The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
BUSINESS REVIEW AUGUST 1962 Vol. 47, No. 8 ECONOMIC ADVANCE THROUGH MID-1962 The growth of the Nation's economy over the past 12 months demonstrated resilience and capacity for expansion, as business recovered from a shallow, short-lived recession. By mid-1962, most of the more important economic indicators had reached record levels; in the past year, the broad measure of gross national product showed an advance of more than 6 percent. The domestic economy showed real progress when it is recognized that, by mid-1962, the Nation's industrial output had risen more than 6 percent above the previous cyclical peak, that a new record in plant and equipment expenditures was in prospect, and that, from a year earlier, there had been a gain in civilian employment of more than 1 million persons and a 6-percent advance in personal income in an atmosphere of virtually stable prices. Nevertheless, there has been criticism of the rate of economic advance, and much current discussion centers upon means of stimulating the economy to a higher rate of growth, fuller employment, and greater utilization of resources. These criticisms have concentrated upon .the slower rate of growth in the first half of 1962 than in the last half of 1961 and the interpretation of current data as reflecting a further slowing of the economic advance. The failure of business and the economy to reach satisfactory growth rates probably encompassed the results of a multitude of problems and created additional ones. The unutilized plant capacity and the unsatisfactory level of unemployment were symptomatic of the insufficiency of the economic advance. The investors' dilemma placed many "on the side lines" to await FEDERAL RESERVE DALLAS , BANK OF DALLAS TEXAS This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org) clarification of trends. With inflationary prospects dampened, expectations of capital gains through stock purchases were limited; and with doubts as to the adequacy of longer-term profit margins, a re-examination of price-earnings relationships probably influenced equity prices. Further complicating the near-term outlook were a rising budget deficit, improved liquidity in virtually all types of financial institutions, and a lack of vigorous demand for bank loans. Even beyond the domestic uncertainties lay the difficult balance-of-payments problems and the role of this Nation in international political, financial, and trade relationships. These and other factors generated an atmosphere of caution in business. The psychological reaction to the Government's role in the steel labor settlement and the subsequent abortive steel price increase, coupled with the effects of the equity price declines, left some businessmen in an uncertain mood. This indecisiveness was communicated to investors and other segments of the economy. Part of this picture of mounting uncertainties in the domestic and international scene was perhaps a measure of the degree to which people judge events by expectations and anticipations. As the economy moved upward in late 1961, opinion was widespread that the advance during 1962 could easily reach an 8-percent to 10-percent rate. Although the failure of these expectations may have had a sobering effect, a realistic appraisal of the economy would have to conclude that there was material progress. Ever since the initial surge in the recovery in 1961, there has been further growth in most measures of economic activity. Domestic Economic Scene The year 1962 began in an auspicious manner, with high expectations on the part of most businessmen and consumers. and, 'in fact, the majority of professional observers of the economy. The official forecasts of the Council of Economic Advisers and many private economists indicated an expectation of strong growth in the economy, with some expecting a new boom. Against this background of expectations, the economic growth in the first 6 months of 1962 was disappointing. The dominant features of the domestic economic picture in early 1962 centered around the uncertainties with respect to labor contract negotiations in the steel industry. Part of the anticipation of an unusually strong economy in the first half of 1962 stemmed from a IBUSINESS I2 REVIEW 8:1962 FACTORS OF PRODUCTION UNITED STATES II ol - - - - -.. ~----=~-___1f____----~+B 95 1961 1962 I PERCENT 135 . MOTOR VEHICLESAND PARTSPRODUCTION ~ 115 t- PERCENT 135 ~ -- - - - 115 I 951-~95 75 1- I I IRON AND STEEL PRODUCTION 75 55i~~~-L~1~96-1~~~~-L~~'~ 962 ~~55 SOURCES: Boord of Governor,. F.deral R,urv. 5y.l.m. U.S. D.porlm.nf of Comm.rc • . projected large-scale inventory buildup, stimulated by the possibilities of a steel strike in midsummer. By March, however, it was apparent that the steel labor contract would be signed without a strike, and when the actual settlement came, it was hailed by many as a major breakthrough in eliminating the destabilizing effects which had attended the labor negotiations of this industry in previous years. The nondisruptive settlement of the steel contract brought an early end to the stimulus that hedge\buying of ~teel had provided to the economy. Steel output, whIch had reached 82 percent of capacity in the week ended February 17, receded to a level of about 50 percent by June, as steel users curtailed orders and began to liquidate inventories. Despite the marked reduction in steel output and the resultant shift in steel inventories from accumulation to liquidation, widespread gains in other industries brought further advances in total factory output. The gains were particularly important in the automobile industry, where an advance in production brought the total output in the first half of 1962 to one-third higher than a year earlier, or to a level of 3.6 million units. Other important increases in factory output occurred in the fabricated metal, machinery, clay, glass, and lumber, and chemical industries. Most of the 3-percent of the increase developing in the nonagricultural seggain in total industrial production during the first ment. Manufacturing employment rose about 475,000, half of 1962 occurred in durable goods industries, al- with the durable goods sector showing the largest adthough a small, steady advance also developed in the vance, though the number of workers at nondurable nondurable goods categories. If the countermovements goods plants increased more than 100,000. Among the in steel and automobile pwduction are excluded, there other employment sectors, the principal gain was was a healthy, though slow, advance in the remaining evident in government workers, with a year-to-year industrial output. advance of nearly 350,000 persons. Despite the general . rise in construction activity, employment in this The advance in industrial production was stimulated industry generally averaged below that in the first by an improvement in final demand for a wide range half of 1961. of both durable and nondurable goods. Total business As employment increased, unemployment declined, sales moved consecutively higher during the first half of 1962, although new orders to manufacturers declined with the total moving from a seasonally adjusted rate following the settlement of the steel contract. of 5.8 percent of the civilian labor force in January to 5.5 percent in June; the actual number unemployed In the construction industry, events of early 1962 declined more than 1.2 million workers during the reflected a marked divergence between public and first half of 1962. Some progress was made toward private activity, with cumulative private spending movreducing the number of long-term unemployed, but, ing up nearly 8 percent over a year earlier but public even in June, those out of work 6 months or more spending advancing less than 1 percent. Private resitotaled 584,000. The ranks of the unemployed showed dential construction exceeded the year-earlier total by a further concentration of young unskilled workers and nearly 14 percent, although public housing declined those structurally unemployed. Insufficient pressure quite sharply. In the private sector, after an early lag upon the expanded capacity of productive facilities, caused principally by adverse weather and other together with technological advances and increasing temporary disruptions, housing starts moved to nearautomation, retarded the demand for additional workrecord levels in April and May, reflecting mainly an ers, and unemployment remained at a higher than advanced rate of apartment construction; in June, desirable level. the number of starts declined to 1,389,000. The availOne interesting change in the employment pattern ability of mortgage money, increased competition among financial institutions for new mortgages, and of the Nation was the virtual stability in the civilian the relatively slow pace of residential construction in labor force. An increase in the number of persons in previous years were all major factors in supporting the the armed services accounted for part of the lack of improvement in the residential construction segment growth, but substantial withdrawals from the labor force must have occurred and probably were partly during the first half of 1962. responsible for the decline in unemployment. Of great importance to the long-term health of the With the employment increase and a rise in the economy and to the sustainability of the current economic expansion is the level of private capital spending. total average workweek in manufacturing to more than Although current expectations still reflect an 8-percent 40 hours per week, personal income rose sharply and increase in private capital spending during 1962, there in June reached a new record of $440.4 billion for a have been some marked internal changes - notably, gain of about $23 billion over a year earlier. Most Sharp declines in the ste.el and automobile industries. of the improvement occurred in the labor income Among the factors causing a slower rate of advance sector, although there were increases in proprietors' have been the continued margin of unutilized capacity, income, dividends, and personal interest income. Wage prospects for accelerated depreciation, the outlook on increases in selected industries and higher interest payments by financial institutions also contributed to profit margins, and the tax picture. the over-all advance in personal income. With the broad advance in the economy;, total emThe gain in personal income was augmented by a ployment in the first half of 1962 also registered a further advance in consumer credit extensions during Significant gain relative to the year-earlier pattern. early 1962. Consumer instalment credit showed a On a seasonally adjusted basis, there was an advance of more than 800,000 in total employment, with all marked rise in the second quarter of 1962, in line BUSINESS REVIEW\ 8:1962 3\ FACTORS OF CONSUMPTION UNITED STATES ( S.alonaUyad/UI I,d ) BI LLIO NS OF DOLLARS 460 440 1-PER:soN"ALiNcOME=~-=::::!:::::;:::::;==-- 1 440 420 20.5 19 .5 1 - -- - - - - - - - - ! - - -::/-""'"'-='- -li 9 . 5 18.5 17. 5 +.6 +.4 +.2 - .2 1961 1962 '\- - + -- - / -- - - 1 6.6 1-- - - - - -- - '\_..:. ....."'----- - - 16.2 5.8 16. 1 I---/'"---~"--"'<.!..!!!.:! 5.4 L-1-l---L.---'---'---L......l.-.-"-'-l.--L.--'---'----'--,-'::-::--'---' - ' 5.0 HOURS.,---_ _ _ _ __ _ _ _---r_ _ __ 41.0 ---';-~ 40.5 40.01----_=_ 39.5 1 -- - 39.0L-.....J-SOURCES: Boo rd of Govl rnon, Fed, ro l Rlluv' St , tlm. U. S. Deport m.nt Commt rc i . 0' U. S. O.po r'm.nt 01 Lobor. with the increased sales of consumer durab1es, and total consumer credit outstanding at the end of May was more than $3 billion higher than a year earlier. The steady, small rise in consumer instalment credit repayments was clearly outweighed by the large extensions, especially from February through May. With the improvement in the consumer's ability to purchase and despite a rising level of sayings, there was an advance in retail trade. Although the total slipped back from the record April level in May and June, retail sales averaged 7 percent above the first half of 1961. The improvement in retail trade occurred at both durable and nondurable goods outlets, with the latter showing a steadier advance. Among the durable goods, one of the strong gains occurred in sales of new automobiles, which reached almost 3.5 million units in the first half of 1962 for a 25-percent advance over a year earlier. Increased sales of consumer appliances were also noticeable during the year, partly I BUSINESS 14 REVIEW 8:1962 reflecting the higher levels of residential construction .. Among nondurable goods outlets, increases were widespread but were especially noteworthy for apparel stores, gasoline service stations, and general merchandise stores. Department store sales through June were 5 percent ahead of the year-earlier pace. The general wholesale price level remained stable, and increases in consumer prices were less than in other recent periods. All major categories of wholesale prices were little changed from January to June 1962. Some price declines occurred in industrial crude materials and farm products. At the consumer level, food and service prices advanced, while other prices held steady. The consumer price index rose less than 1 percent in this 6-month period. It is apparent from the foregoing that the domestic economy improved during the first half of 1962 at a moderate pace and without inflationary pressures. Domestic Financial Pattern For a period of economic advance such as that which the Nation experienced over the past year, the financial picture was different than might have been expected. The financial markets of the United States featured a large availability of credit, a slow growth in the demand for bank credit accommodation, and reasonable interest rate stability over most of the first half of 1962. One factor influencing banking was the increased competition for deposits, which was made possible by the higher rate on time and savings deposits permitted under the change'in regulation Q of the Federal Reserve System. The higher interest costs for these deposits caused banks to reappraise their loan and investment policies. As a result, some banks made shifts in their basic investment portfolios, tending to move toward longer-term, tax-exempt municipal securities ,and to lengthen the maturities of Government security holdings. At the same time, banks reviewed their interest charges on loans, and some made upward adjustments where feasible. Possibilities of increased direct mortgage loans were also explored by many banks. It is difficult to appraise the impact of the change in interest rates for time and savings deposits. There was some attraction of additional funds into the banking system and pressure for a higher rate of earnings, but these funds may have provided a liquidity to the banking system, which normally is curtailed in periods of economic expansion. The change also affected reserves of the banking system, inasmuch as there waS some shifting from demand to time accounts, which have substantially lower reserve requirements. The supply of reserves to the banking system was augmented by the relatively easy monetary policy during the first half of 1962. All major financial indicators reflected this policy of monetary ease. Free reserves of the banking system remained generally between $400 million and $500 million until June 1962, and borrowings were at nominal levels, rising only during tax periods or for other special circumstances. While it is not possible, in this article, to provide a detailed explanation of the basic factors causing this policy of ease, it should be noted that the growth of the domestic economy was insufficient to bring into production the available capacity in labor and capital equipment. Thus, policy was designed, in part, to help contribute to the achievement of a higher rate of growth, and this fostered an easier policy. On the other hand, the System took into account in its p.olicy considerations the complicated balance-of-payments situation. This factor encouraged a higher level of short-term rates. Thus, the System's monetary policy was designed to provide the liquidity for an expanding domestic economy while taking into consideration the problems created by the Nation's balance-of-payments deficit. DOMESTIC FINANCIAL INDICATORS UNITED STATES BILLION S OF DOLLARS BILLIONS OF DOLLARS 150 140 P 150 ~-=~::::::::::::::::::::===:::1::::::::::-C:::::::==~ 140 MONEY SUPPLY'" 1301 - - - - - - - - - - - -1- -- - - - 130 120 110 ~ - COMMERCIAL BANK LOANS 120 110 1001--- - - - - - - - - -1- - - - --1 100 COMMERCIAL BANK INVESTMENTS 90 801-------'=---=:::=__-- PERCENT PER ANNUM 4.0 ~~:::::::::::::M 3.0 .. Sl a.onall)' od/ut led. One complicating factor in the System's policy ttMorkl'toll. r Av,rag .. of doll)' flour ... p· Prellmlnorr. determination was the continual, large-scale Treasury SOURCE : Boord of Govlrno,., Fld,ral R,,,rvi S1,tl m, financings conducted in the first half of 1962. In this period, the Treasury refunded nearly $30 billion their increased interest payments for time and savings of securities and undertook new financings for cash of deposits by purchasing long-term, tax-exempt municipal more than $5.9 billion. Most of the financing operations securities. Some of this strength spilled over to the of the Treasury were concentrated in the short-term corporate market. By spring, however, the municipal area, with a large portion occurring in the weekly market began to soften somewhat, as banks reached Treasury bill issues, which were increased from $1.7 their desired level of holdings, and a large number of billion to $2 billion. In fact, only $2.4 billion of new municipal issues were floated by states and municisecurities were issued with maturities in excess of 10 palities seeking to capitalize upon the lower interest years, and all of these were reopenings during refund- rates. Total new municipal issues in the first half of ings. Treasury financing operations generally found a 1962 amounted to about $4.9 billion, or 7 percent above favorable market, partly because of the heavy emphasis the corresponding total in 1961. In contrast, the new upon the short-term area and the use of the auction corporate issues in this period reached about $5.1 feature for Treasury bills. The Treasury also was billion, compared with $6.5 billion in the previous year. successful in further advance refundings. Thus, the One of the major complicating factors in this broad Nation's budget deficit was financed largely by shortfinancial picture throughout the first half of 1962 was term issues through the banking system and financial the weak market for equities. The widely quoted Dow institutions. However, it should be noted that a desire J ones industrial average declined more than 200 points to support short-term rates for balance-of-payments by late June, reaching its lowest level since 1958. reasons was a factor in some of the debt management The impact of the stock market decline upon business moves toward short-term financing. and consumer confidence is difficult to appraise, alThe municipal bond market during early 1962 was though there have been some indications that the eXceptionally strong, as banks sought to cover part of cautioning influence may have had some effect on BUSINESS REVIEWI 8:1962 51 consumer and business decisions. To some extent, these influences were reinforced by the public emphasis upon the slower than anticipated growth rate. The financial markets reacted to these influences with increasing caution, and investors evidenced a greater desire for short-term investments than would be expected in relation to their liquidity positions. investment funds, as foreign borrowers floated a number of new corporate and official bond and equity issues in the United States market. Offsetting these developments were a reduction in the rate of outflow of short-term funds from the United States, a lessening of capital outflows for investment in foreign plants, and some improvement resulting from the special actions taken by the United States Government. Along with other factors, these actions resulted in a number of foreign nations assuming part of the burden of aid to underdeveloped nations and centering more of their basic military expenditures in the United States. Additional prepayments of debts by foreign governments and a marked inflow of funds developing out of the pressures on the Canadian currency also helped to reduce the deficit in the Nation's balance of payments. Toward the end of the second quarter, some shifts in financial markets occurred, as free reserves declined in late June to an average of less than $350 million under the impact of a rise in bank loan demand for tax and dividend payments and the convergence of market factors absorbing reserves. Treasury bill rates rose nearly 30 basis points during late June and early July to an auction level of 2.98 percent in mid-July, partly because of the continued additions to the weekly Important factors in the international financial auction by the Treasury and some selling pressure posture of the Nation were the disturbing shifts in associated with the June tax date. These forces, coupled the rates of exchange and the currency problems of with market consideration of the impact of some two of the Nation's closest allies. Thus, over the past unsettling factors in the international area and domestic year, the moves undertaken by the United Kingdom economic prospects, also brought a decline in interand Canada were of great importance. In mid-summer mediate- and longer-term security prices. 1961, the United Kingdom adopted a severe austerity International Financial Problems program and a package of special financial actions To a considerable extent, some of the basic trends which were designed to reduce the British balance-ofin the domestic economic and financial situation are payments deficit. By early 1962, these actions had related to the impact of the Nation's foreign relation- taken effect, enabling Great Britain to repay more than ships over the past few years. The continuing deficits half of its drawing against the International Monetary in the United States balance of payments have occasioned sizable outflows of gold and an increasing volINTERNATIONAL FI NANCIAL INDICATORS ume of short-term dollar claims against the United States UNITED STATES held by foreign private concerns and governments. The 1,900 outflow of gold has directly reduced reserves of the domestic banking system. Also, the United States found 1,700 1_=-~,--=:;::::::==/ itself in a more difficult position with regard to compe1,5001--- - - - - - - - - - - - - ----11,500 tition in the world market for many manufactured goods, partly because of an increase in costs reflected in higher prices and partly because of the steady improvement in the technological base of foreign manufacturing facilities. During the past year, many of these ~ ame forces were at work, though the over-all' rate of deficit declined. MILLIONS OF DOLLARS With the improvement in the domestic economic situation, imports during January-May 1962 increased by more than 17 percent above a year earlier, while exports rose about 5 percent. Thus, the trade surplus of the United States narrowed somewhat in the first half of 1962 but, for the January-May period, still amounted to an annual rate of $4.75 billion. Moreover, there was an increase in the outflow of long-term I BUSINESS 16 REVIEW 8:1962 1961 SOURCES : Federa l R... r'li Bull .Un, U. S. D.PQ r;;;;;;;to~.'u , 1962 Fund, to improve its foreign reserve position, and to mitigate, by successive cuts in the Bank rate, its stringent monetary policy. These moves reduced the short-term rates in England and, thus, their attractiveness for United States investors. . : The Canadian situation, however, deteriorated sharply in 1962, and, after a fixed rate of exchange was established on May 2, intensified speculative pressures developed so that over the spring period Canada lost about one-half of its foreign reserves in defending the rate. Thus, Canada was forced to draw against a consortium of financial organizations in the amount of $1,050 million. Repatriation of funds from Canada during this speculative raid first brought pressure against the Canadian dollar and then against the American dollar, since this latter currency was used as a vehicle to withdraw European funds from the Canadian market. To offset the general international financial market unsettlement and the continuing large-scale shifts of funds between nations during early 1962, a number of special arrangements were accepted by the United States and -Western European nations. Noteworthy among these was the increased intercentral bank cooperation. The Federal Reserve System completed currency swaps with five other nations amounting to' $450 million by early July. These exchanges enabled the Federal Reserve to obtain foreign currencies for the purpose of protecting the American dollar against temporary or speculative pressures in the exchange market. Other areas of cooperation included the new International Monetary Fund borrowing power and the increasing United States participation in the · Organization for Economic Cooperation and Development and its special working parties for monetary and fiscal policy. ELEVENTH FEDERAL RESERVE DISTRICT ~ 00110 . Head Office Territor, IlIIID HOUlton Branch Territor, .' I:!:!:;:;:I Son Antonio Bronch Terrllor), ~ EI Pa l o Branch Territory BUSINESS REVIEwl 8:1962 71 BUSINESS REVIEW BUSINESS, AGRICULTURAL, AND FINANCIAL CONDITIONS Seasonally adjusted department store sales in the Eleventh District declined 1 percent in June but were 10 percent above a year earlier. Cumulative monthly sales for the first 6 months of 1962 were 8 percent above the corresponding period of 1961. June automobile registrations in four major Texas markets declined 7 percent from May. Cumulative registrations through June this year were 22 percent above the first 6 months in 1961. In the 4 weeks ended July 18, the weekly reporting member banks in the Eleventh District showed increases in investments but reductions in loans and deposits. Free reserves moved upward at country banks during the 4 weeks ended July 4 but declined at reserve city banks. Seasonally adjusted department store sales in the Eleventh Federal Reserve District in June declined 1 per cent from May but were 10 percent above June a year ago. The index of June sales, seasonally adjusted, was 107 percent of the 1957-59 average, compared with 108 for May and 97 for June 1961. The unadjusted dollar volume of District department store sales for June was 10 percent less than in May but 11 percent above June 1961. The month-to-month DEPARTMENT STORE SALES (Percentag e chang e in retail valu e) June 1962 from 6 mo nths, Are a Total Eleventh District. • . . . . . . . Corpus Christi.. .. . . . . . . . . . . . . Dalla s... . .. . . ..... .. ....... EI Paso. . . . .. .. . .. ...... .. . . Fort Worth... . . . . . . . . . . . . . . . Houston. • • . • . . . • • . . • • • . . • • . San Antonio. • • • • • . . • . • . . • • • • Shreveport, la. . . • • . . . . . . . . . . Waco.. . . ...•• • •••. . .. • .. • • Other cities ........... . ... . . I BUSINESS Is May Jun e 1962 1961 1962 from 1961 11 3 8 3 30 14 19 15 14 6 8 -2 7 8 19 12 11 14 9 6 -10 4 -15 -19 - 11 -10 -9 -11 -6 -10 REVIEW 8:1962 Daily average crude oil production in the Eleventh District increased fractionally in June but declined slightly in early July. District refinery operations advanced during the period, but drilling activity decreased. Full-scale farming operations prevailed throughout the District during most of July. Hot, dry weather has boosted cotton' growth; plantings for this year's crop in the District states are slightly below a year ago. Compared with 1961 outturns, decreases are also indicated for the 1962 crops of 'winter wheat, corn, oats, barley, hay, flaxseed, and Irish potatoes; increases are reported for rice and sweet potatoes. The Texas industrial production index and employment in the District states both reached all-time highs in June. Construction contracts were at a new high for the month of May. decline was due, in part, to the fact that there was one less trading day in June than in May. Cumulative monthly sales for the first 6 months of 1962 were 8 percent above the same period last year. Sales in the first half of July were fairly strong, rising 13 percent above the corresponding period in 1961. The seasonally adjusted index of District department store inventories in June, at 114 percent of the 1957-59 average, was unchanged from May but 14 percent above June 1961. June registrations of new cars in four major Texas markets rose 22 percent over June 1961 but were 7 percent below the May figures. Cumulative data for the first half of 1962 indicate an increase of 35 percent above the corresponding period in 1961. In the individual markets during June, only San Antonio showed an increase over May registration figures, with a 2percent gain; Fort Worth was down 4 percent, and both Houston and Dallas were 8 percent iower. COInpared with a year ago, June sales advanced in all four major Texas markets, with Houston gaining 15 percent and Dallas increasing 17 percent. Fort Worth and San Antonio registrations rose 37 percent and 43 percent, respectively. ' ANNOUNCEMENT The Federal Reserve Bank of Dallas has revised the indexes of department store sales and stocks for the Eleventh Federal Reserve Distr.ict for 1919 to date. The features of the revisions are: (1) The indexes have been adjusted upward to reflect changes indicated by the Census of Business between 1954 and 1958; (2) the base period of reference for the indexes has been changed from 1947-49 to 1957-59; and (3) seasonal adjusfment facto rs have been reviewed for 1955 to date and have been revised, where necessary, to reflect shifts in the consumer buying pattern. Revisions also have been made of disfrict indexes by the other Federal Reserve banks and of the national indexes by the Board of Governors of the Federal Reserve System. Ind exes of department store sales and stocks hereafter will be published by this Bank for the Eleventh District on the 1957-59 base period only, except for the 1-month overlap shown in the table below. For the convenience of those who may wish to maintain indexes of department store sales and stocks on the 1947-49 base, this Bank will furnish, upon request, such revised indexes from January 1919 through June 1962, as well as a factor ,whic~ may be used to convert indexes on the 1957-59 base to the 1947-49 base. Pamphlets presenting detailed information on the revisions and adjustments may be obtained from the Research Department of the Federal Reserve Bank of Dallas. INDEXES OF DEPARTMENT STORE SALES AND STOCKS Eleventh Federal Reserve Di strict STOCKS (End of month) SALES (Dail y average) Dot e Unad luste d Seasonally adjusted 1961, June ......... . 1962, April .•• •.•••.. May . .. ...... . 87 103 104 96 97 104 108 107 148, 178 179 166 161r 187 179 181 1957-59 June • • •••• •••• 1947-49 1961 ,june ..... .. .. . 1962 , April ......... . May .....••••. June • •••..•••• rP - Unadjuste d = 100 94 114 11 2 107p = Seasonally adjusted 100 111 11 4 11 4p The hot, dry July weather boosted cotton growth throughout the major producing areas of the Southwest. Harvesting is under way in the Lower Rio Grande Valley of Texas, and the crop is maturing rapidly in the Coastal Bend, upper coast, and south-central Texas; insect damage in these areas is much lighter than usual. Cotton is blooming in the Plains, and farmers are watering and cultivating the crop. The acreage planted to 1962-crop cotton in the District states is estimated, as of July 1, at 8.9 million acres, or 1 percent below the 1961 acreage and 17 percent less than the 10-year (1951-60) average. Compared with a year ago, cotton plantings are down 2 percent in both Louisiana and Oklahoma and 1 percent in Texas; Arizona and New Mexico show gains of 3 percent and 2 percent, respectively. The national cotton see dings are placed at 16.4 million acres, which is 1 percent less than the acreage seeded last year and 17 percent below the 1951-60 average. Combines have operated long hours to move the grain sorghum harvest northward into south-central Texas. Combining is nearing completion in the Lower Valley, is well advanced in the Coastal Bend, and is under way in south-central Texas. The Blacklands crop has ripened rapidly in the hot, open weather. Sorghums are heading in the Southern High Plains and Low Rolling Plains and are in the boot stage in the Northern High Plains. Early peanuts are making good growth in the Cross Timbers, but additional moisture will be needed to complete the crop in both this area and south Texas. The seasonally hot weather brought hay harvest to a peak in the eastern part of Texas, and the third cutting 'of alfalfa is under way in the Low Rolling Plains. 100 167 206 202 194p CROP ACREAGE 179, 198 204 208p (In thou sands of acres ) TEXAS Revised. Preliminary. Harve ste d For ' For harvest Farming activities in the District were in full swing during most of July as a result of the generally hot, open weather, although scattered rains and thundershowers at midmonth temporarily delayed field Work. Soil moisture was depleted rapidly by the high temperatures and dry winds, and additional moisture will be needed to maintain pasture and feed conditions. FIVE SOUTHWESTERN STATES' Harvested Average harvest Averag e Crop 1962 1961 1951-60 1962 1961 1951-60 Cotton •. •• . ..• • 7,000 2,731 904 806 210 28 458 5,804 1,882 306 20 18 13 7,080 3,690 1,063 1,074 42 1 23 409 5,804 1,869 312 140 20 14 8,501 2,697 1,702 1,132 208 25 478 7,314 1,701 373 64 19 23 8,900 6,783 1,303 1,210 990 102 953 7,139 4,111 434 20 35 76 8,988 8,645 1,519 1,603 1,401 89 867 7,125 4,100 437 140 39 67 10,782 7,425 2,614 1,808 697 11 2 998 9,351 4,026 516 64 39 104 Winter wheat •• • • Corn •..•• ••• •• • Oats ........... Barley . •• • • ..•• Rye ...... ...... Rice • •• • .....•• Sorghums • •• .••• Hay ... ... ..... Peanuts (alone).. . Flaxseed ..• •• • • Irish potatoes • ... Sweet potatoes . . Arizona, louisiana, New Mexico, Oklahoma, and Texas . SOURCE, United States Department of Agriculture. 1 BUSINESS REVIEW 8:1962 I 91 CROP PRODUCTION CONDITION STATISTICS OF WEEKLY REPORTI NG MEMBER BANKS IN LEA DING CITI ES (In thousands of bushels) Eleve nth Federa l Reserve Di stric t TEXAS Crop Winter wheat •••• Corn ••••• • ••• • • Oats • • ••• •••••• 8arley •• • • •• ••• Rice ' •• •• • ••• • •• Hays • • • •••••• • • Flaxseed • • • • •• • Irish potatoes" •• • Sweet potatoes" . • 1962, estimated July 1 1961 49,158 26,216 19,344 3,990 14,656 2,358 190 2,452 1,040 84,870 31,890 28,998 10,104 11 ,452 2,424 1,610 2,776 770 FIVE SOUTHW~STERN STATES' 1951-60 196 1 1951-60 Item 38,874 35,558 26,256 4,338 13,456 1,875 485 1,763 1,150 126,982 39,502 28,030 22,614 29,258 6,812 190 5,296 5,240 205,664 48,044 45,182 42,599 24,963 7,108 1,610 6,108 4,43 1 118,333 56,075 42,614 20,884 26, 179 5,572 485 4,01 1 5,864 ASSETS Comme rcial a nd in dustria l loans •.• • ••• • ••• • •• Agricultural loans •• •. ••• •• • • • ••• ••••• •••• •• loons to b rokers and dea lers for purchasing Average Average Arizona, Louisiana, New Mexico, Oklahoma, and Texas. " In thousands of bags containing 100 pounds each . 1 3 In thou sands of ton s. • In thousands of hundredweight. SOURCE, United States Department of Agriculture. Combining of early rice varieties has started in Texas and Louisiana. The hot weather dried south Texas corn, and harvest is under way. Compared with last year's production, decreases in outturns for the District states are indicated for the 1962 crops of winter wheat, corn, oats, barley, hay, flaxseed, and Irish potatoes. In contrast, increases are reported for rice and sweet potatoes. Harvesting of potatoes and onions in the High Plains of Texas was active during July, and a fairly good volume of cantaloupes and watermelons was available from northern and eastern counties. Gathering of cantaloupes is under way in the Trans-Pecos counties, but shipments from this area will be relatively light because of hail losses early in the season. Tomatoes, peas, squash, and okra are available for local markets and roadside stands in north and east Texas. Sweet potatoes have made satisfactory growth in east Texas, but rain would be beneficial. Seeding of fall-crop vegetables is under way in the important south Texas commercial areas. Pasture and feed conditions in the Southwest remain generally adequate. Although pastures are browning from the high July temperatures, ample grass is available in most areas as a result of the late June rains. Cattle are mainly in good condition except in the Edwards Plateau and Trans-Pecos areas of Texas and in sections of New Mexico. Loans, investments, and time and savings deposits advanced at the Nation's weekly reporting member banks during the 4 weeks ended July 11, but demand deposits adjusted declined. The money market maintained a firmer tone, as money market banks remained BUSIN ESS REVIEW 10 8:1 962 (In t housa nds of dollars ) 1962, estimated July 1 July 18, 1962 June 20, 1962 July 19, 1961 '1,75 1,192 47,258 1,745,282 4 1,750 1,508,179 39,062 274 52,051 16,277 65,735 31 1 54,295 or carrying : U. S. Government securities • • • ••• • ••• . •• • •• Other securities •• ••.••••.•••• • •••• •• ••.• O ther loans for purc hasing or carrying: U. S. Governmen t sec urities ••• • ••. • • •• . ..•• Other securities •• .•.•• • .••••••••.••••.•• l oans to domestic commercial ba nks ••• •• .•••• . l oans to foreign bonks ••••••• • •••• • • • •••• • • l oons to other flna ncia l Instit utions: Sales flnance, personal flna nce, etc .......... Savings banks, mtge. cos ., ins. cos., etc .• • . • • • Real·estate loans •••• • ••••• • • • •• • •••••• • ••• All ather loans • • • • •••••• • •• • •••• • ••••••• . • 2,485 '1 80,699 41,50 1 93 2,442 175,373 74,32 1 133 4,735 230,909 29,462 128 '85,854 '188,743 263,032 '837,600 89,922 186,253 259,965 843,927 88,438 155,288 221,268 777,752 Gross loans • •• •• . . • • •• • •• •• ..••• • ••• • •• l ess reserves an d una llocated charge-offs • • 3,450,782 62,364 3,50 1,380 61,6 11 3,109,827 55,990 Net loans • • • • • •• •• •••• • ••••• ••• • •• •• • • •!:L:l,388,4 18 3,439,769 3,053,837 Treas ury bills • •• • ••• • ••. ••• •• • • ••• •••• • ••• Treasury certiflcates of indebtedness • •••• • • • • • Treasury notes a nd U. S. Government bonds, includi ng guaranteed obligations, mat uring: Within 1 year •••• • ••• • •• • ••••••••••••• • After I but within 5 ye a rs • • • •• • •••• • •••• •• After 5 years • ••• •• ••• ••• ••• • •• ••••• •• • • O ther sec urities •• •• •• •••• • ••••••••••••• • •• 118,523 6 1,9 13 110,399 58,999 99, 115 72,449 278,205 652,741 444,77 1 47 1,930 265,957 654,73 1 445,063 465,439 243,7 16 608,960 459,239 40 1, 11 4 Total investments •••• •• • • • ••• ••• • ••• • • • •• 2,028,083 2,000,588 1,884,593 Ca sh items in process of collection •• ••• • •• ••• • Ba la nces with banks in the United States • ••• • •• Bal ances with banks in foreign countries •• •••• • Currency a nd coin ..• •• •• • •• • •••••••••••••• Reserves with Federa l Reserve Bank •• •• ••••• • • Other assets • •• • • •••••• • ••• •• • • ••• • •• • • ••• 564,736 475,458 2,322 60,531 583,136 202,232 576,469 530,832 2,558 59,277 594,071 200,423 492,097 486,428 1,695 56,527 539,623 184,642 TOTAL ASSETS • • • ••••••• • •••••••••••• 7,304,9 16 7,403,987 6,699,442 3,024,079 3,068,576 2,954,18 1 3,432 133,645 238, 128 3,045 173,535 23 1,569 2,686 62,184 186,541 1,068, 164 13,490 51,282 1,106,142 14,326 54,708 995,942 12,055 52,929 4,532,220 4,65 1,901 4,266,5 18 LI AB ILITIES AN D CAP ITA L ACCOU NTS Demand deposits Individuals, partnerships, an d corpo rations • • • • Foreign government, an d offlcial institutions, central banks, and internationa l instit utions.• United States Government • • • • • • ••• • ••• • •• States a nd political subdivisions •• ••. •• •••. • Banks in the United Sta tes, incl uding mutua l sa vings bon ks • • • •• • ••••••••• •• • .•• • • •• Bonks In foreig n countries • • •••.••••••••••• Certifled and offlcers' checks, etc .... . ...... Tota l demand deposits •••••• • •••••••••• Time an d savings de posits Indi vid ua ls, p a rtners h ip~, a nd corpora tions Sa vings de posits • • •••• ••• •• • •••••• • ••• O ther time d eposits • • •• • ••••••••• ••• ••• Foreig n governme nts a nd ofHcial instit utions, central bonks, an d international institutions•• U. S. Government, incl uding postal sa vings • •• Sta tes and politica l subdivisions • .• • ••.• •• •• Banks In the Unite d States, including mutua l savings ba nks • ••• •• •• •••• • • .. • •• •• • ••• Banks in foreign countries •• • •• •• •• ••• ••• •• 943,755 693,895 922,482, 697,377 779,686 548,167 2,5 11 6,6 17 252,946 2,507 6,61 7 27 1,11 3 6 7,102 286,355 6,42 1 2,350 6,567 2,3 50 9,557 900 Tota l time an d sa vings d eposits •• •• ••. • •• 1,908,495 1,909,01 3 1,631,773 Total deposits •• •• ••••• • • • • • .• ••• • • • Bills pa ya bl e, re discounts, etc ......... ... .. . . All other liabilities • •.• •• •••••••• ••• •••••••• Ca pital accounts •• • •• •• •• ••••• •• •• •••••••• 6,440,7 15 135,400 95,464 633,337 6,560,9 14 102,150 107,356 633,567 5,898,291 122,000 86,240 592,9 11 TOTAL LIAB ILITI ES AND CAPITAL ACCOU NTS. 7,3 04,9 16 7 ,40a,987 6,699,442 1 Because of recl a ssiflcatio ns, th ese data are not strictly compa rable with yea r-ea rl ier da ta. under pressure and free reserves declined moderately. The Federal funds rate held generally between 2% percent and 3 percent, but Treasury bill rates moved up sharply, as the Treasury continued to add $200 NEW MEMBER BANKS The Guaranty National Bank and Trust of Corpus Christi, Corpus Christi, Texas, a conversion of 'the Guaranty Trust Company, Corpus Christi, Texas, located in the territory served by the SO a n' Antonio Branch of the Federal Reserve Bank of Dallas, opened for business July 2, 1962, as a member of the Federal Reserve System. The new member bank has capital of $3 00,000, surplus of $1 00,000, and undivided profits of approximately $128,000 . The officers are : l. H. Gross, President and Senior Trust Officer; A. K. Adams, Executive Vice President and Trust Officer; D. C. Brickley, Vice President and loan Officer; F. W. Hoepfner, Trust Officer; E. G. Horne, Trust Officer; J. A. lipscomb, Jr., Trust Officer; Mark A. Welsh, Trust' Officer; William l. Tagliabue, Cashier; and Edwina E. Bonnet, Assistant Cashier and Assistant Trust Officer. The North Hill National Bank of San Antonio, San Antonio, Texas, a newly organized institution located in the territory served by the San Antonio Branch of the Federal Reserve Bank of Dallas, opened for business July 23, 1962, as a member of the Federal Reserve System. The new member bank has capital of $25 0,000, surplus of $150 ,000, and undivided profits of $1 06,250 . The officers are: Col. C. E. Brand, Chairman of the Board; Clifford l. Hagy, Sr., President; E. G. Pegues, Executive Vice President; Richard J. Beck, Cashier; and B. C. Moore, Assistant Vice President. million to each weekly auction, and dealer holdings of Government securities receded significantly. Thus, despite a good bank and nonbank demand for Treasury bills, the auction rate on 91-day bills advanced from 2.721 percent on June 21 to 2.930 percent on July 19. Rates on bankers' acceptances, prime commercial paper, and finance company paper also increased. Prices of intermediate- and long-term Government securities declined in a market dominated by uncertainties in the outlook for monetary and fiscal policy, talk of deficit financing and a tax cut, and the possibility of higher interest rates. Other factors influencing market conditions included the implications of the Canadian currency problem on the United States balance of payments and a further gold outflow, recent increases in London gold prices, reports suggesting that the Treasury might issue a long-term bond for cash, and the reduction of common stock margin requirements. Investments advanced at the weekly reporting member banks in the Eleventh Federal Reserve District dUring the 4 weeks ended July 18, but loans and deposits declined. Both cash accounts and total assets receded during the period. Gross loans (excluding interbank loans) decreased $17.8 million at the weekly reporting member banks in the District, priInarily reflecting a $24.3 million reduction in loans for purchasing or carrying securities. Commercial and industrial loans advanced moderately, as increases in loans to firms engaged in mining, trade, and nondurable goods manufacturing more than offset decreases in loans to concerns engaged in durable goods manufacturing and transportation, communicatio'n, and other public utilities. Loans for services and construction were virtually unchanged. In the corresponding period a year earlier, gross loans declined $1.8 million, with reductions in "all other loans" and commercial and industrial loans more than counterbalancing advances in loans for purchasing or carrying securities and loans to nonbank financial institutions. Total investments at the District weekly r~porting member banks rose $27.5 million during the 4 weeks ended July 18, as holdings of both Government and non-Government securities expanded. The advance in Government holdings centered in the short-term area. In the comparable period of 1961, total investments receded $53.3 million, as Government security holdings moved significantly lower. In the 4-week period, demand deposits at the District's weekly reporting member banks declined $119.7 million, largely as a result of reductions in deposits of individuals, partnerships, and corporations, United States Government deposits, and deposits of commercial banks. Time and savings deposits were virtually unchanged, as an increase in deposits of indiRESERVE ,POSITIONS OF MEMBER BANKS Eleventh Federal Reserve District (Averages of dally figures. In thousands of dolla rs) Jul y 4. 1962 5 weeks end ed June 6, 1962 4 weeks ende d July5,1961 602,653 561,900 40,753 596,575 6,078 1,461 4,617 592,7B6 552,B02 39,984 582,916 9,870 29 9,B41 56B,905 529,B19 39,086 559,358 9,547 107 9,440 539,612 432,844 106,768 476,218 63,394 2,023 61,37 1 539,467 435,411 104,056 476,856 62,611 3,457 59,154 513,211 4 13,951 99,260 445,829 67,382 740 66,642 1,142,265 994,744 147,52 1 1,072,793 69,472 3,484 65,988 1,132,253 988,2 13 144,040 1,059,772 72,481 3,486 68,995 1,082,116 943,770 138,346 1,005,187 76,929 847 76,082 4 weeks end ed item RESERVE CITY BANKS Toto l reserves held • .. , ........ With Federal Reserve Bank .. . . Currency and coin • •. ... •... . Require d reserves • •.... ... ..•• Excess reserves .. .. .......... . Borrowings •• •. ... .••• ••••.. . • Free reserves ... ....•.......•• COUNTRY BANKS Totol reserves held • ....... .. •• With Federal Reserve Bank . . .. Currency and coin . .. . •.• .. .. Required reserves • . ........... Excess reserves • ••..... .. .•... Borrowings • .. .... .•• .. .•..... Free reserves . .... . . ........ •. ALL MEMBER BANKS Total reserves held • .. •. . . ..... With Federa l Reserve Bank .. .. Currency and coin . . .. ..... .. Re quired reserves • •. . .... .... . Excess reserves . .... . .. . .....• Borrowings . .•..........•• .. .. Free reserves • •. .......• ••... . BUSINESS REVIEWI 8 :1962 11 I viduals, partnerships, and corporations was offset by a reduction in deposits of states and political subdivisions. In the comparable period for the preceding year, demand deposits and time and savings deposits decreased $224.5 million and $3 .3 million, respectively. Total reserves of the District member banks moved moderately upward during the 4 weeks ended July 4, primarily because of an increase at reserve city banks. Excess reserves receded, however, as an advance at country banks was more than counterbalanced by a decline at reserve city banks. Borrowings also showed mixed trends, rising at reserve city banks but decreasing at country banks. As a result of these changes, free reserves expanded moderately at country banks but declined significantly at reserve city banks. Noteworthy among recent developments in the Nation's petroleum industry has been a reduction of 9 million barrels in crude oil stocks during June and early July to a level of 245 million barrels. Crude oil runs to national refinery stills expanded significantly in June, and this level was sustained in early July. New supplies of crude oil were little changed, as a fractional decline in domestic output was offset by an increase in crude oil imports. MARKETED PRODUCTION OF NATURAL GAS Sea sonally adjuste d ind ex (1957-59 = 100) . In millions of cubic fe et First Fourth first First Fourth fi rst quarter quarter quarter quarter quarter quarter Area 1962 1961 1961 1962 1961 1961 Louisiana • ... Ne w Me xico .. Oklahoma • •• Texas .. . .. . . 898,200 233,000 262,200 1,578,500 889,800 241,300 239,700 1,524,800 809,300 206,300 228,900 1,580,000 144 118 142 111 162 128 149 110 130 104 124 111 Total ... .. . 2,971,900 2,895,600 2,824500 122 126 116 SOURCES, United States Bureau of Mines . Federal Reserve Bank of Dallas. Seasonally adjusted refined product stocks increased in June to 104 percent of the 1957-59 base, but, in early July, the advance was less than anticipated. Gasoline and heating oil prices were holding finn in the Middle West in mid-July. Along the eastern seaboard, gasoline prices increased, but there was little change in prices for heating oil. Petroleum activity showed mixed trends in the District. Daily average crude oil production increased fractionally in June to 2,943,800 barrels, but a slight decline occurred in early July. Daily average output during August is expected to be little changed, since Louisiana, New Mexico, and Texas have retained their July allowables. Processing of crude oil by District refineries rose slightly in June and early July, but District drilling activity weakened. Total well completions deThe strength of the crude oil market, however, was creased 4 percent during the 5 weeks ended July 7 as somewhat overshadowed by less favorable refined prod- compared with the previous 5-..veek period, and total uct markets in June, but there was some improvement footage drilled declined 5 percent. Further pipeline as gasoline and light fuel oil demand revived in early separations were authorized in areas where deviated July. The seasonally adjusted index of demand for the wells have been discovered. The Texas Railroad Comfour major petroleum products decreased to 106 per- mission's investigation has been extended into some cent of the 1957-59 average in June, principally because southeast Texas counties. The number of rotary rigs of a reduction in gasoline and kerosene demand. active in the District during June declined slightly, but there was little change in the Nation. NATIONAL PETROLEUM ACTIVITY INDICATORS (Seasonally adiu sted indexes, 1957·59 Indicator CRUDE OIL RUNS TO REFINERY STILLS (dally average) •..•.. • •. " • • •• • . .. • • DEMAND (daily average) Gasoline .. .. • • • . • • • •• • . • • • . • • • . . . • . Kerosene . . • • . . • • . . • . . . • . . . . . . • . . . . Distillate fuel oil.... .. .. . . .... . . . ... . Residual fu el all.. . . . .. . . . • . . . . . . . . . . Four refln e d products. • • • • . . • . . . . • . STOCKS (end of month) Gasoline.... . • . . • . . •• . • • . . • • • • . . . . . Kerosene... . .. . .. ...... .. .. .. . . .. . Distillate fu el ail........ . .... ...... .. Residual fuel oil.. . . . •. • • . . •• . •• . •• • . Four reflned products . • • . • . • • • . . • . • p - Pre liminary. SOURCES , Ame rican Pe troleum Institute. United States 8ureau of Mines . Federal Reserve 8ank of Dallas. BUSINESS REVIEW 12 8: 1962 June 1962p = 100) May 1962p June 1961 111 107 102 104 154 116 92 106 107 177 109 93 108 104 145 101 82 101 106 114 108 83 104 101 114 110 82 102 104 116 100 88 101 The Texas industrial production index rose 1 point during June to a record 113 percent pf the 1957-59 average. Gains were registered in durable and nondurable goods manufacturing, while mining output remained unchanged. Increased output of transportation equipment, machinery, and petroleum products waS especially influential in the month-to-month advance. As compared with a year ago, significant increases in durable and nondurable goods manufacturing and a slight gain in mining output resulted in a 6-point rise in the index. All except one of the 21 elements which NONAGR ICUlTURAL EMPLOYMENT VALUE OF CONSTRUCTI ON CONTRACTS Five Southwestern States1 (I n millions of dollars) Percent chong e Jun. 1962 from Number of persons Typ. of .mploym.nt Ar.a and typo 1962. Ma y 1962 196 1r 4,545,400 794,500 3,750,900 240,000 299,600 4,531,900 785,400 3,746,500 240,200 295,800 4,475,700 778,900 3,696,800 244,400 301,300 385,700 1,095,100 229,700 620,000 880,800 379,600 1,089,500 227,000 61 7,700 896,700 393,600 1,082,700 223,800 602,700 848,300 June June May 1962 Ma nufacturing . . . . . . • . . .. Nonmanufacturlng • •.• •. . • Mining .. . . . . . .. o • • • • • Construction • •• • • • •• • •• fiVE SOUTHWESTERN STATES' . . . ... .. . . . . .... Resld . ntia l building ••• •• • • 0.3 1.2 .1 - .1 1.3 1.6 2.0 1.5 -1.8 -.6 Nonresid entia l building . . . . 1.6 .9 1.2 .4 - 1.8 - 2.0 1.1 2.6 2.9 3.8 Transportation and public utilities .. .. . . .. Trod • •. • • •••• • ••• • .•• Finance ••• • .••• • •••.• • S ervice ..... .. . . • •. . . . Government • ••• ••. . ..• Arizona, louisiana, New Mexico, Oklahoma, a nd Texas. • - Estimated. r - Revi sed. SOU'RCES , State employment agencies. f edera l Res. rv. Bank of Dallas. 1 April 1962 May 196 1 1962p 1961 385 173 134 78 4,009 1,819 1,275 915 376 190 90 97 3,860 1,8 16 1,102 943 340 161 114 65 3,501 1,553 1,105 843 1,800 799 562 439 17,180 7,524 5,420 4,236 1,676 691 52 1 464 14,6'39 6,207 4,779 3,652 June 196 1 Total nonagricultural wag e and salary workers •• Janua ry-May May 1962p Public works and utillU. s• •• UNITED STATES .. . .... . ... . R. sldential building • ••• ••• Nonresidential building . . . . Public works and utilities • .. 1 Arizo na, l ou isiana, New Mexico, Ok lahoma , and Te xas. Pre liminary . p - NOTE . - Details may not add to totals b.caus. of roundi ng. SOURCE, f. W. Dodge Corporation. crease in unemployment. In June 1961, the Texas unemployment rate was 6.1 percent. The value of construction contracts in the five comprise the index were higher in June 1962 than a southwestern states increased 2 percent during May to year earlier. a new high of $385 million for the month, as records Nonagricultural employment in the five southwestern were attained in both residential and ' nonresidential states increased slightly during June to a new high of building. Nonresidential building advanced substan4,545,400 persons. A moderate decrease in govern- tially from the reduced April level and more than offset ment employment - mainly associated with the ending a moderate decline in residential construction and a sigof the regular school year - and a fractional decline nificant decrease in public works and utilities activity. in the number of mining workers were more than offset The value of contracts awarded for the first 5 months by gains in all of the other categories. As compared of 1962 totaled $1,800 million, more than 7 percent with June 1961, nonagricultural employment this year above a year ago, as gains in residential and nonresiwas 2 percent greater, as employment declines in trans- dential building - both at record levels - offset a portation and public utilities, mining, and construction decline in public works and utilities. Were outweighed by gains in all other sectors. Unemployment in Texas increased to 186,600 persons, or 5.0 percent of the civilian labor force as compared with 4.2 REVISED BOOKLET AVAILABLE percent in May. The usual influx of students seeking Summer positions was mainly responsible for the inA booklet entitled An Economic Fact Book, INDUSTRIAL PRODUCTION p repa red by the Resea rch sta ff of t his Bank and initially published in Februa ry 1958, has (S. asona lly adiusted indexes) been revised and updated. This publication May April June June contain s sta tistical d ata for the Eleve nth Dis1962 196 1 1962 Ar.a and typo of ind.x 1962p trict sta tes, mostly by la -yea r inte rva ls TEXAS (1957·59 = 100) 107 11 2 110 113 Tota l industria l production ... ..... th rough 1950 and annually f rom 1950 122 11 5 122 124 Manufacturi ng. • • • • • .. • • • • . . • 11 6 109 11 5 Durab l. .. . ..... . .... . . . . . 11 8 through the latest yea r fo r w hich d a ta are 119 127r 127 128 Nondurabl. . • • • • • .. • • • • • • • 97 95 99 Mining .. .... ... ..... . .. .. .. 99 available. No ana lysis or interpretatio n of UNITED STATES (1957 = 100) 11 0 11 7 11 8 11 8 Total ind ustria l production....... • t he data is p rese nted. Sing le copies may be 111 11 7 118 Manufacturing . • • • • • .. • • • • . • • 11 8 105 11 3r 114 Dura bl...... .. . .... . .. .. . 11 4 obta ined, fr ee of cha rge, upon di rect req uest 117 123r 123 Nondurabl.. • • • • • •• • • • . • • • 124 98 10 1 100 Mining . ..... ...... ...... ... 102 to th e Resea rch Depa rtment of the Federa l 131 137r 140 Utiliti.s. . .. . ... . . . . ... .. •• • • 141 Reserve Ba nk of Dallas. p Preliminary. r - Revised . SOURCES, Board of Governors of the federal Reserve Syslem . fede ra l Reserve 80nk of Dallas. • BUSI NE SS RE V IE!W 8 :1962 1 13\ BANK DEB ITS, END-OF-MONTH DEPOSITS AND ANNUAL RATE OF TURNOVER OF DEPOSITS CO N DI TION STATISTI CS O F A LL MEMBER BA N KS E)eve nlh Fe d e ra l Reserve Dis tr ict (Dollar amounts in thousands) (In mill ions of do ll a rs ) De bits to de mand de posit accounts l Jun e 1962 Are a May 1962 1961 Annual rate of turnover June 30, 1962 June 1962 May 1962 196 1 June June 426,535 6 60 $ 173,365 30.6 29.8 23.3 M onroe • . •• .. • •• . •• • Shrevep ort •• • •. .. • .. 87,544 315,693 - 9 -7 5 -9 54,695 177,048 19.8 21.7 2 1.7 23.0 19.9 23.6 57,802 -3 22 38,433 17.8 17.9 16.1 Amarillo . • ... • •• •.• • Austin . . .•.. . • . •••• • Beaumont . .•.. • ... " Corpus Christi . • .. .. .. Cors icana •.. . . • ... . . Dallas • • • •.• . • • • •. •• EI Paso •.• . • . • •. •• •• Fort Worth •• .• •• •• •• Galveston . . .. . . . . .. . Houston •••• • • •• ••• • Lore do •.• . •• ••••• •• Lubbock •••• • .•• • • • • Port Arthur • •• • • • ••• • Son Ang elo • •• . • • .. • San Antonio •. .. .. • •• Texarkana ' •.. . ... .. Tyler •• • . • . • . • . • • . . • Waco . . ... . . . . . .. . . Wichita Falls . • • • •• •• Ma y 30, 1962 June 28, 196 1 loans an d discounts•... .. . . •... . ... .. . . . Unit ed States Governm ent obligations • .. . . . Oth er securiti es • • .. . . . . ... • . • .•• ••••..• Rese rves with Fed eral Reserve Bank . • • . .. .. Ca sh in va ult e •• . • .... . . . . . . • • . .• .• . •.• Ba lanc es with banks in th e United States . . . . Balances with ban ks in foreign countri os o.. .• Ca sh ite ms In process of coll ection • • . . • .. . . O ther a sse tse • • • . • ..• • ••• •• ••.. •• •• . ••• 5,784 2,789 1,048 963 168 1,123 3 590 304 5,649 2,798 1,048 957 16 1 1,076 3 486 256 5,11 2 2,66 3 9 12 853 160 1,199 2 534 347 TOTAL ASSETse ••• . . .. .. . • . . .. •• .. . • 12,772 12,434 11 ,782 1,271 6,892 3,286 1,175 6,684 3,25 1 1,248 6,533 2,756 Total capital a ccounts O • •• •••• • • •• • • ••••• 11 ,449 89 146 1,088 11 ,11 0 98 138 1,088 10,537 40 191 1,0 14 TOTAL LIAB IlITIES AND CAPITAL ACCOU NTSe •• •. •• ... . • . ... • . • . • .. 12,772 12,434 11 ,78 2 Item ARIZONA Tucson •• . . .. .. . . • . .. $ LOUISIANA NEW MEXICO Roswell •• •• • • . ••• •• • TEXAS Abil ene ••• • • • •• • • . .. Jun e 27, 1962 Demand deposltsl Percent chang e from ASSETS lIA81l1TIES AND CAPITAL ACCO UNTS 11 3,116 -5 233,434 -2 261,786 -19 177,733 -3 203,873 -4 15,761 -7 3,321,909 -7 323,448 -12 863,93 1 2 93,847 -8 3,015,629 -9 32,893 - 7 193,561 -5 64,820 - 6 53,385 - 10 685,894 - 4 26,873 5 97,602 -3 128,841 9 118,285 -3 Total-24 cities . . . .. . .. $ 10,914,195 11 4 16 12 7 -3 4 - 6 4 4 10 18 13 2 - 2 7 21 13 16 0 76,754 118,243 149,560 10 1,809 108,611 19,529 1,291,108 183,701 398,798 63,752 1,440,642 25,300 122,656 42,303 47,247 396,453 17,317 63,399 68,335 96,893 18.0 24.1 21.6 21.2 22.1 9.7 31.0 21.8 26.6 18.1 25.7 15.7 19.1 18.1 13.7 20.9 18.8 18.8 22 .3 14.8 19.3 24.5 27.1 21.7 21.8 10.4 33.1 24.2 26.3 19.7 28.3 16.7 19.9 18.6 14.9 2 1.5 18.1 19.2 20.3 15.1 17.6 22.9 17.8 19.3 21.7 10.2 32.3 24.6 26.2 17.2 25.7 15.6 18.6 17.5 14.0 20.3 15.8 17.3 19.6 14.6 7 $5,275,95 1 25.2 26.8 25.0 -6 Demand d eposits of bank s • .•• • .••• . . . . .. Other deman d deposits • .. • • • • . • . • . •. . . .• Time de posits • • •• • ••• . ..••••••••••••••• Total deposits •• ••. • . • •.. • • . . • •••• • •• Borrowing se •. . • ..• •• • • • ••• •. • ••• . • ..••• Other liobillties e .. .. . . .... . .• .••••••••• e - Estimated. GRO SS DEM AN D AND TIME DEPO SITS O F MEMB ER BAN KS E)eve nt h Fed eral Reser ve Dis tri cl (Ave rag es of dolly flg ures. In millio ns of dolla rs ) 1 De posits of ind ividual s, partne rshi ps, and corpora tio ns and of states and' political subd ivisi ons. !! Th ose figures include only two banks in Texarkana, Te xa s. Tota l de bits for all ba nks in Tex ar kana, Texas-Arkan sa s, includ ing on e bank l ocated in th e Eighth D istric t, amounted to $58,074,000 for the month of June 1962. CO NDITIO N O F THE FEDERAL RESERVE BANK O F DALLAS GROSS DEMAN D DEPOSITS Da te Total city banks bon ks Total city bonks Country banks 1960: June • • • •• • 1961 : June ••. • .• 1962. February .• • 7,473 7,752 8,234 8,Q99 8,148 7,973 8,144 3,726 3,829 3,965 4,034 3,963 3,923 4,062 3,747 3,923 4,269 4,065 4, 185 4,050 4,082 2, 191 2,745 3,107 3,125 3,234 3,266 3,267 1,098 1,380 1,577 1,596 1,625 1,654 1,651 1,093 1,365 1,530 1,529 1,609 1,612 1,616 M a rch • ••. . April •• •... May ••.• . . (In tho usands of do llars) June • • . • •• Item July 18, 1962 June 20, 1962 July 19, 1961 Tota l gold certiflcote rese rves . • •• • •• •• • . • .. • Discounts for memb er banks •• . • .• .. .• . • . .• • Other d iscounts and advances • •• • •• • ••. . . . . U. S. Governm ent se curiti es • • • . •• . •• •••• •••• Tota l ea rning a ssets ••• . . . ••• • • . • ....... • .. M emb er bank reserve d eposits• •• •• • . . . • . • . • Fe d era l Rese rve notes in actual circulation • .• • • 596,999 55,850 840 1,172,721 1,229,41 1 958,115 866,628 674,375 2, 180 2,979 1,187,956 1,193,11 5 989,888 846,126 703,730 5,974 TIME DEPOSITS Rese rve Coun try Reserve BUILDING PERMITS o 1,079,068 1,085,042 908,634 838,688 VALUATIO N (Dollar amo unts in tho usands) - Percent cha ng e NUMBER June 1962 from 6 months, Area DA ILY AVERAGE PRODUCTIO N O F CRUDE OIL June 1962 6 mos. June 6 mos. 1962 1962 1962 May 1962 196 1 Juno 1962 from 196 1 ARIZONA (I n tho usands of barre ls) Tucson ••• • . .. . 746 4,824 269 146 3 12 346 329 283 3,036 564 659 198 1,762 188 11 2 91 141 1,363 22 1 125 $ 2,867 $ 18,184 11 - 39 - 26 1,834 1,027 10,228 -73 - 64 - 52 848 1,792 2, 104 1,835 1,850 15,133 3,067 3,981 1,379 16,827 1,554 727 538 926 7,867 1,387 853 1,566 4,495 3,563 1,336 2,469 44,790 4,799 2,935 926 34,p48 2,273 3,03 1 1,196 368 3,992 968 1,069 12,053 - 27 -33 20,807 66 -27 34,576 -5 1 -19 9,375 - 36 -29 10,526 45 36 128,618 147 265 25,5 18 7 - 6 25,773 - 8 -50 11,965 -25 200 185,2 15 0 ,27 20,399 -43 -5 10,341 74 184 5,054 91 -49 2,547 - 6 -44 30,710 -30 - 27 8,907 -35 37 7,21 6 - 38 - 14 43 4 18 20 6 22 -30 -18 297 42 - 13 38 69,326 $ 11 8,3 18 LOUISIANA Percent chang e from June Area ELEVENTH DISTRICT. ••• . . . • Texa s. • .. . . ••• • •• • • •.•• Gulf Coast • .• • •••• •. •• W est Texa s • . •• • .. ••• . Ea st Texa s (proper) • • • •• Panhandle •• .•. . • . •. •• Rest of State •• . .•. •• .• South ea stern N ew M exico •• North ern louisiana . • . ••••• OUTSIDE ELEVENTH DISTRICT . UNITED STATES .. ........ . . p - 1962p 2,943.8 2,546.9 473 .4 1,148.0 125.9 104.0 695.6 269.9 127.0 4,306.9 7,250.7 May 1962p 2,931.9 2,535.1 468.8 1,136.5 125.2 104.2 700.4 270.8 126.0 4,329.6 7,26 1.5 Pre lim inary. SOURCES : Am e rican Petroleum Instit ute. United States Bureau of Mi nes. Federa l Reserve Bonk of Dallas. BUS I NESS REV I EW 14 8 :1962 June 1961 2,902.2 2,510.6 450.9 1,143.0 126.2 109.8 680.7 262.8 128.8 4,200.6 7,102 .8 May 1962 0.4 .5 1.0 1.0 .6 - .2 - .7 - .3 .8 -.5 -.2 June 1961 1.4 1.4 5.0 .4 -.2 -5.3 2.2 2.7 -1.4 2.5 2.1 Shre veport •• • • TEXAS Abilene • .• • ••• Ama rillo •. .. . . Austin . . . . • . . • Bea umont . . ..• Corp us Christi . • Dalla s •• ••.. .. EI Pa so . .. . • .. Fort Wort h •• .• G a lveston • • . •. Houston • ..•• • Lubbock • ••• • . Midland . .•. . . O dessa ....• • • Port Arthur • .•• San Antonio . . . Wa co . • . ... . . Wichita Falls •• Tota l- 19 cities • • 10,891 $578,0 12 19 33 - 32 -38 13 - 9 -39 11 -
@FedFRASER