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ANNUAL
REPORT
1950

FEDERAL RESERVE BANK
OF DALLAS
This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org)

Dallas
DIRECTORS
J.

R.

(Chairman and Federal Reserve Agent)
President, Woodley Petroleum Company
Houston. Texas

R. PARTEN

B. ANDERSON (Deputy Chairman)
General Manager, W. T. Waggoner Estate
Vernon, Texas

GEORGE

W. F. BEALL

President and Genera! Manager
J Beall Brothers 3, Department Stores
fack,onville, Texas

P.

L.

MACGREGOR

Chairman of the Board
President and General Manager
Dallas Power & Light Company
Dallas, Texas

J.

EDD McLAUGHLIN

Vice President, Security State Bank
and Trust Company, Ralls, Texas

P. BUTLER

President, First National Bank in Houston
Houston, Texas

J.

President, The Cooper Company, Inc.
Waco, Texas

G. A. FRIERSON

G. A. Frierson & Son, Merchants and Planters
Shreveport, Louisiana

* Deceased

R. MILAM*

W.

L.

PETERSON

President, The State National Bank
Denison, Texa,'

Febmary 12, 1951.

OFFICERS

R.

B.

COLEMAN,

E. B.

AUSTIN,

L. G.

PONDROM,

President

W. D. GENTRY,

First Vice President

J. L.

Vice President

Vice President

H. R. DEMoss,
W. H. IRONS,

R. R. GILI;lERT,

Vice President ancI Cashier

T.

Vice President

W. PLANT,

Assistant Cashier

LEON DANIELS,

Counsel

E. H. BERG,

MORGAN H. RICE,

Assistant Cashier

Assistant Cashier

HERMAN W. KILMAN,

Vice Presidwt

HARRY A. SHUFORD,

Assistant Cashier

W. D. WALLER,

Vice President

MAC C. SMYTH,

COOK,

HOWARD CARRITHERS,

Assistant Cashier

General Auditor

Assistant General Auditor

Assistant Vice President and
Secretary of the Board

FEDERAL ADVISORY COUNCIL MEMBER
DEWITT

T.

RAY

President, National City Bank of Dallas
Dallas. Texas

Houston
DIRECTORS
(Chairman)
President, C. Jim Stew/lTt & Stevenson, Inc.
Houston. Texas

Ross STEWART

P. R. HAMILL

R. LEE

N.

CHARLES

President, Bay City Bank & Trust Company
Bay City, Texas

SHEPARDSON

Dean of Agriculture
A. & M. College of Texas
College Station, Texas

KEMPNER

Chairman of Executive Committee
United States National Bank
Galveston, Texas

HERBERT G. SUTTON

T. O. Sutton and Sons
Colmesneil, Texas

O.

MELVIN ROUFF

R. WEYRICH

President, Houston Bank & Trust Company
Houston, Texas

President, Houston National Bank
Houston, Texas

OFFICERS
Vice President in Charge

W. H. HOLLOWAY,

H. K. DAVIS,

B.

Cashier

.T.

TROY,

Assistant Cashier

EI Paso
DIRECTORS
(Chairman)
President, Newspaper Printing Corporation
El Paso, Texas

DORRANCE D. RODERICK

HAL BOGLE

GEORGE G. MATKIN

Livestock feeding, farming, and ranching
Dexter, New Mexico

President, State National Bank
El Paso, Texas

HIRAM S. CORBETT

W. S. WARNOCK

President, J. Knox Corbett Lumber Company
Tucson, Arizona

W.

Vice President, El
El Paso, Texas

Pa.~o

National Bank

H. HOLCOMBE

Executive Vice President
Security State Bank
Pecos, Texas

W. HENRY WOOLDRIDI;E

President, Lone Star Motor Company
El Paso, Texas

OFFICERS
C. M. ROWLAND,

Vice President in Charge

ALVIN

E.

RUSSELL,

Cashier

T.

C.

ARNOLD,

Assistant Cashier

San Antonio
DIRECTORS
(Chairman)
Attorney at Law
San Antonio, Texas

HENRY P. DROUGHT

RILEY PETERS

E. A. BAETZ

President, First State Bank
Kerrville, Texas

President, Bexar County National Bank
San Antonio, Texas
EDWARD

E.

HALE

C. L.

Chairman of the Department and
Professor of Economics
The University of Texas, Austin, Texas

SKAGGS

President, The First National Bank of Weslaco
Weslaco, Texas

D. HAYDEN PERRY

E.

R. L.

WROE

President, American National Bank
Austin, Texas

Livestock farming
Robstown, Texas

OFFICERS
W. E.

EAGLE,

Vice President in Charge

ALFRED

E.

MUNDT,

Cashier

F. C.

MAGEE,

Assistant Cashier

Business at a Glance

• Department Store Sales (1935·39
• Bank Debits

1949

417

385

+8.3

$55,010,23'2'.000

$46,208,892,000

+19.0

706,000

655.000

+7.8

926,799,000

831,128,000

+11.5

18,585

15,489

+20.0

= 100)

(24 Cities)

• Manufacturing Employment
• Crude Petroleum Production

Percentage
change

1950

(Barrels)

• New Wells Drilled
•

Construction Contracts Awarded

$ 1,190,343,000

$

756,814,000

+57.3

•

Residential Contract Awards .

$

554,681,000

$

299,132,000

+85.4

•

Nonresidential Contract Awards

$

635,662,000

$

457,682,000

+38.9

$ 3,300,000,000

$ 3,437,218,000

-4.0

112

155

-27.7

126

120

+5.0

$ 7,198,697,000

$ 6,438,675,000

+1l.8

$ 2,406,140,000

$ 2,030,838,000

+18.5

$ 7,657,094,000

$ 6,839.209.000

+12.0

• Cash Receipts from Farm Marketings
• Crop Production (1935·39 =

100)

•

Livestock and Products (1935·39

•

Member Bank Deposits

•

Member Bank Loans

•

Member Bank Resources

•

(Est.)

= 100)

(December 31) •

(December 31)

(December 31)

Eleventh Federal Reserve District
•

Arizona, Louisiana, New Mexico, Oklahoma, and Texas

ANNUAL REPORT • 1950
FEDERAL

RESERVE

BANK

o

F

DALLAS

Review of Economic Developments
The indicators of economic activity in the

new decade experienced many of the ~ame

Eleventh Federal Reserve District and the five

violent changes, foreboding developments,

~tates

lying wholly or partly in the District

and stimulants that were present in 1940.

emphasize the prosperity, full production, and

Moreover, 1950 foreshadowed many of the

full employment that prevailed in the South-

~ame

west during 1950. Such major sources of

in 1940 -

income as petroleum production and refining,

government controls over private enterprise,

construction, manufacturing, Ii vestock pro-

increasing production to meet a growing gov-

duction, and general trade and services

ernment-private demand, and inflation, or

~howed

increases which raised the total

continuing decline in the purchasing power of

income of the area from 5 percent to 10 per-

the dollar. These actual and impending devel-

cent above the $15,700,000,000 of the preced-

opments must tend to lessen somewhat sati~­

ing year. Only crop production and cash

faction with the accomplishments of 1950.

receipts from farm marketings -

problems that appeared in the outlook
problems of shortages, spreading

L1

restricted

During the first few months of 1950,

by government edicts, unfavorable weather,

although economic activity was maintained at

decline~

high levels, the threat of surpluses in the prod-

and insect infestation -

showed

ucts of some of the District's major source~

from 1949 totals.
the

of income, such as agriculture and petroleum,

Southwest in 1950 was different from that in

was becoming imminent. It was also generally

the Nation only to the extent that, in general,

recognized that expanding credit and more

percentage gains in this area were larger. The

lenient credit terms were helping notably to

new decade opened on the same note that was

sustain the unusual demand for major dur-

characteristic throughout most of the forties

able goods and housing. Many analysts and

unusual economic growth, expansion, and

businessmen looked forward with some con-

prosperity, as measured in such terms as in-

cern to the possibility of a decline in economic

come, profits, and utilization of the area's

activity during the last half of the year. The

material and human resources.

Korean War and the deterioration of inter-

The picture of economIC activity

-

III

It is significant that this first year of the
»»

national relations abruptly changed that out5

«tr

look, and the Nation and the Southwest began

materials and higher wage rates exerted

to take steps toward converting to the "garri-

upward pressure on prices, although the indus-

son economy" that the new situation requires.

try was successful in holding a generally
stable price line.

PETROLEUM
Crude petroleum production in the Eleventh

MANUFACTURING

District decreased during the first quarter of

Most of the major manufacturing industries

1950, in response to somewhat lower than

showed gains in employment in 1950, indicat-

expected demand. Between March and Sep-

ing a larger volume of output, as hours of

tember, however, output of the District's wells

work tended to increase and technological

rose steadily to reach a new record of

progress improved productivity. At the end of

2,929,210 barrels per day. Despite a moder-

the year about 700,000 were employed in

ate contraction in allowables during the fourth

manufacturing in the five southwestern states

quarter of the year, total crude oil production

-

in the District during 1950 reached 926,-

shift to a defense economy stimulated these

800,000 barrels, or 12 percent above 1949

gains as the area's industry prepared to help

output and only slightly below the all-time

meet the Nation's military requirements. Sev-

record reached in 1948.

eral of the most notable increases were in such

a total 8 percent above a year earlier. The

industries as aircraft and other transportation

As the demand for crude increased, the
industry stepped up its search for oil and

equipment -

up 20 percent, machinery man-

established a new record for the number of

ufacturing -

up 18 percent, primary metal

wells drilled in a single year -

manufacturing -

about 20 per-

cal products -

cent above 1949. Also reflecting the rising

up 12 percent, and chemiup 6 percent.

demand for petroleum, the price structure

Accompanying the increase in manufactur-

strengthened notably after the first quarter of

ing employment was a comparable rise in the

the year. Higher costs for steel and other

number employed in nonmanufacturing, non·

CRUDE OIL PRODUCTION
Millions

:::..

0

Borre s oer Day

OU~SI~E LL~TH~EDUL~EsJRvl otL L~W

..J..

~

1/

•.••,•••••,••••• j...
o

1.....1...····..'

[

•. ...

2.4 f------~...

2n

I

. (:

Mil ions of Borrels per Day

1

..···-1
•••••••

j

I

;itttt

•..• I

·········r····.·j.•••• ~...4
FEDERAL
1 TELEVENTH
RESERVE DISTRICT
I

1

JFMAMJJASONDJ

1949

Source' American Petroleum Institute.

".

I"

I

+ti-!tt++

I

I

o4t

2.4

2~

0

FMAMJJASOND

1950

agricultural industries, with retail trade con-

construction labor, and the level of construc-

tributing a large part of the increase. By mid-

tion wage rates. The output of building mate-

December, nonfarm employment in the five

rials rose substantially, and full employment

southwestern states was at an all-time peak -

prevailed among construction workers at

about 4,000,000 -

favorable wage rates.

5 percent over the total

reported at the end of 1949.

AGRICULTURE

CONSTRUCTION ACTIVITY

Lower crop production, higher prices, and

Led by residential contract awards, the

lower income were characteristics of agricul-

construction boom in the Eleventh Federal

ture in the District in 1950. Year-end results,

Reserve District substantially outpaced the

however, were much more favorable than had

increase for the Nation as a whole. Residen-

been anticipated 12 months earlier. In fact,

tial contract awards of $555,000,000 (85 per-

the year was one of sharp contrasts and

cent above 1949) and nonresidential awards

changes.

of $636,000,000 (39 percent above 1949)

In response to fears of overproduction

combined to establish a new record for total

and surpluses, government restrictions were

construction contracts awarded in the District.

imposed upon such important crops as cotton,

The abnormally large increase in the volume

wheat, peanuts, and rice. By the end of the

of construction extended its influence to the

year the fear of shortages caused the Govern-

building materials industry, the demand for

ment to remove most restrictions and urge allout production. Whereas early in the year a

CONSTRUCTION CONTRACTS AWARDED

downward price movement had been expected,

Eleventh Federal Reserve District
Million. ot Dollar.
1~00

MlIIlon. of Dollar.

sharp increases during the last 6 months

I~OO

raised the prices of farm products to record
1-----------==-----.,1,200

or near-record highs. Instead of a decline in
the District's cash farm income of as much as

1,000

20 to 25 percent from the record 1949 level
-

800

forecast early in 1950 -

year-end esti-

mates indicate a decline of perhaps less than
5 percent.

600

Reduction in crop acreage and lower yields
resulted in smaller harvests of cotton, wheat,

400

peanuts, citrus fruits, and several other important agricultural commodities, while larger

200

harvests were obtained from such crops as
grain sorghums, rice, commercial vegetables,
and corn.
»»

7

««

In contrast with declining crop production,

The District's farm operators added sub-

the output of livestock and livestock products

stantially to their capital through large pur-

in the District rose about 5 percent in 1950

chases of machinery and equipment, reduced

as farmers and ranchers stepped up their pro-

their indebtedness, achieved more efficient

duction of beef, veal, lamb, pork, poultry,

farm management practices, made encourag-

and milk. Major livestock products showing

ing progress in soil conservation, and enjoyed

smaller production were wool and mohair.

the advantages of better systems of crop rota-

Prices of farm commodities in the District

tion. At the year's end farmers of the District

advanced about 40 percent during 1950, with

owned a larger equity in the agricultural

most commodities at the year's high in Decem-

resources of the area than in many years.

ber. Largest price increases were reported for

TRADE

cotton and cottonseed, cattle and calves, hogs,
sheep and lambs, rice, wool, and mohair.
Higher prices offset to a considerable degret'
the effect of lower production upon income,

Department stores and retail outlets in the
District enjoyed a banner year in 1950. Sales
volume was very heavy and reflected the high

with the result that cash receipts from farm

level of consumer incomes resulting from the

marketings in the five southwestern states

expansion of petroleum activity, booming con-

totaled perhaps $3,300,000,000, as compared

struction, rising employment, large govern-

with $3,400,000,000, the record reached in
]949.

ment payments (including the veterans' insurance refund), and favorable

agricultural

marketings. Liberalization of credit terms
CASH RECEIPTS FROM FARM MARKETINGS
Five Southwestern States
Millions 01 00110"

4,000

during the first half of the year and war-scare

Mililon.s.of Dollc~s

4,000

buying and buying in anticipation of consumer credit controls during the third quarter
strongly stimulated the sale of durable goods.

3,000'1----------1':

3,000

Regulation W tended to check the rising volume of durable goods sales during the closing
months of 1950, but an unusually heavy

2,000

2.,000

Christmas demand for a very wide variety of
merchandise raised retail sales to new high
levels. The index of department store sales in
the District showed an increase of about 8

1,000

percent over 1949.
Improvement in the efficiency of sales personnel, success in reducing handling costs of
stocks, and fewer markdown and clearance
sales improved profit margins of retailers.
• 8 ••

These developments plus the increased volume

many durable goods, such as major appli-

of business made 1950 a very profitable year

ances, furniture, used cars, tires and batteries,

for retailers as a group.

and television sets, were actively seeking mer-

A large increase in instalment receivables

chandise at the year's end.

of department stores in the District indicates

The high level of trade and business also is

the importance of credit as one supporting

reflected, in a general way, by the increase in

factor in the 1950 sales volume. By October

bank debits during the year. Banks in 24 cities

1, instalment receivables had increased 57

in the District reported an increase of 19 per-

percent. Collections on instalment accounts

cent in the amount of checks drawn against

were slower during 1950; the collection ratio

deposits during 1950 -

averaged 12 percent between June and Octo-

$55,000,000,000. Moreover, during each of

bel', the lowest level on record. This trend

the last 6 months of the year, debits were

during the year reflected largely the longer

about $1,000,000,000 larger than during the

pay-out periods and smaller down payments.

comparable months of 1949.

the total exceeding

A slight improvement occurred during the last

Still another indication of the willingness

2 months of the year following the tightening

of individuals and businesses to spend is the

of Regulation W.

increase in the annual rate of turnover of bank

Retail inventories were generally larger at

deposits. During 1950 bank deposits turned

the end of 1950 than a year earlier, as mer-

over about 13.8 times a year, as compared

chants attempted to obtain stocks of goods as

wi th 12.7 ti mes in 1949. Following the

a protection against probable shortages and

Korean development, as the public and busi-

anticipated price increases in the months

nesses became more inflation-minded, the use

ahead. Department store stocks were about 24

of bank deposits turned up sharply and in

percent higher on December 31, 1950, than

December was running at a rate of about 16.6

on the same date of 1949, while retailers of

times a year.

DEPARTMENT STORE SALES
Eleventh Federal Reserve District

Perce nt

600

I

J~

500

400

.....

-....- --

-

~

/

300

o

Pe rcen'

! 1935·39 0100)

600

JFMAMJJASONDJ

1949

I\

--

.....

~

"""~ ~

400

300
F

M

A

M

J

1950

.. " .

500

J

A

SON

o

D

BANKING
All Member Banks -

added $42,000,000 to their holdings of Gov-

Inasmuch as bank-

ernment securities and $53,000,000 to their

ing both reflects and facilitates business,

investment in other securities -

industrial, and agricultural activity in the

issues of local government units.

principally

area which it serves, it is not surprising that

The high level of business and industrial

the principal asset and liability accounts of

activity, the expansion of bank credit, and a

the District's member banks showed substan-

net flow of Treasury funds into the District

tial increases during 1950. As was the case in

resulted in a notable growth of $760,000,000

other types of economic activity, member

in member bank deposits, raising total

banks closed the year with most of their major

deposits of these banks to more than $7,198,-

accounts at record levels. Seasonal declines

000,000 at the end of 1950 -

during the first half of 1950 generally were

record high. That increase in 1950 compares

somewhat less than might have been expected,

with an increase of $300,000,000 in 1949.

while the boom following the outbreak of war

All of the growth in 1950 occurred in demand

in Korea was clearly reflected in abnormally

deposits and took place during the last half

rapid growth during the last 6 months.

of the year. Time deposits showed an increase

an all-time

Loans of all member banks in the Dis-

of $18,000,000 during the second quarter of

trict rose by $375,000,000 during the year,

1950, resuming the upward trend of the pre-

or more than twice as much as in 1949. The

ceding year. Following the Korean outbreak,

total loan increase was distributed widely

the growth in time deposits of individuals,

throughout the District and occurred in com-

partnerships, and corporations was checked,

mercial and industrial, agricultural, real

while other forms of time deposits declined.

estate, and consumer credits.

As a result of these changes, time deposits
declined about $3,000,000 during the year.

An increase in bank credit also occurred
with respect to investments. Member banks

Reserve balances of the District's member

TOTAL DEPOSITS - MEMBER BANKS
Eleventh Federal Reserve District

Billions of Dollars

Billions of Dollars

7.5

7.5

7.0

/

6.5
6.0

5.5

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

5.0

o

Dee.31
1945

Junll29
DllC.31
1946

/'
',,-

-

-

~ !llI...

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

Junll30
DllC.31
1947

"" ""'

Junll30

DllC.31
1948

•• 10 ••

/

/

June30
DllC.31
1949

~

7.0

6.5
6.0

5.5
5.0

o

Junll30
DllC.31
1950

banks declined moderately during the first

Although reserve positions of individual

several months of the year, reaching the low

banks and, in fact, broad classes of banks

point for 1950 during May. Thereafter,

naturally varied widely as to ease or tightness,

average balances increased each month and

excess reserves of the District's member banks

during the last half of December totaled

on the whole were generally large enough to

$883,536,000, a gain for the year of about

permit considerable freedom with respect to

$68,263,000. Factors influencing reserve bal·

loan and investment policies. During most

ances included a net outward flow of funds

months of the year excess reserves averaged

as a result of interdistrict commercial and

about $80-85,000,000, or approximately 10

financial transactions, a more.than.offsetting

percent of total reserve balances.

inward flow of funds from Treasury opera-

Weekly Reporting Member Banks-

tions, and a moderate increase in Federal

Trends reflecting developments at these larger

Reserve credit and other Federal Reserve

banks in the District generally were similar to

accounts. Thus, banks obtained reserves to

those which were characteristic of all member

meet the rising requirements that were the

banks. Year-end totals of the weekly reporting

result of the very large growth in deposits

member banks showed 1950 to be a record-

that occurred during the year. There were no

breaking year in all important respects-

changes in legal reserve requirements during

resources, earning assets, deposits, and capital

1950.

structure. Moreover, the growth in resources
and capital structure of these banks -

not

only in 1950 but throughout the past 10 years

MEMBER BANK RESERVES
Eleventh Federal Reserve District
Milloon. 01 00110'"

-has strengthened greatly their ability to pro·

'-'oIloon. of 00110'0

1,200

1,200

vide the banking services that are an essential
MEMBER BANK
RESERVE BALANCES

requirement of a rapidly expanding economic
area such as the Southwest.
The most significant development at the
weekly reporting member banks was the
abnormally strong demand for credit and the
very large increase in bank loans during the
last 6 months of the year. Even early in 1950
the persistent demand of borrowers for bank
credit limited the usual decline, but beginning
in late June the demand strengthened to such

_ _ 200

an extent that an almost unbroken succession
of weekly increases was reported throughout
the remainder of the year. Total loans of these
u n

11

«(f

banks rose to $1,477,000,000 late in Decem-

increased $36,000,000, or about 16 percent.

ber, or an increase of about $287,000,000 for

The large loan volume was the result of

the year and $263,000,000 for the July-

such factors as the increased demand for busi-

December period. The rate of increase-

ness funds as a result of higher prices and

about 22 percent -

during the last 6 months

higher costs of doing business, the financing

of 1950 was about the same as for the Nation's

required to move a large volume of agricul-

weekly reporting member banks.

tural commodities to markets, the efforts of

The demand for bank credit was not

businesses to increase inventories to keep pace

restricted to particular types but was consist-

with sales volume and to protect against price

ently strong from all major classes of bor-

increases and expected shortages of goods and

rowers. Between December 28, 1949, and

materials, activities stimulated by speculative

June 28, 1950, commercial, industrial, and

and inflationary ventures, the extremely active

agricultural loans showed a very slight

condition in the construction and real estate

seasonal decline amounting to about $11,-

field, and the abnormally strong demand for

000,000, or less than 1V2 percent. On the

consumer durable goods.

other hand, real estate loans and "other"
loans -

Investments of the weekly reporting mem-

including consumer-type credits-

ber banks showed a decline during 1950 as

increased steadily, with the former rising

moderate reductions were made in holdings

almost 10 percent and the latter about 11 per-

of Governments, partially offset by addi-

cent. During the last 6 months of the year a

tional investment in other securities. Principal

very substantial increase in commercial,

changes in the U. S. Government security port-

industrial, and agricultural loans occurred,

folios included declines in investment in cer-

amounting to $202,000,000, or almost 25 per-

. tificates and bonds and increases in holdings

cent; real estate loans increased $16,000,000,

of Treasury bill~ and notes. Higher yields on

or about 16 percent; and "other" loans

Treasury bills, especially during the last 4

TOTAL LOANS-WEEKLY REPORTING MEMBER BANKS
U.S.

District
Bi II ions 01 Dollars

Billions of Dollars

1.6

1.5

1.4~-+-----+-+---+-----+-+---+-----+-+--+---4-+--1
I. 3....

r----..-.,.. . . . . ._

1...

1.2 •••••

1.1

~

_

I I ~I I

•••,.....
••••••;
I····j ••••••••••••••••••• I
I

u-:r:~
V+..

IIII
UN ITED STAT ES

I I I

I : •• J.......

·;....I··_··-l---l 28
26

I

I

I

'....-".:.1;-..-··+·7.----.,·If---+---f----t---i24

I

I

I

I

..)······'C~·2~·~·~~~·~··F~DE~AL
~ES~RVE
DISTRICT
I

I

I

J

J

AS

22

I

20

1.01--+---l-+--+-.,..:..--I----i-+--+----:~-+--+-+----t-------;r--+---i-:t-_+____;I>--+____T~
o ~ ~ i ; 1 l + ~ ~
-"
4
i
i
~
'i
,
0
J

F

M

A

M

J

J

AS

0

NO

J

1949

FM

AM

1950

•• 11 ••

0

NO

months of the year, induced banks to place

huge volume of bank deposits, and the ability

additional funds in those issues; while the

of individuals and businesses to expand their

character of Treasury refunding offerings,

use of credit in one form or another.

which gradually replaced the certificates of

The actual decline in the purchasing power

indebtedness with Treasury notes, accounts

of the dollar during that period, although sub-

for the shift in holdings of those issues. Net

stantial, was much less than might have

changes in investments during the year showed

occurred had a strong inflation-conscious-

a decrease in U. S. Governments of about

ness pervaded public and business thinking.

$62,000,000 and an increase in other secu-

Expanding production, prompt satisfaction of

rities of almost $25,000,000.

backlog demands for goods, anticipations of

Total deposits of the weekly reporting mem-

wholly adequate or even excessive supplies in

ber banks showed an increase of more than

the foreseeable future, and, at times, moder-

$375,000,000 during the year, with all of the

ately restrictive debt management and credit

increase occurring during the last 6 months.

policy tended to restrain somewhat the infla-

Adjusted demand deposits, reflecting largely

tionary growth. Even during the first several

the demand deposits of individuals, partner-

months of 1950 measures .of inflation such as

ships, and corporations, were relatively stable

the major price indexes showed comparative

until the middle of June, with the range of

stability.

fluctuation being within a few million dollars.

The outbreak of war in Korea and the sud-

After that date, this class of deposits moved
upward and at the end of the year was more

INDEXES OF INFLATION
Percentage Increas.. - Jan. to Dec. 1950

A substantial increase -

p.,ee.nt

Perc-ent

than $190,000,000 higher than a year earlier.

50

50

about $119,000,000

-also occurred in interbank demand deposits

J

40

Juring the year.

28 Boslc commodlll1
I

INFLATION

30

~--

I

20

last half of 1950, presented the most serious

V

J

domestic economic problem of the year.
10

During the preceding postwar years the
inflationary potential was known to be danger-

o

ously large; it consisted of vast holdings of

I

"

30

/

Inflationary forces and trends, which built
up rapidly in strength and degree during the

I

/

40

1'""~

20

, ....

Lbyq··-,·t1

o
&Q·...,I
I
P,I".
-I/
------,7J_-J,'''

5100"ri"/"I
I ~l

.

- Wholesale - I

I'

I
~:
~~-!,-.:.et Cons~mer.·
'--_":';':='- -Prices - I

0

liquid assets, very large bank holdings of
-10

Government securities readily convertible into

Jan.

F;

1.1

A

1.1

J

J

A

SOH

SourcI' Burlau al Lobor Statistics; Standard a Poor's Corp.

bank reserves, a relatively low turnover of the
13 ••

-10

Ole.

den need for transition to a defense economy

servIces as rapidly as possible; while this is

caused an abrupt and very dangerous change

being done, however, positive steps should be

in the economic situation. Quickly, the outlook

taken to prevent any further growth in the

changed from one of potential surpluses to

money supply and to restrict as much as possi-

probable shortages -

ble nonessential private and government

able goods -

especially of many dur-

and with this change occurred

demands.

a sharp increase in personal consumption

An increase in the money supply via govern-

expenditures and business expenditures, a

ment deficit financing through the banking

decline in personal savings, greater use of

system must be prevented. This requires elimi-

liquid assets, a very sharp increase in bank

nation of nonessential government expendi-

loans, a sharp increase in the money supply,

tures and increased taxes sufficient to bring

and a more rapid rate of turnover of bank

government receipts into balance with expendi-

deposits. These developments were promptly

tures if possible. If, however, it should prove

reflected in significant increases in the princi-

impossible to balance the budget, the deficit

pal price indexes, prices of equity securities,

should be financed through nonbanking

and land and property values.

sources. Equally important is the prevention

It is notable that the inflation that occurred
during 1950 -

of an increase in the money supply through

although undoubtedly stimu-

private credit expansion. This requires elimi-

lated by anticipation of the consequences of

nation of nonessential, nonproductive expendi-

the defense program -

was the result of

tures that might be supported by bank credit

developments in the private sector of the econ-

expansion and the use of firm, effective control

omy, including a marked expansion of credit.

measures by the Federal Reserve System over

Actual defense expenditures had not exerted

the cost and availability of commercial bank

an important effect. This fact emphasizes the

reserves. These are the basic lines of attack if

inflationary dangers that lie ahead as the

further inflation is to be prevented and the

defense program swings into full force. It also

decline in the purchasing power of the dollar

emphasizes the imperative necessity of taking

checked.

appropriate measures that reach to the roots
of the problem -

CREDIT POLICY

i.e., a supply of goods and

During the first several months of 1950

services not large enough to balance at stable

Federal Reserve credit policy was pointed

prices a demand supported by an excessive

toward moderate firmness and restraint upon

and growing money supply or volume of pur-

bank reserves. Open market operations were

chasing power.

executed in such a manner as to permit a slight

Every practicable effort should be made by

increase in the yields on Government securi-

business, industry, labor, and Government to

ties to discourage their monetization by banks.

expand the production of essential goods and

When the change in the international situa-

tion set off a chain of events which greatly

the latter part of May, the decline reflecting

intensified the inflationary dangers, the Sys-

principally a reduction in holdings of Govern-

tem undertook more restrictive credit action.

ment securities by the System Open Market

Banks were strongly urged to cooperate volun-

Account. On December 31, 1949, the System's

tarily in restraining the growth of bank credit,

portfolio of Governments totaled $18,885,-

a further and somewhat more substantial

000,000, as compared with holdings of

increase in the yield on short-term Govern-

$17,290,000,000 on May 24, 1950. The ma-

ment securities was permitted, the discount

jor factors in the decline were a "runoff" of

rate of the Federal Reserve banks was raised,

more than $830,000,000 in Treasury bills, as

selective credit controls on consumer instal-

higher yields induced banks to increase their

ment credit and housing were initiated, and

investment in these issues, and net sales of

later, in December, an increase in reserve

about $1,165,000,000 of restricted bonds.

requirements (effective early in 1951) was
announced.

A gradual decline in member bank reserve
balances and a slight increase in yields on

Throughout the year, however, the difficulty

Government securities accompanied these

of coordinating the closely related tasks of

changes in holdings. By the end of May,

management of the huge national debt and

member bank reserves had declined by more

effective credit policy was forcefully empha-

than $1,000,000,000. Inasmuch as required

sized. Credit policies which influence the avail-

reserves of these banks were only about

ability of bank reserves affect interest rates,

$300,000,000 lower by the end of the period,

and such changes in rates tend to affect the

it can be concluded that the System's open

terms upon which the Treasury is able to

market operations exerted some degree of

obtain new money in the market or carryon

firmness on reserve positions. The average

refunding operations. Moreover, it is gener-

discount rate on weekly offerings of Treasury

ally recognized that, in view of the very large

bills rose from 1.087 percent on the last issue

size of the government debt, orderly conditions

in December 1949 to 1.167 percent on the last

must be maintained in the Government secu-

issue in May. Yields on certificates of indebt-

rities market; this requirement bears a close

edness moved upward from an average of

relationship to credit policy. Failure to coor-

1.12 percent in January to 1.18 percent in

dinate these two tasks during 1950 greatly

May, while the average yield on Treasury

complicated the administration of the Sys-

bonds of 15 years or longer maturity rose

tem's credit policy and reduced its effective-

from 2.20 percent to 2.31 percent.

ness in checking the growth of bank reserves
and the expansion of bank credit.

Early in May the Treasury announced an
offering of 13-month I1A,-percent notes in

Reserve bank credit in the market declined

exchange for certificates maturing June 1 and

gradually from the beginning of the year to

July 1. This announcement tended to freeze

n n

1;) .(

C.

the pattern of the short-term rate structure

under the circumstances, the Board of Gov-

until completion of the July refunding and

ernors and the Federal Open Market Com-

created an additional support problem for the

mittee announced on August 18 that they were

System. Market offerings of June and July

prepared "to use all the means at their com·

certificates were substantial, and System hold-

mand to restrain further expansion of bank

ings of short-term securities increased.

credit consistent with the policy of maintaining

Between mid-May and the first week in July,

orderly conditions in the Government securi-

holdings of short-term Governments rose by

ties market."

about $1,500,000,000, although holdings of
bonds decreased about $350,000,000. Despite
the increase in reserve credit in the market,
member bank reserves rose only moderately
as other market factors influencing reserves
had a largely offsetting, contractive effect.

In line with the above policy, the Board of
Governors approved increases in the redis·
count rates of the Reserve banks from IV2
percent to 1% percent, such increases taking
place between August 21 and 25. Also, beginning on August 21, open market operations of

As the danger of serious bank credit expan-

the System were modified and the yields on

sion became more evident following the

Government securities permitted to rise. The

Korean outbreak, the Board of Governors

average discount rate on Treasury bills rose

joined with other bank and financial super-

from 1.174 percent on August 17 to 1.247

visory agencies on August 4 in requesting that

percent on August 24 and then continued to

banks and all other institutions engaged in

move upward steadily to 1.382 percent at the

extending credit exercise special care in their

end of the year. Other yield increases during

lending and investment activities and decline

the period included an advance from 1.24

to make loans to business and consumers

percent to 1.49 percent on issues of approxi-

which might be used for speculative purposes

mately 12 months' maturity, an increase from

or otherwise interfere with defense require-

2.13 percent to 2.24 percent on the longest.

ments. A second request for voluntary cooper-

term bank·eligible bond, and from 2.42 per-

ation of banks was made in mid-November in

cent to 2.44 percent on the longest.term

a letter from the Chairman of the Board of

restricted bond.

Governors to the executive officer of each of
the Nation's member banks.

During this period, the firmness of the System's policy was limited by considerations of

During July and the first half of August,

debt management, because on August 18 the

however, loans and holdings of corporate and

Treasury announced the offering of a I1,4·per-

municipal securities expanded by about

cent 13-month note in exchange for the bonds

$1,500,000,000 at banks in leading cities in

and certificates called or maturing on Septem-

the Nation. In view of that development, which

ber 15 and October 1. Again, the support

clearly represented an excess credit expansion

problem became a major factor, since the
It! ••

market rate for approximately 12-month

rities from $18,331,000,000 on June 30 to

money was higher than the rate offered by the

$20,724,000,000 on December 31 and an

Treasury. Between August 21 and the end of

increase in member bank reserve balances

September, the System was a very heavy buyer

from $15,934,000,000 to $17,681,000,000.

of the maturing certificates and the called

This very substantial increase in reserve bal-

bonds but a substantial seller of other short-

ances enabled member banks to increase their

term issues, as banks and others undertook

loans by more than $7,250,000,000, resulting

their own refunding in the market. System

in a very substantial increase in demand

holdings of Government securities increased

deposits. The persistent increase in bank loans,

by approximately $1,000,000,000 between

bank deposits, and member bank reserves led

mid-August and the end of September. In

to an announcement by the Board of Governors

other words, at a ti me when -

on December 28 of an increase in reserve

from the

standpoint of credit control- reserves of

requirements effective early in 1951.

banks should have been limited, banks were
able to maintain their reserve positions, even
in the face of a very substantial outward gold
flow, by monetizing government debt through
the Reserve System. The support problem

In addition to these general credit control
actions, the Board of Governors took action of
a restrictive nature with respect to' consumer
instalment credit and mortgage credit on new
residential construction.

again worked to reduce the effectiveness of
The amount of consumer instalment credit

the System's credit policy.

had risen sharply Later in the year, the System again engaged

-

about $1,270,000,000

during the first 6 months of the year;

actively in supporting operations in connec-

moreover, there had been a tendency toward

tion with the Treasury's refunding offer in

lower down payments and longer maturities as

December and, as a result, supplied additional

terms of credit were eased to help maintain

reserves to the banking system. Between

the flow of an increasing output of automo-

November 22 and the end of the year, System

biles and major durable goods into consump-

holdings of Government securities increased

tion channels. During July and August the

by more than $1,000,000,000 and member

consumer instalment credit increase averaged

bank reserves rose by about $300,000,000,

more than $450,000,000 monthly. Conse-

despite further gold losses and such seasonal

quently, on September 18 -

developments as an increase in currency

after the passage of the Defense Production

circulation.

Act of 1950 -

about a month

the Board of Governors re-

The more important results of these and

established Regulation W. Terms permitted

other related developments during the last 6

under the Regulation soon proved to be too

months of the year included an increase in

lenient, and on October 16 more restrictive

the System's holdings of Government secu-

terms became effective. The amended Regu-

.... 17 ••

EL PASO BRANCH TERRITORY

I

MEMBER BANKS
43
NONMEMBER PAR BANKS
15
MEMBER BANK RESOURCES
$ 473.133.348

"

HEAD OFFICE TERRITORY

MEMBER BANKS
389
'NONMEMBER PAR BANKS
I 53
MEMBER BANK RESOURCES
$4,162.381.289

DALLAS

I

clb:::::
ELEVENTH FEDERAL RESERVE
DISTRICT
MEMBER BANKS
630
NONMEMBER PAR BANKS
291
MEMBER BANK RESOURCES

$ 7,656,529,319

"

:':

o

,

I

SAN ANTONIO

S,\N ANTONIO BRANCH TERRITORY

MEMBER BANKS
91
NONMEMBER PAR BANKS
51
MEMBER BANK RESOURCES
$ 978.682,693

HOUSTON BRANCH TERRITORY

MEMBER BANKS
107
NONMEMBER PAR BANKS
72
MEMBER BANK RESOURCES
$ 2.042.331,987

lation seems to have had a salutary effect in

TREASURY FINANCING

reducing credit expansion in this important

Refunding of marketable securities by the

area. Following an increase of about $330,-

Treasury during 1950 -

000,000 in September, reports for October

ficates which matured January 1, 1951-

showed an increase of only about $40,000,-

including the certi-

amounted to $49,330,000,000. Maturing or

000, while in November the amount of instal-

called securities totaling $44,498,000,000

ment credit outstanding decreased $60,000,-

were exchanged for refunding offerings, while

000. Heavy Christmas buying pushed the total

, ,000000
,
of securities were turned in
$4831

up about $180,000,000, as compared with an

for cash. Redemptions in cash were relatively

increase of more than $450,000,000 in De-

small during the first 7 months of the year -

cember 1949.

ranging between 2.6 percent and 7.9 percent

Housing credit also had shown a very sub-

-

stantial increase during the first half of the

but were unusually large in the September-

October and the December refundings. Cash

y"ear, as new residential construction moved

redemptions amounted to 17.5 percent in con-

up to record levels. Therefore, to check the

nection with the September-October refunding

O"rowth of credit in this field and, also, to
b

and to 14.4 percent in the December refund-

reduce the number of new residential starts

ing. Dissatisfaction of the market with the

in the months ahead when defense require-

114-percent 13-month rate offered on the ex-

ments for materials and manpower would be

change notes of September 15 and October 1

increasing, the Board of Governors, on Octo-

and the 5-year maturity of the note offered in

ber 12, instituted Regulation X, applying to

December largely account for the high per-

private mortgage credits on new residential

centage of cash redemptions. With respect to

construction; companion regulations were an-

the December offering, a substantial propor-

nounced simultaneously by the FHA and VA

tion of the maturing securities was owned by

applying to government-guaranteed credits.

nonbanking investors, many of whom prefer-

Because of the large backlog of commit-

red to maintain a more liquid position than

ments that preceded the effective date of these

the 5-year notes offered; consequently, they

regulations, it is not possible to appraise their

undertook their own refunding in the market.

effectiveness as of the end of 1950. Most inAll securities, other than Treasury bills,

formed opinion in the housing finance and

maturing during the year were refunded into

construction industry, however, seems inclined
to the view that the regulations will accom-

Treasury notes, except the issue of certificates

plish their objectives -

i.e., to check the

maturing on January 1, 1950, which was re-

growth in the volume of residential mortgage

funded into a PiR-percent 12-month certifi-

credit outstanding and to reduce the number

cate. Inasmuch as that issue, however, mao

of residential starts from the 1,400,000 total

tured on January 1, 1951, and was refunded

of 1950 to 850,000 in 1951.

into a 1%-percent 5-year note, the end of
»»

20

««

1950 marked the disappearance of the certi-

new money to strengthen its cash position.

ficate of indebtedness as a Treasury debt instrument, at least for the moment.

Sales of savings bonds in the Nation
amounted to $6,074,000,000, while redemp-

By shortening the maturities of the PA-per-

tions were $5,840,000,000, with the result

cent notes issued between February and June

that net sales amounted only to $234,000,000

from 20 months to 13 months, the Treasury

as compared with $732,000,000 in 1949. In-

recognized the gradual firming of short-term

flationary developments during the year and

rates that was taking place in the market. In

the strong desire of the public for goods ap-

connection with the July, September, and Octo-

parently had a restrictive effect upon the sale

ber refundings, however, the Treasury disre-

of savings bonds, despite a substantial in-

garded the trend; strong Federal Reserve sup-

crease in consumer disposable income; more-

port of the short-term rate was necessary to

over, redemptions were larger than in any

assure success of the July operation, while

other year except 1946, but this was due in

the Federal Reserve System's unwillingness to

part to the larger number of savings bonds

create an artificial l1i4-percent rate for 13-

reaching maturity dates during 1950. Sales of

month money in the market at the time of the

Series E bonds amounted to $3,668,000,000

September-October refundings contributed to

as compared with redemptions of $3,912,-

the large volume of cash redemptions that

000,000.

occurred. The Treasury offered a Ph-percent

The total interest.bearing debt of the Gov-

5-year note in exchange for the March 15 and

ernment declined from $255,019,000,000 on

April 1 securities and a 1%-percent 5-year

December 31, 1949, to $254,282,000,000 on

note for the bonds and certificates which mao

December 31, 1950. This decline of $737,-

tured on December 15, 1950, and January 1,

000,000 in the interest-bearing debt during

1951, respectively.

the year was the result of a net decline of

During the year the amount of Treasury

$548,000,000 in public issues and $189,000,-

bills outstanding increased by approximately

000 in special issues. The average interest

$1,300,000,000. Between April 13 and July

rate on the total interest-bearing debt re-

6, inclusive, weekly offerings of bills ex-

mained virtually constant -

ceeded maturities by about $100,000,000, as

1950 as compared with 2.208 percent in

the Treasury used this means of obtaining

1949.

2.209 percent in

SUMMARY OF CHANGES IN OUTSTANDING
INTEREST·BEARING PUBLIC DEBT
(In millions of dollars)

Total marketable obligations
Total nonmarketable obligations
Total public issues .
Total special issues.

.
.

.
.

Total interest·bearing debt

" " 21

12-31-50

12-3149

+

$152,450
68.125
220,575
33,707
$2:14.282

$155,123
66,000
221,123
33.896
$255,019

-$2,673
+2,125
-548
-189
-$737

««

or -

FEDERAL

RESERVE

o

BANK

F

DALLAS

Stalentenl (~f' (;O/lditioll
ASSETS
December 31

1949

1950
.

$ 622,614,603.47

$ 685,083,031.05

Redemption fund for Federal Reserve notes

25,463,505.11

27,141,914.03

Total gold certificate reserves

648,078,108.58

712,224,945.08

1l,513,022.86

13,848,783.99

Gold certificates .

Other cash.

.

.

.

.

.

.

.

.

Discounts and advances

.

.

.

.

.

.

o

U. S. Government securitie5
Bills
Certificates . . . . .
Notes . . . . . . .
Bonds . . . . . . .

2,432,500.00
208,889,000.00
271,444,000.00
24,318,000.00
312,202,000.00

56,470,000.00
105,961,000.00
568,628,000.00
209,728,000.00

Total U. S. Government securities

940,787,000.00

816,853,000.00

Total loans and securities

.

940,787,000.00

819,285,500.00

. .

825.33

1,317.63

Due from foreign banks

.

.

.

.

Federal Reserve notes of other banks
Uncollected items
Bank premises.

8,362,750.00

1l,714,608.00

192,457,628.86

134,637,040.35

.

677,208.03

716,525.68

5.375.736.47

4,207,889.87

$1.807,252.280.13

$1,696,636,610.60

$ 639,322,205.00

$ 640,273,975.00

891,214,754.83
24,310,579.41
31,069,500.00
43,542.904.16

814,891,411.52
40,242,431.98
26,621,000.00
31.699,868.26

Total deposit5

990,137,738.40

913,454,711.76

Deferred availability items

144,545,627.42

111,612,973.10

Other assets
Total assets

LIABILITIES
Federal Reserve notes in actual circulation
Deposits
Member bank - reserve account .
U. S. Treasurer - general account
Foreign . . . .
Other deposits. . . .

Other liabilities .

125,835.40

324,722.73

$1,774,131,406.22

$1,665,666,382.59

.

Total liabilities.

.

CAPITAL ACCOUNTS
$

9,610,450.00
16,852,179.58
1,307,124.72
5,351,1l9.61

$

8,455,300.00
15,873,439.13
1,307,124.72
5,334,364.16

Total capital accounts.

$

33,120,873.91

$

30,970,228.01

Total liabilities and capital accounts

$1.807.252,280.13

Capital paid in . .
Surplus (Section 7)
Surplus (Section 13b)
Other capital accounts .

» »

22 ....

$1,696,636,610.60

FEDERAL

RESERVE

o

BANK

F

DALLAS

Earnings and Expenses
1950

1949

EARNINGS

.

$
33,489.03
12,381,678.35
10,943.34

$
86,359.89
13,506,250.90
12,651.45

Total current earnings

$12,426,110.72

$13,605,262.24

4,344,770.26

4,015,528.48

976,120.18

913,088.17

$ 3,368,650.08

S 3,102,440.31

122,300.00

113,000.00

194,707.94

213,288.97

38,563.80

34,145.52

$ 3,724,221.82

$ 3,462,874.80

$ 8,701,888.90

810,142,387.44

1,654,006.82

1,395,483.37

386.18

72.20

S 1,654,393.00

$ 1,395,555.57

522.63

115,219.80

522.63

115,219.80

$ 1,653.870.37

$ 1,280,335.77

$

8.808.321.14

$ 1,738,520.53
8,272,075.61

1,527,533.76

1,412,127.07

548,793.31

492,888.15

Discounts and advances

u.

.

.

S. Government securities

All other.

.

.

.

.

.

.

EXPENSES
Current operating expenses.

.

.

.

.

.

Less reimbursement received for certain
Fiscal Agency and other expenses
Net operating expenses

.

.

.

.

.

Assessment for expenses of Board of Governors
Federal Reserve currency
Original cost, including shipping charges
Cost of redemption, including shipping charges
Total net expenses.

.

.

.

.

.

.

.

.

CURRENT NET EARNINGS.
ADDITIONS TO CURRENT NET EARNINGS
Profit on U. S. Government securities
All other

.

.

.

.

Total additions

.

.

.

.

.

.

DEDUCTIONS FROM CURRENT NET EARNINGS
Total deductions

NET ADDITIONS
DISTRIBUTION OF NET EARNINGS
Transferred to reserve for contingencies

.

.

.

.

.

.

Paid U. S. Treasury (Interest on outstanding F. R. notes)
Net earnings after reserves and
payments to U. S. Treasury
Dividends paid to member banks

.

$

Transferred to Surplus (Section 7)

)) n

23

C{

«

19,904.37

978,740.45

$

919,238.92

FEDERAL

RESERVE

BANK

OF

DALLAS

Volume of Principal Transactions
1949

1950
Number
of pieces

Discounts for member banks
Secured by U. S. Government
obligations .

Dollar
amount

Dollar
amount

Number
of pieces

153,568,000

158,830,000

1,000

1,000

20,000

1,000

Currency received .

133,317,000

733,473,000

128,880,000r

691,173,000

Coin received

219,967,000

17,322,000

214,292,000r

16,652,000

Other

1,000

$

Currency paid out .
Coin paid out .

$

194,000

684,771,000

665,916,000

20,854,000

19,102,000

101,355,000

36,417,648,000

94,386,000

32,464,964,000

1,536,000

136,173,000

1,428,000

121,403,000

Collections handled

653,D00

626,062,000

591,000

447,367,000

U. S. Government interest
coupons paid.

335,000

29,826.000

373,000

29,490,000

Coupons of governmental
agencies paid

7,000

211,000

9,000

240,000

U. S. Government checks
and warrants paid .

20,446,000

3,764,814,000

19,394,000

3,490,655,000

90,000

24,921,935,000

80,000

20,167,461,000

5,185,000

6,057,839,000

5,232,000

4,560,489,000

Securities of governmental agencies
issuej, exchanged, and redeemed

1,000

1,382,000

1,000

4,398,000

Purchases and sales of securities
and acceptances for investors .

4,000

1,657,899,000

Checks handled
Checks returned unpaid.

Transfers of funds for
member banks
U. S. Government securities issued,
exchanged, and redeemed .

r

,

Revj~ed.
»»

24 ..

tt

4,Ooor

1,058,822,000r

Review of Internal Operations
INCOME AND EXPENSES

STATEMENT OF CONDITION
The assets of the bank on December 31,

The bank's earnings from current opera·

1950, amounted to approximately $1,807,-

tions during 1950 aggregated $12,426,000

000,000, representing an increase of about

and current net earnings amounted to $8,-

$111,000,000 during the year. The gain is

702,000, representing decreases of $1,179,000

attributable chiefly to increases of $124,000,-

and $1,440,000, respectively, from 1949. Ad-

000 in holdings of Government securities and

ditions to current net earnings during 1950,

$57,000,000 in the volume of uncollected

c.onsisting chiefly of net profits realized from

items, which more than offset the substantial

the sale of United States Government securi-

decline of $64,000,000 in gold certificate

ties, amounted to $1,654,000, or $259,000

reserves. Corresponding increases in liabili-

more than in 1949. After eliminating $976,-

ties occurred chiefly in member bank reserve

000 recovered from government agencies,

accounts, which rose by $76,000,000, and in

total net expenses during 1950 were $3,724,-

the volume of deferred availability items,

000, reflecting an increase of $261,000 over

which showed a gain of $33,000,000.

the preceding year. Total net earnings of
$10,356,000 were $1,067,000 smaller than

The paid-in capital stock of the bank m-

the record volume in 1949.

creased sharply during 1950, the total of

With the approval of the Board of Gov-

$9,610,000 at the year-end being $1,155,000

ernors, the bank distributed its net earnings

larger than a year earlier. This increase,

by paying $8,808,000 to the United States

which was nearly double that which occurred

Treasury as a tax on Federal Reserve notes

during 1949, resulted chiefly from the fact

not collateraled by gold certificates, by trans-

that 270 member banks raised their capital

ferring approximately $20,000 to reserves for

and surplus by about $35,000,000 and were

contingencies, by paying the statutory divi-

required to purchase approximately $1,051,-

dend -

totaling $549,000 -

on its stock held

by member banks, and by transferring $979,-

000 of additional Federal Reserve bank stock.

000 to Surplus (Section 7).

Seven member banks admitted to membership

CHECK COLLECTION S

during 1950 also purchased capi tal stock, in
the amount of $112,000. The stock of two for·

In 1950 the bank received 124,000,000

mer member banks which entered voluntary

checks and drafts for collection, having a value

liquidation was canceled in the amount of

of $40,945,000,000. These figures represent

$7,500.

increases over 1949 of 7 percent in the num•

to

2f) ••

ber of items handled and 12 percent in the

cooperation of this bank with the Post Office

dollar value of the items. Included in the

Department was helpful in improving mail

total number of items handled were 20,446,-

service to various points in the District and

000 checks drawn on the Treasury of the

assuring prompt handling of mail in connec-

United States, an increase of 5 percent over

tion with check collections.

the number handled in 1949. The larger num-

CASH DEPARTMENT OPERATIONS

ber of Treasury items handled reflects, in ma-

The volume of operations in each of the

jor part, the increase in personnel at military

principal functions performed in the Cash

establishments throughout the District and the
payment by this bank and its branches fiscal agents of the Treasury -

Department increased further during 1950.

as

Currency and coin forwarded to and received

of veterans'

from member and nonmember banks involved

national service life insurance dividend checks

a total of 106,701 shipments valued at ap-

during the first half of 1950.

proximately $1,428,000,000. In addition, ap-

The number of dishonored checks returned

proximately $28,000,000 in currency was

by drawee banks to this bank during 1950

received from other sources. The total value

showed an increase of 8 percent over the total

received and shipped was up about $64,000,-

in 1949, and the amount involved increased

000 over that in the previous year. As com-

by 12 percent. The increase in the number of

pared with 1949, increases occurred in the

unpaid items has been common to all sections

value of both incoming and outgoing ship-

of the country and is a continuation of a trend

ments, but about two-thirds of the total in-

which was apparent in 1949.

crease represents the return of money from

The bank continued to make frequent

circulation. Total receipts of currency and

studies of air and rail mail schedules, with a

coin exceeded shipments by about $45,000,-

view toward shortening the collection time for

000; in 1949 the excess of receipts amounted

cash items as much as possible. Moreover, the

to about $23,000,000.

CHECKS AND COLLECTION DRAFTS HANDLED, 1930-1950
Federal Reserve Bonk of Dallas

Billions of Dollors

Millions of Items

140

140

~_L-/

100 f----l----4----+---+------I!----+---+----:,.,-.JT ---+-----11 00

NUMBER~V""

60

I~

60
AMOUNT-....... I
I_ •. _~._.--•--·--· .....·1
- = = - r - - - - + - - - t - - - ; 20
0

1-----1---+----l----l-----=~--=---_t__--_t__---'---_+--...,

~_-~---~

I
------

J.---""

..-.-:-

-'1-'

20

o ~· ... ·---.-·_·-·-·~·_·I·-·I·
....·
1930

1932

1934

19"36

1938

1940

• • '26 ••

1942

1944

1946

1948

1950

Federal Reserve notes of this bank, which

In

1949. Coupons of the United States Gov·

constitute the bulk of currency circulation in

ernment and of government agencies paid dur-

the District, fluctuated within narrower limits

ing 1950 totaled 342,000, a decrease of

during 1950 than in 1949. While the average

40,000 as compared with the previous year.

circulation of $619,000,000 was about $9,-

The bank performs the service of purchas·

000,000 higher than a year earlier, the dif-

ing and selling United States Government

ference between the maximum and minimum

securities for member and nonmember banks

circulation on specific days was only $45,-

in accordance with their instructions. During

000,000 in 1950 as compared with $62,000,·

1950, about 4,000 transactions aggregating

000 in 1949.

$1,658,000,000 were handled for the account

Telegraphic transfers of funds during 1950,

of 328 member and nonmember banks in the

which were made at the request or received

District. This represents an increase of $599,-

for the account of member banks, numbered

000,000, or 57 percent, over the amount han·

about 90,000 and had a value of $24,922,-

dIed in 1949.

FISCAL AGENCY

000,000. These figures represent increases
over 1949 of 13 percent in the number of

United States Government securities issued,

transfers and 24 percent in their value.

exchanged, and redeemed during 1950 in-

On December 31, 1950, the bank was hold-

volved approximately the same number of

ing for member banks and others securities

pieces as in 1949, but the dollar value of such

valued at $1,005,000,000, an increase of ap-

securities handled by the bank amounted to

proximately $60,000,000 over the amount

$6,058,000,000, or 33 percent larger. The al-

held a year earlier. Reflecting the substantial

lotment of Treasury bills, which aggregated

decline in the volume of coupon securities

$1,271,000,000, comprised more than one-

held in custody, the bank clipped 111,100

fifth of the total volume of activity in Govern·

coupons in 1950, or about 19,800 fewer than

ment securities and was sharply higher than

SHIPMENT OF MONEY TO AND FROM COMMERCIAL BANKS
Federal Reserve Bank of Dallas

Thousands

Thousands

12

12

Total

e t---+----'/.\

.

4 ,.., ··,·....·..

. I

-1- -:/ :)~ - /

.../ \. . .

!·JNumber of 'i~

·············1·~.~·····~·..,,·· r\::L S~~;~o~~~.

. . ------r

"-._._.,,,,·,-._.y:\.,_,_,_,~-·-,-·-·-..II

,!..../

t\/
~

~

-~

~

f: .r··....
~·.;l_:-------l4

....,._.-.-._. 'v"--·v·-·,J

Number of Incoming Shipments
O"--_~~_-L.._--:-:~_---JL...-_~:-=-_...L-_"""":":::",,:,,,::,,,_......L_--:=:------JO
1946
1947
1948
1949
1950

»JJ

27

« ..

e

the $690,000,000 allotted in 1949. Moreover,

The bank performs for banking institutions

the bank received an average of 128 tenders

the service of transferring by wire marketable

weekly during 1950 for Treasury bills, as

issues of United States Government securities

compared with only 74 weekly in the preced-

when the transfer of such securities is re-

ing year. Allotments of certificates of in-

quired

debtedness and Treasury notes on exchange

promptly. During 1950 transfers involving

subscri ptions totaled $803,000,000, an in-

:37,400 pieces valued at $1,::34::3,000,000 were

crease of $50,000,000 over 1949. Redemp-

handled.

tions of marketable securities during the year
totaled

$1,817,000,000,

or

$467,000,000

more than in 1949.

to

complete

a

sales

The principal custodian

transaction

activities per-

formed during 1950 for the Commodity
Credit Corporation included the processing of

Sales of Treasury tax amI savmgs note;;,
which amounted to $47,680,000, were up
about $10,500,000 from the previous year,
while redemptions of $26,600,000 were only
ahout one-half those in 1949.

.~24,000

producers' notes in the amount of

$93,858,000, secured by 640,000 bales of
cotton placed in the government loan programs, and the release to producers or equity
purchasers of 684,000 cotton notes aggregat-

Sales of savings bonds in the District during the year amounted to $201,200,000, a decrease of $5,400,000 from 1949. Redemptions of $252,400,000 were up $37,300,000.

ing $184,354,000, secured by

1,364,000

bales of cotton. In connection with the cotton
placed in the government loan programs, the

At the end of 1950 there were 1,222 agents

bank disbursed for the Commodity Credit

qualified to issue Series E savings bonds and

Corporation $3,708,000 in cash and $90,-

1,025 agents qualified to redeem Series A to

150,000 in certificates of interest. During the

E savings bonds in the District. On December

year it was necessary to reconcentrate 547,000

.31, 1950, the bank held for individuals 109,-

bales of cotton to carry out the loan programs.

840 savings bonds with a maturity value of

At the end of the year the bank held only 688

$12,650,000, representing decreases from a

cotton producers' notes in the amount of

year earlier of 11,231 in the number of
bonds and $634,000 in maturity value.
At the end of 1950, 744 banks in the District were qualified as Treasury loan and tax
depositaries and 599 banks were qualified as

$624,000, secured by 3,100 bales of cotton.
The bank also disbursed $350,000,000 to
lending agents in connection with the government loan programs involving other agricul-

withheld tax depositaries. During 1950 the

tural commodities -

bank received and handled for the United

and grains. During the year the fiscal agency

States Treasury a total of $257,316,000 in

and custodial functions formerly performed

withheld taxes, as compared with $179,817,-

for the Reconstruction Finance Corporation

000 in 1949.

were discontinued.
., 2M • "

chiefly wool, peanuts,

LOANS AND SECURITIES

substantial shift from long-term to short-term
securities.

During most of 1950 the reserve positions
of member banks in the District were gener-

HOLDINGS OF GOVERNMENT SECURITIES

ally easy, and readjustments were made

Federal Reserve Bank af Dallas
Millo ns

1,000

chiefly by selling Government securities. Nev-

0I

00110(5

I ,000

.J.

ertheless, during the year 17 member banb

•••••.1

950 f---

horrowed a total of $158,850,000 to meet

MillIOn" of 00110 ..

950

'.

temporary reserve deficiencies, as compared

"\'1"1949

.......

850

earnings from discounts were only about one800

third those during 1949, despite the slightly

V
1950~_

..

her banks in 1949. The average borrowing
period decreased further during 1950, and

I 900

~""

900

with borrowings of $153,762,000 by 16 memo

.......

larger volume of loans and the higher discount

-\V

V

850

I>Y....

./

..
.
.
.......'......

750

800

750

rates which became effective on August 25.
The major portion of borrowings in 1950

700

again represented advances to member banb

700

°

J

on their own notes secured by United States
Government obligations.

F

M A

M

J

J

A

SON

°

D

The daily average "float" of the bank duro

The bank's participation in holding of Gov-

ing 1950 amounted to $9,862,000, or only

ernment securities in the System Open Market

about $108,000 more than in the preceding

Account, which had declined steadily during

year. This small increase in average "float,"

1949, fluctuated around $800,000,000 during
the first half of 1950. In the last half of the
year there was a substantial increase in holdings as the System made large net purchases,
especially during September and December,
in supporting Treasury refunding operations.
For the year as a whole, however, average
holdings totaled $832,000,000, or about
$]4,000,000 lower than during 1949. Despite
an increase in short-term rates during the last

coincident with the substantial increase in the
dollar value of cash and collection items
handled, reflects the improvement in the aver·
age collection time during the year. The peak
"float" for a particular day amounted to $59,462,000 on December 20, an amount which
was about $10,000,000 larger than the peak
in 1949, and was largely due to a strike of
rail transportation workers.

half of the year, the average yield on Govern·

Under the provisions of the Defense Pro-

ment securities in the Account was slightly

duction Act of 1950 and the Executive Order

lower in 1950 than in 1949, reflecting the

of the President, the Department of the Army,

•• 29

«(

4(

the Department of the Navy, the Department

dential construction as defined in the Regula.

of the Air Force, the Department of Com-

tion. The Federal Reserve banks were desig-

merce, the Department of the Interior, the

nated to administer the Regulations.

Department of Agriculture, and the General

While the provisions of Regulation X cover

Services Administration were authorized to

only new residential mortgage credit of the

guarantee loans for the purpose of expediting

conventional type, the Federal Housing and

production and deliveries or services under

Home Finance Administration and the Vet·

government contracts for the procurement of

erans Bureau issued companion regulations

materials or the performance of services for

covering new real estate mortgage credit

the national defense. The Federal Reserve

guaranteed ,by the governmental agencies.

banks, subject to the supervision of the Board

Regulation W is applicable to the extension

of Governors, were designated and authorized

of instalment credit for the purchase of such

to act on behalf of any guaranteeing agency

durable goods as automobiles, major house-

as fiscal agents of the United States in the

hold appliances, and furniture; residential

making of such contracts of guarantee and in

repairs, alterations, and improvements; and

otherwise carrying out the purpose of the Act

instalment loans for the purchase of listed

in respect to private financing institutions. Ac·

articles and unclassified instalment loans. Ef·

cordingly, the Board of Governors reissued

fective October 16, the Board of Governors

Regulation V in revised form on September

tightened the terms of Regulation W by in-

27, 1950. During the fourth quarter of 1950

creasing the minimum down payment on most

this bank received six applications for guaran-

articles and reducing the maximum maturity

tees of defense production loans in the aggre·

of such credits to 15 months. Individuals and

gate amount of $6,000,000. As the defense

businesses subject to the provisions of the

program gains momentum, it is probable that

Regulation are required to file a registration

the volume of activity under this authority

statement with their Federal Reserve bank.

will increase substantially.

The bank's staff has kept in close touch with

SELECTIVE CREDIT CONTROLS

developments in those lines of trade and fie

Acting under the authority granted by the

nance subject to Regulation Wand with devel·

Defense Production Act of 1950, the Board of

opments in the real estate residential field.

Governors on September 18 reissued Regula.

Frequent consultations have been held with

tion W, establishing minimum down payments
and maximum maturities on most consumer
instalment credit transactions, and on October

representatives of the covered fields regarding
the effects of the Regulations. An Advisory
Committee, appointed to confer with the staff
with respect to the administration of Regula-

12 issued Regulation X, establishing maxi-

tion X, has been very constructive and helpful

mum loan values and maturities with respect

in initiating this new form of credit regulation

to mortgage credit extended on new reSl-

on a sound, practical basis.

•• 30 ••

Total deposits
December 31,
1950

,BANK EXAMINATION
Location

Name of bank

The examining staff of the bank partici-

West Texas State Bank Snyder, Texas

pated in 176 examinations and investigations,
or 10 more than in 1949; most of these exam·
inations and investigations were made with
state and federal agencies.
Joint
examinations
with state
Independent or federal
examinations agencies
1950 1949 1950

$5,683,000

First State Bank

Pittsburg, Texas

1,290,000

First National Bank
in Wheeler

Wheeler, Texas

1,306,000

First National Bank
in Seagraves

Seagraves, Texas

1,590,000

First State Bank

Bellaire, Texas

1,879,000

Victoria Bank &
Trust Company

Victoria, Texas

30,488,000

Texas State Bank

Austin, Texas

1949

3,024,000

As a consequence of the above changes, the

State member banks..

4

5

149

140

State bank applications
for membership. . .

2

I

2

2

year totaled 630 banks, consisting of 480 na-

Separate trust departments

0

o

12

12

tional banks and 150 state member banks. The

Applications to organize
national banks. . .

o

o

Applications of national
banks for trust powers

4

2

o

o

Examinations of holding
company affiliates. .

. 0

o

2

o

10

8

166

158

membership in the District at the end of the

accompanying table shows the distribution of
4

member banks in the District by states and
classes of banks:
State

December 31,1950 December 31,1949
National State Total National State Total

o

I

I

o

I

I

Louisiana

II

3

14

10

4

14

New Mexico

18

6

24

18

6

24

9

4

13

9

4

13

442

136

578

440

131

571

480

150

630

477

146

623

Arizona

In line with the analysis and reVIew program of the Examination Department, the officers and staff made factual analyses of the

Oklahoma
Texas

reports of examination of both national and

Total

state member banks and followed closely imAUDITING

portant developments with respect to each

During 1950 the Auditing Department

institution.

maintained the audit frequency schedule recMEMBERSHIP

ommended by the Conference of Auditors of

During the year five state banks, two of

the Federal Reserve banks and approved by

which were primary organizations, were ad-

the Audit Review Committee of the Board of

mitted to membership in the Federal Reserve

Directors of this bank. That Committee held

System, and one state member bank was con-

four meetings Juring the year to review audit

verted into a national bank. Two nonmember

reports and to discuss procedures and other

state banks were converted into national

pertinent matters with the General Auditor.

banks. Additions to membership during 1950

The General Auditor consulted freely with

included the following:

the officers of the bank regarding changes in
». 31 .«

accounting procedures and methods, in line

and opinions regarding the provisions and ap·

with the policy of continuously improving in·

plicability of these Regulations, especially

ternal controls and operating efficiency. The

Wand X. In addition, the Counsel has been

examining staff of the Board of Governors

called upon to participate with other members

made a regular examination of this bank and

of the System's legal staff in such matters as

its branches in May 1950.

the need for amendments, the character of
such amendments, and interpretations of new

LEGAL AFFAIRS
The bank's Counsel rendered numerous oral

questions and issues raised by affected parties.

and written opinions on such operating and

PERSONNEL

administrative problems as the admission of

Total employment of the bank averaged

new banks to membership m the System,

slightly higher during 1950. The working

amendments to charters of member banks, the

force averaged 949 employees as compared

granting of trust powers to national banks,
the issuance of voting permits to bank affili·
ates, and other banking questions. The Coun·
sel's office also prepared analyses and sum·
maries of new and proposed legislation and
analyzed, prepared, and approved contracts,

with 922 employees in 1949. The number of
employees whose salaries were recoverable
from the United States Treasury Department
and other governmental agencies because of
work performed for the Government rose to
an average of 240 persons from 229 in the

leases, and insurance policies.
The re-establishment of Regulations V and

preceding year, while the number of em·

W in September and the issuance of Regula·

ployees whose work was performed directly

tion X in October greatly increased the de·

for the bank rose to an average of 709 per·

mands upon the Counsel's office. Many m·

sons from 693. On December 31, 1950, how·

quiries have been received at the Head Office

ever, the personnel of the bank and its

and branches requiring legal interpretations

branches, including officers and temporary

NUMBER OF EMPLOYEES. BY MONTH. 1946-1950
Number,.---

-.-

Federal Reserve Bank of Dallas
--.-

I"'-... -

"""'--~ Tota:

1,000
600

200

.-

I

1,400

-.-

1,400
Employees
~

---.........
1-,

....

·,/·_·_·1-·-·_·-·.....
I '"
.
'-'-'-'

.............................
I
.-.

...;Numbe'

EmPIOYees-saiari;~. . ····~············ ~

'"'\...::: 1,000

~. -.J,-.-.-.-.-.~._._.-.-.~Employees-Salaries
I Not Recoverable

Recoverable

•••

:

I

-

.••••

600

200

a 1----:-19~4'::""6~-....L..--19-4--7--...L...--1-9-4-8--.L...---19-4-9--...L...--1-9-5-o-----J 0

•• ;tl ••

employees, totaled 9:-35 as compared with 951

[he Graduate School of Banking at Rutgers

on the same date in 1949.

University, three officers and one senior staff

Throughout the year a gradual, growing

member attended the Central States School of

tightness in the labor market was noticeable,

Banking at the University of Wisconsin, and

becoming much more marked during the

eight officers and staff members attended the

fourth quarter. Consequently, it became in-

9th Annual Bankers Educational Conference

creasingly difficult to obtain efficient em-

sponsored jointly by the Texas Bankers Asso-

ployees, especially for more responsible and

ciation and the University of Texas. During

technical positions. Due to the wide fluctua-

the summer months a number of promising

tion in the volume of certain work performed

college students who expect to enter the

by the bank for governmental aO"encies
b
, it

banking field after graduation were employed

was necessary at times to recruit a larger than

as trainees; the bank's long-range training

usual number of temporary employees for

program for college graduates also was con-

relatively short periods. During the year 18

tinued.
In accordance with its established policy,

employees resigned to enter military service.
Reflecting these factors, the annual rate of
turnover at the bank rose during 1950, with
the most pronounced increases occurring at
Dallas and EI Paso -

cities in which the

labor supply was very tight most of the year.
A slight increase also occurred at San An-

the bank shared in the financial support of
the local chapters of the American Institute
of Banking in the cities in which the bank's
offices are located and encouraged its employees to participate in the chapters' educational programs and other activities.
Other established features of the bank's

tonio, but a decline occurred at the Houston

personnel program such as the retirement

Branch.
The management of the bank kept in close
touch with salary developments in the labor
market through surveys in the four cities
in which the bank's offices are located. In confonuity with market changes in salaries, ap-

plan; low-cost hospitalization, medical, and
surgical services; periodic medical examination of officers and employees; low-cost meal
service in the bank's dining rooms; and employee counseling services were continued.

propriate adjustments were made in the salary

OFFICIAL STAFF CHANGES

structure of the bank. Salaries of individual

The Board of Governors of the Federal Re-

J. R. Parten of

employees were reviewed periodically and ap-

serve System redesignated

propriate adjustments made on the basis of

Houston, Texas, Chairman of the Board of

merit shown in work performed and promo-

Directors and Federal Reserve Agent for the

tions to more responsible duties.

year 1951 and R. B. Anderson of Vernon,

During 1950 the bank continued its execu-

Texas, Deputy Chairman. G. A. Frierson of

tive training program. Two officers attended

Shreveport, Louisiana, was reappointed a

n"

3.3 (( ((

Class C Director for a 3-year term beginning

and J. Ralph Wood, all of Dallas, as an Ad-

January 1, 1951. The Board also reappointed

visory Committee to consult with the officers

Hal Bogle of Dexter, New Mexico, a director

of the bank on the administration of Regula-

of the EI Paso Branch; Herbert G. Sutton of

tion X.

Colmesneil, Texas, a director of the Houton

During 1950 Herman W. Kilman was

Branch; and Edward E. Hale of Austin,

elected an Assistant Cashier of the bank, and

Texas, a director of the San Antonio Branch;

E. H. Berg was elected Assistant General Au-

each for a term of 3 years beginning January

ditor. On May 9, F. T. Novey, former General

1, 1951.

Auditor, passed away, and Leon Daniels was
elected General Auditor to succeed him.

At an election held in November 1950 the
member banks in the District re-elected W. L.
Peterson of Denison, Texas, a Class A Direc-

BANK AND PUBLIC RELATIONS
A full program of bank and public rela-

tor of the bank and W. F. Beall of Jackson-

tions activities was carried on during 1950,

ville, Texas, a Class B Director, each for a

in accordance with the bank's policy of estab-

term of 3 years beginning January 1, 1951.

lishing close relationships with other banking

The Board of Directors of this bank reap-

and business concerns and the general public.

pointed W. H. Holcombe of Pecos, Texas, a

Officers and senior staff members visited

director of the EI Paso Branch; R. Lee Kemp-

almost 90 percent of the member banks in the

ner of Galveston, Texas, a director of the

District during the year and made a substan-

Houston Branch; and E. R. L. Wroe of Aus-

tial number of visits to nonmember banks. In

tin, Texas, a director of the San Antonio

the course of these contacts, the officers were

Branch; each for a 3-year term beginning

able to obtain much valuable information re-

January 1, 1951.

lating to local business and financial condi-

The Board of Directors appointed DeWitt

tions and to discuss with member bankers mat-

T. Ray of Dallas, Texas, to serve as a member

ters pertaining to their relations with this

of the Federal Advisory Council for the year

bank.

1951 to represent the Eleventh Federal Re-

The bank was privileged to conduct almost

serve District and re-elected Charles R. Moore,

1,800 visitors through the Head Office and

E. P. Simmons (deceased February 18, 1951),

branches and to show these students, bankers,
and businessmen some of the features of the

Lawrence S. Pollock, Ira T. Moore, and Jake

bank's operations.

L. Hamon, all of Dallas, members of the In-

The demand for the bank's exhibit of paper

dustrial Advisory Committee for the Eleventh

currency was very strong throughout the

District for a I-year term beginning March 1,

year. The exhibit was displayed by 45 mem-

1951. Following the institution of Regulation

ber banks in connection with such occasions

X, the Board of Directors appointed E. E.

as opening of new banking quarters and com-

Shelton, Henry S. Miller, Owen M. Murray,

memorating anniversary dates. It was dis-

" »

34

K

«

played, also, in the Hall of State in Dallas

data relating to banking, credit, agriculture,

durin~

industry, and trade; the completion of numer-

the State Fair of Texas, where it was

viewed by an estimated 300,000 persons.

ous economic studies and technical memo-

Among the meetings sponsored by this

randa; and frequent consultations with officers

bank during 1950 were the 5th Annual Forum

and directors of the bank, as well as others

for Bank Supervisory Authorities in the Dis-

engaged in banking, business, and agriculture

trict; bankers' forums, attended by the prin.

in the District. Several special surveys were

cipal executive officers of the banks in the

conducted to obtain information needed in the

Lubbock and Midland, Texas, areas; and two

administration of credit policies, especially

farm clinics in northern Louisiana, attended

in connection with Regulations Wand X.

by bankers, farmers, and 4H and FFA boys.
Throughout the year the bank supplied

The demand for the regular publications of
the Research Department -

the Monthly Bus-

speakers from its official staff for many meet·

iness Review, the Agricultural News Letter,

ings, conferences, and conventions of banking,

and the Agricultural News of the Week -

business, and agricultural groups. Probably

creased substantially during the year. Large

as a result of the increased economic activity,

numbers of reprints of special articles ap-

the resurgence of inflationary developments,

pearing in the Monthly Business Review were

and the possible effect of the defense program
upon business, the demand for information

in-

distributed to bankers, businessmen, and agriculturalists throughout the country. Special
reports and statistical summaries were fur-

relating to banking, business, and industrial
conditions increased greatly. The bank at-

nished to cooperating financial and business
organizations.

tempted to meet this growing quest for information by extending the circulation of its various publications and releases and by more
frequent, direct contact with interested groups
and individuals.
HESEARCH

The use of the research library by the officers and employees of the bank and by the
general public increased substantially, and a
heavy

volume

of

special

inquiries

was

handled.
Senior members of the staff participated in

During the year the Research Department

such bank and public relations activities as

continued to provide economic data and analy-

conferences and meetings, speaking engage·

ses to the officers and directors of the bank,

ments before various tvpes of organizations

the Board of Governors, member banks, busi-

throu~hout the

nesses, and other groups. Activities included

cultural group meetings, and the bank's weekly

the collection and processing of statistical

radio program over Station WFAA-570.

District, bankers' forums, agri-