Greenbook/Tealbook

Prefatory Note The attached document represents the most complete and accurate version available based on original copies culled from the files of the FOMC Secretariat at the Board of Governors of the Federal Reserve System. This electronic document was created through a comprehensive digitization process which included identifying the bestpreserved paper copies, scanning those copies, 1 and then making the scanned versions text-searchable. 2 Though a stringent quality assurance process was employed, some imperfections may remain. Please note that some material may have been redacted from this document if that material was received on a confidential basis. Redacted material is indicated by occasional gaps in the text or by gray boxes around non-text content. All redacted passages are exempt from disclosure under applicable provisions of the Freedom of Information Act. 1 In some cases, original copies needed to be photocopied before being scanned into electronic format. All scanned images were deskewed (to remove the effects of printer- and scanner-introduced tilting) and lightly cleaned (to remove dark spots caused by staple holes, hole punches, and other blemishes caused after initial printing). 2 A two-step process was used. An advanced optical character recognition computer program (OCR) first created electronic text from the document image. Where the OCR results were inconclusive, staff checked and corrected the text as necessary. Please note that the numbers and text in charts and tables were not reliably recognized by the OCR process and were not checked or corrected by staff. Content last modified 6/05/2009. CONFIDENTIAL (FR) SUPPLEMENT CURRENT ECONOMIC AND FINANCIAL CONDITIONS Prepared for the Federal Open Market Committee June 16, 1972 By the Staff Board of Governors of the Federal Reserve System SUPPLEMENTAL NOTES The Domestic Economy Housing starts. Seasonally adjusted private housing starts rose 11 per cent in May to an annual rate of 2.3 million units--nearly equaling the March rate. The rise in May was concentrated primarily in single-family units and in the North Central States. Building permits edged up 3 per cent in May to a seasonally adjusted annual rate of 2.0 million units. PRIVATE HOUSING STARTS AND PERMITS (Seasonally adjusted annual rates, in millions of units) Starts 1-family 2-or-more family Permits 1971 QIV QI 1972 Apr.(p) May(p) 2.24 2.51 2.10 2.32 1.25 .99 1.35 1.16 1.16 .94 1.33 .99 2.12 2.04 1.93 1.99 .51 .57 .63 n.a. MEMORANDUM: Mobile home shipments p/ Preliminary. n.a. - Not available. Sales of new domestic-type autos in the first 10 days of June were at an annual rate of 8.6 million units, somewhat below the first 10 days of May but 16 per cent above a year ago. -2 - Personal income increased by nearly $5 billion to $915.9 billion annual rate in May, somewhat less than the upward revised $5.5 billion rise in the previous month. Wage and salary disburse- ments increased by about $3 billion, with manufacturing and service payrolls accounting for much of the increase in private disbursements --primarily due to gains in employment in these industries. Govern- ment payrolls rose by $500 million--the same as last month. Increases in transfer payments and personal interest income accounted for the rise in nonwage income. Compared to a year ago, personal income was up by 7.9 per cent, and wage and salary disbursements by 8.6 per cent. PERSONAL INCOME (Billions of dollars; seasonally adjusted, annual rates) 1972 Total Wage and salary disbursements Government Private Manufacturing Distributive Services Other Nonwage income Less: Personal contributions for social insurance Net change April 1972May 1972 March 1972 April May 905.6 911.1 915.9 4.8 613.2 132.3 480.9 618.3 132.9 485.4 621.3 133.4 487.9 3.0 .5 2.5 171.6 173.4 150.1 114.3 47.7 174.8 150.4 115.1 47.6 1.4 .3 .8 -.1 327.3 329.2 1.9 34.6 .1 148.6 113.5 47.2 326.8 34.4 34.5 CORRECTION: Section 1-21, line 4 above the table should read unusually small April to May....(not usually). -3Domestic Financial INTEREST RATES 1972 Highs Lows May 22 June 15 Short-Term Rates Federal funds (wkly. avg.) 3-month Treasury bills (bid) Comm. paper (90-119 day) Bankers' acceptances Euro-dollars CD's (prime NYC) Most often quoted new Secondary market 4.48 (6/7) 3.94 4.62 4.50 5.94 (3/15) (4/21) (4/20) (3/27) 3.18 (3/1) 2.99 3.75 3.38 4.62 (2/11) (2/29) (2/23) (3/8) 4.32 (5/17) 4.46 (6/14) 3.79 4.38 4.25 4.75 3.90 4.50 4.38 4.81 4.50 (6/14) 4.75 (4/19) 3.50 (2/23) 3.50 (2/16) 4.38 (5/17) 4.39 (5/17) 4.50 (6/14) 4.60 (6/14) 4.44 (4/4) 4.62 (6/15) 4.76 (4/13) 3.35 (1/10) 3.88 (3/3) 3.79 (2/17) 4.26 4.50 4.58 4.34 4.62 4.68 4.75 (4/26) 5.25 (4/12) 3.88 (2/23) 3.70 (2/2) 4.62 (5/17) 4.68 (5/17) 4.62 (6/14) 4.86 (4/4) 5.32 (4/14) 3.57 (1/8) 4.32 (1/17) 4.53 4.96 4.65 4.99 5.12 (6/14) 3.15 (4/13) 4.62 (1/19) 2.35 (1/12) 5.12 (5/17) 5.12 (6/14) 2.85 (5/17) 3.00 Treasury coupon issues 5-years 20-years 6.28 (4/13) 6.22 (4/14) 5.47 (1/13) 5.95 (1/14) 5.81 6.01 5.87 6.00 Corporate Seasoned Aaa Baa 7.37 (4/24) 8.29 (1/3) 7.14 (1/17) 8.17 (1/19) 7.31 8.26 7.23 8.20 7.42 (4/14) 6.86 (1/14) 7.25 (5/19) 7.26 5.54 (4/13) 4.99 (1/13) 4.65 (1/13) 5.29 (5/18) 5.15 (5/18) 5.36 5.25 (4/13) 7.63 (5/15) 7.54 (3/20) 7.63 (5/15) 7.62 (6/12) 6-month Treasury bills (bid) Comm. paper (4-6 mo.) Federal agencies CD's (prime NYC) Most often quoted new Secondary market 1-Year Treasury bills (bid) Federal agencies CD's (prime NYC) Most often quoted new Prime municipals 4.95 (6/14) Intermediate and Long-Term New Issue Aaa Municipal Bond Buyer Index Moody's Aaa Mortgage-implicit yield in FNMA auction 1/ 1/ 5. 10 Yield on short-term forward commitment after allowance for commitment fee and required purchase and holding of FNMA stock. Assumes discount on 30-year loan amortized over 15 years. A - 1 SUPPLEMENTAL APPENDIX A QUARTERLY SURVEY OF BANK LENDING PRACTICES* Results of the May 15 Survey of Bank Lending Practices are consistent with the general improvement in the economy which has occurred since early in the year. Businesses' demands for bank financings increased significantly with bankers expressing considerable optimism that the momentum of business expansion would continue through the summer. In the current survey, the 125 participants noted two major alterations in loan markets since mid-February. (See Table 1.) First, a significant strengthening in business loan demand was reported by nearly 60 per cent of the respondents, whereas in the February survey, less than a fifth had recorded any pick-up in loan demand. Moreover, in the current survey, nearly 75 percent expressed confidence that this uptrend in loan demand would be sustained through August. The second reported change in lending practices was in higher interest rates on business loans in line with the stepped-up demand for these loans. More than a third of the panel reported firmer interest rate policies, reflecting the general increases in prime lending rates. Most other terms on business lending were unchanged from February, but it is worth noting that more than 10 per cent of the participants reported placing greater emphasis on a loan applicant's potential value as a depositor or source of collateral business. Changes in lending terms to finance companies were not quite as striking as those on business loans--less than a fourth of the banks reported firmer interest rates. The firmer interest rates policies, moreover, were partly offset by a slight increase in willingness to establish or enlarge credit lines. Regarding other portions of the loan portfolio, bankers' interest in consumer instalment loans and in single-family mortgages increased further; willingness to extend term loans to businesses increased as well. * Prepared by Marilyn Barron, Research Assistant, Banking Section, Division of Research and Statistics. A-2 A breakdown of responses by size of banks shows that a somewhat higher percentage of smaller banks (with deposits of less than $1 billion) Large banks, on the (See Table 2.) reported firmer interest rates. other hand, expressed a greater desire to extend multi-family and commercial mortgages and to make broker loans. Variations in responses by regions were negligible. (See Table 3.) NOT FOR QUOTATION OR PUBLICATION TABLE PAGE 01 1 QUARTERLY SURVEY OF CHANGES IN BANK LENDING PRACTICES AT SELECTED LARGE BANKS IN THE U.S. 1/ (STATUS OF POLICY ON MAY 15, 1972 COMPARED TO THREE MONTHS EARLIER) (NUMBER OF BANKS & PERCENT OF TOTAL BANKS REPORTING) MUCH STRONGER TOTAL BANKS PCT BANKS PCT MODERATELY STRONGER BANKS PCT ESSENTIALLY UNCHANGED MODERATELY WEAKER BANKS BANKS PCT PCT MUCH WEAKER BANKS PCT STRENGTH OF DEMAND FOR COMMERCIAL AND INDUSTRIAL LOANS (AFTER ALLOWANCE FOR BANK'S USUAL SEASONAL VARIATION) COMPARED TO THREE MONTHS AGO 125 100.0 71 56.8 44 35.2 ANTICIPATED DEMAND IN NEXT 3 MONTHS 125 100.0 93 74.4 31 24.8 MUCH FIRMER POLICY ANSWERING QUESTION BANKS PCT BANKS PCT MODERATELY FIRMER POLICY BANKS PCT ESSENTIALLY UNCHANGEO POLICY MODERATELY BANKS BANKS PCT EASIER POLICY PCT LENDING TO NCNFINANCIAL BUSINESSES TERMS AND CONDITIONS: INTEREST RATES CHARGED 100.0 36.0 61.6 1.6 COMPENSATING OR SUPPORTING BALANCES 100.0 6.4 90.4 3.2 STANDARDS OF CREDIT WORTHINESS 100.0 4.8 92 .8 6.s MATURITY OF TERM LOANS 100.0 6.4 80.8 ESTABLISHED CUSTOMERS 100.0 3.2 94.4 NEW CUSTOMERS 100.0 4.8 85.6 LOCAL SERVICE AREA CUSTOMERS 100.0 2.4 93.6 NONLOCAL SERVICF AREA CUSTOMERS 100.0 8.O qn.B 12.0 REVIEWING CAECIT LINES CR LOAN APPLICATIONS 1/ SUVFY OF AS (F LENDING PRACTICES AT MAY 15. 1972. 125 LARGE BANKS REPORTING IN THE FEDERAL RESERVE OUARTFRLY INTEREST RATF SURVFY MUCH EASIER POLICY BANKS PCT NOT FOR QUOTATION OR PUBLICATION 1 TABLE ANSWERING QUESTION BANKS PCT MODERATELY EASIER POLICY MUCH MODERATELY FIRMER POLICY ESSENTIALLY UNCHANGED POLICY PCT BANKS PCT BANKS 12 9.6 108 86.4 3 2.4 0 0.0 1 0.8 121 96.8 1 0.8 0 0.0 22.4 92 73.6 2.4 MUCH FIRMER POLICY BANKS PAGE 02 fCONTINUEDI PCT BANKS PCT EASIER POLICY BANKS PCT FACTORS RELATING TO APPLICANT 2/ VALUE AS DEPOSITOR OR SOURCE OF CCLLATERAL BUSINESS 125 100.0 2 1.6 INTENDED USE OF 125 100.0 2 1.6 125 100.0 28 COMPENSATING OR SUPPORTING BALANCES 125 100.0 4 3.2 116 92.8 3.2 ENFORCEMENT OF BALANCE REQUIREMENTS 125 100.0 6 4.0 114 91.2 2.4 ESTABLISHING NEW OR LARGER CREDIT LINES 125 100.0 11 8.8 93 74.4 15.2 THE LOAN LENDING TO "NCNCAPTIVE" FINANCE COMPANIES TERMS AND CONDITIONS: INTEREST RATES CHARGED ANSWERING QUESTION BANKS PCT CONSIDERABLY LESS WILLING BANKS PCT MODERATELY LESS WILLING BANKS PCT ESSENTIALLY UNCHANGED MODERATELY MORE MILLING BANKS BANKS PCT PCT CONSIDERABLY MORF WILLING BANKS PCT MWlLINGNESS TO MAKE OTHER TYPES OF LOANS TERN LOANS TO BUSINESSES 126 100.0 100 W.7 30 1*6. CONSUMER INSTALMENT LOANS 123 100.0 86 69.4 34 27.4 SINGLE FAMILY MORTGAGE LOANS 123 100.0 96 T8.1 23 18.7 MULTI-FAMILY MORTGAGE LOANS 123 100.0 102 S2., 12. ALL OTHER MORTGAGE LOANS 123 100.0 100 81.3 15 12.2 PARTICIPATION LOANS WITH CORRESPONDENT BANKS 123 100.0 O 0.0 3 2.4 107 8T7. 13 10.6 0 o0 LOANS TO BROKERS 122 100.0 2 1.6 3 2.9 102 83.6 13 10.7 2 1.6 9.8 2/ FOR THESE FACTORS* FIRMER MEANS THE FACTORS WERE CONSIDERED MORE IMPORTANT IN MAKING DECISIONS FOR APPROVING CREDIT REQUESTS. AND EASIER MEANS THEY WERE LESS IMPORTANT. NOT FOR QUOTATION OR PUBLICATION PAGE 03 TABLE 2 COMPARISON OF QUARTERLY CHANGES IN BANK LENDING PRACTICES AT BANKS GROUPED BY SIZE OF TOTAL DEPOSITS (STATUS OF POLICY ON MAY 15, 1972, COMPARED TO THREE MONTHS EARLIER) (NUMBER OF BANKS IN EACH COLUMN AS PER CENT OF TOTAL BANKS ANSWERING QUESTION) SIZE TOTAL $1 C OVER UNDER $1 100 100 100 100 OF BANK MUCH STRONGER $1 & OVER UNDER $1 -- 1/ TOTAL DEPOSITS IN BILLIONS MODERATELY STRONGER ESSENTIALLY UNCHANGED MODERATELY WEAKER $1 & OVER $1 & OVER S1 & OVER UNDER $1 UNDER $1 UNDER $1 MUCH WEAKER $1 6 OVER UNDER $1 STRENGTH OF DEMAND FOR COMMERCIAL AND INDUSTRIAL LOANS (AFTER ALLOWANCE FOR BANK'S USUAL SEASONAL VARIATION) COMPARED TO THREE MONTHS AGO ANTICIPATED DEMAND IN NEXT 3 MONTHS TOTAL $1 & OVER LENDING TO NCNFINANCIAL UNDER $1 MUCH FIRMER $1 C OVER UNDER $1 MODERATELY FIRMER ESSENTIALLY UNCHANGED MODERATFLY EASIER $1 C OVER $1 & OVER $1 & OVER UNDER $1 UNDER $1 UNDER $1 MUCH EASIlR $1 E OVER BUSINESSES TERMS AND CCNOITICNS: INTEREST RATES CHARGED 100 100 COMPENSATING OR SUPPORTING BALANCES 100 100 STANDARDS CF CREDIT WORTHINESS 100 100 MATURITY OF TERM LOANS 100 100 ESTARLISHFC CUSTOMEgS 100 100 NFw CUSTOMERS 100 100 LOCAL SERVICE AREA CUSTOMERS 100 100 NCNLOCAL SERVICF AREA CUSTOMERS 100 to1 RFVIFWING CREDIT LINES CR LCAN APPLICATIONS I/ 54 LARGF BANKS (DEPOSITS OF $1 BILLION OR MORE) AND SURVFY OF LENDING PRACTICES AT St RILLICN) RFPORTING IN THE FEDERAL RESERVE QUARTERLY INTEREST RATE SURVFY AS OF 71 SMALL BANKS ( DEPOSITS OF MAY 1S, 1t72. LESS THAN UNDER $1 NOT FOR QUOTATION OR PUBLICATION TABLE 2 SIZE OF BANK MUCH FIRMER POLICY NUMBER ANSWERING QUESTION St1 OVER UNDER $1 $1 & OVER PAGF 04 (CONTINUED) UNDER SI TOTAL DEPOSITS IN BILLIONS -MODERATFLY ESSENTIALLY MODERATELY EASIER UNCHANGED FIRMER POLICY POLICY POLICY $1 & OVER UNDER $1 Sl E OVER UNDER $1 $1 C OVER UNDER St MUCH EASIER POLICY S1 C OVER UNDER $1 FACTORS RELATING TO APPLICANT 2/ VALUE AS DEPOSITOR OR SOURCE OF COLLATERAL BUSINESS 100 100 INTENDED 100 L00 USE OF THE LCAN LENDING TO "NONCAPTIVE" TERMS FINANCE COMPANIES AND CONDITIONS: INTEREST RATES CHARGED COMPENSATING OR SUPPORTING BALANCES ENFORCEMENT OF BALANCE REQUIREMENTS ESTABLISHING NEW OR LARGER CREDIT LINES NUMBER ANSWERING QUESTION $1 & OVER WILLINGNESS TO MAKE OTHER UNDER S1 CONSIDERABLY LESS WILLING S1 & OVER UNDER $1 MODERATELY LESS WILLING ESSENTIALLY UNCHANGED $1 & OVER S C OVER UNDER $l UNDER S$ MODERATELY MORE WILLING $1 & OVER UNDER St TYPES OF LOANS TERM LOANS TO BUSINESSES CONSUMER INSTALMENT LOANS SINGLE FAMILY MORTGAGE LOANS MULTI-FAMILY MORTGAGE LOANS ALL OTHER MORTGAGE LOANS PARTICIPATION LOANS WITH CORRESPONDENT BANKS 100 100 LOANS TO BROKERS 100 100 2/ FOR THESE FACTORS, FIRMER MEANS THE FACTORS WERE CONSIDERED CREDIT REQUESTS, AND EASIER MEANS THEY WERE LESS IMPORTANT. MORE IMPORTANT IN MAKING DECISIONS FOR APPROVING CONSIDERABLY MORE WILLING St 8 OVER UNDER S1 NOT FOR QUOTATION OR PUBLICATION PAGF '5 TABLE 3 QUARTERLY SURVEY OF CHANGES IN BANK LENDING PRACTICES AT SELECTED LARGE BANKS IN THE U.S. STATUS OF POLICY ON MAY 15, 1972 COMPARED TO THREE MONTHS EARLIER (NUMBER OF BANKS) ALL DSTS NEW YORK BOSTOTAL CITY OUTSIDE TON PHILADEL. CLEVE- RICHMOND LAND 1/ DALLAS SAN FRAN ST. ATLAN- CHICLOUtS AGO TA MINNEAPOLIS KANS. CITY 0 3 4 2 0 0 STRENGTH OF DEMAND FOR COMMERCIAL AND INDLSTRIAL LCANS (AFTER ALLOWANCE FOR BANK'S USUAL SEASONAL VARIATION) COMPARED TO 3 MCNTHS AGO 125 MUCH STRONGER MODERATELY STRONGER ESSENTIALLY UNCHANGED MODERATELY WEAKER MUCH WEAKER 2 71 44 8 0 ANTICIPATED DEMAND NEXT THREE MONTHS 0 5 2 1 0 0 10 8 2 0 0 3 4 2 0 0 7 4 0 0 0 4 2 0 0 0 7 3 1 0 1 8 3 0 0 0 7 3 0 0 1 10 4 0 0 0 5 4 0 0 0 3 0 0 0 4 3 2 0 0 6 2 0 0 0 13 7 0 0 0 7 2 0 0 0 6 5 0 0 0 6 0 0 0 0 9 1 1 0 0 11 1 0 0 0 8 2 0 0 0 12 3 0 0 0 6 3 0 0 0 2 1 0 0 0 8 1 0 0 0 4 5 0 0 0 8 5 0 0 4 4 0 0 0 6 12 2 0 0 1 8 0 0 0 5 4 2 0 0 3 3 0 0 0 2 9 0 0 0 5 7 0 0 0 3 7 0 0 0 2 13 0 0 0 4 5 0 0 .0 1 2 0 0 1 5 3 0 0 0 4 5 0 0 0 6 7 0 0 0 0 8 0 0 0 1 17 2 0 0 0 8 1 0 0 1 5 1 0 0 0 0 1 9 1 0 0 1 11 0 0 0 2 8 0 0 0 0 15 0 0 0 0 9 0 0 0 1 2 0 0 0 2 0 0 9 0 0 0 0 13 0 0 0 8 5 0 125 0 93 31 1 0 MUCH STRCNGER MODERATFLY STRONGER ESSENTIALLY UNCHANGED MODERATELY WEAKER MUCH WEAKER LENDING TO NONFINANCIAL BUSINESSES TERMS AND CONDITIONS INTEREST RATES CHARGED 125 MUCH FIRMER POLICY MODERATELY FIRMER POLICY ESSENTIALLY UNCHANGED POLICY MODERATELY EASIER POLICY MUCH EASIER POLICY COMPENSATING BALANCES 125 MUCH FIRMER POLICY MODERATELY FIRMER POLICY ESSENTIALLY UNCHANGED POLICY MODERATELY EASIER POLICY MUCH EASIER POLICY 1I SURVEY AS OF OF LENDING PRACTICES MAY 15. 1972. 1 45 77 2 0 0 8 113 4 0 AT 125 LARGE BANKS REPORTING IN 1 0 THE FEDERAL RESERVE QUARTERLY INTEREST RATE SURVEY ? 0 0 NOT FOR QUOTATION OR PUBLICATION PAGE 06 TABLE 3 ICONTINUEDI ALL DSTS NEM YORK BOSTON TOTAL CITY OUTSIDE PHILADEL. CLEVE- RICHLAND MONO ST. ATLAN- CHICAGO LOUIS TA MINE- KANS. CITY APOLIS OALLAS SAN FRAN LENDING TO NONFINANCIAL BUSINESSES TERMS AND CONDITIONS STANDARDS OF CREDIT WORTHINESS MUCH FIRMER POLICY MODERATELY FIRMER POLICY ESSENTIALLY UNCHANGED POLICY MODERATELY EASIER POLICY MUCH EASIER POLICY MATURITY OF TERM LOANS MUCH FIRMER POLICY MODERATELY FIRMER POLICY ESSENTIALLY UNCHANGFO POLICY MODERATELY EASIER POLICY MUCH EASIER POLICY 125 0 2 to 0 1 0 9 0 0 0 0 0 0 4 2 0 0 0 10 1 0 0 1 10 1 0 1 0 7 2 o 0 1 13 1 0 0 1 10 0 0 0 0 6 0 0 0 0 10 1 0 0 0 11 1 0 1 0 9 0 0 0 0 15 0 0 0 0 9 0 0 9 0 0 9 0 1 5 0 0 10 0 0 11 1 1 7 0 0 15 n 2 0 2 0 1 1 1 0 1 0 0 0 0 0 0 0 0 0 r 1 3 0 0 0 0 0 0 0 0 0 0 0 0 O 0 8 0 19 1 9 10 1 6 ' 11 1 1 0 117 4 0 10 1 9 O 0 14 1 0 0 0 0 0 0 0 0 0 0 2 6 116 1 0 0 8 0 0 0 20 0 0 0 9 0 0 0 11 0 0 1 5 0 0 0 t1 0 0 0O 0 0 0 0 0 0 6 2 0 0 0 17 3 0 0 0 6 3 0 0 0 11 0 0 0 0 8 0 0 0 1 19 0 0 0 0 9 0 0 3 6 107 0 0 8 0 0 18 Q 0 0 0 0 14 1 0 0 4 0 0 0 1 2 0 0 1 1 7 0 0 0 9 0 0 1 12 0 0 1 2 0 0 2 5 2 1 11 1 0 0 0 2 7 0O 0 0 0 3 0 0 0 2 7 0 0 125 1 8 101 15 0 0 0 9 0 0 REVIEWING CREDIT LINFS OR LOANS ESTABLISHEC CUSTOMERS MUCH FIRMER POLICY MODERATELY FIRMER POLICY ESSENTIALLY UNCHANGED POLICY MODERATELY EASIER POLICY MUCH EASIER POLICY 1 4 118 2 0 0 0 0 0 1 12 0 0 o 1 8 9 17 0 0 9 0 125 NEW CUSTOMERS MUCH FIRMER POLICY MODERATFLY FIRMFR POLICY FSSFNTIALLY UNCHANGEC POLICY MODERATELY 125 FASTR PnLICY MUCH EASIFR POLICY LOCAL SERVICF AREA CUSTOMERS UICH FIRMFP Pr)LICY MpnFRATELY FIRMFN POLICY FSSFNTIALLY UNCHANGEO POLICY PODFRATELY EASIER POLICY lJUCHEASIER PCLICY 0 0 0 A ' 1 5 0 1 ' 9 " 0 7 3 7 " 9 0 0 0 0 125 1 PAGE 07 TABLE 3 (CONTINUED) NOT FOR QUOTATION OR PUBLICATION ALL OSTS NEW YORK BOSTOTAL CITY OUTSIDE TON PHILADEL. CLEVE- RICHMONO LAND ATLAN- CHICAGO TA ST. LOUIS MINNE- KANS. CITY APOLIS DALLAS SAN FRAN LFNOING TO NONFINANCIAL BUSINESSES REVIEWING NONLOCAL CREDIT LINES OR LOANS SERVICE AREA CUST MUCH FIRMER POLICY MODERATELY FIRMER POLICY ESSENTIALLY UNCHANGED POLICY MODERATELY EASIER POLICY MUCH EASIER POLICY 125 2 10 101 12 0 0 0 0 9 2 0 0 0 6 0 0 0 0 9 2 0 0 2 8 2 0 0 3 7 0 0 0 1 14 0 0 0 1 7 1 0 0 0 3 0 0 2 1 4 2 0 0 1 7 1 0 0 1 10 2 0 0 0 3 0 n 1 1 7 1 0 0 0 Q 0 0 0 2 0 7 0 n 0 m 9 ^ 0 1 11 0 0 5 1 1 3 5 a r " " 0 0 0 0 18s 2 0 0 0 8 0 0 0 0 20 0 0 0 0 9 0 0 0 0 11 0 0 0 2 4 0 0 0 0 9 2 0 0 2 10 0 0 1 3 6 0 0 0 4 11 0 0 0 0 9 0 0 8 0 0 0 0 20 0 0 0 0 9 0 0 0 0 11 0 0 0 0 6 0 0 0 0 11 0 0 0 0 12 0 0 0 0 n1 0 0 0 0 15 0 n 0 0 2 6 0 0 0 2 15 3 0 0 1 7 1 0 0 1 8 2 0 2 4 0 0 0 3 8 0 0 0 2 10 0 0 1 0 9 0 0" 0 3 12 0 0 ? 7 n 0 0 0 0 9 2 FACTORS RELATING TO APPLICANT 2/ VALUE AS DEPOSITOR OR SOURCE OF COLLATERAL BUSINESS MUCH FIRMER POLICY MODERATELY FIRMER POLICY ESSENTIALLY UNCHANGED POLICY MODERATELY EASIER POLICY MUCH EASIER POLICY INTENDED USE OF LOAN MUCH FIRMER POLICY MODERATELY FIRMER POLICY ESSENTIALLY UNCHANGED POLICY MODERATELY EASIER POLICY MUCH EASTER POLICY 125 2 12 108 3 0 0 0 12 1 0 125 2 1 121 1 0 0 0 9 0 0 0 n LFNDING TO "NCNCAPTIVE" FINANCE COMPANIES TERMS AND CONDITIONS INTEREST RATES CHARGED MUCH FIRMER POLICY MODERATELY FIRMER POLICY ESSENTIALLY UNCHANGEO POLICY MODERATELY EASIER POLICY MUCH EASIER POLICY 125 2 28 92 3 0 2/ FOR THESE FACTORS, FIRMER MEANS THE FACTORS AND EASIER MEANS THEY WERE CRFDIT REQUESTS. 0 WERE CONSIDERED LESS IMPORTANT. MORE IMPORTANT IN MAKING DECISIONS FnR APPROVIN, 7 " NOT FOR QUOTATION OR PUBLICATION TABLE ALL DSTS NEW YORK BOSTON TOTAL CITY OUTSIDE PAGF ^" 3 (CONTINUED) PHILADEL. CLEVE- RICHLAND MOND ST. ATLAN- CHICAGO LOUTS TA MINNFAPnLTS SAN FRAN KANS. CITY n0lLAS 1 I 7 r r 3 n 0 17 I LENDING TO "NCNCAPTIVE" FINANCE COMPANIES TERMS AND CONOITIONS: SI7E OF COMPENSATING BALANCES MUCH FIRMER POLICY MODERATELY FIRMER POLICY ESSENTIALLY UNCHANGED POLICY MODERATELY EASIER POLICY MUCH EASIER POLICY ENFORCEMENT OF BALANCE REOUIRFMENT MUCH FIRMER POLICY MODERATELY FIRMER POLICY ESSENTIALLY UNCHANGED POLICY MODERATELY EASIER POLICY MUCH EASIER POLICY ESTABLISHING NEW OR LARGER CREDIT LINES MUCH FIRMER POLICY MODERATELY FIRMER POLICY ESSENTIALLY UNCHANGED POLICY MODERATELY EASIER POLICY MUCH EASIER POLICY 125 1 4 116 4 0 0 0 7 1 0 0 1 18 1 0 0 1 7 1 0 0 0 11 0 0 0 1 5 0 0 0 0 10 1 0 0 C 12 0 0 0 0 0 0 1 0 0 0 0 7 1 0 0 0 20 0 0 0 0 9 0 0 0 0 11 0 0 0 1 5 0 0 0 0 11 0 0 0 1 11 0 0 1 1 8 0 0 0 n 15 0 0 0 0 9 0 8 0 0 0 13 7 0 0 0 8 1 0 0 0 5 6 0 0 1 4 1 0 0 1 9 1 0 0 0 10 2 0 0 1 9 0 0 2 12 1 n n 0 1 5 3 0 0 7 1 0 0 0 18 2 0 0 0 8 1 0 0 10 1 00 0 0 5 1 0 0 0 9 2 0 0 0 10 2 0 1 0 7 2 0 0 0 0 7 2 0 0 7 1 0 0 0 13 6 0 0 0 7 1 0 0 0 6 5 0 0 1 3 2 0 0 0 8 3 0 0 0 1I 1 0 0 0 5 4 1 9 0 0 9q 0 0 n 3 m 0 0 125 2 6 114 3 0 0 0 0 3 0 1 1 7 1 7 I 1 0 0 I 11 0 125 2 11 93 19 0 0 0 0 3 2 n 65 2 " 3 3 n 0 0 1 4 4 0 0 0 8 0 0 2 9 2 0 0 0 3 0 0 0 0 6 2 1 0 0 5 4 0 0 0 10 3 0 0 1 n0 2 10 1 0 WILLINGNESS TO MAKE OTHER TYPES OF LOANS TERM LOANS TO BUSINESSES CONSIDERABLY LESS WILLING MODERATELY LESS WILLING ESSENTIALLY UNCHANGED MODERATELY MORE WILLING CONSIDERABLY MORE WILLING CONSUMER INSTALMENT LOANS CONSIDERABLY LESS WILLING MODERATELY LESS WILLING ESSENTIALLY UNCHANGED MODERATELY MORE MILLING CONSIDERABLY MORE WILLING 124 1 3 100 20 0 6 13 2 0 0 0 124 0 2 86 34 2 1 0 1 9 5 0 0 0 6 3 0 NOT FOR QUOTATION OR PUBLICATION PAGE TABLE 3 (CONTINUED) ALL OSTS BOSTON NEW YORK TOTAL CITY OUTSIDE PHILADEL. CLEVE- RICHMOND LAND ATLANTA ST. CHICAGO LOUIS MTNNFAPOLIS KANS. CITY "o DAL- SAN FRAN LA- WILLINGNESS TO MAKE OTHER TYPES CF LCANS SINGLE FAMILY MORTGAGF LOANS CONSIDERABLY LESS WILLING MODERATELY LESS WILLING FSSENTIALLY UNCHANGED MODERATELY MORE WILLING CONSTIERABLY MORE WILLING MULTIFAMILY MORTGAGE LOANS CONSIDERABLY LESS WILLING MODERATELY LESS WILLING ESSENTIALLY UNCHANGED MODERATELY MORE WILLING CONSIDERABLY MORE WILLING ALL CTHER MORTGAGE LOANS CONSIDERABLY LESS WILLING MODERATELY LESS WILLING ESSENTIALLY UNCHANGED MODERATELY MORE WILLING CONSIDERABLY MORE WILLING PARTICIPATICN LOANS WITH CORRESPONDENT BANKS CONSIDERABLY LESS WILLING MODERATELY LESS WILLING ESSENTIALLY UNCHANGED MODERATELY MORE WILLING CONSIDERABLY MORE WILLING LOANS TO BROKERS CONSIDERABLY LESS WILLING MODERATELY LESS WILLING ESSENTIALLY UNCHANGED MODERATELY MORE WILLING CONSIDERABLY MORE WILLING NUMBER OF BANKS 123 0 2 96 23 2 0 0 7 1 0 0 0 15 4 0 0 O 7 1 0 0 0 8 3 0 0 0 5 1 0 0 0 7 4 0 0 0 8 0 0 0 1 17 1 0 0 0 7 1 0 0 1 10 0 0 0 0 5 1 0 0 0 9 2 0 0 0 7 1 0 0 1 15 3 0 0 0 7 1 0 0 1 8 2 0 0 0 5 1 0 0 0 7 1 0 0 0 18 2 0 0 0 8 1 0 0 0 10 1 0 0 0 8 0 0 0 0 16 4 0 0 0 6 3 0 0 0 10 1 0 0 0 0 7 2 " 13 2 0 0 10 2 0 9 0 0 0 2 12 1 0 0 0 9 2 0 0 10 2 0 0 0 1 4 1 0 0 0 9 2 0 1 0 5 0 0 0 0 7 4 0 0 to 2 0 0 0 0 1 5 1 I" 3 2 1 n 1 n 123 1 8 102 12 0 1 1 7 1 0 O 3 1 0 1 ? 5 2 9 2 A n 123 0 6 100 15 2 0 0 9 0 0 1 11 3 0 1 7 0 1 0 0 11 1 0 0 0 10 0 0 14 0 0 8 1 0 0 0 0 3 0 0 0 0 11 0 1 0 0 9 1 0 1 0 13 1 0 0 0 9 0 0 0 n 3 0 0 3 0 0 0 n 7 1 1 00 1 8 2 9 2 0 1 5 2 0 0 8 0 0 0 1 10 2 n 0 1 4 1 1 0 1 7 0 0 0 1 1n 2 0 123 0 3 107 13 0 0 122 2 3 102 13 2 125 B - 1 APPENDIX B: CONGRESSIONAL DEVELOPMENTS RELATING TO THE SOCIAL SECURITY AND WELFARE REFORM BILL.* The Senate Finance Committee has completed its work on the broad social security welfare reform bill. The Committee bill is somewhat more costly in the long run (perhaps $6.0 billion annually) than the Housepassed bill or the Administration proposals. There appears to be considerable opposition to the Senate committee bill, which is scheduled for debate in the Senate in July. Of course, the final outcome will not be known until differences are settled in the House-Senate conference committee. Staff projections incorporate the Administration's proposals for social security liberalization and welfare reform but the Staff estimate includes a 12.5 per cent social security boost projected rather than the 5 per cent increase proposed by the Administration. The Senate Committee bill includes a 10 per cent social security benefit hike, but many Senators are committed to a 20 per cent increase. There are substantial differences in the estimate of the cost of various welfare provisions of the House and Senate bills. HEW estimates that the first full year cost of the Senate Committee proposals for general welfare and workfare will be $12.7 billion compared to the Committee estimate of $6.7 billion. On the other hand the Senate Committee estimates that the cost of the welfare provisions of the House bill (essentially the Administration's family assistance plan) are underestimated by $2.0 billion. Table I below, shows the major provisions of the Senate Committee bill with alterative estimates of the first full year cost of the welfare provisions. While the cost of the various provisions of the Senate Committee bill are still not certain, the Staff has made a rough estimate of the effect the Committee bill would have on Staff estimates if enacted. These estimates are shown in Table II, below. The social security provisions of the Senate Committee bill are initially less costly than the Staff estimates. The Committee bill also includes the same wage base increase assumed in the Staff projections (from $9,000 to $10,200 beginning January 1973). However the Committee would increase the tax to 5.7 per cent instead of the 5.4 per cent expected by the Staff. The higher Committee rate would increase calendar 1973 receipts by $3.0 billion. There have been reports that even higher social security taxes will be enacted if a 20 per cent benefit increase is approved. *Prepared by William Beeman, Economist and Mary Ellen Stroupe, Economist, Government Finance Section. B -2 Table 1. PRINCIPAL PROVISIONS OF THE SENATE FINANCE COMMITTEE SOCIAL SECURITY AND WELFARE BILL Effective Date First Full-Year Cost: Additions to Present Legislation (In Billions of $) Senate Finance H.E.W. Estimate Estimate Retroactive to June 1, 1972 1/ $4.300 SOCIAL SECURITY CASH BENEFITS 1. Provisions of House Bill Changed and New Provisions Added by the Committee A. 10% across-the-board benefit increase B. Special minimum benefits up to $400 per month C. Automatic cost-of-living increases D. Retirement delayed beyond age 65 E. Reduction in waiting period for disability benefits (to 4 months) F. Extension of coverage to dependent sisters and to dependent disabled brothers. G. Disability benefits for individuals who are blind 2. .300 Jan. 1973 Jan. 1975 Jan. 1973 n.e. Jan. 1973 .250 Jan. 1973 .070 .180 Jan. 1973 .200 Jan. 1973 1.000 Jan. 1973 Jan. 1973 .650 .016 Jan. 1973 .018 Provisions of House Bill Not Changed by the Committee A. Increase in widow's and widower's benefits B. Allowable earnings increased to $2,000 per year C. Childhood disability benefits D. Continuation of child's benefits through the end of a semester TOTAL SOCIAL SECURITY CASH BENEFITS $6.984 MAJOR MEDICARE-MEDICAID PROVISIONS 1. Medicare Medicare coverage for disabled beneJuly 1, 1973 ficiaries insurance Hospital 1) 2) Supplementary medical July 1, 1973 B. Coverage of drugs under medicare C. Cover chiropractic, limit premium, n.a. other changes n.a. D. Extended care definition, other changes A. 1/ Implies first cash payment retroactive to July 1 n.e.--Not Estimated n.a.--Not Available 1.500 .350 .700 .200 .200 n.a. B -3 Effective Date 2. (In billions of $) Senate Finance H.E.W. Estimate Estimate Medicaid A. Mentally ill children B. Coverage of workfare participants C. Other changes n.a. n.a. n.a. TOTAL MEDICARE-MEDICAID PROVISIONS .100 .200 -.300 $2.950 n.a. 2.2 2.6 .3 1.2 n.a. 3.7 1.8 .8 .4 .7 -7.0 3.2 1.8 1.5 .8 -7.0 $6.7 12.7 2/ WELFARE PROGRAMS 1. 2. 3. Additional Aid to the Aged, Blind and Disabled "Workfare": Government employment Wage supplement 10% work bonus General welfare provisions A. Welfare payments B. Food stamps C. Child care D. Services, training E. Administration F. Reduction In Existing Welfare program TOTAL WELFARE PROGRAMS 2/ Using Committee figure for line 1 n.a.--Not Available upon enactment Jan. 1974 Jan. 1974 Jan. 1974 upon upon upon upon upon upon enactment enactment enactment enactment enactment enactment 5.7 1.7 1.1 1.7 B - 4 The Committee bill has higher outlays for welfare reform and for medicare and medicaid. Medicare and medicaid provisions would increase Staff outlays in the second half of calendar 1973 by about $3.0 billion, annual rate. In regard to welfare the Staff projections assume that the Administration's welfare reform doesn't begin until Fiscal year 1974, although $.5 billion start up costs are provided in fiscal 1973. In the Committee bill "workfare" would not be effective until January 1974, but aid to the aged, blind and disabled as well as several other general welfare programs would begin upon enactment. Table II PRELIMINARY ESTIMATES OF ADDITIONAL COSTS OF SENATE FINANCE COMMITTEE SOCIAL SECURITY-WELFARE REFORM BILL AS COMPARED TO STAFF ASSUMPTIONS (Billions of dollars, annual rates) Calendar Social Security Benefits 1. 10% increase instead of 12.5% Widows benefit Outside earnings Other Total 2. 3. 4. Calendar 1972 H-2 H-1 H-2 -1.0 -1.0 -1.0 - .8 - .6 --2.4 1973 1973 1973 -1.0 -1.0 --1.0 -- --1.0 -- - .4 - .3 .5 -1.2 --- 1.9 .7 --- --1.0 -- Medicare and Medicaid 1. 2. For disabled Outpatient drugs --- 3. Other,net -- -- .4 -- .2 - -- 3.0 -- 1.5 . 2.2 -1 -- 2.2 -- 1.l- Total 1.0 .3 Uelfare Reform 1. 2. 3. Aged, blind and disabled Uorkfare General Welfare Provisions net Total Grand Total --- / -1.0-- -2.4 1.0 3.-2 3.2 .51/ 6.2 1.0~3-. "- - 2.2 .4 4.7 Effective upon enactment. Staff estimates. It is difficult to determine the pattern of net costs for general welfare provisions because the Committee reports total welfare costs, including a $7.0 billion reduction in existing costs. Some unspecified portion of this recoupment will occur only when "workfare" starts in January 1974. 

Federal Reserve (1972, June 19). Greenbook/Tealbook. Greenbooks, Federal Reserve. https://whenthefedspeaks.com/doc/greenbook_19720620_part3

@misc{wtfs_greenbook_19720620_part3,
  author = {Federal Reserve},
  title = {Greenbook/Tealbook},
  year = {1972},
  month = {Jun},
  howpublished = {Greenbooks, Federal Reserve},
  url = {https://whenthefedspeaks.com/doc/greenbook_19720620_part3},
  note = {Retrieved via When the Fed Speaks corpus}
}