Full text of Review (Federal Reserve Bank of Dallas) : April 1971

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Business Review
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Bank StructureMarket for Bank Services
Changes in Texas
Population in TexasWage Differentials Spur
Rural-to-Urban Movement

'.

April 1971
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This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org)

Bank Structure-

Market for Bank Services
Changes in Texas

Healthy growth of commercial
banks is critical to the nation's general economic wellbeing. Demand
deposits of banks serve as the
primary component of the money
suPp.ly. Bank credit supports econouuc expansion, while bank
~eserves are the principal vehicle
or the implementation of monetary policy. For these reasons, the
structure of the nation's banking
~ystem is a matter of vital public
Interest and therefore sub]' ect to
cl
'
,
ose scrutiny by state and federal
authorities.
t" A large body of rules and regulat IOns has developed over the years
o deal with such matters as the
establishment of new banks, the
thO graphic expansion of banks
ro,;!gh branching, the periodic
Publication of bank statements of
bondition, the examination of
s ~~s by public agencies, and the
e tlUg of maximum rates banks
can charge on certain types of loans
and pay on time and savings
deposits.
th Although some regulations limit
b e scope of banking activities,
anks still have a broad range of

-

discretion in the management of
their affairs. They are free, for example, to determine the types of
loans they will make. In making
loans, they can assign priorities to
various groups of potential borrowers. And within the limits of
state usury laws, they can set the
rates charged for loans.
Even in exercising discretionary
authority, however, banks still face
the restraints of competition. A
high degree of competition generally forces banks to expand their
services and offer services at prices
close to costs. Without significant
competition, banks could restrict
the services they offer or raise their
prices.
While competition is a vital
influence on the performance of
banks in meeting the needs of the
public, not all banks are subje.c~
to the same degree of competItIOn.
There are almost 14,000 banks in
the United States, but they obviously do not all compete with one
another. Most banks normally
confine their operations to a limited
geographic area and compete .
only with other banks and financIal

SMSA's

nUs'

A standard metropolitan statistical area consists of a county with at least one city of at
least 50,000 population, plus any adjacent
counties that appear metropolitan in character and economically and socially integrated with the county of the central city.
The area can cross state lines. If the area
includes more than one city of 50,000 population, the largest city is considered the nucleus and its name is usually used to identify
the SMSA. The name can include more than
one city, however.

lUess Review

I April 1971

institutions in the same geographic
market. In this market setting,
the level of competition a bank
faces is determined largely by the
structure of the particular geographic market as reflected in the
number and relative size of competing financial institutions in the
area.
This article examines recent
developments in the structure of
banking markets in the 23 standard
metropolitan statistical areas of
Texas. These areas are among the
state's most important banking
markets, accounting for almost half
its insured commercial banks and
about 80 percent of its total bank
deposits. They are also among
the fastest growing communities in
the state and since 1950 have attracted eight out of every ten new
entrants into the state's banking
industry.
The number of banks in these
areas has actually increased proportionately faster than population.
As a result, the availability of
banking services seems to have
improved. At the same time, the
concentration of deposits in the
largest banks has generally declined.
Banking markets

To describe the structure of banking markets in Texas, the boundaries of the markets must first be
determined. But, unfortunately,
the geographic limits of banking
markets are especially difficult to
determine-harder perhaps than for
any other industry.
Commercial banks are multiproduct firms, and the markets for
their products can differ widely.
A large downtown bank in a major
financial center, such as Houston
or Dallas, typically finds individual
1

NUMBER OF COMMERCIAL BANKS IN TEXAS METROPOLITAN AREAS
Population size'
and sl and ard metropoilian
stati stical are a

1950

Number of banks,
end of year
1960

1970

Change,
1970 from 1950
Absolute
Perce nt

50,000 to 99,999
Laredo . . . . . . . . . . . . . . . . . . . ... .. .. . . .
Midland ........ .. . . .. . .. .. ..... . . ..
Odessa ..... ... . . . ....... . ....... . .
San Angelo ........... . ... . . ........
Sherman-Denison ...... . ... . .. . .. . .. .
Texarkana (Bowie County only) .. ..... .
Tyler . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . ........ . ........ .. . . .. . .

100,000 to 499,999
Abilene .......................... ..
Amarillo
. . .. . .. . . ...... . .. .. ......
Austin ......... . .... . . . ............
Beaumont-Port Arthur-Orange .. .. . .
Brownsville-Harlingen-San Benito .... . .
Corpus Christi . .... ... .. ..... .... .. .
EI Paso . . .... . . .. . . ............. ... .
Galveston-Texas City .. . .. . . . ... .. .. . .
Lubbock ........ . ... . . . ... . . .. .....
McAlien-Pharr-Edinburg ... . .. ... . . .. .
Waco ...... . .. ....... .. . . .. . .......
Wichita Falls .. .. .. . .... . .......... . .
Total . . . . ... ... .... . ......... . ..
500,000 and over
Dallas. . . .. . .. . . .. .... . .... . ... .....
Fort Worth .... . .. .... . .. .. ... .. .....
Houston . . . . . . . ... . . . ... . ........ .. .
San Antonio . . . . . . . . . . . . . . . . . . . . . . . . .
Total ..... .. .. . .... .. .. . ... . .. ..
TOTAL, 23 SMSA'S .. . . . ... . ..

2
2
2
3

2
3

3
3

4

4

3

1
1
2
2
2
2
1
11

5

10

10

12

4
7

6
8

6
8

30

36

41

10

11
6
8
18
8
17
8
9
8

12

4
6
9
7

15
6
9
5

14
11
7

15
15

2

100
56
100
14
36
43

10

25
12
14
10

10

16

7

130

164

61

70
22
57
22
171

75

113
42
142
37
334

43
20

304

220
386

539

85

15
163
235

1. Census estimates for 1970

checking accounts, consumer instalment loans, and passbook
savings accounts coming largely
from nearby areas, usually from
within the county or from an adjacent county. But at the same
time, such a bank may also participate actively in the national
market for loans to large corporations, competing with banks in all
parts of the country.
For most banking services,
however, the relevant geographic
market is confined to a metropolitan area or smaller population
center. This is particularly true in
the case of services ordinarily
sought by individuals and small to
medium-size businesses. For these
customers, viable banking alternatives are usually available only
in the local area. The inconvenience
of shopping around for bank
services and the lack of information
regarding distant alternatives give
local banks a decided advantage
in the competition for compara-

111
29

6
5
5
2
4
3

19
9

117

2

13

103

90
27

67

20
50
14
37

2
5
7

9

15
10

28

50%
50
100

tively small deposits and small
loans.
In Texas, as elsewhere in the
United States, metropolitan areas
represent fairly close approximations of market areas for most
banking services. This is especially
true in Texas, where there are
usually large distances between
major cities and great differences
in local areas. For many banking
services, the state's 23 SMSA's are
fairly well-defined market areas.
Market structure
Critical elements in the structure
of a banking market include• Number of banks
• Average population per bank
• Concentration ratio-the percentage of assets or deposit.c:;
held by one or more of the
largest banks in the market
All three of these elements have
limitations as indexes of market
structure. The number of banks in
a market, for example, gives no

20
125

67

59

61
91
149
68
95
77%

-

POPULATION PER BANK IN TEXAS METROPOLITAN AREAS

-

Population slzet
and standard metropolitan
stati stical area

Ch ange ,
1970 from 1950
Absolute
Perc ent

1950

Popul ation per bank
1960

1970

28,071
12,893
21 ,051
19,643
7,047
15,492
10,672

32,396
22,572
22,749
21 ,543
7,304
9,995
10,794

24,286
21 ,811
22,951
14,209
6,935
11 ,302
12,137

-3,785
8,918
1,900
-5,434
-112
-4,190
1,465

-13.5%
69.2
9.0
-27.7
-1 .6
-27.1
13.7

Abilene
Amarillo :::::: : : ::: : :::: ::: ::: :: : :::
AUstin ........ .......... .... ..... ..
B
eaumont-Port Arthur-Orange ..... . ...
grownsville-Harlingen-San Benito .. . ...
Elo~~~~ Christl .. . .. . . . ..............
G
.. ............ ........ .......
L alveston-Texas City ..... . .... . . .....
ubbock . .........................
M
WcAllen-Pharr-Edinburg ..... . ..... . . .
Waco . ..... . ..... . . . ......... . . ....
50o,ob~h~t;:~~:r . .... . . . ... . ... . . . ......

8,552
21,785
26,830
26,183
17,881
13,421
32,495
12,563
20,210
11,460
13,019
15,044

10,943
24,916
26,517
17,001
18,887
15,682
39,259
15,596
19,534
12,060
10,721
18,520

9,497
16,044
22,732
16,629
15,596
11,377
29,941
12,129
17,930
11,346
9,837
12,762

945
-5,741
-4,098
-9,554
-2,285
-2,044
- 2,554
-434
-2,280
-114
-3,182
-2,282

11.1
-26.4
- 15.3
-36.5
-12.8
-15.2
-7.9
-3.5
-11 .3
-1.0
-24.4
-15.2

Dallas
Fort Worth ' . ... .. .... .. ..... . .. . .....

~ouston .. :: :: ::: : ::::::: : ::::::::::
_ _ an Antonio ....... . .................

11 ,155
17,847
16,412
33,364

14,926
20,472
15,759
31,234

13,769
18,145
13,979
22,445

2,614
298
-2,433
-10,919

23.4
1.7
-14.8
-32.7

~ERAGE, 23 SMSA'S .. ...

17,960

19,104

15,991

-1,970

50,000 to 99,999
Laredo . . ..... . .... .. .. .. .. . .... . . . .
Midland
Odessa :::: : :::::::::::: : :::::: : :: :
San Angelo ....................... . .
~herman-Denison ........ . ........ . ..
Texarkana (Bowie County only) . .......

100,6ci~rto 499;999 .. ..... ........... .....

..

. . . ... . . .

-6.9%

~OSR~s~s estimates for 1970

S : U.S. Bureau of the Census
Federal Reserve Bank of Dallas

weight to such other financial institutions as credit unions and
savings and loan associations.
These institutions often compete
aggressively with commercial banks
for savings deposits and real estate
and consumer loans. Moreover,
two markets can have the same
number of banks and still differ
widely in the relative size and
market power of competing
institutions.
Concentration ratios provide
some indication of the comparative
size of banks in a market, but here
again, they do not reflect the importance of competition from
financial institutions other than
banks. Moreover, while banks are
multiproduct firms, concentration
ratios are usually computed in
terms of a single balance sheet
item, such as total deposits or total
assets. The ratios, therefore, often
do not adequately describe concentration in all of the great variety
of services performed by banking
institutions.

nUs'Uless Review I April 1971

Similarly, while population per
bank provides some measure of t he
relative availability of banking
alternatives to the public, it says
nothing about the geographic distribution of banks within the
market area. Since for many services convenience is a big factor in
choosing a bank, the location of
banks is a critical element in
assessing the adequacy of banking
facilities.
Clearly, then, each of these
elements has serious limitations.
Tak~n together, however, they
prOVIde a rough summary measure
of the extent to which the public
faces viable alternatives in its
demand for banking services.
Structural trends
The number of commercial banks
in Texas SMSA's has increased
sharply in recent years. Where there
were 304 banks in the SMSA's in
1950, there were 539 in 1970. For
the state as a whole, the number of
banks increased from 908 to 1,190
3

during this period. Thus, where
SMSA's accounted for about 33
percent of the banks in Texas in
1950, they accounted for about 45
percent in 1970. More than 80
percent of the statewide increase
in banks over these two decades
was in SMSA's.
There were net gains in each of
the 23 SMSA's. The largest gains,
however-both in absolute number
and relative to the level in 1950were in the largest population
centers-Dallas, Fort Worth, Houston, and San Antonio. Taken
together, the number of banks in
these four centers almost doubled.
This increase-from 171 in 1950 to
334 in 1970-represented over half
the increase in the number of
banks in the state during that
period. Houston alone gained 85
banks, which brought its total to
more than twice the number in
1950. Dallas had a net increase of
43 banks, which represented a
60-percent gain.
By contrast, the smallest SMSA's
(those with populations less than
100,000) gained a total of only 11
banks. This represented an increase
for these seven SMSA's of only 37
percent in 20 years.
Medium-size centers (those with
populations of at least 100,000
but less than 500,000) made average gains falling between these
extremes. Where these 12 SMSA's
had a total of 103 banks in 1950,
they had 164 in 1970. The net
addition represented an advance
of 59 percent.
The number of banks in Texas
SMSA's increased faster than
population during this period, apparently increasing the availability
of banking services. Average population per bank dropped from
about 18,000 in 1950 to about
16,000 in 1970. All this drop came
in the 1960's, as the number of
metropolitan banks increased a
third while metropolitan popula-

tion increased little more than a
fifth.
Changes in population per bank
varied widely, however, with no
discernible pattern that related to
the populations of the SMSA's or
their locations in the state. Population per bank declined in 17 of
the 23 SMSA's. The exceptions
were Abilene, Dallas, Fort Worth,
Midland, Odessa, and Tyler, each
representative of a different size
SMSA.
Deposits became less concentrated during this 20-year period,
especially in the 1960's. The
proportion of deposits held by the
largest bank in the area declined
in 19 of the 23 SMSA's, dropping,
on average, about six percentage
points after 1950 and nearly five
percentage points after 1960.
Similarly, concentration of deposits in the hands of the two largest
banks declined in 20 of the 23
SMSA's, falling an average of
about nine percentage points after
1950 and more than seven percentage points after 1960. 1
Concentration varied considerably among the SMSA's, with the
largest declines, particularly in
the 1950's, generally occurring in
small to moderate-size communities. Concentration in the Dallas
and Houston areas increased
enough in the 1950's to blunt much
of the effect of significant declines
in concentration in these two
centers in the 1960's.
Determinants of trends
The rapid increase in the number
of banks in the metropolitan areas
of Texas stands in sharp contrast
to developments nationwide. Where
there was a net increase of 77
percent in the number of metropolitan banks in Texas between 1950
and 1970 (and a 31-percent increase statewide), there was a net
decline of about 3 percent in the
nation as a whole.

Some of this difference was due
to the rapid growth of SMSA's in
Texas. Total population of these
23 SMSA's increased 70 percent
over this period, while population
in the nation increased only 34
percent.
But most of the difference reflected the fact that Texas is a unitbanking state. Since branching is
prohibited in Texas, the increase in
banking offices needed to accommodate the additional demand
came necessarily through the creation of new banks rather than the
proliferation of branch offices. By
contrast, while the number of
separately incorporated banks in
the nation declined, on balance,
after 1950, the number of branch
offices quadrupled.
The state's banking laws tended
not only to encourage the creation
of new banks but also to slow the
pace of mergers among existing
banks-mergers that otherwise
might have offset some of the increase in new banks. Even though
one out of every 12 commercial
banks in the nation is located in
Texas, the state has accounted for
less than 2 percent of the nation's
postwar bank mergers. Since the
merger of two banks operating
under unit-banking laws ordinarilY
means one of the offices must be
closed, the infrequency of bank
mergers in Texas was in line with
developments in other states prohibiting branching. Taken as a
whole, unit-banking states have
accounted for less than 10 percent
of the nation's postwar bank
mergers.
These laws also profoundly influenced the concentration of bank
deposits in SMSA's. The prohibition against branches allowed
banks in the rapidly expanding
suburbs to capture large shares of
the growing pool of SMSA deposits.
Without this prohibition, large
downtown banks would doubtlesslY

1. These findin gs concerning market con cen t ration must be interpreted with caution. however . s ince they do not r eflect the effects of group and chain
banking . Chain banking usually r efers to t he control of two or more banks by a s ingle individual or informal group of individua ls. Group banking
implies the ownership or control of at least two banks by II. formal holdinll" company.

4

-

--

PERCENTAGE OF SMSA DEPOSITS HELD BY THE LARGEST BANK IN TEXAS METROPOLITAN AREAS

-

Population size'
and standard metropolitan
statistical area

50,000 to 99,999
Laredo . . ..... ... .... .. . . ..... . . .. . .
Midland ... . . . .... . .... . .......•. . ..
Odessa ................. .. .........
San Angelo .. . .. . ...... . . .. ... ... . . .
Sherman-Denison ......... ... . . . . ....
iexarkana (Bowie County only) . .......

100.6ri~rlo 499;999 ...... ........... .. ....

Abilene . . ...... ... . .. . . . ..... . .. .. .
Amarillo .. . .. . ... .. ... . .. ... . ... . . . .
AUstin ... . ........ . ... . .... . ...... .
Beaumont-Port Arthur-Orange .. ... .. . .
Brownsville-Harlingen-San Benito .. . . . .
Corpus Christi . . . . . . . . . . . . . . . . . . . . . .
EI Paso
~alvesto'n~T~X~SCi'tY ' : ::::::::::::::::
MUbbock .. . ............. . . .. ... ....
WcAlien-Pharr-Edlnburg .... . ..... . ...
waco ........ . .. . ... .. .... .. . . ... . .
500,0~~h~t~:~~:r . . . ....... .. .. . .. . .... . .
Dallas tI, ' .... . ........ . . . .. . . .. . . ..
Fort War'

-

~ouston .. : : ::: : :::::::: : ::: : :::: : ::
an Antonio . . ..... ... . ... .. .. . .. ....

1950

Concentration ratio,
end of year
1960
1969'

Change
1960
from
1950

1969
from
1960

67.7%
65.9
63.1
42.8
35.7
83.5
43.2

63.7%
57.4
42.9
44.6
34.7
75.3
38.0

59.5%
62.3
39.2
37.4
31 .6
60.6
30.5

-4.0
-8.5
-20.2
1.8
-1.0
-8.2
-5.2

-4.2
4.9
-3.7
-7.2
-3.1
-14.6
-7.5

35.0
48.7
39.0
27.8
27.1
32.5
46.4
22.4
36.1
18.0
41.3
39.4

35.8
38.1
33.4
22.1
28.7
44.4
44.1
27.5
34.6
18.4
37.9
53.6

27.7
36.4
29.6
26.0
24.4
34.5
38.5
21.0
30.7
18.4
34.2
46.8

.8
-10.6
-5.6
-5.7
1.6
11.9
-2.3
5.1
-1.5
.4
-3.4
14.2

-8.1
-1.7
-3.8
3.9
-4.3
-9.9
-5.6
-6.5
-3.9
.0
-3.7
-6.8

29.9
41 .1
17.4
31.5

35.1
35.6
26.9
27.8

28.7
27.5
19.3
24.4

5.2
-5.5
9.5
-3.7

-6.4
-8.1
-7.6
-3.4

~ : f:t~SUS estimates for 1970

S OuRc~le a r for which comparable figures are available

: Rand McNally International Bankers Directory
Federal Reserve Bank of Dallas

PERCENTAGE OF SMSA DEPOSITS HELD BY THE TWO LARGEST BANKS IN TEXAS METROPOLITAN AREAS

--------------------------------------------------------------~~-------------------Change
Concentration ratio,
1960
1969
Population size'
end of year
from
from
and
____________ standard metropolitan
______________ 1950 ______1960 ________________________ 1960 _________________
1950
1969'
~~ta~ti~st~lc=a~la~r~ea~
s

50,000 to 99,999
~aredO ... . . .. ........ . .. ... ... . ... .
O~~:S~
S
..... .. .... .. ...... .. . .. .. ..
S an Angelo . ... .................... .

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

i~I~~~~~~(~~~i~ Co~nty

o'n'ly)' . : : :
100,600 to 499;999 ....... ........ ..... .. .
Abilene '" ........ . ... . . . ...... . .. .
Amarillo

~ustin . :::::: : ::: : :::::: :: :: : :: :: : :

eaumont-Port Arthur-Orange ...... . . .
Brownsville-Harlingen-San Benito . .. . . .
~IO~~~~ Christi . ..... . ... .. . ... .. ... .
G
........... .. .. .. .......... .
alveston-Texas City .. . . . . . . ... . . . .. .
Lubbock
MCAlien-Pharr~Edinburg'

.. ... . : : : : ~ : : ~ .

Waco .. .. . ............ .. ..... . .... .
W·
500 ootchita Falls . . .. . .... . .. . . ... . .. ... .
, 0 and over
Dallas

~~~s%~th '

... : '. : : '. : : : '. '.. '. '. : : '. : : '. : : '. :

=---..San Antonio' . : : : : : : : : : : : : : : : : : : : : : : : :

~~

~~

~~

88.5%
90.6
70.6
67.6
49.5
78.3
59.2

0.0
-11 .1
-30.9
-.2
-.2
-3.3
-1.0

-11.5
1.7
1.5
-4.8
-7.9
-1.9
-9.4

68.8
75.9
62.3
43.6
54.9
62.1
84.3
49.8
58.4
32.6
75.1
87.9

54.9
66.9
55.5
43.6
45.6
54.1
72.0
38.8
51.8
36.0
66.4
78.9

3.1
-7.2
-7.3
-9.4
1.6
11.7
-4.8
6.8
-11.3
4.6
-4.4
13.2

-13.9
-9.0
-6.8
.0
-9.3
-8.0
-12.3
-11.0
-6.6
3.4
-8.7
-9.0

65.4
66.5
43.0
52.8

55.2
50.2
31.3
42.4

8.2
-6.3
8.3
-4.7

-10.2
-16.3
-11.7
-10.4

100.0%
100.0
100.0
72.6
57.6
83.5
69.6

100.0%
88.9
69.1
72.4
57.4
80.2
68.6

65.7
83.1
69.6
53.0
53.3
50.4
89.1
43.0
69.7
28.0
79.5
74.7
57.2
72.8
34.7
57.5

1 . C e n~=:~~~~~-------------------------------------------------------------------------------

2. LateSs~ s

estimates fo r 1970

SOURCE:"e~r for which comparable figures are available
. F and McNally International Bankers Directory

ederal Reserve Bank of Dallas

nus·
lness Review I April 1971

5

have established branches in the
suburbs and more of these deposits
would have been channeled into the
large banks.
While unit-banking laws were
undoubtedly central to the shaping
of trends in the number of banks
and concentration of deposits in
the SMSA's of Texas, differences in
the structural trends in banking
markets in the state were clearly
due to other factors, such as
differences in rates of growth in
population, income, and employment between the various SMSA's
and shifts in patterns of population
growth.
As might be expected, the greatest gains in new banks were in the
fastest growing areas. Population,
for example, almost doubled in
Dallas, Fort Worth, Houston, and
San Antonio, all centers with populations of more than 500,000, and
these four centers also had the fastest growth in new banks. By contrast, population in the seven
SMSA's with less than 100,000
people increased only about 50
percent and the number of banks in
these areas increased the slowest.
Part of the rapid growth in the
number of banks was also accounted for by shifts in population
to the suburbs. The growth of suburban areas around Dallas, Fort
Worth, Houston, and San Antonio
spurred a rapid buildup in new suburban banks to provide the deposit
and credit services needed in these
outlying areas. Because the large
downtown banks could not branch
into the suburbs, many new banks
were chartered to meet the additional demand. There was no such
rapid buildup in the smaller
SMSA's (particularly those with
populations less than 100,000),
indicating the need for new banks
was not as great as in the larger
metropolitan centers.
As population shifted to the suburbs surrounding the state's largest
cities and deposits flowed to outlying banks, the share of deposits
held by the large downtown banks
6

declined. The concentration of deposits in the very largest centers,
however-Dallas and Houston-declined far less, on average, than in
the smaller SMSA's. The ability of
large city banks to maintain their
market positions despite the rapid
growth of suburban banks partly
reflects the fact that the larger institutions were not totally dependent on local conditions for their
growth. These large banks participate actively in regional and national markets for corporate loans
and deposits and, therefore, are less
affected by the growth of competing suburban banks than their
counterparts in smaller SMSA's.
In conclusion, the structure of
banking markets in metropolitan
areas of Texas has undergone significant change in the past 20
years. The number of banks has
increased in 8.1123 SMSA's, while
the average number of people
serv~d by each bank has generally
declined. Concentration of deposits
in the largest banks has also declined in most metropolitan areas
particularly in the decade just '
ended.
These changes partly reflect the
rapid economic expansion of the
state and the character of its banking laws. But they also reflect the
rapid growth of suburban communities surrounding the state's largest cities-growth that has resulted
in a rapid rise in new suburban
banking facilities and a corresponding decline in the relative
positions of large downtown banking institutions.
-William H. Kelly
Peter S. Rose

Population in Texas-

Wage Differentials Spur
Rural-to-Urban Movement

The population of Texas increased
nearly 17 percent from 1960 to
1970. But most of this gain was in
the urban counties. Except for a
few counties in the Panhandle and
the Big Thicket of East Texas and
a~ong the Rio Grande, rural countIes lost population.
The only counties, in fact, to gain
Population through in-migrationeXcept the large metropolitan
cOunties and the counties adjacent
~ them-were four counties in the
anhandle and nine counties in
~ast Texas. Population increases
In counties along the Rio Grande
Were the result of natural increases
that. more than offset losses in populabon to out-migration.
I There are many reasons for peoP e moving from one area to ano~~er. Climate, preference for large
cibes or small towns and proximity
,
to f .
f fiends and relatives-all these,
l~r e~ample, influence changes in
cabon. But the most important
reasons for migration are economic.
People tend to locate in areas
Where they are paid most for their
Se .
rVIces, and wages and incomes
average significantly higher in
~rban areas than in rural areas. In
xas, urban incomes averaged
~ out 40 percent higher than rural
~ncomes in 1960. Furthermore,
n~~m workers, who made up a sigf I Cant part of the rural work
to:ce, received, on average, only
t" o-fifths as much as other produc;?n Workers, whether urban or

ricultural employment alone fell
62,000. Thus, even though farm
workers accounted for less than a
third of the employment in these
counties in 1958, they accounted
for about 85 percent of the decline
in total employment over the tenyear period.
The difference in wage rates
caused many manufacturers to
establish plants in rural counties.
But these efforts to make use of
less-expensive labor only slightly
dampened the outflow of population to the cities. The employment
these plants offered was not
enough to offset the basic differences in wages or to reverse the

general trend in population. From
1968 to 1970, out-migrations from
rural counties averaged 4,000 more
than natural increases in population (births less deaths).
Basis for the difference
Migration would ordinarily be expected to have narrowed differences in rural and urban incomes.
~orkers moving into high-wage,
hIgh-employment areas increase
the supply of labor there and tend
to slow the increase in wages. Conversely, wages would be expected to
rise faster in areas that had lost
workers through migration. But
such has not been the case with the

Population-With few exceptions,
population gains were in urban counties

b

4

ural.

e This differential gave farm worknrs ample incentive to switch to
w~na~ricultural jobs, most of which
19~~ ill urban areas. From 1958 to
rUr ,total ~mployment in 176
th a1 CountIes of Texas (counties
U t Were not urban or adjacent to
r an counties) fell by 73,000. Ag-

b

nUs·llless Review I April 1971

POPULATION IN 1970 WAS:
LESS THAN 75%

o MORE THAN 100%
MORE THAN 75%

o BUT LESS THAN 100%
OF THE POPULATION IN 1960
SOURCE: U.s. Bureau of the Census

7

rural-to-urban movement-in Texas
or the nation.
While migration slowed the increasing difference between urban
and rural wages, it was not enough
to stop the increase. With the rapid
gains in economic activity in the
cities, urban demand for workers
continued to rise even though large
numbers of workers were migrating
to the cities. And as new techniques
of agricultural production further
reduced the demand for farm workers, the gap between farm and nonfarm wages continued to spread. In
Texas between 1958 and 1968,
wages of manufacturing workers,
for example, increased nearly twice
as much as wages of farm workers.
For employment in the averagesize rural county of Texas not to
have declined, the value of its agricultural production would have
had to increase about $15 million
over this ten-year period. Production increased more than that in

Sherman, Hansford, Castro, and
Deaf Smith counties, the four Panhandle counties that gained population. But over the decade the
average dollar increase in crop and
livestock production in all 176
counties was only about $2 million.
Advances were particularly slow
in West Texas, where production
was hampered by the scarcity of
water. After rapid growth in production and population in the
1940's and 1950's, population in
some South Plains counties
dropped as supplies of underground water were depleted and
production was shifted from crops
to livestock. Some counties in
North Texas made slight gains in
production of crops and livestock
but not enough to prevent a decline
in population. Farm employment
also fell in East Texas, although
out-migration from there tended to
be less than in other parts of the
state, primarily because of in-

Migration-Large numbers of Texans
moved out of rural counties in 1960.70

OUT-MIGRATION
OVER 25%
D

o

IN-MIGRATION
OUT-MIGRATION
BETWEEN ZERO AND 25%

SOURCE: U.s. Bureau of the Census

8

creases in manufacturing. Of the
nine East Texas counties that had
population increases, seven also
had increases in manufacturing
employment.

Farm employment slips
in Texas
as cash receipts rise
THOUSAND WORKERS

MILLION DOLLARS

500---------------------500

Employment alternatives
~ EMPLOYMENT
Farm workers, of course, were not
~ CASH RECEIPTS
limited entirely to a choice between
remaining on farms or moving to
the cities. There is substantial nonfarm employment in rural counties,
and it has been increasing relative
to farm employment. Farm labor,
in fact, accounted for only 31 percent of the work force in rural
counties of Texas in 1958, and by
1968 the proportion had fallen to
26 percent.
This decline reflected not only
the migration of farm workers to
1958
I 1968
100
the cities but also a shift from farm
jobs to higher-paying nonfarm jobs SOURCE: U.S . Department of Agriculture
in rural areas. And most of the
relative strength of total employment in the 176 rural counties (a
decline of only 8.8 percent from
1958 to 1968, compared with a decline of nearly a fourth in farm
employment) was in manufacturing.
Nonfarm workers in rural counWithout rise in farm output,
ties are employed primarily in one
average rural Texas county
of three kinds of small-town
lost employment in 1958-68
enterprisesPERCENT CHANGE IN EMPLOYMENT
• Those supplying goods and
services to support agricul20
. NOTE: $15 million
tural production in the area
increase in output
• Those supplying goods and
required to prevent
services to residents and
, drop in employment
industries in the area generally 10
• Those manufacturing goods
for shipment outside the area
Employment in the first cateo
gory-and to an extent, the second
-is tied closely to the level of local
agricultural output. And agricultural output in most counties did
-10
not increase enough to support
any great amount of employment
in either category. With total
employment on the decline, neither
of these primarily commercial categories absorbed any large number
SOURCE: U.S. Department of Agriculture
of former farm workers. But manufacturing plants took on 15,000

400
& ~ 300
300-1 _
200-&-_-1-_-200
400-~

11-

100_B -

nUs·llless Review I April 1971

II

9

Drop in farm employment
outweighs manufacturing gain
in rural Texas counties
PERCENT CHANGE IN EMPLOYMENT,
1968 FROM 1958

TOTAL

I

-20

I

-10

I

o

I

10

I

20

SOURCE: Texas Employment Commission

additional workers over the tenyear period.
During that time, some 2,000
new manufacturing plants were
established in rural counties. Attracted, apparently, by the same
urban-rural wage differential that
caused many workers to leave rural
areas, companies established plants
that tended to have certain characteristics in common. Although
there are a few marked exceptions
(primarily plants based on the extractive industries), most plants in
the 176 truly rural counties of
Texas are• Fairly small. Three-fourths
of the plants in these counties
in 1968 employed fewer than
20 workers.
• Labor intensive. Most of the
plants produced such goods as
apparel, food products, and
lumber and other building
materials, all of which require
relatively large inputs of labor.
• Able to reduce transportation
costs. Most of the plants either
are located near sources of raw
materials (such as lumber) or
near markets for bulky materials (such as cement) or produce goods (such as apparel)
that have low transportation
costs relative to the value of
the product.
10

These characteristics suggest
that growth of manufacturing in
rural Texas has been encouraged
primarily by comparatively low
wage rates and savings in transportation costs. Since any significant
reduction in costs of transportation
for rural counties seems unlikely
and any further development of
extractive industries that might
provide the basis for additional
manufacturing plants is unpredictable, the future growth of nonfarm
employment in rural areas apparently depends almost entirely on
the urban-rural wage differential.
As rural workers migrate to the
cities, there will be a tendency for
the differential to narrow, thereby
reducing the greatest incentive for
companies to locate plants in rural
areas. But as further laborsaving
techniques are introduced into agriculture, there will be a tendency
for the differential to spread.
Essentially, then, future growth
in rural employment will depend
primarily on growth in urban demand for workers. If this growth
in demand continues to hold urban
wages well above the wage rates
paid in rural areas, the differential
can be expected to continue providing incentives both for new
manufacturing plants to locate in
rural counties and for rural workers to migrate to the cities.
-Kenneth Wieand

New par banks

The Texas Bank of Beaumont, Beaumont, Texas, an insured nonmember bank
located in the territory served by the Houston Branch of the Federal Reserve
Bank of Dallas, was added to the Par List on its opening date, March 15, 1971.
The officers are: Lewis H. McNeely, President, and James R. Gunter, Vice
President and Cashier.
The First Security State Bank, Cranfills Gap, Texas, an insured nonmember
bank located in the territory served by the Head Office of the Federal Reserve
Bank of Dallas, was added to the Par List on March 15, 1971. The officers are:
Wm. B. Bertelsen, Chairman of the Board; Hubert Viertel, Vice Chairman; Ray
Hastings, President; and Lonnie C. Tergerson, Vice President and Cashier.

-

The Farmers State Bank, Meridian, Texas, an insured nonmember bank
located in the territory served by the Head Office of the Federal Reserve Bank of
Dallas, was added to the Par List on March 15, 1971. The officers are: Wm. B.
Bertelsen, Chairman of the Board; Hugh H. Trotter, President; Cecil Wimberly,
Vice President; and Mrs. AIda Chesnut, Vice President and Cashier.

nu' Review / April 1971
Slness

11

Research Department
Federal Reserve Bank of Dallas
Station K, Dallas, Texas 75222

Federal Reserve Bank of Dallas
April 1971

Statistical Supplement to the Business Review

-

Jhe s.easonally adjusted Texas inustrlal production index was
~ssentially unchanged in February
rom revised levels for December
;nd January. At 181.3 percent of
1 s 1957-59 base the index was up
~~y 0.1 percent'from January and
. J>ercent from February 1970.
anufacturing was off 0.7 per~ent from a year before. Manudacturing of durable goods was
Own 1.6 percent from January
pnd 9.2 percent from a year before.
roduction of transportation
eq .
Ulpment remained weak, but
production of electrical machinery
~se 1.1 percent in February.
t' olstered by advances in producl~n of food products and chemiCa s, manufacturing of nondurable
jOOds advanced 1.3 percent over
danu ary, largely offsetting the
ec ~~ in durable goods.
v' ~lUlUg and utilities remained
ai~hually unchanged from January,
sh ough both industry groups
owed
before. advances over a year

~tal nonagricultural wage and

ary employment in the five
SOuth
.
in F Western states rose slightly
as ebruary, further strengthening
J mall year-to-year gain since
faa~ua!y. Employment in manuinc ~rlUg continued to decline, fall\, gOa level 5.4 percent below a
,rear a S
van ~o. purred by a strong adno ce In government employment,
c nmanufacturing employment reered slightly from January.
suc~e ~ere offsetting declines,
eVe
In mining and trade, howsli ~ u:ployment advanced
re~ ~ly In finance and services,
tat' a1ned unchanged in transporess~on .and public utilities, and was
tio nt1ally unchanged in construc-

1h

E

n.

Oil allowables in producing states
of the Eleventh District were
unchanged in April from the high
levels set for February and March,
and only in Texas were they even
marginally lower than the rate set
for January. The allowables held
at 82.1 percent of maximum efficient production in Texas, 75 percent in Louisiana, and 150 percent
in Oklahoma. In southeastern New
Mexico, the allowable per well continued at 80 barrels a day. At these
rates, production areas are believed to be pumping close to their
maximum outputs without wasting
casinghead gas or creating pollution problems.
The Federal Power Commission
has announced that small natural
gas producers-those selling less
than 10 billion cubic feet of gas a
year-will soon be exempt from
price regulation. This will exempt
all but 70 of the nation's 4,700
gas producers.
Registrations of new passenger
automobiles in Dallas, Fort Worth,
Houston, and San Antonio were ~O
percent higher in February than In
January. All four metropolitan
centers posted increases. Registrations were 11 percent greater than
in February 1970. Cumulative
registrations were 4 percent higher
than in the first two months of
1970.
Department store sales in the
Eleventh District were unchanged
in the four weeks ended March 27
from the corresponding period last
year. Cumulative sales through
that date were 6 percent higher
than a year before.
Range and pasture conditions, as
well as cattle conditions, have

fallen below ten-year averages in
four of the five states of the
Eleventh District. Only in Louisiana have conditions not deteriorated from drought during the
past month. Some areas of Arizona
New Mexico, Oklahoma, and Texa~
are critically short of water for
livestock. Supplemental feeding
continues in these states.
Because of the dry fields, crop
planting is proceeding slowly in
Texas. Growth of vegetables has
been set back several times by cool
weather in Arizona, Oklahoma, and
Texas, but there has been no extensive damage. In contrast, field
work in Louisiana has been hampered by excessive soil moisture.
The blizzard that hit Oklahoma
and the Panhandle of Texas in
February caused extensive mixing
of cattle and considerable death
losses, especially in Oklahoma. The
result was a condition loss for
nearly all surviving cattle in the
area. The cost to cattlemen in
actual cattle losses and sorting and
reconditioning is expected to be
substantial.
.
As livestock feeding continued
to increase in the District, Texas
replaced Nebraska in the early
part of the year as the nation's
second largest cattle feeding state.
The Texas citrus crop is estimated to be substantially larger
than last season. Projections show
the orange crop up 36 percent and
the grapefruit crop up 9 percent. In
Arizona, however, the citrus crop
is down. Production of oranges is
expected to be off 29 percent from
last season, and production of
grapefruit to be off 21 percent.
Also, Arizona had two nights of
freezing in early March that have
caused some damage to new
(Continued on back page)

CONDITION STATISTICS OF WEEKLY REPORTING COMMERCIAL BANKS

Eleventh Federal Reserve District
(Thousand dollars)

und er ag ree ments to rese ll . • • . . . .• . ... ••• ...
Comm ercial and Industrial loons •• .... • • . ...••

681,027
6,601,660

328,350
5,994,269

---- -3,177,783
--3,189,980

Mar. 24,
1971

LIABILITIES

3,000,519

119,010

106,206

500
43,928

1,565
435,711

U.S. Gove rnme nt securities .• . ... ... . . ... ...
Oth er sec urities .•••.. .• .. •• ... ..•• . . ..• ••
Other lo a nl for purcha sing or carrying :

U.S. Govern ment securitie s . . •.... .• .•... ...
Other securities •••. . •..... .. •.•. ..• ••.. . .
Loans to nonbank flnancial Institutions:
Soles flnance, personal flnance, factors,
and other business credit companies . ••.• ..

1,645
429,629

1,230
387,955

212,5 16
48t,079
664,941
18,761
11,937
733,907

132,845
342,679
587,795
10,222
10,329
729,8 16

0
790,263
2,893,075

425
644,289
2,484,670

998,515
148,896
0

Other loans • • •••• •• ••• • ••• • ••• • ••• • ••• •• • •

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

0
7 47,807
3,016,930

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

Real estate loan s •..... .• ..••.. . • •• .. •. . . ..
Loons to dom estic comm ercial bonks•.•..•....•
Loons to fore ign bonks• • .• • ... • .•.. • . • .•••.•
Consum er Instalm ent loons ...... •• ...• • ••.• •.
Loan s to foreign governm ents, offlcial
in stitutions, central bonks, and international
institutions••.. • •.. • •..• · ••• • •• • ·· ••• •• • •

978,602
123,093
0

- ---

Total U.S. Gov ernm ent secu rities .• •. . •• •.. •• ..

Trea sury bills ••••••• • •• •• •••••• • •• •• ••••
Trea sury certlAcates of ind ebtedness •••••••.
Trea sury notes and U.S. Gove rnment
bond s maturing:

---892,650
44,226
0

149,954
531,260
168,405

Afte r 5 yea rs •• • •• •• • • ••••• • •• •• •••• ••
Obligation s of states and political subdivisions:
Ta x warrants and short·t erm notes and bllls. ••

All othor • •• •• •• • •• • • • •• •• •• •• • • • • • •••••

166,647
598,375
83,402

32,882
1,646,574
91,793
143,224
1,171,427
917,362
88,482
572,826
7,998

56,828
71,081
1,016,240
818,805
84,080
449,748
8,672

457,731

460,119

All other (including corporate stocks) •••••••••
Co sh items In proc ess of coll ection ••••.• • .••••..•
Rese rves with Fed eral Rese rve Bank ••..•••• ••• ..
Currency and coin •••• • • • • .. • •• •• .. •... • • • .••
Balances with ban ks in the United States . • ..••••.
Balanc es with ban ks in foreign countries .. •. .. • • • •
Oth er a ssets (including investm ents in sub sidiaries

3,909,9
258,7 89
142,6 10
1,129,5 44

2,819
28,972
98,160
4,667,967

80,7
3,316,929

1,005,513
2,474,0 84
1,087,085
41,479
85,914

974,688
2,496,561
1,057,337
30,581
95,015
12,685
1,1 00
999,089
68,22 2
401,159
138,439
19,471
1,032,548

TOTAL LIABILITIES, RESERVES, AND
CAPITAL ACCOUNTS •••••• •• •• •• •• • •• •• 13,426,095

---13,393,976

506,796
11,691,630

Eleventh Federal Reserve District

12,931
2,302
3,836
1,558
277
1,409
11
1,358
829

12,878
2,280
3,834
1,461
282
1,407
12
1,418
882

24,511

24,454

1,738
9,299
9,428

1,834
9,468
9,130

Borrowings •• •• • . . ••• .. • . .. • •• •..••• ••.
Oth er lia biliti es e . • • • • .• •• . ...• • •.• • ••••• •
Total capital accounts e •••• •.••• •• ••• . •••

20,465
1,098
1,104
1,844

20,432
1,113
1,071
1,838

TOTAL LIABILITIES AND CAPITAL
ACCOUNTSe • ••••••• •• • • •• • ••••• ••

24,511

24,454

Item

COUNTRY BANKS
Total reserves held •••••• • • •••• •
With Fe d eral Reserve 8ank •• • •
Currency and coin • • •••.••• . .
Re quire d reserves ••••••.•••.. • .
Excess rese rve s•••.••.•••.•••. •
Borrowing s • • • •••..• • • • .•• •• . •
Free re se rves ••••.••.•••••••. •

ALL MEMBER BANKS
Total reserves held • •• •• .•• •••• •
W ith Fed eral Rese rve Bank ••••
Currency and coin • .••... • .. •
Re quired rese rves • ••• • •. • •• , • ..
Excess reserves•• • ..••.••... • ..
Borrowing s ••. • ..•••.. •. ..• • . •
Fre e reserve s••• • •••••••• • .• ••

1 3,2~~
1,3

978,O~~

274,4
437,455

134,8~;

13,2
987,30 3

----

~
~

4 weeks end e d
Mar. 3,1971

Loans and d iscounts, gross ... • • •.••••.. • ••
U.S. Governm ent obligations • .• •• . .• •• ••••
Other se curities . ••••. . • '" •• • .. ••• " ••••
Reserve s w ith Federal Re serve Bank •••• • • • .

Total deposits ••• • ••• •• • ••••• •••••• • • •
4 weeks ended
Feb . 3, 1971

4 wee ks end ed
Mar. 4,1970

819,979
767,634
52,345
823,875
-3,896
0
- 3,896

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

726,216
675,374
50,842
725,816
400
23,355
-22,955

859,985
671,916
188,069
828,836
31 , 149
161
30,988

858,082
658,507
199,575
828,250
29,832
214
29,618

785,303
604,640
180,663
756,076
29,227
13,388
15,839

1,679,964
1,439,550
240,414
1,652,711
27,253
161
27,092

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

1,511,519
1,280,014
231,505
1,481 ,892
29,627
36,743
-7,116

~

ASSETS

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

(Averages of dally figures. Thousand dollars)

Currency and coin •• . • ••••• .•
Re quire d rese rve' • • ••••. • ••.. • •
Excess reserves ••••••••••••.• ••
Borrowings ••••••••••••• • • • • • •
Fre e reserve, •• • ••• • • •• • • •••••

I, 4
15,31

Fe b. 25,

Jan. 27,
1971

LIABILITIES AND CAPITAL ACCOUNTS
Demand deposits of banks • •• • • •• •• • •••••
Other demand deposits •• • • •• ••••• •• • • • • •
Time deposits

---- ---13,426,095 13,393,976

RESERVE POSITIONS OF MEMBER BANKS

With Fe d eral Reserve Bank, •••

740'~23

...",.,-

Feb . 24,
1971

TOTAL ASSETSe . . . ... . .. . . ......... ..

Total rese rves held •••••.•••••••

919 840
8
1,6 25'224
'7

(MIllion dollars)

Cosh In vault • • •••• • • •• •••• ••• ••••••••••
Balances with banks in the United States •• • •

RESERVE CITY BANKS

3 051

24:5~;

Eleventh Federal Reserve District

Balance s with banks in foreign countrlese ••• •
Ca sh Items I~ process of collection • •• • ••• • • .
Other a ss ots ••••••••• • ••••••••••••• . • •

TOTAL ASSETS •••• • ••• • •••• ••••• •• •• ••• •

5,549,3~~

6,067,081
4,111,296
330,823
166,128
1,328,883

CONDITION STATISTICS OF ALL MEMBER BANKS

Other bond s, corporate stocks, and se curiti es:
Certiflcates representing participations in
Fe de ral ag ency loons • •• • • • .• • ••• • .••• •

not consolidated) •••• • •••• • •••• •• •• •• •••• • •

8 866,268

5,906
1,458,205

103,555
128,263
1,157,074
954,991
88,575
559,357
7,237

1 yea r to 5 years• •• • • .. • •. • • .•• • ...•. •

174,252
512,003
169,254

67,782
1,718,815

Within 1 year ••• •• ••• • • • • • • • •• •••• •• ••

Reserves on loans• • .• ... . •. .. . •• .• . .•••... • ..
Rese rves on securities • .. . ••. ....••. . •• • •......
Total capital accounts . ••• . . • ... •• •• .. ..• • •• ..

~

1,020,752
75,880
377.003
136,638
19,934
1,043,425

U.S. Governm ent (including postal saving s)• • • •

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

10,735,048

12,685
1,100

Forei gnl
Governm ents, offlcial institutions, central
banks, and int ernational institution s••... .
Comm ercial banks . . •.. •.. ....• •• • •••.•
Certifl ed and offic ers' ch ecks, etc .••..•..... .
Total tim e ond savings deposits..•• • .•........
Individuals, partn erships, and corporation s:
Saving s d e posits ••..... •. . . .• •• •.. . .•. .
Oth er time d eposits . .. •.. .. . • • .•.......
Stat es and political subdivi sions •• •.........
Banks in the United States •. . .. •••... • .. .•.
Foreign:
Gove rnm ents, ofAcia l institutions, central
banks, and international institutions ...•..
Comm ercial banks ..•. . ••... . ••..• • . •••
Fed eral fund s purcha se d and securities sold
und er agre ements to repurchas e • • • ...• • •• ..••
Other liabilities for borrowed mon ey •••• .. .. ....

Mar. 25,
1970

2,1 58
26,700
90,642
4,707,860

Bonks In the Un ited States • •. .••••• • •• • ••••

500
39,459

Fe b. 24,
1971

4,150,890
339,355
87,833
1,347,025

Individuals, partn ership s, and co rporation s• • . .
States and political subdivi sion s . .. •...... . .
U.S. Governm ent ....... ... ..........•• . .

117,426

ce rtiflcotes of interest .•• .. .... .. .. .••... • •
Loa ns to b rokers and d eal ers for
pu rcha sing or carry ing l

---6,044,603

Total d emand d e posits •• • • •• . • ... • •••••••• ••

500
50,370

Ag ricultural loons, ex clud ing CCC

Total investm ent s •• • • •• ... • .. •• ...•• . ••.. . . .•

Mar. 25,
1970

Total deposits • •••• ••... ••••• •• •••• •• •••••• . • 10,752,463

Fe de ral fund s sold and securities purcha sed
Other loans and discounts, gross . ... .... .. .. ....

Fe b. 24,
197 1

517,700
6,666,500

ASSETS

Item

-

~

Mar. 24,
1971

11,43 4
2,05 4
3,215
1,140
260
1,11 8
10
1,089
893

-

1U1J
=1,406
8,61 1
7,186

17,203
1 184
1'088
1:73 8

::::::-1 J@

e - Estimated

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

--'

Mar. 24,
Feb. 24,
Mar. 25,
______________ em
It~________________~97~______~19~7~_______
1~1
1
~
Total gold certificate rese rves . ....... . .... ..
Discounts for member banks . • • • • • • • • • • • • • • •
Other discounts and advances.. . . . . . • • • • . . • •

U.S. Governm ent securities . .. . . • • • • • • • • • • • • •
Total earning a ssets. • • • • • • • • • • • • • • • . • • • • • .
Member bank reserve d e posits ...... ...... . .
Federal Rese rve not es in actual circulation . . • • •

45 1,474
0
0
2,888,598
2,888,598
1,521,424
1,912,988

580,081
0
0

2,807,527
2,807,527
1,558,081
1,892,589

413,71~
1

6 ,9
240
2,

2,40A,6~~

2,468'~59

1,328'526
1,692,

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

BANK DEBITS, END-OF-MONTH DEPOSITS, AND DEPOSIT TURNOVER

Four Southwestern States

~ar

amounts In thousands , seasonally adjusted)
DEBITS TO DEMAND DEPOSIT ACCOUNTS'

DEMAND DEPOSITS'

Percent change

February 1971 from

February

-

January

February

1971

1970

2 months,
1971 from
1970

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

7,136,796
3,226,068
I1,B57,320
891,516
2,237,268
5,993,148
10,245,012
6,8B6,680
2,103,936
6,382,500
498,168
124,535,892
7,242,756
24,004,500
3,252,012
106,455,768
1,061,376
4,449,444
1,838,196
2,061,204
1,635,720
1,448,652
20,289,372
1,120,548
1,570,764
2,300,544
3,143,712
2,538,660

4%
6
23
1
5
-3
9
12
5
7
14
-8
-3
4
1
-4
17
20
10
4
3
4
8
4
20
1
5
5

22%
14
21
-1
9
6
30
11
15
32
11
8
11
13
0
6
18
12
15
-1
-3
14
19
4
6
7
2
12

19%
16
9
-4
6
4
20
6
13
24
9
13
9
13
4
12
13
10
10
2
-5
14
14
4
2
5
2
9

$ 242,179
85,045
250,767
37,271
99,999
166,113
323,964
238,324
84,496
286,212
33,094
2,304,683
245,335
671 ,660
114,009
2,628,971
42,967
167,124
105,365
130,448
94,611
71,613
664,724
67,273
72,984
99,531
117,884
122,569

29.9%
36.5
45.B
23.2
22.1
37.0
31.3
28.2
25.8
22.4
15.4
55.5
30.1
36.0
27.9
41.4
25.2
27.4
17.B
15.7
17.1
20.5
31.0
16.7
21.9
23.6
26.8
21.0

29.5%
33.8
37.3
22.1
20.3
38.7
2B.0
24.7
25.6
21.2
13.9
62.0
30.7
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

25.7%
33.4
42.8
25.2
21.5
35.6
29.1
26.2
25.4
24.4
14.8
54.5
28.7
34.2
29.4
41.3
23.1
27.0
16.6
15.6
22.0
18.9
2B.7
18.3
21.4
24.0
27.3
19.6

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

$366,407,532

-2%

10%

12%

$9,569,215

38.B%

40.2%

38.2%

Standard metropolitan

statistical are a

ARIZONA, Tucson

LOUISIANA, ~anr~~:::::::::::: :::::::::::::::::::::
NEW
hrevepart ..............................
TEXAS~EX~CO. Roswell' ..............................
. Abilene

Arnarilld································ ·· · .

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

Austin
B · ···· ·· .. •··· ...... · .... ·· ...... ·· ....

Beaumont· Port Arlhur·Orange •..••..•.•....•...•
Crownsvllle.Harlingen.San Benito • •• . ..... ••... ...

C~~~~~n~~ri sti ••• .. •• • ••.••• •••••••• •• ••••••• •

~E:~~i~':' ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~
Tex a s City . . ..... ................. ..

Houston

~bk~~k·:·.: ::::::::::::::::::::::::::::::::::
M~dl en. Pharr·Edinburg ••..•••• • •. •••••.. ••••••

fa~e~~:~I'~::........... .. ......... ,...........
:
::: :: ::::: ::::::: :::::: ::::::::

Sh:rm~~~~o

Tcxarkan en lson ..•...........•.•••••...•....

Tyl

a (Te xas.Arkansas) • .. ••• •••• •• ••• • •• ••

~~i~t~: ~~Iis:.

Totol_28 centers

~
'Co~~~~t~ of

Annual rate
of turnover

1971
(Annual·ra te
basis)
$

February 28,
1971

February

January

1971

1971

Fe bruary

1970

Individuals, partnerships, and corporations and of states and political subdivisions
asls

VALUE OF CONSTRUCTION CONTRACTS
(Million dollars)
January-February
February

BU ILDING PERMITS

......

Area and type

VALUATION (Dollar amounts in thousands)
Percent change

Feb. 1971
from

NUMBER

Nonbullding con struction • • ••
2 months,

Feb.
1971

~

2 mos.

February

2 mos.

1971

1971

1971

Jon.
1971

Feb.
1970

1971 from
1970

918

1,275

9,242

$ 13,541

ItS

t74

68

65
440

190
B85

1,16B
4,341

3,071
6,B02

-39
76

24B
256

45
102
474
140
59
812
1,662
26
428
374
47
3,544
30
130
57
66
73
63
1,169
62
35
19B
61
- II,OBO

81
193
B54
255
143
1,650
3,293
62
824
747
119
6,959
108
247
108
129
130
117
2,472
135
76
367
122

295
5,308
11,970
814
239
5,197
20,514
228
12,258
5,091
537
63,463
447
3,184
684
397
795
1,646
7,356
663
1,104
1,022
799

595
6,432
26,784
1,563
619
9,287
43,954
702
19,825
9,420
2,498
100,310
1,914
8,921
940
939
1,052
1,996
13,OBB
1,555
1,908
2,315
1,9 19

-2
372
-19
9
-37
27
-12
-52
62
18
-73
72
-70
-45
167
-27
209
370
28
-26
37
-21
-29

-70
297
141
70
10
32
10
-70
183
-39
29
86
-23
-51
443
_4
150
-38
51
-79
-43
12
124

-69
-58
101
37
-3
71
37
-25
22
-42
144
43
148
19
211
-45
91
-39
29
-55
-11
41
203

21,541

$158,762

$281,950

29

51

26

$

Monroe. We st

Sh~~nroe •••••
TEXAS eport •• . •
Abilene
" .. arlll 0 • •••. •
Aust' .. •••••
Bea~~' • • •
B
ant ••
crownsville '"
0

0

0

0

Christi::

D enh~'
EI Pa s n.......
Fort W~;ti.··· ·
~a l v.ston • •••
Ousto
0

.

.

0

....

••

•

•

tared n ••.•..•

Lubb \ . .....
Midl~~d"'" •

Odessa····o •

Port Arti,~"'"
SO" Ang er' " .

~hn Anton~""
Te:~~kn . • . '.::
ato

1970

1971

1970r

5B4
275
19B
112
4,993
1,81 8
1,654
1,521

546
225
227
94
4,383
1,631
1,711
1,041

553
290
173
90
4,974
2,045
1,693
1,235

1,130
501
424
205
9,376
3,455
3,362
2,559

1,123
401
386
335
9,870
2,8B4
4,296
2,689

Nonresidential building .• • .
Nonbuilding construction ••••

Arizona, Louisiana, New Mexico, Oklahoma, and Texas
r - Revised
NOTE. - Details may not add to totals because of rounding.
SOURCE: F. W. Dodge, McGraw-Hili, Inc.

1

TUCson

LOUISI AN~"' " •

W

UNITED STATES ............
Residential building •• •• •.•

December

1971

-10
1

ARIZONA

D~~kuS

FIVE SOUTHWESTERN
STATES' .............. • •
Residential building ••.••••
Nonresidential building ••••

January

1971

ana •.••

Wlchlt~'F" " •
ails.. .
TOlol_26
~s ...

GROSS DEMAND AND TIME DEPOSITS OF MEMBER BANKS

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

Total

city bonks

Country
bonks

1969. February ...
1970. February ...
September.
October •••

10,328
10,256
10,65B
10,684
10,843
11,271
11,532
11,272

4,734
4,625
4,8B5
4,860
4,899
5,161
5,236
5,118

5,594
5,631
5,773
5,824
5,944
6,110
6,296
6,154

Reserve

November .•
December • •

197h January ....
February ...

TIME DEPOSITS
Total

city banks

Country
bonks

7,707
7,145
B,088
8,317
8,622
8,825
9,038
9,299

3,091
2,554
3,162
3,305
3,476
3,554
3,635
3,689

4,616
4,591
4,926
5,012
5,146
5,271
5,403
5,610

Reserve

DAILY AVERAGE PRODUCTION OF CRUDE OIL

INDUSTRIAL PRODUCTION

(Thousand barrels)

(Seasonally adjusted Indexes, 1957-59

January

Decemb er

1971p

1971

1970

February
1970

181.3
200.8
200.2
201.3
136.9
271.1

181.1
200.5
203.4
198.6
137.0
271.1

179.5r
196.4r
202 .1
192.7r
138.8r
271.2r

179.5r
202.3 r
220.4r
190. 2r
132.2r
258.3r

164.8
162.5
157.9
168.2
138.1
244.0

165.4
163.2
158.1
169.6
139.2
242.2

164.4 r
162.3r
156.0r
170.1r
138.2 r
240.0r

Area and type of ind ex

Area

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

New Mexico ............ .

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

Gulf Coast ••.•••••••••
West Texas ..•........
East Texas (praper) • ••. •
Panhandle • • •• . ........
Rest of stote •• •••••.•••

UNITED STATES • • •.••..••..

January

February

January

February

1971

1971

1970r

1971

1970

7,278.3
2,792 .1
343.0
601.1
3,542.1
741.9
1,659.2
235.7
72.7
832.6
9,968.2

7,296.0
2,760.8
342.9
641.5
3,550.8
737.2
1,669.4
239.0
78.8
826.4
10,019.8

6,785.9
2,372.0
366.2
619.2
3,428.5
692.3
1,628.3
193.6
81.8
832.5
9,559.7

----------~--------------~-------------------------

TEXAS

Total industrial production . .....
Manufacturing • ......... ...• ...

- 0.3%
1.1
.0
-6.3
-.3
.6

-.6

-1.4
-7.8
.8
- .5%

7.3%
17.7
-6.3
-2.9
3.3
7.2
1.9
21.7
-11.1
.0
4.3%

--

Fe bruary

Percent change from
February

=100)

Durablo ....... ..... ..... . . . .
Nonduroble • • •.. • ....... •• . ••
Mining ••..................... .

UtJ1ities •••••••..•.. .• •• • ...• ••
UNITED STATES
Total industrial production . . ....
Manufacturing • •...• ... ... ... ..

Duroble • •••. ....•..•..• • . • •.
Nondurable . .. .... ....... •...
Mining ....................... .
Utilitie s . •. .. •. .......... ..•. . .

r - Revised
SOURCES: Am e rican Pe troleum Institute
U.S. Bureau of Mines
Federal Reserve Bank of Dallas

NONAGRICULTURAL EMPLOYMENT

Five Southwestern States'

TOTAL OIL WELLS DRILLED

---

Percent change

Number of persons

Feb. 1971 from

February

Type af employment
Total nonagricultural
wage and salary workers .•

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

Construction • ••••••••••
Transportation and
public utilities • ..•....

Trade ••• ••• ••••••••.•
Finance . ... ... .... ... .
Service •• . ••• •........
Government . •....•.•..

January

February

1971p

1971

1970r

Jan.
1971

Feb.
1970

6,259,100
1,114,300
5,144,800
228,600
374,800

6,255,200
1,119,800
5,135,400
230,100
375,000

6,234,600
1,177,900
5,056,700
230,100
374,600

0.1% 0.4%
-.5 -5.4
.2
1.7
-.7
-.7
-.1
.1

448,300
1,459,300
323,900
1,003,600
1,306,300

448,200
1,467,400
322,500
999,800
1,292,400

445,800
1,424,200
314,100
990,500
1,277,400

.0
-.6
.4
.4
1.1%

.6
2.5
3.1
1.3
2.3%

Area

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

Offshore . • .•..• • .•• •••
On shore ............. .
N ew Mexico . .. ......... .

Oklahoma •.•.••.• •. ... •.
Te xa s ... ... . •. ........ .

Offshore • •••••••..•.. •
Onshore .......•..... .

UNITED STATES •....•••••..

growth and could curtail next
year's citrus crop.
Credit at weekly reporting banks
in the Eleventh District rose more
than usual in the four weeks ended
March 24. This rise was despite a
smaller than normal inflow of
deposits. Banks financed most of
the credit expansion by reducing
their sales of Federal funds.
The rise in bank loans was substantially less than in comparable
periods of other recent years.
Considerable strength was evident,
however, in demands for real estate
loans, security loans, and loans to
financial institutions other than
banks. The expansion in real estate

First
quarter

1970

1970

Percent
change

cumulative

1,619
251
111
140
97
351
920
3
917
3,140

1,862
273
75
198
96
386
1,107
1
1,106
3,298

-13.1
-8.1
48.0
-29.3
1.0
-9.1
-16.9
.0
-17.1
-4.8

3,471
524
186
338
193
737
2,027
4
2,023
6,438

SOURCE: American Petroleum Institute

'Arizona, Louisiana, New Mexico, Oklahoma, and Texas
p - Preliminary
r - Revised
SOURCE: State employment agencies

loans probably reflects recent reductions in mortgage rates and
increases in construction activity,
as well as higher labor and material
costs of construction. Security
loans rose contraseasonally, perhaps in response to the large
volume of corporate and municipal
securities marketed in recent
weeks. Loan demand by other borrowers, including businesses and
consumers, was still depressed by
the sluggish pace of economic
activity.
With slack loan demand and the
large volume of securities coming
to market, banks added further to
their security portfolios. Acquisitions of municipal issues accounted

Percent
change

Second
quart er

1970

from 1~69

cu~
_1.7
3.6
55.0
_12.4
_35.9
_4.8
3.9
_20.0
4.0
_3.0

----

for most of the expansion, but
banks also increased their holdings
of U.S. Government securities,
particularly Treasury bills. In coJllparable periods of other recent
years, banks had reduced their d
holdings of Government issues an
moderately increased their holdings of other securities.
Demand deposits declined contraseasonally. The small rise in
total deposits was due entirely to
a larger than usual inflow of tiIlle
and savings deposits other than
large CD's. In light of the weak .r
loan demand, banks reduced thel
net sales of large CD's, as well as.
their borrowings from non deposit
sources.