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business
•
revIew
december 1970
FEDERAL RESERVE
BANK Of IllALLAS
This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org)
contents
SDR's - a new asset
supplementing reserves for growth
in free world trade . . . . . . . . . . . . . . . . . . . . . . . . ..
3
District agriculture:
Crops rebound in 1970
9
District highlights .......... :,..... ... .. . ... .. .
15
SDR'sa ,.ew asset supplementing ,-ese,-ves
10'- g,-owth in I,-ee wo,-ld trade
A new international reserve asset became
available to the monetary authorities of the
world on January 1, supplementing such other
reserve assets as gold, convertible currencies,
and automatic claims on the International
Monetary Fund. Created after years of arduous
discussion among member nations of the IMF,
~he new monetary unit - SDR's (special drawing rights) - provides the essential basis for
freeing the growth of international reserves from
dependence on such uncertain forces as gold
markets and the balance-of-payments positions
of reserve currency countries.
Altogether, $3.4 billion in SDR's was created
at the start of 1970. Not only was this a considerable addition to the world's reserves, but
the total is slated to grow another $3 billion
a year for the next two years, reaching a cumulative total of $9.5 billion in 1972.
Of the amount created so far, the United
States has been the largest recipient. This country received an initial allocation of nearly $867
million - roughly a fourth of the world's
SDR's. In addition, during the first eight months
~f 1970, the United States made a net acquisihan of more than $94 million, pushing the
~ation's total SDR holdings to over $961 milhan - well above the combined holdings for
all continental Europe.
Experience ill 1970 seems to indicate that
SDR's may become a viable supplement for the
eXpansion of international reserves in response
to the needs of world trade and finance. A carefU l appraisal of the first year's experience is
Planned for a future Review article.
The Cl./lrrent system
The free world's current international monetary system dates from the Bretton Woods
Conference of 1944. Under this system, each
member of the IMF fixes a par value for its
currency and undertakes to maintain this value
within 1 percent of parity. Rates are expressed
in terms of either gold or the U.S. dollar. Consequently, where in principle the values of currencies are maintained in terms of gold, in
practice they are stated in terms of the dollar.
This is because of the now long-standing U.S.
pledge to trade gold with foreign governments
and central banks at the established rate of $35
an ounce. With such a pledge, a currency
valued relative to the dollar actually reflects the
fixed value of the currency in terms of the
official price of gold.
The supply and demand for currencies arising from international transactions converge
in foreign exchange markets. There, monetary
authorities of countries belonging to the IMF
buy or sell enough of their currencies to keep
values within the official spread. To keep the
value of their currencies from rising above the
official selling price, monetary authorities supply the market with their currencies by buying
up other currencies. Conversely, to keep the
value of their currencies from falling below the
official buying price, monetary authorities use
foreign currencies in the exchange market to
buy up their own currency.
This system of currency convertibility at
stable exchange rates requires that the monetary authorities of every member country main-
business review/december 1970
3
tain a stock of foreign reserve assets that can
be used to intervene in the foreign exchange
market. The U.S. dollar is the principal intervention currency used in these transactions, the
others being the pound and the franc, which
are used in markets dominated by British and
French currencies. With the dollar so important
to the international monetary system, the
United States must maintain a stock of gold and
other reserve assets to ensure the convertibility
of dollars presented by foreign monetary authorities for redemption.
The International Monetary Fund was established through initial subscriptions of gold and
currency totaling the equivalent of $8 billion.
Twice, quotas were increased across the board,
in 1959 and again in 1966, bringing the fund's
total resources to the equivalent of $21 billion.
Another important step in the strengthening of
the international monetary system was taken in
1962, when ten major countries agreed, if necessary, to lend the fund the equivalent of up to
$6 billion. Then, early this year, the Board of
Governors of the IMF adopted a resolution
calling for a one-third increase in quotas.
Reserves before 1970
Despite efforts to strengthen the IMF and
promote the smooth functioning of the international monetary system, total world reserves
(gold, foreign exchange, and reserve positions
of countries at the IMF) expanded slowly in
the 1960's. Problems with changes in the composition of reserves and declining confidence in
the convertibility of major reserve currencies
also emerged. Recognition of the implication of
these problems for the international monetary
system led eventually to the adoption of SDR's.
from $119.4 billion in 1960 to $254 billion in
1969, or at an average annual growth rate of
nearly 10 percent.
Not only did trade grow more than three
times as fast as reserves - creating concern
that reserves might not long be adequate for
the demands of trade - but the composition
of international reserves also changed. Where
monetary gold stocks had accounted for almost
two-thirds of international reserves in 1960, by
the end of the decade they accounted for little
over half.
The shift in the composition of reserves made
foreign exchange (holdings of key currencies,
primarily the dollar and the pound) an increasingly important component of total reserveS.
In 1960, foreign exchange made up 31 percent
of international reserves. By the close of 1969,
it made up 40 percent. Reserve positions at the
IMF almost doubled in the 1960's, largely as a
result of the increased quotas members of the
IMF agreed to in 1965. 1
The growing importance of foreign exchange
was due almost entirely to the increase in dollardenominated liabilities of the United States held
as reserve assets by other countries. The acCUmulation of U.S. dollar foreign exchangewhich resulted mainly from balance-of-payments surpluses of other countries built up as
the counterpart of the large, prolonged V.S.
balance-of-payments deficit - accounted for
most of the growth in reserves. Total foreign
exchange reserves increased $12.2 billion over
the decade. Of that, $4.9 billion was in dollar
liabilities, which grew at an average ,annual rate
of 4.9 percent, compared, for example, with all
. . nal
Reserve positions at the IMF are uncondltl o b
assets arising from a country's gold subscription to t t~
fund and the IMP's use of tbat country's currencY £
finance drawings of other countries and purchases ~t
gold: Gold subscriptions fo~ original members wer~ Sot
at either 25 percent of theil' quotas or 10 percen n
their net official holdings of gold and U.S. dollars ~e
September 12, 1946, whichever was less. The sa .
formu la has usually been followed for new mem bers
1
World reserves at the end of 1969 totaled
$76 .9 billion, compared with $60.5 billion at
the end of 1960. This represented an average
annual increase of only 3 percent. Meanwhile,
world trade (measured by total imports, including the cost of insurance and freight) expanded
average growth of 2.2 percent in sterlingdenominated assets.
Another problem for the international payments system was recurrent currency crises in
the 1960's. Speculative fever hit the Gelman
mark in 1961, 1968, and 1969, the French
franc in 1968 and 1969, the Italian lira in 1963,
the British pound in 1961, 1964, 1967, and
1968, and the U.S. dollar in 1968.
The international monetary system was able
to withstand the strain of these speculative crises
largely because of cooperative efforts of monetary authorities to counter them. The German
mark had to be revalued in 1961 and 1969.
And the British pound had to be devalued in
1967 and the French franc in 1969. But
through broadly based international efforts,
monetary authorities were able to maintain the
gold exchange rate of the dollar.
Free world trade outpaced
growth in reserves in 1960's
BILLIONS OF OOLLARS
300
r---------------_-.
250
200
150
100
RESERVES
50
1960
1963
1966
1969
1969 r ese rve s es timat e d .
The United States and other countries agreed
in 1968 to no longer supply gold to the gold
market but to let the market price fluctuate
without official intervention. A two-price system was thereby established, with monetary
gold held at its official price and the market
price allowed to fluctuate in response to supply
and demand.
This new type reserve
Since SDR's are merely book entries in a
special drawing account established at the IMP,
they do not represent liabilities of anyone
COuntry, or of the IMF. When a country has
difficulties with its balance of payments or reserve position, its monetary authority can justify
Use of SDR's.
Special drawing rights can be used in transactions between countries either through bilateral agreement or through designation by the
ltvlF. For transactions based on designation, a
cOUlltry wanting to use SDR's can ask the IMP
to designate countries to receive them and the
amOunt eaoh is to receive.
S OURCE : Internation a l Financial Statisti c s .
Special drawing rights cannot be used, however, for a counby to obtain foreign currency
from the pool of currencies held by the IMF.
The fund can issue SDR's without committing
its resources by requiring that designated participants accept SDR's and provide currency
convertible in fact to other members. The ability
of members to obtain convertible currency in
exchange for SDR's is basic to the concept of
this new reserve asset.
Although the unit value of an SDR is equivalent to the "gold content" of the dollar
(0.888671 gram of gold nine-tenths fine),
SDR's cannot be converted directly into gold.
However, since participating nations guarantee
the new monetary unit at tlllS rate, the revaluation or devaluation of a currency cannot affect
the value of SDR holdings. If a currency were
devalued, SDR's would simply command more
units of the devalued currency.
While no country is obligated to treat SDR's
as reserve assets, most countries have chosen
business review/december 1970
5
Foreign exchange expanded .•.
I YEAR-END FIGURES )
BILLIONS OF DOLLARS
Since SDR's are intended to ensure adequate
long-run growth of total reserves, the amount
created is not ordinarily expected to vary from
year to year or in response to the payments
position or reserve needs of individual countries.
Rather, the amount created will normally apply
for a specific period (initially, three years).
The new drawing rights are allocated to participants in proportion to their IMF quotas. Every
country in the fund received an allocation at the
start of 1970 computed at just under 17 percent
of its quota at the end of 1969. Thus, the United
States, which accounted for nearly a fourth of
the fund's quotas, received a sinli lar proportion
of the SDR credits.
Safeguards and limitations
1960
1962
1964
1966
1968
1970
1969 estimated : 1970 estimated for first quarter .
SOURCE ; International Financial Statistic s.
to include them in their international monetalY
reserves. This is because of their fixed value and,
more fundamentally, their transferability into
currencies that are convertible in fact. As a
further inducement to the holding of SDR's, the
IMP pays interest (currently 1.5 percent a
year) on each countlY's holdings in excess of
the amount allocated to it.
Future allocations will depend on global
needs for l:eserves. New allocations are initiated
by the managing director of the IMP. This
official, who is chairman of the fund's executive
board and head of its operating staff, consults
with member nations to determine support for
the creation of SDR's in an amount that would
be acceptable to most IMF members. To become effective, the proposal must be agreed to
by the executive directors of the fund (a group
responsible for its general operations) and approved by participating countries with 85 percent of the weighted voting power of the fund.
6
While the creation of SDR's consists of book
entries in the IMF's special drawing account,
transactions imply eventual transfers of real
goods and services. But because a country surrendering its own currency for SDR's is placing
claims on its real resources or international
reserves directly in the hands of foreigners,
several limitations have been imposed on the
use of SDR's.
One of the most important is the basic rule
of need. Under this rule, countries are able to
.•. as dollar reserves increased
BILLIONS OF DOLLARS
40
I YEAR - END FIGURES )
,----------------'1
30
20
10
o
SOURCE : International Financial Stati s tic s,
How SDR's Were Established
The decision of IMP members to create a
new international reserve asset resulted from
several years of deliberation. All inquiry into
the feasibility of creating such an asset was
started in 1963. Many of the characteristics
of a possible agreement began to emerge in
1966, and by August 1967 many of the
essential features of SDR's had been outlined.
This outline was approved unanimously
by tlle IMP's Board of Governors in September, and a proposed amendment to the international agreement establishing the fund was
use SDR's unconditionally but are expected to
do so only to meet balance-of-payments needs
in the light of developments in their aggregate
reserves. This means, in essence, that SDR's
can be used to forestall or offset a drop in other
reserves resulting either from a deficit in a country's balance of payments or from a desire on
the part of other countries to convert balances
of the using country's currency into gold.
But although their use can change the composition of a country's reserves, SDR's are not
expected to be used for that purpose. This rule
protects other countries from the risk of a participant using SDR's simply to get rid of them.
If a country violates the rule of basic need, the
IMP can direct subsequent transfers to the offending country. If that fails, the fund can
sUspend the participant's right to use SDR's
altogether.
Countries that use SDR's are obligated to
satisfy a rule that a country's average net use of
SDR's over a five-year period must not exceed
70 percent of its average cumulative allocation.
A. country can exceed the 70-percent use rate
during the five-year period but must have re-
developed for presentation to the Board of
Governors in May 1969. It was promptly
approved and sent to member governments
for ratification.
The amendment became effective on July
28, 1969, following its acceptance by threefifths of the member countries, representing
four-fifths of the voting strength in the fund.
By early August, 85 percent of the members
became participants in the new SDR system
and machinery could be activated to allocate
SDR's to all members.
stored its reserve position by the end of the
period. This reconstitution rule limits the extent
to which countries can use SDR's to finance
persistent external deficits.
Although reconstitution can be exacted for
the overuse of SDR's, the quality of the asset is
not significantly impaired by tlle reconstitution
rule. This is because 70 percent of a country's
cumulative allocation does not have to be reconstituted and, therefore, makes up a stock of
reserve assets tllat are available to the country
unconditionally.
There are also limits to the amoLint of SDR's
a country must accept. Although countries designated by the IMP are obligated to accept
SDR's in exchange for currency that can be
converted, the IMP is nOlmally expected to
designate only countries tllat are running a
surplus in their balances of payments or have
built up appropriate reserve positions. Even
then, the country has to accept SDR's up to only
three times its cumulative allocation. It has met
its obligation, in other words, when its holdings
in excess of its net cumulative allocation reach
twice the amount of its allocation. These limits
business review/ december 1970
7
ALLOCATION AND USE OF SDR'S
(In millions of U.S. dollars)
Pa rticipant
Industrial countries
United States ..
United Kingdom .. . . .
Industrial Europe ... .
Austria . .
Belgium . . . . . .
Denm a rk ...... . . .
France ....... .
Italy . . .
Luxembourg . . . . . .
Netherlands
Norway
Sweden . . .
West Germany
Canada .. . .... . . .
Japan
Other developed areas . .
Less developed areas .. .
Latin America . .. .. .
Middle East .. .
Other Asia ... . . . . . . .
Other Africa
Participant holdings .
Fund holdings
Total ....
Allocations,
Jan . I,
1970
$2,276.2
866.9
409.9
753.3
29.4
70.9
27.4
165.5
105.0
3.2
87.4
25.2
37.8
201.6
124.3
121.8
284.8
853.1
330.0
77.4
277.7
168.0
3,414.0
Net
receipts
or
use (-)
$ 84.6
94.3
- 120.8
69.9
8.8
23.0
-10.0
2.0
-29.4
25.1
2.0
48.5
20.4
20.7
-39.3
-298.4
-38.5
-66.1
-142.1
-51.6
-253.2
253.2
3,414.0
.0
Holdings,
Aug. 31,
1970
$2,360.8
961.2
289.2
823.2
38.2
93.9
17.4
167.4
75.6
3.2
112.4
27.2
37.8
250.1
144.7
142.5
245.5
554.6
291.5
11.3
135.6
116.3
3,160.9
3,414.0
NOTE. - Details may not add to tota ls ·because of round·
ing.
SOURCE: International Financial Statistics.
protect participants from obligations that may
be too heavy.
Some tentative implications
Experience with the use of SDR's seems to
indicate the emergence of an acceptable international reserve asset. Special drawing rights
have been transferred freely and used in accordance with the rules of the agreement under
which they were established.
There have been few SDR transactions by
mutual agreement. And as expected, where
there have been such transactions, they · have
been mostly cases of a country obtaining balances of its own currency from another country.
8
The United Kingdom, for example, transferred
SDR's to West Germany in exchange for an
equivalent balance of sterling. And the United
States transferred SDR's to Belgium and the
Netherlands in exchange for dollar balances.
There have, however, been a number of
transactions by designation. Most of the designations have been on the basis of strength in
balance of payments and accumulation of reserves. Those designated to receive SDR's have
usually been industrial countries, such as the
United States, Canada, Japan, Germany, Belgium, and the Netherlands. But they have also
included such less developed countries as
Argentina, Brazil, Chile, Kenya, Korea, Malaysia, Mexico, and the Congo.
Several countries with balance-of-payments
problems or low currency reserves have used
their SDR allocations to restore their reserve
positions with the IMF.2 They have included
Italy, Greece, Turkey, Yugoslavia, Egypt, Israel, and the United Kingdom.
The smooth working of the designation process suggests that an orderly expansion of SDR's
can help provide a means of reconciling the
objectives of both surplus and deficit countries.
Since most governments try to increase reserveS
with the expansion of their international trade
and growth of domestic income and production,
the total stock of internationl reserves must
also increase.
If appropriate growth of international monetary reserves can be ensured by the creation of
SDR's, the international monetary system can
Largely avoid situations in which one country
gains reserves only at the expense of other
countries. In the past, if total reserves did not
increase fast enough to keep up with the increase in international transactions, the outlook
~ In the first eight months of J 970, the IMF acquired
slightly more than $250 million in SDR's, mostly fronl
countries paying charges on their IMF drawings or repaying the drawings.
was for a shortage in reserves. Surplus countries
tended to adopt policies designed to conserve
their reserve assets, and deficit countries tended
to adopt policies designed to gain reserves.
Together, these two types of policy tended to
restrict trade and finance, leading to restrictive
economic policies and frequently to direct controls over private international trade and payment flows.
By providing for orderly and adequate growth
of monetary reserves for all countries, SDR's
may also serve as a mechanism for accommodating the goals of bOtll surplus and deficit
countries. Continuation of the trends seen in
1970 should serve the International Monetary
Fund's final purpose - the promotion of freer
flows of world trade and payments.
LACY H . HUNT, II
Dist,.ict ag,.icultu,.e:
C,-ops ,-ebound in 1970
Livestock has accounted for most of the
growth in farm income in the Eleventh Federal
Reserve District states in recent years. The increase in agricultural production in these states
(Arizona, Louisiana, New Mexico, Oklahoma,.
and Texas) has been due primarily to the rapid
expansion of cattle feeding. Also, livestock
prices have been generally more favorable than
crop prices. The trend changed this year, however, with crop output rising as fast as livestock production. The most significant change
Was the relative improvement in crop prices
since midyear.
The change was due to a combination of
factors. Crop production improved with generally favorable weather conditions throughout
the Southwest, and crop prices increased with
heavier than expected demand. By contrast,
Cattle feeding, which was the main source of
growth in livestock production, slowed as the
high cost of feeders and capital checked the
spread of feedlots . The increase in livestock
prices also, slowed, primarily because of an
increase in supplies of poultry and red meat but
also because of sluggish consumer demand and
the slower pace of general economic activity.
These changes. are not expected to affect tota l farm income significantly, however. Higher
prices for crops in the second half of the year
will probably more than offset the lower prices
for livestock, leaving farmers and ranchers in
the five southwestern states with a total gross
income exceeding the $6.6 billion they earned
last year. But with costs of agricultural production increasing faster than gross income, their
total net income will probably not improve.
Crop production
District crop production is expected to total
3 percent higher than in 1969. Although production of winter wheat declined, production
of cotton, rice, and sorghum grain was up, as
was the output of most minor crops.
Prospects for the cotton crop in these states
have been placed at 4.7 million bales . That is
business review/ december 1970
.9
Texas livestock prices weaken
but crop prices gain in 1970
Although rice acreage was reduced 15 percent in both Louisiana and Texas, prospects
are for a slight increase over last year's production. Yields are expected to average 4,000
pounds per acre in Louisiana, compared with
3,400 pounds last year, and 4,750 pounds per
acre in Texas, compared with 3,950 last year.
( 1910-14 = 1001
Gains can be expected in most minor crops,
which together account for about a fifth of the
total value of crop production in the five
states. Harvests of corn, oats, barley, rye, hay,
and peanuts are larger than in 1969, although
harvests of flaxseed, potatoes, and pecans will
probably be smaller.
300
200
1969
1970
SOURCE : U. S . Department of Acriculture .
7 percent more than in 1969 although 10 percent less than in 1968. The expected increase
is due to increases in both acreage and expected
lint yield.
With an 8-percent increase in acreage, the
Texas cotton crop will probably be 17 percent
larger than a year before. Acreage for harvest
was up 7 percent in Louisiana, but other District states have smaller cotton acreages this
year. Acreage was off 12 percent in Arizona,
4 percent in New Mexico, and 3 percent in
Oklahoma.
Unfavorable weather late in the crop season
and a smaller acreage allotment combined to
reduce wheat production in District states by
15 percent. By contrast, with an acreage increase of only 1 percent, the sorghum grain
crop is expected to be 12 percent larger than
in 1969. Total production of sorghum grain
will probably approach 412 million bushels.
This, along with the 112-million-bushel carryover of old-crop grain, should approach the
supply on hand in these states a year ago.
10
Prospects are for citrus crops in Arizona and
Texas to total 22.5 million boxes - 11 percent more than last year. Large increases in
the orange crop are expected in both states,
and the grapefruit crop will be larger in Texas.
Prospects for citrus crops in Florida are also
up sharply.
Livestock production
District livestock production is expected to
show a 3-percent gain over 1969. As in other
recent years, the prospects for gain result
mainly from increases in beef production.
As more marginal cropland was converted
into pastures, especially in the eastern part of
the District, and more pastures were improved,
the number of beef cattle in the Southwest continued to climb, reaching 20 million head at
the start of 1970. The increase, spurred by
continued demand for beef and rising prices
for feeder calves, was in line with a 10ng-terJJl
trend that has nearly doubled the number of
head in District states since 1950.
Production of fed beef continued to increase,
though not nearly as fast as in previous years.
The number of cattle on feed in states of the
Eleventh District soared in the second half of
the 1960's. With the rapid growth in feedlots ,
especially in the High Plains, four of the states
- Arizona, New Mexico, Oklahoma , and
Texas - came to account for nearly 18 percent of the nation's cattle on feed at the start
of the 1970's, compared with 9 percent at the
start of the 1960's. But with a general shortage
of feeders and a steady ri se in costs of feedlot operations (feed and feeder cattle, capital
and labor, and construction of lots), the rate of
expansion slowed markedly. There were slightly
more than 2.2 million head on feed in District
states on October 1. That was alm ost 42 percent
more than on that date in 1968 but only 2
percent more than at that time in 1969.
This net gain was made despite a 2-percent
decline in the number of hogs slaughtered. The
decline in the hog slaughter in the first nine
months of 1970 was in line with a reduction in
the number of hogs and pigs in these five southwestern states at the end of 1969. With favorable prices, the number of hogs increased
rapidly in the first half, especially in Texas,
where the number on farms at midyear was
nearly a fo urth greater than a year earlier.
Even with this slowing in cattle feeding, however, beef slaughter in District states conti nued
to advance. Through September, tl1e beef
slaughter was 3 percent greater than in the
first nine months of last year. The increase,
with a gain of 11 percent in the slaughter of
sheep and lambs, pushed red-meat production
3 percent ahead of a year before.
The number of sheep to be shorn in these
states declined fractionally this year, and the
number of goats declined 10 percent. Mohair
production was also off 10 percent. But because
fleece averaged 3 percent heavier, wool production was probably higher than last year.
Production increases in New Mexico and Texas
more than offset declines in the other three
states. Production of lambs was also probably
higher than in 1969.
Livestock production .. •
. .. and crop production grow apace
FIVE SOUTHWESTERN STATES
FIVE SOUTHWESTERN STATES
II
I
•
CATTLE ANO CALVES
BROILERS
I
•
HOGS
0
I
I
ALL LIVESTOCK ANO
PRODUCTS
r-25
I
- 20
I
-15
SORGHUM
GRAIN
CORN_
I
WOOL
OATS
_
BARLEY
LAMBS
I
I
I
I
I
-10
-5
0
+5
I
+10
PERCENT CHANGE.
1970 FROM 1969
1970 partly ~s t imatod .
SOURCES : U .S. D e p a rtm e nt of Agriculturo .
F e d e ral Reser v o Bnnk of Da lla s.
RICE
COTTON.
MILK
TURKEYS
I
I
PEANUTS
WINTER ~-----'I
WHEAT L -_ _ __ ~.
_
EGGS
I
MOHAIR
HAY
I
I
I
+15 +2 0 +25
I
- 25
I
I
I
-2 0
- 15
- 10
ALL CROPS
I
I
I
-5
0
+5
I
+10
I
I
I
+1 5 +20 +25
PERCENT CHANGE .
19 70 FROM 196 9
1970 i nd icated N ovembe r l.
SOURCE : U. S, D epar t mont
Agriculture .
0'
business review/ december 1970
11
Egg production increased in Arizona, New
Mexico, and Texas but declined in Louisiana
and Oklahoma, leaving total production about
the same as last year. Prices in the first quarter
averaged higher than a year before but have
since averaged lower.
Broiler production through October indicates
a 7-percent increase for the year. As a result
of this increase, which is the same as last year's
gain, commercial broiler prices declined. Prices
in Texas averaged 12 percent lower in the first
ten months than in the same period a year
before. With live-turkey prices in the first quarter averaging 40 percent higher than in the
same period last year, this year's turkey production is expected to be 19 percent higher.
In sharp contrast to the downtrend since
1950, the total number of dairy cows in these
states is almost the same as last year. But in line
with trends toward greater efficiency in milk
production, output in the first ten months of
the year was 2 percent greater than in the same
period last year.
Net farm income
Although farmers and ranchers of the Southwest can probably expect total annual gross
farm income to have continued its increase of
recent years, production costs apparently rose
even faster, holding net income to roughly the
same level as in 1969. In the first nine months
of this year, cash receipts were 3 percent higher
than in the same period last year. Livestock
receipts increased faster than crop receipts during the first half of the year, but shifts began to
occur in the second half as livestock prices
weakened and crop prices improved. Meat supplies have been plentiful since midyear, causing
livestock prices to drift downward. And crop
prices, especially for cotton and grains, are
higher tllan last year. Gains in crop production
and prices, as well as more livestock production,
indicate total cash receipts may have continued
to exceed those of the year before.
12
Net f a rm income advanced little
in the Southwest in the 1960 ' s
FIVE SOUTHWESTERN STATES
BILLIONS OF OOLLARS
-7
.
.....
........
.......
.................
........
......
....
.:::::::: ::: ::::: ::
~~~~~
EALlZ~ ~; ~~~;~~~ ~I~~~~~ ~ ~ j1!
IIIIIIII IIIIIII
IIII IIIIIIIIIiI
IIIIIIIIIIIIIIIIII! 11 IIIi
;;;; 'piiiio'uci' iiiN' 'fx PEN'S'ES;;;;;;; ;;;;; ;; ;;;; ;;;; ;;;;;;
R
/
5
11111111111111111111
111111111/
.....................
..... ............... ..... ........ ...........
..:::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::
...............................................................
........ ............. ............................................
.................................................................
;;;;;
3
,1 1~I'i i· l li i l l l li-i ili il l l l l !m!1 1 1 1I1 1
riEl INCOME
1959
1961
1963
1965
1967
1969
SOURCE : U. S. Department of Agricultur e.
Higher expenses probably offset these gains,
however, leaving net income near the $2 billion
realized last year. Inflationary pressures in the
general economy pushed up fann expenses for
production items, interest, taxes, and wages.
Consequently, costs of production probably eXceeded last year's $4.7 billion outlays by at
least 5 percent.
Nationally, gross farm income in the first
half of the year has been estimated at a seasonally adjusted $56 billion, or $2 billion more
than in the first half of 1969. But since produCtion expenses are expected to rise by at least a
similar amount, net income for the year likely
will be little changed from 1969.
Income in the District and the nation would
have been lower had it not been for a substantial
expansion of exports. Due primarily to gainS
in dollar sales, farm exports totaled $6.6 billion
for the fiscal year ended June 30. That was 16
percent more than in fiscal 1969 and only
slightly less than the record set in fiscal 1967.
Other District developments
Elsewhere in District agriculture, trends established in previous years apparently continued. Preliminary estimates of the number of
farms in District states indicate a continuation
of the long-term movement toward fewer but
larger farm units. Under pressure of laborsaving changes in agricultural technology and basic
changes in the structure of markets in which
farmers and ranchers buy and sell - especially
the spreading gap between production costs
and the prices received for agricultural products - the number of farms in these states
apparently declined more than 2 percent this
year.
The advance in market values of farm real
estate slowed to 4 percent in the year ended
March 1. Tllis slowing, too, apparently followed
a trend. Values increased 5 percent in the year
ended March 1, 1969, and 6 percent and 7
percent, respectively, in the two previous years
FARM LOANS HELD BY PRINCIPAL LENDERS,
JANUARY 1, 1970
Five Southwestern States
(Dollar amounts in thousands)
Type of loan
and lender
Amount
held
Percent of
southwestern
total
Non.real·estate loans
Banks
. ............. .
Production credit
associations ... . ... .
Farmers Home Administration
Total
..... . ... .
$1,502,712
68 %
567,553
127,784
$2,198,049
26
6
100 %
$ 378,891
861,022
1,119,088
1,342,457
26,240
$3,727,698
$5,925,747
10 %
23
30
36
1
100 %
Real estate loans
Banks
.... . . . . . ...... . . . . . .
Federal land banks ....
Life insuranc e companies
Individuals and others . ....
Farmers Home Administration
Total
..
. ... . ..... . .
COMBINED TOTAL .
-------------------------------SOURCE: American Bankers Association.
ended in March. Although market values advanced sharply in Oklahoma -- with tight
financial markets and further slackening in demand for farmland -- values rose only slightly
in Texas and New Mexico, held steady in Louisiana, and eased in Arizona.
With the continued increase in agricultural
activity in District states, farmers and ranchers
increased the amount of credit used in their
businesses this year. The rate of increase is
expected to be less than the 8-percent gain
registered last year, however. With the slowing
in the expansion of farm real estate markets,
loans on fanTI real estate probably grew slightly
less than the average 6-percent gain posted for
the preceding two years. Also, with tighter
money markets, non-real-estate farm loans in
these five states probably did not increase as
much as the unusually high 14 percent in 1969.
With the increase in agricultural credit in
recent years, the mix of institutions supplying
credit to farmers and ranchers in the Southwest
has changed significantly. The amount of nonreal-estate loans has increased at bOtll banks
and production credit associations, with peA's
providing most of the increase. The amount of
non-real-estate loans held by the Farmers Home
Administration has declined. Among suppliers
of farm real estate loans, life insurance companies have registered only a nominal increase
in the last three years, while commercial banks
and Federal land banks have shown considerable gains.
Outlook for 1971
The outlook is for little change in District
agriculture in the coming year. Overall, both
crop production and livestock production will
almost certainly continue to increase, pushing
gross income higher. But production expenses
must also be expected to rise.
The farm program for next year includes the
same general type of price-support system that
has been in effect since 1965. Farmers comply-
business review/december 1970
13
ing with Government acreage controls for cotton and grains will be eligible for both crop
support loans and supplemental direct income
payments. A new acreage set-aside provision
for wheat, feed grains, and cotton has been
included that will allow producers more flexibility in operating their farms.
There is one major change of considerable
importance to the Southwest, however. The
new price-support bill sets a per-crop ceiling of
$55,000 on Government payments to producers
of cotton, wheat, and feed grains. Some 600
growers in these five states received more than
that amount in total Government payments last
year. More than half of them were in Texas.
Many of these growers received over $55,000
for growing one crop and will, therefore, have
major adjustments to make in their farming
operations.
CARL
G.
ANDERSON, JR.
The Colonial Bank of Greenville, Greenville, Texas, an insured nonmember
bank located in the territory served by the Head Office of the Federal Reserve
Bank of DaHas, was added to the Par List on its opening date, November 9,
1970. The officers are: J. W. Munson, President; Allen B. Stephenson, Jr., Vice
President; and Jack Stiles, Vice President and Cashier.
new
par
b"n'~s
The First State Bank of McKinney, McKinney, Texas, an insured nonmember
bank located in the territory served by the Head Office of the Federal Reserve
Bank of Dallas, was added to the Par List on its opening date, November 12,
1970. The officers are: Paul Harden, Chairman of the Board; J. H. Muckleroy,
Jr., President; C. Audie Turrentine, Vice President (Inactive); and Clyde AGeer, Cashier.
The South Texas Bank, Houston, Texas, an insured nonmember bank located
in the territory served by the Houston Branch of the Federal Reserve Bank of
Dallas, was added to the Par List on its opening date, November 16, 1970. The
officers are: Frank A. Liddell, Jr., Chairman of the Board; Joe F. Thomas,
President; Travis L. Wilson, Vice President; and W. J. Moore, Cashier.
14
-
Petroleum activity in the top two producing
states of the Eleventh District, Texas and Louisiana, has been booming for several months.
In response to an impending energy shortage,
regulatory agencies in these two states have
authorized record highs in production rates.
For December, the Louisiana agency kept the
rate at 75 percent of maximum efficient production. The Texas agency reduced its allowable rate from 87.3 percent to 83.5 percent.
Actual production in Texas, however, is expected to be down only slightly.
The energy shortage that precipitated these
high alJowables was brought on by a combination of developments. Electric utilities have
faced unexpectedly high demand for electrical
power. Natural gas has been in short supply as
the result of a gradual decline in known reserves
relative to production. Residual fuel oil has
been scarce and expensive on the importdependent East Coast because of a world shortage of tankers and increasing world demand
for fuel. There has also been a shortage of coal,
a traditional industrial fuel. This shortage has
been due to limitations on mine capacity, strong
export demand, and a shortage of hopper cars.
All these developments have increased presSure on domestic petroleum production - especiaUy in the Eleventh District, where reserves
are great eilOugh for most of the adjustments to
be made.
The seasonally adjusted Texas industrial production index was essentially the same in October as in September. Weaknesses in the aerospace, automotive, and electronics industries
were responsible for a further decline in the
lUanufacture of durable goods. This decline
Was offset, however, by a rise in the production
of nondurables and a strong advance in mining
output. All categories of nondurable production
except leather goods and chemicals registered
significant gains. Utilities were unchanged.
Compared with a year earlier, the October
production index was up only 2.3 percent. The
index would have been down substantially had
it not been for the high levels of oil activity.
Crude oil output was nearly 15 percent higher
than in October 1969. Petroleum refining was
20 percent higher, contributing strongly to a
6-percent rise in nond urable manufacturing.
Together, these advances more than made up for
a 12-percent decline in the output of durables.
Total loans and investments at weekly reporting banks in the Eleventh District increased
moderately in October and the first two statement weeks in November. The advance largely
reflected increased borrowings by finance companies. In the face of a decline in deposits,
banks financed most of this credit expansion by
reducing their balances with other domestic
commercial banks.
In contrast to a moderate decline during the
comparable period a year earlier, total loans
increased $70 million. An advance of $89 million in loans to nonbank financial institutions
resulted largely from the use of bank credit lines
by finance companies. Real estate loans advanced about $17 million, but demands for
most other types of loans remained sluggish.
Business loans declined $7 million. Consumer
instalment loans were off $5 million. And loans
for purchasing or carrying securities fell $2
million.
With the decline in deposits and the increased
loan demand of finance companies, banks made
only modest additions to their investment portfolios during this period. Holdings of U.S. Gov-
business review/december 1970
15
ernment securities declined $32 million, but
holdings of other securities increased $41 million. The increase resulted mainly from acquisitions of long-term municipal obligations.
eral Motors strike. Cumulative registrations for
the first ten months of 1970 were 10 percent
lower tban in the same period last year.
Total deposits declined $104 miUion, despite
a $264 million advance in time and savings
deposits. The substantial $368 million contraction in demand deposits reflected reductions in
all major types of demand deposits, particularly deposits of the U.S. Government and of
individuals and businesses. Much of the decline,
however, stemmed from a considerable decrease
in cash items in the process of collection. The
expansion in time and savings deposits resulted
mainly from a sizable increase in large-denomination CD's held by individuals and businesses.
With greater access to tbe CD market, weekly
reporting banks further reduced their outstanding borrowings from nondeposit sources.
Nonagricultural wage and salary employment
in the five states of the Eleventh District totaled
6,359,000 in October, essentially unchanged
from September. Manufacturing employment
remained weak, declining 0.9 percent from September. Most categories of nonmanufacturing
employment registered only small changes.
There were exceptions, however. Employment
in construction was down 2.7 percent, and employment in government was up 1.5 percent.
Compared with October 1969, total payrolls
rose slightly less than 1.0 percent. This poor
showing resulted from a drop of nearly 6.0
percent in manufacturing and an increase of
only 2.4 percent in nonmanufacturing.
Department store sales in the Eleventh District were 4 percent higher in the four weeks
ended November 21 tban in the corresponding
period last year. Cumulative sales through that
date were 3 percent higber than a year earlier.
Registrations of new passenger automobiles
in Dallas, Fort Worth, Houston, and San Antonio were 6 percent higher in October than
in September but 27 percent lower than in
October 1969. This large decline from a year
earlier can be attributed primarily to the Gen-
16
Softness in demand for labor has raised unemployment levels throughout the District.
Most of the state employment commissions reported increased claims for unemployment
compensation. ,SeasonaUy adjusted unemployment rates for District states were higher in
September than a year before. Except for twO
states, however, the rates were still lower than
the national average of 5.5 percent. September
rates were 4.0 percent of the labor force in
Texas, 4.7 percent in Oklahoma, 5.3 percent
in Arizona, 6.8 percent in Louisiana, and 7.0
percent in New Mexico.
STAlilSTICAL SUPPLEMENT
to the
BUSINESS REVIEW
December 1970
FEDERAL RESERVE BANK
OF DALLAS
RESERVE POSITIONS OF MEMBER BANKS
CONDITION STATISTICS OF WEEKLY REPORTING COMMERCIAL BANKS
Eleventh Federal Reserve District
Eleventh Federal Reserve District
(In thousands of dollars)
(Averages of da ily figures. In thousands of dollars)
Item
Nov. 25,
1970
Nov. 26,
1969
Oct. 28,
1970
Ite m
ASSETS
Federal funds sold and securities pu rchased
7 14,950
6,320,092
557,000
6,243,185
389,972
5,977,082
3,003,940
2,962,681
2,960,231
104,910
103,057
109,2 23
Other securities ••••..•..• ..••.•.••...•••
507
44,937
507
33,241
555
42,751
Other securities ••• . •••.••••••..•••.••...
971
440,303
1,779
426,121
740
393,447
243,840
384,423
646,656
4,719
9,136
736,482
203,558
418,428
643,392
5,445
9,2 39
744,793
125,828
336,024
664,009
11,265
8,390
713,395
under agreements to resell •.•.••••••••••••••
Other loons and discounts, gross •••••.•..•••..••
Commercial and industrial loans •••..•..••.•..
Agricultural loans, exc1lJ d ing ecc
certiflcates of interest •••..••.•...•••...•.
Loan s to brokers and dealers for
purchasing or carrying:
U.S. Government securities •••.•.....•• • •..
Other loans for purcha sing or ca rrying~
.
U.S. Government sec urities ••• •.•••••••••••
loons to nonbank financial institutions:
Sales finance, personal Anance, factors,
and other business credit companies ••••.•.
Other •••••••. . ••••..• • •.•.••...•.. • .••
Real es tate loans •••. • •..•. •. . •.•..•.• . ...•
loans to dom estic commercia l banks ••••.. . •••.
loans to foreign banks •••••.•..•.•••.•.•.••
Consumer instalm ent loans •••••.••.••..•. . •.•
loans to foreign governme nts, offlcial
institutions, central banks, and international
institutions ••••• •.• ••• ••••••.•• •••••••.••
Other loans ............................ ..
Total investments ••••.• •••••••••••••••••••.••
Total U.S. Government sec urities ••• •.•• •• ••. • •
Treasury bills .. .... . ................... .
Treasury certiflcates of in d e bte dn ess ••••••••
Tre a sury notes and U.S. Government
bonds maturing:
Within 1 year ••••.••••.•.••••••••••••
1 year to 5 years •• •.•••••••••.••• •• ••
Afte r 5 years •• •••••• ••••.••• . ••••••••
Obligations of stat es and political su bdivisio ns:
Tax warrants and short-term notes and bills ••
All other .. ............. .............. ..
Other bonds, corporate stocks, and securities:
Certiflcate s re presenting participations in
Federal ag e ncy loans • ••• ..• • •.•••••.•.
All other (including corporate stocks) ..•.••••
Ca sh items in process of collection •.•.•••••••.••
Reserves with Federal Reserve Bank .••••••.•••••
Cu rre ncy and coin ••••.••..•.••.••.••.••••.••
Balances with banks in the Unite d States •.•••••••
Balances with banks in for e ign countries •...•.••.
Other a ssets (includ ing investm ents in su bsidiari es
not conso lidate d) ••••••••••••.••.••..•••.••
°
°
690,944
2,779,982
611,224
2,480,174
967,903
107,665
946,172
135,952
930,424
35,878
°
5 weeks e nd e d
5 weeks e nded
Oct. 7, 1970
Nov. 5, 1969
765,711
710,627
55,084
773,047
-7,336
1,275
-8,611
783,743
728,425
55,318
779,708
4,035
2,314
1,721
732,869
681,317
51,552
722,360
10,509
15,166
-4,657
794,847
605,499
189,348
772,111
22,736
2,315
20,421
793,952
606,819
187, 13 3
772,B74
21,078
4,270
16,808
773,084
595,200
177,884
750,OB6
22,998
13,287
9,711
1,560,558
1,316,126
244,432
1,545,158
15,400
3,590
11,810
1,577,695
1,335,244
242,451
1,552,582
25,113
6,584
18,529
1,505,953
1,276,517
229,436
1,472,446
33,507
28,453
5,054
°
699,268
2,804,791
°
RESERVE CITY BANKS
Total reserves he ld .•• •.• •...•.
With Federal Reserve Bonk ••••
Currency and coin ..• .. .. . •..
Required reserves ••••.••••••.•
Excess reserves . •• . ..• .• .••..•
Borrowings •. • .•.........••..•
Free reserves • .••.• ... •• ..•. ..
COUNTRY BANKS
Total reserves hel d •••. .•.. .. • •
With Fe deral Reser ve Sank •.••
Currency and coin .•. .... .. . .
Required reserves • • ••..• ••.. •.
Excess reserves •.••....•...••.
Borrowings •..•...••••. . ••.•..
Free rese rves •.•... . • ... .• • •••
ALL MEMBER BAN KS
Total reserves he ld ••• .. ...•.••
W ith Federal Reserve Bonk .•• •
Currency and coin •.• • .•••.• •
Requi re d rese rves . •••...•. • • ..
Exc ess reserves ••• ... ••.•••.••
Borrowings • ..• .••••...••••.••
Free reserves • •••.• .•...• •• • • .
-
4 wee ks ended
Nov. 4, 1970
°
CONDITION OF THE FEDERAL RESERVE BANK OF DALLAS
189,804
573,294
97,140
172,943
553,260
84,017
134,359
623,996
136,191
(In thousands of dolla rs )
42,069
1,609,298
50,943
1,594,868
30,299
1,396,799
Ite m
Nov. 25,
1970
Total gold certiflcate reserves • •••••• .••••••.
Disco unts for member bonks ••.•...•••.••••.
Other discounts and advanc es •• .• • •. ••••. .•
U.S. Govern men t securities ••• .. • . ••.• .. • ...
Total e arn ing assets .. . .•..............•...
Member bonk reserve d e posits •• .••.• . •. •...
Federal Reserve not es in actual circulation ••• •.
2,650,378
2,650,428
1,498,680
1,881,012
83,950
101,57 1
1,15 2, 191
957,386
85,111
470,361
9,323
100,050
87,949
1,072 ,264
827,915
91,101
475,605
8,105
53,559
69,Q93
1,140,255
719,035
79,494
507,765
6,686
459,533
479,92 9
448,031
TOTAL ASSETS.. ......... ...... .. .. . ... 12,973,738
12,535,086
11 ,748,494
Oct. 28,
1970
=
Nov. 26,
1969
--------------------------------------------292,972
352,640
628,238
50
°
2,450
°
2,680,937
2,683,387
1,356,603
1,847,644
22,79~
2,493,615
2 516,40 5
1:245,705
1,699,97 1
-------------------------------------------------------------------
CONDITION STATISTICS OF ALL MEMBER BANKS
LIABILITIES
Eleventh Federal Reserve District
Total deposits ••••••. ••.•• ... • •.••.••. •.•.•• 10,291,978
Total demand d e posits ••••••••••.••.•.•.•••
Individuals, partnerships, and co rporations ••••
States and political subdivi sions • •••....•.••
U.S. Government • ••••••.•.•••.••• . •••••.
Bonks in the Un ited States ...... . . .........
Foreign:
Gov ernments, official institutions, central
ban ks, and in ternat ion al instit ution s . ••• •
Comm ercia l banks •. " •• . •••.•••••.••••
Certifie d and offlcers' checks, e tc ...••••.•
Total time and savings d epos its •••.••••..•.••
Indiv idual s, partnerships, and corporations:
Saving s d e posits • • • ••• . •••.•...••.••..
Other time d eposits •••.•.•••• , ••.••• . •.
States and politica l sub divisions ••....••.••.
U.S. Government (including postal savings) •••
Banks in th e Unit e d States .................
Foreign:
Governments, offlcial institutions, central
banks, and in ternation a l insti tutions •••••
Commercial banks •.•• • • .•. • ••• •• ...••.
Fe d era l funds purchased and securities sold
under a greements to re purcha se •••••.•.••...
Other liabilities for borrowed money .•• .•• ... ...
Other liabilities •••. •••• • • ••.•.•••... . ••.•••.
Reserves on loans ....•.•••..••..•.•.•....••.
Reserves on securities ••••••••..•.••..•..•••..
Total cap ito l accounts •.•.. •.••.• . • • • • , .•••.•.
9,993,714
9,175,973
5,812,742
4,040,053
247,876
13 2,587
1,278,036
5,818,010
4,044,914
356,248
131,920
1, 176,773
2,677
24,317
87, 140
4,397,920
2,853
23,709
87,628
4,180,972
3,570
25,410
79,1 75
3,357,963
935,726
2,500,841
847,000
39,023
56,945
931,595
2,342,857
784,319
36,243
66,073
943,182
1,754,943
628,638
5,067
19,273
5,894,058
4,007,3 64
346,930
10 1,329
1,324,301
----
(In millions of dollars)
Sept. 30,
1970
Oct. 29,
1969
ASSETS
loons and di scounts, gross • •••••••••• • •. •.
U.S. Governme nt obligations •••.•••••. " •.
Othe r securiti es •• •••.•.. .•. .. ••• •• .•. ••
Reserves with Federal Reserve Bank •••••.• •
Cash in vault •••.•• • • . .•...•.•••.•.••••
Balances with bon ks in the Un ite d States •..•
ealances with banks in fo reig n countries e ....
Cash it ems in pro cess of coll ection . • .. ••.•.
Othe r a sse tse ••••.••••...•..••••.•.••.•
12,191
2,116
3,612
1,357
273
1,323
10
1,243
93 4
11,982
2,110
3,533
1,405
269
1,454
11
1,426
944
11,297
2,138
3,180
1,236
262
TOTAL ASSETse ... •.•.•.•••.•... •.•.
23,059
23 ,134
--~
1,676
8,994
8,408
1,800
9, 193
8, 184
1,507
8,770
7,285
17,285
1, 100
18,785
1,100
5,500
1,360
L1A81L1TIES AND CAPITAL ACCOUNTS
Demond d e posits of banks •..•. ...••.. . . .
Other d emand d e posits ••.• •••.••• .• .• . ••
Time d e posits ••..•.••...• •.•.•.••• .•. . •
1,054,760
95,159
359,941
128,846
16,989
1,026,065
908,727
84 ,819
376,064
127,670
16,520
1,027,572
928,037
170,322
369,412
116,583
10,62 3
977,544
Total d epos its • • • • ..•...••...• • . • •..•
Sorrowings . •. ... .•.••...•. . .• • •••••.•.
Othe r lia bilities e ..•...•.••...•.•.•••.••
Total capital acccunts e .•.•....•.•..••••.
19,078
1,046
1,102
1,833
19,177
963
1,181
1,813
TOTAL LIABILITIES AND CAPITAL
ACCOUNTSe •.•...•.....•.•...•.•.
23,059
23, 134
----- ----- -----
TOTAL LIABILITIES, RESERVES, AND
CAPITAL ACCOUNTS .................. 12,973,738
12,535,086
=
Oct. 28,
1970
Ite m
11,748,494
e -
Estimated .
.-
1,17~
1,213
732
=-
--17,562
1,035
927
1,721
-
11W
=:=:::--
BANK DEBITS, EN D-Of-MONTH DEPOSITS,
AND DEPOS IT TURNOVER
(Dollar amounts in thou san d" seasona lly adiusted)
DE81TS TO DEMAND DEPOSIT ACCOUNTS'
DEMAND DEPOSITS'
Percent chang e
Annual rat e
October 1970 from
Octob er
1970
(Annual-ra te
ba sis)
Standard metropolitan
statistical or ea
ARIZONA Tucson _••.. ........... . .... •.. . • . .....•. .
LO UISIANA, Monroe ...•..••....•..•.. ••... .••......
Shreve port . . ............ . ..........•... .
NEW MEXICO, Rosw ell ' • . •.••••. ...•.••• . .. .• .. . •.. .
TEXAS, Abilene .• •• . .....•........•.. " .•.••.•......
Amarillo ... . ................ .. . ..• . . .... . .. .
Austin . .............. ....... .... ... ........ .
Beoumont·Port Arthur. Oran ge . . . ......•.... . .. .
Brownsville-Harling en-Sa n Benito . ..... . • .. • •. .•.
I~I~~:l:is:tj'{;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;
Galveston-Texa s City . ......•. . ........•.. . ...
~[i~~nk':': ::::::::::::::::::::::::::::::::::
McAlien-Pha rr-Edinburg •.••... ••.•• • • • .• • •. •...
f~~!~~;o~;~': ~ :::::::::::::::::::::::::::::::
iherman.Denison ... ......................... .
exa rkano (Tex a s-Arkans a s) .• . . ........ .. .• . ..
~:~~i~: ~~il;:: :::::::: ::: ::: ::::::::::::: :::
Total-28 centers .... ....... ... ... . ............... ..
$
September
1970
-6
-4
-6
7,235,700
2,605,680
8,560,1 28
914,328
2, 146,2 12
5,986,140
9,0 13,956
6,050,712
1,972,344
6,58 1,3 16
420,024
124,755,840
7,52 3,688
22,612,872
2,862,372
100,880,904
916,464
4,568,832
1,603,656
2,018,688
1,668,288
1,183,572
18,823,260
993,084
1,384,764
2,385,3 12
2,909,772
2,470,944
3
-3
7
-1
16
11
4
-3
1
-1
-4
0
0
- 11
5
-4
3
-4
9
-8
-8
8
2
6
$35 1,048,852
- 1
of turnover
Octob er
1969
10 months,
1970 from
1969
October 31,
1970
Octob er
1970
September
1970
October
1969
17
-2
-3
- 3
8
6
5
-4
15
31
-3
3
8
9
12
3
3
1
- 1
-4
-5
-4
19
_4
- 6
4
-1
0
19
8
16
5
5
10
- 1
0
13
9
7
9
9
10
11
10
11
2
5
1
5
7
12
8
-7
3
9
- 1
233,870
85,333
244,538
39,423
103,310
158,287
288,459
238,450
78,9 11
286,278
29,010
2,138,366
242,690
634,262
111,216
2,501,521
40,868
171,742
100,507
131,2 19
82,500
65,495
626,832
62,775
70,286
94,33 1
115,048
115,070
31.1
30.4
35.5
23 .8
20.8
37.9
30.0
25.6
25.4
24 .0
14.0
57.7
31.2
35.5
25.1
40.8
22.8
26.3
16.2
15.3
18.9
17.8
29.6
15.4
19.4
24.8
25.1
21.3
33.5
30.5
37.4
22 .6
20.5
38.2
26.0
25.6
23.5
12.7
58.1
31.0
35.6
26.0
40.7
23.6
28.7
16.0
15.8
17.3
18.3
26.5
16.5
20.7
22.6
23.9
19.9
27.9
30.4
37.4
25.1
19.8
35.9
31.4
27.3
24.0
24.5
14.6
57.7
30.4
33.3
24.3
40.3
22.9
27.7
17.6
15.7
24.1
17.9
26.8
16.2
21.7
24.5
25.2
21.1
$9,090,597
38.6
38.5
38.4
1
Deposit s of individuals, partnerships, and corporation s and of stot es and political subdivi sion s.
!!
County basis.
2~. 1
GROSS DEMA ND AND TIME DEPOSITS Of MEMBER BANKS
Eleventh federal Reserve District
(Ave rages of daily flgures . In millions of dolla rs )
BUI LDIN G PERM ITS
Dale
Total
city banks
Country
banks
1968, October . ••
1969, October ...
1970, May . • .•..
10,201
10,306
10,233
10,265
10,41 2
10,530
10,658
10,684
4,75 1
4,726
4,671
4,748
4,782
4,816
4,885
4,860
5,450
5,580
5,562
5,5 17
5,630
5,7 14
5,773
5,824
Reserve
Percent change
Oct . 1970
NUMBER
Area
Oct.
1970
10 mos .
1970
from
Oct.
1970
10 mos .
1970
Sept. Oct .
1970 1969
ARIZONA
Tuc son . . •• . . ••
10 months,
1970 from
1969
508
5,808
4,155 $
49,525
-44
32
-4
90
508
708
4,6 48
956
2,218
12,70 1
26,702
_ 17
16
-36
-25
15
-22
42
120
416
149
96
926
1,568
44
438
382
42
2,078
46
146
39
57
79
51
1,27 1
63
35
184
79
401
3,5 11
4,08 1
1,486
731
3.651
18,496
386
4,584
3,9 13
669
28,903
474
2,076
519
735
766
555
12,955
688
297
2,037
710
375
1,0 13
12,4 15
392
676
3,957
33,76 1
103
5, 160
6,181
297
29,66 1
321
2,966
185
533
211
519
9,226
1,613
174
1,633
771
7,485
27, 164
107,428
8,112
5,483
23.047
292,093
3,142
82,970
74,362
6,207
38 1,997
6,089
45,215
3,86 1
8,528
7,105
9,457
85,570
12,625
5,824
30,524
10,844
-26 -87
-43 -64
55 -39
-43 -56
124
34 8
31
381
15 1
38
24
-4
-74 -2 1
50
-44
-79 -69
-48 -31
14 -80
48
71
-58 - 10
26
-65
23 - 16
47
30
48
31
351
275
-34 -35
108
68
30 -84
-2 1
- 14
-25
6
4
21
12
16
-65
3
55
83
-27
17
- 10
76
21
-2 8
-4
86
-34
June • ..••.
Jul y .......
August. •••
September .
October . . .
LOUISIANA
Monroe-West
Monroo .•.. .
Shreveport . . ..
TEXAS
Abilene •• .• •.•
Amarillo •• •...
Austin ... .... .
Beaumont • • .• "
Brownsville ••• •
Corpus Christi . .
Dalla s •••..•• .
Denison •••••. •
EI Pa so • ..•...
Fort Warth ••. .
Ga lves ton .... .
Houston • • •• . •
laredo . . . .. . .
Lubb ock ......
Mid land ..... '.
Od essa ..... . .
Port Arthur . . . .
San Ang elo ..•
San Antonio .. .
Sherman .. . ...
TOl(arkana . ...
Waco . . ..... .
Wichita Falls . •
10ta l_26 cities .•
9,457
103,788
-$11-9,472
-- -$ 1,334,060
-20
- 3
TIME DEPOSITS
GROSS DEMAND DEPOSITS
VALUATION (Dollar amounts in thousands)
Total
city banks
Country
banks
7,394
7,223
7,394
7,391
7,511
7,783
8,088
8,317
3,116
2,646
2,659
2,651
2,722
2,926
3,162
3,305
4,278
4,577
4,735
4,740
4,789
4,857
4,926
5,012
Res erve
-33
- 22
VALU E Of CO NSTR UCTIO N CONTRACTS
(In millions of dolla rs )
January- October
Area and type
FIVE SOUTHWESTERN
STATES' . ........ ·· · .. · .
Resid ent ial build ing • •• .. ••
Nonresid entia l building . ...
Nonbuilding construction . ..
UNITED STATES .... ... .. .. .
Reside ntial building . ......
Nonr esi dential building . ...
Nonbuild ing constructi on . ..
1
Octob er
1970
Sept em ber
1970
August
1970
1970
1969r
597
270
201
127
5,45 3
2,302
1,863
1,289
558
269
183
107
5,398
2, 176
1,944
1,278
753
331
285
137
6,230
2,349
2,331
1,549
6,620
2,568
2,175
1,877
57,364
20,611
20,949
15,803
5,816
2,398
1,921
1,497
57,945
21,853
22,020
14,072
Arizona, Loui siana, N ew M exico,
Revi sed.
r-
Oklahoma , and Texas .
NOTE . - Deta ils may not add to total s because of rounding .
SOURCE , f. W. Dodge, McGraw-Hili, Inc .
CROP PRODUCTION
DAILY AVERAGE PRODUCTION OF CRUDE OIL
(In thousands of bushels)
(In thousands of barrels )
TEXAS
FIVE SOUTHWESTERN STATES'
Noy.l
Cotton 2 •••• •• •••
Corn ...........
3,3 53
28,329
Wint er wheat. ...
54,408
Oats ...........
28,140
8arley •••• ....•
4,394
Ry e •• •• •. •. .. . .
736
Rice 3 •••••••••••
22,135
Sorghum gra in •.. 356,706
Flaxseed ..•.. .•
1,127
Hay 4 •••••••••••
4,211
5
Peanuts •••••••• 420,000
Irish potatoes 6 •••
4,306
1,040
~:c~e:s~~t.a.t~~~~.: 38,000
Area
estimat e d
estimated
Crop
Percent change from
1970,
1970,
1969
1968
Noy.l
1969
1968
2,862
25,124
68,856
25,460
3,290
684
21,646
309,800
1,300
3,451
389,070
4,437
780
23,000
3,525
26,052
84,150
19,822
3,348
528
27, 164
340,780
742
4,587
426,300
4,382
960
69,000
4,723
39,478
167,7 15
36,332
35,340
1,762
42,895
411,912
1,127
9,637
650,360
7,893
5,044
71,000
4,415
34,266
197,619
33,058
29,096
1,664
42,420
368,740
1,300
9,136
610,549
8,084
5,200
73,900
5,244
36,871
218,974
25,450
26,856
1,208
53,306
402,729
742
10,418
671,476
7,624
5,120
97,000
FOUR SOUTHWESTERN
STATES ••..• . •••..••..• •
loui sia na .. ..... . ...... .
New Mexico ..•..........
Oklahoma •...• ... •..• ..
Texas ..............•...
Gulf Coa st •.... •.•.•..
W est Texa s ...........
East Texas (prop er)• • • ..
Panhandl e .. . .. .• .... •
Rest of state .... ...... .
UNITED STATES ••.•.. . ••...
1970
October
1969
7, 123.5
2,639.4
359.2
600.9
3,524.0
701.8
1,701.5
209.5
85.3
825.9
9,878.6
6,387.9
2,254.4
360.7
612 .0
3,160.8
631.2
1,516.2
160.5
79.9
773.0
9,188.5
1.7
2.8
-3.7
.9
1.5
1.4
1.7
1.1
1.9
1.1
1.5
13.4
20.4
-4.1
-1.0
13.1
12.7
14.2
31.9
8.8
8.0
9.1
Sep temb er
7,242.3
2,714.2
345.9
606.2
3,576.0
711.4
1,730.9
211.7
86.9
835.1
10,025.5
SOURCES : American Petrol e um In stitute .
U.S. Bureau of Mines.
Federol Reserve Bonk of Dallas.
1 Arilono, loui siana , New Moxico, Oklahoma, and Texas .
!! In thousands of bales.
3 In thou sand s of bags containing 100 pounds each.
" In thou sands of ton s.
I)
September
1970
October
1969r
October
1970
In thousands of pounds.
o In thousonds of hundredweight.
SOURCE , U.S. Department of Agriculture.
COTTON PRODUCTION
Texos Crop Reporting Districts
(In thousonds of boles -
TO TAL OI L WE LL S DR ILLED
500 pounds gross weight)
=1970,
1970
indicated
Noy. l
Area
1968
1969
10·N - South Texa s Plains ••••.•..•..
10·S - Lower Rio Grande Volley • • •. • .
248
1,134
179
213
15
258
15
34
144
49
50
106
93
17
307
211
1,384
312
372
20
409
19
41
189
72
57
93
79
25
242
153
128
87
146
100
145
167
103
96
102
120
47
108
88
64
State . • •• .•..••.• . •. . . • . •• . .•..
3,353
2,862
3,525
117
-
Southern High Pla ins • •••••• . ••
Red Bed Plains ••..•••• . .... •
Red Bed Plains ••.•.••.•.....
Western Cross Timbers . ..... . .
Black and Grand Prairi es ..... .
5-N - East Texas Timbered Plain s ... .
5-S - East Texas Timbe re d Plains •.••
6 - Tran s· Pecos........ . .... ... .
7 - Edwards Plateau ..•.• •. . ••••
8·N - South ern Texas Pra iri es .•. . .. .
8- S - Southern Tex as Prairie s . . . . . . .
9 - Coa stal Prairi es .•.•..........
-
Arst quarter 1970 from
as pe rce nt of
1969
380
1,450
155
310
15
375
25
35
138
50
60
50
100
15
195
l·N - Northern High Plains......... .
l -S
2-N
2-S
3
4
Percent change,
Fourth
first
quarter
quarter
quart er
quarter
Area
1970
1969
1969
1969
FOUR SOUTHWESTERN STATES . .• •
1,862
273
75
198
96
386
1,107
1
1,1 06
3,298
2,191
365
140
225
106
476
1,244
3
1,24 1
4,367
-15.0
-25.2
-46.4
-12.0
-9.4
- 18.9
-11.0
-66.7
-10.9
-24.5
7.3
_2.5
-19.4
5.9
95.9
_11.3
13.9
-75.0
14.3
.5
louisia na .... ... ... ...........
Offshore ................... .
Onshore ...... . ...... ...... .
New Mexico . • .... .............
Oklahoma •••••..•. ••• • •..•• ..
Tex as .... ....... ... .... ... . ..
Offshore •••••..•••••.••..•.•
On shore ....................
UNITED STATES ••• •.... ••..••. •••
First
Fourth
SOURCE: Americon Petroleum Institut e.
SOURCE , U.S. Deportment of Agriculture.
NONAGRICULTURAL EMPLOYMENT
IN DU STRIAL PRODU CTIO N
Five Southwe stern States'
(Seasonally adjusted indexes, 1957·59
Percent chang e
Type of employment
Total nonagricultural
wage and salary workers ..
Manufacturing .... . .. . . .•
Nonmanufacturing ........
Mining ...... . ..... . ..
Construction .... .. . ....
Tran sportat ion and
public utilities ••.... ..
Trade ........ . .......
Financ e ..•. .......... .
Service •..... . ....... .
Government •. .........
October
1970p
6,359,000
1,130,000
5,229,000
228,400
397,400
469,700
1,491,000
325,300
1,029,400
1,287,800
Septem ber
1970
6,358,200
1,140,700
5,217,500
229,100
408,300
469,300
1,485,300
325,700
1,031,300
1,268,500
October
1969r
6,302,900
1,196,700
5,106,200
232,100
415,500
453,700
1,441,100
313,000
992,300
1,258,500
Arizona, loui si ana, New Mexico, O klahoma, and Texas.
p Prelimi nary.
r Revised.
1
SOURCE, State emp lo ymen t agencies.
Area and type of ind ex
Oct . 1970 from
Number of persons
Sept.
1970
0.0
-.9
.2
- .3
-2.7
.1
.4
- .1
-.2
1.5
Oct.
1969
0.9
-5.6
2.4
-1.6
-4.4
3.5
3.5
3.9
3.7
2.3
= 100)
=
October
1970p
September
1970
August
1970
October
1969
181.4
197.2
200.4
195.1
142.1
274.3
181.4
198.5
205.3
193.9
140.4
274 .3
178.4r
196.6r
208.4
188.8r
135.0r
274.3r
177.2r
201.0
226.9r
183.8r
127.3r
261.9r
162.3
160.2
153.9
168.2
135.4
240.0
166.1
164.2
160.5
168 .7
139.5
238.5
169.0r
I 67.9r
166.5r
169.8r
137.2r
235.8r
173.1
173.9r
177.3
169.5r
130.2
226.0 r
TEXAS
Total industrial production . ... . .
Manufacturing •.............. ..
Durable ••• •.. ••..• •. ..••..••
Nondurable .... .... . ... ..•. ..
Mining . . . . . . . . . . . . . . . . . . . . . . .
Utiliti es .. ...... .... ...• . ... . ..
UN ITED STATES
Total industrial production ..•...
Manufacturing ................ .
Durable • • ••• .•• •• •..• .. •••••
Nondurablo . . . .. ..... . ..... . .
Mining .. . ................... .
Utiliti es . ..................... .
p -
Preliminar y.
r - Revised.
SOURCES, Boord of Goyernors of the Federal Reserye System.
Fede ral Reserye 8ank of Dallas.
-
@FedFRASER