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Economic Report
or the President
TRANSMITTED TO THE CONGRESS






Economic Report
of the President
TRANSMITTED TO THE CONGRESS
JANUARY 20, 1955

UNITED STATES GOVERNMENT PRINTING-OFFICE




WASHINGTON : 1955

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, 60 cents




(H)

LETTER OF TRANSMITTAL

THE WHITE HOUSE,

January 20, 1955.
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 regard
as its highlights.
Sources of Economic Progress
With production and employment now increasing on a broad front, the
events of the past year have borne out the major conclusions of the Economic
Report of January 1954 concerning the state of our economy and the policies
needed to promote sound economic growth.
Economic well-being sustains our whole national life. A high and rising
standard of living brings to more of our people the opportunity for continued intellectual and spiritual growth.
The main sources of our Nation's economic strength are its free institutions and the qualities of its people—their ambition, skill, enterprise, and
willingness to make great efforts in their own behalf and in behalf of their
families and communities.
The need of our times is for economic policies that, in the first place,
recognize the proven* sources of sustained economic growth and betterment,
and in the second place, respect the need of people for a sense of security
as well as opportunity in our complex, industrialized society.
A free economy has great capacity to generate jobs and incomes if a
feeling of confidence in the economic future is widely shared by investors,
workers, businessmen, farmers, and consumers.
Many factors favor a continuation of our vigorous economic growth.
The population is increasing rapidly, educational levels are rising, work
skills are improving, incomes are widely distributed, consumers are eager to
better their living standards, businessmen are starting new enterprises and
expanding old ones, the tools of industry are multiplying and improving,
research and technology are opening up new opportunities, and our public
policies generally encourage enterprise and innovation.




in

With wise management of the national household, our country can within
a decade increase its production from the current annual level of about 360
billion dollars to 500 billion, or more, expressed in dollars of the same
buying power.
In the future as in the past, increases in productivity and in useful employment opportunities will be the core of economic expansion.
The role of the Federal Government in the achievement of these goals is
to create an atmosphere favorable to economic activity by encouraging
private initiative, curbing monopolistic tendencies, avoiding encroachment
on the private sector of the economy, and carrying out as much of its own
work as is practicable through private enterprise. It should take its full
part at the side of State and local governments in providing appropriate
public facilities. It should restrain tendencies toward recession or inflation. It should widen opportunities for less fortunate citizens, and help
individuals to cope with the hazards of unemployment, illness, old age, and
blighted neighborhoods.
Last year the Government took many steps, both legislative and administrative, to encourage economic expansion. Fiscal and monetary measures
fostered an expectation of improving economic conditions and encouraged
people to maintain a high rate of expenditure. The opportunities of competitive enterprise were enlarged; economic ties with other countries were
improved; the floor of personal and family security was strengthened; and
additions were made to our public assets.

The Economy Today
The year 1954 was one of transition from contraction to recovery. The
contraction reflected the efforts of businessmen to reduce inventories, and
was aggravated by a large reduction in military expenditures.
The contraction was relatively mild and brief, because of a variety of
timely public and private actions.
The Government cut taxes, the Federal Reserve System eased credit
conditions, and the Treasury arranged its financing so as not to compete
with mortgages and other long-term issues. A comprehensive program for
encouraging private enterprise was submitted to the Congress. Apart from
this, the decline in private incomes was automatically cushioned by increased payments of unemployment insurance and other benefits and by
sharp cuts in taxes due the Government on the reduced incomes.
Consumers maintained a high rate of spending, businessmen kept capital
expenditures at a high rate, builders stepped up their activities, trade
unions conducted their affairs with a sense of responsibility, farmers recognized the dangers of piling up ever larger surpluses, private lenders
made ample supplies of credit available on liberal terms, States and localities
carried out large construction programs, and export demand remained
strong.
Although manufacturing production fluctuated, total output was fairly
stable, and disposable personal income reached record levels. But some




IV

industries and localities suffered from serious unemployment. The fortunes of most of them turned for the better when recovery got under way in
the early autumn, and they will benefit from further general economic
expansion.
Instead of expanding Federal enterprises or initiating new spending
programs, the basic policy of the Government in dealing with the contraction was to take actions that created confidence in the future and stimulated
business firms, consumers, and States and localities to increase their
expenditures.
The vigor of the recent recovery, which has already made up half of
the preceding decline in industrial production, suggests that economic
expansion will probably continue during coming months. It holds out the
promise that we shall achieve a high and satisfactory level of employment
and production within the current year.
A further expansion of consumer spending may reasonably be expected;
we are soon likely to experience some rebuilding of inventories; the decline
of Federal spending next year will be less rapid than during the last two
years; State and local expenditure will probably continue to expand; the
outlook for housing and commercial construction continues to be good;
there is a prospect that plant and equipment expenditures may turn upward, as the general economic advance proceeds; the outlook for export
demand is brightened by the economic resurgence of an ever-widening area
of the Free World.
It is essential to keep a close watch on financial developments; continued
economic recovery must not be jeopardized by overemphasis of speculative
activity.
Toward Sustained Economic Growth
The wise course for Government in 1955 is to direct its program principally toward fostering long-term economic growth rather than toward
imparting an immediate upward thrust to economic activity.
Further efforts to reduce Federal expenditures, together with increasing
revenues from a tax base growing as the economy expands, should make
possible some additional general tax reductions next year. Progress could
then also be made in further lowering tax barriers to the free flow of funds
into risk-taking and job-creating investments.
Government should persist in its efforts to maintain easy entry into trade
and industry, to check monopoly, and to preserve a competitive environment. Continued encouragement should be given to small and new
businesses.
Scientific research and development activities in all their phases should
continue to have the earnest support of the Federal Government.
Measures by ourselves and other nations to reduce existing barriers to
international trade, payments, and investment will make the Free World
stronger and aid our own economic growth.




Measures should be considered to extend personal security against the
hazard of unemployment, to strengthen minimum wage legislation, to
protect savings in credit unions, and to increase the President's discretionary authority to vary the terms of insured mortgage loans in the interest
of economic stability.
A great ten-year program to modernize the interstate highway system
should be authorized.
Our partnership policies of water resource development should be further
implemented by appropriate Congressional and local action.
Action should be taken this year to help meet our Nation-wide needs
for school construction. I shall shortly send to the Congress a special
message that will deal with methods by which the Federal Government can
appropriately assist in this vital field.
Support should be provided for an Office of Coordinator of Public Works
Planning in the Executive Office of the President, and for a revolving fund
for advances to the States and municipalities for public works planning.
Conclusion
Our Nation's recent history teaches that a foresighted Government can
do much to help keep the economy stable, but experience affords no good
basis for a belief that the Government can entirely prevent fluctuations.
We should harness the idealism as well as the intelligence of our generation to the practical end of facilitating the growth of private enterprise
and of increasing the stability of our economy.
The Government will shoulder its full responsibility to help realize that
goal.




DWIGHT D. EISENHOWER

VI

CONTENTS
Page
CHAPTER 1. THE EXPANSIVE POWER OF THE AMERICAN ECONOMY. .

1

I. Obligations of Federal Government Under Employment
Act
II. Paths to Economic Growth
III. Steps Taken During 1954 to Build a Stronger Economy..

1
3
7

CHAPTER 2. A YEAR OF ECONOMIC TRANSITION

I.
II.
III.
IV.
V.
VI.

The Onset of Contraction
Gathering Forces of Recovery
Why the Contraction Proved Mild
Role of Federal Government
Effects of Governmental Policies
Lessons from Experience and Guides to the Future

CHAPTER 3. PROGRAM FOR SUSTAINED ECONOMIC PROGRESS

I. Promoting the Spirit of Enterprise
Fiscal Policies for Economic Expansion
Assisting New and Small Businesses
Improving the Basis of Technology
II. Strengthening Economic Ties with Other Countries
Freeing the Channels of Trade
Fostering Foreign Investment
III. Building the Floor of Personal and Family Security. .
Meeting the Hazard of Unemployment
Extending Economic Security in Retirement
Augmenting Low Incomes
Protecting Workers* Savings
Improving Homes and Neighborhoods
IV. Expansion of Our Public Assets
Modernizing the Highway System
Accelerating the Development of Natural Resources

Expanding State and Local Works
Coordination of Public Works Planning
V. Increasing the Stability of a Growing Economy




vn

11

11
15
17
18
20
22
48

48
48
50
51
51
52
53
54
55
57
57
59
59
61
61
62

63
64
65

APPENDICES
Page
A. SUMMARY OF RECOMMENDATIONS IN THE ECONOMIC REPORT OF
THE PRESIDENT
B. SOME LEADING ECONOMIC DEVELOPMENTS DURING 1954

I.
II.
III.
IV.
V.
VI.

The Nation's Output and Its Disposition
Employment and Earnings
Price Changes
Monetary and Credit Developments
Government Finances
Foreign Economic Developments

C. REPORT TO THE PRESIDENT ON THE ACTIVITIES OF THE COUNCIL
OF ECONOMIC ADVISERS DURING 1954

69
73

75
86
95
100
110
119
125

D. STATISTICAL TABLES RELATING TO INCOME, EMPLOYMENT, AND
PRODUCTION

135

LIST OF TABLES AND CHARTS
{Chapters 1-2 and Appendix B)
Tables

Page

1. Changes Since 1939 in Physical Volume of Production
2. Recent Changes in Income, Production, and Employment
3. Recent Changes in Gross National Product and Its Major Components
4. Output of Some Rapidly Growing Consumer Commodities and
Services
B-l. Changes in Industrial Production
B-2. New Construction Activity
B-3. Gross National Product and Its Major Components
B-4. Distribution of Personal Income Disbursements
B-5. Distribution of Disposable Personal Income
B-6. Alternative Measures of the Nation's Total Output
B-7. Changes in Nonagricultural Employment by Industry
B-8. Number of Persons Receiving General Assistance
B-9. Partial Unemployment of Usual Full-Time Workers
B-10. Average Weekly Hours of Work in Selected Industries
B-l 1. Changes in Prices
B-l 2. Net Changes in the Ownership of the Publicly Held Federal
Debt, December 31, 1953, to December 31, 1954
B-l 3. Net Changes in the Money Supply, 1952-54
B-l4. Factors Affecting Member Bank Reserves, December 1953 to
December 1954
B-l 5. Net Changes in Consumer Instalment and Noninstalment
Credit Outstanding




vm

11
14
14
23
77
78
81
82
83
85
87
91
92
93
95
101
101
105
107

Tables {Continued)

Page

B-16. Securities Offerings, January to November, 1953 and 1954. .
B-17. Federal Receipts and Expenditures: Conventional Budget
and Consolidated Cash Statement, 1950-56
B-l 8. Effect of Financial Operations on the Federal Debt, 1952-56 .
B-19. Consolidated Cash Statements of Federal, State, and Local
Governments, 1950-54
B-20. Gross State and Local Government Debt: Total and as Percent of Gross National Product, 1929, 1939, 1949-54
B-21. Government Receipts and Expenditures as Shown in the
National Income Accounts, 1950-54
B-22. Reconciliation of Federal Government Receipts and Expenditures as Shown in the National Income Accounts with
Receipts and Expenditures as Reported in the Consolidated Cash Statement and the Conventional Budget,
1952-54
B-23. Growth of Western European Industrial Production, Selected
Countries
B-24. Distribution of Nonmilitary Merchandise Exports and
Imports of the United States, by Areas, January-October,
1953 and 1954
B-25. Net Private United States Long-Term Foreign Investment,
by Areas, 1953 and 1954

108
Ill
113
114
115
117

118
119

122
122

Charts

1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.

Growth of the Gross National Product, 1909-54
Output Per Man-Hour in Major Industries, 1909-53
Federal Receipts and Expenditures
Indicators of Prosperity (gross national product, disposable
personal income, employment)
Gross National Product: Major Categories of Expenditure. . . .
Investment Expenditures
Government Purchases of Goods and Services: Percent of Gross
National Product
Gross National Product: Final Purchases and Inventory Change.
Employment in Nonagricultural Establishments
Employment and Unemployment
Hours and Employment in Manufacturing
Industrial Production
Construction Expenditures
Consumer Income and Expenditures
Consumer Expenditures (by type)
Manufacturers' Inventories and Sales
Manufacturers' Sales and New Orders




IX

3
5
8
12
26
26
27
28
28
29
30
31
32
33
34
35
36

Charts (Continue^

18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
28.
29.
30.
31.
32.
33.

Wholesale Inventories and Sales
Retail Inventories and Sales
Average Hours and Earnings in Manufacturing
Corporate Profits Before and After Taxes
Corporate Profits Before Taxes: Manufacturing and All Other..
Liabilities of Business Failures
Wholesale and Consumer Prices
Wholesale Prices: Farm and Industrial
Wholesale Prices: Industrial Materials and Goods
Money Supply
Bank Loans and Investments
Consumer Instalment Credit
Money Rates and Bond Yields
Stock and Bond Prices
Indicators of Investment Preparations
Housing Starts and Financing Applications

B-l.
B-2.
B-3.
B-4.
B-5.
B-6.
B-7.
B-8.
B-9.

Gross National Product (in current and constant prices)
Farm Production
Unemployment Rates (by States), 1954
Prices Received and Paid by Farmers
Consumer Prices on a Postwar Base
Consumer Prices on a Prewar Base
Federal Reserve Bank Credit
Member Bank Reserves and Borrowings
U. S. Balance of Payments on Current Account




37
38
39
40
40
41
41
42
42
43
44
44
45
45
46
47
76
79
90
98
98
99
102
103
123

Chapter 1

The Expansive Power of the
American Economy

T

HIS IS THE SECOND REPORT of the present Administration
under the provisions of the Employment Act of 1946, which declares
it to be a continuing responsibility of the Federal Government "to promote
maximum employment, production, and purchasing power." The earlier
Report set forth the conditions of economic progress in our country and in
our times. By and large, the events of the intervening year have borne out
the conclusions of that Report concerning the economic state of the Nation
and the policies needed to promote sound economic growth.
I. OBLIGATIONS OF FEDERAL GOVERNMENT
UNDER EMPLOYMENT ACT

The Employment

Act

The authors of the Employment Act wisely recognized that the main
source of the economic strength of a nation consists in free institutions and
the qualities of its people—their ambition, skill, enterprise, and willingness
to make great efforts in their own behalf and in behalf of their families and
communities. The Act therefore emphasizes economic growth rather than
the mere stoppage or alleviation of business contractions. And it stresses
the importance of using the powers of Government "to foster and promote
free competitive enterprise," which has been the great energizer of our own
Nation and of every other nation that has possessed the wisdom to submit
to its discipline.
In framing the Employment Act, the Congress recognized that the Government has no way of guaranteeing prosperity and that, if a recession
occurs, no single action or rule of policy will necessarily suffice to generate
a lasting recovery. The Act does not prescribe what means are to be used
by the Federal Government in promoting the basic objective of maximum
employment and production. It does, however, specify that the means
must be consistent with the "needs and obligations" of the Government and
with "other essential considerations of national policy." In other words,
in implementing the Employment Act, the Federal Government is subject
to certain constraints. Among other things, it must honor the constitutional
rights of individuals; it must respect the authority of the States; and it must
protect the integrity of the money in which contracts are expressed and
payments made.




The obligation of the Federal Government under the Employment Act
"to promote maximum employment, production, and purchasing power,"
and to do so by means that are consistent with "other essential considerations of national policy," is not always remembered. Some citizens, lacking
faith in the ability of the private economy to generate a high level of activity, espouse a steadily increasing role for Government. They urge new
public undertakings and unbalanced budgets as devices for augmenting
private demand, often with little regard to the cause or magnitude of any
deficiency in demand. Other citizens, adhering to what they regard as
the ultimate economic verities, are critical of any governmental action
that is designed to prevent or to minimize the rigors of depressed incomes
and unemployment.
These are extreme and doctrinaire positions. If the one is insensitive to
the inequities of inflation, the other is insensitive to the misfortunes of depression. Each carries the danger of undermining, sooner or later, our
system of free competitive enterprise. Neither is suited to our needs or our
times. The American people believe firmly in economic freedom, but will
not passively accept depression or inflation. The need of our times is for
economic policies that, in the first place, recognize the proven sources of
sustained economic growth and betterment, and in the second place, respect
the need of people for a sense of security as well as opportunity in our
complex and industrialized society.
Basic Economic Tenets
The economic actions of this Administration and its program for the
future rest upon certain basic propositions. First, competitive markets,
rather than governmental directives, are as a rule the most efficient
instruments for organizing production and consumption. Second, a free
economy has great capacity to generate jobs and incomes if a feeling of
confidence in the economic future is widely shared by investors, workers,
businessmen, farmers, and consumers. Third, the Federal Government
creates an atmosphere favorable to economic activity when it encourages
private initiative, curbs monopolistic tendencies, whether of business or
labor, avoids encroachment on the private sector of the economy, and carries
out as much of its own work as is practicable through private enterprise.
Fourth, the Federal Government generates confidence when it restrains
tendencies toward recession or inflation, and does this by relying largely on
indirect means of influencing private behavior rather than by direct controls
over people, industries, and markets. Fifth, the Federal Government contributes to economic growth when it takes its part, at the side of the States,
in promoting scientific research and in providing public facilities, such as
highways, hospitals, harbors, and educational institutions, on which the
expansion of the private economy heavily rests. Sixth, the Federal Government strengthens the foundations of the economy when it widens opportunity for its less fortunate citizens and, working in cooperation with the




States and localities, helps individuals to cope with the hazards of unemployment, illness, old age, and blighted neighborhoods.
These economic tenets are basic and inseparable. They constitute guides
to policies which, if pursued persistently, will advance us toward the goal
of an increasing national income, shared equitably among those who contribute to its growth, and realized in dollars of stable buying power. In
broadest outline they constitute the framework of an economic system that
is at once strong and humane, a system that can provide both greater material abundance and a better quality of living.
II.

PATHS TO ECONOMIC

GROWTH

The Growth Potentials of Our Economy
The American economy has created new jobs and produced marvels of
abundance in the past. It should be able to do so in equal or even greater
degree in the future. Our population is rapidly increasing, educational
levels are rising, work skills are improving, incomes are widely distributed,
consumers are eager to improve their living standards, businessmen are
actively engaged in starting new enterprises and expanding old ones, the
tools of industry are multiplying and improving, research and technology
are constantly opening up new opportunities, and our public policies generally encourage enterprise and innovation. With so many favorable factors, a continuation of rapid economic growth may reasonably be expected.
CHART 1

GROWTH OF THE GROSS NATIONAL PRODUCT, 1909-54
WITH HYPOTHETICAL PROJECTION FOR 1965
BILLIONS OF DOLLARS
600

BILLIONS OF DOLLARS
1 600

(RATIO SCALE)

500

500

400

400
GROSS NATIONAL PRODUCT
(1954 PRICES)
300

300

200

200

100 I <n i i i i I 1 (I M 1 1 i I i i i 1 i M i i N 1 I 1 I 11 i I i I 1 I 11 i I I I I I i i i ( i i i 1 ( I I 0 0
1910

1
5

20

25

30

35

40

45

50

SOURCES: DEPARTMENT OF COMMERCE AND COUNCIL OF ECONOMIC ADVISERS.




55

60

65

An arithmetical calculation, based on a number of technical assumptions,
the most important being that the average annual gains in productivity that
we have had in recent times will occur in the future, shows (see Chart 1)
that our country can within a decade increase its production from a*
current annual level of about 360 billion dollars to 500 billion or more, with
the figures expressed in dollars of the same buying power. Of course, the
record of the past sets no limit to our future achievements. Nor should we
permit arithmetical projections to obscure the basic fact that an economy
succeeds only as people succeed. Our economic future depends on the
full use of the great treasure house of intelligence, skill, energy, and confidence of the American people.
A glorious economic future may be ours, but it is not vouchsafed to us.
We shall achieve it only by wise management of our national household. In
the future as in the past, increases in productivity and in useful employment
opportunities will be the core of economic expansion (see Chart 2). The
tools and equipment used by farm, factory, mine, and office workers must
be multiplied and improved. Industrial techniques, materials, and management must become more efficient, and skills and morale enhanced, so
that the amount of production for each hour worked will increase. And
unless there are satisfactory jobs for those who seek useful employment, and
unless human labor is devoted increasingly to the production of goods and
services that improve the quality of life, our gains in productivity may be
dissipated.
Role of Government in Progress
The history of our country^ as well as of other parts of the Western
World, demonstrates that economic progress depends fundamentally on the
enterprise and initiative of millions of people seeking to better themselves.
In such a process of economic expansion the Government can play, however, a highly constructive role. Within its own proper sphere, the Government must be ready and willing to act. Indeed, failure or reluctance
to play its part can be a serious handicap to economic growth, as would
a similar lack of initiative on the part of private enterprise.
Among the activities essential to economic progress and in which there
is a large public interest is the field of education, extending from education
for literacy to the highest reaches of theoretical inquiry. Scientific and
technical knowledge, research and development programs, and industrial
innovation and its diffusion are the wellsprings of an increasing output per
man-hour, upon which our hopes for a better life and more leisure in the
future largely depend. An enlightened public policy must therefore focus
attention upon augmenting the number of young people who have scientific,
engineering, and technical skills; upon encouraging creative thinking and
invention; upon inducing business enterprises and nonprofit organizations
to support expanding programs of research; upon enlarging the range and
depth of Federal research and development programs in fields that cannot
be covered adequately by private efforts; and upon hastening the industrial
application of new methods and ideas through new investments.




CHART 2

OUTPUT PER MAN-HOUR IN MAJOR INDUSTRIES, 1909-53
INDEX, 1939 = 100
"250

-

(RATIO SCALE)

INDEX, 1939 = 100

PRIVATE ELECTRIC UTILITIES

100

50 —
25

-

250

STEAM RAILROADS

100
50
25
250 r- AGRICULTURE
100
50
25L-7

-

250

MANUFACTURING

100

250

r

-

MINING

100
50
25

II M I II I II I i I I 11 1 M II I II I I I Ml

1910

1915

1920

1925

1930

1935

II 1 I M 11 I I I II I

1940

1945

NOTE: BROKEN LINE CONNECTING POINTS INDICATES OATA NOT AVAILABLE FOR INTERVENING YEARS.

SOURCE: COUNCIL OF ECONOMIC ADVISERS, BASED ON DATA FROM
VARIOUS GOVERNMENT AND PRIVATE SOURCES.




1950

Public policy must also protect incentives and encourage a spirit of enterprise and innovation among people. The man or woman who, in the hope
of personal betterment, works harder, designs a new product, creates a
new method, invests in a new business, moves to a new job, or suggests a
new idea to his employer must believe that the rewards of initiative and
effort are worth while. Through all of its policies the Government must
encourage enterprising action by business managers, investors, and workers,
in an environment that is kept basically free and competitive.
Economic progress entails changes in technology and commerce, and these
changes require adjustments by people to new and altered ways of doing
things. To insure that a dynamic economic environment involves a minimum of personal hardship and a maximum of new opportunity, governmental policies should be designed to ease the movement of people to new
areas or new occupations. Through an ever wider possession of education,
technical skill, and capacity for movement, new doors of economic opportunity can be opened and the remaining pockets of low income in our land
can be reduced.
Expansion of private economic activity calls for great increases in the
Nation's physical stock of public capital, as the Economic Report to the
Congress in January 1954 pointed out. Government—State and local
as well as Federal—has a responsibility to see that progress is promoted
by adequate public works for education, medical care, transportation, conservation, and recreation.
The achievement of our economic goals requires that we further
strengthen the floor of security for individuals and families in our industrialized society. When people have provided for minimum needs in their
old age or in the event of misfortune, they are apt to become more productive and more venturesome participants in an expanding economy. A wise
Government can help people to provide for these needs, without impairing
their self-reliance.
A strategy for realizing our Nation's growth potential must include, as
an indispensable part, measures by ourselves and others for gradually clearing the channels of trade, of payments, and of investments between nations,
so that our people as well as others may devote themselves to the tasks in
which they have a special advantage, and so that the Free World may be
bound together by a mutually beneficial economic intercourse. Thus our
Nation's security, as well as its material welfare, may be advanced.
Finally, we must continue to coordinate all governmental programs,
especially monetary and fiscal policies, in order to restrain and offset any
tendencies that may develop toward recession or inflation. An expanding
economy requires increases in the supply of money and credit, but not on a
scale that invites inflation in the present and possible depression in the
future. The Federal Government should continue to manage its revenues,
debts, and expenditures, and conduct its regulatory activities, so as to
contribute to the expansive strength and stability of the economy.




III.

STEPS TAKEN DURING 1954

To

BUILD A STRONGER ECONOMY

During the year that has just closed, the Government has taken many
steps, both legislative and administrative, to put into effect policies that
augment the expansionary powers of our economy and that express the basic
economic tenets set forth in this Report. These actions have helped to
generate confidence in the minds of the American people.
Fiscal and Monetary Actions
The most powerful and pervasive of these actions have been of a fiscal
and monetary character. The reduction in military and other outlays,
which occurred after the ending of the Korean conflict, made possible sharp
cuts both in taxes and in the Federal budgetary deficit (see Chart 3). Concurrently, the Federal Reserve authorities made clear their intention to
maintain an adequate supply of credit at moderate cost, so long as this
facilitated economic growth without inflation. These fiscal and monetary
measures stimulated constructive economic attitudes and behavior on the
part of consumers and businessmen. They fostered the expectation of
improving economic conditions, reasonably stable prices, efficient housekeeping by Government, and tax reductions in the future. Thus, they
encouraged the maintenance of a high rate of private spending, and set the
stage for successful application of other governmental policies to foster
long-term expansion.
Enlarging the Opportunities of Competitive Enterprise
Recent actions of the Congress and the Executive have enlarged and
clarified the range of private enterprise. Of great potential significance
is the new law which authorizes the Atomic Energy Commission to license,
with due regard to the public interest, the use of special nuclear material in
privately-owned reactors, and which substantially broadens patent protection for private inventions in the atomic energy field. Opening the door
to competitive enterprise in the development of nuclear power and other
industrial uses of atomic energy will magnify the benefits our people are
already deriving from this new resource.
The Government also made progress in redrawing the line separating
private and public enterprise. Steps were taken to dispose of numerous
enterprises for which public operation was inefficient or of doubtful advantage. Simultaneously, the Government increased the amount of its
contracting with private firms for necessary services and facilities—as an
alternative to producing them itself, often at higher cost to the taxpayer. To
hasten the economic development of our water resources, and yet restrict
Federal participation to what others are incapable of accomplishing, the
partnership principle of Federal cooperation with local interests, public
or private, was launched.
The vigor of competitive enterprise has been promoted by many changes
in our laws. Thus the recent tax law liberalized depreciation allowances,




CHART 3

FEDERAL RECEIPTS A N D EXPENDITURES
BILLIONS OF DOLLARS
CONVENTIONAL
BUDGET

BILLIONS OF DOLLARS
CASH
BUDGET

80

80
RECEIPTS
EXPENDITURES

60

60

40

20

20

1953

1954 1955^ 1956^
+10

+ 10

SURPLUS

u LJ ^
DEF C T
-JO

-10

1953

1954 1955^ 1956^
1953 1954 1955^ 1956 ^
FISCAL YEAR

^ESTIMATED.
SOURCES: TREASURY DEPARTMENT AND BUREAU OF THE BUDGET.-




extended the period over which business losses can be carried back for tax
purposes, facilitated a ploughing back of earnings for expansion, encouraged
research and development expenditures, and granted a limited tax credit on
dividends received by shareholders. All of these measures should assist
business firms, especially those of medium or small size, to grow and to
provide new jobs at satisfactory wages. At the same time, legislation was
passed to relax Federal controls over farming. The introduction of flexible
price supports for basic crops and the modernization of the "parity" formula
will facilitate the adjustment of our farming enterprises to changing markets
and thus help improve the outlook for the farmer.
Strengthening Economic Ties with Other Countries
Although action on major proposals for changes in our foreign economic
policy was deferred to this year, several constructive measures to advance
international trade and investment were adopted during 1954. Government controls of the export of many commodities to friendly countries were
removed. The lending authority of the Export-Import Bank was increased
from 4.5 billion to 5 billion dollars, and a new export-credit program was
introduced to facilitate trade. Action was taken to establish uniform and
reasonable standards for the application of the Buy American Act.
Improvements in customs administration were made to benefit trade.
With the aim of enlarging private investment abroad, the Foreign Operations Administration extended the coverage and halved the premium charge
for government insurance against expropriation or currency inconvertibility.
Another advance toward the same objective was made by removing the
over-all limitation on the extent to which foreign tax payments could be
credited against United States income taxes, and by allowing shareholders
in regulated investment companies having more than one-half their investments in foreign countries to benefit by foreign tax credits.
Building the Floor of Personal and Family Security
As a result of governmental actions during the past year, many people
are now better able to meet their housing needs and the problems of old
age and unemployment. Over 10 million men and women were brought
into our system of Old-Age and Survivors Insurance. Social security contributions were increased, but the scale of benefits paid to the aged was
raised and the amount of their permissible earnings increased. At the same
time, pensions and disability compensation rates for veterans were raised.
The Federal-State unemployment insurance system was also strengthened.
Over 1.3 million workers in smaller firms and 2.3 million Federal civilian
employees were brought into the system, thus raising the total covered
population to approximately 40 million. Both the amount and the maximum duration of benefits payable under the unemployment insurance law in
the District of Columbia were increased. A special Federal loan fund
was established to assure uninterrupted payment of unemployment benefits
by States whose reserve funds may become low. To meet acute personal




problems, provision was made for substantially larger grants to the States
for vocational rehabilitation.
Important actions were also taken to extend home ownership, conserve
urban neighborhoods, and speed the elimination of slums. Thus, the terms
on which mortgage loans could be insured by the Federal Housing Administration were liberalized for both new and existing dwellings, and the
application of mortgage insurance was extended to sale and rental housing
in blighted areas. Federal grants and loan funds were provided to aid
urban renewal. Along the same line, the authority of the Administrator
of Veterans' Affairs to make direct home and farmhouse loans to veterans
was extended, and additional funds were made available for this purpose.
Expansion of Public Assets
Recognizing that the provision of public roads, schools, hospitals, and
community facilities has long lagged behind our needs, the Federal Government acted last year to augment a number of public works activities.
Federal highway grants to the States of 875 million dollars were authorized
for each of the fiscal years 1956 and 1957, thus greatly increasing the annual amount of Federal aid previously made available. One hundred and
twenty-five million dollars was made available for school construction in
areas where Federal activities had affected school enrollment. Substantial
aid was authorized to the States for building hospitals and other medical
facilities, and was backed by an appropriation of nearly 100 million dollars
for the fiscal year 1955. After many years of debate concerning the St.
Lawrence Seaway, a development corporation was finally created and
authorized to cooperate with a Canadian agency in the construction of the
Seaway, our share of the cost to be financed on a self-liquidating basis.
Apart from this, over 1 billion dollars was authorized for the construction
and repair of navigation, flood control, and other civil works. Additional
authorizations for military construction were made, supported by an appropriation of 817 million dollars for the fiscal year 1955. Within the same
category of legislation was the authority granted to the Executive to add
to the tanker fleet. Finally, important steps were taken to put advance
planning of public works on a more systematic basis.
Plan of Report
The effects of these and related governmental actions are considered later
in this Report and its Appendices. The next chapter is devoted to a review
of recent economic developments, the principal measures taken by Government to influence their course, and the prospects of the economy. This
review should help us determine the next steps of a governmental policy
aiming to promote a sustained and satisfactory rate of economic growth.
A program of proposed governmental actions is set forth in the third and
final chapter.




10

Chapter 2

A Year of Economic Transition
T THE TIME last year when the Economic Report was submitted
V to the Congress, our economy was undergoing a contraction, partly
as a result of readjustments forced by the ending of the Korean conflict,
partly for other reasons. Today, after a small and brief over-all decline,
though one that affected individual industries and localities unevenly, production and employment are again increasing on a broad front. The recovery has already carried economic activity to the highest level of the past
twelve months. And although aggregate production and employment during 1954 fell somewhat short of the levels reached in 1953, the year just concluded will go down in history as one of our most prosperous years. The
following analysis of recent events is documented by the charts and tables of
this chapter, and by the evidence assembled in Appendices B and D.
I. T H E

ONSET OF CONTRACTION

In our economy, or in any other of which we have definite knowledge,
occasional imbalances between production and sales are virtually bound to
occur. Such a condition developed in 1953. After the steel strike in the
summer of 1952 was settled, production, employment, and incomes increased
sharply. So too did consumer spending, though at a somewhat lower rate
TABLE 1.—Changes since 1939 in physical volume of production
Percentage change 1 from—
Type of output
1939 to 1954 1946 to 1954 1952 to 1954 1953 to 1954
Gross national product 2

+89

+28

Agricultural production

+35

+10
+39
+41
+22

Industrial production: Total
Manufactures

+116
+123
+63

Minerals

+1
+1
-3

-3
0
-7
-7
-4

+96

+10

+24

+4

+5
+1

New construction *

+90

Consumer services ! *

+72

-10

-12

-10

Railway freight carried«

+56

+109

+17

+6

Electric power production 8_.

+266

1

Based on preliminary estimates for 1954.
Based on data in constant prices.
Consumer expenditures for services except housing, in constant prices.
* Ton-miles of revenue and nonrevenue freight.
5
Production by electric utilities only.
Sources: Department of Agriculture, Department of Commerce, Department of Labor, Board of Governors of the Federal Reserve System, Federal Power Commission, Interstate Commerce Commission, and
Council of Economic Advisers.
2
8




II

CHART 4

INDICATORS OF PROSPERITY
BILLIONS OF DOLLARS

DOLLARS

400
1954 PRICES

300

200

TOTAL DISPOSABLE
PERSONAL INCOME
(LEFT SCALE)

1600
1400
• J

100

1200
^ > PE« CAPITA DISPOSABLI
PERSONAL INCOME f
t*?l6rtT SCALE)
1

1000
800

I

I I

I 1 I I

I

I i

% 1 f

MILLIONS OF PERSONS

I

I

I

I

\&t > ^€, I

PERCENT OF CIVILIAN LABOR FORCE

EMPLOYMENT

100
90
PERCENT OF CIVILIAN
LABOR FORCE
(RteHT SCALE)

80
70

_L

1
1930

1935

i

1940

t

t

i

1945

i

t

t
1950

SOURCES: DEPARTMENT OF COMMERCE AND COUNCIL OF ECONOMIC ADVISERS.




12

than the increase of personal incomes. The rate of general economic expansion was reduced, but continued to be fairly rapid, during the early
months of 1953. Total spending by consumers roughly kept pace with
their rising incomes during these months; however, spending on commodities, as distinct from services, tapered off. Inventories therefore kept rising,
particularly those held by retailers. About the same time the flow of new
defense contracts, which tie up inventories of factories on a larger scale than
civilian production, diminished sharply. In view of these developments, as
well as the general quickening of deliveries, many business firms deemed it
prudent to bring their inventories into better balance with sales and incoming orders. The effort to adjust inventories led to scattered declines
in production, which became visible in the Nation's aggregate of industrial
production after July 1953. Within a few months, total production fell
short of consumption, just as it had previously exceeded consumption. An
inventory recession, of the sort that occurred in 1948-49 and earlier times
in our history, was under way.
This economic readjustment was complicated and aggravated by the
close of hostilities in Korea. With the war at an end, the need for many
types of defense goods diminished. At the same time, basic defense plans
were being modified to strengthen our economy for what might prove a
very long period of "cold war." The changed situation in Korea, the
revisions of military programs, and improvements in the administration of
our defense establishment brought about a sizable drop of military and
related expenditures. A larger reduction was carried through during 1954
than had been anticipated, and it called for further readjustments by the
economy. For the decline of defense spending not only reduced the
Nation's stream of expenditures for final use; it also accentuated the efforts
of businessmen to cut inventories.
The primary contractive factor during the latter part of 1953 was the
adjustment of inventories. This role shifted to defense spending after the
turn of the year. In the second quarter of 1953 businessmen added to their
inventories at an annual rate of 5.4 billion dollars. In the first quarter of
1954 they reduced their inventories at a rate of 4.2 billion. In the meantime, expenditures on national security fell from an annual rate of 54.3
billion dollars to 46.9 billion, while total Federal spending on goods and
services fell from 62.2 billion to 55.0 billion. Thus the combined decline of
inventory and defense spending over this nine-month interval was at an
annual rate of 17 billion dollars.
This reduction of expenditures was reflected rather promptly in production, employment, the flow of incomes, business loans, imports, and other
phases of the Nation's economic life. The over-all decline of economic
activity was small, but its impact was very uneven, and some industries and
localities suffered seriously. The impact of inventory liquidation and of the
cuts in defense expenditures was heaviest on those engaged in the manufacture of durable goods. Other factors added to the downward pressure




T A B L E 2.—Recent changes in income, production, and employment
Percentage change l from—
Item

1953 to
1954 3

_ugust 1954
July 1953 to March 1954 Ai DecemMarch 1954 to August to 1954 2
ber
1954

INCOME

+0.1
+.4
-2.1
+1.4
+3.3
+.1

+0.1
-1.1
-1.6
+5.7
+14.5

-1.1
-3.2
+1.6
+3.6
+11.8

+1.4

+.2

-11.2
-2.7

-17.7
-10.3

Industrial production: Total
Manufactures: Total
_
Durable goods
Nondurable goods
_
Minerals
_

-6.7
-6.6
-9.8
-1.7
-4.3

-10.2
-10.1
-14.0
-5.8
-6.7

.0
.0
.0
.0
-2.7

New construction *

+5.2

+3.7

+4.7

Employment: Total
Nonagricultural establishments: Total.Manufacturing
_
Mining
Transportation
_
Allother
_.

-1.6
-2.8
-7.1
-11.7
-7.0

-1.9
-2.9
-7.1
-8.5
-8.1

-1.0
-3.3
—5.4
-.1

Man-hours worked in manufacturing: Total.
Durable goods
Nondurable goods
_

-10.8
-13.8
-6.3

-11.5
-14.4
-7.2

-3.1
-5.1
-.3

Personal Income (before taxes): Total
Labor income
_
Proprietors' income
_
Investment income 8
Transfer payments

.-

Disposable personal income (after taxes)
Corporate profits:«
Before taxes
After taxes

+2.0
+1.3
-.5
+.9
+4.5
+2.3

+8.2
+8.0

PRODUCTION

+5.7
+5.6
+7.4
+4.4
+6.4
+2.1

EMPLOYMENT »

+.3

+.5

+.3

+.6
+.8
+2.0
-2.9
-.9

+.5

+3.6
+5.5
+1.1

1 Changes based on seasonally adjusted data.
2
Preliminary. For labor, proprietors', and investment income, changes are based on data through
November.
3
Changes in the last three columns are from second quarter of 1953 to first quarter of 1954, first to third
quarter of 1954, and third to fourth quarter of 1954.
4
Based on data in constant prices.
6
Data for total employment are Bureau of the Census estimates, seasonally adjusted, and for employment in nonagricultural establishments are seasonally adjusted estimates of the Bureau of Labor Statistics.
Sources: Department of Commerce, Department of Labor, Board of Governors of the Federal Reserve
System,National Bureau of Economic Research, and Council of Economic Advisers.
T A B L E 3.—Recent changes in gross national product and its major components
[Billions of dollars, seasonally adjusted annual rates]
Change from—
Item

Gross national product: Total
Additions to inventories
Federal purchases of goods and services
Personal consumption expenditures—
Gross private domestic fixed investment
Net foreign investment
_ _ _ _ State and local purchases of goods and services—_
1

Second
Third
First
quarter 1953 quarter 1954 quarter 1954
to first
to fourth
to third
quarter 1954 quarter 1954 quarter 19541
-14.1

-0.3

-9.6
-7.2
-.3
-1.8

-.6
-7.1

+2.2
+2.5

Preliminary.
NOTE: Detail will not necessarily add to totals because of rounding.
Sources: Department of Commerce and Council of Economic Advisers.




+4.3
+1.4
+.9
+.8

+5.5
+3.3
-1.8
+2.7
+.6
+.2
+.5

on this sector of the economy. Although total spending by consumers was
virtually unchanged between the second quarter of 1953 and the first quarter of 1954, their outlays on durable goods were considerably reduced.
Investors in fixed capital likewise reduced their outlays on equipment,
though not on construction. In consequence, while the physical volume of
nondurable manufactures declined 6 percent between July 1953 and March
1954, the production of durables declined 14 percent and manufacturing
production as a whole, 10 percent. About 1J4 million men and women
lost their jobs in manufacturing during this period, nearly a million of them
in steel mills, ordnance establishments, shipbuilding yards, automotive
plants, locomotive works, and other durable goods factories. In the meantime, overtime work was curtailed and the average length of the workweek
declined. Wage rates continued to rise, but their influence was swamped
by reduced employment and working hours, and the annual rate of wage
income in manufacturing fell by 5 J4 billion dollars, or 11 percent. As is
usual at such a time, profits fell more sharply; dividend payments, on the
other hand, were maintained or even increased.
Economic contraction was not confined to manufacturing industries.
Sizable reductions of activity occurred also in the mineral and transportation
industries, particularly in coal mining and railroading, whose long-standing
difficulties in maintaining a satisfactory market position were accentuated.
Agriculture continued to be characterized by large surpluses, inadequate
exports, and lower prices received by farmers relative to those paid by
them. Other branches of industry—notably, construction, the electrical
utilities, and the great range of service industries—were successful in resisting the forces of contraction and even continued to grow. Nevertheless,
by early March 3 % million persons were unemployed, an increase of about
2 million from the preceding July. Another % million were temporarily
laid off, and a large number were working only part time. A cry of impending depression was raised.
II. GATHERING FORCES OF RECOVERY

The depression that so many feared or expected did not, however, develop.
Toward the end of 1953 signs of improvement began to appear in financial
and investment markets, and these indications multiplied after the turn of
the year. Stock prices started rising in September 1953. Contracts for
residential building resumed their advance at about the same time. Contracts for commercial and industrial building joined the advance at the
beginning of the new year, as did new business incorporations and orders
placed with manufacturers of durable goods. The liabilities of business
firms forced into failure reached a peak in February, then declined irregularly. Meanwhile, money rates, which had been falling since June 1953,
continued to move downward. Credit became more readily available at
progressively cheaper rates. The terms of mortgage financing, which had
already been extensively liberalized by the fall of 1953, continued to ease




15

during 1954, and a buoyant market developed for new mortgages. Also
the market for capital issues, especially for State and local government
bonds, became increasingly active and confident.
The early recovery was most dramatic in the financial and investment
spheres, but it was not confined to them. After the turn of the year, retail
sales began to increase, despite a substantial drop of outstanding consumer
credit. Exports rose above the preceding year's level, despite a drop of
imports. Inventories of manufacturers continued to decline, and sales
therefore continued to exceed production. But by the spring of 1954, the
decline in production had abated and the economy stabilized. The combined output of manufacturing and mining industries traced an even course
between March and August. The gross national product, which expresses
the dollar value of the Nation's total output of goods and services, was
virtually the same for the second and third quarters of the year as for the
first. Employment in nonagricultural establishments continued to fall; but
the rate of decline in employment diminished appreciably and the average
length of the workweek in manufacturing actually increased somewhat.
The flow of total personal income, as well as of labor income, reached a low
point in April and then began to rise gradually.
Meanwhile, investment preparations, especially of home builders, proceeded on an expanding scale. Businessmen also continued their efforts
to win better control over inventories. These efforts met with success.
Around the turn of the year, the ratio of inventories to sales had ceased
rising in most lines of industry. The ratio for manufacturing as a whole,
which was 1.95 in January 1954, fell to 1.88 in May and to 1.85 in September. For retailers the ratio moved from 1.66 in January to 1.62 in May
and 1.58 in September. These readjustments were largest in the case of
durable goods, which had felt the impact of contraction most keenly.
With inventories under better control, the gap between the orders received
by manufacturers and their current sales became progressively narrower,
while commodity prices at wholesale and retail changed very little on the
average. Wage rates continued to move upward, but most adjustments
were of moderate proportions and some decreases occurred. In these circumstances the retirement of marginal units of equipment, reductions of
overtime work, and other economies resulted in lower unit costs for many
businesses. By the late summer of 1954, a broad foundation had thus been
laid for industrial recovery.
The transition from contraction to recovery is an intricate economic
process, worked out over time, whose character is never disclosed by over-all
measures of economic activity. The virtual stability of the gross national
product over a good part of the past year concealed the fact that, after the
turn of the year, the number of declining industries in the area of manufacturing progressively diminished. It also concealed the vital transformation that was taking place in the Nation's stream of expenditure. Between
the first and third quarters of 1954, total Federal spending on goods and
services declined at an annual rate of 7 billion dollars. Meanwhile, other




16

major categories of expenditure—that is, consumer spending, private
domestic investment, foreign investment, and State and local expenditures—
increased, in the aggregate, at approximately this rate. Not only that, but
each of these four broad classes of expenditure expanded. Thus, while the
gross national product stood still, the civilian part of the economy kept
moving forward, enlarging its outlays, taking up the slack caused by the
continued decline of Federal spending. This adaptive power of the economy
during a difficult period of readjustment from war to peace supported and
strengthened a widespread feeling of confidence.
By the early autumn of 1954, the forces of recovery had gathered sufficient strength to lift total production and employment, despite a continued
drop of Federal spending. Total industrial production began rising gently
in September, then gained momentum as the virtual shutdown of automobile plants for model change-overs ended. Employment in nondurable
goods manufactures reached a trough in July, in durable goods manufactures in August, in nonagricultural establishments as a whole in the same
month. In early October unemployment fell below the 3 million mark for
the first time in 1954. By November economic improvement had again
pushed the average length of the workweek in manufacturing above 40
hours. The recovery was largest in the steel, automobile, household
appliance, and textile industries. It was felt also in coal mining, railroad
freight movements, and a host of other activities. In the meantime, the
construction industry, which had stubbornly defied the recession, continued
to advance. The flow of personal incomes, reflecting all these improvements, expanded at a more rapid rate. Weekly earnings in manufacturing
reached a new record. Bank loans increased again and interest rates
stopped declining. Commodity markets generally kept steady, but rising
demand for industrial raw materials pushed up their prices. Some tendency to lengthen inventory commitments developed, and the flow of orders
to manufacturers again exceeded their sales. When the year ended, the
traces of contraction had not yet been erased, but a general economic
recovery was in process.
III.

W H Y THE CONTRACTION PROVED MILD

The course of the recent contraction raises important questions for
all students of public affairs, namely: Why did the economic setback of
1953-54 prove so mild on an over-all basis? Why did our total national
output of goods and services decline no more than 4 percent? Why did not
the decline turn into the cumulative, spiraling depression that many feared
and some expected? Why, to put a still more exacting question, did the
gross national product decline from an annual rate of about 370 billion
dollars in the second quarter of 1953 to 356 billion in the third quarter of
1954, or by 14 billion dollars in all, when the primary contracting factors—
inventory spending and Federal spending—declined between them as much
as 24 billion dollars?




17

These are difficult questions and they will doubtless engage the attention
of scientific investigators for a long time to come. Nevertheless, some of
the factors that contributed to the result are clear even today. Consumers
not only maintained their spending at a consistently high level, but reduced
their rate of saving during 1954. Businessmen kept up their capital expenditures at a high rate, increased the flow of dividends to stockholders, and
intensified their selling efforts. Builders and real estate developers stepped
up their operations. Trade unions conducted their affairs with an eye
to basic conditions and with a sense of responsibility. Farmers and their
organizations recognized the danger of piling up ever larger surpluses.
Commercial banks and other financial institutions made ample supplies
of credit available on liberal terms. States and localities carried out large
and expanding programs of school, hospital, and road construction. And
the continuing recovery of Western Europe helped to augment our exports
and to bolster the prices of internationally traded raw materials.
Clearly, many people had a part in stemming the economic decline and
easing the readjustment from war to peace. The Federal Government
also contributed significantly to the process of recovery. It influenced the
economy in two principal ways, first, through the automatic workings of
the fiscal system, second, by deliberately pursuing monetary, tax, and expenditure policies that inspired widespread confidence on the part of
people and thus helped them to act in ways that were economically
constructive.
IV.

ROLE OF FEDERAL GOVERNMENT

It is well to recall that we have developed in our country a fiscal system
that tends to cushion or offset a decline in private income. When employment and income decline, tax receipts decrease and certain expenditures,
such as unemployment insurance payments, automatically increase.
These offsets cannot be counted on to prevent a depression, but they can
be of very material assistance, as recent experience indicates.
Between July 1953 and July 1954 total personal income derived from
production decreased at an annual rate of 4.4 billion dollars. In the meantime, unemployment insurance and other social security payments to the
public increased at a rate of 2.2 billion dollars, while tax payments by the
public—quite apart from the change in rates that became effective in January 1954—fell at the rate of another billion. These two factors alone served,
in very large part, to offset the over-all decline of personal income from production, and their effects were augmented by the operations of the farm
price-support system.
The experience of corporations was similar to that of individuals. While
corporate income decreased at an annual rate of 7.4 billion dollars between the second quarter of 1953 and the second quarter of 1954, the tax
liability of corporations was cut by 4.5 billion dollars merely as a result of
the decline in income and quite apart from any change in the tax law.




18

Once again, therefore, our taxing machinery automatically cushioned the
impact of a declining income on the sums available to corporations for
paying dividends or adding to their assets.
The Government was not content, however, to play merely a passive
role in the economy. On the contrary, definite and deliberate steps were
taken to promote a stable prosperity. One of the earliest acts of the new
Administration, after taking office in January 1953, was to remove price
and wage controls, in order to restore the functions of competitive markets.
With a boom psychology existing at the time and unemployment at a
vanishing point, this reform carried the danger of inducing fresh inflation.
A precautionary policy of restricting credit expansion was therefore adopted.
The aim was to prevent a reckless increase of investment and a deterioration in the quality of new credits, such as had often characterized the closing stages of economic booms in our history.
By May of 1953 it became clear that a policy of credit restraint had
already accomplished this purpose, and that its further continuance might
incite an anxious scramble for cash. The Federal Reserve authorities therefore proceeded promptly to ease credit conditions, first, by expanding the
reserves of commercial banks, second, by reducing the reserves that the
banks were required to hold against their deposits. In line with these
actions, the Treasury arranged its financing so as not to compete with
mortgages and other long-term issues. These steps were initiated before
the peak of business activity had been definitely passed.
Later, in September 1953, when it was not yet generally appreciated that
an economic decline had already begun and that the curtailment of defense
spending might carry it further, the Secretary of the Treasury announced
that the Administration, besides relinquishing the excess-profits tax, would
not seek to postpone the reduction of the personal income tax, scheduled
for January 1, 1954. The cuts served to reduce taxes during the next six
months by 1.1 billion dollars, and it has been estimated that they will reduce
taxes from July 1954 to June 1955 by 4.7 billion dollars. Although the tax
reductions were partly offset by increases in social security contributions
that also became effective in January 1954, the net effect was to increase
substantially the money available to people for spending or investing.
In January 1954 the Economic Report of the President developed a comprehensive program to stimulate competitive enterprise, to strengthen the
floor of security for the individual, and to curb tendencies toward either
depression or inflation. The program called for structural tax changes to
encourage economic growth, in particular, for more liberal treatment of
depreciation allowances, for treating research and development outlays
as a current expense, for reducing the double taxation of dividends, and
for lengthening the period over which business losses could be carried back
in reckoning the income tax. The program called also for tax adjustments
to ease personal hardships, an enlargement of the credit facilities for housing, the speeding of slum clearance, extension of the protective scope of
old-age and unemployment insurance, improvement of the highway system,




19

systematic planning of public works, a realistic agricultural policy, and an
extension of the President's authority to control the terms on which the
Federal Government would underwrite housing loans and mortgages. The
announcement in January of these legislative proposals, nearly all of which
were subsequently enacted by the Congress, helped to inspire confidence in
the economic policies of Government.
In later months, additional steps were taken by the Government to stimulate the economy. Federal Reserve banks lowered their rediscount rates.
The reserves that member banks are required to hold in support of their
deposits were reduced once again. Excise taxes were cut, carrying a revenue
loss of about 1 billion dollars in the fiscal year 1955, in addition to the loss
of 1.4 billion dollars as a result of enacting structural tax changes. Some
of our hard-pressed industries were aided—notably shipbuilding through
a new construction program, and zinc and lead mining as a result of a
revised stockpiling program. The Executive Branch attended to its housekeeping duties by expediting actions that involved the private economy,
as in the case of refunds of overpaid taxes, and by announcing promptly its
own commitments, as in the case of grants to the States for road building.
The Government also attempted to assist localities suffering from unemployment by channeling contracts to them as far as feasible, by boosting the
allowable rate of accelerated amortization on facilities needed for the
mobilization base, and by expanding the activities of the Area Development
Division of the Department of Commerce.
V. EFFECTS OF GOVERNMENTAL POLICIES

This, in broad outline, is the record of recent actions of the Federal Government to stimulate the economy. What gave them a special character
was their promptness and the heavy reliance on monetary policies and tax
reductions. The shift from credit restraint to credit ease before an economic
decline had begun, the announcement of sizable tax reductions before it
was generally appreciated that an economic decline was actually under
way, the submission to the Congress of a comprehensive program for encouraging the growth of the economy through private enterprise—these
early measures to build confidence were by far the most important. For
they strengthened confidence when it was most needed, and thereby rendered
unnecessary any later resort to drastic governmental programs in an atmosphere of emergency.
The basic policy of the Government in dealing with the contraction was
to stimulate business firms, consumers, and States and localities to increase
their expenditures, rather than to expand existing Federal enterprises or
initiate new spending programs. The success of this policy is evident in
the present recovery. It is evident also in some of the unusual, and at first
blush puzzling, characteristics of the recent contraction—the steady increase of disposable personal income, the almost uninterrupted rise of
consumer spending, the expansion of State and local improvements, the




20

maintenance of private investment in fixed capital close to peak levels, the
expansion of the money supply, and the steadiness of the price level.
Tax reductions, along with unemployment insurance benefits and other
social security payments, supported powerfully the income at the disposal
of individuals and families. This can be seen from a simple calculation for
the interval from July 1953 to July 1954. If we combine the effects, first,
of the automatic reduction of tax payments resulting from reduced incomes,
second, of the deliberate changes of tax rates that occurred in January
1954, third, of the expanded flow of unemployment insurance and related
payments, we get a sum of offsets to a declining production income that
comes to 5.2 billion dollars. Since the income derived from production
declined by an annual rate of only 4.4 billion dollars, the income available
to the public for spending or saving actually increased by nearly 1 billion
dollars. This remarkable result—namely, a rise in disposable personal income accompanying a 10 percent decline of industrial production—has no
parallel in our recorded economic history.
Tax reductions not only offset reductions from production income; they
also helped to make production income itself larger than it would otherwise
have been. As noted previously, corporate profits before taxes fell at an
annual rate of 7.4 billion dollars between the second quarter of 1953 and
the second quarter of 1954. Meanwhile, the reduction of taxes that automatically accompanied the decline of income, coupled with the removal
of the excess-profits tax, reduced the tax liability of corporations at an
annual rate of 5.5 billion dollars, and thus offset the greater part of the
reduction of corporate income. Had it not been for this reduction of
taxes, it is unlikely that corporations would have increased their dividend
payments at an annual rate of 300 million dollars during this period, thus
bolstering the flow of personal income. Nor is it likely that they would
have maintained their capital expenditures at so high a rate, thereby supporting the Nation's income base. And if this is true of corporations, it is
not less true of individuals and families. With their disposable income
increasing, people spent money rather freely and thus supported employment and the flow of income to themselves, their neighbors, and others.
The effects of monetary and debt management policies on the community's income stream are harder to trace than the effects of lower taxes,
but there can be no doubt of their significance or pervasiveness. These
policies were adjusted swiftly to changing conditions, and helped materially,
first to prevent inflation, later to check contraction. Before the recession
of economic activity in 1953 had commenced, interest rates were already
declining. Later in the year, the easing of credit terms became general,
and extended from prime issues to those involving larger risks. Financial
institutions, amply supplied with reserves or cash, sought opportunities to
put their resources to use. With the demand for business and consumer
loans relatively low, they eagerly took up mortgages, municipal bonds, corporate issues, and Treasury obligations. As a result, the loans and investments of commercial banks increased by about 10 billion dollars during 1954




21

and the money supply increased further—especially in the second half of
the year. Had it not been for the increased availability of credit and the
easing of terms, the fast pace of residential, commercial, and State and local
construction, which did so much to stabilize the economy during the past
year, would not have been attained. Nor would consumers have been able
so easily to arrange financing for a part of their expenditure. Nor would
the liquidation of inventories have proceeded with so little disturbance to
markets or general economic activity.
It is well to recognize, however, that the reasons for the success of recent
policies are not to be found in them alone. Tax reductions, however attractive they may seem when the economy is declining, will not necessarily
lead to an increase of spending or investing. Easier credit conditions, larger
bank reserves, even a larger money supply will not necessarily put new money
to work in industry. Management of the public debt so as to avoid competition with mortgages and other capital issues will not necessarily increase
private capital formation. If such policies are to be of material help in stemming a contraction, there must be a pervasive feeling of confidence on the
part of people. The effectiveness of a particular policy, whatever be its
sphere or expression, is conditioned by the mood of the time, and this is
bound to reflect people's attitudes toward governmental policies at large.
It is not merely the intrinsic merit of the individual policies that were pursued, but also the fact that each was part of a cohesive program for strengthening the confidence of people in their own and their country's economic
future, that accounts for our recent success in curbing economic contraction.
VI.

LESSONS FROM EXPERIENCE AND GUIDES TO THE FUTURE

In the course of our latest encounter with the business cycle we have
learned or relearned several lessons. First, that wise and early action
by Government can stave off serious difficulties later. Second, that contraction may be stopped in its tracks even when governmental expenditures
and budget deficits are declining, provided effective means are taken for
building confidence. Third, that monetary policy can be a powerful instrument of economic recovery, so long as the confidence of consumers and
businessmen in the future remains high. Fourth, that automatic stabilizers,
such as unemployment insurance and a tax system that is elastic with respect
to the national income, can be of material aid in moderating cyclical fluctuations. Fifth, that a minor contraction in this country need not produce a
severe depression abroad. Sixth, that an expanding world economy can
facilitate our own readjustments. These teachings of experience should
serve us well in the years ahead, though we must always be alert to the special
needs of every new situation.
As our minds turn from the past to the future, the basic fact to keep before
us is that, while the groundwork for the recent recovery was laid by the
Government, the recovery itself was brought about by the American people.
A mood of confidence about the economic future has been gradually de-




22

veloping in recent years, and the strength exhibited by our economy last
year has reinforced this trend.
A large and increasing number of business managements have become
accustomed to thinking in ambitious, long-range terms. Expecting our
economy to grow and prosper, they do not permit minor variations in sales
to divert them from the objective of strengthening, or at least maintaining,
their competitive position five or ten years later. Hence they boldly allot
large sums to research, plan capital expenditures well beyond immediate
needs, launch extensive investment projects, and even judge one another
by these yardsticks no less than by profit-and-loss statements.
The economic horizons of consumers are also widening. One of the
marvels of our generation has been the growth of consumer capital—modern homes, automobiles, radios, television sets, washing machines, air conditioning units, electric dryers, food freezers, and so on in an ever longer list.
Perhaps at no time in the past has the desire for material improvement
played so large a role in the economy as it does today. Consumers continue
to visit bargain basements but their preferences run strongly toward the
latest contrivances, newest conveniences, and premium grades. And if
people are no longer timid about borrowing to expand their current spending, they are also willing to work hard to acquire the incomes needed to
live as they feel they should.
T A B L E 4.—Output of some rapidly growing consumer commodities and services
Commodity or service

Unit

1948

1953

(2)
2
(2)
()
58
(2)
431
123
264
320
900
30
5
(2)
(2)
676

73
243
675
92
690
1,163
379
420
908
1, 650
550
75
980
175
2,540

1,045
1,630
948
737
1,090
3,500
925
852
1,292
3,500
2,134
301
7,215
325
3,002

1,230
1,780
1,050
890
975
3,800
1,110
800
1,320
3,950
2,350
320
7,400
360
3,075

100
100
1

302
326
6

369
912
16

367
1,170
17

1940

19541

COMMODITY

Air conditioning units, room
Antibiotics.
Blankets, electric
Dryers, clothes
Freezers, farm and home
Frozen foods
Furnaces, warm air, oil and gas
Oil burners,?residential
Oleomargarine
Shavers, electric
Synthetic detergents
Synthetic fibers, other than rayon.
Television sets
Waste food disposals
Water heaters, electric and gas

Thousands
Thousand pounds..
Thousands
Thousands
Thousands
Million pounds
Thousands..
Thousands...
Million pounds.
Thousands
Million pounds.
Million pounds.
Thousands
Thousands
Thousands

SERVICE

Cleaning and dyeing..
_
Repairs, household durables
Revenue passenger miles flown

Index, 1940=100
Index, 1940=100
Billions

1 Preliminary.
2 Production was relatively small.
Source: Department of Commerce, based on data from various private and Government sources.

With the business cycle apparently under reasonable control, with the size
of population growing rapidly, with science and technology adding new wonders each day, with incomes distributed widely, with mass markets expanding
to match mass production, and with governmental policy steering a middle
course between the political extremes, both material and psychological




factors are peculiarly favorable to economic progress. Hence, the business
recovery now under way is powerfully supported by underlying forces of
economic growth. While only of very recent date, the recovery is widespread and has already made up half of the decline that had occurred in
industrial production. The rate of inventory liquidation has sharply abated,
and we are soon likely to experience some rebuilding of inventories. The
projected decline of Federal spending is less than in the past two years.
State and local expenditure will probably continue to expand and more
than offset any further decline that may occur in Federal expenditure.
The recent increase of housing starts and the rush of applications to Federal
agencies for mortgage insurance or guarantees promise that home building
will continue to mount for some time. The recent high level of commercial
building contracts is practically sure to mean a high level of expenditure for
this type of construction over coming months. The prospects for plant and
equipment expenditure are more uncertain; however, rising orders for machinery, to say nothing of the new plans and revisions of old plans that are
likely to accompany continued recovery, give a basis for expecting that this
broad category of expenditure will soon join, though perhaps only modestly
at the start, the general economic advance. In view of the resurgence of the
economy of Western Europe and the reduction of restrictions against dollar
trade, it seems likely that our exports will continue to increase. The
spirited behavior of retail sales in recent months has borne out earlier surveys of consumer attitudes. Further expansion of consumer spending may
be expected as economic recovery cumulates.
Beyond these indications of immediate or short-run prospects is the fact
that new firms are being established at an increasing rate, and that the
offices of architects are reported to be bursting with plans for new homes,
schools, and all sorts of commercial and industrial projects. Still further in
the future, but already a factor in business thinking, is a new national highway system, which will create great economic opportunity in many directions, and of which something will be said later in this Report.
In the course of the current year, the economic situation may therefore
be expected to continue to improve. The gross national product increased
from an annual rate of about 355 billion dollars in the third quarter of 1954
to about 360 billion dollars in the fourth quarter. With economic activity
continuing to expand, it is reasonable to expect that the Nation's output
within the coming year will approximate the goals of "maximum employment, production, and purchasing power" envisaged by the Employment
Act. At this juncture of our economic life, when confidence is running
especially high, it is well, however, to keep in mind the sobering fact
that there is no way of lifting more than a corner of the veil that separates
the present from the future. How long the current phase of expansion will
continue before new international trouble or a cyclical reversal of business
occurs, or how far the expansion will carry, it is impossible to say with great
assurance. The uncertainty of economic predictions requires that the
Federal Government be prepared to adjust its policies promptly if economic




24

events should not bear out current expectations. Over coming weeks or
months we should, however, be careful not to confuse seasonal fluctuations
in employment or special fluctuations of individual industries or markets
with over-all economic trends. It will prove helpful to keep in mind that
a business recovery never retraces the precise path of the preceding contraction, and that this divergence is apt to be sharpest in postwar movements. The prosperity that some industries and localities attained during
the Korean conflict, and which they have now lost, will not be regained
quickly in all instances. Here and there the process of readjusting to
reduced markets may be prolonged, although it will be greatly eased as
general economic expansion continues.
We must also remember that, just as economic expansion resolves old
problems, so it often brings new ones in its train. History tells us that
industrial disputes have usually been more frequent in periods of expansion
than in periods of contraction, and that industrial disputes sometimes have
serious economic repercussions. History also warns us that activities which
involve the discounting of a long future, as in the case of home purchases
or the pricing of corporate shares, may be carried to excess in the course
of a business expansion. Fortunately, when speculative trends develop,
they usually become self-corrective before they become excessive. It is
highly desirable that corrective movements, testing the soundness of various
parts of the economy, be scattered over a period of time rather than culminate at the same time. As the recent increase of stock margin requirements by the Federal Reserve Board has demonstrated, the Government
is mindful of its great responsibility to help assure balanced economic
growth. It is essential to keep a close watch on financial developments.
Continued economic recovery must not be jeopardized by overemphasis of
speculative activity.




CHART

5

GROSS NATIONAL PRODUCT
MAJOR CATEGORIES OF EXPENDITURE
BILLIONS OF DOLLARS

BILLIONS OF DOLLARS

400

400

SEASONALLY ADJUSTED ANNUAL RATES

GROSS NATIONAL PRODUCT

300

300

200

200

100

100
GROSS PRIVATE INVESTMENT

I

FEDERAL-^

I

I 1

1950

1949

1948

1952

1951

I

I

1954

1953

- ^ PURCHASES OF GOODS AN0 SERVICES.
SOURCES: DEPARTMENT OF COMMERCE AND COUNCIL OF ECONOMIC ADVISERS.

CHART 6

INVESTMENT EXPENDITURES
BILLIONS OF DOLLARS

BILLIONS OF DOLLARS

60

60

50

-

50

^
1
40

/
-

20

-

r

10

30

-

30

40

-

PRIVATE DOMESTIC
FIXED INVESTMENT

20

CHANGE IN BUS INESS
INVENTORI ES
^

10

\

V

^
0

/

£»
NET FOREIC NINVESTMENT
-10

II

1

1948

1

I

1

1949

1

1 1

1950

1

1 1

1951

1 1 1
1952

^SEASONALLY ADJUSTED ANNUAL RATES.
SOURCES: DEPARTMENT OF COMMERCE AND COUNCIL OF ECONOMIC ADVISERS.




26

1

\

1953

\

1 I 1
1954

-10

CHART 7

GOVERNMENT PURCHASES OF GOODS AND SERVICES
PERCENT OF GROSS NATIONAL PRODUCT

PERCENT OF GNP*

PERCENT OF GNP*

25

25

TOTAL GOVERNMENT.
20

20

15

15

10

1
0

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 ro

20

20

TOTAL FEDERAL
15

15

10

10

OTHER FEDERAL.

I 1M i l l

*1 1 1

M M

I II

I I I
10

I 0
STATE AND LOCAL

1948

1949

1950

1951

1952

1953

*BASED ON SEASONALLY ADJUSTED DATA.
SOURCES: DEPARTMENT OF COMMERCE AND COUNCIL OF ECONOMIC ADVISERS.




1954

CHART 8

GROSS NATIONAL PRODUCT
FINAL PURCHASES AND INVENTORY CHANGE
BILLIONS OF D O L L A R S *

BILLIONS OF DOLLARS*

400

400

GROSS NATIONAL PRODUCT

\..<^m

INVENTORY CHANGE

300

300

FINAL PURCHASES

200

0 I

200

i

i

i

i

1946

)

i

1947

i

l

1948

1949 1950

i

i

i

i

l i t

i

1951

i i i

1952

1953 1954

i

i

i

I o

* SEASONALLY ADJUSTED ANNUAL RATES.
SOURCES: DEPARTMENT OF COMMERCE AND COUNCIL OF ECONOMIC ADVISERS.

CHART 9

EMPLOYMENT IN NONAGRICULTURAL
ESTABLISHMENTS
MILLIONS OF PERSONS

MILLIONS OF PERSONS

24

24

SEASONALLY ADJUSTED DATA

22

22
OTHER PRIVATE

18

MANUFACTURING, MINING,
~" AND TRANSPORTATION I

STATE AND LOCAL GOVERNMENT-

FEDERAL GOVERNMENT
1111111111

1948

1949

MI.II.

11111111111 1111

1950

1951

1952

1111 i li 11 11

1953

1954

SOURCES: DEPARTMENT OF LABOR AND BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM.




28

CHART 10

EMPLOYMENT AND UNEMPLOYMENT
MILLIONS OF PERSONS7

MILLIONS OF PERSONS

75

75

TOTAL LABOR
FORCE

70
CIVILIAN
LABOR FORCE

\
>

65

55

NONAGRICULTURAL
EMPLOYMENT

50

PERCENT
10

PERCENT

10

UNEMPLOYMENT
AS PERCENT OF CIVILIAN LABOR FORCE

i t I.I.I.] i t l tt, t U t ) l UU.i
1948
*

1949

1950

14 YEARS OF AGE AND OVER.

SOURCE: DEPARTMENT OF COMMERCE.




1951

1952

1953

I

1954

CHART 11

HOURS AND EMPLOYMENT
IN MANUFACTURING
HOURS PER WEEK*
42

HOURS PER W E E K *

42

40

40
AVERAGE WEEKLY HOURS

38 -

^_I 38
MILLIONS OF PERSONS*
—I 15

MILLIONS OF PERSONS*

1 r
5
EMPLOYMENT OF
PRODUCTION WORKERS

14

14

\

V

13

13

\

12

y

11

II
INDEX, 1948-54 = 100*

INDEX, 1948-54 = 1 0 0 *

no

-

{X

100

\

k

\

V

ft

90

1949

1950

1951

•SEASONALLY ADJUSTED DATA,
SOURCES: DEPARTMENT OF LABOR AND
NATIONAL BUREAU OF ECONOMIC RESEARCH.




V
-

j

1 1 ! 1 1 1 1 1 1 1 1
111M1111\J 1 1 1 1 1 1 ! 1 1 1 1
11111111111 11111111111

1948

no

/EEKLY MAN-HOURS

%
90

12

3°

1952

1 n 1 1 1 11 1 1 1 1 )
1
111

1953

11111

1954

CHART 12

INDUSTRIAL PRODUCTION
I N D E X ,

1 9 4 7 - 4 9 =

INDEX, 1947-49 * 100

1 0 0

160

160
SEASONALLY ADJUSTED

140

140
TOTAL INDUSTRIAL
PRODUCTION

\

120

120

100

100
1 1 1 1 » 1 1 1 1 1 1 1 1 1 1

• I . M M

lllllll

I I I I I I I

I I I I I III I

I I I I 1 I I I I I

140

140
TOTAL MANUFACTURING

120

120

100

100

80
1 1 1 ni
11

111111 1 1 1 1 1 1 1 1 1 1 1 1 1 i 1111
11111
11111
1 1 1 1 1 1 1i 1 1 1

11111
11111

160

DURABLE

140

MANUFACTURES

140

120

120

NONDURABLE MANUFACTURES
100

100

8 0 I M 111111111

1948

i

lll

1949 • 1950

iililnin

1951

MMlh

1952

1 1 1 1 1 1 1 i n i

1953

SOURCE: BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM.




it MI mi 11 80

1954

CHART 13

CONSTRUCTION EXPENDITURES
BILLIONS OF DOLLARS*

BILLIONS OF DOLLARS'"'

3.5

3.5

TOTAL NEW CONSTRUCTION

3.0

3.0

2.5

2.0

i PRIVATE
1,5

1.5

Illllllllll
1.5

1.5
^
^....A

PRIVATE RESIDENT IAL
(NONFARM)

1.0

1.0

^*o-

("HER PRIV/1TE

.5

0

-

I l l l l l l l I I I MM,1,1,1, M l l l l i i l i i

1948

1949

1950

IIIMIMIII

Mllllli.ll

Illllllllll

1951

1952

1953

•SEASONALLY ADJUSTED.
SOURCES: DEPARTMENT OF COMMERCE AND DEPARTMENT OF LABOR.




1954

.5

CHART 14

CONSUMER INCOME AND EXPENDITURES
BILLIONS OF DOLLARS*
260

BILLIONS OF DOLLARS*

DISPOSABLE PERSONAL INCOME*
(LEFT SCALE)
240

PERSONAL CONSUMPTION
EXPENDITURES
(LEFT SCALE)

.---4

200

220
180

200
160

180

« TOTAL RETAIL SALES
(RIGHT SCALE)

140

160
120

120

rJ

100

100
SALES OF NONDURABLE GOODS STORES

'**'•-•.:./•»«*-"•""

80

80

N

60

J

A

60

A

•SALES OF DURABLE GOODS STORES

40

111 I 1 1 II

1949
*

1950

1951

1952

1953

SEASONALLY ADJUSTED ANNUAL RATES.

J / N E W SERIES LINKED TO OLD SERIES.
SOURCES-. DEPARTMENT OF COMMERCE, BOARD OF GOVERNORS OF THE FEDERAL'
RESERVE SYSTEM, AND COUNCIL OF ECONOMIC ADVISERS.




33

1954

CHART 15

CONSUMER EXPENDITURES

BILLIONS OF OOLLARS*

BILLONS OF DOLLARS*

1 20

120
NONDURABLE GOODS

f

1 10

A
>
-

100

7

- 1 1 0

- 100

r

<
r

80

^

<

>

80

:s

S

SERVICE

- 70

70

60

<

30

>
-

60

>
DURABL £ GOODS

•

*••

30

••••• **

\

>•--•••

20
0

20
I I I !

1949

I

I

I

1950

1

I

1

i

I

1952

1951

i

i

i

1953

•SEASONALLY ADJUSTED ANNUAL RATES,
SOURCES: DEPARTMENT OF COMMERCE AND COUNCIL OF ECONOMIC ADVISERS.




34

i

i

i

1954

i

1 ft

CHART

16

MANUFACTURERS' INVENTORIES AND SALES
BILLIONS OF DOLLARS

BILLIONS OF DOLLARS
SEASONALLY ADJUSTED
50

50
TOTAL INVENTORIES i

40

30

^
0 II IM

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 I I I I I I I I I I 1 I I I I I! 0
RATIO

RATIO
INVENTORY /

SALES

RATIO

2.40

2.40
DURABLE GOODS

2.20

2.20

2.00

2.00

1.80

I 80

1.60

1.60

1.40

1.40

1.20

1.20

I i i i i i I I I I I

1950

n

i i i 1 i
1951

i i i i I i
1952

SOURCE: DEPARTMENT OF COMMERCE.




35

1953

,,,71

1954

CHART 17

MANUFACTURERS' SALES AND NEW ORDERS
BILLIONS OF D O L L A R S *

BILLIONS OF D O L L A R S *

ALL MANUFACTURING INDUSTRIES

30

\ \ A ^ ^

NEW

30

ORDERS

ALES

25

20

25

- ir

/
20

DURABL E GOODS INDLISTRIES
15

15
SALES

ORDERS

10

10

— 5

5

0 T i i i i1 i i i i i i i i i i 1 i i i t i i i i i i l i n i i

. .ii. 1 ..i. i

. . . . . i... iT 0

EXCESS OF ORDERS OVER SALES
+5

A

| \j^*

+5

ALL MANUFACTURING

V

J
0

0

V

-5

-5

+5

— +5

\

JRABLE GOODS

1

-5

M
M i l l | | | 1 1 1 1 1 1 1 1 1 1 I M1 M1 I 1
1

1950

1951

1952

* SEASONALLY ADJUSTED.
SOURCE: DEPARTMENT OF COMMERCE.




36

'

M .

\

^

i i i . i 1 i i i i i

11111111111

1953

1954

-5

CHART 18

WHOLESALE INVENTORIES AND SALES
BILLIONS OF DOLLARS

BILLIONS OF DOLLARS

15

15

SEASONALLY ADJUSTED

TOTAL INVENTORIES

10

10

TOTAL SALES

H 5

5h-

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 1 I I I I I I I I I I I I I i I I I I I I I I I I
RATIO

RATIO
2.20

2.20
INVENTORY/SALES

RATIO

A

2.00

/'XA---.

2.00

1.80

1.80

1.60

1.60

1.40

1.40

1.20

1.20

1.00

1.00

.80

I I I I I I I I I I I I I I I I I I I I
1950

1951

I I I I I 1 I I I I I I I I I I I I I I I I
1952

SOURCE : DEPARTMENT OF COMMERCE.




37

1953

I 1 I I I I I I i
1954

CHART 19

RETAIL INVENTORIES AND SALES
BILLIONS OF DOLLARS

BILLIONS OF DOLLARS

25

25
SEASONALLY ADJUSTED

r\
20

20
TOTAL INVENTORIES

TOTAL SALES

io I-

H 10

P"*^
I
I
I
!
*w*l
0 1 IIIMIIIIII1 IIIIIIIIIIIIIIIIIIIIIII1 IIIII1 MIIIIIIIII1 IIIIII o

2.40

INVENTORY/SALES RATIO

2.40

2.20

2.20

2.00

2.00

1.80

1.80

1.60

1.60

1.40

1.40

1.20

'"V

i I i i i i i 1 i

1950
*

1.20

NONDURABLE
GOODS

I I I I I I I I I I I

1951

i ii iiIi iiii i iiii1 iiii i
1952

IIII1 IIIIII

1953

DATA BEGINNING JANUARY 1951 NOT COMPARABLE WITH DATA FOR EARLIER PERIODS.

SOURCE: DEPARTMENT OF COMMERCE.




1954

CHART 2 0

AVERAGE HOURS AND EARNINGS
IN MANUFACTURING
HOURS PER WEEK

42

HOURS PER WEEK

-

WEEKLY HOURS

V

40

W

42

40

V

38

38

o" M i n i

IMMIMIII

n

IMMIMIII

DOLLARS PER HOUR

DOLLARS PER WEEK
60.00

2.00

WEEKLY

EARNINGS

1.80

72.00

1.60

64.00
" ^ H O

URLY EAR NINGS
(LEFT SCA LE)

-

r

1.40

-

56.00

48.00

1.20

Mini.MM

0 1 1 1 1 1 11
1111 1

1948

1949

1950

Minimi
1951

IMMIMIII

MMlllllll

1952

1953

NOTE. DATA RELATE ONLY TO PRODUCTION AND RELATED WORKERS.
SOURCE: DEPARTMENT OF LABOR.




39

t m i l l M i l |O

1954

CHART 21

CORPORATE PROFITS BEFORE A N D AFTER TAXES
BILLIONS OF DOLLARS*

BILLIONS OF DOLLARS*

60

60
PROFITS
BEFORE TAXES

50

40

30

10

10

1948

1952

1949

1953

1954

* SEASONALLY ADJUSTED ANNUAL RATES.
SOURCES: DEPARTMENT OF COMMERCE AND COUNCIL OF ECONOMIC ADVISERS.

CHART 22

CORPORATE PROFITS BEFORE TAXES
MANUFACTURING A N D ALL OTHER
BILLIONS OF DOLLARS7

BILLIONS OF DOLLARS7*

60

60

50

40

30

20

20

10

10

1948
*

1949

1950

1951

1952

SEASONALLY ADJUSTED ANNUAL RATES.

SOURCES: DEPARTMENT OF COMMERCE AND COUNCIL OF ECONOMIC ADVISERS.




40

1953

1954

CHART 23

LIABILITIES OF BUSINESS FAILURES
MILLIONS OF DOLLARS

MILLIONS OF DOLLARS

QUARTERLY TOTALS, SEASONALLY ADJUSTED

140 -

- 140
120

120 -

100 -

100
/

80

60

40

20

/I

-J

\

>
v

A

- 80

/

>-*

A

- 60

T

y
-

"

- 40
- 20

0

1

1948

1 '

1950

1949

i

t

1951

i

i

i

i

1952

i

i

1953

i

t

i

i

0

1954

SOURCES: DUN aBRADSTREET AND
NATIONAL BUREAU OF ECONOMIC RESEARCH.

CHART 24

WHOLESALE AND CONSUMER PRICES
INDEX, 1947-49 = 100
130

INDEX, 1947-49=100
130

120

120

CONSUMER PRICES.

110

100

90

100

i i i i i i i i i i i

1950

, , , , ,

M . M I M M ,

|, , , , ,

1951

1952

SOURCE: DEPARTMENTOF LABOR.




41

1953

1954

90

CHART 25

WHOLESALE PRICES
FARM AND INDUSTRIAL
INDEX

, 1947-49 = 100

INDEX, 1 9 4 7 - 4 9 =

100
120

120

OTHER THAN FARM PRODUCTS
> * AND PROCESSED FOODS (INDUSTRIAL)

—~~*'

AL _ COMMODITIES

no

100

110

-4"

^ ^ P R O C E :SSED

FOODS
100

•

FARM P R O D U C T S ^ ' ^

90

r

80

! I II 1 ! 1 I 1 1 1
1111111 M 11

90

1950

i i i I I 1 i i i i i

1951

i i i i I 1 I i i i I

1952

1953

I I i I i 1 i i I i i

80

1954

SOURCE: DEPARTMENT OF LABOR.

CHART 26

WHOLESALE PRICES
INDUSTRIAL MATERIALS AND GOODS
INDEX, 1947-49 = 100
160

INDEX, 1947-49 = 100
160

i

1

140

i
i
1

120

1
1
1

\
•>*^"

— 140

RAW INDUSTRIAL
MATERIALS

1
i

z
FINISHED
GOODS

100

\

120

V»SEMI-P ROCESSED
MATERIALS

N

100

1

s~

1
80

1 1 1 1 1 1 111 II1 1 1 1 U J iJ i |i
II
i

1950

1951

i 1 i i i i i

1952

1 1 1 1 1 ^1 11 1 1
^ 1
1 l\ff
1954
1953

SOURCE: BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM,
BASED ON DATA FROM DEPARTMENT OF LABOR.




1 1 80 1
1

CHART 27

MONEY SUPPLY
BILLIONS OF DOLLARS

BILLIONS OF DOLLARS
SEASONALLY ADJUSTED

j
200

200

180

180
CURRENCY+DEMAND DEPOSrrs
+TIME DEPOSITS

:

s^
160

I6O<

rT"

120
^

-

100

S

^

- ^

" ^
120

OE MAND DEPOSI TS+CURRENC Y

100

^r
—

• — ' " ^ ^ DE MAND DEPOSI' PS ADJUSTED

80

80

^

*-

60

<
30

i

Cl

—

20

o

60

<
TIME DEPOS ITS

i, I, *—

4

*

r(\ f t IT i n 11 \iiift\\

1949

1950

ttt

<t n

< f t t - t 11

1951

>30

1

*

i M •*»

—*T 1

JRRENCY OUTJSIDE BANKS
1
t 1 M *f \ 11 1
1 1 1 + -t 4 1 111 r

1952

1953

At

(t

1954

END OF MONTH
SOURCES: BOARD OF GOVERNORS OFTHE FEDERAL RESERVE SYSTEM, NATIONAL BUREAU OF
ECONOMIC RESEARCH, AND COUNCIL OF ECONOMIC ADVISERS.




43

20

CHART 28

BANK LOANS AND INVESTMENTS
BILLIONS OF DOLLARS*

BILLIONS OF DOLLARS *

160

160

ALL COMMERCIAL BANKS
^

140

T

^

-

>

^

^

_

/

*

^

-

1
\

80"
_

So

INVESTMENT IIS
I
LI.S. GOVERNMENT SECPURITIES

BANK LOANS

-

r
INVESTMENT IN
^
OTHER SECURITIES

o

•

i

i

1 i

i

i

.

.

J

'20

i

1 1 1 1 1 X 1 1 1' 1

i i

i

i

1 i

i

i

O

1954

1953

1952

60

-

60

20

140

* END OF MONTH.
SOURCES: BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM AND
COUNCIL OF ECONOMIC ADVISERS.

CHART 29

CONSUMER INSTALMENT CREDIT
BILLIONS OF DOLLARS

BILLIONS OF DOLLARS

SEASONALLY ADJUSTED

TOTAL E X T E N D E D ^ . A

?

r-A

...•••••••* :,..

AUTOMOBILE CREDIT
REPAID

0 111111 h 1111

1948

I I I 11 I I 11

1949

ill

1950

ill

1951

ill

1952

SOURCES: BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
AND COUNCIL OF ECONOMIC ADVISERS.




44

11111 0
11111

1953

1954

CHART 30

MONEY RATES AND BOND YIELDS
PERCENT PER ANNUM

PERCENT PER ANNUM

CORPORATE Ada BONDS

U. S. GOVERNMENT BONDS
| (NEW SERIES)
T

~\*s
I

I

I

I

I

I

I

I

I

I

I
J

F

M

A

M

J

1953

J

A

S

O

N

O

1954

SOURCE: BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM.

CHART 31

STOCK AND BOND PRICES
INDEX , 1939

INDEX, 1939 * 100

« 100
300

300

250

250
COMMON STOCK

PRICES
-

150

-

c )RPORATE

200

-

200

150

BOND PRICE* ; .
,

^

•

•

M.

i

^

>•

m

m

^

50

M

i

l

l

1952
SOURCES:

i r\f\

100

100

t

i

t

i

I

I

I

I

i

f

i

i

1953

STANDARD AND POOR'S CORPORATION AND
SECURITIES AND EXCHANGE COMMISSION.




45

i

i

i

I

I

1

I

I

1

I

1954

i

i

i

|

50

CHART 32

INDICATORS OF INVESTMENT PREPARATIONS
I dD EX, 1953=100*
150
T O T A L CONSTRUCTION CONTRACTS
(VALUE)

INDEX, 1953 = 100*

100

5 0 «—
RESIDENTIAL CONSTRUCTION

CONTRACTS

-(FLOOR SPACE)

I 50

100

150

~~
|
C O M M E R C I A L CONSTRUCTION
CONTRACTS
(FLOOR SPACE)

100

50 L150

100

- J 50
I 50

NEW ORDERS-DURABLE GOODS

100

50

L—i

150

NEW ORDERS-NONELECTRICAL MACHINERY

100

I i i I i i i i

1952

t i i t 1 i i t

I l I I l I l l I

1953

^SEASONALLY ADJUSTED.
SOURCES: F.W.DODGE, DUN ft BRADSTREET, DEPARTMENT OFCOMMERCE,




MC GRAW-HILL, AND NATIONAL BUREAU OF ECONOMIC RESEARCH.

46

1954

50

CHART 33

HOUSING STARTS AND FINANCING APPLICATIONS
MILLIONS OF UNITS
J.6

MILLIONS OF UNITS

1.6

SEASONALLY ADJUSTED ANNUAL RATES

1.4

1.4

1.2

1.0

1.0

.8

.8
r>T i i

i i

.8

i I i

i

i

i i

I

i

i

i i

i

I i

i

i

i i 1 i t i

i i

I

i i

i

i t T

.8

ANNUAL RATES, NOT SEASONALLY ADJUSTED

.6

.4

.2

APPLICATIONS FOR
FHA COMMITMENTS- 7
1 I

1952

i

1 i

1 I

1 |

1953

I

I i

i i

1 I i

1954

UNITS IN MORTGAGE APPLICATIONS FOR NEW HOME CONSTRUCTION.
SOURCES: DEPARTMENT OF LABOR, FEDERAL HOUSING ADMINISTRATION (FHA), AND
VETERANS ADMINISTRATION (VA).




47

I 1

Chapter 3

Program for Sustained Economic Progress
A S THE PRECEDING CHAPTER of this Report has made clear,
*L\. the mild recession of last year was arrested and a new phase of economic expansion got under way before the year closed. The vigor of the
recent recovery, taken in conjunction with the investment and expenditure
plans already set in motion, suggests that economic expansion will continue
during coming months. It holds out the promise that we shall achieve a
high and satisfactory level of employment and production within the
current year. Of course, this outcome of current tendencies is not—and
cannot be—assured, and the Government must remain ready to deal with
any setback that might develop. In view, however, of the likelihood that
our economy is now undergoing a cumulative expansion of some strength,
the wise course for Government would be to concentrate this year on basic
policies for fostering long-term economic growth. We should direct our
program for 1955 principally to this purpose, rather than seek to impart
an immediate upward thrust to general economic activity.
The release of the Nation's powers of growth can be aided by legislation
that will encourage competitive enterprise, strengthen our economic ties with
other countries, reinforce personal security, and provide needed public improvements. Such a program for long-term growth is presented in this
chapter. As we proceed we must, however, keep in mind the historical
fact that growth has generally been attained by spurts of activity, followed
by pauses or setbacks. Actions to build confidence always carry the risk
of generating overconfidence and subsequent reaction. Our economic policies must therefore be designed not merely to foster growth, but to foster a
rate of growth that can be sustained. The program of actions recommended
in this Report will advance us toward this goal.
I. PROMOTING THE SPIRIT OF ENTERPRISE

Fiscal Policies for Economic Expansion
In accordance with the responsibilities of the Federal Government under
the Employment Act "to use all practicable means . . . to promote maximum employment, production, and purchasing power," Federal expenditure
and tax policies should be shaped to serve the needs of an expanding
economy.
Budget policies can help to promote the objective of maximum production
by wisely allocating resources, first, between private and public uses, second,
among various governmental programs. A careful budgeting of public




funds is an indispensable safeguard against undue extravagance or excessive
parsimony on the part of the Government. The budget should impose a
strict discipline upon all public expenditures. At the same time, it should
provide adequately for the Nation's defense and other urgent needs. It
must also be used to promote stable economic growth. Properly coordinated
with other measures, a reduction of expenditure or increase in taxes can
restrain inflationary tendencies, just as a reduction of taxes or increase in
expenditure can at times be an effective check on recessionary forces. There
will, therefore, be occasions when the Government's accounts are out of
balance in one direction or the other.
During the past two years, Federal expenditures were sharply reduced and,
although taxes were also cut, substantial progress was made toward bringing
the budget close to balance on a cash basis. The cuts in expenditures that
followed the ending of the Korean conflict released resources for use by the
private sector of the economy. Tax reductions spurred their reabsorption
by strengthening private demand for goods and services during this period
of readjustment. Last year's tax reductions amounted to a total of 7.4
billion dollars on a full-year basis; this was offset by a 1.3 billion dollar
increase in social security contributions, making a net saving of 6.1 billion
dollars. This lowering of taxes and the recently enacted reforms in the
tax structure, by reducing barriers to economic growth, are strengthening
the expansionary forces of the economy.
Since our economy is currently operating at rather high levels and a recovery from the mild decline of last year is well under way, we should strive
this year to bring Federal cash receipts and cash expenditures into balance.
With huge expenditures for our national security continuing, the financial
requirements of the Government will not permit reductions this year from
present tax rates. Prudence requires that the lowering of the corporate
income tax and of excises, scheduled for April 1, 1955, be postponed.
It should, nevertheless, be recognized that present taxes are still a heavy
burden. Lower taxes would tend to encourage work, promote more efficient business practices, and create more jobs through new investments.
Fortunately, with our economy continuing to expand, we can look forward
to larger Federal revenues from existing tax rates. This, together with
further economies in expenditure, should make possible next year another
step in the reduction of taxes. Congress might then consider enacting a
general, though modest, reduction in taxes and, at the same time, continue
the program which was begun last year of reducing barriers to the free flow
of funds into risk-taking and job-creating investments.
While no changes in taxation are now recommended, except on business
income from foreign sources which will be discussed later, there is a need
for greater flexibility in the management of Federal finances, and this requires an increase in the present statutory debt limit. During the past two
years, the Treasury has been obliged to manage the Government's finances
under the severe handicap of a debt limit which frequently was very little




49

higher than the outstanding debt. In August 1954, the Congress modified
the 275 billion dollar debt limit by permitting a temporary increase of 6
billion dollars to cover seasonal needs. This increase will expire on June 30.,
when the outstanding debt is expected to be close to 275 billion
dollars. Since the anticipated balance in the cash budget for the fiscal
year 1956 will involve a deficit in the conventional budget of 2.4 billion
dollars, it is clear that the debt limit will have to be raised. The increase should be large enough to provide the Treasury with the necessary
latitude to do its job. It would be imprudent to set a new statutory debt
limit which left virtually no margin for unpredictable fluctuations in Federal receipts and expenditures. A higher limit will in no way lessen the
persistent efforts of the Administration to reduce expenditures further, but
it will enable the Treasury to discharge its financial responsibilities more
effectively.
Assisting New and Small Businesses
A public policy to encourage the expansion of a free economy must assign
a high place to measures that keep the doors to opportunity open for new
and small enterprises. Our economy is strong and progressive because it
contains, in addition to its five million farm enterprises, four million independent centers of business decision—each potentially free to experiment
with new ideas, new men, new methods, and new products. Many of the
revisions which were made in the tax laws last year were intended to meet
the special problems that confront smaller businesses in their attempts to
finance expansion and preserve their independence. These revisions should
help to create the kind of environment in which small business can flourish.
The Government has a responsibility to maintain easy entry into trade and
industry, to check monopoly, and to preserve a competitive environment.
All efficiently managed businesses benefit from such policies—new and
small firms most of all. Recognizing this fact, the Attorney General appointed a National Committee to Study the Antitrust Laws, composed of
distinguished citizens and legal experts, to recommend improvements in the
substance and administration of our Federal laws to promote competition
and prevent monopoly. Even prior to the submission of the report of this
Committee, it would be well to strengthen the deterrent to violation of
the Sherman Antitrust Act by raising substantially the maximum fine that
may be imposed under the Act.
The Congress established in 1953 a program for helping business concerns of small size to obtain access to adequate financing, to a fair share
of government procurement contracts, and to competent counsel on management, production, and marketing problems. This program has made
a useful contribution to the strength of small concerns. It should, accordingly, be continued. Further, the lending authority for the program, which
is now almost fully committed, should be enlarged so that loans may continue to be made to small concerns that cannot obtain adequate financing
on reasonable terms.




50

Improving the Basis of Technology
Both the formation of new firms and innovations by existing firms are
stimulated by research, development work, and experimentation. Out of
these activities—carried on in the laboratories of universities, research
institutes, governmental agencies, and business firms—come the products,
methods, and materials which afford new entrepreneurial opportunities
and help to improve the quality of living. Recognizing the fundamental
importance of research and development work, the tax laws were revised
last year to permit outlays for research to be treated as current expenses.
It may be expected that private expenditures for research, which are already
very large, will continue to grow. The Federal Government itself plans to
spend more on scientific research and development during the coming fiscal
year than at any time in the past.
Since technological progress depends on scientific inquiries and human
inventiveness, rapid growth cannot be expected unless the knowledge and
skills of our people are properly developed for these tasks. A shortage of
scientifically trained young men and women, especially those competent in
the physical sciences and in engineering, exists at present. Unless steps are
taken to relieve this shortage, it may seriously limit the growth of research
activities and retard their industrial applications. To deal with the problem, the Congress should expand Federal programs for fellowships, research,
teacher training, and related activities.
In due course, additional measures must be taken. Some shortages of
trained personnel will be remedied by the passage of time, but the national
welfare requires special action to help relieve the classroom shortage that
now exists in our schools and to help augment the supply of certain skills.
Some recommendations bearing on schools, so vital to our country's future,
appear on pages 63-65. This subject will be treated in a forthcoming
special message to the Congress.
II. STRENGTHENING ECONOMIC TIES W I T H OTHER COUNTRIES

The foreign economic policies of the United States can be a powerful
instrument for strengthening the security of our Nation and the Free
World. The nations of the Free World are economically interdependent,
and no one of them can afford to act upon a narrow view of its own interests or with primary regard to the special interests of any particular
industry or group. Now, more than ever, our own permanent interests
of national security and the general welfare must take precedence over
all other considerations.
It is to the advantage of each nation to attend to the barriers that
have caused international trade and investment to lag behind the growth
in production and incomes. Our own interest clearly calls for a policy
that will in time extend into the international field those principles of competitive enterprise which have brought our people great prosperity with
freedom. Against the Communist ideology of the omnipotent State, own-




ing all means of production and dominating all economic activity, the
United States holds forth the ideals of personal freedom, private property,
individual enterprise, and open markets. We should bear in mind that,
in the long run, other countries are far more likely to rally to liberal
ideals if we take the steps within our power to encourage them to join us in
mutually beneficial economic intercourse. Hence, our trade and investment policies affect our ability to increase the solidarity of the Free World.
This broad vision, which pervaded the studies of the Commission on
Foreign Economic Policy, now guides the recommendation to the Congress
to act so as to clear the channels of trade, to foster foreign investment, and
to provide technical aid to underdeveloped nations. Such actions will not
only help to increase world production and trade; they also will help to
assure a rising standard of living for our own people.
Freeing the Channels of Trade
The Free World has sought to reduce restrictions on trade through the
General Agreement on Tariffs and Trade, currently being renegotiated by
the governments adhering to it. Because this Agreement is one of the
means by which the United States has sought to carry out the purposes of
the Trade Agreements Act, the current negotiations are of great importance
to us. When the new Agreement on Tariffs and Trade has been satisfactorily concluded, it will be submitted to the Congress for its approval.
It is of the utmost importance that we continue the gradual and selective
revision of our tariffs through the tested method of international negotiation. A three-year extension of the Trade Agreements Act has therefore
been recommended, with amendments to empower the President as follows:
First, to reduce present tariff rates on individual commodities by as much as
5 percent per year in each of the three years of the new Act; second, to
reduce tariff rates in greater degree in the case of products now imported
in negligible volume; third, to reduce to 50 percent any rate in excess of that
level. The present escape and peril point provisions of the Act should,
however, be continued in order to avoid or mitigate any undue hardships
that might develop under the operation of the proposed program.
Our customs procedures often impose unnecessary and unintended
burdens on trade by causing disputes and delays. Progress has recently been
made toward efficient customs administration, but good business practice
requires that more be done. An interim report by the Tariff Commission
on means of simplifying the commodity definitions and rate structures of
present tariff laws is expected shortly and will deserve serious study. In
addition, Congress should establish standards for the valuation of imported
goods that are simple, clear, and logical in their application.
Finally, it is recommended that Congress increase the duty-free allowance of foreign goods brought home by our tourists during any six-month
period. In addition to its economic effects, this encouragement to American tourism should pay large dividends in improved relations with other
countries.




52

Fostering Foreign Investment
We can strengthen our own economy and that of the Free World by
increasing the flow of capital to nations that are able to use it productively
for their development. The expansion of foreign investment would speed
the growth in foreign countries of industries whose output is needed to meet
our own increasing requirements of raw materials and other products. By
augmenting our exports, it would help to maintain prosperity at home.
Above all, it would provide a convincing demonstration of our desire for
economic partnership with countries seeking to improve their economies.
A great challenge of our time is to find constructive ways of aiding the
economically underdeveloped countries in different parts of the world.
The complexity of the task is suggested by the factors that are often present
in these places—heavy concentration of people on limited land, meager
educational facilities, great deficiencies of domestic capital, lack of management personnel, outmoded transportation systems, low output of electrical
power, and inadequate public administration. Such countries can use
assistance from us and from others, so that they may build a solid foundation
for their social institutions and realize the opportunities open to free peoples.
To an increasing degree our aid has taken the form of technical assistance,
under which our technicians work with other peoples to help improve their
production, their educational methods, and their health. Aid in the form
of commodities and services is also being extended to those foreign countries
whose economic strength cannot be built up rapidly enough, in view of the
security requirements of the Free World, by the normal processes of trade
and investment.
The program of technical and other assistance to economically underdeveloped countries should be strengthened. Even more important, in
the long run, is an expanded flow of private international investment.
We should encourage investment in all countries whose desire to speed
their economic development has led them to create a hospitable climate
for business investment. An inflow of private American capital can serve
as a catalytic agent in many places—increasing production and incomes,
permitting greater consumption and local saving, which in turn would
expand local investment, and so on in a widening circle. Although the
Export-Import Bank is expected to expand its lending program, the Federal
Government can help also in other ways to raise the level of our foreign
investment.
As recommended by the Commission on Foreign Economic Policy, the
tax rate on corporate income from all foreign sources should be reduced
by 14 percentage points, making it equal to the rate already applicable to
Western Hemisphere trade corporations. Our law now requires that income from foreign sources be taxed in the United States to the extent that
it is not taxed abroad. This has two consequences. First, American firms
doing business in a foreign country with low tax rates operate under a tax
disadvantage in comparison both with domestic firms of that country and
with firms of other nations that levy low taxes on foreign income. Second,




53

countries desiring to attract American capital cannot very well use favorable
tax rates as an incentive. Indeed, our present tax policy might even encourage a country in which American capital has already been invested to
increase its taxes on business income. The proposed rate reduction would
tend to improve the competitive position of our firms doing business in other
countries; it would reduce a barrier to further investment abroad; and it
may stimulate foreign countries to use favorable tax rates as a means of
attracting American capital.
American corporations with foreign branches should also be permitted
to defer the tax on branch income until it is withdrawn from the country
in which it was earned. This will end the present unreasonable discrimination between operations conducted through branches and those handled
through foreign subsidiaries.
We should supplement these tax changes by continuing to explore with
other countries the use of the tax treaty as a method of fostering a more
favorable climate for international investment. Under proper safeguards,
we should be prepared to give full credit for income taxes that are waived by
a foreign country for a specified initial period, just as we now grant credit
for taxes that are imposed. This change would give maximum effect to
the laws of other countries designed to encourage new enterprise.
Another measure to spur foreign investment is to establish an International Finance Corporation as an affiliate of the International Bank for
Reconstruction and Development. This Corporation would receive its
capital from countries now participating in the IBRD. Unlike the IBRD,
it would be permitted to invest, without any governmental guaranty, in
new private enterprises needing capital. As now conceived, the Corporation would assume an interest in a new enterprise only to get it started,
not for a long term of years. Nor would it participate in the management
of the enterprises it helped to initiate. By providing on a business basis
the margin of capital needed to attract other funds, the Corporation would
help to expand private investment abroad. Its international character
and prestige would probably aid local citizens in bringing about a favorable
investment climate in their countries. In view of the great promise of the
proposed Corporation, the Congress will be requested to authorize at the
proper time a contribution by the United States to its capital.
Taken together, these proposals to augment the international movement
of goods and investment funds will have a salutary influence on our economy.
They will increase the efficiency of use of our own resources, they will
diversify and enlarge the amount of goods and services available to American
consumers, and they will expand foreign markets for our products.
III.

BUILDING THE FLOOR OF PERSONAL AND FAMILY SECURITY

Significant steps were taken by the Government last year to help individuals and families make better provision for their security. The American




54

people should continue on this path, firm in the conviction that only when
minimum human needs are provided in case of unemployment, disablement,
or retirement, and the opportunity exists for a decent home in a sound
neighborhood, will the individual make his greatest contribution to
economic growth. Many of the measures to advance this objective,
including those to improve the Nation's health, are being presented in detail
in other messages. The following discussion is confined to the larger
economic measures.
Meeting the Hazard of Unemployment
The Federal-State Unemployment Insurance System has proved its
value as a first line of defense against economic recession. During the six
months from April through September of 1954, benefit payments were 1.1
billion dollars, compared with 0.4 billion dollars in the corresponding
months of 1953. These benefits, paid to workers as a matter of right under
established law, enabled many families to live without exhausting their
savings and helped make possible record-breaking consumer purchases,
despite a fall in employment. Legislation passed in 1954 will greatly improve the workings of our unemployment insurance system in the future.
Nevertheless, further revisions are desirable both to meet the needs of the
economy and to meet the needs of the unemployed.
The coverage of the Federal unemployment insurance laws was extended
last year to include Federal civilian employees and the employees of many
small businesses. It is hoped that the States will soon act to include under
the system the 4.4 million employees of State and local governments not
now covered. Government ought not to deny its own employees the protection it requires the private employer to provide for his. In addition, the
States that have not already done so should consider taking steps to extend
unemployment insurance to those who work for firms employing fewer than
four persons. These workers need protection against unemployment no less
than the employees of larger firms.
From the standpoint of the unemployed worker, weekly benefits should
be sufficiently high to provide the basic necessities. From the standpoint
of the economy, benefits should be sufficient to enable the unemployed to
maintain a substantial part of their customary expenditures, thereby minimizing the spread of unemployment. The general level of benefits is now
too low for either of these purposes. Our Federal-State unemployment
insurance system was originally designed to pay benefits of approximately
half of regular weekly earnings, up to a dollar maximum that was adequate
for its time. Since these legal maxima have not kept pace with rising wages,
the ratio of benefits to the wages of covered workers has fallen from 43 percent in 1938 to 34 percent currently, and in several States below 30 percent.
In many States a great majority of all beneficiaries receive the same weekly
benefit—the maximum—regardless of the differences in their earnings.
This loss of a clear relation between benefits and a worker's usual earnings
or his customary living standard is inconsistent with the incentives of a free




55

economy. It is highly desirable that the States change their laws so that
the great majority of covered workers will be eligible for payments that at
least equal half their regular earnings.
The adequacy of unemployment insurance depends also on the period for
which benefits are paid. In the first eleven months of 1953, the number
of persons who exhausted their benefit rights reached 679,000. Last year
the number jumped to 1,610,000 during the corresponding months. In
few States is the potential duration of benefits now as much as 26 weeks
for all beneficiaries. An increase in the usual duration of benefits is
especially necessary during economic recession, when the average duration
of unemployment as well as its amount increases. For this reason, the States
are urged to lengthen the term of benefits to 26 weeks for every person
who qualifies for any benefit and who remains unemployed that long. It is
recognized that an increase in the term and the level of benefits may call
for a re-examination by the States, and in some instances a tightening, of
the test of attachment to the labor force and of other legal or administrative
safeguards against abuse.
The District of Columbia should have an unemployment insurance law
that could be a model for the States. Last year the Congress improved
the law by raising the maximum amount and duration of benefits; but the
new law made it more difficult for unemployed persons to receive benefits
for the maximum period. This weakness should be remedied by providing
26 weeks of benefits for all persons who qualify and who remain unemployed that long. The disqualification provisions of last year's law should
also be reviewed.
The Federal-State Employment Service has an important part to play
in reducing unemployment. While the Employment Service cannot create
jobs, it can help fill vacant jobs quickly and well. As recommended in the
Budget Message, the system should be strengthened to meet this need and to
assure the best use of scarce manpower in any future national emergency.
Some employers and workers fail to use the Employment Service because
they do not realize its value. They should acquaint the Service with their
problems, since the more it is used the better will it function.
Last year, although the economy as a whole was prosperous, some communities suffered from sizable unemployment. Their fortunes turned for
the better when recovery got under way in the early fall, and most of
them will regain prosperity as economic expansion cumulates. In some
places, however, unemployment stems from special causes, such as a lasting
drop in the demand for their wares, an exodus of industry to new locations, or a vanishing supply of some material basic to the local economy.
Such "structural" or "spot" unemployment may remain even when the
Nation's economy practically reaches full employment. The Federal Government should be willing to assist depressed communities to develop workable solutions of their problems. Accordingly, the Area Development
Program of the Department of Commerce, which can be so helpful in
revitalizing a community's industry and trade, should be further strength-




56

ened. For the time being, at least, it is also desirable to continue the policy
of granting special tax amortization benefits for new defense facilities located
in surplus labor areas and of placing government contracts as far as feasible
in these areas.
It would be well to recognize, however, that these programs can make
only a limited contribution to relieving "spot" unemployment, and that
a large part of the adjustment of depressed areas to new economic conditions both can and should be carried out by the local citizens themselves.
The Federal Government can make its most effective contribution to their
needs as well as those of others by steadfastly pursuing monetary, tax,
expenditure, debt management, and general housekeeping policies that
promise a high and stable level of employment in the Nation at large.
Extending Economic Security in Retirement
Provision of a decent minimum income after retirement is a central
element in a program for personal security. The Government acted last
year to increase both the coverage and the benefits of Federal Old-Age and
Survivors Insurance. To continue the progress toward comprehensive
coverage, it is recommended that the Congress extend coverage on a permanent and full contributory basis to Federal personnel.
The major responsibility for security in old age rests, of course, upon
the individual himself, and is discharged through personal saving, insurance, and investments of various kinds. In addition, private pension plans
have multiplied during recent years, under the encouragement of our tax
laws. More than 12 million employees of business enterprises are now
covered by pension plans, under which it is estimated that about 3 billion
dollars per year is currently being contributed by employers and employees.
Private plans for retirement income appear to be highly desirable, but a
number of questions merit further study by the Congress and the Executive
Branch. For example, how do such plans affect the mobility of employees
and the willingness of employers to hire older workers? How can, or
should, these plans be fitted together with Federal Old-Age and Survivors
Insurance into an integrated program for retirement income? What are
the effects of pension plans upon the spending and saving habits of people?
What influence does the investment of funds assembled through these plans
have upon our financial markets and the supply of venture capital?
Augmenting Low Incomes
A small and shrinking, but still significant, number of American families
have cash incomes under $1,000 per family. By current standards, most
of them must be considered poverty-stricken. These families are not concentrated in urban centers. They live chiefly on small farms or in rural
areas and villages, mainly in the Southern States. Raising the incomes of
this group should be one of our continuing objectives.
The causes of low incomes are complex; they include lack of education
or skill, poor health, old age, or prolonged unemployment. Solutions must




57

be found through a long-run program to improve the skill, versatility, and
mobility of low-income earners, thereby increasing their productive capacity.
The elimination of remaining poverty in America would not only bring
greater happiness and opportunity to these people; it would draw them into
the stream of progress, enlarge the markets for consumer goods, and
promote the expansion of the economy. Means of raising low incomes by
increasing the productivity of people have been the subject of study this
past year by the National Agricultural Advisory Commission and by an
interagency task force of the Council of Economic Advisers. Studies of
this problem are continuing.
Under our system of free labor markets and free collective bargaining, the
wages of a preponderant majority of workers are determined fairly without
government intervention. Minimum wage laws do not deal with the fundamental causes of low incomes or poverty. However, minimum wage laws
can assist the comparatively small number of workers who are at the fringes
of competitive labor markets. The minimum wage under Federal law is
now 75 cents an hour, a figure that became effective early in 1950. Since
then the cost of living and average hourly earnings have risen, providing
reason for an increase in the minimum wage when, as at present, the economic outlook is favorable. An increase to 90 cents an hour would be
appropriate and consistent with over-all economic considerations at this
time. It is recommended that the Congress increase the minimum wage
to 90 cents an hour.
Such action would increase the wages of about 1.3 million workers by an
average of about 9 cents an hour. In addition, some workers now earning
more than 90 cents an hour would probably receive wage increases to preserve customary differentials. Although these increases would add appreciably to the costs of certain industries, notably in the South, the general
expansion of economic activity now under way should increase the demand
for their products and lead to economies of operation, besides those stimulated by the higher minimum, thus enabling these industries to absorb a
part or all of the wage increase. Nevertheless, 90 cents an hour is the
highest minimum wage that can be economically justified in present circumstances. A higher minimum might well cause lower production and substantial unemployment in several industries, and—whether directly or indirectly—it would probably bring generally higher prices in its wake.
Such effects would make the gains of covered workers illusory, and they
would lower the standard of living of uncovered low-wage workers.
The coverage of the minimum wage is no less important than its amount.
Only about 24 million of the 44 million employees of private firms are now
subject to the Federal minimum wage, an additional 3l/2 million being
covered by the laws of 20 States. As stated in last year's Economic Report:
"Neither the Federal nor the State laws now include the lowest-paid
workers." It would be well for both the Congress and the States to consider the question of bringing substantial numbers of workers, now




excluded from the protection of a minimum wage, under its coverage. To
ease the process of adjustment, a gradual approach to this problem will
need to be developed.
Protecting Workers3 Savings
A significant financial development of recent years has been the rapid
spread of the credit union. These cooperative agencies provide a means by
which members—primarily employees of the same firm or members of the
same fraternal or similar association—can invest their savings in an institution under their own management and from which they can, when the
occasion arises, borrow money for personal needs. In December 1953
there were about 13,700 credit unions in operation—7,100 with State and
6,600 with Federal charters—having a membership of nearly 6,650,000
persons and assets close to 2 billion dollars. For the most part, credit
unions hold savings accumulated by individuals of small or moderate means,
and which represent for them a first line of defense against economic
adversity. It is desirable, therefore, that Congress consider measures for
protecting these savings.
Among other measures, the Congress might well consider the merits of
share-account insurance. An insurance system could be self-supporting,
with membership mandatory for Federally chartered unions and voluntary
for those having State charters. If such a system were established, it would
be essential to maintain adequate safeguards for the insuring agency, such
as a limit on insurable accounts, ample reserves, proper standards of
admission, and thorough examination. In any event, it would be well to
review the regulations that now govern the lending and credit management practices of credit unions.
Investments in the shares of credit unions represent, of course, only a
small part of the savings of workers. Far larger in total amount are the
savings that go into bank deposits, life insurance, Federal savings bonds,
shares in savings and loan associations, and pension funds. The integrity
of all these savings depends not only upon the soundness of the institutions
receiving them; it depends also on the integrity of the dollar. Hence, one
of the great and continuing responsibilities of Government is to pursue
policies which assure that a dollar saved today will not go to waste through
inflation of prices tomorrow.
Improving Homes and Neighborhoods
Last year the Federal Government moved energetically to broaden the
opportunities for families to acquire new homes or to improve existing
dwellings. Forward steps were also taken to assist communities to prevent the spread of slums and to rehabilitate deteriorated neighborhoods.
Further progress will depend partly on what the Federal Government does,
and in much greater degree on the efforts of civic organizations and on
actions that can be taken only by State and local governments.




59

Federal funds are now available, but more will be required during the
next fiscal year, for projects which look to the renewal of urban neighborhoods by conserving and improving what is still useful in blighted areas and
by replacing what cannot be restored. This program supplements the
financial facilities previously available for total clearance and redevelopment of slum areas. In addition, the Federal Housing Administration has
been authorized to insure mortgages on new or rehabilitated structures in
areas for which local governments have developed practical renewal programs. States and cities can obtain assistance from the Housing and Home
Finance Agency in developing their renewal programs and should, in their
own interests, take steps to expedite them. For its part, the Congress
should authorize the Public Housing Administration to enter into contracts
for 35,000 additional units of low-rental public housing in each of the next
two fiscal years, in order to assist in the relocation of families displaced as
a result of slum clearance, redevelopment, or renewal programs.
The Housing Act of 1954 enables families to acquire homes under Federal
programs of loan insurance on somewhat more liberal terms than were previously available. Furthermore, by liberalizing the conditions which surround
the use of loan guaranty privileges by eligible veterans, and by permitting
the Federal Housing Administration to insure supplementary loans under an
"open-end" type of mortgage, the Act facilitates the repair and modernization of existing dwellings. The States can give further effect to these actions
by enacting, where necessary, legislation to permit the writing of "open-end"
mortgages. The availability of this type of financing will prove especially
helpful to the many homeowners whose growing families require better and
more spacious dwellings.
The Federal Government should take additional steps to augment the
facilities available for home ownership and improvement. To accommodate the increasing demand for mortgage insurance, it will be necessary to
increase the insurance authorization of the Federal Housing Administration. It is also recommended that national banks be allowed to make
amortized real estate mortgage loans with maturities up to 20 years. The
present limitation of ten years for conventional mortgages unnecessarily
restricts the availability of home financing in some areas. The Congress
can at the same time increase the availability of funds for the financing of
construction work, and in a manner entirely consistent with sound credit
practices, by authorizing national banks to make construction loans with a
maximum duration of, say, nine months. This rule should replace the
present limitation of six months.
These various steps would effectively widen the opportunities of families
to acquire homes or to improve those they already own. It must be recognized, however, that the progressive easing of mortgage financing terms
is not without its hazards for the stability of the economy. It would be a
wise precaution, therefore, to provide for prompt readjustments in the
terms of mortgage loan insurance and guarantees, when required by changes
in economic circumstances. The Housing Amendments of 1953 authorized




6o

the President, at his discretion and in the light of economic conditions, to
alter the terms on which the Federal Government would insure mortgage
lenders against losses on loans secured by residential properties. This
authority was limited in its potential application, but it nonetheless provided a useful tool for the control of credit during inflationary periods and
for the stimulation of home building during periods of contraction. Last
year's Economic Report proposed that this discretionary authority be
widened, but the Housing Act of 1954 moved in the opposite direction.
The Congress should again consider this proposal and give the President
greater latitude in the exercise of his power to vary the terms on which
home mortgages are underwritten. In view of the magnitude of residential construction, its variability, and its responsiveness to changes in the
terms of mortgage loans, a wide Presidential authority over terms, to be
exercised with the aid of an advisory group, could make a major contribution to the maintenance of stable prosperity.
IV.

EXPANSION OF OUR PUBLIC ASSETS

Great accumulated needs for roads, schools and hospitals, for water,
sanitary and community facilities, for conservation and recreational works,
now exist in our nation. This accumulation is the result of postponements
in the face of growing needs during the past fifteen years, when a large part
of our resources was required by war and defense. The Economic Report
of January 1954, noting the vast backlogs and the continuing expansion of
needs, recommended that a larger part of the Nation's effort be devoted to
public works, in order that our economy may grow without hindrance. The
Federal Government shares with State and local governments the responsibility for removing this obstacle to economic expansion.
Modernizing the Highway System
Highways carry the stream of commerce to nourish all parts of the
national economy. Over them pass freight and passenger vehicles and,
when necessary, the mechanized weapons of defense. When these channels
are inadequate, congestion results; this causes loss of life and property
and checks economic expansion. Serious congestion now exists, with
58 million cars and trucks traveling 557 billion vehicle-miles a year. Yet,
it has been estimated that at the present rate of highway improvement
and general economic growth, our country by 1965 may have about 80
million motor vehicles and an annual traffic of over 800 billion vehicle-miles.
With these considerations in mind, the President's Advisory Committee
on a National Highway Program has sought to determine how the United
States could best improve its highways during the next decade. After
study and discussions with the Executive Committee of the Governors'
Conference and other groups, the Advisory Committee has recommended
the modernizing of the presently-designated National System of Interstate
Highways, together with urban connecting roads, at an estimated cost of
27 billion dollars over a ten-year period. Toll roads already built to accept-




6i

able standards along'the designated routes could be included as segments
of the National System. Our country would then possess an integrated
network of safe, controlled-access highways—transcontinental, borderto-border, and interregional—capable of carrying the heaviest loads,
operated under uniform traffic regulations, and joining 95 percent of all
cities with a population over 50,000.
The National System of approximately 40,000 miles has primary significance for the country's economic growth and military defense. Hence the
Advisory Committee has proposed that the Federal Government bear all
but 2 billion dollars of its cost. For their part, State and local governments would be expected to assume principal responsibility for financing
the construction work needed on the remainder of our total street and
road network of 3,348,000 miles. Federal grants-in-aid for roads would be
maintained at approximately the current level. Taken altogether, the
States and localities would be expected to bear about 70 percent of the
estimated cost of about 100 billion dollars required to modernize the Nation's
streets, roads, and highways over the next decade, while the Federal Government would bear the remaining burden of 30 percent.
The construction of the National System of Interstate Highways could
be financed by obligations issued by an independent authority, created by the
Congress. The funds needed to pay interest and amortize the highway
debt could come from the excess—which may be expected to increase
rapidly—of the Federal revenue from present taxes on gasoline and lubricating oil over the current amount of Federal grants-in-aid for roads.
Although a steady pace of construction, financed through the sale of bonds to
the public, would normally be the best procedure, expenditure and financing
plans could be adjusted in the interests of general economic stability.
It is being recommended that the Congress act affirmatively on a
national highway program, and with a view to its expeditious completion. A special message on the subject will be submitted shortly. Such
a program would release enduring forces of economic expansion. As the
construction of the National System progressed, the States and localities
could be expected to enlarge their own expenditures on other roads and
on streets. In addition, history shows that private investment mounts when
new arteries of commerce develop. New factories and shopping centers
would be constructed; service facilities for food, lodging, and automobiles
would be provided along the new highways. Markets for new cars and
many associated goods and services would be lifted to higher levels. Above
all this, immense savings would accrue to the public from reduced accidents
and lower transportation costs.
Accelerating the Development of Natural Resources
It is desirable to expand investment in facilities for conserving and
bringing into economic usage more of our soil, water, mineral, and other
resources. To speed this process, the Federal Government has attempted
to distinguish as clearly as possible the field of Federal enterprise from that




62

of private or local enterprise. It must act vigorously in the former—as this
Administration proposes in the case of the national system of highways; and
it must foster and encourage activities by others in the latter—as has
already been done in the leasing of the Government's submerged and other
lands for private exploration of petroleum and other mineral deposits.
Of all our natural resources, none requires more immediate attention
than water. The effective conservation, control, and utilization of the
Nation's water resources requires energetic implementing of sound policies.
The present partnership policy of developing water resources is a particular expression of the Government's general approach to resource development. This policy is, simply, to encourage State and local governments and private interests to provide all physical facilities that they
can, leaving for Federal execution those parts of water development projects which serve national purposes or which, because of great size or complexity, are beyond the capability of others.
This approach promises to accelerate the development of our water resources without involving the Federal Government in huge expenditures or
operations. Thus, during the last two years applications to the Federal
Power Commission for permits to survey potential hydro-electric developments represented a larger total of kilowatts than was covered by the applications during the prior seven years. At the end of last year the volume of
such permits outstanding was by far the greatest in the history of the Commission. The workings of the partnership policy are also illustrated by
six multipurpose projects for which provision has already been made or is
contemplated in the coming fiscal year. It is estimated that these projects
will result in a Federal expenditure of about 200 million dollars, while an
additional 800 million dollars may be expended by local interests, private
or public.
Expanding State and Local Works
The largest part of the demand for public assets is for new schools, hospitals, water systems, streets and roads, and other facilities of the kind
traditionally provided by States and their governmental subdivisions.
Clearly, every necessary step should be taken to facilitate the execution of
these projects.
The capacity of most municipalities, when judged from an economic
point of view, appears to be adequate for financing needed improvements.
However, many communities are prevented from utilizing their financing
capacities by outmoded tax-rate or debt limits. State legislatures might well
review their limiting statutes and, where advisable, proceed to remove or
relax barriers to local public investment.
In States where the barrier of tax-rate or debt limits cannot be easily or
quickly lowered, consideration should be given to alternative financing measures. Some States have made loans or grants to local school districts for the
financing of building programs. Other States have established independent
authorities, which raise funds for school building through the sale of revenue




63

bonds secured by the leasehold rental payments of the districts for which
schools are built. Use might be made of lease-purchase plans, whereby
municipalities can acquire needed buildings through instalment payments
and yet stay within their existing debt limits.
It is also desirable to explore ways of broadening the market for bond issues of local governments, particularly those of smaller localities. At least
one State has established an agency to examine and approve all of its
new local government issues prior to their sale to the public. The market for small issues of little-known municipalities could be broadened by
encouraging the establishment of a type of investment trust which would
specialize in the securities of State and local governments, including their
revenue bonds. To make the shares of such companies attractive to individual investors, the Congress should revise the tax laws so as to permit
a regulated investment company, holding the bulk of its assets in the form
of tax-exempt securities, to pass through to its shareholders the tax-exempt
status of the income received on such securities. Such a "pass-through"
would be a useful extension of a principle already in use.
Finally, it is apparent that many of our larger cities have far outgrown
their traditional boundary lines. Nowadays, the typical metropolitan community sprawls over a number of towns or cities, in some cases over several
States. The lack of congruence between the area of need and the area of
governmental jurisdiction throws obstacles in the way of rapid and efficient construction of public works. The States are urged to study the
problems of metropolitan areas, so that area-wide transit systems, sanitation systems, water supplies, or educational facilities may be provided
with maximum returns from the public funds expended. For some of our
larger metropolitan areas, interstate action is indicated. The metropolitan
problem is both a challenge and an opportunity.
Coordination of Public Works Planning
Responsibility for different types of public construction is dispersed among
many agencies of Federal, State, and local governments. Effective forward
planning and execution of our Nation's public works therefore involves
coordination of the activities of numerous Federal agencies, stimulation
of advance planning by States and localities, and cooperation with State
and local agencies engaged in public construction. Recognizing that the
enlargement of our public assets is a vital task in the era ahead, and that
the timing and coordination of public works activities have an important
bearing on the growth and stability of the economy, the Council of Economic Advisers last year established a small unit to devote itself to coordinating the planning of public works.
Among other activities, this unit cooperated with the Bureau of the
Budget in making an inventory of the status of Federal public works plans,
project by project. It also initiated a survey of State and local plans for
public works, which was carried out in cooperation with the Housing and
Home Finance Agency and with the Bureau of the Census. The first study




disclosed that Federal plans for sound projects are available in reasonable
abundance for an accelerated public works program, if economic conditions
should make this necessary. The second study disclosed that public works
programming by States and localities is extensive, but that there is only a very
small backlog of plans at the stage of drawings and designs. The experience gained by the Council in surveying the Nation's needs and planning
for public works has confirmed the wisdom of the many students of government who have repeatedly urged systematic attention to public works
planning. To emphasize this vital activity and give it larger scope, an
appropriation is being requested of the Congress to set up an Office of
Coordinator of Public Works Planning within the Executive Office of the
President.
A problem of great interest in this connection is the stimulation of public
works planning in States and localities. Many smaller communities have
projects within their master development plans for which funds are not
immediately available to produce preliminary engineering surveys and
designs. Assistance to such communities would help them to develop
plans for public works ready for initiation, which otherwise would take
months to prepare in case of need. Such a reservoir of planned public
works should be of considerable magnitude to be effective. The sum of
1.5 million dollars made available by the Congress last year for planning
advances—that is, interest-free loans—to States and municipalities was a
good beginning but no more than that. It is recommended that the Congress enlarge substantially the appropriation for planning advances, and
that a revolving fund be established for this purpose. The need for building a reservoir of "ready-to-go" projects has been recognized in three
separate programs of planning advances, established by the Congress within
the past decade. This experience indicates that the need for preparedness,
being itself continuous, is not well met by programs of limited duration.
V. INCREASING THE STABILITY OF A GROWING ECONOMY

A view fundamental to the economic program presented in this Report
is that the best way to avoid economic recessions is to have the economy
growing vigorously. Yet it is necessary to recognize that, at times, growth
processes may falter, and that on other occasions the forces of growth may
generate price inflation. An expanding economy does not escape the need
for moderating the business cycle. Hence, the program recommended in
this Report has been formulated not only to foster economic growth, but to
foster a reasonably stable process of growth.
The past quarter-century has taught our generation to be highly sensitive
to economic changes. The protracted depression of the thirties, and the
inequities of wartime and postwar price inflation, have made us intolerant
of extensive fluctuations in incomes, in employment, or in prices. Economic statistics are now closely scrutinized and widely commented upon
by men and women in different walks of life. The American people apply




65

more exacting standards to the performance of our economy than they did
fifty or even five years ago. They expect their Government to pursue
policies that foster a smoother rate of economic growth than was experienced
in the past.
The growing confidence of people in their Government's ability to moderate economic fluctuations is desirable and not misplaced. A better-informed
public with an increased awareness of economic change will tend to bring
about higher standards of economic performance. This increased knowledge on the part of the public should, however, be accompanied by a realistic
understanding of the practical difficulties in attaining increases in total
production, employment, and personal income, entirely free from interruptions. Neither in our own history nor that of any other country has an
economy ever attained this ideal for a long period of time.
The experience of Government in dealing with fluctuations in employment and incomes is not of long standing, and there is much yet to be
learned about the problem of economic stability. For this reason, it is to
be hoped that rigidity of judgments will not interfere with continued
flexibility of policies and administration. We have learned from experience that the Government can do a great deal to moderate economic
fluctuations, but there is as yet no good basis for the belief that it can
entirely prevent them. A democratic government needs time, especially
when current reports are conflicting, to meet a given economic situation.
Moreover, the effects of its actions—whether in augmenting or in restraining demand—require time to work themselves out. Government ought
not to be continuously veering its course, although it should act promptly
and decisively when a threat to economic stability emerges.
Statesmanship requires that we make every effort to harness the idealism
of our generation to the practical end of minimizing economic fluctuations.
The economic effects of government operations are now so large and so
pervasive that it is no longer reasonable to suppose that Government either
can or should remain aloof from what goes on in the private economy.
We have learned from experience that Government can pursue policies
that not only promise to bring a stabler prosperity to economic life, but
also to expand the scope and add to the vigor of private enterprise. Our
aim must be to build on this experience, to pursue policies that will facilitate
the growth of private enterprise, and to equip ourselves with better tools
for checking any recession or inflation that might develop. Numerous
actions taken last year by the Congress and the Executive have served these
ends, and the program recommended in this Report should advance us
further toward our goal.




66

Appendix A

SUMMARY OF RECOMMENDATIONS IN
THE ECONOMIC REPORT OF
THE PRESIDENT




67




Summary of Recommendations in the Economic
Report of the President
The following summary of recommendations in the Economic Report
includes recommendations to the Congress and suggestions to the States and
municipalities.
Taxes, Business Regulation, and the Public Debt
1) Postpone the lowering of the corporate income tax and of excises,
scheduled for April 1,1955. [Page 49.]
2) Reduce the tax rate on corporate income from all foreign sources by
14 percentage points. [Page 53.]
3) Permit corporations with foreign branches to defer the tax on branch
income until it is withdrawn from the country in which it was
earned. [Page 54.]
4) Allow a regulated investment company, holding the bulk of its assets
in the form of tax-exempt securities, to pass through to its shareholders
the tax-exempt status of the income from such securities. [Page 64.]
5) Strengthen the deterrent to violation of the Sherman Antitrust Act by
raising substantially the maximum fine that may be imposed under the
Act. [Page 50.]
6) Increase the present statutory debt limit to permit greater flexibility
in the management of Federal finances. [Pages 49-50.]
7) Review State and local tax-rate and debt limiting statutes with a view
to removing or relaxing, where advisable, these barriers to local public
investment. (State responsibility) [Page 63.]
Unemployment, Pensions, and Minimum Wage
8) Amend the unemployment insurance law of the District of Columbia
to provide 26 weeks of benefits for all persons who qualify and who
remain unemployed that long, and review disqualification provisions.
[Page 56.]
9) Strengthen the Federal-State Employment Service.

[Page 56.]

10) Extend the coverage of Federal Old-Age and Survivors Insurance, on
a permanent and full contributory basis, to Federal personnel.
[Page 57.]




11) Consider including under the unemployment insurance system the
employees of State and local governments, and employees who work
for firms employing fewer than four persons, to the extent that these
workers are not now covered. (State responsibility) [Page 55.]
12) Consider revising unemployment insurance benefits so that (a) the
great majority of covered workers are eligible for payments that at
least equal half their regular earnings, and (b) the term of unemployment insurance benefits is 26 weeks for every person who qualifies for
any benefit and who remains unemployed that long. (State responsibility) [Pages 55-56.]
13) Expand the Area Development Program of the Department of Commerce, which is designed to help depressed communities. [Pages
56-57.]
14) Increase the Federal minimum wage to 90 cents an hour; consider
extending the coverage of a minimum wage to substantial numbers of
workers now excluded. (Congressional and State responsibility)
[Pages 58-59.]
Education and Public Improvements
15) Expand Federal programs for fellowships, research, teacher training,
and related activities. [Page 51.]
16) Take early steps to help relieve the classroom shortage that now exists in
our schools. (Congressional and State responsibility) [Page 51.]
17) Modernize over a ten-year period the presently-designated National
System of Interstate Highways. [Pages 61-62.]
18) Appropriate funds to set up an Office of Coordinator of Public Works
Planning within the Executive Office of the President. [Page 65.]
19) Enlarge the appropriation for planning advances to States and municipalities, and establish a revolving fund for the purpose. [Page 65.]
20) Study the problems of metropolitan areas, so that area-wide transit
systems, sanitation systems, water supplies, or educational facilities may
be provided with maximum returns from public funds expended.
(State responsibility) [Page 64.]
Housing and Finance
21) Increase the insurance authorization of the Federal Housing Administration. [Page 60.]
22) Give the President greater latitude in the exercise of his power to vary,
in the light of economic conditions, the terms on which home mortgages
are underwritten by the Federal Government. [Pages 60-61.]
23) Allow national banks to make conventional real estate mortgage loans
with maturities up to 20 years, and to extend the maximum duration
of construction loans. [Page 60.]




70

24) Take steps to expedite urban renewal plans, so as to obtain available
Federal assistance. (State responsibility) [Page 60.]
25) Consider, where necessary, enacting legislation to permit the writing
of "open-end" mortgages. (State responsibility) [Page 60.]
26) Authorize the Public Housing Administration to enter into contracts
for 35,000 additional units of low-rental public housing in each of the
next two fiscal years. [Page 60.]
27) Continue the program for helping business concerns of small size to
obtain access to adequate financing, to a fair share of Government procurement contracts, and to competent counsel; and extend the program's lending authority. [Page 50.]
28) Consider the merits of share-account insurance and other measures
for protecting savings in credit unions. [Page 59.]
International Economic Relations
29) Extend the Trade Agreements Act, subject to present escape and peril
point provisions, for three years with amendments to empower the
President: (a) to reduce present tariff rates on individual commodities
by as much as 5 percent per year in each of the three years; (b) to
reduce tariff rates in greater degree in the case of products now imported in negligible volume; and (c) to reduce to 50 percent any rate
in excess of that level. [Page 52.]
30) Establish standards for the valuation of imported goods that are simple,
clear, and logical in their application. [Page 52.]
31) Increase the duty-free allowance of foreign goods brought home by
tourists during any six-month period. [Page 52.]
32) Authorize at the proper time a contribution to the capital of the proposed International Finance Corporation. [Page 54.]
33) Strengthen the program of technical and other assistance to economically underdeveloped countries. [Page 53.]







Appendix B
SOME LEADING ECONOMIC DEVELOPMENTS
DURING 1954




I.
II.
III.
IV.
V.
VI.

The Nation's Output and Its Disposition
Employment and Earnings
Price Changes
Monetary and Credit Developments
Government Finances
Foreign Economic Developments

73




Some Leading Economic Developments During 1954
The purpose of this Appendix is to present factual information on certain
of the leading developments of 1954. These facts serve to document the
analytical account given in Chapter 2, and to elaborate on some matters
that are only touched upon in that chapter. Section I of the Appendix
discusses the changes which took place during the year in the Nation's total
output, in different branches of production, and in public and private
expenditures. Section II deals with employment, unemployment, hours of
work, wages, and industrial disputes. Section III discusses the broad movements during 1954 of commodity prices in wholesale markets, as well as the
prices of consumer goods and services. Section IV reviews monetary and
credit developments during the year, and gives a brief sketch of Federal
Reserve and Treasury policies in the fields of credit and debt management.
Section V records the finances of Federal, State, and local governments.
The final part, Section VI, reviews economic developments outside the
United States—notably the industrial and financial progress of Western
Europe—and the foreign trade and investment of the United States over
the year.

I. The Nation's Output and Its Disposition
The Nation's output of goods and services declined slightly from 1953
to 1954 (Chart B - l ) . According to preliminary estimates based on expenditures data, the decrease in the gross national product was 2 percent.
When allowance is made for price changes, it appears to have been about
3 percent. When the decline is measured from the highest quarter in 1953
to the lowest quarter in 1954, instead of from one year's level to the next,
it is not much larger.
Although measures of change in the total output of goods and services
from 1953 to 1954 are useful as broad indicators of the over-all performance
of the economy, they obscure the diversity of experience among major sectors. What is perhaps more important, they veil the significant fact that
total output was again rising as 1954 drew to a close. While industrial
production declined by 10 percent from mid-1953 to March 1954, it made
a strong recovery in the latter part of the year, with most of the component
industries showing marked improvement. Activity in the construction
industry during 1954 was above that in 1953; agricultural output as a
whole continued at the high 1953 level; and some of the service and utilities
industries, notably electric light and power, continued to expand.
In contrast to the decline in total output, the final demand for goods and
services, taken in the aggregate, was well maintained (Chart 8, p. 28).




75

CHART B - l

GROSS NATIONAL PRODUCT
IN CURRENT AND CONSTANT PRICES
INDEX, 1947:100

BILLIONS OF DOLLARS

400

CURRENT PRICES
(LEFT SCALE)

300

140
CONSTANT (1947) PRICES
(LEFT SCALE)

120

IMPLICIT PRICE DEFLATORS
(RIGHT SCALE)

200

1947

1948

1949

1950

1951

1952

1953

100

1954

SOURCES: DEPARTMENT OF COMMERCE AND COUNCIL OF ECONOMIC ADVISERS.

Consumer expenditures, which had fallen slightly in the fourth quarter of
1953, rose to a new record level by mid-1954, supported by a small but
steady increase in disposable personal income. Outlays for fixed capital
investment, when taken as a whole, showed few traces of the contraction.
Expenditures by State and local governments continued to increase at a
moderate pace, while Federal expenditure fell off substantially.
Since the contraction of output from mid-1953 to early 1954 was centered in industrial production, attention is directed first to that sector of the
economy.
CHANGES IN PRODUCTIVE ACTIVITY

Industrial production
The salient features of the contraction and recovery in industrial production are shown in Table B-l. For 1954 as a whole, declines were greatest
in metal mining, in the production of primary metals, and in coal mining.
Declines in the output of metal fabricating industries ranged from 7 to 13
percent, and, since their sales declined less than production, the inventories
of these industries were reduced substantially over the year.
In other branches of industrial production, activity was better maintained.
Output of clay, glass, and lumber products, and also of stone and earth minerals, held close to 1953 levels. Output in the nondurable goods category




76

declined less than the output of durable manufactures or minerals. Among
the major nondurable goods industries, the output of the food processing,
TABLE B-l.—Changes in industrial production
Percentage change1 from—
Industry group

1953 to
1954 »

Industrial production: total

-7

Manufactures: total

-7
-10
-18
-10
-10
-9
-13
-7
-10
-2
-8
-2
-7
-8
0
0
-1

Durable manufactures: total.
Primary metals
Metal fabricating: totalFabricated metal products
Electrical machinery
Nonelectrical machinery
Transportation equipment..
Instruments and related products
Clay, glass, and lumber products
Furniture and miscellaneous manufactures.
Nondurable manufactures: total
Textiles and apparel
Rubber and leather products
Paper and printing
Chemicals and petroleum products
Foods, beverages, and tobacco
Minerals: total
Coal
__
Crude oil and natural gas
Metal mining
Stone and earth minerals

-4
-14

+1
-21
-1

July 1953 March 1954 August 1954
to Decemto
to
March 1954 August 1954 ber 1954 »
-10
-10
-14
-24
-13
-15
-18
-14
-12
-11
-6
-11
-11
-2
-5
-1
-7
-29
-1

+6
0

+2

0

+3
+1
1
0
—4
-6
-7
+3
0
0
-6

+6
+7
+14
+5
-1
+6
+19
+5
+13
+1

a
+12

+2
+1
-3
-14
-2

+6
+

1

Percentage changes for monthly data are based on seasonally adjusted indexes.
* Preliminary.
Source: Board of Governors of the Federal Reserve System.

paper and printing, and chemicals and petroleum products industries kept
in close step with their sales. Textile and apparel production declined
7 percent, which was enough, in view of the behavior of sales, to accomplish
sizable inventory reductions.
The shorter-term movements of industrial production, shown in Table B-l
and Chart 12, page 31, are more striking and more significant than comparisons of the full years 1953 and 1954. They reveal the pattern of contraction and recovery which characterized these two years. The drop in
total industrial production from July 1953 to March 1954 was half again
as large as the change indicated by yearly averages, and the declines in industry groups were generally higher. From March to August 1954, durable and nondurable goods manufacturing showed no change, while minerals
production continued to decline.
Industrial production as a whole registered a substantial recovery from
August to December 1954; all major categories and most component
industry groups shared in this advance. The expansion was strongest in
motor vehicles and primary metals; electrical machinery, textiles, and coal
also showed sizable gains. Though the output of clay, glass, and lumber
products and of rubber and leather products also rose sharply, these increases to a large extent reflected the settlement of strikes which had curtailed production in the lumber and rubber industries in July and August.




77

Construction activity
The construction industry was a major source of strength in our economy
during 1954. Total construction outlays—which closely reflect changes in
physical volume, since costs for most types of construction appear to have
changed very little—rose 5 percent from 1953 to 1954 (Table B-2). OutTABLE B-2.—New construction activity
1953

1954 1

Item
Millions of dollars

New construction' total
Private* total
Residential (nonfarm)
Other
Public: total
_
Federal
State and local*

Percentage
change
from 1953
to 1954 »

35,256

37,170

23,877
11,930
11,947

25,720
13,450
12,270

+5
+8
+13
+3

11,379
4,153
7,226

11,450
3,423
8,027

+U

+1

-18

1
Preliminary estimate.
'Includes Federal aid (Appendix Table D-30).
Sources: Department of Commerce and Department of Labor.

lays by State and local governments showed a substantial increase; highway, public school, and sewer and water facility construction surpassed
previous records. Federal outlays declined, mainly as a result of lower
expenditures for defense construction.
Private outlays for commercial, religious, and educational buildings increased sharply in 1954. Utility construction was about equal to the high
1953 rate, but industrial building declined.
Current-dollar outlays for residential construction were at an all-time
high in 1954, although the physical volume was below the peak of 1950.
New housing starts in 1954 are estimated at 1.2 million dwelling units, compared with 1.1 million in 1953 and a record 1.4 million in 1950.
The movement of residential construction within 1953 and 1954 is especially noteworthy (Chart 13, p. 32 and Appendix Table D-29). On a
seasonally adjusted basis, residential construction outlays declined slightly
during the second half of 1953; but from March to August 1954, when industrial production showed no over-all change, these outlays expanded 21
percent. Further gains were made in subsequent months.
Agricultural production
In the past year, farm output as a whole equaled the record level of 1953
(Chart B-2). The wheat and cotton crops, due to marketing quotas, were
respectively 17 and 18 percent smaller than in 1953. But since most of the
22 million acres taken out of wheat and cotton were used to expand production of feed and oilseeds, crop production as a whole declined only
3 percent (Appendix Table D-27).
Livestock production in 1954 was higher than in any previous year. Hog
numbers increased sharply as a result of plentiful feed supplies and the




CHART B-2

FARM PRODUCTION
INDEX, 1947-49 = 100

INDEX, 1947-49 = 100

120

120
LIVESTOCK

mm

/

100

^

^

^

^

V
o

80

i
1947 1 1948

<

^

"

mmmmmm

-

100

CROPS

80

1949 1 1950

1951

1952

1953

1954

SOURCE: DEPARTMENT OF AGRICULTURE.

favorable hog prices in late 1953 and early 1954. Output of poultry and
eggs also expanded. Cattle and calf slaughter and milk production set new
records in 1954. Milk production in the second half of the year, however,
was about the same as in the corresponding period of 1953.
The movement of farm products into domestic consumption and export
increased moderately from 1953 to 1954. One consequence was a sharp
reduction in additions to price-support stocks. Whereas in 1953 the inventories and outstanding loans of the Commodity Credit Corporation rose
by 3.2 billion dollars (equivalent in value to 9 percent of total farm output), the increase from November 30, 1953 to November 30, 1954 was
1.6 billion dollars (equivalent to less than 5 percent of farm output).
Although price-support stocks were at a record 6.9 billion dollars on
November 30, 1954, the production and utilization of farm products
appeared to be approaching a balance as the year drew to a close. Nearly
80 percent of the November stocks consisted of wheat, corn, cotton, and
cottonseed products (oil and linters). Net additions to price-support stocks
from the 1954 crops of wheat and cotton will be relatively small, and stocks
of corn are expected to decline. Dairy products accounted for 8 percent
of total price-support stocks in November, but purchases during the last
quarter of 1954 were substantially below the same quarter of 1953, and
sales and donations from stocks were much higher.




79

Transportation, trade, and services
Freight carloadings declined 12 percent from 1953 to 1954, reflecting
mainly lower activity in coal mining and durable manufactures. Data for
the first half of 1954 show a significant but smaller decline from a year
earlier in the freight handled by intercity trucking firms.
The flow of goods through retail channels was well maintained, largely
as a result of the high and increasing level of disposable income (Chart 14,
p. 33). Retail sales in 1954 appear to have equaled their 1953 total, a
stability which contrasts sharply with the decline of 7 percent in total
industrial production. Reductions in inventories occurred, especially in
consumer durable goods.
Production of electric power and natural gas increased from 1953 to
1954. Data on employment in the service industries suggest an expanded
flow of services to consumers in 1954. So, too, does a deflated series of
consumer expenditures on services, exclusive of housing (Table 1, p. 11).
CHANGES IN FINAL PURCHASES

The Nation's output may be considered as the sum of values added by
current activity at each level of production and distribution. If there
were no inventory changes, it could also be viewed as the total value of
goods sold and of services rendered to final users. In any year, however,
part of the Nation's output may be added to inventories, or final sales may
be sustained at a higher level than current output by depleting inventories.
The distinction between current output (the gross national product)
and final purchases is especially significant in interpreting changes from
1953 to 1954. Gross national product declined 7.8 billion dollars, or 2
percent, between the two years but final purchases declined 2.8 billion
dollars, or 1 percent. This difference represents the changes in inventories
in the two years, an increase of 1.5 billion dollars in 1953 and a decrease
of 3.6 billion dollars in 1954 (Chart 8, p. 28).
The major components of total final purchases are shown in Table B-3.
Purchases of goods and services by the Federal Government in 1954 were
about 10 billion dollars lower than in 1953, but those of State and local
governments increased. Gross private fixed investment (that is, the sum
of expenditures on new construction and producers' equipment) totaled
about the same as in 1953, and consumer expenditures rose by nearly
4 billion dollars. The increase in consumption expenditures was largely
accounted for by housing and other services; expenditures for durable goods
fell 700 million dollars, but expenditures on nondurable goods increased by
1.6 billion dollars over the prior year.
The quarterly data in Table B-3 and Chart 5, p. 26 show the 1954 recovery which is obscured by the yearly totals. From the second quarter
of 1953 to the first quarter of 1954, gross national product, measured at
seasonally adjusted annual rates, declined 14 billion dollars, or 4 percent.




8o

TABLE B-3.—Gross national product and its major components
[Billions of dollars]
Change * from—
Component

Gross national product: total
Change in business inventories
Final expenditures: total
Personal consumption expenditures
Durable goods
__.
Nondurable goods
Services Gross private fixed investment
New constructionResidential nonfarm
Other
Producers' durable equipment
Net foreign investment
Government purchases of goodi and
services 1
_ _
Federal •
National security
Other»
State and local

1953

1954 «

1953 to
1954 2

Second
First quarQuarter
ter 1954 to
1953 to
fourth
first quarquarter
ter 1954
1954 »

364.9

357.1

-7.8

-14.1

1.5

-3.6

-5.1

-9.6

363.4

360.6

-2.8

-4.5

230.1
29.7
118.9
81.4

234.0
29.0
120.5
84.5

+3.9

-.3
-2.3

49.9
25.5
11.9
13.6
24.4

49.7
27.6
13.4
14.3
22.1

-1.9

-.6

85.2
60.1
52.0
8.1
25.1

77.5
50.1
43.6
6.5
27.5

+l'.6
+3.1
-.2
+2.1

+2.7
-1.8

+.1
—.5
+.6

+5.2
+2.7
+2.5
+7.0
+2.1
+3.2
+1.8
+2.0
+3.1
+3.1

t.l

-1.9

.0
-1.1

-2.3

+2.2

+1.1

+1.3
-7.7
—10.0
-8.4
-1.5

-4.7
-7.2
-7.4

-7.6
-8.9
-6.3
-2.6

+2.4

+.2
+2.5

+1.3

1
Quarterly changes based on seasonally adjusted annual rates.
»Preliminary.
* Less Government sales.
NOTE.—Detail will not necessarily add to totals because of rounding,
ources: Department of Commerce and Council of Economic Advisers.

However, the decline in total final purchases during this period was very
much smaller—4.5 billion dollars, or about 1 percent. Though the contraction was mild, it was reflected in several of the broad categories of
final purchases. Expenditures for consumer nondurable goods declined
slightly, while outlays for consumer durables dropped 8 percent (Chart 15,
p. 34). However, consumer outlays for services and State and local
government expenditures increased during this period; and the balance
of foreign trade also shifted in a direction which tended to support domestic
production and income.
Consumer expenditures increased at an annual rate of about 7 billion
dollars from the first to the fourth quarter of 1954. Outlays for consumer
durables were 7 percent above the first quarter low, and outlays for nondurable goods and for services were higher by 3 percent and 2 percent,
respectively. The upsurge in residential construction has already been
noted. National security expenditures declined at an annual rate of about
6 billion dollars from the first quarter to the fourth, but the rate of decrease
slowed down materially toward the end of the year.
In the first three quarters of 1954, declines in national security outlays
were barely offset by increases in expenditures for all major categories of
civilian goods and services. In the last quarter, however, the expansionary




81

forces of the civilian economy prevailed: total final purchases rose 2 billion
dollars, and inventory liquidation declined as gross national product increased more than did final purchases.
CHANGES IN INCOME PAYMENTS

Income disbursements to individuals
Total personal income rose slightly from 1953 to 1954, despite the
decline in gross national product (Appendix Table D-10). The increase
was mostly in the fourth quarter of the year, reflecting the general expansion
in output and final purchases. Wage and salary payments declined about
2.5 billion dollars, but other labor income increased slightly and transfer
payments increased 2 billion dollars. Labor income and transfer payments
combined declined slightly from 1953.
Income of farm proprietors, exclusive of receipts from net reductions
of farm inventories, fell slightly in 1954, but the change was much smaller
than in either of the two preceding years (Appendix Table D-10).
Business and professional income also declined slightly, but was higher than
in any year prior to 1953. Rental and interest incomes continued their
rising trends, which have persisted for several years, and dividend payments
increased despite a decline in corporate profits after taxes.
As a percentage of personal income disbursements, which are higher
than total personal income by the amount of employee contributions for
social insurance, investment income increased slightly in 1954 (Table B-4).
TABLE

B-4.—Distribution of personal income disbursements
Percent of total personal income disbursements>

Personal
income
disbursements »
(billions
of dollars)

Year

Labor income and transfer
payments

Total

Investment income

PropriWage
etors'
and
Other Trans- income'
salary labor
fer
Total
dispayburse- income ments
ments »

Rents

Dividends Interest

1939

73.5

67.4

62.5

0.9

4.0

15.8

16.8

3.7

5.2

7.9

1946
1947
1948
1949

180.0
192.6
210.9
209.1

69.5
71.1
70.7
71.7

62.1
63.8
64.1
64.3

1.1
1.2
1.3
1.4

6.3
6.1
5.3
5.9

19.6
17.9
18.2
16.3

10.9
11.0
11.1
12.0

3.4
3.4
3.4
3.8

3.2
3.4
3.4
3.6

4.2
4.3
4.2
4.7

1950
1951
1952
1953

229.9
258.8
275.1
290.1

72.0
72.7
74.0
75.2

63.7
66.0
67.3
68.3

1.7
1.9
2.0
2.2

6.6
4.9
4.8
4.8

15.7
15.8
14.5
13.3

12.3
11.5
11.4
11.5

3.7
3.5
3.6
3.7

4.0
3.5
3.3
3.2

4.6
4.5
4.5
4.6

291.1

74.9

67.2

2.3

5.4

13.0

12.1

3.7

3.4

5.0

-

1954 *

-

-

1
Total personal income, as shown in Appendix Table D-10, plus employee contributions for social insur
ance; beginning with 1952, includes social insurance contributions of self-employed persons.
2
Includes employee contributions for social insurance.
»Beginning January 1952, includes contributions for self-employed for social insurance
< Preliminary estimates by Council of Economic Advisers.

NOTE.—Detail will not necessarily add to totals because of rounding.
Source: Based on Department of Commerce data (except as noted).




82

Such an increase occurred in 1948-49 and in other mild contractions. Rents
and interest together accounted for a larger share than in other postwar
years, but the dividend percentage was lower than in any year of the
period 1949-51. The income shares of both farm and business proprietors
in 1954—4.1 percent and 8.9 percent, respectively—were at postwar lows.
Wages and salaries accounted for 67.2 percent of personal income in 1954,
slightly below the percentage for 1952 and 1953 but higher than for other
postwar years.
Changes in disposable personal income
Although the disbursements of income to individuals increased very little
from 1953 to 1954, the amount available for spending or saving—disposable
personal income—increased 3.5 billion dollars. This result reflects, among
other developments, the fact that Federal taxes on personal income declined
by more than 3 billion dollars, or 10 percent, while State and local taxes and
employee contributions for social insurance increased by a much smaller
amount.
The percentage distribution of disposable personal income among expenditure categories is shown in Table B-5 for 1929, 1940, and the postwar
years. The percentage distribution changed only moderately from 1953
TABLE B-5.—Distribution of disposable personal income

Disposable
personal
income 1
(billions
of dollars)

Year

Nondurable goods
Total

Services

Durable
goods

Food 2

Clothing
and
shoes

Other

Housing

Personal
saving

Other

-_

..

..

__

11.1

23.5

11.3

10.6

13.8

24.8

5.0

94.5

10.2

22.0

9.8

17.1

12.3

23.1

5.5

159.2
169.0
187.6
188.2

.

95.0

76.1

1940

1950
1951 _
1952
1953.
1954*

Personal consumption expenditures

83.1

1929

1946
1947
1948
1949 .

Percent of total disposable personal income

92.1
97.6
94.7
96.0

10.0
12.2
11.8
12.5

25.4
27.0
26.3
25.9

11.5
11.1
10.5
9.8

16.2
17.0
15.9
15.7

8.5
9.1

7.9
2.4

10.3

20.5
21.2
20.8
21.6

206.1
226.1
236.9
250.1
253.6

94.1
92.2
92.2
92.0
92.3

13.9
12.0
11.3
11.9
11.4

24.7
25.8
25.9
25.2
25.2

9.0

15.0
14.6
14.6
14.4
14.6

10.4
10.3
10.8
11.1
11.6

21.2
20.7
21.1
21.5
21.8

5.9

8.7
8.5
7.9
7.7

9.4

5.3

4.0
7.8
7.8
8.0
7.7

» Total personal income, as shown in Appendix Table D-10, less personal taxes.
2 Includes alcoholic beverages.
3
Preliminary estimates by Council of Economic Advisers.
NOTE.—Detail will not necessarily add to totals because of rounding.
Sources: Department of Commerce and Council of Economic Advisers.

to 1954. The savings proportion declined a little as consumer spending
rose during the latter part of 1954. The percentage spent on housing in
1954 continued the upward trend of recent years, but the share spent for
durable goods declined. Outlays for nondurable goods showed little change
from 1953.




83

Corporate profits
Corporate profits before taxes declined sharply in the last quarter of
1953 but recovered a little in early 1954; in the first nine months of 1954,
they averaged 18 percent below the same months of 1953 (Appendix Table
D-49 and Chart 21, p. 40). The decline was sharpest in the durable goods
industries, in rail transportation, and in textiles. Before-tax profits in
nondurable manufactures as a group declined much less than in durable
manufactures, while profits in communications and public utilities actually
increased.
Corporate profits after taxes were lower in the first nine months of 1954
than in the corresponding period of the previous year by about 10 percent.
Corporate tax liabilities, on the other hand, appear to have been 24 percent
lower in January-September 1954 than in the same period of 1953, a decline
on an annual-rate basis of about 5.4 billion dollars.
Preliminary estimates for the fourth quarter of 1954 indicate a marked
recovery in corporate profits, both before and after taxes. The fourth quarter rise may bring after-tax profits for the full-year 1954 to within 3 percent,
or so, of 1953.
Dividend payments in each quarter of 1954 were up from the previous
year, despite the moderate decline in after-tax profits. Correspondingly,
undistributed profits were down about 10 percent in 1954 from the preceding
year. At an annual rate of 8.0 billion dollars, they were about equal to
the 1946 level, and lower than in any other year since 1946.
ADDENDUM: ALTERNATIVE MEASURES OF THE NATION'S
TOTAL OUTPUT

Although national income statistics in the United States have reached a
high level of usefulness, data on some sectors of the economy are far from
perfect. Major changes in the Nation's output are registered with sufficient
accuracy for most purposes, but small changes, such as those from 1948 to
1949 or from 1953 to 1954, defy accurate measurement at present. Indeed,
the errors of estimation are sometimes of the same order of magnitude as the
observed changes. While this is particularly true of estimates based on
preliminary data, some uncertainty attaches also to the final figures.
Throughout this Report, the discussion of changes in the gross national product has been based on the figures that are conventionally
designated in statistical reports by that name. In fact, however, two estimates of the gross national product are available. Since they are based on
largely independent data, a rough check is possible on the accuracy with
which changes in the gross national product are now measurable. The
difference between these two estimates, the "statistical discrepancy," is
regularly included in the national income accounts prepared by the Department of Commerce. Essentially, it is the difference between gross national




product as estimated, first, from information on expenditures for goods
and services and, second, from data on incomes and other production costs.
The difference between the two often changes by a billion dollars or less
from one year to the next, or from one quarter to another. But occasionally it changes by as much as 3 or 4 billion dollars. Year-to-year
changes of such size occurred in 1943-44, 1945-46, and 1947-48. According to preliminary data, the statistical discrepancy changed by an even
larger amount from 1953 to 1954. Quarterly changes of large magnitude
appeared during 1948-49 and 1953-54.
Economists conventionally use the gross national product estimates based
on expenditure data; to avoid confusion, this practice has also been followed
throughout this Report. On the basis of existing knowledge, it is impossible to say whether the estimate of gross national product based on expenditure data is more or less accurate than the estimate based on income data.
Some implications of these alternative measures of the Nation's output
may be gathered from Table B-6. Based on the expenditure data, the
T A B L E B-6.—Alternative measures of the Nation's total output
[Billions of dollars, seasonally adjusted annual rates]

Period

Gross national product or expenditure l

Charges
against gross Statistical
national
discrepancy
product *

1948: First quarter
Second quarter..
Third quarter...
Fourth quarter..

247.9
255.5
261.9
264.0

248.8
258.9
263.6

1949: First quarter....
Second quarter..
Third quarter...
Fourth quarter..

259.9
257.2
256.5
255.5

258.3
257.2
253.5

1953: First quarter
Second quarter..
Third quarter. _.
Fourth quarter-

361.8
369.9
367.2
360.5

363.0
367.3
365.1
359.9

+2.6
+2.1
+.6

1954: First quarter....
Second quarterThird quarter-_.

355.8
356.0
355.5

358.8
359.8
359.9

-3.0
-3.8
-4.4

Change from fourth quarter of 1948 to fourth quarter of 1949..

-8.5

-12.6

+4.0

Change from second quarter of 1953 to third quarter ofJ1954_

-14.4

-7.4

-7.0

-0.9
-3.4
-1.7
-2.0

-1.2

i Estimates based mainly on expenditure data.
s Estimates based on income and non-income charges against production.
Source: Department of Commerce.

gross national product in 1954 appears to have been 2 percent below
1953. Based on income data, however, the decline appears to be only
1 percent. According to the quarterly expenditure estimates, the 1948-49
decline in total output was smaller than that of 1953-54. But the estimates
based on income data suggest precisely the opposite. The conclusion must
be drawn that the available measures of total output are not sufficiently
accurate to determine decisively which of the two contractions was greater.




II. Employment and Earnings
Employment, which fell from the summer of 1953 to the summer of
1954, rose again in the last part of 1954, and unemployment declined much
more than seasonally in the last three months of 1954. A reduction in'
average hours worked per week, due in large part to the decline of overtime, was reversed in May. The continued rise in average hourly earnings,
which occurred despite the fall in employment, was a striking feature of
recent developments in employment and earnings. Also noteworthy was
the small amount of time lost in industrial disputes in 1954—the smallest
since World War II.
EMPLOYMENT

According to statistics compiled by the Bureau of Labor Statistics, nonagricultural employment began to fall after July 1953 (Appendix Table D-22
and Chart 9, p. 28). Its decline accelerated in the late autumn and early
winter, and continued at a less rapid rate in the spring and summer of 1954.
At its low point in August 1954, nonagricultural employment was 1,960,000
below the peak reached 13 months previously. It then began to rise, but
in December it was still below the levels of mid-1953.
The decline in the number of persons employed in nonagricultural
industries may well be somewhat overstated by the Bureau of Labor Statistics series, which is based on business payroll records. This series counts
twice a person who appears on two payrolls during the same payroll period,
either because he has changed jobs during the period or because he holds
two jobs at the same time. Dual jobholding probably tends to decline
during a contraction in business activity, and labor turnover was definitely
lower in the summer of 1954 than in the summer of 1953. These changes
would cause a larger decrease in the number of persons on payrolls than
in the number of individuals employed in any one week.
Nonagricultural employment is also estimated by the Bureau of the
Census (Appendix Table D-16 and Chart 10, p. 29). Its series, unlike
that of the Bureau of Labor Statistics, includes the self-employed, unpaid
family workers, and domestic servants. Because of this difference in coverage and some differences in concepts and method, the Census series,
which is based on a household sample survey, shows a somewhat different
movement than that shown by the series based on payroll records. The first
suggestion of contraction came earlier in the Census series, which showed a
slightly less than seasonal rise in the spring of 1953. However, most of the
decline in this series, seasonally adjusted, took place after July 1953. The
adjusted series dropped 1,600,000 from July 1953 to its low point in August
1954. From August to December 1954, the rise was about 400,000.
Like all data derived from sample surveys, the Census data are subject to
some error because the experience of the persons in a sample may differ to
some extent from the experience of the population as a whole. Further,




86

the information given to interviewers may occasionally be inaccurate. The
data of the Bureau of Labor Statistics are also not based on a full count
of the employed; they too involve some estimation. These factors, as well
as differences in concept and coverage, presumably contribute to the differences in the movement of employment shown by the two series.
The decline in seasonally adjusted employment in nonagricultural establishments, as reported by the Bureau of Labor Statistics, occurred principally
in manufacturing (Table B-7). Between July 1953 and August 1954, emT A B L E B—7.—Changes in nonagricultural employment by industry

[Thousands of persons, seasonally adjusted data]
Change from
Industry

August 1954
July 1953 to March 1954 to to December
March 1954 August 1954
19541

Nonagricultural employment: Total
Mining
_
_
Contract construction
Manufacturing
Durable goods industries: Total
_„
_
Ordnance and accessories
_
_
Lumber and wood products (except furniture)
Furniture and fixtures
_
Stone, clay, and glass products
Primary metal industries
Fabricated metal products (except ordnance,
machinery, and transportation equipment)
Machinery (except electrical)
Electrical machinery
___
_
Transportation equipment
Instruments
,.
Miscellaneous manufacturing
Nondurable goods industries: Total
Food and kindred products.Tobacco manufactures
..Textile-mill products
Apparel and otherfinishedtextile products
Paper and allied products
Printing, publishing, and allied industries
Chemicals and allied products
Products of petroleum and coal
Rubber products
Leather and leather products
Transportation and public utilities: Total
Transportation
Communication
Other public utilitie"s-_"-..I
Wholesale and retail trade._

--.

Federal
State and local

-496

-72

-42

-21

+43

-14

-38

__.
_
_._

+404

-1,245

-529

+310

-943

-454

+269

-56
-51
-42
-37
-159

-40
-74

-4
+121

-123
-128
-131
-157
-19
-40

-19
-69
-22
-172
-19
—11

-4
-37
+14
+147

-302

-75

+41

-21
-4
-136
-57
-16

-30
0

it

-34

-16

+14
-27
-9
-28
-18

-239
-236
-6

+5
+3

-36

+16

tl
-8

-2
-24
—1
-11

+1
+8
+15

+1
+7

+

1\

+6
+3
-2

+30
+7
-23

-4
-9

-24

-48

+44

+28
+63

+30

-36

+46

+57

+123

-86
+132

-

Finance, insurance, and real estate
Service and miscellaneous
Government: Total

-1,464

+96

+3
+8

+31

_.

_
_
_

._-

+2

-39

+1

0

-21

-2

+125

1

Based on preliminary data for December.
Sources: Department of Labor and Board of Governors of the Federal Reserve System.

ployment also fell in other sectors—transportation, Federal Government,
mining, and trade. Seasonally adjusted employment increased over this




87

period in State and local government; in finance, insurance, and real estate;
and in service and miscellaneous industries. Within manufacturing, employment declined in every major industry group except printing, publishing,
and allied industries.
From August 1954 to December 1954, seasonally adjusted employment
rose in 15 of 21 manufacturing industry groups. The largest increases occurred in transportation equipment and in lumber and wood products.
The large output of new-model automobiles in November and December
was the principal cause of increased employment in transportation equipment. In lumber and wood products, employment recovered almost to
mid-1953 levels, following a strike in the summer of 1954.
Agricultural employment, which has long been declining, fell more slowly
during most of 1954. This suggests that reduced opportunities for nonfarm
employment retarded migration away from farms, or that fewer farm residents than usual shifted from farm to nonfarm work in their own areas during the off-season, or both.
UNEMPLOYMENT

During the first half of 1953, unemployment, as estimated by the Bureau
of the Census, continued to decline and reached a level lower than that of
any corresponding period since World War II (Appendix Table D-16
and Chart 10, p. 29). The month-to-month movement of unemployment
during the late summer and autumn of 1953, on the other hand, is somewhat obscure. The Census was then preparing to shift from its old sample
of households in 68 areas to a new sample of households in 230 areas.
During this period of preparation, less attention than usual was devoted to
the training and supervising of interviewers working on the old sample, and
this seems to have resulted in an underestimate of the number unemployed
and of the size of the labor force. The unemployment figures originally
published were later revised upward by the Census Bureau to reflect the
higher level of unemployment shown by the 230-area sample for January
1954, as well as the increase in unemployment insurance claims. The revised data, though admittedly somewhat arbitrary, appear to be more accurate.
It is nevertheless clear that unemployment rose rather substantially between August 1953 and March 1954. The rise was due in part to the
usual curtailment of outdoor employment in the winter months, but the
greater part was the result of contraction in business activity. This rise in
unemployment was more rapid, though less prolonged, than that which
occurred in 1949. The peak of 3,725,000 (5.8 percent of the civilian labor
force) reached in March 1954 was 959,000 lower than the peak of 4,684,000
(7.6 percent of the civilian labor force) reached in February 1950.
During the spring and summer of 1954, unemployment declined, following the usual seasonal pattern, except that the number of young workers
reported as seeking work rose less than is usual in June and July. After




88

September, the decline in unemployment was clearly more than seasonal;
in October, unemployment fell below 3 million for the first time in the year.
Thereafter the usual seasonal rise did not occur; the December figure of
2,838,000 was only slightly above the October level.
It is important to recognize that the unemployed are not all the same
individuals month after month; the turnover among them is substantial.
During the first eleven months of 1954, of those unemployed in a given
month, roughly one-third, on the average, had found employment the following month, and roughly 15 percent had left the labor force to return to
school or to resume full-time household duties.
It should also be noted that some unemployment exists even when the
demand for labor is strongest. The reason is that at all times there are
some people in the process of changing from one job to another. Also, at
all times a considerable number of jobs are vacant because the right persons have not yet been found to fill them. It would be helpful to have
adequate statistics on the total number of job vacancies in the economy.
The Bureau of Employment Security also compiles statistics on unemployment. Its figures on insured unemployment and initial claims for
unemployment insurance exhibit the same general movement of unemployment that has already been described (Appendix Table D-20).
Insured unemployment was unusually low during the first nine months of
1953, dropping to a weekly average of 830,000 in September. For the next
six months, the rise was much more than seasonal; the weekly average in
March 1954 was 2,389,000. Seasonal reductions occurred from April
through September, but in the last part of the year the rise in insured unemployment was smaller and occurred later than usual, as the normal curtailment of outdoor employment was offset by gains elsewhere, particularly
in durable goods manufacturing. The monthly averages of insured unemployment for November and December 1954 were 1,643,000 and 1,869,000,
respectively, but initial claims for unemployment insurance in these months
were below the levels of a year earlier. The statistics of insured unemployment probably understate somewhat the amount of unemployment among
workers covered by insurance programs because they do not include those
who have exhausted benefit rights and still remain unemployed.
The impact of unemployment has been very uneven geographically. Insured unemployment under State programs during 1954 was 5.2 percent of
covered employment for the continental United States. However, in six
States it was less than 3 percent, and in nine it was 7 percent or over
(Chart B-3).
The principal cause of unemployment in those States in which unemployment rates were highest was depressed conditions in the coal, textile, shoe,
or apparel industries. Unemployment rates in most leading durable-goods
producing States were close to the national average, although they had
been well below the national average in 1952 and 1953.
In some areas, the impact of unemployment was greater than is indicated by State averages. The problems of the communities where unem-







CHART B-3

UNEMPLOYMENT RATES, 1954

NOTE: Average week?/ Stole insured unemployment, cofendar year 1954, as
o percent of overoge monthly covered employment for the 12 months
ended June 30,1954. Preliminary dofo.

NATIONAL AVERAGE: 5.2 PERCENT
SOURCE: DEPARTMENT OF LABOR

ployment rates were highest did not arise solely from the recent contraction
in general business activity. They were often related to long-run declines
in demand for particular products, to changes in technology, or to shifts
in the location of production. Among the areas experiencing considerable unemployment for such reasons were Lawrence, Massachusetts;
Altoona, Johnstown, Scranton, and Wilkes-Barre, Pennsylvania; Providence, Rhode Island; and Charleston, West Virginia.
The severity of unemployment depends not only on how many are
involuntarily idle, but also on how long their idleness lasts. As the total
number of unemployed rises, the number unemployed for long periods
rises more than proportionally. Those unemployed 15 weeks and over,
as reported by the Census, numbered 150,000 in August 1953. This group
reached a peak of 1,047,000 in April and May of 1954, and then fell
gradually to 707,000 in December. The number unemployed more than
26 weeks reached a maximum of 400,000 in August 1954, and was reduced
to 376,000 by December. The number in this group remained lower
throughout 1954 than it had been in the first half of 1950, when it reached
481,000 persons at its high point.
As extended unemployment rises, so does the number of the insured unemployed who exhaust their benefit rights. Not all such persons remain
unemployed, however; many soon find employment and others leave the
labor force. For the continental United States, the number of persons
reported by the Bureau of Employment Security as exhausting benefit
rights was approximately 50,000 a month from August to October of 1953.
This number rose rapidly from December 1953 to April 1954, when it
reached 156,000, and then increased gradually to 171,000 in August. Beginning in September the number of exhaustions began to decline, and by
November it had dropped to 141,000. The number of exhaustions in the
first eleven months of 1954 was 1,610,000. The proportion of insured
unemployed who exhausted benefit rights tended to be highest in the States
whose laws provided benefits of shortest duration.
The exhaustion of unemployment insurance benefits and the increased
difficulty experienced by marginal workers in finding jobs caused some rise
in the number of persons aided under State and local general assistance
programs (Table B-8).
T A B L E B—8.—Number of persons receiving general assistance
[Thousands of persons]

Month
January...
February..
March
April
May
June

1953

630
620
610
580
530
510

1954

730
780
820
790
730
710

Increase
from 1953
to 1954

100
160
210
210
200
200

Month
July
August
September..
October
November..
December..

Source: Department of Health, Education, and Welfare.




91

1953

490
480
480
480
510
620

1954

700
720
740
740
770

Increase
from 1953
to 1954
210
240
260
260
260

There was also an increase in partial unemployment early in 1954.
Workers ordinarily employed full time who worked less than 35 hours a
week on all jobs because of economic factors may be regarded as "partially
unemployed." The number of such persons in nonagricultural industries
apparently reached a peak in March 1954 and thereafter declined substantially (Table B-9). The concept has less significance for agriculture,
where the series has moved irregularly because of seasonal changes. The
number partially unemployed in November 1954 was about the same as in
December 1953.
TABLE B-9.—Partial unemployment of usual full-time workers
[Thousands of persons, 14 years of age and overj
Persons who usually work full time at their
present jobs who were working part
t i m e l because of economic factors*
Area sample and month
Total
68-area sample:
1952: November..
1953: December

1,542

230-area sample:
1954: March
May
August
November..

In agriculture

1,878
1,644
1,861
1,506

In nonagricultural
industries

122
284

704
1,258

166

1,712
1,548
1,451
1,285

410
221

* Less than 35 hours In the survey week.
2 These factors include slack work, job turnover, materials shortages, and repairs to plant and equipment
Source: Department of Commerce.

The increase in unemployment from 1953 to 1954 was also accompanied
by an increase in the number of persons temporarily laid off (with instructions to report back to work within 30 days) and not seeking other work
while awaiting recall. By long-standing practice, these persons are not
classified as unemployed. Temporary layoffs began to rise in late 1953,
and were over 400,000 in January 1954. From February through July,
they varied between 200,000 and 300,000, more than 100,000 above the
levels of the preceding year. In late 1954, temporary layoffs fell again to a
low level (Appendix Table D-18).
AVERAGE HOURS WORKED PER WEEK

The average number of hours worked per week in manufacturing is
usually an early indicator of changes in business activity, because adjustments in hours can be made more quickly and easily than adjustments in
employment. Average weekly hours of production workers in manufacturing, which had been 41.7 in December 1952, began to fall in the first
months of 1953 (Table B-10, Appendix Table D-23, and Chart 20, p. 39).
By early 1954, the average was below 40 hours, and in April it reached the




T A B U S B-10.—Average weekly hours of work* in selected industries

Industry

April 1953

April 1954

Latest data
available

All manufacturing

40.8

39.0

140.5

Durable goods Industries
Nondurable goods industries.
Bituminous coal mining
Metal mining
Building construction
Retail trade
Wholesale trade.
Class I railroads
_
_.
Gas and electric utilities

41.7
39.5

39.7
38.1

32.1
43.2
36.9
39.1
40.3
41.3
41.1

28.9
39.8
36.5
39.1
40.2
41.1
41.0

141.1
139.8
*35.4
*40.5
«36.1
»38.8
*40.5
»40.4
»41.3

i December 1954.
* November 1954.
> October 1954.
Source: Department of Labor.

low point of 39.0, somewhat above the low point of 38.4 reached in April
1949. Recovery also began early. After April 1954 the workweek rose
more than seasonally, reaching 40.5 hours in December.
The decline in hours between 1953 and 1954 was largest in durable goods
industries, where it reflected primarily the decline of overtime. But by
December 1954 the workweek in these industries was again at a level indicating considerable overtime work.
Among nonmanufacturing industries, metal mining and bituminous coal
mining showed the sharpest declines in average hours worked. Hours in
bituminous coal mining recovered seasonally late in 1954. In the principal industries other than manufacturing and mining, the changes in the
workweek from April 1953 to April 1954 were slight.
WAGE RATES AND EARNINGS

Average hourly earnings of production workers in all manufacturing industries moved upward moderately after mid-1953. The December 1954
level of $1.83 was 6 cents above that of July 1953 and 3 cents above that
of December 1953 (Appendix Table D-24 and Chart 20, p. 39). During
the economic contraction from November 1948 to November 1949, this
series did not rise. As a result of the increase in hourly earnings and the
recovery in hours of work, weekly earnings by late 1954 were above their
mid-1953 levels (Appendix Table D-25). From a July 1953 level of
$71.33, weekly earnings rose to $72.36 in December, but they fell to $70.20
by April 1954 as a result of shorter hours. They subsequently rose to the
new all-time high of $74.12 in December 1954.
Outside manufacturing, hourly earnings toward the end of 1954 were also
above the levels of mid-1953, except in mining, where there was virtually
no change. Average hourly earnings in building construction rose 15 cents
from July 1953 to November 1954; in retail trade they rose 5 cents. Average hourly earnings in Class I Railroads rose 8 cents from July 1953 to
October 1954.




93

Within manufacturing, the rise in average hourly earnings for most major
industry groups was larger than that of the all-manufacturing average.
The latter was held down because employment contracted more in highwage than in low-wage industries. In durable goods manufacturing, where
the average rose 3 cents from July 1953 to July 1954, the rise was 4 cents or
more in nine of eleven major industry groups, and 5 cents or more in four
of them. Within many individual manufacturing industries, wage rates
rose more than average hourly earnings, which were held down by reductions in overtime work at premium rates.
During 1954, a large proportion of the general wage increases negotiated
in collective bargaining amounted to 5 cents an hour or slightly more, often
accompanied by some improvements in pensions, insurance plans, or other
fringe benefits. There was some tendency during the year to improve or
preserve the relative earnings position of skilled workers by means of special
wage increases or general percentage increases. Many workers in the basic
steel, aluminum, aircraft, electrical machinery, shipbuilding, steel fabricating, meat packing, rubber, pulp and paper, and telephone industries,
among others, received wage increases in 1954.
In addition to the wage increases that were negotiated, increases of 5
cents an hour were received by workers in the automobile industry and
by some workers in the aircraft and farm machinery industries under the
terms of the "annual improvement factor" clauses of prior long-term
agreements. Since the consumer price index declined slightly during
1954, wages decreased 2 cents an hour under the "escalator clauses" of these
agreements, leaving a net gain in money wages of 3 cents an hour. A number of escalator clauses were discontinued during the past year. The wages
of approximately 2 million workers are now linked to the consumer price
index, one and a quarter million fewer than a year ago.
Where firms or industries have experienced persistent difficulties, unions
have in some instances foregone wage increases or accepted decreases. Since
mid-1953, major contract settlements without wage increases have been
made in the textile dyeing and finishing, footwear, and pottery industries,
and agreements in coal mining have not been reopened. In the full-fashioned hosiery industry, employer contributions to pension funds have been
discontinued. In the wool textile industry in the North, wage cuts of 7
cents an hour and up were accepted by unions after arbitration or after
strikes. Workers of two automobile firms voted to discontinue incentive
wage systems that had kept earnings on some jobs substantially above earnings for comparable work elsewhere.
INDUSTRIAL DISPUTES

The time lost in industrial disputes during 1954 and the number of
workers involved were at the lowest levels since World War II. During
the year, 3,450 work stoppages involving 1,500,000 workers were reported




94

by the Bureau of Labor Statistics, compared with 5,091 stoppages involving 2,400,000 workers in 1953. The workers involved in these disputes
were idle 22,000,000 man-days in 1954, compared with 28,300,000 in 1953.
These figures are 0.20 and 0.26 percent, respectively, of estimated working
time.

III. Price Changes
PRICE STABILITY DURING

1953-54

The apparent stability of prices in the face of falling manufacturing and
mining activity was one of the striking features of the recent contraction.
Since mid-1953, the indexes of wholesale and consumer prices have fluctuated narrowly around horizontal trends, although the latter index, for
technical reasons, may have failed to reveal fully the downward adjustments
in the terms of purchase of durable consumer goods (Chart 24, p. 41 and
Table B-l 1). Because of the over-all stability of prices, the inventory adjustments during 1953-54 were not aggravated by adverse expectations
concerning prices such as often tend to develop when economic activity
declines.
TABLE B-l 1.—Changes in prices
Percentage change i from—
Group
1953 to 1954

Wholesale prices: All commodities..

+.2

Farm products
Processed foods
Other than farm products and foods.
Consumer prices: All items

-1.3

t\

2

+.4

Second quarter First quarter
1954 to
1953 to
fourth quarter
first quarter
1954
1954

+.9
+1.2
+1.7
+.7
+.8

-.8
-6.0
-1.7

+.3
-.3

1 Change based on index (1947-49=100) for each group.
Indexes for 1954 based on data through November.
Source: Department of Labor.

J

The primary factor making for price stability was the high and well maintained level of final demand during the past year and a half, as industrial
activity first declined and then entered a new phase of expansion toward
the end of the period. A number of independent influences also strengthened prices in primary markets and lent indirect support to prices of final
products. These included government stockpiling and price-support programs, and the vigorous economic expansion in Western Europe. The
downward post-Korean adjustments in prices of industrial materials, which
had occurred prior to the contraction of 1953-54, also left their mark on the
behavior of prices during the contraction.




95

WHOLESALE PRICES

Industrial prices and their interrelations
Industrial prices were stable on the average during the contraction partly
because they had fallen during the preceding two years (Chart 25, p. 42).
The drop that occurred in the prices of raw and semi-processed industrial
materials between early 1951 and early 1953 is especially noteworthy (Chart
26, p. 42). Wide swings in these prices are normal during business cycles,
because current and anticipated changes in the demand for final products
are magnified in primary markets through inventory adjustments at the various stages of production and distribution. The unusual feature of recent
experience, however, is that the downward adjustment in prices of industrial
materials, which usually occurs during even a mild decline in business activity, had been virtually completed before the contraction began. This was
particularly true in nondurable goods manufacturing, where prices of both
materials and finished goods had declined sharply during 1951 and 1952,
after the forward buying of the early months of the Korean conflict had run
its course. In contrast, the prices of many durable materials and goods,
which are usually more stable than those of nondurables and which were
strongly influenced by defense production, leveled off or rose gradually during 1951-52, and then moved up slightly after price controls were removed
early in 1953. Prices of most finished durable goods and some materials
held steady during the subsequent contraction and recovery, but prices of
most metals dropped between the summer of 1953 and the early months of
1954 before rising through the remainder of the year to levels approximating
those of mid-1953.
Raw materials
The long decline in the prices of basic raw materials was arrested late
in 1953, and the index began to rise early in 1954 (Chart 26, p. 42). The
expansion of Western European production was partly responsible for this
upturn. Rising foreign demand helped to increase the prices of nonferrous
metals and natural rubber, and to cushion the decline in wool prices.
Domestic factors were more important, however. The new long-range
stockpile programs of the Federal Government called for larger quantities
of some nonferrous metals. Domestic consumption of natural rubber
increased after its price declined relative to synthetic rubber during 1953
and the early months of 1954. Finally, the contraction in manufacturing
which began in mid-1953 came to a halt after the first quarter of 1954,
as the production of major household durable goods and most nondurable
manufactures recovered from winter lows. All these developments combined to lift the index of prices of raw industrial materials during the
first half of 1954, and further gains were recorded after August when
the increase of durable goods production increased the demand for materials. By the fourth quarter, the index of raw industrial material prices
was 8 percent above its first quarter level. The indexes of prices of semi-




96

processed industrial materials and of finished goods remained stable as raw
material prices advanced during the first six months of 1954, but they too
rose moderately toward the end of the year.
Farm products and foods
Prices of farm products at central markets fluctuated more widely than
prices of industrial commodities during 1953-54, and by the fourth quarter
of 1954 they were down 5 percent from the second quarter of 1953 (Chart
25, p. 42 and Table B-l 1). In general, this behavior represents a prolongation of the downward movement that began in 1951, as a consequence of
approximately stable over-all demand combined with enlarged supplies of
agricultural products. The average annual decline in the index of prices of
farm products has been as follows: for 1951-52, 5.6 percent; for 1952-53,
9.3 percent; and for 1953-54, 1.3 percent.
In the aggregate, prices received by farmers at local markets followed a
similar course, but there were striking differences among the various
commodity groups. Smaller production of wheat, cotton, and corn caused
market prices to increase relative to support levels during 1954, but prices
of livestock and their products declined substantially. Thus, in the last
quarter of 1954, crop prices averaged 4 percent higher than in the fourth
quarter of 1953, while prices of meat animals were down 4 percent, prices
of dairy products 7 percent, and poultry and egg prices 31 percent. These
diverse trends combined to cause a decline in the index of prices received by
farmers, and the parity ratio (the ratio of prices received by farmers to prices
paid by them) averaged 87 in the last quarter of 1954 (Chart B-4).
Prices of processed foods fluctuated along with prices of farm products,
but around a horizontal rather than a declining trend (Chart 25, p. 42
and Table B-l 1). Processed food prices tend to be less flexible than farm
prices, partly because of additional costs incurred in processing. Wages,
an important part of these added costs, continued to increase slightly.
CONSUMER PRICES

The over-all stability of the consumer price index during the contraction
conceals offsetting movements in the prices of commodities and those of
services (Chart B-5). Also, as observed previously, the index of consumer
prices probably does not reflect fully the more favorable terms of purchase of
durable goods. By the fourth quarter of 1954, retail commodity prices had
declined 2.2 percent from their peak in the third quarter of 1953, but rents
had increased 2.5 percent and the index of prices of other services (which
includes public utilities and public transportation, as well as personal
services) had risen 2.3 percent over the same interval. In general, retail
commodity prices have drifted slightly and irregularly downward since
1951, while service prices have increased steadily. These divergent trends
produced a slight upward tilt in the consumer price index during 1952




97

CHART B-4

PRICES RECEIVED A N D PAID BY FARMERS
INDEX, 1910-14 = 100

INDEX, 1910-14*100

325

325
PRICES RECEIVED

300

300

275

275

(PRICES PAID, INTEREST, TAXES,
AND WAGE RATES)

250

225

I I I I I I I I 1 I I

1 1 1 I I I I I I I I

250

i i I i I1 Iri i i

t i i i I i i ii i

i i i i i 1 i i i i i 225

125

125
•

•PARITY RATION

100

100

I 1 1 1 ! 1 I 1 |I

!

1 I I 1 1 1 M 1 I I

_L1^1 J 1 i I J J l

i i i t i 1 I i i i i

1951

1952

1953

1950

i i i i ! i i i i i

75

1954

J / RATIO OF INDEX OF PRICES RECEIVED TO PARITY INDEX
SOURCE: DEPARTMENT OF AGRICULTURE.

CHART B-5

CONSUMER PRICES O N A POSTWAR!BASE
INDEX ,

INDEX, 1947-49 *IOO

1947-49 = 100

130

1 3 0

SERVICES
EXCLUDING RENT
1 2 0

120

110

110
r
^ ^ C O M f l 40DITIES

100

\

iiiiilinii

90

1947

1948

1949

SOURCE: DEPARTMENT OF LABOR.




100

y
1950

1951

IMIIIMIM

1952

1953

90

1954

and most of 1953; after the contraction got under way, service prices rose
more slowly, and the over-all index leveled off (Chart 24, p. 41).
Substantial declines in the prices of new automobiles, tires, and household durable goods during 1954 were mainly responsible for a fall of 2.8
percent in the index of prices for transportation goods and services and of
2.5 percent for housefurnishings between the fourth quarters of 1953 and
1954. Consumers benefited from reductions in excise taxes on many durable goods in April, and subsequent price reductions occurred as department stores and other retailers moved to meet the competition of discount
houses. New car prices dropped in the fall of 1954, preceding introduction of the 1955 models, but the transportation price index rose 2.1 percent
in November as dealers discontinued or reduced price concessions with the
introduction of the new models. The prices of most nondurable commodities changed very little during the year. Apparel prices declined 0.9
percent, and the prices of foods sold for home consumption 1.7 percent,
between October-November of 1953 and the corresponding period in 1954.
Prices of many services are regulated by public authority, by contract, or
by custom, and they are still adjusting to postwar conditions of demand.
Although they have risen relatively more than commodity prices since 1947
(Chart B-5), they have risen less from their prewar levels (Chart B-6).
The rising trend of service prices during the recent past has reflected sustained demand for services and, from a longer point of view, a growth in
the supply of services that has lagged behind a steadily increasing demand.
CHART B-6

CONSUMER PRICES O N A PREWAR BASE
INDEX, 1939 = 100
220

INOEX, 1939s 100

1 220

200

200
COMMODITIES
180

180

160

160

140

140

120

120

100

100
I

1

I

1940

I

I

I

1

1950

1945

SOURCE: DEPARTMENT OF LABOR.




I

99

1954

IV. Monetary and Credit Developments
Some of the most significant economic developments of 1954 took place
in the credit and financial markets. Perhaps the most important was the
net increase of 10.2 billion dollars in the loans and investments of the commercial banking system (Appendix Table D-43 and Chart 28, p. 44). This
expansion of commercial bank assets was accompanied by, and to a considerable extent facilitated, increased flows of funds from financial institutions into public and private construction, which served importantly to
sustain economic activity over the year. The process was facilitated by
Federal Reserve actions and by the policies pursued by the Treasury in
its management of the Federal debt.
EXPANSION IN BANK LOANS AND INVESTMENTS

More than half of the over-all expansion in bank loans and investments
was in holdings of United States Government securities. These increased
by about 6 billion dollars, the increase being predominantly in intermediate
and long-term securities. Bank holdings of State and local government
securities and of corporate securities combined also increased, in their case
by 1.6 billion dollars. The increase of 2.6 billion dollars in total loans
clearly was not due to commercial and industrial loans; despite an increase
in the second half of the year, these loans were still lower at the year-end
than they had been at the end of 1953. The increases in the total were
in large part the result of increases in real estate loans, in loans to brokers
and dealers and to others for purchasing and carrying securities, and to a
minor degree in agricultural loans. Loans to consumers were slightly
reduced.
These facts reflect the broad economic profile of the year. The movement of commercial and industrial loans was due in large part to the
slackening and subsequent recovery of activity in industry and trade. The
increased holdings of State and local government securities and of loans
secured by real estate represent the accommodation by the banking system
of increased demands for credit from these consistently buoyant sectors of
the economy. And the moderate increase in security loans is associated
with the rise of stock prices and the year's heavy volume of underwriting
activities. Had not commercial banks absorbed during the year about
6 billion dollars of Federal securities, the supply of money would have grown
less rapidly, and economic events during the year might have been very
different.
Despite absorption of large amounts of Federal securities by the commercial banking system, the total amount of Federal debt in the hands
of the public, including the commercial banks and the Federal Reserve
Banks, increased by only 2.3 billion dollars during 1954. There was,
therefore, some redistribution of the publicly held Federal debt among
various types of holders (Table B-12 and Appendix Table D-46).




ioo

The largest net reduction in holdings of Federal securities was by "other
corporations" (primarily nonfinancial businesses). Individuals, including
partnerships and personal trusts, reduced their holdings substantially, and
appreciable amounts were sold on balance by insurance companies and
mutual savings banks. State and local governments were large net buyers
of Federal securities. An important aspect of these shifts is that the expansion of commercial bank credit made funds available to insurance companies
and mutual savings banks for investment, over and above their receipts
from new savings and from repayments of outstanding loans and investments. These funds were employed to a considerable extent in financing
an expanding volume of residential construction, State and municipal works,
and a continuing increase in outstanding corporate obligations.
TABLE B-12.—Net changes in the ownership of the publicly held Federal debt,
December 31, 1953 to December 31y 1954
[Par value, billions of dollars]
Ownership distribution
Net change
December 31, December 31, in ownership
1953
19541

Investor group

Debt held by the public: TotalCommercial banks
Federal Reserve Banks
Insurance companies._
Mutual savings banks
Other corporations._.
State and local governments.
IndividualsMiscellaneous investors

+2.3
+5.8

229.2
69.5
24.9
14.9
8.8
19.3
14.6
63.7
13.5

226.9
63.7
25.9
15.8
9.2
21.5
12.9
65.0
12.9

-1.0
-.9
-.4

-2.2

+1.7
-1.3
+.6

iPreliminary.
Sources: Treasury Department and Council of Economic Advisers.
MONEY SUPPLY

Rising bank holdings of loans and securities were crucial determinants
of changes in the money supply during 1954, although other factors also
had a bearing (Table B-13 and Chart 27, p. 43). As measured by the total
TABLE B-13.-—Net changes in the money supply^ 1952-54
Net change' during—

Item

1952

1953

1954 » 1952

Billions of dollars
Demand deposits and currency: Total. .
Demand deposits adjusted
Currency outside banks
_. . _
Time deposits

_. __ .
__

« __

4.5
3.3
1.2
4.3

1.5
.9
.6
4.6

4.1
4.1
-.1
5.2

1953
Percent

3.6
3.3
4.5
7.1

1.2
.9
2.2
7.0

1
Based on data for end of year.
* Preliminary.
NOTE.—Detail will not necessarly add to totals because of rounding.
Sources: Board of Governors of Federal Reserve System and Council of Economic Advisers.




IOI

1954»

3 1
4.0
-.3
7.4

of adjusted demand deposits (exclusive of Government and interbank deposits) and currency outside the banks—the conventional definition of the
active money supply—monetary expansion was considerably greater in 1954
than in 1953, and only a little less than in 1952. In fact, the expansion
of demand deposits in 1954 exceeded that in 1952. The decline in currency outside the banks during 1954 doubtless reflected a reduced demand
for hand-to-hand currency resulting from a lower level of business activity.
The expansion of time deposits exceeded the increases of both 1952 and 1953.
BANK RESERVES AND FEDERAL RESERVE POLICY

The 1954 expansion in bank credit and in the money supply was possible only because the commercial banking system was adequately supplied
with reserves. The policies followed by the Federal Reserve authorities and
the movement of member bank reserve balances are important elements,
therefore, in the year's financial developments (Charts B-7 and B-8).
During the opening weeks of the year, commercial bank reserves were
augmented by a substantial return of currency from public circulation,
reflecting cyclical as well as seasonal factors. The objective of Federal
Reserve policy in this period was to absorb part of any reserves arising from
the currency inflow and from other reserve-expanding factors, and yet to
maintain an adequate commercial bank reserve position. Federal securities
were sold, on balance, in the first three months of the year; were held in
CHART B-7

FEDERAL RESERVE BANK CREDIT
BILLIONS OF DOLLARS

BILLIONS OF DOLLARS
WEEKLY AVERAGES OF DAILY FIGURES
27

TOTAL CREDIT OUTSTANDING

U.S. GOVERNMENT SECURITIES

\

1954
SOURCJE: BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM.




102

CHART B-8

MEMBER BANK RESERVES AND BORROWINGS
BILLIONS OF DOLLARS

BILLIONS OF DOLLARS

19.5

19.5

WEEKLY AVERAGES OF DAILY FIGURES

19.0

~V A
>/

rJ\

\

19.0
0

f y

\jts* *

R Q I E R S R E
E UR D E E V S

18.5

18.5

18.0 -

18.0

/

^ >
17.5

-

-

-

17.0

17.5

17.0

1.5

1.5

1.0

.5

A

EXCESS R E S E R V E S v ^
1.0

KK h A"
.5

0

0
<

>

.5

0
<

BORROWINGS FROM FEDERAL RESERVE: BANKS

>

1.0 "" I
\

.5

0
<

1
\

•

1 I t 1 I 1 I 1 1 II I
J

1.0

SERVES
"FREE" RE

.5

ft

"

F

M

WO\LAA .
"
Y
V

vW

1 1 1 1
1 1 1 1 ! 1 1 I 1 1 1 ! 1 1 1 1 i i i 1 t i i 1 i i i i
1 1 1 1
A

M

J

J

A

S

1954
SOURCE: BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM.




103

O

N

D

.5

0

April at about the March level; and then were purchased, on balance, in
May and June. Other factors affecting the reserve position of member
banks from the beginning of the year until early June were a decline in
deposits, which reduced the amounts of reserves required to be held by the
banks, and a net outflow of gold. The combined effect of all these forces
was to leave the reserve position of the member banks approximately the
same in early June as it had been at the year's beginning, but in the interim
there had been a decline followed by an increase in excess and "free"
reserves. These were relatively low in early February, but increased fairly
steadily from then until the middle of the year (Chart B-8).
Steps were also taken in the first half of the year to bring the lending rates
of the Federal Reserve Banks more closely into line with open market rates of
interest, which had been declining more or less continuously. In February
1954, discount rates charged to member banks were reduced from 2 percent
to 1% percent, and buying rates on 90-day bankers' acceptances from 21/Q
to 1^4; in April-May, rediscount rates were again lowered, this time to \l/i
percent, and buying rates on acceptances were reduced to 1 ^4 percent.
Important policy actions were taken in the second half of the year,
when a series of reductions in reserve requirements was made, accompanied by open market operations. Reserve requirements for time deposits were cut from 6 percent to 5 percent for country banks on June 16,
and similarly for central reserve and reserve city banks on June 24. On
the latter date, the reserve requirement for demand deposits in central
reserve city banks was reduced from 22 percent to 21 percent, and this
change was followed shortly by three additional steps: the requirement
for central reserve city banks was reduced from 21 percent to 20 percent
on July 29; the requirement for reserve city banks was lowered from 19
percent to 18 percent on the same date; and the country bank requirement was cut from 13 percent to 12 percent on August 1.
Although these actions freed approximately 1.6 billion dollars of reserves,
the volumes of excess reserves and of "free" reserves were relatively unchanged as the Federal Reserve Banks sold or redeemed about 1.0
billion dollars of securities in July and August, and other influences also
tended to deplete reserves. These open market sales served to lessen
the immediate impact of reduced reserve requirements on the money
market. Net purchases of securities were made over the remainder of
the year, as other forces—notably a net outflow of gold and a drain of
currency into circulation—tended to absorb reserves and as an expansion
of deposit liabilities increased the amount of reserves which the banks
were required to hold. It is important to note that almost all of the
1954 expansion of bank assets and liabilities took place in the second half
of the year. Excess reserves remained roughly stable, although toward
the end of the year they declined somewhat and borrowing from Reserve
Banks increased. A very small rise in money market rates and bond yields
occurred toward the close of the year.




104

T A B L E B-14.—Factors affecting member bank reserves, December 1953 to December

1954

[Monthly averages of daily figures]
Change
(millions
of dollars)

Factor

Factors increasing member bank reserves:
Decrease in money in circulation
Decrease in Treasury deposits with F. R. Banks.
_
Increase in F. R. Bank discounts and advances to others than member banks.
Decrease in other deposits with F. R. Banks
Increase in Treasury currency outstanding
Total increaseFactors decreasing member bank reserves:
Decrease in U. S. Government securities.
Net gold outflow...
Decrease in float
Decrease in F. R. Bank discounts to member banksOther factors
Total decrease
Member bank reserves:
Total..
RequiredExcess

218
159
155
52
97
681
722
317
26
195
60
1,320
-641
-659

+18

NOTE.—Rounding accounts for the discrepancy between the excess of decreasing over increasing factors
and the decrease in total reserves.
Source: Board of Governors of the Federal Reserve System.

A convenient recapitulation of the changes in member bank reserve balances over the year as a whole is given in Table B-14. The principal
factors increasing member bank reserve balances were a decrease in money
in circulation of something over 200 million dollars, a decrease of about
300 million dollars in Treasury and nonmember bank deposits at the
Federal Reserve Banks, a 150 million dollar increase in discounts and
advances to others than member banks, and close to a 100 million dollar
increase in Treasury currency outstanding. Together, these factors added
nearly 700 million dollars to member bank reserves. The amount of
required reserves was lower by roughly 700 million dollars, as the effect of
reduced reserve requirements in releasing reserves was partly offset by a
rise in deposit liabilities. At the same time the volume of reserve balances
was being reduced by a net outflow of gold of something over 300 million
dollars, by a reduction of over 700 million dollars in holdings of Government
securities by the Federal Reserve Banks, and by a 200 million dollar reduction in member bank borrowing from Reserve Banks.
The fact that excess reserve balances were virtually unchanged on balance
over the year reflects inadequately the active policy of credit ease followed
through practically all of this period. As pointed out above, this policy
was accompanied by a substantial expansion of bank credit and of deposit
liabilities, which entailed a greater commitment of reserves. It is interesting
to note that, if it had not been for the midyear reduction in reserve requirements, the volume of reserves required at the year's end would have been
higher by around 1.7 billion dollars.
BOND YIELDS AND INTEREST RATES

The policy of credit ease resulted in readier availability of loan funds
and lower borrowing costs during 1954 (Chart 30, p. 45). For some




105

months during the year, interest rates and bond yields continued the downward trend that had begun in June-July 1953. The persistence and the
degree of the 1954 decline varied in different sectors of the market. The
rate on new issues of Treasury bills reached a low point in June; it subsequently increased and ended the year at just over 1 percent—the same
level as in the early months of the year but substantially below average
rates in 1953. The rate on prime commercial paper, also a short-term
obligation of high quality, did not reach its low point until August, at
which time it stabilized at V/4. to 1% percent. Here, also, money costs in
1954 were substantially below the 1953 levels.
In the long-term sector of the market, the movement of bond yields followed somewhat the same pattern, but with less amplitude. The yield on
the 3}4 percent Treasury bond maturing in 1978-83, which was issued
May 1, 1953, fell to approximately 2.6 percent in August 1954 and subsequently showed a slight tendency to rise. The downward movement of
yields on high grade municipal bonds continued into August, and that, too,
was followed by a slight upward movement. Borrowing costs of State and
local governments were substantially lower than those that prevailed in
mid-195 3. Yields on high grade corporate bonds reached their low point
in April, earlier than did the public issues, and held steady over the
remainder of the year, also at a level appreciably below that reached
in mid-1953.
The rates paid by business concerns on short-term loans also were reduced
in 1954. The average rate on short-term business loans, reported by banks
in 19 cities, was 3.56 percent in September, contrasting with an average of
3.7 for 1953 as a whole, a modest decrease characteristic of the relatively
sluggish movement of customer loan rates. A more pronounced change
occurred in the rates paid by leading finance companies on their direct
placements of finance paper with banking institutions and with other investors. This rate fell from slightly over 2 percent in January 1954 to 1.25
percent in July, at which point it remained over the rest of the year. Rates
on this type of paper averaged 2.33 percent in 1953. These reductions in
borrowing costs, occurring in both the long- and short-term markets, helped
to moderate the decline in business activity which began in mid-1953 and
encouraged the recovery which began in the early fall of 1954.
Although systematic and reliable information on the movement of rates
and yields for urban mortgage loans is not available, scattered information suggests that financial developments after August 1953 were favorable
to an increase of building activity. The increase to 4l/z percent in May
1953 of the interest rate on FHA-insured and VA-guaranteed mortgages
served to alleviate somewhat a shortage of funds in this market that
had threatened seriously to hamper building activity; insured and guaranteed mortgages sold at increasing discounts as interest rates rose in the
first half of 1953. This downward movement of mortgage prices was
checked shortly after the middle of the year, and for the rest of 1953 and




106

much of 1954 they moved closer to par. The trend of yields reflected conditions of availability of credit in 1954 that favored an increase of building
activity. The part played by the commercial banking system in these
developments of the money and capital markets was highly significant.
CONSUMER CREDIT

In the first quarter of 1954, additions to the flow of consumer expenditures generated by new extensions of instalment credit were less than the
drain on consumer income arising out of repayments on old contracts, with
the result that consumer instalment credit was, on balance, a contractive
factor in the economy (Table B-15 and Chart 29, p. 44). This was
TABLE B-15.—Net changes in consumer instalment and noninstalment credit outstanding
[Millions of dollars]
Net change i n Instalment credit
Total
consumer
credit

Period

1953: First quarter..
Second quarter.
Third quarter..
Fourth quarter
1954: January
February
March
April
May
June
July
August.
September
October
November1
December

-.

Total

Automobile
paper

Other
consumer
goods
paper

Repair
and
modernization
loans

Personal
loans

Noninstalment
credit

+223
+1.556
+738
+1,193

+763
+1,298
+836
+606

+699
+ 890
+572
+81

-65
+157
+72
+339

+11
+83
+88
+61

+118
+168
+104
+125

-540
+258
-98
+587

-813
-584
-307
+262
+277
+294
+59
+11
+120
+119
+234
+991

-351
-254
-201
+45
+61
+230
+ 132
+52
+ 34
+17
+62
+486

-183
-148
-91
+23
+60
+166
+130

-134
-109
-145
-30
-43
-3
-39
-34
-7
+37
+74
+302

-14
-12
-9

-20

+15
+44

-462
-330
-106
+217
+216
+64
-73
-41

+51
+16

-25
-44
+104

+3

+17
+1
+2
+5

0
-5
-6
-31

[-49
-27
-66
-39
-30
-25
-10
-38

+111

+86

+102
+172
+505

* Preliminary.
Sources: Board of Governors of the Federal Reserve System and Council of Economic Advisers.

sharply in contrast to the situation in 1953, when consumer instalment
credit was a consistently expansive factor. The impact of consumer credit
on the economy changed in April, however, when total new instalment
credits came approximately into balance with repayments. In the following
eight months, new credits were in excess of repayments by varying amounts.
The impact of the aggregate of instalment and noninstalment credit on
consumer expenditures was contractive, on the whole, in the first quarter
of 1954, but the net effect later was distinctly beneficial to the recovery
movement, notably in the last four months of the year.
Rising unemployment during the last half of 1953 and early in 1954 was
not accompanied by any appreciable increase in delinquencies on instalment
credit contracts. Delinquencies, as reported by the American Bankers




107

Association, were somewhat higher in the first half of 1954 than in the first
half of 1953, but not significantly so. In almost all categories of consumer
instalment loans, delinquencies were lower in 1954 than in 1949-50. The
favorable 1954 record may doubtless be attributed in part to the fact that
disposable personal income increased over the year.
ISSUES OF CORPORATE, STATE, AND MUNICIPAL SECURITIES

Offerings of State and municipal securities increased sharply in 1954,
reflecting the increase in capital outlays by State and local governments
(Table B-16). The gross proceeds of corporate issues were also higher in
TABLE B-16.—Securities offerings^ January to November; 1953 and 1954
[Millions of dollars!
JanuaryJanuaryNovember 1953 November 1954

Security
State and municipal securities (principal amounts) Corporate securities (gross proceeds)

4,781
7,420

6,036
8,403

6,547

6,303

4,536
2,010

4,910
1,393

234
510

1,454
516

Proposed uses of estimated net proceeds from corporate offerings:
New money

,

Plant and equipmentWorking capital
Retirements of securitiesOther purposes
Source: Securities and Exchange Commission.

the first eleven months of 1954 than in the corresponding period of 1953;
but this gain was due wholly to an increase in refinancing issues, which was
probably stimulated by the lower level of interest rates. The over-all volume
of corporate securities issued for new money was somewhat lower than in
1953. The decline was limited entirely to issues for working capital purposes; reflected in this fact were the considerably reduced demands of sales
finance companies. The volume of funds obtained for investment in plant
and equipment, on the other hand, was higher in the period from January
to November 1954 than in the corresponding period of 1953. Only a high
level of confidence on the part of business could account for the fact that,
while the economy was undergoing some contraction, many corporations
made increased demands on the market for funds to expand or modernize
producing capacity.
Developments in the market for existing shares were of a more spectacular nature. The Securities and Exchange Commission index of stock
prices, covering 265 common stock issues, rose from its 1953 low of 181
(1939=100) in September to 268 in December 1954, an increase of 48
percent (Chart 31, p. 45). Trading volume on the New York Stock
Exchange increased from a daily average of 967,000 shares in July 1953 to
a daily average of 3.5 million shares in December 1954. The unusually
rapid increase in share prices resulted in a sharp decline in the yield on




108

shares: the Moody index of yields on 125 industrial common stocks (ratios
of dividends to market price) was 4.09 percent for the week ended December 31,1954, contrasting with the postwar high of 7.29 percent in May 1949.
For the year ended December 29, 1954, loans to brokers and dealers for
purchasing and carrying securities (other than U. S. Government obligations) by weekly reporting banks in New York and Chicago (which account
for 80 percent or more of such loans of reporting banks) increased by
263 million dollars, to a total of 1,518 million dollars, and comparable loans
to "others" rose by 155 million dollars, to a total of 482 million dollars.
Amounts owed to member firms of the New York Stock Exchange maintaining margin accounts by their customers were 2.2 billion dollars at the
end of November 1954, contrasting with the 1953 low, in January, of 1.3
billion dollars.
The upward movement of security prices and the volume of transactions
accelerated in the closing days of the year and in the first days of 1955.
In view of these developments, the Federal Reserve authorities at the close
of business on January 4, 1955, increased the margin requirement from
50 to 60 percent.
MORTGAGE CREDIT

The high level of construction and real estate activity in the past year
made heavy demands on finance. During 1954, nonfarm mortgage debt
outstanding rose by 11.3 billion dollars, with the greatest percentage increase in debt on homes (Appendix Table D-41). Nonfarm mortgage
recordings of $20,000 or less rose by slightly over 10 percent in the first nine
months of the year, but still larger developments were suggested by some
indicators of future activity. In 1954, VA appraisal requests were 113 percent higher, and applications for FHA home mortgage insurance 33 percent
higher, than in 1953 (Appendix Table D-32 and Chart 33, p. 47).
The large volume of home building in 1954, which played a significant
role in sustaining the economy over the year and which, after allowance
for seasonal influences, was still rising at the year's end, can be attributed
in large part to the ready availability of credit on liberal terms. Individuals financed their purchases of homes on lower down payments and
longer maturities in 1954, and financial institutions showed an increasing
willingness to invest in home mortgages on these conditions. As indicated
above, the yields on mortgage investments tended to decline over the year;
but the attractiveness to lenders of home mortgages, particularly those protected by Federal insurance or guarantee, relative to other long-term investments, tended to increase.
The adequacy of the supply of mortgage funds can be attributed in part
to the volume of savings flowing into investment through financial intermediaries, notably life insurance companies, mutual savings banks, and
savings and loan associations. However, the more favorable position of
mortgages in the capital market, which came about without imposing higher




log

current interest costs on borrowers and in some cases in the face of declining
current interest charges, played a major part in easing the home mortgage
situation.
TREASURY DEBT MANAGEMENT POLICIES

During the year the Treasury followed the policy of restricting its issues
to those of intermediate and short term, thereby working cooperatively with
the Federal Reserve in its policy of credit ease. The effect of Treasury
policy was that it avoided interfering with the demands for long-term funds
arising from the rapid expansion of private and State and local construction.
The satisfaction of these demands for funds was a major factor both in
moderating the contraction in late 1953 and early 1954 and in facilitating
the recovery movement.
The Treasury was able to pursue its policy of improving the structure of
the debt even though it offered no really long-term security during 1954.
In all four of the major Treasury refundings during 1954—in February,
May, August, and December—investors were offered an intermediate-term
security as well as the usual one-year certificate; and the two major cash
financing operations—in May and October—were accomplished through
the issuance of intermediate-term notes. Around 31 billion dollars of the
Treasury securities issued through December 1954 were beyond the one-year
area. As a result, the average length of the marketable debt rose over the
year, reversing the steady six-year decline which virtually ended in 1952
and leveled out in 1953, and the floating debt was reduced.

V. Government Finances
Federal expenditures were reduced during 1954. On the other hand,
expenditures of State and local governments rose, as these governments continued their efforts to meet the need for public improvements and services
resulting from increased population and the deferral of construction during
the war years.
Although Federal expenditures were cut in fiscal year 1954, the Federal
debt continued to rise. The gross debt of State and local governments also
rose during the year, but—taken in the aggregate—these governments appear to have increased their holdings of cash and securities by almost as
much as the increase in their indebtedness. Much of these increased liquid
assets was held in sinking funds and trust fund accounts; a part took the
form of larger working capital balances.
FORMS OF GOVERNMENT ACCOUNTS

Government accounts can be drawn up in a number of ways, each method
serving a different purpose. Conventional administrative budgets are used
by Federal, State, and local governments in the formulation of their fiscal
programs. Consolidated cash budgets are set up to reflect differences in




no

the cash income and outgo of the government under consideration. Finally,
an account can be set up which employs the estimates of government receipts
and expenditures that are reported in the national income and product
accounts, as prepared by the Department of Commerce.
These three sets of accounts differ significantly, both in the way they are
constructed and in the view they give of governmental operations. For
the Federal Government, the conventional and cash budgets are developed
from accounting records; receipts and expenditures as shown in the national
income accounts, however, are budgetary data supplemented by estimates
developed to adapt them to the needs of national income accounting. For
State and local governments, there are no consolidated conventional budgets,
and the consolidated data on a cash basis and on a national income basis
are partly estimated. Receipts and expenditures as shown in the national
income accounts, and to a certain degree as shown in the cash accounts, are,
therefore, subject to the same type of reservation as the estimates of gross
national product. (See Appendix B-I, pp. 84-85.)
FEDERAL FINANCES : CONVENTIONAL AND CASH ACCOUNTS

Federal finances may be considered first in terms of the cash statement.
In fiscal year 1954, cash expenditures of the Federal Government were
reduced substantially from the postwar peak reached in fiscal year 1953
(Table B-17); cuts in national security expenditures accounted for the
T A B L E B—17.—Federal receipts and expenditures: Conventional budget and consolidated cash
statement, 1950-56
[Fiscal years, billions of dollars]

Receipts or expenditures

Conventional budget:
Receipts
Expenditures
Surplus or deficit (—)_
Consolidated cash statement:
Receipts
Expenditures
Surplus or deficit ( - ) _

1950

1951

1952

1953

1954

1955
1956
(esti(estimated) mated)

36.5
39.6

47.6
44.1

61.4
65.4

64.8
74.3

64.7
67.8

59.0
63.5

60.0
62.4

-3.1

3.5

-4.0

-9.4

-3.1

-4.5

-2.4

40.9
43.2

53.4
45.8

68.0
68.0

71.5
76.8

71.6
71.9

66.6
69.0

68.8
68.2

-2.2

7.6

-5.3

-0.2

-2.4

0.6

0)

» Cash surplus of 54 million dollars.
NOTE.—Detail will not necessarily add to totals because o Grounding.
Sources: Treasury Department and Bureau of the Budget.

bulk of the total reduction of 4.9 billion dollars. A further reduction,
estimated at 2.9 billion dollars, is being made in the current fiscal year.
For fiscal year 1956, cash expenditures are estimated at 68.2 billion dollars,
that is, 0.8 billion less than estimated for fiscal year 1955, but 8.6 billion
below fiscal year 1953 (Chart 3, p. 8).
Cash receipts for fiscal year 1954 were 71.6 billion dollars, approximately
equal to those of fiscal year 1953. Receipts did not fall in fiscal year 1954




in

mainly because of the relatively high tax collections from corporations,
reflecting the profits realized in calendar year 1953. In fiscal year 1955,
however, receipts are expected to fall to 66.6 billion dollars, due to the
effect of the recent contraction in economic activity and of various tax reductions, as follows:
1. The excess profits tax was repealed, effective January 1, 1954. On
the basis of 1953 profits, this action reduced tax liabilities of corporations
by an estimated 2 billion dollars.
2. Personal income taxes were reduced by about 10 percent in the lower
and middle income brackets and by amounts graduating down to between
1 and 2 percent in the highest brackets. These changes, which also became
effective on January 1, 1954, are expected to reduce receipts for fiscal year
1955 by about 3 billion dollars.
3. An excise tax reduction was enacted, effective April 1, 1954, which it
is estimated will reduce receipts from selected excises during fiscal year
1955 by about 1 billion dollars. With a few exceptions, all ad valorem
taxes previously ranging from 15 to 25 percent were reduced to 10 percent,
and the rates on many household appliances were reduced from 10 to 5
percent.
4. A program of structural tax changes was enacted under the Internal
Revenue Code of 1954. Many of these changes were designed to encourage
economic growth; they include more liberal depreciation allowances, a tax
credit to reduce double taxation of dividends, a lengthening from one to
two years of the period over which net business losses may be carried back,
and more liberal tax treatment of research and development expenditures
of business. Other revisions, designed to correct inequities, include increased allowances for medical expenses and for certain dependents, a new
allowance for child-care expenses, and more liberal rules governing the
personal tax treatment of medical insurance and sick benefits received by
employees. It is estimated that these structural revisions will reduce receipts
in fiscal year 1955 by approximately 1.4 billion dollars.
On the other hand, on January 1, 1954, old-age insurance contributions
rose from 1J4 percent to 2 percent of covered earnings for both employers
and employees, raising cash receipts by an estimated 1.3 billion dollars in
fiscal year 1955. The changes made by the Social Security Amendments
of 1954 in the coverage of the old-age insurance system and in the base for
computing contributions will have relatively small revenue effects until
fiscal year 1956.
Altogether, last year's tax reductions totaled approximately 7.4 billion
dollars on a full-year basis, while social security contributions increased
1.3 billion dollars, producing a net reduction in cash receipts of 6.1 billion
dollars. For fiscal year 1954, the net reduction was somewhat over a half
billion dollars; for fiscal year 1955, it has been estimated at only 0.3 billion
dollars less than the full-year effect of 6.1 billion dollars.




112

The deficit in the cash budget of the Federal Government for fiscal year
1953, when national security expenditures were at their post-World War II
peak, was 5.3 billion dollars. Guts in expenditures reduced the deficit
to 0.2 billion dollars in fiscal year 1954. Despite a continued drop in
expenditures, the cash deficit in fiscal year 1955 is expected to be 2.4 billion
dollars, primarily because of the loss in revenues resulting from the recent
decline in economic activity and the tax reductions made last year. For
fiscal year 1956, a cash surplus of 0.6 billion dollars is expected, as expenditures are cut further and receipts rise in response to economic expansion.
The margin between expenditures and receipts of the Federal Government during the past few years has been considerably larger in the conventional budget than in the cash budget (Chart 3, p. 8). Unlike the
cash budget, the conventional budget includes intra-governmental transactions and eliminates the transactions of the Social Security and other
TABLE B-18.—Effect

of financial operations on the Federal debt, 1952-56
[Fiscallyears, billions of dollars]
1956
1955
(esti(estimated) mated)

Item

1952

1953

1954

Budget deficit
Increase ( + ) or decrease (—) in Treasury general fund balance.
Other transactions *

+0.3

4.0
-0.4

9.4
-2.3
-0.1

3.1
+2.4
-0.3

+0.2

-0.7

4.5
-1.7

2.4

3.9

7.0

6.2

3.0

1.7

Federal debt outstanding: >
Beginning of the year
Increase during the year-

255.3
3.9

259.2
7.0

268.1
5.2

271.3
3.0

274.3
1.7

End of the year..

259.2

266.1

271.3

274.3

276.0

Increase in d e b t . .

i Includes changes in the clearing account for outstanding checks, net expenditures (including investments) of trust accounts, and other transactions.
* Securities issued or guaranteed by the U . S . Government, excluding guaranteed securities held by
the Treasury.
Note.—Detail will not necessarily add to totals because of rounding
Sources: Treasury Department and Bureau of the Budget.

trust funds. Since these trust funds now accumulate substantial surpluses,
the conventional budget provides a less accurate measure than the cash
budget of the impact of Federal finances on the economy. In the conventional budget, the Federal Government ran a deficit of 9.4 billion dollars
in fiscal year 1953. This was reduced to 3.1 billion dollars in fiscal year
1954, and is expected to be 4.5 billion dollars in the current fiscal year. In
fiscal year 1956, the deficit in the conventional budget is expected to be
2.4 billion dollars (Table B-17).
The Federal debt—including debt held by trust funds and other investment accounts of the Federal Government, as well as that held by the public—amounted to 259.1 billion dollars at the beginning of fiscal year 1953.
Although, as pointed out above, the conventional budget deficit was 9.4
billion dollars in fiscal year 1953, the public debt increased by only 7 billion—to 266.1 billion dollars, because 2.3 billion of the deficit was financed
by drawing down the Treasury's cash balance (Table B-18). In fiscal




"3

year 1954, the Federal debt increased by 5.2 billion dollars, to 271.3 billion
dollars. Of this increase, 3.1 billion represented the amount necessary to
finance the budget deficit and 2.1 billion represented the net effect of an
increase in the Treasury's cash balance less minor offsetting items.
The net cash borrowing of the Federal Government in both years was
considerably less than the increase in the Federal debt, mainly because part
of the increase consisted of securities issued to trust funds and government
agencies, and another part reflected accrued discount on savings bonds and
bills. Were it not for year-to-year changes in the Treasury's cash balances,
the net amount of cash borrowing from the public, or of cash repayments to
the public, in any given year would closely approximate the cash deficit,
or cash surplus, for that year.
STATE AND LOCAL GOVERNMENT FINANCES: CASH

ACCOUNT

The combined cash expenditures of State and local governments (exclusive of Federal grants-in-aid) were 22.2 billion dollars in fiscal year
TABLE

B-19.—Consolidated cash statements of Federal, State, and local governments, 1930-54
[Fiscal years, billions of dollars]
Receipts or payments

1950

Federal Government:
Cash receipts
Cash payments

1951

40.9
43.2

53.4
45.8

Federal cash surplus or deficit (—).
State and local governments:2
Cash receipts
Cash payments

-2.2

7.6

17.2
18.4

19.1
19.9

State and local cash surplus or deficit (—).
Total government:
Cash receipts
Cash payments

-1.2

1952

68.0
68.0

1953

1954

71.6
71.9

-6.3

-0.2

20.8
20.9

22.5
22.2

24.1
24.3

-0.7

-0.2

0.3

-0.2

58.2
61.6

72.5
65.7

88.8
88.9

94.0
99.0

95.7
96.1

-3.4

Total cash surplus or deficit (—).

71.5
76.8

6.9

-0.1

-5.0

-0.4

0)

1 Cash surplus of 54 million dollars.
2 Estimates by the Council of Economic Advisers on the basis of incomplete data.
NOTE.—Federal grants-in-aid have been deducted from State and local government receipts and payments
since they are included in Federal payments.
Detail will not necessarily add to totals because of rounding.
Sources: Treasury Department and Bureau of the Budget (except as noted).

1953 and 24.3 billion dollars in fiscal year 1954. Both current operating
expenses and capital outlays increased. The increase in current expenditures reflected higher wages and salaries and larger employment. Expenditures on school and road construction accounted for most of the
increase in capital outlays. Receipts of State and local governments also
continued to rise in 1954, though at a slower pace. Cash receipts and expenditures of all State and local governments combined have been fairly
close to balance during the past three years (Table B-19). Corresponding
figures on the basis of conventional budgets are not available.




114

According to preliminary estimates, the gross debt of State and local
governments rose from 32.7 billion dollars at the end of fiscal year 1953 to
37.9 billion dollars at the end of 1954, reflecting increased outlays on
schools, highways, and other public improvements. Borrowing to finance
self-liquidating projects was an important factor in this rise. Nevertheless,
the debt of State and local governments is a much smaller percentage of the
gross national product than it was during the prewar years (Table B-20).
T A B L E B—20.—-Gross State and local government debt: total and as percent of gross
product, 1929, 1939,
1949-54
Gross debt (billions of dollars,
current prices) 3
Year
Total

State

Local

national

Gross debt
of State
and local
governments as
percent
of gross
national
product

1929..

17.2

2.3

14.9

16.5

1939..

20.0

3.3

16.7

22.0

1949..
1950_.
1951_.
1952..
1953..
1954 3

20.9
24.2
27.0
29.6
32.7
37.9

4.0
5.4
6.4
7.0
8.0
10.2

16.9
18.8
20.7
22.6
24.7
27.7

8.1
8.5
8.2
8.6
9.0
10.6

* Fiscal year for debt, calendar year for gross national product.
s As of June 30.
3 Preliminary.
NOTE.—Detail will not necessarily add to totals because of rounding.
Sources: Department of Commerce and Council of Economic Advisers.

The fact that the gross debt of all State and local governments combined rose substantially at a time when their cash budgets were almost
balanced is explained by the large increases in their holdings of cash and
securities. Part of these assets are held in retirement funds for government
employees and sinking funds. Therefore, although the cash and security
holdings of State and local governments are large in relation to their annual
expenditures, only a part of these are available for current operating expenses or for capital outlays.
RECEIPTS AND EXPENDITURES OF FEDERAL, STATE, AND LOCAL
GOVERNMENTS : NATIONAL INCOME ACCOUNTS

Total government purchases of goods and services—Federal, State, and
local—rose to a post-World War II peak of 86.6 billion dollars (seasonally
adjusted annual rate) in the second quarter of calendar year 1953. They
were only slightly lower in the fourth quarter of that year, as an increase in
State and local government purchases offset part of the decline in purchases
by the Federal Government. During 1954, these trends continued, but
the decline in Federal purchases was more pronounced (Chart 5, p. 26).
In the last quarter of 1954, total government purchases of goods and




services were being made at an annual rate of 74.3 billion dollars, or
12.3 billion less than the peak rate reached a year and a half earlier (Appendix Table D - l ) .
The decline in Federal purchases of goods and services was due primarily
to a reduction in national security outlays. Following three years of growth,
these outlays reached an annual rate of 54.3 billion dollars in the second
quarter of 1953, more than three times the pre-Korean rate. By the end
of 1954, they were reduced to an annual rate of 40.6 billion dollars, the
lowest level since 1951.
State and local government purchases of goods and services rose to 27.4
billion dollars in 1954, up 2.3 billion from 1953. This increase was considerably above those of the preceding four years, and applied to all
major types of goods and services purchased, with new construction showing
the greatest proportionate rise.
Total receipts and expenditures of Federal, State, and local governments,
as shown in the national income accounts, are given in Table B-21 for
1950-54. Tax reductions and increases in transfer payments (principally
unemployment compensation and social security benefits) offset the recent
decline in purchases of goods and services by the Federal Government.
Because business taxes are shown on an accrual basis in the national income
accounts, these accounts reflected the effect on Federal receipts of the 195354 contraction in economic activity and the 1954 tax reductions more
promptly than did the cash and conventional budgets. This is particularly
noticeable in the second half of 1953 and in the first half of 1954. For
State and local governments, the national income accounts showed a rising
trend of both receipts and expenditures during 1953 and 1954.
A reconciliation between Federal receipts and expenditures, as shown in
the national income accounts and those in the cash and conventional
budgets for fiscal years 1952-54 is given in Table B-22. The concepts and
methods used in preparing the estimates of government receipts and expenditures for the national income accounts are discussed in detail in National Income, 1954 Edition, A Supplement to the Survey of Current Business, Department of Commerce, pp. 143-48.




n6

T A B L E B-21.—Government receipts and expenditures as shown in the national income accounts,
7950-54
[Calendar years, billions of dollars}
1953
Keceipt or expenditure

1950

1951

1952

1954

First SecFirst SecTotal halfi ond Total halfi ond
halfi
halfi

Total Government:
69.4 85.6 91.1 95.9 97.0 94.7
Eeceipts
61.2 79.4
Expenditures
102.5 101.9 103.2
Excess of receipts or of expenditures (—)
6.2 - 2 . 8 -6.6 -4.9 - 8 . 4
8.1
Federal Government:
Receipts:
Personal tax and nontax receipts
18.2 26.3 31.1 32.5 32.3 32.7
Corporate profits tax accruals
17.1 21.6 19.1 20.3 21.7 18.9
Indirect business tax and nontax
accruals
9.0
9.5 10.5 11.0 11.2 10.9
Contributions for social insurance
7.4
5.9
7.1
7.5
7.5 7.2
50.2 64.5 68.2 71.2 72.7
Total receiptsExpenditures:
Purchases of goods and services
22.1 41.0 54.0 60.1 60.2 60.0
Transfer payments
9.7
9.5
10.9
8.9
8.7
Grants-in-aid to State and local governments.
2.8
2.6
2.3
2.5
2.6
3.0
Net interest paid-14
4.7
4.6
4.6
4.7
4.8
Subsidies less current surplus of Government enterprises
1.2
1.0
1.3
.7
.8
.7

90.1
97.4

89.:
'9.7

90.3
95.1

-7.3 - 9 . 9

-4.8

29.2
16.5

29.1
16.2

29.2
16.7

10.1
8.3

10.3
8.4

9.8
8.3

64.0

64.1

13.9

50.1
11.6

53.2
11.3

47.0
11.8

2.8
5.1

2.6
5.0

3.0
5.1

1.1

1.1

1.0

Total expenditures
40.9 58.0 71.1 78.1 77.7 78.4 70.fi 73.1 67.9
Excess of [receipts or of expenditures (—)
9.2
- 4 . 9 - 8 . 7 - 6 . 5 - 9 . 0 -4.0
6.5 - 2 . 9
State and local governments:
Receipts:
Personal tax and nontax receipts
3.4
3.5
3.7
3.5
3.2
3.8
2.7
3.7
3.0
Corporate profits tax accruals
.9
.9
.8
.8
.8
Indirect business tax and nontax
accruals..
_
14.7 16.1 17.6 19.0 18.6 19.3 20.2 19.9 20.4
1.4
Contributions for social insurance
1.4
1.4
1.3
1.0
1.1
1.3
1.2
1.4
Federal grants-in-aid
3.0
2.8
2.6
2.8
2.6
2.3
2.5
2.6
3.0
21.5
Total receipts...
Expenditures:
Purchases of goods and services
19.9
Transfer payments
3.4
Net interest paid_
Less: Current surplus of government
enterprises
1.0

Total expenditures
22.6
Excess of receipts or of expenditures (-)
-1.1

23.5

25.5

27.5

21.8
2.9

23.2
3.2

25.1
3.1

.3

.3

1.1

1.2

23.9

25.5

-.4

.0

27.0

3.2
.3

28.0

28.8

28.3

29.3

25.7
3.1

27.5
3.2
.3

3.2

28.0
3.2
.3

1.3

1.2

1.3

1.4

1.3

1.4

27.3

26.8

27.8

29.6

29.2

30.1

.2

.1

.2

-.8

-.8

* Seasonally adjusted annual rates.
NOTES.—Federal grants-in-aid to State and local governments are reflected In Federal expenditures and
State and local receipts and expenditures. Total government receipts and expenditures have been ad
Justed to eliminate this duplication.
Detail will not necessarily add to totals because of rounding.
Sources: Department of Commerce and Council of Economic Advisers.




117

T A B L E B—22.—Reconciliation of Federal Government receipts and expenditures as shown in th»
national income accounts with receipts and expenditures [as reported in the consolidated cash
statement and the conventional budget, 1952-54
[Fiscal years, billions of dollars]
Receipt or expenditure

1952

National income accounts:
Receipts
Expenditures

1953

1954

65.8
66.9

66.6
75.6

-1.1

-4.8

-9.0

65.8

Excess of expenditures (—)

70.5
75.3

70.5

66.6

Reconciliation of receipts:
Receipts as shown in the national income accounts

.

Less:
Excess of taxes included in national income accounts over cash collections:
Personal
Corporate profits
_
_
Other
-_
Federal Government contributions to:
Employee retirement funds.
_
Veterans life insurance funds
Federal Government employee contributions to employee retirement funds.
Plus:
Realization upon loans and investments
Interest, dividends, and other earnings.
Proceeds from sale of government property
Recoveries, refunds, and other adjustments
District of Columbia revenues
Trust fund receipts not included in national income receipts
Statistical errors and omissions
Equals: Consolidated cash receipts

_

Less: Trust fund receipts

.2
-1.6
.1

-.1
-3.4
-.4

.3
.1
.4

.0
.1
.4
.2
.6
.2
.5
.1
.3
-.1

___

_

-

68.0

71.5

Plus:
Inter-fund transactions.
_.
Seigniorage
Equals: Conventional budget receipts

71.6
9.2

8.8
2.1
.1

2.2
.1

2.1
.1

61.4

64.8

64.7

66.9

75.3

75.6

.1
.4

.1
.4

.0
.1
.4

.8
.1
.2
.0

.7
.2
-.7
.2

.5
2.0
.6
.3

1.6

1.3

.7
.1
.1
.1

.1
.1
.1

.5
.2
.1
.1

-.3
.2

-.2
.0

Reconciliation of expenditures:
Expenditures as shown in the national income accountsFederal Government contributions to—
Employee retirement funds
Veterans life insurance funds
Federal Government employee contributions to employee retirement funds..
Accrued discount on savings bonds and bills less interest paid on savings
bonds and bills redeemed
Commodity Credit Corporation guaranteed nonrecourse loans
Excess of goods delivered to Government over payment therefor
Miscellaneous adjustments
Plus:
Loans, excluding Commodity Credit Corporation
Interest received and proceeds of government sales netted out of national
income expenditures
District of Columbia expenditures
Renegotiation adjustment.
_.
Purchase of land and existing assets
Trust and deposit fund expenditures not included in national income expenditures
Other adjustments
Statistical errors and omissions

.1
.4
.0

Equals: Consolidated cash expenditures
Less: Trust account expenditures

76.8

Plus:
Inter-fund transactions
Net accrued interest and other noncash transactions.
Equals: Conventional budget expenditures

71.9

5.3

_

5.3

7.2

2.1
.7

2.2

2.1
1.0

65.4

NOTE.—Detail will not necessarily add to totals because of rounding.
Sources: Department of Commerce, Bureau of the Budget, and Treasury Department.




u8

74.3

67.8

VI. Foreign Economic Developments
In general, the expansion that marked production and trade in the Free
World outside the United States in 1953 was continued in 1954. Industrial output maintained its strong upward movement in Western Europe—
a highly significant development from the standpoint of the Free World
economy—and reached a record level, rising 8 percent in the third quarter
of 1954 over the corresponding period of the preceding year (Table B-23).
TABLE B-23.—Growthjtf

Western European industrial production, selected countries

Percentage increase from—
Country or area

Third quarter Third quarter
1952 to third 1953 to third
quarter 1954 quarter 1954

All OEEO countries
France
Western Germany
Italy
Netherlands
United Kingdom

15
g
22
22
19
15

8
15
10
10
6
5

Source: OEEC Statistical Bulletin.

Although some raw material prices declined, on balance the movement was
upward. World trade volume also increased slightly over the level of 1953.
Foreign holdings of gold and dollars increased by an estimated 1.6 billion
dollars during the year, to a record amount of nearly 25 billion dollars.
The gold and dollar holdings of the International Monetary Fund and
the International Bank for Reconstruction and Development rose by 200
million dollars.
These developments were mutually reinforcing. The expansion of industrial production played a strong part in maintaining world raw material prices at a time when United States demand was declining. The
steadiness of these prices helped support the economic position of many raw
material exporting countries, which helped maintain a high level of demand for the exports of the industrial countries. These conditions, combined with United States military expenditures abroad, other United States
Government credits and grants, and foreign gold production, enabled
most countries, especially those in Western Europe, to augment their reserves of gold and dollars. Increased reserves and an improved balance
in the trading relations among countries of the Free World enabled a
number of nations to liberalize further their import policies, including
relaxation of restrictions against dollar imports. Notwithstanding a decline in United States imports in 1954, United States exports were maintained at a level slightly above 1953, which was a stabilizing factor in the
United States economy. And in avoiding serious contraction, the United




219

States economy, in its turn, operated to sustain confidence throughout the
Free World.
RISING INDUSTRIAL PRODUCTION ABROAD

Several factors account for Western Europe's strong performance in
industrial production in recent years. Perhaps the fundamental ones were
greater political stability and the successful attack on inflation by sound
fiscal and monetary policies, which led to the dismantling of many direct
government controls. These factors combined to restore confidence in the
value of money, to stimulate savings and investment, and to encourage
private enterprise. In the improving atmosphere, investment in plant and
equipment and residential construction expanded. More plentiful supplies of materials for production helped to raise productivity.
During the past year, production in Western Europe received a special
impetus from sharply rising consumer demand and expanding export markets. The increase of consumer expenditures was supported in some countries by the readier availability of consumer credit. It was accompanied
by only a nominal increase in price levels, because productivity advanced and
imports remained available at fairly stable prices.
Not all countries outside Western Europe experienced a high rate of increase in industrial production during the year. Japanese production was
increasing early in 1954 but leveled off in the spring, mainly owing to the
cessation of hostilities in Korea. Price inflation, which was unchecked at
the beginning of the year, was ended by measures to tighten credit. These
had the effect of reducing the demand for imports and increasing exports.
In Canada, industrial production followed a course somewhat similar to
that in the United States, though the decline was less. Other countries
outside Europe that did show substantial growth included Australia, Brazil,
India, and the Union of South Africa. The performance in each case
reflected the stimulus of new investment activity.
FOREIGN AGRICULTURAL PRODUCTION

The volume of agricultural production outside the United States appears
to have been maintained in 1954 at about the same level as in 1953. While
coarse-grain production in Western Europe was about 4-5 percent less than
in the exceptionally good harvest year of 1953, most other categories of farm
production held up well. Most areas of free Asia had some expansion of
output in the crop year 1953-54, mainly of rice and cotton. In Latin
America, 1953-54 production of coffee lagged, while that of corn, rice,
sugar, and tobacco increased.
Significant declines in agricultural production occurred during the year
in Canada, Turkey, and Australia, in each case chiefly as a result of poor
harvests. Canada's wheat output was only about half that of the very good




120

harvest of 1953. The wheat harvests of Turkey and Australia also decreased sharply. Wool production in Australia, however, registered a gain.
The physical supply of major agricultural commodities entering the world
market continued to be abundant.
PAYMENTS, RESERVES, AND EXCHANGE RATES

Most countries of the Free World continued to improve their international financial position in 1954, although the improvement was generally less rapid than during 1953. The improvement was the result of
the increased volume and better balance of world trade, and of continued
large United States expenditures abroad under the Mutual Security and
other programs.
Most countries of Western Europe showed a marked improvement in
their balance of payments during the year. Germany continued to have
a large trade surplus in spite of further liberalization of restrictions on imports from Europe and the dollar area. Switzerland and the Netherlands,
both of which have large surpluses on current account, increased their foreign lending.
In Latin America the record for the year was not uniform among countries. For the area as a whole, gold and dollar reserves did not change
substantially; several countries experienced moderate increases in their
reserves and others lost reserves. The short-term external debt of the area
increased, mostly as a result of changes in Brazil's position. Formal currency devaluations occurred in Chile and Mexico, while the Government
of Brazil increased its buying rate for exchange arising from coffee exports.
In general, monetary reserves increased for the Free World outside the
United States, and at the end of 1954 they were more evenly distributed
in relation to trade volume and international liabilities than at any other
time in recent decades. At the end of the year, gold and dollar reserves
in the various areas were as follows: Continental Western Europe, 11.2
billion dollars; sterling area, 4.3 billion dollars; Canada, 2.6 billion dollars;
and Latin America, 3.6 billion dollars. The trend in such holdings since
1928 is shown in Appendix Table E-57.
UNITED STATES TRADE W I T H FOREIGN COUNTRIES

The principal changes between the first ten months of 1953 and the
corresponding ten months of 1954 in the foreign trade of the United States
were a reduction of about 8 percent in merchandise imports and a 3
percent increase in exports, excluding military transfers under aid programs; and for the first nine months a decline of about 27 percent in
military transfers.
Highlights of the movement of nonmilitary merchandise trade are shown
in Table B-24, which compares results for the ten-month periods in the
two years by major trading areas. Merchandise exports to Continental
Western Europe increased by 13 percent and those to Latin America by




TABLE B-24.—Distribution of nonmilitary merchandise exports and imports of the United States,
by areas\ January-October, 1953 and 1954
[Millions of dollars]
Imports

Exports
Area

January- January- January- JanuaryOctober October October October
1954
1954
1953
1953

_

Total

1,805
478
2,735
2,564
742
1,764

2,044
541
2,468
2,756
768
1,855

1,447
462
2,042
2,902
975
1,290

1,220
409
1,950
2,738
853
1,261

10,088

Continental Western Europe *
United Kingdom
____-.
.._
Canada*
Latin America*
Sterling area exclusive of the United Kingdom
Other

10,432

9,118

8,421

i OEEC countries excluding the United Kingdom, Ireland and Iceland; also includes Finland,! Spain,
and Yugoslavia.
* Includes "special category" exports.
Source: Department of Commerce.

7 percent. On the other hand, United States shipments to Canada declined approximately 10 percent. There was a small decline in United
States imports from all areas shown.
UNITED STATES LONG-TERM INVESTMENT IN FOREIGN COUNTRIES

Net private United States long-term foreign investment during 1954
increased over the preceding year (Table B-25). Net direct investments
in foreign branches and subsidiaries of United States businesses were about
the same as in 1953, while net United States purchases of foreign stocks
and bonds and long-term bank loans (portfolio investments) changed from
a negative amount in 1953 to a positive sum in 1954. The aggregate net
outflow of long-term United States capital amounted to slightly less than
1 billion dollars in 1954. During the year, United States private investors
received from foreign sources an estimated 1.7 billion dollars of interest,
dividends and branch profits. It should be noted that the record in
TABLE B-25.—Net private United States long-term foreign investment, by areas, 1953 and 1954*
[Millions of dollars]
Direct investments
Area
1953
Continental Western Europe
United Kingdom
. . Canada
Latin America
Sterling area exclusive of United Kingdom
Other

1954 »

1953

f

1954 *

59
-11
413
93
64
104

56
-23
436
113
51
75

—170
-37
8
—33
-42
•96

—12
-15
102
—19
-35
«344

722

Total

708

-178

248

* Minus sign indicates inflow into the United States.
* Includes new issues, redemptions, and other private long-term investment.
* January-September data at annual rates.
« Includes international institutions.
Source: Department of Commerce*




Portfolio
Investments

122

Table B-25 covers the net, not the gross, outflow of long-term private capital
during the year. Moreover, Table B-25 excludes earnings reinvested by
foreign subsidiaries of United States companies, which have averaged about
800 million dollars annually since 1950.
The largest amount of United States new direct investments continued to
be made in Canada. However, direct investments in Latin America and
"other" areas, chiefly the Middle East countries, were also of considerable
importance. Most of the funds were placed in petroleum and manufacturing industries.
United States investors in 1954 increased their portfolio investments in
Canada and in the obligations of international institutions, while their portfolio investments in other areas showed a decline.
During the year, net foreign direct investments in the United States and
net purchases of United States securities, other than government securities,
not shown in Table B-25, are estimated at 200 million dollars.
UNITED STATES BALANCE OF PAYMENTS

There was little change between 1953 and 1954 in the export balance
on goods and services of the United States when military-aid shipments are
included with United States exports, and military expenditures abroad are
treated as United States imports (Chart B-9). However, it is estimated,
CHART B-9

U. S. BALANCE OF PAYMENTS ON CURRENT ACCOUNT
BILLIONS OF DOLLARS

BILLIONS OF DOLLARS

25

25

GOODS AND SERV.CES

20

S

EXPORTS EXCLUDING
MILITARY GRANTS-

T 0 T A L

E X P 0 R T S

.............••••••••••"•••—L.

20

15

15
CURRENTACCOUNT

WW&ZM&i&P'

10

10
IMPORTS EXCLUDING U.S. MILITARY
EXPENDITURES ABROADi/

1947 I 1948 I 1949 I 1950 I 1951

I (952 I 1953 I 1954

i / INCLUDES UNILATERAL TRANSFERS OTHER THAN U. S. GOVERNMENT GRANTS.
SOURCES: DEPARTMENT OF COMMERCE AND COUNCIL OF ECONOMIC ADVISERS.




123

on the basis of preliminary data through November, that the current
account of the United States, excluding transfers of military aid goods but
including United States military expenditures abroad, will show a surplus
for 1954 in the neighborhood of 900 million dollars (Appendix Table D-55).
This contrasts with a balance in this account during 1953. The net movement of private capital from the United States, combined with nonmilitary
grants, much more than offset the current account deficit of other countries
with the United States in 1954.
Thus the Free World continued to build up economic and financial
strength in 1954, adjusting itself to a reduction of United States economic
aid (including loans) in recent years and to the mild contraction of
1953-54 in the United States. Foreign gold and dollar reserves have continued to increase, and at the end of the year were nearly 10 billion dollars
above reserves six years earlier.
Changes since 1947 in the current account balances between major
trading areas and the United States, shown in detail through 1953 in
Appendix Table D-55, indicate the progress that has been made in balancing
current trade with the United States. In 1947, the world's current account
deficit with the United States was 10.8 billion dollars, which was considerably in excess of the value of all United States imports of goods and
services. The deficit of Continental Western Europe amounted to 4.2
billion dollars; that of the sterling area to 1.9 billion; of Canada, to 1.2
billion; and of Latin America, to 2.0 billion. By 1953, when the world
achieved approximate balance in current transactions with the United
States, both Continental Western Europe and the sterling area showed a
current account surplus with the United States, while Latin America
registered a slight deficit and Canada a deficit of nearly a billion dollars.
Preliminary data for 1954 indicate an increase in the sterling area current account surplus with the United States, a decline in Continental
Western Europe's surplus, a slight decrease in the Canadian deficit, and a
small increase in the Latin American deficit. Both Canada and Latin
America, however, continued to attract substantial quantities of long-term
capital from the United States, which largely offset their current account
deficits.




124

Appendix C

REPORT TO THE PRESIDENT ON THE




ACTIVITIES OF THE COUNCIL
OF ECONOMIC ADVISERS
DURING 1954

125




Letter of Transmittal
DECEMBER 23,

1954.

The PRESIDENT

SIR: The Council of Economic Advisers submits this Annual Report for
the calendar year 1954 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,

127




Report to the President on the Activities of the Council
of Economic Advisers During 1954
The Employment Act of 1946, declaring it to be the continuing policy
and responsibility of the Federal Government to promote maximum employment, production, and purchasing power, established the Council of
Economic Advisers within the Executive Office of the President. In its
relation to the President, the Council functions in the economic realm in
many respects as the Joint Chiefs of Staff function in military matters.
While the Council is merely one of numerous agencies within the Executive Branch that deal with economic affairs, it is unique in that it is a purely
advisory agency, without routine administrative duties of any sort. The
Council gives its undivided attention to analyzing how the entire economy
is faring, to exploring ways and means of adding to its strength, and to
advising the President on appropriate economic policies.
Major Activities During the Tear

The Council assisted the President in the preparation of his Economic
Report to the Congress, transmitted January 28, 1954. Since this was the
first Economic Report of the present Administration, it was important that
it describe fully how the Administration proposed to promote maximum
employment, production, and purchasing power. Accordingly, the
Report analyzed the proper role of the Government in working toward
these objectives, diagnosed the existing economic situation, and set forth
recommendations of the legislation needed to attain the objectives stated
in the Employment Act. Following the transmittal of the Report to the
Congress, the Chairman of the Council met with the Joint Committee on
the Economic Report to discuss the findings and recommendations of the
Report.
The Council continued the task of reviewing economic trends and the
Federal Government's economic programs and policies. Special attention
was given to ways of marshalling the forces of recovery and to stimulating
the long-term expansion of the economy. The Council also assisted the
President in planning and preparing the Economic Report to be transmittedjn January 1955.
A representative of the Council, generally the Chairman, reported personally to the President on economic matters once a week, sometimes more
often. A representative of the Council also appeared regularly at Cabinet
meetings to present the Council's thinking about the state of the economy
and ways of dealing with the changing economic situation.




129

Need for Improving Economic Intelligence

In view of the heavy responsibilities assumed by the Federal Government
under the Employment Act, the Council has called to the personal attention of the President, as well as of the Cabinet and Congressional Committees, the need for improving our economic intelligence.
The Council has urged various statistical agencies of the Federal Government to accelerate the reporting of economic information. Notable progress
has been made in timely reporting of changes in employment, hours and
earnings of nonagricultural workers, retail sales, exports and imports, and
industrial production.
In its efforts to improve economic information, as well as in other matters, the Council has worked closely with the Joint Committee on the
Economic Report. In response to a request by the Joint Committee's Subcommittee on Economic Statistics, the Council submitted a memorandum
on tour categories of statistical needs: more prompt and frequent reporting,
desirable improvements of existing data, desirable improvements in their
presentation, and desirable additions to existing information. The Chairman of the Council supplemented this memorandum with personal testimony before the Committee, which was published in hearings before the
Subcommittee on Economic Statistics of the Joint Committee on the
Economic Report, Eighty-Third Congress, Second Session, July 12 and
13,1954.
In cooperation with the Joint Committee, the Council also undertook a
review of Economic Indicators, which is a monthly statistical compendium
prepared by the Council and issued by the Committee. In the course of
this appraisal, the Council and the Joint Committee received the benefit of
suggestions from business and labor organizations and from professional
economists in universities, government, and private research agencies.
The review disclosed that Economic Indicators could be readily improved in a
number of ways. Some improvements have already been put into effect,
and others will follow shortly.
Public Works Planning

At the President's request, the Council extended its activity in the field
of public works planning. With the aid of a special appropriation from
the Congress, a Coordinator of Public Works Planning was appointed to
the Council's staff and authorized to recruit a small group of experts on
public works. Among other accomplishments, considerable progress has
been made by this unit toward devising a system of cataloguing information
on all Federal, State, and local public works projects under serious consideration, showing the type of project, its location, estimated cost, financing
status, stage of planning, and how soon construction could be started if
funds were available. As a result of the work of this unit, the Federal Government is better prepared than previously to accelerate public construction,
if the need for doing so should arise.




130

Advisory Board on Economic Growth and Stability

The Council has received continuing valuable assistance from the
Advisory Board on Economic Growth and Stability. This Board, established by the President in mid-1953, assures close liaison between the
Council and government agencies that have administrative responsibility
for various economic programs. It also provides the Council with timely
information and advice on a wide range of current economic issues. The
exchange of views that takes place at the Board's weekly meetings is of
great help to the Council in its deliberations and in the preparation of its
reports to the President and the Cabinet.
The present membership of the Board is as follows:
Department of Agriculture—True D. Morse, Under Secretary
Department of Commerce—Walter Williams, Under Secretary
Department of Labor—Arthur Larson, Under Secretary
Department of State—Samuel Waugh, Assistant Secretary
Department of the Treasury—Marion B. Folsom, Under Secretary
Board of Governors of the Federal Reserve System—Abbot L. Mills,
Member of the Board
Bureau of the Budget—Donald R. Belcher, Assistant Director
The White House Office—Gabriel Hauge, Administrative Assistant
to the President
Council of Economic Advisers—Arthur F. Burns, Chairman
Work with Other Agencies

In addition to its work with the Advisory Board on Economic Growth
and Stability, the Council maintained liaison with other policy-making and
advisory groups in the Executive Branch, including the National Security
Council, Operations Coordinating Board, Defense Mobilization Board, and
National Advisory Council on International Financial and Monetary
Problems.
The Council also organized five interagency task forces of staff experts
to study intensively the following subjects: raising the status of low-income
families, Federal credit aids to private construction, public works planning,
measures for dealing with local unemployment, and ways of strengthening
the financial system.
Most government agencies have participated, one way or another, in the
Council's work. Many have prepared special tabulations and made
comprehensive analyses at the request of the Council. In particular, the
Council has been aided by the reports it has received on how long-term
growth in various segments of our economy may be promoted. More than
a score of experts from other agencies have given the Council the benefit
of their specialized knowledge through membership on various task forces
and the Auxiliary Staff Committee, which is an adjunct of the Advisory
Board on Economic Growth and Stability.
Private research agencies have shown no less willingness than government
agencies to assist the Council in carrying out its responsibilities. Two of




these, the National Bureau of Economic Research and the Brookings
Institution, have arranged conferences with professional economists for the
benefit of the Council. In addition to assuming the burden of making
detailed arrangements for such conferences, these institutions have paid
all costs incident to them.
In conformity with Section 4 (e) of the Employment Act, the Council
has met frequently with business, labor, and agricultural groups. These
exchanges of views on economic policies and developments have proved
very helpful to the Council.
Other Activities

Mr. Neil H. Jacoby participated in two meetings, held in Paris, of the
Organization of European Economic Cooperation and associated countries.
The first, in April, was a meeting of experts to exchange views on economic
conditions and prospects. The second meeting, in September, considered
in addition the written submission to the OEEC on United States economic
developments and outlook, which had been prepared by the Council.
Members of the Council's staff participated in training conferences and
seminars held by other government agencies for new employees and visiting
foreign experts. Staff members also served on a number of interagency
committees initiated by other agencies.
The Council handled a large volume of correspondence on economic
questions, some of which was received directly but a considerable part of
which was referred by other agencies and by the White House.
The Council and Its Staffing

On February 5, 1954, the Senate confirmed the President's recess appointments of two members of the Council, Mr. Neil H. Jacoby and
Mr. Walter W. Stewart. Mr. Jacoby had been serving since September 15,
1953, and Mr. Stewart since December 2, 1953.
A number of changes were made in the Council's staff during the year.
Five experts who had joined the staff from university faculties, with the
understanding that they would remain with the Council for not more than
one year, returned to their teaching posts. These men were replaced and
several additions to the senior staff were also made. The rebuilding of the
staff, which the Council began after it was reconstituted last year, is now
largely completed.
At present, the full staff, including detailed personnel and consultants,
consists of 34 persons. The following are members of the senior staff:
Asher Achinstein, John S. Bragdon, Lowell J. Chawner, George H. Deming,
Karl A. Fox, Bert G. Hickman, Frances M. James, E. Gordon Keith,
David W. Lusher, John A. Meek, Joseph A. Pechman, Albert E. Rees,
Virgil Salera, Raymond J. Sauinier, Charles L. Schultze, Irving H. Siegel,
and Collis Stocking.
As previously, staff assignments are made by the Council so that developments in every major field embraced by the Council's responsibilities—
industrial production, agriculture, construction work, employment and




132

unemployment, wages and prices, the national income and its distribution, money and banking, public finance, international trade and finance,
technological developments, business organization, social security, public
works planning, etc.—are under the scrutiny of a senior staff member.
Each of these experts is responsible for eliciting the cooperation of governmental and private specialists in analyzing and evaluating the significance
of current developments in the field assigned to him.
Budget for Fiscal Years 1954 and 1955

During fiscal year 1954, the Council's obligations (including $6,034 for
the office of the Economic Adviser to the President from July 1 to August 1)
were $242,520. The appropriation made available to the Council for this
period was $308,020.
The Council requested $360,000 for fiscal year 1955. Of this amount,
$35,000 was for a Coordinator of Public Works Planning and members of
his staff. The Congress appropriated $285,000, plus the unobligated balance from the preceding year's appropriation. Since this balance came
to $65,500, the Council has $350,500 at its disposal for the current
fiscal year.







Appendix D
STATISTICAL TABLES RELATING TO INCOME,
EMPLOYMENT, AND PRODUCTION
CONTENTS
National income or expenditure:
Pagt
D~l. Gross national product or expenditure, 1929-54
137
D-2. Gross national product or expenditure in 1954 prices, 1929-54
138
D-3. Gross national product or expenditure in 1947 prices, 1929-54
140
D-4. Gross private and government product in current and 1954 prices,
1929-54
141
D-5. The Nation's income, expenditure, and saving, 1952-54
142
D-6. Personal consumption expenditures, 1929-54
143
D-7. Gross private domestic investment, 1929-54
144
D-8. National income by distributive shares, 1929-54
145
D-9. Relation of national income and personal income, 1929-54
146
D-10. Sources of personal income, 1929-54
147
D-l 1. Disposition of personal income, 1929-54
148
D-12. Total and per capita disposable personal income in current and 1954
prices, 1929-54
149
D-13. Liquid saving by individuals, 1939-54
150
D-14. Sources and uses of gross saving, 1929-54
151
D-l 5. Realized gross and net income of farm operators from farming, 1935-39
average and 1940-54
152
Employment and wages:
D-16. Total population 14 years of age and over and the labor force,
1929-54
153
D-l 7. Employment and unemployment, by age, and by sex for 20-64 year
group, 1942-54
155
D-l 8. Employed persons with a job but not at work, by reason for not
working, 1946-54
156
D-l 9. Unemployed persons, by duration of unemployment, 1946-54
157
D-20. Unemployment insurance programs, selected data, 1939 and 1946-54.
158
D-21. Labor turnover rates in manufacturing industries, 1930-54
159
D-22. Number of wage and salary workers in nonagricultural establishments, 1929-f 4
160
D-23. Average weekly hours of work in selected industries, 1929-54
161
D-24. Average gross hourly earnings in selected industries, 1929-54
162
D-25. Average gross weekly earnings in selected industries, 1929-54
163
Production and business activity:
D-26. Industrial production indexes, 1929-54
164
D-27. Farm production indexes, 1929-54
166
D-28. Business expenditures for new plant and equipment, 1939 and
1945-55
167
D-29. New construction activity, 1929-54
168
D-30. New public construction activity, 1929-54
169
D-31. New nonfarm housing starts, by source of funds and by type of structure, 1929-54
170

825643—55




10

Production and business activity—Continued
Page
D-32. Private nonfarm housing starts and proposed home construction:
Government underwritten, 1935-54
171
D—33. Sales and inventories in manufacturing and trade, 1939—54
172
D-34. Manufacturers' new orders, sales, and inventories, 1939-54.
173
Prices:
D-35. Wholesale price indexes, 1929-54
174
D-36. Consumer price indexes, 1929-54
176
D-37. Indexes of prices received and prices paid by farmers, and parity
ratio, 1929-54
177
D—38. Indexes of wholesale prices and cost of living in the United States
and foreign countries, selected dates
178
Credit, money supply, and Federal finance:
D-39. Short-and intermediate-term consumer credit outstanding, 1929-54.
179
D-40. Instalment credit extended and repaid, 1940-54
180
D-41. Mortgage debt outstanding, by type of property mortgaged, 1939-54.
181
D-42. Deposits and currency, 1929-54
182
D-43. Loans and investments of all commercial banks, 1929-54
183
D-44. Member bank reserves and Reserve Bank credit, 1929-54
184
D-45. U. S. Government debt—volume and kind of obligations, 1929-54. .
185
D-46. Estimated ownership of Federal obligations, 1939-54
186
D-47. Bond yields and interest rates, 1929-54
187
D-48. Government cash receipts from and payments to the public, calendar
years, 1946-54
188
Corporate profits and finance:
D-49. Profits before and after taxes, all private corporations, 1929-54
189
D-50, Relation of profits after taxes to stockholders' equity and to sales,
private manufacturing corporations, by industry group, 1947-50
average and 1953-54
190
D-51. Relation of profits before and after taxes to stockholders' equity and
to sales, private manufacturing corporations, by asset size class,
1947-50 average and 1953-54
192
D-52. Sources and uses of corporate funds, 1946-54
193
D-53. Current assets and liabilities of all corporations, 1950-54
194
D-54. Business population and business failures, 1929-54
195
International transactions:
D-55. United States balance of payments, excluding U. S. Government
grants of military goods and services, 1947-54
196
D—56. U. S. Government grants, and capital movements to foreign countries, 1947-54
199
D-57. Estimated gold reserves and dollar holdings of foreign countries, 1928,
1937, and 1946-54
200
D-58. 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 1947-54
201
Summary:
D-59. Changes in selected economic series since 1947 and since 1953
202




136

NATIONAL INCOME OR EXPENDITURE
T A B L E D-l.—Gross national product or expenditure•, 1929—54
[Billions of dollars]
Gross private domestic
investment 8

Period

Total
gross
national
prod
uct

Personal
consumption
expenditures 1

New construction

Federal

Net
foreign
investment

:i
o
—__
5.1

Government purchases of
goods and services

1929

104.4

79.0 16.2

8.7

5.8 +1.7

0.8

8.5

1.3

1930
1931
1932
1933
1934

91.1
76.3
58.5
56.0
65.0

71.0 10.3
61.3 5.5
49.3
.9
46.4 1.4
51.9 2.9

6.2
4.0
1.9
1.4
1.7

2.1
1.6
.6
.5
.6

4.1
2.4
1.2
1.0
1.1

4.5
2.8
1.6
1.6
2.3

-.4
-1.3
-2.6
-1.
-1.1

.7
.2
.2
.2
.4

9.2
9.2
8.1
8.0
9.8

1.4
1.5
1.5
2.0
3.0

1935
1936
1937
1938
1939

72.5
82.7
90.
85.2
91.1

56.3
62.6 8.4
67.3 11.7
64.6 6.7
67.6

2.3
3.3
4.4
4.0
4.8

1.0
1.6
1.
2.0
2.7

1.3
1.7
2.5
2.0
2.1

3.1
4.2
5.1
3.6
4.2

1.0
2.2
-.9
.4

- . 1 10.0
11.8
.1 11.7
1.1 12.8
13.3

2.9
4.8
4.6
5.3
5.2

1940
1941
1942
1943
1944

100.6
125.8
159.1
192.5
211.4

71.9 13.2
81.9 18.1
89.7 9.9
100.5 5.6
109.8 7.1

5.5
6.6
3.7
2.3
2.7

3.0
3.5
1.7
.9
.8

2.5
3.1
2.0
1.4
1.9

2.2 1.5
5.5
4.5 1.1
6.9
1.8 - . 2
4.3
4.0 - . 8 -2.2
5.4 - 1 . 0 - 2 . 1

14.1
24.8
59.7
88.6
96.5

6.2
16.9
52.0
81.2
89.0

1945
1946
1947
1948
1949

213.6
209.2
232.2
257.3
257.3

121.7
146.6
165.0
177.6
180.6

10.4
27.1
29.7
41.2
32.5

3.8
10.3
14.0
17.9
17.5

1.1
4.0
6.3
8.6
8.3

2.7
6.3
7.7
9.3
9.2

7.7 - 1 . 1 -1.4 82.9 74.8 75.9
6.1 4.6 30.9 20.9 21.2
10.7
16.7 - 1 . 0 8.9 28.6 15.8 13.3
19.1 4.2 2.0 36.6 21.0 16.0
17.8 - 2 . 7
.5 43.6 25.4 19.3

1950
1951
1952
1953
1954

285.1
328.2
346.1
364.9
357.1

194.0
208.3
218.4
230.1
234.0

51.2
56.9
50.7
51.4
46.1

22.7
23.3
23.7
25.5
27.6

12.6
11.0
11.1
11.9
13.4

10.1
12.4
12.6
13.6
14.3

7.4 -2.2 42.0 22.1 18.5
21.1
23.2 10.4
.2 62.8 41.0 37.3
3.6 - . 2 77.2 54.0 48.5
23.3
24.4
1.5 -1.9 85.2 60.1 52.0
22.1 - 3 . 6
77.5 50.1 43.6

)
1.3
2.2
13.8
49.6
80.4

Seasonally adjusted annual rates
1953: First half
Second half
1954: First half
Second half«...
1953: First quarter,.
Second quarterThird quarterFourth quarter.
1954: First quarter__
Second quarter.
Third quarter-r
Fourth quarter

4.1 - 2 . 6
-1.1 -1.2

365.8
363.8

229.7 53.9 25.4 12.0 13.5
230.4 49.0 25.6 11.9 13.7

355.9
358.2

231.8 45.0 26.5 12.2 14.2 22.6
236.2 47.2 28.7 14.4 14.2 21.7

361. 8
369.9
367.2
360.5

228.6
230.8
231.2
229.7

51.9
55.9
52.4
45.5

25.0
25.9
25.6
25.7

11.7
12.2
12.1
11.7

13.3
13.7
13.5
13.9

24.1
2.8
24.
5.4
24.8
2.0
24.0 - 4 . 2

355.8
356.0
355.5
361.0

230.5
233.1
234.8
237.5

44.5
45.6
45.3
49.2

26.0
27.0
28.3
29.1

11.7
12.8
14.0
14.8

14.3
14.2
14.2
14.3

22.7
22.4
21.8
21.6

24.4
24.4

-4.0
-3.2

52,6
51.4

0.4 24.6
. 4 25.7

80.1 53.1 45.8
- . 1 75.0 47.0 41.4

.3 27.0
.2 28.0

— 1.8
-3.3
-1.8
-.6

-4.2 -1.1
-3.8 -1.0
-4.8 -.2
-1.5
.0

84.8
85.7

60.2
60.0

83.0
86.6
85.4
86.0

58.1
62.2
60.3
59.8

51.0
54.3
52.3
50.6

.5 24.9
.4 24.4
.4 25.1
26.2

81.9
78.3
75.6
74.3

55.0
51.3
47.9
46.1

46.9
44.7
42.1
40.6

26.9
27.0
27.7
28.2

1
See appendix table D-6 for major components.
* See appendix table D-7 for more detail and explanation of components.
P • For 1947-54 "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,
International 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 d e fense expenditures for goods and services since 1947 are as follows: 1947,12.3 billion dollars; 1948,11.6 billion;
1949,13.6 billion; 1950,14.3 billion; 1951.. 33.9 billion; 1952,46.1 billion; 1953, 50.0 billion; and 1954,39.6 billion.
4
Not available separately.
* Less than 50 million dollars.
* Preliminary; fourth quarter by Council of Economic Advisers.
NOTE.—Detail will not necessarily add to totasl because of rounding.
Source: Department of Commerce (except as noted).




137

TABLE D-2.—Gross national product or expenditure in 1954 prices, 1929-54 *
[Billions of dollars, 1954 prices]
Personal consumption
expenditures

Period

Gross private domestic investment

New construction
Total
gross
Pro- Change
Nonnational
in
ducers' busiResiproduct Total Dur- du- Serv- Total
able rable ices
durable ness
dengoods goods
Total tial Other equip- invenment
(nontories
farm)

1929 . -

181.0 127.4

14.6

66.4

46.5

34.9

20.9

8.7

12.2

11.2

2.8

1930
1931
1932
1933
1934

164.3
152.8
130.0
125.8
138.1

120.1
116.6
105.9
103.2
108.8

11.8
10.1
7.7
7.5
8.5

63.1
62.9
57.9
56.2
60.0

45.1
43.5
40.3
39.5
40.3

23.7
15.2
4.3
3.8
7.2

15.4
10.8
6.0
4.6
5.1

5.1
4.2
2.1
1.6
1.9

10.3
6.6
3.9
3.0
3.2

8.9
6.0
3.6
3.7
5.1

—.6
-1.6
-5.2
—4.5
-3.0

1935
1936
1937 _>
1938
1939

153.0
172.5
183.7
175.2
189.4

115.6
127.6
132.1
130.2
137.7

10.5
12.9
13.6
11.2
13.2

63.4
70.6
72.9
74.2
78.3

41.8
44.0
45.6
44.8
46.2

16.3
20.7
27.8
15.6
21.6

6.7
9.4
11.3
10.1
12.1

3.1
4.6
5.0
5.1
6.8

3.6
4.8
6.3
5.0
5.3

6.8
9.3
10.6
7.3
8.6

2.8
2.0
5.9
-1.8
.9

1940 , - 1941
1942 1943 ._
1944

205.9
236.7
264.7
294.3
317.1

145.0
154.7
151.9
155.9
161.3

15.2
17.5
11.3
9.7
8.8

81.8
87.3
89.2
92.3
96.3

48.0
50.0
51,4
53.9
56.1

28.9
36.4
18.1
10 0
12.4

13.6
15.3
7.8
4.4
4.7

7.3
7.8
3.6
1.7
1.4

6.3
7.4
4.2
26

11.0
12.9
7.5
6.9
9.1

4.3
8.2
2.9
—1.2
—1.4

1945 -1946
1947
1948 . .
1949

311.8
279.3
279.3
292.4
291.4

172.2
192.2
195.3
199.1
204.2

10.0
19.3
23.0
23.8
25.1

103.6
109.1
106.4
106.6
108.2

58.6
63.9
65.9
68.7
70.9

17.5
41.3
39.8
49.1
37.6

6.5
16.0
18.2
20.8
20.4

1.8
6.1
7.9
9.6
9.5

4.7
10.0
10.2
11.1
10.8

12.7
16.1
21.9
23.2
20.7

—1.7
9.2
-.3
5.1
—3.4

1950
1951
1952 - .
1953
1954 »

318.5
340.2
353.2
368.5
357.1

216.5
217.8
224.5
233.4
234.0

30.5
27.1
26.6
29.7
29.0
*• ':

111.1
113.1
117.0
120.2
120.5

74.9
77.6
80.9
83.5
84.5

57.6
58.0
51.6
51.5
46.1

25.7
24.6
24.4
25.7
27.6

13.9
11.4
11.2
11.8
13.4

11.8
13.2
13.2
13.9
14.3

24.0
24.2
24.0
24.6
22.1

7.9
9.2
3.2
1.1
-3.6

m

•:

See footnotes at end of table.




138

O

Q

TABLE D-2.—Gross national product or expenditure in 1954 prices, 1929-541
-Continued
[Billions of dollars, 1954 prices]
Government purchases of goods and services
Net
foreign
investment

Period

Federal
Total
Total«

_

_

-

1950
1951
1952
1953
1954*

_

_

(«)

(4)

15 4

20.2
21.2
20.1
19.5
22.4

3.1
3.4
3.5
4.9
6.6

(4}
i

(4)

i
i
i

(i)

17 1
17.9
16.6
14 6
15.9

22.7
26.1
25.3
28.3
29.5

6.3
9.6
9.1
11.1
10.4

3
32.6

(4)

7.8

16 4
16.5
16 2
17.2
19.0

1.3
-.3
-2.5
-6.1
-6.1

30.7
45.9
97.3
134.6
149.5

12.8
29.1
82.2
121.0
136.2

4.5
23.8
78.4
119.8
135.7

8.3
5.5
4.3
2.2
2.5

17.9
16.7
15 1
13.6
13.3

-5.0
4.0
8.3
.7
-.6

-

1940
1941
1942 .
1943
1944

2.7

—1.6
-1.8
—1.5
1.1
.6

_
_

18.2

.3
-.2
-.3
-.7
-.3

.

1935
1936
1937
1938..
1939

1945
1946 1947
1948
1949

Other

State
and
local

0.5

1929
1930
1931
1932
1933 .
1934

National
security 8

127.2
41.8
35.9
43.5
50.2

113.6
26.3
18.3
24.2
28.2

115.3
26.7
15.4
18.4
21.4

1.5
3.1
4.4
6.5
7.3

13.5
15.4
17.6
19.3
22.0

-3.0
.6
-.3
-2.6
-.6

47.5
63.8
77.4
86.1
77.5

23.8
39.7
53.0
60.4
50.1

19.9
36.1
47.6
52.3
43.6

4.2
4.1
5.7
8.5
6.8

23.7
24.1
24.4
25.7
27.5

(

(4)
(4)

1 These estimates represent an approximate conversion of the Department of Commerce series in 1947
prices. (See appendix table D-3.) This was done by major components, using the implicit price indexes
converted to a 1954 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."
2
Net of Government sales, which are not shown separately in^this table. See appendix table D - l for
Government sales in current prices.
3 See appendix table D - l , footnote 3.
4 Not available separately.
» Preliminary.
NOTE.—Detail will not necessarily add to totals because of rounding.
Source: Council of Economic Advisers.




139

TABLE D-3.—Gross national product or expenditure in 7947 prices, 1929-54 *
[Billions of dollars, 1947 prices]
Personal consumption
expenditures

Period

Gross private domestic
investment

Total
gross
naPro- Change
tional
New ducin
prodDu- Non- Servducon- ers'
busiuct Total rable rable ices Total struc- duness
goods goods
rable
tion equip- invenment tories

Government
purchases of goods
and services

Net
Gross
forprieign
vate
inprodState
vestment Total Fed- and uct*
eral local

1929

149.3 107.3

13.0

58.1

36.2

26.8

16.1

8.5

2.1

1.6

13.6

2.3

11.2

142.3

1930
1931
1932
1933
1934

135.2 100.9
126.6 98.0
107.6 88.9
103.7 86.6
113.4 91.5

10.5
9.1
6.9
6.7
7.6

55.2
55.0
50.7
49.2
52.5

35.2
33.9
31.4
30.8
31.4

17.9
12.0
3.3
2.1
4.3

11.8
8.3
4.6
3.5
3.9

6.8
4.6
2.7
2.9
3.9

—7
—'.9
—4.1
—4.2
—3.5

1.2
.6
.3
.1
.5

15.1
15.9
15.1
14.9
17.2

2.7
2.9
3.0
4.3
5.7

12.5
13.0
12.1
10.6
11.6

127.8
119.1
100.3
95.6
103.9

1935
1936
1937
1938
1939

127.8
142.5
153. 5
145.9
157.5

97.3
107.6
111.5
109. 8
116.3

9.4
11.6
12.2
10.0
11.8

55.4
61.8
63.8
64.9
68.5

32.5
34.3
35.5
34.9
36.0

13.6
15.2
22.5
12.1
16.8

5.2
7.3
8.7
7.8
9.4

5.2
7.1
8.1
5.6
6.5

3.2
.9
5.7
—1.2
.8

—.5
-.7
—.2
1.9
1.6

17.4
20.3
19.7
22.1
22.8

5.4
8.3
7.8
9.6
9.0

11.9
12.0
11.8
12.5
13.8

117.6
130.3
142.1
133.6
145.0

1940
1941
1942
1943
1944

171.6
198.2
223.6
248.9
268.2

122.5
130.9
128.1
131.4
135.9

13.5
15.6
10.1
8.7
7.9

71.6
76.4
78.0
80.8
84.3

37.4
38.9
40.1
42.0
43.7

22.8
28.9
14.7
7.4
9.2

10.6
11.8
6.0
3.4
3.6

8.4
9.8
5.7
5.2
6.9

3.9
2.2 24.1 11.0
7.3
1.1 37.3 25.1
3.0 —1.1 81.8 70.8
—1.2 —4.1 114.2 104.3
- 1 . 3 —4.0 127.1 117.4

13.0
12.2
11.0
9.9
9.7

158.6
181.7
198.7
209.0
222.0

1945
1946
1947
1948
1949

263.1
233.8
232.2
243.9
241.5

145. 2
162.4
165.0
168.0
172.3

8.9
17.2
20.6
21.3
22.4

90.6
95.4
93.1
93.3
94.7

45.6
49.8
51.3
53.5
55.2

13.0
32.4
29.7
38.8
28.1

5.0
12.3
14.0
16.1
15.8

9.7
12.3
16.7
17.7
15.7

—1.6 —2.9 107.8
7.8
5.0 34.0
—1.0
8.9 28.6
5.1
2.1 34.9
-3.5
.8 40.3

97.9
22.7
15.8
20.8
24.3

9.9
11.2
12.8
14.0
16.0

218.0
211.2
215.6
227.3
224.0

1950
1951
1952
1953
1954 3

264.7
282.9
294.2
306.6
297.0

182.8
183.6
189.2
196.7
197.1

27.2 97.2
24.2 99.0
23.8 102.4
26.5 105.2
25.9 105.4

58.4
60.4
63.0
65.0
65.8

45.3
45.2
39.9
39.3
35.2

20.0
19.0
18.9
19.9
21.4

18.3
18.4
18.3
18.8
16.8

7.0 - 1 . 1
7.8
2.3
2.8
1.6
.6 - . 3
-3.0
1.4

20.5
34.2
45.7
52.1
43.2

17.3
17.5
17.8
18.7
20.0

246.6
259.9
269.3
281.9
272.9

37.7
51.8
63.5
70.8
63.2

1
See National Income, 1954 Edition, A Supplement to the Survey of Current Business, for explanation
of 2conversion of estimates in current prices to those in 1947 prices and for implicit deflators.
Total gross national product less compensation of general government employees.
* Preliminary estimates by Council of Economic Advisers.
NOTE.—Detail will not necessarily add to totals because of rounding.
Source: Department of Commerce (except as noted).




I4O

TABLE D-4.—Gross private and government product in current and 1954 prices, 1929—54
[Billions of dollars]
Current prices

1954 prices

Gross
Gross private product 1
Total Gross private product * govern- Total
gross
gross
ment national
national
prod- product Total Farm 2 Nonproduct Total Farm 2 Nonuct*
farm
farm

Year

Gross
government
products

1929

104.4

100.1

9.8

90.3

4.3

181.0

171.7

16.7

155.0

9.3

1930
1931
1932
1933
1934

91.1
76.3
58.5
56.0
65.0

86.6
71.6
54.0
51.3
59.4

7.7
6.2
4.4
4.6
4.3

78.8
65.4
49.6
46.7
55.1

4.5
4.7
4.4
4.7
5.6

164.3
152.8
130.0
125.8
138.1

154.5
142.9
120.3
115.2
125.6

15.4
18.0
17.1
16.2
13.4

139.1
124.9
103.2
99.0
112.2

9.8
9.9
9.7
10.6
12.5

1935
1936
1937
1938
1939

72.5
82.7
90.8
85.2
91.1

66.6
75.5
83.9
77.6
83.5

6.9
6.3

5.9
7.3

6.7
6.5

59.6
69.2
75.8
70.9
77.0

7.6
7.6

153.0
172. 5
183.7
175.2
189.4

139.6
156.5
168.8
159.0
173.0

17.2
13.9
18.7
18.3
18.1

122.4
142.6
150.1
140.7
154.9

13.4
16.0
14.9
16.2
16.3

1940
1941
1942
1943
1944

100.6
125.8
159.1
192.5
211.4

92.8
116.4
144.0
167.0
179.2

6.8
9.4
13.4
15.3
15.7

86.0
107.0
130.6
151.7
163.5

7.8
9.4
15.1
25.6
32.2

205.9
236.7
264.7
294.3
317.1

188.8
215.1
232.0
241.8
256.3

18.0
19.3
21.4
19.5
20.2

170.8
195.8
210.6
222.3
236.1

17.1
21.7
32.7
52.5
60.8

1945
1946
1947
1948
1949

213.6
209.2
232.2
257.3
257.3

178.4
188.5
215.6
240.0
238.0

16.2
18.8
20.6
23.7
20.1

162.2
169.7
195.0
216 2
217.8

35.2
20.7
16.7
17.4
19.3

311.8
279.3
279.3
292 4
291.4

252.4
249.6
257.3
270.5
268.4

19.1
20.0
18.3
21.9
20.1

233.3
229.6
239.0
248.6
248.3

59.4
29.7
21.9
21.9
23.0

1950.
1951
1952
1953.
1954<

285.1
328.2
346.1
364.9
357.1

264.3
301.0
315.1
333.4
325.4

21.1
24.6
23.3
21.7
21.3

243.1
276.4
291.8
311.8
304.1

20.8
27.2
31.0
31.4
31.6

318.5
340.2
353.2
368.5
357.1

294.8
309.9
320.4
336.0
325.4

21.5
20.2
20.4
21.1
21.3

273.3
289.7
300.0
314.9
304.1

23.8
30.3
32.8
32.5
31.6

_.

. .

8.1

6.9

1
Gross national product less compensation of general government employees; i. e. gross product accruing
from domestic business, households, and institutions, and from the rest of the world.
* See Survey of Current Business, August 1954, pp. 20-24, for estimates in both current and 1947-49 prices
and for the implicit price deflators.
3
Includes compensation of general government employees and excludes compensation of employees in
government enterprises. Government enterprises are those agencies of government whose operating costs
are at least to a substantial extent covered by the sale of goods and services, in contrast to the general activities of government which are financed mainly by tax revenues and debt creation. Government enterprises, in other words, conduct operations essentially commercial in character, even though they perform
them under governmental auspices. The Post Office and public power systems are typical examples of
government enterprises. On the other hand, State universities and public parks, where the fees and admissions cover only a nominal part of operating costs, are part of general government activities.
* Preliminary.
NOTE.—Detail will not necessarily add to totals because of rounding.
Sources: Department of Commerce and Council of Economic Advisers.




141

TABLE D-5.—The Nation's income, expenditure, and saving, 1952-54
[Billions of dollars]
1962

Economic group

Consumers:
Disposable personal income
Personal consumption expenditures
__-_---_
Personal net saving ( + )
Business:
Gross retained earnings
Gross private domestic investment
Excess of investment (—) __

Excess
Excess
Excess
of reof reof reEx- ceipts ReEx- ceipts ReEx- ceipts
Re- pendi- (+)
(+)
(+)
ceipts tures or ex- ceipts pendi- or ex- ceipts pendi- or extures penditures pendipenditures
tures
tures
(-)
(-)
(-)
236.9

Net receipts

234.0

~~20~6~

35.1
60.7

19.6

37.3
51.4

46.1

—16 3

—16 3

-9.0

—1.9

—.2
.2

—.6
.6

1.9

91.1

95.9

16.7

17.3

19.9

74.3

78.6

70.2

90.1

93.9

102.5

97.4

16.7

17.3

19.9

77.2

Purchases of goods and services

85.2

77.5

Surplus ( + ) or deficit ( - )
on income and product
account

Gross national product.

230.1

"I8.T

34.3

Total government expenditures.
Less: Transfers, interest, and
subsidies (net)

Statistical discrepancy.

253.6

250.1
218.4

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).

19541

1963

-6.6

-2.8
.6
346.1

.6
346.1

1.0
364.9

1.0
364.9

-7.3
-4.0
357.1

-4.0
357.1

i Preliminary estimates 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
as noted).




14a

TABLE D-6.—Personal consumption expenditures, 1929-54
[Billions of dollars]

Period

Total
Durable goods
Nondurable goods
Services
personal
consumpAutotion
moex- Total biles Other Total Food* Cloth- Other Total Hous- Other
ing'
ing'
and
pendiparts
tures

1929..

79.0

9.2

3.2

6.0

37.7

19.5

9.4

8.8

32.1

11.4

20.6

1930..
1931..
1932..
1933..
1934..

71.0
61.3
49.3
46.4
51.9

7.2
5.5
3.6
3.5
4.2

2.2
1.6
.9
1.1
1.4

5.0
3.9
2.7
2.4
2.8

34.0
28.9
22.8
22.3
26.7

18.0
14.7
11.4
11.5
14.2

8.0
6.9
5.1
4.6
5.7

8.0
7.3
6.3
6.1
6.8

29.8
26.9
22.9
20.7
21.0

11.0
10.3
9.0
7.9
7.6

18.8
16.6
13.9
12.8
13.4

1935..
1936..
19371938..
1939..

56.3
62.6
67.3
64.6
67.6

5.1
6.3
6.9
5.7
6.7

1.9
2.3
2.4
1.6
2.2

3.2
4.0
4.5
4.1
4.5

29.3
32.8
35.2
34.0
35.1

16.2
18.4
19.9
18.9
19.2

6.0
6.6
6.8
6.8
7.1

7.1
7.9
8.5
8.3
8.8

21.9
23.5
25.1
25.0
25.8

7.6
7.9
8.4
8.8
9.0

14.2
15.5
16.7
16.2
16.8

1940..
1941..
1942..
1943..
1944..

71.9
81.9
89.7
100.5
109.8

7.8
9.7
7.0
6.6
6.8

2.7
3.4
.7
.8
.8

5.0
6.3
6.2
5.8
6.0

37.2
43.2
51.3
69.3
65.4

20.3
23.6
28.8
33.7
37.4

7.4
8.8
11.0
13.4
14.6

9.4
10.8
11.6
12.2
13.3

26.9
29.0
31.5
34.7
37.7

9.3
10.0
10.8
11.3
11.9

17.6
19.0
20.6
23.3
25.8

1945..
1946..
1947..
1948..
1949..

121.7
146.6
165.0
177.6
180.6

8.1
15.9
20.6
22.2
23.6

1.0
3.9
6.3
7.3
9.5

7.1
12.0
14.3
14.9
14.1

73.2
84.5
93.1
98.7
96.9

41.6
48.8
54.2
57.3
56.5

16.5
18.2
18.8
19.6
18.5

15.2
17.5
20.1
21.8
21.9

40.4
46.2
51.3
56.7
60.1

12.4
13.6
15.4
17.5
19.4

28.0
32.6
35.9
39.1
40.7

1950..
1951..
1952..
1953..
1954«.

194.0
208.3
218.4
230.1
234.0

28.6
27.1
26.8
29.7
29.0

12.4
10.9
10.6
13.1
12.5

16.3
16.3
16.2
16.6
16.5

100.4
111.1
116.0
118.9
120.5

58.8
66.5
70.0
71.8
73.1

18.5
19.8
20.1
19.8
19.6

23.1
24.7
25.9
27.3
27.8

65.0
70.1
75.6
81.4
84.5

21.4
23.4
25.6
27.7
29.4

43.7
46.8
50.0
53.7
55.2

Seasonally adjusted annual rates
1953: First half
Second half

229.7
230.4

30.4
29.2

13.6
12.6

16.7
16.5

119.2
118.7

71.8
71.9

20.2
19.4

27.2
27.3

80.2
82.6

27.1
28.3

53.1
54.3

1954: First half
Second half*
1953: First quarter
Second quarter..
Third q u a r t e r Fourth quarter..

231.8
236.2

28.4
29.5

12.1
12.8

16.3
16.6

119.4
121.6

72.2
74.0

19.6
19.6

27.6
28.0

84.0
85.1

29.1
29.6

54.8
55.5

228.6
230.8
231.2
229.7

30.4
30.3
30.3
28.0

13.5
13.7
13.5
11.7

16.9
16.6
16.7
16.4

118.8
119.6
118.6
118.7

71.7
72.0
71.9
71.9

20.2
20.2
19.4
19.5

26.9
27.4
27 3
27.3

79.4
80.9
82.3
83.0

26.9
27.3
28.0
28.6

52.5
53.6
54.3
54.3

1954: First quarter....,
Second quarter..
Third q u a r t e r Fourth quarter *.

230.5
233.1
234.8
237.5

28.0
28.8
28.9
30.1

11.6
12.6
12.4
13.3

16.4
16.2
16.5
16.8

118.8
120.0
121.1
122.0

72.0
72.5
73.7
74.2

19.5
19.7
19.4
19.8

27.3
27.8
27.9
28.0

83.6
84.3
84.8
85.4

29.0
29.3
29.5
29.7

54.6
55.1
55.3
55.7

i Includes alcoholic beverages.
«Includes shoes and standard clothing issued to military personnel.
* Includes imputed rental value of owner-occupied dwellings.
* Preliminary; fourth quarter by Council of Economic Advisers.
NOTE.—Dotail will not necessarily add to totals because of rounding.
Source: Department of Commerce (except as noted).




TABLE D-7.—Gross private domestic investment, 1929-54
[Billions of dollars]
Total Nonfarm producers'
Farm equipment
gross plant and equipment
and construction
private
doConConmestic
nvest- Total i Equip- struc- Total * Equip- strucment 1 tion*
ment tion
ment

Period

1929

......

Residential
construction
(nonfarm)

Other
Net change In
pri- business inventories
vate
construcNontion* Total farm 8 Farm

16.2

9.3

5.2

4.1

0.9

0.6

0.3

3.6

0.7

1.7

1.8

10.3
5.5
.9
1.4
2.9

7.2
4.4
2.4
2.2
2.9

4.0
2.6
1.4
1.5
2.1

3.3
1.8
1.0
.8
.9

.7
.4
.2
.2
.3

.5
.3
.1
.1
.3

.2

i(

2.1
1.6
.6
.5
.6

.7
.5
.2
.1
.1

-.4
-1.3
-2.6
-1.6
-1.1

-.1
-1.6
-2.6
-1.4
.2

-.3
-1.3

1935
1936
1937
1938
1939

6.3
8.4
11.7
6.7
9.3

3.7
5.0
6.5
4.7
5.3

2.7
3.6
4.5
3.1
3.7

1.0
1.4
2.1
1.5
1.6

.5
.7
.8
.7
.7

.4
.5
.6
.5
.5

.i
.2
.2
.2
.2

1.0
1.6
1.9
2.0
2.7

.1
.2
.2
.3
.3

.9
1.0
2.2
-.9
.4

.4
2.1
1.7
-1.0
.3

.5
-1.1
.5
.1
.1

1940
1941
1942 .
1943
1944

13.2
18.1
9.9
5.6
7.1

6.9
8.6
5.3
4.6
6.2

4.9
6.1
3.7
3.5
4.7

2.0
2.5
1.6
1.1
1.5

.8
1.1
.9
.8
1.0

.6
.8
.7
.6
.7

.2
.3
.3
.3
.3

3.0
3.5
1.7
.9
.8

.3
.3
.2
.1
.1

2.2
4.5
1.8
— 8

1.9
4.0
.7
-.6
-.6

.3
.5
1.2
-.2
-.4

1945
1946
1947
1948
1949 -

10.4
27.1
29.7
41.2
32.5

9.2
14.8
20.7
23.5
21.7

6.9
10.0
15.0
16.8
15.3

2.3
4.8
5.7
6.7
6.4

1.0
1.6
3.0
3.9
4.0

.7
.7
1.6
2.3
2.5

.3
.9
1.4
1.5
1.5

1.1
4.0
6.3
8.6
8.3

-.6
6.4
1.3
3.0
-1.9

-.5
-.2
-2.3
1.1
-.9

51.2
56.9
50.7
51.4
46.1

25.5
29.1
29.7
32.1
30.6

18.5
20.4
20.6
22.0
20.1

7.0
8.8
9.1
10.1
10.6

4.2
4.7
4.6
4.1
3.6

2.6
2.8
2.7
2.4
2.1

1.6
1.8
1.9
1.7
1.6

12.6
11.0
11.1
11.9
13.4

.2
.6 - I . I
6.1
.7
1.0 - 1 . 0
4.2
1.3
-2.7
7.4
1.5
1.7 10.4
1.6
3.6
1.8
1.5
2.1 —3.6

6.4
9.0
3.0
2.2
-3.7

.9
1.4
.7
-.7
.1

1930 1931
1932
1933
1934

.-

_

1950
1951
1952
1953
1954 8

-i!o

-0.2
-.3
.3

0)

Seasonally adjusted annual rates
1953:
First half
Second half

53.9
49.0

31.8
32.4

21.8
22.2

10.0
10.2

4.3
4.0

2.5
2.2

1.8
1.7

12.0
11.9

4.1
1.7
1.8 - 1 . 1

4.8
-.4

-0.6
-.8

1954:
First half
Second half •

45.0
47.2

31.1
30.2

20.5
19.6

10.6
10.6

3.7
3.6

2.1
2.0

1.6
1.5

12.2
14.4

2.0 - 4 . 0
2.2 - 3 . 2

-4.1
-3.4

.0
.2

1953:
First quarter
Second quarter.
Third quarter...
Fourth quarter.

51.9
55.9
52.4
45.5

31.4
32.2
32.6
32.2

21.6
22.0
22.5
21.8

9.8
10.1
10.1
10.4

4.3
4.3
4.0
3.9

2.5
2.5
2.3
2.2

1.8
1.8
1.7
1.7

11.7
12.2
12.1
11.7

2.8
1.6
5.4
1.8
2.0
1.8
1.9 - 4 . 2

3.3
6.2
2.9
-3.7

-.4
-.8
-.9
-.6

1954:
First quarter
Second quarterThird quarter..
Fourth quarter*.

44.5
45.6
45.3
49.2

31.4
30.8
30.3
30.1

20.7
20.3
19.8
19.5

10.7
10.5
10.5
10.6

3.7
3.7
3.5
3.6

2.1
2.1
2.0
2.1

1.6
1.6
1.5
1.5

11.7
12.8
14.0
14.8

1.9
2.1
2.2
2.2

-4.2
-3.8
-4.8
-1.5

-4.2
-4.0
-5.0
-1.7

-.1
.2
.2
.2

i Items for nonfarm producers' plant and equipment are not comparable with those shown in appendix
table D-28, principally because the latter exclude equipment and construction outlays charged to current
expense and also investment by nonprofit organizations and professional persons.
* Total producers' durable equipment less "farm machinery and equipment" and fanners' purchases of
tractors and business motor vehicles.
* Industrial buildings, public utilities, gas- and oil-well drilling, warehouses, office and loft buildings,
stores, restaurants, and garages.
4
Farm construction (residential and nonresidential) plus "farm machinery and equipment" and farmers'
purchases of tractors and business motor vehicles. (See footnote 2.)
«Includes religious, educational, social and recreational, hospital and institutional, miscellaneous nonresidential, and all other private construction.
• After revaluation adjustment.
' Less than 50 million dollars.
• Preliminary; 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).




144

TABLE D-8.—National income by distributive shares, 1929-54
[Billions of dollars]
Business and proCorporate profits
fessional income
and inventory
and inventory
valuation
valuation
adjustment
In- Rentadjustment
Comcome al inTotal penNet
of
naIn- inIn- farm come
Intional sation
of
ven- terest
ven- pro- perin- 1 of emcome
Cor- tory
tory prie- sons
come ployof
ees 3
porate valuunin- valuTotal corpo- ation tors'
Total profits ation
before adrated adtaxes * justjustenter- ment
ment
prises

Period

6 0

5.4

-.5
-.1

4.1
3.2
1.9
2.4
2.4

4.8
6.6
3.8
1.6
2.7 - 2 . 0
2.0 - 2 . 0
1.7
1.1

5.0
4.0
5.6
4.3
4.3

1.7
1.8
2.1
2.6
2.7

2.9
5.0
6.2
4.3
5.7

4.6
fi. 5
10.0
11.4
11.5

3.5
4.5
5.1
5.4
5.6
6.2
6.5
7.2
7.9

87.8

51.1

8.8

8.6

75.7
59.7
42.5
40.2
49.0

46.8
39.7
31.1
29.5
34.3

7.4
5.6
3.4
3.2
4.6

6.7
5.0
3.1
3.7
4.6

57.1
64.9
73.6
67.6
72.8

37.3
42.9
47.9
45.0
48.1

5.4
6.5
7.1
6.8
7.3

5.4
6.6
7.1
6.6
7.5

i()

81.6
104.7
137.7
170.3
182.6

52.1
64.8
85.3
109.6
121.3

8.4

8.5

10.9
13.9
16.8
18.0

11.5
14.3
17.0
18.1

()
-.6
-.4
-.2

181.2
179.6
197.2
221.6
216.2

123.2
117.7
128.8
140.9
140.9

19.0
21.3
19.9
21.6
21.4

19.1 - . 1 11.8
23.0 - 1 . 7 13.9
21.4 - 1 . 5 14.5
22.1 — .4 16.7
.5 12.7
21.0

240.0
277.0
291.0
305.0
300.2

154.3
180.4
195.4
209.1
207.3

22.9
24.8
25.7
26.2
25.9

24.0 - 1 . 1
25.1 - . 3
.2
25.5
26.4 - . 2
25.9

_

1935
1936
1937
1938
1939
1940

1941
1942...
1943
1944
1945
1946
1947
1948
1949
1950...
1951
1952
1953.
1954 •

.
..

10.1

0.1

1929
1930
1931
1932
1933
1934

)

.2
-.2

.

-t

13.3
16.0
14.2
12.2
11.9

0.5

6.4

3.3
2.4
1.0
-3.0
.2 -2.1

6.0
5.8
5.4
5.0
4.9

9.6
3.3
-.8
1.7
3.1
5.7
6.2
3.3
6.4

-.2
-.7
(s)

4.8
4.7
4.7
4.6
4.6

9.1

9.3

14.5
19.7
23.8
23.0

17.0
20.9
24.6
23.3

1.0
-.7
-.2
-2.5
-1.2
-.8
-.3

4.5
4.5
4.3
3.7
3.3

18.4
17.3
23.6
30.6
28.1

19.0
22.6 - 5 . 3
29.5 - 5 . 9
32.8 - 2 . 2
1.9
26.2

3.2
3.1
3.8
4.5
5.2

8.5 35.1
9.1 39.9
10.0 38.2
10.6 38.5
10.9 135.0

40.0 - 4 . 9
41.2 - 1 . 3
1.0
37.2
39.4 - 1 . 0
35.0 ,-•1

5.9
6.8
7.4
8.4
9.1

Seasonally adjusted annual rates
1953: First half

Second half
1954: First half
Second half 6__.
1953: First quarter __
Second quarter.
Third quarter..
Fourth quarter
1954: First quarter...
Second quarter
Third quarter..
Fourth quarter

307.0
303.0

208.1
210.1

26.4
26.0

26.6
26. 2

-.2
-.2

12.8
11.7

10.5
10.7

41.2
35.7

42.2 - 0 . 9
36.7 - 1 . 0

8.1
8.8

299.2
301.0

206.5
208.0

25.7
26.1

25.7
26.1

(5)

12.6
11.3

10.8
11.0

34.5
35.4

34.5
35.6

(5)
—.1

9.0
9.2

305.9
308.2
306.2
299.9

206.2
2100
211.4
208.8

26.5
26.3
26.1
25.9

26.7
26.4
28.7
25.7

-!i
-.6
.2

13.4
12.1
11.1
12.3

10.5
10.5
10.6
10.8

41.4
41.0
38.3
33.1

42.4 - . 9
41.9 - . 9
40.9 - 2 . 6
32.5
.6

7.9
8.3
8.6
8.9

298.9
299.6
298.8
303.3

206.4
206.6
207.2
208.9

25.6
25.9
25.9
26.2

25.7
25.8
26.1
26.2

-.1
.1
-.1
.0

13.0
12.2
11.6
11.0

10.8
10.9
10.9
11.0

34.1
34.9
33.9
37.0

34.5
34.5
34.2
37.0

—.4
.4
-.3
.0

9.0
9.1
9.2
9.2

i 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 durable capital goods, and indirect business taxes.
*Wages and salaries and supplements to wages and salaries (employer contributions for social insurance; employer contributions to private pension, health, and welfare funds; compensation for injuries;
directors' fees; pay of the military reserve; and a few other minor items).
» Excludes income resulting from net reductions of farm inventories and gives credit in computing income
to net additions to farm inventories during the period.
* See appendix table D-49 for corporate tax liability (Federal and State income and excess profits taxes)
and corporate profits after taxes.
8
Less than 50 million dollars.
6
Preliminary; fourth quarter by Council of Economic Advisers.
NOTE.—Detail will not necessarily add to totals because of rounding.
Source: Departments Oommerce.(exceptjas noted).




TABLE D-9.—Relation of national income and personal income, 1929-54
[Billions of dollars]

Period

Equals:

Plus:

Less:
CorpoExcess
rate
of
profits ContriNational and in- butions wage
acincome
venfor
tory
social cruals
over
valu- insurdisation
ance
burseadjustments
ment

Government
transfer
payments

Net
interest
paid
by
government

Dividends

Business
Pertrans- sonal
fer
pay- income
ments

1929

87.8

10.1

0.2

0.9

1.0

5.8

0.6

85.8

1930
1931
1932
1933 .
1934

75.7
59.7
42.5
40.2
49.0

66
1.6
—2 0
—2.0
1.1

.3
.3
.3
.3
.3

1.0
2.1
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

76.9
65.7
50.1
47.2
53.6

57.1
64.9
73.6
67.6
72.8

2.9
50
6.2
4.3
5.7

.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
4.5
4.7
3.2
3.8

.6
.6
.6
.4
.5

60.2
68.5
73.9
68.6
72.9

81.6
104.7
137.7
170.3
182.6

9.1
14.5
19.7
23.8
23.0

2.3
2.8
3.5
4.5
5.2

2.7
2.6
2.6
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

78.7
96.3
123.5
151.4
165.7

1945
1946
1947
1948
1949

181.2
179.6
197.2
221.6
216.2

18 4
17.3
23.6
30.6
28.1

6 1
60
5.7
5.2
5.7

56
10.9
11.1
10.5
11.6

3.7
4.5
4.4
4.4
4.6

4.7
5.8
6.5
7.2
7.5

.5
.6
.7
.7
.8

171.2
178.0
190.5
208.7
206.8

1950
1951
1952
1953
1954 *

240.0
277.0
291.0
305.0
300.2

35.1
39.9
38.2
38.5
35.0

6.9
8.2
8.7
8.8
9.7

14.3
11.6
12.1
12.8
14.8

4.7
4.8
4.9
5.0
5.4

9.2
9.1
9.1
9.4
9.9

.8
1.0
1.0
1.0
1.0

227.1
255.3
271.2
286.1
286.5

1935
1936
1937
1938
1939
1940
1941
1942
1943
1944

.

„
..

. . . .

0.2
-.2

.1
—.1

Seasonally adjusted annual rates
1953: First half
Second half

307.0
303.0

41.2
35.7

8.8
8.6

1954: First half
Second half*

299.2
301.0

34.5
35.4

9.8
9.6

1953: First quarter
Second quarter
Third quarter
Fourth quarter...

305.9
308.2
306.2
299.9

41.4
41.0
38.3
33.1

8.8
8.9
8.7
8.6

1954: First quarter
Second quarter
Third quarter
Fourth quarter i_.

298.9
299.6
298.8
303.3

34.1
34.9
33.9
37.0

9.8
9.7
9.6
9.6

1

-.1
—.1
-.1

12.6
13.0

5.0
5.2

9.2
9.6

1.0
1.0

284.8
287.4

14.5
15.0

-0.1

5.2
5.4

9.6
10.1

1.0
1.0

285.4
287.6

12.6
12.6
12.6
13.3

4.9
5.0
5.1
5.2

9.1
9.3
9.5
9.6

1.0
1.0
1.0
1.0

283.3
286.4
287.5
287.3

14.2
14.8
14.7
15.4

5.2
5.3
5.4
5.5

9.6
9.6
9.8
10.4

1.0
1.0
1.0
1.0

285.1
285.7
286.2
289.0

Preliminary; 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).




I46

TABLE D-10.—Sources of personal income, 1929-54
[Billions of dollars]

Period

Proprietors'
Labor
income
income*
(wage and
Rental
Per- TransTotal
salary
income Divi- sonal fer paypersonal disburseBusiof
dends interest ments
income ments
income
and other Farm ness and persons
profeslabor
sional
income) *

Less:
Personal
Noncontri- agriculbutions tural
for
personal
social income 1
insurance

1929-

85.8

51.0

6.0

8.8

5.4

5.8

7.4

1.5

0.1

77.7

19301931193219331934..

76.9
65.7
50.1
47.2
53.6

46.7
39.6
30.9
29.4
34.1

4.1
3.2
1.9
2.4
2.4

7.4
5.6
3.4
3.2
4.6

4.8
3.8
2.7
2.0
1.7

5.5
4.1
2.6
2.1
2.6

6.9
6.9
6.6
6.2
6.1

1.5
2.7
2.2
2.1
2.2

.1
.2
.2
.2
.2

70.8
60.9
46.9
43.6
49.8

19351936..
193719381939-

60.2
68.5
73.9
68.6
72.9

37.2
42.5
46.7
43.6
46.6

5.0
4.0
5.6
4.3
4.3

5.4
6.5
7.1
6.8
7.3

1.7
1.8
2.1
2.6
2.7

2.9
4.5
4.7
3.2
3.8

5.9
5.8
5.9
5.8
5.8

2.4
3.5
2.4
2.8
3.0

.2
.2
.6
.6
.6

53.9
63.2
67.0
62.8
67.1

19401941—
194219431944-

78.7
96.3
123.5
151.4
165.7

50.5
62.8
83.0
106.7
118.5

4.6
6.5
10.0
11.4
11.5

8.4
10.9
13.9
16.8
18.0

2.9
3.5
4.5
5.1
5.4

4.0
4.5
4.3
4.5
4.7

5.8
5.8
5.8
5.8
6.2

3.1
3.1
3.1
3.0
3.6

.7
.8
1.2
1.8
2.2

72.6
88.0
111.5
137.6
151.6

19451946..
194719481949-

171.2
178.0
190.5
208.7
206.8

119.4
113.8
125.2
137.9
137.4

11.8
13.9
14.5
16.7
12.7

19.0
21.3
19.9
21.6
21.4

5.6
6.2
6.5
7.2
7.9

4.7
5.8
6.5
7.2
7.5

6.9
7.6
8.2
9.0
9.8

6.2
11.4
11.8
11.3
12.4

2.3
2.0
2.1
2.2
2.2

156.8
161.1
172.8
188.5
190.8

19501951..
1952..
1953..
1954 *
.

227.1
255.3
271.2
286.1
286.5

150.3
175.6
190.6
204.4
202.2

13.3
16.0
14.2
12.2
11.9

22.9
24.8
25.7
26.2
25.9

8.5
9.1
10.0
10.6
10.9

9.2
9.1
9.1
9.4
9.9

10.6
11.6
12.3
13.5
14.5

15.1
12.6
13.1
13.8
15.8

2.9
3.4
3.8
4.0
4.6

210.5
235.7
253.3
270.0
270.8

268.2
271.8

Seasonally adjusted annual rates
1953: First h a l f Second half

284.8
287.4

203.2
205.6

12.8
11.7

26.4
26.0

10.5
10.7

9.2
9.6

13.0
13.9

13.6
14.0

4.0
4.0

1954: First h a l f Second half 4 —

285.4
287.6

201.4
203.1

12.6
11.3

25.7
26.1

10.8
11.0

9.6
10.1

14.3
14.6

15.5
16.0

4.6
4.6

272.6

1953: First quarter—
Second quarterThird quarterFourth quarter.

283.3
286.4
287.5
287.3

201.3
205.2
206.9
204.3

13.4
12.1
11.1
12.3

26.5
26.3
26.1
25.9

10.5
10.5
10.6
10.8

9.1
9.3
9.5
9.6

12.8
13.3
13.7
14.1

13.6
13.6
13.6
14.3

3.9
4.0
4.1
4.0

266.2
270.3
272.5
271.2

1954: First q u a r t e r Second quarterThird quarterFourth quarter *.

285.1
285.7
286.2
289.0

201.3
201.6
202.2
204.0

13.0
12.2
11.6
11.0

25.6
25.9
25.9
26.2

10.8
10.9
10.9
11.0

9.6
9.6
9.8
10.4

14.2
14.4
14.6
14.7

15.2
15.8
15.7
16.4

4.7
4.6
4.6
4.6

268.3
269.6
270.8
274.4

* The total of wage and salary disbursements and other labor income differs from compensation of emoyees in appendix table D-8 in that it excludes employer contributions for social insurance and] includes
plo
e
the excess of wage disbursements over wage accruals.
»Excludes income resulting from net reductions of inventories and gives credit in computing income to
net additions to inventories during the period.
* Nonagricultural income is personal income exclusive of net income of unincorporated farm enterprises,
farm wages, agricultural net interest, and net dividends paid by agricultural corporations.
* Preliminary; 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).




147

TABLE D - l 1.—Disposition of personal income, 1929-54
Equals:

Equals:
Personal
income Personal
taxes l

Period

Dispos- Personal
conPersonal
able
personal sumption saving
expendiincome
tures

Saving as
percent
of disposable
personal
income

Billions of dollars
1929

85.8

2.6

83.1

79.0

4.2

5.0

1930
1931
1932
1933
1934

76.9
65.7
50.1
47.2
53.6

2.6
19
.
15
.
15
.
16
.

74.4
63.8
48.7
45.7
52.0

71.0
61.3
49.3
46.4
51.9

3.4
2.5
-.6
-.6
.1

4.6
3.9

60.2
68.5
73.9
68.6
72.9

19
.
2.3
2.9
2.9
2.4

58.3
66.2
71.0
65.7
70.4

56.3
62.6
67.3
64.6
67.6

2.0
3.6
3.7
1.1
2.9

3.5
5.4
5.3
1.6
4.1

78.7
96.3
123.5
151. 4
165.7

2.6
3.3
6.0
17.8
18.9

76.1
93.0
117.5
133. 5
146.8

71.9
81.9
89.7
100.5
109.8

4.2
11.1
27.8
33.0
36.9

5.5
11.9
23.6
24.7
25.2

171.2
178.0
190.5
208.7
206.8

20.9
18.8
21.5
21.1
18.7

150.4
159.2
169.0
187.6
188.2

121.7
146.6
165.0
177.6
180.6

28.7
12.6
4.0
10.0
7.6

19.1
7.9
2.4
5.3
4.0

227.1
255.3
271.2
286.1
286.5

20.9
29.3
34.4
36.0
32.9

206.1
226.1
236.9
250.1
253.6

194.0
208.3
218.4
230.1
234.0

12.1
17.7
18.4
20.0
19.6

5.9
7.8
7.8
8.0
7.7

-.
- -

1935
1936
1937
1938
1939
1940
1941
1942
1943
1944

.

1945
1946
1947
1948
1949
1950
1951
1952
1953
1954 2

.

.__.

-

-1.3

-1.4
.2

Billions of dollars, seasonally adjusted annual rates
1953: First half.
Second half
1954: First half.
_.
Second half *
1953: First quarter
Second quarter..
Third quarter...
Fourth quarter..

284.8
287.4

35.7
36.2

249.1
251.2

229.7
230.4

19.4
20.8

7.8
8.3

285.4
287.6

32.8
33.0

252.6
254.6

231.8
236.2

20.8
18.4

8.2
7.2

283.3
286.4
287.5
287.3

35.5
35.9
36.3
36.1

247.8
250.4
251.2
251.2

228.6
230.8
231.2
229.7

19.2
19.6
20.0
21.5

7.7
7.8
8.0
8.6

1954: First quarter
Second quarter..
Third quarter.-_
Fourth quarter *

285.1
285.7
286.2
289.0

32.8
32.9
32.9
33.1

252.3
252.9
253.2
255.9

230.5
233.1
234.8
237.5

21.8
19.7
18.4
18.4

8.6
7.-8
7.3
7.2

1 Includes also such items as fines, penalties, and donations.
2 Preliminary; 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).




148

TABLE D-12.— Total and per capita disposable personal income in current and 1954prices, 1929-54
Total disposable personal
income (billions of dollars)

Per capita disposable personal income (dollars)

Period
Current
prices

1954 prices i

Current
prices

Population
(thousands) *

1954 prices i

1929

83.1

130.3

682

1,069

[121,881

1930
1931
1932
1933
1934

74.4
63.8
48.7
45.7
52.0

119.8
112.8
95.8
95.0
104.4

604
514
389
364
411

973
908
766
757
825

123,188
124,149
124. 949
125,690
126,485

1935
1936
1937
1938
1939

58.3
66.2
71.0
65.7
70.4

114.1
128 3
133.0
125.1
136.3

458
617
551
505
538

896
1,002
1,032
962
1,041

127,362
128,181
128,961
i 129,969
[131,028

1940
1941
1942
1943
1944

76.1
93.0
117.5
133.5
146.8

146.0
170.0
193.6
207.4
224.4

576
697
871
977
1,060

1,106
1,274
1,435
1,517
1,621

132,122
133,402
134,860
136,739
138,397

1945
1946
1947
1948
1949

150.4
159.2
169.0
187.6
188.2

224.7
219.3
203.4
209.6
212.4

1,075
1,126
1,173
1,279
1,261

1,607
1,551
1,412
1,429
1,423

139,928
141,389
144,126
146.631
149,188

1950.
1951
1952
1953
19548

206.1
226.1
236.9
250.1
253.6

230.3
234.0
239.7
251.1
253.6

1,359
1,465
1,509
1,567
1,561

1,518
1,517
1,527
1,573
1,561

151,683
154,360
157,022
159,629
162,414

.

Seasonally adjusted annual rates
1953: First half
Second half..

249.1
251.2

251.4
250.9

1, 566
1,566

1,580
1,564

159, 017
160,408

1954: First half...
Second half»
1953: First quarter
Second quarter
Third quarter
Fourth quarter

252.6
254.6

252.6
254.9

1,562
1,560

1,562
1,562

161, 763
163,211

247.8
250.4
251. 2
251.2

250.6
252.2
250.9
250.7

1,561
1,572
1,570
1,563

1,578
1,583
1,568
1,560

158. 714
159,306
160,022
160, 764

1954: First quarter.
Second quarter...
Third quarter
Fourth quarter>

252.3
252.9
253.2
255.9

252.0
252.9
252.9
256.7

1,563
1,560
1,555
1,564

1,561
1,560
1,553
1,569

161,436
162,078
162, 808
163,582

_._

* Dollar estimates in current prices divided by consumer price index on a 1954 base, using data through
November.
2 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.
»Preliminary; 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).




149

TABLE D-13.—Liquid saving by individuals, 1939-54

l

[Billions of dollars]

Period

Cur*
Total rency
liquid and
saving bank
deposits *

Insurance and
Sav- pension reserves
ings
and
loan
Govassocia- Total Pri- ern- Total 3
vate ment
tions

LiquiLiqui- dation
of
dation debt
of
not
U . S . Other Cor- mort- elsesav- gov- porate gaee where
ings ern- and debts classibonds ment* other
fied •
Securities

1939.

4.26

3.00

0.04

3.01

1.72

1.30 -0.53

1940
1941
1942
1943
1944

4.24
10.52
29.30
38.71
41.41

2.88
4.80
10.95
16.18
17.55

.20
.36
.26
.55
.81

3.14
4.01
5.04
6.77
8.17

1.85
2.14
2.49
2.85
3.21

1.30
1.86
2.55
3.92
4.96

-.17
2.83
10.25
13.83
14.96

.86 - . 8 1 - . 2 2 - . 8 4 -.97
2.75
.44 - . 3 6 - . 8 2 -.66
7.98 2.17
.09 - . 0 9 2.89
.38 1.01
11.14 2.88 - . 2 0
.06 -.14
11.80 3.89 - . 7 3

37.39 19.06
13.74 10.56
2.01
6.67
2.99 -1.84
2.86 -1.46

1.06
1.18
1.20
1.21
1.51

8.59
6.97
7.13
7.32
6.05

3.46
3.42
3.64
3.75
3.71

5.14
3.55
3.49
3.57
2.34

9.36
.89
3.51
3.22
3.03

6.85 3.43 - . 9 2 - . 2 0 -.48
-3.60
.65 -3.60 -2.28
.90 - . 6 5
-4.46-2.73
.84 -4.46
1.78
.89
-4.61
2.13 - . 4 3 1.52 -4.61 -2.31
-3.87-2.40
.98 -3.87
1.53
.52

1.80
11.79
13.55
13.39

3.62
5.95
7.10
4.72

1.51
2.10
3.07
3.68

5.01
8.26
9.29
8.28

3.92
4.05
4.91
5.08

1.09
4.21
4.38
3.20

2.04
2.55
4.20
6.20

.12
.55
-.41 -.22
.32
.15
.30 2.86

5.52
7.88

-.69
5.41

2.01
1.67

4.23
4.05

2.34
2.74

1.89
1.31

4.89
1.31

.12 2.97
.18 - . 1 1

1.80 -3.41 -1.51
1.24 -3.26 -1.32

6.48

.42

2.10 -3.24

-

1945
1946
1947..,.
1948
1949

1950.
1951
1952
1953

_

1953: First half.
Second half
1954: First half.
1953: First quarter....
Second quarter.
Third quarter.-.
Fourth quarter.
1954: First quarter.-..
Second quarter.
Third quarter...

0.66 -0.83 -0.36 -0.50

-.84

2.38

4.15

2.66

1.49

2.97

2.40 -1.34
.64
3.11
1.73
3.19
3.69
4.69

.96
1.05
.59
1.08

2.15
2.08
2.11
1.94

1.24
1.09
1.20
1.55

.90
.99
.92
.39

2.44
2.45
1.07
.24

.41 1.40
- . 2 9 1.58
.06
.32
.13 - . 4 2

3.57 -2.21
1.38
2.91
3.50
2.72

1.12
1.26
.73

2.04
2.11
2.06

1.39
1.27
1.36

.65
2.47
.50
.84
.70 -1.13

.22 1.12
.20 - . 6 8
.12 -1.94

.45

1.36
3.18
3.72
3.03

-7.16 -3.22
-7.16
-6.53 -.54
-6.26-3.85
-6.26
-6.66-2,83
-6.66

1.05
-.29
-1.22
-.54
-.78
1.13 -1.31 1.46
.97 -1.92 -.41
.70 -2.29 -.14

.63
1.16
.70
.54

-1.51
-1.89
-1.77
-1.48

* 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.
* Includes currency, demand deposits, and time and savings deposits.
» Does not include net purchases by brokers and dealers or by other individualsfinancedby 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 National
Income, 1954 Edition, A Supplement to the Survey of Current Business.

Source: Securities and Exchange Commission.




150

TABLE D-14.—Sources and uses of gross savings 1920-54
[Billions of dollars]
Gross private saving and government surplus or
deficit on income and product transactions
Government surplus
or deficit ( - )

Private saving
Period
Total
Total

Personal
saving

Gross
busi- Total
ness
saving

Federal

State
and
local

Gross investment

Gross
private Net fordomes- eign inTotal tic in- vestvestment
ment

Statistical
discrepancy

1929..

16.7

15.7

4.2

11.5

1.0

1.2

-0.1

17.0

16.2

0.8

0.3

1930..
1931..
1932_.
1933..
1934...

11.9
4.9

3.4
2.5
-.6
-.6
.1

8.8
5.2
2.7
2.6
4.9

-.3
-2.8
-1.7
-1.4
-2.4

.3
-2.1
-1.5
-1.3
-2.9

-.5
-.7
-.2

2.6

12.2
7.7
2.0
1.9
5.0

.5

11.0
6.7
1.1
1.5
3.3

10.3
5.5
.9
1.4
2.9

.7
.2
.2
.2
.4

-1.0
.8
.8
.9
.7

1935.
1936.
193719381939.

6.4
7.2
12.1
7.3
9.0

8.4
10.1
11.5
8.9
11.2

2.0
3.6
3.7
1.1
2.9

6.3
6.5
7.8
7.8
8.3

-2.6
-3.5
-.2
-2.0
-2.2

.6
.5
.7
.4
.1

6.2
8.3
11.8
7.8
10.2

6.3
8.4
11.7
6.7
9.3

-.1
-.1
.1
1.1

-.2
1.1
-.2
.5
1.2

1940..
1941..
1942..
1943..
1944..

13.9
18.8
10.5
5.1
2.3

14.6
22.6
41.9
49.3
54.2

4.2
11.1
27.8
33.0
36.9

10.4
11.5
14.1
16.3
17.2

-2.0
-3.0
.6
-1.6
-2.1
-.7
-3.8
-31.4
-44.2
-51.9

-1.4
-5.1
-33.2
-46.7
-54.6

.7
1.3
1.8
2.5
2.7

14.7
19.2
9.7
3.4
5.0

13.2
18.1
9.9
5.6
7.1

1.5
1.1
-.2
-2.2
-2.1

.8
.4
-.8
-1.7
2.8

1945-.
1946..
1947..
1948..
1949..

4.5
30.8
37.3
45.2
33.0

44.3
26.6
24.0
37.4
36.2

28.7
12.6
4.0
10.0
7.6

15.6 -39.7 -42.3
2.2
4.2
14.0
12.2
13.3
20.0
8.0
7.9
27.4
28.7 - 3 . 2 - 2 . 4

2.6
2.0
1.0
-.1
-.8

9.0
31.7
386
43.1
33.1

10.4
27.1
29.7
41.2
32.5

-1.4
4.6
8.9
2.0
.5

4.5
.9
1.4
-2.1
.1

1950..
1951..
1952..
1953..
1954 2

48.8
55.8
49.9
48.5
49.6

40.7
49.6
52.8
55.1
56.9

12.1
17.7
18.4
20.0
19.6

8.1
28 6
6.2
31.9
34.3 - 2 . 8
35.1 - 6 . 6
37.3 - 7 . 3

9.2
6.5
-2.9
-6.8
-6.5

-1.1
-.4

49.0
57.1
50.5
49.5
45.6

51.2
56.9
50.7
51.4
46.1

-2.2
.2
-.2
-1.9

.2
1.3
.6
1.0
-4.0

(9

0)

.2

Seasonally adjusted annual rates
1953:
First half
Second half...

50.8
46.3

55.6
54.8

19.4
20.8

36.2
34.0

-4.9
-8.4

-4.9
-8.7

.1
.2

51.4
47.8

53.9
49.0

-2.6
-1.2

0.7
1.4

1954:
First half
Second half 2

47.4
51.7

57.2
56.5

20.8
18.4

36.5
38.1

-9.9
-4.8

-9.0
-4.0

-.8
-.8

44.0
47.2

45.0
47.2

-1.0
-.1

-3.4
-4.6

1953:
First quarter
Second quarter..
Third quarter...
Fourth quarter..

51.4
50.1
48.5
44.1

55.1
56.2
54.2
55.4

19.2
19.6
20.0
21.5

35.9 - 3 . 7 - 2 . 8
36.6 - 6 . 1 - 7 . 0
34.2 - 5 . 6 - 6 . 2
33.9 -11.3 -11.1

-.8
1.1
.6
-.2

50.1
52.6
50.6
44.9

51.9
55.9
52.4
45.5

-1.8
-3.3
-1.8
-.6

-1.2

1954:
First quarter
Second quarter..
Third quarter...
Fourth quarter 2 .

46.4
48.4
49.5
53.9

57.5
57.0
55.5
57.5

21.8
19.7
18.4
18.4

35.7 -11.1 -10.1
37.3 - 8 . 6 - 8 . 0
37.1 - 6 . 0 - 5 . 3
39.1 - 3 . 6 - 2 . 8

-1.0
-.6
-.8
-.8

43.4
44.6
45.1
49.2

44.5
45.6
45.3
49.2

-1.1
-1.0
-.2
.0

-3.0
-3.8
-4.4
-4.7

1

Less than 50 million dollars.
Preliminary; 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).

a




2.1
.6

TABLE D-15.—Realized gross and net income of farm operators from farming, 1935-39 average
and 1940-54 *
Realized net
Realized net Infarm income
come per farm
Realized Farm
gross producfarm
tion
income expenses Cur1954
Current
1954
rent
prices > prices prices 8
prices

Period

Millions of dollars
1935-39 average. _.
1940
1941
1942
1943
1944

.__

..--

1945
1946
1947
1948
1949

„

1950
1951
1952
1953
1954 3

Realized
net farm
income
as percent of
gross
farm
1954
income
prices« (percent)

Realized net income per farm
family worker

Current
prices

Dollars

5,742

4,630

10,289

1,551

507

1,127

44.6

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

9,768
12,877
16,387
18,918
18,703

677
962
1,427
1,895
1,994

1,539
2.047
2,643
3,107
3,116

518
755
1,113
1,441
1,498

1,177
1,606
2,061
2,362
2,341

39.4
44.2
47.6
50.5
49.6

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

18,615
19,180
19,505
16,961
15,273

2,059
2,394
2,856
2,375

3,120
3,235
3,321
2,922
2,669

1,559
1,751
2,067
1,944
1,763

2,362
2,366
2,403
2,113
1,981

48.5
49.0
49.3
45.2
42.8

36,944
36,842
35,430
34,100

19,704
22,404
23,216
22,155
21,600

12,362
14,540
13,626
13,275
12,500

13,736
14,837
13,764
13,409
12,500

2,189
2,598
2,462
2,422

2,432
2,651
2,487
2,446

1,705
2,078
2,019
1,998
1,910

1,894
2,120
2,039
2,018
1,910

39.4
37.0
37.5
37

2,060
1,940

2,080
1,980

37

1,960
1,860

1,960
1,860

37
37

2,080
2,030
1,920
1,960

2,100
2,050
1,940
1,980

38
37
37

1,990
1,920
1,840
1,880

1,990
1,920
1,840
1,880

37
36
36
37

10,372

Seasonally adjusted annual rates
1953:
First half
Second half..

36,100
34,800

22,400
21,800

13,700
12,900

13,800
13,000

1954:
First half
Second half»_

34,800
33,400

22,000
21,200

12,800
12,200

12,800
12,200

1953:
First quarter
Second quarter..
Third q u a r t e r Fourth quarter..

36, 500
35,700
34,700
34,800

22,700
22,200
21,900
21,800

13,800
13, 500
12,800
13,000

13,900
13,600
12,900
13,100

1954:
First quarter
Second quarter..
Third quarter...
Fourth quarter 3 .

35,200
34,400
33,300
33,500

22,200
21,900
21,300
21,200

13,000
12,500
12,000
12,300

13,000
12,500
12,000
12,300

2,490
2,350

2,520
2,460
2,370

2,520
2,380

2,550
2,490
2,360
2,400

i Includes Government payments but, r unlike the net farm income series of appendix tables D-8 and
D-10, includes income resulting from net farm inventory reductions, but gives no credit as income for net
additions to 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 D-8 and D-10 have not
yet taken fully into account
* 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 1954=»100.
^Preliminary.
Source: Department of Agriculture.




152

EMPLOYMENT AND WAGES
TABLE D - 1 6 . — Total population 14years of age and over and the labor force, 1929—54

Period

Civilian labor force
Total
Total Unemploylabor
labor ment as
Total force Armed
Employment *
force as „ „„„
popu- (includ- forces *
Unem- percent Per?
of civillation i ing
ploy- of total ian
Total
armed
popuAgricul- Non- ment lation labor
forces) i
agriTotal tural
force
cultural
Thousands of persons 14 years of age and over

Percent

68-area sample 8
Monthly average:4
1929

87,910

49,440

260 49,180 47,630

10,450

37,180

1,550

56.2

3.2

1930
1931
1932.
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 4,340
32,110 8,020
28,770 12,060
28,670 12,830
30,990 11,340

66.0
65.9
55.9
55.8
55.8

8.7
15.9
23.6
24.9
21.7

1935....
1936
1937
1938.
1939

95,350

53,140
53, 740
97. 740 54,320
98,980 54.950
100,210 55,600

270
300
320
340
370

52,870
53,440
54,000
54,610
55,230

42,260 10.110
44,410 10.000
46,300 9,820
44, 220 9,690
9,610
45,750

32,150 10,610
34,410 9,030
36,480 7,700
34,530 10,390
36,140 9,480

55.7
55.6
65.6
55.5
66.5

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

56,180
540
57,530
1,620
60,380 3,970
64, 560 9,020
66,040 11,410

55.640
55,910
56,410
55,540
54,630

47,520
50,350
53,750
54,470
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

1945
1946
1947
1948
1949

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
62,1Q5

52,820
55,250
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
2,270
2,142
2,064
3,395

61.2
56.7
56.7
57.2
57.4

1.9
3.9
3.6
3.4
5.5

112,237
113,382
114,589

64,749
65, 982
66, 560

1,650 63,099 59,957
3,098
61,005
3,594
61,293

7,507
7,054
6,805

52,450
53,951
54,488

3,142
1,879
1,673

57.7
58.2
58.1

5.0
3.0
2.7

116,576

67,362

3,547 63,815 62,213

6,562

55,651

1,602

57.8

2.5

116,272
116,893

66,992
67,732

3,541 63,451 61,817
3,553 64,180 62,609

6,310
6,815

55,507
55,794

1,634
1,570

57.6
57.9

2.6
2.4

115,635
115,923
116,199
116,272
116,375
116,476

66,438
66,426
66,882
66,684
66,820
68, 703

3,543
3,543
3,545
3,528
3,533
3,556

62,895
62,883
63,337
63,156
63,287
65,147

61,003
61,095
61,663
61, 574
61,981
63,585

5,760
5,611
5,925
6,275
6,424
7,865

55,243
55,484
55, 738
55, 299
55, 557
55,720

1,892
1,788
1,674
1,582
1,306
1,562

57.5
57.3
57.6
57.4
57.4
59.0

3.0
2.8
2.6
2.5
2.1
2.4

116,576
116, 676
116, 786
116,893
116, 988
117,078

68,804
68, 521
67,480
67, 609
67, 495

3,590
3,590
3,575
3,550
3,520
3,492

65,214
64,931
63,905
64,059
63,975
62,993

63,666
63,691
62, 584
62, 758
62,276
60, 680

7,544
7,173
7,109
7,075
6,617
5,370

56,122
56,518
55,475
55,683
55,659
55,310

1,548
1,240
1,321
1,301
1,699
2,313

59.0
58.7
57.8
57.8
57.7
56.8

2.4
1.9
2.1
2.0
2.7
3.7

..~

1950
1951
1952
Revised series *
1953.1953: First half...
Second half
1953: January
February
March..
April
May
June
.July
August
September
October
November
December

See footnotes at end of table.




133

EMPLOYMENT AND WAGES
TABLE D-16.—Total population 14years of age and over and the labor force, 1929-54—Con.

Period

Total
labor
Total force Armed
popu- (includ- forces 1
lation ' ing
Total
armed
1

UnemTotal
ploylabor
force as ment as
percent
Employment 2
percent
Unem- of total of civilian
ploypopuNon
Agricul- agrilabor
lation
ment
Total tural
force
cultural
Civilian labor force

Thousands of persons 14 years of age and over

Percent

230-area sample»
Monthly average: *
1954

117,664

67,818

3,350 64,468 61,238

6,504

54,734

3,230

57.6

5.0

1954: First h a l f . . - 117,432
Second half.. 117,991

67,444
68,192

3,390 64,054 60,620
3,311 64,882 61,855

6,232
6,776

54,389
55,078

3,433
3,027

57.4
57.8

5.4
4.7

117,183
117,264
117,358
- 117,432
117,528
117,597

66,292
67,139
67,218
67,438
67, 786
68,788

3,452
3,414
3,393
3,375
3,361
3,343

62,840
63,725
63,825
64,063
64,425
65,445

5,284 54,469
5,704 54,351
5,875 54,225
6,076 54, 522
6,822 54,297
7,628 54,470

3,087
3,671
3,725
3,465
3,305
3,347

56.6
57.3
57.3
57.4
57.7
58.5

4.9
5.8
5.8
5.4
5.1
5.1

117,664
117, 773
117,877
117, 991
118,103
118,206

68,824
68,856
68, 565
68,190
67,909
66,811

3,330
3,334
3,322
3,308
3,285
3,285

65,494 62,148
65, 522 62,276
65, 243 62,144
64, 882 62,141
64,624! 61,731
63,526! 60,688

7,486
6,928
7,527
7,239
6,154
5,325

3,346
3,245
3,099
2,741
2,893
2,838

58.5
58.5
58.2
57.8
57.5
56.5

5.1
5.0
4.8
4.2
4.5
4.5

1954: January
February
March
April
May
June
July..
August
September
October
November
December

59,753
60,055
60,100
60,598
61,119
62,098

54.661
55,349
54, 617
54,902
55,577
55,363

i 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.
»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.
» Pertains to civilian labor force data only.
« Monthly averages except for population estimates, which are for the middle of the period. See appendix
table D-12 for total population of all ages.
« Labor force data for 1953 have been revised by the use of a new estimating procedure to provide greater
comparability with the 1954 data from the 230-area sample, and to improve the reliability of the 1953 data
themselves. For a description of the revisions, see Current Population Reports: Labor Force, Series P-57,
No. 155, January 1955. Data of appendix tables D-17, D-18, and D-19 are as originally published by the
Department of Commerce.
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 (labor force, 1929-39), and [Council of
Economic Advisers.




154

TABLE D-17.—Employment and unemployment, by age, and by sex for 20-64 year group, 1942—54
[Thousands of persons 14 years of age and over]
Employed >
Total
civilian
labor
force

Period

20-64 years
Total

Unemployed
20-64 years

FeMales males

65
years
and
over

Total

14-19
years

5,770 32,870 12,640
6,350 30,450 14,930
6,050 29,460 15,560

2,470
2,740
2,890

2,660
1,070
670

510
290
200

1,330
360
230

700
350
210

120
70

14-19
years

FeMales males

65
years
and
over

68-area sample
Monthly average:
1942
1943
1944
1945.
1946
1947
1948
1949

56,410 53,750
55,540 54,470
54,630 53,960

_._.

53,860
57,520
60,168
61,442
62,105

52,820
55, 250
58.027
59,378
58, 710

5,480
4,550
4,716
4,842
4,512

28,920
34,170
36,567
37.206
36,639

15,500
13,810
13,991
14,517
14,689

2,920
2,720
2,754
2,815
2,871

1,040
2,270
2,142
2,064
3,395

190
290
425
415
595

500
1,550
1,256
1,099
1,929

320
360
394
470
733

30
70
68
82
139

-

63,099
62,884
62,966
63,418

59,957
61,005
61,293
61,894

4,564
4,614
4,530
4,491

37,158
37,351
37,366
37,878

15,327

2,907
2,924
2,930
3,120

3,142
1,879
1,673
1,523

543
356
362
291

1,704
835
776
795

766
595
460
379

131
96
75
58

4,298 37,726 16,359 3,111
4,684 38,030 16,452 3,129

1,634
1,412

305
276

872
719

370

47

3,014
3,136
3,170
3,100
3.116
3,130

,892
,788
,674
,582
,306
,562

282
298
252
242
246
512

1,088
982
866
902
714

430
428
464
364
310
330

92
80
92
74
36
40

38,198 15,984 3,166
38,310 16,060 3,300
16,559 3,172
37,952 16,895 3,221
37,909 16,877 3,038
37,719 16,338 2,875

,548
,240
,246
,162
,428
1,850

410
280
214
246
219
287

720
602
611
552
751
1,077

370
322
377
323
411
417

48
36
43
41
47

2,885
2,923

2,359
3,385

266
469

1,431
1,923

571
854

91
139

1950
1951
1952
1953

1953: First half... 63,128 61,494
Second half. 63,706 62,294
1953: January
February
March
April....
May
June
_
July
August
September.
October
November
December
1954: January
February

62,416
_ 62,712
63,134
62,810
62,964
64,734

60,524
60,924
61,460
61,228
61,658
63,172

3,964 37,252
4,044 37,512
4,072 |37,800
4,160 37,708
4,156 37,956
5,392 38,130

64,668
64,648
63,552
63,404
63,353
62,614

63,120
63,408
62,306
62.242
61,925
60,764

5,772
5,738
4.491
4,173
4,101
3,832

16.115
16,468
16,406

16,294
16,232
16,418
16,260
16,430
16,520

___ 62,137 59, 778 3,689 37,304 15,898
63,491 60,106 3,682 37,129 16,373

230-area sample
Monthly average:
1954

64,468 61,238

4,286 37,405 16,476

3,071

3,230

516

1,739

856

120

1954: First half... 64,054 60,620
Second half. 64,882 61,855

4,094 37,185 16,316
4,477 37,626 16,636

3,026
3,116

3,433
3,027

536
495

1,878
1,600

895
816

124
116

1954: January
February
March
April
May
June
July
August
September
October
November
December

_ 62,840
63,725
63,825
64,0H3
64, 425
65,445

59, 753
60,055
60,100
60, 598
61,119
62,098

3,822
3,844
3,902
3,941
3,995
5,062

37,164
36,948
36,844
37, 231
37, 357
37, 564

15,849
16,253
16,333
16,379
16,692
16,391

2,918
3,010
3,024
3,047
3,075

3,087
3,671
3,725
3,465
3,305
3,347

462
540
495
469
519
731

1,685
2,082
2,103
1,938
1,781
1,678

823
926
977
915
890

118
122
150
142
116
97

65,494
65,522
65, 243
64,882
64,624
63, 526

62,148
62,276
62,144
62,141
61, 731
60,688

5,484
5,363
4,343
4,145
3,904
3,625

37,643
37, 729
37, 714
37,617
37,642
37,412

15,973
16,062
16.903
17,113
17,091
16,674

3,047
3,124
3.184
3,263
3.096
2,979

3,346
3,245
3,099
2,741
2,893
2,838

734
584
485
377
378
413

1,674
1,671
1,634
1,490
1,507
1,622

827
855
887
759
872

111
134
92
116
136
108

i 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.
NOTE.—Data are not available prior to 1942 for all the age and age/sex groups above.
Data for 1953 shown above are those originally published by the Department of Commerce and therefore
do not agree with the revised series for 1953 shown in appendix table D-16.
Detail will not necessarily add to totals because of rounding.
Source: Department of Commerce.




TABLE D—18.—Employed persons with a job but not at work, by reason for not working, 1946-54
[Thousands of persons 14 years of age and over
Total employed per- T e m p o r a r y New job or
sons with
business 3
layoff 1
a job but
not at work

Period

Monthly average:
1946
....
1947
1948
1949
,

Vacation

Illness

All other 3

2,258
2,474
2,751
2,530

97
123
141
185

58
92
121
101

662
834
L,044
1,044

819
847
844
719

622
579
«02
480

_

2,648
2,680
2,814
2,682
3,036

92
117
142
142
221

116
103
117
100
127

1 137
L,
L,073
L, 130
L, 164
L,361

718
782
775
783
776

585
604
650
494
551

1953: First half_..
Second half.

2,247
3,116

123
161

108
91

526
1,801

895
672

595
392

1954: First half...
Second half.

2,375
3,698

270
172

131
123

511
2,211

884
668

580
523

2,358
2,362
1,996
2,168
1,982
2,618

194
110
84
100
126
122

80
88
92
104
138
148

328
318
260
500
366
1,386

1,018
1,246
932
850
742
580

738
600
628
614
610

6,126
4,924
2,696
1,595
1,687
1,671

144
170
141
133
183
195

78
132
137
86
70
43

4,794
3,546
1,407
505
362
191

648
664
697
635
694
695

462
412
314
236
380
547

2,636
2,285
1,943
2,286
2,137
2,964

427
216
236
216
294
229

80
108
92
188
91
227

259
347
286
395
470
1,310

1,004
996
780
930
809
784

867
618
549
556
474
414

7,992
5,575
3,173
2,025
1,725
1,695

298
143
198
136
120
137

138
151
166
86
133
64

6,211
4,008
1,720
736
363
230

706
672
648
655
670
658

601
442
412
439
606

1950
1951
1952
1953
1954

lflfiSI: January
February
March
April
May
.Tune
July
August
September
October
November
December
1954: January
February
March
April
May
June.
July
August
September
October
November
December

__.

_.

1
Includes persons who had been temporarily laid off from their jobs with definite instructions to return
to work within 30 days of layoff, and who were not seeking other work.
*Includes persons who had a new job or business to which they were scheduled to report within the folowing 30 days.
* Includes persons who were not at work because of bad]weather, industrial disputes, and all other reasons.
NOTE.—Data through 1953 are based on a 68-area sample; those for 1954, on a 230-area sample. Data for
1953 shown above are those originally published by the Department of Commerce and therefore do not agree
with the revised series for 1953 shown in appendix table D-16.
Detail will not necessarily add to totals because of rounding.

Source: Department of Commerce.




I56

TABLE D-19*—Unemployed persons, by duration of unemployment, 7946-54
Duration of unemployment
Total unemployed

Period

4 weeks
and under

5-14
weeks

15-26
weeks

Over 26
weeks

Average
duration
of unemployment
(weeks)

Thousands of persons 14 years of age and over
Monthly average:
1946
_ .1947
1948
1949

(2)

234
193
427

141
164
116
256

1,055
574
517
456
1,115

425
166
148
126
495

357
137
84
71
317

12.1
9.7
8.3
7.9
11.8

879
862

512
400

160
92

83
60

8.7
7.1

3,433
3,027

1,355
1,251

1,250
980

567
422

260
374

11.0
12.6

1953: First quarter
Second quarter
Third quarter
Fourth quarter

1,785
1,483
1,345
1,480

920
839
822
902

600
424
377
422

173
147
82
101

91
74
64
55

9.0
8.3
7.3
6.9

1954: First quarter
Second quarter
Third quarter.
Fourth quarter

3,494
3,372
3,230
2,824

1,396
1,315
1,313
1,189

1,429
1,072
1,071
889

475
659
473
372

195
325
374
373

9.9
12.0
12.2
12.9

_. . .

2,270
2,142
2,064
3,395

1,041
1,087
1,517

3,142
1,879
1,673
1,523
3,230

1,307
1,003
925
871
1,303

1,634
1,412

1954: First half
Second half

1950
1951
1952
1953
1954
1953: First half
Second half

_.

0)

704
669
1,195

0)

9.8
8.6
10.0

i For duration of less than 6 months, data are available only for under 3 months (1,568,000) and 3 to 6
months (564,000).
a Not available.
NOTE.—Data through 1953 are based on a 68-area sample; those for 1954, on a 230-area sample. Data for
1953 shown above are those originally published by the Department of Commerce and therefore do not
agree with the revised series for 1953 shown in appendix table D-16.
Detail will not necessarily add to totals because of rounding.
Source: Department of Commerce.




TABLE D-20.—Unemployment insurance programs^ selected data, 1939 and 1946-54
Initial claims *

Period

State
and
veteran
programs *

State
programs

State
Benefits paid
insured under State prounemgrams
Exhaus- ploytions,
ment
State
as perproState
cent of
Total Average
programs • covered (millions weekly
grams*
employ- of dolcheck
ment
lars)
(dollars)'
(percent)

Insured unemployment *

All programs*

Weekly average (thousands)
1939

188

188

1,086

1946
1947
1948
1949

341
280
282
375

189
187
210
323

1,294
1,008

1950
1951
1952
1953
1954

239
211
215
223
314

236
208
215
218
303

996

966

1,064
1,058
2,039

1,019

1953: First half...
Second half.

199
247

192
241

1954: First half...
Second half.

339
290

1953: January
February...
March
April
May
June

5.1

429.3

10.66

4.3
3.1
3.0
6.2

1,094.9
775.1
789.9
1,736.0

18.50
17.83
19.03
20.48

1,373.1
840.4

1,857

4.6
2.8
2.9
2.8
5.2

962.2
2,029.0

20.76
21.09
22.79
23.58
24.91

1,060
1,056

989
987

2.8
2.8

499.1
463.2

23.30
23.89

327
280

2,278
1,800

2,092
1,621

5.7
4.4

1,125.7
903.3

24.69
25.20

243
190
184
195
192
188

236
184
179
190
186
182

1,242
1,174
1,100
1,026

1,156
1,084
1,014

940
878

961
889
833

3.3
3.1
2.9
2.7
2.5
2.4

94.4
86.8
92.3
83.0
72.1
72.0

23.44
23.37
23.25
23.28
23.16
23.23

July
August
SeptemberOctober
November..
December..

219
195
191
215
304
361

213
189
186
209
296
351

913
868
830
897

861
816
779
840

1,198
1,632

1,115
1,509

2.4
2.3
2.2
2.3
3.1
4.2

69.2
64.6
65.3
66.1
79.0
120.8

23.08
23.42
23.77
24.04
24.31
24.34

1954: January
February...
March
April
May
June

430
347
314
338
302
301

416
335
303
328
292
289

2,205
2,362
2,389
2,383
2.244
2,082

2,034
2,170
2,175
2,181
2,070
1,924

5.6
6.0
6.0
6.0
5.7
5.3

158.4
179.3
215.6
200.8
185.6
191.0

24.53
24.73
24.66
24.78
24.68
24.70

July
August
September.
October
NovemberDecember..

314
275
264
271
282
332

303'

2,037
1,871
1,752
1,631
1,643
1,869

1,862
1,692
1,580
1,466
1,463
1,666

5.1
4.6
4.4
4.0
4.0
4.6

168.0
162.7
153.7
135.3
132.1
153.1

24.65
25.02
25.56
25.72
25.47
25.20

263
255
262
271
323

999
2,470

1,970

1,599

1,498

988

61

1 Indicate, in general, instances'^ new unemployment
2 Data relate to veterans under the following programs: Servicemen's Readjustment Act (which
became effective in October 1944 and expired for most veterans in July 1949) and unemployment
compensation (Veterans Readjustment Assistance Act of 1952, effective October 15,1952).
* Represents the number of unemployed workers covered by unemployment insurance programs who
have completed at least one week of unemployment.
* State, veteran, and Railroad Retirement programs.
• State unemployment insurance programs during the period shown excluded from coverage agricultural
workers, Government employees, domestic servants, workers in nonprofit organizations, unpaid family
workers, the self-employed, and (in most States) workers in very small firms.
• Represents payment for the final week of compensable unemployment in a benefit year. Workers who
have exhausted benefit rights do not necessarily remain unemployed—some find employment, and others
withdraw from the labor force.
' For total unemployment only.
Source: Department of Labor.




158

TABLE D—21.—Labor turnover rates in manufacturing industries, 1930-54
[Rates per 100 employees]
Separation rates
Period
Total
Monthly average:2

Quit*

Layoff

Discharge, Accession
rates
military,
and miscellaneous i

1930
1931
1932
1933
1934

5.0
4.0
4.4
3.8
4.1

1.6
.9
.7
.9
.9

3.0
2.9
3.5
2.7
3.0

0.4
.2
.2
.2
.2

1935.
1936..
19371938.
1939..

3.6
3.4
4.4
4.1
3.1

.9
1.1
1.3
.6
.8

2.5
2.0
3.0
3.4
2.2

.2
.2
.2
.1
.1

3.1
3.1
3.3
5.4
4.7
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.
19481949.

8.3
6.1
4.8
4.6
4.3

5.1
4.3
3.4
2.8
1.5

2.3
1.2
L.O
L.3
'2.4

.9
.6
.5
.5
.3

6.3
6.7
5.1
4.4
3.5

1950...
1951...
1952...
1953...
1954 *_.

3.5
4.4
4.1
4.3
3.5

1.9
2.4
2.3
2.3
1.2

]L.I
]L.2
]L.I

1.3
2.0

.5
.8
.6
.7
.4

4.4
4.4
4.4
3.9
3.0

1953: First half..Second half_.

4.1
4.5

2.5
2.2

.9
1.8

.7
.6

4.4
3.4

1954: First half
Second halfJ.
1953: January...
FebruaryMarch
April
May
June
July
August
September..
October
NovemberDecember..

3.6
3.3

1.0
1.3

2.2
1.6

.4
.4

2.8
3.3

3.8
3.6
4.1
4.3
4.4
4.2

.9
.8
.8
.9
1.0
.9

.7
.8
.7
.7
.7
.7

4.4
4.2
4.4
4.3
4.1
5.1

4.3
4.8
5.2
4.5
4.2
4.0

2.1
2.2
2.5
2.7
2.7
2.6
2.5
2.9
3.1
2.1
]L.5
L.I

1.1
1.3
1.5
1.8
2.3
2.5

.7
.7
.7
.7
.6
.4

4.1
4.3
4.0
3.3
2.7
2.1

1954: January...
FebruaryMarch
April
May
June

4.3
3.5
3.7
3.8
3.3
3.1

1
L.I
L.O
]L.O
L.1
1.0
1.1

2.8
2.2
2.3
2.4
1.9
1.7

.5
.4
.4
.4
.4
.4

2.8
2.5
2.8
2.4
2.7
3.5

3.1
3.5
3.9
3.3
2.9

1.1
1.4
1.8
1.2
L0

1.6
1.7
1.7
1.6
1.6

.4
.5
.5
.4
.4

2.9
3.3
3.4
3.6
3.3

July
August
SeptemberOctober
November..

* Prior to 1940, military and miscellaneous separations are included with quits.
Averages computed by Council of Economic Advisers from published monthly rates.
1
Based on data through November.
NOTE.—Detail will not necessarily add to totals because of rounding.
Source: Department of Labor (except as noted).

8




159

TABLE D-22.—Number of wage and salary workers in nonagricultural establishments, 1929-541
[Thousands of employees]

Period

Total
wage
and
salary
workers

Manufacturing

Total

MinDu- Noning
rable durable
goods goods

TransCon- portatract tion Trade' Fiand
connance
struc- public
utilition
ties

Service*

Government
(Federal,
State,
and
local)

1929..

31,041

10,534

(3)

(3)

1,078

1,497

3,907

6,401

1,431

3,127

3,066

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

(3)

(3)
(3)
(3)
(3)
(3)

1,000
864
722
735

1,372
1,214

3,675
3,243
2,804
2,659
2,736

6,064
5,531
4,907
4,999
5,552

L,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

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

912

00
4,683

()
5,394

882
845

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
:L,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

1945..
1946..
1947..
1948..
1949..

40,069
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..
1954 *.

44,696
47, 289
48,306
49,660
48,277

14,967 8,085
16,104 9,080
16,334 9,340
17,259 10,129
16,041 9,179

6,882
7,024
6,994
7,131
6,862

889
916
885
844
745

2.333
2,603
2,634
2,644
2,628

3,977
4,166
4,185
4,224
4,020

9,645
10,012
10,281
10. 533
10, 519

1,796
1,862
1,957
2,025
2,091

5,098
5,278
5,423
5,4%
5,520

5,992

(3)
(3)
(3)
(3)

$
(3)

(3)
(3)
3
(3)

874

888
937

1,006

970
809
862

6,609
6,645
6,714

Seasonally adjusted
1953: January
February
March
April....
May
June
July
August
September..
October
November..
December...
1954: January--.
February..
March
April....
May
June

49,510
49,633
49, 724
49,719
49,795
49,880

17,149
17,256
17,382
17,434
17,502
17,531

10,027
10,126
10.236
10,267
10,292
10,305

7,122
7,130
7,146
7,167
7,210
7,226

876
868
856
849
851
842

2,618
2,624
2,624
2.614
2,607
2,607

4,212
4,209
4,213
4,204
4,236
4,242

10,494
10.504
10. 494
10,498
10.524
10, 540

1,993
2,004
2,008
2,009
2,014
2,017

5,441
5. 452
5. 467
5,483
5,479
5,494

6,727
6,716
6,680
6,628
6,582
6,607

49,905
49,849
49,707
49, 711
49,422
49,109

17,507
17,400
17,263
17,125
16.901
16,704

10.307
10,235
10,138
10, 044
9.857
9,733

7,200
7,165
7,125
7.081
7,044
6,971

844
836
835
826
825
818

2,611
2,616
2.679
2, 725
2,708
2,686

4,251
4,243
4,247
4,245
4,205
4,176

10, 544
10. 548
10,523
10,563
10, 577
10,579

2,036
2,036
2,041
2,050
2,044
2,050

5,524
5,518
5,484
5,506
5, 491
5,490

6,588
6,652
6,635
6,671
6,668
6,606

48.812
48,607
48,441
48,268
48,177
48,102

16,497
16,349
16,262
16.122
16,038
15,994

9, 599
9.467
9^364
9,245
9,171
9,126

6.898
6,882
6,898
6,877
6,«67
6,868

805
794
772
753
744

2, B81
2,618
2,654
2,641
2,634
2,624

4,118
4.087
4,012
4.015
4.011
4,016

10,577
10,543
10,552
10. 524
10, 494
10,480

2,054
2.065
2,067
2,075
2,081
2,083

5.487
5,490
5,488
5,506
5,508
5,518

6,693
6.661
6,634
6,632
6,667
6,647

740

47,982 15,775 8,962 6,813
742 2,637 4,014 10,507 2,095 5,555
July
6,657
August
6,691
47,945 15,733 8,910 6,823
730 2,640 4,001 10, 504 2,095 5,551
September- 48,054 15, 789 8,941 6,848
6,783
715 2,633 4,016 10, 480 2,115 5,523
October
48,209 15,886 9,035 6,851
716 2,620 4,002 10,476 2,121 5,549
November *. 48,401 16,017 9,137 6,880
6,851
718 2,643 3,979 10,537 2,119 5,537
December *. 48,349 16,043 9,179 6,864
6,814
709 2,602 3,978 10,548 2,125 5,530
i 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 D-16) which include
proprietors, self-employed persons, domestic servants, and unpaid family workers, 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 a sample survey of households, whereas the estimates in this table are based on reports
from employing establishments.
> 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.
»Not available.
* Preliminary.
NOTE.—Detail will not necessarily add to totals because of rounding.
Sources: Department of Labor and Board of Governors of the Federal Reserve System.




160

TABLE D-23.—Average weekly hours of work in selected industries, 1929-54
Manufacturing
Period
Total

Durable
goods

BitumiNon- nous
coal
dur- mining
able
goods

Retail
trade
Build(except
ing Class I Tele- Whole- eating Laun3
conrailsale
and
struc- roads l phone trade drink- dries
tion
ing

44.2

1929
1930
1931
1932
1933
1934

—

1935
1936-.1937
1938
1939

—

1940
1941
1942
1943—
1944

.

„
-.

38.4

(*)

42.1
40.5
38.3
38.1
34.6

33.5
28.3
27.2
29.5
27.0

I

8

36.6
39.2
38.6
35.6
37.7

32.6
34.8
33.9
37.3
41.0
40.0
35.0
38.0

38.1
40.6
42.9
44.9
45.2

39.3
42.1
45.1
46.6
46.6

8
41.9
40.0
35.1
36.1
37.7
37.4
36.1
37.4

8

26.4
28.8
27.9
23.5
27.1

28.9
30.1
32.8
33.4
32.1
32.6

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

8
43.7

38.8
38.9
39.1

41.3
42.6
42.8
<42.2
41.7

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

42.7
42.5
42.1
41.1
40.3
40.4

(3)

8
8

(')

8
41.0
42.7
42.6
41.6
41.8
41.8
42.1
42.2
42.9
42.9

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

»41. 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

42.8
42.9
42.6
41.9
41.5

1950.
1951
1952
1953—1954 «

„.
—

40.5
40.7
40.7
40.5
39.7

41.2
41.6
41.5
41.3
40.2

39.7
39.5
39.6
39.5
39.0

35.0
35.2
34.1
34.4
32.2

36.3
37.2
38.1
37.0
36.3

40.8
41.0
40.6
40.6

38.9
39.1
38.5
38.7
38.9

40.7
40.7
40.6
40.5
40.3

40.5
40.2
39.9
39.3
39.2

41.2
41.1
41.1
40.5
40.0

1953: January
February...
March
April
May
June

41.0
41.0
41.1
40.8
40.7
40.7

41.9
41.8
41.9
41.7
41.5
41.4

39.8
39.8
40.0
39.5
39.5
39.7

35.4
32.7
33.1
32.1
34.4
36.5

36.9
37.1
36.8
36.9
37.3
37.8

39.9
40.5
40.7
41.3
39.8
41.8

38.6
38.3
38.2
38.3
38.7
39.0

40.4
40.5
40.4
40.3
40.3
40.4

39.3
39.2
39.2
39.1
39.0
39.4

41.0
40.5
40.6
40.8
41.5
40.9

July
August
September..
October
November..
December...

40.3
40.5
39.9
40.3
40.0
40.2

40.8
41.1
40.6
41.0
40.6
40.8

39.6
39.6
39.0
39.3
39.1
39.3

34.4
37.3
34.6
36.2
32.6

37.1
37.6
36.1
37.7
36.7
36.3

42.1
40.3
40.6
40.9
39.4
40.2

39.0
38.7
39.4
38.6
38.8
38.5

40.5
40.4
40.4
40.6
40.5
40.7

39.8
39.1
38.9
38.8
39.2

40.1
39.9
40.2
40.1
40.0
40.6

1954: January
February. _.
March
April
May
June

39.4
39.6
39.5
39.0
39.3

40.1
40.2
40.0
39.7
39.9
40.0

38.5
38.8
38.8
38.1
38. 5
38.9

33.2
32.0
29.7
28.9
30.9
33.2

36.0
36.4
36.5
36.7
37.1

38.7
40.4
41.4
41.1
39.2
41.8

38.2
38.0
38.2
38.2
38.5
38.7

40.2
40.2
40.2
40.2
40.4
40.4

39.0
39.1
39.1
39.1
38.9

39.7
39.8
39.6
40.4
40.3
40.5

July
August-——.
September. _
October
November 6 .
December 8 ..

39.4
39.7
39.7
39.9
40.2
40.5

39.7
40.1
40.1
40.4
40.8
41.1

39.0
39.2
39.3
39.2
39.5
39.8

30.4
33.1
32.6
35.3
35.4

36.9
37.0
36.0
36.6
36.1

40.2
41.2
41.4
40.4

39.2
38.9
40.0
39.8
39.7

40.4
40.4
40.4
40.5
40.5
()

39.8
39 7
39.2
38.9
38.8
()

40.0
39.4
40.1
40.5
40.0

i Averages are based upon monthly data (exclusive of switching and terminal companies) summarized
in the M-300 report by the ICO 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.
* Prior to April 1945, data relate to all employees except executives; from April 1945-May 1949, mainly
to employees subject to the Fair Labor Standards Act; and beginning June 1949, to nonsupervisory employees only.
8 Not available.
* Data beginning with January of year noted are not comparable with those for earlier periods.
* Nine-month average, April through December, because of new series started in April 1945.
* Preliminary.
NOTE.—Data are for production workers in manufacturing and mining, construction workers in building
construction, and for nonsupervisory employees in other industries (except as noted). Data are for payroll
periods ending closest to the middle of the month. The annual figures for 1954 are simple arithmetic
averages of the monthlyfiguresand not strictly comparable with the averages for earlier years which have
been weighted by data on employment.
Source: Department of Labor.




161

TABLE D—24.—Average gross hourly earnings in selected industries.

Manufacturing
Period

1929

BituNon- minous
Dura- dura- coal
ble
Total
ble mining
goods goods

Retail
trade
Building Class I Tele- Whole- (except Laun- Agrirail- 1 phone a sale
conculeating dries
struc- roads
trade
and
ture*
tion
drinking
places)
$0,241

$0,681

$0,566

w

;«;

.684
!4)
.647
.520
(*)
.501
(4)
.673 $0.795

1930
1931
1932
1933
1934

.552
(4)
.515
.446 $0,497 $0,420
.442
.472
.427
.532
.556
.515

1935
1936
1937
1938
1939

.550
.556
.624
.627
.633

.577
.586
.674
.686
.698

.530
.529
.577
.584
.582

.745
.794
.856
.878
.886

1940
1941
1942
1943
1944

.661
.729
.853
.961
1.019

.724
.808
947
1.059
1.117

.602
.640
.723
.803
.861

.883
,993
1.059
1.139
1.186

.958
1.010
1.148
1.252
1.319

1945
1946
1947
1948
1949

1.023
1.086
1.237
1.350
1.401

1.111
1.156
1.292
1.410
1.469

.904
1.015
1.171
1.278
1.325

1.240
1.401
1.636
1.898
1.941

1.379
1.478
1.681
£
1.848
1.935

955
087
186
301
427

6

1
1
1
1

1Q50
1951
19f>?
1953
1954 7

1.465
1.59
1.67
1.77
1.81

1.537
1.67
1.77
1.87
1.92

1.378
1.48
1.54
1.61
1.66

2.010
2.21
2.29
2.48
2.48

2.031
2.19
2.31
2.48
2.60

1
1
1
1
(

1.74

February.._ _ 1.74
1.75
March
1.75
April
1.76
Mav
1.77
June

1.84
1.85
1.85
1.86
1.86
1.87

1.58
1.58
1.59
1.59
1.60
1.60

2.48
2.49
2.47
2.48
2.47
2.50

2.41
2.42
2.44
2.44
2.44
2.44

1
1
1
1
1
1

July
August
September
October
November
December

1.77
1.77
1.79
1.79
1.79
1.80

1.88
1.88
1.90
1.90
1.89
1.90

1.61
1.61
1.63
1.62
1.63
1.64

2.47
2.49
2.49
2.48
2.49
2.47

1.80

February... . 1.80
1.79
March
1.80
April
May
. 1.81
June
1.81

1.91
1.90
1.90
1.90
1.91
1.91

1.65
1.65
1.65
1.65
1.66
1.66

July
...
August
September...
October
November 7.._
December 7 ...

1.91
1.91
1.93
1.93
1.94
1.95

1.66
1.65

1953 January

1954 January

1.80
1.79
1.81
1.81
1.83
1.83

1929-54f

1.66
1.66
1.67
1.67

w

a

(4)

. 733
743
837

$0,378
.376
.378
.395
.414
.422

.142
.152
.172
.166
.166

(4)

(<j

«

.815
.824
$0,774
.903
816
.908
.932 $0,730
822

.226
.172
.129
.115
.129

$0,648
.667
.698
«.700
.715

3.

$0

8?7
8?0
843
870
911

.739
.793
.860
.933
.985

.553
.580
.626
.679
.731

.429
.444
.482
.538
.605

.169
.206
.268
.353
.423

I
1
1
1

96?
124
197
?48
345

1.029
1.150
1.268
1.359
1.414

.783
.893
1.009
1.088
1.137

.648
.704
.767
.817
.843

.472
.515
.547
.580
.559

572
73
83
88

1
1
1
1
1

398
49
59
68
76

1.483
1.58
1.67
1.77
1.83

1.176
1.26
1.32
1.40
1.45

.861
.92
.94
.98
1.00

.561
.625
.661
.672
.661

87
90
85
86
87
86

1
1
1
1
1
1

65
66
65
65
67
67

1.71
1.72
1.73
1.75
1.76

.96
.96
.97
.97
.98
.98

.715

1.76

1.3fi
1.37
1.37
1.38
1.39
1.40

2.47
2.49
2.52
2.54
2.55
2.57

1 86
1 87
1 88
1 89
1. 93
1 91

1
1
1
1
1
1

65
66
73
71
75
71

1.78
1.78
1.80
1.79
1.79
1.80

1.41
1.41
1.42
1.42
1.42
1.39

.98
.98
.99
.99
1.00
1.00

.675

2.48
2.47
2.46
2.48
2.47
2.50

2.58
2.59
2.59
2.58
2.58
2.58

1 94
1. 96
1.90
1. 91
1 94
1. 91

1.72
1 73
1. 79,
1.73
1.75
1.74

1.81
1.80
1.81
1.82
1.83
1.83

1.43
1.43
1.43
1.43
1.45
1.46

1.00
1.00
1.00
1.01
1.00
1.00

.730

2.48
2.48
2.49
2.48
2.48

2.58
2.60
2.62

1 93
1. 92
1. 94
1. 94

1.75

1.84
1.84
1.85
1.85
1.85

1.47
1.47
1.47
1.46

1.00
1.00
1.01
1.00
1.00

2.63
2.62

948

1 74
1. 79
1 81
1 83

1.47

.581

.697

.580

.663
""."678

i 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.
• * Prior to April 1945, data relate to all employees except executives; from April 1945-May 1949, mainly to
employees subject to the Fair Labor Standards Act; and beginning June 1949, to nonsupervisory employees
only.
« Composite rate per hour. Weighted average of all farm wage rates on a per hour basis.
* Not available.
6
Data beginning with January of year noted are not comparable with those for earlier periods.
8
Nine-month average, April through December, because of new series started in April 1945.
' Preliminary.
NoTE.—Data are for production workers in manufacturing and mining, construction workers in building
construction, and for all nonsupervisory employees in other industries (except as noted). Data are for payroll periods ending closest to the middle of the month. The annual figures for 1954 are simple 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 Labor and Department of Agriculture.




l62

T A B L E D-25.—Average gross weekly earnings in selected industries, 1020—54
Retail
trade
Bitumi- Build- Class I
(except
Tele- Whole- eating Launnous ing con- TQli
and
rail- phone 2 sale
coal
Dura- Nondries
structrade drinkroads 1
durable mining tion
ble
ing
goods goods
places)

Manufacturing
Period
Total

$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

1960—
1951
1952
1953
1954 •

59.33
64.71

63.32
69.47

54.71
58.46

67.97
71.69
71.64

73.46
77.23
77.01

1953: January
February. _
March
April
May
June
__.

71.34
71.34
71.93
71.40
71.63
72.04

July
August
September..
October
November..
December...

1929

(>)

(3)

83
((3))

(3)

3

8
8 (383)
83 (( ))
(3) 8
(
8)
()

(3)

(3)

8

8
8
«

$27. 72
26.11
26.37

8
8

$30.03
31.74
32.14

26.76
28.41
29.87
*29.54
29.82

$23.14

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

$14
$14.89
15.42
16.14
16.83
17.22
17.64
17.93
18.69
20.34
23.08
25.95

53.73
52.25
56.24
58.03
63.30
66.59
72.12 * 68.85
70.95
63.28

46.32
50.00
55.03
60.11
62.36

•40.12
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

27.73
30.20
32.71
34.23
34.98

70.35
77.79

73.73
81.47

64.14
70.93

54.38
58.26

60.36
64.31

47.63
50.65

35.47
37.81

60.98
63.60
64.59

78.09
85.31
79.95

88.01
91.76
94.19

74.30
76.33
(3)

61.22
65.02
68.23

67.80
71.69
73.83

52.67
55.02
56.89

38.63
39.69
40.10

77.10
77.33
77.52
77.56
77.19
77.42

62.88
62.88
63.60
62.81
63.20
63.52

87.79
81.42
81.76
79.61
84.97
91.25

88.93
89.78
89.79
90.04
91.01
92.23

74.61
76.95
75.30
76.82
74.43
77.75

63.69
63.58
63.03
63.20
64.63
65.13

69.08
69.66
69.89
70.53
70.93
71.10

53.45
53.70
53.70
53.96
54.21
55.16

39.36

71.33
71.69
71.42
72.14
71.60
72.36

76.70
77.27
77.14
77.90
76.73
77.52

63.76
63.76
63.57
63.67
63.73
64.45

84.97
92.88
86.15
89.78
81.17
82.25

91.64
93.62
90.97
95.76
93.59
93.29

78.31
75.36
76.33
77.30
76.04
76.78

64.35
64.24
68.16
66.01
67.90
65.84

72.09
71.91
72.72
72.67
72.50
73.26

56.26
56.12
55.52
55.24
55.10
54.49

39.30
39.10
39.80
39.70
40.00
40.60

954: January
February. _.
March
April
May
June

70.92
71.28
70.71
70.20
71.13
71.68

76.59
76.38
76.00
75.43
76.21
76.40

63.53
64.02
64.02
62.87
63.91
64.57

82.34
79.04
73.06
71.67
76.32
83.00

87.46
93.24
94.28
94.17
94.69
95.72

75.08
79.18
78.66
78.50
76.05
79.84

65.70
65.74
65.70
66.09
67.38
67.34

72.76
72.36
72.76
73.16
73.93
73.93

55.77
55.91
55.91
55.91
56.41
57.38

39.70
39.80
39.60
40.80
40.30
40.50

July
August
September..
October 6
November .
December fl ..

70.92
71.06
71.86
72.22
73.57
74.12

75.83
76.59
77.39
77.97
79.15
80.15

64.74
64.68
65.24
65.07
65.97
66.47

75.39
82.09
81.17
87.54
87.79

95.20
96.20
94.32
96.26
94.58

77.59
79.10
80.32
78.38

68.60
67.69
71.60
72.04
72.65

74.34
74.34
74.74
74.93
74.93
3

58.51
58.56
57.62
57.18
56.65
3

40.00
39.40
40.50
40.50
40.00
()

_.

(3)

1

(3)

(3)
(3)

(3)

()

I

()

39.38
39.58
40.67
40.08

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.
3
Prior to April 1945, data relate to all employees except executives; from April 1945-May 1949, mainly to
employees subject to the Fair Labor Standards Act; and beginning June 1949, to nonsupervisory employees
only.
« Not available.
* Data beginning with January of year noted are not comparable with those for earlier periods.
8
Nine-month average, April through December, because of new series started in April 1945.
6
Preliminary.
NOTE.—Data are for production workers in manufacturing and mining, construction workers in building
construction, and for all nonsupervisory employees in other industries (except as noted). Data are for payroll periods ending closest to the middle of the month. The annual figures for 1954 are simple 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.




163

PRODUCTION AND BUSINESS ACTIVITY
TABLE D-26.—Industrial production indexes, 1929-54

[1947-49=100]
Industrial production
Manufactures
Durable
Period
Total

1929..

Pri- FabriTotal
mary cated
Total met- metal
als products

FurClay,
Non- Elec- Trans- Instru- glass, niture
elecments and and
trical trical porta- and re- lum- miscellanema- tion lated
maous
ber
chin- chin- equip- prod- prod- manery ment ucts
ery
ucts ufactures

58

60

1930..
1931..
1932..
1933..
1934..

49
40
31
37
40

48
39
30
36
39

45
31
19
24
30

1935..
1936.,
1937..
1938..
1939..

47
56
61
48
58

46
55
60
46
57

38
49
55
35
49

1940-.
1941.
1942.
1943.
1944..

67
87
106
127
125

66
88
110
133
130

63
91
126
162
159

1945.
1946.
1947..
1948.
1949_

107
90
100
104
97

110
90
100
103
97

123
86
101
104
95

103
107
90

103
104

104
106
90

101
101

96
102
102

100
105
95

100
105

100
104
95

1950..
1951...
1952..
1953..
1954 i..

112
120
124
134
125

113
121
125
136
127

116
128
136
153
138

115
126
116
132
108

115
122
121
136
123

105
126
136
143
125

131
138
167
194
177

120
135
154
189
175

114
128
142
155
140

115
121
118
125
123

117
116
118
131
121

Seasonally adjusted
1953: January-..
February-.
March
April
May
June

134
134
135
136
137
136

136
136
137
138
139
138

154
155
155
155
156
154

135
137
136
136
139
137

135
136
137
138
139
139

144
145
147
147
146
144

203
200
195
195
194
194

191
191
190
190
192
188

153
153
155
153
156
157

126
128
127
127
127
124

129
128
131
134
135
135

July
August
September
October
November
December

137
136
133
132
129
126

139
138
135
134
131
127

157
157
152
151
146
142

136
137
130
128
122
113

142
140
135
134
130
128

145
145
141
141
136
133

200
203
200
193
184
172

196
191
186
189
180
182

156
156
155
154
155
154

127
125
124
124
123
119

134
135
129
129
126
124

1954: January. _.
FebruaryMarch
April
May
June

125
125
123
123
125
124

127
126
125
125
126
125

141
139
135
134
136
135

111
109
103
103
106
108

126
123
120
119
121
122

130
130
125
125
124
124

169
163
163
163
163
170

185
179
173
174
178
170

148
147
144
139
138
135

120
125
123
121
125
118

120
120
119
117
118
120

123
123
124
126
129
130

124
125
126
128
131
132

134
135
136
139
143
145

103
105
105
110
118
120

122
124
121
124
126
123

125
125
125
123
122
120

173
181
189
195
199
192

170
166
161
164

136
135
137
137
138
142

113
114
124
130
130
129

120
123
123
123
123
124

July
August
September
October
November
December *

See footnotes at end of table.




164

184
198

TABLE D-26.—Industrial production indexes, 1929-54—Continued
[1947-49-100J
Industrial production
Output of consumer durables
Manufactures
Nondurable

Period
Total

MinChemTex- Rub- Paper ical Foods, erals
ber
tiles
and beverand
and
and leather print- petro- ages,
apleum and toproding
parel ucts
prod- bacco
ucts

Major Other
conTotal Autos house- sumer
hold duragoods bles

1929..
1930..
1931..
1932..
1933..
1934..

1935..
1936..
1937..
1938-.
1939..
1940..
1941..
1942..
1943.
1944..

84
93
103
99

1945.
1946.
1947.
1948.
1949.

96
95
99
102

1950...
1951..
1952..
1953..
1954 i.

111
114
114
118
116

99
103
97

106
101
93

96
103
101

97
103
100

101
100
100

92
91
100
106
94

98
102
101

85
93
122

105
96

110
106
105
107
100

110
105
107
113
104

114
118
118
125
125

118
132
133
142
142

103
105
106
107
106

105
115
114
116
111

114
105
127
116

159
127
103
146
131

143
118
115
132
122

95
96
95
102
96

109
105

Seasonally adjusted
1953: January. _.
February.
March
April
May
June.
July
August
September.
October
November
December
1954: January
February
March
April
May.
_.
June
July
August
September
October
November
December^

117
118
119
121
123
121

__
_

107
108
110
113
115
113

117
118
119
120
122
113

121
123
125
125
126
126

138
139
140
144
146
145

106
108
108
108
109
106

116
116
115
115
117
119

127
130
132
135
138
134

137
146
150
157
160
158

140
141
140
144
148
139

101
102
103
103
104
103

121
119
117
117
115
112

111
106
102
102
98
95

116
111
105
105
103
104

126
126
126
126
125
122

146
143
143
142
141
140

107
108
108
108
108
103

120
119
118
114
111
113

137
129
121
118
112
109

164
150
137
132
127
127

143
136
125
121
110
104

102
101
101
101
101
97

113
114
114
115
117
116

97
98
99
101
101
99

103
102
103
103
106
107

122
123
124
125
126
126

138
141
139
140
142
142

105
105
106
106
110
108

113
113
112
109
111
114

112
113
112
116
119
119

133
134
133
139
145
136

107
110
109
115
120
124

95
96
94
93
93

114
114
115
117
118
119

98
99
98
103
104
107

99
97
103
108
108
109

126
126
127
127
127
127

141
141
144
143
144
147

105
105
105
105
105
105

112
109
108
109
112
116

117
115
109
106
125
133

127
121
94
86
144
166

128
131
134
132
132
133

93
91

1
Preliminary.
NOTE.—Prior to 1947, detail not available.

Source: Board of Governors of the Federal Reserve System.




165

101

TABLE D-27.—Farm production indexes, 1929-54
[1947-49=100]
Crops
Farm
output *

All livestock and
products

1929

74

77

79

227

1930
1931
1932
1933
1934

72
79
76
70
60

78
80
81
82
75

76
84
80
71
58

219
212
204
198
194

72
65
82
79
80

72
77
76
79
85

76
64
88
83
82

191
186
182
176
171

83
86
96
94
97

87
92
102
111
105

85
86
97
91
96

167
162
155
148
140

96
98
95
104
101

104
101
100
97
103

93
98
93
106
101

131
122
110
100
90

100
103
107
108
108

106
111
112
114
119

97
99
103
103
100

82
74
64
57
51

Year

.
_

1935
1936
1937
1938
1939

_

_.

. -

_

1940
1941
1942
1943
1944
1945
1946
1947
1948
1949

- - .-

_

-

- -

-- _ _
—
_

1950
1951
1952 1953
1954

_ .

-

All
crops *

Feed used
by farm
horses and
mules*

1
Net production during year which could be made available for sale or farm home use. Excludes production of feed for horses and mules.
J
Includes production of feed for horses and mules.
*Not included in total farm output.
Source: Department of Agriculture.




166

TABLE D-28.—Business expenditures for new plant and equipment, 1939 and 1945-55
[Billions of dollars]
Manufacturing
Period

Total i
Total

Transportation

Dura- Nonble
durable
goods goods

Mining
Railroad

Other

ComPublic mercial
utiliand
ties
other »

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

1950—.
1951—.
1952....
1953—
1954»«.

20.60
25.64
26.49
28.39
26.68

7.49
10.85
11.63
12.28
11.24

3.14
5.17
5.61
5.82
5.16

4.36
5.68
6.02
6.46
6.08

.71
.93
.98
1.01
1.02

1.11
1.47
1.40
1.31
.85

1.21
1.49
1.50
1.46
1.41

3.31
3.66
3.89
4.55
4.21

6.78
7.24
7.09
7.78
7.96

Seasonally adjusted annual rates
1953: First half...
Second half...

28.16
28.74

12.30
12.26

5.93
5.72

6.37
6.54

0.94
1.08

1.34
1.28

1.38
1.56

4.52
4.59

7.67
7.97

27.34
26.80

11.62
11.20

5.40
5.08

6.22
6.12

1.00
1.06

.99
.70

1.42
1.40

4.36
4.10

7.94
8.34

1953: First quarter
Second quarter
Third quarter
Fourth quarter

27.84
28.48
28.92
28.56

12.35
12.26
12.30
12.22

5.98
5.88
5.76
5.69

6.36
6.38
6.54
6.53

.96
.93
1.06
1.10

1.34
1.34
1.30
1.26

1.38
1.38
1.59
1.52

4.40
4.64
4.72
4.46

7.42
7.92
7.94
8.00

1954: First quarter
Second quarter
Third quarter
Fourth quarter*

27.48
27.19
27.00
26.59

11.87
11.37
11.30
11.11

5.50
5.29
5.15
5.01

6.37
6.08
6.15
6.10

.95
1.06
1.02
1.10

1.06
.92
.79
.62

1.47
1.36
1.40
1.39

4.29
4.43
4.12
4.07

7.84
8.05
8.37
8.30

1955: First quarter«

26.03

10.79

4.96

5.83

.93

.74

1.40

3.78

8.40

1954: First half
Second half*

._..

i Excludes agriculture.
* Commercial and other includes trade, service, finance, communications, and construction.
*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.
* Estimates for fourth quarter of 1954 and first quarter of 1955 based on anticipated capital expenditures
reported by business in November 1954.
NOTE.—These figures do not agree with those shown in column 2 of appendix table D-7 which pre included
In the gross national product estimates of the Department of Commerce, principally because the latter cover
agricultural investment and also certain equipment aDd 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.




167

TABLE D-29.—New construction activity, 1929-54
[Value put In place, millions of dollars]
Private construction

Period

Total
new construction

Nonresidential
building
(nonfarm)

ResidenTotal tial buildprivate * ing (nonfarm)
Commercial and
industrial

Other
private *

Total
public
construction

Other

1929..

10,793

8,307

3,625

2,084

610

1,988

2,486

1930..
19311932_.
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

1,425
675
297
306
364

578
424
205
100
92

1,805
1,104
544
355
428

2,858
2,659
1,862
1,648
2,211

19351936..
1937..
1938..
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

369
656
879
517
546

103
157
206
247
240

517
703
943
806
923

2,233
3, 516
3.096
3,420
3,809

1940..
1941..
194219431944..

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

790
1,210
501
189
264

235
272
134
44
87

1,044
1,214
1,065
861
1,020

3,628
5, 751
10,6P0
6,322
3,073

1945..
1946..
19471948..
1949..

5,633
12,000
16,689
21, 678
22, 789

3,235
9,638
13, 256
16,853
16,384

1,100
4,015
6,310
8,580
8,267

845
2,821
2, 558
2,650
1,999

175
520
584
971
1,229

1,115
2,282
3,804
4,652
4,889

2,398
2,362
3,433
4,825
6,405

1950..
19511952..
19531954*.

28,454
31.182
33, 008
35, 256
37,170

21,454
21,764
22,107
23,877
25, 720

12,600
10, 973
11,100
11,930
13,450

2,350
3,488
3,457
4,020
4,193

1,427
1,664
1,557
1,660
1,996

5,077
5,639
5,993
6,267
6,081

7,000
9,418
10, 901
11,379
11,450

Seasonally adjusted annual rates
1953: First half....
Second half.

35,522
34,990

23,798
23,956

11,958
11,902

3,978
4,062

1,604
1,716

6,258
6,276

11,724
11,034

1954: First half
Second h a l f .
1953: January
FebruaryMarch
April
May
June

36,430
37,910

24,644
26,796

12,388
14,512

4,234
4,152

1,926
2,066

6,096
6,066

11, 786
11,114

34,704
36,096
35,760
35, 856
35,184
35,532

22,992
23,364
23,652
24,252
24,144
24,384

11, 676
11,688
11, 784
12,192
12, 036
12,372

3,792
4,032
4,056
4,008
4,020
3,960

1,512
1,536
1,560
1,656
1,704
1,656

6,012
6,108
6,252
6,396
6,384
6,396

11,712
12, 732
12,108
11,604
11,040
11,148

34,992
34, 596
35,100
34, 560
35, 232
35, 460

24,096
24,000
23,928
23, 784
24,024
23,904

12,180
12,060
11,940
11, 748
11, 712
11, 772

3,876
3,984
4,032
4,044
4,212
4,224

1,692
1,656
1,668
1,716
1,812
1,752

6,348
6,300
6,288
6,276
6,288
6,156

10,896
10, 596
11,172
10, 776
11, 208
11,556

35, 580
36, 612
36,060
36, 324
37,068
36,936

23,940
24,048
24,132
24, 708
25, 572
25, 464

11,736
11, 760
11,868
12, 480
13,260
13, 224

4,308
4,356
4,296
4,176
4,152
4,116

1,776
1,836
1,872
1,968
2,064
2,040

6,120
6,096
6,096
6,084
6,096
6,084

11, 640
12, 564
11, 928
11, 616
11,496
11,472

37,128
37, 740
37,884
37,260
38,304
39,144

26, 076
26,628
26, 808
26, 652
27,108
27,504

13,800
14,304
14,568
14,520
14,736
15.144

4,092
4,212
4,164
4,080
4,188
4,176

2,112
2,040
2,016
1,992
2,124
2,112

6,072
6,072
6,G60
6,060
6,060
6,072

11,052
11,112
11,076
10,608
11,196
11,640

July
August
September.
October
November..
December—
1954: January—
FebruaryMarch
April
May
June
July
August
September..
October
November. .
December 1 ..

i 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.
iIncludes public utility, farm, and other private construction not shown separately.
* Preliminary.
Sources: Department of Commerce and Department of Labor*




168

TABLE D-30,—New public construction activity, 7929-54
[Value put in place, millions of dollars]
Total new public construction 1

Major types of new public construction

Federal
Year

All
public
sources Direct Federal
aid

State
and
local

Highway

Sewer
and
Hoswater
pital
Educa- and
and
tional institu- misc.
tional public
service

Conservation
and
development

Military
facilities

All
other
public

1929

2,486

155

80

2,251

1,266

389

101

404

115

19

192

1930
1931
1932
1933
1934

2,858
2,659
1,862
1,648
2,211

209
271
333
516
626

104
235
111
286
721

2,545
2,153
1,418
846
864

1,516
1,355
958
847
1,000

364
285
130
52
148

118
110
83
49
51

500
479
291
160
228

137
156
150
359
518

29
40
34
36
47

194
234
216
145
219

1935
1936
1937
1938
1939

2,233
3,516
3,096
3,420
3,809

814
797
776
717
759

567
1,566
1,117
1,320
1,377

852
1,153
1, 203
1,383
1,673

845
1,362
1,226
1,421
1,381

153
366
253
311
468

38
74
73
97
127

246
509
445
492
507

700
658
605
551
570

37
29
37
62
125

214
518
457
486
631

1940
1941_
1942.
1943
1944

3,628
5,751
10,660
6,322
3,073

1,182
3,751
9,313
5,609
2,505

946
697
475
268
126

1,500
1,303
872
445
442

1,302
1,066
734
446
362

156
158
128
63
41

54
42
35
44
58

469
393
254
156
125

528
500
357
285
163

385
1,620
5,016
2,550
837

734
1,972
4,136
2,778
1,487

1945
1946
1947
1948
1949

2,398
2,362
3,433
4,825
6,405

1,737
870
840
1,177
1,488

99
244
409
417
461

562
1,248
2,184
3,231
4,456

398
895
1,451
1,774
2,131

59
101
287
618
934

85
85
85
223
477

152
293
515
720
822

130
240
394
629
793

690
188
204
158
137

884
560
497
703
1,111

7,000
9,418
10,901
11,379
11,450

1,625
2,982
4,186
4,153
3,423

465
479
619
700
706

4,910
5,957
6,096
6,526
7,321

2,272
2,518
2,820
3,165
3,525

1,133
1,513
1,619
1,728
2,065

496
528
473
353
350

844
988
983
1,062
1,175

881
853
854
830
710

177
887
1,388
1,307
1,010

1,197
2,131
2,764
2,934
2,615

1950
1951
1952
1953_
1954 2

i For ownership, combine "Federal aid" and "State and local" columns to obtain State and local ownership. "Direct" column stands as it is for Federal ownership.
3
Preliminary.
Sources: Department of Commerce and Department of Labor.




169

TABLE D-31.—New nonfarm housing starts, by source of funds and by type of structure, 1929-54 *
[Number of units]
Source of funds
Period

Total
nonfarm
units

Private

Public

Type of structure

1-family

Multi2-familys family »

1929*-.

509,000

509,000

316,000

51,000

142,000

1930...
1931...
1932..
1933..
1934...

330,000
254,000
134,000
| 93,000
!
126,000

330,000
254,000
134,000
93,000
126,000

227,000
187,000
118,000
76,000
109,000

29,000
22,000
7,000
5,000
5,000

74,000
45,000
9,000
12,000
12,000

1935.
1936.
1937.
1938.
1939.

221,000
319,000
336,000
406,000
515,000

215,700
304,200
332,400
399, 300
458,400

5,300
14,800
3,600
6,700
56,600

183,000
244,000
267,000
317,000
399,000

8,000
14,000
16,000
18,000
29,000

30,000
61,000
53,000
71,000
87,000

1940.
1941.
1942.
1943.
1944.

602, 600
706,100
356,000
191,000
141,800

529, 600619,500
301,200
183,700
138,700

73,000
86,600
54,800
7,300
3,100

485,700
603,500
292,800
143,600
117,700

37,300
34,300
20,100
17,800
10,600

79,600
68,300
43,100
29,600
13,500

1945.
1946..
1947.
1948.
1949.

209,300
670,500
849,000
931,600
1,025,100

208,100
662, 500
845, 600
913, 500
988,800

1,200
8,000
3,400
18,100
36,300

184,600
590,000
740,200
766, 600
794,300

8,800
24,300
33,900
46,900
36,500

15,900
56,200
74, 900
118,100
194, 300

1950...
1951...
1952...
1953...
1954 «..

1, 396,000" 1,352, 200
1,091,300 1,020,100.
1,127,000 1,068, 500,
1,103,800 1,068, 300
1,215,500 1,196,100

43,800 1,154,100
71, 200 900,100
58. 500 942,500
35,500
937,800
19,400
()
•

44,800
40,400
45,900
41, 500
•)

Private
units,
seasonally adjusted
annual
rates

197,100
150,800
138, 600
124, 500
(•)

1953: First half....
Second half..

581,400
522,400

553,100
515,200

28,300
7,200

487,500
450,300

22,000
19,500

71,900
52,600

1,110,000
1,034,000

1954: First half.....
Second half 5 .

569,5ti0
646,000

558,700
637,400

10,800
8,600

496,800
(6)

16,300

56,400

1,116,000
1,290,000

1953: January._.
February..
March
April
May.
June

72,100
79,200
105,800
111,400
108,300
104,600

68,200
73,800
96,100
107,400
105,600
102,000

3,900
5,400
9,700
4,000
2,700
2,600

59,600
65,100
84,800
94,400
93,600
90,000

3,100
3,400
3,800
4,300
4,000
3,400

9,400
10, 700
17,200
12,700
10, 700
11,200

,106,000
,150,000
,165,000
,111,000
,065,000
,064,000

July
August
September..
October
November..
December..

96,700
93,200
95,100
90,100
81,500
65,800

96,400
92,200
92,100
90,100
79,900
64,500

300
1,000
3,000
w
1,600
1,300

84,400
81, 500
81,000
79,300
70,300
53,800

3,900
3,200
3,200
3,500
2,800
2,900

8,400
8,500
10,900
7,300
8,400
9,100

,015,000
988,000
,014.000
, 050,000
,077,000
,060,000

January...
February..
March
April
May
June

66,400
75, 200
95,200
107, 700
108,500
116,500

65,100
73,900
93,200
106, 500
107,400
112,600

1,300
1,300
2,000
1,200
1,100
3,900

53,100
64,700
83,200
96,100
97, 700
102,000

2,200
2,300
2,800
3,100
3,000
2,900

11,100
8,200
9,200
8,500
7,800
31,600

,056,000
,152,000
,130,000
,102,000
,083,000
,175,000

July
August
September...
October 5
November 8_.
December 5 ..

116,000
114,300
115,700
106,000
103,000
91,000

112,900
113,000
113,400
105,800
102, 700
89,600

3,100
1,300
2,300
200
300
1,400

101,600
103,000
103,900

3,100
3,100
3,100
(fl)

11,300
8,200
8,700
6
)

,211.000
,248,000

1954:

1

CO

8

,188,000
1,233,000
1,385,000
1,473,000

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.
« The number of starts for the years 1920-28, respectively, was as follows: 247,000; 449,000; 716,000; 871,000;
893,000; 937,000; 849,000; 810,000 and 753,000.
1
Preliminary.
• Not available.
1
Less than 50 units.
Source: Department of Labor.




170

TABLE D - 32.—Private nonfarm housing starts and proposed home construction: Government
underwritten, 1935-54
[Number of units]
Private nonfarm housing starts
Period

Government underwritten
Total

Proposed
home construction
Units
VA
in FHA appraisal
applica- requests
tions 2

Total

FHA

215,700
304,200
332.400
399,300
458,400

13, 964
49,376
60,003
118. 741
158,119

13,964
49,376
60,003
118,741
158,119

3 20,605
47,832
49,785
125,090
167,824

529,600
619,500
301,200
183,700
138,700

180,091
220,387
165,662
146,154
93,259

180,091
220,387
165,662
146,154
93,259

217,939
277,720
234,758
144,356
62,872

208,100
662,500
845,600
913,500
988,800

47,159
152, 033
440,035
396,059
468,802

41,159
69,033
229,035
294,059
363.802

6,000
83,000
211,000
102,000
105,000

56, 572
121, 701
286, 359
293,170
327,008

1,352,200
1,020,100
1,068,500
1,068,300
U,196,100

686,681
412,157
421,175
408,585
582,337

263. 523
279, 901
251,969
276,307

200,000
148, 634
141,274
156, 616
306,030

397,696
192, 759
267,915
253, 726
338,581

164.365
226, 299
251,437
535,412

1953: First half....
Second half..

553,100
515,200

195,846
212,739

126,378
125,591

69,468
87,148

162,482
91,244

129,961
121,476

1954: First half....
Second half...

558,700
* 637,400

238,810
343,527

125,444
150,863

113,366
192,664

160,937
177,644

238,954
296,458

1953: January
February
March
April
May
__.
June

68,200
73,800
96,100
107,400
105,600
102,000

26,872
27,715
32.537
36,329
33.855

17,557
17,258
22.407
23,319
21,676
24,161

9,315
10,457
10,130
13,010
12,179
14,377

19,934
22,472
31,399
30,252
33,204
25,221

13,806
20,898
20,717
22,037
25,318
27,185

July
August
September...
October
November...
December...
1954: January
February
March
April
May
June
July
August
September...
October
November...
December,..

96,400
92,200
92,100
90,100
79,900
64,500

38,494
41,110
36,160
36,350
33,151
27,474

23,645
23,469
21,838
21.676
19,653
15,310

14,849
17,641
14,322
14,674
13, 498
12,164

16,763
13,999
16,069
17,621
13,406
13,386

20,752
22,118
17,768
19,270
22,552
19,016

65,100
73,900
93,200
106,500
107,400
112,600

24,715
30,478
36,437
43,628
48,995
54,557

13,154
16,285
20,528
23,807
24,004
27,666

11, 561
14,193
15,909
19,821
24,991
26,891

15,007
20,008
28,055
32,333
30,327
35,207

112,900
113,000
113,400
U05.800
* 102,700
« 89,600

52,240
60,250
59,820
58,166
62,361
50,690

25,430
26,999
25,882
24,665
26,344
21,543

26,810
33,251
33,938
33,501
36,017
29,147

30,143
32,166
34,831
29,325
26,851
24,328

20,124
34,407
36,501
42,928
52,245
52,749
w • <
52,291
55,350
51,265
45,572
47,729
44,251

1935
1936
1937
1938
1939
1940
1941
1942
1943
1944

--

-

1945
1946
1947
1948
1949
1950.—
1951
1952
1953
1954

1 Data since June 1950 are based on VA first compliance inspection; prior data are estimates of units started
which resulted in VA-guaranteed first mortgage loans.
2 Units in mortgage applications for new home construction.
» FHA program approved in June 1934; all 1934 activity included in 1935.
* Preliminary.
Sources: Department of Labor, Federal Housing Administration (FHA), and Veterans Administra*
tion (VA).




171

T A B L E D-33.—Sales and inventories in manufacturing and tradey
Total manufacturing and trade

Period

Manufacturing

7939-54

Wholesale trade

Millions of Ratio Millions of Ratio Millions of
dollars
dollars
dollars
of inof in
venvenIn- tories
InIn- tories
to
to
venSales* ven 8 sales * Sales' ven- 3 sales *
tories
tories'
tories

Retail trade *

Ratio Millions of
dollars
of inventories
Into Sales: ventories'

Ratio
of inventories
to
sales *

Old series
1939.

10,802 20,051

1.771 5,11211,465

2.11 2,187 3,052

1.34 3,503 5,534

1.53

1940.
1941.
1942.
1943.
1944.

12,134 22,176
15,811 28,780
18, 623 31,091
21, 920 31,343
23,785131,059

1. 72| 5,859 12,819
1.58: 8,17216,960
1. 66 10, 430 19. 287
1.40 12,820 20,098
1.33,13,782,19,507

2 06!
1.78|
1.771.51
1.45

2.410
3,033
3,426
3,830
4,152

3,238
< 044
3,781
3,684
3,912

1.30
1.20
1.19
.97

3,865!
4,606
4,768
5,270
5,851

6.119
7,776
8,023
7,561
7,640

1.49
1.48
1.76
1.43
1.31

1945.
1946.
1947.
19481949.

23,852*30,893
27,150 42, 892
33,156 50, 484
3ft, 438 55, 612
34,664,52, 111

1.30'l2,87318,390
1.33 12, 617 24,457
1. 43 15. 917 28,874
1. 47 17, 630 31, 693
1.5616,41628,860

1.48
1.66
1.71
1.72
1.86

4,476
5,993!
7,272
7,931
7,354

4,555
6.583
7,550
8,091
7,940

.91 6.503 7,948
.90 8,54111,852
1. Oil 9,967 14,060
.99 10,877 15,828
1.08|10,89315,311

1.21
1.13
1.27
1.40
1.43

1950.

39,917 64,092

1.40 19,285 34,314

1.57 8,65810,462

1.03 11,974 19,316

1.40

1.20
1.18
1.
1.29

13,
3,185 21,239
"1,592
13,674 21
4, 228 22, 6fil
14,233 22,116

1.63
1.53
1.57
1.58

1.22 14,368 22, 294
1.29 14,100 22,661
1.30 14,036 22,600
1.2814,378 22,116
1. 23 14, 21,518
140
.
.
1.22 14,514 21 ,707
1.21 14,437 21.981
1. 20 14, 280 22,
!,387
1.26 14,424 22, 455
!
.
1.20 14,412 22,294
1.23 14, 469 22,
2,743
1. 32 14,073 22,
2,775
1.29 13,982 22,924
2,924
1. 30 14,040 22,720
.
.
L
1.31 14,104 22,437
. 13,!
1. 29 3,932 22,661
1.31 13,622 22,521
1.30 13,972 22,421
1.29 13,900 22,
1.30 14, 242 22,
1.32 14,044 22,804
1.30 14,439 22,600
1.30 14,272 22,403
1.3O|14,150 22,451
1.28114,214 22,425
1.30J14.071 21V
1.26 14,361 22,116
_..__ 15,204

1.53
1.61
1.61
1.55
1.52
1.49
1.51
1.55
1.55
1,55
1.56
1.62
1.63
1.63
1.60
1.62
1.66
1.61
1.62
1.59
1.62
1.57
1.58
1.58
1.58
1.68
1.54

New series 1
1951
1952
1953
1954»

44,821 75,2681
46,080 77,109
48,836 81,072
47,285 77,645

1.61 22,205 42,904
1. ~\ 046 44,190
.64 23,
1.64 25; 280 46, 722
i
.
1.67 23,97043,811

1.78
1.89
1.81
1.87

9,431 11,125
9,360 11,327
9,328 11,689
9,082,11,718

i

Seasonally adjusted
1953: First half
Second half. „
1964: First half
Second half K.
1953: January
February
March
__.
April
May
June
July
August
September..
October
November..
December..
1954: January
February...
March
April
May
June
July
August
September...
October
November*.
December 6_.

49,268 80,167
48,366 81,072
" 366
•
47,098 79,,000
47,474 77,645
47,819 77,130
48, 533 77,693
49,671 78,266
50,186 78,996
49,395 79,678
50,003 80,167
50, 398 81,116
48,138 81.586
48,652 82,000
48, 284 81,805
47,518 81,276
47, 209 81,072
46,450 80,688
46,714 80,390
47,094 80,093
47,636 79,516
46,914 79,372
47,779 79,000
47,417 78,349
46,717 78,163
46,985,77,790
46,420 77,564
48,233 77,645

1.59 25,508 46,160
1.68 25,034 46,722
1.70 24,040 44,535
1.64 23,946 43,811
1.61 24, 507 44,330
,
1.60 24,7 724 44,581
,
44, 797
1.57 25, 776345,164
1.57 26.358
1.61 25,816 45,673
1.60 25,882 46,160
1.60 26.366 46,485
1.69 25,067 46.888
1.68 25,379 47,087
1. 70 25.010 47,044
1.72'24.256 46,909
1.72 24,126 46,722
1.74 23,902 46,382
1. 72 23,620 46,115
1.70 24,064 45, 774
1.68 24,418 45,'"
5,183
1.69:23,978 44,
4,798
1.66 24,260 44
4,535
1. 66 24,055 44,194
1.68 23,482143,929
1.66 23,612,43,668
1.67 23,337143,841
1.6124,596 43,811

1.76
1.87
1.90
1.83
1.81
1.80
1.73
1.71
1.76
1.77
1.76
1.86
1.85
1.
1.94
1.94
1.95
1.96
1.91
1.86
1.88
1.84
1.84
1.
1.85
1.87
1.78

9,392111,713!
9,232|ll,689j
9,021 11,865
9,150 ll,718j
9,172 11,282
9,295 11,405
9,471 11,488
9,548 11,445
9,155 11, 550
9,709 11,713
9,563 11,888
8.998 11, 923
9,291 11.989
9. 234 12.041
9,158 11,930
9,151 11,689
8,926 11,785
9,122 11,854
9,130 11,756
8,976111,643
8,892 11,770
9,080 11,865
9,090 11,752
9,085 11, 783
9,159 11,697
9,012 11,727
9,276! 11, 718

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 1951-54 are on the new basis. For a description of the retail sales and
inventories series, see Survey of Current Business, September and November 1952.
* Monthly average shown for year and half-year and total for month.
* Seasonally adjusted, end of period.
< For annual and semiannual periods weighted average inventories to average monthly sales; for monthly
data, ratio of average end of current and previous month's inventories to sales for month.
8
Where December data not available, data for year and half-year calculated on basis of no change from
November.
* Preliminary.
NOTE.-—The inventory figures hi 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.




17a

TABLE D-34.—Manufacturers*

new orders, sales, and inventories, 1939-54

[Millions of dollars, not seasonally adjusted]
New orders 1

Period

Sales »

Inventories *

Durable-goods industries Nondurable-goods
industries!!
DuraNon- DuraNonble- durable- ble- durablegoods
goods
goods goods
PurPur- GoodsFinindus- indus- indus- indus- chased Goods- Fininished chased
intries
tries
tries
tries
mate- process goods mate- proc- ished
goods
rials
rials

1939

2,169

3,186

1,950

3,162

1,802

1,482

2,048

2,520

1940
1941.___
1942
1943
1944....

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

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
,114
,224
,289
,334

2,983
3,202
3,267
3,057
3,054

3,944
5,942
6,365
/,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
4,721

3,497
4,558
5,120
5,319
4,650

2,059
2,791
3,893
4,650
4,585

5,040
6,657
7,353
7,400
6,700

,440
,739
2,122
2,157
2,031

3,213
4,274
5,290
6,499
6,351

1950
1951
1952
1953-.
1954«

10,314
12, 718
11,888
11,374
10,265

10,665
11,672
11,822
12,486
12,697

8,804
10,433
11,206
12,725
11,253

10,480
11,772
11,840
12,555
12,678

6,256
7,598
7,543
7,746
6,601

5,922
8,380
9,954
10,554
9,711

4,590
6,711
6,870
8,397
7,701

8,672
9,418
9,006
8,673
8,188

2,452
2,640
2,679
2,750
2,789

6,642
8,376
8,390
8,827
8,618

1953: First half
Second half

12,763
9,986

12.388
12,584

13,107
12,342

12, 335
12,775

7,697
7,746

10,719
10,554

7,923
8,397

8,399
8,673

3,043 8,553
2,750 8,827

1954: First half
Second half»

9,837
10,778

12,499
12,935

11,472
10,991

12,440
12,963

6,737
6,601

9,711

8,337
7,701

8,045
8,188

2,769 8,893
2,789 8,518

1953: J a n u a r y . . .
February.
March
April
May
June

12,786
12,266
13,404
12,959
12,176
12,985

12,065
11,743
12,945
12, 520
12,388
12,669

12.020
12,344
13,812
13,703
13,178
13,586

11,986
11,721
12,946
12, 593
12,290
12,472

7,335
7,263
7,232
7,202
7,506
7,697

10,116
10,324
10,654
10,756
10, 730
10,719

7,149
7,260
7,412
7,650
7,857
7,923

8,871
8,824
8,817
8,636
8,451

2,845
2,934
2,891
2,956
2,962

8,375
8,253
8,152
8,162
8,378
8,553

July
August
September
October..
November
December

11,588
10,133
10,090
9,830
8,930
9,347

12, 244
12,539
13,145
13,452
12,025
12,101

12, 317
12, 484
12,917
13t 223
11,499
11,615

12,383
12, 792
13, 246
13,622
12.293
12,314

7,895
8,028
7,996
7,976
7,895
7,746

10,713
10,738
10, 723
10,565
10.473
10,554

7,855
7,798
7,893
8,057
8,181
8,397

8,346
8,216
8,429
8,426
8,482
8,673

2,985
2,907
2,828
2,786
2,676
2,750

8,642
8,802
8,777
8,719
8,825
8,827

8,687
9,495
10, 779
10, 290
9,472
10, 297

12,195
12, 031
13,078
12, 654
12,236
12,802

10,870
10,968
12, 208
11,814
11,165
11,804

12,192
12,002
13, 092
12, 676
12,098
12, 580

7,476
7,247
6,943
6,713
6,731
6,737

10, 676
10,436
10, 473
10,348
10,109
9,903

8,446
8,552
8,626
8,568
8,496
8,337

8,547
8,536
8,428
8,217
8,095
8,045

2,836
2,849
2,838
2,864
2,780
2,769

8,791
8,735
8,651
8,641
8,763
8,893

9,712
9,918
11, 696
11,464
11,102

12.013
12,986
13. 436
13,317
12,921

10, 252
10,855
11,109
11,153
11,586

12.014
13,088
13. 297
13,384
13,034

6,802
6,703
6,561
6,612
6,601

9,658
9,497
9,572
9,762
9,711

8,000
7,838
7,653
7,670
7,701

8,120
8,0 3
8,J 3
8,0d8
8,188

2,749
2,717
2,691
2,739
2,789

8,828
8,717
8,636
8,565
8,518

....
_

1945
1946
1947
1948
1949

1954: January
February. _
March
April
May
June
July...
August
September
October
November

* Monthly average shown for year and half-year and total for month.
2
Book value, end of period.
* Based on data through November.
Source: Department of Commerce.




173

786 2,878

PRICES
TABLE D-35.—Wholesale price indexes, 1929-54
[1947-49=100] *
All commodities other than farm products
and foods
All
commodities

Period

Monthly average:

Farm
products

Processed
foods
Total

1929

_

61.9

58.6

58.5

—

66.1
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
66.0

52.0
52.5
56.1
51.1
60.1

44.0
45.2
48.3
38.3
36.5

52.1
50.1
52.4
45.6
43.3

65.7
56.9
61.0
58.4
68.1

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

1945
1948
1947
1948
1949

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

1950
1951
1952
1953
1954*

103.1
114.8
111.6
110.1
110.3

97.5
113.4
107.0
97.0
95.7

99.8
111.4
108.8
104 6
105.3

1953: First half
Second half

109.7
110.4

98.0
96.0

1954: First half Second half *

110.6
110.0

Chemicals
Rubber Lumber
and
and
and
wood
allied
prodprodproducts
ucts
ucts

65.5

1930
1931
1932
1933
1934

Textile
products
and
apparel

„

1935
1936---

1937
1938
1939
1940
1941
1942
1943
1944

-

1953* January
February
March . _
April
May
June

-

._ _

July
August
September..
October
November December
1954: January
February
March
April
May
June
July
August September
October
November

83.6

31.9

51.2
53.7

73.0
62.0
53.8
66.8
65.8

29.4
23 8
20.3
24.2
28.5

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

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

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

105.0
115.9
113.2
114.0
114.5

99.2
110.6
99.8
97.3
95.2

96.3
110.0
1015
105.7
107.0

120.5
148 0
134.0
125.0
126.9

113.9
123.9
120 3
120 2
118.0

104.3
105.0

113.4
114.7

97.9
96.7

104.7
106.7

125.7
124.2

121.5
118.9

97.7
93.7

105.7
104.9

114.4
114.6

95.1
95.3

107.2
106.9

125.1
128.7

116.5
119.5

109.9
109.6
110.0
109.4
109.8
109.5

99.6
97.9
99.8
97.3
97.8
95.4

105.5
105.2
104.1
103.2
104.3
103.3

113.1
113.1
113.4
113.2
113.6
113.9

98.8
98.5
97.5
97.4
97.6
97.4

103.6
103.6
104.2
105.5
105.5
105.6

127.3
126.2
125.7
124.8
125.4
125.0

120.5
121.1
121.7
122.2
121.8
121.5

110.9
110.6
111.0
110.2
109.8
110.1

97.9
96.4
98.1
95.3
93.7
94.4

105.5
104.8
106.6
104.7
103.8
104.3

114.8
114.9
114.7
114.6
114.5
114.6

97.5
97.5
96.9
96.5
96.2
95.8

106.2
106.3
106.7
106.7
107.2
107.1

124.6
123.5
124.0
124.2
124.3
124.8

121.1
120.4
119.2
118.1
117.3
117.4

110.9
110.5
110.5
111.0
110.9
110.0

97.8
97.7
98.4
99.4
97.9
94.8

106.2
104.8
105.3
105.9
106.8
105.0

114.6
114.4
114.2
114.5
114.5
114.2

96.1
95.3
95.0
94.7
94.8
94.9

107.2
107.5
107.4
107.2
107.1
106.8

124.8
124.6
124.9
125.0
125.1
126.1

117.0
116.8
116.7
116.2
116.1
116.3

110.4
110.5
110.0
109.7
110.0
109.5

96.2
95.8
93.6
93.1
93.2
90.0

106.5
106.4
105.5
103.7
103.8
103.4

114.3
114.4
114.4
114 5
114.8
114.9

95.1
95.3
95.3
95.4
95.2
95.2

106.7
106.8
106.8
106.9
107.0
107.0

126.8
126.4
126.9
128.5
131.4
132.0

119.1
119.1
119.3
119.8
119.9
120.0

See footnotes at end of table.




174

:

:

s
(»)
8
«

TABLE D-35.—Wholesale price indexes, 1929-54— Continued
[1947-49=100]»

All commodities other than farm products>nd foods (continued)

Hides,
skins,
and
leather
products

Period

Fuel,
power,
and
lighting
materials

Monthly average:
1929

59.3

1930
1931
._
1932
1933
1934
1935
.__
1936..
1937
1938
1939
1940
1941
1942.
1943
1944
1945
1946.
1947
1948-_____
1949
19501951
1952
1953
1954*

..

_.

70.2

54.4
46.8
39.7
44.0
47.1
48.7
51.9
56.9
50.5
52.0

66.5
57.2
59.5
56.1
62.0

1953: January
February
March
April
May
June

_.

July
August
September...
October
November
December
1954: January
February
March.. _
April
May
June
July
August
September...
October
November
December, 4 ..

00

()

8
8

Metals
and
metal
products

Machinery and
motive
products

54.1
49.9
50.9
56.2
56.2
57.3
65.6
63.1
62.6
62.8
64.0
64.9
64.8
64.8

8

(3)

()
98.6
102.9
98.5
100.9
119.6
116.5
116.1
116.3

110.3
122.8
123.0
126.9
128.0

107.8
111.1

115.4
116.8

125.3
128.4

65.3
66.2
68.6
71.2
71.0
71.0
71.6
80.3
92.5
100.9
106.6
108.6
119.0
121.5
123.0
124.6
122.0
124.0

95.2
93.2

109.2
107.0

116.4
116.?

126.8
129.2

97.3
98.0
98.1
97.9
100.4
101.0

107.8
108.1
108.4
107.4
107.1
108.3

115.8
115.3
115.1
115.3
115.4
115. R

100.0
99.9
99.7
97.1
97.1
95.6

111.1
111.0
110.9
111.2
111.2
111.1

95.3
94.9
94.7
94.6
96.0
95.6
94.9
94.0
93.0
92.4
92.8
91.8

54.8
58.9
64.0
63.9
63.4
64.2
74.6
101.0
102.1
96.9
104.6
120.3
97.2
98.5
94.2

(3)

Furniture
and
other
household
durables

Nonmetallic

minerals
(structural)

69.3

67.0

62.2
64.5
65.7
64.7
61.8
60.7
64.5
66.4
68.4
70.3
71.1
76.2
90.9
107.1
101.9
103.0
106.7
106.6
109.5
108.1

1953: First half-.
Second half.
1954: First half...
Second half4.

Pulp,
paper,
and
allied
products

(*)

72.6

68.2
62.8
55.4
55.5
60.2

72.4
67.6
63.4
66.9
71.6

59.8
60.6
67.2
65.6
65.4

71.6
71.7
73.4
71.1
69.5

Tobacco
manufactures Misceland
bottled laneous
beverages *

87.1
84.6
81.4
72.8
76.0
75.9
75.8
76.5
76.4
76.4

(8)
8
3
3

(( ))

8
3
(8)
8

78.6
83.0
95.6
101.4
103.1

69.7
71.3
74.1
74.5
75.9
79.1
84.2
93.9
101.7
104.4

105.3
114.1
112.0
114.2
115.4

106.9
113.6
113.6
118.2
120.9

85.8
89.7
97.2
100.5
102.3
103.5
109.4
HI.8
115.7
120.6

113.5
114.8

116.1
120.3

113.8
117.0

100.0
95.7

124.4
124.7

115.3
115.5

120.4
121.4

119.7
121.5

105.6
99.5

124.0
124.6
125.5
125.0
125.7
126.9

121.5
121.6
121.8
122.0
122.4
122.9

112.7
112.9
113.1
113.9
114.1
114.3

114.6
114.6
115.1
116.9
117.2
118.1

111.9
111.9
114.8
114.8
114.8
114.9

103.0
101.2
101.7
98.5
99.7
95.8

115.8
116.2
116.9
117.5
117.3
117.1

129.3
129.4
128.5
127.9
127.9
127.5

123.4
123.7
124.0
124.1
124.2
124.3

114.7
114.8
114.9
114.8
114.9
115.0

119.4
119.6
120.7
120.7
120.8
120.8

115.6
115.6
116.2
118.1
118.1
y
- 118.1

95.3
96.4
94.7
94.4
93.2
100.1

110.8
110.5
109.2
108.6
108.2
107.8

117.0
117.1
116.6
116.3
115.8
115.8

127.2
126.2
126.3
126.8
127.1
127.1

124.4
124.5
124.5
124.4
124.4
124.3

115.2
115.1
115.0
115.6
115.5
115.4

120.9
121.0
121.0
120.8
119.3
119.1

118.2
118.0
117.9
121.5
121.4
121.4

101.1
102.8
104.9
110.3
109.2
105.1

106.2
106.9
106.9
106.9
107.4
107.8

116.2
116.3
116.3
116.3
116.0
115.9

128.0
128.6
129.1
129. 7
129.9
129.8

124.3
124.3
124.4
124.3
125.3
125.6

115.3
115.3
115.3
115.6
115.6
115.7

120.4
120.5
121.7
121.9
121.8
121.8

121.4
121.5
121.5
121.5
121.4
121.4

103.9
102.3
99.1
96.7
97.0
98.0

8
8

65.9
73.9
91.3
103.9
104.8

71.2
76.8
76.4
78.4

77.3
78.1
79.1
83.0
83.4

()

()
100.8
103.1
96.1
96.6
104.9
108.3
97.8
102.5

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 January 1947 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).
a 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.
* Not available.
«Preliminary.
Source: Department of Labor.




'75

TABLE D-36.—Consumer price indexes, 7920-54

For city wage-earner and clerical-worker families
[1947-49-100]
Housing
Period

Monthly average:
1929

All
items

Food
Total

Rent

Apparel

Trans- Medi- Per- Read- Other
porta- cal
8onai ing and goods
and
tion
care
care recrea- services
tion

73.3

65.6

0)

117.4

60,3

0)

1931..
1932..
1933..
1934..

71.4
65.0
58.4
55.3
57.2

62.4
51.4
42.8
41.6
46.4

8
8

114.2
108.2
97.1
83.6
78.4

58.9
53.6
47.5
45.9
50.2

8 8
8

1935..
1936..
1937..
1938..
1939..

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

50.6
51.0
53.7
53.4
52.5

8
8
8 0)

1940
1941
1942
1943.
1944

62.9
69.7
74.0
75.2

47.8
52.2
61.3
68.3
67.4

0)
0)
0)
0)
0)
0)

86.9
88.4
90.4
90.3
906

53.2
55.6
64.9
67.8
72.6

90.9
91.4
94.4
100.7
105.0

76.3
83.7
97.1
103.5
99.4

108.8
113.1
117.9
124.1
128.4

98.1
106.9
105.8
104.8
104.3

90.6
100.9
108.5
111.3
118.4
126 2
129.7
128.0

_

8
8
0)
0)
0)

0)
0)
0)

0)

8
8
8

1945_.
1946..
1947..
1948..
1949.

68.9
76.9
79.0
83.4
95.9
95.5
102 8 104.1
101.8 100.0

1950...
1951...
1952...
1953...
1954 *_.

102.8
111.0
113. 5
114.4
114.9

101.2
112.6
114.6
112.8
112.8

95.0
101.7
103.3
106.1
112.4
114.6
117.7
119.1

113.8
115.0

112.3
113.3

116.9
118.4

122.1
126.1

104.6
105.0

129.3
130.1

94 9
100.9
104.1
106.0
111.1
117.2
121.3
125.1
120.0
122.6

115.0
114.8

112.9
112.8

118.8
119.3

128.1
128.8

104.4
104.2

129.3
126.5

113.9
113.4
113.6
113.7
114.0
114.5

113.1
111.5
111.7
111.5
112.1
113.7

116.4
116.6
116.8
117.0
117.1
117.4

121.1
121.5
121.7
122.1
123.0
123.3

104.6
104.6
104.7
104.6
104.7
104.6

114.7
115.0
115.2
115.4
115.0
114.9

113.8
114.1
113.8
113.6
112.0
112.3

117.8
118.0
118.4
118.7
118.9
118.9

123.8
125.1
126.0
126.8
127.3
127.6

115.2
115.0
114.8
114.6
115.0
115.1

113.1
112.6
112.1
112.4
113.3
113.8

118.8
118.9
119.0
118.5
118.9
118.9

115.2
115.0
114.7
114.5
114.6

114.6
113.9
112.4
111.8
111.1

119.0
119.2
119.5
119.5
119.5

1953: First half
Second half
1954: First half
Second h a l f
1953: January...
February.
March
April
May
June
July
August
September.
October
November..
December...
1954: January...
February.
March
April
May
June
July
August
September..
October
November..

0)
0)

0)
0)
0)
0)
0)
0)
0)

(0
0)

97.6
101.3
101.1
101.1
110.5
111.8
112.8
113.4

95.5
100.4
104.1
103.4
106 5
107.0
108.0
107.1

112.5
113.1

107.8
108.2

124.6
125.7

113.4
113.5

107.4
106.8

129.3
129.1
129.3
129.4
129.4
129.4

119.4
119.3
119.5
120.2
120.7
121.1

112.4
112.5
112.4
112.5
112.8
112.6

107.8
107.5
107.7
107.9
108.0
107.8

104.4
104.3
105.3
105.5
105.5
105.3

129.7
130.6
130.7
130.7
130.1
128.9

121.5
121.8
122.6
122.8
123.3
123.6

112.6
112.7
112.9
113.2
113.4
113.6

107.4
107.6
107.8
108.6
108.9
108.9

127.8
127.9
128.0
128.2
128.3
128.3

104.9
104.7
104.3
104.1
104.2
104.2

130.5
129.4
129.0
129.1
129.1
128.9

123.7
124.1
124.4
124.9
125.1
125.1

113.7
113.9
114.1
112.9
113.0
112.7

108.7
108.0
108.2
106.5
106.4
106.4

128.5
128.6
128.8
129.0
129.2

104.0
103.7
104.3
104.6
104.6

126.7
126.6
126.4
125.0
127.6

125.2
125.5
125.7
125.9
126.1

113.3
113.4
113.5
113.4
113.8

107.0
106.6
108.5
106.9
106.8

»Not available.
Based on data through November.
Source: Department of Labor.

8




0)

176

TABLE D—37.—Indexes of prices received and prices paid by farmers, and parity ratio, 1929—54
[1910-14-100]

Parity
index
(prices Prices
paid, received
interest,
by
taxes, and farmers
Produc- wage
tion
rates)

Prices paid by
farmers for items
used in
Period
Family
living

Parity
ratio i

Monthly average:
1929

„..„

154

146

160

148

92

144
124
106
108
122

135
113
99
99
114

151
130
112
109
120

125
87
65
70
90

83

124
124
128
122
120

122
122
132
122
121

124
124
131
124
123

109
114
122
97
95

88
92
93
78
77

121
130
149
166
175

123
130
148
164
173

124
133
152
171
182

100
124
159
»193
*197

105
113
108

1945
1946
1947. .
1948
1949

182
202
237
251
243

176
191
224
250
238

190
208
240
260
251

*207
J236
276
287
250

109

1950
1951
1952
1953 .
1954

246
268
271
270
274

246
273
274
253
252

256
282
287
279
281

258
302
288
258
250

101

1953: First half __
Second half

269
271

258
248

281
278

262
254

94

1954: First half
Second half

273
274

255
250

283
280

256
245

88

268
266
269
269
270
271

265
261
261
257
256
247

284
281
282
280
280
277

268
264
264
259
263
257

94
94
94
92
94
93

271
273
270
270
270
270

250
248
247
245
247
249

278
279
277
276
277
278

260
255
257
249
249
254

94
91
93
90
90
91

271
271
272
273
276
276

254
255
255
256
256
252

282
282
283
283
284
282

259
258
256
257
258
248

92
91
90
91

277
277
273
273
272
272

247
250
251
250
251
250

280
282
280
279
279
279

247
251
246
242
244
239

88

1930._>
1931
1932
1933
1934

.

1935
1936
1937_._
1938
1939

.

_

1940
1941
1942
1943 __
1944

1953: January
February
March

.

. __

_

April
May
June
July
August
September
October
November
December
1954: January
February
March
April
May . .
June
July
August
September
October
November
December

...

_.
_.

_,
,_^

_
_

67
58
64
75

81
93

113
115

110
100
107

100
92
89

92
90

91
88

89
88
87
87
86

1
Ratio 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.




177

TABLE D-38.—Indexes of wholesale prices and cost of living in the United States and foreign
countries^ selected dates
[1948=100]
Cost of living

Wholesale prices
Country

January
1954

Latest data

Latest data

January
1954

Index

Index

Date, 1954

106

105

December.

112

111

November.

127
107
129
76
256

125
103
134
76
283

July.
September.
October.
October.
October.

140
104
118
71
227

140
100
128
72
240

October.
September.
October.
October.
October.

74
137
155
150

71
136
159
152

September.
October.
August.
October.

86
2 161
2 168
130

83
2 160
2 168
134

September.
October.
August.
October.

244
106
133
155
110

258
105
136
151
110

November.
October.
November.
November.
September.

204
107
123
166
107

210
107
125
166
109

November.
November.
October.
October.
October.

3 156
127
97
135
152

3 162
126
97
136
155

October.
September.
October.
October.
November.

178
* 125
117
131
137

185
127
121
135
143

October.
Third quarter.
October.
October.
October.

110
176
138
98
115
149

109
176
138
99
117
150

September.
September.
October.
October.
September.
October.

102
128
* 131
104
120
130

101
128
131
106
122
134

October.
September.
September.
November.
October.
October.

(5)
228
329
101
93

(5)
260
466
104
93

(8).
September.
September.
October.
July.

318
170
335
122
«87

338
200
518
128
2 86

August.
October.
October.
October.
August.

Dominican Republic
El Salvador
Guatemala
Mexico
Nicaragua

87
169
112
152
175

91
160
124
173
170

October.
November.
October.
October.
August.

100
155
118
140
2 159

102
152
126
152
2 164

Paraguay
Peru
Venezuela

951
216
98

1,110
231
101

August.
September.
September.

1,275
171
118

1,454
176
115

186
109
159
288

186
102
162
275

September.
November.
August.
October.

* 179
106
206
169

179
103
203
171

Third quarter.
September.
August.
September.

139
198
99

138
»92
99

September.
November.
September.

*139
86
139

141
88
128

Third quarter.
October.
September.

114
159

111
155

October.
November.

120
158

120
158

November.
October.

United States
Africa and Near East:
Algeria^ ._ .
Egypt
Iran
Iraq
Israel
Lebanon
Morocco
Tunisia .__
Union of South Africa..

_-.

__

Western European countries:
Austria
Belgium
Denmark
France
Germany (Federal Republic)...
Greece
Ireland
Italy
Netherlands
Norway..

_.

Portugal _ _ _ _ _ _
Spain
Sweden
_ __
Switzerland
Turkey
United Kingdom . . .

....

Latin America:
Argentina
Brazil
Chile
Costa Rica
Cuba

Pacific and Far East:
Australia
India
Indochina 1
Japan .
New Zealand
Philippines.
Thailand
Other:
Canada
Finland

_

_ ...

11949=100.
Includes food costs only.
'1950=100.
4
First quarter.
8
Not available.
NOTE.—The components of the indexes are not the same for all countries.
Sources: International Monetary Fund and United Nations Organization.
2




I7 8

Date, 1954

November.
August.
September.
October.
August.
September.
September.
March.

CREDIT, MONEY SUPPLY, AND FEDERAL FINANCE
TABLE D-39.—Short- and intermediate-term consumer credit outstanding, 1929-54
[Millions of dollars]
Instalment credit
End of period

Total
Total

Other
Autoconmobile sumer
paper 1 goods
paper*

Noninstalment credit

Repair
and
Permodern- sonal
ization loans
loans 2

Total

Charge
acOther *
counts

1929

6,444

3,151

3,293

1,602

1,691

1930.
1931
1932
1933
1934

5,767
4,760
3,567
3,482
3,904

2,687
2,207
1,521
1,588
1,871

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

1,497

1,620

298

1,088

2,217
2,512
2,674
2,647
2,719

1,183
1,300
,336
,362
,414

1,034
1,212
1,338
1,285
1,305

1940
1941
1942
1943
1944

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

,471
,645
,444
,440
,517

1,353
1,442
1,373
1,325
1,418

1945.
19461947
1948
1949

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

1950
1951_
1952,
1953
1954 8_

20, 813
21, 468
25,827
29, 537
30,200

14,490
14,837
18,684
22,187
22, 500

6,342
6,242
8,099
10.341
10,400

4,337
4,270
5,328
5,831
5,700

1,006
1,090
1,406
1,649
1,600

2,805
3,235
3,851
4,366
4,800

6,323
6,631
7,143
7,350
7,700

3,006
3,096
3,342
3,411
3,500

3,317
3,535
3,801
3,939
4,200

1953: J a n u a r y . _ .
February._
March
April
May
June—...

25, 708
25. 569
26,050
26, 595
27,231
27,606

18,872
19,017
19, 447
19,844
20. 308
20, 745

8,273
8,479
8,798
9,110
9,429
9,688

5,306
5, 237
5,263
5,279
5,348
5,420

1,403
1,405
,417
,438
,468
,500

3,890
3.896
3,969
4,017
4,063
4,137

6,836
6,552
6,603
6,751
6,923
6,861

2,985
2,699
2,642
2,722
2,812
2,834

3,851
3,853
3,961
4,029
4,111
4,027

July
August
SeptemberOctober
November.
December.

27,838
28,127
28,344
28, 600
28, 760
29,537

21,157
21,410
21,581
21, 766
21,907
22,187

9,980
10,153
10,260
10,373
10,404
10,341

5,457
5,483
5,492
5,529
5,587
5,831

,530
,555
,588
,619
,645
,649

4,190
4,219
4,241
4,245
4,271
4,366

6,681
6,717
6,763
6, 834
6,853
7,350

2,765
2,738
2,783
2,886
2,931
3,411

3,916
3,979
3,980
3,948
3,922
3,939

1954: January
February __
March
April
May
June

28, 724
28,140
27,833
28,095
28,372
28,666

21,836
21, 582
21,381
21,426
21,487
21, 717

10.158
10, 010
9,919
9,942
10, 002
10,168

5,697
5,588
5,443
5,413
5,370
5,367

,623
,614
,617
,634
,635

4,346
4,361
4,405
4,454
4,481
4,547

6,888
6,558
6,452
6,669
6,885
6,949

3,002
2,682
2,564
2,723
2,786
2,819

3,886
3,876
3,888
3,946
4,099
4,130

July
August
SeptemberOctober
November-.
December 8.

28,725
28,736
28,856
28,975
29,209
30,200

21,849
21,901
21,935
21,952
22, 014
22,500

10,298
10,349
10,365
10,340
10, 296
10,400

5,328
5,294
5,287
5,324
5,398
5,700

,637
,642
,642
,637
,631
,600

4,586
4,616
4,641
4,651
4,689
4,800

6,876
6,835
6,921
7,023
7,195
7,700

2,773
2,734
2,807
2,892
3,042
3,500

4,103
4,101
4,114
4,131
4,153
4,200

___

1935
19361937
1938.
1939

_-

1
Includes all consumer credit extended for the purpose of purchasing automobiles and other consumer
goods and secured by the items purchased.
8
Includes only such loans held by financial institutions; those held by retail outlets are included in
"other consumer goods paper."
8
Single-payment loans and service credit.
4
Not available.
8
Preliminary estimates by Council of Economic Advisers.

Source: Board of Governors of the Federal Reserve System (except as noted).




179

TABLE D-40.—Instalment credit extended and repaid, 1940-54
[Millions of dollars]

Automobile
paper

Total

Other consumer
goods paper

Repair and
modernization
loans

Personal loans

Period
Extended Repaid
8,219
9,425
5,239
4,587
4,894

19401941194219431944-

7,208
8,854
8,158
5,617
4,854

ExExExEx- Repaid
tended Repaid tended Repaid tended Repaid
tended
2,512
3,436
2,738
1,149

2,588
2,929
2,176
1,985
1,957

2,381
2,827
2,910
2,361
1,985

312
142
102
124

255
307
263
227
135

2,217
2,361
1,899
1,738
1,883

2,060
2,284
2,247
1,880
1,846

5,280
7,182

941
1,443
2,749
4,150
5,537

2,024
3,077
4,498
5,280
5,533

1,999
2,603
3,645
4,581
4,889

423
704
702
721

143
200
391
577
677

2,150
3,026
3,819
4,278
4,566

2,010
2,539
3,405
3,959
4,351

3,823
1,022
762
930
999

19451946194719481949-

5,379
5,093
8,495
6,785
12, 713 10,190
15,540 13,267
18,002 15,454

1950
1951
1952
1953
1954 i

21,256
22, 791
28.397
30,321
29,200

18,282
8,928
9,362
22,444
24.550 12,306
26, 818 13,621
28,900 12,500

7,285
9,462
10,449
11,379
12,500

6,458
6,518
7,959
8,014
7,700

5,607
6.585
6,901
7,511
7,800

826
853
1,243
1,387
1,200

707
769
927
1,144
1,300

5,044
6,058
7,299
7,800

4,683
5,628
6,273
6,784
7,400

1953: First half
Second half-.

15,161
15,160

13,100
13, 718

7,064
6,557

5,475
5,904

3,851
4,163

3,759
3,752

649
738

555
589

3,597
3,702

3,311
3,473

1954: First half
Second half *.

13,783 14, 253
15, 500 14, 700

5,938
6,600

6,111
6,400

3,503
4,200

3,967
3,800

602
600

616
700

3,740
4,100

3,559
3,800

619
590
653
"- 653
610
634

95
81
111
111
119
132

79
99
90
89
100

562
528
672
596
596
643

523
522
599
548
550
569

606
634
656
609
639

131
127
125
134
118
103

101
102
92
103
92
99

640
583
569
581
583
746

587
554
547
577
557
651
574
534

2,304
2,173
2,742
2,634
2,609
2,699

2,116
2,028
2,312
2,237
2,145
2,262

1,050
1,043
1,280
1,258
1,215
1,218

876
837
961
946
896
959

597
521
679
669
679
706

July
August
September. _
October
November. _
December „ .

2,652
2,477
2,440
2,540
2,355
2,696

2,240
2,224
2,269
2,355
2,214
2,416

1,236
1,135
1,103
1,132
987
964

944
962
996
1,019
956
1,027

645
632
643
693
667

1954: January
February. __
March
April
May
June
__.

1,947
1,956
2,380
2,400
2,397
2,703

2,298
2,210
2,581^
2,355
2,336
2,473

780
809
1,020
1,038
1,047
1,244

963
957
1,111
1,015
987
1,078

538
510
574
615
607
659

672
619
719
645
650
662

75
'.88
104
105
121
, 109

100
113
102
104
108

554
549
682
642
622
691

595
625

July..
August
September..
October
November. _
December l .

2,549
2,477
2,441
2,454
2,534
3,000

2,417
2,425
2,407
2,437
2,472
2,500

1,163
1,114
1,062
1,031
1,022
1,200

1,033
1,063
1,046
1,056
1,066
1,100

622
607
629
687
714
900

661
641
636
650
640
600

107
112
115
106
108
100

105
107
115
111
114
100

657
644
635
630
690
800

618
614
610
620
0*2
700

1953: January
February
March
April
May
June

1

Preliminary; December by Council of Economic Advisers.

NOTE.—Detail for preliminary estimates will not necessarily add to totals because of rounding.
Source: Board of Governors of the Federal Reserve System (except as noted).




180

TABLE D-41.—Mortgage debt outstanding, by type of property mortgaged, 7939-54
[BUliona of dollars]
Nonfarm properties
All
properties

End of period

Total

1- to 4-family
houses

Multifamily
and
commercial
properties *

Farm
properties

1939

85.5

28.9

16.3

12.5

6.6

1940
1941
1942
1943
1944

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
91.1
101.0
112.8

66.7
75.6
84.0
93.3
104.6

45.1
51.9
58.7
66.3
75.0

21.6
23.7
25.3
27.1
29.6

6.1
6.6
7.2
7.7
8.2

93.4
96.2
98.7
101.0

86.0
88.7
91.2
93.3

60.4
62.5
64.6
66.3

25.7
26.1
26.6
27.1

7.3
7.5
7.6
7.7

103.1
106.2
109.8
112.8

95.3
98.2
101.6
104.6

67.7
70.0
72.6
75.0

27.5
28.3
29.0
29.6

7.8
8.0
8.1
8.2

.

. .

1945
1946
1947
1948
1949
1950
1951
1952
1953
1954

- -

1953: First quarter
Second quarter
Third quarter
Fourth quarter
1954: First quarter
Second quarter. __
Third quarter. _
Fourth quarter

_
_

i Derived figures which include negligible amount of farm loans held by savings and loan associations.
NOTE.—Data for first 3 quarters of 1953 and all data for 1954 are estimates.
Source: Board of Governors of the Federal Reserve System, compiled from data supplied by various
Government and private organizations.




181

TABLE D-42.—Deposits and currency, 1929-54
[Millions of dollars]

End of period 1

Total
deposits
and
currency

Demand deposits adjusted
and currency 3

Total

U.S.
GovTime
deposits ernadCur- Demand
ment
rency deposits justed2 * deoutside adjusted *
posits «
banks

1929....

54,742

26,366

3,557

22,809

28,189

187

1930
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

22,115
25,483
23,959
25,986
29,793

24,241
25,361
26,218
26,305
27,059

1,453
1,235
966
1,812
1,480

1940
1941
1942
1943..
1944

71,129
79, 098
100, 500
123,391
151,428

42,270
7,325
48, 607 9,615
62, 868 13,946
79, 640 18,837
90,435 23, 505

34,945
38,992
48,922
60 803
66,930

1,121
2,762
9,201
11,003
21,203

1945
1946
1947
1948
1949

176,378
167, 500
172,330
172,693
173,851

102,341
110,044
113,597
111,599
111,165

26.490
26, 730
26,476
26,079
25,415

27,738
27, 729
28. 431
32, 748
39, 790
75,851 48,452
83,314 53, 960
87,121 56,411
85, 520 57, 520
85, 750 58,616

1950
1951
1952....
1953
1954 •

180, 574
189,861
200. 449
205, 720
215,200

117,670
124, 549
129, 002
130, 542
134,600

25,398
26,315
27,494
28. 091
28,000

92,272
98,234
101,508
102. 451
106,600

59,247
61,450
65, 799
70,375
75,600

3,657
3,862
5,648
4,803
5,100

1953: January
February...
March
April
May
June

127.300
125. 200
124.300
125, 0G0
124, 500
124, 267

26.800
26, 900
26, 900
27. 000
27, 000
27,369

5,000
5,800
5,800
3,200
3,300
4,074

124,600
124,800
125, 200
127, 700
128,100
130, 542

27, 200
27,300
27, 500
27,400
27, 900
28,091

100, 500
98,300
97, 400
98, 000
97, 500
96,898
97,400
97, 500
97, 700
100. 300
100, 200
102,451

66,100
66, 400
66.800
67, 200
67. 600
68, 293

July
August
SeptemberOctober
November..
December. _

198, 300
197,400
196,800
195. 400
195, 400
196, 634
201,300
201,100
201,100
201, 700
203, 600
205, 720

68,400
68, 700
69,100
69.600
69,300
70,375

8,300
7,700
6,800
4,400
6,200
4,803

1954: January
February...
March
April
May
__
June.

203,500
202,400
201, 300
202,300
203,600
205, 287

129,200
126, 500
123, 600
125,300
125, 500
125, 225

26,900
26, 900
26, 900
26, 700
26,800
27, 093

102,300
99, 600
96, 700
98,600
98, 700
98,132

70,600
71,000
71, 700
72,000
72, 500
73,292

3,700
5,000
6,100
5,000
5,600
6,770

J u l y ' 7 _.
August T
September .
October 7___.
7
November6 .
December .

204,800
206.300
207. 700
211,400
213, 500
215,200

126,800
126.300
128,100
130, 000
131, 700
134,600

26.800
26, 900
26, 900
26, 900
27, 500
28,000

100, 000
99, 400
101, 200
103,100
104, 200
106,600

73, 700
74,000
74,400
74, 700
74,300
75,600

4,400
6,000
5,200
6,600
7,500
5,100

_

25,585
3,496
2, 322
3,574
4,070

1
June, December, and end-of-year figures are for call dates. Other data are for the last Wednesday of
the month.
2
Includes deposits and currency held by State and local governments.
8
Includes demand deposits, other than interbank and U. S. Government, less cash items in process of
collection.
* Includes deposits in commercial banks, mutual savings banks, and Postal Savings System, but excludes
interbank deposits.
1
Includes U.S. Government deposits at Federal Reserve Banks and commercial and savings banks and,
beginning with 1938, includes CJ. S. Treasurer's time deposits, open account.
• Preliminary estimates by Council of Economic Advisers.
1
Preliminary.

NOTE.—Detail will not necessarily add to totals because of rounding.
Source: Board of Governors of the Federal Reserve System (except as noted).




TABLE D-43.—Loans and investments of all commercial banks, 1929-54
[Billions of dollars]

End of period *

Loans

Total
loans
and

investments

Total 2

Investments

Commercial
and industrial loans 8

Total

U. S. Government
obligations

Other
securities

1929—June *

49.4

35.7

13.7

4.9

8.7

1930—June 4
*
1931—June4

48.9
44.9
36.1
30.4
32.7

34.5
29.2
21.8
16.3
15.7

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

36.1
39.6
38.4
38.7
40.7

15.2
16.4
17 2
16.4
17.2

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

43.9
50.7
67.4
85.1
105.5

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

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

-

126.7
132.6
141.6
145.7
155.9

52.2
57.7
64.2
67.6
70.2

21.9
25.9
27.9
27.2
26.7

74.4
74.9
77.5
78.1
85.7

62.0
61.5
63.3
63.4
69.4

12.4
13.3
14.1
14.7
16.3

1953: January
February. __
March
April
May
June

140.8
140.1
140.0
138.5
138.1
138.0

63.9
64.1
65.2
65.3
65.4
65.0

27.5
27.4
27.9
27.8
27.6
27.4

76.9
76.0
74.8
73.2
72.7
72.9

62.8
61.9
60.5
58.9
58.3
58.6

14.2
14.1
14.3
14.4
14.4
14.3

July.
August
September..
October
November. _
December..

143.2
143.1
143.0
144.0
145.5
145.7

65.6
66.0
66.3
67.1
67.3
67.6

27.5
27.7
27.9
27.9
27.8
27.2

77.6
77.1
76.7
76.9
78.3
78.1

63.2
62.6
62.2
62.3
63.7
63.4

14.3
14.5
14.5
14.5
14.6
14.7

145.3
144.9
142.8
144.1
145.7
146.4

66.5
66.9
67.1
66.8
67.1
67.3

26.6
26.4
26.7
26.2
26.0
26.1

78.9
78.0
75.7
77.4
78.6
79.0

64.2
63.0
60.7
62.1
63.3
63.5

14.7
15.0
15.1
15.2
15.3
15.5

147.3
149.5
150.6
154.1
156.1
155.9

67.3
66.5
67.3
67.8
69.7
70.2

25.8
25.8
26.1
26.1
26.5
26.7

80.0
83.0
83.3
86.3
86.4
85.7

64.3
67.3
67.3
70.2
70.3
69.4

15.7
15.7
16.0
16.1
16.2
16.3

1932—June
1933—June*
1934—June *
1935
1936
1937
1938
1939
1940
1941.
1942
1943
1944
1945
1946
1947
1948
1949
1950
1951
1952
1953
1954 •

—

—

-

1954: January
February
March
April
May
June.
July 7.
August T
September 7.
October 7 -._
November 7 .
December 6 .

i J u n e , December, and end-of-year figures are for call dates. Other data are for the last Wednesday of
the month.
2 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
on 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.
6
Preliminary estimates by Council of Economic Advisers.
7
Preliminary.
NOTE.-—Detail will not necessarily add to totals because of rounding.
Source: Board of Governors of the Federal Reserve System (except as noted).




183

TABLE D-44.—Member bank reserves and Reserve Bank credit, 1929—54
[Averages of daily figures, millions of dollars]
Reserve Bank credit outstanding
Period
Total

U.S.
Government securities

Discounts
and advances

Member bank reserve balances

All
other,
mainly
float

Total

Required 1

Excess *

1929

1,459

208

952

300

2,358

2,315

1930
1931
1932
1933
1934

1,087
1,274
2,077
2,429
2,502

564
669
1,461
2,052
2,432

272
327
521
283

251
278
95
94
35

2,379
2,323
2,114
2,343
3,676

2,324
2,234
1,858
2 1,815
> 2,112

55
89
256
2 528
2 1, 564

2,475
2,481
2,554
2,600
2,628

2,431
2,431
2,504
2,565
2,584

14

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

19,062
24,070
24,801
26, 262
25,602

18, 410
22,756
23,066
24,661
24, 646

129
293
801
777
217

522
1,021
935
824
739

16,400
19,293
20,356
19,996
19,276

15,617
18, 536
19,642
19,319
318,502

783
757
714
677
»774

26,080
26,025
25,892
25,682
25,960

24,202
23,918
23,892
23,861
23,973
24, 748

1,372
1,336
1,220
1,184
955
433

1,012
826
913
847
754
779

20,958
20,520
20,416
20,007
19,897
20,287

20,251
19,882
19,828
19,472
19,306
19,499

707
638
588
535
591
788

1935
1936
1937
1938
1939

-

1940
1941
1942
1943
1944

---

1945
1946
1947
1948
1949—
1950
1951
1952
1953
1954

-

1953: January...
February _.
March
April
May
June
July.
August
September
October.. .
November.
December.
1954: January.. .
February..
March
April
May
June

26,123
26,322
26,410
26, 514
26,413
27,107

24,955
25,000
25,168
25,344
25,172
25,639

428
658
468
367
494
448

740
663
774
802
747
1,021

19,653
19, 526
19, 552
19,536
19, 718
19,920

18,882
18,834
18, 784
19,035
19,227

784
644
718
752
683
693

26,243
25, 746
25,553
25,483
25, 503
25,876

25,263
24,770
24,633
24,635
24,689
24,998

118
308
205
151
172
166

863
669
714
697
641
711

20,179
19,557
19, 573
19,392
19, 533
19,670

19,243
18,925
18,881
18,627
18,817
18,813

632
692
765
716
857

July
August
September.
October
November.
December.

25,571
24,855
24,838
25,459
25,776
26,317

24, 771
23,989
23,941
24,485
24,661
24,917

104
210
170
254
345
407

655
726
721
770
993

19,164
18,478
18,403
18,893
19,207
19,279

18,329
17,638
17,628
18,173
18,393
»18,568

835
840
775
720
814
«711

* Estimates.
Data on required and excess reserves from March 1933 through April 1934 for licensed banks only.
• Preliminary.
NOTE.—Detail will not necessarily add to totals because of rounding.
Source: Board of Governors of the Federal Reserve System.
2




184

T A B L E D - 4 5 . — U . S. Government debt—volume and kind of obligations, 1929-54
[Billions of dollars]
Interest-bearing public debt

End of period

Gross
public Marketable public
issues
debt and
guaranteed
issues 1
Short- Treasury
term
bonds
issues2

Nonmarketable public issues
United
States
savings
bonds

Treasury
tax and
savings
notes

Special
Investment
bonds 3

16.3

3.3

11.3

0.6

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

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

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

1945.
19461947
1948
1949-

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
278.8

58.3
65.6
68.7
77.3
76.0

94.0
76.9
79.8
77.2
81.8

58.0
57.6
57.9
57.7
57.7

8.6
7.5
5.8
6.0
4.5

1.0
13.0
13.4
12.9
12.7

33.7
35.9
39.2
41.2
42.6

1953: J a n u a r y February..
March
April
May
June

267.5
267.6
264.5
264.6
266.1

68.7
68.0
65.5
65.6
66.3
66.0

79.8
80.4
80.4
80.4
81.9
81.2

58.1
58.3
58.4
58.4
57.9
57.9

5.7
5.6
4.9
4.8
4.8
4.5

13.4
13.4
13.4
13.3
13.3
13.3

39.1
39.3
39.4
39.5
39.7
40.5

July
August
September,
October. _November.
December.
1954: January-_.
FebruaryMarch
April
May
June

272.7
273.3
273.0
273.5
275.3
275.2

72.4
72.4
79.5
79.6
79.1
77.3

81.2
81.2
73.2
73.2
75.5
77.2

57.9
57.9
57.8
57.8
57.8
57.7

4.7
5.0
5.6
6.3
6.2
6.0

13.2
13.2
13.1
12.9
12.9
12.9

40.6
41.0
41.0
40.9
41.0
41.2

274.9
274.9
270.3
271.1
273.6
271.3

77.3
71.7
67.2
68.2
72.5

77.2
82.7
82.8
82.8
80.7
80.4

57.7
57.8
57.9
58.0
58.0
58.1

6.0
5.9
5.6
5.5
5.3
5.1

12.9
12.9
12.8
12.8
12.8
12.8

41.0
41.1
41.0
41.0
41.4
42.2

July
August
September
October. —
November.
December-

271.0
275.0
274.8
278.8
278.9
278.8

80.4
84.2
84.2
84.2
84.2
81.8

58.0
58.1
58.1
58.1
58.2
57.7

5.0
4.9
4.8
4.8
4.7
4.5

12.8
12.8
12.7
12.7
12.7
12.7

42.2
42.5
42.4
42.2
42.4
42.6

1929._._
1930
1931
1932
1933_
1934
1935
1936
1937
1938
1939

19501951
1952.
1953
1954-

_

_
_.

—

69.7
73.9
73.9
76.0

.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.
3 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 billion dollars of public
marketable and nonmarketable issues on December 31,1954.
Source: Treasury Department.




185

TABLE D-46.—Estimated ownership of Federal obligations, 1939-54
[Par values 1 , billions of dollars]
Gross public debt and guaranteed issues *

End of period

Held
by U.S.
GovernTotal ment
Federal CominvestTotal Reserve mercial
ment
Banks banks 3
accounts

Held by others
Mutual
State
Miscelbanks Other
and
and in- corpor- local Indivi- laneous
6
invessurance ations * govern- duals
tors 7
comments '
panies

1939

47.6

6.5

41.1

2.5

15.9

9.4

2.2

0.4

10.1

0.7

1940
1941
1942
1943
1944

50.9
64.3
112.5
170.1
232.1

7.6
9.5
12.2
16.9
21.7

43.3
54.7
100.2
153.2
210.5

2.2
2.3
6.2
11.5
18.8

17.3
21.4
41.1
59.9
77.7

10.1
11.9
15.8
21.2
28.0

2.0
4.0
10.1
16.4
21.4

.5
.7
1.0
2.1
4.3

10.6
13.6
23.7
37.6
53.3

.7
.9
2.3
4.4
7.0

1945
1946
1947
1948
1949

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
215.5
217.8

24.3
23.3
22.6
23.3
18.9

90.8
74.5
68.7
62.5
66.8

34.7
36.7
35.9
32.7
31.5

22.0
15.3
14.1
14.8
16.8

6.5
6.3
7.3
7.9
8.1

64.3
64.2
65.7
65.5
66.3

9.1
8.1
8.4
8.9
9.4

1950
1951
1952
1953
1954 8

256.7
259.5
267.4
275.2
278.8

39.2
42.3
45.9
48.3
49.6

217.5
217.2
221.6
226.9
229.2

20.8
23.8
24.7
25.9
24.9

61.8
61.6
63.4
63.7
69.5

29.6
26.3
25.5
25.0
23.7

19.7
20.7
20.4
21.5
19.3

11.1
12.9
14.6

66.3
64.6
64.6
65.0
63.7

10.5
10.6
11.7
12.9
13.5

1953: January
February,-.
March
April
May
June

267.5
267.6
264.5
264.6
266.6
266.1

46.0
46.2
46.3
46.3
46.8
47.6

221.5
221.5
218.3
218.3
219.8
218.6

23.9
23.9
23.8
23.9
24.2
24.7

62.8
61.9
59.5
59.1
58.6
58.8

25.7
25.7
25.6
25.5
25.6
25.5

20.8
21.2
20.2
20.0
21.0
18.9

11.2
11.3
11.4
11.5
11.9
12.0

64.7
65.0
65.2
65.3
65.7
65.8

12.3
12.5
12.5
13.0
12.8
12.8

July
August
September.
October
November..
December..

272.7
273.3
273.0
273.5
275.3
275.2

47.6" T 225.1
48.0' 1225.3
225.0
48.0
225.5
48.0
227.1
48.2
226.9
48.3

25.0
25.1
25.2
25.3
25.1
25.9

[63.5
[62.7
62.6
62.8
63.9
63.7

25.5
25.5
25.4
25.2
25.2
25.0

20.2
20.9
20.6
21.0
21.7
21.5

12.3
12.5
12.7
12.7
12.8
12.9

65.5
65.2
65.2
65.0
65.0
65.0

13.2
13.4
13.3
13.5
13.5
12.9

1954: January
February...
March
April.
May
June

274.9
274.9
270.3
271.1
273.6
271.3

48.3
48.3
48.2
48.2
48.5
49.3

226.7
226.6
222.1
222.9
225.0
222.0

24.6
24.5
24.6
24.6
24.8
25.0

64.1
63.1
60.9
62.5
63.4
63.6

25.0
25.0
24.8
24.7
24.6
24.3

21.5
22.1
19.7
19.1
19.5
16.8

13.2
13.3
13.6
13.8
14.1
14.3

64.9
65.0
65.1
64.7
65.0
64.5

13.3
13.6
13.5
13.5
13.5
13.4

July
August
September.
October
November 9 .
December 8 -

271.0
275.0
274.8
278.8
278.9
278.8

49.2
49.5
49.4
49.3
49.4
49.6

221.8
225.5
225.4
229.5
229.5
229.2

24.3
24.0
24.3
24.4
24.9
24.9

64.8
67.0
67.1
70.0
69.6
69.5

24.1
24.1
24.0
24.0
23.8
23.7

16.8
18.5
18.6
19.1
19.4
19.3

14.3
14.4
14.4
14.5
14.5
14.6

64.1
64.0
63.7
63.8
63.7
63.7

13.4
13.3
13.4
13.7
13.6
13.5

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 commercial banks, trust companies, and stock savings banks in the United States and in
Territories and possessions;figuresexclude securities held in trust departments.
< Exclusive of banks and insurance companies.
* Includes trust, sinking, and investment funds of State and local governments and their agencies, and
of 9Territories and possessions.
Includes partnerships and personal trust accounts.
7
Includes 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.
8
Preliminary estimates by Council of Economic Advisers.
• Preliminary.
NOTE.—Detail will not necessarily add to totals because of rounding.
Source: Treasury Department (except as noted).




186

TABLE D-47.—Bond yields and interest rates, 1929-54
[Percent per annum]
Corporate
bonds
(Moody's)

U. S. Government securities
Period

Number of issues
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
_
1954
1953: January -„

Long-term
3-month 9-12 taxable bonds 3
Treas- month
2
ury
Old
New
bills i issues series * series«
3-7

1

Aaa

30

Baa

30

Highgrade
municipal
bonds
(Standard &
Poor's)

Average
rate on
shortterm
bank
loans
to businessselected
cities

Prime
commercial
paper,
4-6
months

federal
leserve
Bank
discount
rate

15

4.73
5.90
5.85
4.27
5.16
(•)
5.90
4.55
4.07
3.59
3.04
(3)
(6)
(7)
(s)
(8)
4.58
1.402
7.62
4.01
2.64
2.11
5.01
9.30
.879
4.65
2.73
(3)
2.82
7
(8)
.515
4.49
7.76
1.73
2.56
4.71
(3)
(s)
4.00
.256
6.32
4.03
1.54
1.02
3.60
5.75
3.41
1.50
.137
.76
(7)
(5)
(8)
.143
3.24
1.50
3.07
4.77
.75
3.26
5.03
3.10
.94
1.33
.447
3.19
5.80
.053
2.91
.81
1.00
3.01
.023
4.96
2.76
2.1
.59
1.00
2.84
2.50
2.1
.56
1.00
.014
4.75
2.0
.54
.103
2.77
4.33
2.10
1.00
(7)
(5)
9
2.46
2.83
.326
2.36
.66
1.00
4.28
2.2
2.47
2.73
2.6
3.91
2.06
.69
•1.00
.373
.75
2.4
2.48
2.72
3.61
1.86
.73
•1.00
.375
.79
2.37
2.62
2.2
•1.00
.81
3.29
.75
.375
1.67
2.53
2.1
2.19
.81
•1.00
3.05
1.64
.375
.82
2.61
2.1
1.03
2.25
2.01
1.00
3.24
.594
.88
2.82
1.34
1.040
1.14
2.44
2.40
2.5
1.44
3.47
2.66
2.31
1.50
1.14
3.42
2.21
1.49
1.102
2.7
2.62
2.7
1.59
1.26
2.32
3.24
1.98
1.218
1.45
2.86
3.1
1.73
2.57
1.75
3.41
2.00
2.16
1.552
2.96
3.5
1.81
2.68
2.33
1.75
3.52
2.19
1.766
3.20
3.7
2.07
2.93
2.52
1.99
3.16
3.74
2.72
1.931
2.90
3.6
.92
2.53
1.58
1.60
3.51
2.37
.953
2.70
3.02
1.88
2.80
3.51
2.47
1.97
2.31
2.042
February . 2.018
3.07
2.00
2.83
3.53
2.54
1.97
2.31
March
3.12
2.00
2.89
3.57
2.61
2.04
2.36
2.082
3.54
April
3.23
2.00
2.97
3.65
2.63
2.27
2.44
2.177
3.34
2.00
3.09
2.73
2.41
2.67
2 200
3.78
May.
3.26
3.40
3.86
2.99
2.75
2.00
2.231
2.46
3.09
3.29
3.73
June
July . . . . 2.101
3.28
2.99
2.36
2.75
2.99
3.25
3.86
2.00
3.24
3.22
August
2.33
3.85
2.88
2.75
2.00
2.088
3.00
3.29
September. 1.876
2.17
2.97
3.19
3.88
2.88
2.74
2.00
3.74
October. __ 1.402
3.16
2.72
1.72
3.82
3.06
2.55
2.83
2.00
November. 1.427
1.53
2.85
3.04
3.11
3.75
2.62
2.31
2.00
December. 1.630
1.61
2.79
2.96
3.13
3.74
3.76
2.59
2.25
2.00
2.11
1954:January.__ 1.214
1.33
2.90
3.06
2.68
3.71
2.50
2.00
2.85
.984
2.95
3.61
2.39
2.00
2.60
1.01
1.79
February2.38
1.75
2.73
2.86
3.51
2.51
3.72
2.00
March
1.053
1.02
April
2.47
2.85
3.47
2.47
2.70
1.63
.90
1.76
1.011
May
.782
2.72
3.47
2.49
1.50
.76
2.52
1.58
2.88
June
3.49
1.50
.76
2.54
2.70
3.60
2.48
1.56
.650
2.90
July
1.45
2.62
2.89
2.31
1.50
.65
3.50
.710
2.47
1.50
.892
3.49
1.33
.64
2.60
2.87
2.23
2.48
August
September. 1.007
2.51
1.31
1.50
2.64
2.89
3.47
2.29
.89
3.56
Octobers2.32
1.50
2.87
3.46
1.31
.987
1.03
2.52
2.65
November
2.29
1.50
2.89
3.45
.94
1.31
2.68
.948
2.55
December. 1.174
3.45
3.55
2.33
1.50
2.57
2.68
2.90
1.31
1.10
1
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: Prior to April 1952, due or callable after 15 years; beginning in April 1952, bondsfirst callable after 12 years.
• 3}£-percent bonds of 1978-83, first issued May 1,1953.
• Treasury bills were first issued in December 1929 and were issued irregularly hi 1930.
7
Not available before August 1942.
• 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 hi 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).




0
()

§
8
(3)

8
8
8

187

TABLE D—48.—Government cash receipts from and payments to the public, calendar years, 1946-54
Billions of dollars]
Total

Calendar year

Cash
re-

ceipts

1946
1947
1948
1949.
19501951
1952
1953
1954*--.

.

.

Cash

State and locall

Federal
Excess
of receipts

pay-

Cash
re-

ments or pay- ceipts
ments

Cash

Excess
of receipts

Cash

re-

pay-

Cash

pay-

2
ments or pay- ceipts2 ments

ments

Excess
of receipts
(4")
or pay-

ments

53.0
57.5
60.0
57.9

50.9
50.8
52.1
60.0

2.1
6.6
7.9
-2.1

41.4
44.3
44.9
41.3

41.4
38.6
36.9
42.6

5.7
8.0
-1.3

11.6
13.2
15.1
16.6

9.5
12.2
15.2
17.4

2.0
1.0
—.1
-.8

60.6
79.2
93.0
93.4
93.2

61.3
78.4
94.6
99.3
95.1

-.7
.8
-1.6
-6.0
-1.9

42.4
59.3
71.3
70.0
68.6

42.0
58.0
73.0
76.2
69.6

.4
1.2
-1.6
—6.2
-1.1

18.1
19.9
21.7
23.3
24.7

19.3
20.3
21.6
23 1
25.5

-1.2
—.4

(3)

(3)

.2
-.8

1 Estimated by Council of Economic Advisers on the basis of incomplete data.
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.
* Preliminary.
NOTE.—Detail will not necessarily add to totals because of rounding.
Sources: Treasury Department and Bureau of the Budget (except as noted).




188

CORPORATE PROFITS AND FINANCE
TABLE D-49.—Profits before and after taxes, all private corporations, 1929-54
[Billions of dollars]
Corporate profits after taxes
Corporate
profits
before
taxes

Corporate
tax
liability *

1929.

9.6

1.4

8.3

5.8

2.4

1930.
1931.
1932.
1933.
1934.

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

1935.
1936.
1937.
1938.
1939.

3.1
5.7
6.2
3.3
6.4

1.0
1.4
1.5
1.0
1.4

2.2
4.3
4.7
2.3
5.0

2.9
4.5
4.7
3.2
3.8

-.7
-.2

1940.
1941.
1942.
19431944.

9.3
17.0
20.9
24.6
23.3

2.8
7.6
11.4
14.1
12.9

6.5
9.4
9.5
10.5
10.4

4.0
4.5
4.3
4.5
4.7

2.4
4.9
5.2
6.0
5.7

19451946.
1947.
1948.
1949.

19.0
22.6
29.5
32.8
26.2

10.7
9.1
11.3
12.5
10.4

8.3
13.4
18.2
20.3
15.8

4.7
5.8
6.5
7.2
7.5

3.6
7.7
11.7
13.0
8.3

195019511952 _
19531954 »

40.0
41.2
37.2
39.4
35.0

17.8
22.5
20.0
21.1
17.2

22.1
18.7
17.2
18.3
17.8

9.2
9.1
9.1
9.4
9.9

12.9
9.6
8.1
8.9
8.0

Period

Dividend
payments

Total

Undistributed
profits

1.2

Seasonally adjusted annual rates
10.4
7.5

1953: First half
Second half
1954: First half
Second half»

42.2
36.7

22.6
19.6

19.6
17.0

34.5
35.6

17.0
17.5

17.5
18.1

10.1

7.9
8.0

1953: First quarter
Second quarter..
Third quarter...
Fourth quarter.

42.4
41.9
40.9
32.5

22.7
22.5
21.9
17.4

19.7
19.5
19.0
15.1

9.1
9.3
9.5
9.6

10.6
10.2
9.5
5.5

1954: First quarter....
Second quarterThird quarter...
Fourth quarter*.

34.5
34.5
34.2
37.0

17.0
17.0
16.8
18.2

17.5
17.5
17.4
18.8

10.4

7.9
7.9
7.6
8.4

i Federal and State corporate income and excess profits taxes.
a 48 million dollars.
* Preliminary; fourth quarter by Council of Economic Advisers.
NOTE.—No allowance has been made for inventory valuation adjustment.
profits before taxes and inventory valuation adjustment.
Detail will not necessarily add to totals because of rounding.
Source: Department of Commerce (except as noted).




189

9.2

See appendix table D-8 for

TABLE D-50.—Relation of profits after taxes to stockholders' equity and to sales, private manufacturing corporations, by industry group, 7947—50 average and 1953-54

Industry group

1947-50
average

1953
Year

1954

First Second Third Fourth First Second Third
quarter quarter quarter quarter quarter quarter quarter

Ratio of profits after Federal taxes (annual rate) to stockholders' equityAll private manufacturing corporations.
Food
_.
Tobacco manufactures
Textile-mill products
Apparel and finished textiles
_—
Lumber and wood products.
Furniture and fixtures
Paper and allied products. _.
Printing and publishing
(except newspapers)
Chemicals and allied products
Petroleum refining
_.
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)..
See footnotes at end of table.




14.8

10.4

10.7

11.2

10.5

9.5

9.4

10.4

9.3

13.6
12.1
14.5

8.1
9.2
4.6

7.0
7.7
6.0

8.2
9.5
5.3

10.2
10.5
5.0

7.1
9.6
2.1

6.4
9.0
2.1

8.6
10.0
1.0

9.2
11.4
1.9

12.0
17.1

5.3
7.2

7.6
7.0

6.7
9.8

4.9
7.6

1.0
3.9

3.7
2.3

3.8
6.7

4.9
6.9

14.3
16.2

8.4
9.9

11.2
10.6

10.4
10.2

7.1
10.2

4.4
9.2

3.2
9.7

5.2
10.3

6.4
9.5

13.4

9.4

11.4

10.8

8.9

6.8

10.5

10.0

7.9

15.9
115.1

10.7
13.0

11.4
12.3

11.6
12.9

10.3
13.3

9.7
15.0

11.2
12.8

11.8
12.0

11.0
11.4

(2)
12.8

8.3
11.2

6.7
11.5

11.2
12.1

9.8
11.5

4.9
10.1

3.8
10.3

6.8
10.9

9.5
9.5

10.4

6.1

6.5

8.0

6.2

3.1

4.0

5.4

7.6

15.2

11.5

9.3

14.9

13.8

9.1

7.6

14.6

15.4

12.5

10.9

12.4

11.9

9.9

10.2

9.2

11.0

9.5

12.9
15.3

10.5
9.9

10.9
9.4

11.4
11.0

11.0
10.9

9.4
8.1

7.6
6.6

8.3
9.0

6.5
8.6

14.5
17.8

9.7
12.9

11.3
15.1

11.7
12.8

8.7
12.1

7.6
12.4

9.5
12.9

10.2
11.8

7.8
10.5

6.6

13.3

12.8

15.4

12.2

14.1

15.5

18.4

15.6

21.7

13.7

15.2

15.0

12.8

12.6

15.3

17.4

9.7

14.6

11.0

11.7

11.7

10.7

11.6

10.7

11.4

12.9

11.4

8.3

8.3

9.0

9.1

6.3

5.0

6.5

9.1

TABLE D-50.—Relation of profits after taxes to stockholders' equity and to sales, private manufacturing corporations, by industry group, 7947—50 average and 1953-54—Continued

Industry group

1947-50
average

1954

1953
Year

First Second Third Fourth First Second Third
quarter quarter quarter quarter quarter quarter quarter

Profits after Federal taxes in cents per dollar of sales
All private manufacturing corporations..

6.7

4.3

4.3

4.4

4.3

4.0

4.3

4.7

4.4

Food _.
Tobacco manufactures
Textile-mill products
Apparel and finished textiles
Lumber and wood products.

3.6
4.8
6.6

2.0
3.7
2.2

1.8
3.2
2.7

2.1
3.7
2.5

2.5
3.9
2.5

1.8
3.7
1.1

1.7
4.0
1.1

2.2
4.1
0.6

2.3
4.5
1.0

3.1
9.2

1.2
3.5

1.7
3.5

1.6
4.6

1.1
3.7

02
2.1

0.9
1.4

0.9
3.5

1.1
3.7

Furniture and fixtures
Paper and allied products...
Printing and publishing (except newspapers) _
Chemicals and allied products
Petroleum refining...

5.0
8.6

2.6
5.4

3.3

3.2
5.4

2.4
5.4

1.4
4.9

1.2
5.6

1.9
5.9

2.3

5.0

3.4

3.9

3.3

2.3

3.9

3.8

9.1
Ul.O

6.1
10.4

6.3
9.6

6.3
10.2

6.0
10.3

5.7
11.6

6.6
10.3

6.8
10.2

6.7
10.0

4.8

3.8
3.8

3.3
3.8

4.6
3.9

4.3
3.9

2.5
3.6

2.4
4.0

3.4
4.1

4.5
3.7

3.4

2.5

1.9

1.0

1.4

1.8

2.4

8.5

8.7

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) „

5.7
4.2

5.4
3.0

1.8

2.0

8.9

6.5

5.4

8.0

7.3

5.2

5.1

8.8

6.3

7.1

6.1

5.8

6.3

6.1

6.8

6.2

7.2
6.6

5.3
3.6

5.2
3.6

5.2
4.0

5.4
3.8

5.3
3.0

4.7
2.8

5.2
3.7

4.6
3.4

7.1
6.3

4.2
4.1

4.8
4.6

4.6
4.0

3.9
4.0

3.5
3.9

4.6
4.6

4.9
4.3

4.2
4.0

3.4

2.6

2.6

2.8

2.4

2.7

3.4

3.9

3.7

7.4

3.9

4.1

3.9

3.7

4.1

5.2

5.9

4.1

7.9

4.6

4.8

4.7

4.5

4.6

4.8

5.1

6.1

5.3

2.9

3.1

3.2

3.3

2.0

2.0

2.6

3.4

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 Co mmission.
Sources: Federal Trade Commission and Securities and Exchange Commission.




TABLE D-51.—Relation of profits before and after taxes to stockholders' equity and to sales,
private manufacturing corporations, by asset size class, 1947—50 average and 7953-54
1954

1953

Asset size class
(thousands of dollars)

1947-50
average

First Second Third Fourth First Second Third
Year quarter quarter quarter quarter quarter quarter quarter

Ratio of profits before Federal taxes (annual rate) to stockholders' equity
All asset sizes
Under 250
250-999.

_..
_

1,000-4,999

5,000-99,999
100,000 and over

24.6

22.3

24.9

26.4

23.3

15.8

18.5

19.8

17.5

16.7
22.7
24.2
25.2
24.9

13.3
16.1
17.3
22.1
24.5

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

-2.8

3.3

6.0

11.1
12.8
17.2
21.7

12.8
15.3
13.7
18.4
22.4

13.7
15.5
13.0
16.8
19.1

10.3
15.9
18.7

Profits before Federal taxes in cents per dollar of sales
All asset sizes.
Under 250250-999.
1,000-4,999
5,000-99,999
100,000 and over

_.

11.1

9.2

10.0

10.4

9.6

6.7

8.4

8.9

8.2

4.4
7.4
9.0

2.8
4.3
5.9
9.1

3.0
4.9
7.0

4.7
5.7
6.8

-0.6

10.1
12.6

10.2
12.9

3.7
4.9
6.1
9.3

0.9
3.4
4.7
7.9

2.9
4.6
5.0
8.3

11.3

11.7

3.0
4.6
4.8
7.9
10.7

11.3
13.2

11.7

12.2

1.7
3.6
6.8
9.1

Ratio of profits after Federal taxes (annual rate) to stockholders' equity
All asset sizes.
Under 250
250-999
1,000-4,999

5,000-99,999
100,000 and over

14.8

10.4

10.7

11.2

10.5

9.5

9.4

10.4

9.3

9.8

7.3
7.3
7.5
9.5

7.0
7.9
8.9

13.2
10.3

11.0

-4.2

10.3
11.8

10.6
12.1

8.1
7.4
9.5

2.2
5.0
8.1

0.1
4.6
5.3
8.1

8.1
8.1
6.1
8.8

11.9

12.5

11.7

12.3

8.0
8.1
5.6
8.1
10.8

L3.1
14.1
14.9
15.3

11.8

8.8

Profits after Federal taxes in cents per dollar of sales
All asset sizes.
Under 250.
250-999...
1,000-4,999.
5,000-99,999.
100,000 and over

6.7

4.3

4.3

4.4

4.3

4.0

4.3

4.7

4.4

2.6
4.3
5.2
6.7
8.1

1.5
2.0
2.5
3.9
5.7

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

-0.9

0.0
1.4
1.9
3.7
6.1

1.8
2.4
2.2
4.0
6.4

1.8
2.4
2.1
3.8
6.1

0.6
1.7
3.5
6.1

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 Stales
Manufacturing Corporations by Federal Trade Commission and Securities and Exchange Commission.
Sources: Federal Trade Commission and Securities and Exchange Commission.




192

TABLE D-52.—Sources and uses of corporate funds, 1946-54l
[Billions of dollars]
Source or use of funds

1946

Uses:
Plant and equipment outlays
12.5
Inventories (change in book
value)
11.2
Change in customer net receivables3
1.1
Cash and U. S. Government
securities
-4.7
Other assets
.
-.6
Total uses
19.5
Sources:
Internal:
Betained profits and depletion allowances
. _
Depreciation and amortization allowances
Total internal sources
External:
Change in Federal income
tax liability
Other liabilities
Change in bank loans and
mortgage loans
Net new issues
Total external sources
Total sources
Discrepancy (uses less sources)

1949

1950

1951

1952

1953

18.8

16.3

16.9

21.6

22.4

24.1

22.5

4.2

—.3.6

9 8

9.4

1.8

2.6

—3.5

3.1

2.8

.9

5.0

2.0

2.4

.7

2.5

1.0

1.0
.2

3.2

4.5
.3

2.8
.6

.3
.8

1.2
.4

-1.5
.5

28.2

27.0

16.8

36.5

36.4

27.7

29.0

20.5

1947

1948

17.0
7.1

1954 3

7.2

11.4

12.4

7.6

12.4

9.1

7.5

8.3

7.0

4.2

5.2

6.2

7.1

7.8

9.0

10.1

11.2

12.5

11.4

16.6

18.6

14.7

20.2

18.1

17.6

19.5

19.5

-1.6
2.1

2.1
1.5

1.0
4

-2.2
.5

7.2
1.0

4.4
1.9

-2.6
2.0

.9
.8

-4.0
(*)

3.9
2.4

3.3
4.4

1.8
5.9

-2.3
4.9

2.6
3.7

5.4
6.3

3.1
7.9

.4
7.3

-1.0
6.5

6.8

11.3

9.1

.9

14.5

18.0

10.4

9.4

1.5

18.2

27.9

27.7

15.6

34.7

36.1

28.0

28.9

21.0

1.3

.3

-.7

1.2

1.8

.3

-.3

.1

-.5

1 Excludes banks and insurance companies.
Estimated to nearest half-billion dollars; by Council of Economic Advisers.
Receivables are net of payables which are therefore not shown separately.
* 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 financia
data (except as noted).
2
3




193

TABLE D-53.—Current assets and liabilities of all corporations, 1950-54

1

[Billions of dollars, end of period]
1953
Asset or liability

1950

1951

1952
March June

1954

September

December

March June

September

Current assets
Cash on hand and in banks. _
U. S. Government securities.Receivables from U. S. Government. 2
Other notes and accounts receivable
Inventories
Other current assets 3
Total current assets

28.1
19.7

30.0
20.7

30.6
20.4

28.0
20.2

29.6
18.9

30.0
20.6

30.7
21.5

27.8
19.7

28.9
16.8

30.1
18.6

1.1

2.7

2.8

29

2.7

2.7

2 6

2.8

2.4

23

55.7
55.1
1.7

58.8
64.9
2.1

64.7
65.4
2.4

65.1
66.9
2.4

65.5
67.2
2.4

66.9
68.3
2.4

65.0
67.5
2.4

63.2
67.3
2.5

63.4
65.5
2.6

65.2
65.1
2.7

161.5

179.1

186.2

185.6

186.2

191.0

189.7

183.3

179.6

183.9

Current liabilities
Advances and prepayments,
U. S. Government 2
Other notes and accounts
payable
_
Federal income tax liabilitiesOther current liabilities
Total current
ities
Net working capital

liabil-

.4

1.3

2.3

2.6

2.5

2.5

2.2

2.5

2.4

2.6

47.9
16.7
14.9

53.6
21.3
16.5

57.9
17.7
18.3

56.8
16.3
18.5

56.3
15.6
19.0

57.5
17.9
19.6

57.3
18.7
18.9

53.9
14.9
19.1

52.5
11.7
18.8

53.0
13.6
19.4

79.8

92.6

96.1

94.2

93.4

97.5

97.1

90.4

85.4

88.6

81.6

86.5

90.1

91.3

92.8

93.5

92.6

92.9

94.2

95.3

* All corporations in the United States, excluding banks and insurance companies. Data for 1950-51 are
based on Statistics of Income, covering virtually all corporations in the United States. Data for 1952-54 are
estimates based on data compiled from many different sources, including data on corporations registered
with the Commission. As more complete data become available, estimates are revised.
2 Receivables from and payables to U. S. Government do not include amounts offset against each other
on the corporation's books or amounts arising from subcontracting which are not directly due from or to the
U. S. Government. Wherever possible, adjustments have been made to include U. S. Government
advances offset against inventories on the corporation's books.
* Includes marketable securities other than U. S. Government.
NOTE.—Detail will not necessarily add to totals because of rounding.
Source: Securities and Exchange Commission.




194

TABLE D-54.—Business population and business failures, 1929-54
Operating businesses and
business turnover 1

Period

Business failures, by size of liabilities >

New
busiAmount of current
Disness
Number of failures *
liabilities *
Operat- New con- Busi- incortinporaing
busi- ued trans- tions*
businesses* busi- fers*
Under $100,000 Total Under $100,000
Total $100,000 and
and
ness$100,000 over
over
es*
Number of firms

Thousands of firms

(')

C
O

1929-.

3,029.0

1930..
1931..
1932.
1933..
1934.

2,993.7
2,916.4
2,828.1
2,782.1
2,884.0

8
<•)

1935..
1936,
193719381939..

2,991.9
3,069.8
3,136.3
3,073.7
3,222.2

8

19401941.
19421943.
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
270.7
386.5
337.0
174.6

19451946,
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

1950..
1951..
1952._
1953._
1954 8_.

4,050.7
4,108. 5
4.167.4
4,193.9

348.2
363.2
363.9
340. 5

289.6
309.3
306.4
334.0

22,909

1953: January...
February..
March
April
May
June

(8)

July
August
September.
October...
November.
December8.—

744 483,252 261,458 221,794

26,355 25,408
28,285 27,230
31,822 30,197
«19,859 6 18,880
12,091 11,421

$

?! 8

947 668,282
1,055 '36,310
1 ,625 928,313
""
« 979 «457,520
670 333,959

303,464 364,818
354,159 382,151
432,625 495,688
215,510 '242,010
138, 509 195,450

12,244 11,691
9,607 9,285
9,490 9,203
12,836 12, 553
'14,788 714,541

(8)
(8)

553 310,580
322 203,173
287 183,253
283 246,505
7 227 U82,520

135,489 175,091
102,803 100,370
101,856 81,397
140,120 7
106,385
132,863 49,657

J , \}*HJ
L

O&<J) U 1 U

13,619
11,848
9,405
3,221
1,222

13,400
11,685
9,282
3,155
1,176

809
1,129
3,474
5,250
9,246

759
1,002
3,103
4,853
8,708

92,925 9,162
83, 649 8,058
92,819 7,611
2102,545 8,862
116,800 11,086

8,746
7,626
7,081
8,075
10,226

416 248,283
432 259, 547
530 283, 314
787 394,153
860 462,628

151,189
131, 593
131,871
167,530
211,392

97,094
127,954
151,443
226,623
251,236

8,926

647
691
739
693
697
817

604
632
674
628
636
767

23,309
27,273
31,082
27,520
61 32,789
32,379

11,679
12,152
13,365
12, 575
13,193
16.185

11,630
15,121
17,717
14,945
19, 596
16,194

8,703
7,487
7,433
8,267
7,269
8,915

724
700
686
840
815
813

651
639
610
766
745
723

28, 529
33,817
37,076
36,795
43,754

13,931
13,087
13,790
15,904
15,609
16,060

25,899
15,442
20,027
21,172
21,186
27,694

9,543
867
8,533
926
10, 514 1,102
124.8 10,272
975
9,280
943
9,748
965

810
848
998
904
874

29, 592
78 47,774
104 57,280
42, 512
38, 494
81 41,613

17,392
18,411
21,623
17,657
17, 748
18,800

12,200
29,363
35,657
24,855
20, 746
22,813

856
912
819
871
933
917

788
842
752
817
870
839

32,230
32, 582
36, 381
29,000
35,067
40,103

16,030
16,818
15,930
16,378
17,335
17,270

16,200
15, 764
20,451
12,622
17,732

132,916
112,638
96,101
85,491

199.3 172.4 206.0
4,205.7

July
August
September. _.
October
November. __.
December
4,185.3
1954: January-..
February.
March
April
May
June

(8)
(8)

22,165

Thousands of dollars

141.2 161.6 151.2

189.0 «175

9,468
7,943
9,659
9,507

9,409
9,041
9,256
9,852
9,735
11,600

884

219 166,684 119,904
163 136,104 100,660
123 100,763 80,286
45,339 31.184
31,660 14,548

46,780
35,444
20,477
14,155
17,112

50 30,225 11,385 18,840
127 67,349 15,717 51,632
371204,612 63,668 140,944
397 234,620 93,899 140,721
538 308,109 161,386 146,723

1
Excludes firms in fields of agriculture and professional services. Includes self-employed person only if
he8 has either an established place of business or at least one employee.
Industrial and commercial only; excludes banks, railroads, insurance companies, etc.
1
Annual estimates are end-of-quarter data centered at June 30; half-yearly estimates are for end of period.
«Total for period.
8
Not available.
6
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.).
' Revised series has more complete coverage of small firms.
• Preliminary.
Sources: Department of Commerce and Dun & Bradstreet, Inc.




195

INTERNATIONAL TRANSACTIONS
T A B L E D - 5 5 . — U n i t e d States balance of payments, excluding U. S. Government grants of military
goods and services, 1947-54
[Billions of dollars]
Area and type of transaction

1947

1948

1949

1950

1951

1952

1953

19541

WITH THE WORLD »

Exports of goods and services, excluding military transfers:
Merchandise exports
Transportation
Travel
Income on investments
Other

16.0
1.7
.3
1.1
.5

13.2
1.3
.3
1.3
.6

12.1
1.2
.4
1.4
.7

10.1
1.0
.4
1.6
.7

14.1
1.6
.4
1.9
.8

13.3
1.5
.5
1.8
.9

12.4
1.2
.5
1.9
.9

Total exports, excluding military transfers
Military transfers under aid programs (excluded from balances) __

19.7

16.8

15.8

13.9

18.8

18.1

17.0

.3

.2

.5

1.5

2.6

4.3

Imports of goods and services:
Military expenditures abroad—
Merchandise imports
Transportation
Travel
Income on investments
Other

.5
6.0
.6
.5
.2
.4

.8
7.6
.6
.6
.3
.4

.6
6.9
.7
.7
.3
.5

.6
9.1
.8
.7
.3
.5

1.3
11.2
1.0
.7
.4
.5

2.0
10.8
1.1
.8
.4
.6

2.5
11.0
1.1
.9
.4
.6

8.2

10.3

9.7

12.1

15.1

15.7

16.4

-.7

-.6

-.6

-.5

-.5

-.6

-.6

services and
other than
grants [net
- +10.8
[net outflow
-1.0

+5.9

+5.5

+1.3

+3.3

+1.8

0

+.9

-.9

-.6

-1.1

-1.2

+.2

-1.3

+.5

+.5

-.4

Total imports
Unilateral transfers other than U. S.
Government grants [net outflow
\ )\
Balance on goods and
unilateral transfers
U. S. Government
outflow (—)]
U. S. private capital

12.7

I
17.4

10.3

8
8
15.9

+.9

+1.1

+.8

-1.3
(*)

Balance on goods and services,
unilateral transfers
excluding
grants, U. S. private capital, and
errors and omissions [net outflow
(—)j
+10.7
U. S. Government capital and
grants, excluding military transfers
- - «-8.9

+6.1

+5.7

0)

+2.7

+1.1

-.2

-.3

-4.9

-5.6

-3.6

-3.2

-2.4

-2.0

-1.3

+3.6

+.5

+1.2

+2.3

+1.6

Errors and" omissions

Increase ( + ) or decrease (—) in
foreign gold and dollar assets
through transactions with the U. S-

-1.9

-1.2

Exports of goods and services, excluding military transfers.
Imports of goods and services 7

5.8
1.6

5.1
2.0

4.6
2.0

3.3
2.2

4.3
2.9

4.0
3.6

3.4
4.2

Balance on goods and services and
unilateral transfers excluding
grants [net outflow (—)]U. S. private capital [net outflow

+4.2

+3.1

+1.1

+1.3

+•4

-.7

+.2

(*)
+.5

-.1

+.1

— 1

WITH CONTINENTAL WESTERN
EUROPE AND DEPENDENCIES fl

Multilateral transfers 8~Balance on goods and services, unilateral transfers excluding grants,
U. S. private capital, and multilateral transfers [net outflow (—)]-_
U. S. Government capital and
grants, excluding military transfers
Increase ( + ) or decrease (—) in foreign gold and dollar assets •

-.*5

+.2

+2.6
+.1
+.6

+3.6

+3.2

+3.2

+1.1

+1.8

+.3

-.9

-1.7

-3.0

-3.4

-2.2

-2.0

-1.1

-.7

-1.9
=====

-.2

+.2

+1.1

+.2

+.8

+1.6

-.1

See footnotes a t end of table.




8

196

-.2

8

(*)
(*)

T A B L E D - 5 5 . — U n i t e d States balance of payments, excluding U. S. Government grants of military
goods and services,
1947-54—Continued
[Billions of dollars]
Area and type of transaction

1947

1948

1950

1949

1951

1952

1953

19541

WITH STERLING AREA 6

Exports of goods and services,
excluding military transfers
_
Imports of goods and services 7

3.3
3.0

3.0
2.8

2.5
2.8

-.3

+.3

+.2

-.2

+1.0

-.3

-.1

-.1

+.3

+.4

+.6

+.2

+2.0

+1.6

-.3

+.6

+.7

-.1

-2.6

-.9

-1.1

-.7

-.3

-.6

-.4

-.9

-1.0

-.5

+1.0

-.4

-.2

+.6

m

2.7
1.5

2.5
2.0

2.6
2.0

2.8
2.4

3.5
2.8

3.8
3.0

4.1
3.1

8

+1.2
+.2

+.4

+.6

+•3

+.7

+.9

-.5

-.2
-.6

-.1
-.5

-.7
-.3

-.4
-.3

-.4
-.8

+.9
-A
-A

;:

Balance on goods and services, unilateral transfers excluding grants,
U. S. private capital, and multilateral transfers [net outflow (—)]_.
U. S. Government capital and grants,
excluding military transfers

+.8

-.4

if)

-.6

Increase (+) or decrease (—) in foreign gold and dollar assets•

-.8

+.4

Exports of goods and services, excluding military transfers
Imports of goods and services 7

4.8
2.7

4.2
3.1

3.6
3.0

3.8
3.6

Balance on goods and services and
unilateral transfers
excluding
grants [net outflow (—)]
U. S. private capital [net outflow

+2.0

+1.1

+.6

+.2

-.6
-.6

-.3
-.7

-.2
-.7

Balance on goods and services, unilateral transfers excluding grants,
U. S. private capital, and multilateral transfers [net outflow ( - ) ] „
U. S. Government capital and grants,
excluding military transfers

+.8

if)

-.3

-.2

<*)

__

Increase ( + ) or decrease (—) in foreign gold and dollar assets 9

_.«

-.1

+.4

3.7
1.8

2.7
2.0

2.6
1.8

2.0
2.3

+1.9

+.7

+.7

-.1

+1.4

—.1

Multilateral transfers •

—.1
+1.6

Balance on goods and services, unilateral transfers excluding grants,
U. S. private capital, and multilateral transfers [net outflow (—)]—
U. S. Government capital and
grants, excluding military transfers

+3.5

Increase (+) or decrease (—) in
foreign gold and dollar assets •

Balance on goods and services and
unilateral transfers excluding
grants [net outflow (—•)].
U. S. private capital [net outflow

?!

»

WITH CANADA

Exports of goods and services, excluding military transfers—
Imports of goods and services 7
Balance on goods and services and
unilateral transfers excluding
grants
U. S. private capital [net outflow
Multilateral transfers«

(4)

-.3
if)

+.1
(*)

<>
-

+.3

-.1

5.1
4.2

4.8
4.3

4.4
4.3

+.9

+.6

-.3
-.6

-.4
-.2

+.1
+.2

+.1

-.1

+.1

-.1

+.6

<*)

if)

<*)

-.1

-.4

<Q

+.1

+.2

:
<•>

WITH LATIN AMERICA fl

Multilateral transfers

8

See footnotes a t end of table.




197

-.3

i

+.3

S3
(3)

(')
(3)

TABLE D-55.—United States balance of payments, excluding U. S. Government grants of military
goods and services, 1947-54—Continued
[Billions of dollars]
Area and type of transaction

1947

1948

1949

1950

1951

1952

1953

19541

WITH OTHEE COUNTRIES •

2,8
1.3

2.4
1.7

2.5
1.4

2.1
2.0

Balance on goods and services and
unilateral transfers excluding
grants [net outflow (—)]
U. S. private capital [net outflow

+1.5

+.6

+1.1

+.1

-.4

-.1

-.2

-.1

2.9
2.7

2.6
2.6

2.7
2.7

8

+.1

+.8

+.3

+.2

Balance on goods and services, unilateral transfers excluding grants,
TJ. S. private capital, and multilateral transfers
U. S. Government capital and grants,
excluding military transfers

+2.0
«-4.3

+1.3

+1.3

+.2

+.2

+.5

+.5

-1.0

-1.0

-.8

-.8

-.6

-.5

Increase (+) or decrease (—) in foreign gold and dollar assets 9

+2.3

-.3

-.2

+.6

+.6

+.1

0)

COCO

Multilateral transfers»_

<M

+.8

+ f+

Exports of goods and services, excluding military transfers
Imports of goods and services 1

-.1

-.2

+.6

+.7

8

1 Preliminary estimates by Council of Economic Advisers.
2 Includes international institutions.
3 Not available.
< Less than 50 million dollars.
5
Includes 3.1 billion dollars for subscription to International Monetary Fund and International Bank for
Reconstruction and Development.
6
For geographic coverage, see Survey of Current Business, July 1954.
7
Includes net unilateral transfers other than U. S. Government military and economic aid.
8
Includes errors and omissions; (+) indicates payment by the area.
9
Includes gold transactions with the United States only.
NOTE.—Detail will not necessarily add to totals because of rounding.
Source: Department of Commerce (except as noted).




198

TABLE D—56.—U. S. Government grants and capital movements to foreign countries, 7947-54
[Millions of dollars]
Type of aid
Disbursements on grants:
Military goods and services:
Mutual defense2
Greek-Turkish aid
Chinese aid .
Other Government grants:
ECA and mutual security:
Europe.. _ _
_
Other areas
Army civilian supply
Philippine rehabilitation
International relief agencies,
excluding UNRRA..
UNRRA, post-UNRRA,
and interim aid
Other grants
Total disbursements
Less: Receipts
Equals: Net unilateral payments
Long-term capital:
Subscription to:
International Bank for Reconstruction and Development
_ _
International Monetary
Fund
British loan
ECA and MSA programs
_
Export-Import Bank
Surplus credits (including ship
sales)
Raw material credits to occupied
areas
United Nations building loan
Other
Total long-term capital outflow
Less: Repayments
_.
Equals: Net long-term capital outflow..
Short-term capital, net outflow
U. S. Government grants of military
goods and services 2
Other U. S. Government grants, net.
U. S. Government long- and shortterm capital net outflow

1947

1948

1949

1952

1953

1954»

1,458
9
3

4,281

3,362

170
40

460
61
5

2,603

254
46

1,066
86

1,397
96
1,450
130

3,730
92
1,077
203

2,719
114
500
166

2,507
152
361
12

1,528
138
168
4

1,194
439
136

1,012
405
24

34

116

104

84

39

48

93

56

784
169

627
151

2
34

55

87

160

53

56

4,628

4,649

6,196

4,915

123

'86

102

76
4,839

43

2,182

4,267

5,452

4,164

242

73

245

154

4,194

5,207

4,010

4, 505

4,563

6,094

797

300
476
454

428
163

163
193

209
222

334
483

64
645

56
178

280

308

35

2

86
75

7
3
7

26
20
12

28
22
6

13
14

7
23

7

4

7,150

1,555

684

414

458

847

716

238

294

443

205

295

305

429

485

512

6,856

1,112

479

119

153

418

231

-274

113

-88

173

37

3

2

-11

116

43
1,897

300
3,894

210
4,997

526
3,484

1,470
3,035

2,603
1,960

4,281
1,813

3,362
1,477

6,969

1,024

652

156

156

420

220

-158

1,940

317
2 745
2 850

1 January-September data at annual rates.
2
3 Includes loans and returns of military equipment.
Less than 500 thousand dollars.
Source: Department of Commerce.




1951

1950

199

T A B L E D—57.—Estimated gold reserves and dollar holdings of foreign countries, 7928, 7937, and
7946-54
[Billions of dollars, end of year]
1928

1937

1946

1947

1948

1949

1950

1951

1952

1953

19541

All foreign countries

8.8

15.1

19.4

15.2

15.0

15.4

19.1

19.2

20.5

23.1

24.7

Sterling area
Continental OEEC countries
and dependencies
Other Europe
Canada
Latin American Republics
All other countries

1.4

4.9

4.5

3.7

2.9

2.7

4.5

3.8

3.3

4.1

4.3

4.3
.8
.4
11
.
.8

6.8
1.0
.4
1.0
1.0

7.0
.9
1.5
3.7
1.8

5.3
.8
.7
2.9
1.8

5.6

6.0
.6
1.4
3.1
16
.

66
.
.6
2.0
3.5
19
.

6.9
.5
2.2
3.4
2.4

81
.
.6
2.5
3.4
2.6

98
.
.5
2.4
3.6
2.7

11.2
.6
2.6
3.6
2.4

.7

1.2
2.7
1.9

i Preliminary.
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 E P U 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 certain New York City banks as of May 31,1929.
Source: Board of Governors of the Federal Reserve System.




200

TABLE D—58.—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
•s,
7947-54
[1936-38=100]

Period

Total

Crude
materials

Crude
foodstuffs

Manufactured
foodstuffs

Semimanufactures

Finished
manufactures

Quantity
Merchandise imports for consumption: i
1936-38 average-1947
1948
1949
1950
1951 .
1952
1953
1954 2

100
108
123
120
146
144
151
158
148

100
129
139
125
152
142
150
148
142

100
96
109
119
113
119
118
124
105

100
83
91
97
117
122
129
132
135

100
130
149
143
219
200
206
227
203

100
84
103
101
125
134
150
160
159

100
208
212
202
2G3
221
222
221
218

100
191
217
198
193
244
248
235
227

100
245
266
258
252
296
292
287
287

100
478
350
297
237
264
243
230
242

100
203
144
150
127
154
152
137
173

100
332
257
250
225
298
326
379
343

100
218
223
177
151
189
177
183
186

100
169
184
174
170
209
206
200
200

100
182
193
184
179
199
200
201
199

Unit value
1936-38 average
1947
. _
1948
1949
1950 . . .
.
1951
1952 . _
1953
1954 2

...

100
213
235
224
243
305
289
276
283

100
180
203
195
214
312
258
232
226

100
311
343
330
454
512
516
519
623

Quantity
Domestic merchandise exports: i
1936-38 average
1947
1948 . . .
-. . 1949
1950
1951
.
1952
1953 .
19542

100
275
214
219
193
247
251
263
252

100
123
100
126
128
142
121
105
120

100
397
362
435
287
475
427
320
258
Unit value

1936-38 average.
1947
1948
1949 .
1950
1951
1952 .
1953
1954 2 .

100
188
200
186
180
206
205
204
202

100
195
223
212
220
260
245
231
236

100
248
255
225
193
215
233
219
19 i

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.
2 Estimates based on data for the first 9 months.
NOTE.—Export indexes of crude and manufactured foodstuffs in some periods 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.




2OI

SUMMARY
TABLE D-59.—Changes in selected economic series since 1947 and since 1953
Relatives on 1947 base

Source:
Appendix
Table
No.
D-l

Economic series
1948
Gross national product
Personal consumption expenditures
Gross private domestic investment
Government purchases of
goods and services
Gross national product, 1954 prices.
Personal consumption expenditures
Gross private domestic investment
Government purchases of
goods and services:
Total
Federal
State and local

1949

1950

1952

1953

1954

Perchange,
1953 to
1954 1

Ill

111

123

149

157

154

-2.1

108

109

118

132

139

142

+1.7
-10.3
-9.0
-3.1

139

109

172

171

173

155

128

152

147

270

298

271

105

104

114

126

132

128

102

105

111

115

120

120

+.3

123

94

145

130

129

116

-10.5

121
132
110

140
154
125

132
130
135

216
290
139

240
330
146

216
274
156

-10.0
-17.1
+7.0

Gross private product, 1954 prices..
Farm
Nonfarm
Government product
Personal consumption expenditures
Durable goods
Nondurable goods
Services

105
120
104
100

104
110
104
105

115
117
114
109

125
111
126
150

131
115
132
148

126
116
127
144

-3.2
+.9
-3.4
-2.8

108
108
106
111

109
115
104
117

118
139
108
127

132
130
125
147

139
144
128
159

142
141
129
165

+1.7

D-8 National income
Compensation of employees....
Business and professional
Farm proprietors
Rental income
Corporate profits before taxes
and inventory valuation
D-ll Personal income
Disposable personal income..Personal net saving
D-12 Per capita disposable personal income:
Current prices
1954 prices
D-15 Realized net farm incomeD-12 Population: Total
D-16
14 years of age and over_.
D-16 Labor force, including armed forces..
Civilian labor force
Employment
Agricultural
Nonagricultural
Wage and salary workers in nonagricultural establishments
D-22
Manufacturing
Durable
Nondurable
Contract construction
GovernmentAll other
Average gross hourly earnings:
Manufacturing
D-24
Durable goods. _
_
Nondurable goods
Building construction
Retail trade

112
109
109
115
111

110
109
108
88
122

122
120
115
92
131

148
152
129
98
154

155
162
132
84
163

152
161
130
82
168

D-2

D-4

D-6

130

119

149

162

163

148

110
111
250

109
111
190

119
122
302

142
140
460

150
148
500

150
150
490

+.1
+1.4

109
101

108
101

116
108

129
108

134
111

133
111

-.4
-.8

79

75

-5.8

102

104

105

109

111

113

101

102

103

105

107

108

+1.7
+.9

102
102
102
96
103

103
103
101
97
102

105
105
103
91
105

108
105
106
82
109

109
106
107
79
112

110
107
106
79
110

102
100
99
101
109
103
103

100
97
109
107
102

103
98
97
99
118
110
103

111
107
112
101
133
121
110

114
113
121
103
133
122
112

111
105
110
99
133
123
111

-2.8
-7.1
-9.4
-3.8
-.6

109
109
109
51

113
114
113
116
113

118
119
118
121
117

135
137
132
138
131

143
145
138
148
139

146
149
142
155
144

+2.3
+2.7
+3.1
+4.8
+3.6

74

See footnotes at end of table.




-2.4
+1.3
+3.8
-1.6
-.9
-1.1
-2.5
+2.8
-9.1

202

-2.0

+

-1.6
-.9
-1.6

T A B L E D-59.—Changes in selected economic series since 7947 and since
Source:
Appendix
Table
No.

Relatives on 1947 base
Economic series
1948

D-25 Average gross weekly earnings:
Manufacturing
Durable goods.
Nondurable goods
Building construction
Retail trade

D-26

1953—Continued

_.

._.

Industrial production
Manufactures
Durable
Nondurable
Minerals
_

D-27 Agricultural production

1949

1950

1952

1953

1954

Percentage
change,
1953 to
1954 1

108
109
108
109
108

110
111
109
112
113

119
121
117
116
117

136
140
130
139
130

143
147
135
145
135

143
147
138
149
140

—.1
—.3
+1.6
+2.6
+3.4

104
103
103
103
106

97
97
94
100
94

112
113
115
112
105

124
125
135
115
114

134
136
151
119
116

125
127
137
117
111

-6.7
-6.6
-9.8
-1.7
-4.3

109

106

105

113

114

114

.0

D-28

Business expenditures for new
plant and equipment
Manufacturing
_._

107
105

94
82

100
86

129
134

138
141

129
129

D-29

New construction, current prices...
Private
Residential (nonfarm)
Public

130
127
136
141

137
124
131
187

170
162
200
204

198
167
176
318

211
180
189
331

223
194
213
334

-6.0
-8.5
+5.4
+7.7
+12.7
+.6

D-35

Wholesale price index: All commodities
Farm products..
Processed foods
Other than farm products and
foods
_

108
107
108

103
93
97

107
98
102

116
107
111

114
97
107

114
96
107

108

106

110

119

120

120

D-36

Consumer price index: All items.__
Food
_
Apparel-_
_.
Rent-._
Medical care 3

108
109
107
107
106

107
104
102
111
110

108
106
101
115
112

119
119
109
125
123

120
118
108
131
128

120
118
107
136
132

0
-.5
+3.5
+3.1

D-37

Prices received by farmers
Parity index (prices paid, interest,
taxes, and wage rates).

104

91

93

104

93

91

-3.1

108

105

107

120

116

117

+.7

125
134
159

148
172
244

180
216
330

223
279
421

255
331
537

261
336
541

+2.2
+1.4
+.6

115

128

149

186

207

231

+11.7

98

98

104

114

115

118

+3.1

98
112

103
113

109
137

122
169

125
177

134
184

90

97

90

91

92

100

+7.0
+3.8
+9.5

D-3<

D-41

Short- and intermediate-term consumer credit outstanding_
Instalment credit
_.
Automobile paperMortgage debt outstanding

D-42

Demand deposits adjusted and currency

D-43

Loans and investments of all commercial banks
Loans.
Investments in U. S. Government obligations
Gross public debt and guaranteed
issues

D-45

+.2
+.7
+.4
+.4

-1.3

98

100

100

104

107

108

D-49

Corporate profits before taxes
Corporate profits after taxes
Dividend payments
Undistributed profits

111
112
111
111

89
87
115
71

136
121
142
110

126
95
140
69

134
101
145
76

119
98
152
68

D-54

New business incorporations
Business failures

85
151

76
266

82
264

82
219

91
255

104
319

+1.3
-11.2
- 2.7
+5.3
-10.1
+13.9
+25.1

D-58

Merchandise imports (quantity)...
Merchandise exports (quantity)

114
78

111
80

135
70

140
91

146
96

137
92

-6.3
-4.2

i Changes are computed from data as reported and therefore may differ slightly from changes computed
from the relatives shown here.
3
Based on percentage changes published in Department of Labor monthly reports on consumer prices.




203
















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