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BUSINESS
REVIEW
FEBRUARY 1962
Vol. 47, No.2

DISTRICT COMMERCIAL BANK PARTICIPATION
IN 1961 TREASURY FINANCINGS
Commercial banks in the Eleventh Federal Reserve District
were active participants in the Government securities market
during 1961, both as underwriters of several large new Treasury
financings and as direct purchasers for their own accounts. The
District banks purchased $2.5 billion of the $149 billion of new
Treasury offerings, accounting for about 5 percent of the Nation's
commercial bank acquisitions. These large acquisitions were
instrumental in increasing member bank holdings of Government
securities by 10 percent within both the Nation and the District.
During the year ended December 27, 1961, total member bank
holdings advanced $5.1 billion in the Nation and $260 million in
the District, attaining levels of $54.2 billion and $2.9 billion,
respectively. Approximately $168 million, or 64.6 percent, of
these new holdings in the District centered in the country banks.
In order to obtain the requisite funds, the Treasury operated
throughout the whole spectrum of the securities market during
1961. The Treasury appeared to be faced with the following difficult, and sometimes conflicting, considerations: (1) to issue
sufficient securities to provide the funds for increased Government expenditures; (2) to redeem or refund the large amounts of
maturing securities; (3) to extend the average maturity of the
public debt; (4) to support short-term interest rates because of
their influence on the outflow of short-term funds to foreign markets; and (5) to hold down long-term interest rates in order to
stimulate capital expenditures and reduce interest charges on the

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)

public debt. Whenever the Treasury entered the market,
these considerations had to be weighed and evaluated
bu~ .its ultimate decision was also tempered by the pre:
vaIlmg tone of the market and expectations as to the uncharted course of future economic and financial trends.
Th~ Treasury, however, was not alone in attempting
to strike a balance of alternatives. The suppliers of
funds were also confronted with numerous alternatives
e~en though differing ~onsiderably in nature and mag:
mtude from those facmg the Treasury. The suppliers'
,:,orld revolves around the present and future expectations of safety, liquidity, and income in uncounted
v~riations of composition and form. This task is espeCIally complex for commercial banks, which must consider the additional factors of seasonal, cyclical, and
random changes in loans, deposits, and other investments. These alternatives and factors were brought into
clear perspective by the decisions of the commercial
banks in the Eleventh District during 1961.
A large majority of the commercial banks in the
?istric~ struck a balance on the side of increased liquidIty dunng the past year. This was achieved through
both the purchase of short- and intermediate-term
securities with new resources and the shifting of funds
obtained by liquidation of longer-dated issues into
short- and intermediate-term securities. Prime considerations that guided these actions were the prospective
need fo~ funds to meet anticipated loan demands,
e~pectatlOns of changes in interest rates, the shifting
~Ield spreads between investJ.nents of varying maturitles, and the cash and reserve positions of the banks.
. The reduction in holdings of long-term investments
I~ ~e portfol.ios of District banks eliminated the possibIlity of capItal loss from future liquidation of these
securities. The shortening of investJ.nent maturities
wh~n bo~d prices approach the expected high of
theIr cyclIcal movement, as well as the lengthening of
these maturities when bond prices seem to reach their
l0v.:, giv~s the flexibility in bank portfolio management
~h!ch WIll provide liquidity at the proper time and maxlmize retu.rns over the course of an interest rate cycle.
CommercIal banks in the District generally acted in
concert with this ideal over the past year; their actions
were strengthened by the apparent belief that even if
~he prophesied upturn in loan demand did not ~aterial­
~ze, these funds would still be available for reinvestment
m longer-term securities at expected higher rates of interest. It was anticipated that these higher rates would
mor~ than compensate for the income sacrificed by
holdmg short-term securities in the transition period.

I
I2

BUSINESS REVIEW

2:1962

COMMERCIAL BANK PARTICIPATION IN TOTAL
TREASURY OFFERINGS, 1961 AND 1960

Elevenlh Federal Reserve Di strict
(Dollar amounts in millions)

1961

Item
Total Treosury offerings l .•

• ..•• .. . • . . . .

Total purchases by commercial

bonks, Eleventh District . ............ .
As percent of national total .. •.........

Average ranking among 12 Federal

Reserve districts .. ................. .
1

1960

$148,700

$142,000

$2,977
2.0

$2,273
1.6

8

9

Includes refunding s, advance refunding s, and new cosh offerings.

Both reserve city banks and country banks in the
District were active participants in Treasury financing
operations during 1961, even though they sometimes
pursued divergent courses of action. The r'eserve city
banks generally refrained from more than nominal participation in Treasury offerings unless credit to Tax and
Loan Accounts was permitted or unless the pricing of
the particular issue was exceptionally favorable. When
securities with a Tax and Loan Account feature were
acquired, these banks generally sold them far in
advance of maturity. In many instances, the reserve city
banks acted upon a "feel of the market" in order to
obtain short-term capital gains.
Since loans are generally more profitable than investments (with the possible exception of tax-exempt
municipal bonds), the size and composition of reserve
city bank investment portfolios were significantly
affected by an intensification of loan demands. Usually,
short-term Government securities are liquidated to
accommodate loan demands since these securities possess the highest marketability and the lowest current
yield. In a number of instances, continued favorable
customer relations necessitated such transfers, even if
they were not justified upon a profitability basis.
The investment holdings of the District's reserve city
banks were concentrated in Government securities. A
small but increasing proportion of total investments
was accounted for by municipal obligations, while corporate bonds continued to be sparsely held. Reserve city
banks concentrated upon short- and intermediate-term
securities in their municipal bond portfolios; longer
maturities attained greater importance toward the end
of 1961, when banks began to seek cover for their
increased interest payments to savings and time deposit
customers.
. Com~ar~d with the reserve city banks, country banks
m t?e DIstr~ct generally obtained a larger percentage of
then total lllcome from investJ.nent portfolios because
loan opportunities were more limited. With significant

proportions of their deposits residing in less volatile
accounts, country banks concentrated upon investing
in securities of longer maturities and higher yields, thus
reducing securities turnover. The country banks generally are not in a position to be aware of the feel
of the market, as are the reserve city banks, and are content .to place greater reliance upon yield to maturity
than upon short-term capital appreciation. These banks
also maintained considerable excess reserves, in sharp
contrast with reserve city banks, thereby obtaining
increased liquidity and safety at the expense of maximization of returns. The country banks usually purchased
new issues of Treasury bills through noncompetitive
bidding, seldom purchasing more than nominal
amounts. With respect to other Government issues,
these banks retained such securities for extended periods of time.
Since the country banks engaged in relatively small
and stable purchases of new Treasury securities, the
size and volatility of the District's participation were
dependent upon the reserve city banks. Nevertheless,
because of greater retention periods and purchases
through secondary market channels, country banks in
the District showed a larger increase in Government
securities holdings during 1961.
With a majority of their bids noncompetitive in
nature, District banks were not active participants in
the Treasury's weekly bill offerings, although there was
a weekly increase of $100 million in such offerings during the year. In 1961 the District's commercial banks
purchased $764 million of 91-day bills and $198 million of 182-day bills for weekly averages of approximately $14.7 million and $3.8 million, respectively.
Among the 12 Federal Reserve districts, the highest
rankings the Eleventh District reached in any weekly
bill offering were fifth in the 91-day securities and sixth
in the 182-day securities. The average ranking of the
District for these issuances was ninth and eighth, respectively. District commercial banks purchased less than
one-half of 1 percent of these weekly offerings. It should
be noted, however, that the New York, Chicago, and
San Francisco districts combined accounted for over 86
percent of the weekly bill purchases in 1961.
The commercial banks in the District also demonstrated a lack of interest in the four I-year bills issued
by the Treasury during 1961. The District accounted
for $60.5 million, or less than 1 percent, of the $7.5
billion total, ranking tenth in three of the offerings and
eighth in the other. The absence of Tax and Loan

Account credit and the relatively long maturity dates,
which were only partially compensated for by higher
yields, encouraged District banks to concentrate their
purchases in other types of securities. An additional
restraining factor was the lower than anticipated auction yields. Only in the April 15 issue, when there was
an improved yield differential between the weekly bills
and the I-year bill, did the District banks participate
actively.
In all bill offerings where credit to Tax and Loan
Accounts was permitted, District banks were exceptionally active. Of the three Tax Anticipation bills issued
during 1961, the District banks purchased $696 million, or more than 9 percent of the $7.5 billion total;
the District ranked fourth on two of the occasions and
third on the other. These purchases were concentrated
at the larger reserve city banks, with the securities being
retained for relatively short periods of time.
Tax and Loan Account credits were also allowed in
one of the two "strip" bill offerings during the year. This
$1.8 billion issue attracted $157 million from District
banks for a District ranking of fourth in the Nation.
The other strip of bills, totaling $800 million, was
marketed near the conclusion of 1961, but District
banks purchased less than $1 million and the District
ranked twelfth in the Nation. Reserve city banks demonstrated a complete lack of interest in the issue, partly
because sales of excess reserves in the Federal funds
market were a profitable alternative and partly because
loan demands were rising and fewer investment funds
were available.
The very active bidding by District banks on securities issued under Tax and Loan Account privileges was
influenced by some of the following factors: (1) the
percentage applicable to Treasury Tax and Loan
Accounts; (2) the expected time period before the
Treasury would draw down the enlarged balance; (3)
the desire for an improvement in deposit positions
before a bank statement date; (4) the size, price, and
relative yield of the new issue; and (5) the ease and
cost of meeting increased required reserves either
through the sale of securities or by means of borrowings
from commercial banks or the Federal Reserve bank.
During the year, a $2 billion note also was issued
under a Tax and Loan covenant, but this issue encountered a passiven.ess among District banks, which purchased only $90 million. Accounting for this lack of
interest were the facts that pricing of the issue was not
considered exceptionally favorable, the Tax and Loan

I

BUSINESS REVIEW
2:1962
31

COMMERCIAL BANK PARTICIPATION IN TREASURY OFFERINGS
OF CERTIFICATES, NOTES, AND BONDS, 1961
Eleventh Federal Reserve District
(Dollar amounts in thousands)
Purchases by commercia l banks, Eleventh District
Treasury afferings

Issue date
February 15 . •.......
March 15 ..... . • ..• .
May 15 . •.•..•....••
August 1 .. ' " . • ...••

September 15 ...• • .•.

October 11 ••.••..•.•
November 15 • .•.••.•

December 15 ...•.•••

Coupon
rate
(Percent)

3\4
3%
3%
3
3\4
3\4
3%
3%
3Y2
3Y2
3Y2
3\4
3\4
3%
3%
3¥s

Year of
maturity

1962
1966
1967
1962
1963
1962
1964
1968
1980
1990
1998
1963
1963
1966
1974
1968

Size of
issue

$7,324,440
2,441,835}
3,605,521
5,506,570}
2,754,205
6,077,0001
5,019,000
746,000)
1,274,472}
1,296,446
1,186,676
2,294,529
3,641,676}
2,382,979
517,368
320,315

Total

Certiflcates

Notes

$ 7,324,440

$130,797
140,266

6,047,356
8,260,775

$118,694
65,657
57,562
79,295

11,842,000

24,798
33,865
32,760
23,895

3,757,594
89,743
95,339

2,294,529

74,122
2,532
9,942

6,542,023
320,315
$46,389,032

Bonds

$120,661

$118,694

$508,257

Total Treasury offerings of certiflcates, notes, and bonds . . •••.•••..••..••••••...•••. .
Total purchases of certificates, notes, and bonds
by commercial banks, Eleventh Distriel .. • •...•...•• . ••••...••...•••.•.•••••..•••
As percent of national total ..•.••••••...••...••..••• . ••••.••••...•••••.•••••••
Average ranking (unweighted) among 12 Federal Reserve districts ....•••• . .••• • •••..

As
percent of
national
total

1.6
5.4
3.9
2.2
2.4
.9
1.6
3.3
2.7
2.5
2.0
3.9
2.6
3.1
.5
3.8

Ranking
among 12
Federal
Reserve
districts

9
5
5
8
9
9
9
7
4
6
5
8
9
9
10
12

$472,977
1$46,389,032
$ 1,099,928
2.4
7.8

' 0f this total, approximately $3.2 billion was new funds, and the remainder was exchange offerings or advance refundings.

Although determining their rate of participation in
Treasury financings on the basis of self-interest, the District banks were a part of the necessary underwriting
effort which markets Treasury securities. Purchases for
There were eight Treasury offerings, totaling $46.4 their own account and for customers and correspondent
billion, outside the bill area during 1961. As shown in banks brought the District's larger banks into both the
the accompanying table, wide variances in the rate of new and the secondary market and, thus, provided a
participation by District banks characterized these sustaining demand for Government securities and a
offerings as banks evaluated the many alternatives of means of profitably investing otherwise idle funds.
cost and return, as well as their individual liquidity and
LEONARD JAY SANTOW
reserve positions.
Financial Economist

credit was only partial, the funds were expected to be
used by the Treasury in a short period of time, and there
was a relatively high Federal funds rate.

I

BUSINESS REVIEW

2:1962

OPERATIONS OF. THE FEDERAL RESERVE BANK OF DALLAS IN 1961
The changes in earnings, expenses, and the financial
condition of the Federal Reserve Bank of Dallas are
a partial reflection of economic and financial developments in the Eleventh Federal Reserve District and
the Nation. The recession in economic activity which
began in 1960 reached its low point early in 1961,
and a somewhat unique period of economic recovery
followed. Unlike most periods of recovery, there was
a singular lack of inflationary pressure; as a result,
monetary policy remained easy throughout the year,
though special moves were occasioned by the international financial problems of the Nation. Interest
rates displayed exceptional stability over the year, with
average rates somewhat below those of 1960.
Other factors, including a strongly developing internal shift toward automation and the impact of the
move into new or completely remodeled quarters in
late 1960, also influenced the Bank's financial condition. High lights for the year for the Dallas Federal
Reserve Bank encompassed not only the developments
described above but also the impact of the new Texas
sales tax upon cash shipments, the effects of a hurricane and other severe weather upon check collections,
the handling of a heavy volume of Treasury financi~g,
and special emphasis upon System monetary polIcy
problems.
In order to handle the ever-expanding volume of
checks the Federal Reserve Bank of Dallas has continued'to work with the member banks in this area
toward the goal of eventual magnetic imprinting of
all checks. Most departments of the Bank have been
preparing to shift to more-automated methods of operation, which will be made possible by the introduction early this year of an electronic co~puter .. The
computer will serve to improve the operatll1.g. efficIen~y
of the Bank and will be a valuable addItIOn to Its
research facilities.
The total number of all types of checks and collection items handled by the Transit Department of the
Bank rose 4 percent in 1961, or at about th.e same
rate as in previous years. The volume of com payments to banks by the Cash Departm~nt also increas~d
noticeably, with a substantial portIOn of the g~ll1
accounted for by an increase in the need for penmes
associated with the new Texas sales tax.
The heavy participation in the Federal funds market
by the District's member banks was demonstrated by

the enlarged number of transfers of funds handled by
the Federal Reserve Bank of Dallas. The number of
such transfers advanced 3 percent during 1961, while
the dollar volume rose almost 7 percent.
In connection with its role as fiscal agent for the
United States Government, the Federal Reserve handles the purchase, sale, and redemption of securities
issued by the United States Treasury. The total dollar
volume of marketable United States Government securities issued, exchanged, and redeemed by the Fiscal
Agency Department of this Bank during 1961 increased 23 percent, but the number of pieces involved
in such transactions declined approximately 3 percent.
All of these developments and events had a direct
or indirect effect upon the Bank's earnings and expenses. The expansion in economic activity and the
easy monetary policy induced considerable improvement in commercial bank earning assets, but these
factors and the stable interest rate pattern caused net
earnings of the Federal Reserve Bank of Dallas to be
reduced nearly one-fifth during 1961.
The most important source of income for the Federal Reserve Bank of Dallas arises from interest earnings on United States Government securities. Increases
or decreases in earnings from this source account for
virtually all of the changes in total current earnings.
The extent to which each Federal Reserve bank participates in the holdings of securities in the System Open
Market Account, and the earnings therefrom, is determined each year on the basis of the bank's share
of the daily average total assets of the System for the
12 months ending the last day of February. During
1961, there was an increase in the total amount of
Government securities held by the Federal Reserve
Bank of Dallas as a result of an expansion in the total
holdings of the Federal Reserve System and the Bank's
somewhat higher participation ratio due to the faster
growth in total assets at the Federal Reserve Bank of
Dallas relative to other Federal Reserve banks.
Another important factor influencing income from
securities holdings occurred in February 1961, when
the Federal Open Market Committee modified its
policy of dealing in bills preferably and extended operations to the full range of maturities. The effect of this
policy can be seen in the composition of holdings of
Government securities by the Federal Reserve Bank
of Dallas. Holdings of Treasury notes rose 61 percent
BUSINESS REVIEW
2:1962

I

51

over the year, and holdings of United States Government bonds increased 52 percent. Treasury certificates,
on the other hand, declined 81 percent; increased issues
of longer-dated Treasury bills have generally reduced
the need for certificates, and only one issue of Treasury
certificates remains outstanding. Despite the higher
level of total holdings of Government securities by this
Bank and the larger proportion of higher-yielding,
longer-dated securities, earnings from the securities
portfolio decreased 12.7 percent, reflecting the lower
average yield on the System's portfolio during 1961.
The average yield in 1961 amounted to 3.42 percent,
down from 4.11 percent in 1960.
EARNINGS OF FEDERAL RESERVE BANK OF DALLAS
AND AVERAGE YIELD ON HOLDINGS IN
SYSTEM OPEN MARKET ACCOUNT
EARNINGS
MIl.LIONS OF DOL.l.ARS

YIEL.D

PERCE NT

10

50

40 ~------------------------/

30'1-1------------------===/

'- - - - - - - - - l

20'~--~ _____ .1' - - - - - - - - - - - -"/
-

l0l---=_-==~

AVERAGE YIELD ON U,S,
GOVERNMENT SECURITIES HELD IN
SYSTEM OPEN MARKET ACCOUNT

2

g,L52--~--~-19~5-5~~~--~195-8--~~--~19J

The only other significant source of income to the
Federal Reserve Bank of Dallas is its earnings on discounts and advances to member banks. The earnings
which the Bank derives from this source depend upon
the amount and cost of such borrowing, and the extent
to which the member banks utilize the discount window depends largely upon their reserve positions and
the relative cost of alternative sources of funds. The
member banks in the Eleventh District were in a comfortable reserve position throughout 1961. The reserve
accounts held at the Federal Reserve Bank declined
slightly from the high levels reached in December
1960, but the effect of this reduction was partially offset
by an increase in member bank vault cash holdings,
all of which were allowed as reserves in late 1960.
The ability of the member banks to extend loans was
further improved by a more rapid growth in time

I

BUSINESS REVIEW

\6

2:1962

deposits than in demand d~po~its, since .the reserve
requirement on time deposIts IS substantially lower.
The discount rate (or the interest cost to mem~er
banks borrowing from the Reserve bank) ~as ma1l1tained at 3 percent throughout 1961, averagl,ng somewhat lower than in the previous year. The ~a1l1tenan~e
of the discount rate at such a relatively high level 111
a period of recession and early recovery ,is in sharp
contrast to recent cyclical patterns. The dIscount rate
was relatively high compared with short-term market
rates, a fact which encouraged the mem.her banks to
rely heavily upon Federal funds transactlOns to make
reserve adjustments. The number and amount of notes
discounted and advances made by the Federal Reserve
Bank of Dallas for member banks declined substantially
in 1961, with the number of banks receiving such loans
decreasing from 94 to 33. The dollar volume of ~~er­
age daily borrowings declined to about $1. 8 mIllion
during 1961 from more than $31 million in 1960. As
a result of the reduced amount of borrowing from t~e
Federal Reserve and the lower average level of dIScount rates during 1961, the earnings of the Bank on
discounts and advances were sharply reduced . In su~­
mary, with decreases in earnings from both the seCUflties portfolio and discounts and ~d~ances, total current
earnings declined to $38.0 mIlllOn, or 15 percent
below 1960.
Total current expenses rose moderately to $9,302,935 in 1961, or 6.4 percent over 1960, continuing the
secular expansion which has been evident for some
years. The growth in expenses came largely from
higher employee salaries, increased depreciation on the
new building, and an accounting entry on repairs and
alterations connected with the completion of the Dallas
building program. Among other expenses, the original
cost of Federal Reserve currency, including shipping
charges, showed a relatively sharp expansion. T~is
resulted from the larger amounts of currency WhICh
were printed and shipped to the Federal Reserve Bank
of Dallas in response to increased demands for Federal
Reserve notes; Federal Reserve notes issued by this
Bank and in actual circulation reached a newall-time
high of $874 million on December 20, 1961, up $33
million from the previous high reached on December
22, 1960.
The result of the decline in earnings but increase in
expenses was the reduction of the Bank's net earnings
to a level of $29,802,806, compared with $37,562,473
in 1960. After the expenses of each Federal Reserve

bank have been paid or provided for, the member
banks receive an annual cumulative dividend of 6 percent on the paid-in capital stock. Each bank which is
a member of the Federal Reserve System must subscribe to the capital stock of the Federal Reserve bank
in its district in an amount equal to 6 percent of the
member bank's capital and surplus. (The member
bank's paid-in subscription equals 3 percent, and an
additional 3 percent is subject to call.) Consequently,
as the capital accounts of the member banks expand,
these banks purchase additional stock in the Federal
Reserve bank in order to maintain their paid-in subscriptions at 3 percent, and the paid-in capital of the
Federal Reserve bank rises. Moreover, an expansion
in paid-in capital is paralleled by an increase in the
dividends paid by a Federal Reserve bank; in 1961
the dividends paid by the Dallas Bank increased 5.4
percent. Furthermore, since it is the policy for each
Federal Reserve Bank to maintain its surplus account
at a level equal to twice the paid-in capital, this Bank's
surplus, paid-in capital, and dividends all showed approximately the same relative expansion.
After the expenses have been discharged, the dividends have been fully met, and the surplus has been

brought into the desired relationship with the paid-in
capital, the remaining net earnings are paid to the
United States Treasury. Last year, the Federal Reserve
Bank of Dallas paid approximately $25.5 million to
the Treasury, or almost one-fourth less than in the
previous year, reflecting the effect of the lower level
of net earnings in 1961, the further increase in dividends, and the additional expansion in capital accounts.
The total assets of the Federal Reserve Bank of
Dallas showed only a minor change in 1961. An increase in securities holdings was more than offset by
a decline in discounts and advances and a substantial reduction in gold certificate reserves. For the year
as a whole, the Federal Reserve Bank of Dallas and its
three branches in El Paso, Houston, and San Antonio
handled a larger volume of work with approximately
the same number of employees as in 1960. During the
coming year, additional improvements in operating
functions are anticipated, both by the use of new dataprocessing equipment and by the results of continued
cooperation between this Bank and the member banks
of the Eleventh Federal Reserve District.
WILLIAM N. GRIGGS
Financial Economist

ELEVENTH FEDERAL RESERVE DISTRICT
~ Dallal Hood Office Terrltor.Hou l ton Bronch Territory

mrrn

I!:!:!:!:;:I Son Antonio Branch Territory
~ EI PO l O Branch Torrllory

BUSINESS REVIEW

2:1962

I

71

BUSINESS

REVIEW

BUSIN ESS, AGRICULTURAL, AND FINANCIAL CONDITIONS

Department store sales in December were the largest in total
dollar volume ever recorded in
the Eleventh Federal Reserve
District for any month. Department store sales in 1961 were approximately 2 percent above 1960 and were about the same as the
1959 record. The seasonally adjusted index of sales
rose from 178 percent of the 1947-49 average in
November to 185 in December. New car registrations
in December in the four major Texas markets combined were above November 1961 and December
1960.

The most severe cold weather of record was the
dominant feature of the District's agricultural situation during January. Losses of vegetables and citrus
fruits were especially great as a result of the subfreezing temperatures, and livestock shrinkage was
heavy. Cash receipts from farm marketings in the District states during the first 11 months of 1961 were
slightly larger than a year earlier.

The Texas industrial production index remained at
178 in December. Estimated nonagricultural employment in the five District states reached a record
4,551,500 during the month. The value of construction contracts in the five states increased substantially
during November.

Loans, investments, and time and savings deposits
advanced at the weekly reporting member banks in
the District during the 4 weeks ended January 17, but
demand deposits declined. Time and savings deposits
increased noticeably, perhaps in response to changes
in regulation Q.

District crude oil production and drilling activity
rose moderately in December and early January.
Refinery operations declined somewhat in December
but expanded in early January.

The rise in Eleventh District department store sales in December
was substantially above the usual
seasonal gain for the month, lifting the seasonally adjusted index
from 178 percent of the 1947-49 average in November
to 185 in December, compared with 171 in December
1960.

the 2 weeks ended January 13 was 8 percent below, the
comparable 2 weeks in 1961.
New passenger car sales registered in four major
Texas markets in December reached the highest total
for any month in 1961 , rising 6 percent above November - the 1961 month with the second highest total and 21 percent above December 1960. In Dallas and
Fort Worth, the December 1961 gains over a year
Despite the fact that there was one less business day earlier were 36 percent and 20 percent, respectively.
than a year earlier, sales in December were the largest Registrations in San Antonio rose 15 percent over
in total dollar volume ever recorded in this District for
DEPARTMENT STORE SALES
any month, exceeding the previous high, in December
(Percentage chang o in retail valu e)
1960, by 4 percent. For the full year 1961, department
store sales were approximately 2 percent above
Dece mb e r 1961 from
12 months,
1960 and were about the same as the record achieved
November
Dece mber
1961 from
Area
1961
1960
1960
in 1959.
District department store sales continued above a
year ago in the first week of January 1962 but declined
substantially in the second week because of the extremely adverse weather throughout the District. As a
consequence, the unadjusted dollar volume of sales in

I BUSINESS

REVIEW

Total Ele venth Di.trlct , • , , , , , , •
Corpus Christi ••••••••••.•• • ••
Dalla • • • ••. •••• ••• •• •.• •• •.•
EI Pa . o •••.•••• • ••.•..•• ••• •
Fort Worth ........ .. ..... .. .
Houston • • • • •••••• • •••••••••

San Antonio • ..• •• • • • • •.• • •• •
Shreveport, la . • •... .. ..•... •
Waco .. ... .. . ........ . .. . . .
Othe r citle ... ... ... .. .. . ... .

53
66
54
50
56
58
51

42
52

47

4

-8
5

-2

8
9
5
13
1
-1

-5

1

-5
3
6
4
7

o
o

J

of cattle were taken off wheat fields in the Texas Panhandle when grazing became limited on dormant fields.

INDEXES OF DEPARTMENT STORE SALES AND STOCKS
Eleventh Federal Reserve District
(1947-49

=

100)

SALES (Daily averag e )

STOCKS (End 01 month)

Date

Unadjusted

Seasonally
adjusted

Unadjusted

1960, December. • • • •
1961 , October... .. ..
November. • • . •
December. • • • •

293
177
206
317

171
174
178
185

170r
213r
217
178p

r p -

Seasonally
adjusted
182
193r
197
191p

Revised .
Preliminary.

December 1960, and Houston showed an increase of
13 percent. Despite the gains in the last quarter, however, total 1961 registrations in the four markets combined trailed those of 1960 by 10 percent.
The most severe and extensive
cold weather of record dominated District agricultural developments during January. The
subfreezing temperatures resulted in considerable damage to winter vegetables,
citrus fruits, f;lax, and some small grains and clovers.
Livestock shrinkage was heavy, but deaths were limited mostly to newborn calves and lambs. Little precipitation accompanied the norther, and moisture continues
to be inadequate over much of the Plains and western
and southern areas of Texas.
In the south Texas commercial vegetable region,
losses from the January freeze are estimated by the
United States Department of Agriculture to be in excess
of $8 million, excluding any expenses for replanting of
damaged crops. Virtually all of the sweet corn, potatoes, tomatoes, green peppers, and other spring crops
that were up to a stand will have to be replanted.
Citrus fruit losses in the Lower Rio Grande Valley of
Texas are indicated to be around $9.5 million; however,
fruit salvaged for processing will reduce the losses
somewhat. Citrus fruit remaining for harvest at the time
of the freeze was estimated at 4.3 million boxes of
grapefruit and 2.4 million boxes of oranges. Although
young citrus trees (those under 5 years of age) suffered
the greatest damage, bark splitting occurred on older
trees and twigs were frozen back 18 to 24 inches. In
addition, nurseries sustained heavy losses of citrus tree
stocks.
Cattle, sheep, and goats survived the inclement
Weather remarkably well, as supplemental feeding had
been stepped up prior to the cold front and livestock
were generally in good condition. Increasing numbers

Prices received by Texas farmers and ranchers for
all farm products in 1961 averaged 4 percent above the
preceding year. Prices for crops were up 6 percent, and
those for livestock and livestock products were 2 percent higher. In the major crop categories, strength was
centered in prices for cotton and oil-bearing crops. In
the livestock and livestock products group, prices for
meat animals and wool and mohair showed increases,
while those for dairy products and poultry and eggs
were lower.
Cash receipts from farm marketings in the District
states during January-November 1961 amounted to
$3.6 billion, or 2 percent larger than in the corresponding period of 1960. A gain in receipts from livestock
and livestock products accounted for virtually all of
the 2-percent increase, as crop receipts were about
unchanged.
The Department of Agriculture has announced the
1962 price-support levels on a number of farm commodities. Rates for most of the commodities are the
same as those for 1961; exceptions are increases for
wheat, flaxseed, and mohair and decreases for cottonseed and soybeans.
During the 4 weeks ended J anuary 10, loans and time and savings deposits expanded at the
Nation's weekly reporting member banks, but investments and
total demand deposits declined. There was an unusually large increase in time and savings deposits, perhaps reflecting the response to the higher interest rates
offered by commercial banks following the revisions
in regulation Q. The money market displayed an easier
tone during the 4-week period, as money market banks
were under less reserve pressure. Market factors provided substantial reserves, and the financing needs of
dealers were reduced to more comfortable levels. The
effective rate on Federal funds generally ranged from
2 percent to 2% percent during this period.
Activity in the Government securities market was
significantly affected by the Treasury's January financings, as well as anticipations of the sizable refunding
operation to be carried out during February. In addition, a note of caution was injected into the market by
continued signs of business improvement, discussion
regarding the credit policy implications of recent business gains, reports of the near-term possibility of an
BUSINESS REVIEW
2:1962

I

91

increase in the prime lending rate of commercial banks,
and the President's statement that he would ask Con-

gress to raise the debt ceiling. The yield on 91-day
Treasury bills moved up 11 basis points from December 20 to reach 2.71 percent on January 19.

CO NDITION STATISTICS OF WEEKLY REPORTING
MEMBER BANKS IN LEAD ING CITIES

In the 4 weeks ended January 17, loans, investments,
and time and savings deposits advanced at the District's
weekly reporting member banks, but total demand
deposits declined. Cash accounts and total assets both
decreased.
Gross loans (excluding interbank loans) rose $20.1
million, primarily as a result of gains in commercial
and industrial loans and consumer-type loans, which
reflected improved business conditions and larger consumer purchases of durable goods. The expansion in
commercial and industrial loans was centered in loans
to trade concerns and businesses engaged in transportation, communications, and public utilities. During the
comparable period in 1961, gross loans declined $43.1
million because of decreases in loans to brokers and
dealers and loans to nonbank financial institutions.

Eleve nth Federa l Reserve District
(In thousands of dollars)
Jon. 17,
1962

Dec. 20.
1961

Jon. 18.
1961

'1,760.598
53.223

1,732.755
48.017

1.551.631
32.092

274
60.048

17.274
62.464

28.247
21.402

4.677
'170.681
84.087
150

3.838
163.936
99.327
79

8,456
194.108
47.937
101

Sales flnonc e, personal flnance, e tc .•. • •.....
Saving s banks, mtge. cos., ins. cos., etc ..•••..
Reo l-estate loans •••••••••. .. •• ...• •. .... •.
All other loons ....••• . ........•••...•••...

'91.203
'169.286
242.930
'770.828

91 .155
182.763
241.591
759.256

98.335
124.557
219.238
742.147

Gross loans •• . •.••••• . • . •••.•. •• •.. • • ••
less reserves and unallocat ed charg e-offs ••

3.407.985
62.197

3.402.455
53.663

3.068.251
57.076

Item

ASSETS
Commercial and industrial loons ..•.. • .••.• • .•
Agricultural loons •.•. . •....•••.•.•.••• .•• • •

loons to brokers and d e al ers for purchasing
or carrying :

U. S. Gov e rnm ent securities •.•....•. •••• .•.
Othe r securities •• .. . .• •• • . .. •.••••• . .. • •
Other loons for purchasing or carryin g :

U. S. Gov e rnm ent securities • • •.•••••.....••
Other securities ••..•....•••.....••.•..•.
Loans to dom estic comme rcial banks ••••.• . ..••

loans to foreign banks ••.........•.•.....••
Loans to other flnancial institutions:

Net loans ••• . • . .•• .. ••• . •••••. . • .•• • ••.

3.345,788

3.348,792

3.011. 175

Treasury bills ••.. • .•• • • . . . . • ••• ••• .•• • • •••
Treasury ce rtiflcates of indebtedness • • •• ..•• • .
Treasury notes and U. S. Gov e rnment bonds,
including guaranteed obligations, maturing :
Within 1 year • •.......••••..•••••.•••••
After 1 but within 5 years . • • ... .. .• . • •.. . •
After 5 years • •.. .. • • •..•. ••• . •••.•• • • .•
O ther securities •• •••• . • ... • ... • •....••• .• .

145.654
54. 132

136.816
58.1 16

130.629
48.295

227,728
769.375
347.8 16
419.250

195.324
786.883
356.071
415.278

146.617
733.436
369.430
385.686

Total investments • • .••.••....••••..•.• • • .

1.963.955

1.948.488

1.814.093

Cash Items in process of collection • ••.•.••• • . .
Balances with banks in th e United States ••••• . •
Balances wit h banks in for eign countries • ••• •• •
Currency and coin ....•••..•••• . ... • •• •..••
Reserves with Fed e ra l Reserve Bank • • . • . .•••••
Other a sse ts • • •... •• .......•.. • • • ... • •• • ..

610.840
497.557
2.518
58,7 42
595.323
217.427

614.5 10
559.482
2.057
61.641
589.365
218.441

532.810
509.017
2.157
54.961
588.370
223.077

TOTAL ASSETS •••..•••...••••..••••..

7,292,150

7,342776

6735,660

LIA81l1TIES AND CAPITAL ACCOUNTS
Demand d e posi ts
Individuals, partnerships, and corporations •• • •
Foreign gove rnments and offlclal instit utions,
central banks, and international institutions..
United States Gove rnm ent • •.•.••••••.•.••
States and political subdivisions • ••. .•••..••
Banks in the United States, including
mutual savings banks •••••• •..•• ••• . ••••
Banks in foreign countries • •. ...• •• • ••• .•• •
Certifled and ofAcers' checks, etc .••• . •••••.
Total d e mand d e posits •••••••• . ••••••.•
Time and savings d e posits
Individuals, partnerships, and corporations
Savings deposits .••. .....•••• ....• ••••
Other time deposits .•. . ....••.....•••••
Foreign gov ernm ents and ofRclal institutions,
centra l banks, and inte rnationa l institutions .•
U. S. Gov ernm ent, including postal savings . • •
States and political su bdivisions ••.• • •• •... .
Banks in th e Unite d States, including
mutual savings banks .• ••••••• .•......•.
Bonks in foreign countries •.... •.. . ••••••••

ANNUAL BANK DEB ITS AND ANNUAL RATE
OF TURNOVER OF DEMAN D DEPOSITS
(Dollar amounts in thou sands)
Demand deposits l

3.10 1.359

3.200,787}

2.946. 137

2.659
61.899
227.819

3.357
114.612
215.506

64.352
227.934

1.179.698
12787
76.876

1.228.463
14.927
61.229

1.156.817
14.562
49.468

4.663.097

4.838.88 1

4.459.270

842.188
604.552

805 7
544.971

3.005
7.317
325.153

3.005
7.317
307.810

6.321
1.200

OO}

4.487}
1.200

1.235.707
12.907
262.738
10.254

1.789.736

1.674.490

1.521 .606

Total d e posits • ••••••••••••••••..
Bills payable, rediscounts, e tc........... . . : : :
All other liabilities
Capitol accounts

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

6.452.833
108.116
113.676
617.525

6.513.371
96.050
125,7 42
607.613

5.980.876
58.025
124.643
572.116

TOTAL LIABILITIES AND CAPITAL ACCOUNTS.

7,292,150

7,342?76

6? 35,660

1 .Becau se of reclassifications, th ose data are not strictly comparabl w',th yearearli e r data.
e
is ~~a~~bl Asffa ~~s uItA of . thang es in call re port instructions, additional information
C
e, 0 ec IVO
pn 26, 1961, on t he deposit str ucture of me mber banks.
omparable year-earlier Rgures will be shown whe n they become available.

Annua l rate
of turnover

Debits to d e mand d e posit accounts 1
Area

Total time and savings d e posits •••••.....

BU S I NE SS REV IEW

Total investments at the District's weekly reporting
member banks advanced $15.5 million during the 4
weeks ended January 17, with increased holdings of

ARIZONA
Tucson •• • • • ••••• • •••
LOUISIANA
Monroe • • ••. • • •• • .• •
Shreveport • •• •••••• •
NEW MEX ICO
Roswe ll ... . . . . . . . . ..
TEXAS
Abilene .... ....... . .
Amarillo • ••.••• • ••• •
Austin ••.•••••••.• ••
Beaumont • • •...•••••
Corpus Christi ••• •. •• •
Corsicana •••••• • • •••
Dallas • • •••. ••••• . • •
EI Paso • ••.•• • •.••••
Fort Worth • • • • • • ••••
Galveston • • • • •••••• •
Houston •• •• , •..••.•
Loredo ... . • • •.• , •••
lubbock • • ••..•• •• . •
Port Arthur •••••• •• . .
San Ang elo ••• •••• .•
5an Antonio ... • • •• • •
Texarkana :! .•• ••• • .•
Tyler ...............
Waco •••••.•• • •• .••
Wichita Falls • • •••••.

1960

Perce nt
change

1961

1960

$3.165.487

$2,780.8 10

14

22.6

20.9

1.023.114
3.973.601

989.826
3.970.0 17

3
0

19.6
21.9

19.0
21.3

578.53 1

500.128

16

15.9

16.4

1.180.360
2.637.535
2.561.638
1.927,758
2.290.904
203.665
34.681.621r
4. 139.36 1
9.294.782
1.068.055
30.913.925
338.912
2.585,722
766.405
640.720
7.220.697
276.093
1.0 10.38 1
1.282,783
1.406.894

3
3
9
4
3
0
8
1
3
3
7
-1
- 1
1
1
5
-2
4
2
0

17.6
23.1
18.1
19.8
21.5
10.3
30 .8
23.7
25.0
17.5
24.7
15.3
21.9
17.6
13.6
19.6
15.8
17.0
18.8
14.1

18.6
22.9
17.9
19.5
21.3
10.6
30.1
24.8
25.0
17.3
24.3
15.4
22.7
17.9
13.9
19.5
16.5
17 .3
18.7
14.2

$ 11 4.668.992r

6

24.1

23.8

1961

1.218.093
2,726.646
2,789.660
2.0 12.809
2.360.622
203.354
37.429.400
4. 193.468
9.552.312
1.101.135
32.968,7 19
336.758
2.556.851
773.585
646.812
7.607.684
271.842
1.046.039
1.310,447
1,404,788

Totol-24 cities •••••.•. $12 1.251,757

-----

s u~d~:i~f~~t:. of individuals, partners hips, and corporations and of states and po litical
!l Th~ne flguros include only two bonks in Texarkana, Texas. Total de bits for all
banks In Te xarkana, Texas-A rkan sa s, including one bank located in th o Eighth District,
amou nted to $615.583.000 duri ng 1961 and $603.676.000 during 1960.
r - Revised.

Government securities accounting for $11.5 million of
the gain. Holdings of Treasury bills and of Treasury
notes and Government bonds maturing within 1 year
moved upward, more than counterbalancing declines
in Treasury certificates and in Treasury notes and Government bonds due after 1 year. In the corresponding
period last year, total investments expanded $70.6 million, as holdings of both Government and non-Government securities increased.
In the 4 weeks ended January 17, the weekly reporting member banks in the District experienced a $175.8
rnillion decrease in total demand deposits. A significant
portion of this decline was in deposits of individuals,
partnerships, and corporations; deposits of the United
States Government and domestic commercial banks
also moved downward. Time and savings deposits were
up $115.2 million, with the predominant increase
occurring in deposits of individuals, partnerships, and
corporations. During the comparable period in the preceding year, total demand deposits declined $107.4
million, while time and savings deposits rose only $46.5
million.
Total reserves at the District member banks increased
moderately during the 4 weeks ended January 3. Excess
reserves moved slightly lower, as decreases occurred at
both reserve city banks and country banks. Borrowings
expanded sharply from the low early-December level
at reserve city banks, while country banks reduced their
borrowings. As a result, reserve city banks showed net
borrowed reserves, but free reserves declined only moderately at country banks.
RESERVE POSITIONS OF MEMBER BANKS
Eleventh Federal Reserve District
IAverag es of daily flgures . In thou sand s of dollars)

5 weeks e nded
Dec. 6, 1961

4 weeks end e d

Jon. 3, 1962
606,9 17
563,882
43,035
600,663
6,254
8,969
-2,7 15

595,684
554,75 1
40,933
58B,477
7,207
829
6,37B

588,396
547,007
41,389
576,412
11,984
1,098
10,B86

544,133
436,089
108,044
48 1,269
62,864
34 1
62,523

538,793
432,860
105,933
471,60B
67,185
891
66,294

5 17,35B
415,593
101 ,765
439,738
77,620
1,189
76,43 1

1,151,050
999,971
151,079
1,08 1,932
69, 11 8
9,310
59,808

1,1 34,477
9B7,611
146,B66
1,060,085
74,392
1,720
72,672

1,105,754
962,600
143, 154
1,0 16,1 50
89,604
2,287
B7,317

4 weeks end e d
Item

RESERVE CtTY BANKS
Total res erves held . . . ... .. . ...
With Fed eral Reserve Bonk .. ..
Currency and coin . .. . .. . . . ..
Required reserves . ............

Excess reserves . . .. ... . .. . ...•
Borrowings • ••... • ....•..•. . . .

free reserves . .. .. .... ....... .
COUNTRY BANKS
Tola I reserves held . ... ... . ....
With Fe d era l Reserve Bank .. ..
Curr enc y and coin . . .........
Required reserves . ... ... .. .. . .
Excess reserves . •••... .• .. ....
Borrowing s•. .....•... ... .....
Free reserves • ....••...•......

ALL MEMBER BAN KS
Tota l reserves hel d . ... ......•.
With Fe de ral Res erve Bank .. ..
Currency and coin . . . ...•. .. •
Req uired reserves • • . ... ... ...•
Excess reserves • . . . . . . . . . •....
Borrowing s• ..............•.•.
Free reserves • .. •• ..• ...•...•.

Jon. 4, 1961

NEW MEMBER BANKS
The Gateway National Bank of Fort Worth, Fort
Worth, Texas, a newly organized institution located in
the territory served by the Head Office of the Federal
Reserve Bank of Dallas, opened for business January 2 ,
1962, as a member of the Federal Reserve System. The
new member bank has capital of $400,000, surplus of
$300,000, and undivided profits of $100,000. The officers are : J. D. Gamel, President and Chairman of the
Board; D. A. Brogoitti, Executive Vice President; Jack S.
Hart, Vice President and Cashier; and Barton Sandlin,
Assistant Cashier.
The Valley-Hi 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
January 8, 1962, as a member of the Federal Reserve
System. The new member bank has capital of $250,000,
surplus of $250,000, and undivided profits of $100,000.
The officers are : Pat legan, Chairman; H. B. Kaulbach,
Vice Chairman; W. E. Eagle, President; B. O ' Neal Hillin,
Executive Vice President; Jud Watson, Cashier; C. R.
Headen, Assistant Cashier; Chester Allen, Assistant
Cashier; and I. W. Ellison, Assistant Cashier.
NEW PAR BANKS
The First State Bank of Hitchcock, Hitchcock, 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,
January 3, 1962. The officers are : George O . Gillespie,
President; lawrence Henckel, Vice President; and Marvin
W. Briggs, Cashier.
The Southside State 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, January 10, 1962. The officers are: Henry M. Dudley, Jr., I,
President; James N. Fowler, Vice President and Cashier;
and Thomas C. Willis, Assistant Cashier.
The First State Bank, Premont, Texas, a nonmember
bank located in the territory served by the San Antonio
Branch of the Federal Reserve Bank of Dallas, opened
for business on January 2, 1962, and was added to the
Par list on January 12, 1962 . The officers are: C. Woodrow laughlin, Chairman and President (Inacti've); Arlin
Yeager, Executive Vice President; Otis E. Scales, Vice
President; and Mrs. Jean Brown, Cashier.

BUSINESS REVIEW

2:1962

11

I
I

District crude oil production rose
moderately during December to
a level of over 3 million barrels
daily, the highest total since
April 1961. The upward production trend continued in early January" though at a
slower rate. Louisiana and New Mexico have retained
their January allowables for February, but the Texas
allowable schedule has been reduced to 8 producing
days from 9 days a month earlier. Daily average output
in the District should decline only slightly, however, as
February has fewer days.

Beginning with this issue of the Business Review,
seasona lly adjusted indexes of marketed production of
natural gas by quarters will be published, in addition
to actual production figures, as they become available.
The indexes have been computed for the first quarter
in 1951 through the third quarter in 1961 and may be
obtained by addressing a request to :

District refinery activity declined slightly in December, partially because of a work stoppage at a major
Texas Gulf Coast refinery; but the plant has since
r.esumed normal operations. Crude oil runs to District
refinery stills rose in early January.

MARKETED PRODUCTION OF NATURAL GAS

Drilling operations in the District advanced moderately in December and early January. The total number of wells completed rose about 4 percent during the
5 weeks ended January 6, and total footage drilled
advanced 7 percent. The number of active rotary rigs
increased 3 percent in the District during December.
This rise in drilling equipment utilization reflects the
likelihood of future expansion in District well
completions.
National crude oil output and imports expanded in
December and early January. Nevertheless, this increase in new supplies was offset by a rise in crude oil
demand, and inventories showed little change. Crude
oil stocks in the Nation in early January were about 3
percent above a year ago.
The seasonally adjusted index of demand for the
four major refined products declined significantly in
NATIONAL PETROLEUM ACTIVITY INDICATORS
(S easonally adiusted ind exes, 1957-59

= 100)

Dece mb e r
1961 p

Indicator

November

Decemb er

1961p

1960

105

105

101

102

CRUDE OIL RUNS TO REFINERY
STILLS (dail y ave rag e ). • • • • . . • • • • . . • •
DEMAND (daily averag e )
Gasoline ........... . . . .. .. .. . .. . ...
Kerosen e . • • • . . • • • • • • • . • • . • • • • • • • • •

107

Distillate fu e l oil.... . . . • . . . . . . . . . .. • .
Residual fuel oil . . . . • • . . . . . . . • . . . . . . .
Four reAned products. . • . • . • . . • . . . .
STOCKS (end of month)
Ga soline ......... . ... . .. .. . . .......
Ke rose ne. . • .. • . . . .. .. • . . • . . . . . . . . .
Distillate fuel oil...... . . . . ..... .. . . . .
Re sidual fu el oil.. . • .. . . . . . .... . . . ...
Four re Aned products. . • • • • . • • . . . . .

102
92
101

109
118
105
93
105

103
113
110
97
105

103
117
109
84
104

103
110
104
79
101

104
11 3
99
82
100

Pre li minary.
SOURCES : Am e rican Pe trol e um Instilute .
United Sta tes Bure au of Min es .
Fede ral Rese rve 8ank of Dallas.

p -

I

BUSINESS REVIEW

112

2:'1962

ANNOUNCEMENT

Research Department
Federal Reserve Bank of Dallas
400 South Akard Street, Dallas 2 , Texas

Seasonally adiuste d ind e x
(1957-59 = 100)

In millions of cubic feet
Third

Second

Third

Third

Second

Third

quarter

quart er

quarter

quarter

quarter

quart er

Area

1961

1961

1960

1961

1961

1960

louisiana •• • •
New Mexico .•
Oklahoma . ••
Texa s ....• ••

710,800
183,600
170,500
1,382,800

739,700
189,600
183,500
1,446,400

699,700
194,800
161,400
1,389,000

142
109
11 4
107

147
11 1
107
111

140
115
108
107

Total .. . ...

2,447,700

2,559,200

2,444,900

116

119

11 6

SOU RCES : United Sta tes Bureau of Mines.
Fede ral Rese rve 8ank of Dallas.

December, as substantial reductions were recorded in
gasoline and kerosene consumption. In early January,
however, refined product demand strengthened, paced
by significant improvements in the consumption of both
light and heavy fuel oils. Heating oil use was especially
strong because of the very low temperatures registered
in most of the sections of the Nation which use heating
oil; prices of these products firmed as inventory levels
declined, Gasoline demand in early January decreased
as anticipated; stock accumulation began, and price
discounting was noted in several areas of the country,
The Texas industrial production
index in December remained at
178 but was significantly above
the 171 registered in December
1960. The month-to-month increase in mining output, with special strength apparent
in crude petroleum production, offset declines in both
durable and nondurable manufactures, The advance
over December 1960 was shared by all manufacturing
industries except lumber and wood products, fabricated
metal products, petroleum and coal products, and
"other" durable goods. Compared with a year earlier,
mining showed a slight rise, as gains in crude petroleUl:ll
and natural gasoline production offset reductions in

NONAGR ICU L
TURAL EMPLOYMENT

INDUSTRIAL PRODUCTION
(Sea sonally adiusted Indexes, 1947· 49

=

Decemb er

TEXAS
Total industrial productic!:'", . • . . .. .
Total manufactures . •.. . ..• . • . • .
Durabl e manufacture s.. . ... . .•..
Nondurabl e manufactures • • •• • .• .

Mining . . . .. ... . ...... .. .. ....
UNITED STATES
Total industrial production • •• . .
Total manufactures . . . . •• . .••
Durabl e manufactures •• .• . • • .
Nondurabl e manufactures . ... .

. .•
• ••
•••
. ..

Mining ... . . ... . . .......... . ..
Utilities ••••.•••••• • •..• • •.•• ••
p -

1961

October
1961

Decemb er

Perc ent chang e

1960

Dec. 1961 from

Number of p ersons

Nov.
1961

De c.

Decemb er

178
223
261
205
135

178
226
268
207
132

180
229
271
209
133r

171
210
237
197
133

175
173
179
172
132
319

173
172
177
170
132
317

171
170
174
169
131
318

156
154
156
156
129
287r

Nove mb er

Decemb er

1961e

1961

1960r

wage and salary work ers . .
Manufacturing .. , , , , , ....
Nonmanufacturing .... ....
Mining, ., ..... ... . .. .
Construction . . . . ...... .
Transportation and

4,551 ,500
772,200
3,779,300
240,500
271,300

4,516,800
778,700
3,738,100
240,200
288,100

4,520,900
774,600
3,746,300
243,400
272,400

.1
-5.8

0.7
-.3
.9
- 1.2
-.4

public utilities • .. . .. . •
Trade • •••• . • • • • ... •••

392,900
1,1 52,700
222,800
6 11,000
888,100

388,100
1,107,900
223,100
6 11,100
879,600

402,400
1,1 45,800
218,700
599,700
863,900

1.2
4.0
- .1
.0
1.0

-2 .4
.6
1.9
1.9
2.8

Typo of employment

1960

Total nonagricultural

Finance . . • . . .. , ... . .. .
Service . . .. . ....... .. .
Governm ent . .. . . . ... ..

Pre liminary .

r-

Nove mb er

1961 p

Area and typ e of Index

Five Southwestern Stotes'

100)

0.8
- .8
1.1

Rev ised .

SOURCES: 80ard of Gove rnors of th e Fede ral Rese rv e Syste m.
Federal Rese rv e 8ank of Dal las.

1

Arizona, Lou is iana, Ne w Mex ico, Oklahoma, and Texa s.
Estimat ed .
Re vi se d .

a r-

natural gas and metal, stone, and earth minerals
production.
Estimated nonagricultural employment in the District
states reached a record 4,551,500 in December
1961, or 1 percent more than the year-earlier totaL
Substantial employment increases in trade and government during the month and smaller gains in transportation and mining offset sizable employment declines in
construction and manufacturing and slight reductions
in finance and services. Unemployment in Texas during
December increased 10,200 to 190,200, or 5.2 percent
of the labor force. This rate compares with 4.9 percent
in November and 5,5 percent in December 1960. The
increase in unemployment was largely due to inclement
weather, which slowed outdoor activity.
The value of construction contracts in the District
states increased 10 percent during November 1961 and,
at $343 million, was more than 40 percent above any
previous November of record. Residential building
declined, as is normal during this month, but was above
any previous November. The month-to-month decrease

SOURCES , State e mployment ag oncies.
Fedoral Rese rve Bonk of Da llas.

in residential construction was more than offset by
significant increases in nonresidential building and
public works and utilities. The sharp advance in contracts during November placed the total for the first 11
months in 1961 at an all-time high of $3,720 million,
or more than 7 percent above the comparable total in
1960; cumulative contracts increased for every major
sector.
VALU E OF CONSTRUCT ION CO NTRACTS
(In millions of dollars)
Janua ry- Nove mb er

Octob er
196 1

Nove mb e r

196 1p

1960

1961p

1960

343
127
124
92
3,008
1,306
1,095
607

313
156
87
71
3,2 91
1,498
1,005
787

225
103
76
45
2,886
1,253
9 16
71 7

3,720
1,544
1,151
1,025
34,461
15,006
11,246
8,209

3,475
1,418
1,052
1,005
33,643
14,249
11,258
8,136

Nove mb e r

Area and typ e
FIVE SOUTHWESTERN
STATES· • ••. . •. •.. .•••• •
Residentiat building • •• . .• .
Nonresid entia l building • .••
Public works and utilities • ..
UN ITE D STATES .. .. .... ....
Resid e ntial building . . .. .. .
Nonresid e ntial build ing . . . .

Public works and utilities, • •

l Arizo na, Lou is iana , Ne w Mexi co, Oklahoma, and Te xas.
p - Preliminary.

NOTE . - De tail s may not add to totals bocause of roundin g.
SOU RCE : F. W. Dodg e Corporation .

BUSINESS REV I EW
2: 1962

I

CONDITION STATISTICS OF ALL MEMBER BANKS

BANK DEBITS, END-OF-MONTH DEPOSITS
AND ANNUAL RATE OF TURNOVER OF DEPOS ITS

Eleve nth Fe deral Re serve D istrict

(Dollar amounts in thou sands)

(In millions of dolla rs )

Debits to de ma nd

196 1

Are a

Nov. 29,
196 1

loans and di scounts. •.... . . .. . . . ••. . . . ..
Unite d States Gove rnm ent o bligation s... ...
O th er se curiti es .• .. . ... .. . . ... .. . . . .. . .
Reserves with Fe deral Rese rve Bank .. .• ....
Ca sh in vau lt e ••. .. . . .. .. . ... .. . •.. . . . .
Balances with ban ks in the United States •.. .
Ba lances with ba nks in foreign co untries e .. ..
Ca sh items in process of coll ection .. .. .. . ..
Oth er a ssetse • . ... .. . . • . ...• . .. . . .... ..

5,554
2,853
984
1,0 10
173
1,299
3
775
344

5,442
2,8 12
975
928
171
1,193
3
588
255

5,157
2,593
867
868
164
1,25 1

TOTAL ASSETSo ... .... . . .. ...... . . ..

Percent
chang e from
Decemb er

Dec. 28,
1960

Dec. 27,
196 1

12,995

12,367

11,794

1,494
7,317
2,855

1,303
6,965
2,822

1,373
6,745
2,504

.... .. . . .. . . . .
. ........•. . ..
.. .. . . .• .. ... .
... . . . . . . . . . ..

11,666
107
165
1,057

11,090
63
159
1,055

10,622
22
170
980

TOTAL LIAB ILITIES AN 0 CAPITAL
ACCOU NTSe • • . •• • •• . •.•• •• • •• . .. •

12,995

12,367

De mand d e posits l

de posit a cco unts!

Nov.
1961

Item

Annual rate of turnover

1960

Dec.

De c. 31 ,
1961

De c.
1961

Nov.
1961

Dec.
1960

ARIZONA
Tucson .. ... . .. ...... $
LOUISIANA

343,754

4

42

$ 160,337

26.6

27.5

21.6

Monroe • •• • •• •• • • •• •
Sh reve port • • .•...•..

90,579
326,732

-6
0

13
-6

61,595
204,941

19.1
20.6

21.8
22 .3

17.6
21.5

23

39,235

16.3

16.3

ASSETS

16.4

NEW MEX ICO
53,526

Rosw ell • •••.•• . ..•• •

LI ABIlIT IES AND CAPITAL ACCOUNTS

TEXAS
108,862
232,979
250,840
184,400
212,308
18,399
3,840,387
398,804
852,798
104,595
3,163,989
30,784
307,002
64,5 11
53,842
663,9 12
25, 123
89,7 47
119,702
118,760

- I
-2
9
4
I
- 2
24
6
6
16
10
15
13
1
-1
3
4
-4
10
-2

3
6
23
8
9
2
8
5
I
10
8
2
0
-3
1
6
9
9
8
-6

Totol-24 cities • •• .. • •• $ 11,656,335

12

7

Abil ene ... • .. .. . ... .
Ama rillo • . .. ... ... . .

Austin .•... . ........
Beaumont • • • .....• ••

Corpus Christi . ... . . . .
Corsicana ... . . . . . ...

Dallas .. . . ... ... .. . .
EI Paso • . •.• .• • • .. .•
Fort Worth .. . . . ... ..
Galveston . .. •. . . .. ..
Houston • • •••• • •• •• ••

Lar edo .. . ... . .•.• ..

Lubbock .. . .. . ..... .
Port Arthur .... . . . ...
San Ang e lo • •• •• • • • •
San Antonio ..... . ...
Tex a rkana :! . .. .. . •.•

Tyle r .. .... ....... . .
Waco .. . ......... . .
Wichita Fa lls • • ••• •• •

1

77,168
126,304
160,915
112,33 1
119.170
21,986
1,437,547
193,283
418,753
68,29 1
1,548,396
24,45 1
137,368
43,687
5 1,137
413,242
17,648
68,37 1
73,682
107,836

- -- $5,687,674

17.6
22.9
18.7
20.3
22.0
10.4
34.3
25.7
25.3
18.7
26.2
15.7
27 .8
17.2
12 .7
19.7
17.3
16.6
19.8
13.8

18.6
24.1
17 .5
20.3
2 1.7
11.0
29.8
25.1
24.7
16.7
25.4
14.3
26.3
16.6
13.2
19.6
16.8
17.8
18.4
14.6

19.3
22.0
16.1
19.2
21.7
10.8
34.3
26.8
25.4
19.2
26.0
16.7
30.2
18.4
13.4
19.7
16.1
16.7
18.5
15.0

25 .8

24.5

Demand deposits of banks . .. .. .. .. . . . . . .
Other d emand d eposits. . .•. • . • . .. •• .. . . .
Tim e d e po sits.... .. ....... .. . .. . . ... . . .

25.7

Total d eposits .. •. .... .
Borrowing se . . . . .. ... . .. .
O ther lia biliti ese .. .... . ..
Total capita l accoun tse .. . .

e -

Estimat ed .

GROSS DEMAND AND TIME DEPOSITS O F MEMBER BANKS
Ele ve nth Federa l Res erve D istrict
(Ave ro gos 01 daily fl gures. In mil lion s 01 dollars )

Deposit s of individ ual s, par tne rships, and corporati on s a nd of states and political

TIME DEPOSITS

GRO SS DEMAN D DEPO SITS

subd iv isions.

~ Th ese flgures include onl y two banks in Texarkana , Tex as. Tota l debit s for all

amounte d to $54 ,965,000 lor th e month 01 De cem be r 1961.

CO N DITION OF THE FE DERA L RESERVE BANK OF DALL AS

Ja n. 17,
1962

Dec. 20,
196 1

Tota l gold certiflcate rese rves . .. •. _ . . ..••.. .
Di scounts for memb er ba nks . ••.• . • . • .•• •.• •
O th er discounts and advanc es • . •.. . ... . ... .
U. S. Governm ent securities . • . .............•
Total ea rning a sse ts........ . .. . . ... ...... •
M emb er ban k rese rv e d eposits •••• . .. .. .. . ..
Fed eral Rese rve notes in actua l circulation .. ...

685,652
16,159
1,509
1,154,38 1
1,172,049
996,3 15
853,797

655,209
200

o

1,1 76, 136
1,1 76,336
966,225
874,233

8,052
8,044
7,759
7,889
8,174
8,322
8,505

3,904
4,030
3,820
3,9 10
4,069
4,058
4,179

Septemb er .
O ctob e r . . .
Novemb er..
Dece mb er..

(In thou sands of do ll a rs )

Item

Total

Jan. 18,
196 1
721 ,1 74
100
522
1,084,537
1,085,159
971,44 1
822,631

Country
banks

Rese rv e

Country

Tota l

city banks

bonks

4, 148
4,0 14
3,939
3,979
4,105
4,264
4,326

Date

Rese rve
city banks

1959: Dece mb e r..
1960: Dece mb e r..
1961 : August. • • .

ban ks in Texarkana , Tex as- Arkan sa s, incl udin g on e bonk located in th e Ei ghth Dis trict ,

2
579
313

2,099
2,482
2,774
2,787
2,788
2,806
2,839

1,077
1,263
1,396
1,404
1,398
1,409
1,42 1

1,022
1,219
1,378
1,383
1,390
1,397
1,4 18

BUILDING PERM ITS
VA LU AT ION (Doll ar amoun ts in thousan ds)
Perc ent chang e

Dec. 1961

NUM8ER

DA ILY AVERAGE PRODU CT IO N OF CRUDE O IL

De c.
1961

12 mos.

196 1

627

from
12 mon ths,
Dec.

1961

12 mos.
196 1

Nov.

196 1

Dec.
1960

10,373

$ 1,960

$ 44,536

-54

-64

10

141

11 ,7 90

506

30,5 16

-52

-66

27

Wichita Falls • •

125
2 19
242
242
231
1,376
387
484
2 18
958
103
244
845
20 1
114

1,448
3,32 1
4,022
3,574
3,919
26,227
6,738
7,3 19
2,046
20,325
2,660
2,904
13,954
3,1 27
3,026

1,030
3,207
2,651
1,062
1,10 1
8,240
7,134
2,042
705
12,667
5,264
390
4,248
2,117
732

16,293
41,008
57,33 1
23,409
24,504
194,182
67,075
48,616
7,069
248,933
44,266
7,655
54,276
15,555
2 1,663

26
21
-59
-81
-24
-32
105
0
89
-18
105
-9
-6
158
- 17

68
14 1
-56
-33
77
-32
-46
- 12
349
-6
230
- 8
- 17
196
- 8

- 27
28
24
25
11 4
38
17
5
15
- 14
21
-23
-6
- 6
- 20

Total -17 cities • •

6,757

126,773

$55,056

$946,887

- 15

- 18

7

Area

(I n thousa nds of barre ls )

1961 from
1960

ARIZO NA
Percent chang e from
Decemb er

Novemb er

D ecemb er

Novemb er

Decemb er

Area

1961p

1961 p

1960

196 1

1960

ElEVENTH DiSTRiCT • •• • . . • •

3,042.4
2,640.3
472.0
1,199. 1
135.8
107.6
725.8
27 2.3
129.8
4,3 17.0
7,359.4

2,929.6
2,527.2
458.7
1,124.6
128.1
107.2
708.6
274.9
127.5
4,263.9
7,193 .5

2,950.4
2,58 1.9
459.6
1,177.1
138.7
108.4
698.1
236.5
132.0
4,199.7
7,150. 1

3.9
4.5
2.9
6.6
6.0
.4
2.4
-1.0
1.8
1.2
2.3

3.1
2.3
2.7
1.9
-2.1
- .7
4.0
15.1
-1.7
2.8
2.9

Texa s. . . . . . . . • •• .. . . . • .

Gull Coast ..... . .... ..
W est Texa s • . .. .. . . •.•

Ea st Te xas (prope r) .. . . .
Panhandle • •• •••• ..•••
Rest 01 Sta te . . .. . . .. ..
Southeastern N ew M exico . .
Northern l oui siana ••• . . . ••

O UTSIDE ELEVENTH DISTRICT.
UNITED STATES .. . . . . .... . .
P-

Pre liminary.

Tucson • . •.... .

LOUISIANA
Shreve port ••• .
TEXAS
Abile ne •• • • .. •
Am a rillo .. . . ..
Austin . .. . .. •.
Bea umont •. . . .
Corpus Christi . •

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

Lubb ock •. . . .•
Port Arthur • . . .
San An ton io .. .
Wa co . • . .. . . .

SO URCES , Am erican Pe tro le um Institute.
United States Bu re au of Min es .

Fede ral Rese rv e Bank 01 Dallas.

BUSINESS REV I EW

14

2':1962