Full text of Review (Federal Reserve Bank of Dallas) : April 1971
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Business Review , '. ,t \ ............ . j • ... "'. ", Bank StructureMarket for Bank Services Changes in Texas Population in TexasWage Differentials Spur Rural-to-Urban Movement '. April 1971 .~ 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 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 1 1 2 2 2 2 1 11 9 13 19 9 2 2 6 5 5 2 4 3 100 56 100 14 36 43 7 15 10 103 130 164 61 70 22 57 22 171 75 113 42 142 37 334 43 20 304 28 90 27 220 386 539 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- 117 111 29 10 16 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 67 20 50 14 37 2 5 7 10 25 12 14 10 50% 50 100 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 ..... . .... . . ..... Mubbock . ......................... 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 Fort War'tI, ' .... . ........ . . . .. . . .. . . .. - ~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 ________________________ 1950 1960 _________________ 1969' ~s ~ta~ti~st~lc=a~la~r~ea~ 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'Slness Review / April 1971 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. of transportation eqroduction . 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 advances over a year befowed ore. ~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) ASSETS und er ag ree ments to rese ll . • • . . . .• . ... ••• ... Other loans and discounts, gross . ... .... .. .. .... Comm ercial and Industrial loons •• .... • • . ...•• 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 . ••.• .. 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••.. • •.. • •..• · ••• • •• • ·· ••• •• • • Other loans • • •••• •• ••• • ••• • ••• • ••• • ••• •• • • 681,027 6,601,660 328,350 5,994,269 Mar. 24, 1971 LIABILITIES Individuals, partn ership s, and co rporation s• • . . States and political subdivi sion s . .. •...... . . U.S. Governm ent ....... ... ..........•• . . 119,010 106,206 Bonks In the Un ited States • •. .••••• • •• • •••• 500 50,370 500 43,928 500 39,459 1,565 435,711 1,645 429,629 1,230 387,955 212,5 16 48t,079 664,941 18,761 11,937 733,907 189,818 438,467 653,373 13,832 10,386 733,026 132,845 342,679 587,795 10,222 10,329 729,8 16 0 7 47,807 3,016,930 0 790,263 2,893,075 425 644,289 2,484,670 Trea sury bills ••••••• • •• •• •••••• • •• •• •••• 998,515 148,896 0 978,602 123,093 0 Trea sury certlAcates of ind ebtedness •••••••. Trea sury notes and U.S. Gove rnment bond s maturing: Within 1 year ••• •• ••• • • • • • • • •• •••• •• •• 1 yea r to 5 years• •• • • .. • •. • • .•• • ...•. • Afte r 5 yea rs •• • •• •• • • ••••• • •• •• •••• •• Obligation s of states and political subdivisions: Ta x warrants and short·t erm notes and bllls. •• All othor • •• •• •• • •• • • • •• •• •• •• • • • • • ••••• ---892,650 44,226 0 149,954 531,260 168,405 174,252 512,003 169,254 166,647 598,375 83,402 67,782 1,718,815 32,882 1,646,574 5,906 1,458,205 103,555 128,263 1,157,074 954,991 88,575 559,357 7,237 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 8,672 457,731 460,119 506,796 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 •• •......... U.S. Governm ent (including postal saving s)• • • • 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 •••• .. .. .... Other liabilities ••••.. • • ••• ••• •• • . •• ••• ••••••• Reserves on loans• • .• ... . •. .. . •• .• . .•••... • .. Rese rves on securities • .. . ••. ....••. . •• • •...... Total capital accounts . ••• . . • ... •• •• .. ..• • •• .. 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 ------13,426,095 13,393,976 11,691,630 RESERVE POSITIONS OF MEMBER BANKS Eleventh Federal Reserve District Currency and coin •• . • ••••• .• Re quire d rese rve' • • ••••. • ••.. • • Excess reserves ••••••••••••.• •• Borrowings ••••••••••••• • • • • • • Fre e reserve, •• • ••• • • •• • • ••••• 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••• • •••••••• • .• •• 10,735,048 ~ 8 866,268 5,549,3~~ 4,150,890 339,355 87,833 1,347,025 3,909,9 258,7 89 142,6 10 1,129,5 44 2,1 58 26,700 90,642 4,707,860 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 1,100 12,685 1,1 00 1,020,752 75,880 377.003 136,638 19,934 1,043,425 999,089 68,22 2 401,159 138,439 19,471 1,032,548 ---13,393,976 3 051 24:5~; 919 840 8 1,6 25'22 '74 740'~23 I, 4 15,31 1 3,2~~ 1,3 978,O~~ 274,4 437,455 134,8~; 13,2 987,30 3 ---- ~ ~ Eleventh Federal Reserve District (MIllion dollars) ...",.,- Feb . 24, 1971 Jan. 27, 1971 Balance s with banks in foreign countrlese ••• • Ca sh Items I~ process of collection • •• • ••• • • . Other a ss ots ••••••••• • ••••••••••••• . • • 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 TOTAL ASSETSe . . . ... . .. . . ......... .. 24,511 24,454 LIABILITIES AND CAPITAL ACCOUNTS Demand deposits of banks • •• • • •• •• • ••••• Other demand deposits •• • • •• ••••• •• • • • • • Time deposits 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 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 Fe b. 25, ~ ASSETS ... ... .. .. ... .. .... ...... . (Averages of dally figures. Thousand dollars) With Fe d eral Reserve Bank, ••• Mar. 25, 1970 6,067,081 4,111,296 330,823 166,128 1,328,883 TOTAL LIABILITIES, RESERVES, AND CAPITAL ACCOUNTS •••••• •• •• •• •• • •• •• 13,426,095 Cosh In vault • • •••• • • •• •••• ••• •••••••••• Balances with banks in the United States •• • • Total rese rves held •••••.••••••• Fe b. 24, 1971 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 • •• • • • .• • ••• • .••• • RESERVE CITY BANKS ---6,044,603 Total d emand d e posits •• • • •• . • ... • •••••••• •• 3,000,519 - --- Total U.S. Gov ernm ent secu rities .• •. . •• •.. •• .. TOTAL ASSETS •••• • ••• • •••• ••••• •• •• ••• • 517,700 6,666,500 117,426 ce rtiflcotes of interest .•• .. .... .. .. .••... • • Loa ns to b rokers and d eal ers for pu rcha sing or carry ing l not consolidated) •••• • •••• • •••• •• •• •• •••• • • Mar. 25, 1970 ----3,177,783 --3,189,980 Ag ricultural loons, ex clud ing CCC Total investm ent s •• • • •• ... • .. •• ...•• . ••.. . . .• Fe b. 24, 197 1 Total deposits • •••• ••... ••••• •• •••• •• •••••• . • 10,752,463 Fe de ral fund s sold and securities purcha sed Item - ~ Mar. 24, 1971 11,43 4 2,05 4 3,215 1,140 260 1,11 8 10 1,089 893 - 1=U1J 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, ______________It~ em________________~19~7~1______~19~7~1_______~ 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 ,9240 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 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 -10 1 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 ARIZONA $ Monroe. We st Sh~~nroe ••••• TEXAS eport •• . • Abilene "Aust' .. arlll 0..• •••. •••••• 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 . • . '.:: W ato UNITED STATES ............ Residential building •• •• •.• Nonresidential building .• • . Nonbuilding construction •••• January December 1971 1971 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 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~"' " • D~~kuS FIVE SOUTHWESTERN STATES' .............. • • Residential building ••.•••• Nonresidential building •••• February 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 Percent change from 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 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 ----------~--------------~------------------------- 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 Area and type of ind ex 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 Type af employment Total nonagricultural wage and salary workers .• Manufacturing . .......... Nonmanufacturing . ••..... Mining . • . . . . . . . . . . . . . . Construction • •••••••••• Transportation and public utilities • ..•.... Trade ••• ••• ••••••••.• Finance . ... ... .... ... . Service •• . ••• •........ Government . •....•.•.. Feb. 1971 from February 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.
@FedFRASER