Full text of Review (Federal Reserve Bank of Dallas) : June 1974

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Business Review

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-

Cycles in Dallas
Differ from the Nation
Bank StructureMultibank Holding Companies Expand
With New Mexico's Economic Growth

This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org)

lIome Building-

CYcles in Dallas
Differ from the Nation
........
NeWh
.
on f ome constructIOn has been
ac~~. ~he. most volatile economic
lia/t1es lD the United States.
CYCI~g .gone through six complete
tial s SlDce World War II, residenenthonstruction is now in its sevof n Postwar decline. And in terms
currUInber of housing starts, the
Eent decline is the most severe.
th :lCpansion and contraction in
in n~Inber of homes constructed
a
the n ~s County closely followed
prev.ahonal pattern in the two
lates~o~s b~ilding cycles. But in the
drop i echn~, construction began
it did. ng off lD Dallas long before
effect In the nation as a whole. The
COtnp:t~f.subsidized housing, price
and In ItlOn by apartment owners,
Vent ~nagement of new home inin a ~rl~ by builders have resulted
bUil/c cal pattern in Dallas home
natio Ing different from that of the
n at large.

n

~ort
C gage flows

Onstru .
a cYcl. ~hon of new houses follows
ferentl~a movement somewhat difactiVit rom changes in business
ness c Yfverall. In postwar busihousU;C es,. the number of new
g
to decli U~ltS started has tended
dUctio ~e lD advance of the re'l'he ren In total national output.
tendedCtery in construction has
tUrn in bOp.recede the general upCOnd. ~SlDess activity.
~re lar Ihons in mortgage markets
Itatingg:~ responsible for precipWhen
IS Pattern of activity.
strOng OVerall economic activity is
crease est, demand for credit ins
caUsin :elative to the supply,
to rise~ hort-term interest rates
In In
gage lend oney markets. MortPete Withers typically cannot comand the lthe higher market yields,
II
y ose deposits as investors
lIsilless It .
eVlew I June 1974

put their money into money market securities-a process called
disintermediation. With growth in
deposits slowing, or deposits even
declining, mortgage lenders must
cut back on new loans either by
offering less liberal credit terms
or by refusing loan applications
altogether.

When overall business activity
slows, the process is reversed. Interest rates in money markets decline, and deposits at mortgage
lending institutions expand. As
mortgage funds become more available, families reenter the home
market and builders respond by
starting more home construction.
Downturns in building

Conditions in mortgage markets are largely responsible
for precipitating patterns of
construction activity.

Because most families buying
homes must finance the largest
part of the purchase, home buying
suffers when these conditions develop. Builders must eventually
respond to the decline in sales by
slowing starts on new homes.

This was the general sequence of
events in Dallas and the nation
in the home building declines of
1966-67 and 1969-70. Net new savings (the difference between new
deposits and withdrawals) received by major mortgage lenders
dropped rapidly before overall
business activity became sluggish
in 1966 and 1969.
The slower deposit growth made
mortgage funds scarce. Interest
rates charged by lenders rose, and

1

Reduced deposit inflows at mortgage lenders . ..
MILLION DOLLARS

2 ,400

..

---~
, :o;;7
. '- - - - - - - :
:::':'
.':,'7
..•.':!
.: '':-::'
.•.- - - - - - - - - - - -

~J~TE:

1,800 -

area~ :~~·~~

Shaded
periods of general
economic weakness .

NET NEW SAVINGS
RECEIVED BY
INSURED S&L 'S
IN UNITED STATES

1,200 -

(7 -MONTH MOVING AVERAGE
CALCULATED FROM
SEASONALLY ADJUSTED DATA)

MILLION DOLLARS

32----~:~
·; ..~
o --------~~---------------------

1.,; .j·.~r.

:;'!,

24 -

NET NEW SAVINGS
RECEIVED BY
INSURED S&L 'S
IN DALLAS

'. , "

,',' : ,j.

\!!:.

16 -

: ~:

,it.;]-

:',

-3

I

JUNE

'65

I

I
' 66

----------------~

(7-MONTH MOVING AVERAGE
CALCULATED FROM
SEASONALLY ADJUSTED DATA)

0---

I

I
' 67

' 68

' 69

' 70

'71

SOURCES: Federal Home Loan Bank Board
Federal Home Loan Bank of Little Rock
Federal Reserve Bank of Dallas

2

the time allotted for repayment
was shortened. Both changes increased the average size of mortgage payments on new loans. At
the same time, the portion of the
selling price of homes that could
be financed declined, requiring
higher downpayments.
As these changes in credit conditions discouraged many prospective buyers from entering the hO~~;
ing market, fewer homes were bw>
in Dallas and in the nation. FroIll
peak to trough in the 1966-67 ~e­
cline, the number of single-fan;ulY
units authorized for constructIon
(with seasonal and irregular fiuc~
tuations removed) fell 27 perc~nb
in Dallas County, compared WIt
29 percent nationwide.
In the decline of 19'69-70, the r
percentage reductions in both Ill: '
kets were again similar, althoug 67
not quite as close as in the 1966period. The similarity in the pattern of new home construction,
however, has not been carried
through to the present period.

'72

'73

'74

The similarity in the patter~11
of new home construction I
Dallas and in the nation haS
not been carried through to
the present period.

-------------~
on'

Until early 1973, favorable c
ditions in mortgage marke~ aI- e~
lowed a vigorous expansion In n d
home construction. In DallaS
the nation, new deposits had~g
gun growing at mortgage len 0
institutions before the 1969- ~gllge
recession was over. With mO~le fot
terms becoming more fav ora 1
consumers, the average IJ.lontrl~e.llS
payment on new conventlona nt
began leveling off. DownpayIllell
requirements actually showe~'l
declining trend from 1970 un 1
early 1973.
. .ttl'
By early 1973, lending Inst~ts
tions were again losing depoSl

;n

-~1 construction of homes began
do aU . In Dallas County, the slowB wt n Was even more pronounced.
U
th t What was extraordinary was
111 a the Dallas decline began 15
Onths earlier than the nation's.
SpeCial factors in Dallas
Sever If
tio ~ actors other than condiute~ In mortgage markets contribide t ~o the earlier decline in resC n lal construction in Dallas
thOunty. One was the situation in
ap: ~arket for apartments. New
the ~:ents were added rapidly in
ball 60's as the population of
the ~ County expanded. But by
bUilt t~O's, more units had been
Sorbed an could be readily abcanc . In January 1972, the vacOIn Yrate had risen to 18 percent,
nat·pared with 8 percent for the
IOn at large.

Rent .
----------------~--1972 In Dallas throughout

. . . make buying a home more expensive .. .
THOUSAND DOLLARS

11.5

.::.f.

9.5 -

7.5 -

AVERAGE DOWNPAvMENT
ON NEW HOME PURCHASES

" :','
' I,"

', '

3 .5

(S-MONTH MOVING AVERAGE)

.~ (,:

~--~--~--_r--_r--~~~r_--~--,_--_r--_r-----

NOTE: Calculated as P(1 - Lv), where P is the price of the house and Lv Is the loan-to-value
ratio for conventional loans.
DOLLARS

270

230 -

S

fa"o and 1973 compared
new r~bly with the cost of
omeownership.

--------------------1'0 att ract tenants, some landlords
resulteVen lowered rents. And as a
1972 ,rents in Dallas throughout
\\lith t~nd 1973 compared favorably
ship I e cost of new homeownerYear',s n late 1972, for example, a
fOur c rent for a typical family of
as theost only 55 percent as much
a new average annual payment on
<\t thecsonventional mortgage loan.
Cent a ame time, rent cost 65 perfor th s mUch as homeownership
COtnP:rav~rage U.S. family. The
COunty~lVelY low rents in Dallas,
On the ad a significant impact
chased ~umber of new homes purhelPing budget-minded families,
llew h 0 reduce the number of
AnoOtlU.es bUilt in 1972 and 1973.
early doher facto.r adding to the
~as illlprnturn In Dallas housing
lllg and UlU.entation of the Housn
rban Development Act of

l

ItSUtess b

•

~eVlew

I June 1974

190 AVERAGE MONTHLY
MORTGAGE PAYMENT
ON CONVENTIONAL LOANS
FOR NEW HOUSES

150

(S-MONTH MOVING AVERAGE)

I

I
'68

'69

'70

'71

'72

'73

'74

NOTE: Calculated as [P x Lv x R(l + R)T] ..;. [(1 + R)T -1], where P is the price of the house,
Lv is the loan-to-value ratio, R is the contract rate of interest, and T is the length
of the loan.
SOURCES: Federal Home Loan Bank Board
Federal Reserve Bank of Da"as

1968. Under Section 235 of that
act, interest subsidies were established to promote homeownership
by families with modest incomes.
The number of homes started
under the program increased rapidly until 1971 and then began to
dwindle. Finally, in January 1973,
a moratorium was imposed on new
commitments for construction
under this act.

Nationwide, the number of Section 235 starts on one- to four-unit
structures declined 37 percent
from 1971 to 1972. But in Dallas
County, the number was cut nearly
in half. The drop was particularly
significant in Dallas because of
the large proportion of houses being built under this program.
In 1971, for example, housing
built under this program accounted

for 15 percent of the starts on
single-family units in the nation.
But in Dallas, the proportion w~s II
38 percent. In 1972, the proportlo.
in Dallas was still 25 percent, corn
pared with only 8 percent natio~'
wide. So, as the number of sub S\
dized houses declined, the effec
was more pronounced in Dallas.
The reaction of home builders
to changes in market conditions
~

· . . and result in fewer new homes
THOUSAND UNITS

1,100

---------,...,~-------__...,~...,....,...,---------------

1,000900800SINGLE-UNIT
HOUSING PERMITS
FOR UNITED STATES
(9-MONTH MOVING AVERAGE
OF SEASONALLY ADJUSTED DATA)

1,000 -

SINGLE-UNIT
HOUSING PERMITS
FOR DALLAS COUNTY

900 800 -

(9-MONTH
MOVING AVERAGE
OF SEASONALLY
ADJUSTED DATA)

500 400

I

I

SEPT .

'64

'65

'66

' 67

'68

'69

'70

' 71

'72

'73

'74

SOURCES : U .S . Department of Commerce
M/PF Research, Inc ., Dallas , Texas
Federal Reserve Bank of Dallas

--------------------------------------------~~
4

-..
~a~al~o played an important part

of b s.tll~guishing the recent pattern
110 Ulldi~g ~ctivity in Dallas.
go ~e buIldmg is generally cateco~ze~ as an atomistic industry
dentrlsed of many small, indepenbUillroducers. In Dallas, however,
weU ers tend to be developers as
eraras contractors, and their opLIOns are often on a large scale.
cial·arg~ bUilders, with more speare hatton in their organizations,
chan ette.r able to keep abreast of
know es m their market areas. And
tive edge of present and prospecgrea~arket conditions allows them
tion ~r control over the accumulaularo unsold homes built on spec~n. Although reliable informa-

1

l.

tion on earlier periods is hard to
obtain, Dallas builders were definitely more successful in holding
down home inventories in 1973
than builders nationwide. 1

Dallas builders were more
successful in holding down
home inventories in 1973 than
builders nationwide.

The inventory of houses under
construction or completed but unoccupied declined in Dallas County
in each of the last three quarters
of 1973, bringing the decline for
the year to about 23 percent. By

contrast, the nation's inventory increased 5 percent over that period,
and it was not until the last quarter of 1973 that builders nationwide began to reduee inventories.
This difference alone goes far in
accounting for the pace of construction in 1973 continuing faster
in the nation than in Dallas
County, even though sales were
falling in both markets. And in
combination with the declining
number of subsidized housing
starts and the high apartment vacancy rate in Dallas, it accounts
for the early and sustained drop in
local home construction.
-William R. McDonough

nt

a no n ho"
"
Usm g m ventorles m Da llas were sup plied by M/ PF Resear ch, Inc., Dallns, Texas.

"-----------------------------------------------------------New member banks

The Peoples National Bank of San Antonio, San Antonio, Texas, a newly
organized institution located in the territory served by the San Antonio Branch
of the Federal Reserve Bank of Dallas opened for business April 29, 1974, as a
rne~ber of the Federal Reserve Syste~. The new member bank opened with
capItal of $300,000, surplus of $300,000, and undivided profits of $150,000. The
Officers are: Bob G. Shirey, President; Robert B. McGivney, Jr., Vice President;
and Zygmund A. Pruski, Cashier.
:rhe Pan American National Bank of Dallas, Dallas, Texas, a newly organized
astitution located in the territory served by the Head Office of the Federal
eserve Bank of Dallas, opened for business May 2, 1974, as a member of the
Federal R eserve System. The new member bank opened with capital of $450,000,
surplus of $150,000, and undivided profits of $150,000. The officers are:
Dr.. Robert Romero, Chairman of the Board; Lance E. Golmon, President and
ehu:f Executive Officer; Roscoe L. Eoff, Vice President and Cashier; and O. C.
B eVIll, Assistant Cashier.
:rhe. Meadowbrook National Bank, Fort Worth, Texas, a newly organized
astttution located in the territory served by the Head Office of the Federal
eserve Bank of Dallas, opened for business May 20, 1974, as a member of the
Federal Reserve System. The new member hank opened with capital of $400,000,
~urplus of $400,000, and undivided profits of $200,000. The officers are: Derry B.
ulks, President, and Tommie C. Jenkins, Cashier.

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

----------------------------------------------------------

~~.llless It

.

eVlew I June 1974

5

Bank Structure-

Multibank Holding Companies Expand
With New Mexico's Economic Growth
-----------------------------------------------------------------------~
The nation's financial structure
has changed dramatically in recent
years with the rapid growth in
multibank holding companies, Expansion of these companies in such
rapidly growing unit-banking
states as Texas, Florida, and Missouri is well known, But the multibank holding company movement
has also had a substantial impact
on the banking systems in other
states,
New Mexico, for example, has
undergone a marked change in its
banking system-and with the formation of only a few holding com-

As in other states where multi- !l
bank holding companies have bee
spreading, New Mexico offers ~WOto
important ingredients conduclve
such expansion-restriction~ on
branch banking and a ~r0V:lOg eW
economic base, Branchmg -In ~ '!lMexico is allowed 'onl~ int? a,dJ~loo
ing counties or counties wlthlnh'S
miles of the main bank, Even t !f
limited branching is prohibited'~g
there are already banks operatl
in those counties"
anies
The spread of holding comP tbY
in New Mexico is also notew or II1Y
because expansion of the eco no

panies, The state had only one
multibank holding company when
the movement began taking hold
in the late 1960's, and that company had only five subsidiary
banks, By 1973, there were still
only four multibank holding companies in New Mexico, along with
23 subsidiary banks, But where
the state's one multibank holding
company had controlled little more
than a seventh of the deposits in
the state in 1967, the four holding
companies operating statewide in
1973 controlled more than half
the deposits,

---------------------------------------------------------------~
Recent growth in bank deposits in 'New Mexico has been well above the national average
PER CENT CHAN GE

21

----------------------------------------------------------------------------~
•

NEW MEXICO

B

UNITE'O STATES

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SOUR CES: Federa l De p osit Insurance Corp o rati o n
Federa l Reserve Bull etin

----------------------------------------------~
6

;eally began picking up only a few
:ars before holding companies
: arted extending their operations
r~:~~s tNhe state. Economic progth In ew Mexico was hampered
th roughout most of the 1960's by
b e narrowness of the economic
se
a: and some setbacks in primary
eas of employment.
____

B

d an~ deposits in New Mexico
hau . led from 1967 to 1973,
c elplng stimulate the holding
Olllpany movement.
____
be .
gro\Vt6~te such setbacks, income
Pro. 1~ New Mexico began iminc Vlng In the late 1960's. Gains in
gro~~e contributed to more rapid
doubl ~of bank deposits. Deposits
ing st~ from 1967 to 1973, helptno unulate the holding company
gro~:n~nt in t?at state. ~ow,
in thIn holdmg compames could
eco~rn, .contribute to the state's '
01l11C development.
l
i
o
in.
".,
gl d
compames
the onl
that s· y.company in New Mexico
tnult"bgnlficantly predates the
tnen: . ank holding company movelIead IS Western Bancorporation.
qUartered in Los Angeles,

this company holds five subsidiary
banks in New Mexico that, together, control close to 14 percent
of the bank deposits in the state.
Included in these five banks is New
Mexico's third largest bank.
The company acquired its New
Mexico subsidiaries before federal
laws governing banle holding companies were changed in 1956 to
discourage any further spread of
holding company arrangements involving more than one bank. Even
when the Bank Holding Company
Act was later amended-leading to
the rapid expansion of multibank
holding companies nationwideWestern Bancorporation was prevented from further expansion in
New Mexico by the prohibition of
acquisitions across state lines.
The other three holding companies sprang up in rapid succession as economic conditions in New
Mexico began improving toward
the end of the 1960' s. Bank Securities was approved as a multibank
holding company in 1969, First
New Mexico Bankshare Corporation in 1970, and New Mexico
Bancorporation in 1971.
Bank Securities, which headquarters in Alamogordo, started
with four banks, acquired two
more in 1970, and took on another

BANI{ HOLDING COMPANIES IN NEW MEXICO, DECEMBER 31, 1972

--------------~----------------------MlJltib k
.
F' an hOlding companies
Irst New M .
.
C
eXICO Bankshare
'Iv orporation (Albuquerque)l
estern Bancorporation
l3a~~~ Angeles, California)
(AI ecuritles, Inc.
New ~mO~Ordo) .. . . ..... . .... .
I
eXlco Bancorporatlon ,
One_b~c. k(Santa Fe) ... . .... . .. . . .
____
-n.: holding companies . . ... .

Subsidi ary banks
Percent of total
In state
Deposi ts
Banks

Number

Deposits
(Million
doll ars)

23

$1 ,118.0

8

31 .9%

50.8%

556.4

11.1

25.3

5

299.8

6.9

13.6

8

189.4

11 .1

8.6

2
6

72.3
437.0

2.8
8.3

3.3
19.8

1. FI --------~-----------------------------------------------

W~lures Includ
NO·flo.Che were ac e 910VIs Nation al Bank, Ciovls, and Grant County Bank , Sliver City,
SOUIl' etalls qu red In 1973 .
C!':s : Boa~~y ~ot add to totals because of rounding .
Feder? DGovernors, Federal Reserve System
a eposlt I nsurance Corporation

n

Il.sines"" •
s ~eVleW I June 1974

two in 1972. These eight banks,
which include the fourth largest
bank in the stat e, control nearly 9 ,
percent of the deposits.
The largest multibank holding
company in the state is First New
Mexico Bankshare Corporation,
which operates out of Albuquerque. Formed with five subsidiaries,
including the largest bank in the
state, it acquired a sixth bank in
1972. Two more banks have since
been approved for acquisition, and
the company now controls more
than a fourth of the bank deposits
in New Mexico.

The four holding companies
operating statewide in 1973
controlled more than half the
deposits.
New Mexico Bancorporation,
headquartered at Santa Fe, has
two subsidiary banks, one of which
is the fifth largest bank in the
state. Together, these subsidiaries
account for a little over 3 percent
of the deposits in the state.
The economic base
The proliferation of multibank
holding companies in New Mexicoa development that has resulted
in roughly a third of the banking
offices in the state being subsidiary
banks-both affects and is affected
by the economic base of the state.
Some basic changes, in fact, were
going on in New Mexico in the
years before multi bank holding
companies were being formed.
A sparsely populated state with
a narrow economic base, New
Mexico has depended heavily on a
few main sources of income. Tourism, for example, is a major industry in New Mexico. Nearly a third
of the earnings in the state come
from either services or trade-both
of which fluctuate seasonally with
tourist traffic. Substantial effort
7

has been made in recent years to
expand tourist facilities in New
Mexico and otherwise encourage
visitors to extend their trips to the
state. Part of this effort, however,
has been made to compensate for
cutbacks in other areas of activity.

Efforts to broaden the economic base of New Mexico
were being made even before
the formation of holding companies could be seen as a
movement.
Government spending was
sharply curtailed in the 1960's. In
New Mexico, where some 22 percent of the civilian workers are in
federal jobs, business activity was
slowed markedly. There were also
severe reductions in mining in the
late 1960's. Oil and gas production
dropped as output from aging
fields declined and major exploration efforts were concentrated
abroad. Results of these developments were markedly slower increases in income and population.
Efforts to broaden the economic
base of New Mexico were already
being made, however, even before

the formation of holding companies could be seen as a movement.
About the time Bank Securities
was being organized at Alamogordo, new light industries were
beginning to appear in the Upper
Rio Grande Valley, especially
around Albuquerque. These
plants, along with federal programs to help with the income
problems of Indians, encouraged
further expansion-as, of course, has
the more recent resurgence of mining and petroleum activity-and
income has responded accordingly.
In fact, growth in total income
in New Mexico has kept up with
that in the nation. In recent years,
the increase has been well above
the national average. Personal income in the state rose nearly a
third in 1957-62 and nearly a third
again in 1962-67. Brought to a
total advance of 77 percent for the
ten-year period, this was roughly
the same as the advance for the nation as a whole. Moreover, the five
years from 1967 to 1972 saw personal incomes in New Mexico rise
an average of 57 percent-compared
with 49 percent for the nation.
This rise in income after about
1967 has been reflected, in turn, in
a faster expansion in bank depos-

its. In the five-year period 195~6:,
deposits in New Mexico expan e
about in line with those in the . d
nation, while in the 1962-67 perlO ,
nationwide deposits increased .ts
slightly more rapidly than depoSl
in New Mexico. But in 1967-72,
the expansion in New Mexico was
more than twice as fast as in the
nation as a whole.

-------

----------------------

In 1967-72, deposits in NeW
Mexico expanded more t~a n
twice as fast as in the nation.

-----------------------

While the increase in bank deposits reflected advances in pe!sonal income, the sha~p jump l~lSO
deposits after about 1967 may
have reflected some of the changing financial conditions in NeW
Mexico. New Mexico banks h~ve
pursued more aggressive lendlng_
policies in recent years. The loan
to-deposit ratio in the state has Jl'l
risen noticeably since 1967. Fro
1962 to 1967, it remained essenXn
tially unchanged at 56 percent. e
1972, although sti1lless than th
national average, the ratio wa\he
close to 60 percent. Moreov~r, haS
ratio of cash assets to depOSIts

BANKING IN NEW MEXICO AND SELECTED UNIT-BANKING STATES
(Banking statistics for December 31, 1972)
item

Deposits (Thousand dollars)
Demand
Time ... , ..... , ... . ... . , ...
Total . , .. , . .. . , ..... .
Total loans (Thousand dollars) ...
Loan-to-deposit ratio . ... ... . .. . .
Population, 1970 . ..... . .
Percent change from 1960 . .. ..
Number of banks and branches ..
Population per banking office ..
Deposits, per capita
Demand
.. , ... , .. . . .. ,
Time ...... . . . .... . ..
Total . , . . . . , . . . . . . , .

Colorado

Wisconsin

Florida

$980,450
1,220,172
$2,200,622
$1,310,181
59.5%
1,016,000
6.8%
217
4,682

$3,094,857
2,882,076
$5,976,933
$3,880,323
64.9%
2,207,259
25.8%
330
6,689

$4,743,545
7,357,776
$12,101,321
$7,580,948
62.7%
4,417,731
11.8%
917
4,818

$9,965,871
9,747,966
$19,713,837
$10,074,054
51.1%
6,789,443
37.1%
641
10,592

$18,693,803
16,003,684
$34,697,487
$20,125,107
58.0%
11,196,730
16.9%
1,238
9,04 4

$965
1,201
$2,166

$1,402
1,306
$2,708

$1,074
1,666
$2,739

$1 ,468
1,436
$2,904

$1,670
1,429

SOURCES : Board of Governors, Federal Reserve System
Comptrol le r of the Currency
Federal Deposit Insurance Corporation
U.S. Bureau of the Census

8

----

New Mexico

Texas

$3,0~

fallen .

uf SInce 1967, further contrib~g to deposit growth.

ut the structure of banking in
. h
eXICO as also been changba~~apidlY. By 1970, the multiw { holding company movement
as Well underway in that state.
lo.t
.~ewM

in

Effects on banking
A.lth
corn oU~h the growth in holding
sig ~allIes coincided with other
ba::k. cant changes in New Mexico
itself I~g practices, the movement
nifica as aPI?arently also been sigincr nt. WhIle bank deposits have
the e sed ~tatewide, for example,
baJ ave .Increased faster at
hOld~s affiliated with multibank
1972lUg companies. At the end of
corn' banks that had been holding
two Pany subsidiaries for at least
its t~ears reported average deposoVer had more than doubled
COnt he previous five years. By
crea rast, unaffiliated banks had inof o~~d their deposits an average
Y87 percent.

h

tt

~--------------

~~ile bank deposits have in-

inc~sed statewide, they have
affil~ased faster at banks

hOI~~ted with multibank

-----

1n9 companies.

- --------------~ost
s
b
more
U SI'd'Iary banks pursued

areas e~pansive policies in several
ing r~t. nalysis of selected'operatShow ~os for December 1972
~elti~ hat of the 72 banks in New
age, h °idsUbsidiary banks, on averthe fo: more of their assets in
ness an~ ?f loans-especially busi~esUlt t Instalment loans. As a
InCOtUe !bY a~eraged more interest
\\rhich
an Independent banks
tion of~hu~llY held a larger prop~r~elat. elf assets in cash items.
the net .Ive to their total assets,
\\ras not I~Co~e of subsidiary banks
~ 00 dIfferent from that of
I'ltObert

independent banks. But as compared with operating incomes,
their operating expenses were
somewhat less. This difference
could be due to management efficiencies that allowed subsidiaries
to operate with lower wage and
salary costs relative to total assets.
Subsidiary banks, however, paid
more interest on deposits relative
to total assets.
It is not clear that these differences result from affiliation with
holding companies. It could be
that holding companies most often
acquire banks that already have
the characteristics of subsidiary
banks, such as faster deposit
growth, higher loan-to-deposit
ratios, and lower operating costs
relative to total income.
But changes in the performance
of banks resulting from holding
company affiliation cannot be detected from their balance sheets
alone. Examination of the performance of bank holding companies
in New Mexico was based, therefore, on a method similar to that
used in two previous Federal Reserve System studies. l Addressed

to the performance of multi bank
holding company subsidiaries all
across the nation, both of the
earlier studies compared operating
ratios at banks before and after
they were acquired by holding companies. Eighteen ratios were calculated to allow comparisons in the
composition of portfolios, capital,
prices charged for banking services, expenses, and profitability.
To isolate the effects of acquisition
on a bank's operation, subsidiaries
were paired with independent
banks of roughly comparable size
in the same markets.
When the current study was
conducted, there were only 72
banks in New Mexico. Since many
of those that were holding company subsidiaries had just recently
been acquired, only ten banks were
suitable for pairing. Both large
and small banks were included.
Differences in the ratios were
then compared to see if the performance of banks acquired by holding companies had changed since
their acquisition. The final variables-derived by subtracting the
value for each paired bank from
the value for the subsidiary bankwere compared for changes.
Like subsidiary banks nationwide, those in New Mexico
tended to shift out of cash
into loans, especially instalment loans.

The extent of the differences in
performance of affiliated and unaffiliated banks was rather moderate.
Examination of subsidiary banks
shows, in fact, very little difference in performance-despite their
much faster growth in deposits.
Net incomes of these banks
changed little after acquisition,
although their operating expenses

J

'l'nll ey. 7'he
,Lnwren
Ef! ceo TI' e P erformance 0/ Bani, HoldinG Companie•• Boord of Governors ot the Federal Resel-ve System. June 1967. nnd Snmuel H ,
11
ect 0/ HoldinG Company Acquiaition. on Bank P erformance. Board of Governors. February 1972

IlSilless n .
eVleW I June 1974

9

important source of coal and electricity-New Mexico could become the scene of rapid economic
development.
The same considerations that
brighten prospects for the development of its energy resources
could dim prospects for the state's
important tourist industry. With
the possibility for continued gasoline shortages and reduced recreational travel, earnings from trade
Outlook
and services could decline.
Weak growth in population and
A shift in the patterns of develthe still narrow economic base
opment that would help offset a
have combined to place constraints slowing in tourist traffic by expandon the development of financial
ing energy industries and attractresources in New Mexico, as they
ing new industries based on energy
probably will for some time to
would call for solid financial backcome. But as an important source
ing. Although this study shows relof oil and gas-and a potentially
atively little evidence that banks

tended to decline as a percentage
of total assets. And like subsidiary
banks nationwide, they tended to
shift out of cash into loans, especially instalment loans. In contrast
to the situation nationwide, however, banks acquired by multibank
holding companies in New Mexico
did not shift their investments
away from Government securities
and into municipal securities.

in New Mexico performed a great
aCdeal differently after they ~ere h re
q uired by holding compames, t e
was some tendency to devo t e more
f
funds to loans. Also, the abilit~ ~er
subsidiary banks to support hlg ke
lending limits allows them .to ~:ep
larger business loans, helpmgihese
larger loans within the state.
banks, moreover, have s~own no;
ticeable deposit growth III rec~n
years-and apparently banks ln _
general are becoming more agg res
sive in using their funds. All the~t
considerations suggest that reC e
changes in the structure of the
New Mexico 1;>anking system. are
likely to allow greater financlal ent .
support for economic developm
-Carla M. Warberg

~

---------------------------------------------New par banks
The First State Bank of Sierra County, Truth or Consequences, New Mexico, an
insured nonmember bank located in the territory served by the EI Paso Branch
of the Federal Reserve Bank of Dallas, was added to the Par List on its opening
date, April 22,· 1974. The officers are: Travis L. Waller , President, and Morris
Slavens, Cash ler.
The First Bank of Rowlett, Rowlett, Texas, an insured nonmember bank located
in the territory served by the Head Office of the Federal Reserve Bank of Dallas,
was added to the Par List on its opening date, April 26, 1974. The officers are:
Fred A. Lawing, President, and Larry Crenshaw, Cashier.
The Texoma Bank, Kingston, Oklahoma, an insured nonmember bank located in
the territory served by the Head Office of the Federal Reserve Bank of Dallas
was added to the Par List on its opening date, May 6, 1974. The officers are: '
C. Wayne Griffin, President; Mac Harden Villines, Vice President· and Billie Sue
Klepper, Cashier.
'

-------------------------------------------------~
10

--Economy Slows in First Quarter

BILLION -DOLLAR CHANGE

40

30

20

10

o
•

-10

CURRENT DOLLARS

ITil CONST ANT

DOLLARS

1972

1974

1973

National output,
disrupted mainly by
the energy shortage,
fell at an annual rate
of 6.3 percent.

p.

nCes continued to
rise, and the GNP
deflator surged at an
11.5 -percent annual
rate.

160

150

140

130

.'

.'

-...--------~~"'
"", . '
••••, WHOLESALE
PRICE INDEX
..................

",,'11111""'"

t

l

"'"

1972
SOURCE

120

(1967=100)

1973

1974

s: U.S. Department of Commerce
U.S. Department of Labor

lilts·llless 'b •

Q.evlew I June 1974

11

Research Department
Federal Reserve Bank of Dallas
Station K, Dallas, Texas 75222

Federal Reserve Bank of Dallas
June 1974

Statistical Supplement to the Business Review
...........
'l'otall
.
WeekI oans and mvestments at
enth fi,rep.orting banks in the Elevthe £ lStnct rose sharply again in
lise co ur :-veeks ended May 15. The
corn~nt~ued to center mainly in
'l'he terclal and industrial loans.
loan: ~~ngest demand for business
Whichs III came from oil companies,
their Iiapparently drew further on
finan nes of credit at area banks to
De~ expanded operations.
about .an~ for real estate loans was
tio ns ~ hne with seasonal expect atnain' dut lending to consumers ree
IlSllal C?nsiderably weaker than
flatio' WIth uncertainties over inness ~ and employment, the weakfleeted consumer loans possibly recrease dconsumer reluctance to inebt
ltecent h:
terest
Igh market rates of indeposi~pparently influenced many
at Dist ~rs to reduce their balances
Placed rc~ banks so funds could be
Ing hi hn In~estment outlets offerdOwn gb er YIelds. With deposits
on PU~chnks ~elied more than usual
tnarket t ases In the Federal funds
bllsines 0 finance the increase in
than u s lo~ns and somewhat larger
I
SUal mcrease in investments.
. n COntr t
lng in as to an overall weakensales ~~sumer demand, new car
~Pril-th:xas turned up sharply in
~lnce la t first monthly advance
b~sted r~ ~cto~er. Seasonally adlIes w gIstratlOns of new automo?\1arch en 34 percent higher than in
Sales l'~ ~Plte the gain, however,
level.lt~~lned below the April 1973
Cent fr gJStrations were off 5 perSllgges~: ~ear earlier, and dealers
sales Was .rther recovery in auto
credit conbdi~~g hampered by tight
tl0ns .
l{
eflect'
Blltner ~ng the weakness in conernand, seasonally adjusted

department store sales in the Eleventh District were off 2 percent
from mid-April to mid-May. The
decline was counter to the upward
trend since last fall, and retailers reported weakness in all categories of
sales. Because of rising prices, unit
sales fell faster than dollar sales.
Moreover, some department store
executives in the Dallas area expressed particular concern that
even with the recent opening of several major suburban stores, total
sales would continue to decline.
The labor market in the five southwestern states softened in April.
Nonagricultural employment fell,
after remaining unchanged in
March. The downturn was attributed to widespread declines in the
number of jobholders in nonmanufacturing-particularly construction-and in nondurable manufacturing. Consequently, joblessness
was up sharply. The number of
unemployed workers rose 2.8 percent and the unemployment rate
reached 4.7 percent. April was the
second consecutive month the jobless rate had increased.
Industrial output in Texas was essentially unchanged in April, continuing the sluggish growth pattern
of the past six months. Manufacturing was up slightly, led by a 4percent increase in textile mill production. The gain in textile output
was stimulated by an influx of
orders from apparel retailers. Textile manufacturers, however, report
production still hindered by shortages of petroleum -based fabrics.
Petroleum refining was over 2
percent higher than in March, but
petroleum mining was fractionally
lower. Production of natural gas
rose modestly for the third consec-

utive month, roughly matching the
increase in gas consumption. Distribution of electricity, however, fell
nearly 3 percent as customers possibly responded to widespread rate
increases by limiting energy use.
Although crude oil production in
Texas was down slightly, exploration is such that the spring slump
usually characterizing drilling in
Texas was virtually eliminated this
year. In April, the daily average
number of rotary rigs drilling in
Texas was 468-40 percent more
than a year before. In the week
ended May 20, the average reached
499 rigs.
By the end of April, the number
of wildcat oil discoveries completed
in Texas since the first of the year
reached 85-compared with 69 a
year earlier. Gas discoveries totaled
129-seven more than in the first
four months of 1973.
Although the outlook is for shortages of crews, rigs, and pipe to constrain drilling in Texas throughout
the rest of the year, the number of
new wells likely will increase as the
year progresses and the industry
tries to slow the drop in reserves .
Last year, the state's oil reserves
fell 3 percent.
Most of the Eleventh District benefited from at least some rain in
April, and moisture conditions in
eastern parts of the District were
reported excellent on May 1. Much
of the five-state area, however, had
received less than half the precipitation normal for that time of
year. As a result, conditions in an
area extending from West Texas
through large parts of New Mexico
and Arizona reached a moderate
drouth stage by May 1.
(Continued on back page)

CONDITION STATISTICS OF WEEKLY REPORTING COMMERCIAL BANKS

Eleventh Federal Reserve District
(Thousand dollars)
May 15.
1974

ASSETS
Federal lunds sold and securities purchased
under agreements to resell ....
Other loans and discounts. gross .. ... .................. ..
Commercial and Industrial loans
Agricultural loans. excluding CCC
certificates 01 Interest ...................................... .
Loans to brokers and dealers lor
purchasing or carrying:
U.S. Government securities ... .
Other securities ................................ ..
Other loans lor purcheslng or carrying:
U.S. Government securities
Other securities .. .............................. ..
Loans to nonbank financial Institutions:
Sales finance. personal finance. lactors.
and other business credit companies
Other ... . ..................... .
Real estate loans ................................... .
Loans to domestic commercial banks ..
Loans to lorelgn banks ..
Consumer Instalment loans
......... .
Loans to lorelgn governments. o"Iciai
Institutions. central banks. and International
Institutions
................ ..
Other loans ... .. ............ .. ........ .
Total Investments .... .
Total U.S . Government securities
Treasury bills .... .....
.. .................... .
Treasury certificates 01 Indebtedness .............. .
Treasury notes and U.S. Government
bonds maturing:
Within 1 year..........
.. ........................ .. .... ..
1 year to 5 years .. .. ................. .
After 5 years ............................................... .
Obligations 01 states and political subdivisions:
Tax warrants and short-term notes and bills
All other .. .. .. .......... .. .... .... .........
.. ........ .
Other bonds. corporate stocks. and securities:
Certificates representing participations In
l ederal agency loans .......... .. ........ ..
All other (Including corporate stocks)
Cash Items In process 01 collection .
Reserves with Federal Reserve Bank
Currency end coin ......... .... .. .. ........ .. ........... ..
Balances with banks In the United States
Balances with banks In lorelgn countries .............. ..
Other assets (Including Investments In subsidiaries
not consolidated)
TOTAL ASSETS ..

Apr. 17.
1974

May16 .
1973

1.311.149
1.831,055
10.166;471 10.106.811

884.844
9.521 .909

---4.510.536

- - -4,439.868

4.278.698

273,490

283.047

267 .782

1.264
48.014

1,400
57.785

319
59.673

3.789
448.710

3.976
451.517

5.022
517.306

156.615
760.703
1,497.os4
45.512
72.370
1.039.665

145.517
802.305
1,478.644
45.214
65.488
1.048.388

195.161
646.348
1.349.048
28.293
56.937
1.016.762

17
1.308.722
4.240.139

17
1.283.645
4.195.086

500
1.100.060
3.986.616

1.002.433
162.003
0

1.031 .502
161.506
0

- - - -

937.549
153.862
0

147.745
532.1 08
190.143

135.379
483.770
164.538

176.326
2.776.992

151,494
2.735.782

209,474
2.596.331

44.661
239.727
1.612.389
882.057
126.894
479,415
31.175

13.009
263.209
1.582.579
852.506
129.959
556.372
15.822

8.581
234.681
1.642.442
950.398
114.555
412.354
13.829

827.840

794.110

19.677.529 20.064.300

Total demand deposits .................. .. .. .. ........ .. ....... .
Individuals. partnerships. and corporations .. ...
States and pOlitical subdivisions
U.S. Government .....
.. ..................... .
Banks In the United States
Foreign:
Governments. official Institutions. central
banks. and International Institutions
Commercial banks .................................... .... .
Certified and officers' checks. etc . ........ .. ......... .
Total time and savings depOSits .......................... ..
Individuals. partnerships. and corporations:
Savings deposits .... :..
Other time deposits ..................... ..
States and pOlitical subdivisions .. .. .............. .
U.S. Government (Including postal savings) .
Banks In the United States ............ .
Foreign:
Governments. official Institutions. central
banks. and International Institutions ...... .. ..
Commercial banks .... .. ................ .. .......... .. .. .. .
Federal lunds purchased and securities sold
under agreements to repurchase
Other liabilities lor borrowed money
Other liabilities .....
Reserves on loans ............................ .
Reserves on securities ..
Total capital accounts

Total deposits ...
Borrowings .......
Other lIabllltiese ....
Total capital accountse

......... " .......
........................

TOTAL LIABILITIES AND CAPITAL
ACCOUNTSe
....... " ..........
e-Estlmated

2.364
51 .571
131.541
7.362.236

1.158.548
4.070.666
2.017.680
7.989
80.538

1161 .240
4:058.769
2039.249
• 6.800
82.686

12.162
14.140

13.192
300

2.898,337
198.434
535.908
173.771
24.288
1.319.652
19.677.529

2 343
42)8 9
128.928
46
6.546,5
311
1.184'416

3.5~h39

1.6 '8 14
28
91: 480

12,~

525
2.411.432
3135 .017
245 '564
'178.259
549 '961
435.541
1~~:910
179.123
24.259 1 119.261
1.301 .052 ;;.:.:..;----

-

296.

413

20.064~

Eleventh Federal Reserve District

769.466

18.296.413

DEMAND DEPOSITS

---1972: April .....
1973: April .
May
June
July
August..
September ..
October ..
November .
Decem ber .
1974: January ..
February .
March .
April

Eleventh Federal Reserve District

LIABILITIES AND CAPITAL ACCOUNTS
Demand deposits of banks
Other demand deposits
Time depOSits ......

3.103
62.877
116,499
7.361.723

----

(Million dollars)

TOTAL ASSETSe

~

(Averages 01 dally figures . Million dollars)

CONDITION STATISTICS OF ALL MEMBER BANKS

ASSETS
Loans and discounts. gross
U.S. Government obligations
....... ,,', ..........
Other securities .............................. ............... ",.
Reserves with Federal Reserve Bank
Cash In vault ....
Balances with banks In"ihe ·Uiiite·it"Siates ...
Balances with banks In foreign countrlese .
Cash Items In process of collection .............
Other assetse ....

7.165,416
5.139.838
543.154
118.145
1.181.800

DEMAND AND TIME DEPOSITS OF MEMBER BANKS

Date

Item

-

14,527.139

Total depOSits

TOTAL LIABILITIES. RESERVES. AND
CAPITAL ACCOUNTS ...

118.490
539.345
182.595

-----

Mat6,
Apr. 17.
1 73
1974~
13,735.6
14.811.049
189
7448.813 7.881 '646
5'370.228 4. 741.'136
05
'429.641
1';9
192.143 1.215
34 • 5
1.271.325

May15.
1974

LIABILITIES

Apr.24 .
1974

Mar. 27.
1974

Apr. 25.
1973

20.465
2.301
6.592
1.856
363
1.286
23
1.6 14
1.62 1

20.985
2.320
6.531
1.727
361
1.395
20
1.732
1.587

18.357
2.444
6.D15
1.390
334
1.217
14
1.606
1'.373

36.121

36.658

32.750

Total

Adjusted '

U.S.
Government

12,470
13.237
13.136
13.218
13.259
12.941
13.039
13.289
13,455
14.008
14.384
13.949
13.933
13.984

8.696
9.550
9.502
9.551
9.567
9,492
9.442
9,461
9.816
10.086
10.276
10.082
10.150
10.289

314
331
341
279
261
172
208
239
167
244
302
264
260
236

~
savingS

Total

2.640
285 5
2'859
2'88 4
2'868
2'851
2'85 4
2'8 63
2'871
2:8 83
2 900
2'9 09
2'95 8
2: 915

10.938
13.249
13.336
13.374
13.396
13.507
13.61 8
13.795
13.953
14.154
14.533
14.919
15.126
15.143

comme~clal

1. Other than those 01 U.S. Government and domestic
Items In process 01 collection

leSS

RESERVE POSITIONS OF MEMBER BANKS

Eleventh Federal Reserve District
(Averages of dally figures. Thousand dollars)

1.643
11.937
15.116

1.672
12.109
15.168

1.548
11 .466
13.302

28.696
3.543
1.351
2.531

28.949
3.826
1.377
2.506

26.316
3.011
1.174
2.249

36.121

36 .658

32.750

css"

bankS.

_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _-:'-:-::;
Item
Total reserves held ................ .
With Federal Reserve Bank
Currency and coin .................... .
Required reserves
Excess reserves
Borrowings ...

Free reserves

4 weeks ended
May1 . 1974

4 weeks ended
Apr. 3. 1974

2.017 .914
1.693.850
324 .064
2.013.092
4.822
114.280
- 109,458

2.001.302
1.684.164
317.138
1.998.421
2.881
76.858
-73.977

4

n
ded

~:~~ f913
26
9
1.767 . 45

1.41889'~81

2 '25 2
1.1598'614
'541
124• 13
_ 11 5.8

BANKO

I

I

EBITS, END-OF-MONTH DEPOSITS, AND DEPOSIT TURNOVER

SMSA's I
(00
n Eleventh Federal Reserve District
liar arno
........
unts In thousands, seasonally adjusted)

I
\

I

DEBITS TO DEMAND DEPOSIT ACCOUNTS '

DEMAND DEPOSITS'

Percent change
Apr.
1974

April 1974 from

ft;3

Annual rate
of turnover

4 months,

__
StanS1:[I~t~:lr~r':ltan
(An~~~~)rate
~~4
19~~:~om
A~~7~0,
Apr.
Mar.
Apr.
ARIZo;:----:::-=-_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _~_ _ __ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _1:..:9..:.
74~_---.:1:..:9.:...
74~_ _ _1:.::9:.:.73:......_

lOUISIA~·AT~son

. .

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

. S~nroe .....

N

EWMEXICO reveport
TEXAS'. Abllane
: Roswell'

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

$15,266,212
5,638,033
19,268,550
1,281,821

-3%
5
0
- 11

Srya ntilie-Harlingen-San Ben'lic;

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

Corp~~ ~~~I~~ Station ... ......... .. ..........

(

gorsleana.

········ ···········

Ela~:: ... .... ... .......
~~~;;Vfi1h·::::::::::::::: · ............
HOUst~~n-Texas City ············,·· ..............

I
(

~~~~~ekpii . . .... ... :: ::::·····

(

~dessa

Mldlan~-

arr-Edlnburg ....
.... .

3~,m,m

S:~ ~~~o~?" ··

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

16:m:~~~
4,005,205

Co

$375,779
127,166
399,519
54,887

40.6
44.1
51 .1
23.1

42.7
43.3
56.6
25.7

360
40'5
46'9
.
24.0

~g
~~

~~
~~

~~~:g~~
m:~6~

~~:ri
~~:~

~~:~
~~:~

33.3

2
13

18
45

24
28

134,291
62,910

29.8
30.7

30.4
27.2
41 .2

81:9

-~

~~

~~

2~~:m

0

46

45

3,183,197

~~

12
35

~~:~
!i:~

12
30

137,913
3,710,806

l~~:m

287
58.8

~g

29.1
58.6

~~:~

257,120

40.3
25.5

53.0
24 .7

20.1

~~

~~

33
20

58
24

~:~~7:847

~~

1
5
10
1
5
- 3
-7
1%

~~:i

23.0
31 .9

!~:~

2~

3,23~,~~~::~

~~'5

~~ :~

ggV~~

~~

- 23
3

....:. ". .. . :::::::: :: ::::::::........
Sherrnan-D~nlson"" .... ..... . .....
30 ,520,013
Texarka (
. . . ... . ..
1,725,734
TYler na Texas-Arkansas) .. ....
.......... ...........
2,164,430
Waco .............
3,553,778
Wlehlt ··,,···.·....
5,152,716
Tot
a ails ..
.................. ,. .. .............................
4,707 ,146
al-30 centers
.. ..... ............ ........... .................•. $712,931,863
t. Oep
2.

~~

:: ~
0
2

216 :004 :246
2,910,043

···
.

3,840,266
1,909,411
11,947,019
257,m :m
13,890,215

Killeen-Tem .. j............ .......................
Laredo
p e .......

32%
13
20
27

-~

~~~r~lo :::::::::::: ....... . ......... •...•.......•... ::::::............... 1U~::g~~
~~~~nioni~·piirt·Arth~;::6;iingii· ····
~~:g~~:m

I

25%
15
29
16

~g~ : ~g~

~~

42
17
30
10
22
17
43

35
16
13
9
8
14
41

36%

34%

~~.~

34:9

~n

47.9
22.5

~~:g

116,305

~~:~

~g

95,260
908,574
86,791
95,613
140,470
162,613
168,759

27.8
34 .0
20.0
22.8
25.3
32.3
28.3

28.0
32.6
18.4
22.7
24 .8
33.5
31 .0

21 :3
29.0
16.5
21 .6
22 .9
28.8
23.4

~~.~

$13,403,238

53.6

54 .0

42.4

Oslts Of IMI I
Unty basis v duals, partnerships, and corporations and of states and political subdivisions

CONDlllO
N OF THE FEDERAL RESERVE BANK OF DALLAS

(Thou

8andd
...............ollars)

BUILDING PERMITS

rn~':n"i1!cate reserves
eder
s
r banks ...... . .
U.S G agency b '
..
Total overnrne a ligations ..
Melll~arning ant securities "
~e
r ba
Ssets
deral re nk reserve de .. .
ClrcUI serve not I posits ...
alion .
es n actual

Apr. 24,
1974

May 23 ,

264 ,629
179,683
0
119,527
3,500,214
3,799,424
1,557 ,918

815 ,043
88,310
0
94,738
3,324,814
3,507,862
1,855,81 0

350,529
48,060
0
56,911
3,409,457
3,514,428
1,490,531

2,467,527

2,461,874

2,280,501

May 22,

Item

1974

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

VAklJE 01=
CONSTRUCTION CONTRACTS

(Million

~)

January-April
~ IVE

Area

and typ e

Apr.
1974

Mar.
1974

Feb.
1974

S SOUT
RTATEs,HWESTERN
NeSlde ......
982
987
776
onres7"al buiiCi iii .. ···········
419
406
358
UNNonbulIg~~lal bUIi~'I~g"" ....
371
402
300
~TED
STAT constructlo~""
192
179
118
eSI
ES
....
7,911
6,610
Non~~7"al buliCiiii······· 8,929
3,924
3,374
2,678
NOnbUlidenlial bUIi~( """"'"
1
ding COnst ng ........
2,842
2,752
2,260
r':" Art~On
rUction ....
2,163
1,785
1,672
NoRavlse a, lOUlslan
So TE: Dd
a, New Mexico , Oklahoma , and Texas
URCE·etalls rna n
. F. W. D~d~t a~d to totals because of rounding .
e, cGraw-HIIi, Inc.

VALUATION (Dollar amounts In thousands)

1973

1974

1973r

3,583
1,474
1,386
723
29,242
12, 206
10,091
6,945

3,816
1,929
1,329
559
30,895
15,546
9,904
5,446

Percent change
Apr. 1974
from

NUMBER

Area

Apr.
1974

4 mos.
1974

Apr.
1974

3 mos.
1974

Mar.
1974

Apr.
1973

4 months,
1974 from
1973

2.006

$6,422

$31,221

-33%

- 60%

- 55%

ARIZONA
584
Tucson ..
LOUISIANA
Monroe66
West Monroe ....
640
Shreveport .....
TEXAS
80
Abilene ....
482
Amarillo .....
541
Austin ...
236
Beaumont .
129
Brownsvi lle ...
298
Corpus Christi
.: 1,619
Dallas .......
28
Denison .....
479
EI Paso .......
419
Fort Worth ..
63
Galveston
Houston ...... .. : 2,097
34
Laredo .....
180
Lubbock ....
110
Midland ......
113
Odessa ....
80
Port Arthur ...
96
San Ang elo ......
1
,725
San Antonio .....
40
Sherman ....
69
Texarkana ...
Waco ................ 285
93
Wichita Falls .

247
1,880

1,090
11 ,120

6,456
33,395

- 63
12

- 50
168

- 20
- 12

317
1,040
1,781
775
460
1,016
5,428
78
1,886
1,464
245
7,833
121
613
296
399
272
284
5,978
131
283
795
287

1,363
4,451
18.721
14,764
1,103
2,995
35,963
91
16,549
33,023
1,000
64,502
178
9,098
1,367
1,098
183
946
21,698
71 2
621
3,721
2,872

4,563
20,728
81 ,869
22,597
11,410
13,899
112,462
669
72,421
79,208
5,526
233,733
980
55,557
15,622
8,481
882
3,822
84 ,677
1,815
2,167
15,415
5,336

- 5
- 44
- 39
423
- 65
17
6
-17
- 53
6
-39
36
-72
- 15
-2
-25
-25
108
16
36
-31
- 51
136

2
-20
-22
623
-71
33
58
20
-9
199
-7
16
-62
0
- 4
-17
-23
9
3
-24
19
124
329

-58
11
- 10
130
2
-40
0
- 43
33
63
26
- 14
- 89
71
170
60
-54
1
2
-25
35
-6
- 21

Total-26 cities . ..10,586

35,915

$255 ,651

$924,911

-3%

21%

- 2%

"

DAILY AVERAGE PRODUCTION OF CRUDE OIL

LABOR FORCE, EMPLOYMENT, AND UNEMPLOYMENT

(Thousand barrels)

Five Southwestern States'
Percent change from

Area

Apr.
1974

Mar.
1974

Apr.
1973r

Mar.
1974

Apr.
1973

FOUR SOUTHWESTERN
STATES
Louisiana .
New Mexico
Oklahoma .....
Texas .. ..
Gulf Coast ...... .
West Texas .................. ..
East Texas (proper) ..
Panhandle .... .
Rest of state .. .
UNITED STATES ........ ..

6,475.7
2,081 .5
263 .0
520.1
3,611 .1
708.9
1,893.1
238.3
58 .9
711 .9
9,040.4

6,500 .1
2,083.8
263.1
521 .7
3,631.5
704 .6
1,908.7
241 .1
60.2
716.9
9,084.9

6,637.4
2,255.0
279.7
523.6
3,579 .1
711 .6
1,818.8
209.1
61.4
778.2
9,232.9

-.4%
- .1
.0
- .3
- .6
.6
- .8
-1.2
-2 .2
-.7
-.5%

- 2.4%
-7.7
-6.0
-.7
.9
- .4
4.1
14.0
-4 .1
-8.5
- 2.1%

r-Revlsed
SOURCES: American Petroleum Institute
U.S. Bureau of Mines
Federal Reserve Bank of Dallas

(Seasonally adjusted)

~
Thousands of persons

Item

Apr.
1974p

Mar.
1974

Apr.
1973r

8,890 .3
8,473.3
417.1
4.7%

8,872 .7
8,467 .1
405.6
4.6%

8,668.9
8,289.2
379.7
4.4%

7,426.3
1,289.5
724 .2
565 .3
6,136.8
244.6
511.3

7,439.6
1,291.8
722 .4
569.4
6,147.8
245.2
518.1

7,127.6
1,249.8
695.3
554.5
5,877.9
234.3
475.8

507 .2
1,775.9
408.9
1,227.1
1,461 .9

508 .0
1,782.1
410.0
1,226.0
1,458.3

486.2
1,710.2
387.7
1,175.8
1,407.9

perceln9ti:fr~~

~

fils

Mar.
197~
2.6
0.2%
2.2
.1
9.8
2.8
'.3
' .1
4.2
-.2
3.2
- .2
4.2
.2
1.9
- .7
4.4
- .2
4.4
- .2
1.5
-1 .3
4.3
-.2
3.8

----=~------.:-=-..::.....----------:-:
Civilian labor fo rce .
Total employment
Total unemployment
Unemployment rate
Total nonagricultural wage
and salary employment ..
Manufacturing ...
Durable ...................
Nondurable
Nonmanufacturlng .
Mining
.........
Construction ........
Transportation and
public utilities ..
Trade
Finance
Service ..........
Government .

-.3

5.5

- .3
.1

3.8

4.4~

~
--~~~~~~~~--~---------1. Arizona, Louisiana, New Mexico , Oklahoma, and Texas
2. Actual change
p-Prellmlnary
r-Rev lsed
NOTE: DetailS may not add to totals because of rounding .
SOURCES: State employment agencies
Federal Reserve Bank of Dallas (seasonal adjustment)

INDUSTRIAL PRODUCTION
(Seasonally adjusted Indexes, 1967 - 100)

Area and type of Index
TEXAS
Total Industrial production .
Manufacturing
Durable
Nondurable
Mining ...............................
Utilities .. .. ........................
UNITED STATES
Total Industrial production .
Manufacturing ...
Durable ............. ", ....
Nondurable
....................
Mining
" .........................
Utilities .......

Apr.
1974p

Mar.
1974

Feb.
1974

Apr.
1973

138.1
143.6
158.7
132.7
120.8
153.4

138.0
143.1
159.0
131 .7
120.7
156.3

135.9r
141 .8r
159.2
129.3r
117.4r
151.4r

136.0
140.6
156.8
128.9
118.1
161.9

124.7
124.7
121 .1
130.2
110.8
144.9

124.2
124.2
120.0
130.5
111.2
144.3

124.6r
124.2r
119.6r
131.0r
110.5r
146.1r

124.1r
123.8r
120.6r
128.4r
109.0r
148.7r

p-Prellmlnary
r-Revlsed
SOURCES : Board of Governors of the Federal Reserve System
Federal Reserve Bank of Dallas

The drouth caused heavy losses
of dryland wheat in the Texas Panhandle, and in early May, winter
wheat production in states of the
District was projected at 5 percent
less than the 1973 crop, But at 266
million bushels, that would still be
three-fourths more than the harvest in 1972,
Nationwide, increases in livestock
production and expected increases
in crop production brought a downturn in farm prices, which had
reached record highs earlier in the
year, Prices received by Texas farm-

WI NTER WHEAT PRODUCT ION
(~T~ho:u:s:an~d~b:u:sh~e:IS~)________________________________---~~

1974,
Indicated
1972_______
MQ1
1~3
~_
----...:..::.=-- - - - - -....:::::....: . . - - - - -1-5-,1-20- 11 '~~~
Arizona ...
17 ,g~g
396
4 335
~~~sl:e"x~co .
.......................
5,275
8,526
89:rOO~
Oklahoma
173,600
157,800
44~
Texas....
69,300
98,600
--- 5
150,1 S---.:T..:.
ot:a::.:
:1 =.::.:
.. ::.:
...::.:
...::.:
...::.:
...::.:
...::.:
.. ::.:
...::.:
...::.:
...=~_---=2...:..
65.:.:,.:...
98...:..5_ _ _ _2_8_0_,4_42_ _~
A~

SOURCE: U.S. Department of Agriculture

ers and ranchers dropped 6 percent
in the month ended April 15, although they held 17 percent higher
than a year earlier, Contributing to
the decline were lower prices for
wheat, hogs, cattle, grain sorghum,
cotton, and eggs. In contrast to the
fall in average farm prices in Texas,
the index of prices paid by U.S.
farmers and ranchers rose 2 percent to a level 16 percent higher
than a year earlier.
A substantial decline in livestock
prices has brought a marked slowing in growth of cash receipts from

,
in pisfarm and ranch marketmgs of
trict states. First-quarter sales
ts
livestock and livestock pro:U~es
were only slightly ah~ad 0 ;aCroP
for the same quarter m 197 ' ever,
receipts were up sharply, h O: twgs,
due mainly to a gain in ;nar,; the
Crop and livestock receIpts 1 tofirst three months of,t~e ye~rn_
taled just about ~3 ?Ill~on, c first
pared with $2.1 bIllion III the
quarter of 1973.