Edward P. Snyder

English

Research Papers in Economics

Ownership of Demand Deposits
DEMAND DEPOSITS of individuals, partner-
ships, and corporations at insured com-
mercial banks rose by an estimated $4.4
billion, or slightly more than 4 per cent, in
the year ending January 28, 1959. This
growth contrasts with a 2 per cent decline
in the year ending January 29, 1958, and is
larger than the average rate of growth in
recent years. According to estimates based
on the Federal Reserve System's most recent
Survey of Demand Deposit Ownership, the
NOTE.—This article was prepared by Edward P.
Snyder of the Board's Division of Research and
Statistics.
increase in the past year was shared by all
groups of owners except financial busi-
nesses and nonprofit organizations.
The number of accounts owned by indi-
viduals, partnerships, and corporations also
rose in the recent 12-month period, but the
increase—estimated at about 600,000
accounts or one per cent—was less than
half that in the previous year.
OWNERSHIP GROUPS
Demand deposit balances of most groups
rose in the year ending January 28, 1959,
as shown in Table 1. For most groups the
TABLE 1
DEMAND DEPOSIT ACCOUNTS OF INDIVIDUALS, PARTNERSHIPS, AND CORPORATIONS
JANUARY 28, 1959
[Estimates for insured commercial banks]
Type of holder
Number
Jan. 28, 1959
Millions
Percent-
age dis-
Increase, or
decrease (—),
from Jan. 29, 1958
Millions Per cent
Amount
Jan. 28, 1959
Billions
of
dollars
Percent-
age dis-
tribution
Increase, or
decrease (—),
from Jan. 29, 1958
Billions
of
dollars
Per cent
All holders
Domestic business
Corporate
Noncorporate
Financial business
Corporate
Noncorporate
Nonfinancial business
Corporate
Noncorporate
Nonprofit organizations
Farm operators
Individuals—personal
All other
Trust departments of banks
Foreigners
1 Decrease of less than $50 million.
2 Decrease of less than 50,000 accounts.
3 Less than 50,000 accounts.
4 Increase of less than 50,000 accounts.
54.4
5.8
100.0
10.6
0.6
0.2
1.9
3.9
3.4
7.1
0.1
0.2
0.4
0.2
0.2
5.5
1.7
3.7
2.8
3.2
42.5
0.1
(
3)
0.1
0.8
0.4
0.4
9.8
3.0
6.7
5.2
5.9
78.1
0.2
0.1
0.1
-0.2
-0.1
-0.1
0.4
0.1
0.3
0.1
-0.2
0.5
1.2
3.9
3.2
4.2
-33.6
-28.3
-38.1
8.9
9.6
8.7
3.5
-4.8
1.2
-2.8
68.1
-23.2
107.3
62.3
100.0
58.1
4.4
1.8
47.5
14.8
44.2
13.8
1.2
0.6
9.6
7.6
2.0
52.7
39.9
12.8
5.0
4.9
31.7
3.5
2.4
1.0
9.0
7.1
1.9
49.
37 11.9
4.6
4.6
29.5
3.2
2.3
1.0
-0.5
-0.3
-0.2
2.3
1.5
0.9
0)
0.3
1.5
0.7
0.7
0.1
4.3
3.0
2.5
4.4
-5.5
-3.8
-10.4
4.6
3.8
7.2
-0.5
7.6
5.0
27.2
39.3
5.6
NOTE.—Corporate farming enterprises are classified as corporate
nonfinancial business. Details may not add to totals because of
rounding.
378
Federal Reserve Bulletin: April 1959OWNERSHIP OF DEMAND DEPOSITS 379
increases exceeded by a wide margin the
declines that had occurred in the previous
year. Deposits of individuals, farmers,
and noncorporate, nonfinancial businesses
showed somewhat larger increases than
those of nonfinancial corporations. Differ-
ences in rates of change in demand deposits
among ownership groups are generally not
large enough to have any marked effect
upon the percentage distribution of deposits
among those groups.
Nonfinancial businesses, which own
roughly one-half of all demand deposits of
individuals, partnerships, and corporations,
accounted for more than half of the $4.4
billion rise in these deposits during the year.
The expansion in their deposits undoubtedly
reflected needs for larger working balances
to meet the growth in business over the
period. The percentage growth in accounts
of noncorporate, nonfinancial businesses
was nearly twice that in corporate accounts.
The former tend to fluctuate more widely in
response to changes in the level of economic
activity than the latter. The more moderate
increase in deposits of corporations may re-
flect in part the fact that larger corporations
have increased their holdings of short-term
marketable paper.
Most of the remaining deposit growth
over the year was in personal accounts of
individuals, which rose $1.5 billion or 5
per cent. Growth in disposable personal
income was the major factor in this growth.
The number of accounts also expanded,
but at a somewhat slower rate, and the
average balance in personal accounts in-
creased moderately over that for the pre-
ceding Survey date.
Balances of farm operators rose nearly
8 per cent in the year ending in January
1959, in contrast with declines between
most of the other Survey dates in this
decade. An expansion in cash farm income
TABLE 2
DEMAND DEPOSITS OF INDIVIDUALS, PARTNERSHIPS, AND CORPORATIONS, JANUARY 28, 1959
BY FEDERAL RESERVE DISTRICT AND BY TYPE OF HOLDER
Federal Reserve
district
Amount (in billions of dollars)
All
holders
Type of holder
Finan-
cial
busi-
ness
Non-
finan-
cial
busi-
ness
Farm
oper-
ators
Individ-
uals—
per-
sonal
All
other 1
Percentage increase, or decrease ( —),
from Jan. 29, 1958
All
holders
Type of holder
Finan-
cial
busi-
ness
Non-
finan-
cial
busi-
ness
Farm
oper-
ators
Individ-
uals—
per-
sonal
All
other 1
All districts
Boston
New York. . .
Philadelphia..
Cleveland
Richmond. . .
Atlanta
Chicago
St. Louis
Minneapolis..
Kansas City..
Dallas
San Francisco
107.3
5.6
20.7
6.3
8.5
6.2
8.0
16.8
4.9
3.0
7.3
8.1
11.9
9.6
0.5
2.1
0.6
0.7
0.6
0.8
1.6
0.3
0.2
0.6
0.6
0.9
52.7
3.1
12.3
2.8
4.4
2.7
3.8
8.4
1.7
1.1
3.1
3.3
6.0
4.9
()
0.1
0.1
0.2
0.3
0.3
1.0
0.5
0.6
0.8
0.6
0.5
31.7
1.4
4.1
2.1
2.6
2.1
2.6
4.6
2.0
1.0
2.3
3.1
3.9
8.4
0.5
2.1
0.6
0.7
0.6
0.6
1.2
0.3
0.2
0.4
0.6
0.6
4.3
-4.5
-0.4
10.9
3.8
5.8
5.5
3.7
9.5
0.6
2.7
12.6
8.2
-5.3
-14.5
-12.6
29.0
14.0
43.1
-20.6
2.2
3.2
-21.1
-12.9
-31.7
1.3
4.6
-1.4
2.7
-1.0
-0.6
4.0
10.0
3.0
12.9
-1.6
-3.2
25.9
12.5
7.6
50.7
-5.7
-19.0
-0.6
14.2
0.6
10.4
3.5
16.9
18.6
9.0
-8.2
5.0
20.1
-6.5
19.0
7.8
2.5
4.2
2.6
7.8
1.8
8.4
6.3
6.8
9.3
-41.8
10.1
40.5
11.4
-5.1
37.0
9.7
22.5
-4.7
27.3
90.1
4.3
i Nonprofit organizations, trust departments of banks, and
foreigners.
2 Less than $50 million.
NOTE.—Details may not add to totals because of rounding.
Federal Reserve Bulletin: April 1959380 FEDERAL RESERVE BULLETIN • APRIL 1959
during 1958, which reflected record farm
output and increased Government payments
for crop support and related programs,
probably was responsible. The number of
farm-operator accounts, however, declined
further as the number of farm families con-
tinued to decline.
Trust departments of banks showed the
largest increase for any ownership group—
39 per cent. There are few of these
accounts, and changes in their holdings are
of limited significance.
Deposits of financial businesses and of
nonprofit organizations declined during the
year. Holdings of the former group fell only
half as much as they had in the year ending
in January 1958, but the reduction was still
large—$500 million. The cause of the
decline is not immediately apparent, but it
may have reflected in part the Treasury offer-
ing of $835 million of 21-year bonds only a
few days before the Survey. This issue was
designed to meet the investment needs of
institutional investors, particularly those of
the savings type, and financial businesses
may have drawn down their deposits in
order to invest in these bonds.
The slight decline in accounts of non-
profit organizations offset only in part the
large increase that had occurred in their
holdings the previous year. The Boston
Federal Reserve District alone accounted
for most of the changes in holdings of this
group in each year.
Sharp but unusual fluctuations in deposits,
such as that noted above for financial
businesses, make it desirable not to place
undue weight on Survey data for a single
year or pair of years. In designing the
Survey, the last Wednesday in January was
selected as the Survey date to minimize
distortions resulting from intra-weekly fluc-
tuations in deposit holdings. However, for
items that fluctuate as widely as demand
deposits, these difficulties cannot be entirely
eliminated in any one-day Survey.
OTHER DISTRIBUTIONS
Data on ownership of deposits in the various
Federal Reserve districts, shown in Table 2,
show changes in total deposits of individuals,
partnerships, and corporations over the year
ranging from a decline of more than 4 per
cent in the Boston District to an increase
of nearly 13 per cent in the Dallas District.
Changes in holdings of various ownership
groups, particularly the less important ones,
tended to show wide differences from district
to district. This is to be expected not only
because of regional differences in economic
developments but also because of sampling
errors and the problem of the significance
TABLE 3
SIZE OF DEMAND DEPOSIT ACCOUNTS WITHIN
OWNERSHIP GROUPS
[Percentage distribution]
Size of account
(thousands of
dollars)
All accounts
Under 1
1-5
5-10
10 25
25-100
100 and over
Unclassified
All accounts
Under 1
1 5
5_10
10-25
25 100
100 and over...
Unclassified
Type of holder
Domestic
business
Farm
operators
Indi-
vidual—
personal
All
other *
Number of accounts
100.0
48.0
29.1
9.2
7.4
4.7
1.6
100,0
1.4
6.4
5.9
10.6
20.0
55.7
100.0
67.2
25.9
4.7
1.8
0.4
(
2)
100.0
68.2
11.2
1.5
0.7
0.2
3.S
(21
)
Amount of deposits
100.0
12.2
37.7
21.1
16.6
10.2
2.2
j
100.0
19.0
31.2
13.7
13.5
11.3
6.0
35.2
100.0
79.9
13.7
2.4
1.6
0.8
0.2
41.5
100.0
5.9
10.2
5.7
8.5
12.1
23.3
434.4
1 Nonprofit organizations, trust departments of banks, and
foreigners.
2 Less than 0.05 of one per cent.
3 Special checking accounts of individuals.
4 Accounts of trust departments of banks and foreigners.
NOTE.—Details may not add to totals because of rounding.
Federal Reserve Bulletin: April 1959CURRENT EVENTS AND ANNOUNCEMENTS 381
of data for a single day. The distribution of
deposits among ownership groups within
districts, however, is similar to the pattern
of other recent Surveys.
Distribution of deposits by size of account
within ownership groups is shown in Table
3. A similar table was last shown in the
summary of the 1957 Survey published in
the BULLETIN for May 1957. Comparison
of the data for these two Surveys indicates
that no significant changes have occurred in
the distribution. One-half of all business
deposits continue to be in accounts of
$100,000 and over, while about half of the
deposits of individuals are in accounts of
less than $5,000.
Current Events and Announcements
NEW MEMBER OF BOARD OF GOVERNORS
ASSUMES HIS DUTIES
Mr. G. H. King, Jr., who was confirmed by the
Senate as a member of the Board of Governors on
March 12, 1959, took the oath of office and
assumed his duties on March 25. Prior to taking
office, Mr. King resigned his position as a member
of the board of directors of the New Orleans
Branch of the Federal Reserve Bank of Atlanta,
which post he had held since January 1956.
APPOINTMENT OF BRANCH DIRECTOR
The Federal Reserve Bank of Kansas City has
appointed Mr. R. L. Kelsay a director of its Okla-
homa City Branch for the unexpired portion of a
term ending December 31, 1960. Mr. Kelsay is
Chairman of the Board and President of The First
National Bank in Hobart, Hobart, Oklahoma. His
service as a director began March 13, 1959. He
succeeds Mr. R. Otis McClintock, Chairman of the
Board, The First National Bank and Trust Com-
pany of Tulsa, Tulsa, Oklahoma, who resigned
recently in order to serve as the member of the
Federal Advisory Council for the Tenth District.
RESIGNATION OF DIRECTOR
Mr. Reese H. Taylor, who had served as a director
of the Federal Reserve Bank of San Francisco
since September 17, 1937, resigned effective April
8, 1959. Mr. Taylor is Chairman of the Board of
the Union Oil Company of California, Los
Angeles, California.
ADMISSION OF STATE BANK TO MEMBERSHIP IN
THE FEDERAL RESERVE SYSTEM
The following State bank was admitted to member-
ship in the Federal Reserve System during the
period February 16, 1959 to March 15, 1959:
Montana
Helena. . Commerce Bank & Trust Company
TABLES PUBLISHED ANNUALLY AND SEMIANNUALLY
Latest BULLETIN Reference
Semiannually Issue Page
Banking offices:
Analysis of changes in number of Feb. 1959 210
On, and not on, Federal Reserve Par
List, number of Feb. 1959 211
Annually
Earnings and expenses:
Federal Reserve Banks Feb. 1959 208-09
Member banks:
Calendar year..., June 1958 710-18
First half of year Nov. 1958 1346
Insured commercial banks June 1958 719
Banks and branches, number of, by class
and State Apr. 1959 442-43
Operating ratios, member banks June 1958 720-22
Stock Exchange firms, detailed debit and
credit balances Nov. 1958 1347
Banking and monetary statistics, 1958.. Feb. 1959 212-18
Summary flow-of-funds accounts,
1954-56 Oct. 1957 1190-94
Bank holding companies, Dec. 31,1957:
List of Feb. 1958 211
Banking offices and deposits of group
banks Oct. 1958 1224
Federal Reserve Bulletin: April 1959

Semiannually Issue Page Banking offices: Analysis of changes in number of Feb. 1959 210 On, and not on, Federal Reserve Par List, number of Feb. 1959 211 Annually Earnings and expenses: Federal Reserve Banks Feb.

Ownership of demand deposits

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Ownership of demand deposits

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Research Papers in Economics