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Not for 'Publication ^CONTROLLED AFTER Six MONTHS
October 2h, 1957

H.llt
CAPITAL MARKET DEVELOPMENTS
(Including Quarterly Review of State and
Local Government Security Financing)

Large public security offerings for new capital during the. week
ending October 8 totaled $111 million for State and local governments and
$75 million for the International Bank for Reconstruction and Development.
No large corporate issues were sold last week, The calendar for this week
initially included corporate offerings totaling $125 million and State and
local government issues with aggregate proceeds of $91 million. However,
one large corporate issue, Commercial Credit Company's $50 million note
issue, has been postponed because of prevailing market conditions. No new
offering date has been named.
Bond yields - Changes in yields on outstanding bonds were mixed
last week. Yields on U. S. Government and corporate Baa-rated obligations
increased while State and local government Aaa-rated bond yields remained
stable. Yields on corporate Aaa's and State and local government Baa's declined.
Stock prices - Stock prices, as measured by the Standard and Poor's
index of 500 common stocks, declined further last week, closing at 1*0.33 on
October 18. Prices declined sharply .on Monday and continued to decline, but
somewhat more moderately, on Tuesday of this week. On Wednesday prices rebounded, closing at UO.73. Trading volume has been very heavy — averaging
U.8 million shares a day for the first three days of the week.
State and Local Government Security
Offerings in the Third Quarter of 1957
State
security issues
and over 50 per
bonds sold were
continued to be

and local governments offered $1,552 million of long-term
in.the third quarter of 1957, & record third quarter volume
cent above the corresponding period of 1956. Nearly all
for the purpose of raising new capital, as refunding issues
small in volume.




H.lli
Long-Term Security Issues of State and Local Governments
Third Quarter
(In millions of dollars)
'

1957

Issuing authority:
State
County and township
Municipality
School, district
Special authority
Unidentified 1/
Total
Purpose of issue:
New capital total
Schools 2/
Highways, bridges, and tunnels
Residential buildings
Hospitals and institutions
Sewer and water
Misc. public service enterprises
Veterans' aid
Other
{ Unidentified 1/
Refunding
Total
Type of issue:
General obligation
Revenue
Utility
Quasi-Utility
Special tax
Rental
Public Housing Authority
Federal Government loans 3/
Total

256
117
557
379
2i
l3

1956

119 .
86
295
2i
9i
191

f
1951

1953

" 77
125
296
210
230
199

157
96
- 286
177
351
163

21k
72
2h2
155
k3k
111

1955

.

1,552

988

1,136

1,232

1,258

M E
~1%E
270
37
19
282
hi
75
231-

971
i;06
105
9
5
170
91
2
18L

1,121
273
200
129
7,
183
18
8
109
199

1,188
272
271
HiO
13
151
6k
10
106
159

1,253
277
hl8
125
lk
139
2k
15
100
liil

—

22

17

1,552

988.

1,100
388

680
218
191
22
6 •
30

7
21
59
6k
1,552

61
• 988

12

W:

5

1,136

1,232

1,258

681
333

591
199
n.a.
n.a.

897
23k

122
1

136
3

125
1

1,136

1,232

1,258

£/ Data for years prior to 1956 probably understate school issues by about one-fourth
because of unclassified small issues.
\ 3/ Coverage for 1956 and 1957 is broader than for earlier years.
Note.—Details may.not add to totals because of rounding.
Source.—1953-1955, Bond Buyer and Federal Reserve; 1956 and 1957, Investment Bankers
'ssociation of America. Data for 1956 and 1957 not strictly comparable with data for earlier
r
earr




- 3 Purpose of issue - As in other recent years, more bond issues were
sold for school building construction than for any other purpose. The volume
of such offerings amounted to $568 million, nearly 1 0 per cent greater than in
*
the third quarter last year. Issues to obtain funds for sewer and water construction were the second largest in volume and totaled $282 million, as compared with $170 million in the third quarter a year earlier.
Sales of highway and of veterans' aid bonds were substantially
larger during the third quarter than a year earlier. The increase in bonds
sold for veterans' aid reflected the sale of a large issue for this purpose
by the State of California. Issues for miscellaneous public service enterprises were the only type in smaller volume this year than last.
Type of issuer - All levels of governments sold a markedly greater
volume of securities inthe third quarter than in the corresponding period of
1956. Municipalities sold the largest volume of bonds, accounting for more
than one-third of all issues in the quarter. Except for issues of State
governments, comparison of current data with those prior to 1956 is difficult
because of differences, in classification procedures.
Type of issue - General obligations accounted for a slightly larger
proportion of the total in the third quarter this year than in 1956. The
share of revenue bond financing did not change significantly. Sales of utility
revenue bonds increased substantially from last year — the only two years for
which such data are available.
It should be noted that beginning with this quarterly report a
more detailed classification of security issues by type of issue is available.
In particular, it is now possible to subclassify revenue issues into four
major groups. 1)'Utility revenue, bondsrate-those-used to finance projects'
usually cbniidfered^d be; p l l f i u i k f i B (electric,: water, sewer, etc.)
mbifvtflcti
2) The quasi-utility category includes bonds which are also secured by nontax revenues, but which are used for projects not hormally associated with
the services rendered by public utilities — such as parking lots and hospitals. 3) Special tax revenue bonds are those secured by the earmarking of
revenue from specific taxes. U) Rental revenue bonds are those secured solely
by lease payments.
More detailed information concerning recent capital markets 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

I

\ U .1 . G O V E R N M E N T : *
S

V

lorg-l.rm

'/

A A r 4 -

U. S. Govt., long-term jj
Corporate
Old series

New series

State and
local govt.
Aaa

Spread between
D. S. Govt.
(old series) and

(Per cent)
3.12
2.99
3.09
2.85
3.17
2.91
3.79
3.07
U.Ik
3.66

(6/19)
(1/9)
(1/8)
(U/23)
(12/23)
(1/7)
(12/28)
(3/2)
(9/27)
(V12)

14.12

t.U
il

1*.12
It. 09
1*.07

3.15
2.76
2.71
2.1*1*
2.9l*
2.62
3.1*9
2.80

(6/6)
(12/26)
(1/9)
(8/7)
(8/5)
(1/7)
(12/21)
(2/17)

n.a.
2.73
n.a.
1.98
n.a. •
2.21
n.a.
1.90
3.03 (8/5) 2.3U
2.89 (6/10) 2.05
3.39 (12/28)3.05
2.92 (2/3) 2.17

(6/25)
(1/8)
(6/10)
(9/2)
(9/8)
(5/26)
(12/27)
(2/23)

3.75 (10/18)
3.15 (2/8)

3.66 (10/18)3.1*5 (8/29)
3.22 (2/8) 2.76 (2/21)

3.68
3.68

3.63
3.61
3.60
3.61

i S
3.75

1 / Weekly average of daily figures.

3.66

3-1*3

3.1a

3.38
3.29

3.29

.81*
.30
.61
.29
.70
.51*
.68
.32
.1*9
.11*

.38
.19
.l»3
.32
• 3U
.13
.1*1*
•13
.51
.25
.a
.16
.1*1*
.1*2
• 32

.

.25
.27
.30
.37
.1*6

Average term of bonds included is 25-26

2/ Weekly averages of daily figures. The old series includes fully taxable,
marketable 2 1/2 per cent bonds due or first callable after 12 years through
September 1955, and those due or callable in 10-12 years thereafter; the average
term to first call of the bonds included declined from lit years in early 1953 to
11 1/2 years in early 1956. The new series is comprised of the 3 per cent bond
of 1995 and the 3 1/U per cent bond of 1978-83.
y Thursday figures. Only general obligation bonds are included} average
term is 20 years.
N o t e . — H i g h s and lows are for individual series and may be on different dates
for different series.




EXHIBIT B

L O W E R - G R A D E BOND YIELDS
Weekly

Per cent per

Late

Corporate
Baa 1/

.

State and
local govt,

State and
local govt.
Baa 2/

rev.

JJ

(Per cent)

1957 - High
Low

3.79
3.89(9/18)
2.96
3.50 (1/2)
(1/8)
3.32
3.hh
(12/31)
,2.93
3.26
3.63 (12/30)
3.02
3.15 (1/lU)
lulil (12/28) ' 1.22
3.20
3.58(3/9)
li.98 (10/18)
U-51
h.U2 (1/12)
• 3-90

September 20
September 27
October 1
*
October 11
October 18

i*.9U
1.96
1.97
li.96
1*. 98

1953 - High
1951* - High
1955 - High
1956 - High

3.7k

(6/25)
(1/8)
(1/7)
(8/5)
(12/29)
(1/6)
(12/27)
(3/8)
(8/29)
(2/21)

U.l*9 -

h.U7
h.hS

3.27
2.71
3.00
2.72
2.99
2.76
3.98
2.89

(6/26)
(1/2)
(1/1)
(8/13)
(12/30)
(1/7)
(12/28)
(2/2U)

3.98 (1/1*)
3.7 0 (2/22)
V

a. 36
h. 33

1/ Weekly average of daily f i g u r e s . A v e r a g e term of bonds
included is 25-26 years.
2/ Thursday figures. Only general.obligation bonds are included; average teim is 20 years.
3/ Friday figures. Average rating of bonds included is
between Baa and A; average term is 20 years.
h/ Series discontinued, as of March 15.
N o t e . — H i g h s and lows are for individual series and may
be on different dates for different series.




STOCK MARKET

1
Bate

Stock price

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

Stock market custiurner credit
Customers'
debit bal- loans to
ances 4/ "others" 5/
(Millions of dollars)

1956 - High
Low
1957 - High
Low

26.54 (1/2)
22.95 (9/18)
35.98 (12/31)
21.. 93 (1/8)
15.89 (12/9)
35.28 (1/11,)
49.64 (8/3)
43.22 (1/20)
1*9.08 (7/12)
40.33 (10/18)

2.5
0.9
3.7
1.4
4.6
1.5
3.1
1.5
3.1
1.4

August
September
October 4
October 11
October 18

45.84
43.98
42.79
40.94
40.33

1.9
1.8
1.6
3.1
2.6

1953 - High
1954 - High
1955 - High

.

6.25
5.38
5.32
4.32
4.42
3.64
4.35
3.82
' 4.69
3.91

2,455
2,055
3.436
2,405
4,030
3,537
4,047
3,914
4,031
3,832

1,665
1,314
2,388
1,653
2,805 •
2,517
2,823
2,740
2,887
1,713

4.15
4.34
4.40
4.63
4.69

3,929
3,882

2,833
2,789

780
664
1,048
746
1,241
1,018
1,267
1,155 .
1,163
1,086
1,096
. 1,093
1,086
1,086

n.a.—Not available.
1/ Standard and Poor's composite Index of 500 common stocks, weekly closing
prices, 1941-43-10. Monthly data are averages of dally figures rather than of
Fridays' only, highs and lows are for Friday's data only.
2/ Averages of dally trading volume on the New York Stock Exchange.
2/ Standard and Poor's composite stock yield based on Wednesday data converted to weekly closing prices ty Federal Reserve.
U/ End of month figures for member firms of the New York Stock Exchange which
carry margin accounts; 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 at banks in New York and
Chicago. Weekly reporting banks account for about 70 per cent of loans to others.
For further detail see Bulletin.
Note.—Highs and lows are for individual series and may be on different dates
for different series.




Exhibit D

^H.ll,

Corporate and State and local Government
Security Offerings and Placements
(In millions of dollars)

January
February
arch

M

in
July
Aupust
September
October
^November
^December
1st
2nd
3rd
lith

ouarter
ouarter
ouarter
ouarter

1st ha]f
Three Quarters
Year

K-; c
t v apital
:

Corporate'
1956
|

1955

1,063
1,071
l,3hh

573
712
817

. 535
I.U7
1,223

7b2
573
506

lO
ib
696
390

53>
312
>33

92b
771
3,189

818
1,11.6
6bl

1.78
666
667

#5
5h6
39h

378
1.90 .
735

1.27
350
61. ? •

e/1,075
~ e/900
- eA,000

1,063
65b
838

597
61,1
670

521.
572
118

1,08
206
357

1,70
2.
19
I406

e/600

639
31,7
Lop

919
658
1,08

•

1,821
1,705
1,51L

1,190
1,603
971
1,395

1,365
1,1.16
3,12b
1,98b

;

3,093
b,06b
5,159

2,802
3,927
X911

1957

j
!

eA,00U

1

•

3/
1,089^."
1,088

1,162-^
632
90U

3,179
3,181*
e/2,975

2,102
2,805
2,556
2,922

2,165
. 2,052
1,911
2,695

6,663
e/9,638

1,907
7,1,63
10,38k

1,216
• 6,127
8,821

.

1957

3,526
5,ol.u

State ; i loc:: Y
uu
;2
1
1V56
1

.

Excluding finance companies b/
1st
2nd
3rd
bth

quarter
ouarter
ouarter
ouarter

3,268 :
2,921,
e/2,6?5

Year

1,61.7
2,5141
2,216
2,826

1,727
1,870
1, LW,
.,11
25,4

9,259

7,595

-

••
•

e/ Estimated.
2/ Data through June 1956 are Bond Buyer data classified as new capital by
Federal Reserve; later data are from the Investment Bankers Association of America
and a r somewhat more complete as to coverage than the earlier data, particularly
ie
for Federal Government loans.
j
2/ Includes #637.2 million AT&T convertible debenture issue .
?/ Includes $571.5 million AT&T common stock issue .
t/ Total new capital issues excluding offerings of sales and consumer finance
co"panifa.
Note.—Details may not add to totals due to rounding.




H.lU

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

Corporate

Month

State and
local government

18U
383
135
201
386
306
19U
h99
2U8
176
265
357
185

55 8
386
701
U30
567
671
788
U77
329
877
525
526.
537

1956 - September
October
November
December.
1957 - January
February
March
April
May
July
August
September

Other 2/

35

.

100
50
125
25
39
25

-

30

Large Individual Issues Offered October 1 through 18

Issuer

Type j/

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

Rating

CORPORATEGulf States Utilities Co.
Southwestern Bell Tel. Co.
Northern Natural Gas Co.
Shamrock Oil & Gas Corp.
Columbia Gas System Inc.
Chem. Corn Exchange Bank
Commonwealth Edison Co.

1 s t mtg.bds,
17.0
Deb.
100.0
16.0
Pfd. stk.
Conv.sub.deb. 17.5
Deb.
25.0
Cap. stk.
U8.U
Pfd. stk.
25.0

1987
1992

U 7/8
h 3/h

U.78
U.70

Aa
Aaa

1982
1982

5 1A
5

5.25
5.00

Ba
A

STATE f LOCAL OOVFFN'TJIT
State of Nov; York
State of Oregon




C.O.
G.O.

' 2h .0
2.90
1958-72
26.6 196U-7U/67 . 3 . ( 1

2.25-2.90
2.70-3.25

Aaa
Aa

5-2
Large.Individual Issues Offered October 1 through 18 (Cont'd;
Lanier

Type 3/

Coupon
Amount I
(millions J Maturity rate or Offering Rating
net inter- yield
Of
|
est cost
[dollars;' \

5TVTF, AKD I/?CAL mVELN^'.NT
(Continued)
City f Co.of San Francisco,
Calif.
State of Ohio
Cincinnati, Ohio
Chicago Park Dist., 111.
Necklenberg Co., W. C.
L.A. Dept of Vjtr. £ Pwr.,
Calif.
Dayton City S. D., Ohio
San Diego U.S.D., Calif.
Commonwealth of Mass.
Pittsburgh, Penna.
Md. State Roads Comm.
^ t o n , Massachusetts

G .0.
Hwy. rev.
G .0.
G .0.
G .0.
-

26.9
31.0
5.3
6.0
5.0

1958-77
1958-72
1959-98
1959-77
1959-73

3.13
3.32
3.20
3.1*5
3.37

2.10-3.20
2.20-3.30
2.LO-3.30
2.60-3.50
2.60-3.1*0

Aa
Aa
Aaa
A
A

Rev.
G .0.
G,
.0.
G,
.0. G,
.0.
.0.
G.
0,
.0.

18.0
8.0
lu.O
63.5
6.6
15.0
16.0

1958-87
1959-78
1960-79
1958-77
1958-77
1958-72/65
1958-77

3.52
3.22
3.53
3.L9
3.30
3.51
3.56

2.50-3.55
2.50-3.15
2.80-3.60
2.50-3.15
2.1*0-3.30
2.60-3.)i5
2.50-3.60

Aa
Aa
A
Aa
A
Aa
A

h 3A

IN75

Aa

OTHER
Int'l Bk. for Rec. t Dev.

75.0

1980

1/ Includes corporate and other security offerings offtlfjmillion 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, 0.0. 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.




1 V i . c n n Larf.c Fublic Security Offerings for New Capital
'.ihoip
(Other than 11.3. Treasury; 1/
Expected Proceeds from Forthcoming Large Issues
Subsequent to
During month following
date shown
date shown
Corporate State and Other 2/ Corporate State and Other 2
/
local govt.
local govt.

- Date of
computation
29^6 - Sept. 28
Oct. 31
Nov. 30
Dec. 31
1957 - Jan. 31
Feb. 28
Mar. 29
Apr. 30
May 31
June 28
^
July 31
Aug. 30
Sept. 30

315
683
h36
176
591
7b0
16
*1
187
525
370
526
578
576

359
162
18
*
280
153
153
290
179
97
172
252
213
370

__

23
1UU
35
25
" 25
25
30

1,009
990
181
7 96
966
795
1)86
- 258
525
Il
i5
811
8*
15
• 617.

1,197
955
979
763
618
631
062
396
388
19
)8
5Hi
h39
587

__

23
100
35
25
25
25
30
15

Forthcoming Large Offerings, as of October 18
Issuer

Type

Amount
(millions Approximate date
of dollars) of offering

CORPORATE
Consolidated Edison Co.
General Portland Cement Co.
Commercial Credit Co.
American Telephone & Telegraph Co.
National Cylinder Gas Co.
Consumers Power Co.
Merrimack Essex Electric Co.
Dayton Power 6 Light Co.
Southern New England Tel. Co.
^Beneficial Finance Co.
.^Transcontinental Gas Pipe Line Corp.
*Idaho Power Co.
Ohio Power Co.
Standard Oil Co. of New Jersey




1st & ref.mtg.bds.
Conv.sub.deb.
. Notes
Deb.
Conv.sub.deb.
Conv. deb.
1st mtg. bds .
1st mtg. bds .
Common stk.

60.0
15.0
50.0
250.0
17.5
35.2
20.0
25.0
27.1)

Deb.
50.0
S.F. deb.
20.0
1st mtg. bds .
15.0
1st mtg. bds,
.
25.0
Common stk, 250.0
.

Oct. 23
Oct. 23
Oct. 21)
Oct. 29
Oct.
Nov. 1
(rights expire)
Nov. 7
Nov. 7
Nov. 8
(rights expire;
Nov. 8
Nov. 15
Nov. 20
Nov. 20
Dec. 17
(rights expire)

BkH.lb
Forthcoming Large Offerings, as of October 18 (Cont'd)
Amount
Approximate date
(millions'/ of offering
of dollarsj

Issuer

STATE A ' LOCAL GOVERNMENT
fD
Milwaukee, Wisconsin
G.O.
State of California
C.O.
G.O.
State of Washington
State of Mississippi
G.O.
G.O.
Broward Co. Spec.Sch.Dist. No. l,Fla,
Los Angeles Co. Flood Control Dist.,
Calif.
Rev.
Utilities rev.
Jacksonville, Florida
Port of New York Auth.
Rev.
G.O.
*Cook County, Jll.
G.O.
State of Kentucky
Water rev.
*Springfield, Missouri
Water works rev.
•^Chicago, Illinois
•»New York Thruway Auth.
Rev.
Thoroughfare rev.
State of Ohio
G.O.
New York City
G.O.
| Territory of Hawaii
Rev.
Washington Toll Bridge Auth.*
G.O.
^Chicago Bd. of Education, 111.
G.O.
State of Missouri
State of Texas
G.O.
University System Bldg. Auth., Ga.
Rev.
Pennsylvania Turnpike Commission
Rev.
Rev.
InterrAmerican Center Auth., Fla.
New York State Thruway Authority
G.O.

5.5
85.0
52.0
10.0
12.5

Oct.
Oct.
Oct.
Oct.
Nov.

20.0
30.0
25.0
20.0
35.0
22.0
20.0,
50.0
30.0
36.5
7.0
30.5
25.0
30.0
12.5
12.0
62.0 "
20.0
50.0

Nov. 5
Nov. 7
Nov. 7
Nov. 7
Nov. 12
Nov. 13
Nov. 13
Nov. 19
Nov. 19
Nov. 19
Nov. 19
Nov. 20
Dec. 17
1957
1957
1957
1957
1957
1957

15.0

1957

22
23
29
30
1

OTHER
Union of South Africa

Ext. loan bds.

• —In eluded in table for first time.
K
1/ Includes corporate and other issues of £15 million and over3 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: None.

E




H.lU'

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

Date

1952 - 1956
High
Low
1957 - January
February
. March
April 3
10
12
May 10
15
16
21
23
29
June 5
7
11
July 3
.10
11
16
17
August l t
i
September 5
6
"
October J2/
15
17

Aa-rated offering yields A-rated offering yields
Amount above
Amount above
Actual
Actual
(per cent) seasoned yields (per cent) seasoned yields
(basis points)
(basis points)
^56)
1.30(12/12/
2.93(3/31/51)
i.tt
tii
i . 25
t
None
it.29

i . 50
t
U.38 2/

62

- 3

57
ii
tt
50

65
51

it.63

75

it.78

87

it.57
it.77
i . 65
t

i8
t
68
56

5.00
i . 80
t
i . 85
t
i . 78
t

75
51
56
hS

4.58(12/6/56)
3.00(3/17/51)

70
-15

it.62
None
i . 50
t

i5
t

6t
i

i . 60
t
it.50
it.53
it.53 2/
i . 70
t

59
i9
t
52
52
69

5.oo
5.25

98
123

5.10

106

it.80 2/
it.88 2/

6t
i
?t
i

it.90

71

5.10
5.uu
li.95

51.
39
3U

T f 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. Other issues have no such provision.




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