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Not for Publication DECONTROLLED AFTER SIX MONTHS
H.lli

'

February 29, i960.

CAPITAL MARKET DEVELOPMENTS
IN THE UNITED STATES AND CANADA
(Including Monthly Review of Sources and Uses of Funds
of Financial Intermediaries in the United States)
1

I - United States

During the week ending February 26, corporations sold large
issues totaling $60 million and State and local governments sold issues
with aggregate proceeds of $75 million. A long-term issue for $150 million was also sold by Federal National Mortgage Association. The
calendar for this week includes large corporate offerings for $35 million
and State and local government issues totaling $102 million. A Canadian
issue for $35 million is also scheduled for sale.
Bond yields - Changes in yields on outstanding bonds were mixed
last week. Yields on U. S. Government and State and local government
obligations increased, while those for high-grade corporate bonds were
stable, and yields on lower grade corporate bonds declined.
Two new Aa-rated, first mortgage electric utility issues were
offered to investors last week, one to yield 5.08 per cent and the other
5.10 per cent. These yields are about 20 basis points below that for the
last conparable issue, an offering made in early December.
FNMA secondary market operations - Operations in the secondary
mortgage markets by the Federal National Mortgage Association in January
continued to reflect pressures in mortgage markets. Offerings to, and
purchases by, FNMA continued in large volume and there were no sales of
mortgages by the Association.
March security volume - New public security financing for both
corporations and State and local governments is expected to continue
moderate in March. The volume of corporate security financing is currently
estimated at $700 million, one-sixth larger than the volume in February
and one-tenth larger than in March last year. Large public issues are
expected to total about $300 million. New financing of $700 million in
March would bring the first quarter new issue total to $2.0 billion, onetenth less than the volume in the first quarter last year.
State and local government security financing is expected to
total $600 million in March, including a $100 million issue t?y the State
of California which is expected to be sold next week. This volume would
be about one-tenth larger than the February total, but one-twelfth below
the volume last March. For the first quarter of this year, State and
local government bond issues are estimated at $1.9 billion, one-seventh
less than the volume in the first quarter of 1959.




-2-

Stock prices - Stock prices, as measured by Standard and
Poor's index of 500 common stocks, showed little net change last week,
closing at 56.16 on February 26, Trading activity declined somewhat
with volume averaging 3.2 million shares a day.
Institutional investors - In December, share capital at savings and loan associations increased one-tenth more than a year earlier,
.while both life insurance company assets and mutual savings bank deposits
increased one-fifth less. The investment pattern of these institutions
showed little change in December from that of other recent months as
holdings of mortgages generally continued to increase rapidly and growth
in holdings of business securities was smaller than a year earlier.
For the year 1959, the savings inflow to these three major types
of savings institutions—life insurance companies, savings and loan
associations and mutual savings banks—was 6 per cent smaller than in the
previous year. The decline in the growth of deposits at mutual savings
banks was particularly sharp. (Time and savings deposits at commercial
banks also increased much less than in 1958.) The decline in growth of
life insurance assets was small, while share capital at savings and loan
associations increased somewhat more than a year earlier.
The increase in life insurance company assets in 1959 amounted
to $6.0 billion, k per cent smaller than in 1958, but larger than in most
other recent years. (Part of this decline probably reflects the less
rapid increase in stock prices in 1959 than in 1958.) There was net
liquidation of U. S. Government securities, principally in holdings of
bills and savings bonds, during 1959 in contrast with an increase in
holdings in 1958. The liquidation was smaller, however, than during the
years 1953 through 1957. After March, acquisitions of mortgages were
larger in each month last year than in the corresponding month a year
earlier with the total for the year being more than one-fifth larger.
(The growth in mortgage holdings had been smaller in 1958 than in other
recent years.) In contrast, these companies acquired business securities
in smaller volume in the last half of 1959 than in 1958 and for the
year the increase in such holdings was 5 per cent smaller than a year
earlier. Net acquisitions of State and local government securities
was much larger last year than a year earlier.
The net increase in share capital at savings and loan associations was a record §6.6 billion last year, 8 per cent larger than in
1958. These associations also increased their indebtedness to Home
Loan Banks by a record amount—$837 million and drew down their cash
substantially. This increase in funds enabled these associations to
increase their holdings of mortgages by $7.5 billion. This was a record
increase and one-third larger than in 1958. However, net acquisition
of mortgages slowed in November and December to a rate less than in the
comparable months of 1958. Growth in holdings of U. S. Government securities was about the same in 1959 as it had been in 1958.




H.U.

.3.
Sources and Uses of Funds of Major Types of Savings Institutions 1/
1953-1959
(In millions of ddllars)

Year

Cash

Uses of funds
U. S. BusiState &
Govt.
Mortlocal
gages
govt.
ities ities
sec.

Total
Other
assets

S0UTC6S

Sources of funds
Net change
in deposits Borrow- Other
or.savings
ing
capital

Life Insurance Companies
1959
1958 r/
1957
1956
1955
1951
1953

-36
-331*
69
151*
-526
Hi
18 -1,026
-1*76
55
-71*6
5
80
-1*28

2,365
2,1*79
2,1*95
1,972
2,126
2,280
2,792

2,207
1,821
2,21*1
3,569
3,1*97
2,653
2,030

1*86
3H*
121*
236
165
555
152

6,01(6
6,271
5,298
5,577
6,199
5,867
5,167

1,358
1,1*31*
950
808
832
1,120
51*1

—

—

—

Savings and Loan Associations
1959
-396
1958
1*39
27
1957
1956
52
1955 r/
92
1951* r/ 1*92
190
1953

652
6I46
391
1*1*0
325
93
133

-62
31
-30
-1*5
-61
1*3
65

-31*9
--266
-1*19
-1*89
•
.
-288
•-1*36
•-238

—
—
—

7,1*60
5,578
1*,278
1*,268
5,300
l*,ll*6
0*566

n.a.
n.a.

617
338
571
1*08
n.a. - 320
n.a.
172
n.a.
189

8,333
7,001
5,263
5,156
6,023
1,900
U,073

o,572
o,061*
<-1,761*
4,956
1*,890
i*,l*06
3,651

/ 9lt0
65
32
-211
71*5
-77
83

821
872
1*67
1*11
388
571
339

Mutual Savings Banks
1959
1958
1957
1956
1955
1951*
1953

-106
61*2
808
177
-178
230
388

2,855
2,088
1,1*22
2,281*
2,1*29
2,050
1,556

23,
1*3
13
32
37
193
82

109
91*
63
78
57
68
1*1*

1,1*70
2,611
1,857
2,037
1,998
2,11)6
1,897

r j Revised.
n.a.—Not available.
1/ For description of data see Exhibits J, K and L.




1,228
2,31*6
1,663
1,81*5
1,826
1,961
1,777

mmmm
—

242
265
191*
192
170
185
120

H.lh

-I4-

Although deposits at mutual savings banks rose during most
months, the rate of growth was smaller than in corresponding months of
1958. For 1959 as a whole, the net increase in deposits totaled $1.2
billion, nearly one-half less than a year earlier and the smallest
increase since 1951. Met acquisition of mortgages was one-tenth smaller
than in 1958. Early in the year acquisitions were larger than in comparable months of 1958 and even when the rate of growth became less than
that of a year earlier, acquisitions continued to be substantial. There
was a net liquidation of business securities generally throughout 1959
with the decline for the year totaling $106 million as compared with a
net acquisition of $61*2 million in 1958. There was also a net liquidation
of U. S. Government securities as in other recent years.
More detailed information concerning recent capital market
developments is presented in the attached exhibits.
Developments in the Canadian capital markets are presented in
fart II at the end.of this report.

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




HIGH-GRADE

BOND

YIELDS

/Vf
f ' U.S. GOVilNHIMT
>v/

LOWER-GRADE

BOND

YIELDS

rv^Z

•r\ >

A
IZ
V

/

V\ V

$.0

/

i

V •A
/
J

t

V




v

v

u

J

V.Z

\
V.O

V A r TT

-6-

Exhibit B - Tables for Exhibit A

H.lii

High-grade Bond Yields

Date

Corporate
Aaa y

U. S. Govt,
long-term 2/

Spread between
U. S. Govt, and
Corporate |State and „
local Aaav

State and
local govt.
Aaa y

(Per cent)
Low
High
Low
High
Low •
I960 - High
Low
-

195U
1957
1958
1959

Jan.
Feb.
Feb.
Feb.
Feb.

29
5
12
19
26 2/

2.16 (8/6)

2.85

k.lk

3.55
It. 61
it.09
it. 61
it.5it

s?

it. 61
it. 60
it. 57
it.5it
it.5it

3.76 (10/18)
3.07 (li/2S)
li.37 (12/31)
3.83 (1/2)
fc.l* (1/8)
It. 16 (2A9)
it.36
it. 29
It. 20
it. 16
it. 22

1.90 (9/2)

a

a®

.22

3.65(9/21.)
3.06 (3/26)
3.53 (1/7)

3.38 (2/18)

.50

.16
.38
.19

.25
.31
.37
.38
.32

I'M

3.38
3.38
3.39

Lower-grade Bond Yields
Corporate
Baa y

Date

State and
local govt.
Baa y

Spread between
Aaa and Baa
State and
. Corporate
local govt.

Jf

5*

1;

(Per cent)
195it
1957
1958
1959

Low
High
Low
Higi
Low
I960 - High
Low

Jan.
Feb.
Feb.
Feb.
Feb.

-

29
5
12
19
26 2/

'

3.itlt (12/31)
5.10 (11/29)
lt.5l (7/11)
5.32 (12/31)
It.83 (It/17)
5.36 (2/12)
5.31 (2/26)
5.36
5.36
5.36
5.33
5.31

2.93 (8/5)
it. 51 (8/29)
3.6U (5/1) it.it6 (7/2)
3.92 (3/26)
li.it6 (1/7)
it. 31 (2/18)
lt,ltl
it.itO
it. 35
it. 31
It. 32

.52
1.27
.77
.77
.56
.79
.71

.96
1.21
.93
-98
.79
.97

)

.75
.76
.79
.78
.77

.9lt
.97
.97
.93
.93

n
;
:
A
/

fiZ Preliminary.
1/ Weekly average of dally figures. Average term of bonds Included Is 25-26 years.
2/ Weekly average of divlly figures. The series Includes bonds due or callable In 10 years or more.
3/ Thursday figures. Only general obligation bonds are Included; average tern Is 20 years.
Note.—Highs and lows are for Individual series and may be on different dates for different series.




3*
;

STOCK

MARKET

FEDERAL

NATIONAL

SECONDARY

MARKET

MORTGAGE
OPERATIONS




ASSOCIATION

Exhibit D - Tables for Exhibit C

-8-

Stock Market
Stock price
index 1/

Date

Trading
Common
volume y
yields 2/ (millions
(per cent) of shares)

Stock market customer credit
Customers1
Bank
debit bal- loans to
ances V
"others" 5/
(Mil]Lions of dollars)

Total

1957-1959 - High
Low
I960 - High
Low

60.51 (7/31/59)
39.78_( 12/27/57)
59.50 (1/8)
55.U6 (2/12)

3.07
I1.66
3.18
3.1*1

k.3
l.k
3.6
2.7

k,76k
3,55k
n.a.
n.a.

3,k01
2,182

1,373
1,060
n.a.
n.a.

December
January
Feb. 12
Feb. 19
Ffeb, 26 2/

59.06
58.03
55.k6
56.2k
56.16

3.18
3.28
3.ta
3.37
3.37

3.3
3.2
2.7
3.5
3.2

k,k5k
4,365

3,280
3,198
n.a.
n.a.
n.a.

1,17k
1,167
1,151
1,11)5

n.a.—Not available.
g/ Preliminary.
1/ Standard and Poor's Tmposite index of 500 oomnon stocks, weekly closing prices, 1941-43=10. Monthly data
are averagea of daily figures rather than of Fridays1 only. Highs and lows are for Fridays' data only.
2/ Standard and Poor's composite stock yield based on Wednesday data converted to weekly closing prices by
Federal Reserve. Yields shown are for dales on which price index reached its high or low.
3/ Averages of daily trading volume on the New York Stock Exoliange.
4/ End of month figures for member firms of the New York Stock Exchange which carry margin accountsi excludes
balances secured by U, S. Government obligations.
5/ Wednesday figures for weekly reporting member banks. Excludes loans for purchasing or carrying U. S.
Government securities• Prior to July 1, 1959, such loans are excluded only at banks in New York and Chicago.
Weekly reporting banks account for about 70 par cent of loans to others. For further detail see Bulletin.

Federal National Mortgage Association Secondary Market Operations 1/
Estimated Offerings to FNttA
Standby
Immediate
Total
purcliase commitment

Purchases
by
MIMA

Sales
by
FNMA

(Millions of dollars)

1959 - Jan.
Feb.
Mar.
Apr.
May
June
July
Aug.
Sept.
Oct.
Nov.
Dec.
1960 - Jan.

^ 5

52.k
578

80.6

8k. k
109.5

123.1

1U1.3
1/IO8.3
r/105.6

t/116.3
137.9

19.8
. 76.6
92.5
r/109.9

13U.8

r/101.8
r/100.3
r/lll.k

128.6

r/3.7
3.2
2.6
7.7
7.2
7.8
17.1
13.3
6.5
6.5
5.3
k.9
9.3

33.7
27.6
36.5
39.6
38.3
k9.lt
62.3
71.7
85. k
105.5
92.6
92.2
86.1

.3
.8
1.1
.6
.3
.3
——

*
*
—

m s s s & s & s m s a s & t & f c

u.iuolly /deliver within ono yoor. Purchtvien Include thoee under both immediate purchase and ntandby

conwltmnW oontvnotfl. Data cyclvde PIMA activity under Special Asslotance and Management and
Liquidating Programs.


-9-

Exhibit.B

H.Ik

Long-term Corporate and State and Local Government
Security Offerings and Placements
(In millions of dollars)

1960
January
February
March

New capital
Corporate 1/
State and local 2/
1
1959
I960
1
1958
1
1959
1
1958
638
858
61*6

81*0
71*5
631

1,5532/

April
May
June

899
791
871*

1,11*0
597
887

931
593
1,006

July
August
September

531
718
.709

1,107
51*0
1,111*

12

806
1*03
651 '

887
865
.936

862
518
920

B

1*56
1*71*
1*35

2,216
2,561*

3,139
2,623
2,760
2,300

e/700
e/600
e/700

October
November
December
1st
2nd
3rd
Lth

quarter
quarter
quarter
quarter

e/2,000

a

1st half
Three quarters
Year

isS

'9,1*27

728

@

10,823

e/700
V550
t/600

1*68

2/W*
e/1,850

2,11*2

812

In
798
895
551

!;S

£/I,55O

1^365

673
6,223
EZ7,773

k,520
6,380
7,71*6

Excluding finance companies U/.
1st
2nd
3rd
lith

quarter
quarter
quarter
quarter

e/1,600

Year

2,011
2,1*09
1,695
e/2,538

2,899
2,586
2,731
2,213

e/8,651*

10,1*29

1/ Securities and Exchange Commission estimates of net proceeds.
2/ Investment Bankers Association of America estimates of principal amounts.
3/ Includes $718.3 million AT&T convertible debenture issue.
5/ Total new capital issues excluding offerings of sales and consumer finance
companies.




—10—

Exidbit F

H.lii

&

Other Security Offerings 1/
(]h millions of dollars)
Long-tern
Federal agency 3/
Foreign government 2/
"1950
I9S0
19^5"
1959
1959 • I

4
1956

January
February
March

77
59
2

196
53

April
May

56
50

523

h2

139
198
120

July
August
September

85
1
36

9
5
17

161)

October
November
December

33
1*2
70

58
123

7b

86

558

992

707

Year

199
175

—

-i

220

2,321

^

Federal agency 3/
359
5oo
189

371 b
208 V
mi* A

357
351
26U

U86
675
289

209
161
329

289

727
365
665

1*37 t'
206
330

733
1*71
288

bSh f*

llli
137

6.0U7

3,098

190
128
.295

233
U60
273

563
111
21*5
2ii6

?

98
150

State and local government U/

h6?

h23

235
313
306

231

Ml$

it,127

3,910

399

r

1,163
251

k!9

369

21x3
^

%

I
"

2 / Preliminary.
1/ Drta presented In this exhibit differ from those In Exhibit E In that refunding Issues, ao well as new*
capital issues, are Included. Long-term securities are defined as those maturing In more than one year.
\
2/ Includes securities offered In the United States ty foreign governnents and their subdivisions and by r
International organisations. Sourcet Securities and Exchange Commission.
i
3/ Issues not guarantied by the 0. S. Government. Source« long-term, Securities and Bcohange Cocnlsslonjf.
short-term, Federal Reserve.
r'

4

4/ Principally tax and bond anticipation notes, warrants or certificates ar.i Public Housing Authority
r.ot*s. In some instances PHA notes included may have a somewhat longer tens than one year. Source: Bond Buy




Exhibit G

H.lii

—11—

Large Long-term Public Security Issues for New Capital
(Other than ti. S. Treasury) 1/
Proceeds of Large Issues Offered
(Millions of dollars)

Month

Coxp orate

1959 - January
February
March
April
May
June
July
August
September
October
November
December
i960 - Januaiy

369
3U0
215
359
31*2
281*
110
363
199
1*00
1*21
230
279,

State and
local government

Other 2/

17U
35
176
20
50
60
50
98
175
20

335
551
369
563
258
635
19U
263

21k
29k

163
217
388

.

70
100

Large Individual Issues Offered February 1 through 26

Type y

• CORPORATE
Consolidated Nat. Gas Co.
.Pacific Tel. & Tel. Co.
Tenn. Gas Transm. Co.
Duke Power Co.
Duquesne Light Co.
Brooklyn Union Gas Co.
Dayton Power & Light Co.

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

Deb.
.
Deb.
Com. stk.
1st ref.mtg.bds.
S.F. deb.
Pfd. stk.
1st mtg. bds .

25.0
72.0
55.2
50.0
20.0
15.0
25.0

Rating

1985
1993

5 z
5 1/8

1*.95
5.05

Aaa
Aaa

1990
2010

5 1/8
5

1*.95

k.97

Aaa
Aa

1990

5 1/8

5.10

Aa

STATE AND LOCAL GOVERNMENT
Milwaukee Co., Wise.
G.O.
New York, New York
G.O.
Wash.Sub.Sanit.Dist., Md.
G.O.
Public Housing Authorities
G.O.
Dallas, Texas
G.O.
Dallas, Texas
Rev.-Ut.
Rev.-Ut.
Port of New York Authority




12.5^
1961-80
3.19
22.0
1961-65
3.35
10.0
1961-90/75 3.77
102.8 1961-2000/76 3.82
10.0
1961-80
3.1*1*
8.0
1961-80
3.1*3
30.0
1961-80/69 3.66

2.65-3.25 Aaa
2.85-3.35 A
Baa
-3.0O-L50
2.60-3.90 Aaa
2.70-3.50 A
2.70-3.50,, Aa
2.80-3.702/ A

H.lli

G-2

-12-

Large Individual Issues Offered February 1 through 26 (Cont'd)

Type 3/

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

Rating

STATE AND LOCAL GOVERNMENT
(Cont'd)
St. Louis, Missouri
Los Angeles Co., Calif.
Cuyahoga Co., Ohio
Alabama Bd. of Educ.
Elizabeth River Tunnel
Comm., Va.

1962-80
1962-79
1961-80
1961-80/65

2.75-3.35 Aa
2.90-3.85 - Aa
2.65-3.50 Aa
2.80-3.80 Aa

G.O.
G.O.
G.O.
Rev.-S.T.

i2.a
18.3
10.5
20.0

Rev.-Ut.

26.0

2000

1.62

1.50

S.F. deb.
S.F. deb.

15.0
30.0

1985
1985

5 3/8
5 5/8

5.to
5.70

A
A

125.0
150.0

1985
1962

5 z
h 7/8

5.00
1.98

Aaa

3.29
3.81
3.Ill
3.75

•

—

OTHER
Prov. of New Brunswick,
Canada
Montreal Metro.Corp.,Can.
International Bank for
Reconstruction and
Development
Fed. Natl; Mtge. Assn.

Bds.
Deb.

State and local government security offerings of $10 million and over.
2/ Includes foreign government and International Bank for Reconstruction and
Development issues and non-guaranteed issues by Federal agencies.
3/ In the case of State and local government securities, G.O. denotes general
obligations; Rev.-Ut., revenue obligations secured only by income from public
utilities; Rev.-Q.Ut., revenue bonds secured only by revenue from quasi-utilities;
Rev.-S.T., revenue bonds secured by revenue from specific taxes only; Rev.-Rent.,
revenue bonds secured solely by lease payments.
V $1.3 million of bonds of 1961 to 1970 not reoffered.
5/ 1 per cent of 1980 not reoffered.




i

—

i

-13-

Exhibit H

H.Ik

Foi*thcoming Large Long-term Public Security Offerings for New Capital
(Other than U. S. Treasury) 1/
Expected Proceeds from Forthcoming Large Issues
Date of
computation

During month following
date shown
State and
Corporate
Other 2/
local govt.

1959 - Feb, 27
Mar. 31
Apr. 30
May 29
June 30
July 31
Aug. 31
Sept. 30
Oct. 30
Nov. 30
Dec. 31
I960 - Jan. 29
Feb. 29

198
396
2l*6
287
165
238
198
371*
385
226
210
207
301

292
550
251*

2kl

11*6
356
385
270
115
295

W5
210
255

Subsequent to
date shown
State and '
Corporate
Other 2/
local govt.
279
1*76
31*6
332
272
305
517
691*
509
271
280
252
372

20
50
50
25
70
30

bS

35

1*81
761
517
761
500
1*06
1*02
1*70
336
1*85
51*5
310
385

20

50
50
25
*

70
30
1*5
35

Forthcoming Large Offerings, as of February 26
Issuer

Type

Amount
Approximate date
(millions
of offering
,of dollars)

CORPORATE
*States Steamship Co.
Imperial Investment Co., Ltd.
General Motors Acceptance Corp.
^General Telephone Co. of Fla;
MidmAmerican Pipeline Co.
Chesapeake & Potomac Telephone Co.
Northern Indiana Public Service Co.
Louisiana Power & Light Co.
*Coastal States Gas Producing Co.
•KGeneral Telephone & Electronics Corp
Commerce Oil Refining Corp.
Kratter Corp.

Ins.'bds.
Coll. tr. bds.
Deb.
1strafcg.bds.
Sub. deb. & stk.
Deb.
1stratg.bds.
1st mtg. bds.
S.F. deb.
Com. stk.
Debl, bds. & com.
Pfd. stk.

20.2
15.0
100.0
15.0
20.5
25.0
15.0
20.0
20.0
50.0
Ii5,0
26.0

Mar. 2
Mar. 3
Mar. 10
Mar. 11
Mar. 16
Mar. 16
Mar. 16
Mar. 30
Mar.
Mar.
Indefinite
Indefinite

STATE AND LOCAL GOVERNMENT
Grand Rapids Expressway, Mich.
Newark, New Jersey
New York State Thruway Auth.
Dade Co. Port Authority
*State of Louisiana




Rev.-S.T.
G.O.
G.O.
Rev.-Ut.
G.O.

18.0
15.0
50.0
19.2
15.0

Mar.
Mar.
Mar.
Mar.
Mar.

1
1
3
3
7

H-2

H.lii

-ll*-

Forthcoming Large Offerings, as of February 26 (Cont 'd)
Issuer

Type

Amount
Approximate date
(millions
of offering
of dollars)

STATE AND LOCAL GOVERNMENT (Cont'd)
Cook Co., Illinois
*State of Delaware
State of California
Ventura Port Dist., Calif.
•sTriborough Bridge & Tunnel Auth.
•^Jacksonville, Fla.

Rev.-S.T.
G.O.
G.O.
Rev.-Ut.
Rev.-Ut.
Rev.-Ut.

100.0
10.0
100.0
30.0

Mar. 8
Mar. 8
Mar. 9
Mar.
April
May 10

Deb.

3L5

Mar. 3

25.0

12.k

OTHER
Metropolitan Toronto, Canada

1/ Includes corporate and other issues of $15 million and over; State and
local government issues of $10 million and over.
2/ Includes foreign government and International Bank ior Reconstruction
and Development issues and non-guaranteed issues by Federal agencies.
Note.—Deletions for reasons other than sale of issue: None.




H.U*

Exhibit I

_%$_

Yields on New and Outstanding
Electric Power Bonds, Rated Aa and A 1/

Date

1952 - 1958
High
Low
1959 - January
Februaxy
March
April
May
June
July 9
10
15
30
Aug. 5
20
Sept. 18
Oct. 22
23
28
29
30
Nov. 25
Dec. 8
9
10
1960 - Jan. 7
Feb. 25
26

Aa-rated offering yields
A-rated offering yields
Amount above
Amount above
Actual
Actual
seasoned yields
seasoned yields
(per cent)
(per cent)
(basis points)
(basis points)

I S M

3

5.50 (u/7/57)
3.00 (3/17/54)

•» ;
11.97

*4.95

37
29

4.93

31

1:8

t

5.15

¥>

5.15

42
li2

5.08

5.30

5.08
5.10

123
-15
23

A . 67

18

!:Sy

5

5*io
5.oo

13

5.65

60

5.25
5.1*0

35
5o

5.1*5
5.1*1*
5.30E/

51
50
28

5.10

19
19

63

w»
116

*—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.
2/ Provides for a 5-year period during which issue may not be called for
refunding at a lower coupon rate. Monthly averages so marked include one or
more issues with such a provision. Other issues have no such provision.
2/ Includes one issue which provides for a 7-year period during which the
issue may not be called for refunding at a lower coupon rate.




H.lii

Exhibit J

_i63
|

Sources and Uses of Funds by
Life Insurance Companies
(in millions of dollars)

Ca h

U. S.
Govt.
ities

Value of assets at
end of period:
19$6 -Dec.
• 1957 - Dec.
1958 - Dec.
1959 - Dec.
Changes:
1957 - Oct.
Nov.
Dec.
1958 - Jan.
Feb.
Mar.
Apr.
May
June
July
Aug.
Sept.
Oct.
Nov.
Dec.
1959 - Jan.
Feb.
Mar. Apr.
May
June
July
Aug.
Sept.
Oct.
Nov.
Dec.

1,273
1,29k
1,363
1,327

7,519
7,028
7,182
6,818

-17
22
138
-102
-4l
20
-18
81
-24
22
-18
1
-17
55
110
-81
-57
-14
-2k
10
3
-15
19
-31
22
33
99

13
-92
-181
166
. 16
-124
Ik
-71
45
172
k4
k
11
19
-142
303
-71
-185
22
-16
11
13
95
-185
-22
-131
-168

Uses of Funds 1/
BusiState and ;
ness
local govt* Mortsecurgages
ities 2/
ities

39,552
42,133
44,612
46,977
244 212
258. .
229
158
244
216
143
201 •
191
129
214
309
137
308
188
223
251
242
193
242
214
75
95
208
207
227

2,234
2,377
2,691
3)177
13
10
10
50"
12
24
14
29
34
24
37
20
26
32
12
53
30
66
49
79
23
94
30
.15
8
16
23

Total
sources
or uses

32,994
35,271
37,092
39,299

12,272
13,206
14,640
15,996

170
132
237
17%
137
142
115
118
102
128
139
142
186
145
291
119
139
136
116
135
157
214
174
211
251
240
315

6
110
7
139
76
103
39
164
148
45
154
72
72
88
334
-17
174
108
80
97
60
208
101
95
92
134
226

95,844 .
101,309
107,580
113,626 O

1/ Uses of funds represent net_changes in assets and therefore reflect net,
rather than gross, uses.
2/ Includes securities of domestic corporations only.
Source: Institute of Life Insurance.




..

429
394 \
469 «
6581:
358 v
409 %
380 ,
464
506
582
485 "•
453
587 • 1
476
913
565 r>
438 ?
362 :
485
498 ;
# 6 :
728 ?
494
200
# 9 '
499 j
722 '
:«

H.l4

Exhibit K

»17-

Sources and Uses of Funds by
Savings and Loan Associations
(In mil]ions of dollars)

Cash

Value of Assets
at End of Period
1956 - Dec.
1957 - Dec.
1958 - Dec.
1959 - Dec.

2,119
2,146
2,585
2,189

Uses of Funds 1/
U. S.
Govt.
Other
Mortgages assets
ities

2,782
3,173
3,819
4,471

Changes:
1957 - Oct.
Nov.
Dec.
1958 - Jan.
Feb.
Mar.
Apr.
May

35,775
40,049
45,627
53,087

Total
sources
or uses

2,199 42,875
2,770 48,138
3,108 55,139
3,725 63,472

Sources of Funds
Net
change
BorrowOther
savings
ing 3/
capital

37,148
41,912
47,976
54,548 .

1,347
1,379
1,444
2,384

*,380
4,847
5,719
6,540

-18
4l6
16
480
361
103
87
-5
60
86
10
278
23
378
447
59
-65
614
431
253
125
923
-5
-434
-118
10
56
197
453
45
- 134
-375
-128
240
-19
13
173
407
376
159
212
488
338
-89
4
554
' 155
102
661
112
119
362
187
403
37
1*2
12
681
528
511
-29
199
99
81
178
165
789
-311
-43
573
935
July
216
180
-290
42
-90
554
73
-37
Aug.
110
616
12
-70
360
205
564
51
Sept.
146
692
161
578
84
-77
45
447
Oct.
104
605
-107
58
137
507
174
739
Nov.
102
42
51
665
480
470
41
144
Dec.
212
528
1,072
847
335
37
-53
-437
1959 - Jan.
402
-181
-298
297
346
434
-55
93
Feb.
-26
80
226
408
-56
427
578
97
Mar.
-2
76
241
98
765
593
529
-5
Apr.
-182
262
105
420.
151
705
779
97
May
26
604
23
178
981
63
754
314
10
840
245
1,091
1,090
-312
-4
313
July
-108
126
104
-432
190
783
31
347
Aug.
22
118
211
17
-43".
727
723
394
Sept.
670
65
675
148
-53
83
-7
444
Oct.
-68
621
88
648
136
113
7
399
Nov.
65
630
90
-34
459 . 140
483
57
Dec.
372
-29
479
770
1.177
219
-626
-52
!
2/ Preliminary.
"
'
1/ Uses of funds represent net changes in assets and therefore reflect net,
rather than gross, uses. Savings and loan associations do not hold business securities and data on holdings of State and local government bonds, presumed to be small,
are not available.
2/ Prior to 1957, data adjusted to include mortgage pledged shares as currently
reoorted.
3/ Advances from Home Loan Banks and other borrowing.
Digitized for Source:
FRASER
Federal Savings and Loan Insurance Corporation.



- J

Kxidbit L

it. lit

~18~

Sources and Uses of Funds by
Mutual Savings Banks
(In millions of dollars)

Cash

Uses of Funds 1/
U. S.
Busi- State &
local
MortGovt,
govt.
gages
securr
securities ities 2j
ities

Sources of Funds
Other

Total
sources
or uses

Net
change
in
deposits

Other

30,032
31,695
3U,oia
.34,977

3,279
3,it73
3,738,
3,952

Value of assets
at end of
1956 - Dec. 920 7,971
1957 - Dec. 890 7,552
1958 - Dec. 921 7,266
Dec. 837 6,855
1959
Changes:
-2lt
1957 - Oct.
Nov.
6
rDec.
125
-6a
1958 - Jan.
Feb.
63
Mar.
36
Apr.
-47
MayJune
-66
July
Aug.
-5
Sept,
18
Oct,
-8
Nov.
-38
Dec.
101
1959 - Jan.3/ •96
Feb.
18
' Mar.
li5
Apr. -lilt
May
8
June
h3
. July -79
Aug.
3
Sept.
-2
Oct.
-27
Nov.
20
Dec.
119

i

-136
-136
-26
-21
>1
-85
-62
-36
11
19
-27
-92
-32
-2

119

S

-itlt
13
-85
-13
-12
-32
-281
-85
- 21

3,523
it,331
it,973
it,82k
60
93
75
160

86

86
97
120

It
8

2!
kl

-16

6
-31
58
-20

-kl

13
-2

-55
-28
-2

669
682
725
7it6
-3
7
-7
It

6

it
-19
2it
8
2
2
-3
-1

-rr
-it
a
-33
10
19
It
-1

19,529
20,951
23,039
2it,755

698
761
855
912

33,311
35,168
37,779
38,929

12it
100
litl
130

-itl
38
-9
25
20
9
-29
ItO
5
-28
29
29
-46
it3

-20
108
299
27o
251

iSk

195
253
193
198
181
195

;
i
?08
125
175
155
161
llt5
179

156
160
12!
119

32
38
-32
it5
39
-12
33
31

'kl
-10

'!5

269
26U
152
251
237
. ItO
123
309
-rnr
216
330
-10
217
161
32
192
163
-283
65
205

3k

36
it05
1U9
336
93
181
300
88
llt3
267

g

itl8

~T2T~

-5k

72
-106
102 .
7
1 <-•
88 >
—36 .-*f
108
-30 '$

ill

113
313

103
17 *
-16 T

120
202
-5it
80
197
-187
-27

-2;

6

33k

86 i

112 I
-3it|
-96 f
-92%,
-129:

1/ Uses of funds represent net changes in assets and therefore reflect, net
rather than gross, uses.
2/ Includes Canadian government and political subdivisions, International Bank
for Reconstruction and Development, nonguaranteed Federal agency and other bonds as
v;ell "as corporate bonds and stocks.
3/ Adjusted to eliminate the effect of a consolidation of a large savings bank
a commercial bank.
Digitizedwith
for FRASER
Source: National Association of Mutual Savings Banks and Federal Deposit Insurhttp://fraser.stlouisfed.org/
ance Corporation.

Federal Reserve Bank of St. Louis

February 29, I960
Part II - Canada.
Treasury bill yields eased slightly in Canada last week but
bond yields had a general upward tendency. Demand pressures from current
and prospective offerings of bonds in the local government and corporate
sectors produced a decline of about one point in bond prices• The declines
in stock prices were resumed on the Toronto and Montreal exchanges.
Money market conditions. Treasury bill yields declined only
fractionally last week. The yield on the 3-month bill eased from U.62 per
cent to U.61 per cent and the rate on the 6-month bill fell from U.92 per
cent to U.86 per cent (see Table). The chartered banks were substantial
net buyers during the week but holdings of the public declined. The rate
on day-to-day loans averaged U.25 per cent for the week ending February
2k or about 0.15 per cent below the previous week's average.
The spread in favor of the Canadian 3-month bill compared with
the United States bill was reduced to O.Wi per cent; this spread was
virtually offset by the 0.36 percent discount on the 3-month Canadian
dollar (see Table).
Bond market developments. Bond yields moved up during the week in
the government and private sectors of the bond market under pressures of
local government and corporate demands. On Thursday, spreads between
comparable Canadian and United States securities were (figures in parenthesis refer to the preceding week):
*

O.Wi
0.51
0.77
1.05
1.27

per
per
per
per
per

cent
cent
cent
cent
cent

on
on
on
on
on

a 91-day bill (0.£8)
a 182-day bill (0.6l)
an 8-year bond (0.77)
a 20-year bond (1.05)
a 35-year bond (1.35)

In the government sector, bond yields moved up mostly about 5
basis points last week. The chartered banks continued to add to their
bond holdings but the public reduced its holdings by an equivalent amount.
There was no change in the Bank of Canada's net holding of bonds.
The local government and corporate sectors reported continuing
new-issue activity. A $6 million Newfoundland 6-l/U per cent debenture
offering will have a 10-year maturity priced to yield 6.U9 per cent and
a 20-year maturity priced to yield 6.52 per cent. A 6.0lt per cent yield
is reported on a $7.5 million Saskatchewan bond. The one-to-five year
maturities of a $5 million 6-l/U per cent serial issue of Hamilton,
Ontario have been placed privately; the remaining $U«3 million of six-totwenty yqar maturities are being offered at a 6.31 per cent yield. A small .
public utility bond is offered to yield 7 per cent and a 20-year secured note
of a smaller instalment finance firm was privately placed at a 7-1A per
cent yield.




-20-

The biggest offering of the current week is a $30 million 6-1/2
per cent debenture of the General Motors Acceptance Corp. of Canada. The
1975 maturity of this offering is priced to yield 6.60 per cent and a
1980 maturity priced to yield 6.63 per cent. Both tranches are noncallable
for 10 years. On March U, the United States parent company is offering
a $100 million debenture issue in New York with a 21-year maturity and
press reports estimate a yield of 5 to $-1/8 per cent. In addition, the
company has announced a $75 million private placement in the United States
market.
During 1959> cash raised through new security issues in Canada
totalled $2,302 million compared to $3,050 million in 1958 (see Table).
Government of Canada borrowings declined by $500 million and corporate
bond borrowings by $U00 million during the year. There was an increase
of $135 million in finance company paper compared to a reduction of
$111 million in 1958. New"corporate stocks totalled $U07 million compared
with $300 million in the preceding year.
Stock markets. Stock prices resumed their declines last week.
At the low point op Thursday, the Toronto industrial index was at lt91.72
compared to 1*98.35 a week ago and to 512.72 a month ago. The Montreal
industrial index was at 289.8 compared to 292.9 a week ago and to 308.2
a month earlier.

British Commonwealth Section
Division of International Finance
Board of Governors of the Federal Reserve System




-21Selected Government of Canada Security Yields
Discount
on 3-fflo.
Canadian
dollar^

Spread between
Canadian & U.S. rates

Date

3-month
Treasury
blllsj/

Intermediate
Govt,
bonder'

Longterm
Govt,>
bond2/

1957 - High
1958 - High
Low
1959 - High
Low •

li.08
3.65
0.87
6.16
3.25

U.81
U.52
3.31
5.30
U.U5

U.35
1U2
3.78
5.30

U.U1

1.19
0.U7

2.96
0.30

Feb. k
11
18
25

U.76
U.75
U.62'
U.61

5.36
5.U0
5.36
5.U7

5.38
5.35
5.2U
5.31

1.06
1.12
1.05
1.05

0.81
0.90
0.58
0.UU

L o

^

billaf/

0.5U
0.U2
o.la
0.36

y Average yield at weekly tender on Biursday.
.
y Government of Canada 2-3A par cent of June 15, 1967-68.
3/ Government of Canada 3 - l A per cent of 1979.
§/ U.S. Government 3 - l A per cent of 1978-83. Government of Canada 3 - l A per
cent of 1979.
.
5/ Spread between Canadian auction rate and composite market yield for the
U.S. bill on the close of business on Thursday.
6/ Spread between 3-eonths forward and spot price of the Canadian dollar,
expressed as per cent per annum, on Thursday.

Canada: New Money Raised Through New Security Issues,
Calendar Year, 1955 to 1959
(in millions of Canadian dollarsj"
1955

1956

1957

1958

1959

3U0
195
535

- 616
- 150
- 766

- 120
_ s
- 70

1,382
^130
1,252

H*3
582
725

211
225
320
26
782

5U0
227
801
_ 5
1,573

5U9
26U
976
3
1,783

8U0

1,667

1,832

6lli
3U0
651
3
1,609
- 131
1,U98

560
305
159
11
1,035
135
1,170

95
367

162

176
51U
689

90
U27
517

29
271
300

65
3U2

1,837

1,591

2,279

3,050

Government of Canada.:
Bonds
Bills and notes
Total
Non-Government:
Provincial bonds
Municipal bonds
Corporate bonds
Other bonds
Total bonds
Finance company paper
Total
Corporate stocks:
Preferred
Common
Total
Total financing




9k

hB

,

w

2,302