View original document

The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.

F o r Release on D e l i v e r y
S a t u r d a y , O c t o b e r 4 , 1969
2 : 0 0 p . m . E . D. T .




UNITED STATES MONETARY POLICY I N

1969

An A s s e s s m e n t
A Paper

Presented
By

Andrew F . Brimmer
Member
Board of Governors of the
F e d e r a l Reserve System

At

the

S i x t e e n t h A n n u a l B a n k e r s 1 Forum
Georgetown U n i v e r s i t y
W a s h i n g t o n , D.C.

October 4,

1969

UNITED STATES MONETARY POLICY I N 1969
An A s s e s s m e n t
by
Andrew F.

Brimmer*

Any t h o r o u g h a s s e s s m e n t o f

c u r r e n t monetary p o l i c y

U n i t e d S t a t e s n e c e s s a r i l y m u s t be p o s t p o n e d a t
i s over.

However,

restraint,
financial
made o f

it

is

after

least

until

t h e passage o f n i n e months o f

possible

to

sketch the p r i n c i p a l

f l o w s have b e e n a f f e c t e d ,

the c o n t r i b u t i o n of monetary p o l i c y

in

the

the
year

substantial

ways i n

and a t e n t a t i v e

in

which

appraisal

the f i g h t

c a n be

against

inflation.
It
policy

is

abundantly

clear

i n 1969 has b e e n f a r more t a x i n g

year began.

The n a t i o n a l

intense.

Paralleling

the e x t r a

strength

much s t r o n g e r
At

biggest

these developments

i n t h e economy - -

t h e same t i m e ,
or d e f i c i t

task of

stabilization

t h a n was a n t i c i p a t e d

and i n f l a t i o n a r y

however,

position

anti-inflationary

--

credit

t h a n e x p e c t e d as t h e y e a r

by t h e s u r p l u s

the

economy has e x p a n d e d more r a p i d l y ,

have b e e n u s e d more f u l l y ,

its

by now t h a t

pressures
and p a r t l y

the

resources

h a v e b e e n more
stimulated

demands h a v e a l s o

by

been

began.

Federal

fiscal

policy

i n the Federal budget)

impact

as

i n the f i r s t

half

of

(as

measured

registered
the

calendar

^Member, B o a r d o f G o v e r n o r s o f t h e F e d e r a l R e s e r v e S y s t e m .
I am
i n d e b t e d t o s e v e r a l members o f t h e B o a r d ' s s t a f f f o r a s s i s t a n c e i n
t h e p r e p a r a t i o n o f t h e s e r e m a r k s - - p a r t i c u l a r l y t o M e s s r s . J o s e p h Burns
and F r e d e r i c k M. S t r u b l e .




-2year.

Since mid-year,

the

fiscal

policy

s t a b i l i z a t i o n p o l i c y has b e e n w a n n i n g .
Federal budget
i n calendar

( o n t h e NIA b a s i s )

1969 - -

amounted t o $ 1 2 . 5 b i l l i o n

It

quarter,

may show a s u r p l u s

Moreover,

the t h i r d

assignment

since mid-year.

of

t h e s u r p l u s may d i s a p p e a r
Thus,

Govern-

completely

as c a l e n d a r y e a r 1969 has

i n the face o f p e r s i s t e n t

On b a l a n c e ,

the

inflation.

has become much more

d u r i n g t h e summer m o n t h s ,

institutions.

at

there

commercial

As t h e summer

t h e F e d e r a l R e s e r v e became l e s s - a n d - l e s s w i l l i n g

progressed,

to provide

the

s o u g h t b y t h e b a n k s t o accommodate c o n t i n u i n g s t r o n g demands

loans.

As more o f

c a p i t a l markets,
stantially.
the a b i l i t y




billion.

has c a r r i e d an i n c r e a s i n g p r o p o r t i o n o f

banks and a t n o n b a n k s a v i n g s

for

In

i n t h e c l o s i n g t h r e e months

was c o n s i d e r a b l e w e a k e n i n g i n t h e g r o w t h o f c r e d i t

reserves

it

$9.6

quarter,

--

it

The i m p a c t o f m o n e t a r y r e s t r a i n t
evident

when

and

of next year.

monetary p o l i c y

billion

i n 1968

given the p r o j e c t e d p a t t e r n of Federal

and e x p e n d i t u r e s ,

stabilization

$9-1/2

$5.2 b i l l i o n

t h e s u r p l u s was a t an a n n u a l r a t e o f

by t h e s e c o n d q u a r t e r
unfolded,

of

the

at a seasonally adjusted annual r a t e .

may n o t r i s e much above $8 b i l l i o n

ment r e c e i p t s

of

while

i n t h e second q u a r t e r ,

may h a v e s h r u n k t o $ 7 - 1 / 2 b i l l i o n i n

t h i s year.

national

For i n s t a n c e ,

compared w i t h a d e f i c i t

t h e p e a k i n n e t r e v e n u e was s e t

the f i r s t

component o f

this

both short-

demand f o u n d i t s

and l o n g - t e r m i n t e r e s t

The a t t r a c t i v e n e s s
of

savings

way i n t o

of

institutions

rates

these market y i e l d s
(including

t h e money and
rose

greatly

subreduced

commercial banks)

to

-3bid

for

supply

funds.
funds

to

In turn,

these

the mortgage

institutions

able

to

market.

Among c o m m e r c i a l b a n k s ,
noticeable

became l e s s

i m p a c t on t h e l a r g e s t

monetary r e s t r a i n t
banks - -

has had i t s

and e s p e c i a l l y

on

those

w h i c h had depended so h e a v i l y on l a r g e d e n o m i n a t i o n n e g o t i a b l e
ficates

of

deposits

these i n s t i t u t i o n s
t i o n in deposits
branches.
pone f o r

(CD's)

However, w h i l e

this

source of

t h e need t o m o d i f y

Moreover,

since mid-year,

t o moderate

their

i m p a c t o n some s e c t o r s o f

on s m a l l

appears

the

lending p o l i c i e s

the

pace o f

that

too

post-

face

in

the impact o f monetary
and t h e y

attri-

them t o

in

of

London

t h e y h a v e had t o make s u c h a d j u s t m e n t

While monetary r e s t r a i n t

it

for

allowed

certi-

a dozen

through t h e i r

funds

has e v e n r e a c h e d t h e m e d i u m - s i z e d b a n k s ,

tion),

About

were a b l e t o compensate p a r t i a l l y

monetary r e s t r a i n t ,

necessary

funds.

by d r a w i n g i n E u r o - d o l l a r s

a while

months.

as a s o u r c e o f

most

of

recent

policy

are f i n d i n g

it

lending.
has o b v i o u s l y

t h e economy

had a

differential

( s u c h as r e s i d e n t i a l

the e f f e c t s have n o t

fallen

construc-

disproportionately

firms.
T h i s assessment o f monetary p o l i c y

against

the

background

o f e c o n o m i c d e v e l o p m e n t s d u r i n g 1969 has c o n v i n c e d me t h a t

the

course

one.

Thus,

the

policy

I
of

f o l l o w e d by t h e m o n e t a r y a u t h o r i t i e s

personally
credit

despite

restraint.

the




see no need a t

this

time f o r

Given the o u t l o o k

fragmentary

signs

that

is

the

correct

any r e l a x a t i o n

for

the r a t e

continued
of

in

inflation

growth of

output

present

-is

- 4 -

s l o w i n g somewhat - -

I

think

the task o f monetary p o l i c y

we m u s t k e e p a s t e a d y c o u r s e and see t h e a s s i g n m e n t

Economic Performance

So f a r

clear:

through.

1969

i n 1969,

pace c o n s i d e r a b l y
the year.

in

is

t h e A m e r i c a n economy has e x p a n d e d a t

greater

t h a n was a n t i c i p a t e d

J u s t how much g r e a t e r

strength

at

the beginning

t h e economy has

timates

Staff

F e b r u a r y w i t h my own r e c e n t

items are

o f gross n a t i o n a l product

shown i n T a b l e 1 ( a t t a c h e d ) .

GNP f i g u r e s
for

for

(It

1968 w e r e r e v i s e d u p w a r d ,

1969 w e r e a d j u s t e d

only

for

reveals

a shortfall

o n l y business

and F e d e r a l r e c e i p t s
below the February

for

that
projec-

actual
of

activity

sector

residential

as

not

well.

construction,

a r e e s t i m a t e d t o be a t

or

projections.
t o t h e economy as a w h o l e ,

it

a p p e a r s now

(in current

an i n c r e a s e o f $ 6 5 - 6 7 b i l l i o n

b i l l i o n more t h a n was p r o j e c t e d a t




levels

almost every

1969 may amount t o $ 9 3 1 - 9 3 3 b i l l i o n

t h i s would represent

related

and t h e F e b r u a r y

p r o j e c t e d and

fixed investment,

and e x p e n d i t u r e s

With respect
GNP i n

(GNP) and

s h o u l d be n o t e d

in projected

t h e economy as a w h o l e b u t

Currently,

The two

accordingly.)

Even a c u r s o r y e x a m i n a t i o n o f
developments

Federal

es-

d e r i v e d on t h e b a s i s o f n i n e months e x p e r i e n c e .

sets of projections

tions

last

of

exhibited

c a n be s e e n b y a c o m p a r i s o n o f 1969 p r o j e c t i o n s made b y t h e
Reserve Board's

a

the b e g i n n i n g o f

--

that

dollars);
or about

this

year.

$7
In

-51 9 6 8 , GNP r o s e b y $72 b i l l i o n .
more t h a n 7 - 1 / 2 p e r

cent,

Thus,

i n 1969,

compared w i t h j u s t

GNP may e x p a n d b y

over

9 per cent

last

year.
The h o u s e h o l d s e c t o r
strength

this

year.

Personal

t h a n was a n t i c i p a t e d ,
ingly.

Last

February,

by $ 4 9 - 5 1 b i l l i o n
However,
the

first

three

personal

i s now p r o j e c t e d

taxes

of

cent

disposable

personal

rise

personal

jected

at

total

Thus,

early

despite

the impact

for

of

all

this

year.

during
If

1969.
this

6-1/2

per c e n t

in

1968 t o

The b u s i n e s s
underpinning
Last

to

February,




year

1969,
higher

household

i n February

the increase

is

on b a l a n c e ,

before

the gain i n

r a t e would d e c l i n e

about 5 - 1 / 2 per c e n t

profits

income

t h e 10 p e r

I n t h e case o f

this

has a l s o

t h e economy t h a n was a n t i c i p a t e d
corporate

1969

taxes

to

pro-

pattern actually materializes,

and t h e s a v i n g s

sector,

during

$4 b i l l i o n

e x p a n s i o n i n h o u s e h o l d s p e n d i n g w o u l d r u n ahead o f
income,

rise

taxes.

tax

of

calendar

Currently,

to

income i n

and a f t e r

consumption o u t l a y s were p r o j e c t e d

$40-42 b i l l i o n .

posable personal

after

personal

i n c o m e may r u n a p p r o x i m a t e l y

by $ 3 3 - 3 5 b i l l i o n

accord-

i n wages and s a l a r i e s

year,

be i n e f f e c t

t h a n t h e amount p r o j e c t e d
spending,

gains

t o advance by $58-60 b i l l i o n ,

surtax which w i l l

rapidly

have r e s p o n d e d

and by $ 3 3 - 3 5 b i l l i o n

this

may c l i m b b y $ 3 7 - 3 9 b i l l i o n .

extra

income i n 1969 was p r o j e c t e d

the s i z a b l e

quarters

source of

i n c o m e has r i s e n much more

and consumer p u r c h a s e s

before

reflecting

has b e e n a l e a d i n g

the

dis-

from

year.
p r o v i d e d more

earlier

in

i n 1969 w e r e

the

year.

projected

-6t o r e m a i n u n c h a n g e d o r t o d e c l i n e b y p e r h a p s $3 b i l l i o n ;
appears t h a t

an i n c r e a s e o f

i n v e n t o r i e s were p r e v i o u s l y

$ 2 - 3 b i l l i o n may be r e c o r d e d .
projected

i n 1969 t h a n t h e y d i d i n 1 9 6 8 .
suggests

projected

year.

Business

In contrast,

fixed

t o r i s e by $8-10 b i l l i o n

increase anticipated

in

s e r v i c e s by these u n i t s

a t $10-12

last

outlays

d u r i n g 1969,

about

Last February,
it

non-military

currently
same

source

of

goods

g a i n was

and

from

the

projected

t h e F e d e r a l Government

is

p u r c h a s e s o f goods and s e r v i c e s down t o
In fact,

appears t h a t

still
the

t h e a c t u a l r i s e may be e v e n

a n i n c r e a s e o f $3 b i l l i o n was p r o j e c t e d

for

t h e g a i n may be as s m a l l as $2
increase

is

evident

smaller.

1969,

but

billion.

i n both defense

and

outlays.

Residential

construction

b o t h shown c o n s i d e r a b l y

less

a gain of

and t h e f o r e i g n t r a d e s e c t o r s

strength

I n the case o f r e s i d e n t i a l




the

Purchases o f

the y e a r - t o - y e a r

d u r i n g 1969,

The s h a r p l y r e d u c e d r a t e o f

suggests

are

i n 1969 may r i s e b y $ 1 2 - 1 4 b i l l i o n

projected earlier.

began.

which

billion.

expected to hold i t s

currently

than that

investment

less

projection

governments have been a n o t h e r

February

In contrast,

level

the l a t e s t

greater

added s p e n d i n g above t h a t e x p e c t e d e a r l i e r .

while

Business

February.

S t a t e and l o c a l

1968 l e v e l ,

it

t o r i s e by $1-3 b i l l i o n

an i n c r e a s e p e r h a p s $2 b i l l i o n

occurred l a s t

now

than a n t i c i p a t e d

construction,

a b o u t $200 m i l l i o n

i n 1969,

as t h e

the c u r r e n t

substantially

have

year
projection
below

the

-7rise

of

$1-2 b i l l i o n

revision clearly
at

savings

projected

reflects

projected

The e x c e s s o f e x p o r t s

t o r i s e by $ 1 - 2 b i l l i o n ,

t h o u g h no i n c r e a s e w i l l
net

occur

--

to

the associated

spurt

R e s o u r c e Use and

the a c c e l e r a t i o n

it

i s now q u i t e

r e a l GNP ( e x p r e s s e d

real output
demand f o r

r o s e by a l m o s t

strain,

For example,

i n constant

our

and

t h e GNP i m p l i c i t

the

of 4-1/2

-

and t h e r e

1958 d o l l a r s )
in

1969.

However,

real
has

As shown
is
Last

February,

cent.

t h e more

price

price deflator

indexes)

annual i n c r e a s e

5 per

In

1968,

vigorous

in

which

r o s e even more
(the

r o s e by 4 per

most

cent

1969 was e x p e c t e d

The l a t e s t

cent.

level

in

currently

p u t e x t r a p r e s s u r e o n a n economy

be s m a l l e r , about 3 - 3 - 1 / 2 per c e n t .




as

c a n be

the growth i n

and t h e g e n e r a l p r i c e

the v a r i o u s

As o f F e b r u a r y ,

a rise

in

inflation

t h a n was a n t i c i p a t e d .

5 per c e n t .

goods and s e r v i c e s

b r o a d l y based o f

suggests

that

a d v a n c e was e x p e c t e d t o be 2 - 3 p e r

was a l r e a d y u n d e r

1968.

clear

t o r i s e by 2 - 1 / 2 - 3 - 1 / 3 per c e n t

the year-to-year

rapidly.

i n our domestic

1969

now l o o k s

T h i s poor p e r f o r m a n c e

than expected e a r l i e r ,

b e e n c o n s i d e r a b l y more i n f l a t i o n

projected

it

in

imports.

has a l s o b e e n g r e a t e r

Table 2,

imports

funds

Prices

Moreover,
output

in

o f mortgage

over
but

downward

and a m o d e s t d e t e r i o r a t i o n

t r a d e p o s i t i o n may come a b o u t .

traced d i r e c t l y

The s h a r p

the reduced a v a i l a b i l i t y

institutions.

was e a r l i e r

i n February.

projection,

in
to

however,

-8The c i v i l i a n
was a n t i c i p a t e d
rapidly.

it

f o r c e has e x p a n d e d more r a p i d l y

the c i v i l i a n

labor

1969 b y 1 . 3 - 1 . 8 m i l l i o n ;

rate

for

1969 was o r i g i n a l l y

as t h o u g h f o r

more p r e s s u r e on i n d u s t r i a l

capacity

I n 1968 , t h e c a p a c i t y u t i l i z a t i o n

1969 t o a r a n g e o f
may be l i t t l e ,
factory

if

1.7 - 2.2 m i l l i o n .
projected
for

The

at 3.8 - 4.0
1968.

per

Currently,

has e x e r t e d

considerably

t h a n was i n i t i a l l y

rate

i n manufacturing

anticipated.
averaged

The F e b r u a r y p r o j e c t i o n showed a d e c l i n e

8 1 - 1 / 2 - 8 2 - 1 / 2 per c e n t .
any,

year-to-year

decline

Now, h o w e v e r ,

during

there

i n the r a t e o f use

of

capacity.
I n summary,

conclusion:

all

of

the n a t i o n ' s

these i n d i c a t o r s

Financial
more v i g o r o u s
3,




total

to

the

as t h e y e a r g o t u n d e r

Anticipated

developments

expansion of
funds

point

same

r e s o u r c e s h a v e b e e n much more f u l l y

i n 1969 t h a n was a n t i c i p a t e d

F i n a n e i a 1 Developments:

Table

projection

cent.

The more r a p i d g r o w t h o f o u t p u t

so f a r

the l a t e s t

to

1969 as a w h o l e t h e u n e m p l o y m e n t r a t e may

r e m a i n i n t h e range o f 3.5 - 3.8 per

about 84.5 per cent.

less

f o r c e was p r o j e c t e d

c o m p a r e d w i t h an a v e r a g e o f 3 . 6 p e r c e n t

looks

than

and t h e u n e m p l o y m e n t r a t e has c l i m b e d

t h e a d v a n c e o v e r 1968 t o a r a n g e o f

unemployment
cent,

earlier,

Last February,

increase during
lifted

labor

utilized

way.

and A c t u a l

i n 1969 h a v e g e n e r a l l y p a r a l l e l e d

t h e economy d e s c r i b e d a b o v e .

r a i s e d by a l l

As shown

b o r r o w i n g groups over the

first

the
in

-9s i x months o f

this

more t h a n h a l f

of

during

the c u r r e n t

y e a r amounted t o $ 4 3 . 7 b i l l i o n .
the t o t a l

funds w h i c h were e x p e c t e d

y e a r on t h e b a s i s

of

d u r i n g t h e J a n u a r y - June p e r i o d

$87.4 b i l l i o n ,

ran about

10 t o

I n the

for

the comparatively

s i x months e n d i n g l a s t

r a i s e d $37 b i l l i o n

in credit

adjusted annual r a t e .
on t h e b a s i s o f
borrowing

Mortgage
first

half

of

This

in

during

line with

June,

borrowings

firms

and f o r e i g n e r s

the

was

indebtedness.

t h e c o n s u m e r and b u s i n e s s

markets,

o r $74 b i l l i o n a t a

sectors

seasonally

T h i s was r o u g h l y o n e - s i x t h more t h a n was

credit

The a c c e l e r a t i o n

m a r k e t s was p r o p o r t i o n a t e l y

indebtedness

i n c r e a s e d by $ 1 3 . 4 b i l l i o n

S t a t e and l o c a l g o v e r n m e n t s

the f i r s t

s i x months o f

the February p r o j e c t i o n

this

for

year

--

in

expected

foreign

greater.
in

the

adjusted

r a t e was 1 6 - 1 7 p e r c e n t a b o v e t h e a n n u a l

expected i n February.

Thus,

15 p e r c e n t above

1 9 6 9 , o r by $ 2 6 . 8 b i l l i o n a t a s e a s o n a l l y

annual r a t e .

billion

total

strong growth i n t o t a l

the February p r o j e c t i o n .

i n the U.S.

raised

t h e y e a r as a w h o l e .

B o r r o w i n g by c o n s u m e r s , b u s i n e s s
responsible

t o be

somewhat

the February p r o j e c t i o n .

at a seasonally adjusted annual rate of

February p r o j e c t i o n f o r

T h i s was

increase

r a i s e d about
a n amount

1969 as a w h o l e .

$4.7

roughly

Borrowing

activity

by t h e F e d e r a l G o v e r n m e n t a l s o was g e n e r a l l y

in

February

expectations.

indebtedness

(including

During the f i r s t h a l f ,

b o r r o w i n g by F e d e r a l a g e n c i e s as w e l l as by t h e

d e c l i n e d by $300 m i l l i o n .




Federal

line

However,

with

Treasury)

s u c h b o r r o w i n g was e x p e c t e d

to

-10p i c k up s u b s t a n t i a l l y
total

i n t h e second h a l f

i n t h e r a n g e o f $3 - 4

shortfall

the f i r s t

half

of

i n a c t u a l bank c r e d i t

expected.

to

than anticipated

an a n n u a l

increase

1969 o c c u r r e d d e s p i t e a
expansion r e l a t i v e

As may be s e e n i n T a b l e 4 ,

bank c r e d i t

adjusted annual r a t e of only 3 per cent during
months,

register

billion.

The somewhat s t r o n g e r
raised during

--

in

funds

sizable

t o what had been
rose a t a

seasonally

the January -

June

compared w i t h a p r o j e c t e d g r o w t h r a t e o f 4 - 7 p e r c e n t

t h e y e a r as a w h o l e .
the rule

rather

This

shortfall

than the exception:

b a n k i n g s y s t e m and t i m e d e p o s i t s a t

i n bank c r e d i t
total

for

e x p a n s i o n was

reserves supplied

to

the

c o m m e r c i a l banks were b o t h

con-

s i d e r a b l y weaker t h a n what w o u l d have been e x p e c t e d on t h e b a s i s
February

projections.
The money s u p p l y ( d e f i n e d

to include p r i v a t e l y held

d e p o s i t s and c u r r e n c y i n t h e h a n d s o f

the p u b l i c )

demand

during the

first

s i x months rose a t a s e a s o n a l l y a d j u s t e d r a t e o f 4 . 3 p e r c e n t .
rate of

i n c r e a s e was a b o u t

cent p r o j e c t e d

earlier

for

i n the middle of
1969 as a w h o l e .

s a v i n g s a c c o u n t s a t nonbank f i n a n c i a l
rate

of

about

i n the middle of
Developments over

behavior of a l l




On t h e o t h e r

institutions

3-6

per

hand,

expanded a t

a

the range o f g r o w t h r a t e s p r o j e c t e d
t h e summer months h a v e moved t h e

the f i n a n c i a l aggregates

projected performancei

the range o f

This

even f a r t h e r

T h i s c a n be s e e n c l e a r l y

February.

actual

away f r o m

i n estimated

in

their

changes

-11i n t h e s e measures d u r i n g
Since mid-year,

the t h i r d

quarter,

also

shown i n T a b l e

all

of

t h e measures have g r o w n more s l o w l y

c l i n e d more s h a r p l y

--

than they did during the

This generalization

is also

indicators

summer.

is

policy

registered

J u l y and A u g u s t .
nancial

flows

On b a l a n c e ,

it

its

strongest

This

is

reserves

appears t h a t

by n o n b a n k f i n a n c i a l
lihood that

the c o n t r a c t i o n

i n market y i e l d s
not

this

and m o r t g a g e s

f i n a n c i a l markets
on t h e m a j o r

resulted

in part

to supply

the

during
fi-

markets.

i n the monetary

s u b s t a n t i a l weakening i n

aggregates

from

the

additional
persistent

quarter

--

and i n t h e g r o w t h o f

institutions

t o be f a i r l y

t o happen,
to increase

it

the growth of

--

does seem
for

accurate.

total

to

credit

funds

raised

As shown i n T a b l e

w o u l d be n e c e s s a r y p r i m a r i l y

considerably

than they d i d i n the f i r s t

less

half.

i n the

bank

extended

increase

the

Considering

the

like-

during
3,

for

second h a l f

r o l e p l a y e d b y c o m m e r c i a l banks and n o n b a n k f i n a n c i a l




this

monetary

i n t h e money a n d c a p i t a l

the February p r o j e c t i o n s

1969 may t u r n o u t

the year

that

of

credit.

i n the t h i r d

for

rates

de-

monthly

s o u g h t by t h e b a n k i n g s y s t e m t o accommodate t h e

The f u r t h e r

order

from these data

or

months.

the e a r l y part

impact on t h e

the monetary a u t h o r i t i e s

s t r o n g demand f o r

credit

clear

since

t r u e w h e t h e r one f o c u s e s

o r on i n t e r e s t

and t h e more r a p i d r i s e
decision of

It

six

s u p p o r t e d by t h e p a t t e r n o f

changes i n t h e key monetary
(See T a b l e 5 . )

first

--

4.

in
loans
of

important

institutions

-12in

supplying

these c r e d i t

this

of

it

seems r e a s o n a b l y

bank c r e d i t

the expansion projected
is

a second h a l f

i n 1969 w i l l

all

of

fail

monetary r e s t r a i n t ,
this time.
Monetary Restraint

So f a r
sharp
for

this

last

impact

a move I

i n the f o u r t h

share of

The d e c l i n e
December,

restraint

loans

lending

in total

1968 - A u g u s t

has h a d a

other

large




banks,

at

Market

particularly

corporations.

have n o t

avoided

practices.

l o a n s and i n v e s t m e n t s

(that

d o l l a r s h e l d by domestic banks)
Although these Euro-dollar

of

account

to the leading

1 9 6 9 , p e r i o d was somewhat

banks w i t h London branches

quarter

relaxation

i n the E u r o - D o l l a r

Even t h e banks w i t h ready access t o E u r o - d o l l a r s
t h e need t o m o d i f y t h e i r

aggre-

Such a g r o w t h

l a r g e money m a r k e t b a n k s w h i c h

a disproportionate

that

am p e r s o n a l l y n o t p r e p a r e d t o make

and Bank B e h a v i o r

of

conclusion

column o f

e a r l y and s i z a b l e

i n 1969, monetary

on the

the

t h e b a n k i n g and m o n e t a r y

t h e F e b r u a r y p r o j e c t i o n s w e r e t o be a t t a i n e d .

c o u l d be s p a r k e d o n l y by a r a t h e r

outcome.

the growth i n

for

i n the

g a t e s w o u l d have t o t u r n around d r a m a t i c a l l y
if

likely

of

t o match the magnitude

Support

As i n d i c a t e d

the growth of v i r t u a l l y

i n t h e volume

certain that

i n February.

a l s o shown i n T a b l e 4 .

table,

decline

f l o w s w o u l d a p p e a r t o be a f a i r l y

Thus,
availability

credit,

account
than at

for

over

larger

95 p e r c e n t

other

the
at

entire

the

14 m a j o r

of a l l

l a r g e banks

banks r a n o f f

fewer

securities

they reduced s l i g h t l y

their

outstanding

Euro-

(Table
than

6.)

did

loans

over

-13this

period

centage
dollar

-- while

terms,

o t h e r banks c o n t i n u e d

the reduction i n t o t a l

b a n k s was more t h a n t w i c e
The d e c l i n e

reflected
estate,
at

largely

large banks.

r o s e somewhat
other

loans

less

--

large banks,

deposits

of

other

in financial

i n both d o l l a r

1969,

as d i d

and p e r c e n t a g e
loans

However,

banks r e p r e s e n t e d

largely

of

the deposit

declines

deposits,

this

at

other

large

banks
than

sharply

these deposit

access

to Euro-dollar

heavily

outflows

the E u r o - d o l l a r

deposits,

Reductions

in

demand

the

out-

banks.

s u c h as b o r r o w i n g




also varied.

Naturally,

banks

f o r e i g n branches

Other banks, however, w i t h o u t

market had t o

the

Euro-dollar

i n t i m e and s a v i n g s

funds through t h e i r

i n t h i s market.

dur-

of

The manner i n w h i c h t h e s e t w o t y p e s o f b a n k s a t t e m p t e d
offset

at

more.

two t y p e s

at

real

loans

terms - -

rose

1).

period

these

o n t h e o t h e r h a n d , made up t h e m a j o r p o r t i o n o f

deposits

Euro-

the composition of

outflows

w h i c h i n t u r n r e f l e c t e d m a i n l y CD a t t r i t i o n .

at

per-

(Table

loans a t E u r o - d o l l a r

o u t f l o w d i f f e r e d m a r k e d l y as b e t w e e n t h e s e
Nearly a l l

In

since business,

b o t h t y p e s o f banks d e c l i n e d

e i g h t months o f

institutions.

f l o w of

banks o v e r

loans,

consumer and r e a l e s t a t e
at

l a r g e banks

t o expand,

While business

Total deposits
ing the f i r s t

that

continued

loans.

l o a n s and i n v e s t m e n t s

loans a t E u r o - d o l l a r

reductions

and c o n s u m e r

other

in

t o add t o

r e l y more o n o t h e r

with

borrowed

access

sources of

i n t h e F e d e r a l f u n d s m a r k e t and f r o m t h e

to

to

funds,
Federal

-14Reserve System.
figures

This

i n Tables

Euro-dollar
borrowings

is

shown c l e a r l y

6 and 7 .

These b o r r o w i n g s a l m o s t d o u b l e d a t

b a n k s , as compared t o a much s m a l l e r
at Euro-dollar

parts.
total

l o a n s and i n v e s t m e n t s

a f t e r mid-year.

However,

of

this

ran o f f

the r e d u c t i o n

loans - -

period

and 1968 i s
--

in

usually

(which

of U.S.

financings

are

Govern-

After

b a n k s and

mid-

slowed

both developments p r o b a b l y

of Treasury

securities,

largely

caution.

of the year, holdings

l a r g e banks - -

two

particularly

sharply at both types of banks.

bank u n d e r w r i t i n g

Liquidation of other

not

s h o u l d be v i e w e d w i t h some
half

is

these f i g u r e s

o f Governments r o s e a t E u r o - d o l l a r

appreciably at other
flecting

and

a t b o t h t y p e s o f banks t o o k p l a c e

in

During the f i r s t
ment s e c u r i t i e s

C l e a r l y most o f

seasonal decline

seasonally adjusted)

year, holdings

such

t h e s e banks b e f o r e

since the July-August

one o f a s e a s o n a l d e c l i n e

not

in

t h e December-August p e r i o d has been b r o k e n i n t o

(See T a b l e s 8 a n d 9 ) .

representative

rise

non-

banks.

I n o r d e r t o view developments a t
a f t e r mid-year,

borrowings11

i n the " t o t a l

during

however, a c c e l e r a t e d

that

sharply

reperiod.
at

b o t h t y p e s o f banks i n J u l y and A u g u s t .
Total

loans,

as w e l l as b u s i n e s s

s h a r p l y a f t e r m i d - y e a r , following
year.

And w h i l e

seasonal,




it

some o f

loans,

also

declined

sustained expansion e a r l i e r

in

the

t h e r e d u c t i o n s i n c e m i d - y e a r p r o b a b l y was

probably also

reflects

tightening

of

l e n d i n g terms

by

-15b a n k s as l i q u i d i t y
i n business

positions

reached v e r y

low l e v e l s .

l o a n s was somewhat more p r o n o u n c e d a t

The

drop

nonEuro-dollar

banks.
NonEuro-dollar
deposit

banks a l s o e x p e r i e n c e d

d e c l i n e a f t e r m i d - y e a r , w h i c h was i n s h a r p

situation earlier
J u l y and A u g u s t

i n the year.

These b a n k s

lost

than they d i d over the e n t i r e

Impact of Monetary R e s t r a i n t
The i m p a c t

of a p o l i c y

of monetary

I n Tables

first

eight

at weekly r e p o r t i n g
developments,

months o f
banks - -

in particular,

experiencing

this

that

developments

deposit
this

year

year to

especially

holds

demand d e p o s i t s

The b a n k s




is

evident

the

in

in

part

i n major

size

three

restraint
this

also

readily

that
It

changes

sheet

items

be

This
but

three

also

banks.

has a f f e c t e d a l l

been

generali-

it

siz-e g r o u p s o f

i n f l u e n c e has been spread

c l a s s e s have c l e a r l y

been

observed

banks have

1968.

flows,

Deposit

banks have
will

by

discerni-

are presented.

groups o f

to time deposit

implemented

balance

the pressures

three

Size

10 a n d 1 1 , n e t

comparable p e r i o d o f

at a l l

i n t h e two l a r g e r

is

increasing degrees.

applicable

that

year

reflect

at a l l

Although monetary
it

this

year

by s i z e o f b a n k - -

ever

than i n the

zation is

groups,

half,

restraint

b l e when b a n k s a r e e x a m i n e d by s i z e .

for

to

more d e p o s i t s

on Banks o f D i f f e r e n t

last

weaker

the

contrast

first

t h e F e d e r a l R e s e r v e s i n c e December o f

the

of

s t e p p e d - u p CD a t t r i t i o n .

reflecting

over

the brunt

size

unevenly.

had t o a d j u s t

to

-16much w e a k e r d e p o s i t

developments

—

t h i s holds w i t h

demand a n d t i m e a c c o u n t s ,

but p a r t i c u l a r l y

banks

respect

both

grouping.

i n the smaller

size

Banks i n a l l
loanable

three size categories

funds f r o m n o n d e p o s i t

Federal funds,

sources

Banks i n

o b t a i n e d n e a r l y $12 b i l l i o n
liabilities

at

have a t t e m p t e d t o

(primarily

the l a r g e s t

i n t h i s way, b u t

t h e s e banks a t

$5 b i l l i o n b e l o w t h e i r

total

period o f a year

losses w i t h these nondeposit

bined decline
larger

i n t h e s e two l i a b i l i t y

in

This

t h e s e two

ago.

sources o f

still

Banks i n
in

last

the

offsetting

f u n d s as t h e

c a t e g o r i e s was o n l y

types

com-

slightly
year.

Banks

s i z e c a t e g o r y h a v e b e e n e v e n more s u c c e s s f u l

r e l y i n g on n o n d e p o s i t
In fact,

have

and n o n -

the year.

t h a n t h e d r o p r e c o r d e d i n t h e same p e r i o d o f

i n the v e r y smallest

to

t h e end o f A u g u s t w e r e

l e v e l at the beginning of

i n the s i m i l a r

deposit

m i d d l e s i z e g r o u p i n g h a v e b e e n somewhat more s u c c e s s f u l
deposit

obtain

Euro-dollars,

size grouping

compares w i t h a n e t i n c r e a s e o f n e a r l y $4 b i l l i o n
of l i a b i l i t i e s

— t h a n have

and b o r r o w i n g f r o m t h e F e d e r a l Reserve System)

o f f s e t deposit o u t f l o w s .

deposit

time accounts

to

fund sources

t o compensate f o r d e p o s i t

t h e s e b a n k s h a v e o b t a i n e d more l o a n a b l e

s o u r c e s combined so f a r

i n 1969 t h a n t h e y d i d

funds

i n the

in

declines.

from these

two

comparable

p e r i o d of a y e a r ago.
The r e l a t i v e
loanable




funds - -

experience of d i f f e r e n t

either

from d e p o s i t o r

s i z e d banks i n

or nondeposit

obtaining

sources - -

is

clearly

-17reflected
total

in

their

asset

earning assets

d e c l i n e d by n e a r l y
year

instead of

period of

this

a t banks w i t h $1 b i l l i o n

$9 b i l l i o n

year

total

In contrast

loan accounts
their

three

have been under

of

their

in

t h e same p e r i o d o f

a year

also

experience,

the smaller

This

sources o f

the smaller

found

the very

banks.

it

service

the data o f

their
reduced

largest

banks

decline

this

However,

year

funds.

Likely

fell

increase

this

groups of

year

banks.

during

banks.

extreme

the

last

year,

to

supply

Business

loan

short

t h i s may s i m p l y

candidates

funds are o t h e r

the

business

a f t e r making e x t e n s i v e use o f

i n c r e a s e d much more s h a r p l y

stronger

c o m p a r e s w i t h a $3 b i l l i o n

these i n s t i t u t i o n s

for

be

ago.

a y e a r ago.

t h e y have w i t h

alternative

same

s i z e groups o f

funds t o

that

this

will

i n d i c a t e d b y t h e $7 b i l l i o n

since expansion i n accounts

l o o k i n g elsewhere

it

t h r e e groups o f banks have

some s u g g e s t i o n i n

t h a t business borrowers,




this

that

deposits

e i g h t months o f

e x p e r i e n c e d by the l a r g e s t banks i n t h e i r

the sharp run-up o f

both of

to

The s t r a i n

investment holdings.

developments

lines

as a l l

is dramatically

in

tightness

first

sources of

investments.

There i s

be n o t e d

o r more i n

s i z e groups have c l e a r l y

on l i a b i l i t y

this year,

holdings

will

amount as t h e y d i d i n t h e

ago a t b o t h o f

Banks i n a l l
to r e l y

It

e a r n i n g a s s e t d e v e l o p m e n t s w e r e somewhat

than a year

impossible

during the

i n c r e a s i n g by t h i s

a y e a r ago.

observed t h a t

account developments.

indicate
credit
a r e now
these

loans

than they d i d a year

of

ago

have
at

-18The e v i d e n c e p r e s e n t e d i n T a b l e s
t h a t the n a t i o n ' s

l a r g e banks have f e l t

tighten s t i l l

further

all

sources d e c l i n e d at a l l

liability

s i n c e June o f

12 and 13 s t r o n g l y

the r e i n s

this year.
three

banks i n t h e l a r g e s t

forced to reduce t h e i r
recent period has,

asset developments were s l i g h t l y
the smallest s i z e c a t e g o r y .
a s s e t s a t t h e two l a r g e s t
i n loan p o r t f o l i o s .

policy

funds

from

s i z e groups o f banks
year during

this

sharply

stronger

This

earning

t h a n a y e a r ago a t b a n k s
the d e c l i n e

in

in

earning

s i z e g r o u p s o f b a n k s was c o n c e n t r a t e d
loans r e d u c t i o n at

period.
were

further.

p r o v e n t o be one i n w h i c h

The i m p a c t o f

Business

over

and m e d i u m - s i z e d g r o u p i n g s

holdings of earning assets

on t h e o t h e r hand,

o f monetary

Loanable

t h i s p e r i o d i n s t e a d o f e x p a n d i n g as t h e y d i d l a s t
As a c o n s e q u e n c e ,

suggests

t h e s e banks

primarily

contributed

to the overall decline i n t o t a l loans.
Impact of Monetary Restraint on Borrowers of D i f f e r e n t Size
I n general,
particularly

it

appears

a d v e r s e i m p a c t on s m a l l - s i z e d

14 and 15 p r e s e n t

the r e s u l t s

o f whether c r e d i t

restraint

borrowers of d i f f e r e n t
firms

in various

y e a r by f i r m s

t h a t monetary r e s t r a i n t

size.

industry

of

firms.

a r o u g h a t t e m p t t o g a i n some

A comparison of

categories

businesses.




impression

on b u s i n e s s

the r e l a t i v e

size

and t h e v o l u m e o f b o r r o w i n g

relative

to t h e i r

o f borrowing i n three preceding years c l e a r l y
s i o n t h a t monetary r e s t r a i n t

The d a t a on T a b l e s

has f a l l e n d i f f e r e n t i a l l y

i n these i n d u s t r i e s

has n o t had a

gives

average

this

volume

the general

has n o t b e e n c o n c e n t r a t e d on

of

small

impres-

-19For example,
the greatest
not only

among t h e f i v e

amount o f

relative

the i n d u s t r y w i t h

two i n d u s t r i e s w i t h

firms

among t h e s e c o n d g r o u p o f
largest

amount o f

of

the l a r g e s t

the very smallest

five

relative

categories which

loan expansion t h i s

firms
of

industry

year,

average
average

one

finds

size but
size.

year,

t h e r e were

industry

categories with

firms of r e l a t i v e l y

large

size

industry

categories with

firms of r e l a t i v e l y

small

to
two

size.

S e v e r a l comments s h o u l d be added t o
in perspective.
i n the r e l a t i v e

First,

there

degree o f

is

place

these

a s t r o n g chance t h a t

activity

and

also

Similarly,

i n d u s t r i e s w h i c h showed t h e n e x t

loan expansion t h i s

showed

It

is

also quite

by i n d u s t r y may p r o h i b i t

possible

that measuring

two i n d u s t r y

size of

t h e o t h e r may c o n s i s t

volume o f

a few l a r g e
of

the business

large,

For

size

of

and many s m a l l
in all

cases,

Moreover,

a

firm,

firms

firms,

treatment

it

is

also

a finding
at

banks.

likely

that

loans
that

large

but

while

considerable

that

likely

of

closely

Since i t

quite

of

example,

y e a r has been

is

data

credit

indicator

industries.

the i n d u s t r y .

i n g d a t a w o u l d be b i a s e d a g a i n s t




and

l o a n s made by b a n k s t h i s

well-known

received preferential

firms

f i r m s whose s i z e ,

the average f o r

t o nonbank i n v e s t o r s .
those of

in different

c a t e g o r i e s may have t h e same a v e r a g e

one may be composed o f

approximates

firms

the

the size

b o r r o w e r s b y a v e r a g e a s s e t s p e r f i r m may n o t b e a t r u e
the comparative

findings

differences

f r o m s h o w i n g an e x i s t i n g r e l a t i o n s h i p b e t w e e n f i r m s i z e
extension.

two

sold

the

firms

sold
were

remainhave

-20But,
does s u g g e s t
on business

if

these r e s e r v a t i o n s

are kept

that

monetary r e s t r a i n t

has n o t had a d i f f e r e n t i a l

borrowers

of d i f f e r e n t

i n mind,

of monetary p o l i c y
cult

assignment

a detailed

ahead o f u s .
of

e c o n o m i c d e v e l o p m e n t s and t h e

While I

the course of

obviously

growth of
further
year.

first

place,

it

T h i s appears
or

in real

personal income,
during

the

year.

While

fourth

terms.

cannot a t t e m p t

quarter

evident

of

Because o f

that

of growth of business

this

of
for

y e a r and e a r l y

next

current

in

disposable

expenditures

t o the average
outlays

P u r c h a s e s o f goods and s e r v i c e s
seem l i k e l y

ahead,

the r a t e

for

for

fixed

the accumulation of business

and S t a t e and l o c a l g o v e r n m e n t s

t o make

and t h e o u t l o o k i s

the steady climb

q u a r t e r may r e m a i n c l o s e

diffi-

clear.

t h e r a t e o f e x p a n s i o n i n consumer

the rate

may r e m a i n h i g h .

have a

t o be t r u e w h e t h e r GNP i s m e a s u r e d i n

ment may m o d e r a t e somewhat,




quite

t h e economy i s b e g i n n i n g t o s l o w ,

m o d e r a t i o n i n the f i n a l

dollars

is

course

t h e economy i n t h e m o n t h s

t h e m a i n c o n t o u r s do a p p e a r t o be r e a s o n a b l y
the

effect

Policy

i n 1969 h a s p e r s u a d e d me t h a t we s t i l l

forecast

In

evidence

size.

The E c o n o m i c O u t l o o k and t h e T a s k o f S t a b i l i z a t i o n
The a b o v e a s s e s s m e n t o f

the

the
invest-

inventories

by b o t h

t o expand l e s s

Federal
rapidly.

-21The h o u s i n g s e c t o r ,
steadily

since

declines.
of

the

in

the

1.3 m i l l i o n

residential

first

in

t h e r a t e may d e c l i n e

be a m a j o r

quarter,

also

v e r y much d u r i n g

rise

the capacity u t i l i z a t i o n
i n the f o u r t h q u a r t e r .
modest g a i n s over
relatively

of

only moderately.
a high level

months,

expenditures

aggregate

quarter

will

moderate

For example,

the t h i r d

induspace,

W h i l e n o n f a r m e m p l o y m e n t may r e g i s t e r
t h e unemployment

on

demand.

o n r e s o u r c e u s e may n o t

environment,
In fact,

--

and w i t h

the o v e r a l l

w i t h business
the prospect

inventories

--

at

c o m m e r c i a l b a n k s may e v e n s t r e n g t h e n .

of

securities

issues

b y S t a t e and l o c a l
considerable




three

the housing sector

1969.

rate

an a n n u a l

i n m a n u f a c t u r i n g may show l i t t l e

t h e same p e r i o d ,

accumulation of business

under

final

growth of

somewhat o v e r

rate

further

and

change
only

r a t e may

climb

little.
In this

at

I n the

that

t h e r e m a i n i n g months o f

o u t p u t may s t i l l

to experience

The t r e n d o f

suggests

pressures

decreased

w h i c h r e a c h e d an a n n u a l

quarter.

the reduced r a t e

have

may h a v e b e e n a b o u t a t

somewhat f u r t h e r .

construction
source of

quarter,

the t h i r d

B u t on t h e w h o l e ,

trial

seems c e r t a i n

The number o f h o u s i n g s t a r t s ,

1.7 m i l l i o n

rate of

first

where e x p e n d i t u r e s

demand f o r

fixed
of

credit

investment

a continued

strain.

remaining
rapid

t h e demand f o r b u s i n e s s
Given the s u b s t a n t i a l

p o s t p o n e d o r d e l a y e d by c o r p o r a t i o n s

governments,

may ease

loans
volume

as w e l l

t h e c a p i t a l m a r k e t s may a l s o

as

remain

-22At

t h e same t i m e ,

lessening i n i n f l a t i o n a r y
in

unfortunately,

pressures.

t h e f o u r t h q u a r t e r may s t i l l

cent

at

rate

for

that

e x p e r i e n c e d i n 1968.

a seasonally
any o t h e r

For

register

quarter

t h e consumer p r i c e

be q u i t e
that

evident.

inflationary

of next

instance,

this

year,

but

For the f u l l

index,

Moreover,

it

If

t h e r e appears

1969,

that

the e f f e c t s

only

after

prospect,

I

behavior

i n f l a t i o n would

t o be a r e a l

on i n t o

personally

of monetary r e s t r a i n t

a significant

measures a l r e a d y

risk

t h i s w o u l d mean

measured by t h e

also

prospect

the e a r l y

months

see no r e a s o n t o

f r o m the p r e s e n t course o f monetary r e s t r a i n t .

think

the

year.
Given t h i s

I

t o 4 per

w o u l d be t h e same as

year

persist

close

T h i s w o u l d be b e l o w

t h e s t r o n g pace o f

pressures w i l l

little

t h e GNP d e f l a t o r

an i n c r e a s e

adjusted annual r a t e .

an a d v a n c e o f w e l l o v e r 4 - 1 / 2 p e r c e n t .
of

we may see v e r y

time lag,

taken w i l l

t h e t a s k we f a c e i s

of relaxing

credit

I

realize,

of

on t h e economy a r e

and much o f

course,

registered

the impact of

come i n t h e m o n t h s a h e a d .

deviate

the

Nevertheless,

so p r e s s i n g t h a t we s h o u l d n o t r u n

restraint

until

it

is

r e a s o n a b l e chance o f making a n o t i c e a b l e d e n t

clear
in

the

t h a t we h a v e a

inflationary

expectations.
That being the case,
Reserve Board s h o u l d n o t
rates of

interest

the public
assignment.




I

think personally

t a k e any s t e p s

that

the

( s u c h as r a i s i n g

t h a t banks can p a y ' o n CD's) w h i c h m i g h t

to believe

Federal

t h e maximum
encourage

t h a t we a r e u n p r e p a r e d t o s t i c k w i t h a

difficult

Table

1.
P r o j e c t i o n s o f 1969 GNP a n d R e l a t e d
(As o f F e b r u a r y and S e p t e m b e r , 1 9 6 9 )
( B i l l i o n s of dollars)

P r o j e c t i o n : F e b r u a r y , 1969
Annual T o t a l s
Change
1968
1969
1968/69
Category

865. 7

924-•926

5 8 - 60

925

931--933

72,. 2

6 5 - 67

536. 6

570-•572

3 3 - 35

572

577-- 5 7 9

44,.3

40- 42

126. 3

133-•135

7- 9

137

136-- 1 3 8

10,.3

10- 12

const.

30. 2

31- • 32

1- 2

32

30--32

5,. 2

0- 2

invest.

88, 8

97-•99

8 - 10

97

97--99

5,. 1

8 - 10

7. 3

4.3- 6.3

2. 5

3 . 5 - •4.5

1- 2

200. 3

213- 215

1 3 - 15

103

100. 7

dollars)

Personal cons.
Gross p v t .

exp.

dom.

Residential
fixed

invest.

purchases

Federal
S t a t e and
Personal

local

income

Disp. pers.

income

Corporate p r o f i t s

0- 2

(before

tax)

7

7--9

- 0 ,. 1

1 .8

1--3

- 2 , .7

( - ) l -0

214 . 0

215-• 217

20..2

1 5 - 17

3

102 . 0

101-• 103

8..8

111- 113

1 0 - 12

112 . 0

113-•115

11..4

1 2 - 14

737- 739

49- 51

740 . 0

746-•748

5 8 . ,5

5 8 - 60

590. 0

exports

Gov't

(-)3-( -)1

687. 9

Inventories
Net

Projections:
S e p t e m b e r 1969
Annual Totals
Change
First
Year
Year
Year
Three
1969e
1968
1968/69
Quarters
(Actual)
(Est.)
1969e
(SAAR)

99. 5

GNP ( c u r r e n t

Bus.

Ireftis1

623- 625

3 3 - 35

623 . 0

627-•629

4 3 . .5

3 7 - 39

93-• 94

10.,8

2- 3

91. 0

88- 9 1

(-)

3 -0

94 . 0

1- 3

T o t a l Federal exp.

(NIA

basis)

181. 5

192

10

191 . 0

191-•193

17.,7

9 - 11

Total Federal rec.

(NIA

basis)

176. 3

193- 194

1 7 - 18

200 . 0

200-• 202

2 5 . ,2

2 4 - 26

( - ) 5. 2

2- 3

7- 8

7 .,5

1 4 - 15

'Surplus

1.

Note:

e -

(+)or d e f i c i t

(-)

The GNP f i g u r e s f o r 1968 w e r e r e v i s e d u p w a r d ;
were a d j u s t e d a c c o r d i n g l y .

Estimated.




10 . 0

9-•10

the February p r o j e c t i o n s

for

1969

Table 2

Economic G r o w t h , R e s o u r c e U s e , and

Prices

February
projection
1968
P e r c e n t a g e g r o w t h o f GNP
i n current dollars

9.1

P e r c e n t a g e g r o w t h o f GNP
i n c o n s t a n t (1958) d o l l a r s

4.9

GNP i m p l i c i t p r i c e
annual percentage
Total

labor

Armed

force

Unemployment

- Excluding




7.8

2 - 3

2.5 -

3.3

4.0

3.1-3.5*

4.5 -

5.0

83.5-84.0

83.8 -

rate

effects

80 -

7.0

3.5

78.7

force

Capacity u t i l i z a t i o n
i n manufacturing

*

7.5 -

6.7 -

3.5

labor

1969

1969

82.3

deflator,
change

forces

Civilian

September
projection

3.6

84.4

3.5
80.5

3.8-4.0

80.4 3.5 -

80.9
3.8

rates
84.5

of

81.5-82.5

t h e F e d e r a l pay r a i s e

i n the 3rd

84.0 -

84.5

quarter.

Table

3

FUNDS RAISED I N CREDIT MARKETS
(Billions

1968

of

dollars)

February
projection
f o r change
i n 1969

Total, A l l Nonfinancial
Borrowers

97.8

Federal

Government*

15.7

3 to 4

Foreign

Borrowers

2.9

2 to 3

P r i v a t e Domestic Nonf i n a n c i a l sectors
Loans
Consumer C r e d i t
Bank L o a n s
O t h e r Loans
Securities
State & Local
Corporate
Mortgages
Consumer & B u s i n e s s B o r r o w i n g
I n c l u d e d i n P r i v a t e Domestic
Nonfinancial Sectors

75 t o

80

1st Half
1969
S .A.
43.7
-

Required
2nd H a l f
Change ( i f
Projections
are met)
3 1 . 3 t o 36 .3

33.8

3.3 to

.3
2.4

Required
2nd H a l f
Change ( i f
Middle of
]P r o j e c t i o n s
are met)

-

4.3

3.8

.4 t o

.6

.1

79.3

70 t o 75

41.7

30.4

24 t o 27

16.6

11.1
12 .3
7.0

6 to 8
9 t o 12
7 to 9

5.1
6.0
5.5

23.1

23 t o 26

11.7

11.3 t o

11.1
12.1

8 t o 10
15 t o 17

4.7
7.0

3.3 to
8 to

5.3
10

4.3
9.0

25.7

22 t o

24

13.4

8.6

to

10.6

9.6

67.9

62 t o

65

37.0

25.0 to

28.0

26.5

28.3

to

33.3

30.8

7.4 to

10.4

8.9

.9 t o 2 . 9
3 to 6
1.5 t o 3.5
14.3

1.9
4.5
2.5
12 .8

*
I n c l u d e s a g e n c y i s s u e s and p a r t i c i p a t i o n c e r t i f i c a t e s .
Home L o a n B a n k s , L a n d b a n k s , and FNMA a r e
c o n s o l i d a t e d w i t h o t h e r g o v e r n m e n t a g e n c i e s i n t h i s t a b l e , w h i c h d e p a r t s i n t h i s r e s p e c t f r o m new
budget concepts.
T a b l e i n c l u d e s n e t i s s u e s by t h e s e a g e n c i e s b u t e x c l u d e s i n t e r a g e n c y t r a n s a c t i o n s .



Table

4

BANKING AND MONETARY VARIABLES
ANNUAL PERCENTAGE RATES OF CHANGE
(Seasonally Adjusted)

1968

Projected
1969

Change
over f i r s t
6 months

Change
over the
3rd qtr

Change
over f i r s t
9 months

Change o v e r
4th qtr.
required to
meet F e b r u a r y
projections
21 -

29

7.2

3 - 5

0.7

-10.0

-2.9

6.5

3 - 6

4.3

0.6

3.1

3 - 1 5

Currency

7.4

5 - 6

6.5

4.5

5.8

3 - 7

Demand D e p o s i t s

6.2

3 - 6

3.7

-0.5

2.3

5 - 1 7

Time D e p o s i t s a t
Commercial Banks

11.3

1 - 5

-4.0

-13.0

-7.0

T o t a l Bank

11.0

4 - 7

3.0

0.3*

2.3**

9 - 2 1

5.0

1.2*

4.1**

6 - 1 0

Total

Reserves

Money

Supply

Credit

Nonbank S a v i n g s

*
**

Accounts

6.4

- A v e r a g e f o r J u l y and A u g u s t
- F i r s t 8 months




4.5 -

5.5

25 -

41

Table 5
SELECTED MONETARY AND FINANCIAL

Quantities
1.
2.
3.
4.
5.
6.
7.
8.

Total reserves
Nonborrowed r e s e r v e s
Money s u p p l y ( c u r r e n c y and
p r i v a t e demand d e p o s i t s )
Time and s a v i n g s d e p o s i t s a t b a n k s
Money s u p p l y p l u s t i m e d e p o s i t s ( 3 4 4 )
T o t a l member b a n k d e p o s i t s - c r e d i t proxy
Proxy i n c l u d i n g E u r o - d o l l a r s
D e p o s i t s a t s a v i n g s b a n k s and S&Ls

INDICATORS

A n n u a l p e r c e n t a g e r a t e s o f changi
1st Half
July-Aug.
September
Estimated
1969
1969p
0.7
-3.7

-14.1
-11.1

-

1.8
9.3

3.8
-5.0
-0.7

0.3
-18.8
- 9.3

+
-

1.2
1.8
0.3

-3.5

-15.0
-10.4
1.2

- -

5.0

Change
l a s t week
i n Dec. t o
l a s t week
i n June
(base p o i n t s )
3-Month Treasury b i l l r a t e (market)
Commercial paper ( d i r e c t l y p l a c e d )
3 - 5 U . S . T r e a s u r y n o t e s and b o n d s
L o n g - t e r m U . S . T r e a s u r y bonds
C o r p o r a t e b o n d s ( M o o d y ' s , AAA)
M u n i c i p a l b o n d (Bond b u y e r , H i g h G r a d e )

1/
J u l y 1969.
n . a . - Not a v a i l a b l e .




+49
+39
+65
+41
+53
+94

3.8
4.4
n. a.

Change
l a s t week
i n June t o
l a s t week
i n August
(base p o i n t s )
+84
+ 4
+86
+27
+13
+57

Average f o r
week •'.ending
S e p t . 19
7.13
7.63
7.63
6.31
7.16
6.25

Table 6
NET CHANGE I N MAJOR BALANCE SHEET ITEMS FOR WEEKLY REPORTING BANKS
December 2 5 - A u g u s t 27 1 /
(In billions

Items

of d o l l a r s ,

To t a l
1969

T o t a l l o a n s and i n v e s t m e n t s 2_/
U.S. Treasury s e c u r i t i e s
Other s e c u r i t i e s
T o t a l loans 2/
Business loans
Real E s t a t e loans
Consumer l o a n s

-

T o t a l deposits 3/
Demand d e p o s i t s 3 /
Time and s a v i n g s d e p o s i t s
L a r g e CD's 4 /
Other

-22.4
- 8.0
-14.4
-11.1
- 3.3

T o t a l borrowings 5/
Other l i a b i l i t i e s
E u r o - d o l l a r s 6J

7.7
6.1
3.3
1.7
3.2
1.2
1.1

7.3
8.6
8.5

1968
-

-

not seasonally

adjusted)

14 M a j o r Banks w i t h
London Branches
1969
1968

7.8
.5
2 .8
5.5
2.1
1.9
1.4

-

4.3
1.8
2.2
.3
1.3
.5
.3

.5
5.8
5.3
2.0
3.3

-

9.8
1.2
8.6
6.5
2.0

2.6
3.8
2 .8

1.7
6.7
7.8

Otltier
1969

3.9
.5
1.7
1.6
1.1
1
.1
-

-

3.4
4.3
1.1
2 .0
2 .0
.6
.7

3.1
3.3
.1
.5
.6

- 1 2 .6
- 6.8
- 5.8
- 4.5
- 1.3

2.1
3.4
2.7

5 .6
1.9
.7

1968
-

-

3.9
1.0
1.1
3.7
1.1
1.8
1.3
2 .7
2.5
5.2
2 .5
2 .8
.5
.4
.1

1/
Dates are f o r 1969, comparable d a t e s used f o r 1968.
2_/ E x c l u s i v e o f l o a n s and f e d e r a l f u n d s t r a n s a c t i o n s w i t h d o m e s t i c c o m m e r c i a l b a n k s and n e t o f v a l u a t i o n
3/
Less cash items i n the process of c o l l e c t i o n .
4/
N e g o t i a b l e time c e r t i f i c a t e s of d e p o s i t i n d e n o m i n a t i o n o f $100,000 or more.
5/
L a r g e l y b o r r o w i n g i n t h e F e d e r a l f u n d s m a r k e t and f r o m F e d e r a l R e s e r v e b a n k s .
6/
Bank l i a b i l i t i e s t o f o r e i g n b r a n c h e s , n e t o f b r a n c h p a r t i c i p a t i o n i n head o f f i c e d o m e s t i c l o a n s .
NOTE:
F i g u r e s may n o t sum e x a c t l y due t o r o u n d i n g .




reserves.

Table

7

N e t Change i n M a j o r

Balance Sheet Items f o r Weekly R e p o r t i n g
December 2 5 - A u g u s t 27
( I n per c e n t , data not seasonally a d j u s t e d )

Total
1969

1968

14 m a j o r b a n k s w i t h
London branches
1969
1968

Banks

Other
1969

1968

- 3.4
-20.9
- 8.4
1.1
4.4
3.6
5.7

3.8
-1.8
8.4
3.8
3.3
6.7
8.6

- 5.2
-19.9
-16.6
.5
3.5
6.9
10.0

5.3
6.0
15.6
3.2
3.5
1.8
4.4

- 2.3
-21.4
- 4.2
2.0
5.3
2.6
4.8

3.0
5.1
-5.0
4.2
3.0
8.3
9.5

Total deposits 3/
Demand d e p o s i t s 3/
Time and s a v i n g s d e p o s i t s
L a r g e CD's 4 /
Other

-10.3
- 7.7
-12.8
-47.1
- 3.8

- .2
-5.9
5.2
9.7
4.1

-13.6
- 3.4
-23.5
-64.3
- 7.6

-4.5
-9.3
.4
-4.7
2.5

- 8.7
- 9.9
- 7.7
-33.9
- 2.1

2.1
-3.9
7.7
24.4
4.8

Total borrowings 5/
Other l i a b i l i t i e s
E u r o - d o l l a r s 6/

64.1
48.4
142.0

33.4
29.8
66.7

32.0
53.7
130.0

63.2
40.6
66.7

93.3
35.9

10.7
8.6

T o t a l l o a n s and i n v e s t m e n t s
U.S. T r e a s u r y s e c u r i t i e s
Other s e c u r i t i e s
T o t a l l o a n s 2/
Business loans
Real Estate loans
Consumer l o a n s

1/
2/

2/

Dates a r e f o r 1969, comparable d a t e s used f o r 1968.
E x c l u s i v e o f l o a n s and F e d e r a l f u n d s t r a n s a c t i o n s w i t h d o m e s t i c c o m m e r c i a l b a n k s and n e t
reserves.
J3/ L e s s c a s h i t e m s i n t h e p r o c e s s o f c o l l e c t i o n .
4/
N e g o t i a b l e time c e r t i f i c a t e s of d e p o s i t i n d e n o m i n a t i o n of $100,000 or more.
.5/
L a r g e l y b o r r o w i n g i n t h e F e d e r a l f u n d s m a r k e t and f r o m F e d e r a l R e s e r v e b a n k s .
j>/
Bank l i a b i l i t i e s t o f o r e i g n b r a n c h e s n e t o f b r a n c h p a r t i c i p a t i o n i n h e a d o f f i c e d o m e s t i c
NOTE:
F i g u r e s may n o t sum e x a c t l y due t o r o u n d i n g .




- -

of

valuation

loans.

Table 8
NET CHANGE I N MAJOR BALANCE SHEET ITEMS FOR WEEKLY REPORTING BANKS
December 2 5 - J u n e 25 1 /
(In billions

Items

of d o l l a r s ,

T(D t a l

not

seasonally

14 M a j o r Banks w i t h
London Branches
1969
1968

1969

1968

T o t a l l o a n s and i n v e s t m e n t s 2_/
U.S. Treasury s e c u r i t i e s
Other s e c u r i t i e s
T o t a l loans 2/
Business loans
Real E s t a t e loans
Consumer l o a n s

.9
-6.6
- 1.2
6.9
5.2
1.3
1.1

2.9
- 2.8
1.2
4.6
3.1
1.4
.9

-

1.3
2.8
.9
2.4
2.0
.5
.3

T o t a l deposits 3/
Demand d e p o s i t s 3 /
Time and s a v i n g s d e p o s i t s
L a r g e CD's 4 /
Other

-14.5
- 6.1
- 8.4
- 8.2
.2

-

-

8.6
2.3
6.3
5.6
.7

T o t a l borrowings 5/
Other l i a b i l i t i e s
Euro-dollars 6/
1/
2_/
3/
4/
5/
6J
7/

4.8
9.3
7.2

2.8
3.7
.9
- 1.1
2.0
2.5
2.4
2.0

adjusted)

.6
8.0
6.7

-

-

.8
1.2
.5
1.6
1.7
.1
.1
2.8
1.2
1.6
1.8
.2
1.5
2 .2
2.0

Othe sr
1969
-

-

.4
3.8
.2
4.5
3.3
.8
.8

F i g u r e s may n o t sum e x a c t l y due t o




rounding.

-

5.9
3.8
2.1
2.6
.5

-

4.2
1.3
.5

Dates a r e f o r 1969, comparable d a t e s used f o r 1968.
E x c l u s i v e o f l o a n s and f e d e r a l f u n d s t r a n s a c t i o n s w i t h d o m e s t i c c o m m e r c i a l b a n k s a n d n e t
valuation reserves.
L e s s c a s h i t e m s i n t h e p r o c e s s of- c o l l e c t i o n .
N e g o t i a b l e time c e r t i f i c a t e s o f d e p o s i t i n d e n o m i n a t i o n s o f $100,000 or more.
L a r g e l y b o r r o w i n g i n t h e F e d e r a l f u n d s m a r k e t and f r o m F e d e r a l R e s e r v e b a n k s .
Bank l i a b i l i t i e s t o f o r e i g n b r a n c h e s n e t o f b r a n c h p a r t i c i p a t i o n i n head o f f i c e d o m e s t i c
L e s s t h a n 50 m i l l i o n .

NOTE:

1968
2.1
1.6
.7
3.0
1.4
1.3
.8
7/
2.5
2.6
.7
1.8
1.0
.3
7/

of

loans.

Table

9

NET CHANGE I N MAJOR BALANCE SHEET ITEMS FOR WEEKLY REPORTING BANKS
J u n e 2 5 - A u g u s t 27 1 /
(In billions

of d o l l a r s ,

not seasonally

M a j o r ;Banks w i t h
London Branches
1969
1968

14
Items

Total
1969

T o t a l l o a n s and i n v e s t m e n t s
U.S. Treasury s e c u r i t i e s
Other s e c u r i t i e s
T o t a l l o a n s 2/
Business loans
Real Estate loans
Consumer l o a n s

!_/

-

1968

6.8
.5
2.1
5.2
2.0
.1
7/

4.9
2.3
1.6
.9
- 1.0
.5
.5

T o t a l deposits 3/
Demand d e p o s i t s 3 /
Time and s a v i n g s d e p o s i t s
L a r g e CD's 4 /
Other

-

7.9
1.9
6.0
2.9
3.1

T o t a l borrowings 5/
Other l i a b i l i t i e s
Euro-dollars 6/

-

2.6
.7
1.3

1/
2_/
3/
4/
5/
6/
7/

-

2.3
2.1
4.4
3.0
1.4
7/
1.3
.8

adjusted)

-

-

-

Other
1969

1968

3.0
1.0
1.3
2.7
.7
.1
.1

3.1
1.7
1.2
.2
.6
7/
.1

-

3.8
.4
.8
2.6
1.3
.2
.1

1.8
.6
.5
.8
.4
.5
.4

1.1
1.1
2.2
.9
1.2

-

-

6.8
3.0
3.8
1.9
1.9

2.7
7/
2.7
1.8
.9

1.2
1.3
1.1

.3
2.1
1.8
1.3
.4
.6
1.3
.8

1.4
.6
.2

D a t e s a r e f o r 1.969, c o m p a r a b l e d a t e s u s e d f o r 1 9 6 8 .
E x c l u s i v e o f l o a n s and f e d e r a l f u n d s t r a n s a c t i o n s w i t h d o m e s t i c c o m m e r c i a l b a n k s a n d n e t
valuation reserves.
Less cash i t e m s i n t h e p r o c e s s o f c o l l e c t i o n .
N e g o t i a b l e t i m e c e r t i f i c a t e s o f d e p o s i t i n d e n o m i n a t i o n o f $100,000 or more.
L a r g e l y b o r r o w i n g i n t h e F e d e r a l f u n d s m a r k e t and f r o m F e d e r a l R e s e r v e b a n k s .
Bank l i a b i l i t i e s t o f o r e i g n b r a n c h e s n e t o f b r a n c h p a r t i c i p a t i o n i n head o f f i c e d o m e s t i c
L e s s t h a n 50 m i l l i o n .

NOTE:

F i g u r e s may n o t




sum e x a c t l y due t o

rounding.

-

of

loans.

.5
.1
7/

Table

10

NET CHANGE I N MAJOR BALANCE SHEET ITEMS FOR WEEKLY REPORTING BANKS
December 2 5 - A u g u s t 27 1/
(In billions

T o t a l deposits 3/
Demand d e p o s i t s 3 /
Time and s a v i n g s d e p o s i t s
L a r g e CD's 4 /
Other
Total borrowings 5/
Other l i a b i l i t i e s 6 /

not seasonally

adjusted)

Size of bank:
t o t a l deposits
$500 m i l l i o n t o
$ 1 b i l l i o n o r more
$1 b i l l i o n
1969
1968
1968
1969

Items
T o t a l l o a n s and i n v e s t m e n t s
U.S. Treasury s e c u r i t i e s
Other s e c u r i t i e s
T o t a l loans 2/
Business loans
Real E s t a t e loans
Consumer l o a n s

of d o l l a r s ,

2/

-

8.6
3.7
3.3
1.6
1.4
.6
.2

8.9
.7
2.3
5.9
2.1
2.0
.9

-

-17.0
- 4.2
- 1 2 .7
- 9.3
- 3.5

1.4
-2.7
4.1
1.0
3.1

-

3.9
7.8

2 .5
3.8

-

.8
1.1
.5
.8
.8
.2
.2

-

4.6
2.5
2.1
1.3
.8

-

1.8
.4

-

1.6
.5
.1
1.2
.5
.3
.1

-

2.1
2.0
.1
.5
.6

-

.1
.1

o:f
Less t h a n
$500 m i l l i o n
1968
1969
-

-

1.7
1.3
.5
2.5
1.1
.7
.6
.9
1.3
.4
.5
.9
1.6
.4

1/
Dates a r e f o r 1969, comparable d a t e s used f o r 1968.
2/
E x c l u s i v e o f l o a n s and f e d e r a l f u n d s t r a n s a c t i o n s w i t h d o m e s t i c c o m m e r c i a l b a n k s and n e t
3J L e s s c a s h i t e m s i n t h e p r o c e s s o f c o l l e c t i o n .
4/
N e g o t i a b l e time c e r t i f i c a t e s of d e p o s i t i t i d e n o m i n a t i o n o f $100,000 or more.
5J L a r g e l y b o r r o w i n g i n t h e F e d e r a l f u n d s m a r k e t and f r o m F e d e r a l R e s e r v e b a n k s .
6/
L a r g e l y bank l i a b i l i t i e s t o f o r e i g n b r a n c h e s .
7/
L e s s t h a n 50 m i l l i o n .
NOTE:
F i g u r e s may n o t sum e x a c t l y due t o r o u n d i n g .




-

-

.5
.7
.4
.8
.5
.2
.4
.3
1.1
1.4
.5
.8
7/
.1

of v a l u a t i o n

reserves.

Table

11

NET CHANGE I N MAJOR BALANCE SHEET ITEMS FOR WEEKLY REPORTING BANKS
December 2 5 - A u g u s t 27 1 /
( I n per c e n t , d a t a n o t s e a s o n a l l y

t o t a l d e p o s i ts
S i z e io f b a n k :
$500 m i l l i o n t o
$1 b i l l i o n
$ 1 b i l l i o n o r more
1969
1968
1968
1969

Items
T o t a l l o a n s and i n v e s t m e n t s
U.S. Treasury s e c u r i t i e s
Other s e c u r i t i e s
T o t a l loans 2 /
Business loans
Real Estate loans
Consumer l o a n s
T o t a l d e p o s i t s 3/
Demand d e p o s i t s
T i m e and s a v i n g s
L a r g e CD's 4 /
Other
T o t a l borrowings
Other

adjusted)

liabilities

1/
2J

deposits

5/
6/

2/

- 6.1
-22.5
-14.0
- 1.6
2.7
3.4
2.6

of
Les s t h a n
$500 m i l l i o n
1968
1969

7.3
4.7
12.1
6.7
4.6
13.5
11.9

- 2.2
-23.7
- 7.3
3.2
7.9
- 2.9
5.7

- 4.5
-11.1
1.7
- 4.8
- 4.9
- 4.8
3.0

3.6
-15.9
5.5
7.8
9.8
8.7
9.9

1.2
4.9
6.7
6.6
6.7

-12.5
-13.6
-11.4
-36.1
- 5.3

- 5.4
-11.0
.4
15.8
- 3.9

-

44.3

46.6

128.5

5.0

139.1

3.1

53.1

38.8

31.1

9.2

21.6

5.1

-13.1
- 6.9
-18.4
-56.0
6.6

-

-

1.8
5.1
1.5
-15.5
4.1

Dates a r e f o r 1969, comparable dates used f o r 1968.
E x c l u s i v e o f l o a n s a n d f e d e r a l f u n d s t r a n s a c t i o n s w i t h d o m e s t i c c o m m e r c i a l b a n k s and n e t
valuation reserves.
3/
Less cash items i n the process of c o l l e c t i o n .
4/
N e g o t i a b l e t i m e c e r t i f i c a t e s of d e p o s i t i n d e n o m i n a t i o n o f $100,000 or more.
5/
L a r g e l y b o r r o w i n g i n t h e F e d e r a l f u n d s m a r k e t and f r o m F e d e r a l R e s e r v e b a n k s .
6J L a r g e l y bank l i a b i l i t i e s t o f o r e i g n b r a n c h e s .
7/
L e s s t h a n 50 m i l l i o n .
NOTE:
F i g u r e s may n o t sum e x a c t l y due t o r o u n d i n g .




-

-

of

1.1
7.8
5.0
2.5
4.6
2.4
7.7
.6
4.2
5.5
19.4
3.7

Table

12

NET CHANGE I N MAJOR BALANCE SHEET ITEMS FOR WEEKLY REPORTING BANKS
December 2 5 - J u n e 25 1 /
(In billions

of d o l l a r s ,

T o t a l l o a n s and i n v e s t m e n t s
U.S. Treasury s e c u r i t i e s
Other s e c u r i t i e s
T o t a l loans
Business loans
Real Estate loans
Consumer l o a n s

-

T o t a l d e p o s i t s 3/
Demand d e p o s i t s 3 /
T i m e and s a v i n g s d e p o s i t s
Large CD's 4 /
Other

-13.0
- 4.2
- 8.7
- 7.4
- 1.3

T o t a l borrowings 5/
Other l i a b i l i t i e s 6/

3/
4/
5/
6/
7/

adjusted)

Size of bank:
t o t a l deposits
$500 m i l l i o n t o
$ 1 b i l l i o n o r more
$1 b i l l i o n
1969
1968
1969
1968

Items

1/
2/

not seasonally

3.5
4.7
1.6
2.8
2.9
.6
.3

2 .1
8.8

-

4.5
1.6
.9
5.2
2.9
1.7
.6

7/
1.0
1.1
- 1.3
2.3

-

1.8
2.5

-

-

1.2
.8
.1
1.9
1.2
.3
.2

-

2.4
.7
.1
1.7
.4
.5
7/

1.0
.7
.3
.7
.4

-

3.0
1.9
1.1
.1
1.0

1.4
.4

-

.4
.1

of
Less t h a n
$500 m i l l i o n
1969
1968
-

-

1.5
1.1
.5
2.2
1.1
.4
.5




F i g u r e s may n o t sum e x a c t l y due t o

rounding.

.9
.6
.4
1.1
.7
.2
.3

.6
1.2
.7
.1
.7

.2
.8
1.0
.3
.6

1.2
.1

.3
.1

Dates a r e f o r 1969, comparable d a t e s used f o r 1968.
E x c l u s i v e o f l o a n s and f e d e r a l f u n d s t r a n s a c t i o n s w i t h d o m e s t i c c o m m e r c i a l b a n k s and n e t
valuation reserves.
Less cash i t e m s i n the process o f c o l l e c t i o n .
N e g o t i a b l e t i m e c e r t i f i c a t e s o f d e p o s i t i n d e n o m i n a t i o n o f $100,000 or more.
L a r g e l y b o r r o w i n g i n t h e F e d e r a l f u n d s m a r k e t and f r o m F e d e r a l R e s e r v e b a n k s .
L a r g e l y bank l i a b i l i t i e s t o f o r e i g n b r a n c h e s .
Less t h a n 50 m i l l i o n .

NOTE:

-

of

Table

13

NET CHANGE I N MAJOR BALANCE SHEET ITEMS FOR WEEKLY REPORTING BANKS
J u n e 2 5 - A u g u s t 27 1^/
(In billions

T o t a l l o a n s and i n v e s t m e n t s
U.S. Treasury s e c u r i t i e s
Other s e c u r i t i e s
T o t a l loans 2/
Business loans
Real E s t a t e loans
Consumer l o a n s

2/

-

deposits

T o t a l borrowings 5/
Other l i a b i l i t i e s 6 /
1/
2J

not seasonally

adjusted)

Size of bank:
t o t a l deposits
$500 m i l l i o n t o
$ 1 b i l l i o n o r more
$1 b i l l i o n
1969
1968
1968
1969

Items

T o t a l d e p o s i t s 3/
Demand d e p o s i t s
T i m e and s a v i n g s
L a r g e CD's 4 /
Other

of d o l l a r s ,

5.1
1.0
1.7
4.4
1.5
7/
.1

-

4.0
7/
4.0
1.8
2.2

-

1.7
1.0

4.4
2.3
1.4
.7
.8
.3
.2

-

2.0
.3
.6
1.1
.5
.4
7/

1.3
1.7
3.0
2.2
.8

-

3.6
1.8
1.7
.6
1.1

-

.7
1.4

.4
7/

.8
.1
.2
.5
7/
.2
.2

-

-

.9
.1
1.0
.6
.4
.3
7/

o:f
Less t h a n
$500 m i l l i o n
1969
1968
-

-

.3
.1
.2
.3
7/
.3
.1

-

.3
.1
.2
.4
.2

-

.4
.3

Dates a r e f o r 1969, comparable d a t e s used f o r 1968.
E x c l u s i v e o f l o a n s and f e d e r a l f u n d s t r a n s a c t i o n s w i t h d o m e s t i c c o m m e r c i a l b a n k s and n e t
valuation reserves.
3/
Less cash items i n t h e process of c o l l e c t i o n .
4/
N e g o t i a b l e time c e r t i f i c a t e s o f d e p o s i t i n d e n o m i n a t i o n o f $100,000 or more.
5/
L a r g e l y b o r r o w i n g i n t h e F e d e r a l f u n d s m a r k e t and f r o m F e d e r a l R e s e r v e b a n k s .
6V L a r g e l y b a n k l i a b i l i t i e s t o f o r e i g n b r a n c h e s .
7/
L e s s t h a n 50 m i l l i o n .
NOTE:
F i g u r e s may n o t sum e x a c t l y due t o r o u n d i n g .




-

-

of

.3
.1
7/
.3
.2
7/
.1
.1
.3
.4
.2
.2
.4
7/

Table

Business

pR e l a t i v e S i z e
c
>f 1969 L o a n
EI x p a n s i o n 1 /

of Borrowers

" O t h e r " Type o f B u s i n e s s
Service
Construction
Petroleum
Machinery Manufacturers

14

3/

Relative Size
of Firm 2/

1
2
3
4
5

7
19
18
1
9

Other P u b l i c U t i l i t i e s
T e x t i l e and A p p a r e l
Chemical
Transportation
Other F a b r i c a t e d Metals

6
7
8
9
10

2
14
6
3
13

R e t a i l Trade
Wholesale Trade
Other Durable Manufacturing
Food P r o c e s s o r
Other Nondurable Manufacturing

11
12
13
14
15

17
16
15
8
13

P u b l i c U t i l i t i e s (Communciation)
Public U t i l i t i e s
(Transportation)
Mining
Primary Metals Manufacturers

16
17
18
19

4
10
11
5

1/

D a t a i n t h i s c o l u m n a r e d e r i v e d f r o m c o l u m n 4 o f t a b l e 15A. T h e y r e f l e c t
t h e r e l a t i v e s i z e o f t h e d i f f e r e n c e b e t w e e n l o a n e x p a n s i o n i n 1969 and
average of loan expansion i n preceding three y e a r s .
Rank
of 1 is
a c c o r d e d t o l a r g e s t d i f f e r e n c e between c u r r e n t and average p a s t changes.

2/

D a t a i n t h i s c o l u m n a r e d e r i v e d f r o m c o l u m n 1 o f t a b l e 15A. R e l a t i v e s i z e
i s m e a s u r e d b y a v e r a g e volume o f a s s e t s p e r f i r m .
Rank o f 1 a c c o r d e d
t o i n d u s t r y w i t h l a r g e s t average s i z e f i r m .

3/

This category includes a l l
other 1 isted categories.




firms

that

c a n n o t be p l a c e d a p p r o p r i a t e l y

in

Table

15

]Business Loans

Assets
Per

Firm
i n Thous.
(1)

Business of Borrowers
Petroleum
Other Public U t i l i t i e s (Other than
Transportation or Communication)
Transportation Equipment Manuf.
Public U t i l i t i e s - Communication
Primary Metals Manufacturers

First
8 Months
Change
1969
(2)

Ave. Change
Thru 1st
8 Months
Preceding
3 Years

(3)

(2)-(3)

55.0

+

237

+ 33

204

13.3
11.0
7.2
7.1

+
+
+
+

156
154
3
69

- 46
+113
+ 83
+397

'110
41
- 80
-328

Chemical Manufacturers
"Other" Type of Business
Food Processors
Machinery Manufacturers
Public U t i l i t i e s - Transportation

3.0
2.3
2.1
2.1
1.4

+ 153
+1 ,302
539
+ 613
+ 234

+ 97
+417
-487
+497
+385

+ 56
+885
- 52
+116
-151

Mining

1.2
1.1
.9
.9
.8

+
+
+
+

28
173
254
615
252

+252
+241
+234
+559
+270

-280
- 68
+ 20
+ 56
- 18

.4
.3
.3
.2

+
+
+
+

73
21
360
698

+ 74
+ 18
+147
+184

- 1
+ 3
+213
+514

3 ,619

2,969

+650

O t h e r N o n d u r a b l e Goods

Manufacturers

Other Fabricated Metals
T e x t i l e and Apparel
O t h e r D u r a b l e Goods

Manufacturers

Wholesale Trade Concerns
R e t a i l Trade Concerns
Construction
Services
Total




1.3

-