Full text of Economic Report of the President : 1954
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Economic Report
or tne President
TRANSMITTED TO THE CONGRESS
Economic Report
of the President
TRANSMITTED TO THE CONGRESS
JANUARY 28, 1954
UNITED STATES GOVERNMENT PRINTING OFFICE
WASHINGTON : 1954
Additional copies of this report are for sale by the Superintendent of Documents,
U. S. Government Printing Office, Washington 25, D. G.
Price of single copy, 65 cents
(n)
LETTER OF TRANSMITTAL
THE WHITE HOUSE,
January 28, 1954.
To the Congress of the United States:
I am herewith presenting my Economic Report, as required by Section
3 (a) of the Employment Act of 1946.
In preparing this Report, I have had the assistance and advice of the
Council of Economic Advisers. I have also had the advice of the heads of
executive departments and independent agencies.
I present below, largely in the words of the Report itself, what I consider
to be its highlights.
Our Objectives
A great opportunity lies before the American people. Our approach to
a position of military preparedness now makes it possible for the United
States to turn more of its attention to a sustained improvement of national
living standards.
Our economic goal is an increasing national income, shared equitably
among those who contribute to its growth, and achieved in dollars of stable
buying power.
Sustained economic growth is necessary to the welfare and, indeed, to the
survival of America and the free world.
Although American living standards on the average are now higher than
ever, there are certain groups whose consumption is much less than it should
be. We can in our lifetime go far toward eliminating substandard living.
A steadily rising national income is the best assurance of harmonious
social and economic adjustments. There can be no lasting harmony in a
nation in which competing groups and interests seek to divide a constant
or shrinking national output.
Role of Government
The demands of modern life and the unsettled status of the world require
a more important role for Government than it played in earlier and quieter
times.
It is Government's responsibility in a free society to create an environment in which individual enterprise can work constructively to serve the
ends of economic progress; to encourage thrift; and to extend and strengthen
economic ties with the rest of the world.
To help build a floor over the pit of personal disaster, Government must
concern itself with the health, security and welfare of the individual citizen.
m
Government must remain alert to the social dangers of monopoly and
must continue vigorous enforcement of the anti-trust laws.
Government must use its vast power to help maintain employment and
purchasing power as well as to maintain reasonably stable prices.
Government must be alert and sensitive to economic developments, including its own myriad activities. It must be prepared to take preventive
as well as remedial action; and it must be ready to cope with new situations
that may arise. This is not a start-and-stop responsibility, but a continuous
one.
Trie arsenal of weapons at the disposal of Government for maintaining
economic stability is formidable. It includes credit controls administered
by the Federal Reserve System; the debt management policies of the Treasury; authority of the President to vary the terms of mortgages carrying
Federal insurance; flexibility in administration of the budget; agricultural
supports; modification of the tax structure; and public works. We shall not
hesitate to use any or all of these weapons as the situation may require.
The Current Situation
The year just closed was very prosperous with record output, widely distributed incomes, very little unemployment, and prices stable on the average.
In the second half of the year there was a slight contraction in business
leading to unemployment in some localities. This was due mainly to a
decline in spending by businesses for additions to inventory. Other categories of spending, notably retail sales, have been well sustained.
Our economic growth is likely to be resumed during the year, especially if
the Congress strengthens the economic environment by translating into
action the Administration's far-reaching program.
Basis for Confidence
The removal of wage and price controls, the stopping of price inflation,
the development of new products available to consumers, and the improved
economic condition of the nations of the free world constitute an unusual
combination of favorable factors for the future.
While Federal expenditures were being cut in many directions during
the past year, outlays on research and development grew and came to
2J4 billion dollars out of a total national expenditure on research of 4
billion dollars. Research has already given us many new industries and
products, including atomic energy, radioactive isotopes, electronics, helicopters, jet engines, titanium and heat resistant materials, plastics, synthetic
fibers, soil conditioners, and many others. Outlays on the building of new
knowledge must continue since they are our surest promise of expanding
economic opportunities.
Because of billions of dollars of savings in Government spending made
in this Administration's first year, major tax cuts went into effect on January 1. More than 5 billion dollars of tax savings are now being left with the
American people to increase their purchasing power this year. More will
rv
be released to taxpayers as rapidly as additional savings in Government
expenses are in sight.
Also favorable to the maintenance of high consumer expenditures growing out of high personal incomes is our wide diffusion of wealth and incomes and the strong urge of Americans to improve their living standards.
Expenditure plans of American business for plant and equipment constitute a powerful support for economic activity.
Despite the record volume of home building in recent years, there is still
a good market for housing in this country. Vacancies in our cities, with
few exceptions, are below the level necessary for a healthy competitive
market.
A continued rise in State and local expenditures may be expected. There
is still, in most parts of the country, a vast backlog of needed schools, highways, hospitals, and sewer, water and other facilities. Federal expenditures
will remain a significant sustaining factor in the economy.
Our financial institutions are fully capable of meeting all reasonable
credit demands and are in condition to withstand successfully any strains
to which they may be exposed.
Measures to Strengthen the Economy
To protect and promote economic stability we should take bold steps—by
modernizing unemployment insurance; by broadening the base and benefits
of old-age insurance; by permitting a longer "carry-back" of losses for tax
purposes; by granting broad discretionary authority to the Executive to
alter, within limits and appropriate to changing circumstances, the terms
of governmentally insured loans and mortgages; by establishing a secondary
home mortgage market; and by making improvements in the planning of
public works programs.
To stimulate the expansive power of individual enterprise we should
take action—by revising the tax laws so as to increase incentives and to
remove certain impediments to enterprise, especially of small business; by
improving credit facilities for home building, modernization, and urban
rehabilitation; by strengthening the highway system; and by facilitating the
adjustments of agriculture to current conditions of demand and technology.
Conclusion
Employment in January, 1954, is somewhat lower than in January,
1953. There seems to be a connection between this fact and the fact that
in January, 1953, we were still fighting in Korea and are not doing so
today. We can make the transition to a period of reduced mobilization
without serious interruption in our economic growth. We can have in this
country and in the free world a prosperity based on peace.
There is much that justifies confidence in the future. The Government
will do its full part to help realize the promise of that future in its program
to encourage an expanding and dynamic economy.
DWIGHT D. EISENHOWER
CONTENTS
PART I. Introduction
CPIAPTER 1. ROLE OF GOVERNMENT IN ECONOMIC PROGRESS
The Importance of Progress
Conditions of Progress
The Tasks Ahead
Page
3
3
4
8
PART II. Economic Review of 1953
CHAPTER 2. PERFORMANCE OF THE AMERICAN ECONOMY
Broad Characteristics of Recent Years
The Nation's Output and Its Disposition
The Minor Contraction of Recent Months
Analysis of the Turn During the Year
Credit and Monetary Developments
Prices at Wholesale and Retail
Wage Movements
Corporate Profits
Farm Income and Expenditure
International Economic Transactions
Summary
CHAPTER 3. GOVERNMENTAL POLICY IN A YEAR OF ECONOMIC
CHANGE
Preventing Inflation
Controlling the Readjustment
Flexibility in Credit and Fiscal Policies
Aiding Agriculture
Looking Ahead
Fostering Individual Enterprise
International Economic Policy
The Federal Budget
CHAPTER 4. APPRAISAL OF THE CURRENT ECONOMIC SITUATION..
Plant and Equipment Expenditures
Housing
Consumer Expenditures
Government Expenditures
The Condition of Agriculture
International Developments
Basis for Confidence
Need for Economic Preparedness
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13
19
20
32
35
39
42
44
45
48
49
49
50
51
53
54
55
55
56
59
60
63
64
67
69
70
71
72
PART III. Toward a Stronger Economy
CHAPTER 5. PATHWAYS TO STRENGTH
CHAPTER 6. REFORMING THE TAX STRUCTURE
Greater Equity to Consumers
Encouragement of Enterprise and Employment
Increasing Economic Stability
Paths of Future' Reform
CHAPTER 7. GOVERNMENTAL AIDS TO HOUSING AND FINANCE
Flexibility in Loan Insurance Terms
Modernization of Existing Houses
Neighborhood Rehabilitation
Regulations Governing Housing Credit Aids
Secondary Mortgage Market Facilities
Need for Further Study
CHAPTER 8. AGRICULTURE IN AN EXPANDING ECONOMY
Major Agricultural Problems
Proposed Agricultural Legislation
Matters for Further'Study
CHAPTER 9. SOCIAL INSURANCE AND THE MINIMUM WAGE
Federal-State Unemployment Insurance System
Federal Old-Age and Survivors Insurance System
Low Incomes and the Minimum Wage
CHAPTER 10. PLANNING OF PUBLIC WORKS
Role of Public Works
Need for Public Works
Advance Planning of Public Works
Community Action to Regularize Employment
CHAPTER 11. ECONOMIC RELATIONS WITH OTHER COUNTRIES...
Progress Toward a Free) World Economy
Domestic Economic Stability
Reduction of International Barriers
CHAPTER 12. DEALING WITH ECONOMIC INSTABILITY
Need for Constant Vigilance and Flexibility
Instrumentalities of Policy
Actions in Case of Need
The Basis for Progress
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75
77
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81
82
83
84
84
85
86
87
87
89
89
92
94
96
96
99
100
103
103
104
106
107
108
108
109
109
ill
Ill
112
113
114
APPENDIXES
APPENDIX A. REPORT TO THE PRESIDENT ON THE ACTIVITIES OF THE
COUNCIL OF ECONOMIC ADVISERS DURING 1953
APPENDIX B. EMPLOYMENT ACT OF 1946, AS AMENDED, AND
RELATED LAWS
APPENDIX G. REORGANIZATION PLAN No. 9 OF 1953
APPENDIX D. GOVERNMENT FINANCES, 1950-55
APPENDIX E. STATISTICS OF UNEMPLOYMENT
APPENDIX F. RESEARCH AND DEVELOPMENT EXPENDITURES, 1941-53.
APPENDIX G. STATISTICAL TABLES RELATING TO INCOME, EMPLOYMENT, AND PRODUCTION
IX
Page
115
127
133
139
147
157
165
Part I
INTRODUCTION
Chapter 1
Role of Government in Economic Progress
GREAT OPPORTUNITY lies before the American people. The
United States is in a position immediately to undertake a sustained
improvement in national living standards. During World War II the
needs of the military services and the contributions that this Nation made
to the military efforts of its allies naturally took precedence over all other
claims on the economy. The years that followed the war were devoted,
in the main, to meeting demands that had been postponed during the
conflict and the preceding years of depression. The war in Korea once
more assigned first priority to military needs. Today, and we believe tomorrow, this emphasis is no longer as pressing. Our approach to a position
of military preparedness now makes it possible to turn the productive potentialities of the economy increasingly to peaceful purposes. This is a welcome
opportunity. To help our people seize it, the Federal Government must
continue to meet successfully the challenging problems of economic transition
from war and inflation to peace and monetary stability.
Our economic goal is an increasing national income, shared equitably
among those who contribute to its growth, and realized in dollars of stable
buying power. To achieve this goal, the dynamic forces of our society
must be fully released. Accordingly, Government programs must be designed to help maintain reasonable stability during periods of readjustment and to encourage long-term growth. The mandate of the Congress as
set forth in the Employment Act must always be kept before us: "To promote maximum employment, production and purchasing power . . . in
a manner calculated to foster and promote competitive enterprise and
the general welfare." This Report sets forth the main lines along which
the Federal Government proposes to move toward these ends.
A
THE IMPORTANCE OF PROGRESS
A high and sustained rate of economic growth is necessary to the welfare, if not to the survival, of America and the free world. The United
States is now engaged, and must be for some time to come, in an effort to
build security forces adequate to deter and to strike back at aggression.
These security-building efforts, and the parallel efforts to raise the defense
potentials and the living standards of friendly peoples in other countries,
are as much dependent on our industrial production as is the conduct of
war itself. Success in them will depend in large part on the amount by
which our national output is increased.
Economic progress offers more than security against aggression. An
increasing national income, with the purchasing power of the dollar maintained at a steady level, will make it easier to move against substandard
living. American living standards, on the average, are higher today than
ever before, and the diffusion of prosperity is wider. Yet for certain
groups consumption is much below the level it should reach. The elimination of substandard living is a goal that can be approximated within
the lifetime of many of us, if the economy continues to grow rapidly.
The prospect of a steadily rising standard of living is, furthermore, the
best assurance of harmonious social and economic adjustments. There can
be no real and lasting harmony in a nation in which competing groups and
interests seek to divide a constant, or a shrinking, national output. A general improvement in incomes makes it easier to reconcile conflicting claims,
releasing everyone's efforts to constructive ends.
For all these reasons, it is essential that measures be taken by the Government to promote economic progress. In order to move effectively,
however, it is necessary to have clearly in mind the conditions on which
rapid progress in our own country and age depends.
CONDITIONS OF PROGRESS
There is, of course, no formula that will guarantee economic progress.
Progress is, to a very considerable degree, the product of a people's culture
or "way of life," which includes such intangible and spiritual qualities as
their religious ideals, belief in personal dignity, faith in self-improvement,
capacity for cooperation, and receptiveness to change. Progress can be
nurtured by wise public policy, just as it can be impeded by careless or
shortsighted policy. Above all things, public policy should recognize that
the atmosphere in which people pursue their productive activities is as
important to progress as the physical resources that they employ.
Individual freedom
Our history provides abundant proof that a basic condition of economic
progress is an environment in which the individual can, within wide limits,
pursue his interests according to his own lights. American culture is an
expression of economic as well as political freedom, and of the interdependence of the two. Traditionally, our Government has sought to create
and maintain a democracy of opportunity in which individuals have the
general freedom and the specific opportunities to work, to spend, to save,
and to invest, and the incentive to pursue these opportunities to the fullest
extent.
This concept of the role of Government has not been made obsolete by
the events of the last few decades. Two world wars and a world-wide
depression brought a continued broadening of the scope of governmental
activities, but this fact does not justify the oft-made assumption that the
range of Federal activities must continue to grow.
Adequate incentives
It must be recognized, however, that the demands of modern life and
the unsettled state of the world require a much larger role for Government
and a much higher level of taxation than suited earlier generations. For
this very reason, Government must exercise great care to shape its policies
so as to strengthen economic incentives, rather than to chill or frustrate
them, as has happened so often in the world's history. Reasonable assurance must be given that efforts will be fairly rewarded. The wage earner
must know that greater exertion, and improvements in his skill and capacity,
will earn him more pay. The saver must be assured of a fair return for
contributing capital to the productive process. Equally, the risk-taking
investor must have an assurance of adequate rewards for successful ventures. In a society which fails to provide these assurances, the urge to
greater effort is enfeebled, capital does not grow rapidly, and the economy
may stagnate.
Effective competition
Open markets and effective competition are the means of channeling
productive efforts toward social purposes in a private enterprise system.
Markets must be kept free from restraints that discourage the innovator
for the benefit of established firms or products. Open markets provide
ladders of opportunity up which the newcomer may climb. Competition
must be allowed to perform its traditional role of regulator and energizer,
to direct our economic resources into those lines which most accurately
meet the needs or tastes of consumers. This role of competitive markets
is as basic to the proper functioning of our economic order as the secret
ballot is to our political democracy. Government has a vital responsibility
in this area, immensely complicated by large aggregations of capital under
single management and large organizations of labor.
But it is clear that size alone does not preclude effective competition.
Cases abound in which competition among large firms turning out similar
products, seeking steadily to improve them or to reduce the cost of making
them, has speeded technical progress and price reduction to the consumer.
Government must nevertheless remain alert to the dangers of monopoly,
and it must continue to challenge through the antitrust laws any outcropping of monopoly power. It must practice vigilance constantly to
preserve and strengthen competition.
Savings and capital formation
Another condition of economic progress in our society is an ample
supply of savings, for on this depends the growth of real capital. It is
essential that economic policy give encouragement to thrift. There is no
place for a fear of thrift in a dynamic economy. Perhaps no greater contribution can be made by Government to the encouragement of thrift, and
thus to growth of the stock of capital, than to provide assurance that a
dollar saved today will not go to waste through inflation of prices tomorrow.
Also required is a supply of money in keeping with the increase in the
physical volume of production and trade. Such a growing money supply
is necessary to prevent the development of deflationary pressures, to maintain equity values, and to keep the purchasing power of the dollar reasonably stable.
But savings will go to waste, from the viewpoint of society, unless they
are readily transformed into productive investment. This means that the
economy must have an efficient, competitive financial system, capable of
channeling funds—risk capital as well as borrowed funds—into those lines
in which they appear likely to be most productive.
Research and development
A fundamental condition of economic progress is a growing fund of
scientific and technological knowledge. From such knowledge come opportunities for investment and new industries, based upon the development
of new materials and products, more efficient processes, and the improvement of old products. Scientific research and development have created
an almost endless roster of new industries and products, including atomic
energy, radioactive isotopes, electronics, helicopters, jet engines, titanium
and heat resistant materials, plastics, synthetic fibers, soil conditioners,
hybrid seeds, and a host of others. During 1953 the outlays on scientific
research and development by industry, institutions of learning, nonprofit
foundations, and Government rose to the total of about 4 billion dollars.
Progressive public policy requires that these activities be given strong encouragement.
Maintenance of economic stability
Under a competitive enterprise system, which gives freedom to individual
initiative and encouragement to technological change and innovation, the
economy cannot, of course, be absolutely stable. Inevitably, economic
progress is to some degree uneven. Even when the economy as a whole
advances, some industries go ahead more rapidly than others, and some
may decline. The practical importance of this fact for public policy is
that it indicates a need for fluidity and resilience in the economic system.
The desirable goal of stability in the general level of prices must not be
interpreted to mean that every individual price should remain constant.
On the contrary, it is essential to economic progress that individual prices
be flexible, so that resources may be shifted from uses in which rewards of
labor, management, and capital are low to uses in which rewards are high.
Industries benefiting from advances in technology or shifts in demand will
offer expanding opportunities for employment, while others that have lost
favor with the public will provide fewer jobs. The proper role of Government is not to resist adjustment to change, but rather to foster conditions under which adjustment can be accomplished with a minimum of
hardship or difficulty.
The most important of the conditions favorable to effective adjustment
is a reasonable measure of stability in the over-all level of employment and
incomes. Letdowns in industrial activity were not so intolerable a bar to
economic progress as long as a large and expanding agriculture offered
temporary refuge to the unemployed. But agriculture today forms a smaller
part of the total economy and, having become more commercialized, is also
subject to the movement of business in general. As a result of the catastrophic depression of the thirties, minor dips in the curve of business, such as an
earlier generation passed by without notice, now cause concern in our shops
and homes. Unless the Government is prepared and willing to use its vast
powers to help maintain employment and purchasing power, even a minor
readjustment may be converted into a spiralling contraction. Recognizing
the changed character of our age, its anxiety about business fluctuations,
and the political as well as economic difficulties that would come to the
American people through a business depression, both parties wisely united
in the Congress to enact the Employment Act of 1946, which pledged the
Federal Government to use its power to help keep the economy on an even
keel.
Floor of individual security
Still another condition of economic progress in our times is a floor of security for the individual, and it is incumbent on Government to help to establish it. A dynamic, urbanized economy poses numerous hazards for the
individual. No longer is free land on the Western frontier available to
those who want to make a fresh start. The spread of private pension and
insurance plans and social security programs in recent years has strengthened the forces of economic growth by helping to relieve individuals from
the anxieties attaching to sickness, accident, unemployment, and old age.
A further strengthening of social insurance is highly desirable. Yet it must
be kept in mind that the individual has a responsibility to provide, as far as
he can, for his own security^ and that Government can make its greatest
contribution to the welfare of individuals by fostering improvements in
their productivity.
World community of free nations
Finally, it must be noted that economic progress in our country is tied
closely to the progress of the rest of the world. The world is no less interdependent economically than politically. Just as Americans have no
chance to enjoy security from aggression while aggression is being committed against other free nations, so also they cannot make maximum progress if other nations suffer economic stagnation or decline. A program for
promoting economic progress in America must therefore provide for an
extension and strengthening of economic ties with the rest of the world.
An accelerated flow of goods and of capital across national boundaries
would contribute to economic progress everywhere.
284874-34
2
THE TASKS AHEAD
These, then, are the conditions of economic progress in our country and
in our times. To forge ahead as our Nation can, the Government must
foster competitive enterprise, strengthen economic incentives, and promote
scientific and technological knowledge. It must use its vast powers to
help protect the stability of the purchasing power of money, to help maintain employment at a high level, and to help provide a floor of security
for the individual. It must not only join with other nations, but should
be prepared to lead them, in solving the problems of international trade
and currencies.
To deal with these difficult tasks in a systematic manner, steps were
taken in the last year to re-examine the policies of the Federal Government
affecting economic growth and stability. The Council of Economic Advisers was reconstituted. The Government launched special inquiries into
the problems of agriculture, housing, foreign economic policy, and the relations between the Federal and State and local governments. Furthermore, all agencies and departments of the Executive Branch were instructed,
in studying the problems coming within their purview, to keep the broad
objective of stable economic growth prominently in mind. Some of the
initial recommendations relating to this objective are set forth in this
Report. But before turning to recommendations of policy, it is well to
review economic developments during the past year, to note how the Government has dealt with them, and to analyze the current position of our
economy and its prospects.
Part II
ECONOMIC REVIEW OF 1953
Chapter 2
Performance of the American Economy
T
HE PAST YEAR was marked throughout most of the free world by
new advances in production, general price stability, salutary readjustment of the international pattern of trade and payments, and further removal of the emergency controls instituted during World War II and its
aftermath. In the United States and Western Europe effective monetary
policies have been established. Domestic price controls and rationing have
disappeared almost everywhere. In nearly all countries monetary inflation
has been stopped and restrictions on foreign trade relaxed. The gold and
dollar reserves of the free world outside the United States have increased
sharply. Further liberalization of international trade and unrestricted convertibility of currencies have become subjects of serious and lively discussion.
Such a conjunction of favorable developments has not existed for some
years. But the dislocations wrought by war and inflation have not yet
vanished, and they are likely to continue to harass the world for some time.
The upsurge of production and employment, which has been sustained
with but brief interruptions in the United States for about a dozen years,
continued in 1953. New records were established in industrial activity, employment, and the disbursement of incomes. Unemployment reached the
lowest level of any peace-time year in recent decades. The average level of
prices was remarkably steady. The fruits of expanding production and
enterprise were shared widely. Perhaps never before in their history have
the American people come closer to realizing the ideal of high and expanding employment, without price inflation, than in 1953. But some sections
of industry, notably farming, failed to participate in the widespread prosperity. The index of consumer prices inched a little higher in spite of
some decline in food prices. And economic activity, taken as a whole,
receded somewhat toward the close of the year.
BROAD CHARACTERISTICS OF RECENT YEARS
How far and in what general directions the American economy has
traveled in recent years is attested by the summary table in Appendix G.
Between 1939 and 1953, commodity prices, wages, and taxes increased
sharply. The gross national product expressed in current dollars, which
includes these inflated price elements and taxes as well as physical outputs,
quadrupled. But a considerable expansion occurred also in the real output
and over-all efficiency of the economy. While population rose 22 percent
and total employment 35 percent, unemployment dropped 84 percent,
and the gross national product (adjusted for changes in the price level)
11
increased 95 percent. Practically all major branches of industry shared in
the advance. Agricultural output rose 35 percent, mining production 71
percent, construction 78 percent, manufacturing output 139 percent, and
electric power production 244 percent.
Over much of the period since 1939 the course of external events has
propelled or twisted the Nation's economic life. First came a protracted
war which severely tested our industrial strength, piled up a huge Federal
debt, wiped out unemployment, and swelled private incomes that could not
be easily spent. The end of the war brought military demobilization and
a rush by consumers and business firms to make good their accumulated
shortages. To the astonishment of many, still under the spell of the theories
of economic maturity that darkened the thirties, the expansion of private
spending quickly compensated for the sharp decline of governmental
expenditure. Then came the extension of Marshall Plan aid to foreign
countries—and, more recently, the Korean problem and the superimposition of a huge defense program on an expanding civilian economy. While
these events, together with the great inflation of credit and prices that
followed in their path, dominated public attention, powerful forces of
growth were quietly gathering strength within the economy—expressed in
the upsurge of population, the onrush of technology, the innovations of
finance, the intensified pace of business competition, the rapid obsolescence
of business plant and equipment, the industrialization of the South, the rapid
development of the West, the widening of the middle class, the diffusion
of home ownership, and the development of mass markets for a host of new
consumer goods. (See Table 1.)
The history of recent years has disclosed the remarkable power of the
American people to adjust to unsettling influences and to operate under
burdensome governmental restraints. The lull in 1945-46, the contraction
in 1948-49, and the slight dips in 1951 and again in 1952 were, by and large,
pauses of an expanding economy seeking, as it must from time to time, to
TABLE 1. Output of New Products
Year
Room
air conditioning
units
Television
sets
Waste Freezers,
Clothes
farm
food
and
dryers disposals
home
30
43
77
96
195
238
365
1,075
6
179
975
3,000
7,464
5,385
6,096
7,250
W
68
r
92
106
319
492
635
684
0)
100
175
155
320
352
260
350
Synthetic Synthetic
fibers
deterother
gents
than
(soap)
rayon
Millions of pounds
Thousands of units
1946
1947
1948
1949
I960
1951
1952
1953*
Frozen
foods
210
607
690
485
890
1,050
1,140
1,150
1,317
968
1,163
1,516
1,994
2,554
2,900
3,300
300
400
600
800
1,200
1,350
1,550
1,900
56
50
75
92
145
210
263
275
»Not available.
* Estimates based on incomplete data.
Sources: Department of Agriculture, Tariff Commission, National Electrical Manufacturers Association, Radio-Television Manufacturers Association and Textile Organization.
bring its tools or inventories into closer adjustment with what it sells and
how much it sells. The resourcefulness of individual enterprise and the
new horizons that have recently opened up for the consumer will serve our
economy well in the more normal environment that, it may be hoped, will
be ours in the years ahead.
THE NATION'S OUTPUT AND ITS DISPOSITION
The gross national product, which expresses the market value of all the
goods produced and services rendered, increased from 348 billion dollars in
1952 to 367 billion in 1953, or 5.5 percent. Since prices rose a little
between the two years, the expansion of physical output was 3.7 percent
(see Chart 1). The largest advances were made by durable goods manufactures, which in the aggregate rose 13 percent; the output of nondurable
manufactures increased 4 percent and of minerals 2 percent. (See Tables
2 and 3.) The steel industry completed a record year, turning out 112
million tons of ingots and castings, which was 6 million more than in
1951 and 18 million more than in 1952 when a strike severely curtailed
output. The automobile industry produced more than 6 million passenger
cars and 1 million trucks, a total of 7 million units—the highest since 1950,
when 8 million units were produced. The output of major household appliances and instruments was substantially above the 1952 level, but the
volume of the major lines—television sets, refrigerators, washing machines,
cooking stoves—was below the record 1950 totals. Furthermore, some
branches of the capital goods industry—notably, the output of farm machinery, including tractors, certain types of industrial machinery, machine
tools, and office machines—experienced a decline from their level in 1952.
The general increase of the Nation's output in 1953 was achieved partly
through additions to employment, partly through gains in productivity.
The average length of the work week in manufacturing, for example, was
about the same in 1953 as in 1952, while the number employed was 5 percent
larger; but output was 8 percent larger. Productivity increased also in
TABLE 2. Changes in Physical Output
Type of output
Percentage
change, 1052
to 1953 i
Gross national product, constant prices..
+3.7
Industrial production: total
+8.1
.0
Agricultural production
+10.6
Electric power
New construction, constant prices
+4.4
Freight carloadings
+.9
i Estimates based on incomplete data.
Sources: Department of A griculture, Department of Commerce, Federal Power Commission, Interstate
Commerce Commission, and Board of Governors of the Federal Keserve System.
13
TABLE 3. Changes in Industrial Production
Percentage
change
1947-49=1001
Industryjjroup
1953
1952
Year*
Industrial production: total
July
July
1952 to to De1953
cember
Decem1953
ber*
124
134
137
128
8.1
-6.6
125
136
139
129
8.8
-7.2
Durable manufactures: total ...
_
Primary metals
Metal fabricating: total _ .
Fabricated metal products
Electrical machinery
Nonelectrical machinery. .
.
Transportation equipment _ _ ^ _ ^
_
T
Instruments and ordnance
Clay, glass, and lumber products
Furniture and miscellaneous manufactures....
136
116
146
121
167
136
154
142
118
118
153
133
167
136
195
143
189
155
125
131
157
136
171
142
200
145
196
156
127
134
144
118
157
128
177
133
181
155
123
126
12.5
14.7
14.4
12.4
16.8
5.1
22.7
9.2
5.9
11.0
-8.3
-13.2
-8.2
-9.9
—11.5
Nondurable manufactures: total
Textile and apparel
Rubber and leather products
Paper and printing
._
Chemicals and petroleum products
Foods, beverages, and tobacco
114
105
107
118
133
106
119
107
114
125
142
108
121
111
116
126
146
107
115
97
104
122
142
108
4.4
1.9
6.5
5.9
6.8
1.9
-5.0
-12.6
-10.3
-3.2
-2.7
.9
114
116
120
113
1.
-5.8
Manufactures^ total .
._
Minerals
-7.7
-.6
-3.2
-6.0
i Monthly data are seasonally adjusted.
' Estimates based on incomplete data.
Source: Board of Governors of the Federal Reserve System.
agriculture and some other branches of production. Since 1946 the outlays
for new plant and equipment by American business firms, excluding agriculture, have totaled over 180 billion dollars. This enormous expenditure
for the expansion and modernization of productive facilities provided the
basis for the large increase in output of the Nation's factories, mines, and
construction yards.
The increased output of 1953 generated a larger flow of incomes to individuals, corporations, and the several levels of government. The sum
of personal incomes increased from 269.7 billion dollars in 1952 to 284.6
billion in 1953, with both workers and investors sharing in the increase. On
a percentage basis, the share of total personal income received by investors
(that is, dividends, interest, and net rentals) was 11.5 percent in 1953,
or virtually the same as in other recent years, while the share received by
workers for wages or salaries continued to increase and reached close to 70
percent. The income of proprietors declined both in dollars and relatively
to other groups—very largely a reflection of the decline in farmers' incomes.
(See Table 4.) Since direct taxes paid by individuals in 1953 were 36.6
billion dollars, or 2 billion more than in 1952, the disposable personal
income rose from 235 billion dollars in 1952 to 248 billion in 1953, or 5J4
percent. This rate of increase was apparently exceeded by corporate profits,
whether before or after taxes. Of course, the several levels of government
derived revenue from excises and other sources, as well as from income tax
receipts. They in turn transferred a portion of their massive receipts to
14
CHART 1
GROSS NATIONAL PRODUCT
CURRENT AND CONSTANT DOLLARS
BILLIONS OF DOLLARS
400
INDEX. 1939 = 100
400
CURRENT DOLLARS"
(Left Scole)
300
300
IMPLICIT PRICE DEFLATORS
(Right Scale)
200
200
;ONSTANT (1939) DOLLARS
(Left Scale)
too
100
1946 I 1947
I 1948 I 1949 I I960
1951
1952
1953
SOURCES: DEPARTMENT OF COMMERCE AND COUNCIL OF ECONOMIC ADVISERS.
individuals in the form of subsidies, pensions, interest on debt, or other
payments not directly related to production. The income and expenditure
accounts of the Government in recent years are set out in Appendix D.
The bulk of the Nation's huge output in 1953 passed into the hands
of consumers, who spent 229.9 billion dollars on goods and services, exclusive of new residential structures which cost (apart from farm residences)
another 11.8 billion dollars. Government took a large slice of the Nation's
output, Federal purchases of goods and services amounting to 58.1 billion
dollars and State and local purchases to 25.2 billion. Business firms acquired new plant and equipment costing close to 40 billion dollars and at
the same time added 3.9 billion dollars' worth of inventories. These
takings amounted in all to 368.9 billion dollars. The excess over the gross
national product of 1.9 billion dollars represents a net deficit of American
claims on foreign countries. Table 5 shows that the relative disposition
of the gross national product among consumers, business firms, and the
Government was nearly the same in 1953 as in 1952. But whereas the
increment of the gross national product between 1951 and 1952 was
devoted largely to governmental use, the expansion of the defense program—
which has dominated governmental outlays of late—virtually ceased by
1953. The increment of the gross national product between 1952 and 1953
was devoted principally to civilian uses.
TABLE 4. Percentage Distribution of Personal Income
[Percent]
Labor income and transfer
payments
Total
personal
income Total
Period
1939
1946
1947
1948
1949
1950
1951
1952—
..
.
1953 i
Investment income
Proprietors'
Wage Other Trans- income
and
fer
Total
labor
salary income
payments
receipts
62.1
100.0
100.0
100.0
100.0
100.0
66.9
68.9'
70.2
69.8
71.2
61.5
62.8
63.1
63.7
100.0
100.0
100.0
100.0
71.3
72.0
73.3
74.7
62.9
65.4
66.8
68.2
Rents
Dividends Interest
0.7
1.1
1.3
1.3
4.1
4.8
5.2
7.4
1.5
15.6
19.9
18.5
19.0
16.7
17.5
6.4
6.2
5.4
6.0
11.1
11.3
11.2
12.0
3.7
3.7
3.6
3.7
3.3
3.5
3.5
3.6
4.2
4.1
4.2
4.7
1.7
1.7
1.7
1.8
6.7
4.9
4.8
4.8
16.3
16.4
15.2
13.7
12.4
11.6
11.5
11.5
3.7
3.6
3.7
3.7
4.0
3.6
3.4
3.3
4.6
4.4
4.4
4.5
i Estimates based on incomplete'data; by Council of Economic Advisers.
NOTE.—Detail will not necessarily add to totals because of rounding.
Source: Department of Commerce (except as noted).
TABLE 5. Percentage Distribution of Gross National Product Among Major
Components
[Percent]
Year
1947
1948
1949
1950
1951
1952 .
_
1953*
Personal Gross
Total consumpprivate
gross
tion
domestic
national expendiinvestproduct
ture
ment
Government purchases of
goods and services
Total i
National
security 2
Other 3
Net
foreign
investment
100.0
100.0
100.0
71.0
68.7
69.9
12.9
16.5
13.0
12.3
14.1
16.9
5.7
6.2
7.5
7.1
8.2
9.6
3.8
.7
.2
100.0
100.0
100.0
100.0
67.9
63.1
62.7
62.6
18.3
17.8
15.1
15.2
14.6
19.1
22.3
22.7
6.5
11.3
14.1
14.1
8.3
7.9
8.4
8.7
-.8
.1
-.1
-.5
1 Government sales have been subtracted from total Government purchases but not from the components
shown in:,this table. See Appendix Table G-l for amounts of Government sales.
2 See Appendix Table G-l, footnote 3, for items included.
»Expenditures by the Federal Government for other than national security plus expenditures by
State and local governments.
« Estimates based on incomplete data.
NOTE.—Detail will not necessarily add to totals because of rounding.
Sources: Department of Commerce and Council of Economic Advisers.
16
CHART 2
PERSONAL CONSUMPTION
EXPENDITURES BY MAJOR CATEGORIES
BILLIONS OF DOLLARS7
BILLIONS OF DOLLARS
120 -
- 120
NONDURABLE GOODS
\
110 -
-
110
-
100
20
1949
1950
I
1951
* SEASONALLY ADJUSTED ANNUAL RATES.
S O U R C E S : DEPARTMENT OF COMMERCE AND COUNCIL OF ECONOMIC ADVISERS.
CHART 3
PERSONAL CONSUMPTION
EXPENDITURES FOR SELECTED GOODS
AND SERVICES
B I L L I O N S OF DOLLARS*
I
i
I
I
I
BILLIONS OF D O L L A R S *
i
I
I
i
I
i
I
i
i
i
I
i
i
i
70
70
NONDURABLE GOODS
60
60
FOOD (EXCLUDING ALCOHOLIC
BEVERAGES)
50
40
40
OTHER NONDURABLES ^
V
_.
50
^•••••^•^
30
30
CLOTHING AND SHOES
10
10
I
.
.
.
i
.
,
.
i
.
,
,
I
50
50
SERVICES
40
40
OTHER SERVICES
30
30
20
ORATION K.
HOUSEHOLD OPERATION
10
0 I
10
L
1949
* SEASONALLY
I
1950
I
1951
I
1952
i
1953
ADJUSTED ANNUAL RATES.
SOURCES: DEPARTMENT OF COMMERCE AND COUNCIL OF ECONOMIC ADVISERS.
18
The manner in which consumers have utilized their disposable income
is shown for a span of years in Table 6. The effects of World War II and
of the Korean war on consumer spending and saving stand out clearly.
So, too, do recent trends in consumer buying habits and attitudes. (See
Charts 2 and 3.) Services have taken an increasing share of the consumer's dollar since 1946, largely because housing has gradually moved toward
TABLE 6. Percentage Distribution of Disposable Personal Income
[Percent]
Less: Personal consumption expenditures
Year
Disposable
personal Total
income
Durable
goods
Food'
Clothing
and
shoes
Other
Housing
Other
Nondurable goods
Services
Equa
Personal
saving
1929
100.0
95.5
11.4
23.9
11.2
10.6
13.8
24.5
4.5
1940 . .
100.0
95.2
10.4
22.6
9.8
17.3
12.2
23.0
4.9
1946 .
1947
1948 ..
1949
100.0
100.0
100.0
100.0
92.4
97.7
94.4
96.5
10.4
12.6
12.2
12.7
26.2
28.2
27.4
27.2
11.7
11.3
10.7
10.1
16.1
16.6
15.5
15.7
8.2
8.6
8.8
9.7
19.8
20.4
20.0
21.0
7.6
2.3
5.6
3.6
100.0
100.0
100.0
100.0
94.6
92.5
92.8
92.7
14.2
12.1
11.4
12.2
25.8
26.9
27.1
26.5
9.2
9.0
8.8
8.2
14.9
14.5
14.7
14.2
9.8
9.7
10.2
10.5
20.7
20.2
20.7
21.1
5.5
7.5
7.2
7.3
1950 -—
1951
1952
1953 •
-_-
_.
i Excludes alcoholic beverages.
* Estimates based on incomplete data; by Councillor Economic Advisers.
NOTE.—Detail will not necessarily add to totals because of rounding.
Source: Department of Commerce (except as noted).
its former place in consumer budgets. Even so, expenditure on services was
only 31.6 percent of disposable income in 1953, in contrast to 38.4 percent
in 1929. Expenditure on food has not shown a definite trend in relation
to income since the war, but it has been running well above the prewar
level—26.5 percent of disposable income in 1953, in contrast to 23.9 percent
in 1929 and 22.6 percent in 1940. Expenditure for clothing and shoes,
on the other hand, has taken a diminishing part of income—11.2 percent
in 1929, 11.7 percent in 1946, then a continuous decline to 8.2 percent in
1953. Relative spending on other nondurables has likewise diminished,
although gasoline and oil are outstanding exceptions. The proportion
of income spent on durable goods has been very irregular since the war, but
it has been running considerably higher than in prewar years. The recent
shifts in consumer spending are worth noting with some care, because they
facilitate understanding of the economic changes within the past year—
to which we now turn.
THE MINOR CONTRACTION OF RECENT MONTHS
At the beginning of 1953 the economy advanced rapidly, but not without some signs of impending change. The real income of farmers, which
had started to fall during 1947, was continuing to shrink. Stock prices
began drifting downward after the turn of the year. The average length
of the workweek in manufacturing (adjusted for seasonal variations)
started to decline in the spring. So, too, did the orders for durable goods
received by manufacturers. Retail trade continued on an impressive scale
but failed to expand, while consumer debt and business inventories kept
rising. Business failures, while relatively few, increased in number and
average size. Interest rates rose at an accelerated rate, as they usually do
toward the close of a general business expansion. These and other developments were closely watched by the Government and they influenced public
policy, as the next chapter will describe. True, some decline from the hectic pace of extensive overtime operations might well prove salutary in the
long run. But it was important that the transition, if there was to be one,
be carried through without shock and that the readjustment be moderate
and not cumulate. The once fashionable theory that a sharp liquidation
was good for the economy could not be trusted.
As the year wore on, the economy continued to be prosperous but underwent some contraction, the extent of which may be judged from movements
of broad composites of economic activity. Thus the gross national product
reached its highest volume during the second quarter, then fell 1.5 percent
by the fourth quarter. Personal incomes proved steadier, continuing to rise
until the third quarter, then dropped 0.4 percent in the last quarter. On
a monthly basis personal incomes reached a peak in July and declined 1.0
percent by the year's end. Nonagricultural employment, adjusted for seasonal variations as are the preceding series, fell by 1 million or 2 percent,
after reaching a peak in July. Unemployment, which reached a low of 1.2
million or 1.8 percent of the civilian labor force in October, rose to 3.0 percent in December. (See Chart 4 and Appendix E.) Industrial production reached a crest between May and July, and then declined 6.6 percent
in the following months. On the average, commodity prices changed very
little. The index of wholesale prices was at its highest point of the year in
September, and in December was only 0.8 percent lower. The index of consumer prices in turn reached its highest value in October and fell a mere
0.4 percent by December. The precise movements of several of these indicators of the condition of the economy are displayed in Chart 6. Of course,
broad composites fail to convey the degree to which the decline has been
diffused over the economic system. It is clear, however, from the behavior
of the components of these indexes that a large portion of the economy was
undergoing readjustment toward the close of the year, and some evidence
to this effect is presented in Table 3.
ANALYSIS OF THE TURN DURING THE YEAR
The immediate cause of the contraction, which became visible after midyear, was an imbalance between production and sales that developed earlier
in the year. After the settlement of the steel strike on July 25, 1952, the
20
advance of production was swift, especially in the durable goods industries.
Within a month the steel industry was operating at over 2 million tons
per week, partly to meet the large demand for current use, partly to enable
fabricators and dealers to rebuild their stocks. The steel-using industries,
whose operations had been seriously affected by the strike, followed suit.
Business inventories, especially those held by makers and sellers of consumer
durables, were generally low—in the sense that businessmen sought to
expand them. Even before the steel strike, inventories of civilian goods had
been much reduced from their embarrassing 1951 peaks. Of course, the
strike led to further depletion of stocks. On a wide front, therefore, producers now faced a need of meeting the requirements of distributors for
restocking as well as for larger sales to customers whose incomes and borrowing propensity, were both high and rising. And if conditions appeared
favorable on the side of demand, they were also satisfactory on the side
of supply. Materials were more readily available than a few months earlier,
and the relaxation of governmental restrictions on their use permitted
a rising volume of output, particularly of automobiles. Hence production
moved forward rapidly. Employment expanded, hours of work lengthened,
hourly earnings rose, and weekly earnings rose faster still. With incomes
rising, consumer expenditures expanded briskly. Indeed, from the fall of
1952 through the first half of 1953 the increments of consumer spending,
which were being bolstered by growing indebtedness, exceeded the increments of disposable personal income. Private investment expenditure and
Government spending, propped by expanded borrowing, added to the rising
monetary demand.
Nevertheless, production and sales gradually fell out of balance in the
early months of 1953. The reason was partly that business requirements
for additions to their inventories had been fairly well met by the beginning
of the year, when it became clear that quicker deliveries could be counted
on. The reason was partly that, while demand was high, business firms had
apparently expected it to be higher still. The reason was also that after
the turn of the year consumer spending turned more in the direction of
services than of commodities. (See Chart 2.) The gap that opened up
early in 1953 between purchases at retail stores and consumer incomes,
though not between consumer spendings of all types and their incomes, is
shown by Chart 7. Since personal income rose with production, while
retail sales moved sluggishly, inventories soon piled up in all hands. (See
Charts 8, 9, and 10.) The annual rate of nonfarm inventory investment
rose from 4 billion dollars in the first quarter of 1953 to 7 billion in the
second quarter, with the highest rate of accumulation concentrated in a
few major durable goods industries—motor vehicles, other transportation
equipment, and primary metals.
The sluggishness of retail sales in the early months of 1953, together with
excessively sanguine production schedules, brought about a condition that
could not long continue. The reshaping of the defense program also
21
affected inventories, which here and there became redundant in relation
to the reduced military production rates in prospect. By mid-year, manufacturers in numerous industries were curtailing operations, so as to bring
output and inventories into better adjustment with their orders and sales.
First, overtime was reduced or eliminated, then some workers were laid
off. Meanwhile, the rise in hourly earnings was checked, and average
weekly earnings stopped rising. But the declines in production were generally moderate and there were few signs of distress selling. In all, manufacturing employment (adjusted for seasonal) decreased by about 950,000
between June and December, with 70 percent of the decrease occurring in
the durable goods sector. The decrease in manufacturing employment
was nearly as large as the decrease in total nonagricultural employment,
since other areas of employment—construction, wholesale and retail trade,
transportation, and so on—experienced little change in the aggregate.
(See Chart 5.) Basic wage rates in these fields of employment also continued, in general, to move upward. This fact, combined with fairly stable
over-all employment, goes far to explain the approximate steadiness of personal income in the second half of 1953.
The contraction since last June or July has thus far been largely in the
nature of an inventory adjustment, as Chart 11 and Table 7 indicate. Apart
from the reduced expenditure by business firms on additions to their inventories, total expenditure has been nearly unchanged since mid-year. Further, the major categories of final expenditure have themselves remained
remarkably stable. There have been shifts within the total of consumer
expenditure, but little change in the total itself. Similarly, there have been
shifts within the total of governmental expenditures, with Federal outlays
declining since the second quarter and State and local outlays increasing,
but again approximate stability in the whole. There apparently was a very
slight dip in consumer spending, as well as in business outlays on fixed capital investment, toward the end of the year. However, other categories of
final expenditure offset these diminutive declines. The sum of final expenditure expressed as an annual rate, which was 363.6 billion dollars in the
second quarter and 364.5 billion in the third, came to 365.0 billion in the
fourth. But the figures for the last quarter are still uncertain and, such
as they are, indicate an inventory readjustment in the second half of 1953
and little else.
Thus far the decline of inventory additions has been largely a corrective
movement, designed to bring production into better balance with sales. It
appears from the information at hand that, apart from the defense-goods
industries, the inventory adjustments have been largely responses to current
sales rather than protective movements geared to unfavorable forecasts of
future sales. It is well to recognize, however, that an inventory readjustment can affect other types of spending and communicate itself to the stream
of business and consumer spending as a whole. The next chapter will
consider this possibility at some length.
CHART 4
LABOR FORCE
MILLIONS OF PERSONS*
MILLIONS OF PERSONS*
70
TOTAL LABOR FORCE
70
ARMED FORCES*
UNEMPLOYMENT
60
60
50
50
40
40
30
30
INONAGRICULTURAL EMPLOYMENT:
20
20
10
10
m*
0 mill. tiiiil« m.l.f mill n u I n j n I n m h i rn I n :m i n ml tunbtitjijM.Ithiu i\.\ »ti 11 0
PERCENT
PERCENT
10
li mullinn i i i i i i i n
1946
*
10
UNEMPLOYMENT
AS PERCENT OF CIVILIAN LABOR FORCE
1947
1948
14 YEARS OF AGE AND OVER.
SOURCE: DEPARTMENT OF COMMERCE.
284874M54r—3
iiinli
1949
in
I960
in
1951
1952
1953
CHART 5
EMPLOYMENT IN NONAGRICULTURAL
ESTABLISHMENTS
MILLIONS OF PERSONS
MILLIONS OF PERSONS
' ' S S S S S S S/S/S
S S S S//S
S S S S S S S S S S S S S S S/S
WHOLESALE AND RETAIL TRADED
20
20
10
10
I960
SOURCES: DEPARTMENT OF LABOR AND BOARD OF GOVERNORS OF
THE FEDERAL RESERVE SYSTEM.
1953
CHART 6
INDICATORS OF ECONOMIC
ACTIVITY
INDEX, 1949-53 = 100
INDEX ,1949-53 = 100
120
120
- 110
110 -
100
100
80
80
120
120
INDUSTRIAL PRODUCTION £
X
no
MANUFACTURING EMPLOYMENT *
(BLS-FRB)
N
r—.XT—
' ^*J
v
^£**»t
^v
\s
—
^^^^^
"^
//*•"
/ ,J
X
^'
1 OO
—
90
-
80
M
s^
80 -
110
^^
/ —X I..-C— "*" *«*s^*l
^v/
yX—
X
1
W
NONAGRICULTURAL
•> .<P
Jr
EMPLOYMENT*
**••* %,..••* ** >f
(BLS-FRB)
Oft
11 \J\J
90
f
Is ^^
/
V
70 1 1 1 i i 1 1 1 1 i i
i i ii1 1i 1 1 it
i i i i i 1 i i i ii i i i i i 1 t i i i i 1 1 1 1 1 1 1 1 1 1 1
70
110
110
WHOLESALE PRICES ^v^
100
100
' CONSUMER PRICES
i t 1 1 i i i M I i ii n 11 i i i '
90
1949
1950
1951
1952
MUM
1953
* SEASONALLY ADJUSTED.
SOURCES: DEPARTMENT OF COMMERCE, DEPARTMENT OF LABOR, BOARD OF GOVERNORS
OF THE FEDERAL RESERVE SYSTEM, AND COUNCIL OF ECONOMIC ADVISERS.
90
CHART 7
DISPOSABLE PERSONAL INCOME,
CONSUMPTION EXPENDITURES,
AND RETAIL SALES
BILLIONS OF DOLLARS*
BILLIONS OF DOLLARS*
250
DISPOSABLE PERSONAL
INCOME
(LEFT SCALE)
V
225 -
^
«^
[
J^
+s \ \j
:
/a*** •"•*** ^^
! 75
150
~
A/'
v
y
^
TOTAL
RETAIL SALES
(RIGHT SCALE)
*
175
'••...•••*•
.•
v.... .-.• • • • .-v
''
/
-
^
*
;
t
^~V-\^
^
EXPENDITURES ^V^
(LEFT SC/
***S~~
r
200
>V
r CONSUMPTION >>^ y
1
J
,.
S/lS"*^
^/'•'PERSONAL
-
150
-
125
/-"
—
—
?
^>
125
125
*J
fV_>V^
r^^\
100
*f*"*^
- 75
-
}j
**%
«**•
/
/
50
100
SALES OF NONDURABLE GOODS
STOR ES
'^^^^^
75
-s~s u^^/
/
_
% «'
v>iv
0
,,«»•
,••%••«****%'
i ' \
\
*
%9t
'v^X
•
25,
0 fmillLU.LL! uLi i 1 I [JJ
/V \/"
•
50
25
]
LJ
.' ! I ! ! ! f ) ' 1 I
!950
195!
' I f 1 i 1 ! I 1I 1
1952
•* SEASONALLY AOJUSTfcD A N N U A L RATES.
SOURCES: DEPARTMENT OF COMMERCE, BOARD OF GOVERNORS OF THE FEDERAL
RESERVE SYSTEM,AND COUNCIL OF ECONOMIC ADVISERS.
<?•• ,
.. •••\.^
SALES OF DURABLE GOODS
STOREIS
*
i949
•«*
26
i'i M .1. . i.7> «
1953
CHART 8
RETAIL INVENTORIES AND SALES
BILLIONS OF DOLLARS
BILLIONS OF DOLLARS
25
25
SEASONALLY ADJUSTED
INVENTORIES
20
9
15
15
«SALES
•
il I I I I I I I
Ill
I I I I I I I I I I I I I I I I I I I I I I I I Ii
I I I I I I I II0
RATIO
RATIO
1.80
1.80
1.60
1.60
1.40
1.40
1.20
1.20
-J 1.00
1.00 >-
nTI I I I I I l I I I I
1950
I I I I I I I I I I |?A
1951
1952
1953
» DATA BEGINNING JANUARY 1951 NOT COMPARABLE WITH DATA FOR EARLIER PERIODS.
SOURCE: DEPARTMENT OF COMMERCE.
27
CHART 9
WHOLESALE INVENTORIES AND SALES
BILLIONS OF DOLLARS
BILLIONS OF DOLLARS
15
15
RATIO
1.60
RATIO
1.60
1.40
1.40
1.20
1.20
1.00
1.00
INVENTORY/SALES RATIO
-J.80
.80<h
i i iI
0
I960
1951
SOURCE: DEPARTMENT OF COMMERCE.
t it t iIiiii t fn
I iI
1952
1953
CHART 10
MANUFACTURERS' INVENTORIES
AND SALES
BILLtONS OF DOLLARS
BILLIONS OF DOLLARS
50
50
SEASONALLY ADJUSTED
45
45
XT
40
40
INVENTORIES
35
35
30
30
20
20
15 i i i Iii i i i
1950
1951
SOURCE: DEPARTMENT OF COMMERCE.
1952
i ii i I it
1953
- 15
<
TABLE 7. Gross National Product or Expenditure During 1953
[Billions of dollars; seasonally adjusted annual'rates]
19 53
Expenditure group
Gross national product: total. .
__ .
Change in business inventories
Final expenditures* total
Personal consumption expenditures: total
Durable goods.
__
Nondurable goods
Services
Gross private fixed investment: total
New construction
_.
Producers' durable equipment
_.
..
._ _
_
Net foreign investment
Government purchases of goods and services: total
Federal
_
_
State and local
___
First
quarter
Second
quarter
Third
quarter
363.4
370.7
368.8
365.0
4.3
359 1
7.1
363 6
4.3
364 5
.0
365 0
227.7
30.2
121.2
76.3
230.4
30.7
122.1
77.6
231.0
30.4
121.3
79.2
230.5
29.5
120.5
80.5
51.1
25.0
26.2
52.2
25.3
26.9
52.0
24.9
27.1
51.5
25.0
26.5
-2.1
-2.5
—2.1
82.4
57.4
24.9
83.5
58.9
24.6
83.6
58.4
25.2
Fourth
quarter J
-1.0
84.0
57.7
26.3
i Estimates based on incomplete data; by Council of Economic Advisers.
f NOTE.—Detail will not necessarily add^to^totals because of rounding.
[ Source: Department of Commerce (except~as~noted). •
CHART 11
GROSS NATIONAL PRODUCT AND
INVENTORY CHANGE
BILLIONS OF DOLLARS*
400
BILLIONS OF DOLLARS*
400
— INVENTORY CHANGE
300
300
CROSS NATIONAL PRODUCT
V
FINAL EXPENDITURES
200
200
ol I I I
I I I
I I I
I I I
M l
i l l
I I I
I I I
1946
1947
1948
1949
1950
1951
1952
1953
* SEASONALLY ADJUSTED ANNUAL RATES.
SOURCES: DEPARTMENT OF COMMERCE AND COUNCIL OF ECONOMIC ADVISERS.
It is also important to recognize the broad teaching of history that, in the
course of a protracted economic expansion in which monetary inflation has
played a large role, some distorting speculative movements and some misallocations of resources are bound to develop. An economy that has
reached a point where it must operate extensively on an overtime basis,
as ours did in 1953, cannot easily increase physical output, but can very
readily diminish it. Such an economy is sensitive even to minor disturbances,
especially when inflation is kept in check, as it was during the first half of
1953. Unfavorable cost-price relations in some sectors of the economy
doubtless contributed to the imbalance between production and sales that developed in the early months of the year. The cost-price "squeeze" in agriculture, of which much has been heard recently, continued in 1953, as Chart
12 shows. A similar situation developed in the lead and zinc industries, as
Chart 13 indicates, and the list of such cases could be lengthened. It does
not seem, however, that unprofitable business situations had developed on
any scale by the middle of 1953. Further, one of the outstanding features
CHART 12
PRICES RECEIVED AND PAID BY FARMERS
INDEX, I9IO-I4«IOO
320
INDEX, 1910-I4« 100
320
300
-
- 300
280
-
280
260
-
- 260
••
240
- 240
-
4
220
I i t. i
220
1950
1951
SOURCE: DEPARTMENT OF AGRICULTURE.
1953
of the latest phase of the expansion since 1939 has been its comparative
freedom from speculation. In recent years, the behavior of security markets has been rather subdued. And while there was a strong speculative
surge in commodities right after the invasion of Korea, it had spent itself
before 1953.
CHART 13
COSTS AND PRICES
LEAD AND ZINC INDUSTRIES
INDEX, 1947-49 =100
INDEX, 1947-49 « 100
180
180
160
- 160
140 -
-
140
- 120
120 -
WHOLESALE PRICE
OF MATERIALS, SUPPLIES,
AND EQUIPMENT
BOUGHT
100
100
60
60
I960
1951
1952
1953
SOURCES: DEPARTMENT OF LABOR AND AMERICAN METAL MARKET CO.
CREDIT AND MONETARY DEVELOPMENTS
The changing pace of general business activity during the past year was
closely reflected in developments in the sphere of money and credit. The
demand for all kinds of credit, which had been strong in the second half
of 1952, continued to be active in the first half of 1953. After the removal
of Regulation W in May 1952, consumer instalment credit increased by
the record amount of 4.6 billion dollars in the year ended June 1953. A
huge increase occurred also in long-term corporate debt, State and local
debt, and real-estate mortgage debt. Business loans at banks increased
vigorously in the closing months of 1952, and declined less than seasonally
in the first half of 1953. An exceptionally high rate of saving made it
possible to carry through this vast expansion of credit despite a policy of
monetary restraint by the Federal Reserve System, but not without a rise
of interest rates, which was sharp after mid-April. (See Chart 14.) A
long-term, 3*4 percent Treasury bond announced in April, first went to a
premium, then broke par in May. The volume of new private flotations
continued at a very high level, but some difficulties were encountered at
that time in marketing securities and placing mortgages.
By late spring it became clear that credit markets were characterized
by excessive tension. With inflationary pressures abating, the Federal
Reserve System provided additional reserve funds to the commercial banks.
As it turned out, the demand for credit by mortgage borrowers and issuers
of corporate, State, and local securities remained high in the second half of
the year. The Federal Government was also a heavy borrower. The
increase in consumer credit tapered off, however, and the increase in business loans at banks was much less than seasonal. Member banks were
therefore able to reduce their discounts at the Federal Reserve Banks, as
CHART 14
MONEY RATES
PERCENT PER ANNUM
PERCENT PER ANNUM
4.0
4.0
3.0 —
—
2.0
— 2.0
-
1953
1949
SOURCE: BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM.
33
3.0
CHART 15
PRIVATELY HELD MONEY SUPPLY
BILLIONS OF DOLLARS
200
SEASONALLY ADJUSTED
BILLIONS OF DOLLARS
200
I8Q
180
CURRENCY + DEMAND DEPOSITS
•f TIME DEPOSITS
160
120
160
-
-
120
DEMAND DEPOSITS + CURRENCY
100 -
,- 100
DEMAND DEPOSITS ADJUSTED
CURRENCY OUTSIDE BANKS
0
ft!
F rl h M T r | f M
ft
In t I f f f f m f n n f t
SOURCES: BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM,
NATIONAL BUREAU OF ECONOMIC RESEARCH.
AND COUNCIL OF ECONOMIC ADVISERS.
34
well as to expand total loans and investments, and to meet a gold outflow
and the usual currency drain. By late fall these developments eased the
credit market as a whole. Yields on all classes of securities declined,
especially the short-term rates.
The increase in total loans and investments of commercial banks was
considerably smaller in 1953 than in 1952. A rather sharp decrease in
holdings of Government securities in the first half of the year was approximately offset by purchases in the second half. The increase in bank loans
was also smaller than in 1952. For the year as a whole, the increase in demand deposits and currency in the hands of the public was considerably
less than, while the increase in time deposits was about the same as, in 1952.
(See Charts 15 and 16.)
CHART 16
BANK LOANS AND INVESTMENTS
BILLIONS OF DOLLARS
BILLIONS OF DOLLARS
160
160
TOTAL
(ALL COMMERCIAL BANKS)
140
140
120
120
. INVESTMENT IN
U.S. GOVERNMENT SECURITIES
100
100
80
80
60
60
40
40
BANK LOANS;!
20
20
..t. *..*...<...! J * t. i..
1951
1952
f J..Y.3.J.. t j
1953
END OF MONTH
SOURCES: BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM AND
COUNCIL OF ECONOMIC ADVISERS.
PRICES AT WHOLESALE AND RETAIL
The differential between the costs of industrial raw materials and prices
of finished industrial commodities, which narrowed ominously soon after
the invasion of Korea, continued to widen in 1953. In general, industrial
prices rose somewhat during 1953. On the other hand, the prices of indus-
35
trial raw materials and farm products (whose decline started early in 1951)
continued to fall, though at an irregular and much reduced pace. The
over-all index of wholesale prices covered up these divergent movements
and changed very little: it stood at 109.6 (1947-49=100) in December
1952, at 109.5 in June 1953, at 111.0 in September (the peak for the year),
and at 110.1 in December 1953. (See Charts 17 and 18.)
The outstanding development in primary markets during the year was
the decline in the prices of the major farm products. Record supplies and
sharply curtailed exports more than offset the supporting influence of a
strong domestic demand. In mid-December, grower prices of farm products averaged 6 percent below prices a year earlier. Beef cattle prices were
down nearly a fourth as the huge slaughter, induced partly by the drought,
moved into consumer markets. Potato prices were less than one-half of the
December 1952 level. Price declines were registered for most of the grains,
cotton, oil seeds, and milk and poultry products. In mid-December, prices
CHART 17
WHOLESALE PRICES
RAW AND FINISHED GOODS
INDEX, I947-49«!00
160
INDEX, 1047-49•100
160
-
-
140
120 -
-
120
I4O
100
100
1950
1951
1952
SOURCE: BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM,
BASED ON DATA FROM DEPARTMENT OF LABOR.
36
1953
CHART 18
WHOLESALE PRICES
FARM AND INDUSTRIAL
INDEX, 1947-49 = 100
I N D E X , 1947-49 a 100
120
120
OTHER THAN FARM
PRODUCTS AND FOODS
(INDUSTRIAL)
I 10
10
-sw/A
100
FARM PRODUCTS
k
v
90
80
100
90
I I I I I I I I 1I I
I960
I I I III I I II
1952
1951
80
1953
SOURCE: D E P A R T M E N T OF LABOR.
of farm products averaged 91 percent of parity, compared with 96 in
December 1952.
The decline in farm prices might have been expected to lead to a fall
in the cost of living. This did not happen. Indeed, the consumer price
index for 1953 averaged a trifle above the 1952 level. During 1953 the
index moved within a very narrow range, yet it had a slight upward tilt—
the net increase from December 1952 to December 1953 was seven-tenths
of one percent. Some increase occurred in most major classes of consumer
prices, except foods, which showed a net decline of 1.3 percent over the
year.
The lack of close parallelism between wholesale and consumer prices is
due to various factors. (See Chart 6.) In the first place, the consumer
price index includes such items as housing and other services that have
no place in the wholesale price index. In the second place, the consumer
index reflects a much higher degree of commodity processing than does the
wholesale index. In the third place, even the prices of identical commodi-
37
ties are ordinarily more sluggish in retail than in wholesale markets. The
decline in farm prices of food products is not fully reflected in the prices
of foods at retail, partly because the processing of raw foodstuffs has been
increasing, partly because labor and transportation costs have been rising,
and partly because retailers often set their prices on the basis of what they
have actually paid rather than on current wholesale quotations.
But it is not the behavior of food or apparel prices that explains the slight
upward tilt of the consumer price index during the past year. The upward
push of the index can be traced largely to three categories—rents, medical
care, and transportation (see Chart 19). Rents are and have been for
some time in a stage of decontrol, with most States and municipalities not
seeing fit to continue the controls. Rents, moreover, are often based on
long-term contracts. Prices of medical service are heavily governed by
custom rather than market conditions. The prices of transportation services are usually regulated by public service commissions and respond slowly
to changes in costs. In short, the things that have been sending the con-
CHART 19
CONSUMER PRICES ON A POSTWAR BASE
INDEX, 1947- 49 - 100
INDEX, 1947-498(00
-
f30
120 —
— 120
130
— NO
100
100
90
1950
SOURCE: DEPARTMENT OF LABOR.
1953
sumer price index up relate to markets that are still in process of adjusting
to the price revolution of the past ten to fifteen years. (See Chart 20.)
While the dynamic portion of the price system is no longer showing any
over-all increases, the more passive portion—the part governed by contract,
custom, and governmental regulation—is still in process of catching up.
The notion that an inflation can be stopped all at once is naive. What can
be stopped is the injection of new inflationary fuel—not the consequences
of inflationary fuel already pumped into the system. The fact, however,
that the index of consumer prices rose very little during 1953 is an indication
that most of the earlier inflationary fuel has already burnt itself out.
CHART 20
CONSUMER PRICES ON A PREWAR BASE
INDEX, 1939s 100
250
INDEX, 1939 «IOO
250
- 225
225 -
200
200 -
175 -
150 -
- 125
125 -
100
100
1940
1945
1950
1953
SOURCE: DEPARTMENT OF LABOR.
WAGE MOVEMENTS
The removal of controls early in February 1953 had apparently as little
effect on the year's wage movements as on its price developments. A fairly
substantial number of wage increases and changes in fringe benefits that
were awaiting official approval were put into effect shortly after controls
2848,74—54
4
39
CHART 21
AVERAGE HOURLY EARNINGS IN
SELECTED INDUSTRIES
DOLLARS PER HOUR
2.50 2.25 2.00 -
I960
NOTE: DATA ARE FOR PRODUCTION WORKERS OR NONSUPERVISORY EMPLOYEES.
SOURCE: DEPARTMENT OF LABOR.
1953
CHART 22
AVERAGE WEEKLY EARNINGS IN
SELECTED INDUSTRIES
DOLLARS PER WEEK
DOLLARS PER WEEK
100
90
100
—
BUILDING CONSTRUCTION
90
\
CLASS I RAILROADS
80
/^g
70
^v
,.-'••
60
/^\/
~.
\^ X^
^
80
70
/
MANUFACTURING
60
50
50
• RETAIL TRADE
40
i t t t i i I t i ii
100
100
- 90
80
I960
1952
1951
1953
* REFLECTS W O R K STOPPAGE.
NOTE: DATA ARE FOR PRODUCTION W O R K E R S OR NONSUPERVISORY EMPLOYEES.
SOURCE: DEPARTMENT OF LABOR.
41
were discontinued. However, the monthly rate of increase in average
hourly earnings for factory workers (excluding premium pay for overtime)
during the period from mid-January 1953 to the end of the year was somewhat below that during the period of controls and was less than half the
monthly rate of increase during the second half of 1950, before controls
were imposed.
General wage increases granted in the larger manufacturing settlements
during the eleven months after the removal of controls averaged about
7 cents an hour. However, substantial groups of workers, notably in the
textile and lumber industries, received either no general wage increase
or adjustments (up or down) of 1 or 2 cents resulting from the operation
of cost of living escalator clauses. On the other hand, the apparel industries put into effect the first widespread wage increase since late 1950.
The average rise in hourly earnings of all factory wage earners was about
6 cents or 3.6 percent, excluding the effect of premium pay for overtime.
Wage trends among nonmanufacturing industries also varied. In construction, where activity was extremely high throughout the entire year,
wage increases were widespread; union scales in urban areas rose an
average of 4 percent between January and October 1953. Rates of pay
in coal mining remained unchanged as the parties to the collective bargaining agreements failed to serve notice of a reopening of these contracts
in the fall of 1953. The average level of gross hourly earnings rose in
wholesale and retail trade, local transit, electric and gas utilities, and some
other nonmanufacturing industries. (See Chart 21.)
Hours of work in manufacturing began declining in the spring and were
lower at the end of 1953 than late in 1952, mainly because of reductions
in the amount of overtime work. Average weekly earnings at the end of
the year were almost the same as at the beginning of the year, since an
increase in hourly earnings offset a shorter workweek and a drop in overtime
payments. In building construction and most of the service industries,
weekly earnings rose. (See Chart 22.)
CORPORATE PROFITS
From their low point in the third quarter of 1952, corporate profits after
taxes (seasonally adjusted) rose sharply in the fourth quarter, then more
gradually through the first two quarters of 1953. With the easing of activity in many industries after midyear, profits turned downward. But available information suggests that the total for the full year 1953 was higher
than the 1952 figure and perhaps not much different from 1951. Profits
after taxes for the first three quarters of 1953 were, in terms of seasonally
adjusted annual rates, a little over 20 billion dollars, compared with 18^2
billion in 1952 as a whole. (See Chart 23.)
Corporate profits before taxes expanded more than after-tax profits. In
the first nine months of 1953 profits before taxes were approximately 15
percent above the corresponding period of 1952. The sharpest advances
42
were recorded in general by the manufacturing industries, where profits had
suffered most from the 1952 inventory readjustment and the work stoppages
in steel. In manufacturing as a whole, before-tax profits were about onefifth above the first three quarters of 1952. The communication and public utility group recorded increases of around one-sixth. Experience in
other industries was mixed but in most cases better than in the corresponding part of 1952. Profits, however, are a peculiarly volatile type of income. Full-year comparisons of 1953 with 1952 are expected to be less
favorable than for the first nine months, since profits were moving up in
late 1952 and down in late 1953.
The figures cited on corporate profits are, of course, not comparable
with those for wages. The former relate to total profits of the corporate
world; the latter relate to average earnings per hour or week. To facilitate comparisons, Table 8 shows, separately, labor income, dividends, and
undistributed corporate profits in the form of aggregates for recent years.
It does not appear from these figures that corporate profits have risen at the
expense of labor income or vice versa.
CHART 23
CORPORATE PROFITS
BILLIONS OF DOLLARS
60
50
BILLIONS OF DOLLARS
60
-
10
UNDISTRIBUTED
PROFITS- '' ^£ ^
1953
* SEASONALLY ADJUSTED ANNUAL RATES.
J/NO ALLOWANCE FOR INVENTORY VALUATION ADJUSTMENT.
SOURCE: DEPARTMENT OF COMMERCE.
43
—
20
—
I0
TABLE 8. Relation of Labor Income to Dividends and Undistributed Corporate Profits
Corporate profits after taxes
Labor
income l
Period
Dividends
Total
Ratio of labor income to:
Dividends
Undis- and untributed distribcorporate uted corprofits
porate
profits
Dividends
Undistributed
corporate
profits
Billions of dollars
1946
1947
1948
1949
1950
1951
1952
1953
_
2
_
_
111.1
122. 3
134.9
134.2
13.9
18.5
20.7
16.3
5.8
6.6
7.2
7.5
8.1
12.0
13.5
8.8
8.0
6.6
6.5
8.2
19.2
18.5
18.7
17.9
13.7
10.2
10.0
15.2
146.5
170.7
184.9
199.1
22.7
20.1
18.6
()
9.1
9.2
9.1
9.4
13.6
10.9
9.5
(')
6.5
8.5
9.9
(')
16.1
18.6
20.3
21.2
10.8
15.7
19.5
(»)
9.6
9.6
10.3
(')
21.3
21.2
21.0
20.8
17.6
17.5
20.2
(»)
3
Seasonally adjusted annual rates
1953: First quarter.
Second quarter
Third quarter J
Fourth quarter
195.8
199.3
201.9
199.3
20.3
20.8
19.6
0)
9.2
9.4
9.6
9.6
11.1
11.4
10.0
(8)
i Wage and salary receipts plus other labor income. (See Appendix Table G-9, footnote 1.)
* Estimates based on incomplete data; fourth quarter by Council of Economic Advisers.
»Not available.
NOTE.—Detail will not necessarily add to totals because of rounding.
Source: Department of Commerce (except as noted).
FARM INCOME AND EXPENDITURE
The principal adverse shift in incomes during 1953, as in other recent
years, occurred in farming. A decline in farm prices was offset by an
increase of marketings but not sufficiently to maintain cash receipts at the
1952 level. Production expenses also declined but not nearly so much as
gross income, with the result that the realized net income fell 7.4 percent.
This unfavorable development was severest in the case of cattle raising. It
was experienced, however, in many types of farming and was widely diffused
among the States.
There is no clear evidence that rural purchases of general merchandise
were lower in 1953 than in 1952 although, in common with the rest of the
economy, some decline in rural purchases was apparent in the second half
of the year. Nonetheless, the reduced income of farmers, following as it did
earlier declines, led to smaller purchases of farm equipment, machinery, and
building materials. Retail sales of farm equipment and machinery ran
about 17 percent less than in 1952. Gross investment in farm buildings,
motor vehicles, and other machinery and equipment declined by about 600
million dollars, or 11 percent. But even in 1953 gross farm investment was
larger than the normal wear and tear on the existing farm plant and
equipment.
44
INTERNATIONAL ECONOMIC TRANSACTIONS
The outstanding international development of the past year was the
achievement of a broadly balanced pattern of trade and payments, at high
and growing levels of economic activity. This has been accomplished in an
environment of general monetary stability and diminishing controls, both
within and among the nations of the free world. Some countries, however,
still depend in part on United States military expenditures abroad, as well
as on a variety of restrictions on dollar transactions.
There was little change between 1952 and 1953 in the export balance of
the United States, when military grant-in-aid shipments are included with
exports and military expenditures abroad are counted with imports. The
CHART 24
U. S. BALANCE OF PAYMENTS ON
CURRENT ACCOUNT
BILLIONS OF DOLLARS
BILLIONS OF DOLLARS
25
25
20
15
15
10
10
IMPORTS EXCLUDING U.S. MILITARY
EXPENDITURES ABROAD-^
1947
1948
1949
1950
1951
I/ INCLUDES UNILATERAL TRANSFERS OTHER THAN U.S. GOVERNMENT GRANTS.
SJ JANUARY-SEPTEMBER DATA AT ANNUAL RATES.
SOURCE:
DEPARTMENT OF COMMERCE.
45
1952
1953^
past year witnessed, however, an important shift in the balance on current
transactions between the United States and foreign countries, the broad
features of which are displayed in Chart 24. Excluding transfers of militaryaid goods, which require no dollar financing by the recipient countries, the
United States had an estimated deficit of 700 million dollars on current
account in 1953. This contrasts with a surplus of 1.7 billion in 1952, 10.7
billion in 1947, and about 5.5 billion in 1948 and 1949.
Thus, the free world has continued to make progress toward economic
and financial strength. In the postwar period, taken as a whole, foreign
economies have been able to adjust to a sharp reduction of United States
economic aid (including loans), and still maintain a high level of imports
from the United States. Their gold and dollar holdings have increased by
about 8 billion dollars in the last five years and are now 50 percent higher
than in 1937. Official monetary reserves outside the sterling area are probably better distributed today than ever before, from the standpoint of their
relation to the volume of imports and the different needs of foreign countries
for liquid balances to meet fluctuations in export earnings.
Numerous factors have contributed to the great improvement in the
dollar position of foreign economics. The outstanding fact is the great
increase in their productive power, which has enabled them to increase
exports to the United States while meeting their own enlarged domestic
requirements. Some part, of course, of the current dollar earnings of
foreign countries arises from our Government's expenditures abroad for
military goods and services. These amounted to an estimated 2.5 billion
dollars in 1953, which is equal to about 15 percent of our total payments
for foreign goods and services and about equal to the increase in foreign
holdings of gold and dollar balances during the year.
Changes since 1947 in the current account balances of major trading
areas with the United States are shown in Chart 25. The most notable
improvement was recorded in the transactions of Western Europe, which
closed with an estimated surplus of 1.5 billion dollars in 1953, in contrast
to a deficit of over 5 billion in 1947. The industrial production of
Western Europe is now running about 40 percent above 1938, and the
volume of exports has risen by some 60 percent, while imports—including
raw materials processed for export—are only slightly above their prewar
level.
The recovery of the sterling area from the post-Korean deficits began in
mid-1952 and continued in 1953 with the accumulation of a surplus of
about half a billion dollars in its current transactions with the United States.
The growth of economic activity throughout the free world sustained the
volume of exports of the independent sterling area countries and facilitated
the adaptation of their economies to the collapse of the raw materials price
boom in 1951. The same was generally true of raw material exporting
countries.
CHART
25
CURRENT ACCOUNT BALANCES
WITH THE U. S.1
BILLIONS OF DOLLARS
BILLIONS OP DOLLARS
+5
WESTERN EUROPE AND DEPENDENCIES
STERLING AREA
-5
-10
-10
-15
-15
1947
1948
1949
1950
195)
1952
1953^
jy EX PORTS EXCLUDE MILITARY TRANSFERS. IMPORTS INCLUDE NET UNILATERAL TRANSFERS
OTHER THAN U.S. GOVERNMENT GRANTS.
^JANUARY-SEPTEMBER DATA AT ANNUAL RATES.
SOURCE: DEPARTMENT OF COMMERCE.
The current account deficit of the Western Hemisphere in 1953 is
traceable entirely to Canada whose deficit was offset by United States
private investments and by net exports to other countries. The countries
of Latin America, taken as a whole, were close to a balance in their 1953
current account; but it should be noted that this resulted partly from the
tighter import controls imposed by some of them. Difficult readjustments
are still in prospect in Far Eastern countries whose normal trade patterns
were distorted by the Korean war and other political disturbances.
47
SUMMARY
This chapter has attempted to present and interpret the salient economic
developments of the year, from the viewpoint of the American economy,
with only the minimum of detail needed to grasp the meaning of what has
occurred. To help others to arrive at their own interpretations, extensive
statistical tables are presented in Appendix G.
In the interest of balanced judgment, it will be useful to keep in mind
the following facts and considerations about the past year: (1) The year
was very prosperous with output at a record level, incomes widely distributed,
unemployment low, and prices stable on the average. (2) In the first
half of the year the economy used much of both its manpower and equipment on an overtime basis. (3) If the buoyant demand for business credit
in the early months of the year had not been restrained, prices would
have risen more than they did, since production was at a practical maximum
for the time being. (4) Our economy is a system of interdependent parts.
When it operates at overtime, it is sensitive to even minor disturbances, such
as always keep occurring in the sphere of both private and public action.
(5) In a free economy a perfect balance between production and sales is
an ideal that, at best, can only be approximated. (6) Although retail
sales remained high, they failed to match production in the first half of
the year. Meanwhile expenditures on services (quite apart from housing)
increased considerably, and personal holdings of liquid assets were much
enlarged. (7) The letdown of economic activity in the second half of the
year was slight. (8) Apart from businessmen's purchases of additions to
inventories, expenditure in the last quarter of 1953 was substantially at the
same rate as in the second quarter. (9) The year closed with our economy
at a very high level of activity when judged by any reasonable historical
standard. (10) On the international front, monetary inflation was generally
stopped, and foreign reserves of gold and dollars were greatly augmented.
Chapter 3
Governmental Policy in a Year
of Economic Change
T
HROUGHOUT 1953 the Federal Government was guided by the
broad objectives outlined in Chapter 1—the stimulation of output and
employment, the protection of the purchasing power of the dollar against
further shrinkage, the wide distribution of the fruits of expanding activitv.
and the extension of international trade and investment.
PREVENTING INFLATION
Economic activity increased rapidly during the early months of the
year. Production and employment kept rising, while unemployment declined to ever-lower levels and reached 1.8 percent of the civilian labor
force in October—the lowest recorded rate of unemployment since World
War II. Although prices remained fairly stable on the average, the prices
of many individual commodities reflected ominously the increasing pressure
of demand. Under the circumstances, wages could be expected to move
upward—and to some extent they did. The possibility of an upward
spiral of prices and wages was enhanced by certain steps taken by the
Government to broaden the scope of private enterprise—especially the removal of price and wage controls. There was talk in these early months of a
"confidence boom," as the American people saw themselves free to embark
on new productive enterprises.
Economic life in a dynamic society is in constant flux. As the economy
undergoes changes, first one problem, then another, comes to the surface
and requires attention. During the first months of the year, when the
economy seemed to be entering a new phase of inflation, the immediate
concern of the Government was the protection of the value of the people's
money. Both credit policy and fiscal policy were aimed at this objective.
The Federal Reserve System allowed the buoyant demand for credit to
adjust itself to the restricted market supply. In January the discount
rate was raised from 1% percent to 2 percent, thus bringing it into line
with other rates and discouraging member bank borrowing at the Reserve
Banks. In response to their tight reserve position, commercial banks early
in 1953 reduced their holdings of Government securities. The Treasury
harmonized its policy with that of the Federal Reserve System, by seeking
to obtain from investors other than banks the funds that it needed to finance
the Government. Interest rates of all sorts rose steadily and the rise, up
to a point, was salutary. It served to check the effective demand for pri-
49
vate loans, made lenders more discriminating in extending new credits, and
thus not only restrained the growth of credit but also prevented the quality
of the outstanding debts from deteriorating, as is their wont when business
booms. At the same time, a Presidential Tax Message to the Congress, on
May 20, 1953, recommended that the excess-profits tax, which was scheduled
to expire on June 30, 1953, be extended for another six months. Although
this tax was injurious to enterprise and hurtful to new firms trying to grow,
it seemed imprudent to cut any tax at a time when the Government
was operating at a deficit and when there was still a latent danger of
inflation.
The restrictive monetary and debt management policies pursued in the
early months of the year had, however, a more potent effect than was
generally expected. It was not that the policies were of themselves highly
restrictive. At its peak the open-market commercial paper rate was only
2.75 percent, and the yield on high-grade corporate bonds only 3.40 percent. But the business and financial community, having become accustomed over many years to credit policies that facilitated the monetization
of the Federal debt, no longer clearly remembered the discipline of monetary management aimed at preventing inflationary booms, with which
an earlier generation had had experience. A new 30-year Treasury issue
at 3% percent, a lifting of the maximum interest rate chargeable on FHAinsured and VA-guaranteed mortgages to 4/2 percent, a generally rising
yield on Government bonds and other securities—all these developments,
combined with neutrality on the part of the Federal Reserve authorities,
were new and startling to many bankers, mortgage lenders, and businessmen
who, while gravely fearing inflation and wishing to see it curbed, apparently
underestimated the practical adjustments that its containment would
require.
The demand for credit that developed in May and June was not, therefore, confined to the funds needed for current operations. Part of it was
anticipatory, generated by fears or expectations that interest rates would
rise higher, perhaps considerably higher, while new credit might become
difficult to obtain. In a modern money market, the forces that shape
expectations of borrowers are bound to influence lenders as well. At the
very time when the demand for credit was rising insistently, some lenders
became reluctant to commit funds for future use at existing interest rates,
and their hesitation added perceptibly to the strain on the money and capital
markets.
CONTROLLING THE READJUSTMENT
The Federal Reserve authorities responded to the incipient, and possibly
dangerous, scramble for liquidity with a degree of promptness and vigor
for which there is no close parallel in our central bank history. Between
early May and early July the Federal Reserve System increased its holdings
of United States Government securities by 1.2 billion dollars. By purchasing securities the System augmented the reserves of member banks,
50
reduced their need for borrowing, and improved their ability to extend
credit to consumers, farmers, and business firms. A further, and Systemwide, step was taken on June 24 when the Federal Reserve authorities announced a reduction of reserve requirements from 24 to 22 percent on
demand deposits in central reserve city banks, from 20 to 19 percent in
reserve city banks, and from 14 to 13 percent in country banks. This action
promptly released reserves to every member bank of the System, ended the
current tightness of the credit market, and gave assurance to the business
community that the needs for private credit and Treasury financing during
coming months could be readily met by the banks.
The easing of tension in the money markets was speeded by the realization that the Treasury would coordinate its management of the public debt
with the easier credit policy of the Federal Reserve System. Between
August and December the System again added substantially to its holdings
of Government securities, partly to meet seasonal requirements for currency
and credit, and partly to strengthen further the lending power of the member banks. In the meantime, the Treasury, while adhering to its policy of
lengthening the maturities of the outstanding Federal debt, brought out
issues that competed to a minimum with the demands for long-term credit
by business firms and State and local governments. Interest rates began
declining in June, and in the following months mortgage credit, as well as
credit for other needs, became more plentiful.
FLEXIBILITY IN CREDIT AND FISCAL POLICIES
The maintenance of a high and expanding level of output and employment is a definite objective of our society. So also is the maintenance of a
reasonably stable level of consumer prices. The pursuit of these twin objectives involves the Government in difficult, yet inescapable, responsibilities. The road of reasonably full employment without price inflation is
narrow. There is always the danger that our economy, by moving a little
too far to one side of the road, will enter the zone of inflation, or by moving
too far to the other side, will slip into the zone of contraction. What we
plainly need and want to do is to stay firmly on the road, which means that
we must moderate economic movements before they acquire large momentum. Our ability to do so is limited, however, partly because the economy
is subject to the shifting moods and modes of human behavior, partly also
because the makers of policy cannot predict with scientific closeness the
strength of the responses which their actions may generate. Under the
circumstances, governmental policies must either be flexible, adjusting to
new and unforeseen developments, or run the peril of courting disaster.
But flexible policies, adapted with promptness and vigor, require courage
and candor on the part of Government officials. The success with which
flexible monetary and debt management policies were used in 1953, first to
prevent inflation and later to avert credit stringency, should inspire confi-
dence among all citizens in the capacity and readiness of Government to
respond promptly to changes in economic circumstances.
Fiscal policy is a less flexible instrument than either monetary or debt
management policy for keeping the economy on the narrow path that
separates inflation from recession. But Federal operations are now so large
a factor in our economy that their variations, whether on the revenue or
expenditure side, are bound to have a significant impact on our economy.
The deliberate use of fiscal policy, in the interest of maintaining a sound
economy, bears great promise for the future, and the actions taken in 1953
reflected this concern. Early in the year, when inflation was still a real
danger, it seemed reasonable to expect that in another six or twelve months
the boom might recede and that at such a time some reduction in taxes
would become appropriate. In the meantime, the only proper course was to
maintain taxes while seeking to curtail expenditures. The Tax Message,
submitted to the Congress on May 20, 1953, therefore called for full maintenance of all taxes during 1953, but suggested that taxes might be reduced
in January 1954.
As the year wore on, tax policy was continually reviewed by the Treasury,
not only from the viewpoint of moving toward a budgetary balance, but also
in the light of the economic situation at large and the part that fiscal policy
could play in contributing to economic growth and stability. By late September it was clear that the existing danger of inflation had passed, and that
the prospective reduction of Federal expenditure would justify some tax
reduction. The Secretary of the Treasury therefore announced in the plainest possible language that the Administration, besides relinquishing the
excess-profits tax, would not seek to postpone the reduction of the personal
income tax, averaging approximately 10 percent, scheduled for January 1,
1954. This unequivocal promise of tax relief to both families and business
firms bolstered confidence at a time when trade and employment were slipping slightly. In coming months these well-timed tax reductions are likely
to give substantial support to consumer and investment markets.
Another significant step taken in 1953 was to broaden the scope of credit
policy as a stabilizing tool, by extending its role to the housing industry.
When the Congress originally gave authority to the Federal Housing Administration to insure mortgages, the law specified maximum terms of insurable
loans rather than mandatory terms. As it turned out, the broad powers
conferred by the Congress were, with few exceptions, used over the years
to reduce interest rates on mortgages, to reduce the down payments required
of purchasers, and to lengthen the maturities of the mortgages. The consequence has been that the housing market augmented the total demand for
credit when general economic conditions justified it, and also when they
did not. Last year, when the Congress considered further liberalization
of FHA mortgage credit, the Administration recommended that the liberalization be made permissive, that is, that it be allowed only at the direction of the President. The Housing Amendments of 1953, as passed by the
CHART 26
NEW HOUSING STARTS
THOUSANDS OF UNITS*
THOUSANDS OF UNITS
1,400
PRIVATE RESIDENTIAL (NONFARM)
1951
1953
SEASONALLY ADJUSTED ANNUAL RATES.
SOURCE: DEPARTMENT OF LABOR.
Congress, created a new and highly useful stand-by authority. Instead of
stimulating an increased flow of credit at a time when it was not needed—
as in recent months (see Chart 26), when the annual rate of housing starts
(seasonally adjusted) has been running above one million units—they
permit stimulation at a time when it will aid the economy. How great may
be the stimulating power of the newly gained authority, should economic
conditions justify its use, may be judged from the fact that, on an owneroccupied dwelling costing, say, $12,000, the required down payment under
an FHA-insured mortgage may be reduced from $2,400 to $600, while ,
the period for amortizing the mortgage may be simultaneously extended
from 25 to 30 years.
AIDING AGRICULTURE
A very difficult problem facing the country during the past year was the
readjustment of agriculture. The net income of farmers, which began
declining in 1947, continued to fall during 1953. The restoration of agriculture in foreign countries sharply curtailed American exports, while our
statutory price support levels served to augment accumulating surpluses of
many farm products. Widespread drought added to the agricultural troubles
of the year, especially of cattle farmers. Confronted with these difficulties,
the Government took steps to aid the farm economy. The commitments
of the Commodity Credit Corporation increased by approximately 3 billion
53
dollars during the year. Relief was extended promptly to the farms in
drought-stricken areas. Extensive governmental purchases of beef were
undertaken, with a view to checking a collapse of cattle prices and at the
same time benefiting the school-lunch program. A large gift of wheat was
made to Pakistan, and a program of famine relief to friendly nations was
instituted.
While these and other acts of Government have aided the farmers, it is
well to recognize that they do not provide a permanent solution of the
problems facing American agriculture. To adjust to their new technology
and the altered world economic situation, farmers will need the continued
assistance of Government. But even more important than what the Government does specifically to help the farmer are the policies that it pursues to
help maintain an expanding domestic market. And what is true of agriculture is equally true of other industries. As long as employment and production in the entire economy are at high levels, the adjustment required of
individual industries by shifts in demand or technology can normally be
carried through with greatly reduced hardship. Therefore, an essential
part of the solution of the problems of agriculture, as well as of other industries undergoing structural readjustment, lies in moderating the fluctuations
and promoting the growth of general business.
LOOKING AHEAD
The Federal Government has a special responsibility to use its powers to
curb both inflationary or depressive tendencies of the economy. To discharge this responsibility, it must be in a state of readiness to cope with new
situations that can never be fully foreseen. For this reason, the Council of
Economic Advisers was instructed early in the year to design plans for dealing with a business depression, although none was in sight.
The Council's continuing studies have covered a wide range of private
and governmental measures for preventing and curbing recession. One of
them, devoted to the expansibility of public works, pointed to the need for
developing a continuous inventory of sound projects, classified—among other
ways—according to their cost or divisibility, so that some speed and flexibility
might be gained in a public works program. The study concluded that, although ample engineering plans are now in existence for expanding public
works if that should become desirable in the near future, it would be prudent
to take steps to insure a continuous flow of carefully drawn and sifted plans.
Accordingly, the Bureau of the Budget, despite strenuous efforts to enforce
governmental economy and bring expenditures into line with revenues, on
July 9, 1953 informed the heads of all executive departments and establishments as follows on the budget policy for the fiscal year 1955: "Increased emphasis will be given to the development of plans for authorized
high priority projects to a stage where these projects could qualify for construction at a time when new construction starts would be consistent with
a less restrictive budgetary policy."
54
FOSTERING INDIVIDUAL ENTERPRISE
In this review of governmental policy during the past year, emphasis has
been placed on the steps taken to keep the economy from veering either
toward inflation or toward contraction. Economic stability, as the first
chapter of this Report has brought out, is not only essential for the wellbeing of the American people and of the entire free world, but is one of the
basic requisites of continued progress toward the greater national security
and higher living standards to which our citizens aspire. The American
people will not be long content with employment opportunities that are
merely stable, or with a stationary standard of living. Nor do they wish or
expect their Government to give them jobs and thereby gain control over
their individual lives. But if there is to be expanding private employment,
there must be employers. Their prospect of reward may not need to be
so large as an earlier generation believed, but it must be sufficient to impel
men to assume the risks of enterprise and innovation.
These precepts guided the Government during the past year. One of
the first steps taken was to remove the direct controls of prices, which interfered with the normal function of markets to adjust supply to demand, and
the direct controls of wages, which then needlessly restricted collective bargaining between employees and employers. The Government has also
taken careful and significant steps to redraw the line separating public from
private activities, so that Government could divest itself of functions that
private enterprise can perform more efficiently. Thus provision was made
to dispose of the Government's rubber plants, to liquidate the Reconstruction Finance Corporation, to sell the unprofitable Federal barge lines, to
remove Federal roadblocks to the development of electric power by local
enterprise, private or public, and to encourage—under proper governmental
safeguards—private experimentation with industrial uses of atomic energy.
At the same time., the Federal Government has sought to broaden the scope
of home ownership and of the social security system, so that more people
might gain a greater measure of security in a dynamic environment. To
these important problems, reference is made later in this Report.
INTERNATIONAL ECONOMIC POLICY
The aim of the Federal Government during the past year was to maintain
stability in the field of commercial policy, pending a broad survey of all aspects of our international economic relations. At the President's request
the Congress extended for one year the Reciprocal Trade Agreements program without major amendment, and set up a Commission on Foreign
Economic Policy to recommend appropriate means for the improvement of
international trade—"consistent with a sound domestic economy, our foreign economic policy, and the trade aspects of our national security and total
foreign policy." In line with the President's recommendation, the Congress also enacted the Customs Simplification Act designed to simplify, and
284874—54
5
55
to remove the inequities of, customs regulations. The United States participated in international efforts to stabilize the markets for wheat and sugar.
Extensive military and economic assistance to foreign countries was continued, but with the improvement in the economic strength of Western
Europe, the economic aid program was curtailed. Emphasis was also continued on fostering improvements in the industrial productivity of friendly
countries, in the interest of stimulating their economic development and
raising the living standards of their people.
THE FEDERAL BUDGET
The key to governmental planning for economic growth is, of course,
the Federal budget. Generally speaking, it sums up every activity undertaken by the Government for the people, and every payment by the people
to the Government. The average rate of taxation, by all levels of government, on individual and corporate incomes is now about as high as at the
peak of the war effort against the Axis (see Chart 27), and the total tax
revenue is even higher, since the national income has grown. If economic
incentives are to prove adequate, some reduction of taxes—provided it
does not occur at the cost of weakening the Nation's security—is necessary.
The Government has therefore set about energetically to bring down the
rate of expenditure and thus pave the way for tax reductions, so that
people may have more of their own income to spend instead of having the
Government spend it for them.
Initial efforts have met with success. New obligational authority for
the fiscal year 1954, which was estimated at 71.8 billion dollars in the
Budget Message of January 9, 1953, has been reduced to an estimated 60.7
billion dollars. Budget expenditures were originally set at 77.9 billion
dollars for the fiscal year 1954, or 3.9 billion more than in the preceding
fiscal year. As it now appears, expenditures will be 70.9 billion dollars, or
3.1 billion less than in fiscal 1953. This curtailment of expenditures, combined with higher receipts, has brought the Federal budget within sight of
a balance. The budget deficit, which reached the disconcerting magnitude
of 9.4 billion dollars in the fiscal year 1953, is now estimated at 3.3 billion
dollars for the fiscal year 1954. The improvement in the cash budget for
fiscal 1954 is even more impressive, involving a shift from a cash deficit of
5.3 billion dollars to an estimated cash deficit of about 200 million. The
effort to reduce the scale of governmental expenditure, and with it receipts
from taxation, will be continued in the months and years ahead (see Appendix D), though the precise rate of both the one and the other may need
to be varied according to general economic conditions and the state of our
international relations. In a rapidly changing world, such as we live in,
there is no simple fiscal formula that will be suitable under all conditions.
It must also be recognized that, while it is desirable to bring down the
scale of Government, our society has become so complicated that, quite
apart from the large and continuing needs for defense, the Government now
properly assumes obligations unknown to earlier generations. The im-
56
CHART
27
TAXES AND THEIR RELATION TO INCOME
BILLIONS OP DOLLARS
BILLIONS OF DOLLARS
40
40
PERSONAL TAXES*
30
30
20
20
10
10
^CORPORATE TAXES
I
I
I
I
I
I
I
I
I
PERCENT
I
PERCENT
60
60
50
«
50
I
40
40
CORPORATE TAXES
AS PERCENT
OF PROFITS
30
30
20
20
PERSONAL TAXES
AS PERCENT OF
PERSONAL INCOME*
10
10
1940
1945
1950
U
FOR CORPORATE PROFITS AND CORPORATE TAXES, AVERAGE FOR FIRST 3 QUARTERS.
SOURCES: DEPARTMENT OF COMMERCE AND COUNCIL OF ECONOMIC ADVISERS.
57
1953"
provement in the health, security, and industrial efficiency of the population
is a large and growing concern of Government. So also is the maintenance
of sound banking, competition, and the general conditions of stable economic prosperity. So, too, is the promotion of scientific knowledge—which
is the most important of all factors in the marvelous rise of our industrial
productivity. Thus during the past year, while Federal expenditures were
being cut in many directions, the outlays on research and development—•
including those connected with national security activities—were allowed
to grow. They came to about 2.5 billion dollars out of a total national expenditure on research of 4 billion (see Appendix F). The building of new
knowledge must continue, for it is our surest promise of expanding economic
opportunities in a growing America.
Chapter 4
Appraisal of the Current Economic Situation
A
> WE TURN from 1953 to the current year, we must first of all
recognize the limitations of attempts at prevision. Despite the great
improvement of statistical knowledge, it is impossible to deduce the future
from statistics of the present, or to infer it from records of the past. Only
those who adhere to a mechanistic view of history and of human behavior,
or who are enamored of forecasting formulae, can entertain such illusions.
The best we can hope for is to minimize errors of miscalculation through
making full use of available data, and to give due recognition to those
elements of uncertainty that attach to both the present and the future.
The settling of economic activity during recent months has not caught
American industry by surprise. Long before last summer, alert businessmen were aware that the stimulus of rising business activity from defense
expenditures was likely to lessen. They recognized that a readjustment of
this character, in which a decrease in Federal Government expenditure would
be accompanied by a reduction of taxes, would provide a more durable basis
for business enterprise. The generally prosperous level of economic activity
during 1953 facilitated the corrective process that has been under way in
many lines. Instead of culminating in a single climax of activity, and then
going into a general and abrupt decline, the economy has displayed a considerable diversity of movement, so that continued strength in some quarters
has allowed time for adjustment in others.
The slight decreases of production since mid-summer reflect primarily
a decline in the rate of inventory accumulation. Final purchases of output
by business, consumers, and Government have kept up very well. Thus far
at least, the readjustment process has been largely a matter of reducing
excessive inventories, especially of consumer durable goods. While competition has become keener, business firms have shown little disposition
to liquidate their excess stocks in ways that might aggravate the situation.
By granting more favorable terms, by adjusting prices here and there, and
by applying more effort to selling, businesses should be able to ease their
inventory situations and achieve a better balance between production and
sales during the next few months—providing final expenditures continue at
their recent high and stable level. Such a corrective process seems clearly
to have gone some distance. Over the last two months of 1953 inventories
declined generally, while retail sales were generally sustained. Should this
development continue, the moderate contraction now under way would
come to a halt soon.
59
Within the over-all movement of the wholesale price index, the pattern
of recent changes has been significantly different for farm products, industrial raw materials, and industrial finished goods. The prices of industrial
raw materials dropped sharply from a peak in the spring of 1951, and continued to decline thereafter. The prices of other industrial commodities
declined very moderately from early 1951 through late 1952 and then rose
very moderately through 1953. As a result of these diverse movements,
there existed a sounder price relationship between raw materials and finished
goods at the end of 1953 than in the immediate post-Korean period. Some
downward adjustments in manufacturers' prices for finished goods may
occur during the next few months, reflecting the earlier price decline of
raw materials.
During the recent series of prosperous years, and in contrast to earlier
periods, purchasers of corporate securities have capitalized earnings on
a basis that neither caused a prolonged advance in prices nor absorbed
large amounts of credit. Stock prices pursued a slow downward movement during the first three quarters of 1953, followed by an upturn beginning in September. This change of direction would appear to register
favorable expectations of investors. Although changes in security prices
are not always reliable guides to subsequent business developments, security
market movements sometimes reflect changes before they are recorded in
other statistics.
Economic readjustments require time for completion. Those we have
considered so far have been facilitated by the high level of aggregate
spending throughout the past year. In considering the future, the basic
question concerns the level of final expenditure. To the prospects of the
major classes of expenditure—those by business, consumers, and Government—attention is now directed.
PLANT AND EQUIPMENT EXPENDITURES
Recent surveys indicate that business firms have little disposition to change
their planned capital outlays because of the mild decline in output since
last summer. A survey conducted two months ago by the Department of
Commerce and the Securities and Exchange Commission disclosed that
businesses expected to maintain the average 1953 rate of capital spending
during the first quarter of 1954. Plans of electric utilities and commercial
enterprises pointed to an increase over 1953 and, with the exception of
railroads, other major industry groups expected their spending early in 1954
to be close to 1953 rates. The McGraw-Hill survey of investment plans
for 1954 indicated that businesses intended to spend for plant and equipment
about 5 percent less than the unprecedented 28 billion dollars spent in 1953.
Statistics on contracts for-commercial and industrial construction likewise
indicate a high level of investment expenditure in the early months of 1954.
In evaluating the outlook for fixed investment, it is also well to examine
"norms" provided by past experience. Historical data indicate a steady
60
growth in the physical stock of capital from 1910 to about 1930, a virtual
flattening out of the curve during the depression of the thirties, and a
pronounced growth since the end of World War II. The stock of capital
expressed as a ratio to output shows no definite trend in the two decades
prior to the Great Depression; it rises considerably with the underutilization of resources during the thirties, and drops sharply during the war
years. (See Chart 28.) An upward adjustment in the capital-output ratio
took place as a result of heavy postwar investment, but the ratio is still low
by historical standards. It is important to note, however, that the low
current ratio is traceable solely to plant. The equipment ratio rose steadily
between the end of the war and 1949; since then, it has remained at about
the level that prevailed in the 1910-29 period. Thus, on the basis of these
uncertain historical yardsticks, it does not seem that productive facilities
in the aggregate are excessive at the present time relative to current rates
of output.
Profit expectations are, of course, a key determinant of the rate of investment. Throughout the postwar period, investment has been higher than
would be expected from the relationship that existed in earlier years between
profits and investment. This persistent postwar excess represents in part
a catching-up process, and it also reflects the unusual stimulus of Federal
provisions for accelerated depreciation. In part it may also represent a
change in the relationship between profits and investment—as a result of
lower interest rates, the more liquid position of businesses, and the increased
pace of technological change and obsolescence. But whether or not there
has been a shift in the long-term relationship between profits and investment,
it is clear that the termination of the excess profits tax on January 1, 1954
will give some support to investment.
The generally strong financial position of business firms will likewise
help to support a high level of investment expenditure. In nonfinancial
corporations, the ratio of cash and Government security holdings to all
current liabilities was substantially higher in mid-195 3 than before the war,
partly because of the increase in accrued tax liabilities. In 1953 the ratio
was 57 percent, compared with 29 percent in 1929 and in 1936. While the
ratio of total assets to total debt in 1953 was not appreciably higher than in
prewar years, this ratio understates the financial strength of business, since
a considerable volume of business assets is still being carried on the books
of corporations at prewar prices.
Research and development activities of industry, nonprofit institutions,
and Government are steadily enlarging the opportunities for new investment.
As already stated, these expenditures reached 4 billion dollars in 1953.
Over one-third of this amount originated in industry; and a still larger
proportion, about 70 percent, represented work done in industrial establishments either on their own account or for the Government. While much
of the research outlay of recent years has been oriented to defense needs, the
results of the new knowledge are largely adaptable to civilian uses. Defense
61
CHART 28
RATIO OF STOCK OF PLANT AND
EQUIPMENT TO OUTPUT1
TOTAL PLANT
AND EQUIPMENT
-
1.80
-
1.40
1.00
1.00
EQUIPMENT
.80
.80
.60
.60
0
r i I I i i I i i I I I I I I I I i i I i i i i i i i i i i i i i i i i i i i i i i i i ^ 0
1910
19*15
1920
1925
1930
1935
1940
1945
1950
RATIO CALCULATED ON BASIS OF STOCK AND PRIVATE GROSS NATIONAL PRODUCT IN 1953 PRICES.
SOURCES: DEPARTMENT OF COMMERCE, MACHINERY AND ALLIED PRODUCTS INSTITUTE,
AND COUNCIL OF ECONOMIC ADVISERS.
62
research expenditure is creating opportunities for private investment on
numerous fronts—for example, scientific instruments, electronic computers,
electronic and other process controls, communication equipment, radioisotopes, atomic energy, heat- and corrosion-resistant metals and alloys, highspeed cutting tools, and heavy forge presses. Furthermore, defense research
programs have trained thousands of scientists and engineers whose skills
are facilitating the adaptation of new techniques to civilian uses (see
Appendix F).
The emergence of a long-range outlook among business firms promises
well for the future, the magnitude of industrial expenditures for research
and development being merely one evidence of this outlook. Another is
the long-range planning of investments, partly to assure growth, partly to
meet the competition of other enterprising firms. The urge or need to cut
costs is reflected in an active demand for automatic controls and materialshandling, inspection, and office equipment. It also is accelerating outlays
for the modernization of existing plant and equipment. Despite heavy
postwar installations, a substantial volume of productive facilities is approaching "normal" retirement age or has become obsolete as a result
of recent technological advances.
HOUSING
Housing construction, which has played so important a role in the rapid
rate of increase of investment expenditures since World War II, may be
expected to continue at a level close to that of 1953. Despite the record
volume of home building in recent years, we are still confronted by a good
housing market. Vacancies in our cities are, with few exceptions, below
the level regarded as necessary for a healthy, competitive housing market.
During the next few years, the rate of formation of new families and
households is likely to diminish as a result of the lower birth rate of the
depressed thirties. Other factors on the side of demand are likely, however, to press for a high volume of residential construction. These include
the continued movement of the city population toward the suburbs, the
high birth rate of recent years, and the improvement of incomes during
the past decade. The recent easing of funds in the mortgage market will
strengthen the forces of supply as well as of demand. Further, in contrast
to earlier times, many of today's builders have considerable overhead
expenses to reckon with, and they will not be averse to making price
concessions if this will help to keep their organizations intact. The rental
housing market, especially in the medium-price ranges, has been neglected
of late and could offer investment opportunities. Finally, if the volume
of housing showed persistent signs of declining, the terms of FHA-insured
mortgages could at once be liberalized under existing law.
Taking a longer view, it is well to recognize that the housing industry
has become less vulnerable to recessionary influences and is less likely in
turn to contribute to economic instability, as the result of a number of in-
63
stitutional changes during the past twenty years. The introduction of the
long-term, amortized mortgage, and the establishment of a system of mortgage insurance and guaranties, also the establishment of the Federal Home
Loan Bank System and of the Federal Savings and Loan Insurance Corporation, have greatly strengthened the home mortgage market. While facilitating the maintenance of high levels of residential building, they have also
provided more protection against possible economic setbacks.
CONSUMER EXPENDITURES
The influences determining consumer spending are many and, to a disconcerting degree, unpredictable. Such factors as personal income, liquid
assets, size and age of stocks of durable goods, new consumer credit, and the
repayment burden of outstanding debt must be included in any list of
elements governing consumer expenditures in 1954.
During the next four to six months, the disposable income of individuals—
that is, personal income after taxes—may well approximate the rate of the
last quarter of 1953. The cut in personal income taxes of about 10 percent,
effective January 1, may amount to about 3 billion dollars for 1954. Allowing for an increase of 700-800 million dollars in employee and selfemployed contributions for old-age and survivors insurance, there will
still be a substantial net reduction in taxes, which will tend to act as a support to disposable personal incomes. Further support could come from a
moderate rise in Government transfer payments, such as unemployment
compensation and the pensions to elderly workers retiring from the labor
force in a more competitive market.
The proportion of income spent for consumer goods is of considerable
significance in the evaluation of the economic outlook. In terms of current levels of disposable income, a change of 1 percent in the spending rate
means an increase or decrease of about 2.5 billion dollars in consumer expenditures. The saving rate in the past three years has been exceptionally
high, averaging about 7.3 percent, compared with 4.5 percent in 1929
and an average of 4.3 percent in 1947-50 (see Chart 29). This suggests
that businessmen who push new or improved products, who produce established goods at lower costs, or who practice more aggressive salesmanship,
will find that their markets are expansible.
The latest survey of consumer attitudes, made in October 1953 by the
University of Michigan Survey Research Center, indicates that the number
of consumers finding market conditions favorable for the purchase of major
durable goods is slightly larger than at the time of any other survey since
the outbreak of the Korean war. A cause of the more favorable view is
the belief that prices have been leveling off and will remain more or less
stable for some time. Although consumer attitudes may have changed
somewhat because of the recent slight drop in production and employment,
the results are significant in showing that American consumers are alert
to conditions favorable to the improvement of their living standards.
CHART 29
PERSONAL SAVING
PERCENT OF DISPOSABLE INCOME
PERCENT OF DISPOSABLE INCOME
10
10
5 •"•
— 5
I
I
I
I
I
I
I
I
I
I
SOURCES: DEPARTMENT OF COMMERCE AND COUNCIL OF ECONOMIC ADVISERS.
Favorable also for the maintenance of consumer demand is the large and
widely distributed volume of liquid assets. Personal holdings of currency,
bank deposits, shares in savings and loan associations. United States Government securities, and equities in trust funds exceeded 200 billion dollars
at the end of 1953. The effectiveness of liquid assets in maintaining consumer demand in a period of readjustment will depend, of course, in part on
the amounts held by consumers whose incomes are curtailed, and in part
on the response of other holders to prices and other incentives to purchase.
Many consumers have virtually no resources as a cushion to a decline of
income; but it is a significant and encouraging fact that the holdings of
liquid assets have shown a tendency toward wider distribution in recent years.
One determinant of the level of consumption expenditures is the size and
burden of consumer debt. The heavy borrowing of recent years to finance
the purchase of homes and all sorts of durables has raised the ratio of debt
service charges to consumer incomes. Last year, the payment of interest
and required repayment of principal on mortgages and consumer debt
amounted to about 15 percent of disposable income. In addition to debt
service, most consumers were paying premiums for private insurance or
pension plans, amounting to another 5 percent of disposable income in
1953. Other contractual obligations, such as contract rents and the operating costs of home ownership, claimed still another tenth of income. All told,
debt service, insurance premiums, and contractual costs of home operation
took about three-tenths of consumer incomes last year. This represented
a considerable increase over recent years, but was at about the pre-World
War II level.
It is well to note that the bulk of postwar borrowing for the purchase
of homes and durable goods has been undertaken by younger family units—
those with greater family pressures to buy, lower reserves for financing
expenditures, but more favorable income experience and better future
prospects. In a period of mild contraction of national income, the employment and incomes of this group are likely to hold up better than the
average.
An important influence on the volume of purchases of durable goods is
the level and age distribution of consumer stocks. Information available
for automobiles reveals that, despite the large demand for new cars in recent
years, about 27 percent of the passenger cars in use in mid-1953 were 10
years old or older, in contrast to 17.5 percent in 1939. Experts in the
industry generally agree that the volume of sales may well be smaller in
1954 than in 1953. However, if scrappage should amount to about 3.5
million units, a basis would exist for a level of sales in 1954 not much
below that of last year; for one may expect a moderate further growth
in the total number of motor vehicles in use, reflecting such factors as
an increase in the number of households and the popularity of suburban
life—which often creates a demand for more than one car even in families
with modest means.
The slackening in the rate of expansion of outstanding consumer instalment debt in recent months has been the result of a moderate decline in the
rate of credit extended and a gradual rise in the rate of repayments-—developments that have been dominated by changes in automobile credit (see
Chart 30). A downturn in outstanding consumer debt during the next
few months does not seem unlikely. But in recent years consumers have
demonstrated a remarkable indifference to what business analysts have to
say. In our high-income economy, many millions of consumers may, on the
one hand, spend more than their income by drawing down savings or going
into debt or, on the other hand, spend appreciably less than their income and
still live well. This volatility of consumer markets is, however, a short-run
phenomenon. The urge to improve living standards exercises a strong
and fairly continuous pressure in our society.
66
CHART 30
CONSUMER INSTALMENT CREDIT
BILLIONS OF DOLLARS
BILLIONS OF DOLLARS
1950
1953
SOURCE: BOARD OF G O V E R N O R S OF THE FEDERAL RESERVE SYSTEM.
GOVERNMENT EXPENDITURES
Federal expenditures for goods and services reached a rate of slightly
over 58 billion dollars in 1953. A moderate decline in Federal expenditures may be expected in 1954. Most of the anticipated reduction will take
place in national security expenditures, which reached an annual rate of
51.8 billion dollars in 1953, but in addition a slight drop may occur in outlays
for nondefense programs. By mid-1954 these changes may bring the annual
rate of total Federal expenditures for goods and services about 2 billion
dollar below the rate at the end of 1953. Yet Federal expenditures will
continue to be a strong sustaining factor.
The small prospective decline in Federal expenditures will probably be
counteracted in large part by a rise in State and local purchases, which in
1953 reached a level of slightly over 25 billion dollars. (See Chart 31.)
In recent years the annual increase in these expenditures has been close to
2 billion dollars, and there is still an immense backlog of demand for schools,
highways, hospitals, and sewer, water and other facilities (see Chapter 10).
Public pressure for the expansion and improvement of local facilities is
67
CHART 31
GOVERNMENT EXPENDITURES FOR
GOODS AND SERVICES
BILLIONS OF DOLLARS
BILLIONS OF DOLLARS
60
50
60
-
T
1 t' i -4' i 1 i -i-r I i i A H i i
1947
1948
1949
1950
1951
1952
"SEASONALLY ADJUSTED ANNUAL RATES .
-I/EXCLUDES GOVERNMENT SALES.
SOURCES: DEPARTMENT OF COMMERCE AND COUNCIL OF ECONOMIC ADVISERS.
68
1953
I 0
mounting, and it seems entirely reasonable to expect that State and local
expenditures will continue to increase.
The financial situation of State and local governments is favorable to
a continued rise in their expenditures. State and local receipts have
increased by roughly 2 billion dollars a year in the postwar period, with the
total rising from 13.2 billion dollars in 1946 to almost 28 billion in 1953.
Preliminary estimates indicate that receipts and expenditures were in
balance during 1953. Further evidence of the financial strength of State
and local governments is the size of their cash and U. S. security holdings,
which reached 23 billion dollars in mid-1953. Some part of this amount
is committed, but the uncommitted portion is undoubtedly large relative
to current expenditures.
Despite the strong financial position of State and local governments,
the principal source of funds for additional capital outlays will have to be
from borrowing. The increase in State and local debt in the postwar
period has been substantial. However, the cost of carrying this debt has
not changed appreciably relative to total State and local expenditures.
Interest charges have increased moderately since 1946, but the requirements
on account of interest and debt retirement are not likely to be an important
impediment to bond financing in the near future. (See Appendix D.)
THE CONDITION OF AGRICULTURE
Agriculture, which is beset with more problems than any other major
part of our economy, will continue to be confronted in 1954 with problems
growing out of excessive supplies of some of the major farm products—
notably wheat, cotton, and corn. (See Chart 32.) By July 1954, the wheat
carry-over may be about 800 million bushels, more than three times its
mid-1952 level and well in excess of a year's domestic use. By August 1954,
the cotton carry-over may reach 9.6 million bales, also more than three times
its level two years earlier and the equivalent of a year's domestic mill
consumption. By October 1954, stocks of corn are expected to reach about
900 million bushels, nearly twice their 1952 level. Stocks of food fats
and oils, already at a record high, are expected to be moderately larger
by October 1954. The price-depressing effects of these stocks will, however,
be substantially offset during 1954 by Government price-support operations,
acreage restrictions, and other measures.
In recent months, agricultural prices have shown signs of stabilizing.
This has been true not only of the major crops moving under Government
price-support programs but of the unsupported prices of livestock products
as well. While export demand for farm products has fallen substantially
during the last year, it appears unlikely to weaken further during 1954.
Domestic demand for farm products continues to be a source of underlying
strength, with consumer incomes and food expenditures remaining near
record level.
69
CHART 32
CAIRRY-OVER OF MAJOR FARM
CO MMODITIES
CORN
WHEAT
MILLIONS OF BUSHELS
MILLIONS OF BUSHELS
<)
200
400
600
800
1,000
0
200
400
600
800
1,000
1
1
1
1
1
1
1
1
1
1
1
1952
|
1952 ,
1953
1
j
|
1953
1954
1954
COTTON
FOOD FATS AND OILS
MILLIONS OF BALES
c>
1952
BILLIONS OF POUNDS
2
4
6
8
10
0
.5
1.0
1.5
2.0
1
1
1
1
1
1
1
1
1
1
j
1952
1953
1953
1954
1954
|
|
NOTE: C ROP-YEARS BEGINNING: CORN, OCTOBER 1; WHEAT, JULY 1;
C,OTTON, AUGUST 1; FOOD FATS AND OILS, OCTOBER 1.
SOURCE : DEPARTMENT OF AGRICULTURE.
If the domestic demand for foods and fibers continues at about its present
high level, average prices received by farmers should hold near to their
current levels during 1954 and cash receipts from farm marketings be
close to the estimated 31.2 billion dollars received during 1953. Production
costs may also show a further slight decline. Hence, the prospects are that
farm operators' realized net income will be close to its estimated 1953 level
of 12.5 billion dollars.
Even when measured in constant dollars, agriculture's financial assets
today are 94 percent higher than in 1940 and only 11 percent less than in
1947. Farm debts are now estimated to stand at only 11 percent of total
assets and 76 percent of total financial assets. Combining these facts with
those on income, it seems that, despite recent readjustments, American agriculture as a whole remains financially able to sustain a fairly good rate of
purchasing.
INTERNATIONAL DEVELOPMENTS
Large military expenditures abroad, particularly in the form of trooppay and offshore procurement, played a substantial part in other countries'
dollar earnings in 1953. The over-all level of these expenditures is not
expected to decline in 1954, in view of already existing contracts and
commitments.
70
Although the moderate letdown in United States economic activity in
the second half of 1953 was accompanied by a slight decline in imports
during the closing months of the year, the recent and substantial increases
in the gold and dollar reserves and in the economic activity of other countries have somewhat improved the prospect that any moderate change in our
imports from them will not have a significant influence on our exports to
them.
BASIS FOR CONFIDENCE
It has been noted earlier that developments in the American economy
during the second half of 1953 were due largely to inventory adjustments.
A review in this chapter of the major fields of expenditure and of the
condition of agriculture suggests that outlays in most areas are likely to be
well maintained in the visible future. This justifies some confidence in
the view that the adjustments now in process will not initiate a cumulative
downward movement of the economy.
There are additional grounds for confidence. One of them is that our
financial institutions are fully capable of meeting all deserving credit
demands, and are in a condition successfully to withstand any strains to
which they may be exposed as a result of business readjustments. Credit
demands are not expected to tax the available supply of funds over the
coming months. Business loans generally decline seasonally in the early
months of the year. Nor do developments in the consumer credit field or
in the mortgage market suggest unusual levels of demand for funds. Commercial banks are in a highly liquid position, with two-fifths of their large
holdings of Government securities maturing within one year, with their
indebtedness to the Federal Reserve System much reduced, and with increased power on the part of the System to lend to individual banks or
otherwise augment their reserves, if this should be necessary. Similarly,
other financial institutions—insurance companies, savings banks, and savings and loan associations—are in a sound condition and equipped to meet
all reasonable demands in those areas of the market for investment funds
in which they function.
Many factors contribute to the strength and resilience of our financial
institutions. Broadly speaking, the reserves held by commercial banks
against potential losses on loans and investments are substantial, bank
capital has increased, and funds are readily available to member banks
from the Federal Reserve System, in case of need. Large segments of the
mortgage portfolios of banks and other lending institutions are insured or
guaranteed by Federal agencies. The ready availability of funds to all but
a small minority of depositors in commercial banks and savings banks, and
of the funds of most shareholders of savings and loan associations, is amply
protected by Federal insurance. From the viewpoint of its capacity to meet
the needs of the economy for credit and its ability to withstand the strains
that may be engendered by economic adjustments, our financial system was
never stronger.
284874—54
6
71
The prosperity of the past dozen years has not been characterized by
extensive speculative developments in the commodity, security, or financial
markets. There has been no manifestation of a dangerous speculative rise
in urban and farm land values, despite a record volume of residential
building. This has not been a period of reckless financial adventure, either
at home or abroad, such as characterized the twenties.
In evaluating the economic future it is also well to recall the structural
changes in our economy that serve to bolster consumer income as a key
support of prosperity. The social security programs supplemented by private pension systems mitigate the effect of any decline in earnings. The
unemployment compensation system especially operates as a stabilizer, since
benefit payments rise while payroll tax receipts decline in a time of increasing
unemployment. The Federal tax structure, which is based mainly upon
individual and corporate income taxes for sources of revenue, also operates
in ways to cushion the effects of recessionary influences. As incomes move
downward, tax collections likewise decline—relatively more than incomes—
and thus help to sustain both consumer expenditures and business investment. In addition to rising social security payments and declining income
taxes, which serve to cushion economic decline, agricultural price supports
help to protect farm incomes.
NEED FOR ECONOMIC PREPAREDNESS
Impressive as are the factors which justify confidence that the current
settling of business activity will stay within relatively narrow limits, it should
be recognized that periods of readjustment always carry risks with them.
Continued imbalance could result in cumulative effects, as one sector of
the economy reacts upon another. Such reactions are partly psychological
in character, but they are nonetheless real. A relatively slight fall in the
level of activity, if interpreted as a harbinger of further declines, could lead
consumers whose incomes have remained unchanged to start curtailing their
purchases because they either fear a loss of income or hope for bargain prices
later. If businessmen regard the first dropping off in orders as an occasion
for curtailing their programs of capital investment, they could spread and
intensify the difficulties they fear.
These possible attitudes are illustrations of what are sometimes referred
to as psychological repercussions. Whether they take one form or another,
they could become impediments to smooth adjustment. To avoid the adverse consequences that existing uncertainties might generate, the Government should, and can, make clear its ability to face them and to take the
steps necessary to deal with them.
Part III
TOWARD A STRONGER ECONOMY
Chapter S
Pathways to Strength
T
HE OPENING CHAPTER of this Report stressed the need for an
expanding economy and set forth in general terms the role of Government in establishing the requisites of progress. There followed a review of
economic developments during 1953, including the directions taken by
public policy, and an appraisal of the current economic situation. The
conclusion was reached that our economy is basically strong, that the current
economic readjustment seems likely to be brief and self-correcting, but that
the situation must not be viewed with complacency.
Our economy today is marvelously prosperous by any historical standard.
Employment is high, prices are steady, and wages and profits are generally
satisfactory. Consumer expenditure is being maintained. Investment in
housing, business plant, and equipment is continuing, in the aggregate, at
its recent very high level. So, too, is governmental spending, with the outlays of State and local governments offsetting in large part the recent
downward tendency of Federal spending. And while total output and
employment have declined somewhat since mid-195 3, creating unemployment in some localities, the economy as a whole has been shifting from
operations at forced draft to normal levels of peacetime operations.
But it would be imprudent to stop with this still picture of an economy
that is in motion. This Government recognizes that it makes a vital
difference whether an unemployment rate of three percent is reached by
rising up to that figure or declining to it, and whether the rate of increase
or decline is high or low. True, the contraction of economic activity in the
past six months has been small and largely confined to reduced spending
by businessmen for additions to their inventories; but there can be no
assurance that the decline will not be extended to other categories of
spending. If we could be certain that the contraction in industrial activity
now in process will remain an inventory adjustment, the Government might
stand aside, content that the measures already taken (see Chapter 3) will
suffice. But there can be no certainty in these matters. Prudence as well
as zeal for economic improvement require that public policy contribute
both to the immediate strength of the economy and to its long-term growth.
There are two classes of actions that we should take within the current
year to build a stronger economy.
First, we should take bold steps to protect and promote economic stability—by modernizing unemployment insurance; by broadening the base
and benefits of old-age and survivors insurance; by permitting a longer
"carry-back" of losses for tax purposes; by granting broad discretionary
75
authority to the Executive to alter, within limits and appropriate to
changing circumstances, the terms of governmentally insured loans and
mortgages; by establishing a secondary home mortgage market; and by
making improvements in the planning of public works programs.
At the same time, we should take action to stimulate the expansive
power of individual enterprise—by revising the tax laws so as to increase
incentives and to remove certain impediments to enterprise, especially of
small business; by improving credit facilities for home building, modernization, and urban renewal; by strengthening the highway system; and by
facilitating the adjustments of farming to current conditions of demand
and technology.
These measures for strengthening our economy constitute, taken together,
a program of immediately advisable action. It is not a legislative program of emergency measures, for the current situation clearly does not
require one. Instead, it is a program for stimulating economic growth
and minimizing any chance there may be of serious economic difficulty
in the future. The program will contribute materially to the requisites
for continued economic progress set out at the beginning of this Report.
The following pages provide a more detailed account of the economic
program of this Administration.
Chapter 6
Reforming the Tax Structure
T
HE PRESENT FEDERAL TAX SYSTEM is the result of a long
succession of Congressional enactments in response to the great increase
in the activities of Government during the past generation. During this
time, many new Federal taxes were imposed and steep increases were repeatedly made in the rates of such established taxes as those on personal and
corporate incomes. Federal taxes were increased in the thirties to defray
part of the costs of a broad intervention by Government in economic affairs,
largely directed at relieving distress caused by unemployment and lower
prices and incomes. Taxes rose still further during the forties, as a result
of huge Federal expenditures for military purposes during World War II,
and—after the war—for financing national security and reconstruction
abroad. The controlling consideration in increasing taxes was the urgent
need for revenue, and inadequate consideration was given to the long-run
effects of tax increases on incentives.
There is evidence that the present structure of the Federal tax system—
irrespective of the revenue level—contains many features that are unnecessarily restricting economic progress. Some features lead taxpayers to resort to devices for evading tax payments. Some lessen productive effort
or lead to less efficient management of resources. Others may dampen
consumer expenditures and business investment.
These adverse effects of the current Federal tax system on the growth
of the economy have not become fully apparent, because of inflationary
conditions that have prevailed during most of the past decade. A tax
system that may have been tolerable under inflationary conditions, if left unchanged, cannot be expected to be consistent with the requirements for
maximum economic growth and stability—after inflation has been stopped.
It is therefore timely to readjust the Federal tax system to serve the
interests of a dynamic and growing, but non-inflationary, economy. The
structure of the Federal tax system can and should be altered so as to apportion the burden more equitably among taxpayers, to unleash new incentives to economic growth, and to make the system operate more effectively
as an economic stabilizer. The opportunity to improve the tax structure
should be seized promptly, even though general reductions in tax rates must
be deferred. Among the paramount objectives of Federal tax reform are
those of providing greater equity to consumers, providing more powerful
incentives for work, investment, employment, and efficient management,
and making the tax structure more stabilizing in its operation. These objectives will not be achieved quickly; yet the broad directions of reform are
77
clear enough. With long-run goals in view, it is possible to move toward
them, step by step.
As it becomes possible to reduce the expenditures of the Federal Government, without impairing the performance of necessary functions or shirking
responsibility for maintaining a stable and prosperous economy, taxes should
be brought down. Such reductions will usefully widen the area of private
economic activity.
A beginning was made in the application of these principles on January 1
of this year, when the excess profits tax was permitted to expire and when
a reduction in individual income taxes averaging about 10 percent for most
taxpayers brought such taxes back to pre-1951 levels. These actions have
improved the outlook for investment, as previously noted. They have also
released consumer income for expenditure, and thus again provided a timely
stimulus to the economy. The force of this stimulus was somewhat reduced,
though by no means offset, by the concurrent rise of 1 percent in the
combined employer and employee rates of tax on payrolls for old-age and
survivors insurance.
The continued large requirements of the Federal Government for revenues to meet expenditure for national security and other purposes, combined
with the current condition of the American economy, which is marked by
a reassuring measure of price stability and a high level of operations, make
it unwise to enact a further broad reduction in taxes at this time. But some
structural changes in the Federal income taxes cannot be postponed. Among
the changes that have been recommended in the Budget Message, several
have a significant bearing on the growth and stability of the economy.
GREATER EQUITY TO CONSUMERS
Irrespective of the level of personal taxation, inequities that are present in
the structure of the personal income tax should be removed promptly,
particularly for widows and widowers who employ assistance for child care
in the home; for families with dependent children who earn more than $600
a year; for widows and widowers, with dependents, who should be accorded
the same privileges of "split income" that are accorded to married couples;
for persons struck by the misfortune of heavy medical expenses; for employers who contribute to medical insurance and pension plans; and for annuitants who should be able to recover within their life span, free of income
tax, the savings they have invested. These faults can be remedied, at comparatively small loss of revenue, with resultant gains to the welfare, morale,
and feeling of justice of individual taxpayers.
ENCOURAGEMENT OF ENTERPRISE AND EMPLOYMENT
The present structure of business income taxation is faulty in several
respects. It leaves too little incentive for the assumption of risk by investors,
and offers too meager a reward to enterprisers who assume high risks. It
78
penalizes investment in the equity shares of enterprises, particularly small
businesses, in comparison with investment in bonds and other contracts of
debt. It overburdens the person or the business whose income fluctuates
from year to year in comparison with the person or business whose income
is comparatively stable.
An important step in removing impediments to enterprise, particularly
to the expansion of small businesses, was taken on January 1, 1954, when
the excess profits tax expired. This impost was perverse in its effects. It
blunted the incentive and denied the financial means of expansion to enterprises with favorable markets, low costs, or especially efficient managements.
A number of additional tax measures should now be taken in order to
strengthen the forces of growth in employment and production. These
measures, which involve some immediate sacrifices of revenue., contain the
seeds of important future revenue gains to be reaped from the economic
growth they will stimulate.
The period during which individuals and business corporations may
"carry back" net business losses should be increased from one to two years.
This reform would encourage investment by enabling a businessman to
know in advance that, if his enterprise should suffer net losses, he could use
these losses as offsets against the profits he made during not only the preceding year but also the year before that. Thus, he could obtain a refund
of taxes which were, in effect, overpaid during the preceding two profitable
years. Such a lengthening of the carry-back period would reduce the risk
assumed on new ventures of existing firms, especially those of smaller businesses for which new departures are likely to require the commitment of
a considerable part of their capital. Essentially, it extends the equitable
policy of averaging out results in good years and bad, in order to ascertain
tax liabilities. Taken in conjunction with the reform measures that follow,
it could greatly help to sustain investment and create jobs,
Elimination of the double taxation of dividends should be begun by permitting the stockholder to credit part of the taxes paid by the corporation
against his personal income tax liability. At present, income resulting from
investment in the shares of American business corporations is doubly taxed,
first in the hands of the corporation that earned it, and again in the hands
of the stockholder who receives cash dividends from the corporation on his
shares. Under current high tax rates, the Federal Government appropriates by far the largest share of the total income from investment in common
stocks. The unfair discrimination against investment in stocks creates difficulty for smaller businesses in raising money, and tends to divert venture
capital into relatively riskless investments. For these reasons, our ultimate
goal should be a substantial equality of treatment of interest on debt and
dividends on stocks. A beginning toward this objective should be made
immediately by allowing a stockholder to credit against his own income tax
some part of the tax already paid by the corporation on dividends received
by him.
79
Depreciation allowances should be liberalized. The climate for investment and economic growth would also be improved by granting investors
more freedom in their choice of methods of writing off investments in buildings, machinery, and equipment. An investor usually has a clearer and
more certain view of the profits from an investment a few years ahead than
of returns in the distant future. If he is permitted to charge off a substantial part of the cost of an investment against foreseeable net income, and
thus recover a good part of his capital quickly, he will be more disposed to
invest. Many investments will not be made at all unless there is a favorable chance of a short pay-out period. A business should be able to write
off the major part of the cost of a capital asset during the first half of its
useful life, if it desires to do so. Recent experience with accelerated amortization of defense plant facilities suggests that rapid depreciation allowances provide strong inducements to investment. The step proposed here
should not entail any ultimate loss of revenue to the Treasury, partly because
deductions for an asset would merely be shifted from later to earlier years
and, more significantly, because of induced gains in the volume of investment and in industrial productivity.
Treatment of research and development expenses should be clarified. At
present, companies are often not permitted to treat unusual research or
development outlays as currently deductible business expenses—a specially
burdensome rule to small businesses because large firms with established
research laboratories can usually make immediate deductions. In the
interest of fostering rapid technological progress, taxpayers should be permitted to deduct research and development expenses currently.
Accumulation of earnings needed for expansion should not be penalized.
The present penalty tax on the accumulation of corporate earnings operates
to discourage the growth of small companies which are especially dependent
on retained earnings for expansion. This handicap should be removed—
without opening the door to avoidance of individual taxes by stockholders—
by placing the burden of proof on the Government that a retention of
earnings is unreasonable.
Business income from foreign investments should be encouraged. American capital and management skill can foster the economic development of
other countries, as well as provide export markets for our goods. Our tax
laws should, at least, contain no penalties against investment abroad, and
they might well offer some encouragement to it. This can be accomplished
by taxing the business income after January 1, 1954 of foreign subsidiaries,
or of segregated branches of American corporations which operate and
elect to be taxed as subsidiaries, at a rate somewhat lower than the current
relatively high corporate rate. In addition, the types of foreign taxes that
may be credited against the United States income tax should be made more
inclusive, the over-all limitation on foreign tax credits should be removed,
and regulated investment companies concentrating on foreign investments
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should be permitted to pass on to their stockholders the credit for foreign
taxes now available for direct individual investments.
INCREASING ECONOMIC STABILITY
The Federal revenue system now possesses large "built-in" potentialities
for moderating economic fluctuations, as a result of its heavy reliance on
the taxation of incomes, the keen sensitivity of incomes to business conditions,
and the pay-as-you-go methods of personal income tax payment. It is
desirable that Federal revenues should rise and decline promptly with
changes in economic conditions. Additional steps should be taken to move
toward a current basis of payment of corporate income taxes.
The potential contribution of the tax system to economic stability could
be enhanced by speeding up refunds of overpayments of taxes in all cases
where administrative procedures make this feasible. Under current pay-asyou-go procedures, an individual taxpayer is permitted to credit an overpayment against his income tax of the following year or to file a claim for
a refund. Most overpayments are due to withholdings of taxes on salaries
and wages which prove to be excessive because of unanticipated changes
in the taxpayer's employment or family status, or to unexpected declines
in his business or investment income which make previous payments on
account of the declaration of estimated taxes too high. An individual must
wait for a refund of his overpayment until after his return for the taxable
year is filed—usually a period of many months. Speeding the refund of
overpayments could improve the economic impact of the individual income
tax during a business downturn, just as the prompt increase of estimated
tax payments by taxpayers during a period of rising incomes and economic
activity now serves to restrain the expansion.
Increasing the carry-back period of business losses from one to two years,
as recommended previously, would also make it more desirable to speed
up refunds of overpaid business taxes in the interests of economic stability.
At present, a business may stop making payments of estimated taxes due
on net income of the preceding year if a carry-back of its current year's
losses is believed to cancel the liability. But if current losses are large
enough to entitle the business to a refund, it is required to wait for the
refund until some time within 90 days after the filing of its return—perhaps
six months after the end of the tax year. Clearly, a two-year carry-back
period would increase the amounts of overpayments and of refunds. Yet
the cash position of a business suffering losses and entitled to tax refunds
needs to be bolstered promptly. Hence intra-year refunds of such overpayments would aid in stabilizing business operations.
There are difficult administrative problems to be solved before the Federal
Government can accelerate tax refunds, with assurance that the public
interest will be protected. These problems are now being studied.
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PATHS OF FUTURE REFORM
The specific measures that have been recommended by no means exhaust
the opportunities for making our Federal tax system serve better the cause
of stable economic growth. They are merely first steps along a path of
reform that should be followed during coming years. The whole structure
of Federal taxation needs thoughtful re-examination from the point of view
of its long-run impacts on employment and over-all economic stability.
Among the important subjects for future study are the following: the role
and effects of Federal excise taxation; the level and rate structure of our
personal and corporate income taxes; and the taxation of capital gains.
Those aspects of Federal taxation and finance which relate to the division
of responsibilities among the Federal, State and local governments are
now under study by the Commission on Intergovernmental Relations.
In any revision of the capital gains tax, it would be desirable to assign a
high priority to an increase in the amount of net capital losses on new
investment by individuals, that may be offset against ordinary income. At
present, an investor whose ventures turn out to be unprofitable in a certain
year is allowed to deduct a maximum of $1,000 of his net capital loss from
ordinary income during that year, and during each of the five succeeding
years, in figuring his income tax. By increasing the amount of the allowable
offset to, say, $5,000 per annum, the climate for risk assumption could be
improved and the equity of the tax increased. This proposal would also
foster investment in relatively small enterprises. An investor would be
encouraged to try new fields of operation if he knew in advance that his
misfortune, as well as his fortune, would be shared by the Federal Government. Limitation of the increased offset of capital loss to new investments
would keep the revenue loss to the Treasury at a minimum.
Chapter 7
Governmental Aids to Housing and Finance
N EFFICIENT, competitive financial system, capable of channeling
funds into the most productive uses, is a primary condition of economic progress. The growth of production, employment, and markets in
a money economy depends at every turn on adequate supplies of credit and
equity capital. These funds must be available on sound and reasonable
terms and in forms adapted to the economic processes being financed. In
a free society, it is the responsibility of Government to provide an environment in which private financial institutions can perform these functions
constructively.
The creation of this environment is a many-sided problem. General
monetary and credit policies are of paramount importance because they
reach every part of the financial market and affect the lending and investing policies of financial institutions of all types. In addition, it is incumbent
on Government to find ways of filling such gaps as may appear in the financial structure, so that the financial requirements of business, agriculture,
and homeowners may at all times be properly met.
Much progress has been made along these lines. Nevertheless, opportunities remain open to Federal and State governments, through legislative
and administrative action, to augment the contribution that financial institutions can make to stable economic growth. These opportunities are
especially great in the field of housing credit. Financial aids to housing
should serve more effectively in the task of modernizing and rehabilitating
existing homes and neighborhoods. They should be generally revised in the
light of current needs. And they should be made more flexible and responsive to changing business conditions.
During recent years the Federal Housing Administration and the Veterans Administration have helped to make new homes, particularly small,
single-family residences, available to millions of American families. The
personal and social benefits of home ownership have been widely extended.
This has been accomplished by encouraging private lending agencies, under
the protection of Federal insurance or guaranty, to make available home
loans requiring small down payments and carrying long maturities and
comparatively low interest rates. Experience with this program points to
ways of extending its benefits and at the same time preventing undesirable
collateral effects.
A
FLEXIBILITY IN LOAN INSURANCE TERMS
Insured and guaranteed mortgage loans represent a large segment of the
home mortgage market—around 40 percent of all private dwellings constructed in 1953 involved FHA or VA financing. Since they exert a powerful influence on the level of construction activity, it is vitally important to
make the terms and conditions of insured or guaranteed mortgage credit
responsive to changing economic conditions. In a number of respects
present legislation leaves the administrator free to establish terms at or
below specified maximums, but in practice the administrators have with
few exceptions interpreted their responsibilities to require operation at the
statutory limits. This has led at times to large extensions of mortgage credit
when both the economy and the construction industry were already fully
employed, with the result that building costs and the prices of homes were
driven up and home buyers injured. Under conditions of slack employment,
however, it would usually be beneficial to have available and to employ the
stimulus to home building and modernization that is provided by the offer
of more liberal credit terms.
The way to avoid the inflationary influence of excessively liberal mortgage
credit terms at certain times, and to help offset unfavorable developments
by an easing of terms at other times, is to make provision for permissive
adjustments in the conditions on which credits may be insured or guaranteed. To some extent these influences on the construction industry may
be exercised through general monetary and credit measures. But the specific device of varying the terms and conditions of mortgage financing will
ordinarily be more effective, since it goes directly to those aspects of the
loan contract—the down-payment requirement and the repayment period—
to which borrowers are most sensitive.
The principle of permissive adjustment has already received Congressional approval in the Housing Amendments of 1953. Under these amendments, the President was given discretionary power, within defined statutory limits and with regard for economic conditions, to fix the maximum
terms to maturity and maximum loan-value ratios on FHA-insured loans
for the purchase of new, single-family homes. It would be desirable to
broaden the area of permissive action by authorizing the President to regulate, within appropriate statutory limits, the maximum loan-value ratios,
terms to maturity, and interest rates that may be carried by FHA-insured
and VA-guaranteed loans of all types.
MODERNIZATION OF EXISTING HOUSES
The major emphasis of Federal programs in the housing and home
financing fields has, since their start, been on the encouragement of new
construction. Present FHA programs provide more liberal financing terms
to the purchaser of a newly constructed house, especially if it is located
in a new neighborhood, than to the buyer of an existing house, located in
an older neighborhood. The result has been to encourage the development
of new neighborhoods while doing much less to aid older areas which have,
in many cases, fallen into serious disrepair and obsolescence.
It is necessary to take strong steps to correct the growing blight on the
Nation's stock of housing. Without relaxing efforts to increase the housing
supply through an appropriate volume of new construction, a significant
improvement in housing conditions can be effected through a broad program of repair and modernization of existing structures and, in cooperation
with local governments, through a program of planned rehabilitation of
older neighborhoods. Furthermore, the construction and related activity
which this would involve would help to maintain prosperity in the building
and equipment manufacturing industries and serve as a sustaining force
in the entire economy.
Repair and modernization loans
The rehabilitation of our housing supply would be facilitated by certain
changes in the terms and conditions on which loans for the repair and
modernization of existing structures are available under Title I of the
National Housing Act. Specifically, the maximum insurable loan for the
repair or modernization of single-family structures should be raised from
$2,500 to $3,000, and the maximum allowable maturity extended from 3
to 5 years. Upward adjustments should also be made in the maximum size
and maturity of loans for the repair or modernization of multi-family dwellings and commercial structures. The inclusion of FHA's Title I program
within the scope of the permissive authority recommended above would
make it possible to adjust the terms and conditions of loan insurance within
the higher statutory limits, if necessary as a restraint on overexpansion of
credit.
FHA terms on mortgage loans secured by existing structures
Another forward step would be to remove the discrimination against
existing housing in present insurance programs. It is desirable to make
the terms on which the Federal Housing Administration will insure loans
on existing houses more nearly comparable with those available on new
houses. Not only would this expand activity directed to the rehabilitation
of existing structures, but it would give greater flexibility to our economic
system by facilitating transfers of houses, including those effected on the
so-called "trade-in" basis. Transfers and exchanges of houses deserve
emphasis at this time, because many families that acquired homes in recent
years are finding them inadequate in view of changed family size and improved economic circumstances.
NEIGHBORHOOD REHABILITATION
The adjustments in FHA legislation outlined above would contribute
significantly to the improvement of the Nation's stock of housing, and
as
would help to check the decline of older neighborhoods—to the extent that
this can be done by individual home owners acting more or less independently. The problem of arresting blight is vastly more difficult, however, in the large centers of population, where many structures are of the
multi-unit type, requiring large expenditures for rehabilitation, and where
deterioration is often most serious. A successful fight against blight can
be waged in these cities only if it is planned and carried forward on a basis
sufficiently broad to improve the character of a whole neighborhood. This
calls for determined action at the local level in the planning and administration of broad and soundly conceived programs of neighborhood rehabilitation. In some cases, urban blight can be corrected only by the total
clearance of an area and its subsequent redevelopment; more frequently,
however, the need is for selective demolition and rehabilitation, thus conserving and renewing what is still useful in older neighborhoods.
There are certain ways in which the Federal Government can assist
such programs, and steps should be taken at once to make this aid available. The changes in FHA legislation suggested above would be a step in
this direction. It would also be desirable to give explicit authority to the
Federal Housing Administration to insure mortgages on existing as well as
new properties within neighborhoods designated for renewal. In addition,
the Federal Government should provide financial assistance to communities
that are prepared to attack the problem of urban blight through planned
neighborhood rehabilitation. Federal aid could be promptly given for this
purpose without additional authorizations of funds, by making certain
of the privileges allowed under Title I of the Housing Act of 1949 available
to cities which indicate a capacity to carry out neighborhood rehabilitation
programs and a willingness to assume part of the cost.
It would be desirable to supplement the foregoing program of urban
renewal, by making mortgage loan insurance available on especially liberal
terms for low-income families displaced as a result of slum clearance or
urban renewal activities. The present program of public housing should
also be continued^ at least until it has been established whether the proposed
strengthened aids to private financing will make it possible to meet the
housing needs of low-income families through private effort.
REGULATIONS GOVERNING HOUSING CREDIT AIDS
Certain features of existing housing credit law and regulations have been
made obsolete by the inflation of recent years. An important adjustment
would be to raise the amount of the maximum loan that may be insured
by the Federal Housing Administration. At present, this is $16,000 for
owner-occupied one- and two-family houses. This amount, originally set
in 1934, has remained unchanged despite the great rise in construction costs
and in prices of housing that has occurred in the meantime. The maximum
might be raised to $20,000, with appropriate differentials for three- and
four-family dwellings.
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As suggested above, increases in the amount that may be loaned on the
basis of Title I financing, whether for the repair and modernization of a
single-family residence or for a multi-unit or commercial structure, are also
desirable. Finally, the administrative regulations of loan insurance and
guarantee agencies, which set standards on new construction and define
the kinds of modernization programs eligible for Federal credit assistance,
should be kept abreast of technological advances in the building and
equipping of homes.
SECONDARY MORTGAGE MARKET FACILITIES
An institution for discounting mortgage investments in good standing
would perform an important function in the American financial system,
and such an institution should be established. It would help make mortgage funds available in areas where there may be transient shortages of
capital. It should also be authorized to purchase insured and guaranteed
mortgages of specified types when the President directs that such action
is in the public interest. These functions, which are so necessary to a
smoothly operating market and to sound economic growth, must not be
confused with the unsound policy of pumping Federal credit into an
inflationary mortgage market. Such a policy serves the interests of
neither borrowers nor lenders, let alone of the economy at large. The
proposed agency should be financed with private funds to the greatest
extent practicable; but the Federal Treasury should be authorized to provide it with financial support, in order that it may have access to adequate
resources.
NEED FOR FURTHER STUDY
Further steps could be taken to facilitate the repair and modernization
of existing structures, by making supplementary advances on outstanding
mortgage loans more readily and economically available. To this end,
means to overcome the technical difficulties of insuring supplementary loans
are being studied.
In some quarters concern has been expressed over the possibility that
adverse economic developments might lead to extensive defaults on outstanding home mortgage contracts, because of the unusually liberal terms on
which many of them were written and the allegedly low equities of homeowners in their properties. Studies of the home mortgage situation suggest,
however, that defaults on outstanding contracts would not be widespread
in a moderate recession. Large numbers of homeowners have accumulated
substantial equities in their properties, and are unlikely to allow them to go
into default. Furthermore, present FHA and VA laws and regulations
permit the exercise of sufficient forbearance to prevent widespread difficulties. These matters, however, need further attention in our continuing
studies of economic preparedness.
284874—54
7
8?
Several financial problems, outside the housing field, are being examined
with a view to action. The Federal securities laws were enacted nearly
twenty years ago and have remained largely unchanged over that period.
Some modifications in these laws are needed which, while fully protecting
the interests of investors, will make the capital market more accessible to
businesses of moderate size. It would also be desirable to simplify the rules
and thus reduce the costs of registration of new issues and their subsequent
distribution.
Another problem under study is the feasibility of extending Federal insurance to the funds placed by small savers in the shares of credit unions.
Shareholders in these cooperative institutions do not have at present the
type of protection that is afforded to depositors in commercial and savings
banks and to shareholders in savings and loan associations.
Finally, the rapid growth in recent years of the Federal Government's
activities in the field of direct lending to businesses, to farmers, to municipalities, and to homeowners, and its related activities in insuring or guaranteeing loans by private lending institutions, presents an important problem
in connection with efforts to moderate economic fluctuations. These
manifold programs can and should be administered with increasing attention to their impact on the over-all economy and the contribution that they
can make to a stable economic prosperity. To the extent that they work
at cross purposes, or in a manner that tends to reinforce inflationary or
deflationary tendencies, they make more difficult the tasks of general
economic policy. The coordination of Federal activities in these fields
has been inadequate. Careful study must be given to appropriate means
for bringing it about.
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Chapter 8
Agriculture in an Expanding Economy
T
RENDS IN REAL FARM INCOME have been distinctly unfavorable since 1947, despite a generally prosperous national economy.
During 1947-53, operators' real net farm income per farm fell almost onethird and their real net farm income per farm-family worker fell one-fifth.
However, 1947 marked an all-time peak in realized net farm income, and
agriculture has been in a relatively good financial position to make postwar
readjustments. Its financial liquidity remains high, notwithstanding the
decline in farm incomes. The real value of total agricultural assets and of
farm proprietors' equities, per farm or per farm-family worker, is substantially above 1947 levels.
Rapidly mounting farm surpluses make it clear that agriculture continues
to face many of the serious economic problems which have plagued it, except in periods of war, during recent decades. These problems are extremely complex, and lasting solutions have thus far been elusive. Agriculture provides the classic example of a basic and important industry whose
adjustment to an expanding economy must be facilitated if it is to contribute
fully to, and share equitably in, stable economic growth.
MAJOR AGRICULTURAL PROBLEMS
Adjustments of production to meet consumer demand
Generally speaking, American agriculture has not been producing,
without significant surpluses or deficits, the foods and fibers which domestic
consumers and foreign buyers want at current prices. Over the years, consumer needs and tastes, costs of production, and world trade patterns have
changed radically. The difficulties of marketing several major crops, even
under prosperous conditions, indicate how incompletely American agricultural production has adapted to these basic changes.
Wheat and cotton offer striking examples of the present imbalance between production and consumption which high and rigid price supports—
based as they currently are on 1910-14 price-cost relationships—tend to
create. Between 1910-14 and 1953, the cost in manhours of producing a
bushel of wheat declined more than two-thirds, the cost of producing a
bale of cotton nearly one-half. Present price supports fail to reflect
adequately the important cost-reducing advances in agricultural technology
which these manhour data imply. In 1953 our wheat production was 1,169
million bushels, compared with an annual average of 724 million in 1910-14.
Yet annual domestic food consumption of wheat was virtually the same
89
(about 490 million bushels) in 1953 as forty years earlier. During the war
and immediate postwar period, our huge wheat output was a great asset
for ourselves and our allies. But, with the restoration of more normal world
conditions, exports and domestic feed and seed uses promise to absorb, at
present support levels, only about two-thirds of the wheat production
in excess of domestic food needs. As a result^ about 250 million bushels
from the 1953 crop must be added to already excessive carry-overs. The
same is true for cotton. Production in 1953 was 2.2 million bales greater
than the 1910-14 average but, during the current year, domestic consumption plus exports is expected to be 1.9 million bales less than four decades
ago, with 4.1 million bales being added to carry-overs. Meanwhile, substantial increases in per-capita consumption of fibers, instead of benefiting
cotton, have been captured almost wholly by synthetic fibers.
Both wheat and cotton have been "priced out" of important domestic and
foreign markets by high and rigid price supports. These supports have
encouraged domestic production of wheat and cotton beyond foreseeable
needs, and have contributed to an expansion of competitive foreign production greater than would otherwise have occurred. They have resulted in
huge surpluses in government hands, and have led to the imposition of
drastic controls on individual producers. Such undesirable consequences
are inevitable if present rigid price-support policies are continued indefinitely, without regard to current levels of supply, prospective demand, and
the costs of public storage.
For such crops, a transition to new price-support levels is necessary. However, since it will take time for producers to adjust to changing conditions,
this transition should be gradual. Government assistance can facilitate
shifts to the production of products for which the long-run demand is most
favorable. In this connection, it may be noted that crops and livestock
products accounting for about 56 percent of gross cash farm income currently receive no direct price support and gain little from the support program. Yet this nonsupported group includes most of the commodities
whose production must generally be maintained or expanded, if future
consumer needs are to be adequately met.
Reduction of price and income fluctuations
Another major problem of American agriculture—though one that is
not confined to this industry—arises from the great instability of its prices
and incomes. There are several reasons for this instability.
First, farm prices are much more sensitive to changes in general business
conditions than are the prices of things farmers buy. As a result, agriculture's "terms of trade" with the rest of the economy fluctuate widely,
being favorable as a rule in periods of business prosperity but taking a quick
turn for the worse when business recession appears. Agriculture therefore
has an especially strong interest in the over-all stability of the economy, and
needs effective protection of its price structure in the event of general recession. The difficulties of carrying out such a program are increased, how-
90
ever, if high and rigid price-support policies are pursued during generally
prosperous times. For then, storage stocks are likely to accumulate on a
scale so large as to accentuate the threat to the stability of farm prices
in a period of economic contraction.
Second, agricultural prices and incomes are peculiarly subject to the
vagaries of nature. Plant and animal diseases, drought, and floods cause
short-term fluctuations in crop yields, and may cause costly changes in the
size of livestock herds. By protecting the adequacy of physical supplies of
wheat, the feed grains, and cotton against weather hazards, war, and other
emergency conditions, a farm storage program can serve the public interest
well. But if public storage becomes a method of accumulating indefinitely
the surpluses induced by unduly high price supports, it loses most of its
effectiveness in offsetting the ordinary year-to-year variations which result
from natural causes.
Third, market prices can and often do mislead farmers in their production
decisions. Especially in livestock production, high prices tend to induce an
excessive expansion of output, which results later in unduly low prices that
in turn bring about overcontraction and a repetition of the cycle. A sound
storage program can help to reduce this type of instability; so can price
supports, announced as they are in advance of farmers' production decisions,
if not fixed at a level that encourages continuing excessive production.
High and rigid supports on feed grains are of doubtful wisdom. The feed
grains are cash crops to only a minor extent. If their prices are supported
at high levels, livestock producers who grow their own grains gain little,
while those who do not will suffer in periods of falling livestock prices.
Rural poverty
A third major problem of American agriculture is that many farm families have failed to share adequately in the fruits of the Nation's phenomenal
economic progress. Despite 25 years of national farm programs, numerous
farm families still have incomes that are not sufficient to provide a satisfactory level of living. This persistence of pockets of rural poverty in an
era of plenty gives cause for public concern.
Of course, a substantial number of farm families have already achieved
satisfactory levels of income. In 1949, about 1.9 million (36 percent) of the
Nation's farm-operator families had, in addition to housing and home-grown
foods, net cash incomes from all sources of $2,500 or more. More than a
fourth of these higher-income families were on part-time and residential
farms, deriving the greater part of their income from off-farm sources; and
most of the remaining families either combined the operation of small commercial farms with off-farm employment or operated larger commercial
farms on a full-time basis. Given remunerative local nonfarm employment opportunities, even families living on small farms can achieve a satisfactory level of living.
Of the farm families that are almost wholly dependent upon income from
agriculture, as a rule only those on medium-sized to large commercial farms
can be said to live well. In 1949, 1.2 million of the latter (22 percent of
all farms) accounted for 73 percent of the Nation's gross cash farm marketings. Since the operators of these farms sell the bulk of the Nation's farm
products, they stand to gain most from price supports, unless forced to bear
the brunt of acreage restrictions. Their principal economic problem is the
instability, rather than the low level, of farm prices and incomes.
On the other hand, in 1949 about 1.5 million (29 percent) of the Nation's
farm families were netting from all sources less than $1,000 of cash income—
not including, however, housing and home-grown foods. For the most
part, these families lacked significant amounts of income from off-farm
sources. At the same time, they produced too little for sale to benefit
appreciably from farm price supports, however high. The solution to their
income problem lies largely in the expansion of local nonfarm employment
or in movement to better opportunities elsewhere. If some of these families
are to achieve satisfactory levels of income from farming, their relatively
small farms must ultimately be replaced by more efficient, larger-scale
family farms. This will require both a continuing shift of underemployed
farm people into more productive work and a substantial influx of capital
into agriculture.
While readjustments of this type have actually been under way for some
time, the difficulties which they present have been complicated by recent
advances in agricultural technology. These have developed serious imbalances in American agriculture's total productive capacity relative to immediate domestic and export needs. Over the long run, the pockets of poverty
which persist in American agriculture will be most effectively reduced by the
growing opportunities for nonfarm employment that accompany the expansion of the economy. A growing economy will also provide the capital
and technical knowledge necessary to bring most of our farms closer to the
level of efficiency already achieved by the best farms.
PROPOSED AGRICULTURAL LEGISLATION
In formulating public policies to achieve a more stable, prosperous, and
efficient agriculture, we must start where we now find ourselves, and proceed
a step at a time. Compromises among partially conflicting objectives—•
such as stability, efficiency, economic freedom, and governmental economy—
are unavoidable here. The present situation is serious, and we can no longer
delay making those revisions in agricultural policy that will move us toward
desirable goals. Accordingly, it was recommended in the Special Message
on Agriculture on January 11, 1954 that, with minor changes, the Agricultural Act of 1948, as amended by the Act of 1949, be made fully operative
for all commodities.
The Acts of 1948 and 1949 had two distinct advantages over previous
agricultural legislation. First, for all "basic" commodities except tobacco,
they substituted adjustable price-support levels—that is, from 75 to 90 percent of parity, the percentage varying inversely with current levels of
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supply—for rigid 90 percent supports.
ernized" parity-price formula.
Second, they introduced a "mod-
Adjustable price supports
By the Act of 1949, Congress recognized the necessity of relating pricesupport levels inversely to current levels of supply, in order to avoid chronic
overproduction, excessive stockpiling, and drastic acreage controls. Thus,
Congress provided that, if supplies are above normal, price supports
shall be lowered by specified amounts to induce greater consumption and
smaller output; if supplies are below normal, price supports shall be raised
by specified amounts to encourage expansion of output. Although this
principle is wholly sound, the Congress has, up to the present time, postponed
the shift from high and rigid to adjustable price supports on wheat, corn,
cotton, peanuts, and rice.
Largely as a result of this action, the Commodity Credit Corporation's
commitments on January 1, 1954 already reached 879 million bushels of
wheat, 643 million bushels of corn, and 7.4 million bales of cotton—together representing a cost value of 4.3 billion dollars—and they are still
rising. Under these circumstances, the acreage restrictions imposed on
1954 crops are an inadequate corrective. Price-support levels designed to
encourage larger sales also appear to be necessary if further piling-up of
government stocks and regimentation of individual farmers are to be
avoided. Hence, it has been recommended that the price-support legislation of 1949 take effect for the "basic" crops, as presently scheduled, on
January 1,1955.
"Modernized" parity
By the Act of 1949, Congress also recognized the desirability of bringing
and keeping the base period for parity-price computations up to date.
In previous legislation, the "parity price" of a given farm product had been
defined as its average price in 1910-14 (or some other past period), increased by the same proportion as a general index of prices paid by farmers
had increased. This old parity had tended to overvalue such crops as cotton, corn, wheat, and peanuts, and to undervalue livestock and livestock
products. In "modernizing" the parity-price formula, Congress specified
that the average price of a given farm product in the most recent ten years
be used to determine its price relationship to other farm commodities, while
retaining the over-all 1910-14 relationship of farm to nonfarm prices.
Through this "modernized" parity—which is now in effect for all but four
commodities—provision was made for a relative price structure that is
more consistent with current consumer preferences, export demand, and
production costs.
Congress should avoid further postponement (beyond the present effective date of January 1, 1956) of the application of the "modernized"
formula to those "basic" commodities—corn, cotton, wheat, and peanuts—
whose old parity price is higher than the new. The Act of 1949 provided
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that, in such cases, the transition from the old to a lower new parity should
be limited to 5 percent a year. This provision for a transition should be
re-enacted with reference to the "basic" crops.
Disposal of surplus stocks
The proposed changes will advance us toward the goal of a sound agricultural policy. While they would continue the principle of assuring farmers a high degree of price certainty and price stability, they would also
encourage needed and effective adjustments of production to current demand and carry-over, discourage the building up of burdensome surpluses,
and reduce the frequency and extent of acreage restrictions on individual
farmers. Unfortunately, stocks have already reached huge proportions.
To cover present price-support commitments on 1953 and 1954 crops, it
has been recommended that the borrowing authority of the Commodity
Credit Corporation be increased from 6.75 billion to 8.5 billion dollars. In
order to introduce the new program gradually and give it a reasonable
chance of success, the influence of surplus stocks on current markets and
prices must also be reduced.
For this reason, it has been recommended that Congress authorize the
setting aside of up to 2.5 billion dollars' worth of CCC stocks, with the
objective of insulating them from regular domestic and foreign markets.
This measure, however, can succeed only if further major additions to
carry-overs cease after 1954. To the extent that foreign disposal is undertaken, it should be carried out so as to augment, rather than displace, the
normal volumes of world trade in our surplus commodities. The magnitude of our surplus problem could lead to practices harmful to the economies
of other friendly nations—a result that must be scrupulously avoided in the
interest of the entire free world economy.
For most farm products other than the "basic" commodities, the provisions of the Act of 1949 are reasonably satisfactory and, with other
amendments already proposed in the Special Message on Agriculture,
should be continued along present lines. Problems surrounding the current surplus of dairy products and oil crops can be largely solved by exercise
of the discretionary authority already held by the Secretary of Agriculture.
MATTERS FOR FURTHER STUDY
Even if the foregoing recommendations are fully accepted, important
matters remain for further study and future action.
First, present agricultural legislation could lead, in a period of economic
adversity, to a repetition of the mistakes of the thirties, when acreage restrictions and storage were used to maintain food and fiber prices to consumers whose wants were essentially unchanged but whose purchasing power
had fallen.
Second, the purposes and functions of storage in the farm program need
re-examination. The present price support program tends to maintain or
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raise the prices of storable products, without reference to the basic objectives
of storage policy.
Third, present legislation continues to place reliance upon acreage allotments as a means of contracting production. While such allotments may
be necessary during a period of readjustment, they are not likely to be successful for long, because they encourage rapid increases in the per-acre
yields of price-supported crops and larger output of unsupported crops on
the diverted acres. Furthermore, over a period of years, acreage allotments tend to freeze inefficient patterns of production among farmers and
regions, and to transform the benefits of the farm program into higher costs
as land ownership changes.
Fourth, the present statutory classification of farm commodities into
"basic" and "nonbasic," "mandatory" and "nonmandatory" requires reconsideration. The "basic" commodities (wheat, cotton, corn, tobacco,
rice, and peanuts) have consistently received preferential treatment through
mandatory price supports at high and rigid levels. On the other hand, most
crops and livestock products favored by recent consumption trends have
derived few benefits from the price-support program. They have been
classified as "nonbasic," with price supports (usually nonmandatory) at
variable levels.
Finally, neither the present nor the proposed agricultural legislation will
appreciably raise the very low incomes of some 1.5 to 2.5 million American
farm families. In many ways, this is the most important, yet most neglected,
problem of agriculture. The causes of rural poverty are many and complex, and they require careful and sympathetic consideration. Special
attention should be given to means of expanding nonfarm employment
opportunities; of making present public employment-information services
more effective; of improving rural education, health, and housing; of adapting present farm-management research and extension programs to the needs
of low-income farmers; of providing adequate intermediate-term credit for
farm diversification and enlargement; and to the feasibility of devising
"incentive" payments to speed the necessary shifts in the use of agricultural
resources, while preventing hardship during the difficult transition period.
The children of today's rural poverty will help till our soil, populate our
cities and man our factories of tomorrow. Clearly, we must attend diligently to their economic needs.
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Chapter 9
Social Insurance and the Minimum Wage
B
ECAUSE THE FLOOR OF SECURITY to the individual has been
built primarily upon welfare considerations, its contribution to the
economic progress of the United States has not been adequately appreciated.
Yet the worker is likely to be fully productive only if he feels reasonably safe
against want from unemployment, old-age, or misfortune. To help provide
such personal security, the Federal Government has developed or sponsored
systems of unemployment insurance, old-age and survivors insurance, and
public assistance, as well as programs to conserve health, educate the young,
rehabilitate the disabled, and provide security and opportunity to the war
veteran. In an effort to improve the lot of the low-income worker, it has
also established minimum wages under the Fair Labor Standards Act.
Some of these programs need improvement in scope and depth, and others
in clarity and financial strength. The specific recommendations that follow
are intended to make them more effective, both as conditions of progress
and as bulwarks against instability.
FEDERAL-STATE UNEMPLOYMENT INSURANCE SYSTEM
Unemployment insurance is a valuable first line of defense against
economic recession. Benefit payments go to a worker as a matter of right
and at the time he loses his income, instead of as matter of need and after
he has exhausted his savings or liquidated his house and car. In 1949,
a year of recession, the amount of benefit payments was 1.7 billion dollarsmore than twice the 1948 level. Benefits are payable, after a brief waiting
period, from State unemployment reserves of 8.5 billion dollars. When set
at appropriate levels, they can sustain to some degree the earner's way of
life as well as his demand for commodities. Thus, unemployment insurance
payments can help to curb economic decline during an interval of time that
allows other stabilizing measures to become effective.
Coverage
But even as a first defense, the system needs reinforcement. One
deficiency is its inadequate coverage. From the beginning only certain
classes of earners—now averaging annually about 36 million—have enjoyed
protection. A worker laid off by a Government agency gets no insurance
benefits despite the fact that in many types of Federal jobs he is as vulnerable
to lay-off or dismissal as the factory worker. It is recommended that
Congress include in the insurance system the 2.5 million Federal civilian
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employees, under conditions set by the States in which they last worked,
and that it provide for Federal reimbursement to the States of the amount
of the cost, estimated to be about 25 million dollars for the fiscal year
ending in 1955. In addition, it is hoped that the States will include under
the system the 4.2 million persons who work for them or for their municipalities and other political subdivisions.
A person lacks protection also if he works on a farm or in an establishment that processes farm products as an incident to farming. It is not suggested at this time to include farm workers; but it is recommended that
persons engaged in certain operations in the processing, packing, storing,
or delivering of agricultural commodities, which cannot reasonably be
classed as agricultural pursuits, be brought under the insurance system.
The number to be so added is around 200,000.
A much larger group of earners, numbering 3.4 million, are unprotected
in 35 States if they are employed by small businesses—meaning in most of
these States firms with fewer than eight persons on the payroll. It is proposed that Congress amend the present law to cover employees of businesses
with fewer than eight employees, on the ground that such workers need
protection no less than those of larger, and often more stable, enterprises.
Officials in States that already insure the employees of small firms report
that the administrative burden of both the agency and the employer is
manageable.
Experience-rating period
The Federal Unemployment Tax Act does not permit a State to give an
experience rating, and therefore a tax reduction, to the employer—however
stable his employment—until he has had at least three years of covered
experience. A newly covered employer is obliged to pay the full 2.7 percent of his taxable payroll and is thus put at a competitive disadvantage
with the average employer, who has over the years been able to reduce
his contribution to 1.4 percent and, in over a dozen States, to 1 percent
or less. This extra cost could be troublesome if the expansion of coverage
coincided with a business contraction. For these reasons it is recommended
that Congress allow the shortening, from three years to one, of the period
required to qualify for a rate reduction.
Amount of benefits
A second inadequacy is the size of benefits. Originally, upon the recommendation of the President's Committee on Economic Security in 1935,
the States set benefits generally at 50 percent of weekly wages. However,
they also fixed dollar maximums which have since significantly curtailed
the benefits. The effective ratio of average weekly unemployment benefits
to average weekly wages of covered workers was 43 percent in 1938. Since
then, with dollar maximums failing to keep pace with rising wage levels,
the effective ratio has fallen to 33 percent. At present, these maximums
are typically between $20 and $30 weekly. It is suggested that the States
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raise these dollar maximums so that the payments to the great majority
of the beneficiaries may equal at least half their regular earnings.
Duration of benefits
A third deficiency is the duration of benefits. Only two dozen States
provide for 26 weeks, and only four of these pay benefits for that length
of time to all persons who meet minimum requirements for any benefits.
During the 1949 recession, almost 2 million persons exhausted their rights,
most of them in less than 4l/£ months. Yet a conspicuous feature of unemployment is that, as it increases in amount, it also increases in duration
for the individual. For example, in April 1940, when unemployment was
large, three-fifths of those seeking employment had been out of work six
months or longer, compared with an average duration in 1953 of less
than two months. It is urged, therefore, that all of the States raise the
potential duration of unemployment benefits to 26 weeks, and that they
make the benefits available to all persons who have had a specified amount
of covered employment or earnings. A six-month period would not prevent
exhaustion of benefits in a severe slump; but in a minor downturn it should
be adequate for a great majority of the claimants.
Federal loans to reserve funds
A fourth point deserves attention. The present law requires that unemployment benefits in each State be paid out of its own earmarked reserve
in the Federal Treasury. The reserves of most States are sufficient to
finance payments for a number of years at the unemployment experience
of 1946-52. But the reserves of a few States are less adequate and might
be jeopardized by widespread unemployment. It is recommended, therefore, that the Congress provide machinery for granting non-interest-bearing
loans to a State whose reserves are near exhaustion.
The Federal Unemployment Tax Act levies a tax on all covered employers, of which the share that is retained by the Federal Government is
0.3 percent of taxable payrolls. Annual appropriations are made to cover
the costs of the State and the Federal Governments in administering the
Act. Since these appropriations are less than the receipts of the tax, it is
possible to use the difference to establish a fund from which loans to needy
State funds can be made. In the interest of allowing a State a reasonable
interval in which to readjust its economy and attract new industries, it is
recommended that repayment of any loan made from the fund be postponed
until after it has been outstanding for four years. Repayment should
nevertheless start earlier, if at any time the State's fund rises above a safe
minimum or its contribution rate is not sustained at a level reflecting its
financial responsibility.
Improved benefits and administration
Adoption by Congress and the States of the above recommendations
would extend protection to more than 10 million additional workers, case
the financial burden on newly covered employers, raise benefits, lengthen
durations, and save the States' reserves from exhaustion without deterring
new industries from entering a State undergoing economic readjustment.
They would constitute the most important improvement for defending the
worker against recession that has been made in our Federal-State Unemployment Insurance System since it was instituted more than a decade
and a half ago.
It is highly important that the recommended improvement of benefits be
accompanied by strict administration of the law, so as to prevent abuses and
to assure that benefits are paid only to workers who are entitled to them.
Nothing is more likely to cast doubt on the unemployment compensation
system, despite its great social utility, than lax administration.
FEDERAL OLD-AGE AND SURVIVORS INSURANCE SYSTEM
The present system of Old-Age and Survivors Insurance covers about
four in five of the civilian labor force and pays average monthly benefits
of $49 to a retired worker, and of $84.75 to a retired worker and his wife,
compared with maximum benefits of $85 and $127.50, respectively. At the
end of 1953 it was paying benefits to almost 1.5 million widows and children,
as well as over 4.5 million aged—close to 6 million persons altogether.
Benefits are financed from payroll taxes—one-half being paid by the employer, except for the self-employed. These combined tax rates rose to 4
percent on January 1, 1954. For the future the law provides for additional
financing by periodic rate increases.
Although desirable changes were made in 1950 and 1952, the System has
urgent need of further improvement. Millions of workers are still excluded, and benefits have not kept pace with wage levels or living standards.
Moreover, in the interests of economic growth, as well as of individual
welfare, the retirement test should be so adjusted as to remove barriers to
part-time productive employment. On the other hand, if an aged person
is obliged to give up work, both human and economic considerations argue
for benefits in reasonable relation to his previous earnings.
Coverage
Coverage should be extended to bring into the System some 10 million
additional workers, 4 million of them on a voluntary group basis. The
new groups would include, principally, professional persons in independent
practice, self-employed farmers, hired farm workers and domestic workers
not now covered, members of State and local retirement systems, and ministers of religion. Further broadening of the coverage is being considered
by the Congressional Committee on Retirement Policy for Federal Personnel, which will soon report a plan for including Federal employees
in OASI without impairing the independence of present Federal retirement plans. After the Committee has made its report, appropriate
recommendations will be made to the Congress.
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Amount of benefits
Old-Age and Survivors Insurance benefits should be increased; first,
by eliminating from the earnings base the four lowest years of earnings;
second, by raising the benefit to 55 percent of the first $110 of the average
monthly wage, plus 20 percent of the balance; third, by increasing the
minimum benefit from $25 to $30; fourth, by raising from $3,600 to $4,200
the annual maximum above which wages are not counted in computing
benefits or taxes. As regards the retirement test, the earnings permissible
without loss of benefits should be put on a yearly basis for all beneficiaries,
and liberalized in amount.
Benefit rights of the disabled; rehabilitation
For those with substantial OASI work records who suffer total and
extended disability, benefit rights should be preserved without diminution or loss until they reach age 65. Furthermore, all disabled workers
should be referred to the State Vocational Rehabilitation agencies. An
expanded and improved program of vocational rehabilitation to help bring
more persons back to productive employment was proposed to Congress
on January 18,1954.
Financial and other aspects
The substantial steps toward improvement of the OASI system can be
safely taken without any immediate increase in the payroll tax rates. The
net additional cost of the Administration's recommendations would be,
on a long-term basis, about one-half of one percent of the annual payrolls
subject to OASI taxes.
It may be observed, in passing, that, during the transition in 1954 to the
recommended broader coverage and more liberal benefits of unemployment
compensation and old-age and survivors insurance, the increased expenditures for benefits under OASI will far more than offset the net addition to
tax payments under the unemployment compensation system.
Low INCOMES AND THE MINIMUM WAGE
The prosperity enjoyed by the overwhelming majority of Americans
should not blind us to the minority of families with annual incomes below
$2,000, or even $1,500. Low annual incomes are not caused solely by low
wages, nor are high incomes assured by high hourly wage rates. Some
people have no earnings at all, or extremely low earnings because of partial
unemployment, sickness, or other factors. Some do not earn enough, even
when fully employed, to support their families at a decent living standard.
As one means of dealing with the problem of low incomes, Congress
and some State legislatures have sought to place a floor under wages by requiring employers not to pay less than a certain hourly rate. Minimum
wage laws in the United States now apply to only 28.5 million employees.
The Federal Fair Labor Standards Act covers about 24 million—two-
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thirds of them factory workers—at a minimum of 75 cents per hour, with
few exceptions other than for learners and handicapped. This 75-cent
minimum became effective just before the invasion of Korea, when the
cost of living was appreciably lower than at present. Twenty States cover
another 4.5 million workers, the majority of them women or minors in
retail trade. The State minimums, usually established under wage orders
by specially appointed boards, range for the most part between 60 and 75
cents.
There are several considerations concerning minimum wages that deserve
comment. These relate to legal coverage, to appropriate level, to impact
upon self-employed persons of low income, to fundamental measures for
reducing poverty, and to the method of achieving adjustments in minimum
wages.
Coverage
Neither the Federal nor the State laws now include the lowest-paid
workers. Yet a floor that does not support the poorest worker may compound his miseries in two ways: it may force him to pay higher prices as
a customer of the covered industries whose costs have risen; and it may
push down his own wages by obliging him to compete for jobs with persons
whom the covered industries have let go, because they are unable to pay
the higher minimum. An effective minimum-wage program should cover
millions of low-paid workers now exempted.
Size of the minimum
A minimum does not protect the inadequately rewarded worker if it is
too low. On the other hand, it may not benefit him if it is so high as to
push up the whole scaffolding of wages and of costs of doing business,
thus leading either to inflation of prices and the worker's own living costs,
or to elimination of the less efficient employers and workers. Yet the
ability of the employer to absorb a high minimum wage is limited. Indeed,
the low-pay industries of today are often those earning modest profits,
having limited opportunities to increase productivity, and containing firms
easily squeezed out of business by rising costs.
The self-employed worker
It is important to recognize that the economic condition of the wage
earner cannot be set off sharply from that of the person who provides his
own employment. The Census has revealed that one in four of the
families with incomes under $1,500 in 1950 had the major source of their
earnings in self-employment. A minimum that would benefit the wage
earner materially may put a heavy burden on the small farmer or small
business operator, not only of higher prices for what he—like the uncovered
wage earner—buys, but also of the higher wages he must pay if he hires
assistance. Protection to the wage earner must be considered with full
regard to the complexities of our society.
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Basic means of reducing poverty
A minimum wage fixed by law helps to protect wage earners against unjustifiably low compensation. But a minimum wage program is an expedient of limited value for dealing with low incomes. The best help for
the lowest earner is to enhance his usefulness as a worker, and to improve
his knowledge and mobility. Some individuals manage to attain economic
success with little formal learning; but, on the average, there is a close
relation between earnings and education. Fortunately, education is being
steadily and rapidly extended. Already, the average American worker
under 35 years of age is a graduate of high school.
It is also important to keep in mind that, although some low-wage firms
are lucrative, the firms that skimp on rewards to their workers are, not
infrequently, those in which profits are also small, owing in part to inefficient
management. Improvements in efficiency of worker and employer will
take time; but it cannot be doubted that they—rather than a minimum
wage—provide the major escape from poverty.
Conclusions
While minimum wage laws do not get at the fundamental causes of
poverty, they can make a useful contribution to its reduction. Recognizing
that an increase of the minimum now provided by Federal law and an
expansion of its coverage are desirable, the exact nature and timing of these
changes must be worked out with a view to the best interests of the economy.
We must not proceed—as has happened at times in the past—to ignore some
workers and pretend to aid others, while in fact raising their cost of living
and reducing their chances of employment. We should undertake adjustments of the minimum wage at a time when economic activity can take
them in stride, thereby minimizing the risk of unemployment of the less
productive workers whose welfare the minimum wage seeks to aid. The
Secretary of Labor is continuing his intensive canvass of this highly complex
problem and is consulting with appropriate groups. At the proper time
recommendations will be made to the Congress.
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Chapter 10
Planning of Public Works
T
HE FIRST CHAPTER of this Report noted the opportunity to devote our productive potentialities increasingly to peaceful purposes.
This should mean a swelling stream of private income and expenditure to
support better living conditions. It should mean also the use of some governmental revenues,, as they may be released from military and foreign aid
programs or generated by economic growth, to help build the Nation's
physical stock of public capital. In our country, the major part of public
works programs has been and should continue to be the responsibility of the
States and their municipal subdivisions.
ROLE OF PUBLIC WORKS
A strong economy requires that the national estate of soil and water resources be conserved. It is no less important that schools and welfare institutions, highways and airports, rivers and harbors, parks and recreational
areas, and other needed public facilities be enlarged and improved concomitantly with the increase of population, private wealth, and incomes.
Indeed, failure to augment our public assets may check the growth of private
wealth, as the failure of the present street, highway, and parking systems to
meet the needs of 55 million motor vehicles is now threatening to do.
A growing economy brings with it new needs for buildings and engineering projects that clearly lie outside the realm of private enterprise. Many
of these needs—for example, for schools—should be met as they emerge.
However, a considerable number of public projects are, by their very nature, more or less postponable.
Our public works programs should be so designed and executed as to
contribute to economic stability, by being accelerated in slack times and
restrained in boom times. Within limits, expenditures for public works can
be timed to serve the interests of stability, but only if a reservoir of engineering studies and blueprints for specific projects has been prepared well in
advance of need. A considerable amount of advance preparation of drawings and specifications has been completed by the Federal, State, and local
governments, and more is under way. If it should become necessary, outlays for Federal public works could be stepped up by one-half or more
within a year. State and local outlays, which are now the highest on record,
might be expanded to a similar extent, if financial arrangements were
adequate.
284874—54
8
I<>3
It goes without saying that an effective public works program must meet
genuine public needs and thus earn the endorsement of the community.
Its execution must be compatible with private construction activities, with
which competition for resources should be kept to a practical minimum.
Furthermore, just as public activity should supplement and encourage private, so also should Federal projects supplement those of States and municipalities. Yet a public works program must be capable of administration
without centralizing the operations of Government; State and local governments should carry their full share of responsibilities.
NEED FOR PUBLIC WORKS
In recent years, public works have accounted for about one-third of total
new construction, with State and local outlays being about double the Federal. In 1953, construction for State and local government account
amounted to 7.1 billion dollars, and for Federal account to 4.1 billion, out of
a total expenditure for new construction of 34.8 billion dollars. The backlog
of desirable Federal, State, and local public works is counted in tens of
billions of dollars. Although the rate of public construction has been
rising significantly in recent years, it is much smaller than what is needed
to keep abreast of the growth of the economy and to eliminate within, say,
the next decade the accumulated need for extensions or improvements of
highways, schools, hospitals, sewer and water facilities, parks, forests, and
other elements of the public estate.
State and local construction
The largest current requirement for predominantly State and local facilities is streets and roads. It has been estimated that an annual expenditure
of 3.5 billion dollars would be required for ten years to eliminate the
existing backlog for Federally aided systems and another 1 to 2 billion
dollars for other roads and streets. In the meantime, many roads now
adequate would need to be improved as traffic increased, or rebuilt because
of normal wear, adding over 1.5 billion dollars of construction annually,
while maintenance costs would average another 1.7 billion. Thus, the total
annual expenditure required to provide an adequate road system within a
decade is apparently over 8 billion dollars, which compares with a current
outlay of about 5 billion.
The next largest State and local backlog is for schools. It has been estimated that approximately 10 million pupils now have inadequate school
facilities, and that the required construction of public and private elementary
and secondary schools to erase this need would come to over 12 billion dollars.
Elementary and secondary school enrollments over the next four years will
grow about 1.5 million a year, which, together with normal replacement of
obsolete schools, would add an annual construction requirement of about
3 billion dollars. A total annual expenditure of about 5.5 billion dollars
would therefore be necessary to meet current needs and to eliminate the
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backlog of such school facilities within five years. Clearly, the needs of
education cannot long be deferred.
The backlog for college and university construction is reported to be in
the neighborhood of 6 billion dollars. About 2^4 million students are now
enrolled in institutions of higher education, and by 1960 the number may
approximate 3 million. If the construction backlog were worked off over a
period of 10 years, and the additional facilities required for current growth
in enrollment were put in place, the expenditure would average about
1 % billion dollars per year. By adding this figure to that for primary and
secondary school structures, we get an estimate of 6% billion dollars per
year for school construction, which compares with a current rate of about
2.5 billion dollars.
Hospitals are another large potential of State and local construction.
The State hospital plans approved under the Hospital Survey and Construction Act indicate a need for over 500,000 hospital beds, of 1,500
primary health units, and of 1,350 auxiliary health units. To adhere to
the standards set up under this Act and meet the backlog of hospital
needs in the next ten years, it would be necessary to spend more than
1.5 billion dollars a year. Currently, about 0.6 billion dollars is being spent.
The accumulated requirements of local water and sewerage facilities are
impressive. To eliminate the backlog of water facilities within five years,
and also provide for current growth of population, annual expenditures
would have to come to about 1.2 billion dollars, compared with a current
rate of 0.5 billion. Even more serious is the shortage of sewers and industrial waste facilities, the capacity of which has not kept pace with the rapid
urban growth of the last decade. To meet these requirements within five
years, as well as to provide for current growth, annual expenditures of 1.8
billion dollars are necessary, which compares with a current rate of about
0.6 billion. The needs for slum clearance and urban renewal, discussed in
Chapter 7, add materially to the potential volume of local construction
activity.
Federal projects
The listing just made of construction needs in States and localities is by
no means exhaustive. There is, moreover, an accumulated need for Federal
public works. For several years now, the Federal Government has held back
certain construction projects authorized by the Congress for the Bureau of
Reclamation, the Corps of Engineers, and the Public Buildings Service.
Some programs of the Forest Service, National Park Service, Soil Conservation Service, and other agencies have likewise been properly held in
abeyance, because of the prior claim of war and defense requirements on
manpower, materials, and public funds.
Current action
The massive accumulations of need for local, State, and Federal public
works are attributable to the growth of our population, its migration, the
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rise in income and living standards, and the deferrals of construction during
World War II and the Korean war. Some of the shortages, especially
of highways, are retarding the growth and interfering with the efficient
operation of the economy. Steps must be taken to extend and strengthen
the Federally aided highway system.
A part of the Nation's highway needs can be met by the States without
straining their budgets, through the construction of toll roads. Toll roads
have come to be widely accepted. So far, specific plans have been formulated by the States for only a fraction of the main rural highway routes that
could be wholly self-financing toll roads. The development of plans for
urban toll roads has proceeded even more slowly. The Federal Government should encourage studies of the economic feasibility of toll road
projects, together with engineering surveys, by making advances available
to the States for these purposes. It seems likely that, by lifting legal impediments to immediate possession of rights of way and by pushing engineering plans even before projects are authorized, it would become feasible for
the States or their special authorities to commence a considerable volume of
construction of toll roads within a year.
The local, State, and Federal governments should turn to the pressing
tasks of eliminating, step by step, the deficiencies of other types of public
works. It is necessary also to look ahead, and to be prepared to step up the
rate of public construction, if business conditions make this advisable.
ADVANCE PLANNING OF PUBLIC WORKS
Federal program
The Federal Government is now equipped with a considerable volume
of project drawings and specifications. For some, blueprints are ready;
for others, the work is organized to carry planning along just ahead of
construction. The Federal Government would be able to expand its
construction rapidly in the event of need. To a degree, this could be
accomplished without new legislation.
For some years the Bureau of the Budget has assembled annually the proposed six-year construction programs of all Federal agencies. In the spring
of 1953, work was started to improve and organize this information so
that a continuous inventory of plans would be available. Systematic information is required to reveal bottlenecks and to speed the initiation of
useful projects. Hence the proposed projects are being sifted and classified according to their size, type, location, status of plans, urgency, and
other practical criteria. Many small Federal projects, including renovation and repair of existing facilities^ can be started upon short notice or
terminated promptly.
There remains the large task of evolving truly integrated long-term
programs of major Federal works in the fields of water and soil conservation, to which effort will be devoted during the present year.
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State and local programs
It is easier to plan, organize, and coordinate Federal public works, and
to harmonize them with economic requirements, than to bring to readiness the programs of thousands of State and local governments. Yet almost two-thirds of total public construction is for local account. While
it is highly important that the planning, scheduling, and financing of local
facilities remain the business of the States and municipalities, the Federal
Government should be prepared, in case of serious need, to help the State
and local governments work out their problems.
The Federal Government must cooperate with State and local governments. To assist localities in building an inventory of drawings and specifications for high priority projects, it would be desirable to make interestfree loans for this purpose.
In general, State and local governments now have the financial means
to implement a significant expansion of public works. However, it is only
realistic to recognize that, in the event of serious unemployment, their circumstances might make it difficult to continue a high rate of public construction. In such a case Federal financial assistance would be necessary.
COMMUNITY ACTION To REGULARIZE EMPLOYMENT
The emphasis placed on public works in this chapter must not be interpreted to mean that they constitute the sole contribution that States and
localities can usefully make to economic stability. Communities threatened
with unemployment as a consequence of the decline of particular industries,
have in recent years taken active steps to regularize local employment.
Indeed, civic groups in whole regions are attempting to overcome structural
unemployment by a reorientation of their industry. With confidence in
the determination and ability of the Federal Government to moderate
fluctuations, some local civic groups have marshalled the economic knowledge at hand and, in an atmosphere of cooperative self-help and community
pride, have contributed to the development of their communities. Such
civic programs usually aim at broadening and diversifying a community's
industrial base, and seek to reveal latent resources. For the individual
community program, the essential needs are local leadership and technical
skill. Some labor unions and business associations have established programs for organizing and assisting community groups to study and solve
their local employment problems. The Federal Government can facilitate
the process through provision of economic information and counsel; but the
drive and leadership must necessarily come from the local community
itself.
In a dynamically evolving economy, there is no end to the process of selfimproving adaptation by the community—and the individual and the firm
as well—to the changing forces of economic growth.
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Chapter 11
Economic Relations with Other Countries
HE BROAD ECONOMIC ADVANCE of the nations of the free
world during 1953, to which we have referred previously, is heartening evidence of the effective use made of the aid given by the United States
to postwar reconstruction and development. Increasingly, foreign countries
are resuming domestic policies aimed at maintaining budgetary balance
and stable prices. United States aid was intended to help, and has helped,
these countries bridge the difficulties and reduce the burdens of postwar
economic readjustment. It could not, of course, serve as a substitute for
financial measures needed to achieve internal balance.
T
PROGRESS TOWARD A FREE WORLD ECONOMY
The vitality of free institutions has enabled them to survive the strain
of two world wars and a world depression of great magnitude. In spite of
the growth of economic controls arising from these events, the trading
system of the free world is still mainly one in which transactions are conducted by private enterprises rather than by governments. The interference of the State with competitive market forces has receded from its
war-time peak. Economic reconstruction and the recovery of production
have in most countries been accompanied by a relaxation or removal of
price controls, rationing, state buying, and trade and exchange restrictions.
In spite of new strains and temporary setbacks associated with the Korean
war, notable progress has been made since 1950 in returning to freer
economic processes. But much remains to be done before an enduring balance of international transactions in goods and currencies is re-established.
There is a general recognition, here and abroad, of the need for a freer
system of trade and payments. It is a responsibility of governments to
create and maintain the circumstances in which private traders can conduct
their transactions with the fewest impediments from exchange controls or
trade restrictions. Sustained prosperity in an interdependent world is a
task of all free nations, working together.
The progress already made toward liberalization of international trade
and payments should be continued by vigorous efforts to reduce the remaining barriers that stand in the way. Among these impediments are the uncertainties arising from the sensitivity of other economic areas to fluctuations
of the United States economy. The program of action outlined in this
Report to strengthen the forces of economic growth and resistance to deflation, combined with the determination of the Federal Government to employ
108
all of its powers to prevent severe slumps in the future, should be as reassuring to the peoples of other countries as it is to the people of the United
States. In common with other countries, the United States is determined
to continue its efforts to attain the common objective—a steadily expanding
world economy.
DOMESTIC ECONOMIC STABILITY
A policy to promote economic growth and stability cannot be limited
to our domestic affairs, but must, of necessity, extend to our relations
with other nations. One of the basic lessons of history is the interdependence between prosperity at home and prosperity abroad; between
depression at home and depression abroad. This close link might conceivably be broken by the adoption of nationalistic measures, tending to
isolate individual nations and areas from outside fluctuations. The objections to such policies are, however, overwhelming. The sacrifices in
economic efficiency and living standards which they involve have long
been emphasized and need not be restated. The rigid controls necessary
to keep such an economy in balance would be intolerable. Equally important, economic isolation is no guarantee of internal stability. The
severity of the depression of the thirties was aggravated by the nationalistic character of the programs devised to combat it, as "beggar-my-neighbor" policies spread currency depreciation, tariff increases, import restrictions, and exchange controls from country to country. Flexible trade
and capital movements, supplemented by cooperative policies between
governments and central banks, are far more likely to help stabilize national
economies, to cushion the impact of domestic disturbances, and to prevent
their spreading to the world at large.
The system toward which we must work is one which will provide
increasing opportunities for mutually advantageous trade among the free
nations, and which can operate without the repeated extension of grantsof-aid from any nation. There is no single measure by the United States
or any other nation which can bring such a system into being. Its achievement will call for a variety of measures on the part of all nations. The
principal contribution that the United States can make to the achievement
of an efficient system of international trade and payments is to maintain
a vigorous, healthy, and expanding economy.
REDUCTION OF INTERNATIONAL BARRIERS
This, however, is not enough. World trade has been conducted in years
past under the constant threat of the erection of new trade barriers by all
of the major importing countries. In the case of the United States, as our
foreign trade policy has been debated from year to year, other nations have
come to entertain doubts concerning its continuity. Although we have in
fact carried out vigorous tariff-reducing programs in recent years, we have
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undertaken these measures in an atmosphere of constant uncertainty. Our
trade policy and customs administration should provide a sense of continuity, stability, and forward movement to the rest of the world.
These policies of the United States should facilitate, and be accompanied
by, similar measures by other nations to reduce governmental interference
with the free movement of goods and capital. In such a program high priority should be given to the elimination of bilateral and discriminatory trade
and exchange techniques which strike at the very core of international competition and currency convertibility. This should lay the basis for further and
continuing advances toward the general reduction of trade restrictions,
as agreed to and already begun under existing international agreements.
At the same time, barriers to the movement of private capital should be
removed, so that it may play a fuller role in developing new sources of
materials, creating new productive facilities, and contributing to an increase
in standards of living throughout the free world.
The Administration is now intensively engaged in assessing the findings
and recommendations of the newly completed report of the Commission on
Foreign Economic Policy. On the basis of this study a comprehensive
program will be presented to the Congress for action.
no
Chapter 12
Dealing with Economic Instability
T
HE PRECEDING CHAPTERS have outlined a program of action
to stimulate the expansive forces of individual enterprise, and at the
same time to strengthen the ability of the economy to check either recessionary or inflationary trends. The program calls for action not only by the
Federal Government, but also by State and local governments. Business
firms and financial institutions have important roles to play in the maintenance of prosperity, and so do workers and consumers. If consumers should
sustain an even rate of spending, if businessmen should respond to changes
in sales by varying the effort put into selling rather than investment outlays,
if financial institutions should use uniform credit standards whether business
is booming or slackening, then the tasks facing the Federal Government
will, indeed, be greatly lightened. But what private economic groups do is
not independent of the directions taken by public policy. By honoring the
Employment Act and by demonstrating full determination to act as circumstances require, the Government can create a climate of economic opinion
that will foster stabilizing activities by private groups and thus ease the
burden that the Federal Government itself need assume.
This Economic Report to the Congress, the first one submitted by this
Administration, began by outlining general principles of governmental action, and then developed a concrete program to foster an expanding economy, free from the ravages of both deflation and inflation. Other reports
will continue the work here begun. It is a duty of the Administration to
inform the Congress and the people as clearly as it can of the major policies
it aims to pursue. Economic life is, by the nature of things, surrounded by
uncertainties, and not the least of these in the past has been the course of
governmental policy itself. A government that wavers in its policy or is
excessively reticent about it can, at times, be as injurious to business and
consumer confidence as a government that pursues punitive measures. It
is desirable, therefore, before closing this Report, to answer as far as we properly can at this time some of the questions about business fluctuations that
are in the minds of many citizens.
NEED FOR CONSTANT VIGILANCE AND FLEXIBILITY
In discussions of the relation of public policy to the business cycle, this
question is commonly raised: At what point should or will the Federal
Government act in the interest of checking depression or inflation? The
thought seems to be that the Government can stand aloof until some price
index or unemployment figure reaches this or that magnitude.
ill
This is not a realistic concept of public policy. It overlooks the need for
constant vigilance and preventive action, day by day and week by week.
The decisions currently made by Government, whether in the sphere
of taxes or housing or defense or agriculture or bank credit or any other
major area, inevitably have implications for economic growth and stability, if not immediately, then in a later day. The new concept that is
emerging in the practical art of government, as Chapter 3 may already
have suggested, is to subject every act of proposed legislation or administrative decision, as far as that is humanly possible, to review from the
standpoint of the contribution it is likely to make, whether in the immediate
or a more distant future, to the attainment of an expanding economy with
maximum employment and without price inflation. That was the basic
intent of the Employment Act of 1946, and it is a guiding principle of this
Administration, If our economy is to have a good chance of staying
firmly on the road that separates inflation from recession, the Government
must be alert and sensitive to every economic development, including its
own myriad activities; it must be prepared to take preventive as well as
remedial action; and it must put itself in a state of readiness to cope with
new situations that may arise.
This Report has sought to convey these basic principles, both in its
review of the directions taken by governmental policy during the past year
and in the new program of action that is being recommended. But the
question may be asked: Is the proposed program sufficient to insure stable
prosperity? Does it deal adequately with the economic conditions that are
currently emerging? Or, may it not go too far and unleash new inflationary
forces? To these questions, no answer can be both short and honest.
The recommended program is sound. It is designed to meet the needs
of the current situation, to strengthen the basic expansive forces of individual enterprise, and to protect economic stability.
But no one, however learned or wise, can predict with certainty the precise strength or influence of a particular governmental program. Further,
apart from what the Government does, economic life continually turns up
new problems and opportunities, as fresh developments occur in one or
another part of the domestic front or the international field. The Government must be ready to deal with numerous contingencies, and beware of
tying the fate of the Nation to a rigid economic program based on a categorical forecast.
INSTRUMENTALITIES OF POLICY
In recognition of the fallibility of economic forecasts, this Report has
recommended several measures that will automatically tend to strengthen
the ability of the economy to resist either recessionary or inflationary trends.
But automatic stabilizers cannot be counted on to do more than restrain
either an upward or a downward tendency of the economy. In view of
their limitations, and because of the impossibility of being entirely sure in
advance of the precise effect of any governmental program, the Government will pursue flexible policies in the future as it has in the past year—
that is, policies that can be readily supplemented if they prove inadequate,
or quickly modified if they carry the economy to the threshold of price
inflation.
The arsenal of weapons at the disposal of Government is very formidable.
It includes credit controls administered by the Federal Reserve System,
debt management techniques of the Treasury, and the authority of the
President to vary the terms of mortgages carrying Federal insurance, apart
from the wide extension of that authority recommended in this Report. It
includes the administration of the budget, which permits more flexibility
than is commonly appreciated, quite apart from new legislation or new
appropriations by the Congress. It includes also other areas of action, such
as taxation, public works, accelerated depreciation for defense plants, and
the newly recommended agricultural supports. And if the powers possessed
by the Executive should need to be increased to cope with some new economic development, the Administration will promptly seek from the Congress the additional authority that it requires.
ACTIONS IN CASE OF NEED
Since economic troubles have different causes and often require different
treatment, no detailed blueprint of specific actions can be responsibly laid
down in advance of the event. There are, however, certain broad principles that will guide this Administration in dealing with the possible threat
of a depression. These should be made clear.
The first and foremost principle is to take preventive action, as was done
during the past year and as is further recommended in this Report. The
second principle is to avoid a doctrinaire position, work simultaneously on
several fronts, and make sure that the actions being taken harmonize and
reinforce one another. The third basic principle is to pursue measures that
will foster the expansion of private activity, by stimulating consumers to
spend more money and businessmen to create more jobs, so that the economy
may resume its growth with new strength. The fourth principle is to act
promptly and vigorously if economic conditions require it. The Government
will not hestitate to make greater use of monetary, debt management, and
credit policy, including liberalized use of Federal insurance of private
obligations, or to modify the tax structure, or to reduce taxes, or to expand
on a large scale the construction of useful public works, or to take any other
steps that may be necessary. The Government must and will be ready to
deal with any contingencies that may arise. An essential part of this preparedness under present circumstances is a higher Federal debt limit, which
is already necessary for the efficient conduct of the Government's current
operations.
The need for constant vigilance and preparedness by Government does
not, however, justify constant stirring or meddling. Minor variations in
"3
activity are bound to occur in a free economy, or for that matter in any
type of economy. The arsenal of stabilizing weapons will be drawn upon by
the Government boldly, but not more frequently than is required to help
maintain reasonable stability. Nor will flexible policies aiming to minimize
economic fluctuations be permitted to interfere any more than is necessary
with the fiscal objective of bringing down the scale of Federal expenditures,
reducing taxes, and arriving at a budgetary balance.
THE BASIS FOR PROGRESS
The Government can greatly help to maintain prosperity. But it is well
to recall the accumulated experience of generations which has taught us that
no Government can of itself create real and lasting prosperity. A thriving
economy depends fundamentally on the enterprise of millions of individuals,
acting in their own interests and in the interests of their families and communities. The American people are highly skilled, imaginative, enterprising, and forward-looking. The best service that the Government can render
to our economy, besides helping to maintain stability and insuring a floor of
protection for the population, is therefore to create an environment in which
men are eager to make new jobs, to acquire new tools of production, to improve or scrap the old ones, design new products and develop new markets,
increase efficiency all around, and thus be able and willing to pay higher
wages and provide better working conditions. The Federal Government is
fostering and will continue to foster this kind of environment.
Our economy today is highly prosperous, and enjoys great basic strength,
as Part II of this Report has indicated. The minor readjustment under way
since mid-1953 is likely soon to come to a close, especially if the recommendations of the Administration are adopted. These recommendations, like the
analysis of the current situation on which they are based, envision a sustained improvement in American living standards and a broadly expanding
economy. There is every reason for confidence that our system of individual enterprise, which is one of the wonders of the world, will long
continue to be a producer of ever-increasing wealth and widely diffused
well-being.
Appendix A
REPORT TO THE PRESIDENT ON THE
ACTIVITIES OF THE COUNCIL
OF ECONOMIC ADVISERS
DURING 1953
Letter of Transmittal
DECEMBER 30, 1953.
The PRESIDENT.
SIR: The Council of Economic Advisers submits this Annual Report on
its activities during the calendar year 1953 in accordance with the requirements of Congress as set forth in section 4 (d) of the Employment Act of
1946.
Respectfully,
ARTHUR F. BURNS, Chairman.
NEIL H. JAGOBY.
WALTER W. STEWART.
117
Report to the President on the Activities
of the Council of Economic Advisers
During 1953
During the period from January through March 1953, the functions of
the Council of Economic Advisers were carried out by the Council that was
established in 1946 pursuant to the Employment Act of that year. In
April, the functions were transferred to the Economic Adviser to the President who, because of recent appointment, was also a member of the Council. The functions remained with the Economic Adviser until the end of
July, when they were restored to the Council which was reconstituted pursuant to the Reorganization Plan No. 9 of 1953.
ACTIVITIES OF COUNCIL: JANUARY-MARCH 1953
Funds provided for the Council of Economic Advisers in the Appropriation Act for the Fiscal Year 1953 were sufficient to continue the agency
only through March of that year. Consequently, on February 4, 1953, Mr.
Sherman Adams, The Assistant to the President, advised the Chairman of
the House Appropriations Committee that while the President had not yet
completed his plans for the Council of Economic Advisers, he believed it
highly important that the Council be continued. On behalf of the President, Mr. Adams requested that the Committee consider a supplemental
appropriation sufficient to continue the Council through the remainder of
the fiscal year.
The President followed this request with the nomination of Arthur F.
Burns, Professor of Economics, Columbia University, and Director of
Research, National Bureau of Economic Research, as a member of the
Council of Economic Advisers. At the hearing before the Senate Committee on Banking and Currency on March 11, 1953, the Committee approved
Mr. Burns' nomination, which was confirmed by the Senate, March 18,
1953.
Before the Appropriations Committee acted on the request of the President for a supplemental apropriation to continue the Council until the
end of the fiscal year, the Council had practically exhausted its funds and
was obliged to begin to wind up its affairs.
ECONOMIC ADVISER TO THE PRESIDENT: APRIL-JULY 1953
Instead of appropriating funds to continue the Council, Congress provided, in the Supplemental Appropriation Act approved March 28, 1953,
for the establishment of an Economic Adviser to the President and appro284874—54
9
HQ
priated $50,000 for such an Adviser and necessary staff for the remainder
of the fiscal year. Mr. Burns was appointed to the post by the President
and, with a small staff, continued to perform the functions previously performed by the Council.
Reorganization Plan No. 9 of 1953
The President's plans for the Council were set forth in Reorganization
Plan No. 9 of 1953 and in the President's Message transmitting that Plan
to the Congress on June 1, 1953.
On June 3, Congressman Hoffman introduced House Resolution 263
disapproving the Plan. Mr. Hoffman stated that the introduction of the
resolution did not indicate that he approved or disapproved the plan, but
that his purpose was to enable committee consideration and appropriate
action.
Hearings on the Plan were held July 14 by a Special Subcommittee on
Reorganization of the House Committee on Government Operations. The
subcommittee consisted of Marguerite Stitt Church, Chairman, Katharine
St. George, and John W. McCormack. Mr. Burns, accompanied by
William F. Finan, Assistant Director for Management and Organization,
Bureau of the Budget, appeared before the subcommittee in behalf of the
Plan. Mr. George D. Riley, Member, National Legislative Committee,
American Federation of Labor, also testified in favor of the Plan. In a
letter to the Committee, Senator Ralph E. Flanders supported the Plan,
and at a subsequent meeting of the subcommittee, July 17, Congressman
Jesse P. Wolcott, testified in favor of it.
The Special Subcommittee, by unanimous action, voted to recommend
to the full committee the disapproval of House Resolution 263. This action
was in effect a vote of approval of Reorganization Plan No. 9. The recommendation of the Subcommittee was accepted by the House and the Plan was
permitted to go into effect on August 1,1953.
RECONSTITUTED COUNCIL
Reorganization Plan No. 9 of 1953 provided for several significant changes
in the organization of the Council. To strengthen the internal administration of the Council, the responsibility for employing staff, specialists, and
consultants was transferred from the Council to the Chairman. To establish a clearer relationship with the President, the function of reporting to
the President on the Council's views and activities was likewise transferred
to the Chairman. The position of Vice Chairman of the Council was
abolished.
The aim of the Reorganization Plan was to remedy certain deficiencies in
the operation of the Council of Economic Advisers, which had consisted of
three members, each of whom, under the Employment Act of 1946, had coequal powers. (See General Management of the Executive Branch, U. S.
Commission on Organization of Executive Branch of the Government, February 1949.) At the same time, the Reorganization Plan fully preserved
120
the advantage of the balanced judgment that several individuals could
bring to bear on economic problems.
Staffing the Council
On July 29, 1953, just prior to the effective date of Reorganization Plan
No. 9 of 1953, Mr. Burns was renominated as a member of the Council.
He was confirmed again by the Senate July 31. On August 8, he was designated as Chairman by the President.
Neil H. Jacoby, Professor of Business Economics and Policy, and Dean
of the School of Business Administration, University of California, Los
Angeles, was appointed by the President as the second member of the
Council, August 24. Mr. Jacoby took office September 15, 1953. Professor Emeritus Walter W. Stewart, School of Economics and Politics,
Institute of Advanced Study, Princeton, New Jersey, was appointed by
the President as the third member of the Council, November 30. Mr.
Stewart took office December 2, 1953.
Immediately after Mr. Burns took office, six members of the staff of the
old Council of Economic Advisers, who had been assisting him as Economic
Adviser, were reappointed to the reconstituted Council, and the recruitment of additional staff got under way. At present, the Council has a
staff of 30 persons, including full-time, part-time, and detailed personnel,
and consultants who report at frequent intervals. Fourteen members of
the staff are expert economists of proven competence, recognized for their
ability to engage in objective economic analysis.
Advisory Board on Economic Growth and Stability
An important feature of the reconstituted Council was not specifically
spelled out in Reorganization Plan No. 9 of 1953, although it was announced
in the President's Transmittal Message in which the President stated:
In order to make the work of the Council of Economic Advisers more effective
at the top policy level of the executive branch, I am also asking the heads of
several departments and agencies, or the representatives they may designate, to
serve as an Advisory Board on Economic Growth and Stability, under the
chairmanship of the Chairman of the Council of Economic Advisers. At all
times, close liaison must be maintained by the Council with all departments and
agencies, and with interdepartmental committees, especially the National Advisory Council on International Monetary and Financial Problems.
It is contemplated that the Advisory Board on Economic Growth and Stability,
supported by the existing staffs of the various departments and agencies, will
meet frequently, and through its Chairman will keep me closely informed about
the state of the national economy and the various measures necessary to aid in
maintaining a stable prosperity.
The agencies designated, June 6, 1953, to be represented on the Board,
and the officials subsequently designated to serve on the Board, are as
follows:
Department of the Treasury—Marion B. Folsom, Under Secretary
Department of Agriculture—True D. Morse, Under Secretary
Department of Commerce—Walter Williams, Under Secretary
Department of Labor—Rocco Siciliano, Assistant Secretary
Bureau of the Budget—Paul L. Morrison, Assistant Director
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Board of Governors of the Federal Reserve System—Abbot L. Mills,
Member of Board
The White House Office—Gabriel Hauge, Administrative Assistant to
the President
Council of Economic Advisers—Arthur F. Burns, Chairman
Since its establishment, the Advisory Board on Economic Growth and
Stability has met regularly once a week, and at times more frequently.
Representatives of other interested departments and agencies have from
time to time joined in the deliberations of the Board. The Board has been
an effective body for reviewing and evaluating economic programs and
policies of the Federal Government, and for considering measures designed
to strengthen the economy. It has also proved effective in achieving a
mutual understanding necessary for coordinated action of the various
departments and agencies to accomplish the objectives of the Employment
Act of 1946.
The Board is essentially a committee advisory to the Council. It is
designed to meet a very concrete need in government, namely, to provide
a forum at which thinking on economic policy of the various departments
and agencies can be compared and coordinated. It expresses the principle
that there should be one place in government at which all questions concerning the maintenance of production, employment, and economic growth
shall be considered. Because of the Board, the Council is now in a better
position than formerly to review and evaluate the current economic situation
and to formulate plans to cope with various economic contingencies.
Auxiliary Staff Committee
As an adjunct to the Advisory Board, there has been established an
Auxiliary Staff Committee made up mainly of members of the senior staff
of the departments and agencies represented on the Advisory Board. The
members of this Auxiliary Staff Committee jointly review and analyze
proposals to be presented to the Advisory Board. Individually, they brief
Board members in advance on issues to be considered at Board meetings.
The Auxiliary Staff Committee also provides a channel for tapping the
resources of the collaborating departments and agencies represented on
the Advisory Board. The Committee meets frequently with the Council.
Members of the Committee and the agencies they represent are as
follows:
Ewan Clague, Commissioner, Bureau of Labor Statistics, Department
of Labor
Neal J. Hardy, Assistant Administrator, Division of Plans and Programs, Housing and Home Finance Agency
J. Weldon Jones, Economic Adviser, Bureau of the Budget
Don Paarlberg, Assistant to the Secretary of Agriculture
Louis Paradiso, Chief Statistician, Office of Business Economics, Department of Commerce
122
Winfield W. Riefler, Assistant to the Chairman, Board of Governors
of the Federal Reserve System
Dan T. Smith, Assistant to the Secretary of the Treasury
Ralph A. Young, Director, Division of Research and Statistics, Board
of Governors of the Federal Reserve System
Task Forces
In addition to the Auxiliary Staff Committee, Interagency Task Forces
were established during September 1953 for an intensive study of measures
to promote the stability and growth of our economy and specific economic
programs and policies to be pursued in the event of a general slowing down
of economic activity. The chairman of each task force is a senior member
of the Council staff, and the task force consists of experts of the various
Government agencies which have interest and competence in the specific
programs and policies being examined.
Thus far, task forces have examined the economic potentials of programs
for home modernization and repair; Federal credit aids to construction;
public works programs; unemployment compensation; tax revisions; community and business programs to expand employment; and programs to
strengthen our financial system. Task forces will be organized to explore
other areas of economic policy, as needed.
The reports of the task forces include specific recommendations of actions
to be taken to promote the growth and stability of our economy, and to
avert developments detrimental to our economic and social welfare. The
reports are then reviewed and evaluated by the Auxiliary Staff Committee.
The recommendations of this Committee are taken into account in redrafting the reports for submission to the Advisory Board.
All major fields of economics under continuous review
Staff assignments are made by the Council so that developments in every
major field of economics embraced by the Council's responsibilities—
national income, public finance, money and banking, business organization,
construction and public works, manpower, agriculture, international trade
and finance, technology, social security, prices, productivity, etc.—are under
the watchful eye of an expert. Staff members, some of whom cover more
than one field, are responsible in their respective fields for eliciting the
cooperation of government and non-government experts and specialists in
analyzing and evaluating the significance of current developments.
Senior members of the staff, including those on loan as well as consultants,
are as follows: Asher Achinstein, Melvin G. de Chazeau, Frances M.
James, Albert R. Koch, Clarence D. Long, David W. Lusher, Robinson
Newcomb, William H. Nicholls, Alfred Reifman, Raymond J. Saulnier,
Louis Shere, Irving H. Siegel, Collis Stocking, and Robert Triffin.
Consultants
Through the use of consultants, the Council is able to secure the advice
and assistance of outstanding experts who, because of other obligations,
123
are unable to serve the Council on a full-time basis. These experts contribute greatly to the work of the Council. The Council benefits from their
experience and research studies, many of which they have made prior to
becoming consultants. The results of these studies are made available to the
Council in conferences, memoranda, and reports.
Cooperation
The Council has enjoyed full cooperation from other Government
agencies. Participation on the task forces has not been limited to the
agencies represented on the Advisory Board. Other agencies have made
members of their staffs available to work on special problems at the request of
the Council. In addition, all agencies have shown a gratifying willingness
to obtain, assemble, and speed up the preparation of data needed by the
Council. Special recognition is due the technical staff of the Departments
of Agriculture, Commerce, Labor, State, and Treasury, the Bureau of the
Budget, the Board of Governors of the Federal Reserve System, and the
Department of Health, Education and Welfare.
The Council has also received willing cooperation from educational institutions, business and professional groups, and labor and management organizations. Officials of the American Farm Bureau Federation, American
Federation of Labor, the Congress of Industrial Organizations, the United
States Chamber of Commerce, the Committee on Economic Development,
and a number of trade associations have given generously of their time in
considering subjects with which the Council has been concerned. Plans
are being made to extend and to formalize future working relationships
with such groups. The Council intends in this way to obtain a balanced
cross-section of opinion on economic developments and on recommendations of measures to promote the health of our economy.
The National Bureau of Economic Research has undertaken at its own
expense, at the request of the Council, a basic study of economic forecasting techniques. Both the National Bureau and the Brookings Institution have made conference facilities available to the Council so that the
best thinking in the country may be brought to bear on the problems considered by the Council.
The Council has received assistance from the Joint Committee on the
Economic Report and its staff and, in turn, has continued to prepare Economic Indicators which is published monthly by the Committee. The continuous informal interchange of points of view on economic developments
between the Council and the Joint Committee and its staff adds to the
effectiveness of the Council.
Without this extensive cooperation and assistance, it would be impossible
for the Council to carry out its responsibilities effectively with its small staff.
Council budget for fiscal year 1954
The Council requested a budget of $300,000 for the fiscal year 1954.
The House of Representatives provided for an appropriation of $200,000,
124
plus the unobligated balance of funds, amounting to approximately $25,000,
appropriated for salaries and expenses of an Economic Adviser to the President in the Second Supplemental Appropriation Act, 1953. The Senate increased the amount to $275,000, plus the unobligated balance. This amount
was agreed to in conference.
The Director of the Budget Bureau has deducted $20,000 from the total
and set it aside in a reserve. Since receiving the appropriation, the Council
has moved cautiously in selecting its staff, and has carried forward its work,
in accordance with Reorganization Plan No. 9, with a determination to keep
all expenditures down to a minimum to avoid requesting the release of any
of the Budget Bureau reserve.
Council budget for fiscal year 1955
The Council has requested a $25,000 increase in its budget for the fiscal
year 1955. This increase will permit a balancing and strengthening of the
staff which has been determined to be necessary on the basis of experience
gained since the Council was reconstituted under Reorganization Plan No. 9
of 1953.
125
Appendix B
EMPLOYMENT ACT OF 1946, AS AMENDED,
AND RELATED LAWS
Employment Act of 1946, as Amended,
and Related Laws
[The Employment Act of 1946 was approved February 20, 1946, 60 Stat.
23. The following shows the Act as originally enacted, with amendments
and additions through the first session of the Eighty-third Congress. The
related joint resolution of June 23, 1949, 63 Stat. 264, which is also shown
below, is not a part of the Act. Parenthetical references at the end of each
section indicate where the section is carried in the United States Code.]
EMPLOYMENT ACT OF 1946
SHORT TITLE
SECTION 1. This Act may be cited as the "Employment Act of 1946."
DECLARATION OF POLICY
/
SEC. 2. The Congress declares that it is the continuing policy and responsibility of the Federal Government to use all practicable means consistent
with its needs and obligations'and other essential considerations of national
policy, with the assistance and cooperation of industry, agriculture, labor,
and State and local governments, to coordinate and utilize all its plans,
functions, and resources for the purpose of creating and maintaining, in a
manner calculated to foster and promote free competitive enterprise and
the general welfare, conditions under which there will be afforded useful
employment opportunities, including self-employment, for those able, willing, and seeking to work/and to promote maximum employment, production, and purchasing power/ (15 U. S. C. 1021)
ECONOMIC REPORT OF THE PRESIDENT
SEC. 3. (a) The President shall transmit to the Congress at the beginning of each regular session (commencing with the year 1947) an economic
report (hereinafter called the "Economic Report") setting forth (1) the
levels of employment, production, and purchasing power obtaining in the
United States and such levels needed to carry out the policy declared in section 2; (2) current and foreseeable trends in the levels of employment,
production, and purchasing power; (3) a review of the economic program
of the Federal Government and a review of economic conditions affecting
employment in the United States or any considerable portion thereof during
the preceding year and of their effect upon employment, production, and
purchasing power; and (4) a program for carrying out the policy declared
in section 2, together with such recommendations for legislation as he may
deem necessary or desirable.
129
(b) The President may transmit from time to time to the Congress reports supplementary to the Economic Report, each of which shall include
such supplementary or revised recommendations as he may deem necessary
or desirable to achieve the policy declared in section 2.
(c) The Economic Report, and all supplementary reports transmitted
under subsection (b) of this section, shall, when transmitted to Congress be
referred to the joint committee created by section 5. (15 U. S. C. 1022)
COUNCIL OF ECONOMIC ADVISERS TO THE PRESIDENT
SEC. 4. (a) There is created in the Executive Office of the President a
Council of Economic Advisers (hereinafter called the "Council"). The
Council shall be composed of three members who shall be appointed by
the President, by and with the advice and consent of the Senate, and each
of whom shall be a person who, as a result of his training, experience, and
attainments, is exceptionally qualified to analyze and interpret economic
developments, to appraise programs and activities of the Government in
the light of the policy declared in section 2, and to formulate and recommend national economic policy to promote employment, production, and
purchasing power under free competitive enterprise. Each member of the
Council shall receive basic compensation at the rate of $16,000 per annum.
The President shall designate one of the members of the Council as chairman.
(b) The Council is authorized to employ, and fix the compensation of,
such specialists and other experts as may be necessary for the carrying out
of its functions under this Act, without regard to the civil-service laws and
the Classification Act of 1949, as amended, and is authorized, subject to
the civil-service laws, to employ such other officers and employees as may
be necessary for carrying out its functions under this Act, and fix their compensation in accordance with the Classification Act of 1949, as amended.
(c) It shall be the duty and function of the Council—
(1) to assist and advise the President in the preparation of the
Economic Report;
(2) to gather timely and authoritative information concerning
economic developments and economic trends, both current and prospective, to analyze and interpret such information in the light of the
policy declared in section 2 for the purpose of determining whether
such developments and trends are interfering, or are likely to interfere, with the achievement of such policy, and to compile and submit
to the President studies relating to such developments and trends;
(3) to appraise the various programs and activities of the Federal
Government in the light of the policy declared in section 2 of this title
for the purpose of determining the extent to which such programs and
activities are contributing, and the extent to which they are not contributing, to the achievement of such policy, and to make recommendations to the President with respect thereto;
130
(4) to develop and recommend to the President national economic
policies to foster and promote free competitive enterprise, to avoid
economic fluctuations or to diminish the effects thereof, and to maintain employment, production, and purchasing power;
(5) to make and furnish such studies, reports thereon, and recommendations with respect to matters of Federal economic policy and
legislation as the President may request.
(d) The Council shall make an annual report to the President in December of each year.
(e) In exercising its powers, functions, and duties under this Act—
(1) the Council may constitute such advisory committees and may
consult with such representatives of industry, agriculture, labor, consumers, State and local governments, and other groups, as it deems
advisable;
(2) the Council shall, to the fullest extent possible, utilize the services, facilities, and information (including statistical information) of
other Government agencies as well as of private research agencies, in
order that duplication of effort and expense may be avoided.
(f) To enable the Council to exercise its powers, functions, and duties
under this Act, there are authorized to be appropriated (except for the
salaries of the members and the salaries of officers and employees of the
Council) such sums as may be necessary. For the salaries of the members and the salaries of officers and employees of the Council, there is authorized to be appropriated not exceeding $345,000 in the aggregate for
each fiscal year.
JOINT COMMITTEE ON THE ECONOMIC REPORT
SEC. 5. (a) There is established a Joint Committee on the Economic Report, to be composed of seven Members of the Senate, to be appointed by
the President of the Senate, and seven Members of the House of Representatives, to be appointed by the Speaker of the House of Representatives.
The party representation on the joint committee shall as nearly as may be
feasible reflect the relative membership of the majority and minority parties in the Senate and House of Representatives.
(b) It shall be the function of the joint committee—
(1) to make a continuing study of matters relating to the Economic
Report;
(2) to study means of coordinating programs in order to further
the policy of this Act; and
(3) as a guide to the several committees of the Congress dealing
with legislation relating to the Economic Report, not later than March 1
of each year (beginning with the year 1947) to file a report with the
Senate and the House of Representatives containing its findings and
recommendations with respect to each of the main recommendations
made by the President in the Economic Report, and from time to time
'31
to make other reports and recommendations to the Senate and House
of Representatives as it deems advisable.
(c) Vacancies in the membership of the joint committee shall not affect
the power of the remaining members to execute the functions of the joint
committee, and shall be filled in the same manner as in the case of the
original selection. The joint committee shall select a chairman and a vice
chairman from among its members.
(d) The joint committee, or any duly authorized subcommittee thereof,
is authorized to hold such hearings as it deems advisable, and, within the
limitations of its appropriations, the joint committee is empowered to appoint and fix the compensation of such experts, consultants, technicians,
and clerical and stenographic assistants, to procure such printing and binding, and to make such expenditures, as it deems necessary and advisable.
The cost of stenographic services to report hearings of the joint committee,
or any subcommittee thereof, shall not exceed 25 cents per hundred words.
The joint committee is authorized to utilize the services, information, and
facilities of the departments and establishments of the Government, and
also of private research agencies.
(e) There is authorized to be appropriated for each fiscal year, the sum
of $125,000, or so much thereof as may be necessary, to carry out the provisions of this section, to be disbursed by the Secretary of the Senate on
vouchers signed by the chairman or vice chairman.
(f) Service of one individual, until the completion of the investigation
authorized by Senate Concurrent Resolution 26, Eighty-first Congress, as
an attorney or expert for the joint committee, in any business or professional
field, on a part-time basis, with or without compensation, shall not be considered as service or employment bringing such individual within the provisions of sections 281, 283, or 284 of title 18, of the United States Code, or
of any other Federal law imposing restrictions, requirements, or penalties
in relation to the employment of persons, the performance of services, or
the payment or receipt of compensation in connection with any claim, proceeding, or matter involving the United States. (15 U. S. C. 1024)
JOINT RESOLUTION OF JUNE 23, 1949
The Joint Committee on the Economic Report is authorized to issue a
monthly publication entitled Economic Indicators, and a sufficient quantity shall be printed to furnish one copy to each Member of Congress; the
Secretary and the Sergeant at Arms of the Senate; the Clerk, Sergeant at
Arms, and Doorkeeper of the House of Representatives; two copies to the
libraries of the Senate and House, and the Congressional Library; seven
hundred copies to the Joint Committee on the Economic Report; and the
required number of copies to the Superintendent of Documents for distribution to depository libraries; and the Superintendent of Documents is
authorized to have copies printed for sale to the public. (15 U. S. C. 1025)
132
Appendix C
REORGANIZATION PLAN NO. 9 OF 1953
Reorganization Plan No. 9 of 1953
MESSAGE FROM THE PRESIDENT OF THE UNITED STATES TRANSMITTING
REORGANIZATION PLAN No. 9 OF 1953
JUNE 1, 1953.—Referred to the Committee on Government Operations and ordered
to be printed
To the Congress of the United States:
I transmit herewith Reorganization Plan No. 9 of 1953, prepared in
accordance with the Reorganization Act of 1949, as amended, and providing
reorganizations in the Council of Economic Advisers in the Executive Office
of the President.
The legislative history of the Employment Act of 1946 makes it clear
that it is the determination of the Congress to help develop a strong economy
in the United States. A strong economy is necessary to preserve the peace,
to build our defenses and those of the free world, to raise the living standards
of our people, and to stimulate trade and industry in friendly countries
throughout the world.
A strong economy means a free economy—with full opportunities for
the exercise of initiative and enterprise on the part of all individuals.
It means a stable economy—so that satisfying jobs are as numerous as
the men and women seeking work, and the production of goods is abundant
to meet our needs.
It means an expanding economy—in which workers, managers, and
farmers, using more and better tools, constantly increase the output of useful
products and services and receive steadily rising incomes in a dollar of
stable value.
It means a humane economy—to the end that the aged, infirm, and
those suffering hardships receive every needed help.
The achievement and preservation of a strong economy—an economy
that is progressive as well as competitive, an economy that remains free
from the distortions of inflation and the ravages of depression, an economy
that forms the solid foundation for the flourishing of our democratic, social,
and political institutions—is everybody's job. Workers, businessmen,
bankers, farmers, housewives—all have an important role to play. The
Federal Government, too, shares in this vital task. For example, the duties
of the President require that he be fully informed of major economic trends
and activities in order to recommend proper measures for the consideration
284874—54——10
135
of the Congress, and to take into account economic realities in seeing that
the laws be faithfully executed.
It is well that the Congress has declared in the Employment Act of 1946
the continuing policy and responsibility of the Federal Government to coordinate and utilize all its plans, functions, and resources for the purpose
of creating and maintaining, consistently with free competitive enterprise
and the general welfare, employment opportunities for all. That act dedicates the Federal Government to the promotion of maximum employment,
production, and purchasing power.
To assist in carrying out those purposes, the Congress provided for the
establishment of the Council of Economic Advisers in the Executive Office
of the President to make appropriate recommendations to the President
and to assist in the preparation of his annual Economic Report to the
Congress.
I believe in the basic principles of the Employment Act, and it is my
purpose to take the appropriate actions to reinvigorate and make more
effective the operations of the Council of Economic Advisers. Our needs
for proper advice on economic matters are equaled only by our needs to
have the very best advice and planning on matters of national security.
In taking these actions, I have the benefit of the study and work of the
Economic Adviser to the President recently provided by the Congress.
The Economic Adviser has reviewed the past operations of the Council of
Economic Advisers and has recommended to me a series of actions aimed
at making it more fully effective in performing its statutory duties.
Accordingly, I intend to appoint a full membership of three members
to the Council of Economic Advisers and to recommend to the Congress
that adequate funds be appropriated to operate the Council as a fully going
unit capable of providing the kind of economic staff work required.
The accompanying reorganization plan provides changes which strengthen
the internal administration of the Council and clarify its relationships with
the President.
To achieve the first objective—strengthened internal administration—
the reorganization plan will make the Chairman of the Council, rather than
the whole Council, responsible for certain administrative functions of the
Council. Because the Council is essentially an advisory body, these administrative functions relate principally to managing the staff employed to
assist the Council. Placing the Chairman in a position to perform these
functions will obtain the benefits of single management of the staff. To
make possible such an arrangement, the accompanying reorganization plan
transfers to the Chairman the functions vested in the Council of Economic
Advisers by section 4 (b) of the Employment Act, which relate to employing the staff and other necessary specialists and consultants to work for the
Council.
To further the other objective—a clearer relationship with the President—the reorganization plan transfers to the Chairman the function of
136
reporting to the President on the activities of the Council. This change
will improve and simplify the relationship of the Council to the President
and enable the President to deal with the Council more directly through
the Chairman.
The increased responsibilities placed upon the Chairman by this plan
would, in my judgment, make it appropriate for the Congress to take
action to increase the compensation of the Chairman.
The reorganization plan provides for the elimination of the Vice Chairman of the Council of Economic Advisers, whose designation is provided
for in the last sentence of section 4 (a) of the Employment Act of 1946.
The objective of this step is to place the members of the Council, other
than the Chairman, in an equal status. I shall make provision for one of
the members of the Council, other than the Chairman, to act as Chairman
of the Council on such occasions as necessity may arise therefor.
In order to make the work of the Council of Economic Advisers more
effective at the top policy level of the executive branch, I am also asking
the heads of several departments and agencies, or the representatives they
may designate, to serve as an Advisory Board on Economic Growth and
Stability, under the chairmanship of the Chairman of the Council of Economic Advisers. At all times, close liaison must be maintained by the
Council with all departments and agencies, and with interdepartmental
committees, especially the National Advisory Council on International
Monetary and Financial Problems.
It is contemplated that the Advisory Board on Economic Growth and
Stability, supported by the existing staffs of the various departments and
agencies, will meet frequently, and through its Chairman will keep me closely
informed about the state of the national economy and the various measures
necessary to aid in maintaining a stable prosperity.
Because of the complexity of our economy and the variety of views regarding its problems, I shall expect the new Council of Economic Advisers
to seek advice energetically not only from the departments and agencies
of the Federal Government but also from representatives of industry, agriculture, labor, consumers, and other groups concerned with economic matters, from representatives of State and local governments, and from universities. I want the best economic thinking in the country to be canvassed
by the Council. Through advisory groups, through the employment of
expert consultants, and through informal relationships with informed citizens the Council will make use of economic talent wherever it may be.
I deem it especially significant that the Congress has provided in the
Employment Act for the Joint Committee on the Economic Report, composed of Members of both Houses of the Congress, to study matters relating to the economic report and to make recommendations to the two Houses
for legislation. I expect to impress upon the Council of Economic Advisers
the importance which I attach to the fullest cooperation of the Council
137
with the Joint Committee to assist the Joint Committee in its important
tasks.
After investigation I have found and hereby declare that each reorganization included in the accompanying reorganization plan is necessary to
accomplish one or more of the purposes set forth in section 2 (a) of the
Reorganization Act of 1949, as amended.
The taking effect of the reorganizations included in the accompanying
reorganization plan is expected to result in a more effective performance
of the statutory functions of the Council of Economic Advisers and to provide the President with better advice upon economic matters. It is impracticable to specify or itemize at this time any reduction of expenditures
which it is probable will be brought about by the taking effect of this
reorganization plan.
The reorganization plan will make the Federal Government better able
to carry out its responsibilities to the American people to foster a strong,
free, and prosperous economy so that we may all enjoy an ever-rising
standard of living. I urge the Congress to permit the reorganization plan
to become effective.
DWIGHT D. EISENHOWER.
THE WHITE HOUSE, June 1,1953.
REORGANIZATION PLAN NO. 9 OF 1953
(Prepared by the President and transmitted to the Senate and the House of Representatives in Congress assembled, June 1, 1953, pursuant to the provisions of the
Reorganization Act of 1949, approved June 20, 1949, as amended)
COUNCIL OF ECONOMIC ADVISERS
The functions vested in the Council of Economic Advisers by section
4 (b) of the Employment Act of 1946 (60 Stat. 24), and so much of the
functions vested in the Council by section 4 (c) of that Act as consists of
reporting to the President with respect to any function of the Council
under the said section 4 (c), are hereby transferred to the Chairman of the
Council of Economic Advisers. The position of Vice Chairman of the
Council of Economic Advisers, provided for in the last sentence of section
4 (a) of the said Act, is hereby abolished.
Appendix D
GOVERNMENT FINANCES, 1950-55
Government Finances, 1950—55
On a consolidated cash basis, the fiscal operations of the Federal Government are estimated to result in a deficit of 234 million dollars for the fiscal
year 1954, and in a surplus of 115 million dollars for fiscal 1955, compared
with a deficit of 5.3 billion dollars for the fiscal year 1953.
The conventional budget, which excludes the trust accounts that are
included in the consolidated cash budget, and reflects certain intra-governmental transactions excluded from the consolidated cash budget, is estimated to result in a budget deficit of 3.3 billion dollars for the fiscal year
1954 and of 2.9 billion dollars for fiscal 1955, compared with a deficit of
9.4 billion dollars for the fiscal year 1953. (See Table D-l.)
The State and local governments have been running small deficits for
several years, but for the fiscal year 1953 their consolidated cash statement shows a small surplus.
The consolidated cash budgets for the Federal Government, for the State
and local governments, and for all governments combined, for the fiscal years
1950-53 are shown in Table D-2.
Federal, State and local government expenditures for goods and services
and the receipts on income and product accounts, for the calendar years
1950-53, are given in Table D-3. An explanation of the difference between receipts and expenditures on the basis of (1) national income and
product accounts, (2) the conventional administrative budget, and (3)
the consolidated cash statement is given for the Federal Government in
Survey of Current Business, March 1952, page 14. The differences among
the three bases are similar for State and local governments.
On the basis of government income and product accounts, the Federal
Government had a deficit of 2,200 million dollars in calendar year 1953, compared with a deficit of 2,360 million in the preceding year. The State and
local governments shifted from a deficit of 65 million dollars in 1952 to a
surplus of 200 million in 1953. For all governments combined, the deficit
was reduced from 2,425 million dollars in 1952 to 2,000 million in 1953.
State and local government purchases of goods and services have increased
by an annual average of over 2 billion dollars since World War II, and
by the end of 1953 they were running at an annual rate exceeding 26 billion
dollars. (See Tables D-4 and G-l.) This rapid upswing reflects in part the
rise in prices, and in part an increase of three-fifths in the physical volume
of purchases. These expenditures are still low relative to their importance
in the economy of the thirties.
During the war years 1942-45, State and local governments realized
budget surpluses totaling almost 10 billion dollars. In the first two post-
141
war years there were also surpluses. During the succeeding years deficits
occurred, but a surplus was again achieved in 1953.
State and local governments now hold 12.5 billion dollars of Federal
securities, compared with 5.3 billion at mid-1945. During this period,
their aggregate bank deposits increased from 5.4 billion dollars to 11.2
billion dollars. A large portion of the increased liquid assets is attributable
to deferred expenditures, and is reserved to finance capital improvements.
The currently favorable fiscal situation of State and local governments
is reflected in the improvement in their debt position. During the war
years, State and local debt actually decreased by more than 3 billion dollars.
Since then, it has risen from 16 billion dollars to about 33 billion (see Table
D-5); but after allowance for price inflation and the growth in income and
population, the debt burden has actually fallen below its prewar level.
Moreover, the cost of carrying the debt has not changed appreciably, relative
to State and local expenditures.
The major factors in the increase in State and local purchases since 1946
have been the deferral of construction during the war years, the increasing
demands generated by a growing and shifting population, the rising levels
of personal income, and the favorable financial position of State and local
governments. Wartime materials and manpower shortages curbed State
and local outlays for new construction to a point where the average annual
volume fell to one-third of the volume of construction for the years 1935^0.
By the end of the war, an immense volume of construction was needed
to bring facilities in line with requirements. Outlays on construction
rose sharply after the end of the war to an all-time peak in 1953.
(See Table D-6.)
TABLE D—1.—Federal receipts and expenditures: conventional budget and consolidated cash
statement, 1950-55
[Fiscal years; millions of dollars]
Actual
Estimate
Accounting basis
Conventional budget:
Receipts
Expenditures
Surplus or deficit ( — )
Consolidated cash statement:
Receipts
Expenditures
Cash surplus or deficit ( — )
1950
1951
1952
1953
1954
36, 495
39, 606
44,058
47, 568
61,393
65,410
64,593
67. 629
73, 982
70,902
65, 570
-3,111
3,510
-4,017
-9, 389
-3, 273
-2,928
62,642
43,160
45,807
53, 400
68,022
67,968
71,283
76,554
74. 932
75,166
70, 842
70, 727
-2, 213
7,593
54
-5, 272
-234
llfi
40, 946
NOTE.—Detail will not necessarily add to totals because of rounding.
Source: Bureau of the Budget and Treasury Department.
1955
142
TABLE D-2.—Government cash receipts from and payments to the public, 7950-55
[Fiscal years; millions of dollars]
Actual
Receipts or payments
Total government:
Cash receipts
Cash payments
- -
Total cash surplus or deficit (—)
Federal Government:
Cash receipts *
Cash payments '
_ _ _
_
___
Federal cash surplus or deficit (— )
State and local governments:
Cash receipts
Cash payments
. _ _ _ _ -
._
. _ . _
State and local cash surplus or deficit (— )
1950
1951
1952
58,185
61, 888
72, 770
65, 643
89,035
89, 369
94, 218
99, 116
-3, 703
7,127
-334
-4,898
40,946
43, 160
53,400
45,807
68, 022
67,968
71,283
76, 554
-2, 213
7,593
54
-5, 272
17, 239
18,728
19, 370
19, 836
21,013
21, 401
22,936
22,562
-1,489
-466
-388
f374
1953
i Federal grants-in-aid have been deducted from State and local government receipts and payments
since they are included in Federal payments.
NOTE.—Detail will not necessarily add to totals because of rounding.
Sources: Treasury Department, Bureau of the Budget, Department of Commerce, and Council of
Economic Advisers.
143
TABLE D—3.—Government income and product accounts, 1950-53
[Calendar years; millions of dollars]
Eeceipt or expenditure
Total Government:
Receipts _.
_. .
E xpenditures
Surplus or deficit ( — )
Federal Government:
Receipts:
8
Personal tax and nontax receipts
Corporate profits tax accounts 2
Indirect business tax and nontax accruals
C ontributions for social insurance
_.
Total receipts
Expenditures:
Purchases of goods and services
Transfer payments
__
Grants-in-aid to State and local governments
Net interest paid... __ _ _
Subsidies less current surplus of Government enterprise .
Total expenditures
Surplus or deficit (— )
State and local governments:
Receipts:
8
Personal tax and nontax receipts
Corporate profits tax accounts 2
Indirect business tax and nontax accruals
Contributions for social insurance
Federal grants-in-aid
..
Total receipts
Expenditures:
Purchases of goods and services
_
Transfer payments
.
Net interest paid
Less: Current surplus of Government enterprises
Total expenditures ._ _ . _
Surplus or deficit ( — )
. _.
1950
1951
1952
69, 719
61,445
86,778
79,711
91,976
94,401
99,200
101, 200
8,274
7,067
-2,425
-2,000
18,120
17, 475
9,032
5,907
26, 179
22, 713
9,530
7,086
31, 089
19, 815
10, 466
7,459
32, 700
22,900
10,900
7,600
50,534
65, 508
68.829
74,100
22, 139
10, 885
2,339
4,431
1,156
41, 113
8,674
2,430
4,558
1,280
54, 162
8,886
2,583
4, 589
969
58,100
9,700
2,800
4,800
900
40,950
58,055
71, 189
76,300
9,584
7,453
-2,360
-2,200
2,753
772
14,697
963
2,339
3,153
882
16,148
1,087
2,430
3,556
820
17, 587
1,184
2,583
3,900
900
19,000
1,300
2,800
21, 524
23,700
25, 730
27,900
19, 899
3,420
293
778
21,770
2,905
283
872
23,355
3,074
272
906
25,200
3,100
300
900
22,834
24,086
25,795
27,700
-1,310
-386
-65
+200
19531
12 Preliminary estimate by Council of Economic Advisers.
Net of tax refunds.
NOTE.—Federal grants-in-aid to State a^d local governments are reflected in Federal expenditures and
State and local receipts and expenditures. Total Government receipts have been adjusted to eliminate this
duplication.
Source: Department of Commerce (except as noted).
144
TABLE D-4.—Gross national product: Total and Government purchases of goods and services
Government purchases of
goods and services
Gross
national
product
Year
State and
local
Federal
State and local purchases
as percent of—
Gross
national
product
Billions of dollars
Federal
purchases
Percent
1929
103.8
1.3
7.2
6.9
553.8
1939
91.3
5.2
7.9
8.7
151.9
258.2
286.8
329.8
348.0
367.0
25.4
22.1
41.1
54.2
58.1
18.2
19.9
21.8
23.4
25.2
7.0
6.9
6.6
6.7
6.9
71.7
90.0
53.0
43.2
43.4
1949
1950
1951
1952
1953 1 .
_. ..
i Preliminary estimates based on incomplete data.
Source: Department of Commerce (except as noted).
TABLE D—5.—Gross State and local government debt: Total, per capitay and as percent of
national income
Gross debt *
Year
Total (bilPer capita
lions of dol1953
lars, current (dollars,
prices)
prices)
Gross debt
as percent
of gross
national
product
1929
17.2
304
16.6
1939
20.0
357
21.9
1949
1950
1951
1952
1953 2
20.9
24.2
27.0
29.6
33.0
167
184
187
194
207
8.1
8.4
8.2
8.5
9.0
--.
1
2
As of June 30.
Preliminary.
Source: Department of Commerce.
TABLE D—6.—Construction by State and local governments
State and local public construction
Period
Total
(current
prices)
Total
(1953 prices)
Per capita
(1953 prices)
Billions of dollars
1929
2.2
5.2
$42
1939 .
1.8
4.9
38
1935-40 annual avfiraga
1.5
4.0
31
1042-45 annual avp.ragft
.7
1.4
10
4.9
5.4
6.4
6.7
7.1
5.9
6.3
6.8
6.8
7.1
40
42
44
43
45
1949 .
1950— .
1951
1952
19531
_
.
* Preliminary estimate.
Source: Department of Commerce.
.
Appendix E
STATISTICS OF UNEMPLOYMENT
Statistics of Unemployment
The importance attached to figures on unemployment as a guide to
economic policies makes it highly desirable that the methods by which
these estimates are derived be thoroughly understood.
STATISTICS FOR 1953
Unemployment for mid-December 1953, as reported by the United States
Census, was just under 1.9 million, or 3 percent of the civilian labor force.
It was at this level in January 1953, declined steadily to 1.3 million in midspring, went up no more than seasonally in mid-summer, as youths out of
school entered the labor force in search of jobs, and was generally downward
during late summer and early fall. In October it reached a figure that was
below any recorded for the entire period since World War II: 1.2 million, or
less than 2 percent of the civilian labor force. It then rose significantly and
in excess of the usual seasonal movement in November, and again in December. In the latter month it was above the level of December 1952 by about
400,000.
These increases in unemployment were on the whole moderate, and the
year-end level was still below what many would regard as normal in a time
of peace. Nevertheless, the 1953 behavior was unusual in this respect:
The increase in unemployment was less than the decline in employment.
In other words, the labor force declined.
This decline in the labor force requires explanation, since a rise of about
500,000 might have been expected on account of population increase. Why
did some persons leave, and others fail to enter, the labor force? Were they
squeezed out by difficulties of getting jobs? Or, was the unemployment at
the year's end much greater than the figures indicate?
The following considerations provide grounds for believing (1) that
the unemployment figures of the Census reflect with reasonable accuracy
the number of workers without jobs and seeking work; (2) that the withdrawals from, or decisions not to enter, the labor force in 1953 were
voluntary.
GROUPS LEAVING OR NOT ENTERING THE LABOR FORCE
The "departing" workers were mainly persons who do not ordinarily
have primary responsibility for the support of families, but who came into
the labor force during wartime military and economic mobilization. As
the armed forces expanded rapidly after the third quarter of 1950, following the Korean outbreak, the civilian labor force was replenished by young
149
people and women. Many more females entered by the end of 1951 than
could be attributed either to population growth or to the long-run tendency
for more women to take up gainful work. Neither the armed forces nor
the labor force manifested much net change in relation to population between the last quarter of 1951 and the first quarter of 1953. Nevertheless,
in the first quarter of 1953 both the labor force and employment were not
only the highest they had been during any of the winter months since World
War II, but, with allowance for seasonal variation, they were also the
highest they were to be during 1953.
In the month of April 1953, following the sudden and well-publicized
yielding of China on the prisoner-repatriation issue on March 28, the civilian
labor force, instead of rising as usual by 500,000 in that spring month,
fell by 300,000—a net decline in the seasonally-adjusted labor force of
SOOjOOO.1 Additional decreases occurred in May. An earlier instance
under somewhat analogous circumstances occurred in early 1945, at about
the time the German armies were breaking up. Both events took place
well in advance of the disbanding of our armed forces. Some of the withdrawals and the failures to enter seasonally were by persons expecting an
early return of husbands, brothers, sons, or fiances. Wives with husbands
absent and in the armed forces reduced their participation in the labor
force sharply, from 47.3 percent to 39.9 percent between April 1952 and
April 1953, whereas wives with husbands present increased theirs somewhat.2
In fact, of all the females—single, married, widowed, or divorced—the
wives with husbands absent in the armed forces curtailed their labor force
participation the most.
Very little net change in the labor force beyond normal seasonal movement occurred between May and December 1953; but the fact that the
usual inflow of 300,000 workers from increase in working-age population
was not realized during these seven months reflected a gradual dwindling
in the rate of labor force participation.
Paradoxically, in the months when the employment of females declined
the most, their unemployment also fell, indicating that they were dropping
out of the labor force faster than out of employment. This strongly suggests that many deliberately gave up their jobs or failed to seek new jobs
after being laid off. For four months after the labor force exodus in April,
seasonally-adjusted unemployment was generally downward. There is
always the possibility that individual workers, or workers in some one1
The Census survey week in April immediately followed Easter, and it is conceivable that a post-Easter contraction of retail trade may have modified the usual
seasonal movement. However, the Department of Labor employment data do not
reveal a contraction in trade for April. In any case, the effect of Easter should have
disappeared by May, but the labor force continued to rise less than seasonally.
2
The Census provides labor force information by marital status only for April of
each year.
150
industry localities, left the labor force because of the difficulty of getting
jobs. But this can scarcely be regarded as a significant reason, in view of
the fact that most of the shrinkage in the labor force was concentrated in
April and May when (1) quits in manufacturing industries were well above
and layoffs well below their levels of the corresponding months of the year
before; (2) job openings reported by employers to local employment offices
(at the end of each month) kept rising and were in excess of their 1952
levels; (3) labor demand, as reflected by classifications of labor-shortage
or balanced-labor-supply areas, was as tight as in late 1952 and much
lighter than in early 1952;3 and (4) unemployment was settling to its
lowest levels since World War II—not only for the groups that were
abandoning the labor force, but also for the men 20-64, who were staying
in. The probability that it was not a decline in the demand for labor, but
rather the approaching end of the war, which led persons to leave, or to
stay out of, gainful work is further strengthened by the fact that the
percentage of population in the labor force did not decline during the
economic recession of 1949 (for the labor force as a whole, for males or
females 25-64, for youths 14-24, or for men and women 65 and older).
Of those not in the labor force, 350,000 more youths were attending
school4 and 800,000 more females were keeping house in December 1953
than would have been expected from population growth since December
1952. The rise in the number retired, or otherwise not active, was small.
The increase of persons in school and housekeeping at the expense of gainful employment was perhaps overdue, in view of the upward movement
since World War II in the birth rate, and the leveling off since 1950 in the
proportion of youths attending high school and college. While the expansion in the labor force during the Korean action was helpful in meeting
the military and production demands for war without curtailment in civilian living standards, with the prospect of an end to the action many persons
understandably chose to resume school attendance or to give more care
to their children, even if that meant less employment and family income.
8
The areas were classified by surveys conducted in January, March, May, July,
September, and November by the United States Bureau of Employment Security
and its affiliated State employment security agencies. The percentage of labor
market areas classified as labor-shortage or balanced-labor-supply areas rose from
around 30 percent in March and May 1952 to around 45 percent in these same
months of 1953; conversely, the percentage of areas classified as areas of moderateor substantial-labor-surplus fell. Aside from the changes in classification in the
direction of greater labor scarcity, there was very little change in the area composition of these various classifications. An allowance for some lag in reclassifying labor
market areas does not affect these comparisons.
4
Total school attendance of persons 14-34, including student workers, rose from
9.8 million in October 1952 to 10.2 million in October 1953, although total population in these ages remained about the same. Thus, the rise in school attendance was
genuine, and was not a mere reclassification of students who had dropped part-time
jobs.
284874—54
11
151
CENSUS METHODS FOR MEASURING UNEMPLOYMENT
Recent public discussion has revealed some unawareness of the improve
ment in methods of estimating unemployment since the thirties.
Formerly, employment was subtracted from the labor force to obtain
unemployment as a residual.5 For example, if an employment estimate of
60 million, subject to a relatively small error of 1 percent or 600,000, was
deducted from a labor force estimate of 62 million, subject to an error of
700,000, the unemployment residual of 2 million could have been in error
by 1.3 million, or 65 percent. Because of the obvious weakness of this
method, it was rejected in favor of direct enumeration, when the device
of household surveys was adopted in 1940.
Currently, the basic information for the Census estimates of employment,
unemployment, and labor force rests on a set of reports obtained by enumerators from a sample of 25,000 households distributed throughout the United
States. Every individual 14 years of age or over in each such household
is classified as "employed," "unemployed," or "not in the labor force," on
the basis of answers given to a standard set of questions by some responsible
member of the household. Thus, it is now asked directly whether the
individuals have jobs, and are therefore employed. If they do not have
jobs, it is next asked if they are seeking work, and are therefore unemployed.
The labor force is then obtained by adding these two estimates. A person
is classified as "not in the labor force" if he is reported to be neither working
nor seeking work.
From this basic information for the individuals in each of these 25,000
households, the Census computes the percentage of persons in each sexcolor-age group who are employed, unemployed, or not in the labor force.
National estimates are then derived by applying these percentages to independent estimates of the total civilian population by sex-color-age groups.
Since the unemployment estimate is based on Census surveys of a relatively small number of households, there is a possibility of sampling error.
With the size of the sample used and with unemployment at something like
its present magnitude, plus or minus sampling errors up to 200,000 are to
be expected on purely statistical grounds; and it is therefore highly improbable that the sampling error for December was larger than this figure.
Actual errors of only a few thousand were revealed by a comparison, at the
regular 1950 Census, of a 8/3 percent sample, a 20 percent sample, and a
full count. The validity of this range of sampling error depends on the
assumption that the work on the survey actually is carried out in accordance
with the survey specifications. In this respect, the care taken by the Census
is impressive, and there is no evidence that its unemployment data are subject to sampling error beyond the levels indicated.
5
Unemployment has never been computed in this way by the Bureau of the Census.
152
A considerable disparity, however, was found for April 1950, between
the two figures on unemployment then provided by the Census, the one
based on its regular monthly visits to 25,000 households, the other on its
enumeration of all the Nation's households. The two figures, derived
from virtually identical questions, ought to have been apart by no more
than sampling error; yet the gap between them was much larger. The
Census regards this discrepancy as owing, not to sampling difficulties, but
rather to interview error and in this connection stresses the difference in
competence between the small and well-trained corps of permanent samplesurvey interviewers and the 130,000 temporary interviewers used in taking
the regular census. It thus considers its monthly sample survey as more
accurate, and in support of this position points to a similar disparity for
a matched sample of 51,000 persons interviewed by both the Census and
the sample enumerators.
PROBLEMS OF DEFINITION OF UNEMPLOYMENT
The question has been raised whether the Census defines unemploy-'
ment in such a way as to exclude persons who want jobs but are too
discouraged to seek them.
The monthly surveys have long anticipated this problem by including in
their schedules the instruction to enumerators to "Enter cyes' [that the
worker was actually seeking work and was therefore unemployed] for a
person who would have been looking for work except for [the fact
that] * * * he believed that no work was available in the community or
in his line of work." Any persons who failed to look for jobs because they
thought there was no use would, if the intention of the questions were fully
realized, have been classed as unemployed.
There is tangible reason for believing that nearly all persons who strongly
desire jobs are classified as unemployed. After World War II, the Census
made a special effort, as part of its regular sample survey in the week ending May 10, 1947, to determine whether there were many genuinely unemployed who for good reason did not hunt jobs and therefore were not
classified as unemployed. At that time the unemployment rate was higher
than during any month of 1953. Nevertheless, of the 1,854,000 (on a sample basis) who were not in the labor force in the survey week but who had
worked or looked for work within the preceding two months, 1,634,000 said
they were not looking because they were busy with home or school responsibilities, did not want to work at that time, were physically unable, or were
only occasional workers. About 220,000 gave reasons that indicated "possibility of attachment to the labor force," and of these, one-fifth were ill.9
* Two other surveys within a year of that date were unfortunately made during
the summer, and thus their results were obscured by the response of large numbers
of vacationing school children. Even so, they revealed small numbers of "inactive
unemployed."
153
Thus, the number who could have been "inactively unemployed" was relatively very small.
The Census defines unemployment in terms of persons seeking work who
were without jobs ohiring the entire survey week. Accordingly, it defines as
employed many persons with jobs who were idle during part or all of the
survey week for such economic reasons as short-term lay-off, slack work,
shortage of materials, repairs to plant and equipment, or delays in being
called to a new job. A small number with jobs, but not working at all
during the survey week because of "temporary lay-off" or "not yet called to
a new job," are reported separately; in December they amounted to 240,000,
or 90,000 more than in December of the previous year.
The discussion so far has taken no account of part-time unemployment.
For a full understanding of the employment situation, it would be necessary
to know the amount of both overtime employment and part-time unemployment. No regular monthly canvasses of part-time unemployment
are made by the Census. Estimates are made, however, at irregular intervals and from these data it appears that some increase in part-time unemployment has occurred recently; but it is impossible to tell how much of the
increase is accounted for by seasonal or other special factors.
ANOTHER SOURCE OF UNEMPLOYMENT INFORMATION—INSURED
UNEMPLOYMENT
Data on insured unemployment are obtained as a by-product of the
operations of the State unemployment compensation systems. These data
are reported by the State agencies to the Bureau of Employment Security
in the United States Department of Labor. When a covered worker becomes unemployed, he reports to a local office of his State employment
security agency and files an "initial claim" for benefits (simply a notice
of the beginning of unemployment). In each subsequent week (or biweekly
in certain States), he files a "continued claim," representing unemployment
in the preceding week or weeks. In addition to these totally unemployed,
some persons working part-time may be eligible for partial unemployment
compensation and are included in the totals.
The insured unemployment series is derived by adjusting the continued
claims data for the lag between the week of unemployment and the time the
claim is filed so that the adjusted series refers to the week in which unemployment actually occurred.
Insured unemployment cannot, of course, be compared directly with
the total unemployment estimates of the Census Bureau. The State unemployment insurance programs cover approximately 37 million workers out
of a civilian work force of over 60 million. The main groups not covered
are agricultural workers, Government employees, the self-employed, domestic servants, workers in very small firms (in most States), employees of
non-profit organizations, and railroad workers (who have a separate un-
154
employment insurance system under the Railroad Retirement Board). In
general, persons in any of these groups who become idle are not included
in the statistics of insured unemployment. Also excluded are new entrants
into the labor force, workers with insufficient covered employment or earnings prior to lay-off, veterans filing claims under the Veterans Readjustment Assistance Act, and unemployed persons who have exhausted their
benefit rights. Although the number in the last category is currently small,
it could rise sufficiently in a time of prolonged unemployment to cause a
marked divergence between the paths of insured and total Census-reported
unemployment.
There are other differences from the Census estimates, arising largely from
diversities of definition. Counted among the "insured unemployed" are
workers who may file claims and be eligible for State unemployment compensation but who are classed as "employed" in the Census data. Included in this category are persons not working because of bad weather,
workers on temporary lay-off with definite instructions to return to work in
less than 30 days, those waiting to enter new jobs or businesses within 30
days, and certain part-time workers.
As the year 1953 began, insured unemployment averaged 1,156,000, a
figure that was one of the lowest for January since World War II and
more than 200,000 below that for January 1952. Insured unemployment
followed the general downward seasonal pattern through the late summer.
It continued to drop in September to 780,000, though this decline was
less than usual. In the last two months of the year, insured unemployment rose sharply and in excess of the usual year-end upturn, and at the
close of the year was 1,509,000, the highest for any December since 1945
except for December 1949. Nearly all of the major industrial States
reported increases in insured unemployment. The variation among the
States in the amount of increase was wide, however, and reflected differences
in industrial composition.
For short periods of time the paths of the insured and the Census
unemployment series may move rather far apart because of differences in
their coverage and definitions. The concentration of unemployment insurance coverage in volatile sectors of the economy, such as manufacturing
aad construction, would inevitably cause the insured unemployment series
to react more sensitively to economic conditions than the Census unemployment series, which covers, in addition, areas and industries much less
subject to unemployment. And the fact that the definition of insured
unemployment is such as to include persons on short-term layoffs, who
would be classed by the Census as "with a job but not at work" and therefore
as employed, would mean that the insured unemployment series would
respond more sensitively to the initial stages of adjustment in industrial
production. During such a period there is increased difficulty in determining the attachment to the labor market of persons recently laid off.
'55
Over longer periods of time there is very high correspondence between
the two measures of unemployment. Both are indispensable to the appraisal of conditions in the economy, especially in labor markets. The
Census estimates make available a national over-all measure at monthly
intervals of the total unemployment in the Nation, by age, sex, and other
characteristics. The insured unemployment series, though less comprehensive in certain respects, provides more up-to-date information on unemployment, since it is reported weekly, and tells what is happening to unemployment in different parts of the country.
156
Appendix F
RESEARCH AND DEVELOPMENT
EXPENDITURES, 1941-53
Research and Development Expenditures,
1941-53
Scientific and engineering research and development activities are now
widely used means of deliberately producing or accelerating technological
changes. Such activities are undertaken by businesses seeking to reduce
costs, to perfect new processes or products, or to improve the quality of
existing products. They are pursued at the laboratories of universities
and other nonprofit institutions in the quest for new scientific and technical
knowledge. They are conducted by the Federal Government, or organizations operating under Government contracts or grants, to advance the design of military weapons and equipment, expand the effective base of natural resources, hasten the civilian application of atomic power, improve agricultural practices and products, or contribute to medical science. From
an economic standpoint, research and development activities are an instrument of growth and competition, opening up new fields of investment.
TREND OF EXPENDITURES
Comprehensive statistics on research and development expenditures are
still crude, but some idea of the scope and trend may be obtained from estimates compiled from a variety of sources by the Research and Development
Board and by its successor, now designated as the Office of the Assistant Secretary of Defense (R&D). These estimates are intended to exclude construction and other capital expenditures, except as reflected in depreciation
charges; they include some research and development costs which are not
covered in the research and development category of the Department of
Defense budget. For these reasons and others, the Federal Government
component of the expenditures series shown in Table F-l differs from the
Federal Government figures shown in The Budget of the United States
Government • Fiscal Year 1955, "Special Analysis H: Research and Development", and also in the 1953 report of the National Science Foundation
entitled Federal Funds for Science: II. The Federal Research and Development Budget, Fiscal Years 1952 and 1953. Since the differences are merely
definitional, the Government figures included in the totals in Table F-l
are consistent and reconcilable with the figures presented in these other
sources.
The cumulative expenditures of the Federal Government,1 industry, and
nonprofit institutions for scientific and engineering research during the
1
State and local governments also make some contribution to scientific and engineering research and development—especially indirect, as in aid to schools of higher
learning and medical centers (included in our "nonprofit" category).
159
period 1941-53 approached 30 billion dollars. In 1953, the total outlay
was about 4 billion dollars,2 well over four times the 1941 figure. The rise
was, of course, due in part to inflation; but much of it was real, in view of
the large increase in professional research personnel, whose "productivity"
may also be presumed to have advanced.3
During the period under consideration, a significant change occurred in
the relative shares of the total research and development cost borne by
Government and industry.4 The Government expenditure in 1953, about
2.5 billion dollars, comprised over three-fifths of the national total; the
industry contribution, about 1.4 billion dollars, comprised almost threeeighths; nonprofit institutions accounted for the small remainder. In 1941,
on the other hand, the Government share was two-fifths and the industry
share less than three-fifths.
Despite the change in the source of financing, business enterprises continue to perform most of the research and development work. In 1953,
activity at industrial laboratories accounted for about 2.8 billion dollars,
or 70 percent of the total outlay of 4 billion dollars. The work done at
Government laboratories accounted for about 0.8 billion dollars, or one-fifth
of the national outlay. Thus, the workload distribution between Government and industry was not much different from that prevailing in 1941.
The Government-industry share of the total workload declined a little,
however, as nonprofit institutions, benefiting from Government contracts
and grants, increased their share from about 5 percent in 1941 to about
11 percent in 1953.
TREND OF EMPLOYMENT
About one out of every four scientists and engineers in the Nation is
employed in research and development.5 The number engaged in such
activity more than doubled between 1941 and 1953, reaching 192,000 in the
latter year. (See Table F-l.) During this period, the distribution between
Federal Government and industry did not differ much from the pattern
of expenditures according to site of activity; but the personnel share of the
2
This estimate, which incorporates a Government figure of 2.5 billion dollars, is
consistent with the "current" national estimate of "between 3.5 and 4.0 billion
dollars" shown in "Special Analysis H" of The Budget of the United States Government: Fiscal Year 1955. The latter version is based on a lower Government figure,
2 billion dollars, which excludes "very substantial costs associated with research
and development carried in other [Defense] budget categories."
3
A "productivity" advance is indicated in a survey made by the National Industrial Conference Board of the 1946 and 1951 research and development activities of
125 companies.
4
The details presented here and in subsequent paragraphs on the participation
of the Federal Government, industry, and nonprofit institutions are based on the
statistics underlying Table F-l.
"Report of the Office of the [Assistant] Secretary of Defense (R&D), Department
of Defense, The Growth of Scientific Research and Development (RDB 114/34),
July 27, 1953, p., 1.
160
nonprofit institutions (15 percent in 1953) consistently exceeded their
money share.
The personnel figures cited in Table F-l omit nonprofessional research
workers and other supporting workers (e. g., clerical and administrative).
It has recently been estimated that, on the average, 1.5 full-time equivalent
supporting workers are required in industry for each professional research
worker.6 The ratio varies, of course, according to type of research activity;
but the figure 1.5 appears reasonable for the three categories combined—
i. e., Federal Government, industry, and nonprofit institutions. On this
basis, it may be estimated that almost 500,000 full-time equivalent professional and supporting personnel were engaged in, or otherwise chargeable to,
research and development in 1953.
EMPHASIS ON EARLY APPLICABILITY
Most research and development activity is deliberately oriented toward
early practical applications, rather than toward increasing the store of
"basic" or "fundamental" knowledge. This practical stress promises a significant early expansion of our investment potential.
The dominant interest of industry in applications is understandable.
Large companies, however, do recognize the need to expand the horizons of
basic knowledge. A study of 191 large companies for 1951 shows that 42
percent of their research and development funds went toward the creation
of new products or processes, about 50 percent toward the improvement of
existing products or processes, and the remaining 8 percent to "programs
uncommitted to specific problems." 7
Federal research and development funds are also being channeled mainly
into activity promising early applications, especially in the interest of defense.
A study made by the National Science Foundation shows that only 6 percent
of the Federal research and development obligations in the fiscal years 1952
and 1953 supported basic research.8 "Special Analysis H" of The Budget
of the United States Government: Fiscal Year 1955 states that "more than
90 percent" of the Federal expenditures are for "development, applied
research, and new facilities." The President's Budget Message calls for
more funds for the National Science Foundation so that basic research may
be expanded and more graduate students trained.
6
This ratio is cited for January 1952 by the Bureau of Labor Statistics and the
Research and Development Board, Industrial Research and Development: A Preliminary Report (Washington, January 1953), p. 7; and by the Bureau of Labor
Statistics in cooperation with the Department of Defense, Scientific Research and
Development in American Industry: A Study of Manpower and Costs (BLS Bulletin
1148, Washington, 1953), pp. 18-20.
7
See De Witt G. Dearborn, Rose W. Kneznek, and Robert N. Anthony, Spending
for Industrial Research, 1951-1952 (Harvard University Graduate School of Business
Administration, Boston, 1953), p. 68.
8
Federal Funds for Science: II, op. cit., p. 9.
161
CIVILIAN USE OF MILITARY RESEARCH
Although most Federal research and development funds are now devoted
to projects sponsored by the Department of Defense and the Atomic Energy
Commission, it would be a mistake to assume that the results will not be
largely applicable, sooner or later, to civilian purposes. Indeed, many products that are now familiar—like steel alloys, aluminum, synthetic rubber,
and high-octane gasoline—received encouragement in earlier periods of
emergency. Similarly, today's research on guided missiles, jet planes and
engines, helicopters, heat- and corrosion-resistant metals and alloys, electronic automatisms, etc., will provide new civilian opportunities. The many
thousand scientists and engineers now engaged in defense research and
development are, in effect, being readied to facilitate this conversion.
Atomic research and development programs are also paving the way to
new peacetime industries. Rapid progress is being made in harnessing
atomic power for the production of electrical energy. Radioisotopes are
finding new uses in industry, agriculture, and medicine. Even in early 1953,
only two-fifths of the scientists and engineers engaged in atomic research
and development were concerned with fissionable materials and weapons.
Another one-fifth were working on nuclear reactors, which are needed for
generating electrical energy. The remaining two-fifths were employed in
basic and applied research in the physical sciences (physics, chemistry, and
metallurgy), mathematics, and the life sciences (biology, medicine, and
biophysics) .9
9
American Society of Mechanical Engineers, Uranium, Plutonium and Industry
(U. S. Atomic Energy Commission, Washington, March 1953), p. 13. The discussion of Atomic Energy Commission programs in "Special Analysis H" of The
Budget of the United States Government: Fiscal Year 1955 also emphasizes the
nonmilitary applicability of military research and development results.
162
ABLE F-l.—Estimated research and developmentl expenditures and employment in the United
States*, 1941-53
Expenditures «
(millions of
dollars)
Research
scientists and
engineers
employed *
(thousands)
1941
1942
1943
1944
1945.. .
900
1,070
1,210
1,380
1,520
87
90
97
111
119
1946 .
1947
1,780
2,260
122
125
Year
Year
Research
Expendi- scientists
and
tures *
engineers
(millions of employed *
dollars)
(thousands)
1948
1949
1950 .
2 610
2 610
2,870
133
144
151
1951
1952
1953s
3,360
3, 750
4,000
158
180
192
i "Research and development" embraces basic and applied research in tho sciences (including medicine)
and in engineering, and the design, development, and testing of prototypes and processes. The term is
meant here to exclude quality control, product testing, market research, sales promotion, sales service,
and
research in social sciences and psychology.
8
Includes Federal Government, industry, and nonprofit institution programs.
* Expenditures include salaries of professional and nonprofessional research personnel and of administrative and other supporting workers; other chargeable overhead; and materials. Capital investment is excluded, except as reflected in depreciation charges.
The Federal Government component of the series presented here may be reconciled with, though it is
based on a definition different from, the Federal Government series shown in The Budget of the United
States Government: Fiscal Year 1955, "Special Analysis H: Research and Development." It excludes
capital outlays; but it incorporates a sizable adjustment for Department of Defense funds devoted to
research
and development although not explicitly budgeted for such purposes.
4
Presumably refers to full-time equivalents; excludes nonprofessional research workers and supporting
nonresearch
(e. g., clerical and administrative) workers.
4
Preliminary.
Source: Office of the Assistant Secretary of Defense (R&D), Department of Defense. (For 1941-52 estimates, see The Orowth of Scientific Research and Development [RDB 114/34], July 27,1953, pp. 10-12.)
163
Appendix G
STATISTICAL TABLES RELATING TO INCOME,
EMPLOYMENT, AND PRODUCTION
CONTENTS
National income or expenditure:
Page
G-l. Gross national product or expenditure, 1929-53
167
G-2. Gross national product or expenditure in 1953 prices, 1929-53
168
G-3. Gross national product or expenditure in 1939 prices, 1929-53
170
G-4. The Nation'sjncome, expenditure, and saving, 1951-53
171
G-5. Personal consumption expenditures, 1929-53
172
G-6. Gross private domestic investment, 1929-53
173
G-7. National income by distributive shares, 1929-53
174
G—8. Relation of national income and personal income, 1929-53
175
G-9. Personal income, 1929-53
176
G-10. Disposition of personal income, 1929-53
177
G-ll. Total and per capita disposable personal income in current and 1953
prices, 1929-53
178
G-12. Liquid saving by individuals, 1939-53
179
G-13. Sources and uses of gross saving, 1929-53
180
G-l 4. Realized gross and net income of farm operators from farming, 1935-39
average and 1940-53
181
Employment and wages:
G-l 5. Total population 14 years of age and over and the labor force,
1929-53
182
G-l6. Labor force, employment, and unemployment: Total, males 20 to 64
years of age, and all others, 1929-53
184
G-l7. Employed persons with a job but not at work, by reason for not
working, 1946-53
185
G—18. Unemployed persons by duration of unemployment, 1946—53
186
G-l9. Insured unemployment under State unemployment insurance programs, by geographic division, 1939 and 1946-53
187
G—20. Labor turnover rates in manufacturing industries, 1930—53
188
G-21. Number of wage and salary workers in nonagricultural establishments, 1929-53
189
G-22. Average weekly hours of work in selected industries, 1929-53
190
G-23. Average gross hourly earnings in selected industries, 1929-53
191
G-24. Average gross weekly earnings in selected industries, 1929-53
192
Production and business activity:
G-25. Indexes of industrial and agricultural production, 1929-53
193
G-26. New construction activity, 1929-53
194
G-21. New nonfarm housing starts, by source of funds and by type of structure, 1929-53
195
G-28. Business expenditures for new plant and equipment, 1939 and
1945-54
196
G-29. Inventories and sales in manufacturing and trade, 1939-53
197
G-30. Manufacturers' new orders, sales, and inventories, 1939-53
198
165
Prices:
Page
G-31. Consumer price index, 1929-53
199
G-32. Wholesale price index, 1929-53
200
G—33. Indexes of prices received and prices paid by farmers, and parity ratio,
1929-53
202
G-34. Indexes of wholesale prices and cost of living in the United States and
foreign countries, selected dates
203
Credit, money supply, and Federal finance:
G-35. Short- and intermediate-term consumer credit outstanding, 1929-53.. 204
G-36. Mortgage debt outstanding, by type of property mortgaged, 1939-53. . 205
Gr-37. Deposits and currency, 1929-53
206
G-38. Loans and investments of all commercial banks, 1929-53
207
G-39. Member bank reserves and Reserve Bank credit, 1929-53
208
G-40. Estimated ownership of Federal obligations, 1939-53
209
G-41. U. S. Government debt—volume and kind of obligations, 1929-53 . . 210
G-42. Bond yields and interest rates, 1929-53
211
G-43. Government cash receipts from and payments to the public, calendar
years, 1943-53
212
Corporate profits and finance:
G-44. Profits before and after taxes, all private corporations, 1929-53
213
G-45. Relation of profits after taxes to stockholders' equity and to sales,
private manufacturing corporations, by industry group, 1947-50
average and 1952-53
214
G-46. Relation of profits before and after taxes to stockholders' equity and
to sales, private manufacturing corporations, by asset size class,
1947-50 average and 1952-53
216
G~47. Sources and uses of corporate funds, 1946-53
217
G-48. Business population, 1929-53
218
International transactions:
G-49. United States balance of payments, excluding U. S. Government
grants of military goods and services, 1947-53
219
G—50. U. S. Government grants, and 'capital movements to foreign countries,
1947-53
222
G-51. Estimated gold reserves and dollar holdings of foreign countries, 1928,
1937, and 1945-53
222
G—52. Indexes of quantity and unit value of United States merchandise imports for consumption and of domestic merchandise exports, by
economic class, 1936-38 average and 1947-53
223
Summary:
G-53. Changes in selected economic series since 1939 and since 1952
224
166
NATIONAL INCOME OR EXPENDITURE
TABLE G-l.—Gross national product or expenditure, 1929-53
[Billions of dollars]
Gross private domestic
investment 3
Period
Total
gross
national
product
1929
Personal
consumption
expenditures i
New
construction
Is
^"C
Net
foreign
11
invest^ fl ment
<-]
8|
r-j O*
Federal
B! af
"cS
flg
<o&
II
®^
Government purchases of
goods and services
^a
o%
11
0
tf
1°
I
S
3
e 1
H
0.8 8.5 1.3
- .3 .7 9.2 1.4
-1.4
.2 9.2 1.5
-2.6
.2 8.1 1 5
-1.6
.2 8.0 2!o
103.8
78.8 15.8
7.8
2.8
5.0
6.4
1930.
1931
1932
._
1933
1934
90.9
75.9
58.3
55.8
64.9
70.8 10.2
61.2 5.4
.9
49.2
46.3 1.3
51.9 2.8
5.6
3.6
1.7
1.1
1.4
1.4
1.2
.5
.3
.4
4.2
2.4
1.2
.8
1.0
4.9
3.2
1.8
1.8
2.5 -1.1
1935
1936
1937
1938
1939
72.2
82.5
90.2
84.7
91.3
56.2 6.1
62.5 8.3
67.1 11.4
64.5 6.3
67.5 9.9
1.9
2.8
3.7
3.3
4.9
.7
1.1
1.4
1.5
2.7
1.2
1.7
2.3
1.8
2.2
.9 -.1 9.9
3.4
1.0 -.1 11.7
4.5
2.3
.1 11.6
5.4
4.0 -1.0
1.1 12.8
.4
4.6
.9 13.1
1940
1941
1942
1943
1944
101.4
126.4
161.6
194.3
213.7
72.1 13.9
82.3 18.3
91.2 10.9
102.2 5.7
111.6 7.7
5.6
6.8
4.0
2.5
2.8
3.0
3.4
1.8
1.0
.8
2.6
3.4
2.2
1.5
2.0
6.1
7.7
4.9
4.1
5.7
215.2
211.1
233. 3
259.0
258.2
123.1
146.9
165.6
177.9
180.6
10.7
28.7
30.2
42.7
33.5
3.9
10.3
13.9
17.7
17.2
1.1
4.0
6.3
8.6
8.3
2.8
6.3
7.6
9.1
9.0
286.8
329.8
348.0
367.0
194.6
208.1
218.1
229.9
52.5
58.6
52.5
55.7
22.7
23.1
23.4
25.1
12.6
11.0
11.1
11.8
10.1
12.2
12.3
13.3
1945
1946
1947
1948
1949
__
_
1950
1951
1952 ..
1953*
1.6
.4
E!«
S,SJ
£
9.8
"cflGQ
JZJ
oM
T3
t-i
1
O
3
3
CO
(4)
(4)
(4)
(<)
(4)
(4)
(4)
(44)
()
(44)
(4)
()
(s)
p
§
7.2
)
7.8
7.7
6.6
5.9
6.8
2.9 ( ) ( ) ( )
4.8
4.6 4
5.3 ( ) (4)
5.2 1.3 3.9
7.0
6.9
7.0
7.5
7.9
3.0
4
4
5)
S)
5
5
8 8 8
8
8
2.3 1.5
3.9 1.1
2.1 -.2
-.9 -2.2
-.8 -2.1
13.9
24.7
59.7
88.6
96.5
6.2
16.9
52.0
81.2
89.0
2.2
13.8
49.6
80.4
88.6
4.0
3.2
2.7
1.5
1.6
0.2
.6
1.2
7.8
7.8
7.7
7.4
7.5
7.5 -.7 -1.4
6.1 4.6
12.3
17.1 -.8 8.9
5.0 1.9
19.9
.5
18.7 -2.5
82.8
30.9
28.6
36.6
43.6
74.8
20.9
15.8
21.0
25.4
75.9
21.2
13.3
16.1
19.3
1.0
2.5
3.8
5.6
6.6
2.2
2.7
1.3
.6
.4
8.0
10.0
12.8
15.6
18.2
7.5 -2.3
10.9
.3
3.7 -.2
3.9 -1.9
42.0
62.9
77.5
83.4
22.1
41.1
54.2
58.1
18.5
37.4
48.9
51.8
3.9
4.1
5.8
6.8
.2
.4
.5
.6
19.9
21.8
23.4
25.2
.5
.5
.6
.5
23.1
23.0
23.2
24.0
22.3
24.6
25.4
26.7
Seasonally adjusted annual rates
1952: First quarter..
Second quarter. _ _
Third quarter
Fourth quarter _ . _
340.4
345. 1
345.3
361.1
213.7
217.2
217.2
224.4
50.4
49.6
52.3
57.9
23.3
23.4
23.1
23.9
11.0
11.0
10.8
11.6
12.4
12.4
12.3
12.3
25.6
25.6
24.9
25.5
1.5 2.1
.5
.7
4.2 -2.0
8.5 -1.6
74.1
77.7
77.8
80.4
51.0
54.7
54.6
56.4
46.2
49.8
49.2
50.5
5.4
5.4
6.0
6.3
1953: First quarter..
Second quarter. _.
Third quarter 8
Fourth quarter ..
363.4
370.7
368.8
365.0
227.7
230. 4
231.0
230.5
55.4
59.3
56.3
51.5
25.0
25.3
24.9
25.0
12.2
12.0
11.5
11.5
12.8
13.4
13.4
13.5
26.2
26.9
27.1
26.5
4.3 -2.1
7.1 -2.5
4.3 -2.1
.0 -1.0
82.4
83.5
83.6
84.0
57.4
58.9
58.4
57.7
51.6
53.5
52.1
50.2
6.5
6.0
6.8
8.0
;l
24.9
24.6
25.2
26.3
1 See appendix table G-5 for major components.
2 See appendix table G-6 for more detail and explanation of components.
» For 1947-53 "national security" expenditures include the items classified as such in The Budget of the
United States Government for the Fiscal Year ending June SO, 1954. The items are: military services,
im.ernational security and foreign relations, development and control of atomic energy, promotion of merchant marine, promotion of defense production and economic stabilization, and civil defense. These
expenditures are not comparable with the "national security" category in the Budget for the Fiscal Year
ending June 30, 1955. "National defense" expenditures for goods and services correspond more closely to
the new Budget definition; they include items shown under the national security classification in the 1955
Budget and in addition, defense production and economic stabilization, military manpower selection, promotion of aviation (National Advisory Committee for Aeronautics only), and civil defense. National defense expenditures for goods and services since 1947 are as follows: 1947, 12.2 billion dollars; 1948, 11.7
billion; 1949, 13.6 billion; 1950,14.2 billion; 1951, 34.0 billion; 1952, 46.5 billion; 1953, 49.9 billion.
* Not available.
« Less than 50 million dollars.
• Estimates based on incomplete data; fourth quarter by Council of Economic Advisers.
NOTE.—Detail will not necessarily add to totals because of rounding.
Source: Department of Commerce (except as noted).
284874—54
167
TABLE G-2.—Gross national product or expenditure in 1953 prices, 1929-53 *
[Billions of dollars, 1953 prices]
Personal consumption
expenditures
Gross private domestic investment
New construction
Total
gross
Pro- Change
national
in
Nonducers' busiproduct Total DurServduResidurable ness
able rable ices Total
denequipgoods
Period
Total tial Other ment
(nonfarm)
goods
inventories
1929
175.9 123.2
16.8 63.2
43.2 34.2
19.8
7.0
12.8
11.5
3.0
1930
1931
1932
1933
1934. . .
159.2
147.7
125.3
123.4
136.3
115.7
111.7
102.1
100.6
106.8
13.4
11.1
8.3
8.0
9.3
42.2 23.3
41.0 14.7
39.1 3.3
38.5 3.7
38.9 6.7
14.7
10.3
5.6
4.0
4.5
3.7 10.9
3.5 6.8
1.6 4.0
1.0 3.0
1.1 3.3
9.1
6.2
3.7
3.7
6.0
-.5
-1.8
-6.0
-4.1
-2.8
150.3
170.2
179.6
171.8
187.9
113.2
124.9
129.3
127.2
134.4
11.3 62.0
13.9 69.1
14.7 71.5
12.0 72.6
14.1 76.5
39.9
41.9
43.1
42.6
43.9
15.2
19.6
25.6
14.5
22.8
6.0
8.4
10.1
8.9
13.1
2.2
3.4
3.8
4.0
7.1
3.8
4.9
6.3
4.9
6.0
6.7
9.1
10.4
7,4
8.6
2.5
2.2
5.1
-1.8
1.0
205.7
239.2
271.7
305.9
329.3
142.1
153.2
151.0
155.1
161.4
16.1
18.7
11.9
10.5
9.7
45.6
47.5
49.6
52.3
55.1
30.8
38.2
21.2
11.8
13.7
14.5
16.4
8.8
5.2
5.4
7.6
8.3
3.8
1.8
1.5
6.9
8.1
6.0
3.3
3.8
11.3
13.5
8.3
6.9
9.7
5.0
8.2
4.0
-.3
-1.3
1945
1946
1947
1948
1949
319.9
283.4
282.8
293.3
294.2
172.0 11.0 103.9 57.1 17.3
191.0 21.7 108.8 60.5 43.7
196.0 25.8 107.5 62.7 41.6
199.6 26.3 107.9 65.4 49.9
205.0 27.0 110.0 68.1 39.7
7.1 1.9
16.2 6.2
18.5 8.2
21.4 10.0
21.1 9.9
5.2
10.0
10.3
11.4
11.2
12.6
18.6
22.3
23.9
21.6
-2.4
[8.9
.8
4.7
-3.0
1950
1951
1952
1953*.. _.
320.1
343.6
354.1
367.0
216.3
215.3
221.0
229.9
12.0
13.2
12.8
13.3
25.1
25.3
25.7
26.7
8.1
10.7
3.7
3.9
1935
1936
1937
1938
1939
_
___
.
1940... _
1941
1942 .
1943
1944
_.
_
_
_
_
__
32.4
28.0
27.0
30.2
60.1
59.6
54.8
54.1
58.6
80.5
87.0
89.6
92.4
96.6
112.2
113.9
118.3
121.3
See footnotes at end of table.
168
71.8
73.4
75.7
78.4
59.3 26.1
60.7 24.7
53.6 24.1
55.7 25.1
14.1
11.5
11.3
11.8
TABLE G-2.—Gross national product or expenditure in 1953 prices, 1929-53 J—Continued
[Billions of dollars, 1953 prices]
Gover nment pur chases of g()ods and s<jrvices
Federal
Net
foreign
investment
TJ-^—l- J
1929
1930
1931
1932
1933 . .
1934
1935.
1936 .
1937
1938
1939
_
. .
_
_
1940
1941
1942
1943—
1944
1945
1946
1947—
1948
1949
1950
1951
1952 5
1953 .. .
..
..
.
Total
State
National3
Total * security
and
Other
local
02
__ •!
—.6
— 7
9
— 4
18 3
2.9
(4)
(4)
15 4
20 3
21.9
20 5
20.0
23 2
3.3
3.6
3.7
5.1
69
4)
4)
4)
4)
4)
(4)
(4)
(4)
(4)
(4)
17 0
18.3
16 8
14.9
16 2
—1.5
—1.7
—1.4
.8
.6
23.4
27.4
26.1
29 2
30.1
6.8
10.9
9.9
11.9
11.6
(4)
(4)
(4)
(4
(4)
2.9
8.8
16.6
16.5
16.2
17.4
18.5
1.2
— 2
—2.2
-6.2
—6 6
31.6
48 0
101.8
145.2
160 8
13.7
31.0
86.1
131.0
146.9
4.9
25.3
82.1
129.7
146.2
8.9
5.9
4.5
2.4
2.6
17.9
17 0
15.6
14.2
13 9
—6 1
3.9
8.2
.0
—1.3
136 7
44.7
36.9
43 8
60.8
122 6
28.8
19.2
24.6
29.1
124.4
29.2
16.2
18.8
22.1
1.6
3.4
4.6
6.5
7.5
14 1
15.9
17.8
19.2
21.7
—2.8
1.7
.4
—1.9
47.3
65.8
79 1
83.4
24.4
42.6
55.2
58.1
20.4
38.8
49.8
51.8
4.3
4.2
5.9
6.8
23.0
23.2
24.0
25.2
(4)
(4)
(4)
i These estimates represent an approximate conversion of the Department of Commerce series in 1939
prices. (See appendix table G-3.) This was done by major components, using the implicit price indexes
converted to a 1953 base. Although it would have been preferable to redeflate the series by minor components, this would not substantially change the results except possibly for the period of World War II§
and
for the series on "change in business inventories."
8
Net of Government sales, which are not shown separately on this table. See appendix table G-l for
Government salts in current prices.
»4 See appendix table G-l, footnote 3.
Not available.
5
Estimates based on incomplete data.
NOTE.—Detail will not necessarily add to totals because of rounding.
Source: Council of Economic Advisers.
169
TABLE G-3.—Gross national product or expenditure in 1939 prices, 1929-53 1
[Billions of dollars, 1939 prices]
Personal consumption
expenditures
Period
Government
purchases of goods
and services
Gross private domestic
investment
Total
gross
naPro- Change
tional
in
New ducprodDu- Nonbusidu- Serv- Total con- ers'
uct Total rable rable
duness
struc- rable
goods goods ices
tion equip- invenment tories
Net
Gross
forprieign
vate
inState prodvestand uct*
ment Total Federal local
1929
85.9
62.2
8.0
29.1
25.1
14.9
7.4
6.1
1.5
0.8
7.9
1.3
6.6
81.5
1930
1931
1932
1933
1934
78.1
72.3
61.9
61.5
67.9
58.6
56.6
51.8
51.1
54.0
6.4
5.3
3.9
3.8
4.4
27.7
27.5
25.2
24.9
27.0
24.5
23.9
22.7
22.4
22.6
10.1
5.9
1.1
1.6
3.5
5.4
3.8
2.1
1.5
1.7
4.8
3.3
1.9
2.0
2.7
-.2
-1.1
-3.0
-1.8
-.8
.6
.3
.2
.1
.3
8.7
9.4
8.9
8.7
10.1
1.5
1.6
1.7
2.3
3.1
7.3
7.8
7.2
6.4
7.0
73.5
67.7
57.4
56.5
62.0
1935
1936
1937
1938
1939
73.9
83.9
87.9
84.0
91.3
57.2
62.8
65.0
63.9
67.5
5.4
6.6
7.0
5.7
6.7
28.6
31.8
32.9
33.4
35.3
23.2
24.4
25.1
24.8
25.5
6.7
9.3
11.4
6.3
9.9
2.2
3.1
3.8
3.3
4.9
3.6
4.8
5.5
3.9
4.6
.9
1.4
2.1
-1.0
.4
-.1
-.2
.1
1.0
.9
10.1
11.9
11.4
12.7
13.1
3.0
4.9
4.4
5.3
5.2
7.1
7.1
6.9
7.4
7.9
67.6
76.4
80.9
76.4
83.7
1940
1941
1942
1943
1944
100.0
115.5
129.7
145.7
156.9
71.3
76.6
75.8
78.0
81.1
7.7
8.9
5.7
5.0
4.6
37.1
40.1
41.3
42.6
44.5
26.5
27.6
28.8
30.4
32.0
13.7
17.1
9.3
5.4
6.6
5.4
6.1
3.3
1.9
2.0
6.0
7.2
4.4
3.6
5.1
2.3
1.2
3.8
.7
1.6 -.4
—.1 -2.1
-.5 -2.2
13.8
21.1
45.0
64.3
71.3
6.1
13.8
38.3
58.2
65.4
7.7
7.3
6.7
6.1
6.0
92.1
106.2
116.5
125.3
133.0
153.4 86.3
138.4 95.7
138.6 98.3
... 143.5 100.3
144.0 103.2
5.3
10.4
12.3
12.6
12.9
47.9
50.2
49.5
49.7
50.7
33.2
35.2
36.4
38.0
39.6
8.3
20.3
19.3
22.7
18.0
2.6
6.0
6.9
8.0
7.9
6.7
9.9
11.8
12.6
11.4
-1.0 -1.8
4.4
2.7
.6
4.8
2.1
1.4
-1.3
.6
60.6
19.6
16.1
19.2
22.2
54.6
12.8
8.5
10.9
12.9
6.0
6.8
7.6
8.2
9.3
129.7
125.6
128.8
133.7
133.7
15.5
13.4
12.9
14.4
51.7
52.4
54.5
55.9
41.7
42.6
44.0
45.6
26.8
27.6
24.3
25.4
9.7
9.2
9.0
9.4
13.3
13.4
13.6
14.1
-.1 20.7
2.0 28.9
1.4 34.8
.4 36.6
10.8
18.9
24.5
25.8
9.8
9.9
10.3
10.8
145.7
153.9
157.8
164.1
1945
1946
1947
1948
1949
1950
1951
1952.
19533
..
156.2
167.0
172.0
178.3
108.9
108.5
111.4
115.9
3.8
5.0
1.7
1.9
i See Survey of Current Business, January 1951, and A Supplement to the Survey of Current Business, National
Income, 1951 edition, for explanation of conversion of estimates in current prices to those in 1939 prices and
for implicit deflators used.
a Total gross national product less compensation of general government employees.
* Estimate based on incomplete data; by Council of Economic Advisers.
NOTE.—Detail will not necessarily add to totals because of rounding.
Source: Department of Commerce (except as noted).
170
TABLE G-4.—The Nation's income, expenditure, and saving, 1951-53
[Billions of dollars]
1952
1951
Economic group
Excess
Excess
Excess
of reof reof receipts
ceipts
Ex- (+)or ReEx- (+)or ReEx- ceipts
Re- pendi(+)or
ceipts tures
ex- ceipts pendiex- ceipts pendiextures penditures pendipenditures
tures
tures
(-)
(-)
(-)
Consumers:
Disposable personal income
- 225.0
Personal consumption expenditures... ..
Personal net saving (+)
Business:
Gross retained earnings
Gross private domestic investment
Excess of investment (— )
Net receipts
235.0
208 1
55.7
— 15 1
-.2
.3
+1.9
86 8
92 0
16 8
16 9
17 8
75.1
81.4
70.0
99 2
79.7
94.4
101.2
16.8
16.9
17.8
62.9
77.5
83.4
Surplus (+) or deficit
(— ) on income and
product account. . .
-2.4
+7.1
+1.1
1.1
329 g
329 8
+.5
.5
348 0
—16 8
—1.9
+.2
-3
Purchases of goods and services .. ._ .
Gross national product
+18.1
38.9
52. 5
—24 8
229 9
+16.9
37.4
58.6
Total Government expenditures
Less: Transfers, interest, and
subsidies (net)
Statistical discrepancy ,
248.0
218 1
+16.9
33.8
International:
Net foreign investment
Excess of receipts (+) or
investment (— )
>
Government (Federal, State, and
local):
Tax and nontax receipts or accruals
Less: Transfers, interest, and
subsidies (net)
19531
348 0
•
—2.0
-1.3
367 0
—1.3
367 01
i Estimates based on incomplete data; by Council of Economic Advisers.
NOTE.—Detail will not necessarily add to totals because of rounding.
Source: Based on the national income and product statistics of the Department of Commerce (except a
noted).
171
TABLE G-5.—Personal consumption expenditures, 1929-53
[Billions of dollars]
Total
Services
Nondurable goods
Durable goods
personal
conAutosumpmotion
Hous- Other
Total
biles Other Total Food' Clothexings Other Total ings
and
pendiparts
tures
Period
78.8
9.4
3.2
6.1
37.7
19.7
9.2
8.9
31.7
11.4
20.2
70.8
61.2
49.2
46.3
51.9
7.3
5.6
3.7
3.5
4.3
2.2
1.6
.9
1.0
1.4
5.1
4.0
2.8
2.5
2.9
34.1
29.0
22.7
22.3
26.7
18.1
14.8
11.4
11.5
14.3
7.9
6.8
5.0
4.6
5.6
8.1
7.4
6.4
6.2
6.9
29.5
26.6
22.8
20.6
20.9
11.0
10.2
9.0
7.8
7.5
18.5
16.4
13.8
12.7
13.4
56.2
62.5
67.1
64.5
67.5
5.2
6.4
7.0
5.8
6.7
1.9
2.3
2.4
1.6
2.1
3.3
4.1
4.6
4.1
4.6
29.4
32.9
35.2
34.0
35.3
16.3
18.5
20.0
19.0
19.3
5.9
6.5
6.7
6.6
7.0
7.2
7.9
8.6
8.4
8.9
21.7
23.3
24.9
24.7
25.5
7.6
7.9
8.4
8.7
8.9
14.1
15.4
16-5
16.0
16.5
72.1
82.3
91.2
102. 2
111.6
7.9
9.8
7.1
6.8
7.1
2.7
3.3
.7
.8
.9
5.1
6.4
6.4
6.0
6.2
37.6
44.0
52.9
61.0
67.1
20.7
24.4
30.5
35.3
38.9
7.4
8.8
11.0
13.7
15.3
9.5
10.8
11.4
11.9
12.9
26.6
28.5
31.2
34.4
37.4
9.2
9.9
10.6
11.1
11.7
17.4
18.7
20-6
23-3
25.7
1945
1946
1947
1948
1949
123.1
146.9
165.6
177.9
180.6
8.5
16.6
21,4
22.9
23.8
1.1
4.2
6.6
7.5
9.4
7.4
12.4
14.8
15.4
14.5
74.9
85.8
95.1
100.9
99.2
43.0
50.3
56.6
59.7
58.9
17.1
18.6
19.1
20.1
19.0
14.8
16.9
19.4
21.1
21.4
39.7
44.5
49.1
54.1
57.5
12.2
13.0
14.6
16.5
18.1
27.5
31.4
34.5
37.7
39.4
1950
1951
1952
194.6
208.1
218.1
229.9
29.2
27.3
26.7
30.2
12.3
10.9
10.4
13.7
16.9
16.4
16.3
16.5
102.6
113.4
118.8
121.3
61.2
69.0
72.6
74.3
18.9
20.3
20.7
20.3
22.5
24.1
25.4
26.7
62.7
67.4
72.7
78.4
20.2
21.9
24.0
26.1
42.5
45.5
48.7
52.3
1929
_
1930
1931
1932
1933
1934
1935
1936
1937
1938
1939
1940
1941
1942
1943
1944
.
- .
1953*
Seasonally adjusted annual rates
1952: First half..
Second half
. ..
215.5
220.8
26.7
26.7
10.7
10.1
16.0
16.5
117.6
119.9
71.9
73.3
20.5
21.0
25.2
25.7
71.2
74.2
23.5
24.5
47.7
49.7
1953: First half
Second half*
229.1
230.7
30.4
30.0
13.8
13.5
16.6
16.4
121.6
120.9
74.3
74.3
20.9
19.6
26.4
27.0
77.0
79.9
25.5
26.7
51.4
53.2
1952: First quarter
Second quarter.
Third quarter
Fourth quarter
213. 7
217.2
217.2
224.4
26.0
27.4
25.1
28.2
9.9
11.5
8.8
11.5
16.1
15.9
16.3
16.7
117.2
118.0
118.7
121.1
71.5
72.3
73.0
73.5
20.5
20.5
20.4
21.5
25.2
25.2
25.2
26.1
70.5
71.8
73.3
75.1
23.2
23.8
24.3
24.8
47.3
48.1
49.1
50.3
1953: First quarter
Second quarter.. .
Third quarter
Fourth quarter *
227.7
230.4
231.0
230.5
30.2
30.7
30.4
29.5
13.4
14.3
13.8
13.3
16.8
16.4
16.7
16.2
121.2
122.1
121.3
120. 5
74.2
74.5
74.5
74.1
20.9
20.9
19.9
19.4
26.2
26.7
26.9
27.0
76.3
77.6
79.2
80.5
25.3
25.8
26.4
27.0
51.0
51.9
52.8
53.5
i Includes alcoholic beverages.
* Includes shoes and standard clothing issued to military personnel.
»Includes imputed rental value of owner-occupied dwellings.
* Estimates based on incomplete data; fourth quarter by Council of Economic Advisers.
NOTE.—Detail will not necessarily add to totals because of rounding.
Source: Department of Commerce (except as noted).
172
TABLE G-6.—Gross private domestic investment, 1929-53
[Billions of dollars]
Total Nonfarm producers'
Farm equipment
ResiNet change in
gross plant and equipment and construction dential Other
pri- business inventories
private
con- vate
dostruc- conmestic
ConCon- tion strucEquip- strucNon2 struc- Total *
6 Total
invest- Total i Equip(nonfarm 7 Farm
ment
ment
tion i s
ment
tion farm) is tion
Period
1929....
15.8
9.8
5.6
4.2
1.1
0.8
0.3
2.8
0.5
1.6
10.2
5.4
.9
1.3
2.8
7.6
4.6
2.5
2.3
3.1
4.3
2.8
1.6
1.6
2.2
3.4
1.8
1.0
.7
.9
.9
.5
.3
.3
.2
.1
.1
1.4
1.2
.5
.3
.4
.5
.4
.2
.1
.1
-.3
.4
.7
.4
.3
.3
.3
-1.4
-2.6
-1.6
-1.1
-2*. 6
—1.3
.2
-1.3
6.1
8.3
11.4
6.3
9.9
3.8
5.2
6.6
4.7
5.7
2.9
3.9
4.7
3.4
4.0
1.0
1.3
1.9
1.4
1.7
.6
.8
1.0
.8
.8
.5
.6
.8
.6
.6
.1
.2
.2
.2
.2
.7
1.1
1.4
1.5
2.7
.1
.9
.1 1.0
.2
2.3
.2 -1.0
.4
.2
.4
2.1
1.8
-1.1
.3
.5
-1.1
.5
.1
.1
1940.
1941
1942
1943
1944
13.9
18.3
10.9
5.7
7.7
7.4
9.3
5.8
4.6
6.3
6.3
6.6
4.1
3.5
4.7
2.1
2.7
1.7
1.1
1.6
1.0
1.3
1.0
.9
1.2
.8
1.0
.7
.6
.9
.2
.3
.3
.3
.3
3.0
3.4
1.8
1.0
.8
.2
.3
2.3
3.9
2.1
-.9
-.8
2.0
3.4
.8
-.5
-.3
.2
.5
1.3
-.4
-.5
1945
1946
1947
1948
1949
10.7
28.7
30.2
42.7
33.5
8.7
15.5
20.3
23.4
21.7
6.3
10.7
14.6
16.7
15.3
2.4
4.8
5.7
6.7
6.4
1.4
2.4
3.8
4.6
4.7
1.1
1.6
2.5
3.2
3.4
.3
.9
1.3
1.4
1.3
1.1
4.0
6.3
8.6
8.3
.2 -.7
.6
6.1
.7 -.8
1.0
5.0
1.3 -2.5
-.6
6.3
1.4
3.7
-1.6
-.1
-.2
-2.2
1.3
-.9
52.5
58.6
52.5
55.7
25.7
29.3
30.6
33.2
18.7
20.5
21.5
23.2
7.0
8.8
9.1
10.0
5.2
5.7
5.5
4.9
3.6
4.1
3.9
3.4
1.6
1.6
1.6
1.5
12.6
11.0
11.1
11.8
1.5
1.7
1.6
1.8
7.5
10.9
3.7
3.9
6.6
9.6
3.1
3.8
.9
1.2
.7
.1
1930
1931
1932
1933
1934
_.
1935
1936
__
1937...
1938
1939
.„
..
.-_
.-
1950
1951
1952 9
1953
1.8
-0.3
-.2
.3
«,
Seasonally adjusted annual rates
1952: First half
Second half
50.0
55.1
30.7
30.5
21.6
21.4
9.1
9.1
5.6
5.4
4.0
3.8
1.6
1.6
11.0
11.2
1.6
1.6
1.1
6.4
0.3
5.9
0.8
.5
1953- First half 9
Second half .
57.3
53.9
32.9
33.6
23.0
23.4
9.9
10.2
5.0
4.8
3.5
3.4
1.5
1.4
12.1
11.5
1.7
1.8
5.7
2.1
5.5
2.1
.2
.0
1952: First quarter
Second quarter
Third quarter
Fourth quarter
50.4
49.6
52.3
57.9
30.7
30.8
30.2
30.9
21.6
21.7
21.1
21.8
9.1
9.1
9.0
9.1
5.6
5.5
5.4
5.3
4.0
3.9
3.8
3.7
1.6
1.6
1.6
1.6
11.0
11.0
10.8
11.6
1.6
1.6
1.6
1.7
1.5
.7
4.2
8.5
.6
-.1
3.6
8.1
.9
.8
.6
.4
1953: First quarter
Second quarter
Third quarter 9
Fourth quarter
55.4
59.3
56.3
51.5
32.3
33.5
33.9
33.3
22.7
23.4
23.7
23.1
9.6
10.1
10.2
10.2
5.0
5.0
4.9
4.8
3.5
3.5
3.4
3.4
1.5
1.5
1.5
1.4
12.2
12.0
11.5
11.5
1.6
1.8
1.8
1.8
4.3
7.1
4.3
.0
4.0
7.0
4.2
.0
.3
.1
.1
.0
i Items for 1945 and earlier years are not comparable with those for later years or with figures shown in appendix
table G-26. Items for nonfarm producers' plant and equipment for all years are not comparable with those shown
in appendix table G-28, principally because the latter exclude certain equipment and construction outlays charged
to current expense.
* Total producers' durable equipment less "farm machinery and equipment" and farmers' purchases of tractors
and business motor vehicles. These figures assume that farmers purchase 85 and 15 percent, respectively, of all
tractors and motor vehicles used for productive purposes.
3 Industrial buildings, public utilities, gas- and oil-well drilling, warehouses, office and loft buildings, stores,
restaurants, and garages. Includes hotel construction prior to 1946 only.
< Farm construction (residential and nonresidential) plus "farm machinery and equipment" and farmers' purchases of tractors and business motor vehicles. (See footnote 2.)
»Includes construction of hotels, tourist cabins, motor courts, and dormitories since 1946 only.
«Includes religious, educational, social and recreational, hospital and institutional, miscellaneous nonresidential,
and
all other private construction.
7
After revaluation adjustment.
8
Less than 50 million dollars.
' Estimates based on incomplete data; fourth quarter by Council of Economic Advisers.
NOTE.—Detail will not necessarily add to totals because of rounding.
Source: Department of Commerce (except as noted).
173
TABLE G-7.—National income by distributive shares, 1929-53
[Billions of dollars!
Total
national
income1
Period
Business and professional income
and inventory
valuation
adjustment
Compensation
Inof emcome
ploy2
of
ees Total unincorporated
enterprises
Income
of
In- farm
ven- protory prievalu- tors 3
ation
adjustment
Rental income
of
persons
Corporate profits
and inventory
valuation
adjustment
Net
Corporate
Total profits
before
taxes «
87.4
50.8
8.3
8.1
0.1
5.7
5.8
75.0
58.9
41.7
39.6
48.6
46.5
39.5
30.8
29.3
34.1
7.0
5.3
3.2
2.9
4.3
6.3
4.7
2.9
3.4
4.3
.8
.6
.3
-.5
-.1
3.9
2.9
1.7
2.3
2.3
4.8
6.6
3.6
1.6
2.5 -2.0
2.0 -2.0
2.1
1.1
56.8
64.7
73.6
67.4
72.5
37.1
42.7
47.7
4.7
47.8
5.0
6.1
6.6
6.3
6.8
5.0
6.2
6.7
6.1
6.9
-.1
-.1
(6)
.2
-.2
4.9
3.9
5.6
4.4
4.5
2.3
2.7
3.1
3.3
3.5
3.0
4.9
6.2
4.3
5.8
81.3
103.8
137.1
169.7
183.8
51.8
64.3
84.9
109.2
121.2
7.7
9.6
12.6
15.0
17.2
7.8
10.2
12.9
15.1
17.2
4.9
6.9
10.5
11.8
11.8
3.6
4.3
5.4
6.1
6.5
1945 .
1946
1947
1948
1949
-. 182.7
180.3
198.7
223.5
216.3
123.0
117.1
128.0
140.2
139.9
18.7
20.6
19.8
22.1
21.6
18.8
22.4
21.3
22.5
21.0
-.1
-.0
-.4
-.2
-.1
__ j
-1.8
-1.5
-.4
.6
12.5
14.8
15.6
17.7
12.8
1950 ..
1951
1952
1953 •
240.6
278.4
291.6
(7)
153.4
178.9
193.2
207.7
23.6
26.1
26.3
27.0
24.9 -1.2
26.5 -.4
26.1
.3
27.2 -.2
13.3
15.5
14.8
12.3
1929
_.
1930
1931
1932 .
1933
1934
1935
1936
1937
1938
1939
__
.-_
__
1940
1941..
1942
1943
1944
_
_
_
-
10.3
In- inven- terest
tory
valuation
adjustment
0.5
6.5
3.3 3.3
-.8 2.4
-3.0
1.0
.2 -2.1
1.7 -.6
6.2
5.9
5.4
5.0
4.8
9.8
3.2
5.7
6.2
3.3
6.5
-.2
s7
71.0
')
-.7
4.5
4.5
4.4
4.3
4.2
9.2
14.6
19.9
24.3
24.0
9.3 -.1
17.2 -2.6
21.1 -1.2
25.1 -.8
24.3 -.3
4.1
4.1
3.9
3.4
3.1
6.3
6.6
7.1
7.5
7.7
19.2
18.3
24.7
31.7
29.2
19.7 -.6
23.5 -5.2
30.5 -5.8
33.8 -2.1
27.1 2.1
3.0
2.9
3.5
4.3
5.0
8.5
9.1
10.0
10.6
36.0
42.4
40.2
(T)
41.0 -5.0
43.7 -1.3
39.2
1.0
-.8
(7)
5.7
6.4
7.0
7.8
Seasonally adjusted annual rates
1952: First half
Second half
287.4
295.9
188.7
197. 7
26.2
26.4
26.1
26.0
0.1
.4
15.0
14.6
9.8
10.3
40.8
39.7
39.8
38.6
1.0
1.0
6.8
7.3
1953: First half 6
Second half . .
206.3
209.2
27.0
26.9
27.2
27.2
-.2
12.9
11.8
10.4
10.7
44.5
(7)
45.2
(7)
-.7
-.8
7.7
8.0
1952* First quarter
Second quarter
Third quarter
Fourth quarter
308.7
(7)
286.8
287.9
290.4
301.4
187.9
189.5
194.1
201.3
26.1
26.3
26.1
26.7
26.3
26.0
26.0
26.0
tt
14.7
15.3
15.2
14.0
9.6
10.0
10.2
10.3
41.7
39.9
37.7
41.7
41.5
38.2
37.0
40.3
.2
1.7
.7
1.4
6.7
6.9
7.1
7.4
1953: First quarter
Second quarter
Third quarter
Fourth quarter *
306.7
310.7
308.1
(7)
204.5
208.0
210.4
207.9
27.0
27.0
26.9
26.9
27.3
27.1
27.8
26.5
-.3
1
-.9
.4
13.4
12.3
11.6
12.0
10.4
10.4
10.6
10.8
43.8
45.2
40.7
0
44.6 -.8
45.9 -.6
43.3 -2.6
1.0
(')
7.6
7.7
7.9
8.1
-.2
+.3
1
National income is the total net income earned in production. It differs from gross national product
in that it excludes depreciation charges and other allowances for business and institutional consumption
of 2durable capital goods, and indirect business taxes.
Includes wage and salary receipts and other labor income (see appendix table G-9), and employer and
employee
contributions for social insurance (see appendix table Q-8).
3
Data are subject to revisions already reflected in appendix table G-14.
4
See appendix table G-44 for corporate tax liability 5(Federal and State income and excess profits taxes)
and corporate profits after taxes.
* Less than 50 million dollars.
•7 Estimates based on incomplete data; fourth quarter by Council of Economic Advisers.
Not available.
NOTE.—Detail will not necessarily add to totals because of rounding.
Source: Department of Commerce (except as noted).
174
TABLE G—8.—Relation of national income and personal income, 1929—53
[Billions of dollars]
Less:
Period
National
income
1929 ..
87.4
1930
Plus:
CorpoExcess
rate
of
profits Contri- wage
and in- butions acfor
ventory
social cruals
valu- insur- over
disation
ance burseadjustments
ment
Government
transfer
payments
Equals:
Net
interest
paid
by
government
Dividends
BusiPerness
trans- sonal
fer
income
payments
10.3
0.2
0.9
1.0
5.8
0.6
85.1
1.0
2.0
1.4
1.5
1.6
1.0
1.1
1.1
1.2
1.2
5.5
4.1
2.6
2.1
2.6
.5
.6
.7
.7
.6
76.2
64.8
49.3
46.6
53.2
1932
1933 -
1934...
75.0
58.9
41.7
39.6
48.6
6.6
1.6
-2.0
-2.0
1.1
.3
.3
.3
.3
.3
1935 „
1936
1937
1938 _.
1939.
56.8
64.7
73.6
67.4
72.5
3.0
4.9
6.2
4.3
5.8
.3
.6
1.8
2.0
2.1
1.8
2.9
1.9
2.4
2.5
1.1
1.1
1.2
1.2
1.2
2.9
4.6
4.7
3.2
3.8
.6
.6
.6
.4
.5
59.9
68.4
74.0
68.3
72.6
81.3
103. 8
137.1
169.7
183.8
9.2
14.6
19.9
24.3
24.0
2.3
2.8
3.5
4.5
5.2
2.7
2.6
2.7
2.5
3.1
1.3
1.3
1.5
2.1
2.8
4.0
4.5
4.3
4.5
4.7
.4
.5
.5
.5
.5
78.3
95.3
122.7
150. 3
165.9
1949
182.7
180.3
198. 7
223. 5
216.3
19.2
18.3
24.7
31.7
29.2
6.1
6.0
5.7
5.2
5.7
5.6
10.9
11.1
10.5
11.6
3.7
4.4
4.4
4.5
4.6
4.7
5.8
6.6
7.2
7.5
.5
.6
.7
.7
.8
171.9
177.7
191.0
209.5
205.9
1950
1951
1952 ..
1953 » . _ _
240.6
278.4
291.6
(2)
36.0
42.4
40.2
(2>
6.9
8.2
8.6
8.9
14.3
11.6
12.0
12.8
4.7
4.8
4.9
5.0
9.1
9.2
9.1
9.4
.8
.9
.9
.9
226.7
254.3
269.7
284.6
1931...
1940...
1941 _
.
1942...
1943
1944 ..
1945 .
1946
1947
1948...
0.2
-.2
-.1
Seasonally adjusted annual rates
1952: First half
Second half
287.4
295.9
40.8
39.7
8.6
8.8
1953: First half
Second half *
308.7
(')
44.5
<2)
9.0
8.8
1952: First quarter
Second quarter..
Third quarter....
Fourth quarter. _.
286.8
287.9
290.4
301.4
41.7
39.9
37.7
41.7
8.6
8.6
8.7
8.8
1953: First quarter
Second quarter . _
Third quarter.. ..
Fourth quarter *
306.7
310.7
308.1
C2)
43.8
45.2
40.7
(2)
9.0
9.0
8.8
8.8
0.1
-.2
.1
-.3
11.6
12.3
4.9
4.9
9.1
9.1
0.9
.9
264.4
274.9
12.6
12.9
5.0
5.1
9.3
9.6
.9
.9
283.0
286.2
11.5
11.7
12.2
12.4
4.9
4.9
4.9
4.9
9.1
9.1
9.1
9.1
.9
.9
.9
.9
262.8
266. 0
271.4
278.3
12.6
12.6
12.6
13.2
4.9
5.0
5.1
5.1
9.2
9.4
9.6
9.6
.9
.9
.9
.9
281.6
284.4
286.8
285.7
i Estimates based on incomplete data; fourth quarter by Council of Economic Advisers,
a Not available.
NOTE.—Detail will not necessarily add to totals because of rounding.
Source: Department of Commerce (except as noted).
175
TABLE G-9.—Personal income, 1929-53
[Billions of dollars]
Labor income and transfer payments
Income of unincorporated enterprises
Non- AgriTotal
agri- culperBusiDiviIntercul- tural
sonal
Wage Other TransRents dends est tural
ness
ininand labor fer
inand
come Total salary in- pay- Total pro- Farm 3
come4 come
re- 1 come1 ments
fesceipts
sions 2
Period
1929
85.1
52.0
50.0
0.5
1.5
13.9
8.3
5.7
5.8
5.8
7.5
76.8
8.3
1930
1931
1932
1933
1934
76.2
64.8
49.3
46.6
53.2
47.7
41.9
32.7
31.2
36.0
45.7
38.7
30.1
28.7
33.4
.5
.5
.4
.4
.4
1.5
2.7
2.2
2.1
2.2
11.0
8.2
4.9
5.2
6.6
7.0
5.3
3.2
2.9
4.3
3.9
2.9
1.7
2.3
2.3
4.8
3.6
2.5
2.0
2.1
5.5
4.1
2.6
2.1
2.6
7.1
7.0
6.6
6.2
6.0
70.0
60.1
46.2
43.0
49.5
6.2
4.7
3.1
3.6
3.7
59.9
68.4
74.0
68.3
72.6
39.1
45.6
48.3
45.6
48.6
36.3
41.6
45.4
42.3
45.1
.4
.5
.5
.5
.5
2.4
3.5
2.4
2.8
3.0
9.9
9.9
12.2
10.8
11.3
5.0
6.1
6.6
6.3
6.8
4.9
3.9
5.6
4.4
4.5
2.3
2.7
3.1
3.3
3.5
2.9
4.6
4.7
3.2
3.8
5.7
5.6
5.6
5.5
5.4
53.4
62.8
66.5
62.1
66.3
6.5
5.6
7.5
6.2
6.3
78.3 52.6 48.9
95.3 64.6 60.9
122.7 84.6 80.7
150.3 107.5 103.6
165.9 119.8 114.9
.6
.6
.7
.9
1.3
3.1
3.1
3.2
3.0
3.6
12.7
16.5
23.0
26.7
29.0
7.7
9.6
12.6
15.0
17.2
4.9
6.9
10.5
11.8
11.8
3.6
4.3
5.4
6.1
6.5
4.0
4.5
4.3
4.5
4.7
5.4 71.5
5.4 86.1
5.4 109.4
5.5 135.2
5.9 150.5
6.8
9.2
13.3
15.1
15.4
171.9
177.7
191.0
209.5
205.9
123.0
122.5
134.1
146.2
146.7
115.3
109.2
119.9
132. 1
131.2
1.5
1.9
2.4
2.8
3.1
6.2
11.4
11.8
11.3
12.4
31.2
35.4
35.4
39.8
34.4
18.7
20.6
19.8
22.1
21.6
12.5
14.8
15.6
17.7
12.8
6.3
6.6
7.1
7.5
7.7
4.7
5.8
6.6
7.2
7.5
6.7
7.4
7.9
8.8
9.6
155.7
158.8
170.8
187.1
188.7
16.2
18.9
20.2
22.4
17.2
226.7
254.3
269.7
284.6
161.6
183.2
197.7
212.7
142.6
166.4
180.1
194.0
3.9
4.3
4.7
5.1
15.1
12.5
12:9
13.6
37.0
41.6
40.9
39.1
23.6
26.1
26.1
26.8
13.3
15.5
14.8
12.3
8.5
9.1
10.0
10.6
9.1
9.2
9.1
9.4
10.5
11.3
11.9
12.8
209.0
234.0
249.9
267.4
17.7
20.3
19.8
17.2
1935
1936
1937
1938
1939
1940
1941
1942
1943
1944
1945
1946
1947
1948
1949
_
_
_—
—
—
—
1950
1951
1952
1953 •
__
Seasonally adjusted annual rates
1952: First half
Second half
264.4 192.9 175.8
274.9 202.5 184.4
4.6
4.9
12.5
13.2
41.0
40.8
26.0
26.2
15.0
14.6
9.8
10.3
9.1
9.1
11.7 244.4
12.1 255.4
20.0
19.5
1953: First half
Second half *
283.0 211.1 192.5
286.2 214.4 195.5
5.1
5.1
13.5
13.8
39.7
38.5
26.8
26.7
12.9
11.8
10.4
10.7
9.3
9.6
12.6 265.2
13.1 269.7
17.8
16.6
1952: First quarter
Second quarter
Third quarter
Fourth quarter
262.8
266.0
271.4
278.3
191.9
193.8
199.0
206.1
175.0
176.6
181.1
187.7
4.5
4.6
4.8
5.1
12.4
12.6
13.1
13.3
40.6
41.4
41.1
40.5
25.9
26.1
25.9
26.5
14.7
15.3
15.2
14.0
9.6
10.0
10.2
10.3
9.1
9.1
9.1
9.1
11.6
11.8
12.0
12.2
243.2
245.6
251.2
259.5
19.6
20.4
20.2
18.8
281.6
284.4
286.8
285.7
209.3
212.8
215.4
213.4
190.7
194.2
196.8
194.2
5.1
5.1
5.1
5.1
13.5
13.5
13.5
14.1
40.2
39.1
38.3
38.7
26.8
26.8
26.7
26.7
13.4
12.3
11.6
12.0
10.4
10.4
10.6
10.8
9.2
9.4
9.6
9.6
12.5
12.7
13.0
13.2
263.3
267.1
270.3
269.1
18.3
17.3
16.5
16.6
1953: First quarter
Second quarter
Third quarter
Fourth quarter
fl
1 The total of wage and salary receipts and other labor income differs from compensation of employees in appendix table G-7 in that it excludes employer and employee contributions for social insurance and includes the excess
of wage disbursements over wage accruals. Other labor income consists of compensation for injuries, employer contributions to private pension and welfare funds, pay of military reservists, directors' fees, jury and witness fees,
compensation of prison inmates, Government payments to enemy prisoners of war, marriage fees to justices of the
peace, and merchant marine war-risk life and injury claims.
2 Contributions of self-employed persons for social insurance, which became effective in January 1952, have been
excluded in 1952 and 1953. Therefore, these totals will differ from total proprietors' and rental income included in
appendix
table G-7.
3
Data are subject to revisions already reflected in appendix table G-14.
4
Nonagricultural income is personal income exclusive of net income of unincorporated farm enterprises, farm
wages, agricultural net rents, agricultural net interest, and net dividends paid by agricultural corporations.
' Estimates based on incomplete data; fourth quarter by Council of Economic Advisers.
NOTE.—Detail will not necessarily add to totals because of rounding.
Source: Department of Commerce (except as noted).
176
TABLE G—10.—Disposition of personal income, 1929—53
Less:
Equals:
Less:
Equals:
Personal Personal Dispos- Personal
conPersonal
income tax and
able
net
nontax personal sumption
expendisaving
payments income
tures
Period
Net
saving as
percent
of disposable
personal
income
Billions of dollars
85.1
2.6
82.5
78.8
3.7
4.5
1930
1931
1932
1933
1934
76.2
64.8
49.3
46.6
53.2
2.5
1.9
1.5
1.5
1.6
73.7
63.0
47.8
45.2
51.6
70.8
61.2
49.2
46.3
51.9
2.9
1.8
-1.4
-1.2
— 2
3.9
2.9
-2.9
-2.7
—.4
1935
1936 . _
1937
1938
1939
59.9
68.4
74.0
68.3
72.6
1.9
2.3
2.9
2.9
2.4
58.0
66.1
71.1
65.5
70.2
56.2
62.5
67.1
64.5
67.5
1.8
3.6
3.9
1.0
2.7
3.1
5.4
5.5
1.5
3.8
78.3
95.3
122.7
150.3
165.9
2.6
3.3
6.0
17.8
18.9
75.7
92.0
116.7
132.4
147.0
72.1
82.3
91.2
102.2
111.6
3.7
9.8
25.6
30.2
35.4
4.9
10.7
21.9
22.8
24.1
171.9
177.7
191.0
209.5
205.9
20.9
18.8
21.5
21.1
18.6
151.1
158.9
169.5
188.4
187.2
123.1
146.9
165.6
177.9
180.6
28.0
12.0
3.9
10.5
6.7
18.5
7.6
2.3
5.6
3.6
226.7
254.3
269.7
284.6
20.9
29.3
34.6
36.6
205.8
225.0
235.0
248.0
194.6
208.1
218.1
229.9
11.3
16.9
16.9
18.1
5.5
7.5
7.2
7.3
1929
1940
1941 _
1942
1943
1944
_
.
.
1945
1946
1947
1948
1949
.
_
_
1950
1951
1952
1953 i .
Seasonally adjusted annual rates
1952: First half..
Second half
1953: First half 1
Second half .
1952: First quarter ..
Second quarter
Third quarter
Fourth quarter
1953: First quarter
Second quarter
Third quarter l
Fourth quarter
.
_
264.4
274.9
34.3
35.1
230.2
239.8
215.5
220.8
14.8
19.0
6.4
7.9
283.0
286.2
36.5
36.8
246.6
249.4
229.1
230.8
17.5
18.7
7.1
7.5
262.8
266.0
271.4
278.3
34.2
34.3
34.8
35.3
228.7
231.7
236.6
243.0
213.7
217.2
217.2
224.4
15.0
14.5
19.4
18.6
8.2
281.6
284.4
286.8
285.7
36.2
36.7
37.0
36.6
245.4
247.7
249.8
249.1
227.7
230.4
231.0
230.5
17.7
17.2
18.8
18.6
7.2
6.9
7.5
7.5
i Estimates based on incomplete data; fourth quarter by Council of Economic Advisers.
NOTE.—Detail will not necessarily add to totals because of rounding.
Source: Department of Commerce (except as noted).
177
6.6
6.3
7.7
TABLE G—11.— Total and per capita disposable personal income in current and 1953 pricest 1929—53
Total disposable personal
income (billions of dollars)
Per capita disposable personal income (dollars)
Period
Current
prices
1953 prices 1
Current
prices
Population
(thousands) a
1953 prices *
1929
82.5
129.1
677
1,059
121, 881
1930
1931
1932
1933._._
1934
73.7
63.0
47.8
45.2
51.6
120.4
115.2
99.2
98.3
106.2
598
507
383
360
408
977
928
794
782
840
123, 188
124. 149
124, 949
125, 690
126, 485
1935
1936-..
1937
1938
1939
58.0
66.1
71.1
65.5
70.2
116.7
131.9
137.0
129.2
139.8
455
516
551
504
536
916
,029
,062
994
,067
127,362
128, 181
128.961
129, 969
131, 028
75.7
92.0
116. 7
132.4
147.0
149.3
171.3
193.2
200.9
212.7
573
690
866
968
1,062
,130
.284
,433
,469
,537
132.114
133,377
134, 831
136. 719
138,390
151.1
158.9
169.5
188. 4
187.2
211.0
206.6
200.6
211.4
212.5
,080
,124
,176
,285
,255
,508
,461
,392
,442
,424
139, 934
141,398
144, 129
146. 621
149, 188
205.8
225.0
235.0
248.0
228 9
232.7
238.1
248.0
1,357
1,458
1.497
1,553
,509
,508
,517
,553
151, 677
154, 360
156, 981
159, 696
1940
1941
1942
1943
1944
.
;_ _
_. .
1945
1946
1947
1948
1949
1950 .
1951
1952
19533
.
Seasonally adjusted annual rates
1952: First half
Second, half
230. 2
239.8
234.0
242.2
1,472
1,520
1,496
1,535
156,371
157,768
1953: First half 3
Second half
246.6
249.4
248.1
247.9
1,550
1,555
1,560
1,545
159.068
160,485
228.7
231.7
236.6
243.0
233. 4
234. 8
239.2
245.0
1, 4G5
1,479
1, 503
1,537
1,496
1,499
1,520
1,549
156, 063
156, 669
157,370
158, 122
245.4
247.7
249.8
249.1
247.6
248.4
248.6
247.4
1,546
1,554
1,560
1,549
1,560
1,559
1,553
1,538
158, 752
159, 367
160,094
160,859
1952: First quarter _ _
Second quarter
Third quarter
Fourth quarter
1953: First quarter _
Second quarter
Third quarter 3
Fourth quarter
-..
.
1
Dollar estimates in current prices divided by an over-all implicit price index for personal consumption
expenditures.
* Population of continental United States including armed forces overseas. Annual data are as of July 1;
quarterly
and semiannual data as of middle of period.
8
Estimates based on incomplete data; fourth quarter by Council of Economic Advisers.
NOTE.—Detail will not necessarily add to totals because of rounding.
Source: Department of Commerce (except as noted).
178
TABLE G-12.—Liquid saving by individuals, 7939-53 *
[Billions of dollars]
Insurance and
Liquf.
Securities
Savpension reserves
Liqui- dation
ings
of
Total
and
debt
liquid bank loan
not
U. S. Other Cor- mortsaving
gov- porate gage elsede- assoPri- Govcia- Total vate
ern- Total a savings ern- and debt* where
posits 2 tions
ment
classibonds ment* other
fied*
Cur-
Period
+4.25 +3.00 +.04 +3 01 +1.72 +1.30
1939
-.53
+.66 —.83 -.36
+ 20 +3 14 +1 85 +1 30 —.17 +.86 —.81
+.36 +4.01 +2 14 +1.86 +2.83 +2.75 +.44
+.26 +5.04 +2.49 +2. 55 +10. 25 +7.98 +2.17
+ 55 +6 77 +2 85 +3 92 +13. 83 +11.14 +2 88
+.81 +8.17 +3 21 +4.96 +14. 96 +11. 80 +3.89
—.50 —.78
1940
1941
1942
1943
1944 . ..
-H 24
+10. 52
+29. 30
+38. 71
+41. 41
1945
1946
1947
1948
1949
+37. 39 +19.06 +1.06 +8.59 +3 46 +5.14
+13. 74 +10. 56 +1.18 +6.97 +3.42 +3.55
+6 67 +2 01 +1 20 +7 13 +3 64 +3 49
+2.99 —1.84 l.21 +7 32 +3 75 +3.57
+2.86 -1.46
1.51 +6.05 +3.71 +2.34
1950
1951
1952
+1.71 +4.33 +1.51 +5.01 +3.92 +1.08 +1.24
+11.81 +5.67 +2.10 +8. 23 +4.05 +4.19 +2.75
+14.36 +7.08 +3.14 +9.10 +4 80 +4.30 +4.81
+. 55 —.66 +1.34 -7.15 —3.22
-.41 -.05 +3.20 -6.40 —.54
+.32 +.58 +3.90 —5.98 —3.78
1952: First half
Second half
+3.88 —1.03 J-l. 59 +4.84 +2 22 +2 62 +2.09
+10. 48 +8.10 +1.55 +4.27 +2.58 +1.69 +2.73
+.06 +.10 +1.93 —2.70 —.90
+.26 +.49 +1.98 -3.29 -2.89
—.71 +1.97 +4.16 +2.29 +1.87 +5.13
+.12 +3.29 +1.73 —2.94 —1.51
+2 88
+4.80
+10.95
+16 18
+17. 55
t
1953: First half
+6.11
1952: First quarter... .
Second quarter.
Third quarter..
Fourth quarter.
+2.46
+1.42
+5. 18
+5. 30
-1.93 +.73
+.90 +.86
+3.61 +.55
+4.49 +1.00
+2.46 +1.20
+2.38 +1.02
+2.13 +1.18
+2.14 +1.40
+9.36
+.89
+3.51
+3.22
+3.03
+1.26 +1.84
+1.36 +.25
+.95 +1.43
+.74 +1.30
1953: First quarter... +2.66 -1.35 +.91 +2.10 +1.22 +.88 +2.55
Second quarter. +3. 45 +.64 +1.06 +2.06 +1.07 +.99 +2.58
Third quarter.. +3.29 +1.58 +.61 +2.05 +1.17 +.88 +1.20
— 22
—.36
+.09
—.20
-.73
+6.85 +3.44 —.92
+.90 -.65 +.65
+1.78 + 89 + 84
+2.13 -.43 +1.52
+1.53 +.52 +.98
+.07
-.01
+.08
+.18
+.86 +.91
-.76 +1.02
+.45 +.90
+.04 +1.08
— 84 — 97
—.82 —.66
—.09 +2.89
+ 38 +1 01
+.06 —.14
— 20
—3.60
—4 46
—4 61
—3.87
—.48
—2.28
—2 73
—2.31
—2.40
-1.29 +.66
-1.41 -1.56
-1.65 -.89
-1.64 -2.00
+.41 +1.55 +.60 -1.27 -.29
-.29 +1.74 +1.13 -1.67 -1.22
+.06 +.31 +.83 -1.63 -.53
i Individuals' saving in addition to personal holdings, covers saving of unincorporated business, trust
and pension funds, and nonprofit institutions in the forms specified. Liquid saving comprises saving in
the form of currency and bank deposits, equity in savings and loan associations, private and Government
insurance,
securities, and repayment of mortgage debt and other consumer debt.
a
Includes currency, demand deposits, and time and savings deposits.
8 Does not include net purchases by brokers and dealers or by other individuals financed by bank loans.
• Includes armed forces leave bonds and other U. S. Government bonds (.except savings bonds) and
all securities issued by State and local governments.
• Mortgage debt to institutions on 1- to 4-family nonfarm dwellings.
• Largely attributable to purchases of automobiles and other durable consumers' goods, although including some debt arising from purchases of consumption goods. The other segments of individuals' debt
have been allocated to the assets to which they pertain, viz, saving in insurance and securities.
NOTE.—In addition to the concept of liquid saving shown above, there are other concepts of individuals'
saving with varying degrees of coverage currently in use. The series with the most complete coverage, the
personal saving estimates of the Department of Commerce, is derived as the difference between personal
income and expenditures. Conceptually, Commerce saving includes the following items not included
with SEC liquid saving: Housing net of depreciation, unincorporated business and farm items, such as
net plant and equipment, changes in net receivables, and changes in inventories. Government insurance
is excluded from the Commerce saving series. For a reconciliation of the two series, see table 6 of A Supplement to the Survey of Current Business, National Income, 1951 edition, and table 6 of the Survey of Current
Business, July 1953.
Source: Securities and Exchange Commission.
179
TABLE G-13.—Sources and uses of gross saving, 1929-53
[Billions of dollars)
Government surplus
or deficit (— ) on
Income and product
transactions
Gross private saving
Period
Total
1929
_.
1930
1931
1932
1933
1934
_
-- -
1935
1936
1937
1938
1939
1940
1941
1942
1943
1944
1945
1946
1947
1948
1949
1950
1951
1952
19532
__
- -
_
-- -- - -
__
- - _
.
_
__
_
Gross StatisPerState
busitical
sonal
and
ness discrep- Total Federal local
saving saving
ancy
Gross investment
Gross
private Net fordomesinTotal tic in- eign
vestvestment
ment
1.1
1.2
-0.1
0.8
L2
1.4
1.2
.9
.3
-2.1
-1.5
-1.3
-2.8
-.5
-.7
-.2
0)
.5
16.6
10.9
5.6
1.1
1.5
3.2
15.8
-.3
-2.8
-1.7
-1.3
-2.4
10.2
5.4
.9
1.3
2.8
.7
.2
.2
.2
.4
6.5
6.7
7.9
8.0
8.6
-.3
.9
-1.0
-.1
1.4
-1.8
-2.9
.7
-1.5
-1.9
-2.5
-3.5
-.2
-2.0
-2.2
.7
.6
.9
.5
.3
6.1
8.2
11.5
7.4
10.8
6.1
8.3
11.4
6.3
9.9
-.1
—. 1
.1
1.1
.9
3.7
9.8
25.6
30.2
35.4
10.7
11.6
13.9
16.3
17.5
1.6
1.6
2.3
.9
4.0
-.5
-3.5
-31.2
-43.9
-51.4
-1.4
-4.9
-32.9
-46.4
-54.0
.9
1.4
1.8
2.5
2.6
15.5
19.5
10.7
3.5
5.6
13.9
18.3
10.9
5.7
7.7
1.5
1.1
-.2
-2.2
-2.1
48.5
28.7
25.3
36.4
37.0
28.0
12.0
3.9
10.5
6.7
15.7
15.0
21.1
29.1
30.2
4.9
1.7
.3
-3.2
.2
-39.2
4.6
13.7
8.2
-3.1
-41.8
2.6
12.9
8.5
-2.0
2.6
2.0
.9
-.3
-1.0
9.3
33.3
39.1
44.6
34.0
10.7
28.7
30.2
42.7
33.5
-1.4
4.6
8.9
1.9
.5
42.0
51.8
54.7
55.8
11.3
16.9
16.9
18.1
30.3
33.8
37.4
38.9
.4
1.1
.5
-1.3
8.3
7.1
-2.4
-2.0
9.6
7.5
-2.4
-2.2
-1.3
-.4
-.1
.2
50.2
58.8
52.3
53.8
52.5
58.6
52.5
55.7
-2.3
.3
—.2
-1.9
15.5
3.7
11.9
11.2
8.4
2.8
2.7
5.6
2.9
1.8
-1.4
-1.2
-.2
9.0
5.3
2.7
2.7
5.0
7.9
11.1
10.8
8.9
12.7
1.8
3.6
3.9
1.0
2.7
16.0
23.0
41.8
47.4
57.0
-0.1
__ rj
Seasonally adjusted annual rates
1952: First half
Second half _
52.7
56.8
14.8
19.0
37.0
37.7
0.9
.1
1953* First half 2
Second half
55.8
(')
17.5
18.7
39.3
(3)
-.9
(3)
1952: First quarter
Second quarter _
Third quarter
Fourth quarter
51.6
53.8
53.8
59.8
15.0
14.5
19.4
18.6
36.6
37.5
35.8
39.6
1953* First quarter
Second quarter. .
Third quarter 2
Fourth quarter
54.5
57.2
55.7
(')
17.7
17.2
18.8
18.6
38.5
40.0
37.0
(»)
s7
-0.8
-4.0
-0.6
.4
51.3
53.3
50.0
55.1
1.3
-1.8
-1.0
(')
.3
(3)
55.0
52.4
57.3
53.9
-2.3
-1.6
.0
1.8
-1.4
1.6
1.0
-3.6
-3.6
-3.4
1.8
-3.4
-4.1
-3.?
-.80
.5
.3
62.5
50.1
50.3
56.3
50.4
49.6
52.3
57.9
2.1
.5
-2.0
-1.6
-1.7
.0
-.1
(»)
-1.0
-.4
-1.6
(»)
-.3
-1.6
-2.3
(»)
—.7
1.2
.8
0
53.3
56.8
54.2
50.5
55.4
59.3
56.3
51.5
-2.1
-2.5
-2.1
-1.0
-1.3
-3.5
1 Less than 50 million dollars.
2 Estimates based on incomplete data; fourth quarter by Council of Economic Advisers.
* Not available.
NOTE.—Detail will not necessarily add to totals because of rounding.
Source: Department of Commerce (except as noted).
180
TABLE G—14.—Realized gross and net income of farm operators from farming, 1935—39 average
and 1940-53»
Realized net farm income
Period
Realized Farm
gross producfarm in- tion excome
penses
Amount Percent
of
realized
gross
income
Millions of dollars
Realized net income per farm
Realized net income per farmfamily worker
Purchasing
power in
Purchasing
1935-39a
dollars Amount power in Amount
1935-39a
dollars
Millions
of dollars
Purchasing.
power in
1935-39
dollars *
1935-39 average
10, 372
5,742
«4,630
44.6
4,630
$698
$698
$507
$507
1940
1941
1942 . _
1943
1944
10, 920
13, 707
18, 592
22, 870
24, 113
6,622
7,655
9,743
11, 330
12, 143
4,298
6,052
8,849
11, 540
11, 970
39.4
44.2
47.6
50.5
49.6
4,386
5,764
7,374
8,612
8,489
677
962
1,427
1,895
1,994
691
916
1,189
1,414
1,414
518
755
1,113
1,441
1,498
528
719
928
1,075
1,063
1945
1946
1947- ._
1948
1949
25,323
28, 967
34, 002
34, 520
31, 763
13, 037
14, 774
17, 228
18, 916
18, 170
12, 286
14, 193
16, 774
15,604
13, 593
48.5
49.0
49.3
45.2
42.8
8,358
8,707
8,782
7,725
6,935
2,059
2,394
2,856
2,688
2,375
1,401
1,469
1,495
1,331
1,211
1,559
1,751
2,067
1,944
1,763
1,061
1,074
1,082
962
899
1950 .
1951
1952
1953 <
32,066
36, 962
36, 526
35, 100
19, 704
22, 317
23, 027
22,600
12, 362
14, 645
13, 499
12,500
38.6
39.6
37.0
35.6
6,243
6,780
6,164
5,730
2,189
2,617
2,439
2,270
1,106
1,212
1,114
1,040
1,705
2,093
2,000
1,880
861
969
913
860
1
Includes Government payments but, unlike the net farm income series of appendix tables G-7 and G-9,
excludes changes in farm inventories. Based on the latest revisions of the series on cash receipts from farm
marketings and production expenses, which the farm income series of appendix tables G-7 and G-9 have not
yet taken fully into account. Realized net income per farm-family worker computed by Council of
Economic Advisers.
* Dollar estimates in current prices divided by the index of prices paid by farmers for family living items
converted from the reported base 1910-14=100 to the base 1935-39=100.
a Realized net farm income for 1939 (used in computing relatives in appendix table G-53) was 4,261 million
dollars.
4 Estimates based on incomplete data.
Source: Department of Agriculture (except as noted).
181
EMPLOYMENT AND WAGES
TABLE G-15.—Total population 74 years oj age and over and the labor force, 1929-53
Total
labor
force
Total
popu- (includ- Armed
forces i
lation »
ing
armed
forces)1
Period
Civilian labor force
Employment 8
Total
NonagriTotal Agricultural cultural
Total
labor
force as
percent
Unem- of total
ploypopument
lation
Unemployment as
)ercent
of civilian
labor
force
Thousands of persons 14 years of age and over
Monthly average: «
1929
87, 910
49, 440
260
49, 180
47,630
10,450
37, 180
1,550
56.2
3.2
1933
1934
89. 440
90,600
91, 700
92, 840
94, 080
50, 080
50, 680
51, 250
51, 840
52, 490
260
260
250
250
260
49, 820
50,420
51,000
51,590
52,230
45, 480
42. 400
38, 940
38.760
40,890
10, 340
10.290
10, 170
10.090
9,900
35, 140
32.110
28, 770
28, 670
30,990
4,340
8,020
12, 060
12, 830
11, 340
56.0
55.9
55.9
55.8
55.8
8.7
15.9
23.6
24 9
21.7
1935
1936
1937
1938
1939
95,350
96. 580
97, 740
98, 980
100, 210
53, 140
53, 740
54, 320
54. 950
55, 600
270
300
320
340
370
52, 870
53,440
54,000
54.610
55, 230
42, 260
44. 410
46. 300
44, 220
45, 750
10,110
10,000
9,820
9,690
9,610
32, 150
34,410
36. 480
34, 530
36, 140
10, 610
9,030
7,700
10.390
9,480
55.7
55.6
55.6
55.5
55.5
20.1
16.9
14.3
19.0
17.2
1940
1941
1942...
1943
1944
101, 490
102, 640
103. 690
104, 750
105, 750
56, ISO
57. 530
60,380
64, 560
66, 040
540
1,620
3,970
9,020
11, 410
55, 640
55. 910
56,410
55, 540
54.630
47. 520
50.350
53, 750
M. 470
53,960
9,540
9,100
9,250
9,080
8,950
37, 980
41. 250
44, 500
45. 390
45, 010
8,120
5,560
2.660
1,070
670
55.4
56.1
58.2
61.6
62.4
14.6
9.9
4.7
1.9
1.2
106, 620
107, 590
108, 831
109, 924
111, 095
65, 290
60.970
61, 758
62. 898
63, 721
11, 430
3,450
1,590
1,456
1,616
53,860
57, 520
60, 168
61, 442
62, 105
52. 820
55. 251
58,027
59. 378
58, 710
8,580
8,320
8. 266
7.973
8,026
44, 240
46, 930
49. 761
51, 405
50,684
1,040
2,273
2,142
2,064
3,395
61.2
56.7
56.7
57.2
57.4
1.9
4.0
3.6
3.4
5.5
112, 237
1 13, 382
114, 589
116, 576
64. 749
65, 982
66, 560
66,965
1,650
3,098
3,594
3,547
63,099
62. 884
62, 966
63,417
59. 957
61,005
61, 293
61, 894
7,507
7,054
6,805
6,528
52. 450
53. 951
54, 488
55,366
3,142
1,879
1,673
1,523
57.7
58.2
58.1
57.4
5.0
3.0
2.7
2.4
114, 275
114, 925
65,945
67, 175
3,604
3,584
62, 341
63, 591
60, 512
62, 075
6,634
6,976
53,878
55, 099
1,829
1,516
57.7
58.5
2.9
2.4
116,272
116,893
66. 670
67, 260
3,542
3,553
63, 128
63, 706
61,494
62,294
6,154
6,902
55, 340
55, 392
1,634
1,412
57.3
57.6
2.6
2.2
114, 002
114,095
114,193
114,275
114,377
114,481
114, 589
114,696
114,805
114,925
115,030
115, 134
•
65. 241
65, 378
65, 156
65,410
66,448
68. 034
67, 792
67, 569
67, 316
66,716
67, 197
66,459
3,461
3.540
3,638
3, 666
3,670
3,644
3,616
3,611
3,618
3.570
3,551
3,538
61, 780
61,838
61,518
61,744
62, 778
64.390
64.176
63,958
63,698
63, 146
63, 646
62,921
59, 726
59, 752
59,714
60. 132
61. 176
62. 572
62.234
62, 354
62, 260
61,862
62, 228
61, 509
6,186
6,064
6.012
6,412
6,960
8,170
7,598
6.964
7,548
7,274
6,774
5,697
53, 540
53, 688
53, 702
53, 720
54, 216
54, 402
54,636
55. 390
54, 712
54, 588
55,454
55,812
2,054
2,086
1,804
1,612
1, 602
1.818
1,942
1,604
1, 438
1, 284
1,418
1,412
57.2
57.3
57.1
57.2
58.1
59.4
59.2
58.9
58.6
58.1
58.4
67.7
3.3
3.4
2.9
2.6
2.6
2.8
3.0
2.5
2.3
2.0
2.2
2.2
1930
1931
1932..
1945
1946
1947
1948
1949
.- -
1950
1951
1952
1953*
1952: First half.
Second half
4
1953' First half 4
Second half
1952* January
February
March
April
May
July
August
_
September
October
November
December
.. _
See footnotes at end of table.
183
TABLE G—15.— Total population 14years of age and over and the labor force, 1929—53—Con.
Civilian labor force
Total
labor
Armed
Total
force
popu- (includ- forces i
lation i
ing
armed
forces)i
Period
Employment 2
Total
UnemployNonment
agriTotal Agricultural cultural
UnemTotal
ploylabor ment as
force as percent
percent of civilian
of total
popu- labor
lation
force
Thousands of persons 14 years of age and ov er
1953: January *. _ _
February
March.
April
May
_
June
July ...
August
September _.
October
November..
December...
115, 635
115, 923
116, 199
116, 272
116, 375
116,476
116,576
116,676
116, 786
116,893
116,988
117, 078
65, 959
66,255
66,679
66, 338
66, 497
68,290
68, 258
68, 238
67, 127
66, 954
66,874
66, 106
3,543
3, 543
3,545
3,528
3,533
3,556
3,590
3,590
3,575
3.550
3,520
3,492
62,416
62, 712
63, 134
62, 810
62, 964
64,734
64,668
64,648
63, 552
63, 404
63,353
62, 614
60, 524
60, 924
61, 460
61, 228
61. 658
63, 172
63, 120
63, 408
62, 306
62, 242
61, 925
60, 764
5,452
5, 366
5,720
6,070
6,390.
7,926
7,628
7,274
7, 262
7,159
6,651
5,438
55, 072
55, 558
55, 740
55, 158
55,268
55, 246
55, 492
56, 134
55, 044
55, 083
55, 274
55, 326
1,892
1,788
1,674
1, 582
1,306
1,562
1,548
1,240
1,246
1,162
1,428
1,850
3.0
2.9
2.7
2.5
2.1
2.4
2.4
1.9
2.0
1.8
2.3
3.0
57.0
57.2
57.4
57.1
57.1
58.6
58.6
58.5
57.5
57.3
57.2
56.5
1 Data for 1940-52 revised to include about 150,000 members of the armed forces who were outside of the
continental United States in 1940 and who were, therefore, not enumerated in the 1940 Census and were
excluded from 1940-52 estimates.
2 Includes part-time workers and those who had jobs but were not at work for such reasons as vacation,
illness, bad weather, temporary layoff, and industrial disputes.
3 Monthly averages except for population, which are estimates for the middle of the period. See appendix
table G-ll for total population.
* See Monthly Report on the Labor Force, March and September 1953, series P-57, Nps. 129 and 135,
respectively for revisions in estimating procedure. In order to make the data beginning with January 1953
comparable with prior months, the following adjustments should be made:
[Thousands of persons 14 years of age and over]
Employment
Total labor
Period of year
January
February
March- August
S eptember-D ecember
First-half average
Second-half average
Annual average . _ _ - _
ulation
_ ___
-200
-400
-600
-600
—505
-600
-560
civilian
labor force
-130
—260
-400
-400
-335
-400
-375
Total
-130
—260
-400
-400
-335
-400
-375
Agricultural
-80
-160
—250
-450
-210
-380
-300
Nonagricultural
-50
-100
-150
+50
-125
-20
-75
NOTE.—Labor force data are based on a survey made during the week which includes the 8th of
the month. Monthly population data are for the 1st of the month.
Detail will not necessarily add to totals because of rounding.
Sources: Department of Commerce, Department of Labor, and Council of Economic Advisers.
,284874—54
13
183
TABLE G—16.—Labor force, employment, and unemployment: Total, males 20 to 64 years of age,
and all others, 1929-53
[Thousands of persons 14 years of age and over]
Employed
Civilian labor force *
Period
Monthly average:
1929
1930
1931...
1932
1933
1934 _
1935
1936
1937
1938
1939..
..
..
1940
1941...
1942
1943
1944
„
Unemployed
Total
Males,
20 to 64
years
All
others
Total
Males,
20 to 64
years
All
others
49, 180
(2)
(2)
47, 630
(2)
(2)
49, 820
50, 420
51, 000
51, 590
52, 230
(22)
()
(22)
(2 )
()
8
8( )
45, 480
42,400
38, 940
38, 760
40, 890
(22)
(2 )
(2)
()
2
52, 870
53, 440
54, 000
54, 610
55, 230
(2)
( 22)
()
(22 )
(22)
()
(22)
()
(2)
42, 260
44,410
46, 300
44, 220
45, 750
(2)
(2)
55, 640
55, 910
56, 410
55, 540
54, 630
2
()
3
3
34, 870
34, 390
34, 200
30, 810
29, 690
3
3
20, 770
21, 520
22, 21 0
24, 730
24, 940
47, 520
50, 350
53, 750
54, 470
53, 960
i( )
()
2
((222))
(2 )
8
()
2
3
3
29, 830
31, 200
32. 870
30, 450
29, 460
3
3
Total
Males,
All
20 to 64 others
years
1,550
(2)
(2)
4,340
8,020
12, 060
12, 830
11, 340
(22)
()
(22 )
(2 )
()
(2)
(22)
()
(22)
()
(22)
(2)
( 2)
(2)
()
(2)
(22)
(2)
( 2)
()
()
10, 610
9,030
7,700
10,390
9,480
17, 690
19, 150
20, 880
24, 020
24, 500
8,120
5,560
2,660
1,070
670
3
8
5, 040
3, 190
1,330
360
(2)
3
3
3, 080
2, 370
1,330
710
(2)
63, 860
57, 520
60, 168
61, 442
62, 105
29. 420
35, 720
37, 822
38. 303
38, 569
24, 440
21, 800
22, 346
23, 139
23, 536
52, 820
55, 251
58, 027
59, 378
58, 710
28, 920
34, 168
36, 567
37, 206
36, 639
23, 900
21, 082
21, 460
22, 172
22, 071
1,040
2,273
2,142
2,064
3,395
(2)
1,548
1,256
1,099
1,929
(2)
725
886
965
1,466
1950
1951
1952 4
1953
63, 099
62, 884
62, 966
63, 417
38, 863
38, 186
38, 144
38, 673
24, 236
24, 698
24, 822
24, 744
59, 957
61, 005
61, 293
61, 894
37, 158
37, 351
37. 366
37, 878
22, 799
23, 654
23, 927
24, 016
3,142
1,879
1,673
1,523
1,704
835
776
795
1,438
1,044
897
728
1952: First half. _.
Second half.
62, 341
63, 591
38, 065
38, 221
24, 277
25,370
60, 512
62, 075
37, 191
37, 541
23, 321
24, 533
1,829
1,516
874
679
956
837
1953: First half...
Second half *_
63, 128
63, 706
38, 598
38, 748
24, 530
24, 958
61, 494
62, 294
37, 726
38, 029
23, 768
24, 266
1,634
1,412
872
719
762
694
1952: January
February
March
April
May
June
July
August
September
October
November
December
61, 780
61, 838
61, 518
61, 744
62, 778
64, 390
64, 176
63, 958
63, 698
63, 146
63, 646
62, 921
37, 926
37, 976
37, 996
38, 022
38, 134
38, 334
38, 412
38, 316
38, 124
38, 078
38, 076
38, 317
23, 854
23, 862
23, 522
23, 722
24, 644
26, 056
25,764
25,642
25, 574
25, 068
25, 570
24, 604
59, 726
59, 752
59, 714
60, 132
61, 176
62, 572
62, 234
62, 354
62, 260
61, 862
62, 228
61, 509
36, 856
36, 938
37, 058
37, 250
37, 430
37, 614
37, 558
37, 586
37, 494
37, 556
37, 470
37, 583
22, 870
22, 814
22, 656
22, 882
23, 746
24, 958
24, 676
24, 768
24, 766
24, 306
24, 758
23, 926
2,054
2,086
1,804
1,612
1,602
1,818
1,942
1,604
1,438
1,284
1,418
1,412
1,070
1,038
938
772
704
720
854
730
630
522
606
734
984
1,048
866
840
898
1,098
1,088
874
808
762
812
678
1953- January 4
February
March
April
May
June
Julv
August
September
October
November
December
62, 416
62, 712
63, 134
62, 810
62, 964
64, 734
64, 668
64, 648
63, 552
63, 404
63, 353
62, 614
38, 340
38, 494
38, 666
38, 610
38, 670
38, 810
38, 918
38. 912
38, 698
38, 504
38, 659
38, 797
24, 076
24, 218
24, 468
24, 200
24, 294
25, 924
25, 750
25, 736
24, 854
24, 900
24, 694
23, 817
60, 524
60, 924
61, 460
61, 228
61, 658
63, 172
63, 120
63, 408
62, 306
62, 242
61, 925
60, 764
37, 252
37, 512
37, 800
37, 708
37, 956
38, 130
38, 198
38, 310
38, 085
37, 952
37, 908
37, 719
23, 272
23, 412
23, 660
23, 520
23, 702
25, 042
24, 922
25, 098
24, 221
24, 290
24, 017
23, 045
1,892
,788
,674
,582
,306
,562
,548
,240
,246
,162
1,428
1,850
1,088
982
866
902
714
680
720
602
612
551
751
1,077
804
806
808
680
592
882
828
638
634
611
677
773
1945 ..
1946
1947
1948
1949
._
1 Includes part-time workers and those who had jobs but were not at work for such reasons as vacation,
illness, bad weather, temporary layoff, and industrial disputes.
2 Not available.
3
Since figures for the 20-64 age group are not available, those for the 14-55 age group were used.
* Not entirely comparable with earlier data; see appendix table G-15, footnote 4.
NOTE.—Detail will not necessarily add to totals because of rounding.
Sources: Department of Labor (1929-39) and Department of Commerce (1940-53).
184
TABLE G—17.—Employed persons with a job but not at work, by reason for not working, 1946—53
[Thousands of persons 14 years of age and over]
Period
Monthly average:
Total employed persons with
a job but
not at
work
Economic reasons
Total
Temporary
layoff i
New job
or business 2
All other
reasons 3
1946
1947
1948
1949
2,258
2,474
2,751
2,530
155
215
262
286
97
123
141
185
58
92
121
101
2,103
2,259
2,489
2,244
1950
1951
1952
1953
2,648
2,680
2,814
2,682
208
220
259
241
92
117
142
142
116
103
117
100
2,440
2,460
2, 555
2,440
Second half
3,238
2,389
261
256
157
126
104
130
2,128
2,982
1953: First half
Second half
2,247
3,116
231
252
123
161
108
91
2,016
2,864
1952: First half
1952:
January
February
March
April
May
June
July
August
September
October
November
December
2,182
2,110
2,206
2,136
2,168
3,532
6,156
5,342
2,566
1,944
1,696
1, 725
224
272
234
258
238
340
262
370
336
220
198
152
142
154
142
188
142
174
150
230
94
92
98
94
82
118
92
70
96
166
112
140
242
128
100
58
1,958
1,838
1,972
1,878
1,930
3,192
5,894
4,972
2, 230
1,724
1,498
1,573
1953:
January
February
March
April
May
June
July
August
September
October
November
December
2,358
2,362
1,996
2,168
1,982
2,618
6,126
4,924
2, 696
1,595
1,687
1,671
274
198
176
204
264
270
222
302
278
219
253
238
194
110
84
100
126
122
144
170
141
133
183
195
92
104
138
148
78
132
137
86
70
43
2,084
2,164
1,820
1,964
1,718
2,348
5,904
4,622
2,418
1,376
1,434
1,433
1 Includes persons whofhad been temporarily laid off from their jobs with definite instructions to return
to work within 30 days of layoff.
2 Includes persons who had a new job or business to which they were scheduled to report within the" following 30 days.
|s*
3 Includes persons who were not at work because of bad weather, industrial dispute, vacation, illness, and
all other reasons.
NOTE.—Detail will not necessarily add to totals because of rounding.
Source: Department of Commerce.
185
TABLE G—18.—Unemployed persons by duration of unemployment, 1946—53
Duration of unemployment
Total unemployed
Period
10 weeks
and under
11-26
weeks
Average
duration
of unemOver 26
ployweeks
ment
Thousands of persons 14 years of age and over
Monthly average:
1946
1947
1948
1949
_
Weeks
2,273
2,142
2,064
3,395
i 1, 568
1, 552
1,592
2,381
2564
427
357
758
164
116
256
3,142
1,879
1, 673
1,523
2,061
1,424
1,316
1,222
726
319
274
230
357
137
84
71
12.1
9.7
8.3
7.9
1952: First half. _ .
Second half
1,829
1,516
1,408
1,222
323
224
98
69
8.7
8.0
1953: First half
Second half
1, 634
1,412
1,253
1,192
298
161
83
59
8.7
7.1
2, 054
2,086
1,804
1,612
1,602
1,818
1,942
1,604
1,438
1,284
1,418
1,412
1,638
1,620
1,298
1,116
1,248
1,528
1,650
1,294
1,116
1,016
1,152
1,107
308
372
410
370
254
224
222
252
262
190
212
209
108
94
96
126
100
66
70
58
60
78
54
96
8.9
8.9
9.2
10.1
8.6
6.6
6.8
7.4
8.0
9.0
9.0
8.6
1,892
1,788
1,674
1,582
1,306
1,562
1,548
1,240
1,246
1,162
1,428
1,850
1,474
1,410
1,206
1,194
982
1,254
1,292
1,002
1, 051
963
1,180
1,662
326
292
372
312
266
220
182
176
139
154
192
124
92
86
96
76
58
88
74
62
56
46
55
64
8.9
8.5
9.5
8.9
8.7
7.4
7.2
7.7
6.9
6.8
6.9
7.1
1950
1951
1952
1953
_
.
_
. _
_..
1952' January
February.March
A pril
May
June
July
August
September
October
November
December
_
_
.
_ _
1953* Januarv
February _ _ _ - _
March
April
. -.
May
June
July
August--. _September
_ _
October
November
___
December
_
__._
_ _
1
Under 3 months.
2 3 to 6 months.
3 Not available.
NOTE.—Detail will not necessarily add to totals because of rounding.
Source: Department of Commerce.
186
141
(
\8
8.6
10.0
TABLE G—19.—Insured unemployment under State unemployment insurance programs, by geographic
division, 1939 and 1946-53 1
[Thousands of persons]
Continental
United
States
Period
Weekly average:
1939
1,086.1
1946
1947
1948
1949
East West South East West
New Middle North North At- South South Moun- Pacific
Eng- AtCen- lantic Cen- Cen- tain
land lantic Central
tral tral
tral
98.5 305.9
208.2
73.8
124.7
63.6
60.7
30.2
120.7
410.2
340.9
318.8
599.0
274.5
149.0
159.9
380.9
71.3
48.0
44.2
75.9
86.8 64.1
80.1 50.0
80.1 49.1
176.3 104.4
60.8
42.9
35.8
71.4
18.8
13.5
15.0
29.4
222.6
186.4
190.7
306.1
145.9 466.5
100.9 314.2
100.8 318.6
78.5 303.4
268.9
172.3
188.3
164.4
71.8
45.4
46.2
62.3
134.4
90.9
99.2
107.7
81.8
60.7
69.1
69.0
70.3
42.1
44.7
50.0
29.4
15.1
15.8
20.4
228.3
124.2
136.3
142.4
369.3
268.0
202.1
174.3
58.9
33.4
108.7
90.0
76.3
61.6
53.6
35.7
21.9
9.8
171.3
101.3
1, 294. 5
1,007.9
998.8
1, 970. 0
85.3
97.0
104.8
226.4
1950
1951
1952
1953
1, 497. 5
965.5
1, 018. 9
988.1
1952: First half
Second half
1, 184. 1 121.9
853.6
79.5
1953: First half
Second half
1952: January __
February
March
April....
Mav
June
July
August
September
October
November
December
1953: January
February
March
April
May
June
July
August
September
October
November
December
_ _
_
.
989.4
986.8
77.0
80.0
306.8
299.9
132.4
196.5
58.1
46.5
105.2
110.3
69.2
68.7
53.3
46.5
23.7
17.1
163.6
121.1
, 384. 1
, 284. 1
, 192. 3
, 143. 9
, 075. 5
, 024. 9
, 228. 5
997.6
687.1
631.4
685.8
891.5
123.3
113.1
110.3
135.2
131.5
118.3
116.7
95.5
72.5
60.8
60.4
71.1
415.8
373.2
355.3
359.5
356.4
355.7
383.9
290.3
217.8
211.6
223.4
280.8
259.3
226.1
194.5
184.3
173.0
175.4
321.8
267.3
127.2
102.9
101.9
124.9
76.5
76.1
71.0
59.2
40.7
30.0
40.9
36.6
25.1
23.2
28.7
45.7
116.9
106.8
99.8
104.8
110.1
113.6
128.5
105.3
79.3
70.9
71.3
84.6
81.4
79.1
78.5
74.8
71.8
72.4
83.2
69.4
54.2
50.2
51.9
61.0
58.7
63.3
60.7
53.1
46.4
39.7
41.4
39.1
29.6
27.0
32.6
44.6
30.7
31.9
28.3
18.9
11.4
10.0
9.9
7.7
6.1
6.2
9.6
19.4
221.5
214.0
193.9
154.2
134.3
110.1
101.9
86.7
75.2
78.2
106.0
159.8
1, 155. 9
1,083.6
1, 014. 5
960.6
889.0
832.7
861.1
816.1
779.4
840.0
1,115.1
1, 508. 9
88.2
81.4
76.3
79.6
74.6
61.9
66.6
64.0
66.1
73.1
91.6
118.7
350.9
310.9
301.4
313.5
289.1
275.0
283.8
257.0
251.2
246.2
331.3
430.1
157.9
138.3
122.3
121.2
124.8
130.0
140.2
155.8
152.4
179.3
233.2
318.1
70.2
74.3
68.9
53.6
42.6
39.0
38.1
31.1
32.3
39.8
56.0
81.9
111.7 75.7
105.6 75.0
104.1 71.3
101.0 69.3
103.5 66.2
105.2 57.5
112.5 60.9
101.8 58.7
91.7 52.4
93.8 59.7
113.9 77.4
148.2 103.2
57.2
61.2
58.2
51.0
48.0
44.2
46.2
45.1
37.3
38.5
47.2
64.8
30.7
33.5
29.1
21.1
15.1
12.8
12.7
12.7
11.0
12.8
19.5
33.9
213.2
203.4
182.7
150.4
125.1
107.1
100.0
90.0
85.0
96.6
144.9
209.9
1
Represents weekly average volume of total or partial unemployment during the year for which claims
were filed for waiting period credit or benefit payments. Regional composition: New England—Maine,
New Hampshire, Vermont, Massachusetts, Rhode Island, Connecticut; Middle Atlantic—New York,
New Jersey, Pennsylvania; East North Central—Ohio, Indiana, Illinois, Michigan, Wisconsin; West
North Central—Minnesota, Iowa, Missouri, North Dakota, South Dakota, Nebraska, Kansas; South
Atlantic—Delaware, Maryland, District of Columbia, Virginia, West Virginia, North Carolina, South
Carolina, Georgia, Florida; East South Central—Kentucky, Tennessee, Alabama, Mississippi; West
South Central—Arkansas, Louisiana, Oklahoma, Texas; Mountain—Montana, Idaho, Wyoming, Colorado, New Mexico, Arizona, Utah, Nevada; Pacific—Washington, Oregon, California.
NOTE.—State unemployment insurance programs exclude from coverage agricultural workers, government employees, self-employed persons, domestic servants, workers in very small firms (in most States),
employees in nonprofit organizations, and railroad workers (who have a separate unemployment insurance
system under the Railroad Retirement Board). The data also exclude unemployed veterans filing claims
under the Servicemen's Readjustment Act or the Veterans Readjustment Assistance Act.
Detail will not necessarily add to totals because of rounding.
Source: Department of Labor.
187
TABLE G—20.—Labor turnover rates in manufacturing industries, 1930—53
[Rates per 100 employees]
Separation rates
Discharge, Accession
rates
military,
and miscellaneous *
Period
Total
Monthly average:a
1930
1931
1932
1933
1934
5.0
4.0
4.4
3.8
4.1
Quit*
Layoff
.7
3.0
2.9
3.5
2.7
3.0
.4
.2
.2
.2
.2
3.1
3.1
3.3
5.4
4.7
1935
1936
1937
1938
1939
3.4
4.4
4.1
3.1
1.1
1.3
2.5
2.0
3.0
3.4
2.2
.2
.2
.2
.1
.1
4.2
4.4
3.6
3.8
4.1
1940
1941
1942
1943
1944
3.4
3.9
6.5
7.3
6.8
.9
2.0
3.8
5.2
5.1
2.2
1.3
1.1
.6
.6
.3
.6
1.7
1.5
1.1
4.4
5.4
7.6
7.5
6.1
1945
1946
1947
1948
1949.
8.3
6.1
4.8
4.5
4.3
5.1
4.3
3.4
2.8
1.5
2.3
1.2
1.0
1.3
2.4
6.3
6.7
5.1
4.4
3.5
1950-.
1951
1952
19533
3.5
4.4
4.1
4.3
1.9
2.4
2.3
2.3
1.1
1.2
1.1
1.4
4.4
4.4
4.4
3.9
1952: First half
Second half.__
3.9
4.3
2.1
2.6
1.2
1.0
4.1
4.7
1953: First half 3
Second half _
4.1
4.6
2.5
2.2
.9
1.8
4.4
3.4
1952: January
February
March
April
May
June
July
August
September
October
November
December
4.0
3.9
3.7
4.1
3.9
3.9
5.0
4.6
4.9
4.2
3.5
3.4
1.9
1.9
2.0
2.2
2.2
2.2
2.2
3.0
3.5
2.8
2.1
1.7
1.4
1.3
1.1
1.3
1.1
1.1
2.2
1.0
.7
.7
.7
1.0
4.4
3.9
3.9
3.7
3.9
4.9
4.4
5.9
5.6
5.2
4.0
3.3
1953: January
February
March
April
May
June
July
August
September
October
November
December
3.8
3.6
4.1
4.3
4.4
4.2
4.3
4.8
5.2
4.5
4.2
4.3
2.1
2.2
2.5
2.7
2.7
2.6
2.5
2.9
3.1
2.1
1.5
1.1
.9
4.4
4.2
4.4
4.3
4.1
5.1
4.1
4.3
4.0
3.3
2.7
1.9
___
1.0
.9
1.1
1.3
1.5
1.8
2.3
2.9
1
Prior to 1940, military and miscellaneous separations are included with quits.
2
Averages computed by Council of Economic Advisers from published monthly
3
Estimates based on incomplete data.
NOTE.—Detail will not necessarily add to totals because of rounding.
Source: Department of Labor (except as noted).
188
rates.
TABLE G-21.—Number of wage and salary workers in nonagricultural establishments, 7929—53 l
[Thousands of employees]
Period
Monthly average:
1929
Total
wage
and
salary
workers
31, 041
Manufacturing
Total
NonDur- duraable
ble
goods goods
Mining
TransCon- portatract tion
and Trade 2 Ficonnance
struc- public
tion utilities
Government
Serv- (Federal,
ice 2
State,
and
local)
10, 534
(3)
(3)
1,078
1,497
3,907
6,401
1,431
3,127
3,066
3
()
(33)
(3)
(3)
()
(3)
1,000
864
722
735
874
1,372
1,214
970
809
862
3,675
3,243
2, 804
2, 659
2,736
6,084
5,531
4,907
4,999
5,552
1,398
1,333
1,270
1,225
1.247
3,084
2, 913
2,682
2,614
2,784
3,149
3,264
3,225
3,167
3,298
1930
1931
1932
1933
1934
29, 143
26, 383
23, 377
23, 466
25, 699
9,401
8,021
6,797
7,258
8,346
1935
1936
1937
1938
1939
26, 792
28. 802
30, 718
28, 902
30, 287
8,907
9,653
10, 606
9, 253
10, 078
()
(33)
()
(3)
4,683
8
8
5,394
888
937
1,006
882
845
912
1,145
1,112
1, 055
1,150
2,771
2,956
3,114
2, 840
2,912
5,692
6,076
6, 543
6,453
6,612
1,262
1,313
1, 355
1,347
1,382
2,883
3,060
3, 233
3,196
3,321
3,477
3,662
3,749
3,876
3,987
1940
1941
1942
1943
1944-
32, 031
36, 164
39, 697
42, 042
41, 480
10, 780 5,337
12, 974 6, 945
15, 051 8, 804
17, 381 11, 077
17, 111 10, 858
5, 443
6, 028
6,247
6,304
6,253
916
947
983
917
883
1,294
1,790
2,170
1,567
1,094
3,013
3,248
3,433
3, 619
3,798
6,940
7, 416
7, 333
7,189
7,260
1,419
1,462
1,440
1,401
1,374
3,477
3,705
3,857
3,919
3, 934
4,192
4,622
5,431
6,049
6,026
_.-
40, 089
41, 412
43, 438
44, 382
43, 295
15, 302
14, 461
15, 290
15, 321
14, 178
9,079
7,739
8, 372
8,312
7,473
6,222
6, 722
6,918
7,010
6,705
826
852
943
982
918
1, 132
1,661
1,982
2,169
2,165
3,872
4,023
4,122
4,141
3,949
7, 522
8. 602
9,196
9,519
9,513
1, 394
1,586
1, 641
1,711
1,736
4, 055
4,621
4,807
4,925
5,000
5, 967
5,607
5,456
5,614
5,837
1950
1951
1952
1953* ...
44, 696
47, 202
47, 993
49, 146
14, 967
16, 082
16, 209
17, 009
8,085
9,071
9,262
9,951
6,882
7,011
6, 946
7,058
889
913
872
832
2, 333
2,588
2,572
2,537
3,977 9,645 1,796
4, 16G 10. 013 1,861
4,220 10, 251 1,957
4,275 10, 475 2,032
5,098
5,207
5,280
5,315
5,992
6,373
6,633
6,671
1945
1946
19471948
1949
(3)
(3)
83
Seasonally adjusted
1952: January
February
March
April
May
June
._
July
August . __.
September
October
November
December
47, 494
47, 709
47, 680
47, 624
47, 670
47, 471
47, 336
48, 039
4S, 406
48. 664
48, 857
48, 957
16, 018
16, 076
16, 097
16,143
16, 082
15, 771
15,609
16, 151
16, 412
] 6, 546
16, 755
16, 870
9,121
9,181
9,202
9,257
9,227
8, 863
8, 652
9, 181
9,421
9. 539
9, 699
9;797
6, 897
6,895
6,895
6,886
6, 855
6, 908
6,957
6,970
6, 991
7,007
7, 056
7,073
909
905
907
893
890
812
777
883
880
867
870
871
2, 562
2, 611
2,542
2,536
2. 518
2,587
2, 595
2, 604
2,611
2,574
2,571
2,548
4, 184
4,204
4,210
4,170
4,187
4, 193
4, 154
4,209
4.259
4,303
4, 293
4,281
10, 134
10, 140
10, 146
10,135
10, 184
10, 246
10, 273
10, 261
10, 333
10, 390
10, 366
10, 397
1,911
1, 916
1, 921
1,931
1, 940
1,952
1, 967
1, 980
1, 986
1, 993
1,993
1; 988
5, 249
5, 259
5,257
5, 266
5,270
5, 281
5,302
5, 299
5,285
5, 303
5, 292
5,290
6, 527
6,598
6,600
6,570
6,599
6, 629
6,659
6, 652
6, 640
6, 688
6,717
6, 712
1953: January
February
March
April
May
June__
July
August
September
October
November
December *.„
49, 014
49, 113
49, 148
49, 154
49, 297
49, 486
49, 511
49, 303
49, 216
49, 205
48, 843
48, 462
16, 949
17, 039
17, 168
17, 229
17, 276
17, 319
17, 303
17, 127
16, 959
16, 788
16, 587
16, 360
9,871
9,965
10, 068
10,118
10, 135
10, 161
10, 150
10, 050
9,936
9,824
9,648
9, 481
7,078
7,074
7,100
7,111
7,141
7, 158
7,153
7,077
7, 023
6, 964
6, 939
6, 879
872
867
854
838
833
831
816
821
820
807
813
812
2, 531
2, 562
2, 529
2, 517
2,484
2,508
2, 511
2,514
2, 571
2, 607
2, 583
2,532
4,246
4, 261
4,272
4,266
4, 282
4,282
4, 293
4,287
4, 301
4,316
4,279
4,219
10, 437
10, 445
10, 390
10, 402
10, 466
10, 521
10, 524
10,489
10, 503
10, 562
10, 482
10, 481
1,989
1,987
1,993
2,004
2, 015
2,026
2,044
2,055
2, 064
2,068
2,069
2,065
5,298
5,300
5, 305
5, 307
5,304
5, 317
5, 333
5,329
5,313
5,330
5, 323
5,321
6, 692
6, 652
6,637
6,591
6,637
6,682
6,687
6,681
6,685
6, 727
6,707
6,672
1
Includes all full- and part-time wage and salary workers in nonagricultural establishments who worked
during, or received pay for, any part of the pay period ending nearest the 15th of the month. Excludes
proprietors, self-employed persons, domestic servants, and unpaid family workers. Not comparable with
estimates of nonagricultural employment of the civilian labor force (appendix table G-15) which include
proprietors, self-employed persons, and domestic servants, which count persons as employed when they
are not at work because of industrial disputes, bad weather, or temporary layoffs, and which are based on
an enumeration of population, whereas the estimates in this table are based on reports from employing
establishments.
2
Beginning with 1939, data are not strictly comparable with data shown for earlier years because of the
shift
of the automotive repair service industry from the trade to the service division.
3
j;Not available.
4
Estimates based on incomplete data.
f NOTE.—Detail will not necessarily add to totals because of rounding.
Sources: Department cf. Labor and Board of Governors of the Federal Reserve System.
189
TABLE G—22.—Average weekly hours of work in selected industries, 1929—53
Manufacturing
Period
Retail
trade
Bitumi- Build'except
ing
Class I Tele- Whole- eating Hotels
nous
(yearconsale
railNoncoal
and round)
roads * phone trade drinkTotal Durable
mining strucgoods durable
tion
ing
goods
places)
(2)
(2)
(2)
(2)
38.4
(2)
(2)
(2)
841.9
a
()
0
40.0
35.1
33.5
28.3
27.2
29.5
27.0
37.3
41.0
40.0
35.0
38.0
36.1
37.7
37.4
36.1
37.4
26.4
28.8
27.9
23.5
27.1
30.1
32.8
33.4
32.1
32.6
88
88
8
8
8
I 8 ()
41.3
42.6
§
38.8
42.8
43.7
38.9
39.1
42.2
»41.7
42.7
45.6
38.1
40.6
42.9
44.9
45.2
39.3
42.1
45.1
46.6
46.6
37.0
38.9
40.3
42.5
43.1
28.1
31.1
32.9
36.6
43.4
33.1
34.8
36.4
38.4
39.6
44.3
45.8
47.0
48.7
48.9
39.5
40.1
40.5
41.9
42.3
41.2
41.0
41.3
42.2
42.9
42.5
42.1
41.1
40.3
40.4
45.9
45.5
45.6
45.2
45.4
1945 .
1946
1947
1948.
1949
43.4
40.4
40.4
40.1
39.2
44.1
40.2
40.6
40.5
39.5
42.3
40.5
40.1
39.6
38.8
42.3
41.6
40.7
38.0
32.6
39.0
38.1
37.6
• 37.3
36.7
48.5
46.0
46.4
46.2
43.7
441.7
39.4
37.4
39.2
38. 5
42.7
41.5
41.0
40.9
40.7
40.3
40.7
40.3
40.3
40.4
45.6
45.4
45.2
44.3
44.2
I960
1951
1952
1953 »
40.5
40.7
40.7
40.5
41.2
41.6
41.5
41.2
39.7
39.5
39.6
39.5
35.0
35.2
34.2
34.5
36.3
37.2
38.1
37.0
40.8
41.0
40.6
(2)
38.9
39.1
38.5
38.7
40.7
40.7
40.6
40.4
40.5
40.2
39.9
39.3
43.9
43.2
42.6
42.3
1962: January
February
March
April
May
June
July
August
September...
October. _ .
November
December
40.8
40.7
40.6
39.8
40.2
40.5
39.9
40.5
41.2
41.4
41.1
41.7
41.8
41.7
41.6
40.8
41.1
41.2
40.2
41.0
41.9
42.2
41.9
42.5
39.4
39.4
39.2
38.4
38.9
39.5
39.4
39.9
40.3
40.3
40.1
40.5
38.5
35.9
35.4
29.9
31.8
28.5
28.1
36.2
38.9
32.3
35.5
36.4
37.5
37.9
36.8
37.6
37.9
38.8
38.5
38.5
38.8
38.7
37.1
38.2
41.7
41.3
40.2
41.4
39.9
39.7
39.9
40.1
41.0
41.9
39.1
40.8
38.7
38.5
38.5
34.9
38.7
39.0
39.3
39.0
39.0
38.9
38.9
38.8
40.7
40.4
40.4
40.1
40.4
40.5
40.6
40.6
40.7
40.7
40.7
40.9
39.9
39.9
39.9
39.9
39.7
40.3
40.6
40.5
39.7
39.4
39.0
39.8
42.8
42.8
42.5
42.8
42.6
42.6
42.4
42.6
42.4
42.4
42.3
42.9
1953: January
February
March
April
May
June
.July
August
September
October
November
December 8_ _
41.0
40.9
41.1
40.8
40.7
40.7
40.3
40.5
39.9
40.3
40.0
40.1
41.8
41.7
41.9
41.6
41.5
41.4
40.8
41.1
40.6
41.0
40.6
40.8
39.8
39.7
40.0
39.5
39.5
39.7
39.6
39.6
39.0
39.2
39.1
39.2
35.4
32.7
33.1
32.1
34.4
36.5
34.4
37.3
34.6
36.2
32.6
(2)
36.9
37.1
36.8
36.9
37.3
37.7
37.1
37.6
36.1
37.5
36.4
(2)
39.9
40.5
40.7
41.3
39.8
41.8
42.1
40.3
40.6
40.9
(2)
(2)
38.6
38.3
38.2
38.3
38.7
39.0
39.0
38.7
39.4
38.6
38.9
(2)
40.4
40.5
40.4
40.3
40.3
40.4
40.5
40.4
40.4
40.6
40.5
(2)
39.3
39.2
39.2
39.1
39.0
39.4
39.9
39.8
39.1
39.0
38.9
(2)
42.4
42.3
42.1
42.5
42.1
42.0
42.2
42.3
42.0
42.6
42.6
(2)
1929
44.2
1930
1931..
1932
1933 .
1934
42.1
40.5
38.3
38.1
34.6
00
1935
1936 .
1937
1938..
1939
36.6
39.2
38.6
35.6
37.7
1940..
1941
1942..
1943
1944..
_
(2)
32.6
34.8
33.9
28.9
I
2
(2)
(2)
(2)
(2)
§
45.9
* New series. Averages are based upon monthly data (exclusive of switching and terminal companies)
summarized in the M-300 report by the ICC and relate to all employees who received pay during the month,
except executives, officials, and staff assistants (ICC Group I). Beginning September 1949, data reflect a
reduction in basic workweek from 48 to 40 hours.
i3 Not available.
Not strictly comparable with previous data.
< 9-month average, April through December, because of new series started in April 1945. Beginning with
June
1949 data relate to nonsupervisory employees only.
6
Estimates based on incomplete data.
NOTE.—Data are for production workers in manufacturing and mining, construction workers in building
construction, and for nonsupervisory employees in other industries. Data are for payroll periods ending
closest to the middle of the month. The annual figures for 1953 are straight arithmetic averages of the
monthly figures and not strictly comparable with the averages for earlier years which have been weighted
by data on employment.
Source: Department of Labor.
190
TABLE G-23.—Average gross hourly earnings in selected industries, 1929—53
Retail
trade
Manufacturing
Period
1929__
BituNon- minous
coal
Dura- durable
Total
ble mining
goods goods
$0. 566
1930
1931.-1932
1933 _ _
1934
(4)
(4)
(44)
.552
(«)4
.515
()
()
.446 $0. 497 $0.420
.472
.442
.427
.556
.532
.515
1935
1936
1937
1938
1939
.550
.556
.624
.627
.633
1940
1941
1942
1943
1944
.661
.729
.853
. 961
1.019
1945
1946
1947
1948
1949
$0. 681
.745
.794
.856
.878
.886
.724
.808
.947
1. 059
1.117
.602
.640
.723
.803
.861
.883
.993
1.059
1. 139
1.186
1.023
1.086
1.237
1.350
1.401
1.111
1.156
1.292
1.410
1. 469
1950
1951
1952
1953 7
1.465
1.59
1.67
1.77
1952: January
February
March
April
-
May
June
July
August
September
October
November
December
1953: January.
February
March
April
May__
June .
July
August
September
October
November
December 7...
ing Class I Tele- Whole- (except Hotels Agrieating (year- 2 cul- 3
con- rail- phone
sale
struc- roads *
tion
(4)
.684
(0
.647
(44)
.520
( 4)
.501
()
.673 $0. 795
.530
.529
.577
.584
.582
.577
.586
.674
. 686
.698
Build-
trade
and round)
drinking
places)
ture
(4)
(4)
(4)
(4)
(4)
$0. 244
(44)
(4 )
( 4)
(4)
(44)
(4)
(4)
(4)
(44)
(44)
(44)
(4)
( 4)
()
(4)
.228
.173
.130
.117
.130
(44)
( 4)
(4)
(44)
$0. 648
.667
.698
fl.700
.715
8( )
$0. 329
.335
.144
.154
.173
.168
.168
()
()
.815
.824
()
.903
$0. 774
.908
.816
()
.932 $0. 730
.822
()
()
4
4
8( )
8( )
(44)
( 4)
( 4)
()
$0. 542
4
.958
1.010
1.148
1. 252
1.319
.733
.743
.837
.852
.948
.827
.820
.843
.870
.911
.739
.793
.860
.933
.985
. 553
.580
.626
.679
.731
.340
.357
.392
.451
.497
.171
.209
.271
.358
.428
.904
1.015
1.171
1.278
1.325
1.240 1.379
1.401 1.478
1.636 1. 681
1.898 81.848
1.941 1.935
.955
1.087
1.186
1.301
1.427
8.962
.124
.197
.248
.345
1.029
1.150
1. 268
1. 359
1.414
.783
.893
.009
.088
.137
.537
.596
.650
.709
.743
.477
.520
.553
.580
.559
1.537
1.67
1.76
1.87
1.378
1.48
1.54
1.61
2.010
2.21
2.29
2.48
2.031
2.19
2.31
2.47
1.572
1.73
1.83
(4)
.398
.49
1.59
1.68
1.483
1.58
1.67
1.76
.176
.26
.32
.40
.771
.82
.87
.91
.561
.625
.661
.672
1.63
1.64
1.65
1.65
1.65
1.65
1.64
1.66
1.69
1.70
1.71
1.73
1.72
1.72
1.74
1.74
1.74
1.74
1.73
1.76
1.80
1.81
1.82
1.83
1.52
1.52
1.53
1.53
1.53
1.53
1.54
1.54
1.54
1.54
1.56
1.57
2.24
2.24
2.24
2.23
2.21
2.26
2.26
2.23
2.26
2.34
2.43
2.52
2.26
2.27
2.28
2.28
2.26
2.25
2.29
2.31
2.35
2.38
2.39
2.40
1.80
1.83
1.81
1.79
1.80
1.82
1.83
1.85
1.86
1.85
1.90
1.87
1.54
1.55
1.54
1.55
1.57
1.56
1.59
1.59
1.61
1.64
1.66
1.64
1.63
1.63
1.64
1.65
1.65
1.66
1.67
1.68
1.68
1.70
1.70
1.70
1.30
1.29
1.29
1.30
1.32
1.33
1.33
1.33
1.34
1.35
1.35
1.32
.85
.86
.86
.86
.86
.86
.87
.87
.87
.88
.88
.88
.693
1.74
1.74
1.75
1.75
1.76
1.76
1.77
1.77
1.79
1.78
1.79
1.79
1.84
1.85
1.85
1.86
1.86
1.87
1.88
1.88
1.90
1.90
1.89
1.89
1.58
1.58
1.59
1.59
1.60
1.60
1.61
1.61
1.63
1.62
1.63
1.64
2.48
2.49
2.47
2.48
2.47
2.50
2.47
2.49
2.49
2.47
2.48
(4)
2.41
2.42
2.44
2.44
2.44
2.44
2.47
2.49
2.52
2.52
2.53
(4)
1.87
1.90
1.85
1.86
1.87
1.86
1.86
1.87
1.88
1.89
(44)
()
1.65
1. 66
1.65
1.65
1.67
1.67
1.65
1.66
1.73
1.71
1.75
(4)
1.71
1.72
1.73
.74
.76
.76
.78
.78
.79
.79
.79
(4)
1.36
1.37
1.37
1.38
1.39
1.40
1.41
1.41
1.42
1.42
1.42
(4)
.88
.89
.89
.89
.90
.91
.91
.91
.93
.93
.92
(4)
.571
.664
.688
.715
.581
.675
.697
i New series. Averages are based upon monthly data (exclusive of switching 'and terminal Companies)
summarized in the M-300 report by the ICC and relate to all employees who received pay during the
month, except executives, officials, and staff assistants (ICC Group I). Beginning September 1949, data
reflect a wage rate increase and reduction in basic workweek from 48 to 40 hours.
i8 Money payments only; additional value of board, room, uniform, and tips not included.
Composite rate per hour. Weighted average of all farm wage rates on a per hour basis.
4
Not available.
8
Not
strictly comparable with previous data.
8
9-month average, April through December. Series beginning April 1945 includes only employees subject
to provisions of the Fair Labor Standards Act and is not comparable with preceding series which includes
all employees. Beginning June 1949, data relate to nonsupervisory employees.
? Estimates based on incomplete data.
NOTE.—Data are for production workers in manufacturing and mining, construction workers in building
construction, and for all nonsupervisory employees in other industries. Data are for payroll periods ending
closest to the middle of the month. In the nonagricultural series, the annual figures for 1953 are straight
arithmetic averages of the monthly figures and not strictly comparable with the averages for earlier years
which have been weighted by data on man-hours.
Sources: Department of Agriculture and Department of Labor.
TABLE G—24.—Average gross weekly earnings in selected industries, 1929—53
Manufacturing
Period
Total
Bitumi- Build- Class I
nous ing con- railstruc- roads i
coal
Dura- Nonble durable mining tion
goods goods
1929
$25. 03
$27. 22
$22. 93
$25. 72
1930
1931
1932
1933
1934
23.25
20.87
17. 05
16. 73
18. 40
24.77
21.28
16. 21
16.43
18.87
21.84
20.50
17. 57
16.89
18.05
22.21
17.69
13.91
14.47
18.10
$22. 97
1935
1936
1937
1938
1939
20. 13
21.78
24. 05
22. 30
23. 86
21.52
24.04
26.91
24.01
26.50
19. 11
19.94
21. 53
21.05
21.78
19. 58
22.71
23.84
20.80
23.88
24. 51
27.01
30.14
29.19
30.39
$31. 90
1940
1941
1942
1943
1944
25 20
29. 58
36. 65
43.14
46.08
28.44
34. 04
42.73
49.30
52.07
22.27
24.92
29.13
34.12
37.12
24.71
30.86
35.02
41.62
51. 27
31.70
35. 14
41.80
48.13
52.18
1945
1946
1947
1948
1949
44.39
43. 82
49.97
54. 14
54. 92
49. 05
46. 49
52. 46
57.11
58.03
38. 29
41.14
46. 96
50. 61
51. 41
52. 25
58. 03
66. 59
72.12
63.28
1950
1951
1952 6
1953
59. 33
64. 71
67.97
71.55
63.32
69.47
73.04
77.20
54. 71
58. 46
60.98
63. 45
1952: January. .
February
March
April
May
June
July
August...
September...
October
November...
December
66. 50
66.75
66.99
65.67
66. 33
66.83
65. 44
67. 23
69. 63
70.38
70.28
72.14
71.90
71.72
72. 38
70.99
71. 51
71. 69
69.55
72.16
75. 42
76.38
76.26
77.78
1953: January. ._
February
March
.
April
May
June
July
August
September
October
Novemberfl
December _.
71.34
71.17
71.93
71.40
71.63
71. 63
71. 33
71.69
71.42
71. 73
71.60
71.78
76.91
77. 15
77. 52
77. 38
77.19
77.42
76.70
77.27
77.14
77.90
76.73
77.11
.- .
_ -
Retail
trade
(except Hotels
eating (yearTele- Wholesale
2
and
phone trade
drink- round)
ing
places)
(3)
(3)
(3)
(J)
(3)
(3)
(3)
(3)
(3)
(3)
(3)
$27. 72
26.11
26. 37
f3)
$30. 03
31.74
32. 14
26.76
28.41
29.87
4 29. 54
29.82
$23. 14
$15. 10
15.28
32. 47
34. 03
39. 34
41.49
46.36
32. 67
32. 88
34. 14
36. 45
38.54
30.45
32. 51
35. 52
39. 37
42. 26
23. 50
24.42
25. 73
27.36
29.53
15. 61
16.24
17.88
20.39
22.56
53. 73
56. 24
63. 30
4 68. 85
70. 95
46.32
50. 00
55. 03
60.11
62.36
840.12
44.29
44.77
48.92
51.78
43. 94
47. 73
51.99
55. 58
57. 55
31 . 55
36. 35
40.66
43. 85
45.93
24.49
27.06
29.36
31.41
32.84
70. 35
77.79
78.32
85.55
73. 73
81.47
88. 01
91.31
64.14
70. 93
74.30
54. 38
58. 26
61.22
64.92
60. 36
64. 31
67.80
71.12
47. 63
50. 65
52. 67
54.79
33. 85
35. 42
37.06
38.28
59.89
59.89
59.98
58. 75
59. 52
60. 44
60.68
61.45
62.06
62. 06
62. 56
63. 59
86.24
80.42
79.30
66.68
70.28
64. 41
63. 51
80.73
87.91
75. 58
86.27
91.73
84. 75
86. 03
83. 90
85. 73
85. 65
87.30
88.17
88.94
91.18
92.11
88. 67
91.68
75.06
75. 58
72.76
74.11
71.82
72. 25
73. 02
74.19
76.26
77.52
74.29
76.30
59. 60
59. 68
59. 29
54. 10
60.76
60. 84
62. 49
62. 01
62. 79
63. 80
64.57
63.63
66.34
65. 85
66. 26
66.17
66.66
67.23
67.80
68.21
68. 38
69. 19
69.19
69.53
51. 87
51. 47
51.47
51. 87
52. 40
53. 60
54.00
53. 87
53. 20
53. 19
52. 65
52.54
36. 38
36.81
36.55
36.81
36.64
36. 64
36.89
37.06
36.89
37.31
37. 22
37.75
62.88
62. 73
63.60
62. 81
63.20
63. 52
63. 76
63. 76
63. 57
63. 50
63. 73
64.29
87.79
81.42
81.76
79.61
84.97
91. 25
84.97
92.88
86.15
89.41
80.85
88.93
89.78
89.79
90.04
91.01
91.99
91. 64
93.62
90.97
94. 50
92.09
74.61
76. 95
75. 30
76.82
74.43
77.75
78. 31
75. 36
76.33
77.30
63.69
63.58
63. 03
63. 20
64.63
65.13
64.35
64.24
68.16
66. 01
68.08
69.08
69. 66
69.89
70.12
70.93
71.10
72.09
71.91
72.32
72.67
72.50
53. 45
53.70
53. 70
53. 96
54.21
55.16
56.26
56. 12
55.52
55. 38
55.24
(3)
37.31
37.65
37.47
37.83
37.89
38.22
38.40
38.49
39. 06
39. 62
39.19
8
(3)
(3)
(3)
1 New series. Averages are based upon monthly data (exclusive of switching and terminal companies)
summarized in the M-300 report by the ICC and relate to all employees who received pay during the month,
except executives, officials, and staff assistants (ICC group I). Beginning September 1949, data reflect a
wage rate increase and reduction in basic workweek from 48 to 40 hours.
2 Money payments only; additional value of board, room, uniforms, and tips not included.
3 Not available.
* Not strictly comparable with previous data.
8 9-month average, April through December. Series beginning April 1945 includes only employees subject to provisions of the Fair Labor Standards Act and is not comparable with preceding series which
includes all employees. Beginning June 1949, data relate to nonsupervisory employees.
« Estimates based on incomplete data.
NOTE.—Data are for production workers in manufacturing and mining, 'construction workers in building
construction, and for all non supervisory employees in other industries. Data are for payroll periods ending
closest to the middle of the month. The annual figures for 1953 are straight arithmetic averages of the
monthly figures and not strictly comparable with the averages for earlier years which have been weighted
by data on man-hours.
Source: Department of Labor.
192
PRODUCTION AND BUSINESS ACTIVITY
TABLE G-25.—Indexes of industrial and agricultural production, 1929-53
[1947-49=100]
Industrial production 1
Manufactures
Period
Total
Minerals
Total
Durable
Nondurable
Agricultural
production a
59
58
60
56
68
72
49
40
31
37
40
48
39
30
36
39
45
31
19
24
30
51
48
42
48
49
59
61
42
48
61
71
78
75
69
59
1935
1936
1937
1938
1939
47
56
61
48
58
46
55
60
46
57
38
49
55
35
49
65
61
64
67
66
55
63
71
62
68
72
63
81
78
79
1940
1941
1942
1943
1944
67
87
108
127
125
66
88
110
133
130
63
91
126
162
159
69
84
93
103
99
76
81
84
87
93
82
85
96
93
97
1945
1946
1947
1948
1949
107
90
100
104
97
110
90
100
103
97
123
86
101
104
95
96
95
99
102
99
92
91
100
106
94
96
99
95
103
102
112
120
124
134
113
121
125
136
116
128
136
153
111
114
114
119
105
115
114
116
101
104
107
107
1929
1930
1931
1932
1933
1934
_
.
-.
1950
1951
1952
19533
Seasonally adjusted
1952' January
February
March
April
May _ _
June
July
August
SeptemberOctober
November
December
_ -
1953: January
_ _ _ _ _ _
February
March
April
May
_
June
July
_.
AugustSeptember.. _ _ _ _ _ _ _ _ _ _
October
November.3 _
December
___
121
121
121
120
119
118
115
123
129
130
133
133
121
121
122
120
121
119
116
125
130
132
135
135
130
131
131
130
132
125
119
135
144
147
151
152
111
112
112
111
110
113
113
114
116
117
118
118
119
119
118
116
104
106
105
111
119
111
118
117
134
134
135
136
137
136
137
136
133
132
130
128
136
136
137
138
139
138
139
138
134
134
132
129
154
155
155
155
156
154
157
157
152
151
147
144
117
118
119
121
123
121
121
119
117
117
116
115
116
116
115
115
117
119
120
119
118
114
113
113
(44)
(4)
(4)
()
(«)
(4)
(4)
8( )
4
%
%
S(
?( )
4
4
(44)
()
(4)
(4)
* Revised series. The index has been improved in this revision by (1) incorporation of a number of new
series; (2) revision of weights, seasonal adjustment factors, and working-day allowances; (3) adoption of a
more recent comparison base period; (4) use of improved industrial classifications, and (5) development
of an independent set of annual indexes from the more comprehensive data available at yearly intervals.
For a detailed description of the revision, see the December 1953 issue of the Federal Reserve Bulletin.
3 Index of volume of farm production for human use. Converted from the reported base, 1935-39=100.
3 Estimates based on incomplete data.
4
Because of the extreme seasonal nature of agricultural crop production, only an annual index has been
computed.
Sources: Board of Governors of the Federal Reserve System and Department of Agriculture.
193
TABLE G-26.—New construction activity, 1929-53
[Value put in place, millions of dollars]
Private construction
Total
new
construction
Period
Public construction
NonNonmilitary
resibuilding
den- Other Total Militial
tary
High- Other
pripubpubbuild- vate
and
2
Non- way lics
lic naval
ing
Resi- resi(nonden- denfarm)
tial
tial
ResidenTotal
tial
pribuild1
ing
vate
(nonfarm)
1929
10, 793
8,307
3,625
2,694
1,988
2,486
19
659 1,266
542
1930
1931
1932
1933
1934
8,741
6,427
3,538
2,879
3,720
5,883
3,768
1,676
1,231
1,509
2,075
1,565
630
470
625
2,003
1,099
502
406
456
1,805
1,104
544
355
428
2,858
2,659
1,862
1,648
2,211
29
40
34
36
47
1
660 1,516
612 1,355
415
958
230
847
363 1,000
653
652
455
535
800
1935
1936
1937
193g
1939
4,232
6,497
6,999
6, 980
8,198
1,999
2,981
3,903
3,560
4,389
1,010
1,565
1,875
1,990
2,680
472
713
1,085
764
786
517
703
943
806
923
2,233
3,516
3,096
3,420
3,809
37
29
37
62
125
9
61
93
35
65
1940
1941
1942
1943
1944
8,682
11,957
14, 075
8,301
5,259
5, 054
6,206
3,415
1,979
2,186
2,985
3,510
1,715
885
815
1,025
1,482
635
233
351
1,044 3,628
385
1,214 5,751 1, 620
1,065 10, 660 5,016
861 6,322 2,550
837
1,020 3,073
200
430
545
739
211
5,633 3,235 1,100 1,020
12, 000 9,638 4,015 3,341
16,689 13, 256 6,310 3,142
21, 678 16, 853 8,580 3,621
22, 789 16, 384 8,267 3,228
1,115
2,282
3,804
4,652
4,889
398
937
80
374
354
895
599 1,451
200
156 1,301 1,774
359 2,068 2,131
28, 454
30, 895
32, 638
34, 843
177
5,077 7,000
5, 439 9,331
887
5,698 10,826 1,388
6,034 11, 228 1,323
1945
1946'
1947
1948
1949
-- -
--
-__. __
--
1950
1951
1952
1953
21, 454
21, 564
21,812
23, 615
3,777
5,152
5,014
5,676
12, 600
10, 973
11, 100
11, 905
2,398
2,362
3,433
4,825
6,405
690
188
204
158
137
345
595
654
554
328
701
550
672
970
845
1,362
1,226
1,421
1,381
1,014
1,363
1,190
1,230
1,268
615 1,302 1,126
1,646 1,066
989
3, 685
734
680
446
577
2,010
1,361
302
362
2,384
3,469
4,119
4,317
2,272
2,518
2,860
3,150
293
551
979
,436
,710
,822
,862
,805
,884
Seasonally adjusted annual rates
32, 618 21, 776 10, 996
32, 658 21, 848 11, 204
5,098
4,930
5,682 10, 842 1,452
5,714 10, 810 1,324
710 3,930 2,888 1,862
598 4,308 2,832 1,748
1953: First half
...
Second half .
35, 436 23, 792 12, 238
34, 250 23, 438 11, 572
5,582
5,770
5, 972 11,644 1, 534
6,096 10, 812 1,112
608 4, 452 3, 100 1, G50
500 4,182 3,200 1,818
1952* January
February
March
April
May. _ _ _ -.
June
July
August . September
October
November .
December
30, 936 20, 784 10, 020
32, 652 21, 696 10, 800
33, 744 22, 956 12, 096
33, 528 22, 284 11, 436
32, 652 21, 636 10, 896
32, 196 21, 300 10, 728
31, 908 21, 408 10, 812
31,896 21, 408 10, 824
32, 556 21, 564 10, 896
32, 928 21, 984 11, 352
33, 372 22, 272 11, 580
33, 288 22, 452 11, 760
5,160
5,244
5,220
5,148
5,016
4,800
4,812
4,848
4,908
4,932
5,040
5,040
5, 604
5, 652
5,640
5,700
5,724
5,772
5, 784
5,736
5,760
5, 700
5, 652
5,652
10, 152
10, 956
10, 788
11, 244
11,016
10, 896
10, 500
10, 488
10, 992
10, 944
11, 100
10, 836
1,308
1, 332
1,488
1, 512
1, 524
1, 548
1,380
1, 332
1,260
1,212
1,308
1,452
840
792
696
684
648
600
624
600
588
576
588
012
3,900
3,936
3,816
3,888
3,960
4,080
3,984
4, 164
4,284
4,248
4,560
4,608
2, 208
2,988
2,880
3,288
3,048
2,916
2,844
2,748
3,132
3,144
2,844
2,280
1,896
1, 908
1,908
1,872
1,836
1,752
1,668
1,644
1,728
1,764
1,800
1,884
1953: January
February
March
April
._
May
June
--. ._ _ - _
July
August
September
October .__
November
December.
33, 888 22, 356 11,352
35, 844 23, 436 12, 084
36, 600 24, 660 13, 068
36, 300 24, 708 12, 960
34, 920 23, 760 11, 868
35, 064 23, 832 12, 096
34, 188 23, 460 11, 748
33, 732 23, 244 11, 472
33, 888 23, 136 11, 304
34, 092 23, 340 11, 484
34, 800 23, 628 11, 556
34, 800 23, 820 11, 868
5,304
5, 568
5,628
5,664
5,724
5, 604
5,592
5, 640
5,712
5,748
5,988
5,940
5,700
5, 784
5, 964
6,084
6,168
6,132
6,120
6,132
6,120
6,108
6,084
6,012
11, 532
12, 408
11, 940
11, 592
11, 160
11, 232
10, 728
10, 488
10, 752
10, 752
11,172
10, 980
1,548
1, 656
1, 608
1,476
1, 452
1,464
1,260
1,152
1,068
960
1,056
1,176
624
648
600
612
588
576
528
468
504
516
504
480
4,500
4, 608
4,572
4,416
4,296
4,320
3,972
3, 912
4,080
4, 152
4,464
4, 512
2.892
3,480
3,180
3,084
2,928
3,036
3,204
3,204
3,252
3,336
3,276
2,928
1,968
2,016
1,980
2,004
1,896
1,836
1,764
1,752
1,848
1,788
1,872
1,884
1952- First half-
Second half
.
1
Excludes construction expenditures for crude petroleum and natural-gas drilling, and therefore does not
agree
with the new construction expenditures included in the gross national product.
2
Includes public utility, farm, and other private construction not shown separately.
'Includes sewer and water, miscellaneous public service enterprises, conservation and development,
and all other public construction not shown separately.
Sources: Department of Commerce and Department of Labor.
194
TABLE G-27.—New nonfarm housing starts, by source of funds and by type of structure, 1929-53l
[Number of units]
Source of funds
Total
nonfarm
units
Period
Private
Public
Type of structure
l-family
Multi2-family « family
3
Private
units,
seasonally adjusted
annual
rates *
1929 •
509,000
509,000
316, 000
51,000
142,000
1930
1931
330, 000
254, 000
134, 000
93, 000
126, 000
221, 000
319. 000
336. 000
406, 000
515, 000
330, 000
254, 000
134, 000
93,000
126, 000
215, 700
304, 200
332, 400
399, 300
458, 400
5,300
14, 800
3,600
6, 700
56,600
227, 000
187, 000
118, 000
76,000
109, 000
183, 000
244, 000
267, 000
317,000
399, 000
29,000
22, 000
7,000
5,000
5,000
8,000
14, 000
16,000
18, 000
29,000
74,000
45, 000
9,000
12,000
12,000
30, 000
61,000
53, 000
71, 000
87, 000
602, 600
706, 100
356, 000
191, 000
141, 800
529, 600
619, 500
301, 200
183, 700
138, 700
73, 000
86, 600
54, 800
7,300
3,100
485,
603,
292,
143,
117,
700
500
800
600
700
37, 300
34, 300
20, 100
17, 800
10,600
79, 600
68,300
43, 100
29,600
13,500
209,300
670, 500
849, 000
931, 600
1, 025, 100
1, 396, 000
1, 091, 300
1, 127, 000
1, 102, 400
208, 100
662, 500
845, 600
913. 500
98R. 800
1, 352, 200
1. 020, 100
1, 068, 500
1, 066, 900
184, 600
1,200
590, 000
8,000
740, 200
3,400
18. 100
766, 600
794, 300
36, 300
43,800 1, 154, 100
900, 100
71, 200
942, 500
58, 500
35, 500
(7)
8,800
24, 300
33,900
46, 900
36, 500
44,800
40,400
45,900
C7)
15,900
56, 200
74, 900
118, 100
194, 300
197, 100
150, 800
138, 600
C7)
1952* First half
Second half
565, 800
561, 200
621, 700
546, 800
44, 100
14, 400
461, 700
480, 800
23, 200
22,700
80,900
57,700
1953: First half
Second half •
581, 400
521, 000
553, 100
513, 800
28, 300
7,200
487, 500
(7)
22, 000
(7)
71,900
(7)
1952: January
February
March .__
April
64,900
77, 700
103, 900
106, 200
109, 600
103, 500
102, 600
99, 100
100. 800
101, 100
86, 100
71,500
61, 400
74, 300
91, 100
97, 000
101, 000
96, 900
101, 100
97, 400
99, 200
99, 200
82, 300
67, 600
3,500
3,400
12, 806
9,200
8,600
6,600
1,500
1,700
1,600
1,900
3,800
3,900
54,000
65, 700
79, 600
85, 700
89. 700
87, 000
90, 500
85, 800
86, 500
87,400
72, 100
58,500
3,000
3,400
4,300
4,400
4,300
3,800
3,500
4,000
4,700
3,800
3,400
3,300
7,900
8.600
20, 000
16, 100
15, 600
12, 700
8,600
9,300
9,600
9,900
10, 600
9,700
1, 023, 000
1, 221, 000
1, 104, 000
1, 030, 000
993, 000
985. 000
1, 055. 000
1,016,000
1, 102. 000
1, 134, 000
1, 122, 000
1, 127, 000
72, 100
79, 200
105, 800
111, 400
108, 300
104, 600
96, 700
93, 200
95, 100
88, 000
80, 000
68, 000
68,200
73, 800
96, 100
107, 400
105, 600
102, 000
96. 400
92, 200
92, 100
88, 000
78, 400
66, 700
3,900
5,400
9,700
4,000
2,700
2,600
300
1,000
3,000
(8)
1,600
1,300
59,600
65, 100
84, 800
94, 400
93,600
90, 000
84, 400
81, 500
81, 000
3,100
3,400
3,800
4,300
4,000
3,400
3,900
3,200
3,200
9,400
10, 700
17, 200
12, 700
10,700
11, 200
8,400
8,500
10,900
(7)
1, 137, 000
1, 213, 000
1, 165, 000
1, 141, 000
1, 039, 000
1, 037, 000
1,006,000
962. 000
1, 023, 000
1, 006, 000
1,069,000
1, 112, 000
1932
1933
1934
1935 .
1936
1937
1938
1939
. _
1940
1941
1942
1943
1944
1945
1946
1947
1948
1949
1950
1951
1952
1953 •
-
-._
May
_
June _ .
July
August
September
October
November
December
1953: January. .
February
March
April
_ _
May
June
July
August.
September
.
October fl
November*
fl
December
_
(7)
8
1 These estimates are based on building permit records which have been adjusted for lapsed permits and
for lags between permit issuance and start of construction. They are based also on reports of Federal construction contract awards and on field surveys in non-permit-issuing places. All temporary units are
excluded.
2 Includes units in 1- and 2-family structures with stores.
> Includes units in multifamily structures with stores.
* Seasonally adjusted annual rate data are based on privately owned starts only, since the wide fluctuations of public housing starts are not due primarily to seasonal influences. For method of computing seasonally adjusted annual rates see special release of Aug. 28,1952, issued by the Department of Labor .
» The number of starts for each of the years 1920-28 were as follows: 247,000; 449,000; 716,000; 871,000; 893,000;
937,000; 849,000; 810,000 and 753,000.
« Estimates based on incomplete data.
' Not available.
• Less than 50 units.
Source: Department of Labor.
284874—54
195
TABLE G—28.—Business expenditures for new plant and equipment, 1939 and 1945—54
[Billions of dollars]
Manufacturing
Total i
Period
Total
Transportation
Dura- Non- Mining Railble durable
road
goods goods
ComPublic merutilicial
and
ties
Other
other 2
1939
5.51
1.94
0.76
1.19
0.33
0.28
0.36
0,52
2.08
1945
1946
1947
1948
1949
8.69
14.85
20.61
22.06
19.28
3.98
6.79
8.70
9.13
7.15
1.59
3.11
3.41
3.48
2.59
2.39
3.68
5.30
5.65
4.56
.38
.43
.69
.88
.79
.55
.58
.89
1.32
1.35
.57
.92
1.30
1.28
.89
.50
.79
1.54
2.54
3.12
2.70
5.33
7.49
6.90
5.98
20.60
25. 64
26.46
27.83
7.49
10. 85
11.99
12.42
3.14
5.17
5.78
5.86
4.36
5.68
6.21
6.56
.71
.93
.88
.89
1.11
1.47
1.39
1.32
1.21
1.49
1.36
1.36
3.31
3.66
3.84
4.48
6.78
7.24
6.99
7.34
1950
1951
1952
1953 3 *
-
_
-
-
—
.-
Seasonally adjusted annual rates
1952: First half..
Second half...
26.65
26.22
12.01
11.94
5.83
5.72
6.17
6.22
0.92
.85
1.50
1.28
1.40
1.32
3.78
3.88
7.04
6.96
1953: First half 3
Second half
27.62
28.55
12.57
12.58
6.04
5.85
6.53
6.72
.85
.93
1.35
1.29
1.28
1.45
4.40
4.50
7.18
7.80
1952: First quarter
Second quarter
Third quarter
Fourth quarter. _
26.72
26.58
25.49
26.96
11.78
12.24
11.64
12.23
5.81
5.86
5.54
5.89
5.97
6.38
6.10
6.34
.93
.90
.83
.87
1.56
1.44
1.24
1.32
1.44
1.36
1.27
1.38
3.82
3.75
3.71
4.04
7.19
6.89
6.80
7.12
1953: First quarter
Second quarter, _ _
Third quarter 3
Fourth quarter
27.18
28. 06
28.82
28.28
12.48
12.66
12.71
12.44
6.00
6.09
5.91
5.79
6.49
6.57
6.80
6.64
.86
.84
.95
.91
1.38
1.32
1.30
1.28
1.27
1.28
1.46
1.44
4.20
4.59
4.70
4.30
6.98
7.37
7.69
7.90
1954: First quarter 3..
27.96
12.08
5.62
6.46
.88
1.18
1.32
4.52
7.98
1
2
Excludes agriculture and outlays charged to current account.
Includes trade, service, finance, communications, and construction.
3 Estimates for fourth quarter of 1953 and first quarter of 1954 based on anticipated capital expenditures
reported by business in November 1953.
< Annual total is sum of seasonally unadjusted quarterly expenditures; it does not necessarily coincide with
average of seasonally adjusted figures, in part because of adjustments when necessary for systematic tendencies in anticipatory data.
NOTE.—These figures do not agree with those shown in column 2 of appendix table G-6 which are included
in the gross national product estimates of the Department of Commerce, principally because the latter cover
agricultural investment and certain equipment and construction outlays charged to current expense. This
series is not available for years prior to 1939 and for 1940 to 1944.
Detail will not necessarily add to totals because of rounding.
Sources: Securities and Exchange Commission and Department of Commerce,
196
TABLE G—29.—Inventories and sales in manufacturing and trade, 1939—53
Total manufacturing and trade
Manufacturing
Millions of Ratio Millions of
dollars
dollars &
of inventories InInto 4 ven- Sales 8
ven- Sales' sales
tories2
tories2
Period
Wholesale trade
Retail trade *
of Ratio Millions of Ratio
Ratio Millions
dollars
dollars
of inof inof invenvenventories Intories Intories
8
to 4 ven- Sales3 to
to
ven- 2 Sales sales
sales tories2
sales * tories
<
Old series
20, 051 10, 802
1.77 11,465 5,112
2.11 3,052 2,187
22, 176 12, 134
28, 780 15,811
- . -. 31, 091 18, 623
31, 343 21, 920
31, 059 23, 785
1.72 12,819 5,859
.58 16, 960 8,172
.66 19, 287 10, 430
.40 20, 098 12,820
.33 19, 507 13, 782
2.06
1.78
1.77
1.51
1.45
3,238
4,044
3,781
3,684
3,912
2,410
3,033
3,426
3,830
4,152
1.30
1.20
1.19
.97
.94
30,893 23,852
42, 892 27, 150
50, 484 33, 156
55, 612 36,438
52,111 34, 664
.30 18, 390 12, 873
.33 24, 457 12, 617
28, 874 15,917
31,693 17, 630
28,
860 16,416
.56
1.48
1.66
1.71
1.72
1.86
4,555
6,583
7. 550
8.091
7, 940
1939 .
1940
1941
1942
1943
1944
1945
1946
1947
1948
1949
1950
_-
.._
._
_
64, 092 39, 917
:8
1.40 34, 314 19, 284
1.34 5,534 3,503
1.53
3,865
4,606
4,768
5,270
5,851
1.49
1.48
1.76
1.42
1.32
4,476
5,993
7,272
7,931
7,354
.91 7,948 6,503
.90 11,852 8,541
1.01 14, 060 9,967
.99 15,828 10, 877
1.08 15, 311 10,893
1.21
1.13
1.27
1.40
1.43
1.57 10, 462 8,658
1.03 19, 316 11, 974
1.40
1.20 21, 239 13, 185
1.18 21, 592 13, 674
1.25 22,439 14, 251
1.63
1.53
1.57
6,119
7,776
8,023
7,561
7,640
New series
1951
1952
1953 «
75, 268 44, 821
77, 109 46, 080
81, 124 48, 691
1.61 42, 904 22, 205
1.64 44, 190 23, 046
1.64 46, 721 25, 323
1.78 11, 125 9,431
1.89 11, 327 9,360
1.81 11, 964 9,335
Seasonally adjusted
1952' First half
Second half --
74,622 45, 171
77, 109 46, 894
1.67 43, 188 22,475
1.61 44, 190 23, 553
1.93 10,928 9,220
1.85 11, 327 9,469
1.19 20, 506 13,475
1.18 21, 592 13, 872
1.55
1.51
1953' First half 5
Second half
80, 167 49, 268
81, 124 48,546
1.59 46, 160 25, 508
1.68 46, 721 25, 154
1.76 11, 713 9,392
1.86 11,964 9,234
1.22 22, 294 14,368
1.29 22,439 14, 143
1.53
1.60
1952: January
February.
March
April
May
_June
July
August _ _
September
October
November
December _
75, 379 45, 081
75, 522 45, 541
75, 670 44, 370
75, 303 45, 451
74, 940 45, 366
74, 622 45, 217
74, 422 44, 814
74, 677 44, 664
75, 544 46, 871
76, 332 48, 579
76, 787 47, 657
77, 109 48, 781
1.67 43, 107 22, 434
1.66 43, 439 22, 676
1.70 43, 691 22, 408
1.66 43, 597 22, 956
1.66 43, 494 22, 628
1.65 43, 188 21, 750
1.66 43,074 21, 498
1.67 43, 380 22, 270
1.60 43, 454 23, 921
1.56 43, 689 24, 651
1.61 43, 885 24, 271
1.58 44, 190 24, 706
1.92 11, 165
1.91 10, 956
1.94 10, 977
1.90 10, 895
1.92 10, 775
1.99 10, 928
2.01 11,027
1.94 11,069
1.82 11,119
1.77 11, 248
1.80 11, 362
1.78 11, 327
9,477
9,444
8,929
9,132
8,888
9,453
9,649
9,035
9,380
9,726
9,360
9,665
1.18 21, 107 13, 170
1.17 21, 127 13, 421
1.23 21,002 13, 033
1.20 20, 811 13, 363
1.22 20, 671 13, 850
1.15 20, 506 14, 014
1.14 20, 321 13, 667
1.22 20, 228 13, 359
1.18 20, 971 13, 570
1.15 21, 395 14, 202
1.21 21, 540 14, 026
1.17 21, 592 14, 410
1.61
1.57
1.62
1.56
1.50
1.47
1.49
1.52
1.52
1.49
1.53
1.50
1953; January _ _ __
February
March _
April
May
June
July
August _September
October
November
December '
77, 130 47, 819 1.61 44, 330 24, 507 1.81 11, 282
77, 693 48, 533 1.60 44, 581 24, 724 1.80 11, 405
78, 266 49, 671 1.57 44, 797 25, 763 1.73 11, 488
78, 996 50, 188 1.57 45, 164 26, 360 1.71 11, 445
79, 678 49, 395 1.61 45, 673 25, 816 1.76 11, 550
80, 167 50, 001 1.60 46, 160 25, 880 1.77 11, 713
81, 116 50, 399 1.60 46, 485 26, 367 1.76 11, 888
81, 586 48, 138 1.69 46, 888 25, 067 1.86 11, 923
82,000 48, 653 1.68 47, 087 25, 380 1.85 11, 989
81, 805 48, 289 1.70 47, 044 24, 990 1.88 12, 041
81, 124 47, 897 1.70 46, 721 24, 559 1.91 11, 964
(7)
(7)
(7)
(7)
(0
(7)
(7)
9,172 1.23 21, 518 14, 140
9,295 1.22 21, 707 14, 514
9,471 1.21 21, 981 14, 437
9,548 1.20 22, 387 14. 280
9,155 1.26 22, 455 14, 424
9,709 1.20 22, 294 14, 412
9,563 1.23 22, 743 14, 469
8,998 1.32 22, 775 14, 073
9,291 1.29 22, 924 13, 982
9,259 1.30 22, 720 14, 040
9,146 1.31 22, 439 14, 192
(7) 14,100
(7)
(7)
1.52
1.49
1.51
1.55
1.55
1.55
1.56
1.62
1.63
1.63
1.59
(7)
1 Beginning in 1951, the estimates of retail sales and inventories are based on a new method of estimation adopted by the Bureau of the Census. Estimates shown in this table for 1939-50 are on the previously
published basis and estimates for 1951-53 are on the new basis. For a description of the retail sales and
inventory
series, see Survey of Current Business, September and November 1952.
2
Seasonally adjusted, end of period.
3 Monthly average shown for year and half-year and total for month.
4
For annual and semiannual periods weighted average inventories to average monthly sales; for monthly
data, ratio of average end of current and previous months inventories to sales for month.
5 Where December data not available, data for year and half-year calculated on basis of no change from
November.
«Preliminary estimate.
* Not available.
NOTE.—The inventory figures in this table do not agree with the estimates of "change in business inventories" included in the gross national product since these figures cover only manufacturing and trade
rather than all business, and show inventories in terms of current book value without adjustment for
revaluation.
Source: Department of Commerce.
197
TABLE G-30.—Manufacturers' new orders, sales, and inventories, 1939-53
[Millions of dollars, not seasonally adjusted]
New orders *
Inventories s
Sales i
Durable-goods industries Nondurable-goods
industries
Dura- Non- Dura- Nonble- durable- ble- durablegoods goods goods goods
PurPur- Goods- FinGoods- Finindus- indus- indus- indus- chased
inished chased
intries
tries
tries
tries
shed
mate- process
proc- goods
goods materials
rials
ess
Period
Monthly average:
1939
2,169
3,186
1,950
3,162
1, 802
1,482
2,048
2,520
3,374
5,321
8,048
6,770
5,472
3,431
4,482
5,297
5, 934
6,434
2,473
3,802
5,164
6,863
7,337
3,386
4,371
5,266
5,958
6,446
2,106
3,160
3,733
3,919
3,393
1,983
3,152
4,561
5,210
5,014
2,214
2,286
2,142
2,042
2,024
2,735
4,110
4,420
4,654
4,760
852
1,114
1,224
1,289
1,334
2,983
3,202
3,267
3,057
3,054
3,944
5, 942
6,365
7,482
6,592
6,588
7,751
9, 256
9,870
9,311
6,268
4,986
6,695
7, 594
7,070
6,605
7,631
9,222
10,036
9,347
3,208
4,601
5,254
5,757
4, 719
3,497
4,558
5,120
5, 319
4,651
2,059
2,791
3,893
4,650
4,585
5, 040
6,657
7,353
7,400
6,699
1,440
1,739
2,122
2,157
2,032
3,213
4,274
5,290
6,499
6,351
1950
1951
1952
19533
10, 314
12, 718
11,888
11,564
10, 665
11,672
1 1, 822
12,529
8,804
10, 433
11,206
12,848
10,480
11, 772
11, 840
12, 584
6,216
7,616
7,660
8,376
5, 885
8,335
9,572
9,848
4,559
6,699
6,813
7,859
8,522
9,377
8,771
8,098
2,409
2,665
2, 899
2,962
6,586
8,364
8,114
8,516
1952: First half_ _.
Second half.
12, 131
11,645
11,515
12, 130
10, 893
11, 519
11,550
12,129
7,276
7,660
9,150
9,572
7,092
6,813
8,596
8,771
2,631 8,228
2,899 8,114
1953: First half....
Second half a_
12, 763
10, 126
12, 388
12, 698
13, 107 12, 335
12,537 12, 883
8,140
8,376
10, 162
9,848
7,678
7,859
8,057
8,098
3,288 8,358
2,962 8,516
11, 494
11, 081
13, 465
12, 803
10, 382
13, 561
11,354
10, 661
12, 595
11,905
10, 756
12, 600
11, 628
11, 635
11, 609
11, 400
11, 370
11,447
11, 295
11, 840
12, 615
13, 488
11, 701
11, 839
10, 396
10, 756
11, 322
11, 326
11, 179
10, 378
8,876
10,608
12, 069
13, 071
11, 883
12,608
11, 767
11, 616
11, 817
11, 604
11, 292
11, 202
11, 102
11, 849
12, 582
13, 608
11, 696
11, 939
7,581
7,534
7,518
7, 416
7,384
7,276
7,189
7,337
7 411
7,568
7, 63C
7,660
8,597 ' 6,913
6,999
8,846
9,020
7,110
9,162
7,235
7,282
9,258
7,092
9,150
9,033
6.828
9,162
6,618
9,225
6,511
9,274
6,543
9,311
6,606
9,572
6,813
9,266
9,141
9, 022
8,888
8,772
8,596
8,548
8,362
8, 425
8,490
8,600
8,771
2,737
2,795
2,788
2,738
2,662
2,631
2,780
2,880
2,906
2,998
2,957
2,899
8,378
8,279
8,275
8,176
8,050
8,228
8,283
8,349
8,181
8,047
8,133
8,114
12, 786
12, 266
13, 404
12, 959
12, 176
12, 985
11, 588
10, 133
10, 090
9,83
8,98
12, 065
11, 743
12, 945
12, 520
12,388
12, 669
12, 244
12, 539
13, 145
13, 442
12, 118
12, 021
12, 345
13, 813
13, 702
13, 178
13, 586
12, 318
12,48
12,91
13, 223
11,74
11, 987
11, 720
12, 946
12, 593
12, 290
12, 473
12, 383
12, 793
13, 247
13, 612
12,38
7,520
7,477
7,552
7,612
7,902
8,140
8,325
8,470
8,522
8,48
8,37
9,708
9,964
10, 137
10, 191
10, 167
10, 162
10, 191
10, 184
10, 150
10, 010
9,848
7,024
7,098
7,301
7, 529
7,702
7,678
7,588
7,568
7,601
7,773
7,859
8, 586
8, 553
8,50(
8,297
8,126
8,057
7,999
7,848
8,046
8,092
8,098
3,027
3,080
3,098
3,180
3,201
3,288
3,236
3,222
3,186
3,029
2,962
8,171
8,092
7,961
7,986
8,189
8,358
8,408
8, 490
8, 405
8,406
8,516
1940
1941
1942
1943
1944
1945
1946
1947
1948
1949.
_
1952* January
February
March
April
May
__ _ _
June
July
August
September
October
November
December
1953: January
February
March
April
Mav
June
July ...
August
September
October
November
_.
...
786 2,878
1 Monthly average shown for year or half-year and total for month.
2
Book value, end of period. This series has not been revised and is not directly comparable with the
sales and orders figures in this table and the inventory data in appendix table G-29.
s Based on data through November.
Source: Department of Commerce.
PRICES
TABLE G-31.—Consumer price index, 1929-53
For city wage-earner and clerical-worker families
[1947-49=100]
All
items
Period
Monthly average:
1929
Housing
Food
Total Rent
Other
Per- Readand goods
Ap- Trans- Medical
sonal ing
recreaand
parel portation
care
care
tion services
73.3
65.6
0)
117.4
60.3
0)
71.4
65.0
58.4
55.3
57.2
62.4
51.4
42.8
41.6
46.4
0)
114.2
108.2
97.1
83.6
78.4
58.9
53.6
47.5
45.9
50.2
(0
0)
58.7
59.3
61.4
60.3
59.4
49.7
50.1
52.1
48.4
47.1
78.2
80.1
83.8
86.5
86.6
50.6
51.0
53.7
53.4
52.5
1940
1941
1942
1943
1944
59.9
62.9
69.7
74.0
75.2
47.8
52.2
61.3
68.3
67.4
0)
0)
0)
0)
0)
0)
0)
0)
0)
0)
86.9
88.4
90.4
90.3
90.6
53.2
55.6
64.9
67.8
72.6
0)
(0
0)
0)
(0
0)
0)
0)
0)
0)
1945
1946
1947
1948
1949
76.9
83.4
95.5
102.8
101.8
68.9
79.0
95.9
104.1
100.0
0)
0)
95.0
101.7
103.3
90.9
91.4
94.4
100.7
105.0
76.3
83.7
97.1
103.5
99.4
(0
0)
90.6
100.9
108.5
0)
0)
94.9
100.9
104.1
0)
(0
97.6
101.3
101.1
0)
0)
95.5
100.4
104.1
102.8
111.0
113.5
114.4
101.2
112. 6
114.6
112.8
106.1
112.4
114.6
117.7
108.8
113.1
117.9
124.1
98.1
106.9
105.8
104.8
111.3
118.4
126.2
129.7
106.0
111.1
117.2
121.3
101.1
110.5
111.8
112.8
103.4
106.5
107.0
108.0
105.2
109.7
115.4
118.2
1952: First half
Second half
112.9
114.2
113.8
115.4
114.0
115.2
116.8
118.9
106.3
105.4
124.5
128.0
115.8
118.7
111.3
112.2
106.6
107.4
114.8
115.9
1953* First half
Second half _ .
113.8
115.0
112.3
113.3
116.9
118.4
122.1
126.1
104.6
105.0
129.3
130.1
120.0
122.6
112.5
113.1
107.8
108.2
117.2
119.2
1952' January 15
113.1
February 15
112.4
March 15
112.4
April 15 ..
112.9
May 15
113. 0
June 15
113.4
July 15
_. 114.1
August 15
114.3
September 15 . .- .. 114.1
October 15
114.2
November 15
114.3
December 15 _. _114.1
115.0
112.6
112.7
113.9
114.3
114.6
116.3
116.6
115.4
115.0
115.0
113.8
113.9
114.0
114.0
114.0
114.0
114.0
114.4
114.6
114.8
115.2
115.7
116.4
116.0
116.4
116.7
116.9
117.4
117.6
117.9
118.2
118.3
118.8
119.5
120.7
107.0
106.8
106.4
106.0
105.8
105. 6
105.3
105.1
105.8
105. 6
105.2
105.1
122.8
123.7
1 24. 4
124.8
125.1
126.3
126.8
127.0
127.7
128.4
128.9
128.9
114.7
114.8
115.7
115.9
116.1
117.8
118.0
118.1
118.8
118.9
118.9
119.3
111.0
111.1
111.0
111.3
111.6
111.7
111.9
112.1
112.1
112.3
112.4
112.5
107.2
106.6
106.3
106.2
106.2
106.8
107.0
107.0
107.3
107.6
107.4
108.0
113.2
114.4
114.8
115.2
115.8
115.7
116.0
115.9
115.9
115.8
115.8
115.9
1953: January 15
113.9
February 15
113.4
March 15
113.6
April 15 .
113.7
May 15
114.0
Junel5
_ . _ 114. 5
July 15
114.7
August 15
115.0
September 15
115.2
October 15
115.4
November 15
115.0
December 15
114.9
113.1
111.5
111.7
111.5
112.1
113.7
113.8
114. 1
113.8
113.6
112.0
112.3
116.4
116.6
116.8
117.0
117.1
117.4
117.8
118.0
118.4
118.7
118.9
118.9
121.1
121.5
121. 7
122.1
123.0
123.3
123.8
125.1
126.0
126.8
127.3
127.6
104.6
104.6
104.7
104.6
104.7
104.6
104.4
104.3
105.3
105.5
105. 5
105.3
129.3
129.1
129.3
129.4
129.4
129.4
129.7
130.6
130.7
130. 7
130.1
128.9
119.4
119.3
119.5
120.2
120.7
121.1
121.5
121.8
122.6
122.8
123.3
123.6
112.4
112.5
112.4
112.5
112.8
112.6
112.6
112.7
112.9
113.2
113.4
113.6
107.8
107.5
107.7
107.9
108.0
107.8
107.4
107.6
107.8
108.6
108.9
108.9
115.9
115.8
117.5
117.9
118.0
118.2
118.3
118.4
118 5
119-7
120.2
120.3
1930
1931
1932
1933
1934
_.
1935
1936
1937
1938
1939
1950
1951
1952
1953
. ..
- _
..
.
8
8
i Not available.
Source: Department of Labor.
199
I
0)
0)
0)
0)
0)
0)
0)
0)
0)
(0
0)
0)
0)
(0
(')
(0
0)
0)
0)
0)
0)
0)
0)
0)
0)
0)
8
8
8 80)
80) 8
0)
0)
8
0)
0)
8(0
0)
8
8
8
8(0
(0
0)
(0
(0
(0
0)
0)
96.1
100.5
103.4
TABLE G-32.—Wholesale priceTindexf 1929-53
[1947-49=100]*
All commodities other than farm products
and foods
All
commodities
Period
Farm
products
Processed
foods
Total
Textile
products
and
apparel
Monthly average:
1929
ChemiRubber Lumber
cals
and
and
and
wood
allied
prodprodproducts
ucts
ucts
61.9
58.6
58.5
65.5
(3)
(3)
83.5
31.9
56.1
47.4
42.1
42.8
48.7
49.3
36.2
26.9
28.7
36.5
53.3
44.8
36.5
36.3
42.6
60.9
53.6
50.2
50.9
56.0
§
8( )
(3)
(33)
()
51.2
53.7
73.0
62.0
53.8
56.8
65.8
29.4
23.8
20.3
24.2
28.5
52.0
52.5
56.1
51.1
50.1
44.0
45.2
48.3
38.3
36.5
52.1
50.1
52.4
45.6
43.3
55.7
56.9
61.0
58.4
58.1
(33)
(3)
(3)
(3)
()
56.0
56.4
59.0
55.9
55.8
66.4
71.7
84.4
82.7
86.3
27.4
28.7
33.7
30.8
31.6
51.1
56.8
64.2
67.0
67.6
37.8
46.0
59.2
68.5
68.9
43.6
50.5
59.1
61.6
60.4
59.4
63.7
68.3
69.3
70.4
(3)
(33)
(3)
(3)
()
56.6
61.6
69.3
69.5
70.2
80.2
86.5
100.6
103.3
102.0
35.2
41.8
45.4
48.0
51.9
68.8
78.7
96.4
104.4
99.2
71.6
83.2
100.0
107.3
92.8
60.8
77.6
98.2
106.1
95.7
71.3
78.3
95.3
103.4
101.3
(3)
(3)
100.1
104.4
95.5
70.6
76.3
101.4
103.8
94.8
98.9
99.4
99.0
102.1
98.9
52.5
60.3
93.7
107.2
99.2
1950
1951
1952
_1953*
103.1
114.8
111.6
110.1
97.5
113.4
107.0
97.0
99.8
111.4
108.8
104.6
105.0
115. 9
113.2
114.0
99.2
110.6
99.8
97.3
96.3
110.0
104.5
105.7
120.5
148.0
134.0
125.0
113.9
123.9
120.3
120.2
1952: First half
Second half
112.1
111.2
108.3
105.7
109.0
108.6
113.5
112.9
100.7
98.9
105.2
103.8
140.6
127.4
120.4
120.1
1953: First half 4
Second half
109.7
110.4
98.0
96.0
104.3
105.0
113.4
114.7
97.9
96.7
104.7
106.7
125.7
124.2
121.5
118.9
113.0
112. 5
112.3
111.8
111.6
111.2
111.8
112.2
111.8
111.1
110.7
109.6
110.0
107.8
108.2
108.7
107.9
107.2
110.2
109.9
106.6
104.9
103.6
99.2
110.1
109.5
109.2
108.0
108.6
108.5
110.0
110.5
110.3
108.5
107.7
104.3
114.3
114.2
113.8
113.3
113.0
112.6
112.5
113.0
113.2
113.0
112.8
112.9
103.3
102.1
100.6
99.9
99.3
99.0
98.9
99.1
99.5
99.2
98.6
98.2
106.7
105.9
105.4
104.8
104.3
104.3
104.2
104.0
104.0
103.9
103.5
103.3
144.1
143.1
142. 0
140.6
140.4
133.4
130.0
127.8
126.3
126.0
126.4
127.7
120.1
120.3
120.5
120.9
120.7
119.9
120.2
120.5
120.4
120.2
119.7
119.7
109.9
109.6
110.0
109.4
109.8
109.5
110.9
110.6
111.0
110.2
109.8
110.1
99.6
97.9
99.8
97.3
97.8
95.4
97.9
96.4
98.1
95.3
93.7
94.5
105.5
105.2
104.1
103.2
104.3
103.3
105.5
104.8
106.6
104.7
103.8
104.3
113.1
113.1
113.4
113.2
113.6
113.9
114.8
114.9
114.7
114.6
114.5
114.6
98.8
98.5
97.5
97.4
97.6
97.4
97.5
97.5
96.9
96.5
96.2
95.8
103.6
103.6
104.2
105.5
105.5
105.6
106.2
106.3
106.7
106.7
107.2
107.1
127. 3
126.2
125.7
124.8
125.4
125.0
124.6
123.5
124.0
124.2
124.3
124.8
120.5
121.1
121.7
122.2
121.8
121.5
121.1
120.4
119.2
118.1
117.3
117.4
1930
1931
1932
1933
1934
._
1935
1936
1937
1938
1939
1940
1941
1942_
1943
1944
-
.
_-
--
1945
1946
1947
1948.
1949
-
1952: January
February
March
April
May
June _..
July .
August
September
October
November
December
1953: January .
February
March
April
May
June
July
August
September
October
November 4
December
.
_
_
See footnotes at end of table.
2OO
3
TABLE G-32.—Wholesale price index, 1929-53—Continued
[1947-49=100] *
All commodities other than farm products and foods (continued)
Hides,
skins,
and
leather
products
Period
Monthly average:
1929 ..
Fuel,
power,
and
lighting
materials
Pulp,
paper,
and
allied
products
Metals Machinery and
and
metal
motive
prodproducts
ucts
Furniiture
and
other
household
durables
• ' • »3
NonTobacco ^•^msm
metal- manulic
factures Miscel-^
minerand
als
bottled laneous
(struc- bever-2
tural)
ages
59.3
70.2
(3)
67.0
(3)
69.3
72.6
86.6
(3)
1930
1931
1932
1933
1934
54.4
46.8
39.7
44.0
47.1
66.5
57.2
59.5
56.1
62.0
(3)
60.3
54.1
49.9
50.9
56.2
(3)
68.2
62.8
55.4
55.5
60.2
72.4
67.6
63.4
66.9
71.6
87.1
84.6
81,4
72.8
76.0
(3)
(33)
()
1935 ..
1936
1937
1938
1939
48.7
51.9
56.9
50.5
52.0
62.2
64.5
65.7
64.7
61.8
71.6
71.7
73.4
71.1
69.5
75.9
75.8
76.5
76.4
76.4
8
8( )
1940
1941
1942
1943
1944
54.8
58.9
64.0
63.9
63.4
60.7
64.5
66.4
68.4
70.3
(3)
64.2
74.6
101.0
102.1
96.9
71.1
76.2
90.9
107.1
101. 9
._
104.6
120.3
97.2
98.5
1952- First half
Second half . .
1953: First half
Second half * _ _ _ _ _
.._
1945 _.
1946
1947
1948
1949
1950
1951
1952
1953*
..
1952: January
February
March
April
May
June _
July
AugustSeptember
October
November
December
1953: January
February
March
April
May
June
July
August
September
October
November 4
December
__
_ _
„_- . _
_
_
„-_ _ _
_
8
8
(33)
()
(33)
(3)
()
(33)
()
(33)
(3)
()
(3)
(3)
56.2
57.3
65.6
63.1
62.6
8
8
8( )
8
65.3
59.8
60.6
67.2
65.6
65.4
62.8
64.0
64.9
64.8
64.8
66.2
68.6
71.2
71.0
71.0
66.8
71.2
76.8
76.4
78.4
69.7
71.3
74.1
74.5
75.9
77.3
78.1
79.1
83.0
83.4
98.6
102.9
98.5
65.9
73.9
91.3
103. 9
104.8
71.6
80.3
92.5
100.9
108.6
78.6
83.0
95.6
101.4
103.1
79.1
84.2
93.9
101.7
104.4
85.8
89.7
97.2
100.5
102.3
00
(3)
103.0
106. 7
106.6
109.4
100.9
119.6
116.5
116.1
110.3
122.8
123.0
126.9
108.6
119.0
121.5
123.0
105.3
114.1
112.0
114.2
106.9
113.6
113.6
118.2
103.5
109.4
111.8
115.4
96.6
104.9
108.3
97.8
97.4
97.1
106.7
106.4
117.5
115.6
122.2
123.8
121.5
121.4
112.0
111.9
113.0
114.2
111.6
112.1
109.6
107.0
98.8
98.2
107. 9
111.0
115.5
116.8
125.3
128.4
122.0
124.0
113. 5
114.8
116.1
120.3
113.9
117.0
100.0
95.7
102.2
99.5
98.0
94.1
94.7
95.9
96.2
96.5
96.5
96.6
97.6
99.0
107.4
107.2
107.4
106.3
106.0
105.9
106.0
105.8
106.2
106. 6
106.7
107.2
118.2
118.3
117. 7
117.4
116.9
116.7
115. 3
115.6
115.6
115.5
115.5
115.9
122.4
122.6
122.6
122.5
121.8
121.1
121.9
124.1
124.6
124.1
123.9
124.0
120.8
122.0
121.8
121.6
121.6
121.3
121.4
121.4
121.5
121.3
121.4
121.4
112.3
112.4
111.9
112.1
111.7
111.6
111.6
111.5
112.0
112.0
112.1
112.3
112.9
112.9
112.9
112.8
112.9
113.8
113.8
113.8
113.8
114.4
114.5
114.6
109.4
112.0
112.0
112.0
112.0
112.0
112.0
112.0
112.1
112.1
112.1
112.1
111.1
111.4
109.2
109.5
108.4
108.1
105.5
108.9
108.3
108.4
105.7
105.1
97.3
98.0
98.1
97.9
100. 4
101.0
100.0
99.9
99.7
97.1
97.1
95.6
107.8
108.1
108.4
107.4
107.1
108.3
111.1
111.0
110.9
111.2
111.2
110.5
115. 8
115.3
115.1
115. 3
115.4
115.8
115.8
116.2
116.9
117.5
117.3
117.1
124.0
124.6
125.5
125.0
125.7
126.9
129. 3
129.4
128.5
127.9
127.9
127.6
121.5
121.6
121.8
122.0
122.4
122.9
123.4
123.7
124.0
124.1
124.2
124.3
112.7
112.9
113.1
113.9
114.1
114.3
114.7
114.8
114.9
114.8
114.9
114.9
114.6
114.6
115.1
116.9
117.2
118.1
119.4
119.6
120.7
120.7
120.8
120.8
111.9
111.9
114.8
114.8
114.8
114.9
115.6
115.6
116.2
118.1
118.1
118.1
103.0
101.2
101.7
98.5
99.7
95.8
95.3
96.4
94.7
94.4
93.2
100.1
3
3
()
3
8
8
100.8
103. 1
96.1
1 This does not replace the former index (1926=100) as the official index prior to January 1952. These data from
January 1947 through December 1951 represent the revised sample and the 1947-49 weighting pattern. Prior to
JanuaryTl947 they are based on the month-to-month movement of the former index. The only official index up
to and including December 1951 is the former monthly index (1926=100).
2 The data from January 1947 through January 1953 differ from the official series due to a change in the method
of eliminating excise taxes and discounts.
3 Not available.
4 Preliminary estimates.
Source: Department of Labor.
2OI
TABLE G-33.—Indexes of prices received and prices paid by farmers, and parity ratioy 1929-53
[1910-14=100]
Prices paid for items Parity
index
used in
(prices
Prices
paid,
received
by
interest,
taxes, and farmers
Living Produce
wage
tion
rates)
Period
Monthly average:
1929
1930. 1931
1932
1933
1934
_
_
_
_
1935
1936....
1937
1938
1939
1940
1941
1942
1943
1944
..._
_
1945
1946
1947
1948
1949
1950
1951
1952
1953
_
_
1952: First half..
Second half
1953: First half
Second half
_.
1952: January 15__
February 15
March 15
April 15...
May 15
June 15
July 15..
August 15
September 15
October 15
November 15
December 15
1953: January 15
February 15
March 15
April 15
May 15
June 15
July 15
August 15.
_
September 15.
October 15
November 15..
December 15.
_
_
_
__
_
1
Ratio
2
Parity
ratioi
154
146
160
148
144
124
106
108
122
135
113
114
151
130
112
109
120
125
87
65
70
90
67
58
64
75
124
124
128
122
120
122
122
132
122
121
124
124
131
124
123
109
114
122
97
95
92
93
78
77
121
130
149
166
175
123
130
148
164
173
124
133
152
171
182
100
123
158
M92
M96
81
92
104
112
108
182
202
237
251
243
176
191
224
250
238
190
208
240
260
251
2206
2234
275
285
249
108
112
115
110
246
268
271
270
246
273
274
253
256
282
287
279
256
302
288
258
100
107
100
92
271
271
279
270
289
285
292
284
101
100
269
271
258
281
278
262
254
93
91
271
271
271
271
271
272
273
273
271
269
269
269
278
281
280
281
281
273
273
274
271
269
266
264
288
290
289
290
290
288
287
288
286
284
282
281
300
289
288
290
293
292
295
295
288
282
277
269
104
100
100
100
101
101
103
102
101
268
266
269
269
270
271
271
273
270
270
270
270
265
261
261
257
257
248
250
249
247
246
248
250
284
281
282
280
280
277
279
279
277
276
277
278
267
263
264
259
261
259
259
258
256
250
249
252
94
94
94
92
93
94
93
92
92
91
90
91
96
of prices received by farmers to parity index.
Includes wartime subsidy payments paid on beef cattle, sheep, lambs, milk, and butterfat between
October 1943 and June 1946.
Source: Department of Agriculture.
2O2
TABLE G-34.—Indexes of wholesale prices and cost of living in the United States and foreign
countries, selected dates
[1948=100]
Wholesale prices
Country
January
1953
Latest data
Index
Date, 1953
Cost of living
January
1953
Latest data
Index
Date, 1953
United States . _ _
105
105 December
Africa and Near
East:
Algeria J
Egypt
- Iran
Iraq
_
._
Israel
Lebanon
Morocco
Tunisia
Union of South Africa..
131
105
100
106
194
81
156
166
150
127
110
128
90
248
74
137
160
150
September
September
November
December
November
October
November
October
November
142
105
102
100
192
92
«167
2167
128
139 November
105 September
114 November
87 December
220 November
85 October
November
2161
»164 October
131 November
243
109
138
158
240 December
106 December
131 November
154 November
»204
>106
124
172
3203
» 106
123
167
December
December
October
November
120
121
129
97
137
153
120
170
142
99
106
150
116
154
128
96
133
152
111
179
138
98
109
149
110
118
«124
116
128
134
102
126
•131
104
110
128
107
138
126
117
128
137
101
127
130
104
114
130
November
October
3d quarter
November
November
December
December
October
4th quarter
December
October
November
Western European countries:
Austria
Belgium
Denmark
France
Germany 4 (Federal Republic).
Greece _
Ireland
Italy
Netherlands
Norway
Portugal
Spain
Sweden _ _ _.
Switzerland
Turkey
United Kingdom
Latin America:
Argentina _
Brazil
Chile
Costa Rica
Cuba
Dominican Republic. -.
El Salvador
Guatemala _.
Mexico
_
Nicaragua
Paraguay
Peru
Venezuela
<•)
181
235
101
(«)
94
144
109
149
153
694
198
101
(
ls
278
97
(fl)
90
155
115
152
167
918
204
98
Nownber
November
October
November
October
December
November
October
November
November
November
December
111
112
November
December
November
December
October
August
October
Novornb^r
322
146
214
122
292
107
(«)
2119
3145
2152
1,010
157
2 101
318 October
166 November
318 November
121 November
290 October
103 November
(8)
2121
October
3141 November
October
2161
1,180 August
170 October
295 November
135 2d quarter
112 September
200 October
136 November
135 3d quarter
95 December
143 October
(6)
October
August
November
(6)
Pacific and Far East:
Australia
India
Indochina *
Japan *
New Zealand ._
Philippines
Thailand
187
103
132
145
139
102
104
193
106
169
146
138
99
104
October
December
October
November
September
December
Septftmhftr
»135
104
155
123
«132
100
127
Other:
Canada
Finland _
115
162
113
156
November
November
120
155
120
157
i1949=100.
2 Food prices,
a Retail prices.
< 1950=100.
* 1st quarter.
6
Not available.
NOTE.—The components of the indexes are not always the same for each country.
Source: International Monetary Fund.
November
203
December
November
CREDIT, MONEY SUPPLY, AND FEDERAL FINANCE
TABLE G—35.—Short- and intermediate-term consumer credit outstanding, 1929-53
[Millions of dollars]
Instalment credit
End of period
Total
Total
1929
1935
1936
1937
1938
1939
1940_
1941
1942 _
1943
1944
.
.
1945
1946
1947
1948
1949
.
1950
1951.
1952
1953 «
1952: January
February _ _
March
April
May
June
July
August
September
October..
November
December
_
1953: January
February
March
April
Mav
June
_July
August
September
October
November _ _ .
December'
Total
Charge
accounts
Other 5
(4)
(4)
(4)
(4)
3,293
1,602
1,691
2,687
2,207
1, 521
1, 588
1,871
(44)
(4)
(4)
(4)
(44)
( 4)
()
(4)
4
(44)
(44)
()
(44)
()
(4)
3,080
2, 553
2, 046
1,894
2, 033
1, 476
1. 265
1,020
990
1,102
1,604
1,288
1,026
904
931
4,911
6,135
6, 689
6, 338
7,222
2, 694
3,623
4,015
3,691
4,503
(44)
( 4)
(4)
()
1,497
(44)
( 4)
(4)
()
1,620
(44)
(4)
( 4)
()
298
(44)
()
(44)
()
1,088
2,217
2,512
2,674
2,647
2,719
1,183
1,300
1,336
1,362
1,414
1,034
1,212
1,338
1, 285
1,305
8,338
9,172
5,983
4,901
5,111
5, 514
6,085
3,166
2. 136
2,176
2,071
2,458
742
355
397
1,827
1,929
1, 195
819
791
371
376
255
130
119
1, 245
1,322
974
832
869
2, 824
3,087
2,817
2,765
2,935
1,471
1,645
1,444
1,440
1,517
1, 353
1,442
1,373
1,325
1, .18
5,665
8,384
11, 570
14, 411
17, 104
2, 462
4, 172
6, 695
8, 968
11,516
455
981
1,924
3,054
4,699
816
1,290
2, 143
2, 842
3,486
182
405
718
843
887
1, 009
1,496
1,910
2,229
2,444
3,203
4,212
4,875
5, 443
5, 588
1,612
2,076
2, 353
2,713
2,680
1,591
2,136
2, 522
2,730
2,908
20, 813
21, 468
25, 827
28, 800
14, 490
14, 837
18, 684
21, 800
6,342
6,242
8,099
10, 300
4, 337
4,270
5,328
5,600
1,006
1,090
1,406
1,600
2, 805
3, 235
3,851
4,300
6,323
6,631
7,143
7,000
3,006
3, 096
3,342
3,200
3,317
3,535
3,801
3,800
20, 945
20, 690
20, 661
21, 009
21,796
22, 554
22, 867
23, 135
23, 520
24, 147
24, 611
._ 25, 827
14, 660
14, 566
14, 566
14, 753
15, 341
16, 073
16, 509
16, 769
17, 090
17,611
17, 961
18,684
6, 146
6,111
6,085
6,180
6, 531
6,965
7,193
7,264
7,380
7,630
7,856
8,099
4,175
4, 092
4, 062
4,075
4,201
4,360
4,469
4,570
4,699
4, 895
4, 962
5,328
1,079
1,078
1,079
1,100
1,142
1,185
1,229
1,268
1, 312
1, 362
1,393
1,406
3,260
3,285
3,340
3,398
3, 467
3,563
3,618
3,667
3, 699
3,724
3,750
3,851
6,285
6,124
6,095
6,256
6, 455
6, 481
6,358
6, 366
6,430
6, 536
6,650
7,143
2,749
2,494
2,414
2,541
2,666
2,671
2,585
2,590
2,650
2,789
2,839
3,342
3,536
3,630
3,681
3,715
3,789
3,810
3,773
3,776
3,780
3,747
3,811
3,801
25, 674
25, 504
25, 946
26, 455
27, 056
27, 411
27, 581
27, 810
27, 979
28, 166
28, 252
28, 800
18, 851
18, 982
19, 391
19, 767
20, 213
20, 635
21,004
21,218
21, 347
21,486
21, 586
21, 800
8,273
8,480
8,799
9,111
9,432
9, 692
9,973
10, 136
10, 232
10, 337
10, 358
10, 300
5,288
5,208
5,217
5, 217
5,272
5, 333
5, 351
5, 362
5,352
5, 366
5, 406
5,600
1,403
1,404
1,416
1,435
1, 462
1,493
1,516
1,534
1,562
1,585
1, 604
1,600
3,887
3,890
3,959
4,004
4,047
4,117
4,164
4,186
4,201
4,198
4,218
4,300
6,823
6,522
6,555
6,688
6,843
6,776
6,577
6,592
6,632
6,680
6, 666
7,000
2,975
2,678
2,613
2,682
2,763
2,781
2,705
2,668
2,716
2,811
2,840
3,200
3,848
3,844
3,942
4,006
4,080
3,995
3,872
3,924
3,916
3,869
3,826
3,800
5, 767
4,760
3, 567
3,482
3,904
.
Eepair
and
Permodern- sonal
ization loans
2
loans
3,151
6,444
1930
1931__
1932
1933
1934
Other
Autoconmobile sumer
paper 1 goods
paper 1
Noninstalment credit
1
()
()
()
8( )
4
1
Includes all consumer credit extended for the purpose of purchasing automobiles and other consumer
goods
and secured by the items purchased.
2
Includes only such loans held by financial institutions; those held by retail outlets are included in
"other
consumer goods paper."
3
Single-payment loans and service credit.
< Not available.
• « Estimates based on incomplete data; by Council of Economic Advisers.
Source: Board"of Governors of the Federal Eeserve System (except as noted).
204
TABLE G-36.—Mortgage debt outstanding, by type of property mortgaged, 7939-53
[Billions of dollars]
Nonfarm properties
All
properties
End of period
1939
Total
1- to 4-family
houses
Multifamlly
and
commercial
properties *
Farm
properties
35.5
28*9
16.3
12.5
6.6
36.5
37.6
36.7
35.3
34.7
30.0
31. 2
30.8
29.9
29.7
17.3
18.4
18.2
17.8
17.9
12.6
12.9
12.5
12.1
11.8
6.5
6.4
6.0
5.4
4.9
35.5
41.8
48.9
56.2
62.7
30.8
36. 9
43.9
50.9
57.1
18.5
23.1
28.2
33.3
37.5
12.2
13.8
15.7
17.6
19.6
4.8
4.9
5.1
5.3
5.6
72.8
82.1
90.9
100.5
66.7
75.6
83.8
92.7
45.1
51.9
58.2
65.0
21.6
23.7
25.6
27.7
6.1
6.6
7.1
7.8
1952: First quarter 2 2
Second quarter
Third quarter 2 2
Fourth quarter
84.0
86.3
88.7
90.9
77.3
79.3
81.6
83.8
53.2
54.8
56.5
58.2
24.1
24.6
25.1
25.6
6.7
7.0
7.1
7.1
1953: First quarter 2 2
Second quarter
Third quarter 2 2
Fourth quarter
93.0
95.7
98.2
100.5
85.7
88.2
90.5
92.7
59.6
61.5
63.3
65.0
26.1
26.7
27.2
27.7
7.3
7.5
7.6
7.8
1940
1941
1942
1943
1944
1945
1946
1947
1948
1949
___
..
1950
1951
19522
1953 2 .
_
1 Derived figures which include negligible amount of farm loans held by savings arid loan associations.
Preliminary estimates.
Source: Board of Governors of the Federal Reserve System (compiled from data supplied by various
Government and private organizations).
2
205
TABLE G-37.—Deposits and currency, 1929-53
[Millions of dollars]
Total
deposits
and
currency
End of period »
Demand deposits adjusted
and currency 3
Total
U.S.
Time
Govdeposits ernad- 2 ment
Curjusted < derency Demand
posits *
deposits 3
outside adjusted
banks
54, 742
26, 366
3,557
22, 809
28, 189
187
1931
1932
1933
1934
53, 572
48, 379
45, 370
42, 551
48, 106
24, 572
21, 882
20, 397
19, 817
23, 114
3,605
4,470
4,669
4,782
4,655
20, 967
17, 412
15, 728
15, 035
18, 459
28, 676
25, 979
24, 457
21, 715
23, 156
324
518
516
1,019
1,836
1935
1936
1937
1938
1939
52, 726
57, 595
56, 781
59, 878
64, 733
27, 032
30,999
29, 597
31, 761
36, 194
4,917
5, 516
5, 638
5, 775
6,401
25, 483
23, 959
25, 986
29, 793
22,115
24, 241
25, 361
26, 218
26, 305
27, 059
1, 453
1,235
966
1,812
1,480
1944
71, 129
79,098
100, 500
123, 391
151, 428
42, 270
48, 607
62, 868
79, 640
90, 435
9, 615
13, 946
18, 837
23, 505
34, 945
38, 992
48, 922
60, 803
66, 930
27. 738
27, 729
28, 431
32, 748
39, 790
1945
1946
1947
1948
1949
176, 378
167, 500
172, 330
172, 693
173, 851
102, 341 26, 490
110, 044 "26, 730
113, 597 26, 476
111,599 26, 079
111,165 25, 415
75, 851
83, 314
87, 121
85, 520
85, 750
48, 452
53, 960
56, 411
57. 520
58, 616
25, 585
180, 574
189, 846
200, 449
205, 500
117,670
124, 537
129, 002
130, 700
25, 398
26, 303
27, 494
28, 000
92, 272
98, 234
101, 508
102, 700
59, 247
61, 447
65, 799
70, 300
3,657
3,862
5,648
4,500
188, 200
188, 000
188, 800
188, 700
189, 300
191, 358
193, 400
193,100
194, 100
196, 100
198, 900
200, 449
123, 500
121, 400
120, 500
121, 100
121, 300
121, 228
121, 900
122, 100
122, 900
125, 300
126, 800
129, 002
25, 600
25, 600
25. 700
25, 900
26, 000
26, 474
26, 200
26, 300
26, 600
26, 700
27, 400
27, 494
97, 900
95, 700
94, 800
95. 100
95. 300
94, 754
95, 700
95, 800
96, 400
98, 600
99, 400
101, 508
61.700
63, 676
63, 800
64, 100
3,000
4,600
5,800
4,900
4,900
6,454
7,600
6,900
6,700
5,900
7,300
198, 300
197, 400
196, 900
195, 400
195, 300
196, 634
201, 300
201, 100
201,100
201,700
203, 600
205, 500
127,300
26, 800
26, 900
26. 900
27, 000
100, 500
98, 300
97, 400
66, 100
66, 400
27, 369
96, 898
97, 400
1929
1930..
_
.
1940 .
1941..
_.
1942
1943.. _
.
1950
1951
1952
1953 6
1952: January
February. ....
March. __
April
May _
June
July
August
SeptemberOctober
November
December
1953* January
February
March
April . . . .
May .
June
July
_ .
August
September.
October
November8
December
.
. . .
._ .
...
125, 200
124, 200
125, 000
124, 500
124, 267
124, 600
124, 800
125, 100
127, 600
128, 100
130, 700
7,325
27,000
27,200
27,300
27, 500
27, 400
27, 900
28,000
62, 000
62, 400
62, 700
63,000
64,500
64,900
64,800
65, 799
66,800
98,000
97,500
67, 200
97,500
97,700
69,100
100, 300
100, 200
102, 700
67,600
68, 293
68, 400
68. 700
69, 600
69, 300
70, 300
1,121
2,762
9,201
11,003
21, 203
3,496
2,322
3, 574
4,070
5, 648
5,000
5,800
5,800
3,200
3,300
4,074
8,300
7,700
6,800
4,400
6,200
4,500
i June and December figures through June 1953 are for call dates. Other monthly data are for the last
Wednesday
of the month.
2
Includes deposits and currency held by State and local governments.
3
Includes demand deposits, other than interbank and U. S. Government, less cash items in process of
.
4
Includes deposits in commercial banks, mutual savings banks, and Postal Savings System, but excludes
interbank
deposits.
6
Includes U. S. Government deposits at Federal Reserve banks and commercial and savings banks and,
beginning with 1938, includes U. S. Treasurer's time deposits, open account.
« Estimates based on incomplete data; by Council of Economic Advisers.
NOTE.—Detail will not necessarily add to totals because of rounding.
Source: Board of Governors of the Federal Reserve System (except as noted).
206
TABLE G—38.—Loans and investments of all commercial banks, 1929—53
[Billions of dollars]
Total
loans
and
investments
End of period »
Loans
Total 2
1929— June 4
49.4
35.7
1930— June <
1931— June *
1932—June*
1933—June «
1934— June 4
48.9
44.9
36.1
30.4
32.7
34.5
29.2
21.8
16.3
15.7
36.1
39.6
38.4
38.7
40.7
15.2
16.4
17.2
16.4
17.2
_
43.9
50.7
67.4
85.1
105.5
-
Investments
Commercial
and industrial loans >
(8)
Total
U. S. Government
obligations
Other
securities
13.7
4.9
8.7
14.4
15.7
14.3
14.0
17.0
5.0
6.0
6.2
7.5
10.3
9.4
9.7
8.1
6.5
6.7
5.7
6.4
20.9
23.1
21.2
22.3
23.4
13.8
15.3
14.2
15.1
16.3
7.1
7.9
7.0
7.2
7.1
18.8
21.7
19.2
19.1
21.6
7.3
9.3
7.9
7.9
8.0
25.1
29.0
48.2
66.0
83.9
17.8
21.8
41.4
59.8
77.6
7.4
7.2
6.8
6.1
6.3
124.0
114.0
116.3
114.3
120.2
26.1
31.1
38.1
42.5
43.0
9.6
14.2
18.2
18.9
17.1
97.9
82.9
78.2
71.8
77.2
90.6
74.8
69.2
62.6
67.0
7.3
8.1
9.0
9.2
10.2
1950
1951
1952
1953 «
126.7
132.6
141.6
146.7
52.2
57.7
64.2
68.5
21.9
25.9
27.9
27.5
74.4
74.9
77.5
78.2
62.0
61.5
63.3
63.6
12.4
13.3
14.1
14.6
1952: January _ _
February
March
April
May
June
_.
July
August .
September
October ..
November.
December
132.8
132 2
132.5
132.3
133.1
134.4
136.8
136.6
137.1
139.4
141.7
141.6
57.5
57.6
57.8
58.2
58.5
59.2
59.7
60.2
61.2
62.4
63.4
64.2
25.6
25.6
25.8
25.2
24.9
25.3
25.1
25.5
26.2
26.9
27.5
27.9
75.3
74.7
74.7
74.1
74.5
75.2
77.0
76.3
75.9
77.0
78.3
77.5
62.0
61.3
61.1
60.5
60.7
61.2
62.9
62.0
61.6
62.9
64.1
63.3
13.3
13.4
13.6
13.7
13.8
14.0
14.1
14.4
14.3
14.2
14.2
14.1
140.8
140.1
140.0
138.5
138.1
138.0
143.2
143.1
143.0
143.9
145.5
146.7
63.9
64.1
65.2
65.3
65.4
65.0
65.6
66.0
66.3
67.1
67.3
68.5
27.5
27.4
27.9
27.8
27.6
27.4
27.4
27.5
27.7
27.7
27.6
27.5
76.9
76.0
74.8
73.2
72.7
72.9
77.6
77.1
76.7
76.8
78.2
78.2
62.8
61.9
60.5
58.9
58.3
58.6
63.2
62.6
62.2
62.3
63.7
63.6
14.2
14.1
14.3
14.4
14.4
14.3
14.3
14.5
14.5
14.5
14.5
14.6
1935
1936 .
1937
1938
1939
1940
1941
1942
1943
1944
1945
1946
1947
1948
1949
.
...
.-
1953: January
February
March
April
May
June. _
July
August
September.
October
November6
December
_.
_- __
__
8
8(»)
w(88)
c)
1
June and December figures through June 1953 are for call dates. Other monthly data are for the last
Wednesday
of the month.
3
Data are shown net. Includes commercial and industrial loans, agricultural loans, loans on securities,
real-estate loans, loans to banks, and "other loans," some of which represent consumer credit.
a Beginning with 1948, data are shown gross, i. e., before deduction of valuation reserves, instead of net as
for previous years. Prior to June 1947 and for months other than June and December, data are estimated
on4 the basis of reported data for all insured commercial banks and for weekly reporting member banks.
June data are used because complete end-of-year data are not available prior to 1935 for U. S. Government
obligations and other securities.
8
Not available.
« Estimates based on incomplete data; by Council of Economic Advisers.
NOTE.—Detail will not necessarily add to totals because of rounding.
Source: Board of Governors of the Federal Reserve System (except as noted).
207
TABLE G-39.—Member bank reserves and Reserve Bank credit, 1929-53
[Millions of dollars]
Member bank reserve balances
Reserve Bank credit outstanding
Period
Total
Averages of daily figures:
1929
U.S.
Government securities
Discounts
and advances
All
other,
mainly
float
Total
Required i
Excess *
1,459
208
952
300
2,358
2,315
43
1,087
1,274
2,077
2,429
2,502
564
669
1,461
2,052
2,432
272
327
521
283
36
251
278
95
94
35
2,379
2,323
2,114
2, 343
3,676
2, 324
2,234
1,858
2 1, 815
22,112
55
89
256
2528
1,564
2,475
2,481
2, 554
2,600
2,628
2,431
2,431
2, 504
2,565
2,584
7
6
14
9
5
37
45
36
27
39
5,001
5, 989
6, 830
7,935
10, 352
2,532
3,477
5,610
5,413
5,960
2,469
2,512
1,220
2, 522
4, 392
2,487
2,293
3,408
8, 182
15, 358
2,417
2,187
3,191
7,724
14, 772
4
5
7
25
135
67
102
210
433
451
13,249
13, 404
12,648
12, 626
13, 222
6,923
8,080
9,980
11,116
12, 176
6,326
5,324
2,668
1, 510
1, 046
22, 211
24, 029
22, 989
22, 283
20, 161
21,363
23, 250
22, 330
21,511
19, 560
376
310
219
331
231
472
469
441
441
370
15,055
15, 969
16,461
18, 001
17, 774
13, 934
14, 993
15, 608
17,164
16, 952
1,121
976
853
837
822
1950
1951
1952
1953
19, 062
24, 070
24, 801
26, 262
18,410
22, 756
23, 066
24, 661
129
293
801
777
522
1,021
935
821
16,400
19, 293
20, 356
19, 996
15,617
18, 536
19, 642
19, 319
783
757
714
677
1952: January
February
March
April
24, 444
23,826
23, 890
23. 726
23, 704
24, 144
24, 786
24. 824
25, 055
25, 681
26, 172
27,299
23. 206
22, 552
22. 634
22, 448
22. 308
22. 617
22, 798
23, 027
23, 471
23, 657
23, 638
24, 400
200
365
314
365
573
585
1,092
1.059
723
1,093
1.577
1,633
1,038
909
942
913
823
941
895
738
861
931
958
1,266
20, 470
19, 995
20. 207
19, 777
19, 767
20. 140
20. 535
20, 306
20. 514
20. 611
20, 744
21, 180
19, 537
19. 300
19, 322
19, 127
19, 139
19, 431
19,926
19, 657
19, 736
19, 963
20,087
20, 457
933
695
885
650
628
709
609
649
778
648
657
723
26, 586
26, 080
26, 025
25, 892
25, 682
25, 960
26, 123
26, 322
26, 410
26, 514
26,413
27, 107
24. 202
23. 918
23, 892
23, 861
23, 973
24, 748
24, 955
25, 000
25. 168
25. 344
25, 172
25,639
1,372
1,336
1,220
1.184
955
433
428
658
468
367
494
448
1,012
826
913
847
753
779
740
663
774
802
747
1,021
20. 958
20, 520
20.416
20, 007
19, 807
20, 287
19, 653
19. 526
19. 552
19, 536
19, 718
19, 920
20, 251
19,882
19, 828
19, 472
19, 306
19, 499
18, 869
18. 882
18, 834
18. 784
19,035
19, 227
707
638
588
535
591
788
784
644
718
752
683
693
1930
1931
1932
1933
1934
_
„.
1935
1936
1937
1938
1939
_
_„_
1940
1941
1942
1943
1944
1945
1946
1947
1948
1949
. ...
..
May
June..
July
August
September
October
November
December
1953: January _
February
March .
April
May
June .
July
August
September
October.
November
December
_ _
_
._
2
1 Estimates.
2 Data on required and excess reserves from March 1933 through April 1934 for licensed banks only.
NOTE.—Detail will not necessarily add to totals because of rounding.
Source: Board of Governors of the Federal Reserve System.
208
TABLE G—40.—Estimated ownership of Federal obligations, 1939—53
[Billions of dollars—par values 1]
Gross public debt and guaranteed issues 2
End of periu'd
Total
Held
Held by others
by
U.S.
GovNonbank private corernState 3 Comporations and assoand
Federal
ment Total
ciations
held
merlocal
Reserve
investcial 4 banks
by
govern- banks
ment others
Corpo-B Other 8
ments
acTotal rations
counts
Individuals 7
1939
47.6
6.5
41.1
0.4
15.9
2.5
12.2
2.2
10.0
10.1
1910
1911
1942
1943
1944
50.9
61 3
112.5
170.1
232.1
7.6
9.5
12.2
16.9
21.7
43.3
51 7
100.2
153.2
210.5
.5
.7
1.0
2.1
4.3
17.3
21.4
41.1
59.9
77.7
2.2
2.3
6.2
11.5
18.8
12.8
16.8
28.2
42.0
56.4
2.0
4.0
10.1
16.4
21.4
10.8
12.8
18.1
25.6
35.0
10.6
13.6
23.7
37.6
53.3
1915
1916
1947
1948
1919
278.7
259.5
257.0
252. 9
257.2
27.0
30.9
34.4
37.3
39.4
251.6
228. 6
222.6
2J 5. 5
217.8
6.5
6.3
7.3
7.9
8.1
90.8
74.5
68.7
62.5
66.8
24.3
23.3
22.6
23.3
18.9
65.7
60.1
58.4
56.4
57.7
22. 0
15.3
14.1
14.8
16.8
43.7
44.8
44.3
41.6
40.9
613
612
65.7
65.5
66.3
1950 . 1951
1952 8
1953 — . _-.
250. 7
259.5
267.4
275.2
39.2
42.3
45.9
48.3
217.5
217.2
221.6
226.9
8.8
9.6
11.1
12.5
61.8
61.6
63.4
63.6
20.8
23.8
24.7
25.9
60.6
58.2
58.3
59.9
20.5
21.3
21.0
21.3
40.1
36.9
37.3
38.6
65.5
64.0
64.1
65.0
1952: January
February
March..
April
May
June
July .
August
September.. _
October . _ _
November
December
259.8
260.4
258.1
258.3
260.0
259.2
263.1
263.2
262.7
265. 0
267.5
267.4
42.7
42.9
43.0
43.2
43.7
44.3
44.6
45.0
45.1
45.1
45.5
45.9
217.1
217.5
215.1
215.1
216.2
214.8
218.5
218.2
217.7
219.9
221.9
221.6
9.9
10.0
10.1
10.2
10.2
10.4
10.7
10.8
10.9
11.0
11.0
11.1
62.1
61.2
60.1
60.5
61.0
61.1
62.7
61.8
61.6
63.1
64.2
63.4
22.7
22.5
22.5
22.4
22.3
22.9
22.9
23.1
23.7
23.6
23.8
24.7
58.3
59.0
57.4
57.5
58.5
56.5
57.6
58.0
57.3
58.1
58.8
58.3
21.5
22.1
20.7
20.2
21.2
19.7
20.3
20.7
20.2
20.5
21.0
21.0
36.8
36.9
36.7
37.3
37.3
36.8
37.3
37.3
37.1
37.6
37.8
37.3
64.1
64.8
65.0
64.6
64.3
63.9
64.6
64.4
64.2
64.2
64.1
64.1
1953: January
February
March
_ _
April
May _
June
July
August
September
October
November.8 . .
December . _
267.5
267.6
264.5
264.6
266. 6
266.1
272.7
273.3
273.0
273.5
275.3
275.2
46.0
46.2
46.3
46.3
46.8
47.6
47.6
48.0
48.0
48.0
48.2
48.3
221.5
221.5
218.3
218.3
219.8
218.6
225.1
225.3
225.0
225.5
227.1
226.9
11.2
11.3
11.4
11.5
11.9
12.0
12.2
12.2
12.2
12.2
12.3
12.5
62.8
61.9
59.5
59.1
58.6
58.8
63. 5
62.7
62.5
62.7
63.7
63.6
23.9
23.9
23.8
23.9
24.2
24.7
25.0
25.1
25.2
25.3
25.1
25.9
59.4
60.0
58.8
59.0
59.9
57.6
59.4
60.4
59.9
60.2
60.8
59.9
21.4
21.8
20.7
20.5
21.5
19.4
20.7
21.4
21.1
21.3
21.8
21.3
38.0
38.2
38.1
38.5
38.4
38.2
38.7
39.0
38.8
38.9
39.0
38.6
64.1
64.4
64.8
64.8
65.2
65.4
65.1
64.9
65.1
65.0
65.1
65.0
... ...
1 United States savings bonds, series A-D, E, F, and J, are included at current redemption values.
2 Excludes guaranteed securities held by the Treasury. Not all of total shown is subject to statutory
debt limitation.
3 Includes trust, sinking, and investment funds of State and local governments and their agencies, and
of 4 Territories and possessions.
Includes commercial banks, trust companies, and stock savings banks in the United States and in
Territories
and possessions; figures exclude securities held in trust departments.
6
Exclusive of banks and insurance companies.
6 Includes insurance companies, mutual savings banks, savings and loan associations, nonprofit institutions, corporate pension trust funds, dealers and brokers, and investments of foreign balances and international accounts in this country. Beginning with December 1946, the foreign accounts include investments
by the International Bank for Reconstruction and Development and the International Monetary Fund in
special non-interest-bearing notes issued by the U. S. Government. Beginning with June 30,1947, includes
holdings
of Federal land banks.
7
Includes partnerships and personal trust accounts.
s Estimates based on incomplete data; by Council of Economic Advisers.
NOTE.—Detail will not necessarily add to totals because of rounding.
Source: Treasury Department (except as noted).
TABLE G—41,—U. S. Government debt—volume and kind of obligations, 1929—53
[Billions of dollars]
Interest-bearing public debt
Gross
public
debt and
guaranteed
issues i
End of period
Marketable public
issues
Shortterm
issues *
Nonmarketable public issues
United Treasury
Treasury States
tax and
bonds
savings savings
bonds
notes
Investment
bonds 3
Special
issues *
1929
16.3
3.3
11.3
0.6
1930
1931
1932
1933
1934
16.0
17.8
20.8
24.0
31.5
2.9
2.8
5.9
7.5
11.1
11.3
13.5
13.4
14.7
15.4
.8
.4
.4
.4
.6
1935
1936
1937
1938
1939
35.1
39.1
41.9
44.4
47.6
14.2
12.5
12.5
9.8
7.7
14.3
19.5
20.5
24.0
26.9
0.2
.5
1.0
1.4
2.2
1940
1941
1942
1943
1944
50.9
64.3
112. 5
170.1
232.1
7.5
8.0
27.0
47.1
69.9
28.0
33.4
49.3
67.9
91.6
3.2
6.1
15.0
27.4
40.4
2.5
6.4
8.6
9.8
278.7
259.5
257.0
252.9
257.2
78.2
57.1
47.7
45.9
50.2
120.4
119.3
117.9
111.4
104.8
48.2
49.8
52.1
55.1
56.7
8.2
5.7
5.4
4.6
7.6
1.0
1.0
1.0
20.0
24.6
29.0
31.7
33.9
256.7
259.5
267.4
275.2
58.3
65.6
68.7
77.3
94.0
76.9
79.8
77.2
58.0
57.6
57.9
57.7
8.6
7.5
5.8
6.0
1.0
13.0
13.4
12.9
33.7
35.9
39.1
41.2
259.8
260.4
258.1
258.3
260. 0
259.2
263.1
263.2
262.7
265.0
267.5
267.4
65.6
65.6
64.4
64.8
65.6
64.6
64.4
64.2
64.0
66.9
68.9
68.7
76.9
76.9
76.8
76.8
76.8
75.7
79.9
79.8
79.8
79.8
79.8
79.8
57.7
57.7
57.7
57.6
57.6
57.7
57.7
57.8
57.8
57.8
57.9
57.9
7.5
8.0
6.9
7.1
7.5
6.6
6.4
6.3
6.0
6.0
6.1
5.8
13.0
13.0
13.0
12.5
12.5
14.0
14.1
14.1
14.1
13.4
13.4
13.4
36.2
36.4
36.5
36.7
37.2
37.7
37.9
38.3
38.4
38.4
38.8
39.1
267.5
267.6
264.5
264.6
266.6
266.1
272.7
273.3
273.0
273.5
275.3
275.2
68.7
68.0
65.5
65.6
66.3
66.0
72.4
72.4
79.5
79.6
79.1
77.3
79.8
80.4
80.4
80.4
81.9
81.2
81.2
81.2
73.2
73.2
75.5
77.2
58.1
58.3
58,4
58.4
57.9
57.9
57.9
57.9
57.8
57.8
57.8
57.7
5.7
5.6
4.9
4.8
4.8
4.5
4.7
5.0
5.6
6.3
6.2
6.0
13.4
13.4
13.4
13.3
13.3
13.3
13.2
13.2
13.1
12.9
12.9
12.9
39.1
39.3
39.4
39.5
39.7
40.5
40.6
41.0
41.0
40.9
41.0
41.2
1945
1946
1947
1948
1949
-
- - -.
.
_
.
1950
1951
1952
1953
-
.- -
.
_ .
- .
_
_ ..
1952: January
February
March
April
May
June_
July
August...
September
October
November _
December
1953: January
February
March...
April
May.
June
July....
August
September
October
November
December
_ -_-
__ _ _ .
_
.
.7
.6
2.2
3.2
4.2
5.4
7.0
9.0
12.7
16.3
1
Total includes non-interest-bearing debt, fully guaranteed securities (except those held by the Treasury),
Postal Savings bonds, prewar bonds, adjusted service bonds, depositary bonds, and armed forces leave
bonds,
not shown separately. Not all of total shown is subject to statutory debt limitation.
2
Includes bills, certificates of indebtedness, and notes.
*4 Includes Series A bonds and, beginning in April 1951, Series B convertible bonds.
Issued to U. S. Government investment accounts. These accounts also held 7.1 billion dollars of public
marketable and nonmarketable issues on December 31,1953.
Source: Treasury Department.
2IO
TABLE G-42.—Bond yields and interest rates, 1929-53
[Percent per annum]
Corporate
bonds
(Moody's)
U. S. Government securities
Period
3-month 9-12
Treas- month
2
ury
bills i issues
Number of issues.-- _
Average:
Long-term
taxable bonds'
Old
series 6
3-7
1
(7)
(8)
(0
(33)
(0
(77)
(7)
(7)
()
(77)
(7)
()
(33)
()
8( )
82.46
.375
.375
.594
1.040
1.102
.81
.82
.88
1.14
1.14
2.37
2.19
2.25
2.44
2.31
...
1.218
1.552
1.766
1.931
1.26
1.73
1.81
2.07
2.32
2.57
2.68
2.93
1952* January
February
March
April
1.688
1.574
1.658
1.623
1.710
1.700
1.824
1.876
1.786
1.783
1.862
2.126
1.75
1.70
1.69
1.60
1.66
1.74
1.89
1.94
1.95
1.84
1.89
2.03
2.74
2.71
2.70
2.64
2.57
2.61
2.61
2.70
2.71
2.74
2.71
2.75
1929
(•)
6
1930 .
1931
1932
1933
1934
()
1.402
.879
.515
.256
1935
1936 1937
1938
1939
.137
.143
.447
.053
.023
1940
1941
1942
1943
1944
.014
.103
.326
.373
.375
1945
1946
1947
1948
1949
...
1950
1951
1952 .
1953
May .
June
__
July
August
September. __
October. _ _
November
December
1953: January
February
March
April
May
June
July
August
September
October
November...
December
2.042
2.018
2.082
2.177
2.200
2.231
2.101
2.088
1.876
1.402
1.427
1.630
8
8
.75
.79
1.97
1.97
2.04
2.27
2.41
2.46
2.36
2.33
2.17
1.72
1.53
1.61
New
series 4
()
3
2.47
2.48
2.80
2. 83
2.89
2.97
3.09
3.09
2.99
3.00
2.97
2.83
2.85
2.79
(«)
i
8
8( )
8
(•)5
()
(«)
(•)
<•)
0)
«
(«)
(')
8( )
6
(
?
(•)
3.16
(5)
(5)
(5)
(5)
(3)
8( )
8
8
8( )
5
5
5
()
3.26
3.29
3.25
3.22
3.19
3.06
3.04
2.96
1
Aaa
Highgrade
municipal
bonds
(StandBaa ard &
Poor's)
Avg.
rate on
shortterm
bank
loans
to business—
selected
cities
Prime
commercial
paper,
4-6
months
Federal
Reserve
Bank
discount
rate
30
30
15
4.73
5.90
4.27
(8)
5.85
5.16
4.55
4.58
5.01
4.49
4.00
5.90
7.62
9.30
7.76
6.32
4.07
4.01
4.65
4.71
4.03
(88)
(8)
(8)
(8)
3.59
2.64
2.73
1.73
1.02
3.04
2.11
2.82
2.56
1.54
3.60
3.24
3.26
3.19
3.01
5.75
4.77
5.03
5.80
4.96
3.41
3.07
3.10
2.91
2.76
(8)
(88)
(8)
()
2.1
.76
.75
.94
.81
.59
1.50
1.50
1.33
1.00
1.00
2.84
2.77
2.83
2.73
2.72
4.75
4.33
4.28
3.91
3.61
2.50
2.10
2.36
2.06
1.86
2.1
2.0
2.2
2.6
2.4
.56
.54
.66
.69
.73
1.00
1.00
•1.00
•1.00
•1.00
2.62
2.53
2.61
2.82
2.66
3.29
3.05
3.24
3.47
3.42
1.67
1.64
2.01
2.40
2.21
2.2
2.1
2.1
2.5
2.7
.75
.81
1.03
1.44
1.48
•1.00
•1.00
1.00
1.34
1.50
2.62
2.86
2.96
3.20
3.24
3.41
3.52
3.74
1.98
2.00
2.19
2.72
2.7
3.1
3.5
3.7
1.45
2.17
2.33
2.52
1.59
1.75
1.75
1.99
2.98
2.93
2.96
2.93
2.93
2.94
2.95
2.94
2.95
3.01
2.98
2.97
3.59
3.53
3.51
3.50
3.49
3.50
3.50
3.51
3.52
3.54
3.53
3.51
2.10
2.04
2.07
2.01
2.05
2.10
2.12
2.22
2.33
2.42
2.40
2.40
2.38
2.38
2.38
2.35
2.31
2.31
2.31
2.31
2.31
2.31
2.31
2.31
1.75
1.75
1.75
1.75
1.75
1.75
1.75
1.75
1.75
1.75
1.75
1.75
3.02
3.07
3.12
3.23
3.34
3.40
3.28
3.24
3.29
3.16
3.11
3.13
3,51
3.53
3.57
3.65
3.78
3.86
3.86
3.85
3.88
3.82
3.76
3.74
2.47
2.54
2.61
2.63
2.73
2.99
2.99
2.88
2.88
2.72
2.62
2.59
2.31
2.31
2.36
2.44
2.68
2.75
2.75
2.75
2.74
2.55
2.32
2.25
1.88
2.00
2.00
2.00
2.00
2.00
2.00
2.00
2.00
2.00
2.00
2.00
()
3.45
3.51
3.49
3.51
3.54
3.73
3.74
3.76
Rate on new issues within period. Issues were tax exempt prior to March 1,1941, and fully taxable thereafter.
For the period 1934-37, series includes issues with maturities of more than 3 months.
2
Includes
certificates of indebtedness and selected note and bond issues.
3
Bonds
in this classification were first issued in March 1941.
4
2^-percent bonds, 15 years and over prior to April 1952 and 12 years and over beginning in April 1952.
fi 3J4-percent bonds of 1978-83, first issued May 1, 1953.
6
Treasury bills were first issued in December 1929 and were issued irregularly in 1930.
7
Not available before August 1942.'
8
Not available on same basis as for 1939 and subsequent years.
• From October 30,1942 to April 24, 1946, a preferential rate of 0.50 percent was in effect for advances
secured by Government securities maturing or callable in 1 year or less.
NOTE.—Yields and rates computed for New York City, except for short-term bank loans.
Source: Board of Governors of the Federal Reserve System (compiled from data supplied by various
Government and private organizations).
284874—54
15
211
TABLE G—43.—Government cash receipts from and payments to the public, calendar years, 1943—53
[Billions of dollars]
Total
Calendar year
1943
1944
1945
1946. _
1947
1948 .
1949
.
__
_ ._.
1950
1951
1952 4
1953
:.
-.
State and local 1
Federal
Cash
receipts
Cash
payments
Excess
of receipts
(+)or
payments
(-)
Cash
receipts
Cash
payments
Excess
of receipts
(+)or
payments
(-)
47.4
57.9
96.1
102.0
-48.7
-44.0
37.9
48.1
89.0
94.8
-51.1
-46.7
9.6
9.8
7.1
7.2
+2.5
+2.6
59.8
53.0
57.5
60.0
57.9
93.9
51.0
51.0
52.3
60.2
-34.1
+2.0
+6.6
+7.8
-2.3
49.4
41.4
44.3
44.9
41.3
86.1
41.4
38.6
36.9
42.6
-36.7
(3)
+5.7
+8.0
-1.3
10.3
11.6
13.2
15.1
16.6
7.8
9.6
12.4
15.4
17.6
+2.6
+2.0
+9
-.3
-1.0
60.6
79.5
93.3
94.5
61.5
78.6
95.0
100.3
-.9
+.9
-1.7
-5.8
42.4
59.3
71.3
70.6
42.0
58.0
73.0
76.8
+.4
+1.2
-1.6
-6.2
18.2
20.2
22.0
23.9
19.5
20.6
22.0
23.5
-1.3
-.4
Excess
of reCash
Cash ceipts
pay- 2 (+)or
repayceipts ments
ments
(-)
+ll
1
Based on the national income and product statistics of the Department of Commerce, adjusted to a
cash
basis.
2
Federal grants-in-aid have been deducted from State and local government receipts and payments
since
they are included in Federal payments.
3
Less than 50 million dollars.
4
Estimates based on incomplete data.
NOTE.—Detail will not necessarily add to totals because of rounding.
Sources: Treasury Department, Department of Commerce, and Council of Economic Advisers.
212
CORPORATE PROFITS AND FINANCE
TABLE G-44.—Profits before and after taxes, all private corporations, 1929—53
[Billions of dollars]
Period
1929
_
_..
1930
1931
1932
1933
1934...
1935. _
1936
1937
1938
1939
__.
_.
..
..
1940
1941..
1942
1943
1944
-
1945
1946
1947
1948
1949
1950
1951
1952
1953.
Corporate profits after taxes
Corporate
profits
before
taxes
Corporate
tax
liability 1
9.8
1.4
8.4
5.8
2.6
3.3
-.8
-3.0
.2
1.7
.8
.5
.4
.5
.7
2.5
-1.3
-3.4
—.4
1.0
5.5
4.1
2.6
2.1
2.6
-3.0
-5.4
-6.0
-2.4
-1.6
3.2
5.7
6.2
3.3
6.5
1.0
1.4
1.5
1.0
1.5
2.3
4.3
4.7
2.3
5.0
2.9
4.6
4.7
3.2
3.8
-.6
-.3
« -.9
1.2
9.3
17.2
21.1
25.1
24.3
2.9
7.8
11.7
14.4
13.5
6.4
9.4
9.4
10.6
10.8
4.0
4.5
4.3
4.5
4.7
2.4
4.9
5.1
6.2
6.1
19.7
23.5
30.5
33.8
27.1
11.2
9.6
11.9
13.0
10.8
8.5
13.9
18.5
20.7
16.3
4.7
5.8
6.6
7.2
7.5
3.8
8.1
12.0
13.5
8.8
41.0
43.7
39.2
(3)
18.2
23.6
20.6
(3)
22.7
20.1
18.6
(3)
9.1
9.2
9.1
<9.4
13.6
10.9
9.5
Total
Dividend
payments
Undistributed
profits
(3)
Seasonally adjusted annual rates
1952: First half
Second half
_
. __
1953: First half
Second half
1952' First quarter
Second quarter
Third quarter
Fourth quarter
1953: First quarter __
Second quarter
Third quarter
Fourth quarter.
__ _
_.
___
_
39.8
38.6
21.0
20.3
18.9
18.3
9.1
9.1
45.2
(3)
24.7
(3)
20.6
(')
9.3
<9.6
41.5
38.2
37.0
40.3
21.8
20.1
19.4
21.2
19.7
18.0
17.5
19.1
9.1
9.1
9.1
9.1
10.6
8.9
8.4
10.0
44.6
45.9
43.3
(')
24.4
25.0
23.6
(3)
20.3
20.8
19.6
(3)
9.2
9.4
9.6
*9.6
11.1
11.4
10.0
9.8
9.2
(3)
11.3
(')
1 Federal and State corporate income and excess profits taxes.
2 Minus 8 million dollars.
s Not available.
* Estimates based on incomplete data; fourth quarter by Council of Economic Advisers.
NOTE.—No allowance has been made for inventory valuation adjustment. See appendix table G-7 for
profits before taxes and inventory valuation adjustment.
Detail will not necessarily add to totals becausej)f rounding.
Source: Department of Commerce (except as noted).
213
TABLE G-45.—Relation of profits after taxes to stockholders' equity and to sales, private manufacturing corporations, by industry group, 1947-50 average and 1952-53
ludnstry group
1952
1953
1947-50
average
First Second Third Fourth First Second Third
Year quarter
quarter quarter quarter quarter quarter quarter
Ratio of profits (annual rate) to stockholders' equity
All private manufacturing corporations-
14.8
10.2
10.1
10.0
9.9
11.3
10.7
Food
Tobacco manufactures
Textile-mill products
Apparel and finished textilesLumber and wood products -
13.6
12.1
14.5
12.0
17.1
7.7
8.2
4.2
4.8
8.5
5.9
7.3
4.0
1.8
8.0
7.7
7.7
3.2
3.4
8.9
9.4
9.0
4.7
5.8
9.8
7.4
9.3
4.9
7.8
7.3
7.0
7.7
6.0
7.6
7.0
8.2
9.5
5.3
6.7
9.8
10.2
10.5
5.0
4.9
7.6
Furniture and fixtures
Paper and allied products
Printing and publishing (except newspapers)
Chemicals and allied products
Petroleum refining
14.3
16.2
8.6
10.2
7.4
11.4
9.0
9.5
8.4
10.1
9.8
10.8
11.2
10.6
10.4
10.2
7.1
10.2
Products of petroleum and
coal (except petroleum refining)
__
Rubber products
Leather and leather products.
Stone, clay, and glass products _. _ __ ._ __
Primary nonferrous metal industries
--Primary iron and steel industries
Fabricated metal products.. _
Machinery (except electrical)
_ _
_
Electrical machinery
Transportation equipment
(except motor vehicles)
Motor vehicles and parts
Instruments, photographic
and optical goods, watches
and clocks
Miscellaneous manufacturing (including ordnance)___
10.5
13.4
9.1
10.9
10.2
9.4
6.2
11.4
10.8
8.9
15.9
i 15.1
10.7
12.9
11.1
13.6
10.6
13.0
10.5
12.3
11.3
14.5
11.4
12.3
11.6
12.9
10.3
13.3
(2)
12.8
10.4
^8.6
10.9
5.7
6.0
9.6
2.6
8.9
10.8
5.6
13.5
11.2
8.1
6.6
13.0
6.7
6.7
11.5
6.5
11.2
12.1
8.0
9.8
11.5
6.2
15.2
11.5
8.4
12.6
13.6
11.9
9.3
14.9
13.8
12.5
11.5
13 0
11.3
9.3
12.6
12.4
11.9
9.9
12.9
15.3
8.3
10.0
9.7
9.9
5.5
10.4
6.3
10.5
12.4
9.7
10.9
9.4
11.4
11.0
11.0
10.9
14.5
17.8
11.2
13.3
12.2
13.4
12.5
11.4
10.2
12.0
10.4
17.8
11.3
15.1
11.7
12.8
8.7
12.1
6.6
12.1
10.9
12.5
11.9
14.5
12.8
15.4
12.2
21.7
13.7
12.9
15.4
11.4
16.0
15.2
15.0
12.8
14.6
11.5
10.6
11.1
11.2
13.6
11.7
11.7
10.7
11.4
7.1
6.5
6.1
7.3
8.1
8.3
9.0
9.1
See footnotes at end of table.
11.2
214
TABLE G-45.—Relation of profits after taxes to stockholders9 equity and to sales> private manufacturing corporations, by industry group, 1947-50 average and 7952-53—Continued
Industry group
1947-50
average
1953
1952
First Second Third Fourth First Second Third
Year quarter
quarter quarter quarter quarter quarter quarter
Profits in cents per dollar of sales
All private manufacturing corporations. _
6.7
4.3
4.2
4.2
4.3
4.4
4.3
4.4
4.3
Food
Tobacco manufactures
Textile-mill pro ducts
Apparel and finished textiles .
Lumber and wood products. _
3.6
4.8
6.6
3.1
9.2
1.9
3.2
1.9
1.0
4.1
1.5
3.0
1.8
.4
4.2
1.9
3.0
1.5
.8
4.3
2.3
3.4
2.1
1.3
4.6
1.8
3.5
2.1
1.6
3.3
1.8
3.2
2.7
1.7
3.5
2.1
3.7
2.5
1.6
4.6
2.5
3.9
2.5
1.1
3.7
Furniture and fixtures __ _.
Paper and allied products
Printing and publishing (except newspapers)
Chemicals and allied products
Petroleum and refining
5.0
8.6
2.7
5.7
2.3
6.0
2.7
5.4
2.7
5.7
2.9
5.6
3.3
5.7
3.2
5.4
2.4
5.4
Products of petroleum and
coal (except petroleum refining)
Rubber products.. .
Leather and leather products.
Stone, clay, and glass products
Primary nonferrous metal
industries
Primary iron and steel industries
.Fabricated metal products. _.
Machinery (except electrical) .
Electrical machinery
Transportation equipment
(except motor vehicles)
Motor vehicles and parts
Instruments, photographic
and optical goods, watches
and clocks .
Miscellaneous manufacturing (including ordnance) _..
5.0
3.3
4.0
3.8
3.5
2.1
4.2
3.9
3.3
9.1
ill.O
6.1
10.1
6.2
10.0
6.0
10.2
6.1
9.6
6.2
10.5
6.3
9.6
6.3
10.2
6.0
10.3
(2)
4.8
3.4
3.7
3.6
1.8
2.8
3.2
.8
3.6
3.5
1.8
5.4
3.7
2.5
2.8
4.2
1.9
3.3
3.8
2.0
4.6
3.9
2.5
4.3
3.9
1.9
8.9
6.6
5.0
7.2
7.4
6.4
5.4
8.0
7.3
8.8
6.7
7.3
6.8
5.7
7.0
7.1
6.1
5.8
7.2
6.6
7.1
6.3
4.7
4.0
4.8
4.5
4.9
4.1
5.1
4.6
3.5
4.3
5.1
3.9
3.9
4.1
4.6
4.1
5.8
3.6
4.4
5.1
5.2
3.6
4.8
4.6
5.2
4.0
4.6
4.0
5.4
3.8
3.9
4.0
3.4
2.9
2.9
2.8
2.8
2.8
2.6
2.8
2.4
3.7
4.6
4.7
4.1
3.9
4.8
4.8
5.0
4.8
4.7
4.5
2.5
2.9
2.7
3.1
3.2
3.8
7.4
4.7
4.5
4.9
7.9
4.8
4.8
5.3
2.7
2.6
1 Petroleum refining and products of petroleum and coal combined.
Not available separately for this period.
NOTE.—Beginning with the third quarter of 1951, these series are based on a new sample. However, the
1947-50 averages have not been adjusted and therefore are not strictly comparable with data for later periods.
For explanatory notes concerning compilation of the series, see Quarterly Financial Reports for United
States Manufacturing Corporations by Federal Trade Commission and Securities and Exchange Commission.
Sources: Federal Trade Commission and Securities and Exchange Commission.
2
215
TABLE' G—46.—Relation of profits before and after taxes to stockholders' equity and to sales,
private manufacturing corporations, by asset size class, 1947—50 average and 1952—53
1952
1947-50
average
Asset size class
(thousands of dollars)
Year
1953
First Second Third Fourth First Second Third
quarter quarter quarter quarter quarter quarter quarter
Ratio cf profits before Federal taxes (annual rate) to stockholders' equity
All asset sizes
Under 250
250 to 999
1,000 to 4,999
5,000 to 99,999
100,000 and over
_
24.6
21.8
23.6
22.0
20.7
22.2
24.9
26.4
23.3
16.7
22.7
24.2
25.2
24.9
17.2
17.5
19.6
21.9
23.0
15.7
17.3
20.7
23.3
25.7
20.3
19.7
20.2
22.2
22.6
22.1
18.8
19.1
20.8
21.2
9.9
10.8
18.4
22.5
24.9
13.2
18.1
20.7
25.1
27.0
21.7
21.1
20.7
25.7
28.8
17.5
17.3
17.7
22.4
25.8
Profits before Federal taxes in cents per dollar of sales
All asset sizes _ _
Under 250
250 to 999
1,000 to 4,999
5,000 to 99,999
100,000 and over -
11.1
9.2
9.9
9.2
8.9
8.6
10.0
10.4
9.6
4.4
7.4
9.0
11.3
13.2
3.6
4.8
6.5
9.2
11.8
3.4
5.2
6.9
9.8
13.1
4.4
5.8
6.7
9.4
11.6
4.6
5.6
6.5
8.9
11.1
1.9
2.9
5.8
8. 8
11.5
3.0
4.9
7.0
10.1
12.6
4.7
5.7
6.8
10.2
12.9
3.7
4.9
6.1
9.3
12.2
Ratio of profits after Federal taxes (annual rate) to stockholders' equity
All asset sizes Under 250__
250 to 999
1,000 to 4,999 .
5,000 to 99,999
100,000 and over
14.8
10.2
10.1
10.0
9.9
11.3
10.7
11.2
10.5
9.8
13.1
14.1
14.9
15.3
9.4
7.6
8.0
9.4
11.5
8.9
6.9
7.9
9.3
11.6
12.3
8.6
8.0
9.2
11.0
13.0
8.4
8.2
9.1
10.8
2.8
4.9
7.9
10.7
13.7
7.0
7.9
8.9
10.3
11.8
13.2
10.3
8.8
10.6
12.1
11.0
8.1
7.4
9.5
11.9
Profits after Federal taxes in cents per dollar of sales
All asset sizes
Under 250 . 250 to 999
1,000 to 4,999
5,000 to 99,999 . . _100,000 and over
6.7
4.3
4.2
4.2
4.3
4.4
4.3
4.4
4.3
2.6
4.3
5.2
6.7
8.1
1.9
2.1
2.6
4.0
5.9
1.9
2.0
2.6
3.9
5.8
2.7
2.5
2.6
3.9
5.6
2.7
2.5
2.8
3.9
5.7
0.5
1.3
2.5'
4.2
6.3
1.6
2.2
3.0
4.1
5.5
2.9
2.8
2.9
4.2
5.4
2.3
2.3
2.5
4.0
5.6
NOTE.—Beginning with the third quarter of 1951, these series are based on a new sample. However, the
1947-50 averages have not been adjusted and therefore are not strictly comparable with data for later periods.
For explanatory notes concerning compilation of the series, see Quarterly Financial Reports for United States
Manufacturing Corporations by Federal Trade Commission and Securities and Exchange Commission.
Sources: Federal Trade Commission and Securities and Exchange Commission.
2l6
TABLE G—47.—Sources and uses of corporate funds, 1946—53 1
[Billions of dollars]
Source or use of funds
Uses:
Plant and equipment outlays
Inventories (change in book
value)
-_
Change
in customer net receivables 3
Cash and U. S. Government
securities
Other current assets
Total uses
Sources:
Internal:
Retained profits and depletion allowances
Depreciation allowances
Total internal sources
External:
Change in Federal income
tax liability
Other current liabilities ..
Change in bank loans and
mortgage loans
Net new issues
_ _
Total external sources
Total sources
Discrepancy (uses less sources)
1946
1947
1948
1949
1950
1951
1952
1953 2
13.2
17.5
19.1
16.4
17.0
21.6
22.5
11.2
7.1
4.2
-3.6
9.9
10.2
1.7
24.0
3.5
1.0
3.0
2.8
.8
5.1
.7
24
3.0
-4.7
-.7
1.0
-.1
1.0
(4)
3.2
-.2
4.5
.3
3.0
.4
.3
.5
2.0
.5
20.0
28.5
27.1
16.6
36.8
36.0
27.4
33.0
7.6
4.3
11.6
5.3
12.8
6.3
8.0
7.2
13.0
7.9
10.2
8.7
8.8
10.3
10.0
12.0
11.9
16.9
19.1
15.2
20.9
18.9
19.1
22.0
— 1.6
2.1
2.3
1.4
.8
.3
—2.3
.5
7.2
1.7
5.1
1.0
-3.1
1.0
2.5
1.0
3.8
2.4
3.4
4.4
1.9
5.9
-2.2
4.9
2.4
3.7
5.2
C>.3
3.2
8.1
1.0
7.5
6.7
11.5
8.9
.9
15.0
17.6
9.2
12.0
18.5
28 3
28.1
16.0
35.9
36.6
28.3
34.0
1.5
.3
—.9
.6
.9
-.6
-.9
— 1.0
* Excludes banks and insurance companies.
'•Estimated to nearest half-billion dollars on basis of incomplete data; by Council of Economic Advisers.
* Receivables are net of payables which are therefore not shown separately.
4
Less than 50 million dollars.
NOTE.—Detail will not necessarily add to totals because of rounding.
Source: Department of Commerce based on Securities and Exchange Commission and other financial
data (except as noted).
217
TABLE G-48.—Business population, 1929-53
Business failures, by size of liabilities 2
Operating businesses and
business turnover *
DisOperat- New coning
tinbusi- busi- ued
nesses nesses businesses
Period
New
busiAmount of current
Number of failures
ness
liabilities
Busi- incorness poratrans- tions
Under $100,000
Under $100,000
Total $100,000
and
fers
Total $100,000
and
over
over
Thousands of firms *
Thousands of dollars 4
Number of firms *
3, 029. 0
(5)
(8)
(5)
(5)
22, 165
744 483, 252 261, 458 221, 794
2, 993. 7
2, 916. 4
2, 828. 1
2, 782. 1
2,884.0
(5)
(58)
( 5)
(5 )
()
(8)
(88)
(8)
()
5
()
(58)
(5)
(8)
()
8
()
(fi8)
( )
(58)
()
(8)
26, 355 25, 408
28, 285 27, 230
31, 822 30, 197
6 19, 859 • 18, 880
12, 091 11, 421
947 668, 282 303, 464 364, 818
1,055 736, 310 354, 159 382, 151
1,625 928, 313 432, 625 495, 688
«979 H57,520 6215,510 6242,010
670 333, 959 138, 509 195, 450
2, 991. 9
3, 069. 8
3, 136. 3
3, 073. 7
3, 222. 2
(88)
(5)
(8)
(8)
()
(8)
(85)
()
(55)
()
(5)
(55)
(8)
()
(8)
(8)
(88)
(5 )
(5 )
()
12, 244
9,607
9,490
12, 836
714,768 7
11, 691
9,285
9,203
12, 553
14, 541
553 310, 580 135. 489
322 203, 173 102. 803
287 183, 253 101. 856
283 246, 505 140, 120
7227 7182,520 7132,863
175, 091
100, 370
81. 397
106. 385
7 49, 657
1940
1941
1942
1943
1944
3, 290. 8
3, 269. 6
3, 185. 8
2, 905. 1
2, 916. 5
275.2
290.0
121.2
146.0
330.9
318.1 (8)
270.7
386.5
337.0 (8)
174.6 359.4
(8)
(88)
(8)
(8)
()
13, 619
11, 848
9,405
3,221
1,222
13, 400
11, 685
9,282
3,155
1,176
219 166, 684 119, 904
163 136, 104 100, 660
123 100, 763 80, 286
66 45, 339 31, 184
46 31, 670 14, 548
46, 780
35, 444
20, 477
14, 155
17, 122
1945
1946
1947
1948
1949
3, 113. 9
3, 487. 2
3, 783. 2
3, 948. 3
4, 000. 0
422. 7
617.4
460.8
393.3
331.1
175.6
208.7
239.2
282.0
306.5
473.2 35,781
626.9 132,916
571.9 112,638
501.3 96,101
434.7 85,491
809
1,129
3,474
5, 250
9,246
759
1,002
3, 103
4,853
8,708
50 30, 225 11, 385 18, 840
127 67, 349 15, 717 51, 632
371 204, 612 63, 668 140, 944
397 234, 620 93, 899 140, 721
538 308, 109 161, 386 146, 723
4, 050. 7
4, 108. 5
4, 167. 4
(')
348.2 289.6 419.4 92,925
363.2 309.3 378.3 83,649
363.9 306.4 374.9 92,819
«
(8)
(«) 102,545
9, 162
8,058
7,611
8,862
8,746
7,626
7,081
8,075
416 248, 283
432 259, 547
530 283, 314
787 394, 153
4, 175. 4
8,357
7,138
7,902
8,284
7,915
7,819
7,549
7,088
7,529
8,223
6,741
8,274
671
619
715
780
638
671
580
594
539
631
590
583
616
583
665
715
607
628
527
562
506
582
551
539
55
36
50
65
31
43
53
32
33
49
39
44
26, 208
19, 474
29, 232
29, 530
21, 193
21,222
22, 789
16, 322
20, 138
35, 049
18, 757
23, 400
11, 521
10, 782
12, 912
13, 365
10, 487
12, 070
9,880
10, 105
8,645
10,988
10, 604
10, 512
14, 687
8,692
16, 320
16, 165
10, 706
9,152
12, 909
6, 217
11,493
24, 061
8, 153
12, 888
9,468
7,943
9,659
9,507
8,968
8,926
8,703
7,487
7,433
8,267
7,269
8,915
647
691
739
693
697
817
724
700
686
840
815
813
604
632
674
628
636
767
651
639
610
766
745
723
43
59
65
65
61
50
73
61
76
74
70
90
23, 309
27, 273
31, 082
27, 520
32, 789
32, 379
39,830
28, 529
33, 817
37, 076
36, 795
43, 754
11, 679
12, 152
13, 365
12, 575
13, 193
16, 185
13, 931
13, 087
13, 790
15, 904
15, 609
16, 060
11, 630
15, 121
17, 717
14, 945
19, 596
16, 194
25, 899
15, 442
20, 027
21, 172
21, 186
27, 694
1929
1930
1931
1932
1933
1934
1935
1936
1937
1938
1939
1950
1951
1952
1953
. .
_ _.
._
_
__
1952: January
February
March
April
May
June
July
August
September
October
November
December
8
213.0 158.8
(")
150.9 147.5
(')
199.3 8165.7
8
()
(8)
(8)
4, 178. 8
1953: January
February
March
April
May
84,212.4
June July
..
August
September. .
October
November .
December
(8)
(')
22,909
151, 189 97, 094
131, 593 127, 954
131, 871 151,443
167, 530 226, 623
1 Excludes firms in fields of agriculture and professional services. Includes self-employed person only if
he has either an established place of business or at least one employee.
2 Industrial and commercial only; excludes banks, railroads, insurance companies, etc.
* Operating businesses are end-of-quarter data with annual estimate centered at June 30. New and discontinued businesses and business transfers are totals for the year and half-year.
* Total for period.
• Not available.
« Revised series no longer carries group of agents and commercial services (such as real estate and insurance brokers, holding and finance companies, tourist agencies, etc.).
7 Revised series has more complete coverage of small firms.
• Preliminary.
Sources: Department of Commerce and Dun & Bradstreet, Inc.
2l8
INTERNATIONAL TRANSACTIONS
TABLE G-49.—United States balance of payments, excluding U. S. Government grants of
military goods and services, 1947-53
[Billions of dollars]
Area and type of transaction
1947
1948
1949
1950
1951
1952
19531
WITH THE WORLD *
Exports of goods and services:
Total
Less i Unilateral military transfers
Net total
Imports of goods and services:
Military
Other
Total
Unilateral transfers other than U. S. Government grants [net outflow (— )]
Balance on goods and services and unilateral
transfers other than U. S. Government
grants [net outflow (— )]
United States private capital [net outflow
Errors and omissions
Balance on goods and services, unilateral
transfers other than U. S. Government
grants, United States private capital, and
errors and omissions [net outflow (— )]
19.8
.1
17.0
.4
16.0
.2
14.4
.6
20.2
1.5
20.6
2.6
21.4
4.7
19.7
16 6
15.8
13.8
18.7
18.1
16.8
.5
7.8
.8
95
.6
9.0
.6
11.5
1.3
13.8
1.9
13.9
2.5
14.3
8.3
10 3
9.6
12.1
15.1
15.8
16.8
—.7
—.7
-.6
-.6
—.5
-.6
-.7
+10.7
+5.6
+5.5
+1.2
+3.2
+1.7
—.7
-1.0
+1.0
—.9
+1 0
—.6
+.8
-1.3
+.2
-1.1
+.5
-1.1
+.6
-.1
+.3
+10.7
+5.8
+5.7
00
+2.7
+1.2
-.5
-4.6
-5.6
-3.6
-3.1
-2.4
-2.0
-.1 Si+3. 6
+.4
+1.2
+2.5
U. S. Government credits and grants (excluding transfers of military goods and services) . «-8.8
Increase (+) or decrease (— ) in foreign gold
and dollar assets through transactions with
-1.9
the United States
-1.2
WITH WESTERN EUROPE AND DEPENDENCIES 8
Exports of goods and services, excluding military transfers ..
Imports of goods and services fl
Balance on goods and services and unilateral
transfers other than U. 8. Government
grants [net outflow (—)] .
United States private capital [net outflow
Multilateral transfers 7
_
Balance on goods and services, unilateral
transfers other than U. S. Government
grants, United States private capital, and
multilateral transfers [net outflow (— )]
U. S. Government credits and grants (excluding transfers of military goods and services) .
Increase (+) or decrease (— ) in foreign gold
and dollar assets •
_
8.1
6.4
6.1
4.5
6.1
5.6
4.8
2.8
O o
3.2
3.9
4.9
5.6
6.3
+5.3
+3.1
+2.9
+.6
+1.2
-.1
3
3
(3)
3
-1.5
+1.7
-.2
+1.5
()
+1.7
-.3
+.6
+6.9
+4.4
+4.6
+.9
+2.1
+1.0
-4.3
-3.7
-4.6
-2.9
-2.0
-1.6
—1.1
-2.6
-.7
-.1
+1.9
-.1
+.6
+2.1
(9)
4.9
4.5
3.3
4.3
4.0
3.4
(8)
2.0
2.0
2.3
2.9
3.6
4.1
CO
+2.9
+2.5
+1.0
+1.3
+.4
-.8
(99)
()
-.1
+.2
+.1
+.6
-.2
+.4
(3)
+.1
-.1
+.1
+.2
+.1
(9)
+3.0
+3.2
+1.2
+1.5
+.4
-.5
-2.8
-3.4
-2.2
-1.8
-1.1
o
+.2
+.9
+.7
+1.2
()
+.8
()
+1.1
+.1
+.4
-1.0
WITH CONTINENTAL WESTERN EUROPE AND
DEPENDENCIES •
Exports of goods and services, excluding military transfers
Imports of goods and services "
Balance on goods and services and unilateral
transfers other than U. S. Government
grants [net outflow (— )]
United States private capital [net outflow
Multilateral transfers 7
..
Balance on goods and services, unilateral
transfers other than U. S. Government
grants, United States private capital, and
multilateral transfers [net outflow (— )]
U. S. Government credits and grants (excluding transfers of military goods and services') .
Increase (+) or decrease
(-) in foreign gold
and dollar assets 8
CO
(9)
See footnotes at end of table.
219
-.2
+.3
TABLE G—49.—UnitedlStates balance of payments, excluding U. S. Government grants of military
goods and services, 1947—53—Continued
[Billions of dollars]
Area and type of transaction
1947
1948
1949
1951
1950
1952
19531
WITH STERLING AREA 8
Exports of goods and services, excluding
military transfers ,
Imports of goods and services '__ _ _ _
Balance on goods and services and unilateral
transfers other than U. S. Government
grants [net outflow (—)]
United States private capital [net outflow
7
Multilateral transfers
Balance on goods and services, unilateral
transfers other than U. S. Government
grants, United States private capital, and
multilateral transfers [net outflow (— )]
U. S. Government credits and grants (excluding transfers of military goods and services) .
Increase (+) or decrease
(— ) in foreign gold
and dollar assets 8
(9)
2.7
2.5
1.9
3.2
3.0
2.4
(»)
2.0
1.8
2.4
3.0
2.8
2.9
(9)
(•)
(•)
+.7
-.4
+.2
+.2
-.2
+.3
(3)
+.5
(3)
(3)
+1.4
+.7
i
+.9
+.6
(3)
(•)
+2.0
+1.6
-.3
+.7
+.8
(v)
Q
-1.1
-.7
-.3
-.6
-.5
-.4
+1.0
-.4
—.2
+.9
fl
()
-.1
-1.0
-.5
-.5
WITH CANADA
Exports of goods and services, excluding military transfers
Imports of goods and services "
Balance on goods and services and unilateral
transfers other than U. S. Government
grants
_. United States private capital [net outflow
Multilateral transfers 7
Balance on goods and services, unilateral
transfers other than U. S. Government
grants, United States private capital, and
multilateral transfers [net outflow (— )]
U. S. Government credits and grants (excluding transfers of military goods and services).
Increase (+) or decrease
(— ) in foreign gold
and dollar assets 8
2.7
2.5
2.6
2.7
3.5
3.8
4.1
1.5
2.0
2.0
2.4
2.8
3.0
3.2
+1.1
+.4
+.6
+.3
+.7
+.8
+.9
+.2
-.5
—.2
-.6
—.1
— .7
-.2
—.4
-.2
—.4
-.7
—.2
—.4
+.8
-.4
-.6
(3)
-.3
+.3
00
(3)
(3)
(3)
(3)
-.8
+.4
c
(3)
(3)
(3)
+.6
3
()
(3)
+.3
-.3
WITH LATIN AMERICA •
Exports of goods and services, excluding
military transfers
_
Imports of goods and services '
Balance on goods and services and unilateral
transfers other than U. S. Government
grants [net outflow (— )1
United States private capital [net outflow
7
Multilateral transfers
__
Balance on goods and services, unilateral
transfers other than U. S. Government
grants, United States private capital, and
multilateral transfers [net outflow (— )]
U. S. Government credits and grants (excluding transfers of military goods and services).
Increase (+) or decrease
(— ) in foreign gold
and dollar assets 8
4.8
4.2
3.7
3.9
5.2
4.8
4.2
28
31
30
36
41
43
4 4
+2.0
+1.1
+.7
+.3
+1.0
+.5
-.2
—.6
-.6
— 3
—.7
—.3
-.7
—.2
-.5
—.3
-.6
— 4
-.2
-f- 1
+.8
(3)
-.3
0
+.1
-.1
-.2
(3)
-.1
-.1
(3)
-.2
-.1
-.3
+.4
+.3
(3)
+.1
+.5
-.6
See footnotes at end of table.
220
(3)
-. 1
TABLE G-49.—United States balance of payments, excluding U. S. Government grants of military
goods and services, 1947-53—Continued
[Billions of dollars]
Area and type of transaction
1947
1948
1949
1950
1951
1952
19531
WITH OTHER COUNTRIESs
Exports of goods and services, excluding military transfers
(9)
22
2.3
19
2 7
2.6
2.7
Imports of goods and services '
Balance on goods and services and unilateral
transfers other than U. S. Government
grants [net outflow ( — )]
United States private capital [net outflow
(0)
17
14
20
26
26
2.9
(9)
+.5
+1.0
Multilateral transfers 7
Balance on goods and services, unilateral
transfers other than U. S. Government
grants, United States private capital, and
multilateral transfers.. _
(°)
(')
-.1
+.3
-.2
+.2
(9)
+.7
+1.0
(e)
-.8
-.9
-.6
-.6
-.5
-.4
(9)
+.1
-.1
+.5
+.5
+.1
+.1
U. S. Government credits and grants (excluding transfers of military goods and services).
Increase (+) or decrease
(— ) in foreign gold
and dollar assets 8 _ _ .
2
(3)
+.1
(3)
-.1
+.2
-.2
+.2
+.5
+.6
+.1
+.1
+.4
+.3
-.1
-. 1
1 January-September data at annual rates.
2 Includes international institutions.
34 Less than 50 million dollars.
Includes 3.1 billion dollars for subscription to International Monetary Fund and International Bank
for5 Reconstruction and Development.
For geographic coverage, see Survey of Current Business, December 1952.
6
Includes net unilateral transfers other than U. S. Government military and economic aid.
78 Includes errors and omissions; (+) indicates payment by the area.
Includes gold transactions with the United States only.
9
Not available.
Source: Department of Commerce.
221
TABLE G—50.—U. S. Government grants and capital movements to foreign countries, 2947-53
[Millions of dollars]
1947
Type of aid
Disbursements on grants:
Military goods and services:
Mutual Defense
_
.
_ __
Greek- Turkish aid
49
China aid
._ .Other Government grants:
EGA and Mutual Security:
Europe
Other areas
--- -Army Civilian Supply 2
1,009
Philippine Rehabilitation
86
International Refugee Organization and other
international relief agencies, excluding
TJNRRA
34
UNRRA, post UNRRA, and interim aid
773
Other grants
_
. _. 68
Total disbursements
Less: Receipts
Equals: Net unilateral payments _ _
1950
1951
1952
1953 *
171
40
516
62
5
1,471
2,593
4,652
327
46
1,397
3,730
2,719
2,490
1,515
1,255
1,468
1,082
428
131
130
203
281
155
4
116
627
64
104
2
33
84
39
48
71
28
58
17
10
2,019
4,271
5,457
4,194
4,569
4,613
1,872
4,099
5,212
4,043
138
85
6,547
4,431
4,528
6,423
300
476
454
168
6
3
g
428
163
30
26
20
12
163
193
2
28
22
6
209
222
333
483
49
661
13
6
7
15
19
450
310
140
838
429
409
729
445
284
96
172
147
Long-term capital:
Subscription to:
International Bank for Reconstruction and
Development
International Monetary Fund
British Loan
EGA and MSA Programs
Export-Import Bank
Surplus Credits (including ship sales)
Raw material credits to occupied areas
United Nations building loan
Other
1949
1948
114
500
166
92
245
151
g
2
153
336
12
124
317
2 745
2,850
797
273
80
81
Total long-term capital outflow
Less: Repayments
Equals: Net long-term capital movements _. _
1 416
6,849
443
973
679
205
474
414
287
127
108
—87
173
37
23
68
-36
583
1,481
2,950
2,593
1,935
4,652
1,771
7 143
294
Short-term capital, net
U. S. Government grants of military goods and
services
Other U. S. Government grants, net ._
U. S. Government long- and short-term credit _
373
49
1,823
6,957
3,726
211
5,001
886
3,460
647
164
163
477
248
1
January-September data at annual rates.
2
After 1949, includes disbursements in Germany administered by EGA from funds appropriated under
the Army Civilian Supply Program.
Source: Department of Commerce.
TABLE G-51.—Estimated gold reserves and dollar holdings of foreign countries, 7928, 7937, and
1945-53
[Billions of dollars]
Area
1928
All foreign countries
Sterling area
Continental OEEC countries
and dependencies
Other Europe.
Canada
Latin American Republics
All other countries
.
8.8
1.4
4.3
.1
.4
1.1
1.5
1945
1946
1947
1948
1949
1950
1951
1952 1953»
15.1 20.8
4.9 4.1
19.4
4.5
15.2
3.7
15.0
2.9
15.4
2.7
19.1
4.5
19.2
38
20.5
3.3
23.1
4.1
7.0
.9
1.5
3.7
1.8
5.3
.8
.7
2.9
1.8
5.6
.7
1.2
2.7
1.9
60
.6
1.4
3.1
1.6
6.6
.6
2.0
3.5
1.9
69
.5
22
3.4
2.4
81
.6
2.5
3.4
2.6
9.7
.5
2.4
3.6
2.8
1937
6.8
.1
.4
1.0
1.9
7.9
.8
1.7
3.8
2.5
1
Preliminary estimates.
NOTE.—Includes gold reserves and dollar holdings of all foreign countries with the exception of U. S. S. R.
gold reserves. Holdings of the Bank for International Settlements (both for its own and EPU accounts)
and of the Tripartite Commission for Restitution of Monetary Gold are included with the holdings of Continental OEEC countries and dependencies. Figures represent (1) reported and estimated gold reserves of
central banks and governments, and (2) official and private dollar holdings reported by banks in the United
States, including foreign-held deposits, U. S. Government securities maturing within 20 months after date
of purchase, and certain other short-term liabilities to foreigners. Year-end estimates for all years except
1928; the 1928 figures are estimated on the basis of gold reserves at the end of that year plus dollar holdings
reported by 15 New York City banks as of May 31,1929.
Source: Board of Governors of the Federal Reserve System.
222
TABLE G—52.—Indexes of quantity and unit value of United States merchandise imports for
consumption and of domestic merchandise exports, by economic class, 7936-38 average and
1947-53
=100]
Period
Total
Crude
materials
Crude
foodstuffs
Manufactured
foodstuffs
Semi-manufactures
Finished
manufactures
Quantity
Merchandise imports for consumption: i
1936-38 average
1947
.
1948
1949
1950
1951
1952
1953 2
100
108
123
120
146
144
151
159
100
129
139
125
152
142
150
149
100
96
109
119
113
119
118
118
100
83
91
97
117
122
129
136
100
130
149
143
219
200
206
234
100
84
103
101
125
134
150
160
100
208
212
202
203
221
222
221
100
191
217
198
193
244
248
236
100
245
266
258
252
296
292
286
100
478
350
297
237
264
243
214
100
203
144
150
127
154
152
131
100
332
257
250
225
298
326
383
100
218
223
177
151
189
177
187
100
169
184
174
170
209
206
201
100
182
193
184
179
199
200
201
Unit value
1936-38 average
1947
_
_-.
1948
1949
1950
1951
1952
19532
_-
- -
100
213
235
224
243
305
289
277
100
180
203
195
214
312
258
233
100
311
343
330
454
512
516
518
Quantity
Domestic merchandise
ports: i
1936-38 average
1947
1948
1949
1950
_
1951
1952
19532
ex100
275
214
219
193
247
251
262
100
123
100
126
128
142
121
99
100
397
362
435
287
475
427
331
UnitValue
1936-38 average
1947
1948
1949
. .
1950
1951
1952 3
.
1953
-._
._
100
188
200
186
180
206
205
204
100
195
223
212
220
260
245
230
100
248
255
225
193
215
233
220
1 The indexes of quantity are a measure of the volume of trade after the influence on value of changes in
average prices has been eliminated. The indexes of unit value provide a measure of change in the average
prices at which trade transactions are reported in official foreign trade statistics, including changes in average
prices that result from changes in the commodity composition of trade.
2 Estimates based on data for the first 10 months.
NOTE.—Export indexes of crude and manufactured foodstuffs in some periods, particularly those of unit
value during 1950, are influenced by sales of large quantities of food products at prices considerably below
market quotations. Such exports include sales from Government-owned surplus and shipments on which
subsidies were paid by the Department of Agriculture.
Source: Department of Commerce.
223
SUMMARY
TABLE G-53.—Changes in selected economic series since 1939 and since 1952
Relatives on 1939 base
Source:
Appendix
Table
No.
Per-
centage
change,
Economic series
1946
1950
1951
1952
1953
1952 to
19531
231
218
290
314
288
530
361
308
592
381
323
530
402
341
563
236
321
480
592
637
+5.5
+5.4
+6.1
+7.6
151
142
192
170
161
260
183
160
266
188
164
235
195
171
244
+3.7
+4.0
+3.9
149
248
86
157
210
124
219
367
125
263
476
130
277
501
136
+5.4
+5.3
+5.0
National income
C ompensation of employees .
249
245
332
321
384
374
402
404
(a)
435
3+7.0
+7.5
G-10
Personal income
Disposable personal income
Personal net saving
._
245
226
444
312
293
419
350
321
626
371
335
626
392
353
670
+5.5
+5.5
+7.1
G-ll
Per capita disposable personal income:
Current prices
1953 prices
210
137
253
141
272
141
279
142
290
146
+3.7
+2.4
G-14
Realized net farm income
333
290
344
317
293
-7.4
G-ll
Population: Total
108
116
118
120
122
107
112
113
114
116
+1.7
+1.7
110
104
121
87
130
24
116
114
131
78
145
33
119
114
133
73
149
20
120
114
134
71
151
18
120
115
135
68
153
16
7
+t:o
-4.1
137
143
165
125
144
141
131
148
149
173
128
203
150
142
156
160
194
130
225
160
147
158
361
198
129
224
166
150
162
169
212
131
221
167
152
+2.4
+4.9
+7.4
+1.6
-1.4
+.6
+1.6
172
166
174
159
165
231
220
237
218
217
251
239
254
235
232
264
252
265
248
244
280
268
277
265
258
+6.0
+6.2
+4.5
+6.9
+6.1
G-l
Gross national product
Personal consumption expenditures
Gross private domestic investment
Government purchases of goods and
services...
G-2
Gross national product in constant prices. ..
Personal consumption expenditures
Gross private domestic investment
Government purchases of goods and
services:
Total
Federal
State and local-
G-7
G-15
14 years of age and over
Labor force, including armed forces
Civilian labor force
Employment
Agricultural
Nonagricultural . __
Unemployment
G-21 Wage and salary workers in nonagricultural
establishments : Total
Manufacturing
Durable
Nondurable
...
Contract construction
Government
Allother .
G-15
G-23
Average gross hourly earnings:
Manufacturing
Durable goods... ._
Nondurable goods
Building construction
Retail trade ._ -
._ __
+.6
+1.6
-9.0
G-24
Average gross weekly earnings:
Manufacturing.
Durable goods
Nondurable goods
Building construction
__ __ ._
Retail trade
184
175
189
185
157
249
239
251
243
206
271
262
268
268
219
285
276
280
290
228
300
291
291
300
237
+5.3
+5.7
+4.1
+3.7
+4.0
G-25
Industrial production
Durable manufactures.
_
Nondurable manufactures
Minerals
Agricultural produ ction
___
155
176
144
134
125
193
237
168
154
128
207
261
173
169
132
214
278
173
168
135
231
312
180
171
135
+8.1
+12.5
+4.4
__ _
+1 8
:o
G-26
New construction, current prices
Private
Residential (nonfarm) _ . _
Public
146
220
150
62
347
489
470
184
377
491
409
245
398
497
414
284
425
538
444
295
+6.8
+8.3
+7.3
+3.7
G-28
Business expenditures for new plant and
equipment: Total
Manufacturing
__
270
350
374
386
465
559
480
618
505
640
+5.2
+3.6
224
TABLE G-53.—Changes in selected economic series since 1939 and since 1952—Continued
Relatives on 1939 base
Source:
Appendix
Table
No.
Economic series
1946
1950
1951
1952
1953
Percentage
change,
1952 to
19531
140
168
159
106
2
()
173
215
187
126
146
187
239
204
131
153
191
243
202
136
161
193
239
200
143
167
+.8
-1.6
-.9
+5.3
+3.5
Wholesale price index: All commodities
Farm products
...
Processed foods
Other than farm products and foods
157
228
179
135
206
267
230
181
229
311
257
199
223
293
251
195
220
266
242
196
Prices received by farmers
Parity index (prices paid, interest, taxes,
and wage rates)
246
269
318
303
272
-1.3
-9.3
-3.9
+.7
-10.4
169
208
229
233
227
-2.8
116
93
288
322
297
329
358
415
399
484
+11.5
+16.7
Loans and investments of all commercial
banks: Total
Loans. _ _
Investments in U. S. Government
obligations
.. -
280
181
311
303
326
335
348
373
360
398
459
380
377
388
390
+3.6
+6.7
+.5
G-41
Gross public debt and guaranteed issues
545
539
545
562
578
G-44
Corporate profits before taxes
Corporate profits after taxes
Dividend payments.
Undistributed profits..
362
278
153
675
631
454
239
1,133
672
402
242
908
603
372
239
792
(2)
(2)
247
(2)
G-31
Consumer price index: Allitems__.
Food
Apparel
Rent .-Medical care *
Q-32
G-33
G-35
G-38
Short- and intermediate-term consumer
credit outstanding: Total _
Instalment credit
+2.9
314.7
39.8
+3.3
316.1
1
Changes are computed from data as reported and therefore may differ slightly from changes computed
from the relatives shown here.
2 Not available.
3 Based on data for the first 3 quarters of each year.
* Based on percentage changes published in Department of Labor monthly reports on consumer prices.
O
225
@FedFRASER