1 Commercial banks are establishments primarily engaged in accepting deposits from the public and making loans and investments. They are designated as No. 602 in the Standard Industrial Classification (SIC) Manual of the Office of Management and Budget. The industry is part of SIC 60—banking, which also includes Federal Reserve Banks, mutual savings banks, trust companies not engaged in deposit banking, and establishments performing functions closely related to banking. Nonbanking subsidiaries of bank holding companies are not included; they are separately classified by primary activity. See Federal Reserve Bulletin, December 1972. Commercial banks account for approximately 90 percent of the employment of the total SIC 60 group.
A detailed description of banking output and of the procedures followed in measuring banking productivity, output, and employee-hours, as well as the weighting scheme underlying the output measure, is available upon request.

2 There is wide agreement among industry observers that scale economies in banking have declined with the spread of branching—that is, more resources, including labor inputs, are required per unit of output. Among definitive studies are Costs in Commercial Banking, by Frederick W. Bell and Neil B. Murphy (Federal Reserve Bank of Boston Research Report No. 41, April 1968), and "Economies of Scale and Marginal Costs in Banking Operations," by George J. Benston (The National Banking Review, June 1965), reprinted in that report. Industry observers confirm that the tendencies analyzed in these works have persisted.