March 1973 1 - Year Averaged in the 1960'S

This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library ([email protected]) Natural Gas-

Higher Prices Might Help Slow the Growing Shortage - Just how critical the shortage in per thousand and maybe as much however, is in areas that would be na~ural gas has become was amply as $1 or more. And even with tech hard to explore and develop. About Pdi?Inted up this winter. Not only nological advances, it would take 14 percent is at depths of over d prices move sharply upward years to build the plant capacity 15,000 feet. About 20 percent is ~t suppliers were simply unable needed to provide an effective sup under waters offshore. And some n;eet the demand in many areas, plement to natural gas reserves. 28 percent is in Alaska. But even haVIng to cut off the flow to some The most direct solution to the so, the estimate is reassuring. users. Plants and schools had to problem in the long run, then-bar Some Government estimates are close, and hospitals and power ring adequate substitution-is an even more promising. One study plants had to shift to other fuels. increase in the rate of discovery of sets the nation's potential for in This Was true even in Texas new reserves. By all estimates, creasing its proved reserves at more source of more than a third ~f the there are still ample reserves to be than 2,000 trillion cubic feet. nation's natural gas. found in this country. Looking for further increases in t !f anything, with demand for One industry estimate has fixed exploration, the Federal Power his convenient, clean-burning fuel the nation's undiscovered gas at Commission foresees a reversal in Continuing to rise the shortage is 1,178 trillion cubic feet-50 times the downtrend that brought new apt to become mo~e acute. Con more gas than is now marketed. discoveries in 1970 to only two sUmption reached about 23 trillion Over 60 percent of this potential, thirds of the 17 trillion cubic feet a ~~bic feet in 1971, for example, and h I~f new discoveries totaling about 2;9 t~a~, proved reserves fell to 1 tnllion cubic feet-14 trillion Development of pipelines ess than four years before. sets off boom in use of gas ... Y Drilling picked up somewhat last ear. But it can take four or five TRILLION CUBIC FEET Years for new reserves to affect the 25------market supply. By the time these newdi. sCoveries have been brought Into actual production, annual con sumth p t·Ion may be running more an 30 trillion cubic feet. Other SOurces of gas are obvi f~SlY required. For the near future, Ports probably offer the only ~1ans of obtaining gas in sufficient ? urnes. Imported gas is expen- m'SIVe ho wever. The huge mvest-. a ents and costs required to liquefy n d transport natural gas could rUSh consumer prices for imports f~e ~ore than $1 per thousand cubic Of about twice the average price fuas now produced domestically. b 1 Ventually, synthetic gas could c: ~anufactured from other hydro o I I I I I no~o o~s. But without a major tech 1930 1940 1950 1960 1970 not ~Ical breakthrough, gas could SOURCE: U.S. Bureau of Mines fu I e manufactured from other e s for sale at less than 70 cents nUs'llless Review I March 1973 1 - year averaged in the 1960's. The With construction of large inter ceived manufactured, mixed, or commission's projection shows dis state pipelines, the picture began liquid petroleum gas through util coveries returning to this average to change-and rapidly. When lines ity mains, by the midsixties fewer level by about 1980. laid during World War II to carry than one out of ten users was re The problem, of course, is oil from the Southwest to the ceiving anything but natural gas. whether even that rate would ever North and Northeast were C\!)l'l Even with this rapid expansion be adequate again. Demand for verted to gas after the war, a vast in the market for natural gas, how natural gas has been going up new market was already waiting. ever, there was still little need for sharply for 20 years. And with the Suppliers had only to capture an incentive to explore for more gas. increases in both energy needs and existing market from manufactured One reason was the vastness of the concern over pollution problems, gas. Distribution systems were al reserves built up in the search for the outlook is for demand to rise ready installed to deliver manufac oil at a time when there were still even faster. tured gas, and users were equipped few opportunities to market gas. In to burn gas. Before the advance of Matter of incentives 1946, for example-when demand this inexpensive wonder fuel, other for natural gas was already clearly Basic to the matter of increasing heating fuels rapidly retreated. on the rise-there were still enough reserves, however, is the problem of The lower price of natural gas and proved reserves to meet production providing incentives for bearing the the need to keep pipelines flowing needs for at least 39 years. high costs and enormous risks of at capacity even allowed suppliers Large reserves continued to hang exploring for gas. In a very real to shoulder their way int0 the over the market for several years. sense, there have never been many market for low-value boiler fuel. Even after reserves began nosing incentives to stimulate production By the midfifties, almost every downward, putting upward pres of natural gas-and certainly not major population center was con sure on prices, there was little con any long-term incentives. nected with oil fields in the South cern over the incentives to look for , Based originally on what was west. And where as late as the start new reserves. By the time the issue until very recent years a fairly low of the 1950's at least four out of of incentives was raised, the gas in- I value byproduct of the oil industry, ten of the nation's gas users re- dustry was caught in a cost-price natural gas did not emerge as a ma jor industry in its own right until pipelines were laid to connect some of the world's largest oil fields in . .. but reserves taper oft, the Southwest with large fuel mar dropping relative to production kets in the North and Northeast. Until transmission lines were TRILLION CUBIC FEET YEARS built, the enormous pools of gas 300 ------______45 being discovered in the oil fields of Texas, Oklahoma, Louisiana, and later New Mexico were isolated from large markets. Early in the development of these fields, gas was 200 - often flared or vented to the atmo - 30 sphere simply to get rid of it. Always a highly desirable fuel if it could be made available, some gas was sold to local utilities. But - 20 because of its great abundance and 100 - the small markets served, prices were cheap, providing far more in centive for people in the Southwest ------CRiTiCALLEVEL------10 to consume gas than to produce it. Large quantities went, for example, into such low-value uses as the manufacturing of carbon black. O-rl----'I-----rl----,lr---~I----~I o And residential and commercial 1946 1951 1956 1961 1966 1971 users in many local markets re SOURCE: American Gas Association ceived unmetered service.

2 - squeeze that made interest in ex serves in the continental United ket conditions totally unrelated to ploratory drilling hard to arouse. States are rapidly approaching that the demand for natural gas. level. From a total 14.6 times Other problems bearing on the Cost-price squeeze greater than production in 1968, re rate of withdrawal grow out of the Costs of drilling oil and gas wells in serves fell to 11.9 times production need to protect the rights of others 1971, for example, averaged 85 per in 1970. to a share in the discovery. Be cent higher than in 1956. But For more than two decades after cause a productive field is ordinar prices for natural gas were only 37 World War II, additions to reserves ily large enough to cross the land percent higher, and oil prices were usually exceeded the increases in of many owners, withdrawals must up only 17 percent. consumption. But although re be regulated to protect the interest ,The result was a significant de serves were rising, consumption of everyone with a property right clIne in drilling. By 1971, the num was growing fast enough to force a in the underground reservoir. ber of wells drilled had dropped to continuous decline in reserves rela Without regulation, a well on one less than half the number drilled in tive to the demands on them. And property might deplete the oil and 1956. And with all the pressure for since 1968, reserves have been ex gas under neighboring properties. th7 discovery of new reserves, only panding only about half as fast as And still other withdrawal prob a ~ttle more than half as many withdrawals, forcing reserve-to lems relate to holding back produc WIldcat wells were drilled in the production ratios in some areas be tion to keep wells from choking up search for new fields. low the 10-to-1Ievel. with sand. Often, when wells are , W~th exploration being pushed There are several reasons for as produced too fast, sand begins Into Increasingly difficult locations, signing crucial importance to a blocking off the flow, creating the ~osts are bound to increase still fur- 10-to-1 ratio. For one thing, there need for additional drilling either her. Average drilling costs reached is the problem of transporting gas. to reopen the well or to provide ~ record high of more than $19 a Pipelines are the only economical other wells that will allow with ,oot in 1971-48 percent more than means of moving gas to market, drawal at maximum flow. ~n ~961: But that included only the and most of the nation's gas is pro Tl1ese factors creating the need e a ~oll1.ng costs of the drilling op- duced thousands of miles from for a high reserve-to-production ratIon Itself. Not included were principal markets. To hold down ratio impact severely on the cost 1e aSIng ' and rental costs and the the cost of tying a field into the and availability of gas, complicat ~ost of searching for suitable drill nation's pipeline net, the field must ing the task of expanding reserves Ing sites. be large enough to ensure capacity by raising complex producer deci fl ~otally apart from matters of in- use of the new construction over sions to drill. Where producers are atIon, these costs relate to the the use life of the line. To spread more familiar with underlying for ?roblems of exploring and develop out this fixed overhead, the Gov mations and the drilling problems Ing reserves far from established ernment requires at least 12 years' to expect, they are better able to Pf roduction areas working in un- reserves before it will authorize ex control their exploration costs. The thanlili ,ar formations,' and running tension of lines into new areas. 34 wells drilled in Alaska in 1971, b e rIsks not only of finding no gas For another, there are the prob for example, cost about three , ut of not finding enough gas to lems of pacing the withdrawal of fourths as much as the 834 drilled JUstify development of a field. Such gas. Some of these result from the in New Mexico. cond't'I Ions have always placed complications of producing gas in Costs of bringing gas to market severet' lim'tI a t'IOns on t h e pro d uc- combination with oil. About a also discourage exploration in IOn of natural gas. And they be fourth of the nation's gas is pro- . areas far from pipelines. For pro ~ome more restrictive as an ever duced from oil wells, and its with ducers to realize a profit in areas arger proportion of the nation's drawal is governed by the rate newly developed, their markets ~as reserves are found at greater allowed for the production of oil. must be fairly close or their dis offePhths, in more remote areas, and Because the gas in such a well is coveries must be large enough to sore. often highly important to the pro justify laying a pipeline. is T~e severity of these restrictions duction of oil, providing the pres POInted up in the broadly ac sure that drives the flow to the Regulation of prices cepted need to maintain a high well, its production must be tied to With the costs of finding and pro ;:serve-to-production ratio. It is the production of oil. Although ducing natural gas rising along fl nerally believed that a smooth needs to increase oil production are with demand for this fuel, the ex frow of gas can be maintained only also mounting, gas flows from these pectation would be that prices f Om proved reserves large enough wells are still governed by consid should rise apace, creating incen or at least a ten-year supply. Re- erations of conservation and mar- tives to develop new reserves. That

nUs'tness Review I March 1973 3 prices have not kept up reflects a Drilling slows rapidly as prices come under regulation basic inconsistency. On the one hand, conventional public utility THOUSAND WELLS concepts have been used to regu- 60 late gas prices at the wellhead. On the other hand, gas production has TOTAL WELLS DRILLED characteristics that make it funda- 50- mentally different from transportation and distribution industries regulated as public utilities. Unlike public utilities, for ex ample where each producer oper 40- ates a~ more or less a monopolist selling a uniform service in a fairly risk-free environment, the gas pro duction industry is made up of many competing units-each faced with the peculiar risks associated with finding and developing re 20- serves. In pursuit of new discov EXPLORATORY WELLS eries these units are highly mobile, oper~ting wherever the possibility of a gas find may present itself. Once a productive gas property has been developed, its producer must sell in markets that include not only gas from other fields but O-.,------~,r------_.I------~,r- also other forms of fuel. And within 1940 1950 1960 1970 this' highly competitive framework, producers have broad latitudes in SOURCES: American Association of Petroleum Geologists American Petroleum Institute choosing the markets they may Oil & Gas Journal want to serve. They can sell their World Oil gas interstate or intrastate. Or they can withhold it from the fuel markets, selling it instead as an - input to the refining and petro cised no jurisdiction over the less, soon ran into difficulties in chemical industry. prices producers received. applying conventional concepts. These characteristics of a work With producers coming under Since regulated industries had . ably competitive industry are es regulation, the commission moved until tnen been monopolies servIng sentially out of phase with concepts to extend the same principle of particular markets, regulation waS used to regulate public utilities. price setting to their operations on an individual basis. But al And while these concepts are ap that had applied to pipeline com though no more than 30 large colD plicable enough to the transmis panies. Following lines laid down panies probably dominated the sion and distribution of natural in conventional utility regulation, production industry, there were gas (buyers of gas in the field are the commission tried to regulate some 4,500 companies producing usually far less competitive than field prices on the basis of the and selling gas across state lines sellers), they cannot be easily ex actual costs of production. Appar and all had to be regulated sep tended to production. ently, too little allowance was arately. Administratively, the taslt The problem dates from 1954, made either for the steep rises in was almost impossible. Applica when the Supreme Court required exploration costs or for the risks tions for rate increases were filed that the Federal Power Commis involved in exploratory wells. faster than they could be pro sion regulate wellhead prices of gas Since there were still large gas cessed, and an unmanageable sold interstate. The commission reserves in 1954, the matter of pro backlog built up. had long regulated the interstate viding incentives for producers to These difficulties were further movement and sale of natural gas. undertake exploration was not an complicated by challenges to ColD Until 1954, however, it had exer- . issue. The commission, neverthe- mission decisions in the courts. 4 -

Supplies in the Southwest

Although the rise in demand for natural gas Second, the high cost of transporting gas is bound to keep pushing exploration into to distant markets has helped attract users new areas, efforts to find new reserves will to these states. almost certainly continue in more developed Gas has been especially important in production areas-all of which have pools Texas, which produces over a third of the na that still go untapped. Some of the most tion's supply. Although the largest produc important are in the prolific Southwest. ing state, Texas has also been the biggest Together, Texas, Louisiana, Oklahoma, consumer, using about half the gas it pro and New Mexico accounted for about 85 duces. Probably 90 percent of the new percent of the nation's gas produced in 1971 reserves being developed in Texas are dedi and more than half the new wells drilled. cated to intrastate markets. It is the main But if the past is any guide, much of the feedstock to the state's chemical industry gas produced in these states will remain in its number-one manufacturing industry. the Southwest-and most of the production And as in the other three producing states from new reserves. of the Southwest, natural gas is used to fire Cheap fuel has been one of the essen almost all the electric generating plants. tial components of the region's economic As in the rest of the nation, however, the growth. The availability of gas to support southwestern states have begun to feel the development of these states has depended gas shortage. In anticipation of higher gas not only on their abundant reserves, how prices, electric utilities have begun plans for ever. Although these four states have about building nuclear plants and plants fired by 75 percent of the nation's gas reserves, they lignite. Other industries no longer able to have been able to use gas extensively for buy the amounts of gas they once did are their own development for two reasons. developing the capacity to substitute other First, federal regulation of field prices has fuels in times of peak demand for gas. As kept interstate prices low, allowing local prices of gas rise, some of these industries users to compete effectively for gas supplies. may convert to other fuels altogether. -

A.nd further confusion and delays producers escape regulation by under existing contracts. Many of :ere added as the courts struggled confining their operations to sales these contracts were written long o fit regulatory concepts to the in the smaller but usually better before gas was sold nationwide and realit'l~S of the industry. paying intrastate markets. reflected the lower cost of develop d Unlike typical utilities, gas pro ing gas fields in those years. A ofcer~ <:an enter or leave an area Regulatory changes higher ceiling was set for more re acbvItY-in this case a geo Seeking to reduce its backlog of cently discovered gas. To encour graphic area of explora'tion and de cases, the Federal Power Commis age exploration, the commission ~el~pment-as they please. Also, sion changed the focus of its reg tried to take the higher cost of 1nlike tyPical utilities, they can ulatory efforts in 1960, shifting newly found reserves into account ge~ve the market altogether if the attention from individual produc in setting this second price. dOl~g gets rough. And many have, ers to the industry as a whole. The It was believed when these two ~~c~ting gas to intrastate pipe- industry was divided into 23. major price levels were formulated that t s Instead of those selling be- production areas, with all the pro the pricing difference would even Ween states. ducers in an area allowed the same tually disappear as older reserves onThe commission has jurisdiction prices, regardless of differences in were depleted and more of the na st YOVer producers selling inter their individual costs. tion's supply was taken from newer gaat~. And since prices of interstate To improve incentives for explo wells. Few doubted that once the in: aVe lagged behind those in ration, the commission established huge reserves overhanging the c rastate markets (over which the two price ceilings for each area. market were eliminated, explora oUllnission has no control) , many A lower ceiling was set for gas sold tion would pick up again. And by :eUs• Iness Review I March 1973 5 retaining the concept of prices that centives needed to maintain an fairly predictable income. As a re reflected the cost of finding and adequate level of reserves. There sult, equity and loan capital has producing gas, the commission be has, in fact, been a general feeling been comparatively easy for them lieved it could carry out its inten in the industry that area pricing to raise. tions of holding prices just high added to the uncertainties of ex Gas producers, on the other enough to encourage the produc ploration, making new wells harder hand, face boom or bust condi tion needed to maintain adequate than ever to finance. tions, the difference depending on gas supplies. Much of this uncertainty is at chance discoveries of new reserves. Reserves in excess of those tributed to continued delays in Nine out of ten wells are dry holes. needed to support adequate pro regulatory decisions. The change And even among wells that are duction might continue to drop. has still left the industry with long productive, the rates of flow vary But the new pricing system would waits for regulatory decisions. widely, depending on the size of ensure a limit beyond which re Once a price has been decided on, the pool and the myriad of other serves would not fall. And when it is often challenged in the courts. circumstances that can affect pro this equilibrium between produc Appeals to the court stretch out duction. To these uncertainties of tion and reserves was achieved, gas the decision process still further discovery and worth of the prop production would be much easier sometimes for years. And while erty are added, of course, the prob to regulate. producers wait for a final deter lems of dependence on transmis But the problem was more seri mination of the prices they can re sion facilities and the possibility of ous than anyone imagined in 1960. ceive, contested funds from the disappointments in a system of When area pricing was adopted, sale of gas are held back from administered prices. the effective life of the nation's gas use in further exploration. The result has been that produc reserves had already been cut in ers must look to gas sales for most Need for risk capital half since 1946. By 1968-the year of their risk capitaL Banks will the possibility of actual shortages The need to rely on internally make loans to develop reserves al first became generally recognized generated funds for exploration ready discovered. But exploration the effective life of reserves had has presented one of the most per is too risky. And few other sources contracted by a fourth since the sistent problems in the develop of funds are available to producers. initiation of area pricing. ment of a workable approach to the Some have been fairly successful Although area pricing eased regulation of natural gas produc in interesting individual investors some of the administrative prob tion. Utilities ordinarily have in their ventures. This approach- lems ensnarling the industry, it did highly predictable costs, and regu use of what are called drilling not succeed in providing the in- lation itself usually ensures them a funds-depends on a producer'S ability to organize a group of indi vidual investors with incomes in a tax bracket that enc0urages thelll Average wellhead price shows only moderate rise to share the risk of an exploratory well. Even some very large produc CENTS PER THOUSAND CUBIC FEET ers have undertaken such arrange 30 ments, offering investors the benefit of their experience and equipment. The approach has not been altogether satisfactory, how 20- ever, largely because the avail- . ability of investment capital of thiS I kind is highly sensitive to changes 10- in tax laws and credit conditions. Pipelines and utility companies have also provided some capital for exploration. Some of this has o , been through loans. Most, how- I I I I I ever, has come through prepay 1920 1930 1940 1950 1960 1970 ments for production. Utilities, fo1' I SOURCE: u.s. Bureau ot Mines example, pledged advance pay- . ments totaling an estimated $1 bll lion last year. 6 - Some utilities have undertaken impact on the profitability of drill face similar problems in building exploration on their own, and ing-and, therefore, the ease of fi up crews and equipment to handle ?thers have started participating nancing new wells. the increase in exploration ashore. ~n exploration with producers hold Also, until recently, offshore Having fallen so far behind in Ing exploratory rights that seem lease sales-essential to further ex the development of reserves, the prOmising. But since participation ploration of the continental shelf industry will probably not be able of transmission and distribution were not held often. And when to close the gap between supply companies affects the cost of their they were, final leasing was some and demand. The only hope is that operations and, therefore, the cost times delayed by considerations of incentives can be created to help of .t~e gas they sell, this means of environmental impact and state narrow the gap and prevent dis raIs~ng exploration capital is also federal conflicts. locations from massive shifts to subject to regulation by the Fed Although drilling picked up other fuels. The recent increase in eral Power Commission. some last year, the lack of marked exploration could well be merely a improvement in the number of New approaches response to the strengthening in wells drilled probably reflected the prices of intrastate gas. The Federal Power Commission lack of offshore lease sales. Off One way to improve the incen recently announced that prices for shore wells are particularly im tives for finding new gas-barring new gas could move above the area portant to the development of outright deregulation-might be to ceiling when the sale was in the reserves committed to interstate shift the basis of regulation from pUblic interest. This move to make markets. Since many promising current costs of producing gas to In.terstate gas more competitive offshore areas fall within federal the cost of replacing it. But what w~th gas sold intrastate is in line rather than state jurisdictions, any ever approach is taken, higher wIth the commission's continuing gas they produce must be available prices would most likely be in the ~earch for flexibility in its response for sale across state lines. public interest. They would not o the energy shortage. But here, too, there are signs only help stimulate the search for 1 The commission has already al that the situation might be im new reserves but also help dampen spoWed . considerable deviations in proving. To increase drilling oppor demand and encourage more eco eClal circumstances. Where extra tunities offshore, the Government nomical use of the gas consumed, production has been needed to fill has started holding lease sales such as better allocation of its ~limporary gaps in interstate sup more often. A large sale of leases uses. Higher prices would also be des, for example, intrastate pro- off Louisiana was held late last in line with the need to encourage . ucers have been allowed into the Int . year and drew record bids totaling development of substitutes for nat erstate markets at higher than more than $1.5 billion. Hearings ural gas. This need is bound to in ~e~ prices without committing are being held this year on the crease in the years immediately Ii elr reserves to interstate pipe- possible sale of additional leases ahead . .nes. The commission has also con off Louisiana and Te:x:ai. Some, taking issue with the need SIdered allowing higher prices for for higher prices and perhaps fear gas from older fields that might A look at the future ing that prices might get out of otherwise be abandoned as un The outlook is for continued im hand if regulation was eased, have P!ofitable. And thought has been provements in drilling in 1973- advocated stronger regulation of ~vnn to special prices for gas from which could be a pivotal year. the industry. They would like to d e ~ with unusually costly pro- With some easing in price regula see the Federal Power Commission Uctlon problems. tions, drilling onshore is expected given the means of assessing re th There is some belief that al to pick up still more and, with the serves itself. As things stand now, in~ugh such special allowances are greater availability of leases, ex the commission must rely on the me e~ded only to help supply im ploration offshore could pick up industry for an estimate of the re thediat~ interstate market demand, considerably. serves available. If the commission If nught help spur exploration. Shipyards building offshore rigs, could make independent judg b eguIatory decisions have not for example, are booming. Al ments, they say, it would be in a a~en ~he only Government policies though many of these rigs are in better position to analyze and ad m ectIng decisions to search for tended for use overseas, many will minister interstate prices. ono~e gas. Considerable influence be used off the United States. And Others would like to see regula teIncentive to explore can be ex drilling contractors report that tion strengthened by extending ~~e d, for example, through tax skilled rig workers are becoming the commission's price-fixing au t· atment. Reduction of the deple hard to find. Producers and drill thority to include intrastate mar IOn allowance has had a severe ing contractors are beginning to kets. And still others would like

nUs'lness Review I March 1973 7 to see the Government undertake delays in developing a practical courts. For regulation to be truly exploration on its own. means of manufacturing gas on a in the public interest, these deci Just what changes are made in large scale be ignored. sions will have to be aimed at re the nation's efforts to regulate the Government decisions, however ducing some of the costs, delays, production and pricing of natural -at state and federal levels-will be and confusion that have stymied gas will depend on several factors. crucial to the matter of incentives exploration. The cost of imported gas cannot to search for new reserves, as will be ignored. Nor can the costs and decisions handed down by the -Stephen L. Gardner

- New member bank The Texas National Bank of Baytown, Baytown, Texas, located in the territory served by the Houston Branch of the Federal Reserve Bank of Dallas, opened for business February 1, 1973, as a conversion of the Bank of Baytown, Baytown, Texas. The new member of the Federal Reserve System has capital of $200 000 surplus of $200,000, and undivided profits of $170,275. The officers are: ' , Fred Hartman, Chairman of the Board and President; Stan Wallace, Executive Vice President; Harry F. Massey, Vice President; Linda Otis, Vice President and Cashier; and Linda Boyd, Assistant Cashier.

New par banks The Bank of the West, Lubbock, Texas, an insured nonmember bank located in the territory served by the Head Office of the Federal Reserve Bank of Dallas was added to the Par List on its opening date, February 9, 1973. The officers' are: Willard Paine, President, and Billy J. York, Vice President and Cashier.

The Dickinson State Bank, Dickinson, Texas, an insured nonmember bank located in the territory served by the Houston Branch of the Federal Reserve Bank of Dallas, was added to the Par. List on its opening date, February 12, 1973. The officers are: John C. Echols, Chall'man of the Board and President· John T Agregard, Executive Vice President; and Mrs. Martha M. Engleman, Cashier..

The Forum Bank, Arlington, Texas, an insured nonmember bank located in the territory served by the Head Office of the Federal Reserve Bank of Dallas was added to the Pa~ List on ~t~ opening date, February 20, 1973. The officers 'are: T. E. Jaeb, PresIdent; WIllIam P. Dunaway, Executive Vice President· and Mrs. Lou Luday, Cashier. '

8 Federal Reserve Bank of Dallas March 1973

Statistical Supplement to the Business Review -

Total credit at weekly reporting theless, the unemployment rate dustry groups reported declines in banks in the Eleventh District ex rose to 4.1 percent from 4.0 per output, the largest being in tex Panded rapidly in the four weeks cent in December, as expansion in tile mill products, transportation ~nded February 21, mainly reflect the labor force again outpaced equipment, and leather and leather lIng ~ sharp increase in total loans. growth in employment. products. All industries reported n lme with the credit expansion, Both major industrial sectors gains over a year before. total deposits also rose sharply. manufacturing and nonmanufac Mining rose 0.4 percent in J anu The strong demand for loans turing-shared in the January em ary, largely on the strength of sig Was broad based, with all major ployment rise, each advancing 0.9 nificant advances in the output of tYpes of borrowers increasing their percent. Employment in nondur natural gas and natural gas liquids Use of bank credit lines consider able manufacturing increased 1. 5 and in spite of a slight decline in ~bly more than at the same time percent, while employment in the crude oil production. Utilities also lU other recent years. Business manufacture of durables rose more fell in January, due to a decline in Iboa~s were especially vigorous, as moderately. In the nonmanufac the distribution of electricity. usmesses continued to borrow turing industries, strong gains heavily to finance inventory accu were reported in construction, Department store sales in the lUulation. With the sustained trade, transportation and public Eleventh District were 13 percent strength in housing starts and utilities, and services. Only gov- greater in the four weeks ended lonstruction activity, real estate , ernment posted a decline. All in- February 24 than in the corre Oans were notably stronger. Con dustry groups showed employment sponding period a year earlier.Cu S~lUer loans also continued to gains over January 1972 except mulative sales through that date flSe! r~flecting growing consumer mining, down 0.1 percent. were 9 percent higher than in the oPtImIsm and a greater willing comparable period a year before. ness to spend for automobiles and Registrations of new passenger other durable goods. automobiles in Dallas, Fort Worth, Growth in cattle numbers in the To accommodate the heavy loan Houston, and San Antonio dropped five states of the Eleventh District delUand, the banks liquidated some 14 percent in January. This de continued to outpace growth in of their investments in Govern crease was primarily seasonal in the nation in 1972. The inventory tnent securities. Holdings ~f other nature. Total registrations in the of all cattle on farms and ranches seCurities rose, however. four centers were 29 percent in these states was up 10 percent Dep.osit inflows were consider greater than in January 1972. on January lover a year before, a bly hIgher, as sharp gains were compared with 4 percent for the reCorded in both demand deposits The seasonally adjusted Texas in nation. Texas remained the num ~d time and savings deposits. A dustrial production index ad ber-one cattle state with an inven bZnable increase in large negotiable vanced in January to a level 8.7 tory of 15 million head at the start 's outstanding accounted for percent above a year earlier. Both of this year, 14 percent more than f tnuch of the advance in total time manufacturing and mining output a year earlier. Arizona's inventory I and savings deposits. With the am rose over December, while utilities was up 10 percent, and New Mexi ble inflow of deposit funds, these dropped slightly. co's was up 7 percent. Oklahoma ranks were able to reduce substan In manufacturing, total produc and Louisiana registered slight dlally ~heir borrowings from non tion of both durables and nondur gains. Indications are for even I :eeposlt sources-particularly in the ables increased over a month greater increases in the future, as Urodollar market. . before. The largest gain was in beef cow replacements increased the output of electrical machinery, nearly 13 percent last year in the I Seasonally adjusted total employ up 3.6 percent. Petroleum refin District states. tnent in the five southwestern ing, fabricated metals, apparel, Cattle feeding also is maintain ~tates continued its upward trend and nonelectrical machinery also ing good growth. Texas reported In January, rising to a level 3.3 showed significant production in 2.2 million head on feed at the Percent above a year before. Never- creases. Nevertheless, several in- (Continued on back page) CONDITION STATISTICS OF WEEKLY REPORTING COMMERCIAL BANKS Eleventh Federal Reserve District (Thousa nd dollars)

Feb. 21, Jan. 24, Feb. 23, Feb. 21, Jan. 24, Fe b. 23, ASSETS 1973 1973 1972 LI ABILITIES 1973 1973 1972

Federal fund s sold and securities purcha sed Total deposits ••••••••• , .••••.. • •.. •...•••. .• 13,773,605 13,340,050 12,024,421 under agreements to resell .. •. . •...... ••••. 1,328,422 1,016,549 1,222,013 ---- Other loans and discounts, gron ...... 8,965,011 8,772,762 7,350,532 Total demand deposits . . ••...... 7,3B5,874 7,106,259 6,625,982 Individuals, partnerships, and corporations .. .. 4,893,952 4,960,061 4,534,081 Commercial and industrial loans ...... 3,977,578 3,886,326 3,411,347 States and political subdivisions ...... 729,749 52 5,796 429,591 Agricultural loans, excluding CCC U.S. Governm ent ...... 269,413 248,491 161,153 certiAcates of interest ...... 252,407 245,389 169,161 Banks in th e Unite d States ...... 1,344,994 1,211,951 1,364,476 Loon s to brokers and dealers for foreign: purcha sing or carrying : Gove rnm ents, offlcial institutions, central U.S. Government securities ...... 1,167 1,329 1,125 banks, and international institutions ...... 5,677 3,815 3,335 Other se curiti es . •.• ...... 73,691 79,371 51,142 Commercial banks •••• ••...••••••.••••. 41,383 39,864 41,803 Other loans for purcha sing or carryin g: Certifled and offlcers' ch ecks, etc .. . .•..•.... 100,706 116,281 91,543 U.S. Government securities ...... • 6,615 7,119 4,650 Total tim e and savings deposits ...... 6,387,73 1 6,233,791 5,398,439 Other sec urities ...... 507,203 504,608 445,404 Individuals, partnerships, and corporations: Loans to nonbank flnancial institutions: Savings de posits ...... 1,193,815 1,199,057 1,122,498 Sales fln ance, personal flnance, factors, Oth~r time de posits ...... 3,274,666 3,220,098 2,781,515 and oth er busin ess credit companies ...... 174,777 137,275 121,278 States and political subdivisions ...... 1,772,267 1,665,129 1,365,105 Other ...... 677,262 685,990 477,793 U.S. Governm ent (including postal savings) •••• 30,128 25,560 10,042 Real estate loons ...... 1,252,785 1,226,186 912,42 1 Banks in the United States...... 94,685 111,727 94,879 Loan s to domestic comm ercial banks •...... 25,172 21,579 20,911 Foreign: Loans to foreign banks•••• . • ...... •. 19,936 13,799 36,487 Governm ents, ofAcial in stitutions, central Consume r instalment loans ...... 973,663 966,303 820,323 banks, and international institutions ••.... 11,050 11 ,100 23,300 loans to foreign governm ents, offlcial Commercial banks ...... •... 11,120 1,120 1,100 instit utions, central banks, and international Federal funds purchase d and securiti es sold institutions ...... •...... • under agreements to repurchase • •• • ••. • .• . .•• 2,238,293 2,195,894 1,789,179 Other loans•••...... •...... 1,022,755° 997,488° 878,490° Other lie bilities for borrowed money . . . • .... • •.• 93,516 109,763 39,703 Total investments ...... •.... 4,031,402 4,077,891 3,372,420 Other liabilities •••••.•.•••..•••.•••..•.•.••.. 474,140 457,568 397,116 ------Reserves on loons ••••••.•••••• •••••.••••••••• 159,451 158,670 137,138 Total U.S. Government securities ...... 1,037,297 1,096,331 1,091,917 Reserves on securities •••••.•••..••••• • ..•••• • • 16,768 17,763 22,578 Treasury bills ...... 237,365 262,634 124,750 Total capital accounts ..•• • ...... •..•... 1,159,718 1,154,726 1,091,407 Treasury certiRcates of indebtedness ...... Trea sury notes and U.S. Governm ent ° ° ° TOTAL LIABIlITIES, RESERVES, AND bonds maturing: CAPITAL ACCOUNTS ...... 17,915,491 17,434,434 ~ 501,5£ Within 1 year • ...... 152,697 174,104 193,261 1 year to 5 years •••• ...... • ...... 479,356 461,349 586,355 After 5 years ...... 167,879 198,244 187,551 Obligations of states and political subdivisions: Tax warrants and short-term notes and bills••• 267,465 258,203 69,314 All other ...... 2,443,668 2,437,059 2,017,011 Other bonds, corporate stocks, and securities: Certiflcates representing participations in federal agency loons..•...... • 13,503 13,603 16,640 All oth er {including corporate stocks) • • ••... .. 269,469 272,695 177,538 DEMAND AND TIME DEPOSITS OF MEMBER BANKS Cash items in process of collection ••••...... •.• 1,736,762 1,453,649 1,490,549 Re se rves with Federal Reserve Bank •••.••...... 552,131 912,442 929,926 Currency and coin • •...... •...... •• .. . .. 112,827 116,415 98,105 Eleventh Federal Reserve District Balances with banks in the United States ...... 461,540 387,693 470,981 Balances with banks in foreign countries .. . •.•••.. 13,868 14,944 12,475 (Averages 01 dally ligures. Million dollars ) Other a ssets (including investments in subsidiaries not consolidated) ••..• •.. • • . • •• .• • .• ••••. • • 713,528 682,089 554,541 DEMAND DEPOSITS TIME DEPOSITS TOTAL ASSETS ...... 17,915,491 17,434,434 - ~ U.S. Dote Total Adjusted' Government Total Savings 1971 . January .... 11,532 7,880 250 9,038 2,207 - 1972: January .... 12,313 8,510 300 10,607 2,528 February . • • 11 ,983 8,382 281 10,864 2,552 March • • • •• 12,118 8,515 300 10,978 2,430 April ...... 12,470 8,696 314 10,938 2,640 May ••• ••• 12,268 8,530 384 11,075 2,660 June .. •• . . 12,320 8,553 280 11,233 2,688 CONDITION STATISTICS OF ALL MEMBER BANKS July ...... 12,529 8,694 289 11,304 2,714 August ••• . . 12,420 8,824 226 11,441 2,717 September. 12,619 8,933 254 11,492 2,744 Eleventh Federal Reserve District October • • • 12,866 9,034 264 11,618 2,770 November •• 12,844 9,321 222 12,009 2,786 (Million dollars) December • . 13,439 9,688 289 12,261 2,812 1973. January .... 13,636 9,802 317 12,501 2,815 Jon. 31, Dec. 27, Jan. 26, Item 1973 1972 1972 1. Othe r than those 01 U.S. Gove rnment and domestic commercial banks,- les5 c ash Items in process 01 collection ASSETS loans and discounts, gross •. • ..•.. .•• ..... 17,425 17,475 14,748 U.S. Governm ent obligations ...... •.....• 2,562 2,439 2,434 Other securities ..•• ...•...... •...... •• 5,793 5,548 4,636 Reserves with Federal Res erve Bank •..•.. .• 1,484 1,449 1,708 Cash in vault ••••...... •... 315 358 303 Balances with banks in the United States .. .. 1,360 1,550 1,257 Balances with banks in foreig n countriese .. .. 16 14 14 Cash items in process of coll ection • • •• ...... 1,753 1,973 1,525 RESERVE POSITIONS OF MEMBER BANKS Other a ssets e ...... 1,345 1,356 860 TOTAL ASSETSe ...... 32,053 32,162 27,485 Eleventh Federal Reserve District L1A8Il1TIES AND CAPITAL ACCOUNTS (Averages of dally figures. Thousand dollars) Demand de posits of banks ••••..•..•..... 1,729 1,872 1,721 Other demand deposits •...... 11,749 12,088 10,071 Tim e deposits ...... •• ...... 12,585 12,3 37 10,689 5 weeks ended 4 weeks en ded 4 weeks end ed Item Fe b. 7, 1973 Jon. 3, 1973 Feb. 2, 1~ Total de posits ...... 26,063 26,297 22,481 Borrowings •...... 2,731 2,610 1,998 Total reserves held ...... •.•.. 1,770,428 1,712,981 1,847,435 Other liabilitiese ••.•...... 1,053 1,046 1,088 6 e With Federal Reserve Bank •• . •.. 1,472,926 1,411,830 1,570,75 Total capital accounts .... , ...... 2,206 2,209 1,918 Currency and coin •....• .••. ... 297,502 301,151 276,67 9 Required reserves • . • ...... • . ...• 1,74.8,905 1,750,928 1,802,05~ TOTAL LIABILITIES AND CAPITAL Excess reserves • •...... 21,523 ACCOUNTSe .••.....••..••...... 32,053 32,162 27,485 -37,947 45'~~8 Borrowings .•...... ••.•.... 61,299 81 ,986 Free reserves • •. ••. .. .• • • . ••. ... - 39,776 - 119,933 44,856 e-Estlmated ------BANK DEBITS, END·OF·MONTH DEPOSITS, AND DEPOSIT TURNOVER SMSA's in Eleventh Federal Reserve District -(Dollar amounts In thousands, seasonally adjusted) DE81TS TO DEMAND DEPOSIT ACCOUNTS' DEMAND DEPOSITS '

January Porcent chango from Annual rote of turnover 1973 Standard metropolitan (Annual·rate December January January 31, January December January statistical are a basis ) 1972 1972 1973 1973 1972 1972

ARIZONA, Tucson •• ...... • . ....••. . • . .•.. •...... $ I 0,939,680 -1% 28% $325,596 33.9 37.5 28.8 LO UISIANA, Monroe ...... 4,61 1,468 6 28 107,465 42.9 40.0 36.3 Shrevoport . •.....•...••...••.•...... •••.•. 14,734,464 -2 32 300,759 48.0 49.6 40.5 NEW MEXICO, Rosw ell ' . •• • ••...... ••. • ... • .. ••••. .• ••••• 1,065,492 4 5 49,946 22.4 22.7 23.3 2,768,640 -2 16 133,122 21.1 22.2 22.3 8,118,492 -3 20 206,705 38.2 40.8 38.6 TEXAS, ~~~2.f~.: :: : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : 13,972,548 15 -3 455,635 30.0 27.1 39.4 Beaumont-Port Arthur-Orange ...... •...... 7,641,660 9 6 274,895 27.1 25.2 27.2 Brown svill e-Harlingen-San Benito .. . .. •...... •. 2,742,804 7 15 113,303 24.8 24.2 27.1 Bryan-College Station ...... •...... •.•. 1,318,860 2 13 56,038 23.2 23.7 24.8 7,751,316 - 3 7 283,528 27.5 28.2 26.4 646,620 15 32 37,650 17.7 15.8 14.6 ~~;I~~~~~~~:.': I: : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : 152,410,308 -15 8 2,884,227 52.3 62.8 56.0 10,176,924 2 14 306,945 32.9 32.8 32.7 ~~~oW~;tJ;: :: : : : : : : :: ::: : :::: : : :::::::: ::: : : : : : : 31,262,244 8 14 838,555 37.6 35.2 37.2 Galveston-Texas City ...... 3,515,436 8 12 128,706 27.8 26.3 25.4 159,006,768 6 25 3,321,755 48.6 46.7 44.2 2,340,312 13 27 112,945 20.8 18.6 18.9 1,335,288 12 11 57,610 23.1 21.8 26.1 ~lm: ~~~~~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ 6,137,760 13 15 210,531 29.9 27.9 30.8 ;;; ; ; ;; ; ; ; ; 19.9 McAll en· Pharr· Edinburg ....• ••..•••••...... ••...... 2,842,248 3 9 156,162 18.5 18.8 2,327,700 -I 9 161,380 14.0 14.8 14.6 1,882,932 -3 6 100,580 17.4 17.1 18.3 1,832,172 6 18 85,217 22.1 21.7 19.8 24,529,860 o 9 911,246 27.2 28.0 30.0 iii iii iii iii iii iii iii iii iii iii i 1,311,840 4 8 80,607 16.5 16.4 17.9 f~~~~~1~~{L} ; 18.2 20.2 Texarkana (Texas- Arkansas) ...... 1,896,468 19 8 89,395 21.0 3,547,680 -3 41 122,930 28.6 30.5 22.2 4,53 1,908 17 19 153,156 29.6 25.7 28.9 ~~ift~: ~~Iis:. :.: : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : 2,982,456 -6 4 139,741 21.7 23.8 22.5 Tota l_30 conters. . • . . • . . . • • . . . . . • • • . • • • • . • • • • • • • ...... • $490,182,348 -2% 15% $12,206,330 40.2 42.4 40.0

}----- CD eposlts------of Individuals, partnerships, and corporations------and of states and political subdivisions . Ounty basis

CONDITION OF THE FEDERAL RESERV E BANK OF DALLAS ...... (ThOusand dollars) BUILDING PERMITS VALUATION (Dollar amounts in thousands) Feb. 21, Jan. 24, Feb. 23, __ Item I 1973 1973 1972 Percent change January 1973 from TOlal gold c 'fl NUMBER loan t erh cate reserves •...... • .. 13,535 559,203 390,426 0 Othe' 1 member banks •.••.•...•.•••. . .• • • 15,885 51,250 200 January January December January ans 1972 1972 Feder r ••••...... • • ...... ~ .. o o o Area 1973 1973 U.S GO agency obligations...... 59,3 11 57,258 33,706 Tot~1 Ove~nment securities •••..•• ...... 3,193,956 3,076,375 3,145,403 ARIZO NA Membearn,ng asse ts ...... 3,269,152 3,184,883 3,179,309 503 $25,280 135% 40% Fede et bank reserve deposi ts ...... •...... 1,123,724 1,476,419 1,612,124 Tucson . ... .• ...•.. • ...... ~eserve notes in actual circulation . .. .. 2,221,779 2,236,469 2,081,315 LOUISIANA 79 2,014 173 42 Monroe-West Monroe .. ..•. . 760 426 Shreveport ...... 404 19,531 TEXAS 48 5,046 599 723 Abilene • • • ••..•••••• . •••.. 115 214 Amarillo • . •...... •.• • ... 109 7,066 Austin ...... 417 15,404 -28 -9 120 3,209 -34 147 VALUE OF CONSTRUCTIO N CONTRACTS Beaumont •.. . •.•. . . . •.... . 70 Brownsville ...... •. ••. . ... 90 1,073 -61 (Million dollars) Corpus Christi ...... 280 8,039 126 82 33,144 -94 o Dallas ••••.••• •··•··••·•· . 1,279 ...... Denison . ....•...... 13 620 605 93 497 11,137 2 -60 January December November January EI Paso •••••• ••• .. • · .. • • .. 7,280 -16 17 1972 Fort Worth • • .•.••.. •••• • ·· 285 ~rea and type 1973 1972 1972 488 -82 95 Galveston •.. ... ·.··•··•· · . 50 FIVe Houston ...... •. . •. . ... 2,270 72,238 -12 89 57 489 17 -68 I ST1T~~,THWESTERN 845r laredo • • ...... ••.. .•... • . R. · ,'...... 945 874 775 Lubbock •• . ••••••.•••..••• 141 7,179 57 137 s d 416r 100 -52 No~ e~toal building...... • 455 392 445 Mid land ...... ···•· .... · . 62 785 Nonbe~;d?ntial building . • • • . • 380 324 183 222r 74 1,209 o 69 207 O dessa •...... • ·· ·· • ·· ·· . UNITE U, ding construction.. .. • . 110 157 148 Port Arthur •• ••••. ... • •.•.• 52 488 22 45 1,454 154 140 STATES...... 6,795 6,464 7,248 5,977r San Angelo •••••• •• .• •• ••.. 68 r R.s '~ 2,649r 1,300 20,250 37 76 1 No~ . ~tial building. . . . • . • . . 3,195 3,120 3,663 San Antonio .. • .•...... NOnl,eSOd?ntial building. • • •• • 2,420 2,212 2,184 1,723r Sherman ...... 31 450 26 -10 5 -52 ~tng construction ...... 1,180 1, 132 1,402 1,605r Texarkana . • •...... • 42 294 Waco ...... 17 1 6,140 -4 341 1. Arl Wichita Fa ll s ...... 59 1,872 10 114 r--Fle zOI oa, louisiana, New Mexico, Oklahoma, and Texas NOT v Sed 8,501 $252,179 21% 41% I SO U ~ : De tails may not add to totals because of rou ndi ng. Total-26 cities ...... •.... CE : F. W. Dodge Division, McGraw-Hili Information Systems Company 1 [

WINTER WHEAT INDUSTRIAL PRODUCTION (Seasonally adjusted. Indexes, 1967 = 100) ACREAGE SEEDED PRODUCTION (Thousa nd acres) (Thousand bushels) ... January Dece mb e r Novemb er January Crop Crop Crop Crop Crop Crop Area and type of index 1973p 1972 1972 1972 of of of of of of Area 1973 1972 1971 1973' 1972 1971 TEXAS Total industrial production ..••.. 134.3 133.9 134.0r 123.6r Arizona •••• ••••• 208 189 189 13,104 11,390 11,764 Manufacturing •••.••.•. • ••••. • . 137.9 137.3 136.4r 127.2 louisiana •••••.. 60 75r 75r 720 690 805r Durabl••. •••••••••••..•....• 149.0 148.2 150.3 137.2 New Mexico • .• •• 390 378 347 5,850 4,335 3,840r Nondurable • .•.•..•••••••.•.• 129.9 129.4 126.3r 119.9 Oklahoma ...... 6,000 5,700r 5,050r 126,000 89,700 72,OOOr Mining ••• • •••••..• •.. •...• •• . • 119.6 119.2 121.5r 109.2 r Texas ••••.•••.• 4,400 4,050r 3,512 70,400 44,000 31,416 Utilities ••• •• . • • •.•.•••.•..••.• 157.5 158.6 160.0r 145.8 UNITED STATES Total ...... 11,058 10,392r 9,173r 216,074 150,115 119,825r Total industrial production ..•.•. 119.8 119.2 118.5r 108.7r United States .. 42,793 42,247r 38,060r 1,277,848 1,185,890 1,144,164r Manufacturing • •.•••• .• ••• ..• .. 119.0 118.2 117.4r 107.1 r Durable ..•.....• •. ..•... •. .• 114.5 113.8 112.3r 100.4r 116.8r 1. Indicated December 1.1972 Nondurob/o • •••.•...•..••...• 125.5 124.6 124.6 Mining •• • ••. .•••. •••• •• •. •...• 108.3 109.2 110.5r 107.3r r-Revlsed Utilities ....•...... •.... • ... . 147.3 147.8 148.7r 137.4 SOURCE: U.S . Department of Agriculture p-Prellmlnary r- Revised SOURCES: Board of Governors of the Federal Reserve System Federal Reserve Bank of Dallas

LABOR FORCE, EMPLOYMENT, AND UNEMPLOYMENT Five Southwestern States' (Seasonally adjusted) DAILY AVERAGE PRODUCTION OF CRUDE OIL

Percent change (Thousand barrels) Thousands of persons Jan. 1973 from January December January Dec. Jan. Percent change fr-~ 1973p 1972 1972r 1972 1972 Item January December January December January Area 1973 1972 1972r 1972 1972 Civilian 10 bar force ••••••• •• 8,801.0 8,719.3 8,516.5 0.9% 3.3% 8,444.3 8,374.3 8,135.5 .8 3.8 ------Total employment ...... • .... FOUR SOUTHWESTERN 356.7 345.0 381.0 3.4 -6.4 Total unemployment • •••••••• STATES . •...... 6,756.5 6,877.6 6,547.8 - 1.8% 3.2% Unemployment rote ••••••••• 4.1% 4.0% 4.5% '.1 ' -.4 louisiana •• • ..••.•...•• . . 2,400.9 2,529.5 2,542.4 -5.1 _5.6 Total nonagricultural wage New Mexico •.••••.•..... 295.0 295.9 310.5 - .3 _5.0 and salary employment • • •• 6,940.5 6,881.8 6,610.0 .9 5.0 Oklahoma • •...... 517.8 534.9 570.0 -3.2 _9.2 Texas •••..•••••••••• • .• 3,542.8 3,517.3 3,214.9 .7 10.2 Manufacturing •••• .. ...• . 1,221.8 1,211.5 1,156.6 .9 5.6 20.1 Durable •••• ••• , • •• •••• 669.8 667.7 625.5 .3 7.1 Gulf Coast •• ...... 723.5 726.4 602.6 -.4 West Texas .•••.••.... 1,764.7 8.3 Nondurable •..•..... •• 552.0 543.8 531.1 1.5 3.9 1,739.6 1,629.1 1.4 East Texas (proper) ..... 245.7 240.4 178.7 2.2 37.5 Nonmanufacturing •••••••• 5,718.7 5,670.3 5,453.4 .9 4.9 Panhandle ••.•. ••...... 63.8 65.9 69.2 -3.2 _7.8 Mining ••• •• •••••••• ••• 231.8 230.1 232.1 .7 -.1 Rest of state ••• .•••.. .. 745.1 745.0 735.3 .0 1.3 Construction .•••.••.••• 475.1 466.1 434.4 1.9 9.4 UNITED STATES •...... •.... 9,359.3 9,467.3 9,114.9 2.7% Transportation and - 1.1% public utilities ••. ••.•• 473.1 467.9 458.1 1.1 3.3 ------Trade ...... • 1,647.2 1,622.9 1,562.2 1.5 5.4 r-Revlsed Finance •••.•...•••••.. 371.2 369.5 346.1 .5 7.3 SOURCES: American Pe troleum Institute Service •••••.•••.• •..• 1,135.3 1,123.5 1,081.9 1.1 4.9 U.S. Bureau of Mines Government •• • • ••••••• 1,385.0 1,390.3 1,338.6 -.4% 3.5% Federal Reserve Bank of Dall as

1. Arizona, Louisiana, New Mexico, Oklahoma, and Texas 2. Actual ohange p-Prellmlnary r-Revlsed NOTE: Details may not add to totals because of rounding. SOURCES: State employment agencies Federal Reserve Bank of Dallas (seasonal adjustment)

start of this year, an increase of dex of prices received by Texas Cash receipts from farm marlcet- 26 percent over a year before. Ari farmers and ranchers advanced 4 ings in the District states totaled r zona had 22 percent more cattle on percent in the month to a level 16 $7,252 million in 1972-up 15 pe. ts- feed, New Mexico 20 percent more, percent higher than a year before. cent from 1971. Livestock recel) and Oklahoma 8 percent more. Prices of meat animals and poultry were up 13 percent to $4,575 ml - Prices received for livestock in were up sharply over both month lion, and crop receipts were up 19 _ Texas were up an average of 8 earlier and year-earlier levels. percent to $2,677 million. Farm re percent in the month ended Janu Among crops, only sweet potatoes, ceipts in 1972 were boosted by ary 15, while crop prices held cotton, and cottonseed failed to both higher prices and increased steady. As a result, the overall in- post price gains over a year before. production.