MONTHLY REVIEW J UNE 1951 Trends in Fifth District Deposit Ownership B a n k s in the Fifth Federal Reserve District held total demand deposits of individuals, partnerships, and corporations amounting to $4,622 million, or 5.3% of the national total, according to estimates based on a survey conducted as of January 31, 1951. This total represented an increase of $293 million, or 6.8%, in the twelve months ending on that date, and refl
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  MONTHLY REVIEW JUNE 1951 Trends in Fifth District Deposit Ownership B anks   in the Fifth Federal Reserve District held total demand deposits of individuals, partnerships, and corporations amounting to $4,622 million, or 5.3% of the national total, according to estimates based on a survey conducted as of January 31, 1951. This total represented an increase of $293 million, or 6.8%, in the twelve months ending on that date, and reflects largely the exceptional rise in bank loans occurring in late 1950. Total loans of member banks in the Fifth District rose more than 20% from December 31, 1949 to Decem ber 30, 1950.The survey disclosed little change in the relative im portance of the various ownership groups. Balances of business concerns (which account for more than half of total demand deposits) rose slightly over the previous year, while personal deposits (including those of farm ers), accounting for more than a third of the total, showed a relative decline. Among deposits of busi nesses, those held by retail and wholesale firms ranked first in the aggregate, followed by manufacturing and mining, other nonfinancial business (including service establishments, contractors, amusement companies, and business accounts of professional people), financial en terprises other than insurance, public utilities, and in surance companies in the District. Business Deposits Demand deposits of business firms accounted for 53.3% of the District total, and increased by 7.6% over the preceding year. Nonfinancial business deposits rose by 6.7% and financial businesses showed a rise of 12.3%. Of the total business accounts, corporate de posits (representing 73% of the total amount) showed a gain of 9.1% for the year, while noncorporate accounts rose by 3.8%.The accounts of public utilities (which rose 14.2%) showed the largest increase for the twelve-month pe riod. Increases occurred in all sizes of corporate ac counts, but the increase was chiefly in accounts of $25,000 or over. Noncorporate accounts showed de creases in all size accounts except the smallest—$10,000 or less.*The second largest increase came in financial busi ness other than insurance companies. Deposits of this group (including primarily finance companies, invest ment trusts, and savings and loan associations) rose 13.4% over the previous year. Deposits in this group have increased annually since the present type of sur vey began in 1944. As in former years, most of the increase occurred in the largest size deposit group, with accounts of $25,000 or over.Manufacturing and mining showed the next largest increase in business deposits for the year. Here an in * It should be noted that, in discussing size of deposit accounts, no   information is availabe to indicate how many accounts moved from a   smaller to a larger classification, or to what extent individual accounts   changed during the year. crease of almost 11% was concentrated in the larger categories of deposit accounts, those above $10,000. Both corporate (comprising 90% of the total amount) and noncorporate reflected the increases in the larger deposit accounts, but those in the corporate group al most doubled the percentage gain shown in the non corporate group.Insurance companies increased their deposit accounts by 9.4% during 1950. Again the increase occurred in the larger size deposit accounts, those with $10,000 or over; in those with accounts under $10,000, the deposits declined.Other nonfinancial business showed an increase of 3.4% for the twelvemonth period—interestingly almost a whole percentage point above the national average. Gains were reflected in all sizes of deposit accounts, with the larger gains in the smaller size groups.Wholesale and retail trade, comprising the largest single group of business accounts, increased their de mand deposits by 3.1%—an increase considerably be low the average for all business. Here the compara tively small rise occurred mainly in the deposit size group of accounts of $25,000 or over, and was due largely to heavy inventory accumulation following the invasion of South Korea.With the exception of public utility and insurance company accounts, all business deposits in the Fifth Federal Reserve District followed the national trend. In the case of the utilities, the Fifth District increase was five points larger than the national average, while insurance company accounts increased nine points more than the national average. Deposits of Individuals In the survey year, deposits of individuals other than farmers increased 5.7%, compared with the national average of 7.0%. Considering the record level of ex penditures during the latter half of the year, this in- CHANGES IN OWNERSHIP OF DEMAND DEPOSITS OF   INDIVIDUALS, PARTNERSHIPS, AND CORPORATIONS    All Commercial Banks   Fifth Federal Reserve District   (Estimates in millions of dollars) AmountPer centChange fromOutstanding of totalJanuary 31, 1950Type of holder Jan. 31, ’51Jan. 31, ’51Dollar amt.Per centTotal business2,46453.3+174+ 7.6Nonfinancial business 2,05344.4+129+ 6.7Mfg. and mining 63213.7+ 62|-10.8Public utilities2485.3+ 31-14.2Trade87418.9+ 26- 3.1Other nonfinancial2996.5+ io- 3.4Financial business4108.9+ 45+12.3Insurance companies 1162.5+ 10+ 9.4Other financial2946.4+ 35+13.4Trust funds791.7— 3- 3.6Nonprofit associations2856.2+ 24+ 9.4Personal1,78638.6+ 89+ 5.3Farmers3487.5+ U+ 3.3Others1,43831.1+ 78+ 5.7Foreign9.2+ 9 — Total4,622100.0+293+ 6.8 -f3  y    June 1951  FEDERAL RESERVE BANK OF RICHMOND ESTIMATEDOWNERSHIP OF DEMAND DEPOSITS OF INDIVIDUALS, PARTNERSHIPS, AND CORPORATIONS  ALL COMMERCIAL BANKS Fifth DistrictFeb.Jan.Jan.Feb.Jan.Jan.Jan.Jan.19441945194619471948194919501951 (Millions of dollars) Total business _________________________________ 1,6101,8892,1332,2232,3892,3022,2902,464Nonfinancial business __________________________ 1,4201,6651,8631,9162,0031,9761,9242,053 Manufacturing and mining______________________470504529581607631570632Public utilities, transportation and communica tions __________________________________________200228228231242205217248Retail and wholesale trade ______________________560725888853890876848874 All other nonfinancial business _________________ 190207218251265263289299 Financial business _____________________________ 190224270307386326366410 Insurance companies ___________________________ 6075728315692106116 All other financial business______________________130149197224230234259294Trusts funds of banks ____________________________ 4057698570868279Nonprofit associations ____________________________ 120166192271249254260285Personal __________________________________________1,0601,3321,6331,8051,8281,7531,6971,786Farmers _________________________________________250352376393371337348Others _____________________________  ____________ 1,0821,2811,4291,4351,3821,3601,438Foreign___________________________________________102339 Total __________________________________________ 2,8403,4434,0284,3834,5404,3984,3294,622 (Percentage of total) Total business _________________________________ 56.754.953.050.752.652.352.953.3Nonfinancial business __________________________ 50.048.446.343.744.144.944.544.4 Manufacturing and mining______________________16.614.613.113,313.414.313.213.7Public utilities, transportation and communica tions __________________________________________7. and wholesale trade ______________________19.721.122.019.419.619.919.618.9 All other nonfinancial business _________________ Financial business _____________________________ Insurance companies ___________________________ All other financial business______________________4. funds of banks __________________ -_________1. associations ________ —__________________4. ___________________________   _____ ______ 37.338.740.541.240.339.939.238.6Farmers ___________________  ____  ________________ _____________________________ _____  —__31.431.832.631.631.431.431.1Foreign___________________________________________. Total __________________________________________  100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 Note: Detailed figures may not add to totals because of rounding. crease in deposits of individuals would seem to indicate a high level of personal income after taxes. It is sig nificant, however, that time deposits (held principally by individuals) have not kept pace—from December 31,1949 to December 30, 1950, time deposits held by mem ber banks in the Fifth District increased about 1% ; when the latter half of the year is considered, time de posits show a decrease of approximately 1%.Demand deposits of farmers (who held nearly one- fifth of total individual deposits) increased by 3.3% during the year. This was almost one percentage point above the national increase. In the Fifth District, cash receipts from farm marketings for the year 1950 rose 6% above receipts for 1949, but the increase occurred entirely in the late months of the year. The first six months of 1950 showed a decline of almost 5% from the previous year. For the United States as a whole, cashreceipts from farm marketings declined almost 1% dur ing the year 1950. Other Demand Deposits Demand deposits of nonprofit associations rose 9.4% from January 1950 to January 1951. Increases oc curred in all size groups but again the bulk of the in crease was in deposits of $25,000 and over. These ac counts have reflected increases each year since 1948.The only decrease in demand deposits held by banks in the Fifth District for the year occurred in balances of trust funds, which accounted for practically 2% of total demand deposits. The decrease of 3.6% was in decided contrast to the national picture, since trust funds of banks, on a national basis, showed an increase of al most 9%. Decreases occurred in those deposit accounts under $25,000, while those above $25,000 remained the same as formerly. <4  ^   June 1951  June 1952 Trends in Fifth District Deposit Ownership C ommercial   banks in the Fifth Federal Reserve Dis trict held total demand deposits of individuals, partnerships, and corporations of $5,101 million or 5.4% of the national total on January 31, 1952. This is an in crease of $479 million, or 10.4%, over January 31, 1951, the largest annual increase to occur since World War II.  All types of accounts covered by the survey registered substantial increases, the percentage change in nearly every case being above the national average.These basic facts were derived from a survey of de mand deposit ownership conducted each year by the Federal Reserve System, with the cooperation of the commercial banks. The survey covers only demand de posits of individuals, partnerships, and corporations. Information supplied by the commercial banks respond ing to the surveys provides the basis for determining the demand deposits held by each of the major economic groups in the economy both on a district basis and for the nation as a whole. The chart appearing on the cover shows, dollarwise and as a percentage of the total, the ownership by major economic groups of demand de posits of Fifth District commercial banks from the be ginning of the surveys (July 1943) to January 31, 1952.Total business accounts, which made up 53.2% of all demand deposits, rose 10.2% in the year ended January 31, 1952. Of this rise, noncorporate accounts (which were 28.5% of total business deposits) increased 16.2%, while corporate accounts increased only 8%. Non-financial business accounts, which were 83.5% of all business accounts, rose 10.4%, and financial business ac counts increased 9.5%. This contrasts with a postwar rise in nonfinancial business accounts of 26.3% and in financial business accounts of 96.9%.Personal deposits accounted for almost 39% of Fifth District demand deposits during the survey year, rising 10.8% above a year ago. From July 1945 (when they were 38.1% of total demand deposits) to January 1952, the increase amounted to $601 million, or 43.6%. Business Deposits Retail and wholesale trade is the largest business com ponent in total Fifth District demand deposits, account ing for almost 43% of all the nonfinancial business deposits on January 31, 1952. These deposits rose 10.6% from January 1951 to January 1952, whereas for the previous year the gain was only 3.4%. Recent reduc tions in inventory holdings may have accounted to some extent for the rise in these deposits during the past year, the largest year-to-year increase since World War II. Since July 1945, when they held the same relative im portance in total nonfinancial business accounts as in January 1952, deposits of retail and wholesale trade have increased 26.6%.Manufacturing and mining accounts at Fifth District commercial banks, about 31% of all nonfinancial busi ness deposits as of the survey date, increased 9.7% over last year. As of July 1945, manufacturing and mining Table ICHANGES IN OWNERSHIP OF DEMAND DEPOSITS OF INDIVIDUALS, PARTNERSHIPS, AND CORPORATIONS All Commercial Banks Fifth Federal Reserve District (Estimates in millions of dollars) January 1951 to July 1945 toJanuary 31,1952 January 31,1951 January 1952 January 1952Type of Holder Amt. out standing Per cent of total Amt. out standing Per cent of totalDollarchangePer cent changeDollarchangePer cent changeTotal business ........................ 2,715 53.2 2,464 53.3 +251 + 10.2 + 693 + 34.3Nonfinancial business ....... 2,26644.42,05344.4+ 213+ 10.4+472+26.3Mfg. and mining  ............. 69313.663213.7+ 61+ 9.7+119+20.7Public utilities ............... 2595.12485.3+ 11+ 4.4+18+7.5Trade ............................. 96718.987418.9+ 93+ 10.6+203+26.6Other nonfinancial ......... 3476.82996.5+ 48+ 16.1+132+61.4Financial business ............. 4498.84108.9+ 39+ 9.5+221+96.9Insurance companies......1272.51162.5+ 11+ 9.5+63+98,4Other financial ............... 322 6.3 294 6.4 + 28 + 9.5 + 158 + 96.3Personal................................. 1,978 38.8 1,786 38.6 + 192 + 10.8 + 601 + 43.6Farmers ............................. 4278.43487.5+ 79+22.7+183+75.0Others ............................... 1,55130.41,43831.1+ 113+ 7.9+418+36.9Trust funds ........................... 821.6791.7+ 3+ 3.8+30+57.7Nonprofit associations ......... 3126.12856.2+ 27+ 9.5+153+96.2Foreign ................................. 14 0.3 9 0.2 + 5 + 55.6 + 13 + 1,300.0Total....................................... 5,101 100.0 4,622 100.0 + 479 + 10.4 + 1,490 + 41.3 *13 ’r   June 1952  Federal Reserve Bank of Ricnmond DISTRIBUTION OF DEMAND DEPOSIT OWNERSHIP Millions of Do llors2250 2000 175015001250 1000 750500250 Under 10,000 10,000*25,000 25,000 and over concerns held 32% of all nonfinancial business deposits, and these deposits increased 20.7% in the postwar period. Within this classification, corporate businesses increased 10% from January 1951 to January 1952, while noncorporate accounts increased only 6.7%. This is the only category in which corporate business ac counts showed a larger increase in deposits than did non corporate accounts for the period under review.Demand deposits of public utilities, 11.4% of total nonfinancial business accounts, rose 4.4% for the survey year in sharp contrast to the 14.2% rise for the previous year. These accounts have fluctuated widely in the years since World War II and reflect an increase of only 7.5% for the period from July 1945 (when they accounted for 13% of all nonfinancial deposits) to January 1952. Accounts of all other nonfinancial businesses (which include service establishments, contractors, amusement companies, and business accounts of professional people) increased 16.1%. As of January 31, 1952, these ac counts made up over 15% of all nonfinancial business accounts, while in July 1945 they accounted for 12%. In the postwar period, these deposits rose 61.4%, the largest percentage increase to occur in any of the non financial business accounts.Financial business accounts are less than 9% of total Fifth District demand deposits. Deposits of insurance companies, 28.3% of all financial business accounts on January 31, 1952, rose 9.5% above January 1951. Since the beginning of the postwar period, when insurance companies held less than 2% of total demand deposits, these accounts have almost doubled in dollar amount.Other financial businesses include investment trusts, security brokers and dealers, real estate firms, finance and credit concerns, building and loan associations, in surance agencies, etc. They accounted for 6.3% of all de mand deposits as of January 31, 1952, having increased their relative share from 4.5% on July 31, 1945. These deposits increased 9.5% during the one-year period and 96.3% since the end of World War II. Personal and Other Deposits Personal demand deposits of individuals in Fifth Dis trict commercial banks rose to a total of $1,978 million as of January 31, 1952, 10.8% above the previous year, and a sharper increase than the national average of 6.3% . In this District, farmers' deposits account for about 22% of total personal deposits.The accounts of farmers, which are only reported separately by the smaller banks, rose 23% for the year and show a 75% gain since World War II. The increase may be accounted for to a certain extent by the very good cotton and tobacco crops in the agricultural sections of the Fifth District during 1951. Total farm income in the District rose $370 million in 1951 over the previous year, or nearly 20%-. Personal accounts of others than farmers rose almost 8% for the year ended January 31,1952, and about 37% in the postwar period.Trust funds of banks, which are less than 2% of all demand deposits in the Fifth District, rose less than 4% during the year ended January 31, 1952. For the whole period since World War II, however, these deposits have increased 57.7%.Nonprofit associations, accounting for 6.1% of total demand deposits, rose 9.5% in the Fifth District in com parison with the national average increase of 11.1%. This classification wras the only one covered by the sur vey which showed a lower rate of increase in this District than the rate shown for the United States. Deposits of nonprofit associations since the end of World War II, when these deposits comprised 4.4% of the total, have increased by 96.2% in the Fifth District. Table IIPERCENTAGE DISTRIBUTION OF DEMAND DEPOSIT   OWNERSHIP BY SIZE OF BANK   FIFTH FEDERAL RESERVE DISTRICT   January 31, 1952Banks having total demand deposits   of Individuals, Partnerships and Corporation?   on December 31, 1945 of:Less than $1,000,000- $10,000,000   Type of holder $1,000,000 $10,000,000 and over TotalTotal business ___________  32.0 46.2 61.2 53.2Total non-financial ............ 28.6 40.5 49.4 44.4Manufacturing andmining ..........................  5.1 11.6 16.1 13.6Public utilities ................  1.3 3.3 7.0 5.1Trade ................................. 17.3 19.5 18.8 18.9Other non-financial ____  4.9 6.1 7.5 6.8Total financial ....................  3.4 5.7 11.8 S.8Insurance companies ___  1.1 0.8 3.9 2.5Other financial ................  2.3 4.9 7.9 6.3Trust funds ........................  0.2 0.8 2.4 1.6Nonprofit associations........ 3.6 3.4 8.6 6.1Personal ............................... 64.2 49.6 27.3 38.8Foreign ............................................   .....  0.5 0.3Total ................................... 100.0 100.0 100.0 100.0Continued on pa ire \  4 y   June 1952
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