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Not for Publication

/ v/v /

DECONTROLLED AFTER SIX WORTHS
December 20, 1956

H.llt

CAPITAL MA.RKET DEVELOPMENTS
The volume of publicly sold security issues was large
last week, particularly for tax-exempt issues, but is expected to
be much smaller this week, During the week ending December lit,
large issues sold by State and local governments amounted to $181
million, including the $163 million Memphis, Tennessee electric
revenue bond issue. Corporate issues totaling $76 million and a
Canadian issue for $22 million were sold. This week, subscription
rights expire for two corporate debenture issues with proceeds of
$58 million. No large State and local government issues are expected.
Bond yields - Changes in yields on outstanding bonds were
mixed last week. Yields on corporate Baa, State and local government Aaa and Baa and U. S. Government obligations increased slightly
and those for corporate Aaa's remained stable while State and local
government revenue bend yields declined.
Stock market credit - Customer credit in the stock market
(excluding U. S. Government securities) increased $32 million during November, to total $3,91*6 million at the end of the month. The
increase in net debit balances—$>36 million—more than offset the
decline in October in these balances. Bank loans to "others" continued to decline in November, however. Borrowing by member firms
of the NYSE maintaining margin, accounts, except on U. S. Government
securities, declined $15 million, principally in borrowing on customer collateral. Customers' net free credit balances continued to
decline, totaling $822 million at the end of the month. These and
other data on stock market credit for. November and October are shown
in the following table.
End of month
November October

Change

(Millions of dollars)
Customer credit
Excluding U. S. Govt, securities - Total
Net debit balances
Bank loans to "others"
Net debit balances secured by U. Sf Govt, securities
Bank loans to others for purchasing or carrying
U. S. Govt, securities
Broker and dealer credit
- Money borrowed except on U. S. Govt, securities
On customer collateral
Money borrowed on U, S. Govt, securities
Customers' net free credit balances


Revised


3,91*6
2,781
1,162
33

3,91k
. 2,718
1,166
' 36

32
36
-It
-3

1*3

1*2

1

2,071
1,778
h3
. 822

2,086
1,788
1*5
r/835

-15
-10
-2
-13

Stock prices - Stock prices, as measured by the SEC index
of 265 common stocks, declined 1.8 points last week,closing at 277.It
on December lU. Daily figures through Wednesday of this week-indicate
little change in prices.
More detailed information concerning recent capital market
developments is presented in the attached exhibits.

Business Finance and Capital Markets Section,
Division of Research and Statistics,
Board of Governors of the Federal Reserve System.




EXHIBIT A

H I G H - G R A D E B O N D YIELDS
Weekly

CORPORATE

GOVERNMENT: J \ j

STATE AND LOCAL
GOVERNMENT Aaa

•

"

.1956

,«4 '

,,53 '

D. S. Govt., long-term 2/
Corporate
tiaV

Old series

New series

Spread between
U. S. Govt,
State and
local govt. (old series) and
CorporatelState and
Aaa J/
Aaa
J local Aaa

(Per cent)
1953 - High
Low
195U - High
Low
1955 - High
1956 - High
Low
November
November
November
December
December

16
23
30
7
lU

3.U2
2.99
3.09
2.85
3.17
2.91
3.73
3-07

(6/19)
(1/9)
(1/8)
(lt/23)
(12/23)
(1/7)
(13/30)
(3/2)

3.67
3.71
3.72

3.15 (6/6)
2.78 ' '
(
2.7U ( $ f
....
2 1 1 (8/7)
.**
. . (8/5)
2.9U . . . .
2.62 (1/7)
'
3.38 (12/U*)
2.80 (2/L7)

3.26

I

2.73 (6/25)
1.98 (1/8)

2.21 (6/10)

•IE

3.03(8/5)
2.89 (6/10)
. ... .
3.3U (12/11*) 3.0l* (12/13)
2.92 (2/3)
2.17 (2/23)
3.29
3.29
3.33

13

2.85
2.98

3.01
3.02

3.0k

.38
.19
.1*3
.32
.31*
.13
.1*1*
.13

• 81*
.30
.61
.29
.70
•5U
.68
.32

.la
.la
.37
.37
.31*

.la
.32
.35
.33
.3U

1/ Weekly average of dally figures! Average term of-bonds included la 25-26
^
2/ Weekly averages of daily figures. The old series includes fully taxable,
marketable 2 1/2 per cant bends due or first callable after 12 years through
September 1955, and those due or callable in 10-12 years thereafter; the average
term for first call of tbe bonds included declined from l t years in early 1953 to
i
11 1/2 years in early 1956. The new series is comprised of the 3 per cent bond
of 1995 and the 3 1/4 per cent bond of 1978-83.
2/ Thursday figures. Only general obligation bonds are included; average
term is 20 years.
Note.—Highs and lows are for individual series and may be on different dates
for different series.




EXHIBIT B

LOWER - GRADE BOND YIELDS

Corporate
Baa 2/

Date

State and
local govt.
Baa %/

State and
local govt,
rev. J/

(Per cent)
1953 - High
Low
195U - High
Low
1955 - High
1956 - High
Low

3.89
3.50
3.7k
3.W
3.63
3.U5
14.35
3.58

November
November
November
December
December

li.22
li.26
I . 30
t
L. 32
U.35

16
23
30
7
lt
i

(9/18)
(1/2)
(1/8)
(12/31)
(12/30)
(l/lii)
(12/Ui)
(3/9)

3.79
2.96
3.32
2.93
3.26
3.02
U.17
3.20
3.99
U.09
li.12
U.15
U.17

(6/25)
(1/8)
(1/7)
(8/5)
(12/29)
(1/6)
(12/13)
(3/8)

3.27
2.71
3.00
2.72
2.99
2.76
3.91*
2.89

(6/26)
(1/2)
(1/1)
(8/13)
(12/30)
(1/7)
(12/7)
(2/2U)

3.87
3.91
3.9k
3.9l
3.91

1/ Weekly average of daily figures. Average term of bonds
included is 25-26 years.
2/ Thursday figures. Only general obligation bonds are included; average term is 20 years.
Jl/ Friday figures. Average rating of bands included is
between Baa and A; average term is 20 years.
Note.—Highs and lows are for individual series and may
be on different dates for different series.




Stock price
Index 1/

Trading
Stock market customer credit
Common
volume 2/
Customers'
Bank
(millions yields 2/
debit bal- loans to
of shares) (per cent)
ances k/ "others" £/
(Millions of dollars)

1953 - High
Low
195k - High
1955 - High
Low
1956 - High
Low
October
November
November 30
December 7
December l t
i

167.1 (1/2)
lkk.O (9/18)
221.h (12/31)
156.5 (1/6)
270.7 (12/30)
217.U ( W )
295.5 (8/3)

2 7 U (1/20)
5.

2.5
0.9
3.7
l.it
lt.6
1.5
3.1
1.5

275.7
273.1
269.3
279.2
277.lt

1.8
2.2
2.3
2.k
2.It

5.75
5.15
• 5.33
I . 20
t
* i . 22
t
3.78
I . 25
t
3.86
it.23
lt.25

2ll5
,tt
2,055
3,lt36
2,Jt05
It,030
3,537
U,0it7
3,91k

1,665
1,31k
2,388
1,653
2,805
2,517
2,810
2,7ltO

780
66k
l,0k8
7k6
l,2kl
1,018
1,267
1,158

3,91k
3,916

2,7k8
2,78k

1,166
1,162
1,162
1,158

n.a.—Not available.
1/ SEC index of 265 common stocks, weekly closing prices, 1939*100; converted
to 19k7-k9*100 by Federal Reserve. The conversion factor is 123.91.
2/ Averages of daily trading volume an the New York Stock Exchange.
3/ Moody's 200 common stocks; end' of month figures.
k/ End of month figures for member firms of the New York Stock Exchange which
cariy margin acccnnts; excludes balances secured by U. S. Government obligations.
jWednesday figures for weekly reporting member banks. Excludes loans for
purchasing or carrying U. S. Government securities at banks in New York and Chicago.
Weekly reporting banks account for about 72 per cent of loans to others.
Note.—Highs and lows are for individual series and may be on different dates
for different series.




Exhibit D

H.lU

Corporate and State and Local Government
Security Offerings and Placements

(In millions of dollars)
Corporate
1956

January
February
March

I

1955

New capital
1956
UoU
696
390

535
312
538

396
Ull
565

377
U90
735

\l21
sia

73U
748
853^

376
199
333

2h9
h06

1,003
290
60U

e/6 35
e/325

579
70U
790

535
Uo?
1,223

5U7

April
May
June

816
i,iUi
830

b78
886
687

h97

July
August
September

1,066
669
836

670

778 2/
e/1,050 A/
e/1,100

1,162 ^
632
. 900

October
November
December
LLst quarter
r2nd quarter
1st half
3rd quarter
Three quarters
l t quarter
lh
Year

2,073
2,790
a,863
2,571
7A3U

e/2,928
e/to,362

h2S

635
656
81*2

597

6bh

2,165
.2,052
a, 217
1,911
6,128
2,695
8,821

State and local • .
19Sk
I
1955
1

195k

909
335

1

7kl

1,608
1,995
3,603
. 1,991
5,59L
.
1,896
7,1:90
V
.

e/kOO
1,190
1,603
3,093
908
It',001
e/1,360
e/5,361

350

U70

279
261
649 .

919
658
. i+08

591
1*23
877-

1,385
1,U18
2,803

1,372
2,331
3,706
1,188 •
4,894

1,121

3,927
1,9%
5,911

1,894
6,789

Excluding finance companies 3/
1st quarter
2nd quarter
3rd quarter
U t quarter
'h
Year

1,617

2,520

2,263

e/2,803
e/9,203

1,727
1,870

l,k3k

2,55L
7,569

1,527
1,927
1,911
1,792
7,158

1/ Includes $637*2 million AT&T convertible debenture issue.
2/ Includes $571.5 million AT&T common stock issue.
3/ Total new capital issues excluding offerings of sales and consumer finance
companies.
Note.--Details may not add to totals due to rounding.




H.Hi

Exhibit E
Large Public Security Issues for New Capital
(Other than U. S. Treasury) 1/
Proceeds of Large Issues Offered
(Millions of dollars)

Month

Corporate

1955 - November
December
1956 - January
February
March
April
May
June
July
August
September
October
November

State and
local government

221
263
95
212
278
395
623
185
592
217
558
386
701

Other 2/

Wl
227
- 192
1M .
163
157
233
1x63
• l6h
35
18U
383
135

25
50

50
20
. 37
35

Large Individual Issues Offered December 1 through lU
Issuer

Type 3/

Amount
Coupon
(millions Maturity rate or Offering Rating
of
net inter- yield
dollars)
est cost

CORPORATE
Sinclair Oil Corp.
Conv. sub. deb.
167.2
Chase Manhattan Bank
Cap. stk.
U7.0
Michigan Bell Tel.
Deb.
30.0
Long Island Lighting Co. 1st mtg. bds. 20.0
Public Service Elec.
& Gas Co.
Common stk. 31.2
General Telephone Corp. Common stk. 31.1
Texas Eastern Trans. mission Corp.
Deb.
30.0
Florida Power & Light Co. 1st mtg. bds. 15.0

A

,1986

4 3/8

1991
1986.

k 3/8
a 3A

I . 25
t
L58

Aaa
Aaa

1976
. 1986

5 1/2
L 3/8

5.50
L.30

Ba
Aa

Baa

•U.38

STATE & LOCAL GOVERNMENT
Prince Georges Co., Md.
Maryland State Roads
Commission
Milwaukee, Wisconsin




G.O.

5.0

1957-81

L28

3.00-L25

G.O.
G.O.

15.0
B.h

1958-72
1957-76

3.60

2.75-3.50L/ Aa
2.20-2.85 Aaa

2.81

Large Individual Issues Offered December 1 through lk (Cont'd)
Issuer

Type

Amount
Coupon :
(millions Maturity rate or Offering Rating
of
net inter- yield
dollars)
est cost

STATE & LOCAL GOVERNMENT
(Cont'd)
Florida State Board of
Education
Memphis, Tennessee

L.L.
Elec. rev.

9.3
163.2

1958-77
1963-92

3.79
k.hl

J/
3.£0-U.20

n.a.
A

OTHER

n.a.—Not available.
1/ Includes corporate and other security offerings of $l£ million and over;
State and local government security offerings of $5 million and over.
2/ Includes foreign government and International Bank for Reconstruction and
Development issues.
3/ In the case of State and local government securities, G.O. denotes general
obligation; Rev., revenue bonds; G.R., general obligations additionally secured
by facilities revenues; L.L., limited liability obligations secured by pledge of
^designated revenues.
k/ Part not reoffered.
5/ Not reoffered.




H.lU

Exhibit F

Forthcoming Large Public Security Offerings for New Capital
(Other tfian U. S. Treasury) 1/
Expected Proceeds from Forthcoming Large Issues
Subsequent to
During month following
date shown
date shown
State and Other 2/ Corporate State and Other 2/
Corporate
local govt.
local govt.

Date of
computation
1955 - Nov. 30
.Dec. 30
1956 - Jan. 31
" Feb. 29
Mar. 30
Apr. 30
May 3 1
June 29
July 31
Aug. 31
Sept. 28
Oct.. 31
Nov. 30

215
70
176
123
30.
8,
568
198
U37
2b7
369
315

683

U36

205
121
327
220
132
173
332
81
131
359
162
U8

50

—•* MM
——

37

23

230
85
376
233
1,013
818
iU
»8
567
1,096
1,202
1,009
990
i8
il

756
618
917
785
811
832
9U1

50

726
958
1,197
955
979

37

690

23

Forthcoming Large Offerings, as of December lU
Issuer

Type

Amount
Approximate date
(millions
of offering
of dollars)

CORPORATE
Burroughs Corp.

Deb.

30.2

National Cash Register Co.

Conv. sub. deb.

28.2

May Stores Realty Corp.
^Aluminum Co. of America
-xldaho Power Co.
*New England Tel. & Tel. Co.
Pacific Power & Light Co.
Louisiana Power & Light Co.
ttArmco Steel Corp.

Gen. mtg. bds.
Deb.
1st mtg. bds.
.
Deb.
1st mtg. bds.
1st mtg. bds.
Common.stk.

25.0
125.0
20.0
35.0
20.0
20.0
65.0

-^Standard Oil Co. of Ohio
^American Tel. & Tel. Co.
Michigan "Wisconsin Pipe Line Co.
Southern New. England Telephone Co.

SF deb.
Deb.
1st mtg. bds.
Common stk.

25.0
250.0
25.0
20.1




December 17 .
(rights expire)
December 19
(rights expire)
December
January 8
January 8
January 9
January 10
January 16
January 2b
(rights expire)
January
March
Winter
Winter

.

Hli
.i

F-2
Forthcoming Large Offerings, as of December l i (Cont'd)
i
Issuer

Type

Amount
Approximate date
(millions
of offering
of dollars)

STATE AND LOCAL GOVERNMENT
Fort Worth, Texas
Los Angeles, Calif.
Caddo Parish School District, La.
Orange County Flood District, Cal.
Mutate of California
^Dallas, Texas
^Dallas, Texas
Denver, Colorado
^Spokane Co. School District
No. 81, Washington
^Birmingham, Alabama
State of, Michigan
Pennsylvania Turnpike Commission
Washington State Toll Bridge Auth.
Inter-American Center Auth., Fla.
New York State Thruway Authority
Jacksonville Expressway Authority
|Florida State Turnpike Authority
"Oklahoma Turnpike Authority
State of Connecticut

5.0
18.0
5.0
10.0
85.0
10.0
5.0
20.0

January U
January 8
January 9
Januaiy 15
January 16
January 16
January 16
January 18

6.0
G'.
.O
G.O.
6.7
L.L.
52.0
Rev;
62.0
Rev. •
227.0
20.0
Rev.
G.O.
50.0
Rev.
U2.0
185.0
Rev.
Rev.
65.0
Expressway rev. 5Lo

January 18
January 23
Winter
Winter
Winter
Winter
Winter
Winter
Winter
Winter
Winter

G.O.
G.O.
• G.O.
G.O.
G.O.
G.O.
Rev.
G.O.

OTHER
None
*—Included in table for first .ime.
1/ Includes corporate and other issues of $15 million and over; State and
local government issues of $5 million and over,
2/ Includes foreign government and International Bank for Reconstruction
and Development issues.
Note.—Deletions for reasons other than sale of issue: Norfolk, Virginia,
$5.0 million issue—reduced to less than $5 million by rejection of bid for part
of issue.

I



If

Exhibit G

H.lU

Yields on New and Outstanding
Electric Power Bonds, Rated Aa and A 1/
Date
1952 average
195.3 average
195b average
1955 average.
1956 - January
February
March
April
May
June
July 3
18
'
25
August 1
30
September 11
13
25
October 10
31
November 21
December 6
12

Aa-rated offering yields A-rated offering yields
Amount above
Amount
Actual seasoned yields
Actual seasonedabove
yields
(per cent). (basis points) (per cent) (basis points)
11
26
-3
12

3.16
316
.*
3.02
3.23

13
16
2
9

3.35
3.78
3.12
3.33

None
*3.15
3.28
*3.77
#.53
*3.52

3
11
W
19
18

3.62
3.70

26
33

None
3.23
3.45
3.61
3.77
*3.75
3.82

-6
15
26
28
27
28

4.07
4.20
4.17
4.01 .

52
62
58
37

* 4.00

43

4.20
4.30

48
52

4.4o

63

4.30

47

4.58

70

——

-

Single observation, not an average,
1/ Covers only 30-year first mortgage bonds, as reported in Moody's Bond
Survey. Except where indicated, the actual yield figure and the amount above
seasoned yields are averages of offerings during the indicated period and of
the differences between these new offering yields and yields on seasoned issues
of similar quality for the same day. Average maturity for the seasoned issues
varies from 26 to 28 years.





Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102