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FEDERAL RESERVE BANK Of KANSAS CITY L'4.3 /CKAJ** OCT 2 3 1958 RESEARCH LIBRARY BANKING AMD MONETARY DEVELOPMENTS IN SEPTEMBER 1958 Summary* Total commercial bank credit declined somewhat i n Septemberas reductions in holdings of U„ S, Government s e c u r i t i e s more than o f f s e t increases i n a l l major loan categories a nd in holdings of other s e c u r i t i e s . Seasonally adjusted demand deposit and currency holdings of businesses and i n d i v i d uals declined. U. S. Government deposits were reduced and time deposits increased much l e s s than i n other recent months. Free reserves of member banks declined. The discount rate was raised t o 2 per cent at a l l Federal Reserve Banks. The prime rate was increased and market i n t e r e s t rates rose further. Bank c r e d i t . Commercial bank credit declined #300 million during September, when a reduction in holdings of U. S. Government s e c u r i t i e s was o f f s e t only i n part by loan growth and a s l i g h t r i s e i n holdings of "other" securities* as shown i n Table 1. The $1.2 b i l l i o n reduction in Governments r e f l e c t e d the net e f f e c t of a s l i g h t l y larger decline at c i t y banks and an i n c r e a s e of $200 million at nonweekly reporting banks, as i s usual i n t h i s month. Over half of the decline at c i t y banks was i n bonds, mainly those bailed f o r redemption on September 15> and not previously exchanged. In September l a s t year, t o t a l c r e d i t increased $600 m i l l i o n . Growth i n holdings of loans and "other" s e c u r i t i e s was about the same as t h i s year but holdings of U. S. Government s e c u r i t i e s declined much l e s s . In September of other recent years, credit has generally increased s u b s t a n t i a l l y . While holdings of U. S. Government s e c u r i t i e s usually have declined^ o f f s e t t i n g in part growth i n loans and other investments., the reduction has generally been much smaller than in 1958. Business loans at a l l commercial banks increased $ij.00 million during September, about the same as l a s t year but somewhat l e s s than i n most other recent years. 2h the two weeks ending September 17 s which included heavy borrowing f o r income tax payments, business loans at c i t y # - L.l|.3 Total loans (excluding interbank.) Business Real e s t a t e Security Agricultural Consumer A l l other 1958: 1957: 1958: 1957: 1957: Aug. 20- Aug. 29- June 26- June 27- Jan. 1 — Jan. 1 Sept. 2b Sept. 25 Sept. 2b Sept. 25 Sept. 2b Sept. 25 + 0.6 + 0.7 - 0.9 + + O.lt + 0.2 + O.lj. + 0.1 1/ 1/ + 0.1 + 0.1 + + + + 0.1 0.6 1.7 0.1 0.2 0.1 - 0.3 V y- 0.2 - o.5 + 2.6 - 0.2 + 0.3 - 0.1 - 0.2 + 0.3 + 0.1 — + + + + 1.8 1.2 0.5 0.6 0.1 0.1 + + + + 1.6 o.L 0.5 0.1; 1.2 0.2 + 0.3 + 0.1^ + 6.7 - 2.7 U. S. Government s e c u r i t i e s - Other s e c u r i t i e s + 0.2 + 0.2 + 0,k + 0.3 + 2.5 + 0.8 - + — 0.2 + 0.8 + 8.7 + 0.6 1.2 0.3 o.5 Change during September: Item • 1956 Total loans (excluding interbank) • 1958: + 0.1 + 0.1 Total loans and investments ( l e s s interbank) # - Table 1 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 e 2 Business Real e s t a t e Security Agricultural Consumer A l l other + 0.9 + 1.3 + + + 0.6 + 0.6 + 0.3 + 2 0.2 0.1 0.1 3/ + 0.2 + 0.2 + + I/ U. S. Government s e c u r i t i e s - Other s e c u r i t i e s 4* 0.2 Total loans and investments ( l e s s interbank) 195b 1955 + 0.9 1951 0.5 4- 0 . 9 + 0.9 0.2 0.1 0.1 2/ + 0.1 - 0.1 4- 0 . 7 4- 0 . 1 0.2 + 0.6 4• + 0.3 4- 0 . 2 4- 0 . 2 4- 0 . 1 + + + 4- ^ 0 . 1 y + 0.8 1952 0.9 0.2 y 1953 + 0.3 4* 1 . 2 - 0,b y + 0.1 + 0.2 $ + 0.2 - O.ii + 0.6 - 0.1 + 0.2 4- 0.1; + 1.7 1 / Less than $50 m i l l i o n . Rote: Data f o r September 2b > 1958, are preliminary estimates based on data reported by a sample of member banks. Revised estimates w i l l be a v a i l able at the end of October. Hot for publication - 3 L.lj.3 Table 1 (continued) Estimated Changes i n Loans and Investments at A l l Commercial Bgnk« IIn b i l l i o n s of d o l l a r s ) Third Quarter Item 1955 1951 1953 1952 1951 + 2.7 — O.l; + 1.0 «H + 0.8 + + + - 0.9 o.5 0.1* 0.1 0.2 0.1 + + + + 1.6 0.8 0.3 0.5 0.6 0.1; 1/ > 0.6 + 0.1 - 1.2 1/ + 0.2 + + + + + — 0.5 0.3 0.1 0.2 0.3 0.2 + + — + + + 0.9 0.1* 0.6 0.2 O.li 0.1 + + + y + 0.1 U. S. Government s e c u r i t i e s + o.it - 1.3 + + 3.6 +, OA + 1.2 Other s e c u r i t i e s + + 0.1 + 0.5 + 0.3 + 0.2 + + + 2.1 + 2.2 Business Real e s t a t e Security Agricultural Consumer All other 1.6 19# Total loans (excluding interbank ) 19# 5.2 + + + 3.8 1.5 1.0 0.3 1.2 7.1 + + 3.6 2.2 0.3 1.3 1.1 + 0.8 - + 0.8 0.3 + 2.6 + 0.8 — 0.6 0.8 0.1 i.i 0.1 - + O.h 1.0 + 0.5 k<>6 + lei 3.9 + 1.5 + + 0.1; + 3.3 + o.Jb. y + 0.3 - + 0.6 0.3 2.9 0.5 + 3.9 — 0.1 + + 1951 1.2 0.2 7.0 Other s e c u r i t i e s 0.2 1952 1.9 y 0.3 - Not f o r publication 1.1 1.1 1.0 - h.6 Less than $50 m i l l i o n . + + + + U. S. Government s e c u r i t i e s 1/ — 0.6 1953 0.1 0.2 + 195h 1.8 + + Total loans and investments ( l e s s interbank) 0.8 0.2 0.3 0.2 January - September Item Business Real e s t a t e Security Agricultural Consumer A l l other 3.9 CO + i.U + 0.2 + Total loans and investments ( l e s s interbank) 0.1 3.8 # + 1.0 + Total loans (excluding interbank; 1956 1.3 K.$ y + 2.3 banks increased $600 m i l l i o n , about $50 m i l l i o n more than i n the comparable period l a s t year. This year, large corporations paid 20 per cent of t h e i r current year's tax l i a b i l i t i e s as compared with 15 per cent l a s t September, but corporate p r o f i t s have been running s u b s t a n t i a l l y lower than in 1957. Banks i n New York C i t y accounted f o r almost 1+5 per cent of the t a x borrowing t h i s year, about the same as in June, but g e n e r a l l y l e s s than i n other recent tax periods. In the week of September 2k» business loans declined $220 million compared with $200 million i n the same week l a s t year. During the four weeks ending September 2k, loans t o food processors, commodity dealers, and trade concerns increased $200 m i l l i o n , accounting f o r overhalf of the growth i n t o t a l business loans. This was about the same as the increase l a s t year, but smaller than usual. Outstanding loans of a l l other industry groups except s a l e s finance companies and t e x t i l e manufacturers increased somewhat, the l a r g e s t being those t o public u t i l i t i e s and " a l l other" business which include loans t o mortgage companies f o r warehousing mortgages. Loans t o s a l e s finance companies declined $90 m i l l i o n , bringing outstanding loans t o these companies about $1 b i l l i o n below a year ago. Loans t o t e x t i l e manufacturers declined s l i g h t l y , signaling the end of the usual seasonal upswing. This year's growth has been the smallest of any year since separate industry data became available i n 1952. Since the end of June, business loans at c i t y banks have declined $210 m i l l i o n , somewhat more than l a s t year. In most postwar years, however, these loans have risen s u b s t a n t i a l l y i n the t h i r d quarter. Between the end of June and September 2h ( i n the 10 D i s t r i c t s reporting t h i s information) the volume of new loans made was only s l i g h t l y l e s s than the volume made i n the comparable period l a s t year while the volume of repayments was about the same. The volume of repayments had r i s e n sharply between the second and t h i r d quarters of 1957, however, with the volume of new loans showing l i t t l e change. Real e s t a t e loans at a l l commercial banks increased further i n September. So f a r t h i s year, these loans have increased around $1.2 b i l l i o n , much more than l a s t year but about the same as the average of other recent years. Consumer - 5 Table 2 L.U.3 Changes i n Commercial and Industrial Loans 1 / (In millions of dollars) ~™ Business of Borrower 1957 1956 + 167 + 36 171 17 62 219 + 196 + 81 + 57 + 33l+ + + + + 1955 19524 1953 1952 Aug.28- Aug. 29- Aug.30- Sept. 1 - Sept. 2- Aug.27- Aug.28Sept. 2k S@pt.25 Sepfc. 26 Sept. 28 Sept. 29 Sepfc. 23 Sept. 21; Food processors Commodity dealers Trade concerns Total + 203 + + + Sales finance - 88 + 181; - 107 All other - t o t a l Metals and products T e x t i l e s , apparel and leather 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 + 2 h9 + 40 + 27 - h3 - 12 + 33 Classified Unclassified Total change 1/ 128 113 62 303 + 139 + 107 + 73 + 319 + 197 + 3U + Lj.9 + 280 + 176 + 114; + 50 + 370 - 126 - - 17U + 1 ia + 318 + 16 + 231 + 5 - 28 - 12b + 56 U + 128 + 6 - 1*8 + 62 + 16 + 227 + 75 + 17 + Hi + 9 + 3 39 + 7 + 18 + 23 + 73 + 22 + + + 20 + 57 - 15 + 20 + 50 + 26 + + 11 3 5 + - 2 1 + 18 + 50 + 3 + 70 + + 27 + 38 + 60 + + 366 h + U30 - us + 575 - Uo + U07 + 82 + 195 + 22 + 161 - 17 + 639 + 35 + 362 + 381; + 535 + ti-89 + 217 + lltU + 671 — 3 33 . —«• 20 9h —— 23 + 26 Prior to week ending January 11, 1956, included changes i n agricultural loans, 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 larger 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. Not f o r publication # # 1958 - L.lt.3 6 - Table 2 (continued) Changes i n Commercial and Industrial Loans 1 / (In millions of dollars) Changes from l a s t Wednesday of June t o l a s t Wednesday of September 1958 1957 1956 1955 195U 1953 Business of Borrower 1952 Food processors Commodity dealers Trade concerns Total + 155 + 15U + l ~3Io + + + + 162 181 h9 392 + 211 + 123 + Ihh + 330 + 208 + 235 + 55 + 122 + 596 53 hM; + 219 + 81 + 35 03^ Sales finance - 15U - 93 - 17h + 112 - Ui2 - 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, coal, etc. Other manufacturing and mining Public u t i l i t i e s Construction All other types of business - 288 - 286 + 556 + 672 ? 19 + 62 r~22? r-20H 23 3b + 93 + 315 + 181 + + 55 - + 6 - 59 + 60 23 3k 15 + 155 + 66 + 81 + 93 - 11 + 63 - + 155 63 + 136 + - 132 - 75 - 207 Classified Unclassified Total change % 11 - 410 - - 20 28 + + + 223 - 362 96 38 2 - 10li + 37 + 320 + 286 + 15 21 53 + 73 53 35 + 6U + 115 •f 13 + 31 - 77 + + 4+ 9 + 22 55 85 + 115 + 13 - Iii3 + 977 +1,237, - 79 - 120 2/- 78 3/- 790 + 300 + 6 + 751* + 73 - 130 + 857 y + U 5 9 3/- 869 + 306 + 827 Prior t o week ending January 11, 1956, included changes i n agricultural loans. 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 data are estimated t o have declined $300 m i l l i o n . 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 data are estimated to have declined million. Note: 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 loans; these banks hold over 90 per cent of t o t a l commercial and industrial loans of a l l weekly reporting banks and nearly 70 per cent of those of a l l commercial banks. Not f o r publication loans increased moderately in September. They have shown l i t t l e change so far t h i s year compared with an average growth of $1 b i l l i o n in other recent years. Agricultural loans increased somewhat in September r e f l e c t i n g increases in CCC loans. Securit y loans fluctuated somewhat but showed l i t t l e o v e r - a l l change, remaining a t r e l a t i v e l y low l e v e l s . Deposits and currency. Preliminary estimates indicate that seasonally adjusted demand deposit and currency holdings of businesses and individuals declined $400 m i l l i o n in September, following a reduction of $200 m i l l i o n in August. At the end of September, the money supply was a l i t t l e over 2 per cent above i t s year-ago l e v e l . In the eight months since January, the annual rate of growth has been almost 5 - 1 / 2 per cent. During August and September the unadjusted money supply increased $300 m i l l i o n , or $600 m i l l i o n l e s s than might be expected seasonally, as shown in Table 3- However, t h i s had followed an increase in July of $ 2 . 1 b i l l i o n more than seasonal. Time deposits a t commercial banks rose only $500 m i l l i o n , much l e s s than in other recent months, and U. S. Government deposits were unchanged. Commercial bank credit increased $1.8 b i l l i o n over the two months but foreign operations, a small reduction in Federal Reserve System holdings of U. S. Government s e c u r i t i e s , and changes in miscellaneous f a c t o r s drained d e p o s i t s . Demand deposits adjusted before seasonal correction increased $700 m i l l i o n in September r e f l e c t i n g a substantial growth of $1 b i l l i o n outside weekly reporting banks and a decline of $300 m i l l i o n at weekly reporting banks. U. S. Government deposits at commercial and Federal Reserve Banks declined $1.2 b i l l i o n in September, somewhat more than usual. Growth in time deposits at a l l commercial banks, which had shown a record increase of $6.2 b i l l i o n during the f i r s t seven months of the year, or an average of $900 m i l l i o n per month, slackened in August and September. During the l a t t e r month, time deposits increased only $100 m i l l i o n as some further growth of about $150 m i l l i o n at nonweekly reporting banks o f f s e t a decline of $50 m i l l i o n at weekly reporting banks. Mot for publication - 8 - L.h.3 Table 3 Estimated Changes in Deposits and Currency (In b i l l i o n s of d o l l a r s ) Item Seasonally adjusted data l / Demand deposits adjusted Currency outside banks Total - 0.2 - 0.2 - 0.4 - 0.6 - 0.2 - 0.8 - 0.5 - 0.1 - 0.6 - 1.8 - 0.3 - 2,1 + 3.9 - 0.2 + 3.7 Seasonally unadjusted data l / Demand deposits adjusted Currency outside banks Total Time deposits Commercial banks Mutual savings banks U. S. Government deposits Total + 0.7 2/ + 0.7 + 0.3 + 0.1 + 0.2 - 1.2 - 0.2 + 0.4 2/ + 0.4 + 0.6 + 0.4 + 0.2 - 0.4 + 0.5 + + + + + + + + -1.1 + Factors a f f e c t i n g deposits and currency Bank loans and investments other than U. S. Govt. sec. J/ Commercial Mutual savings Bank holdings of U. S. , Government s e c u r i t i e s : Federal Reserve Commerc i a l Mutual savings 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 2/ 3/ I 0.1 0.2 0.3 0.9 0.5 0.4 0.2 1.4 2/ -1.1 +1.0 + 0.7 + 0.3 + 0.3 + 0.2 2.1 0.3 2.4 8.2 + 6.7 + 1.6 40.4 + 6.2 - 0.5 2/ - 0.5 + + + 5.9 0.5 6.4 5-5 4.5 1.2 2/ - 1.0 (signs indicate e f f e c t or1 deposits1 and curi•ency) + 0.9 + 0^8 + 0.2 + 0.9 + 0.9 + 0.2 + 1.2 + 1.0 + 0.4 + 1.6 + 1.5 + 0.4 + 3.9 + 2.0 + 2.3 + 4.6 + 3.4 + 1.7 - 1.5 - 0.4 - 1.2 - 0.5 - 0.2 - 0.3 + + + - 0.6 - 0.2 - 0.4 + + + - - - 0.3 + 0.7 + 0.1 2/ 2/ 2/ 0.9 0.1 0.8 0.1 - 0.4 - 0.3 2/ 2/ - 0.8 7.2 O.o 6.7 0.1 - 1.9 - 3.0 4.8 1.8 2.7 0.3 + 0.6 - 1.4 for l a s t Wednesday except in case of June and December c a l l dates, vhen a v a i l a b l e . Less than $50 m i l l i o n . Total includes f o r e i g n loans on gold, holdings of bankers 1 acceptances a t the Federal Reserve, and loans t o foreign banks; changes in these itmes are generally r e l a t i v e l y small. In addition even i f there were no changes in 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 interbank loans domestic and foreign. @Note: Data for September 24, 1958, are preliminary estimates based on data reported by a sample of member banks. Revised estimates w i l l be available at the end of October. Not for publication i 1958 1957 1958 1958 1957 1957 Aug. 28- Aug. 29- July 31- Aug. 1- Jan. 1- Jan. 1Sept. 24 Sept. 25 Sept. 24 Sept. 25 Sept. 24 Sept. 25 - 9 L.u.3 Table 3 (continued) Estimated Changes i n Deposits and Currency (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 September 1956 1955 1951 Seasonally adjusted data 1 / Demand deposits adjusted"" Currency outside bante Total + 0.3 2/ „ + 0,3 + 2.8 + 0.3 + 3.1 + 2.1* - o.5 + 1.9 + + + 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 - 0.7 - 2.3 + 2.1* + 1.3 + 1.1* 2/ + + + + + - 1*.5 0.9 5*k 2.9 1.7 1.1* 1.6 0.9 £/ 1.3 1.2 2.1* 1*,0 2.7 1.1* 0.1* 2.0 1952 1953 1951 1.1 o.5 1.6 + + + 3.1 0.9 z*.o + 3.3 + 0.9 + 4.2 3.8 2/ — 3.8 + 3.3 + 2.1 + 1.1* + 1.2 + 0.7 + + + + + + 1.8 0.3 1.5 3.0 1.9 1.3 2.8 1*.2 + + + + + 0.3 2/ 0.3 1.3 0.9 0.6 2.2 3.2 End of December t o end of September Item i95o 191*9 191*8 191*7 191*6 « Seasonally adjusted data l / Demand deposits adjusted Currency outside banks Total + l*.i - 0.2 + 3.9 - Seasonally unadjusted data 1 / Demand deposits adjusted ~~ Currency outside banks Total Time deposits Commercial banks Mutual savings banks U. S. Government deposits Total + + + + + + + - 2.1* - 1.2 - 3.6 + 0.9 + 0.3 + 0.7 + 1.3 - 1.5 2.2 0.9 1.3 0.1* 0.1 0.6 0.7 2.5 0.2 0.1* 0.6 - 1.1 0.3 1.2* + + + + + — 3.2 0.8 i*.o 0.9 0.5 0.6 2.2 1.0 4" 0 . 8 0.1* + 0.1* + 2.1 + 1.3 + 0.7 0.8 4- 1 . 7 mm 2.3 n.a. n.a. n« b.* H • 21# n.a. + + + + + - 5.5 2/ 5.6 1*.5 3.2 1.1 15.7 5.6 n . a . Not a v a i l a b l e . 1 / Seasonally adjusted data are f o r l a s t Wednesday throughout; 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. _2/ Less than $5>0 million. Not f o r publication - 10 - L.4.3 On balance, t o t a l deposits and currency declined $200 m i l l i o n in September. Deductions in t o t a l c r e d i t a t commercial banks. Federal Beserve System s a l e s of U. S. Government s e c u r i t i e s , and f o r e i g n operations absorbed more funds than were supp l i e d through c r e d i t growth a t mutual savings banks, increases in Reserve Bank f l o a t , and other miscellaneous f a c t o r s . The s e a s o n a l l y adjusted annual rate of turnover of demand d e p o s i t s a t banks outside New York and other f i n a n c i a l centers averaged 23.2 times in the t h i r d quarter, s l i g h t l y above the 2 3 . 0 average of the second quarter. Turnover i s now only about two per cent below the third quarter 1957 peak. At banks in New York City, turnover declined in the t h i r d quarter t o a l e v e l of 5 2 . 7 t i m e s . This was below the second quarter rate of 5 6 . 9 , but 3 per cent above the t h i r d quarter of 1957. Bank r e s e r v e s . Free reserves of member banks averaged $95 m i l l i o n in September compared with $380 m i l l i o n August as shown in Table 4 . During the e a r l i e r summer and spring months, f r e e reserves had been averaging $500 m i l l i o n . Reserves t i g h t ened a t a l l c l a s s e s of banks in September but p r i n c i p a l l y in reserve c i t i e s . Borrowings rose t o an average l e v e l of $475 m i l l i o n , higher than a t any time since l a s t December. Excess reserves dropped t o $570 m i l l i o n , lower than a t any time s i n c e e a r l y 1958. Free reserves had dropped sharply in l a t e August and e a r l y September t o about the $100 m i l l i o n l e v e l and subsequently showed l i t t l e further change on balances. They increased somewhat a f t e r mid-September when the usual r i s e in Reserve Bank f l o a t provided reserves but they declined again t o below $100 m i l l i o n in l a t e September and e a r l y October. The e f f e c t i v e r a t e on Federal funds was generally 1 - 3 / 4 per cent e a r l y in September, rose t o 2 per cent on September 12 when the discount r a t e increase in New York was announced, and then f l u c t u a t e d during the r e s t of the month w i t h i n a range of 1 - 1 / 8 t o 2 per cent. Over September, on a monthly average b a s i s , reserves were absorbed p r i n c i p a l l y by reductions in System holdings of U. S. Government s e c u r i t i e s ($360 m i l l i o n ) , f o r e i g n t r a n s a c t i o n s r e f l e c t i n g gold s a l e s and increases in f o r e i g n d e p o s i t s a t the Reserve Banks ($225 m i l l i o n ) , and currency outflow, ($75 m i l l i o n ) . Reserves were supplied l a r g e l y through reductions in required r e s e r v e s ($90 m i l l i o n ) , increases in Reserve Bank f l o a t ($130 m i l l i o n ) , and a reduction in Treasury d e p o s i t s a t the Not f o r p u b l i c a t i o n - 11 - L.lt.3 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 ; i n m i l l i o n s of dollars) All member Quarterly averages 1056: Rrafc Second Third Fourth 1927: 1958: 1957: 1958: 1958: Note: New York 310 till 230 128 Chicago 170 96 157 11*7 175 71 113 88 109 115 lip. 56 105 9 16 166 First Second Third Fourth 108 1*85 First Second Third 313 31*1 28 June July August September October November December 5o8 383 U71 1*66 3hh 293 133 185 181 289 251* lit! 80 105 115 115 123 77 January February March April May June July August September 122 32it 1*93 1*93 547 1*6 25 516 383 16 302 86 33 82 120 103 96 12 Aug. 27 Sept. 3 10 17 21* Oct. 1 1*1*0 265 508 U8b 95 7h 160 61 Data f o r October are preliminary. Note f o r publication 196 2l*l 18 2h 1*2 3 51 7 22 78 1* 1 1*8 28 26 6 18 7 7 12 it 1 1 11* 12 6 5 Reserve City 329 Country 31*1 336 278 338 365 221 373 316 1*18 211 221* 320 286 276 27 63 365 1*22 1*28 55 1*21* 1*88 1*52 1*00 1*33 389 31*2 228 210 278 21*1* 336 301 252 277 11*1* 1 62 1*1* 89 57 56 22 201 337 353 1*06 1*59 399 35 11*2 200 21*5 181 196 1*08 1*71 &26 377 369 309 1*25 iS 239 -12 - L.li.3 Reserve Banks ($105> m i l l i o n . Free reserves declined $290 m i l l i o n . The reduction i n required reserves r e f l e c t e d a decline i n TJ. S. Government deposits and a l e s s than seasonal r i s e i n demand deposits adjusted. Usually, in September, required reserves show a considerable increase. Currency i n c i r c u l a t i o n a l s o rose somewhat l e s s than seasonally i n September. In July and August growth had been r e l a t i v e l y s u b s t a n t i a l . I n t e r e s t r a t e s . By September 23* the discount rate had been raised t o 2 p e r c e n t from 1 - 3 A per cent at a l l Federal Reserve Banks. The f i r s t increase had been e f f e c t i v e on August 1$ at the Federal Reserve Bank of San Francisco. On September 12, the prime rate—the rate charged on business loans t o borrowers with the highest c r e d i t rating—was increased t o li per cent from 3 - 1 / 2 per cent at banks i n New York City. This followed immediately the announcement of the increase i n the discount rate at the Federal Reserve Bank of New York. Subsequently, leading banks throughout the country also increased the prime r a t e . In April 1958, the prime rate had been reduced t o 3 - 1 / 2 per cent. I n t e r e s t rates on private open market paper increased further i n September and early October. Rates on L-6 month commercial paper rose from 2-£/8 per cent t o 3 - l A per cent, on 3-6 month finance paper from 1 - 7 / 8 per cent t o 2 - 7 / 8 per cent, and on 90-day bankers' acceptances from 2 - 1 / 8 per cent t o 2-3/b per cent. - 13 - Table 5 L.U.3 Changes i n Member Bank Reserves, with Relevant Factors (Monthly average of d a i l y figures; in millions of dollars) September Item 1958 July - September January-September 1957 1958 1957 1958 1957 Member bank reserve balances Total -155 + 122 - 175 — 26 - 995 - 579 Required reserves Effect of reduction i n requirements E f f e c t of deposit change Excess reserves - 91 + 135 - 120 - 5i - 989 - Ui*9 - 91 + 135 - 13 - 120 + — 6U Principal factors Currency i n circulation Gold stock and foreign accounts Treasury operations Federal Reserve f l o a t Other factors E f f e c t of above factors on reserves - 55 51 25 -l,W) + U51 - 6 - hh9 - 130 (signs indicate ef f e e t on reserves) + 632 7k - 108 - 303 - 2Ul - 223 + 105 + 132 + - 59ii + 19 + + 6 + 21 - - 22 k2 - 28 - 19 + 158 - 15 23 81* - it53 - 18 - 1+2 - 798 - 3h9 -1,811 + 602 + 163 + 621 + 321 815 -1,182 + 179 + 173 + 6 + 301 +""3!?3 - 52 - 111. +1,069 -l,WiO - Ik + 590 -1,809 + 88 - 227 + - 679 17 I486 206 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 Not f o r publication - 139 - h k + 22b - 17 + 1 + 331 - h9 - 17 + 2 +I,ii36 - 367 - 2J4. - 23i+ - 6 -1,196 — 2hh - 30 .+• 3 0 0 - 12 — lit — Deposits and Currency (In b i l l i o n s of dollars) leer or month (1) (2) (3) Seasonally adjusted money supply V Total (2+3) End of Dec.: 19h7 1948 1949 1950 1951 1952 1953 1954 1955 1956 108.8 109.0 Ilk 120 12b 126.8 129.7 133.2 134.4 105.8 106.7 1957 s June 26 July 31 Aug. 28 Sept,25 Oct. 30 Not. 2? Dec. 31 135.2 136.0 131.7 133.9 134.2 134.0 133.2 107.3 108.0 106.8 106.2 106.5 105.9 105.1 1958; Jan. 29 Feb. 26 Mar. 26 Apr. 30 May 28 June 25 July 3Qp Aug. 27p Sept.2ltp 132.2 133.1 134.0 135.0 135.5 135.4 137.5 137.3 136.9 104.7 105.5 106.it 107.2 107.6 107.U 109.5 109.2 109.0 p 111.1 (4) Seasonally adjusted money Demand Cursupply and deposits rency time dep. adjusted outside at c o a ' l . banks banks (1+7) 85, 83, 84, 89< 94, 97. 99, 102, 25.9 25.3 21*.7 24.5 25.6 26.9 27.3 26.9 27.lt 27.7 27.9 28.0 27.9 27.7 27.7 28.1 28.1 27.5 27.6 27.6 27.8 27.9 28.0 28.0 28.1 27.9 146.3 144.6 145.1 150.6 158 165 170 176.5 181.6 (5) (6) (7) (11) (12) +11) 87.1 85.5 56.4 57.5 92.3 98.2 101.5 102.5 59.2 61.5 85.8 106.6 58.6 65.8 70.4 75.3 78.4 35.2 35.8 36 36 37 40 43 17.7 18.4 19.3 48.4 28.1 46.8 189, 190, 189, 189, 189, 189, 189« 105.6 106.6 105 105 107 107 110 89.1 55.0 56.1 188.8 107.6 105.6 104.6 107.2 105.8 105.7 108.1 107.5 108.2 90.9 92.5 93.6 94.6 95.6 96.4 97.0 97.3 89.8 56.6 199.7 (10) Total U. S. Curdeposits Demand Gov't, and rency deposits Gommer= Total Mutual deposits outside currency Postal adjusted (7+8+9) c i a l savings savings banks (5+6+10 n 185.0 200.0 (9) Time deposits 109.9 111.4 190.7 192.8 194.9 196.2 197.0 199.8 (8) 82.2 86.4 86.7 87.1 87.7 88.1 87.6 50.6 54.0 54.4 54.7 55.1 55.5 57.6 58.8 59.9 60.7 61.6 62.3 62.7 62.8 20.0 20.9 22.6 24.4 26.3 30.0 3.4 3.3 3.2 2.9 2.7 2.5 2.4 2.1 1.9 1.6 30.9 30.9 31.0 31.2 31.3 31.3 31.7 1.5 1.4 1.4 1.4 1.4 31.9 32.1 32.4 32.5 32.7 32.8 32.9 33.1 33.3 2.3 3.6 4.1 3.7 3.9 5.6 4.8 5.1 4.4 4.5 26, ,1 25,>4 25,.4 26, .3 27,,5 2 8 , ,1 27,,9 28.3 28.3 172,,3 172,,7 173-.9 180,,6 189.,9 200..4 205.,7 214.8 221.0 226.4 224.9 225.2 224.9 225.4 1.3 1.3 4, 4, 27.8 27.8 27.8 27.8 27.8 4« 28,,3 232.3 1.3 1.3 1.3 2.9 4.2 27.3 27.4 27.4 228.1 1.2 1.2 1.2 1.2 1.2 1.2 5.2 4.2 4.9 3- 6.4 6.0 6.1 10.2 4.8 6.2 5.0 Preliminary 1 / Seasonally adjusted s e r i e s begins i n 1947 and i s available http://fraser.stlouisfed.org/ y At Savings, ancSFederal Red#cve Banks. • Federal Reserve Bankeommercial, of St. Louis 26, .5 only f o r l a s t ¥<fe^iesday of t^e month. # 28,,5 27.6 27.8 27.8 27.8 28.0 28.0 227.0 227.0 227.7 230.9 234.4 234.3 239.3 237.1 238.7 238.5 L.4«3 ~ 15 Loans and Investments at All Commercial Banks IIn b i l l i o n s of dollars) Loans and investments Date # u. s . Other Total Govt, secur- loans securities ities Business Real Secu- Farm Conestate r i t y sumer All other 1947 r 1918: 191*9: 1950: # 1951: 1952: 1953: 1954: 1955: 1956: Dec. Dec. Dec. Dec. Dec. Dec. Dec. Dec. Dec. Dec. 31 31 31 31 31 31 31 31 31 31 116.2 114.2 120.1 126.6 132.5 141.5 145.5 155.7 160.3 164.5 69.2 62.6 67.0 62.0 61.5 63.3 63.4 69.0 61.6 58.6 9.0 9.2 10.2 12.4 13.3 14.1 14.7 16.3 16.7 16.3 37.9 42.4 42.9 52.2 57.6 64.0 67.4 70.4 82.0 89.7 18.2 18.9 17.1 21.9 25.9 27.9 27.2 26.9 33.2 38.7 9.4 10.8 11.5 13.5 14.6 15.7 16.7 18.4 20.8 22.5 2.1 2.3 2.6 2.9 2.6 3.2 3.6 4.5 5.0 4.3 1.7 2.9 3.1 2.9 3.4 3.9 5.0 5.2 4.5 4.2 3.8 4.8 5.8 7.4 7.5 9.4 10.9 10.9 13.2 14.6 2.9 3.1 3.4 4.2 4.5 4.9 5.1 5.6 6.5 7.0 * 1957: Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec. 30 27 27 24 29 26 31 28 25 30 27 31 161.6 161.1 161.4 I63.8 163.8 164.3 164.1 164.6 165.1 166.5 165.9 169.3 57.7 56.8 87.7 87.9 89.1 89.7 89.9 92.0 91.0 91.5 92.2 91.6 91.5 93.2 37.6 37.8 39.0 39.0 38.9 40.5 39.6 39.9 40.3 39.7 39.6 40.5 22.5 22.5 22.5 22.5 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 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 14.6 4.2 4.1 14.9 15.1 4.1 4.0 15.4 3.9 15.5 3.8 15.6 3.8 15.7 15.8 4.0 4.0 ! 15.7 15.8 4.1 6.8 6.8 6.8 6.9 7.0 7.1 7.1 7.1 7.2 7.1 7.2 7.2 Jan. Feb. Mar. Apr. May June July Aug. Sept. 29 26 26 30 28 25 30p 27P 2iip 166.2 167.1 169.9 174.0 173.8 178.2 176.2 178.3 178.0 57.7 58.3 59.6 62.8 63.1 64.6 64.1 66.1 64.9 17.9 18.2 18.9 19.3 19.4 20.0 19.9 20.2 20.4 90.5 90.6 91.5 91.9 91.3 93.6 92.2 I 92 a \ 92.7 38.8 38.6 39.2 38.4 38.1 38.8 37.9 38.3 38.7 23.1 ; 3 . 6 23.2 3.9 23.2 4.2 23.3 5.1 23.5 4.4 23.7 5.4 23.9 4.5 24.1 3.7 24.3 3.7 S • 1958: # 55.7 57.5 57.1 55.5 56.3 56.2 55.9 22.5 4.2 4.4 4.4 4.4 4.4 4.6 4.6 4.6 4.7 15.7 : 7.0 6.9 15.5 6.9 15.4 7.0 15.5 7.1 15.5 7.2 15.7 7.3 15.7 15.8 7.3 15.9 7.3 $ p - Preliminary Note: Data exclude interbank loans. Total loans are a f t e r and types of loans before deductions for 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 September 24, 1958 are preliminary estimates based on data reported by a sample of member banks. Data f o r 1958 have been revised in accordance with June 23, 1958 c a l l report data. Banking Section, Board of Governors, October 20, 1958
@FedFRASER