
31/2
3
3
12/12/74
1/8/76
10/30/75
5
3
3
3/2/67
3/16/67
3/16/67
10/1/70
12/12/74
12/12/74
Legal l i m i t s , Sept. 30, 1977
N e t demand:
Reserve city banks
Other banks
Time
1 F o r changes i n reserve requirements beginning 1963, see Board's
Annual Statistical Digest, 1971-1975 and f o r p r i o r changes, see Board's
Annual Report f o r 1976, Table 13.
2 (a) Requirement schedules are graduated, and each deposit interval
applies to that part o f the deposits o f each bank. D e m a n d deposits
subject to reserve requirements are gross demand deposits minus cash
items i n process o f collection and demand balances due f r o m domestic
banks.
(b) The Federal Reserve A c t specifies different ranges o f requirements
f o r reserve city banks and f o r other banks. Reserve cities are designated
under a criterion adopted effective N o v . 9, 1972, by which a bank having
net demand deposits o f more t h a n $400 m i l l i o n 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 that place as a reserve
city. Cities i n which there are F . R . Banks or branches are also reserve
cities. A n y banks having net demand deposits o f $400 m i l l i o n or less
are considered to have the character o f business o f banks outside o f
reserve cities and are permitted t o m a i n t a i n reserves at ratios set f o r banks
n o t i n reserve cities. F o r details, see the Board's Regulation D .
(c) Member banks are required under the Board's Regulation M t o
maintain reserves against foreign branch deposits computed o n the basis
o f net balances due f r o m domestic offices t o 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 f r o m computations, as are t o t a l
loans o f a bank to U.S. residents i f n o t exceeding $1 m i l l i o n . Regulation D
imposes a similar reserve requirement o n borrowings f r o m foreign banks
by domestic offices o f a member bank. A reserve o f 4 per cent is required
f o r each o f these classifications.
3 Negotiable orders o f w i t h d r a w a l ( N O W ) accounts and time deposits
such as Christmas and vacation club accounts are subject t o 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 m i n i m u m specified by law.
NOTE.—Required reserves must be held i n the f o r m o f deposits w i t h
F . R . Banks or vault cash.
A46
1.16
DomesticNonfinancialStatistics • October 1977
M A X I M U M INTEREST RATES P A Y A B L E on Time and Savings Deposits at Federally Insured Institutions
Per cent per annum
Commercial banks
I n effect Sept. 30,1977
Type and maturity o f deposit
Per cent
1 Savings
2
Negotiable order o f withdrawal ( N O W )
accounts i
. . . .
. .
T i m e (multiple- and single-maturity
unless otherwise indicated): 2
30-89 days:
3
Multiple-maturity
4
Single-maturity
5
6
90 days to 1 year:
Multiple-maturity
Single-maturity
7
8
9
1 to 2 years 3
2 to 2Vi years3.
to 4 years 3
10
11
12
13
I
/
7/1/73
5
1/1/74
5
7/1/73
)
Per cent
!
I
4Vi
5
5
/
f
1
} ^
7/1/73
7/1/73
51/2
53/4
5^4
4 to 6 years'*
6 years or more^
m
m
11/1/73
12/23/74
(9)
71/4
Governmental units (all maturities)
Individual retirement accounts and
K e o g h ( H . R . 10) plans 5
m
12/23/74
m
iiein
Per cent
(6)
1/1/74
(8)
7/20/66
9/26/66
)
353/4
1/21/70
1/21/70
1/21/70
)
11/1/73
11/27/74
Per cent
5
5V4
}
Previous m a x i m u m
Effective
date
5
1/21/70
9/26/66
(8)
Effective
date
(7)
(8)
(6)
{
(6)
61/2
(6)
51/4
1/21/70
6
1/21/70
1/21/70
1/21/70
71/2
m
11/1/73
12/23/74
71/2
m
12/23/74
m
m
7/6/77
(9)
11/1/73
11/27/74
9 Between July 1, 1973, and Oct. 31, 1973, there was no ceiling for
certificates maturing i n 4 years or more w i t h m i n i m u m denominations
o f $1,000; however, the amount o f such certificates that an institution
could issue was limited to 5 per cent o f its total time and savings deposits.
Sales in excess o f that amount, as well as certificates o f less than $1,000,
were limited to the 6Vi per cent ceiling on time deposits maturing i n 2Vi
years or more.
Effective N o v . 1, 1973, the present ceilings were imposed o n certificates
maturing i n 4 years or more w i t h m i n i m u m denominations o f $1,000.
There is no l i m i t a t i o n on the amount o f these certificates that banks can
issue.
1 F o r authorized States only. Federally insured commercial banks,
savings and loan associations, cooperative banks, and mutual savings
banks were first permitted to offer N O W accounts on Jan. 1, 1974.
A u t h o r i z a t i o n to issue N O W accounts was extended to similar institutions throughout N e w England on Feb. 27, 1976.
2 F o r exceptions w i t h respect to certain foreign time deposits see the
Federal Reserve BULLETIN f o r October 1962 (p. 1279), August 1965 (p.
1094), and February 1968 (p. 167).
3 A m i n i m u m o f $1,000 is required f o r savings and loan associations,
except i n areas where m u t u a l savings banks permit lower m i n i m u m denominations. This restriction was removed for deposits maturing i n less
than 1 year, effective N o v . 1, 1973.
4 $1,000 m i n i m u m except for deposits representing funds contributed
to an I n d i v i d u a l Retirement A c c o u n t ( I R A ) or a K e o g h ( H . R . 10) Plan established pursuant to the Internal Revenue Code. The $1,000 m i n i m u m
requirement was removed for such accounts i n December 1975 and N o vember 1976, respectively.
5 3-year m i n i m u m maturity.
6 July 1, 1973, f o r m u t u a l savings banks; July 6, 1973, for savings and
loan associations.
7 Oct. 1, 1966, f o r m u t u a l savings banks; Jan. 21, 1970, f o r savings and
loan associations.
8 N o separate account category.
1.161
Effective
date
1/21/70
7/1/73
m
I n effect Sept. 30, 1977
Previous m a x i m u m
Effective
date
5
Savings and loan associations and
m u t u a l savings banks
NOTE—Maximum rates that can be paid by Federally insured commercial banks, m u t u a l 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 Directors o f the Federal Deposit Insurance Corporation,
and the Federal H o m e L o a n Bank Board under the provisions o f 12
C F R 217, 329, and 526, respectively. The m a x i m u m rates o n time deposits i n denominations o f $100,000 or more were suspended i n m i d 1973. For i n f o r m a t i o n regarding previous interest rate ceilings on all
types o f accounts, see earlier issues o f the Federal Reserve BULLETIN,
the Federal H o m e L o a n Bank Board Journal, and the Annual Report
o f the Federal Deposit Insurance Corporation.
M A R G I N REQUIREMENTS
Per cent o f market value; effective dates shown.
Type o f security o n sale
1 M a r g i n stocks
2 Convertible bonds
3 Short sales
M a r . 11, 1968
June 8, 1968
M a y 6, 1970
Dec. 6, 1971
N o v . 24, 1972
Jan. 3, 1974
70
50
70
80
60
80
65
50
65
55
50
55
65
50
65
50
50
50
NOTE.—Regulations G , T , and U o f the Federal Reserve Board o f
Governors, prescribed i n accordance w i t h the Securities Exchange A c t o f
1934, l i m i t the amount o f credit to purchase and carry margin stocks
that may be extended o n securities as collateral by prescribing a maximum
loan value, which is a specified percentage o f the market value o f the
collateral at the time the credit is extended. M a r g i n requirements are the
difference between the market value (100 per cent) and the m a x i m u m
loan value. The t e r m " m a r g i n stocks" is defined i n the corresponding
regulation.
Regulation G and special margin requirements f o r bonds convertible
into stocks were adopted by the Board o f Governors effective M a r . 11,
1968.
Policy Instruments
1.17
F E D E R A L RESERVE OPEN M A R K E T
A11
TRANSACTIONS
M i l l i o n s o f dollars
1977
Type o f transaction
1974
1976
1975
Feb.
Mar.
Apr.
May
June
July
Aug.
U.S. G O V T . S E C U R I T I E S
Outright transactions (excl. matched salepurchase transactions)
1
2
3
Treasury bills:
Gross purchases.
Gross sales.
Redemptions. . . ,
11,660
5,830
4,550
11,562
5,599
26,431
14,343
8,462
25,017
110
801
368
,671
260
19
681
489
400
2,696
1,154
600
-1,209
478
-865
-478
118
753
500
812
176
238
2,321
-238
-1,664
Others w i t h i n 1 year: ^
Gross purchases
Gross sales
Exchange, or maturity shift.
Redemptions
450
3,886
472
107
41
20
-1,183
131
-4
3,549
792
"63'
-266
374
8
9
10
1 to 5 years:
Gross purchases
Gross sales
Exchange, or maturity shift.
797
2 3,284
174
327
3,854
2 3,202
177
-2,588
348
-697
-880"
266
-374
11
12
13
5 to 10 years:
Gross purchases
Gross sales
Exchange, or maturity shift.
434
1,510
1,048
151
46
104
1,675
-4,697
1,572
"517
14
15
16
Over 10 years:
Gross purchases
Gross sales
Exchange, or maturity shift.
196
1,070
642
81
205
848
225
300
17
18
19
A l l maturities: i
Gross purchases.
Gross sales
Redemptions
13,537
5,830
4,682
221,313 219,707
5,599
8,639
2 9,980 25,017
797
801
298
368
2,160
260
19
681
489
400
3,167
1,154
600
118
753
500
812
176
64,229
62,801
151,205
152,132
196,078
196,579
22,674
23,447
30,115
30,828
32,287
32,852
28,532
27,306
36,258
36,449
27,947
27,301
45,831
46,170
71,333
70,947
140,311 232,891
139,538 230,355
13,853
12,921
14,368
14,860
13,397
11,862
29,308
30,448
14,748
11,506
13,973
15,719
4,397
5,648
1,702
151
3,980
-2,573
4,845
-3,528
-276
20
21
Matched sale-purchase transactions
Gross sales
Gross purchases
22
23
Repurchase agreements
Gross p u r c h a s e s . . . .
Gross sales
24
Net change i n U.S. Govt, securities
FEDERAL AGENCY
7,434
9,087
3,087
200
68
-782
1,174
37
114
38
125
900
OBLIGATIONS
Outright transactions:
Gross purchases
Gross sales
Redemptions
Repurchase agreements:
28
Gross purchases
29
Gross sales
25
26
27
BANKERS
1,984
89
1,616
891
'"322"
246
169
24
36
23,204
22,735
15,179
15,566
10,520
10,360
689
612
523
546
709
639
2,164
2,278
1,656
1,056
1,672
1,938
265
459
511
420
163
-35
-545
410
-18
-19
149
^23
-51
653
-45
-729
-15
528
-24
-204
-15
-247
6,149
8,539
9,833
1,886
50
4,998
-3,461
6,305
-4,020
-801
380
346
33
-69
ACCEPTANCES
30 Outright transactions, n e t . . .
31 Repurchase agreements, net.
32 Net change in total System Account.
1 B o t h gross purchases and redemptions include special certificates
created when the Treasury borrows directly f r o m the Federal Reserve,
as follows (millions o f dollars): 1974,131; 1975, 3,549: and 1976 to present,
none.
2 I n 1975, the System obtained $421 m i l l i o n o f 2-year Treasury notes
in exchange f o r maturing bills. I n 1976 there was a similar transaction
amounting to $189 million. Acquisition o f these notes is treated as a
purchase; the run-off o f bills, as a redemption.
NOTE.—Sales, redemptions, and negative figures reduce holdings o f
the System Open M a r k e t A c c o u n t ; all other figures increase such holdings.
Details may not add to totals because o f rounding.
A46
1.18
DomesticNonfinancialStatistics • October 1977
F E D E R A L RESERVE B A N K S
Condition and F.R. Note Statements
M i l l i o n s o f dollars
Account
A u g . 31
Wednesday
End of M o n t h
1977
1977
Sept. 14
Sept. 7
Sept. 21P
Sept. 282'
July
Aug.
Sept.P
Consolidated condition statement
ASSETS
J
2
G o l d certificate account
Special D r a w i n g Rights certificate account
3
Coini
4
5
Loans:
Member bank borrowings
Other
Acceptances:
6
7
8
9
10
11
12
13
14
15
16
H e l d under reourchase a&reements
Federal agency obligations:
HF»LH IINHFR RFRMIRRVIJI^P AOTPFMENT^
.
. . . .
U.S. Govt, securities
Bought o u t r i g h t :
Bills
Certificates Soecial
Other
Notes
Total2
NNFLF^R R^RMIRRLIA^FT J^TRR^F^MFTNT^
17
18
Total loans and securities
19
20
Cash items i n process o f collection
11,595
1,200
11,595
1,200
11,595
1,200
11,595
1,200
11,595
1,200
11,595
1,200
11,595
1,200
11,595
1,200
284
274
281
291
294
317
284
308
1,265
570
358
2,706
1,292
788
1,265
1,069
4
127
4
4
146
4
4
432
19
374
4
127
4
478
7,354
151
7,354
7,329
41
7,329
7,329
351
7,423
345
7,354
151
7,329
310
40,021
34,150
37,964
39,041
41,758
39,045
40,021
41,548
2,500
48,963
8,373
97,357
1,079
48,963
8,373
91,486
48,963
8,373
95,300
814
49,423
8,414
96,878
49,423
8,414
99,595
4,680
49,088
8,248
96,381
2,330
48,963
8,373
97,357
1,079
49,856
8,501
102,405
2,310
98,436
91,486
96,114
96,878
104,275
98,711
98,436
104,715
107,337
99,414
103,992
106,917
113,683
107,660
107,337
113,905
9,715
377
10,966
376
11,741
376
10,668
378
9,578
378
7,590
372
9,715
377
7,773
379
55
2,030
55
2,112
55
2,252
64
2,254
64
2,560
20
3,321
55
2,030
65
2,429
132,593
125,992
131,492
133,367
139,352
132,075
132,593
137,654
Other assets:
21
22
A l l other
23
T o t a l assets
LIABILITIES
F . R . notes
Deposits:
Member bank reserves
U.S. Treasury—General account
Foreign
Other 3
87,506
88,423
88,241
87,585
87,578
86,674
87,506
87,361
28,262
6,115
535
679
21,403
4,841
475
721
28,519
3,989
324
616
24,927
9,803
249
757
29,868
11,197
300
769
26,912
8,789
469
578
28,262
6,115
535
679
24,119
15,740
382
853
29
Total deposits
35,591
27,440
33,448
35,736
42,134
36,748
35,591
41,094
30
31
Deferred availability cash items.
5,873
1,089
7,021
974
6,471
1,085
6,651
1,031
5,944
1,202
5,047
1,083
5,873
1,089
5,540
1,165
32
Total liabilities
130,059
123,858
129,245
131,003
136,858
129,552
130,059
135,160
1,011
983
540
1,013
983
138
1,013
983
251
1,012
983
369
1,013
983
498
1,006
983
534
1,011
983
540
1,016
983
495
132,593
125,992
131,492
133,367
139,352
132,075
132,593
137,654
60,717
62,176
62,287
62,911
62,807
60,359
60,717
63,781
24
25
26
27
28
CAPITAL
ACCOUNTS
Capital paid i n
33
34
35
Other capital accounts
36
Total liabilities and capital accounts
37
MEMO: Marketable U.S. G o v t , securities held in
custody for foreign and intl. account
Federal Reserve note statement
F . R . notes outstanding (issued to Bank)
Collateral held against notes outstanding:
G o l d certificate account
Special D r a w i n g Rights certificate account
Acceptances
U.S. G o v t , securities
93,289
93,571
93,753
93,828
93,780
92,648
93,289
93,762
39
40
41
42
11,591
752
11,591
855
11,590
855
11,591
855
11,591
855
11,591
752
11,591
752
11,591
855
82,135
82,185
82,536
82,785
82,885
81,585
82,135
82,885
43
T o t a l collateral
94,478
94,631
94,981
95,231
95,331
93,928
94,478
95,331
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. G o v t , securities
pledged w i t h F.R. Banks—and excludes ( i f 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 w i t h member banks and
redeposited i n f u l l w i t h F . R . Banks.
NOTE.—Beginning Jan. 1, 1977, "Operating equipment" was transferred
to " O t h e r assets."
Reserve Banks
1.19
F E D E R A L RESERVE B A N K S
A13
Maturity Distribution of Loan and Security Holdings
M i l l i o n s o f dollars
Wednesday
End of month
1977
1977
Type and m a t u r i t y
A u g . 31
Sept. 7
Sept. 14
Sept. 21
Sept. 28
July 31
1 Loans
2
W i t h i n 15 days
3
16 days to 90 days.
4
91 days to 1 y e a r . . ,
1,267
571
359
2,696
1,292
1,224
43
501
70
294
65
2,669
27
1,265
27
5 Acceptances
6
W i t h i n 15 days
7
16 days to 90 days.
8
91 days to 1 y e a r . .
131
150
127
4
146
4
A u g . 31
Sept. 30
1,267
1,069
1,224
43
1,032
37
788
768
20
436
432
393
384
8
1
131
127
4
482
478
4
9 U.S. Govt, securities
10
W i t h i n 15 days 1
11
16 days t o 90 days
12
91 days t o 1 year
13
Over 1 year t o 5 years. . .
14
Over 5 years to 10 years.
15
Over 10 years
98,436
91,486
96,114
96,878
98,436
104,715
3,807
12,416
30,471
27,750
10,451
6,591
4,552
17,211
29,559
27,750
10,451
6,591
3,069
18,046
30,527
28,097
10,507
6,632
104,275
8,597
19,027
31,415
28,097
10,507
6,632
98,711
3,989
18,881
30,774
27,750
10,451
6,591
4,849
17,589
28.922
29,652
11,233
6,466
3,989
18,881
30,774
27,750
10,451
6,591
6,709
20,858
31,772
28,110
10,547
6,719
16 Federal agency obligations..
17
W i t h i n 15 days 1
18
16 days to 90 days
19
91 days t o 1 year
20
Over 1 year t o 5 years. . .
21
Over 5 years to 10 years.
22
Over 10 years
7,505
305
209
915
3,711
1,542
823
7,354
125
272
881
3,711
1,542
823
7,370
41
371
893
3,679
1,563
823
7,329
25
346
893
3,679
1,563
823
7,680
376
346
893
3,679
1,563
823
7,768
375
410
1,000
3,648
1,512
823
7,505
305
209
915
3,711
1,542
823
7,639
335
355
884
3,679
1,563
823
1 H o l d i n g s under repurchase agreements are classified as maturing
w i t h i n 15 days i n accordance w i t h m a x i m u m m a t u r i t y o f the agreements.
1.20
B A N K DEBITS A N D DEPOSIT T U R N O V E R
Debits are shown i n billions o f dollars. M o n t h l y data are at annual rates
1977
Bank group, or type
o f customer
1974
1975
1976
Apr.
May
June
July
Aug.
34,098.5
13,501.0
20,597.5
35,644.8
14,351.0
21,293.8
359.1
43.6
315.6
366.2
55.0
311.2
127.5
479.7
86.1
133.8
519.3
89.2
1.7
4.3
1.5
1.7
5.2
1.5
Debits to demand deposits 2 (seasonally adjusted)
1 A l l commercial banks
2 Major New Y o r k City banks. .
3 Other banks
22,937.8
8,434.8
14,503.0
25,028.5
9,670.7
15,357.8
29,180.4
11,467.2
17,713.2
33,343.9
13,276.9
20,067.0
34,687.0
13,979.7
20,707.3
34,805.2
14,049.7
20,755.5
Debits t o savings deposits 3 (not seasonally adjusted)
4 A l l customers
5 Business i
6 Others
D e m a n d deposit turnover 2 (seasonally adjusted)
7 A l l commercial banks
8 Major New Y o r k City b a n k s . .
9 Other banks
99.0
321.6
70.6
105.3
356.9
72.9
116.8
411.6
79.8
128.2
479.3
86.4
133.7
504.7
89.4
133.6
524.2
88.8
Savings deposit turnover 3 (not seasonally adjusted)
10 A l l customers
11 Business ^
12 Others
1 Represents corporations and other profit-seeking organizations (excluding commercial banks but including savings and loan associations,
m u t u a l savings banks, credit unions, the E x p o r t - I m p o r t Bank, and
Federally sponsored lending agencies).
2 Represents accounts o f individuals, partnerships, and corporations,
and o f States and political subdivisions.
3 Excludes N O W accounts and special club accounts, such as Christmas and vacation clubs.
NOTE.—Historical data—estimated f o r the period 1970 t h r o u g h June
1977, partly o n the basis o f the debits series f o r 233 S M S A ' s , w h i c h were
available t h r o u g h June 1977 are available f r o m Publications Services,
D i v i s i o n o f Administrative Services, B o a r d o f Governors o f the Federal
Reserve System, Washington, D . C . 20551. Debits and turnover data f o r
savings deposits are n o t available p r i o r t o July 1977.
A46
1.21
DomesticNonfinancialStatistics • October 1977
M O N E Y STOCK MEASURES A N D C O M P O N E N T S
Billions o f dollars, averages o f daily figures
1977
1973
Dec.
1974
Dec.
1975
Dec.
1976
Dec.
Mar.
Item
Apr.
May
June
July
Aug.
320.7
767.6
1,289.0
829.9
1,351.3
321.9
772.8
1,299.5
836.8
1,363.4
326.8
783.5
'•1,316.8
846.3
'•1,379.6
328.3
787.7
1,329.2
850.9
1,392.4
Seasonally adjusted
MEASURES!
1
2
3
4
5
270.5
571.4
919.6
634.4
982.5
M-1
M-2
M-3
M-4
M-5
283.1
612.4
981.5
701.4
1,070.5
294.8
664.3
1,092.6
746.5
1,174.7
312.4
740.3
1,237.1
803.5
1,300.3
315.4
756.1
1,268.1
818.2
1,330.3
320.5
764.6
1,281.2
826.2
1,342.8
COMPONENTS
6 Currency
Commercial bank deposits:
7
Demand
8
Time and savings
9
Negotiable C D ' s 2
10
Other
61.5
67.8
73.7
80.5
82.2
83.1
83.6
84.0
85.1
85.5
209.0
363.9
63.0
300.9
215.3
418.3
89.0
329.3
221.0
451.7
82.1
369.6
231.9
491.1
63.3
427.9
233.2
502.8
62.2
440.6
237.4
505.7
61.6
444.1
237.1
509.2
62.3
446.9
238.0
514.8
63.9
450.9
241.6
519.5
62.8
456.7
242.8
522.5
63.2
459.4
11 N o n b a n k t h r i f t institutions 3
348.1
369.1
428.3
496.8
512.1
516.6
521.4
526.6
''533.3
541.5
315.5
766.2
1,290.3
827.4
1,351.4
321.4
774.5
1,305.6
837.5
1,368.6
327.2
784.0
1,322.0
846.8
''1,384.7
325.1
784.3
1,326.4
848.8
1,390.8
N o t seasonally adjusted
MEASURES 1
12
13
14
15
16
278.3
576.5
921.8
640.5
^985.8
M-1
M-2
M-3
M-4
M-5
291.3
617.5
983.8
708.0
1,074.3
303.2
669.3
1,094.3
752.8
1,177.7
321.3
745.3
1,237.9
809.5
1,302.1
312.4
756.2
1,269.8
817.0
1,330.7
322.3
770.0
1,290.2
830.1
1,350.3
COMPONENTS
17 Currency
Commercial bank deposits:
18
Demand
19
Member
20
Domestic nonmember
21
Time and savings
22
Negotiable CD's2
23
Other
24 N o n b a n k t h r i f t institutions 3
25 U.S. G o v t , deposits (all commercial
banks)
62.7
69.0
75.1
82.0
81.6
82.8
83.4
84.2
85.7
85.8
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
239.3
168.5
67.3
488.2
64.3
423.9
230.9
162.1
65.2
504.6
60.8
443.8
239.6
167.6
68.3
507.7
60.1
4A1.1
232.1
161.8
66.6
511.8
61.2
450.7
237.1
165.1
68.3
516.1
63.0
453.2
241.4
167.7
69.5
519.6
62.8
456.9
239.3
166.2
69.1
523.7
64.4
459.2
345.3
366.3
424.9
492.6
513.6
520.2
524.1
531.1
538.0
542.1
6.3
4.9
4.1
4.7
4.5
5.6
3.8
5.2
3.9
3.7
1 Composition o f the money stock measures is as f o l l o w s :
M - 1 : Averages o f daily figures f o r (1) demand deposits at commercial
banks other than domestic interbank and U.S. G o v t . , less cash items i n
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
o f commercial banks.
M - 2 : M - 1 plus savings deposits, time deposits open account, and time
certificates o f deposit ( C D ' s ) other t h a n negotiable C D ' s o f $100,000 or
more o f large weekly reporting banks.
M - 3 : M - 2 plus the average o f the beginning- and end-of-month deposits
o f m u t u a l savings banks, savings and l o a n shares, and credit u n i o n shares
(nonbank t h r i f t ) .
M - 4 : M - 2 plus large negotiable C D ' s .
M - 5 : M - 3 plus large negotiable C D ' s .
F o r a description o f the latest revisions i n the money stock measures
see " M o n e y Stock Measures: R e v i s i o n " o n pp. 305 and 306 o f the
M a r c h 1977 BULLETIN.
Latest m o n t h l y and weekly figures are available f r o m the Board's H . 6
releeise. Back data are available f r o m the Banking Section, D i v i s i o n o f
Research and Statistics.
2 Negotiable time C D ' s issued i n denominations o f $100,000 or more
by large weekly reporting commercial banks.
3 Average o f the beginning- and end-of-month figures f o r deposits o f
m u t u a l savings banks, f o r savings capital at savings and loan associations,
and for credit u n i o n shares.
N O T E S T O T A B L E 1.23:
1 Adjusted to exclude domestic commercial interbank loans.
2 Loans sold are those sold o u t r i g h t to banks' o w n foreign branches,
nonconsolidated nonbank affiliates o f the bank, the banks' holding
company ( i f not a bank), and nonconsolidated nonbank subsidiaries o f
the holding company. Prior t o A u g . 28, 1974, the institutions included
had been defined somewhat differently, and the reporting panel o f banks
was also different. O n the new basis, b o t h " T o t a l loans" and " C o m mercial and industrial l o a n s " were reduced by about $100 m i l l i o n .
3 Reclassification o f loans reduced these loans by about $1.2 b i l l i o n
as o f M a r . 31, 1976.
4 D a t a beginning June 30, 1974, include one large m u t u a l savings
bank that merged w i t h a nonmember commercial bank. As o f that date
there were increases o f about $500 m i l l i o n i n loans, $100 miUion in
" O t h e r " securities, and $600 m i l l i o n i n " T o t a l loans and investments."
As o f Oct. 31, 1974, " T o t a l loans and investments" o f all commercial
banks were reduced by $1.5 b i l l i o n i n connection w i t h the l i q u i d a t i o n
o f one large bank. Reductions i n other items were: " T o t a l loans," $1.0
b i l l i o n ( o f which $0.6 b i l l i o n was i n " C o m m e r c i a l and industrial loans"),
and " O t h e r securities," $0.5 billion. I n late November " C o m m e r c i a l and
industrial l o a n s " were increased by $0.1 b i l l i o n as a result o f loan reclassifications at another large bank.
NOTE.—Data are f o r last Wednesday o f m o n t h except f o r June 30
and Dec. 31; data are partly o r w h o l l y estimated except when June 30
and Dec. 31 are call dates.
Monetary Aggregates
1.22
A G G R E G A T E RESERVES A N D DEPOSITS
A15
Member Banks
Billions o f dollars, averages o f daily figures
1977
1976
Item
1973
Dec.
1974
Dec.
1975
Dec.
Dec.
Feb.
Apr.
Mar.
May
June
July
Aug.
Seasonally adjusted
1 Reserves i
2
Nonborrowed
3
Required
4 Deposits subject to reserve requirements 2
5
T i m e and savings
Demand:
6
Private
7
U.S. G o v t
34.94
33.64
34.64
442.3
279.2
36.60
35.87
36.34
486.2
322.1
34.73
34.60
34.47
505.4
337.9
34.95
34.90
34.68
529.6
355.0
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
34.86
34.60
34.71
544.5
367.0
35.35
35.03
35.08
547.7
369.2
35.64
34.58
35.44
551.4
370.8
158.1
5.0
160.6
3.5
164.5
3.0
171.4
3.2
169.5
2.5
171.1
2.8
173.4
3.6
172.3
2.1
173.8
3.7
175.8
2.8
177.0
3.6
N o t seasonally adjusted
8 Deposits subject to reserve requirements 2
9
T i m e and savings
Demand:
10
Private
11
U.S. G o v t
447.5
278.5
491.8
321.7
510.9
337.2
534.8
353.6
528.7
358.4
534.0
361.7
541.3
362.3
535.8
364.7
544.5
367.8
547.6
369.5
548.3
371.7
164.0
5.0
166.6
3.4
170.7
3.1
177.9
3.3
167.2
3.1
169.1
3.2
175.0
4.0
168.5
2.5
173.0
3.7
175.6
2.6
174.1
2.5
1 Series reflects actual reserve requirement percentages w i t h no adjustment to eliminate the effect o f changes i n Regulations D and M . There
are breaks i n series because o f changes i n reserve requirements effective
Dec. 12,1974; Feb. 13, M a y 22, and Oct. 30,1975; Jan. 8, and Dec. 30,1976.
I n addition, effective Jan. 1, 1976, statewide branching i n N e w Y o r k
was instituted. The subsequent merger o f a number o f banks raised
required reserves because o f higher reserve requirements o n aggregate
deposits at these banks.
1.23
LOANS A N D INVESTMENTS
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 i n process o f
collection and demand balances due f r o m domestic commercial banks.
NOTE.—Back data and estimates o f the impact o n required reserves
and changes i n reserve requirements are shown i n Table 14 o f the Board's
Annual Statistical Digest, 1971-1975.
A l l Commercial Banks
Billions o f dollars; last Wednesday o f m o n t h except for June 30 and Dec. 31
1973
Dec. 31
1974 4
Dec. 31
1977
1975
Dec. 31
1976
Dec. 31
Category
A p r . 27
M a y 25
June 30
July 27
V
V
V
V
A u g . 31 Sept. 28
V
p
Seasonally adjusted
1 Loans and investments ^
2
I n c l u d i n g loans sold outright 2
3
4
5
6
Loans:
Total
Including loans sold outright 2
C o m m e r c i a l and industrials
Including loans sold outright2,3
Investments:
7
U.S. Treasury
8
Other
633.4
637.7
690.4
695.2
721.1
725.5
784.4
788.2
812.4
816.4
819.4
823.4
825.5
829.5
831.8
835.9
840.4
844.5
843.1
847.1
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
557.7
561.7
184.9
187.7
562.1
566.1
185.9
188.7
567.0
571.0
188.3
191.1
574.5
578.6
189.6
192.4
582.4
586.5
191.6
194.4
587.6
591.6
191.9
194.7
54.5
129.9
50.4
139.8
79.4
144.8
97.3
148.2
102.8
151.9
104.6
152.7
105.3
153.2
102.9
154.4
102.6
155.4
99.5
156.0
N o t seasonally adjusted
9 Loans and investments ^
I n c l u d i n g loans sold o u t r i g h t
10
647.3
651.6
705.6
710.4
737.0
741.4
801.6
805.4
809.6
813.6
816.6
820.6
830.5
834.5
829.1
833.2
837.6
841.7
843.1
847.2
11
12
13
14
Loans:
Total 1
I n c l u d i n g loans sold outright 2
Commercial and industrial 3
I n c l u d i n g 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
553.5
557.5
185.1
187.9
561.3
565.3
186.1
188.9
574.4
578.4
190.7
193.5
575.4
579.5
189.6
192.4
583.6
587.7
190.6
193.4
589.3
593.4
192.3
195.1
15
16
Investments:
U.S. Treasury
Other
58.3
130.6
54.5
140.5
84.1
145.5
102.5
148.9
103.0
153.1
101.9
153.4
101.7
154.4
99.5
154.2
98.9
155.1
98.0
155.8
F o r notes see b o t t o m o f opposite page.
A46
DomesticNonfinancialStatistics • October 1977
1.24
C O M M E R C I A L B A N K ASSETS A N D L I A B I L I T I E S
Last-Wednesday-of-Month Series
Billions o f dollars except for number o f banks
1975
19763
Dec. 31
Dec.
1977
Account
Jan.
Feb.
Mar.
Apr.P
Mayf
Junep
JulyP
Aug. 2'
Sept.2'
A l l commercial
1
2
3
4
5
6
7
8
9
10
Loans and investments
Loans, gross
Investments:
U.S. Treasury securities. . .
Other
Currency and coin
Reserves w i t h F . R . B a n k s . . .
Balances w i t h banks
Cash items in process o f collection..
Total
assets/total
liabilities
15
16
Demand:
Interbank
U.S. G o v t
Other
Time:
Interbank
Other
17
18
Borrowings
Total capital accounts 2
19
MEMO: N u m b e r o f banks
846.4
824.2
831.6
840.4
846.5
853.1
864.5
866.2
877.8
882.4
546.2
594.9
575.3
580.4
587.0
590.4
597.8
609.5
612.5
623.8
628.6
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
101.3
153.7
99.5
154.2
98.9
155.1
98.0
155.8
133.6
136.1
120.1
127.1
122.8
122.7
119.4
124.5
124.7
134.0
127.5
12.3
26.8
47.3
47.3
12.1
26.1
49.6
48.4
12.8
28.6
39.2
39.6
12.5
28.6
41.5
44.4
12.9
26.9
41.9
41.1
13.3
28.2
40.1
41.0
13.1
24.0
41.3
41.0
13.6
23.5
42.9
44.4
13.3
27.1
40.4
43.9
13.6
28.2
44.0
48.3
13.8
30.0
41.7
42.1
964.9
1,030.7
996.7
1,011.6
1,018.2
1,024.8
1,026.9
1,044.9
1,047.4
1,068.2
1,065.5
786.3
838.2
801.0
809.3
817.1
819.4
818.9
833.7
836.4
850.5
844.8
41.8
3.1
278.7
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
37.7
3.8
272.3
39.0
2.5
282.7
36.6
8.0
269.9
12.0
450.6
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
8.3
514.4
8.0
518.4
8.3
522.0
94.8
and
11
12
13
14
775.8
60.2
80.2
82.5
87.6
84.5
88.2
87.6
90.2
90.6
93.1
69.1
78.1
76.3
76.8
77.1
77.5
78.1
78.7
78.9
79.4
79.7
14,633
14,671
14,667
14,688
14,685
14,690
14,695
14,702
14,709
14,713
14,713
Member
20
21
22
23
24
25
26
27
28
29
Loans, gross
Investments:
U.S. Treasury securities. . .
Other
Cash assets, total
Currency and coin
Reserves w i t h F . R . B a n k s . . ,
Balances w i t h banks
Cash items in process o f collection..
Total assets/total
capital 1
liabilities
30
31
32
33
34
35
Demand:
Interbank
U.S. G o v t
Other
Time:
Interbank
Other
36
37
Borrowings
38
MEMO: N u m b e r o f banks
578.6
620.5
600.9
605.9
611.8
614.8
620.2
629.1
628.9
637.9
640.8
416.4
442.9
426.3
429.9
434.6
435.9
441.5
450.1
451.3
459.9
463.0
61.5
100.7
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
70.8
106.7
70.5
107.5
69.6
108.3
108.5
108.9
97.7
102.8
100.0
99.4
95.7
100.5
101.1
108.5
103.1
9.2
26.8
26.9
45.5
9.1
26.0
27.4
46.5
9.5
28.6
21.5
38.1
9.3
28.6
22.2
42.7
9.6
26.9
24.0
39.5
9.9
28.2
21.9
39.4
9.7
24.0
22.6
39.3
10.0
23.5
24.2
42.7
9.9
27.1
21.9
42.2
10.0
28.2
23.9
46.4
10.2
30.0
22.5
40.4
733.6
772.9
744.6
755.1
759.7
762.7
763.9
778.9
780.1
796.2
793.2
590.8
618.7
587.0
592.0
598.1
597.8
597.4
609.4
610.6
622.1
617.0
38.6
3.2
210.8
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
35.3
2.8
202.1
36.6
1.7
211.0
34.3
6.4
200.3
10.0
329.1
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
6.3
364.1
6.0
366.9
6.3
369.6
and
53.6
71.7
73.6
78.0
75.3
78.1
77.5
80.0
80.4
82.5
84.0
52.1
58.6
57.7
57.9
58.1
58.3
58.8
59.2
59.5
59.9
60.2
5,788
5,759
5,739
5,740
5,739
5,726
5,708
5,721
5,701
5,676
5,676
1 Includes items not shown separately.
Effective M a r . 31, 1976, some o f the i t e m "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 " v a l u a t i o n " portion o f "reserve for
l o a n losses" and the "unearned income o n loans" have been netted
against " o t h e r assets," and against " t o t a l assets" as well.
T o t a l liabilities continue to include the deferred income tax p o r t i o n o f
"reserve for loan losses."
2 Effective M a r . 31, 1976, includes "reserves for securities" and the
contingency p o r t i o n (which is small) o f "reserve for loan losses."
3 Figures partly estimated except on call dates.
NOTE.—Figures include all bank-premises subsidiaries and other significant majority-owned domestic subsidiaries.
Commercial banks: A l l such banks i n 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 national bank i n Puerto Rico and one i n the V i r g i n Islands.
Member banks: The following numbers o f noninsured trust companies
that are members o f the Federal Reserve System are excluded f r o m member banks i n Tables 1.24 and 1.25 and are included w i t h noninsured banks
i n Table 1.25: 1974—June, 2 ; December, 3; 1975—June and December,
4 ; 1976 (beginning m o n t h shown)—July, 5, December, 7 ; 1977-January 8.
Commercial Banks
1.25
C O M M E R C I A L B A N K ASSETS A N D L I A B I L I T I E S
A17
Call-Date Series
Millions o f dollars except for number o f banks
1976
1975
1976
1975
Account
Dec. 31
June 30
June 30
Dec. 31
June 30
Total insured
773,696
827,692
428,167
441,135
443,955
476,602
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
Other
Cash assets
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
Total assets/total liabilities i
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
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
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
14,320
14,372
14,373
14,397
4,730
4,741
4,747
4,735
7
8
14
15
National (all insured)
762,400
4
5
6
12
13
Demand:
U.S. Govt
Other
Time:
Interbank
Borrowings
16
State member (all insured)
17
18
19
20
21
22
23
24
Dec. 31
526,272
(2)
Loans and investments, Gross
Loans:
Gross
Net
Investments:
9
10
11
June 30
736,164
2
3
1
Dec. 31
Insured nonmember
Loans and investments, Gross
Loans:
Gross
Net
Investments:
U.S. Treasury securities
Other
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
Total assets/total liabilities
179,787
180,495
179,645
189,573
198,157
210,874
214,167
231,130
142,061
149,481
172,707
184,210
190,644
206,141
940
1,397
60,706
853
1,689
65,560
894
1,339
63,629
917
1,627
69,648
Deposits
Demand:
U.S. Govt
141,995
143,409
443
18,751
48,621
467
16,265
50,984
869
15,834
49,658
429
19,296
52,194
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
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
1,064
1,046
1,029
1,023
8,526
8,585
8,597
8,639
25
26
27
28
29
Other
Time:
Interbank
Noninsured nonmember
33
11,725
13,674
15,905
18,819
184,963
197,319
208,730
225,908
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
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
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
253
261
270
275
8,779
8,846
8,867
8,914
Loans:
34
35
Net
Investments:
36
37
38
Other
Cash assets
39
Total assets/total liabilities
40
41
42
43
44
45
Demand:
U.S. Govt
Other
Time:
Other
46
47
48
MEMO: Number o f banks
Total nonmember
A18
Domestic Financial Statistics • October 1977
1.26
C O M M E R C I A L B A N K ASSETS A N D L I A B I L I T I E S
Detailed Balance Sheet, March 31, 1977
Asset and liability items are shown in millions of dollars.
Member banks i
Asset account
Insured
commercial
banks
Nonmember
banks1
Large banks
Total
New Y o r k
City
1 Cash bank balances, items in process
2
Currency and coin
3
Reserves with F.R. Banks
4
Demand balances with banks in United States.
5
Other balances with banks in United States...
6
Balances with banks in foreign countries
7
Cash items in process of collection
8 Total securities held—Book value
9
U.S. Treasury
10
Other U.S. Govt, agencies
11
States and political subdivisions
12
A l l other securities
13
Unclassified total
City of
Chicago
A l l other
Other
large
125,193
106,148
31,527
3,960
38,001
32,660
12,118
28,031
29,261
5,184
4,171
46,428
8,974
28,031
17,608
3,033
3,688
44,814
923
6,025
6,655
27
578
17,320
162
1,724
114
21
59
1,880
2,880
10,410
3,217
1,085
2,030
18,380
5,009
9,872
7,622
1,900
1,022
7,234
249,841
176,540
20,197
8,116
56,924
103,675
34,315
105,615
6,143
92
91,304
75,386
21,052
75,865
4,181
57
3,771
471
3,598
276
73,304
11,526
1,172
7,210
290
25,543
5,317
24,841
1,201
22
34,546
14,092
40,216
2,415
35
28,292
13,264
29,751
1,962
35
19,049
3,144
1
11,656
2,152
482
1,614
14
15
16
17
18
19
Trading-account securities
U.S. Treasury
Other U.S. Govt, agencies
States and political subdivisions
A l l other trading acct. securities
Unclassified
5,339
3,168
566
1,104
409
92
5,233
3,155
561
1,073
388
57
2,075
1,470
211
369
25
687
434
33
95
125
2,251
1,172
292
536
230
22
220
80
25
73
7
35
106
13
5
31
21
35
20
21
22
23
24
Bank investment portfolios
U.S. Treasury
Other U.S. Govt, agencies
States and political subdivisions
A l l other portfolio securities
244,502
100,507
33,750
104,512
5,733
171,307
72,231
20,491
74,792
3,793
18,122
10,057
961
6,841
264
7,429
3,337
438
3,503
151
54,672
24,371
5,025
24,305
971
91,084
34,466
14,067
40,143
2,407
73,198
28,279
13,259
29,720
1,941
25 F.R. stock and corporate stock
26 Federal funds sold and securities resale agreement.
27
Commercial banks
28
Brokers and dealers
29
Others
30 Other loans, gross
31
LESS: Unearned income on loans
32
Reserves for loan loss
33
Other loans, net
1,544
1,302
291
83
483
445
243
44,703
35,244
2,497
2,152
18,742
11,853
37,369
4,362
2,972
9,514
28,124
4,208
2,912
705
399
1,393
1,441
672
39
14,689
2,699
1,354
11,289
438
126
9,300
154
60
536,794
405,594
70,710
21,530
8,660
149,631
391,896
546
1,191
68,974
80
316
21,135
2,860
1,826
144,945
163,122
5,175
1,706
156,842
131,200
12,704
6,306
517,784
4,045
1,267
125,888
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 farmland
Secured by residential
1- to 4-family residences
FHA-insured or VA-guaranteed
Conventional
Multifamily residences
FHA-insured
Conventional
Secured by other properties
153,309
17,215
6,979
86,655
82,250
7,887
74,364
4,405
370
4,035
42,459
106,810
13,442
2,981
61,444
58,255
6,843
51,412
3,189
305
2,884
28,943
9,315
2,590
17
4,460
4,028
598
3,430
432
116
315
2,248
1,966
414
10
963
859
47
812
104
25
78
579
38,372
6,309
293
22,314
21,161
3,666
17,495
1,153
85
1,068
9,456
57,156
4,128
2,661
33,707
32,206
2,532
29,674
1,501
78
1,423
16,660
46,499
3,773
3,998
25,211
23,995
1,043
22,952
1,216
66
1,150
13,517
45
46
47
48
49
50
51
52
53
54
Loans to financial institutions
To REIT's and mortgage companies
To domestic commercial banks
To banks in foreign countries
To other depositary institutions
To other financial institutions
Loans to security brokers and dealers
Other loans to purch./carry securities
Loans to farmers—except real estate
Commercial and industrial loans
33,501
9,793
2,524
5,925
1,085
14,175
9,632
4,060
23,667
178,765
31,511
9,453
1,879
5,777
977
13,424
9,409
3,375
13,080
146,103
11,103
3,250
531
2,636
115
4,571
5,566
386
120
36,184
4,254
1,230
118
276
24
2,606
1,424
310
154
10,658
13,380
4,330
946
2,383
684
5,038
2,186
1,734
3,033
56,061
2,774
644
284
483
154
1,208
232
945
9,773
43,201
1,990
339
645
147
107
751
223
685
10,586
32,662
55
56
57
58
59
60
61
62
63
64
65
66
67
Loans to individuals
Instalment loans
Passenger automobiles
Residential-repair/modernize
Credit cards and related plans
Charge-account credit cards
Check and revolving credit plans
Other retail consumer goods
Mobile homes
Other
Other instalment loans
Single-payment loans to individuals
A l l other loans
119,885
95,312
41,171
6,528
14,094
10,978
3,116
15,970
8,697
7,273
17,549
24,573
13,975
83,380
66,110
26,478
4,518
12,380
9,803
2,578
10,952
6,163
4,789
11,781
17,270
11,926
5,839
4,339
792
308
1,668
1,146
522
331
177
154
1,239
1,499
2,197
1,750
1,029
133
52
667
633
34
72
28
44
106
721
1,015
29,298
23,584
7,680
1,793
6,764
5,518
1,247
3,882
2,205
1,676
3,465
5,714
5,565
46,493
37,158
17,874
2,365
3,281
2,507
775
6,668
3,753
2,915
6,971
9,335
3,148
36,505
29,201
14,692
813,872
604,982
91,959
31,486
221,094
260,444
208,949
5,119
19,815
2,472
11,661
33,351
4,829
14,809
2,438
11,303
30,164
1,072
1,994
1,097
5,737
12,619
130
650
213
629
1,508
2,850
5,759
1,042
4,623
11,775
111
6,406
85
313
4,262
290
5,008
34
358
3,255
1,011,482
774,673
146,005
38,576
285,143
304,948
236,942
68 Total loans and securities, net
69
70
71
72
73
Direct lease financing
Fixed assets—Buildings, furniture, real estate...
Investment in unconsolidated subsidiaries
Customer acceptances outstanding
Other assets
74 Total assets
For notes see opposite page.
2,010
1,713
1,175
538
5,017
2,534
2,483
5,768
7,303
2,050
Commercial Banks
1.26
A19
Continued
Member banks i
Insured
commercial
banks
L i a b i l i t y or capital account
Nonmember
banks 1
Large banks
Total
A l l other
New Y o r k
City
City of
Chicago
Other
large
75 Demand deposits
76
M u t u a l savings banks
77
Other individuals, partnerships, and corporations
78
U.S. G o v t
79
States and political subdivisions
80
Foreign governments, central banks, etc
81
Commercial banks i n U n i t e d States
82
Banks i n foreign countries
83
Certified and officers' checks, etc
316,260
1,203
241,902
3,422
16,238
1,270
34,890
6,140
11,194
246,707
1,057
182,142
2,283
11,212
1,249
33,781
5,979
9,004
59,781
517
31,068
112
626
988
18,080
4,741
3,648
9,454
1
6,798
31
242
19
1,955
150
258
86,536
254
68,453
623
3,340
212
10,125
969
2,560
90,936
284
75,823
1,517
7,004
30
3,621
118
2,538
69,571
145
59,760
1,140
5,027
20
1,128
161
2,190
84 Time deposits
85
Accumulated for personal loan payments
86
M u t u a l savings banks
87
Other individuals, partnerships, and corporations
88
U.S. G o v t
89
States and political subdivisions
90
Foreign governments, central banks, etc
91
Commercial banks i n U n i t e d States
92
Banks i n foreign countries
293,127
137
352
230,513
689
46,368
7,401
6,384
1,284
212,408
112
331
165,815
536
31,771
7,126
5,512
1,206
32,154
12,333
iis"
23,878
68
1,388
3,942
1,996
754
43
8,781
28
1,182
1,207
1,013
79
72,420
10
139
55,372
230
12,804
1,929
1,703
233
95,502
102
21
77,784
211
16,397
48
800
140
80,719
25
21
64,698
152
14,597
275
872
78
93 Savings deposits
94
Individuals and nonprofit organizations
95
Corporations and other profit organizations
96
U.S. Government
97
States and political subdivisions
98
A l l other
213,702
197,632
9,651
52
6,242
126
152,966
141,168
7,143
40
4,500
115
12,072
10,868
583
4
535
82
3,275
2,945
248
56,721
52,604
3,016
22
1,054
25
80,898
74,751
3,296
13
2,830
8
60,737
56,464
2,508
12
1,742
11
99 T o t a l deposits
823,090
612,081
104,006
25,063
215,676
267,336
211,027
73,846
40,778
8,472
24,597
5,229
797
12,278
17,433
70,496
39,292
8,145
23,060
4,977
570
11,920
15,097
15,854
6,646
1,454
7,754
2,373
58
6,340
4,939
9,249
6,303
1,335
1,610
102
4
632
807
35,905
21,715
4,484
9,705
2,119
307
4,634
6,049
9,489
4,628
870
3,991
383
202
314
3,303
3,350
1,486
327
1,537
252
228
358
2,442
932,674
715,142
133,570
35,856
264,689
281,027
217,656
5,145
4,095
1,120
82
1,826
1,066
1,051
73,662
67
16,419
29,165
26,266
1,745
55,436
25
11,994
21,497
20,706
1,215
11,315
2,638
'2;453"
4,230
4,594
38
576"
1,243
772
53
18,628
2
3,847
7,686
6,670
424
22,855
23
5,124
8,338
8,671
700
18,236
42
4,430
7,671
5,562
531
1,011,482
774,673
146,005
38,576
285,143
304,948
236,942
117 D e m a n d deposits adjusted^
Average for last 15 or 30 days:
118
Cash and due f r o m bank
119
Federal funds sold and securities purchased under agreements to resell
120
T o t a l loans
121
T i m e deposits o f $ 100,000 or more
122
T o t a l deposits
123
Federal funds purchased and securities sold under agreements to repurchase
124
Other liabilities for borrowed money
231,519
165,830
24,269
5,588
57,408
78,564
65,690
121,842
103,888
29,188
4,578
38,072
32,050
17,956
42,908
521,907
129,513
805,559
33,274
395,321
105,527
596,858
3,121
70,296
26,714
95,782
1,384
21,429
9,715
25,106
16,897
145,777
41,042
211,304
11,873
157,820
28,056
264,665
9,675
126,586
23,986
208,712
76,919
4,489
73,461
4,231
19,126
2,052
9,305
90
35,188
1,739
9,842
350
3,458
258
125 Standby letters o f credit outstanding
126 T i m e deposits o f $100,000 or more
127
Certificates o f deposit
128
Other time deposits
12,593
131,851
109,696
22,155
11,931
107,632
88,947
18,685
6,925
26,650
22,351
4,299
996
9,501
8,270
1,231
3,242
42,859
34,294
8,565
768
28,621
24,033
4,589
662
24,219
20,749
3,470
14,405
5,737
12
9
154
5,562
8,678
100 Federal funds purchased and securities sold under agreements
to repurchase
101
Commercial banks
102
Brokers and dealers
103
Others
104 Other liabilities for borrowed money
105 Mortgage indebtedness
106 Bank acceptances outstanding
107 Other liabilities
108 T o t a l liabilities
>. .
109 Subordinated notes and debentures
110 Equity capital
111
Preferred stock
112
C o m m o n stock
113
Surplus
114
Undivided profits
115
Other capital reserves
116 T o t a l liabilities and equity capital
82'
1
M E M O ITEMS:
129 N u m b e r o f banks
1 Member banks exclude and nonmember banks include 10 noninsured
trust companies that are members o f the Federal Reserve System, and
member banks exclude 2 national banks outside the continental U n i t e d
States.
2 D e m a n d deposits adjusted are demand deposits other than domestic
commercial interbank and U.S. G o v t . , less cash items reported as i n
process o f collection.
NOTE.—Data include consolidated reports, including figures f o r all
bank-premises subsidiaries and other significant majority-owned domestic subsidiaries. Securities are reported o n a gross basis before deductions o f valuation reserves. Holdings by type o f security will be reported
as soon as they become available.
Back data i n lesser detail were shown i n previous BULLETINS. Details
may not add to totals because o f rounding.
A46
1.27
DomesticNonfinancialStatistics • October 1977
A L L LARGE WEEKLY REPORTING COMMERCIAL BANKS
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'^
To commercial banks
To brokers and dealers involving—
U.S. Treasury securities
Other securities
T o others
Other, gross
Commercial and industrial
Agricultural
For purchasing or carrying securities:
To brokers and dealers:
U.S. Treasury securities
Other securities
To others:
U.S. Treasury securities
Other securities
To nonbank financial institutions:
Personal and sales finance cos., etc
Other
Real estate
To commercial banks:
Domestic
Foreign
Consumer instalment
Foreign governments, official institutions, etc.
A l l other loans
LESS : Loan loss reserve and unearned income
on loans
Other loans, net
32
33
Investments:
U.S. Treasury securities
Bills
Notes and bonds, by maturity:
W i t h i n 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
A l l other
Other bonds, corporate stocks, and
securities:
Certificates o f participation2
A l l other, including corporate stocks
34
35
36
37
38
39
Cash items in process o f collection
Reserves with F.R. Banks
Currency and coin
Balances with domestic banks
Investments in subsidiaries not consolidated
Other assets
24
25
26
27
28
29
30
31
40 Total assets/total liabilities
Deposits:
41
Demand deposits
42
Individuals, partnerships, and corporations..
43
States and political subdivisions
44
U.S. Govt
Domestic interbank:
45
Commercial
46
M u t u a l savings
Foreign:
,,
47
Governments, official institutionsr, etc
48
Commercial banks
49
Certified and officers' checks
50
Time and savings deposits'^
51
Savings 4
52
Time:
53
Individuals, partnerships, and corporations
54
States and political subdivisions
55
Domestic interbank
56
Foreign govts., official institutions, etc
57 Federal funds purchased, etc. 5
Borrowings f r o m :
58
F.R. Banks
59
Others
60 Other liabilities, etc.6
61 Total equity capital and subordinated
notes/debentures 7
Aug. 10
Aug. 17
Aug. 24
Aug. 31
Sept. 7
Sept. 14
Sept. 21
Sept. 28
428,233
428,718
425,802
429,180
434,446
431,197
432,499
430,854
25,638
24,096
17,121
22,960
16,864
24,465
19,450
25,774
18,311
24,350
18,839
23,554
17,841
23,228
18,478
4,964
561
2,895
3,779
526
2,670
3,289
486
2,321
2, All
455
2,133
4,872
578
2,013
2,980
505
2,026
3,140
476
2,097
2,249
382
2,119
301,365
119,043
4,800
302,163
118,901
4,804
300,999
119,036
4,752
302,650
119,275
4,744
304,994
119,244
4,734
303,542
119,283
4,766
305,991
120,326
4,774
305,673
120,290
4,789
1,875
9,057
1,635
9,414
1,612
8,471
1,127
9,043
2,700
9,049
1,568
8,865
2,021
9,181
1,408
8,992
70
2,583
83
2,582
74
2,578
74
2,606
73
2,600
72
2,597
70
2,600
69
2,606
7,663
15,302
69,243
7,364
15,250
69,542
7,374
14,941
69,756
7,434
15,071
70,002
7,678
15,117
70,390
7,501
15,146
70,726
7,490
14,978
71,287
7,379
15,146
71,445
1,721
5,784
42,557
1,632
20,035
1,941
5,834
42,796
1,574
20,443
1,837
5,851
43,024
1,560
20,133
1,839
6,140
43,372
1,618
20,305
2,119
6,088
43,435
1,589
20,178
1,699
5,875
43,615
1,615
20,214
2,031
5,889
43,493
1,625
20,226
2,003
5,982
43,792
1,544
20,228
9,180
292,185
9,226
292,937
9,265
291,734
9,278
293,372
9,341
295,653
9,387
294,155
9,406
296,585
9,348
296,325
45,930
7,813
47,209
8,094
46,718
8,285
46,479
8,021
47,945
8,454
46,870
8,056
46,717
8,336
45,713
7,640
9,175
25,244
3,698
64,480
9,010
26,000
4,105
64,476
8,921
25,546
3,966
64,390
9,156
25,216
4,086
64,864
9,195
26,332
3,964
65,074
9,175
25,788
3,851
65,822
9,110
25,425
3,846
65,643
9,000
25,273
3,800
65,588
9,272
41,716
9,050
41,773
8,885
41,697
9,041
41,963
9,005
42,062
9,655
42,216
9,230
42,089
9,156
42,256
2,048
11,444
2,017
11,636
1,985
11,823
2,061
11,799
2,115
11,892
2,051
11,900
2,141
12,183
2,210
11,966
35,519
17,878
5,710
12,741
2,688
54,635
37,922
18,889
5,862
12,977
2,308
53,337
34,543
18,371
6,018
12,667
2,326
52,931
42,095
21,458
6,127
14,140
2,368
54,790
41,257
15,330
5,793
12,564
2,783
54,861
40,192
22,146
6,215
13,083
2,842
55,594
36,888
18,567
6,035
12,179
2,857
54,751
36,875
22,999
6,299
13,322
2,872
54,181
557,404
560,013
552,658
570,158
567,034
571,269
563,776
567,402
171,688
124,918
5,361
1,653
175,002
127,719
5,740
1,465
168,704
122,941
5,495
1,075
183,179
130,901
6,401
1,009
179,609
130,128
5,572
1,701
181,255
133,635
5,474
1,520
174,307
126,319
6,012
3,256
176,535
125,685
5,748
5,352
24,341
958
25,137
946
24,394
827
26,704
978
26,782
1,040
25,106
895
23,741
814
25,178
799
1,390
6,018
7,049
238,751
94,301
144,450
110,807
20,642
4,223
7,201
937
6,091
6,967
238,899
94,131
144,768
111,353
20,810
4,126
6,882
1,228
6,190
6,554
239,228
93,914
145,314
111,785
21,040
4,065
6,853
1,747
6,521
8,918
239,523
93,594
145,929
112,138
21,271
4,141
6,859
1,650
6,103
6,633
238,704
93,708
144,996
111,708
21,157
4,089
6,541
1,194
6,321
7,110
238,901
93,418
145,483
112,140
21,268
4,076
6,488
1,285
6,110
6,770
239,243
93,290
145,953
111,996
21,459
A,261
6,589
1,212
6,078
6,483
241,749
93,406
148,343
113,711
21,693
4,490
6,825
72,453
71,211
69,015
72,088
74,015
75,886
72,032
72,295
736
3,643
26,806
738
3,994
26,903
1,938
3,964
26,490
858
4,298
26,697
335
4,291
26,541
136
4,473
26,885
2,446
5,030
27,028
877
5,290
26,871
43,327
43,266
43,319
43,515
43,539
43,733
43,690
43,785
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 i n 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
1.28
LARGE WEEKLY REPORTING COMMERCIAL BANKS I N NEW YORK CITY
All
Assets and Liabilities
Millions of dollars, Wednesday figures
1977
Account
Aug. 10
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 i
To commercial banks
To brokers and dealers involving—
U.S. Treasury securities
Other securities
To others
Other, gross
Commercial and industrial
Agricultural
For purchasing or carrying securities:
To brokers and dealers:
U.S. Treasury securities
Other securities
To others:
U.S. Treasury securities
Other securities
To nonbank financial institutions:
Personal and sales finance cos., etc
Other
Real estate
To commercial banks:
Domestic
Foreign
Consumer instalment
Foreign governments, official institutions, etc.
A l l other loans
LESS: Loan loss reserve and unearned income
on loans
Other loans, net
32
33
Investments:
U.S. Treasury securities
Bills
Notes and bonds, by maturity:
Within 1 year
1 to 5 years
After 5 years
Other securities
Obligations of States and political
subdivisions:
Tax warrants, short-term notes, and bills..
A l l other
Other bonds, corporate stocks, and
securities:
Certificates of participation2
A l l other, including corporate stocks
34
35
36
37
38
39
Cash items in process of collection
Reserves with F.R. Banks
Currency and coin
Balances with domestic banks
Investments in subsidiaries not consolidated
Other assets
24
25
26
27
28
29
30
31
40 Total assets/total liabilities
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
Deposits:
Demand deposits
Individuals, partnerships, and corporations..
States and political subdivisions
U.S. Govt
Domestic interbank:
Commercial
Mutual savings
Foreign:
Governments, official institutions, etc
Commercial banks
Certified and officers' checks
Time and savings deposits'^
Savings 4
Time:
Individuals, partnerships, and corporations
States and political subdivisions
Domestic interbank
Foreign govts., official institutions, etc
57 Federal funds purchased, etc. 5
Borrowings from:
58
F.R. Banks
59
Others
60 Other liabilities, etc.6
61 Total equity capital and subordinated
notes/debentures 7
Aug. 17
Aug. 31
Sept. 7
Sept. 14
Sept. 21
Sept. 28
92,150
93,331
91,490
92,806
94,205
92,107
93,994
92,287
4,657
2,295
4,909
2,586
4,109
2,468
4,803
3,303
3,683
2,142
3,961
2,132
4,490
2,458
4,327
2,699
1,056
1,146
714
674
1,154
733
826*
918
£
o
617
1,051
927"
778'
878'
895'
68,566
33,938
145
68,644
33,792
144
67,724
33,818
122
68,121
33,906
123
70,348
33,950
124
68,090
33,678
128
69,522
34,140
144
68,502
33,949
150
1,709
4,780
1,436
5,136
1,322
4,596
964
4,906
2,515
4,913
1,410
4,829
1,768
5,048
1,234
4,850
24
378
29
383
28
380
25
383
25
382
24
382
24
379
23
378
2,753
4,757
8,687
2,577
4,739
8,671
2,542
4,655
8,688
2,534
4,667
8,696
2,696
4,760
8,823
2,555
4,731
8,863
2,572
4,693
8,864
2,480
4,793
8,846
543
2,506
4,117
438
3,791
631
2,641
4,134
356
3,975
614
2,623
4,158
341
3,837
603
2,863
4,170
381
3,900
958
2,940
4,172
331
3,759
502
2,683
4,206
348
3,751
786
2,772
4,193
380
3,759
670
2,883
4,220
350
3,676
1,688
66,878
1,695
66,949
1,683
66,041
1,716
66,405
1,752
68,596
1,761
66,329
1,747
67,775
1,709
66,793
10,278
2,529
11,198
3,024
11,137
3,166
11,285
3,184
11,715
3,065
11,166
2,895
10,946
2,847
10,558
2,620
1,374
5,583
792
10,337
1,356
5,835
983
10,275
1,314
5,811
846
10,203
1,486
5,805
810
10,313
1,492
6,310
848
10,211
1,501
5,931
839
10,651
1,466
5,795
838
10,783
1,456
5,660
822
10,609
2,565
6,231
2,431
6,203
2,320
6,214
2,319
6,231
2,223
6,295
2,561
6,319
2,463
6,384
2,420
6,399
194
1,347
193
1,448
193
1,476
193
1,570
193
1,500
193
1,578
193
1,743
194
1,596
12,461
5,810
837
6,042
1,310
19,069
12,278
5,318
831
6,068
1,313
17,910
11,843
6,228
843
6,002
1,311
17,809
16,243
5,687
856
6,861
1,311
18,774
11,667
3,564
839
5,129
1,377
18,984
12,333
5,946
861
5,856
1,376
19,819
11,601
3,514
861
5,321
1,380
19,285
12,409
6,337
892
6,143
1,375
19,169
137,679
137,049
135,526
142,538
135,765
138,298
135,956
138,612
48,574
26,419
485
280
48,767
27,192
531
173
47,304
25,714
497
102
54,891
29,332
840
101
47,710
26,065
480
137
48,895
27,754
436
173
47,367
25,948
495
616
49,183
26,319
427
711
11,735
533
11,784
514
12,095
432
13,004
531
11,412
562
11,378
477
11,268
399
12,788
395
1,161
4,584
3,377
42,026
10,598
31,428
23,475
1,410
1,549
4,139
725
4,666
3,182
42,027
10,581
31,446
23,750
1,452
1,512
3,862
918
4,596
2,950
41,857
10,510
31,347
23,635
1,451
1,516
3,902
1,473
4,993
4,617
41,746
10,449
31,297
23,604
1,403
1,547
3,899
1,416
4,713
2,925
41,163
10,438
30,725
23,296
1,396
1,510
3,703
961
4,666
3,050
41,106
10,400
30,706
23,419
1,397
1,465
3,616
1,026
4,698
2,917
40,805
10,357
30,448
23,019
1,423
1,481
3,696
958
4,645
2,940
41,748
10,369
31,379
23,688
1,452
1,563
3,874
20,785
20,035
19,376
19,815
20,966
22,203
20,088
20,751
'"i,'456'
12,574
•"i;569'
12,451
1,018
1,453
12,253
""i;652'
12,035
204
1,537
11,811
""i,"634'
11,899
1,522
1,796
11,798
""2,'i38'
12,208
12,264
12,260
12,265
12,399
12,374
12,561
12,580
12,584
1 Includes securities purchased under agreements to resell.
2 Federal agencies only.
3 Includes time deposits of U.S. Govt, and of foreign banks, which
are not shown separately.
4 For amounts of these deposits by ownership categories, see Table 1.30.
Aug, 24
5 Includes securities sold under agreements to repurchase.
6 Includes minority interest in consolidated subsidiaries and deferred
tax portion of reserves for loans.
7 Includes reserves for securities and contingency portion of reserves
for loans.
A46
1.29
DomesticNonfinancialStatistics • October 1977
LARGE W E E K L Y REPORTING C O M M E R C I A L BANKS OUTSIDE NEW Y O R K CITY
Assets and Liabilities
Millions of 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^
To commercial banks
To brokers and dealers involving—
U.S. Treasury securities
Other securities
To others
Other, gross
Commercial and industrial
Agricultural
For purchasing or carrying securities:
To brokers and dealers:
U.S. Treasury securities. .
Other securities
To others:
U.S. Treasury securities
Other securities
To nonbank financial institutions:
Personal and sales finance cos., etc
Other
Real estate
To commercial banks:
Domestic
Foreign
Consumer instalment
Foreign governments, official institutions, etc.
A l l other loans
LESS : Loan reserve and unearned income on
loans
Other loam, net
32
33
Investments:
U.S. Treasury securities
Bills
Notes and bonds, by maturity:
Within 1 year
1 to 5 years
After 5 years
Other securities
Obligations of States and political
subdivisions:
Tax warrants, short-term notes, and bills.
A l l other
Other bonds, corporate stocks, and
securities:
Certificates of participation2
A l l other, including corporate stocks
34
35
36
37
38
39
Cash items in process of collection
Reserves with F. R. Banks
Currency and coin
Balances with domestic banks
Investments in subsidiaries not consolidated....
Other assets
24
25
26
27
28
29
30
31
40 Total assets/total liabilities
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
Aug. 10
Aug. 17
Aug. 24
Aug. 31
Sept. 7
Sept. 14
Sept. 21
Sept. 28
336,083
335,387
334,312
336,374
340,241
339,090
338,505
338,567
20,981
14,923
19,187
14,535
18,851
14,396
19,662
16,147
22,091
16,169
20,389
16,707
19,064
15,383
18,901
15,779
3,908
561
1,589
2,633
526
1,493
2,575
486
1,394
1,753
455
1,307
3,954
572
1,396
1,929
505
1,248
1,986
476
1,219
1,516
382
1,224
232,799
85,105
4,655
233,519
85,109
4,660
233,275
85,218
4,630
234,529
85,369
4,621
234,646
85,294
4,610
235,452
85,605
4,638
236,469
86,186
4,630
237,171
86,341
4,639
166
4,277
199
4,278
290
3,875
163
4,137
185
4,136
158
4,036
253
4,133
174
4,142
46
2,205
54
2,199
46
2,198
49
2,223
48
2,218
48
2,215
46
2,221
46
2,228
4,910
10,545
60,556
4,787
10,511
60,871
4,832
10,286
61,068
4,900
10,404
61,306
4,982
10,357
61,567
4,946
10,415
61,863
4,918
10,285
62,423
4,899
10,353
62,599
1,178
3,278
38,440
1,194
16,244
1,310
3,193
38,662
1,218
16,468
1,223
3,228
38,866
1,219
16,296
1.236
3,277
39,202
1.237
16,405
1,161
3,148
39,263
1,258
16,419
1,197
3,192
39,409
1,267
16,463
1,245
3,117
39,300
1,245
16,467
1,333
3,099
39,572
1,194
16,552
7,492
225,307
7,531
225,988
7,582
225,693
7,562
226,967
7,589
227,057
7,626
227,826
7,659
228,810
7,639
229,532
35,652
5,284
36,011
5,070
35,581
5,119
35,194
4,837
36,230
5,389
35,704
5,161
35,771
5,489
35,155
5,020
7,801
19,661
2,906
54,J 43
7,654
20,165
3,122
54,201
7,607
19,735
3,120
54,187
1,61Q
19,411
3,276
54,551
7,703
20,022
3,116
54,863
7,674
19,857
3,012
55,171
7,644
19,630
3,008
54,860
7,544
19,613
2,978
54,979
6,707
35,485
6,619
35,570
6,565
35,483
6,722
35,732
6,782
35,767
7,094
35,897
6,767
35,705
6,736
35,857
1,854
10,097
1,824
10,188
1,792
10,347
1,868
10,229
1,922
10,392
1,858
10,322
1,948
10,440
2,016
10,370
23,058
12,068
4,873
6,699
1,378
35,566
25,644
13,571
5,031
6,909
995
35,427
22,700
12,143
5,175
6,665
1,015
35,122
25,852
15,771
5,271
7,279
1,057
36,016
29,590
11,766
4,954
7,435
1,406
35,877
27,859
16,200
5,354
7,227
1,466
35,775
25,287
15,053
5,174
6,858
1,477
35,466
24,466
16,662
5,407
7,179
1,497
35,012
419,725
422,964
417,132
427,620
431,269
432,971
427,820
428,790
123,114
98,499
4,876
1,373
126,235
100,527
5,209
1,292
121,400
97,227
4,998
973
128,288
101,569
5,561
908
131,899
104,063
5,092
1,564
132,360
105,881
5,038
1,347
126.940
100;371
5,517
2,640
' 127,352
99,366
5,321
4,641
Deposits:
.
Demand deposits
Individuals, partnerships, and corporations .
States and political subdivisions
U.S. Govt
Domestic interbank:
Commercial
Mutual savings
Foreign:
Governments, official institutions, etc
Commercial banks
Certified and officers' checks
.
Time and savings deposits^
Savings 4
Time:
Individuals, partnerships, and corporations
States and political subdivisions
Domestic interbank
Foreign govts., official institutions, etc,
12,606
425
13,353
432
12,299
395
13,700
447
15,370
478
13,728
418
12,473
415
12,390
404
229
1,434
3,672
196,725
83,703
113,022
87,332
19,232
2,674
3,062
212
1,425
3,785
196,872
83,550
113,322
87,603
19,358
2,614
3,020
310
1,594
3,604
197,371
83,404
113,967
88,150
19,589
2,549
2,951
274
1,528
4,301
197,777
83,145
114,632
88,534
19,868
2,594
2,960
234
1,390
3,708
197,541
83,270
114,271
88,412
19,761
2,579
2,838
233
1,655
4,060
197, 795
83,018
114,777
88,721
19,871
2,611
2,872
259
1,412
3,853
198,438
82,933
115,505
88,977
20,036
2,786
2,893
254
1,433
3,543
200,001
83,037
116,964
90,023
20,241
2,927
2,951
.
51,668
51,176
49,639
52,273
53,049
53,683
51,944
51,544
736
2,187
14,232
738
2,485
14,452
920
2,511
14,237
858
2,646
14,662
131
2,754
14,730
136
2,839
14,986
924
3,234
15,230
877
3,152
14,663
31,063
31,006
31,054
31,116
31,165
31,172
31,110
31,201
57 Federal funds purchased, etc.5
Borrowings f r o m :
58
F. R. Banks
59
Others
60 Other liabilities, etc.6
61 Total equity capital and subordinated
notes/debentures7
1 Includes securities purchased under agreements to resell.
2 Federal agencies only.
3 Includes time deposits of U.S. Govt, and of foreign banks, which
are not shown separately.
4 For amounts of 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 of reserves for loans.
7 Includes reserves for securities and contingency portion of reserves
for loans.
Weekly Reporting Banks
1.30
LARGE WEEKLY REPORTING COMMERCIAL BANKS
A23
Balance Sheet Memoranda
Millions of dollars, Wednesday figures
1977
Account and bank group
Aug. 10
Aug. 17
Aug. 24
Aug. 31
Sept. 7
Sept. 14
Sept. 21
Sept. 28
1
2
3
Total loans (gross) and investments, adjusted i
Large banks
New York City banks
Banks outside New Y o r k City
418,474
91,000
327,474
418,882
91,809
327,073
416,366
90,091
326,275
417,169
90,616
326,553
423,357
92,857
330,500
420,046
91,234
328,812
422,033
92,497
329,536
419,721
90,627
329,094
4
5
6
Total loans (gross), adjusted
Large banks
New Y o r k City banks
Banks outside New York City
308,064
70,385
237,679
307,197
70,336
236,861
305,258
68,751
236,507
305,826
69,018
236,808
310,338
70,931
239,407
307,354
69,417
237,937
309,673
70,768
238,905
308,420
69,460
238,960
7
8
9
Demand deposits, adjusted^
Large banks
New York City banks
Banks outside New York City
110,175
24,098
86,077
110,478
24,532
85,946
108,692
23,264
85,428
113,371
25,543
87,828
109,869
24,494
85,375
114,437
25,011
89,426
110,422
23,882
86,540
109,130
23,275
85,855
64,272
64,510
64,943
65,028
64,697
64,927
20,455
43,817
20,466
44,044
65,245
20,428
44,515
20,251
44,777
19,880
44,817
67,447
19,760
45,167
19,533
45,712
20,497
46,950
43,229
14,003
29,226
43,683
14,261
29,422
44,087
14,201
29,886
44,061
13,979
30,082
43,934
13,813
30,121
44,096
13,814
30,282
43,868
13,460
30,408
45,397
14,145
31,252
21,043
6,452
14,591
20,827
6,205
14,622
20,856
6,221
14,629
20,967
6,212
14,695
20,763
6,067
14,696
20,831
5,946
14,885
21,377
6,073
15,304
22,050
6,352
15,698
26,965
26,983
27,130
27,450
27,161
27,130
5,574
21,409
5,610
21,520
27,408
5,588
21,377
5,589
21,861
5,509
21,652
27,502
5,560
21,570
5,555
21,853
5,564
21,938
15,087
4,157
10,930
15,099
4,150
10,949
15,173
4,187
10,986
15,368
4,235
11,133
15,358
4,222
11,136
15,400
4,276
11,124
15,571
4,257
11,314
15,635
A,211
11,358
11,878
1,431
10,447
11,884
1,424
19,460
11,957
1,423
10,534
12,082
1,354
10,728
11,803
1,287
10,516
11,730
1,284
10,446
11,837
1,298
10,539
11,867
1,287
10,580
87,244
9,686
77,558
87,156
9,679
11,All
86,967
9,648
77,319
86,660
9,583
77,077
86,828
9,571
77,257
86,549
9,529
77,020
86,499
9,498
77,001
86,621
9,521
77,100
5,167
575
4,592
5,158
572
4,586
5,191
573
4,618
5,183
563
4,620
5,167
571
4,596
5,172
562
4,610
5,134
560
4,574
5,168
561
4,607
1,828
293
1,535
1,760
291
1,469
1,712
262
1,450
1,706
275
1,431
1,664
265
1,399
1,644
273
1,371
1,609
267
1,342
1,588
270
1,318
62
44
18
57
39
18
44
21
17
45
28
17
49
31
18
53
36
17
48
32
16
29
17
12
10
11
12
13
14
15
16
17
18
Large negotiable time CD's included in time and
savings deposits ^
Total:
Large banks
New Y o r k City
Banks outside New Y o r k City
Issued to IPC's:
Large banks
New Y o r k City Banks
Banks outside New Y o r k City
Issued to others:
Large banks
New Y o r k City banks
Banks outside New York City
A l l other large time deposits4
Total:
19 Large banks
20
New York City banks
21
Banks outside New Y o r k City
Issued to IPC's:
22
Large banks
23
New Y o r k City banks
24
Banks outside New Y o r k City
Issued to others:
25
Large banks
26
New Y o r k City banks
27
Banks outside New Y o r k City
37
38
39
Savings deposits, by ownership category
Individuals and nonprofit organizations:
Large banks
New York City banks
Banks outside New Y o r k City
Partnerships and corporations for profit:5
Large banks
New Y o r k City banks
Banks outside New Y o r k City
Domestic governmental units:
Large banks
New York City banks
Banks outside New Y o r k City
A l l other:6
Large banks
New Y o r k City banks
Banks outside New Y o r k City
40
41
42
Gross liabilities of banks to their foreign
branches
Large banks
New York City banks
Banks outside New Y o r k City
3,542
2,007
1,535
3,930
2,070
1,860
3,579
1,922
1,657
4,191
2,322
1,869
3,824
2,123
1,701
4,469
1,962
2,507
4,172
2,539
1,633
5,302
3,198
2,104
43
44
45
Loans sold outright to selected institutions by all
large banks 7
Commercial and industrial
Real estate
Another
2,832
212
1,013
2,807
215
1,014
2,851
217
1,025
2,845
216
2,800
220
2,822
226
2,813
215
1,029
2,775
221
1,050
28
29
30
31
32
33
34
35
36
1 Exclusive of loans and Federal funds transactions with domestic
commercial banks.
2 A l l demand deposits except U.S. Govt, and domestic commercial
banks, less cash items in process of collection.
3 Certificates of deposit (CD's) issued in denominations of $100,000 or
more.
4 A l l other time deposits issued in denominations of $100,000 or more
(not included in large negotiable CD's).
1,022
1,028
1,010
5 Other than commercial banks.
<> Domestic and foreign commercial banks, and official international
organizations.
7 To bank's own foreign branches, nonconsolidated nonbank affiliates of the bank, the bank's holding company (if not a bank), and
nonconsolidated nonbank subsidiaries of the holding company.
A46
1.31
DomesticNonfinancialStatistics • October 1977
L A R G E W E E K L Y REPORTING C O M M E R C I A L BANKS
Commercial and Industrial Loans
Millions o f dollars
Outstanding
Net change during—
1977
Industry classification
Aug. 31
Sept. 7
Sept. 14
1977
Sept. 21
Sept. 28
1977
Q2
Ql
July
Aug.
Sept.
Total loans classified 2
97,020
97,000
96,978
97,777
97,682
-916
1,542
-602
286
662
Durable goods manufacturing:
Primary metals
Machinery
Transportation equipment
Other fabricated metal products...
Other durable goods
2,390
4,481
2,336
1,869
3,661
2,380
4,450
2,339
1,871
3,695
2,429
4,541
2,372
1,894
3,730
2,501
4,610
2,406
1,965
3,749
2,494
4,571
2,386
1,975
3,732
377
108
74
181
90
-161
38
94
70
323
-93
-60
23
-25
-65
67
-263
-85
-67
59
104
90
50
106
71
Nondurable goods manufacturing:
Food, liquor, and tobacco
Textiles, apparel, and leather
Petroleum refining
Chemicals and rubber
Other nondurable goods
3,296
4,065
2,708
2,813
2,097
3,368
4,111
2,585
2,830
2,122
3,361
4,112
2,544
2,851
2,137
3,443
4,060
2,576
2,897
2,144
3,456
4,020
2,713
2,881
2,168
-151
381
-305
131
147
-21
475
285
68
-22
-151
193
10
11
-8
119
20
77
45
83
160
-45
5
68
71
8,159
8,163
8,204
8,285
8,232
94
757
-12
1,382
6,732
7,164
4,965
1,255
5,144
4,389
11,147
1,364
6,813
7,074
4,938
1,304
5,116
4,371
11,025
1,333
6,759
7,165
4,958
1,289
5,001
4,385
11,057
1,356
6,813
7,109
4,998
1,363
5,089
4,559
11,140
1,324
6,860
7,200
4,968
1,268
5,040
4,541
11,053
204
465
405
-140
-10
-61
64
398
-434
36
380
-128
-152
12
294
331
-207
-31
282
-123
36
-314
114
-147
-114
2
-5
51
23
-94
8
10
-58
128
36
3
13
-104
152
-94
7,942
3,799
7,924
4,003
7,927
3,752
7,912
3,679
7,922
3,766
-303
-2,930
105
-263
-32
11
253
108
-20
-33
5,226
5,154
5,177
5,123
5,112
-135
-545
-14
-10
-114
233
-216
-34
-75
-40
30
120,290
203
2,648
-576
412
1,015
1 Total
2
3
4
5
6
7
8
9
10
11
12 Mining, including crude petroleum
and natural gas
Trade:
13
Commodity dealers
14
Other wholesale
15
Retail
16 Transportation
17 Communication
18 Other public utilities
19 Construction
20 Services
21 A l l other domestic loans
22 Bankers acceptances
23 Foreign commercial and industrial
loans
-1
73
MEMO:
24 Commercial paper included i n
total classified loans ^
25 Total commercial and industrial
loans o f all large weekly
reporting banks
203
119,275
119,244
119,283
120,326
1977
May 25
June 29
July 27
1977
Aug. 31
Sept. 28
1977
Q2
Ql
July
Aug.
Sept.
" T e r m " loans classifieds
46,107
46,516
45,901
46,076
46,337
630
675
-615
175
261
27
28
29
30
31
Durable goods manufacturing:
Primary metals
Machinery
Transportation equipment
Other fabricated metal products...
Other durable goods
1,342
2,490
1,386
826
1,647
1,388
2,520
1,382
832
1,722
1,323
2,414
1,404
813
1,719
1,394
2,306
1,382
785
1,734
1,426
2,337
1,429
775
1,774
204
-33
-13
44
-133
-32
43
12
97
-65
-106
22
-19
-3
71
-108
-22
-28
15
32
31
47
-10
40
32
33
34
35
36
Nondurable goods manufacturing:
Food, liquor, and tobacco
Textiles, apparel, and leather
Petroleum refining
Chemicals and rubber
Other nondurable goods
1,438
1,163
1,824
1,615
1,172
1,435
1,150
1,938
1,646
1,128
1,363
1,204
1,975
1,677
1,118
1,368
1,149
1,988
1,705
1,088
1,400
1,154
1,997
1,745
1,094
14
-27
-202
103
78
23
79
168
99
96
-72
54
37
31
-10
5
-55
13
28
-30
32
5
9
40
6
6,043
6,375
6,250
6,295
6,283
173
519
-125
45
-12
202
1,519
2,353
3,604
793
3,796
1,722
5,283
2,465
171
1,483
2,325
3,649
748
3,771
1,833
5,301
2,432
180
1,478
2,331
3,607
764
3,416
1,873
5,247
2,464
209
1,485
2,379
3,624
785
3,358
1,904
5,288
2,733
194
1,540
2,399
3,625
786
3,302
2,042
5,315
2,542
_ 1
16
223
-164
-68
243
32
113
-167
-28
4
57
-124
-31
-136
172
190
-1
9
-5
6
-42
16
-355
40
-54
32
29
7
48
17
21
-58
31
41
269
-15
55
20
1
1
-56
138
27
-191
3,424
3,287
3,281
3,117
3,178
62
-399
-164
61
26 Total
37 Mining, including crude petroleum
and natural gas
Trade:
38
Commodity dealers
39
Other wholesale
40
Retail
41 Transportation
42 Communication
43 Other public utilities
44 Construction
45 Services
46 A l l other domestic loans
47 Foreign commercial and industrial
loans
1 Reported for the last Wednesday o f each month.
2 Includes " t e r m " loans, shown below.
3 Outstanding loans with an original maturity o f more than 1 year and
-6
all outstanding loans granted under a formal agreement—^revolving credit
or standby—on which the original maturity o f the commitment was i n
excess o f 1 year.
Deposits and Commercial Paper
1.32
A25
GROSS D E M A N D DEPOSITS of Individuals, Partnerships, and Corporations
Billions o f dollars, estimated daily-average balances
A t commercial banks
Type o f holder
1976
1972
Dec.
1973
Dec.
1974
Dec.
1977
1975
Dec.
Mar.
June
Sept.
Dec.
Mar.
June
1 A l l holders, I P C
208.0
220.1
225.0
236.9
227.9
234.2
236.1
250.1
242.3
253.8
6 Other
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
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
25.9
129.2
84.1
2.5
12.2
A t weekly reporting banks
1977
1973
Dec.
7 A l l holders, I P C
9 Nonfinancial business
11 Foreign
12 Other
1974
Dec.
1975
Dec.
1976
Dec.
Mar.
Apr.
May
June
July
Aug.p
118.1
119.7
124.4
128.5
124.7
127.5
124.4
128.7
131.0
128.0
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
17.5
69.7
31.7
2.6
7.1
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
17.8
69.5
32.3
2.4
6.7
18.9
70.7
32.6
2.2
6.7
18.0
68.8
32.4
2.5
6.4
NOTE.—Figures include cash items i n process o f collection. Estimates o f
gross deposits are based on reports supplied by a sample o f commercial
banks. Types o f depositors i n each category are described i n the June 1971
D a t a for August 1976 have been revised as follows: A l l holders, ipc,
119.4; financial business, 15.3; nonfinancial business, 65.5; consumer,
30.0; foreign, 2.5; all other, 6.1.
BULLETIN, p . 466.
1.33
C O M M E R C I A L PAPER A N D B A N K E R S ACCEPTANCES O U T S T A N D I N G
M i l l i o n s o f dollars, end o f period
1977
Instrument
1974
Dec.
1975
Dec.
1976
Dec.
Feb.
Mar.
Apr.
May
June
July
Aug.
Commercial paper (seasonally adjusted)
1 A l l issuers
2
3
4
5
Financial companies: i
Dealer-placed paper:2
Total
Bank-related
Directly-placed paper: 3
Total
Bank-related
6 Nonfinancial companies4
49,742
48,145
52,623
52,775
54,546
56,715
57,434
61,237
60,323
60,320
4,599
1,814
6,220
1,762
7,271
1,900
6,931
1,929
7,196
1,839
7,286
1,778
7,555
1,805
8,196
1,894
8,261
1,744
8,167
1,650
31,801
6,518
31,230
6,892
32,365
5,959
32,073
5,502
33,873
6,126
34,753
5,703
34,949
5,999
37,593
6,636
36,773
6,344
30,699
6,394
13,342
10,695
12,987
13,771
13,475
14,676
14,930
15,538
15,289
15,454
D o l l a r acceptances (not seasonally adjusted)
7 Total
8
9
10
11
12
13
Held by:
Accepting banks
O w n bills
Bills bought
F . R . Banks:
O w n account
Foreign correspondents
Others
Based o n :
14
I m p o r t s into U n i t e d States
15
Exports f r o m U n i t e d States
16
A l l other
18,484
18,727
22,523
22,187
22,694
22,899
23,201
23,440
23,499
23,091
4,226
3,685
542
7,333
5,899
1,435
10,442
8,769
1,673
7,991
6,654
1,337
7,787
6,367
1,421
7,761
6,309
1,381
7,326
6,218
1,108
7,630
6,356
1,273
7,601
6,464
1,137
7,647
6,580
1,067
999
1,109
1,126
293
991
375
322
440
280
435
881
394
108
385
'•621
360
'•393
296
131
304
12,150
9,975
13,447
13,434
14,191
13,863
15,382
'•14,829
'•I 5,209
15,009
4,023
4,067
10,394
3,726
4,001
11,000
4,992
4,818
12,713
5,138
5,074
11,974
4,983
5,222
12,489
5,114
5,376
12,410
5,124
5,642
12,436
5,635
5,729
12,076
5,570
5,842
12,088
5,446
5,747
11,899
1 Institutions engaged primarily i n 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 i n the open
market.
3 As reported by financial companies that place their paper directly
w i t h investors.
4 Includes public utilities and firms engaged primarily i n activities such
as communications, construction, manufacturing, mining, wholesale and
retail trade, transportation, and services.
A46
1.34
DomesticNonfinancialStatistics • October 1977
P R I M E R A T E C H A R G E D B Y B A N K S on Short-term Business Loans
Per cent per annum
Month
Effective date
1976—Jan.
June
12
21
Rate
7
634
1,
7,
7
Aug.
2,
71/4
Oct.
4
7
63/4
1.35
Effective date
1
61/2
Dec. 13,
61/4
1976_NOV.
1977—May
Aug.
13
31,
61/2
63/4
22.
7
Sept. 16.
Average
rate
Rate
1976—June
July.
Aug.
Sept.
Oct..
Nov.
Dec.
Month
Average
rate
1977_jan..
Feb.
Mar,
7.20
7.25
7.01
7.00
6.78
6.50
6.35
6.25
6.25
6.25
6.25
6.41
6.75
6.75
6.83
7.13
May'
June,
July.
Aug.
Sept.
71/4
TERMS OF L E N D I N G A T C O M M E R C I A L BANKS
Survey of Loans Made, May 2-7, 1977
Size o f l o a n (in thousands o f dollars)
Item
All
sizes
1-24
25-49
1,000
50-99
100-499
500-999
and over
Short-term commercial and industrial loans
1
2
3
4
5
A m o u n t o f loans (thousands o f dollars)
N u m b e r o f loans
Weighted-average m a t u r i t y (months)
Weighted-average interest rate (per cent per annum)
Interquartile range 1
Percentage o f amount o f loans:
6
W i t h floating rate
7
M a d e under c o m m i t m e n t
6,652,747
144,391
2.9
7.37
6.40-8.14
806,754
113,551
3.2
9.04
8.03-9.50
431,421
13,447
3.7
8.39
7.71-9.20
504,177
7,967
3.8
8.04
7.25-8.97
1,247,257
7,316
2.7
7.57
6.50-8.30
605,755
962
2.7
7.11
6.40-7.54
3,057,385
1,148
2.7
6.65
6.25-6.92
47.2
52.4
12.6
18.3
33.5
34.1
36.1
40.7
51.3
49.8
23.0
61.0
64.6
64.2
188,678
1,172
49.1
8.03
6.98-9.00
74,981
119
42.9
8.03
6.84-8.84
589,391
150
41.5
7.18
6.51-7.45
42.1
37.3
68.3
68.9
73.4
90.2
L o n g - t e r m commercial and industrial loans
8
9
10
11
12
A m o u n t o f loans (thousands o f dollars)
N u m b e r o f loans
Weighted-average m a t u r i t y (months)
Weighted-average interest rate (per cent per annum)
Interquartile range 1
Percentage o f a m o u n t o f loans:
13
W i t h floating rate
14
M a d e under c o m m i t m e n t
1,651,267
59,524
35.0
8.24
7.20-9.25
439,081
49,530
18.8
9.31
7.50-9.50
175,761
5,398
23.1
8.95
7.26-9.38
36.7
45.1
3.0
9.4
7.3
8.5
183,375
3,157
46.8
8.71
7.25-10.20
9.1
19.0
Construction and land development loans
15
16
17
18
19
20
21
22
23
24
25
A m o u n t o f loans (thousands o f dollars)
N u m b e r o f loans
Weighted-average m a t u r i t y (months)
Weighted-average interest rate (per cent per a n n u m ) . .
Interquartile range 1
Percentage o f a m o u n t o f loans:
W i t h floating rate
Secured by real estate
M a d e under c o m m i t m e n t
Type o f construction: 1 - t o 4-family
Muhifamily.
Nonresidential
863,318
28,820
7.5
8.72
16-9.25
167,107
19,843
8.0
9.28
8.25-9.92
87,280
2,763
5.7
8.95
8.00-9.73
331,708
5,100
4.8
8.79
8.71-8.71
145,933
1,017
9.5
8.46
8.00-9.00
131,289
98
12.7
7.97
7.43-8.91
20.0
81.4
39.4
55.9
11.9
32.2
8.4
81.9
46.4
75.9
4.3
19.8
9.9
82.5
56.3
74.6
1.0
24.4
3.7
82.7
13.6
61.4
18.6
20.0
32.2
63.1
45.5
23.6
7.9
68.5
69.1
97.0
77.4
39.9
16.7
43.4
All
sizes
1-9
10-24
25-49
50-99
100-249
250
and over
Loans to farmers
26
27
28
29
30
31
32
33
34
35
36
A m o u n t o f loans (thousands o f dollars)
N u m b e r o f loans
Weighted-average m a t u r i t y (months)
Weighted-average interest rate (per cent per a n n u m ) . .
Interquartile range 1
B y purpose o f l o a n :
Feeder livestock
Other livestock
Other current operating expenses
F a r m machinery and equipment
Other
924,826
77,543
8.3
'•8.72
8.25-9.20
196,521
56,467
8.1
9.06
8.62-9.34
212,922
13,784
7.9
8.98
8.50-9.24
140,441
4,109
11.5
»-8.92
8.45-9.20
145,491
2,219
6.6
8.73
8.31-9.20
102,271
765
5.9
8.58
8.16-9.07
127,180
199
9.6
7.67
6.27-8.68
8.42
'•S.U
8.84
9.40
8.82
8.84
8.89
9.01
9.47
9.04
8.80
8.91
8.95
9.44
8.90
8.65
'•8.85
8.81
9.74
9.04
8.55
8.81
8.91
8.96
8.66
8.19
8.47
8.59
8.58
8.73
7.68
6.77
8.01
8.72
8.78
1 Interest rate range that covers the m i d d l e 50 per cent o f the total
dollar a m o u n t o f loans made.
NOTE.—For more detail, see the Board's G.14 statistical release.
Securities Markets
1.36
I N T E R E S T RATES
All
Money and Capital Markets
Averages, per cent per annum
1977
Instrument
1974
1975
1977, week ending—
1976
June
July
Aug.
Sept.
Sept. 3 Sept. 10 Sept. 17 Sept. 24 Oct. 1
Money market rates
Prime commercial paper ,1
9 0 - t o 119-dav
4- to 6-month
10.05
9.87
6.26
6.33
5.24
5.35
5.42
5.49
5.38
5.41
3 Finance company paper, directly placed,
3- to 6-month 2
8.62
6.16
5.22
5.38
4 Prime bankers acceptances, 90-day 3
9.92
6.30
5.19
5.39
5 Federal funds 4
10.51
5.82
5.05
Large negotiable certificates of deposit
6
3-month secondarv market ^
7
3-month primary market ^
10.27
6.43
8 Euro-dollar deposits, 3-month ^
10.96
1
2
9
10
11
12
13
14
15
U.S. Govt, securities
Bills: 8
Market yields:
3-month
6-month
1 -year
Rates on new issue:
3-month
6-month
Notes and bonds maturing in
9 to 12 months^
Constant maturities: 10
1-year
5.75
5.84
6.09
6.17
5.88
6.00
5.89
5.99
6.13
6.19
6.15
6.22
6.25
6.30
5.38
5.71
6.04
5.88
5.88
6.05
6.13
6.13
5.43
5.88
6.16
5.93
5.98
6.19
6.22
6.30
5.39
5.42
5.90
6.14
6.02
5.97
6.05
6.10
6.35
5.26
5.15
5.42
5.35
5.46
5.32
5.91
5.82
6.18
6.04
'•5.98
'•5.88
5.97
5.84
6.10
6.02
6.22
6.00
6.37
6.29
6.97
5.57
5.78
5.80
6.30
6.57
''6.30
6.26
6.49
6.59
6.78
7.84
7.95
7.71
5.80
6.11
6.30
4.98
5.26
5.52
5.02
5.21
5.41
5.19
5.40
5.57
5.49
5.83
5.97
5.81
6.04
6.13
5.56
5.86
5.98
5.65
5.93
6.04
5.86
6.05
6.14
5.90
6.06
6.15
5.89
6.16
6.21
7.886
7.926
5.838
6.122
4.989
5.266
5.004
5.198
5.146
5.351
5.500
5.810
5.770
5.991
5.574
5.849
5.554
5.845
5.887
6.098
5.851
5.976
5.982
6.185
8.25
6.70
5.84
5.76
5.89
6.35
6.53
6.35
6.41
6.59
6.52
6.64
8.18
6.76
5.88
5.80
5.94
6.37
6.53
6.35
6.41
6.57
6.55
6.63
Capital market rates
Government notes and bonds
U.S. Treasury:
Constant maturities: i o
2-year
3-year
5-year
7-year
10-year
20-year
30-year
23
24
Notes and bonds maturing in9—
3 to 5 years
Over 10 years (long-term)
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
6.13
6.39
6.76
7.05
7.28
7.64
7.64
6.27
6.61
6.51
6.79
6.84 . 7.03
7.12
7.24
7.33
7.40
7.60
7.64
7.64
7.68
6.71
6.84
7.04
7.21
7.34
7.57
7.64
6.56
6.72
6.93
7.11
7.27
7.52
7.59
6.59
6.75
6.98
7.15
7.29
7.52
7.^0
6.73
6.84
7.05
7.22
7.35
7.57
7.64
6.76
6.86
7.06
7.22
7.36
7.59
7.66
6.82
6.94
7.10
7.26
7.40
7.61
7.68
7.81
6.99
7.55
6.98
6.94
6.78
6.58
6.99
6.67
6.97
6.90
7.00
6.92
6.94
6.84
6.90
6.86
6.90
6.93
6.94
6.93
6.95
6.98
6.97
State and local:
Moody's series: 11
25
26
27
Aaa
Baa
Bond Buyer SQxics 12.
Corporate bonds
Seasoned issues 13
A l l industries
By rating groups:
Aaa
Aa
A
Baa
33
34
35
36
Aaa utility bonds: 14
New issue
Recently offered issues.
Dividend/price ratio
Preferred stocks.,
Common stocks.
5.89
6.42
5.66
5.21
5.21
5.28
5.27
5.27
5.24
5.28
5.27
5.27
6.53
6.17
7.62
7.05
7.49
6.64
6.05
5.62
6.00
5.63
5.95
5.62
5.83
5.51
5.85
5.54
5.82
5.48
5.83
5.51
5.82
5.50
5.83
5.51
9.03
9.57
9.01
8.38
8.33
8.34
8.31
8.31
8.30
8.29
8.'30
8.34
8.57
8.84
9.20
9.50
8.83
9.17
9.65
10.61
8.43
8.75
9.09
9.75
7.95
8.19
8.46
8.91
7.94
8.12
8.40
8.87
7.98
8.17
8.40
8.82
7.92
8.15
8.37
8.80
7.92
8.14
8.39
8.80
7.90
8.14
8.38
8.78
7.89
8.14
8.35
8.79
7.92
8.15
8.36
8.79
7.96
8.18
8.39
8.82
9.33
9.34
9.40
9.41
8.48
8.49
'^8.08
8.12
8.14
8.12
8.04
8.05
8.07
8.07
7.97
8.02
8.02
8.03
8.08
8.07
8.08
8.09
8.14
8.12
8.23
4.47
8.38
4.31
7.97
3.77
7.62
4.60
7.51
4.59
7.55
4.72
7.58
4.82
7.60
'•4.78
7.68
4.72
7.51
4.80
7.57
4.88
7.56
4.57
1 Averages of the most representative daily offering rates quoted by
dealers.
2 Averages of the most representative daily offering rates published by
finance companies for varying maturities in this range.
3 Beginning Aug. 15, 1974, the rate is the average of the midpoint of
the range of daily dealer closing rates offered for domestic issues; prior
data are averages of the most representative daily offering rate quoted by
dealers.
4 Weekly figures are 7-day averages of daily effective rates for the week
ending Wednesday; the daily effective rate is an average of the rates on
a given day weighted by the volume of transactions at these rates.
5 Weekly figures are 7-day averages of the daily midpoints as determined
from the range of offering rates; monthly figures are averages of total days
in the month.
6 Posted rates, which are the annual interest rates most often quoted
on new offerings of negotiable CD's in denominations of $100,000 or
more. Rates prior to 1976 not available. Weekly figures are for Wednesday dates.
7 Averages of daily quotations for the week ending Wednesday.
8 Except for new bill issues, yields are computed from daily closing
bid prices. Yields for all bills are quoted on a bank-discount basis.
9 Unweighted averages for all outstanding notes and bonds in maturity
ranges shown, based on daily closing bid prices. "Long-term" includes
all bonds neither due nor callable in less than 10 years.
10 Yields on the more actively traded issues adjusted to constant
maturities by the U.S. Treasury, based on daily closing bid prices.
11 General obligations only, based on figures for Thursday, from
Moody's Investors Service.
12 Twenty issues of mixed quality.
13 Averages of daily figures from Moody's Investors Service.
14 Compilation of the Board of Governors of the Federal Reserve
System.
Issues included are long-term (20 years or more). New-issue yields are
based on quotations on date of offering; those on recently offered issues
(included only for first 4 weeks after termination of underwriter price
restrictions), on Friday close-of-business quotations.
A46
1.37
DomesticNonfinancialStatistics • October 1977
STOCK M A R K E T
Selected Statistics
1977
Indicator
1974
1975
1976
Mar.
Apr.
May
June
July
Aug.
Sept.
54.31
58.44
43.29
41.59
55.15
54.94
58.90
43.52
42.44
57.29
53.51
57.30
41.04
41.50
56.52
52.66
56.41
39.99
40.93
55.33
Prices and trading (averages o f daily figures)
Common stock prices
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
54.67
59.56
40.52
40.18
54.84
6 Standard & Poor's Corporation (1941-43 = 10) i . .
82.85
85.17
102.01
100.57
99.05
98.76
99.29
100.19
97.75
96.23
7 American Stock Exchange (Aug. 31,1973 = 100).
79.97
83.15
101.63
111.77
111.70
113.72
116.28
122.03
119.33
118.08
13,883
1,908
18,568
2,150
21,189
2,565
18,900
2,580
21,214
2,500
20,277
2,440
22,007
2,720
23,656
2,880
18,831
2,140
18,270
2,080
1 New Y o r k Stock Exchange (Dec. 31,1965 = 50).
2
Industrial
3
Transportation
4
Utility
5
Finance
8
9
Volume of trading (thousands o f shares)2
N e w Y o r k Stock Exchange
American Stock Exchange
53.92
58.47
41.51
40.24
54.30
53,96
58.13
43.25
41.14
54.80
Customer financing (end-of-period balances, i n millions o f dollars)
11
12
13
14
15
16
17
18
10 Regulated margin credit at brokers/dealers
and banks3
Brokers, total
M a r g i n stock^
Convertible bonds
Subscription issues
Banks, total
M a r g i n 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
7,960
204
2
845
800
30
15
9,701
8,891
8,690
199
2
810
767
25
18
9,885
9,078
8,880
196
2
807
764
25
18
10,068
9,267
9,070
196
1
801
761
25
15
10,255
9,432
9,230
198
4
823
779
25
19
10,490
9,667
9,460
204
3
823
780
24
19
10,592
9,763
9,560
196
7
829
787
23
19
19 Unregulated nonmargin stock credit at banks5
2,064
2,281
2,817
2,312
2,350
2,345
2,403
2,419
2,438
MEMO: Free credit balances at brokers^
20
Margin-account
21
Cash-account
410
1,425
475
1,525
585
1,855
605
1,720
615
1,715
625
1,710
595
1,805
600
1,860
605
1,745
Margin-account debt at brokers (percentage distribution, end o f period)
22 T o t a l
23
24
25
26
27
28
B y equity class ( i n per cent)-.7
Under 40
40-49
50-59
60-69
70-79
80 or more
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
45.4
23.0
13.9
8.8
4.6
4.3
24.0
28.8
22.3
11.6
6.9
5.3
12.0
23.0
35.0
15.0
8.7
6.0
16.5
36.8
23.2
11.6
6.7
5.3
16.5
34.1
25.4
11.8
6.8
5.4
17.8
35.6
23.0
11.0
7.0
5.0
12.9
27.0
33.0
13.3
8.0
5.8
16.2
32.9
26.4
12.0
7.0
5.5
17.4
32.0
27.0
12.0
7.0
5.0
Special miscellaneous-account balances at brokers (end o f period)
29 T o t a l balances (millions o f dollars) «.,..
D i s t r i b u t i o n by equity status (per cent)
30
N e t credit status
D e b i t status, equity o f —
31
60 per cent or m o r e
32
Less than 60 per cent
7,010
7,290
8,776
9,350
9,300
9,360
9,470
9,730
41.1
43.8
41.3
42.3
41.4
41.0
41.0
40.9
41.1
32.4
26.5
40.8
15.4
47.8
10.9
46.0
11.7
46.3
12.4
46.3
12.6
47.8
11.2
47.1
12.0
46.2
12.4
1 Effective July 1976, includes a new financial group, banks and insurance companies. W i t h this change the index includes 400 industrial
stocks (formerly 425), 20 transportation (formerly 15 rail), 40 public
u t i l i t y (formerly 60), and 40 financial.
2 Based o n trading f o r a 5 V i - h o u r day.
3 M a r g i n credit includes all credit extended to purchase or carry
stocks or related equity instruments and secured at least in part by stock.
Credit extended by brokers is end-of-month data for member firms o f
the N e w Y o r k Stock Exchange; June data for banks are universe totals;
all other data f o r banks are estimates for all commercial banks based on
data f r o m a sample o f reporting banks.
I n 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.
9,660
5 N o n m a r g i n stocks are those n o t listed o n a national securities exchange and n o t included on the Federal Reserve System's list o f over-thecounter margin stocks. A t banks, loans to purchase or carry n o n m a r g i n
stocks are unregulated; at brokers, such stocks have n o loan value.
6 Free credit balances are i n accounts w i t h no unfulfilled commitments
t o the brokers and are subject to withdrawal by customers o n demand.
7 Each customer's equity i n his collateral (market value o f collateral
less net debit balance) is expressed as a percentage o f current collateral
values.
8 Balances that may be used by customers as the margin deposit required f o r a d d i t i o n a l purchases. Balances may arise as transfers based
on loan values o f other collateral i n the customer's margin account or
deposits o f cash (usually sales proceeds) occur.
NOTE.—For table on " M a r g i n Requirements" see p. A-10, Table 1.161.
Thrift Institutions
1.38
SAVINGS INSTITUTIONS
A29
Selected Assets and Liabilities
Millions of dollars, end of period
1977
1976
1974
1975
1976
Dec.
Account
Jan.
Feb.
Mar.
Apr.
May
June
July
Aug.
Savings and loan associations
1 Assets
295,545 338,233 391,999 391,999 398,299 403,591 409,357 414,436 421,865 427,041
433,828 440,172
2 Mortgages
3 Cash and investment
249,301 278,590 323,130 323,130 326,056 329,086 333,703 338,984 344,631 350,765
'-355,991 361,710
23,251
22,993
4 Other
30,853
28,790
35,660
33,209
35,660
33,209
38,252
33,991
39,505
35,000
39,656
35,998
39,061
36,391
40,461
36,773
MO, 990
'•36,847
39,626
36,650
40,982
37,480
5 Liabilities and net worth
295,545 338,233 391,999 391,999 398,299 403,591 409,357 414,436 421,865 427,041
433,828 440,172
7 Borrowed money
8
FHLBB
9
Other
242,974 285,743 336,030 336,030 341,211 344,616 352,194 354,318 357,965 364,349
19,087
18,283
18,880
19,804
18,455
18,256
20,634
19,087
20,558
24,780
15,708
15,029
14,325
14,809
15,000 15,595
17,524
15,708
14,661
21,508
4,804
3,379
3,958
3,379
3,426
4,071
3,110
3,595
4,963
3,272
6,836
7,351
6,718
7,899
8,505
5,128
6,836
6,783
3,244
9,123
8,015
6,949
8,833
8,015
9,667
11,418
10,360 12,287
9,515
6,105
'•368,513 371,380
22,018
^20,964
'•15,724
16,250
'•5,240
5,768
'•9,332
9,648
''11,220
12,975
11 Other
12 Net worth 2
13 MEMO : Mortgage loan commitments outstandings..
18,442
19,779
22,031
22,031
22,248
22,518
22,696
22,979
23,304
23,496
7,454
10,673
14,828
14,828
15,079
16,796
19,304
21,242
22,274
22,037
1
23,799
24,151
'•21,911
21,892
Mutual savings banks
109,550 121,056 134,812 134,812 135,906 137,307 138,901 139,496 140,593 141,657 142,915
14 Assets
15
16
17
18
19
20
21
Loans:
74,891
Mortgage
3,812
Other
Securities:
2,555
U.S. Govt
930
State and local government.
22,550
Corporate and other4
2,167
Cash
2,645
Other assets
81,630
5,183
81,630
5,183
81,826
5,956
81,982
6,254
82,273
6,389
82,687
6,050
83,075
6,650
83,937
6,818
84,584
7,103
4,740
1,545
27,992
2,330
3,205
5,840
2.417
33,793
2,355
3,593
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
36,322
1,900
3,709
6,248
2,539
36,455
1,922
3,703
6,135
2,546
36,420
2,083
3,719
6,131
2,596
36,742
2,013
3,745
109,550 121,056 134,812 134,812 135,906 137,307 138,901 139,496 140,593 141,657 142,915
22 Liabilities
23
24
25
26
27
28
29
30
77,221
4,023
Deposits
Regular: 5
Ordinary savings
Time and other
Other
Other liabilities
General reserve accounts
MEMO : Mortgage loan com
mitments outstanding®..
98,701 109,873 122,877 122,877 123,864 124,728 126,687 126,938 127,791 129,200 130,000
98,221 109,291 121,961 121,961 122,874 123,721 125,624 125,731 126,587 127,955 128,632
64,286 69,653 74,535 74,535 74,621 75,038 76,260 76,336 76,384 76,976 77,012
51,620
33,935 39,639 47,426 47,426 48,253 48,683 49,364 49,395 50,203 50,979
916
916
989
1,007
1,063
582
1,207
1,204
1,368
480
1,245
2,884
2,884
2,940
3,368
2,939
2,755
3,230
3,381
3,373
2,888
2,955
9,052
9,052
9,102
9,211
9,275
8,428
9,329
9,422
9,541
7,961
9,502
2,040
1,803
2,439
2,439
2,584
2,840
3,161
3,287
3,521
A,019
1
4,049
\
Life insurance companies
31 Assets.
263,349
Securities:
Government
United States 7.
State and local.
Foreign 8
Business
Bonds
Stocks
39
40
41
42
289,304
321,552
321,552
323,407
325,094
326,753
328,786
331,028
334,386
336,651
17,942
17,942
18,198
18,443
13,758
18,470
18,500
10,900
18,475
18,916
18,579
5,368
5,368
5,537
5,592
4,736
5,546
5,544
3,372
5,396
5,628
5,400
5,594
5,594
5,657
5,709
4,508
5,732
5,758
3,667
5,797
5,813
5,847
6,980
6,980
7,004
7,142
4,514
7,192
7,198
3,861
7,282
7,366
7,441
119,637 135,317 157,246 157,246 159,213 160,463 161,214 162,816 164,126 166,859 168,498
97,717 107,256 122,984 122,984 125,910 127,603 128,596 130,057 131,568 133,497 135,262
21,920 28,061 34,262 34,262 33,303 32,860 32,618 32,759 32,558 33,362 33,236
86,234
8,331
22,862
15,385
Mortgages. .
Real estate..
Policy loans.
Other assets.
89,167
9,621
24,467
16,971
91,552
10,476
25,834
18,502
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
92,358
10,822
26,500
18,747
92,854
10,897
26,657
18,540
93,106
10,901
26,780
18,450
Credit unions
43 Total assets/liabilities and
capital
44
Federal
45
State
31,948
16,715
15,233
38,037
20,209
17,828
44,897
24,164
20,733
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
49,479
27,017
22,462
49,501
26,951
22,550
50,123
27,304
22,819
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
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
38,134
20,303
17,831
38,597
20,456
18,141
39,613
21,036
18,577
27,518
14,370
13,148
33,013
17,530
15,483
39,264
21,149
18,115
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
43,196
23,608
19,588
43,294
23,661
19,633
43,575
23,882
19,693
49 Savings
50
Federal (shares)
51
State (shares and deposit
,
,
,
For notes see bottom of page A30.
A46
1.39
DomesticNonfinancialStatistics • October 1977
F E D E R A L F I S C A L A N D F I N A N C I N G OPERATIONS
M i l l i o n s o f dollars
Fiscal year
Type o f account or operation
1975
1
2
3
4
5
U.S. Budget
Receipts i
Outlays 1,2,3
Surplus, or deficit
Trust funds
Federal funds 4
6
7
Off-budget entities surplus, or
deficit ( - )
Federal Financing Bank outlays. . .
Other 2,5
(-)
U.S. Budget plus oflf-budget, including Federal Financing Bank
Surplus, or deficit (—)
Financed b y :
Borrowing f r o m the public 3. . . .
9
Cash and monetary assets (de10
crease, or increase ( - ) )
Other 6
11
8
1976
Calendar year
Transition
quarter
(JulySept.
1976)
1976
1977
HI
H2
HI
1977
June
July
Aug.
280,997
326,105
-45,108
7,419
-52,526
299,197
365,658
-66,461
2,409
-68,870
81,686
94,659
-12,973
-1,952
-11,021
159,742
180,559
-20,816
5,503
-26,320
157,868
193,626
-35,758
-4,621
-31,137
189,410
199,482
-10,072
7,332
-17,405
43,075
32,881
10,194
1,829
8,365
24,952
33,630
-8,678
-3,348
-5,330
29,676
34,720
-5,044
2,384
-7,429
-6,389
-1,652
-5,915
-1,355
-2,575
793
-3,222
-1,119
-5,176
3,809
-2,075
-2,086
-45
-262
-1,606
-122
-1,241
-290
-53,149
-73,731
-14,755
-25,158
-37,125
-14,233
9,888
-10,406
-6,575
50,867
82,922
18,027
33,561
35,457
16,480
518
1,803
7,780
-320
2,602
-7,796
-1,396
-2,899
-373
-7,909
-495
2,153
-485
-4,666
2,420
-9,345
-1,061
6,730
1,874
2,740
-3,944
7,591
5,773
1,475
343
14,836
11,975
2,854
7
17,418
13,299
4,119
14,836
11,975
2,854
7
11,670
10,393
1,277
77,311
65,372
11,940
16,255
15,183
1,072
10,154
8,789
1,365
7,063
6,115
948
M E M O ITEMS :
12 Treasury operating balance (level, end
of period)
13
F.R. Banks
14
Tax and loan accounts
15
Other demand accounts ^
1 Effective June 1977, earned income credit payments in excess o f an
individual's tax liability, formerly treated as outlays, are classified as
income tax refunds retroactive to January 1976.
2 Outlay totals reflect the reclassification o f the E x p o r t - I m p o r t Bank
f r o m off-budget status to unified budget status.
3 E x p o r t - I m p o r t 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 E x p o r t - I m p o r t Bank are treated as debt rather
than asset sales.
4 H a l f years calculated as a residual o f total surplus/deficit and trust
fund surplus/deficit.
5 Includes Pension Benefit Guaranty Corp., Postal Service Fund, Rural
Electrification and Telephone Revolving Fund, Rural Telephone Bank,
and Housing for the Elderly or Handicapped Fund.
6 Includes: Public debt accrued interest payable to the public; deposit
funds; miscellaneous liability (including checks outstanding) and asset
accounts; seignorage; increment on g o l d ; net gain/loss for U.S. currency
valuation adjustment; net gain/loss for I M F valuation adjustment.
7 Excludes the gold balance but includes deposits i n certain commercial
depositories that have been converted f r o m a time deposit to a demand
deposit basis to permit greater flexibility in Treasury cash management.
SOURCE.—"Monthly Treasury Statement o f Receipts and Outlays o f
the U.S. Government," Treasury Bulletin, and U.S. Budget, Fiscal Year
1978.
N O T E S T O T A B L E 1.38
1 Holdings o f stock o f the Federal home loan banks are included in
"other assets."
2 Includes net undistributed income, which is accrued by most, but not
all, associations.
3 Excludes figures for loans i n process, which are shown as a liability.
4 Includes securities o f foreign governments and international organizations and nonguaranteed issues o f U.S. Govt, agencies.
5 Excludes checking, club, and school accounts.
6 Commitments outstanding (including loans i n process) o f banks in
New Y o r k State as reported to the Savings Banks Assn. o f the State o f
New Y o r k .
7 Direct and guaranteed obligations. Excludes Federal agency issues
not guaranteed, which are shown i n this table under "business" securities.
8 Issues o f foreign governments and their subdivisions and bonds o f the
International Bank for Reconstruction and Development.
NOTE.—Savings and loan associations: Estimates by the F H L B B for
all associations i n the United States. D a t a 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 o f N a t i o n a l Association o f M u t u a l
Savings Banks for all savings banks i n the United States. D a t a are reported on a gross-of-valuation-reserves basis.
Life insurance companies: Estimates o f the Institute o f Life Insurance
f o r all life insurance companies i n the United States. A n n u a l figures are
annual-statement asset values, w i t h bonds carried on an amortized basis
and stocks at year-end market value. Adjustments f o r interest due and
accrued and for differences between market and b o o k values are not
made on each item separately but are included, i n total, i n "other assets."
Credit unions: Estimates by the N a t i o n a l Credit U n i o n Administration
for a group o f Federal and State-chartered credit unions that account f o r
about 30 per cent o f credit u n i o n assets. Figures are preliminary and
revised annually to incorporate recent benchmark data.
Federal Finance
1.40
A31
U.S. B U D G E T RECEIPTS A N D O U T L A Y S
Millions o f dollars
Fiscal year
Source or type
1975
1976
Calendar year
Transition
quarter
(JulySept.
1976)
1976
HI
1977
H2
HI
1977
June
July
Aug.
Receipts
1
A l l sources i
280,997
300,005
81,773
160,552
157,961
190,238
43,075
24,952
29,676
2
3
4
122,386
122,071
131,603
123,408
38,801
32,949
65,767
63,859
75,094
68,023
78,775
73,303
17,949
12,175
12,438
12,240
12,725
12,429
32
34,296
34,013
34
35,528
27,367
1
6,809
958
33
27,879
26,004
J
8,426
1,356
28
32,967
27,521
4
6,272
501
923
726
660
364
45,747
5,125
46,783
5,374
9,808
1,348
27,973
2,639
20,706
2,886
37,133
2,324
14,758
379
1,968
430
1,288
479
13
14
Individual income taxes, net
Withheld
Presidential Election Campaign
Fund
Nonwithheld
Refunds i
Corporation income taxes:
Gross receipts
Refunds
Social insurance taxes and contributions, net
Payroll employment taxes and
contributions 2
Self-employment taxes and
contributions 3
Unemployment insurance
Other net receipts 4
15
16
17
18
Excise taxes
Customs
Estate and gift
Miscellaneous receipts 5
5
6
7
8
9
10
11
12
86,441
92,714
25,760
51,828
47,596
58,098
7,696
7,961
12,958
71,789
76,391
21,534
40,947
40,427
45,241
6,709
6,725
10,347
3,417
6,771
4,466
3,518
8,054
4,752
269
2,698
1,259
3,250
5,193
2,438
286
4,379
2,504
3,688
6,'576
2,594
335
228
424
800
437
2,161
450
16,551
3,676
4,611
6,711
16,963
4,014
5,216
8,026
4,473
1,212
1,455
1,612
8,204
2,147
2,643
4,630
8,910
2,361
2,943
3,236
8,431
2,518
4,333
3,269
1,530
504
437
581
1,567
446
505
498
1,523
543
547
572
Outlays
19
A l l types 1,6
326,105
366,466
94,746
181,369
193,719
200,310
32,881
33,630
34,720
20
21
22
National defense
International affairs 6
General science, space, and
technology
Natural resources, environment.
and energy
Agriculture
86,585
5,862
89,996
5,067
22,518
1,997
44,052
2,668
45,002
3,028
48,721
2,522
8,404
439
8,004
463
8,412
497
3,989
4,370
1,161
1,708
2,377
2,108
362
357
420
9,537
1,660
11,282
2,502
3,324
584
6,900
417
7,206
2,019
6,855
2,628
1,421
256
1,266
334
1,404
740
Commerce and transportation
Community and regional
development
Education, training, employment,
and social services
Health
Income security i
16,010
17,248
4,700
5,766
9,643
5,945
1,419
978
988
4,431
5,300
1,530
2,411
3,192
3,149
670
627
875
15,248
27,647
108,605
18,167
33,448
127,406
5,013
8,720
32,796
9,116
17,008
65,336
9,083
19,329
65,456
9,775
18,654
70,745
1,772
3,398
11,129
1,656
3,115
11,590
1,970
3,469
11,598
16,597
2,942
3,089
18,432
3,320
2,927
3,962
859
878
9,450
1,784
870
8,542
1,839
1,734
9,382
1,783
1,587
1,225
316
324
1,338
291
198
1,430
269
347
7,005
30,974
-14,075
7,119
34,589
-14,704
2,024
7,246
-2,567
3,664
18,560
-8,340
4,729
18,409
-7,869
4,333
18,927
-6,803
47
5,908
-4,211
2,257
2,494
-1,338
44
2,844
-587
23
24
25
26
27
28
29
30
31
32
33
34
35
Veterans benefits and services
Law enforcement and justice
General government
Revenue sharing and general
purpose fiscal assistance
Interest 7
Undistributed offsetting receipts 7,8
1 Effective June 1977, earned income credit payments in excess o f an
individual's tax liability, formerly treated as outlays, are classified as income tax refunds retroactive to January 1976.
2 Old-age, disability and hospital insurance, and Railroad Retirement
accounts.
3 Old-age, disability, and hospital insurance.
4 Supplementary medical insurance premiums, Federal employee retirement contributions, and Civil Service retirement and disability fund.
5 Deposits o f earnings by F.R. Banks and other miscellaneous receipts.
6 Outlay totals reflect the reclassification of the Export-Import Bank
from off-budget status to unified budget status. Export-Import 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-Import Bank, are treated as debt rather than asset sales,
7 Effective September 1976, "Interest" and "Undistributed Offsetting
Receipts" reflect the accounting conversion for the interest on special
issues for U.S. Govt, accounts from an accrual basis to a cash basis.
8 Consists o f interest received by trust funds, rents and royalties on
the Outer Continental Shelf, and U.S. Govt, contributions for employee retirement.
A46
1.41
DomesticNonfinancialStatistics • October 1977
F E D E R A L D E B T SUBJECT T O S T A T U T O R Y L I M I T A T I O N
Billions o f dollars
1974
1975
1976
1977
Item
June 30
Dec. 31
June 30
Dec. 31
June 30
Sept. 30
Dec. 31
M a r . 31
June 30
1 Federal debt outstanding
486.2
504.0
544.1
587.6
631.9
2 646.4
665.5
680.1
685.2
2 Public debt securities
3
H e l d by public
4
H e l d by agencies
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
674.4
523.2
151.2
12.0
10.0
2.0
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
29.7
1.9
12.0
10.0
1.9
10.9
9.1
1.8
10.8
9.0
1.8
6
7
H e l d by public
H e l d by agencies
476.0
493.0
534.2
577.8
621.6
635.8
654.7
670.3
675.6
9 Public debt securities
10 Other debt 1
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
673.8
1.7
11 MEMO: Statutory debt l i m i t
495.0
495.0
577.0
595.0
636.0
636.0
682.0
682.0
700.0
8 Debt subject to statutory l i m i t
1 Includes guaranteed debt o f Govt., agencies, specified participation
certificates, notes to international lending organizations, and D i s t r i c t o f
C o l u m b i a stadium bonds.
2 Gross Federal debt and Agency debt held by the public increased
1.42
GROSS P U B L I C D E B T O F U.S. T R E A S U R Y
$0.5 b i l l i o n due to a retroactive reclassification o f the E x p o r t - I m p o r t Bank
certificates o f beneficial interest f r o m loan asset sales to debt, effective
July 1, 1975.
NOTE.—Data f r o m Treasury Bulletin (U.S. Treasury Dept.).
Types and Ownership
Billions o f dollars, end o f period
1977
T y p e and holder
1973
1974
1975
1976
May
June
July
Aug.
Sept.
469.9
492.7
576.6
653.5
672.1
674.4
673.9
685.2
698.8
2
3
4
5
6
7
8
9
10
11
B y type:
Interest-bearing debt
Marketable
Bills
Notes
Bonds...
Nonmarketable^
Convertible bonds 3
Foreign issues4
Savings bonds and notes
G o v t , account series 5
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
671.0
431.5
157.9
230.2
43.3
239.5
2.2
21.8
74.3
133.0
673.4
431.1
155.1
232.9
43.2
242.2
2.2
21.7
74.7
134.8
671.4
430.2
154.2
231.4
44.7
241.1
2.2
21.5
75.2
132.4
684.1
438.1
154.3
238.1
45.8
245.9
2.2
21.4
75.5
136.3
697.6
443.5
156.1
241.7
45.7
254.1
2.2
21.8
75.8
140.1
12
13
By holder:6
U.S. G o v t , agencies and trust funds
F.R.Banks..
129.6
78.5
141.2
80.5
139.3
87.9
147.1
97.0
149.4
97.4
151.2
102.2
148.7
98.6
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
103.8
5.7
12.5
26.5
41.6
425.3
102.2
6.1
12.9
25.8
49.1
421.0
'•102.4
6.0
14.2
23.8
'•47.8
426.5
100.1
6.0
14.1
23.5
47.8
1 T o t a l gross public debti
14
15
16
17
18
19
Private investors
Commercial banks
M u t u a l savings banks
Insurance companies
Other corporations
State and local governments
20
21
Individuals:
Savings bonds
Other securities
60.3
16.9
63.4
21.5
67.3
24.0
72.0
28.8
'•74.1
'•28.6
'•74.4
'•28.6
74.9
28.4
22
23
Foreign and international 7
Other miscellaneous investors »,..
55.5
19.3
58.4
23.2
66.5
38.6
78.1
'•40.5
86.0
'•40.7
'•87.9
36.0
90.2
41.5
1 Includes $1.2 b i l l i o n o f non-interest-bearing debt ( o f which $700
m i l l i o n on Sept. 30, 1977, was n o t subject to statutory debt limitations).
2 Includes (not shown separately): Securities issued t o the R u r a l
Electrification A d m i n i s t r a t i o n and to State and local governments, depositary bonds, retirement plan bonds, and individual retirement bonds.
3 These nonmarketable bonds, also k n o w n as Investment Series B
Bonds, may be exchanged (or converted) at the owner's o p t i o n for l ^ i
per cent, 5-year marketable Treasury notes. Convertible bonds that have
been so exchanged are removed f r o m this category and recorded i n the
notes category above,
4 Nonmarketable foreign government dollar-denominated and foreign
currency denominated series.
5 H e l d only by U.S. G o v t , agencies and trust funds.
6 D a t a f o r F . R . Banks and U.S. Govt, agencies and trust funds are
actual holdings; data f o r other groups are Treasury estimates.
7 Consists o f the investments o f foreign balances and international
accounts i n the U n i t e d States. Beginning w i t h July 1974, the figures exclude
non-interest-bearing notes issued t o the International M o n e t a r y F u n d .
8 Includes savings and l o a n associations, nonprofit institutions, corporate pension trust funds, dealers and brokers, certain G o v t , deposit
accounts, and Govt.-sponsored agencies.
NOTE.—Gross public debt excludes guaranteed agency securities and,
beginning i n July 1974, includes Federal Financing Bank security issues.
D a t a by type o f security f r o m Monthly Statement of the Public Debt of
the United States (U.S. Treasury D e p t . ) ; data by holder f r o m Treasury
Bulletin.
Federal Finance
1.43
U.S. G O V E R N M E N T M A R K E T A B L E SECURITIES
A33
Ownership, by maturity
Par value; millions o f dollars, end o f period
1977
Type o f holder
1975
1977
1976
1975
July
Aug.
July
A l l maturities
1 A l l holders
2 U.S. G o v t , agencies and trust funds
3 F. R. Banks
4 Private investors
5
Commercial banks
6
M u t u a l savings banks
8
9
10
11
Nonfinancial corporations
Savings and loan associations
State and local governments
A l l others
13 U.S. G o v t , agencies and trust funds
14 F. R. Banks
15 Private investors
16
Commercial banks
17
M u t u a l savings banks
19
20
21
22
Nonfinancial corporations
Savings and loan associations
State and local governments
A l l others
363,191
421,276
430,248
438,146
112,270
141,132
141,650
144,790
19,397
87,934
16,485
96,971
15,425
98,646
14,709
98,436
7,058
30,518
6,141
31,249
5,951
30,443
5,948
28,161
255,860
64,398
3,300
7,565
9,365
IJ^-i
9,285
159,154
307,820
78,262
4,072
10,284
14,193
4,576
12,252
184,182
316,357
75,749
4,382
11,196
11,835
5,069
14,064
193,882
355,001
74,227
4,402
11,177
12,349
5,294
17,219
200,333
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
105,256
39,389
2,109
4,358
3,142
2,648
3,794
49,816
110,681
38,945
2,136
4,253
2,811
2,764
4,271
55,501
5 to 10 years
199,692
211,035
212,457
216,141
26,436
43,045
141,650
45,879
2,769
46,845
2,012
51,569
1,811
50,314
1,024
53,185
3,283
6,463
2,879
9,148
2,139
11,285
2,139
10,479
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
160,332
28,932
1,297
1,750
8,186
2,199
7,190
110,777
161,932
27,789
1,310
1,975
9,050
2,298
9,381
110,129
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
32,521
6,514
662
2,999
310
145
1,291
20,600
33,261
6,607
641
2,952
287
147
1,256
21,370
Bills, w i t h i n 1 year
23 A l l holders
24 U.S. G o v t , agencies and trust funds
25 F. R. Banks
26 Private investors
28
M u t u a l savings banks
30
Nonfinancial corporations
32
33
State and local governments
A l l others
10 to 20 years
157,483
163,992
154,227
154,283
14,264
11,865
13,076
13,037
207
38,018
449
41,279
270
39,700
270
40,440
4,233
1,507
3,102
1,363
3,102
1,534
3,102
1,423
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
114,257
10,883
428
113,
6,449
1,090
5,645
88,989
113,573
9,546
397
964
6,962
1,148
7,751
86,806
8,524
552
232
1,154
61
82
896
5,546
7,400
339
139
1,114
14264
718
4,884
8,440
585
150
1,255
149
63
620
5,618
8,512
545
151
1,305
131
70
842
5,468
Other, w i t h i n 1 year
34 A l l holders
35 U.S. G o v t , agencies and trust funds
36 F. R. Banks
37 Private investors
38
Commercial banks
39
M u t u a l savings banks
40
Insurance companies
41
Nonfinancial corporations
42
Savings and loan associations
43
State and local governments
44
A l l others
Over 20 years
42,209
47,043
58,230
61,858
10,530
14,200
17,119
18,299
2,562
8,827
1,563
10,290
1,541
10,614
754
12,745
2,053
2,601
2,350
3,642
2,421
5,070
2,495
5,188
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
46,075
18,049
869
977
1,737
1,109
1,545
21,788
48,359
18,243
913
1,011
2,088
1,150
1,630
23,323
5,876
271
112
436
57
22
558
4,420
8,208
All
143
548
55
13
904
6,120
9,628
329
163
835
48
13
1,169
7,071
10,'616
340
164
692
70
16
1,468
7,865
NOTE.—Direct public issues only. Based on Treasury Survey o f Ownership f r o m Treasury Bulletin (U.S. Treasury Dept.).
Data complete for U.S. Govt, agencies and trust funds and F . R . Banks,
but data f o r other groups include only holdings o f those institutions
that report. The following figures show, f o r each category, the number
and proportion reporting as o f Aug. 31, 1977; (1) 5,490 commercial
Aug.
1 to 5 years
Total, within 1 year
12 A l l holders
1976
banks, 467 mutual savings banks, and 727 insurance companies, each
about 90 per cent; (2) 441 nonfinancial corporations and 486 savings
and loan assns., each about 50 per cent; and (3) 496 State and local
govts., about 40 per cent.
" A l l others," a residual, includes holdings o f all those n o t reporting
in the Treasury Survey, including investor groups not listed separately.
A46
1.44
DomesticNonfinancialStatistics • October 1977
U.S. G O V E R N M E N T SECURITIES D E A L E R S
Transactions
Par value; averages o f daily figures, in millions o f dollars
1977
1977, week ending Wednesday—
Item
1974
1975
1976
June
1 U.S. Govt, securities
2
3
4
5
6
By m a t u r i t y :
Bills
Other w i t h i n 1 year
1-5 years
5-10 years
Over 10 years
July
Aug.*"
A u g . 17
Aug. 24
A u g . 31
Sept. 7
Sept. 14
Sept. 21
3,579
6,027
10,449
8,683
9,078
10,288
10,217
9,961
10,225
9,118
10,417
9,665
2,550
250
465
256
58
3,889
223
1,414
363
138
6,676
210
2,317
1,019
229
5,021
215
2,059
952
436
5,905
194
1,790
752
438
6,208
339
2,216
1,079
446
6,725
343
1,900
931
318
6,310
331
1,993
913
413
5,559
348
2,567
1,170
581
5,231
180
2,535
823
350
6,724
169
2,266
895
363
6,928
210
1,491
686
350
By type o f customer:
U.S. G o v t , securities
dealers
8
U.S. Govt, securities
brokers
9
Commercial banks
10
A l l others 1
652
885
1,360
1,030
962
1,106
914
1,165
1,335
924
959
1,312
965
998
964
1,750
1,451
1,941
3,407
2,426
3,257
2,529
1,965
3,159
3,007
2,124
2,986
3,439
2,274
3,469
3,829
2,395
3,080
3,015
2,237
3,544
3,186
2,171
3,533
2,601
2,089
3,504
4,486
2,052
2,920
'•3,171
1,792
'•3,390
11 Federal agency securities.. . .
965
1,043
1,548
2,138
a , 543
1,863
1,499
2,627
2,307
1,570
1,691
1,633
7
1 Includes—among others—all other dealers and brokers in commodities and securities, foreign banking agencies, and the F.R. System.
NOTE.—Averages for transactions are based on number o f trading days
in the period.
1.45
U.S. G O V E R N M E N T SECURITIES D E A L E R S
Transactions are market purchases and sales o f U.S. Govt, securities
dealers reporting to the F . R . Bank o f New Y o r k . The figures exclude
allotments of, and exchanges for, new U.S. G o v t , securities, redemptions
o f called or matured securities, or purchases or sales o f securities under
repurchase, reverse repurchase (resale), or similar contracts.
Positions and Sources of Financing
Par value; averages o f daily figures, i n millions o f dollars
1977
Item
1974
1975
1977, week ending Wednesday—
1976
June
July
Aug.
July 27 '•
Aug. 3
A u g . 10
Aug. 17
Aug. 24
Aug. 31
Positions 2
1 U.S. Govt, securities
2,580
5,884
7,592
5,757
4,724
'^2,951
4,232
2,197
2,692
2,036
3,514
3,979
2
3
4
5
6
1,932
-6
265
302
88
4,297
265
886
300
136
6,290
188
515
402
198
5,538
15
82
23
99
5,034
-7
-291
-192
181
3,883
-191
-661
r79
-1
4,866
-66
-361
-254
47
3,462
-47
-753
-372
-94
3,186
-175
-616
262
35
3,481
-177
-1,000
-233
-35
4,745
-255
-848
-141
13
4,358
-230
-185
-17
53
943
729
1,027
'•776
^522
692
329
311
336
712
877
Bills
Other w i t h i n 1 year
1-5 years
5-10 years
Over 10 years
7 Federal agency securities
1,212
1
1
Sources o f
8 A l l sources
9
10
11
12
Commercial banks:
N e w Y o r k City
Outside New Y o r k C i t y . . .
Corporations!
A l l others
3,977
6,666
8,715
10,791
9,532
8,738
8,826
7,675
8,454
8,757
9,215
9,122
1,032
1,064
459
1,423
1,621
1,466
842
2,738
1,896
1,660
1,479
3,681
1,583
2,179
2,769
4,261
1,289
1,574
2,307
4,361
808
1,824
2,347
3,759
960
1,456
2,403
4,007
52
1,374
2,276
3,972
1,274
1,635
2,060
3,486
705
1,705
2,259
4,088
869
2,289
2,557
3,500
599
1,889
2,626
4,007
1 A l l 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 commitment, that is, trade-date basis, including any such securities that have been
sold under agreements to repurchase. The maturities o f 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 agreements to resell.
3 Total amounts outstanding o f funds borrowed by nonbank dealer
financings
firms and dealer departments o f commercial banks against U.S. Govt,
and Federal agency securities (through b o t h collateral loans and sales
under agreements to repurchase), plus internal funds used by bank dealer
departments to finance positions i n such securities. Borrowings against
securities held under agreement to resell are excluded where the borrowing
contract and the agreement to resell are equal in amount and m a t u r i t y ,
that is, a matched agreement.
NOTE.—Averages for positions are based on number o f trading days
i n the period; those for financing, on the number o f calendar days i n the
period.
Federal Finance
1.46
F E D E R A L A N D F E D E R A L L Y SPONSORED C R E D I T A G E N C I E S
A35
Debt Outstanding
Millions of dollars, end of period
1977
Agency
1973
1974
1975
Feb.
Mar.
Apr.
May
July
1 Federal and Federally sponsored agencies
71,594
89,381
97,680
102,961
103,673
105,579
105,823
107,152
108,243
2 Federal agencies
3
Defense Department 1
11,554
1,439
2,625
415
12,719
1,312
2,893
440
19,046
22,307
22,462
7,188
564
8,580
581
22,413
1,077
8,615
592
598
22,316
1,059
8,596
594
22,220
1,044
8,742
588
22,232
1,035
8.742
583
4,390
250
2,435
4,280
721
3,070
3
4,200
1,750
3,915
209
3 3,845
2,998
5,005
212
3,845
2,998
5,070
216
3,803
2,998
5,155
230
3,803
2,856
5,175
233
3,803
2,431
5,370
242
3,768
2,431
5,410
263
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
80,654
16,587
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
84,248
16,851
'-1,698
30,843
18,137
11,174
5,113
430
2
84,932
16,921
1,698
31,378
18,137
11,418
4,948
430
2
86,011
17,328
1,698
31,566
18,719
11,654
4,604
440
2
4,474
17,154
30,328
31,312
30,823
31,007
30,820
32,443
4,595
1,500
310
1,840
209
5,237
2,748
410
3,180
212
5,273
2,748
410
3,245
216
5,273
2,748
415
3,330
230
5,273
5,420
500
220
895
3
430
3,545
242
5,420
2,181
440
3,585
263
7,000
566
1,134
11,450
1,584
5,507
11,750
1,677
5,993
11,750
1,806
5,271
12,250
1,864
5,001
12,900
2,042
4,060
13,650
2,105
4,799
4
Export-Import Bank2,3
5
6
Federal Housing Administration4
Government National Mortgage Association
participation certificates 5
Postal Service6
Tennessee Valley Authority
United States Railway Association6
7
8
9
10 Federally sponsored agencies
11
Federal home loan banks
Federal Home Loan Mortgage Corporation.
Federal National Mortgage Association
Federal land banks
Federal intermediate credit banks
Banks for cooperatives
Student Loan Marketing Association7
Other
1,220
1,086
9^7
1,068
8,610
M E M O ITEMS :
19 Federal Financing Bank debt6,8
Lending to Federal and Federally sponsored
agencies:
20
Export-Import Bank 3
21
Postal Services
22
Student Loan Marketing Association7
23
Tennessee Valley Authority
24
United States Railway Association^
25
26
27
Other lending:9
Farmers Home Administration
Rural Electrification Administration
Other
2,500
356
1 Consists of mortgages assumed by the Defense Department between
1957 and 1963 under family housing and homeowners assistance programs.
2 Includes participation certificates reclassified as debt beginning
Oct. 1, 1976.
3 Off-budget Aug. 17, 1974, through Sept. 30,1976; on-budget thereafter.
Consists of debentures issued in payment of Federal Housing Administration insurance claims. Once issued, these securities may be sold
privately on the securities market.
5 Certificates of participation issued prior to fiscal 1969 by the Government National Mortgage Association acting as trustee for the Farmers
Home Administration; Department of Health, Education, and Welfare;
Department of Housing and Urban Development; Small Business Administration; and the Veterans Administration.
6 Oflf-budget.
2,606
430
3,350
233
2,181
7 Unlike other Federally sponsored agencies, the Student Loan
Marketing Association may borrow from the Federal Financing Bank
(FFB) since its obligations are guaranteed by the Department of Health,
Education, and Welfare.
8 The FFB, which began operations in 1974, is authorized to purchase
or sell obligations issued, sold, or guaranteed by other Federal agencies.
Since FFB incurs debt solely for the purpose of lending to other agencies,
its debt is not included in the main portion of the table in order to avoid
double counting.
9 Includes FFB purchases of agency assets and guaranteed loans;
the latter contain loans guaranteed by numerous agencies with the
guarantees of any particular agency being generally small. The Farmers
Home Administration item consists exclusively of agency assets, while the
Rural Electrification Administration entry contains both agency assets
and guaranteed loans.
A46
1.47
DomesticNonfinancialStatistics • October 1977
N E W S E C U R I T Y ISSUES
State and Local Government and Corporate
Millions of dollars
1977
1974
Type of issue or issuer,
or use
1975
1976
Jan.
Mar.
Feb.
Apr.
May
June
State and local government
24,315
30,607
35,313
3,429
3,150
4,140
3,566
4,308
5,347
13,563
10,212
461
79
16,020
14,511
18,040
17,140
1,867
1,552
1,624
1,518
1,812
2,323
1,701
1,862
2,032
2,272
2,265
3,079
76
133
10
8
5
3
4
3
By type of issuer:
6
State
7
Special district and statutory authority
8
Municipalities, counties, townships, school d i s t r i c t s . . . .
4,784
8,638
10,817
7,438
12,441
10,660
7,054
15,304
12,845
468
1,786
1,166
441
1,335
1,367
705
1,818
1,612
769
1,388
1,407
875
1,836
1,593
1,476
1,873
1.994
9 Issues for new capital, total
23,508
29,495
32,108
3,084
3,019
3,209
2,939
3,781
4,456
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
489
104
1,050
483
15
943
502
410
935
580
12
580
472
180
804
600
38
1,115
249
119
703
658
42
1,168
497
508
1,235
438
130
973
807
218
1,202
816
23
1,390
1 All issues, new and refunding i
2
3
4
5
10
11
12
13
14
15
By type of issue:
General obligation
Revenue
Housine Assistance Administration 2
U.S. Govt, loans
By use of proceeds:
Education
Transportation
Utilities and conservation
Social welfare
Industrial aid
Other purposes
Corporate
16 All issues 3
38,313
53,619
53,356
3,989
2,708
5,495
3,639
3,735
5,321
17 Bonds
32,066
42,756
42,262
3,387
1,888
4,300
3,048
2,487
4,286
25,903
6,160
32,583
10,172
26,453
15,808
2,786
601
1,102
786
2,610
1,690
1,961
1,087
1,600
887
2,045
2,241
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
817
743
165
634
50
979
568
346
47
210
290
426
1,049
454
243
756
808
991
1,128
180
129
602
324
684
644
112
169
581
294
688
1,006
363
25
1,237
371
1,284
26 Stocks
6,247
10,863
11,094
602
820
1,195
591
1,248
1,035
By type:
27
Preferred
28
Common
2,253
3,994
3,458
7,405
2,789
8,305
103
499
128
692
520
675
163
428
212
1,036
332
703
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
89
136
175
94
220
114
8
126
352
225
267
60
76
114
125
842
172
10
75
1,031
176
437
103
229
45
45
18
19
By type of offering:
Public
Private placement
20
21
22
23
24
25
By industry group:
Manufacturing
Commercial and miscellaneous
Transportation
Public utility
Communication
Real estate and financial
29
30
31
32
33
34
By industry group:
Manufacturing
Commercial and miscellaneous
Transportation
Public utility
Communication
Real estate and financial
.
...
1 Par amounts of long-term issues based on date of sale.
2 Only bonds sold pursuant to the 1949 Housing Act, which are secured
by contract requiring the Housing Assistance Administration to make
annual contributions to the local authority.
3 Figures, which represent gross proceeds of issues maturing in more
than 1 year, sold for cash in the United States, are principal amount or
number of units multiplied by offering price. Excludes offerings of less
25
38
84
than $100,000, secondary offerings, undefined or exempted issues as
defined in the Securities Act of 1933, employee stock plans, investment
companies other than closed-end, intracorporate transactions, and sales to
foreigners.
SOURCES.—State and local government securities, Securities Industry
Association; corporate securities. Securities and Exchange Commission.
Corporate Finance
1.48
C O R P O R A T E SECURITIES
A37
Net Change in Amounts Outstanding
M i l l i o n s o f dollars
1976
1975
Source o f change, or industry
1974
1975
1976
Q2
Q3
Q4
Ql
Q2
Q3
Q4
A l l issues 1
1 New issues
2 Retirements
3 Net change
39,344
9,935
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 Retirements
6 Net change: Total
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
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
-99
2,218
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
17
-135
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
744
117
17
932
19
203
7
8
9
10
11
12
By industry :
Manufacturing
Commercial and other 2
Transportation, including railroad
Public utility
Communication
Real estate and financial
Common and preferred stock
13 N e w issues
14 Retirements
15 Net change: Total
16
17
18
19
20
21
By industry:
Manufacturing
Commercial and other 2
Transportation, including railroad
Public utility
Communication
Real estate and financial
- 2 0
3,834
398
207
1 Excludes issues o f investment companies.
2 Extractive and commercial and miscellaneous companies.
NOTE.—Securities and Exchange Commission estimates o f cash transactions only, as published i n the Commission's Statistical
Bulletin.
1.49
OPEN-END INVESTMENT COMPANIES
- 2 1
- 6 8
239
49
1,765
53
153
New issues and retirements exclude foreign sales and include sales o f
securities held by affiliated companies, special offerings to employees,
new stock issues, and cash proceeds connected w i t h conversions o f bonds
into stocks. Retirements, defined i n the same way, include securities
retired w i t h internal funds or w i t h proceeds o f issues for that purpose.
Net Sales and Asset Position
M i l l i o n s o f dollars
1977
Item
1975
1976
Feb.
Mar.
Apr.
May
June
July
Aug.
INVESTMENT COMPANIES
excluding money market funds
1
2
3
Sales o f o w n shares i
Redemptions o f o w n shares 2
Net sales
4
5
6
Assets 3
Cash position^
Other
3,302
3,686
-384
4,226
6,802
2,496
423
463
-40
463
553
-90
558
468
63
421
531
-110
639
510
129
573
515
58
501
493
8
42,179
3,748
38,431
47,537
2,747
44,790
45,040
3,260
41,780
44,516
3,474
41,042
44,862
2,776
42,086
44,403
2,859
41,544
46,255
2,901
43,354
45,651
3,068
42,583
45,038
3,135
41,903
1 Includes reinvestment o f investment income dividends. Excludes
reinvestment o f capital gains distributions and share issue o f conversions
f r o m one f u n d to another i n the same group.
2 Excludes share redemption resulting f r o m conversions f r o m one fund
to another i n the same group.
3 M a r k e t value at end o f period, less current liabilities.
4 Also includes all U.S. Govt, securities and other short-term debt
securities.
NOTE.—Investment Company Institute data based o n reports o f members, which comprise substantially all open-end investment companies
registered w i t h the Securities and Exchange Commission. D a t a reflect
newly formed companies after their i n i t i a l ofifering o f securities.
A38
1.50
Domestic Financial Statistics • October 1977
C O R P O R A T E PROFITS A N D T H E I R D I S T R I B U T I O N
Billions o f dollars; quarterly data are at seasonally adjusted annual rates.
1975
Account
1975
1974
1976
Q4
1 Profits before tax
1977
1976
Q1
Q2
Q3
Q4
Q2r
Ql
126.9
123.5
156.9
141.0
153.5
159.2
159.9
154.8
161.7
174.0
2 Profits tax liability
3 Profits after tax
52.4
74.5
50.2
73.3
64.7
92.2
57.9
83.1
63.1
90.4
66.1
93.1
65.9
94.0
63.9
90.9
64.4
97.3
69.7
104.3
4 Dividends
5 Undistributed profits
31.0
43.5
32.4
40.9
35.8
56.4
32.5
50.6
33.6
56.8
35.0
58.1
36.0
58.0
38.4
52.5
'•38.5
'•58.8
40.3
64.0
81.6
125.1
89.5
130.4
97.2
153.6
92.2
142.8
94.1
150.9
95.9
154.0
98.2
156.2
100.4
152.9
102.0
'•160.8
103.5
167.5
6 Capital consumption allowances
7 Net cash flow.
SOURCE.—Survey of Current Business (U.S. Dept. o f Commerce).
1.51
N O N F I N A N C I A L CORPORATIONS
Current Assets and Liabilities
Billions o f dollars, end o f period
1975
Account
1972
1971
Q4
1 Current assets
Cash
U.S. G o v t , securities
Notes and accounts receivable
U.S. G o v t . i
Other
Inventories
Other
2
3
4
5
6
7
8
9 Current liabilities
10
11
12
13
14
Notes and accounts payable
U.S. G o v t . i
Other
Accrued Federal income taxes
Other
15 Net working capital
1977
Ql
Q2
Q3
Q4
Ql
529.4
574.4
643.2
712.2
731.6
753.5
775.4
791.8
816.8
845.3
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
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
75.0
27.3
346.6
4.7
342.0
322.1
74.3
326.0
352.2
401.0
450.6
457.5
465.9
475.9
484.1
499.9
516.6
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
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
309.0
6.8
302.2
28.6
179.0
203.6
222.2
242.3
261.5
274.1
287.6
299.5
307.7
316.9
328.7
1 Receivables f r o m , and payables to, the U.S. Govt, exclude amounts
offset against each other on corporations' books.
1.52
1976
1974
1973
SOURCE.—Estimates published i n Statistical
Exchange Commission).
Bulletin
(Securities and
BUSINESS E X P E N D I T U R E S on New Plant and Equipment
Billions o f dollars; quarterly data are at seasonally adjusted annual rates.
1976
1975
Industry
1 A l l industries
Manufacturing
2
Durable goods industries
3
Nondurable goods industries
4
5
6
7
8
9
10
Nonmanufacturing
Mining
Transportation :
Railroad
Air
Other
Public utilities:
Electric
Gas and other
Communication
Commercial and other i
1977
1976
Q4
Ql
Q2
Q3
Q4
Ql
Q2
Q3 2
Q4 2
120.82
111.80
114.72
118.12
122.55
125.22
130.16
134.24
138.43
142.02
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
27.26
32.19
27.96
33.40
29.74
34.58
3.98
3.82
3.83
3.83
4.21
4.13
4.24
4.49
4.52
4.54
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
2.57
1.43
2.96
2.74
1.84
2.18
3.19
2.05
1.72
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
21.14
4.16
15.32
22.73
22.24
4.47
22.72
4.78
1 39.08
38.70
1 Includes trade, service, construction, finance, and insurance.
agriculture; real estate operators; medical, legal, educational, and cultural
service; and nonprofit organizations.
NOTE.—Estimates for corporate and noncorporate business, excluding
SOURCE.—Survey of Current Business (U.S. Dept. o f Commerce).
Corporate Finance
1.521
DOMESTIC F I N A N C E COMPANIES
A39
Assets and Liabilities
Billions of dollars, end of period
1976
1975
1972
Account
1973
1977
1974
Q4
Ql
Q2
Q3
Q4
Ql
Q2
ASSETS
1
2
3
4
5
6
7
8
Accounts receivable, gross
Consumer
Business
Total
LESS: Reserves for unearned income and losses
Accounts receivable, net
Cash and bank deposits
Securities
A l l other
9 Total assets
31.9
27.4
59.3
7.4
51.9
2.8
.9
10.0
35.4
32.3
67.7
8.4
59.3
2.6
.8
10.6
36.1
37.2
73.3
9.0
64.2
3.0
.4
12.0
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
39.2
47.5
86.7
10.6
76.1
2.7
1.0
13.0
40.7
50.4
91.2
11.1
80.1
2.5
1.2
13.7
65.6
73.2
79.6
81.6
83.5
85.3
86.4
89.2
92.8
97.5
5.6
17.3
7.2
19.7
9.7
20.7
8.0
22.2
7.4
22.2
6.9
22.2
5.5
21.7
6.3
23.7
6.1
24.8
5.7
27.5
4.3
11.1
4.8
4.6
24.6
5.6
4.9
26.5
5.5
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
5.5
35.0
9.4
LIABILITIES
10 Bank loans
11 Commercial paper
Debt:
12
Short-term, n.e.c
13
Long-term, n.e.c
14
Other
15 Capital, surplus, and undivided profits
10.9
11.5
12.4
12.5
12.8
13.2
13.4
13.4
13.9
14.4
16 Total liabilities and capital
65.6
73.2
79.6
81.6
83.5
85.3
86.4
89.2
92.8
97.5
NOTE.—Components may not add to totals due to rounding.
1.522
DOMESTIC F I N A N C E COMPANIES
Business Credit
Millions of dollars, seasonally adjusted except as noted
Type
Accounts
receivable
outstanding Aug. 31,
1977
Changes in accounts
receivable during—
Extensions
Repayments
1977
1977
1977
June
July
Aug.
June
July
Aug.
June
July
Aug.
1 Total
50,006
982
1,103
1,968
11,961
12,152
13,218
10,979
11,049
11,250
2 Retail automotive (commercial vehicles)
3 Wholesale automotive
4 Retail paper on business, industrial, and
farm equipment
5 Loans on commercial accounts receivable. . .
6 Factored commercial accounts receivable... .
7 A l l other business credit
11,183
9,317
340
137
296
686
269
1,187
1,042
5,049
1,030
5,493
1,022
6,321
702
4,912
734
4,807
753
5,134
13,140
3,914
2,294
10,158
238
115
-50
202
197
28
-120
16
296
-2
17
201
694
2,483
1,347
1,346
788
2,301
1,261
1,279
805
2,270
1,429
1,371
456
2,368
1,397
1,144
591
2,273
1,381
1,263
509
2,272
1,412
1,170
1 Not seasonally adjusted.
A46
1.53
DomesticNonfinancialStatistics • October 1977
MORTGAGE MARKETS
Millions of dollars; exceptions noted.
1977
Item
1974
1975
1976
Mar.
Apr.
May
June
July
Aug.
Terms and yields in primary and secondary markets
PRIMARY MARKETS
1
2
3
4
5
6
7
8
Conventional mortgages on new homes
Terms; ^
Purchase price (thous. dollars)
Amount of loan (thous. dollars)
Loan/price ratio (per cent)
Maturity (years)
Fees and charges (per cent of loan amount) 2.
Contract rate (per cent per annum)
Yield (per cent per annum):
F H L B B series 3
H U D series4
40.1
29.8
74.3
26.3
1.30
8.71
44.6
33.3
74.7
26.8
1.54
8.75
48.4
35.9
74.2
27.2
1.44
8.76
53.8
40.9
77.5
28.0
1.34
8.74
53.4
39.6
75.5
27.3
1.30
8.73
52.8
39.9
77.4
27.9
1.34
8.74
53.1
39.5
76.0
27.2
1.25
8.78
53.7
40.0
76.2
27.9
1.31
8.79
54.6
40.7
76.5
28.2
1.29
8.81
8.92
9.22
9.01
9.10
8.99
8.99
8.95
8.85
8.94
8.90
8.96
8.95
8.98
9.00
9.00
9.00
9.02
9.00
9.55
8.72
9.19
8.52
8.82
8.17
8.58
8.06
8.57
7.96
8.04
8.74
7.95
8.74
7.95
8.74
8.03
9.31
9.43
9.26
9.37
8.99
9.11
8.68
8.91
8.67
8.97
8.74
9.08
8.75
9.12
8.72
9.07
8.76
9.06
SECONDARY MARKETS
9
10
11
12
Yields (per cent per annum) on—
F H A mortgages ( H U D series) 5.
G N M A securities 6
F N M A auctions-.7
Government-underwritten loans
Conventional loans
Activity in secondary markets
FEDERAL NATIONAL
M O R T G A G E ASSOCIATION
13
14
15
16
Mortgage holdings (end of period)
Total
FHA-insured
VA-guaranteed
Conventional
17
18
Mortgage transactions (during period)
Purchases
Sales
19
20
Mortgage commitments:»
Contracted (during period)
Outstanding (end of period)
Auction of 4-month commitments to buy—
Government-underwritten loans:
Offered 9
Accepted
Conventional loans :
Offered 9
23
24
Accepted
21
22
29,578
19,189
8,310
2,080
31,824
19,732
9,573
2,519
32,904
18,916
9,212
4,776
32,830
18,739
9.099
4.992
32,938
18,745
9,125
5,069
33,580
18,939
9,399
5,241
33,918
18,974
9,509
5,435
33,954
18,887
9,449
5,618
34,029
18,785
9,388
5,866
6,953
4
4,263
2
3,606
86
283
391
947
7
656
322
405
10,765
7,960
6,106
4,126
6,247
3,398
1,119
5,184
716
5,411
1,452
5,773
999
5,854
357
5,062
531
4,717
5,462.6
2,371.4
7,042.6
3,848.3
4,929.8
2,787.2
1,138.2
612.0
456.1
269.8
1,842.8
1,027.4
278.9
127.8
206.4
131.4
314.9
221.4
1,195.4
656.5
1,401.3
765.0
2,595.7
1,879.2
373.9
268.1
348.1
280.7
1,164.6
751.7
371.1
263.0
286.8
184.4
370.2
236.7
FEDERAL HOME LOAN
MORTGAGE CORPORATION
25
26
27
Mortgage holdings (end of period) lo
Total
FHA/VA
Conventional
4,586
1,904
2,682
4,987
1,824
3,163
4,269
1,618
2,651
3,557
1,564
1,993
3,355
1,542
1,813
3,;i85
1,523
1,763
3,389
1,502
1,887
3,483
1,481
2,001
3,424
1,463
1,961
28
29
Mortgage transactions (during period)
Purchases
Sales
2,191
52
1,716
1,020
1,175
1,396
200
285
235
388
310
329
379
336
236
79
348
414
30
31
Mortgage commitments: 11
Contracted (during period)
Outstanding (end of period)
4,553
2,390
982
111
1,477
333
459
760
606
1,112
525
1,314
511
1,293
511
1,350
567
1,352
1 Weighted averages based on sample surveys of mortgages originated
by major institutional lender groups. Compiled by the Federal Home Loan
Bank Board in cooperation with the Federal Deposit Insurance Corporation.
2 Includes all fees, commissions, discounts, and "points" paid (by
the borrower or the seller) in order to obtain a loan.
3 Average effective interest rates on loans closed, assuming prepayment
at the end of 10 years.
4 Average contract rates on new commitments for conventional first
mortgages, rounded to the nearest 5 basis points; from Dept. of Housing
and Urban Development.
5 Average gross yields on 30-year, minimum-downpayment, Federal
Housing Administration-insured first mortgages for immediate delivery
in the private secondary market. Any gaps in data are due to periods of
adjustment to changes in maximum permissible contract rates.
6 Average net yields to investors on Government National Mortgage
Association-guaranteed, mortgage-backed, fully-modified pass-through
securities, assuming prepayment in 12 years on pools of 30-year F H A / V A
mortgages carrying the prevailing ceiling rate. Monthly figures are
unweighted averages of Monday quotations for the month.
I Average gross yields (before deduction of 38 basis points for mortgage
servicing) on accepted bids in Federal National Mortgage Association's
auctions of 4-month commitments to purchase home mortgages, assuming
prepayment in 12 years for 30-year mortgages. No adjustments are made
for F N M A commitment fees or stock related requirements. Monthly
figures are unweighted averages for auctions conducted within the month.
8 Includes some multifamily and nonprofit hospital loan commitments
in addition to 1- to 4-family loan commitments accepted in F N M A ' s
free market auction system, and through the F N M A - G N M A Tandem
plans.
9 Mortgage amounts offered by bidders are total bids received.
10 Includes participations as well as whole loans.
I I Includes conventional and Government-underwritten loans.
Real Estate Debt
1.54
A41
MORTGAGE DEBT OUTSTANDING
Millions o f dollars, end o f period
1977
1976
1972
Type o f holder, and type o f property
1 A l l holders
2
1- to 4-family
3
Multifamily
Commercial
4
Farm
5
6 M a j o r financial institutions
7
Commercial banks ^
8
1 - t o 4-family
9
Multifamily
10
Commercial
11
Farm
12
13
14
15
16
Mutual savings banks
1- to 4-family
Multifamily
Commercial
Farm
17
18
19
20
Savings and loan associations
1- to 4-family
Multifamily
Commercial
21
22
23
24
25
Life insurance companies
1- to 4-family
Multifamily
Commercial
Farm
26 Federal and related agencies
27
Government National Mortgage
28
1 - t o 4-family
29
Multifamily
30
31
32
33
34
Farmers Home Admin
1- to 4-family
Multifamily
Commercial
Farm
35
36
37
Federal Housing and Veterans
1- to 4-family
Multifamily
38
39
40
Federal National Mortgage
1- to 4-family
Multifamily
41
42
43
Federal land banks
1- to 4-family
Farm
44
45
46
Federal Home Loan Mortgage
1- to 4-family
Multifamily
^
Admin...
Assn
47 Mortgage pools or trusts 2
48
Government National Mortgage
49
1 - t o 4-famiIy
50
Multifamily
51
52
53
Federal Home Loan Mortgage
1- to 4-family
Multifamily
54
55
56
57
58
Farmers Home Admin
1- to 4-family
Multifamily
Commercial
Farm
59 Individuals and others3
60
1 - t o 4-family
61
Multifamily
62
Commercial
63
Farm
Assn...
Corp—
Assn...
Corp...
1974
1973
Q3
04
Ql
Q2P
603,417
372,154
82,840
q12,665
35,758
682,321
416,211
93,132
131,725
41,253
742,512
449,371
99,976
146,877
46,288
801,537
490,761
100,601
159,298
50,877
865,733
538,847
103,882
167,539
55,465
889,039
556,443
104,283
171,259
57,054
910,941
572,517
104,342
174,763
59,319
946,761
598,069
106,057
181,216
61,419
450,000
99,314
57,004
5,778
31,751
4,781
505,400
119,068
67,998
6,932
38,696
5,442
542,560
132,105
74,758
7,619
43,679
6,049
581,193
136,186
77,018
5,915
46,882
6,371
630,103
147,805
83,938
8,144
49,160
6,563
641,621
151,208
86,205
8,100
50,175
6,728
662,272
154,510
88,086
8,282
51,266
6,876
687,968
161,109
91,849
8,635
53,456
7,169
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
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
83,469
54,355
14,465
14,590
59
206,182
166,410
21,051
18,721
231, 733
187,078
22,779
21,876
249,301
200,987
23,808
24,506
278,590
223,903
25,547
29,140
311,847
251,629
27,505
32,713
323,130
260,895
28,436
33,799
333,703
270,100
29,032
34,571
350,777
283,920
30,517
36,340
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
90,202
16,448
19,234
47,336
7,184
91,555
16,088
19,178
48,864
7,425
91,786
15,699
18,921
49,526
7,640
92,613
15,291
18,846
50,616
7,860
40,157
5,113
2,513
2,600
46J21
4,029
1,455
2,574
58,320
4,846
2,248
2,598
66,891
7,438
4,728
2,710
67,314
5,068
2,486
2,582
66,753
4,241
1,970
2,271
66,248
4,013
1,670
2,343
68,609
3,912
1,654
2,258
1,019
279
29
320
391
1,366
743
29
218
376
1,432
759
167
156
350
1,109
208
215
190
496
1,355
754
143
133
325
1,064
454
218
72
320
500
98
28
64
310
1,043
410
97
126
410
3,338
2,199
1,139
3,476
2,013
1,463
4,015
2,009
2,006
4,970
1 ,990
2,980
5,092
1,716
3,376
5,150
1,676
3,474
5,406
1,732
3,674
5,530
1,706
3,824
19,791
17,697
2,094
24,175
20,370
3,805
29,578
23,778
5,800
31,824
25,813
6,011
32,962
27,030
5,932
32,904
26,934
5,970
32,830
26,836
5,994
33,918
27,933
5,985
9,107
13
9,094
11,071
123
10,948
13,863
406
13,457
16,563
549
16,014
18,568
586
17,982
19,125
601
18,524
19,942
611
19,331
20,818
628
20,190
1,789
1,754
35
2,604
2,446
158
4,586
4,217
369
4,987
4,588
399
4,269
3,917
352
4,269
3,889
380
3,557
3,200
357
3,388
2,901
487
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
44,960
26,725
25,841
884
49,801
30,572
29,583
989
54,811
34,260
33,190
1,070
58,748
36,573
35,467
1,106
441
331
110
766
617
149
757
608
149
1,598
1,349
249
2,506
2,141
365
2,671
2,282
389
3,570
3,112
458
4,460
3,938
522
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
15,729
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
17,715
10,814
111
2,680
3,444
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
123,356
60,524
20,915
21,878
20,039
124,858
62,430
20,173
21,622
20,633
127,610
64,192
19,387
22,395
21,636
131,436
67,203
18,538
23,408
22,287
1 Includes loans held by nondeposit trust companies but not bank trust
departments.
2 Outstanding principal balances o f mortgages backing securities insured 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,
nonmsured pension funds, credit unions, and U.S. agencies for which
amounts are small or separate data are not readily available.
1975
NOTE.—Based on data f r o m various institutional and Govt, sources,
w i t h some quarters estimated i n part by Federal Reserve in conjunction
w i t h the Federal H o m e L o a n Bank Board and the Dept. o f Commerce.
Separation o f nonfarm mortgage debt by type o f property, i f not reported directly, and interpolations and extrapolations where required, are
estimated mainly by Federal Reserve. M u l t i f a m i l y debt refers to loans on
structures o f 5 or more units.
A46
1.55
DomesticNonfinancialStatistics • October 1977
CONSUMER INSTALMENT
CREDIT
T o t a l Outstanding, and N e t Change
Millions o f dollars
1977
Holder, and type o f credit
1974
1975
1976
Feb.
Mar.
Apr.
May
June
July
Aug.
Amounts outstanding (end o f period)
157,454
164,955
185,489
184,504
186,379
189,187
192,143
196,157
198,973
203,192
By holder:
Commercial banks
Finance companies
Credit unions
Retailers i
Others 2
75,846
36,087
21,895
17,933
5,693
78,667
35,994
25,666
18,002
6,626
89,511
38,639
30,546
19,052
7,741
89,223
38,868
30,701
17,860
7,852
90,187
39,188
31,448
17,585
7,971
91,837
39,561
31,912
17,734
8,142
93,190
40,127
32,704
17,911
8,211
95,307
40,712
33,750
18,032
8,355
96,797
41,398
34,122
18,137
8,520
98,894
41,987
35,077
18,475
8,760
7
8
9
10
11
12
13
By tvpe o f credit:
Automobile
Commercial banks
Indirect
Direct
Finance companies
Credit unions
Others
52,871
30,994
18,687
12,306
10,623
10,869
386
55,879
31,553
18,353
13,200
11,155
12,741
430
66,116
37,984
21,176
16,808
12,489
15,163
480
66,361
38,170
21,170
17,000
12,450
15,240
501
67,678
38,962
21,563
17,399
12,593
15,611
513
69,064
39,940
22,059
17,881
12,757
15,841
525
70,557
40,760
22,442
18,319
13,023
16,234
540
72,459
41,937
23,054
18,883
13,219
16,754
549
73,863
42,770
23,493
19,277
13,597
16,938
558
75,512
43,746
23,994
19,752
13,783
17,412
570
14
15
16
Mobile homes
Commercial banks
Finance companies
14,618
8,972
3,525
14,423
8,649
3,451
14,572
8,734
3,273
14,396
8,590
3,202
14,409
8,571
3,190
14,471
8,597
3,170
14,477
8,617
3,149
14,551
8,646
3,136
14,623
8,671
3,126
14,710
8,691
3,114
17
18
Home improvement
Commercial banks
8,522
4,694
9,405
4,965
10,990
5,554
10,962
5,474
11,097
5,510
11,287
5,594
11,465
5,702
11,742
5,838
11,964
5,960
12,257
6,087
19
20
Revolving credit:
Bank credit cards
Bank check credit
8,281
2,797
9,501
2,810
11,351
3,041
11,090
3,071
10,971
3,061
11,149
3,076
11,205
3,125
11,462
3,202
11,634
3,261
12,085
3,369
21
22
23
24
25
26
27
28
All other
Commercial banks, total
Personal loans
Finance companies, total
Personal loans
Credit unions
Retailers
Others
70,364
20,108
13,771
21,590
16,985
9,174
17,933
1,559
72,937
21,188
14,629
21,238
17,263
10,754
18,002
1,755
79,418
22,847
15,669
22,749
18,554
12,799
19,052
1,971
78,624
22,828
15,753
23,088
18,567
12,864
17,860
1,984
79,162
23,112
15,932
23,277
18,751
13,177
17,585
2,011
80,139
23,481
16,168
23,506
18,938
13,371
17,734
2,047
81,313
23,780
16,344
23,827
19,214
13,703
17,911
2,092
82,742
24,224
16,602
24,223
19,540
14,141
18,032
2,121
83,628
24,499
16,749
24,538
19,808
14,297
18,137
2,157
85,260
24,916
17,037
24,951
20,118
14,697
18,475
2,221
1
2
3
4
5
6
Net change (during period) 3
29 Total
9,280
7,504
20,533
1,824
2,848
2,770
2,519
2,282
2,319
2,508
30
31
32
33
34
By holder:
Commercial banks
Finance companies
Credit unions
Retailers i
Others 2
3,975
731
2,262
1,538
774
2,821
-90
3,771
69
933
10,845
2,644
4,880
1,050
1,115
858
349
517
14
86
1,434
585
611
113
106
1,328
392
634
223
192
1,100
460
665
210
84
1,283
182
519
144
154
1,005
524
368
286
136
1,305
321
472
170
240
35
36
37
38
39
40
41
By type o f credit:
Automobile
Commercial banks
Indirect
Direct
Finance companies
Credit unions
Other
500
-508
-310
-198
-116
1,123
2
3,007
559
-334
894
532
1,872
44
10,238
6,431
2,823
3,608
1,334
2,422
50
955
491
217
274
174
266
24
1,326
790
396
394
244
294
-2
1,155
693
355
338
135
298
29
1,188
561
241
320
258
352
17
898
681
328
353
-28
244
2
1,005
521
255
266
275
208
2
990
661
322
338
65
237
27
42
43
44
Mobile homes
Commercial banks
Finance companies
1,068
632
166
-195
-323
-73
150
85
-177
-48
-38
-40
48
5
-1
56
11
-14
-18
-24
23
—7
-21
45
1
-12
44
-8
-18
45
46
Home improvement
Commercial banks
1,094
611
881
271
1,585
588
87
20
160
71
181
64
126
58
174
67
156
68
175
54
47
48
Revolving credit:
Bank credit cards
Bank check credit
1,443
543
1,220
14
1,850
231
186
39
245
50
259
54
173
98
219
85
164
34
295
55
49
50
51
52
53
54
55
56
Another
Commercial banks, total
Personal loans
Finance companies, total
Personal loans
Credit unions
Retailers
Others
4,631
1,255
898
746
486
948
1,538
145
2,577
1,080
858
-348
279
1,580
69
196
6,479
1,659
1,040
1,509
1,290
2,045
1,050
217
605
160
126
212
178
204
14
15
1,019
212
200
341
280
264
113
29
1,065
248
182
270
219
281
223
43
952
209
146
227
184
258
210
48
883
237
156
226
185
239
144
36
914
211
117
260
228
129
286
28
949
248
137
273
186
200
170
59
1 Excludes 30-day charge credit held by retailers, o i l and gas companies,
and travel and entertainment companies.
2 M u t u a l savings banks, savings and loan associations, and auto dealers.
3 Net change equals extensions minus liquidations (repayments, chargeoffs, and other credits); figures f o r all months are seasonally adjusted.
NOTE.—^Total consumer noninstalment credit outstanding—credit
scheduled to be repaid i n a l u m p sum, including single-payment loans,
charge accounts, and service credit—amounted to $38.7 billion at the
end o f 1976, $35.7 b i l l i o n at the end o f 1975, and $33.8 b i l l i o n at the end
o f 1974. Comparable data for Dec. 31, 1977, w i l l be published i n the
BULLETIN f o r February 1978.
Consumer Debt
1.56
CONSUMER INSTALMENT CREDIT
A43
Extensions and Liquidations
Millions of dollars
1977
Holder, and type o f credit
1974
1975
1976
Feb.
Mar.
Apr.
May
June
July
Aug,
Extensions 3
1 Total
By holder:
2
3
4
5
6
Finance companies
Retailers i
Others 2
By type of credit:
157,200
164,169
193,328
17,418
18,351
18,609
18,322
18,613
18,416
18,979
72,605
34,061
19,596
27,034
3,904
77,312
31,173
24,096
27,049
4,539
94,220
36,028
28,587
29,188
5,305
8,399
3,301
1,61 A
2,580
464
8,927
3,528
2,787
2,615
494
9,008
3,445
2,859
2,721
576
8,888
3,359
2,860
2,728
485
9,036
3,443
2,769
2,806
559
8,928
3,335
2,663
2,951
540
9,201
3,459
2,806
2,840
673
7
8
9
10
11
12
13
Commercial banks
Indirect
Direct
Finance companies
Credit unions
Others
45,429
26,406
15,576
10,830
8,604
10,015
404
51,413
28,573
15,766
12,807
9,674
12,683
483
62,988
36,585
19,882
16,704
11,209
14,675
518
5,747
3,278
1,730
1,547
1,014
1,392
64
6,135
3,563
1,923
1,640
1,112
1,418
42
6,037
3,462
1,850
1,612
1,074
1,431
70
5,973
3,341
1,751
1,590
1,114
1,457
60
5,978
3,442
1,817
1,625
1,099
1,390
47
5,877
3,464
1,856
1,608
963
1,402
48
6,064
3,523
1,874
1,649
1,036
1,434
72
14
15
16
Mobile homes
Commercial banks
Finance companies
5,782
3,486
1,376
4,323
2,622
764
4,841
3,071
690
367
210
53
434
257
56
463
269
58
402
262
50
408
232
48
440
253
55
465
253
55
17
18
Commercial banks
5,211
2,789
5,556
2,722
6,736
3,245
564
262
638
310
660
308
627'
308
677
319
661
320
723
321
19
20
Revolving credit:
Bank credit cards
Bank check credit
17,098
4,227
20,428
4,024
25,862
4,783
2,384
459
2,381
470
2,547
467
2,589
498
2,604
512
2,525
489
2,667
500
21
22
23
24
25
26
27
28
Another
Commercial banks, total
Personal loans
Finance companies, total
Personal loans
Credit unions
Retailers
Others
79,453
18,599
13,176
23,796
17,162
8,560
27,034
1,463
78,425
18,944
13,386
20,657
16,944
10,134
27,049
1,642
88,117
20,673
14,480
24,087
19,579
12,340
29,188
1,830
7,897
1,806
1,302
2,228
1,755
1,127
2,580
156
8,292
1,945
1,392
2,354
1,863
1,207
2,615
171
8,436
1,956
1,406
2,307
1,833
1,264
2,721
188
8,233
1,891
1,365
2,188
1,744
1,233
2,728
193
8,434
1,927
1,380
2,289
1,850
1,225
2,806
187
8,424
1,876
1,314
2,309
1,836
1,113
2,951
175
8,559
1,937
1,367
2,361
1,870
1,207
2,840
214
Liquidations^
29 Total
By holder:
30
Commercial banks
31
32
Credit unions
33
Retailers i
Others 2
34
147,920
156,665
172,795
15,594
15,503
15,840
15,803
16,331
16,098
16,471
68,630
33,330
17,334
25,496
3,130
74,491
31,263
20,325
26,980
3,606
83,376
33,384
23,707
28,138
4,191
7,540
2,952
2,157
2,566
378
7,493
2,943
2,176
?,502
389
7,680
3,053
2,225
2,497
384
7,789
2,899
2,195
2,518
401
7,753
3,261
2,250
2,662
405
7,923
2,811
2,295
2,665
404
7,897
3,138
2,333
2,670
433
By type o f credit:
35
36
37
38
39
40
41
Commercial banks
Indirect
Direct
Finance companies
Credit unions.
Others
44,929
26,915
15,886
11,029
8,720
8,892
402
48,406
28,014
16,101
11,913
9,142
10,811
439
52,750
30,154
17,059
13,095
9,875
12,253
468
4,792
2,787
1,513
1,274
840
1,126
40
4,809
2,773
1,527
1,246
868
1,124
44
' 4,882
2,769
1,495
1,274
939
1,133
41
4,785
2,780
1,509
1,271
856
1,106
43
5,080
2,761
1,489
1,272
1,127
1,146
45
4,871
2,943
1,601
1,342
688
1,194
46
5,074
2,862
1,552
1,310
970
1,197
45
42
43
44
Mobile homes
Commercial banks
Finance companies
4,715
2,854
1,210
4,517
2,944
837
4,691
2,986
867
415
248
93
386
252
57
407
258
72
420
262
74
385
239
68
395
245
68
421
261
73
45
46
Commercial banks
4,117
2,178
4,675
2,451
5,151
2,657
477
241
478
238
479
244
501
250
503
252
504
252
548
267
47
48
Revolving credit:
Bank credit cards
Bank check credit
15,655
3,684
19,208
4,010
24,012
4,552
2,198
420
2,136
420
2,288
413
2,416
400
2,385
All
2,361
455
2,372
445
49
50
51
52
53
54
55
56
All other
Commercial banks, total
Personal loans
Finance companies, total
Personal loans
Credit unions
Retailers
Others
74,821
17,345
12,278
23,050
16,676
7,613
25,496
1,318
75,849
17,864
12,528
21,005
16,665
8,554
26,980
1,446
81,638
19,014
13,439
22,578
18,289
10,295
28,138
1,613
7,292
1,646
1,176
2,016
1,577
922
2,566
141
7,273
1,673
1,192
2,013 •
1,583
943
2,502
143
7,371
1,708
1,224
2,037
1,614
983
2,497
145
7,282
1,682
1,219
1,961
.1,560
975
2,518
146
7,551
1,689
1,224
2,063
1,666
986
2,662
151
7,510
1,666
1,197
2,049
1,609
984
2,665
146
7,611
1,689
1,230
2,089
1,684
1,008
2,670
155
1 Excludes 30-day charge credit held by retailers, oil and gas companies,
and travel and entertainment companies.
2 Mutual savings banks, savings and loan associations, and auto dealers.
3 Monthly figures are seasonally adjusted.
A46
1.57
DomesticNonfinancialStatistics • October 1977
F U N D S R A I S E D I N U.S. C R E D I T M A R K E T S
Billions o f dollars; half-year data are at seasonally adjusted annual rates.
1975
Transaction category, or sector
1972
1971
1973
1974
1975
1976
1976
HI
H2
H2
HI
Nonfinancial sectors
I Total funds raised
2
Excluding equities
By sector and instrument:
3
U.S. Govt
Public debt securities
4
5
Agency issues and mortgages
A l l other nonfinancial sectors
6
Corporate equities
7
8
Debt instruments
9
Private domestic nonfinancial sectors
Corporate equities
10
11
Debt instruments
12
Debt capital instruments
State and local obligations
13
14
Corporate bonds
Mortgages:
Home
15
Multifamily residential
16
Commercial
17
Farm
18
Other debt instruments
19
Consumer credit
20
Bank loans n.e.c
21
Open market paper
22
Other
23
24
25
26
27
28
29
30
31
32
33
34
35
36
By borrowing sector
State and local governments
Households
Farm
Nonfarm noncorporate
Corporate
Foreign
Corporate equities
Debt instruments
Bonds
Bank loans n.e.c
Open market paper
U.S. Govt, loans
153.5
142.1
177,.8
167..2
202 .0
194 .3
189 .6
185 .8
205.,6
195 .5
268 .3
257 .8'
180 .8
170 .3
230.4
220.8
254,.5
241 .7
282.1
274.4
1
2
24.9
26.0
— 1.1
128.6
11.5
117.2
123.5
11.4
112.0
86.8
17.4
18.8
15 .1
14 .3
.8
162!.7
10,.5
152,.2
158,,7
10 .9
147..8
102..3
14 .7
12,.2
8 .3
7..9
.4
193 .8
7 .7
186 1
187,,5
7,.9
179 .7
105..0
14 .1
9 .2
11 .8
12 .0
— .2
177,.8
3 .8
174 .0
162 .4
4 .1
158 .3
98 .7
17,. 1
19 .7
85.,4
85,.8
— , .4
120.,2
10,.0
110.,1
107. 0
9,.9
97.
95.• S
13,,6
27,.2
69 .0
69 .1
— ,. 1
199,.2
10,.5
188 .8
179,,0
10,.5
168 .4
122 .7
15 .1
22,.8
79 .6
80 .4
— .8
101 . 1
10 .5
90 .7
93 .1
10 .3
82
93 .8
12 .3
32 .6
91.2
91.3
-.1
139.2
9.6
129.6
120.9
9.5
111.4
97.8
14.9
21.8
73,.1
73,.0
.1
181!,4
13 .3
168 .0
166 .2
13 .3
152..9
I l l .7
14 .7
19 .8
64.9
65.3
-.3
217.1
7.6
209.5
191.7
7.7
754.0
733.7
15.5
25.8
3
4
5
6
7
8
9
10
11
12
13
14
28.6
9.7
9.8
2.4
25.3
13.1
8.1
-.4
4.4
42,.6
12 .7
16,.5
3..6
45..5
18,.9
18 .9
.8
6 .9
46 .4
10 .4
18 .9
5,.5
74..6
22..0
39 .8
2,.5
10 .3
34 .8
6 .9
15 .1
5 .0
59 .6
10 .2
29 .1
6 .6
13 .7
39,,5
11 .0
4,,6
i . .3
9,A
- 1 4 , ,5
- 2 , .6
9,.0
63 .6
1 .6
13 .4
6 .1
45 .7
23,.6
3 .7
4 .0
14 .4
33 .4
.4
9 .4
5 .1
- 7 7 .0
2 .2
- 2 0 .9
- 1 .4
9 .0
45.6
-.4
12.6
4.0
13.6
16.6
-8.2
-3.8
9.0
57 1
.6
13 .9
5 .0
41 .2
22 .9
— .3
6 .4
12 .2
70.2
2.6
12.9
7.3
50.3
24.2
7.8
1.6
16.7
15
16
17
18
19
20
21
22
23
123.5
11.1
45.2
4.5
11.6
44.5
158..7
14,.5
66,.6
5,.8
14 . 1
57,.7
187..5
13,.2
79 .0
9 .7
12 .9
72 .7
162 .4
16 .2
49 .2
7,.9
7 .4
81 .8
7(97,.0
11.,2
48..6
8..7
2,.0
36,.6
179..0
14,.6
89,.8
11 .0
5,.2
58,.3
95 .7
10 .0
37 .3
8 .7
— 1. 1
38 .3
120.9
12.3
59.9
8.8
5.1
34.8
166 .2
13 .0
83 .9
10 .6
2 .7
56 .1
191.7
16.3
95.6
11.6
7.6
60.5
24
25
26
27
28
29
5.2
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 .4
— .2
15 .7
2 .1
4 .7
7 .3
1 .6
13.,2
.1
13.
6,.2
3 .7
.3
2:.8
20 .3
8 .0
.1
7 .9
5 .7
.4
— .8
3 .4
18.3
.1
18.2
6.8
7.8
1.4
2.2
15 .2
75 .7
7 .3
3 .4
1 .5
2 .9
25.4
-.1
25.5
9.5
10.0
2.4
3.6
30
31
32
33
34
35
36
29.4 37
•
5.2
.9
2.1
.3
1.8
—
*
20 . i
8 .4
6 .7
1 .9
3 .3
_
*
Financial sectors
37 Total funds raised
B y instrument:
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
U.S. Govt, related
Sponsored credit agency securities
Mortgage pool securities
Loans f r o m U.S. Govt
Private financial sectors
Corporate equities
Debt instruments
Corporate bonds
Mortgages
Bank loans n.e.c
Open market paper and Rp's
Loans from F H L B ' s
By sector:
Sponsored credit agencies
Mortgage pools
Private financial sectors
Commercial banks
Bank affiliates
Foreign banking agencies
Savings and loan associations
Other insurance companies
Finance companies
REIT's.
Open-end investment companies
Money market funds
15.4
28 .3
51 .6
39 .4
14 ,0
28,.6
15 .1
12.8
27 .8
5.9
1.1
4.8
8 .4
3,.5
4 .9
19 .9
16 .3
3 .6
13..5
2,.3
10 .3
.9
2 .8
17 .1
5 .1
1 .7
5 .9
4 .4
18..6
3..3
15 .7
— , .4
10 .0
.7
9 .2
5 .8
2 .1
- 3 .7
7 .1
- 2 .0
14 .5
1 .9
11 .5
1 .1
.6
.1
.6
2 .3
1 .4
- 4 .1
8 .2
- 6 .6
12.6
2.8
9.2
.6
.2
—. 1
.3
3.5
3.2
-2.5
-2.6
-1.3
18 .5
4,.5
14 .2
.7
1,.5
30 .2
3..5
- 1 .2
/8 .9
11 .8
7 .2
23 .7
16 .6
5 .8
.7
16 .3
.3
16 .0
2 .1
- 1 .3
4 .6
3 .9
6 .7
3 .5
4 .9
19 .9
4 .8
,7
.8
2 .0
.5
6 .2
6 .3
— , .5
16 .3
3,.6
31 .7
8. 1
2,.2
5,. 1
6 .0
.5
9 .4
6,.5
— 1,.2
2 .9
15 .7
70
7 .4
— .8
.4
3 .0
11 .5
.6
5 .1
.9
— .9
- 6 .8
.9
- 1 .4
- 2 .0
.7
2 .6
3.4
9.2
.2
-2.3
-.3
.2
2.3
1.0
2.4
-1.9
-.9
195.9
.7
9 .8
185.4
93 .1
12 .3
41 .3
49 .5
2.2
-25.9
6 .1
6.9
243.2
-.9
10.5
233.6
103.2
14.9
31.3
65.0
16.6
-2.9
-5.0
10.5
""p'.y
3.5
6.0
3.8
2.1
1.9
.9
-2.7
1.1
4.8
9.5
2.4
-.4
1.6
—. 1
.6
2.7
2.9
1.3
""lb
*
17 .3
5 .8
16 .3
— 1.1
3 .5
2 .9
6 .3
.9
4 .5
.6
— .7
2 .4
*
.4
2:.9
2,.3
- 3 , .6
2,.8
- 4 .0
3,.2
10 .3
1!.7
.3
— , .3
- 2 , .2
1,.0
.5
-1. .0
—.
1 !3
1 .0
6 .4
- 2 .8
- 1 .0
.3
*
9 .7
— . .7
9
7 .0
1 .4
- 3 .0
6 .1
- 1 .6
18.6
2.1
17.2
-.7
10.8
2.2
8.6
4.5
2.8
-4.4
8.1
-2.4
38
39
40
41
42
43
44
45
46
47
48
49
4 .5
14 .2
9 .7
9 .0
- 1 .3
- 1 .5
.5
1 .0
5 .7
- 2 .5
- 2 , .5
.7
1.4
17.2
10.8
5.9
-.3
2.4
-.5
1.0
7.1
-3.0
.5
.2
50
51
52
53
54
55
56
57
58
59
60
61
282.2
- 2 .5
15 .1
269.6
91 .9
14.7
34.7
77.9
22.9
.1
14.0
13.4
311.4
.5
9.3
301.6
84.3
15.5
39.3
95.7
24.2
13.4
12.0
17.2
62
63
64
65
66
67
68
69
70
71
72
73
*
A l l sectors
62 Total funds raised, by instrument
63
Investment company shares
64
Other corporate equities
65
Debt instruments
66
U.S. Govt, securities
State and local obligations
67
Corporate and foreign bonds
68
69
Mortgages
Consumer credit
70
71
Bank loans n.e.c
Open market paper and Rp's
72
Other loans
73
168.9
1.3
13.7
154.0
30.9
17.4
23.5
52.6
13.1
12.1
.8
3.5
206.1
— , ,5
13,.8
192..8
23.,6
14.7
18,,4
77.0
18.9
27.,8
4., 1
8.4
253.7
- 1 , ,2
10.4
244.5
28,,3
14.7
13.6
79.9
22.0
51. 6
15.,2
19.,1
229.0
— , .7
4,.8
224.9
34.3
17.,1
23.9
60.,5
10.2
38.4
17..8
22.7
219.5
1
10.2
209.5
98.2
13.6
36.3
57,,2
9.4
-14.4
,5
8.7
296 .8
- 1 , .0
12.2
285.6
88, 1
15,.1
37,.0
86.8
23.6
6.7
13,.0
15.3
Flow of Funds
1.58
A45
D I R E C T A N D I N D I R E C T SOURCES OF F U N D S T O C R E D I T M A R K E T S
Billions of dollars, except as noted; half-year data are at seasonally adjusted annual rates.
1975
Transaction category, or sector
1971
1972
1973
1974
1975
HI
1 Total funds advanced in credit markets to
nonfinancial sectors
2
3
4
5
6
7
8
9
10
11
By public agencies and foreign:
Total net advances
U.S. Govt, securities
Residential mortgages
F H L B advances to S&L's
Other loans and securities
Totals advanced, by sector
U.S. Govt
Sponsored credit agencies
Monetary authorities
Foreign
Agency borrowing not included in line 1
Private domestic funds advanced
12 Total net advances
13
U.S. Govt, securities
14
State and local obligations
15
Corporate and foreign bonds
16
Residential mortgages
17
Other mortgages and loans
18
LESS: F H L B advances
Private financial intermediation
19 Credit market funds advanced by private
financial institutions
20
Commercial banking
21
Savings institutions
22
Insurance and pension funds
23
Other finance
24 Sources of funds
25
Private domestic deposits
26
Credit market borrowing
27
28
29
30
31
Other sources
Foreign funds
Treasury balances
Insurance and pension reserves
Other, net
Private domestic nonfinancial investors
32 Direct lending in credit markets
33
U.S. Govt, securities
34
State and local obligations
35
Corporate and foreign bonds
36
Commercial paper
37
Other
1976
1976
H2
H I
142.1
167.2
194.3
185.8
195.5
257.8
170.3
220.8
241.1
43.4
19.8
34.1
52.7
44.3
54.6
55.0
33.6
34.4
7.0
-2.7
4.6
7.6
7 . 0*
5.1
9.5
8.2
7.2
9.2
11.9
14.7
6.7
19.5
22.5
16.2
-4.0
9.5
26.8
12.8
-2.0
16.9
33.4
16.9
-6.6
11.3
11.6
15.5
-1.3
7.8
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
.6
19.9
9.8
25.6
6.2
11.2
23.1
15.1
14.5
8.5
6.1
13.5
8.9
20.6
9.8
15.2
18.6
15.9
16.5
7.6
15.0
14.5
104.6
155.9
180.2
156.1
164.8
221.8
-3.6
17.4
19.5
31.2
37.4
-2.7
16.0
14.7
13.1
48.2
6 3 . 9*
18.8
14.7
10.0
48.4
95.4
7.2
22.4
17.1
20.9
26.9
75.4
6.7
75.7
13.6
32.8
23.2
15.6
-4.0
61.3
15.1
30.3
52.4
60.8
-2.0
129.8
59.7
110.3
149.7
164.9
126.3
119.9
50.6
39.9
13.7
6.1
70.5
48.2
17.2
13.9
86.5
36.9
23.9
17.5
64.6
26.9
30.0
4.7
27.6
52.0
41.5
-1.1
110.3
149.7
164.9
89.4
6.0
100.8
17.1
86.5
30.2
126.3
69.4
16.0
H2
274.4
1
53.2
56.0
27.1
12.1
-1.6
15.6
26.5
13.5
- 2 . 4
18.3
2
3
4
5
6
14.3
12.6
9.5
-2.7
12.6
6.4
20.7
14.5
11.6
18.6
11.4
20.6
5.2
18.8
18.6
7
8
9
10
11
199.7
206.6
237.0 12
12.3
38.8
16.7
-4.3
-6.6
91.6
14.9
26.8
29.6
35.5
-1.3
64.8
14.7
26.8
45.5
53.2
-1.6
57.8
15.5
33.9
59.2
68.3
-2.4
13
14
15
16
17
18
187.3
99.8
140.0
167.6
207.1
58.0
71.9
47.6
9.9
14.4
48.5
38.3
-1.4
40.7
55.4
44.7
- . 7
44.5
71.8
47.8
3.4
71.5
72.0
47.3
16.3
19
20
21
22
23
119.9
187.3
99.8
140.0
167.6
207.1
90.9
.4
123.0
9.2
90.3
.6
91.5
.3
106.1
9.8
139.8
8.6
14.9
31.8
48.2
40.9
28.6
55.1
9.0
48.2
51.7
58.7
-3.9
2.2
8.6
7.9
5.3
.7
11.6
14.1
6.9
-1.0
18.4
23.9
14.5
-5.1
26.0
5.4
- . 4
-1.7
29.0
1.7
3.1
- . 1
35.8
16.4
-5.6
-3.5
26.4
-8.3
4.8
.1
31.5
11.7
-2.6
2.9
35.1
16.2
8.8
-3.1
36.5
16.6
.3
23.3
45.5
45.9
45.3
43.7
30.6
60.0
48.8
38.6
-10.7
.8
8.3
3.9
3.0
4.4
2.9
9.1
19.5
5.4
1.3
12.5
6.8
18.2
10.0
4.7
4.8
8.2
22.2
6.3
8.2
3.1
5.5
19.2
4.7
4.0
4.0
11.8
6.0
7.2
10.8
1.5
5.1
38.4
5.5
5.6
4.7
6.0
22.6
3.9
4.9
6.7
10.8
15.9
5.5
3.1
1.3
12.8
105.2
90.4
76.1
75.7
66.7
18.8
26.1
21.8
97.1
130.3
96.0
98.2
111.0
149.5
84.8
-14.0
39.4
59.4
113.0
-14.2
58.1
69.1
73.0
-27.8
39.3
61.5
96.5
- . 2
39.4
57.4
98.3
-18.0
50.2
66.1
127.6
-10.4
66.0
72.1
~3.'0
38 Deposits and currency
39
Time and savings accounts
40
Large negotiable CD's
41
Other at commercial banks
42
A t savings institutions
92.8
19.\
6.3
33.2
39.6
83.8
7.7
30.6
45.4
18.1
29.6
28.5
43
44
45
13.7
21.4
14.3
8.9
12.3
17.3
23.0
1.7
12.7
21.9
10.4
3.4
17.0
4.4
10.3
3.9
2.6
6.3
6.1
6.2
10.0
7.3
17.3
5.7
-5.0
6.7
7.8
4.9
12.1
9.8
Money
Demand deposits
Currency....
46 Total of credit market instruments, deposits
and currency
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
93.2
128.5
136.0
121.5
142.4
174.0
126.6
158.2
159.8
188.1
46
Public support rate (in per cent)
Private financial intermediation (in per cent)
Total foreign funds
30.5
105.4
22.5
11.8
96.1
13.7
17.5
91.5
7.5
28.4
80.9
25.7
22.7
72.8
5.8
21.2
84.5
18.3
32.3
76.9
9.4
15.2
70.1
2.1
22.1
81.1
9.0
20.4
87.4
27.6
47
48
49
MEMO : Corporate equities not included above
50 Total net issues
51
Mutual fund shares
52
Other equities
53 Acquisitions by financial institutions
54 Other net purchases
15.0
1.3
13.7
19.2
-4.3
13.3
- . 5
13.8
15.3
-2.1
9.2
-1.2
10.4
13.3
-4.1
4.1
- . 7
4.8
5.8
-1.6
10.0
- . 1
10.2
9.4
.6
11.2
-1.0
12.2
12.3
-1.1
10.5
.7
9.8
10.7
- . 2
9.5
- . 9
10.5
8.1
1.4
12.6
-2.5
15.1
1 2 . 6*
9.8
.5
9.3
12.0
-2.2
50
51
52
53
54
47
48
49
NOTES BY L I N E NO.
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 of Federally related mortgage pool securities. Included
below in lines 3, 13, and 33.
Line 1 less line 2 plus line I I . 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 affiliates.
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.
NOTE.—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 • October 1977
N O N F I N A N C I A L BUSINESS A C T I V I T Y
Selected Measures
1967 = 100; m o n t h l y and quarterly data are seasonally adjusted. Exceptions noted.
1977
1974
Measure
1976
1975
Feb.
Mar.
Apr.
May
June
July
Aug.
Sept.
129.3
117.8
129.8
133.2
135.3
136.1
137.0
137.8
138.8
138.2
138.8
2
3
4
5
6
7
M a r k e t groupings:
Products, total
Final, t o t a l
Consumer goods
Equipment
Intermediate
Materials
129.3
125.1
128.9
120.0
135.3
132.4
119.3
118.2
124.0
133.6
131.6
140.5
119.2
141.6
132.7
135,1
133.3
142.9
123.1
115.5
129.3
127.2
136.2
114.6
137.2
130.6
141.8
135.5
135.8
134.1
142.9
122.1
142.3
136.5
136.5
134.7
143.1
123.2
143.5
137.8
137.3
135.4
143.8
124.1
144.7
138.7
138.6
136.5
145.0
124.8
146.2
139.0
138.1
136. 1
144.2
125.0
145.9
138.5
138.5
136.4
144.6
125.2
146.3
139.3
8
Industry groupings:
Manufacturing
129.4
116.3
129.5
132.6
135.1
135.8
137.1
137.8
138.5
138.6
138.9
84.2
87.7
73.6
73.6
80.2
80.4
80.9
80.2
82.1
81.6
82.2
82.1
82.8
82.7
83.0
83.0
83. 1
83.0
82.9
82.6
82.9
82.8
1 Industrial production
Capacity utilization (per cent) i i n —
9
Manufacturing
10
Industrial materials industries
110.2
120.0
11 Construction contracts 2
173.9
162.3
190.2
212.0
207.0
250.0
317.0
284.0
218.0
268.0
12 Nonagricultural employment, total3
13
Goods-producing, total
14
Manufacturing, total
15
Manufacturing, production-worker
16
Service-producing
119.1
106.2
103.1
102.1
126.1
116.9
96.9
94.3
91.3
127.8
120.6
100.3
97.5
95.2
131.7
122.7
101.9
98.9
96.5
134.1
123.6
103.2
99.8
97.6
134.8
124.0
104.1
100.4
98.3
134.9
124.4
104.5
100.8
98.9
135.3
124.7
104.7
100.9
98.9
135.6
125.1
104.9
101.0
'-98.8
136. 1
125.2
'•104.4
MOO.7
98.3
'•136.6
125.7
104.7
100.9
98.5
137.1
17 Personal income, t o t a H
18
Wages and salary disbursements
19
Manufacturing
184.3
178.9
157.6
200.0
188.5
157.3
220.7
208.6
177.7
235.7
222.6
190.4
239.2
225.7
194.4
241.0
227.9
196.0
242.1
229.7
198.5
243.3
230.8
200.4
245.6
232.3
201.2
246.9
'•232.9
-•200.1
248.8
234.6
201.5
239.4
20 Disposable personal income
180.8
199.2
217.8
235.4
21 Retail sales 5
171.2
186.0
206.6
222.3
227.4
227.2
226.1
223.1
224.9
228.3
225.5
Prices: 6
22
Consumer
23
Wholesale
147.7
160.1
161.2
174.1
170.5
182.9
177.1
190.0
178.2
191.9
179.6
194.3
180.6
195.2
181.8
194.4
182.6
194.9
183.3
194.6
195.3
6 D a t a without seasonal adjustment, as published i n Monthly
Labor
Review (U.S. Dept. o f Labor). Seasonally adjusted data for changes i n
the price indexes may be obtained f r o m the Bureau o f Labor Statistics,
U.S. D e p t . o f Labor.
1 Ratios o f indexes o f p r o d u c t i o n to indexes o f capacity. Based on data
f r o m Federal Reserve, M c G r a w - H i l l Economics Department, and Department o f Commerce.
2 Index o f dollar value o f t o t a l construction contracts, including
residential, nonresidential, and heavy engineering, f r o m M c G r a w - H i l l
Informations Systems Company, F. W . Dodge Division.
3 Based on data in Employment and Earnings (U.S. Dept. o f L a b o r ) .
Series covers employees only, excluding personnel in the A r m e d Forces.
4 Based on data i n Survey of Current Business (U.S. Dept. o f C o m merce). Series for disposable income is quarterly.
5 Based on Bureau o f Census data published i n Survey of Current
Business (U.S. Dept. o f Commerce).
2.11
NOTE.—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
f o u n d i n the Survey of Current Business (U.S. Dept. o f Commerce).
Figures for industrial production for the last 2 months are preliminary
and estimated, respectively.
OUTPUT, C A P A C I T Y , A N D C A P A C I T Y U T I L I Z A T I O N
Seasonally adjusted
1976
1977
1976
1977 r
1976
Series
Q1
Q4
Q2
Q3
Output (1967 = 100)
Q4
Q1
Q2
Q3
Capacity (per cent o f 1967 output)
Q4
Q1
Q2
Q3
U t i l i z a t i o n rate (per cent)
1 Manufacturing
131.2
133.1
136.9
138.7
162.8
164.0
165.6
167.1
80.6
81.2
82.7
83.0
2
Primary processing
3
Advanced processing
138.9
127.2
140.1
129.4
146.3
132.0
148.1
133.7
168.8
159.6
170.2
'•160.6
171.8
160.7
173.5
163.8
82.3
79.7
82.3
80.5
85.1
81.4
85.4
81.7
131.9
133.1
137.7
138.9
164.3
165.5
166.6
167.8
80.3
80.4
82.6
82.8
128.4
107.4
146.9
151.4
112.1
130.2
177.3
122.0
129.2
108.6
149.5
153.9
111.3
131.7
181.6
122.0
135.1
116.4
154.6
159.9
110.9
134.3
191.8
122.6
136.6
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
171.6
76.5
74.4
84.4
83.2
79.7
88.1
83.0
84.8
76.5
75.0
85.1
83.8
78.7
88.4
84.0
84.5
79.4
80.2
87.2
86.3
78.1
89.5
87.7
84.8
79.6
4 Materials
5
6
7
8
9
10
11
12
Durable goods
Basic metal
Nondurable goods
Textile, paper, and chemical
Textile
Paper
Chemical
Energy
154.9
159.8
124.7
178.8
187. 1
145.2
86.7
85.4
85.9
Labor Market
2.12
L A B O R FORCE, E M P L O Y M E N T , A N D
A47
UNEMPLOYMENT
Thousands of persons; monthly data are seasonally adjusted. Exceptions noted.
1977
Category
1974
1975
1976
Mar.
Apr.
May
June
July
Aug.
Sept.
Household survey data
1 Noninstitutional population ^
2 Labor force (including Armed
Forces) i
3 Civilian labor force
Employment:
4
Nonagricultural industries 2 . . . .
5
Agriculture
Unemployment:
6
Number
7
Rate {per cent of civilian labor
force)
8 Not in labor force
150,827
153,449
156,048
157,782
157,986
158,228
158,456
158,682
158,899
159,114
93,240
91,011
94,793
92,613
96,917
94,773
98,677
96,539
98,892
96,760
99,286
97,158
99,770
97,641
99,440
97,305
99,834
97,697
99,999
97,868
82,443
3,492
81,403
3,380
84,188
3,297
86,359
3,116
86,763
3,260
87,022
3,386
87,341
3,338
87,348
3,213
87,519
3,252
87,880
3,215
5,076
7,830
7,288
7,064
6,737
6,750
6,962
6,744
6,926
6,773
5.6
8.5
7.7
7.3
7.0
6.9
7.1
6.9
7.1
6.9
57,587
58,655
59,130
59,104
59,094
58,943
58,686
59,242
59,064
59,114
82,121
19,622
855
3,876
4,579
18,247
4,489
15,245
15,208
^^82,366
'•19,648
'•834
'•3,917
'•4,572
'•18,294
'•4,506
'•15,372
'•15,223
'^82,459
'•19,580
'•825
>•3,884
'•4,583
'•18,356
'•4,520
'•15,461
'•15,250
82,750
19,618
846
3,888
4,590
18,427
4,543
15,534
15,304
Establishment survey data
9 Nonagricultural payroll employment 3
10
Manufacturing
11
Mining
12
Contract construction
13
Transportation and public utilities.
14
Trade
15
Finance
16
Service
17
Government
78,413
20,046
694
3,957
4,696
17,017
4,208
13,617
14,177
77,050
18,347
745
3,515
4,499
16,997
4,222
14,008
14,773
79,443
18,958
783
3,593
4,508
17,694
4,315
14,645
14,947
1 Persons 16 years o f age and over. Monthly figures, which are based
on sample data, relate to the calendar week that contains the 12th day;
annual data are averages of monthly figu^jes. By definition, seasonality
does not exist in population figures. Based on data from Employment
and Earnings (U.S. Dept. of Labor).
2 Includes self-employed, unpaid family, and domestic service workers.
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
19,600
845
3,861
4,586
18,235
4,480
15,197
15,117
3 Data 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 of the Armed Forces. Data are
adjusted to the February 1977 benchmark. Based on data from Employment and Earnings (U.S. Dept. of Labor).
A48
2.13
Domestic Nonfinancial Statistics • October 1977
INDUSTRIAL PRODUCTION
Indexes and Gross Value
Monthly data are seasonally adjusted.
1967
proportion
Grouping
1976
1976
average
July
1977
Aug. ^ Sept.
Feb.
Mar.
Apr.
May
June
July
Aug.2' Sept."
Index (1967 = 100)
MAJOR MARKET
100.00 129.8 130.7 131.3 130.6 133.2 135.3 136.1 137.0 137.8 138.8 138.2 138.8
1 Total index
2 Products
3
Final products
4
Consumer goods
5
Equipment
6
Intermediate products
7 Materials
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
Consumer goods
Durable consumer goods
Automotive products
Autos and utility vehicles
Autos
Auto parts and allied goods
Home goods
Appliances, A/C, and T V
Appliances and T V
Carpeting and furniture
Misc. home goods
Nondurable consumer goods. •
Clothing
Consumer staples
Consumer foods and tobacco
Nonfood staples
Consumer chemical products
Consumer paper products
Consumer energy products
Residential utilities
27
28
29
30
31
Equipment
Business equipment
Industrial equipment
Building and mining equipment. . .
Manufacturing e q u i p m e n t . . . .
Power equipment
32
33
34
35
Commercial transit, farm equipment.
Commerical equipment
Transit equipment
Farm equipment
36
50
51
52
53
54
Containers, nondurable
Nondurable materials n.e.c
Energy materials
Primary energy
Converted fuel materials
55
56
57
58
Supplementary groups
Home goods and clothing
Energy, total
Products
Materials
For NOTE see opposite page.
130.1
128.0
137.0
115.6
138.4
133.0
129.4
126.9
135.7
114.8
138.7
132.4
133.6
131.6
140.5
119.2
141.6
132.7
7.89
2.83
2.03
1.90
.80
141.4
154.8
149.8
132.0
167.6
141.5
156.1
155.3
134.4
158.3
144.2
157.8
157.5
137.3
158.4
138.7
147.6
139.2
121.0
168.6
146.1 152.4
161.7 178.3
152.7 176.1
132.8 155.8
184.3 184.1
5.06
1.40
1.33
1.07
2.59
133.9
114.6
117.2
144.1
140.1
133.4
106.9
110.4
142.7
143.9
136.5
120.5
123.2
145.0
141.7
133.8
113.1
116.6
146.3
139.8
137.3
118.5
121.1
146.0
144.0
19.79
4.29
15.50
8.33
134.1
124.0
136.9
130.7
134.0
123.4
136.9
131.6
134.2
120.7
137.9
131.9
7.17 144.1 143.2
2.63 166.4 164.5
1.92 113.3 112.8
2.62 144.4 144.0
1.45 151.1 150.7
137.3
135.4
143.8
124.1
144.7
138.7
138.6
136.5
145.0
124.8
146.2
139.0
138.1
136.1
144.2
125.0
145.9
138.5
138.5
136.4
144.6
125.2
146.3
139.3
151.5 152.2
173.9 172.8
171.2 167.4
150.6 148.5
181.3 186.6
155.8
179.8
177.4
156.8
185.8
157.7
184.3
183.9
161.4
185.5
154.7
177.7
173.7
150.9
187.0
155.1
178.2
174.7
151.7
187.5
137.9
124.1
126.5
144.6
142.7
138.8
126.4
129.9
145.0
143.0
140.6
131.0
134.8
147.3
143.1
142.3
133.1
136.8
151.2
143.6
142.8
130.1
134.4
154.1
145.0
141.7 142.1
129.2 129.2
132.7
153.8
143.4 ' i 4 4 ! 6
134.5
121.5
138.0
132.6
138.3 139.1
123.6 123.9
142.2 143.3
133.3 136.0
139.4
124.4
143.6
136.1
139.5
125.5
143.4
135.0
139.1
125.7
142.9
135.4
140.1 139.9 140.2
124.1
144.6 "lAA.'e •i45!6
137.0 137.6
144.9
168.9
113.9
143.3
149.3
144.2
169.2
111.9
142.9
148.4
152.6
175.7
113.3
158.3
167.1
151.8 152.5
175.9 178.1
117.4 116.6
152.8 153.0
153.2 151.7
180.8 179.3
118.4 116.3
150.8 149.8
153.3 152.8 153.2
179.4 181.3
117.4 117.3
153.6 150.3
137.0
129.5
180.3
108.2
135.8
143.5
133.2
192.9
108.5
139.3
144.8
134.4
197.9
109.0
138.3
137.9
128.7
179.1
107.5
134.9
137.6
128.1
180.3
107.2
132.2
5.86 145.8
3.26 173.5
1.93 104.1
.67 131.4
148.7
174.9
108.4
137.5
148.6 145.8
176.2 176.8
106.4 98.2
136.7 131.4
77.5
135.8
134.1
142.9
122.1
142.3
136.5
136.5
134.7
143.1
123.2
143.5
1378.
136.3
128.0
177.7
106.5
135.3
78.4
135.1
133.3
142.9
120.0
141.8
135.5
78.5
77.6
147.1 148.9
136.3 138.4
200.5 205.3
112.0 112.8
136.7 139.9
150.1
140.0
208.1
115.0
139.0
151.1
140.7
210.6
114.3
141.2
150.9
140.6
207.1
115.1
142.4
155.3 156.9
185.6 186.1
108.7 113.0
142.5 141.8
159.5
189.7
115.2
141.0
161.2
191.1
116.5
144.4
161.9
191.4
118.5
143.2
163.0
191.7
120.6
144.6
162.9 163.2
191.9 192.7
121.2 121.0
141.8
78.5
79.9
80.0
80.3
80.5
78.5
81.1
151.3
141.0
208.0
115.7
141.8
81.4
6.42 132.6 134.1 134.9 134.1 135.6 136.4 137.2 138.7 139.9 141.1 140.9 141.6
6.47 141.8 142.7 141.8 143.2 147.6 147.3 147.5 148.4 149.6 151.3 150.9
1.14 157.1 159.2 157.7 157.5 164.9 163.6 164.6 165.8 164.2 168.2 165.3
Materials
Durable goods materials
Durable consumer parts
Equipment parts
Durable materials n.e.c
Basic metal materials
Nondurable goods materials
Textile, paper, and chem. mat
Textile materials
Paper materials
Chemical materials
129.7
127.4
136.1
115.3
138.4
132.1
7.51
Defense and space equipment
45
46
47
48
49
129.3
127.2
136.2
114.6
137.2
130.6
12.63
6.77
1.44
3.85
1.47
Intermediate products
37
Construction supplies
38
Business supplies
39
Commercial energy products
40
41
42
43
44
60.71
47.82
27.68
20.14
12.89
39.29
20. SS
4.58
5.44
10.34
5.57
126.8
121.6
133.9
125.5
110.9
131.0
126.1
136.3
130.4
118.6
131.4
125.9
138.1
130.6
120.0
129.9
123.6
138.3
128.3
113.7
128.4
124.1
137.3
125.5
105.5
131.9
126.8
137.8
131.1
113.6
133.8
129.4
140.7
132.2
115.0
135.2
132.0
141.7
133.2
117.8
136.4
134.5
143.0
133.8
116.3
136.9
137.1
145.1
132.4
112.6
136.1 136.8
136.9 137.4
145.4 146.2
130.9 131.7
110.3
10.47
7.62
1.85
1.62
4.15
146.3
151.1
115.1
130.8
175.1
145.1
149.3
115.9
129.1
172.2
146.3
150.6
114.9
132.2
173.5
147.6
152.4
114.6
131.2
177.6
150.4 153.3
153.9 158.4
109.8 113.2
133.5 133.9
181.6 188.0
153.7
159.0
111.8
132.2
190.6
155.4
160.7
111.8
136.2
192.2
154.7
160.1
109.0
134.4
192.7
154.3
159.2
110.2
134.3
190.9
155.0 155.5
160.0 160.2
112.1
135.8
191.0
.
1.70
1.14
8.48
4.65
3.82
142.7
119.9
120.2
107.1
136.2
142.8
120.4
118.8
106.7
133.5
143.9
121.7
120.1
107.9
134.9
143.5
122.1
119.9
108.4
134.2
150.2
126.8
120.8
103.1
142.4
148.9
126.1
121.8
107.0
139.9
148.5
125.6
121.3
106.0
140.1
152.3
123.1
122.3
106.6
141.4
152.4
122.9
124.3
109.7
142.0
152.4
124.4
125.2
109.1
144.6
154.9
122.1
123.8
108.9
142.0
.
.
.
9.35
12.23
3.76
8.48
129.4 128.8 129.2
128.8 128.0 128.5
148.2 148.5 147.7
120.2 118.8 120.1
128.1
128.3
147.3
119.9
131.0 131.5 132.2
132.9 132.3 132.1
160.3 156.0 156.5
120.8 121.8 121.3
133.6
132.5
155.3
122.3
134.7
133.5
154.1
124.3
134.2
135.3
158.0
125.2
133.2 133.4
133.4 134.6
154.9
123.8
,
Output
A49
2.13 Continued
Grouping
SIC
code
1967
proportion
1977
1976
1976
average
July
Aug.'" Sept. »• Feb.
Mar.
Apr.
May
June*"
July
Aug.P
Sept.®
Index (1967 = 100)
MAJOR INDUSTRY
1 Mining and utilities.
2
Mining
3
Utilities
4
Electric
12.05
6.36
5.69
3.88
131.6 130.3 131.3 131.6 137.1 136.6
114.2 112.7 114.0 115.5 116.3 120.6
151.0 150.0 150.5 149.6 160.3 154.8
167.6 166.8 167.6 166.0 179.1
135.7
119.2
154.0
137.1
119.5
156.7
138.8
122.8
156.8
139.2
120.0
160.7
135.9
117.0
156.9
137.8
120.4
157.2
5
6
7
87.95
35.97
51.98
129.5
140.9
121.7
130.7
140.3
124.0
131.2 130.5
140.4 142.3
125.0 122.4
132.6
145.3
124.0
135.1
147.0
126.8
135.8
147.0
128.0
137.1
148.5
129.3
137.8
148.4
130.5
138.5
148.6
131.5
138.6
149.1
131.2
138.9
149.2
131.9
.51
.69
4.40
.75
122.8
117.2
112.0
118.3
124.2
104.8
111.9
116.5
124.5
112.6
112.2
118.8
123.2
121.3
113.1
119.2
128.5
100.8
115.8
124.9
133.8
124.1
117.5
126.1
126.1
118.4
117.5
124.0
120.5
122.4
118.3
123.0
121.3
133.4
121.3
122.5
101.9
120.7
120.8
126.7
70.3
113.6
121.5
125.7
133.0
121.7
8.75
.67
2.68
3.31
3.21
132.3
117.9
136.4
122.2
133.0
134.5
114.5
137.7
120.2
131.0
134.8
114.8
135.
117.5
134.6
134.6
115.4
136.4
119.5
132.1
136.4
116.8
132.3
124.4
136.5
138.7
104.3
134.4
122.2
135.5
138.0
112.1
134.6
121.4
136.3
138.3
105.2
136.0
123.5
139.5
136.9
119.2
135.4
122.
139.3
138.2
114.5
137.3
121.1
139.1
135.2
140.'5
140.9
4.72 120.6
7.74 169.3
1.79 133.1
2.24 200.2
.86 80.9
121.2
167.6
134.
191.2
81.1
120.6 120.6 122.4 124.8 123.4 124.4 124.1 124.9 124.7
169.7 171.3 174.9 180.0 180.6 182.8 183.5 182.5 183.0
133.8 133.9 145.2 143.3 143.4 142.4 140.0 140.3 139.1
189.3 212.4 220.3 225.6 226.0 232.4 235.2 235.2 239.5
73.8
76.2
74.
74.1
78.3
75.0
77.9
74.7
75.1
i46.'6
Manufacturing.
Nondurable.,
Durable
8
9
10
11
Mining
Metal mining
Coal
O i l and gas extraction
Stone and earth minerals.
12
13
14
15
16
Nondurable manufactures
Foods
Tobacco products
Textile m i l l products
Apparel products
Paper and products
17
18
19
20
21
10
11,12
13
14
Printing and publishing
Chemicals and products. . . .
Petroleum products
Rubber & plastic products.
Leather and products
139.0
125.3
22
23
24
25
Durable manufactures
Ordnance, pvt. & g o v t . . . .
Lumber and products
Furniture and fixtures
Clay, glass, stone products.
19,91
24
25
32
3.64
1.64
1.37
2.74
72.7
125.
132.7
137.1
72.9
124.6
131.6
137.5
73.6
127.9
133.8
137.6
73.0
128.7
133.6
137.9
72.6
132.2
137.
139.0
72.8
132.1
135.1
143.7
74.6
130.6
135.4
145.0
74.4
133.0
137.5
145.0
74.1
132.4
139.9
147.7
75.0
134.0
143.0
147.9
76.2
134.6
140.5
147.3
26
27
28
29
30
Primary metals
I r o n and steel
Fabricated metal products.
Nonelectrical m a c h i n e r y . . .
Electrical machinery
33
331,2
34
35
36
6.57
4.21
5.93
9.15
8.05
108.9
104.9
123.3
135.0
131.6
117.7
115.0
124.6
137.9
131.4
118.3
116.0
125.8
136.4
135.4
113.0
108.6
126.5
136.8
133.9
100.2
91.3
125.8
139.8
137.6
108.3
97.9
127.5
139.8
137.6
112.2
103.9
127.6
142.9
139.6
117.
111.0
128.2
142.6
141.8
114.7
109.2
130.8
144.0
142.6
114.4
110.9
131.7
145.7
143.6
114.1
111.0
134.0
144.8
143.3
134.8
145.5
143.8
31
32
33
34
35
Transportation equipment
M o t o r vehicles & parts
Aerospace & misc. tr. eq
Instruments
Miscellaneous mfrs
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
112.8
147.5
80.2
151.3
148.4
114.6
149.7
81.6
149.5
142.3
104.7
130.6
80.3
148.7
143.7
113.4
145.4
83.3
157.0
147.9
120.5
161.2
82.3
156.9
147.4
119.8
158.1
83.8
157.8
145.6
120.3
157.7
85.2
157.4
148.0
123.7
163.2
86.5
158.2
148.4
125.4
165.8
87.2
159.2
150.4
123.5
164.1
85.2
158.5
147.6
125.0
166.6
86.0
159.0
148.2
75.2
114.5
Gross value (billions o f 1972 dollars, annual rates)
MA.10R MARKET
36 Products, total
37
Finai products
38
Consumer goods.
39
Equipment
1507.4 5S0.4 552.7 555.5 548.2 569.4 578.2 578.3 582.2 585.9 589.0 587.6 589.2
iSPO.P 425.7 427.1 429.8 421.5 441.1 449.0 448.5 451.0 453.7 456.5 454.7 455.6
1277.5 301.6 301.4 303.5 299.4 312.2 316.8 316.1 316.3 318.9 320.8 318.9 319.2
1113.4 124.0 125.7 126.4 121.9 128.9 132.1 132.6 134.6 134.9 135.7 135.7 136.4
40
1116.6
Intermediate products.
124.8
125.5
1 1972 dollars.
NOTE.—^Published groupings include some series and subtotals not shown
separately. For summary description and historical data, see BULLETIN for
June 1976, pp. 470-79. Availability o f detailed descriptive and historical
data w i l l be announced i n a forthcoming BULLETIN.
126.0
126.6
128.4
129.1
130.1
131.4
131.8
132.7
133.1
133.5
The industrial production indexes have been revised back to January
1976, on the basis o f more complete information now available. A complete
set o f the revised 1976 series is attached to the September G.12.3 release
which may be obtained f r o m the Publications Section, Board o f Governors
o f the Federal Reserve System, Washington, D . C . 20551.
A46
2.14
Domestic Nonfinancial Statistics • October 1977
HOUSING A N D CONSTRUCTION
Monthly figures are at seasonally adjusted annual rates. Exceptions noted.
1977
Item
1974
1975
1976
Feb.''
Mar.
ApT.r
May
June*-
July
Aug.P
Private residential real estate activity
(thousands of units)
NEW UNITS
1 Permits authorized
2
1-family
3
2-or-more-family
1,074
644
431
927
669
278
1,296
894
402
1,526
1,060
466
1,687
1,188
499
1,605
1,051
554
1,615
1,077
538
1,678
1,105
573
1,639
1,089
550
.1,768
1,138
630
4 Started
5
1-family
6
2-or-more-family
1,338
888
450
1,160
892
268
1,540
1,163
377
1,802
1,424
378
2,089
1,503
586
1,880
1,413
467
1,937
1,455
482
1,897
1,389
508
2,076
1,446
630
2,022
1,440
582
7 Under construction, end of period
8
1-famiIy
9
2-or-more-family
1,189
516
673
1,003
531
All
'1,147
'•655
r492
1,215
710
505
1,237
732
505
1,268
748
520
1,302
111
532
1,324
788
536
1,347
796
551
1,692
931
760
1,297
866
430
1,362
1,026
336
1,637
1,242
395
1,707
1,236
471
1,540
1,226
314
1,536
1,177
359
1,638
1,198
440
1,648
1,251
397
329
213
250
275
275
252
251
264
251
501
407
544
383
639
433
893
434
867
435
775
441
111
441
799
444
672
454
35.9
36.2
39.3
38.9
44.2
41.6
47.4
42.1
46.2
42.9
48.7
43.3
49.4
43.9
48.9
44.4
49.1
44.8
38.9
42.5
48.1
52.6
51.6
54.6
54.4
54.1
53.9
55.0
2,272
2,452
3,002
3,080
3,410
3,300
3,450
3,420
3,510
3,720
32.0
35.8
35.3
39.0
38.1
42.2
40.7
45.1
41.0
45.5
42.0
46.5
42.2
46.8
43.4
47.7
43.7
48.0
43.9
48.1
10 Completed
11
1-family
12
2-or-more-family
13 Mobile homes shipped
14
15
16
17
18
Merchant builder activity in
1-family units:
Number sold
Number for sale, end of period i .
Price (thous. of dollars) 2
Median:
Units sold
Units for sale
Average:
Units sold
253
E X I S T I N G U N I T S (1-family)
19 Number sold
Price of units sold (thous. of
dollars): 2
20
Median
21
Average
Value of new construction 3
(millions of dollars)
CONSTRUCTION
22 Total put in place.
138,499
134,293
147,481
156,879
163,790
167,605
172,239
174,378
172,512
170,893
23 Private
24
Residential
25
Nonresidential, total
Buildings:
26
Industrial
27
Commercial
28
Other
29
Public utilities and other.
100,165
50,377
49,788
93,624
46,472
47,152
109,499
60,519
48,980
122,395
72,124
50,271
128,387
76,677
51,710
131,421
79,616
51,805
133,816
82,542
51,274
135,026
82,181
52,845
133,358
79,977
53,381
133,321
79,670
53,651
7,902
15,945
5,797
20,144
8,017
12,804
5,585
20,746
7,182
12,757
6,155
22,886
6,262
12,542
6,061
25,406
7,162
13,677
5,850
25,021
7,279
13,851
6,271
24,404
7,184
13,760
6,077
24,253
7,066
15,235
6,206
24,338
7,210
15,533
6,474
24,164
7,881
15,232
6,423
24,115
38,333
1,188
12,066
2,740
22,339
40,669
1,392
10,861
3,256
25,160
37,982
1,508
9,756
3,722
22,996
34,483
1,552
8,416
3,871
20,644
35,403
1,452
9,153
3,675
21,123
36,184
1,494
9,052
4,012
38,423
1,642
9,835
3,562
23,384
39,352
1,566
10,792
3,196
23,798
39,154
1,537
9,067
4,235
24,315
37,572
1,448
30 Public
31
Military
32
Highway
33
Conservation and development...
34
Other4
1 N o t at annual rates.
2 Not seasonally adjusted.
3 Value of new construction data in recent periods may not be strictly
comparable with data in prior periods due to changes by the Bureau of
the Census in its estimating techniques. For a description of these changes
see Construction Reports (C-30-76-5), issued by the Bureau in July 1976.
4 Beginning Jan. 1977 Highway imputations are included in Other.
21,626
NOTE.—Census Bureau estimates for all series except (a) mobile
homes, which are private, domestic shipments as reported by the Manufactured Housing Institute and seasonally adjusted by the Census Bureau,
and (b) sales and prices of existing units, which are published by the
National Association of Realtors. A l l back and current figures are available from originating agency. Permit authorizations are for 14,000
jurisdictions reporting to the Census Bureau.
Prices
2.15
A51
C O N S U M E R A N D W H O L E S A L E PRICES
Percentage changes based on seasonally adjusted data, except as noted.
12 months to—
3 months (at annual rate) to—
1976
Item
1976
Aug.
1 month to—
1977
1977
1977
Aug.
Sept.
Dec.
Mar.
June
Apr.
May
June
July
Aug.
Index
level
Aug.
1977
(1967
= 100)
Consumer prices
1 A l l items
5.6
6.6
5.3
4.2
10.0
8.1
.8
.6
.6
.4
.3
183.3
2 Commodities
3
Food
4
Commodities less food
5
Durable
6
Nondurable
3.9
2.4
4.8
6.0
4.0
5.8
7.0
5.1
5.1
5.2
3.9
1.6
5.5
5.0
6.0
3.4
'"s.Y
6.0
5.4
10.4
14.6
7.4
10.5
5.5
7.4
12.7
4.2
2.5
5.2
.8
1.5
.4
.5
.3
.5
.7
.4
.2
.5
.5
.8
.2
-.1
.4
.1
.1
.1
0.0
•3
.i
.3
.3
.1
.4
176.3
195.2
166.0
164.3
167.3
7 Services
8
Rent
9
Services less rent
8.6
5.5
9.1
8.0
6.0
8.2
7.5
5.4
7.7
5.1
5.3
5.4
9.8
6.3
10.4
9.4
6.3
9.7
.8
.7
.8
.7
.4
.7
.8
.5
.8
.8
.6
.8
.5
.5
.5
196.3
154.4
203.9
6.7
5.5
5.8
6.5
6.5
7.2
7.4
5.6
8.0
5.3
4.3
1.2
6.9
9.4
9.1
7.8
8.4
9.6
.7
.8
.9
.6
.5
.6
.6
.7
.8
.4
.3
1.1
.4
.3
.6
179.9
180.8
207.4
10
11
12
Other groupings:
A l l items less food i
A l l items less shelter i
Homeownership i
Wholesale prices
13 A l l commodities
14 Farm products, and processed foods and
feeds
15
Farm products
16
Processed foods and feeds
17 Industrial commodities
Materials, supplies, and components of
which:
18
Crude materials 2
19
Intermediate materials 3
Finished goods, excluding foods:
20
Consumer
21
Durable
22
Nondurable
23
Producer
4.0
5.9
3.5
7.1
10.2
3.6
1.1
.4
-.7
-.1
.1
194.6
-3.9
-1.8
-5.2
1.4
-4.5
4.8
-12.0
-11.9
-11.8
6.6
5.8
6.5
19.1
26.0
15.6
-2.5
-21.6
10.8
2.9
3.4
2.5
.3
-2.3
1.8
-3.6
-6.8
-1.7
-2.1
-1.8
-2.4
-2.1
-4.3
-.8
184.2
181.2
185.1
6.7
7.1
8.0
7.6
7.9
5.3
.6
.4
.3
.5
.5
196.9
12.9
6.7
11.2
7.1
10.6
8.3
21.6
7.1
21.9
8.0
-2.0
4.7
.3
.6
.8
.3
-1.6
.2
0.0
.6
1.9
.5
283.4
204.9
5.5
4.5
6.1
6.2
6.4
5.9
6.7
6.7
7.7
5.1
9.1
4.7
5.2
3.3
6.5
9.5
8.5
7.0
9.5
5.3
6.5
6.0
7.0
6.3
.7
.7
.7
.6
.5
.4
.5
.6
.4
.3
.5
.4
.2
.3
.2
.4
.3
1.0
0.0
.4
172.9
152.1
186.8
184.7
-3.3
6.9
-13.1
8.4
12.7
13.8
2.5
2.1
-1.3
-.7
-.9
190.0
MEMO:
24 Consumer foods
1 Not 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.
SOURCE.—Bureau of Labor Statistics.
A46
2.16
Domestic Nonfinancial Statistics • October 1977
GROSS N A T I O N A L P R O D U C T A N D I N C O M E
Billions o f current dollars except as noted; quarterly data are at seasonally adjusted annual rates.
1976
Account
1974
1975
1977
1976
Q2
Q1
Q3
Q4
QL
Q2
Gross national product
1 Total
2
3
4
5
6
7
8
9
10
11
12
By source:
Personal consumption expenditures
Durable goods
Nondurable goods
Services
Gross private domestic investment
Fixed investment
Nonresidential
Structures
Producers' durable equipment
Residential structures
Nonfarm
1,412.9
1,528.8
1,706.5
1,651.2
1,691.9
1,727.3
1,755.4
1,810.8
N,869.9
889.6
122.0
376.3
391.3
980.4
132.9
409.3
438.2
1,094.0
158.9
442.7
492.3
1,056.0
153.3
430.4
472.4
1,078.5
156.7
437.1
484.6
1,102.2
159.3
444.7
498.2
1,139.0
166.3
458.8
513.9
1,172.4
177.0
466.6
528.8
1,194.0
178.6
474.4
541.1
214.6
205.7
150.6
54.5
96.2
55.1
52.7
189.1
200.6
149.1
52.9
96.3
51.5
49.5
243.3
230.0
161.9
55.8
106.1
68.0
65.7
231.3
216.8
155.4
54.7
100.8
61.4
58.9
244.4
226.1
159.8
55.8
104.0
66.3
64.1
254.3
232.8
164.9
56.0
109.0
67.8
65.7
243.4
244.3
167.6
57.0
110.6
76.7
74.3
271.8
258.0
177.0
57.9
119.2
81.0
78.5
294.9
273.2
182.4
61.0
121.4
90.8
88.2
13
14
Change i n business inventories
Nonfarm
8.9
10.8
-11.5
-15.1
13.3
14.9
14.5
15.9
18.3
20.4
21.5
22.0
-.9
1.4
13.8
14.1
21.7
22.4
15
16
17
Net exports of goods and services
Exports
Imports
6.0
137.9
131.9
2.0
147.3
126.9
7.8
162.9
155.1
10.2
153.9
143.7
10.2
160.6
150.4
7.9
168.4
160.6
3.0
168.5
165.6
-8.2
170.4
178.6
^-9.7
'•178.1
'•187.7
18
19
20
Govt, purchases of goods and services
Federal
State and local
302.7
111.1
191.5
338.9
123.3
215.6
361.4
130.1
231.2
353.6
127.6
225.9
358.9
128.5
230.4
363.0
130.2
232.7
370.0
134.2
235.8
374.9
136.3
238.5
390.6
143.6
247.0
1,404.0
638.6
247.8
390.8
626.8
147.4
1,540.3
686.2
258.2
428.0
699.2
143.5
1,693.1
764.2
303.4
460.9
782.0
160.2
1,636.7
744.6
285.6
459.0
751.6
155.0
1,673.7
761.7
301.9
459.7
770.8
159.4
1,705.8
746.0
313.4
464.1
791.8
159.6
1,756.3
774.7
312.6
460.6
813.8
166.9
1,797.0
805.9
334.4
471.5
833.7
171.2
'•1,848.2
827.1
341.0
486.1
'•855.3
187.5
8.9
7.1
1.8
-11.5
-9.2
-2.2
13.3
4.1
9.3
14.5
-2.0
16.6
18.3
7.0
11.2
21.5
10.7
12.4
-.9
.6
-3.1
13.8
7.8
6.0
21.7
11.5
10.2
1,217.8
1,202.1
1,274.7
1,256.0
1,271.5
1,283.7
1,287.4
1,311.0
A,330.7
21
22
23
24
25
26
27
28
29
30
By major type o f product:
Final sales, total
Goods
Durable goods
Nondurable
Services
Structures
Change i n business inventories
Durable goods
Nondurable goods
MEMO: T o t a l G N P in 1972 dollars
N a t i o n a l income
31 Total
1,136.0
1,217.0
1,364.1
1,321.0
1,353.9
1,379.6
1,402.1
1,450.2
'•1,505.7
875.8
764.1
160.0
604.1
111.7
930.3
805.7
175.4
630.3
124.6
1,036.3
891.8
187.2
704.6
144.5
999.6
861.5
182.7
678.8
138.1
1,024.9
882.4
185.4
697.0
142.5
1,046.5
900.2
188.2
712.0
146.3
1,074.2
923.2
192.5
730.7
150.9
1,109.9
951.3
194.8
756.4
158.6
1,144.7
980.9
197.2
783.6
163.8
56.1
55.6
59.8
64.9
68.6
75.9
66.4
71.7
68.0
74.5
69.1
77.3
70.9
80.0
75.4
83.2
11.\
86.7
39 Proprietors^ income^
40
Business and professional i
41
Farmi
86.4
60.9
25.4
86.0
62.8
23.2
88.0
69.4
18.6
86.9
66.9
20.0
90.4
68.8
21.6
86.2
70.0
16.2
88.7
72.0
16.6
95.1
74.3
20.7
97.0
77.3
19.7
42 Rental income o f persons 2
21.4
22.3
23.3
23.0
22.9
23.3
24.1
24.5
24.9
83.6
126.9
-40.4
-2.9
99.3
123.5
-12.0
-12.2
128.1
156.9
-14.1
-14.7
126.5
153.5
-12.4
-14.6
129.2
159.2
-15.5
-14.6
133.5
159.9
-11.7
-14.7
123.1
154.8
-16.9
-14.8
125.4
161.7
-20.6
-15.6
'•140.2
'•174.0
-17.8
-15.9
69.0
79.1
88.4
85.0
86.5
90.1
92.0
95.3
98.9
32 Compensation o f employees
33
Wages and salaries
34
Government and Government enterprises..
35
Other
36
Supplement to wages and salaries
37
Employer contributions for social
insurance
38
Other labor income
43 Corporate profits 1
44
Profits before tax 3
46
Capital consumption adjustment
47 N e t interest
1 W i t h inventory valuation and capital consumption adjustments.
2 W i t h capital consumption adjustments.
3 For after-tax profits, dividends, etc., see Table 1.50.
SOURCE.—^wrvej' of Current Business (U.S. Dept. o f Commerce).
National Income Accounts
2.17
A53
PERSONAL I N C O M E A N D SAVING
Billions o f current dollars; quarterly data are at seasonally adjusted annual rates. Exceptions noted.
1977
1976
1974
1975
1976
Account
Ql
Q2
Q3
Q4
Ql
Q2
Personal income and saving
1 Total personal income
1,154.9
1,253.4
1,382.7
1,338.1
1,366.7
1,393.9
1,432.2
1,476.8
1,517.2
764.6
274.6
211.4
184.3
145.1
160.5
805.7
275.0
211.0
195.4
159.9
175.4
891.8
308.4
238.2
217.1
179.0
187.2
861.5
298.6
230.6
208.2
172.0
182.7
882.4
306.7
236.7
213.7
176.6
185.4
900.2
310.8
240.2
220.2
180.9
188.2
923.2
317.7
245.1
226.4
186.7
192.5
951.3
328.9
255.4
234.5
193.0
194.8
980.9
345.4
265.9
240.5
197.7
197.2
55.6
64.9
75.9
71.7
74.5
77.3
80.0
83.2
86.7
9 Proprietors^ income^
10
Business and professional i
11
Farmi
86.2
60.9
25.4
86.0
62.8
23.2
88.0
69.4
18.6
86.9
66.9
20.0
90.4
68.8
21.6
86.2
70.0
16.2
88.7
72.0
16.6
95.1
74.3
20.7
97.0
77.3
19.7
12 Rental income o f persons 2
21.4
22.3
23.3
23.0
22.9
23.3
24.1
24.5
24.9
13 Dividends
31.0
32.4
35.8
33.6
35.0
36.0
38.4
38.5
40.3
14 Personal interest income
103.0
115.6
130.3
125.0
127.5
132.2
136.4
140.3
145.4
15 Transfer payments
16
Old-age survivors, disability, and health
insurance benefits
140.8
176.8
192.8
190.3
188.7
194.3
198.0
203.5
203.0
70.1
81.4
92.9
88.1
89.3
95.8
98.4
99.9
101.8
2 Wage and salary disbursements
3
Commodity-producing industries
4
Manufacturing
5
Distributive industries
6
Service industries
7
Government and government enterprises
8 Other labor income
17
LESS: Personal contributions for social
insurance
18 EQUALS: Personal income
19
LESS: Personal tax and nontax payments
47.7
50.4
55.2
53.9
54.8
55.6
56.6
59.6
60.8
1,154.9
1,253.4
1,382.7
1,338.1
1,366.7
1,393.9
1,432.2
1,476.8
1,517.2
170.3
169.0
196.9
184.8
192.6
200.6
209.5
224.4
224.8
20 EQUALS: Disposable personal income
984.6
1,084.4
1,185.8
1,153.3
1,174.1
1,193.3
1,222.6
1,252.4
1,292.5
21
LESS: Personal outlays
913.0
1,004.2
1,119.9
1,080.9
1,103.8
1,128.5
1,166.3
1,201.0
1,223.9
22 EQUALS : Personal saving
71.7
80.2
65.9
72.4
70.3
64.8
56.3
51.4
68.5
5,746
3,589
3,973
7.3
5,629
3,629
4,014
7.4
5,924
3,817
4,137
5.6
5,853
3,761
4,107
6.3
5,916
3,794
4,130
6.0
5,961
3,820
4,135
5.4
5,966
3,892
4,177
4.6
6,064
3,934
4,202
4.1
6,143
3,943
4,268
5.3
M E M O ITEMS :
Per capita (1972 dollars):
23
Gross national product
24
Personal consumption expenditures
25
Disposable personal income
26 Saving rate (per cent)
Gross saving
27 Gross private saving
28
29
Personal saving
Undistributed corporate profits i
30
Corporate inventory valuation adjustment
31
32
33
Capital consumption allowances:
Corporate
Noncorporate
Wage accruals less disbursements
34 Government surplus^ or deficit (—),
income and product accounts
35
Federal
36
State and local
209.5
259.4
272.5
276.0
275.4
277.2
261.6
262.9
'^292.1
71.7
.2
-40.4
80.2
16.7
-12.0
65.9
27.6
-14.1
72.4
29.8
-12.4
70.3
28.0
-15.5
64.8
31.6
-11.7
56.3
20.8
-16.9
51.4
22.5
-20.6
68.5
'•30.3
-17.8
84.6
53.1
101.7
60.8
111.8
67.2
108.7
65.1
110.4
66.6
112.9
68.0
115.2
69.2
117.6
71.4
119.4
73.8
-3.2
-10.7
7.6
-64.3
-70.2
5.9
-35.6
-54.0
18.4
-47.1
-60.3
13.3
-33.3
-46.2
12.9
-32.4
-53.5
21.1
-29.4
-55.9
26.5
-11.5
-38.8
27.3
^-14.9
'•-40.3
25.4
210.1
214.6
-4.5
201.0
189.1
11.8
242.5
243.3
-.9
233.1
231.3
1.8
246.5
244.4
2.2
252.8
254.1
-1.5
237.5
243.3
-5.9
254.7
271.8
-17.1
'•-18.8
5.8
5.9
5.5
4.2
4.5
8.0
5.3
3.3
'•-1.2
national
37 Capital grants received by the United States,
net
38 Investment
39
Gross private domestic
40
Net foreign
41 Statistical discrepancy
;
1 W i t h inventory valuation and capital consumption adjustments.
2 W i t h capital consumption adjustment.
^276.1
294.9
SOURCE.—Survey of Current Business (U.S. D e p t . o f Commerce).
A54
3.10
International Statistics • October 1977
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
Summary
M i l l i o n s o f dollars; quarterly data are seasonally adjusted except as noted.^
191ir
1976''
I t e m credits or debits
1974
1975
1976'-
Q1
Q2
Q3
Q4
Q2
Ql
1 Merchandise exports
2 Merchandise imports
3
Merchandise trade balance 2
98,306
103,673
-5,367
107,088
98,043
9,045
114,694
124,014
-9,320
27,000
28,343
-1,343
28,380
29,955
-1,575
29,603
32,411
-2,808
29,711
33,305
-3,594
29,458
36,561
-7,103
30,488
38,347
-7,859
4 M i l i t a r y transactions, net
5 Investment income, net
6 Other service transactions, net
-2,083
8,744
865
-876
5,954
2,042
366
9,808
2,743
-65
2,437
523
-39
2,280
839
235
2,667
781
235
2,424
598
516
3,252
340
464
3,401
629
7 Balance on goods and services 3
8 Remittances, pensions, and other transfers
9 U.S. G o v t , grants (excluding military)
10 Balance on current account
11
Not seasonally adjusted
12 Change i n U.S. G o v t , assets, other than official reserve
assets, net (increase, —)
2,160
16,164
3,596
1,552
1,505
875
-337
-2,995
-3,365
-1,714
-5,475
-1,719
-2,893
-1,878
-3,146
-485
-544
-459
-556
-461
-1,475
-473
-572
-526
-637
-505
-735
-5,028
11,552
-1,427
523
1,458
490
621
-1,061
-3,809
-1,382
303
-4,158
-3,409
-4,605
-4,812
365
-3,463
-4,213
-723
-944
-1,405
-1,142
-909
-827
-388
-58
6
13 Change in U.S. official reserve assets {increase, —)
14
Gold
SDK's
15
16
Reserve position i n I M F
17
Foreign currencies
••••-i72 " " - 6 6 " " - 7 8 " " - 4 5
-1,265
-237
-466 -2,212
-240
-491
3
-75
18 Change in U.S. private assets abroad (increase, —)
-25,960
-36,216
-9,254
-7,257
-6,597 -13,108
1,627 - 1 0 , 9 5 2
19
20
21
Bank-reported claims
Long-term
Short-term
-13,532
-20,904
-19,516
-1,183 -2,357 -2,124
-18,333 -11,175 -18,780
-3,630
-289
-3,341
-4,754
-377
-4,377
-3,372
-978
-2,394
-9,148
-480
-8,668
3,446
-306
3,752
-5,426
-28
-5,398
22
23
24
25
26
Nonbank-reported
claims
Long-term
Short-term
U.S. purchase o f foreign securities, net
U.S. direct investments abroad, net
-1,434
-607
2,530
-773
-1,578
-407
U
-798
-794
-228
" " - ' i s • • • • -29
••••-83
-461 ' " - 3 8 9
-80
-716
718
169
59
327
-3,221
-474
-2,747
-1,854
-1,368
-1,447
-432
-1,015
-6,236
-6,264
-1,986
10
-1,996
-8,730
-4,596
-738
-191
-547
-2,460
-2,427
-1,004
145
-1,149
-1,357
-142
723
66
657
-2,743
-1,205
-967
-10
-957
-2,171
-822
-722
45
-767
-692
-404
-1,179
85
-1,264
-1,746
-2,602
27 Change in foreign official assets in the United States {increase, +)
28
U.S. Treasury securities
29
Other U.S. G o v t , obligations
30
Other U.S. G o v t , liabilities 4
31
Other U.S. liabilities reported by U.S. banks
32
Other foreign official assets 5
10,981
3,282
902
724
5,818
254
6,960
4,408
905
1,701
-2,158
2,104
17,945
9,333
566
4,938
893
2,215
3,847
1,998
68
1,524
-412
669
4,051
2,166
316
743
135
691
3,070
1,260
66
1,819
-599
524
6,977
3,909
116
852
1,769
331
5,719
5,149
100
712
-420
178
6,935
4,757
588
307
410
873
33 Change in foreign private assets in the United States (increase, + )
22,631
7,376
16,575
3,009
3,333
5,132
5,102
-3,209
6,056
16,017
9
16,008
1,844
-90
1,934
628
-280
908
240
334
-94
10,982
175
10,807
-616
-947
331
672
-105
111
161
-233
394
3,528
-16
3,544
-238
-162
-16
1,774
15
1,699
-297
-241
-56
5,008
221
4,787
-242
-311
69
-5,298
47
-5,345
-374
-229
-145
6,321
98
6,223
-298
-102
-196
697
378
3,695
2,590
2,503
1,414
2,783
1,250
2,176
437
1,030
709
-592
131
504
3,026
68
561
-88
21
403
1,047
879
537
-1,273
820
486
"'3,372
111
"l',905
129
"i',268
-2,622
1,780
34
35
36
37
38
39
40
41
42
U.S. bank-reported liabilities.
Long-term
Short-term
U.S. nonbank-reported liabilities
Long-term
Short-term
Foreign private purchases o f U.S. Treasury securities,
net
Foreign purchases o f other U.S. securities, net
Foreign direct investments i n the LFnited States, net
43 A l l o c a t i o n o f SDR's
44 Discrepancy
45
O w i n g to seasonal adjustments
46
Statistical discrepancy i n recorded data before seasonal
adjustment
"-l',5'55
-1,555
"5',66b
"9,866
"l',yi7
'y,388
-205
. 524
5,660
9,866
2,655
1,776
3,890
1,545
3,593
793
M E M O ITEMS :
Changes i n official assets:
47
U.S. official reserve assets (increase, —)
48
Foreign official assets i n the U.S. (increase, + )
49 Changes i n O P E C official assets i n the U.S. (part o f line
27 above
50 Transfers under m i l i t a r y grant programs (excluded f r o m
lines 1, 4, and 9 above)
-1,434
10,257
-607
5,259
-2,530
13,007
-773
2,323
-1,578
3,308
-407
1,251
228
6,125
-388
5,007
10,841
7,092
9,324
3,482
3,263
1,774
805
3,249
1,817
2,217
386
50
86
156
94
46
1 Seasonal factors are no longer calculated f o r lines 13 t h r o u g h 50.
2 D a t a are on an international accounts ( l A ) basis. Differs f r o m the
Census basis primarily because the l A basis includes imports i n t o the
U.S. V i r g i n Islands, and it excludes m i l i t a r y exports, w h i c h are part o f
L i n e 4.
3 Differs f r o m the definition o f " n e t exports o f goods and services" i n
the national income and p r o d u c t ( G N P ) account. The G N P definition
6
6,628
824
28
excludes certain m i l i t a r y sales t o Israel f r o m exports and excludes U.S.
G o v t , interest payments f r o m imports.
4 Primarily associated w i t h m i l i t a r y sales contracts and other transactions arranged w i t h or t h r o u g h foreign official agencies.
5 Consists o f investments i n U.S. corporate stocks and i n debt securities o f private corporations and state and local governments.
NOTE.—Data are f r o m Bureau o f Economic Analysis, Survey of Current Business (U.S. Department o f Commerce).
Trade and Reserve Assets
3.11
A55
U.S. F O R E I G N T R A D E
M i l l i o n s o f dollars; monthly data are seasonally adjusted.
1977
1975
1974
Item
1 E X P O K T S o f domestic and foreign
merchandise excluding grant-aid
shipments
97,908
2 GENEKAL IMPOKTS
including
merchandise for immediate consumption plus entries into bonded
warehouses
3 Trade balance
1976
Mar.
Apr.
May
June
July
10,072
9,970
10,395
10,112
10,150
Aug.
107,130
114,802
9,808
100,252
96,115
120,678
11,674
12,459
12,593
11,616
12,932
12,476
12,232
-2,344
+11,014
-5,876
-1,866
-2,387
-2,623
-1,221
-2,820
-2,326
-2,669
NOTE.—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. O n 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
Feb.
9,563
exports (which are combined w i t h other military transactions and are
reported separately in the "service account"). O n the import side, the
largest single adjustment is the addition o f imports into the V i r g i n Islands
(largely o i l for a refinery on St. Croix), which are not included in Census
statistics.
SOURCE.—FT 900 " S u m m a r y o f U.S. Export and I m p o r t Merchandise
T r a d e " (U.S. Dept. o f Commerce, Bureau o f the Census).
U.S. RESERVE ASSETS
M i l l i o n s o f dollars, end o f period
1977
1974
Type
1 Total
2 G o l d stock, including
Stabilization F u n d i
1975
1976
Mar.
Apr.
May
June
July
Aug.
15,883
16,226
18,747
19,120
18,868
19,195
19,156
18,927
19,055
Sept.J'
318,988
Exchange
11,652
11,599
11,598
11,658
11,658
11,658
11,658
11,658
11,658
11,658
3 Special D r a w i n g Kights2
2,374
2,335
2,395
2,389
2,384
2,470
2,486
2,498
2,483
3 2,489
4 Keserve position i n
Monetary F u n d
1,852
2,212
4,434
4,812
4,720
4,972
4,920
4,716
4,859
3 4,776
5
80
320
261
106
95
92
55
55
65
International
5 Convertible foreign currencies
1 G o l d held under earmark 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 Monetary Fund o f SDK's
as follows: $867 m i l l i o n on Jan. 1, 1970; $717 m i l l i o n on Jan. 1, 1971;
and $710 m i l l i o n on Jan. 1, 1972; plus net transactions i n SDK's.
3 Beginning July 1974, the I M F adopted a technique for valuing the
S D K based on a weighted average o f exchange rates for the currencies
o f 16 member countries. The U.S. S D K holdings and reserve position i n
the I M F also are valued on this basis beginning July 1974. A t valuation
used prior to July 1974 ( S D K l = $1.20635) total U.S. reserve assets
at end o f Sept. amounted to $19,134; S D K holdings, $2,581, and reserve
position i n I M F , $4,830.
A56
3.13
International Statistics • October 1977
SELECTED U.S. L I A B I L I T I E S TO FOREIGNERS
M i l l i o n s o f dollars, end o f period
1977
Holder, and type o f liability
1974
1975
1976
Feb.
Aug.p
157,020
161,224
163,096
168,545
166,087
149,306
152,532
154,913
162,124
158,930
91,975
93,972
96,788
99,748
101,546
103,099
107,150
107,560
49,530
53,619
54,910
56,046
57,486
58,260
57,413
60,059
56,773
5,059
16,339
6,671
19,976
11,788
20,648
12,725
20,495
13,772
21,106
14,694
20,976
15,846
20,950
17,808
20,917
18,856
20,837
22,522
20,655
2,346
4,535
5,920
5,842
5,864
6,592
6,490
6,961
7,398
7,610
30,106
29,516
37,329
33,116
32,816
35,356
36,239
36,677
40,016
36,028
8,913
10,701
13,569
14,141
14,166
14,202
14,747
15,137
14,958
15,260
8,415
10,000
12,592
13,120
13,008
12,873
13,393
13,615
13,376
13,666
498
701
977
1,021
1,158
1,329
1,354
1,522
1,582
1,676
3,322
5,623
8,483
7,985
8,101
7,714
8,692
8,183
6,421
7,157
3,171
5,292
5,450
3,918
4,282
5,287
6,557
5,727
3,835
4,217
151
331
3,033
4,067
3,819
2
2,135
2,456
2,586
2,940
80,712
53,079
151,356
1 Includes Bank for International Settlements.
2 Includes Treasury bills as shown i n 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. corporations.
6 Includes short-term liabilities payable i n foreign currencies to commercial banks abroad and to other foreigners.
7 Includes marketable U.S. Treasury bonds and notes held by commercial banks abroad and other foreigners.
3.14
Julyf
151,871
76,823
12 Nonmonetary international and
regional organization 8
13
Short-term, reported by banks
in the United States 2
14
Marketable
U.S.
Treasury
bonds and notes 3
June
143,770
126,552
120,929
9 Other foreigners
10
Short-term, reported by banks in
the United States 2
11
Marketable U.S. Treasury bonds
and notes3,7
May
149,241
119,164
115,842
Commercial banks abroad:
8
Short-term, reported by banks in
the United States2,6
Apr.
141,256
1 Total
2 Foreign countries
3 Official institutions^
4
Short-term, reported by banks i n
the United States. 2
U.S. Treasury bonds and notes:
5
Marketable 3
6
Nonmarketable4
7
Other readily marketable
liabilities 5
Mar.
All
8 Principally the International Bank for Reconstruction and Development and the Inter-American and Asian Development Banks.
NOTE.—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 a t a exclude the holdings o f dollars o f the International Monetary Fund derived f r o m payments o f the U.S. subscription,
and f r o m the exchange transactions and other operations o f the I M F .
D a t a also exclude U.S. Treasury letters o f credit and nonnegotiable, noninterest-bearing special U.S. notes held by nonmonetary international
and regional organizations.
SELECTED U.S. L I A B I L I T I E S TO F O R E I G N O F F I C I A L I N S T I T U T I O N S
Millions o f dollars, end o f period
1977
Area
1974
1975
1976
Feb.
Mar.
Apr.
May
June
Julyf
Aug.?'
1 Total
76,823
80,712
91,975
93,972
96,788
99,748
101,546
103,099
107,150
107,560
2
3
4
5
6
7
44,328
3,662
4,419
18,627
3,160
2,627
45,701
3,132
4,450
22,551
2,983
1,895
45,882
3,406
4,906
34,108
1,893
1,780
46,136
2,844
4,595
36,474
1,770
2,153
47,929
2,684
4,834
37,730
1,628
1,983
48,733
2,752
4,396
39,946
1,883
2,038
50,048
2,798
4.672
40,331
1.821
1,876
52,789
2,699
4,240
39,835
1,938
1,600
55,219
2,653
4,338
41,163
2,460
1,317
57,277
2,557
4,248
40,329
2,265
884
Western Europe i
Canada
L a t i n American republics
Asia
Africa
Other countries 2
1 Includes Bank for International Settlements.
2 Includes countries in Oceania and Eastern Europe, and Western
European dependencies in L a t i n America.
NOTE.—^Data represent breakdown by area o f line 3, Table 3.13.
Bank-reported Data
3.15
A57
Reported by Banks in the United States
SHORT-TERM LIABILITIES TO FOREIGNERS
By Holder and by Type of Liability
M i l l i o n s o f dollars, end o f period
1977
H o l d e r , and type o f liability
1974
1975
1976
Feb.
Mar.
Apr.
June
May
JulyP
Aug.J*
1 A l l foreigners, excluding the International
Monetary Fund
94.771
94,338
108,990
105,064
106,152
111,002
114,449
113,432
117,286
110,684
2
94,004
93,780
108,266
104,249
105,291
110,194
113,796
112,758
116,326
109,792
14,051
9,932
35,662
34,359
13,564
10,250
37,414
32,552
16,803
11,316
40,744
39,403
16,098
11,319
42,669
34,164
15,101
11,244
43,498
35,448
15,382
11,282
44,661
38,869
16,732
11,612
45,463
39,990
16,272
12,082
44,110
40,294
17,496
11,843
44,413
42,574
15,946
11,178
42,243
39,825
766
558
724
815
861
809
653
675
960
892
3,171
5,293
5,450
3,918
4,283
5,287
6,557
5,728
3,834
4,211
3,171
5,284
5,445
3,912
4,279
5,284
6,551
5,715
3,819
4,179
139
111
497
2,424
139
148
2,554
2,443
290
205
2,701
2,250
216
237
2,779
680
203
241
2,743
1,093
119
207
2,849
2,109
172
167
2,977
3,234
228
156
2,521
2,811
122
154
2,191
1,352
142
147
1,990
1,901
8
5
6
3
3
6
13
15
38
15 Official institutions, banks, and other foreigners..
91,600
89,046
103,540
101,146
101,870
105,715
107,892
107,705
113,451 106,467
16
90,834
88,497
102,821
100,337
101,012
104,910
107,246
107,043
112,507
13,912
9,796
35,165
31,961
13,426
10,102
34,860
30,109
3
4
5
6
Payable in dollars
Deposits:
Demand
Timei
U.S. Treasury bills and certificates 2
Other short-term liabilities 3
7
Payable in foreign currencies
8 Nonmonetary international and regional
organizations'^
10
11
12
13
Payable in dollars
Deposits :
Demand
TimeV
U.S. Treasury bills and certificates
Other short-term liabilities 5
14
Pnvnhlfi in fnreien rurrenries
9
17
18
19
20
Payable in dollars
Deposits:
Demand
Timei
U.S. Treasury bills and certificates2
Other short-term liabilities 3
21
Payable in foreign currencies
16,513
11,112
38,042
37,153
15,882
11,081
39,889
33,484
14,898
11,003
40,755
34,355
15,262
11,076
41,812
36,760
16,559
11,445
42,485
36,756
16,044
11,926
41,589
37,483
11,31A
11,689
42,221
41,222
105,613
15,804
11,631
40,253
37,925
766
549
719
809
858
805
647
662
945
854
22 Official institutions <»
53,079
49,530
53,619
54,910
56,046
57,486
58,260
57,413
60,059
56,773
23
52,952
49,530
53,619
54,910
56,046
57,486
58,260
57,413
60,059
56,773
2,951
4,167
34,656
11,178
2,644
3,423
34,199
9,264
3,394
2,321
37,725
10,179
2,406
2,408
39,559
10,537
2,638
2,266
40,399
10,744
2,747
2,335
41,508
10,896
2,676
2,441
42,197
10,947
2,705
2,506
41,322
10,880
3,642
2,401
41,926
12,090
3,122
2,241
39,810
11,600
38,520
39,515
49,921
46,236
45,824
48,230
49,362
50,292
53,392
49,693
Payable in dollars
Banks 7
Deposits:
Demand
Timei
U.S. Treasury bills and certificates
Other short-term liabilities 3
37,881
29,467
38,966
28,966
49,202
36,610
45,427
32,301
44,966
31,958
47,424
34,551
48,985
35,592
49,630
36,015
52,448
39,071
48,839
35,174
8,231
1,885
232
19,119
7,534
1,856
335
19,241
9,104
2,267
119
25,120
9,385
1,797
102
21,023
8,392
1,742
108
21,716
8,712
1,675
104
24,060
9,772
1,808
108
23,904
9,551
2,128
100
24,236
10,137
1,836
144
26,955
8,931
1,898
136
24,209
Other foreigners
Deposits:
Demand
Timei
U.S. Treasury bills and certificates
Other short-term liabilities 5
8,414
10,000
12,592
13,120
13,008
12,873
13,393
13,614
13,377
13,666
2,729
3,744
277
1,664
3,248
4,823
325
1,604
4,015
6,524
198
1,854
4,091
6,877
229
1,924
3,868
6,996
248
1,896
3,803
7,065
201
1,804
4,111
7,196
180
1,906
3,788
7,292
167
2,367
3,595
7,453
151
2,Ml
3,751
7,492
307
2,116
639
549
719
809
858
805
647
662
945
854
24
25
26
27
Payable in dollars
Deposits:
Demand
Timei
U.S. Treasury bills and certificates2
Other short-term liabilities 5
Pnvnhip in fareian rurrp.nri4>x
29 Banks and other foreigners
30
31
32
33
34
35
36
37
38
39
40
41
Payable in foreign currencies
127
1 Excludes negotiable time certificates o f deposit, which are included
i n " O t h e r short-term liabilities."
2 Includes nonmarketable 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 t o 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 f o r Reconstruction and Development, 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 f o r International Settlements.
7 Excludes central banks, which are included i n " O f f i c i a l institutions."
NOTE.—^"Short-term obligations" are those payable on demand, or
having an original maturity o f 1 year or less.
A58
International Statistics • October 1977
3.16
SHORT-TERM LIABILITIES TO FOREIGNERS
By Country
Reported by Banks in the United States
Millions o f dollars, end o f period
1977
Area and country
1974
1975
1976
Feb.
Mar.
Apr.
May
June
Julyf
Aug.p
1 Total
94,771
94,338 108,990 105,064 106,152 111,002 114,449 113,432 117,286 110,684
2 Foreign countries
91,600
89,046 103,540 101,146 101,870 105,715 107,892 107,705 113,451 106,467
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
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
Europe
Austria
Belgium-Luxembourg
Denmark
Finland
France
Germany
Greece
Italy
Netherlands
Norway
Portugal
Spain
Sweden
Switzerland
Turkey
United Kingdom
Yugoslavia
Other Western Europe i
U.S.S.R
Other Eastern Europe
46,938
348
2,275
363
422
4,875
5,965
403
3,206
3,007
785
239
561
1,693
9,458
166
10,004
188
2,672
51
255
43,630
401
2,419
419
370
4,610
5,495
346
2,703
2,817
793
228
542
1,593
9,634
82
8,715
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
45,049
506
2,609
809
306
4,748
4,490
350
2,625
2,924
906
184
501
2,047
8,798
81
10,704
111
2,132
41
176
48,232
409
2,641
974
242
4,920
4,825
409
3,509
3,111
999
238
586
2,431
8,436
68
11,959
102
2,136
66
172
49,627
465
2,704
1,178
258
5,089
4,271
556
4,636
3,545
1,195
163
667
2,390
9,323
127
10,701
115
2,009
73
162
50,604
455
2,822
1,154
209
4,745
4,937
573
5,422
3,397
1,203
222
642
1,963
9,162
101
11,250
125
1,973
88
160
48,933
498
2,691
1,032
210
4,894
4,415
709
5,538
3,328
1,139
169
543
1,782
9,382
203
10,192
142
1,845
70
151
24
Canada
3,520
3,076
4,784
4,815
4,324
4,823
4,869
4,253
4,456
4,631
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
Latin America
Argentina
Bahamas
Brazil
Chile
Colombia
Cuba
Mexico
Panama
Peru
Uruguay
Venezuela
Other Latin American republics
Netherlands Antilles 2
Other L a t i n America
11,754
886
1,054
1,034
276
305
7
1,770
510
111
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
19,026
1,538
2,750
1,432
335
1,017
6
2,848
1,140
257
245
3,095
2,081
140
2,142
18,656
1,820
2,434
1,272
302
1,152
6
2,782
1,002
228
239
3,038
2,258
157
1,966
19,052
1,890
2,184
1,108
403
1,201
6
2,747
1,001
246
241
2,927
2,429
162
2,508
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
19,944
1,971
2,744
1,175
432
1,172
8
2,764
984
219
251
2,992
2,HQ
215
2,745
20,771
1,699
3,777
1,357
393
1,196
7
2,832
941
224
234
2,463
2,376
207
3,066
23,038
1,754
5,518
1,398
373
1,220
6
2,869
1,015
241
242
2,532
2,238
158
3,476
21,551
2,022
4,5C8
1,233
353
1,164
6
2,788
959
273
230
2,887
2,154
180
2,893
40
41
42
43
44
45
46
47
48
49
50
51
52
Asia
China, People's Republic o f (Mainland)
China, Republic o f (Taiwan)
Hong K o n g
India
Indonesia
Israel
Japan
Korea
Philippines
Thailand
Middle East oil-exporting countries3
Other4
21,130
50
818
530
261
1,221
389
10,931
384
747
333
4,623
845
21,539
123
1,025
623
126
369
386
10,218
390
698
252
6,461
867
28,472
47
989
892
648
340
391
14,380
437
627
275
8,073
1,372
29,285
47
1,163
1,039
558
546
559
13,358
483
554
313
9,287
1,377
29,614
52
1,067
1,018
537
480
509
13,271
382
652
312
9,988
1,346
30,459
52
1,138
993
648
887
436
13,071
430
624
308
10,399
1,473
29,933
53
1,210
950
721
531
503
12,481
472
634
275
10,447
1,655
28,456
44
1,196
931
814
282
547
12,387
534
614
257
9,283
1,568
30,366
49
1,259
1,028
746
782
484
12,837
633
673
281
10,026
1,568
26,997
87
885
1,045
743
589
467
11,780
527
561
293
8,828
1,193
53
54
55
56
57
58
59
Africa
Egypt
Morocco
South Africa
Zaire
Oil-exporting countries 5
Other4
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
2,413
251
105
155
41
1,132
728
2,285
251
94
136
39
964
802
2,587
245
91
176
28
1,151
896
2,753
360
93
184
30
1,205
881
2,671
314
81
237
30
1,145
866
3,284
401
73
264
40
1,541
966
3,177
603
61
185
38
1,430
860
60
61
62
Other countries
Australia
A l l other
2,831
2,742
89
2,128
2,014
114
2,019
1,911
108
2,348
2,231
118
2,231
2,101
130
2,361
2,223
138
2,162
2,026
135
1,926
1,800
126
1,704
1,553
151
1,179
1,007
112
3,171
5,293
5,450
3,918
4,283
5,287
6,557
5,728
3,834
A,in
5,091
136
223
3,599
132
187
3,960
136
187
4,995
110
182
6,230
118
209
5,365
144
218
3,484
165
186
3,816
187
213
63 Nonmonetary international and regional
organizations
64
65
66
International
L a t i n American regional
Other regional 6
For notes see bottom o f p. A59.
2,900
202
69
5,064
187
42
Nonbank-reported
3.17
SHORT-TERM LIABILITIES TO FOREIGNERS
Supplemental " O t h e r " Countries ^
Data
A59
Reported by Banks in the United States
M i l l i o n s o f dollars, end o f period
1975
1977
1976
1975
Apr.
1
2
3
Other Western Europe
Cyprus
Iceland
Ireland, Republic o f .
Other L a t i n American republics
Bolivia
Costa Rica
D o m i n i c a n Republic
Ecuador
E l Salvador
Guatemala
Haiti
Honduras
Jamaica
Nicaragua
Paraguay
Surinam 2
T r i n i d a d and Tobago
Other L a t i n America:
23
Bermuda
24
British West Indies.
Dec.
17
20
29
Other Eastern Europe
Bulgaria
Czechoslovakia
German Democratic Republic.
Hungary
Poland
Rumania
10
11
12
13
14
15
16
17
18
19
20
21
22
Apr.
Dec.
Apr.
38
43
43
68
40
236
58
32
131
19
32
17
13
66
44
14
11
3
11
74
29
93
120
214
157
144
255
34
92
62
126
38
110
124
169
120
171
260
38
99
41
133
43
31
131
117
134
170
150
212
368
48
137
59
158
50
13
44
100
627
135
170
280
311
214
392
68
210
43
133
60
17
85
121
134
274
319
176
340
46
134
34
113
47
29
167
199
177
1,874 2,377
170
197
1,311 2,284
25
26
27
28
29
30
31
32
33
34
35
36
37
Other Asia
Afghanistan
Bangladesh
Burma
Cambodia
Jordan
Laos
Lebanon
Malaysia
Nepal
Pakistan
Singapore
Sri L a n k a (Ceylon)
Vietnam
38
39
40
41
42
43
44
45
46
47
48
Other Africa
Ethiopia (incl. Eritrea)
Ghana
I v o r y Coast
Kenya
Liberia
Southern Rhodesia
Sudan
Tanzania
Tunisia
Uganda
Zambia
A l l Other
49
N e w Zealand
1 Represents a partial breakdown o f the amounts shown i n the " O t h e r "
categories o n Table 3.16.
3.18
1976
A r e a and country
Area and country
L O N G - T E R M LIABILITIES TO FOREIGNERS
1977
Apr.
Dec.
Apr.
Dec.
Apr.
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
57
44
34
3
23
2
132
130
34
92
344
10
66
55
54
13
4
37
1
140
394
32
188
280
22
50
90
76
13
11
32
33
3
14
21
23
38
18
60
23
18
19
53
1
12
30
29
22
78
72
45
17
39
63
1
17
20
34
50
14
41
27
10
46
76
1
22
48
19
43
35
48
37
26
185
95
1
30
57
15
36
42
48
43
75
23
133
511
35
135
300
27
50
55
2 Surinam included w i t h Netherlands Antilles u n t i l January 1976.
Reported by Banks i n the United States
M i l l i o n s o f dollars, end o f period
1977
H o l d e r , and area or country
1 Total
1974
1975
1,285
1976
1,812
2,427
Feb.
Mar.
Apr.
May
June
Julyf
2,307
2,300
2,505
2,214
2,376
2,322
Aug.P
2,321
2 Nonmonetary international and regional
822
415
264
258
267
250
261
279
269
313
1,397
931
366
100
2,163
1,337
621
204
2,049
1,192
627
230
2,033
1,163
648
222
2.256
1,358
631
267
1,953
1,069
615
270
2,097
1,135
650
312
2,053
1,186
538
329
2,008
1,097
573
337
5
Banks, excluding central banks
6
Other foreigners
464
124
261
79
7
8
9
Area or c o u n t r y :
Europe
Germany
United Kingdom
226
146
59
330
214
66
570
346
124
580
296
122
571
354
103
583
304
131
579
297
133
628
312
147
634
307
162
664
308
169
19
115
23
140
29
230
29
267
37
263
35
264
34
254
35
280
33
287
27
304
94
7
894
8
1,236
96
1,104
67
1,091
67
1,304
68
1,015
69
1,130
18
1,075
18
972
34
3 Foreign countries
4
Official institutions, including central banks. . .
10
11
Canada
L a t i n America
12
13
M i d d l e East oil-exporting countries i
Other Asia 2
•
•
15
Other Africa4
1
1
16
A l l other countries
*
*
*
*
•
»
2
*
*
*
*
*
1
2
2
6
6
6
1
1
1
1
1
1
1
1
4 Includes African oil-exporting countries u n t i l December 1974.
1 Comprises Bahrain, Iran, I r a q , K u w a i t , Oman, Qatar, Saudi A r a b i a ,
and United A r a b Emirates (Trucial States).
2 Includes M i d d l e East oil-exporting countries u n t i l December 1974.
3 Comprises Algeria, Gabon, Libya, and Nigeria.
NOTE.—Long-term obligations are those having an original maturity
o f more than 1 year.
NOTES TO T A B L E 3.16:
1 Includes Bank f o r International Settlements.
2 Surinam included w i t h Netherlands Antilles u n t i l January 1976.
3 Comprises Bahrain, I r a n , I r a q , K u w a i t , Oman, Qatar, Saudi Arabia,
and United A r a b Emirates (Trucial States).
4 Includes oil-exporting countries u n t i l December 1974.
5 Comprises Algeria, Gabon, Libya, and Nigeria.
6 Asian, African, and European regional organizations, except BIS,
which is included i n " O t h e r Western Europe."
A60
3.19
International Statistics • October 1977
SHORT-TERM C L A I M S O N FOREIGNERS
By Country
Reported by Banks in the United States
Millions of dollars, end o f period
1977
Area and country
1974
1975
1976
Feb.
Mar.
Apr.
May
June
JulyP
Aug.p
1 Total
39,056
50,231
68,908
63,191
65,156
65,874
68,160
70,563
69,463
68,514
2 Foreign countries
39,055
50,229
68,903
63,186
65,150
65,869
68,156
70,550
69,454
68,503
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
416
49
370
300
71
16
249
167
237
86
4,718
38
27
103
108
12,122
44
662
85
139
1,445
517
79
929
304
98
65
373
180
485
176
6,179
41
52
99
171
10,695
42
611
64
131
1,372
623
85
802
510
139
90
315
85
530
207
4,658
60
60
95
215
10,896
58
570
67
141
1,337
535
54
870
252
133
98
291
77
496
274
5,230
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
12,913
43
589
84
130
1,546
503
65
979
362
148
100
302
79
473
322
6,803
55
40
82
209
13,769
53
759
85
113
1,455
575
51
875
480
124
97
284
101
484
333
7,485
58
51
90
216
12,707
63
505
86
101
1,462
647
66
972
471
121
110
323
153
488
333
6,458
49
42
88
169
12,326
53
465
100
103
1,469
671
68
1,007
371
135
138
344
152
533
329
6,055
35
47
81
169
3 Europe
4
Austria
5
Belgium-Luxembourg
6
Denmark
7
Finland
8
France
9
Germany
10
Greece
11
Italy
12
Netherlands
13
Norway
14
Portugal
15
Spain
16
Sweden
17
Switzerland
18
Turkey
19
United Kingdom
20
Yugoslavia
21
Other Western Europe
22
U.S.S.R
23
Other Eastern Europe
24 Canada
2,776
2,817
3,049
3,461
3,737
3,701
3,554
3,607
3,728
3,977
25 Latin America
26
Argentina
27
Bahamas
28
Brazil
29
Chile
30
Colombia
31
Cuba
32
Mexico
33
Panama
34
Peru
35
Uruguay
36
Venezuela
37
Other Latin American republics
38
Netherlands Antilles 1
39
Other Latin America
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
34,039
964
15,336
3,322
387
586
13
3,432
1,026
704
38
1,564
1,125
40
5,503
31,391
867
14,099
3,089
371
598
13
3,333
869
748
39
1,265
1,108
41
4,953
32,017
914
15,431
2,948
357
544
13
3,295
849
733
39
1,241
1,132
41
4,482
31,789
873
14,157
3,186
420
565
13
3,302
753
756
35
1,197
1,079
54
5,401
32,560
886
15,127
3,061
362
505
13
3,249
840
741
36
1,359
1,176
36
5,170
33,413
904
16,058
3,030
349
495
13
3,204
905
797
32
1,348
1,144
69
5,066
33,326
839
15,061
2,984
373
514
13
3,469
1,278
796
38
1,421
1,181
64
5,295
32,731
856
13,532
3,052
382
539
13
3,458
1,463
784
39
1,430
1,233
57
5,893
40 Asia
41
China, People's Republic o f (Mainland)
42
China, Republic o f (Taiwan)
43
Hong K o n g
44
India
45
Indonesia
46
Israel
47
Japan
48
Korea
49
Philippmes
50
Thailand
51
Middle East oil-exporting countries^
52
Other3
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
17,672
3
991
271
41
76
551
10,997
1,714
559
422
1,312
735
15,442
30
1,086
265
23
55
334
9,471
1,562
479
446
1,040
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
16,606
15
1,221
298
34
39
280
9,591
1,912
498
519
1,469
730
16,979
30
1,259
337
39
72
334
9,935
1,861
418
558
1,275
860
17,025
13
1,275
359
25
65
311
9,698
1,981
372
584
1,476
867
16,807
9
1,236
271
65
56
323
9,601
2,067
478
580
1,368
753
53 Africa
54
Egypt
55
Morocco
56
South Africa
57
Zaire
Oil-exporting countries ^
58
59
Other 3
855
111
18
329
98
115
185
1,228
101
9
545
34
231
308
1,481
127
13
763
29
253
296
1,480
126
13
797
11
246
286
1,603
149
26
792
10
343
283
1,572
146
35
783
8
291
309
1,559
152
34
778
7
243
344
1,773
141
36
810
9
422
355
1,658
158
46
821
8
290
333
1,720
149
43
799
6
357
365
60 Other countries
61
Australia
62
A l l other
565
466
99
609
535
73
540
441
99
717
592
125
779
663
116
1,013
894
119
963
846
117
1,009
878
132
1,010
861
150
941
793
148
1
5
5
6
5
4
13
10
11
63 Nonmonetary international and regional
organizations
*
1 Includes Surinam until January 1976.
2 Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia,
and United Arab Emirates (Trucial States).
3 Includes oil-exporting countries until December 1974.
4 Comprises Algeria, Gabon, Libya, and Nigeria.
Nonbank-reported
3.20
SHORT-TERM C L A I M S O N FOREIGNERS
By Type of Claim
Data
A61
Reported by Banks in the United States
M i l l i o n s o f dollars, end o f period
1977
Type
1974
1976
1975
Feb.
Mar.
Apr.
May
June
JulyP
Aug.P
1 Total
39,056
50,231
68,908
63,191
65,156
65,874
68,160
70,563
69,463
68,514
2 Payable in dollars
37,859
48,888
67,263
61,232
63,259
64A88
66,396
68,784
67,797
66,579
3
4
5
6
Loans, total
Official institutions, including central banks.
Banks, excluding central banks
A l l other, including nonmonetary international and regional organizations
11,287
381
7,332
13,200
613
7,665
18,141
1,448
11,142
15,989
943
9,755
15,766
784
9,740
16,396
741
10,550
16,647
967
10,638
16,074
983
9,985
17,602
852
11,523
16,718
1,018
10,562
3,574
4,921
5,552
5,291
5,241
5,105
5,041
5,105
5,228
5,138
7
8
9
Collections outstanding
Acceptances made for accounts o f foreigners...
Other claims 1
5,637
11,237
9,694
5,467
11,147
19,075
5,756
12,358
31,007
5,868
12,009
21,367
6,190
12,790
28,513
6,316
12,976
28,499
6,317
13,045
30,387
6,417
13,166
33,127
6,352
13,390
30,453
6,187
13,517
30,156
1,196
1,342
1,686
1,764
1,779
1,667
1,935
11
12
13
Deposits w i t h foreigners
Foreign government securities, commercial
Other claims
1,645
1,959
1,897
669
656
1,063
1,091
1,100
918
864
845
817
1,036
289
238
314
372
89
493
272
596
323
474
332
436
377
522
302
631
211
572
233
667
1 Includes claims o f U.S. banks on their foreign branches and claims
o f U.S. agencies and branches o f foreign banks o n their head offices and
foreign branches o f their head offices.
NOTE.—Short-term claims are principally the following items payable
o n demand or w i t h a contractual maturity o f not more than 1 year: loans
3.21
L O N G - T E R M CLAIMS O N FOREIGNERS
made to, and acceptances made for, foreigners; drafts drawn against
foreigners, where collection is being made by banks and bankers f o r
their o w n account or for accoimt o f their customers i n the U n i t e d States;
and foreign currency balances held abroad by banks and bankers and
their customers in the United States. Excludes foreign currencies held
by U.S. monetary authorities.
Reported by Banks in the United States
M i l l i o n s o f dollars, end o f period
1977
Type, and area or country
1 Total
By type:
2
Payable in dollars
1974
7,179
1975
1976
9,536
11,898
Feb.
Mar.
Apr.
May
June
Julyp
Aug.f
12,065
12,204
12,458
12,294
12,191
12,212
12,418
7,099
9,419
11,750
11,855
12,015
12,257
12,091
11,991
12,010
12,199
6,490
1,324
929
8,316
1,351
1,567
10,097
1,407
2,232
10,329
1,531
2,231
10,411
1,625
2,194
10,534
1,647
2,193
10,399
1,642
2,273
10,296
1,653
2,260
10,325
1,676
2,245
10,474
1,684
2,277
4,237
5,399
6,458
6,567
6,591
6,693
6,484
6,383
6,404
6,514
609
1,103
1,653
1,526
1,604
1,723
1,693
1,695
1,685
1,725
80
116
148
211
190
201
202
200
202
218
B y area or country:
9
Europe
10
Canada
11
L a t i n America
1,908
501
2,614
2,1OA
555
3,468
3,314
637
4,870
3,444
587
4,966
3,616
566
4,911
3,698
558
4,990
3,650
501
5,042
3,687
483
5,016
3,606
485
5,045
3,659
455
5,207
12
13
14
15
Asia
Japan
M i d d l e East oil-exporting countries i
Other Asia 2
1,619
258
384
977
1,795
296
220
1,279
1,904
382
146
1,376
1,874
367
133
1,374
1,896
417
152
1,327
1,933
416
149
1,368
1,884
420
149
1,316
1,832
410
151
1,271
1,865
420
156
1,288
1,855
375
182
1,298
16
17
18
Africa
Oil-exporting countries 3
Other 4
366
62
305
747
151
596
890
271
619
875
210
665
890
211
678
953
228
725
898
213
685
860
213
647
857
191
666
898
219
679
19
A l l other countries 5
171
267
282
319
327
327
319
313
353
344
3
4
5
6
Loans, total
Official institutions, including central banks
Banks, excluding central banks
A l l other, including nonmonetary international and regional organizations
7
Other long-term claims
8
Payable in foreign currencies
1 Comprises Bahrain, Iran, Iraq, K u w a i t , Oman, Qatar, Saudi Arabia,
and United A r a b Emirates (Trucial States).
2 Includes M i d d l e East oil-exporting countries u n t i l December 1974.
3 Comprises Algeria, Gabon, Libya, and Nigeria.
4 Includes oil-exporting countries until December 1974.
5 Includes nonmonetary international and regional organizations.
A62
3.22
International Statistics • October 1977
F O R E I G N B R A N C H E S OF U.S. B A N K S
Balance Sheet Data
Millions of dollars, end of period
1976
Asset account
1974
1977
1975
Dec.
Jan.
Feb.
Mar.
Apr.
May
June
Julyf
A l l foreign countries
1 Total, all currencies
2
3
4
Claims on United States
Parent bank
Other
5
6
7
8
9
Claims on foreigners
Other branches of parent bank..
Other banks
Official institutions
Nonbank foreigners
10
Other assets
11 Total payable in U.S. dollars
12
13
14
Claims on United States
Parent bank
Other
15
16
17
18
19
Claims on foreigners
Other branches of parent bank..
Other banks
Official institutions
Nonbank foreigners
20
Other assets
151,905
176,493
219,476
212,427
215,934
223,239
223,014
229,542
236,352
235,641
6,900
4,464
2,435
6,743
3,665
3,078
7,999
4,435
3,564
6,529
2,966
3,563
7,031
3,725
3,306
7,267
3,622
3,645
8,830
5,432
3,398
7,359
3,928
3,430
7,396
3,612
3,784
10,681
7,134
3,547
138,712
27,559
60,283
4,077
46,793
163,391
34,508
69,206
5,792
53,886
204,433
45,894
83,765
10,609
64,164
198,285
46,086
77,415
10,837
63,947
201,466
47,767
77,923
11,190
64,587
208,552
48,645
81,668
11,768
66,471
207,211
47,826
79,756
12,400
67,230
214,786
49,489
83,912
12,728
68,657
221,542
52,375
86,831
13,194
69,143
217,462
48,035
84,719
13,572
71,136
6,294
6,359
7,045
7,613
7,437
7,421
6,973
7,397
7,414
7,497
105,969
132,901
167,751
163,028
165,472
172,360
171,926
176,603
182,434
179,651
6,603
4,428
2,175
6,408
3,628
2,ISO
7,705
4,375
3,330
6,250
2,921
3,323
6,743
3,680
3,063
6,868
3,574
3,293
8,456
5,388
3,068
6,949
3,903
3,047
6,979
3,590
3,389
10,263
7,095
3,168
96,209
19,688
45,067
3,289
28,164
123,496
28,478
55,319
4,864
34,835
156,842
37,848
66,331
9,018
43,645
152,866
38,362
60,816
9,469
44,219
155,106
39,822
60,909
9,854
44,521
161,966
40,922
64,591
10,470
45,983
160,167
39,960
63,037
11,056
46,113
166,162
41,373
66,297
11,364
47,128
172,053
43,919
68,763
11,886
47,486
166,063
39,293
66,233
12,110
48,427
3,157
2,997
3,204
3,912
3,623
3,527
3,303
3,492
3,401
3,325
80,150
83,178
84,734
83,484
3,129
2,249
881
78,083
20,560
38,121
1,863
17,538
United Kingdom
21 Total, all currencies
22
23
24
Claims on United States
Parent bank
Other
25
26
27
28
29
Claims of foreigners
Other branches of parent bank..
Other banks
Official institutions
Nonbank foreigners
30
Other assets
31 Total payable in U.S. dollars
32
33
34
Claims on United States
Parent bank
Other
35
36
37
38
39
Claims on foreigners
Other branches of parent bank..,
Other banks
Official institutions
Nonbank foreigners
40
Other assets
69,804
74,883
81,466
3,248
2, All
2,392
1,449
943
3,354
2,376
978
2,262
1,377
885
64,111
12,724
32,701
788
17,898
70,331
17,557
35,904
881
15,990
75,859
19,753
38,089
1,274
16,743
71,995
19,483
34,827
1,377
16,309
lie
78,708
81,268
1,772
1,011
761
2,311
1,302
1,009
2,541
1,698
843
2,714
1,850
863
2,450
1,553
897
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
78,333
21,122
38,635
1,631
16,945
80,087
22,104
39,174
1,764
17,045
2,445
2,159
2,253
2,225
2,224
2,092
2,050
2,131
2,197
2,272
49,211
57,361
61,587
57,758
60,038
62,353
61,179
63,481
64,841
62,815
3,146
2,468
678
2,273
1,445
828
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
2,590
1,842
748
2,338
1,547
791
3,011
2,237
774
44,694
10,265
23,716
610
10,102
54,121
15,645
28,224
648
9,604
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
60,030
18,642
29,498
1,306
10,584
61,582
19,519
29,949
1,437
10,676
58,875
17,784
28,849
1,473
10,769
1,372
967
824
838
862
839
855
861
922
930
Bahamas and Caymans
41 Total, all currencies
42
43
44
Claims on United States
Parent bank
Other
45
46
47
48
49
Claims on foreigners
Other branches of parent bank..
Other banks
Official institutions
Nonbank foreigners
50
Other assets
51 Total payable in U.S. dollars
31,733
45,203
66,774
66,445
66,100
69,526
70,950
71,540
74,853
74,727
2,464
1,081
1,383
3,229
1,477
1,752
3,506
1,141
2,365
3,158
2,381
3,687
1,384
2,303
3,409
1,037
2,372
4,996
2,703
2,293
3,540
1,251
2,290
3,970
1,394
2,576
6,445
4,062
2,383
28,453
3,478
11,354
2,022
11,599
41,040
5,411
16,298
3,576
15,756
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
64,783
9,060
25,339
7,495
22,890
64,654
8,095
25,234
7,784
23,540
66,581
8,703
25,588
8,062
24,228
69,528
9,638
21,3,12
8,344
24,174
66,973
7,586
25,967
8,628
24,791
lis
815
933
1,217
1,748
1,413
1,333
1,300
1,419
1,356
1,309
28,726
41,887
62,705
62,232
61,571
64,946
66,366
66,550
69,930
69,548
Overseas Branches
A63
3.22 Continued
1976
Liability account
1974
1977
1975
Dec.
Jan.
Feb.'-
Mar.
Apr.'-
May
June
JuIyJ'
223,014
229,542
236,352
235,641
37,703
19,689
18,014
189,361
47,016
86,903
27,112
28,329
A l l foreign countries
52 Total, all currencies
53
54
55
To United States
Parent bank
Other
56
57
58
59
60
To foreigners
Other branches of parent bank.
Other banks
Official institutions
Nonbank foreigners
61
Other liabilities
62 Total payable in U.S. dollars
63
64
65
66
67
68
69
70
71
To United States
Parent bank
Other
Other branches of parent bank.
Other banks
Official institutions
Other liabilities
151,905
176,493
219,476
212,427
215,934
223,239
11,982
5,809
6,173
20,221
12,165
8,057
32,837
19,895
12,942
30,379
18,696
11,683
30,482
19,229
11,253
34,420
21,017
13,403
33,082
18,312
14,770
34,768
20,497
14,270
37,177
22,821
14,356
132,990
26,941
65,675
20,185
20,189
149,815
34,111
72,259
22,773
20,672
179,893
44,310
83,878
25,829
25,877
175,155
44,289
79,487
25,796
25,583
178,570
46,328
78,295
26,656
27,291
181,926
47,444
80,026
26,438
28,018
182,966
46,175
82,132
26,150
28,509
187,537
48,032
84,113
27,328
28,065
191, 761
50,292
84,197
28,197
29,075
6,933
6,456
6,747
6,894
6,882
6,893
6,965
7,237
7,414
8,577
107,890
135,907
173,127
167,591
170,544
177,255
177,062
181,798
187,552
184,726
11,437
5,641
5,795
19,503
11,939
7,564
32,050
19,681
12,369
29,443
18,447
10,996
29,568
18,983
10,585
33,477
20,764
12,713
32,118
18,067
14,051
33,882
20,241
13,640
36,120
22,378
13,742
36,770
19,415
17,355
92,503
19,330
43,656
17,444
12,072
112,879
28,217
51,583
19,982
13,097
137,550
37,038
60,617
22,878
17,017
134,375
37,707
56,766
23,063
16,838
137,313
39,373
56,091
23,624
18,225
140,179
40,474
57,750
23,650
18,305
141,220
39,096
59,977
23,241
18,906
144,098
40,572
60,930
24,369
18,242
147,266
42,740
60,232
25,249
19,045
142,942
38,940
61,755
24,159
18,088
3,951
3,526
3,527
3,773
3,664
3,600
3,724
3,819
4,167
5,013
United Kingdom
72 Total, all currencies
73
74
75
To United States
Parent bank
Other
76
77
78
79
80
To foreigners
Other branches of parent bank.
Other banks
Official institutions
Nonbank foreigners
81
Other liabilities
82 Total payable in U.S. dollars
83
84
85
To United States
Parent bank
Other
86
87
88
89
90
To foreigners
Other branches of parent bank.
Other banks
Official institutions
Nonbank foreigners
91
Other liabilities
69,804
74,883
81,466
78,708
81,268
80,150
83,178
84,734
83,484
3,978
510
3,468
5,646
2,122
3,523
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
5,845
1,460
4,386
6,894
2,150
4,743
8,537
2,217
6,320
63,409
A,162
32,040
15,258
11,349
67,240
6,494
32,964
16,553
11,229
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
75,145
8,570
35,932
17,538
13,106
75,683
8,937
34,959
18,086
13,701
72,585
7,987
34,623
17,148
12,827
2,418
1,997
2,241
2,179
2,313
2,238
2,091
2,187
2,157
2,362
49,666
57,820
63,174
59,009
61,331
63,346
62,373
64,343
65,735
63,848
3,744
484
3,261
5,415
2,083
3,332
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
5,688
1,438
4,250
6,679
2,083
4,596
8,348
2,184
6,164
44,594
3,256
20,526
13,225
7,587
51,447
5,442
23,330
14,498
8,176
56,372
5,874
25,527
15,423
9,547
53,230
6,573
22,m
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
57,720
7,333
25,171
15,674
9,541
58,136
7,661
24,134
16,301
10,040
54,550
6,583
23,681
15,295
8,990
1,328
959
953
903
953
874
875
936
920
951
Bahamas and Caymans
92 Total, all currencies
93
94
95
To United States
Parent bank
Other
96
97
98
99
100
To foreigners
Other branches of parent bank.
Other banks
Official institutions
Nonbank foreigners
101
Other liabilities
102 Total payable in U.S. doUars
31,733
45,203
66,774
66,445
66,100
69,526
70,950
71,540
74,853
74,727
4,815
2,636
2,180
11,147
7,628
3,520
22,723
16,163
6,560
21,656
15,157
6,499
21,638
15,207
6,431
24,277
17,110
7,167
23,060
14,514
8,545
25,137
16,426
8,710
26,571
18,366
8,205
25,051
14,835
10,217
26,140
7,702
14,050
2,377
2,011
32,949
10,569
16,825
3,308
2,248
42,897
13,801
21,758
3,573
3,765
43,376
13,551
22,231
3,632
3,963
43,166
14,406
20,981
3,339
4,439
43,863
14,714
20,455
3,540
5,155
46,641
14,123
23,244
3,917
5,356
45,054
13,894
22,296
4,130
4,734
46,531
14,662
22,693
4,216
4,960
47,189
13,736
24,166
4,351
4,936
778
1,106
1,154
1,413
1,295
1,385
1,249
1,350
1,751
2,487
28,840
42,197
63,417
62,818
62,382
65,755
67,168
67,518
70,816
70,399
A64
3.23
International Statistics • October 1977
M A R K E T A B L E U.S. T R E A S U R Y BONDS A N D NOTES
Foreign Holdings and Transactions
M i l l i o n s o f dollars
Country or area
1975
1977
Jan.—
Aug.p
1976
1977
Feb.
Mar.
Apr.
May
June
JulyP
Aug.P
Holdings (end o f period) 4
1 Estimated t o t a l . . .
7,703
15,798
17,813
18,748
18,450
19,335
21,787
23,024
27,138
2 Foreign countries.
7,372
12,765
13,746
14,929
16,024
17,200
19,331
20,439
24,198
1,085
13
215
16
276
55
363
143
4
2,330
14
764
288
191
261
485
323
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
3,624
16
1,112
418
148
429
1,181
316
4
4,862
18
1,262
492
149
439
2,190
312
4
5,815
19
1,266
503
149
485
3,068
322
4
8,070
19
1,847
634
155
478
4,607
327
4
3
4
5
6
7
8
9
10
11
Europe
Belgium-Luxembourg..
Germany
Netherlands
Sweden
Switzerland
United K i n g d o m
Other Western Europe.
Eastern Europe
12
Canada.
395
256
261
270
268
271
279
283
288
13
14
15
16
L a t i n America
Venezuela
Other L a t i n America republics.
Netherlands Antilles i
200
4
29
161
312
149
35
118
295
149
21
121
405
258
26
120
448
193
21
119
All
193
21
113
481
193
18
114
481
193
18
114
514
193
18
145
17
18
Asia
Japan.
5,370
3,271
9,323
2,687
10,330
2,806
11,068
3,123
11,476
3,174
12,528
3,773
13,407
4,290
13,567
4,314
15,034
5,025
19
Africa
321
543
356
20
21 Nonmonetary international and regional
organizations
22
23
305
305
279
279
279
279
*
*
11
23
27
23
13
13
331
3,033
4,068
3,819
2,426
2,135
2,456
2,586
2,940
322
9
2,905
128
3,948
119
3,700
118
2,318
108
2,032
103
2,353
103
2,440
146
2,830
110
*
A l l other.
international
L a t i n American regional.
Transactions (net purchases, or sales (—), during period)
24 T o t a l
1,994
8,095
11,340
1,505
936
-298
885
2,451
1,238
4,114
25 Foreign countries
1,814
5,393
11,433
732
1,184
1,094
1,176
2,131
1,108
3,759
26
27
1,612
202
5,116
276
10,699
734
709
23
1,047
137
922
172
1,152
24
1,927
203
1,048
60
3,665
94
180
2,702
-93
773
-248
-1,392
-291
321
130
354
1,797
170
3,887
221
2,783
-24
505
-150
408
-51
338
392
-26
397
-14
503
Official institutions
Other foreign
28 Nonmonetary international and regional
organizations
MEMO: Oil-exporting countries
29
M i d d l e East 2
30
Africa 3
1 Includes Surinam u n t i l January 1976.
2 Comprises Bahrain, Iran, I r a q , K u w a i t , Oman, Qatar, Saudi Arabia,
and United A r a b Emirates (Trucial States). D a t a not available u n t i l 1975.
3 Comprises Algeria, Gabon, L i b y a , and Nigeria. D a t a n o t available
u n t i l 1975.
3.24
4 Estimated official and private holdings o f marketable U.S. Treasury
securities w i t h an original maturity o f more than 1 year. D a t a 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 o f foreign countries.
F O R E I G N O F F I C I A L ASSETS H E L D A T F E D E R A L RESERVE B A N K S
Millions o f dollars, end o f period
1977
Assets
1974
1975
1976
Mar.
1 Deposits
Assets held i n custody:
2
U.S. Treasury securities i
3
Earmarked gold 2
May
June
July
Aug.
Sept.
418
353
352
349
305
436
379
468
534
382
55,600
16,838
60,019
16,745
66,532
16,414
71,435
16,271
73,261
16,282
73,964
16,221
74,098
16,184
75,443
16,179
75,976
16,117
79,285
16,073
1 Marketable U.S. Treasury bills, certificates o f indebtedness, notes,
and bonds; and nonmarketable U.S. Treasury securities payable i n dollars
and i n foreign currencies.
2 The value o f earmarked gold increased because o f the changes i n
par value o f the U.S. dollar i n M a y 1972 and i n October 1973.
Apr.
NOTE.—Excludes deposits and U.S. Treasury securities held for international and regional organizations. Earmarked gold is gold held f o r
foreign and international accounts and is not included i n the gold stock
o f the United States.
Investment transactions
3.25
A65
F O R E I G N T R A N S A C T I O N S I N SECURITIES
Millions o f dollars
1977
Transactions, and area or country
1975
1977
1976
Jan.Aug.P
Feb.
Apr.
Mar.
May
June
Julyf
Aug.p
U.S. corporate securities
1
2
Stocks
Foreign purchases
Foreign sales
15,347
10,678
18,227
15,474
9,622
8,054
1,162
1,036
1,101
980
1,135
913
1,207
978
1,196
948
1,373
1,162
1,023
900
3
Net purchases, or sales (—)
4,669
2,752
1,568
126
121
222
229
248
211
123
4
Foreign countries
4,651
2,740
1,548
124
116
222
209
254
209
124
42
21
12
-20
43
43
-24
20
-10
5
71
37
-13
-1
-2
-7
69
-3
17
186
10
12
4
157
-6
*
-5
1
95
-3
1
-2
2
-1
5
6
7
8
9
10
Europe
France
Germany
Netherlands
Switzerland...
United K i n g d o m
2,491
262
251
359
899
594
336
256
68
-199
-100
340
604
-4
96
17
112
427
47
-10
-7
-5
23
36
72
4
-4
-10
30
55
105
-6
38
-7
38
47
128
-3
37
27
4
67
11
12
13
14
15
16
Canada
Latin America
Middle East 1
Other Asia 2
Africa
Other countries
361
-7
1,640
142
10
15
325
155
1,803
117
7
-4
13
92
794
42
1
4
30
14
50
-17
•
1
9
14
17
3
-5
21
97
5
1
-1
-33
17
92
4
»
1
18
12
19
1
5
1
20
-7
5,408
4,642
5,529
4,322
5,145
2,248
534
214
348
208
856
245
609
332
976
394
752
285
670
248
17
Nonmonetary international and regional
organizations
Bonds3
18
Foreign purchases
19
Foreign sales
20
Net purchases, or sales (—)
21
Foreign countries
22
23
24
25
26
27
Europe
France
Germany
Netherlands
Switzerland
United K i n g d o m
28
29
30
31
32
33
Canada
Latin America
Middle East 1
Other Asia2
Africa
Other countries
34
Nonmonetary international and regional
organizations
*
*
*
•
2
*
766
1,207
2,896
320
140
611
277
582
467
421
1,795
1,248
2,852
329
112
566
308
569
499
396
113
82
-6
-8
117
-52
92
40
-50
-29
158
23
1,239
-23
37
30
166
1,000
281
-3
4
-2
32
225
75
-2
100
-5
-4
-7
-4
106
99
-7
13
-28
19
102
314
-3
12
57
17
223
232
1
12
11
35
197
130
1
1
0
21
96
128
31
1,553
-35
5
1
96
94
1,179
-165
-25
-21
120
39
1,284
174
-2
55
8
-7
-8
-3
1
48
-6
-2
6
3
454
4
1
«
192
17
7
2
235
10
«
30
12
153
72
13
18
150
84
-1,030
-41
42
*
*
*
-9
*
-3
31
43
*
*
27
*
45
*
*
*
*
*
*
•
-31
13
-32
25
Foreign securities
35 Stocks, net purchases, or sales (—)
36
Foreign purchases
37
Foreign sales
38 Bonds, net purchases, or sales ( - )
39
Foreign purchases
40
Foreign sales
-189
1,541
1,730
-322
1,937
2,259
-618
1,360
1,976
-109
130
238
-62
187
249
-40
157
197
-7
204
211
-56
173
229
-263
159
421
-63
169
232
-6,325
2,383
8,708
-8,729
4,932
13,661
-3,342
5,514
8,855
-374
581
955
-56
628
684
-11
606
617
-866
607
1,473
-765
636
1,401
-205
786
991
-992
852
1,843
41 Net purchases, or sales (—) of stocks and bonds.. - 6 , 5 1 5
-9,050
3,960
-483
-118
-51
-873
-821
-467
-1,055
42 Foreign countries
43
Europe
44
Canada
45
Latin America
46
Asia
47
Africa
48
Other countries
-4,323
-53
-3,202
-306
-622
15
-155
-7,155 -2,512
-844
-842
-5,246 -1,700
1
164
-700
-162
48
5
-416
22
-488
-207
-265
42
-61
2
1
-149
54
-83
35
-155
4
2
-94
69
25
-201
-124
-128
-13
62
-391
-267
-241
52
59
1
5
-213
-8
-255
-7
55
49 Nonmonetary international and regional
organizations
-2,192
-1,898
5
31
-76
-841
1 Comprises oil-exporting countries as follows: Bahrain, Iran, Iraq,
K u w a i t , Oman, Qatar, Saudi Arabia, and United Arab Emirates (Trucial
States).
2 Includes Middle East oil-exporting countries until 1975.
1,448
*
*
*
*
2
2
-692
-271
-292
-39
-94
3
2
-55
-673
-129
*
1
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 • October 1977
SHORT-TERM LIABILITIES TO A N D CLAIMS O N FOREIGNERS
in the United States
Reported by Nonbanking Concerns
Millions o f dollars, end o f period
1976
1977
1976
1977
Type, and area or country
Mar.
June
Sept.
Mar.p
Dec.
Mar.
June
Liabilities to foreigners
1 Total.
By type:
2
Payable in
3
4
dollars.
Payable in foreign currencies
Deposits w i t h banks abroad i n reporter's
name
Other
5
By area or country:
6 Foreign countries
7
Europe
Austria
Belgium-Luxembourg
Denmark
Finland
France
Germany
Greece
Italy
Netherlands
Norway
Portugal
Spain
Sweden
Switzerland
Turkey
United K i n g d o m
Yugoslavia
Other Western Europe
U.S.S.R
Other Eastern Europe
28
Canada.
Sept.
Dec.
Claims o n foreigners
6,365
6,307
6,449
6,654
6,632
12,699
13,847
13,172
14,188
14,956
5,715
5,683
5,715
5,943
5,871
11,712
12,850
12,111
13,205
14,004
988
997
1,060
984
952
480
508
558
439
592
468
442
541
387
565
12,697
4,932
17
116
35
31
355
305
41
406
176
58
45
516
80
207
26
2,282
30
18
106
80
13,846
5,326
17
193
30
131
363
358
47
335
146
52
22
432
84
270
31
2,602
28
14
96
75
13,170
5,151
21
195
26
135
413
492
56
358
142
43
28
336
62
253
23
2,365
30
17
81
79
14,187
5,271
21
164
56
77
426
378
51
384
166
51
40
369
90
241
25
2,445
26
20
156
85
14,953
5,217
23
170
49
40
422
366
90
473
172
42
35
325
92
154
32
2,476
30
18
104
36
2,234
2,202
2,197
2,465
2,428
3,055
43
1,150
462
46
57
1
332
101
39
4
186
184
10
440
2,816
39
925
417
26
66
1
352
83
35
22
215
179
9
447
3,563
44
1,367
683
34
59
1
332
74
42
5
194
276
9
441
4,358
47
1,824
536
35
75
650
6,146
2,337
6
296
12
5
205
152
25
125
162
23
3
68
25
162
14
924
91
6
23
10
625
6,061
2,271
13
233
12
1
159
228
29
116
170
22
3
51
24
213
20
837
108
7
10
16
734
6,263
2,386
15
183
13
17
185
256
28
148
141
24
5
36
35
243
16
888
113
8
19
14
710
6,445
2,227
10
166
7
2
200
174
48
131
141
29
13
40
34
190
13
879
123
7
9
13
762
6,441
2,124
9
169
15
2
163
173
80
135
168
37
23
52
35
214
12
689
113
6
15
13
315
373
328
380
404
1,194
49
376
97
11
16
1,095
49
330
97
15
19
1,028
48
251
58
16
11
1,036
44
260
72
17
13
1,117
42
256
49
16
18
92
10
30
2
163
75
58
214
72
12
31
3
184
99
55
130
74
10
32
3
222
104
68
129
98
34
25
4
219
141
10
100
117
12
24
4
260
101
11
160
2,565
48
883
475
27
47
1
332
84
38
4
156
170
7
294
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
7
129
33
11
144
32
275
85
28
23
1,260
2,138
20
112
40
23
134
39
229
77
53
24
1,385
2,154
27
113
42
39
137
37
206
97
59
19
1,378
2,491
35
100
66
60
155
42
1,163
105
106
20
638
2,729
23
215
104
51
160
53
1,170
131
114
19
691
2,421
11
136
88
53
193
48
1,010
142
93
23
624
2,325
23
200
96
55
2ro
41
908
118
86
22
566
2,371
30
130
107
36
246
50
963
130
84
26
566
Africa
Egypt
Morocco
South A f r i c a .
Zaire.
Other A f r i c a .
502
30
7
113
7
345
527
22
32
88
12
372
426
25
42
65
24
270
588
27
43
54
36
429
574
29
27
33
39
446
343
22
10
80
23
207
378
28
12
83
25
230
406
36
9
78
28
255
392
28
10
87
21
247
429
71
12
80
17
249
Other countries.,
Australia
A l l other
65
47
18
44
32
12
67
59
18
76
57
19
68
49
19
133
97
36
155
100
56
178
112
67
172
107
65
150
114
36
219
246
186
208
192
1
1
1
1
2
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
Latin America
Argentina
Bahamas
Brazil
Chile
Colombia
Cuba
Mexico
Panama
Peru
44
45
46
47
48
49
50
51
52
53
54
55
Asia.
China, People's Republic o f (Mainland)
China, Republic o f (Taiwan)
Hong Kong
India
Indonesia
Israel
Japan
Korea
Philippines
Thailand
Other Asia
56
57
58
59
60
61
62
63
64
Uruguay
Venezuela
Other L a t i n American republics.
Netherlands Antilles i
Other L a t i n America
65 Nonmonetary international and regional
organizations
*
1 Includes Surinam u n t i l 1976.
NOTE.—Reported by exporters, importers, and industrial and com-
*
*
*
317
105
32
6
214
234
14
918
mercial concerns and other nonbanking institutions i n the United States.
D a t a exclude claims held through U.S. banks and intercompany accounts
between U.S. companies and their affiliates.
Nonbank-reported Data
3.27
A67
Reported by Large Nonbanking Concerns in the United States
S H O R T - T E R M C L A I M S O N FOREIGNERS
M i l l i o n s o f dollars, end o f period
1977
Type and c o u n t r y
1974
1973
1975
1976
Feb.
Mar.
Apr.
May
June
Julyf
1 Total
3,185
3,357
3,799
5,440
5,590
6,314
6,226
7,370
7,558
7,357
B y type:
2
Payable in dollars
3
Deposits
4
Short-term investments i .
2,641
2,604
37
2,660
2,591
69
3,042
2,710
332
4,772
4,399
373
4,935
4,558
377
5,696
5,241
455
5,555
4,973
582
6,736
6,213
523
6,817
6,352
465
6,618
6,195
424
544
431
113
697
429
268
757
511
246
669
383
286
654
339
315
619
317
302
672
362
310
634
300
334
741
340
401
139
352
387
1,128
775
597
336
349
1,350
967
391
398
252
1,306
1,156
546
343
446
1,837
1,539
1,247
113
704
1,846
1,338
1,412
165
829
1,879
1,468
1,709
147
1,111
1,713
1,503
1,649
155
1,889
1,642
2,350
158
1,331
2,252
1,650
2,064
178
1,414
2,123
1,725
2,113
149
1,247
5
6
7
8
9
10
11
12
Payable in foreign currencies
Deposits
Short-term investments 1.
By c o u n t r y :
United K i n g d o m
Canada
Bahamas.
Japan
A l l other
1 Negotiable and other readily transferable foreign obligations payable
o n demand or having a contractural m a t u r i t y o f n o t more than 1 year
f r o m the date o n w h i c h the obligation was incurred by the foreigner.
3.28
1,206
NOTE.—Data represent the assets abroad o f large nonbanking concerns i n the U n i t e d States. They are a p o r t i o n o f the t o t a l claims o n
foreigners reported by nonbanking concerns i n the U n i t e d States and
are included i n the figures shown i n Table 3.26.
L O N G - T E R M L I A B I L I T I E S T O A N D C L A I M S O N FOREIGNERS
in the United States
Reported by Nonbanking Concerns
M i l l i o n s o f dollars, end o f period
1977
1976
1977
1976
A r e a and country
Mar.
June
Sept.
Dec.
M a r . 2'
Mar.
Liabilities t o foreigners
June
Sept.
Dec.
Mar.p
Claims o n foreigners
1 Total
4,064
3,928
3,718
3,508
3,438
5,178
5,037
4,974
4,979
4,936
2 Europe
3
Germany
4
Netherlands
5
Switzerland
6
United Kingdom
3,109
446
214
484
1,572
2,985
425
214
467
1,486
2,813
406
270
327
1,445
2,693
396
258
260
1,409
2,617
391
254
178
1,372
973
34
22
56
349
984
35
211
56
365
953
73
211
54
298
910
72
156
57
297
897
84
154
52
257
144
166
111
89
82
1,468
1,511
1,507
1,530
1,470
8 L a t i n America
9
Bahamas
10
Brazil
11
Chile
12
Mexico
7 Canada
248
184
5
1
6
222
157
5
1
6
230
132
5
1
7
243
138
5
1
17
244
139
5
1
19
1,776
7
183
312
209
1,609
37
165
306
187
1,552
37
172
244
219
1,521
36
133
248
195
1,488
34
124
210
180
13 Asia
14
Japan
495
394
489
388
498
402
423
397
432
413
685
129
712
85
739
80
773
77
816
96
15 A f r i c a
16 A l l other i
2
2
2
2
2
214
163
165
187
198
65
64
64
58
59
61
59
58
58
67
1 Includes nonmonetary international and regional organizations.
A68
3.29
International Statistics • October 1977
D I S C O U N T RATES O F F O R E I G N C E N T R A L B A N K S
Per cent per annum
Rate on Sept. 30, 1977
Rate o n Sept. 30, 1977
Country
Per
cent
Argentina
Austria...
Belgium..
Brazil
Canada..
Denmark.
Country
Month
effective
18.0
5.5
6.0
28.0
7.5
9.0
Feb.
June
June
May
May
Mar.
Per
cent
1972
1977
1977
1976
1977
1977
France
Germany, Fed. Rep. o f .
Italy
Japan
Mexico
Netherlands
NOTE.—Rates shown are mainly those at which the central bank either
discounts or makes advances against eligible commercial paper and/or
government securities for commercial banks or brokers. For countries w i t h
3.30
Rate on Sept. 30, 1977
Country
9.5
3.5
11.5
4.25
4.5
3.5
Month
effective
Aug.
Sept.
Aug.
Sept.
June
May
1977
1975
1977
1977
1942
1977
Per
cent
6.0
Norway
Sweden
Switzerland
United K i n g d o m
Venezuela
8.0
1.5
6.0
5.0
Month
effective
Sept.
Oct.
July
Sept.
Oct.
1976
1976
1977
1977
1970
more than one rate applicable to such discounts or advances, the rate
shown is the one at which it is understood the central bank transacts the
largest p r o p o r t i o n o f its credit operations.
F O R E I G N S H O R T - T E R M INTEREST RATES
Per cent per annum, averages o f daily figures
1977
1974
C o u n t r y , or type
1 Euro-dollars
2 United K i n g d o m .
3 Canada
4
5
6
7
1975
1976
May
June
July
Aug.
Sept.
11.01
13.34
10.47
7.02
10.63
8.00
5.58
11.35
9.39
5.16
8.59
7.58
5.80
7.63
7.44
5.78
7.81
7.16
5.80
7.77
7.27
6.30
6.91
7.44
6.56
6.03
7.31
9.80
4.87
3.01
5.17
7.91
4.19
1.45
7.02
8.65
4.57
2.61
4.89
9.33
4.43
3.98
3.03
9.13
4.24
3.80
2.84
9.01
4.20
3.01
3.05
8.67
4.04
2.41
3.48
8.51
4.07
2.37
4.39
8.38
10.37
6.63
11.64
16.32
10.25
7.70
16.26
7.01
6.46
15.49
6.94
5.75
14.65
6.88
6.05
14.09
6.85
6.25
13.94
6.20
6.24
12.42
6.20
5.32
Germany...
Switzerland..
Netherlands.
France
8 Italy. . . .
9 Belgium.
10 J a p a n . . .
NOTE.—Rates are for 3-month interbank loans except for—Canada,
finance company paper; Belgium, time deposits o f 20 m i l l i o n francs and
3.31
Apr.
over; and Japan, loans and discounts that can be called after being held
over a m i n i m u m o f two month-ends.
F O R E I G N E X C H A N G E RATES
Cents per unit o f foreign currency
1977
Country/currency
1974
1975
1976
Apr.
May
June
July
Aug.
Sept.
Australia/dollar
Austria/shilling
Belgium/franc
Canada/dollar
Denmark/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
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
112.20
6.1691
2.8208
94.230
16.769
110.47
6.0792
2.8107
93.028
16.590
110.37
6.0377
2.7910
93.168
16.188
6
7
8
9
10
Finland/markka
France/franc
Germany/deutsche m a r k . . .
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
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
24.902
20.607
43.827
11.342
172.26
24,801
20.415
43.168
11.465
173.97
23.977
20.314
43.034
11.450
174.31
11
12
13
14
15
Italy/lira
Japan/yen
Malaysia/ringgit
Mexico/peso
Netherlands/guilder
16
17
18
19
20
N e w Zealand/dollar
Norway/krone
Portugal/escudo
South Africa/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
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
97.160
19.023
2.5953
114.98
1.2382
96.826
18.863
2.5678
115.00
1.1804
96.812
18.226
2.4606
115.00
1.1824
21
22
23
24
Sri Lanka/rupee
Sweden/krona
Switzerland/franc
United K i n g d o m / p o u n d . . .
14.978
22.563
33.688
234.03
14.385
24.141
38.743
222.16
11.908
22.957
40.013
180.48
13.676
23.004
39.582
171.90
13.700
22.962
39.694
171.85
13.664
22.625
40.170
171.91
13.700
22.991
41.487
172.26
13.721
22.472
41.523
173.97
12.301
20.602
42.115
174.31
84.11
82.20
89.68
90.13
89.99
89.91
88.67
89.10
89.52
1
2
3
4
5
.15372
.34302
41.682
8.0000
37.267
.15328
.33705
41.753
8.0000
39.632
.11264
.36339
40.305
4.4076
40.464
.12044
.33741
39.340
6.9161
37.846
.11279
.36046
40.255
4.3890
40.7009
.11295
.36652
40.270
4.3582
40.326
.11330
.37756
40.443
4.3528
40.983
.11332
.37499
40.606
4.3629
40.831
.11318
.37486
40.600
4.3776
40.604
MEMO:
25 U n i t e d States/dollar i
1 Index o f weighted-average exchange value o f U.S. dollar against currencies o f other G-10 countries plus Switzerland. M a y 1970 parities = 100.
Weights are 1972 global trade o f each o f the 10 countries.
NOTE.—Averages o f certified n o o n buying rates i n N e w Y o r k f o r cable
transfers.
69
Guide to
Tabular Presentation and Statistical Releases
GUIDE TO TABULAR
PRESENTATION
SYMBOLS A N D ABBREVIATIONS
p
r
rp
e
c
n.e.c.
Rp's
•'s
IPC's
!'s
Preliminary
Revised
Revised preliminary
Estimated
Corrected
Not elsewhere classified
Repurchase agreements
Individuals, partnerships, and corporations
SMSA's
REIT's
*
Standard metropolitan statistical areas
Real estate investment trusts
Amounts insignificant in terms of the particular unit (e.g., less than 5(X),0(X) when
the unit is millions)
(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 INFORMATION
Minus signs are used to indicate (1) a decrease, (2)
a negative figure, or (3) an outflow.
" U . S . Govt, securities" may include guaranteed
issues of U.S. Govt, agencies (the flow of funds figures
also include not f u l l y guaranteed issues) as well as direct
STATISTICAL
obligations of the Treasury. "State and local g o v t . "
also includes municipalities, special districts, and other
political subdivisions.
I n some of the tables details do not add to totals
because of rounding.
RELEASES
LIST PUBLISHED S E M I A N N U A L L Y , W I T H LATEST B U L L E T I N REFERENCE
Issue
Anticipated schedule of release dates for individual releases
June 1977
Page
A-78
>
o
Board of Governors of the Federal Reserve System
ARTHUR F . BURNS,
Chairman
STEPHEN S . GARDNER,
H E N R Y C= W A L L I C H
OFFICE
O F B O A R D
M E M B E R S
M . DENKLER,
ROBERT
Staff Director
Deputy Staff
J. L A W R E N C E ,
Assistant Director for
Construction Management
G O R D O N B . G R I M W O O D , Assistant
Director
and Program Director for
Contingency Planning
E . ANDERSON,
O F
Chairman
MILTON
Assistant to the
Assistant to the Board
Assistant to the Board
B R E N N E M A N , Special Assistant to the
JOSEPH R . C O Y N E ,
KENNETH
JAY
A . GUENTHER,
PAUL
Board
FRANK
O'BRIEN,
JR.,
P O L I C Y
Staff Director
Deputy Staff Director
M U R R A Y A L T M A N N , Assistant to the Board
P E T E R M . K E I R , Assistant to the Board
S T A N L E Y J . S I G E L , Assistant to the Board
N O R M A N D R . V . B E R N A R D , Special Assistant to
the Board
STEPHEN
W . HUDSON,
STAFF
F O R M O N E T A R Y
Counsel to the
Chairman
Director
DONALD
OFFICE
D I R E C T O R
THOMAS J. O ' C O N N E L L ,
JOHN
DAVID M . LILLY
J. CHARLES PARTEE
P H I L I P C . JACKSON, JR.
OFFICE OF
STAFF DIRECTOR FOR MANAGEMENT
Vice Chairman
PHILIP E . COLDWELL
ARTHUR
H . AXILROD,
L . BROIDA,
Special Assistant to the
Board
JOSEPH S . SIMS,
Special Assistant to the Board
Special Assistant to the
D O N A L D J. W I N N ,
D I V I S I O N
O F R E S E A R C H
A N D
STATISTICS
Board
Director
Deputy Director
C . E T T I N , Associate Director
K A L C H B R E N N E R , Associate Director
M I N G O , Senior Research
Division
JAMES L . K I C H L I N E ,
JOSEPH S . Z E I S E L ,
D I V I S I O N
O F D A T A
EDWARD
PROCESSING
JOHN H .
CHARLES
BRUCE
Director
Associate Director
B L A C K , Assistant
Director
C U M M I N S , Assistant
Director
Z E M E L , Assistant
Director
L . HAMPTON,
L E G A L
UYLESS
D.
GLENN
L.
ROBERT
J.
D I V I S I O N
O F
JOHN D . H A W K E ,
BALDWIN
L . SHANNON,
W . WOOD,
Director
Assistant
General Counsel
Deputy General
Counsel
E. MANNION,
Director
ELEANOR
J. STOCKWELL,
Senior Research
Division Officer
JAMES R . W E T Z E L ,
Assistant General
Assistant General Counsel
C H A R L E S R . M C N E I L L , Assistant to the
General Counsel
ALLEN
CHARLES
JR.,
B . TUTTLE,
Counsel
P E R S O N N E L
J.
Officer
ROBERT
DAVID
JOHN
DIVISION
M . BEARDSLEY,
Senior Research Division
Officer
ROBERT A . EISENBEIS,
Associate Research
Division Officer
L. RAIKEN,
J.
CORTLAND
G . PERET,
Division Officer
Associate Research
OFFICE
JOHN
O F
T H E
E.
OF
WILLIAMS,
JANET
O.
AFFAIRS
Director
Associate Director
K L U C K M A N , Associate Director
HART,
NATHANIEL
E.
JERAULD C.
D I V I S I O N O F A D M I N I S T R A T I V E
C O N S U M E R
BUTLER,
JAMES M .
JARED J.
ROBERT
JOHN L .
JOHN D.
O F F I C E
KREIMANN,
O F S T A F F
F E D E R A L
D I R E C T O R
R E S E R V E
WILLIAM H.
WALLACE,
B A N K
FOR
OFFICE
OF
T H E
B A N K
O F
F E D E R A L
E X A M I N A T I O N S
E.
B U D G E T S
Associate Director
C L Y D E H . F A R N S W O R T H , J R . , Assistant Director
J O H N F . H O O V E R , Assistant Director
P . D . R I N G , Assistant Director
ALBERT
R.
D I V I S I O N
F E D E R A L
JAMES R .
HAMILTON,
O F
R E S E R V E
B A N K
OPERATIONS
Director
Assistant Director
C A R E Y , Assistant Director
G U I N T E R , Assistant Director
KUDLINSKI,
Assistant Research
Assistant Research Division
M .
ALLISON,
D I V I S I O N
O F
JOHN E. RYAN,
FISHER,
Assistant Research
Division Officer
H.
PUCKETT,
Assistant Research
Division Officer
STEPHEN
P.
TAYLOR,
Assistant Research
Division Officer
LEVON
RESERVE
A N D
ENZLER,
RICHARD
Secretary
G R I F F I T H L . G A R W O O D , Deputy Secretary
^ R O B E R T E . M A T T H E W S , Assistant Secretary
THEODORE
SUPERVISION
D I V I S I O N
S E C R E T A R Y
ACTIVITIES
Staff Director
BRUNDY,
Division Officer
Officer
SERVICES
Director
G R I Z Z A R D , Assistant Director
S M I T H , Assistant Director
WALTER W.
Associate Research
T HELMUT F. WENDEL,
Division Officer
Controller
J R . , Assistant Controller
KAKALEC,
TYLER
D I V I S I O N
C O N T R O L L E R
H.
GARABEDIAN,
Assistant Director
B A N K I N G
A N D
R E G U L A T I O N
Director
Deputy Director
Associate Director
W I L L I A M W . W I L E S , Associate Director
J A C K M . E G E R T S O N , Assistant Director
D O N E . K L I N E , Assistant Director
T H O M A S E . M E A D , Assistant Director
R O B E R T S . P L O T K I N , Assistant Director
T H O M A S A . S I D M A N , Assistant Director
S A M U E L H . T A L L E Y , Assistant Director
W I L L I A M T A Y L O R , Assistant Director
tFREDERiCK C. SCHADRACK,
FREDERICK R. D A H L ,
D I V I S I O N
OF
I N T E R N A T I O N A L
F I N A N C E
Director
Counselor
R O B E R T F . G E M M I L L , Associate Director
G E O R G E B . H E N R Y , Associate Director
C H A R L E S J . S I E G M A N , Associate Director
S A M U E L P I Z E R , Senior International Division
Officer
EDWIN M . TRUMAN,
JOHN E. REYNOLDS,
WALTER ALTHAUSEN,
BRIAN
HARRY
M .
A.
* O n l o a n f r o m the Federal Reserve B a n k o f Philadelphia,
t O n l o a n f r o m the F e d e r a l Reserve B a n k o f N e w Y o r k .
t O n leave o f absence.
->J
72
Federal Open Market Committee
Chairman
ARTHUR F. BURNS,
PAUL A .
VOLCKER,
Vice
Chairman
P H I L I P C . JACKSON, JR.
J. C H A R L E S PARTEE
STEPHEN S . G A R D N E R
DAVID M .
LAWRENCE K .
ROGER G U F F E Y
ROBERT P .
PHILIP E .
COLDWELL
LILLY
MAYO
HENRY C.
ROOS
WALLICH
F R A N K E . MORRIS
ARTHUR
L.
MURRAY
Associate Economist
Associate Economist
T H O M A S D A V I S , Associate Economist
R O B E R T E I S E N M E N G E R , Associate Economist
E D W A R D C . E T T I N , Associate Economist
J A M E S L . K I C H L I N E , Associate Economist
J O H N E . R E Y N O L D S , Associate Economist
K A R L S C H E L D , Associate Economist
E D W I N M . T R U M A N , Associate Economist
J O S E P H S . Z E I S E L , Associate Economist
Secretary
Deputy Secretary
B E R N A R D , Assistant
ANATOL
BROIDA,
NORMAND R.
V.
Secretary
General Counsel
Deputy General Counsel
T U T T L E , Assistant General
T H O M A S J. O ' C O N N E L L ,
EDWARD G.
BALDWIN
GUY,
B.
Counsel
STEPHEN H .
Economist
AXILROD,
ALAN
R.
PETER D .
HOLMES,
BALBACH,
RICHARD G.
ALTMANN,
DAVIS,
Manager, System Open Market Account
Deputy Manager for Domestic Operations
Deputy Manager for Foreign Operations
STERNLIGHT,
SCOTT E .
PARDEE,
Federal Advisory Council
RICHARD D .
GILBERT
WALTER
B.
RESERVE
ROGER
WRISTON,
JOHN H .
A.
RESERVE
EDWARD
FEDERAL
DONALD
FEDERAL
E.
RESERVE
RICHARD H .
FEDERAL
RESERVE
DISTRICT
FIFTH
J. W .
FEDERAL
PLUMMER,
SIXTH
BEN
FEDERAL
F.
HERBERT
WILLIAM
V.
LASATER,
EIGHTH
FEDERAL
FEDERAL
VAUGHAN,
NINTH
FEDERAL
DISTRICT
TENTH
FEDERAL
DISTRICT
ELEVENTH
DISTRICT
Secretary
Associate Secretary
PROCHNOW,
J. K O R S V I K ,
SEVENTH
DISTRICT
LOVE,
RESERVE
DISTRICT
SMITH,
DISTRICT
MCLEAN,
RESERVE
DISTRICT
BYRON
RESERVE
FOURTH
President
Vice President
FEDERAL RESERVE DISTRICT.
DISTRICT
LUMPKIN,
RESERVE
FRANK
SECOND
FIRST F E D E R A L RESERVE D I S T R I C T .
TWELFTH
DISTRICT
BROCK W E I R ,
RESERVE
HILL,
BRADLEY,
S. H I L L AS, T H I R D
RESERVE
M.
F.
FEDERAL
73
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
Richard L . Smoot
CLEVELAND*
44101
Willis J. Winn
Walter H. MacDonald
Cincinnati
Pittsburgh
45201
15230
Horace A. Shepard
.
Robert E. Kirby
Lawrence H. Rogers, I I
G. Jackson Tankersley
RICHMOND*
23261
E. Angus Powell
E. Craig Wall, Sr.
I. E. Killian
Robert C. Edwards
Robert P. Black
George C. Rankin
Baltimore
21203
Charlotte
28230
Culpeper Communications
and Records Center.. 22701
ATLANTA
Birmingham
Jacksonville
Miami
Nashville
New Orleans
30303
35202
32203
33152
37203
70161
CHICAGO*
60690
Detroit
48231
ST. LOUIS
63166
Little Rock
Louisville
Memphis
72203
40201
38101
MINNEAPOLIS
55480
Helena
KANSAS CITY
Denver
Oklahoma City
Omaha
DALLAS
El Paso
Houston
San Antonio
59601
64198
80217
73125
68102
75222
79999
77001
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
Donald W. Moriarty
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; Utica, New York 13424; Columbus, Ohio 43216; Columbia, South Carolina 29210;
Charleston, West Virginia 25311; Des Moines, Iowa 50306; Indianapolis, Indiana 46204; and Milwaukee, Wisconsin 53202.
A 74
Federal Reserve Board Publications
Available from Publications Services, Division of Administrative Services, Board of Governors of the Federal Reserve System, Washington, D C. 20551. Where
a charge is indicated, remittance should accompany
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THE
B A N K CREDIT-CARD AND CHECK-CREDIT PLANS.
FEDERAL
RESERVE
FUNCTIONS.
1974.
ANNUAL
REPORT
FEDERAL
RESERVE
125
SYSTEM—PURPOSES
AND
SURVEY
BULLETIN.
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$20.00
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AND
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HISTORICAL CHART
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Sept.
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issue. $1.25 each in the United States, its possessions, Canada, and Mexico; 10 or more to one
address, $1.00 each. Elsewhere, $1.50 each.
CON-
1968.
321
JOINT
OF T H E
TREASURY-FEDERAL
U.S.
GOVERNMENT
RESERVE
SECURITIES
TREASURY-FEDERAL
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1941-1970.
FEDERAL RESERVE M O N T H L Y C H A R T B O O K .
THE
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1976. 3 3 9 pp.
CHARACTERISTICS
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1976. 1,168 pp. $15.00.
A N N U A L STATISTICAL DIGEST, 1 9 7 0 - 7 5 .
FINANCIAL
S U R V E Y OF C H A N G E S I N F A M I L Y F I N A N C E S .
(Reprint of Part 1 only) 1976. 682 pp. $5.00.
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OF
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BANKING
1968.
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$.85 each.
pp.
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1973.
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OPEN
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DURES—STAFF
AND
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OPERATING
1971.
218
PROCE-
pp.
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each; 10 or more to one address, $1.75 each.
REAPPRAISAL
OF
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1971.
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THE
ECONOMETRICS
OF P R I C E D E T E R M I N A T I O N
CON-
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FERENCE, O c t o b e r 3 0 - 3 1 , 1970, W a s h i n g t o n , D . C .
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SELECTED INTEREST A N D E X C H A N G E
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383
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FLUCTUATIONS IN HOUSING CONSTRUCTION.
1972.
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1973. 2 7 1 p p . $ 3 . 5 0 each;
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ANNUAL
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TABLES ( T r u t h
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Lend-
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1969. 100 pp. Vol. I I (Irregular Transactions).
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Federal Reserve Board Publications
CONSUMER
EDUCATION
PAMPHLETS
BANK
DEBITS,
DEPOSITS, A N D DEPOSIT
R E V I S E D SERIES.
(Short pamphlets suitable for classroom use.
copies available without charge.)
Multiple
EQUAL
CREDIT
DOCTORS,
OPPORTUNITY
LAWYERS,
SMALL
ACT
AND
OTHERS W H O M A Y PROVIDE I N C I D E N T A L
THE
EQUAL
CREDIT
.
.
RETAILERS,
OPPORTUNITY
ACT
.
AND
CREDIT
AND
U.S.
10/72.
R E V I S I O N OF C O N S U M E R C R E D I T S T A T I S T I C S .
ONE-BANK
9/72.
B R A N C H E S OF
HOLDING
AMENDMENTS.
COMPANIES
BEFORE
10/72.
THE
1970
12/72.
RECENTLY
OFFERED
CORPORATE
BONDS.
CREDIT-CARD AND CHECK-CREDIT PLANS AT COMMER-
BILLING
IF Y O U BORROW T O B U Y
U.S.
BANKS.
OF F O R E I G N
5/73.
WOMEN
FAIR CREDIT
ACTIVITIES
YIELDS ON
.
TURNOVER—
7/72.
Y I E L D S O N N E W L Y ISSUED C O R P O R A T E B O N D S .
RECENT
T H E EQUAL CREDIT OPPORTUNITY A C T AND . . . A G E
THE
A 75
CIAL BANKS.
STOCK
CURRENCY
W H A T T R U T H I N L E N D I N G M E A N S TO Y O U
9/73.
RATES ON CONSUMER I N S T A L M E N T L O A N S .
9/73.
NEW
MANUFACTURING
CORPORA-
SUPPLIES AND USES, Staff
Economic
SERIES FOR L A R G E
TIONS.
U.S.
10/73.
ENERGY
Study by Clayton Gehman. 12/73.
STAFF E C O N O M I C STUDIES
INFLATION AND STAGNATION IN MAJOR FOREIGN
Studies and papers on economic and financial subjects
that are of general interest in the field of economic
research.
DUSTRIAL COUNTRIES.
T H E S T R U C T U R E OF M A R G I N C R E D I T .
4/75.
N E W S T A T I S T I C A L SERIES O N L O A N C O M M I T M E N T S
SELECTED LARGE COMMERCIAL B A N K S .
SUMMARIES O N L Y PRINTED IN THE
GROWTH
OF M U L T I B A N K
HOLDING
MARKETS.
COMPANIES:
MARKET FRAMEWORK, b y Stephen A .
May
ADJUSTMENT
OF
M^—CURRENTLY
PUB-
R. Fry. May
1976. 22
Edward
pp.
EFFECTS OF N O W A C C O U N T S O N COSTS A N D E A R N I N G S
OF C O M M E R C I A L
BANKS IN
1974-75, by John
OF
INDUSTRIAL ELECTRIC POWER USE.
STRUC-
2/76.
S U R V E Y OF F I N A N C E C O M P A N I E S ,
3/76.
REVISED
SERIES
FOR
MEMBER
A G G R E G A T E RESERVES.
1975.
BANK
DEPOSITS
NISMS: A
SUMMARY.
BANKS.
NEW
Staff Economic Studies shown in list below.
AND
6/76.
MECHA-
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 OF U . S .
BULLETIN
Staff
4/76.
FEDERAL RESERVE OPERATIONS I N P A Y M E N T
TURE, by Samuel H. Talley. May 1977. 26 pp.
PRINTED IN F U L L IN THE
Staff
1/76.
R E V I S I O N OF M O N E Y S T O C K M E A S U R E S .
INDUSTRIAL P R O D U C T I O N — 1 9 7 6 R e v i s i o n .
RECENT TRENDS IN LOCAL B A N K I N G M A R K E T
THE
MODEL,
Economic Study by Robert J. Lawrence and
Samuel H. Talley. 1/76.
D.
Paulus. Sept. 1976. 49 pp.
VERSION
ECONOMETRIC
A N ASSESSMENT OF B A N K H O L D I N G C O M P A N I E S ,
Rhoades.
LISHED A N D A L T E R N A T I V E M E T H O D S , b y
SMALL
Economic Study by Douglas Battenberg, Jared J.
Enzler, and Arthur M . Havenner. 11/75.
pp.
1976. 25
SEASONAL
SINGLE-
10/75.
A
MIT-PENN-SSRC
1956-73, by Gregory E. Boczar. Apr. 1976. 27
pp.
EXTENDING MERGER ANALYSIS BEYOND THE
7/75.
RECENT DEVELOPMENTS IN INTERNATIONAL F I N A N C I A L
M I N N I E :
THE
AT
4/75.
RECENT TRENDS IN FEDERAL B U D G E T POLICY.
BULLETIN
(Limited supply of mimeographed copies of full text
available upon request for single copies.)
IN-
10/74.
O F F I C E S OF
10/76.
ESTIMATES
OF C A P A C I T Y
UTILIZATION:
FACTURING A N D MATERIALS.
MANU-
11/76.
U . S . INTERNATIONAL TRANSACTIONS IN A RECOVERING
ECONOMY.
REPRINTS
4/77.
BANK HOLDING COMPANY FINANCIAL
DEVELOPMENTS
(Except for Staff Papers, Staff Economic Studies, and
some leading articles, most of the articles reprinted do
not exceed 12 pages.)
CHANGES I N B A N K L E N D I N G PRACTICES,
A
T H E C O M M E R C I A L PAPER M A R K E T .
IN
1976.
4/77.
S U R V E Y OF T E R M S OF B A N K
1976.
LENDING—NEW
4/77.
SERIES.
5/77.
REVISED
INDEX
OF
MANUFACTURING
CAPACITY,
Staff Economic Study by Frank de Leeuw with
Frank E. Hopkins and Michael D. Sherman. 11/66.
U.S.
INTERNATIONAL
1960-67.
TRANSACTIONS:
M E A S U R E S OF S E C U R I T Y C R E D I T .
REVISED
MEASURES
UTILIZATION.
OF
AND
U.S.
IN
12/70.
MANUFACTURING
LIABILITIES
BANKS.
CAPACITY
10/71.
2/72.
PERFORMANCE
OF
12/71.
FOREIGN
BRANCHES
BANK
6/77.
HOLDING
COMPANY-
Study by Stephen A. Rhoades and Gregory E.
Boczar. 8/77
G R E E L E Y I N PERSPECTIVE, Staff Economic Study by Paul
Schweitzer and Joshua Greene. 9/77.
IN
TIME
MERCIAL BANKS,
OF
OF
A F F I L I A T E D FINANCE COMPANIES, Staff Economic
CHANGES
R E V I S I O N OF B A N K C R E D I T SERIES.
ASSETS
TRENDS
4/68.
THE
CONSUMPTION
AND
SAVINGS
Jan.-April
AND
FIXED
DEPOSITS A T
COM-
1977. 9 / 7 7 .
INVESTMENT
N O M I C R E C O V E R Y A B R O A D . 10/77.
IN THE
ECO-
76
Index to Statistical Tables
References are to pages A-3 through A-68 although the prefix '"A" is omitted in this index
ACCEPTANCES, bankers, 11, 25, 27
Agricultural loans, commercial banks, 18, 20-22, 26
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
BANKERS balances, 16, 18, 20, 21, 22
(See also Foreigners)
Banks for cooperatives, 35
Bonds (See also U.S. Govt, securities):
New issues, 36, 37
Yields, 3
Branch banks:
Assets 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
Weekly 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 Assets and liabilities)
Construction, 46, 50
Consumer instalment credit, 42, 43
Consumer prices, 46, 51
Consumption expenditures, 52, 53
Corporations:
Ptofits, taxes, and dividends, 38
Security issues, 36, 37, 65
Cost of 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 of 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 of deposits):
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
E M P L O Y M E N T , 46, 47
Euro-dollars, 15, 27
F A R M 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 of 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 Assn., 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:
Assets 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 Assn., 35, 40, 41
Gross national product, 52, 53
A712 Federal Reserve Bulletin • October 1976
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 of investments):
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
L A B O R force, 47
Life insurance companies (See Insurance companies)
Loans (See also specific types of 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
MANUFACTURERS:
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 components, 3, 14
Mortgages (See Real estate loans)
Mutual funds (See Investment companies)
Mutual savings banks, 3, 10, 20-22, 29, 32, 33, 41
N A T I O N A L 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
R E A L estate loans:
Banks, by classes, 18, 20-23, 29, 41
Life insurance compares, 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
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
New 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
New 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):
New issues, 36, 37
Prices, 28
T A X receipts. Federal, 31
Time deposits, 3, 10, 13, 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
U N E M P L O Y M E N T , 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
W E E K L Y reporting banks, 20-24
Wholesale prices, 46
Y I E L D S (See Interest rates)
78
The Federal Reserve l^stem
Boundaries of Federal Reserve Districts and Their Branch Territories
HAWAII
.
LEGEND
Q
Boundaries of Federal Reserve Districts
©
Federal Reserve Bank Cities
Boundaries of Federal Reserve Branch
Territories
•
Federal Reserve Branch Cities
Board of Governors of the Federal
Reserve System
Federal Reserve Bank Facility
@FedFRASER