(The information referred to on pp. 971 and 1011 follows:) / Computed by dividing each year's net profit after taxes allocatle to the common stock, by the common stock equity at the begining of the year. /འ Includes profit and equity allocable to both preferred and coRROL Mr. Maletz requested (transcript, pp. 626-87 that we compte WL & return on the common stock equity only (i.e., excluding the preferred stock equity even though that also is owned by General Motors Corp. The selle se. shows the returns calculated in this matter. In our testimony and in answer to Rep. Corone i gentoa, uwait, PP. 53-854), we testified that in recent mostas Porn Actor trek VAN financed about 7 per cent of the retail new car time se of fon km RM1 sealers in areas where FMCC operates, and about 5 per cent of the Vis. #3 A (The information referred to on p. 1049 follows:) financing of all Ford dealers. We agreed to provide the Subcommittee an estimate of the share of wholesale financing that FMCC obtains in areas where it operates. According to our best estimates, in recent months FMCC has supplied about 13 per cent of the wholesale financing of Ford dealers in areas where it operates. The share of wholesale financing obtained by FMCC in areas where it operates is nearly double the share of the retail financing it obtains in these same areas (13% compared with 7%). This is because there are generally fewer alternative sources of wholesale financing (floor-planning) to the dealers than alternative sources of retail financing. Many banks and many finance companies, that are eager to provide retail financing, are reluctant to provide adequate wholesale financing--especially for smaller dealers and in non-metropolitan areas--because wholesale financing is less profitable. V. Distribution of Auto Credit Outstanding In our testimony we supplied to the Subcommittee an exhibit showing the distribution of consumer auto credit outstanding by type of institution for selected years since 1939. This table is shown below (transcript, p. 905-A). a/ Source: Federal Reserve Bulletins. b GMAC percentages estimated from credit extensions. This table shows the distribution of consumer auto credit outstanding as reported by the Federal Reserve Board (except for the GMAC data which are estimated from published data on GMAC auto credit extensions). It includes both retail contracts purchased by institutions such as banks and finance companies, and direct loans to auto buyers. This represents, in our opinion, the correct statement of the relative market shares obtained by the various institutions. As we showed in our testimony, it is meaningless to make a distinction between purchased paper and direct loans in measuring the share of the business held by various institutions. It is interesting to note that even with the relative shares of consumer auto credit expressed in this manner (that is, ignoring approximately 25% of the total outstanding), the same trends that we pointed out in our testimony are evident. That is, GMAC's share, except for a temporary post-war decline, has remained about the same and the independent finance companies have lost out badly in share of the market, primarily to the banks. Sincerely yours, Dolfitrina T. 0. Antema Vice President and Chairman, Finance Committee |