Full text of Review (Federal Reserve Bank of Dallas) : March 1972
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This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org) Federal Funds- A Market Comes of Age In the Eleventh District - PART I: PARTICIPATION IN THE MARKET t T adi ng in Federal funds-balances o member banks at Federal Re~erve banks-has expanded rapidly ~n recen~ years, providing more anks wIth a market in which to place excess funds for short perio~s as well as with a source of s ~rt-term borrowing. Once a ~~~ctlY New York City market in rn. I<;:h trading seldom exceeded $20 Illion a day, the Federal funds ~arket is now a nationwide system In which billions are bought (borrowed) and sold (lent) every day. R In the Eleventh Federal eserve District, this expansion Government securities buy and sell Federal funds, but commercial banks are their principal customers. Most banks, in fact, stipulate that transactions with Government security dealers be settled in Federal funds. Other financial institutions-especially agencies of foreign banks and mutual savings banks-also occasionally trade in Federal funds, but the volume of their trading is usually small and their activities in the market are concentrated mainly in New York City. Although their participation is usually limited, nonfinancial corporations sometimes use the mar- has amounted to a near-explosion. Sales of Federal funds by all commercial banks tripled between call report dates at the end of 1968 and the end of 1970, soaring from $403 million to $1.5 billion. During that time, purchases by banks in the District more than doubled, increasing from $613 million at the end of 1968 to more than $1.3 billion at the end of 1970. Commercial banks, of course, dominate the market-in the District and the nation. Participation by other institutions is comparatively minor.1 Dealers in U.S. COMMERCIAL BANKS IN THE FEDERAL FUNDS MARKET, DECEMBER 31 Eleventh F __ ederal Reserve District --- Bank deposit size (Mi llion doll ars) Percent of ban ks Buying Federal funds Seiling Federal funds Total number of District banks 1968 1969 1970 1968 1969 1970 1968 1969 1970 100 % 54 22 6 1 100% 79 39 9 3 100% 91 54 7 2 Member banks ~~gg or mo re .... . . . ... . $50 t~O ~~99 . . . .... . . . . $10 to $4 .. . .... .. .... L $ 9 ........... .. ess than $10 . . . . . . . . .. 6 28 32 210 375 6 28 31 221 354 6 33 28 242 325 67% 54 41 33 22 83% 75 52 46 44 83% 91 75 59 59 All sizes ...... . ..... 651 640 634 28 47 62 7 11 12 ~~go or more . . . . ... ... . $50°t~O$~~99 .. . ........ $1 0 to $49 ······ · ···· · · Le ....... .. .... ss than $10 .... . .. . . . 0 0 11 170 461 0 0 13 183 471 0 1 17 217 464 0 0 36 17 3 0 0 38 31 26 0 100 71 57 36 0 0 0 4 0 0 38 9 1 0 0 6 2 2 All sizes ...... .. .. . . 642 667 699 8 28 43 4 2 6 28 43 380 836 1,293 6 28 44 404 825 6 34 45 459 789 67 54 40 26 12 83 75 48 39 34 83 91 73 58 46 100 79 39 9 2 100 88 36 5 2 1,307 1,333 18% 37% 52% Nonmember banks (' ) All banks ~~gg ~~ m~re ........ . .. $50 to $~9 99 ........... $1 0 to $49 ······ · · · · ·· · Le h ............. ss t an $10 .... . .. .. . ~II sizes .. . . . . . . . . . . 100 54 16 5 1 4% 7% 7% 1. Less th SOlJRCES~n one-half of 1 percent . ~ederal Deposit Insurance Co rporation __ edllral Reserve Bank of Dall as 1. F'o~ . Sy t a detntled description of how various types of Institutions participate in the market , see Th e Federal Funds Marlcet-A Study by a F ederal R eserve • em Committee, Board of Governors of the Federal Reserve System, Washington, D.C., May 1959. 11Us' llless R eview I March 1972 1 -Federal funds market expands rapidly in the Eleventh District in recent years keto Corporations, for example, transact business with Government security dealers, and these (END-OF-MONTH FIGURES) BILLION DOLLARS transactions are often settled in 1.6 Federal funds. Corporations seldom participate directly in the FEDERAL FUNDS SOLD market, however, buying and sell1.4ing instead through commercial /( ............ banks, which hold actual title to 1.2the funds. Commercial banks are far and 1.0away the main participants in the ALL COMMERCIAL BANKS market. And since this is a market 0.8for deposits of member banks at Federal Reserve banks, it is not surprising that participants are 0.6.. ' mostly member banks. Nation...... BANKS wide, member banks account for 0.4................'.' 80 to 90 percent of the Federal funds purchased and 85 to 95 0.2percent of the Federal funds sold. NONMEMBER BANKS Furthermore, participation by nonmember banks (which, of 0.0 I I I I I I I I DEC. JUNE DEC. JUNE DEC. JUNE DEC. JUNE DEC. JUNE DEC. JUNE course, do not carry reserve bal1965 1966 1967 1968 1969 1970 1971 ances at Federal Reserve banks) is handled mainly by correspondent banks that are members. To gauge the significance of this market to banks in the (END-OF-MONTH FIGURES) BILLION DOLLARS Eleventh District, a study was 1.6 based on call report data and a survey of more than 100 banks in FEDERAL FUNDS PURCHASED 1.4the District. This article reports on the growth of the market in the District and the increase in par1.2ticipation by various types of banks. A second article will report 1.0on the characteristics of Federal funds transactions in the District 0.8and the place of these transactionS in bank portfolio management. A third article will analyze the im0.6pact of the explosive growth of the Federal funds market on the 0.4soundness of banks in the District and the servicing of local credit 0.2- '" needs. M~~BER ---" NONMEMBER BANKS 0.0 I I DEC. JUNE 1965 I DEC. JUNE 1966 I DEC. JUNE 1967 I I DEC. JUNE 1968 SOURCES: Federal Deposit Insurance Corporation Federal Reserve Bank of Dallas --....{,, I DEC. 1969 I I JUNE DEC. JUNE 1970 1971 Growth in sales ••• Although most of the expansion ill Federal funds transactions in the Eleventh District has been at member banks, small nonmember banks have also become more active, particularly in the sale of ~ederal funds. Where nonmember anks accounted for only 9 per~hnt of the Federal funds sales in e District at the end of 1968 th ey accounted for 17 percent two ' years later. re A~alysis of this growth pattern qUIres an understanding of the ~t~ucture of banking in the Disnct. There are well over 1 300 ~Onunercial banks in the District l'u~ mainly to the fact that ' t' exas-the only state lying enIrely within the District-is a unitbanki four other . .ng state. n1strtc~ states, Of theArizona allows. only st atewlde branching. Oklahoma is also a . b umt- anking state, and Lou' . onI Is~an.a and New Mexico allow y ~lUlted branching. th Wh~le the number of banks in of ~~Istrict is large, however, most b em are fairly small, at least 9~ national standards. More than P ~ercent of the banks have deM~ItS of less than $50 million. banrleover, only about half of the R {S a re members of the Federal be~s~rve System. And while memth anks are generally larger pe~n nonmember banks, almost 90 thi~~.t o~ the member banks in Ie IstrlCt also have deposits of ss than $50 ffil'llion. P and ~ticipation of various sizes fund yPes of banks in the Federal be s market in recent years can ~fuged from call report data. somee ~hese data may be subject to ad' dIstortions due to year-end to JUstrnen t s b y banks (a matter be . that discussed later), they show merc?~Ib 18 percent of the comrepor~ anks in the District their bed sales of Federal funds on ooks at the end of 1968. ho~he ex~ent of participation, Lar::er, Increases with bank size. res erv: ban~~ tend to manage their small POsItIons more closely than are rn~r ba.nks do and, as a result, funds .re likely to invest excess Also lIn the Federal funds market. brok arger banks often act as ers (accommodating banks) nUsin .... ess .u.eview I March 1972 for their smaller correspondents, purchasing funds from these banks and reselling them in the Federal funds market. Thus, two-thirds of the largest banks in the District were selling Federal funds at the end of 1968. As might be expected-since the Federal funds market is essentially a market for member bank deposits at the Federal Reserve Bank-a far larger proportion of member banks participate in the market than do nonmember banks. This is true, regardless of bank size. Of the 375 member banks in the District with less than $10 million in deposits at the end of 1968, 22 percent were selling Federal funds, compared with only 3 percent of the 461 nonmember banks of that size. But the margin of difference between member and nonmember bank participation has narrowed appreciably since that time. The proportion of banks selling Federal funds has risen sharply in recent years, advancing from 18 percent of all banks in the District at the end of 1968 to 52 percent at the end of 1970. But although the selling of Federal funds has increased at all sizes of banks, the increase has been uniformly much higher for smaller than for larger banks. The proportion of banks selling Federal funds in the $100 million to $499 million deposit group, for example, almost doubled over this two-year period. This in itself is an impressive advance, but the percentage in the less than $10 million deposit group increased nearly fourfold. But there has also been a tendency for the extent of participation to increase faster among nonmember banks than among member banks of the same size. In the $10 million to $49 million deposit group, for example, the proportion of member banks selling Federal funds did not quite double over this period, while the proportion of nonmember banks selling funds more than tripled. The most dramatic difference was at banks with deposits less than $10 million. In this deposit group, the proportion of member banks selling Federal funds increased about 272 times while the proportion of nonmember banks increased 12 times. Several factors may have accounted for this sharp rise in the number of banks selling Federal funds-especially among small banks and nonmember banks. One is that the sizable increase in the Federal funds rate in 1969 probably made sales more attractive to all banks. Nationwide, the Federal funds rate averaged about 6 percent in December 1968, rose to about 9 percent in December 1969, and fell back to about 5 percent in December 1970. The rise in rates between the 'end of 1968 and the end of 1969 coincided with the sharpest increase in the proportion of banks in the District selling Federal funds. Although the average Federal funds rate had fallen back by December 1970, there was still a marked increase in the number of banks selling Federal funds that year. This advance was probably due to the difference in demand for loans and availability of bank funds at the two year-ends. The end of 1969 was a fairly tight time for banks. Banks had sustained sizable losses in deposits over the previous year, and loan demand continued heavy. The next year ended more comfortably, with deposit inflows having resumed earlier in the year and loan demands having moderated. Thus, despite the lower Federal funds rate, the increased availability of funds probably furthered the movement into the Federal funds market in 1970. The faster influx of small nonmember banks was due partly to their having more leeway for such 3 movement than large member banks. More of the large member banks were already selling Federal funds in 1968. Starting from a smaller base, any increase in the number of small nonmember banks selling Federal funds would appear more dramatic. But the increase reflects more than that. Tight money conditions in 1969 did not hit small banks as hard as larger member banks. Deposits at member banks dropped about 1 percent that year, while deposits at nonmember banks rose 9 percent. The greater availability of funds at nonmember banks was, no doubt, instrumental in inducing them to start selling Federal funds-especially since the Federal funds rate was high. With the easing of conditions in 1970, deposits at member banks rose 10 percent but deposits at nonmember banks increased 15 percent. As a result, even in this period of relative ease, the proportion of banks in the District selling Federal funds rose generally faster among nonmember banks than among member banks. ... and purchases There are fewer purchasers of Federal funds in the District than there are sellers. Only 4 percent of the banks in the District had Federal funds purchases outstanding at the end of 1968, compared with 18 percent that had sales outstanding. Again, in view of the numerical dominance of small banks in the District, this is quite reasonable. Because of their larger excess reserve positions, smaller banks tend to be net sellers of Federal funds. In fact, the proportion of banks buying Federal funds drops dramatically with bank size. Where all banks with deposits of $500 million or more had Federal funds purchases outstanding at the end of 1968, only 1 percent of the banks with deposits less than $10 4 million showed purchases on their books. Member banks are more active in purchases of Federal funds than are nonmember banks of the same size, although the difference is much less pronounced than it was for Federal funds sales. For example, about 6 percent of the member banks with deposits of $10 million to $49 million were engaged in the purchase of Federal funds at the end of 1968, compared with 4 percent of the nonmember banks of that sizeindicating, perhaps, that size may be more important than membership in the Federal Reserve System in determining whether a bank buys Federal funds. Whether member or nonmember, small banks probably carry relatively more excess reserves than larger banks and, therefore, have less need to buy Federal funds. There has been a substantial increase in the number of banks buying Federal funds in recent years, however. The proportion of banks buying funds in the Eleventh District increased from 4 percent of all banks at the end of 1968 to 7 percent at the end of 1970. As might be expected, most of this increase was at large banks. For banks in the $100 million to $499 million deposit size, the ratio rose from 54 percent to 88 percent. For banks in the $50 million to $99 million deposit size, it rose from 16 percent to 36 percent. But for smaller banks, there was little or no change. Again, the distinction between member and nonmember banks seemed to have little bearing on the pattern at smaller banks. As in the case of sales, the percentage of purchasing banks of all sizes rose more between the end of 1968 and the end of 1969 than between the end of 1969 and the end of 1970. In some cases, the ratio changed very little between the end of 1969 and the end of 1970. In some instances, it even declined. The difference was doubtlessly due to changes in the availability of funds. Tight credit conditions at the end of 1969 brought a sharp increase in the number of banks buying Federal funds-even at smaller banks, both member and nonmember. Of nonmember banks with deposits of $10 million to $49 million, for example, the percentage buying Federal funds increased from 5 percent in late 1968 to 9 percent a year later. While the percentage of banks buying Federal funds increased sharply at all sizes of banks in 1969, the pattern varied substantially in 1970, depending on bank size. Larger banks continued to make purchases after funds became more available-and in some cases, in increasing numbers. But in most cases, smaller banks withdrew from purchases, reverting to their previous reserve management policies. The result is an impression that the sharp rise in small bank borrowing in the Federal funds market was partly only a temporary measure taken during a time of extreme credit tightness. Window dressing problems There is always the possibility that an analysis such as this will be distorted by the choice of time frames. This is especially true of the year-end data for the call reports. For these reports, banks sometimes show more liquid assets than they normally carry, or fewer short-term liabilities, in an effort to make their balance sheets appear as "sound" as possible-a matter of window dressing. And window dressing could include their Federal funds sales and purchases on these dates. These reports must, nevertheless, be used in analyzing the participation of all commercial banks in the Federal funds market. They are the only source of information on the Federal funds transactions of nonmember banks. The general accuracy of these reports can be checked, however. Member banks report their Federal funds transactions daily. By Picking dates close to those for the call reports, it is possible to evaluate the validity of call report data. To this end, Federal funds data from member banks were collected for the last reporting Week in November preceding each of the three end-of-year call rePorts. For most bank sizes, the proportion of banks buying and selling Federal funds was about the same in November as in December, indicating-for member banks at least-data consistent with the general trend of the figUres in the call reports. Extent of participation Sheer numbers of banks in the Federal funds market do not, of course, tell the whole story. While t~ere Were only six banks in the . Dlstrict with deposits of $500 mIllion or more at the end of 1970, for example, year-end call reports for 1968, 1969, and 1970 show these banks accounting, on average, for roughly a third of the Federal funds sold in the District. Their importance in the market reflects not only their size but also the fact that they function as " accOmmodating banks," buymg . Federal funds from smaller corresPondents and then selling them to other banks needing to increase their reserves. The volume of sales declines With the average bank size-down to deposit sizes of about $50 million. But next to the largest banks, banks in the $10 million to $49 lUillio n deposit group consistently supplied the greatest amount of ~ederal funds. At the end of 1969, In fact, they supplied more than the large banks-the banks that tYPiCally feel the pinch of tight credit conditions. Such conditions 11".· -mess Review I March 1972 PERCENTAGE OF ME MBER BANKS SELLING AND BUYING FEDERAL FUNDS, AS OF SELECTED DATES Eleventh Federal Reserve Di strict Bank deposit size (Million dollars) All size banks Item and date Banks selling Federal funds 1968 November 27 ..... . .... . December 31 . ....... . . . 1969 November 26 ...... . ... . December 31 ........ . . . 1970 November 25 ........ . December 31 . Banks buying Federal funds 1968 November 27 .......... . December 31 . .... . .... . 1969 November 26 .......... . December 31 .... ...... . 1970 November 25 .......... . December 31 $500 or more $100 $50 $1 0 $499 $99 $49 to to to Less than $10 33% 28 80% 67 79% 54 41% 41 44% 33 25% 22 47 47 83 83 86 75 58 52 46 46 44 44 69 62 100 83 85 91 86 75 65 59 68 59 9 7 100 100 71 54 38 22 8 6 2 1 13 11 100 100 79 79 65 39 14 9 3 3 15 12 100 100 94 91 54 54 13 7 3 2 surance Corporation SOURCES : Federal Depos It IBnank of Dallas Federa l Reserve SALES OF FEDERAL FUNDS BY COMMERCIAL BANKS, DECEMBER 31 Eleventh Federal Reserve District (Million dollars) Bank deposit size (Million doll ars) Total sales Average sales Nonmember banks $500 or more .. . .. $100 to $499 . .. . .. $50 to $99 . $10 to $49 . . Less than $10 . . ... All sizes All banks $500 or more ... .. $100 to $499 . . ... . $50 to $99 .... . .. . $10 to $49 .. ...... Less than $10 . . .. All sizes 1970 1968 1969 1970 $146 86 19 79 38 $96 149 44 110 63 $551 325 65 205 106 $36.5 5.8 1.6 1.1 .5 $19.2 7.1 2.8 1.0 .4 $110.1 10.8 3.1 1.4 .5 368 462 1,252 2.0 1.5 3.1 0 0 12 18 4 0 0 17 52 48 0 5 43 132 71 2.4 .7 .1 3.4 1.0 .4 5.0 3.6 1.2 .4 117 251 .6 .6 .8 146 86 31 97 42 96 149 61 162 111 551 330 108 347 167 36.5 5.8 1.8 1.0 .4 19.2 7.1 2.9 1.0 .4 110.1 10.6 3.3 1.3 .5 $403 All sizes ..... 1969 35 Member banks $500 or more .. $100 to $499 . . . $50 to $99 ... $10to$49 .. Less than $10 ..... 1968 $579 $1,503 $1.7 $1.2 $2.2 t totals because of rounding . NOTE : Details ma ln8 a~~t fnsurance Corporation SOURCES : ~:~:~:I R:~erve Bank of Dallas y t 5 .. PURCHASES OF FEDERAL FUNDS BY COMMERCIAL BANKS, DECEMBER 31 Eleventh Federal Reserve District (Million dollars) Bank deposit size (Million dollars) Total purchases 1969 1968 1970 1968 Average purchases 1969 1970 Member banks $500 or more .... $100 to $499 ..... $50 to $99 ....... $10 to $49 .. . .. .. Less than $10 .. . . $495 98 7 7 1 $642 218 35 15 2 $989 276 19 13 2 $82.5 6.5 .9 .6 .3 $1 06.9 9.9 2.9 .8 .2 $164.8 9.2 1.3 .7 .3 All sizes ... ... 607 912 1,298 14.1 13.4 16.7 Nonmember banks $500 or more .. . . $100 to $499 . ... . $50 to $99 ..... . . $10 to $49 . . ..... Less than $10 .... 0 0 0 5 0 0 6 1 4 .8 ~ 0 0 16 13 1 (1 ) 3.2 .7 .3 6.0 .3 .5 All sizes . . .. . . 6 30 12 .8 1.1 .8 All banks $500 or more .... $100 to $499 . . . . $50 to $99 . ... .. . $10 to $49 ....... Less than $10 .... 495 98 7 12 1 642 218 51 28 3 989 276 25 14 6 82.5 6.5 .9 .7 .3 106.9 9.9 3.0 .8 .2 164.8 9.2 1.6 .6 .4 $613 $942 $1,31 0 $12.3 $9.8 $14.4 Ali sizes . . .... -- 1. Less than $500,000 NOTE: Detail s may not add to totals because of rounding. SOURCES: Federal Deposit Insurance Corporation Federal Reserve Bank of Dall as TOTAL SALES AND PURCHASES OF FEDERAL FUNDS BY MEMBER BANKS, AS OF SELECTED DATES Eleventh Federal Reserve District (Million dollars) $500 or more 27 ..... 31 ..... $432 368 $1 35 146 $151 86 $1 9 19 $80 79 $47 38 26 ... . . 31 ..... 622 462 279 96 127 149 39 44 94 11 0 83 63 1,1 06 1,252 405 551 339 325 79 65 172 205 111 106 345 607 203 495 110 98 21 7 9 7 2 1 ... . . 1,024 912 633 642 305 218 57 35 26 15 3 2 . ..... 1,117 1,298 696 989 374 276 22 19 22 13 3 2 25 ... 31 Total purchases 1968 November 27 December 31 1969 November 26 December 31 1970 November 25 December 31 . .. .. NOTE : Details may not add to totals because of roundi ng. SOURCES: Federal Deposit Insurance Corporation Federal Reserve Bank of Dallas 6 Less than $10 All size banks Item and date Total sales 1968 November December 1969 November December 1970 November December Bank deposit size (Million dollars) $100 $50 $1 0 to to to $499 $99 $49 were prevailing at the end of 1969, and large banks probably had less money to put into the Federal funds market than smaller banks. Growth in sales between the end of 1968 and the end of 1970 was fairly uniform for all sizes of banks, rising roughly 3 % times over this period. There were some sharper increases in the volume of funds supplied by nonmember banks, however, particularly by smaller banks. The amount supplied by nonmember banks in the $10 million to $49 million deposit class rose more than seven times over these two years, but the amount supplied by nonmember banks with deposits less than $10 million rose more than 17 times. These increases reflected not only more banks entering the Federal funds market but also a larger average amount sold by each bank. Average sales per bank are, of course, greater at large banks than at small banks. This was true at all three year-ends and at member and nonmember banks alike. Moreover, the range of difference was quite wide. At the end of 1970, for example, sales outstanding at the largest banks averaged $110 million while those at the smallest banks averaged only $500,000. Growth in the average size of sales has also been greatest at the largest banks. Where the average size of sales at the six largest banks tripled between the end of 1968 and the end of 1970, the increase at banks of the smallest size was only about 25 percent. Again, the greater increase at larger banks partly reflects that most of the sales of smaller banks are made to these larger accommodating banks, which then resell the funds. It is clear, nevertheless, that the increase in Federal funds sold in each size class over the past feW years reflects both the increase in the number of banks participating in the market and the increase in ~he average size of sales at each . ank. At larger banks most of the lllcrease h as been due 'more to a . rlS' t h e average amount of the e In ~ransactions. At smaller banks the lllcrease h as been due mainly to a ' . l'lse in th e number of banks selling . F ederal funds F . i ederal funds purchases are fv en more concentrated at the s~rgest banks. All three call reports six largest banks in the .ow n1St·theaccounting for almost 75 flc t p~rcent of the Federal funds pur~ ~ses. Moreover, the amount of eral funds purchased drops ~uarplY with the size of banks. rchases at the smallest banks Where relatively insignificant Weth er the banks were members ' or ~onmembers. sUbs~ere .ha~, nevertheless, been a at anh.alIncrease in purchases t SIzes of banks since the ~~ of 1968. In dollar terms, the I rease has been greater at the t:~~r ~anks. But in percentage s, It has been greater at ~~~ler banks. From the end of at th to .the end of 1970, purchases d be SIX largest banks roughly in°~ led. But purchases at banks Ii e $100 million to $499 milp~~ ~eposit size nearly tripled, and ban~ a.ses at the smallest size T s Increased six times. W s he pattern of this expansion la: almost certainly due to the ent~e~ number of small banks bank~ the market. Where large Fed s ad long before integrated Iiabili:l fun~~ purchases into their hank y PosltlOns, many smaller ning: Were probably just begin1968 ~ buy Federal funds in late age " s a result, a sharp percentCoul~crease in their purchases Thi P~obably be expected. Chan s ~s borne out further by the Fed ge In the per-bank average of Size:r~l ~nds purchases at various perio~ nks Over this two-year in th ' lth only a nominal rise fund e average size of Federal s Purchases at small banks- h :t0s W nUs' lIle.ss Review I March 1972 an advance from $300 million to $400 million-the sixfold increase in the total dollar volume of purchases by these banks seems due mainly to new entrants into the market. Large banks, on the other hand, increased their average purchases appreciably. The largest banks more than doubled their average purchases. Therefore, as in the case of sales, the increase in purchases of Federal funds at large banks has been more a function of increased volume of purchases than any increase in the number of banks in the market. But the reverse is true of the increase at smaller banks. Window dressing again Again, to check the reliability of call report data that might have been distorted by window dressing, data for the last of December were compared with Federal funds sales and purchases of member banks at the end of November pre- ceding the three call reports. The consistency was not quite as good as the earlier check into the proportion of banks buying or selling Federal funds. This was expected, however, since sales and purchases include variations not only in the number of banks in the market but also in the average size of their transactions. Consistency was poorest among large banks. This, too, is not surprising, since large banks are more active in the market and have wider swings in their Federal funds positions. Overall, however, both total and average purchases and sales at the end of November were consistent enough with those on dates of call reports to bear out the general conclusions of the previous analysis with regard to member banks. Summing up The sharp rise in the dollar volume of Federal funds transactions in the Eleventh District, then, re- AVERAGE SALES AND PURCHASES OF FEDERAL FUNDS BY MEMBER BANKS, AS OF SELECTED DATES Eleventh Federal Reserve District (Million dollars) $500 or more $100 to $499 27 .. . . . 31 ..... $2.0 2.0 $33.8 36.5 $6.8 5.8 $1 .5 1.6 $1.1 1.1 $0.5 .5 26 ..... 31 ..... 2.0 1.5 55.8 19.2 4.5 7.1 2.1 2.8 1.1 1.0 .5 .4 25 . . ... 31 . .... 2.7 3.1 67.5 110.1 12.1 10.8 3.3 3.1 1.2 1.4 .5 .5 6.2 14.1 33.8 82.5 6.1 6.5 1.7 .9 .7 .6 .3 .3 12.0 13.4 105.5 106.9 14.5 9.9 2.9 2.9 1.0 .8 .2 .2 12.6 , 16.7 116.0 164.8 12.5 9.2 1.5 1.3 .8 .7 .3 .3 Item and date Average sales 1968 November December 1969 November December 1970 November December Bank deposit size (Million dollars) $50 to $99 All size banks Average purchases 1968 November 27 ..... December 31 .... . 1969 November 26 . .... December 31 .. . .. 1970 November 25 . .... December 31 .... . SOURC ES: Federal Deposilinsurance Corporation Federal Reserve Bank of Dallas $10 to $49 Less than $10 fleets, at' least in part, the substantial change in the number and types 0i1l1anks participating in the market. The market is still dominated by a few large banks. But these bank8)have maintained their share of the market over this twoyear period' only by tripling their outstanding sales of Federal funds and doubling their outstanding '. purchases. The inroads smaller banks have maoQll:into the market, on the other hand,~ reflect the'increasing num- ' . ber of such banks that have entered the market over this period, rather than any significant increase in the dollar volume of transactions by' those already.in the market. "'r . This movement of small banks into the market is most apparent in the increase in Federal funds sales-an increase probably spurred by the high interest rates on Federal funds over most of the period and by the greater availability of funds at small banks. But the recent 'pattern of growth in Federal funds trading is also affected by differences in the portfolio management policies of various sizes of banks, as well as the characteristics o£.rFederal funds transactions. These are matters to be explored in an article next month. ' -Joseph E . Burns , r , ',. I P New par banks Th,~ Bank of Commerce, Point Comfort, Texas, an insured nonmember bank loeat ed 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 10, 1972. The officers are: Jno. J. Faubion, Jr., President and Chairman of the Board; Edwin A. Wagner, Executive Vice PreSjdent; James McSpadden, Vice President; and Fred A. Knipling, Vice President an'd' Cashier. , ~ T~e' Western State Bank, Midland, 'Texas, 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, February 11, 1972. The officers are: William J. Mewhorter, President; Charles Danley, Vice President; and Steve Short, Cashier. 3. , The Community Bank, Houston, Texas, an insured nonmember bank located in the territory served by the Houston ~ranch of the Federal Reserve Bank of Dallas, was added to the Par List on its opening date, February 15, 1972. The officers are: Robert A. Partain, Presiaent, and Preston H. Rachal, Vice President and Cashier. 8 Federal Reserve Bank of Dallas March 1972 Statistical Supplement to the Business Review - Total credit at weekly reporting commercial banks in the Eleventh District rose only slightly in the four weeks ended February 23. But even this slight gain was in con.trast to declines in comparable Pel'lods for the past six years. ;Reflected in the rise were moderate ~creases in total loans and holdgS of U.S. Government securities hat offset a reduction in holdings of mUnicipal issues. Total deposits advanced substantially. The moderate rise in total loan ~emand reflected larger than usual Increases in business and real tate loans, probably resulting rom continued improvement in ?eneral economic conditions and ricreased construction activity. I emand for most other types of oans was slightly weaker than seasonally expected. Mainly belaus e of increased holdings of dOng.-term Government issues, the ecline in total investments was ~hio~siderablY less than usual for Speriod. Inflows of demand deposits and ~onSumer-type time and savings :Posits increased sharply, and a moderate increase in large r S outstanding, total deposits OSe substantially. With a sizable eJrPansion in deposits and only llloderate loan demand, banks ~a~e considerable reductions in 11 elr Eurodollar borrowings and et Purchases of Federal funds. f r ci5? Jhe s~asonally adjusted Texas initUstrlal production index resumed ills upward trend in January, movto a new, high of 125.9 percent g ~ts 1J67 base. Although most s?ns Were moderate, renewed a.l[e~gth was apparent in almost 'l'h manufacturing industries. e only exception was the print- ol ing and publishing industry, which showed a slight decline in output from December. The textile industry showed the largest gain, increasing its output 4.4 percent. The apparel industry increased its production a substantial 2.4 percent, and petroleum refining showed a strong gain of 2.3 percent. Production of both durable and nondurable goods ran well ahead of year-earlier levels. Mining output recovered from its December drop, advancing 2.3 percent. The largest month-tomonth gains were in natural gas liquids, up 3.0 percent, and crude petroleum, up 2.3 percent. Distribution of electricity continued to slow, causing utility output to drop 1.5 percent from its December level. Even with this drop, however, utility output was still 6.9 percent more than in January 1971. only service industries showed a decline from December-a drop of 0.2 percen~. The greatest improvement was In construction, which ~howed 3.1 percent more jobs than In December. Employment in trade rose a stron?" 1.8 percent, and the transportatIOn and public utility group showed a gain of 1.3 percent. The only year-to-year loss in employment was in mining, which nevertheless showed a 0.8-percent gain over December. Department store sales in the Eleventh District 'were 8 percent higher in the four weeks ended February 26 than in ' the corresponding period a year earlier. Cumulative sales through that date were 9 percent higher than in the same period a year before. The Texas oil allowable was raised for March to 86 percent of Registrations of new passenger maximum efficient production. automobiles in Dallas, Fort Worth, The boost-which returned the Houston, and San Antonio fell allowable close to the record 23 percent in January. However, rates of late 1970-came after an registrations were still 17 perunusual second increase in the cent higher than in January of February rate. In response to refinlast year. ers' requests for more Texas crude, the allowable for February was The seasonally adjusted prelimincreased to 75.8 percent from inary estimate of total employment the previously announced 71.7 in the five southwestern states percent. Meanwhile, Louisiana rose a significant 1.3 percent in continued for March the 75January. And with this sharp percent flow rate first announced gain in employment, the average in November. The rate in Oklaunemployment rate for these states homa continued at 200 percent of dropped to 4.5 percent, the lowest maximum efficient production, and rate in more than a year. Nonfarm the rate set in New Mexico for wage and salary employment rose January and February was con1.0 percent over December and 3.3 tinued for March and April. percent over January 1971. Regulatory commissions in Texas Employment gains were about and Louisiana expressed doubt equal in manufacturing and nonthat their states could continue manufacturing. Of the industry meeting the increasing demands groups outside manufacturing, (Continued on back page) CONDITION STATISTICS OF WEEKLY REPORTING COMMERCIAL BANKS Eleventh Federal Reserve District - (Thousand doll a rs ) Fe b. 23, 1972 ASSETS Jan. 26, 1972 Fe b. 24, 1971 1,222,013 7,350,532 Commercial a nd in dustrial loans . • .•..•. • •... • 3,411,347 1,1 55,313 7,32 1,455 681,027 6,601,660 Other •• • • • • ••••. • •. • •• •••••• •••. •• •••• Total U.S. Governm ent securiti es . . ... ..•..... . Trea sury bills • ••• •.•••.••• ... .•••••••• .. Trea sury ce rtificates of indebtedness .•.•... . Tr ea sury notes and U.S. Gove rnm ent bands maturing: Feb . 24, 1971 10,735,04B 11,676,602 6,625,982 4,534,081 429,591 161,153 1,364,476 6,402,055 4,417,074 350,787 206,329 1,308,406 3,3 35 41,803 91,543 5,398,439 2,392 32,103 B4,964 5,274,547 2,8 19 28,97 2 98,160 4,667,967 1,122,49B 2,781,515 1,365,105 10,042 94,B79 1,096,221 2,757,116 1,302,291 15,453 82,566 974,68 8 2496,56 1 1'057,337 , 30,581 95,015 23,300 1,100 19,800 1,100 12,685 1,100 1,789,179 39,703 397,116 136,235 23,481 1,091,407 1,910,845 41,601 394,511 144,211 22,632 1,092,937 999,089 68,222 401,, 159 138,439 19,47 1 1 032,548 15,283,339 ~3,393.gg ---3,177,783 Total d emand d eposits ... •.............•.... 3,3B2,989 169,161 165,987 119,010 Banks in the United States •••.• • •••••••.••. 1,125 51,142 500 53,749 500 43,928 bonks, and internationa l instituti ons •• .. . . Comm ercial bonks . .. •.. . . . ...... •.••.• 4,650 445,404 5,254 449,502 1,6'45 429,629 Ce rtifl e d and offlcers' checks, e tc . . . . . ... .... Total tim e and sa ving s de posits ..............• Individua ls, partn ership s, and corporation s: Saving s de posits .. . .. . . . .. .. . .... . .. . .. 121,278 477,793 912,421 20,911 36,487 820,323 130,787 492,273 901 ,182 20,341 28,48B 824,305 189,818 438,467 653,373 13,832 10,386 733,026 0 878,490 3,372,420 0 866,098 3,389,284 0 790,263 2,893,075 - - -- Ag ric ult ural loans, excl uding CCC Real estate loans .... ..... . ............•... loan s to domestic comm ercial ban ks •.... . ..... loon s to foreig n bonks... . . ... . .. .. •.....• .. Consum er instalm ent loans. .. . . .. ..••.. ..•... loans to foreig n governments, official institutions, centra l ban ks, and international institution s. •.•. ••• •. .. ..• . .... . • . ...... . Other loan s. .••. . ... . .... •. ...••....•... . . Total investments ...... •......•..... •.. .. . . . . LIABILITIES Jan . 26, 1972 Total de posits . ... . ............... . .. ........ 12,024,421 Federal funds sold and se curities purcha se d under a g reeme nts to resell •....... .. • . • •• • •• Oth er loon s and discounts, gran .. . ..••••• • ••• •• certiAca tes of inte rest .••.. . ...•• . • . . .. ... . loans to brokers and d ealers for purcha sing or carrying: JJ.S. Government securities •• • . ... • • .. ..•... Other secu rities .. . . . .. .•• ..•• . ... •• .....• Other loon s for purchasing or co rrylng: U.S. Government securities. '••••..••...••... Oth er se curitie s.••... .. ... ... ............ loans to nonbank Ananclal institutions: Sales financ e, personal finance, facto rs, ond' oth er business cre dit companies . . . •... Fe b. 23, 1972 Ind ividuals, partn erships, and corporations .. .. States and political subdivisions ...... ...... U.S . Gove rnm ent . . ............ . ... .... .. 6067,081 4: l ll,29~ 330,82 166,128 1,328,883 Foreign: Governments, ofAcial institutions, central 1,091,917 124,750 0 ---1,077,185 125,4B4 0 - --978,602 123,093 0 Oth er tim e d epo sits • ... .... .. •... . .. . .. States and political subdivisions ..•...... . .. U.S. Governm ent {including po stal saving s) . • . . Bon ks in th e Unite d Stat es • .. .. . . •..•.... . . Foreig n: Governm ents, ofAcial institutions, central bonks, and international institutions . • . .. . Comm ercial bonks . . •.. ... •.. . .. . ... . .. Fed eral funds purcha se d and securities sold und er agree ments to repurchas e ••........•.. . Oth er liabilities for borrowe d money .••. . . . . .. .. Other liabilities • • • •...••. . •.• • .. . ... • .. ....•. Reserv es on loons ••.• . .. ... .. . ... . • •. •.•. . ... Reserves on securities • . •.••..•..••. ... .. . . . ... Total capito l accounts .• • •..••••••..•..... . ... TOTAL LIABILITIES, RESERVES, AND CAPITAL ACCOUNTS • • • •• . ••••••.••••• . 15,501,542 193,261 586,355 187,551 187,356 599,905 164,440 98,9Bl 2,028,663 32,882 1,646,574 16,640 177,538 1,490,549 929,926 98,105 470,981 12,475 16,686 167,769 1,312,009 1,038,574 100,931 442,279 12,111 9 1,793 143,224 1,171,427 917,362 88,482 572,826 7,998 554,541 511,383 TOTAL ASSETS • •••.••• • . • • • • • • •.••..•••• 15,501,542 15,283,339 ---13,393,976 - 174,252 512,003 169,254 69,314 2,017,0 11 ---- .-:.-- Within 1 year • • • ••. •• • • • ••• • •.•••. • •• . 1 year to 5 years • • • •. .. . . . .. ..... • .. .. After 5 years •.••••••. • ••.••••.••.•••• Obligation s of states and political subdivisions: Ta x warrants and short- term notes and bill s•• All other ••• •••• .• •• • •• •.• • • •. • • • •.••.•• Oth er bonds, corporate stocks, and securities: Certificates representing participations in f e deral ag ency 'loans• • •.....•...• . ••. .. All other (including corporate stocks) •• • • .•••• Cash Items in procen of coll ection ••••.... . . •. . .• Reserves with Federal Reserve Bank • ..... . .. • . .• Currency and coin • • •. .......•...•. . •........ Balances 'with banks in' the Unite d States . . . . •. . • . Balanc es with banks in foreig n countries •..... .. .• Other a ssets (includ ing investments in sub sid ia ries CONDITION STATISTICS OF ALL MEMBER BANKS Eleventh Federal Reserve District (Million dollars) Dec. 29, 1971 Jan. 27, 14,74B 2,434 4,636 1,708 303 1,257 14 1,525 860 14,825 2,611 4,572 1,687 323 1,336 17 1,624 928 12,87 8 2,280 3,834 1 46 1 '282 TOTAL ASSETSe ••••••• • • . • ••• • • ••• . • • LIABIlITIES AND CAPITAL ACCOUNTS 27,485 27,923 D emand d e posits of banks .• . .•• • ••.•••.• Other d emand d e posits• . . .....•.. . • . .•.• Time dopaslts • ••• • •••• .. ••• . • • • • • •••• • . 1,721 10,071 10,689 1,812 10,734 10,457 Total d eposits•• . ..... . •.• . ••••.••.••• Borrowing s .• • .... . ... . ..•.. . . . . . • . .. . • Other lia bilities o .. ................. . ... . Tota l capital accounts e . . .. . .. . .....•. .. . 22,481 1,998 1,088 1,918 23,003 1,726 1,287 1,907 27,485 27,923 Ite m 460, 11 9 ASSETS loan s and discounts, gran . .. . . ..... ... . . . U.S. Governm ent obligation s•.. ... ..• .. .. . Other securities • • . • •••••......• .. •••••.• Rese rves with Fed eral Rese rve Bank •••• • ..• Co sh in vault •.• . •.•. • . • ••.•.•.•.•. •. . • • Balances with banks In the United States •••• Balanc es with bank s in foreig n countries e . ... Cosh Items in proc ess of coll ection • . .• ...... Oth er assetse ... •.. ... • . • . .•• . •••.•.••• RESERVE POSITIONS OF MEMBER BANKS Eleventh Federal Reserve District (Averages of dally figures. Thousand dollars ) Item 4 w eeks end ed Fe b. 2,1972 5 wee ks end ed Jan. 5, 1972 4 weeks ended Feb. 3, 1971 888,099 B24,254 63,845 876,670 11,429 0 11,429 851,425 785,14B 66,277 889,126 -37,701 0 -37,701 820,983 764,630 56,353 817,634 3,349 0 3,349 959,336 746,502 212,834 928,953 30,383 528 29,855 912,046 706,155 205,891 907,40 1 4,645 1,924 2,72 1 B58,082 658,507 199,575 82B,250 29,832 214 29,6 18 1,847,435 1,570,756 276,679 1,805,623 41,B12 528 41,284 1,763,471 1,491,303 272,168 1,796,527 -33,056 1,924 -34,980 1,679,065 1,423,137 255,928 1,645,884 33,181 214 32,967 RESERVE "CITY BANKS Total reserves held •••.... .... . . With Fed eral Rese rve Bank •••• Currency and coin ••• . . ... ... Requir ed rese rves • • ••.•••..••.. Excess reservos • •.•.•.. ........ Borrowings . •..•••..... . ..•... Free reserve s• •. •.•.... ..•.. . • COUNTRY BANKS Total reserves held . . • . .. • .. • • .• With Fed eral Reserve Bank ••.• Currency and coin ••• . ... . • .. Required reserves • •• • .•• .. .. ... Exc ess reserves ••.............• Borrowing s .. . .. ....••• ....... Free rese rves • . .... .......•... All MEMBER BANKS Total reserves held . .. . •.. .... . • W ith Federal Reserve Bank •••• Currency and coin .••.. ...... Required reserves . .. . .•.. . .... . Exce ss rese rve s••.. ... . . ... . .• . Borrowings ..• •.. ... . ..• . ..•. . Free reserves •.. .• ... •• • . •.. • . --- Jan. 26, 1972 TOTAL LIABIlITIES AND CAPITAL ACCOUNTse • ••••• •• ••••••••. •••• • • not consolidate d) • •• .• • .• • •••• • ••• •• ••.• • •• 1~ 1 ,4~~ - 1,418 882 ~ =1,83 4 - 9,468 9,130 20,432 1,113 107 1 1:838 - ~ ==:=::-- e-Estlmated CONDITION OF THE FEDERAL RESERVE BANK OF DALLAS (Thousand dollars) -' Item Feb. 23, 1972 Jan. 26, 1972 Total gold certiAcate reserves . ... . ....... .. . Discounts for member banks ... . ••. . •.. . . ... Other discounts and advanc es •.. .• ..••....• . U.S. Governm ent securities ... . . ..... . .. ....• Tota l earn ing ossets . .. .... . .• ........ . .. .. M e mb er bonk r eserve d e posits . • ..... . .. . . •. Fed eral Rese rve notes in actual circulation . ..•. 200 805 3,179,109 3,179,309 1,612, 124 2,081,315 3,252,146 3,252,95 1 1,708,360 2,078,856 Fe b. 24, ~ ---------------------------------------580,08~ 526,046 390,426 o o o 2,807,~~~ 2,807'08 1 1,558, 58 9 1~ ---------------------------------------- BANK DEBITS, END.OF·MONTH DEPOSITS, AND DEPOSIT TURNOVER SMSA's in Eleventh Federal Reserve District - (Dollar amounts In thousands, seasonally adjusted) DE81TS TO DEMAND DEPOSIT ACCOUNTS' January DEMAND DEPOSITS' Percent chango from Annual rate of turnover 1972 December Januar y basis) 1971 1971 3,602,736 11,192,916 1,010,052 2,379,888 6,782,880 14,453,880 7,213,380 1 -6 Standard metropolitan (Annual-rate statistica l are a OUISIANA. Monroe . . . . . • . . . . • . . . • • • . . • • . . . • . . . . • . • • . . . . • . • • N Shreveport. . . ... ............... .... ........ . . . . . TEW MEXICO. Roswell' . . ..... .... .......... . ... .. .. ... . . . ... EXAS, Abil. n.. . . • . . • • • • .. . . • • . • • • . • . • . • • • . . . . . • • • • . • . . . . • • Amarillo . . • . . . • • . . . • . . . . . • • . . . . • . . . . • • . . . . . • • • . • • • • . Austin. . . ... .. . . . .. .... .. . .. . . ...... . . .... . . . .. . .... 8eaumont·Port Arthur·Orange... . ........ .. . .. .. . . . . . . .. :rownsCilirHor~ngen.San 8enlto •• ••.•... ...••. . • • ; .. . . . • ryan C - ~h ege tatlon ... ...................... .. ...... January 31, 1972 January 1972 D ecember January 1971 --~~--~==~--------~~~--~~~--~~--~--~--~ tRIZONA, Tucson. • • . . . . . • . . . • • •. . . • . • . . . • • • . • • • •• . . • . • . . • . . $8,549,028 1% 24% $307,388 3 0 28 16 ; -4 ?'~:4'i~~ 7237'056 f~~~1~rr<[[[i[ii[iiiiiiiiiiiiiiiUiiiii« 1:~;gH~i ~l Galveston-Texas City...... ... . ... ........ .. ..... .... .. &~~~~~':'.: ::::::::::::::::: ::::::::::::::::::::::::: McAlien-Pharr-Edlnburg. . . . . . . • . . • • . . • . • . . . . . • • • . . . . . • • 1~ 3,132,492 ~ :gt Tm:m 1 2,605,104 f:r~~;~~{L} I[i i[i iii ii iii iii iii[ii iii iii [iii iii 2~i~f!ii;1 Texarkana (T.xas-Arkansas). . . ... . .................. ... ~~ift~:~~lis:.:.::::: : ::::::::::: :::::: ::::::::::::::: : 1~ ~:m:m ~9 c.nters... . .. . . . .... ... ... . .... . .. .. .. .... ...... .. $423,455,988 ~. Deposits of Individuals partners hips and corporations and of states and poI/tical . County basis ' , 98,952 29.5 33.8 37.3 22.1 20.3 38.7 44.0 23.3 22.3 38.6 39.4 27.2 27.1 24 .8 26.4 14.6 127,025 17.9 20.2 22.2 28.9 22.5 22.7 21.9 38.9 31.2 23.8 25.9 23.9 27.3 15.4 57.4 31.9 34 .8 24.3 41.8 23.4 23.7 16.6 13.4 18.2 19.7 27.6 17.2 18.9 21.8 25.3 20.7 34.9 27.6 44.8 21.8 22.6 16.6 14.9 17.2 19.3 28.8 16.7 18.3 23.2 24.6 20.6 $10,742,848 40.2 38.9 40.2 170,054 372,290 259,541 87,548 46,985 262,330 34,555 2,596,724 263,917 743,158 125,607 2,983,5 19 45,219 178,633 136,927 148,998 ;i 1; ~1 5g 77,362 751,587 7 1,397 ~g 6% 30.7 35.8 40 .5 43,538 106,751 14 :~ 54 17 19 32 21 H · ?~ 1~ 28.8 36.3 280,637 100,942 ~ 1,748,040 IZ 1971 80,541 11 2,623 128, 100 13% 56.0 32.7 37.2 25.4 44.2 26.1 30.8 19.9 14.6 18.3 19.8 30.0 28.0 24.7 25.6 20.6 21.2 13.9 62.0 30.7 subdivisions INDUSTRIAL PRODUCTION (Seasonally adJus1ed Indexes, 1967 = 100) January Ar.a and type of Ind.x BUILDING PERMITS ""- VALUATION (Dollar amounts in thousands) Percent change --- January Area .... RIZO NA l TUcson OUISIANA············ ·· · ·· • Mo Sh nro ._ wos t Monree •••. • .• T ....~veport •• .• . ••...... . .. EX .... bll. n• .... marlll~··· . .............. :~stln •• : : :::: :: ::: : ::::: : Br:urnont ... . .. . . . .... .... Co Wnsvlll ...... . . .. . ..... . Dalf us Christi • • .••• • •..•..• Denl~~~ " " " '" •• • •• ••••• Elp .. . .... ...... .. .... FortaV;' ' " • • .•. •• .. • • •. •. Gal orth • .• .. • . . . ... ..•• HOll \feston ••• . • • •• .• • • .•.•. lQres~~n • •• . • • •• • •• • ••• •• .. lUbb •••. . •.. • • •• .... . .. Mldl:~~"""""•. •. .••' ." ... " " Od. ••• • • • •. ssa PortA ............... .... San /thur . ... .... ........ San ..,ng e k ....... . . . . . .. . Sharm~~onlo •• • •• • . •• • . • ..• W: T. ~ WI January 1972 from NUMBER ...... .. .. .... r kana . .... . .... .... . . .... h~·· ·· ············· ·· · Total~2t: :alls ••••.•. •• ... . .. ~'tles . . ............ January December 1971 1972 1972 694 $18,009 69 401 1,419 3,714 65 -20 53 125 523 153 97 460 1,250 27 408 372 55 2,393 61 175 91 73 60 86 1,314 42 36 175 59 613 2,252 16,877 1,302 631 4,408 33,226 321 28,099 6,222 250 38,307 1,537 3,026 1,637 715 336 605 11,537 501 616 1,394 876 29 91 -33 16 -11 -66 99 157 88 29 -7 -8 639 -8 1 225 119 265 51 -25 127 -35 -46 -70 9,252 $178,430 80% 2% January 1971 319% -25 51 1972p TEXAS Total industria l production . . .. .. Manufacturing . ••....• . •..• • . • . Durabl... . ... ... ....... .. . .. Nondurabl ...... .... ..... ... . Mining . . ... ..... . .. . .. . ....... Utllitle ....... .. .. .... ......... UNITED STATES Total Industrial production .•••.. Manufacturing ••••.••••• • .•.•.• Durable ................. . ... Nondurabl.. .. . . .... . ....... . Mining ............... . .. .... . . Utlllti.s .. .. .... ...... . . . . ... . . December 1971 November 1971 January 1971 125.9 129.4 137.2 123.7 112.8 143.3 124.1 127.6 135.5 121.8 11 0.3 144.1 124 .6r 127.4r 137.6 120.0r 112.4r 145.4r 113.2 116.2 134.0 107.9 107.6 105.7 98.4 116.5 107.3 137.1 107.0 105.2r 98.0r 11 5.8r 102.0r 139.6r 105.3 103.3 98.1 110.9 111.1 129.6 106.1 98.4 117.2 108.4 137.2 120.3 120.5 130,6 p-Prellmlnary r-Revlsed SOURCES: Board of Gove rnors of the Fe de ral Rese rve System Federa l Reserve Bank of Dallas 104 100 14 74 66 8 42 -32 271 44 -87 4 5 -47 539 32 31 73 101 -44 -23 8 -22 45% GROSS DEMAND AND TIME DEPOSITS OF MEMBER BANKS Eleventh Federal Reserve District (Averages of dally figures . Million dollars) GROSS DEMAND DEPOSITS Oat. Total city banks Country banks 1970danuary • ••• 1971 . January .... August .. . .. September. October • • • 10,793 11,532 11,468 11 ,571 11,562 11,641 11,981 12,3 13 4,910 5,236 5,246 5,311 5,246 5,264 5,519 5,580 5,883 6,296 6,222 6,260 6,316 6,377 6,462 6,733 Reserve November .. Decemb er •• 1972. January •• • . TIME DEPOSITS Total 7,108 9,038 9,615 9,735 9,977 10,025 10,273 10,672 city bank. Country bank. 2,568 3,635 3,714 3,769 3,819 3,879 4,044 4,244 4,540 5,403 5,901 5,966 6,158 6,146 6,229 6,428 Reserve DAILY AVERAGE PRODUCTION OF CRUDE OIL LABOR FORCE, EMPLOYMENT, AND UNEMPLOYMENT (Thousand barrels) Five Southwestern States' Percent chango from January Area January December December 1971 1972 FOUR SOUTHWESTERN STATES .•••••• • . •••••.•. Louisiana ••••••• •• • •••• • • New Moxico .. . ....... . . . Oklahoma •••••• • •••••••• Texas ..•.. • . • • ....•••.• Gulf Coa.I •••••••••••• West Texas ....... . .. . Ea.1 Texa. (proper) •• . •• Panhandle ••••••••• . ••• Rest of stato ••••••••••• UNITED STATES .. .••••• .. • . ..... January 1971 (Seasonally adjusted) 1971 1971r 6,691.9 2,485.9 323.1 592.3 3,290.6 626.2 1,650.1 200.1 71.8 742.4 9,305.7 6,621.6 2,522.3 320.0 588.9 3,190.4 612 .7 1,587.2 196.5 72.3 721.7 9,260.3 7,073.6 2,610.2 334.8 594.1 3,534.5 717.8 1,684.9 221.8 72.8 837.2 9,724.6 1.1% -1.4 1.0 .6 3.1 2.2 4.0 1.8 -.7 2.9 .5% -5.4% -4.8 -3.5 - .3 -6.9 -12.8 -2.1 -9.8 -1.4 -11.3 -4.3% r-Revlsed SOURCES: American Petroleum Institute U.S. Bureau of Mines Federal Reserve Bank of Dallas Percenl change Thousands of persons Jon.197~ --an a r ---D-e-ce-m J- -u- -y-b-er----J- n o -u-ar-y- Dec. Jon. 1972p 1971 1971r 1971 ~ Itom 8'm:~ 8,384.7 7,~~~:~ 8,268. 1 Totc l unemployment •..•• .. .. Unemploymenl role ••••••••• 4.5% 4.8% 4.9% 6,527.1 1,147.4 616.5 530.8 5,379.7 229.2 430.5 6,461.2 1,135.2 614.4 520.8 5,326.0 227.4 417.5 6,319.9 1,129.0 609.9 519.1 5,190.9 230.5 394.2 8,4 67 .2 Civilian labor force . ••• . • .. . Talal employmenl •••.• . •.•.• 7,:~~:~ 1.0% 2.9 2.4% 13 -5:4 _ 6.4 ' -.3 ,_.4 Total nonagricultural wage and .alary employmenl.... Manufacluring...... ... .. Durable..... . ...... . .. Nondurable........... Non~~nufacluring. • • . . . . • M,ning .. .. .. .. .. .. .. .. Con.lruclion . • • •• . • • • • • 3.3 1.6 1.1 2.3 3.6 _.6 9.2 1.0 1.1 .3 1.9 1.0 .8 3.1 Transportation and 0 public ulililie.. . . •• . . . 456.0 450.2 455.8 1.3 4'3 Trade.......... .. .... 1,550.9 · 1,522.9 1,486.7 1.8 5'5 Finance.. • . •• ... •••.•• 344.8 342.6 326.9 .6 2'1 Service............... 1,038.2 1,040.5 1,017.0 _.2 3'9% ____ G_ov_e_r"_m_e_"I_.__._.__.__.___ .. .. .. 1,_3_30_.0 _____1_,3_2_4._9_____ 1,_27_9_.9 ________ .4~ 1. Arizona, Louis/ana, New Mex/co, Oklahoma, and Texas 2. Actual change ' p-Prellmlnary r-Rev/sed NOTE : Details may not add to totals because of rounding. SOURCES: State employment agencies Federal Reserve Bank of Dallas (seasonal adjustment) LIVESTOCK ON FARMS AND RANCHES, JANUARY 1 (Thousands) Five southwestern stotes l Texa. Type All callie and calves ..... . Milk cow •••• .. Beef cows • . •.• Sheep ••• . ••• . Slock .heep •• Feeders •••• • Hags' . •• • • •• • Loyer chickens •• Turkey breeder hens' ....... United Slale. 1972 1971 1972 1971 1972 1971 12,829 355 5,452 3,524 3,125 399 1,405 12,602 12,578 355 5,791 3,789 3,510 279 1,419 13,054 22,813 752 9,630 4,914 4,359 555 2,387 '18,713 22,029 757 9,89 1 5,239 4,822 417 2,316 '19,600 117,916 12,279 38,725 18,482 15,767 2,715 62,972 329,890 114,470 12,414 37,533 19,597 16,968 2,629 67,449 334,582 556 538 '564 '576 3,375 3,405 1. Arizona, Louisiana, New Mexico, Oklahoma, and Texas 2. Data as of December of preceding year 3. Louisiana, Oklahoma, and Texas only 4. Oklahoma and Texas only SOURCE: U.S. Department of Agriculture being placed on their fields. High rates of production are straining the capacity of many fields in both states. Cotton harvest in the five states of the Eleventh District is almost complete and, according to J anuary estimates, should total about 4.2 million bales-B percent fewer than last season. A drop in the production of upland cotton accounted for all the decline. Pima cotton production increased nearly 60 percent. However, higher prices VALUE OF CONSTRUCTION CONTRACTS (Million do ll ars) """",.,. January Dec ember November Area and Iype 1972 1971 1971 FIVE SOUTHWESTERN STATES' . Re.ldenlial building . . ..••.•• 840 413 221 207 6,234 2,667 1,728 1,840 807 405 198 204 6,286 2,997 1,959 1,331 803 381 179 244 6,405 3,001 2,128 1,275 Nonresidential building • • ••.. Nonbuilding conslructlon ••••• . UNITED STATES ...•... .. .••. . Residential building • • . . .. ... Nanresidenlia l building . •• • •• Nonbuilding construction .•... . Ja nuarY ~ 542 227 221 93 4374 1'621 1:72 1 1 032 .-:.-- 1. Arizona, Louisiana, New Mexico, Oklahoma, and Texas r- Revlsed NOTE : Details may not add to totals because of rounding. SO URCE: F. W. Dodge Division, McGraw-Hil i Informal/on Systems CompanY for all qualities of cotton dampen the economic impact of lower production. Intended plantings for this year indicate acreage increases of 6 percent for cotton and 5 percent for soybeans. Corn acreage is expected to decline 11 percent, and sorghum acreage will be about the same as last year. The five states had 22.B million head of cattle on January 1-3.6 percent more than at the start of 1971. Texas, with 12.B million head, continued to lead in the Southwest. Totaling only 4.9 million, sheep and lamb numbers in the region were off 6 percent t from a year earlier. Cash receipts from farm mar1e {1 ings in the five states totaled $6. billion last year-3 percent more 'Il than in 1970. With the increa e:rtlcosts, however, net income to a ers is not expected to rise much above the nearly $2.3 billion . ts realized in 1970. Livestock rece1P rose 3 percent in 1971 to nearly $3.9 billion. Crop receipts rose 4 percent to over $2.2 billion, f