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L '^ 3 FEDERAL RESERVE B A N K of KANSAS CITY JAN 1 3 19W BUNKING ANp DECEMBER 19b'7 Suromaryo Commercial bank c r e d i t increased subs t a n t i a l l y i n Decembers mainly r e f l e c t i n g expansion i n business and s e c u r i t y loans and increased holdings of U6 S c Government s e c u r i t i e s 0 Demand deposit and currency holdings of businesses and individuals increased l e s s than seasonally but Ue S* Government deposits increased contra— seasonally and time deposits rose s u b s t a n t i a l l y f u r t h e r 0 Net borrowed reserves of member banks continued t o decline* Bank c r e d i t * Total loans and investments a t commercialTaSScs increased b i l l i o n during t h e December r e p o r t i n g p e r i o d , November 28 - December 25, somewhat more than i n December of any other postwar year (see Table 1)„ Loans rose Sic it b i l l i o n , r e f l e c t i n g p r i n c i p a l l y growth i n business and s e c u r i t y loans e Holdings of U„ S 0 Government s e c u r i t i e s increased #900 m i l l i o n , with growth a t c i t y banks probably o f f s e t i n p a r t by the usual seasonal decline a t other banks e Holdings rose s u b s t a n t i a l l y on November 29 and December 2 when banks i n i t i t a l i y acquired $665 million of a new o f f e r i n g of #1*1 b i l l i o n of 3-3/lt per cent 5 year Treasury notes and (>190 million of t h e $6)0 million o f f e r i n g of 3-7/8 per cent Treasury bonds of 197lte Holdings increased f u r t h e r around the middle of the month when businesses were reducing t h e i r holdings i n order t o obtain cash f o r meeting t a x and dividend payments and when weekly Treasury b i l l o f f e r i n g s were increased temporarily by $100 million* Holdings of other s e c u r i t i e s a l s o rose i n December r e f l e c t i n g i n p a r t bank a c q u i s i t i o n s of new Federal National Mortgage Association and Federal Intermediate Credit Bank s e c u r i t i e s « In December 1956, t o t a l c r e d i t a t commercial banks had increased $1.8 b i l l i o n , about a q u a r t e r l e s s than t h i s December, Loan expansion was Ifthe sq&zb# but holdings of UQ S« Government s e c u r i t i e s increased lesso Commercial banks probably took about a l l of the S i b i l l i o n new Treasury t a x a n t i c i p a t i o n b i l l s issued i n mid-December of 1956, but sold s e c u r i t i e s a t other times during the month* Not f o r publication i*U.3 M , Table t 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 ) Item 1 1M6 1956 • 1957 1957 Nov# 28* Nov. 29* June 27# J u l y 1 , Jan» 1> ' w 1M6' Jan» 1* Dec,253/ Dec* 31 Dec*253/ Dec. 31 Dec»253/ Dec. 31 Total loans (excluding interbank) "~ Business Real e s t a t e Security Agricultural Consumer All other + 1*U + 1*5 + 1.0 + 3eU + 3.U + 7«6 + 0,9 + 0.1 + O.U — 0.1 + 0.1 + 0.9 1/ + + - + 2.6 + 0.7 — 0.2 - 0.1 + + + + y +""o.3 + 0.1 + 0.2 + 0.1 + o»U + O.U + o.U + 0.2 + + • + + + 1.9 - 0.9 - 3.0 — o.U + U.2 0.2 0.6 0.2 0.3 1„6 0.7 0.2 0.5 1.3 0.3 U. S. Government s e c u r i t i e s + 0,9 + o.U + 2.2 Other s e c u r i t i e s + 0.2 V + 0.8 1 0 + 1*3 + 2ali + 1.8 + U.o + 5.1 * 3o8 Total loans and investments ( l e s s interbank) End of June t o end of December 195U 1952 1953 1951 Item Total loans (excluding interbank) 2/+ U.U Z / : Ife + 0.1 +1.1 + 0.2 U* S« Government s e c u r i t i e s 1 H # Business Real e s t a t e Security Agricultural Consumer All other + 7.3 Other s e c u r i t i e s • 0.1 + 3.2 + 2.6 + U.9 + + + + + + + + + + + + + + + 0.7 1»2 0.7 0.1 0.1 + o.U y 0.2 0.5 0.8 1.3 0.3 2.6 0.7 0.1 0.3 1.1 0.3 5.5 1*7 0.8 0.3 1.3 0.5 1950 + 2.9 + 7.5 + 2©2 + 5,0 + 1.1 + 0.1 + o»U — 0.1 + 0.3 1/ X i +"b.8 + 0.6 + 5.5 + U.8 + 2.1 + 3.0 - 3.7 + 0.8 + o.U + 0.1 + 0*6 + 1.2 Total loans and investments ( l e s s interbank) + 5.5 + U.9 + 6.6 + 9.5 + 7.2 + 7.7 1 / Less than #50 million* 2 / Level of business loans increased by and r e a l e s t a t e loans decreased by $300 million i n October 1955 t o c o r r e c t c l a s s i f i c a t i o n errors* Most of t h e misc l a s s i f i c a t i o n probably occurred i n 1955# 3/ Data f o r 1957* which are f o r the l a s t Wednesday of December, are not s t r i c t l y comparable with those f o r 1956# or f o r other y e a r s , which are f o r t h e 3 1 s t . of December* Mote* Data f o r December 25* 1957# are preliminary estimates based on data f o r weekly reporting member banks and estimates f o r other banks* Later e s t i mates f o r December 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 t h e United S t a t e s " a v a i l a b l e a t the end of anuary. Not f o r p u b l i c a t i o n ' - 3 Table 1 (continued) Lelic»3 Estimated Changes i n Loans and Investments at All Commercial Banks (In b i l l i o n s of d o l l a r s ) Item End of December t o end of June 1956 1955 1954 1953 1952 + 2®4 + 4*2 + 4<s4 - 0*3 + 0,9 + 1*5 + 1,8 + 0,1 — 0*4 - 0.2 + 0.8 + 0,1 + 2*9 + 1=0 - 0*6 - 0,2 + <X*9 + 2*0 + 0*3 -"0,8 + 1*2 + 0*6 + + + + — 0*5 + 0o5 — o*4 — 0*2 + 1*2 + 0*2 + + + + + U» So Government s e c u r i t i e s — 3*3 - 5*0 - 5*7 + 0*1 • 4*7 - 0*3 Other s e c u r i t i e s + 0,5 - 0*2 + o*5 + 0*9 + 0*1 + 0.7 * o*5 - 1*0 - 0,8 + 0*7 - 3*7 + 1.8 Total loans (excluding interbank Business Real e s t a t e Security Agricultural Consumer All other Total loans and investments ( l e s s interbank) Item 1957 3/ + loll. 1*1 0*5 0*2 0.2 0,1 0*1 0*6 OoU 0*5 0.2 0*8 0*1 Tear ending December 31* 1955 1954 1953 1952 1951 1950 +11 o 6 + 2*9 + 3.4 + 6*4 + 5*4 + 9*3 6,4 2*4 0C6 0.7 2*3 0.9 - 0*3 + 1.7 + 0o9 + 0,2 1/ + 0.6 + + + + + + + + + + + + + + + + 4.0 1*0 0,3 0.5 0*1 0.3 + 4*9 + 2.0 + 0*2 — 0*1 + 1*6 + 0.9 U® S 0 Government s e c u r i t i e s - 7*4 + 5*6 + 0.1 + 1.8 — o*5 - 5*o Other s e c u r i t i e s + 0*4 + 1*6 + 0,5 + 0*8 + 0.9 + 2*2 Total loans (excluding interbank) Business Real e s t a t e Security Agricultural Consumer All other 3/+ 3/+ + + + 0.7 1*0 0*4 1.0 1*5 0.2 2.0 1.1 0,6 o.5 1.9 0.3 Total loans and investments + 6*5 + 9.0 +10*2 + 4*1 + 5*9 + 4*6 ( l e s s interbank) 1 / Less than #50 million* Level of business loans increased by and r e a l e s t a t e loans decreased by ->300 "* million i n October 1955 t o c o r r e c t c l a s s i f i c a t i o n errors* Most Of the misplassific&ticua probably occurred i n 1955® 3 / Data are f o r June 26, 1957* $ Not f o r p u b l i c a t i o n Business loans a t c i t y banks rose $785 m i l l i o n during the f o u r weeks ending December 25# somewhat l e s s than i n the comparable period l a s t year but more than i n any other postwar year* Most of the increase occurred i n the two weeks ending December 18, undoubtedly r e f l e c t i n g mainly borrowing t o meet mid-December t a x paymentso The increase during these two weeks was a l s o somewhat l e s s than l a s t year, although l a r g e corporations were required t o pay 15 per cent of t h e i r current y e a r ' s t a x l i a b i l i t y compared with only 10 per cent l a s t year 0 Over half the December business loan increase a t c i t y banks, as shown i n Table 2 , was i n loans t o s a l e s finance companies, l a r g e l y r e f l e c t i n g usual endof-year borrowing t o r e t i r e open market paper held by nonfinancial corporations* Loans t o food processors and commodity dealers continued t o i n c r e a s e , l e s s than l a s t year but more than i n other recent years# Since J u l y , however, bank borrowing by these two i n d u s t r y groups has been l e s s than usual* Loans t o t r a d e concerns declined as i s usual i n December» Loans t o metals manufacturers, which have been declining r e c e n t l y , rose i n December, and loans t o petroleum and chemical producers and public u t i l i t i e s also increased* During 1957* business loans a t a l l commercial banks increased about $1*5 b i l l i o n compared with $5*5 b i l l i o n i n 1956* Outstanding loans t o seasonal borrowers, i e e 0 , food processors, commodity d e a l e r s , and t r a d e conc e r n s , declined somewhat compared with a $1,2 b i l l i o n r i s e i n 1956a Growth i n loans t o these i n d u s t r i e s had been unusually large in l a t e 1956 and had been followed by unusually large reductions i n e a r l y 1957# Increases i n outstanding loans t o metals manufacturers and petroleum and chemical producers were l e s s than half as l a r g e as i n 1956, but those t o public u t i l i t i e s were about the same* Loans t o s a l e s finance companies increased i n 1957 whereas t h e y had declined i n 1956o Not f o r publication Lolu3 jy wm Table 2 Changes in Commercial and I n d u s t r i a l Loans 1 / (In millions of d o l l a r s ) Business of Borrower 1956 1957 Nov028 Nov,29 Dec.25 Deco26 1 0^7 2/ 1956 1955 19$k 168 + 530 + 922 + U9U + 5ltlt 10lt + 382 + 1*72 + k03 + 597 78 + iho + 182 + llt7 + 297 t9tx +i,o& +1,70% ~ + i , 2 E "+37111 1953 + + + + 1952 620 + 778 355 + 603 16 + 173 991 +1,53>U" Food processors Commodity dealers Trade concerns Total + 97 + 87 -1U7 + 37 Sales finance +k9k + 516 + 97 + 302 + 7U1 + U6 - nk + 576 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 +282 + 94 + 239 - 261 - 226 + 856 + 50 + 939 + 270 - 28U »271 -^Toi + 552 + 109 + 1 + 52 + - 3 - 159 58 + lltl ~ 3k + 36U + 43 + 191 - 62 + 152 - 136 + 12k *" 61 + 221 " lj.8 +108 - 8 8 - 153 + 136 + 17k 9 - k6 * it + 378 - 51 + 3U + 25 + 71 - k9 - 137 + 66 - 6I4 + 35 - 18 + 30 + 108 + 7 + 83 + 22 + 153 + 305 + 161 + + 138 +81U - 29 + 9lt8 + 890 - 28 - 322 Classified Unclassified 1/ I V n + 8 89 +2,858 +2,925 + 875 + 516 +2,683 - 170 3/+ 256 k/+ 25 y + 1 9 1 - k9 Total change +785 + 920 + 568 +2,688 3 / + 3 , l 8 l k/+ 899 5 A 737 +2,63U Prior t o week ending January 11, 1956, :included changes :Ln a g r i c u l t u r a l :Loans# Data are f o r December 2£, 1957c Includes CCC c e r t i f i c a t e s of i n t e r e s t which are estimated t o have declined $200 million# In October 1955s the l e v e l of business loans was increased by f>3l8 million t o c o r r e c t c l a s s i f i c a t i o n errors* No back f i g u r e s were revised and changes f o r t h e July-October period include the revisions* Includes CCC c e r t i f i c a t e s of i n t e r e s t which are estimated t o have increased $385 m i l l i o n . Includes CCC c e r t i f i c a t e s of i n t e r e s t which are estimated t o have increased SltlO million* 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 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 December 2 5, 1957* Not f o r p u b l i c a t i o n # + + « + Last Wednesday i n July t o ].ast Wednesday i n December Lo4»3 Table 2 (continued) Changes i n Commercial and I n d u s t r i a l Loans 1 / (in millions of dollars)" ™* Business of Borrower Last Wednesday i n December t o l a s t Wednesday i n December 1957 2/ 1956 Food processors Commodity dealers Trade concerns Total 8 - 115 + 98 - 25 + 520 + 353 + 349 +1,222 - 60 + 8 + 473 + 421 7 + 176 + 79 + 2U0 - 16h - 114 + 28 + 36 * 5o Sales finance + 183 - 224 +1,293 — 143 - 228 + 327 +1,471 + UbO +3,844 +1,291 +2,593 + uoi - 789 -1,125 + 465 + 94 +1,671 +1,111 + 10 + 404 + 232 + 852 + 291 + 521 + 29 + 78 + 49 + 93 - 113 + 426 + 70 + 603 - 48 + 441 + 715 - 12 + 216 + 411 + 240 - 63 - 99 + 153 + 41 + 103 5 + 112 - 59 + 31 - It8 + 325 + 513 + 238 + 90 + 163 +1,629 - 599 +14,843 - 1U1 3/ + 74 j?/ - 84 +1,948 - 150 +1,030 +4,702 3 / +4,284 4 / - 957 5/ - +1,798 All other - t o t a l "Metals and products T e x t i l e s 5 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 A l l other types of business Classified Unclassified Total change 3/ ~ 4/ ~ 5/ 1955 1954 +4,307 - 684 - 23 4 / - 273 1952 1953 - 120 - 252 + 208 10 Data are f o r December 2£, 1957* Includes CCC c e r t i f i c a t e s of i n t e r e s t which are estimated to have declined $821 million* In October 1955* the l e v e l of business loans was increased by ^318 million t o c o r r e c t c l a s s i f i c a t i o n errors* No back f i g u r e s were r e v i s e d ; most of the m i s c l a s s i f i c a t i o n probably occurred in 1955* Includes CCC c e r t i f i c a t e s of i n t e r e s t which are estimated t o have increased 1410 million c Includes CCC c e r t i f i c a t e s of i n t e r e s t which are estimated to have increased Sit 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 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 nearly 70 per cent of those of a l l commercial banks. Data are preliminary f o r week of December 25>, 1957* Not f o r publication Le4«3 Table 2 (continued) 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 ) ~ Business of Borrower Food processors Commodity dealers Trade concerns Total Sales finance All other - t o t a l Metals and products Textiles 5 apparel and l e a t h e r Petroleum, c o a l , e t c 0 Other manufacturing and mining Public u t i l i t i e s Construction All other types of business Classified Unclassified Total change Last Wednesday i n December t o l a s t Wednesday i n , J u l y 1957 - 43 -1,078 1956 1955 + - + - 402 2 44 167 479 605 395 176 824 1954 •* 500 297 67 ti34 1952 1953 - 740 <* 608 + 192 —I,f56 - 891 - 575 - 138 -1,604 + 86 - 525 + 552 - 189 - 53 - 249 +1,729 + 706 +2,989 +i;ar +1,655 + 131 — 5o6 - 710 + 736 + 395 +1,119 +1,002 + 168 + 263 + 267 + 488 + 248 + 331 + 91 - 75 + 185 - 31 - 52 + 205 + 223 + 1*29 3 + 337 + 39 + 445 + 182 + 386 + 169 — 14 + 38 + 87 + 106 + 67 + 13 + 82 - 167 + 24 - +172 + 208 + 77 + 1 + 25 57 + 739 - 277 +1,382 +1,985 -1,559 + 29 2 / - 279 3 / - 2 9 7 - 473 - 274 - 735 - 101 + 462 +2,014 - 747 - 836 2/+l,103 3/-l,856 l/ Prior t o week ending January 11, 1956# included changes i n a g r i c u l t u r a l loans* 2/ ** Includes CCC c e r t i f i c a t e s of i n t e r e s t which are estimated t o have declined 3620 million© 3/ Includes CCC c e r t i f i c a t e s of i n t e r e s t which are estimated t o have increased $2£> milliono Not f o r publication Loans f o r purchasing and carrying s e c u r i t i e s i n creased in December as i s u s u a l . Over the year, they showed l i t t l e change, compared with a s u b s t a n t i a l decline i n 1956e Real e s t a t e loans rose moderately f u r t h e r , and during the lafit half of 1957, growth in these loans was about the same as i n the comparable period of 1956a Since these loans showed l i t t l e change i n the f i r s t half of 1957 i n c o n t r a s t with a s u b s t a n t i a l r i s e i n the f i r s t half of 1956, growth i n 1957 was l e s s than half t h a t i n 1956* Consumer l o a n s , which had declined in November, probably increased again i n Decembers Over the year, growth i n these loans t o t a l e d $1*3 b i l l i o n , about the same as i n 1956* During 1957a t o t a l c r e d i t a t commercial banks i n creased around $lt b i l l i o n , about the same as i n 1956 but l e s s than i n other recent years* Loan growth of $3*U b i l l i o n was l e s s than half as large as in 1956, r e f l e c t i n g p r i n c i p a l l y the d i f f e r e n c e in business loan behavior during the two years* On the other hand, holdings of U, S e Government s e c u r i t i e s declined l e s s than #1 b i l l i o n , l e s s than a t h i r d as much as i n 1956* Holdings of other s e c u r i t i e s increased $1*3 b i l l i o n compared with a decline i n 1956* Deposits and currency* Preliminary estimates i n d i c a t e t h a t demand deposit and currency holdings of businesses and individuals increased $1*6 b i l l i o n during the December r e porting p e r i o d , November 28-Decerriber 25, about $1*5 b i l l i o n l e s s than the usual seasonal amount. On December 25, the seasonally adjusted money supply was more than one per cent below the l e v e l on December 26 l a s t year* The s u b s t a n t i a l increase i n bank c r e d i t i n December was r e f l e c t e d p r i m a r i l y i n a contra-seasonal buildup of Government balances r a t h e r than i n the usual large r i s e i n the p r i v a t e l y - h e l d money supply* U* S, Government deposits a t commercial banks and Reserve Banks increased S i b i l l i o n during the December r e porting period i n contrast with s u b s t a n t i a l declines i n a l l other recent years* Between December 25 and December 31# 1957# demand deposits adjusted and currency outside banks probably i n creased about $900 m i l l i o n , compared with a # 0 0 million r i s e i n the same period of 1956* Therefore, over the year ending December 31, 1957# the privately-held'money supply declined $1*5 b i l l i o n , or about one per cent* Not f o r publication ** 9 - I»»ko3 Table 3 Estimated Changes i n Deposits and Currency (in b i l l i o n s " o f dollars)* "" Item "I9FT ~"WW ~WWT~ Nov02S* Novo29™ June 27- July 1» «lan<> 1» J an® 1~ Dec„25V Deco 31 DeCo2%/ Deco 31 Decc25 h / Dec, 31 Seasonally adjusted data 1 / Uernand deposits adjusted Currency outside banks Total Unadjusted data 1 / ""IjemsJid deposits adjusted Currency outside banks Total Time deposits - t o t a l 3 / Commercial ™ Mutual savings U0 S,> Government deposits Total Factors a f f e c t i n g deposits and currency SaBK loans and investments other than U0 S 0 Govt© sec Commercial ~* Mutual savings Bank holdings of U6 S 6 Government s e c u r i t i e s : Federal Reserve Commercial Mutual saving and other Gold stock and f o r e i g n deposits a t F@ R* Banks Other f a c t o r s JL 0,3 2,2 *» 2c8 + 0,1 + 0o9 + 0c3 Oi.3 + lo§ -i-o: « 2#7 + lo3 + io5 + Ool TT$ TT& + 3c, 8 + la + 2*2 T-oTS + 0*3 + loO + lo 9 2/ + 5O4 ~+17f (signs i n d i c a t e e f f e c t on deposits and currency) + 1*8 + 2a0 + 0o2 + Ool + 2c8 + led + 1*2 + 1.3 + Oolt + 0.9 2/ + 1*0 + OB 6 + Ooil2/ + 2<9 + l a + 2*2 — o©5 - 061 + 0,7 + Ool + OcU + 0o2 2/ + 9=9 + ho$ + 6.6 T572 + lo2 + 2,3 + 2o5 + 2o7 <• 2o5 » 3o6 TO;i " 3»0 - 0«7 TTZ T-73 ™ 0*9 f 0«9 + 1=9 — Oelj. - 0.7 + oa - 0*6 + 0o8 - o«5 | 1 + 0„3 *» l a 2 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 availaKfe Less than $50 million 0 3 / Total includes Postal Savings# Unadjusted data f o r December 25# ±957* and June 26, 1957, are not e n t i r e l y comparable with data f o r p r i o r years which are f o r June 30 and December 31o Total includes f o r e i g n loans on gold, holdings of bankers' acceptances at the 5/ Federal Reserve, and loans to foreign banksj changes in these items are genera l l y r e l a t i v e l y smallo In addition even i f there were no changes in these items, changes at 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 loans s domestic and f o r e i g n ; i n a d d i t i o n , there are probably some bookkeeping discrepancies among various banking records© Note: Data f o r December 25# 1957 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 December w i l l be Shows!'in the Board's statement, "Assets and L i a b i l i t i e s of All Banks in the United States" available a t the end of January 0 % Not f o r p u b l i c a t i o n L,li,3 - 10 - Table 3 (continued) Estimated Changes i n Deposits and Currency "Tin b i l l i o n s " o f dollarsJ Item Seasonally adjusted data 1 / Demand deposits adjusted Currency outside banks Total Unadjusted data 1 / Demand deposits™*adjusted Currency outside banks Total Time deposits » t o t a l 3 / Commercial Mutual savings U0 S„ Government deposits Total a f f e c t i n g deposits and currency Bank loans and investments other than U. S e Govt. sec0h/ 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 at F . R* Banks Other f a c t o r s t e a r ending December 31; 1955 19ft 1953 1952 1951 ' r 1950 + 3,0 + o ©5 + 3.3 *> Och +"2.9 + 1=7 + Oolt + 2ol + 3o3 + 1.3 + Ii«6 + Lo7 + 1,1 7T3 + 5.5 - 0.2 + 5.3 + + + + + + + + 0.9 + o06 + 1.5 + U»6 + 3.0 + 1.8 — 0*8 + 5.3 + 3.3 + 1.2 + 6.0 + 0.9 + 6.9 + 2o2 +• 1.5 + 0.9 + 0.2 + $.3 + 6*5 2/ . + 6.5 + oc6 + 0.2 + 0.7 — O0I4 * + + + 3toU OcU 3.8 3.1 + 1.8 ~ 0.6 li.l 0.2 3.9 iu9 3o2 1.9 0.3 9.0 + hc3 + 2.8 + 1.7 + lc8 +10.6 TZTf (signs indicate 3 e f f e c t <in depos: .ts and cu:rrency) +1U.5 +12.0 + 2.3 + 7*3 + hc6 + 2.5 + 6*0 + J^oO + 2.0 + 9o3 + 7o2 + 2.1 + 6oli + 2.0 +12.9 TH75 + 1.5 - 8ol • 0*1 + 3.9 + 2o2 +"o3 + 1.8 - 0.5 + + - - 3, 9 + lo9 — 5<«o — 0Q8 + 0.5 - 1.U + Ooh — o®5 • + 5*6 - 0.7 + 0,9 + 1.2* + 0C1 — 0»i|. + oa - 0.2 • o.U — 1*8 - loO — 0.6 + 8 0 it lo2 3»0 o.5 1<>3 - 0.7 — Is8 - 0,5 cl'J..' ^ -I 1 adjusted - -3 • "'l.'AdataA.-are f o r l a s t Wednesday throughout^ unadjusted data 14 /> Seasonally are 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 available. 2 / Less than $50 million® 3 / Total includes Postal Savings. %/ Total includes f o r e i g n loans on gold, holdings of bankers' acceptances a t the Federal Reserve, and loans t o foreign banks; changes i n these items are generally 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 t o t o t a l change which i s "net" because commercial banks exclude a l l i n t e r bank l o a n s , domestic and f o r e i g n ; in a d d i t i o n , t h e r e are probably some bookkeeping discrepancies among various banking records. Not f o r publication Time deposits increased #1,1 b i l l i o n a t a l l banks i n the December reporting period and probably another ShOO million between December 25 and December 319 when i n t e r e s t payments at many banks are credited# Over the year ending December 3-1 j time deposits a t commercial banks increased about 05® 5 b i l l i o n , about 2-1/2 times as much as i n 1956 and s u b s t a n t i a l l y more than i n any other postwar year 0 In e a r l y 1957# when i n t e r e s t r a t e s on time deposits were increased s u b s t a n t i a l l y * growth was exceptionally rapid but i t moderated somewhat t h e r e a f t e r * Deposit growth at mutual savings banks , amounting t o $1*6 b i l l i o n , was s l i g h t l y l e s s than i n the previous ye a r c On balance, during the December r e p o r t i n g p e r i o d , t o t a l deposits and currency increased $3o7 b i l l i o n cons i d e r a b l y more than the $2,8 b i l l i o n increase i n the December reporting period l a s t year (November 29-December 26) e Credit expansion a t commercial and mutual savings banks was l a r g e r t h i s year than l a s t , but Federal Reserve purchases of Uc S„ Government s e c u r i t i e s were smaller* Foreign operations drained r a t h e r than added t o deposits i n December 1957, but changed i n miscellaneous f a c t o r s , e s p e c i a l l y Reserve Bank f l o a t , increased t o t a l deposits more t h i s year than i n the same period l a s t year* The seasonally adjusted annual r a t e of turnover of demand deposits at banks outside f i n a n c i a l centers dropped f u r t h e r i n November t o 22 ©U—the same as i n November a year ago and 5 per cent below the September levelo Turnover had exceeded the 1956 l e v e l by 8 per cent during the f i r s t q u a r t e r of 1957 and by 6 per cent during t h e next two quarters* November turnover i n New York City was 6 per cent above November 1956, but lower than i n other recent months, while i n other f i n a n c i a l centers i t was below a year e a r l i e r * Not f o r publication "» 12 — Table 1* LoUo3 Free Reserves (Excess reserves^nurms member bank borrowings; based on average of d a i l y f i g u r e s ; i n millions of d o l l a r s ) Reserve City Period • ni" member 195U$ December 1955$ December lt59 <m 21*5 - 50 - 161 •* 16 - 83 "» 26 - 338 550 338 1956$ March June September October November December - 1*08 195 213 195 151* 36 - 17U 33 201* 192 211* 91 ~ - 256 ill 93 Ill* 11*0 86 - 298 — 356 « 296 •> 21*6 - 193 - 203 319 305 380 358 393 31*1* 1957$ January February March April May June July August September October November December •» * - 117 126 316 505 1*1*1* 508 383 1*71 1*66 31*1* 293 101 - 1*1 - 123 - 101 - 300 - 101* - 185 - 181 - 289 - 251* - 11*1 m 80 - 106 » ~ - 1*0 53 253 210 165 1*8 28 26 115 115 123 76 - 172 - 21*9 « 21*2 *» 263 - 367 - 1*88 - 1*52 - 1*00 ® 1*33 - 389 - 31*2 - 225 369 299 280 269 192 210 278 21*1* 336 301 252 306 251* 158 - 127 - 365 - 29 1 112 - 192 m - 75 61* 67 95 - 99 - 150 - 323 — 1*18 1*57 371* 375 31*1 Quarterly averages 19*^$ F i r s t Second Third Fourth New York Chicago Country 1956$ First Second Third Fourth » - 310 till 230 128 - 170 - 96 - 157 «• 166 - 11*7 - 175 - 71 - 113 « 329 — 1*18 — 31*1 - 211* 336 278 338 365 1957$ First Second Third Fourth - 108 1*85 1*1*0 21*6 - 88 - 196 » 21*1 - 109 - 115 - 11*1 — 56 - 105 « - 221 373 1*28 318 316 22i* 286 286 - «" - ~ 31*3 287 271 221* 157 186 161 11*6 11*6 369 1*50 278 1957$ Nov. Dec# 1953$ Jan, 27 1* 11 18 25 1 - 325 - 177 — 21*8 - 116 - 67 68 61 32 — 1*1 - 191 - 281 71* 82 68 82 70 81 98 Data f o r second half of December and January are preliminary# Not f o r publication — 13 " LoU»3 Bank r e s e r v e s 0 Net borrowed reserves of a l l merrier banlcs declined f u r t h e r i n December, averaging $100 million compared with §290 million i n November, as shown i n Table he Member bank borrowings from the Federal Reserve declined t o an average l e v e l of $710 million and excess reserves rose t o $610 million* The e f f e c t i v e r a t e on Federal funds remained a t 3 per cent on a l l but one day. Reserve p o s i t i o n s eased s t e a d i l y during l a t e December and i n the week ending January 1 , e m e s s r e serves exceeded borrowings by about $70 m i l l i o n , the f i r s t time banks have had f r e e reserves since midFebruary 1957* In the e a r l y p a r t of t h a t week, borrowings and excess reserves increased but both declined over the end-of-year statement d a t e , as i s usual® Over the month of December, as shown i n Table 5, more reserves were supplied t o banks through System purchases of U0 S» Government s e c u r i t i e s , increases i n Reserve Bank f l o a t , and other f a c t o r s than were absorbed through currency outflows and increases i n required re~ serveSo System holdings of U„ SQ Government s e c u r i t i e s increased $£65 million on the average, with $226 million of the increase i n holdings of s e c u r i t i e s under r e p u r chase contractse System holdings showed l i t t l e n e t change in mid-December when t h e usual increase i n Reserve Bank f l o a t supplied a l a r g e volume of reserves t o banks* During the week ending January 1, however, System holdings rose s u b s t a n t i a l l y as f l o a t declined sharply and absorbed more reserves than were supplied through currency inflows and other market f a c t o r s o Not f o r publication During the l a s t half of 19$1$ net borrowed r e serves declined «91|.10 million compared with a C>l60 million reduction i n the comparable period l a s t year 0 System purchases of Ua S» Government s e c u r i t i e s were smaller on the average t h i s year than l a s t but currency outflow and growth i n required reserves were a l s o smaller* In a d d i t i o n 5 f o r e i g n and Treasury operations added more t o bank reserves t h i s year than l a s t . On the other hand, Reserae Bank f l o a t did not r i s e as much® Not f o r p u b l i c a t i o n L*U*3 — 15 — Table $ Changes in Member Bank Reserves, with Relevant Factors ^ (Monthly average of d a i l y f i g u r e s ; i n millions ox d o l l a r s ) Item "December 1956 1957 July « Pecemb"er January-December 1956 1957 1956 1957 Member bank reserve balances Total Required reserves 1 / Excess r e s e r v e s 1 f + 162 + 366 + 138 + 602 - 115 + 295 + 36U .+ 98 + 30U + 62 + 326 + 112 + 52U + 78 - + 237 + 58 (signs i n d i c a t e e f f e c t on reserves) Principal f a c t o r s E f f e c t of above f a c t o r s on r e s e r v e s - 156 - 510 90 59 127 50 * 85U + 161 - 190 + 3k0 k + 132 - 286 - 613 + 665 + 238 + 726 + 723 +1,213 - 780 + 59 + 7U1 993 W 295 23 +1,8&3 +1,012 + 231 zrrn - 783 + 2k + T + + + 3k + 100 7 + 163 T-IBo - 17 + 30 t + 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 72 13 - 295 + 2 - 81 + 17 + 22 - 12 - 151 + 1? -1,029 - 596 - 577 + 3 + 110 + 317 + 132 - 32 + 3 + 333 - 87 + + + + - 3k - 360 + U96 565 196 156 273 118 -1,239 + + + + + 32 + 2kk Federal Reserve loans and investments: Total 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 ~W 226 25 - 9k + 19l 1 / Data f o r December 1957 are preliminary. Note: Changes are based on data f o r November and December; June and December; and December of each year* Not f o r publication Mto3 - 16 * Table 5 (continued) Changes in 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 . . J . January •- December 1954 19& 1953 1952 1951 1950 *»1J2o0 + 870 +2,919 +1,100 + 973 3/+3,120 - 103 " - 201 + 876 + 224 Member bank reserve balances Total Required reserves Excess reserves 39 + •» 70 1 / - 651 £/-l.-230 109 ~ + 10 - 30 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 f f e c t of above f a c t o r s on reserves « 611 (signs ii idicate e: ' f e e t on ]reserves) w 516 + 218 - 173 -1,355 + + 42 63 397 83 - 290 + 218 V - 26 + 4 - 969 + 55o - 244 — 176 - + 619 - 184 - 113 - 62 -1,333 - 72 47 426 258 32 -1,738 + 122 + 583 + 193 -1,095 - 664 - 913 + 54 +1,967 +3,579 +2,011 + 991 + 566 + 425 +3,064 +2,974 + 90 +2,058 +2,049 - 181 + 124 + 139 - 763 + + 315 570 255 21 - 722 4/+l,239 +1,342 - 330 - 103 - 392 593 160 -195 -1,312 + + + Federal Reserve loans and investments: Total Uo So Govt, s e c u r i t i e s Outright Repurchase agreements Acceptances Discounts and advances: To member banks To others + - + 154 -1,152 - 33 + 936 + 40 + 515 2 / Decrease of f'il e 2 b i l l i o n due t o reduction i n reserve requirements* j / Increase of b i l l i o n due t o increase i n reserve requirements 0 %/ "Treasury operations" and "outright purchases" include f r e e gold t r a n s action which was r e f l e c t e d i n a v500 million reduction i n Treasury cash o f f s e t i n i t s e f f e c t on reserves by a decrease of i d e n t i c a l volume i n Government s e c u r i t y holdings* Note: Changes are based on data f o r Betienibeir @f each year* Not f o r publication + 9 rnmmmtm + 24 - 71 - 17 > L.4.3 Loans arid Investments at All Commercial Banks (In b i l l i b n s ~ o f d o l l a r s J .* Date -19^71 19U8s 1949: 1950: 19518 1952: 1953* 1954: Dec. 31 Dec# 31 Dec, 31 Dec. 31 Dec, 31 Dec. 31 Dec* 31 Dec, 31 Loans and investments 116,2 lilt. 2 120,1 126.6132.5 1U1.5 145.5 155.7 152.U :154.8 l56.lt 160.3 1955: Mar. June Sept, Dec. 30 30 28 31 1956: Jan, Feb, March April May June July Aug. Sept. Oct, Nov* Dec. 25 158,3 29 157.1 28 158.5 25 158.7 I58.it 30 30 159.3 25 158.3 159.8 29 26 160.7 31 I6l.it 28 ; 162.7 164.5 31 1957* J a n . Feb. March April May June July Aug. Sept. Oct. Nov, Dec, 30 27 27 24 29 26 31p 28p 25p 30p 27p 25e 161.6 161.1 I6l.it 163.8 163.8 I6it.3 164,1 164.6 165,1 166,5 165,9 168,3 U, S, Govt, Other Total Business Real Secu- Farm Con- All sumer other estate r i t y secur- secur- loans 2/ J % L ities ities 3.8 2,9 18*3 9*4 2*1 1,7 9,0 69,2 37.9 3 ,1 4.8 10.8 2,9 16*9 2.3 62,6 9.2 42*4 2,6 5.8 3 , 1 3,4 11*5 17,1 10*2 42,9 67.0 4*2 2*9 7.4 21.9 13*5 2.9 62,0 52*2 12,4 2,6 4*5 14.6 7*5 3,4 25,9 57.6 61,5 13,3 4*9 3,9 9.4 15.7 3.2 27,9 64.0 14,1 63,3 10.9 5,1 16.7 3,6 5,0 27.2 67,4 63*4 14.7 10.9 5*6 18,4 5*2 26,9 ; 4.5 16.3 69.0 70,4 71,2 74.8 77,5 82,0 60,9 16.5 16,6 59,2 16,6 58.6 16,6 58,2 57*3 . 16,4 16,5 56,6 16,3 56.2 16,4 57,2 16,6 57.0 16,3 57.5 16,3 58,2 16,3 58.6 80,9 81,2 83.3 83.9 84,7 86,2 85,8 86,3 87*2 87,6 88,2 89,7 32,7 32,9 34,5 34.8 34.8 36*1 35,8 36.4 37.0 37.2 37.8 38.7 - 20.9 21.0 21.2 21,4 21.6 21.8 21,9 22,1 22,3 22,4 22.5 22.5 16,2 16,3 16,5 16.7 16,8 16,8 16*8 16.9 17,1 17.6 17,4 17.6 87,7 87,9 89,1 89,7 89,9 92.0 91.0 91.5 92,2 91,6 91,6 93,0 37.6 37.8 39.0 39.0 38.9 40.5 39.6 39.9 40.3 39.6 39.4 40.3 22,5 22.5 22,5 22.5 22,5 22,6 22,7 22,8 22,9 23,0 23,1 23.2 57,7 56.8 55,7 57*5 52,1 55.5 56,3 56,2 55*9 57,3 56.8 57,7 27,4 28.9 30,5 1/33,2 4.9 4,4. 3,9 4.5 11,2 12,1 12.7 13=2 5*8 6,2 6,6 6^5 4.6 4.5 4.5 4.4 4.5 4.4 4.3 4.0 4.1 4.1 4*0 -4.3 4,4 4,5 4*4 4*3 4,4 4,3 4.2 4.0 4*2 4*0 4,1 4,2 13*2 13,3 13*4 13,7 13*9 14,2 14.3 14.3 14*4 14*4 14*4 14*6 6.5 6,4 6.6 6,6 6.7 6,8 6,7 6,8 6,7 6,8 6,9 7,0 3.7 3.7 3.6 3.8 3.8 3.9 3*7 3*8 3*8 3*7 3*7 4*1 4,2 4,2 4,2 4*1 4*1 4*0 3*9 3*8 3*8 3*8 3,8 3*7 14*5 14.5 14*6 14.9 15*1 15*4 15*5 15*6 15*7 15.8 15*7 15*8 6,8 6,8 6,8 6.9 7.0 7,1 7.1 7.1 7.2 7.2 7.3 7.3 19.0 4 , 1 19.8 4 . 5 20,6 4.2 1/20.8 ' 5.0 17,0 16.8 16.9 16.7 64*2 63,3 62,0 61,6 e - Estimated l / Level of business loans increased by, and r e a l e s t a t e loans decreased by "" million a t the end of October 1955 t o c o r r e c t c l a s s i f i c a t i o n e r r o r s . No back f i g u r e s revised; most of the m i s c l a s s i f i c a t i o n probably occurred during 1955. 2 / Data f o r consumer and " a l l other" loans have been revised beginning i n 1956 i n *" accordance with revised estimates of s h o r t - and intermediate-term consumer c r e d i t . Note* Data exclude interbank l o a n s . Total loans are a f t e r and types of loans before 1 deductions f o r valuation r e s e r v e s . Consumer and "other loans" are p a r t l y estimated f o r a l l datess Other data are p a r t l y estimated on a l l but June and December d a t e s . All data f o r December 25* 1957, are estimates and subject to error. Banking Section# Board of Governors, http://fraser.stlouisfed.org/ Not f o r p u b l i c a t i o n Federal Reserve Bank of St. Louis ' ^ ^ 1 0 , 1 9 5 8
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