Full text of Review (Federal Reserve Bank of Dallas) : March 1972

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Federal Funds-

A Market Comes of Age
In the Eleventh District

-

PART I: PARTICIPATION IN THE MARKET

t

T adi ng in Federal funds-balances
o member banks at Federal Re~erve banks-has expanded rapidly
~n recen~ years, providing more
anks wIth a market in which to
place excess funds for short perio~s as well as with a source of
s ~rt-term borrowing. Once a
~~~ctlY New York City market in
rn. I<;:h trading seldom exceeded $20
Illion a day, the Federal funds
~arket is now a nationwide system
In which billions are bought (borrowed) and sold (lent) every day.
R In the Eleventh Federal
eserve District, this expansion

Government securities buy and
sell Federal funds, but commercial
banks are their principal customers. Most banks, in fact, stipulate
that transactions with Government security dealers be settled in
Federal funds. Other financial
institutions-especially agencies of
foreign banks and mutual savings
banks-also occasionally trade in
Federal funds, but the volume of
their trading is usually small and
their activities in the market are
concentrated mainly in New York
City.
Although their participation is
usually limited, nonfinancial corporations sometimes use the mar-

has amounted to a near-explosion.
Sales of Federal funds by all commercial banks tripled between call
report dates at the end of 1968
and the end of 1970, soaring from
$403 million to $1.5 billion. During that time, purchases by banks
in the District more than doubled,
increasing from $613 million at the
end of 1968 to more than $1.3
billion at the end of 1970.
Commercial banks, of course,
dominate the market-in the District and the nation. Participation
by other institutions is comparatively minor.1 Dealers in U.S.

COMMERCIAL BANKS IN THE FEDERAL FUNDS MARKET, DECEMBER 31
Eleventh F
__
ederal Reserve District

---

Bank deposit size
(Mi llion doll ars)

Percent of ban ks
Buying Federal funds
Seiling Federal funds

Total number of
District banks
1968

1969

1970

1968

1969

1970

1968

1969

1970

100 %
54
22
6
1

100%
79
39
9
3

100%
91
54
7
2

Member banks

~~gg or mo re .... . . . ... .
$50 t~O ~~99 . . . .... . . . .
$10 to $4 .. . .... .. ....
L
$ 9 ........... ..
ess than $10 . . . . . . . . ..

6
28
32
210
375

6
28
31
221
354

6
33
28
242
325

67%
54
41
33
22

83%
75
52
46
44

83%
91
75
59
59

All sizes ...... . .....

651

640

634

28

47

62

7

11

12

~~go or more . . . . ... ... .
$50°t~O$~~99 .. . ........
$1 0 to $49 ······ · ···· · ·
Le
....... .. ....
ss than $10 .... . .. . . .

0
0
11
170
461

0
0
13
183
471

0
1
17
217
464

0
0
36
17
3

0
0
38
31
26

0
100
71
57
36

0
0
0
4

0
0
38
9
1

0
0
6
2
2

All sizes ...... .. .. . .

642

667

699

8

28

43

4

2

6
28
43
380
836
1,293

6
28
44
404
825

6
34
45
459
789

67
54
40
26
12

83
75
48
39
34

83
91
73
58
46

100
79
39
9
2

100
88
36
5
2

1,307

1,333

18%

37%

52%

Nonmember banks

(' )

All banks

~~gg ~~ m~re ........ . ..

$50 to $~9 99 ...........
$1 0 to $49 ······ · · · · ·· ·
Le
h .............
ss t an $10 .... . .. .. .

~II sizes .. . . . . . . . . . .

100
54
16
5
1
4%

7%

7%

1. Less th
SOlJRCES~n one-half of 1 percent
. ~ederal Deposit Insurance Co rporation
__
edllral Reserve Bank of Dall as
1. F'o~
.
Sy t a detntled description of how various types of Institutions participate in the market , see Th e Federal Funds Marlcet-A Study by a F ederal R eserve
• em Committee, Board of Governors of the Federal Reserve System, Washington, D.C., May 1959.

11Us'

llless R eview I March 1972

1

-Federal funds market expands rapidly
in the Eleventh District in recent years

keto Corporations, for example,
transact business with Government security dealers, and these
(END-OF-MONTH FIGURES)
BILLION DOLLARS
transactions are often settled in
1.6
Federal funds. Corporations seldom participate directly in the
FEDERAL FUNDS SOLD
market, however, buying and sell1.4ing instead through commercial
/( ............ banks, which hold actual title to
1.2the funds.
Commercial banks are far and
1.0away the main participants in the
ALL COMMERCIAL BANKS
market. And since this is a market
0.8for deposits of member banks at
Federal Reserve banks, it is not
surprising that participants are
0.6.. '
mostly member banks. Nation......
BANKS
wide, member banks account for
0.4................'.'
80 to 90 percent of the Federal
funds purchased and 85 to 95
0.2percent of the Federal funds sold.
NONMEMBER BANKS
Furthermore, participation by
nonmember banks (which, of
0.0 I
I
I
I
I
I
I
I
DEC. JUNE DEC. JUNE DEC. JUNE DEC. JUNE DEC. JUNE DEC. JUNE course, do not carry reserve bal1965
1966
1967
1968
1969
1970 1971 ances at Federal Reserve banks)
is handled mainly by correspondent banks that are members.
To gauge the significance of
this market to banks in the
(END-OF-MONTH FIGURES)
BILLION DOLLARS
Eleventh District, a study was
1.6
based on call report data and a
survey of more than 100 banks in
FEDERAL FUNDS PURCHASED
1.4the District. This article reports
on the growth of the market in the
District and the increase in par1.2ticipation by various types of
banks. A second article will report
1.0on the characteristics of Federal
funds transactions in the District
0.8and the place of these transactionS
in bank portfolio management. A
third article will analyze the im0.6pact of the explosive growth of
the Federal funds market on the
0.4soundness of banks in the District
and the servicing of local credit
0.2- '"
needs.

M~~BER

---"

NONMEMBER BANKS

0.0

I

I

DEC. JUNE

1965

I

DEC. JUNE

1966

I

DEC.

JUNE

1967

I

I

DEC.

JUNE

1968

SOURCES: Federal Deposit Insurance Corporation
Federal Reserve Bank of Dallas

--....{,,

I
DEC.

1969

I

I

JUNE DEC. JUNE

1970

1971

Growth in sales •••
Although most of the expansion ill
Federal funds transactions in the
Eleventh District has been at
member banks, small nonmember
banks have also become more
active, particularly in the sale of

~ederal funds. Where nonmember
anks accounted for only 9 per~hnt of the Federal funds sales in
e District at the end of 1968
th ey accounted for 17 percent two
'
years later.
re A~alysis of this growth pattern
qUIres an understanding of the
~t~ucture of banking in the Disnct. There are well over 1 300
~Onunercial banks in the District
l'u~ mainly to the fact that
'
t' exas-the only state lying enIrely within the District-is a unitbanki
four other
. .ng state.
n1strtc~ states, Of theArizona allows.
only
st
atewlde branching. Oklahoma is
also a . b
umt- anking state, and
Lou' .
onI Is~an.a and New Mexico allow
y ~lUlted branching.
th Wh~le the number of banks in
of ~~Istrict is large, however, most
b em are fairly small, at least
9~ national standards. More than
P ~ercent of the banks have deM~ItS of less than $50 million.
banrleover, only about half of the
R {S a re members of the Federal
be~s~rve System. And while memth anks are generally larger
pe~n nonmember banks, almost 90
thi~~.t o~ the member banks in
Ie
IstrlCt also have deposits of
ss than $50 ffil'llion.
P
and ~ticipation of various sizes
fund yPes of banks in the Federal
be s market in recent years can
~fuged from call report data.
somee ~hese data may be subject to
ad' dIstortions due to year-end
to JUstrnen t s b y banks (a matter
be .
that discussed later), they show
merc?~Ib 18 percent of the comrepor~ anks in the District
their bed sales of Federal funds on
ooks at the end of 1968.
ho~he ex~ent of participation,
Lar::er, Increases with bank size.
res erv: ban~~ tend to manage their
small POsItIons more closely than
are rn~r ba.nks do and, as a result,
funds .re likely to invest excess
Also lIn the Federal funds market.
brok arger banks often act as
ers (accommodating banks)
nUsin

....

ess .u.eview I March 1972

for their smaller correspondents,
purchasing funds from these banks
and reselling them in the Federal
funds market. Thus, two-thirds of
the largest banks in the District
were selling Federal funds at the
end of 1968.
As might be expected-since the
Federal funds market is essentially a market for member bank
deposits at the Federal Reserve
Bank-a far larger proportion of
member banks participate in the
market than do nonmember
banks. This is true, regardless of
bank size. Of the 375 member
banks in the District with less
than $10 million in deposits at the
end of 1968, 22 percent were selling Federal funds, compared with
only 3 percent of the 461 nonmember banks of that size. But
the margin of difference between
member and nonmember bank
participation has narrowed appreciably since that time.
The proportion of banks selling
Federal funds has risen sharply in
recent years, advancing from 18
percent of all banks in the District
at the end of 1968 to 52 percent
at the end of 1970. But although
the selling of Federal funds has
increased at all sizes of banks, the
increase has been uniformly much
higher for smaller than for larger
banks. The proportion of banks
selling Federal funds in the $100
million to $499 million deposit
group, for example, almost doubled over this two-year period.
This in itself is an impressive
advance, but the percentage in
the less than $10 million deposit
group increased nearly fourfold.
But there has also been a tendency for the extent of participation to increase faster among
nonmember banks than among
member banks of the same size. In
the $10 million to $49 million
deposit group, for example, the
proportion of member banks selling Federal funds did not quite
double over this period, while the

proportion of nonmember banks
selling funds more than tripled.
The most dramatic difference was
at banks with deposits less than
$10 million. In this deposit group,
the proportion of member banks
selling Federal funds increased
about 272 times while the proportion of nonmember banks increased 12 times.
Several factors may have accounted for this sharp rise in the
number of banks selling Federal
funds-especially among small
banks and nonmember banks. One
is that the sizable increase in the
Federal funds rate in 1969 probably made sales more attractive to
all banks. Nationwide, the Federal
funds rate averaged about 6 percent in December 1968, rose to
about 9 percent in December
1969, and fell back to about 5
percent in December 1970. The
rise in rates between the 'end of
1968 and the end of 1969 coincided with the sharpest increase
in the proportion of banks in the
District selling Federal funds.
Although the average Federal
funds rate had fallen back by
December 1970, there was still a
marked increase in the number of
banks selling Federal funds that
year. This advance was probably
due to the difference in demand
for loans and availability of bank
funds at the two year-ends. The
end of 1969 was a fairly tight time
for banks. Banks had sustained
sizable losses in deposits over the
previous year, and loan demand
continued heavy. The next year
ended more comfortably, with
deposit inflows having resumed
earlier in the year and loan demands having moderated. Thus,
despite the lower Federal funds
rate, the increased availability
of funds probably furthered the
movement into the Federal funds
market in 1970.
The faster influx of small nonmember banks was due partly to
their having more leeway for such
3

movement than large member
banks. More of the large member
banks were already selling Federal
funds in 1968. Starting from a
smaller base, any increase in the
number of small nonmember
banks selling Federal funds would
appear more dramatic.
But the increase reflects more
than that. Tight money conditions
in 1969 did not hit small banks as
hard as larger member banks. Deposits at member banks dropped
about 1 percent that year, while
deposits at nonmember banks rose
9 percent. The greater availability
of funds at nonmember banks was,
no doubt, instrumental in inducing them to start selling Federal
funds-especially since the Federal
funds rate was high. With the
easing of conditions in 1970, deposits at member banks rose 10
percent but deposits at nonmember banks increased 15 percent.
As a result, even in this period of
relative ease, the proportion of
banks in the District selling Federal funds rose generally faster
among nonmember banks than
among member banks.
... and purchases

There are fewer purchasers of
Federal funds in the District than
there are sellers. Only 4 percent
of the banks in the District had
Federal funds purchases outstanding at the end of 1968, compared
with 18 percent that had sales
outstanding. Again, in view of the
numerical dominance of small
banks in the District, this is quite
reasonable. Because of their larger
excess reserve positions, smaller
banks tend to be net sellers of
Federal funds.
In fact, the proportion of banks
buying Federal funds drops dramatically with bank size. Where
all banks with deposits of $500
million or more had Federal funds
purchases outstanding at the end
of 1968, only 1 percent of the
banks with deposits less than $10
4

million showed purchases on their
books.
Member banks are more active
in purchases of Federal funds than
are nonmember banks of the same
size, although the difference is
much less pronounced than it was
for Federal funds sales. For example, about 6 percent of the
member banks with deposits of
$10 million to $49 million were
engaged in the purchase of Federal funds at the end of 1968,
compared with 4 percent of the
nonmember banks of that sizeindicating, perhaps, that size may
be more important than membership in the Federal Reserve
System in determining whether a
bank buys Federal funds. Whether
member or nonmember, small
banks probably carry relatively
more excess reserves than larger
banks and, therefore, have less
need to buy Federal funds.
There has been a substantial
increase in the number of banks
buying Federal funds in recent
years, however. The proportion
of banks buying funds in the
Eleventh District increased from
4 percent of all banks at the end
of 1968 to 7 percent at the end of
1970. As might be expected, most
of this increase was at large banks.
For banks in the $100 million to
$499 million deposit size, the ratio
rose from 54 percent to 88 percent. For banks in the $50 million
to $99 million deposit size, it rose
from 16 percent to 36 percent.
But for smaller banks, there was
little or no change. Again, the
distinction between member and
nonmember banks seemed to have
little bearing on the pattern at
smaller banks.
As in the case of sales, the percentage of purchasing banks of
all sizes rose more between the
end of 1968 and the end of 1969
than between the end of 1969 and
the end of 1970. In some cases, the
ratio changed very little between
the end of 1969 and the end of

1970. In some instances, it even
declined.
The difference was doubtlessly
due to changes in the availability
of funds. Tight credit conditions
at the end of 1969 brought a
sharp increase in the number of
banks buying Federal funds-even
at smaller banks, both member
and nonmember. Of nonmember
banks with deposits of $10 million
to $49 million, for example, the
percentage buying Federal funds
increased from 5 percent in late
1968 to 9 percent a year later.
While the percentage of banks
buying Federal funds increased
sharply at all sizes of banks in
1969, the pattern varied substantially in 1970, depending on bank
size. Larger banks continued to
make purchases after funds became more available-and in some
cases, in increasing numbers. But
in most cases, smaller banks withdrew from purchases, reverting to
their previous reserve management
policies. The result is an impression that the sharp rise in small
bank borrowing in the Federal
funds market was partly only a
temporary measure taken during
a time of extreme credit tightness.
Window dressing problems
There is always the possibility
that an analysis such as this will
be distorted by the choice of time
frames. This is especially true of
the year-end data for the call reports. For these reports, banks
sometimes show more liquid assets
than they normally carry, or
fewer short-term liabilities, in an
effort to make their balance sheets
appear as "sound" as possible-a
matter of window dressing. And
window dressing could include
their Federal funds sales and purchases on these dates. These reports must, nevertheless, be used
in analyzing the participation of
all commercial banks in the Federal funds market. They are the
only source of information on the

Federal funds transactions of nonmember banks.
The general accuracy of these
reports can be checked, however.
Member banks report their Federal funds transactions daily. By
Picking dates close to those for
the call reports, it is possible to
evaluate the validity of call report
data. To this end, Federal funds
data from member banks were
collected for the last reporting
Week in November preceding each
of the three end-of-year call rePorts. For most bank sizes, the
proportion of banks buying and
selling Federal funds was about
the same in November as in
December, indicating-for member
banks at least-data consistent
with the general trend of the figUres in the call reports.
Extent of participation
Sheer numbers of banks in the
Federal funds market do not, of
course, tell the whole story. While
t~ere Were only six banks in the .
Dlstrict with deposits of $500 mIllion or more at the end of 1970,
for example, year-end call reports
for 1968, 1969, and 1970 show
these banks accounting, on average, for roughly a third of the
Federal funds sold in the District.
Their importance in the market
reflects not only their size but also
the fact that they function as
" accOmmodating banks," buymg
.
Federal funds from smaller corresPondents and then selling them
to other banks needing to increase
their reserves.
The volume of sales declines
With the average bank size-down
to deposit sizes of about $50 million. But next to the largest banks,
banks in the $10 million to $49
lUillio n deposit group consistently
supplied the greatest amount of
~ederal funds. At the end of 1969,
In fact, they supplied more than
the large banks-the banks that
tYPiCally feel the pinch of tight
credit conditions. Such conditions
11".·
-mess Review I March 1972

PERCENTAGE OF ME MBER BANKS SELLING AND BUYING FEDERAL FUNDS,
AS OF SELECTED DATES
Eleventh Federal Reserve Di strict
Bank deposit size
(Million dollars)
All
size
banks

Item and date

Banks selling Federal funds
1968
November 27 ..... . .... .
December 31 . ....... . . .
1969
November 26 ...... . ... .
December 31 ........ . . .
1970
November 25 ........ .
December 31 .
Banks buying Federal funds
1968
November 27 .......... .
December 31 . .... . .... .
1969
November 26 .......... .
December 31 .... ...... .
1970
November 25 .......... .
December 31

$500

or
more

$100

$50

$1 0

$499

$99

$49

to

to

to

Less
than

$10

33%
28

80%
67

79%
54

41%
41

44%
33

25%
22

47
47

83
83

86
75

58
52

46
46

44
44

69
62

100
83

85
91

86
75

65
59

68
59

9
7

100
100

71
54

38
22

8
6

2
1

13
11

100
100

79
79

65
39

14
9

3
3

15
12

100
100

94
91

54
54

13
7

3
2

surance Corporation
SOURCES : Federal Depos It IBnank of Dallas
Federa l Reserve

SALES OF FEDERAL FUNDS BY COMMERCIAL BANKS, DECEMBER 31
Eleventh Federal Reserve District
(Million dollars)
Bank deposit size
(Million doll ars)

Total sales

Average sales

Nonmember banks
$500 or more .. . ..
$100 to $499 . .. . ..
$50 to $99 .
$10 to $49 . .
Less than $10 . . ...
All sizes

All banks
$500 or more ... ..
$100 to $499 . . ... .
$50 to $99 .... . .. .
$10 to $49 .. ......
Less than $10 . . ..
All sizes

1970

1968

1969

1970

$146
86
19
79
38

$96
149
44
110
63

$551
325
65
205
106

$36.5
5.8
1.6
1.1
.5

$19.2
7.1
2.8
1.0
.4

$110.1
10.8
3.1
1.4
.5

368

462

1,252

2.0

1.5

3.1

0
0
12
18
4

0
0
17
52
48

0
5
43
132
71

2.4
.7
.1

3.4
1.0
.4

5.0
3.6
1.2
.4

117

251

.6

.6

.8

146
86
31
97
42

96
149
61
162
111

551
330
108
347
167

36.5
5.8
1.8
1.0
.4

19.2
7.1
2.9
1.0
.4

110.1
10.6
3.3
1.3
.5

$403

All sizes .....

1969

35

Member banks
$500 or more ..
$100 to $499 . . .
$50 to $99 ...
$10to$49 ..
Less than $10 .....

1968

$579

$1,503

$1.7

$1.2

$2.2

t totals because of rounding .
NOTE : Details ma ln8 a~~t fnsurance Corporation
SOURCES : ~:~:~:I R:~erve Bank of Dallas
y

t

5

..
PURCHASES OF FEDERAL FUNDS BY COMMERCIAL BANKS, DECEMBER 31
Eleventh Federal Reserve District
(Million dollars)
Bank deposit size
(Million dollars)

Total purchases
1969

1968

1970

1968

Average purchases
1969

1970

Member banks
$500 or more ....
$100 to $499 .....
$50 to $99 .......
$10 to $49 .. . .. ..
Less than $10 .. . .

$495
98
7
7
1

$642
218
35
15
2

$989
276
19
13
2

$82.5
6.5
.9
.6
.3

$1 06.9
9.9
2.9
.8
.2

$164.8
9.2
1.3
.7
.3

All sizes ... ...

607

912

1,298

14.1

13.4

16.7

Nonmember banks
$500 or more .. . .
$100 to $499 . ... .
$50 to $99 ..... . .
$10 to $49 . . .....
Less than $10 ....

0
0
0
5

0
0
6
1
4

.8

~

0
0
16
13
1

(1 )

3.2
.7
.3

6.0
.3
.5

All sizes . . .. . .

6

30

12

.8

1.1

.8

All banks
$500 or more ....
$100 to $499 . . . .
$50 to $99 . ... .. .
$10 to $49 .......
Less than $10 ....

495
98
7
12
1

642
218
51
28
3

989
276
25
14
6

82.5
6.5
.9
.7
.3

106.9
9.9
3.0
.8
.2

164.8
9.2
1.6
.6
.4

$613

$942

$1,31 0

$12.3

$9.8

$14.4

Ali sizes . . ....

--

1. Less than $500,000
NOTE: Detail s may not add to totals because of rounding.
SOURCES: Federal Deposit Insurance Corporation
Federal Reserve Bank of Dall as

TOTAL SALES AND PURCHASES OF FEDERAL FUNDS
BY MEMBER BANKS, AS OF SELECTED DATES
Eleventh Federal Reserve District
(Million dollars)

$500
or
more

27 .....
31 .....

$432
368

$1 35
146

$151
86

$1 9
19

$80
79

$47
38

26 ... . .
31 .....

622
462

279
96

127
149

39
44

94
11 0

83
63

1,1 06
1,252

405
551

339
325

79
65

172
205

111
106

345
607

203
495

110
98

21
7

9
7

2
1

... . .

1,024
912

633
642

305
218

57
35

26
15

3
2

.
.....

1,117
1,298

696
989

374
276

22
19

22
13

3
2

25 ...
31

Total purchases
1968
November 27
December 31
1969
November 26
December 31
1970
November 25
December 31

. .. ..

NOTE : Details may not add to totals because of roundi ng.
SOURCES: Federal Deposit Insurance Corporation
Federal Reserve Bank of Dallas

6

Less
than
$10

All
size
banks

Item and date

Total sales
1968
November
December
1969
November
December
1970
November
December

Bank deposit size
(Million dollars)
$100
$50
$1 0
to
to
to
$499
$99
$49

were prevailing at the end of 1969,
and large banks probably had less
money to put into the Federal
funds market than smaller banks.
Growth in sales between the
end of 1968 and the end of 1970
was fairly uniform for all sizes of
banks, rising roughly 3 % times
over this period. There were some
sharper increases in the volume of
funds supplied by nonmember
banks, however, particularly by
smaller banks. The amount supplied by nonmember banks in the
$10 million to $49 million deposit
class rose more than seven times
over these two years, but the
amount supplied by nonmember
banks with deposits less than $10
million rose more than 17 times.
These increases reflected not only
more banks entering the Federal
funds market but also a larger
average amount sold by each bank.
Average sales per bank are, of
course, greater at large banks than
at small banks. This was true at all
three year-ends and at member and
nonmember banks alike. Moreover,
the range of difference was quite
wide. At the end of 1970, for example, sales outstanding at the
largest banks averaged $110 million while those at the smallest
banks averaged only $500,000.
Growth in the average size of
sales has also been greatest at the
largest banks. Where the average
size of sales at the six largest
banks tripled between the end of
1968 and the end of 1970, the increase at banks of the smallest size
was only about 25 percent. Again,
the greater increase at larger
banks partly reflects that most of
the sales of smaller banks are
made to these larger accommodating banks, which then resell the
funds.
It is clear, nevertheless, that
the increase in Federal funds sold
in each size class over the past feW
years reflects both the increase in
the number of banks participating
in the market and the increase in

~he average size of sales at each
. ank. At larger banks most of the
lllcrease h as been due 'more to a
.
rlS' t h e average amount of the
e In
~ransactions. At smaller banks the
lllcrease h as been due mainly to a
'
.
l'lse in th e number of banks selling
.
F
ederal funds
F
.
i ederal funds purchases are
fv en more concentrated at the
s~rgest banks. All three call reports
six largest banks in the
.ow
n1St·theaccounting for almost 75
flc t
p~rcent of the Federal funds pur~ ~ses. Moreover, the amount of
eral funds purchased drops
~uarplY with the size of banks.
rchases at the smallest banks
Where relatively insignificant
Weth er the banks were members
'
or ~onmembers.
sUbs~ere .ha~, nevertheless, been a
at anh.alIncrease in purchases
t SIzes of banks since the
~~ of 1968. In dollar terms, the
I rease has been greater at the
t:~~r ~anks. But in percentage
s, It has been greater at
~~~ler banks. From the end of
at th to .the end of 1970, purchases
d be SIX largest banks roughly
in°~ led. But purchases at banks
Ii e $100 million to $499 milp~~ ~eposit size nearly tripled, and
ban~ a.ses at the smallest size
T s Increased six times.
W s he pattern of this expansion
la: almost certainly due to the
ent~e~ number of small banks
bank~ the market. Where large
Fed s ad long before integrated
Iiabili:l fun~~ purchases into their
hank y PosltlOns, many smaller
ning: Were probably just begin1968 ~ buy Federal funds in late
age " s a result, a sharp percentCoul~crease in their purchases
Thi P~obably be expected.
Chan s ~s borne out further by the
Fed ge In the per-bank average of
Size:r~l ~nds purchases at various
perio~ nks Over this two-year
in th ' lth only a nominal rise
fund e average size of Federal
s Purchases at small banks-

h

:t0s

W

nUs'

lIle.ss Review I March 1972

an advance from $300 million to
$400 million-the sixfold increase
in the total dollar volume of purchases by these banks seems due
mainly to new entrants into the
market.
Large banks, on the other hand,
increased their average purchases
appreciably. The largest banks
more than doubled their average
purchases. Therefore, as in the
case of sales, the increase in purchases of Federal funds at large
banks has been more a function
of increased volume of purchases
than any increase in the number
of banks in the market. But the
reverse is true of the increase at
smaller banks.
Window dressing again
Again, to check the reliability of
call report data that might have
been distorted by window dressing, data for the last of December
were compared with Federal funds
sales and purchases of member
banks at the end of November pre-

ceding the three call reports. The
consistency was not quite as good
as the earlier check into the proportion of banks buying or selling
Federal funds. This was expected,
however, since sales and purchases
include variations not only in the
number of banks in the market
but also in the average size of their
transactions.
Consistency was poorest among
large banks. This, too, is not surprising, since large banks are more
active in the market and have
wider swings in their Federal
funds positions.
Overall, however, both total and
average purchases and sales at the
end of November were consistent
enough with those on dates of call
reports to bear out the general
conclusions of the previous analysis with regard to member banks.
Summing up
The sharp rise in the dollar volume
of Federal funds transactions in
the Eleventh District, then, re-

AVERAGE SALES AND PURCHASES OF FEDERAL FUNDS
BY MEMBER BANKS, AS OF SELECTED DATES
Eleventh Federal Reserve District
(Million dollars)

$500
or
more

$100
to
$499

27 .. . . .
31 .....

$2.0
2.0

$33.8
36.5

$6.8
5.8

$1 .5
1.6

$1.1
1.1

$0.5
.5

26 .....
31 .....

2.0
1.5

55.8
19.2

4.5
7.1

2.1
2.8

1.1
1.0

.5
.4

25 . . ...
31 . ....

2.7
3.1

67.5
110.1

12.1
10.8

3.3
3.1

1.2
1.4

.5
.5

6.2
14.1

33.8
82.5

6.1
6.5

1.7
.9

.7
.6

.3
.3

12.0
13.4

105.5
106.9

14.5
9.9

2.9
2.9

1.0
.8

.2
.2

12.6 ,
16.7

116.0
164.8

12.5
9.2

1.5
1.3

.8
.7

.3
.3

Item and date

Average sales
1968
November
December
1969
November
December
1970
November
December

Bank deposit size
(Million dollars)
$50
to
$99

All
size
banks

Average purchases
1968
November 27 .....
December 31 .... .
1969
November 26 . ....
December 31 .. . ..
1970
November 25 . ....
December 31 .... .

SOURC ES: Federal Deposilinsurance Corporation
Federal Reserve Bank of Dallas

$10
to
$49

Less
than
$10

fleets, at' least in part, the substantial change in the number and
types 0i1l1anks participating in the
market. The market is still dominated by a few large banks. But
these bank8)have maintained their
share of the market over this twoyear period' only by tripling their
outstanding sales of Federal funds
and doubling their outstanding '.
purchases.
The inroads smaller banks have
maoQll:into the market, on the other
hand,~ reflect the'increasing num- ' .
ber of such banks that have entered
the market over this period, rather
than any significant increase in
the dollar volume of transactions
by' those already.in the market.
"'r

.

This movement of small banks into
the market is most apparent in the
increase in Federal funds sales-an
increase probably spurred by the
high interest rates on Federal
funds over most of the period and
by the greater availability of funds
at small banks.
But the recent 'pattern of growth
in Federal funds trading is also
affected by differences in the portfolio management policies of various sizes of banks, as well as the
characteristics o£.rFederal funds
transactions. These are matters
to be explored in an article next
month.
'
-Joseph E . Burns

, r ,

',.

I

P

New par banks
Th,~ Bank of Commerce, Point Comfort, Texas, an insured nonmember bank
loeat ed 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 10, 1972. The
officers are: Jno. J. Faubion, Jr., President and Chairman of the Board; Edwin A.
Wagner, Executive Vice PreSjdent; James McSpadden, Vice President; and Fred A.
Knipling, Vice President an'd' Cashier.
,

~

T~e' Western State Bank, Midland, 'Texas, an insured nonmember bank located
in the territory served by the EI Paso Branch of the Federal Reserve Bank of Dallas,
was' added to the Par List on its opening date, February 11, 1972. The officers are:
William J. Mewhorter, President; Charles Danley, Vice President; and Steve Short,
Cashier.
3.

,

The Community Bank, Houston, Texas, an insured nonmember bank located in
the territory served by the Houston ~ranch of the Federal Reserve Bank of Dallas,
was added to the Par List on its opening date, February 15, 1972. The officers
are: Robert A. Partain, Presiaent, and Preston H. Rachal, Vice President and
Cashier.

8

Federal Reserve Bank of Dallas

March 1972

Statistical Supplement to the Business Review

-

Total credit at weekly reporting
commercial banks in the Eleventh
District rose only slightly in the
four weeks ended February 23.
But even this slight gain was in
con.trast to declines in comparable
Pel'lods for the past six years.
;Reflected in the rise were moderate
~creases in total loans and holdgS of U.S. Government securities
hat offset a reduction in holdings
of mUnicipal issues. Total deposits
advanced substantially.
The moderate rise in total loan
~emand reflected larger than usual
Increases in business and real
tate loans, probably resulting
rom continued improvement in
?eneral economic conditions and
ricreased construction activity.
I emand for most other types of
oans was slightly weaker than
seasonally expected. Mainly belaus e of increased holdings of
dOng.-term Government issues, the
ecline in total investments was
~hio~siderablY less than usual for
Speriod.
Inflows of demand deposits and
~onSumer-type time and savings
:Posits increased sharply, and
a moderate increase in large
r S outstanding, total deposits
OSe substantially. With a sizable
eJrPansion in deposits and only
llloderate loan demand, banks
~a~e considerable reductions in
11 elr Eurodollar borrowings and
et Purchases of Federal funds.

f

r

ci5?

Jhe s~asonally adjusted Texas initUstrlal production index resumed
ills upward trend in January, movto a new, high of 125.9 percent
g ~ts 1J67 base. Although most
s?ns Were moderate, renewed
a.l[e~gth was apparent in almost
'l'h manufacturing industries.
e only exception was the print-

ol

ing and publishing industry, which
showed a slight decline in output
from December. The textile industry showed the largest gain, increasing its output 4.4 percent.
The apparel industry increased its
production a substantial 2.4 percent, and petroleum refining
showed a strong gain of 2.3 percent. Production of both durable
and nondurable goods ran well
ahead of year-earlier levels.
Mining output recovered from
its December drop, advancing 2.3
percent. The largest month-tomonth gains were in natural gas
liquids, up 3.0 percent, and crude
petroleum, up 2.3 percent. Distribution of electricity continued
to slow, causing utility output to
drop 1.5 percent from its December
level. Even with this drop, however,
utility output was still 6.9 percent
more than in January 1971.

only service industries showed a
decline from December-a drop of
0.2 percen~. The greatest improvement was In construction, which
~howed 3.1 percent more jobs than
In December. Employment in trade
rose a stron?" 1.8 percent, and the
transportatIOn and public utility
group showed a gain of 1.3 percent.
The only year-to-year loss in employment was in mining, which
nevertheless showed a 0.8-percent
gain over December.
Department store sales in the
Eleventh District 'were 8 percent
higher in the four weeks ended
February 26 than in ' the corresponding period a year earlier.
Cumulative sales through that
date were 9 percent higher than
in the same period a year before.

The Texas oil allowable was
raised for March to 86 percent of
Registrations of new passenger
maximum efficient production.
automobiles in Dallas, Fort Worth,
The boost-which returned the
Houston, and San Antonio fell
allowable close to the record
23 percent in January. However,
rates of late 1970-came after an
registrations were still 17 perunusual second increase in the
cent higher than in January of
February rate. In response to refinlast year.
ers' requests for more Texas crude,
the allowable for February was
The seasonally adjusted prelimincreased to 75.8 percent from
inary estimate of total employment the previously announced 71.7
in the five southwestern states
percent. Meanwhile, Louisiana
rose a significant 1.3 percent in
continued for March the 75January. And with this sharp
percent flow rate first announced
gain in employment, the average
in November. The rate in Oklaunemployment rate for these states homa continued at 200 percent of
dropped to 4.5 percent, the lowest
maximum efficient production, and
rate in more than a year. Nonfarm
the rate set in New Mexico for
wage and salary employment rose
January and February was con1.0 percent over December and 3.3
tinued for March and April.
percent over January 1971.
Regulatory commissions in Texas
Employment gains were about
and Louisiana expressed doubt
equal in manufacturing and nonthat their states could continue
manufacturing. Of the industry
meeting the increasing demands
groups outside manufacturing,
(Continued on back page)

CONDITION STATISTICS OF WEEKLY REPORTING COMMERCIAL BANKS

Eleventh Federal Reserve District

-

(Thousand doll a rs )
Fe b. 23,
1972

ASSETS

Jan. 26,
1972

Fe b. 24,
1971

1,222,013
7,350,532

Commercial a nd in dustrial loans . • .•..•. • •... •

3,411,347

1,1 55,313
7,32 1,455

681,027
6,601,660

Other •• • • • • ••••. • •. • •• •••••• •••. •• ••••

Total U.S. Governm ent securiti es . . ... ..•..... .

Trea sury bills • ••• •.•••.••• ... .•••••••• ..
Trea sury ce rtificates of indebtedness .•.•... .
Tr ea sury notes and U.S. Gove rnm ent
bands maturing:

Feb . 24,
1971

10,735,04B

11,676,602

6,625,982
4,534,081
429,591
161,153
1,364,476

6,402,055
4,417,074
350,787
206,329
1,308,406

3,3 35
41,803
91,543
5,398,439

2,392
32,103
B4,964
5,274,547

2,8 19
28,97 2
98,160
4,667,967

1,122,49B
2,781,515
1,365,105
10,042
94,B79

1,096,221
2,757,116
1,302,291
15,453
82,566

974,68 8
2496,56 1
1'057,337
, 30,581
95,015

23,300
1,100

19,800
1,100

12,685
1,100

1,789,179
39,703
397,116
136,235
23,481
1,091,407

1,910,845
41,601
394,511
144,211
22,632
1,092,937

999,089
68,222
401,, 159
138,439
19,47 1
1 032,548

15,283,339

~3,393.gg

---3,177,783

Total d emand d eposits ... •.............•....

3,3B2,989

169,161

165,987

119,010

Banks in the United States •••.• • •••••••.••.

1,125
51,142

500
53,749

500
43,928

bonks, and internationa l instituti ons •• .. . .
Comm ercial bonks . .. •.. . . . ...... •.••.•

4,650
445,404

5,254
449,502

1,6'45
429,629

Ce rtifl e d and offlcers' checks, e tc . . . . . ... ....
Total tim e and sa ving s de posits ..............•
Individua ls, partn ership s, and corporation s:
Saving s de posits .. . .. . . . .. .. . .... . .. . ..

121,278
477,793
912,421
20,911
36,487
820,323

130,787
492,273
901 ,182
20,341
28,48B
824,305

189,818
438,467
653,373
13,832
10,386
733,026

0
878,490
3,372,420

0
866,098
3,389,284

0
790,263
2,893,075

- - --

Ag ric ult ural loans, excl uding CCC

Real estate loans .... ..... . ............•...
loan s to domestic comm ercial ban ks •.... . .....
loon s to foreig n bonks... . . ... . .. .. •.....• ..
Consum er instalm ent loans. .. . . .. ..••.. ..•...
loans to foreig n governments, official
institutions, centra l ban ks, and international
institution s. •.•. ••• •. .. ..• . .... . • . ...... .
Other loan s. .••. . ... . .... •. ...••....•... . .
Total investments ...... •......•..... •.. .. . . . .

LIABILITIES

Jan . 26,
1972

Total de posits . ... . ............... . .. ........ 12,024,421

Federal funds sold and se curities purcha se d
under a g reeme nts to resell •....... .. • . • •• • ••
Oth er loon s and discounts, gran .. . ..••••• • ••• ••

certiAca tes of inte rest .••.. . ...•• . • . . .. ... .
loans to brokers and d ealers for
purcha sing or carrying:
JJ.S. Government securities •• • . ... • • .. ..•...
Other secu rities .. . . . .. .•• ..•• . ... •• .....•
Other loon s for purchasing or co rrylng:
U.S. Government securities. '••••..••...••...
Oth er se curitie s.••... .. ... ... ............
loans to nonbank Ananclal institutions:
Sales financ e, personal finance, facto rs,
ond' oth er business cre dit companies . . . •...

Fe b. 23,
1972

Ind ividuals, partn erships, and corporations .. ..
States and political subdivisions ...... ......
U.S . Gove rnm ent . . ............ . ... .... ..

6067,081

4: l ll,29~
330,82
166,128
1,328,883

Foreign:

Governments, ofAcial institutions, central

1,091,917
124,750
0

---1,077,185
125,4B4
0

- --978,602
123,093
0

Oth er tim e d epo sits • ... .... .. •... . .. . ..
States and political subdivisions ..•...... . ..
U.S. Governm ent {including po stal saving s) . • . .
Bon ks in th e Unite d Stat es • .. .. . . •..•.... . .
Foreig n:
Governm ents, ofAcial institutions, central
bonks, and international institutions . • . .. .
Comm ercial bonks . . •.. ... •.. . .. . ... . ..
Fed eral funds purcha se d and securities sold
und er agree ments to repurchas e ••........•.. .
Oth er liabilities for borrowe d money .••. . . . . .. ..
Other liabilities • • • •...••. . •.• • .. . ... • .. ....•.
Reserv es on loons ••.• . .. ... .. . ... . • •. •.•. . ...
Reserves on securities • . •.••..•..••. ... .. . . . ...
Total capito l accounts .• • •..••••••..•..... . ...

TOTAL LIABILITIES, RESERVES, AND
CAPITAL ACCOUNTS • • • •• . ••••••.••••• . 15,501,542
193,261
586,355
187,551

187,356
599,905
164,440
98,9Bl
2,028,663

32,882
1,646,574

16,640
177,538
1,490,549
929,926
98,105
470,981
12,475

16,686
167,769
1,312,009
1,038,574
100,931
442,279
12,111

9 1,793
143,224
1,171,427
917,362
88,482
572,826
7,998

554,541

511,383

TOTAL ASSETS • •••.••• • . • • • • • • •.••..•••• 15,501,542

15,283,339

---13,393,976

-

174,252
512,003
169,254

69,314
2,017,0 11

---- .-:.--

Within 1 year • • • ••. •• • • • ••• • •.•••. • •• .
1 year to 5 years • • • •. .. . . . .. ..... • .. ..

After 5 years •.••••••. • ••.••••.••.••••
Obligation s of states and political subdivisions:
Ta x warrants and short- term notes and bill s••

All other ••• •••• .• •• • •• •.• • • •. • • • •.••.••
Oth er bonds, corporate stocks, and securities:
Certificates representing participations in
f e deral ag ency 'loans• • •.....•...• . ••. ..

All other (including corporate stocks) •• • • .••••
Cash Items in procen of coll ection ••••.... . . •. . .•
Reserves with Federal Reserve Bank • ..... . .. • . .•
Currency and coin • • •. .......•...•. . •........
Balances 'with banks in' the Unite d States . . . . •. . • .
Balanc es with banks in foreig n countries •..... .. .•
Other a ssets (includ ing investments in sub sid ia ries

CONDITION STATISTICS OF ALL MEMBER BANKS

Eleventh Federal Reserve District
(Million dollars)
Dec. 29,
1971

Jan. 27,

14,74B
2,434
4,636
1,708
303
1,257
14
1,525
860

14,825
2,611
4,572
1,687
323
1,336
17
1,624
928

12,87 8
2,280
3,834
1 46 1
'282

TOTAL ASSETSe ••••••• • • . • ••• • • ••• . • •
LIABIlITIES AND CAPITAL ACCOUNTS

27,485

27,923

D emand d e posits of banks .• . .•• • ••.•••.•
Other d emand d e posits• . . .....•.. . • . .•.•

Time dopaslts • ••• • •••• .. ••• . • • • • • •••• • .

1,721
10,071
10,689

1,812
10,734
10,457

Total d eposits•• . ..... . •.• . ••••.••.•••
Borrowing s .• • .... . ... . ..•.. . . . . . • . .. . •
Other lia bilities o .. ................. . ... .
Tota l capital accounts e . . .. . .. . .....•. .. .

22,481
1,998
1,088
1,918

23,003
1,726
1,287
1,907

27,485

27,923

Ite m

460, 11 9

ASSETS
loan s and discounts, gran . .. . . ..... ... . . .
U.S. Governm ent obligation s•.. ... ..• .. .. .
Other securities • • . • •••••......• .. •••••.•
Rese rves with Fed eral Rese rve Bank •••• • ..•
Co sh in vault •.• . •.•. • . • ••.•.•.•.•. •. . • •

Balances with banks In the United States ••••

Balanc es with bank s in foreig n countries e . ...
Cosh Items in proc ess of coll ection • . .• ......
Oth er assetse ... •.. ... • . • . .•• . •••.•.•••

RESERVE POSITIONS OF MEMBER BANKS

Eleventh Federal Reserve District
(Averages of dally figures. Thousand dollars )

Item

4 w eeks end ed
Fe b. 2,1972

5 wee ks end ed
Jan. 5, 1972

4 weeks ended
Feb. 3, 1971

888,099
B24,254
63,845
876,670
11,429
0
11,429

851,425
785,14B
66,277
889,126
-37,701
0
-37,701

820,983
764,630
56,353
817,634
3,349
0
3,349

959,336
746,502
212,834
928,953
30,383
528
29,855

912,046
706,155
205,891
907,40 1
4,645
1,924
2,72 1

B58,082
658,507
199,575
82B,250
29,832
214
29,6 18

1,847,435
1,570,756
276,679
1,805,623
41,B12
528
41,284

1,763,471
1,491,303
272,168
1,796,527
-33,056
1,924
-34,980

1,679,065
1,423,137
255,928
1,645,884
33,181
214
32,967

RESERVE "CITY BANKS
Total reserves held •••.... .... . .

With Fed eral Rese rve Bank ••••
Currency and coin ••• . . ... ...
Requir ed rese rves • • ••.•••..••..
Excess reservos • •.•.•.. ........
Borrowings . •..•••..... . ..•...
Free reserve s• •. •.•.... ..•.. . •

COUNTRY BANKS
Total reserves held . . • . .. • .. • • .•

With Fed eral Reserve Bank ••.•
Currency and coin ••• . ... . • ..
Required reserves • •• • .•• .. .. ...
Exc ess reserves ••.............•
Borrowing s .. . .. ....••• .......
Free rese rves • . .... .......•...

All MEMBER BANKS
Total reserves held . .. . •.. .... . •

W ith Federal Reserve Bank ••••
Currency and coin .••.. ......
Required reserves . .. . .•.. . .... .
Exce ss rese rve s••.. ... . . ... . .• .
Borrowings ..• •.. ... . ..• . ..•. .
Free reserves •.. .• ... •• • . •.. • .

---

Jan. 26,
1972

TOTAL LIABIlITIES AND CAPITAL
ACCOUNTse • ••••• •• ••••••••. •••• • •

not consolidate d) • •• .• • .• • •••• • ••• •• ••.• • ••

1~

1 ,4~~

-

1,418
882

~
=1,83 4

-

9,468
9,130

20,432
1,113
107 1
1:838

-

~
==:=::--

e-Estlmated

CONDITION OF THE FEDERAL RESERVE BANK OF DALLAS
(Thousand dollars)

-'

Item

Feb. 23,
1972

Jan. 26,
1972

Total gold certiAcate reserves . ... . ....... .. .
Discounts for member banks ... . ••. . •.. . . ...
Other discounts and advanc es •.. .• ..••....• .
U.S. Governm ent securities ... . . ..... . .. ....•
Tota l earn ing ossets . .. .... . .• ........ . .. ..
M e mb er bonk r eserve d e posits . • ..... . .. . . •.
Fed eral Rese rve notes in actual circulation . ..•.

200

805

3,179,109
3,179,309
1,612, 124
2,081,315

3,252,146
3,252,95 1
1,708,360
2,078,856

Fe b. 24,

~
---------------------------------------580,08~
526,046
390,426
o

o

o
2,807,~~~

2,807'08 1
1,558, 58 9

1~

----------------------------------------

BANK DEBITS, END.OF·MONTH DEPOSITS, AND DEPOSIT TURNOVER

SMSA's in Eleventh Federal Reserve District

-

(Dollar amounts In thousands, seasonally adjusted)
DE81TS TO DEMAND DEPOSIT ACCOUNTS'
January

DEMAND DEPOSITS'

Percent chango from

Annual rate of turnover

1972
December

Januar y

basis)

1971

1971

3,602,736
11,192,916
1,010,052
2,379,888
6,782,880
14,453,880
7,213,380

1
-6

Standard metropolitan

(Annual-rate

statistica l are a

OUISIANA. Monroe . . . . . • . . . . • . . . • • • . . • • . . . • . . . . • . • • . . . . • . • •
N
Shreveport. . . ... ............... .... ........ . . . . .
TEW MEXICO. Roswell' . . ..... .... .......... . ... .. .. ... . . . ...
EXAS, Abil. n.. . . • . . • • • • .. . . • • . • • • . • . • . • • • . . . . . • • • • . • . . . . • •
Amarillo . . • . . . • • . . . • . . . . . • • . . . . • . . . . • • . . . . . • • • . • • • • .
Austin. . . ... .. . . . .. .... .. . .. . . ...... . . .... . . . .. . ....
8eaumont·Port Arthur·Orange... . ........ .. . .. .. . . . . . . ..
:rownsCilirHor~ngen.San 8enlto •• ••.•... ...••. . • • ; .. . . . •
ryan
C
- ~h ege tatlon ... ...................... .. ......

January

31,

1972

January

1972

D ecember

January

1971
--~~--~==~--------~~~--~~~--~~--~--~--~
tRIZONA, Tucson. • • . . . . . • . . . • • •. . . • . • . . . • • • . • • • •• . . • . • . . • . .
$8,549,028
1%
24%
$307,388

3
0
28
16

;
-4

?'~:4'i~~

7237'056

f~~~1~rr<[[[i[ii[iiiiiiiiiiiiiiiUiiiii« 1:~;gH~i ~l

Galveston-Texas City...... ... . ... ........ .. ..... .... ..

&~~~~~':'.: ::::::::::::::::: :::::::::::::::::::::::::

McAlien-Pharr-Edlnburg. . . . . . . • . . • • . . • . • . . . . . • • • . . . . . • •

1~

3,132,492

~
:gt

Tm:m

1

2,605,104

f:r~~;~~{L} I[i i[i iii ii iii iii iii[ii iii iii [iii iii 2~i~f!ii;1

Texarkana (T.xas-Arkansas). . . ... . .................. ...

~~ift~:~~lis:.:.::::: : :::::::::::

:::::: ::::::::::::::: :

1~

~:m:m

~9 c.nters... . .. . . . .... ... ... . .... . .. .. .. .... ...... .. $423,455,988
~. Deposits of Individuals partners hips and corporations and of states and poI/tical
. County basis

'

,

98,952

29.5
33.8
37.3
22.1
20.3
38.7

44.0

23.3
22.3
38.6
39.4
27.2
27.1
24 .8
26.4
14.6

127,025

17.9
20.2
22.2
28.9
22.5

22.7
21.9
38.9
31.2
23.8
25.9
23.9
27.3
15.4
57.4
31.9
34 .8
24.3
41.8
23.4
23.7
16.6
13.4
18.2
19.7
27.6
17.2
18.9
21.8
25.3
20.7

34.9
27.6
44.8
21.8
22.6
16.6
14.9
17.2
19.3
28.8
16.7
18.3
23.2
24.6
20.6

$10,742,848

40.2

38.9

40.2

170,054

372,290
259,541
87,548
46,985
262,330
34,555
2,596,724
263,917
743,158
125,607
2,983,5 19
45,219
178,633
136,927
148,998

;i
1;
~1

5g

77,362
751,587
7 1,397

~g

6%

30.7
35.8

40 .5

43,538
106,751

14
:~
54
17
19
32
21

H
·
?~

1~

28.8
36.3

280,637

100,942

~

1,748,040

IZ

1971

80,541

11 2,623
128, 100

13%

56.0

32.7
37.2
25.4
44.2
26.1
30.8
19.9
14.6
18.3
19.8
30.0

28.0

24.7
25.6
20.6

21.2
13.9
62.0
30.7

subdivisions

INDUSTRIAL PRODUCTION
(Seasonally adJus1ed Indexes, 1967

= 100)
January

Ar.a and type of Ind.x

BUILDING PERMITS

""-

VALUATION (Dollar amounts in thousands)
Percent change

---

January

Area

.... RIZO NA
l TUcson
OUISIANA············ ·· · ·· •
Mo
Sh nro ._ wos t Monree •••. • .•
T ....~veport •• .• . ••...... . ..
EX
.... bll. n•
.... marlll~··· . ..............

:~stln •• : : :::: :: ::: : ::::: :
Br:urnont ... . .. . . . .... ....
Co Wnsvlll ...... . . .. . ..... .
Dalf us Christi • • .••• • •..•..•
Denl~~~ " " " '" •• • •• •••••

Elp
.. . .... ...... .. ....
FortaV;' ' " • • .•. •• .. • • •. •.
Gal orth • .• .. • . . . ... ..••
HOll \feston ••• . • • •• .• • • .•.•.

lQres~~n • •• . • • •• • •• • ••• •• ..
lUbb •••. . •.. • • •• .... . ..
Mldl:~~"""""•. •. .••' ." ...
" "
Od.
••• • • • •.
ssa
PortA ............... ....
San /thur . ... .... ........
San ..,ng e k ....... . . . . . .. .

Sharm~~onlo •• • •• • . •• • . • ..•

W:

T. ~

WI

January 1972 from

NUMBER

...... ..
.. ....
r kana . .... . .... .... . .
....

h~·· ·· ············· ·· ·

Total~2t: :alls ••••.•. •• ... . ..
~'tles . . ............

January

December

1971

1972

1972

694

$18,009

69
401

1,419
3,714

65
-20

53
125
523
153
97
460
1,250
27
408
372
55
2,393
61
175
91
73
60
86
1,314
42
36
175
59

613
2,252
16,877
1,302
631
4,408
33,226
321
28,099
6,222
250
38,307
1,537
3,026
1,637
715
336
605
11,537
501
616
1,394
876

29
91
-33
16
-11
-66
99
157
88
29
-7
-8
639
-8 1
225
119
265
51
-25
127
-35
-46
-70

9,252

$178,430

80%

2%

January

1971
319%
-25
51

1972p

TEXAS
Total industria l production . . .. ..
Manufacturing . ••....• . •..• • . • .
Durabl... . ... ... ....... .. . ..
Nondurabl ...... .... ..... ... .
Mining . . ... ..... . .. . .. . .......
Utllitle ....... .. .. .... .........
UNITED STATES
Total Industrial production .•••..
Manufacturing ••••.••••• • .•.•.•
Durable ................. . ...
Nondurabl.. .. . . .... . ....... .
Mining ............... . .. .... . .
Utlllti.s .. .. .... ...... . . . . ... . .

December

1971

November

1971

January

1971

125.9
129.4
137.2
123.7
112.8
143.3

124.1
127.6
135.5
121.8
11 0.3
144.1

124 .6r
127.4r
137.6
120.0r
112.4r
145.4r

113.2
116.2
134.0

107.9

107.6
105.7
98.4
116.5
107.3
137.1

107.0
105.2r
98.0r
11 5.8r
102.0r
139.6r

105.3
103.3
98.1
110.9
111.1
129.6

106.1

98.4
117.2
108.4
137.2

120.3
120.5
130,6

p-Prellmlnary
r-Revlsed
SOURCES: Board of Gove rnors of the Fe de ral Rese rve System
Federa l Reserve Bank of Dallas

104
100
14

74
66
8
42
-32
271
44
-87
4
5
-47
539
32
31
73
101
-44
-23
8
-22
45%

GROSS DEMAND AND TIME DEPOSITS OF MEMBER BANKS

Eleventh Federal Reserve District
(Averages of dally figures . Million dollars)
GROSS DEMAND DEPOSITS
Oat.

Total

city banks

Country
banks

1970danuary • •••
1971 . January ....
August .. . ..
September.
October • • •

10,793
11,532
11,468
11 ,571
11,562
11,641
11,981
12,3 13

4,910
5,236
5,246
5,311
5,246
5,264
5,519
5,580

5,883
6,296
6,222
6,260
6,316
6,377
6,462
6,733

Reserve

November ..
Decemb er ••

1972. January •• • .

TIME DEPOSITS
Total
7,108
9,038
9,615
9,735
9,977
10,025
10,273
10,672

city bank.

Country
bank.

2,568
3,635
3,714
3,769
3,819
3,879
4,044
4,244

4,540
5,403
5,901
5,966
6,158
6,146
6,229
6,428

Reserve

DAILY AVERAGE PRODUCTION OF CRUDE OIL

LABOR FORCE, EMPLOYMENT, AND UNEMPLOYMENT

(Thousand barrels)

Five Southwestern States'
Percent chango from
January

Area

January

December

December

1971

1972

FOUR SOUTHWESTERN
STATES .•••••• • . •••••.•.
Louisiana ••••••• •• • •••• • •

New Moxico .. . ....... . . .

Oklahoma •••••• • ••••••••
Texas ..•.. • . • • ....•••.•

Gulf Coa.I ••••••••••••
West Texas ....... . .. .

Ea.1 Texa. (proper) •• . ••
Panhandle ••••••••• . •••
Rest of stato •••••••••••

UNITED STATES .. .••••• .. • .

.....

January

1971

(Seasonally adjusted)

1971

1971r

6,691.9
2,485.9
323.1
592.3
3,290.6
626.2
1,650.1
200.1
71.8
742.4
9,305.7

6,621.6
2,522.3
320.0
588.9
3,190.4
612 .7
1,587.2
196.5
72.3
721.7
9,260.3

7,073.6
2,610.2
334.8
594.1
3,534.5
717.8
1,684.9
221.8
72.8
837.2
9,724.6

1.1%
-1.4
1.0
.6
3.1
2.2
4.0
1.8
-.7
2.9
.5%

-5.4%
-4.8
-3.5
- .3
-6.9
-12.8
-2.1
-9.8
-1.4
-11.3
-4.3%

r-Revlsed
SOURCES: American Petroleum Institute
U.S. Bureau of Mines
Federal Reserve Bank of Dallas

Percenl change
Thousands of persons
Jon.197~
--an a r ---D-e-ce-m
J- -u- -y-b-er----J- n
o -u-ar-y- Dec.
Jon.
1972p
1971
1971r
1971 ~

Itom

8'm:~

8,384.7

7,~~~:~

8,268. 1

Totc l unemployment •..•• .. ..

Unemploymenl role •••••••••

4.5%

4.8%

4.9%

6,527.1
1,147.4
616.5
530.8
5,379.7
229.2
430.5

6,461.2
1,135.2
614.4
520.8
5,326.0
227.4
417.5

6,319.9
1,129.0
609.9
519.1
5,190.9
230.5
394.2

8,4 67 .2

Civilian labor force . ••• . • .. .

Talal employmenl •••.• . •.•.•

7,:~~:~

1.0% 2.9
2.4%
13
-5:4 _ 6.4
' -.3 ,_.4

Total nonagricultural wage

and .alary employmenl....
Manufacluring...... ... ..
Durable..... . ...... . ..
Nondurable...........
Non~~nufacluring. • • . . . . •
M,ning .. .. .. .. .. .. .. ..
Con.lruclion . • • •• . • • • • •

3.3
1.6
1.1
2.3
3.6
_.6
9.2

1.0
1.1
.3
1.9
1.0
.8
3.1

Transportation and

0

public ulililie.. . . •• . . .
456.0
450.2
455.8
1.3
4'3
Trade.......... .. ....
1,550.9
· 1,522.9
1,486.7
1.8
5'5
Finance.. • . •• ... •••.••
344.8
342.6
326.9
.6
2'1
Service...............
1,038.2
1,040.5
1,017.0
_.2
3'9%
____
G_ov_e_r"_m_e_"I_.__._.__.__.___
.. .. ..
1,_3_30_.0
_____1_,3_2_4._9_____
1,_27_9_.9
________
.4~
1. Arizona, Louis/ana, New Mex/co, Oklahoma, and Texas
2. Actual change
'
p-Prellmlnary
r-Rev/sed
NOTE : Details may not add to totals because of rounding.
SOURCES: State employment agencies
Federal Reserve Bank of Dallas (seasonal adjustment)

LIVESTOCK ON FARMS AND RANCHES, JANUARY 1
(Thousands)
Five southwestern

stotes l

Texa.
Type
All callie and
calves ..... .

Milk cow •••• ..
Beef cows • . •.•

Sheep ••• . ••• .
Slock .heep ••
Feeders •••• •
Hags' . •• • • •• •
Loyer chickens ••

Turkey breeder
hens' .......

United Slale.

1972

1971

1972

1971

1972

1971

12,829
355
5,452
3,524
3,125
399
1,405
12,602

12,578
355
5,791
3,789
3,510
279
1,419
13,054

22,813
752
9,630
4,914
4,359
555
2,387
'18,713

22,029
757
9,89 1
5,239
4,822
417
2,316
'19,600

117,916
12,279
38,725
18,482
15,767
2,715
62,972
329,890

114,470
12,414
37,533
19,597
16,968
2,629
67,449
334,582

556

538

'564

'576

3,375

3,405

1. Arizona, Louisiana, New Mexico, Oklahoma, and Texas
2. Data as of December of preceding year
3. Louisiana, Oklahoma, and Texas only
4. Oklahoma and Texas only
SOURCE: U.S. Department of Agriculture

being placed on their fields. High
rates of production are straining
the capacity of many fields in
both states.
Cotton harvest in the five states
of the Eleventh District is almost
complete and, according to J anuary estimates, should total about
4.2 million bales-B percent fewer
than last season. A drop in the
production of upland cotton accounted for all the decline. Pima
cotton production increased nearly
60 percent. However, higher prices

VALUE OF CONSTRUCTION CONTRACTS
(Million do ll ars)

"""",.,.
January

Dec ember

November

Area and Iype

1972

1971

1971

FIVE SOUTHWESTERN STATES' .
Re.ldenlial building . . ..••.••

840
413
221
207
6,234
2,667
1,728
1,840

807
405
198
204
6,286
2,997
1,959
1,331

803
381
179
244
6,405
3,001
2,128
1,275

Nonresidential building • • ••..

Nonbuilding conslructlon ••••• .
UNITED STATES ...•... .. .••. .
Residential building • • . . .. ...

Nanresidenlia l building . •• • ••
Nonbuilding construction .•... .

Ja nuarY

~
542
227
221
93
4374
1'621
1:72 1
1 032

.-:.--

1. Arizona, Louisiana, New Mexico, Oklahoma, and Texas
r- Revlsed
NOTE : Details may not add to totals because of rounding.
SO URCE: F. W. Dodge Division, McGraw-Hil i Informal/on Systems CompanY

for all qualities of cotton dampen
the economic impact of lower
production.
Intended plantings for this
year indicate acreage increases
of 6 percent for cotton and 5 percent for soybeans. Corn acreage is
expected to decline 11 percent,
and sorghum acreage will be about
the same as last year.
The five states had 22.B million
head of cattle on January 1-3.6
percent more than at the start of
1971. Texas, with 12.B million
head, continued to lead in the

Southwest. Totaling only 4.9
million, sheep and lamb numbers
in the region were off 6 percent
t
from a year earlier.
Cash receipts from farm mar1e {1
ings in the five states totaled $6.
billion last year-3 percent more 'Il
than in 1970. With the increa e:rtlcosts, however, net income to a
ers is not expected to rise much
above the nearly $2.3 billion . ts
realized in 1970. Livestock rece1P
rose 3 percent in 1971 to nearly
$3.9 billion. Crop receipts rose
4 percent to over $2.2 billion,

f