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Not f o r Publication

neviz , 1Trn __

DECONTROLLED AFTER SIX M N H
OTS

H.Ik

March 2k, 1955
CAPITAL M . K T DEVELOPMENTS
AR E

Small volume of security o f f e r i n g s - S t a t e and l o c a l
governments o f f e r e d U6 million d o l l a r s of large issues during the
week ending March 18; no large corporate o f f e r i n g s were f l o a t e d .
This week large public issues f o r new c a p i t a l t o t a l i n g 101 million
d o l l a r s are scheduled f o r o f f e r i n g .
Bond y i e l d s - Yields on outstanding corporate Baa and highgrade municipal bonds did not change l a s t week; corporate Aaa yields
decreased one b a s i s p o i n t . Long-term U . S . Government y i e l d s dropped
three b a s i s points during t h e week ending March 18 and declined fur-~ther on Monday and Tuesday of t h i s week.
Stock p r i c e s r i s e - The SEC index of 265 common stocks i n creased moderately t o 222.7 l a s t week. Prices, a f t e r , d e c r e a s i n g on
Monday, rose on Tuesday and ",,'ednesday t o the highest l e v e l since
early March, according t o d a i l y indexes. Average d a i l y trading v o l ume declined t o 2.9 million shares l a s t week.
I n s t i t u t i o n a l Savings and Investments
i n 19$k
The inflow of new savings i n t o l i f e insurance companies,
savings and loan associations and mutual savings banks t o t a l e d
12,278 million d o l l a r s in 195hf as shown in the accompanying t a b l e ,
more than i n any other year t o d a t e . New savings flowing into these
i n s t i t u t i o n s represented two-thirds of t h e increase in net public
and p r i v a t e debt l a s t y e a r . Liquidation of U. S» Government securities—more than twice the volume i n 195U than in 1953—provided
a d d i t i o n a l funds f o r investments of other types. This l i q u i d a t i o n
was f a c i l i t a t e d by the increased demand of commercial banks f o r
Government obligations developing from the e a s i e r c r e d i t policy of
t h e Federal Reserve System, Moreover since Government s e c u r i t y
p r i c e s rose i n 195U t o about the same l e v e l as when they were purchased, the savings i n s t i t u t i o n s incurred no l o s s i n these s a l e s .
Aggregate mortgage holdings of the major types of savings i n s t i t u t i o n s increased almost 9 b i l l i o n d o l l a r s in 195k, a record
t o d a t e . Net investments i n domestic business s e c u r i t i e s were 2,it81
million d o l l a r s l a s t y e a r , compared t o 3,193 million i n 1953. Savings i n s t i t u t i o n s increased t h e i r holdings of S t a t e and l o c a l government s e c u r i t i e s by 752 million d o l l a r s , a growth well above t h a t
of any previous y e a r .




H.lU
L i f e insurance companies

-2-

'

.

Net mortgage a c q u i s i t i o n s of l i f e insurance'companies
amounted t o 2,652 m i l l i o n d o l l a r s l a s t y e a r , well above t h e corns p a r a b l e volume f o r 1953• Holdings of corporate s e c u r i t i e s rose
2,266 m i l l i o n d o l l a r s , but t h e i n c r e a s e was not a s l a r g e as i n
1953, due in p a r t t o t h e smaller volume of new i s s u e s and in p a r t
t o t h e heavier investments i n the h i g h e r - y i e l d i n g mortgages and
S t a t e and l o c a l government s e c u r i t i e s — p a r t i c u l a r l y the long-term
revenue bonds with high coupon r a t e s . A c q u i s i t i o n s of S t a t e and
l o c a l government s e c u r i t i e s and other a s s e t s were considerably
l a r g e r l a s t year than e a r l i e r . A major p a r t o f " t h e S t a t e and l o c a l
i n c r e a s e f o r a l l i n s t i t u t i o n s mentioned above was accounted f o r by
the l i f e insurance companies. I n c r e a s e i n a s s e t s was almost 700
m i l l i o n d o l l a r s l a r g e r l a s t year than t h e previous twelve-month
period and t o t a l e d 5,851 m i l l i o n . The' other source of funds—
s a l e s of Government obligations—provided 7^6 m i l l i o n d o l l a r s compared t o i|28 m i l l i o n i n 1953.
Savings and loan a s s o c i a t i o n s
The inflow; of savings c a p i t a l i n t o savings and loan a s s o c i a t i o n s was U,U8l m i l l i o n d o l l a r s l a s t y e a r , 23 per cent more than
- in 1953. The growth i n t h e flow l a s t year was r e l a t i v e l y l a r g e r
than i n e i t h e r of the other two types of i n s t i t u t i o n s . Since t h i s
i n c r e a s e more t h a n o f f s e t t o t a l demands made, mainly by mortgage
a c q u i s i t i o n s , e x t r a funds were a p p l i e d towards i n c r e a s i n g cash and
Government h o l d i n g s — e s p e c i a l l y t h e cash h o l d i n g s , which were r a i s e d
ii£8 m i l l i o n d o l l a r s .
Mutual savings banks
Mutual savings banks increased t h e i r holdings of mortgages
by 2,055 m i l l i o n d o l l a r s i n 195U compared t o a growth of 1,556 m i l l i o n t h e year b e f o r e . Investments i n "business s e c u r i t i e s grew but
not as much a s . d u r i n g 1953. New savings were 1,9^6 m i l l i o n d o l l a r s
l a s t y e a r , about 10 per cent more t h a n the flow t h e year b e f o r e .
Host of t h e a d d i t i o n a l funds needed f o r new investments were supplied
by ah i n c r e a s e d reduction of holdings of Government s e c u r i t i e s i n
195k.




H.lii

-3-

Uses and Sources of Funds by Major Types of Savings I n s t i t u t i o n s
1953-1951
(In millions of d o l l a r s )

Year

Total
uses 1/

Uses - Net purchases of:
Domestic
State.and
business Mort- l o c a l govt, Other
gages s e c u r i t i e s
securities

Sources of funds
Reduction
New
Of U> S.
sav- Government
ings
securities

Total
sources 2 /

. Total - Major Types of Savings I n s t i t u t i o n s
19$h
1953

13,608
11,317

2,181
3,193

8,967
7,132

752
23k

1,1*08
758

13,608
11,317

12,278"
10,5.79

1,095
53U

L i f e Insurance Companies
195k
1953

6,592
5,515

2,266
2,805

2,652
2,030

555
152

1,119
528

5,851
5,167

71*6
128

h,h 83
3,732

hMl
'3,635.

-103
-132

2,533
2,070

. I,9k6
1,777

152
238

6,592
5,515"

Savings and Loan Associations
195a
1953

3,732

-

1951
1953

2,533
2,070

215
388

'

1,260
3,546

223
186
Mutual Savings Banks

2,055
1,556

197
82

66
kh

and U7 S. Government s e c u r i t i e s .
2 / Includes other sources not shewn s e p a r a t e l y .
3 / Change of l e s s than 500 thousand d o l l a r s .
Mote.—Details may not add t o t o t a l s because of rounding.
Sources of daita.—Institute of Life Insurance, Federal Savings and Loan
Insurance Corporation, and National Association of Mutual Savings Banks.




H.llt

"h"
.
1

Further d e t a i l s on c a p i t a l market developments a v a i l a b l e
from e x h i b i t s - More d e t a i l e d information concerning r e c e n t c a p i t a l
market developments w i l l be found in the following e x h i b i t s which
are attached hereto:
A - Bond Yields
B - Stock Market
C - Corporate and S t a t e and Local
Government S e c u r i t y O f f e r i n g s
and Placements
D - Large Public Security Issues
f o r New C a p i t a l (Other than
U. S. Treasury)
E - Forthcoming Large Public S e c u r i t y
Offerings f o r New C a p i t a l (Other
than U. S. Treasury)
F - Yields on New and Outstanding
E l e c t r i c Power Bonds, Rated Aa and A

Business Finance and C a p i t a l Markets S e c t i o n ,
Division of Research and S t a t i s t i c s ,
Board of Governors of the Federal Reserve System.




H. 1 4

EXHIBIT

A

BOND YIELDS
WEEKLY

PER

CENT

PER

ANNUM
4

CORPORATE Baa

CORPORATE A a a

GOVERNMENT
LONG-TERM

vZ

/HIGH-GRADE
.

STANDARD

MUNICIPAL

AND P O O R ' S

CORP.

I

I I I I I I I I 1 I I I I I I I I I 1 II I
1951

1952

C o r p o r a t e 1/

Date

1954

1953

U. S . G o v t ,
long-term 2/

Spread between
C o r p o r a t e Aaa
and U. S . G o v t .

Highgrade
Mun. 3 /

( P e r c e n t p e r annum)
1952 - High
1953 - High
Low
- High
Low
1955 - High

19Sk

F e b r u a r y 18
February 25
March, k
March 11
March 18
* /
1

3.03
2.91
3.12
2.99
3.09
2.85
3.Oh
2.91
2.99
3.02
3.03
3-Oil
• 3.03

3.63
3.1x8
3.89
' 3-50
3.7k
3.a
3.19
3.1,5 '
3.17
3 -ii8
3.U8
3.19
3.19

2.79
2.56 .
3.15
2.71

2.7k
2.hh

2.77
2.62
2.72
2.77
2.75
2.72
2.69

.37
.19
.38
.19

M3

.32
,.3U
.25
.27
.25
.28
.32

•3h

2 .1*3.
3-1U
2.1x3.
2.56
2.23
2.1:6
2.36
2.1:1
2.1:3
2.1*6
2.1:5
2.1:5

1 a TfMfae+ftwo C W
A

5"/ F e d e r a l R e s e r v e ; w e e k l y a v e r a g e o f d a i l y f i g u r e s .
1/ Standard and P o o r ' s C o r p o r a t i o n ; '.Tednesday f i g u r e .
N o t e . — H i g h s and l o w s a r e f o r i n d i v i d u a l s e r i e s and may be c
for d i f f e r e n t s e r i e s .




different dates

'

STOCK MARKET

Date

Bank loans
1
to "others"
Trading • Common stock Customers
f o r purchases
Stock price volume 2 /
yields 3/
of securbalances 1\J
index 1 /
(per cent
(millions,
i t i e s $f
(adllions
(1947-49-100) of shares) per annum)
of d o l l a r s ) (millions
of d o l l a r s )

1952 - High
Low
1953 - High
195U - High
1955 - High
January
February
March 11
March 18

165-3
151.7
167.1
liili.O
221.ii
156.5
231.0
217.ii
2l8.ii •
226.8
231.0
220.8
222.7

2.0
0.9
2.5
0.9
3.7
l.ii
ii.6
2.8
3.6
3.2
3.0
3.2
2.9

.

5.77
5.13
5.75
5.15
5.33
ii-20
il.22
ii.21
il.22
ii.21

•

1,328
l,2iil
1,665
l,31ii
2,388
1,653
2,590
2,517
2,517
2,590

295
250
327
252
'
1I87
328
507
475
ii8l
U90
ii93
. £/501
507

1/ ART 1 nriAY of 6S nommnn et.o?If WAAkl V noinrr nri re.. 1919-inn? nnnvAnt.oH t.n
19li7-2T9»100 by Fed eral Reserve. The conversion f a c t o r i s 123.91.
2 / Weekly averages of d a i l y t r a d i n g volume on New York Stock Exchange.
5 / Moody's 200 common s t o c k s ; end of month f i g u r e s .
EZ End of month f i g u r e s f o r member f i r m s of New York Stock Exchange; excludes
balances secured by U. S . Government s e c u r i t i e s .
5 / Wednesday f i g u r e s f o r weekly r e p o r t i n g mentoer banks i n New York and Chicago;
excludes l o a n s f o r purchase of U. S. Government s e c u r i t i e s . On March it, 1953, t h e
l a s t d a t e on which f i g u r e s f o r a l l r e p o r t i n g banks r/ere a v a i l a b l e , New York and
Chicago accounted f o r ii5 per c e n t of such l o a n s . I n the p a s t New York and Chicago
loans h^ve f l u c t u a t e d more than t o t a l l o a n s .
r / Revised.
n.a.—Not available.
Note.—Highs and lows are f o r i n d i v i d u a l s e r i e s and may be an d i f f e r e n t d a t e s •
for different series.




H.li;

Exhibit G
Corporate and S t a t e and Local Government
S e c u r i t y O f f e r i n g s and Placements
(In m i l l i o n s of d o l l a r s )
New c a p i t a l

Corporate
1
1954
1
I

1953

544
4 39
660

s

1955

666

535
e/310
e/500

April
May
June

486
#2
#9

July
August
September

898
316
776

1955
January
February
March

e/486
e/3#
e/1,225

October
November
December
1st quarter
2nd q u a r t e r
3rd q u a r t e r
4th q u a r t e r
Year

1,008
2?8
#2
e/2,06l

1,613
1,998
2,021
1,899
7,561

S t a t e and l o c a l
1
1954
I

1953
389
360
426

779
675
1,123

734
748
853

329
649
434

183
325
753
.

396
411
565

279
261
649

519
259
475

577
4291/
1,438^/

#4
423
877

453
408
774 .

1,912
2,578

e/1,345

8,495

1,372
2,334
1,188

IS

1,176

31

5A77

Excluding f i n a n c e companies 2 /
1st quarter
2nd q u a r t e r
3rd q u a r t e r
4th q u a r t e r
Year

e/.l,66l

1,562
1,931
. 1,9U
1,795
7,229

1,669
1,991
1,223
2,344
7,227

5 / T o t a l new c a p i t a l i s s u e s excluding o f f e r i n g s of s a l e s and p e r s o n a l f i n a n c e
compara.es.
e / Estimated.
Mote.—Details may not add t o t o t a l s due t o rounding.




H.lli

Exhibit D
Large Public Security I s s u e s f o r New C a p i t a l
(Other than U. S . Treasury) 1 /
Proceeds of Large I s s u e s Offered
(Millions of d o l l a r s )

Month

19Sh - February
March
April
- - '
May •
June
July
August
September
October
November
December
1955 - January
February

Corporate

j
'•
-

S t a t e and
l o c a l government

103
160
169
32 U#0
336
75
335

__

213
378
557
- 557
603
92
86
U55
. 388
268
6#
3U1
101

to

0
9h
Hil
72-

Other 2/

50

30
35

Large I n d i v i d u a l I s s u e s Offered March 1 through 18
Issuer

Type 3 /

Coupon
Amount
r a t e or
Offering
(millions
Maturity n e t i n t e r Rating
yield
of
e s t cost
dollars)

CORPORATE
May Department S t o r e
SF deb.
. 25.0
Central & South West Corp. Common s t k .
20.1
Union Oil Company
Conv. deb.
21.0
P a c i f i c Gas & E l e c t r i c Co. 1st&refmtgbds-50.0
General Uotors Acceptance Corp.
Deb.
250.0
General Motors-Corp.
Common s t k . 328.6

1980

3 1/1)

3.25

1975
1987

3
3 3/8

3.00
• 3.30

196051972

3;3 1/2

3.00,3.50

A
Baa
Aa

STATE AND LOCAL GOVERNMENT
Portland, Oregon
S t a t e of Louisiana
Hempstead & N. Hempstead,
New York \
Houston, Texas




G.O.
G.O.

8.0
10.0

1958-75
1960-70

2.01
2.23

1.15-2.20
1.50-2.35

Aa
A

G.O.
G.O.

.15.5
15.0

1955-81*
1956-85

3.08
2.59

1.10-3.13
1.00-3.10

Baa
A .

H.lii

D-2

Large I n d i v i d u a l I s s u e s O f f e r e d March 1 through 18 ( C o n t ' d )

Issuer

Type

Amount
Coupon
(millions
r a t e or
Offering
Maturity net i n t e r of
yield
dollars)
est cost

Rating

STATE AND LOCAL GOVERNMENT
(Cont'd^
Multnomah County, Oregon
M e t r o p o l i t a n \7ater D i s t r i c t of S o u t h e r n G a l .
New York Bridge A u t h o r i t y
S t a t e of South C a r o l i n a
S t . Petersburg, Florida
Oyster Bay, New York
S t a t e of M i s s i s s i p p i
S t a t e of New J e r s e y
New J e r s e y Turnpike Auth.

G.O.

12.0^

1956-75

2.02

0.95-2.20

-Aa

G.O.
Rev.
G.O.
L.L.
G.O.
Rev.
G.O.
Rev.

8.0
16.0
20.0
1U.0
5.8

1956-80
1956-89
1956-75
1956-77
1955-83
1971-75
1957-90
1988

2.19
2.61
1.95
3.50
2.97
2.53
2.19
2.88

0.95-2.35
1.00-2.69
0.95-2.10
1.75-3.1*3
1.00-3.05
2.25-2.50
1.10-2.1*0
2.8L

Aa
A
Aa
Ba
Baa
A
Aa

6.6
3U.0

OTHER
None
1 / I n c l u d e s c o r p o r a t e and o t h e r s e c u r i t y o f f e r i n g s of 15 m i l l i o n d o l l a r s and
o v e r j S t a t e and l o c a l government s e c u r i t y o f f e r i n g s of 5 m i l l i o n and o v e r .
2 / I n c l u d e s f o r e i g n government and I n t e r n a t i o n a l Bank f o r R e c o n s t r u c t i o n and
Development i s s u e s .
3/ In t h e c a s e of S t a t e and l o c a l government s e c u r i t i e s , G.O. d e n o t e s g e n e r a l
o b l i g a t i o n ; R e v . , revenue bonds; G.R., g e n e r a l o b l i g a t i o n s a d d i t i o n a l l y s e c u r e d by
f a c i l i t i e s r e v e n u e s ; and, L . L . , l i m i t e d l i a b i l i t y o b l i g a t i o n s secured by pledge of
designated revenues.
V 3 . 5 m i l l i o n d o l l a r s not r e o f f e r e d pending s e t t l e m e n t of t a x p a y e r s * l i t i gation.




H.Ib

Exhibit E
Forthcoming Large P u b l i c . S e c u r i t y Offerings f o r New C a p i t a l
(Other t h a n U. S. Treasury) 1/
Expected Proceeds from Forthcoming Large Issues
During month following
d a t e shown
Corporate
S t a t e and other 2 /
l o c a l govt.
-

Date of
computation
195b - Feb. 26
Mar. 31
Apr. 30
May 28
June 30
J u l y 30
Aug. 31
S e p t . 30
Oct. 29
Nov. 30
Dec. 31
1955 - J a n . 31
Feb. 28

108
2 Oil
323
332
336
100
33U
3b3
15
9it

18U

16
710

it98

i

300
383
h36
66l
567
682
52 h

Subsequent t o
date shown
S t a t e and % h e r 21/
Corporate
l o c a l govt.
-

50

690

27

Si
526
532
303
608
lOh
135
2h6
216
hZ2
1,395

30

1,916
2,789
2,322
1,971
1,52k
1,553

50
27

1,876

2,158
1,957
2,682

2,1M

1,961
1,978

30
30
35

Forthcoming Large O f f e r i n g s , as of March 18
Issuer

Type

Amount
Approximate date
(millions
of o f f e r i n g
of d o l l a r s )

CORPORATE
Joy Manufacturing Company
P a c i f i c Northwest P i p e l i n e
New England Telephone and Telegraph
National Gypsum
General Dynamics Corp.
Tennessee Gas Transmission
Philadelphia E l e c t r i c
^Southern C a l i f o r n i a Gas Co.
•^Public Service of I n d i a n a , J l n e .
Alabama Power
•^Consolidated Natural, Gas
American Telephone and Telegraph

SF deb.
Interim notes
Common stock
Common stock
Conv. deb.
Deb.
Bds.
Bonds
Pfd. stock
1 s t mtg. bonds
Common stock
Conv. deb.

20.0
17.2
15.7

18.6

bo.o

25.0
20.0

hO.O
21.3
15.0
2h.h
650.9

March 22
March 29
March 31
April b
April 5
April 6
A p r i l 25
April
April
May 2b
June
1955

STATE AND LOCAL GOVERNMENT
New York S t a t e
Georgia S t a t e School Building Auth.
^ S p r i n g f i e l d , Missouri




G.O.
L.L.
Rev.

50.7

30.2
11.1

March 22
March 22
March 29

H.lU

E-2
Forthcoming Large O f f e r i n g s , as of March 18 (Cont'd)
Issuer

Type

Amount
Approximate date
(millions
of o f f e r i n g
of d o l l a r s )

STATE AND LOCAL GOVERNMENT (Cont'd)
S t a t e of Massachusetts
F l o r i d a S t a t e Improvement Comm.
San Francisco, C a l i f o r n i a
Los Angeles, C a l i f o r n i a
San Diego County, C a l i f o r n i a
L o u i s v i l l e , Kentucky
Calcasieu P a r i s h , Louisiana
Wichita, Kansas
Inter-American Center Auth., F l a .
Michigan Turnpike Authority
S t a t e of Louisiana
F l o r i d a S t a t e Turnpike Authority
I l l i n o i s Turnpike Authority
Connecticut Expressway
Texas Turnpike Authority
Sam Houston Turnpike Corp.
Texas Turnpike Company
Dade County Port A u t h o r i t y , F l a .
Springfield, Illinois
Allegheny County, Pennsylvania
S a n i t a r y Authority
C a l i f o r n i a To ll Bridge Authority
J e r s e y C i t y Sewerage Auth., N. J .
North Carolina Turnpike Authority

G.O.
Rev.
n.a.
n.a.
n.a .
n.a.
n.a.
n.a.
Rev.
Rev.
n.a.
Rev..
Rev.
Rev.
Rev.
Rev.
Rev.
Rev.

60.9
6.0
6.9
5-10.0
8.1*
» 7-S
5.5
7.1*
60.0
186.0
80.0
7li.O
390.0
100.0
58.5
Uj.6.0
11:0.0
21.0
9.0

Rev.
Rev.
Rev.
n.a.

85.0
235.0
16.0
200.0

March 29
March 31
April k
April 6
A p r i l 19
A p r i l 20
A p r i l 21
- A p r i l 26
Spring
Spring
Spring
Spring
1955
1955
1955
1955
1955
1955
1955
1955
1955
1955
1955

OTHER
None

•

and l o c a l government i s s u e s of 5 m i l l i o n and o v e r .
2 / Includes f o r e i g n government and I n t e r n a t i o n a l Bank f o r Reconstruction and
Development i s s u e s .
n.a.—Not a v a i l a b l e .
*—Included in t a b l e f o r f i r s t t i m e .




Exhibit F

H.lli

y i e l d s on New and Outstanding
E l e c t r i c Power Bonds, Rated Aa and A 1 /
A-rated o f f e r i n g y i e l d s
Aa-rated o f f e r i n g y i e l d s
Amount above
Amount above
Actual
Actual
seasoned y i e l d s
(per cent) seasoned y i e l d s (per cent)
(basis points)
(basis points)

Date

1952 average

3.16

13

3.35

12

1953 average

3.43

15

3.79

27

19$h average

3.Ok

3

3.12

-3

*3.35
*3.20
3.05
3.10
3.1k
3.1ii
*3.13
3.11
*3.10
3.10
None
3-11

2
-1
-10
-6
0
-2
-1
-1
-3
-2

3.23

9

3.27

12

195k - January
February
March .
April
May
June
July
August
September
October '
November
December

,

3.20
3.02
*2.93
2.%)
3.00
*3.00
None .
None
3.02
3.03 "
None
None

6'
0
0
5
h
1 .
3
3

3.15

13

February 2k
•
25

3.H;

7

March 10
16

3.17

0

1955 - January 19

8

Survey. Except where i n d i c a t e d , the a c t u a l y i e l d f i g u r e and the amount above
seasoned y i e l d s are averages of o f f e r i n g s during the i n d i c a t e d period and of
t h e d i f f e r e n c e s between t h e s e new o f f e r i n g y i e l d s and y i e l d s on seasoned i s s u e s
of s i m i l a r q u a l i t y f o r t h e same day. Average maturity f o r the seasoned i s s u e s
- v a r i e s from 26 t o 28 y e a r s .
•8—Single observation, not an average.




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