Edward P. Snyder

English

Research Papers in Economics

Ownership of Demand Deposits
NEARLY FOUR-FIFTHS of the total num-
ber of demand deposit accounts at insured
commercial banks are held by individuals,
but these accounts represent less than one-
third of the total dollar volume of demand
deposits of individuals, partnerships, and
corporations. Business establishments hold
only one-tenth of the number, but these rep-
resent about three-fifths of the dollar volume.
The ownership pattern for the dollar volume
varies considerably over the country and
among various sizes of banks; for number
of accounts the ownership pattern varies
less. There appear to have been no major
changes in the ownership distribution of
demand deposits since early in 1955.
These are some of the principal findings
from the annual Survey of Demand Deposit
Ownership, conducted as of January 30,
1957, by the Federal Reserve System with
the cooperation of about 1,800 member and
nonmember insured commercial banks and
banking offices. Because of changes in
scope and statistical methods, the estimates
obtained from the 1957 Survey are not
strictly comparable with those derived from
earlier surveys. Therefore, this article dis-
cusses characteristics of the current owner-
NOTE.—The methodological and substantive re-
visions adopted in the 1957 Survey were developed
by a Federal Reserve System Committee under the
chairmanship of Madeline McWhinney, Chief, Finan-
cial and Trade Statistics Division, Federal Reserve
Bank of New York. Joseph Daly, Chief Mathe-
matical Statistician, Bureau of the Census, provided
valuable technical assistance.
This article was prepared by Edward P. Snyder of
the Board's Division of Research and Statistics.
ship distribution of demand deposits rather
than changes in the distribution since the
date of the previous survey.
1
The Survey was reinstituted this year after
having been suspended in 1956 to permit
a thorough reappraisal of the needs for de-
posit ownership information and of the
methods used in collecting the data. The
1957 Survey incorporates major improve-
ments designed to increase the reliability of
the results while minimizing the burden on
respondents. In addition, it permits the de-
termination of reliable estimates for the
number of accounts by ownership groups
and for ownership by size of bank and size
of account.
The principal changes in the survey de-
sign include extension of the sample to in-
clude insured nonmember banks, adoption
of probability sampling methods, and simpli-
fication of the ownership classification by
elimination of the industry breakdown
within the nonfinancial business category.
A description of the survey design appears
in the Technical Appendix on page 515.
OWNERSHIP DISTRIBUTION
The 1957 Survey illuminates more clearly
than before the importance of checking ac-
counts in the economic life of the country.
Data on the number of accounts, not pre-
viously available, show that on January 30
there were over 52 million demand deposit
accounts. Of these, 40.5 million or 78
*For results of the 1955 Survey, see Federal Re-
serve BULLETIN for June 1955, pp. 639-641.
511
Federal Reserve Bulletin: May 1957512 FEDERAL RESERVE BULLETIN • MAY 1957
per cent were personal accounts of indi-
viduals, as shown in Table 1. In the United
States there are approximately 50 million
TABLE 1
DEMAND DEPOSIT ACCOUNTS OF INDIVIDUALS,
PARTNERSHIPS, AND CORPORATIONS
JANUARY 30, 1957
[Estimates for insured commercial banks]
Type of holder
All holders
Domestic business
Corporate
Noncorporate....
Financial business
Corporate
Noncorporate
Nonfinancial business.
Corporate
Noncorporate
Nonprofit organizations
Farm operators
[ndividuals—personal..
Trust departments of
banks
Foreigners
Num-
ber
(mil-
lions)
52.2
5.5
1.8
3.7
0.7
0.3
0.4
4.8
1.5
3.3
2.6
3.5
40.5
0.1
0.1
Amount
(bil-
lion
dol-
lars)
104.4
61.5
47.6
13.8
11.2
8.8
2.3
50.3
38.8
11.5
4.5
4.7
30.9
2.0
0.8
Aver-
age
size
(dol-
lars)
2,000
11,207
26,466
3,755
15,430
26,961
5,906
10,564
26,355
3,496
1,725
1,350
763
35,336
11,794
Percentage
distribution
Num-
ber
100.0
10.5
3.4
7.1
1.4
0.6
0.8
9.1
2.8
6.3
5.1
6.6
77.6
0.1
0.1
Amount
100.0
58.9
45.7
13.2
10.7
8.5
2.2
48.2
37.2
11.0
4.3
4.5
29.6
1.9
0.8
NOTE.—Corporate farming enterprises are classified as corporate
nonfinancial business. Details may not add to totals because of
rounding.
nonfarm spending units. If allowance is
made for multiple-account ownership, for
example, if it is assumed that one-third of
the units holding demand deposit accounts
maintain two accounts, it appears that 60
per cent of all nonfarm spending units hold
demand deposit accounts. Most of these
accounts are small. The average size on
January 30, 1957, was less than $800.
Nearly 90 per cent had balances of less
than $1,000, and less than 3 per cent had
balances of $5,000 or more.
While accounts of individuals outnum-
bered all other accounts, they amounted to
less than 30 per cent of the total dollar
volume of deposits. Business accounts, on
the other hand, while numbering only 10.5
per cent of the total, accounted for about
60 per cent of the dollar volume.
Noncorporate businesses held two-thirds
of the number of business accounts, but less
than one-fourth of the dollar volume. Even
though corporate businesses held over three-
fourths of the dollar volume, more than
TABLE 2
SIZE OF DEMAND DEPOSIT ACCOUNTS WITHIN OWNERSHIP GROUPS
[Percentage distribution of accounts]
Type of holder
All sizes
Num-
ber
of ac-
counts
Dollar
amount
Size of account (thousands of dollars)
Under 1
Num-
ber
of ac-
counts
Dollar
amount
1-5
Num-
ber
of ac-
counts
Dollar
amount
5-10
Num-
ber
of ac-
counts
Dollar
amount
10-25
Num-
ber
of ac-
counts
Dollar
amount
25-100
Num-
ber
of ac-
counts
Dollar
amount
100 and over
Num-
ber
of ac-
counts
Dollar
amount
All holders
Domestic business
Corporate
Noncorporate
Financial
Nonfinancial
Nonprofit organizations
Farm operators
Individuals—personal. .
All others
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
181
48
32
55
45
48
81
71
186
52
10
14
123
14
29
28
30
27
29
14
23
11
13
15
3
18
4
7
17
38
31
1
12
10
9
2
4
2
3
3
14
5
6
9
20
14
1
22
12
5
9
7
2
2
1
228
212
10
7
20
9
11
14
16
14
226
10
2
17
20
19
22
21
20
20
9
12
2
(3 4)
2
4
338
57
67
20
60
56
29
3
6
369
1 Includes special checking accounts of individuals.
2 Includes accounts of foreigners unclassified as to size.
3 Includes accounts of trust departments of banks unclassified as to
size.
* Less than 0.5 of one per cent.
5 Trust departments of banks and foreigners.
NOTE.—Details may not add to totals because of rounding.
Federal Reserve Bulletin: May 1957OWNERSHIP OF DEMAND DEPOSITS 513
70 per cent of these accounts had balances
of less than $10,000, as shown in Table
2. The very largest corporate accounts,
those with balances of $100,000 or more,
amounted to only 4 per cent of the number
but to two-thirds of the deposits of corpo-
rate business accounts. These large corpo-
rate accounts amounted to 30 per cent of
the total volume of demand deposits of in-
dividuals, partnerships, and corporations.
Financial businesses held more than 10
per cent of total deposits, and nonprofit or-
ganizations and farm operators each held
about 4.5 per cent. Total holdings of trust
departments of banks and of foreigners were
smaller than holdings of other ownership
groups. However, accounts of trust de-
partments of banks, on the average, were
substantially larger than accounts of other
ownership groups.
DISTRIBUTION WITHIN FEDERAL
RESERVE DISTRICT
Differences in ownership patterns among
Federal Reserve districts are relatively minor
insofar as the distribution of number of
accounts is concerned, as shown in Table 3.
Corporate business accounts were substan-
tially more important in the highly indus-
trialized Boston and New York Federal Re-
TABLE 3
DEMAND DEPOSITS OF INDIVIDUALS, PARTNERSHIPS, AND CORPORATIONS, JANUARY 30, 1957
BY FEDERAL RESERVE DISTRICT
[Percentage distribution within districts]
Type of holder
Federal Reserve district
Boston New
York
Phila-
delphia
Cleve-
land
Rich-
mond Atlanta Chicago St.
Louis
Minne-
apolis
Kansas
City Dallas
San
Fran-
cisco
Number of accounts
All holders
Domestic business.
Corporate
Noncorporate
Financial....
Nonfinancial.
Nonprofit organizations...
Farm operators
Individuals—personal
All other 1
100
14
6
9
1
14
5
1
80
100
15
7
8
1
13
4
80
1
100
10
3
7
1
9
6
3
81
100
10
3
7
1
10
6
4
79
1
100
9
3
6
1
7
5
6
80
100
10
3
6
2
7
5
7
78
100
11
4
8
1
10
6
9
74
100
8
2
6
1
6
5
14
73
100
10
2
8
2
8
7
19
64
100
9
2
7
1
8
6
12
73
100
9
2
7
2
7
5
7
79
Amount of deposits
All holders
Domestic business.
Corporate
Noncorporate.
Financial.
Nonfinancial.
Nonprofit organizations.
Farm operators
Individuals—personal
All other i
100
70
60
10
13
57
i
4
100
11
3
1
9
4
3
82
100
70
60
10
11
59
4
1
22
4
100
58
44
14
10
48
5
2
31
5
100
62
50
12
8
54
4
2
29
3
100
50
36
14
9
41
8
5
35
2
100
57
43
13
16
40
4
5
33
2
100
60
47
13
10
50
4
5
28
3
100
42
26
16
7
34
6
12
39
1
100
40
23
17
6
34
4
20
34
1
100
52
39
14
9
43
4
10
33
1
100
50
35
15
16
33
3
7
39
1
100
56
38
17
10
46
4
5
34
2
1 Trust departments of banks and foreigners.
2 Less than 0.5 of one per cent.
NOTE.—Details may not add to totals because of rounding.
Federal Reserve Bulletin: May 1957514 FEDERAL RESERVE BULLETIN • MAY 1957
serve Districts than elsewhere; the majority
of these accounts represented nonfinancial
businesses. Accounts of farm operators, on
the other hand, were more important in all
other districts, but particularly in the Minne-
apolis, St. Louis, and Kansas City Districts.
There were only minor differences among
districts in the combined percentage of the
total number of accounts held by farm op-
erators and individuals.
Differences in the distribution of dollar
amounts were more marked than differ-
ences in the distribution of number of ac-
counts. This was the result of differences
TABLE 4
OWNERSHIP OF DEMAND DEPOSITS RELATED
TO SIZE OF BANK, JANUARY 30, 1957
[Percentage distribution within size group]
Type of holder
All holders.
Domestic business.
Corporate....
Noncorporate.
Financial. . ..
Nonfinancial.
Nonprofit organizations.
Farm operators
Individuals—personal...
All other 1
All holders
Domestic business.
Corporate
Noncorporate
Financial. . ..
Nonfinancial.
Nonprofit organizations.
Farm operators
Individuals—personal...
All other i
Size of bank (total deposits, in millions
of dollars)
Un-
der
2
2-10 10-50 50-
250
250-
1,000
1,000
and
over
Number of accounts
100
8
1
7
7
7
7
17
68
100
9
2
7
1
8
6
8
77
100
11
4
7
2
9
4
6
79
100
13
5
8
1
12
5
1
81
100
12
5
7
1
11
4
2
82
100
13
12
3
1
82
1
Amount of deposits
100
28
12
16
7
21
5
22
44
100
40
22
18
9
31
5
11
44
1
100
53
38
15
11
41
5
5
36
2
100
65
50
15
10
54
5
1
27
2
100
71
61
9
13
58
4
1
20
4
100
71
61
10
11
61
3
1
20
4
1 Trust departments of banks and foreigners.
2 Less than 0.5 of one per cent.
NOTE.—Details may not add to totals because of rounding.
in the average size of deposits among types
of holders and among districts for the same
type of holder.
DISTRIBUTION BY SIZE OF BANK
Farm operators and corporate business were
the only two ownership groups varying sub-
stantially in relative importance from one
size class of bank to another. As shown
in Table 4, the importance of corporate
business accounts in terms of both number
TABLE 5
OWNERSHIP OF DEMAND DEPOSITS RELATED
TO SIZE OF ACCOUNT, JANUARY 30, 1957
[Percentage distribution within size group]
Type of holder
All holders.
Domestic business.
Corporate
Noncorporate
Financial
Nonfinancial
Nonprofit organizations.
Farm operators
Individuals—personal.. .
All other 4
All holders.
Domestic business.
Corporate....
Noncorporate.
Financial. . ..
Nonfinancial.
Nonprofit organizations.
Farm operators
Individuals—personal...
All other 4
Size of account (thousands of dollars)
Un-
der
1 i
1-5 5-10 10-
25 2
25-
100
100
and
over
3
Number of accounts
100
1
5
1
5
5
6
183
100
22
7
15
3
19
5
11
62
(
5)
100
38
17
22
6
33
5
10
47
(
5)
100
49
27
22
7
42
5
6
35
24
100
69
50
19
13
56
5
3
23
(
5)
100
83
73
11
19
64
34
Amount of deposits
100
5
7
178
100
24
8
16
3
21
5
11
60
(
5)
100
38
17
22
6
33
5
10
47
(
5)
100
50
28
22
8
42
5
6
34
26
100
71
53
18
14
57
5
2
21
(
5)
100
87
80
7
17
70
()
3 5
1 Includes special checking accounts. The average size of these
accounts is $185.
2 Includes accounts of foreigners held in special ledgers. The
average size of these accounts is $20,800.
3 Includes accounts of trust departments of banks held in special
ledgers. The average size of these accounts is $394,000.
4 Trust departments of banks and foreigners.
5 Less than 0.5 of one per cent.
NOTE.—Details may not add to totals because of rounding.
Federal Reserve Bulletin: May 1957OWNERSHIP OF DEMAND DEPOSITS 515
and amount varied directly with size of
bank. For farm operators the relation was
inverse. Corporate business deposits ac-
counted for more than 60 per cent of the
total dollar volume in the largest banks,
reflecting both the higher proportion of the
number and the larger average size of these
accounts in the largest banks. Even in the
smallest banks, those with total deposits un-
der $2 million, accounts of farm operators
represented only one-fifth of the dollar vol-
ume of accounts and less than a fifth of the
number. However, the number of farm
operator accounts and accounts of indi-
viduals combined had about the same rela-
tive importance in all sizes of banks.
DISTRIBUTION BY SIZE OF ACCOUNT
As shown in Table 5, larger accounts are
preponderantly business accounts, particu-
larly corporate business, while the smaller
accounts are preponderantly those of indi-
viduals. The numerical importance cor-
responds closely with the dollar importance
in all size-of-account categories except the
largest, where corporate business accounts
amount to a larger proportion of the dollar
amount than of the number of accounts.
TECHNICAL APPENDIX
A completely revised survey design, based
on a probability sample of alphabetical clus-
ters of accounts, was adopted for the 1957
Survey of Demand Deposit Ownership. In
previous surveys the sample accounts in
most Federal Reserve districts were drawn
in a systematic manner throughout the en-
tire ledger of each reporting bank. Un-
der the revised procedure, demand deposit
accounts within each commercial banking
office were arrayed alphabetically in clusters
of 1,000, 500, or 250 accounts, depending
upon the total number of accounts in the
office. The clusters were arrayed by size,
and a systematic sample of clusters was
drawn.
To establish the necessary sampling frame,
data on the number and dollar amount of
accounts in each banking office were ob-
tained from larger banks through an earlier
special survey and from smaller banks by a
special tabulation of data collected in a sur-
vey of accounts conducted by the Federal
Deposit Insurance Corporation on Septem-
ber 21, 1955. Separate frames were estab-
lished in each Federal Reserve district for
member banks, large insured nonmember
banks, and small insured nonmember banks.
The samples were selected independently
from each frame.
Preliminary calculations based on data
provided by several Reserve Banks from
earlier deposit surveys indicated that the de-
sired levels of reliability could be achieved
with an over-all 2 per cent sample of the
clusters. To reduce the administrative work
involved in introducing the revised plan, the
sampling fraction for clusters in the smaller
nonmember insured banks was reduced to
1 per cent. The selection of the sample
was made centrally at the Board of Gov-
ernors. The Survey in each district was
administered by the Reserve Bank in that
district.
Banking offices containing a selected clus-
ter were requested to list on an adding ma-
chine tape the dollar amount of each de-
mand deposit account within the assigned
alphabetical cluster, and to put the owner-
ship code for the holder in the cents col-
Federal Reserve Bulletin: May 1957516 FEDERAL RESERVE BULLETIN • MAY 1957
umns. They were also requested to enu-
merate accounts with balances of $1 million
or more and to provide certain other in-
formation, including the total volume of
demand deposits of individuals, partner-
ships, and corporations of the bank on De-
cember 31, 1956, and January 30, 1957;
the aggregate number and amount of spe-
cial checking accounts; and the number and
amount of accounts of trust departments of
banks and of foreigners where these were
held in special ledgers. This additional in-
formation will be used to improve reliability
of the estimates without increasing the num-
ber of accounts to be listed.
To maximize the accuracy of estimates
of annual changes in the holdings of the
ownership groups, the sample design pro-
vides for the maintenance of an identical, or
nearly identical, sample for a number of
years. This will eliminate, to a large extent,
the recoding of a new set of accounts for
each Survey. In addition, the Survey will
be conducted annually on the last Wednes-
day in January to minimize the effects of
intraweekly fluctuations in ownership pat-
terns.
The present estimates were made by mul-
tiplying sample totals by the reciprocals of
the probabilities of selection. A study of
alternative estimating methods—which may
reduce the variances of the estimates, but
which are not likely to affect the figures sub-
stantially—is under way.
Federal Reserve Bulletin: May 1957

Ownership of demand deposits

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Ownership of demand deposits

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