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MONG£HL'lC

REVIEW
FEDERAL
Vol. 38, No. 10

RES E R V E

BANK

o

F

D ALLA S

DALLAS, TEXAS

October 1, 1953

CITIES OF THE SABINE AREA
BEAUMONT, PORT ARTHUR, AND ORANGE

This is the ninth 0/ a series 0/ articles on cities in the Eleventh Federal Reserve
District. Additional copies 0/ this article may be obtained by addressing a request to:
W. H. Holloway, Vice President in Charge
Houston Branch, Federal Reserve Bank 0/ Dallas, HOluton, Texas
or
Research Department, Federal Reserve Bank 0/ Dallas, Dallas, Texas

~

Beaumont, Port Arthur, and Orange - the principal cities
of the Sabine area of the upper Texas Gulf Coast - are
among the foremost manufacturing centers of the Southwest.
The tall catalytic cracking units of giant refineries and the
fractionating towers of petrochemical plants dominate the
borizon in the Sabine area. The area's oil field machinery
and equipment plants supply oil fields throughont the Nation
and in foreign countries. Tugs from Sabine shipyards may
be found in such distant places as New York Harbor and
Venezuela. Some of Cuba's rice supply comes from area
mills. Industry is the hub around which the area's economy
revolves and has been the prime force in the growth of its
cities.

As industrial centers, the cities of the Sabine area are not
typical southwestern cities. While manufacturing has played
a very important role in the growth of many cities of the
Southwest during the past decade, few cities of the region
are as heavily dependent on industry as Beaumont, Port
Arthur, and Orange. Furthermore, the composition of the
industry in these Sabine cities tends to be different from that
of most cities in the interior of the Southwest. Industries of
the area, as represented by the oil refineries and petrochemi.
cal plants, are characterized by larger installations with
I,eavier capital investment per worker and higher wage rates
than the average industrial plant in the Southwest. In fact,
the wage rates of some of the area's industries are among
• the highest in the Nation.
History

Heaul110nt and Omngc are "clatively old as Texas cities go,
while Port Arthur is a comparative newcomer. Beaumont was

established in 1835, and Orange, originally known as Green's
B1ulI, was founded in 1836. Both cities were the product of
the western movement of pioneers and settlers who were
sweeping into Texas about that time. On the other hand, Port
Arthur - the dream of a wealthy financier, Arthur Stillwell,
for whom the city was named - was established in 1895; the
new city was to be the terminus of the Kansas City, Pitts·
burgh, and Gulf Railroad which Stillwell built.
The economic life of the Sabine area in the nineteenth
century revolved around timber, rice, and cattle. Both Beau·
mont and Orange had a number of large sawmills. Rice grow·
ing was introduced to the region shortly after thc founding of
these cities. Irrigated rice farming was begun after the Civil
War, and rice became the leading agricultural crop in the
area - a position which it maintains to this day. In 1900,
Beaumont had 9,427 people, and Orange, 3,835. At that time,
thesc cities were primarily trading centers for the Sabine
area. Infant Port Arthur had a population of only 900.
On January 10, 1901, an event occurred which was to have
a very profound effect on Beaumont and Port Arthur directly
and upon the Sabinc area as a whole. A well gushing forth
oil at a rate of 75,000 to 100,000 barrels per day was brought
in by Captain Anthony F. Lucas at Spindletop, 4 miles south·
west of the center of Beaumont. This flow was equal to about
half as much as the daily average flow of all the existing wells
in the Nation in 1900. Beaumont was immediately engulfed
in a wild oil boom, attracting thousands of speculators, adven·
turers, oilmen, and visitors. It became a rough and tough oil
town, with fantastically high prices and rampant cl·ime. This
boom phase was relatively short· lived and was followed by

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

134

MONTHLY BUSINESS REVIEW

a new era for the cities of the Sabine area - an era of
sound, substantial growth.
Although Spindletop's oil production declined sharply
after a couple of years and the center of interest in the South.
west's oil development shifted to other cities in the region,
the economy of Beaumont, Port Arthur, and the entire Sabine
area continued to be, and is today, closely tied to oil. Spindle.
top gave these cities their start in the oil business, but they
have been maintained as oil centers by the continuing dis.
covery of oil in the Southwest, the development of major
pipeline transportation, the strategic location of the cities on
navigable waters close to the Gulf of Mexico, the availability
of water for industrial purposes, and other factors.
With the discovery of oil at Spindletop, refineries began to
spring up. Three of the present giant refineries of the area those of the Gulf Oil Corporation and The Texas Company
at Port Arthur and the Magnolia refinery at Beaumontcan trace their origin to small plants set up to process Spindle.
top crude. Moreover, machine shops and plants to manufac.
ture oil field machinery and supplies and refinery equipment
were established to serve the local needs.
The 52 years that have elapsed since the discovery of oil at
Spindletop have represented a period of almost uninterrupted
growth in the Sabine area. The Neches and Sabine Rivers
have been deepened to a~commodate large tankers and dry.
cargo vessels, and turning basins have been dredged; Beau.
mont, Port Arthur, and Orange have increased in importance
as ports. World War I caused a sharp increase in ship.
building and other industries, although part of the gainparticularly in shipbuilding - was lost with the ending of
the war.
Continued development in the oil refining and oil well
equipment and supply industries during the prosperous
1920's promoted rapid growth of the populations of Beau·
mont and Port Arthur. However, Orange, which was affected
severely by the sharp drop in shipbuilding after World War

POPULATION

I, suffered a decrease in population during the decade of the
1920's as the area's lumber industry declined. Orange, unlike
Beaumont and Port Arthur, had received little direct benefit
from oil development. The Sabine area's growth was greatly
slowed during the depression decade of the 1930's. The popu·
lations of Port Arthur and Orange declined somewhat; Beau·
mont's population showed only a small increase.
Since 1940 the cities of the Sabine area again have enjoyed
a period of marked industrial expansion, and their population
has increased appreciably. World War II revived the ship.
building industry and stimulated the development of new
industries, such as synthetic rubber and petrochemicals. The
synthetic rubber and petrochemical plants were located in
the area because of the availability of vital raw materials
from its oil refineries. While shipbuilding declined after the
war, its decline has been more than offset by the remarkable
growth of the petrochemical industry, as well as by the expan·
sion in such old, established industries as oil refining and oil
field machinery and equipment manufacturing. Moreover,
plant facilities and skilled labor developed in connection with
wartime shipbuilding activities have been factors promoting
the growth of the area's fabricated metals industry in the
postwar period. Orange, which had not been closely associ·
ated with the oil industry, belatedly began to receive a stimu·
Ius from this source indirectly in the form of petrochemical
plants and oil field supply and equipment manufacturing.
Indicative of the growth of the area, the Census of 1950
showed Beaumont with a population of 94,000, or 59 percent
higher than 10 years earlier; Port Arthur, 57,500, or 25 per·
cent higher; and Orange, 21,200, or 183 percent higher.
Further growth has occurred since the 1950 census.
Economic Activity

While Beaumont, Port Arthur, and Orange are industrial
cities, manufacturing is only one of the many facets of their
economic life. In order to obtain a comprehensive view of the
economy of these cities, it is desirable to study the income of
the inhabitants - where they get their income and how they
spend it.

Soblne Area, Beaumont, Port Arthur, and Oronvc

Personal Income

1900 '19'0

'"eus."", OF

2'0

THQLJSAND$ OF

PEIISONS

PERSONS

2.0

__V

200

/200

''of--- --L---l...---!__",:::~+--__I "o
TOTAL SABINE A R E A 7

~
, ~/IOO
B:AUMON T~._._ ._._-"
'01-- ..... ,, ..
... = .0
~ _ . . . . ... · . · -C~· ·····.,.:.....PORT
.J .
I ORANGE~_

100

./

~-.,.~=--+~
_"-.~,

.... ·'"

~

.'

The income of the inhabitants of the Sabine area (Jefferson
and Orange Counties) in 1952 is estimated at almost $420,·
000,000, which is about 3.5 percent of the total income of the
State of Texas. Moreover, the area's 1952 income was 332
percent higher than in the prewar year 1939. While inflation
partly accounts for the large increase in income, the area's
income in 1952, even in terms of dollars of constant purchas·
ing power, was more than double the prewar level. In the
State of Texas, personal income increased 365 percent from
1939 to 1952.

ARTHUR

, _ ,- ' - ' - 1 ••• .••• .• . • .. j
'

0-' 1900

SOUIICE . U. S

.&,'.::..--------------------... -

- .

1910

Bu,uw I'

1920

Genul.

1930

1940

.... -

0

19150

«

Salaries and wages comprise a much larger proportion and
net income of proprieLors of unincorporated en terprises a
much smaller proporlion of the income of the Sabine area
than of Texas. For instance, in 1952 the inhabitants of the

~

MONTHLY BUSINESS REVIEW

PERSONAL INCOME

PERSONAL INCOME. BY MAJOR SOURCE

SABINE AREA

SABINE AREA

1939·1952.
/oIILLI(lN$ 0' DOLL .... S
~o 0

~O

30 0

10 0

~

.../

--V

J' 400

300

200

V

./

I 00

o

0
1939

19152

NIl-LIONS 0' COLLI, .. !

0

20 0

135

1t41

1943

1945

1947

1949

1951

mz

area received 75 percent of their income from salaries and
wages and only 11 percent in the form of proprietary income.
On the other hand, in the State, 65 percent of the income was
from salaries and wages, and 20 percent consisted of pro·
prietary income. These differences rellect the greater import·
ance of large industrial establishments in the economy of the
Sabine area and the smaller significance of agriculture. Not
only does the area have a higher proportion of wage and
salary workers in large manufacturing establishments, but
the wage rates of some of these important industries are
higher than the average for Texas industry.
An analysis of the Sabine area's personal income by major
so urce reveals that manufacturing is by far the largest single
source, with manufacturing payrolls and net profits of unin·
corporated manufacturing establishments in 1952 supplying
34.1 percent of the total income. In fact, income from manufacturing was almost one and one· half times as large as that
received from the second most important source - trade and
service industries. Trade and service payrolls and net profits
of unincorporated trade and service enterprises accounted
for 23 percent of the 1952 income of the area's inhabitants.
Government contributed 10.1 percent in the form of salaries
and wages and transfer payments, such as veterans' benefits
and social security and public assistance payments. The three
most important sources - manufacturing, trade and services,
and government - furnished approximately two·thirds of the
area's personal income.

The remaining one-third was obtained from a number of
sources. In 1952, transportation and utilities supplied 8.4
percent of the income; construction, 6.3 percent; mining
(largely oil production), 3.3 percent; finance, 2.2 percent;
agriculture, 1.7 percent; and miscellaneous, 1.6 percent. In
~ addition, property income - including rents, royalties, inter·
, est, and dividends - furnished 9.3 percent of the income of
the area's inhabitants.
Although the amount of income received from al\ the
major sources has increased greatly during the past decade,

the relative importance of the various major sources, for the
most part, has shown no marked change. Manufacturing was
the outstanding source of the area's income in 1939, as well
as in 1952. Trade and service industries supplied a somewhat
smaller portion of the total income but still was the second
most important source. Government, on the other hand, furnished a little larger proportion in 1939 than in 1952 but
occupied the same rank of third largest source_ Probably the
most significant changes over the period were an increase in
the proportion of income from construction - from 2.6 percent in 1939 to 6.3 percent in 1952 - and a decrease in the
proportion of property income - from 14.7 percent to 9.3
percent. Agriculture also diminished in importance as a
source of income, supplying 3.7 percent of the area's total
income in 1939 and 1.7 percent in 1952.
Manufacturing

Beaumont, Port Arthur, and Orange and the Sabine area
as a whole owe their development, in large part, to the manufacturing enterprises in the area. Not only is manufacturing
the largest single direct source of income, but the spending
of the income from this source supports a large portion of the
people in other lines of business. In 1952, manufacturing
payrolls in the area totaled about $144,000,000.
The number of wage and salary workers in manufacturing
establishments in February 1953 amounted to 31,200, or
about 41 percent of the total in the area's nonagricultural enterprises. No major change in this situation appears to have
occurred since that date. More than 18,000 of these manufacturing employees were located in Port Arthur and smaller
cities in the southern half of Jefferson County; over 8,000
were in Beaumont and the northern half of Jefferson County;
and over 5,000 were in Orange and Orange County. Wage
and salary workers in manufacturing plants constituted over
hal f of all nonagricultural wage and salary employment in
the Port Arthur and Orange areas and almost one·fourth in
the Beaumont area.

136

MONTHLY BUSINESS REVIEW

MANUFACTURING EMPLOYMENT, BY INDUSTRY
SABINE AREA
FEBRUARY

capacity, as well as their capacity to produce larger proportions of gasoline and other of the more valuable petroleum
products.

1953

More than a thousand different peLroleum products arc
turned out by the refineries of the Sabine area, including
such a wide variety as aviation gasoline, rcgular motor fuel ,
hcating oils, lubricating oils, wax, asphalt, a large number of
greases, and special products_ Although the refineries arc
important suppliers to the southern and southwestern markets, a major portion of their production is shipped to the
East Coast and some is exported.
While the refineries are very important to the economy of
the entire Sabine area, naturally they have a more direct
impact on the nearby cities. From this standpoint, Port Arthur receives the greatest benefit. The two refineries with the
larger capacities are located directly outside the city limits
of Port Arthur, and two other refineries are within 6 miles
of the city, to the north. One refinery is just outside of Beaumont, and the remaining refinery is about midway between
Beaumont and Port Arthur. There are no refineries in the
immediate vicinity of Orange.

Petroleum Refining

Most of the manufacturing plants of the Sabine area may
be grouped into six categories: petroleum refining; chemicals, including synthetic rubber; machinery and fabricated
metals products; shipbuilding; food and kindred products;
and wood and lumber products. The petroleum refining in·
dustry overshadows all others, accounting in February 1953
for almost 18,000 employees, or 58 percent of the manufacturing employment and 23 percent of the total nonagricultural wage and salary employment in the area.
The Sabine area is the leading refining center in the Na·
tion. On January 1, 1953, the crude capacity of its six rc[lI1 eries amounted to 781,000 barrels per day, or 36 percent
of the refining capacity of Texas and around 10 percent of
Lhat of the Nation. Of the five larger refineries in the Nation,
two are located in this area. While no completely new reo
fineries have been established in the area since 1937, the
existing refineries have been steadily increasing their crude

CRUDE OIL CAPACITY OF REFINERIES
SABINE AREA
1940 -

19~~

THOUS A.NOS OF 8' RAEl S

lHOUS .. NOS 1)1" '''''RtlS

--

I,000

1,000

800

800

/

600

600

'/"

400

400

200

200

o

1940

8h'~

Oft

1942

~Q n •• j

SOURC[ S: U. S .

194.

l l II.,,,,
a~ru.

"

T ho 011 ond GOI

M II.
JA
~~rflOl .

1946

""

1950

19'2

o

19~3

Chemicals

The chemical industry, which is second in terms of employ.
ment, is one of the youngest industries in the Sabine area and
is undoubtedly the fastes t g~owing. All of the larger chemical
planLs of the area were established either during World War
11 or dllring the postwar period. In 1940, only a little over
100 persons were employed in the area's chemical industry.
Thirtecn years later, in February 1953, wage and salary
workers in that industry totaled 4,100. Moreover, at the time
of this writing, ground has been broken for three more major
chemical plants.
The area's chemical development has been largely in the
field popularly known as petrochemicals, which has been ex·
periencing a sensational growth on the Gulf Coast of Loui·
siana and Texas in the past decade. Petrochemical plants are
so called because a substantial proportion of their basic raw
matcrials co nsists of hydrocarbon components obtained from
oil refineries or from natural gas. In this connection, the
refineries of the Sabine area are an important source of raw
materials used by the area's chemical plants. Pipelines extend
from the refineries to the chemical plants, supplying the
latter with certain refinery gases which are essential raw
materials in the manufacture of particular chemicals.

er
There is a c1usL of petrochemical plants in the Sabine
area which may be called the synthetic rubber group, consisting of three plants located adjacent to each other. One
plant uses refinery gases to manufacture butadiene, a basic
"omponent of synthetic rubber. This butadiene is then piped
to the other two planLs of the group, which make the synthetic
rubber itself_ At the present time, all three plants are owned ~
by the Federal Government although operated for it by' ~
private firms.
The vLher peLl'vdwmi cal plallt,; vf the area make 'JUli e .1
,-ariely of producLs, a substantial proportion of which consists

MONTHLY BUSINESS REVIEW
of intermediates which are usually shipped to other chemical
plants outside thc area for use in the manufacture of products
for the ultimate consumer. Some of the important chemicals
produced by area plants are polyethylene (a plastic used in
squeeze bottles, insulation, etc.) ; adipic acid and hexamethy.
lene diamine (nylon intermediates); methanol (wood alcohol); ethylbenzene (used in making styrene, an important
chemical in the manufacture of rubber and plastics) ; ethylene
glycol (a permanent type of antifreeze) ; and ethanolamines
(used in the manufacture of some synthetic detergents, as
well as to remove sulphur from sour gases).
Whil e the major chemical development of the area has
been in petrochemicals, the area has a few other types of
chemical plants manufacturing such products as sulphuric
acid, oxygen, and fish oil. Moreover, it should not be over.
looked that the oil refineries, although not primarily pro.
ducers of chemicals, nevertheless manufacture a substantial
quantity of chemicals of various kinds.
The greatest concentration of chemical plants in the Sabine
area at the present time is in "Mid.County" between Beau·
mont and Port Arthur. However, the area's largest chemical
plant is located outside Orange, and two of the three major
plants which are now under way will be in so·called "chemi.
cal row" on the outskirts of Orange.
Fabricated Metals and Machinery

The fabricated metals and machinery industries are rela·
tively old industries in tills area. The first plants were estab·
lished to meet the needs of the developing oil industry of the
reg ion, following the discovery of oil at Spindletop in 1901.
Even today, most of the plants in the fabricated metals and
machinery industries are turning out products for the oil
industry - including large diameter pipe for oil and gas
pi pelines; oil field machinery, tools, and supplies, such as
drilling rigs, crown blocks, swivels, draw works, "Christmas
trees," and casing heads; and refinery equipment, such as
refinery structures, pressure vessels, storage tanks, and
drums. With the growth of the regional market, however, the
mctal.fabricating industry of the Sabine area has become
more diversi fied. Plants in this area now are important sup·
pliers of structural steel for buildings and bridges in the
Southwest.
The arca's total wage and salary employment in the fabri·
ca ted metals and machinery industries in February 1953
amounted to almost 3,800. This figure was over three times
as large as in 1940. The employment in these industries was
dist.ributed about equally among Beaumont, Port Arthur, and
Orange.
Shipbuilding

Slllpbuilding undoubtedly has been the most volatile in·
dustry in the Sabine area. During World War I, employmcnt
in the shipbuilding industry skyrocketed but then fell back
to an insignifica nt level after the war. The same pattern
prevailed during World War II. The fluctuation in tills ac·
livity bas been felt more keenly by Orange, where shipbuild·

137

ing is a more significant factor in the economy, than by Beau·
mont and Port Arthur, although all three cities have import·
ant shipbuilding establishments.
The area's shipbuilding industry is now substantially
,malleI' than during World War II; nevertheless, it has main.
tained a level of employment which is considerably higher
than in prewar years. Wage and salary workers in shipyards
in February 1953 totaled over 1,900, which was almost two
and one·half times as large as in April 1940. This higher
level of employment, however, is not due entirely to a greater
volume of slllpbuilding. A number of yards in the area have
taken on new lines, such as the fabrication of structural steel
and the manufacture of chemical tanks, fractionating towers,
pressure vessels, and other items. Moreover, ship repair is
now an important part of their business. Of course, the area's
shipbuilding industry is continuing to turn out vessels,
chiefly tugs, trawlers, and barges (including drilling barges
for marsh and offshore oil drilling).
Food and Kindred Products

The food· processing industry, wlllch tends to be over·
shadowed by some of the other large industries in the area,
is a substantial one, employing around 1,200 people. Most
of the food products plants are devoted to supplying the local
market. In this function, they are performing a vital service
to the area's people. There is one segment of the food indus·
try, however, which serves a much broader market - the
rice· milling industry. The three rice mills in Beaumont and
the one in Orange obtain most of their rough rice from
growers in the area and ship the milled rice to national and
international markets.
Lumber, Jll ood, and Related Products

The lumber and wood products industry is the oldestand, prior to the discovery of oil, constituted the leadingmanufacturing industry in the Sabine area. While this indus·
try has declined in relative and absolute importance from its
hi storic peak, it continues to contribute substantially to the
area's economy. In February 1953 the number of wage and
salary workers in the area's lumber mills, woodworking
plants, and paper and pulp mills amounted to almost 1,200,
or approximately 4 percent of the total employment in manu·
lac-turin g p-atablishments. Employment in this industry is not
substantiall y different from that in 1940.
Factors Attracting Industry

Why has the Sabine area become one of the major indus·
trial centers of the Southwest? The answer to this question
is not difficult to find; it lies in the particular combination of
adva ntagcs possessed by the area - including raw materials,
transportation facilities, labor, water, industri al sites, fuel,
and others. The relative importance of each factor varies
from industry to industry. Oil refining, petrochemicals, and
oil field machinery and supplies - industries in which the
SOllthwI'st has experienced its greatest development - have
found a more favorable combination of factors in the Sabine
area than in most other areas of the region.

138

MONTHLY BUSINESS REVIEW

Proximity to major sources of raw materials has been a
powerful factor in the industrial development of the Sabine
area. Its first refineries were established to process Spindletop's crude oil. At the present time, local crude oil supplies a
very small proportion of the needs of the refineries, but
Lhrough a tremendous system of pipelines, these refineries
now readily draw upon crude from all over the Southwest.
The refineries, in turn, are a basic source of raw materials
for Lhe chemical plants. In addition, natural gas, salt, sulphur,
and lime from oyster shells - both in the immediate area, as
well as elsewhere in the Gulf Coast region - provide the
area's chemical plants, either directly or after processing by
other GulI Coast chemical plants, with raw materials and
other supplies needed in their operations. The availability of
timber and rice has played an obvious role in the establishment of the area's lumber and rice mills.

CRUDE OIL PRODUCTION
SABINE

MILLIONS OF

The refineries and chemical plants of the area are large
users of water. While some of these plants use, in part, salt
water from tidal bodies, they also need large quantities of
fresh watcr which have been available from the Sabine and
Neches Rivers, as well as from some of the fresh-water bayous
of the area. .
There is a large supply of intelligent labor, and many of
the workers have acquired considerable skill in the lines now
represented in the area. Moreover, as the demand for labor
has increased, an adequate supply has become available from
the rural areas of east Texas and Louisiana. Also, natural gas
for fuel at relatively low prices, adequate electric power, and
an abundance of good industrial sites have furthered indus·
trial growth. Then not to be overlooked, the concentration of
industry in the area has, in itself, provided an important
market for some of the firms. This community of interests
is particularly noticeable among the refining, chemical, and
some of the metal-fabricating plants.
Mining

The mining of the Sabine area consists largely of oil, gas,
and sulphur production. In February 1953, employment in
the mining industry totaled 2,871, or 3.8 percent of total
nonagricultural employment.

WILUOHS

aa'UI[LS

<w

U."'ULS

2~

2~

20

2o

-

I~

I

~

11'

o

10

"'11 -1t7

-

0

Another factor attracting industry which probably has
been fully as important as raw materials is the area's proximity to the Gulf of Mexico and the excellent transportation facilities it enjoys. The Beaumont channel of the Neches River,
the Sabine-Neches Canal, and the Sabine River have been
progressively deepened to permit large ocean· going tankers
and dry·cargo vessels to dock at Beaumont, Port ArLhur, and
Orange. Furthermore, the Intracoastal Waterway, which
utilizes the Sabine-Neches Canal, makes possible, in conjunction with the Mississippi River System, barge traffic between
the area and the important markets and supply centers in the
Middle West. Not only are these waterways and the access to
the Gulf essential to the shipbuilding industry, but they make
possible cheap water transportation for refineries and chemical plants shipping to the East Coast and the North, as well as
for metal-fabricating plants bringing in steel from the North.
Jn addition to water transportation, the area has excellent
rail and adequate air and motor freight transportation.

AREA

1101- ISt&2-

1900
SOURCES;

\-)..
1910

1920

1930

1940

1900

o

(;oM,.." f .... ...,.".., Repotl.'"rI/ Tnol.I-o,.II!lZ.ef
'M e...,tnUw
....... Accowfl "
Sto ••
I~.

lBU Q!:I AM !lit

~ 1ll}.

Oil production, which may be said to have spawned the
manufacturing industry of the area, subsequently has been
surpassed in importance by manufacturing. Nevertheless,
there has been some drilling activity and oil production every
year since the discovery of oil at Spindletop. In fact, Spindletop itself had a renewed boom in the middle 1920's, with the
discovery at greater depths of a larger pool than the original.
Hopes are still held that more oil can be found at even deeper
levels. Through 1952, Spindletop had produced almost 132,000,000 barrels of oil. Total production in the two counties
which make up the Sabine area - Jefferson and Orangeamo unted to 12,500,000 barrels in 1952, or 1.2 percent of the
total for the State of Texas. While this volume is only a little
over half that of the peak year 1927, it is higher than in all
other years except one in the past two decades.
Sulphur mining is a relatively new industry for the Sabine
area, having been undertaken within the past year. Spindletop, the same salt dome which has been such a prolific source
of oil, also contains sulphur deposits, which are now being
produced by the Frasch process.
Agriculture

Although the Sabine area is primarily noted as an industrial center, it also has a thriving agriculture. Cash receipts
from farm marketings in 1952 amounted to over $14,300,000,
wi th most oJ Lhis income being derived from rice and cattle.
JefTerson County is one of the leading rice-producing
counties in Texas, which is the foremost producing State in
the Nation; in 1952, Jefferson County ranked first in the
State. The combined rice production of Jefferson and Orange
Counties in 1952 was over 2,100,000 100·pound bags, or 15
percent of the state total. The area's rice farming is highly
mechanized, with many farmers using airplanes to seed, fertilize, and dust their crop.
Most rice farmers in the area also have cattle. Since th"
rice farmers endea\ or to maintain a rotation schedule of
planting the same land in rice only once every 3 years, during

~

,

139

MONTHLY BUSINESS REVIEW
the ofT years the land furnishes good pasture for cattle. Of
course, there are also cattle ranches in the area. The heavy
rainfall, over 50 inches a year, together with the mild climate,
provides good pastures almost all year round. Most of the
cattle are crossbreeds, with a substantial proportion of Brahman blood. The cattle are grass fed and usually are sold as
calves or yearlings to slaughter houses in the Gulf Coast area.
The Sabine area is on the southeastern border of the most
heavily forested section of Texas. Approximately 64 percent
of the total land area of Orange County and 12 percent of the
land area of Jefferson County are in timber, according to a
survey made by the East Texas Chamber of Commerce in
J 946. Some of the timberland represents woodlands of
farm ers, but a considerable proportion, particularly in
Orange County, is owned by lumber companies. The forestry
resources of the Sabine area arc a significant direct source of
income. Jn addition, the forests constitute one of the principal
sources of income to the Sabine area's trade territory to the
north and, consequently, benefit the retail and service establishments of the Sabine area itself.
Transportation and Utilities

Transportation and utilities have been important factors
in the growth of the area, and, consequently, it is not surprising that they constitute a significant segment of its
economy. Employment in the transportation and utilities industries in February 1953 amounted to almost 8,000, which
was 10.5 percent of the total nonagricultural wage and salary
workers in the area.

SABINE AREA

The four ports in the Sabine area are at Beaumont, Port
Arthur, Orange, and Sabine Pass. The aggregate tonnage
passing through them is exceeded only by that of New York
Harbor, Houston, and the group of ports on the Delaware
River and its tributaries. In 1952 the total tonnage of the
Sabine area's ports amounted to 44,600,000 short tons, most
of which was crude oil and refined products moving out from
Beaumont and Port Arthur. In Iact, crude oil and refined
products comprise about 94 percent of the total tonnage of
the Sabine ports. Although dwarfed by oil, considerable
tonnage of other products is handled, including iron and steel
manufactures, chemicals, sea shells, wheat, and rice.
The Sabine area is served by four major rail lines - the
Kansas City Southern, Missouri Pacific, Santa Fe, and
Southern Pacific. Moreover, motor freight lines also are important in meeting the area's transportation needs. Jefferson
County airport, which is located between Beaumont and Port
Arthur, serves these cities, as well as Orange. Three scheduled
airlines - Delta-Chicago Southern, Eastern, and TransTexas - provide service to the area.
The utilities industries probably occupy a more important
place in the economy of the Sabine area than of most other
areas in the Southwest. The major oil refining and chemical
industries are very large users of electricity, natural gas, and
water. Furthermore, Beaumont is the home office of the Gulf
States Utilities Company, which supplies electric power to
much of southeast Texas and southern Louisiana, east to
Baton Rouge.
The Lower Neches Valley Authority and the Orange
County Water Company are responsible for supplying water
to rice growers and industrial users and, to some extent, to
the cities of the area. Although the Neches and Sabine Rivers
flow through the area, they cannot be tapped on their lower
portions because of the salt content from the nearby Gulf of
Mexico. Consequently, ·the two organizations have constructed
canals to bring the water from farther up on these rivers,
above the tidal reaches, down to the rice growers, industries,

ELECTRIC ENERGY CONSUMPTION
SABINE AREA

~---.oo

• Do •• -.01 IoIclu" .ll et'kl l ~ ~In .. ol'" fo,
600ftCE Gijll $10111 tllililin GOIIIpOllr·

_~

...

~I

l~d"' I'~1

".,1111 .

MONTHLY BUSINESS REVIEW

140

and other consumers. Port Arthur and the cities in mid·
Jefferson County obtain their water from the Lower Neches
Valley Authority. Beaumont gets its water via canals from
hi gher up on the Neches River, while wells are the source of
water for Orange.

houses, roads, and bridges. Building has tended to be con·
centrated to a greater extent than in many other cities of the
region on the outskirts of the Sabine cities. Relatively little
building has occurred in the downtown areas of Beaumont,
Port Arthur, and Orange.

Trade and Services

The importance of the construction industry to the over·all
economy of the Sabine area is indicated by the fact that
employment in this industry in February 1953, which is
generally a seasonally low month, was 5,600, or over 7 per·
cent of the total nonagricultural wage and salary workers.
Moreover, the value of building permits issued in Beaumont,
Port Arthur, and Orange in 1952 amounted to $13,600,000.
This figure considerably understates the total construction
in the area since a substantial portion was outside the limits
of tl,e three cities.

The concentration of workers in relatively high.paying
industries naturally creates a large market for trade and
services. The area's retail sales in 1952 were estimated at over
$248,000,000, or 3.2 percent of the total for the State. This

RETAIL SALES
SABINE AREA
1839·19~2
"IILLIOHS 0' COLLAltt

.. ILLIO'"

300

I

to a

100

----1'

....

o

OF DOLL

L
,--/

".

200

/

Banking

300

The banks of an area generally tend to reBect its economic
development. As the area's economy grows, the banks grow;
as the banks grow, they help the area to grow. Banking de·
velopments in the Sabine area certainly support this thesis.
Most of the nine banks of the area - tltree at Beaumont, two
each at Port Arthur and Orange, and one each at Port Neches

I 00

BANK DEPOSITS
Sob in. Alu .

194%

19"&

1848

19&1

a"IIII'IOI'II.

["d of

o

V""

Port A,th\lt,oll4 0,.1'19_
1939 ·1962

JoIILLIOH$ 0' OOLL4A'

200

1801-----j---·/ '....-'----+----t---l150

volume represents an increase of 328 percent over the prewar
year 1939. About One out of every three nonagricultural
workers in the area is employed in a trade or service
establishment.

1001-----'/---+-

~---t--~-f__---~~80

Beaumont is the largest trade and service center in the
Sabine area, accounting for the major portion of all the retail
and wholesale business of the area. Most of the trade of
Beaumont, as well as Port Arthur and Orange, is obtained
from the immediate Sabine area, although customers are
drawn from as far east as Lake Charles, Louisiana, west to
Liberty, Texas, and north to Jasper, Texas. Nevertheless, the
amount of trade obtained from outside the Sabine area is
relatively small in comparison with that secured by some of
the more important southwestern trading centers from their
r espective trade territories. Proximity to Houston, which
draws some business from the Sabine area itself, partly ac·
counts for the relatively small trade territory of Beaumont
and other cities of the area.
Construction

The cities of the Sabine arca have experienced the same
postwar building boom which has been evident in most other
cities of the Southwest. This construction activity has in·
c1uded new industrial plants and additions, shopping centers,

and Nederland - can trace their histories through depressions as well as booms, back to the days of Spindletop, or
even before the turn of the century. The bank at Nederland is
the only relatively new bank, having been established in 1946.
Although generally old in terms of years, the banks have
been progressive and have experienced their greatest absolute
growth in the past 15 years. Deposits of the area's banks at
the end of 1952 totaled 8191,000,000, representing an in·
crease of $143,000,000 since the prewar year 1939. Total
resou rees have shown an even larger growth, ri si ll g from
$52,000,000 at the end of 1939 to $204,000,000 at the end
of 1952.

141

MONTHLY BUSINESS REVIEW
Government

Although government ranks third among the major sources
of income of the area's inhabitants, it is relatively of less
importance than in most of the larger cities of Texas or in
the State as a whole. In 1952, government accounted for
around 10 percent of the total personal income of the area,
as compared with 17 percent in Texas.
The largest single activity of government in the area,
excluding the public schools, is the United States Naval Sta·
tion at Orange, where a reserve fleet of naval vessels is kept.
This Naval Station is of substantial importance to Orange,
but its impact on the other cities of the area is small. Most
of the income from government is derived from routine
activities associated with the life of any community. By and
large, income from government has followed the growth of
the area rather than leading or promoting its growth. Of
course, it should not be overlooked that during both World
\V ars, government expenditures for ships, chemicals, and petroleum products provided a powerful stimulus to the entire
Sabine area.
Recreational and Cultural Activities

Recreational and cultural opportunities enhance living in
the Sabine area. Its residents have both salt-water and freshwater fishing, as well as good hunting, practically in their
backyards. Moreover, beaches on the Gulf of Mexico can be
reached within 1 hour's or 2 hours' driving. All three of the
cities - Beaumont, Port Arthur, and Orange - have a number of fine parks with tall trees, well-kept grounds, and, in
some instances, swimming pools.
In Beaumont is located Lamar State College of Technology,
a State.supported college offering 4-year courses and bachelor of science degrees in such fields as business administration, engineering, home economics, and geology. In addition,
vocational training not leading to a degree is given in a
variety of fields, including machine shop practice, the study
of diesel engines, refrigeration maintenance and repair, and
vocational nursing. Night classes, as well as day classes, are
scheduled for the convenience of the students_ Total enrollment last year was almost 2,600.
A symphony orchestra was recently organized in Beaumont
and will begin its first season this year. This orchestra, while
located in Beaumont, is supported also by other cities in the
Sabi ne area.
Among other assets and attractions in the cities of the
Sabi ne area are: fine residential sections frequently located in
beautifully wooded areas; many churches of practically all
denominations; Port Arthur College (a business and radio
school founded by one of the men who initially developed
Port Arthur, John W. "Bet-A-Million" Gates) ; and the South
Texas State Fair and the Neches River Festival, both of which
are held annually in Beaumont.

Problems

The Sabine area is confronted at the present time with a
number of problems, some of which are merely the outgrowth
of industrial development. A few of these problems embrace
the entire area, but most are peculiar to a portion or a particular city of the area.
The water problem of Jefferson County is of prime import·
ance today_ Although the rainfall is relatively heavy and the
Neches River - the source of most municipal, industrial,
and agricultural water consumed in the county - has one of
the heaviest runoffs of any of the Texas streams, during some
years in the summer months of low flow insufficient water is
available to meet the tremendous demands of rice growers
and large industrial users. At such times in the past, the
Lower Neches Valley Authority has had to reduce the amount
of water supplied to these consumers. Moreover, at the present time, the Authority is unable to provide any new large
industrial consumer locating in Jefferson County with an
assured supply of water.
A dam which was completed at Town Bluff, Texas, in early
1951 has provided some storage to bolster the water supply
in months of low river flow. Moreover, three additional dams
have been authorized by Congress, although the money for
their construction has not been appropriated. When these
dams are completed, the water problem in J efierson County
will be eliminated since storage will be available to meet all
anticipated watcr needs during periods of low flow of the
Neches River.
The development of the relatively heavy concentration of
industry in the area has brought with it problems in labormanagement relations. Labor-management relations in the
Sabine area are as good as those in most of the industrial
areas of the North and East. Further progress can be made
in the Sabine area, as in practically all other industrial areas,
in encouraging mutual trust and respect between labor and
manacrement - a condition which undoubtedly promotes the
b
enhancement of a community and its economic growth.
The excellent rail transportation in the area has inadvertently created trouble for its cities because of a lack of elevated
tracks. Traffic is frequently tied up by freight trains, and the
railroad crossings create a hazard, particularly in the city of
Beaumont. A $4,000,000 bond issue was voted in Beaumont
to eliminate street-level railroad crossings; negotiations are
now under way with the railroads involved.
The cities of the Sabine have other problems which are
common to growing cities. Additional school facilities are
required. Water distribution and pumping facilities need to
be expanded. Office space has been tight.
Summary and Outlook

The Sabine area is one of the oldest industrial areas in
lJoe Southwest, a region which, until comparatively recently,

had little industrialization. While the rate of economic growth

142

MONTHLY BUSINESS REVIEW

of this area during the past decade may not have been as
spectacular, statistically, as that of some other urban areas of
Texas, nevertheless, the area has had a very impressive record
of growth. Its population increased 45 percent from 1940 to
1950, and the income of its inhabitants in 1952 was over
four times as high as in 1939.
The future of the Sabine area looks very promising. The
oil and gas and the excellent transportation faciliti cs which
have attracted industry in the past may be expected to con·
tinue to draw plants to the area. Despite increased demands,
a plentiful supply of intelligent labor is available. Good in·
dustrial sites and an adequate supply of electric power exist.
Although water for additional large industrial users cannot
be assured in Jefferson County at the present time, the basic
source of water, the large runoff of the Neches River, only
awaits the construction of dams to provide an adequate water
supply at all timcs. In Orange, an abundant supply of water
from the Sabine River is immediately available, and the
Sabine River Authority is planning a series of upriver dams
which will increase materially the supply of fresh water.
Probably the segment of industry in the Sabine area which
may be expected to show the largest growth in the coming
years is that which has been expanding most rapidly in recent
years - the petrochemical industry. The desirability of the
area as a location for petrochemical plants is indicated by the
existing concentration of such plants, as well as by the fact
that three petrochemical plants are now being constructed one at Beaumont and two at Orange. Extremely optimistic
expectations are generally held for the growth of the petro·
chemical industry during the next decade or two, and it is
reasonable to assume that the Sabine area will continue to
participate in the growth of this industry.
The future of the area's giant refining industry is depend.
ent in part on the availability of crude oil in the entire
Southwest. Refining began in the area shortly after the
Southwest's first major discovery in 1901; since then, both

the area's refining capacity and the Southwest's oil produc.
tion have experienced almost uninterrupted growth. Refining
capacity on the East Coast, to which the area's refineries send
a substantial portion of their products, has been growing at
a faster rate in recent years than that of the Sabine area.
Much of the new East Coast refining capacity has been based
on foreign crude. Nevertheless, the continuous expansion and
modernization of the Sabine refineries give no indication
that the area's refining industry has reached its peak.
The settlement of the tidelands issue undoubtedly will
promote drilling activity and oil and gas production in off.
shore areas. Such development may act as an important
stimulus to the area's shipbuilding and metal-fabricating in.
dustries. The need will increase for drilling barges, as well
as for other oil field machinery and supplies which area
plants manufacture. Also, because of the proximity of the
area to the tidelands operations, some of its inhabitants prob.
ably will he employed directly in the drilling and production
phases.
Prospects for other industries in the Sabine area also are
favorable. The food industry is likely to grow as the population of the area grows. A new pulp and paper mill at Evadale
and a large sawmill under construction at Silsbee, both places
immediately north of Beaumont, augur well for the area's
lumber, wood, and related industries.

It is difficult to foresee whether the Sabine area will attract
types of industry other than those presently represented. In
any case, it is likely that the principal growth will be in thosc
major ind,ustrics already located in the area.
How fast the area will grow will depend in part upon
national business conditions, as well as upon the success
achieved in solving its problems. The number of plants un·
der construction at the present time should assure growth
in the immediate future; the basic advantages of the area
should result in growth over the long term.

143

MONTHLY BUSINESS REVIEW

REVIEW OF BUSINESS, AGRICULTURAL, AND FINANCIAL CONDITIONS
August sales at reporting department stores in the Eleventh Federal
Reserve District rose, seasonally, 11
percent above those of July and
showed a year-to-year gain of 1 percent. January-August sales exceeded those of a year ago by
4 percent. Sales in early September made further seasonal advances_ Consumer credit outstanding at department stores registered little net change during August. Compared with July,
collections on charge accounts and instalment accounts were
down 13 percent and 1 percent, respectively_ Inventories on
August 31 were up seasonally from July and 13 percent above
a year earlier_ Meanwhile, merchandise on order declined 27
percent during the month to a level 20 percent below a year
ago_
Rains during late August and early September and the
open weather of the past several weeks have improved greatly
the prospects for crop production in the District. Current
estimates indicate larger crops of cotton, rice, sorghum grain,
hay, peanuts, and potatoes than were harvested in 1952.
Ranges and pastures also are showing improvement in most
sections. Marketing of cattle and calves is near the seasonally
high level of a year ago. Farm commodity prices were steady
to weak during September.
Most maj or oil-prodncing states - including Texas, Oklahoma, and Louisiana - recently have announced cuts in oil
allowables because of the high level of crude and refined
stocks_ Daily average crude oil production in the District in
the first part of September was down from August and from
a year ago, reflecting principally the cut in Texas allowables;
production outside the District showed a year-to-year gain.
Refinery activity in the Nation in early September was at a
record-high level; primary stocks of major refined products
at mid-September were 14 percent higher than a year earlier.

Retail sales at department stores
in the Eleventh Federal Reserve District during August rose, seasonally,
11 percent above July and were 1
percent above August 1952. The
cumulative gain through August 31 in monthly sales for 1953
was almost 4 percent ahead of the comparable period a year
earlier. Sales continued to rise seasonally during the first half
of September but were approximately 2 percent under the
same period a year ago.
In the District the fall trade season at department stores
traditionally begins in early September, and consumer demand continues to increase, except for a minor dip in
October, reaching the peak for the entire year during the
week before Christmas_ It is estimated that department stores
generally transact around 40 percent or more of their total
annual volume of business during the 4 months from September through December. With these points in mind, individual stores are appraising their prospects for business
during the coming months. From the standpoint of variety,
quality, selection of merchandise, and facilities for service,
the department stores as a group are well prepared to meet
the fall and winter trade demands.
Among the factors that appear favorable to the trade are
the prospects for the continued record or near-record levels
of employment and personal income and the continued
growth in family requirements. Other factors which will
affect consumer buying but which cannot be fully appraised
are the present degree of demand satisfaction; the deterring
effects, if any, of the current level of consumer debt; and the
strength of competition for the consumer's dollar from other
retail lines. In trade circles there is a feeling of cautious
optimism. A moderate increase of around 3 percent over the
last 4 months of 1952 would be about in line with expectations.

Nonagricultural employment in the states of the District
declined further in July, largely because of reductions in
government and construction employment. Manufacturing
employment continued to rise. During August and September the trend of nonagricultural employment turned upward, seasonally, with manufacturing employment showing
still further gains_
The value of construction contracts awarded in the District in August was the lowest monthly total in 5 months and
was 24 percent less than a year earlier. Awards for residential construction reached a 2-year low_ Constr uction contracted in the first 8 months of 1953 was valued at 18 percent
less than a year earlier, with residential and nonresidential
building down 10 percent and 23 percent, respectively.
In the 5 weeks ended September 23, cash assets and deposits of the weekly reporting member banks rose, while loans
and investments declined. The reduction of loans is in marked
contrast with the expansion during the comparable period
last year.

RETAil TRADE STATISTICS
(Percentage chango)

NET SALES

STOCKS'

Aug. 1953 from

Aug. 1953 from

Aug.

July

1952
DEPARTMENT STORES
T0101 Beventh Olstrid.. . . . • . . . . • . .

Dallas...... .. . . . . ..... .. ......

1
_8
5

EJ Paso. .. ... .... ...... .... .. . .
Fort Worth... .... ...... .... ....

-6

Corpus Christi....... ....... . ....

Houston........ . . .... .. .. .. .. ..

San Antonio. . ... . . .. . . . .. . . .. . .
Shreveport, La..... . . .... .. ......
Waco . .... ..... .. . . . . .. .. . . ...
Other cilies... . ..... . ....... ... .
FURNITURE STORES
Total Seventh District .............
Austin.. •.•.••.................
Dallas . . ..•.. .. .... . ...........
Houston .... . • .•. • . . .. . .... . . .. .
Port Arthur. • . . . . . . . . . . . . . . . . . ..
Son Antonio ................... .
Shreveport, La.... . . . . . . . . . . . . . ..
HOUSEHOLD APPLIANCE STORES
Total Ele'lonth District.. . . . . • . . • . . .

Dallas. .... ....................

I

2

11
1.(
8
18

13

7

10

-5
8
-5
-4

10
22
16
9

-13

7

5
-10
-6
-31
-28
-17

18
26
11
-1 S
-10
-18

-1 6

6

6

38

Stocks at .nd of month.
Indicat •• ~honliil. of I.u thon one· half of 1 percent.

4
8

5
5

-2

7
-1

5
-2
3

1953

13
9
13
11
9
13
16
24
13
11

7
2
9
10
6
6

,

5

18
18
5

-1
9

-2
-1
-10

-22

-1

- 2

5

MONTHLY BUSINESS REVIEW

144

accounts, which also were at a record high in January, rose
in the following months and in August were at a new record
and 8 percent above the January level. Beginning in August,
both types of credit accounts normally show an uninterrupted
rise through the Chrisbnas buying season.

WHOLESALE TRADE STATISTICS
Eleventh Federal Reserve District
(P.rcantClge change)

NET SALESp

STOCKS'p

AUgust 1953 from

August

Jwy

Line of trade

1952

1953

Drugs and lundri••.•.......
Dry good, .•••.•.•... ... . .
Grocery (full-line wholesalers
not sponsoring groups) ... •
Hardwar ••••••.••••...• . .
Induslrialsupplie, ...•.....•

-3
-8

-5
1
-13

-27
23
-6
4

-20
16
-13
-2

-14

8 mo. 1953
compo with
8 mo. 1952

5
28

-8
-3
-2

Aug ust 1953 from

August

July

1952

1953

I

3
25

- I

1

-4
16

5
-1
-1

2
- 3

8
-3
-4

-2
-1
5
-3

-16

Machinery equipment Clnd

supplies except .Ie,tricol • •
M.tab .•.................
Tobacco products •.•. ......
Wines and liquors ••. .....•
Witin", supplies, construction
malerials distributors .•• ••

-.

I

- I

I

1 Stocks at end of month.
p-Preliminory.
, Indicates chonge of less than one·t.alf of 1 percent.
SOURCEI United Stotes Bureau of the Census.

During August, department store sales of various types of
hard goods registered marked changes as compared with a
year ago. In total, the homefurnishings departments showed
a decline of 6 percent, due mainly to losses in sales of major
household appliances and television sets - the declines rang·
ing from 18 percent for television sets to 32 percent for reo
frigerators. On the other hand, sales of stoves gained 25
percent, and sales of furniture experienced a year-to-year in·
crease of 9 percent.
In the soft goods departments, virtually all items which
are usn ally in strong demand during this season of the year
showed moderate to substantial gains in August over a year
earlier. Sales of piece goods and household textiles netted
gains of 7 percent and 12 percent, respectively. Back-toschool buying during the month rose substantially above the
volume of the same period last year and was reflected in
year-to-year increases of 6 percent for women's wear, 13
percent for girls' wear, and 17 percent for boys' wear.
Consumer credit outstanding at department stores during
August showed no significant change from the previous
month. Compared with a year earlier, however, end-of-month
charge accounts receivable were up 5 percent, and instalment
accounts receivable rose 34 percent.
Compared with the record-high level on January 1 of this
year, charge accounts outstanding at the end of August de·
clined 40 percent. However, over the same period, instalment
INDEXES OF DEPARTMENT STORE SALES AND STOCKS
(1947-49

= 100)

"'e.

July

J"".

Aug.

1953 1953 1953 1952

A"".
1953

July

June

1953 1953

t9i2

SALES-Dally Qyerage
Beventh District • •••••••••••

Dallas .•. , ..••............
Houston •• ••••• .•••• •••••• •

STOCKS-End of month
Eleventh Diltrict .•...... .• . .

116
107
137

104
99
12'

118
107
135

114
10 2r
127

127
121
152

124
123
143

134
130
148

125r
116r

140p 131

130

124r

143p 140

141

127

I Adiusted for seasonal variation.
r-Revised.
p-Pr.llmlnary.

Department store inventories rose, seasonally, 7 percent
during August and at the end of the month were 13 percent
higher than on the same date last year. The build-up in inventories was mainly in fall and winter wearing apparel. Inventories, on the whole, are considered by the trade to be in
good balance with respect to anticipated seasonal demands.
Stocks of some items, chiefly hard goods, were still consid·
ered larger in relation to sales than currently desired_ This
situation was improved during August through special merchandising efforts and was being corrected further during
September_Merchandise on order at the end of August reo
nected current buying trends by showing a 27-percent decline
from July and a 20-percent decline from a year ago.
Furniture store sales at reporting stores in the District
during August rose 7 percent above July but were 13 percent
lower than during August 1952. Total accounts receivable
showed no change during the month but were 4 percent
higher than a year earlier; collections were down 7 percent
and 2 percent from a month ago and a year ago, respectively.
Inventories declined 2 percent during the month and on
August 31 were 1 percent lower than on the same date last
year.
Late August and early September
rains, followed by generally open
weather, improved greatly the pros·
pects for crop production in the District. However, tlle more favorable
outlook for production had a depressing effect upon prices
of farm commodities, notably wheat and cotton_ These crops
were selling at or near the loan level on September 1 but
declined further during the month. Even with slightly higher
crop production and heavier marketings of livestock, cash
farm income in the District in 1953 probably will be some·
where around 10 percent below 1952.

AOJUSTEot

UNADJUSTED

Aug.

Collections on charge accounts during August were 13
percent less than during July, although 1 percent higher than
a year earlier. Instalment collections were 11 percent larger
than a year ago but declined 1 percent from July. Based on
these collection figures, the average pay-out period on charge
accounts lengthened from 63 days to 67 days, the same as
during August 1952, while the average collection time for
instalment accounts remained 17 months, compared with 13
months a year earlier.

141

The United States Department of Agriculture estimated as
of September 1 that cotton production in the District will be
moderately higher than was forecast a month earlier. Generally favorable growing conditions prevailed in parts of the
District during August and September; in more favored
sections the crop is indicated to be the best in many years.
The only areas not reporting an improvement were parts of

MONTHLY BUSINESS REVIEW

14.5

CASH RECEIPTS FROM FARM MARKETINGS

CROP PRODUCTION

lin th ousands of dollars]

Texas and Five Southwestern States
(In thou.ands of bushels)
CumuJ.:Itive recelph
January-June

May

Stot.

1952

Arizona • ••• •••

Louisiana •• , •••
New Mexico •.•
Oklahoma ••••.

Texas • •••. •••
Total .• ••• ••

1953

1952

1953

1952

$ 18,880 $ 23,527 $ 29,534 $ 32,214
15,079
14,704
15,603
11,794
10,629
11,024
8,883
9,408
30,037
27,341
103,890
65,430
126,738
95,361
148,620
109,701
$201,363

196,649 $ 187,128
111,946
105,431
78,902
64,910
270,316
223,205
775,035
642,485

$171 ,957 $306,530 $228,547 $1,432,848 $1,223,159

SOURCE: United Stotes Department of Agriculture.

south Texas, where the rains came too late to be of benefit to
this year's crop.
Cotton harvesting operations have made rapid progress
throughout all sections except the High Plains of Texas,
where only limited picking of early fields is under way. A
crop of around 1,200,000 bales is forecast for the South
P~ains area of Texas. Irrigated cotton in the Pecos and Upper
RIO Grande Valleys is reported to be making excellent
progress, with higher·than.average yields expected.
The estimate of grain sorghum production in the District
was raised about 25 percent during August, as considerable
additional acreage was seeded in northwest Texas and weather
conditions were favorable for development of the crop. Pro·
duction substantially above a year ago is anticipated if a
killing frost does not occur earlier than normal. A large
acreage of late· planted sorghums probably will not yield a
grain crop but will provide additional roughage for live.
stock.
Harvest of a record rice crop is nearing completion in
Texas, with yields averaging slightly higher than a year ago.
Dry, open weather following the early September rains en.
abled growers to salvage most of the rice in fields flooded
by th~ storms. During August there was a marked improve.
ment ill prospects for peanut production, and weather condi.
tions during September were generally favorable for further
development.

Crop
Cotton 1 ••• •• •••
Corn ••••••••••
Rices ••••••••••
Sorghum grain ••

Average
1942-51

3,162
54,256
9,498
80,523
1,547
Hay' ••........
Peanuts5 • • ••• •• 312,916
'rbtl potatoes...
4,040
Sweet potatoes.
4,372

1952

1953
Indicated
Sept. 1

Average
1942-51

3,808
41,292
13,662
48,236
1,512
85,100
2,040
1,215

3.850
33,874
14,500
70,000
1,798
152,000
2,398
2,295

4,644
97,664
20.021
96,850
4,739
438,361
8,796
14,272

I-N

Texas Crop Reporting Districts

1952

1953
indicated
September I

1953
As percent of
1952

I·N •••••.•..• . •• .••.•.•..•.
1·5 •• ................ ......
2·N ••• •••••••••.•.•••• ••••.
2·5 .......... , .. . ........ . .
3 ... ..... . ..... . . .. ... .....
4 . .........................
5·1'1 ...... ......... . ... ... ..
5·5 •. ... .....•....•.....• , •
6 •. • . ••......•.. ..•... ••• , •
7 ..........................
B·N •• ••••.•••••• •.••••• •• ••
8·5 .............. ... .......
9 ••......... . •......•.••.•.
lO·N .• ••.. . ......•..•••••••
10·S ..... . ..

351
941
288
218
33
608
113
85
192
25
192
86
256
79
607

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

467
1,005
182
59
12
610
95
96
240
17
200
222
231
62
310

570
700
160
290
40
785
115
115
220
45
200
85
235
28
262

122
70
88
492
333
129
121
120
92
265
100
38
102
45
85

4,074

3,808

3,850

101'

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

~Ia,to •••

..

SOURCEI United States Oepartment of Agricuitur o.

6,290
55,663
27,226
81,539
5,004
238,600
5,882
12,630

Commercial production of fall and early winter vegetables
in Texas is expected to be somewhat smaller than a year ago.
As a result of insufficient moisture at planting time last July
and August, acreages planted were lower than intended. However, following rains in early September, farmers increased
the acreage of cabbage, onions, and other crops that could
be planted safely after mid· September. Acreage of late·fall
tomatoes in Texas is down 44 percent from a year ago. The
Panhandle lettuce crop is estimated to be slightly lower than
that of last year.

(In thousands of bales-SOO lb. gross wi.'

1951

6,106
65,587
26,30'
55,057
4,605
136,400
4,800
9,23 5

1953
Indicated
Sept. 1

of oats and barley in central and eastern Texas counties than
in the past several years. As a measure to prevent undue soil
erosion, the United States Department of Agriculture is
permitting farmers in the major wheat.producing areas of
the Southwest to seed all acreage prepared for wheat, pro·
vided the acreage harvested for grain does not exceed the
acreage allotments in effect. Some wheat is up to a stand in
northwest Texas, and early fields are providing pasturage.
However, additional rains will be required to maintain the
crop, as there is very little subsoil moisture.

COTTON PRODUCTION

Crop reporting dlslrid

1952

I Arizona, louisiana, New Mexico, Oklahoma. and Texas.
S In thousands of bales•
• In thousands of bags, 100 pound. each.
4 In thousands of tons.
I In thousands of pounds.
SOURCE: United Stotes Department of Agriculture.

NORTHERN
JiIGH PLAINS

Seeding of small grains and legumes proceeded rapidly
during September, with prospects for much higher acreages

Five southwestern stotes t

rnas

1953

CROP REPORTING
DISTRICTS OF TEXAS

MONTHLY BUSINESS REVIEW

146

LIVESTOCK RECEIPTS
(Number)

SAN ANTONIO MARKET

FORT WORTH MARKET

August
1953

August

July

1952

July
1:195 3

1952

1953

80,109

100,696

27,539
26,635

33,507
28,386

25,351

31,577
30,232
123.731

16,059

29,222
21,256

5,839
'35,066

Q7,085

August

August

Clau

1953

CaHI ••.........

83,024
30,817
25,844
54,332

Calves..... . . ...
Hog, ...........
Sneep .. • .•.... .
1

tive and the cash budgets, as compared with the earlier totals.
The anticipated improvement in the budgetary position of the
Government is due principally to a downward revision of
estimated expenditures.

127,077

67,966

Includes goats.

Hay production in Texas was estimated on September 1 at
a record 1,798,000 tons, August rains made it possible to
harvest an extra cutting of Johnson grass and wild hay
meadows, while improved prospects for peanuts, sudan, and
millet added further to roughage supplies.
The condition of ranges and pastures has improved
sharply, although the drought continues in southern and
southeastern New Mexico and in that area of Texas extending
generally southwestward from San Angelo and Lamesa. In
some areas of the High Plains and the Low Rolling Plains
of Texas which have not received general rains, pastures have
not improved appreciably. In much of west and south Texas,
where rains have been received, recovery of ranges is ex·
pected to be slow because of the severe drought damage to
grass root systems.

Budget expenditures during fiscal 1954 are cstimated al
$72,100,000,000, reflecting a reduction of $6,500,000,000 in
lhe January estimate of spending. Estimated budget receipts
for fiscal 1954 also were revised, from $68,700,000,000 to
$68,300,000,000, with the more recent total including about
$800,000,000 from the excess profits tax, which was not taken
into account in the January budget. As a result of these ad·
j ustments, the estimated budget deficit was reduced from $9,900,000,000 to $3,800,000,000.
On a consolidated cash basis, payments to the public by the
Treasury during fiscal 1954 are estimated at $75,500,000,000,
or $6,300,000,000 less than was expecled in January, Esti·
mated cash receipts from the public were set at $75,100,000,000, unchanged from the earlier estimate. These totals reflect,
therefore, a cash deficit of about $400,000,000, as compared
with the January estimate of 56,600,000,000.
Also reflecting these reVISIons in estimated expenditures
and receipts, the public debt at the end of fiscal 1954 is expected to be $271,100,000,000. This total compares with the
January estimate of $273,800,000,000.

FARM COMMODITY PRICES
Top Prices Paid in loco I Southwest Markets
Week ended Comparable Comparab le
Se~t.

Commodity and market
COnON. Middling 15 / 16-inch, Dallas ...•
WHEAT, No. 1 hard. Fort Worth .•••. . ... •
OATS, No.2 white, Fort Worth •.. ........
CORN, No.2 yellow, Fort Worth ... ......
SORGHUMS, No.2 yellow, Fort Worth •..•
HOGS, Choice, Fort Worth .. ...•........
SLAUGHTER STEERS, Choice, Fort Worth ...
SLAUGHTER CALVES, Choice, Fort Worth. . .
STOCKER STEERS, Choice, For! Worth ••••.
SLAUGHTER SPRING LAMBS, c:hoic:e, Fort
Worth ....................•.. • .... .
HENS, 4 pounds and over, Fort Worth .....
FRYERS, Commercial, Fort Worth ..........
BROILERS. south Texas . .•.......•.•.••••
TURKEYS, No.1 hellS. Fort Worth .•......•

lb.

22,
953

Unit

bu.
bu.
bu.
cwl.
cwt.
cwt.
cwl.
cwl.
cwl.
lb.
lb.
lb.
lb.

$

.3230
2.49
.99*

1.97l4
2.80
26.25
24.00

18.50
17.00
19.00
.24
.27
.20
.34

week
lost month

week
lasl yeQ r

$

S

.3220
2.50~

1.01 Y2
1.91 Y2
3.00

26.50
23.00
17.50
18.00
21.00
.24
.28
.20

.3820
2.66JA
1.1.4JA
2.07112

3.55
20.25

Changes in the principal assets and liabilities of the weekly
reporting member banks in the Eleventh District between Au·
gust 19 and September 23 included increases in cash assets
and deposits and decreases in loans and investments. Princi·
pally as a result of these developments, total resources rose
$52,767,000, or ahout 1 percent, to a total of $4,688,986,000
on September 23,

32.50

28.50
26.00
27.00

.22
.3 3
.19
.3 5

CONDITION STATISTICS OF WEEKLY REPORTING
MEMBER BANKS IN LEADING CITIES
Eleventh Federal Reserve District
(In thouland, of dollors)

Sept. 23,

The usual fall movement of cattle from range areas was
relatively light during September, reflecting in part the heavy
shipments earlier this year from drought areas. During the
first 7 months of 1953 the number of cattle and calves
slaughtered in Texas was 55 percent higher than during the
corresponding months of 1952, as compared with 32 percent
for the Nation,

The most recent estimates of ex·
penditures and receipts of the United
States Government during the fiscal
year 1954, which were released by
the Bureau of the Budget on August
27, indicate a marked improvement over figures presented in
the January budget. The August estimates reflect a substantial reduction in the expected deficit of both the administra-

Item

1953

Total loans (grossl and investmenh ...... ... . . $3,185, 163
Total loons-Net l . ... . . . . . . . . . . . . . . . . . . .
1,770,641
Total loons-Gross ........ . .... . ....... .
1,789,098
Commercial, industrial, and agric:ultural
1,158,204
loans ... . ........................ .
9,681
Loans to broken and dealers in securities..
Other I?~ns for purchasing or car rying
secuntles . .............. . ...... . . . .
71,463
Reol estate loans .. .... ..... ... ... ... .
135,566
Loans to bonks ...... . ... . ........... .
2,494
4 11 ,690
All other loans . ...... .. ............. .
Tota I Investments . . .. ...... . .•. • ....... .
1.396,065
U. S. Trea sury bills . ........... .... ... .
114,790
262,494
U. S. Treasury certitkates of Indebtedneu.
U. S. Treasury notes ... . ..... . ...... .. .
207,411
U. S. Government bonds (inc. gtd.
620,789
obligations) ....................... .
Other sec:urities ... .. . . ....... . . . ..... .
190,5 81
Reserves with Federal Reserve Bank ... ...... .
576,748
485,196
Balanc:es with domestk banks . ............. .
2,444,4 13
Demand deposits-adjusted! ...... ......... .
574,241
Time deposits exc:ept Government ... . ....... .
114,644
United States Government deposits .... . .. ... .
851,905
Interbank demand deposits .. . ............. .
15,000
Borrowings from Federal Reserve Bank ....... .

Sept. 24,
1952

August 19,

$3.076,442

$3,255,431

1,656,533
1,673,OB8

1,794,624
1,813,402

1,12 1,116
11,831

1, 163,372
12, 129

68,010
125,321
1,213

1953

72,071

174,525
184,098

134,270
22,456
409,104
1,442,029
161,539
203,0 16
176,026

716,199
174,218
574,879
505,593
2,425,539
491,613
148,140
837,933
34,500

712,178
189,270
549,429
428,731
2,468,887
571,013
131,908
772,199
44,500

345,597
1,403,354
154,314

1 After deductionl for reserves end unalloc:cted c:horge·offs.
! Indudes all demand deposits other thon interbonk and Unite d States Government, less
COlh items reported os on hond or in procell of collection.

MONTHLY BUSINESS REVIEW

The trend of loans during the 5 weeks is in marked contrast
with the rather strong demand for bank credit in the comparable period last year; loans declined $24,304,000, or 1.3
percent, this year, compared with an increase of $46,623,000,
or 2.9 percent, in 1952. The reduction of loans reflects principally decreases of $19,962,000 in loans to banks and $5,168,000 in loans for commercial, industrial, and agricultural
purposes.
During most weeks commercial and industrial borrowers
reduced the amount of their outstanding bank indebtedness,
with commodity dealers, sales finance companies, retail and
wholesale trade establishments, and food and liquor manufacturers repaying substantial amounts. Commercial and industrial firms in most other principalliues reduced their borrowings on a somewhat smaller scale; however, grain and milling
concerns and manufacturers of petroleum and related product.s increased their demands for bank credit_ Present expectatIOns are that the demand for commodity loans at the
weekly reporting member banks will expand as the crop-moving season gets fully under way.
Changes in other principal categories of loans included increases in real esta te and "all other" loans and a somewhat
less than offselting decrease in loans for financing security
transactions. On September 23, loans of these banks
amounted to $1,789,098,000, as compared with the yearearlier total of $1,673,088,000.
Principally as the result of sales or redemptions of Treasury bills, the weekly reporting member banks reduced their
investments $45,964,000, or 3.2 percent, during the 5 weeks
ended September 23, to a total of $1,396,065,000. Holdings of
G?vernment bonds, which also were reduced sharply, dedilled $91,389,000, or 12.8 percent; however, this decrease
reflects principally Treasury refunding of the 2-percent bonds
maturing September 15 and was offset approximately by increases in holdings of certificates of indebtedness and notes.
Investments in municipals and other non-Government securities rose $1,311,000, or by somewhat less than 1 percent.
Deposit trends between August 19 and September 23 included a rather sharp expansion in interbank demand deposits, which rose $79,706,000, or 10.3 percent, and an increase of $27,822,000, or 1.1 percent, in demand deposits of
individuals and businesses. Demand deposits of the United
States Government and of states and political subdivisions
were drawn down $17,345,000, or 14.2 percent, and $13,499,000, or 6.6 percent, respectively_ Time deposits rose $3,309,000, or by somewhat less than 1 percent.
ReAecting the availability of funds stemming from deposit
gains and a reduction of loans and investments during the 5
weeks, the weekly reporting member banks added $121,463,000, or 9.2 percent, to their cash and balances. On September
23, cash and balances amounted to $1,435,863,000, or 30.6
percent of total assets.
Gross demand deposits of all member banks in the District
averaged $6,555,188,000 during Angust, slightly below July
but nominally above Angust 1952. Demand deposits of the

1~7

GROSS DEMAND AND TIME DEPOSITS OF MEMBER BANKS
Eleventh federal Reserve District
(Averag"s of doily ligures, In thousands of dollars)

COMBINED TOTAL
Gross
demand

Dafe

RESERVE CITY BANKS

Time

COUNTRY BANKS

Gross

Gross
demand

nme

demand

Time

A,."I 1951 ..... $5,966,447 $672,892 $2,807,435 $373,116 $3,159,012 $299.776

August 1952 .....
April 1953 ••••••

Moy 1953.......
June 1953 . . ....
July 1953.. . . . . .
Avgust 1953.....

6,546,078 758,238
6,700,806 855,308
6,492,848 8n.764
6,523,407 891,731
6,572,440 901,614

3,123,616 .414,837
3,180,189 465,370
3,053,816 484,041
3,106,229 492,983
3,152,963 495,431

3,422,462 343,401
3,520,617 389,938
3,439,032 393,723
3,417.178 398,748
3,419,477 406,183

6,555,188

3,153,585

3,401,603

903,610

495,813

407.797

reserve city member banks were virtnally unchanged from
July to August; however, country banks reported a reduction
of $17,874,000, or somewhat less than 1 percent. Time deposits in August were somewhat higher than during July,
5903,610,000 as compared with $901,614,000, with country
banks accounting for most of the gain.
The volume of spending by individuals and others in the
District during August, as reflected by charges to deposit
accounts reported by banks in 24 cities, declined 6 percent
as compared with July bnt rose 6 percent above August 1952.
The reduction from July to August affected practically all of
the reporting centers, with decreases ranging from 2 percent
to 16 percent. The annual rate of turnover of deposits, which
measures the average annual rate of use of deposit accounts,
was 16.8 in Angnst, as compared with 17_8 in July and 16.4
in August 1952_
BANK DEBITS, END-OF-MONTH DEPOSITS
AND ANNUAL RATE OF TURNOVER OF DEPOSITS
(Amounh In thousands of dollors)

OEPOSITS1

DEBITS'
Percentage
change from

August
City
ARIZONA
Tucson ••••• • ••••••• •

LOUISIANA
Monroe •.•. •. . •••••.
Shreveport •••. •••.. .

NEW MEXICO
ROlwell • • ...... • • •. .
TeXAS
Abilene •.......... . .
Amarillo ••••••••••••

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

Corpus Christi ........
Corsicana ••.•. ... .. .
Dallas . ....•. ..... . .
EI Pa ~ ••..... ••....
Fort Worth . • . ..• .• .•

Galve ston . . . . .......
Houston •••••••••••• •

Loredo ..•.. . .......
lubbock ...• . . . .....
Port Arthur ..........
Son Angelo . . ........
Son Antonio .........
Texarkana' ..........
Tyler .... .. ... ..... .
Waco .... ... . . .....
Wic.hita Folts .. .•. ....

1953

Aug.

July

Annual rafeoffvrnover

Augutt 31,

1953

1952 1953

87.646

- ;

-16

48,131
196,051

13
11

-2
2

Aug.

Aug.

July

1953 1952 1953

81,304

13.0

12.6

14.5

36,667
158,630

$

15.4
14.6

13.7
13.1

15.5
14.2
10.7

-9

27,637

9:7

10.0

49,653
-1
-4
_4
125,227
-2
_8
101.787
6
_4
126,034
4
147,103
-4
-7
11,458
-8
- 9
1,511,250
12
-9
-4
12
190.874
473,595
-4 -8
71,265
-7 -7
1,588,771
6
-4
17,Q64 -15 -10
85,030
-7 -8
-1
-8
43,435
34,492
-4 -8
10 _4
379.937
18,447 -10
-5
8 -5
55.310
68,452
I -9
-4 -5
77,804

50.571
100,450

11.9

11.6
14.6

12.2

98,420
89,337
108,602
19.7 88
863,391
117.037

12.5
16:7
16.4
7.0
21.0

12.6
16.4

328,042
82,684
1,056.922

17.3
10.3
18.1
11.3

13.3
16.9
17.4
7.7
22.6r
20.3

22,027

TOlal-24 cities ........ $5,530,843

6

-6

18,162
75,122

14.8

19.7

13.6
14.0

18.4

7.4
19.2
17.8
18.2
14.3
18.0
12.1
13.3

44,311
313,627
18,392
52,641
63,032
97.1 19

9.2

13.9
9.4

11.9
12.0
13.1
9.6

13.6
11.9
12.2
13.4
10.3

$3.938,958

16.8

16.4

37.070

14.6

15.0

18.4
11.2
19.0
12.2
14.0
15.2
10.0
14.9

12.2
13.2

14.5
10.1

17.8

Debits to demand deposit accounts of indi~iduar s, partnerships, and corporations and
of states and politIcal subdivisions.
, Demond deposit accounts of indi~id1JOls, partnerships, and corporCltions and of states
and political subdivisions.
J These Rgures include only ooe bonk in Texarkana, Texas. Total debits for all bonks in
Texarkana, Texas-Arkansos, including two banks located in the Eighth Diitrict, amounted to
$39,746,000 for the month of August 1953.
, Indicates change of leu than one·half of 1 percent.
r-Revised.
I

148

MONTHLY BUSINESS REVIEW

barrels per day higher than September of last year, which
leaves the early September production of 6,518,000 barrels
per day for the Nation about the same as a year ago.

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

Se pt. 15,

Sept. IS,

1953

Item

1952

Total gold certiflcote reserves .. ..•••.•...... $ 736,613

15,570

Discounts for member banks . . •. . . .. •.......

o
o

Industrial advonr::es ••••••• • • ••••• ••••••••••

o

$ 588,849

51,870

o

1,406

428

995,668

1,064,271

1,011,238

1,083,977

964,828
734,834

1,037,296

1.178,81 I
1,231,109
995,616
728,863

Foreign loans on gold . • .... •.• .•..•.. .. •.•

U. S. GO'le rnm&nt securities . • • •• .• .. ... •.•.•
Total earning assets .......... . •........•..
Member bank reserve de posits .. ....... ..... .

$ 704,874
18,300

Aug. 15,
1953

Federal Reser ... " notes in odvol circulation •••••

737,317

The Treasury announced on September 14 that holders of
$7,722,753,000 of the 2-percent Treasury bonds which matured September 15 accepted the new securities which were
offered in exchange. This reflects a refunding of 96.7 percent
of the amount of the maturing issue. Investors exchanged
$4,722,506,000 of their holdings of the 2-percent bonds for
the 2% -percent certificates of indebtedness dated September
15 and maturing September 15, 1954, and $3,000,247,000
for the 2%-percent Treasury notes which are dated September 15 and mature March 15, 1957.
Cutbacks in oil allowables in several important producing states, in
recognition of the high level of
stocks, featured oil developments
during the past month. About midSeptember, reductions in the October daily allowables in
Texas of 86,223 barrels and in Louisiana of about 27,000
barrels were announced. Previously, Texas had cut its
September allowables by an even larger amount, and Kansas
had reduced allowables for that month by 10,000 barrels
daily. Moreover, in an emergency action, the Oklahoma
State Corporation Commission, ordered, effective September
16, a reduction of 20 percent in the allowables of allocated
fields and reduced the permitted production of wells in unallocated fields from a maximum of 65 barrels to 50 barrels
daily.
September crude oil production in the Eleventh District
reflected the cutback in Texas allowables. Production in the
first 12 days of September is estimated at 3,113,000 barrels
per day, which is down 64,000 barrels from August and is
134,000 barrels less than September last year. In contrast,
production outside the District in the first part of September
continued virtually at the August level and averaged 134,000
CRUDE OIL, DAILY AVERAGE PRODUCTION
(In thousands of barrels)
Chango from

August

August

J~y

1953 1

1952'

1953 1

ELEVENTH DISTRICT. ........ 3,177.2
Texas ... .. . .......... . . 2,871.9
Gulf Coast ....... .....
638.3
West Texas ........... 1,105.3
East Texas (proper} .... .
247,1
Panhandle .•.•......•. •
76,5
Rest of Stat•.• .•.......
8047
Southeastern New Mexico .•
195.4
Northern Louisiana •. ••..• .
109.9
OUTSIDE ElEVENTH DISTRICT. 3."10.9
UN ITED 51 AlES .• ••.••.••.. 6,588.1

3,010.8
2,7 34..4
600.9
1,087.8

3,148.6
2,846.1

Area

SOURCES:

I

J

266.9
76.9

701.9
164.6
111.8
3.208.5
6,219.3

635.3
1,0 93.5
247.8
76.5
793.0
193.7

108.8
3,379.2

6,527.8

Aug. 19 52 July 1953
166,4-

137.5
37.4
17.5
-19.8
- .4

28.6
25.8
2.7
11,8
-.7
0

102.8

11.7

30.8
-1.9
202 .•
368.8

1.7
1.1
317
60.3

Estimated fram American Petroleum Institute weekly reports.
United Stat., Bureau of Mines.

Imports rose appreciably in late August and early September, after registering a substantial decrease from the
high levels prevailing during the first 6 months of this year.
The daily average volume of imports during the 5 weeks
ended September 12 was 953,000 barrels, which was 45,000
barrels higher than the average for the preceding 5-week
period and 96,000 barrels above the comparable 5 weeks
of 1952.
Although a number of refineries recently have announced
reductions in crude runs to stills, refinery activity has continued at very high levels. Refinery crude runs in the l\'ation
during the first 12 days of September are estimated at 7"
221,000 barrels daily, which is higher than the average for
any month of record. The early September runs were 93,000
barrels higher than the estimated August average and 204,000
barrels higher than September a year ago. While crude runs
of the refineries in this District showed a moderate increase
during the first part of September, they were somewhat
less than those of a year earlier.
The sustained high level of refinery activity in recent
months, at a time when stocks were tending to become heavy,
probably is due to a variety of factors. Refinery capacity
has been growing substantially, partly under the impetus of
the Government's program to permit accelerated depreciation charge·offs as a means of encouraging the development
of reserve capacity for defense purposes. High runs can be
expected with the increase in capacity and the natural desire
of refiners to spread fixed costs over increased volume. In
addition, the high.level crude production has promoted heavy
refinery runs since refiners normally are reluctant to reduce
purchases for fear of jeopardizing lease connections over
the longer run.
The level of primary stocks of major refined products as
of mid·September was about 14 percent higher than a year
earlier. Gasoline stocks, in particular, showed a large yearto-year increase of 22 percent. Distillate fuel oil stocks were
at an all-tinle hi gh of 125,700,000 barrels, or 16 percent
above a year ago. Although the upward trend in demand for
petroleum products normally would call for a successively
higher volume of stocks each year, stocks of gasoline, kero·
sene, and distillate fuel oil on September 12 were larger in
relation to demand than on the corresponding date in any of
the previous 4 years.
Crude stocks in the Nation rose over 1,700,000 barrels between August 1 and September 12, to total 280,900,000 barrels, or 16,500,000 barrels more than a year earlier. On the
other hand, crude stocks of district origin declined around
1,000,000 barrels in the 6 weeks ended September 12 and on
that date amounted to 142,300,000 barrels, or 6,300,000 barrels higher than a year earlier.
The demand for major refined products at refineries and
bulk terminals continues to show year-to-year increases, but

•
,

MONTHLY BUSINESS REVIEW
recent gains have been considerably smaller than those experienced during the spring and early summer. During the
5 weeks ended September 12, the demand for the four major
refined products averaged an estimated 2 percent higher than
during the corresponding period last year. This year-to-year
increase was entirely accounted for by the 6-percent gain in
the demand for gasoline. Demand for kerosene and distillate
and residual fuel oil actualJy was lower than a year earlier.
The expectation that the change in governments may
facilitate the settlement of the long-standing oil dispute in
Iran has caused considerable speculation as to the possible
effects of the return of Iranian oil to world markets. The loss
of Iranian oil 2 years ago was quickly offset by a rise in
production in other areas, particularly in the Middle East;
at the present time, crude supplies appear to be ample for
world needs_There is a possibility that the resumption of
production in Iran may lead to excessive oil supplies_ How
quickly Iranian oil can reach world markets following a settlement is apparently open to question, with many observers
indicating that a year may be required before the giant Abadan refinery can be brought into full production_ If the flow
of Iranian oil into world markets is accomplished gradually,
lhe rising trend in world demand may permit the absorption
of this oil without any serious repercussions on the other
major oil-producing countries.
If the return of Iranian oil to world markets forces a
cutback in production in other areas, it is not unlikely that
the other Middle East producers, which increased output to
make up the loss of Iranian oil, probably will be the countries
which bear most of the cutback. Problems will arise if production in some of these Middle East countries has to be
reduced, since such action will involve a decrease in their
revenues from oil output. In view of this situation, pressure
may develop to moderate any cutbacks in production by increasing exports to the United States. In any case, the return
of Iranian oil to world markets is likely to create a number
of delicate problems for the oil industry.

The output of natural gasoline, liquified petroleum gases,
and allied products in the Eleventh District averaged 410,000
barrels per day during the first 6 months of this year. This
production represented an increase of almost 12 percent
over the corresponding period last year, compared with a
10-percent gain for the Nation as a whole_ District production
comprised 63 percent of the 652,000-barrel daily average
production of the Nation during the first half of 1953.
Natural gasoline prices showed a seasonal upturn in
August but as of early September were lower in relation to
the prices of crude oil or regular gasoline than at the same
time during any of the previous 4 years. The general increase
in crude prices in June, which was followed by a rise in the
prices of most refined products, did not carryover to natural
gasoline.

~

Nonagricultural employment in
lhe states of the District contin ued
to decline through July, according
to official reports. Of particular men·
tion is the reduced level of govern-

149

NONAGRICULTURAL EMPLOYMENT
Five Southwe.tern Stot •• '
Percenf change

July 1953 from

Number of persons

July
Type of employment

1953p

Total nonagricultural

3.858.900
729.100
Nonmanufocturing •... .. .. 3.129.800
Mining ..••.• . •.•••. • • •
236.500
Construction .•••...•••.
283.600

wag. and SCllary workers ••
Manufacturing ••••.......

TronsportQlion and public
utilities .•••.•.•.•.• • •
Trod •.• • .... • ..... •. .
Finance •••.•••••••••• •

Service .............. .
Government .• .. ... .. ..

411.000
978.700
U9.500
460.500
610.000

Jun.

July
1952

June

July

1953

1952

1953

3.785.300
699.000
3.086.300
230.900
301.600

3.867.200
726.000
3,141,200
235,800
291,300

1.9
4.3
1.4
2.4
-6.0

-.2

410,000

.6
2.8
6.6
3.3
.5

408.500
951,900

140,300
.4.45 ,900

607,200

979,200
149.100
458,900
616.900

-,

_ .4
.3
-2_6
_2
-_I

.3
_3
-1.1

1 Arizona, louisiana, New Mexico, Oklahoma, cnd T.xaJ.
p-Preliminory
SOURCE: Stote employment agencle,.

ment and construction employment. The loss of 6,900 workers in government employment between June and July makes
the second decline in as many months. Government employment in July was 14,200 below the January level. Construction employment declined, mainly because of strikes in the
Gulf Coast area. Manufacturing employment continued to
rise through July, although at a relatively slow rate. The
improvement occurred largely in petroleum refining, primary metals, and apparel industries.
The August and September employment picture for the
District and the Nation is one of considerable improvement,
partly because of seasonal factors. Unofficial estimates place
the September total of nonagricultural wage and salary
workers in the five states of the District at 3,870,000. From
a July total of 729,100, manuIacturing employment in these
states rose to an unofficially estimated 734,000 in September.
Gains in this period were mainly in apparel, chemical, and
ordnance industries.
The national total of civHian employees in August was
63,408,000, which reflects an increase of 288,000 over July.
Nationally, unemployment dropped to a postwar low of
1,240,000, or 1.9 percent of the labor force.
The average weekly earnings of manufacturing workers
in Texas rose to $70.64 in July, reflecting an increase of
about $4.44 since July 1952. Each of the other states of the
District, except New Mexico, reported average weekly earnings at about $4.00 above a year ago. The New Mexico
decline may be attributed to the cut in overtime, as hours
worked decreased from 44.6 in July 1952 to 41.1 in July of
this year.
The value of construction contracts awarded in the District
in August was $92,286,000, the lowest monthly total since
March and 24 percent below awards for August 1952. Contracts awarded for residential construction dropped to $29,225,000, the lowest figure for any month in almost 2 years.
onresidential awards were valued at $63,061,000, which is
only 2 percent below those for July but 15 percent under
those of a year earlier.

MONTHLY BUSINESS REVIEW

150

VALUE OF CONSTRUCTION CONTRACTS AWARDED
(In thou.ands of dollars)
JanuQry- Auglnt

elEVENTH DISTRiCT • • ..

Residential ••• . •. •..

$

92,286 $
29,225

All other •..•.....•.
63,061
UNITED STATESl .••. •• 1,414,408
507,560
Residential. ....... .

All other .......... .

906,848

July
1953

August

Avgllst
1953

Area and type

1952
121,924
47,720
74,204
1,438,725
627,596
811,129

July total was only 2,692 units, or almost 1,000 less than in
the same month a year ago. The January·July total was
27,592, or 6,000 below a year earlier; all of this loss was
experienced in May, June, and July.

1952

1953

974,930
99,625 $ 800,333
389,895
35,387
351,618
585,035
64,238
448,715
1.793.342 11,115,588 10,708,588
653,407 ".419,463 ",579,711
1,139,935 6,696,125 6,128,877

BUILDING PERMITS
8 moottl$ 1953
Percentage
change in
... oluotion
from 8
months
1952

Pen:entoge
change in
...oluotion from

I 37 slates east of the Rocky Mountains.
SOURCE: F. W . Dodge Corporation.

August 1953
City

For the first 8 months of 1953, construction contracts
awarded in the District were valued at slightly more than
$800,000,000; this is 18 percent less than in the same period
last year and compares with a 4.percent gain for the United
States. In this District and in the Nation as a whole, contracts
awarded for residential building eased off in the January·
July period, with losses of 10 percent and 3 percent, reo
spectively, as compared with a year ago. Nonresidential
awards in the District were down 23 percent, compared with
a gain of 9 percent for the United States.
The curtailment in construction of residential property in
the District is reflected also in reports on number of dwelling
units provided in new residential buildings for which con·
struction contracts are awarded. In Texas, for example, the

Number

Aug.
1952

Valuation

July
1953

LOUISIANA
25 -16
Shreveport .•• .
310 $ 1,294,759
TEXAS
Abilene . ..... •
116
961 .022 193
170
197
Amorillo ..... .
792,506 -70 -51
45
2,865,774
60
Austin ... .. .. .
235
69
Beaumont .... .
179
410.1.45
12
1,605.397
2 -35
Corpw Christi . .
405
1,659
7,380.096 -15 -19
Oollos ....... .
235
1,2 06,685
92
16
EI Paso .. . ... .
731
2,904,010
7 -2 4
Fort Worth ... .
_5
123,942 - 32
GalOfesloo .. .. .
96
8,143,649 -6 -16
Howton . . .. .. .
879
986,498 -20
L
ubbock . .... .
180
3
184,514 - 54
14
Port Arthur . .. .
151
3,344,202
Son Antonio . . . 1,224
7 - 23
51 -3 1
287
812,812
Waco ....... .
6
731,730 -8
Wichita Folls.. ..
77
Tolol ........... 6,961 $33,747,741

-3

-14

Humber

Voluotion

2.757

$ 15,704,692

7

888
2,329
2.003
1,761
3,673

6,217,547

2
-20
7
-18
25

14,343,137

20.684,718

8,333
2,073
1,182
13,367
2,6 82

4,9 86,604
19,517,147
72,528,133
15,943,774
31,097,539
3,917,911
90,183,453
12.026,775
2.129,845
35,106,434
7,749,027

523

5,440,263

66,029

$357,S76,999

14,654
2.481
6,567

756

-2
48

-4

15
25

-6

-25
14

-22

-68
3

COTTONSEED AND COTTONSEED PRODUCTS
TEXAS

UNITED STATES

A.ugust 1 to July 31

DOMESTIC CONSUMPTION AND STOCKS OF COTTON

August 1 to July 31

(Bolos)

Item

August

Area

August

1953'

1952

July
1953!

CONSUMPTION

lokll
Texas mills ••.••••..........•..
U.S. mills . . •. . ........ .•• ••.•.
Dally A.ver<lge
Tellas mills •.••...............•
U.S. mills .••.•.•..•...........
STOCKS, U. S.-End af period
Consuming establishments . ... ..•....
Public storage <lnd compresses . ....•

725,849

12.262

11.602
745,667

613
36,292

580
37.283

1,235.885
3,723,732

848,964
1.849,921

I Four weeks end.d Auglnt 29.
, Five weeks ended August 1.
SOURCE: Uniled Sial., Bureau of the Census.

12,103

739,050
~84

29.562
1,491,007

3,751,936

This seoson

la st season

This seo$O/1

LOlt season

COnONSEEO (tons)
ReceiOfed at mills . .. ..... ...
Crushed .................. .
Stocks, end of period ........

1,499,809
1,486,930

1,44 0,299
1,496,258

5,618,068

5.526,380

5,468,777
5,466,263

88,131

62,022

155,372

136,898

491.814
720,165
346,137
419.469

484,223
718,575
342,397
443,297

1,812,022
2,655,880

1,745,577
2,542,763
1,232,445
1,742,609

4,582
40,549
11.570
15,564

7,647
11,045
8,265
25.623

23,166
91,549

COTTONSEED PROOUCTS
Production
Crude oil (thousand pounds).
Coke and meal (tons) ......
Hulls (tons) ..............
L
inters (running bales) .....
Stocks, end of period
Crude oil (thousand pounds).
Coke and meol ltons) ..... .
Hulls (tons) . ..... . .......
linters (running bales) . ... .

SOURCE: Uniled Slate, Bureau of the Census.

1,191,896
1,764,260

48,318
63,101

18,435
45.104
24.615
107.226


Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102