Full text of Review (Federal Reserve Bank of Dallas) : March 1970
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business
•
revIew
march 1970
fEDERAL RESERVE
BANK OF DAl lL AS
This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org)
contents
Current banking developments. . . . . . . . . . . . . . .
3
District highlights . . . ..... . ............. . ...
9
CURRENT BANKING DEVELOPMENTS
An Addl'ess by
Philip E. Coldwell
President
Fedel'al Reserve Bank of Dallas
to the
Houston Chapter
American Institute of Banking
February 19, 1970
evening I would like to review with you
So Ole of the trauma of 1969 and some possible
lessons to be learned from the financial developlllents, monetary policy actions, and banking
responses of the past year. More specifically,
~y speech will take a retrospective look at banklUg conditions, credit policies, bank adjustments
and policy problems developing from these, and
the general environment of the past 12 months.
I believe we can quickly summarize the year's
economic and financial developments since all
of you are familiar with them.
THIS
We entered 1969 on a note of urgency to
begin restraining an inflation which had accelerated nearly beyond control. After seven years of
growth cumulating in an overextension of our
reSOurces, we had developed an inflationary en-
virolilllent where expectations were feeding an
acceleration of wage and price increases. After
a slow start, stabilization measures began to
take effect in midsummer. The massive shift in
budget position contributed to some slowing of
consumer demand but the burden of stabilization fell upon monetary policies, and, after
midyear, monetary restraint intensified.
The principal impact of monetary restraint
through the early months of 1969 was a lessening of liquidity and a sharp runoff of largedenomination certifi.cates of deposit. Credit demands were strong, especially for business,
security, and real estate loans. In addition, the
introduction of credit cards spurred consumer
credit totals, and seasonal agricultural credit
needs were large. Thus, interest costs rose, with
the prime rate moving to 8lh percent. Meantime, Regulation Q ceiling rates were held constant, forcing a growing disintermediation of
deposits. We must admit, however, that while
the cost of doing banking business advanced,
there was an even larger return as funds were
recaptured from lower-yielding investments and
placed into loans at higher rates. I have not seen
an average of the increased profits of banks, but
I have seen many reports of 15- to 25-percent
gains and a few at nearly 100 percent.
In the second half of 1969, with monetary
policy pressing even more strongly on the available supply of credit, bank liquidity moved toward irreducible minimums and credit rationing
intensified. As competition for available funds
increased, interest rates rose further and disintermediation accelerated. Bank loan demand
from businesses remained strong, especially near
tax and dividend dates, but security and real
business review/ march 1970
3
estate demands slackened - at least, the accommodation of these loan requests slowed
sharply as the year progressed.
Througbout the year, prices continued upward at a modestly decelerating pace, but wage
settlements appeared to grow as labor sought
compensation for past inflation and protection
against future inflation. Expectations of continuous and accelerating inflation were dampened
somewhat, but business attitudes appeared to
harden that only a small interruption in the inflationary environment was in prospect.
The primary impact of credit restraint and
rising interest costs appeared to fall on the housing industry, state and local governments, and
small and new businesses. However, the transmission of this restraint went primarily through
the member banks of the Federal Reserve System. Banking became a substantially more difficult business for many commercial banks, especially the money market banks and those relying
upon large negotiable certificates of deposit for
lendable funds. There were many others, though,
that found 1969 a distinctly pleasurable experience as the cost of funds was restrained while
tlle rate charged on loans advanced sharply. A
few banks found an investment outlet in the
Federal funds market at very attractive rates
and appeared to minimize their responsibilities
for servicing community credit needs. Still
others were tight in the periods of seasonal demand but able to invest heavily in the Federal
funds market at other times.
Thus, tlle impact of monetary restraint was
far from uniform for all banks. Even the agricultural banks found the usual participation outlets drying up, and many saw customers move
to other financial institutions. The incidence of
credit needs for the newly expanding cattle
feeding industry was, unfortunately, timed witll
this period of heavy monetary restraint, and
banks could not palticipate as much as they
would have done under more normal conditions. This was just one of probably many spe-
4
cial credit situations facing our banks during
1969. Others I have heard about include special
oil equipment financing, foreign loans, automobile dealer floor plan loans, and, of course, a
large number of special municipal credit needs.
Bank responses to the disintermediation of
deposits, the restraint on new reserves, and the
heavy loan demand varied by bank and bank
management. Initial reactions were almost uniform in the liquidation of short-dated or maturing securities and the reduction of commitments
to purchase new securities. However, some
banks found themselves with heavy portfolios
of long-dated and deep-discount Government
and municipal securities. For these banks, adjustments becanle more difficult.
A second response of many banks was to
enlarge their purchases of Federal funds and/or
increase borrowings from the Federal Reserve
or correspondent banks. In the first week of
1969, there were 267 member banks of the
E leventh Federal Reserve District participating
in the Federal funds market, with daily average
purchases of $583 million and daily average
sales of $459 million for a net of about $125
million of purchases. Of these banks, there were
four which showed daily average net purchases
in excess of their respective reserve requirements prescribed by law.
In contrast, the first week of 1970 showed
368 banks active in the Federal funds market,
witll $1,155 million of daily average purchases
and $641 million of daily average sales for a
net purchase level of about $500 million per
day. There were 14 banks whose purchases each
day exceeded their reserve requirements, and
several of these banks were purchasing a dailY
average of twice their reserve requirements. On
the other hand, there were 107 banks which
made net daily average sales exceeding their
reserve requirements. For the District as . a
whole, there has been an apparent import ot
Federal funds amounting to about $500 million
per day. It is evident that some of our District
banks have turned to the Federal funds market
for continuous purchases to sustain an overloaned position.
It is interesting to note that in the first week
of 1970, a selected large-bank sample of 19 reporting banks accounted for $782 million of
purchases, or 68 percent of the total, but only
$305 million, or 47 percent, of total sales. Thus,
of the District net purchases of $500 million per .
day, these 19 banks accounted for 95 percent.
A further refinement shows that eight of the
largest District banks more than accounted for
the net purchases of the District.
Borrowings from the Federal Reserve Bank
of Dallas also rose sharply during 1969. Loans
Were made to 112 banks this past year, 56 percent more than in 1968, and daily average borrowings rose 134 percent to $52,863,000. Even
these facts scarcely tell the story of the heavy
borrowings by banks which were overextended
in loans and short on liquidity. Borrowings from
the Reserve Bank were not, and are not designed to be, the primary source of borrowed
funds. Even if 1969 had not been a year of
monetary policy restraint, borrowings would
have been curtailed by the very nature of the
lending procedure and objectives.
If Federal Reserve credit through the disCOunt window were available in unlimited
amOunts or for indefinite periods of time, the
banks would use this source of funds as a substitute for new capital. More importantly, the volunle of Reserve Bank credit outstanding would
be sharply increased and would require massive
offsetting open market sales to keep monetary
pOlicy objectives in sight.
The fundamental difference between Reserve
Bank credit and other sources of funds is the
fact that when a Reserve Bank loan is made, it
creates new reserves in the banking system
while purchases of Federal funds or loans from
other commercial banks merely utilize reserves
already in existence. New Reserve Bank credit
under our fractional reserve requirement rules
will support a multiple expansion of commercial bank loans or investments, but other types
of credit cannot support such a multiple expansion.
All commercial banks are not the same as
to their management, composition of assets and
liabilities, or the local environnlent in which
they do business. Given these differences, the
Reserve Bank seeks to treat all banks in like
circumstances as nearly the sanle as is possible
within the context of overall System guidelines
in the issuance of Reserve Bank loans. Reserve
Bank loans are not made merely to reduce the
cost of the adjustment process but, instead, are
made to permit an orderly adjustment. Thus, we
do not expect banks to seek loans from us just
to avoid the higher cost of purchasing Federal
funds when the banks really intend to make no
fundamental adjustment in their balance of assets and liabilities. We know some loan requests
are precisely for the purpose of avoiding the
high cost of these otller adjustment procedures,
but repetitive or continuous use of the discount
window for this purpose will result in quicker
administrative contacts.
Since the Federal funds market has limits
and Reserve Bank borrowings are largely for
short-nUl adjustments and seasonal problems,
the District banks, along with others in the nation, have turned to off-balance-sheet or nondeposit sources of funds. Loans or participations
were sold to affiliates, and commercial paper
was issued by banks' affiliates or customers
guaranteed by the banks' irrevocable letters
of credit. After midyear, Eurodollar drawings
were an important source of funds as a few
large District banks opened foreign branches or
established contacts with foreign banks. These
off-balance-sheet and nondeposit sources of
funds rose from about $250 million in June
1969 to more than $950 million in early 1970.
In addition to the foregoing, a few banks
sought to relieve their tight positions by a runoff
business review/ march 1970
5
of reserves and thus encountered severe reserve
deficiencies. Slightly more than 100 District
member banks showed five or more reserve
deficiencies, while 35 percent of aU the banks
had no deficiencies during 1969. Only a very
few banks made a conscious decision to violate
the reserve requirement regulations, and these
were contacted frequently . A number of District member banks had difficulty in maintaining
reserves, not only because of the tight credit
situation but also because of the shift to oneweek reserve periods for all banks and the impact of the automatic charge to reserve accounts
for cash letters and TT&L withdrawals.
Finally, a few banks sought to take advantage of the direct sending privilege, and such
sendings rose sharply. With heavy personnel
turnover and markedly rising check volumes,
the quality of check processing deteriorated and
errors increased. Much of this was inadvertent,
as were many of the reserve deficiencies.
Of course, to many banks, the primary
answer to monetary restraint was tighter screening of loan requests and increased turndowns.
Some borrowers withdrew from the market because of higher rates of interest, but many more
who were willing to pay the going rate were
denied bank loans because of lack of availability
of lendable funds.
The problems of containing the inflationary
pressures have not passed, and some of the
banking responses of 1969 may be sharply altered in 1970. Yet there are certain developments, trends, and policies which we can tentatively appraise in order to sort out those of
lasting significance.
From a monetary policy-making standpoint,
I think it is fairly safe to conclude that the
efficiency and equity of policy steps are under
considerable question. Both inside and outside
the Federal Reserve System, there are complaints of too concentrated an impact on housing, too much of a burden on banks, and too
6
little restraint on aU other segments of the economy. Similarly, tllere is considerable dissatisfaction with the use of Regulation Q as a monetary
policy tool.
If monetary policy is to bear the main burden
of economic stabilization, then we should develop ways of more equitably distributing its
impact and devise methods to limit credit extension without massive disintermediation of
deposits or crippling illiquidity. It seems clear
that restraints imposed through monetary policy
are strong enough to slow the economy, but the
price in lost housing, unemployment, illiquid
banks, and record interest rates is, indeed,
costly. If desired results can be obtained by
broadening the base of action and spreading
the impact, steps should be taken in this direction. Such steps could include uniform reserve
requirements for all banks, credit limits on
other financial institutions, a sharing of impact
throughout the economy, and, perhaps, even
some credit direction in periods of intense
pressure.
Another element of policy encountering stiff
resistance is the regulatory plugging of loopholes such as the reserve requirement on Eurodollars, the proposed application of reserve requirements to commercial paper issued by bank
affiliates, the application of Regulation Q ceilings to commercial paper issued by bank subsidiaries, and the multiple amendments to Regulation Q defining and redefining deposits. I aD1
convinced that commercial bankers can innovate faster ilian we can regulate. But the root
cause is a failure to permit free competition for
deposits.
There are some lessons in commercial banking which may be worth careful study. Some
banks clearly schedule deficit operations and
rely upon borrowings to sustain their position.
As long as Federal funds are available or other
sources can be tapped, the deficit banker call
probably "ride out the storm." But any failure
to find adequate funds immediately places the
banker in an almost insolvent posltlOn. Some
bankers take the monetary policy actions of
restraint almost as a personal affront or a game
to be played, with innovation and regulation the
primary tools of combat. They wash their hands
of any public responsibility and deliberately seek
ways to accommodate all borrrowers, whether
their customers or those of a more conservative
bank. The banking industry needs to police
these overaggressive elements, or monetary
policy may have to shift from aggregate limitations to mandatory and specific curbs.
A number of banks have entered or indirectly supported the commercial paper market,
which some bankers see as a threat to the traditional banking business. Thus, these bankers
have been particularly unhappy at the thought
that reserve requirements or ceiling rate limits
might be imposed on bank issuance of commercial paper. Perhaps the commercial paper market will assume a larger role in financing, but
one is always tempted to declare today's conditions as tomorrow's requirements. If rate
structures can be modified, there is little reason
~o believe that borrowers will pay higher rates
JUst for the privilege of obtaining funds through
commercial paper. On the other hand, that market is particularly efficient in meeting certain
borrowers' and investors' requirements, and I
Would hope that banks could continue to partiCipate in the commercial paper market in
periods of lessened inflationary pressures.
. Of greater concern for normal banking relatIonships has been the customer loss to other
financial lenders. The Government-sponsored
farm credit agencies, with an ability to raise
capital funds, have taken away a significant
s~are of bank agricultural lending. Similarly,
?lrect cOl!porate financing and some brokered
Individual investor financings have established
at least short-run patterns of borrowing which
may be slow to reverse. Those screened out of
borrowing by tight credit standards may have
long memories, especially if they feel there were
Unfair or inequitable limits imposed.
One apparent characteristic of monetary restraint is the very uneven impact between banks
in states where unit banking exists and where
correspondent relations are relied upon to
equalize the loan and deposit picture. The
transmission of monetary restraint through correspondent relations appears to be an uncertain
and irregular process, dependent in part upon
the condition of the upstreanl, or city, correspondent. Some of our large banks were very
tight most of 1969, while others became tight
only late in the year. As indicated by the pattern
of purchases and sales of Federal funds, many
small banks hardly felt the tight credit situation
and Federal funds became a lucrative outlet for
the small banks' surplus funds.
Perhaps one of the problems of the 1969 environment which may carryover into future
years is the commercial banks' relations with the
Federal Reserve. There is little doubt that a
member bank which overstays its borrowing
from the Reserve Bank will feel resentment
when told to terminate its borrowing. Human
nature alone breeds such a reaction, but, in
addition, there is a general lack of understanding of the role of Reserve Bank loans and why
they must be limited in amount and duration.
Inevitably, there are other strains between member and central banks, including regulatory requirements for reserves, ceiling rates on deposits, and limitations on market competition for
funds by banks.
All of these restrictions, relatively unimportant in times of monetary ease, become major
points of aggravation in periods of restraint just
when the member banker feels abused by the
need to ration credit and by a declining liquidity. It seems as if the central bank has no sympathy or concern for the member bank's problems, but I assure you that such a position is not
cOHect. We are concerned with banking problems and seek to guide and counsel with banks
to alleviate or minimize the disruptions. Yet we
in the Federal Reserve have a job to do, one
which I believe most bankers, upon careful re-
business review / march 1970
7
flection, would support. There are times when I
wish they would provide a little more active
support, both vocally and in bank policy.
Still another problem with far-reaching significance to the commercial banks is the practice of granting lines of commitment to large
out-of-state corporations. We have seen bank
after bank get in trouble by the drawings on
these commitments at the very time the bank
is short of lendable funds and rationing credit to
local customers. It is not conducive to good
community relations to have banks accommodating the large national corporations but denying credit locally. I suggest that the practice
of granting lines of commitment to out-of-state
and even out-of-country customers should be
reviewed to see if the balances carried are worth
the pressure for loan accommodation in periods
of stress.
Finally, I think the commercial banking industry needs to rethink its use of a prime rate.
Certainly, over the past year, the movement of
the prime rate has been a primary source of
political aninlosity and may also have been a
ticklish problem in dealing with non-prime-Ioan
customers. There are good arguments for having a uniform rate for national customers in a
fluid and almost national credit market. On the
other hand, such a rate pays little attention to
the specific condition of a bank or to the relative rates charged other customers in the local
community. Perhaps it is time to reset rates on
a local basis, with a marginal prime rate for
the locally unused balance of lendable funds.
Banking can ill afford either the local or the
national public relations problems which a
prime rate move engenders.
My catalog of lessons from 1969 is barely
scratched, but if I have stimulated your thinking
on these problems, I will count this review a
success. Rather than continue with a historical
perspective, let me use my few remaining minutes to comment on the current situation. I
believe we are nearing the point at which visi-
8
bility of trends clarifies and decisions can be
made for the future. The money and capital
markets appear to be establishing a trading range
which is easing away from the former peaks.
And yet, the problems of bank deposit disintermediation are intensifying as more and more
smaU- to medium-size savers seek the higher
rates of the marketplace. Some time will be required to reverse this trend, and a declining
money market rate will be essential. Thus,
banks may face even tighter conditions in the
near future before the dawn of relief.
Despite this pessimistic short-range forecast,
I think we are making progress in slowing the
economy and expect that this slowing will
eventually reduce credit demands. We hear
a lot of talk about looking over the valley to
the almost assured growth of tomorrow. The
debate now centers upon the depth and breadth
of the valley. I suggest that we might more usefully appraise the time needed to adjust our
economy's imbalances, correct its distortions,
and lay the foundation for the bright world of
tomorrow. If that world is to be the brightest
for all, it should be one based upon a noninflationary growth pattern, and I believe the
time to balance our economy for this type of
growth may be longer than many observers
appear to be contemplating. A shortening of the
valley in either depth or breadth could mean
a premature resurgence of economic activity
based upon inflationary expectations.
In my opinion, the ultimate aim of noninflationary growth is worth waiting for, even if the
valley is extended or deepened to the limits of
political acceptability. A premature and material easing of restraints could terminate the
corrective process and reinforce the still-virulent
inflationary expectations. Such a development
would only mean a renewed period of restraint,
perhaps of greater intensity, and might require
more drastic steps than in the present period. 1
hope that our stabilization efforts and the costs
they have entailed thus far wiU not prove to
have been in vain.
Distl-ict highlights
Nonagricultural wage and salary employment
in the five southwestern states declined slightly
less than seasonally expected in January. The
decline placed total employment at 6,293,100,
or 1.7 percent less than in December. All categories of employment slipped except finance,
which increased fractionally. The greatest slippage was in nonmanufacturing groups. Manufacturing employment dropped 0.7 percent,
compared with an expected seasonal decline of
1.1 percent. Trade payrolls fell 5.2 percent,
reflecting a reversal of the buildup for holiday
selling in December. There were also significant
declines in construction and services. Employment in government, transportation and public
Utilities, and mining all declined marginally.
Employment in these states totaled 4.4 percent
higher than a year earlier. It was 5.5 percent
higher in manufacturing and 4.1 percent higher in nonmanufacturing. Of nonmanufacturing groups, transportation and public utilities
Showed the greatest increase (9.2 percent),
fOllowed by finance (6.6 percent). Construction, trade, and services increased 4 percent
Or more. Mining showed almost no change
from a year earlier, and government employment showed a 1.9-percent increase.
Daily average crude oil production in the
four producing states of the Eleventh District
rOSe only slightly in January, to 6,716,400 barrels from 6,669,400 barrels in December. The
daily average was nevertheless 8.7 percent
higher tlIan in January 1969. Texas accounted
fOr all the month-to-month increase. Production
in louisiana and Oklahoma declined, and output in New Mexico was about the same as in
December. The high production levels of recent
months have been in response to the need to rePlenish stocks depleted through tlle winter,
which was colder than usual. Stocks of crude
oil east of the Rockies totaled 221.3 million
barrels on February 6, or 9.9 million barrels less
than a year earlier.
Allowables in the District continue at high
levels through March. The maximum efficient
rate of production for Texas was set at 68 percent, unchanged from the previous two months,
and tlle production allowable in Oklahoma continues at 100 percent. Daily production at wells
in soutlleastern New Mexico was raised to 75
barrels, three more than in February. The allowable in Louisiana was raised from 47 percent of maximum efficient production in February to 48 percent in March.
The growing importance of livestock in the
agriculture economy of District states was apparent in the distribution of last year's cash
r~ceipts . While cash receipts of farmers and
ranchers in these five southwestern states totaled
5 percent higher than in 1968, the share contributed by livestock sales was 9 percent higher.
This has been the direction of shift in the distribution of receipts for several years. Where
livestock sales accounted for 44.5 percent of
the total receipts in 1960, they accounted for
58.7 percent in 1969.
Rising prices of livestock products are responsible for much of the increase in cash receipts. In Texas, for example, prices of livestock
and livestock products averaged 16 percent
higher in mid-January 1970 than at tlle same
time in 1969. By contrast, crop prices averaged
only 4 percent higher.
Prices Texas farmers and ranchers received
for all their products on January 15 averaged
1 percent higher than a month before and 11
percent higher ilian a year before. The index
business review/ march 1970
9
of crop prices showed a I-percent drop from
mid-December, but the price index for livestock
and livestock products was 1 percent higher.
Prices of all meat animals except sheep averaged higher in January than in December or
January 1969.
Livestock inventories in states of the District
changed little between January 1, 1969, and
January 1, 1970. The number of beef cattle in
these states increased 5 percent. The number of
dairy cattle was about the same, however, and
the number of sheep dropped 3 percent and the
number of hogs 4 percent.
Livestock sales will probably continue to
contribute a larger share of income than crop
receipts for several years. But although the
number of cattle on feed is substantially higher
than a year ago, the number seems to be stabilizing, possibly because of the limited number
of feeder calves available.
Registrations of new passenger automobiles
in the four largest metropolitan centers of Texas
(Dallas, Fort Worth, Houston, and San Antonio) were 28 percent lower in January than
in December. Registrations usually drop in January, but the decline this year was much more
than normal. Compared with January 1969,
new car registrations were down 16 percent.
Department store sales in the E leventh District during the four weeks ended February 21
were 1 percent higher than in the corresponding
period last year. Cumulative sales for 1970 were
2 percent higher than for the comparable period in 1969.
The seasonally adjusted Texas industrial production index rose in January to 182.9 percent
of the 1957-59 base. The most significant rise
was in manufacturing, which advanced more
than 1 percent. All other categories except
mining showed some increase. Mining was unchanged. Production of nondurables accounted
10
for all the increase in manufacturing. Production of durable goods was essentially unchanged.
Of all manufacturing industries, petroleum refining posted the largest rise. Compared with a
year earlier, total production was up substantially. All major categories advanced.
All major balance sheet items except total
investments declined at weekly reporting banks
in the E leventh District in the four weeks ended
February 11. Loans adjusted declined $177 million, compared with a $5 million decline in the
corresponding period a year earlier. Contributing most to the decline were drops of $57 million in business loans, $31 million in real estate
loans, and $24 million in loans to financial institutions other than banks. Agricultural and
consumer loans also declined.
Total investments advanced $36 million,
compared with advances of $64 million in the
previous reporti11g period and $53 million in
the corresponding period a year earlier. Holdings of Government securities increased $30
million, with a $40 million increase in holdings
of Treasury bills more than offsetting a $10
million decline in Government notes and bonds
with maturities of less than one year.
Total demand deposits declined $286 million, compared with a $199 million decline a
year earlier. Declines of $308 million in deposits of individuals, partnerships, and corporations and $70 million in interbank deposits
more ilian offset increases in deposits of the
Federal Govenunent and states and ilieir political subdivisions. Total demand deposits were
down 4.0 percent from the level a year earlier.
Total time and savings deposits declined $11
million, compared with a decline of. $13 millioJl
a year earlier. Deposits of individuals, partnersliips, and corporations declined $33 million,
but those of states and their political subdivisions increased $21 million. Large certificateS
of deposit declined $17 million.
new
Pfl'l·
-
bunk
The Great Southern Bank, Houston, Texas, an insured nonmember bank
located in the territory served by the Houston Branch of the Federal Reserve
Bank of Dallas, was added to the Par List on its opening date, February 2,
1970. The officers are: R. C. Sanders, President, and Ernest Bomar, Vice
President and Cashier.
business review/ march 1970
11
STATISTICAl! SUPPLEMENT
to the
BUSINESS REVIEW
March 1970
FEDERAL RESERVE BANK
OF DALLAS
I
I
I
~
\
CONDITION STATISTICS OF WEEKLY REPORTING
COMMERCIAL BANKS
BANK DEBITS, END-OF-MONTH DEPOSITS
AND DEPOSIT TURNOVER
Eleventh Federa l Reserve District
(Dollar amounts in thou sa nd s, se asonally adju sted )
(In thousands of dolla rs )
Item
Feb. 25,
1970
DEBITS TO DEMAND
DEPOSIT ACCOUNTS'
Jan . 28,
1970
Fob. 26,
1969 '
January
Standard
1970
met rop olitan
(Annual·rate
Dec.
stati stica l area
basis)
1969
Jon.
1969
5,943,372
- 1
21
2,584,092
9,854,388
-2
6
ASSETS
Fe deral funds sold and securities purchase d
under agreements to rese ll •• .•••••• ••••• •• ••
Other loans and discounts, gross ••••....• •••• •..
Commercial and industrial loans •..••..•••.. . •
Agricultural loans, excluding CCC
cartiAcotes of interest •••..••..•. •.... .• • .
348,150
5,970,685
346,630
6,035,373
l
6,437,652
---3,011,646
3,029,87 1
3,055,587
106,535
109,915
103,939
500
42,111
555
41,3 16
1,001
134,471
944
382,994
86 1
397,505
368
408,650
131,585
310,390
612,862
16,099
10,02 1
727,163
130,720
339,766
639,015
11,163
11,179
727,827
140,404
370,014
608,053
300,665
6,512
642,338
750
617,085
2,500,2 17
750
594,930
2,611,202
0
665,650
2,674,735
910,690
43,9 15
0
983,003
105,762
0
1,113,552
109,7 16
0
153,830
627,561
85,384
165,670
595,758
11 5,8 13
129,204
666,275
208,357
loans to brokers and d ealers for
purcha sing or carrying :
U.S. Government securities •.•• • ..• ••.• ••••
Other securities ••..•... •• •.•.•••••••...•
Other loan s for purchas ing or carrying:
U.S . Government securities •.•.•... . • .••• ••
O ther securities • ••• •••.••...•.•..• • ••. . .
loans to nonbank financial in stitutions:
Sales finance, personal Anance, factors,
and other business credit companies ••••...
Other ••• . • •• ..• . ••.•.•. . ••.. ·•·•• •··· .
Real estat e loon s •. . ..•• .. .••••...• ... ••••.
loons to dom estic commercial bonks •••• •.. . • ..
loons to for eign banks • • .•.• . ••..•••..• .. .•
Consumer instalment loans •••.• • ...•........•
loans to foreign governments, offlcial
in stitut ions, centra l bonks, international
institution s •••• •. .•.• , •..•• . .••...• , •.. .•
Other loan s •.•...••..•• .. • •. .. •. ..• •.... .
Total investments •... •• .•••..••.. . . .•• ••....•
Total U.S . Government securities ••.....•...•..
Treasury b ills • ... • •.. . • •...••.• .. .••...•
Treasury certificates of indebtedness •. •. . . • •
Tr e a sury notes and U.S . Government
bond s maturing:
Within 1 year ••• • ..• • ...•..•• ••.•.•..
1 year to 5 years • • .•...•... • ...• •• ···
After 5 years ••••• .. ••.•• • .•••.• .••..•
Obligations of states and political sub divisions:
Tax warrants and short-term notes and bills ••
All other ••. .. . .•.. .• . ..•.•••... ••···· ··
Other bonds, corporate stocks, and securities:
Certificates representing participations in
Federal ag ency loons •... ......•••. .. ..
All other {including corporate stocks} •• ......
Cosh items in proc ess of collection • ..... ••.• . • •.
Reserves with Federal Reserve Bank •• •.•• • . • •.. •
Currency and coin ••..•••. . •• ...•.••• • •..••..
Balances with bonks in the United States • ••••. . ••
Balances with bonks in foreign countries •••.•.•..
Other a ssets {including investments in subsidiaries
not consolidated) ••••.•.•...•••.•••..••..••
3,843
1,468,099
17,175
1,489,596
28,256
1,301,44 1
50,308
67,277
936,850
612,406
86,000
428,708
7,916
53,379
68,049
1,086,636
771,332
89,626
449,930
9,786
150,174
81,312
1,001,624
716,519
85,046
465,980
5,976
504,992
363,249
ARIZONA
Tucson • .••....•• • •.. $
LOU ISIANA
Monroe •••• ..• •• .• .•
Shreveport •.....••..
NEW MEX ICO
Roswell ' •..•.•....••
TEXAS
Abilene •••. . •.......
Amarillo •• .... ••••..
Austin ••......••.•.•
Beaumont-Port ArthurOrang e •••.•. .. ••
Brownsville- Harl lngenSan Benito ....... •
Corpus Christi. ••.....
Corsicana 2 ••••••••••
Dalla s •••.. •••.... ..
EI Paso .. •. •. ••.....
Fort Worth .•.... ••..
Galveston-Texas Cit y ..
Houston ••••.••. ••..
l aredo ...... .•• ....
Lu bbock •.••........
McAllen·Phorr·
Edinburg •••• . •....
Mid land •• . •........
Odessa •.•..•.......
Son Ange lo . .•. . ... .
San Antonio ......•..
Sherman-Denison . .•..
Texarka na (Te xa sArkansa s) • . ...•• . .
Tyler .•. . ... ...•....
Waco •.••... . ...• ••
Wichita Falls . • ....••
495.002
----
1969
$ 224,5 18
25.9
26.0
23.9
16
49
87,084
232,789
30.6
40.8
31.7
36 .6
25.4
27.9
952,896
23
35,999
24.7
24.1
22.3
2,051,952
6,08 1,564
8,503,224
7
21
8
95,958
159,1 53
270,612
21.3
37.8
31.4
20.6
36.2
29.9
18.6
33.5
27.3
6,050,784
-7
239,292
25.2
27.0
25.3
10
9
-3
7
6
12
14
7
7
-6
70,461
196,437
29,547
2,106,569
227,589
627,039
111,1 76
2,431,355
37,854
142,Q59
25.5
24.8
14.1
52.9
29.6
32.6
26.7
38.5
21.7
23.0
26.3
24.8
14.3
55.7
30.0
33.8
24.5
39.5
23.3
25 .9
23.7
23.1
14.1
49.9
29.2
30.3
23.9
37.6
20.5
25.2
-8
-8
0
-3
3
-4
1
-3
16
13
14
6
97,634
131,497
75,025
67,104
591,784
54,237
16.5
14.3
23.5
17.5
27.8
18.3
18.4
15.5
24.4
17.7
27.3
17.9
20.7
16.7
24.9
16.3
1,351,272 -12
2,209,176 - 1
2,916,456
2
2,295,060
0
- 14
7
12
-4
69,396
88,449
114,064
11 5,088
19.2
23.9
24.8
20.3
21.8
23.3
24.2
20.4
23.2
21.9
22.6
20.9
$8,729,769
36.7
37.7
34.6
1,809,780 -4
5,128,980 - 1
406,752 - 1
11 3,923,524 -6
6,958,1 16 -3
20,590,428 -3
2,959,428
13
93,982,680 -4
837,204 -10
3,467,256 - 16
1,602,336
1,886,484
1,712,628
1,226,220
17,176,332
1,049,484
-4
17.5
15.0
-
CONDITION STATISTICS OF All MEMBER BANKS
Eleventh Federal Reserve Di strict
9,581,106
8,761,963
8,864,611
5,475,240
3,832,534
302,366
155,695
1,077,310
---5,684,777
3,977,637
282,017
139,991
1,112,593
3,971,317
317,684
159.D93
1,120,980
3,650
26,274
77,411
3,286,723
2,933
25,252
79,727
3,244,461
2,396
22,212
91,095
3,896,329
915,978
1,61 5,218
724,005
2,086
15,486
92 1,265
1,604,884
688,831
2,104
18,527
1,009,109
2,092,472
750,530
11,983
24,745
12,600
1,350
7,500
1,350
7,000
490
756,807
375,537
364,944
135,298
13,284
978,101
1,2 48, 762
333,033
335,136
136,503
13,255
974,207
TOTAL L1A8ILITIES, RESERVES, AND
CAPITAL ACCOUNTS. . . . . . • • . . . . . . . . .. 11 ,385,934
11,905,507
Individuals, partn ership s, and corporations .•••
States and political subdivis ion s •.•... • •••••
U.S . Gove rnment .• . ..••••....•.... •• ....
Banks In the Unit e d States •••..• ...•• ••..••
Foreign:
Governme nts, ofAcial institutions, central
banks, international institutions •..•..• ..
Commercial banks •..... •.. •••••..•.. ..
Certifie d and offlcers' checks, etc •••.••. . . •
Total time and sav ing s d e posits •. . ... •....••.
Individuals, pa rtn erships, and corporations:
Savings deposits • •. .•.....•...•••• . •..
Other tim e d e posits .•......••. . ...•....
States and pol itical sub divisions •... . ••• . •..
U.S. Gov ernment (including postal sa ving s) • ••
Banks in the Un ite d States .. .. .. . .. .. ......
Foreign:
Govern ments, official institutions, central
bonks, in ternational institutions •.••...• •
Commercia l bonks ....•...•••..••..•• ..
Federal fund s purchase d and se curities sol d
under agreeme nts to repurchas e •..•..•......
Other liabilities for borrowed mon ey .•.. .• .... ••
Other lia bilities ••...••. •. .......••....••.•.•
Reserves on loans • .•. .•. ...•... •.....•..•..•
Reserves on se curities ••......••....•.....••..
Total capital accounts .... • •..••.....•..•• ••..
Jan.
Dec.
1969
------11 ,905,507 11.750,681
--- - - - -5,620,150
Tota l d emand d eposits •...•..••....•.•..•..
of turn ove r
Jan .3 1,
1970
I
1 Deposits of individua ls, partnerships, and corporations and of states
and politiCO
subdivis io ns .
!l Count y basis.
L1A8ILITIES
Total d ep osits •• ••..••.• •• ...•• • ..• •.• .•••• •
Annual rate
Jan.
1970
Total-28 centers • • . • •• $325,51 1,868
TOTAL ASSETS .................. ....... 11,385 ,934
DEMAND DEPOSITS'
Perc ent
chang e from
(In millions of dollars)
Jan. 28,
1970
Dec .31,
1969
loans and di scounts, grossl • ..••••...•••.•
U.S . Government obligations •••••....••• . .
Other se curities ••..•..•....••••.•••.•.•
Reserves with Fe d era l Reserve Bank •••• • •. .
Cash in vault .•...•...... •• ....•.....••
Balances with banks in th e Unite d States •..•
Balan~es with bon ks in foreign countriese ....
Ca sh Ite ms in process of collection . •..••• . .
Other o sse ts e •••••. .•... •••... . ....•• ..
11,498
2,151
3,267
1,309
269
1,203
12
1,235
801
11,942
2,179
3,146
1,222
268
1,6 19
12
1,652
822
TOTAL ASSETse .• •. . •• .. . . ••.•..••••
21,7 45
22M2
Demon d d e posits of banks . .•••..... . .. ..
Other d em and d oposits ••.•.... . •• ... .. •.
Time depo sit s • • ...•••....•••.....••....
1,45 6
8,880
7,079
1,919
9,926
7,246
946,714
Total d eposits •.••.•... . •. . ..........
Borrowings •......•.. •.• .....• •. .......
Other liabilities e .•. •... . ...• ..•.. .• • ••.
Total capital accountse .• •... .... ...... . •
17,415
1,637
96 1
1,732
19,Q91
1,159.
901
1,711
11,750,681
TOTAL LIABILITIES AND CAPITAL
ACCOUNTSe ......••.•.... ..••. . ..
Item
ASSETS
l
850,624
252,324
119,913
n.o.
1 Beca use of format revi sions as of Jul y 2,1969, ea rli er data are not fully comparable.
n .a. - Not available.
10,809
2,539
3,155
1,260
266
1,19~
1,117
488
-
~
L1A81LITIES AND CAPITAL ACCOUNTS
1
Be fore J.uly 2, 1969, th is item was published on a ne t basis.
Estimated .
e -
1,44 1
8,951
7,645
-
17,937
952
311
1,635
-
GROSS DEMAND AND TIME DEPOSITS OF MEMBER BANKS
CONDITION OF THE FEDERAL RESERVE BANK OF DALLAS
(In th ousa nds of dollars )
=
-
Fe b. 25,
1970
Jo n. 28,
1970
Fe b. 26,
1969
278,482
36,780
2,240
2,367,247
2,406,267
1,139,978
1,682 ,637
433,102
35,250
0
2,390,30 1
2,425,551
1,309,025
1,695,814
340,893
26, 140
0
2,11 3,276
2, 139,416
1,235,867
1,5 19,065
Ite m
G ROSS DEMAND DEPOSITS
~~tal
gold certifi ca te reserves • . . . . . ... . .....
O:hount ~ for member banks . . . .....•.••....
U .S .eG~~sco un ts and a~~a n ces •.......•• . .. .
Total e are~n m e nt securiti es .. • .. .... .. ...•..
b
M
Ele ve nth Fed e ra l Rese rve Di st ric t
(Ave ra ges of da ily flg ures . I n millions o f dolla rs)
nlng a sse ts . . . . ......... . .........
d
-
F rn or ba nk reserve de posits •.• .. . ........
e eral Reserve notes in a ct ual ci rculation .. , . .
TIME DEPOSITS
Reser ve
Country
Dote
Total
ci ty bonks
bo nks
Total
cit y banks
bo nks
196 8, January ••.
1969, Ja nuary •• .
9,923
10,752
10,250
10,497
10,306
10,373
10,692
10,793
4,560
4,935
4,746
4,867
4,726
4,750
4,947
4,910
5,363
5,817
5,504
5,630
5,580
5,623
5,745
5,883
6,698
7,627
7,353
7,272
7,223
7,268
7,203
7,1 08
2,815
3,135
2,74 1
2,685
2,646
2,690
2,628
2,568
3,883
4,492
4,61 2
4,587
4,577
4,578
4,575
4,540
Aug ust ...•
Se pt em ber.
October ...
Novem ber ..
Dece mb er . .
1970, Ja nua ry •. •
Reserve
Country
RESERVE POSITIONS OF MEMBER BANKS
El e v e nth Fe d e ral Rese rve Di strict
(Avera ges of do il y Agures . In th ousands o f dolla rs )
=-
-
It e m
RESERV E CITY BANKS
Tot~ reser ves held .. .. . .. . . . ..
C ith Fed eral Reserve Ba nk . . ..
R urrency a nd coin . ..........
Eoquire d reso rves . .. .. ........
B~~~~~roserves • . ••.... • .•••..
F
ngs .. ... .. .. .... .. ....
CO roe reserves . . ......... . . . ...
TUNTRY BANKS
o~ reserves held ..• .. . . . ....
C ith Fe deral Rese rv e Bonk ....
R urrency and coin . . .........
E: quired rese rves . ... .........
B cOss reserves . .. .. ...•... . ..
F~:~O~I;g s • .. ..•••.... . . .. . . •
A.l
orv es ... .. .. . . .... . ...
io~MEMBER
BAN KS
rese rves held •• . ... . . . ...
C ith Federal Rese rve Bon k .. ..
R e q~[::dCY and coi n . . ....... . .
E)!.cess r reServes . . ...........
~:~~~:~s:.:.: :::::: : :::: : :
4 weeks e nd e d
Fe b. 4, 1970
5 weeks end e d
759,270
704,669
54,60 1
735,11 7
24 ,1 53
28,555
-4,402
749,724
692,994
56,730
764,358
- 14,634
6,437
-2 1,07 1
Feb. 5, 1969
(In t ho usan ds of boxes )
769,728
7 12,600
57,1 28
755,492
14,236
29,292
- 15,056
80 1,84 1
610,848
190,993
77 1,212
30,629
14,255
16,374
786,188
599,549
186,639
769,379
16,809
19,585
-2,776
775,262
589,8 14
185,448
747,4 18
27 ,844
9,046
18,798
1,561,111
1,315,517
245,594
1,506,329
54,782
42,8 10
11,972
1,535,912
1,292,543
243,3 69
1,533,737
2,1 75
26,022
-2 3,847
1,544,990
1,302,414
242 ,576
1,502,910
42 ,080
38,338
3,742
BUILDING PERMITS
~~====================================
VALUATI O N (Dolla r a mo unts in thousands)
Percent change
Jan ua ry 1970 fro m
NU MBER
_____
Area
CITRUS FRUIT PRODUCTION
5 wee ks end e d
Jon. 7, 1970
Janua ry
Jan uary
January
Dece mb er
1970
1970
1969
1969
4,673
9
231
In dicate d
Sta te and crop
1969
1968
1967
5,1 00
3,100
5,380
2,5 10
3,120
3,740
4,700
7,500
4,500
6,700
1,800
2,800
ARI ZONA
O ran ges . . . . .... . ........ .
G rap efruit . ...... . ... . .. . .
TE XAS
O ran gos •..... . ...... . . . . .
G ra pefrui t .. ....... . .. ... .
SOU RCE , U.S. Deport me nt of Ag ric ultu re.
CASH RECEIPTS FROM FARM MARKETINGS
(Dollar amount s in thou sand s)
Are a
1969
Arizona .... .. .. .. . ..•... . ..
Louisi ana . .. . ............. . .
N ew Mexico .. •.....• . .......
Tex a s. . . •.... . ... . ...... . . .
643,852
601,990
345,319
908,283
2,808,053
Total . ... .. . ... . .. .. ..... .
Unite d Sta tes . .......•. . ...
$ 5,307,497
$47,43 1,047
Oklahoma • •• . •.............
Percent
chan ge
1968
$
587,187
628,743
322,353
845,983
2,669,03 1
10
-4
7
7
5
$ 5,053 ,297
$44,385,735
7
SOURCE , U.S . De portme nt of Agric ulture.
"RIZON" --...:...-------~------------
TUCson
" ' "' ' ''' ' .
519
Monro e· w t M
Shreve art es
on roe • .... ..
TEXAS P " • • • ••• • • • ••• ••
59
35 8
3,082
5,501
538
- 12
206
126
29
53 5
298
109
46
217
1,372
18
344
290
47
2,605
34
78
33
45
44
43
92 1
37
25
14 4
52
946
13,966
8,342
664
420
1,493
13,332
167
11,927
7,856
609
35 ,907
192
1,03 1
176
1,295
234
590
5,267
349
212
735
277
49 1
562
- 12
-26
65
106
- 9
120
226
35
2
23
- 11
-42
56
329
39
20
-32
30
51
7
-27
245
46 1
- 18
-37
- 86
1
-52
- 63
103
-38
57
- 13
-3 1
-37
- 61
252
-38
41
-49
9
83
-3 9
- 87
8,302
$ 11 9,243
31
- 8
lOUISIAN~" " "
"bilene
f~~~~L ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~
Co rp~:v~~~: .: . . .. . ...• •.. •
Doli
ISt l . . . . . . . . . . . . . .
Gal
orth .. .... . ........ .
t~~fr:':' :: : : ::::::::: : :: :
HQu:teston . .. .. . .......... .
laredon . • .. ........•... . .
lUb bo~k'" ...••.. .. . . •• ..
Midland ···· · .. · .. ······· .
Od
ess
. ...... . .....• .• ..
Port A~th~~ ' ..• .. ....... ...
San A
•. . .. • ........ . .
San An g.I~ ... . . . .. .. .. .. .
Sherrn ntonlo . ...... . ...... .
T e)!.Qrk~~~·· . .. •.•.. . .•.•.
~kh~t~' F~;I;: :::::::::::::
Total
~ies . ............ .
$
LIVESTOCK ON FARMS AND RANCHES , JANUARY
(In thousands)
five southwestern
stotes l
Tex a s
Unite d Stat es
Speci es
1970
1969
1970
1969
1970
Cottle .. ... . ..
Milk cottl e . •
8eef co ttl e •.
Shee p ... .....
Stock shee p .
12,2 12
576
11,636
3,860
3,560
300
959
17,Q96
997
11 ,630
56 1
11,069
4,029
3,787
242
1,020
17 ,445
973
21,590
1,253
20,337
5,364
4,903
46 1
1,676
28, 189
' 1,049
20,563
1,258
19,305
5,53 1
5,149
382
1,738
28,235
' 1,007
11 2,330
21,1 95
91,1 35
20,422
17,578
2,844
56,743
43 1,533
6,674
Fee d ors . •..
Hog s' ..••. . . .
Chicke ns:! . . .. .
Turkeys ••••• ..
1969
109,885
21,6 16
88,2 69
21,238
18,332
2,906
60,632
419,635
6,604
Ari zona, Lou is iana , N ew M ex i co , O klaho ma , a nd Texa s.
D oto aro (or Dece mber of precedi ng ye ar.
Does not inclu de com merci a l bro i lers.
.. Exclu des Arizona an d N ew Mexico, w hi ch were combi ned wi th Flori da,
Montana, and W yo min g to ovo id di sclo sure of ind ivi dual s't a te ope rat ion s.
1
:!
:I
SOU RCE, U.S. De portme nt of Ag ri culture .
Id o ho,