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- T t S S n " " MONETARY DEVELOPMENTS IN HAY 1959 Summary* Total credit at commercial banks showed l i t t l e further change in May as continued sharp loan expansion was about o f f s e t by reductions in holdings of U. S. Government s e c u r i t i e s . The seasonally adjusted active money supply increased somewhat further. Member bank reserve positions continued t o t i g h t e n . The prime rate was increased to lt-l/2 per cent and private short-term money market rates rose further. E f f e c t i v e between May 29 and June 12, with the approval of the Board of Governors, the discount rate was raised t o 3-1/2 per cent from 3 per cent at a l l Reserve Banks. Bank c r e d i t . Loans and investments at a l l commercial banks showed l i t t l e further change i n May as shown in Table 1. Loans rose $1.2 b i l l i o n , the largest expansion for t h i s month in the postwar period. Holdings of U. S. Government s e c u r i t i e s were reduced $1 b i l l i o n , more than in any other year since 191*6. Bank holdings of U. S. Government s e c u r i t i e s rose over #500 million in the f i r s t two weeks of the period ending May 13 r e f l e c t i n g bank acquisitions of new Treasury b i l l s on May 11 o f f s e t in part by s a l e s of other i s s u e s . In the subsequent two weeks, holdings declined $1.6 b i l l i o n l a r g e l y as a result of s a l e s . Bank holdings of Governments were probably l i t t l e changed as a result of the May 15 Treasury financing as bank takings of new i s s u e s were about o f f s e t by redemptions of maturing i s s u e s . 1 / Loan expansion in May exceeded that i n any other postwar year at both weekly reporting and country member banks (data available beginning in 191*8). At country banks s e c u r i t i e s showed a record decline, but at c i t y banks reductions were smaller than i n 1956, 1955, and 191*6. Total credit at c i t y banks declined s l i g h t l y i n May 1959 but considerably l e s s than i n any of the past four years. On the other hand, t o t a l credit at country banks increased s l i g h t l y in May but generally l e s s than i n other recent years. l / Treasury financing operations i n May included: (1) the offering of #2.0 b i l l i o n of 3h0-day Treasury b i l l s dated May 11 of which commercial banks subscribed t o #1.9 b i l l i o n ; (2) the o f f e r i n g of #1.5 b i l l i o n of 221-day Treasury b i l l s dated May 15 of which commercial banks subscribed t o #520 million (not payable i n tax and loan accounts)$ (3) the redemption f o r cash of #2.7 b i l l i o n Treasury b i l l s maturing May 15, of which, at the end of April, commercial banks held #550 millionj and (It) the o f f e r i n g of oneyear c e r t i f i c a t e s of indebtedness in exchange f o r the #1.8 b i l l i o n of c e r t i f i c a t e s maturing May 15} commercial banks were a l l o t t e d #370 million of the new issue and they held #380 million of the old i s s u e at the end of April. Not f o r publication -2- L.lt.3 Table 1 Estimated Changes i n loans and Investments at A l l Commercial Banks (In b i l l i o n s of dollars) Last Wednesday in April t o Last Wednesday i n May Item 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 Total loans and investments ( l e s s interbank) 1959 1958 1957 1956 1955 + 1.2 — 0.6 + 0.2 + 0.8 + 1.0 - 0.1 + 0.5 + 0.3 - 0.2 - 0.3 + 0.2 •f 0 . 6 - V0 .,2 + O.li + 0.3 + H.u + 0.2 + ~0.1 + + - 0.2 0.1 o*5 o*5 y 0.1 + 0.1 + + + + + 0.1 0.1 0,2 0.1 . 1 + 0.2 195U St > 1.0 + 0.3 - 0*li - 0.9 - 0.6 + 1.2 - 0.1 + 0.1 + 0*1 - 0.2 - 0.3 + 0.1 + 0.1 — 0*2 y - 0.3 + 0.1 + 1.2 Last Wednesday in April t o Last Wednesday in May 1953 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 1952 1951 1950 0.1 + 0.2 + 0.2 + O.lt - o.lt + 0.6 — 0.2 + 0.1 - 0.1 + 0.1 + 0.1 — 0.1 + 0.1 - -0.1 + 0.2 - 0.1 - 0*3 + 0.1 + 0.2 + 0.2 + 0.1 + 0.1 + 0.3 + 0.1 n* a* n*a» n«a* n*a* + 0.1 n. • a# n«a« n»a» n.a* nea* + 0.1 n* a* «» 0*6 + 0.2 y - + 0.6 + 1.2 — 0*ij. + 0.1 •» 0 . 1 + 0.7 — 0.2 - Other s e c u r i t i e s Total loans and investments ( l e s s interbank) 1/ - 0.7 y ¥ 0.1* y + 1.0 191*9 + 0.1 + 0,9 192*8 y + 0.2 Less than $50 m i l l i o n . Note; Data f o r May 27, 1959> are preliminary estimates based on data reported by a sample of member banks. Revised data w i l l be available at end of June. Not f o r publication #. -3Table 1 L.U.3 # Estimated Changes in Loans and Investments at All Commercial Banks ( I n Millions of dollars) December 31 t o l a s t Wednesday of May 1958 1959 2 / Total loans (excluding interbank) 1956 1957 1955 1951 , + 3.0 - 1.9 + 0.3 + 2.7 + 2.It — 1.2 + + — + + 0.5 1.3 0*5 0.1 1.1 0.6 + + + — 2.1t O.lt 0.2 0.3 0.3 0.1 + 0.2 1/ - 5.5 — 0.1 + 0.6 y + + + + 1.6 0.8 0.5 0.1 0.7 0.2 + + — + + 1.1 1.1 0.2 0.8 0.8 0.5 - 1.2 + 0.3 - 0.1 1/ - 0.3 V U. S. Government s e c u r i t i e s - 3.9 + h»9 - 1.5 - h.3 - It.O - Other s e c u r i t i e s + 0.2 + + 0.5 — 0.3 + o.lt + 0*6 — 0.6 + lt.lt - - - - Business Real e s t a t e Security Agricultural Consumer All other Total loans and investments ( l e s s interbank) 0.7 1.9 1.2 1953 Total loans (excluding Interbank" 1952 0.6 0.3 0.1 o.5 1951 O.lt 1.0 19k9 1950 1.9 + 1.6 — o.U + 0.7 + 0.3 1.0 — 1.8 Tlo 3.© n * a© n»a« n« cio + 0.2 xua* 0.1 + + + + + U. S. Government s e c u r i t i e s 5.0 — 0.8 - Other s e c u r i t i e s 0.3 + o.5 + 0.1 + 0.8 + 0.1 lie 3 + o.i - + 0.9 - 1.1 Total loans and investments ( l e s s interbank) 0* 7 December 31 t o l a s t Wednesday of May Item Business Heal e s t a t e Security Agricultural Consumer All other 1.5 0oX + + - 0.2 1.1 0.3 0.5 o.i O.lt 0.5 o.5 o.i 0.1 - 0.2 + 0.6 1/ ~0.3 3.9 1.9 - 0.9 + 0*6 1 / Less than $50 m i l l i o n . "2/ Structure changes increased t o t a l credit about $61jO million; loans about S370 ~ million; Government s e c u r i t i e s s about #200 million; and other s e c u r i t i e s about $70 m i l l i o n . Not f o r publication Table 1 (continued) Changes i n Loans and Investments and Deposits at City and Country Banks (In millions of dollars) s Last Wednesday in April t o l a s t Wednesday i n May Item * 1959 1958 1957 1956 1955 1951* Weekly reporting banks ® Total loans U. S. Government s e c u r i t i e s Other s e c u r i t i e s Total loans and investments - + 6k6 - 927 + 51*5 ™ 1 - 303 - 316 91* — 6I4. - l*7l* + - Demand deposits adjusted -1,09b. - 265 -1,51*6 Total loans U. S. Government s e c u r i t i e s Other s e c u r i t i e s Total loans and investments + 1*31* - 382 + 6 + 58 38 - 11*8 + lj.3 - 11*3 + 353 63 + 63 + 353 Demand deposits adjusted - —1,120 — 611 558 15b 62 272 636 252 616 + — - I4t5 687 256 1*98 + 128 + 881 + 22 +1,031 -1,387 - 532 + 250 + 31*0 - 133 + 6 + 213 + 17 + 9 + 1*30 - - Country member banks $ w 555 371* + kOh 323 - 97 + 2kh + 27 + 171* - 87 Last Wednesday in April to l a s t Wednesday in May Item 1953 1952 Total loans U."S. Government s e c u r i t i e s Other s e c u r i t i e s Total loans and investments - 155 - 1*71* 52 ""•SSI + 69 + 257 + 159 + 1*85 - Demand deposits adjusted - + - 1951 1950 191*9 50 362 82 1*91* + 117 + 531* 62 + 589 - 311 +1,191* + 83 + 966 + + 180 + 381* + 208 + 186 + 95 + I4.6 + • 21*5 98 + 221* + Hi + 11*0 + IbO 55 + 50 + 135 + + + 123 191*8 %eekly reporting banks $ 28? 539 1*71* 238 106 130 Country member banks w Total loans U. S. Government s e c u r i t i e s Other s e c u r i t i e s Total loans and investments + U2 - 121& + 37 2*5 + 11*7 + 15 + 10 + 172 + 93 + 5 + 12 + 110 Demand deposits adjusted — 105 — 198 + 12ii + 10h 302 63 Note: Data for country banks include interbank loans, but interbank loans outstanding at these banks have generally been l e s s than $100 million although on March 12, 1959, they were close to $200 million. Data for weekly reporting banks include interbank loans prior t o 1952. jJot f o r publication # -5• llo 3 Table 1 (continued) Changes i n Loans and Investments and Deposits at City and Country Banks (In m i l l i o n s of d o l l a r s ) Ehd of December t o l a s t Wednesday i n May 1 / Item 1959 2 / 1958 1957 1956 1955 195k Weekly reporting banks 0 + 1,06? Total loans U, S„ Government s e c u r i t i e s Other s e c u r i t i e s Total loans and investments -.3,176 + 139 - 1,970 + + > 2,590 1,670 1,033 3,113 776 + 111; - 1,683 Demand deposits adjusted - 2,335 - 1,453 - 3,065 + 1,391; 697 + 33 ,+ + + + 849 - 454 - 1,021 + 1,510 - 3,219 273 + 1,283 - 3,606 * 97 - 2,226 - 1,805 + 241 • ^7 - 1,007 - 3,361 - 2,008 - 1,859 + 1,112 320 715 - 1,027 + 60 + 145 + + + + + - 2,136 - 1,897 - 1,211 - 2,012 Country member banks 0 Total loans U. S. Government s e c u r i t i e s Other s e c u r i t i e s Total loans and investments Demand deposits adjusted m 1 ? — w - 1,709 + 218 205 366 w - 2,153 + + 911 717 244 437 282 32l 51; 1,821 Sid of December t o l a s t Wednesday i n May 1 / Item 1953 1952 1951 1950 1949 19l;8 Tjfeekly reporting banks # Total loans U. A. Government s e c u r i t i e s Other s e c u r i t i e s Total loans and investments Demand d e p o s i t s adjusted - hi 326 + - 181 508 432 $57 - 1,484 - 533 683 814 53 + - 282 - 4,192 + 148 + 829 - 3,231 — 1,860 - 2,420 + 139 - 1,013 + 556 5IH + - 232 E70 306 1,990 61 17755 - 1,608 - 720 - ls4ii 1,828 597 109 84 372 + + + + + 582 182 180 26 133 56 889 633 208 * 822 830 93 55 - 1,562 - 912 42 1,173 1,076 - <18 + 1,158 Country member banks 0 Total loans U. S. Government s e c u r i t i e s Other s e c u r i t i e s Total loans and investments Demand d e p o s i t s adjusted 78 1,635 Country bank data are f o r June and December c a l l d a t e s . y Country bank a s s e t s and l i a b i l i t i e s were increased about $350 m i l l i o n i n April as a r e s u l t of i n c l u s i o n of a n a t i o n a l bank i n Hawaii and the s h i f t i n g of s i x n a t i o n a l banks i n Alaska from nonmeiriber banks. (Loans +200; U.S. Govt. +100; other sec.+50; dem.dep.adj. +200; timm +150] Notes Data f o r country banks include interbank l o a n s , but interbank loans outstanding a t these banks have g e n e r a l l y been l e s s than #100 m i l l i o n although on March 12, 1959, they were c l o s e tp $200 m i l l i o n . Data f o r weekly reporting banks include interbank loans p r i o r t o 1952. http://fraser.stlouisfed.org/ Not f Reserve o r p uBank b l i cofaSt. t i oLouis n Federal < < "6 " So f a r t h i s year, t o t a l credit at commercial banks has declined $1.2 b i l l i o n ( a f t e r adjustment f o r bank structure changes), s l i g h t l y more than the average decline since 19h7 but roughly comparable with reductions in 1955 and 1956. The | l n l b i l l i o n reduction i n holdings of U, S. Government s e c u r i t i e s and the $2.6 b i l l i o n increase i n loans have been about the same as in 1955 and 1956 but each has been considerably larger than in most other recent years. Loan growth at country banks in the year t o date has been s l i g h t l y larger than in any other year but that at weekly reporting banks has been somewhat l e s s than in 1955 and 1956. Business loans at c i t y banks increased $li20 million i n May, About half again as much as the increase i n 1955. In a l l other postwar years except 19lt6 and 191*8, when expansion was small, business loans declined i n May. Loans t o metals manufacturers showed record growth for t h i s month following a slowdown i n April. Loans t o public u t i l i t i e s which had been declining e a r l i e r i n the year increased somewhat i n May. Seasonal loan repayments by food processors and commodity dealers continued smaller than i n other years. Loans t o s a l e s finance companies declined as i s usual. During the f i r s t f i v e months of the year, business loans at c i t y banks increased $250 m i l l i o n , much l e s s than i n several other postwar years. Since the end of March, however, they have increased Sit50 million exceeding growth in 1956, 1955, and 191+6the only other postwar years when business loans increased i n t h i s period. During the January-May period, loans t o trade concerns exceeded those of any other year and loans t o t e x t i l e manufactureres were also at near-record l e v e l s . Borrowings by metals processors were substantial but smaller than i n 1956 and 1952. On the other hand seasonal repayments by food processors and commodity dealers were l e s s than usual, while repayments by public u t i l i t i e s exceeded those of any other year. Real e s t a t e loans at a l l commercial banks are estimated t o have increased #300 million i n May, about the same as i n 1955 and probably more than i n any other year. So f a r t h i s year, these loans have increased around $1 b i l l i o n ( a f t e r adjustment f o r bank structure changes), a l s o about the same as i n 1955 and exceeding any other year. Consumer loans at a l l commercial banks are estimated t o have increased $1*00 million further in May, probably more than i n May of any other year. The #1.1 b i l l i o n increase Not f o r publication -7- L,iu3 Table 2 Changes i n Commercial and Industrial Loans 1 / (In millions of dollars) ~~ Last Wednesday of April t o Last Wednesday of May 1959 1958 1957 Food processors Commodity dealers Trade concerns Total 6 - 80 + 1*3 — U3 - 81 — 1*1 — lit - 136 - 96 - 137 + 10 - 223 - 81 - 102 - 107 - 31 + 20 + 51* - 168 - 79 Sales finance - - 133 - 176 - 101 + 1*7 - 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 , e t c Other manufacturing and raining Public u t i l i t i e s Construction All other types of business + 388 + 133 + 90 9 + 135 + 98 + 208 + 53 + 229 + 35 — 96 + - 151* .+ + 3h - 17 87 + + 38 7 -» + *• 10 + 60 - 19 + 6 - + 30 - 21 + 3 + 19 + 22 Classified Unclassified Total change 30 , - 9 + 1*5 + 82 + 29 + 7k 35 7 1956 1955 6 6 1951* + «• 78 25 18 85 + - 101* 121* 23 205 12 - 96 + 21* - 119 + 25 — 6 + 61 1 + 32 + 50 — 16 — 1*1* + 1*3 - 39 + 33 + 3 9 + 28 + + 11 + 103 75 + 62 + 5 1952 1953 - - 116 - 118 7 - 21*1 + 35 29 31* + 17 29 h + 57 31* 1* + 315 + 106 - 358 — 1*7 - 261* - 62 + 197 - 193 3 + " 5 / y - 1 0 1 ,y - 1 3 6 - 271 - 26 - 223 - 1*6 + 1*21 - 1*01* — 267 - 57 .>/+ 96 ,y - 3 2 9 - 297 - 269 1/ Prior t o week ending January 11, 1956, included changes i n agricultural 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 $165 m i l l i o n . 3/ Includes CCC c e r t i f i c a t e s which are estimated t o have declined Notes million. C l a s s i f i e d data are f o r a sample of about 210 banks reporting changes i n t h e i r larger l o a n s , these banks hold over 95 per cent of t o t a l commercial and i n d u s t r i a l loans of a l l weekly reporting banks and about 75 per cent of those of a l l commercial banks. Not for publication L.U.3 Table 2 Changes in Commercial and Industrial Loans 1 / F i r s t Five Months Business of Borrower 1958 1957 - 658 - 278 - 170 ••1,106 - hi3 1959 # # # Food processors Commodity dealers Trade concerns Total — Ii02 - 307 + 261 - as Sales finance - All other - t o t a l Metals and products T e x t i l e s , apparel and leather Petroleum, coal, etc Other manufacturing and mining Public u t i l i t i e s Construction All other types of business + 597 + 669 # Classified Unclassified 1955 1951 1953 1952 + - 327 290 206 HI - 511 - 1*00 + 103 — 808 - 1*71* 327 h3 + Qhh - 556 51il 205 892 - 381 + 350 - 2li2 - 97 - 21U' + 935 + 10 + 6i|0 +1,896 + 966 + 973 + 107 - 198 + 61t9 271 + 3?h +l,01ii +1,018 + 175 - 115 + 78 - 171 + 107 + 89 + 176 + 251 + 180 + + 277 + 50 + 110 8 + 56 75 + 132 + 156 - 336 + 51 + 101 - 250 + 27 + 117 + 162 + 26U + 109 + 11*3 + 11*2 ho + 31 + 66 + 23 + 56 58 + 79 8 53 + + + 60 61 3 b3 - 3h - 63 -2,232 - 11 +1,105 + 518 -1,28% - 3hl 56 2j- 300 3/-2ii2 - 213 — 2U5 - 176 + - 795 100 - 895 - 1$ - 3 + 133 + 115 - ii7li 1956 — 50 - 997 911 + 9 Total change . + 218 -2,1*77 1 , II I 1 M , • , • • ' 1I —i — ; — - 51 - IhO + - 187 62 + 92 + +1,161 3Z+2I8 # , 5 2 6 - 55k - 833 - 581 - 110 -l,52it - 287 1 / Prior to week ending January 11, 1956, included changes in agricultural loans. 5 / 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 $lt70 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 $65 ~ million. Notes C l a s s i f i e d data are for a sample of about 210 banks reporting changes in t h e i r larger loansj these banks hold over 95 per cent of t o t a l commercial and i n dustrial loans of a l l weekly reporting banks and about 75 per cent of those of a l l commercial banks. Not f o r publication so f a r t h i s year has been s l i g h t l y larger than in any other year except 1953* Security loans fluctuated somewhat i n May but declined over the month. So f a r t h i s year, they have declined $500 m i l l i o n , about the same as in 1957 and 1956 and more than i n 1955. Total loan growth t h i s year has been e n t i r e l y at banks outside central reserve c i t i e s . At banks i n New York and Chicago, t o t a l loans at the end of May were s t i l l below the end of year l e v e l and only about it per cent higher than a year ago. The limited loan growth at New York and Chicago banks r e f l e c t s in part the r e l a t i v e unimportance in t h e i r p o r t f o l i o s of consumer and real e s t a t e loans—the two categories which have accounted f o r most of t h i s year's loan expansion. In addition, at banks i n New York, heavy business loan repayments by public u t i l i t i e s and petroleum and chemicals concerns, which have been r e l a t i v e l y concentrated at these banks have more than o f f s e t the expansion they have experienced i n other business loan categories. Deposits and currency. Seasonally adjusted demand deposit and currency holdings of businesses and individuals rose $300 million further i n May. This followed an increase of $2.2 b i l l i o n i n the February-April period and a decline of $900 million i n January. So f a r t h i s year, the money supply has increased at an annual rate of about 2-1/2 per cent. Between the end of January and the end of May, however, i t increased at an annual rate of about 5 per cent. At the end of May 1959, the money supply was Ii per cent above the year-ago l e v e l . Time deposits at commercial banks increased $500 million further in May bringing growth so f a r t h i s year ( a f t e r adjustment for bank structure changes) t o $1.3 b i l l i o n , much l e s s than i n 1958 and 1957, but considerably more than i n most e a r l i e r years. Deposits at mutual savings banks rose # 0 0 million further i n May; so f a r t h i s year, they have increased $700 m i l l i o n , l e s s than l a s t year, but about average for other recent years. U. S. Government deposits increased $700 million i n the f i r s t f i v e months of the year compared with $1.1; b i l l i o n l a s t year. Deposit turnover. The seasonally adjusted annual rate of demand deposit turnover rose s l i g h t l y further at banks outside New York City and other f i n a n c i a l centers i n May. Over April and May the rate averaged 2ij.6 times, almost 10 per cent higher than i n the same two months l a s t year and almost 5 per cent above the third quarter 1957 peak. —10™ L.li.3 Table 3 Estimated Changes i n Deposits and Currency (In b i l l i o n s of dollars) 1959 Apr. 30 May 27 1958 May 1 May 28 Seasonally adjusted data 1 / Demand deposits adjusted Currency outside banks Total . + 0*2 + 0.1 + 0*3 + O.it + 0.1 + 0.5 + l.it + 0.2 + 1*6 + 2.5 - 0.2 + 2.3 + 5*1 + 0.2* + 5.5 + 1.0 — 0.1 + 0.9 Seasonally unadjusted data 1 / Demand deposits adjusted Currency outside banks Total Time deposits Commercial banks Mutual savings banks U. S. Government deposits Total — 1.7 + 0.2 — 1*5 + 0*7 + o.5 + 0*1 + o.5 — 0*3 — l.It + 0*2 - 1.2 + 1*0 + 0*8 + 0*2 + 0*1 — 0*1 •» + + + + + + + + + + 5.0 + 0*3 + 5*3 + 5*9 + it. 3 + 1*7 — o*5 +10*7 + 1.0 - 0.1 + 0.9 + 8.9 + 7.1 + 2.1 + 0*3 +10.1 Item Factors a f f e c t i n g deposits - and currency ~~ Bank loans and investments other than Uo S. Govt. s e c . 3 / 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 foreign deposits at F. R. Banks Other f a c t o r s V ; 1959 1958 J a n . ! U/ Jan. 1 May 2 T May 28 1.7 0*6 5*3 2.2 1*8 o.U 0*7 - 2»k 4*5 0*5 5*o 5.5 it*6 1*0 l.it 2*0 Year Ending May 27 May 28 1959 1958 (signs indicate e f f e c t on deposits and currency) + 1*2 + 1*2 + 0*1 — 0*3 - 0*5 + 0.3 + 3.3 + 3.2 + 0*6 + 0*8 — O.ii + 1*3 +12.3 +Io75 + 2.1 - 0*8 + 0*3 - 1*1 + + + - - it. 3 — Gelt - 3*9 2/ + it*6 - 0*2 + 5*0 — 0*2 + 0.9 +™0 - 0*7 — 0*3 - 1*1 - 2.3 °° 1 * 0 £/ - 0.2 — 0*1 0*7 d.it 0*it 0*1 — 0.1* — 0«lt - 0*1 : - 1*0 = 1*5 + 6*8 + 2.6 + 6«it +~in + 6.1 — 0*8 ~ 0*9 - 2.2 for 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 . Hi Total includes foreign loans on gold, holdings of bankers' acceptances at the Federal Reserve, and loans t o foreign banks; changes i n t h e s e 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 t h e s e items, changes at commercial and mutual savingsbarks would not add t o 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 foreign. In April 1959 as a r e s u l t of the addition of a bank in Hawaii, demand deposits adjusted increased about $100 million and time deposits increased about #100 million. In January 1959 as a r e s u l t of the addition of a l l banks i n Alaska s time deposits at commercial banks increased almost $100 million and demand deposits adjusted i n creased about $100 million. As the r e s u l t of the absorption of a mutual savings bank5 time deposits at commercial banks increased $300 m i l l i o n , and those at mutual savings banks declined $300 m i l l i o n . v Not f o r publication -11- L.U.3 Table 3 (continued) Estimated Changes i n Deposits and Currency (In b i l l i o n s of dollars) 195k 1957 Jan. 1 May 29 1956 1955 Jan. 1— Jan. 1 May 30 May 25 1953 Jan. 1— Jan. 1 May 26 May 27 1952 Jan. 1May 28 Seasonally adjusted data 1 / Demand deposits adjusted Currency outside banks Total - 0.1 + 0.3 + 0.2 + 0.3 + 0.1 + 0.3 + 2.3 + 0.1 + 2.it + 0.6 - 0.3 + 0.3 + 1.1 + 0.3 + l.ii + 2.2 + 0.5 + 2.7 Seasonally unadjusted data 1 / Demand deposits adjusted ~~ Currency outside banks Total Time deposits Commercial Mutual U. S. Government deposits Total - 6.6 — 0.1* - 7.0 + 3.5 + 3.0 + 0*6 + 1.3 - 2.2 -5*7 — 0.9 - 6.6 + 1.2 + 0.6 + 0.8 + 1.8 — 3.6 + + + + ^ + + + + - + + + - it.O 0.5 it . 5 1.8 1.0 0.8 2.1 5.0 — 2.9 - 0.3 - 3.2 + 1.6 + 1.0 + 0.7 + 1.0 — 0.6 1917 Jan. 1 May 28 19h6 Item 3.3 1.1 h» 3 1.2 0.6 0.8 0.8 2.2 3.8 1.3 5.0 2.1 1.3 0.8 0.8 2.1 1950 1951 J an. 1— Jan. 1 May 31 Mav 29 19h9 19U8 Jan. 1 May 25 Jan. 1 May 26 Seasonally adjusted data 1 / Demand deposits adjusifed Currency outside banks Total + 1.0 + 0.5 + 1.5 T & + 0.2 - 0.1 + 0.1 - 1.2 - 0.3 - l.£ Seasonally unadjusted data 1 / Demand deposits adjusted Currency outside banks Total Time deposits Commercial Mutual U. S. Government deposits Total — 2.8 - 0.5 - 3.3 + 0.1 £/ + 0.2 + 1.7 - 1*5 — 0.8 - 0.7 - 1.5 + 0.9 + 0.5 + 0.5 - 0.3 - 0.9 - 3.0 — 1.1 - iiol + 0.7 + 0.3 + o.lt - 1.0 - h»3 Item 1/ 2/ 2/ + 1.9 — h»5 + + + + - 1.1 5.1 0.5 0.3 O.lt 1.9 3.0 2/ — 1.8 — 0.6 — 2.h + 1.2 + 0.7 + O.h — 0.5 - 1.7 Jan. 1May 31 4 + 2.7 - 0.2 + 2.6 + 2.7 +1.9 + 0.7 - 7.1* - 2.1 Seasonally adjusted data are f o r l a s t Wednesday throughout5 unadjusted data are f o r l a s t Wednesday except in case of June and December c a l l dates, when available. Less than $E>0 m i l l i o n . Not a v a i l a b l e . Not f o r publication -12- Bank r e s e r v e s . Net borrowed r e s e r v e s of member banks averaged #310 m i l l i o n in May compared with $260 m i l l i o n i n A p r i l , as shown in Table it. During t h e f i r s t two weeks of June, t h e y rose f u r t h e r t o f>525 m i l l i o n . In May, and a l s o i n e a r l y June, t h e t i g h t e n i n g occurred a t reserve c i t y and country banks. Reserve p o s i t i o n s were about unchanged a t c e n t r a l r e s e r v e c i t y banks. During May, member bank borrowings from the Federal Reserve averaged $770 m i l l i o n and excess r e s e r v e s $U60 m i l l i o n . By the second week of June, however, borrowings had i n c r e a s e d t o $930 m i l l i o n while excess r e s e r v e s had remained about unchanged. Over t h e month, as shown in Table 5, r e s e r v e s were absorbed mainly by i n c r e a s e s i n currency in c i r c u l a t i o n and f u r t h e r gold outflows. The currency d r a i n t o t a l e d Si85 m i l l i o n , somewhat more than i n May l a s t y e a r . So f a r t h i s y e a r , currency inflow has supplied #900 m i l l i o n of r e s e r v e s , #2.% m i l l i o n l e s s than l a s t y e a r . Foreign t r a n s a c t i o n s , however, absorbed $175 m i l l i o n of r e s e r v e s i n May compared with $385 m i l l i o n i n May l a s t y e a r ; i n t h e year t o d a t e , t h e gold d r a i n has been about $550 m i l l i o n l e s s than i n t h e comparable 1958 p e r i o d . During May r e s e r v e s were supplied p r i n c i p a l l y by System purchases of U.S. Government s e c u r i t i e s and d e c l i n e s i n r e q u i r e d r e s e r v e s . System holdings of Government s e c u r i t i e s in c r e a s e d $2o0 million r e f l e c t i n g o u t r i g h t purchases o f f s e t i n p a r t by r e d u c t i o n s i n holdings under repurchase c o n t r a c t s . Required r e s e r v e s declined $125 m i l l i o n as s t e a d y r e d u c t i o n s over most of the month o f f s e t some i n c r e a s e i n mid-May r e f l e c t i n g d e p o s i t growth a s s o c i a t e d with Treasury f i n a n c i n g . I n t e r e s t r a t e s . E f f e c t i v e May 18, t h e prime r a t e — t h e r a t e charged on b u s i n e s s loans t o borrowers with t h e h i g h e s t c r e d i t rating—was increased t o b-l/2 p e r cent from i; per cent a t banks i n New York C i t y . Subsequently, leading banks throughout t h e country a l s o i n c r e a s e d t h e prime r a t e . In September 1958 the r a t e had been increased t o b p e r cent from the r e c e s s i o n low of 3 - 1 / 2 per c e n t . The c u r r e n t r a t e of U-l/2 p e r c e n t , which a l s o p r e v a i l e d i n l a t e 1957 and e a r l y 1958, i s higher than t h a t a t any o t h e r time s i n c e the e a r l y T h i r t i e s . E f f e c t i v e between May 29 and June 12, with the approval of the Board of Governors, t h e discount r a t e was r a i s e d t o 3-1/2 p e r cent from 3 p e r cent a t a l l Reserve Banks. I n t e r e s t r a t e s on p r i v a t e open market paper i n c r e a s e d f u r t h e r i n May and e a r l y June. Rates on lt-6 month prime commercial paper rose t o 3-3/h — 3 - 7 / 8 per cent from 3 - 1 / 2 p e r c e n t ; r a t e s on 3-6 month f i n a n c e company paper rose t o 3 - 3 / 8 — 3-3/1* p e r cent from 3 - 3 / 8 — 3-1/2 p e r c e n t ; and r a t e s on 90-day b a n k e r s ' acceptances rose t o 3 - 1 / b p e r cent from 3-1/8 per c e n t . —13"" 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 j i n millions of d o l l a r s ) All , member New York 311* 508 31*1 25 •" 10 18 - 28 - 1*1* - Reserve City Chicago Country Quarterly averages 1958z First Second Third Fourth 1959: First 1958s January February March April May June July August September October November December 1959: Note: - - 16 1* 1 17 27 63 - 55 - 191* 366 1*22 1*21* 280 - 82 - 25 - 67 - 215 225 - • - 1*6 25 1*2 3 51 7 16 22 79 8 1*3 80 - 25 6 18 7 7 12 It - 122 32k 1*95 193 52*7 m 51*6 383 95 96 20 itl -110* 1 62 1*1* 89 57 56 - 22 - 201 - 198 - 189 - 197 337 353 1*08 1*59 399 1*08 1*71 1*26 378 305 268 268 — 65 - 28 16 - 89 - 52 - 53 - 26 - 122 - 6k — 1*1 - 223 195 226 28h 361 281 202 191* 178 11*6 - - - 292 31*3 331 1*00 310 1*69 1*5 112 153 325 70 29 January February March April May > - 59 1*7 ll*o 258 308 April 29 May 6 13 20 27 June 3 — > - 288 316 255 235 301* 523 - 19 S3 32 87 1*9 1*5 ****** - 3 3 16 32 22 32 1*5 73 15 38 , Data f o r l a s t half of May aid June are preliminary= Not f o r publication -ll*— L.lu3 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 ; in millions of d o l l a r s ) May Jan. - May 1958 1959 1959 Year ending May 1958 1959 1958 Member bank reserve balances Total Required reserves 1 / E f f e c t of reduction i n requirements E f f e c t of deposit change Excess reserves 1 / 81* - 126 la E f f e c t of above factors on reserves - 319 -1,197 357 - 601* — 211* - 261 -1,286 561* - 805 207 —1,14.I4O + 635 + 201 - 311* + 1*3 -1,khO + 100 - (signs : 1 Currency i n c i r c u l a t i o n Gold stock and foreign accounts Treasury operations Federal Reserve f l o a t Other f a c t o r s 171 58 1O Principal f a c t o r s - + 151* + 89 - j f f e c t on reserves - 185 - 11*1* + 881 +1,135 - 692 - 152 - 177 17 2 51 + + 381* 35 23 66 - 358 1*5 561 55 - 909 + 12 - 602 - 187 -1,572 + 20 + 91* - 130 + - 102 218 205 85 - 1*32 — 1*50 - 138 - 551 -2,280 - 706 + 31*7 + - 183 - 61ili +2,635 + 101* + 259 + 290 — - 85 2 + 11 1 - 392 - 331* — 58 11 + - 1*3 321* 367 i* +1,981 +1,91*3 + 38 11 + 898 + 91*3 1*5 + 18 + 91 1 - 11 + 210 + 10 - 591 — 6 + + - Federal Reserve loans arid investments: Total U« S, Gov't. s e c u r i t i e s Outright Repurchase agreements Acceptances Discounts and advances: To member banks To others 1/ + 3UU + 301 Data f o r May 1959 are preliminary. Not f o r publication 280 61*8 17 790 22 L.4.3 Tear or month -15= Deposits and Currency (In b i l l i o n s of dollars) (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) Seasonally adjusted Seasonally Time deposits money supply 1 / adjusted Cur= D. S. money Demand Gov't, Currency Demand supply and deposits Total deposits rency time dep, adjusted Total Commer- Mutual Postal deposits outside (2+3) (7+8+9) c i a l outside savings savings banks 2/ adjusted at com81, banks banks(1+7) (12) Total deposits and currency (5+6+10 +11) End of Dec, 111,1 85.2 87.1 146,3 • 25.9 56.4 172.3 17.7 26,5 35.2 2.3 1947 3.4 108.8 26.1 83.5 144.6 25.3 18,4 85.5 3.6 172.7 1948 35.8 57.5 3.3 109,0 85.8 84.3 145.1 58.6 24.7 36.1 4 . 1 ' 25.4 3.2 19.3 173.9 1949 89.8 180,6 114.3 150.6 20,0 24.5 92.3 : 59.2 36.3 1950 2.9 25.4 3.7 120,1 158.0 25.6 98.2 61.5 20,9 94.5 26.3 2,7 189.9 37.9 1951 3.9 26-, 9 101,5 124 o 7 97.8 22.6 165.4 200.4 65.8 40.7 5.6 2.5 1952 27.5 126,8 102,5 , 170.5 28.1 27.3 70.4 205.7 99.5 4.8 2.4 1953 24.4 43.7 102.8 106.6 26,9 129.7 176.5 46.8 2 , 1 26.3 214.8 ' 5.1 1954 75.3 : 27.9 181,6 105.8 133.2 28.1 27.4 109.9 78.4 48.4 1.9 1955 28.3 j 221.0 4.4 106.7 185.0 134.4 82.2 27.7 , 111.4 1 . 6 50.6 30.0 28.3 226.4 1956 4.5 1 28.1 105.1 133.2 189.3 110.3 89.1 56,1 28.3 31.7 ' 232.3 1957 1.3 4.7 1958 s !i 27.8 135.0 107.2 27.6 11 234.4 6,0 1P7.2 Apr, 30 1.2 194.9 93.6 32.5 59.9 ; 107.6 196.2 105,8 6,1 60,7 135.5 27.9 May 28 1.2 27.8 jI 234.3 94.6 32.7 28,0 106.2 107.4 135.4 196.9 10,0 61,5 1.2 32.8 27.8 June 23 95.5 239.5 28,1 137.6 108.1 109.5 199.9 62.3 1.2 July 30 96.4 4.8 237.2 32.9 27.9 200,0 109.2 28,1 137.3 107.5 28.0 97.0 62,7 1,2 ' 6,2 Aug, 27 33.1 238.7 108.9 108.1 136.7 27.8 199.4 62,7 1.2 97.2 238.1 Sept.24 5.0 27.9 33.3 110.2 201,0 138.1 m . o 27.9 28.0 62,9 1 . 2 240.6 Oct, 29 ' 4.2 97.4 33.4 110,6 28,2 138.8 200,9 111.9 62.1 28,8 1 . 1 96.7 Nov, 26 6.3 243.7 33.5 28.1 202,6 1H.3 139.4 115.5 1.1 63.2 98.3 28,7 34.0 Dec, 31 247.5 4.9 1959s 110,7 27.8 201.9 113,8 1,1 Jan, 28p 3/ 138.5 98.4 63.4 27.6 33.8 245.1 5.3 111,2 139.1 202.8 27.9 111.3 Feb, 25p 1,1 98.7 63.7 5.0 34.0 242.7 27.7 28=1 i 112.2 140.3 110.3 204.4 64.1 1.1 Mar. 25d 242.0 99.5 27.9 34.3 4.4 Apr, 29p 4 / 140,7 112.5 28.2 205.2 112.5 1.1 64.5 99.9 5.1 27.9 245.4 34.3 141.0 112,7 | 28,3 May 27p 206.0 110,8 1.1 100.5 28,1 || 2h!?o0 5.6 65.0 L A L p Preliminary 1 / Seasonally adjusted s e r i e s begins i n 1947 and i s available only for l a s t Wednesday of the month. 2 / At commercials savings 9 and Federal Reserve Banks o 3/ As a result of the addition of a l l banks i n Alaska j, time deposits at commerc i a l banks increased almost $100 m i l l i o n and demand deposits adjusted increased about $100 m i l l i o n . As a r e s u l t of the absorption of a mutual savings banks time deposits at commercial banks increased $300 m i l l i o n and those at mutual savings banks declined $300 m i l l i o n . 4 / As a r e su l t of inclusion of a national bank i n Hawaii s demand deposits Digitized foradjusted FRASER increased about $100 m i l l i o n and time deposits at commercial banks about $100 m i l l i o n . http://fraser.stlouisfed.org/ Not Bank for of #u lication# # • • • • # # # Federal Reserve St.bLouis -16- L.4.3 ILoans and Investments at All Conroercial Banks (In b i l l i o n s of dollars) ' Loans and investments Date 1947 1948 1949 #1950 1951 1952 1953 1954 1955 #1956 1957 1958: e • Dec. Dec. Dec. Dec. Dec. Dec. Dec. Dec. Dec. Dec. Dec. 31 31 31 31 31 31 31 31 31 31 31 Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec. 29 26 26 30 28 23 30 27 24 29 26 31 1959: 1 / Jan. 28p ~ Feb. 25p | Mar* 25p 2 / Apr. 29p May 27p 1/ 2/ 114.2 69.2 62.6 126.6 62.0 116.2 9.0 9.2 67.0 10.2 132.5 141.5 11*5.5 155.7 160.3 164.5 169.3 61.5 63.3 63.it 69.0 13.3 14.1 14.7 16.3 16.7 16.3 17.9 166.2' 57.7 58.3 59.6 62.8 63.1 6b.2 120.1 167.1 169.9 174.0 173.8 178.2 176.2 178.3 177.9 180.1 182.7 I82i.it 183.8 181.9 181.1 183.7 183.8 61.6 58.6 58.2 12.4 57.6 64.0 67.4 70.4 82.0 89.7 93.2 18.9 19.3 19.4 91.5 91.9 91.3 93.9 20.1 66.2 20.5 20.3 20.2 20.6 66.4 20.6 67.5 65.5 20.4 20.4 63.5 62.5 20.9 63.2 52.2 90.5 18.2 19.9 67.7 37.9 42.4 42.9 17.9 61.1 66.1 64.7 Total loans 20.6 20.8 90.6 Business 18.2 18.9 17.1 21.9 25.9 27.9 27.2 26.9 33.2 38.7 40.5 38.8 38.6 Real SecuCone s t a t e r i t y Farm sumer 2.3 2.6 11.5 13.5 2.9 14.6 2.6 15.7 16.7 18.4 3.2 3.6 4.5 20.8 5.0 22.5 23.1 4.3 23.1 3.6 3.9 4.2 5.0 4.2 23.2 23.2 93.4 94.7 97.5 39.2 38.4 38.1 38.9 37.9 38.3 38.7 38.9 39.3 40.4 23.3 23.5 23.7 23.9 24.1 24.3 24.7 95.9 96.0 97.4 99.3 100.5 39.2 39.2 40.2 40.4 40.9 25.7 25.9 26.3 92.2 92.1 92.6 2.1 9.4 10.8 25.0 25.3 25.6 26.6 4.4 5.6 4.5 3.6 3.7 3.6 3.9 4.7 4.2 4.0 3.9 4.4 4.2 1.7 2.9 3.1 2.9 3.4 3.9 5.0 5.2 4.5 4.2 4.1 3.8 4.8 5.8 7.4 7.5 9.4 10.9 10.9 13.2 4.2 4.4 4.4 4.4 4.4 4.6 4.6 4.6 4.7 4.8 4.9 5.0 15.5 15.3 15.2 15.3 15.4 15.5 15.6 15.6 15.6 15.6 15.6 15.8 5.0 5.0 4.8 4.9 4.9 15.9 16.0 16.1 16.5 16.9 14.6 15.7 All other 2.8 3.1 3.4 4.2 4.5 4.9 5.1 5.6 6.5 7.0 7.3 7.2 7.1 7.1 7.2 7.2 7.5 7.4 7.6 7.5 7.7 8.0 8.3 8.1 8.2 8.4 8.7 8.9 Total credit increased over $400 million in January as a r e s u l t of bank structure changes. Total credit increased about $200 million as a r e s u l t of bank structure changes. Note: 9 U. S. Govt, Other secur- securities ities 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 loans" are p a r t l y estimated f o r a l l dates. Other data are partly estimated on a l l but June and December c a l l dates. Data f o r May 27, 1959 are prelimary estimates based on data reported by a sample of member banks. Not f o r publication June 17 s 1959
@FedFRASER