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business
•
review

may 1970

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

The changing banking structure

3

The 1970's: Decade for plastics
Part 2: Vinyls . . . .. .. . . . .... . .. . . . ....... 12
District highlights .... . ........... .. ..... .. . 16

The structure of the American banking system is one of the world's most complex. There
are almost 14,000 commercial banks in the
United States - a tremendous number compared with most countries. The United Kingdom, for example, has less than 30 banks, and
five of them dominate British banking. Canada
has only nine chartered banks to serve its farflung population.
The difference is due mainly to the reliance
Other countries place on very large branch systems. Americans still depend heavily on a large
number of unit banks and small branch banks.
Most American banks - almost 10,000 of
them - are single-office institutions with no
branches. And those that operate branches have
an average of only five each.
Thus, American banks are typically small.
About 85 percent of them hold deposits of less
~han $25 million, and more than 60 percent
old deposits of less than $10 million. But the
nation's banks are far from homogenous, since
they also include some of the world's largest.
And these giants control a major proportion
~f the country's banking resources. The 100
argest banks hold close to half of the nation's
~Ommercial bank deposits. The ten largest
anks hold nearly a fourth of the deposits.
And so, while the system is dominated by
many small banks, there is also a heavy concentration of market power in the hands of
Only a few banks. This appears true not only
~t the national level but also at many local
eVels. A recent study shows, for example, that
~~mmunities outside metropolitan areas conam, On the average, less than one bank apiece.
The structure has been shifting lately, how-

~er, continuing trends evident before World
ar II but, in some cases, at a much faster

rate. Changes since the war, in fact, have been
so fast and so pervasive that many count them
as a near-revolution striking at the very character of the American banking system. The
restructuring has been essentially a consolidation of bank resources into fewer but larger
bank organizations offering an ever-widening
range of services.
This movement toward consolidation has
been evident both in the nation as a whole and
in the five states of the Eleventh Federal Reserve District: Arizona, Louisiana, New Mexico, Oklahoma, and Texas. While changes in
these southwestern states have not been as
rapid as those in the nation, they have been in
the same general direction. And the changes
have been fast enough, not only in the nation
but also in the Southwest, to suggest a developing trend that could lead to a banking system
far different from the traditional American
system made up primarily of small unit banks.
This article examines these changes and the
forces behind them, first in the nation and then
in the Southwest.

A. consolidating trend
Unit banks were clearly dominant in the
United States at the end of the war. Totaling
more than 13,000 at the end of 1945, they outnumbered branch-banking offices (including
their head offices) more than two to one. But
by the end of 1968, more than 3,000 unit
banks had disappeared, most of them caught up
in the massive postwar merger movement.
Meanwhile, branch-banking offices increased
nearly fourfo ld, expanding to a point where
they accounted for almost 70 percent of the
nation's nearly 33,000 banking offices. Where
branch-banking offices totaled about 5,000 in
late 1945, the number had climbed to nearly

business review/ may 1970

3

23,000 by late 1968. About four-fifths of this
increase resulted from the creation of new
offices. The rest resulted from mergers.
Moreover, in states that limit or prohibit
branch banking, holding companies and chainbank organizations continued to grow rapidly,
bringing together many small banks through a
variety of formal and informal arrangements
and further reducing the number of independent
banking units. Multibank holding companies
registered with the Board of Governors of the
Federal Reserve System in late 1968, for
example, controlled 629 banks and 2,262
branches holding over 13 percent of the deposits at insured banks. Tllis represented over
a 50-percent increase in the number of banks
and more than a 75-percent gain in the share
of deposits controlled by registered bank holding companies since 1957.
On balance, the number of banks gradually
declined, slipping (despite a brief increase in
1963-65) from 14,142 at the end of 1945 to
The nation - more banking offices come
with continued shift to branches
and slow decline in number of unit banks
35.000 . - - - - - - - - - - - - - - - - - ,

25 .000

15 .000

BANKS WITH BRANCHES

F:::::::::=~~
UNIT BANKS

5.000
1945

1950

1955

1960

SOURCES : Board of Governors. Fed oral R eserve Sy s tem.

Fedoral De posit Insurance Corporation .

1965

13,678 at the end of 1968. This slow downward drift in bank numbers was more than
accounted for by the absorption of over 3,100
banks in mergers. More than 90 percent of
these absorptions were in states allowing
branch banking. An increase in new banks partially offset the decline due to mergers, however, holding the decline in number of banks
to about 3 percent.
Most of the decline was in states allowing
limited branching. The number of banks in
unit-banking states increased. With the broadbased growth of the economy and even this
slight decline in number of banks, average bank
size rose sharply. In fact, deposits per bank
nearly tripled between 1945 and 1968.

Economic developments
Several factors were behind these changes,
but probably most important were the growing
demands for bank services and the rising costs
of bank operations. The rapid growth of income
and population after the war sharply increased
the need for additional banking facilities , particularly in suburbs, where the demand for
checking accounts and consumer loans mushroomed. Many large city banks followed their
customers into the suburbs either by opening
new branches or, where the Jaw allowed, bY
merging with existing institutions. The growth
of large-scale industrial and commercial enterprises, much of it also into suburban areas,
further increased the demand for services that
could often be provided only by large bankS
with high lending limits, relatively stable deposit structures, and efficient asset management.
As operating costs rose after the war, many
banks came under pressure to expand and seek
new sources of revenue. With interest-bearing
time deposits growing rapidly and the need to
automate increasing, many banks shifted froJll
their traditional position as business lenders to
a more aggressive brand of retail banking. NeVI
techniques for attracting deposits and increased

activity in mortgages and consumer loans
tnarked banking operations, accelerating the
growth not only of large branch systems but
also of elaborate group-banking arrangements.

Regulatory changes
The banking structure was also influenced
by changes in its legal environment. Under the
dUal banking system unique to this country, it
has been left to the states to decide whether
they will permit branch and holding company
activity. Since the war, a few states have
Changed their positions on branching. New
York, Virginia, Kentucky, New Hampshire,
and New Jersey, for example, have liberalized
their branching laws. Michigan, on the other
hand, has switched from statewide to limited
branch banking.
Most states have taken no statutory stand
on bank holding company activity. Some, however, including Oklahoma and Louisiana, have
tnoved to restrict or prohibit the formation of
~ew holding companies. Others, such as New
. ersey, have increased the potential for holdIng companies by changing their laws to allow
StateWide expansion.
Changes in Federal banking laws also inJlue.nced the shift in the banking structure, some~tnes dampening the rate of change by slow~g merger and holding company activities. In
.e early years after the war, bank mergers were
~:1I regulated primarily by state laws - a fact
at Contributed to the rapid increase in merg~rs, particularly in the midfifties. But with the
thank Merger Act of 1960, Congress required
tI at aU mergers involving mSUl"ed banks have
le prior approval of their principal Federal
~~perVisory agency - that is, the Comptroller
1<' the Currency, the Board of Governors of the
I ederal Reserve System, or the Federal Deposit
t~Surance Corporation. The act also enunciated
. e factors regulatory agencies were to consider
:~ a?proving a merger, only one of which was
e itnpact of the merger on competition.

It was widely thought at the time that as part
of a regulated industry, banks were exempt
from antitrust laws. This belief was dispelled
in 1963, however, when the. cou.fts began holding that competition, defined ' by the existing
market structure, was the controlling factor in
determining the legality of a bank merger. A
1966 amendment to the Bank Merger Act provides for the approval of a merger if its anticompetitive effects are clearly outweighed by a
probable improvement in convenience to the
community served. The courts, however, continued to emphasize the competitive aspects of
a proposed bank merger.
More restrictive legislation was also applied
to regulate holding company activity. Until
1956, holding companies were required to
register with the Federal Reserve only if they
controlled as much as half the stock of a single
bank and wanted to vote the stock. This requirement, dating from the 1930's, did little,
however, to restrain or regulate the postwar
expansion of holding companies. The result
was the Bank Holding Company Act of 1956 .
Under this act, as amended in 1966, a holding company that controls either as much as a
fourth of the voting stock of two or more banks
or the election of a majority of the directors of
two or more banks must secure the approval
of the Board of Governors of the Federal Reserve System and register with it. Having become a "registered" bank holding company, it
must divest itself of control of corporations with
interests not related to banking, submit to
Federal Reserve regulation and examination,
and have Federal Reserve approval before acquiring more than 5 percent of the stock in
another bank.
Significantly, a holding company controlling
only one bank does not come under this law.
This exemption, coupled with the increase in
banks wanting to diversify into new product
and geographic markets, has brought a sharp
increase in one-bank holding companies in re-

business review/may 1970

5

'"

~

-

-

-

_

TOTAL Oil WELLS DRILLED

~

_

t-L. - -'

DAilY AVERAGE PRODUCTION OF CRUDE Oil
(In Ihousands of barrels)

Percent
Third

Second

quarter

quarte r

Pe rcent

1969

1969

change

Area

change

1969

from 1968

============================~
Percent chang e fr~

cumulativo cumulative
February

FOUR!
STATI
Louisi
O fl
On
New
Oklal
Texo !
Ofl
On
UNITED
SOUl

cent years. As a result, Congress has recently
taken renewed interest in the spread of bank
holding companies.

Differences in the Southwest . ..

Tn
Totol no
wag e

Manu
Nonm

Min
COl

Tro
I

Tro
Fine
Ser
Go

r
1

Ari;

p-

r-I
SOUl

States of tlle Eleventh District shared in most
of the major postwar changes in American
banking. Between late 1945 and late 1968,
branch-banking offices increased even faster in
Arizona, Louisiana, and New Mexico than in
the nation as a whole. And while mergers were
less prevalent in these southwestern states than
in the nation, they were nevertheless important
to changes in some areas, especially Arizona.
Holding companies increased their share of the
region's banking offices and deposits, although
they were still less important in tlle Southwest
than in the nation. Stock and loan links between small banks and large metropolitan banks
became more impoltant in Texas and Oklahoma, both unit-banking states.
There were important differences, however,
resulting mainly from the unique characteristics
of banking in the Southwest. The biggest difference was in changes in numbers of banks.
Where the number of banks in the nation fell
slightly, the number in the Southwest rose more
than 400, or almost as many as the nation lost.
The gain was about equally divided between
new unit banks and new banks operating
branches. But the number of branches and related facilities also rose rapidly, increasing
more than 700, or almost sixfold, compared
with a fourfold increase for the nation. Following the pattern set for the nation, well over half
the new banks and branches appeared in metropolitan areas, scenes of the greatest gains in
personal income and population.
The increase was particularly rapid in the
1960's, with far more banks and branches
being established in those years than in the 15
years before. From 1945 through 1959, the
number of banks increased 174, while from
1960 through 1968, they increased 254. Siln-

6

January

February

January

FebruarY !

ilarly, from 1945 through 1959, the number
of branches and related facilities rose 282,
while from 1960 through 1968, they spurted
upward 431.
The Southwest - more banking offices
come with increase in branches
but unit banks also increase
2.750

2 ,250

1,750

UNIT BANKS
1,250
1945

1950

1955

1960

1965

SOURCES : Board of Governors . F odoral R e serve Sy stem .
Federal De po s it In surance Corporation .

Although the number of banks increased, de'
posits per bank increased even faster. In 19 45,
there were 1,452 banks in the five southwest'
ern states, holding total deposits of $9. 7 billio~'
or $6. 7 million per bank. By the end of 1968
,
there were 1,880 banks, but they held depositS
of $38 .1 billion, or $20.3 million per bank. ~l
course, the median-sized bank in the regioJl l~
1968 was still much smaller than these figureS
might ilnply. In fact, well over half of the re'
gion's banks still hold less than $1 0 mi1lio~
each in total deposits.
'II

Despite these changes, unit banks were sl!
dominant in the Southwest in 1968 prirn arilj
because of the large number of banks in Tet PS
and Oklahoma. Togeilier, the more than 1,6~
unit banks in the five states at the end of 196

aCCOunted for about 85 percent of the region's
banks and 60 percent of its banking offices. By
Contrast, unit banks represented only about 30
percent of the nation's banking offices.
After two decades of almost continuous
growth, however, the number of unit banks in
the Southwest began falling after 1965, slipping
from 1,637 to 1,604 by the end of 1968. All
five Southwestern states reported slight declines
between 1965 and 1968.
While trends in the Southwest were generally
upward, there were marked differences in the
gains states made, due to many factors but pri~arily to differences in state branching laws.
U three main types of branching law are rep~·.es~nted in the Southwest: statewide branching,
united branching, and unit banking.

Texas and Oklahoma prohibit branching, except on military bases. Limited-service facilities
can be operated on military bases in both
S~~tes, although courts have held that in Texas
~ 1S form of branching applies only to national
auks and not state banks.
f The other three southwestern states allow
uU-service branching, but with marked differ-

ences. Louisiana allows practically unlimited
branching in the parish where the bank's head
office is located but only one branch in other
parishes. Even there, a branch can be opened
only if no state bank, savings bank, or trust
company already operates in the parish. Arizona, on the other hand, allows branching
without any significant limitations on location,
provided public need for additional banking
facilities can be demonstrated. New Mexico
limits branching to the county where a bank's
head office is located, an adjoining county, and
a radius of 100 miles from the head office, with
the further provision that no branch can be
established in another county where some other
bank has already established its head office.

... and within the Southwest
Nearly two-thirds of the new postwar banks
established in southwestern states opened in
Texas. By late 1968, a total of 355 new banks
had been started in the state, with more than
half of them in metropolitan counties. Meanwhile, 58 banks had been eliminated by mergerS and 11 had undergone voluntary liquidation. The net effect was 286 new banks in
Texas, a one-third increase over 1945.

CHANGES IN NUMBER OF COMMERC IAL BANKS AND BRANCHES
IN THE SOUTHWEST AND UNITED STATES

-----------------------------------~~----------------~~--~~~
Tota l
New
United

---

Texas

Southwest

States

865
355
58

1,452
545
101

14,142
2,886
3,145

11

1,151
286

16
1,880
428

205
13,678
-464

4
55

20
43

126
733

3,954
13,068

14

5

25

83

3,160

9
114
107
129

9
55
51
93

25
63
43
329

103
839
713
1,141

1,169
19,013
15,059
14,595

Item

Arizona

Lou isiana

Mexico

Oklahoma

Tota l number, end of 1945 ... . ..
N
Mew banks ........ . ... .
ergers and absorptions ..
VOluntary liquidations
To and suspensions .....
ta l number, end of 1968 .
B
Net change . ......
r~nches and facilities
o~a l nUmber, end of 1945 . . ...
C ew branches ... . .... . ....
onversions, new facilities
and replacements . . . '
Br~!1ches and facilities
T
IScontinu ed
otal nUmber, end '~f' i968 .

13
17
15

151
82
4

41
27
5

382
64
19

2
13
0

0
229
78

0
63
22

3
424
42

34
259

61
274

7
102

21

18

Banks

"dd' .
Net change .......
Ibo na
'
.
_____l b anl<lng offices ...

SOUR

36
278
244
244

24
329
268
346

CES; Board of Governors of the Federa l Reserve System .
Federal Deposit Insurance Corporation.

business review/ may 1970

7

Despite the many small banks in Texas, the
postwar merger movement had little impact on
Texas banking. In fact, even though one out of
every 12 commercial banks in the nation is in
Texas, the state accounted for less than 2 percent of the nation's postwar bank mergers. But
since the merger of two banks operating under
unit-banking laws ordina rily means one must
close, the infrequency of bank mergers in Texas
was jn line with developments jn other states
prohibiting branching. Taken as a whole, unitbanking states accounted for less than 10 percent of the nation's postwar bank mergers.
Although Texas prohibits full-service branching, FDIC was able to count 43 new branch
facilities opened in the state between 1945 and
1968. This was because of exceptions in the
use of limited-service facilities in Texas. In
addition to branch facilities on milita ry bases,
Texas banks can operate drive-in facilities,
provided the facilities are within 500 feet of the
bank building and connected to it - a requirement sometimes met merely by the use of a
pneumatic tube.
Branch offices increased rapidly in the states
that allow fuU-service branching - Arizona,
Louisiana, and New Mexico. As in the case of
new banks, most of the branching was in metropolitan areas. Of the 713 additional branches in
the Southwest, 268 were in Louisiana. That
represented an increase from 61 branch offices
operated by 31 banks in 1945 to 329 branches
operated by 114 banks in 1968. By contrast,
Arizona, which had only five branch banks in
1945 , still had only seven in 1968. But these
banks operated 278 branches, compared with
34 in 1945. Since Arizona had far fewer branch
banks than Louisiana, they were obviously
much more active in branching. The average
branch bank in Arizona had nearly 40 branches
at the end of 1968, compared with only about
three per bank in Louisiana.
Developments in Arizon a were marked by
sharp contrasts between formations of new

8

banks and the establishment of additional
branches. While 17 new banks were formed
during those years, 17 were also dissolved (15
through mergers and two through voluntary
liquidations) , with the net effect that the number of banks was left unchanged. This meant
th at Arizona's net gain of over 240 banking
offices was accounted for by new branches.
Although branching spread rapidly in LoUisiana, the restrictions on branching in that
state apparently also contributed to the formation of new banks. Despite the strong tendency
in branching states for the potential growth of
existing banks to restrain the formation of neW
ones, Louisiana had the second largest number of new banks - more than 80 - of any of
these five states. The restrictions on branching
in Louisiana also seem to have had a strong
dampening effect on mergers. There were only
four me rgers in that state between ] 945 and
] 968, and three of them were in ] 954-55 .
Compared with the other three states, NeW
Mexico and Oklahoma registered the smallest
gains in new banking offices. As with the other
states, this was closely related to their economic development. Together, these two stateS
accounted for a little more than 12 percent of
the population increase in aU five states and
] 7 percent of the gain in personal income.
From 1945 through 1968, 27 new bankS
were established in New Mexico and five bankS
were eliminated through merger. The state
gained 129 new banking offices, due primarilY
to the establishment of 102 de novo brancheS.
There were no voluntary liquidations in NeW
Mexico, but nine branches and related facilitieS
were closed .
In Oklahoma, where full-service branching
is prohibited, new banks were formed more
than twice as fast as in New Mexico. The fe
were 64 new banks started in Oklahoma durin g those years, but 19 banks were absorbed
through merger and three were liquidated.

GROUP BANKING IN THE SOUTHWEST AND UNITED STATES
Registered
bank holding
companies
Area
Arizona

Loui sia n ~

... .. . . . ..

New M exic~ ' : : : : : : :
Oklahoma ...... ..
texas . . .. , ... . .. .
Southwest
United States .

1968
1
0
1
0
3
5
80

1957
1
0
1
1
3
6
50

Branches
of
affiliated
banks

Affiliated
banks

Deposits of
affiliates
as percent of
all deposits

1968

1957

1968

1957

1968

1957

2

2

99

52

35.3

40.9

34.2

38.2

5

5
1
8
16
417

21

8

14.9

14.3

2
122
2,262

60
851

1.3
5.2
8 .9

15.1
.3
.8
3.9
5.9

13.5
.1
3.0
4 .3
7.5

1968

13
20
629

1957

Offices of
affiliates
as ftercent of
a I offices

5.0
6.1
13.2

---~~------------------------------------------------------------------------SO URCES: Board of Governors of the Federal Reserve System.
Federa l Deposit Insurance Corporation.
Federal Reserve Bank of Dall as.

. Oklahoma's restrictions against branch bankLng are simil ar to those in Texas. Limitedservice facilities can be established on military
bases, although, unlike Texas, it does not matter Whether the banks are state or nationally
chartered. Also, a bank can operate detached
drive-in and walk-up faci lities within 1,000 feet
of its bUilding. These special facilities increased
51 in Oklahoma during the postwar years,
bringing the total change in bank offices in
that state to 93 .

Spread o f group banking
Banking offices can also be linked together
ir?U gh common ownership of separate banks.
. hIS system of multiple-unit banking, as dis~nct from the multiple-office operations of
ranch systems, can take the form of either
Chain-banking or group-banking arrangements.
eh .
aLn banking usually means the control of
~~re than one bank by an individual or in.olInal group. While the relationship is velY
tnfonnal, making the extent of the increase in
Chain operations hard to gauge, there is ap~arentIy substantial chain banking in the
OUthwest, particularly in Texas.
In group banking, a holding company owns

~r Controls the voting shares of at least two

.auks. Since a holding company controlling
either as much as a fourth of the voting shares
of two or more banks or the election of a

majority of the directors of two or more banks
must register with the Board of Governors,
holding company activity can be measured
more easily than activities of chain banks.
Registered bank holding companies have
been an important factor in southwestern banking, but they have by no means been a dominant factor. There were five registered bank
holding companies in the five states at the end
of 1968. Together, they controlled 20 banks
and 122 branches, or about 5 percent of the
banking offices. These 20 banks held total deposits of $2.3 billion at year-end 1968, or
slightly more than 6 percent of the deposits in
all five states .
There was actually one less holding company registered in 1968 tllan in 1957, although
there were four more banks under holding
company control. The number of branches
controlled by holding companies more than
doubled between 1957 and 1968, increasing
from 60 to 122. While total deposits at banks
affi liated with holding companies increased substa ntially after 1957, the rate of increase was
not significantly greater than for all commercial
banks in the Southwest.
The importance of holding companies varies
state to state. In Arizona at the end of 1968,
one registered bank holding company controlled more than a third of the banking offices

busin.ess review/ may 1970

9

and more than a third of the deposits. The same
company was also active in New Mexico, controlling nearly 15 percent of the banking offices
and deposits in that state. A second bank holding company has since been registered in New
Mexico and now controls four banks in that
state and about 3 percent of the deposits. There
were three registered companies in Texas in
1968, controlling about 1 percent of the banking offices and 5 percent of the deposits. There
were no holding companies operating in Louisiana or Oklahoma in 1968, and both states
now prohibit the fOlmation of new bank holding companies.

Impact on bank services
The increase in banks and branches improved the availability of banking services in
the Southwest, even after an increase of 60
percent in the population of these five states.
The ratio of population to bank offices shows
that offices in the Southwest served an average
of 7,300 people in 1968, compared with 7,900
in 1945. By contrast, the national average in
1968 was 6,100 people per bank.
The most marked improvement in availability was made in branch-banking states. Population per office was cut almost in half in Arizona and New Mexico. Where the ratio was
12,800 in Arizona in 1945 and 11,200 in New
Mexico, it had fallen to about 5,700 in both
states by 1968. Louisiana also showed a significant improvement, from 11,500 in 1945 to
6,700 in 1968. By contrast, availability changed
little in Oklahoma, remaining at about 5,300,
and dropped in Texas from 7,700 people per
bank in 1945 to 9,000 in 1968.
Although the size of the average southwestern bank increased considerably, there was little
change in the concentration of deposits. Small
banks grew generally apace with larger banks,
with the result that their relative positions
changed little. Where the three largest banks in
these five states held 10.5 percent of the de-

10

posits at the end of 1945, they still held only
11.4 percent at the end of 1968.
There were wide differences, however, in the
share of deposits held by the three largest
banks in each state. As expected from this
measure of concentration, deposits were more
concentrated in branch-banking states than in
unit-banking states. But the concentration
seemed to have eased in branch-banking states
and, even more unexpectedly, the only increase
in concentration was in Texas, one of the
nation's leading unit-banking states.
Concentration was most pronounced in
Arizona, the southwestern state with the fewest
restrictions on branching. There, the three
largest banks held 82.9 percent of the deposits
in that state in 1968. This was actually a slight
decljne in deposit concentration, however. In
1945, the three largest Arizona banks had held
84.4 percent of the state's deposits.
The three largest bar-tics in New Mexico held
35.5 percent of that state's total deposits in
1968, compared with 38.4 percent in 1945.
But in Louisiana, where the three largest banks
had held almost 38 percent of the deposits in
1945, their share slipped to about 23 percent
in 1968. At that level, concentration in Louisiana was less than in Oklahoma, a unitbanking state.
The share held by the three largest banks in
Oklahoma also dropped, from 32.0 percent in
1945 to 25.5 percent in 1968. Only in Texas,
where concentration was least, did the share
of deposits held by the three largest banks increase. Even there, the increase was only from
14.5 percent in 1945 to 17.4 percent in 1968.

Outlook for the Southwest
Although changes in bank structure have
varied from state to state, reflecting underlying
economic forces and differences in state banking laws, there is some evidence of a national
drift toward consolidation of the banking sys-

tern into fewer but larger bank organizations
Offering a wider variety of services. While this
trend has not been as obvious in the SouthWest as in the nation as a whole - the SouthWest, in fact, gained in numbers of banks
during the postwar period while the nation lost
banks - the growth of banks in the region has
slowed markedly in the last few years and the

number of unit banks has declined. These
emerging developments, together with tbe rapid
growth of branches and spread of groupbanking activities, suggest that the five states
of the Eleventh District may also be entering
a period of consolidation.
PETER S. ROSE
VIRGIL L. THOMAS

ELEVENTH FEDERAL RESERVE DISTRICT

OKLAHOMA

DALLAS HEAD OFF I CE TERR I TORY
HOUSTON BRANCH TERRITORY
SAN ANTONIO BRANCH TERRITORY
EL PASO BRANCH TERRITORY

business review/may 1970

11

The

1970~s:

Decade for plastics

Part 2: Vinyls
Plastics, after rapid and sometimes chaotic
growth in the 1960's, is emerging as one of
the nation's most important industries. By all
indications, the 1970's will be a pivotal decade
in the development of this rapidly expanding
industry. As plastics continues its dramatic inroads into markets formerly dominated by steel,
aluminum, lumber, glass, and paper, production
is expected to more than double by 1980.
With most of its raw materials coming from
petroleum and most of its production facilities
on the Gulf Coast of Texas and Louisiana, the
plastics industry is a matter of continuing imProduction of plastics expected
to more than double over next ten years
BILLIONS OF POUNDS

40

t-

0

ACTUAL

m

PROJECTED

portance to the economy of the Southwest. Last
month, the Business Review focused an article
on polyethylene - the most widely used plastic. This month, attention shifts to vinylsthe second most important family of plastics.
Next month, styrenes will be examined.
With an output totaling 3.6 billion pounds
last year, the vinyl industry accounted for
roughly a fifth of the plastics produced. Of the
vinyl output, polyvinyl chloride, called PVC,
made up more than 80 percent (almost 3 billion pounds), finding ready outlets in such varied uses as rainwear, floor tile, garden hoses,
shower curtains, upholstery material, inflatable
toys, auto seat covers, and phonograph records.
Other vinyls, such as the polyvinyl acetate used
in adhesives, polyvinyl butyral used in safety
glass, and polyvinylidene chloride used in packaging film, are considered specialties with linlited applications.

The PVC industry
30

t-

20

t-

Although some PVC is made from acetylene,
most is derived from ethylene. Unlike polyethylene, which is produced directly from ethylene,
PVC is made from ethylene that has first been
combined with chlorine to form vinyl chloride
monomer. The monomer is then polymerized,
by the application of heat and pressure and the
use of a catalyst, to form PVC, a tough resin
with a molecular structure of linear chains more
dense than most polyethylene.

:::::::::::
1970
SOURCES : Chomical and Engineering News .

Standard & Poor ' s.
U ,S. Tariff Commission .
Federal Reserve Bank of 0.11 ...

12

1975

1980

Because of its high density, untreated pVC
resin is very rigid. But with the addition of
softening agents called plasticizers, the resin
becomes more flexible and can be easily processed into final products. Generally, the more

Three major thermoplastics
accounted for over two-thirds of
plastics production in 1969
PLASTICS

...

100.0 %

THERMO SETS

THERMOPLASTICS
80.3 %

19.7 %

POLYETHYLENE

VINYLS

STYRENES

OTHER

31.3 %

20 . 7%

18.8 %

9 .5%

"-I

SOURCE : U,S . Tarllf Commi ss ion .

plasticizer used, the more flexible the resin becomes. Other additives, such as stabilizers, lubricants, and fillers, are also blended into the
r~sin to achieve the properties needed for parttcular applications. By combining other monoIllers with vinyl chloride monomer to make
C~polymers , still more properties can be obtained, further broadening the markets for PVC.
The skill producers have achieved in varying
the properties of PVC compounds makes the

Polyvinyl chloride reached
a wide variety of markets in 1969
EXPORTS

6%

OTHER DOMESTIC USES

24 %

SOUND RECORDS

5%

EXTRUDED FILM AND SHEET

6%

CALENDERED FLOORING

10 %

WIRE AND CABLE

14 %

EXTRUDED PRODUCTS,

17 %

ExeEPT FILM AND SHEET
CALENDERING ,
EXCEPT FLOORING
SOURCE : U.S . Tar i ff Com mi ssion .

18%

markets for these compounds more diverse than
those for other large-volume plastics. Such
products as upholstery fabrics, waterproof
sheeting, and flooring, for example, are made
by calendering, a process of forcing a PVC
compound between counterrotating rollers and
pressing it into sheets of plastic. With adjustable rollers, the thickness of sheets can be carefully controlled. Where rigid sheets are required,
such as in floor tile, PVC is used without plasticizers. Where flexible sheets are needed, such
as in shower curtains or plastic tablecloths,
plasticizers are added.
Polyvinyl chloride compounds are also extruded into such products as plastic pipe, window awnings, and garden hoses. And they are
coated on wire and cable, paper, and textiles.
Less frequently, they are used in molding such
products as bottles and phonograph records.
Demand for PVC has increased rapidly. On
the average, sales have doubled every seven
years since the beginning of extensive marketing in 1945. For some PVC applications, especially those using rigid materials, such as clear
bottles and plastic wall and ceiling coverings,
sales have grown even faster, doubling every
two or three years.
Growth of the market has recently slowed,
however - not from a weakness in demand
but from a shortage of vinyl chloride monomer.
With 3.9 billion pounds of monomer capacity
available last year, production totaled 3.7 billion pounds - about 95 percent of capacity.
The monomer market I:nay be even tighter this
year, with the capacity utilization rate approaching 100 percent. Not until 1971, when both
Shell and PPG Industries bring new plants
on stream with capacities of more than 600
million pounds, are conditions in the vinyl
chloride monomer market expected to ease.
Polyvinyl chloride plants also operated near
capacity last year. Although total PVC plant
capacity reached 3.7 billion pounds by the end

business review/may 1970

13

of the year, the average for the year was only
3.2 billion pounds. To bring production to almost 3 billion pounds, a capacity utilization
rate of 93 percent was required. With the PVC
market tight, resin prices were firm throughout
the past year.
Polyvinyl chloride sales
to more than double by 1980
BilliONS OF POUNOS

6

-

D

ACTUAL

[8]

8

o

There are 23 producers of PVC resins. Most
are large, diversified companies and , as in the
case of polyethylene, often leading chemical or
petroleum producers. Unlike the polyethylene
industry, however, large tire manufacturers are
also important PVC producers. The nation'S
five largest tire manufacturers account for a
third of the PVC capacity. Half of this is
owned by B. F . Goodrich, the leading PVC
producer. Chemical companies control about
30 percent of the capacity, and oil companies
about 16 percent.

PROJECTED

Although PVC plants are spread throughout
the country, those producing vinyl chloride
monomer, the basic input to PVC production,
are heavily concentrated in Texas and Louisiana. Again, as in the case of polyethylene
production, this concentration along the Gulf
Coast results primarily from the availability of
pipelines carrying ethylene.

-

4 -

2

Structure of the industry

-

I I
1960

1965

1970

1975

1980

SOURCES : Standard & Poor ' s.
U.S . T a riff Comm i ssi on .

Demand for PVC is expected to increase
rapidly througho~t the 1970's, with sales of
PVC and its copolymers reaching 6.9 billion
pounds by 1980. Much of the prospect for
growth has been spurred by the Food and Drug
Administration's recent approval of clear PVC
bottles for use in food packaging. Some forecasts show a sixfold increase in sales of PV C
bottles in the next five years, with sales of the
PVC resin used for bottles reaching 150 million
pounds by 1975. Other markets expected to
stimulate PVC growth include new plastic building materials, flooring, and pipe, as well as new
uses in automotives.

Vertical integration is not as widespread ill
PVC as in the other large-volume thelIDOpla stics. Of the 23 companies producing polyvillyl
chloride, only ten make their own vinyl chloride
monomer. Moreover, as the production of villyl
chloride monomer from ethylene replaces all
older process based on acetylene, the trend
seems to be toward still less vertical integration.
As ethylene-based monomer production bas
increased, economies of scale have become
more important. The average monomer pla llt
has an annual capacity of about 350 millioll
pounds, and the newest plants have capacitieS
of more than 500 million pounds. Dow Chemical's new plant at Oyster Creek, Texas, fof
example, has a rated capacity ot 800 millio ll
pounds.
With efficiency requiring such large plall ts ,
the monomer industry can support only a fell'
efficient-sized plants. As larger units are built,
many of the less efficient plants are phased out.
Until this year, for example, Union Carbide

... but vinyl chloride monomer
capacity center ed on the Gulf Coast

PVC plant capacity spread
across the United States ...
Annu al capacity.
beginning of 1970
(Millions of pounds)

Produc er and
pl ant location
Airco
Calvert City. Kentucky " .. , • . .. . . ..
Allied Ch emica l
Painesvill e. Oh io
,.,,,'
America n Ch emical
[Stauffer.Atl antic Richfi eld)
ong Bea ch. Californi a .... ,' , .. . , '
Atl antic Tubing
Cra nston. Rhod e Island
,,' ,,,•,, ,
Borden
Illiopoli s. Illinois " ,'
,,,,,,,,,
Leom i nst er. M assa chu setts
COntin enta l Oil
Aberdeen. Miss iss ippi '"
Diamond Sh amrock
g elawa re City. Delaw a re
ee r Pa rk, Texas " " " "
Escambia Ch emical
Pensacola, Florida , , " " " " " " "
EthYl Corp.
F' Baton Rouge, Louisian a " ' .. ' , " ' .
or~ ston e Tire & Rubber
Pe ~?vill e . Maryl and " " " " ' , ', ' , .
o stown. Pennsylvani a " , . , ' . . " .
Gen eral Tire & Rubber
AShtabul a, Ohio " ' ," " . , .. ... . , .
B. F. GOodrich
~ong Be ach, Californi a " , . . , . •. . . '
L en,ry, Illinois "" " " ," " " , . . ,'
PO~' ~ville, Kentucky " , " " , ... . ,'
N~ rocktown, N ew Je rsey " ' . " " "
A lag ara Fa lls, New York " " " , . ' "
G von La ke, Ohio " " " " ' " , , , . , , ,
OOdYear Tire & Rubber
~I,a qUemin e . Loui sia na "" . "" . . '
lagara Fall s. New York
, . , , . .• . ,
Gr~~t Am eric an Plastics
Itch bUrg, M ass achusetts " . . , ..• "
Hooker
'
Burling ton, N ew J ersey " " ' ••.. , . .
KeYsor Ch emic al
M SaugU S, Californi a
sn s~ nto
Prong fi eld, M assa chusetts
Olin
Asson et . Mass achusetts
Pantasote
Pa ss aic • New J ersey " " " " ,, ' , '
Po'
.S
Int Pl easa nt, West Virgini a ,' , ."
tauffer
Delawa re City, Delaware
Tenneco
~Iurli~gton, New J ersey
U emIngton, N ew Jersey ,, " "" .. '
"{on Carbid e
S~x~~ City, Texas , , , , , , , , , , , ,
Charl eston, West Virginia
U , u
noroyal
Painesvill e. Ohio , , , , , ' , , , , , , ,

~L

PRODUCERS " ,"

" ' , . , ,' "

120

2bo
70
100
250

(combin ed tota l)

155
240

(combined tota l)

50
150
115

125
75

~

]40

BO

40
' 70
60
150
125
120

(combin ed total)

380

140
75
320

(combin ed tota l)

135
3,715

n s.

1~~a uffe r

So

Alli ed Ch emical
Geismar, Louisi an a " ... ,' , '.,
Am eric a n Ch emica l
(Stauff er·Atl antic Richfi eld)
Wat son, Californi a " ' "
Contin ental Oil
La ke Cha rl es, Louisi ana
Di amond Sh amrock

300
170
500
50

Dee r Pa rk, T exas . .............. .. .

Dow Ch emical
Pl aqu emin e, Loui sia na " ' ..... , .. •
Free port, Texas " " " "" ' . , " " ' .
Oyst er Cree k, Texas , " " ' . ' . " ' . . .
Ethyl Corp.
Baton Rouge, Louisi a na . , " , . ,.
Hou ston, Texas , , " " " " ' , .. ,.,' ,
B. F. Goodrich
Calve rt City, Kentucky " " ' ,
Monochem (Bord en·Uniroyal)
Geismar, Loui siana " " ' "
PPG Industri es
Lake Ch a rl es, Loui siana "., . ... , ..
Tenn eco
Hou ston, Texas " " , . "

.. ' . ... .•• .

ALL PRODUCERS " ..• " " " . ' "

250
200
750
270
150
700
310
330
200
4,180

630

(combined total)

to '8~00~y~a r is ex pected to ex pand th e Pl aqu emin e pl ant
' H mIllion pounds in late 1970.
Pou dOoker is ex panding the Burlington pl ant to 120 million
to

Annual cap acity,
beginning of 1970
(Millions of pounds)

Producer and
pl ant locat ion

is ex pected to ex pand th e Delaware City plant
mill ion pounds by the end of 1970.
URCE: Chemical and Engin eering News.

produced its own monomer for use in its PVC
operation. The company has recently phased
out its acetylene-based vinyl chloride monomer
plant at Texas City, however, and now purchases monomer. Diamond Shamrock is also
expected to shut down its acetylene-based
monomer plant at Deer Park. This will leave
only Monochem and Tenneco with acetylenebased plants in operation by 1971.
While some PVC producers are integrated
forward into end-use markets, their participation in these markets is usually confined to
large-volume applications, such as calendered
film and sheet. There remains an important
place for small PVC fabricators competing in
the broad range of end-use markets. In fact,
the success of a PVC producer depends largely
on his ability to m ake a wide variety of resins
in response to the growing needs of the market - a market th at has grown rapidly with
the discove1Y of new uses for PVC.
WILLIAM

H. K ELLY

busi11ess review/ m.ay 1970

15

Dist,·ict highlights
The seasonally adjusted Texas industrial
production index rose moderately in March to
181.5 percent of the 1957-59 base. All major
categories except utilities - which were unchanged - advanced. Manufacturing increased
0.5 percent, with production of nondurables
rising at twice the rate of durable goods. Output
of transportation equipment advanced nearly
1.0 percent, and mining rose slightly.
The total index in March was up 6.0 percent
from the year-earlier level. The only major
category registering a decline was utilities,
which dropped nearly 8.0 percent. Total manufacturing was up 6.7 percent from a year before. The higher level of manufacturing output
was primarily attributable to a 10.6-percent
rise in nondurable goods production. Durable
goods output was up only 1.9 percent from
March 1969. Mining was up substantially.
New passenger car registrations in the four
largest metropolitan areas of Texas (Dallas,
Fort Worth, Houston, and San Antonio) increased 4 percent in March. Registrations were
8 percent below a year earlier. Cumulative
registrations for the first three months of 1970
remained 10 percent below the same period
last year.
Department store sales in the Eleventh District for the four weeks ended April 25 were 3
percent lower than in the corresponding period
last year. Cumulative sales through that date
were 2 percent higher than for the comparable
period in 1969.
Total nonagricultural wage and salary employment in the live southwestern states advanced to 6,311,700 in March. The increase
was less than seasonally expected and was

16

concentrated in the nonmanufacturing sector.
Manufacturing employment declined 0.2 percent, marking this sector's third consecutive
monthly drop. Of the nonmanufacturing categories, transportation and public utilities, trade,
finance, and services rose but mining, construction, and government declined.
The year-to-year gains in employment continued to be somewhat moderate in March.
Total nonagricultural wage and salary employment was up 3.9 percent from a year earlier,
and the nonmanufacturing sector was 4.5 percent ahead of last year. All nonmanufacturing
categories advanced, with the greatest strength
in transportation and public utilities. Manufacturing employment was up only 1.6 percent.
Primarily in response to seasonal influenceS,
all major balance sheet items increased at
weekly reporting banks in the Eleventh District
in the five weeks ended April 15 . Large negotiable certificates of deposit rose, increasing the
funds available to banks.
Reflecting increases of $59 million in loans
to brokers and dealers to purchase or carr)'
securities and $56 million in loans to institutions other than banks, total loans adjusted increased $140 million. Business loans dropped,
however, falling $13 million, which was in
sharp contrast to a year earlier, when · businesS
loans accounted for $70 million of the $109
million increase in total loans adjusted. Real
estate loans were up $1 million, compared with
$8 million a year earlier, and consumer instalment loans were up $8 million, compared with
$13 million a year earlier.
As a result of an $89 million advance in
holdings of municipal securities, total investments increased $80 million during the fiv e-

Week period. Holdings of U.S. Government seCUrities declined $24 million. An increase of
$10 million in Treasury notes and bonds maturing within a year was more than offset by
declines of $15 million in Treasury bills and
$18 million in intermediate- 'and long-term
bonds. During the corresponding period a year
earlier, total investments increased $7 million.
On the liability side, total demand deposits
advanced $406 million. Deposits of individuals,
~artnerships, and corporations rose $282 milhan, and interbank deposits rose $48 million.
In the comparable period a year before, total
del11and deposits were up $304 million.
I' Total time and savings deposits rose $75 milIan, in sharp contrast to a $59 million decline
a ~ear before. The increase can be attributed
Pl'Il11arily to increases of $39 million in de~osits of individuals, partnerships, and corporatllol~S and $27 million in deposits of states and
t
1"
dlell' l?o.ltIca I su bd'"
lVISlons. Large certificates of
epOSIt lIlcreased $64 million.

b March crude oil production of 6,796,400
O~'rels per day in Louisiana, New Mexico,
lahoma, and Texas was essentially UllI
Clanged f rom the February level. Production
.
Increase d 26 percent over February in New
tv{ .
.
of eXlCO but declined less than 1 percent in each
19 the other states. Compared with March
l
production increased 5.8 percent in
OUlslana, 3.4 percent in New Mexico, 0.4 perCent'
.
}", In Oklahoma, and 11.4 percent in Texas.
!~at'
lonally, March production was 1.4 percent
oVer February and 6.2 percent over March 1969.

6?,.

th The Texas Railroad COlllmission reduced
th e May production allowable in the state from
o e recent record of 68 percent to 64.5 percent
l1lax imum efficient production. High invenf,
ton
tl es and greater than expected production at
t~e 68-percent rate were given as reasons for
\I e. redUction. In New Mexico, the Oil Conseron Commission retained the rate of 75 bars per well per day for the southeastern part

r:t

of the state. Demand for oil was described as
strong, but producers were experiencing difficulty marketing the casinghead gas produced
with the oil.
Louisiana officials increased the April allowable from the originally announced 48percent rate to a 50-percent rate after part of
the state's offshore production was shut down .
The big offshore oil spill was cited as a reason
for the shutdown. This higher rate will be continued for May. The Oklahoma Corporation
Commission increased the production rate from
100 percent for April to 125 percent for May.
Agricultural activity in much of the Eleventh
District has been slowed by the continuation of
cool, wet weather. Following are the proportions of major crops planted in Texas by the
second week of April compared with plantings
in early April last year: cotton, 13 percent
versus 16 percent last year; sorghum, 30 percent versus 33 percent; corn, 47 percent versus
62 percent; and rice, 36 percent versus 52 percent. Pasture conditions, which are slightly
better than a year earlier, continue to improve.
But grass is still short in some areas.
In Texas, there were 1,243,000 head of cattle and calves on feed on April 1 - 4 percent
fewer than a montI1 earlier but 22 percent more
than a year earlier. There were 454,000 head
on feed in Arizona - 8 percent fewer than on
March 1 but 8 percent more tl1an on April 1,
1969. The number of cattle and calves on feed
in the nation's 22 largest cattle feeding states
totaled 11,565,000 head - 5 percent more than
a year earlier.
There were indications on April 1 that production of winter wheat in states of the District
would total 189 million bushels this year - 4
percent less than in 1969 and 14 percent less
than in 1968. In Texas, indications were for a
5-percent increase over the state's belowaverage crop last year. This gain, based on expectations of better yields this year, was seen

business review/ may 1970

17

pushing production to more than 72 million
bushels. Oklahoma was expected to slip 14 percent from the level of its large crop last year
but still produce more than 101 million bushels.
In the other three District states, where winter
wheat production is considerably less, there
were indications of gains ranging from 94 percent to 17 percent. Arizona is expected to produce nearly 9 million bushels, Louisiana over
1 million bushels, and New Mexico almost 6
million bushels.
Prices Texas farmers and ranchers received
for their products on March 15 averaged vir-

new
pur
bunk

18

tuaUy the same as a month earlier. They were
9 percent higher than a year earlier, however.
The aU-crops price index was 2 percent lower
than in mid-February but 2 percent higher than
in mid-March last year. Although prices for
hogs, sheep, and lambs were down from a
month earlier, beef cattle prices were almost 5
percent higher.
Cash receipts from farm marketings in the
five District states were 9 percent higher in the
first two months of the year than in the same
months last year. Livestock receipts were up 17
percent, but crop receipts were down 3 percent.

The Citizens Bank of Las Cruces, Las Cruces, New Mexico, an insured nonmember bank located in the territory served by the E1 Paso Branch of the
Federal Reserve Bank of Dallas, was added to the Par List on its opening date,
April 6, 1970. The officers are: Edward Triviz, Chairman of the Board; Albert
Armiso, President; James Martin, Vice President; William Fisher, Cashier; and
Albino Gonzales, Assistant Cashier.

STATISTICAL SUPPLEMENT
to the

BUSINESS REVIEW

May 1970

FEDERAL RESERVE BANK
OF DALLAS

~

.- - -

-----~ ~

---

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

---~------

CONDITION STATISTICS OF WEEKLY REPORTING
COMMERCIAL BANKS

RESERVE POSITIONS OF MEMBER BANKS
Eleventh Federal Reserve District

El e ve nth Fe d e ral Reserve Di strict

(Ave rag es of daily figures. In thou sand s of dolla rs )

=

(In thou sand s of do lla rs )
4 wee ks e nd e d

Ite m

Ap r. 29,
1970

Mar. 25,
1970

Apr. 30,
1969'

ASSETS
Fe d e ral fund s sold and sec uri tie s purcha se d
und er agree ment s to rese ll ••• • •• •• •• • •• • • • • •

Othe r loan s and d is counts, g ro ss .• • . . . • •. .•. .. . .
Comm e rcial and industrial loan s . • ..••.. • • . . • •
Ag ri cultural loan s, excl udin g ecc
ce rtificates of int e re st •• . .. •. . •.•• .. . •.. ..

Loans to brO Kers and d e al e rs for
purcha sing or carr ying :
U.S . Gove rnm e nt se curiti es . ••. •.• • .. • •.. • •
Other securities •• . . •. . •• ... .••..•• . •• . ..
Oth e r loo ns for purcha si ng or carrying :
U.S. G o ve rnm e nt se curities • •. • •• . •.• • . .• . •
Other securities . • • •..•..••.. .. • • ..••..• .
loon s to non bo nk financial in stitution s:
Sol es financ e , p e rsonal Ananc e, facto rs ,
and o ther bu sin ess cr e dit co mpani es ••.•• • .
Othe r .. ••••• .. ••. ••.. • ... • .. •• • ..... .•
Re al estate loon s . • . • ..•• ..•• . •.. .. • . . .. •• .
loons to dom estic comm e rcial bonks .•••..•. • ..
loons to fo reign bo nks •. . • •• • . .• •• . • •. . • •. .
Consum e r in stalm e nt lo on s •.• .•.. . • .•. •...•.•
loons to for e ign g ov e rnm e nts, ofAcial
institution s, central bonk s, int e rnational
in stitutions •• ••• ..•.. • •.••. •• .. ••. . .• ... •
Oth e r loon s • • . .. .• •. . • ..•..• .. •.•..•. .•..
Total investm e nt s .. ..•• . . .. ••. • • .. .• .. . • . . •• .
Total U.S. G ove rnm e nt se curities • . • . • .. • . . . . ..
Tr e a sur y bills . .• •• . • .. ••. ••• . . . .. • ..•. ••
Tre asu ry ce rtiRcates of ind e bt e dn ess ••..• •..
Tr e a sury not es and U.S. Gov e rnm e nt
bond s maturing :
Within 1 ye ar •• •.••.• .• .••. ••• •.. • ..•
1 year to 5 ye ars .•••• • •.. •• • •• ... • ...
Aft e r 5 years •• • . ••• .. •. .•• • . •...••• .•
Obligations of states and political subdivi sion s:
Tax warrants and short· te rm not es and bills ..

All othe r .............. ...... .. .. ... .. . .
Oth e r bond s, corporat e stocks, and se curities:
Ce rtificat es re prese nting parti ci pations in
Fe d eral ag e nc y loa ns •. • ..• • •. . •..... ..
All oth e r (including corporate stocks) .. ..••. .
Co sh it e ms in proces s of coll e ction .•. • ..••..... .
Reserves with Fe d eral Reser ve Bank •• . • ..•.• . . ..
Curre ncy and coin . .. • ... .• . •• .. • .. •• ..••. •..
Balances with banks in the Unit e d States •• • ••. • . •
Balance s with bonks in for ei gn countri es ••••.. • •.
Oth e r a sse ts (including inves tm e nts in sub sidiari es
not con solidat e d) • ••.• • .• . . •• ..• . . • •. . • .. • .

408 ,750
5,983,676
2,927,480

328 ,350 } 6,388,576
5,994,269

---- - 3,117,771
- -3,000,519

106,784

106,206

11 0,766

500
43 ,067

500
39, 459

28,176
60, 40 1

1,183
392,312

1,230
387,955

339
392,832

135,65 4
365,705
596,669
9,6 17
9,872
73 1,077

132,845
342 ,679
587,795
10,222
10,32 9
729,816

148,320
391,4 17
623,396
129,732
6,621
661,359

175
663 ,581
2,629,679

425
644,289
2,48 4,670
892,650
44 ,226
0

1,057,42 2
71,582
0

173,303
605,152
77,403

166,647
598,375
83 ,402

118,950
669,636
197,254

69,585
1,516,691

5,906
1,458,205

6 4,099
1,385,434

69,49 2
69,777
1,100,895
711,3 40
85,814
422,271
8,32 2

56,82 8
7 1,081
1,016,240
818,805
84,080
449,7 48
8,672

144,183
103,423
1,252,329
768,242
81,03 4
485,789
5,233

516,502

---11,691 ,630

- --- 4
90 4,13

I

TOTAL ASSETS. . • .. . . .. . . .. . .. • . • • • .. .• 11,867,249

- ---

73 2,912
681,7 14
51,198
748,574
-15,662
39,943
-55,605

7 26;216
675,374
'5 0,842
7 25,816
400
23,355
-2 2,955

738,083
687,347
50,736
743,829
-5,746
43,800
- 49,5 46

771,344
592,429
178,915
751,860
19,484
6,567
12,917

785,303
60 4,640
180,663
756,076
29,227
13,388
15,839

758,203
583,037
175,166
731,720
26,483
13,078
13,405

1,504,256
1,27 4,143
230,113
1,500,434
3,822
46,510
-42,688

1,511,519
1,280,014
231,505
1,481,892
29,6 27
36,743
-7,116

1,496,286
1,270,384
225,902
1,475,549
20,737
56,878
-36,141

506,796

---

(In thousands of dollars)

Total gold certiAcate ros erves ••••.•..• ••• ..•
Di scounts for me mb e r bonks . • •.• • • ••• .... ••
Oth e r di scounts and advanc es •.•.••••. • ••. •
U.S. Gove rnm e nt se curities .••.. •• •• • •.• ••• .
Total e arn ing assets ••• •••• •. .••• •..•.. • •. •
Me mb e r bonk rese rve d e posits • • • • ••• ..• . . ••
Fe d e ral Rese rve note s in actual circulation •.•••

270,478
123,585
5,040
2,393,357
2,521,982
1,240,413
1,717,920

396,044
12,131,808

CONDITION STATISTICS OF ALL MEMBER BANKS
8,866,268

3,909,984
258,789
142,610
1,1 29,544

5,957,042
3,985,3 48
364,737
298,162
1,180,165

2,72 9
25,719
83,592
3,402,238

3,051
24,594
80,767
3,316,929

4,204
25,318
99,10 8
3,785,362

914,233
1,667,7 16
775,292
7,254
23,173

919,8 40
1,625,2 28
740,174
1,8 23
15,314

993,021
2,006,770
737,729
11,446
28,906

13,220
1,350

13,200
1,3 50

7,000
490

855,176
3 26,610
435,449
134,422
13,275
994,899

978,055
274, 468
437,455
13 4,804
13,277
987,3 03

TOTAL LIABILITIES, RESERVES, AND
CAPITAL ACCOUNTS ...... .. ... . .. .... 11,867,249

11,691,630

Eleventh Federal Reserve Dislrict

9,742,404

Total de posits .... .. .. .. .. .. .. . .... . . ..... ..

9,107,418

Total d e mand d e posits ••.. • .•• •..• •.. ... . ..
Individual s, partne rship s, and corporations .•..
States and po litical subd ivisions ••• .. . •... •.
U.S. Gove rnm e nt • . ••. ••• .. • •. .•• ..• • . . . •

5,705,180
3,942,047
3 40,336
173,876
1,136,881

----

---5,549,339

l

1,0 47,908
268, 280
119,415
n.a .
95 3,801

(In millions of dollars)
Mar. 25,

1970

Feb. 25,
1970

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

11,456
2,029
3,230
1,329
255
1,174
11
1,161
854

11,434
2,054
3,215
1,140
260
1,118
10
1,089
893

item
ASSETS
loan s ond di scounts, grosst •. • • • •..• • ... .•
U.S. Gove rnment obligations • • •..•..•• ••••
Other securiti es •. • •.• ••• •.•• • ••.... •• .•
Re se rves with Fed e ral Re se rve Bank .•••• . .. .
Ca sh in vault • •.... •• . • ..•• • •..... . " . •
Balances with banks in th e Unit e d States •...
Balance s with banks in foreign countri es e .. ..
Co sh item s in proc ess of collection • . • •• •• ..
Oth e r asse tsO
TOTAL ASSETS .... . . . ...............

21,499

21 ,213

L1A81L1T1ES AND CAPITAL ACCOUNTS
Demond d e posits of bonks •• • .. . •• •..• • ••
Othe r d e mand d e po sits ... ... .. . . . . .. . . ..
Time d e po sits

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

1,463
8,655
7,258

1,406
8,611
7,186

Toto I d e po sits •. •• • .. . .•• •• .. ' " • •.••
Borrowings • ..... • •.. . .••..• •• .• • •• • •..
Oth er liab iliti es e • ••..... ••• ... • • ••.•.• •
Total capito l accounts e .• ••• ..••.. " •• • • .

17,376
1,294
1,077
1,752

17,203
1,184
1,088
1,738

21,499

2U13

TOTAL LIABILITIES AND CAPITAL
ACCOUNTse

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

12,131 ,808

Be cau se of format re vis ion s a s of Jul y 2 , 1969, earli e r data arc not fully compa rabl e.
n .a. - Not availabl e .

1

4 we e ks e nded
Apr. 2, 1 96~

CONDITION OF THE FEDERAL RESERVE BANK OF DALLAS

L1A8ILITIES

Banks in the Unit e d States .... .. ... . ...... .
Fore ign:
Gove rnm e nts, official in stitution s, ce ntral
banks, int e rnational in stitutions. ••.• • ..•
Comm e rcial bonks .••. . .•..• • .. •• .. •• . •
Ce rtiR e d and offic e rs' ch e ck s, e tc . • . •. . ... ..
Total tim e and saving s d e posits .. . .... .. . ... .
Individuals, partn ership s, and corporations:
Saving s d e posits ..• •• •.• . .. •• .. • .. . •..
Other tim e d e po sits •• ••. .• . . ••.. .......
State s and political subdivision s . ... . ...• •..
U.S. Gove rnm e nt (including postal saving s) ..•
Banks in the Unite d States •.••..••.. . • • .•••
Foreign:
Governments, ofAeial in stitution s, central
bonk s, Inte rnational in stit ution s .• •• ....•
Commercial banks . • ... •• . .• .. ••• .. •. . .
Fed e ral funds purcha se d and se curiti es sold
und e r agree me nts to re purcha se ••.. •. .. •• . • •
Oth e r lia b illlies for borrow e d mon e y ••..• • ......
Othe r liabiliti es ••.. .• . • • . . • .. •.... . ... • ...••
Rese rve s on loan s .. • • . • • . ... • •. • . •• .. ••• .. • •
Rese rves on se cu ritie s . • . ••. . •• ... • .. • •. • .••..
Total capital accounts •. .. .• • .. . . .• •. ... ••...•

Ma r. 4,1970

0
71 7 ,446
2,754,561

48,276
0

RESERVE CITY BANKS
Total rese rves he ld •• . . .. .. .. . .
With Fed e ral Rese rv e Bank .•. •
Curre ncy and coin . .• . .. •. ...
Re quir e d rese rv es •• .. • ..• • ... •
Excess rese rv es •••. • • . . • •.•..•
Bo rro wing s • ..• •• . . .•.. •• •• •..
Fr ee rese rv es •.•..•...•. •• ....
COUNTRY BANKS
Total reserves he ld . • • .. ..•. • •.
With Fe d e ral Rese rv e Bonk .•.•
Curre ncy and coin ....•... • . .
Re quire d rese rves •. ••.. • •• ....
Excess rese rves • .• • .• •• . . . •• ..
Borrowings •... . .•••...• ••. ...
Free rese rv es •.•....• • •• .... • •
ALL MEMBER BANKS
Total rese rves he ld •.• •• .... • •.
With Fe d e ra l Rese rve Bonk .• .•
Currency and coin . ••.. •• ....
Re quire d reser ves •. •• ..... ••. •
Excess rese rves .••.•• . .•. •••. .
Bor rowings • .. • • . ..•. ••• ...• ••
Free re se rv e s •.• •• •••..•.... ••

4 w ee ks e nd e d

Apr. I, 1970

It e m

Before Jul y 2, 1969, this item was published on a ne t basis .
e - Estimated .
1

11,05 A
2403
3'237

1'27 A
'255

1,16~

-

1 115
'696

~

-

1 A6 A
8>70
7,732

17'~~~
59 1
1,672

~
~

BANK DEBITS, EN D- O F-M O NTH DE PO S ITS, AN D DEPOS IT TURN O VER
(Dollor amo unts in thousa nds, seosonqlly adiu sted )

~
~~====================================================================================================
DE81TS TO DEMAND DEPOSIT ACCOUNTS'

DEMAND DEPOSITS'

Percent change

February

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

5,949,564
2,620;260
9,692,460
855,6 48
1,99 1,532
5,979,780
9,852 ,156
6,06 1,560
1,8 14,268
5, 14 1,1 36
438,684
123,806,988
6,933 ,312
2 1,203,640
2,743,740
96,489,444
94 1,496
4,361,052
1,66 1,688
1,978,284
1,655,952
1,220,292
16,588,056
1,091,064
1,429,812
2,1 15,456
2,94 1,200
2,072,724

2
-7
-1
-5
-3
6
25
-3
- 1
6
-2
7
6
-1
- 15
-4
5
10
4
-5
-2
-4
-3
1
-4
-2
-4
-8

1 101_28 cente rs ....... ...... ... . ... . ...... ....... .
_____

$ 339,63 1,248

2

--

Standard me tropolitan

stati stical ar ea

ARIZONA' Tu
lOUISIAN·A. C - - - . .... .. • ........... •..• . ••.... ..
Son

NEW

. Monro e •••••.• • .• ••• •••••••• •• . • . ••••••
Shr eveport •• •••• •• •••• • • . ••••• • ••••••• ..

lEX MEXICO, Roswell ' •. • _ •....• •. • ....•.•.•••.••..
AS,

~:~~~f~:' :::::::::::::::::::::::::::::::::::

Beaumont-Port Arthur·Orang e • • • • ... •• • •••••• . •
Crown svill e -Harling e n-San Be nito . •.. ...•.•.• • . . .

~~;~:E"iT • .•.• · ·. ·.:· · • • • • ••
.
.
H elveston-Texas City •.. ..... . •..•.•..........

~o~~~~:.:.: :: : : : ::::::::::::: : ::::::::::::: :

:
McAll en-Pharr-Edinburg ..... . . . . ...... - .. . ..•..

r@14LL •••..·.:· •••.• :•·· • ··· ••.•
.
T0j orkana (Tex es -Arkansas) •••• .... • •..•.•. •• . .

~~~fl~: ~~il ;:

0

Annual rot e
of turnover

March 1970 from

March
1970
(Annual-role
ba sis)

3 months,

1970

March
1969

1970 from
1969

March 31,
1970

March
1970

February

1970

March
1969

20
1
30
9
1
20
13
7
15
19
7
14
12
10
10
9
13
8
8
-2
12
0
7
9
-9
8
16
-4

20
11
40
16
4
17
4
6
14
10
7
13
9
12
17
12
11
4
5
1
16
9
12
11
-9
10
15
-3

$ 232,292
79,963
237,812
40,169
100,771
158,388
295,111
238,180
76,147
208,937
31,040
2,161,380
224,208
647,992
104,026
2,488,900
39,800
150,542
99,357
132,81 1
80,580
69,944
628,441
65,104
70,024
94,683
115,987
11 7,016

25.7
32.2
41.9
22.7
20.3
37.7
34.8
25 .6
24.1
25.1
14 .1
57.6
30.8
33 .5
25.7
39.2
23 .6
29.0
17.0
14.7
20.8
17.9
27.0
17.0
20.5
22 .8
25.8
17.8

25.7
33.4
42 .8
25.2
21.5
35.6
29.1
26.2
25.4
24.4
14.8
54.5
28.7
34 .2
29.4
4 1.3
23 .1
27.0
16.6
15.6
22.0
18.9
28.7
18 .3
2 1.4
24 .0
27.3
19.6

23 _
3
31.6
32.7
22 .9
20.1
33.6
3 1.7
24.6
21.9
21.1
12.8
50.6
29.0
30.8
24.3
36.6
21.6
27.2
17.2
15.5
19.2
18.6
25.5
16.8
22 .1
21.0
22.4
18 .4

12

12

$8,989,605

38.2

~8.2

34.8

,D
:!

c~~o:it s of, individuals, partnorships, and corporation s and of stat es and political subdivisions .
n y baSIS.

G RO SS DEMAND . AN D TIME DEPO SITS O F ME MB ER BA N KS
BUILDING PERM ITS

Eleventh Federa l Rese rve District
(Av oragos of daily figur es. In millions of doll o rs)

~

VALUATION (Dollar amounts in thousands)
GROSS DEMAND DEPOSITS
Reserve

~
19

TIME DEPOSITS

Country

Reserve

Coun try

city banks

banks

city bonk s

banks

Tota l

68, Marc
h . .. ..
1969.
. March
Octob~;" •

9,510
10,268
10,306
10,373
10,692
10,793
10,256
10,284

~ovemb ~;.:

1970. ecembe r ..
. :anuary •.•
Mcbruory .• •

~

...

5, 122
5,487
5,580
5,623
5,745
5,883
5,631
5,557

4,388
4,781
4,726
4,750
4,947
4,9 10
4,625
4,727

Total
6,935
7,722
7,223
7,268
7,203
7,108
7, 145
7,23 1

2,863
3,042
2,646
2,690
2,628
2,568
2,554
2,58 1

Percent chang e

4,072
4,680
4,577
4,578
4,575
4,540
4,59 1
4,650

NUMBER
Ar ea

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

~rll:O

70
33

-19
- 67

15
-27

31
696
404
132
74
411
2,234
40
432
362
89
3,896
62
244
49
77
83
53
1,244
72
29
222
61

102
1,759
989
401
19 1
928
5,402
74
1,194
1,0 16
204
8,881
130
514
108
180
201
156
3,234
154
84
525
178

176
2,414
10,363
1,716
229
3,393
58,419
44 1
10,524
3,853
895
27,219
487
2,483
534
1,422
100
1,013
13,360
898
274
6,963
1,419

2,095
17,7 18
23,662
2,859
866
8,828
90,4 11
1,372
26,778
20,010
1,919
97,195
1,260
9,973
836
3,130
652
4,26 1
23,488
4,338
2,421
8,6 10
2.os3

-82 -94
80
162
109 -40
258
77
6 -63
- 14
-3
213
139
-42
7
143
79
-54 -44
116 -82
-20 -35
-16
227
-62 -55
324
40
244 -45
-69 -96
-62
346
175
69
-71
18
-86 -82
663
255
297
166

-52
257
-44
-7
-78
40
22
-9
7
-24
-68
-21
6
-4
-37
-27
-78
233
-4
147
19
68
-58

Tota l-26 cities •• 12,1 43

29,598

$156,620

$380,942

EI Pa so •. .••..
Fort Worth . ...

~ooisi~~~ • . . . . "

.•.•..• • ..••

c" Me;i· · ·········· ·· ....
t'

le~Qhorn a ~o.' : " ...•...•• • ••.
as .•.. ' . .... • • • . .•. •• . •

~::: :::::::::::
SC URCE .

1968

8,760
1.D92
5,940
10 1,262
72,086

4,526
874
5,088
11 8,275
68,856

2,704
2,112
7,625
122,383
84,150

189,140

197,619

218,974

U.S . Department of Agriculture.

1970 from
1969

3,990
8,346

Ga lve ston .• • • .

1969

Mar.

572
1,625

Denison ••• • •• •

April 1

1969

179
1,090

Monroe • ••••

Shreveport • ...
TEXAS
Abil ene ... . ...

Hou ston ••••••

~ rea

Fe b.
1970

75

Beaumont • ••• •

indicated

73
420

$

3 months,

3 mos.
1970

92

Brownsvill e ••••

1970,

1,724

March
1970

73

Corpus Christi . •
Dallas .... _ • ••

~

653

from

3 mos .
1970

$ 13,871

Amarillo . •• • ••

[In thou sand s of bu she ls)

March
1970

5,828

Austin •• •• ••••

W IN TER WHE AT PRODUCTION

March 1970

lare do ..•. , ..
Lubbock •..•..
Midland • ••• ..
Od essa ••••...
Port Arthur •. . •
San Ang elo • ••
Son Antonio •••
Sherman •• •• . •

Texarkana ••••

Waco .• .• ••••
Wichita Fa lls . •

49

-6

March
1970

Area and ty.pe

February

Jlonuory

1970

1970

1970

1969

~entia l building . ......
'e sidentia l building . . . .
) uild ing construction •..

• STATES .. .. ........
1entio l building ...... .
'c sidentia l building .. . .
;Juilding construction •• •

1,011
254
332
425
6,140
1,974
2,191
1,975

552
210
214
129
5,249
1,482
2,269
1,498

633
193
23 1
209
4,928
1,475
2,252
1,201

2,140
655
723
761
16,166
4,890
6,620
4,656

1,667
687
525
456
15,060r
5,505
5,767
3,788r

FOUR SOUTHWESTERN
STATES .. " .. ""."" ..
loui siana . .. .. .. ... . .. . .
New Mexico ... . ........ .

Oklahoma, •• , • • • , , , • , , •
Te xa s . . .. . ........... ..
Gulf Coa st. , , • • , , , • • • .
W es t Te xa s ... . .......
Ea st Te xas (p rop e r) •• •• •
Panhandl e .. . . . . . . ....

izono, loui siana, New Mexico, Oklahoma, and Te xa s.

Rest of st ot e .••• • • . .. . •

Revised .
~ E. Detoils may not add to total s because of rounding.
' RCE, F. W. Dodge, McGraw- Hili , Inc.

UNITE D STATES ...... , ••• ,'

Feb ruary

March
1969

February

Morcil

1970

1970

1969

6,796.4
2,442,4
360,7
613.5
3,379,8
677,8
1,621.0
185.0
84 ,6
811.4
9,598.0

6,794,5
2,444,0
351.4
619. 1
3,380.0
676.0
1,624 ,0
182.0
85,0
813.0
9,469.7

6,301.5
2,308,1
348,8
61 1.1
3,033,5
595.3
1,436.0
143.4
82 ,9
775.9
9,034.3

0,0
- .1
2,6
- .9
,0
.3
-,2
1.6
- ,5
-.2
1.4

7,9
5,8
3.4
.4
11.4
13,9
12,9
29.0
2.1

SOURCES, Am e rica n Petroleum In sti tut e.
U .S. Bureau of Mines.
Fe deral Rese rve Ba nk of Da llas.

NONAGRICULTURAL EMPLOYMENT
INDUSTRIAL PRODUCTION

Five Southweste rn States '

(Seasona ll y adiusted Indoxes, 1957.59

= 100)

Percent change

Mar, 1970 from

Number of p erson s

ype of employment
iona gricultural
;: e and sala ry workers ••

:-,ufocturing •••.• ••• •. •
ima nufacturing •• ••••••

.'.ining .• . ... • . . ......
~ onstruction ••• • • •••• ••
'ransportation and

public utilities .... .. ..
'rad e ...• .. .... ... .. .
lina nce •••....• • .• • •..
?ervi ce . . ... .. . . . .....
~ ov ernment •• • ••••••••

1970

March
1969r

Feb.
1970

1969

6,296,200
1,1 73,200
5,123,000
230,500
402,200

6,071,900
1,1 52 ,900
4,919,000
228,100
381,200

0 ,2
- .2
,3
-.5
-.4

3.9
1.6
4,5
,5
5.1

.2
,9
.4
.6
- .1

10,2
4.7
6,8
4 .8
2. 1

March
1970 p

February

6,311,700
1,1 7 1,400
5,140,300
229,300
400,500
461,700
1,446,900
320,000
1,003,200
1,278,700

460,800
1,433,400
318,600
997,500
1,280,000

418,800
1,382,300
299,500
956,900
1,252,200

Area and type of ind ex

Mar.

Tota l indu stria l production ......
Manufacturing •. •... . .• . . .. . ...

Durable ••• •• • , , , . ••• , , , • • • • •

.ttondurab/e . . ... . .... .. .. ... .
M ining .•••. •• .• .• • ••• ••.. • • • .

Utilities• .... .. .. ... . ..•. .. •...

UNITED STATES
Total industrial production . .. . ..
Manufacturing .. . . . ...... . .....
Durable ..... . . ....... . ... ...

Nondurable .. . . ...... .. .. .. ..
Mining ...... . ...... . . .. . . . ...
Utilities.... .. . ... ....... . .. .. .

.rizono, Lou isia na, Ne w Mexico, O klahoma , and Te xas.
= Preliminary.

URCE , State employment agencies.

OKLAHOMA
ARIZONA
NEW MEXICO

DALLAS HEAD OFFICE TERRITORY
HOUSTON BRANCH TERRITORY

o

SAN ANTONIO BRANCH TERRITORY

D

March
1970p

February

January

1970

1970

181.5
206,1
220,9
196,2
131.6
258,5

180.8
205.1
220.3
195,0
131.2
258.5

181.1r
205,6r
226,5
191.6r
130.7r
262,Or

170.2
169,8
170,0
169,7
136,1
230.5

169,8
169,5
169.0
170,0
134.0
232,6

170,2
170.0
169,3r
171.0r
132 ,5r
230,lr

TEXAS

- Revi sed .

o

--

March
1970

Area

:l UT HWESTERN
'ES' . .. . , .. " .. , ' ...

EL PASO BRANCH TERRITORY

ELEVENTH FEDERAL RESERVE DISTRICT

4.6
6.2

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