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Business Review ., . .~ , . ",.............,. .t ...... ., ~ . .. Natural GasIts Impending Shortage And Potential Abundance Bank Credit CardsThe Boom Spreads To the Southwest January 1971 ---''~ ' This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org) Natural Gas- Its Impending Shortage And Potential Abundance pemand for natural gas is Increasing far faster than proved ~eserves, making it hard for the gas Industry to keep up with the ~ation's growing need for this lmportant fuel. Much of the burden of meeting the demand for natural gas falls on producers in the Southwest. States of the Eleventh Federal Reserve District accounted for 85 percent of the nation's gas production in 1969. And at the beginning of 1970, they accounted for 83 percent of the proved reserves. Many experts believe a reserveto-production ratio of at least 10 is required to meet the industry's cOmmitments. But if current trends - continue, that critical point could be reached by 1973. Where proved reserves were more than 32 times greater than gas production in 1946, by 1969 the ratio had dropped to 13.3. Many gas distributors already report difficulties in supplying gas beyond their current commitments. The seeming suddenness of this shortage comes as a surprise to much of the general public, which has been accustomed to the belief that this country has an abundance of natural gas. Adding to the public's consternation are the large volume of known reserves and reports of vast quantities of gas still to be found. Moreover, the Gas consumption-Gas and other light fuels take increasing share of the energy market TRILLION BTU's -60------------------------------------------------~~~ TOTA~ - SOURCE: U.S . Bureau of Mines BUsiness Review I January 1971 public is generally aware that imports of liquefied natural gas are technically feasible, that synthetic gases can be made from coal, oil shale, and petroleum products, and that in the generation of electricity atomic energy may even be superior to natural gas. Natural gas producers explain this apparent contradiction between scarcity on the one hand and abundance on the other as the result of a pricing structure that does not encourage exploration and development of new reserves. They are appealing for higher prices as a means of stimulating growth in reserves. The Federal Power Commission, which is charged with the regulation of prices of gas sold interstate, has been examining the producers' argument, and some experts believe the FPC will grant at least some of the increase producers are seeking. Prices of gas sold within states (and therefore not subject to FPC regulation) have already advanced above the regulated prices of interstate gas. The supply problem Reserves have not merely failed to keep pace with demand. They have actually declined in the past two years. Proved reserves stood at 275 trillion cubic feet in 196912 trillion feet less than in 1968 and essentially the same as for 1966. Even though reserves are still over 13 times greater than production-which means that at current production they should be adequate for more than 13 years -there are already shortages in some areas. And more shortages are expected as the reserve-toproduction ratio declines further. 1 and built new plants dependent on gas. Others turned to gas because it burns with little atmospheric pollution, and even more would still switeh if an adequate supply were available. As production increased, natural gas also became important for the other fuels and hydrocarbons produced with it. Propane, butane, Growth in demand and natural gasoline are all gases at reservoir temperatures and The current heavy demand for pressures and are often produced gas was slow in developing. The along with natural gas. Natural advantages of gas as a fuel have gas itself is largely methane, with been apparent for years. Cleaner some ethane,. All these products and more convenient than other fossil fuels, it was quickly preferred are important as fuels or inputs to petrochemicals. In addition, some in areas where it was available. natural gas contains helium, a But in the early days of gas prolightweight inert gas recovered duction, when natural gas was released essentially as a by-product under a Government-sponsored production and conservation proof petroleum production, it could gram for special experimental and not be transported economically industrial uses. Natural gas is the for any great distance from the only economical source of helium. wellheads. With little foreseeShortages of coal and heavy fuel able commercial value for gas, oils have also added to the demand there was no incentive for its conservation and great volumes were for natural gas as many electric burned (or flared) in the oil fields. But as transmission systems were developed, opening distant Gas production-Proved markets, gas was rapidly trans.. . but faster rise in output reserves have doubled formed from a near-worthless byhas sharply cut since World War \I . . . product of petroleum production effective life of reserves into a highly valued natural TRILLION CUBIC FEET YEARS resource. Production increased dramatically. Where output -40----~---------------totaled about 2 trillion cubic feet in 1935, it ran about 25 trillion feet in 1969. In the intervening -30------~------------years, the industry's share of the nation's total energy market increased from about a tenth to more than a third. Much of this -200------~*_------------20--------------~------increase was due to residential users' switching from coal and fuel oil. But natural gas was also becoming important as an indus-10·· .... · .. ·...... ··· ...... ·· .... · .. · .. · .... ·.. · .......... trial fuel and as an input to the CRITICAL LEVEL growing petrochemical industry. Industries that had to have -1oorl~r--rI--r--rI--T-~1 rigid control of temperatures in -0 I I I '40 '50 '60 '70 their production processes-such '70 '60 '50 '40 as in the manufacture of glass SOURCE: American Gas Association SOURCE: American Gas Association and primary metals-found gas an excellent fuel for their purposes Several factors make a large backlog of reserves necessary for an adequate level of production. One relates to the conservation of gas fields and the maintenance of efficient rates of production. Since pressure in the underground reservoirs of a gas field falls as the field is exhausted, the rate of production must be regulated to extend the life of the field as long as possible. Also, the gas must be withdrawn at a rate slow enough to protect the interests of all producers in the vicinity. Without regulation, one producer could take out a disproportionately large share of the gas from a field by producing faster than his neighbors. In fields where oil and gas are found together, the flow of gas is further restricted by oil conservation regulations. The other primary factor relates to the capacity of pipelines. Before building a pipeline, investors require that proved reserves -300--------------------- 2 in an area be large enough to ensure full use of this expensive facility for many years-often 20 years. Since gas cannot be moved economically to market except by pipeline, production is held to the capacity of pipelines built for a flow over many years. utilities have shifted away from the use of other fossil fuels as energy sources. Much of the changeover has been due to higher prices and uncertain deliveries of other fuels. But much of it has also been due to the mounting concern over pollution. And this c?ncern-which is partly responslble for delaying the shift of utilities to atomic energy-is expected to further increase demand for natural gas. Energy experts generally agree that because of the superiority of gas as a fuel, its use will Continue to increase faster than total energy use-at least as long a~ production permits. Not only wIll businesses and residential users burn more gas, but efforts are being made to develop new uses of gas as a pollution-free energy source. These include an automobile fueled by natural gas and fuel cells operating on natural gas to generate electricity. Incentive and prices The problem is not a shortage of natural gas to be found. In fa?t, from the standpoint of sup~lies still to be discovered, the In~ustry'S future is probably very brlght. In 1969, the Potential G~s Agency of Colorado School of MInes Foundation estimated that 1,227 trillion cubic feet of potenti~y recoverable natural gas was shll to be discovered in the United States. This estimate, Which did not include proved reserves, was nearly twice the estimate prepared in 1968. The difference reflected recognition of the Vast potential in Alaska and the feasibility of drilling to new depths. With plenty of gas still to be found, the drop in proved reserves lllust be attributed to a lack of exploration-which industry SPokesmen attribute, in turn, to a lack of incentive. According to th~m, the FPC has kept interstate prlces of natural gas too low to Business Review I January 1971 sustain adequate exploration and development of new reserves. Only with higher prices, they say, can producers afford the high costs and risks of searching out and developing new reserves, especially in the face of rising taxes and drilling costs. But while the industry views higher gas prices as necessary to the easing of shortages, inflation-conscious consumers and Government officials view the prospects of higher prices with foreboding. Any discussion of appropriate prices for natural gas must distinguish between the short-run and long-run effects of prices on production. Current gas production is largely insensitive to prices. The direct costs of operating a field are usually very small compared with the costs of finding and developing a field. Once the field is developed, costs of exploration and development become fixed costs and are incurred whether gas is produced or not. Given the opportunity, producers will sell gas from existing wells as long as the revenue they receive exceeds their comparatively small operating costs and allows them to cover at least some of their fixed costs. Although they could eliminate their operating costs by not producing, their fixed costs would remain. Therefore, even in cases where not all costs are covered, producers may still continue production to reduce their losses. Another cost also encourages producers to continue the operation of existing wells. That is the cost of foregoing income. By withholding reserves from production, producers must forego the interest income they could have earned by investing cash receipts from the sale of reserves. Therefore, unless they expect gas prices to increase fast enough to offset this loss in interest income, producers are not apt to withhold reserves from production. Prices then have little influence on the availability of gas in the short run. As long as reserves were large enough to accommodate demands for gas and prices were high enough to cover operating costs, interstate prices could be set with little danger of restricting supplies. Now that reserves are beginning to dwindle, however, and new reserves must be discovered and developed, long-run considerations also become important. Exploration costs, which were fixed in the short run, become variable in the long run. In the long run, prices must be high enough to cover all the producer's costs, including those of finding and developing new reserves. Recognizing the need to stimulate the discovery and development of new reserves, the FPC has already begun to raise prices of gas in some producing areas, and industry experts expect prices in other areas to be raised. As natural gas became more important after World War II, prices rose. At the end of the war, wellhead prices of natural gas averaged about 5 cents a thousand cubic feet. In 1969, they averaged nearly 17 cents. Prices would probably have risen faster had large proved but undeveloped reserves not been available at the end of the war. But with production increasing faster than reserves, proved reserves gradually declined, slipping relative to production over most of the postwar years and then dropping absolutely after 1968 as growth in reserves fell short of withdrawals. Prices offered in interstate sales have been at the FPC ceilings and would probably have gone higher had there been no ceilings. A recent FPC study indicates that intrastate buyers have been paying as much as 10 cents a thousand cubic feet more than prices offered by interstate purchasers operating under FPC regulation. Better 3 to large users willing to take deliveries that can be interrupted. To hold down transmission costs by operating pipelines at full capacity, the industry can afford to offer gas to some users at reduced prices, provided deliveries can be Impact on consumers interrupted during periods of peak demand for gas. Consumers have not suffered as Third, improvements in gas much from increases in gas prices transmission systems have helped as might be expected, however, offset some of the rising prices and for several reasons. First, of gas in the field. New, larger as natural gas entered new marpipelines allow much more ecokets, it replaced more expensive nomical transmission than some of gas manufactured from coal and the older ones. By doubling the oil. Utilities, for example, bought only about a sixteenth as diameter of the pipe, for instance, much manufactured gas in 1968 as transmission companies can quadruple the amount of gas in 1945. they carry. Second, natural gas has There will also be factors to remained competitive with other fuels. Coal producers, in fact, have soften effects of an increase in long complained-despite increases the FPC price ceiling. Most gas in field prices of natural gas-that will still come from reserves the gas industry invaded their covered under long-term contracts markets by offering special prices made when the ceiling was lower. prices and other contract terms are attracting newly developed gas to intrastate users, leaving interstate users to feel most of the pinch on gas supplies. Gas prices-Rising prices to consumers primarily reflect costs other than prices at the well CENTS PER CUBIC FOOT -60-------------------------------------------AVERAGE PRICE AT POINT OF CONSUMPTION -40----------------------------~~----------- -20-------------------------------------------- -O--TI------rl------rl------r------~----~~ '20 '30 SOURCE: U.S. Bureau of Mines 4 '40 ,Jo ,Jo )0 Only when new, higher-priced discoveries make up a significant part of the nation's production will users feel the influence of the rise in prices. And even then, the increase will not necessarily be in direct proportion to the advance in field prices. Because transmission costs bulk so large in the prices of gas sold in distant markets, an increase in field prices could translate into a smaller percentage increase in prices to consumers. Alternative sources Prices high enough to encourage producers to find more reserves could be consumers' least expensive alternative. Supplies of gas from other sources are more limited than domestic gas, and more expensive. Imports by pipeline from Canada and Mexico supply very little of the American market, equaling only about 3 percent of the American production marketed in recent years. Mexican imports are not expected to change much. Canada could probably contribute more gas to the American market, but the future of its imports into this country depends on the development of its reserves and the export policies of its government. The Canadian government recently authorized additional exports of natural gas to the United States. The authorization was limited, however, to exports that would otherwise represent excess Canadian capacity. Also, in approving these shipments, the government was sensitive to issues regarding prices, not wanting direct or indirect FPC regulation of Canadian field prices, and was careful to hold back reserves needed for that country's growing energy markets. There are large gas reserves in Alaska. This gas will be expensive to bring to market, however, and it will be some time before transmission facilities are built. Some imports of liquefied natural gas from overseas have been made to the East Coast to help meet seasonal peak demand there, and more hulls equipped to carry this superchilled liquid are eXpected to be in operation by 1~72 or 1973. But these new ships will still provide only a small pa;t of the natural gas needed in this Country in the next five ye~rs. Moreover, availability of thIS gas will depend on the export Policies of producing countries. . If natural gas prices are Increased enough, gas manufactured from coal, oil shale, and petroleum could help supplement supplies of domestic natural gas. Several processes are tech- between now and 1973, the ratio nically feasible. But here again, it probably cannot be held much could be many years before above 11. significant production will be Higher prices could be vital in available. As American natural gas reserves stimulating the investment needed to seek out and develop new are used up, supplementary reserves. And in the long run, sources of gas will become increasingly important. But even with the higher prices could also serve as incentives to the importation of development of supplementary more natural gas and the manufacsources, domestic producers will ture of synthetic gases. As these still have to meet most of the alternative sources became more nation's needs for natural gas in important in meeting the nation's the foreseeable future. growing need for energy sources, With the reserve-to-production ratio dropping relentlessly toward they would also tend to restrain further increases in prices of the critical level of 10, greater domestic natural gas. efforts must be made in exploration. According to an FPC staff publication, even with substantial improvements in exploration -Stephen L. Gardner New par bank - The Jackson Parish Bank, Jonesboro, Louisiana, an insured nonmember bank located in the territory served by the Head Office of the Federal Reserve Bank of Dallas, was added to the Par List on December 14, 1970. The officers are: Wilbur C. McDonald, Sr., President; William R. McDonald, Executive Vice President; Elmer Stevenson, Vice President; Wilbur C. McDonald, Jr., Vice PreSident; Mrs. Elizabeth R. Alberti, Cashier; and Mrs. Tommy Lou Barr, Assistant Cashier. Bu' SlOess Review I January 1971 5 Bank Credit Cards- The Boom Spreads To the Southwest Banks in recent years have participated increasingly in the boom in credit cards. For example, the number of commercial banks issuing credit cards more than tripled between the end of 1967 and the end of 1969. Moreover, during that time, the amount of credit outstanding under banle creditcard plans also more than tripled. Credit granted through bank cards expanded faster, in fact, than any other major category of Consumer instalment credit at banks shifts to credit cards GROWTH RATE (PERCENT) -60---------------------- -40----------------4------ -20--~------------~----- CHECK CREDIT - ALLOTHER ~ -O~I-----rl----~I-----rlJUNE DEC. JUNE DEC. 1968 1968 1969 SOURCE: Federal Deposit Insurance Corporation 6 1969 consumer instalment credit at banks. Credit outstanding under bank cards accounted for only 2.4 percent of total consumer instalment credit at banks in late 1967, but by late 1969 it accounted for 6.5 percent. While card credit still represents only a small part of the total funds banks supply to consumers, it is evident that the relative importance of such credit at banks has increased sharply. The rapid involvement of banks in the credit-card business resulted largely from the development of two national, and even international, credit-card plansBankAmericard and Master Charge. Cards from both plans are now accepted in all 50 states and in many foreign countries. Growth of bank cards The dramatic growth of these two large credit-card plans suggests that the advantages they offer banles, businessmen, and consumers far outweigh the disadvantages. For issuing banks, the large nationwide plans represent a potentially profitable enterprise. For consumers, they offer the convenience of shopping at stores all over the country with only one or two credit cards. For businessmen, they offer the additional sales that result from being able to give credit without the trouble and cost of setting up credit programs for individual customers. Such plans are not without their problems, however. Lack of experience in managing credit-card plans and unexpectedly high starting costs plagued many banks undertaking earlier plans. Early in the boom, for example, many banks mailed out cards somewhat indiscriminately. Many cards were stolen, and many were received by people that would not ordinarily have been considered good credit risks. But while improved management techniques and computerized record systems have resolved many of the collection problems of these earlier plans, there will always be some thefts and delinquencies. Moreover, since credit is granted automatically under credit-card Member banks account for most of the nation's rise in card credit outstanding ... MILLION DOLLARS -3000 [ ] MEMBER IIIII1 NONMEMBER ............. .............. ............. ............. ............. .............. .............. ............. .............. ............. .............. ............. .............. ............. .............. ............. .............. ............. .............. ............. .............. ............. .............. ............. .............. ............. .............. ............. .............. ............. .............. ............ . .............. ............. .............. ............. .............. ............. .............. ............. .............. ............. .............. ............. ............. ............. ............. ............. ............. .............. ............. ............. .............. ............. .............. ............ . .............. .............. ........... ............. . ........... ............ . ............... ........... . ............... ........... . ............. ............. . ........... ............ .............. ........... ..... • t ••••••••••• -2000 -1000 ............. .............. ............. .............. ............. .............. ............. .............. ............. ............... .............. ............ ............. .............. ............. .............. ............. .............. ............. ............. ............. ............. ............. ............. ~.:::::::::: -0 DEC. DEC. 1967 1'969 SOURCE: Federal Reserve Bulletin plans, without the review of a loan offi?er, banks could be placed in ~ tIght position relative to their unds available for loans. The magnitude of this problem is tempered, however, by the limits that are usually imposed on the amount an individual cardholder can borrow under these plans. Also, since heavy consumer ~?mand for credit tends to be Ighly seasonal banks can ordi narily take 'steps to prepare for Such increases in the use of credit cards. Most of the banks that initiated credit-card plans between the end of 1967 and the end of 1969 ere members of the Federal 1 eserve System. By December ~69, the number of member banks WIth card plans had reached 773 or nearly twice the number of ' nonmember banks with such plans. i . . • and the same trend ~as developed In the Eleventh District Consequently, member banks also accounted for most of the increase in credit outstanding under card plans over this two-year period. As might be expected, however, the growth of these two credit-card plans was not uniform throughout the country. BankAmericard originated with Bank of America in California. With the extensive branching operations of that bank, it quickly distributed BankAmericards over the entire state. It is not surprising, therefore, that the Twelfth Federal Reserve District, which includes California, accounted for close to half the credit outstanding under bank plans at the end of 1967. But with the rapid spread of BankAmericard to other states and the emergence of Master Charge, by the end of 1969 credit outstanding under bank plans in the Twelfth (San Francisco) District had fallen to little more than a fourth of the nation's total . Implicitly, these figures indicate the more rapid expansion of these plans in other parts of the country. MILLION DOLLARS -90 1I:~:::BER -60 - ............. ............. ............. ............. ............. ............. ............. ............. ............. .............. ............. , ........... ............. ............. ............. ............. ............. ............. ............. ............. ............. ............. ............. ............. ............. ............. ............. ............. ............. ............. ............. ............. ~ -0 DEC. 1967 DEC. 1969 SOURCE: Federal Deposit Insurance Corporation - !lUs' Uless Review I January 1971 Expansion in the Southwest One of the areas sharing in the rapid growth of bank credit-card programs after 1967 is that encompassed by the Eleventh Federal Reserve District. Although the number of- banks offering card plans in the Eleventh District increased slightly less rapidly than the national average between the end of 1967 and the end of 1969, the amount of credit outstanding under these plans expanded faster in the District than in the nation as a whole during this period. Where only seven banks in the District offered credit-card plans in September 1967, there were 37 in December 1969 and many more were offering this service as associate or participating banks. While this change represented more than a fivefold increase, the expansion in the credit outstanding under such plans was even greater. Between the end of 1967 and the end of 1969, the amount of credit outstanding under bank creditcard plans in the District increased more than six times. In concert with national developments, most of the increase in the number of banks undertaking such plans in the District, as well as most of the dollar increase in credit outstanding under these plans, involved banks that are members of the Federal Reserve System. In fact, from the end of 1967 through the end of 1969, only one additional nonmember bank undertook a credit-card plan, bringing the number of nonmember banks with such plans to ten. By contrast, the number of member banks with credit-card plans more than doubled over this period, reaching a total of 27 by December 1969. As might be expected, the increase in card credit outstanding at member banks far surpassed that of nonmember banks during that time. Geographically, the development of bank credit cards in the District has also been fairly concentrated, although it is becoming less so. In December 1967, more than 80 percent of card credit outstanding in the District was centered in Dallas County, where the first bank-card plans in the Southwest had started. By the end of 1969, however, this county's share had fallen to less than half the District total. Other major areas of concentration in late 1969 included Harris County with almost 20 percent, Bexar County with 7 percent, and Jefferson and Tarrant counties, both with 5 percent. By then, at least one bank in every major city in the District offered either BankAmericard or Master Charge. With the increasing popularity of credit-card plans, many banks have become interested in learning more about the problems and 7 potential profits of issuing credit cards. Consequently, a Dallas bank began in 1968 to offer training in all levels of credit-card banking. As the only school in bank-card management, it attracts bankers from throughout the country and from other countries. Outlook for bank cards The tremendous growth in both the number of banks offering credit-card plans and the volume of credit extended seems to indicate that more banks can be expected to align themselves with some credit-card system not only to maintain their positions as fullservice institutions but also to take advantage of the potential profits of credit-card operations. But with more than half the nation's commercial banks already associated with one of the nationwide card systems, growth in the number of banks offering credit cards is bound to taper off. On the other hand, more and more consumers are becoming aware of the ease of credit-card purchases, finding credit cards a convenient means of making small purchases and consolidating bills. And with nearly 60 million credit cards already in the hands of consumers, the volume of credit extended seems certain to increase rapidly. Moreover, all types of retail and service establishments seem to be potential users of credit-card 8 Federal Reserve district shares of total bank-card credit tend to even out PERCENT -100 SAN FRANCISCO (12th) -80 SAN FRANCISCO (12th) -60 -40 -20 -0 DEC. 1967 DEC. 1969 SOURCE: Federal Reserve Bulletin plans, especially small to mediumsize establishments that have not yet associated themselves with the large systems. Many small businesses have found that bank credit cards not only are cheaper and more convenient than their own credit programs but also allow them to compete more effectively with large department stores that extend their own credit. In a society heavily oriented toward consumer spending, credit cards are almost certain to become even more important. Continued increase in their use may well be a further step in the direction of a cashless-checkless society. -Carla M. Warberg Ernest R. Moser Research Department Federal Reserve Bank of Dallas Station K, Dallas, Texas 75222 Federal Reserve Bank of Dallas January 1971 Statisti~al Supplement to the Business Review - C~ude oil production in Eleventh DIstrict states continued at a high level in November, with outPb ut up only slightly from October ut up 11.5 percent from November 1969. Louisiana and Texas accpounted for all of the in~rease. roduction slipped slightly in New Mexico and Oklahoma. With fears of an energy crisis abating, petroleum output in the cOIning months may be less than tBhe high level reached in November. ut production is still apt to be Well above year-earlier levels. In Texas, the allowable was reduced slightly for January-to 83.1 percent of maximum efficient production, compared with 83.5 Percent in December. In Louisiana and Oklahoma, allowables were held at the rates set for December75 percent and 150 percent, M:sP~ctivelY. In southeastern New 7 eXICO, the rate was raised from o percent in December to 80 Percent in January. Registrations of new passenger wtomobiles in Dallas, Fort Worth, Ouston, and San Antonio were ~5 Percent lower in November than ~nh October and 26 percent lower . an in November 1969. Cumulatl\1e registrations for the first months of 1970 were 11 percent oWer than in the same period a Yea,r earlier. Nationally, new car regIstrations for the first 11 months Were 16 percent lower than a Year earlier. i1 Department store sales in the District were 4 percent higher in the four weeks ended December 26 than in the corresponding period a rear before. Cumulative sales h~rough that date were 3 percent Igher than a year before. . The seasonally adjusted Texas industrial production index changed little in November. Utilities were unchanged from October. Reflecting a leveling off in crude oil output, mining rose only 0.1 percent. Production of both durable goods and nondurable goods declined, lowering total manufacturing output 0.8 percent. Apparel and paper products were weakest of the nondurable industries. The largest decline in the production of durable goods was registered in electrical machinery. The total index was up only 2.4 percent over November 1969. Large increases in mining and utilities output were largely offset by a substantial decline in the production of manufactured goods. Total nonagricultural wage and salary employment in the five southwestern states was slightly stronger in November, rising 0.3 percent from October. Employment in manufacturing remained weak, declining 0.6 percent, but jobs in nonmanufacturing increased, rising a brisk 0.5 percent. The rise in nonmanufacturing employment was led by a seasonal increase in trade and a contraseasonal rise in construction. Finance was the only nonmanufacturing category of employment to post a decline. In spite of the improvement over October, total employment was only 0.9 percent higher than in November 1969. There was a yearto-year decline of 5.9 percent in manufacturing, and nonmanufacturing employment rose only 2.4 percent. Mining and construction were the only nonmanufacturing categories to show declines from a year before. Credit at weekly reporting commercial banks in the Eleventh District rose considerably more than usual in the four weeks ended December 23, largely reflecting heavy borrowing by businesses. This increase in credit at banks was accommodated mainly through sizable inflows of demand deposits, although there was also a contraseasonal rise in time and savings deposits. Total loans, adjusted for a small decline in loans sold outright to bank affiliates, advanced substantially during this period. And while business loans accounted for the bulk of the increase, most other major loan categories showed noticeable strength. The only exceptions were consumer and security loans. Moreover, the increase in business loans around the December tax and dividend dates was no more than usual, suggesting that the sharp increase in business loans over the entire period may reflect some shift of general business demand for funds to banks-probably in response to recent cuts in prime lending rates. With the increase in loan demand, banks added only moderately to their holdings of securities. While the increase in bank holdings of U.S. Government securities was slightly larger than in corresponding periods of other recent years, the rise in holdings of other securities was less than usual. Total bank deposits expanded markedly after November, principally reflecting the sizable inflow of demand deposits. However, there was also a contraseasonal rise in time and savings (Continued on back page) CONDITION STATISTICS OF WEEKLY REPORTING COMMERCIAL BANKS Eleventh Federal Reserve District (Thousand dollars) Nov. 25, 1970 Dec. 24, 1969 Fe deral funds sold and securities purcha se d under agree ments to resell ••••. ...••.. • ••••• Othe r loans and discounts, gross . • • • ...•.••. • ••• 623,362 6,6BO,336 714,950 6,320,092 296,OB5 6,160,670 3,202,424 3,003,940 3,078,674 108,809 104,910 110,591 507 56,986 507 44,937 555 48,334 1,270 420,441 971 440,303 950 392,026 Comm ercial and industrial loans •...•...•••. •• Agricultural loans, excluding CCC ce rtiAcate s of interest •.• .•••..•• •• • •• •• .• Loans to brokers and d ea lers for purcha sing or carrying : U.S. Government securities ••. " ••. • ••••••• Other securities .•...... • .•.•.••••••• ••• • Other loans for purcha sing o r carrying: U.S. Governm ent securities •.•.• . ..• • ....•• Othe r securities ••••.• ......•... •. .••••• • Loans to nonbank flnancial institutions: Sales flnance, personal flnance, factors, and other business credit companies ••••••• 291,977 400,149 663,877 16,485 8,338 740,054 243,840 384,423 646,656 4,719 9,136 736,482 144,631 358,914 657,744 11,860 7,969 728,264 0 769,019 2,886,842 0 699,268 2,804,791 0 620,158 2,590,139 Total U.S. Government securities ••••.••• . ••• • • Treasury bills ..••• • • • ••••••••• •• • ••••••• Treasury certiflcates of indebtedness •..•••. • Treasury notes and U.S. Government bonds maturing: 1,004,334 125,372 0 967,903 107,665 0 Within 1 year •••••••..••. • .••••• • •• •• 1 year to 5 years •• .••• ••• •• •• ••• • ••• • After 5 years .......... . .. .. ......... . 220,336 529,976 128,650 189,804 573,294 97,140 42,069 1,609,298 83,950 10 1,571 1,152,191 957,386 85,111 470,361 9,323 57,624 66,933 1,3 17,755 828,679 82,859 502,204 8,874 466,477 459,533 12,973,738 --- 6,095,782 3,426 27, 121 97,988 4,452,729 2,677 24,317 87,140 4,397,920 2,770 26,571 87,338 3,34 1,668 943,090 2,504,167 913,850 26,755 46,482 935,726 2,500,841 847,000 39,023 56,945 947,070 1,716,740 647,970 2,587 18,441 17,285 1,100 17,285 1,100 7,500 1,360 1,353,620 84,775 380,179 128,822 16,750 1,029,318 1,054,760 95,159 359,941 128,846 16,989 1,026,065 995,921 258,506 456,025 11 7,527 10,721 97 1,552 12,973,738 9,437,450 4, 196,095 248,294 259,859 1,274,855 460,437 TOTAL ASSETS ......................... 13,698,751 5,B94,05B 4,007,364 346,930 101,329 1,324,301 - - -- Total d ema nd d e posi ts •••. •••.....•...•.... Individuals, partn ershi ps, and corp orations •••• Stotes and political subdivisions ••....••...• U.S. Governm ent .•..••••..•.....••.•..•. Bonks in the Unite d States •••...••... .•.. . . Foreign: Governm e nts, offlcial institutions, central banks, and international institutions •••••• Commercial banks ••....•••..•••..••...•• CertiR e d and offlcers' che cks, etc .. ••• . ..... Total time and savings d eposits ••... .• ••...•. Individuals, partne rship s, and corporations: Savings d e posits . • •.. . .. •... •• •...•• .. Other tim e d e posits • •. •... .••... ••...•• States and political subdivision s ..•....••... U.S. Government (including postal saving s) •• • Banks in th e Unite d States ••••..••...•.•.. . Fore ign : Governments, offlcial institutions, ce ntral banks, and international institutions •••• • Comm e rcial banks .•. .•• . • .• ••. .••••••. Fed.e ral funds purchase d and securities sold under agr~em e nts to repurchase ••.... . .••..• Other liabilities for borrow e d money ••..••..••.• Othe r liabilities •. ••...•. .......••.. ••••• .... Reserves on loans •.••••..•• . . . ••• .. •• .. ••••• Reserves on securities ••••....••..•••. ••••. •.. Total capita l accounts •..••..••.....•..••..••• 9,062 1,527,039 109,783 133,855 1,3 13,401 1,1 15,883 90,530 513,584 8,336 10,29 1,978 6,252,558 4,240,778 236,484 253,4 11 1,393,350 Dec. 23, 1970 LIABILITIES 139,668 619,438 128,992 38,957 1,599,913 Dec. 24, 1969 TOTAL LIABILITIES, RESERVES, AND CAPITAL ACCOUNTS ... ............... 13,698,751 Dec. 23, 1970 Nov. 25, 1970 Total d e paslts .............................. 10,705,287 ASSETS Other ...•••••••••.•••...•.....•...••.• Real estate loans ..••• • • •••••••.•• . •••• . .•• Loans to dom estic commercia l banks ••••••••••• Loans to foreign banks ••••......•.•••• • • ..• Consumer instalment loans •••••...• • ..••• . •.• Loans to foreign governments, offlcial institutions, central banks, and international "institutions • ••••.•.•••••••.••.• ••• . . .•••• Othe r loans • •••....•.......•••• • •..•• • ••• Total investments •••.•....•....••..•.•••.••.• Obligations of states and politica l subdivisions: Tax warrants and short-term notes and bills • • All other .. . . .. .... ... .............. . .. . Other bonds, corporate stocks, and securities: Certificates representing participations in Federal agency loans ••••••• . •.• . •.. • .• All other (including corr.0rate stocks) ••..••.. Cash items in process of col ection • • ••••.••••••• Reserves with Federal Reserve Bank • •• • • •.•• • ••• Currency and coin ••••••••••••••.•.•••..•• •• • Balances with banks In the United States •.•••• •• • Balances with banks in foreign countries . ••••••••• Other a ssets (including investments in subsidiaries ----- 929,48 1 41,383 0 ---- ---12,247,702 CONDITION STATISTICS OF ALL MEMBER BANKS Eleventh Federal Reserve District (Million dollars) Nov:25, 1970 Oct. 28, 1970 Nov. 26, 1969 Loans and discounts, gross • • • ••.•••••••••• U.S. Government obligations •••..•• . ..• • •• Other securities ••••.•••.. • .... ••• .• •• .• Reserv es with Federal Reserve Bank • • • •••• • Cash in vault •• .•••.••••.•••• ••••••• •.. Ba lances with banks in the United States •••. Balances with banks in for ei gn countrles e .... Cash items in process of collection •• ••••••• Other assets e ••••••••• • • • ••.•• • • • • ••• •• 12,528 2,186 3,648 1,499 257 1,342 11 1,341 940 12, 191 2,116 3,612 1,357 273 1,323 10 1,243 934 11,450 2,107 3,178 1,246 245 1,284 9 1,323 852 TOTAL ASSETse . ..... ... .. .. ...... .. 23,752 23,059 21,694 Demand deposi ts of banks • • •..••••• • •..• Other demand d e posits • •••.••••••••••••• Time deposits • • .• •• ••••.••••••••••••••• 1,720 9,162 8,730 1,676 8,994 8,408 1,525 9,004 7,220 Tatal deposits ............... ... ... .. not consolidated) ... . .. . . . ....... . ........ . 19,612 1,189 1,120 1,831 19,078 1,046 1,102 1,833 17,749 1,146 1,071 1,728 Item - --12,247,702 RESERVE POSITIONS OF MEMBER BANKS ASSETS LIABI LITIES AND CAPITAL ACCOUNTS Eleventh Federal Reserve District (Averages of dal ly figures. Thousand dollars) Item 4 weeks e nded Dec. 2, 1970 4 we eks ended Nav. 4, 1970 4 weeks en d e d Dec. 3, 1969 RESERVE CITY BANKS Total reserves held .••• •••• ••.• With Federal Reserve Bank •••• Currency and coin .• ••• .••••• Required reserves ••• • ••• •• • • .• Excess reserves ••••..•••••..•• Borrowings ••• • •••••• • ••••• . •• Free reserves ••••• • •••.•. .• ••• 775,369 720,348 55,021 785,916 - 10,547 0 -10,547 765,71 1 710,627 55,084 773,047 -7,336 1,275 -8,611 731,700 679,167 52,533 735,397 -3,697 48,627 -52,324 803,230 616,275 186,955 789,156 14,074 912 13,162 794,847 605,499 189,348 772,111 22,736 2,315 20,421 777,540 598,067 179,473 756,752 20,788 11,168 9,620 1,578,599 1,336,623 241,976 1,575,072 3,527 912 2,615 1,560,558 1,316,126 244,432 1,545,158 15,400 3,590 11,810 1,509,240 1,277,234 232,006 1,492,149 17,09 1 59,795 -42,704 COUNTRY 8ANKS Total reserves held .••.•..•...• With Federal Rese rve Bank •••• Currency and coin .••..••••.. Required reserves •••••••...••• Excess reserves • • •• • • •••....•• Borrowings •• • ••.•••..•••.••.. Free re serves • • • • • . ••..• •.• • .• ALL MEMBER 8ANKS Total reserves he ld ••........•• With Federal Reserv e Bank •••• Currency and coin .••. • •.••.• Required reserves ••.•.....•••• Excess reserves • •• • ..••••..•.. Borrowings ••••••• . •••. . •• . .•• Free reserves •... •.• •••••••••• Borrowings • . ••••••• • ...•••.•..• • •••••. Other lia bilitiese • •••..• • •.•• • ..•••...•• Total capita l accounts e •• • ..• • •..••.••••• TOTAL LIAB ILITIES AND CAPITAL ACCOUNTSe .•••••.. • •••. . .••••••• e- Estimated. CONDITION OF THE FEDERAL RESERVE BANK OF DALLAS (Thousand do ll ars) Item Tota l gold ce rtiAcate reserves ••• • •. ......••• Discounts for me mber banks ....• • •.•••• • •.. Other di scounts and advances •••...• •••• •.• U.S. Governm ent securities •.• . .••.......•.• Total earning assets ••••..••.•.•...••.....• Member bank reserve deposits • .••....•.. ••• Federal Reserve notes in actual circulation • .• •. Dec. 23, 1970 Nov. 25, 687,979 o 628,238 50 499,25 1 24,450 2,79 1,830 2,791,830 1,668,608 1,945,227 2,650,378 2,650,428 1,498,680 1,881,012 2,423,807 2,448,257 1,373,310 1,745,492 o 1970 o Dec. 24, 1969 o BANK DEBITS, END-OF-MONTH DEPOSITS, AND DEPOSIT TURNOVER - (Do ll a r amo unts In thousa nds , seaso n ally adjusted) DEBITS TO DEMAND DEPOSIT ACCOUNTS' DEMAN 0 DEPOSITS' Pe rce nt change November 1970 St an dard metro p olitan (Annua l. rote statistica l a rea basis) AR IZO NA, Tucson L OUISIANA, Monr~·e·:.'.': : : : : : : :::: : ::::: :: : : : :.': : ::: NEW Shreve port •• .. • •..••• ••••• ..• • •• • ••• •••• lEXA MEXICO, Roswe ll ' ••.• ••.. •• • .. .• • • . • •. . . .• •• .. S, Abilene ~:~i~I.I~:·:·::::·: ::::· ::: ::':::::::::: ::':::'::::: B ~::~~m-~~rt ~rthur-O ra nge: . .•..••...•••• •• • C e a rhng en-San Benito .. .... .. .. .. . . . . C~~~~~n~~ri$ti •• •••..• • •..••.•. • ••.. .. ••.••• . . ~f:~~;t) ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ HQ veston - TeXes City ... ... ... ....•.••........ ~b}~~~:~:': ::::;:::::::: :::::::::::::::::::: Midland harr- Ed lnb urg ..... . . . .. .. ....... . .. . . a ....... . ... ..... .... .. . . .. .. . .. . ... . l~~:~~~~~tL ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ T~ia rka na (Texa s-Arkansas) •••• .••• . • •••..••• • • W· r ... .. ........ . . ...... ... . .. . ... .. . . ... . w~hft~· F~il; : :: :::: ::: :: ::::::: :::: ::::::::: Tota l_2 8 cent." ........ . ... ... ...... .... .......... _ 7,455,780 2,639,988 B,305,368 822,432 2,065,872 6,026,952 8,924,184 6, 17B,524 2,264, 172 6,758,B92 431 ,604 120,911,340 7,404, 120 23,6 19,864 2,716,476 103,43 1,960 946,308 4,539,984 1,746,228 1,950,084 1,550,916 1,2B5,104 19,356,096 1,105,440 1,360,236 2,3 19,180 3,136,032 2,193,204 November 1970 from O ctober 1970 Novemb e r 1969 Annual rate of turnover 11 months, 1970 from 1969 21% 8 15 5 5 10 42% 14 6 3% 1 -3 - 10 o -4 1 10 17 3 10 25 51 13 12 - 1 2 15 3 3 -3 22 -2 17 12 19 21 28 21 10 4 -5 3 3 - 1 9 -3 -7 9 2 4 7 13 8 -2 9 21 12 2 15 21 4 3 11 -2 -3 8 - 11 -7 4 10 o 16% 0% $35 1,446,340 o 1 14 12 7 10 10 10 11 11 12 4 6 10% Nove mb e r 30, 1970 Novemb er 1970 228,772 B5,OBI 26 1,387 3B,699 105,310 16 1,532 309,424 237,742 79,383 294,1 97 3 1,436 2,244, t 28 240,653 652,482 107,396 2,563,198 43, 182 176,992 103,04 1 134,049 88, 104 6B,209 644,955 67,047 74,1 50 100,205 120,310 11 6,B4 1 O ctob er 1970 November 1969 32.2% 31.0 32.B 21. 1 19.8 37.7 29.9 25.9 28.6 23 .3 14.3 55.2 30.6 36.7 24.9 40.8 22.5 26.0 17.2 14.7 18.2 19.2 30.4 17.0 18.B 23.B 26.6 lB.9 23.3% 27.6 32.5 22.3 19.2 32 .2 30.5 23.9 25.2 21.9 13.2 5 1.3 26.4 33.0 23.4 35.6 19.8 22.0 15.8 13.4 23.2 17.2 27.4 15.B 19.3 21.8 22 .7 1 B.6 38.1% $9,377,905 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.B 22.8 26 .3 16.2 15.3 18.9 17.8 29.6 15.4 19.4 24.B 25.1 2 1.3 38.6% 34.6% ~ g epo s lts o f Indi vidua ls partnersh ips and corpo rati ons a nd of states a nd polltloal su bdivisions. Ounty b asis. ' , VALUE OF CO NSTRUCTION CONTRACTS (Million d oll a rs) January- November ..... Ar. a and type VALU ATIO N (Dollar a mounts in thousan ds) Nov. 1970 fro m NU MBE R Nov. 1970 ARIZO NA Tucson• . LOUiSIANA····· • Monroe. West ShMon roe .... . T EXA~veport •• . • Ab ilene All\a rlll~ " ' " • . • ••• • Ausl' 8ea~~~n't' •• • • ~rown svill ~ '" • O~;rus Chrisii. : Denh~~"" .'".. EI P .... FortO~ •• • •• .• Ga lves;::-th • . .• Ho u' l n..... la redon . . . . . . LUbb o~k ' . ••.• Mi dla nd ····· • Od essa · · · ·· . Port A· .. • .. • San / thur • •. . Son /9.10 ••. Sh otonic .. Te:~mk n W r ana • ... ... aeo. Wichita' F~il;: : TotOI_26 it. ~I es 11 mos. 1970 It mos. 1970 Nov. 1970 O ct. 1970 Nov. 1969 FIVE SO UTHWESTERN STATES ' . ..... ... .. ... · . Residential building . . .. .. . Percent cha nge ~a O ctober 1970 September 1970 1970 1970 1969 553 227 199 128 5, 145 1,947 1,70 1 1,497 597 270 20 1 127 5,453 2,302 1,863 1,289 55B 269 183 107 5,398 2, 176 1,944 1,27B 7,175 2,790 2,3Bl 2,004 62,278 22,45 1 22,556 17,27 1 6,277r 2,589r 2,OB4r 1,603 62,220r 23,5 18r 23,480r 15,222r Novem ber BUILDING PERMITS 11 months, 1970 from 1969 Nonresid ential building . . .. Nonbuilding construction . . . UN ITED STATES .... .... .... Resid.ntia l buil ding • • • .... N onres identia l building . ... Nonbuilding construction .. . Arizo n a, Lo uisia n a, New Mex ic o , O kla hom a, a n d Texas. r - Revised. NOTE. - De tails m ay no t add to totals beoa use o f ro undi ng. SOURCE: F. W. Dodge , McG raw-Hili , In o. 1 37% -7% -5% 6,235 $ 5,673 67 536 775 5,184 805 2,964 13,506 29,666 - 16 34 -14 - 11 12 -2 1 42 126 395 139 70 1,234 1,49 1 32 440 299 62 2,468 34 13 1 51 50 83 29 1,18 1 63 24 174 59 443 3,637 4,476 1,625 801 4,8B5 19,987 418 5,024 4,2 t 2 73 1 3 1,37 1 508 2,207 570 7B5 849 584 14, 136 75 1 32 1 2,2 11 769 341 98 1 8,133 644 145 3,7 10 25,397 256 3,860 4, 154 188 53,535 75 3,740 256 390 20B 130 8, 143 730 340 2,007 960 7,826 28,1 45 11 5,561 8,756 5,628 26,757 3 17,490 3,39B 86,830 78,5 16 6,395 43 5,532 6,164 48,955 4, 11 7 8,9 18 7,3 13 9,587 93,713 13,355 6, 164 32,53 1 11 ,804 -9 -3 -34 64 -79 -6 -25 149 -25 -33 -37 80 -77 26 38 -27 -1 -75 - 12 -55 95 23 25 53 -83 42 8 -62 343 89 133 -55 -3 1 55 83 -22 -44 -53 236 -32 -3 1 - 18 - 13 -27 18 8 26 5 12 - 64 B 53 56 -30 21 -9 59 21 -25 -4 91 -30 113,495 $ 127,765 $ 1,46 1,825 9,707 $ 55, 198 427 7% 4~ -80 25 132 -4 190 276 30% 4% GROSS DEMAND AND TIME DEPOSITS OF MEMBER BANKS Eleventh Federal Reserve Di strict (Ave rages of d all y fig u res. Mil li on do ll ars) GR O SS DEMAN D DEPOSITS Reserve TIME DEP OSITS Coun try Reserve Country Date Total cily banks ba nks Tolal city banks ba nks 1968 , November .. 1969 , Novemb e r .. 1970, June ...•.• July .. .. . .. 10,365 10,373 10,265 10,412 10,530 10,658 10,684 10,843 4,776 4,750 4,74B 4,782 4,8 16 4,885 4,860 4,899 5,589 5,623 5,5 17 5,630 5,7 14 5,773 5,824 5,944 7,498 7,268 7,39 1 7,511 7,783 8,088 8,3 17 8,622 3,1 45 2,690 2,65 1 2,722 2,926 3,1 62 3,305 3,476 4,353 4,578 4,740 4,789 4,857 4,926 5,012 5, 146 August .... September. Oclo b er •• • November .. DAILY AVERAGE PRODUCTION OF CRUDE OIL INDUSTRIAL PRODUCTION (Thousand barrels) (Seasonally adjusted Indexes, 1957-59 Area and typo of index Nove mber Area 1970 FOUR SOUTHW ESTERN STATES .. . . . . • •. .••• • ••• 7,285 .9 2,756.0 343.5 604 .4 3,582.0 728.6 1,720.8 228.8 80.0 823.8 10,062.0 7,242.3 2,7 14.2 345.9 606.2 3,576.0 711.4 1,730 .9 211.7 86.9 835.1 10,025.5 6,537.3 2,404.7 360.6 622 .1 3,149.9 622.4 1,517.7 158.1 80.4 771.3 9,321.2 louisiana . .. .... .. ...... New Mexico ... . . . . . .... . Oklahoma . • •... .•.•.. . • Texas . . . .. . .. .... . .. .. . Gulf Coast • . .. •.. . .... West Te xas ...... . ... . Ea st Texas (proper) . . . . . Panhandle .. . . .. . • .... Rest of state •• • • •• •. • • • UNITED STATES ••.•.. ... ... 1969r October 1970 1969 0.6% 1.5 - .7 - .3 .2 2.4 -.6 8.1 -8.0 -1.4 .4% 11.5% 14.6 -4 .8 -2 .9 13.7 17.1 13.4 44.7 - .5 6.8 7.9% Five Southwestern States1 Percent change Number of persons ----------~------ Nonmanufacturing • •• .• . •• Mining .••••• •• •• •.•. • Construction •. •... • ...• Transportation an d public utilities . . . .. ... Trade •.• .....• .. ..... Finance • • • •• •. •••. •• • • Service . . . . . . . .... .... Government •.. • • •• •• . • Nov. 1970 from 1970p October 1970 November 6,384,900 1,123,400 5,261,500 228,400 403,000 6,367,000 1,130,000 5,237,000 228 ,200 400,100 6,330,600 1,193,100 5,137,500 232,000 414,000 0.3% 0.9% - .6 -5.9 .5 2.4 .1 -1.6 .7 -2.7 469,400 1,505,700 324,100 1,035,700 1,295,200 469,300 1,492,400 325,100 1,030,800 1,291,100 458,000 1,460,400 314,300 996,600 1,262,200 .0 .9 -.3 .5 .3% 1969r Arizona, Louisiana, New Mexico, Oklahoma, and Texas. p - Preliminary. r - Revised. SOURCE: State employment agencies. 1 18Q.6 195.9 198.1 194.5 143 .1 267.1 181.4 197.5 200.7 195.3 143.0 267.1 180.1r 195.6r 205.3 189.2r 141.1 r 274.4r 176.3 201.2 224.8 185.4 127.0 247.4 161.4 158.5 151.5 167.3 140.1 241.0 162.4 159.5 153.5 167.1 139.9 241.5 165.8r 163.7r 160.4r 167.7r 138.9r 242.5r 171.4 171.8r 172.1r 171.5r 132.6r 226.0r 196 ~ Durable ••••. ••••..•••• •• •• • • Nondurable ••...••••••••..... Mining .• •... . . .•. . •. . . •••••. • Utilities..•.. ...• ... •. . •.• ... .. UNITED STATES Total industrial production • • • . .• Manufacturing • •• • ••• . • ... . .. . . Durable ••••..... ... ..... ...• Nondurable . • . . . . .... . . . . . . .. Mining • .• ... . . ..... ... .... . . . Utilities • .. .... . •. •••• • .••••.. . p - Preliminary. r - Revised. SOURCES: Board of Governors of the Federal Reserve System . Federal Reserve Bank of Dallas. NONAGRICULTURAL EMPLOYMENT Total nonagricultural wag e and sa la ry worke rs .. Manufacturing . .. .. .... . . TEXAS Total industrial production .. • •• • Manufacturing • .... .. .. . . ... ... November Septembe r 1970 November r - Revised . SOURCES: American Petroleum In stitute. U.S . Bure au of Mines. Federal Reserve Bank of Dalias . Type of e mployment October 1970 November 1970p November Percent change from October 1970 November = 100) Oct. 1970 Nov. 1969 2.5 3.1 3.1 3.9 2.6% deposits that resulted from inflows of such deposits other than large negotiable CD's. As is typical at that time of year, large CD's declined somewhat, probably as corporations turned in maturing instruments as one means of making part of their tax and dividend payments. Nevertheless, with total deposit inflows quite large, the banks further reduced their reliance on nondeposit sources of funds, cutting in half their borrowing in the commercial paper market and slightly reducing their borrowings in the Eurodollar market.