Full text of Review (Federal Reserve Bank of Dallas) : April 1973

The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.

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

Farm Exports-

Wheat Trade Rises to Record High
On Strength of Export Demand
Wheat exports are headed for a
record 1,150 million bushels-520
~llion more than last year. That
will mean the United States is supplYing nearly half the world's
:Vheat trade and nearly all the
lllcrease in the market since last
Year.
t Two factors have been at work
o bolster U.S. shipments since
this ~rop year began last July.
One IS the surge in demand from
the Soviet Union and Mainland
;hina that is carrying world wheat
rade to a record 2.5 billion bushe~-200 million more than the preylOUS record set in 1965. The other
~ the unique ability of the United
tates to satisfy this demand.
1 The Soviet Union, the world's
seadi~g wheat producer, normally
upplies enough wheat to satisfy
lllost of the import demands of the
entire Communist market. But
~ro~uction fell sharply in the
,:vlet Union last year. Inasmuch
1 ~he recent opening of trade reatlons with the Soviets and Chi~ese gave American farmers their
rst meaningful
access to Comlllu
.
t nlst markets, these markets
~ned to the United States as the
o Ycountry with stocks large
~~ough to accommodate the addilonal demand.

tries, in fact, ordinarily account for
95 percent of all exports. And only
four of these-Argentina, Australia,
Canada, and the United Statesconsistently compete in world markets. France usually limits its sales
to European markets. And the
Soviet Union sells mostly to other
Communist countries.
The American position
Ranking second only to the Soviet
Union as a producer of wheat, the
United States is far and away the
largest exporter. Over the past
decade, U.S. production has aver-

aged 1.4 billion bushels a year.
And until the surge in exports this
year, about half that was shipped
abroad.
Although there are year-to-year
swings in the domestic market,
they are usually much smaller
than changes in the export market.
Domestic wheat use is dominated
by a fairly constant demand for
wheat as a food. As the effects of
population growth are almost offset by declines in per capita consumption, domestic food demand
has settled at about 520 million
bushels a year. Annual consump-

Irregularity of USSR ' s net imports
a major factor in world wheat trade
MILLION BUSHELS

600

Wheat in the world

~eat accounts for 11 percent of

is e World's food consumption and
illlsecond only to rice as the most
It portant source of nourishment.
othS grow.n in more areas than any
a er gram crop. And in terms of
e~~eag~, it is the world's most
BnslVely cultivated food crop.
tn ut while wheat is produced altn~st :V0rldwide, most countries
d st Import wheat to meet their
olllestic demands. Only six counnus·
Iness Review I April 1973

-400

~---T---,---.r---r---r---~--~--~---r-

1963

1966

1969

1972

YEARS BEGINNING JULY 1
1972 estimated
SOURCE : U .S . Dep a rtment of Agriculture

1

U.S . wheat production and stocks .. .
BILLION BUSHELS

2.5-------------------------------------------2.0

1.5

1.0

.5

o
1966

1963

1969

1972

YEARS BEG I NN I NG JULY 1
1972 estimated
SOURCE : U .S . Department of Agriculture

WORLD SHIPMENTS TO MAJOR WHEAT MARKETS IN SELECTED YEARS
(Years begi nning July 1. Million bushels)
Mark el

Western Europe
Eastern Europe ,
USSR ,
China ", ' . . . . . . . .
Japan , , . .. .. . . .. .
All others , ,
World
'

1960

1965

1970

1972e

382.1
198.4
11.0
47.8
99.2
841.3
1,579.8

227.8
158.0
253.5
213.1
139.6
1,296.9
2,288.9

426.2
246.2
11.0
128.6
176.4
999.3
1,987.6

356.4
187.4
584.2
220.4
194.7
918.5
2,461 .6

e- Estimated
NOTE : 1. All major markets were net Importers, except the Soviet Union In 1965 a d 1972
2, Details may not add. to totals beceuse of rounding ,
n
,
SOURCES : U.N. Food and Agriculture Organizati on
U,S. Department of Agricu lture

2

tion seldom varies more than 1
percent.
Demand for seed and feed is
somewhat more erratic. Seed usually accounts for only about a
tenth of the domestic market. But
because seed demand is tied to
plantings, it reacts inversely to
supplies.
Feed demand is even more volatile. It is, in fact, the most volatile
component of domestic demand.
Although the market for wheat
as feed is growing, much of its
strength in anyone year depends
on movements in wheat prices relative to prices of other feed grains.
In 1971, for example, a bumper
wheat crop brought a relative drop
in prices of wheat, and wheat feeding reached a record high of more
than 280 million bushels. In the
early part of the 1960's, wheat
feeding had averaged only about
40 million bushels a year.
This secondary market is important to the primary domestic
market because of the floor it keeps
under wheat prices. When wheat
supplies build up and prices decline, livestock feeders use more
wheat. This helps support prices
by preventing the accumulation of
excessive stocks. But the feed market is also important to the nation's flexibility in responding to
sudden increases in foreign demand. As prices rise and feeders
shift out of wheat, additional supplies are freed for export.
The general stability of America's domestic market stands in
sharp contrast to the volatility of
its export market. Although exports usually account for about
half of all U.S. wheat sold in any
given year, the proportion varies
widely, moving within a range of
40 to 60 percent. In recent years,
exports have varied from 544 roillion bushels in 1968 to the 1,150
million estimated for this year.
The large and often abrupt
shifts in export demand result
from the combined influence of a
number of factors-some internal,

. .. reflect changes in export demand
BILLION BUSHELS

2.0 --_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __

1.6 _

.8

1963

1966

1969

1972

YEARS BEGINNING JULY 1
1972 estimated

SOURCE: U.S . Department of Agriculture

-SOll1e external, and many not necessarily economic. The record ship~ents this year, for example, are
~ns~parablY linked to the recently
C~leved trade agreements with
t Ina and the Soviet Union. But
hhese agreements alone would have
s a~ little effect on U.S. wheat
klPll1ents had it not been for the
Sort crop in the Soviet Union and
s~n stocks in Canada, Australia,
an Argentina.
New Sino-Soviet market
~a.inland China and the Soviet
k nlon are almost totally new mar1'~~ ~or American wheat growers.
th IS IS the first year in nearly
Stree decades that the United
ates has shipped any large
arnc~~t of wheat to either country.
in . ll~a has been importing wheat
lit:lgmficant amounts for only a
w Ifdover ten years. It entered the
or market in 1961, buying just
nus'
Uless Review

I April 1973

over 90 million bushels. Chinese
ket in that country has swung in
imports reached their peak of 235
recent years from net exports of
million bushels in 1966. Since then, over 250 million bushels in 1970 to
imports have ranged from about
imports of an expected 515 million
100 million to 180 million bushels
this year. That is a swing of about
a year. This year, they are ex770 million bushels in just three
pected to approach the 1966 peale . years.
Because of its enormous populaDemand in the Soviet Union
tion, China has the world's largest
varies with domestic production.
absolute need for food. But it is
Total acreage planted to wheat has
also a major grain producer and
been on the decline since the midhas the potential to produce even
sixties, but the reduction in acremore. This, together with a policy
age has been more than offset by
of trying to achieve industrialigains in average yields.
zation despite very limited foreign
The Soviets have been shifting
exchange earnings, suggests that
production to the eastern part of
Chinese demand will probably not
the country, increasirig their plantincrease much over levels of the
ings of spring varieties. The
past few years. American farmers,
weather is more uncertain in that
however, can hope to capture at
area, however, and with the change,
least a share of this market.
yields have varied significantly. In
Most of the surge in wheat trade fact, only three crops in the past
has been due to increased demand
decade have exceeded target levels.
in the Soviet Union. But Soviet
Three have been severely short. .
demand is highly erratic. The mar- Because of these uncertainties of
3

-Main foreign competitors try to pace
production to changes in wheat prices . . .
DOLLARS PER BUSHEL

BILLION BUSHELS

2 . 7 - - - - - - - - - - - - - - - - - - - - - - - - 1.8
(QUARTERLY AVERAGES)

SELECTED PRICE

-

1.8-

1.2

.9-

o
1963

1966

1969

YEARS BEGINNING JULY 1
1972 estimated for production
NOTE : Prices are for U .S. No . 2 Hard Winter Wheat,12 percent,
at Rotterdam (cost, insurance,and freight).
SOURCE : U .S. Department of Agriculture

4

1972

domestic supply, the Soviet Union
could become a frequent, even
regular, importer of wheat.
Without the increase in Chinese
and Soviet demand, 'e~ports from
the United States this year could
have dropped to the lowest level
in a decade. Until the Soviet grain
agreements, the outlook was for
world wheat trade to be less than
last year. Soviet entry into the
market drove prices sharply upward, and higher prices have affected the import intentions of
other countries.
The market outside China and
the Soviet Union is still the largest.
And any long-term consideration
. of export demand must take this
large market into account.
Other export markets
The largest market outside China
and the Soviet Union is made up of
the less developed countries-including most of those that are diet
deficient. The other major markets
are Europe (which is still effectively divided between the East
and West) and Japan.
Demand in less developed countries is subject to sharp fluctuations resulting mainly from
changes in concessional shipments.
Based on special subsidies to recipient nations, these shipments
reflect the export policies of surplus countries, rather than any
change in demand in receiving
countries. The high imports into
this market in 1965, for example,
coincided with record U.S. conceSsional shipments of about 570 million bushels.
With populations increasing
faster than their production of
food, less developed countries continue to have a large potential demand for food imports. But lacking
the foreign exchange needed to
purchase large quantities from
abroad, most of them are trying to
close their food deficit by increasing their domestic production.
The future trade positions of leSS
developed countries, then, depend,

.,
I

on the one hand, on the success
of individual countries in increasing their agricultural output and,
on the other, on their success in
broadening their economic base.
Increases in domestic production
Win reduce their dependence on
imports. And a broader economic
base will reduce their dependence
on concessional sales.
But as things are now, the commercial side of this large market is
highly sensitive to world wheat
Prices and the concessional side is
highly sensitive to policies of exPorting countries. With wheat
Prices high, import demand in less
developed countries has been revised downward, even though most
of the countries had smaller wheat
and rice crops this year.
Where exports to less developed
cOuntries are largely based on concessional sales, Europe and Japan
are major commercial importers.
Japan is the single most important
market for American agricultural
products. As the Japanese expand
their nonagricultural production
and their foreign exchange grows,
they tend to buy more agricultural
prodUcts abroad. But the grain
component of this demand is not
apt to increase. And as the popula~lon of Japan is fairly stable, the
otal volume of agricultural prod~cts Americans can expect to ship
o that country is limited.
. Western Europe is also highly
l~portant to Americans, but pur~ ases have been tapering off for
hhe :past ten years as production
/s Increased in Europe. ProducIOn alone, however, does not acunt for American exclusion from
estern Europe.
t" 'I'n his market is divided essenIa Y
no
. between the European Ecot .lllic Co:mmuruty and the counbes outside. France, as one of the
l11ajor surplus producers, has been
bUPPIYing most of the wheat
t OUght within the EEC. Most of
he COuntries outside the EEC are
net·
b l~porters. Together, they have
een Importing about 180 million
llu'

... which, in turn , are subject
to changing world supply-demand situation
BILLION BUSHELS

2.5

1.5 -

1.0

.......,....--r--.,.---r----r--.--,--,---,ir
1963

1966

1969

1972

YEARS BEGINNING JULY 1
1972 estimated
SOURCE : U.S . Department of Agriculture

W

SlUess Review I April 1973

5

bushels of wheat a year. Increasingly, however, shipments have
come from countries in the EEC.
This arrangement is due primarily to the EEC's adoption of a common agricultural policy that sets
wheat prices in member countries
well above world prices, imposes a
levy on foreign grains high enough
to bar imports of wheat, and supports movement of surpluses into
world markets. The results have
been threefold-to stimulate wheat
production within the EEC, to
change EEC countries from a region of net importers to one of net
exporters, and to capture an increasing share of the European
market outside the EEC.
With the United Kingdom now
also becoming part of the EEC,
this policy is apt to cut American
growers off from still more of the
wheat market in Europe. Not only
will British farmers have the same
incentives as their continental
counterparts to produce more
wheat, but British consumers will
have incentives to keep their purchases within the EEC.
Eastern Europe has not been a
dependable market for American
wheat. Import demand is fairly
constant, but supplies are usually
furnished from the Soviet Union.
The United States, along with
France and Canada, sold some
wheat in Eastern Europe in the
midsixties, when Soviet production
was off. Shipments fell, however,
as Soviet production rebounded.
With the Soviets producing less
wheat again this year, other
sources have again become important in Eastern Europe. But the
situation is not apt to last.

From 1965 to 1969, Canada produced an average of more than 680
million bushels a year. Production
was cut back, however, to about
half that amount in 1970 and an
average of only about 530 million
bushels in 1971 and 1972. With
prices up, more acres are being
planted. Production is expected to
increase at least 70 million bushels
in the new crop year beginning
July 1. Some estimates show output up 200 million bushels. That,
however, will still be close to 100
million bushels less than the record
set in 1966, when Canada harvested 827 million bushels.
Argentina has been shifting to
feed grains for several years, allowing its wheat production to
drift downward from a record harvest of 414 million bushels in 1964.
Current estimates indicate a more
than 50-percent increase in wheat
production this year, however, that
will push the harvest to about 300
million bushels.
Still further increases in output
can be expected if the market remains strong. Argentina is particularly well situated to make effective responses to the market.
Because seasons in the Northern
and Southern Hemispheres are reversed, Argentina has time to adjust its production to planting
decisions made in France, Canada,
and the United States.
Production in Australia has
been hampered by prolonged
drouth that, along with acreage reductions, has cut the current crop
to just over 200 million bushels.
That is only about half the average
production from 1966 to 1970.
With improvements in the
weather, however, Australia, like
Competitive outlook
Argentina, would be favorably sitWheat stocks in Canada, Argenuated to respond to the new world
tina, and Australia are lower than
demand by sharply increasing its
usual this year, giving Americans
plantings. And such an increase
some advantage in world trade.
could be significant. In 1969, the
Like the United States, however,
Australians harvested a record 655
these countries are capable of
million bushels.
rapidly expanding their production
I t is doubtful that the French
as prices rise.
could make any major gain over
6

the record crop of an estimated
650 million bushels they harvested
this year. But with the United
Kingdom part of the European
Economic Community, British
growers could have new incentives
to increase their production. The
inclusion of this crop could amount
to a significant gain in production
in Western Europe.
Altogether, exporting countries
-excluding the United States and
the Soviet Union-could easily increase their production by 350 million bushels. And if conditions
were favorable, twice that amount
would be possible.
Overview of wheat
The current situation in the world
wheat market is similar to that in
the early 1960's. China, which had
a setback in wheat production in
1961, entered the market as a
major importer. And with poor
crops in 1963 and 1965, the Soviet
Union switched roles from an exporter to an importer. Transportation and grain-handling facilities
were often strained to the limit.
And the pending implementation
of the European Economic Community's common agricultural policy added uncertainties, much as
the United Kingdom's entry into
the Common Market has now done.
There are several differences
this year, however. Where only
small amounts of U.S. grain were
allowed into the Soviet Union in
the early 1960's and none into
China, normalization of trade with
these countries has allowed the
United States full participation in
the cUfllently large wheat market,
though not without problems.
Unlike the early 1960's, when
most of the increased U.S. shipments were concessional sales, current shipments are largely commercial. As such shipments are tied to
delivery dates, transportation and
facility problems are more important than they were a decade ago.
The most telling difference, hOWever, is the general lack of surpluS

stocks in other major wheatproducing countries. Because of
falling prices in 1971 and early
1972, all the major producing
cOuntries had cut back on their
Wheat plantings.
Although stocks and production
fluctuated considerably in the
early 1960's, Canada, Australia,
Argentina, and France were able
to meet Soviet and Chinese demand. The United States was
~eft with an export market based
argely on concessional sales.
The situation will, no doubt,
change again. If demand holds, all
BlCPorters will find strong markets.
.ut the strength of markets still
~n~es on production in the Soviet
nlOn. This is the area of demand
that has made the difference, now
and ten years ago.
1 Efforts have been made to ana~ze the Soviets' consumer policy
s~ce they started massive pur? ases of U.S. wheat. The shift to
lmports has been broadly heralded
as Signaling a switch in favor of
?onsUmers. But no such switch is
~~dicated in recent Soviet de clarat lons. Objectives of Soviet agriculural policy are apparently still• To acquire the largest supply
of food and raw materials posSible, at the lowest cost
• To strengthen Communism in
rural areas
• ~o be as self-sufficient as posr s~ble in farm production
n hne with these objectives, leaders in the Soviet Union have announced plans for major invest~~nts in farm production, the aim
ellln~ to boost grain harvests and
Ininate import needs.

nu·Slness Review I April 1973

With renewed emphasis on farm
production after the near-failures
of their wheat crops in 1963 and
1965, the Soviets made a remarkable resurgence in wheat production. And although interim needs
must be filled, with Soviet leaders
again emphasizing farm production, another resurgence can probably be expected.
A final accounting of the wheat
situation seems to indicate continued volatility in the world market. The Soviet Union will probably continue importing wheat for
the next few years, partially to
build up stocks against future
shortages. But as its imports are
apt to be irregular, they will be a
major source of change in the
market and continue to provide an
element of uncertainty.
Still, one of the biggest differences from the situation ten years
ago is the change in trade relations
with China and the Soviet Union.
This difference could bear distinctly on the outlook for the midseventies, especially since the
United States is generally more
capable than some of its competitors in responding to changes in
the world wheat market.
-Dale L. Stansbury

7

Public Finance-

Revenue Sharing Funds Assigned
To Capital Projects in Southwest

The Treasury sent more than
60,000 checks to state and local
governments in December. These
disbursements for 1972-a total of
$5.3 billion-were the first payments under the new Revenue
Sharing program.
Under this program, part of the
federal individual income taxes
collected in each state and locality
over the next four years will be returned to the point of collection to
help cover costs of state and local
governments. Amounts will increase each year, reaching almost
$6.5 billion in 1976.
Initial allocations have brought
an additional $508.8 million in expendable funds to states of the
Eleventh District. Nearly half of
that ($247.8 million) went to state
and local governments in Texas.
And close to a fourth ($122.5 million) was distributed in Louisiana.
Of the remainder, $58.8 million
went to Oklahoma, $48.3 million
to Arizona, and $31.4 million to
New Mexico. Together, these allocations represent about 4 percent
of the total revenue of governments in states of the Southwest.
Effects of the program on each
state will depend on the amount
sent to the state and the allocation
to local governments within the
state. But they will depend also on
local budget decisions. And indications in states of the Eleventh
District are that city authorities
are allocating most of these funds
for capital expenditures.
Across states
State allocations are based primarily on the proportion of the
nation's population in each state.
On the basis of a national population of 203 million in 1970, Texas,
for example, with a population of
8

ters and large proportions of their
11.2 million, would receive about
revenue coming from state income
5.5 percent of the revenue shared
the first year. That would be about taxes.
All five states of the District fare
$26 per person-a total of $292
better with the three-factor
million for the state as a whole.
Two other factors are taken into formula. And although many are
borderline cases, so do half the
account, however, to modify this
other states. The remaining states,
strictly proportional allocation.
mostly in the Northeast, do better
One is the state's own tax effort.
using the five-factor formula.
The other is its per capita income.
When allowances are made for
And if a state chooses, two addiall three factors-population, intional considerations can be taken
into account-the proportion of its
come, and taxes-the per capita
population in urban centers and
allocation to Texans drops to
the proportion of its revenue com$22.10. Elsewhere in the District,
ing from state income taxes.
per capita shares for 1972 were
This system of allowing each
$33.60 in Louisiana, $30.90 in NeW
state to choose the formula most
Mexico, $27.30 in Arizona, and
advantageous to it in determining
$23.00 in Oklahoma.
its allocation emerged as a comTax effort-With the threepromise between House and Senfactor formula, each state's genate plans. Out of the long debate
eral tax effort is figured as the net
on revenue sharing, the Senate
state and local taxes collected
came to support a three-factor
during the previous year (or most
formula favoring states where taxrecent reporting year), divided by
payers carry a heavier than averthe state's aggregate personal inage taxload or where incomes are
come for the same period. The
less than average. In the House of
measure, then, is the burden taxRepresentatives, support was for a
payers carry relative to their abilformula based on all five factors.
ity to pay.
Use of the five-factor formula faBurdens are relatively light in
vors states with large proportions
the Southwest, especially in Te~at
of their populations in urban cenand Oklahoma, which rank fortlet
REVENUE SHARING ALLOCATIONS, 1972-DISTRICT STATES AND NATION

and forty-fourth in per capita
taxes. Although high, perhaps,
compared with Ohio, which has the
!owest tax burden, the load is light
III all five southwestern states comyared, certainly, with that in New
. ork, where the ratio of taxes to
lllcome is the highest in the nation.
. With state and local taxes claimIng about 9.2 percent of the personal income in Texas and Olda?oma, the burden in these states
IS well below the national average
of 11.1 percent. And in the other
three states of the District, the
urdens are only slightly higher11.7 percent in Louisiana, 11.8
Percent in Arizona, and 11.9 percent in New Mexico.
Several factors can contribute to
state's showing a comparatively
ow tax effort. By holding their
Outlays down, state and local governments can, of course, impose
fewer taxes or collect taxes at
~ower rates. Spending varies widely
t?e Southwest. On a per capita
aSlS, general expenditures by
~ta.te and local governments in
nZona and New Mexico are usually well above the national average. But outlays are usually below
iverage in the other three states.
n Texas, for example, per capita
e:x.penditures for the most recent
~~ihrting period were about fours of the national average.
I State and local governments can
a So rely to some extent on other
sources of income, such as license

f

b

fees not collected as taxes or profits
from public-owned utilities. In
Texas, for example, oil and gas production from state lands provides
considerable support for higher
education. Such sources of revenue
help relieve the need for greater
tax efforts without implying lower
levels of expenditures.
State and local governments use
grants-in-aid under several federal
programs to support expenditures
with lower tax efforts. And to the
extent that they have relied on
these funds to reduce their tax
burden, they also receive proportionately less under the Revenue
Sharing program. Except for
Texas, where grants-in-aid are
considerably less than the per
capita average for the nation as a
whole, states in the Southwest rely
heavily on such funds.
Deficit spending can also be used
to bridge the gap between expenditures and taxes. The per capita
debt in states of the Districtwhile high compared with that in,
say, Idaho, which had unpaid obligations of only a little over $200 in
1970-is well below the $1,300 owed
in Alaska, New York, and Delaware. Only in Louisiana has the
debt of state and local governments in the Southwest risen
above the national average.
The situation could change in a
few years, however. During the
most recent reporting period, taxpayers in Arizona increased their

'indebtedness just as fast as those
in Louisiana. And the per capita
debt in Texas rose nearly as fast.
Relative income-The income
factor used in allocating Revenue
Sharing funds is calculated as the
ratio of per capita income in the
United States to per capita income
in each state. If per capita income
in a state were exactly equal to the
national average, the relative income factor would be 1. If it were
above the national average, the
factor would be less than 1, reducing the state's share. Conversely,
if it were below the national average, the factor would be more than
1, increasing the state's share.
Because personal incomes are
comparatively low in the Southwest, all five states of the District
benefit from income factor adjustments. The extent of the benefit
varies considerably, however, ranging from only a slight gain in Arizona, where incomes approach the
national average, to gains of more
than a fourth in New Mexico and
Louisiana.
Within states
Allocation within states is broken
down by layers of government, the
state receiving a third and the
Treasury distributing the remainder to units of local government:
Allocations are made to counties
on the basis of the three-factor formula. County governments receive
a share of the allocation propor-

6~RSCAPITA

SOURCES OF FUNDS AND GENERAL EXPENDITURES
TATE AND LOCAL GOVERNMENTS, FISCAL 1971

-----------------------------------------------------------Major sources of funds
Federal
Other
grantsgeneral
Taxes
In-aid
revenue

____ Area

Arizona
LOUisiana
New MeXico
Oklahoma
Texas
.... . .
United States" " .

--SOURCE

llu .

."

$482
384
397
329
351
467

$132
135
216
150
111
129

$130
141
166
135
114
117

General
expenditures

$735
685
727
635
577
712

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

smess Review I April 1973

9

REVENUE SHARING ALLOCATIONS, 1972-LARGEST CITIES

Area

Eleventh District cities
Houston . '
Dallas . .. . .. . . .... . .... .
San Antonio ... . ... . .. . . .
Fort Worth . . .... . ...... .
EI Paso . . . ... . . . ... . . . . .
Tucson .. ... . .......... .
..... . . ..... .
Austin
Corpus Christi . . .
Shreveport . .. . ... . ... . .
Lubbock . . ....... . .. . .
Totals
10 largest District cities .
10 largest U.S. cities .. .
25 largest U.S. cities . . . .

1970
population
(Thousands)

Allocation
Total

Per capita

1,233
844
654
393
322
263
252
205
182
149

$15,015,942
11,707,710
8,570,932
4,600,536
5,478,268
4,437,180
2,899,086
3,185,662
3,778,106
1,925,472

$12.18
13.87
13.11
11 .71
17.01
16.87
11.50
15.54
20.76
12.92

4,497
22,029
30,748

61,598,894
469,104,046
635,290,662

13.70
21.29
20.66

SOURCES : U.S. Bureau of the Census
U.S. Treasury Department
Federal Rese rve Bank of Dall as

tional to the local taxes they collect, and (again on the basis of the
usual three factors) the rest of the
allocation is distributed to cities
within the county.
As a result of the three-factor
formula in distributing funds to
cities, the allocation to urban areas
may be less than expected when
revenue sharing was first proposed.
Originally proposed to help ease
the financial problems of cities (as
were many of the federal grant-inaid programs), it may be falling
short of the original goal.
Under this formula, a disproportionately small share of federal
funds is assigned to cities-at least
in the Southwest. The eight largest
cities in Texas, for example, account for more than half the state's
population. But these cities (all
among the 100 largest in the nation) receive only a little over a
fifth of the state's allocation and
well under a third of the allocation
earmarked for local government.

Houston has approved a special
budget making full use of the $26
million in Revenue Sharing funds
it will have received through the
. third quarter of this year. While
the budget makes no clear distinction between capital spending and
operating expenses, the essential
character of most expenditures is
indicated by project names. The
city will use $15 million (more
than 55 percent of its allocation)
on street and sewer improvements
and a new solid-waste disposal
plant. A new court building and
renovation of the city hall will talce
$3.5 million. And another $3.5
million has been allocated to acquisition of land for parks and recreation areas.
Dallas has very carefully budgeted the $18 million it will receive
through mid-1973 to accomplish
three purposes-cover short-term,
nonrecurring projects, defer increases in city taxes, and handle as
much capital spending as possible.
Only a little more than $2 million
Across cities
will go for operating expenses, the
Most cities in the District have
remaining 87 percent being slated
begun to allocate Revenue Sharing for capital expenditures (mostly
funds to their various expenditure
the repair and renovation of public
programs. For the most part, howfacilities). Almost $5 million has
ever, the allocations have been to
been set aside to pay interest and
special budgets rather than operprincipal on bonds already sold.
ating budgets. The two largest
This help in servicing its debt will
cities provide cases in point.
ease the city's burden, which in10

creased significantly last year, .
when voters authorized a $172 mIllion bond program.
These decisions, which seem
more or less typical of the budgetary decisions cities have made
throughout the District, are cle~r1y
oriented toward capital expenditures-an orientation that may be
due to the nature of the Revenue
Sharing program as it finally
evolved. While the program imposes few restrictions on the ~o­
cations cities can make, certam
provisions apparently affect ~h.e
budgetary assignments muruclpal
authorities consider wise-.
Problems of uncertainty
One important provision that distinguished the original proposal
from other forms of intergovernmental transfers was lost in the debate over revenue sharing. Under
the original proposal, the grants
would have been tied, though indirectly, to actual federal revenue
receipts. The amount to be shared
would have been 1.3 percent of
the personal income tax base.
One advantage of such an arrangement-other than that it
would, indeed, have been "revenue
sharing"-was that there would
have been a continued availability
of funds and at a somewhat predictable rate of increase. Funds
would have expanded with the eJepected growth in the income base
from the $5.3 billion shared in
1972 to probably about $10 billion
in 1980.
Also, as originally planned, .
funds would not be tied to speCIfiC
programs. They would be unconditional grants for state and local
governments to use according to
their own priorities.
The bill that finally passed Congress, however, was not tied to an
expanding tax base. Nor, in a verY
practical sense, was the allocation
totally unconditional.
No actual restrictions are imposed on the use of Revenue Sharing funds by states-other than the

(

[",

perhaps obvious restriction that
these funds cannot be used as
matching funds for other federal
grants. Nor, except for the same
restraint, are there any restrictions
s~t. on the capital expenditures of
cltles and counties.
Even where restrictions are imPosed on local governments, the
permissible categories of "ordinary
and necessary maintenance and
operating expenses" are so broad
that they pose few real constraints
O? budget decisions. These categorles-public safety, environmental
protection, public transportation,
heal~h, recreation, libraries, social
~~rvlces, and financial administralon-cover almost every operating
expense a city has to cover.
1 But cities cannot be sure how
bong R.evenue Sharing funds will
e avallable-and that is the real
~?nstr~int. Uncertain of the conlnuatlOn of funds now authorized
~nly through 1976 and mindful
hat other federal grants have been
cut back, budget directors in the

Southwest are apparently reluctant to incorporate these funds
into their operating budgets and,
thereby, establish dependence on
funds that could last only four
more years.
Some cities across the nation are
in such financial straits that they
cannot avoid including a large part
of their Revenue Sharing funds in
their operating budgets. Cities in
the Southwest, however, have not
faced such serious financial problems. They seem, for the most
part, to be holding their dependence on Revenue Sharing funds
to a minimum by allocating these
new and possibly temporary funds
largely to capital projects.
-Edward E. Veazey

......
New par banks
The Red River Valley Bank, Bossier City, Louisiana, an insured nonmember
bank located in the territory served by the Head Office of the Federal Reserve
Bank of Dallas, was added to the Par List on its opening date, March 16, 1973.
The officers are: Pearcy V. Hubbard, Chairman of the Board and President;
Ralph C. Merritt, Vice President; and Joel H. Anderson, Vice President
and Cashier.

!he Beltway Bank, Houston, Texas, an insured nonmember bank located
m 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 26, 1973. The
officers are: Lawrence G. Fraser, President; Benny L. Roe, Vice President and
Cashier; and James Hosek, Vice President.

.........
nus·

Iness Review / April 1973

11

Federal Reserve Bank of Dallas
April 1973

Statistical Supplement to the Business Review

-

The seasonally adjusted Texas indUstrial production index advanced
f'4 percent in February, rising to a
1~veI8.4 percent above a year earleI'. Output of manufactured goods
and utilities increased during the
lUonth, but mining declined slightly.
. Manufacturing of durable goods
~ncrease~ 3.~ percent in February,
ed by gams m transportation
eq Ulpment
.
and stone, clay, and
flas~ products. Wood products,
~rll1ture, and fabricated metals
~. so posted sizable gains. ProducIon of nondurable goods-paced by
strong advances in textiles, food,
~pparel, and leather products-rose
}.1 percent over January. Petroeurn refining was the only nondu~llble .goods industry showing a de. ne In output. All manufacturing
Industries reported advances over
Year-earlier levels.
\\1 Mil!-ing activity declined somefh at In February as the production
~ ~atural gas, natural gas liquids,
: crude petroleum fell. Only
petal, stone, and earth minerals
ofsted a gain over January. Output
u.~atural gas and natural gas liqI S declined from February 1972
;s Well. Utilities advanced slightly
lr~rn January on the strength of a
of -Percent gain in the generation
ralelectricity. Distribution of natuearligas was down from both monther and year-earlier levels.
.
b'rotal ~re d'It at weekly reportmg
nks In the Eleventh District rose
11arply in the four weeks ended
de~~~h ~1, in spite of a substantial
th .lne In total deposits. Most of
nae Increase in bank credit was fiin ~c.ed through larger net borrow\ m the Federal funds market.
abl otalloans expanded considerlOa y, primarily because business
n demand was much larger than

I Sh
I
r

I

usual. The recent increases in overall retail sales-especially automobile sales-have resulted in efforts
to rebuild inventories. Continued
strength in District construction
activity and increased costs for
both labor and material in the construction industry were reflected in
a rise in real estate loans. With retail sales increasing, consumer
loans also advanced as borrowers
apparently used bank credit to finance a large portion of their purchases of automobiles and other
durable goods.
In view of the sharp increase in
loan demand, these banks slightly
reduced their investment portfolios. Although holdings of U.S.
Government securities rose moderately-mainly as a result of sizable
purchases of Treasury bills-bank
holdings of other securities declined somewhat.
Total deposits contracted
sharply as demand deposits fell.
Time and savings deposits rose
slightly, however, largely reflecting
a small increase in large negotiable
CD's outstanding. With increased
demand for credit and considerably
lower deposits, District banks moderately increased their borrowings
in both the Eurodollar and commercial paper markets.
Moisture conditions are generally
adequate in all five states of the
Eleventh District, and they are
proving beneficial to planted crops
and pastures. In some areas, moisture is more than adequate. This
abundance promises improved crop
yields, although it is currently hindering field operations somewhat.
Citrus production from the current crop in Texas is expected to
reach 18.1 million boxes, 21 percent
more than last season. Producers

are expecting to harvest 22 percent
more oranges and 19 percent more
grapefruit than a year before.
Farmers in the District states indicated planting intentions on
March 1 that would increase corn
acreage by 5 percent, sorghum and
rice acreage by 10 percent, and soybean acreage by 14 percent. Cotton
acreage is expected to decline about
7 percent.
Cattle and calves on feed in Arizona and Texas on March 1 totaled
2.8 million head, 18 percent more
than a year before but 2 percent
fewer than a month before. February marketings of fed cattle in
Texas were 13 percent greater than
a year earlier but somewhat less
than in January.
Registrations of new passenger
automobiles in Dallas, Fort Worth,
Houston, and San Antonio dropped
3 percent in February. But the
level of registrations was 10 percent
higher than in February 1972. Cumulative registrations for the first
two months of 1973 were 20 percent
greater than for the same period
last year.
Department store sales in the Eleventh District were 11 percent
greater in the four weeks ended
March 24 than in the corresponding
period in 1972. Cumulative sales
through that date were 10 percent more than in the comparable
period a year before.
Seasonally adjusted total employment in the five southwestern states
continued its upward trend in February, edging up 0.1 percent to a
level 4.0 percent above a year earlier. This gain in employment was
accompanied by a decline in the ci(Continued on back page)

CONDITION STATISTICS OF WEEKLY REPORTING COMMERCIAL BANKS

Eleventh Federal Reserve District
(Thousand doll ars)
Mar. 21,
1973

Fe b. 21,
1973

Mar. 22,
1972

Fed eral fund s sold and se curities p urcha se d
und er agreements to resell . .. .... ... . . ..... .
Oth er loan s and di sco unts, gross... ............ .

992,015
9,258,637

1,328,422
8,965,011

1,096,071
7,525,750

4,1 18,359

3,977,488r

3,481,009

States and po litical subdivisions .. ..... .....
U.S. Gov ernm e nt . .. . . . . ...... . ..........

261,912

252,497r

18 1,762

Bank s in the Unit ed Stat es •.... .... . ..•.. ..
Foreign:

1,167
65,321

1,167
73,691

1,160
47,059

bonks, and int erna tional institution s... ...
Comm ercia l banks ... ................. .

4,895
460,008

Certifle d and offlcers' check s, e tc ... .. ... .. ..
Tota l time and savings de posits . . . . .... . ... .. .
Individuals, partn erships, and corporation s:
Saving s d e p osits .. .. .. ........ .. .. . ...

Comm ercial and indu stria l loan s.... .........•
Agricultural loans, excluding CCC
certiAcat es of interest . . . . . . .. .. . . . ... .... .
loans to brokers and deal ers for
purcha sing or carrying :
U .S. Governm ent securities . .. .. ........... .
Oth er se curit ies ..... ..... . .. .. . ..... . .• ..
Oth er loan s for purcha sing or carry ing :
U .S. Governm ent securities . . . . . . .... . .. .. . .
Oth er securiti es •.•..... .... . ... ..... .....
loan s to nonban k Anancial institutions:
Sa les Anance, personal Ananc e, factors,
and other business cre dit compan ies .. . . .. .

Other .. ............. . .... . ........... .
Real es tate loans . .. . .. . . ....... . .... . . ... .
loan s to dom estic commercial bank s. .....•. .. .
loan s to forei gn bank s. . .• .......... . ... . .. .
Con sum e r insta lment loan s.. • .. ..............
l oan s to forei gn governments, ofAcial
institution s, central banks, and international
in5tit ution s.. ..•... ..... ......... .. . .. . .. .
Oth er loans . ••• .. . ....... ... . ... ... . .. .. ..
Total investments .. ...... . .................. .
Total U.S. Governm en t se curities . ..... .... ... .
Trea sury bill s.. . ....... ................ .
Trea sury certiflcat es of ind e btedn ess .. .. . . . .
Tr ea sury notes and U .S. Government
bond s maturing:
Within 1 ye ar . •• .. . .. .. .. .. .. . . .• . . . . .
1 year to 5 years. ... .. ... ... .. •.......
After 5 yea rs .. .............•.. . ......
Obligation s of stat es and political subdivision s:
Ta x warrants and short·t erm notes and bills•••

All other ....... . .... . . ......... . . .. . .. .
Oth er bond s, corporate 5tocks, and se curiti es:
C ertiflcat es represe nting pa rticipation s in
f e d era l ag ency loans . • .. ..........•.. ..
All other (including corporate stocks) ..•......
Cash items in proc ess of collection . . .. .. .. ••.• .. •
Re se rves with Fed eral Rese rve Bank •. . . .. . . .....
Currency and coin ... .. .. .. ... .••.. .. .•. .. . ..
Balanc es with banks in th e Unite d States . ....... .
Balances with banks in foreign countri es . ... • . ....
Oth er a ssets (includ ing Investments in sub sidia ries
not consolidated) .. .. ..•..... .. . ... . .... • ..

Ll AB ll1T1ES

5,477
510,562

6,6 15
507,203

Oth er tim e d e posits .. ..................

179,661
703,332
1,275,408
33,132
54,264
987,851

174,777
677,262
1,252,785
25,172
19,936
973,663

11 7,548
540,882
915,186
21,214
29,056
826,765

0
1,062,191
4,028,821

0
1,022,755
4,03 1,402

0
899,206
3,548,373

1,037,297
237,365
0

1,115,589
191,566
0

---1,059,204
270,624
0

----

123,900
512,314
152,366

152,697
479,356
167,879

199,993
528,577
195,453

255,948
2,472,692

267,465
2,443,668

110,558
2,095,794

10,445
230,532
1,407, 193
839,299
110,814
378,009
15,481

13,503
269,469
1,736,762
552,131
112,827
461,540
13,868

20,3 12
206,120
1,400,022
957,737
100,955
455,287
10,170

713,528

States and politica l subdivisi ons . ..... •... ..
U.S. Governm ent {including posta l savings) .. . .
Banks in th e United States . . . . .............
Forei gn:
Governm ents, offlcia l in stitutions, centra l
banks, and internationa l in stitution s••. . ..
Comm ercial banks . ...... . . ... ..... . ...
Federa l fund s purchas ed and securities sold
under agree ments to repurcha se .. ... ...... . ..
Other liabilitie s for borrowe d mon ey . . . . . . .. ....
Oth er liabiliti es ... . ... . .. ... . .. . .... . .. . .....
Reserves on loan s•. . . .. . ... .. . ...............
Reserves on securiti es . • .. . . ......•. .. .. •.• .. . .
Tota l capita l accounts .. . .. . .. ...• .. • .. .... ...

----

558,6 13

1,200,986
3,325,071
1,735,148
29,208
85,939

1,193,815
3,274,666
1,772,267
30,128
94,685

1,147,537
2,779,547
1,339,892
9,142
92,109

11 ,250
11 ,220

11,050
11,120

25,300
1,100

2,301,75 1
233,358
484,125
159,146
13,452
1,163,9 15

2,238,293
93,516
474,140
159,451
16,768
1,159,718

1,852,580
35,776
430,553
135,912
22,588
1,093,754

17,915,49 1

15,652,97J,

Eleventh Federal Reserve District

Jan. 3 1,

1973

Feb. 23,
1972

loans and discounts, gross . ... . .. .. ... .. . .
U .S. Governm ent obligation s. ............ .
Other securiti es .••• ...................•.
Reserve s with Fed eral Rese rve Bank •.... .. .
Ca sh in vau lt ...• . .. .. . .. ... ... . . .. . . ..•
Balanc es with bank s in th e Unite d States .• ..
Ba lances w ith banks in foreig n countries e .•. .
Ca sh items in proc ess of collection . . ... .•• . .
Other as setse . ... • . . ............ . ......

17,755
2,493
5,723
1,552
309
1,353
15
1,829
1,346

17,425
2,562
5,793
1,484
315
1,360
16
1,753
1,345

14,904
2,462
4,678
1,612
295
1,342
14
1,730
1,04 1

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

32,375

32,053

28,078

LIABILITIES AND CAPITAL ACCOUNTS
1,692
11,828
12,970

1,729
11 ,749
12,585

1,799
10,293
10,957

26,490
2,603
1,057
2,225

26,063
2,73 1
1,053
2,206

23,049
1,877
1,234
1,918

TIME DEPOSITS
U.S.

Tota l

Adlusted'

Government

Tota l

197 1, February, • •
1972, Februory • • .

11,272
11,983
12,118
12,470
12,268
12,320
12,529
12,420
12,619
12,866
12,844
13,439
13,636
13,270

7,778
8,382
8,5 15
8,696
8,530
8,553
8,694
8,824
8,933
9,034
9,321
9,688
9,802
9,5 16

302
281
300
3 14
384
280
289
226
254
264
222
289
317
379

9,299
10,864
10,978
10,938
11 ,075
11,233
11 ,304
11 ,441
11,492
11 ,6 18
12,009
12,26 1
12,501
12,8 11

O ctob er . . .
Novemb er . .
D ecember ••

Feb. 28,
1973

----

Date

July .. .. . ..
August • •• •.
September.

(Million dollars)

e-Estimated

2,989
33,910
99,106
5,394,627

----

~

CONDITION STATISTICS OF ALL MEMBER BANKS

TOTAL LI ABILITIES AND CAPITAL
ACCOUNTSe ••.. . ••.•.•.•.••.•.•..

5,677
41,383
100,706
6,387,73 1

DEMAND DEPOSITS

----

April ... . ..
May ••• .• •

Bo rrowing s . ..... . ... .. . ... . .......... .
Othe r liabiliti es e . . .. ........ ... ... ..... .
Total capital accountse . . ... . . . ... . . .. . . .

2,202
37,172
101,692
6,398,822

Eleventh Federal Reserve Distri ct

June . .. •.. •

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

6,687, 188
4,573,284
451,883
232,1 55
1,293,86 1

(Averages of dally figures. Million dollars)

March •. .. .

Other dema nd deposits • .•...•..•.• •• .••.

4,742,583
644,1,04
269,175
1,197,508

DEM AND AND TIM E DEPOSITS OF MEMBER BANKS

r- Revised

D emand de posits of bank s.. . .... . ...... .

12,081,8 15

7,385,874
4,893,952
729,749
269,413
1,344,994

TOTAL LIABILITIES, RESERVES, AN D
CAPITAL ACCO UNTS . ..... ... . ..... . ... 17,749,005

17,915,49 1

Time de po sits . . . . .. .. ... . .... . ...... .. .

13,773,605

---6,994,436

Total demand d eposits • •.• ... . .. . ... . . ... . . .
IndiYiduals, partn ers hip s, and corporation s... .

Governm e nts, official institutions, ce ntral

718,736

ASSETS

Mar. 22,
1972

Total deposits ............... . .. ... .. . .. . . ... 13,393,258

TOTAL ASSeTS .... . ...... .. ......... .. . . 17,749,005

Item

Feb. 21,
1973

Mar.2 1,
1973

ASSETS

1973.Janua ry .. . .
Februory ...

-

Savlng~

2,235
2,552
2,430
2,640
2,660
2,688
2,714
2,7 17
2,744
2,770
2,786
2,812
2,815
2,817

---------------------------------------------------~---5
1. Other than those of U.S. Government and domestlo commerolal banks, leS
cash Items In process of ooll eotlon

RESERVE POSITIONS OF ME MBER BANKS

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

Mar. 7, 1973

5 weeks end ed
Feb. 7, 1973

4 week. ended

Ite m
Tota l rese rves held . ........ . . .. . .
Wit h Federal Re se rve Bank . •.. ••
Currency and coin ... . ... . .. .. .
ReqUired reserves .... .. .. , . . . ... .
Exc ess rese rv es .. . ......... . . .. . .
Borrowing s . ..... ... . . . . . .. . .. •.
Free reser ves. •.... . .... ... .... .

1,742,461
1,459,789
282,672
1,742,232
229
63,968
- 63,739

1,770,428
1,472,926
297,502
1,748,905
21,523
61,299
- 39,776

1,8 10,06 3
1,549,438
260,625
1,803,750
6,3 13
216
6,097

4 we e ks end ed

Mar. l ,~

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

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

SMSA's in Eleventh Federal Reserve District

-

(Dollar amounts In thousands, seasonally a djust ed)
DEBITS TO DEMAND DEPOSIT ACCOUNTS'
DEMAND DEPOSITS'
Percent change

2 months,

1973

-

Annual rate
of turnover

February 1973 from

February

Standard metropolitan

(Annual-rate

Januar y

Fe bruar y

statistical area

basis)

1973

1972

1973 from
1972

ARIZONA: Tucson •••••. •.••.•......•..•. • ••.•..••• • •
lO UISIANA: Monroe .• .. . ..•...•.•.•. • ...... ..... ••..
NEW
Shreveport • ..•. .....•••...••...........•
MEXICO: Rosw ell' .• ••• • •..••.• • •• •.• • •.•.•••.••

$ 11,758,536
4,519,092
14,835,996
1,047,432
2,908,752
8,518,692
13,441,044
7,972,284
2,664,912
1,334,076
8,040,468
603,792
165,693,804
10,760,148
31 ,605,468
3,515,268
151,694,772
2,273,292
1,270,776
6,972,816
2,939,892
2,524,512
1,970,38 B
2,050,2 12
25,266,948
1,484,808
1,985,292
2,913,792
4,571,376
3,159, 120

32%
23
13
0
17
26
20
19
11
13
13
27
18
23
15
14
16
21
21
26
30
22
14
24
17
18
15
11
25
14

30%
25
21
3
17
23
7
12
13
13
10
30
13
18
14
13
20
24
16
21
19
15
10
21
13
13
12
26
22
9

17%

16%

TEXAS:

~~:~2.i~.: :::::::::::::::::::::::::::::::::::

Beaumont-Port Arthur-Orange ••.. '"

.• ..• ••.....

:rownsvllle.Horlingen.San Benito ... . .............
ryan-Co llege Station . ..... . ..................

J!~~~]1Irri jjjjjjjjjjjjjjjjjjjjjjjjjjjjiii

Ga lveston-Texas City .. .......... .. ............

~~ii~:f~~~~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~

McAllen· Pharr·Edinburg •.•••. . • • .••. •• •••.• ...•

~~:~~;~~~}iiL iii iii iii iii iii iii iii iii iii

J
Texarkana (Texas-Arkansas) . ... . ......... ... .. .

--

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

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

fo tal_30 cen ters •• • ..••.•••••..• .. ...••. . ..•••.• • ••

7%
-2
1
-2
5
5
-4
4
-3
1
4
-7
9
6
I
0
-5
-3
-5
14
3
8
5
12
3
13
5
-18
1
6
2%

$500,297,760

February 28,
1973
$328,727
115,900
303,958
47,827
135,653
210,351
489,145
278,408
113,943
56,914
284,559
40,293
2,951,293
295,072
835,369
127,517
3,308,002
111,878
58,074
211,146
157,830
156,252
95,595
82,370
914,331
78,922
90,067
122,293
157,476
137,396
$12,296,561

February

January

1973

1973

35.9
40.5
49.1
21.4
21.6
40.9
28.5
28.8
23.5
23.6
28.3
15.5
56.8
35.7
37.B
27.4
45.8
20.2
22.0
33.1
18.7
15.9
20.1
24.5
27.7
18.6
22.1
23.8
29.4
22.8

33.9
42.9
48.0
22.4
21.1
38.2
30.0
27. 1
24.8
23.2
27.5
17.7
52.3
32.9
37.6
27.8
48.6
20.8
23.1
29.9
18.5
14.0
17.4
22.1
27.2
16.5
21.0
28.6
29.6
21.7

29.2
36.2
47.4
24.1
22.4
38.8
28.2
25.5
26.9
24.3
26.8
13.7
54.7
32.4
36.5
25.2
44.2
1B.8
23.1
30.6
16.7
13.9
16.8
21.9
27.7
17.4
21.7
22.9
27.3
21.7

40 .8

40.2

39.1

February

1972

~. geposlts of Individuals, partners hips , and corporations and o f states and political subdivisions
. ou nty basis

CONDITION OF THE FEDERAL RESERVE BANK OF DALLAS
BUILDING PERMITS

.....

(Tho usand do ll ars)

-

fatal
loans ~~ Id cer h·fl cate reserves ......... . . ... .
Oth
member banks • • ••••••.•.••...••••

Fed or loans •• ••. . ••... • • ..•• ••• . •• . • • I • ..

lJ.S.eGa~vagency ob l ig~t!ons ••..••• ..•......•
l ot I

-

Mar. 21,
1973

Feb.21,
1973

Mar. 22,
1972

480,092
126,683
0
55,629
3,12 1,989
3,304,301
1,424,540
2,224,959

13,535
15,885
0
59,3 11
3,193,956
3,269,152
1,123,724
2,22 1,779

438,485
500
0
36,682
3, 104,792
3,141 ,974
1,616,272
2,092,542

Item

ernm ont sec uriti es • • ••.• •.••..••.•..

M a boarn lng

a sse ts .... ...................
Fe~rn or bank reserve de posits ... . .. . .... . . .
oral Reserve notes in actual circulation. ~ .•.

Percent change

NUMBER
Area

from

2 mos ,
1973

Feb .
1973

2 mos.
1973

626

1,129

$ 19,370

$44,650

69
418

148
822

1,672
9,473

3,686
29,004

61
132
494
164
82
308
1,279
21
500
31 B
64
2,5B6
44
159
95
82
80
Bl
1,792
30
53
179
83

109
241
911
284
172
5BB
2,558
34
997
603
114
4,856
101
300
157
156
132
149
3,092
61
95
350
142

803
2,491
17,112
2,650
5,247
6,407
22,466
161
12,156
11,729
494
54,634
340
4,871
2,937
1,362
382
B29
16,142
518
247
1,910
2,062

9,800

18,30 1

$198,465

February

1973

- Jan.
----Feb.
1973

1972

2 months,
1973 from
1972

ARIZONA
Tucson • .•. . •.•
Monroe- West
Monroe . .. ..

Shreveport ••••
TEXAS
Ab ilene •.••• . .
Amarillo •••• • .
Austin •... ... .
Bea umont ••. •.
Brown sville •• •.
Corpus Christi •.

(Million d oll ars)

......

Dallas .• ••. •.•
January-February

_ _ Area and ty pe

FI~t~T~U,TH WESTERN

ResideS: • • • : .•• ••. • •.••
ntoal bUilding .•.•..•
N

Nonresi den tial building . .. .

UN oobUll ding construction . • ••

~reD STATES ••..••..• •• •

N,0sidentia l building •. • •.. •
NonresidentiaJ building • •..
~ildjng construction... .

February
1973

January

Decem ber

1973

1972

1973

826
460
248
117
6,839
3,277
2,229

945
455
380
110
6,795
3,195
2,420
1,180

874
392
324
157
6,464
3,120
2,212
1,132

1,772
917
628
227
13,66 1
6,507
4,647
2,507

1,333

1972

Denison ••. •.••

EI Pa so ••..••.
Fort Worth .• .•
Ga lveston .... .
Houston • •. ••••

1,565r
803r
420r
342
11,573r
5,3 13r
3,512r
2,7 48r

Louisiana, New Mexico, Oklahoma, and Te xas

NO e vl sed
Details may not add to totals because of ro unding .
URCE : F. W. Dodge Division, McGraw-Hili Information Systems Company

So TE :

Feb. 1973

-23%

22%

32%

LOUISIANA

VALU E OF CO NSTRUCTIO N CONTRACTS

~.:..~rlzona,

VALUATION (Dollar amounts in thousands)

laredo . .. . . . .
Lubbock •••...
Midland •••..•
Odess a ...... .
Port Arthur ••••

San Angelo • • •.
San Antonio • • •
Sh erman •.•...
Tex a rkana •• •.

Waco •.•.••••
Wichita Falls • • •
Tota l-26 cities •••

- 67
88

-43
231

5,849 -84
-2
9,557 -65
39
32,516
11 -22
5,859 -17
108
6,320
389
251
14,446 -20
46
55,610 -32 -70
781 -74 -54
23,293
9 -46
19,009
61
124
982
1 -70
126,872 -24
43
829 -31 -83
12,050 -32 -14
3,722
274
119
2,571
13
15
870 -22
49
2,283
43
43
36,392 -20
-5
968
15 -46
54 1 -16 -81
8,050 -69 -31
3,934
10
7

308
137
- 16
128
197
64
-49
17
-54
66
-49
66
- 77
39
25
36
47
93
28
-33
-72
93
40

$450,644

- 17
-52

-21%-16%

9%

DAILY AVERAGE PRODUCTION OF CRUDE OIL

INDUSTRIAL PRODUCTION

(Thousand barrels)

(Seasonally adjusted Indexes, 1967
Percent change from

February

January)

December

february

1973p

1973

1972

1972

136.2
140.9
154.1
131.3
118.3
161.2

134.4
137.9
149.0
129.9
118.8
161.0

132.5r
134.9r
148.2
125.3r
119.0r
162.2r

125.6,
126.5
135.3
120.1
116.8r
151.6,

120.8
119.7
115.3
126.1
109.1
150.9

119.9
118.8
114.2
125.3
108.7
148.9

119.2
118.2
113.7r
124.8r
108.3r
149.lr

110.0,
108.5r
102.1r
117.8,
107.2r
139.7r

Ar.a and type of ind.x
Area

February

January

February

January

February

1973

1973

1972r

1973

1972

TEXAS
Total industrial production . .....

FOUR SOUTHWESTERN
STATES . . ...............
louisiana ..... . . .........
New Mexico ..... . .......

Oklahoma ..... . .........
Texas .... . .. .. .. . . ... . .

Gulf Coa st ............
W est Tex as ... ........

East T.xas (proper) .....
Panhandle ..... ..... .. .
Re st of state • •• ......••

UNITED STATES ... .. ..... ..

6,789.6
2,392.8
295 .0
548.8
3,553.0
717.0
1,783.1
246.0
62.3
744 .6
9,372.8

6,756.5
2,400.9
295.0
517.8
3,542.8
723.5
1,764.7
245.7
63.8
745.1
9,359.3

6,685.3
2,389.4
311.9
591.1
3,392.9
647.9
1,703.7
198.7
70.3
772.3
9,456.2

0.5%
-.3
.0
6.0
.3
-.9
1.0
.1
-2 .4
.0
.1%

1.6%
.1
-5.4
-7.2
4.7
10.7
4.7
23.8
-11.4
-3.6
-.9%

-

= 100)

Manufacturing . ..•.......... . ..
Durable ... ...... .. ..... .. ...
Nondurable ........ .. ...... . .
Mining . ••..........••...... . . .
Utilities .... .. ... ... ...... .. . . .

UNITED STATES
Toto I industrial production .... . .
Manufacturing .... . ........ .• ..

Durobl ••.•.........•........
Nondurable . . . ....... ..... . . .
Mining ... .. ....... .. . ... .... . .
Utilities ....... . ........ . ••... .

p-P re limina ry
r- Revlse d
SOURCES: Board of Governors of the Federal Reserve Syste m
Federal Rese rve Bank of Da llas

r- Revi sed
SOURCES : American Petroleum Institute
U.S. Bureau of Mines
Fed e ral Reserve Bank of Da llas

LABOR FORCE, EMPLOYMENT, AND UNEMPLOYMENT

Area

FOUR SOUTHWESTERN
STATES .. . ...... .... .•..
louisiana . ..... . .. ... ....

Offshor •.......••... . .
On shore ........... .. .
New Mexico ........ .....

Oklahoma .... .... .... . ..
Tex a s ..... .. ... .... . .. .

Offshore .... ......... .
On shore ..............

UNITED STATES ...... ..... .

Third

quart er

quarter

1972

1972

1,325
206
78
128
92
207
820
0
820
2,637

-

(Seasonally adjusted)

Fourth

1,586
232
60
172
144
278
932
0
932
2,813

Percent
change
Percent
change

-16.5%
-11.2
30.0
-25.6
-36.1
-25.5
-12.0
-12.0
-6.3%

SOURCE : American Petroleum Institute

1972

from 1971

cumulative cumulative

6,410
920
252
668
503
1,025
3,962
2
3,960
11,315

-1.3%
-11.5
-15.1
24.8
-12.4
2.0
2.0
-4.5%

Fe bruary

January

February

Jon.

Item

1973p

1973

1972r

1973

Civilian Ie bar force .•....•..
Total em ploym ent ••• •••••.. .
Totol unempl oyme nt . . . .. ....
Unemployment rate ... •• .. ..

8,819.8
8,501.6
318.1
3.6%

8,834.0
8,491.9
342.2
3.9%

8,550.0
8,175.6
374.4
4.4%

7,005.2
1,229.5
681.5
548.0
5,775.7
234.4
486.9

6,984.6
1,224.6
674.2
550.4
5,760.0
233.6
483.3

6,657.7
1,156.6
627.8
528.8
5,501.0
232.9
440.5

475.6
1,674.5
373 .3
1,142.0
1,389.1

475.4
1,669.6
372.8
1,141.9
1,383.5

464.1
1,581.9
348.3
1,085.8
1,347.6

Totol nonagricultural wage
and salary empl oyment . .. .
Manufacturing ..... . . . .. .

Durobl ................
Nondurable ....... ....
Nonmanufacturing ••••. .. .
Mining •.•......... . .. .
Con struction . ..........
Transportation and
public utilities • .......

Trod •••.....•........
Finance .. .... •.• . •.•. .
Service • . ....•...... . .
Governm ent . .•. . ..• ...

viIi an labor force, producing a drop
in the unemployment rate to 3.6
percent from January's 3.9 percent.
The unemployment rate was 4.4
percent in February 1972.
Employment in both manufacturing and nonmanufacturing
shared in the gain, advancing 0.4
percent and 0.3 percent, respectively. All the gain in manufacturing was due to employment in durable manufacturing, up 1.1 percent.
Employment in the manufacture of
nondurables was off 0.4 percent.
Constn~ction, with a gain of 0.7 percent, showed the strongest advance
in employment among nonmanufacturing industries. None of these
industries had any loss in employment, although services and transportation and public utilities posted
no change.

Percent change
F.b. 1973 fr~m

Thou sands of persons

1. Arizona , Louisiana, New Mexico, Oklahoma, and Texas
2. Actual change
p-Prellmlnary
r- Revl sed
NOTE : De ta ils may not add to totals because of rounding.
SOURCES : State employment agencies
Fe deral Rese rve Ba nk of Dallas (seasonal adjustment)

I
l
I

I

Five Southwestern States 1
TOTAL OIL WELLS DRILLED

(
I

F.b.
1972

-0.2% 3.2%
4.0
.1
-7.0 _15.0
'_.8
'-.3
.3
.4
1.1
-.4
.3
.3
.7
.0
.3
.1
.0
.4%

5.2
6.3
8.6
3.6
5.0
.6
10.5
2.5
5.9
7.2

~:~%