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L.it.3 FEDERAL RESERVE BANK o f K A N S A S CITY AUG 2 0 1953 RESEARCH LIBRARY lAEKISG AND M3KETAKY DEVELOPMENTS IN JULY 1958 Summary. Total commercial bank c r e d i t declined during J u l y r e f l e c t i n g reductions in business and security loans and in foldings of U. S. Government s e c u r i t i e s . Seasonally adjusted demand deposit and currency holdings of businesses and individuals increased s u b s t a n t i a l l y while U. S . Government deposits declined sharply. Time deposits continued t o expand. Free reserves of member banks averaged about $550 m i l l i o n , somewhat above the June l e v e l . Bank c r e d i t . Total loans and investments a t a l l commercial banks declined almost $2 b i l l i o n in J u l y as shown in Table 1. The reduction, however, followed a record expansion of $4.k b i l l i o n in June. Net growth over the two months was therefore s u b s t a n t i a l and was exceeded only in the comparable periods of 1 9 5 2 and 1 9 5 3 . The J u l y I958 reduction r e f l e c t e d mainly declines in b u s i ness and security loans, but holdings of U. S. Government s e c u r i t i e s a l s o declined $300 m i l l i o n . The reduction in Government security holdings a t c i t y banks was l a r g e r than t h i s but a t nonweekly reporting banks t h e r e i s estimated t o have been some increase, as is usual In t h i s month. Holdings of other s e c u r i t i e s showed l i t t l e f u r t h e r change in July but generally t h i s has been t r u e in other years as w e l l . At c i t y banks, redemptions of maturing FNMA issues In l a t e June were not f u l l y o f f s e t by purchases of other s e c u r i t i e s . Business loans a t a l l commercial banks declined $900 million in July following a $600 million growth in June. These loans had a l s o declined about $900 million in J u l y l a s t year, a f t e r a record expansion in June. Reductions in business loans in J u l y of 1 9 5 8 and 1 9 5 7 were s u b s t a n t i a l l y larger than in any other y e a r . Over half the reduction in business loans in J u l y was in loans t o metals manufacturers which f e l l $350 m i l l i o n , over twice as much as the June r i s e . Net repayments by food processors were s l i g h t l y l a r g e r than in other recent y e a r s . Repayments by public u t i l i t i e s and petroleum concerns exceeded the June increases and were a l s o l a r g e r than repayments in most e a r l i e r y e a r s . Loans t o sales finance companies declined l e s s than l a s t year but the r i s e in June had a l s o been smaller than in 1957* Not f o r publication i.i.3 ' . 2 . Table 1 # Estimated Changes i n Loans and Investments a t All Commercial Banks (In b i l l i o n s of d o l l a r s ) I1/6BI # Total loans (excluding interbank) 0 0 Business' Real e s t a t e Security Agricultural Consumer All other U. S. Government s e c u r i t i e s 1958: 1958: 1957: 1957: June 26- June 27- Jan. 1— Jan. 1 J u l y 30 J u l y 31 July 30 July 31 A 1.5 - 1.0 - 1.3 + l.u + 0.9 + 5.2 + + 0.9 0.2 0,9 0.1 + + 0*9 0.1 0.2 0.1 o.l y- + + + - 2.7 0.8 0.5 o.h 0.1 0.1 + 0.9 + 0.2 0.6 - 0^3 + 1.0 + 0.1 + + + + + + — + + 0*8 + 6.2 - 2.3, + + 2.1 + 0.5 + 3.2 + - 0.1* + 12.2 + 5*8 1953: 1952: 1951: - 0.3 * Total loans (excluding interbank) Business Real e s t a t e Security Agricultural Consumer All other U. S. Government s e c u r i t i e s * Other s e c u r i t i e s 1/ 1.9 — 0.2 + 7.0 1956s 1955: 195k: - 1.8 1.2 1.0 0.6 0.2 — 8.1 3*8 0.8 0.6 0.3 1.2 O.lj + 0.1 0.5 End of June t o l a s t Wednesday of J u l y - 0*h + 0.6 — 0.6 + 0.3 + + - 0.3 0.1 0.1 0.1 0.1 0.1 + + 0.2 0.2 1/ - 0.2 + 0.2 + 0.1 - 0.3 + 0.2 — O.it 1/ 1/ + "0.1 + + + + + 0.1 0.1 0.2 0.1 0.1 1/ — O.li + 0.1t + 0.8 + U.6 - 0.2 - 0.1 + - 1.0 + 1.0 0.2 . # -zt O + Total loans and investments ( l e s s interbank) + y- Item * July 30, July 31, 1958 1957 - Other s e c u r i t i e s Total loans and investments ( l e s s interbank) Year ending: y + 5.0 + 1 0.2 —- 0 . 6 - 0.2 + 0.1 1/ + 0.1 + 0.1 + 0.1 + + + 1.7 + 0.2 + 0.1 + 0.1 + 2.1 - 0.3 0.1 0.1 0.1 1/ - "0.2 0.3 0 1 / Less than $50 millions Sfotet Data f o r July 30 1958, are preliminary estimates based on data f o r weekly reporting member banks and estimates f o r other banks. Later estimates f o r July w i l l be shown i n the Board's statement, "Assets and L i a b i l i t i e s of All Banks i n the United S t a t e s . v Not f o r publication L.lt.3 - 3 Table 1 (continued) Estimated Changes i n Loans and Investments a t All Commercial Banks (in b i l l i o n s of d o l l a r s ) F i r s t seven months: 1956 Tbtal loans (excluding interbank) • + Business Real e s t a t e SecurityAgricultural Consumer All other + + + + 1955 3.8 + 5.0 2.6 1.1 0.7 0.3 1.2 0.1 + 2.2 + 1.6 - -1.0 + 1.1* + 0.7 1951 — 1953 0.8 + l.li 0.7 0.3 0.1 0,1 0.2 + + + + + + 1952 1.2 + 1.7 o.k - 0.8 + 0.5 0.6 0.2 0.1 1.3 0.2 + + + + 0.1 + l*k 0.5 o.k 0.9 0.2 W* S. Government s e c u r i t i e s — 5.k - 5.3 + 0.9 Other s e c u r i t i e s - o.lt + o.it + 1.0 + 0.2 + 0.8 - 2.0 + 0.1 + 1.1 + 1.3 + 3.9 Total loans and investments ( l e s s interbank) J F i r s t seven months: Item Total loans (excluding interbank) Business Real e s t a t q Security Agricultural Consumer All other — 1951 1950 + 1.9 + 2.8 + + + 1.5 0.7 o.k 0.3 + + + + + 0.2 1.1 o.5 0.3 1.0 0.3 3.3 - 2.0 + 1.8 - & 19i*9 - 2.2 n. n. n. n. n. n. 19k8 19hr + 1.9 + 2,8 a. a. a. a. a. a. n. n. n. n. n. n. a. a. a. a. a. a. n. n. n. n# n« n. a. a. a. it# a# a# U. S. Government s e c u r i t i e s - Other s e c u r i t i e s + O.k + 1.2 + 0.6 + 0.3 + 0*6 - + 1.9 + 0.2 «• 1.8 - Total loans and investments ( l e s s interbank) 1/ l e s s than $#0 million Not f o r publication 1.0 3.9 - k.l 0.7 So f a r t h i s y e a r , business loans a t c i t y banks have declined $2,8 b i l l i o n , about t h e same as in I9U9 but more than in any other postwar y e a r . Loans t o s a l e s finance companies declined about $1 b i l l i o n , more than in any other year since 1952 when data became available* Net repayments by food processors and t r a d e concerns were l a r g e r than in other years but those by commodity d e a l e r s were smaller. Total reductions i n these seasonal loans were $1.2 b i l l i o n . Loans t o metals manufacturers, petroleum concerns and public u t i l i t i e s a l s o declined but those t o t e x t i l e and other manufacturers and t o cons t r u c t i o n firms increased. Security loans declined $900 m i l l i o n in J u l y following an increase of $1.2 b i l l i o n i n June, l a r g e l y t o brokers and dealers f o r purchasing and carrying U. S . Government s e c u r i t i e s in connection with the mid-June Treasury refunding. R e f l e c t i n g l a r g e l y t h e June growth, s e c u r i t y loans have increased $500 m i l l i o n so f a r t h i s y e a r , compared with a decline of $600 m i l l i o n in t h e f i r s t seven months of 1957« Real e s t a t e loans a t a l l commercial banks increased $200 m i l l i o n f u r t h e r in J u l y , bringing the t o t a l growth so f a r t h i s year t o $800 m i l l i o n compared with $200 m i l l i o n l a s t y e a r . The 195® growth was l e s s than in 195 6 and 1955 but about the same as i n other recent y e a r s . Consumer loans were about unchanged in J u l y . They have declined s l i g h t l y so f a r t h i s year compared with a $1 b i l l i o n increase in 1957• These loans a l s o declined i n 195% but showed s u b s t a n t i a l growth in most other y e a r s . Total loans and investments a t a l l commercial banks increased $7 b i l l i o n during the f i r s t seven months of 1958. I n other post-war y e a r s , the l a r g e s t Increases were in 1952 ($4 b i l l i o n ) and i n 1950 ($2 b i l l i o n ) . In s e v e r a l y e a r s , t o t a l c r e d i t declined over t h i s p e r i o d . Growth i n 1958 r e f l e c t e d an increase of over $6 b i l l i o n i n holdings of U. S. Government s e c u r i t i e s and of over $2 b i l l i o n i n holdings of other s e c u r i t i e s . Loans, however, declined $ 1 . 3 b i l l i o n in 1 9 5 8 and t h i s reduction was exceeded only by a $2.2 b i l l i o n decline i n 19^9. Hot f o r p u b l i c a t i o n - 5- L.U.3 Table 2 Changes i n Commercial and I n d u s t r i a l Loans 1 / (In millions of d o l l a r s ) *~ 1958 Business of Borrower - 117 + 19 lit - 11* + - 83 1*2 1*2 Sales finance - 115 - All other - t o t a l Metals and products T e x t i l e s , apparel and l e a t h e r Petroleum, c o a l , ebc. Other manufacturing and mining Public u t i l i t i e s Construction All other types of business - 566 356 - — "" 3/ 1952 1953 June 25- June 26July 29 July 30 - 61 + 62 + 35 + 36 + 21 + 73 - 27 + 67 - 119 + 25 16 - Ho + - 2l* 59 32 280 - 138 + 5U - 35 + 36 - 32 - 303 229 + 27 - 136 + 205 - 35 - 302 — 154 - 39 50 - 160 109 22 88 + - 21 27 + + 37 1*1* + 61 + 26 I4I 56 + - 3h 21 + + 20 29 11 - 126 + 9 + + 9 83 9 + - 81 2h 2l* + 36 + 7 + 2k • — 13 - - 95 + 2h + - 11 17 5 + 6 - 165 + 6 + 86 h9 + 9 + 53 + 295 — 270 2 / - 2h6 2 / - 81* - 113 1*1 - 189 10 - 151* - 199 - 83 + 28 3 + 1*9 - 793 62 — 665 - 122 - 9 89 $CO 1/ 195k 81 + 197 15 + 101 - - 98 l h 1 Total change 1955 June 26- June 27- June 28- June 30- J u l y 1 J u l v 30 July 31 Aug. 1 Aug. 3 Aug. h Food processors Commodity dealers Trade concerns Total Classified Unclassified 1956 1957 787 + - - h9 3 / - l i l t + Prior t o week ending January ]LI, 1956, included changes :Ln agricu]Ltural loans. „ which are included i n data, a r e estimated t o have declined $300 million CCC c e r t i f i c a t e s of i n t e r e s t , which are included in d a t a , are estimated t o have declined $1*75 m i l l i o n . Note| C l a s s i f i e d data are f o r a sample of about 210 banks r e p o r t i n g changes i n t h e i r l a r g e r l o a n s , These banks hold over 90 p e r cent of t o t a l commercial and i n d u s t r i a l loans of a l l weekly reporting banks and n e a r l y 70 per cent of those of a l l commercial banks. Data are preliminary f o r week of J u l y 30, 1958. Hot f o r p u b l i c a t i o n 3 - 6 — l.k.3 Table 2 (continued) Changes i n Commercial and I n d u s t r i a l Loans 1 / (Iii millions of d o l l a r s ) ~~ End of December t o end of Julys Business of Borrower 1952 1958 1957 1956 1955 1954 - 775 - 264 - 179 -1,218 - 538 - 497 - 43 - 402 . — 244 + 167 - 479 + - 605 395 176 824 - 500 - 297 - 67 -"864 Sales finance -968 + 86 - 525 + 552 - 189 - 53 - 249 All other - t o t a l Metals and products T e x t i l e s , apparel and l e a t h e r Petroleum, c o a l , etc. Other manufacturing and mining Public u t i l i t i e s Construction All other types of business - 361 - 211 +1,729 • + 706 +2,989 +1,655 + 1 , 2 # • + 131 • - 506 - 710 + 736 + m +1,119 +1,002 + 73 - 228 + 168 + 263 + 267 + 488 + 248 + 331 + 91 - 75 + 185 - 31 - 52 + 205 + 146 - 303 + 66 + 223 + 1*29 3 + 445 + 337 + 39 • + 182 + 386 + 169 - 14 + 38 + 87 + 106 + 67 + 13 + 82 - 167 + 24 + 96 - 57 + 172 + 208 + + 1 + 25 -2,559 - 21*2 + 739 - 277 +1,985 + 29 +1,382 2 / - 279 - 473 - 274 - 735 - 101 -2,800 + 462 +2,014 2/+l,103 3 / - l , 8 5 6 - 747 - 836 Food processors Commodity d e a l e r s Trade concerns Total Classified Unclassified Total change 77 -1,559 3 / - 297 1953 . - 740 - 608 + 192 -1,156 - 891 - 575 - 138 -1,664 1 / P r i o r t o week ending January 11, 1956, included changes i n a g r i c u l t u r a l l o a n s . "tJ CCC c e r t i f i c a t e s of i n t e r e s t , which are included in d a t a , are estimated t o have declined $820 m i l l i o n . 3 / CCC c e r t i f i c a t e s of i n t e r e s t , which are included i n data, are estimated t o have ~* declined $1.10 m i l l i o n . Note: C l a s s i f i e d data are f o r a sample of about 210 banks reporting changes in t h e i r l a r g e r loans# These banks hold over 90 per cent of t o t a l commercial and i n d u s t r i a l loans of a l l weekly reporting banks and n e a r l y 70 per cent of those of a l l commercial banks. Data are preliminary f o r week of July 30. Hot f o r p u b l i c a t i o n L.4.3 - 7 - Deposits and currency. Preliminary estimates indicate t h a t seasonally a d j u s t e d demand deposit and currency holdings of businesses and individuals increased $2.3 b i l l i o n in J u l y , much more than i n any other month since t h e Board's seasonally adjusted s e r i e s began in 19^7• This followed a decline of $100 m i l l i o n i n t h e seasonally a d j u s t e d money supply i n June* In t h e s i x months since January, growth In t h e a c t i v e money supply has been a t an annual r a t e of over 8 per c e n t . At the end of J u l y , seasonally adjusted deposits and currency were s l i g h t l y over one per cent above t h e year-ago l e v e l . The sharp increase in demand deposits adjusted in J u l y was associated with a $5 b i l l i o n decline i n U. S. Government deposits* In June, U . S . Government balances a t commercial and Federal Reserve Banks, had increased $4.2 b i l l i o n t o $10.2 b i l l i o n , the highest l e v e l since e a r l y 19^-6. This was accompanied by record bank c r e d i t expans ion and t h e p r i v a t e l y - h e l d money supply was reduced only nominally by the build-up of Government deposits* I n J u l y , t h e f a i r l y heavy decline i n bank c r e d i t o f f s e t a p a r t of the e f f e c t of t h e sharp reduction i n Government balances on deposits of businesses and individuals* Time deposits a t commercial banks Increased $600 m i l l i o n between June 2 5 and J u l y 30* This was somewhat l e s s than the increase in other recent months, but time deposits tend t o show s l i g h t l y smaller growth i n the J u l y r e p o r t i n g period than i n surrounding months. So f a r t h i s y e a r , time deposits a t commercial banks have increased $6*3 b i l l i o n , much more r a p i d l y than i n any other y e a r . Previously, these deposits had expanded most r a p i d l y i n 19^5 and 1957—about $3.8 b i l l i o n i n each of these years* Growth of deposits a t mutual savings banks a t $1.4 b i l l i o n has a l s o been g r e a t e r than i n other y e a r s . The seasonally adjusted annual r a t e of deposit turnover a t banks outside Hew York and other f i n a n c i a l c e n t e r s averaged 23 times during the second quarter of 1958, about t h e same as i n the previous two q u a r t e r s and about 3 per cent below the peak in t h e t h i r d quarter of 1957. At banks i n New York City, however, turnover continued t o r i s e , and in the second quarter of 1958 averaged almost 57 times a t a seasonally a d j u s t e d annual r a t e , or 11 per cent above the t h i r d quarter of 1957* Hot f o r p u b l i c a t i o n L.ii.3 - 8 Table 3 Estimated Changes in Deposits and Currency IIn b i l l i o n s of d o l l a r s ; Item Seasonally adjusted data 1/ Demand deposits adjusted Currency outside banks Total Seasonally unadjusted data 1/ Demand deposits adjusted ~~ Currency outside banks Total Time deposits Commercial Mutual savings Ue S. Government deposits Total x Factors a f f e c t i n g deposits and currency Bank loans and investments other than U. S. Govt. sec. 2 / Commercial Mutual savings Bank holdings of U„ S. Government s e c u r i t i e s : Federal Reserve Commercial Mutual saving and other Gold stock and f o r e i g n deposits a t F . B. Banks Other f a c t o r s h / 1957 1958 1958 June 26- June 27- Jan. 1 J u l y 30 J u l y 31 J u l y 30 + 2.2 + 0.1 + 2.3 + 2.5 + 0.1 + 2.6 + + t - 0.7 0.7 0.1 5.1* + 0.7 + 0.1 + 0.8 + 1.0 TTTo + 0.3 + lt-5 1957 Jan. 1 July 31 h»5 + 1.3 + 0.3 TTZ - 2.1 lt.8 7.5 6*3 W5 + — O.lt + o.lt l.It 0.1 - l.o + o«5 57? 3.8 0.9 0.3 - 1.2 Tear ending: J u l y 30, July 31, 1958 1957 + 1.6 + l.lt + 0.5 1.6 0.1 + i.u + O.it + 0.1 > 1.7 + 1.7 + 9.9 + 8.0 + 2.2 + 0.6 + 1.6 + 6.0 + It. 7 + 1.7 TR3 (signs indicate e f f e c t on deposits and currency) — 1.3 - 1.5 + 0.2 — 0.8 -1:0 + 0.2 + 2.6 + 0.8 + 1.8 + 3.0 + 1.9 + 1.3 + 7.1 + itel + 2.7 + 8.3 +TTT + 2.3 - O.lt - 0.1 - 0.3 + 1.2 6.6 6.? 6.2 0.3 - 1*.2 -1:6 - 2.3 - 0.3 + + + = - 0.7 + 0.8 — 0.1 + + + - 2/ - 0.1 - 1.5 - 2.5 + 0.6 — 0.6 - 1.3 - 2.5 —— - 0.2 - 0.2 + TO 9.0 1.6 8.1 0.8 + ¥.1 — 0*6 + 0.7 — 0*6 f o r l a s t Wednesday except i n case of June and December c a l l d a t e s , when a v a i l a b l e . Less than $50 m i l l i o n . H, Total includes foreign loans on gold, holdings of bankers' acceptances a t the Federal Reserve, and loans t o f o r e i g n banks; changes i n these items a r e genera l l y r e l a t i v e l y small. In addition even i f there were no changes i n these items, changes a t commercial and mutual savings banks would not add to t o t a l change which i s "net" because commercial banks exclude a l l interbank l o a n s , domestic and f o r e i g n . _V Includes interbank time deposits of f o r e i g n banks which increased about $900 million a t weekly reporting banks between December 31, 1957 and J u l y 30, 1958. Note: Data f o r July 30, 1958, are preliminary estimates based on data f o r weekly reporting member banks and estimates f o r other banks. l a t e r estimates f o r July w i l l be shown i n thp Board's statement "Assets and L i a b i l i t i e s of All Banks i n the United States™ available a t the end of August Not f o r publication > L.4.3 - 9 Table 3 (continued) Estimated Changes i n Deposits and Currency (In b i l l i o n s of dollars * Item * 1956 + 0.8 + 0.1 + 0.2 Seasonally unadjusted data 1 / Demand deposits adjusted Currency outside banks Total Time deposits Commercial Mutual savings U. S. Government deposits Total Seasonally unadjusted data 1 / bemand deposits adjusted Currency outside banks Total Time deposits Commercial Mutual savings U. S. Government deposits Total n.a. 1/ ~ 2/ 1953 + 1.8 - 0.1* + 1.1* + 2.5 + 0.3 + 2.8 + 0.9 + 0.4 + 1.3 1952 - 4.6 - 0.5 + + + - 2.3 1.2 1.1 0.2 3*5 + + + + - 2.8 0.3 3.1 1.8 0,9 1.1 1.1* 0.2 - 4.1 - 0.3 - 4.4 + 2.6 + 1.6 + 1.1 + ,2.7 + 0.9 - 3.3 - 1.0 - 4.3 + 3.3 + 2.3 + 1.1 - 0.1f — 0.9 1950 1919 + 2.5 + 0.8 + 3.3 -**• * 1951 Seasonally adjusted data 1 / Demand deposits adjusted" Currency outside banks Total 1951* Jan. - July Jan. - July Jan. - July J a n . - J u l y Jan. - July Seasonally adjusted data 1 / Demand deposits adjusted"" Currency outside banks Total Item 1955 1948 191*7 „ - 2.4 - 6.1 ^2% + 2.4 + 1.5 + 1.0 + 1.7 + 3.5 191*6 Jan.-Jul. Jan.-Jul. Jan.4Jul, J a n . - J u l . Jan.-Jul J a n . - J u l . + 2.1 + 2.9 + 0.7 T - O — 0®2 - 2.5 — 0,2 0.8 + 0.8 + 0.6 + 0.1 — 0.6 + + + + 0.5 0.4 £§ + 0.3 + 0.5 + 0.3 - 0.3 - 1.2 - 0.3 + 1.5 n.a. rwa» n.a. n.a^ n.a. - 0.3 - 0.7 - 1.0 + l*.l* + 0.9 3.8 l.o UTF 0.9 + 0.6 0.5 - 2.7 — 0.8 + 0.1* - 1*7 i*.5 0.5 1.9 - 2.0 + 1.8 > 1.1 + 0.6 - 0.6 - 0.1 + 4.4 + 3.9 + 2.7 + 1.0 =%§ Not a v a i l a b l e . Seasonally adjusted data are f o r l a s t Wednesday throughoutj unadjusted data are f o r l a s t Wednesday except in case of June and December c a l l d a t e s , when available. Less than $50 million Hot f o r publication Bank r e s e r v e s . Free reserves of member banks averaged $550 m i l l i o n i n J u l y (preliminary data) compared with # 8 5 m i l l i o n i n June, as shewn i n Table 4 . The increase i n f r e e reserves occurred a t country banks; a t c i t y banks, reserve p o s i t i o n s were about unchanged over t h e month. Average member bank borrowings from t h e Federal Reserve declined t o $110 m i l l i o n and excess reserves rose t o about $650 m i l l i o n . Bates on Federal funds ranged from a low of l / 8 - l / k per cent e a r l y and l a t e in t h e month t o a high of I - 5 / 8 per cent around the michaonth. Free reserves were r e l a t i v e l y high during t h e two weeks ending J u l y 9 , averaging $590 m i l l i o n . They declined temporarily i n mid-July when t h e System reduced i t s holdings of U. S. Government s e c u r i t i e s , but increased t o over $700 m i l l i o n in the week of J u l y 23 when currency inflows and increases in f l o a t provided f u n d s . They dropped again during the l a s t week of t h e month t o $530 m i l l i o n r e f l e c t i n g seasonal declines i n f l o a t and f u r t h e r reductions i n System holdings of U. S. Government s e c u r i ties. Over J u l y , on a monthly average b a s i s , reserves were supplied p r i n c i p a l l y by a $4j0 m i l l i o n increase in System holdings of U. S. Government s e c u r i t i e s and were absorbed primarily by currency and gold outflows, a s shown in Table 5« The reduction in gold stock, on the average, was s t i l l s u b s t a n t i a l , over $200 m i l l i o n , but below t h e average decline of the previous t h r e e months. During the l a t t e r p a r t of J u l y , the gold outflow slowed considerably. Required reserves declined only s l i g h t l y on a monthly average b a s i s in J u l y r e f l e c t i n g t h e carry-over e f f e c t of t h e sharp build-up in deposits i n l a t e June. Between June 30 and J u l y 31# however, required reserves dropped $ 3 6 5 m i l l i o n , r e f l e c t i n g sharp withdrawals from U . S . Government deposits o f f s e t only i n p a r t by growth in other d e p o s i t s . Average System holdings of U. S . Government s e c u r i t i e s were $4%0 m i l l i o n higher i n J u l y t h a n in June, r e f l e c t i n g the carry-over e f f e c t of heavy purchases during mid and l a t e June. Between June 30 and J u l y 31, however, System holdings of U. S. Government s e c u r i t i e s declined $ 9 6 0 m i l l i o n . The System reduced i t s b i l l holdings subs t a n t i a l l y both before and a f t e r t h e J u l y 18 announcement t h a t t h e Federal Open Market Committee "has i n s t r u c t e d t h e manager of t h e Open Market Account t o purchase Government s e c u r i t i e s in addition t o short-term Government Hot f o r p u b l i c a t i o n L.U.3 - 11 - Table It Free Reserves (Excess reserves minus member bank borrowings; based on average of d a i l y f i g u r e s ; in millions of dollars) All member Period Quarterly averages 1956: F i r s t Second Third Fourth - - 310 Ul 230 128 First Second Third Fourth — 108 1958* F i r s t Second 313 508 1957* - • - 1957 $ January February March April May June July August September October November December - » — — m 1*1*0 256 117 126 316 565 June 25 July 2 569 558 615 1*55 705 532 1&8 Aug. 30 6 # TtflT.ll ^ V f c Not f o r publication # 11*7 175 71 113 - 329 1*18 31*1 211* 336 278 338 365 — 88 196 21*1 109 — - 115 11*1 56 105 - 221 373 1*28 320 316 221* 286 276 9 18 - 16 1* - 27 63 365 1*22 la 123 101 300 loll 185 181 289 251* 114 80 • - 1*0 53 253 210 165 1*8 28 26 115 115 123 77 - 172 21*9 21*2 263 367 1*88 1*52 1*00 1*33 389 31*2 228 369 299 280 269 192 210 278 21*1* 336 252 277 25 — 6 18 7 7 12 3 - 11*1* 1 62 1*1* 89 57 53 337 353 1*06 1*59 399 1*08 1*72 77 95 53 13 75 1*1*9 370 591 1*09 563 326 — 1*6 21* 1*2 3 51 7 17 1958* T. 105 31* - ' Country - - 122 32l* 1*93 1*93 51*7 m 516 Reserve City 170 96 157 166 508 383 1*71 2|.66 31*1* 293 133 JanuaryFebruary March April Jfay June July Chicago — - hbk 1958* 9 16 23 New York 71 31 15 50 52 38 - 10 21 2 6 11 12 1 142 50 301 k37 s e c u r i t i e s . " The purchase of $1.1 b i l l i o n of the nev 1-5/8 per cent one year c e r t i f i c a t e on a when-issued basis did not enter the System account u n t i l August 1. Through July 31, b i l l holdings were reduced more than $1.1 b i l l i o n ; note and bond holdings increased almost $200 million, but over half of t h i s l a t t e r amount was exchanged on August 1 for the new c e r t i f i c a t e . » L.l*.3 - 13 - 0 Table 5 Changes i n Member Bank Reserves, with Relevant Factors (Monthly average of d a i l y f i g u r e s ; i n millions of d o l l a r s ) # Item r Jiuly 1958 Jan. - J u l y * Tear ending July 1957 1958 1957 1958 1957 Member bank reserve balances Total # Required reserves 1/ E f f e c t of reduction*"in requirements E f f e c t of deposit change Excess reserves 1/ # + 9 + 11*7 - 811 - 1*06 - 520 + 293 - 20 + 110 - 88 9 - 288 - 61*1 + 358 - 20 + 29 + 110 + 37 -1,1*1*0 + 551 + 78 - 288 - 118 -•1,1*1*0 + 799 + 121 + 358 — 65 Principal f a c t o r s Currency i n c i r c u l a t i o n Gold stock and f o r e i g n accounts Treasury operations Federal reserve f l o a t Other f a c t o r s e E f f e c t of above f a c t o r s on reserves # (signs :indicate <a f f e c t on reserves) - 225 - 211* + 668 + + 226 1*2 26 a + 20 + 25 + 5 + 1*0 -1,1*1*1 + 27 - 501 - 189 + + - 678 30 1*58 82 -1,265 + 159 - 233 - Ill + + - - 1*23 - 121* -1,1*36 + 827 -1,598 + 31*0 + 1*33 + 271 + 626 -1,232 +1,078 - + 1*69 + 52d - 52 3 + 362 +~2HT + 81 + i +1,236 +1,603 - 367 3 -1,1*11* -1,300 - Ill* - 29 +1,867 +2,020 - 153 + 19 - 229 - 375> + 11*6 + u - - - 601 6 +: 229 - 18 - 808 + 179 + 659 - 11*8 - 365 722 119 88 If8 Federal Reserve loans and investments: Total # w U. S. Govt, s e c u r i t i e s Outright Repurchase agreements Acceptances Discounts and advances: To member banks To others # 33 88 1* ~~ 1/ Data f o r J u l y 1908 are preliminary. Hot f o r p u b l i c a t i o n 1*6 L.4«3- • * — lit • Loans and Treatments at A l l Commercial Banks (In b i l l i o n s of dollars) Loans and investments Date # W : 19^8: 1949: I95O: 1951: 1952: # 1953: 1954: 1955: 1956: Dec. Dec. Dec. Dec. Dec. Dec. Dec. Dec. Dec. : Business Seal Secu- estate r i t y Fana Con- All sumer other 31 31 31 31 31 31 31 31 31 116.2 114*2 12Qil 126*6 132*5 l4l*5 145.5 155 *7 160.3 69*2 62*6 67*0 62*0 61*5 63*3 63*4 69*0 61.6 9.0 9.2 10*5 12.4 13.3 14.1 14.7 16.3 16.7 37.9 42.4 42.9 52.2 57.6 64.0 67.4 70.4 82.0 18.2 18.9 17; 1 21.9 25*9 27*9 27*2 26.9 33.2 9.4 10.8 11.5 13.5 14.6 15.7 16.7 18.4 20.8 2.1 2.3 2.6 2.9 2.6 3.2 3.6 4.5 5.0 3.8 1.7 4*8 2.9 3.1 5.8 2.9 7.4 3.4 7.5 9.4 3.9 5.0 1 0 . 9 5.2 10.9 4.5 13.2 2.9 3.1 3.4 4.2 4.5 4.9 5.1 5.6 6.5 Mar. 28 June 30 Sept.26 Dec. 31 158*5 159*3 l6o*7 164.5 58*6 56*6 57*o 58.6 16.6 16.5 16.6 16.3 83.3 86.2 87.2 89.7 34*5 36.1 37*0 38.7 21.2 21.8 22.3 22.5 4.5 4.4 4.1 4.3 4.4 4.3 4.2 4.2 13.4 14.2 14.4 14.6 6.6 6.8 6.7 7.0 J a n ; 30 Feb; 27 Mar. 27 Apr. 24 May 2 9 June 26 July 31 Aug. 28 Sept.25 Oct. 30 Nov. 27 Dec. 31 l6l*6 , 161.I l6l*4 163*8 163*8 164*3 164 a l6ki6 165 i l 166*5 165.9 169.3 57*7 56*8 55*7 57*5 57il 55;5 56*3 56*2 55*9 57*3 56*9 58.2 16^2 16.3 16.5 16.7 16.8 16*8 16.8 16.9 17.1 17.6 17.4 17.9 87.7 87.9 89.1 89.7 89.9 92.0 91.0 91.5 92.2 91.6 91.5 93.2 37 37*8 39«0 39.0 38*9 40*5 39.6 39*9 40*3 39;7 39i6 40.5 22.5 22.5 22.5 22.5 22.5 22.6 22.7 22.8 22^9 22.9 23.0 23.1 3.7 3.7 3.6 3.8 3.8 3.9 3.7 3.8 3.8 3.7 3.6 4.2 4 . 2 14.5 4.2 14.5 4 . 2 14.6 4 . 1 14.9 4 . 1 15.1 4 . 0 15.4 3.9 15.5 3.8 15.6 3.8 15.7 4 . 0 15.8 4 . 0 15.7 4 . 1 15.8 6.8 6.8 6.8 6.9 7.0 7.1 7.1 7.1 7.2 7.1 7.2 7.2 166.2 167*1 169.9 174.0 173.8 178.2 176.3 57.7 58*3 59;6 62*8 63*2 64*7 64.4 17.9 18.2 18.9 19.3 19.4 20.0 20.0 90.5 90.6 91.5 91.9 91.& 93.4 F-9 38.8 38*6 39*2 38*4 38*1 38.7 37.8 23.1 23.2 23.2 23.3 23.5 23.7 2?.? 3.6 3.9 4.2 5.1 4.4 5.6 4.7 4.2 4.4 4.4 4.4 4.4 4.4 4.9 Jan. Feb; Mar. Apr. May June July ¥ u . s . Other Total Govt, secursecup i t i e s loans ities 29p 26p 26p 30p 2% 25p 30e 15.7 7 . 0 15.5 6 . 9 15.4 6.8 15.5 6.9 15.5 7 . 0 15.7 7 . 1 1^.7 7 - 1 - Estimated Uote: Data exclude interbank loans. Total loans are a f t e r and types of loans before deductions f o r valuation reserves. Consumer and "other leans" are partly estimated for a l l dates. Other data are partly estimated on a l l but June December c a l l dates. Monthly data on individual loan items appear t o correspond r e l a t i v e l y v e i l with prel i m i n a r y member bank c a l l report data for June §3, 1 9 5 8 . A l l data for July 30,' 1 9 5 8 , are estimates and subject t o error. Banking Section, Board of Governors, August , 1958 Hot f o r p u b l i c a t i o n s