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REVISION
Revision - See Federal Reserve Btilletin December 1970 and pages attached to
the release of Nov- 27, 1970
FEDERAL
statistical
RESERVE
release
For immediate release*
November 27, 1970
Revision of Money Supply and Related Data
The annual revision of the daily average measure of the
money supply and related data has been completed and revised data are
shown in the accompanying tables* The revision this year, which
affects estimates back to 1959, raises both the level and the percentage rate of increase of the money supply. Over the first ten months
of 1970, the money supply grew at a 5-1/2 per cent annual rate on the
revised basis, as compared to a growth rate in tie figures previously
published of slightly under 4 per cent over the same period.
The revision includes, as usual, the annual review of
seasonal factors and new benchmarks for nonmember banks based on the
latest "call report" data. In addition, the revision this year encompasses for the first time certain new data, mainly from agencies
and branches m the U.S. of foreign banks and from subsidiaries of
U S banks organized under the Edge Act to engage in an international
banking business
These new data serve to correct a downward bias in
the money supply series caused by the generation of "cash items m the
process of collection" on the books of U.S* domestic banks as a result
of clearing a large daily volume of international transactions*
In calculating the demand deposit component of the money
supply, all "cash items in the process of collection" are deducted
trom the relevant gross demand deposit figures. "Cash items" have
been deducted since the inception of the money supply series in order
to eliminate the double counting of deposit balances m process of
being transferred from one bank to another, For example, when Mr, A
deposits a check sent to him by Mr B, the bank account of Mr. A is
increased bef ore ^that of Mr. B is reduced. Upon receipt of the check*
Mr A's bank records a deposit liability and, while the check is
clearing between banks, it al6o carries an asset called "cash item in
the process of collection"
Meanwhile, Mr B's bank still has a
deposit liability to B until the check written by Mr. B goes through
the clearing process and is presented for payment. Thus, in order to
avoid overstatement of the money supply, it is necessary in the calculation of the money supply to offset the deposit liability still
carried on the books of Mr B's bank by deducting the "cash item".
-2International transactions--involving, tor instance, the
writing of checks m connection with the borrowing and repaynent of
Eurodollars or the purchase and ?ale of foreign exchange--give rise
to "cash items" in a fashion similar to the domestic transactions
described in the example above. These international transactions
may be undertaken through domestic commercial banks as well as through
institutions specializing in international banking, such as agencies
and branches of forexgn banks and "Edge" corporations.
Transactions through institutions specializing m international banking have beeti of increasing importance m recent years,
axid have resulted xn a rising and, volatile amount of "cash items in
the process of collectxan on the books of commercial banks, whose
data are used in the calculation of theraoi^eysupply. These particular "cash items" did not reflect checks written against deposits that
were included xn the money supply. Thus, Reduction of these "cash
items11 from the demand deposit lxabxlxtxes of the commercial banks
covered xn the money supply led to a downward bias in the level of
the money supply as measured up to now. The rate of increase in the
money supply was also lowered at those times when transactions
through, and lxabxlxtxes of, xnternatxonal banking institutions were
rising relatively more rapidly than deposxts at domestxc commercial
banks.
In the current revision the liabilities of specialized
banking xnstxtutxons that correspond to "cash items" on the books of
u\ S* commercxal banks have been added to deposxts as a means of eliminating the downward bias xn jthe money supply. These counterpart
Ixabilities do not themselves add to the money supply. Rathejr, they
serve to neutralize the downward effect m the money supply calculation of an equivalent amount of "cash items" on the books of commercial
banks. This then permits deposits already on the books of U S
commercxal banks, but whxch were inappropriately offset by these "cash
items", to be reflected xn the money supply measure. But because
forexgn agencxes and "Edge" corporatxons are now treated as part of
the commercxal banking system, a small additional amount of dollar
deposits held more or less permanently by their customers is also added
to the money supply.
The revision will be described in further detail, and additional
back data will be presented, in an article in the December issue of the
Federal Reserve Bulletin.
FEDERAL
RESERVE
statistical
h 6
release
For immediate release
November 27, 1970
Based on the revised series, the seasonally adjusted money supply has
averaged $213 2 billion in the first three weeks of November, or about $200
million above the October average level. Total time and savings deposits continued to increase m the latest week, averaging about $2,6 billion higher than
in the month of October.
MONEY SUPPLY AND TIME DEPOSITS
(Averages of daily figures, in billions of dollars)
Seasonally adjusted
Money Supply
Period
1969—October
November
December
203 2
203 5
203.6
1970—January
February
March
April
May
June
July
August
September
October
205.2
204.5
206 6
208 3
209 2
209.6
210 6
211.8
212 8
213.0
Week ending
1970—Oct
Nov
Demand d e p o s i t
component
45.6
|
!
157.6
157.6
157.7
194.2
194.0
194.6
46 2
46.4
46.7
47.1
47.7
47.8
48.1
48.2
48.2
48.5
159.0
158.1
159.8
161.2
161.6
161.9
162.5
163.7
164.6
164.5
193.3
193.5
195.3
198.5
200.3
202.2
208.2
213.2
218.5
222,3
I
45.9
i
46.0
\
7
14
21
28
213.7
213.9
213 9
212.3
48.4
48.5
48.6
48.5
165 4
165.4
165 3
163.8
221.1
222.0
222.8
223.0
4
il p
18 p
212.7
213 1
213.8
48 6
48 6
48 7
164.1
164.5
165.1
223 4
223.8
224.9
213 0
48.6
164.4
223.8
Average of l a s t 4 weeks
Currency
component
Total
Time d e p o s i t s
adjusted,
( A l l commercial
banks)
DEMAND DEPOSITS, CURRENCY, AND RELA1ED 1TLMS
(Averages of d a i l y f i g u r e s , i n b i l l i o n s of d o l l a r s
Not s e a s o n a l l y adjusted )
Money Supply
Period
Total
Currency
component
Demand d e p o s i t
component
Related d e p o s i t s
( A l l commercial banks)
U S Gov't
Time
demand
adjusted
1969—October
November
December
203.2
205.3
209.8
45.6
46.4
46.9
157.6
158.9
162.9
194.4
193.4
193.2
1970—January
February
March
Aprxl
May
June
July
August
September
October
211.4
202.8
204.7
209.3
205.3
207.8
209.0
208.7
211.3
213.0
46.1
45.9
46.3
46.6
47.3
47.7
48.3
48.3
48.2
48.5
165.4
156.8
158.4
162.6
158.0
160.1
160.7
160.4
163.1
164.5
192.7
193 0
195.9
199 3
201.1
202.3
208.1
214.0
218.4
222.5
7
14
21
28
214.9
214.5
214.6
212.6
48.6
48.7
48.5
48.1
165.0
165.8
164.8
163.3
221.2
222.2
222.9
223.1
4
11 p
18 p
215 3
214.8
216.1
48.5
49.3
49.2
166.8
165.4
166.9
223.4
223.9
224.5
Week ending.
1970—Oct.
Nov.
4 2
5 2
5 6
p. - Preliminary.
NOTE
Money supply consists of (1) demand deposits at all commercial banks, other than
those due to domestic commercial banks and the U S Government, less cash items
in process of collection and Federal Reserve float, (2) foreign demand balances at
Federal Reserve Banks, and (3) currency outside the Treasury, the Federal Reserve
and the vaults of all commercial banks
Time deposits adjusted are^ time deposits
at all commercial banks other than those due to domestic commercial banks and the
U S Government.
REVISED DATA
MONEY SUPPLY AND TIME DEPOSITS ADJUSTED
(In billions of dollars)
1
Seasonally adjusted
[ Tune
Money Supply
I Demand
deposits
1
Currency I deposit
ad! Total 'component 'component I lusted
i
j
r
seasona1 ly adjusted
Money Supply
j Time
deposits
1 Demand
adCurrency
deposit
Total 1 component1 component lusted
H N o t
1
v
^rth
1
j
19DS
January
February
March
April
May
June
July
August
September
October
November
December
19D9
January
February
March
April
May
June
July
August
September
October
November
December
1970
^January
February
March
April
May
June
July
August
September
October
133 6
184 7
135 8
! 136,6 i
138 7 i
190 2
. 191 6
192 7
193 6
194 3
196,0
197 4
40 6
40 7
41.1
41.3
41 6
41.9
42 1
42-3
42.7
42 8
43 2
43 4
43 6
43.8
44 1
44 2 j
44.5
44 8
45.0
45 2
45 3
45 6
45 9 j
46.0
j 205 2
| 204 5 \
! 206 6
203 3
209 2
209 6
210 6 j
1 211 8
j 212 8 i
j 213 0
46.2
46 4
46 7
47 1
47 7
47 8
48.1
48 2
48 2
48.5
1
\
'
'
'
184.4
186.2
187 2
187.5
188.1
188.9
191.1
193.8
196.7
199.6
149.5
150.3
150.9
151.5
152.9
154.0
201.8 J
204.8 I
189.3
183.3
184.1
187.6
185.0
.188.5
190.1
189.S
192.2
194.3
197.7
203.4 [
40.5
40.3
40.7
41.0
41.3
41.8
42.3
42.5
42.7
42.*
43,6
44.3
204.2 '
197.8
198.3
202.0
197.7
200.5
201.5 1
199.6
201.4
203.2
205.3
209.8
43.5
43.4
43.7
43.8
44.2
44.7
45.2
45.4
45.3
45.6
46.4
46.9
211.4
202.8
204.7
209.3
205 3
207 8
209.0
208.7
211.3
213.0
46.1
45.9
46.3
46.6
47.3
47.7
48.3
48 3
48 2
48.5
148.8
143.0
143.4
146. 6
143. 7
146.6
147.8
147.3
149.6
j
151.5
154.1
! 159.1
183.9
185.9
187.9
188.2
188.7
1
189.0
191.3
194.9
196.7
199.7
201.4
203.2
f
[
• 1-98 1
199 3
200 1
j 201 0 !
201 6 1
] 202 4
203.1
205 6 j
202 &
203 2
203,5
203 6
1
143.1
144.0
144.7
145.3
! 147 1
! 148.3
154.5
155.5
156.0
156.8
157.1
157.6
158.1
157.4
157. 6
157.6
1
i
i
j
19fr.l
157.6 1
157.7
159 0
158.1
159.8
161 2
161.6
161.9
162 5
163 7
164 6
164 5
203.7
203.2
202.5
202.1
201.7
201.2
j
]
195.4
194.8
194.2
194.0
194.6
193.3
193.5
195 3
198.5
200.3
202.2
208.2
213 2
218 5
222 3
b
I
j
\
'<
i
!
j
160.7
154.4
154.6
158.2
153.5
155.8
156.4
154.3
156.1
157.6
158.9
162.9
165.4
156.8
158.4
162.6
158.0
160.1
160.7
160.4
163.1
164.5
j 202.9
|; 202.6
j 203.2
203.0
202.5
j 201.3
I 198.1
196.0
194.9
194.4
193.4
193.2
192.7
193.0
195.9
199.3
201.1
202.3
208.1
214.0
218.4
222.* 5
1
REVISED DATA
MONEY SUPPLY AND TIME DEPOSITS ADJUSTED
(In b i l l i o n s of d o l l a r s )
1
Veek
ending
Not s e a s o n a l l y adjusted
Time
Money Suppl [X
1 Time
deposits
Demand
deposits
adCurrency
addeposit
justed
I 1 Total component component lusted
1
•Seasonally Adiusted
Money Supply
Demand
Currency
deposit
T o t a l component j component
7
14
21
28
205.3
205.8
205.9
204.3
46.0
46.0
46.2
; 46.3
194.3
193.7
193 0
192.7
216
214
211
206
4
11
18
25
203.9
204.0
204.5
205.0
! 46.3
| 46.3
| 46.4
46.5,
192.7
193.1
193.5
194.1
206 1
203 7
202.7
199.8
45 8
46 2
46.0
45.7
Mar.
4
11
18
25
205-8
205.9
206.0
\ 206.6
46,5
46.6
46.7
j 46.8
159.3
159.3
159.3
159.8
194.3
194.4
195.0
195.8
204.a
204.3 {
204.9 j
203.1 1
Apr.
1
8
15
22
29
208.3
209.5
209.6
207.3
206.7
46.9
47-1
47.2
47.4
161.4
162 6
162.5
160.1
159.4
197.0
197.7
198.2
199.1
199.5
6
13
20
27
208.0
208.8
210.1
210.1
47.5
47-6
| 47-6
! 47.7
160.5
161.3
162.5
162.5
3
10
17
24
210.1
209.5
210.1
208.5
!
July
1
8
15
22
29
Aug
5
12
19
26
1970—Jan.
Feb.
May
June
Sept. 2
9
16
23
30
:
159.4
159.8
159.7
157 9
1
j
j
157.6
157.6
158.1
158.5
!
1 46.9
!
j
i
i
\
1
\
5 j
0
5
2
46
46
46
45
J60 6
193
192
192
192
160
157
156
154
3
5
7
1
192 1
192 4
193 0
193.5
46 0
46.5
46.4
46.2
158.0
157.8
158.5
L56.9
194 2
194.9
195 7
196 5
2 0 7 . 2 '•
209.7
211.2
210.0
206.3
46.3
46.9
46 8
46.6
46.4
160
162
164
163
159
9
9
4
4
8
197 8
198 8
199.0
,199 5
200 1
207.2
205.7
205.0
203.5
47.2
47.4
47.3
47.0
160 0
1 158.4
157.8
156 4
200 4
200 7
201 2
201 5
201 7
202 0
202 0
202 1
203 7
205 7
207 1
208 7
210 3
212 0
213 1
213 7
214 9
216 1
217 2
217 8
218.9
| 220.1
I
201.2
201.3
201.8
202.3
207.1
207.5
210.0
205.3
47.6
48 0
47 8
47 6
159 5
159 5
j 162.2
157 8
160.8
161 4
162 I
159 5
159 5
210 0
211.3
210.9
210 0
210 0
47.9
48.1
48.1
48.1
48.0
1 162.1
! 163.2
162.8
161.9
: 162.0
203.8
205.8
207 4
208.8
210.2
47.5
208 3
210 3 1 48 9
210 5
48.4
207 7 i 4 8 . 2
207.3 1 47.7
210.5
211.7
212.7
212.3
48 1
48 1
48 2
48.1
1
211.3
212 3
213.0
214.3
209.4
209.0
209.2
207.2
48.3
48 6
48 4
48 0
212.4
212.7
212.8
212.4
212 9 j
48 2
48 2
48.2
48 2
48 1
215.4
217.0
217.8
209.9
211.1
213.9
210.1
47.9
48 9
48 3
48 0
47.7
|
;
•
j
!
[
162.4
161.8
! 162.3
160.6
164.3
164 5
164 6
164 2
164 8
169 97
167
165 5
199.7
199.8
200.4
200.6
47.7
47.8
47.-6
47.8
162.4
163.5
164.5
164.2
p—
6
2
0
5
219.4 J
220.3
iJ
210.2
1
|
161
16
160
159
1
4
7
2
162
162
165
162
162
0
2
6
1
5
4
9
5
2
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