Full text of Review (Federal Reserve Bank of Dallas) : May 1967

View original document

The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.

business
•
review

may 1967

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

contents

farm programs and trade

trust operations of
eleventh district banks

district highlights

.. . . .. ..... ........ . . ..... 12

la,8m prog,-ams
and trade
The agricultural industry of the United States
as a whole, as well as that of the Southwest, is
One of the most efficient sectors of the Nation's
economy. The gains in productivity reflect the
Use of improved technology and heavy investroent in capital equipment. Increased output per
roan-hour has made it possible to reduce the
total labor requirement almost one-third during
the past decade. The release of manpower has
made more labor available for other segments
of OUr economy and placed those persons remaining in farming in a more fully employed
status.
Efficiency in agricultural production has not
been aCcomplished without creating some diffiCUlt problems. These problems partly arise from
the fact that literally millions of individual
farro producers could not compete for the resources needed in an efficient farm enterprise.
FUrther, the agribusiness firms and consumers
depending Upon the farm industry for supplies
feel the effects of a rapidly changing agriculture.
The nature and implications of the problems
TOTAL WORKERS ON FARMS
FI VE SOUTHWESTERN STATES
THOUSANDS OF PERSONS

900

800

o
SOURCEI U,S, OCP8rtnll.HlI of Agrieultur o.

are of such magnitude that, for many years,
public policies have been directed toward finding equitable solutions for them.
Current agricultural programs are designed
to provide adequate supplies of quality food and
fiber at reasonable prices for domestic and export markets, to prevent excessive accumulation
of stocks, and to maintain farm income at acceptable levels. In order to bring these allencompassing objectives to fruition, acreage
restrictions, various types of direct payments,
regulatory requirements, and export promotion
programs have been utilized.
Government programs instituted with the objective of directly influencing the level of f~rm
income and prices receive the greatest attentton.
The method most frequently used - and perhaps best known by the general public - for
accomplishing this objective in the case of crops
is acreage restrictions. In the Southwest, most
of the major crops are under both price-support
programs and acreage restrictions. In the discussion that follows, attention will be directed
toward programs related to cotton, rice, sorghum grain, and wheat since these crops account for the larger proportion of the total
planted acreage in the Southwest. Despite attempts to curb acreages planted to these crops,
production has generally increased.
The acreage of cotton, grain sorghum, rice,
and wheat in the five southwestern statesArizona, Louisiana, New Mexico, Oklahoma,
and Texas - declined 9 percent between 1957
and 1966, but the production of these crops
increased 20 percent. Acreage reductions occurred for cotton and grain sorghum. The tremendous improvements in sorghum grain yields

business review/ may 1967

PRODUCTION OF FOUR MAJOR CROPS
Five Southwestern States
(In thou sa nds of units)
Sorg~um

Yea r

Cotton
(Bal es)

Rice
(Bags)

grain
(Bushels)

Wheat
(Bush els)

1957
1958
1959
1960
1961
1962
1963
1964
1965
1966

5,242
5,953
6,327
6,445
6,762
6,794
6,544
6,057
6,616
4,535

21,804
22,561
26,046
25,876
2 5,257
31,895
35,825
36,102
39,534
42,398

272,646
283,920
291,005
298,266
263,320
235,946
283,913
248,239
340,923
362,428

82 ,331
193,100
153,965
206,420
205,664
120,879
127,356
167,531
216,444
178,516

SOURCE: U.S. Department of Agriculture.

per acre made possible a 33-percent gain in
production despite a 27-percent decrease in
acreage. Cotton yields also have improved, and
the accumulation of stocks required a program
change for the 1966 crop. The change resulted
in a 31-percent reduction in acreage and a 13percent decrease in production. Rice acreage
expanded 43 percent, and output about doubled
in the past decade. Even though wheat acreage
increased only 37 percent, production has more
than doubled since 1957.
CASH RECEIPTS FROM FARMING
FIVE SOUTHWESTERN STATES

p.Pre limin ary)
SOURCE ~

U,S. Depa r tm ent of Ae r icultu ro.

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

Acreage control programs are based upon
past acreages and yields; but rapid adoption of
new technology, favorable weather, shifts in demand, and other factors quite often result in
an output of agricultural commodities which is
different from the projected volume. The larger
supply usually calls for a change in crop
programs.
Changes in Government programs from year
to year introduce elements of uncertainty, and
abrupt changes can be quite disruptive for local
economies, as well as the level of cash receipts
from farming. A recent example of a change in
a Government program that had a rather drastic impact upon both cotton producers and
agribusinesses occurred in connection with the
1966 cotton program. The new program permits
a maximum acreage diversion of 35 percent and
provides for two direct payments to farmers.
Texas - the leading cotton-producing State-especially felt the brunt of this change.
Many local areas derive a large proportion
of their incomes directly or indirectly from the
production of cotton. Agribusiness firms that
supply farmers with items used in production
and those that provide processing, warehousing,
and marketing services definitely felt the impact
of the reduced volumes of business. The cottoll
acreage harvested in Texas in 1965 was 5.6 million acres, but the acreage in 1966 was reduced
to 4.0 million acres, down 28 percent. The output from the reduced acreage totaled 3.2 million bales, or almost 1.5 million bales belo\\'
that of 1965.
The changing patterns of demand for graiJl
crops, both in domestic and in foreign marketS,
also have often necessitated rather abrupt adjustments. In the late fifties, a program of diverting acreage while maintaining high Government price supports did not reduce the size
of crops harvested nor the accumulation of large
carry-overs. The carry-over of grain cropS had
reached unworkable proportions by 1961. Since
that time, a goal of maintaining a balance

among output, stocks, and disappearance ~as
been given increasing attention. The reductIOn
in acreage and a strong foreign demand have
ll1ade it possible to accomplish this goal. The
grain programs were rewritten in the early sixties, before the great export potential was apparent. Many of the restrictions placed on grain
crops by the 1962 feed grain program have
s.ince been changed in recognition of the depletIon of surplus stocks and the expanded export
demand.
Price supports and acreage control programs
for feed grains are related to livestock production indirectly through feed cost and supplies.
Although livestock prices have not been dir~ct1y supported by the Government on a contlUuing basis, market prices have been strengthened from time to time by Government purChases of meat for school lunch and welfare
programs. The prices of wool and mohair have
been subject to an incentive price-support program for a number of years.
. Despite the growth in population, the productive capacity of American farms has exceeded
domestic food consumption requirements. Thus,
the Dnited States has maintained a vital and
Continuing interest in foreign markets as an outlet for farm production. The agricultural exPort market has improved steadily during the
past several years, and the value of agricultural
eXports reached $6.7 billion in 1966. The increased volume may be attributed to the genera~ly high level of economic activity in eight
tnajor importing countries. The industrialized
n~tions of the world provide more than two~llrds of the demand for American products.
ommercial sales have grown faster than sales
tnade .
With Government assistance and presently
ou nt
:cc
for approximately 60 percent of the
otal value of commodity exports.
Domestic consumption of feed grains has expanded I
br
,argelYJas a result of the greater numce . of animal units being fed . Declines in per
aplta human consumption of grains have about

ACREAGE DEVOTED TO MAJOR CROPS
FIVE SOUTHWESTERN STATES
MILLIONS OF ACRES

SOURCE: U.S, Dopartment of Agri cultur e.

offset the gain in population. On the other hand,
increased foreign demand reflects population
growth, affluence, and very poor crop harvests.
Export markets currently take the output of
one-fourth of all the acreage planted to crops.
Over half of the wheat produced is presently
being exported, as well as 50 percent of the
sorghum grain crop and about 55 percent of
the rice output. Foreign shipments of cotton in
1966 declined to the lowest level since 1958
CARRY-OVER OF SPECIFIED CROPS

Un ited States
(In mi ll ions of units)

Year

Cotton,
August 1
(Ba les)

1957
1958
1959

11.3
8.7
8.9

1960
1961
1962
1963
1964

7.6
7.2
7 .8
11.2
12.4
14.3
16.9

1965
1966

Rice,l
August 1
(H u ndre d·
w eigh t)
20 .1
18.2
15.7
12.1
10.1
5.3
7 .7
7 .5
7.7
8. 2

Sorgh um
grain ,
October 1
(Bushels)

Wheat,
JUl 1
(Bus els)

79 .4
309.4
509.7
581.2
701.9
661.0
654.6
648.8
565.5
391.2

908.8
881.4
1,295.1
1,313.5
1,411.2
1,321.9
1,194.9
901.2
817.7
535.2

Rough equiva lent .
.
SO URCE: U.S . Department of Agriculture.

business review/may 1967

and were the equivalent of about 20 percent of
the previous year's crop and 23 percent of the
acreage. The high level of disappearance in
recent years has reduced the carry-over of all
major grain crops to, or below, desired levels in
relation to expected domestic use plus a reserve
to meet emergency needs. In contrast, the carryover of cotton fiber at the beginning of the
1966-67 marketing year was a record.
The southwestern states are major participants in the export market. In fact, Texas ranks
second in the Nation in the total dollar volume
of agricultural exports. The southwestern states
rank high in exports of cotton, rice, sorghum
grain, and wheat. The acreage planted to these
crops accounts for more than 60 percent of aU
crop acreage in the region; and since a high
percentage of the production of each crop is
exported, foreign demand is highly important
to the Southwest. Furthermore, the favorable
agricultural trade position is a great asset in the
overall U.S. balance-of-payments situation. The
value of agricultural imports in fiscal 1965-66
is placed at $4.5 billion, or $2.2 billion less
than exports.
The Government policies concerning exports
of U.S. agricultural commodities are centered
around Public Law 480, which has four major
divisions, or titles. Title I establishes provisions
for sales subject to payment in foreign currency.
During the past 10 years, the total dollar value
of sales under Title I has exceeded that under
the other three titles combined. Title II of
Public Law 480 is designed to provide disaster
relief. Title III has two provisions - one for
donations and the other for barter. Title IV
makes provisions for long-term supply and for
dollar credit sales. Total agricultural exports
during the past decade were valued at $57 billion, of which amount commercial exports for
dollars accounted for $40 billion.
U.S. exports of agricultural products for noneconomic reasons have been increasing, particularly exports of some commodities. Much of

U.S. AGRICULTURAL EXPORTS AND IMPORTS
(Yea r ended Jun o 30)
BILLIONS OF DOLLARS

7 rr=====~==~~~~

SOURCE: U.S. Department of Agrlculturo .

the sUlplus wheat and sorghum grain has been
shipped to India and other developing countries.
Wheat is the major commodity sold under public Law 480 for soft currencies (those with fluctuating values), and India has been the leading
recipient. Such shipments were mainly responsible for reducing the U.S. wheat carryover from 1.4 billion bushels in 1961 to 536
million bushels in 1966. The use of agricultural
commodities as a stopgap measure while the
country develops its agricultural plant has become an increasingly important method of assistance. Soft currencies received through theSe
sales have been used, in many instances, by the
U.S. Government to provide technical assistanCe
and to pay other expenses in the receiving
countries.
The payment of subsidies to domestic exporters has been necessary to enable them to coOlpete pricewise. In particular, a subsidy has been
needed for commodities when our support
prices were at higher levels than international
market prices and when most products were in
surplus domestic supply. Another purpose of
a subsidy is to help American exporters overcome the tariff barriers imposed by receiving
countries. The tariff placed upon the importation of a commodity usually raises the price ~:
the port of entry to, or above, the domes tt

price of that country. Thus, if trade is to be condUcted, the American exporter must either pay
a considerably lower purchase price or receive
payment of a magnitude that will overcome the
tariff.
The present differential between U.S. prices
an.d World prices is much smaller than when
pnce-support levels for domestic crops were
much higher. The price of cotton remained high
Until 1966, when the support level was reduced
~ the .estimated world price. The artificially
thgh pnce of American cotton had encouraged
e production of cotton in add itional countries
and, also, promoted greater efforts on the part
~f those countries that had long been producers.
he producers of man-made fibers had received
enCOuragement to expand output since cotton
wfas less competitive. The expanded production
oh for·
elgn cotton and man-made fibers placed
t e American cotton industry at a distinct disadvantage in world trade.
The future of U.S. agricultural exports appea.rs bright, although not equally so for all
rn~Jor commodities. The increasing world popuatJon w1·n PIace a great demand on food and
fib
er. The development by Common Market
~OUntries of relative self-sufficiency with respect
S~t the SUpply of many commodities will neces1 ate adjustment in U.S. production. The under-

developed areas of the world will need a considerable amount of food aid, as well as other
assistance, for a number of years. If these countries are able to develop their economies satisfactorily, they may someday become large commercial importers of American agricultural
products, as has our number 1 buyer, Japan.
With world conditions in an unsettled state,
a relatively large volume of U.S. products will,
no doubt, be exported for political and socioeconomic reasons. World food production will
have to be doubled in the next 33 years merely
to maintain the present deficient diet level of
most of the world's people. The United States
undoubtedly will encourage the underdeveloped,
deficit food-producing nations of the world to
increase their output. Procedures for accomplishing this task will require the best efforts of
all nations. The United States cannot feed the
world. The heavily populated, low per capita
income nations do not now have, nor are they
likely to have in the foreseeable future, an
effective demand for a large volume of imported
agricultural commodities. Therefore, assisting
these countries to achieve a better balance between food production and the dietary requirements of their population may be the best
ultimate solution.
J. C. GRADY, JR.

business review/ may 1967

t,-ust ope,-ations of
eleventh dist,-ict

ban/~s

Nineteen hundred and sixty-six represented
another year of growth in the trust operations
of member banks in the Eleventh Federal Reserve District, as indicated in the recent survey
of District trust departments. With their total
revenue rising slightly more than 11 percent
and with total expenses increasing almost 10
percent, net income before taxes continued to
advance. For trust departments of the banks
included in the survey, aggregate net income
before taxes equaled 9.6 percent of total revenue in 1966. When deposit credits amounting
to 15.3 percent of total revenue are included
(credits which result from the fact that the trust
department indirectly generates revenue through
the maintenance of deposits), trust department
net income before taxes equaled 24.9 percent
of total revenue.
Each year since 1957, the Federal Reserve
Bank of Dallas, in cooperation with the Trust
Section of the Texas Bankers Association, has
conducted a survey of the income and expenses
of trust departments of member banks in the
Eleventh Federal Reserve District. The survey
is useful to trust departments in that the results
help each department compare its performance
with that of departments of comparable size
in the same geographic region. Information on
trust department operations in 1966 was obtained from 59 banks. These banks accounted
for $17.8 million, or more than four-fifths, of
the total trust department revenue of all member banks in the District.

revenue
Again in 1966, as in every year since the
survey began in 1957, the great bulk of the
total revenue from trust department operations

was provided by personal accounts. While revenue from personal accounts as a percentage
of total trust revenue averaged 84.8 percent fof
all banks in the survey, the relative importance
of personal accounts, roughly speaking, varied
inversely to the size of trust operations. Thus,
in those banks with trust income between
$50,000 and $100,000, personal accounts provided 97.0 percent of total revenue; while in
those banks with trust income of over $300,000,
personal accounts provided the lowest proportion of total revenue (82.6 percent).
This differing importance of personal accounts was, of course, the direct result of the
fact that the remaining type of account - corporate accounts - was more heavily concentrated at the larger banks. Therefore, while
corporate accounts furnished 15.2 percent of
total trust revenue for the banks in the survey,
SOURCES OF TRUST DEPARTMENT REVENUE
AT 59 MEMBER BANKS, 1966
ELEVENTH FEDERAL RESERVE DISTRICT
INTRABANK CREDITS
1.3 %
L2.6 %

PERSONAL
AGENCIES
12 . 7 ~~

PENS ION AND
PROFIT·SHARING
TRUSTS

10.3%

2.2 %

43 .6%

they supplied 17.4 percent of
such revenue at those banks
with trust revenue of over
$300,000 but only 3.0 percent
at those banks with trust
revenue between $50,000 and
$100,000. Breaking down the
categories further the most
important type of ~ersonal acCOUnt was the personal trust
who
,
lch provided 43 .6 percent of
the trust revenue of the 59
banks, and the most important
k'Ind of corporate account was
the corporate agency, which
provided 12.6 percent.

CHANGES IN TRUST DEPARTMENT REVENUE
AT 56 MEMBER BANKS*
ELEVENTH FEDERAL RESERVE DISTRICT

, .

TOTAL: PERSONAl.: ACCOUNTS

·,. ',.,
·
•

"
I

•

•• •••

ALL ACCOUNTS

. In addition to being the most
+15
+19 +23
unportant source of revenue
PERCENT CHANGE , 1966 FROM 1965
!or trust departments, personal
'Ban~s Which reporl ed in bolh 1965 and 1966 survey s.
CCOunts were also the most
raPI'dlY growing component of
total trust revenue last year. For the 56 banks
banks is one of the reasons their trust operawhich reported in both 1966 and 1965, pertions prove more profitable than those at the
sonal account revenue rose 12.1 percent, while
smaller banks.
corporate account revenue rose 6.3 percent. In
Breaking down the categories somewhat furother Words, at these banks, personal account
ther,
based on data from eight of the large trust
revenue increased almost twice as rapidly as
departments
in the survey, the relative profitcorporate account revenue in 1966.
ability of other types of trust accounts varied
f It is Possible to obtain some idea of the relawidely last year, with estates being the least
IVe profitability of personal and corporate acprofitable and corporate trusts being the most
COUnts by examining expense data for the 24
profitable. Thus, excluding intrabank deposit
com
. lb ank trust departments which
' subcredits, estate expenses absorbed $1.02 for each
', me rCla
dIVlded th' .
.
dollar of revenue, while corporate trust exelr Income and expenses 1I1to personal and
penses absorbed only 60 cents for each dollar
th
corporate account categories. For
of revenue. It is interesting to note that corCl~~~ 24 ba~s, net income before taxes, exporate trusts, while relatively small in the trust
trust ng credit for deposits ' was 10.3 percent of
activities of the surveyed banks in the District,
revenue for personal accounts and 3.4
~ercent for corporate accounts. Once allowance showed very rapid growth in 1966. Revenue
IS mad f
from corporate trusts increased slightly more
ear' e or the deposit credit, however, net
than one-fourth from 1965 to 1966.
t . Ulngs before taxes as a proportion of total
rust reve
.
nue
rises
to
slightly
more
than
oneth Ird fo
expenses
fou 1 r corporate accounts and to about one1
por:: for personal accounts. The greater imTotal trust department expenses increased
nce of corporate accounts at the larger
9.8 percent at the 56 banks participating in both
o

business review/may 1967

the 1966 and the 1965 surveys. As in previous
years, the most important component of total
expenses was wages and salaries. For the 59
survey banks combined, wage and salary expenses comprised slightly more than one-half
of total trust expenses. If other expenses related
to wages and salaries are included - such as
pensions and retirements, personnel insurance,
and "other expenses related to salaries" - all
wage and salary expenses accounted for 64.4
percent of total expenses. The importance of
wage and salary expenses is to be expected, of
course, in an activity which requires a great
deal of individual attention and supervision.
While wage and salary expenses were the
most important component of total trust department expenses for the 59 banks included in
the survey, there was a wide degree of variation
among banks in the relative significance of this
component. Generally, wages and salaries comprise a greater proportion of total trust expenses
at smaller banks than at the larger banks. This
relationship is true primarily for two reasons:
As bank size increases, (1) officers' salaries as
a percentage of total expenses decline, but (2)
employees' wages and salaries as a percentage
of total expenses rise. These two factors can be
easily summed up in the ratio of officers to
employees.
For the smallest trust department group in
the 1966 survey, there was about one officer
for each employee in the trust department, while
for the largest group, there was about one officer
for every two to four employees. The decline in
the relative importance of officers' salaries is
more than sufficient, however, to offset the increase in the relative importance of employees'
wages and salaries, so that the proportion of
wage and salary expenses to total expenses
tends to fall as bank size increases.
In addition to comprising over one-half of
total trust expenses, wage and salary expenses
increased somewhat faster than total direct expenses in 1966. For the 56 banks reporting in

DISTRIBUTION OF TRUST DEPARTMENT
EXPENSES AT 59 MEMBER BANKS, 1966
ELEVENTH FEDERAL RESERVE DISTRICT
OVERHEAD
OFFICERS'
SALARIES

ALL OTHER
DIRECT
EXPENSES

25.3"

OTHER
EMPLOYMENT
EXPENSES
8.6 %

26 .7%

both 1966 and 1965, officers' salaries expanded
10.8 percent, and employees' salaries rose 9.0
percent; in contrast, all other direct expenses
combined increased 6.4 percent. The most
rapidly rising items of total expenses were legal
and professional fees (up 35.4 percent), "othel'
expenses related to salaries" (up 31.2 percent),
and overhead (up 21.4 percent). The increase
in overhead expenses, however, was primarily
concentrated at those banks with trust department income of over $300,000.

net income
Net income before taxes at the 59 banks included in the survey equaled 9.6 percent, or
$1. 7 million, of total trust department revenue
in 1966. This compares with the corresponding
figures of 8.2 percent, 6.4 percent, and 7.4 percent in the preceding 3 years.
Of the 59 banks, only slightly more than on e~lalf showed a profit from their trust operations

m 1966. Most of tl1e banks which reported
losses were among the smaller banks whicb
operate trust departments, but a sizable nUlJlber of the larger banks also found their trust

operations unprofitable last year. Of the 29
trust departments with income of less than
$100,000, only a little more than one-third
Were profitable; but of the 30 trust departments
baving income of over $100,000, about twothirds were profitable. An even more striking
demonstration of the relative profitability of
large and small trust departments is given by
the fact that almost four-fifths of the 13 banks
with trust revenue greater than $300,000
showed profitable trust operations.

A more detailed report of the results of
the survey of 1966 income and expenses
of member bank trust departments in the
Eleventh Federal Reserve District may
be obtained upon request to :
RESEARCH DEPARTMENT
FEDERAL RESERVE BANK OF DALLAS
STATION
DALLAS, TEXAS

K
75222

When profits were adjusted for deposit credits
- credits which of course increase the profitabili
'
,
~
ty of trust departments - net income beore taxes for the 59 banks in the 1966 survey
~ose from 9.6 percent to 24.9 percent of total
rust revenue. Of the 59 banks, 30 allowed
Cred'Its for deposits.

the deposit credit as a percentage of total revenue averaged 16.1 percent for eight of the
large trust departments, it ranged from a low of
8.6 percent for estates to a high of 92.1 percent
for corporate trusts.

It is interesting to note, however, that the
amOunt of the deposit credit allowed varies
Co nSl'd erably from bank to bank. While the
average
.
rate allowed was 3.1 percent, the rate
vaned from 2.0 percent at banks with trust
;e~enue between $200,000 and $300,000 to
t' percent at banks with trust revenue be.ween $50,000 and $100000 - a rather strikInrIg variation. Generally' the smaller banks
a Ow a greater deposit credit
'
than the larger
banks It .
Cr d"
IS also interesting to observe that the
e
It allowed for deposits varies widely between d'ff
I erent types of accounts. Thus, while

Trust department revenue and profits in the
Eleventh District continued to grow during
1966, but a significant proportion of the trust
departments, mostly the smaller ones, failed to
achieve profitability. Personal accounts, particularly personal trusts, provided the great bulk
of total revenue from trust operations. These
accounts also demonstrated the most rapid rate
of growth. Expenses increased almost 10 percent, with wage and salary expenses - the most
important component of total expenses - rising
more rapidly than other direct expenses.
DONALD R. FRASER

summary

business review / may 1967

district highlights
Total nonagricultural wage and salary employment in the five southwestern states in
March reached 5,592,400 by rising 0.6 percent
- a greater than seasonally expected gain over February. Manufacturing employment increased slightly. Nonmanufacturing employment, however, displayed a greater rise than
seasonally expected. Employment gains in
trade, partly reflecting Easter season purchases,
and in construction provided most of the upward thrust; changes were fractional in the
other nonmanufacturing sectors.
Nonagricultural employment in the five states
in March was nearly 6 percent over a year
ago. Manufacturing employment registered just
under a 6-percent gain, while nonmanufacturing employment was slightly over 5 percent
above March last year. Large year-to-year increases were recorded in construction, service,
and government employment.
In March the Texas industrial production index, seasonally adjusted, was at 151.6 percent
of the 1957-59 base, a level scarcely changed
from February. With a decrease in stone, clay,
and glass products being the only appreciable
change among the durable goods sectors, total
durable goods production was the same as in
the preceding month. Nondurable goods manufacturing remained virtually unchanged, with
gains for some sectors being nearly offset by
losses for others. A fairly strong month-tomonth increase occurred in the output of textile mill products, but a large decrease developed for leather and leather products.
Total industrial production in March for the
State was 6 percent above March last year.
Boosted substantially by a marked increase in
transportation equipment, the production of all
durable goods advanced 11 percent over a year

ago. The other durable goods sectors recorded
significant gains except stone, clay, and glasS
products, which showed a substantial decline
in output. With a strong output increase in
textile mill products offsetting a decrease of an
almost corresponding degree for leather and
leather products, the remaining nondurable
goods sectors rose sufficiently to lift the nondurable goods index almost 5 percent above its
year-earlier level.
Department store sales in the Eleventh District for the 4 weeks ended April 22 were 1 percent below the corresponding period a year
ago. The changing dates of Easter, however,
make meaningful comparisons for recent weeks
difficult. The 1967 period does not include any
sales for weeks prior to Easter, whereas the
1966 period includes sales for 2 weeks before
Easter. Cumulative sales thus far in 1967 were
up 3 percent from those at the same time last
year.
Registrations of new passenger automobiles
in four major market areas in Texas in Mardi
were 17 percent above February but 7 percent
lower than in March 1966. During the first
quarter of 1967, registrations in the four markets were 7 percent below the same period last
year. Cumulative registrations were 9 percent
lower in both Fort Worth and Houston, while
those in Dallas and San Antonio were down 5
percent each.
Beneficial rains were received over much of
the Eleventh District in mid-April, breaking a
long period of below-normal precipitation. Improved soil moisture has furthered the progress of planting and the growth of early-spring
crops. Based on April 1 conditions, wint~r
wheat production in the five District states }s

estimated by the U.S. Department of Agriculture to be 24 percent lower than the 1966 output and 19 percent below the 1961-65 average.
The decline is attributed to smaller crop estimates for Oklahoma and Texas.
The condition of livestock is improved, and
the rate of supplemental feeding has declined.
Range and pasture grasses are providing increasing supplies of green grazing. Calf and
lamb crop prospects are good, with a large proPOrtion of this year's calf and lamb crops already on the ground.
Prices received by Texas farmers and ranchers for all farm products during January-March
Were 9 percent below the same period a year
~o. Cash receipts from farm marketings in the
Istrict states for January-February were 28
percent less than a year earlier.
Reflecting in part the continued pressures
of monetary policy last year, the sharp rate of
~~OWth in business loans in the early part of
66 came to a halt in the late summer and
~~rly fall. Since then, commercial and indusfIal loans at the Eleventh District's weekly rePOrting commercial banks have shown little
oWth . For example, in the period from Sepmb
le er 21, 1966, to April 12, 1967, business
o~ns at these banks increased only about $11
lllJUio n
.
th
' or at an unadjusted annual rate of less
b a~ 1 percent. In the first 3~ months of 1967,
US1ness loans showed little net change.

For the Nation as a whole, however, business
1oans
ha
.
.

ve contlOued to nse, although at a much

hew
par

bank

reduced rate from the unsustainable pace of
early 1966. Both in the period from September 21, 1966, to April 12, 1967, and in the
first 3~ months of 1967, business loans at the
Nation's weekly reporting commercial banks
grew at an unadjusted annual rate of approximately 7 percent.
During the first quarter of 1967, the production of crude oil in the Eleventh District showed
mixed trends. The January output of 3,573,100
barrels per day was the highest of record; however, output in both February and March decreased almost 1 percent. Basically, the decreases in output reflected an easing of demand.
Also, crude oil allowables have been steadily
lowered in Louisiana, New Mexico, and Texas.
The allowables for these District states were
lowered again for April and for May; thus,
there will be further decreases in crude oil output. Nationally, the production of crude oil has
shown the same pattern as southwestern output,
with record-high output in January succeeded
by month-to-month declines.
In comparison with the same quarter last
year, daily average production of crude oil in
the District was 2 percent higher in the first 3
months of 1967. Output in January was 7 percent above the same month last year; however,
during February and March, this percentage
spread narrowed. Crude runs to refinery stills
showed no appreciable change between the first
quarter of 1966 and the same period this year;
on the other hand, stocks of crude oil were considerably higher than a year earlier.

The Texas State Bank, Corpus Christi, Texas, a nonmember bank located in
the territory served by the San Antonio Branch of the Federal Reserve Bank of
Dallas, was added to the Par List on its opening date, April 27, 1967. The
officers are: Rolland Wollitz, President; Joseph F. Irwin, Executive Vice
President; and George M. Dunson, Cashier.

business review/ may 1967

THE PER JACOBSSON FOUNDATION LECTURES
The Per Jacobsson Foundation has published the text of papers given in Rome on
November 9, 1966. The meeting at which
these talks were presented was the third
in a series on international monetary affairs
which has been held annually since 1964 in
honor of Per Jacobsson, the late Managing
Director of the International Monetary
Fund.

Dr. Stefano Siglienti, President of the Associazione Bancaria Italiana, and by Dr.
Donato Menichella, Honorary Governor of
the Banca d'Italia. Commentaries on the
main topic were provided by Mr. Marcus
Wallenberg, Vice-Chairman of the Board
of the Stockholms Enskilda Bank, and Dr.
Franz Aschinger, Financial and Economic
Editor of the Neue Zurcher 4eitung.

Mr. Louis Rasminsky, Governor of the
Bank of Canada, gave the principal address
on "The Role of the Central Banker
Today." Opening statements were made by

As in the past, the proceedings will be
published in English, French, and Spanish.
Requests for the free copies (indicating the
language desired) should be addressed to:

THE PER JACOBSSON FOUNDATION
INTERNATIONAL MONETARY FUND BUILDING
19TH AND H STREETS, N.W.
WASHINGTON, D.C. 20431 U.S.A.

....

STATISTICAL Sl:JPPLEMENif
to the

BUSINESS REVIEW

May 1967

FEDERAL RESERVE BANK
OF DALLAS

CONDITION STATISTICS OF WEEKLY REPORTING
COMMERCIAL BANKS

RESERVE POSITIONS OF MEMBER BANKS

Eleventh Federal Reserve Di strict

Eleventh Federal Reserve District

(Averages of dolly figures. In thousands of dolla rs )

(In thousonds of dollars)

Item

Apr. 26,
1967

Mar. 29,
1967

Apr. 27,
1966'

5,034,440
96,58 8
5,131,028

5,212,355
97, 103
5,309,458

4,987,3 15
88,129
5,075,444

Comm erci al and indu strial loans .. ............

2,536,541
92,551

2,493,903
91,Q97

2,312,84 1
59,216

loans to brokers and deal ers for

28,502
34,940

56,502
32, 173

35,002
47,836

U.S. Government securities ...... ..... .... .
Othe r securiti es .... ......... ... ... . .. . ..
loons to nonbank Anancial institutio ns:
Sal es Anance, p erson al Anance, factors,

1,020
307,603

1,091
302,265

2,702
317,856

and other budn ess cre dit compani es • ......

155,570
280,442
468,413
158,047
5,419
517,080

171,389
266,405
463,848
362,842
3,610
515'029}

155,560
287,091
449,492
112,236
7,858

Oth er loans for purchasing or carrying:

Other ..••...••••..•...••••. • .••.. • ..•.
Real estate loans ••............. . ...... ....
loans to dome stic commercial bank s...........
loans to foreign banks .......... . .....• •.. .
Consumer instalment loans •••.•.. . ....... . ...
loans to foreign governments, ofAcial
institutions, etc ...........................
Other loans 2 ••••••••••••••••••••••••••••••

' 1,287,754

549,304
2,283,620

2,199,764

1,092,275
58,476
15,115

1,123,923
72,904
15,115

1,168,468
75, 137
19,899

126,613
624,904
267,167

150,548
622,403
262,953

107,711
610,177
355,544

7,747
1,007,362

967,756

Other assets •• • ..•.... ••.. ... •.•.. .... .. .. ..

130,544
64,531
1,025,828
716,514
80,444
476,865
4,503
329,551

118,649
66,625
732,238
634,752
76,355
443, 199
4,845
329,984

855,265
516,823
73.372
470,350
4,721
332,937

TOTAL ASSETS .........................

9.970,604

9.717.348

9.440.547

.•••.. ....•..• .•.. ..

Total U.S. Governm ent securities .....•.•..•...

Treasury b11ls ••••••••.••••••••... • ..••..
Treasury certiAcates of indebtedness ........
Trea sury notes and U.S. bonds maturing :
Within 1 year .••...........•• . .......
1 year to 5 years ..• ••............ .. ..
After 5 years .........................
Obligations of states and political subdivisions:
Tax warrants and short·term notes and bills ..

All other ..... ................... ... ....
Other bond s, corporate stocks, and securities:
Participation certiAcates in Federa l
agency 10ans:Z . . . •. •. .....•.. . ... .....

All other (Including corporate stocks) •• ..••••
Cash items in process of coll ection .•............
Reserves with Federal Reserve Bonk ••••.. . ....• .
Currency and coin ... ••.... . .........••.... ..
Balances with banks in the United States. .•••••••
Balances with bonks in foreign countries ••••..•..

""'}

1,031,296

602,367
558,366
44,001
597,814
4,553
11 ,923
_7,370

644,169
492,380
15 1,789
602341
41,828
3,273
38,555

661,073
507,600
153,473
626052
35,02 1
2,987
32,034

618,857
475,909
142,948
587784
31,073
9,258
21,8 15

1,284,325
1,088,060
196, 265
1,238,118
46,207
4,302
41,905

1,277, 158
1,078,800
198,358
1,252,646
24,512
4,683
19,829

1,22 1,22 4
1,034,275
186,9 49
1,185,59 8
35,626
21,1 81
14.445

Currency and coin ... . •••.•.•
Required reserves .•....... .. ..
Excess reserves ..•...........•
Borrowings •...•..•..•...•. .. .
Free reserves •......••• •..... .

COUNTRY 8ANKS
Total reserves held .. . ...... . ..
Currency and coin ....... .. ..
Required reserves .. ..••.••.•..
Excess reserves ••.. ........•..
Borrowings •• • .•••...•...•... .
Free reserves •........... . .. . .

All MEMBER BANKS
With Federa' Res erve Bonk .. ..
Currency and coin ..•..•..•. .
Required reserves .........•...
Excess reserves ••••...........
Borrowings . .......•.....•.•..
Free reserves ..... ...•..•. . .• .

8,484,361

8,413,916

a.o69,611

5,115,002
3,468,919
276,704
145,21 1
1,121,120

5,0 19,63 1
3,375,898
312,885
131,836
1,1 00,492

4,768,186
3,316,213
293,467
92,721
960,265

3,014
21,773
78,26 1
3,369,359

3,256
21,537
73,727
3,394,285

2,881
19,601
83,038
3,301,425

1,108,661
1,569,347
658,522
10,732
20,567

1,115,808
1,593,689
652,474
10,808
19,976

1,293,542
' 1,440,95 1
544,894
3,344
15,954

800
730

1,300
1,440

Other liab11ities .............................
CAPITAL ACCOUNTS .................. . .....

431,667
181,278
873,298

271,314
173,859
858,259

383,620
168,986
818,330

TOTAL LIABILITI ES AND CAPITAL ACCOUNTS

9,970.604

9,717.348

9,440,547

CONDITION OF THE FEDERAL RESERVE BANK OF DALLAS
(In thousands of dollars)

=======================================~
Total gold certiflcate reserves • .•. .. . ..•..•..
Discounts for mem ber bonks •..•. ...•.... •.•
Other discounts and advances .... ...•••. ...
U.S. Government securities ••••• •. ..........
Total earning assots••• ... .................
Member bank reserve deposits .••...•.•.....
Federal Reserve notes in actual circulation •••••

457,070
2,805
580
1,770,17 1
1,773,556
1,03 3,685
1,245,813

426,1~:

6,9 0
2,6 1j

1,536,9~6

1,546,j 76
911,6 5
1,193,72

Eleventh Federal Reserve District
(In millions of dollars)

=================================~

Mar. 29,
Feb. 22,
Mar. 30,
Item
_______________________________
1 ~96~7______1~9~67~____~
1~
ASSETS

loons and discountsl • . . . . . . . . . . . . . . . . • •.
U.S. Government obligations ••.......•....
Other securities l , ••• ••.•••••. . . . . • . . . .••
Reserves with Federal Reserve Bank ••• •. ..•

Cosh In vault ••.• ••••••••••••••••••••••
Balances with banks in th e United States . .. •
Balances with bonks in foreign countries e ....
Cash items in process of collection . •.... . .•
Other assets e • ••.........• •• ... .•. . ••..

833
512

8,692
2,300
2,293
1,110
217
1, 127
6
923
503
17,17 1

LIABILITIES AND CAPITAL ACCOUNTS
Demand d e posits of banks •.••. . ..•...•. .

1,355
7,644
6,296

1,334
7,552
6,183

15,295
278
237
1,480

15,069
389
242
1,471

TOTAL LIABILITIES AND CAPITAL
ACCOUNTSe........... . ..........

17,290

17,171

Other demand deposits ...... . ....... . .. .
Time d e posits ••.......•.•..... .• . .....•

Total deposits ••••••.• •••• •• • •• • •••••
Borrowings ..•... . .. . ..•.•....... .. ... .

Other liab11itles e .................... . ..

Because of format and coverage rev ision s as of July 6, 1966, earlier data are not

2 Certificates of participation in Federal ag e ncy loans include Commodity Credit
Corporation certificates of interes t previously included in "Agricultural loans" and
Export-Import Bank participations prev iou sly included in " Oth er loans."
:1 Amount includes deposits accumulated for payment of instalm ent loan s· as a result
of a change in Federal Rese rve regulation s, effective June 9, 1966, such 'deposits are
no longer reported.

8,939
2,353
2,30 1
1,034
227
1,084

TOTAL ASSETse ................... ..

fully comparabl0.

394,896
2,089
1,450
1,880,934
1,884,473
1,094,84 4
1,249,134

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

Total capital accounts e • .. ... .... .•. '"
1

.-/

CONDITION STATISTICS OF ALL MEMBER BANKS

Total demand deposits ••••• ••••...• • •.•..••

Bills payable, rediscounts, and other
liabilities for borrowed money ...............

616,085
57 1,200
44,885
626,594
-10,509
1,696
-12,205

Apr. 26,
Mar. 29,
Apr. 27,
______________
It_em
________________~
19~6~7______1~9~6~7______1~9~

Total deposits ..............................

Individuals, partnerships, and corporations:
Savings deposits ••...•.•.... . .... ... ..
Other time deposits ... . .. , .•... , •....•.
States and political subdivi sions ... •..••... .
U.S. Government (including postal savings) •..
Bonks in the United States••••. ... . ..... . ..
Foreign:
Governments, ofAcial in stitutions, etc ... ...•
Commercial bonks •......•.............

640,156
595,680
44,476
635,777
4,379
1,029
3,350

RESERVE CITY BANKS

llA81l1T1 ES

Individuals, partnerships, and corporotions ••.•
States and political subdivisions ............
U.S. Government .. ..... . ............. . ..
Bonks in the United States ...... ... ........
Foreign:
Governments, ofAcial institutions, etc .......
Commercial bonks•......•... ••... .....
Certified and ofAcers ' checks, etc ...........
Total time and savings deposits ..........•.. .

Apr . 6,1~

Total reserves held ..•.. .......

544,900
2,302,459

Total investments ...•. '"

Mar. 1, 1967

With Federal Reserve Bonk ....

purcha sing or carrying :

U.S. Government securities ............ .. ..
Other securities ......................•..

4 weeks ended

With Federa l Reserve 8ank .. ..

Net loans and discounts .... . .. .. ...... .... . ...
Valuation reserves ... . .......................
Gross loans and discounts ....... . . . ...........

5 we eks ended

5 weeks ended
Apr. 5, 1967

Total reserves held ........ . ...

ASSETS

Agricultural 100ns2•.•.•.•••.. •. .... . . • ••••.

Item

85 43
2'386
2'05 3
'973
21 0

1,02~

821
42 1

~
1 28 1
7'482
5:7 83

1 45 46
'26 1
22 6
1,406

~~~~~~~~~~~~~~~~~---~
Beginning June 15 , 1966, Commodity Cred it Corporation cer ti ficates of interest t~:~
1

~.~~~~;I::dor~is~~~~ts~,~rtic1pations
e-

Estimated.

ore Included

"Other se curities,"

rather

BANK DEBITS, END-Of-MONTH DEPOS ITS, AND DEPOS IT TURNOVER
(Dollar amounts in thou sands , seasona ll y adiu sted)

~~~~~~~~~~~~~~~~~~~========================================~===============================================
DEBITS TO DEMAN D DEPOSIT ACCOUNTS'
DEMAND DEPOSITS'
Percent change

Annual rate

March
1967

Standard metropolitan
statistica l ar ea

... RIZON .... Tu
lOUISIAN·A. ~on ............. . ... • . .. .. ............
.

February

basis)

1967

: : :::: :::::::: :::: ::: :::: :::::::

4,056,984
1,998,492
5,683,776
606,300
1,933,668
4,286,544
4,578,420
5,274,324
1,333,776
3,827,808
368,064
67,126,176
5,248,080
14,708,964
2, 111 ,220
66,590,772
625,476
3,5 14,872
1,240,080
1,544,148
1,179,228
931,896
11 ,852,208
1,185,948
1,526,124
2,063,808
1,789,212

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

$217,186,368

onroe •••.••..••.•. . ••..•.....••..•.. .

:~~i~~I~':':':':::: :: : ::: : :: :::: : ::::::: ::::::::
Beaumont- Port Arthur ••••.•••.. .... •..••.. . •••
Crownsvill e-Harlingen_5an Benito ......... . . . ....

~;~~T/L.·ii·:iL.
Ha veston -Tex as City .................... .. . ..

~~}~~~~) :::::;::::::::::::::::::::::::::::
harr·Edonburg .. .. . ....... . .. ..... .. . .

f~d~·go~i~~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~: : ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~

---

::::

Tejarkano (Texas-Arkansas ) .................•..

~~i?t~: ~~il;

TOl ol_27 centers

of turnover

3 months,

(Annua l- rate

NEW
Shrev. port ......... ............. .... .. ..
TEX MEXICO, Rosw.II ' .•.................. . ........
... S, Abilen.

Midi

March 1967 from

-6
-5
-6
-3
0
-9
4
-6
3
-2
5
0
3
I
-7
6
7
8
-2
5
0
-4
1
-8
-2
0
- 13

March
1966

1967 from
1966

March 31,
1967

March
1967

February

1967

March
1966

8
3
12
-4
4
-I
8
8
-3
7
7
9
7
9
12
9
-8
12
-2
-7
4
3
21
0
4
-9

167,995
7 1,040
220,167
33,4 19
95,49 1
142,952
186,638
217,112
59,316
178,135
28,870
1,694,070
204,962
500,443
89,110
1,940,391
33,564
136,421
72,122
119,234
64,823
55,389
508,190
57,563
80,905
112,448
110,3 13

24.5
28.0
26.4
18.2
20.3
30.8
24.4
24.0
22.2
21.2
12.8
39.7
25.1
29.3
23.1
34.2
18.8
25.3
17.1
12.9
17.8
16.7
23.2
20.6
18.6
18.7
15.9

26.7
27.8
27.4
19.0
20.5
34.5
23.6
25.1
21.2
21.8
12.3
40.1
24.1
28.9
23.4
32.6
17.8
23 .5
17.4
12.6
17.7
16.9
23.3
22.2
19.2
19.3
18.3

24.0
25.2
26.2
18.8
20.9
31.7
22.6
24.7
22.9
20.3
11.2
38.1
24.8
27.9
22.4
30.0
19.2
23.4
16.0
13.8
21.9
16.5
23.7
19.5
18.9
19.8
19.0

$7,181,083

30.2

30.0

28.5

4
9
-5
- 1
-2
8
4
I
6
10
9
7
7
9
14
II

0
7
-2
-20
1
0
13
- 1
- 1
-18

Deposit Sb 0f'
2 CO
i Individua ls, partnerships, and corporatio ns and of states an d po I"I tlca I su bd'"
IVISIon s.

lJnty

NOTE

. -

as s.

Figures for 1966 have be en revis ed due to the use of new seasona l adjustmen t factors .

GROSS DEMAND AN D TIME DEPOSITS Of MEMB ER BA NKS
Eleventh Federa l Reserve District

BUILDING PERMITS

GROSS DEMAND DEPOSITS

TIME DEPOSITS

Reserve

Coun try

Rese rv e

city banks

ba nks

Tota l

city banks

VALUATION (Dollar amounts in thousands)
Country
banks

Percent change

-------=------------------ -

19 65, Marc
1966
h. .. . .
I

~arCh.... .

Nctober...
DoV.mb. r..
1967 eC.mb. r..
: January
F.bruarY··
March '"
----.:..:.: "

8,278
8,788
8,847
8,914
9,098
9,352
8,902
8,951

4,049
4,047
4,064
4,061
4,202
4,226
4,020
4,106

4,229
4,74 1
4,783
4,853
4,896
5,126
4,882
4,845

4,894
5,674
5,726
5,751
5,78 1
5,934
6,091
6,183

2,462
2,688
2,595
2,581
2,575
2,645
2,721
2,738

2,432
2,986
3,13 1
3,170
3,206
3,2 89
3,370
3,445

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

NUMBER
March
1967

3 mos.
1967

618

1,573

79
372

212
864

56
158
394
155
72
437
2,060
460
705
107
2,649
37
162
105
128
92
79
1,307
61
319
95

Total-24 citi.s •• 10,707

Ar.a

1967,

Indicoted

Average

April 1
1966
196 1-65
Atilono
- - - - -- - -- . : . - - - - - - - - - - - - - - - - ~.isian~ . . • . . . . . . . . . . . . . . . .
2,296
920
1,214
1,172
M.;i~~""""""""
2,414
1,540
4,752
97,372
... :·::::::::::::::::
63,065
otol
60,423

ott
T·~l~~~~a

6tm

~i:,m

~. . ...... . . . . .
135,289
178,516
167,575
SOURCE , U.S~~~---------------------------
. . Departm . nt of Agric ul ture.

3 months,

F.b.
1967

Mar.
1966

6,505

239

1,095
3,656

5,671
5,879

-63
193

-47
69

7
6

168
420
1,100
388
172
1,037
5,417
1,335
1,793
28 1
5,8 19
92
410
233
278
204
228
3,360
128
656
218

991
1,812
21,824
1,597
205
1,776
18,958
4,186
5,598
363
45,9 14
128
2,641
786
538
294
564
9,918
833
1.520
1,065

5,019
4,27 1
39,269
4,049
603
7,05 1
47,58 1
14,280
19,5 11
1,457
91,35 1
1,104
5,280
2,399
1,572
1,237
1,574
30,815
1,292
2,571
2, 11 4

-61
75
77
-14
42
-38
34
23
-36
-27
62
-66
85
-21

-36
-16
200
-17
-62
-4 1
52
-39
41
-33
41
- 14
-38
-38
o -62
-6 -66
17 -28
-33 -47
184
20
193
32
66
60

91
-6
70
17
-4 1
-31
-22
- 17
98
-9

26,386

$130,073

$302,455

3 mos.

1967

1967 from
1966

ARIZONA
Tucson . . . •••••
Monroe-West
Monroe •.•••

Amarillo •• .•. .
Austin .. . .... .
Beaumont . ... .

~~~~~~~~(I=n=t~h~o=u=sa=n=d~s=o=f=b=u=sh=e=I=S}=======================

from

March
1967

3,8 11

LOUISIANA
Shr.v.port • .. •
TEXAS
Abi l.n ... .. .. .

WINTER WHEAT PR ODUCTION

March 1967

Brownsvlll ••..•
Corpus Christl ..
Dallas .. ..... .
EI Paso •.•. . • .
Fort Worth ••..
Galveston . .••.
Houston •...•.

Laredo .. . .•.•
Lubbock •..•..
Midland . .... .
Odessa .•••• . .

Part Arthur ....
San Ang.lo .••
Son Antonio •. .
Texarkana ....
Waco .•. . ....

Wichita Falls ••

99
-72
-68
-58

-2

1
-1
14
-27
-20

-4