Full text of H.16 Capital Market Developments : October 26, 1959

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Not for Publication

DECONTROLLED AFTER SIX MONTHS

H.lii

October 26, 1959*
CAPITAL MARKET DEVELOPMENTS
(Including Monthly Review of Sources and
Usesi of Funds of"Financial Intermediaries)

The volume of large public security financing for new capital
continues to be substantial. During the week ending October 23, corporations sold large issues totaling $85 million; a Public Housing
Authority issue for $102 million and a foreign government offering for
$20 million were also sold. The calendar for this week includes large
corporate issues with aggregate proceeds of $110 million and State and
local government issues totaling $90 million.
Bond; yields - Bond yields declined last week for all categories of outstanding bonds, except those for high-grade corporate bonds,
which remained stable.
A new Aa-rated first mortgage electric utility bond issue was
offered to investors last week to yield U.95 per cent, 15 basis points
higher than the yield for a comparable offering made a month earlier. *
It should be noted that the recent issue carried a 5-year refunding
restriction, while the earlier issue had no such restriction.
Mortgage recordings - Total nonfarm mortgage recordings
remained at a record seasonally adjusted annual rate of $33-b
billion
in July, one-fifth above a year earlier and two-fifths above the low
of late 1957 and early 1958. Conventional recordings in August continued to represent about three-fourths of the total.
The mortgage recordings series, based on moitgages of $20,000
or less primarily on 1- to U-family properties, serves as an indicator
of trends in home financing. By excluding mortgages of nore than #20,000.,
this indicator has understated the volume and type of Lome financing'to
a minor but increasing extent in the past few years. These over-^20,000
mortgages, nearly all of the conventional type, have become somewhat '
more frequent recently as property values have risen and lending t e m s
have been liberalized. But tne degree of understatement, while tending
upward, may still be only a few percentage points of the total.
Stock prices - Stock prices, as measured by Standard and Poor's
index of 500 common stocks, declined last week, closing at 56.56 on
October 23. Trading activity increased, averaging 2.8 million shares
a day.




Institutional investors - In August, savings inflow at life
insurance companies and savings and loan associations continued to
increase more rapidly than a year earlier, with the former being U per
cent larger and the latter one-eighth larger. In contrast, the increase
in deposits at mutual savings banks was again smaller (two-fifths less).
Combined growth at these savings institutions—as measured by the increase in life insurance company assets, share.capital at savings and
loan associations and deposits at mutual savings banks—amounting to
$1:68 million, showed little change this August from that of a year
earlier. Growth for the first eight months this year, totaling $9.2
billion, was 5 per cent larger with life insurance company assets and
savings aind loan share capital each increasing one-eighth more and
mutual savings bank deposits increasing two-fifths less than a year ago.
The investment pattern of these savings institutions showed
little change in August from that of other recent months this year.
As in most months, funds invested in mortgages were substantially
larger than in the corresponding months of 1958. The increase in mortgage holdings by life insurance companies was one-fourth larger, for
savings and loan associations nearly one-third larger, but for mutual
savings banks one-fifth smaller. (Early in the year these savings
banks also increased their mortgage holdings more rapidly than a year
earlierj however since May the increases have been smaller.)
The increase in business security portfolios was small during
August. For the first time this year the increase in business security holdings of life insurance companies was sharply smaller (two-fifths
less) than in the similar month of 1958. In contrast, savings banks
have generally reduced their holdings thus far this year.
The increase in life "insurance company holdings of U. S.
Government securities was more than twice as large as a year earlier
with most of the increase occurring in Treasury bills, while the
increase in those held by savings and loan associations was four-fifths
smaller. Holdings of Governments by mutual savings banks declined
further in August; they had risen slightly in August 1958.
More detailed information concerning recent capital market
developments is presented in the attached exhibits.

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




HIGH-GRADE

BOND

YIELDS

-x_/J 2.0
LOWER-GRADE

BOND

YIELDS




Exhibit b

H.Ik

Tables for Exhibit A
High-grade Hond Yields

Date

U. S. Govt,
long-term 2/

Corporate
Aaa 1/

Spread between
U. S. Govt, and
Corporate State and
Aaa
local Aaa

State and
local govt.
Aaa J/

(Per cent)
1954 - Low
1957 - High
1958 - High
Low
1959 - High
Low
Sept. 25
Oct. 2
Oct. 9
Oct. 16
Oct. 23 £/

2.85
4.14
4.13
3.55
4.57
4.09

(4/23)
(9/27)
(10/10)
(5/2)
(10/9)
(1/9)

2.45
3.76
3.84
3.07
4.30
3.83

(0/6)
(10/18)
(12/26)
(4/25)
(9/18)
(1/2)

4.27
4.21
4.14
4.13
4.06

4.54
4.57
4.57
4.56
4.56

1.90
3.45
3.31
2.64
3.65
3.06

(9/2)
(8/29)
(9/11)
(5/1)
(9/24)
(3/26)

3.65
3.64
3.61
3.58
3.53

.30
.60
.51
.22
.50
.16

.30
.47
.72
.34
.92
.53

.27
.36
.43
.43
.50

.62
.57
.53
.55
.53

Lower-grade Bond Yields

Date

Corporate
Baa 1/

State and
local govt.
Baa]/

Spread between
Aaa and Baa
State and
Corporate
local govt.

(Per cent)
1954 - Low
1957 - High
1958 - High
Low
1959 - High
Low

3.44
5.10
4.96
4.51
5.29
4.83

Sept. 25
Oct. 2
Oct. 9
Oct. 16
Oct. 23 2/

5.22
5.26
5.28
5.29
5.28

(12/31)
(11/29)
(1/3)
(7/11)
(10/16)
(4/17)

2.93(8/5)
4.51 (8/29)
4.34 (9/11)
3.64 (5/1)
4.46 (7/2)
3.92 (3/26)
4.41
4.44
4.41
4.40
4.34

.52
1.27
1.28
.77
.77
.56

.96
1.21
1.11

.68
.69
.71
.73
.72

.79
.80
.80
.82
.81

.79

•qJ Preliminary.
1/ Weekly average of daily figures. Average term of bonds included is 25-26 years.
2/ Weekly average of daily figures. The series includes bonds due or callable in
10 years or more.
j|/ Thursday figures. Only general obligation bondc are includedj average term
is 20 years.
Note.—highs and lows are for individual series and may be on different dates for
different
series.




EXHIBIT C
STOCK

MARKET

1956

"57

MORTGAGE RECORDINGS AND LOANS




1958

1959

Exhibit

D

- T a b l e s f o r todiibi'L C
Stock Market
Trading

Common
Stock

Date

price

volume

i n d e x 1/

yields 2/
(per cent)

Stock market

customer credit

y

Customers'

(millions

debit bal-

stock

of

shares)

ances 4/
(Millions of

1953-1958

5k.ll

- High

to

dollars)

3.30

4.9

4,1*92

3,285

22.95

6.25

0.9

1,31k

669

60.51

3.08

4,764

3,1)01

Low

k.3

2,055

- High

54. 37

3.3k

2.1

4,443

3,250

1,332
1,210

Low
1959

Bank
loans

"others" 5 /

1,317
1,373
1,180

August

59.10

3.13

2.4

4,528

3,269

1,259

September

57.05

3.26

2.7

4,443

3,250

1,193

Oct.

2

57.20

3.21+

2.7

1,193

Oct.

9

57.00

3.25

2.4

n.a.

Oct.

16

57.33

3.22

2.3

n.a.

n.a.

1,180

Oct.

23 e /

56.56

3.28

2.8

n.a.

n.a.

n.a.

1,195

n.a,--Not available.
g/ Preliminary.
1/ Standard and Poor's Tmposite index of 500.common stocks, weekly closing prices, 1941-43=10. Monthly date,
are averages 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 dates on which price index reached its high or low.
3/ Averages of daily trading volume on the New York Stock Exoluvnge.
4/ 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 • prior to July 1, 1959, such-loans are excluded only at banks in New York and Chicago.
Weekly reporting hanks account for about 70 per cent of loans to others. For further detail see Bulletin.
N o n f a r m M o r t g a g e R e c o r d i n g s a n d L o a n s 1/
Unadjusted

Total
Bate

^Seasonally
adjusted

- Aug.

2,413

Sept.
Oct.

2,488
2,567

Nov.

2,652

Dec.

2,629

2/

Unadjusted

2,535

2,#6

FHA

371
1,80

2,857 :

501

2,62?

2,432

457
5io

-VA

Conv.

156

2,007

189

1,927
2,116

239
216
257

1,759
1,861
1,491

2,631

2,353
2,215

585
5o6

276

Feb.

238

1,500

Mar.

2,683

2,586

530

261

1,796

Apr.

2,683

2,776

490

231

2,055

May

2,757
2,780

2,768

478

212

2,079

2,97k

221

2,233

3,100

521
524

227

2,871

504

202

2,349
2,165

2,677

July

2,787

- Aug.

n.a.—Not available.
1/ Total recordings data are estimates based on reports from about 450 areas and include
mortgages of $20,000 or less secured by^nonfarm real estate, primarily residential properties.
FHA-insured loans represent gross amount of insurance written, and VA-guaranteed loans the gross amount
of loans closed,on 1-4 family houses. Conventional data are derived as a residual, although total
recordings and VA and FHA loans uro not strictly comparable in concept or timing,
2f Three-month moving average, seasonally adjusted by Federal Reserve.
Source:

Federal Home Loan Bank Board, Federal Housing Administration and Veterans Administration.




1

Exhibit E

H.Xlt

Long-term Corporate and State and Local Government
Security Offerings and Placements
(In millions of dollars)
New capital
1959

Corporate 1/
f
1958
1

January
Februaxy
March

81+0
7k5
631

1,553^

April
May
June

899
791
87k

lylltO
#7
887

July
August
September
October
November
December
1st
2nd
3rd
kth

quarter
quarter
quarter
quarter

1st half
Three quarters
Year

S
e/800

728

5°o

2,216
. 2,56k
e/1,888

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

. >,780
e/6,668

5,762
8,522
10,823

1959

1,060
1,065
1,320

636
856
61*5

765
1,1*53

931
: 592
981

1,003
924
973

1#

l,llk
862
518
920

1957

.

1,090
789
1,476
3,kk5
3,1149
2,899
2,951.
6,59k
9,k?3
12,W

State and local 2/
1
195b
1
1957

.m
812

71*2
572
506

798
895
551

765
51*6
393

566
•. 516
g/k88

806
1*03
651

529
581*
1*31

e/600

1*56
k7k
1*35

698
633
698

2,138
2,50k
a/1,571

2,276
2,2l|l*
1,860
1,365

1,820

1*,520

3,52k
5,069
7,099

/

2/6,213

%
2,029

Excluding finance companies k/
1st
2nd
3rd
kth

quarter
quarter
quarter
quarter

2,011
. 2,109
e/1,588

Year

2,899
2,586
2,731
2,213
10,129

3,237
2,889
2,582 •
2,610
11,518

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




Exhibit F

H.Ik

Other Security Offerings 1/
(In millions of dollars)
Long-tern
Foreign government 2/
Federal agency 3J~
1959
I
1958
"1959
I
1950
I
19W
1957
81*
1*9
30

199
175

--

139
198
120

123
1*8
1+2

__

523

9
5
17

28
7
30

January
February
March

77
59
2

196
.53

April
May
June

56
50
1*2
73
1

July
August
September

—

.

—

1,163
251

72
—

125
60

—

16k
98

215

—

October
November
December

58
123
7k

h
60
1

220

Year

992

507

2,321

100
—

State and local government b/

—

572

Federal agency 3/

January
February
March

190
1*28
295

233
1*60
273

326
1*55
11*7

359
500
1*89

371
208
11*1*

638
1*30
505

April
May

563
1*11
216

357
351*
261*

205
337
153

1*86
675
289

209
161
329

336
1*69
501

21*6
1*67
2/325

289
1*23
369

272
272
252

1*37
206
330

221*
370
512

231
1*15
21*3

&

1*51*
111*
137

1,238
255
116

July
August
September
October
November
December
Year

3,910

303

3,271*

727
365
665

3,098

5,543

p/ Preliminary.
y Data presented in this exhibit differ from those in Exhibit E in that refunding issues, as well as new capital issues, are included. Long-term securities are defined as those maturing in more than one year.
2 j Includes securities offered in the United States by foreign governments and
their subdivisions and by international organizations. Source: Securities and Exchange Commission.
2/ Issues not guaranteed by the U. S. Government. Source: long-term, Securities
and Exchange Commission5 short-term, Federal Reserve.
h/ Principally tax and bond anticipation notes, warrants or certificates and Public

Housing
Authority notes. In some instances PMA notes included may have a somewhat
longer tern than one year. Source: Bond, Buyer.
http://fraser.stlouisfed.org/

Federal Reserve Bank of St. Louis

Exhibit G

H.l4

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

Corporate

Month

1958 - September
October
November
December
1959 - January
February
March
April
May
June
July
August
September

State and
local government

Other 2/

288
172
259
229
335
551
369
563
258
635
194
263
214

825
259
227
305
369
340
215
359
3)42
284
110
363
199

18
209
100
79
174
35
176
20
50
60
50
98
175

Large Individual Issues Offered October 1 through 23"

Issuer

CORPORATE
Boston Edison Co.
So. New England Tel. Co.
Columbia Gas System, Inc.
Northern Natural Gas Co.
Boston Edison Co.
Philadelphia Elec. Co.
American Elec. Pwr. Co.
So. Bell Tel. & Tel. Co.
Texas Gas Transm. Corp.

typo 3/ .

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

1st mtg. bds. 15.0
Corn. stk.
16.6
Deb.
25.0
Pfd. stk.
20.0
Com. stk.
15. 4
lstref .mtg.bds, 50.0
Com. stk.
55.5
Deb.
70.0
Pfd. stk.
15.0

Rating

Aaa

1989

5 1/4

5.17

198k

5 3/8

5.38 :

A

1989

5

1.93

Aaa

1994

5 1/2

5.35

Aaa

STATE AND LOCAL GOVERNMENT
Itev.-Ut,
G.O.
G.O.
G.O.
G.O.
G.O.

Port of New York Auth.
Wayne Co., Mich.
Denver, Colorado
New York, New York
State of New Hampshire
Public Housing Authorities
OTHER
Montreal, Canada

Ext.S.F.deb.




25.0
26.0

17.0

18.0

16.0

102.1
20.0

1989
it. 37
1962-68/65 4.08
1970-98
1960-74
1960-88
3.22
1960-2000 3.86
1979

5 5/8

4.31
A
3.50-4.00, A
3.25-3.75H/&a
3.00-3.70
A
Aaa
2.60-3.35
Aaa
2.75-3.93
5.63

G-2
Footnotes

1/
Includes corporate and other security offerings of $15 million and over;
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. 0. 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 b> lease payments,.
ij/ Is of 1993 not reoffared.




Exhibit H

H.1U

Forthcoming Large Long-term Public Security Offerings for New Capital
(Other than U. S. Treasury) 3/
Expected Proceeds from Forthcoming Large Issues
Subsequent to
During month following
date shown
date shown
State
and
State and
Corporate
Other 2/ Corporate
Other 2/
local govt.
local -govt.

Date of
computation

- Sept. 30
Oct. 31
Nov. 28
Dec. 31
— Jan. 30
Feb. 27
Mar. 31
Apr. 30
May 29
June 30
July 31
Aug. 31
Sept. 30

•

113
20lt
301
210
270
198
396
2U6
287
165
238
198
37k

.
.

295
258
229
261
551
#2
55o
251
2h7
1U6
356
#5
270

216
326
ltOl
370
365
279
1*76
3h6
332
272
305
517
69k

71
75
hS
20
50
50
25
—

52k
675
683
515
856
1x81
761
517
761
500
1*06
I4O2
U70

71
75
h$
20
50
50
25

Forthcoming Large Offerings, as of October 23

Type

Amount
Approximate date
(millions
of offering
of dollars)

CORPORATE
Hilton Hotels Corp.
Florida Power & Light Co.
Puget Sound Power & Light Co.
Northern Natural Gas Co.
Central & South West Corp.
American Telephone & Telegraph Co.
*Transwestern Pipeline Co.
Gulf States Utilities Co.
-a-New York Electric & Gas Co.

Sub. S . K deb.
1st mtg. bds.
1st mtg. bds.
S.F. deb.
Com. stk.
Ueb.
Sub. deb. & stk.
1st mtg. bds.
Com. stk.

30.0
20.0
20.0
25.0
13.0
250.0

r #Public Service Electric & Gas Co.
Commerce Oil Refining Corp.
Sylvania Electric Products, Inc.
American Educational Life Ins. Co.

Com. stk.
Deb., Dds. & com.
S.F. deb.
Com. stk.

25.0
1*5.0

liO.p

16.0
15.0

25.0
23.8

Oct. 27
Oct. 26
Oct. 29
Oct. 29
Oct. 30
Nov. 17
Nov. 16
Nov. 25
Dec. 7
(rights expire)
Dec.
Indefinite
Indefinite
Indefinite

STATE AND LOCAL GOVERNMENT
Consumers Public Power List., Neb.
Los Angeles Flood Control Dist.,Cal.
Baltimore Co., Md.
Pennsylvania General State Auth.




Rev.-Ut.
G.O.
G.O.
Rev.-Rent.

23.3

21.2
20.0
25.0

Oct.
Oct.
Oct.
Oct.

27
27
28
28

H.llj.

H-2
Forthcoming Large Offerings, as of October 23 (Cont'd)

Issuer

Type

Amount
Approximate date
(millions
of offering
of dollars)

STATE AND LOCAL GOVERNMENT (Cont'd)
State of Mississippi
•H-State of New York
-^Philadelphia, Pa.
xLos Angeles Sch. Dist.9 California
Columbus, Ohio
Chesapeake Bay Feriy Commission

G.O.
G.O.
G.O.
G.O.
G.O.
Rev.-Ut.

lli.O
,56.0
2k.8
21.5
10.0
190.0

Nov. 10
Nov. 18
Nov. 19
Dec. 1
Dec. 1
Indefinite

OTHER
None
Included in table for first time.
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 for Reconstruction
and Development issues and non-guaranteed issues by Federal agencies.
Note. —Deletions for reasons other than sale of issue: None.




Exhibit I

H.l4

Yields on New and Outstanding
Electric Power Bonds, Rated Aa and A 1/
A-rated offering yields
Aa-rated offering yields
Amount above
Amount above
Actual
Actual
seasoned yields
(per cent)
(per cent) seasoned yields
(basis points)
(basis points)

Date

1952 - 1958
High
Low

5.00 (9/14/57)
2.93 (3/31/51)

1959 - Jan. 7

20

28
Feb. 18
Mar. 11

u

4.60

B

87
-3

4.6o
4.55$/

22
21
7

1.95
1.95

38
34

5.oo

38
29

26

July 9

10

15
30
Aug. 5
20
Sept. 18
Oct. 23

4.67

18

4.85

5,06

17
13

5.13

27

4.92^
5.10
5.10

24
19

4

15

1.95

23

11
9
9
13

29
May 1
13
11
20
21
26
June 4
17

k.lgJ
34

31

16

123
-15

ho

4.43
4.43
4.47

Apr,

5.50 (11/7/57)
3.00 (3/17/510

L93

31

4.85
4.80

24

22

4.95^

16

6

5.10

19
13

5.65

60

5.oo

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.
Other issues have no such provision.
2 / Provides for a 7-year period during'which issue may not be called for
refunding at a lower coupon
rate.
^




Exhibit J

•KrlU

Sources and Uses of Bunds by
Life Insurance Companies
(In millions of dollars)

Cash

U. S.
Govt.
ities

1957 - July
Aug.
\ Sept.
Oct.
Nov.
Dec.

-9
-30
hi
-17
22
138

Value of Assets
at End of Year

1,29k

- Jan.
Feb.
Mar.
Apr.
May
June
July
Aug. •
Sept.
Oct.
Nov.
Dec.
of Assets
id of Year
- Jan.
Feb.
Mar.
Apr.
May
June
July
Aug.
Sept.

-93
-51
20
-17
7k
-20
20
-17
-19
52
123

Uses of Funds 1/
Busi-^ State and
ness
local govt. Mortsecurgages
ities
ities
Ik
11
7
13
10
10

Total
sources

Other

163
195
151
170
132
237

87
77
93
6
110
7

2 , 37 7

35 , 271

13,206

221
106
277
208
135
19k
182
128
201
303
133
39%

51
10
23
13
28
35
" 2k
36
19
25
31
13

191
125
lltO
113
116
10k
123
110
139
186
11*6
303

5
-32
-32
13
-92
-181

324
163
198
2hU
212
258

7,026

142,13 3

171
15
-119
11
-70
k7
. 175
k2
7
12
25
-139

111
lilt
60
19
167
lltO
16
117
7lt
53
100
1#

58U
381
167
k29
39k
k&9

652
3lt9
. 101
3l7
U50
500
570
lt76
lt39
560
187
879

1,365

7,205

la,615

2,685

37,097

lit,1*52

107,119

°3

280
-71
-185
22
-16
11
13
95

185
223
251
2k2
193
2k2
21k
75

59
30
66
k9
79
23
9k
30

111
1#
136
116
135
157
1/211,

171
- 1 7 It
108
80
97
60
1/208
101

726
lt38
362
185
198
—1*96
728
it9lt

^

57
-lit
-2k
10
3
-15
19

Ilk

1/ Uses of funds represent net changes in assets and therefore reflect net,
rather than gross, uses.
Source: Institute of Life Insurance.




Exhibit K

H.Ui

Sources and Uses of Funds by
Savings and Loan Associations
(In millions of dollars)

Cash

1957 - July
Aug.
Sept.
Oct.
Nov.
Dec.
Value of Assets
at End of Year

19582/ - Jan.
Feb.
Mar.
Apr.
May
July
Aug.
Sept.
Oct.
Nov.
Bee.
Value of Assets
at End of Year

1 9 5 9 ^ Jan.
Feb.
Mar.
Apr.
May
June
July
Aug.
Sept.

Uses of Funds 1/
U. S.
MortGovt.
gages
2/
ities

-320
-103
11
-18
86
431
2,1246

1*07
460
357
416
278
253

-94
59
56
87
60
-5

3>173 40,01*9

19 It
247
335
398
528
582
533
557
57 4
605
465
532

a

2k

26
-5
23
-65

-119
173
209
116
38
177
-297
-70
-78
-108
44
338
2,569

Other
assets

.44
-19
-1
38
13
81
40
111
147
107
50
37

614

-37
37
47
16
10
125

123
151
79
103
59
-434

2,770

48,138

41,912

1,379

4,847

12
.8
10
102
100
-37
-80
9
1*2
. 131
102
-41*

131
409
553
654
679
803
1#
607
685
735
661
863

-377
-127
-89
113
-32
169
-39
'55
85
58
41
215

58
163
158
185
203
-303
173
199
160
176
143
-425

3,125

410
427
593
704
750
840
779
728

-53
80
92
153
181
6

296
97
79
106
23
-5
105
21

3k
khO

Sources of Funds
Net
change
BorrowOther
savings
ing j /
capital
-52
252
324
361
378
923

3,821 45,599

-300
-26
1
-183
28
249
-444
-lib

Total
sources
or uses

-92
17

1*50
480

%

55,114

353
578
765
780
982
1,090
348 .
722

450
373
484,
356
508
937
62
353
440
501
477
1,073
47,926

434
408
529
420
604
1,090
190 V
394

1,451

-181
-57
-5.
98
63
313
31
118

5,737

100
227
241
262
315
-313
127
210

g/ Preliminary.
\J 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/ 1957 data adjusted to include mortgage pledged shares as currently reported,
V Advances from Home Loan Banks and other borrowing.
Federal Savings and Loan Insurance Corporation.
Digitized forSource:
FRASER



Exhibit L

H.Ik

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

Cash

U. S.
Govt.
ities

1957 - July
Aug.
Sept.
Oct.
Nov.
Dec.

-73
-1*2
27
-2k
6
125

Value of Assets
at End of Year

890

1958 - Jan.
Feb.
Mar.
Apr.
. May
June
July
Aug.
Sept.
.
Oct.
Nov.
Dec.

-60
63
36
-17
-5

Value of Assets
at End of Year
1959 - J a n . ^
Feb.
Mar.
Apr.
May
July
Aug.
Sept.

h2

-7
11
-17
-136
-136
-26
w1
7,552

-21
-85
-62
-36

-66
11
19
-5
18 v, -27
-8 * -92
-38
-32
101
-2

Uses of Funds 1/
State and
Busilocal
Mortgovt.
Other
gages
securitiesi/
ities
62
61
55
60
-93
75
k,331

Sources of Funds
Total
sources
or uses

7
-3
2
-3
7
-7

122
111
103
12k
100
111

-29
28
18
-1*1
38
-9

82
166
188
-20
108
299

16
90
206
3k
36
U05

66
76
-18
-5k
72
-106

682

20,951

761

35,166

31,695

3,k73

130

25
20
9

278

23k
ll;9
336
93

160
86
86

23
k

97

t

6

?8
$

k7

8
2
2
-3
-1
-7

165
15U
195
253
193
198
181
195
151
17k

5
-28
29
29
-1*6
k3
-3

26k
152
251
237
1*0
123
309

120
-2li
3k
8
3h
-6

k

"to

921

7,266

1,973

725

23,039

855

37,779

-96
18
kS
-ill
8
k3
-79
3

119
39
62
-lilt
13
-85
-13
-12

-16
6
-31
58
-20

17
-k
la
-33
10
19
k
-1

208
125
175
155
161
11*5
179
156

-58
32
38
-32
1*5
39
-12
33

175
216
330
-10
217
161
32
192

-1*7
13

Net.
change
in
deposits

181

a

102
7
1

88

t

300
88
1U3
267
95

108

1*18

-109

U2

3k,ola

122
113
313
6
120
202
-51A
80

-30
-55

81

3,738

53
103
17
-16
97
-111
86
112

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, non-guaranteed Federal agency and other bonds as well
as corporate bonds and stocks.
y Adjusted to eliminate the effect of a consolidation of a large savings bank with
a commercial bank.
Digitized forSource.—Nat.
FRASER Assoc. of Mutual Savings Banks and Federal Deposit Insurance Corp.



October 26, 1959
Appendix 1
MONEY AND CAPITAL MARKET DEVELOPMENTS IN CANADA
Yields on the Canadian money market and of Canadian bonds
continued to decline last weeko The rate on the 91-day Treasury bill
(at mid-September peak of *>#88 per cent) slid below $ per cent for the
first time since the end of June. Other money market rates also fell
fairly sharply. Several new provincial flotations met with a very good reception and prompted speculation that additional large secondary
government issues would soon be attempted*
Money market rates - Last Thursday's auction rate on 91-day
bills fell for the fifth straight week to reach lj..93 per cent compared
with 5*01 per cent the week before = The rate on 182-day bills also
fell further, declining to 5>*36 per cent compared with £*5>1 per cent a
week earlier. Last week8 s average closing rate on day-to-day loans
fell very sharply to U»05 per cent compared to 1**63 per cent in the
week ending October lU*
Bond market developments - In addition to the $20 million City
of Montreal issue sold in New York, two large provincial issues were
floated in Canada last weeks a $£0 million Ontario issue split into
10 and 20 year maturities yielding 6 o 00 and 6*07 per cent, and a
million Newfoundland, issue, placed privately and yielding 6*75 per cent.
The Ontario issue was well received and sold at premiums of one-half
to three-quarters of a point immediately after subscriptions were
closed. The success of these flotations has created expectations of
additional large provincial and municipal issues in the near future*
Yields on medium- and long-term government bonds eased slightly
further for the third consecutive week* At midweek, spreads between
comparable Canadian and United States Government securities1 yields weret
0*83
0*87
0*85
1*19
1*09

per
per
per
per
per

cent
cent
cent
cent
cent

on
on
on
on
on

91-day bills
182-day bill*
a 9-year bond
a 20-year bond
a 36-year bond

Stock prices - Canadian stock prices, after drifting to
lower levels early last week, made a modest recovery Thursday and
Friday. At Friday's close, the industrial average on the Montreal
exchange was 12 per cent below the year's high in July and one-third
of one per cent above the close the week before* This was the fifth
straight week during which the industrial average has remained almost
unchanged*




Appendix 1-2
Selected Government of Canada Security Yields

Date

3-month
Treasury
billa*/

Intermediate
Govt,
bondj-/

Longterm
Z h /

Spread between
Canadian & U.JS. rates
long-term
3-mo*
bonds/
billsz/

195U-55 - Low
1957 - High
1958 - High
Low
1959 - High
Low

0.78
lt.08
3.65
0.87
6.16
3.25

2.81
U.81
Uc52
3.31
5.30
U.U5

3.13
U.35
• ZU2
3.78
5.30
U.U1

1.06
0.U7

2.96
0.30

Sept. 30
Oct. 7
lit
21

5.50
5.25
5.oi
U.93

5.30
5.27
5.21
5.16

5.30
5.28
5.18
5.16

1.17
1.18
1.11
1.19

1.5U
1.2U
Qo75
0.83

, Discount
on 3-mo.
Canadian
dollars/

1.66
2.19
1.66
1.66

1/ Average yield at weekly tender on Thursday following Wednesday date shown.
y Government of Canada 2=3A per cent of June 1$, 1967-68»
5/ Government of Canada 3 - l A per cent of 1979»
5/ UoSo Government 3-l/U per cent of 1978-83• Government of Canada 3-l/U per
cent of 1979.
£/ Spread between average auction ratesx on Monday preceding Wednesday date
shown for the United States) on Thursday following Wednesday date shown for
Canada*
6/ Spread between 3-months forward and spot price of the Canadian dollar,
expressed as per cent per annum, on Friday following Wednesday date shown*
Distribution of Government of Canada Marketable Debt
(millions of Canadian dollars, par value)

Date

Bank of
Canada

Govt.
accounts

Chartered
banks

General
public

Total

1957 - Sept. 30
Dec. 31

2,L12
2,463

1,381
1,367

2,623
2,6kl

6,133
6,045

12,549
12,516

1958 - Mar. 31
June 30
Sept. 30
Dec. 31

2,438
2,571
2,747
2,670

1,287
1,129
1,221
1,258

2,855
3,333
3,892
3,520

6,134
5,999
5,563
6,073

12,714
13,032
13,423
13,5a

1959 - Mar. 31
June 30
Sept. 30
Oct. 21

2,601
2,677
2,726
2,685

9hh

3,519
3,174
2,834
2,740

6,642
7,166
7,466
7,647

13,706
14,024
14,015
14,016

Source:

1,007
989

9bk

Bank ot Canada Statistical Summary<>
Not available«




Average term
of general
public
holdings
Years
Mos.

10
7
8

lb
13

11
10
U

12
11

H

(n.a.)