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MONGJrHLG)(
BU8INE88
FEDERAL
REVIEW
RES E R V E
Vol. 40, No.5
BANK
o
F
DALLAS
DALLAS, TEXAS
May 1,1955
ELEVENTH DISTRICT BANKING TRENDS IN 1954
E. WALKER, Financial Economist
Federal Reserve Bank of Dallas
CHARLS
Banking developments in the Eleventh District in 1954
reflected three main forces: (1) continuing underlying
strength in District business, which helped to push year·end
banking totals to record peaks in spite of some slackening in
business activity early in the year; (2) the progress during
the year of the cyclical trend - recession, stability, recovery,
which contributed to important shifts in the use of banking
resources; and (3) monetary and debt management policies
that affected both the volume and the use of banking resources. An examination of District banking trends in 1954
as compared with 1953 not only should help to clarify the
interrelationship between banking and economic activity but
also should contribute to an understanding of the role of
general instruments of credit control and debt management
in the maintenance of economic stability.
Growth of Banking Totals in 1954
Although the business recession that began in mid·1953
and continued into the second quarter of 1954 tended to
dampen local demands for bank credit during the early
months of 1954, the underlying strength of business in the
Southwest - together with the willingness and ability of
banks to use available reserves to expand earning assets other
than loans - contributed to the attainment of record levels
of member bank resources, deposits, and capital accounts.
Resources of District member banks rose $648,544,000, or
7.1 percent, to a total of $9,833,310,000 on December 31,
1954, reflecting mainly a $377,923,000 increase in net loans
and discounts and a $215,776,000 gain in holdings of United
States Government securities. The counterpart of the increase
in resources was a $584,436,000 - or 6.8·percent - expan·
sion in deposits and a $48,407,000 - or 8.7-percent - rise in
capital accounts. Within tllC total of deposit~, demand deposits
of individuals and businesses gained $326,898,000, or 6.1
percent, and time deposits of the same group advanced
$144,877,000, or 18.2 percent.
As is shown in an accompanying chart, the growth of major
balance sheet items - with the exception of cash assetswas substantially greater in 1954 than in 1953, in spite of the
fact that for the Nation as a whole economic aggregates generally were higher in 1953 than in 1954. The 1954 growth in
resources of District member banks exceeded the 1953 gain
by 59.3 percent; loan expansion was 56.0 percent greater;
holdings of Government securities increased 8.9 percent, as
contrasted with a decline of slightly less than 1 percent in
1953; deposit gains were 60.2 percent larger; and additions
to capital in the later year were 15.8 percent more than in
1953.
Another chart indicates that the larger loan increase in
1954 stemmed primarily from stronger credit demands connected with business, real estate, and securities transactions.
The $14,753,000 expansion in commercial and industrial
CHANGES IN ASSETS AND LIABILITIES
MEMBER BANKS-ELEVENTH FEDERAL RESERVE DISTRICT
TOTAL RESOURCES
LOANS AND DISCOUNTS
CASH ASSET S
U. S . GOVERNMENTS
TOTAL OEPOSITS
CAPITAL ACCOUNTS
This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org)
MONTHLY BUSINESS REVIEW
58
since a business recession usually involves differential move·
ments of the various components of business activity, with
some lines declining at a slower rate than the aggregate or
possibly even increasing, shifts in the relative importance of
certain assets are likely to occur.
GROWTH IN LOANS AND DISCOUNTS
MEMBER BANKS - ELEVENT H FEDERAl. RESERVE DISTRICT
19~3
end '9 ~ 4
1954
TOTAL. LOANS
'!t~1-1 1953 1n:U
,
COMMERCIAL. AND
INDUSTRIAL L.OANS
LOANS TO FARMERS
REAL ESTATE LOANS
CONSUMER LOANS
LOANS FOR PURCHASING
OR CARRYI NG SECURITIES
o
100
200
300
MILLIONS OF DOLLARS
400
loans in 1953 was overshadowed by a $177,388,000 rise in
1954. Real estate loans, which rose only $8,687,000 - or 3.3
percent - in 1953, increased $47,125,000, or 17.1 percent,
in the later year. The percentage growth in loans for purchas.
ing and carrying securities in 1954 was more than four times
the 1953 increase.
The basic strength of the southwestern economy in 1954 is
illustrated further by comparisons with trends in totals for
member banks in the Nation. The banking totals that are per·
haps most indicative of the tempo of local business activity
are loans - particularly business loans - and deposits. Dur·
ing 1954, net loans of District member banks rose 12.2 per·
cent and deposits increased 6.8 percent. These figures contrast
with gains in the Nation of 4,.3 percent and 4.7 percent, reo
spectively. Of possibly greater significance is the fact that
business loans of District banks rose U.8 percent, as com·
pared with a 2.0·percent decline in the Nation.
The larger percentage growth in loans of District member
banks contributed to a 38.0·percent increase in net profits,
compared with a gain of 25.9 percent in the Nation. Current
operating earnings of District banks were up only 7.2 percent,
however, as most of the $18,949,000 increase in profits before
income taxes resulted from a $15,512,000 nonoperating gain
on sales of securities. Member banks in the District paid out
$23,054,000 - or 40.0 percent - of net profits in dividends.
The figures cited above suggest that the impact of the recent
business recession was less in the Southwest than in the
Nation. Some of the effects of the recession on District memo
ber banking are discussed in the following section.
Impact of Recession and Recovery
A business recession is likely to affect the assets and liabil·
ities of commercial banks in two ways. In the first place, a
decline in economic activity might be expected to be reflected
in a similar decline- or diminished rate of growth-in such
banking totals as resources, loans, and deposits. Secondly,
The busiuess recession of 1953·54 was reRected in a decline
of approximately 4 percent in gross national product and a
decrease of slightly more than 10 percent in industrial production. For 1954 as a whole, gross national product totaled
$357,200,000,000, as compared with $364,900,000,000 in
1953. In the Southwest the recession was notable with respect
to its very mild impact on major banking totals. As noted
earlier, loans, deposits, and capital accounts of District memo
ber banks rose to record levels in 1954, and the percentage
gains in these items in 1954 exceeded the 1953 increases.
Three factors are probably of primary importance in
accounting for the upward trend in banking measurements in
a year characterized by less than capacity production. First,
the general business decline was more pronounced in the
Nation than in the Southwest. Nationwide, the largest declines
in output were encountered in durable goods industries,
which are not as important in this area as elsewhere. Second,
1954 ended in an atmosphere of revival and general business
optimism, while 1953 ended in recession. The less than seasonal expansion in bank loans in the final quarter of 1953
was replaced by a more than seasonal growth in the comparable 1954 period; this sharp upsurge in lending did much
to push year·end totals to record figures. Finally, the mone.
tary and debt management policies pursued in 1954 were
conducive to expansion of banking assets - particularly in.
vestments - in spite of depressed loan demand during the
early part of the year.
Among banking assets, loans and disco unts are likely to be
most affected by a business decline, such as that experienced
during the past 2 years. An examination of changes in the
total of loans of District member hanks in 1953 and 1954,
however, shows little evidence of the impact of the recession.
LOANS TO FARMERS
MEMBER BANKS-ELEVENTH FEDERAL RES ER V E DISTRICT
«
to
,
MONTHLY BUSINESS REVIEW
Offsetting movements in the different types of loans tended
to conceal partially the recessionary effects. Changes in loans
of District banks were influenced considerably by variations
in the available supply of certi1icates of interest issued by the
Commodity Credit Corporation. These certificates - classi·
fied technically as loans but more closely resembling investments from a practical standpoint - tended to increase late
in 1953 and early in 1954, when the demand for other loans
dampened somewhat; declined in the third quarter of 1954
as other loan demand was developing; and then added to total
loan strength in the last quarter of the year.
COMMERCIAL AND INDUSTRIAL LOANS
MEMBER BANKS·ELEVENTH FEDERAL RESERVE OISTRICT
!.I I LL IO NS OF DO LL ARS
The trend over the 2 yea rs in "other" agricultural loans _
which are more indicative of direct financing of agriculture
in this District than total loans to farmers - is explainable
primarily in terms of the effects of acreage allotments,
drought, and declining prices of agricultural products, rather
than the impact of the business recession. In particular, the
acreage allotments on cotton and wheat that existed in
1954 - but not in 1953 - probably accounted, in part, for
the dampened rate of growth of "other" agricultural loans
in the first half of 1954 as compared with the year-earlier
period. Moreover, drought conditions resulted in a substantial volume of emergency financing through Government
agencies.
M I LU ONS OF DO LLARS
'.
1,70 0
700
/
1,65 0
1,60 0
19~4y
0
1,50 0
Agricultural loans of District member banks fluctuated
markedly in 1953-54 primarily because of wide swings in
the volume of CCC loans, which, in turn, were dominated
by the issuance and retirement of certificates of interest.
Purchases of certificates were mainly responsible for a
$136,679,000 increase in agricultural loans in the last quarter of 1953; this expansion accounted for 66.4 percent of
the growth in gross loans and discounts which occurred in
that quarter. In the first 3 months of 1954, CCC loans rose
$63,393,000, while total loans increased only $48,794.,000.
The $73,204.,000 decline in total loans in the third quarter
of 1954 resulted mainly from a retirement of CCC certificates that was offset only partially by growth in other
loan categories. Finally, during the last quarter of 1954,
$192,333,000 of the $365,664,000 gain in total loans consisted of growth of agricultural paper.
59
:-..
V
/
/
19!13
DEC.
MAfl.
JUNE
,600
,,550
/
0
0
/ ",
S€PT.
.'0
,,soo
,,450
,,400
DEC.
foreign investment. In addition, divergent movements prevailed within the investment category. In the second quarter
of 1953, business inventories were being accumulated at a
seasonally adjusted annual rate of $5,400,000,000, as compared with liquidation at the rate of $4,800,000,000 in the
third quarter of 1954. Moreover, new construction rose from
a $25,600,000,000 rate in the third quarter of 1953 to a
$29,100,000,000 rate in the final quarter of last year.
Demand for commercial and industrial loans was relatively weak during the last 6 months of 1953 and the first
3 months of 1954, when recessionary pressures were dominant. Most striking, however, is the sharp increase in the last
half of 1954 as compared with the same period in 1953_ The
influence of strong recovery forces is clearly evident from
the $196,270,000 growth in such loans in the period JulyDecember 1954, which contrasts with a gain of only $52,334,000 in the last half of 1953_
The difficulty arising from the influence of variations in
the outstanding amount of CCC certificates on changes in
total loans can be overcome largely by examining movements
of commercial and industrial, consumer, and real estate
loans of member banks. At the same time, a closer look at
the trends in such loans serves to emphasize the fact that
the business recession, in addition to its over-all impact on
banking totals, contributed to relatively sharp changes in the
use of banking resources.
Although a breakdown of commercial and industrial loans
for all District member banks is not available, data for the
weekly reporting banks - which hold approximately threefifths of total member bank loans - are useful in assessing
the effect of the recession and revival on demand for bank
credit in the Southwest. Loans to manufacturers - other than
those in petroleum and related fields - were at very high
levels during the boom period of early 1953 but declined in
the spring and failed to rise significantly in the latter part
of the year. The continuance of recessionary pressures into
1954 is reflected in the depressed volume of such loans
through the middle of the year, and the stimulus of recovery
forces is apparent in the expansion in September-October
1954.
In this respect, it should be noted that the recession of
1953-54 was characterized by markedly divergent trends of
some important components of aggregate economic activity.
Personal consumption expenditures were much more stable
over the 2-year period than was total product, the decline
of which stemmed principally from decreases in government
purchases of goods and services and private domestic and
Loans of the weekly reporting member banks to finance
activities of firms in petroleum and related fields are considered separately from other manufacturing loans because of
tlle importance of petroleum industry loans to larger southwestern banks. The effects of the business decline and revival
were not evident in this field in view of the continued expansion of drilling activity in 1954.
MONTHLY BUSINESS REVIEW
60
SELECTED COMMERCIAL AND INDUSTRIAL LOANS OF WEEKLY REPORTING MEMBER BANKS, 1954 AND 1953
Eleventh Federal Reserve District
(last Wednesday of each month. In thousands of dollars)
Manufacturers of
petroleum and
Other
manufacturers
reloted products
1954
Month
1953
Jenuery •.••••••••..• $253,488
February •••••••••••• 256,412
March •••.••.••.•••• 256,128
April ••••••••••••••• 246,827
Mey ............... 244,865
June •••••••••••••••
250,438
July ................ 243,696
August ••• •••• • ••• .•• 248,083
September •• •••••••• 250,047
October ••.•.•.....• 249,844
November ••••••••••• 254,241
December ••••••••••• 261,130
$225,572
225,916
223,344
229,214
226,913
232,818
237,487
238,484
237,950
241,313
243,042
253,767
1954
$120,451
117.os3
119,628
110,756
106,412
107,655
109,434
110,578
115,934
119,283
118,932
115,734
1953
$142,838
140,255
137,820
125,914
123,189
121,748
116,576
117,164
118,054
122,135
121,289
121,328
Further evidence of the close interrelationship between
business activity and bank lending is brought out by the
trends in loans to retail and wholesale trade firms by the
weekly reporting member banks. These loans, after declining
seasonally in January 1953, rose markedly through April.
Aftcr mid-1953 the tendency toward inventory liquidation
was reflected in a decline through September and what ap·
peared to be a less than seasonal increase in October and No·
vember. The reduction in trade borrowings continued during
the first 2 months of 1954. Some expansion occurred through
June of the year, but the decrease in the rate of inventory
liquidation was reflected in the increase in such loans in
September and October.
The role of District member banks in helping to finance
the construction boom in the Southwest is indicated by the
trend of construction loans of weekly reporting member
banks during 1953 and 1954. These loans, which totaled
$127,147,000 at the end of 1952, rose 16.1 percent in 1953 to
a total of $147,632,000. This increase, although substantial,
CONSUMER LOANS
MEMBER BANKS-ELEVENTH FEDERAL RESERVE DISTRICT
Trade
establishments
1954
$150,906
151,880
158,.437
160,922
163,390
164,151
158,399
160,519
165,748
170,092
169,855
164,531
1953
$147,760
154,606
158,235
164,206
166,080
165,997
165,018
160,300
157,308
160,272
164,705
155,476
Construction
flrms
1954
$150,753
150,436
155,225
161,622
168,769
172,730
175,323
183,197
181,758
183,213
188,270
208,775
1953
$132,619
132,181
131,239
135,930
137,601
145,962
147,189
147,426
143,507
147,133
151,726
147,632
Sales flnance
companies
1954
$ 99,684
90,489
97,624
101,945
99,669
107,336
106,999
107,928
108,257
104,341
106,158
117,322
1953
$108,197
107,132
111,290
113,553
116,507
113,766
112,942
105,586
104,613
102,795
97,333
110,144
was overshadowed by a gain of $61,143,000, or 41.4 percent,
in 1954,. In addition, bank financing of final sales of newly
constructed property contributed to the 17.2·percent rise in
real estate loans of all District member banks in 1954.
Changes in consumer loans of the District's member banks
paralleled movements in personal consumption expenditures
in the Nation, particularly spending on durable goods since
it is most closely related to consumer borrowing. During the
first quarter of 1953, consumer credits granted by District
member banks rose $32,077,000, compared with a $4,333,000
decline in the comparable 1954 period. It will be remembered that in early 1953 the rising tide of business activity
was bolstered by a high level of consumer spending, which,
in turn, was stimulated partly by the rapid expansion of
consumer debt. During the recovery in the last quarter of
1954, consumer loans grew $18,540,000, as contrasted with
a $7,023,000 decline in the last quarter of 1953.
~
Indirect bank financing of consumer purchases is reflected
in the trend of weekly reporting member bank loans to sales
finance companies, the dominant lenders in the consumer
credit field. The total of such loans moved in conformity with
business activity, declining in the latter part of 1953 and
early 1954 and then rising substantially in late 1954.
1953 and 19154
LLIO~S
"' 0
78
7.
OF DOL LAR S
MILLIO,",S Of DOLL
0
1954 -"
74 0
=.--1
720
/
70
'"
7 80
--
~
~9"
7• 0
7 40
720
700
07
.80
68 0
66 a
DEC.
."
J VNE
SEPT
Loans on securities by District member banks rose $46,656,000, or 40.8 percent, in 1954, as compared with a $9,741,.
000 increase in 1953. The 1954 increase, which was concen.
trated in the July-December period, probably was related to
hi gher prices of both Government and private securities in
1954 and the advanced level of activity in the stock market.
660
"
In connection with the liabilities side of the banks' statement, it may be noted that the impact of business recovery
during the second half of 1954 was evident in a $490,343,000
growth of demand deposits of individuals and businesses, as •
compared with an expansion of only $339,966,000 in the ~
sccond half of 1953. Time deposits of individuals and busi.
nesses, reflecting a high level of saving in the Southwest,
expanded at a fairly steady rate during the 2·year period.
MONTHLY BUSINESS REVIEW
61
These trends in member bank accounts indicate that the
recession in business activity, although having a very mild
eliect on banking totals in the Southwest, nevertheless con·
tributed to significant shifts within the banks' loan portfolios.
Perhaps of even greater significance was the substantial ex·
pansion in member bank holdings of United States Gov·
ernment securities, a development that is discussed below.
monthly high of 3.09 percent in May.June 1953 to a low
of 2.47 percent in the summer of 1954. The yield on the 3%·
percent bonds averaged 3.29 percent in June 1953 but there·
after declined steadily to a low of 2.60 percent in August
1954. Yields on corporate and municipal bonds followed simi·
lar trends. In addition, rates on bank loans to business soft·
ened slightly.
Influ enc e of Monetary and Debt Management
Policies
Perhaps more important than the decline in interest rates
was the underlying credit situation that the lower rates reo
f1ected, namely, a situation in which the financial system
possessed ample funds to meet all legitimate demands for
credit. This condition helped to minimize the possibility of
a cumulative development in business as a result of illiquidity
and distress selling of goods and securities. Furthermore,
the transmission of relatively easy credit conditions to all
sectors of the market - as reflected by the decline in yields
on long.term securities-assured ample financing to support
the construction boom in residential housing and facilities
of state and local governments.
During 1954, monetary and debt management policies
were designed to cushion the business decline and to create an
atmosphere conducive to recovery. In mid·1953 the Federal
Reserve policy of restraint that had been pu~rsued in order
to curtail innationary pressures in the early part of the year
was reversed as deflationary forces began to emerge. From
late 1953 to late 1954, System policy was designed to promote growth and stability in the economy by actively main·
taining a condition of ease in the money market. During
1954 the implementation of this policy involved two reduc·
tions in Federal Reserve bank discount rates - from 2 per·
cent to 1% percent and then to 11/2 percent; decreases in
reserve requirements that released approximately $1,600,000,000 of reserves; and open market operations designed to
maintain adequate, but not excessive, ease in the money
market.
Although each of these actions furthered the goal of cush·
ioning and reversing the business downturn, open market
operations - purchases and sales of Government securities
by the System - were the most important credit control in·
strument on a day.to·day and week· to· week basis. Early in
1954 the System sold Treasury bills in order to absorb a por·
tion - but not all - of the redundant bank reserves that
normally accumulate at that time. Later in the year, in May
and June, the Federal Open Market Committee purchased a
substantial volume of bills in order to offset a reserve drain
stemming from an increase in currency in circulation and a
decline in gold stock. Following the reduction in reserve reo
quirements in the summer, the System liquidated bills in
order to absorb a portion of the newly available funds and
thereby prevent the emergence of excessively easy conditions
in the credit market. During most of the autumn months,
open market purchases were designed to provide ample funds
to support seasonal loan and currency expansion and, at the
same lime, contribute to business recovery. As the forces of
recovery accelerated late in the year, open market pur·
chases were moderated, and bank reserve positions were
allowed to firm slightly.
The impact of these monetary and credit policies on Dis·
trict member banks is easily discernible in the trends in
banking totals in 1954. The increased availability of reserves
contributed to a volume of free reserves (excess reserves of
member banks less borrowings from the Federal Reserve
Bank of Dallas) that fluctuated bctween $43,000,000 and
$137,000,000 in 1954, as compared with a range of $24,000,·
000 to $76,000,000 in 1953, and an average volume of $70,·
000,000 in 1954, as contrasted with S43,000,000 in the pre·
ceding year.
The availability of reserves during the year - especially
the sharp increase in the summer in connection with the reo
duction in reserve requirements - contributed to the expan·
sion in resources and deposits referred to above. Not only
were District banks able to meet all legitimate demands of
local borrowers, but also they were encouraged to expand
earning assets by purchasing CCC certificates when avail·
able and Government and municipal securities in spite of the
FREE RESERVES
MEMBER BAN KS - ELEVENTH FEDERAL RESERVE DISTRICT
.,
195J GRclI95 4
LUorl S Of DOl L.A S
( .... , .. "0401,,11,1' u", )
14 0
'"
I 40
12 0
I 20
10 0
I 00
4
k\
I." ~
•
In the market, System actions were reflected in relatively
sharp declines in sensitive money rates and yields on all
maturities of Government securities and corporate and muni·
cipal bonds. Rates on new issues of Treasury bills, which had
averaged more than 2 percent during the first 8 months of
1953, declined sharply in the last quarter of 1953 and reached
a low of .65 perccnt in Junc 1954. Yields on long·term Gov·
ernment bonds callable after 12 years (but not including the
30·year 3?4's issued in April 1953) decreased from a
W' LL IO'tS OF DOLL
A
o
:~ I'''~~':
o -~
o
0
o
0
a LIJ-, '=~l1:
-
J
F
M
A
M
J
I I
J
A
5
0
N
u
0
o
62
MONTHLY BUSINESS REVIEW
decline in yields on such investments. For 1954 as a whole,
these credit activities resulted in a $323,156,000 expansion
in nonagricultural loans, a $61,872,000 growth in agricul.
tural paper - due principally to purchases of CCC certifi.
cates, a $215,776,000 gain in holdings of United States Government securities, and a $26,943,000 increase in municipal
securities.
The expansion of investments in Government securiti es
was facilitated by Treasury policies of debt management. In
order to promote stability in the money supply during the
recession and to avoid disturbing the market for long.term
funds, the Treasury confined its borrowing operations to
securities that were especially attractive to commercial banks.
Cash borrowing, exclusive of bills and Tax Anticipation
issues, was effected by tbe sale of Treasury notes that were
attractive to banks both in terms of maturity and with respect
to method of payment, which allowed qualified depositaries
to purchase at least part of their allotments by credit to Tax
and Loan Accounts. Commercial banks were also willing to
acquire these intermediate· term Treasury securities in order
to sustain earnings during a period of slack loan demand
and relatively low interest rates. Thus, the Treasury reo
funded approximately 50 percent of maturing securities
(other than bills and Tax Anticipation issues) with obligations maturing in 4%, years or longer.
MATURITY DISTRIBUTION OF
U.S.GOVERNMENT SECURITIES
MEMBER BANKS-ELEVENTH FEDERAL RESERVE DISTRICT
O.c.mbo r 31.
1 9~~
and Olctmblr 3 1, 1904
was the case in some past recessions that led to more severe
economic declines. Indeed, perhaps the most significant con·
tribution of monetary policy in 1954 lay in the maintenance
of an atmosphere in which liquidity problems of both business and the financial system were negligible.
Summary and Outlook
District banks subscribed heavily to these issues and also
actively sought Government securities from market holders.
Consequently, holdings of Government obligations, as noted
above, rose $215,776,000 - or 8.9 percent, as compared with
a $19,217,000 decline in 1953. The strelch·out of maturities
is shown in an accompanying chart. In 1954, holdings of
marketable securities maturing within 5 years declined from
82.5 percent of the total to 58.2 percent, and issues in the
5· to lO-year range rose from 13.4 percent to 35.6 percent.
The shift into intermediate· term issues was especially pronounced among the smaller banks. From the standpoint of
types of Government securities, the shifts in portfolio were
reflected mainly in a $274.,714,000 reduction in Treasury
certificates of indebtedness and a $409,077,000 increase in
Treasury bonds.
The availability of reserves that could be funneled into
investments did much to sustain member bank earnings when
loan demand was slack. Possibly of greater significance,
however, were the profits obtained by District member banks
by selling certain issues of Government securities at the
higher prices (lower yields) that prevailed in 1954. Profits
from the sale of securities were especially important among
the larger banks and, for member banks as a group, were
only slightly less than the total increase in net profits over
1953.
Although the shifts in holdings of Government securities
may be viewed as having contributed to a reduction in liquid·
ity of member banks, it is important to note that the move·
ment toward longer· term investments was intentional on the
part of the banks. The reduction in liquidity was not the reo
suit of a general decrease in liquidity of the economy, as
Banking trends in the Eleventh District during 1954 were
outstanding in several respects. Probably the most significant
development was the growth of banking measurements during
a year of business adj ustment. The environment of monetary
ease fostered by System policies encouraged banks in this
District and throughout the Nation to pursue aggressive lending policies which enabled borrowers to obtain credit at
reduced costs and on more liberal terms. It is difficult to
overestimate the impact of this generous supply of loanable
funds in 1954. Not only were banks able and willing to make
loans, but extra reserves contributed to an important growth
of bank investments in longer· term United States Government
securities. This latter action provided bank support to the
Treasury financing program and enabled hanks to expand
their earning assets in the face of the decline in loan demand.
Moreover, many banks were able to expand purchases of
municipal securities and also increase their loans in the
construction and real estate categories. By actively seeking
high.grade investments, the banks helped to sustain the flow
of credit and, therefore, the flow of spending for goods and
services - a development that was of considerable impor.
tance in reversing the business decline. These investments
and loans contributed forcefully to the construction of municipal facilities and to the high level of residential construe·
tion throughout the year.
Other trends of importance in 1954 were largely those refleeting the impact of the recession upon other components
of the loan demand. The early 1954 decline in commercial
and industrial loans was reversed by the recovery starting
in the late summer and progressing rapidly through the
•
,.
MONTHLY BUSINESS REVIEW
fourth quarter of the year. Another significant development
involved the continued growth in time deposits, which reo
flected the sustained high level of savings. Thus, while some
banking operations in 1954 showed effects of recession, the
year closed in an atmosphere of recovery and progress which
allowed year·end banking totals to show a great improvement
over those calculated in the depressing climate prevailing at
the end of 1953.
Economic conditions in the first quarter of 1955 reflected
a continuation of the recovery pattern set in late 1954. Gross
national product is nearing the all·time peak reached in the
second quarter of 1953. Industrial production continues the
advance that began in late 1954, rising in March to within 2
points of the 1953 high. Consumer spending, stimulated by
a high level of disposable income and a growing volume of
credit, has contributed to the upward movement of economic
activity.
Data for the District's weekly reporting member banks
reflect the strength of the business recovery and provide a
clue to the role of the banking system in helping to finance
the upsurge in activity. During the first quarter of this year,
gross loans of the banks rose $19,837,000, as compared with
63
a $3,120,000 decline in the year.earlier period. Of the major
categories of bnsiness borrowers, only constrnction firms and
commodity dealers evidenced a weaker demand for bank
credit as compared with early 1953, and marked expansion
has occurred in other categories of loans, particularly con·
sumer credits. The weekly reporting banks, in order to satisfy
the strong loan demand under somewhat tighter reserve con·
ditions, have liquidated sizable amounts of Government se·
curities as compared with the first quarter of 1954.
The trend iu District banking totals during the remainder
of 1955 depends largely, of course, on business conditions
and monetary policies in the coming months. If the business
revival levels off and is followed by a sustainable rate of
growth, 1955 should be another year of expansion and
progress for District member banks. A primary task of both
bank management and monetary authorities is to assure that
the volume of credit flowing to consumers, business, and
agriculture is sufficient to support orderly and sustainable
growth under conditions of relatively full use of the Nation's
economic resources but insufficient to provide credit for
speculative, inflationary uses. Success in this task will help
to assure that business fluctuations will be reduced to a mini·
mum.
64
MONTHLY BUSINESS REVIEW
REVIEW OF BUSINESS, AGRICULTURAL, AND FINANCIAL CONDITIONS
Department store sales in
the Eleventh Fede ral Reserve
District, buoyed by Easter buying, showed a sharp, greater
than seasonal increase during
March. Cumulative sales for the first quarter of the
year reached a record high for this period, with an
II -percent gain over the corresponding months of
1954. Department store stocks at the end of March
were only slightly below the all-time high of March
1953.
Agricultural activity in the District during April
was centered around overcoming effects of lateMarch freezes which destroyed most of the early
fruit and damaged field crops. Rains during the
month improved crop and pasture conditions in the
eastern areas of the District. Winter wheat production in 1955 is indicated at almost 50 percent below
that in 1954. Cash receipts from farm marketings in
January are estimated at about 1.0 percent lower
than a year earlier.
Refinery crude runs in the District were reduced
appreciably during the first part of April, but crude
oil production continued only slightly below the
record level of the previous month. Texas daily
allowables for May, however, foreshadow a substantial cut in District crude oil production during the
month.
Nonagricultural employment in the District states
increased seasonally during March . Gains occurred
in all industries, with construction showing the largest
increase. Manufacturing employment surpassed
year-earlier levels for the first time since 1953.
E as ter bu yin g at departm ent
stores in the Eleventh District duro
ing the 2 weeks before Easter rose
5 percent above that in the same
period in 1954 and exceeded by 3
percent th e previous record for that period, established in
1953.
During March, department store sales continued the im·
pressive showing of the first 2 months of this year; as a result,
dollar volume sales in the District during the first quarter
were 11 percent more than in the first 3 months of 1954 and
were 3 percent above those in the spring quarter of 1953.
March sales registered a larger than seasonal rise of 30 per·
cent over February and were 15 percent above March 1954.
The substantial March gain over the year· earlier figure was
helped by the earlier Easter season this year. The seasonally
adjusted sales index reached 129 in March, compared with
125 in February and 115 in March 1954.
The demand for consumer durable goods continued to be
a prime factor in maintaining District department store sales
at a high level. During March, sales of homefurnishings,
which were approximately 18 percent of total sales, rose 17
percent above March 1954. The principal items accounting .
for the increase were major household appliances, up 30
percent ; domestic floor coverings, up 27 percent ; and radios
and television sets, up 21 percent. Sales of furniture and
bedding, with a 9-percent gain over last year, were the highest
for any March of record.
March sales of soft goods, mainly wearin g apparel, were
13 percent above those of a year earlier. The largest gains
were in sales of women's and children's shoes, which rose
RETAil TRADE STATISTICS
(Percentage change'
The value of construction contract awards in the
District increased markedly in March ; nonresidential
construction awards rose 59 percent, but residential
awards declined 8 percent. Total awards were 42
percent higher than in March 1954 .
Gross loans and discounts of the District's weekly
reporting member banks rose $20,271,000 during
the 4 weeks ended April 20, reflecting sizable
increases in business loans and consumer credits.
Agricultural loans declined substantially in connection with retirement of wheat loans by the Commodity Credit Corporation ~n April 1. A $132,607,000 expansion in deposits enabled the banks to add
$61,842,000 to their holdings of United States Government securities.
STOCKS)
NET SALES
Mt;u. 1955 from
March
DEPARTMENT STORES
Tota l S eventh District ••.•• •• • •• • ••
Cor pus Chrisfi • • ••• • •• • .•• •• ••• • •
Dallas • •• • •• •••. • •• . •••••.• • • • •
EI Po so • • •• •• • • • • • • •••••• • •• • . •
Fort Worth ••• • •••• • • •• •• •• •• •• •
Houston •• •• • •••• • ••••••••• • • • ••
Shreve p ort, La •• • • •••• • ••••••• •• •
Waco •• ••• •• •• •• •••• •• • ••• • • • •
O ther cities • • • ••• ••• • • • •• • •• • • • •
FURNITURE STO RES
Total Eleventh Dist rict • • • ••• • ••• • ••
Austin ••• . •• •
Dallas • . o. o. o.
HOl.I$l ono • . .• .
Port Ar thur • • •••• • • • ••• • •••• • •••
San An tonio • • ••••••••••.•••• .• •
O ther cities • •
HO USEHOLD APPLIANCE STORES
T0101 Eleventh Distr ict • • ••• ••• •••••
Dallas •• •
o.
0
0
0
I
•••
•
0
0
•
••
•
00
•
•
•
•
•
•••
0
•
••
•
••
••••
•••
•
••
•••
•
••
•
0
••
•••
•
•
•
••••
•
••••
•
••••
•
•
••
Stock, ot end of month.
•
•
•
0
••
•••
0
•
•
•
••
0
•
0
Feb .
195~
line of trade
by area
1955
15
22
18
17
9
11
9
17
16
30
28
22
2'
27
3'
3'
31
18
7
29
27
28
13
5
6
-17
11
10
5
12
10
11
11
22
17
~O
Ma r. 1955 f rom
3 mo. 1955
comp o with
3 mo. 1954
Ma rc h
Fe b.
195 4
1955
11
18
14
12
9
8
S
11
12
3
12
6
2
8
- 2
6
-3
3
9
13
6
10
9
11
12
12
9
20
3
-1 6
27
15
-3
- 7
-2
9
12
5
12
1
2S
22
31
3
I'
7
~
6
4
65
MONTHLY BUSINESS REVIEW
INDEXES OF DEPA~TMENT STORE SALES AND STOCKS
11947-49
(Number)
AOJUSTED I
UNADJUSTED
Area
SAN ANTONIO MARKET
FORT WORTH MARKET
March
March
February
March
March
Class
1955
1954
1955
1955
1954
February
1955
Cattle ......... .
53,452
43,679
U,266
57,540
55.582
11,961
35,343
13,818
16,339
15,004
60.612
16,061
57,631
132,908
18.857
Calves ......... .
3,584
120,078
127,295
3,283
17,392
Mar. Feb. Jen. Mar. Mor. Feb. Jan. Mer.
1955 1955 1955 1954 1955 1955 1955 1954
SALES-Doil y overage
Eleventh District •• • • •• •••• ••
Dallas ..............•..•..
117
116
Houston • •••• .• ••••• •••••• • 133
STOCKS- End of month
eleventh District .. .. . ......• 141p
1
LIVESTOCK RECEIPTS
= 100)
101
107
112
109,
110
122
102
98
120
129
122
148
125
126
143
138
154
115
106
137
129r
118r
136
132p
132r
131,
127
137r
67,27.4Sheep ..... ... . . 138,923
Hogs • ••••••••• •
I
10,035
Includes goats.
Adjusted for seasonal variation.
r-Re.,i,.d .
p-Preliminary.
17 percent; men's and boys' wear, 17 percent; women's and
misses' ready-to-wear, 14 percent; women's and misses'
ready-to-wear accessories, 12 percent; and sales of women's
and misses' dresses, 13 percent_
Credit purchases at District department stores during
March were substantially above those a year earlier but accounted for about the same proportion of total sales_ Cash
purchases in both February and March represented 32 percent of total sales, compared with 34 percent in March 1954.
As in February, instahnent sales were 14 percent of total
sales, compared with 12 percent in March last year. Charge
account sales represented 54 percent of total sales, the same
as both a month ago and a year ago.
Compared with a year earlier, charge accounts and instalment accounts outstanding at the end of March were up 8
percent and 6 percent, respectively, reflecting the higher level
of sales in recent months. However, instahnent credit was
unchanged from February, and charge accounts were rednced 4 percent.
Department store stocks in the District at the end of
March showed the usual seasonal increase from February
and, for the first time this year, were above the 1954 level.
Stocks were only slightly below the March record in 1953 the year when department store inventories were at an alllime high. Inventories at the end of March were 3 percent
higher than a year ago and 9 percent above tl,e end of February. Stocks on order were up 24 percent from the same
dale last year but were down seasonally 16 percent from
February.
Sales of District furniture stores during March showed a
less than seasonal increase over February but were 18 percent higher than in March 1954. Cumulative sales for the
first quarter were 20 percent higher than in the same period
of last year. Furniture store inventories rose 9 percent during
March and at the end of the month were 3 percent higher
lhan a year earlier.
part of March. Only the extreme southern part of Texas,
including the Lower Rio Grande Valley and the adjacent
gulf coast area, escaped subfreezing temperatures. Hard
freezes caused an almost complete loss of peach, pear, and
plum crops; and a large acreage of corn, grain sorghums,
cotton, and vegetables was damaged severely. Some of the
more advanced small grains were killed, but most of the
acreage will recover if favorable growing conditions prevail.
The top growth of grasses and clovers was damaged, and
spring forage in western range areas was retarded, necessitating increased supplemental feeding of livestock.
Following the freezes, light to heavy rains - ranging up to
inch in the northern High Plains and to as much as 5
inches in east Texas - fell at various times during April.
Most of the precipitation occurred east of a line from Wichita
Falls through Abilene and San Antonio and north of a line
from San Antonio to Galveston. Strong winds and hail caused
some damage to crops, mostly in counties along the Red
River. The rains provided much-needed moisture for replanting freeze·damaged crops and for maintaining forage development. Dry-land wheat in the Texas Panhandle and eastern
New Mexico was benefited, but strong winds dissipated much
of the moisture.
112
Acreages of corn and sorghums killed by the freezes have
been replanted in most of the Blacklands, Coastal Bend, and
central and eastern counties of Texas; and additional acreages have been seeded to these crops. Planling of grain
sorghums is under way in the southern and eastern parts of
the Low Rolling Plains. In the Coastal Bend area, colton development was retarded by the low temperatures, and some
fields had to be replanted. Cotton planting is progressing
rapidly in the southern valleys of New Mexico and Arizona,
and considerable land is ready for seeding of both row and
FARM COMMODITY PRICES
Top Prices Paid in local Southwest Markets
Week ended
Commodity and market
COnON, Middling 1S / 16-inch, Dallas ....
WHEAT, No.1 hard. Fort Worth ..•. . .. •..
OATS, No.2 white, Fort Worth ....... ....
Agricultural aCtivIty in the District during the past month was devoted largely to overcoming the effects of severe freeze damage caused
by two cold fronts during the latter
CORN, No.2 y.llow, fort Worth . •• . .•...
SORGHUMS, No.2 y.llow, fort Worth .. •.
HOGS, Choice. Fort Worth • .............
SLAUGHTER STEERS. Choice, Fort Worth ••.
SLAUGHTER CALVES, Choice, Fort Worth...
STOCKER STEERS, Choice. Fort Worth . ....
SLAUGHTER SPRING LAMBS, Choice, Fort
Worth ................•• . ..•......•
BROILERS, south Texo s• . ... .... ...••. .. •
Compa rable Comparable
week
week
Unit ApriI2!,1955 las' month
lb.
bu.
bu.
bu.
,....
cwt.
,....
cwt.
cwt.
cwt.
lb.
S .3245
2.71
.99¥..
2.85
17.75
25.00
22.00
22.50
$ .3280
2.67
.971.4
1.76Y2
2.62
17.00
25.00
22.00
22.50
22.00
.29
23.50
.30
1.861,4
last year
.3380
2.72
1.02*
1.87
2.95
28.50
24.00
22.50
22.00
25.50
.24
MONTHLY BUSINESS REVIEW
66
WINTER WHEAT PRODUCTION
CASH RECEIPTS FROM FARM MARKETINGS
Four Southwestern Stales
Five Southwestern Slates
(In thousands of bushel,)
(In thousand. of dollars)
1955
Indicated
April 1
Jonuary
Total •••...••...••...•••••••... .
51,590
New Mexico ...................... .
Oklahoma ••••........•.••••.•. ..• .
Area
1954
Arizon<l ••• . •• •••• • •••••• ••• •• , . ••• .•
$ 46,432
31,744
15,429
34,157
145,928
$ 52,531
42.861
16,049
38,327
153,287
Totar ..•..... . ...••. . .•• ....•.... •
Texas .... •.. ........• .•.•.. ..... .
800
944
36,922
12,924
Arizona ••..............•.•.... .. ..
1955
Texas .• ... . .......... ............. .
A..a
$273,690
$303,055
1954
588
400
30,894
604
2,867
79,304
55,404
102,652
138,179
70,770
Louisiana ••••.•.•••••••••••••.•••••• .
New Mexico •.•.....•.....•.•......•.
Oklahoma •••.......• .•. . , .•..•.••.• .
SOURCE: United Stotes Department of Agriculture.
SOURCE: United Stales Department of Agriculture.
feed crops. Rice planting is under way in Texas and Louisi·
ana, and peanuts in south Texas are up to a stand but are
in need of moisture.
Field work generally is active in the commercial vegetable
areas of Texas, although soils are dry in nonirrigated south
Texas districts. Harvesting of onions is continuing in the
Winter Garden and Coastal Bend areas, but crop prospects
have been reduced because of continued dry weather. Tomato
harvest is progressing rapidly in the Lower Valley. Water·
melons have been replanted in southern and central coun·
ties, and a large acreage has been seeded in east Texas.
Spring pastures in the Blacklands, eastern, and most upper
coastal counties of Texas are making good growth. Ade·
quate moisture in these areas practically assures a surplus
supply of green feed until clovers and rescue grasses mature.
Grass and weeds are providing some feed in scattered parts
of the eastern Plateau, Cross Timbers, and Low Rolling
Plains, but additional moisture is needed. Ranges are in
poor condition in New Mexico, Arizona, and the High Plains,
western Plateau, Trans·Pecos, and southern counties of Texas.
The condition of cattle and calves in the eastern third of
the District has improved as green feed has become available,
but in the western range areas, cattle are being maintained
by heavy supplemental feeding, according to the United
States Department of Agriculture. Sheep are reported in
below.average condition for this time of year in all parts of
the western range areas of the District. Lambing is well
advanced, and losses have been relatively light.
The number of cattle and calves on feed in the 14 major
feeding states on April 1 is estimated at 4,547,000 head12 percent larger than on the same date last year, according
to the Department of Agriculture. Ahnost half of the cattle
are expected to be marketed by the end of June this year.
Commercial production of 1955 spring.crop vegetables in
Texas is indicated at 16 percent less than in 1954 and 10
percent below the 1949·53 average, according to the Depart·
ment of Agriculture. Less than average production is indio
ca ted for all crops except early spring onions and tomatoes.
The acreage for harvest is 14 percent lower than in 1954 and
10 percent below the average, with most of the reduction in
snap beans, sweet corn, cucumbers, and early spring potatoes.
Low temperatures in January and February and strong, cold
winds in March are responsible for reduced production.
Cash receipts from farm marketings in District states in
January this year are estimated at $273,690,000 by the De·
partment of Agriculture, or almost 10 percent below those
in January 1954. Cash receipts from crops in January were
12 percent below crop receipts a year earlier, while live·
stock receipts declined almost 5 percent.
During the 4 weeks ended April
20, gross loans and discounts of the
District's weekly reporting member
banks increased $20,271,000, reflect·
ing expansion in all categories ex·
cept commercial, industrial, and agricultural loans and loans
to banks. Of the major loan classes, "all other" loansmainly consumer credits - showed the greatest gain with a
$17,528,000 increase, evidencing substantial reliance by con·
sumers on credit to finan ce the rising level of spending.
Divergent movements prevailed within the total of commercial, industrial, and agricultural loans, inasmuch as a
sizable expansion in business loans was more than offset by
a large retirement of wheat loans by the Commodity Credit
Corporation on Aprill. Among business borrowers, construc·
GROSS DEMAND AND TIME DEPOSITS OF MEMBER BANKS
Eleventh Federal Reserve District
Indicated production of 1955·crop winter wheat in the
Nation on April 1 is 662,252,000 bushels, reports the Depart.
ment of Agriculture. This figure is about 2 percent less than
indicated production on December 1 last year and about one·
sixth smaller than the 1954 crop of 790,737,000 bushels.
In four of the District states, the 1955 indicated production
of winter wheat is 51,590,000 bushels, which is almost 50
percent below production in 1954 and about 63 percent lower
than the 1944-53 average.
fAv.rOSles of daily figurel. In thousands of dollars)
COMBINED TOTAL
Gross
Dcte
demend
TIme
RESERVE CITY 8ANKS
Gran
demand
Time
COUNTRY 8ANKS
Gross
demand
TIme
March 1953 ... $6,822,777 $ 829,712 53.251,351 $444,623 53,571.4265385.089
March 1954 ... 6,821.245 1,031 ,005 3,277,128 579.324 3.544,117 451,681
Nav. 1954 .... 7,464.379 1,126,793 3,650,354 635,036 3,814,025 491,757
Dec. 1954 . . .. 7,551,892 1,131 ,996 3,687,178 629,5 48 3,864,714 502,448
Jan. 1955 ..... 7 ,594,9 52 1,155,178 3,679,808 644,814 3,915,144 510,364
feb. 1955 .... 7 ,329,237 1,1 70,172 3.504,599 652,808 3.824,638 517,364
March 1955 . . . 7,237,908 1,202,162 3.485,392 682.916 3.752,516 519,246
4
67
MONTHLY BUSINESS REVIEW
CONDITION STATISTICS OF WEEKLY REPORTING
MEMBER BANKS IN LEADING CITIES
CONDITION STATISTICS OF All MEMBER BANKS
Eleventh Federal Reserve District
(In million, of dollar,)
Eleventh Federal Reserve District
(In thousand. of dollcu)
March 30, March 31,
1955
1954
Item
Item
April 20,
1955
April 21,
1954
March 23.
1955
ASSETS
Commercial, Industrial, and agricultural loans•••• 51,414,217 $1,306,010 $1,421,280
loans to brokers and dealers In securities ••••••
15,910
12,928
13,588
Other loans for purchasing or carrying .ecurities.
110,821
76,181
103,981
Real estate loans ••••••••••••••••••••••••••
178,282
136,869
174,338
loans to bonks .•••••••••••••••••••••••••••
6,855
7,709
10,155
All other loans •••••• ••••••• •• •••••.•••••••
473,099
398,227
455,571
Gronloo" ••.•.......•.•.......•.......•
len reserves and unallocated cherg.oafh. .
2,199.184
23,022
1,937,924
17,215
2,178.913
22,948
Net loons •••••••••• •••.• • •••••••• ••••••
2,176,162
1,920,709
2,155.965
U. S. Treasury bills ••••••••••••••• . ••• • •••••
83,494
78,127
272,987
877,791
256,426
116,078
172,845
148,037
771,668
206,879
62,253
47.150
273,655
867.499
255,214
U. S. Treasury certificates of Indebtedness • •••••
U. S. Treasury notes •••••••• • •••.• • • ••• • ••••
U. S. Government bonds {inc. gtd. obligations) •••
Other securities ••••••••••••••••••••••••••••
Totollnvestments •••• •• •• ••• • ••••••••• •••
CaU\ items in procen of collection ••• ••••••••••
Balance, with banks in the United Slates •••• • • •
Balance, with banks in foreig n countries ••••••••
Currency and coin •••• ••••••••••• • ••• ••••••
Reserves with Federal Reserve Bank •••••••••••
Other a"els • •••• • •••••••••• • • ••• • •• . •••••
1,568,825
388,086
445,781
1,809
46,583
623,259
123,438
1,415,50 7
301,435
444,168
1,120
44,849
600.476
95.926
1,505,771
363,388
452,280
1,635
44.828
589.013
124,975
TOTAL ASSETS ••••••••••••••••••••••••
UABIUTIES AND CAPITAL
Demand deposits
Indl . . lduals. partnerships. ond corporations ••••
United States Government ................ .
Stales and poJit1cal subdi ....lsions ••••••••••••
Bonks In the United Stales •••••••••••••••••
Banks In foreign countries. ••••••• • ••••• • ••
Certifled and officers' checks. etc. •••••••••••
5,373,943
4,824,190
5.237,855
2,833,406
97,900
165,430
947,241
18,320
66,274
2,564,424
82,988
192,705
853,B47
9,723
45,033
2,787,889
84,525
191,919
875,19 1
16,100
64,583
Total demand deposits ........ . .. ...... .
4,128,571
3.748,720
4,020,207
nme deposits
Indi .... lduals. portnerships, and corporations ••••
United Slates Go .... ernment ............. . .. .
Postal sa ....ings •••••••••• •• •••.•• • .•••••.•
Stales and political subdl ....islons ..••.•.•••••
Bonks in the U. S. and foreign countries ••••.•
658.550
13,662
452
128,233
1,210
550,464
9,813
450
132,032
1,883
653,792
13,361
452
109,657
602
Total time deposils •••••••••••••••••••••
802,107
694,642
777,864
Total deposits •••••••••••••••••••••••
Bills payable, rediscounh, etc. •••••••••••.••••
All other liabilities •••••••••••••••••••••••••
Total capitol occ:ounh ••• ••• ••••••••••••••••
4,930,67 8
20,000
55,454
367,811
4,443,362
3,000
45,150
332,678
4,798,071
17,050
60,101
362,633
TOTAL LIABILITIES AND CAPITAL. ••••••••
5,373,943
4,824,190
5,237,855
tion firms, retail and wholesale trade eSLablishments, and
sales finance companies were heavy borrowers during the
4-week period, while commodity dealers, public utilities, and
manufacturers of metal and metal products moderately
reduced their indebtedness,
During the 4-week period, the weekly reporLing banks reversed the trend prevalent since the beginning of the year
and added $61,842,000 to their holdin gs of United States
Government securi ti es, Acquisitions of short·term bills and
certificates totaled $52,218,000, and bond portfolios increased $10,292,000,
Feb. 23,
1955
ASSETS
loons and discount •••• , •••• , •••• , •••• , ••• , •• ,.
United States Government obligations, , •••• •••• ,.
Other sectlrities •• " ••.••••••• , • •••••••••• ••• , ,
Reserves with Federal Res.r ....e Bank ••••• , ••••••• •
Cosh In voulte ••••••••••.•• , .••• , ••• • •• •••••••
Bala nces with bonks in the United S,ates •••••• ••••
Balances with bonks in foreign countries•••••••••••
C(lsh Items in procell of colleclian., ••• , •••••• •• • •
Other auetsll,., •••• " •••••••••• , •• , •• , •••• ••
$3,495
2,421
550
951
135
1,031
2
333
176
$3,119
2,306
456
982
146
1,010
1
335
151
$3,513
2,505
547
960
127
1,076
2
422
185
TOTAL ASSETSe •• • , •••••••• • ••••• , ••••• ••••
9.094
8.506
9,337
LIABILITIES AND CAPITAL
Demond deposits of bonks . , ...... , ...... .... ..
OUler demand deposits, ••••••••• , •• , •• •••• , •••
TIme deposits., ••• , ••• , • •• , • • • ••••••••• •• •• ',
1,045
6,134
1,2 10
991
5,817
1,061
1,003
6,420
1,177
Total deposits •••••••••••••• , • • •••••• ••••• ••
Borrowingse , •..• • •••••• , •••• , •••• , ••••••••••
Other liabllitlese ••• • ••• • , •••• ,., •• , •••••••••••
Tolal capitol accounts-, ••••• • ••••• , •••••• •••••
8,389
6
67
632
7,869
60
577
0
8,600
23
84
630
TOTAL LIABIlITIES AND CAPITALe •••••••• •••• ,
9.094
8,506
9,337
e-Estimated.
weighted heavily by an $18,576,000 expansion in funds of
states and political subdivisions.
Member bank reserve balances at the Federal Reserve Bank
of Dallas rose $25,172,000 during the 4 weeks ended April 20.
Principal factors con tribu ting to the expansion included
Treasury operations, which added $143,482,000, and a
$14,,426,000 increase in local Federal Reserve credit. Partially offsetting these expansive factors were currency transactions that absorbed $2,053,000 and a $130,528,000 flow of
funds from the District. Other deposits and other Federal Reserve accounts, together, subtracted $155,000 from reserve
balances. The increase during the 4-week period brought the
total rise since the first of the year to $14,692,000, as compared with a $23,977,000 decline in the comparable 1954
period,
Debits to demand deposit accounts at banks in 24 District
cities totaled $7,194,331,000 in March, up 18 percent from
February and 13 percent above the year-earlier amount. Reflccting the larger number of business days in the month,
debits in each reporting center were higher than in February.
CHANGES IN FACTORS AFFECTING
MEMBER BANK RESERVE BALANCES
Eleventh Federal Reserve District
(In thousands of dollars)
CHANGE'
~
,
The ability of the banks to increase both loans and holdings
of Government securities arose primarily from a $132,607,000
expansion in deposits, which contrasts with a rise of only
512,100,000 in the comparable 1954 period. The $108,364,.
000 gain in demand deposits resulted mainly from substantial increases in funds of domestic banks, indiv;duals, and
businesses and of the United States Government that were
offset partially by a contraction in state and local government deposits, The $24,243,000 rise in time deposits was
4 weeks ended
April 20, 1955
RESERVE BALANCES
April 20. 1955 ... " .. , .... ,...
March 23, 1955 ........ ,......
$1,021.203
$ 996,031
1 Sign of change indicates effect on reser ....e balances.
+$ 14,426
130.528
+ 143,482
2,053
338
+
183
-$ 19,732
- 205,064
+ 195,244
+
41,634
976
+
3,586
+$ 25,172
FACTORS
Federa l Reserv. credit-local. , ••• , ••••• , ••••• , •
lnterdistrict commercia l and financial transactions ••••
Trl'!osury operations •• " .•• , •••••..••• " •• ,., .•
Currency transactions. , • , •• , ••••••••••.•••. , •••
Other deposits at Fed.ral Res.r ....e Bonk . , •• , •••.•
Other Federal Reserve accounts, •••••• , •••• , ••••
D.c. 29, 1954April 20, 1955
+$ 14,692
MONTHLY BUSINESS REVIEW
6B
BANK DEBITS, END·Of·MONTH DEPOSITS
AND ANNUAL RATE Of TURNOVER Of DEPOSITS
CONDITION OF THE fEDERAL RESERVE BANK Of DALLAS
(In thousands of dollars)
(Amounts in thousands of dollars)
AprillS,
DEBITSl
Item
DEPOSITS'
Percentage
change from
Area
ARIZONA
Tucson •• ••••••••••••
LOUISIANA
Monroe •••••••••••••
March
1955
Morch
Flllb.
1954 1955
$ 136,054
23
15
56,641
252,442
10
16
23
19
Roswell . ........••.•
TEXAS
29,664
8
66,146
158,127
137,233
125,163
168,168
14,498
2,058,668
249,389
631,032
81,546
2,015,106
20,388
138,907
53,823
46,484
478,508
17,719
74,325
88,092
96,208
14
18
14
-2
11
3
14
18
21
2
8
-1
41
18
16
17
-1
24
5
11
12
15
10
13
10
11
17
16
23
12
22
10
4
9
20
20
7
17
14
14
13
18
March 31,
1955
15
Abilene •.•••••• .. •• •
Annual role of turnover
Shre veport ••••• .• .• •
March Morch
feb .
1955 195.4- 1955
93,860
17.3
15.5
41,895
15.8
15.8
14.5
15.7
12.6
13.1
29,235
12.0
11.5
10.2
13.6
11.6
14.8
13.1
$
NEW MEXICO
Amorillo •••••••••• ••
Austin .••••.. • .•.•. •
Beaumont •••• •••• •• •
Corpus Christi •....• ••
Corsicana • ••• •••••••
Dallas ............. .
EI Paso •• • •• ••••••••
Fori Worth .•...•...•
Golveston .......•...
Houston ......... ... .
Loredo .. ...........
Lubbock ..•... .. . ...
Port Arthur ... . . .....
San Angelo ...•......
San Antonio •.• ......
Texarkana ' .•.. . .... .
Tyler .... . .•.•......
Waco ............. .
Wichita Falls ..... . ...
Total-24 cities . ....... $7,194,331
833,631
6,080
.4,387
9.46/497
April 15,
1954
March 15,
$ 825,669
$779,026
700
5,013
927,519
933,232
981,413
717,983
1955
o
956,964
1,039,114
376
967,903
968,279
1,005,622
711,231
700,767
15.1
181,316
Total gold certificate reserves . .... . . ... . .. . .
Discounts for member banks . . .......... . .. .
Other discounts and advances .............. .
U. S. Govemment securities . .. . ............ .
TOla l earning assets • .. ........... .... .....
Member bonk reserve deposits •. ............
Federal Reserve notes in actual circulation ... . .
1955
59,175
13.2
109,70.4115,013
17.3
16.3
14.6
15.6
21,784
956,512
14.4
14.8
18.6
7 .9
25.7
127,117
23.0
350,765
71,096
21.5
13.9
20.6
100,670
106,941
1,144,927
18,761
7.1
21.7
19..417.4
12.7
16.8
20.9
13.2
11.6
16.6
16.0
12.1
16.9
12.4
13.9
13.9
15.0
14.5
10.9
10 .1
14.2
11..4
15.7
15.2
11.0
12.8
15.6
lD.6
97,823
46,353
336,220
17,207
57,018
68,590
103,.400
v
19.8
19 .•
16.7
Earning assets of the Federal Reserve Bank of Dallas rose
$23,732,000 between March 15 and April 15, reflecting in·
creases of $18,978,000 in United States Government securities and $5,380,000 in member bank borrowings and a $626,000 decline in other discounts and advances. Other changes
in the bank's condition included increases of $54,605,000
in gold certificate reserves and $57,701,000 in member bank
reserve deposits and a decrease of $6,752,000 in Federal
Reserve notes in aClual circulation.
13.3
13.3
9.6
13.0
40,8.42
$4,296,224
17.8
7.9
24.2
21.0
19.4
12.7
13,1
16.7
the seventh consecutive month to reach a new peak of $1,202,162,000, a level 16.6 percent above the year·earlier average.
16.0
12.0
1 Debits to demand deposit accounts of individua ls, partnerships, and corporations and
of slates and political subdivisions.
, Demand deposit accounts of Individuals, partnerships, and corporations and of states
and political subdivisions.
, These figures include only one bonk in Texorkana, Texas. Totol debits for all banks in
Texarkana, Texas.Arkonsas, including two banks located in the Eighth District, amounted to
$36,258,000 for the month of March 1955.
Increases over March 1954 were reported in all but three
cities. The annual rate of deposit turnover advanced to 19.8
in March, compared with 16.7 in February and 19.1 in
March 1954.
Gross demand deposits of District member banks averaged
$7,237,908,000 in March, down seasonally 1.2 percent from
February but 6.1 percent greater than in March 1954, The
month·to·month decline stemmed primarily from decreases at
country banks. Time deposits of member banks increased for
NEW PAR BANKS
The Beaumont State Bank, Beaumont, 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,
April 18, 1955. The officers are: William Blieden, President (inactive); Samuel B. Landrum, V ice President
(inactive); Jack H, Henderson, Executive Vice President; and W. E. Edgar, Vice President and Cashier.
The Vidor State Bank, Vidor, 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, April 1,
]955. The officers are: C. B. Keeland, Jr., President,
and W. E. Keeland, Vice President and Cashier.
Refinery crude runs in both the
District and the Nation were cut
back markedly during the first part
of April, following moderate reduc·
tions in the preceding month. Dis·
trict refinery runs averaged 2,166,000 barrels per day, which ' ~
is 53,000 barrels below the March average although 126,000 ~
barrels higher than in April last year. Meanwhile, refinery
runs in the Nation during the first part of April, at 7,071,000
barrels per day, were 318,000 barrels lower than in March
but 260,000 barrels higher than in the same month a year
earlier. A substantial number of major refiners announced
appreciable cutbacks in their refinery runs for April and
May.
'
The decline in refinery crude runs from Lhe record levels
prevailing in February has been occasioned by the seasonal
decrease in the demand for heating oils and the current high
level of gasoline stocks. While refinery yields of gasoline
were reduced during the winter months, the large refinery
runs needed to meet heating oil demand tended to build up
an already high volume of gasoline stocks. On . April 1,
such stocks totaled a record 185,300,000 barrels, or more
than 20,000,000 barrels above the level genera11y considered
desirable at this time of year.
Warming spring temperatures, which have weakened heat·
in g oil demand, have stimulated appreciably the demand for
gasoline. In the 5 weeks ended April 15, such demand at pri.
mary levels was about 6 percent higher than in the same
period last year. The high level of gasoline demand tends to
minimize the possible unfavorable consequences of a heavy
stock position in this product.
Despite the sizable reduction in refinery crude runs, crude
oil production in April was down only slightly from the
March volume. In the District, daily average crude oil pro·
69
MONTHLY BUSINESS REVIEW
CRUDE OIL: DAILY AVERAGE PRODUCTION
(In thousands of barr.h)
Chonge from
March
1955 1
March
February
1954 2
1955 1
ELEVENTH DISTRICT. •••••••• 3,305.7
Texal ........... . . ... .. 2,969.8
Gulf Coast ............
637.2
3,809.1
1,172.7
1,059.4
244.5
84.0
3,259.4
2,932.1
631.0
1,158.4
236.9
86.0
819.8
217.7
109.6
3,499.1
6,758.5
Area
West Texas ...........
East Texas (pro~er) .....
Panhandla . .
237.'
87.5
835.0
223.9
Of • • • • • • • • •
Rest of State ..•..... ...
Southeasfem New Muieo ..
Northern louisiana ...... ..
112.0
OUTSIDE ELEVENTH DISTRICT. 3,534.1
6,839.8
UNITED STATES ••••.......•
2)73.5
601.8
783.8
200.1
115.5
3,417.4
6,506.5
March
1954
-503.4
196.3
35.4
113.3
-7.1
3.5
51.2
23.8
-3.5
116.7
333.3
February
1955
46.3
37.7
6.2
14.3
.5
1.5
15.2
6.2
2.4
35.0
81.3
SOURCESl 1 Estimated from American Petroleum Institute weekly reports.
2: United States Bureau of Mines.
duction during the first half of the month amounted to 3,286,000 barrels, or only 19,000 barrels less than iu March and
118,000 barrels higher than iu April last year. In the Nation, crude production averaged 6,819,000 barrels per day,
which is down 21,000 barrels from the previous month but
204,000 barrels above a year earlier.
May crude production in the District, however, probably
will show a substantial decline, The Texas Railroad Commission reduced daily allowables for this mouth to 3,072,000
barrels, representing a reduction of 214,000 barrels from the
mid·Aprillevel and the lowest allowable for any month duro
ing the current year.
Imports declined considerably iu recent weeks, in contrast
with the small decrease in domestic crude production. During
the 5 weeks ended April 15, total imports averaged 1,214,000
barrels per day, or 132,000 barrels less than in the previous
5 weeks although 235,000 barrels higher than in the same
period a year ago, However, the recent decline was entirely
in residual fuel oil imports, which usually decrease at this
time of year; crude imports continued in approximately the
same volume,
The cutback in refinery crude runs, coupled with the continued high level of domestic crude production, has resulted
in an increase in crude oil stocks in the Nation. Crude stocks
on April 9 totaled 269,100,000 barrels, representing a gain
of 9,100,000 barrels in 6 weeks. At this level, crude stocks
were about the same as a year earlier and were only a little
higher than what the industry generally considers desirable.
Marketed production of natural gas in the four producing
states lying wholly or partly within the District rose to a
record high in the fourth quarter of 1954. Totaling 1,849
billion cubic feet, marketed production was 14 percent higher
than in the third quarter and almost 5 percent higher than
in the same quarter of 1953. Seasonally heavier heating needs
of existing resideutial and commercial users, together with
con tinued expa nsion in the number of consumers, largely acco unted for the rise in production in the last quarter of 1954,
For the year, marketed production in the District states
amounted to 6,910 billion cubic feet, or 3 percent higher
than in 1953. District production in 1954 comprised approxi.
mately 80 percent of the national total, or about the same as
a year earlier.
Nonagricultural employment in
the District states during March increased 27,300 over February to
reach a total of 3,815,100, or 70,700
more than in March 1954. Gains
occurred in all industries, but the largest increases were
accounted for hy seasonal influences in retail trade, construclion, and such manufacturing lines as apparel, machinery,
and construction materials,
Manufacturing employment rose 4,000 to a March total of
700,600, placing such employment above the year· earlier
level for the first time since 1953. Transportation equipment
manufacturing continues to supply a large number of jobs,
although a slight decliue is apparent as fluctuations in mili.
tary needs vary production schedules in aircraft manufacturing. However, aircraft workers laid off in Texas are being
sought actively by manufacturers in other parts of the
country,
The value of construction contracts awarded in the District
during March totaled $160,055,000, or 23 percent above February and 4,2 percent above a year ago. The most important
factor in the March total was nonresidential construction
awards, which were 59 percent more than in February and
45 percent over March 1954. Residential building awards,
NONAGRICULTURAL EMPLOYMENT
five Soulhweslern States1.
Perce nt change
March 1955 from
Number of persons
February
March
Fe b.
Type of employment
March
19S5e
March
NA TURAl GAS: MARKETED PRODUCTION
1954r
1955
1954
1955
Four Southwestern States
Tolal nonagricultural
wage and salary workers ..
3,815,100
3,744.400
696,200
3,048,200
232,200
254,300
3,787,800
696,600
3,091,200
233,800
257,200
1.9
.6
2.2
.9
5.1
J
.6
.8
394,100
954,100
152,800
434,400
626,300
383,900
967,100
158,300
.439,500
651,400
-1.8
2.1
4 .0
1.2
4.4
700,600
Nonmonufocturing • ••• .•• • 3,114,500
234,200
Mining ••••...•••••••• •
267,200
Construction . ••...... ..
Manufacturing .•........ .
(In millions of cubic feet)
Fourth
Fourth
Third
quarter
quarter
quarter
Area
1954
1953
1954
1954p
1953
louisiana ..•.... .
New Mexico •....
365,3 00
285,900
1,293,64.4399,086
599,955
4,383,158
6,675,843
Transportation and public
utilities ••••.•••••••. •
Finance . •• •.•.••.•••••
387,100
973,800
158,900
Service .•............ .
439,700
Governmen t ••••••• ••••
653,600
Trade .... . .... ..... . .
t
133,500
321,200
117.300
1.45,800
Oklahoma •••.• . •
Texol ........ . . 1.20.4.000
161,.400
1,167 •.400
113,000
152,600
1,069,600
1,246,700
478,900
623,200
4,561,000
Total. .....•.. 1.848,600
1.767.300
1,621,100
6,909,800
p_Preliminary.
SOURCEI United Stotes Bureau of Mines.
1 Arixona, Louiliana, Hew Mexico, Oklohoma, and Texal.
e-Estimated.
r-Revised.
SOURCES: Stat. employme nt agencies.
Federal Reserve Bonk of Dallas.
.2
3.9
.8
.7
.4
.05
.3
MONTHLY BUSINESS REVIEW
70
VALUE OF CONSTRUCTION CONTRACTS AWARDED
DOMESTIC CONSUMPTION AND STOCKS OF COTTON
(In thousand. of dollars)
(Bal •• )
March
1955p
Area and type
August-February
January-March
March
February
1954
1955
1955p
1954
ElEVENTH DiSTRICT .... $ 160,055 $ 113.089 $ 130.636 $ 417.563 $ 300.462
Residential.........
73.276
53,260
203,958
150,207
79.586
All other. . . . . . . . • . .
86,779
59,829
51,050
213,605
150,255
UNITED STAlESt •..•.• 2,134,819 1,527,517 1,581,143 5,220,412 3,900,824
Residential. • • . . .• . .
989,730
667,737
744,102 2,.424,187 1,638,992
All other ........ • .. ',145,089
859,780
837,041
2,796,225 2,261,832
1 37 states east of the Rocky Mountains.
p-Prelimirtary.
SOURCE: F. W. Dodge Corporation.
willie 38 percent above March last year, decreased 8 percent
from the preceding month.
During the first quarter of 1955, the value of construction
contracts awarded in the District was up 39 percent from the
same period of 1954. Residential awards rose 36 percent, and
all other awards gained 42 percent. In the Nation, total
awards increased 34 percent over last year; residential
awards, 48 percent; and all other awards, 24 percent.
The continuing rise in construction activity is illustrated
further in a comparison of the number of dwelling units pro·
vided by contract awards. New single.family units provided
in Texas during the first quarter of 1955 totaled 13,370,
compared with 10,128 during the first 3 months of 1954.
Construction of multifamily units is down sharply, with the
1955 first.quarter total of 1,121 being 25 percent lower than
the total for the comparable period in 1954.
With the increase in construction activity, the demand for
cement has turned sharply upward. Texas manufacturers in.
BUILDING PERMITS
February
1955 1
Area
February
1954
January
1955 1
This season Lost season
CONSUMPTiON
Total
Texos mJlls ..........
11,598
78,815
84,776
10,632
10,967
U. S. mills ...........
720,815
685,546
711,286 5,126,907 5,107,216
Daily a¥erage
Texas mills ..•......•
531
577
541
590
548
U.S. mills •••••••••••
34,544
34,763
36,6045
34,852
35,564
STOCKS,U. S.-End of period
Con$uming establisnmentl. 1,877,945 1, 821,878 1,801 ,753
Public storoge and
tomprenes .•... •. ... 12,741,826 11,528,162 13,471,230
I Four weeks ended February 26.
• Four weeks ended January 29.
SOURCEl United States Bureau of the Censvs:.
creased production during the first quarter in 1955 to 17,939,000 hundredweight, an increase of 30 percent over the first
quarter in 1954. The shortage of glass which has confronted
the construction industry for several months is likely to con·
tinue for at least 60 days, as new orders are being placed 2
or more months in advance of deliveries. One result of this
tightness has been a rise in imports of Belgium glass.
Mining activity in the District states, as in the Nation,
continues at a high level, with copper production in March
exceeding any other month since World War II. An increase
in the price of copper has failed to alleviate the continuing
shortage, and the Federal Government has acted to make
17,500 tons available from its defense stockpile. The shortage
of copper generally stems from two influences: (1) labor
disputes in mines throughout the world during the fal! and
winter months and (2) the sharp rise in demand from auto·
mobile and other durable goods manufacturers. Sulfur pro·
duction in Texas, which provides approximately 75 percent
of the Nation's output, amounted to 1,040,321 long tons
during the first quarter of 1955, representing an increase
of 37 percent over the comparable period in 1954.
3 months 1955
Percentage
Percentage
change In
valuation
fram 3
months
change In
valuation from
March 1955
March
Area
Valuation
616 $ 2,571,149
1954 1955 Number
53
1,412
1,722,558 35 -21
3,510,531
89
69
4,658,025
19
65
697,908
29 -13
3,135,319
16
61
17,816,515 44
-8
3,587,824 101
5
6,468,382 58
19
252,654 -83
26
15,495,106
44
1
3,318,467 142
76
615,042
15 -11
5,273,980
19
-6
1,451,129 32
10
1,136,782 41
5
18
466
812
909
897
Valuation
$
5,981,178
Total-16 cities . • 11 ,2 11 $71.711,371
29
17
4,922,932
7,409,231
UNITED STATES
August 1 to February 28
Thll season
Lost season
This season
Last season
1,630,095
1,125,968
592.258
5,027.742
3,845,288
1,412,061
6,017,057
4,285,796
1,879,379
381,200
366,354
541,074
541,085
255,140
328,207
1,246,980
1,874,063
827,947
1,245,072
1,390,798
2,031,022
941,317
1,3 58,243
20,263
36,136
32,977
50,890
67,007
257,064
68,917
356,759
146,087
1954
15
TeXAS
Abilene •. • ...•
176
Amarillo ..••..
336
Austin ........
366
Beaumont ..•..
368
Corpus Christl .•
535
Dallas .......• 2,683
549
EI Pasa .......
934
Fort Worth .••.
Gar¥eslon ..•••
124
Houston .• • .... 1,231
Lubbock ..•. ••
381
Port Arthur .. ••
207
Sen Antonio .•• 2.219
Waco •..•...•
318
Wichita Fall •.••
168
TEXAS
August 1 to February 28
Number
LOUISIANA
Shreveport ••.•
Feb.
COTTONSEED AND COTTONSEED PRODUCTS
2,385
322
3,305
857
445
5,600
783
433
36,625,178
7,709,626
1,652,552
16,546,73 3
4.403,174
3,053,376
74
101
20
-17
16
58
98
49
-66
-3
16
87
58
32
45
28,578
$184,611,797
Item
conONSEED {tons}
Received at mills ... •.. ..... 1,420,4 55
Crushed .................. . 1,141,309
Stocks, end of period .... ....
423,022
32
1,512
6,950
1,490
10.458, 185
2.124.844
8,230,150
50,329,183
9,555,774
15,005,112
604,569
COnONSEED PRODUCTS
Production
Crude oil (thousand pounds).
Cak. and meolltons} ..... .
Hulls (tons} .. .... . . . . . ...
linters (running boles) ... .•
StOCKS, end of period
Crude oil (thousand pounds).
COK. and mea l (tons) ......
Hulls (tons} ...... .. .... ..
linters (running bale s) .....
262.405
327,216
10,685
44,028
17,409
77,908
SOURCE: United States Bureau of the Census.
98,299
88,486
213,459
~
~
@FedFRASER