Full text of Review (Federal Reserve Bank of Dallas) : March 1963

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business
•

rev.eUJ

march 1963

FEDERAlL RESERVE
BANK 0F DAlLLAS
This publication has been digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org)

contents

negotiable time
certificates 01 deposit . ...................... .

3

balance-o I-payments
accounting ................................ .

5

member bank earnings
and expenses in 1962 ....................... .

8

district highlights . .......................... .

11

negotiable time
ce,-tificates of deposit
Negotiable time certificates of deposit in the
amount of approximately $600 million were
Outstanding at selected member banks in the
Eleventh District in December 1962. This volume reflects a gain of about 48 percent during
the year, compared with an advance of 24 percent during 1961. More than one-half of the
certificates outstanding at the District banks
Were in denominations of $500,000 or over.
These findings were yielded by a recent survey
of 45 District member banks reporting on their
Outstanding negotiable time certificates of deposit in denominations of less than $100,000,
$100,000 to $499,999, and $500,000 and over.
Negotiable time certificates of depositmarketable instruments issued by banks to evid~nce deposits of funds - have been issued by
District banks for many years, but a secondary
~arket for these securities was very limited and
VIrtually inactive until February 1961. Information from this market indicates, however, that
mOst District time certificates are not actively
tra~ed, with a considerable portion of the obli?atIons being redeemed by the original depos~tors. Nevertheless, time certificates are often
I~sued to nationwide companies or firms domiCiled outside the District, and it is not uncommon for out-of-District investors to redeem a
Certificate originally given to a District investor
~y a large bank. In addition to local redemptions, 11 of the larger District banks permit
their certificates to be redeemed at specified
banks in major financial centers.
Only five banks in the District survey issue
certificates in bearer form, the remaining insti~Utions giving depositors order paper. The larger
anks are the principal issuers of bearer secur-

ities, with these obligations usually being the
most actively traded in the District. It is generally believed that an order form slightly inhibits the marketability of the certificates since
some secondary market investors prefer not to
have their names appear as an endorsee.
Time certificates have been issued by District banks in order to accommodate depositors who also carry large demand deposit
balances. In addition, interim-term corporate
and municipal funds have been attracted that
otherwise would have been invested in money
market instruments or Government securities.
In some instances, time certificate requests
have been rejected if a bank believes that the
certificate will be sold in the secondary market
for a quick profit or if the depositor is a competitive-type institution seeking a short-term
investment until more profitable outlets appear. Time certificate holders who have sold
certificates in the secondary market almost
immediately after acquisition and later returned
to the same issuer for another certificate often
have been refused.
Rates to depositors on time certificates issued
by District banks differ, depending upon certificate size, customers' relationships with bank,
the need of issuing banks for funds, covenants
in security indentures, and prevailing rates on
competitive investment outlets. Maximum rates
for certificates maturing in 1 year or more generally have approximated 3 1/2 percent, but
some certificates have been issued at rates of
up to 4 percent. Banks usually space time certificate maturities in order to minimize concentrated deposit drains. Funds obtained by banks
from depositors are often invested in earning

business review/march 1963

3

assets with longer maturities than bank-issued
time certificates, but regular inflows of deposit funds and spacing of investment maturities reduce potential reserve pressures. Shortterm investment yields, however, are generally inadequate to cover interest costs on
time certificates.
Almost all of the $600 million of time certificates issued at the surveyed District banks had
original maturities of 6 months or more, with
over $250 million having maturities of 1 year
or longer. Large banks offering sizable obligations usually provided the longest maturity
dates. The most distant due date reported for
an individual certificate was 40 months, while
the average due date among the longest maturities issued by each of the respondent banks
was 14 months.
Approximately 70 percent of time certificates
outstanding at the District banks were acquired
originally by corporations and other businesses.
The remaining obligations are divided principally between states and political subdivisions
and personal accounts. Time certificates issued
to foreign and international institutions represent a small proportion of the District total.
NEGOTIABLE TIME CERTIFICATES
OF DEPOSIT OUTSTANDING
AT 45 MEMBER BANKS
ELEVENTH FE DERAL RE SERVE DI STR ICT
MILLIONS OF DOLLARS

350

300

CERTIFICATE DENOMINATION S
LESS THAN $ 100,000
_
$ 100,000-$499,999
c=:J $500,000 AND OVER

r-

250

200

r-

I SO

.........
100

50

r

r-

:--

,......

'.

o

DECEMBER 31, 1960

4

i""'"'"

I"""'"

I
DECEMBER 30,1961

DECEMBER 5,1962

NEGOTIABLE TIME CERTIFICATES OF
DEPOSIT OUTSTANDING AT 45
MEMBER BANKS, BY CITIES
Eleventh Federa l Reserve District
(Percentage of tota l doll a r volum e)

Area
Da ll as . .. , . . . .. ... . .
Houston
Austin
. . . . .. .. .
Fort Worth . . .. . ... ..
San Anton io
Wa co
.. . . ......
Midland ... ... . .....
Other cities
Tota l . . . .. .. .. . . . . .

.

Dec. 31,
1960

Dec . 30,
1961

Dec. 5,
1962

49.2
15.9
9.5
B.9
3.2
5 .8
3.1
4.4
100.0

53.0
19 .3
4.0
9.4
4 .5
2.1
3.3
4 .4
100.0

4B.4
26 .3
7.0
5.6
3.0
3.0
2.2
4 .5
100.0

=

-

Banks in the two largest cities in the District
issued approximately three-fourths of all time
certificates outstanding at the 45 institutions at
the time of the survey. Banks in Dallas negotiated about one-half of the District total, this
proportion having remained virtually unchanged
since the end of 1960. Although Dallas banks
maintained almost the same proportion of District certificates issued over this 2-year period,
the absolute amount of growth reported in time
certificates was greater than for any other District city. Surveyed banks in Houston reported
a faster rate of growth in time certificates than
Dallas banks and accounted for approximately
one-fourth of District time certificates.
When the respective populations of the cities
and their banking facilities are compared witb
dollar amounts of local time certificates outstanding, banks in Austin and Midland shoW
disproportionately large amounts of certificates
outstanding. The notable magnitude of time
certificates issued by Austin banks reflects, in
part, the weight of state and local government
accounts and public trust funds in the deposit
structure of banks in that city, while the relatively large volume of certificates negotiated by
Midland banks is related to the city's importance as a petroleum center.
LEONARD JAY SAN TOW

Financial Economist

balance-of-pay,nents
accounting
. Few subjects have generated as much interest
recent years as the U. S. balance of payments.
While a portion of the increased attention reflects a growing concern with economic matters
generally, the persistent deficits in this country's
balance of payments have graphically demonstrated the importance of international transactions. The U. S. balance of payments has
shown a deficit in every year except 1957, the
year of the Suez crisis, for over 10 years. The
large size of recent deficits and the gold losses
associated with them apparently have caused the
American public to recognize this problem as
one of general concern. It is extremely difficult,
however, to assess the causes of our balance-ofpaYments deficits and suggest appropriate rellledial action without some knowledge of the
Purposes and procedures of balance-of-payments accounting. Accordingly, the following
discussion provides a brief review of the balance
of payments as an accounting entity.
ill

The balance of payments is a record of what
t~e United States spends, lends, invests, and
gIVes to foreigners compared with what foreigners spend, lend, invest, and give to the United
States. A deficit arises when the combined payments and gifts to foreigners arising from these
transactions exceed the amount of receipts to
t~e United States from similar payments and
?ifts made by foreigners. The converse is true
III the case of a surplus. The balance of pay~ents presents, therefore, a relatively complete
Picture of this country's international transacti?ns during a particular period of time and proVides an important indicator of those problems
?riginating both internally and externally which
Illtluence the international economic position of
the United States.

By dividing the balance of payments into
several major categories (such as trade, services, and capital), greater insight can be gained
with regard to the nature of the transactions
actually involved. The items may be broken
down or combined in various ways, but, ideally,
the particular categories chosen and the way in
which they are presented should permit a meaningful examination of the components and facilitate the usage of these important economic
aggregates.
The Office of Business Economics of the U. S.
Department of Commerce has the primary responsibility for gathering and publishing the
data reflected by the balance of payments. In
addition to the data gathered by the Office of
Business Economics, a number of other Government agencies provide information. Data on
certain types of capital movements are collected
by the Federal Reserve System for the Treasury
Department. The information obtained from
these various sources often requires adjustments to make it conform with balance-of-payments concepts, to avoid double counting, and
to insure the consistency of the data. After the
data have been collected and the necessary adjustments made, the information is entered in
the balance-of-payments account.
Balance-of-payments accounting is based on
the well-known principle of double-entry bookkeeping. In such an accounting system, each
transaction requires both a debit and a credit
entry of exactly the same amount. Since the
debit entries just equal the credit entries, the
balance of payments must always be in balance.
This somewhat idealized conception cannot,
however, be achieved fully in actual practice.

business review/llwrch 1963

5

U . S . BALANCE-OF-PAYMENTS TRANSACTIONS

1962
preliminary
estimate
(In billions
of dollarsL
A. CURRENT ACCOUNT

1. Trade:
a. Exports . - In~ludes the v~lue of ~I~ goods transfer.red from U. S. to foreign
ownership, with the exception of military goods provided under grant programs.
Shipments abroad under various foreign assistance programs are included.

+20.6

Includes the value of all goods brought into the United States.

- 16.2

b. Imports. -

Balance on trade
2. Services. - Comprises a heterogeneous group of items, such as transactions
arising from international transportation of goods and passengers, tourist expendi·
tures in foreign countries , and numerous miscellaneous services. The services cat·
egory also includes earnings on foreign investments.
Balance on current account
B. PRIVATE UNILATERAL TRANSFERS. - Consists of gifts or other noncommercial trans·
actions between individuals, institutions, and religious organizations which do not reo
quire payment. Included are such items as a gift from an American citizen to
a relative abroad or goods transferred to a foreign country by CARE.

+4.4

+2.7

..:---

+7. 1

_.9

C. PRIVATE CAPITAL ACCOUNT. - Contains both short· and long·term investment items.
Included are direct investments by U. S. companies in foreign branches and subsidi·
aries and the acquisition of foreign businesses by U. S. citizens; flotation of new
foreign securities in the U. S. capital market, including sales of international organi·
zations; trading in foreign securities where a change between domestic and foreign
ownership results; shifts in long·term claims on foreigners of U. S. banks or com·
mercial concerns, with the U. S. banks' participations in Export·lmport Bank loans
a particularly important item; retirement of fo~eign securities held by U. S. citizens;
and changes in U. S. private short·term claims on foreigners (primarily bank loans).
Direct and long·term portfolio investments by foreigners in the United States are included (except for investments in U. S. Government securities), as are grants and
advances to U. S. businesses by foreigners (less repayments).

-2.7

D. U. S. GOVERNMENT ACCOUNT. - Includes military expenditures abroad; loans and
credits of the U. S. Government, with a maturity of over 1 year, to foreign govern·
ments, less repayments of loans and credits previously extended; and U. S. Govern·
ment outright grants to foreign residents and foreign governments, excluding mili·
tary grants.

-5.2

E. ERRORS AND OMISSIONS. - Represents the difference between the settlement
items category which follows and the deficit or surplus on the recorded transactions
listed above. Indeed, this category is sometimes referred to as "unrecorded items."
Net deficit (-) or surplus (+)
F. SETILEMENT ITEMS. - Co.nsists of gold purc.hases or sales (the latter being treated
as a plus item) by the United States to foreign governments and monetary authori·
ties; changes in foreign holdings of . U. S. bank accounts, holdings of short·term
dollar instruments, and foreign holdings of U. S. Government securities of any
maturity; minus changes in U. S. Government holdings of convertible foreign currencies.

6

-

_.5

_2.2

Gaps in the data and the fact that information
on debits and credits is gathered independently
combine to cause discrepancies between debits
and credits. These gaps can be traced to a number of sources, such as incorrect reporting, conceptual problems, and the inability, in some
cases, to identify the exact nature OF origin of
a transaction. For these and other reasons, it is
not possible to balance the two sides of the
account exactly, and a residual item "errors and
omissions" must be added to provide the missing
net credits or debits.

Persistent deficits in U. S.
balance of payments reflected
in a declining gold stock • ••

l

BILLIONS OF DOLLARS

:~

20
15

GOLOSTOC~

10
+1

- I

-2

R.ecent experience indicates that the errors
and omissions item is subject to rather sharp
movements. A considerable proportion of the
fluctuations in this category probably results
from unrecorded capital movements, but it
would be hazardous to attribute the changes to
anYone type of international transaction. Moreover, it is less certain whether these variations
are necessarily of a short-run nature, as is often
sUpposed. 1
The accompanying presentation on U. S.
balance-of-payments transactions breaks the acCOunt into five major categories: current ac~Ount, private unilateral transfers, private capItal account, U. S. Government account, and
errors and omissions. "Settlement items," which
indicates how the balance of payments is
settled, is also included. The categories chosen
emphasize the general sources of the payments
and receipts, as well as the specific types of
transactions included in each category. The
various receipts and payments forming these
breakdowns are summed algebraically so that
Only a net receipts or net payments figure apPears in the table.

----

1.The distinction between short-term and long-term
bapItal is sometimes misunderstood in analyzing th.e
ralance of payments. Stocks and fixed-interest secun~es having an original maturity of over 1 year are conSidered long-term assets. The fact that such assets may
actually mature in less than 1 year from the time of
erchase does not alter the long-term designation.
'loans of over 1 year in maturity are treated in a simI ar manner.

-3
-4

-5

BALANCE-OF - PAYMENTS
DEFICIT OR SURPLUS
~__~-L_ _L - - L__L - - L__~-L~~~~-"

1952

1954

1956

1958

1960

1962

SOURCE : U.S. D.portmenl 01 Comm,ttl.

Preliminary estimates for 1962 reveal that,
while the United States recorded sizable net
receipts on current account, the remaining categories all showed net payments, and a deficit
approximating $2.2 billion resulted. Private
unilateral transfers -- for example, gifts by individuals to relatives living abroad--are usually
heavily outward, as might be expected for the
country with the highest standard of living in
the world. There was a substantial outflow of
funds on capital account in 1962, both on a
long-term and on a short-term basis. The military and economic aid burden borne by the
United States is reflected in the large net payments figure indicated for the U. S. Government account. The errors and omissions category also was a negative item of relatively large
proportions.
The resulting deficit represents the amount by
which this country's transfers to foreigners exceeded transfers by foreigners to this country.
The settlement items reflect the means of paying for the deficit arising from these international
transactions. A deficit in the balance of payments
of the United States can be settled in only three
ways: by gold sales, by a buildup in claims on

business review/lnarch 1963

the United States, or by some combination of
the two. Changes in U. S. holdings of convertible foreign currencies must, of course, be netted
out of the settlement items.
No clear indications of cause and effect relationships are apparent from this brief examination of the balance of payments. However, a
general knowledge of the items included in the
various categories, together with an understanding of the accounting principles followed, per-

membe,-

ban/~

mits one to infer such relationships with more
confidence. An understanding of movements in
the various categories of transactions which give
rise to payments and receipts by the United
States is essential, of course, to an appreciation
of the resultant gains and losses reflected in the
settlement items: gold and short-term claims of
foreigners.
N. GRIGGS
Financial Economist

WILLIAM

ea,-nings

and expenses in 1962
Member banks in the Eleventh Federal Reserve District recorded net income of $90.5 million in 1962, reflecting a year-to-year gain of
2 percent and an improved earnings performance compared to the slight decline reported for
1961. The increase in net income stemmed
principally from an advance of almost 13 percent in current operating revenue, inasmuch as
current operating expenses and most other
charges against earnings rose during the year.
Noncurrent revenue items - recoveries, transfers from valuation reserves, and profits from
sales or redemptions of securities - declined
sharply, while Federal and state taxes on net
income were slightly lower.
All major sources of current earnings contributed to the advance in operating revenue,
with the dollar gains in interest and discount on
loans and interest and dividends on u. s. Government obligations being especially notable. A
substantial increase in revenue was also provided by expanded earnings from interest and

8

dividends on non-Government securities, service charges to customers, and trust department
income.
Earnings from interest and discount on loans
rose $37 million, or 12.2 percent, in 1962. Loan
expansion, especially the advances in real estate,
consumer, and business loans, contributed
heavily to this improvement in earnings. Loans
increased 9 percent during the year and, since
these earning assets account for about 45 percent of member bank total resources, represented the major source of gain in current
operating revenue. However, the substantial
growth in loans during 1962 was not sufficient
to absorb fully a large inflow of time deposits,
and banks were encouraged to seek other outlets for a large proportion of these funds .
Member banks invested heavily in nonGovernment securities, especially municipals,
during 1962. Total holdings of these issues rose
20.2 percent, and interest earnings from this

SOurce rose $4.5 million. Investments in Government securities, which usually decline in a
period of economic expansion, were unchanged
in 1962. Earnings from Treasury issues, however, increased $11 .5 million, principally reflecting noteworthy lengthening of average maturities and higher yields on Treasury bills. Interest
earnings on all securities combined increased
15 percent during the year, and the dollar gain
of $16 million equaled almost one-half of the
income growth attributable to loans.
Trust department earnings rose 15.5 percent
in 1962 to a level of $12.6 million and provided
2.4 percent of all current operating revenue.
The increase in trust department earnings continues a trend evident for a number of years and
reflects the growing importance of trust services
in the operations of District member banks.
The advance in current operating earnings
during 1962 was accompanied by an even
greater relative expansion - 16.5 percent - in
current operating expenses. Interest paid on
time and savings deposits rose sharply and accOunted for approximately two-thirds of the
year-to-year growth in total operating charges.
The expansion in these payments by District
member banks resulted from a gain of $673
million in time and savings deposits and upward
adjustments in rates paid on these funds.
The rising level of personal income contributed appreciably to the increase in individual
time and savings deposits during 1962, and the
higher rates of return generally offered to savers
following the change in Federal Reserve Board
Regulation Q further stimulated the heavy flow.
Considerable shifting of funds occurred during
the first half of the year as a result of the upward
adjustments in rates, with a substantial volume
of demand deposits being transferred to time
accounts and savers showing increased preference for time deposits at commercial banks.
. The favorable liquidity position of corporations encouraged the movement of substantial

MEMBER BANK ASSETS, 1962
ELEV ENTH FEDERAL RESERVE DISTRICT

amounts of corporate funds into time deposits,
including negotiable time certificates of deposit
- an increasingly important money market instrument. The inflow of time and savings deposits was by far the most important source of
funds to District member banks, but the funds
accruing to banks from this source represented
relatively expensive additions.
Salary and salary-related items moved up
$7 .6 million in 1962 and ·accounted for 16 percent of the increase in member bank operating
expenses. All other expense items also moved
higher, with interest and discount on borrowed
money and charges for furniture and equipment
showing rather large percentage gains.
Member banks reported decreases in 1962 in
recoveries, transfers from valuation reserves,
and profits on securities which were sold or redeemed. On the other hand, total losses, chargeoffs, and transfers to valuation reserves increased, principally because of transfers to
valuation reserves on loans. As a result of these
changes, the gain in net income before taxes was
reduced by $8.3 million.
After giving effect to all earnings and expense
items in 1962, member banks reported a gain in
net income before taxes of one-half of 1 percent.

business review/march 1963

9

come after taxes to capital accounts declined
from 8.6 percent in 1961 to 8.0 percent in 1962.
District member banks, however, paid out $44.2
million in dividends last year, which reflects a
4.7-percent rise over the previous year.

MEMBER BANK INCOME, 1962
ELEVENTH FEDERAL RE SERVE DISTRICT

LOANS

Earnings results for the year required provision of $58.2 million for state and Federal taxes
on income, or $1.0 million less than in 1961.
Despite the increase in member bank earnings
last year, the rate of return on capital was somewhat lower than in 1961. The ratio of net in-

new
membet·
bank

new
par

banks

Earnings data for all District member banks
conceal an important difference between the experiences of reserve city banks and those of
country banks. While the increases in current
operating revenue were not greatly different
between these two categories of banks, expenses
rose at a considerably faster rate at reserve city
banks. The difference is largely attributable to
the fact that interest expenses ' advanced substantially more at reserve city banks than at
country banks. As a consequence, net income
after taxes actually declined 1.7 percent at reserve city banks but increased 6.5 percent at
country banks.
N. GRIGGS
Financial Economist

WILLIAM

The Texas National Bank of Temple, Temple, Texas, a newly organized institution located in the territory served by the Head Office of the Federal Reserve
Bank of Dallas, opened for business February 25, 1963, as a member of the
Federal Reserve System. The new member bank has capital of $300,000, surplus of $300,000, and undivided profits of $150,000. The officers are : T . A.
Norman, President; J. Howard Shelton, Vice President; Jimmie R. Holder,
Vice President and Cashier; and Louis J. Kohutek, Assistant Cashier.

The Bank of Almeda, Houston, Texas, an insured nonmember bank located
in the territory served by the Houston Branch of the Federal Reserve Bank of
Dallas, was added to the Par List on its opening date, February 15, 1963. The
officers are: George Gentry, President; David R. Burnham, Vice President;
Ernest A. Jordan, Cashier; and L. K. Del'Homme, Jr., Assistant Cashier.
The Texas State Bank, San Angelo, Texas, an insured nonmember bank
located in the territory served by the Head Office of the Federal Reserve Bank
of Dallas, was added to the Par List on its opening date, February 16, 1963. The
officers are: Douglas Pond, President, and Ralph E. Hargrave, Vice President
and Cashier.

10
--------------~--------------------------~----~----.~

dist.·ict highlights
Recent information obtained from a survey of
95 member banks in the Eleventh District indicates that the upward adjustments made 'in January 1962 in maximum rates payable on time
~nd savings deposits, as permitted by changes
III regulation Q, generally have been maintained.
Although a few of the institutions reported selective downward revisions in some categories
during the course of the year, most banks indicated that their current maximum rates are unchanged from those established in early 1962.
Actually, the number of banks reporting increases in maximum rates payable is slightly
larger than the number reporting decreasesa result which probably reflects the deh~.yed response of some institutions in reviewing their
rate structures in the light of changes made by
others.
Over two-thirds of the 95 respondent banks
reported a current maximum rate of 3~ percent
f~r both regular savings accounts and other
tuue deposits held for less than 12 months. For
time and savings deposits held for 12 months or
longer, more than one-half of the surveyed
banks indicated that their maximum rates are at
the permissible level of 4 percent. It may be
noted, however, that some of the larger banks
~hich reported no change in current stated maxuuum rates indicated that actual going rates
Were reduced in the latter portion of 1962,
especially on "other time deposits." These survey results are based on contacts made in
February with all District member banks having
total deposits of $50 million or more and a 10percent random sample of banks in each of
the three deposit-size categories of less than $5
million, $5 million to $10 million, and $10
million to $50 million.
Final demand continues to be a bright spot in
the District economic picture, with consumer

spending exceeding year-earlier levels. As in the
Nation, automobile buying has been particularly
strong. New passenger-automobile registrations
for four major Texas market areas in January
reached a record for the month, exceeding the
previous high set in January 1962 by 14 percent. Automobile buying, as reflected by new
car registrations, was especially favorable in
the Dallas, Houston, and San Antonio areas.
District department store sales during the 8
weeks ended February 23 were 2 percent above
the corresponding 1962 period, but sales in the
first 3 weeks of February were 3 percent less
than in the comparable weeks last year.
District petroleum activity also expanded in
early February, reflecting strength in both domestic and foreign product demand. Production
and processing of crude oil increased, and drilling operations strengthened. Crude oil production in the District rose 3 percent during the first
15 days of February to an average of over 3 million barrels daily. District crude oil output is
expected to decline fractionally in March, principally because of a reduction in Texas oil allowabIes. The Texas allowable - calculated on the
basis of 28 percent of full production from prorated wells - has been set at slightly over 2.8
million barrels daily, or about 60,000 barrels
daily below the February level. Louisiana has
raised its March allowable by 16,000 barrels
daily, while the New Mexico allowable is little
changed.
Refineries located in the Eleventh Federal
Reserve District boosted national processing
of crude oil. Crude oil runs to District stills during the first 2 weeks of February were 7 percent
above the early-January level and 8 percent
higher than a year ago. District drilling activity
was expanded in late January and early February. Both total well completions and total

business review/march 1963

11

footage drilled in the District during the 4 weeks
ended February 9 were 40 percent higher than
in the prior 4-week period. The number of
rotary rigs active in the District in early February, however, held at the early-January
average.
Contract awards during February indicate
that near-term construction activity may be
strengthened further in the District states. A
substantial portion of the contracts awarded in
early I:ebruary was for public works construction, including several for educational facilities.
Three multimillion-dollar projects, totaling over
$25 million, are especially noteworthy; these
contracts are for the building of a new county
courthouse in Dallas, the erection of a Post
Office and Federal building in Austin, and the
construction of a main aqueduct between Sanford and Amarillo.

12

A further prospective gain in beef output
in the Southwest is indicated by recent data
on cattle numbers. The inventory of cattle
and calves on farms and ranches in the District states at the beginning of this year totaled
an all-time high of 18.1 million - up 4
percent from a year earlier. The cattle population has been increasing each year since the
drought ended in 1957. All of the gain has been
in beef cattle, since milk cattle numbers have
shown steady decreases during the past decade.
However, the upward trend in production per
milk cow has offset the reduced herd size. The
potential expansion in beef output lies in the
size of the basic breeding herd, as the inventory
of cows of calving age was 6 percent above a'
year ago. In contrast to the expansion in the
cattle population, sheep numbers in the Southwest were 3 percent lower at the start of 1963,
showing the second successive annual decline.

SliAlilSTICAI! SUPPI!EMENT
to the

BUSINESS REVIEW

March 1963

FEDERAL RESERVE BANK
OF DALLAS

CONDITION STATISTICS OF WEEKLY REPORTING
MEMBER BANKS IN LEADING CITIES

RESERVE POSIlIONS OF MEMBER BANKS
Eleventh Federal Reserve District

Eleventh Federal Reserve District

(Averages of doily flgures. In thousands of dollars)

(In thousands of dollars)

~

f e b. 6, 1963

4 weeks ended
Jon. 2, 1963

5 weeks ended
feb. 7, 1962

598,811
555,6 13
43, 198
594,020
4,791
7, 100
-2,309

607,905
561,816
46,089
599,869
8,036
16,464
-8,428

599,089
557,702
41,387
591,610
7,479
5,829
1,650

549,752
432,198
117,554
496,868
52,884
356
52,528

535,359
419,169
116,190
486,479
48,880
3,982
44,898

560,099
45 1,687
108,4 12
487,689
72,410
289
72, 121

1,148,563
987,811
160,752
1,090,888
57,675
7,456
50,219

1,143,264
980,985
162,279
1,086,348
56,916
20,446
36,470

1,1 ~9 , 188

5 weeks en de d

feb. 20,
1963

Item

Jon. 23,
1963

feb. 21,
1962

ASSETS
1,809,290
50,599

1,831,428
48,400

1,755,764
48,892

10,274
47,959

274
46,950

274
59,236

2,113
208,299
83,713
1,359

2,113
213,350
75,590
1,395

4,565
171,791
93,220
216

Real estate loans•••..... , •... , ... , ....• , ..
All other loans. , , ...•.•.... , ... , , • •• ...••.

96,721
210,603
289,357
841,589

91,778
213,920
284,441
834,566

83,374
159,880
245,86 1
767,538

Gross loan s, .................•.•..• .
Less reserves and unallocated charge-offs ...

3,65 1,876
68,952

3,644,205
68,203

3,390,611
62,681

Net loans. ...... . , .•..... •.• . , . •• .•.•..

3,582,924

3,576,002

3,327,930

Treasury b1l1s ..•• • •.••••••••.••.••.•••••••

162,837
135,831

161,784
105,997

141,260
85,936

Other securitie s ....•.•.•...•.. . ... ...... ..

152,398
647,284
521,967
538,854

191 ,589
640,088
499,224
537,200

263,489
736,540
348,096
413,270

Tota l investments ....•. • . , ... ... . , ...••..

2,159,171

2,135,882

1,988,591

Co sh Items in process of collection .•. .. , ..••..
Balances with bonks in the United States .......
Balances with banks in foreign countries •.•••..
Currency and coin . , ... . ...................
Reserves with Federol Reserve Bank ..•.... . ...
Other assets •• . .. , , .. . ..... , ..•••••..•.•••

570,979
489,102
4,955
59,892
555,913
228,633

612,718
498,976
2,568
63,570
569,168
227,996

581,163
478,799
2,224
57,322
574,477
200,616

TOTAL ASSETS •••••... • •.••..• ••...••

7,651,569

7,686,880

7,21 1,122

3,022,028

3,174,528

3,055,909

3,784
131,191
291,840

3,787
84,388
268,394

2,293
105,477
262,549

1,070,0 17
14,617
52,384

1,105,598
16,354
55,866

1,048,607
13,635
41,717

4,585,86 1

4,708,915

4,530,187

1,0 17,380
804,680

1,009, 135
769,691

863,105
650,580

1,510
6,287
329,662

1,509
6,287
316,885

3,005
6,967
326,143

4,763
2,350

4,553
2,150

4,266
2,200

Commercial and industrial loans • • ..........•.
Agricultural loans •.•.................••.. . •

loans to brokers and dealers for
purchasing or carrying:

U. S. Gove rnme nt se curities ...... . .........
Other securities ..... .. .... .... ..... •....

1Iem
RESERVE CITY 8ANKS
Total re se rves held ..........••
With Federal Reserve Bank ....
Currency and coin .... .. ... , .
Required reserves ..... •. ....•.
Excess reserves, •••...........
Borrowings . .. ....•..•. .. . . ...
Free reserves .... . .... . .......

COUNTRY BANKS

Other loans for purchasing or carrying:

U. S. Government securities ................
Other se curities .. ....................•..
Loons to domestic commercial bonks •••. . ..... .

loans to foreign banks . .. ..................
loans to other flnancia l institutions:
Sales flnance, pe rsonal Anance, etc ... . .. .. ..
Soyings banks, mtge. cos., ins. cos., etc .......

Treasury certiflcates of indebtedness . ....... ..
Treasury nOles and U . S. Government bond s,
including guaranteed obligations, maturing:

Within 1 year •••.. •••. .••••.. ••••.. •••.
After 1 but within 5 years .••..............

After 5 years • •. .••••.•••.•••...•••••••.

lIA81LITIES AND CAPlT AL ACCOUNTS
Demand deposits
Individuals, partnerships, and corporations .• .•
Foreign governments and ofAcial institutions,
central bonks, and international institutions •.
U. S. Government ... .... , .•.•.. , ..•. .. ..
States and political subdivisions .....•..• •. .
Banks in the United States, including
mutual savings banks .. . , ..... •• ..•. . ..•
Banks in foreign countries . ..... . •. . .••••. ,
CertiAed and ofAcers' checks, etc., ••... . •..

Total demand d eposi ts •••.•• ••• • . ••••• •
Time and savings deposits
Individual s, partnerships, and corporations
Savings deposits .......•........• . . . ..
Other time deposits . •... , . .• , ..... , •••.
Foreign governments and ofAcial institutions,
central bonks, and international institutions . •
U. S. Government, including postal savings •..
Stotes and political subdivisions •....•. , .• ••
Bonks in the United States, including
mutual soving s banks, .•........... . ....
Bonks in foreign countries . .... ....... ...•.
Total time and savings deposits . ••... . ..•

2,166,632

2,110,210

1,856,266

Tota l deposits ...... ..••. , ....•.•...

Capitol accounts. , •...... , .. . ... .........•

6,752,493
115,455
123,906
659,715

6,819,125
106,915
11 0,160
650,680

6,386,453
103,550
94,389
626,730

TOTAL LIABILITIES AND CAPITAL ACCOUNTS.

7,651,569

7,686,880

7,211,122

Bills pa yable, rediscounts, etc ..•.............

All other liabilities •••••.•••••.• . •.• • •..••..

CONDITION OF THE FEDERAL RESERVE BANK OF DALLAS

Tota l reserves held ..... ..... . .
With Federal Reserve Bank . . ..
Currency and coin ...........
Required reserves . ... .. ..•....
Excess reserves •••. , ........ , .
Borrowings ... . ..... ..•. ......
Free reserves ... . . . .. .........

ALL MEMBER 8ANKS
Total reserves held ... .. , •.. . ••
With Federal Reserve Bank ....
Currency and coin ...........
Required reserves ... ..... . . . ..
Excess reserves .••....... , . . ..
Borrowings . . .•.....•........ .
Free reserves . ... . .... .. .... ..

GROSS DEMAND AND TIME DEPOSITS OF MEMBER BANKS
Eleventh Fed e ral Rese rve District
(Averag es of doily flgures . In millions of do llars)
~

GROSS DEMAND DEPOSITS

Total gold certiflcate reserves ...• ...•. ... •..
Discounts for member banks . .. ... .. , .....••
Other di scounts and advances. , ........ , .. .
U . S. Government securities, ..... . ......... .
Total earning assets .... .. •..............• ,
Member bank reserve deposits •......... .. ..
Federal Reserve notes in actual circulation . •. . •

---

-

Reserve
city banks

Country

Reserve

CountrY

Total

bonks

Total

city bonks

bonks

1961 : January •••
1962: January •• •

8,135
8,584
8,021
8, 194
8,337
8,370
8,496
8,7 11

4,032
4,179
3,967
4,096
4, 170
4, 11 3
4,180
4,234

4,103
4,405
4,054
4,098
4,167
4,257
4,316
4,477

2,564
2,990
3,538
3,357
3,398
3,435
3,497
3,602

1,308
1,508
1,646
1,666
1,688
1,701
1,718
1,771

1,256
1,482
1,892
1,691
1,710
1,734
1,779
1,831

August •. . ,
September.

October •••
November ..
December .•

1963: January •• •

---

CONDITION STATISTICS. OF ALL MEMBER BANKS
Eleventh Fe d e ral Reserve District
(In millions of dollars)

======================================================~~
Jan. 30,
1963

Dec . 26,
1962

Jan.31,
1962_____

Loans and discounts .. .•.••••..•.........
U . S. Government obligations ...... , .... ..
Oth er se curities . ...••.... , •..... . . , ....
Reserves with Federal Reserve Bank ... . •.•
Cash in va ult e , . .. ....... ... ..... . . ....
Balances with banks in th e United States . . ..
Balances with bonks in foreign countries e •• .
Cash items in process of co ll ection . . ...•.••
Oth er assets e •••..... .. , ...•.......••..

6,091
2,912
1,173
936
175
1,099
2
606
413

6, 11 1
2,920
1,163
919
167
1,226
4
747
367

5,559
2,887
995
920
162
1,15

TOTAL ASSETse ••••• ••..•••...• •.•.•

13,407

13,624

1,274
7,092
3,639

1,335
7,319
3,520

Other liabilities" •• ••. ..•.••.•.•.•••...•

Tota l capital occounts e ... . ....••.• , .•...

12,005
102
168
1,132

12,174
144
171
1,135

TOTAL L1A81L1T1ES AND CAPITAL
ACCOUNTSe ..••••.•••.•••.•••••••

13,407

13,624

Item

ASSETS

Demo nd de posits of bonks . •.. .... .• , ....

Feb. 20,
1963
572,790
250

o

1,249,478
1,249,728
921,852
880,680

Jon. 23,
1963

Feb. 21,
1962

628,054
16,450
57
1,213,765
1,230,272
937,984
888,573

678,236
3,902
2,811
1,139,010
1,145,723
975,699
834,861

Time deposits ••.•..•..... . ..• , .. .. . , ...

Tota l deposits •. •• ...•• •• •••••••.••••

Borrowings e ... , ....•. , ..•.•. , ....... .•

e-

2

TIME DEPOSITS

Date

Other demand d opaslls •••••••.•••••••.••
1Iem

1,009,389
149,799
1,079,299
79,889
6,118
73,771

5

-

610
361

JM£i,

LIA81LlT1ES AND CAPITAL ACCOUNTS

(1 n thousands of dollars)

-

Estimated.

1,277
7,062
3,053

-

11 ,3~~
134
1,072

-

BANK DEBITS, END-Of-MONTH DEPOSITS
AND ANNUAL RATE: OF TURNOVER OF DEPOSITS

DAILY AVERAGE PRODUCTION OF CRUDE OIL

(In thousands of barrels)

(Dollar amounts In thousands)

-=

Percent change from

Debits 10 demand
deposit accounts l

-

Abilene

Amorlll~."·········

•
:usti n . .. : :::: ::::: :
Cocumont •..••.••.••
Cor~us Christi . . .... . .

D~ri,cona

...........

EI pas ..............

FortaW~;"""""

•

G I
th ..........
H~::;:~~n

...........
... . . . .....

laredo

.............

L bb

P~rt ~~~h""""'"

So A ur ..........
So n Ang.lo ••••••• • •
To~ark~~ni~ • ••• •.•••
Tyl er
a •••••••..
W •.•..••......••

Wkh%~' F~il;::::::::
De

.

change from

of turnover

Jan.

1963

1962

1962

Area

1963p

1962p

ELEVENTH DISTRICT. .......

2,917.8
2,509.8
475.2
1,125.4
105.1
101.4
702.7
269.0
139.0
4,346.6
7,264.4

2,905.8
2,497.5
472.4
1, 117.3
105.9
101.8
700.0
269.1
139.2
4,432.4
7,338.2

Jon. 31,
1963

Jan.

Dec.

1963

1962

Texas . . ....•...........

Gulf Coast •••....••• • •

Jan.
1962

West Texas .... . ......

East Texas (proper) ••••.
Panhandle •.......... .

398,672

10

111,488
381,99 1

24
5

60,974

14

118,101
271,419
300,157
192,746
220,343
21,921
4,060,220
399,121
920,540
101,1 76
3,527,202
37,815
389,655
67,125
63,952
792,794
30,697
11 0,508
133,685
137,046

5
13
26
5
8
12
7
4
10
5
2
I
27
3
14
9
16
10
8
14

Totol_24 'f'
---_
elles .•••.••• $12,849,348
1

Annual rate

Dec.

ARIZONA
Tucson .... ... . ...... $
LOUISIANA
~onroe .............
NEWre~~~~~~ ••••..•••
Roswell
TEXAS .............

December

Demand deposits!

Percent

January
Area

January

SU~divfsf~~t:. of Individ ual s,

$ 164,753

28.4

26.0

29.9

7
-3

54,304
180,370

22.9
24.6

18.7
23.6

22.0
24.4

37,952

19.0

16.3

17.8

-6
5
14
-3
-3
5
0
3
-4
-7
8
13
13
3
2
12
23
8
10
- I

70,297
126,912
160,893
107,414
117,161
21,274
1,299,905
190,278
396,202
62,806
1,477,46 1
25,608
142,325
44,420
47,649
425,8 12
18,523
64,174
74,248
101,101

19.3
25.2
21.4
21. 1
22.4
12.1
35.4
24.2
27.5
19.2
27.2
17.5
32.3
18.4
16.0
21.7
19.7
19.6
21.5
16.1

18.2
22.7
17.2
20.4
21.5
10.9
33.0
23.5
25.3
18.5
26.9
17.2
26.8
17.5
14.0
20.0
17.4
17.9
19.7
14.6

19.9
25.0
19.6
21.6
23.2
11 .9
35.3
24.5
28.4
19.8
26.6
16.3
29.8
17.4
14.9
20.9
17.2
18.6
19.9
16.1

27.4

25.8

27. 1

OUTSIDE ELEVENTH DISTRICT.
UNITED STATES .... ....... .
p -

7

$5,41 1,842

partnerships, and corpora tio ns and of slatos and political

ba~~5he~o

flguros include only two banks in Te xarkana, Texa s . Total de bit. for all

District In

Texarkana,

Texas-Arkansas,

R.st of Stat.. ... ......
Southeastern New Mexico ..
Northern louisiana .... ....

including

one

bonk

located

, amounted to $64,08B,000 for the month of January 1963.

In the Eighth

December

1962
3,045.1
2,650.7
493. 1
1,216.5
133.1
101.5
706.5
265.5
128.9
4,301.8
7,346.9

January

1962

1962

0.4
.5
.6
.7
-.8
-.4
.4
.0
-.2
-1.9
- 1.0

-4.2
-5.3
-3.6
-7.5
-21.0
-.1
-.5
1.3
7.B
1.0
-1.1

Preliminary.

SOURCES, American Petroleum Inslltute.
U. S. Bureau of Mines.
Federa l Reserv. Bonk of Dallas.

NATIONAL PETROLEUM ACTIVITY INDICATORS

(Seasonally adjusted Indexes, 1957·59
January

1963p

Indicator

CRUDE OIL RUNS TO REFINERY
STILLS (Dolly overage) ••••••.••••••••
DEMAND (Dolly averag.)
Gasoline . •. ... ... ........ ......... .'
Kerosene ..........•.•.•........•.•

Dlstillat. fu.1 011 .................... .
Rosldual fu.1 011 ... . ............. . .. .
Four reAned products ..........•...

STOCKS (End of month)
Gasolln ..... .... .............. . ... .
Kerosene .....•................... .

Dlstillat. fu.1 all .... .. .............. .
R.sldual fu.1 all • •..• ••• • .••.•.••••••
Four reAned products ....... . ..... .

DEPARTMENT STORE SALES

January

p -

= 100)
Decembor

1962p

January

1962 .'

106

109

106

108
136
112
90
108

108
125
97
90
102

110
133
11 2
104
110

106
119

108
117
107
90
106

104
114
109
78
103

III

92
106

Prelimlnory.

SOURCES, American P.trol.um Institute.

(Preliminary percentage change in retail value)

U . S. Bureau of Minos.

~~~~=======================================

Federal Ros.rve 8ank of Dallas.

January 1963 from

=---~:tal

December

January

1962

1962

Area

Eleventh District . . ...... .... ....... ..

Dalla~s

7

-55
-60
-56
-59
-53
- 52
-5 1
-59
-55

Christi •• • . .................•...•.•

~'o!i

2
6
9
4
12
12
3
9

BUILDING PERMITS

VALUATION (Dollar amounts In thousands)
Percent change

NUM8ER
Area

January 1963 from

January

January

December

1963

1963

1962

January

1962

ARIZONA
561

$ 2,527

211

Wichita Falls ••••••.• ••• •••

87
227
323
212
276
1,895
303
437
115
1,287
176
87
68
73
1,043
215
109

Tota l- I 9 citl.s ••••••..••••••

7,705

Tucson • .••... ........ .••••
Shroveport .. .. ..•••..•• ...

TEXAS
Abll.ne ••• • •.•••• • ..••••••

Eleventh federal Reserve District
(1957· 59

= 100)

~~~~=================================
SALES (Dolly averag.)

STOCKS (End of month)

Seasonally

Seasonally

~ate
Unad lusted
adjust.d
Unadjust.d
adjusted
1962, ~an~ua-r-y-.-.-. .-.-.-.---7-9----~10 -1- - - - -9-5-r- - -- -I-0-9r- Su gust .. ......
Oe!t~i,~~.r.. .. •

~ovemb~;:::::

1963 ec.mb.r......
I January
__
_ • ••.•••
r-

P-

Rovised .
Preliminary.

Amarillo .......••.........
Austin .......•••..........
Beaumont .. . ..•..... ......
Corpus Christi ••••.... •• ....

Dallas ••• ..•• • • •. . ..•••••.
EI Paso • • ••••..• ..•••. . ..•
Fort Worth ................
Galveston •••••. .... . .... ..
Houston .. ••.. " ...... . ...

108
109

107
113

115
117

112
11 0

Lubbock •..•••••• • ...•••••
Midland ..•••••••...••••••
Odessa .. ........... .... ..
Port Arthur ....... .... .. ...

193
84p

lll r
108p

103
99p

111
113p

San Antonio ....•....... . ..
Waco . .. .... •..... .. ...••

:g~

:~~

m

29

-7

1,052

5

-10

1,170
3,329
8,082
907
1,622
19,283
1,845
5,313
1.003
18,961
10,400
1.D91
877
5 10
5,810
3,738
2,955

85
-29
186
55
-58
9
-8
97
86
-12
567
74
343
124
-36
169
79

-60
38
85
21
7
48
-3B
102
-76
-54
299
-22
-25
44
- I
377
96

$90,475

21

-4

LOUISIANA

INDEXES Of DEPARTMENT STORE SALES AND STOCKS

m

3

VALUE OF CONSTRUCTION CONTRACTS

LIVESTOCK ON FARMS AND RANCHES, JANUARY 1

(In millions of dollars)

(In thousands)

January

Decem b er

January

Area and type

1963p

1962

1962

FIVE SOUTHWESTERN STATES ' ••• ••••

317
136
95
86
2,779
1,250
1,016
514

359
130
83
145
3,198
1,166
921
1,111

274
129
75
70
2,658
1,190
853
61 5

Resi dential building . ... .. .••.. . • ..
Nonres id ential building .. •• ... . . . ..

Pub li c works and utilities ...........

UNITED STATES •• • • . ••..••••••• .. ••
Residentia l building •• • •••• • ••• .. •.
Nonresid ential building • ..•.. .•. . ..
Public w orks a nd utilities .. . .... • ...

United States

Species

1963

1962

1963

1962

1963

1962

10,240
926
9,314
5,651
5,446
205
985
15,779
380

9,660
948
8,7 12
5,854
5,61 4
240
975
15,874
364

18,146
1,846
16,300
7,640
7,27 1
369
1,687
24,472
509

17,409
1,921
15,488
7,904
7,483
421
1,71 3
24,983
493

103,754
28,847
74,907
30,170
26,1 29
4,041
58,695
365,21 7
6.598

100,002
29,550
70,452
31,320
27,065
4,255
57,000
368,452
6,488

Chick ens' .....
Turkeys... .. ..

NOTE . - De tails may not add to totals because of round ing .
SOURCE, F. W. Dodge Cor poration .

states I

Callie •••... ..
Milk cOlll o .•
Beef collie • .
Shee p .•.•... •
Stock shee p.
Fee d ers .. ••
Hog s . ... .. . .

Arizona , lou isi ana, Ne w Mexico, O klahoma, and Texa s.
p Pre lim inary .
1

--

Five southwestern
Texa s

1
!l

Arizona, Loui si ana, N ow M ex ico. O klahoma , and Tex a s.
Does not include comm ercial broil e rs.

SOURC E, U. S. Deportment of Ag riculture .

NONAGRICULTURAL EMPLOYMENT

Five Southwestern States'

INDUSTRIAL PRODUCTION
(Seasonally adjusted indexes, 1957·59

Percent chang o

Jan. 1963 from

Numb er of persons

Type of employment

January

Decemb e r

January

De c.

Jan .

1963 e

1962

1962r

1962

1962

4,618,500
795,300
3,823,200
236,500
297,200

4,717,000
804,100
3,912,900
236,500
303,100

4,511,300
782,300
3,729,000
243,900
282,400

-2 .1
-1.1
-2.3
.0
-1.9

2.4
1.7
2.5
- 3.0
5.2

388,600
1,105,800
233,700
644,800
916,600

399,800
1,1 76,100
231,100
643,700
922,600

389,900
1,080,900
224,700
621,700
885,500

-2.8
-6.0
1.1
.2
-.7

- .3
2.3
4.0
3.7
3.5

TEXAS

Total nonagricultural

wag e and salary workers • .

Manufacturing • ..••• •• • ..
Nonmanufacturing .• • ...•.

Mining ••• ..••. .• •••••
Construction • • •. . ••
Transportation and

~

.• •

public utilities .•... .. .

Trade • ••.•• •••••••• • •
Finance .•• .• . . .. • ... •.

Service ..... .. . . , .. ...
Governm ent .. . .• .••. . .
1

Arizona, Louisi ana , N ew M ex ico, O klahoma, and Texas.
Estimated.
Revi se d.

er -

SOURCES , State e mployment agencies.
Foderal Resorve Bonk of Dallas.

4

Area and ty pe of ind ex

Total industrial production ••• . . ...
Manufactu ring . • ... • . . ....•..

Durable • • . . .• ••••.•• •... •
Nondurable • .• • ••• . . •• •• . .
M ining . .. .. .. .. ..... •.. ....

UNITED STATES
Total indu strial production •• .. ... .
Manufacturing ... . .. . ..... ...
Durabl e . . .. ...... .. ... ...

Nondurable •.. ••• ....• •• ..
MinJng .•• . .. ... ... . ..•• ....

Utilities ••... • • ..•• . . ••... . . .
p r -

= 100)

-=

-

January

Decemb er

Novemb er

January

1963p

1962

1962

1962

113
128
121
132
93

113
127
122
131
93

113r
125r
118
130r
97

108
11 7
108
124
96

119
119
119
120
103
138

119
120
119
121
103
136

120
120
119
121
106r
135

114
114
113
116
104
129

Pre liminary.
Revi sed.

SOURCES , Board of Governo rs of the Federal Reserve Sys tem .
Fedora l Rese rve Bon k of Dallas.

-