Full text of Review (Federal Reserve Bank of Dallas) : July 1, 1956

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MONGJ[HL~

~U8INE88
FEDERAL

REVIEW

RES E R V E

Vol. 41, No.7

BANK

o

F

DALLAS
July 1,1956

DALLAS, TEXAS

BUSINESS LOANS AT ELEVENTH DISTRICT MEMBER BANKS
F. LEVIN, Financial Economist
Federal Reserve Bank of Dallas

BERTRAM

~

The post-World War II decade has witnessed a growth in
the southwestern economy which confirmed the most optimistic expectations. The evidence is particularly striking in
the fteld of banking, in which deposits, loans, and capital
structures have expanded impressively, thus contributing to
and also reflecting the economic vitality of the period_ The
accompanying chart, which shows the uninterrupted growth
in commercial and industrial loans of Eleventh District member banks since 1946, illustrates the hand-in-hand growth of
bank lending and economic well-being in the area.
Broad developments in the southwestern economy and the
characteristics of the growth can be seen in the results of a
survey of business loans outstanding at member banks on
October 5, 1955. The survey in this District was part of a
nationwide project undertaken by the Federal Reserve banks
and the Board of Governors, with the cooperation of the American Bankers Association, the Reserve City Bankers Association, and the Robert Morris Associates. The previous such
survey covered loans outstanding as of November 20, 1946 a time when the southwestern economy was completing the
first step of its exciting postwar ascent.

COMMERCIAL AND INDUSTRIAL LOANS
ALL MEMBER BANKS -

ELEVENTH FEDERAL AESERVE DISTRICT

WILLI ONS Of' OOLLARS

,500

/2

2,00 0

./

1,50

1,000

V
0

2" ..

MILLIONS 0' DOL

2,500

V

~

.000

1. >00

On October 5, 1955, Eleventh District member banks had
an estimated 101,244 loan accounts recorded on their books,
excluding open market paper, of which 15,194 - or 15 percent - were included in the sample. The banks were asked
to include all loans to business, including real-estate loans
secured by mortgages and those ordinarily classed as commercial and industrial loans. The survey was designed to
get reports from all the larger banks and to choose randomly
a progressively declining sample of smaller banks.
The data yielded by this inquiry permit the construction
of District estimates which reveal the characteristics of borrowers and their interrelationship with the volume and type
of credit outstanding at the various size classes of member
banks_ However, the results of this survey -like those of all
surveys - must be stated in terms of probabilities, the reliability of which falls within limits determined by the statistical
procedures involved. The data revealed by the survey highlight many of the features of member bank lending to business.
The results of the 1955 survey indicate a shifting pattern
of business borrowing since the last such inquiry late in 1946,
when the first full postwar year was nearing its close_ The
effects of the growth of industry and trade in the Southwest
and the shifting pattern of consumer spending are inescapably reflected in the relevant banking statistics, as new firms
and expanding established businesses increased their use of
credit facilities. Many business firms discovered that, during
the prolonged period of growth and prosperity, retained earnings did not supply all of their requirements in financing the
expansion induced by the favorable economic climate. This
need for capital funds contributed, therefore, to the increased
volume of business borrowing at Eleventh District member
banks and, indeed, throughout the country.

1.000

The Borrowers

•

The expansion of business loans at District member banks
is indicated by the estimated $1,950,593,000 of commercial
0
0
1946
1947 1948
1949 1950 ISS)
19152
19153 19154
19"
and industrial loans outstanding on October 5, 1955, an
amount which is triple the total shown by the 1946 survey.
0,,11 top,," 0$'''.'01 thl tftdol41ltll'tor.
This rate compares favorably with the increase of 2V3 times
This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org)

MONTHLY BUSINESS REVIEW

98

BUSINESS LOANS OF MEMBER BANKS, 1955 AND 1946
BY BUSINESS OF BORROWER

Eleventh Federal Reserve District
(Estimates of outstanding loans)
Amount of loans

Un thousands of dollars)
Business of borrower

MANUFACTURING AND MINING .................. ...... ...
Food, liquor, and tobacco . ••..•.••..•.•.•.•..•........• . .

Textiles, apparel, and leather ........ • ....................
Metals and metal products . .....•• ••••• .•.... •• .... . .....
Petroleum, coal, chemicals, and rubber ... . ..... ........... ..

Other, . ..............................................
TRADE •• •••••• • • •••••••••••••••••••••••• .••.••. ••.••••••
Wholesale . • .•.•.•...• ••. •....•..•.....•...•..•... • .• •
Retail • ..••••••• • •••••••••••••••••••••.•••.•••••••••.•

OTHER ............................................ .....
Soles -Anante companies . . .•••.•••••••••••••.••.•••••.•.•
Transportation, communication, and other public utilities . ..•..••

Construction . ...••••.•.••.••..•.•.•..•............ . .•.•

Real estate l . ...... •..... .. .. .... ...........•..........
Service! . .............................................
Other nonflnancial • • ••••••••••••••.•••.•••••••••••••..••

UNCLASSIFIED •••••••••••••••••••••• • •••••• • •••••••••••••
ALL BUSINESSES .........................................

Percentage
distribution

1955

1946

1955

611,037
37,441
17,853
81,311
400,571
73,861
358,907
155,824
203,083
980,649
131,792
64,292
231,485
245,958
144,921
162,201
0
1,950,593

231,605
37,145
9,716
27,326
131,388
26,030
207,420
133,205
74,215
190,307
36,996
40,770
46,491

31.3
1.9
.9
4.2
20.5
3.8
18.4
8.0
10.4
50.3
6.8
3.3
11.9
12.6
7.4
8.3
.0
100.0

35,119
30,931
22,494
651 ,826

1946
35.5
5.7
1.4
4.2
20.2
4 .0
31.8
20.4
11.4
29.2
5.7
6.3
7.1
5.4
4.7
3.5
100.0

Number of loans

1955
18,471
1,787
858
3,477
8,604
3,745
32,970
7,600
25,370
49,803
2,336
2,118
10,881
7,411
19,639
7,418
0
101,244

Percentage
distribution

1946

1955

6,800
990
464
1,243
2,778

18.3
1.8
.9
3.4
8.5
3.7
32.6
7.5
25.1
49.1
2.3
2.1
107
7.3
19.4
7.3
.0
100.0

1,325

19,069
5,060
14,009
14,588
777
1,721
3,444
4,361
4,285
3,298
43,755

1946
15.6
2.3
1.1
2.8
6.4
3.0
43.6
11.6
32.0
33.3
1.8
3.9
7.9
9.9
9.8
7.5
100.0

1The se loans were included in "011 other" in 1946 and were not reported separately.

recorded for the entire Nation. In the 9·year interval between
surveys, growth permeated all categories, as every class of
business borrower increased its volume of bank indebtedness;
however, the extent to which bank loans increased was not
constant among classifications, the rate of growth depending
upon the nature and composition of the particular industry.
The number of business loans in the District in 1955 WQS about
2Ya times as large as in 1946, but the rate of growth varied
widely among the various types of business. The average size
of loan increased nearly one-third, and some gain was reflected
in most categories, the notable exception being manufacturers
of food, liquor, and tobacco.

average growth in bank indebtedness by food, liquor, and
tobacco manufacturers and textiles and related industries.
Loans to manufacturers of food, liquor, and tobacco were in
about the same volume in 1955 as in 1946, and the size of
the average loan was reduced about 40 percent. A similar
situation prevailed nationally and in some other Federal
Reserve districts.
The total value of retail loans reached an estimated $203,·
083,000, or 10.4 percent of the dollar value of commercial
loans, although this class had the largest number of individual
loan items - one·quarter of the total number. With respect
to both the number of loans and their value, retailers did not
match the average gain of all business borrowers - not
because retailers failed to expand their operations, but, rather,
because there was a heavier growth in credit uses by other borrowers. The amount of loans to retailers advanced about 2.7
times in the period - or substantially more than the national
average for all retailers. Since the number of loans showed
a much smaller increase, the average size of loans increased
substantially. Nevertheless, the average size of loans to
retailers in 1955 was next to the smallest among the several
types of businesses.

Manufacturing and mining firms accounted for about 31.3
percent of all business borrowing in 1955. Despite the industrial growth in the Eleventh District during the 9 years
between the surveys, borrowed funds originating from this
source declined in relative importance; in 1946, their bank
indebtedness was 35.5 percent of all business loans. The
petroleum, chemicals, and related industries category - rep·
resenting the lion's share of southwestern industrial activity
- maintained its relative importance in all business loans in
the Eleventh District during the period, being responsible for
20.5 percent of the total in the 1955 survey and 20.2 percent
-in 1946. The metals and metal products group, which ranked
second in importance in the volume of loans, also maintained
its relative growth, having 4.2 percent of total business loans
on each survey date. In both these categories, the number
of loans increased sharply during the 9-year period and
showed gains relative to the total number of manufacturing
and mining loans. These industries were also among those
showing dynamk growth during the period.

In wholesale trade (including commodity dealers), the
number and amount of loans increased moderately between
the two survey dates, but, as a percentage of the total, both
declined sharply. The relative decline ill the wbolesale function and the large operations of the Commodity Credit Corporation in financin g the movement and storage of agricultural commodities in 1955 were partly responsible for this
showing.

The decreased proportion of manufacturing and mmmg
loans in the Southwest arose principally from the slower than

District banks made $980,649,000 of loans to "other" borrowers - the catchall classification which includes such

MONTHLY BUSINESS REVIEW
diverse industrial groups as service firms and public utilities.
Increasing almost five times in dollar volume in the 9 years,
"other" loans rose in value from 29.2 percent to 50.3 per·
cent of the total, with loans to real-estate, construction, and
service firms and sales finance companies pacing the list.
Loans for construction and real-estate purposes, spurred
by the growth in construclion activity, advanced more in relative importance as sources of demand for bank credit than any
of the remaining borrowing categories. In 1946, construction
loans outstanding equaled $46,491,000, or 7.1 percent of the
total; but this amount increased almost fivefold by 1955 to
$231,485,000, which is about 12 percent of all business loans.
Bank loans for real-estate purposes expanded even more rap·
idly, inasmuch as in 194·6 these loans were included in the
residual category, aU components of which used only 4.7 percent of all business loans. The 1955 survey indicates, however,
that loans to business for real-estate purposes took 12.6 percent of aU commercial loans, the amount of indebtedness being
more than $245,000,000_ Real-estate and construction, by
their very nature, are industries requiring substantial amounts
of external financing.
In appraising the expansion in these loans, consideration
should be given to the fact that the postwar building boom
was in its initial phase in 1946, whereas in 1955, activity was
at an all-time peak. Hence, the high totals in 1955 reflected
both the need for interim financing to handle the large volume
• of work in process and the practice of many permanent lenders
on real-estate mortgages to make temporary arrangements
(known as "warehousing" arrangements) at banks, penrung
the receipt of funds to take the mortgage loans in their own
portfolios_ Subsequent information suggests that mortgage
loans under these arrangements probably were near their
peak at the time of the survey.

99

Sales finance companies, service firms, and "other nonfinancial" institutions - three other types of business borrowers - also increased their loans from member banks at a
greater rate than the average. In 1955, these businesses
accounted for 22.5 percent of total business loans, compared
with 15.8 percent in 1946. A significant feature was the sharp
increase in the number of loans to service firms, which consliluled 19.4 percent of the total number of business loans,
or about double the proportion in 1946_ In the postwar period,
these types of businesses have assumed increasing importance
in the economy; and the sharp increase in their borrowing is
closely associated with the rising standard of living, the heavy
purchase of durable goods and their maintenance, and the
increasing use of professional services.
Assets of Borrowers
The increase in the assets of business concerns during the
period between the surveys was clearly evident in the results
of the October 5, 1955, inquiry. Yet, the survey data indicate
that borrowers with total resources below $5,000,000 originated the preponderant majority of the number of loans about 97 percent - and almost 79 percent of the total
amount of business borrowing. In 1946, concerns with total
assets of less than $5,000,000 were responsible for about 99
percent of the number of loans and more than 85 percent
of the outstanding dollar amount_ Despite the almost continuous growth in income and wealth in the District, the
smaller firms continued to originate the largest number of
loans, but there was an obvious tendency for the median borrower to increase in size_
In the period separating the surveys, the most pronounced
shift in the distribution of loan accounts was away from the
smallest borrower (those with less than $50,000 of total
assets) to the next two higher categories, reflecting primarily

BUSINESS LOANS OF MEMBER BANKS, OCTOBER 5, 1955
BY BUSINESS AND SIZE OF BORROWER

Eleventh Federal Reserve District
(Estimates of outstanding loans. In thousands of dollars)
Size of borrower (Totol assets, in thousands of dollars)

100,000
Business of borrower

MANUFACTURING AND MINING __ .. ___ • _____ _• _.
,Food, liquor, and tobacco • .••.•••.•••••.•••.•••

Textiles; apparel, and leather .......... ......•..
Metals and metal products .. ........•.. .• ......
Petroleum, coal, chemicals, and rubber ••••.•.....•

Other .......... _.. _... _....................
TRADE .. __ ••.••••••••••••••••••••• _ •••••••••••
Wholesale . . ..•.. ... .... . •........... . . .. .. .
Retail ... .•••...•••••.••.••.•••••.••••••••• •

OTHER . .............. . ........ _.. _•.• _• _.....
Commodity dealers . • •••••••.•.•.•.•.•••••••••

Sales flnance companies ..... ..............••••

•

Transportation, communication, ond other public
utilities . .. .• • .••. ••.••.•..•• ..•......•••••
Construction • .••.•....•.•.••.••.•.••...•..••.
Real estate .•••• .••.•.. •..••.••.••.••• ••••.••
Services • .• ..•...•.••.•..•..••.••.••.•••••••
Other nonfinancial ...• •.••.••••..•..••.•••.•.•

ALL BUSINESSES ...... . ............... _ ••••• _...

and over

26,270
4,145

°

6,032
15,730
363
13,832
45
13,787
54.837
6,066
23,980
19,894
f)

60
3,802
1,035
94,939

Under

25,000100,000

5,00025,000

1,0005,000

2501,000

50-250

30,843
1,142
47
11,646
14,111
3,897
1,728
1,599
129
40,453
990
7,123

105,830
3,953
191
9,692
87,953
4,041
16,700
5,977
10,723
125.300
7,434
15,978

223,661
12,363
5,852
16,058
166,158
23,230
50,455
25,089
25,366
294,101
19,428
53,466

127,768
8,019
7,045
21,123
69,192
22,389
81,403
32,549
48,854
245,202
16,176
21,160

80,494
6,377
4,012
14,210
39,454
16,441
100,136
25,461
74,675
204,148
8,534
8,163

16,169
1,441
704
2,551
7,974
3,499
34,469
4,921
29,548
76,794
1,556
1,922

4,948
12,374
5,300
2,377
7,341
73,024

11,689
17,819
41,256
12,153
18,971
247,830

10,439
71,264
65,358
25,649
48,497
568,217

7,316
55,366
59,642
37,341
48,201
454,373

7,622
57,728
48.037
43,716
30,348
384,778

2,385
16.934
26,304
19,884
7,809
127,432

50

MONTHLY BUSINESS REVIEW

100

BUSINESS LOANS OF MEMBER BANKS,1955 AND 1946
BY SIZE OF BORROWER

Eleventh Federal Reserve District

(Percentage of total)

Number of loans
(Percentage of total)

1955

1955

Amount of loans

SIZ 8 of borrower
[Total assets, in

thousands of dollars)

1946

1946

Under 50 • ••••••• • •••• •• ••••
Not classlfled • • ••••• ••• ••••••

21.3
52.4
19.7
6.6
.0

14.8
45 .3
23.9
12.5
3.5

3.0
22.2
37.0
37.8
.0

1.3
9:7
23.9
57.6
7.5

All BORROWERS •• ••••• • • •

100.0

100.0

100.0

100.0

5,000 ond over •• •• .........•

250-5,000 ........... ......
50-250 ••.•....••• • ........

a shift in the number of firms included in the various size
categories. For instance, the number of firms with assets of
less than $50,000 showed relatively little growth between the
survey dates, while the number of firms with assets between
$50,000 and $5,000,000 expanded sharply. Hence, it would
be expected that the most pronounced growth in bank loans
would be to firms in those size categories where the greatest
growth in the number of firms had occurred. In fact, the percentage growth in bank loans to firms in the various size categories has followed the same general pattern as the growth
in the number of firms. Taken as a whole, however, in dollar
amounts, firms having assets below $250,000 decreased their
proportion of the total value of loans outstanding, while the
increase in the proportion of loans outstanding was shared
by firms in the $250,000-$5,000,000 category and the
$5,000,000-and-over category.
The largest volume of loans was obtained by firms having
gross assets between $1,000,000 and $5,000,000, with the
volume diminishing as the size of the firms increased or
decreased. However, total loans outstanding were divided
almost equally between firms having above and below $1,000,000 in gross assets. The average loan to firms having more
than $100,000,000 in assets was $159,293, and to firms whose
assets were below $50,000, average borrowings were $3,329.
Save in three instances, the largest dollar volume of indebted·
ness was generated by firms in one of two gross asset classifications - namely, between $250,000 and $1,000,000 and
between 81,000,000 and $5,000,000. One exception occurred
in the field of public utilities, wbere the largest firms originated the heaviest amount of borrowing. This characteristic
of such loans, both nationally and locally, reflects the nature
of the firms included in this grouping. Service firms and
retailers, which include a large number of relatively small
economic units, had the largest amount of borrowing recorded
by firms in the $50,000-$250,000 class.

BUSINESS LOANS OF MEMBER BANKS, 1955 AND 1946
BY SIZE OF BANK

Eleventh Federal Reserve District
Amount of loans

Size of bank
(Total deposits, in
millions of dollars)

(Percentage of total)

Number of loan5
(Percentag e of total)

1955

1955

1946

1946

100 and over •••••••••••••••
10-100 .•...•.••••••••• ••••
2-10 ..... .................
Under 2 • ••••••• •• • •••••••••

64.4
27.6
7.3
.7

62.7
27.9
7.8
1.6

23.7
48.5
22.6
5.2

24.4
43.5
25.6
6.5

TOTAL •• _••••••••••••••••

100.0

100.0

100.0

100.0

Nationwide, enterprises owning assets above $1,000,000
initiated almost two-thirds of the total loan volume, while in
the DisLrict, comparable firms originated only one.half of the
total loan volume. The rather pronounced difference between
the District and the Nation would tend to support the claim
that the smaller firms occupy a more prominent place as users
of bank credit in the District than in the more highly industrialized sections of the country, which weigh heavily in the
national total of business loans. The relative importance of
smaller firms in the District results partly from the wider
diffusion of population in the Southwest and partly from the
location of a smaller percentage of large industry in this part
of the country_

~

Bank Size
The distribution of the number and amount of business
loans by the various bank classes changed only slightly in
this District between 1946 and 1955. At the date of the earlier
survey, banks having more than $100,000,000 of deposits
extended 24..4 percent of the number of loans, while in 1955
the comparable figure was 23.7 percent. These same banks
originated 62.7 percent of the dollar volume of loans in 1946,
compared with 64.4 percent on October 5, 1955. Only the
smallest group of banks - those with deposits of less than
$2,000,000 - decreased their share of outstanding loans significantly. This decrease resulted principally from the fact
that many of the smaller banks outgrew the $2,000,000 deposit

~

BUSINESS LOANS OF MEMBER BANKS, OCTOBER 5,1955
BY BUSINESS OF BORROWER AND SIZE OF BANK

Eleventh Federal Reserve District
(Estimates of ouhtanding loons. Amounts in thousands of dollars)
Siu of bank {Total deposits, in millions of dollan}
Bus;ne» of borrower

250 and
over

100-250

10-100

MANUFACTURING AND MINING. 370,462
73,052 135,086
14,257
Food, liquor, and tobacco •• • • • •
11,613
6.407
Textiles, apparel, and leather .••
8.884
2.626
3,956
Metals and melal products •• • ••
45,097
14,593
16,905
Petroleum, cool, chemicals, gnd
rubber •••• • ••• •.• • • • •• ••• 272,216
41,750
79,493
Other •• • • ••. • ••• • ••••••••• •
30,008
7,676
23,119
TRADE .. ............ ... ... ...
81.195
33,818 130,459
15,054
Wholesole ••.•••..•••• ••• •••
28.327
"2,13"
52,868
Retail ••.•••..•••••••••••••.
18,764
88,325
OTHER • ••••• • ••••••.••••••••• 560,5"3 136,433 273,452
Commodity dealers •.•....••.•
36,308
2,147
16,508
Soles fina nce companies ••.••••
52,303
29,847
40,040
Transportation, communication,
and other public utilities • • •• •
44,971
4,038
13,389
17,356
58,68a
Construction •••••••. . •.•••• • • 137,305
Rea I estate ••••••.•.••••• •••• 165,186
17,673
55,480
Services •••• •• •• •• . ••• •• ••• •
58,370
13,419
55,164
Other nonflnanciol ••..• •• .••••
66,100
51,953
34,183
ALL BUSiNESSES . .............. 1,012,200 243,303 538,997

2-10

Under 2

29,815
4,204
2,270
4,099

2,622
959
116
618

6,472
12,770
45,803
8,968
36,835
66,295
",984
9,320

640
289
7,447
1,156
6,291
4,110
237
282

1,783
17,382
7,428
16,307
9,091
141 ,913

111
753
191
1,661
875
14,179

Percentage distribution within bonk size grotJP

MANUFACTURING AND MINING.
Food, liquor, and tobacco • • •• ••
Te;l!;tiles, apporel, and lealh.r...
Metals and metaJ products •••.•
Petroleum, coal, chemicals, and
rubber •••••• .. • •••••••• • •
Other •••••••••• • • •• ••• •• •••
TRADE •••••..••••.•••••••••••
Wholesale •• ..• •...•. . •.• . ••
Retail •••• ... .•• . •••...••.••
OTHER • .. •••• . •••• .••• ••• .• ••
Commodity dealers ••• • .• • •• • •
Soles Anance companies •••••••
Transportation, comm unication,
and other public utilities •••••
Construction •••••••••••• • ••••
Real estate •••••••••••••••• ••
Services • •••••• •••• • • ••••.••
Olher nonfinancia l ••••••••• •• •
All BUSiNESSES ..... . .........

36.6
1.4
.9
4.4

30.1
2.6
1.1
6.0

25.0
2.2
:7
3.1

21.1
3.0
1.6
2.9

18.5
6.8
.8

26.9
3.0
8.0
2.8
5.2
55.4
3.6
5.2

17.2
3.2
13.9
6.2
7.7
56.0
.9
12.3

14.7
4.3
24.2
7.8
16,4
50.8
3. 1
7.'

4.6
9.0
32.2
6.3
25.9
46.7
3.5
6.6

".5
2.0
52.5
8.1
44.4
29.0
1.7
2.0

4.4
13.6
16.3
5.8
6.5
100.0

1.6
7.1
7.3
5.5
21.3
100.0

2.5
10.9
10.3
10.2
6.4
100.0

1.3
12.2
5.2
11.5
6.4
100.0

.8
5.3
1.3
11.7
6.2
100.0

4.4

4

MONTHLY BUSINESS REVIEW
limit; there were only 165 banks in this category on Octobcr
5, 1955, compared with 208 in 1946. Within the whole array
of loans by bank size, the 9·year comparison is marked by
such little variation as to lend credence to the view that one
of the most significant characteristics of the period was an
almost universal participation by banks of various sizes in
the increase in the volume of loans to commercial and
industrial enterprises.
For each class of bank, one of three types of borrowerspetroleum and related industries, other nonfinancial firms,
and retailers - ranked first in the volume of borrowed funds.
At banks with deposits of $250,000,000 and over, petroleum
loans were predominant, accounting for about 27 percent
of their business loans, and comprised 68 percent of the
petroleum loans at all member banks in the District. However,
real·estate and construction firms, in that order, followed
petroleum as the principal sources of demand for credit. If
these two classifi cations are combined, they outrank petroleum
loa ns by a substantial margin, constituting about 30 percent
of business loans at the largest banks. Real·estate and con·
struction loans at the largest banks also represented 63 per·
cent of the real-estate and construction loans at all member
banks.
Other nonfinancial businesses were the most important
borrowers at banks with deposits between $100,000,000 and
250,000,000, but petroleum firms were a close second. For
institutions havin g deposits below $10,000,000, the survey
revealed that retailers occupied the front rank of borrowers.
Indeed, at the smallest banks, retail trade accounted for almost
45 percent of the loan volume. Moreover, the relative importance of retail loans increased steadily as the size of the bank
became smaller.
Short- and Intermediate-Term Loans

AJ)out three-fourths of the aggregate loan values outstanding on October 5, 1955, were to be repaid within a year;
nationally, two·thirds of the loans had short maturities. The
largest bank class granted nearly one· half the total amount
of loans, although in number, they represented only about
15 percent of the total. Intermediate-sized banks - those with
510,000,000 to 5100,000,000 in deposits - made nearly 50
percent of the number of loans, the dollar value of which was
abollt 30 percent of the District total.
At the largest banks, the business group borrowing the
largest amount of short-term credit was real-estate firms. This
SHORT·TERM

8USINES~

LOANS OF MEM8ER 8ANKS,OCT08ER 5, 1955
8Y SIZE OF SANK

101

SHORT·TERM 8USINESS LOANS OF MEM8ER 8ANKS, OCT08ER 5, 1955
BY BUSINESS OF 80RROWER AND SIZE OF 8ANK
Eleventh federal Reserve District
(Estimates of outstanding loan s. Amounts in thousands of dolla rs)
Size of bonk (Totol deposits, in millions of dollars )

250 and
Business of borrower

AU BUSINESSES •••••••••••••••

90,981
9,380
2,747
12,703

25,148
3,841
2,171
3,291

2,175
900
116
428

125,514
21,442
63,846
24,673
39,173
426,780
35,612
50,408

11,899
7,015
25,661
12,699
12,962
108,422

48,886
17,265
108,964

27,326

37,940
71,024
217,578
13,965
38,625

4,068
11,777
35,887
7.048
28,839
51.,617
4,845
8,655

462
269
6,537
1,112
5,425
3,137
237
282

8,292
123,307
138,032
25,353
45.776
685,2 13

249
17,050
12,202
9,992
39,456
173,260

8,864
51,1.93
42,661
35,607
26,363
417,523

1,303
15,649
5,785
10,850
7,530
11 5,652

92
658
167
947
754
11,849

2,11.7

2-10

Under 2

Food, liquo r and tobacco . .. .• •
Textiles, apparel, and leather.. .
Metals and metal products .... .
Petroleum, coal, chemicals, and
rubber ..•. • .•..•• ...... ••
Other .. .•. .•••.• •... • •• ..••
TRADE .• • .•.•.•.•. • . • ••••••••
WholeS<lle • .. •.•.•••.•••.•.•
Retail •. .. ..... .. •..•• ••.•. •

OTHER ••••••••••••••••••••••-.
Commodity dealers . .. . • .....•
Sales finance (;ompanies •. .....
Transportation, communication.
and other public utilities ••..•
Construction •.•••..••..•....•
Real estate .... . . ..... . ..... .
Services ....•..•.•..•..... . .
Other nonfinancial . ..•. . •....•
ALL BUSiNESSES .....•..• .•....

28.4
1.3
1.1
4.6

22.6
2.3
1.5
7.9

21.8
2.3

18.3
3.1
9.3
3.6
5.7
62.3
5.2
7 .4

6.9
4.0
14.8
7.3
7 .5
62.6
1.2
15.8

.2

1.2
18.0
20.1
3.7

67

100.0

9.8
7.0
5.8
22.8
100.0

3.0

21.7
3.3
1.9
2.8

18.4
7.6
1.0
3.6

11.7
4.1
26.1
9.1
17.0
52.1
3.4
9.3

3.5
10.2
31.0
6.1
24.9
47.3
4.2
7.5

3.9
2.3
55. 1
9.4
45.7
26.5
2.0
2.4

2.1
12.3
10.2
8.5
6.3
100.0

1.1
13.5
5.0
9.5
6.5
100.0

.8
5.5
1.4
8.0
6.4
100.0

.7

category included loans secured by liens on real estate but
excluded loans which are merely collateralized by real-estate
mortgages or kindred liens. Thus, most short-term real-estate
loans represent temporary credits - frequently negotiated by
repurchase agreement - to mortgage companies, insurance
compan ies, and others who may be the permanent lenders. In
1955, this type of transaction was concentrated at the largest
banks, as the volume at all other banks did not equal the
short-term real-estate loans of the institutions having deposits
of more than $250,000,000. At the largest banks, furthermore,
petroleum loans and construction loans, with 18.3 percent
and 18.0 percent, respectively, of the loan volume, closely
followed real estate in the order of importance. However, the
largest average loan at thcse banks was made to sales finance
companies.

INTERMEDIATE-TERM 8USINESS LOANS OF MEMBER BANKS
OCTOBER 5, 1955, 8Y SIZE OF BANK
Eleventh Federal Reserve District

Size of bank

•

le-l00

39,177
3,986
2,614
13,663

Percentage distribution within bank size group

MANUFACTURING AND MINING.

Eleventh federal Reserve District

~i~:~~5d~Id~~i~;~)

Amount
of loons

250 and over ..... ..........
100-250 ... .. .......... ...•
10-100 ...... . ...•...•• • .. .
2-10 .................• •...
Under 2 ....................

S 685,2 12.980
173,2 60,030
417,523,450
115,652,190
11,848,950

48.8
12.4
29.7
8.3
.8

11,204
4,038
36,802
17,917
4,257

15.1
5.4
49.6
24.2
5.7

TOTAL ...........•..... . .

$1,403,397,600

100.0

74,218

100.0

Percentage
of total

100-250

194,587
9,170
7,295
31,166

over

MANUFACTURING AND MINING.
Food, liquor, ond tobacco ..... .
Textiles, apparel, ond leather.. .
Metals and metal products .... .
Petroleum, cool, chemicals, and
rubber • ......... •.. ......
Other ...•.•.......•........
TRADE .•••.••. ..• .•.•. ...... •
Wholesale ••••...•......... •
Retail •• .• .• .. ••• . . ... .. ... •
OTHEI1: •. .. .........•...• . ...•
Commodity dealers .• •..•.. • . •
Soles finance companies • ..... .
Transportation, communication,
and other public utilities .••.•
Construction •. . •••....• .• ••••
Real estate • •••..••........••
Services •........... • ...... .
Other nonfinancial ••.. ...• •. ••

Number
of loons

Percentage
of total

Size of bonk
ITolal deposits, in
millions of dollars)

Amount
of loons

Percentage
of total

Number
of loons

Percentage
of total

59.8
12.8
22 .2
4.8

' Under 2 .•...•.....•.. • . ....

5326,987,050
70,042,780
121,473,250
26,261,620
2,330,480

..

6,679
2,054
12,305
4,966
1,020

7.6
45.5
18.4
3.8

TOTAL . •. ... ..... .. ......

$547,095,180

100.0

27,024

100.0

250 and over .• . ...........•
100-250 ...................
10-100 ........... , .. . . ....
2-10 ........ . . ... . ....
10 • •

21..7

MONTHLY BUSINESS REVIEW

102

INTERMEDIATE· TERM BUSINESS LOANS O'F MEMB ER BANKS
OCTOBER 5, 1955, BY BUS IN ESS OF BORROWER AND SIZE OF BANK
Eleventh Federal Reserve District
(Estimates of outstanding loan s. Amounts in thousands of dolla rs)
Size of bank ITotol depo5its, in millions of dollars)

250 and
Business of borrower

MANUFACTURING AND MINING.
Food, liquor, Clnd tobacco . .. . . .
Textiles, apparel, and le ather .. .
Metals Clnd metal products •..••

100-250

10-100

175,875
5,087
1,589
13,931

33,874
2,421
12
929

44,105
2,233
1,209
4,202

4,667
363
100
808

448
60

146,702
8,566
17,349
3,654
13,695
133,763
695
1,895

29,851
661
8,158
2,356
5,802
28,01 t

2,403
993
9,915
1,920
7.995
11,680
139
665

178
20
911
45
866
971

2,521

30,607
5,854
21,494
4, 194
17,300
55,874
2,543
1,416

36,679
13,998
27, 154
33,018
20,324
326,987

3,789
306
5,471
3,428
12,496
70,043

4,525
7,195
12,819
19,556
7,820
121,473

480
1,734
1,643
5,457
1,562
26,262

19
95
23
714
120
2,330

over

2-10

Under 2

o

190

Petroleum, coal, chemicals, and
rubber •................. .

Other .. . ................. . .
TRADE •••••••••.•••••••••...•
Wholesale .... . .........• .. .
Retail ......... .... . ... • ... •

OTHER ...... ................ .
Commodity dealers ....•.....•
Sales flnance companies •.. ... •
Transportation, communication,
and other public utilities . •.. •

Construction •.... . ..... ......
Real estate ................ . .
Servites . .................. .
Other nonflnancla l........... .
ALL BUSiNESSES ..•.......•.. . .

o

o

o

Pertentage distribution within bank size group
MANUFACTURING AND MINING.
Food, liquor, and tobacco .. ... .
Telltiles, apparel, ond leather.. .
Melal s and metal produtts ... . .
Petroleum, coal, themical5, and
rubber .. .......... ... ... .
Olher ..................... .

TRADE ............ ......... ..
Wholesa le ....... .... ..•.. . .
Retail .. ...........•........
OTHER ....... . . ... ... . ...... .
Commodity dealers . .. . . ..... .
Sales finance companies ... . .. .
Transportation, communication,
and other public utilities . ... .
Construction . ........... . .. . .
Rea l estate ...... .•..........
SenJces . ........ . ......... .
Other nonfinancial •....... . ...
All BUSiNESSES ..•.......•...•

48.3
3.5
.0
1.3

36.3
1.8
1.0
3.5

17.9
1.4

.5
4.3

..

19.2
2.6
.0
8.2

44.9
2.6
5.3
1.1
4.2
40.9

42.6
.9
11.7
3.4
8.3
40 .0

9.2
3.8
37.7
7.3
30.4
44.4
.5
2.5

7.6
.8
39.1
1.9
37.2
41.7

1.8
6.6
6.3
20.8
5.9
100.0

.8
4.1
1.0
30.6
5.2
100.0

53.8
1.5

.2

.0

.6

3.6

25 .2
4.8
17.7
3.5
14.2
46.0
2.1
1.2

11.2
4.3
8.3
10 .1
6.2
100.0

5.4
.4
7.8
4.9
17.9
100.0

3.7
5.9
10.6
16.1
6.4
100 .0

3.1

.0
.0

For intermediate·term loans - those with maturities
beyond 1 year - the largest banks again had the heaviest
concentration, as they extended almost 60 percent of the
$547,095,000 of intermediate·term business loans. This was
a larger share of the total than was recorded for their short·
term credits. With deposits between $100,000,000 and 250,000,000, the next largest bank size class also had a larger proportion of intermediate·term loans than short-term loans, but
for each of the three classes of banks with deposits below
$100,000,000, the survey estimates indicate a smaller share
of intermediate·term loans than short·term credits. Character·
istic of all banks in the Nation also, the larger banks occupy
the dominant position in this region in granting intermediate·
term loans, many of which require specialized staffs and
resources to negotiate.
Petroleum and related industries borrowed $146,702,000,
or 45 percent, of all interm ediate·term credit at the largest
banks. At the next largest class of bank, longer-dated petrol.
eum loans also led the various categories of intermediate·
term borrowers; of the total volume of loans to the petroleum
industry, more than 70 percent was for a period of longer
th an 1 year. Public utilities borrowing at longer term
amounted to about four times their short· term borrowing. In
both instances, the national data showed a broadly
comparable situation.

In the Eleventh District, service firms had 57 percent of
their borrowing in the form of intermediate·term loans; however, nationwide, these borrowers had a smaller percentage
of intermediate·term loans. The reason for the high percentage of in termediate· term borrowing by service firms is to be
found in the facttbat the volume of business handled by these
firms has expanded rapidly in the postwar period; since such
firms are predominantly small and do not have normal access
to national capital markets, they have obtained from com·
mercial banks not only the funds for working capital pur·
poses but also, in many instances, the funds to cover their
rapidly expanding capital requirements. In the latter case,
the borrowing has taken the form of term loans with maturi·
ties in excess of 1 year and with the principal repayable in
periodic instalments.
True also for the Nation, the largest firms in the District
tended to obtain their intermediate· term loans from the largo
est banks. For example, firms with assets of $5,000,000 and
over had an estimated 85 percent of their loans with the
largest bank class; this proportion was 95 percent for banks
holding deposits of $100,000,000 and over. Furthermore, at
the largest institutions, less than 25 percent of all intermed·
iate·term business borrowing came from firms whose total
resources were below $1,000,000. As the banks decreased in
size, the percentage of loans going to these smaller firms
increased rapidly. This trend is exemplified by the situation
at the smallest banks, where no borrower had assets above
$5,000,000 and the overwhelming majority of loans - 87.3
percent - went to firms whose total assets were below
$250,000.
For all banks, the largest volume of borrowing originated
from the $1,000,000·$5,000,000 class, the firms immediately
above and below forming the next largest users of intermedi·
ate·term credit and the least volume coming from the smallest
class and the two largest classes of borrowers. To the extent
that this relalionsh:ip accurately represents the District econ·
omy, such evidence is indicative of the wide participation of
various sized firms in the pool of credit managed by member
banks in the Eleventh District.
INTERMEDIATE·TERM BUSINESS LOANS OF MEMBER BANKS
OCTOBER 5, 1955, BY SIZE OF BUSINESS AND SIZE OF BANK
Eleventh Federol Reserve Dislrict
(htimat8s of outsta nding loons . Amounh in thousands of dollars)
Size of bank Irotal depo5its, in millions of doUars}
Size of business
250
(In thousands of dollars) and oyer

100-25 0

10-100

100,000 and over .... .. 29,820
25,000-100,000 ....... 19,799
5,000-25,000 ..... ... . 91,659
1,000-5,000 ......... . 106,364
250-1,000 ...... . .... 50,-479
50-250 ............ . . 23,312
5,554
Under 50 ........ . ....

. 4.502
2,6 19
8.941
20,058
16,099
12.086
5,738

1,321

1,212
5,851
22,144
35,559
42,989
12,398

534
2.919
14,080
8,527

1,026

35,845
23,630
106.45 1
149.250
105,200
93,476
33,243

TOTAL ........... . . 326,987

70,043

121 ,474

26.262

2.330

547,095

2- 10

Under 2

202

°°

°°
°

150
145
1,009

Totol

Percentage distribution within bank ,ize group

7. 1
1.7

6.4
3.7
12.8
28.6
23.0
17.3
8.2

1.1
1.0
4.8
18.2
29.3
35.4
10.2

0.8
.0
.0
2.0
11.1
53.6

100.0

100.0

100.0

100,000 and over ......
25,000-100,000 .. . .. . .
5,000-25,000 ... . • .. ..
1,000-5,000 .... .. ....
250-1,000 . ..........
50-250 .. .. .... . . .. ..
Under 50 .............

9.1
6.1
28.1
32.5

TOTAl. .. . .........

15,4

32.5

0.0
.0
.0
6.5
6.2
43.3
44.0

6.6
4.3
19.4
27.3
19.2
17.1
6.1

100.0

100.0

100.0

4

103

MONTHLY BUSINESS REVIEW
Interest Rates

The historic relationship between high.level economic activo
ity and a rising structurc of interest rates was observed once
again during the prosperous postwar decade, as the heavy
capital requirements associa ted with full production and eco·
nomic growth outdistanced the more slowly rising supply of
loanable funds. On October 5, 1955, the rate of interest on all
business loans at District member banks averaged 4.7 per·
cent, compared with a national average of 4.2 percent. In both
the District and the Nation, these rates stood above their 1946
levels, reRecting the substan tially larger business loan volume,
but the increase was greater in the Nation than in the District.
In the 9·year interval between surveys, however, the gap was
narrowed; the average rate nationally rose 1.3 percentage
points, while the average loan rate in the District increased
from 3.7 percent to 4.7 pcrcent, or only 1 percentage point.
Higher interest rates charged in the Eleventh District reRect
man y different factors. Virtually all of them are related to the
characteristics of the region and its rapid economic develop·
ment. Traditionally, the region has had a dynamic economy,
and its growth and development bave required more capital
than could be provided from local savings. Hence, through
the years, the Southwest has been a large importer of capital;
and , under the persistent conditions of a strong demand for
and scarcity of capital, the price of money has remained
higher than in sections of the country whi ch have long been
exporters of capital. Another reason closely associated with
the foregoing is the smaller average size of borrower in the
region than in the Nation; the evidence in the survey tends
to confirm the traditional relationship between the size of
borrower or size of loan and the average interest rate. The
availability of alternative methods of finance, including access
to national capital markets, is anotber relevant factor.
Perhaps of greater significance to the District, however,
than the gap between rates here and in the country as a whole
is the reduction of this differential during the 9 years, whlch,
in a broad sense, is evidence of the economic progress in this
region. In the postwar period, the rapid growth of income
has permitted a substantial increase in the volume of savings
and the availability of local capital, which helped to limit the
difTerence between average interest rates in the District and
the Nation. Again, the banks in the region have grown in size
and greatly augmented their capital funds, making it possible
to accommodate more a dequatel y the increasing credit
demands of business institutions. At the same time, the vitality
of the region and the growing stature of its business concerns,
together with expanding opportunities for investment, have
attracted a large volume of investment funds from other areas
at favorable rates of interest. Moreover, a large segment of
business firms has grown in size and financial soundness and,
hence, has become better credit risks. For that reason, many
of these firms have been able to obtain interest rates locally
which are competitive with those in national markets.
Whil e the level of rates changes in reaction to the supply
of and demand fOT loanable funds (which themselves are
determined by forces emanating from the level of saving, the
productivity of capital, the availability of bank reserves, the

size of national income - to mention some of the more
prominent), changes within the pattern of rates are almost
continuously taking place. Thus, industries having rapid
growth rates and showing almost uniformly excellent earnings
are likely to be more favored than those whose future is less
promising, although the stability of the industry in question
powerfully qualifies the outcome. Moreover, the level of rates
may be affected by the development of techniques of credit
investigation and of lending on a basis to facilitate repayment,
both of which may reduce greatly the risk of lending. Within
many industries, moreover, some firms may be improving
their credit rating, while others may have passed their prime.
As further evidence of the importance of changes within
the pattern, from 1946 to 1955, borrowers with assets of
more than $5,000,000 showed a much larger increase in the
average cost of loans than did concerns with below $50,000,
whose average cost of credit in 1955, in fact, was unchanged
from the 1946 level. The larger firms, whose borrowing costs
are tied closely to changes in the prime rate, were affected
more noticeably in this respect by the rising pattern of interest
rates than were the very smallest. In the case of the latter
group, loan rates tended to be sticky and only slowly respon·
sive to changes in the interest rate structure.
Commodity dealers paid the lowest average rate of interest
on loans, 3.9 percent, and service firms, paying 5.5 percent,
ranked at the top. Loans to enterprises specializing in com·
modity dealings are typically secured by title to physical
goods, which reduces the risk and helps to minimize their
interest charge. Service firms , on the other hand, are character.
ized by small units, and their average loan is the smallest
among the borrowers surveyed. Retailers paid an average
rate of 5 percent, which happened to be the representative rate
on both intermediate· and short·term loans. At a cost below
the average for all borrowers, petroleum and related indus.
tries paid an average of 4.4 percent on all loans, with short·
term rates fractionally above the charge for loans of longer
than 1 year. In general, all categories of manufacturing and
mining companies were charged less than the average rate
on loans; trade and other borrowers tended to pay more,
AVERAGE INTEREST RATES ON
MEMBER BANK BUSINESS LOANS, OCTOBER 5.1955
BY MATURITY OF LOAN AND BUSINESS OF BORROWER
Eleventh Federal Reserve District
(Percent per annum)

Business of borrower

MANUfACTURING AND MINING ...
Food, liquor, and tobacco ........
Textiles, apparel, and leather.• • . •

Metals Clnd metal products . . ... . •
P.lr~ eum, coal, chemica ls, and
rubber .•••.. .••. ... ...•...•
Other ... .• •••. . , •..........••
TRADE • ..• ••...•.••.•.• . •.••.• .
Wholesale ... ... ....... . .... . .
Reta1l •••••••••••••.••••••••• •
OTHER •••• ••••••• ••••••••••••• •
Commodity dealers •• ••••••• ••••
Sales flnonce comeanies •••••••••
Transportation, communication,
and other public utilities •••••••
Construction • •••••• •• . ••• ••••• •
Real estate •••• .••• ••••.• ••••••
Sel"l'ice firms ••••• • •••••••••••••
Other nonfinancial •••• • •• •••••••

All BUSiNESSES • .••••••• ••••••••

Intermediate ·
term loans

All
loans

SoorHerm loans
(1 year or len)

(Over I year)

4.5
4.4
4.6
4.5

4.5
4.2
4.5
4.4

4.4
4.B
4.9
4.9

4.4
47
4.9
5.0
4.7
3.9
4.1

4.7

4.5
4.7
4.9
47
5.0
4.7
3.B
4.1

4.4
4.6
5.0
4.B
5.0
4.9
4.9
4.8

4.1
5.1
4.B
5.5
4.4
4.7

4.4
5.0
4.B
5.1
4.4
4.7

4.0
5.5
4.4
5.B
4.5
4.6

MONTHLY BUSINESS REVIEW

104

Summary

AVERAGE INTEREST RATES ON
MEMBER BANK BUSINESS LOANS, OCTOBER 5,1 955
BY MATURITY OF LOAN AND SIZE OF BUSINESS
Eleventh Federal Reserve District
(Percent per annum)

Size of business
(In thousands of dollars)
100,000 and over ........... .

25,000- T00,000 .. ..•........
5,000-25,000 .... ... ...... . .
1,000-5,000 . ..... ........ ..
250-1,000 ... ...... . .. .. • . .
50-250 . ........ ... .... ... .
Under 50 . .......... .. ..... .
ALL BUSiNESSES . ••••••••• •

All
loans

Shorl-term loans
(1 year or less)

3.4
4.0
4.2
4.5
4.7
5.2
5.6
4.7

3."
4.2
4.3
4.4
4.8
5.2
5.4
4.7

Intermediateterm loons

lOver 1 year)

3.4
3.8
4.1
4.8
4.6

5.3
6.3
4.6

although these latter classifications include the relatively low
interest-paying commodity dealers and public utilities,
The table showing average interest rates by maturity of loan
and size of business, which cuts across business classifications, is indicative of the relationship between the size of firm
and the average rate of interest. These data illustrate a pattern
for intermediate-term and short-term loans which pervades
virtually all businesses. As the gross assets of borrowers rose,
the average interest charge tended to decline. Two important
reasons why interest rates generally increase as the size of the
firm declines are that the cost per dollar of servicing smaller
loans is considerably greater than is true for larger transac·
tions; and the risk ordinarily involved in smaller loans is
greater and is usually compensated for by higher interest
charges. With respect to the latter point, however, the rate
is also affected by the type of security, which helps to deter·
mine the degree of risk and influences the cost of borrowing.
For borrowers using funds longer than a year, there was
a somewhat larger spread between the highest and lowest rate
than was true for short-term borrowings. This wider gap probably resulted, in a large measure, from the risks involved in
lending funds at longer term to smaller enterprises and the
fact that many of the longer-term loans to the smaller bor·
rower represent instalment loans, which usually carry a
higher average rate.

Portraying the characteristics of member bank lending to
business in this District, the survey yields information helpful
to those interested in understanding selected southwestern
financial developments. Among the borrowers, the firms showing the most rapid increase in their borrowing between the
survey dates were those principally engaged in real-estate and
construction activities. Moreover, the size of the typical bor.
rowing firm rose, although the largest dollar amount of indebt·
edness in both yea rs came from firms whose total assets were
between $250,000 and $5,000,000.
Petroleum and related industries were the largest borrowers, while retail trade, followed by service firms, led the
ca tegories in the number of borrowers. The largest sized
banks held more than one-half the dollar volume of business
loans, and banks having deposits between $10,000,000 and
$100,000,000 had almost 50 percent of the number of loans.
Banks with the largest deposits had a greater proportion of
intermediate-term loans than short-term loans.
The average rate of interest on all business loans in the
District was 4,7 percent, and the District average was closer
to the national average in 1955 than in 1946, Commodity
dealers paid the lowest average rates, with public utilities
second, Firms in the service industry paid the highest average
rate, followed by construction firms and retailers, in that
order. There was a tendency for the interest rate to rise as
the size of the borrower decreased, and this was generally
true for both intermediate-term and short-term loans.
Not only did the survey illustrate what had already been
evident - that the southwest economy expanded vigorously
between 1946 and 1955 - but also that the growth was widely
distributed, The latter development, in particular, should help
to strengthen and fortify the regional economy_ In a broad
sense, however, most of the major changes in southwestern
bank loans to business paralleled trends which occurred
throughout the Nation, indicating that forces affecting banks
throughout the country were also felt in the Eleventh
District.

105

MONTHLY BUSINESS REVIEW

REVIEW OF BUSINESS, AGRICULTURAL, AND FINANCIAL CONDITIONS

Department store sales in the
Eleventh District during May
were 17 percent above April
and 10 percent above May
1955. There was an increase of
5 percent in sales for the first 5 months of 1956 compared with the same months last year. Sales at furniture stores in May were 16 percent higher than in
April and 8 percent above May 1955.
Rain is needed throughout most of the Distrid to
maintain development of crops. The 1956 winter
wheat crop in the District states is estimated, as of
June 1, at 82,811,000 bushels, or 11 percent above
the month-earlier forecast. Cash receipts from farm
marketings during the first quarter of 1956 totaled
$582,839,000, or 9 percent below the same period
in 1955.
Crude oil production in the District declined slightly
in the first half of June, while refinery activity showed
a small increase. However, with increased allowables
in Texas, production may rise somewhat in July.
Crude stocks in the Nation also declined slightly in
early June, while stocks of the four major refined
products showed a mild increase.
Nonagricultural employment in the District states
during May continued its seasonal upswing, increasing 11,900 from April to reach 4,051,300. Manufacturing employment increased 4,500 to a level of
754,500, with important gains reported in the aircraft, shipbuilding, machinery, and food-processing
industries. Construction employment showed a sizable increase, as workers idled by labor-management disputes returned to their jobs.

Consumer bu ying at deparbnent
stores in the District was well sustained in May, with the dollar sales
of reporting stores 17 percent higher
in April and 10 percent larger than
in May 1955. These increases were partially accounted for
by two more trading days than in April and one more than
in May last year. Although total sales increased substantially
from April Lo May, the adjusted index of sales (which makes
allowances for the effects of seasonal factors and the number
of business days) was 145 percent of the 1947-49 average,
compared with 144 in April and 136 in May last year.
Cumulative
percent above
increase of 3
per cent at the

sa les for the first 5 months of 1956 were 5
a year earlier compared with a corresponding
percent at the end of April and a peak of 8
end of the first quarter.

The largest increases in department store sales during May
were primarily in the soft goods departments. Sales of women's
an d misses' ready.to-wea r apparel were 13 percent higher
than a year ago, and sales of women's accessories were up
10 percent. Men's and boys' clothing sales, increasing more
than is usual d uring May, were 8 percent higher than a ycar
earlier.
Sales in the consumer durable goods departments, after
dropping below those of a year earlier during March and
April, rose 15 percen t during May and at the month end
were 6 percent above those of May 1955. Sales of major
household appliances rose 46 percent over the compara tively
low level of April and were 15 percent more than in Maya
year ago. Domestic floor coverings sales decreased substantially during the month and were under the year·earlier level
RETAIL TRADE STATISTICS
[Percentage change}

STOCKSl

NET SAlES

Ma y 1956 from

Ma y 19 56 from

The value of construction contracts awarded in the
District during May, at a record high, reflected gains
of 17 percent from April and 28 percent from May
1955. Residential awards declined 7 percent from
April, but this decrease was more than offset by a
38-percent increase in "all other" awards.
Weekly reporting banks in the District utilized
funds from loan and investment liquidation to meet
deposit withdrawals and build up cash accounts during the 5 weeks ended June 20; their deposits
• declined $22,408,000. Daily average gross demand
deposits at all member banks declined in May, but
time deposits rose above the April average. Bank
debits during the month, however, rose in 22 of the
District's 24 reporting centers.

S mo. 1956
Une of trade

by area

OEPARTMENT STOR ES
Total EJe'l8nlh Dtstrlet •• •••• ••• • ••
Corpus Christl ••• • ••••••••••••• •
Da llas • •• ••••••••••••• • ••••••••
EJ Pa so •••• •• •••• •• •••• • ••• • • • •
Fort Worth • ••••••••••••••••• • • •
HoU'Sfon •• • •••••••••••••••• ••••
Son An tdnlo • •• ••• •• • ••• • •• •• •••
Shreveport, La •••••••••••••• • •••
Waco •• • •••• • ••• • ••••••••• • •••
O ther cities • •• • • • • ••••• •• •• • •••
FU RNITURE STORES
Talai S eventh Dislrict •••••••• •• ••
Amarillo • •• •• •• • ••• •••••• • •• •••
A ustin • • ••••• •• • ••••••••• • • • •••
Da llas •• • •• •• •• • ••••••••• • •••••
Houston •• •••• •• • ••• • ••• •• •• • • •
Lubbock •••• • • • • • ••••• • •• • •••••
So n Antonio • • •• • ••••• • •• • ••• • ••
Shreve port, La ••••••••••••••••••
Wichita Fa lls • • • • ••••••• • •••••••
Other cities •• ••••••••••••• • ••••
HOUSEHOLD APPLIAN CE STORES
Total Eleventh District •• • ••• • •••••
Dallas ••• • ••••••••••• •• ••••••••
1 Siocks at end of month.

M.y

April

1955

1956

10
15
7
10

17
23

14

15
4
8
12
11

14

8
19
20
23
13
26
10

8
_ 9
8
_ 16
18
31
4
13
-10
10

15
-30
30

-4
-13

20
3

11

19
18
18
14

1
6

com po with

5 mo. 1955

M. y

1955

5
6
2
4
6
7
-1
5
9
7

9
16
5
3
19
13

3

3
15
18
_4
- 1
17
9

- 1
- 19
14

- 6
12
14

0

6
13
12

April
1956

-4
6
-5
-5
-6
0
- 5
-7
-5
-7

11

1
9
2
- 3
2
2
- 1
4

-12

-~

MONTHLY BUSINESS REVIEW

106

WINTER WHEAT PRODUCTION

INDEXES OF DEPARTMENT STORE SALES AND STOCKS
11947-49

=

Four Soulhwestern States and United States

1001

May
Area

Apr.

Mar.

(In thousand s af bushels I

ADJUSTED'

UNADJUSTED

May

May

Apr.

Mar.

May

1956

1956 1956 1956 1955 1956 1956 1956 1955

SALES-Daily average
Eleventh District •••• ..••••••
Dallas. • ••.• . . ........ ....
Houdon •••••..•.•...••• . •

132
122
147

134
123
144

135r

145
130
168

144
137
160

144
130
155

136r

125
149

155p 162

162

142r

154p 154

156

141r

143
128
164

126
152

STOCKS-End of month
Eleventh District . •• .••••.• • •
I

1955

1945-54

1,218
840
58,203
22,550

1,218
1,500
23,784
13,464

598
2,612
77,872
50,246

82,811
670,375

39,966
705,372

131 ,32 8
872,635

Arizona . •.• . .. •. ... ....••. .

New Mexico ••••••....•..••••
Oklahoma ...... . ... • . ..... .
Texas . .. ... .... . .... .. .. . . •
Tolal.... ......... ...... ..

United States........ . .... .

Adjuded for seasonal variation.

Average

Indicate d
June 1

Area

r-Revised.
p-Preliminary.

SOURCE: Unite d States Department of Agriculture.

by 16 percent. The dollar volume of televjsion sales during
May was at the lowest point since February 1954_
Sales of all types at reporting District department stores
increased from April to May - cash sales by 18 percent,
charge account sales by 19 percent, and instalment sales by
17 percent. Compared with May last year, cash sales were
up 8 percent; regular charge sales, up 10 percent; and instalment sales, up 12 percent.
Instalment accounts outstanding at department stores again
showed little change during May. Compared with a year ago,
however, month-end balances were up 11 percent. The instalment collection ratio in May, at 14 percent, was 1 percentage
point above both April and a year ago. Charge accounts outstanding increased 2 percent during May and at the end of
the month were 6 percent above a year earlier. Collections
during the month amounted to 47 percent of first-of-month
balances, or 5 percentage points above the April collection
ratio and 1 percentage point above a year ago.
Department store inventories during May declined seasonally by 4 percent and at the end of the month were 9 percent
higher than a year earlier. The May adjusted stock index was
154 percent of the 1947-49 average, compared with an average of 156 for the first 4 months of this year and 141 for
May 1955. Although orders outstanding increased 27 percent during the month, the total outstandiug at the end of
May was 2 percent below a year ago.
Sales of reporting furniture stores during May showed a
sharp gain of 15 percent over those in April and were 8 percent larger than those in May 1955. This is the largest yearto-year gain reported since November last year_ Inventories
at the end of the month were 1 percent more than in April
and were up 3 percent from the year-earlier figure_Accounts
receivable at the close of May were 9 percent above those
of a year ago, while collections increased 15 percent.
Registration of new car sales durin g May in Dallas, Fort
Worth, Houston, and San Antonio was down 21 percent
from a year earlier but was up 10 percent from April. New
car sales for the four cities for the first 5 months of 1956
were 16 percent below the comparable period of 1955_

suffering from lack of moisture. The major portion of the
Trans-Pecos area of Texas, parts of the southern High Plains,
and adjacent Low Rolling Plains and Plateau counties
received only negligible rainfall, and moisture conditions are
extremely poor. Early June rains improved agricultural prospects in many drought-stricken sections of eastern New Mexico and northwestern and southern parts of Texas, but more
precipitation is needed. Some crops were damaged by hail
and washing rains during mid-June in a few counties in the
Panhandle and southern High Plains of Texas; downpours
measured up to 5 inches in local areas. In the eastern third
of the District, crops are at a critical stage of growth, and
soaking rains are needed to maintain development.
Considerable acreage of sorghums has been seeded in the
northwestern portion of the District; however, soils are too
dry for planting in some areas. Feed crops in eastern and
central Texas are suffering from lack of moisture, and some
corn which failed to make grain in south-central counties has
been cut for silage or forage_ Harvest of wheat is virtually
complete throughout the District, and yields are higher than
anticipated.
The indicated production of 1956-crop winter wheat in the
four principal wheat-producing states of the District is placed,
as of June 1, at 82,811,000 bushels, according to the United
States Department of Agriculture_ A crop this size would be
twice the small output in 1955 but 37 percent below the
10-year (1945-54) average. The June 1 forecast of winter
wheat in the District states is 11 percent larger than the
previous estimate, while the indicated production for the
Nation - at 670,375,000 bushels - is 2 percent smaller than
the May 1 estimate.
The fir st bale of 1956-crop cotton was ginned in the Lower
Valley of Texas on June 8 - the same date the first bale was
ginned in 1955_ Planting and cultivation are active throughout the District. The crop made good growth during most of
LIVESTOCK RECEIPTS
(Number)

FORT WORTH MARKET

Following rather general rains
over the major portion of the District
during late May and early June, precipitation has been limited to local
areas, and crops and pastures are

Clo ss

May

April

May

May

1956

1955

1956

1956

1955

f~5~

29,720
11.415
3,958
12 8,276

34,833
17,902
3,58a
140,240

36,520
14,630
3,946
126,072

Cattle .......... 70,743
13,418
Calves .........
Hags ...... ..... 53,508
Sheep .... . ... . . 183,596
1

Includes goats.

SAN ANTONIO MARKET

May

101,246
21,508
48,377
229,849

52,063
10,146
57,785
131,748

~

~

MONTHLY BUSINESS REVIEW
the past month, but inadequate moisture has recently slowed
development. Prospects remain promising in north Texas, the
Lower Valley, Coastal Bend, and irrigated areas in the western part of the District. However, late cotton is developing
slowly in south Texas.

107

FARM COMMODITY PRICES
Top Prices Paid in Local Southwest Markets

Week ended
Unit June 20, 1956

Commodity and market

Field work is active in most commercial vegetable areas.
Cantaloupes are moving in volume from the Laredo and Winter Garden areas of Texas, and the crop is developing satisfactorily in later areas. Most watermelons are being shipped
from irrigated areas in south Texas; melons from later plantings in dry-land areas are becoming available. Sweet corn
is being shipped from south-central Texas, and the crop is
nearing maturity in east Texas.
The output of 1956-crop spring vegetables and melons is
estimated, as of June 1, to be 19 percent larger than a year
earlier and 23 percent above average. Increased production
of cantaloupes, honeydew melons, early and late-spring
onions, early spring tomatoes, late-spring potatoes, and watermelons is offsetting the smaller crops of sweet corn, peppers,
summer potatoes, and late-spring tomatoes.
The condition of the Texas orange and grapefruit crop as
of June 1 was considerably above both a year ago and the
10-year average. Trees are in good condition, and the set of
the fruit is exceptionally good. In early June, the use of water
from Falcon Reservoir was restricted to nonagricultural purposes, and a lack of irrigation water could reduce the present
favorabl e outlook.
Range and pasture forage made good progress in the High
Plains area as a result of improved moisture conditions, and
supplemental feeding is tapering off. Pastures in the other
portions of the District are in need of additional moisture
to promote growth.
Ranges in New Mexico, Oklahoma, and Texas were in
poorer condition as of June 1 than at the same time a year
earlier, while those in Arizona were somewhat better, according to the Department of Agriculture. Generally, cattle and
sheep are also in poorer condition than a year earlier,
although they have been maintained in fairly good condition
with almost continuous supplemental feeding.
Shipments of cattle and calves to principal livestock markets
in Texas during May were 29 percent smaller than during
the same month last year. Marketings of sheep and Iambs
CASH RECEIPTS FROM FARM MARKETINGS
Five Southwestern Slates
fin thousands of dollars)

March

January-March

Area

1956

1955

1956

1955

Arizona .•••.• • .•. •• ..•.• • .•

$ 19,816
16,976

$ 18,844
19,130

$ 77,570
66,696

$ 98,302

6,745
23,599

7,133

27,632

83,096
327,845

64,974
28,752
94,699
353,439

$582,839

5640,166

Louisiana .••• •.•••.•.• • ....•

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

79,609

28,337
87,359

Totol ....... .. . .......... .

$146,745

$160,803

SOURCE: United States Deportment of Agriculture.

COTTON, Middling 1 5/16-inch, Dallas ....
WHEAT, No.1 hard, Fort Worth .•. .. .. . .
OATS, No. 2 white. Fort Worth ...... . . . .
CORN, No.2 yellow, Fort Worth ... . .....
SORGHUMS, No.2 yellow, Fort Worth ....
HOGS, Choice, Fort Worth .. . ...........
SLAUGHTER STEERS, Choice, Fort Worth ...
SLAUGHTER CALVES, Choice, Fort Worth ..
STOCKER STEERS, Choice, Fort Worth .....
SLAUGHTER SPRING LAMBS, Choice,
Fort Worth ..•......••.•........•...•
BROILERS, south Texas ..................

lb.
bu.
bu.
bu.
cwt.
cwt.
cwt.
cwt.
cwl.
cwt.

lb .

$

Comparable Comparable
week,
week,
previous
previous
year
month

.3545
2.37 Vl
.90
1.90*
2.44
16.50
21.50
20.50
18.50

2.47
16.50

1.00
1.84Vl
2.55
21.50

21.00
22.00
19.00

23.50
21.50
23.00

22.50
.22

23.00
.2'

22.50
.28

.3545

2.53Vl
.91*

1. 85~

$

.3345
2.64Yl

were 22 percent smaller, but hog receipts were 11 percent
greater than in May 1955.
The index of prices received by Texas farmers and ranchers
increased 2 points (less than 1 percent) during the month
ended May 15, according to the Department of Agriculture.
At mid-May the index was 252 percent of the 1910-14 average, compared with 250 a month earHer and 260 at the same
time a year ago.
Cash receipts from farm marketings in the District states
totaled $582,839,000 during the first quarter of 1956, reflecting a decline of 9 percent from the January-March period
in 1955. Receipts from crops were 14 percent below those of
a year earlier, and livestock receipts were 4 percent less,

/ ....'"""''''.,,~, ;".,

/" ct

."'.'~

4' \['1-

\:!' ~, ;.~,~
I

.

>;\

During the 5 weeks ended June 20,
weekly reporting member banks in

~j ::~ ~~~:~~~~~:i~~:u~~:~i:~:o:~;~e~

.•

~,..."" . .....,.
men ted with pro ceeds from additional borrowings, to meet deposit withdrawals and build up
cash accounts. Gross loans were reduced $13,842,000; this
decline featured a reduction of S9,775,000 in commercial,
industrial, and agricultural loans and a $7,090,000 decrease
in real·estate loans. Loans to banks declined 81,685,000.
Loans to fin ance securities transactions rose $4,240,000, however, and the residual category "all other loans" increased
$4,68,000.

Investmen t liquidation during the period was concentrated
in Treasury bills and notes, as these investments declined
$12,120,000 and $16,860,000, respectively. Holdings of nonGovernment securities were reduced 52,991,000, and Governmen t bonds declined $415,000. Reporting banks added
$2,050,000 to th ei r holdings of Treasury certificates of
indebtedness.
Deposit withdrawals amounted to $22,408,000 during the
5-week period, representing a $35,585,000 decline in demand
deposit balances and a $13,177,000 increase in time accounts.
Individuals and businesses increased their holdings of both
demand and time balances, but in the demand deposit category, the increase was more than offset by the withdrawals
of other depositors - principally governments.

108

MONTHLY BUSINESS REVIEW
CONDITION STATISTICS OF WEEKLY REPORTING
MEMBER BANKS IN LEADING CITIES

CHANGES IN FACTORS AFFECTING MEMBER BANK RESERVE BALANCES
Eleventh federal Reserve District

Eleventh Federal Reserve District

(In thousands o f dollars)

{In thousands of dollars}
CHANGEl
Ilem

June 20,

June 22,

1956

1955

May 16,
1956

20,435
120,629
192,2 13
14,030
493,599

$1,539,936
1,512,306
27,630
21,733
128,543
209,847
13,850
579,804

ASSETS
Commercial, industrial, and agricultural loons ••• $1,530,161
Commercial and induslrio lloons l , •••• ••• • ••
1,501,479
Agricultural 100ns 1 ••••••••• ••••••••••••••
28.682
loans to brokers and dealers in securities •• .• ••
23.112
Other loam for purchasing or carrying securities.
131,404
Real-eslate loans ••••••••••••••••.••..•••••
202,757
Loons to bonks •••••.•.• • ...••.. •••••••••••
12,165
All other loans •••••••• •• •••••••• ••.•.•••••
580,272

Gron loans •••••.. • •.• ..• •.. • •••••.••.
Less reserves and unallocated charge-oft's ••

2,479,871
32,242

2,288,243
23,352

2,493,713
31,243

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

2,447,629

2,264,891

2,462,470

U. S. Treasury bills •• • •• ••••.••.•.•••••••• •
U. S. Treasury certiAcates of indebtedness ••••••
U. S. Treasury notes •••••••••••.. . .• ... •..•
U. S. Go.... mment bonds (inc. gtd. obligations) ...
Other securities ••••••••••••••••• . • •. . • ••••

24,817
40,825
226,971
809, 517
237,185

75,452
29,989
282,025
8",450
247,001

36,937
38,775
243.831
809,932
240.176

Total in ...estmenb • • .•.••...•.••• •••••• •••
Cosh items in process of collection ••••••• • ••.•
Balances with bonks in the United States . • •••••
Balances with banks in foreign countries .••••••
Currency and coin ••••••••••••••••••• . ••..•
R.eserves with Federal Reserve Bank ••••••••. •
Other Quets •••••.•••••••••.••••• •.••••• . •

1,339,315
402,698
489,840
1,60 1
46,369
541,684
131,269

1,478,917
360,378
447,982
1,556
46,2 89
567,504
119,095

1,369,651
429.0 81
433,705
1,823
44,317
535 ,710
133,970

TOTAL ASSETS ••• • ••• • •••••••••••••••

5,400.405

5,286,612

5,410,727

LIABILITIES AND CAPrT AL
Demond deposits
Individuals, partnerships, and corporationt ....
United Stotet Go...emmenl ••••••••••••.•..
States and political subdivlslont • •• •••• •. •• •
Banks in the United States .•••••••.• . •.• ••
Bonkt In foreign countriet • . •.•. ••••• • , •• • •
Certifled cnd officers' checks, elc • .•••••••••

2.824,982
97,571
162,753
843,979
15,192
59.121

2,835,309
84,039
179,878
854,184
18,679
66, 131

2,775,569
114,9 16
197,58 1
844,924
16,923
89,270

4,003,598
----

----

4.038,220

4,039,183

723,455
12,146
452
136,396
2,405

658,968
12,462
451
122,184
1,785

712,559
12,229
452
135,632
805

Total demand deposits •••••• • ••••••••••
nme deposits
Indlvldua lt, partnerships, and corporations • •• •
United States Government ••••••••••••••••
Postal savings • •• ••• • ••• •• .•. •••••••••••
States and political subdlvi5ions • •• •••.•••• •
Banks in the U. S. and foreign countries ••••••

------795,850
861,677

Total limo deposits ••••••••••••••.•••••

874,854

T0101 deposits •••• • ••••••.••• . ••• • • •
8i11s payable, rediscounts, etc ••••••••••.••• ••
All other liabilities •.•••••• • ••••••••.•••••• •
Total capitol accounts •• ••• •• ••••••••. ••..••

4,878,452
53,700
49,411
418,842

4,834,070
29,900
44,005
378,637

4,900,860
35,500
56,455
417,912

TOTAL lIA81l1TIES AND CAPITAL... •• •••

5,400,405

5,286,612

5.410,727

1 Prior to January 4, 1956, agricultural loons we re not reported separately. Comparab le
year-earlier figures will be shown as they become o't'ailable.

Daily average gross demand deposits at member banks in
the District declined $240,360,000 to a level of $7,132,519,000
in May. About three·fifths of !.he decline occurred at reserve
city banks, Daily average time deposits, however, rose $7,065,·
000 above the April level, as a small decline at reserve city
banks was more th an olIset by an increase at country banks.
Average gross demand deposits in May were $108,749,000
GROSS DEMAND AND TIME DEPOSITS OF MEMBER BANKS
Elevenln Federal Reserve District
(Average. of doily figUres. In thousand, of dollarsJ

COMBINED TOTAL
Dote

G ross
demand

Time

RESERVE CITY BANKS
Gross
demand

nme

COUNTRY BANKS
Gross
demand

nme

May 1954 •••• $6,752,376 $1,073,865 $3,263,439 $599,299 53,488,937 $474,566
May 1955 •••• 7,241,268 1,226,177 3,541,867 704,826 3,699,401 521 ,35 1
Jon. 1956 •••• 7 ,592,370 1,320,779 3,668,786 763,407 3,923,584 557,372
Feb. 1956 .... 7,257,906 1,333,369 3,464,715 767,155 3,793,191 566,214
March 1956.•• 7,281,9.49 1,342 •.450 3,528,707 762,057 3,753,242 580,393
April 1956 •••• 7,372,879 1,355,993 3,603.370 766,864 3,769,509 589,129
May 1956 •••• 7,132,519 1,363,058 3,.454,927 766,439 3,677,592 596,619

5 weeks ended
June 20, 1956
FACTORS
Federal R.eserve credit-local •.•••....••.••••• . •
Interdislrict commercial and flnancial transactions •• ,
Treosury operations •••••.•. . •.• •••.•• ••••••• . .
Currency transactions ••••••. •..•.. ..•.. ••••••••
Other deposits at Federal Reserve Sonk •• . •••••••
Other Federal Reser ... e accounts ••• . • . • ...••• ••••
RESERVE 8ALANCES
June 20, 1956 •••.•••..•• . •••• •
May 16, 1956 •••• • .•.• •.• .. •.•

Dec. 28, 1955June 20, 1956

-$ 7,706
60,561
+ 92,379
9,963
17
+
115

+$ 22,387
655,795
+ 572,493
+
50,784
40
+
6,905

+$14,281

-$

+

3,266

5943,794
$929,513

I Sign of change indicates effect on reserve balances.

below May 1955, while average time deposits exceeded the
year.earlier level by $136,881,000.
Member banks in the District gained $14.,281,000 of re·
serves during the 5 weeks ended June 20, bringing reserve
balances to a total of $943,794,000, The largest reserve con·
tribution durin g the period stemmed from Treasury opera·
tions, which added $92,379,000, while the most important
reserve drain resulted from a $60,561,000 excess of payments
over receipts in connection with interdistrict commercial and
financial transactions. Currency transactions and a contrac·
tion of local Federal Reserve credit absorbed smaller amounts
of reserve funds. Since the end of 1955, Treasury operations
have added 5572,493,000 to reserve balances, while settlement
for interdistrict commercial and financial transactions has
absorbed $655,795,000,
Member bank reserve balan ces averaged $984,053,000 in
May, representing a decline of $22,148,000 from the previous
month . Reserve city banks and country banks shared about
equally in the decline. Required reserves declined by a smaller
amount, causing a $12,654.,000 reduction in excess reserves
to $49,765,000. Reflecting a tightening of reserve pressures
CONDITION STATISTICS OF ALL MEMBER BANKS
Eleventh Federal Reserve District
(In millions of dollon)

Item

May 30,
1956

May 25,
1955

April2S,
1956

ASSETS
loans and discounts ••.••••.•.•.. .• •..•. • ••••••
United States Governme nt obligations •..•••••••••
Other securitie5 • •.•...•••.••• . •... •...••.• • ••
Reserves with Federal Reserve Sank •••••••••••.•
Cosh in vault e ••••• .••..•• • .. ••••••••••••••.•
Balances with banks in the United Stoles ••.•..••••
Salances with banks in foreign countries e ••••••.••
Cosh item5 in proce ss of collection .•• .• ••..••• •. .
Other auehe •. • . • . •• .•••. •••• . •••• .• •••••.•

53,935
2,276
575
909
92
858
2
327
190

$3,558
2,502
548
968
127
960
2
376
169

$3,915
2,298
573
971
119
1,009
2
442
198

TOTAL ASSETSe •••. .••••••••• . •••••••••••• •

9,164

9,210

9,527

LIABIlITIES AND CAPITAL
Demond deposits of bonks •••...•........••••••
Other demand depo,i ts ••••••••• , • .•....•.••••
Time deposits ••••..•• .•.•.. .. •.• , •• . •••• •••.•

881
6,081
1,362

980
6,275
1,223

1,063
6.252
1,359

Total deposits ..•••...•• . •••.••••••.. • •• , ••
Sorrowings e •......•..••.•...•.••••..••••.•.•
Other liabilities e .••••••••.•.••••.•• • •.•.••...
Total capital accounts e •. ... • .. ••• .•.••••.•.•. •

8,324
54
69
717

8,.478
24
57
651

8,674
76
70
707

TOTAL lIA81l1TIES AND CAPITAL ACCOUNTse ••

9,164

9,210

9,527

e-Estimated .

109

MONTHLY BUSINESS REVIEW
RESERVE POSITIONS Of MEMBER BANKS

COND1T10N Of THE fEDERAL RESERVE BANK Of DALLAS

Eleventh Federol Reserve District

lin thousands of dolloul

(Averages of dailY figules , In thousands of doltars)

June 20.
Item

May
1956

Item

RESERVE CITY BANKS
Reserve bolances • .. .......... .. ..
Required reserves ••• • •••..••... . •

Excess reserve s . ............ .. ...
Borrowings . ......... . .....••....
Free reserves ••• .• • •.••••••••••••

May
1955

April

1956

570,245
556,749
13,496
6,760
6,736

554,801
545,862
8,939
20,272
-11,333

440,504
396,799
43.705
5,863
37,842

443,293

451,400
397,920
53,480

984,053
934,288
49,765
53,306
-3,541

1,013,538
944,544
60,994
9,024
59,170

$543,549
537,489
6,060
47,443
-41,383

June 22,

1955

1956

Total gold certificate reserves . . •......•.... $ 711,449
o;scounts for member bQnks .......... . .....
41,270
Other discounts and od",onces .•.... , .. ....•
0
933,651
U. S. Government s&Cut'I'i.s ........... . .... .
974,921
Total earning assets .................... • •
943,794
Me mber bank reserve deposits .•..•.... .. • •
691,331
Federal Reserve noles in ac'uQI circulation .•.•

May 16,

1956

$ 731,083 $ 701 ,102
10,950
36,950
2,507
0
944,461
923,048
957,918
959,998
960,403
929,513
601,656
706,012

COUNTRY BANKS
Reserve balances • •• • •. • • • •••. • •• •
Required reserves ••.••• • ••• • .• • .•

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

Free reserves ......... ... ........

MEMOER OANKS
Aesente balances ......... . • . . ....
Required r(l,er",es .........•.... ..
Excess re'erves ........ . ........ •
Borrowings •.................. ...
Free reserves .... ................

387,795
55,4 98
3,064
52,434

2,187

51,293
1,006,201
943,782
62.419
22.459
39,960

during the month, borrowings rose to an average of
853,306,000, which is more than double the April borrowings.
As a result of increased borrowings and smaller excess reserve
balances, the free reserve position of member banks (excess
reserves minus borrowings) moved from a positive level of
$39,960,000 in April to a negative level in May, when net
borrowed reserves averaged $3,541,000.
Country banks continued to maintain fairly comfortable
reserve posilions, holding almost 90 percent of the excess
reserves while accounting for less than II percent of average
borrowings, evertheless, the free reserve position of these
banks showed some decline during the month, with free
BANK DEBITS, END-Of-MONTH DEPOSITS
AND ANNUAL RATE Of TURNOVER Of DEPOSITS

reserves of $37,842,000 reflecting a decline of $13,451,000
from the April average, The reserve position of reserve city
banks was considerably tighter, and net borrowed reserves
of $41,383,000 in May represented an increase of $30,050,000
over the previous month_
Reflecting System purchases of Treasury bills in late May
and early June, this bank's holdings of Government securities
rose SI0,603,000 between May 16 and June 20, Discounts
for member banks increased 34,320,000. As a result of
changes in these two asset categories, earning assets rose
$14,923,000 to a total of $974,921,000. Gold certificate reserves increased $10,267,000. On June 20, this bank's Federal
Reserve notes in actual circulation amounted to $691,331,000,
represenling an increase of $9,675,000 since May 16.
Bank debits during May rose in 22 of the District's 24
reporting centers, with Shreveport and Houston showing the
largest gains. For all 24 cities, bank debits in May exceeded
those in April by 8 percent; May debits this year exceeded
those in 1955 by 12 percent. The annual rate of deposit turnover was 21.1 in May, compared with 19.4 in April and 19,1
in May 1955.

(Amounts in thousands of dollars)
OEBITSl

Area

May
1956

ARIZONA
Tucson .......•..... . $ 160,735
LOUISIANA
Monroe ..• .. ........
61,948
Shre"'eport ....... • . .
285,299
NEW MEXICO
Roswell ............ .
27,252
TEXAS
Abilene .. • . . .•. . ... .
76,546
Amarillo ............
160,255
Austin ..... . ... . ....
155,079
136,539
aeoumont . .. . .......
Corpus Christi ........
167,507
Corsicana .......... .
14,659
2,126,432
Dallos .. • .. . ....... .
EI Poso .......... . ..
248,210
Fort Worth ..........
654,153
Galveston .......... .
84,599
2,349,713
Houston ...•..... . . .
24,454
laredo ... . • .•..... .
lubbock ... . ........
120,359
57,695
Port Arthur .. ........
Son Angelo .... . ....
45,310
512,409
Son Antonio . ........
19,870
Texarkana s ........ .
Tyler .............. .
75,431
WQco ..............
89,926
103,060
Wichita Fans . . .. .. ..

~

TotQI-24 cities ........ $7,757,440

NEW MEMBER BANKS

DEPOSITS2

Percentage
change from
Moy

April

1955 1956

Annual rate oftumo",er
May 31,

May

195 6

May

April

1956 1955 1956

22

-7

$ 106,580

lB.2

16.0

20.0

8
21

8
23

46,597
192,184

15.7
18.2

16.0
15.8

14.4
15.6

2

26,914

12.1

11.5

12.0

6
6
2
2
'5
-5
5
6
2
11

55,178
108,431
114,227
21,343
950,650
130,985
354,008
67,248

14

1,190,909

16.4
17.3
15.8
15.6
19.1
8.2
26.3
22.2
21.8
14.9
23.4
14.9
16.2
15.7
12.2
17.9
13.9
15.6
16.6
11.6

14.2
16.6
14.6
15.5
18.2
7.3
24.0
20.0
20.0
13.3
20.3
14.9
14.6
16.2
17.0
12.0
14.0
14.5
10.7

11.4
15.8
13.1
14.6
15.5
11.2

21.1

19.1

19.4

10
0
9
6
4
11
8
15
9
9
20
4
0
0
3
0
11
9
10

1
2
4
5
12
4
6
6
3

12

8

14

101 ,622
103,947

19,554
86,942
4 2,699
4 4,146

338,385
16,015
57,574
64,081

103,453
Y

$4,344,472

11.4

15.5

16.2
15.1
14.8

18.2
8.4
24.7
20.9

2 1.5
13.3
20.5
14.5

15.5
15.0

I Dob;h '0 domo,d do:,o.;, 0«00" . 01 ;,d;,;dool., po,tn o"l>;p., DOd ,0' po,oUo", o,d
Qf states and politicQI sub ivisions.
2 Demand deposit QC(otlnfl of indi",jduol,. partne rships, and corporatJons ond of stQtes
and political subdi",isions.
, These flgures inc:lude only one bQnk in Texarkana, TexQ s. Total debits for all banks in
Texarkana, TexQs·ArkansQs, including two banks located in the Eighth Dhtrld, amounted to
$42,409,000 for the montfl of May 1956.

The First National Bank of Stafford, Stafford, Texas,
a newly organized institution located in the territory
served by the Houston Branch of the Federal Reserve
Bank of Dallas, opened lor business June 1, 1956, as a
member of the Federal Reserve System, The new bank
Iw.s capital of $100,000, surplus of $100,000, and undivided profits of $50,000. The officers are: J. S_ Downs,
Chairman of the Board; A , K, Jacobs, President; W. K.
Boots Helmcamp, Executive Vice President; and August
S, Eder, Cashier,
The Montrose National Bank of Houston, Houston,
Texas, a newly organized institution located in the territory served by the Houston Branch of the Federal
Reserve Bank 0/ Dallas, opened for business June 2,
1956, as a member of the Federal Reserve System. The
new bank has capital of $500,000, surplus of $300,.
000, and undivided profits of $200,000. The officers
are: L. E. Cowling, President and Chairman of the
Board; George R. Traylor, Executive Vice President;
Joseph N. Mullan, Vice President; M, H. Sorrell, Vice
President; Richard M, Cobb, Cashier; and B, E.
Sweeton, Jr" Assistant Cashier.

MONTHLY BUSINESS REVIEW

110

The Nation's oil industry continued to adjustto the changing demand
and stock situation stemming from
the close of the winter heating season_
However, the adjustment has been
more prolonged than usual and relatively mild thus far
because of recurring cold weather in the northern part of
the country_ Most of the current adjustments in the industry
appear to be tied to the high level of imports, as well as to
recent gains in crude runs to refinery stills.
Crude oil production in the District averaged 3,319,000
barrels per day during the first half of June, or 1 percent
lower than in the previous month but 8 percent more than
in June last year. Production allowables in Texas, having
been cut back for 2 months, were increased approximately
71,000 barrels per day for the month of July. It has been
customary during the past 2 years to reduce allowables during
the summer months_ In the Nation, crude production averaged
7,032,000 barrels per day at mid-J line, which is unchanged
from the May figure but is 6 percent above the average in
June 1955.
Supplementing crude production has been a rather sharp
increase in imports, which averaged 1,313,000 barrels per
day in the 5 weeks ended June 15. This volume is 2 percent
higher than in the preceding 5-week period and 13 percent
above the comparable average a year earlier.
Crude oil stocks declined slightly during the first half of
June and on June 16 totaled 274,075,000 barrels, or 1 percent below the total at the close of May and the level on June
18, 1955_ In contrast to declining crude oil production, crude
runs to refinery stills in the District during the first half of
June, averaging 2,428,000 barrels per day, were up 1 percent
from May and 12 percent from June last year. In the Nation,
crude runs averaged 7,996,000 barrels per day, which is 2 percent above the previous month and 7 percent above a year ago.
Stocks of the four major refined products increased 2 percent from the end of May and on June 15 totaled 327,595,000
barrels. However, this total is 1 percent below the level on
June 17, 1955.
The demand for the four major products decreased substantially during the 5 weeks ended June 15, with sharp

declines in kerosene and distillate and residual fuel oil demand and a small increase in gasoline demand, Compared
with a year earlier, only residual fuel oil demand was lower.
Nonagricultural employment in
the five states lying wholly or partly
within the District continued its seasonal upswing during May to reach
a level of 4,051,300, which is 11,900
more than in April and 125,900 above the level of May 1955.
Manufacturing employment renewed its upward climb to
account for the largest month-to-month gain. The May total
of 754.,500 workers reAected an increase of 4,000 from the
previous month, Manufacturing employment continued to
be stimulated by Government orders for aircraft, the building
of offshore drilling barges, and the manufacture of oil well
machinery, Settlement of a dispute in the chemical industry
and seasonal increases in food-processing activity added to
the manufacturing employment gain.
Construction accounted for 3,300 of the month-to-month
gain in nonmanufacturing employment. Settlement of labormanagement disputes in the gulf coast area returned some
construction workers to their jobs during May, Another dispute in the construction industry was reported in the San
Antonio area during early May, but workers idled by this
dispute returned to their jobs by May 15. Additional construction workers in the gulf coast area are reported to have
returned to their jobs since the middle of June.
Unemployment continued to decline in May, as increased
job openings more than offset additions to the labor force.
In Texas, the only District state for which data are available,
unemployment declined from 108,700 in April to 108,100 in
May.
The value of construction contracts awarded in the District during May totaled $215,511,000, a record high. This
amount reflects gains of 17 percent from April and 28 percent
from May 1955. Nonresidential construction awards, with
increases of 38 percent from April and 60 percent from a year
earlier, more than oITset the downward movement of residential awards, which declined 7 percent from April and
4 percent from a year earlier,
NONAGRICULTURAL EMPLOYMENT
Five Southwestern States1

CRUDE OIL, DAILY AVERAGE PRODUCTION

Percent change
May 1956 from

Number of persons

(In thousands of barrel s)
May
Type of employment

19568

May
1955r

April

May

1956r

1955

April
1956

Change from

May

May

1956 1

May

April

Total nonagricultural
wage end salary workers .•

1955 2

1956 1

1955

1956

Manufacturing .. ........ .

ELEVENTH DISTRICT ••••.••• 3,342.3
Texos . . . • ... • ...•.... . . 2,977.2
Gulf Coost •..•.• • • . .. •
606 .2
West Texas ..•...•.... 1,233.3
Eo:.t Telll:os {proper) •••• •
209.8
Panhandle ••••.•.• • •. •
94.2
Rest of State .. .......•
831.7
Southeastern New MeJIIlco ••
241.2
Northern louisiana . • •. . •..
123.9
OUTSIDE elEVENTH DISTRICT. 3,714.4
UNITED STATES._"""._" 7,056.7

3,174.2
2,636.6
609.5
1,112.9
215.3
90.0
809.1
217.2
120.2
3,502.7
6,676.9

3,396.6
3,029.6
612.5
1,253.2
214.7
95.0
654.4
248.1
12Q.9
3,744.6
7,143.4

166.1
140.4
-1.3
12Q.4
-5.5
4.2
22.6
24.0
3.7
211.7
379.6

-56.5
-52.6
-4.3
-19.9
-4.9
-.8
-22.7
-6.9
3.0
-30.2
-86.7

Area

SOURCES:

I

April

Estimated from American Petroleum In5titute weekly reports.

I United Stotes Bureau of Mines.

4,051,300
754,500
Nonmanufccfuring •••••••• 3,296,800
Mining . • . . . . . . . . . . . . .
251,900
Construction . ..........
281,600

3.2
4.1
3.0
3.3
1.8

0.3

276,700

4,039,.toO
750,500
3,288,900
251,600
276,300

387,400
1,008,100
164,000
.461,000
659,200

394,900
1,029,700
171,000
.473,000
690,400

1.9
2.5
4.8
2.8
4.6

,0
.4
.5
.2
-.2

3,925,400
725,100
3,200,300
2.43,900

.5
.2
.1
1.2

Transportation and public

utilities .•. . ••• ... . . •

Trade .•.•.••.•... .. , .
Finance.,., • •. •. " ... .
Service ...... .. . , . . . . .
Government . . . ....... •

394,900
1,033,500
171,800
.473,800
689,300

1 Arizona, Louisiana, New Mexico, Oklahoma, and Texas.
e-Estimated.
r-Revised.
SOURCES: Slate employment agencies.
Federal Reserve Bank of Dallas,

MONTHLY BUSINESS REVIEW
VALUE OF CONSTRUCTION CONTRACTS AWARDED
(In thousands of dollars)

Area and type

May
1956

May
1955

January-May
April

1956

ElEVENTH DISTRICT... $
Residential .• .•••••
AU other ••...•...•

215,511 $ 168,169 $ 183,657
85,82.4
80,229
83,665
81,,504
135,282
97,833
UNITED STATES' •.•.. 2,1,79775 2.185,065 2,421,1,97
R.lid"nlial .. ..... . 1,129.262
1,011,310 1,144,160
All other •......... 1,350,513 1,173,755 1,277,337

1956

$

1955

949,471 $ 732,682
411,098
350,927
381,755
538,373
11.001,144 9,708,562
4,872,450 4,486.626
6,128,694 5,221,936

I 37 stoles east of the Rocky Mountains.
SOURCE: F. W. Dod". Corporation.

In the Nation the value of construction contract awards
continued an upward seasonal trend to show a 2-percent gain
over April and a year-to-year increase of 14 percent. Although
residential a wards declined 1 percent from the pre v i 0 us
month, they set a record for May and were 12 percent above
the level of a year ago. "All other" awards increased 6 percent
over the preceding month and were 15 percent above the
level in May 1955,

111

Cumulative construction awards during the first 5 months
of 1956 were 30 percent higher than in the corresponding
period of last year in the District and 13 percent higher in
the Nation. "All other" awards continued to lead the gains,
wiLh increases of 41 percent in the District and 17 percent
in the Nation. Cumulative residential awards showed a yearto-year gain of 17 percent in the District, compared with an
increase of only 9 percent in the Nation_
Expansion of manufacturing facilities in the District has
continued at a high rate this year. During the past few weeks,
construction was begun on expanded cement production
facilities in the Houston area; an aircraft parts manufacturing firm began operation in the Dallas-Fort Worth area; a
plant to manufacture home heating and cooling equipment
neared completion at Tyler, Texas; and plans were announced
for a new $2,000,000 electric-powered sawmill in east Texas.
BUILDING PERMITS
5 months 1956

May 1956

DOMESTIC CONSUMPTION AND STOCKS OF conON

Area

Number

ARIZONA

(Bolos)

TUClan ...•....

LOUISIANA
August-April

Aprit

Area

1956 1

April

1955

March
1956'

This se050n lost season

CONSUMPnON
Tolal
12,122
10,447
102,075
14,281
110,662
U. S. mills ...........
721,577
695,188
916,396 7,071,573 6,722,182
Dally average
Texas mills ..........
522
606
571
567
523
U. S. mills ....... , ...
34,759
36,079
36,656
36,264
34,473
STOCKS, U.S.-End of period
Consuming establishments. 1,585,268 1,811,937 1,730,102
Public storage and
compre~5 .......... 14,681,596 11,223,126 15,1,62,034
Texas mills ••••••••••

1 Fovrweeks ended April 28.
, Five weeks ended March 31.
SOURCE: United State. Bureau of the Census.

Percentage
change In
...aluatlon
from 5
month,

Percentage
change In
va luaUon from

Shr..... port .•.•
TEXAS
Abilene .•.•..•
Amarillo ......
Austin ........
Beaumon' .....
Corpus ChrIsH..
DaUos ••••••••

EI Paso .....••
Fort Worth ....
Galveston ..•••
Houston ...•••
Lubbock ••••••
Port Arthur .•.•
San Antonio ..•
Waco .•.....•
Wichita Falls ..

Valuation

May April
1955 1956 Number

523 $ 2,292,668 138
467
185
234
21,5
330
252
2,4"8
515
787
113
980
278
180
1,785
315
210

60

2,212

11,909,974

-28

951
1,100
1,328
1,462
1,755
10,622
2,075
3,501
487
4,766
1,222
909
9,059
1,430
687

11,791,037
8,773,263
22,226,589
5,810,043
9,383,310
72,398,619
12,824,813
18,807,289
2,575,461
68,100,341
10,667.728
2,046,120
30,076,027
7,334,891
3,865,300

46
-25
21
39
-33
-7
-20
-25
101,
-3
-16
-8
18
15
-31

1,5,665

$306,605,127

-4

2,099

1,615,468 -19 -32

Tolal- 17 cities •. 9,81,7 $57,692,101

47
33
-28
-7
-26 -43
-2
-3
5
-19
13
39
2
23
62
36
_21 -80
-37 -27
10
95
12
5
-8 -30
33 _51
59
-6
-6

-1

1955

8,014,322

132

2,004,728
1,742,070
3,151,600
817,169
1,555,612
14,993,106
2,732,234
5,699,007
257,281
11,181,138
3,355,736
A05,704
3,601,328
1,148,752
1,138,500

Valuation

$