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Mot f o r P u b l i c a t i o n

DECONTROLLED AFTER SIX M N H
OTS

lit

September 15, 1955
CAPITAL MARKET DEVELOPMENTS

Three l a r g e S t a t e and l o c a l government i s s u e s with p r o - .
ceeds of ij.1 million d o l l a r s were o f f e r e d f o r new c a p i t a l during the
week ending September 9 . No l a r g e corporate o f f e r i n g s w e r e - f l o a t e d ,
but 181 m i l l i o n d o l l a r s of such i s s u e s a r e expected t h i s week i n cluding 100 m i l l i o n d o l l a r s of debentures from GIT F i n a n c i a l . About
2 1 . m i l l i o n d o l l a r s of l a r g e S t a t e and l o c a l government i s s u e s a r e
a l s o scheduled.
T
Bond y i e l d s - Outstanding corporate Aaa bond y i e l d s i n creased one b a s i s p o i n t during the week ending September 9 . Yields
- on U. S. Government o b l i g a t i o n s decreased t h r e e b a s i s p o i n t s , and
S t a t e and l o c a l government Aaa bond y i e l d s remained steady.
For lower-grade bonds, corporate Baa y i e l d s r o s e one b a s i s
p o i n t ; S t a t e and l o c a l government Baa bond y i e l d s increased two b a s i s
p o i n t s ; and y i e l d s on S t a t e and l o c a l government revenue bonds.decreased two b a s i s p o i n t s .
Corporate Aaa y i e l d s decreased s l i g h t l y on Monday but r e mained steady on Tuesday of t h i s week. Treasury bond y i e l d s r o s e
on Tuesday.
Stock p r i c e s - As measured by the SEC index of 265 common
s t o c k s , p r i c e s r o s e l a s t week t o 262.3, a new h i g h . S u b s t a n t i a l
p r i c e r i s e s occurred on Tuesday*and \ednesday of t h i s week according t o d a i l y i n d e x e s .
Stock market c r e d i t - Customers' d e b i t balances, excludi n g c r e d i t extended on U. S . Government o b l i g a t i o n s , of member firms
of the New York Stock Exchange, t o t a l e d 2,710 m i l l i o n d o l l a r s a t
the end of August, a d e c l i n e of 2k m i l l i o n from t h e preceding month.
Total customer c r e d i t , excluding Governments, d e c l i n e d h6 m i l l i o n
d o l l a r s . The following t a b u l a t i o n shows data on stock market c r e d i t
f o r July and August.




-2-

Eiid. of month
J u l y . |August

Change

(Millions of d o l l a r s )
Customer c r e d i t
Excluding U. S. Govt, s e c u r i t i e s - T o t a l
Net debit balances
Bank loans to others
Net d e b i t balances secured by U. S. Govt, s e c u r i t i e s
Bank loans t o others f o r purchasing or carrying
U. S. Govt, s e c u r i t i e s
Broker and dealer c r e d i t
Money borrowed except on U. S. Govt, s e c u r i t i e s
Money borrowed on U." S . Govt, s e c u r i t i e s
Customers' n e t f r e e c r e d i t balances

It#

-1|6

1,177
b$

m
1,1#
>3

29

,29

2,003

1,99k
71
887

•918
!

-22
-2
—

-9
-6
-31

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 in the Second Quarter and
F i r s t Half of 19$h and 19$$
S t a t e and l o c a l governments i s s u e d 1,1*29 and 2,838 m i l l i o n d o l l a r s of long-term s e c u r i t y o f f e r i n g s in the second q u a r t e r
and f i r s t half of 19$$ r e s p e c t i v e l y , as shown in t h e a t t a c h e d t a b l e .
The q u a r t e r l y volume was 1+0 per cent and the half year t o t a l 2h per
cent l e s s than the corresponding amounts i n 19$h* These declines i n
new i s s u e volume were l a r g e l y due t o the f a c t t h a t no very l a r g e
t o l l highway bond i s s u e s were sold during the second quarter t h i s
y e a r , whereas four i s s u e s with aggregate par value of 872 m i l l i o n
d o l l a r s were sold during t h i s p e r i o d l a s t y e a r .
Issuing a u t h o r i t y
M u n i c i p a l i t i e s sold the l a r g e s t volume of bonds during,
the second q u a r t e r of t h i s y e a r , accounting f o r o n e - f o u r t h of a l l
i s s u e s , b u t s e v e r a l other types of i s s u i n g a u t h o r i t i e s were almost
as important. During the second q u a r t e r l a s t y e a r , in c o n t r a s t ,
S t a t e s and s p e c i a l a u t h o r i t i e s were t h e l a r g e s t i s s u e r s , accounting together f o r more than t h r e e - f i f t h s of t h e t o t a l . This i s
l a r g e l y a t t r i b u t a b l e t o the lack of l a r g e t o l l highway i s s u e s
t h i s y e a r , a s noted above, since t h i s type of i s s u e i s u s u a l l y
sold by a S t a t e or a s p e c i a l a u t h o r i t y e s t a b l i s h e d f o r t h a t p u r p o s e . Except f o r c o u n t i e s and townships, a l l types of issuing
a u t h o r i t i e s sold fewer bonds during t h e second q u a r t e r t h i s year
than l a s t , t h e d e c l i n e being l a r g e s t f o r S t a t e s and s p e c i a l a u t h o r i t i e s . H a l f - y e a r data show a , s i m i l a r p a t t e r n .




H.lU

-3Long-Term S e c u r i t y I s s u e s of S t a t e and Local Governments
Second Quarter and F i r s t Half of 1954 and 1955
( i n m i l l i o n s of d o l l a r s ) Second q u a r t e r
1955

F i r s t half

1 1954

1955

1 1954

254
134.
363
241
312
125

668
118
466
247
745
129

598
243
696
535
479
287

885
244
878
479
1,003
268

1,1*29

2,372

2,838

3,756

l,4l8

2,334

hM

3^706

365
226
140
28
192
37
lit
. 59
20
3
210
125

502
1,068
133
43
162
57
8
22
25
1
186
127

814
401
315
58
350
114
' 27
59
102
3
275
284

11

39

35

.50

1,429

2,372

2,838

3,756

945
457
27

1,238
1,125
9

2,067
744
27

2,266
1,481
9

Total
1,1*29
2,372
1 / Issues of l e s s than $#00,000 not f u r t h e r c l a s s i f i e d .

2,838

3,7#

Issuing authority:
State
County and township
Municipality
z School d i s t r i c t
Special autliority
Unidentified 1/
^

Total

Purpose of i s s u e :
New c a p i t a l t o t a l '
Schools
Highways, b r i d g e s , t u n n e l s
. Residential buildings
Hospitals and i n s t i t u t i o n s
Sewer and water
Misc. public s e r v i c e e n t e r p r i s e s
Recreation
Port and a i r p o r t
Veterans aid
I n d u s t r i a l building
Other
Unidentified 1/
Refunding
Total
Type of i s s u e : .
General cb l i g a t i o n
Revenue
General revenue

-

Note.—Details may n o t add t o t o t a l s because of rounding.
Sources.--Bond Buyer and Federal Reserve.




908
1,213
315
58
347
126
18
47
92
1
319
263

H.Ik

-h-

Purpose of i s s u e
Offerings f o r new c a p i t a l amounted t o 1,1*18 million d o l l a r s in the second q u a r t e r compared to t h e unusually l a r g e second
period l a s t year when 2,33k m i l l i o n was s o l d . The r e f u n d i n g volume,
as u s u a l , was small in both p e r i o d s . More bonds were s o l d f o r school
c o n s t r u c t i o n t h a n f o r any other purpose during the second q u a r t e r .
Such i s s u e s t o t a l e d 36£ m i l l i o n d o l l a r s , but t h e volume was s t i l l
one-fourth smaller t h a n during t h e same period l a s t y e a r . Highway
and bridge bonds, v:hich accounted f o r the l a r g e s t volume l a s t y e a r ,
aggregated only 226 m i l l i o n d o l l a r s t h i s y e a r , only o n e - f i f t h l a s t
y e a r ' s t o t a l which was augmented by l a r g e t o l l highway i s s u e s . Bonds
f o r other purposes were i s s u e d in about t h e same volume i n the' second
quarter t h i s year as l a s t o
O f f e r i n g s f o r new c a p i t a l purposes t o t a l e d 2,803 m i l l i o n
d o l l a r s i n the f i r s t s i x months of t h i s y e a r , or about 900 m i l l i o n
l e s s t h a n i n the year b e f o r e . L'ost of the decline was in highway
f i n a n c i n g , but bonds i s s u e d f o r most other purposes e i t h e r declined
in volume or increased only moderately. As i n t h e second q u a r t e r ,
funds f o r school f i n a n c i n g accounted f o r more than one-fourth of
total offerings.
'
Type of i s s u e
The volume of both general o b l i g a t i o n and revenue bond
i s s u e s was smaller during the second q u a r t e r t h i s year than l a s t .
The d e c l i n e was much greater f o r revenue bonds however—about 60
per cent l a r g e l y because of the lack of l a r g e t o l l highway i s s u e s
t h i s year—so t h a t such bonds accounted f o r only crie-third of the
t o t a l t h i s y e a r , compared t o n e a r l y one-half l a s t y e a r . The v o l ume of general revenue bonds was small i n both p e r i o d s .
The proportion of revenue bonds t o the t o t a l declined i n
a s i m i l a r manner i n the f i r s t half of 19$h compared t o t h e c o r r e sponding p e r i o d of 19$$. The volume of revenue i s s u e s was 1,1*81
m i l l i o n d o l l a r s in the f i r s t s i x months l a s t year or 39 per cent
of the t o t a l . This year such o f f e r i n g s represented l i t t l e more
than one-fourth the t o t a l . Almost a l l other f i n a n c i n g was i n the
form of general o b l i g a t i o n bends, t o t a l i n g 2,067 m i l l i o n d o l l a r s
i n 19$$ compared t o 2,266 m i l l i o n the year b e f o r e .
Llore 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 i n the a t t a c h e d e x h i b i t s .

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




EXHIBIT A

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

/J
1952

Date

1953

Corporate
Aaa 1/

1954

— U. S. Govt,
long-term 2 /

1.50

1955

S t a t e and l o c a l
g o v t . , Aaa 3 /

Spread between
U. S . Govt, and
Corporate S t a t e and
l o c a l Aaa

(Per cent)
1%2 - High
Low
1953 - High

1955 - High
Low

3.03
2.91
3.1*2
2.99
3.09
2.85
3.Hi
2.91

August 12
August 19
August 26
September 2 "
September 9

(lA)

3.10
3.12
3.12
3.13
3.Hi

19~$k - High

(2/15)
(6/19)
(1/9)
(1/8)
(k/23)
(9/9)
(1/7)

2.79
2.56
3.15
2.78
2.74
2.iiii

(12/27)
(5/17)
(6/6)
(12/26)
(1/9)
(8/7)

2.91(8/5)
2.62 (1/7)

2.89
2.89
2.91
2.91

2.88

2.00
1.65
2.73
1.98
2.21
1.90
2.3k
2.05
2.3*1
2.3k
2.3ii

2.3k
2.3k-

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

.37
.19
.38
.19
.li3
.32

.3k
.13

.21
.23
.21
.22

.26

1.02
.71

.8k

.30
.61
.29
.70

.5U
.55
.55

.57 •
.57
•5ii

1/ Weekly average of d a i l y f i g u r e s . A v e r a g e term of bonds included i s 25-26
years.
.
'
2 / Weekly average of d a i l y f i g u r e s j old s e r i e s . Average term t o f i r s t c a l l
of bonds included i s 13-ill y e a r s .
3 / Thursday f i g u r e s . Only general o b l i g a t i o n bonds are included; average
term i s 20 y e a r s .
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 on d i f f e r e n t d a t e s
for different series.
'




EXHIBIT B

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

Per cent p e r

\

STATE AND LOCAL GOVT. Boo

U"z V

1952

1953

Corporate ..
Baa 1/

Date

1954

1955

S t a t e and
l o c a l govt.
Baa 2 /

S t a t e and
l o c a l govt,
rev. 3/

(Per c e n t )
1952 - High

1955 - High
Low

3.63
3.1*8
3.89
3.50
3.74
3.kh
3.59
3.1*5

August 12
August 19
August 26
September 2
September 9

3.56
•3.57
3.58
3.58
3.59

1953 - High .
195U. - High

.

(1A)
(5/16)
(9/18)
(1/2)
(1/8)
(12/31)
(9/9)
(lM)

2 . 9 8 (10/23)
2 . W (1/17)
3.79 ( 6 / 2 5 )
2.96 (1/8)
3.32 ( 1 / 7 )
2.93 (8/5)
3.25(9/8)
3.02 ( 1 / 6 )
3.21
3.22
3.23
3.23
3.25

2.69
2.27
3.27
2.71
3.00
2.72
2.95
2.76

(12/19)
(4/25)
(6/26)
(1/2)
(1/1)
(8/13)
(9/2)
(1/7)

2.90
2.93
2.95
2.95
2.93
i
Average) term of bonds

i n c l u d e d i s 25-26 y e a r s .
2 / Thursday f i g u r e s . Only g e n e r a l o b l i g a t i o n bonds a r e
i n c l u d e d ; average terra i s 20 y e a r s .
3 / F r i d a y f i g u r e s . Average r a t i n g of bonds i n c l u d e d i s
.between Baa and Aj average term i s 20 y e a r s .

Note.—Highs and lows 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 on d i f f e r e n t d a t e s f o r d i f f e r e n t s e r i e s .




I

STOCK MARKET

1952

Stock price
index l /

1953

1954

Common
Trading
stock
volume 2 /
(millions yields 3/.
(per cent)
of shares)

1955

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

1952 •- High
Lew

1953 - High
Low

1954 - High
1955 - High
July
August
August 26
September 2
September 9

165.3
151.7
167.1
lWt.O
221.it
156.5
262.3
217.4

(12/26)
(10/21)
(1/2)
(9/18)
(12/31)
(1/6)
(9/9)
(lM)

257.3
254.5
257.4
260.6
262.3

2.0

0.9
2.5
0.9

5.77

.1:8

S

5*33
4.20
4.22
3.78

2.It '

3.78
3.91

1.5

1.8

2.0
2.0
2.0

1,986
1,804
2,445

1,332
1,241
1,665
1,314
2,388

3,911
3,537

2,734
2,517

3,911

2,734

if

1)653

656
552
780
664
1,048
746
1,177
1,018
1,177

til

1,155

n.a. Not available.
1 / SEC index of 265 common stocks, weekly closing prices, 1939-100; converted
to 1947-49=100 by Federal Reserve. The conversion factor i s 123.91.
2 / Averages of daily trading volume en the New York Stock Exchange.
3/ Moody's 200 common stocksj end of month figures.
%/ End of month figures for member firms of the New York Stock Exchange which
carry margin accountsj excludes balances secured by U. S. Government obligations.
5/ Wednesday figures for weekly reporting member banks. Excludes a l l loans
. for purchasing or carrying U . S . Governments for 1952j since 1953 only these loans
at banks in New York and Chicago are excluded. Weekly reporting banks account for
about 72 per cent of loans to others.
• Note.—Highs and lows are for individual series and may be an different dates
for different s e r i e s .




Exhibit D
Corporate and State and Local Government
Security Offerings and Placements
( i n millions of d o l l a r s )

1955
January
February
March
April
May
June
July
August.
September

Corporate
1954
1

Fe»7 c a p i t a l
1953

1955

S t a t e and local
1 1954
1

1953

546
436
1,261

547
J4.26
635

623
623
666

5#
312
539

396
411
565

903
697

.197
656
8U2

779
6#
1,123

427
350
641

734
748
853

531
e/750
1/625.

909
335
747

183
325
753

e/460
&235
e/350

279
261
649

£19
259
475

1,003
290
60k •

577
42? 1 /
1,438

594
423
877

453
408
774

1,608
1,995
1,991
1,896
7,490

1,912
1,385
1,418
2,578
1 , # 1 1/ e/1,045
2,444 #
8,495

1,372
2,334
1,188
1,894
6,789

1,176
1,412
1,253
1,636
5,477

October
November
December
| l s t quarter
2nd quarter
3rd quarter
4th quarter
Year

1

2,2h3
2,09k
e/l,905 -

39P
360
426
•

329
649
434

Excludin g finance companies 2 /
1st quarter
2nd quarter
3rd quarter
4th quarter
Year

1,791
1,912
e/1,455

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

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

.

e / Estimatedo
1/ Includes 602.5 million dollar AT&T debenture i s s u e ,
2 / Total new c a p i t a l issues excluding o f f e r i n g s of sales and personal finance
companies.
Note.—Details may not add t o t o t a l s due t o rounding.

#



H.ih

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

Month

Corporate

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

S t a t e and
local'government

Other 2 /

86
155
388
268
689
31a
107
337
238
152
409
278
72

75
36U
433
0
121
141
63
750
175
1*83
182
101
1*05

30
35
15

Large I n d i v i d u a l Issues Offered September 1 through 9
Issuer

Type 3 /

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

CORPORATE
None
STATE AND LOCAL GOVERNMENT
S t a t e of Delaware
Essex County, New Jersey
. Middlesex Co. Sewerage
A u t h o r i t y , N. J .
OTHER
None




G.O.
G.O.

7.0
8.8
25.0

1956-75
1956-76

2.12
2.20

1,15-2.20
Aa
1.50-2.25 . Aa

1962-95.

3.33

2.50-3.35

E-2
1 / Includes corporate and other s e c u r i t y o f f e r i n g s of 1 > m i l 5
l i o n d o l l a r s and over; 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 ings of 5' million 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 ,
3 / In the case 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.
denotes general obligation3 Rev., revenue bonds; G.R., general o b l i g a t i o n s a d d i t i o n a l l y secured by f a c i l i t i e s revenues; 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.




R.l/4

Exhibit F
Forthcoming Large Public S e c u r i t y O f f e r i n g s f o r ilev? C a p i t a l
(Other than U. S . Treasury) 1 /
• Expected Proceeds from Forthcoming Large Issues

Date of
computation.
192k - Aug. 31
Sept. 30
Oct. 29.
Nov. 30
Dec. 31
1922 - J a n . 31
Feb. 28
Mar. 31
Apr. 29
May 31 "
June 30
J u l y 29
Aug. 31

During month following
date shown
S t a t e and Other 2 /
Corporate
l o c a l govt.
33b
3b3
12
9b
18k
16
710
211
%22
160
67
1*07
222

300 .
383
1*36
661
2#
682 =
22U
208
116
339 .
3kk
100
18k

Subsequent t o
date shown
S t a t e and Other 2(
Corporate
l o c a l govt.

30

608
klb
132
2k6
216
. k22
1,392
922
lflkl
820
830
1,132
%0

1,876
2,128
1,927
2,682
2,ia
1,961
1,978
2,009
1,917
1,861
1,81*2
2,018
1,971

__
30
30
32

Forthcoming Large O f f e r i n g s , as of September 9
Type

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

CORPORATE
Utah Power and Li git
Tennessee Gas Transmission
Tennessee Gas. Transmission
GIT F i n a n c i a l
Ohio Power
Columbia Gas Public Service E l e c t r i c and Gas
-Public Service E l e c t r i c and Gas
-American Telephone and Telegraph
Southern B e l l Telephone and
Telegraph
New York S t a t e E l e c t r i c and Gas
•Long I s l a n d Lighting
•Kaiser Aluminum & Chemical
• Southern C a l i f o r n i a Gas
Freedom Insurance Company




1 s t mtg. b d s .
1 s t mtg. PL b d s .
Common s t k .
• Deb.
1st mtg. b d s .
Deb.
P f d . stock
Deb.
Conv. deb.
Deb.
1st mtg. b d s .
1 s t mtg. b d s .
. P f d . stock
• - Bonds
Common s t k .

12.0
50c0

16.0

100.0
17.0 '
ItO.O
22.o
32.0
637.2
30.0
22.0
12-0
* 32.0
itOsO

22.0

September lU
September lb
September lH
September 12
September 20
September 21
October
October b
October 13
October 17
October 19
October 26
October
November
1955

H.1U

F-2
Forthcoming Large O f f e r i n g s , as of September 9 (Cont'd)
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
B u f f a l o , New York
Volusia County, F l o r i d a
^ D e t r o i t , Fichigan
Los Angeles, C a l i f o r n i a
S t a t e of New Mexico
Sedgwick County, Kansas
Richmond-Petersburg Turnpike Auth.
Chicago Regional Port D i s t . , 111.
^ P h i l a d e l p h i a , Pennsylvania
Texas Turnpike Company
I l l i n o i s Turnpike Authority
-^•State of C a l i f o r n i a
^ T e r r i t o r y of Hawaii
Connecticut Expressway
Inter-American Center A u t h . , F l a .
iiichigan Turnpike Authority
S t a t e of Louisiana
C a l i f o r n i a T o l l Bridge Authority
^ Louisiana Turnpike Commission
™ C a l i f o r n i a T o l l Bridge A u t h o r i t y
New York S t a t e Thruway Authority
Oklahoma Turnpike Authority
ITashin'gton S t a t e T o l l Bridge Auth.

G.O.
G.R. ' n.a.
Rev.
; L.L.
G.O.
Rev.
, Rev.
n.a.
Rev.
Rev.
n.a.
Rev.
Rev.
Rev. ^
n.a.
. Rev.
= Rev. "
•
Rev.
G.R.
Rev.
Rev.

12.8
8.0
9.1
18.0
8.9
5.8
69.0
2l;.0
39.9
130.0
400.0
60.0
7.5
100.0
25.0
186.0
80.0
235,0
100.0
43.0
125.0
146.0
227.0

September 13
September 15
September 20
September 21
September 23
September 28
September 28
September
October 18
October
October
November 2
November 16
1955
3955
1955
1952
1955
1955
1955
1955
1956

None
^7"Includes corporate and other i s s u e s of 15 m i l l i o n d o l l a r s and over3
State"and l o c a l government i s s u e s of 5 m i l l i o n and over.
. 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 for Reconstruction
and Development i s s u e s .
•n.ac Not a v a i l a b l e .
—Included i n t a b l e f o r f i r s t t i m e .




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