Full text of Economic Report of the President : 1969
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ECONOMIC REPORT
OF THE PRESIDENT
MM '"
Transmitted to the Congress
January 1969
Together With
THE ANNUAL REPORT
of the
COUNCIL OF ECONOMIC ADVISERS
Economic Report
of the President
Transmitted to the Congress
January 1969
TOGETHER WITH
THE ANNUAL REPORT
OF THE
COUNCIL OF ECONOMIC ADVISERS
UNITED STATES GOVERNMENT PRINTING OFFICE
WASHINGTON
: 1969
For sale by the Superintendent of Documents. U.S. Government Printing Office
^
1. 50
CONTENTS
Page
ECONOMIC REPORT OF THE PRESIDENT
T H E RECORD OF ACHIEVEMENT
1
4
Contribution of Policy
Gains in 5 years
4
5
DEVELOPMENTS IN 1968
6
T H E PROGRAM FOR 1969
7
The Budget
Economic Outlook
7
9
TOWARD PRICE-COST STABILITY
9
The Roads to Avoid
The Roads to Follow
10
10
REINFORCING THE FISCAL-MONETARY FRAMEWORK
Budget Policy and Procedures
Monetary Policy
After Vietnam
12
12
13
14
T H E INTERNATIONAL ECONOMY
14
Balance-of-Payments Adjustment
World Monetary System
Trade
Aid
K E Y AREAS OF FEDERAL GOVERNMENT RESPONSIBILITY
Quality of the Environment
Community Development and Housing
Education
Consumer Protection
Worker Protection
Social Security
14
15
16
17
17
18
18
18
19
19
21
OUR COMMITMENT TO ELIMINATE POVERTY
21
Employment Opportunities
Education, Health, and Nutrition
Housing
Income Support
21
22
22
22
CONCLUSION
23
in
Page
ANNUAL REPORT OF THE COUNCIL OF ECONOMIC
ADVISERS*
25
CHAPTER 1. STRENGTHENING THE FOUNDATION OF PROSPERITY
33
CHAPTER 2. POLICIES FOR BALANCED EXPANSION
61
CHAPTER 3. PRICE STABILITY IN A HIGH EMPLOYMENT ECONOMY. . .
94
CHAPTER 4. T H E INTERNATIONAL ECONOMY
123
CHAPTER 5. COMBATING POVERTY IN A PROSPEROUS ECONOMY
151
REPORT TO THE PRESIDENT FROM THE CABINET
COORDINATING COMMITTEE ON ECONOMIC PLANNING FOR THE END OF VIETNAM HOSTILITIES. . . .
181
APPENDIXES
213
APPENDIX A. REPORT TO THE PRESIDENT ON THE ACTIVITIES OF THE
COUNCIL OF ECONOMIC ADVISERS DURING 1968
213
APPENDIX B. STATISTICAL TABLES RELATING TO INCOME, EMPLOYMENT, AND PRODUCTION
221
*For a detailed table of contents of the Council's Report, see page 29.
IV
ECONOMIC REPORT
OF THE PRESIDENT
ECONOMIC REPORT OF THE PRESIDENT
To the Congress of the United States:
I regard achievement of the full potential of our resources—
physical, human, and otherwise—to be the highest purpose of
governmental policies next to the protection of those rights we
regard as inalienable.
I cited this as my philosophy in my first Economic Report in January
1964. I reaffirm it today.
In the past 5 years, this Nation has made great strides toward realizing
the full potential of our resources. Through fuller use and steady growth
of our productive potential, our real output has risen nearly 30 percent.
Most important of all are our human resources. Today the vast majority of our workers enjoy productive and rewarding employment opportunities. For those who lack skills, we have made pioneering efforts in
training. We have improved education for the young to enhance their
productivity and their wisdom as citizens of a great democracy.
Our capital resources—plant and equipment—are being used intensively and have been continually expanded and modernized by a confident business community.
This has all been accomplished in an environment that preserved—indeed, enlarged—the traditional freedom of our economic system. In today's prosperous economy, our people have more freedom of choice—
among jobs, consumer goods and services, types of investments, places to
live, and ways to enjoy leisure.
I look upon the steady and strong growth of employment and production as our greatest economic success. In recent years, prosperity has
become the normal state of the American economy. But it must not be
taken for granted. It must be protected and extended
—by adopting sound and prudent policies for this year and
—by improving procedures for fiscal and monetary policymaking
to meet our needs for the long run.
I shall discuss these tasks in this Report. I shall also consider how we
might deal with some of our key unsolved economic problems.
• We must find a way of combining our prosperity with price stability. Reconciling these two objectives is the biggest remaining
over-all economic challenge facing the Nation.
• We must more fully secure the foundations of the world monetary
system and of our own balance of payments. The international
monetary system has undergone important evolutionary improvements, but we must seek more effective ways of coping with the
stresses that can still develop.
• We must fulfill our many unmet public needs such as good education, efficient transportation, clean air, and pure water. Quality
as well as quantity is the key to a better life.
• We must share more equitably the fruits of prosperity among all
our citizens. A Nation as prosperous as ours can afford to open
the doors of opportunity to all. Indeed, it cannot afford to leave
any citizen in poverty.
The achievements we have made and the lessons we have learned point
the way for further progress.
THE RECORD OF ACHIEVEMENT
The Nation is now in its 95th month of continuous economic advance.
Both in strength and length, this prosperity is without parallel in our
history. We have steered clear of the business-cycle recessions which for
generations derailed us repeatedly from the path of growth and progress.
This record demonstrates the vitality of a free economy and
its capacity for steady growth. No longer do we view our economic life
as a relentless tide of ups and downs. No longer do we fear that automation and technical progress will rob workers of jobs rather than help
us to achieve greater abundance. No longer do we consider poverty
and unemployment permanent landmarks on our economic scene.
CONTRIBUTION OF POLICY
Our progress did not just happen. It was created by American labor
and business in effective partnership with the Government.
Ever since the historic passage of the Employment Act in 1946,
economic policies have responded to the fire alarm of recession and boom.
In the 1960's, we have adopted a new strategy aimed at fire prevention—
sustaining prosperity and heading off recession or serious inflation before
they could take hold.
• In 1964 and 1965, tax reductions unleashed the vigor of private
demand and brought the economy a giant step toward its
full potential.
• In 1966 and 1967, restrictive monetary and fiscal policies offset the strains of added defense spending. The adjustment was far
from ideal, however, because of the delay in increasing taxes to
pay the bills for the defense buildup and for continuing urgent
civilian programs.
• In 1968, our Nation's finances were finally adjusted to the needs
of a defense emergency. The Revenue and Expenditure Control
Act strengthened the foundation of prosperity.
GAINS IN 5 YEARS
Aided by these policies in the past 5 years, the Nation's total output
of goods and services—our gross national product—has increased by
more than $190 billion, after correcting for price changes. This is as
large as the gain of the previous 11 years.
The prosperity of the last 5 years has been accompanied by benefits
that extend into every corner of our national life
—more than 8J/2 million additional workers found jobs,
—over-all unemployment declined from 5.7 percent of our labor
force to 3.3 percent,
—unemployment of nonwhite adult males dropped particularly
dramatically, from 9.7 percent to 3.4 percent,
—the number of persons in poverty declined by about I2/2 million—progress greater than in the entire preceding 13 years,
—the average income of Americans (after taxes and after correction for price rises) increased by $535—more than one-fifth and
again more than in the previous 13 years combined,
—corporate profits rose by about 50 percent,
—wages and salaries also went up by 50 percent,
—net income per farm advanced 36 percent,
—the net financial assets of American families increased $460 billion—more than 50 percent, and
—Federal revenues grew by $70 billion, helping to finance key social
advances.
Meanwhile, a solid foundation has been built for continued growth
in the years ahead.
• Through Investment in Plant and Equipment. In the last 5
years, the stock of capital equipment has grown by nearly a
third. Only 5 percent of manufacturing corporations report that
their capacity is in excess of currently foreseen needs.
• Through Investment in Manpower. More than a million Americans have acquired skills in special training institutions or on the
job—as a result of new Federal efforts.
• Through Investment in Education. College enrollment has risen
by 2*4 million since 1963. Expenditures on all public education
have increased at an average of 10 percent a year; Federal
grants have almost quadrupled.
• Through Investment in Our Neighborhoods. Our urban centers are beginning to be restored as decent places to live and initial steps have been taken to help ensure construction of 26 million
new or rehabilitated housing units by 1978.
DEVELOPMENTS IN 1968
Our economy had an exceptionally big year in 1968.
• Our gross national product increased by $71 billion to $861 billion. Adjusted for price increases, the gain was 5 percent.
• Payroll employment rose by more than two million persons.
• Unemployment fell by 160,000.
• The after-tax real income of the average person increased by
3 percent.
• An estimated four million Americans escaped from poverty, the
largest exodus ever recorded in a single year.
• Our balance-of-payments results were the best in 11 years.
In some ways, 1968 was too big a year. Even our amazingly productive economy could not meet all the demands placed upon it. Nearly half
of the extra dollars spent in our markets added to prices rather than to
production. The price-wage spiral turned rapidly.
• Consumer prices rose by 4 percent and wholesale prices by 2*/2
percent.
• Both union and nonunion wages increased about 7 percent—
responding to higher costs of living and causing higher costs of
production.
• Some of the extra demands for goods were met out of foreign
production, and imports soared 22 percent.
The main source of the overheating was the excessive and inappropriate stimulus of the Federal budget in late 1967 and the first half of
1968. In January 1967, I pointed to the need for a tax increase. In the
summer, when the upsurge was even more clearly foreseen, I urged im-
mediate enactment of a 10-percent income tax surcharge. The subsequent delay in enactment resulted in a massive budget deficit of $25
billion for fiscal year 1968, which
—accelerated the economy beyond safe speed limits,
—weakened confidence in the dollar abroad, and
—placed a heavy burden on credit markets at home, pushing interest
rates sharply higher.
Ultimate passage of the Revenue and Expenditure Control Act of
1968 at midyear brought a much needed swing to fiscal restraint. The
budget now shows a surplus of $2.3 billion for fiscal 1969. Because of both
greater revenues and reduced expenditures, this picture has changed
dramatically since last January when we estimated a deficit of $8 billion.
Just as the overly stimulative effects of the huge budget deficit of fiscal
1968 were unmistakable, so there can scarcely be doubt that the reverse
swing—of even larger size—will improve balance in our economy.
But just as inappropriate fiscal stimulus took a while to cause obvious
problems, so needed fiscal restraint is taking time to work its full beneficial effects on the economy.
By the time the surcharge was enacted, the forces of boom and inflation had developed great momentum. Our economy continued to advance too rapidly throughout 1968—but growth did slow from a hectic
6/2 percent rate early in the year to about 4 percent at yearend. The
budget is now in harmony with the needs of the economy, and its welcome
effects are gradually emerging.
THE PROGRAM FOR 1969
The challenge to fiscal and monetary policies this year is difficult indeed. Enough restraint must be provided to permit a cooling off of the
economy and a waning of inflationary forces. But the restraint must also
be tempered to ensure continued economic growth. We must adopt a
carefully balanced program that curbs inflation and preserves prosperity.
T H E BUDGET
My final budget is designed to meet this demanding assignment. It is
a tight and prudent program for fiscal 1970.
• It holds total Federal expenditures within the bounds of available revenues, yielding a surplus of $3.4 billion.
• It finances our continued military efforts in Vietnam while we
strive to bring about peace.
7
• It provides funds for our continuing national campaign against
poverty, injustice, and inequality.
• It limits increases in expenditures to programs of highest priority:
the encouraging JOBS program and other manpower training,
Model Cities and key housing programs, law enforcement, and
education.
• It trims lower priority programs wherever possible.
The budget calls for the extension of the income tax surcharge at its
current rate of 10 percent for 1 year from July 1, 1969 to June 30,
1970. My economic and financial advisers unanimously agree that this
fiscal restraint is essential to safeguard the purchasing power of the dollar
and its strength throughout the world. Indeed, the need for continued
fiscal restraint is agreed upon by all informed opinion in both of our
political parties.
In today's economic and military environment, an immediate lowering of taxes would be irresponsible. The American people would be
poorly served by a small short-run gain that would endanger their
enormous long-term stake in a steady and stable prosperity. I hope and
I believe that Members of the Congress of both parties will support timely
action on taxes to continue on the course of fiscal responsibility which
we have worked together to achieve.
I asked for the surcharge as a temporary measure and that is the way
I regard it. My proposal for a 1-year extension preserves the option of
the new Administration and the Congress to eliminate the surcharge
more rapidly if our quest for peace is successful in the near future. It is
my conviction that the surcharge should be removed just as soon as that
can be done without jeopardizing our economic health, our national
security, our most urgent domestic programs, or international confidence
in the dollar. Clearly, that time has not yet arrived.
The extended surcharge will continue to take 1 percent of the income
of the average American—less than half of the tax cut he received in
1964-65. In return, he will receive improved protection against the
ravages of inflation, world financial crisis, and neglect or mismanagement of our priorities. It is the best investment in responsible fiscal management that the United States can make in 1969.
Including this budget, I have been responsible for 6 years of fiscal
planning. From fiscal 1965 to fiscal 1970, the Federal Government will
have spent $969 billion on programs and received $936 billion in revenues. The total deficit for that period amounts to $33/ 2 billion. The bulk
of that total deficit occurred in fiscal 1968, when action on taxes was
long delayed.
8
By comparison, these six budgets
—provided $35 billion of net tax reductions, even allowing for
higher social security taxes, and
—carried $109 billion of outlays to cover the special costs of the
war in Vietnam.
ECONOMIC OUTLOOK
With this budget and appropriate monetary policy, our gross national
product for 1969 should rise about $60 billion.
• Increased expenditures on new plant and equipment will help
expand and modernize our productive capacity.
• State and local governments will continue to increase their spending rapidly to meet public needs. But Federal purchases will rise
little.
• Consumer spending and homebuilding activity should advance
less than last year.
• The over-all gains will not and should not be as large as those in
1968, but they will still make for a highly prosperous year.
• For the fourth straight year, unemployment should be less than 4
percent of the labor force.
Because fiscal policy is soundly planned, monetary policy should not
be overburdened. It will need to support firmly the objective of moderating economic expansion. But homebuilding and other credit-sensitive areas need not be subjected to the sharp and uneven pressures of a
credit squeeze. Monetary policy should be flexible and prepared to lessen
restraint as the economy cools off.
As pressures of demand moderate, our trade performance in world
markets should improve. We should also see a gradually improving trend
in prices and costs, although the wage-price spiral will continue to be
troublesome.
TOWARD PRICE-COST STABILITY
The immediate task in 1969 is to make a decisive step toward price
stability. This will be only the beginning of the journey. We cannot hope
to reach in a single year the goal that has eluded every industrial country
for generations—that of combining high employment with stable prices.
There is no simple nor single formula for success. But this combination
can and must be achieved—by the United States and within the next
several years. Now that we have learned to sustain prosperity, we can
surely not allow inflation to erode or erase that victory.
T H E ROADS TO AVOID
We stand at a critical turning point for national policy. We can meet
the challenge, or we can try to evade it.
Price stability could be restored unwisely by an overdose of fiscal and
monetary restraint. This has been done before, and it would work
again. But such a course would mean stumbling into recession and
slack, losing precious billions of dollars of output, suffering rising unemployment, with growing distress and unrest. It would be a prescription for social disaster as well as for unconscionable waste.
Or we could conceivably travel the route to mandatory controls on
prices and wages. But the vital guiding mechanism of a free economy is
lost when the Government fixes prices and wages. We did not impose
such regulations on our businessmen and our workers during the recent
years of military buildup and hostilities. We surely must not turn down
this path—a dead end for economic freedom and progress.
Or we could throw up our hands and allow the price-wage spiral to
turn faster and faster. This counsel of despair would eventually undermine our prosperity and our financial system—wrecking the strong international position of the dollar and imposing unjust burdens on millions
of our citizens.
T H E ROADS TO FOLLOW
Price stability in a prosperous economy must be pursued by a coordinated program involving a wide range of actions.
The fiscal and monetary program I outlined earlier is our first line of
defense against inflation. The Nation has surely learned that inflation will
emerge unless responsible budget and credit policies keep demand
within the bounds of the economy's productive capacity.
Even then, advances in prices and wages at high employment can
prove troublesome. No free economy can escape these tendencies entirely. But it can keep them from developing when unemployment
is too high, and it can moderate the pressures that do emerge. To do so
effectively requires reinforcing other important measures to reinforce
fiscal and monetary policies.
Productivity and Efficiency
First, although the productive efficiency of our industries and of
our workers is already the envy of the world, we must keep striving for
further improvements.
10
Productivity can be raised even more rapidly and manpower can be
employed more effectively through many methods in which Government can lend a hand—by training programs that better match skills to
job requirements, by developing the potential of the disadvantaged, by
using the wasted abilities of those who are out of work seasonally or
intermittently, by providing better information about job opportunities,
and by encouraging research and investment in better technology.
Government, business, and labor can work together to improve industrial efficiency. We can strengthen our dedication to the competitive
principles and practices that have made American industry preeminent.
Impediments to efficiency must be identified and tackled, industry by
industry, wherever they exist—as they do particularly in medical care and
construction.
The Government should look at its own programs and policies to
ensure that they do not add an unnecessary penny to the costs of production. To fulfill this goal, public policies must be reviewed continually in
many areas—procurement, regulation, international trade, commodity
programs, and research and development.
Voluntary Cooperation
Second, both in their own interest and in the public interest, business
and labor should exercise the utmost restraint in price and wage decisions.
It is understandable that, with living costs rising sharply, labor cannot
now accept wage agreements limited to the rise in productivity. It is
also understandable that, with production costs increasing, business
cannot now hold prices entirely stable.
But the process of deceleration must take hold for both prices and
wages. The demands for incomes by business and labor combined must
be brought more closely into line with the amount of real income the
economy can generate. A decisive step toward price stability in 1969
requires labor and business to accept some mutual sacrifices in the short
run to preserve their enormous long-term interest in prosperity and a
stable value of the dollar.
In recent years, business, labor, and Government have been discussing the big economic issues—sometimes debating, but often agreeing.
The dialogue should go forward and should explore new forms of labormanagement cooperation to ensure greater fulfillment of common
interests.
A year ago, I established the Cabinet Committee on Price Stability to
coordinate efforts within the Administration to help improve efficiency,
enlist voluntary restraint, and contribute to public education and dis-
II
cussion on the wage-price problem. In its recent Report, the Committee made many important recommendations which deserve the most
serious consideration. The work of the Committee has proved its value,
and should be continued in some appropriate form.
The stakes are enormous in our efforts to combine high employment
and price stability. We can sacrifice neither goal. The challenge can be
met if we have the will.
REINFORCING THE FISCAL-MONETARY FRAMEWORK
The unparalleled economic expansion of the past 8 years testifies to
the accomplishments of our fiscal and monetary policies. Yet the blemishes on that record show plainly that further improvements are needed.
BUDGET POLICY AND PROCEDURES
The budget is the keystone of Federal Government operations. It
is a plan developed within the Executive Branch and a recommended
program for action by the Congress. It is a blueprint for fiscal and economic policy.
In my many years in Washington, I have worked intensively on the
budget on both the legislative and executive sides. I know the difficulties
of
—coordinating a host of appropriation requests into a total program
that accurately reflects national priorities,
—making the dollar sum of the parts equal a whole that remains
within prudent bounds, and
—ensuring that decisions on tax revenues go hand in hand with
those on expenditures.
The Executive Branch coordinates its budgetary decisions through the
Bureau of the Budget, with extensive cooperation from the Department
of the Treasury and the Council of Economic Advisers. The Congress has
no parallel process. I urge the Congress to review its procedures for
acting on the annual budget and to consider ways that may improve
the coordination of decisions among Federal programs and on Federal
revenues in relation to expenditures.
My experience has thoroughly convinced me of the fundamental wisdom of our system of checks and balances. The system works well because
both the President and the Congress subject their own operations continually to careful scrutiny and review in light of experience.
Costly delays in enacting recent tax legislation demonstrate the need
12
for a review of procedures in this area. Congress should ask: How can a
prompt response to a Presidential request for tax action be assured?
When such a recommendation takes a simple form (like the current
income tax surcharge) and when it is made to head off a threat to prosperity, the Nation is entitled to a prompt verdict.
To provide the fiscal flexibility needed in our modern economy, the
Congress might be willing to give the President discretionary authority
to initiate limited changes in tax rates, subject to Congressional veto.
I believe that the President should have such authority. Alternatively,
the Congress might choose to establish its own rules for ensuring a prompt
vote—up or down—on a Presidential request for tax action.
The Nation should never again be subjected to the threat of fiscal
stalemate.
MONETARY POLICY
Our institutions allow monetary policy to adjust promptly and
smoothly, and the value of this flexibility has become evident. When fiscal action has been delayed, monetary policy has been able to continue
the battle against inflation. But tight credit, soaring interest rates, pressures on homebuilding, and nervous financial markets are the unhappy
results of an overburdened monetary policy. Greater fiscal flexibility
would help to ensure that monetary policy is not asked to carry an undue
share of the load in restraining—or stimulating—the economy.
The Administration and the Federal Reserve have learned to work
together closely and to coordinate effectively, while preserving the appropriate independence of the Federal Reserve within the Government. Our
monetary institutions are working well, and I see a need for only a few
reforms to enhance their effectiveness.
• The term of Chairman of the Federal Reserve Board should be
appropriately geared to that of the President to provide further
assurance of harmonious policy coordination.
• The rigid requirement that no more than a single member of
the Federal Reserve Board may be appointed from any one
Federal Reserve District should be removed so that the President, with the advice and consent of the Senate, may choose the
very best talent for the Board.
• The Congress should review procedures for selecting the presidents of the 12 Reserve Banks to determine whether these positions should be subject to the same appointive process that applies
to other posts with similarly important responsibilities for national
policy.
323-166 O - 69 - 2
AFTER VIETNAM
Despite some encouraging signs of progress toward peace, hostilities
in Vietnam continue. In planning our budget, we must assume continuation of the war. But we must also be ready to adjust to peace whenever
that welcome day arrives.
Early in 1967, to ensure our readiness for peace, I established the
Cabinet Coordinating Committee on Economic Planning for the End of
Vietnam Hostilities.
The Report of that Committee emphasizes the demanding task that
will confront fiscal and monetary policies once a secure peace permits
demobilization. The resources freed from war must not—and need not—
be squandered in idleness. Rather, this manpower and material should
be promptly enlisted in the service of peaceful progress.
In addition to its immeasurable human benefits, peace will provide
an economic dividend to the Nation and to the Federal budget. But that
dividend is dwarfed by the urgent needs of our society. The Nation will
have to weigh the priorities among attractive programs carefully and
wisely to take full advantage of this dividend. High on the list of priorities is the commitment to provide equal and full economic opportunities
for all our citizens.
THE INTERNATIONAL ECONOMY
BALANCE-OF-PAYMENTS ADJUSTMENT
Our international accounts were in balance in 1968—for the first
time since 1957. Much of the improvement came from the program I
announced in an atmosphere of world financial crisis a year ago. The
contrast today is striking and gratifying.
The excellent results of last year were aided by temporary factors.
Hence, we cannot relax our efforts to achieve fundamental improvement—especially in our disappointing trade performance. To strengthen
our trade surplus and achieve a healthy balance of payments, we must
—restore price stability at home,
—encourage our farms and factories to become ever more competitive in quality and price so that they can export more,
—intensify efforts to secure the removal of barriers to freer trade,
—bring more foreign tourists to our shores to enjoy America with
us, and
—minimize the foreign exchange cost of our military commitments
and economic aid overseas.
14
Our temporary programs to restrain capital outflows worked well in
1968. American businesses showed remarkable ingenuity and cooperation in pursuing their activities abroad while drastically cutting the drain
on the Nation's balance of payments. These programs clearly aided in
preserving the strength of the dollar.
Capital restraints should never become permanent features of our
economy. They should be ended as soon as possible.
But the war continues and the movement toward noninflationary
prosperity has just begun. We cannot now scrap our defenses against
large capital outflows. For the present, we must
—renew the Interest Equalization Tax before it expires on July 31,
—maintain the direct investment control program in the more flexible form recently announced, and
—continue the Federal Reserve program of voluntary restraint
of foreign lending.
To maintain our gains, ever closer international cooperation is needed
among the highly interdependent nations of the world. Countries in
deficit must meet their responsibilities. And countries in surplus must also
pursue appropriate policies—striving especially for rapid economic
expansion and giving world traders greater access to their markets.
WORLD MONETARY SYSTEM
The international monetary system was strengthened in 1968. An historic international agreement was reached, creating in the International
Monetary Fund a new reserve asset—the Special Drawing Right.
We spent 3 years studying, exploring, and negotiating with our commercial partners in order to reach this agreement. I eagerly await the day
that actual distribution of SDR's will begin. They can meet the future
needs of the world for international liquidity—in the proper amounts and
in a usable form. I am proud that the United States acted so promptly to
ratify this agreement with such overwhelming bipartisan support in the
Congress.
Some did not believe that such an agreement was possible, arguing
that a rise in the official price of gold was the only way to increase international reserves. We and our trading partners rejected this futile course;
it would have offered a ransom payment to speculators and would have
failed to provide for the orderly growth of reserves. I have carried out my
pledge that the United States would sell gold to official holders of dollars
at $35 an ounce. There is clearly no need to change that price.
Myths about gold die slowly. But progress can be made—as we have
demonstrated. In 1968, the Congress ended the obsolete gold-backing
requirement for our currency.
Another major step in freeing the international monetary system from
disturbances by gold speculators was taken in March, when the United
States and the other active gold pool countries agreed to cease supplying
gold to the private market. The resulting two-price system for gold is
working successfully.
The international economy has made major strides in the past. But we
must recognize the problems that remain. The financial crises of 1968
stimulated constructive discussion of many proposals for further evolutionary improvements in the international economic system.
These proposals are not an agenda for action in a week or a month or
even a year. The issues posed cannot be resolved in a summit meeting or
by a superplan. But they can be tackled effectively with the same kind
of careful study and negotiation that led to the successful SDR plan. The
United States should actively participate in such a procedure in order to
strengthen the foundation of the world economy.
TRADE
World trade has continued to expand briskly—virtually unaffected
by the sporadic crises in financial markets. Tariff barriers that once stifled
international commerce have been substantially lowered—most notably
by the Kennedy Round reductions which began in 1968 and will continue until 1973.
We must reinforce this success by devoting equal energy to the removal
of nontariff barriers. On our part, Congressional action to rescind the
American Selling Price provision is essential for achieving reductions of
nontariff barriers offered by several of our trading partners.
Other nontariff barriers also need revision.
• Agriculture has been the stepchild of trade negotiations, and deserves prompt and proper attention.
• The international rules governing border tax adjustments should
be revised so that they no longer give a special advantage to
countries that rely heavily on excise and other indirect taxes.
While we work to reduce trade barriers, we must not drop our guard
against the advocates of protectionism at home and abroad. We will
never neglect the legitimate concerns of any citizen. But the only real
solutions are ones that improve our economy—not ones that erect new
barriers that could provoke retaliation, or insulate producers from the
16
invigorating force of world competition. To provide the right kind of aid
to those seriously hurt by import competition, present provisions for
temporary adjustment assistance must be liberalized, as I have repeatedly
recommended.
AID
Important economic progress is being made in the world's less developed countries. The beginnings of spectacular advances in world
agriculture are now clearly evident. Family planning is gaining widespread support.
The United States can and should help to promote further progress
in world agriculture and family planning, and the achievement of more
rapid economic growth in the less developed countries. Only if funds for
foreign aid programs are restored to an adequate level can we do our
part.
The United States has long supported multilateral assistance as an
equitable and efficient means of channeling aid from wealthy to poorer
nations. We must reaffirm this support by promptly authorizing the U.S.
contributions to the replenishment of the International Development
Association and to the Special Funds of the Asian Development Bank.
KEY AREAS OF FEDERAL GOVERNMENT RESPONSIBILITY
The bountiful output of the American private enterprise system has
made our high standard of living possible. Yet this same abundance
has created a growing need for public action to improve the quality
of life in our cities, towns, and countryside. The Federal Government
must continue its partnership with the private sector and with State and
local governments to provide better public services.
Increased efforts are needed to
—improve the environment by ensuring clean air, pure water, and
the conservation of natural resources,
—assist in community development and in education,
—protect the consumer against unfair practices and unwholesome
products,
—ensure safe employment conditions, and
—provide a more comprehensive social insurance system to protect
against the financial impacts of retirement, unemployment, job
accidents, and long-term illness of a breadwinner.
l
7
QUALITY OF THE ENVIRONMENT
More than ever, Americans realize that purposeful action is required
to ensure an environment we can all enjoy. In the last 5 years, legislation
has been enacted to abate air and water pollution and to control the disposal of solid wastes. Despite progress, many of our rivers still are open
sewers, our atmosphere often unfit to breathe, and much of our land
littered with discarded junk. We must
—develop new methods for financing water treatment plants,
—attack oil pollution of harbors and beaches,
—strengthen laws for clean air and solid waste disposal,
—stop the ravages of strip mining, and
—preserve more parks and wilderness areas.
COMMUNITY DEVELOPMENT AND HOUSING
Rapid population growth in our cities and rising living standards
have created a backlog of community and housing needs.
Local governments are finding it increasingly difficult to finance essential community facilities—schools, parks, hospitals, and transportation
systems. The Federal Government must develop new ways to help communities raise capital for public facilities.
The capacity of the housing industry must be enlarged and updated
to meet the Nation's goal of adding 26 million decent homes and apartments over the next decade.
To improve our communities and meet our housing needs, I
recommend
—an independent, federally established, Urban Development Bank
to provide low-interest loans to State and local governments,
—increased Federal research and development to improve construction technology,
-—a Federal program to test housing materials and to improve
building standards and practices,
—the training of more construction workers through federally
assisted manpower programs in cooperation with trade unions
and contractors, and
—an urban mass transportation trust fund, financed by a portion of
the automobile excise tax.
EDUCATION
Providing good education is a national responsibility in which the
Federal Government must do its part. Great progress has been made in
18
recent years toward our goal of providing every child all the education
he wants and can absorb. But continued and expanded efforts will be
needed. This Nation must strive to
—provide every child with year-round opportunity for preschool
education,
—offer every teacher assistance for continuing education,
—bring the cost of higher education within the means of every
qualified student through expanded loans and grants, and
—provide funds for higher education adequate to ensure instruction of finest quality.
CONSUMER PROTECTION
The confidence of consumers in the American marketplace is vital for
a healthy economy. In the past 5 years, the Congress has ushered in a
new era of consumer protection by enacting 20 major measures in this
field. We have made great strides toward our goals of
—ensuring that all products are safe and wholesome,
—providing full and fair disclosure in the marketplace, and
—eliminating fraud and deception by the few who prey on the unsuspecting, the elderly, and the poor.
To carry on the work so well begun, legislation is needed to
—prevent deceptive sales practices by giving new authority to the
Federal Trade Commission,
—reduce the likelihood of massive electric power failures which can
paralyze our cities,
—ensure that the small investor shares in the benefits of our thriving mutual fund industry, and
—complete the circuit of Federal inspection for foods commonly
served at the family dinner table.
WORKER PROTECTION
American workers are the most productive in the world and they have
made our high standard of living possible. They and their families deserve a safe working place and adequate protection against the loss of
income from on-the-job accidents, disability, and unemployment.
Safety
The human costs of accidents are immense—14,000 people killed on
the job each year, 2.2 million workers injured. The monetary cost alone
is a staggering $5 billion. Recent tragedies in our factories, mines, and
other work places have dramatized once more the need for better safety
practices. Must we wait for tragedy to strike again?
The Congress failed to act last year on an urgently needed Occupational Safety and Health Bill and on the Coal Mine Safety Bill. We can
delay no longer. This Nation must put an end to this senseless waste from
job accidents—through comprehensive legislation that will ensure the
best job safety and health practices in all American work places.
Workmen's Compensation
Workmen's compensation should ensure that no victim of a job-related
accident lacks the funds to pay his medical bills and support his family.
Currently, one employee in five has no workmen's compensation protection. Benefit levels are too often tragically low. The Federal Government should act now to ensure that the States provide adequate workmen's coverage and benefits.
Disability Insurance
Today disabled workers wait as long as 6 months before receiving benefits—and their disability must be expected to last more than 1 year. In
addition, disabled workers are too often unable to pay for the medical
care they need. To meet these shortcomings, I recommend that
—the waiting period for benefits be reduced from 6 to 3 months,
—the minimum duration of qualifying disability be reduced to 3
months, and
—the totally and permanently disabled be eligible for Medicare.
Unemployment Insurance
Even in the height of prosperity during 1968, two million workers
were out of work for a period of 15 weeks or longer. About a million
workers spent at least half the year fruitlessly looking for work.
Congress should strengthen the Federal-State Unemployment Insurance system by
—extending coverage to five million more workers,
—raising benefit levels,
—lengthening payment periods, and
—providing special federally financed benefits for the long-term
unemployed, with recipients required to accept job training and
other employment services under appropriate circumstances.
20
SOCIAL SECURITY
Social security is one of the oldest and best social programs. Currently,
25 million people—one out of every eight Americans—receive a social
security check every month. Largely because of social security, two-thirds
of the beneficiaries—the elderly, widows, orphans, and the disabled—
are above the poverty line. Yet we need to do more. I recommend an
average increase in benefits of 13 percent, including
—a rise of at least 10 percent for every beneficiary,
—a 45 percent increase from $55 to $80 for the five million Americans receiving the minimum benefit,
—a $100 monthly minimum benefit for those who have contributed
to social security for 20 years or more, and
—a liberalization of benefits for the elderly who choose to work.
OUR COMMITMENT TO ELIMINATE POVERTY
No achievement gives me greater pride than the advances in the war
on poverty. No social challenge gives me greater concern than the elimination of poverty.
Since the passage of the Economic Opportunity Act, which established
the Nation's commitment to eliminate poverty, the number of poor
Americans has been reduced by about 11 million. Still, 22 million Americans remain poor.
The effective programs of the Office of Economic Opportunity must
be preserved and strengthened. For this purpose, I am recommending a
2-year extension of the Economic Opportunity Act.
EMPLOYMENT OPPORTUNITIES
In recent years, our national prosperity has rapidly expanded job
opportunities for the poor. To maintain progress, we must not retreat
from high employment. The doors to opportunity are bound to be locked
to the disadvantaged and to new workers if senior and skilled employees
are being laid off.
At the same time, we cannot count on normal economic growth to
create as many jobs for the poor as were created when we moved out of
a slack economy. We must therefore increase the emphasis on manpower
programs in order to provide effective aid to the disadvantaged.
In 1968, we launched a major new partnership with private
industry—the National Alliance of Businessmen. Job Opportunities in
21
the Business Sector is a promising route for providing jobs and training
for the hard-core unemployed. The JOBS program has reached its initial
target 6 months ahead of schedule. My budget provides for major expansion of this program.
The experience with JOBS encourages us to develop a similar program for employment in the rapidly growing public sector.
EDUCATION, HEALTH, AND NUTRITION
The poor are often handicapped by inferior education, ill health, and
inadequate diets. Federal Government programs have begun to attack
these roots of poverty. Head Start, Follow Through, and Title I of the
Elementary and Secondary Education Act help in educating disadvantaged children. These should ultimately be expanded to meet the needs
of all poor children.
Medicaid has a high proportion of poor beneficiaries and should ultimately free the needy from the bonds of inadequate health care.
Good health is essential for a good start in life. Expectant mothers and
infants in poor families should be provided comprehensive health care.
America, blessed with agricultural abundance, should not tolerate
hunger among its people. The Food Stamp program should be expanded
and a cooperative Federal-State effort launched to protect all Americans
against hunger and malnutrition.
HOUSING
With the Housing and Urban Development Act of 1968 we set the
goal of eliminating all substandard housing in the next decade. We must
back that commitment with the needed resources—financial, technical,
and human. First priority must be given to the needs of the poorest of
the poor through the Model Cities program, rent supplements, home
ownership, and public housing. And all families must be assured full
and fair access to housing—with no discrimination.
INCOME SUPPORT
No matter how well we succeed in other efforts, cash assistance will be
needed by many of the poor—the elderly, the disabled, and some mothers
with sole responsibility for the care of young children. Although such
funds do not directly remove the causes of poverty, they sustain life and
22
hope and help prevent poverty from being bequeathed from one generation to the next.
Income support programs need a thorough review. The public discussion required to illuminate this area is well under way and will benefit from the report of the Commission on Income Maintenance, due at
the end of this year. Americans will soon have to decide how best to
help those who cannot earn enough to escape from poverty.
Whatever strategies we choose, the effort to reduce poverty must be
redoubled. Victory in the war on poverty can be won with only a modest
share of the Nation's income gains. The total shortfall of income below
the poverty line amounts to only 1 percent of our gross national product—
one-fourth of our normal growth in a single year. A fully effective antipoverty program would initially cost more than that—but would not be
out of range. Surely Americans will make the investment needed to
eliminate poverty.
CONCLUSION
The American economy has been steadily on the march in the 1960's.
It has shattered all records for progress toward the Employment Act's
goals of "maximum employment, production, and purchasing power."
It has bestowed great blessings of abundance on the vast majority of
Americans in all walks of life.
Economic growth has provided the resources for urgent defense needs
and has still permitted a major expansion of civilian production—both
public and private. It has allowed us to send a youngster to Headstart
and a man to the moon.
When our economy was less prosperous, many of our social problems
were neglected—eclipsed by the struggle of families to make ends meet.
The plight of the poor was fatalistically accepted when the majority of
Americans were vulnerable to unemployment and deprivation. Our
needs for improved schools, better cities, and a healthier environment
were pushed into the background.
As the average American's standard of living soared, we could afford
to focus on new challenges. Facing these issues squarely has in itself been
a great accomplishment. We have marshaled our determination to provide a good job, a decent standard of living, quality education, and a
pleasing environment for everyone.
We have begun to make progress toward these new aspirations. But
we have only begun. And because we have so far to go, many of us are
impatient. This feeling is in the great American tradition. High aspirations and impatience have constantly spurred us to greater achievements.
And they will again. Our economy will not rest on the laurels of the
1960's. We will not relax to count or consolidate our gains. We will
not retreat from the unprecedented prosperity we have achieved. This
Nation will remain on the march.
January 16, 1969.
24
THE ANNUAL REPORT
OF THE
COUNCIL OF ECONOMIC ADVISERS
LETTER OF TRANSMITTAL
COUNCIL OF ECONOMIC ADVISERS,
Washington, D.C.January
10,1969.
T H E PRESIDENT:
SIR: The Council of Economic Advisers herewith submits its Annual
Report, January 1969, in accordance with Section 4(c) (2) of the Employment Act of 1946.
Respectfully,
ARTHUR M. O K U N ,
Chairman.
MERTON J. PECK.
WARREN L. SMITH.
CONTENTS
Page
33
CHAPTER 1. STRENGTHENING THE FOUNDATION OF PROSPERITY
Economic Gains in 1968
'......••
Production and Productivity
..
Employment and Income
.
The Composition of Demand
Economic Policy in 1968
Fiscal Policy
Monetary Policy and Financial Developments
Pattern of Activity During the Year
Upsurge During the First Half of 1968.
Expansion in the Second Half.
Key Sectors in 1968
Retrospect
..
Wages and Prices in 1968
Wages and Compensation
Real Earnings and Unit Labor Costs
Prices in 1968
Balance of Payments in 1968
Goods and Services
Capital Account
Economic Policy for 1969
Anti-Inflationary Strategy
Fiscal Program for 1969
Monetary Policy
Economic Outlook for 1969
Outlook by Sectors
Price Outlook
Outlook for the Balance of Payments
..
.
CHAPTER 2. POLICIES FOR BALANCED EXPANSION
Realizing the Economy's Potential
The Choice of a Target
Potential Output
Economic Gains of the Expansion
•.
The Problem of Economic Fluctuations
.
Short-Run Instability
Automatic Stabilizers and Fiscal Drag
.
The Record of Policy
Strategy for Expansion: 1961 to Mid-1965
Fiscal Problems of Defense and High Employment: 196568
Lessons of the Policy Record
29
34
34
34
36
37
38
39
40
40
41
42
45
45
46
47
48
49
50
52
53
53
54
55
55
56
58
59
61
61
62
64
67
70
70
72
74
74
75
77
2. POLICIES FOR BALANCED EXPANSION—Continued
Formulating Fiscal Policy
The Role of Economic Forecasting
Preparing the Annual Budget
Congressional Procedures .
Adjusting to New Developments
Some Issues of Monetary Policy
The Conduct of Monetary Policy.
Monetary Policy and the Money Supply
Looking Ahead
Page
78
78
80
82
84
85
85
89
93
CHAPTER
CHAPTER 3. PRICE STABILITY IN A HIGH EMPLOYMENT ECONOMY. . .
Prices, Wages, and Employment
The Record in the Sixties
The Task for Policy
Improving Labor and Product Markets
Improving Labor Mobility
Efficient Use of Manpower
Manpower Training Programs.
Competition and Antitrust Policy
Legal Restrictions on Competition
Improving Consumer Information
Regulated Industries
Government Procurement
Agriculture
International Trade and Price Stability
Voluntary Restraint in Prices and Wages
Role of Private Decisions
Standards for Decisions
Application of Standards
Future Role of Cooperation
Conclusion
..
.
CHAPTER 4. T H E INTERNATIONAL ECONOMY
Economic Growth and World Trade
Trade and Trade Barriers
Less Developed Countries
The Bretton Woods System
The Liquidity Problem
Types of Reserves
Special Drawing Rights
The Need for Reserve Growth
The Confidence Problem
Private Shifting Among Currencies
Private Demand for Gold
Shifts Among Official Reserve Assets
Proposals for Improving Reserve Management
The Adjustment Problem
Causes of Disturbances
3°
94
94
96
97
98
99
103
104
106
108
109
Ill
113
115
116
118
118
118
119
120
121
123
.
124
124
126
128
129
130
130
131
133
133
134
135
136
137
138
Page
CHAPTER 4. THE INTERNATIONAL ECONOMY—Continued
The Adjustment Problem—Continued
Internal Adjustments
Measures Directly Affecting International Transactions . .
The Adjustment Problem of the United States
Exchange Rate Adjustments
Present System
Proposals for Exchange Rate Flexibility
Conclusion
CHAPTER 5. COMBATING POVERTY IN A PROSPEROUS ECONOMY
The Extent of Poverty
Definition of Poverty
Poverty Trends
Strategies for Reducing Poverty
Prosperity and the Reduction of Poverty
Effects of Prosperity
Prospects for Further Progress
Income Distribution
Education, Jobs, and Training
Education and Poverty
Hiring Standards
Training and Job Access
Improvements in Income Maintenance
Welfare Programs
Benefits in Kind
Social Insurance Systems
Major Reform
Special Problems of Poverty Pockets
Strategies for Attacking Ghetto Problems
Strategies for Reducing Rural Poverty
Fulfilling the National Commitment
151
151
. 152
153
155
155
156
158
160
161
162
162
.
163
164
165
166
168
170
172
173
176
178
List of Tables and Charts
Tables
1. Gross Saving and Investment in Selected Years of Relatively
High Employment, 1952-68
2. Changes in Various Measures From the National Income and
Product Accounts Since Second Quarter 1967
3. Allocation of Disposable Personal Income in Selected Periods,
1956-68
4. Changes in Compensation, Productivity, Unit Labor Cost, and
Output Price in the Private Economy Since 1947
5. Wage and Benefit Changes in Collective Bargaining Situations,
1963-68
6. United States Balance of Payments, 1963-68
31
138
140
142
145
145
146
149
36
41
43
46
47
50
Tables
7. Measures of Economic Activity During the Current Expansion.
8. Federal Fiscal Actions in T h r e e Periods Since Fourth Q u a r t e r
1960
9. N e t Funds Raised by Nonfinancial Sectors, 1961-68
10. Changes in Employment, 1961 to 1968
11. Changes in Hourly Earnings of Production a n d Nonsupervisory Workers on Private Nonagricultural Payrolls, 1961 to
1968
12. Growth of Gross National Product in Developed a n d Less
Developed Countries, 1950-67
13. Growth of World Exports, 1952-67
14. Poverty a n d Near-Poverty Income Lines, 1967
15. N u m b e r of Poor Households a n d Incidence of Poverty, Selected
Years, 1959-67
16. N u m b e r of Near-Poor Households a n d Incidence of NearPoverty by Age a n d Sex of H e a d of Household, 1959 a n d
1967
17. Selected Major Income Maintenance Programs, Fiscal Year
1969
18. Major Federal Income-in-Kind Programs Substantially Benefiting the Poor, Fiscal Year 1969
Charts
1. Changes in Gross National Product Since 1964
2. Wholesale Prices
3. Consumer Prices
4. U.S. Balance of International Payments
5. Gross National Product, Actual and Potential, and Unemployment Rate
6. Unemployment Rates
7. Selected Interest Rates
8. Price Performance and Unemployment
9. World Trade and Reserves
10. Number of Poor Persons and Incidence of Poverty
11. Taxes and Transfer Payments as Percent of Income (Excluding
Transfers), by Income Class, 1965
Pag e
68
74
87
100
100
124
125
152
157
159
164
167
35
48
49
51
65
69
76
95
132
154
161
CHAPTER 1
Strengthening the Foundation of Prosperity
HE AMERICAN ECONOMY achieved large gains in output and employment in 1968, as it continued to expand through an unprecedented
eighth consecutive year. The value of the Nation's total output of goods
and services—gross national product (GNP)—rose by $71 billion from
1967 to 1968; after adjusting for price increases, the gain amounted to 5 percent. Employment grew by I/2 million persons, and in December the
unemployment rate was down to 3.3 percent, the lowest since the early
1950's. The number of persons below the poverty income line declined by
4 million, the largest such reduction in any year on record. Meanwhile, our
over-all balance of international payments improved markedly.
In part, however, this exuberance was too much of a good thing. The
productive capability and adaptability of the American economic system
were once more demonstrated; but the economy was severely tried by all
of the demands placed upon it. The pressures of excessive demand pushed
up the price level at the unacceptable rate of nearly 4 percent. Imports were
drawn in from abroad at a very rapid pace, easing some domestic supply
shortages but causing a sharp deterioration in the Nation's international
trade surplus. And domestic financial markets came under renewed heavy
pressure, producing sharp increases in interest rates.
The excessive buoyancy reflected, in large part, the extended delay in enacting the 10 percent income tax surcharge which had been proposed by the
President in August 1967. While the fiscal program was pending, restrictive
monetary policy took some of the steam out of the economy. But by the time
the appropriate fiscal restraint went into effect in mid-July, the underlying
forces of expansion had attained great momentum—more than was realized
at the time. As a result, the needed moderation in the pace of advance
developed slowly.
With inflationary pressures still strong, economic policy should continue
to exert restraint in 1969. Total demand must be brought into better balance
with the Nation's productive capacity to permit a slowing of price and cost
increases. But the restrictiveness of policy should be tempered to preserve
our basic prosperity; it should ensure that output continues to grow,
although at a rate somewhat less than the growth of the economy's potential.
The Administration's fiscal program is designed to meet these objectives.
T
33
The remainder of this chapter reviews developments in 1968 in more
detail, sets forth the Administration's fiscal program for 1969, and finally
summarizes the outlook in 1969 for economic activity, prices and wages,
and the balance of payments. The other four chapters of this Report review
some of the lessons of economic policy derived from recent experience and
discuss some of the challenges of the future. The evolving role of fiscal and
monetary policies in the 1960's is discussed in Chapter 2. The challenge of
achieving price stability in a high employment economy is the subject of
Chapter 3. International economic progress and problems are dealt with
in Chapter 4, while Chapter 5 is concerned with the reduction of poverty.
This volume also contains a report on economic planning for the end of hostilities in Vietnam.
ECONOMIC GAINS IN 1968
The record of 1968 reflects both sides of the performance of an overly
buoyant economy: the benefit to most Americans from large gains in real
income and output, and the substantial cost of inflationary pressures.
PRODUCTION AND PRODUCTIVITY
The 5 percent growth of real output achieved in 1968 was impressive in
view of the already high level of resource utilization at the beginning of the
year. But inflationary pressures were accentuated and, as shown in Chart 1,
higher prices accounted for $31 J/i billion of the $71 billion rise in total GNP.
The rise in total real output was accomplished in part by a strong recovery of productivity growth in the private sector over the previous year—
3.3 percent compared with 1.6 percent in 1967. In early 1967, many business firms had maintained high levels of employment in the expectation that
the then emerging slowdown in production would prove temporary. Thus
the diminished pace of the expansion was reflected in a slowing of productivity growth rather than a sharp rise in unemployment. Accordingly, with
the resurgence of economic activity late in 1967 and in 1968, it was possible
to meet some increased demand by fuller use of the existing work force.
EMPLOYMENT AND INCOME
As a result of the expansion, the unemployment rate fell to a 15-year low
of 3.6 percent in 1963 compared with 3.8 percent in both 1966 and 1967,
and the number of unemployed declined by 160,000.
Workers on nonfarm payrolls increased by 2.1 million in 1968. The
largest gains occurred in State and local government payrolls, which increased by nearly 565,000 workers, and in trade and private services, which
together added 950,000 workers. Manufacturing employment rose a relatively moderate 300,000. The Federal Government's civilian work force
remained practically unchanged from 1967, while 100,000 persons were
added to the Armed Forces.
34
Chart 1
Changes in Gross National Product Since 1964
CHANGE IN BILLIONS OF DOLLARS
+20
-20
+40
+60
1964 TO 1965
TOTAL GNP
PERSONAL CONSUMPTION EXPENDITURES
GOVERNMENT PURCHASES
BUSINESS FIXED INVESTMENT
OTHERi/
1965 TO 1966
1966 TO 1967
1967 TO 1968
^RESIDENTIAL STRUCTURES, CHANGE IN BUSINESS INVENTORIES, AND NET
EXPORTS OF GOODS AND SERVICES.
SOURCE: DEPARTMENT OF COMMERCE.
35
+80
With higher employment and more rapid wage increases, total wages and
salaries increased by $40 billion in 1968. A sharp $7 billion rise in transfer
payments, plus gains in dividends, interest, and rental income, added
further to household purchasing power. Thus over-all personal income
registered a large increase of $57 billion over 1967. On an after-tax basis,
and after correcting for price increases, income per capita increased by
3 percent in 1968—well above the average annual increase for the postwar
years as a whole.
Corporate profits also rebounded sharply from their decline in 1967.
Before-tax profits increased by more than $10 billion. The 10 percent
Federal income tax surcharge, enacted in June and made retroactive to
January 1 for corporations, held the after-tax gain to $3 billion. Particularly
large gains were recorded by the manufacturing sector.
THE COMPOSITION OF DEMAND
In contrast to the experience in many other years, the excessive expansion
in 1968 was not attributable to any particular component of expenditures.
Most components advanced, and they added up to a total of too much demand—what has been called a "well-balanced excess."
Investment Sectors
Residential construction outlays rose by $5 5/2 billion in 1968. As shown
in Table 1, the proportion of total GNP accounted for by residential building
TABLE 1.—Gross saving and investment in selected years of relatively high
employment, 1952-68
Percent of gross national product
Source or use of saving
1952
1956
1965
1966
1967
19681
Private sector:
Gross investment
Business fixed investment . .
Residential structures
Change in business inventories
Net foreign investment
Gross saving
Personal saving
Gross business saving
Excess of private saving or investment (—)
14.9
17.1
16.4
16.5
14.7
14.8
9.1
5.0
10.4
10.4
10.9
10.6
10.5
.9
1.1
.4
1.4
.6
2.0
.3
.8
.2
16.2
16.5
16.7
16.9
16.1
5.2
10.2
4.9
11.3
4.1
12.4
4.4
12.3
5.1
11.8
4.7
11.3
.5
-.9
.1
.2
2.2
1.3
-1.1
1.4
-.2
.2
.1
-1.6
-.2
-.6
-1.1
1.2
.3
.2
-1.7
-.7
.6
-.3
-.5
-.4
-.4
-.5
-.1
15.4
5.2
4.0
3.3
3.1
3.5
.9
Government sector:
Federal surplus or deficit (—) .
State and local surplus or deficit (—)
Government surplus or deficit (—)
Statistical discrepancy
1 Preliminary.
2 Less than 0.05 percent.
Sources: Department of Commerce and Council of Economic Advisers.
-.1
recovered notably in 1968, although it remained far below the 4.3 percent
average of the 1961-65 period.
Business fixed investment increased ll/i percent, but was not a strong stimulative force in 1968. Its share of GNP fell slightly from 1967 to 1968, in
contrast to its usual rise in a year of rapid expansion.
Inventory accumulation played a relatively passive role in 1968, at least in
comparison with the very sharp swings that were experienced in late 1966
and early 1967. Inventory-sales ratios were at a fairly normal level throughout much of the year.
The net export balance declined to its lowest level since 1959. Exports
of goods and services rose $5 billion. But imports of goods and services surged
by $7 billion in response to the expansion of domestic demand. The increase
in imports amounted to nearly 10 percent of the increase in GNP—about
twice the normal share of total imports in GNP.
Government
The growth of Federal purchases for national defense slowed substantially.
The $6/ 2 billion rise from 1967 to 1968 was far below the average of $11
billion a year between 1965 and 1967. Nondefense purchases of goods and
services increased by $3 billion.
Purchases of goods and services by State and local governments continued their rapid growth of recent years with a $9 billion increase. These
expenditure increases were heavily concentrated in higher employee compensation payments, reflecting the growth of State and local employment.
Personal Consumption
Expenditures
Consumer expenditures turned out to be an important expansionary force
in the economy in 1968, in contrast to 1967. The over-all rise of $42 billion
(8.6 percent) was marked by a strong $10 billion advance in durable goods
purchases. Automobile sales rebounded from the mild decline of 1967, with
total sales of 9.6 million new cars exceeding the previous 9.3 million record
of 1965. The rate of consumer saving fell to 6.9 percent of disposable personal income from the unusually high 7.4 percent reached in 1967.
ECONOMIC POLICY IN 1968
The buoyancy of public and private demand and the resulting buildup
of inflationary pressures that developed after mid-1967 accentuated the
urgent need for fiscal restraint. However, enactment of such restraint was
long delayed, complicating the management of monetary policy and
enabling inflationary tendencies to become entrenched.
37
FISCAL POLICY
The economic background of fiscal policy in 1968 had its roots in developments in early 1967. Although over-all economic growth was proceeding
only slowly at that time because of an inventory adjustment, it was apparent
that underlying forces of expansion were strong. These were expected to
become more dominant in the second half of the year, once the inventory
adjustment had run its course. Accordingly, the President proposed, in his
Budget Message of January 1967, a temporary 6 percent surcharge on individual and corporate income taxes, to take effect on July 1, 1967.
By the second half of 1967, the prospect that excessive expansion was on
the way became more apparent. Accordingly, in early August, the formal
message requesting prompt enactment of the surcharge—revised to 10 percent—was sent to the Congress. However, the economy was not actually
expanding at an excessive rate during the summer and early autumn, and
the Congress was reluctant to take major action on the basis of a forecast
of acceleration. No action was taken, and the fiscal impact remained
strongly and inappropriately expansionary.
The pace of economic expansion did in fact accelerate, and the President renewed the request for a 10 percent tax surcharge in January 1968.
The evidence of excessive demand, rising prices, deteriorating trade performance, and growing financial pressures at home and abroad became
compelling. An international financial crisis developed in March, and by
mid-May accelerating credit demands had pushed interest rates to record
high levels. Even after a rather general consensus on the need for fiscal
restraint developed, there were further delays in reaching agreement on the
form of restraint. Some legislators were prepared to vote for higher taxes
only if accompanied by cutbacks in Federal spending; others only if a tax
increase would serve as a means of avoiding such cutbacks.
Congressional approval finally came with passage of the Revenue and
Expenditure Control Act of 1968, signed into law by the President on
June 28.
The Act provided for the 10 percent surcharge as requested by the President in January, with effective dates made retroactive to January 1 for
corporations and April 1 for individuals. Since the withholding rate under
the personal income tax was raised on July 15, many individuals will receive
reduced refunds or have to make additional final tax payments early this
year to cover the retroactive portion of the tax.
The Act also established specific limitations on Federal budget outlays
for fiscal year 1969. Certain programs—support for Vietnam operations,
interest on the public debt, veterans benefits and services, and social security
benefits—were exempted from the limitations. Expenditures in the remaining categories were required to be reduced by $6 billion below the
levels contained in the January Budget.
38
As a result of the enactment of this fiscal program, the Federal budget
(as measured in the national income accounts) has shifted from a deficit of
$11 billion in fiscal 1968 to one of only $1 billion (annual rate) in the
second half of calendar 1968. The tax surcharge alone is currently withdrawing about $105/2 billion (annual rate) from the income stream.
The enactment of the surcharge and expenditure cutbacks immediately
strengthened international confidence in the dollar, and caused some relaxation in domestic financial markets. Economic activity continued to expand
too strongly in the second half of 1968, but at a less feverish pace than in the
first half.
MONETARY POLICY AND FINANCIAL DEVELOPMENTS
The Federal Reserve tightened credit in the first half of 1968 when little
progress was made toward passage of the tax bill. In doing so, however, it
attempted to steer a narrow course. There was hope for the enactment of
fiscal restraint and hence good reason to avoid an extremely tight credit
policy. On the other hand, it was necessary for monetary policy to help in
cooling off the feverish economy in the short run and also to be ready to
assume the full burden of restraint if the fiscal program should fail. Within
these limitations, a series of actions did, in combination, achieve significant
restraint.
Two half-point increases brought the Federal Reserve discount rate to a
modern high of 5 5/2 percent by late April. Regulation Q was also changed
in April to raise the maximum allowable interest rates that banks could
pay on time certificates of deposit. Open market operations brought
pressures on bank reserve positions sufficient to slow bank credit growth
to a 6/2 percent annual rate in the first half of the year, compared with an
II/2 percent increase in 1967. In the first half of 1968, total funds raised in
credit and equity markets were 17 percent below the volume of the last half
of 1967. Interest rates in the open market moved sharply upward. By late
May, the rate on 3-month Treasury bills reached 5.90 percent and highgrade corporate bonds commanded more than 7 percent—above the highs
during the 1966 credit crunch.
Interest rates fell for a time after the logjam on the tax bill broke in late
May. The Federal Reserve followed this with some relaxation of its grip on
bank reserve positions in June and July. In mid-August, the discount rate
was reduced to 5*4 percent, largely in technical realignment to lower market
rates.
The initial easing of pressures on the banking system set off widespread
expectations that monetary policy would soon be eased still further. The
resulting increased demand for securities to capture potential capital gains
drove interest rates sharply downward. Meanwhile, the demands for credit
to finance security purchases were added to the already heavy credit
demands from the Treasury and the private sector, with the result that
growth of bank credit accelerated sharply after midyear.
39
Federal Reserve policy continued to accommodate a good part of the
rising demands for credit, but not to the extent of preventing further increases in market interest rates. By early October, most rates had climbed
more than half way back toward their May peaks. Then, in mid-December,
the discount rate was restored to 5 5/2 percent. Toward yearend, the rate on
3-month Treasury bills was up to a new high of about 6.30 percent, a full
percentage point above the level prevailing at the year's start, and most
other market rates were at their highs for the year and for recent times.
PATTERN OF ACTIVITY DURING THE YEAR
The record of expansion during the year reflects substantial adjustments
in the behavior of the various sectors of the economy.
UPSURGE DURING THE FIRST HALF OF 1968
GNP increased by $42 billion (annual rate) between the fourth quarter of
1967 and the second quarter of 1968. As shown in Table 2, that surge was
fueled by an extraordinary increase of $39^4 billion in final sales.
This was in contrast to the last half of 1967, when an important stimulus
had come with a rise in inventory investment from its very low rate earlier
in the year. In the first half of 1968, increases in inventory investment contributed only $2 J/2 billion, much of which reflected a buildup of stocks in
anticipation of a possible strike in the steel industry.
Government expenditures were the most important expansionary force
during the first half of 1968. Federal purchases of goods and services rose
$65/2 billion (annual rate) from the fourth quarter of 1967 to the second
quarter of 1968, reflecting a renewed acceleration in defense spending.
State and local purchases increased more rapidly than usual, rising $5^2
billion over the period. A liberalization of Federal social security benefits
took effect in March and contributed a major part of the $5 billion increase
in transfer payments during the period. The Federal fiscal impact remained
strongly expansionary, even though revenues rose sharply with the booming advance of economic activity.
Most areas of private demand made relatively little contribution to the
expansion. Business fixed investment rose $2 billion, barely keeping pace
with price increases. After its strong advance during 1967, residential construction leveled off, reflecting a tight monetary policy. Net exports declined,
as imports expanded rapidly. Personal consumption expenditures grew
nearly in pace with disposable personal income between the fourth quarter
of 1967 and the second quarter of 1968.
Real GNP expanded at an annual rate of 6yi percent during these two
quarters, far outpacing the rate of growth of about 4 percent in the economy's potential. Unemployment declined from 1967 levels and averaged
3.6 percent of the civilian labor force. In sharp contrast with 1965-66, the
40
vigor of expansion was not concentrated in industrial areas. Indeed, industrial production rose at a 5 / 2 percent annual rate during the first half of
1968, less than the pace of real GNP.
EXPANSION IN THE SECOND HALF
During the final two quarters of 1968, the growth of real GNP was 4 ^
percent, still above the rate of growth of potential although only by a
narrow margin. In current prices, GNP rose $35 billion (Table 2). The
growth in final sales decelerated, and inventory accumulation—after dipping
in the third quarter—ended the year at a rate little different from the peak
attained in the second quarter.
TABLE 2.—Changes in various measures from the national income and product
accounts since second quarter 1967
(Billions of dollars, seasonally adjusted annual rates]
1967 II
•n
10
1967 IV
•ft
10
1967 IV
Item
1968 11
Gross national product..
1968 II
to
1968 IV i
30.8
41.9
34.9
6.0
24.7
2.5
39.4
— 8
35! 7
11.9
2.3
5.8
-1.7
25.7
2.0
1.0
-1.4
18.4
7.2
2.3
1.0
3.5
2.8
6.5
5.6
1.6
5.2
23.6
18.1
11.6
6.4
32.9
26.7
26.2
.6
30.1
16.2
18.8
-2.6
8.2
7.1
2 15.4
13.3
15.4
4.9
2.5
1.1
4.4
2.0
Other expenditures..
3.6
6.8
Surplus or deficit ( — ) _ . .
1.1
2.0
Change in business inventories..
Final sales
Personal consumption expenditures
Business fixed investment
_
Residential structures
Net exports of goods and services
Government purchases of goods and services:
Federal
State and local
Consumer sector:
Personal income
Disposable personal income.
Personal outlays
Personal saving
Federal Government sector:
Receipts
Expenditures.
Purchases of goods and services:
National defense
Other.
1.0
.6
3.3
10.6
1 Preliminary.
2
Includes $3.6 billion of retroactive liability from corporate tax surcharge.
Note.—Detail will not necessarily add to totals because of rounding.
Sources: Department of Commerce and Council of Economic Advisers.
In contrast to the first half of the year, the government sector did not
propel the advance. Federal purchases of goods and services rose only $2
billion, and other Federal expenditures increased $3 billion. Meanwhile,
the 10 percent surcharge on corporate and personal income taxes withdrew
41
over $10 billion (annual rate) from the private income stream. By the
fourth quarter, the Federal budget was essentially in balance.
Both homebuilding and business fixed investment, on the other hand,
picked up steam in the second half and ended the year on a particularly
strong note. Net exports made a modest recovery. Consumer expenditures
advanced $18^2 billion between the second and fourth quarters, much less
rapidly than in the first half of the year.
The unemployment rate fell to a 15-year low of 3.4 percent in the fourth
quarter, with exceptionally low rates for adult men.
KEY SECTORS IN 1968
Two components of demand—consumer expenditures and residential
construction—were subject to special influences in 1968 and therefore require further examination.
Consumer Spending and Saving
Consumer spending was important in determining the pattern of activity
throughout the year. It was particularly stimulative in the third quarter,
jumping $13 billion (annual rate) at a time when the surcharge was first
affecting paychecks. Some delay in the adjustment of consumer spending
patterns to the marked change in the growth of disposable personal income
was expected. A lagged response was apparent, for example, in the behavior
of consumption outlays following the tax reductions of 1964-65. The increase in withheld taxes stemming from the 1968 tax surcharge was expected
to lead to a similar gradual response of consumption. Some decline in
personal saving could be expected to absorb part of the tax for a while.
In fact, saving declined far more than had been anticipated in the third
quarter, falling $7 billion from the second quarter—more than could conceivably be attributed to the $6 billion of additional taxes from the surcharge. But this was immediately followed by an unusually small rise in
consumer spending in the fourth quarter, with a consequent increase in the
saving rate. During the second half of the year the saving rate averaged %
of a percentage point lower than in the first half—nearly twice the decline
that would have been consistent with both an unchanging basic strength of
consumer demand and the anticipated lagged response to the tax increase.
The third quarter surge in consumption continued to have a strong impact
on economic activity through the end of the year as producers stepped up
their rates of production in response to the increases in sales. With production proceeding vigorously, the moderation of consumer spending in the
fourth quarter was translated into a substantial accumulation of inventories
by yearend.
The marked movements of consumer expenditures during 1968 continued the pattern of late 1966 and 1967. The ratios of consumer purchases
42
of various categories of goods and services and of consumer saving to disposable personal income for the past several years are shown in Table 3. During the 1959-66 period, consumer spending behavior maintained a fairly
consistent relationship to disposable personal income. The saving rates in
excess of 7 percent that prevailed in 1967 and the first half of 1968 represented an unusually large fraction of disposable income by comparison with
1959-66, although not with 1956-58. The saving rate has also been subject
to substantial quarterly fluctuations about its recent high level.
TABLE 3.—Allocation of disposable personal income in selected periods, 1956-68
[Percent]
Category
1956-58
average
Disposable personal income
1959-66
average
1968
1967
First
half
Second
halfi
100.0
Saving
13.8
14.2
5.8
7.4
5.6
7.7
6.0
7.8
6.4
7.9
41.7
39.5
39.2
39.0
21.9
19.8
20.0
19.5
19.8
19.4
19.8
19.2
37.0
37.3
37.3
37.8
2.1
Interest paid and transfer payments to foreigners
13.3
34.3
Services
91.0
13.3
23.9
20.1
Food and beverages.
Other nondurables...
100.0
90.2
44.0
Nondurable goods.
100.0
90.1
5.4
7.3
Autos and parts.
Other durables..
100.0
91.9
12.8
Durable goods
100.0
91.1
Personal consumption expenditures..
2.4
2.5
2.4
2.4
5.7
7.4
7.3
6.6
6.9
i Preliminary.
Note.—Detail will not necessarily add to totals because of rounding.
Sources: Department of Commerce and Council of Economic Advisers.
There is no clear explanation for the extra saving in the period from late
1966 to mid-1968. But the high saving did contribute to a sharp buildup in
consumers' holdings of financial assets and to a slowing in the growth of
consumer debt. Together, these developments meant that households had
achieved relatively favorable financial positions, which permitted them to
increase expenditures markedly whenever they chose to do so. Why they
happened to pick the third quarter of 1968 to exercise this option cannot
be adequately explained.
Residential Construction
As was the case in the preceding 2 years, monetary policy again had a significant impact on homebuilding activity in 1968. After rising sharply in the
second half of 1967, outlays for residential construction remained essentially
flat over the first 3 quarters of 1968, despite the fact that household formation and other factors were creating a tremendous underlying demand
43
foi> new houses. Only in the fourth quarter did such outlays show an
appreciable rise.
The factor that limited homebuilding was a curtailment in the availability of mortgage credit. The net flow of funds into mortgages fell by about
5 percent between the fourth quarter of 1967 and the second quarter of 1968.
To some extent this reflected a slowdown of deposit inflows to major mortgage lenders as savers were attracted by the high interest rates available in
the open market. But there was also a marked shift away from mortgage
lending by mutual savings banks, which invested heavily in high-yielding
corporate bonds.
The effects of tight credit on residential construction were, however,
far less severe in 1968 than during the 1966 credit squeeze and were also
less than most observers had expected. Indeed, the number of new housing
units started was at a depressed level in only 2 months—May and June—
and then showed unexpected strength during the second half of the year.
In part, of course, the stronger performance of homebuilding in 1968
reflected the fact that credit tightening early in the year was only shortlived and occurred against a background of continued hope for relief with
the enactment of the tax surcharge. Builders and mortgage lenders thus
tended to stretch a bit to keep operations going.
Steps taken over the past few years to improve the mortgage market also
helped to mitigate the effects of tight credit on homebuilding. As a result of
1966 legislation providing for improved coordination of the administrative
ceilings applicable to interest rates that thrift institutions may pay on time
and savings deposits, the severe competition among the various institutions
for each other's deposits that occurred in 1966 was not repeated in 1968.
Legislation passed in May 1968 suspended the statutory 6 percent interest ceiling on federally insured mortgages until October 1969, replacing
it in the meantime with an administrative ceiling controlled by the Secretary
of Housing and Urban Development. This administrative ceiling was raised
to 6% percent, thereby increasing the availability of these types of mortgages.
The legislation of May 1968 also provided for the appointment of a Commission to reexamine the interest rate ceiling and make recommendations
for a permanent solution to the problem.
There were also two important reforms affecting the operation of the
Federal National Mortgage Association (FNMA) in 1968 that enabled it
to support the mortgage market more effectively than in the past. In May,
FNMA began auctioning commitments to purchase mortgages in the future,
which builders and others could exercise at their option. By the year
end, outstanding commitments under this program totaled $1.2 billion,
bringing FNMA's total net participation in the mortgage market during the
year to a record $4.2 billion.
This increased volume of operations was in part due to the other reform,
provided for in the 1968 Housing Act, which split the old FNMA into two
corporations, one private (still designated FNMA) and the other a new
44
Government enterprise, the Government National Mortgage Association
(GNMA). FNMA, which conducts the auctions mentioned above, has repaid the Government's investment, and its operations have accordingly been
removed from the Federal budget. It is now free of the budgetary constraints
that had sometimes limited the role of the old Government enterprise in the
mortgage market. GNMA has powers—thus far unused—to help private
lenders tap the capital market for additional funds that can flow into
mortgages.
RETROSPECT
In retrospect, 1968 is seen as a year of excessively rapid expansion throughout. Yet, there was a noticeable difference between the pace of advance in the
first half of the year and that in the second half. The growth rate of real
GNP slowed markedly from 6J/2 percent early in the year to 4 percent by
yearend.
Still, a much more pronounced change of pace in activity was expected
as well as desired. As of midyear, many Government and private economists
expected that the advance of GNP in the second half of the year might be
roughly half of the $42 billion gain for the first 2 quarters. The enactment
of the fiscal program was one—but only one—of the elements underlying
that expectation. Most of the slowdown was expected to result from a lessening of demand in the private sector—steel and other inventories and homebuilding.
In point of fact, several elements of private demand showed unanticipated
strength. The sluggishness of consumer buying in the early spring months
proved to be temporary and misleading. Business fixed investment began to
move up sharply from its previous plateau. Homebuilding rebounded very
strongly and promptly following the easing of credit conditions. And, as
noted earlier, the strength of consumer demand in the summer contributed
to a stepup in production and ordering and subsequently to rising inventory
accumulation. All of these elements taken together amounted to an unexpected buoyancy in private demand and production.
While there is no clear way to tell how much the fiscal program moderated
these forces, it is perfectly plausible that in the absence of fiscal restraint
there would have been no deceleration whatsoever in the second half
(unless, of course, the alternative of severe monetary restraint had been
applied).
WAGES AND PRICES IN 1968
As the economy resumed its vigorous advance in the last half of 1967,
inflationary pressures reasserted themselves strongly and continued throughout 1968.
45
323-166 O—69
4
WAGES AND COMPENSATION
Spurred by rising living costs and growing tightness in many labor markets, both union and nonunion wages turned up sharply. Average hourly
earnings of production workers in private nonagricultural establishments
rose 7 percent between December 1967 and December 1968, compared with
5 percent in the preceding 12 months. The hourly wage increases during the
year for construction, manufacturing, and wholesale trade were all of about
the same magnitude, while those in mining and retail trade were somewhat larger.
Average hourly compensation in the private sector, including fringe
benefits and employers' social security contributions, rose 7.4 percent from
1967 to 1968—as compared with 6.1 percent from 1966 to 1967 (Table 4).
TABLE 4.—Changes in compensation, productivity, unit labor cost, and output price
in the private economy since 1947
Percentage change per year
Sector and item
1947 to 1966
1966 to 1967
1967 to 1968 i
Total private economy:
Average hourly compensation: *
Current prices
Constant prices a
Output per man-hour
Unit labor cost
Implicit GNP price deflator.
5.2
3.1
3.5
1.7
2.0
6.1
3.2
1.6
4.4
3.1
7.4
3.3
3.3
3.9
3.6
4.9
2.8
2.9
1.9
2.2
6.0
3.1
1.1
4.8
3.5
7.2
3.2
3.4
3.7
3.6
5.1
3.0
3.2
1.8
2.0
5.3
2.4
.6
4.7
2.6
7.0
30
2.8
4.2
Private nonfarm:
Average hourly compensation: 2
Current prices
Constant prices'
Output per man-hour
Unit labor cost
Implicit GNP price deflator
Manufacturing:
Average hourly compensation: 2
Current prices
Constant prices 3
Output per man-hour
Unit labor cost
Implicit GNP price deflator
* Preliminary.
2 Wages and salaries of all employees and supplements to wages and salaries such as employer contributions for social
insurance and for private pension, health, unemployment, and welfare funds, compensation for injuries, pay of the military reserve, etc. Also includes an estimate of wages, salaries, and supplemental payment part of the income of the
self-employed.
3
Adjusted for changes in the consumer price index.
* Not available.
Note.—Data for each sector relate to all persons.
Sources: Department of Commerce, Department of Labor, and Council of Economic Advisers.
Wage increases negotiated in all important collective bargaining situations covered five million workers—an unusually large number—in 1968.
Multiyear settlements, covering 5,000 or more workers, had a median increase of 6.6 percent a year in wages and benefits weighted over the life of
the contract (Table 5).
In most cases, settlements were heavily "front loaded*'—that is, a disproportionate share of the increase was concentrated in the first year. The
average first-year wage settlement was 7.5 percent, substantially above the
5.6 percent increase in 1967. This front-loading of new contracts may contribute to a substantial acceleration of economy-wide wage increases during
periods of concentrated collective bargaining activity.
Many of the 1968 settlements replaced contracts negotiated in 1965 or
1966, which had yielded very little gain in real hourly earnings because of the
accelerating advance in prices. The unions naturally sought to restore their
relative positions as quickly as possible, and hence insisted on concentrating
a substantial part of the gains under new contracts in the first year.
TABLE 5.—Wage and benefit changes in collective bargaining situations, 1963-68
Median percentage change negotiated or effective during
Type of change
1963
1964
1965
1966
1967
19681
Most important collective bargaining situations, annual rate of
increase over life of contract: *
Wage and benefit changes negotiated during specified
year:3
Equal timing*
Actual timing«
Wage changes negotiated during specified year: 8
Equal timing
Ail important collective bargaining situations:7
Manufacturing
Nonmanufacturing.
Wage adjustment effective during specified year, regardless of date of negotiations: *
All industries
Manufacturing
Nonmanufacturing.
3.3
4.1
4.5
5.2
5.6
6.0
6.6
2.5
3.0
3.3
3.9
5.0
5.1
3.0
3.2
3.8
4.8
5.6
7.5
2.5
3.4
2.0
3.6
4.0
3.7
4.2
5.0
6.4
5.0
7.1
7.5
2.9
2.7
3.4
3.6
4.4
5.5
2.7
3.2
First-year wage adjustment negotiated during specified
year:
All industries
3.5
2.0
3.5
3.4
3.4
3.3
3.8
4.0
4.8
5.0
6.0
1
Based on preliminary data available in early January 1969.
2 Possible increases in wages resulting from cost-of-living escalator adjustments are omitted except for any part of
the escalator increase guaranteed in the contract.
• The 1964 estimate is based on 20 key contracts which affected 2.25 million workers in 11 major industries. The 1965
estimate covers most settlements affecting 10,000 workers or more in all industries excluding construction, services,
finance, and government. Subsequent estimates cover all settlements affecting 5,000 workers or more in all industries
except government.
* Annual rate of increase assuming equal spacing of wage and benefit changes over life of contract.
5
Annual rate of increase taking account of actual effective dates of wage and benefit changes during contract period.
6
The estimates for 1963 to 1965 cover most settlements affecting 10,000 workers or more in all industries excluding construction, services, finance, and government. Subsequent estimates cover all settlements affecting 5,000 workers or more
in all industries except government.
^ All contracts affecting 1,000 or more workers. From 1963 to 1965, construction, services, finance, and government are
excluded. All industries except government are covered in subsequent estimates.
8
Includes changes in wage rates negotiated during specified year, plus increases decided upon in earlier years, costof-living escalator adjustments, and no wage changes.
Source: Department of Labor.
REAL EARNINGS AND UNIT LABOR COSTS
The acceleration of money wages in 1968 was nearly matched by the acceleration of consumer prices so that the increase of 3.3 percent in real hourly
compensation in the private economy was only slightly greater than the
1967 increase of 3.2 percent (Table 4).
47
Output per manhour in the private economy rose 3.3 percent in 1968,
and this helped offset part of the cost to employers of the increase in hourly
compensation. Nevertheless, unit labor costs still rose by 3.9 percent between
1967 and 1968.
PRICES IN 1968
The general price level advanced sharply in 1968. Wholesale prices increased 2.8 percent in the 12 months ended December 1968, compared with
only 0.8 percent during 1967 (Chart 2). Part of the spurt reflected the fact
that farm prices rose 4.4 percent during 1968, reversing their decline during
the 2 preceding years. However, industrial prices also rose on a broad
front, advancing 2.6 percent during 1968 compared with 1.8 percent during
1967.
Chart 2
Wholesale Prices
1957-59=100
120 ~
PROCESSED FOODS AND FEEDS
110 -
V
/••v./
^
/
-A
COMMODITIES
100
A L L COMMODITIES
\
-
\ A
\^
/
/
A
^
/
NX
FARM PRODUCTS
90 t
tii
,,
1963
,
1964
,.
1965
Ml
I i i i i I i i i i i I . . 11 1 1 1 1 . i
1966
1967
I
i,,,,,
1968
SOURCE: DEPARTMENT OF LABOR.
The consumer price index rose at an annual rate of 4.8 percent during
the first 11 months of 1968 (Chart 3). This increase was led by a rise of
6.1 percent in consumer services, including a 7.2 percent jump in the cost
of medical services. But prices of consumer commodities also moved up
strongly. Partly because mortgage interest and homebuying costs rose particularly sharply, the deflator for personal consumption expenditures in the
Chart 3
Consumer Prices
1957-59=100
140
/
s
130 —
SERVICES
y
y
120
^
A L L ITEMS
^
^
FOOD
^ ^
110
^—COMMODITIES LESS FOOD
100
1
1 1 1 1 1 1 1 1 1 1 11 1 1 1 1 1 1 1 i i I i1 i i 1 i i i i i 1 i i i i i 1 i i i i i 1 i i i i i 1 i i i i i 1 i i i i i 1 i i i i i
1963
1964
1965
1966
1967
1968
SOURCE: DEPARTMENT OF LABOR.
GNP—which excludes these elements—increased considerably less rapidly
than the consumer price index. It rose by 3.8 percent during the 4 quarters
of 1968.
The behavior of prices in 1968 represented a further intensification of
the upward pressures that developed late in 1967. After rising 3.3 percent during 1966, consumer prices slowed to a 2^4 percent annual rate
of increase during the first half of 1967, when economic activity moderated.
But, with the resurgence of over-all demand—spurred by fiscal stimulus—
late in 1967, the rate of price increase again accelerated.
BALANCE OF PAYMENTS IN 1968
Although excessive economic growth generated a surge in imports and
a sharp deterioration in the trade surplus in 1968, the overall balance of
payments improved markedly. This primarily reflected a dramatic shift in
the direction of capital flows. In 1967, the U.S. balance of payments as
measured on the liquidity basis registered a deficit of $3.6 billion; the deficit
was reduced to $1.1 billion at an annual rate during the first 3 quarters
of 1968. (Table 6 and Chart 4). For the full year, preliminary estimates
49
TABLE 6.—United States balance of payments, 1963-68
[Billions of dollars]
Type of transaction
Balance on goods and servicesBalance on merchandise trade..
Balance on investment income..
Balance on other services
Remittances and pensions
1963
58
.
5.1
3.3
-2.6
-.9
1968,
first 3
quarters'
1965
84
.
6.6
3.9
-2.2
69
.
4.7
4.2
-2.0
51
.
48
.
2.4
3.6
4.2
-2.7
3.5
4.6
-3.3
.4
4.9
Q
-1.0
-1.0
-1.3
__
1966
1967
1964
-2.9
-1.1
Government grants and capital, net
-3.6
-3.6
-3.4
-3.4
U.S. private capital, net
-4.5
-2.0
-1.5
-.9
-6.6
-2.3
-2.5
-1.8
-3.8
-4.3
-4.2
-5.5
-3.5
.1
-.4
-3.6
.3
-.9
-3.0
-.5
-2.0
13
.
.3
.6
.4
19
.
-.1
1.6
.5
.
3
-.4
.1
.5
42
.
.9
2.4
.9
-.2
-.9
-.3
-.2
34
.
1.0
1.5
.9
-.5
-2.0
-1.6
-1.3
.
3
-3.4
1.9
<5>
.6
-2.7
1*.6
-2.8
.1
.1
.8
2.4
1.3
1.5
2.4
5.4
-1.3
-1.4
-3.6
-1.1
Direct investment
U.S. bank claims
Other U.S. private capital 2.
Foreign private capital, net...
U.S. securities (excluding Treasury issues).
Foreign private liquid capital, net 3
Other foreign private capital*
Errors and omissions
BALANCE ON OFFICIAL RESERVE TRANSACTIONS
BASIS.
Plus: Increases in nonliquid liabilities to foreign monetary
authorities
Less: Foreign private liquid capital, net 3
BALANCE ON LIQUIDITY BASIS..
-4.3
-5.2
-3.3
.4
-2.3
10.4
3.7
5.4
1.3
-.3
1
2
3
4
Average of the first 3 quarters at seasonally adjusted annual rates.
Includes redemptions of foreign securities.
Includes changes in Treasury liabilities to international nonmonetary institutions.
Includes certain Government transactions associated with special transactions.
5
Less than $50 million.
Note.—Detail will not necessarily add to totals because of rounding.
Source: Department of Commerce.
show a liquidity surplus—for the first time since 1957. The balance on the
official reserve transactions basis improved dramatically, achieving a surplus
of $1.9 billion during the first 3 quarters of 1968, partly as a result of a
marked shift in the holdings of liquid dollar assets abroad from foreign
central banks to private investors. Such a shift improves the official settlements measure but does not affect the liquidity balance.
The improvement in the balance of payments can be attributed to the
President's program announced on January 1, 1968; to some special factors
affecting primarily capital flows; and to the continuation of some longer
term trends.
GOODS AND SERVICES
The merchandise trade surplus deteriorated markedly from $3.5 billion
in 1967 to an annual rate of only $0.4 billion during the first 3 quarters of
1968. Imports rose about 22 percent above 1967. Exports, reflecting mainly
the vigorous growth of income abroad, grew by 10 percent.
The U.S. trade balance during 1968 was influenced by strikes in the copper and aluminum industries and a threatened strike in the steel industry,
Chart 4
U.S. Balance of International Payments
BILLIONS OF DOLLARS
50
—
EXPORTS AND IMPORTS OF GOODS AND SERVICES
-
40
EXPORTS
-
30
—
—
^ ^ ^ ^ ^ ^
IMPORTS
—
20
o\
I
I
I
I
I
1964
1962
1960
\
I
1966
1968 J/
10
NET CAPITAL FLOWS
OTHER FOREIGN
CAPITAL
7
U.S. PRIVATE
J
-10
1960
1962
I
I
1964
I
1968 ^
1966
10
BALANCE
OFFICIAL RESERVE
TRANSACTIONS BASIS
s
0
LIQUIDITY BASIS
10
i
i
1960
1
i
1962
1
1
1964
J/FIRST 3 QUARTERS AT SEASONALLY ADJUSTED ANNUAL RATES.
i/SECURITIES OTHER THAN TREASURY ISSUES.
SOURCE: DEPARTMENT OF COMMERCE.
1
1
1966
1
1968^
all of which stimulated metal imports and reduced the trade surplus by
perhaps $600 million.
Nonagricultural goods accounted for the entire growth of merchandise
exports during 1968, with exports to Western Europe and Latin America
expanding especially rapidly. Agricultural exports, the most rapidly growing category between 1960 and 1966, declined rather abruptly in 1967 and
remained depressed in 1968. While this decline was partially the result of
a reduction of sales and donations to less developed countries, it also reflected
a sharp decline in commercial exports to the European Economic Community, greatly influenced by EEC restrictions on agricultural imports.
The service account in the balance of payments improved, reaching
a surplus of $2.0 billion annual rate (during the first 3 quarters of 1968),
as compared to $1.3 billion in 1967 (Table 6). The major gain came in net
income from foreign investments, which continued its upward trend. Some
improvement also occurred in the travel account in 1968, reflecting the
reduced attractiveness of the Canadian exposition.
CAPITAL ACCOUNT
The capital account improved markedly, swinging from a net outflow on
private account of $2.2 billion in 1967 to a net inflow of $5.2 billion in 1968
(first 3 quarters at annual rate). The new balance-of-payments programs
had their major impact on the capital account. Mandatory controls on foreign direct investment, imposed January 1, 1968, greatly stimulated efforts
by American firms to raise money abroad. During the first 9 months of 1968,
$1.6 billion of new U.S. corporate securities were sold abroad to finance
foreign investments, compared with less than $500 million during all of
1967. Firms also borrowed other funds totaling $0.7 billion, about twice the
total for 1967. These borrowings permitted direct investment abroad to increase slightly, apparently proceeding in accordance with original intentions.
Thus the target of $1 billion of balance-of-payments savings from the controls over direct investment was achieved without reducing American participation in the economies of other countries.
Operating under new directives issued by the Federal Reserve Board,
American banks reduced their claims on foreigners by $300 million during
the first 9 months of 1968, compared with an increase of about $500 million
during 1967. The swing of $800 million in bank lending exceeded the
target of $500 million set in the January program.
There were other improvements in the capital account that were not directly related to the balance-of-payments program. By the end of September,
foreigners had already purchased $1.2 billion (net) of American securities
in the open market (in addition to the $1.6 billion of new issues previously
mentioned). In all of 1967, foreign purchases in the market amounted to
only $0.6 billion, as a $450 million liquidation of holdings by the United
Kingdom held down the total. The greater foreign interest in U.S. stocks
and bonds during 1968 can be attributed to rising prices of U.S. equities and
52
high yields on U.S. bonds, as well as to political developments in France and
Czechoslovakia that made European securities seem less attractive. Moreover, long-term forces continued to work, including the basic strength of
the U.S. economy, the growing affluence of other countries, and the shortage of foreign corporate securities.
A major inflow of liquid funds resulted from borrowings by American
banks from their foreign branches. During 1968, these borrowings increased
by $1.8 billion, compared with only $200 million in 1967. The major causes
of this increase were the existence of relatively tight monetary conditions in
the United States and fears about the stability of some European currencies.
American banks also seem to be strengthening their ties to the European
money market, giving them access to additional sources of funds.
The U.S. Government increased its special financing arrangements during
the year. In part, this increase resulted from greater efforts to obtain military
offsets or neutralizations in line with the President's program. Some portion
also resulted from a bilateral agreement with Canada whereby that country
was exempted from the mandatory controls on direct investment.
ECONOMIC POLICY FOR 1969
Although economic expansion is expected to moderate during the first
half of 1969, a continuing policy of restraint is essential to curb inflationary
pressures and to strengthen our international trade performance.
ANTI-INFLATIONARY STRATEGY
Checking inflationary forces that are deeply embedded in the structure
of costs and prices is an extremely difficult and delicate process. One approach would be to adopt a drastically deflationary fiscal and monetary
policy, involving a sharp reduction in Federal expenditures or a further
increase in tax rates reinforced by extreme credit restraint.
Such a policy could surely stop inflation in a reasonable period of time.
But the cost would be intolerable—unemployment would rise substantially,
and the United States could easily experience its first recession in nearly a
decade. As the over-all unemployment rate rose, the rates for the disadvantaged—including nonwhites and teenagers—would rise even more rapidly. With heavy unemployment even among experienced workers, it would
be extremely difficult to sustain recent initiatives to provide training and
jobs for the unskilled and the disadvantaged. The danger of serious social
unrest would be greatly increased. Moreover, the entire economy would
suffer a huge loss of output, at a time when full production of goods and
services is urgently needed to fulfill national goals.
In any case, halting the current wage-price spiral is only the first step in
the longer term task of maintaining reasonable price stability. Once a stable
price performance had been achieved through a drastic policy of deflation, a
decision would be required concerning the next step. If that choice should
53
be to prolong the slack performance of the economy, it would extend inequity and waste for years to come. If, on the other hand, there was a decision to shift to expansionary policy, there is no reason to believe that the
period of deliberate deflation would have contributed to the longer run solution of the problem. Indeed, a rapid recovery to the economy's potential
would probably involve more serious dangers of inflation than would a
steadier movement that remained close to the path of potential output.
In view of the intolerable costs of a drastic deflationary policy, a more
moderate approach is required. The aim should be to slow down the growth
of demand to a rate less than the growth of capacity while consistently
maintaining forward motion.
Once the rate of price increase has moderated, fiscal and monetary policy
can be gradually adjusted toward stronger expansion. How soon that will
prove appropriate cannot be foretold now. Nor can the proper target for
utilization in the longer run be stated with assurance. If fiscal-monetary
policy can succeed in avoiding spurts of expansion such as those experienced
in 1965-66 and again in 1967-68, it should be possible to improve somewhat
upon our recent price performance. But it is doubtful whether acceptable
levels of unemployment and reasonable price stability can both be achieved
without the successful implementation of structural anti-inflationary measures and of voluntary cooperation in wage and price decisions, along lines
suggested in Chapter 3. In any case, it is clear that, for 1969, stabilization policy should be designed to hold the rate of expansion of real output
below 4 percent but to keep it on a distinctly rising path.
FISCAL PROGRAM FOR 1969
The President's Budget is designed to fulfill these objectives for economic
activity in 1969.
Federal expenditures are expected to rise by about $10 billion in 1969
compared with an increase of $19 billion in 1968. Defense purchases are
expected to increase by about $2 billion, while nondefense purchases are
scheduled to rise by about $1 billion. About half of these increases for the
full year are accounted for by a pay increase at midyear for Federal civilian
employees and the Armed Forces. This increase is designed to make Federal
civilian pay scales comparable with those in private industry.
Increases of $3 billion and $4 billion, respectively, are anticipated in Federal grants-in-aid to State and local governments and in domestic transfer
payments. Most of the increases are either required by existing legislation
or designed to help solve problems of highest national priority.
To preserve the needed posture of fiscal restraint in the face of these minimal necessary increases in Federal expenditures, the President is asking the
Congress to extend the 10 percent tax surcharge on personal and corporate
income for 1 year beyond its present expiration date of June 30, 1969. In
addition, the President is requesting a further extension at present levels of
54
the excise taxes on automobiles and telephone service which are now
scheduled to decline on January 1, 1970. With these tax actions, it is estimated that the Federal budget (national income accounts basis) will show
a surplus of about $5 billion during calendar 1969, compared with a deficit
of $5 billion in 1968.
The 10 percent tax surcharge was enacted as a temporary measure in
June 1968 and is to be extended for 1 year as a temporary measure. Indeed,
the President is urging the new Administration and the Congress to give
serious consideration to coupling the extension of the surcharge with authority for the President to remove it entirely or partially, subject to Congressional veto, if warranted by developments in Vietnam, in the domestic
economy, or in Federal outlays.
MONETARY POLICY
Monetary policy should remain flexible in 1969. In the environment
prevailing at the start of the year, it is appropriate that monetary policy
reinforce the effects of fiscal restraint to assure the needed moderation of
pressures on the Nation's resources. The recent increase in the Federal
Reserve discount rate and increased pressures on bank reserve positions are
pursuing that objective. A slowing from the recent rapid growth of bank
credit is appropriate in early 1969.
But with fiscal restraint continuing through fiscal year 1970, monetary
policy may gradually be able to shift to a less restrictive stance than presently
prevails. Flexible and alert responses to a moderation of economic activity
would permit a timely de-escalation of interest rates from their currently
high levels and hence a more adequate flow of funds to savings institutions
and the mortgage market.
A decline from present peak levels of nominal interest rates would be desirable for the long run as well to avoid restricting capital formation and
economic growth in general, and homebuilding in particular. The continuation of the surcharge through fiscal 1970 should permit a gradual movement
toward a more desirable mix of monetary and fiscal policies; with fiscal
policy better adjusted to the needs of economic stabilization, the need for
restrictive monetary policy and relatively high interest rates should gradually
abate.
ECONOMIC OUTLOOK FOR 1969
The fiscal restraint contained in the Revenue and Expenditure Control
Act of 1968 will have its major impact on the economy early in 1969. Assuming the fiscal program outlined above and appropriate monetary policy,
GNP is expected to rise by $60 billion in 1969 from the $861 billion now
estimated for 1968. This projection should not be viewed as an exact estimate, but rather as the midpoint of a range of possible outcomes.
This forecast of an increase of approximately 7 percent in GNP means a
continuation of prosperous conditions and economic expansion, though, as
55
desired, at a considerably more moderate rate than in 1968. The unemployment rate should remain below 4 percent.
The expansion within 1969 is expected to be considerably less rapid than
during 1968, and the increase in GNP from the fourth quarter of 1968 to
the fourth quarter of 1969 should be about 6 percent—smaller than the yearover-year increase. The rise in real output during the four quarters of 1969
should be less than 3 percent while the rate of increase of over-all prices may
be a little more than 3 percent.
The first part of 1969 should see a slowing of economic expansion. Consumer spending should rise moderately, influenced by the continuing impact
of tax withholding, extra final settlements of about $1^4 billion on 1968
taxes, and a $3 billion increase in social security taxes which became effective January 1. Federal Government purchases will change little while State
and local government expenditures are expected to increase at a normal pace.
Inventory investment should retreat from the high rate of the fourth quarter of 1968. On the other hand, a strong rise in business fixed investment is
expected early in 1969, in line with recent surveys of business plans and
new orders for machinery and equipment. All in all, a significant slowing
in the pace of expansion is now likely.
At mid-1969, a substantial pay increase for Federal Government employees is scheduled. Beyond that, only a slight increase in Federal purchases
is anticipated. The tax burden on consumers will also be reduced at
that time as final settlements on 1968 taxes are completed in the first half
of the year, although consumer spending should continue to feel the lagged effects of the final settlements. These fiscal elements, together with a
continuing increase in private investment, are expected to lead to slightly
more rapid economic expansion in the second half of the year.
Thus the year 1969 promises continued prosperity for the American
economy. The slowing of the expansion should provide welcome relief
from the excessive demand pressures of 1968 and offers the prospect of some
deceleration in the upward movement of prices.
OUTLOOK BY SECTORS
A brief survey of the outlook for specific categories of expenditures will
help to clarify the projection of over-all economic activity.
Business Fixed Investment
Private and public investment surveys compiled recently indicate a
substantial rise in business fixed investment in 1969. The Commerce Department-SEC survey reports that businessmen plan to increase their plant
and equipment spending by about 9 percent in the first half of 1969 above
levels prevailing in 1968. Such a sharp increase in investment is already
reflected in orders for durable equipment and in construction contracts.
This marked prospective expansion of investment follows a year when industrial production has reached new peaks and when business cash flows
56
have been at record levels, but when there has been relatively little pressure
on existing industrial capacity. The dimensions of the rise in investment
are still difficult to evaluate in view of uncertainty about the possible impact
of economic developments during the first half of the year and of monetary
policy on business plans later in 1969. For the year as a whole, the increase
in business fixed investment over 1968 is expected to be about $7 or $8
billion.
Inventories
At the end of 1968, ratios of inventories to sales were at normal levels,
both for manufacturing and for retail and wholesale trade. Barring unforeseen changes in economic conditions over the year, inventory investment
in 1969 may show a slight decline from the average rate of 1968.
Homebuilding
Demographic trends and the relatively low level of residential construction in recent years have created a very strong underlying demand for new
homes. Housing starts rose sharply in the second half of 1968, and residential construction activity should advance further early in 1969. Because of
the important role in the housing market of the availability of mortgage
financing, considerable uncertainty attaches to estimates of home construction beyond the next few months. Given the prospective monetary policy
for this year as outlined above, private nonfarm housing starts in 1969
may be expected to fall somewhat below their recent rate of approximately 1.6 million per year. Residential construction expenditures for
the year may rise by approximately 10 percent over the average 1968
level, reflecting a larger number of new housing units and increased outlays per unit. But this would mean only a modest rise from the rate of
activity at the end of 1968.
Government
For the year 1969 an increase of State and local government purchases
of goods and services of about $10 billion can be anticipated in line with
the growing needs for public services and facilities. This estimate assumes
that monetary policy will not significantly curtail expenditures for public
construction projects.
Federal Government purchases are expected to remain at approximately
their present levels during the first half of 1969, in accordance with expenditure restraint applied under the Revenue and Expenditure Control
Act of 1968. However, an increase in Federal Government salaries will
add $2.8 billion at annual rates to Federal Government expenditures beginning in the third quarter of 1969, and the Budget for fiscal 1970 in-
57
eludes other modest increases in purchases. For the calendar year 1969,
Federal purchases of goods and services, including the pay increase, are expected to be approximately $3 billion higher than in 1968.
Consumption
Consumer spending in 1969 will be greatly influenced by the continuing
adjustment of consumers to the changes in their disposable incomes resulting from the pace of advance in private and Government activity and from
changes in their tax obligations.
Consumer spending slowed in the closing months of 1968. Retail sales
have not increased significantly since midsummer and the pace of automobile purchases has moderated.
In the first half of 1969, increased tax burdens will further slow the
growth of disposable personal income, although this may be reflected, in
part, in a renewed decline of the saving rate. Consumer expenditures are thus
expected to grow rather slowly during the first half of 1969. Surveys of consumer buying anticipations tend to confirm this prospect.
Personal disposable income may grow somewhat more rapidly in the second
half of 1969—in part because of the Federal pay increase and the completion by mid-year of final 1968 tax settlements. Thus, consumer spending
may advance more strongly.
For the year as a whole, it is anticipated that disposable personal income
will increase nearly $35 billion and consumer expenditures should increase
approximately the same amount reflecting a small decline in the saving rate.
PRICE OUTLOOK
The excessive rate of price and wage advance during 1968 will inevitably
influence wages, costs, and prices during 1969. Unit labor costs will continue to increase, as will the costs of materials, supplies, and capital equipment. Financial costs are also likely to remain relatively high.
Gradually, however, fiscal restraint coupled with restrictive monetary
policy should moderate the excessive market pressures that prevailed during most of 1968. Present indications point to slightly lower farm prices
during 1969, assuming normal weather conditions. Allowing for a continued increase in the costs of food processing and distribution, food prices
at retail may remain approximately stable.
Wage increases may have somewhat less impact in 1969 than they did in
1968. Second year increases in the union contracts negotiated in 1968 and
the last half of 1967 will generally be less than for the first contract year.
Collective bargaining activity will also be relatively light, since expiring
major contracts up for wage negotiations cover only about half as many
workers as in 1968. And finally, as restraint takes hold more firmly, lessened
market pressures provide a prospect for some moderation in nonunion wages
as well.
58
Wage-Price Policies for 1969
If substantial progress is to be made toward the restoration of price stability
in 1969, restraint in private decisions is essential to complement responsible
fiscal and monetary policies. Intensive consultations involving representatives of business, labor, and Government are required to explore practical
and equitable ways in which such restraint might be achieved. Mutual shortterm sacrifices are needed to protect the great long-term interest of business,
labor, and all Americans in noninflationary prosperity.
It would be unrealistic to expect the full restoration of price stability
in the immediate future. Given the recent history and the outlook for the
cost of living, labor cannot be expected to accept wage increases in 1969
limited to the trend growth of productivity. Nor can businessmen be expected to absorb substantial cost increases without any adjustments in prices.
Nevertheless, the process of price and wage deceleration must begin. In
their own and in the public interest, business and labor should undertake a
pattern of voluntary restraint that will carry the Nation a substantial
distance back toward the goal of price stability in 1969. New wage agreements would move halfway back to the ultimate productivity standard
next year if labor accepted wage settlements that would bring the average
increase in money wage rates a little below 5 percent. Business would display
comparable restraint in pricing if it intensified its efforts to offset rising costs
through greater efficiency and if it absorbed a share of unavoidable increases
in costs through acceptance of lower profit margins.
This could be translated into a general rule that business agree to absorb
increases of up to 1 percent in unit costs and accept as a guide in price decisions a profit target no higher than the average achieved in the years
1967-68. Responsible pricing requires that businessmen focus on margins
before tax and not attempt to pass the temporary corporate tax surcharge on
to consumers. It is also appropriate to ask those who depart from these
standards to bear the obligation of demonstrating that special circumstances render the standards grossly unreasonable.
These standards for price-wage restraint in 1969 were suggested by the
Cabinet Committee on Price Stability in its December 1968 report to the
President.
Combined with responsible fiscal-monetary policy ajid continued efforts
to improve the structure of the economy, acceptance of these standards for
1969 by key private decision-makers would carry the Nation a long way on
the road to price stability.
OUTLOOK FOR THE BALANCE OF PAYMENTS
With the anticipated slowing of economic growth, only a modest increase
in imports is expected in 1969. The special strike situations which adversely
affected trade in 1968 should not be repeated, although new problems of
this kind could arise. Continuation of the rising trend in earnings on foreign
59
investment should be another source of improvement in our current account
position.
U.S. exports should increase in line with the expansion of foreign markets. The restrictive measures taken by France and the United Kingdom
to safeguard their payments positions have reduced our export prospects,
but these are likely to be offset by the German measures in the opposite
direction.
The capital account is unlikely to show improvement, and indeed may
deteriorate. The restraint on bank lending cannot provide another large
swing in net loans. Foreign purchases of U.S. securities can hardly be
expected to continue at present rates. Even more important will be the
state of financial markets at home and abroad. If European monetary conditions remain fairly relaxed relative to those prevailing in the United States,
capital inflows can be expected—even if not on the same scale as in 1968.
In view of the uncertain prospects for the balance of payments, the
measures for controlling capital movements must be maintained for the
present. The Interest Equalization Tax which expires at mid-year must be
continued to assure against a major rise of new foreign security issues in the
United States. Moreover, the program for controlling bank lending and
the direct investment controls should be maintained. Both have been modified to make them more responsive to needs and more equitable. While
further modifications will be possible as the balance of payments improves,
the defenses provided by these programs cannot be lowered without risking
the destabilizing effects of substantial refinancing of previous years' borrowings. Ultimate dismantling of the controls should proceed as soon
as this can be accomplished without impairing the strength of the dollar.
60
Chapter 2
Policies for Balanced Expansion
The Congress hereby declares that it is the continuing policy and
responsibility of the Federal Government to use all practicable
means consistent with its needs and obligations and other essential
considerations of national policy . . . to promote maximum
employment, production, and purchasing power.
OR THE PAST 23 YEARS, these forthright marching orders in the
Employment Act of .1946 have firmly committed the Federal Government
to an active role in promoting high standards of over-all economic performance. Federal fiscal and monetary policies have contributed to a much
improved record of stability and growth in the U.S. economy throughout the
postwar era.
In particular, during the past 8 years, national policy has been designed
not merely to counter cyclical fluctuations but to promote steady expansion
of economic activity in pace with productive potential. While fiscal and
monetary policies have not always been appropriate to the needs of the day,
their general success in fulfilling the lofty promises of the Employment Act is
clearly demonstrated by the unparalleled prosperity achieved during the
Kennedy and Johnson Administrations. Eight consecutive years of economic expansion, the longest and largest sustained advance in the annals of
U.S. history, have dispelled the doubts that prevailed in the late 1950's about
the vitality of the American economic system.
The lessons of this experience are worth reviewing. Such a review, together
with some suggestions for improvements in the formulation and implementation of stabilization policies, is the subject of this chapter.
F
REALIZING THE ECONOMY'S POTENTIAL
How much the Nation's economy can produce—its supply capability—
depends on the quantity and quality of its productive resources, including
manpower, plant and equipment, and natural resources. The economy's
aggregate demand is the total of spending for final output by all groups—
consumers, businesses, government, and foreign buyers. When aggregate demand matches supply capability, resources are fully utilized and production
equals the economy's potential. If aggregate demand should fall short of supply capability, part of the output that the economy is capable of turning out
6i
323-166 0—69——5
would not be produced, and some resources would be wasted in idleness. On
the other hand, excessive demand—too much spending in relation to potential output—would generate inflationary pressures on prices and costs.
The vbasic task of fiscal and monetary policies is to help ensure a match
between demand and productive potential. These measures operate primarily by affecting the demand side of the balance. Government purchases
of goods and services are directly a part of total demand; increases or
decreases in such purchases change total spending in the same direction.
In addition, other government expenditures indirectly influence total demand through their impact on private incomes. Social security benefits, for
example, are "transfer payments" which add to the purchasing power of
individuals, and thus encourage additional private spending, especially for
consumer goods and services.
Taxes, on the other hand, reduce the ability and willingness of families
and business firms to spend, by drawing purchasing power out of private
hands. By raising (or lowering) tax rates, the Federal Government can hold
down (or add to) the flow of private spending.
Monetary policies affect private spending primarily by changing the cost
and availability of funds required to finance certain types of expenditures.
If borrowing becomes expensive and difficult, expenditures for new homes,
business machinery, and other things may be discouraged or postponed.
The economy's potential output is continually expanding as a result
of the growth of the labor force and increases in productivity. Economic
policy must therefore aim at a moving target—helping demand to grow in
pace so that an appropriate balance with potential is maintained. If demand
does not expand or if it grows only sluggishly, men and machines become
unemployed.
THE CHOICE OF A TARGET
Economic potential or capacity is not an absolute technical ceiling on
output. It allows for some margin of unused human and physical resources.
Even in the most extreme boom, there are always some people unemployed,
some who could be attracted into the labor force, some who would be willing to "moonlight" or work overtime. Similarly, there are always some
plants that could be operated more intensively or for longer hours. To operate
the economy at its utmost technical capacity would require demands far in
excess of supply in most markets, with resulting rampant inflation.
The relevant concept of capacity, therefore, must allow for some
margin of idle resources. The choice of a specific margin involves an
appraisal of the behavior of prices and costs in a high-employment economy. But this appraisal involves more than a technical evaluation. If potential output is to be viewed as a target for policy, the choice of the ideal
level of utilization is a social judgment that requires a balancing of national
goals of high employment and reasonable price stability.
62
Balances of this sort are never simple. Both unemployment and inflation
involve social and individual costs. The severe economic burden
borne by those who have no jobs is obvious. At the bottom of the
1957-58 recession, there were more than five million workers out of jobs; and
during 1958 more than 14 million workers experienced one or more spells
of unemployment. Still others were forced to accept part-time employment or were relegated to jobs beneath their capacity. Some, in resignation,
abandoned the search for jobs. The loss of income was tremendous. The
costs in frustration, despair, and bitterness cannot be measured.
Some of the costs of unemployment linger on because skills and supplies
of labor are impaired. When over-all unemployment is excessive, employers
have little incentive to provide job training programs for the unskilled or
to upgrade workers to better paying jobs. Labor unions become increasingly
concerned about the job security of existing members and often take measures that limit the supply of available labor for the longer run.
Although the burden of a slack economy falls most heavily on the unemployed, the loss of production associated with underutilized resources imposes serious costs on nearly all groups. The incomes lost by the unemployed
represent far less than half of the total shortfall of output and income. A slack
economy sharply reduces the profits of large and small businesses and cuts
government tax revenues. Moreover, part of the burden falls on future
generations, because underutilization of capacity weakens investment incentives, slowing the rate of capital accumulation and limiting future productivity gains.
It is difficult to balance the costs of inflation against those of an absolute
loss of output and employment, because they are quantitatively and
qualitatively different. Inflation has highly arbitrary and inequitable effects
on the distribution of income and wealth. It benefits debtors at the expense of
creditors; it hurts persons, such as some pensioners, whose incomes and asset
values are fixed in money terms, and benefits those whose incomes and asset
values increase more than in proportion to the over-all rise in prices. Since
the impact of inflation on the welfare of an individual depends on the way
in which both his income and the value of his wealth respond to the change
in prices, its effects on broad classes of the population cannot be easily characterized. But there are many persons, in nearly all walks of life, who
experience significant losses as a result of inflation. In general, financially
sophisticated persons, who foresee the consequences of rising prices, can take
steps to protect themselves, while the less sophisticated may lose.
There is also a danger that inflation can set in motion speculative behavior that will cause further acceleration of price increases, with serious
consequences for economic and social stability. There are even extreme examples in history of the breakdown of financial and economic systems as a result
of galloping inflation.
Finally, inflation may have adverse consequences for our balance of
payments. If prices rise more rapidly in the United States than in other
countries, our competitive position in world markets can be seriously
undermined.
As a collective social decision, the choice of an employment objective can
and should be the subject of continuous reexamination. Chapter 3 suggests a
number of structural measures that can help to lessen the conflict between
high employment and price stability. When combined with an improved
performance of fiscal and monetary policy along lines discussed in this
chapter, these measures may make it possible to achieve progressively lower
rates of unemployment with reasonable price stability.
POTENTIAL OUTPUT
In light of the considerations discussed above, a 4-percent unemployment
rate was established as an "interim" target for national policy early in
the Kennedy Administration. In each of its last seven Annual Reports, the
Council of Economic Advisers has based its estimates of potential output
on a 4-percent rate of unemployment. This Report continues to make use
of this definition.
The resulting estimated path of potential output for the period 1955 to
1968, together with the path of actual gross national product (GNP), is
shown in Chart 5. Actual GNP was approximately equal to potential in
1955, but fell gradually below potential in the following years. The gap
widened sharply in the 1957-58 recession, it failed to close fully in the
ensuing expansion, and it widened again in the recession of 1960-61. In the
first quarter of 1961, the gap amounted to about $60 billion (in 1968 prices),
and the unemployment rate was 6.8 percent.
From the first quarter of 1961 until the end of 1965, when the unemployment rate reached 4 percent, actual output was consistently below potential.
But actual output grew more rapidly than potential, catching up and finally
closing the gap. Since then, actual output has exceeded the calculated potential most of the time, as the unemployment rate has been below 4 percent.
It is estimated that potential output grew about 3 / 2 percent a year from
the mid-1950's to the early 1960's. After that, its growth appears to have
speeded up gradually; for the last few years, it is estimated at 4 percent
a year.
Growth of potential output reflects the combined effects of expansion of
available man-hours of labor and rising output per man-hour.
Available Man-Hours
Sustained growth of the labor force has resulted in a substantial rise in
potentially available man-hours despite a gradually declining trend in
average hours of work. Over the long run, the labor force has increased
roughly in line with the working-age population (16 years old and over).
This tendency has continued in the 1960's. The rising participation of
women in the labor force has been roughly offset by the effects of a shift
e4
Chart 5
Gross National Product, Actual and Potential,
and Unemployment Rate
BILLIONS OF DOLLARS (ratio scale)*
700
650
GROSS NATIONAL PRODUCT
IN 1958 PRICES
-
600
yS
POTENTIAL.!/
550
y S
/
—
\^^^ y^
—
GAP
yS
500
S^
/
/
\
/ * " ^ ^ /
^
-
ATA
CU L
/
450
-
1
400
1
1
1956
1
1958
1
1
1
1960
1
1962
1
1
1964
1
1
1966
1
1968
PERCENT
PERCENT
[]
12
GNP GAP AS PERCENT OF POTENTIAL (Left scale)
•—• UNEMPLOYMENT RATE2/(Right scale)
-6
J
L
1956
J
1958
L
1960
J
1962
J
L
1964
I
1966
I
I
1968
•SEASONALLY ADJUSTED ANNUAL RATES.
-I/TREND LINE OF 3'2% THROUGH MIDDLE OF 1955 TO 1962 IV, L\% FROM 1962 IV TO 1965 IV, AND 4%
FROM 1965 IV TO 1968 IV.
I/UNEMPLOYMENT AS PERCENT OF CIVILIAN LABOR FORCE; SEASONALLY ADJUSTED,
SOURCES: DEPARTMENT OF COMMERCE, DEPARTMENT OF LABOR, AND COUNCIL OF ECONOMIC ADVISERS.
I 0
in the composition of the working-age population toward teenagers and older
people, who have relatively low participation rates.
Average hours worked per employed person have declined slowly over
the long run, reflecting the secular trend toward more holidays, longer
vacations, shortening of the workweek, and increasing participation of
people who want to work only part time.
Growth of the potential labor force has accelerated from 1*4 percent a
year in the early 19605s to a present rate of about 1% percent—reflecting the
upsurge in births immediately after World War II. This has been partially
offset by the secular decline in hours worked of about l/± of 1 percent a year. The net result has been an acceleration of the growth of available man-hours from 1 to 11/2 percent a year over the period.
Productivity
Many factors contribute to growth in output per man-hour—the productivity of labor. These include increases in the stock of productive capital
and improvements in its quality; better educated, better trained, and more
experienced labor; and advances in technology, production methods, and
management techniques.
Since 1950, output per man-hour in the private economy has expanded
at an average annual rate a little above 3 percent. For the entire economy,
the calculated trend is somewhat lower, because improvements in the efficiency of Government workers are not measured statistically and are arbitrarily taken at zero. Thus the trend rate of increase in aggregate productivity—
private and public—has been about 2*/2 percent a year. When added to the
growth of available man-hours, this results in the 3 ]/2 percent annual growth
of potential output for the late 1950's and the 4 percent current growth rate.
Actual and Potential GNP
Over the entire period from the recession trough in the first quarter of
1961 to the fourth quarter of 1968, actual GNP rose by $288 billion (in 1968
prices), reflecting the combined result of keeping up with the growth of potential GNP and of closing the gap. Potential GNP rose by $216 billion, an
increase of 33 percent. Thus the Nation is presently earning a huge additional bonus of $72 billion a year in output as a result of having eliminated
a great waste of idle resources.
The unemployment rate in the first quarter of 1961 stood at 6.8 percent.
At current levels of the labor force, the reduction of this rate to the 3.4 percent that prevailed in the fourth quarter of 1968—below the 4 percent rate
that is used to define potential output—represents a gain in employment of
2.7 million. On the basis of current average productivity, this number of
workers can be credited with a $31 billion contribution to output (annual
rate).
66
However, the reduction of 3.4 percentage points in the unemployment
rate accounts directly for only a portion of the gain in output associated
with the closing of the gap. There were four other important factors
involved:
1. In a slack economy, firms are often reluctant to lay off certain types of
workers, particularly foremen, semi-professionals, and the highly skilled.
The result is considerable on-the-job underemployment which depresses
measured labor productivity. As the economy moves back toward potential,
productivity increases more rapidly than the long-term trend. Since early
1961, output per man-hour has risen at an average annual rate of 3 percent,
l
/i of a percentage point more than trend.
2. Labor force participation has risen since 1961 as people who had not
been looking for work responded to the greater availability of job
opportunities.
3. The increased pace of economic activity slowed the secular decline in
the length of the workweek.
4. The proportion of the labor force reporting involuntary part-time
employment for economic reasons declined from 4.4 percent in early 1961
to 2.1 percent in the fourth quarter of 1968.
Together, these four factors contributed an additional $41 billion to the
output gain associated with the reduction of the unemployment rate.
The $72 billion of extra GNP resulting from reducing the unemployment
rate amounts to about 11 percent of potential output at the start of the
period—that is, there was about a 3 percentage point bonus of annual production for each 1 percentage point reduction in the unemployment rate.
ECONOMIC GAINS OF THE EXPANSION
The chief over-all measures of the progress of the American economy
during the past 8 years are presented in Table 7. The benefits of economic
expansion have permeated nearly every corner of the economy and every
aspect of our national life. From the recession trough in early 1961 to the
end of 1968, the expansion of output created more than 10^4 million jobs.
This was enough to provide work for the 8J/2 million net increase in the labor
force while at the same time reducing the pool of unemployed workers by
more than two million.
Living standards have substantially increased. On an after-tax basis and
after adjusting for price increases, total disposable personal income per
capita—the purchasing power of households—has risen by 33 percent since early 1961. Personal consumption expenditures per person have
risen in step.
Meanwhile, net financial assets of households—the excess of their financial
assets over their debts—have grown from $700 billion at the end of 1960
to an estimated $1,350 billion at the end of 1968.
67
TABLE 7.—Measures of economic activity during thecurrent
Percentage change1
Amount
Series
expansion
Unit or base
Per year
1961 1
1968 IV i
482.6
719.1
49.0
5.3
316.2
44.9
20.9
97.6
454.8
79.4
24.0
151.0
43.8
76.8
14.8
54.7
4.8
7.6
52.2
45.4
79.4
71.6
52.1
57.7
5.6
6.1
1957-59=100
103.7
167.3
61.3
6.4
Billions of dollars 3..
do
Dollars, 1958 prices3.
354.8
24.4
1,871
602.5
4 51.2
2,483
69.8
109.8
32.7
10.4
3.7
65.7
53.5
76.4
68.9
16.3
28.8
Total
Production:
Gross national product2
Personal consumption expenditures
Business fixed investment
Residential structures
Government purchases
Federal. .
.
State and local
Industrial production
Billions of dollars,
1958 prices.3
do
do.
. do-
do
do.
_do
1.8
5.8
Income:
Disposable personal income
Corporate profits after tax
Per capita disposable personal income
7.1
Employment:
Civilian employment
Nonagricultural payroll employment...
Millions of persons
do
2.0
3.3
1 Preliminary.
2 Total includes change in business inventories and net exports of goods and services not shown separately.
3 Annual rates.
* 1968 IV not available; 1968 III used.
Note.—All data are seasonally adjusted.
Sources: Department of Commerce, Department of Labor, and Council of Economic Advisers.
Corporate profits have more than doubled during the past 8 years, both
before and after taxes. In addition to permitting sharply increased dividend
payments to stockholders, these rising profits have provided the financing
for a wholesale expansion and modernization of the Nation's productive
capacity. Indeed, business has increased its real stock of capital goods by
more than 40 percent since the end of 1960 and has progressively reduced
the average age of existing capital.
The decline in the over-all unemployment rate since early 1961 has been
accompanied by equally impressive gains by specific categories of the labor
force, as shown in Chart 6. In particular, the unemployment rate for white
adult males had fallen to 1.8 percent by the fourth quarter of 1968, a level
last achieved in 1953. For nonwhite adult males the decline in unemployment has been especially dramatic—from an intolerable 11.6 percent
rate in early 1961 to 3.9 percent in late 1968. This represents a significant narrowing of the differential between white and nonwhite unemployment rates for men, from 6.4 percentage points at the beginning of the
period to about 2 percentage points by the fourth quarter of 1968. On
the other hand, there has been little progress in reducing the unemployment
rates of teenagers, especially nonwhites.
The progressive tightening of the over-all labor market during this period
has made a substantial contribution to the elimination of employment
barriers based on race and sex. While these are significant gains, the unemployment rates for some groups of workers still remain appallingly high. As Chapters 3 and 5 make clear, additional efforts are needed to
68
Chart 6
Unemployment Rates
PERCENT (Seasonally adjusted)!/
10
20
30
10
20
30
A L L CIVILIAN WORKERS
NONWH1TE MEN
WHITE WOMEN
NONWHITE WOMEN
WHITE TEENAGERS
NONWHITE TEENAGERS
I/PERCENT OF CIVILIAN LABOR FORCE IN EACH GROUP WHO ARE UNEMPLOYED,
SOURCE: DEPARTMENT OF LABOR.
assist such workers, who often suffer from such disadvantages as inadequate
training and job discrimination.
The strong advance in the economy has also permitted rapid progress
in many social fields. As discussed more fully in Chapter 5, the number of Americans in poverty declined by 18 million during the past 8
years. Rates of infant and maternal mortality have been reduced, school enrollment and school completion rates have been raised, and millions of additional young people have been able to attend college.
Many of these advances would have been impossible to achieve if rising
tax revenues had not been generated by a vigorously expanding economy.
Federal revenues expanded from $92/2 billion in fiscal 1960 to an estimated
$186 billion in fiscal 1969, while State and local government revenues
more than doubled. School construction, urban development, low-income
housing, and many other programs at all levels of government have expanded correspondingly.
THE PROBLEM OF ECONOMIC FLUCTUATIONS
There is nothing inherent in the U.S. economy to ensure that total
demand will grow consistently in pace with the economy's productive potential. The sum total of millions of decentralized spending decisions
by households, businesses, and governments at all levels will not automatically
and necessarily match potential output.
The historical record is marked and marred by a pattern of fluctuations
in which the economy often took two steps forward and then one step back.
According to the National Bureau of Economic Research, the United States
suffered 27 business-cycle contractions between 1854 and 1961, an average of
one every 4 years. At other times, especially in periods of active hostilities,
sharp surges in demand have strained the economy's potential, generating
inflationary pressures.
SHORT-RUN INSTABILITY
All of the elements of demand have at times been sources of economic fluctuations. In the private sector, variations in the strength of demand have
most often been concentrated in investment—inventory accumulation, business outlays for fixed capital, and residential construction expenditures.
Elements of Demand
Inventory stocks serve primarily as a buffer to ensure a smooth and
efficient flow of material supplies and production and to guard against
unforeseen increases in sales. Once inventory stock has been built up
to a level adequate to cover a few months' production or sales, further
accumulation is necessary only insofar as increases in sales are anticipated.
Thus inventory investment can be sustained only by a steady expansion
of sales.
70
Even relatively small variations in the rate of growth of sales can have
sizable effects on inventory investment. An unexpected slowdown in demand,
for example, will initially leave unsold goods on the shelves. Businessmen
will wish to work off these excess inventories, and if they expect sales to
continue at a slower pace, they will reduce their desired levels of future
inventories. Cutbacks in production will then follow. As illustrated by the
$17j/2 billion drop in the annual rate of inventory accumulation in early
1967, such fluctuations can be a major source of instability.
Businessmen invest in new plant and equipment to increase and modernize
their productive capacity. The rate of current capacity utilization, anticipated growth in demand, corporate cash flow, relative costs of capital and
labor, and borrowing costs all influence investment decisions. Responses to changes in these factors are neither smooth nor readily predictable; and because of the long leadtimes generally involved in the production of capital goods, such responses may be spread out over a considerable
period of time. But fluctuations in capital spending have often been an important source of instability. For example, real investment (constant prices)
rose by 42 percent between 1963 and 1966, contributing to a strong expansion
of aggregate demand, but then leveled out in 1967.
The third component of investment, homebuilding, is dependent upon
family formation and income, with the availability of mortgage funds often
acting as a major constraint, particularly in the short run. Because credit
conditions generally tighten when the economy is expanding rapidly and ease
when growth slows down, residential construction has frequently moved
opposite to the path of over-all economic activity, contracting when the
rest of the economy has been booming.
Consumer outlays normally follow the path of household incomes fairly
closely. But such spending has also occasionally been an independent source
of economic instability. Because consumption accounts for more than 60
percent of GNP, relatively small shifts in consumer demand have large impacts. The increase of 1 percentage point in the personal saving rate that
occurred between 1966 and 1967, for example, directly reduced consumer
expenditures by more than $5 billion. Fluctuations are particularly pronounced in consumer purchases of automobiles and other durable goods.
The volatility of expenditures that makes for economic instability is by no
means confined to private demand. Sudden changes in Federal spending
have, on occasion, seriously disrupted the stability of the economy. Indeed,
the rapid expansion of defense expenditures early in the Korean war, the
rapid decline in 1953-54, and the upsurge of outlays for Vietnam in 196567 challenged economic policy as much as any change in the strength of
private demand during the past 20 years.
Multiplier Process
An autonomous increase in demand and production in any sector can
be expected to work through the economy by raising disposable income
71
and hence consumer expenditures, by encouraging greater inventory accumulation, and by creating incentives for additional investment in plant and
equipment. This cumulative expansion is known as the "multiplier process."
The results of this multiplier process are affected by the amount of unused
resources available in the economy. At times of high unemployment and
extensive unutilized capacity, an initial stimulus in demand is likely to be
reflected primarily in a rise in real output with very little additional pressure
on prices. But in an economy already operating at or above potential, where
additional resources are not readily available, the main result may be upward pressure on prices with relatively little gain in real output.
Developments in financial markets may influence the magnitude of the
multiplier. Increases in demands for goods and services will tend to enlarge
credit demands. Unless monetary policy permits supplies of funds to expand
correspondingly, interest rates will rise and credit will become less readily
available. In that event, some offsetting reduction is likely to take place in
residential construction and other credit-sensitive expenditures. Generally
this will be a partial offset, varying according to how much the supply of
credit is permitted to expand.
AUTOMATIC STABILIZERS AND FISCAL DRAG
The potential sources of instability discussed above produced four recessions between 1948 and 1961. By prewar standards, these recessions were
all relatively short and mild, though nevertheless costly. They were limited
in intensity and duration by several elements built into the fiscal system
which serve to moderate economic instability in an automatic and passive
fashion. These so-called "automatic fiscal stabilizers" operate to bolster
income flows to households and business firms in periods of declining output
and, conversely, to slow down the growth of income in periods of expansion.
Almost every tax—including State and local taxes—responds in some
degree to changes in economic activity. Federal personal income tax collections are particularly responsive to such changes. They are the most
important automatic fiscal stabilizer, cushioning take-home pay against
fluctuations in the before-tax incomes of individuals. Another important
stabilizer is the automatic expansion of unemployment compensation benefits when unemployment increases. The corporate income tax serves to
reduce fluctuations in after-tax profits and hence in business investment
outlays and dividend payments.
By reducing the size of secondary effects on consumer and business outlays, these stabilizers reduce the severity of economic fluctuations. With the
present tax system and schedules of unemployment compensation benefits,
a decline in GNP automatically produces a reduction in government receipts and an increase in transfer payments. This limits the decline in private
after-tax income—disposable personal income and retained corporate
profits—to about 65 cents for each $1 of reduction in GNP.
72
During the postwar period, the automatic fiscal stabilizers have been a
major factor in reducing economic instability. They go to work at once
and avoid the delays inherent in discretionary action. But valuable as these
automatic stabilizers are, they work only to limit—not prevent—swings in
economic activity. For example, they become operative in a recession only
after the decline has begun and cannot, by themselves, generate a recovery.
If the factors causing a downturn are strong and persistent, automatic stabilizers may not be powerful enough to prevent a long and severe recession.
The automatic stabilizers also operate without regard to the over-all level
of economic activity. If the economy has fallen substantially below the path
of potential output, the return to that path is made more difficult by the
retarding effects of automatic fiscal stabilizers. The existence of the automatic
stabilizers in such a situation means that a larger amount of fiscal or monetary stimulus—increased expenditures, reduced tax rates, or easing of credit
conditions—will be required to achieve the needed increase in aggregate
demand.
In addition, automatic stabilizers work in a fashion that may inhibit the
long-run expansion of demand. As the economy moves along the potential
output path with reasonably stable prices, the Federal tax system generates
an increase in revenues of about 6 percent a year. Unless this revenue growth
is offset by reductions in taxes or by increases in expenditures, it acts as a
"fiscal drag" by siphoning off income. Actions by the private sector can
conceivably offset this effect if businesses increase investment expenditures
faster than the growth of internal funds, or if households reduce their rate
of saving. But under normal conditions, needed expansion may be prevented.
In interpreting the economic impact of fiscal policy, it is essential to distinguish between the automatic changes in revenues and expenditures resulting from the operation of the automatic stabilizers, on the one hand, and
discretionary changes brought about by changes in tax rates and expenditure
programs, on the other. In order to measure the impact of discretionary fiscal
policy, it is useful to prepare estimates of revenues and expenditures at a
given—or "standardized"—level of income. When the difference between
revenues and expenditures is estimated at the level of potential output, the
result is sometimes referred to as the "full employment surplus."
The full employment surplus was a particularly enlightening measure of
fiscal policy in the early 1960's when the economy was far below its potential.
Actual Federal budgets were then in deficit. But after taking account of the
large shortfall in tax revenues associated with the gap between potential and
actual output, there was a large full employment surplus. It meant that the
economy could realize its potential only if private investment far exceeded
private saving. By that standard, discretionary fiscal policy was highly
restrictive.
The vigorous and unbroken expansion of the last 8 years is in dramatic
contrast to the 30-month average duration of previous expansions. No longer
73
THE RECORD OF POLICY
is the performance of the American economy generally interpreted in terms
of stages of the business cycle. No longer do we consider periodic recessions
once every 3 or 4 years an inevitable fact of life.
The forces making for economic fluctuations have been contained through
the active use of fiscal and monetary policies to sustain expansion. The
record of these policy actions is briefly surveyed in this section. A detailed
review of the objectives and effects of monetary and fiscal actions from 1961
through 1967 was presented in last year's Annual Report. The discussion
below summarizes some particularly pertinent aspects of the magnitude and
scope of these actions. Subsequent sections discuss some of the problems of
economic diagnosis and policy formulation in light of experience.
STRATEGY FOR EXPANSION: 1961 TO MID-1965
A series of deliberately stimulative fiscal measures was undertaken from
1961 to mid-1965 to bring the economy up to full potential. The net magnitude of these actions is summarized in Table 8. The $37^4 billion total
of expansionary actions—expenditure increases and net tax reductions—
more than offset the $30yi billion estimated normal growth of revenues.
Early actions on the expenditure side included an acceleration of a
scheduled increase in social secu-rity benefits in 1961, liberalization of public
assistance payments, and a step-up in defense purchases as part of a general
TABLE 8.—Federal fiscal actions in three periods since fourth quarter 1960
[Billions of dollars, seasonally adjusted annual rates]
1960 IV
to
1965 11
Item
Federal expenditure increases2
1965 11
to
1967 IV
1967 IV
to
1968 IV i
25.6
48.9
18.2
Defense purchases.
Other purchases
OASDHI3 benefitsAll other2 4
__.
3.4
7.4
5.0
9.8
25.4
2.8
10.0
10.7
5.4
2.6
5.2
5.0
Federal tax reductions 5_.
12.0
-6.0
5.5
Corporate
Personal
OASDHI s payroll taxes.
Indirect business
8.5
-3.0
-3.5
-7.3
-2.2
1.0
Total expansionary actions8
37.6
Normal revenue growth at full employment-
30.5
Change in full employment surplus *
-7.0
1 Preliminary.
2
Includes adjustment in unemployment insurance benefits for change in unemployment rate.
Old-age, survivors, disability, and hospital and related insurance (OASDHI).
« Consists of transfers other than OASDHI, grants, interest, and subsidies.
5
Minus sign indicates an increase in tax.
6
Sum of expenditure increases and tax reductions.
7
Normal revenue growth minus expansionary actions.
Note.—Detail will not necessarily add to totals because of rounding.
Sources: Department of Commerce and Council of Economic Advisers.
3
-8.5
2.5
-13.0
74
42.9
5.0
27.0
14.0
-16.0
9.0
realignment of our military forces. On the revenue side, stimulus to private
investment was provided by a revision of depreciation guidelines and enactment of an investment tax credit of 7 percent on purchases of machinery
and equipment in 1962. These measures were partially offset by increases in
social security taxes in 1962 and 1963.
The net stimulus from these actions worked in the right direction, but
was inadequate to the major task of reaching potential output. In the middle
of 1962, business investment demand proved disappointingly weak, and the
pace of economic expansion slowed. In the absence of Congressional action
on President Kennedy's tax reduction program in 1963, the budget again
moved toward an unduly restrictive position.
Tax reduction finally became a reality in the Revenue Act of 1964, which
was President Johnson's first major legislative victory. This tax cut was
unprecedented in many respects. When fully effective in 1965, it added more
than $11 billion to private purchasing power—the largest stimulative fiscal
action ever undertaken in peacetime. It was enacted while the Federal
budget was in deficit and while expenditures were rising. It was designed
explicitly to sustain and invigorate expansion up to potential output rather
than to combat an existing or imminent recession. This major action was
followed by the enactment of a phased reduction in excise taxes in the spring
of 1965.
Monetary policy also made an important contribution to the economic
expansion by consistently accommodating growing credit demands at remarkably stable interest rates. A vigorously expansionary monetary policy
which would have pushed interest rates to very low levels might, of course,
have helped bring the economy to high employment more quickly. But
such a decline in interest rates could have caused increased capital outflows
from the United States, further impairing our balance-of-payments position.
A series of actions by the Federal Reserve and the Treasury did actually
raise U.S. short term interest rates during this period to bring them more
into line with rates abroad. As shown in Chart 7, however, the upward
pressure on short term rates did not spill over into long term markets.
Decisions by the Federal Reserve at the beginning of 1962, in mid-1963,
and in late 1964 to increase the maximum interest rates commercial banks
could pay on time and savings deposits gave banks greater freedom to
compete for funds. This enabled the banks to play an aggressive role
throughout the period in tapping the market for liquid savings and rechanneling the funds into loans and investments.
FISCAL PROBLEMS OF DEFENSE AND HIGH EMPLOYMENT: 1965-68
By mid-1965, the unemployment rate had been reduced to about 4 / 2
percent, and the gap between actual and potential output was being narrowed gradually and steadily. At this point, defense orders and expenditures
75
Chart 7
Selected Interest Rates
PERCENT
8
-
y
—..A
I n n i h i i i i li ii n i l ii i i I i ii i il M i n i
1960
1961
1962
1963
1964
1965
1966
1967
1968
NOTE.-DATA PLOTTED ARE QUARTERLY THROUGH 1965, MONTHLY THEREAFTER.
SOURCES: FEDERAL HOUSING ADMINISTRATION, BOARD OF GOVERNORS OF THE FEDERAL RESERVE
SYSTEM, MOODY'S INVESTORS SERVICE, AND TREASURY DEPARTMENT.
began to build up rapidly, and the task of economic policy became considerably more complicated. The increase in defense activity reinforced a
strong expansion of business spending on plant and equipment. The result
was an excessively rapid growth of economic activity which generated
inflationary pressures.
Some fiscal action to restrain the economy was taken in 1966. A previously enacted rise in payroll taxes of $6 billion took effect at the start of
the year. This was followed by prompt enactment of a series of tax measures
proposed by the President in January—the reinstatement of some excise
taxes that had been reduced, and the introduction of a system of graduated
withholding of individual income taxes and of accelerated payments of corporate taxes. But even with these actions, fiscal policy remained strongly
and inappropriately expansionary—in large part because defense spending
continued to outrun expectations. As the President has recently made clear
in reviewing the record, he discussed a recommended general rise in taxes
privately with business and Congressional leaders early in 1966 and became
convinced that a tax increase could not be enacted. In the fall, added fiscal
restraint was provided by a temporary suspension of the investment tax
credit and cutbacks in nondefense spending.
In the absence of a full measure of timely fiscal restraint, an undue share
of the burden of dampening the excessive expansion fell on monetary
policy. In December 1965, the Federal Reserve raised the discount rate from
4 to 4J/2 percent and increased the maximum allowable interest rate on time
deposits of commercial banks. As interest rates on bank time deposits and in
the open market rose sharply, savings and loan associations and mutual
savings banks experienced a sharp drop in their deposit inflows and thus
had to cut back their lending to the homebuilding sector. These developments are described in more detail later in this chapter.
The result of these actions was a marked slowing in the growth of final
demand. But homebuilding bore a disproportionate share of the restrictive impact. Moreover, interest rates ratcheted sharply upward to the
highest levels in several generations, and a near-crisis atmosphere developed
in financial markets in August 1966.
Because production continued to advance when final demand initially
slowed, inventories increased rapidly late in 1966. The ensuing turn-around
in inventory investment sharply accentuated an economic slowdown early
in 1967, and the rate of price increase also slowed notably. Rising Government spending helped to maintain over-all expansion in the face of the
large inventory adjustment in early 1967. And with easier credit stimulating
homebuilding, strong expansionary forces reasserted themselves in the second
half of that year. In August, President Johnson urged enactment of a
10-percent income tax surcharge. Delay in the passage of this measure intensified inflationary pressures and placed monetary policy in an awkward
position as discussed in Chapter 1.
LESSONS OF THE POLICY RECORD
In most respects, the economy has performed extremely well in the last
8 years, and vigorous use of fiscal and monetary policy has contributed
to this good performance. But the record could have been better, and it
provides several lessons that should serve as guides for the future.
First, the fiscal and monetary policy actions that were taken deliberately
to influence economic activity generally worked in the right direction with
effective results. Most of the shortcomings of the period were errors of
omission rather than commission. This applies both to the delays in taking
adequate stimulative action in 1961-63 and to the more recent delays in
achieving fiscal restraint.
Second, the experience of 1961-65 demonstrated that an effective fiscal
policy to stimulate the economy could be carried out without adding unnecessarily to the size of the Federal budget. Since the aims of stabilization
77
323-166 0—69
6
policy can be implemented either through tax changes or expenditure
changes, decisions regarding Federal expenditures can be properly based on
the desired allocation of resources between the public and private sectors.
Third, the record testifies to the effectiveness of a restrictive monetary
policy in slowing down the economy, but also to its substantial undesirable
side effects in bearing down on homebuilding and straining the financial
system. The side effects point to the need for active fiscal policy to avoid
placing a disproportionate share of the burden of economic stabilization
on monetary policy.
The major shortcomings of economic policy in recent years can be traced
to difficulties in achieving prompt and appropriate adjustments in fiscal
policy to offset variations in the strength of private demand and substantial
changes in defense spending. The next section discusses some improvements
that might be made in the formulation and implementation of fiscal policy.
FORMULATING FISCAL POLICY
The focus of fiscal policy in the United States is the annual Federal
budget, which is presented in the Budget Message of the President in January. This budget covers the fiscal year starting 6 months later, on July 1.
Any analysis of fiscal policy must begin with a consideration of the way in
which this budget is formulated in the Executive Branch and the procedures by which the Congress acts on the President's recommendations.
The requirements of economic stabilization are not always fully met,
however, by the fiscal program incorporated in the annual budget, no
matter how carefully this program is formulated. Conditions may change
during the course of the year in such a way as to call for a significant
policy response after the annual budget has been planned. Some degree
of continuing flexibility is therefore necessary.
One important forward step in budgetary practice was taken when the
Federal budget for the fiscal year 1969 was presented. In accord with recommendations contained in the October 1967 Report of the President's
Commission on Budget Concepts, a single unified budget was adopted, which
covers in a comprehensive way all of the financial activities of the Federal
Government. This unified budget provides a much improved statistical basis
for formulating fiscal policy and evaluating its economic impact.
THE ROLE OF ECONOMIC FORECASTING
A certain amount of time is required for the economy to respond fully to
changes in fiscal—and monetary—policies, and the actions taken at one
point in time have effects that are felt over a considerable subsequent period.
Whether a policy action will help or impair economic performance depends
on the state of the economy in the period following the action. It cannot be
judged adequately just by the facts of the economic situation at the time the
decision is taken. It must be assessed in light of a forecast.
78
The responsibility within the Administration for projections of Federal
revenues, expenditures, and economic activity rests jointly with the Department of the Treasury, the Bureau of the Budget, and the Council of Economic Advisers. Liaison is maintained with the Federal Reserve Board,
which must also forecast economic activity as a basis for its decisions concerning monetary policy.
These projections are particularly important in formulating the annual
budget, and they are set forth regularly in the Council's Annual Report. But
the evaluation of the economic situation and outlook must be kept up to date
during the year. Thus the forecasts are revised for internal use as new information becomes available—indeed, the process of assessing the economic
outlook is essentially a continuous one. The projections are frequently supplemented by quantitative estimates of the probable effects of alternative
policy actions which might be taken. Quantitative evaluations of the outlook
have been prepared for the President essentially on a quarterly schedule
ever since 1961. This procedure assures a regular review by the President,
with his chief economic and fiscal advisers, of the suitability of the budget
program for the needs of the economy.
The techniques used in preparing the Administration's economic projections have changed considerably over the years; but in general they depend
on a set of quantitative relationships among economic magnitudes over time.
The relationships that are relied upon may be based on formal statistical
procedures, subjective expert judgment, or survey data.
To a considerable extent, forecasting relies upon the timely availability
of data relating to the economy's past performance which can be used as a
basis for projecting its future behavior. Although there are still gaps in
economic statistics, considerable progress has been made in recent years by
the Department of Commerce, the Department of Labor, and other Federal
Government agencies in increasing the quantity and improving the quality
of statistical data available for assessing the performance of the economy.
Government agencies also collect valuable information on the anticipated
future behavior of some categories of expenditures. For example, the quarterly survey of investment anticipations provides a useful indication of the
probable behavior of this highly volatile element of private demand. The Bureau of the Budget prepares up-to-date estimates of future Federal expenditures. Estimates of Federal tax revenues are prepared and kept current by the
Treasury Department.
Forecasting was notably successful in gauging in advance the rapid expansion of 1964 and the upsurge from late 1967 into 1968. On some
occasions, however, difficulties have been encountered. The strength of the
1965-66 boom was not fully foreseen. Unexpected increases in the personal
saving rate intensified the slowdown in economic activity that occurred in
the first half of 1967. In the second half of 1968, private demand was
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stronger than had been anticipated, as noted in Chapter 1. Nevertheless,
the whole record makes clear that explicit quantitative projections are
superior to extrapolations or hunches, which are the only alternative ways
of guiding policy decisions that affect the future.
The need for greater precision in both forecasting and policy formulation
has increased greatly in recent years. Between 1961 and 1965, when actual
output was consistently below potential, there was little threat of a serious
rise in prices, and the risks of excessive expansion were small. Thus emphasis
could be placed upon achieving a growth of actual output in excess of that
of potential in order to close the gap. Since 1965, however, as actual output
has remained relatively close to potential, the need to anticipate and to offset fluctuations in demand has correspondingly increased.
PREPARING THE ANNUAL BUDGET
The Federal budget should be formulated with two objectives in view.
One is to provide the amount of fiscal stimulus or restraint needed to keep
the economy moving along the potential output path—or to move it back
toward that path if a departure has occurred. The other is to choose a level
of Federal expenditures that provides the appropriate allocation of national
resources between private and public uses. In principle, these two objectives can be pursued independently, since fiscal stimulus or restraint can be
provided either by adjusting public expenditures or by adjusting tax rates
to influence private spending.
Determining the Extent of Expansionary Action
In developing a budget that is appropriate in terms of fiscal impact, it
is necessary at the outset to prepare an economic forecast for a period extending a year and a half beyond the time of budget presentation. The forecast covering the first 6 months of this period—for which the budget outlook
has already been fairly well determined—provides the point of departure
for viewing economic prospects in the ensuing fiscal year. From that point
on, forecasts of private demand are used to determine the appropriate degree
of fiscal stimulus or restraint to be provided by the budget.
This determination takes account of the growth of Federal revenues when
GNP grows in line with potential m a noninflationary environment at unchanged tax rates. When the economy is in reasonable balance on the path
of potential output and private demand is expected neither to weaken nor
to accelerate, the forecast will point to the need for expansionary fiscal
action sufficient to offset the fiscal drag exerted by normal revenue growth.
If the projection suggests that private demand will weaken or if the
economy is operating below potential at the beginning of the year, expansionary fiscal action will be called for in an amount more than sufficient
8o
to counteract the restraining effects of normal revenue growth. Conversely,
if private demand is expected to strengthen or if the economy is operating
above potential at the beginning of the year, an amount of expansionary
fiscal action less than sufficient to offset the restraining effects of normal
revenue growth will be required—or, in an extreme case, some additional
restraint, beyond that provided by normal revenue growth, may be necessary.
The desired amount of expansionary (or restrictive) fiscal action, as indicated by the forecast, can be provided either by increasing (reducing)
Government expenditures, by reducing (increasing) tax rates, or by some
combination of the two. A decision therefore has to be made whether to
adjust taxes, or expenditures, or both. This decision involves difficult choices
about the allocation of resources between public sector programs and the
private sector.
Public Expenditures and Tax Changes
In order to make these choices intelligently, it is necessary to examine
carefully the proposed Federal expenditures having the highest priorities—
whether they be for the expansion of existing programs or for new initiatives—and judge whether the public needs that would be met by these
programs are more or less urgent than the demands of the private sector
that would be satisfied by tax reduction.
Allowance ordinarily has to be made for a virtually unavoidable increase
in expenditures sufficient to keep pace with rising costs and rising workloads
under existing Federal programs. The decision would, however, still have
to be made whether any needed restraint or additional stimulus over and
above that provided by this built-in expenditure growth should come from
changes in tax rates or in expenditures.
All of this suggests that there is no reason to suppose that the proper allocation of resources between public sector and private sector activities would
be achieved by keeping tax rates constant and adjusting Federal expenditures to meet the requirements of fiscal policy. It should be perfectly normal
for the President to recommend a change in tax rates in his annual Budget
Message. Such proposed changes have in fact been a feature of the last seven
annual budgets. Indeed, consideration of the appropriateness of tax rates
should be a normal part of the budget program—if no change is being
proposed, the President should explain why existing tax rates are regarded
as appropriate. If Government expenditures move ahead year by year at
a rate about equal to the growth of tax revenues, changes in tax rates may
not need to be made very often. However, it would be a remarkable
coincidence if a steady growth in Government expenditures at that rate
simultaneously satisfied the needs of economic stabilization and the Nation's
wishes over the long run with respect to the proper allocation of resources
between the public and private sectors of the economy.
Sharp increases in defense spending pose special issues relating to the
81
allocation of resources between Federal nondefense programs and the private
sector. A sharp increase in defense expenditures normally requires a
compensating fiscal adjustment to prevent the budget from becoming
undesirably stimulative. In principle, any needed adjustment can be accomplished either by increases in tax rates or reductions in Federal nondefense
outlays. For a number of reasons, however, increases in tax rates should
normally be the main instrument. First, sharp slashes in Federal nondefense
programs are simply not administratively feasible in the short run. Second,
social priorities for the nonmilitary public sector would be violated if these
programs carried the major burden of fiscal adjustment. The overhead cost
on society of increased defense requirements should be expected to be borne
primarily by the 80 percent of GNP that represents private uses of output.
It seems evident that the roughly 10 percent of GNP which Federal nondefense spending represents should not be expected to carry the major part
of the load. This seems particularly compelling in a Nation which is affluent
in general and yet beset by serious social problems. While it is entirely
appropriate for some types of nondefense spending to be cut and stretched
out in order to ease the fiscal problem, there are strong grounds for avoiding reductions in social programs that deal with the urgent problems of
poverty and urban blight.
CONGRESSIONAL PROCEDURES
If fiscal policy, as embodied in the annual budget, is to make its maximum contribution to economic stabilization, some changes in Congressional
procedures for reviewing and determining the budget would be desirable.
General Budget Review
One important problem lies in existing Congressional procedures for determining budget authority and hence Federal expenditures. In both the
House and Senate, budget authority is essentially controlled by 13 separate
appropriations subcommittees which determine budget authority for individual agencies and programs. Their individual decisions can lead to a total
of budget authority and outlays that is not controlled nor determnied in a
coordinated way. The Legislative Reorganization Act of 1946 called for a
concurrent resolution on an expenditure total in advance of appropriations,
but this limitation was not integrated into the appropriations procedures.
Congress needs new machinery which ensures that the actions taken on
authorizations and outlays for particular programs will add up to a total
that achieves an appropriate allocation of resources between Federal programs and the private sector of the economy. This machinery should focus
specific attention on the level of taxes required in conjunction with any
given total of outlays in order to achieve an appropriate fiscal policy. In
making its judgments on these matters, the Congress would presumably begin
with the Administration's expenditure and tax recommendations as con-
82
tained in the January Budget. Then, assuming no major disagreement with,
or change in, the basic economic outlook, any proposals to change the expenditure total substantially from that recommended in the Budget should
be accompanied by a corresponding proposal for adjusting taxes. If such
machinery could be satisfactorily introduced, it would help produce a more
coordinated Congressional decision on both expenditures and taxes.
Procedures for Tax Changes
Procedures for a general review of the economy's fiscal needs along
lines suggested above should expedite whatever specific action on taxes
might be needed for fiscal policy purposes. In most circumstances, normal
Congressional procedures for enacting the needed tax legislation would
probably be satisfactory—especially if the Congress were to agree in advance
on a form of tax adjustment that would be judged appropriate for this purpose. A proportional change in individual and corporate income taxes—
like the current surcharge—might be a suitable form of adjustment.
However, the experience of the 1960's, including the costly delays in
the passage of the 1964 tax cut and the 1968 tax surcharge, suggests the
desirability of some other standby arrangement for obtaining prompt adjustments in tax rates to achieve fiscal policy objectives in case of a delay
in reaching a decision through normal Congressional procedures. As noted
in Chapter 1, the Administration has requested that the Congress consider giving the President discretionary authority, subject to Congressional veto, to remove the current surcharge entirely or partially if warranted by developments. A more permanent arrangement to provide the
desirable flexibility could take various forms, including:
1. Presidential discretion to propose temporary changes in personal income tax rates within certain specified limits—such as 5 percent in either
direction—subject to veto by the Congress within (say) 30 days. This year's
Budget Message contains such a proposal
2. A streamlined Congressional procedure for ensuring a prompt vote on
Presidential proposals for changes in tax rates within certain specified limits.
This would not shift any of the traditional powers of Congress to the President; the Congress would simply change its own rules.
Since changes in tax rates required for fiscal policy objectives would
probably take the form of simple modifications of the basic schedule of
rates, it would be necessary also to ensure opportunities for a thoroughgoing
review of the over-all structure of the revenue system, including the tax base
and rates. A structural review of rates would be especially appropriate if
rates should drift downward (or upward) consistently for a period of several
years as a result of fiscal adjustments. It is important, however, that the
issues of tax reform be treated and considered separately from the annual
tax decisions related to fiscal policy.
83
ADJUSTING TO NEW DEVELOPMENTS
Under the procedures outlined above, it would surely take several months
for full legislative response to the President's January Budget. During that
period, both the Congress and the Administration would be alert to any
major unanticipated developments in the strength of private demand, in
Federal defense needs, and in the desired mix of fiscal and monetary policy.
Any such developments could and should be reflected in the implementation
of the budget program.
If the annual budget is carefully formulated and implemented, the need
for a significant subsequent revision of the budget program later in the
year should be the exception rather than the rule. Stabilization requirements
could largely be met by reliance on automatic stabilizers and monetary
policy.
Much of the success of these stabilization efforts would depend upon the
Federal Reserve's flexibility in adjusting monetary policy to circumstances
as they unfold. In the development of the annual budget, there should be
close consultation and coordination with the monetary authorities. A tentative projection of monetary and credit conditions should be prepared as
part of the forecast underlying annual budget decisions. The fiscal
program should minimize the risk of putting an excessive share of the burden
of economic stabilization on monetary policy, as happened in 1966. But
monetary policy should not be bound by the projections made at budget
time—if conditions change, it should be adjusted accordingly. Indeed, given
a reasonably appropriate fiscal policy, the further adjustments needed to
keep the economy reasonably close to potential output should normally be
within the capability of the Federal Reserve.
It should be recognized, however, that major unforeseen developments
may significantly modify the path of demand anticipated in the annual
budget. As mentioned earlier, private demand has on occasion exhibited
substantial unexpected strength or weakness.
A major problem in recent years has stemmed from the uncertain path of
increases in defense spending during the Vietnam buildup. While it is to be
hoped that such a military buildup will not again be necessary, there can be
no assurance in an insecure world that this will be the case. Accordingly, it is
essential to be prepared to deal with such contingencies. Moreover, there
could be similar and equally challenging problems of gauging the magnitude
and timing of a demobilization—when peace is established. A special report
to the President discussing the challenges and opportunities that will confront policymakers when peace comes in Vietnam is included in this volume.
The path of defense orders and outlays is inherently difficult to predict in
a period of military flux. Through intensified efforts of the Department
of Defense, considerable progress has nevertheless been made in providing
an improved flow of information relating to both the current and prospective
economic impact of defense spending. Some of this information is now
being made public by the Bureau of the Census in a monthly digest entitled
Defense Indicators. Further efforts are needed, together with a full awareness of the importance of accurate information, especially at critical turning
points in the trend of defense spending.
SOME ISSUES OF MONETARY POLICY
The record of the past 8 years demonstrates that flexible, discretionary
monetary policy can make an effective contribution to economic stabilization.
The economy's gradual return to full productive potential in the early 1960's
was partly attributable to a monetary policy which kept ample supplies of
credit readily available at generally stable interest rates. And in early 1967,
the prompt recovery of homebuilding after the 1966 slowdown was the direct
result of timely and aggressive easing of credit conditions by the Federal
Reserve.
The most dramatic demonstration of the effectiveness of monetary policy
came in 1966, however, when a dangerously inflationary situation was curbed
primarily by a drastic application of monetary restraint. Credit-financed
expenditures at the end of that year appear to have been as much as $8
billion below what they might have been had monetary policy maintained
the accommodative posture of the preceding 5 years. And there were substantial further "multiplier" effects on GNP as these initial impacts reduced
income and consumption spending.
THE CONDUCT OF MONETARY POLICY
The primary guides for monetary policy are the various broad measures
of economic performance, including the growth rate of total output, the
relation of actual to potential ouput, employment and unemployment, the
behavior of prices, and the Nation's balance-of-payments position. Extensive
research, together with the experience of the last few years, has increased
our knowledge of the complex process by which monetary policy influences
these measures. While there are still major gaps in our knowledge of the
precise chain of causation, some conclusions seem well established.
Like fiscal policy, monetary policy affects economic activity only after
some lag. Thus actions by the Federal Reserve must be forward-looking. In
considering the prospects ahead, however, an assessment must be made of
both the expected behavior of the private sector and of the likely future
course of fiscal policy. As noted earlier, the inherent flexibility in the administration of monetary policy permits frequent policy adjustments to take
account of unexpected developments in either the private or the public
sector.
Sectoral Impacts
Monetary policy can affect spending through a number of channels. To
some extent it works by changing the terms of lending, including interest
rates, maturities of loans, downpayments, and the like, in such a way as to
encourage or discourage expenditures on goods financed by credit. There
85
may also be market imperfections or legal constraints and institutional rigidities that change the "availability" of loans as monetary conditions change—
that is, make it easier or more difficult for borrowers to obtain credit at
given terms of lending. Under some circumstances, purchasers of goods and
services may finance their expenditures by liquidating financial assets, and
changes in the yields on these assets produced by a change in monetary
policy may affect their willingness to engage in such transactions. Changes
in monetary policy may also, on occasion, change the expectations of borrowers, lenders, and spenders in ways that affect economic conditions, although these expectational effects are rather complex and dependent upon
the conditions existing at the time policy is changed.
Monetary policy affects some types of expenditures more than others. The
extent of the impact depends not only on the economic characteristics of
the activity being financed but, in many instances, on the channels through
which financing is obtained and the legal and institutional arrangements
surrounding the financing procedures.
Residential Construction. The sector of the economy most affected by
monetary policy is residential construction. Although the demand for housing—and for mortgage credit—does not appear to be especially responsive to
mortgage interest rates, the supply of mortgage funds is quite sensitive to
several interest rate relationships.
The experience of 1966 clearly demonstrated how rising interest rates can
sharply affect flows of deposits to banks and other thrift institutions and
thereby severely limit their ability to make new mortgage loans. In the first
half of that year, the net deposit gain at savings and loan associations and
mutual savings banks was only half as large as in the preceding 6 months.
These institutions could not afford to raise the rates paid on savings capital
to compete with the higher rates available to savers at banks and elsewhere
because of their earnings situation—with their assets concentrated in mortgages that earned only the relatively low rates of return characteristic of
several years earlier. Commercial banks experienced a similarly sharp slowing in growth of time deposits in the second half of the year, as the Federal
Reserve's Regulation Q prevented them from competing effectively for
liquid funds. This forced banks to make across-the-board cuts in lending
operations.
In addition, life insurance companies had a large portion of their loanable funds usurped by demands for policy loans, which individuals found attractive because of relatively low cost. High-yielding corporate securities also
proved an attractive alternative for some institutional investments that might
otherwise have gone into mortgages.
Table 9 provides some indication of the extent of these various influences. As can be seen, savings and loan associations and mutual savings
banks together supplied less than 10 percent of total funds borrowed in 1966,
well below their 22 percent share in the preceding 5 years. This was the main
86
TABLE 9.—Net funds raised by nonfinancial sectors, 1961-68
1961-65
average
Nonfinancial sector
Total funds raised (billions of dollars)
1966
19681
1967
59.2
69.9
83.1
97.1
84.5
88.7
79.9
80.4
10.8
34.6
39.0
9.7
48.1
30.9
12.6
44.8
22.5
li.7
37.0
31.7
25.5
13.5
18.6
12.3
13.7
8.8
17.1
14.6
10.6
9.0
15.3
16.7
5.1
2.1
4.8
2.9
35.1
43.6
24.7
32.2
43.6
39.0
39.1
29.7
22.1
21.5
9.9
22.3
19.5
19.5
14.0
15.7
10.1
6.8
1.2
16.3
8.9
-2.0
11.2
9.4
3.9
12.9
15.3
-7.5
Percent of total raised by:
Private domestic nonfinancial sectors
State and local governments
Nonfinancial business
Households
.
Mortgages
Other
__
U.S. Government...
_._
Rest of world.
Percent of total supplied by:
Commercial banks.
Nonbank financial institutions
_.
Savings and loan associations and mutual savings banks
Other
Federal Reserve and U.S. Government
State and local governments
Foreign lenders
Nonfinancial business
Households, less net security credit
2.7
.5
4.6
.5
7.7
-.3
5.1
5.8
i Preliminary.
Note.—Detail will not necessarily add to totals because of rounding.
Source: Board of Governors of the Federal Reserve System.
factor limiting the availability of household mortgage loans. The effect on
homebuilding was quick and dramatic, as the seasonally adjusted volume of
new housing units started fell by nearly half between December 1965 and
October 1966.
In 1967, as interest rates in the open market retreated from their 1966
highs, the thrift institutions were able to regain their competitive position
in the savings market. A good part of their funds was fairly quickly channeled
into the mortgage market. By fall, housing starts had recovered nearly
to the level of late 1965.
As noted in Chapter 1, many factors—including several significant institutional reforms, sharply improved liquidity positions, and the widespread
expectation that monetary restraint was only temporary pending passage of
the tax bill—helped to moderate the adverse effects of renewed monetary
restraint on mortgage lending in 1968. But the thrift institutions again experienced some slowing of deposit inflows when market interest rates rose to new
heights, and mutual savings banks switched a good part of their investments away from the mortgage market to high-yielding corporate bonds.
State and Local Governments. State and local governments also felt the
effects of monetary restraint in 1966. These governments cut back or postponed more than $2.9 billion, or nearly 25 percent, of their planned bond
issues that year.
It is difficult to determine precisely what caused these postponements. In
87
cases involving more than half the dollar volume, the reasons given related
to the prevailing high level of interest rates. In some instances, the interest
costs simply exceeded the legal ceiling governments were permitted to pay
for borrowed funds. In other cases, finance officers decided to delay bond
issues for a few months in the expectation that interest rates would decline.
This sizable cutback in borrowings had a relatively small effect on State
and local government expenditures. Larger governments apparently were
able to continue most of their projects about as scheduled by drawing down
liquid assets or borrowing temporarily at short term. Smaller governmental
units, however, cut their contract awards by a total estimated at more than
$400 million.
Because of the problems State and local governments often face in raising
funds, the Administration is proposing the establishment of an Urban
Development Bank, which could borrow economically in the open market
and then lend in the amounts needed to individual local governments.
The Bank could lend at federally subsidized interest rates, with the Federal
Government recovering the cost of the subsidy through taxation of the interest income earned by holders of the Bank's securities.
Business and Consumer Spending. The 1966 credit squeeze undoubtedly
also had some effects on business and consumer spending, though the
amount of impact is not easily determinable. Most theoretical and empirical
studies find that business firms in some way balance the cost of borrowed
capital against the expected returns from their capital projects. Some small
firms may also simply not be able to obtain funds during tight money periods. In 1966, bank lending to business did slow sharply during the second
half of the year. Many of the larger firms shifted their demands to the open
market—and paid record high interest rates for their funds—but some of
the smaller ones probably were forced to postpone their projects.
Household spending on durable goods—particularly automobiles—has
been shown to be affected by changes in the cost and availability of consumer credit, as reflected in the interest rate, maturity, downpayment, and
other terms. While it is difficult to sort out cause and effect, households
borrowed only two-thirds as much through consumer credit in the second
half of 1966 as in the preceding half year. Capital gains or losses on asset
holdings accompanying changes in yields may also induce consumers to
spend more or less on goods and services.
Active and Passive Elements
Monetary policy, like fiscal policy, has what might be termed active and
passive components. Recognition of this distinction played an important role
in formulating the accommodative policy of the early 1960's. In the 1950's,
economic expansion had generally been accompanied by rising interest rates,
which tended to produce an automatic stabilizing effect somewhat
similar to the fiscal drag of the Federal tax system discussed earlier. The
large amounts of underutilized resources available in the early 1960's
made such restraint inappropriate, and credit was expanded sufficiently
to prevent it from occurring.
It is especially important to distinguish between these elements in monetary policy at cyclical turning points. If, for example, private demand
weakens and causes a decline in economic activity, interest rates will generally fall as credit demands slacken, even without any positive action by the
Federal Reserve to push rates down. This induced fall in interest rates can
help to check the decline in economic activity but may not, by itself,
induce recovery. Similarly, as the economy rises above potential, the induced rise in interest rates may only moderate the expansion but may not
bring activity back into line with capacity.
An active monetary policy during such periods requires positive effort
by the Federal Reserve to produce further changes in interest rates and
in availability of credit beyond those that would occur automatically.
Since expectational responses may either accentuate or moderate the
effects of the initial action, it is sometimes difficult to know in advance
precisely how much of a policy change is needed. But the main point
is clear—at such turning points, interest rate movements alone are not
likely to provide an accurate reflection of the contribution of monetary policy
to economic stabilization. Careful attention must also be paid to credit flows,
particularly those to the private sector of the economy.
MONETARY POLICY AND THE MONEY SUPPLY
Examination of the linkages between monetary policy and various categories of expenditures suggests that, in the formulation of monetary policy,
careful attention should be paid to interest rates and credit availability as
influenced by and associated with the flows of deposits and credit to different
types of financial institutions and spending units. Among the financial flows
generally considered to be relevant are: the total of funds raised by nonfinancial sectors of the economy^ the credit supplied by commercial banks,
the net amount of new mortgage credit, the net change in the public's
holdings of liquid assets, changes in time deposits at banks and other thrift
institutions, and changes in the money supply. Some consideration should
be given to all of these financial flows as well as to related interest rates in
formulating any comprehensive policy program or analysis of financial
conditions.
Much public attention has recently been focused on an alternative view,
however, emphasizing the money supply as the most important—
sometimes the only—link between monetary policy and economic activity.
This emphasis has often been accompanied by the suggestion that the Federal Reserve can best contribute to economic stabilization by maintaining
growth in the stock of money at a particular rate—or somewhat less rigidly,
89
by keeping variations in the rate of growth of the money stock within a fairly
narrow band.
There are, of course, numerous variants of the money view of monetary
policy. The discussion below focuses only on the simple version that has
captured most of the public attention.
Money and Interest Rates
In a purely theoretical world, abstracting from institutional rigidities that
exist in our financial system and assuming that relationships among financial
variables were unvarying and predictable, it would make little difference
whether monetary policy was formulated in terms of interest rates or the
money supply. The two variables are inversely related, and the alternative
approaches would represent nothing more than different paths to precisely
the same result. The monetary authorities could seek to control the money
stock, with interest rates allowed to take on whatever values happen to result. Or alternatively, they could focus on achieving the interest rates that
would facilitate the credit flows needed to finance the desired level of activity, allowing the quantity of money to be whatever it had to be.
But financial rigidities do exist that often distort flows of credit in response to swings in interest rates. And financial relationships have changed
steadily and significantly. Just since 1961, several important new financial instruments have been introduced and developed, including negotiable time
certificates of deposit and Euro-dollar deposits. Attitudes of both investors
and lenders have also undergone marked shifts, with sharp variations in the
public's demand for liquidity superimposed on an underlying trend toward
greater sensitivity to interest rates.
There is, to be sure, enough of a link between money and interest
rates at any given time to make it impossible for the Federal Reserve
to regulate the two independently. But this linkage is hardly simple, and
it varies considerably and unpredictably over time. The choice between
controlling the stock of money solely and focusing interest rates, credit availability, and a number of credit flows can therefore make a difference. This
choice should be based on a judgment—supported insofar as possible by
empirical and analytical evidence—as to whether it is money holdings alone
that influence the decisions of various categories of spending units.
Money and Asset Portfolios
The Federal Reserve conducts monetary policy primarily by expanding and contracting the supply of cash reserves available to the banking system. Such actions seek to induce an expansion or contraction
in loans and investments at financial institutions, with corresponding changes in the public's holdings of currency and deposits of various
kinds. The proportions in which the public chooses to hold alternative
9O
types of financial assets depend upon a complex set of preferences, which,
in turn, depend upon interest rate relationships.
The process of expansion and contraction of money and credit stemming
from Federal Reserve actions is fairly complex. But one aspect of it should
be clearly understood: The money so created is not something given to the
public for nothing as if it fell from heaven—that is, it is not a net addition
to the public's wealth or net worth. There can be an immediate change in
public wealth, but only to the extent that changes in interest rates generate
capital gains or losses on existing assets.
Any change in the money stock is associated with a change in the composition of the public's balance sheet, as people and institutions are induced to
exchange—at a price—one asset for another or to increase (or decrease) both
their assets and their liabilities by equal amounts. Since all the items in the
public's balance sheet might be changed as a result of these compositional
shifts, the change in the public's liquidity is not likely to be summarized adequately in terms of any single category of financial assets.
It is, of course, possible that decisions to spend on goods and services are
affected more by the presence of one type of financial asset than another in
a spending unit's portfolio. But there is only scattered evidence of such behavior in various sectoral studies that have been undertaken to analyze the
factors affecting the spending decisions of consumers, businesses, or State and
local governments. Indeed, to the extent these studies do find spending decisions systematically affected by financial variables, it is often through
changes in interest rates and availability of credit.
Money and Income and a Monetary Rule
One problem with the money supply as a guide to monetary policy is that
there is no agreement concerning the appropriate definition of "money."
One definition includes the total of currency outside commercial banks plus
privately held demand deposits. A second also includes time deposits at commercial banks, and even more inclusive alternatives are sometimes used.
On the other hand, there is a more limited definition, sometimes called "highpowered money" or "monetary base," which includes currency in circulation and member-bank reserve balances at the Federal Reserve banks.
These different concepts of money do not always move in parallel with
one another—even over fairly extended periods. Thus assertions that the
money supply is expanding rapidly or slowly often depend critically on which
definition is employed. In the first half of 1968, for example, there was a
sharp acceleration in the growth of currency plus demand deposits, but
growth of this total plus time deposits slowed considerably.
On the other hand, relationships between movements in GNP and any
of the money concepts have been close enough on the average—especially
when processed through complex lags and other sophisticated statistical
techniques—to be difficult to pass off lightly.
91
There is, of course, good reason to expect some fairly close relationship between money and income. This would be true even in a completely abstract
situation in which it was assumed that the money supply per se had no direct
influence on GNP, and that monetary policy worked entirely through interest
rates. Since interest rates and the money supply are inversely related, any rise
in GNP produced by a reduction in interest rates and increased credit availability would be accompanied by at least some increase in the money supply.
The relationship also exists in a sort of "reverse causation" form—that is,
as income goes up so does the demand for money, which the Federal Reserve
then accommodates by allowing an increase in the actual money stock. This
is precisely what happened during the 1961-65 period of accommodative
policy, and it is always present to some extent as the Federal Reserve acts
to meet the economy's changing credit needs. The problem of sorting out
the extent of causation in the two directions still challenges economic
researchers.
A one-sided interpretation of these relationships is sometimes used to
support the suggestion that the Federal Reserve conduct policy on the basis
of some fixed, predetermined guideline for growth of the money supply
(however defined). Given the complex role of interest rates in affecting
various demand categories and the likely variations in so many other factors,
any such simple policy guide could prove to be quite unreliable.
The experience of the past several years illustrates the kinds of difficulties
that might be encountered in using the money supply (defined here as currency plus demand deposits) as the exclusive guide for monetary policy. As
described previously, high interest rates in 1966 began affecting the nonbank
thrift institutions, the mortgage market, and the homebuilding industry
soon after the start of the year. But during the first 4 months of that year,
the money supply grew at an annual rate of nearly 6/ 2 percent, well above
the long-term trend. Later that year, the financial situation of major mortgage lenders improved somewhat and housing eventually rebounded despite
the fact that growth of money supply plus bank time deposits was proceeding
at only a snail's pace.
Growth of the money supply in the second quarter of 1968 was at an
annual rate of 9 percent. The reasons for this acceleration—to a rate
almost double the growth in the preceding quarter—are not fully apparent.
The Federal Reserve could have resisted this sizable increase in the demand
for money more than it did, but interest rates in the open market would
then have risen well above the peaks that were in fact reached in May.
Whether still higher rates would have been desirable is another issue, which
cannot be settled merely by citing the rapid growth of the money supply.
These illustrations suggest that any simple rigid rule related to the
growth of the money supply (however defined) can unduly confine
Federal Reserve policy. In formulating monetary policy, the Federal Reserve must be able to take account of all types of financial relationships currently prevailing and in prospect and be able to respond flexibly as changing
92
economic needs arise. In deciding on such responses, especially careful consideration must be given to likely changes in interest rates and credit availability, in view of the effects of these factors on particular sectors of the
economy—especially the homebuilding industry.
LOOKING AHEAD
In the future as in the past 8 years, the maintenance of full prosperity
deserves high priority among the Nation's goals because it contributes so
much to so many of our other national objectives. Job opportunities provide
the stepping stones out of poverty for many of the disadvantaged. As
Chapter 5 makes clear, efforts to train the disadvantaged can hardly succeed
in a sluggish economy. For those who have already obtained some minimum
standard of living, prosperity offers a ladder to higher standards of comfort,
civilization, and security. For those high on the income scale, prosperity
provides the incentives and the funds for the growth of capital to strengthen
our productive performance in the future. For the public sector, prosperity
offers the revenues that can help to repair the accumulated decay of our
cities, purify the environment, and improve education and transportation
systems.
Between 1968 and 1975, our civilian labor force will increase by 10J4
million persons, or an average of ll/2 million a year. If the new entrants
are employed and productivity continues to grow at the recent trend rate,
GNP will amount to about $1,150 billion (in 1968 prices) in 1975.
The experience of the past 8 years should be of considerable benefit in the
formulation of economic policies to ensure continued movement along the
potential output path to reach this level of GNP in 1975. Economic policymakers can reasonably hope to maintain sustained growth in line with potential and to avoid the bumps of the business cycle and the unconscionable
waste of a slack economy.
A dynamic society should not, however, be satisfied merely with continuing along the present path of potential. Faster growth can be achieved
if ways can be found to accelerate the growth of national productivity.
Policies that aim at stimulating capital formation, education, and technological advance can play an important role. Additional gains in output and
standards of living for all our citizens can be realized if ways can be found
to achieve lower levels of unemployment and reasonably stable prices simultaneously. Chapter 3 discusses a number of measures that can help to make
high employment and price stability more compatible.
93
323-166 <
Chapter 3
Price Stability in a High Employment Economy
T
HE REMARKABLE ACHIEVEMENT of prosperity as the normal
state of the American economy has been recorded in Chapter 2. Recent
price performance has been far less satisfactory.
Since 1965, prices have been rising too rapidly. The history of both the
United States and other industrial nations shows that high employment is
generally accompanied by inflationary tendencies, and that when prices are
reasonably stable, this is at the cost of too many idle men and idle machines.
The record of the past poses the critical challenge of the years ahead. Reconciling prosperity at high employment with price stability is the Nation's
most important unsolved problem of over-all economic performance.
Though the United States has done better than most industrial countries, its
record is far from adequate. That record can and should be improved by
measures discussed in this chapter.
PRICES, WAGES, AND EMPLOYMENT
The difficulties of combining price stability and high employment in the
past 15 years are evident in Chart 8. It reveals a fairly close association
of more rapid price increases with lower rates of unemployment. In 1956-57
and from 1966 to 1968, when the unemployment rate was between 3.6 and
4.3 percent, price increases ranged between 3.1 and 4.1 percent. In contrast,
between 1958 and 1964 the unemployment rate consistently exceeded 5
percent, and price increases were uniformly less than 2 percent.
The historical relationship has been neither mechanical nor precise. In
some periods, the over-all price level has been affected by special and erratic
factors such as crop failures, shifts in foreign demand, or bottlenecks arising
from a spurt of demand in one sector of the economy. Moreover the price
performance of any year is influenced by cost developments arising from
conditions in prior years.
Still, upward pressures on prices and wages are likely to be intensified
when the economy is operating at high utilization of manpower and capital.
In a slack economy, rising prices are rarely a problem. Even when demand
begins to expand strongly, additional output is readily provided by increases
in employment and fuller use of industrial capacity. If the expansion persists
94
Chart 8
Price Performance and Unemployment
1
1
I
• 1956
4
• 1968
X
# 1966
u
s
I 3h
• 1957
-
o
• 1955
y 9 -
• 1958
1964
a: ^
• 1965
• 1960
O
• 1959
• 1963
i
#
-
3
1
4
1
5
• 1961
1962
6
1
7
UNEMPLOYMENT RATE-PERCENTl/
J/CHANGE DURING YEAR, CALCULATED FROM END OF YEAR DEFLATORS (DERIVED BY
AVERAGING FOURTH QUARTER OF A GIVEN YEAR AND FIRST QUARTER OF SUBSEQUENT
YEAR).
2/AVERAGE FOR THE YEAR.
SOURCES: DEPARTMENT OF COMMERCE, DEPARTMENT OF LABOR, AND COUNCIL OF
ECONOMIC ADVISERS.
at a rate exceeding the growth of the economy's productive capacity, however, demand will begin to press upon available capacity in some industries. As a result, increases in prices will become more frequent, there will be
fewer offsetting decreases elsewhere, and living costs will begin to rise.
Shortages of workers with particular skills or in certain localities may
develop, and wages will accelerate for these groups. Because the balance
of demand and supply differs among industries, these tendencies may emerge
even while over-all unemployment and unused capacity are substantial.
If demand continues to grow strongly, more industries and labor markets
are strained and inflationary pressures become more pervasive. As unemployment declines, wages accelerate, since employers prefer to raise
wages rather than jeopardize sales and profits through either strikes or
inability to attract enough labor. The threat of losing markets through price
95
increases exercises much less discipline on the pricing policies of a firm
when it (and its competitors) are operating close to capacity. Thus prices
are readily marked up, both to reflect increased costs of labor and materials
and to provide for higher profit margins.
With living costs rising, wage increases are stepped up in most industries
and generally exceed the economy-wide growth of productivity. Thus unit
labor costs rise and in turn tend to be translated into higher prices. In this
way, a buoyant economy can move from price stability into a rising spiral of
wage and price adjustments. And once such a spiral starts, it becomes increasingly difficult to arrest, even after productive capacity has caught up with
demand and the initial pressures have largely subsided.
THE RECORD IN THE SIXTIES
This sequence of events is illustrated by the performance of the U.S.
economy in the 1960's.
Price Stability:
1961-65
Between the first quarters of 1961 and 1965, rapid economic expansion
took up much of the slack in the use of resources. The unemployment rate
dropped from 6.8 percent to 4.8 percent (seasonally adjusted) during this
4-year period, and capacity utilization in manufacturing increased sharply.
Yet the price and wage record was excellent. Average hourly compensation
in the private nonfarm economy rose an average of 4.0 percent annually,
but productivity increased at a rate of 3.9 percent, so that unit labor costs
remained virtually unchanged. The average level of wholesale prices in January 1965 was the same as 4 years earlier. Consumer prices advanced at
a moderate annual rate of 1.2 percent, largely reflecting gradual cost increases in distribution and services where productivity gains come slowly.
The Price-Wage Upturn: 1965-68
The first significant break in relative price stability occurred early in
1965. Farm and food prices began a sharp upward climb, spurred by special
and erratic factors affecting supply at home and abroad. More pervasive inflationary pressures started in the second half of 1965 when the military
buildup in Vietnam began. The rise in prices of consumer services accelerated as firms found it increasingly difficult to recruit and keep workers in
the traditionally lower paying service jobs. With consumer prices rising more
rapidly and with stronger demand for labor, upward pressures on wages
mounted.
These developments show up clearly in the price and wage record. Between
the second quarters of 1965 and 1966, consumer prices rose 2.7 percent.
During the same period, average hourly compensation in the private
96
nonfarm economy jumped 6 percent, well above the growth of productivity;
as a result, unit labor costs rose nearly 3 percent.
Wage and price developments were influenced by the high level of utilization of the economy. In January 1966, unemployment fell below 4 percent
of the labor force for the first time in nearly a decade, and the utilization
of manufacturing capacity reached the highest rate since 1955. But price
pressures were also intensified by the unusually rapid speed of the advance,
as reflected in an annual rate of growth in the real gross national product
(GNP) of more than 8 percent between the second quarter of 1965 and
the first quarter of 1966. Had the economy approached the neighborhood of
4 percent unemployment more gradually, there would have been more
time to train and upgrade labor and to introduce newer and more efficient
equipment.
When the rate of expansion slowed down late in 1966 and early in 1967,
so did the upward movement of prices. Between August 1966 and April 1967,
consumer prices continued to advance; but the annual rate of increase
moderated to 2 percent, while average wholesale prices actually declined.
An increase in supplies of farm products and other raw materials was
especially helpful. As new facilities were completed, the pressures on manufacturing capacity decreased sharply, and price increases slowed down for a
number of manufactured products.
Nevertheless, higher costs had been built into the economy during 1965
and 1966, and when the economy picked up speed in the second half of
1967, prices and wages again accelerated. Union settlements, which had
lagged in the initial stage of the advance, rose especially sharply in late 1967
and in 1968. As discussed in Chapter 1, the problems of rising prices and
wages remain intense as 1969 begins.
THE TASK FOR POLICY
Because of the general relationship between prices and unemployment,
decisions of fiscal and monetary policy present a serious dilemma. Achieving
price stability by accepting high unemployment involves dreadful waste and
tremendous social and human costs. But historically, unemployment rates of
4 percent or below have been associated with a price performance that most
Americans consider unsatisfactory. As explained in Chapter 2, price increases
at the rate recently experienced clearly impair our international trade performance, cause a haphazard redistribution of income and wealth, and may
jeopardize sustained prosperity.
The first line of defense against inflation must be fiscal and monetary
policies that avoid excessive pressures of demand on productive capacity. By
heading off sudden surges in demand and by promoting steady and smooth
growth, these policies can also contribute to improved price performance
at high employment. But fiscal and monetary policies alone cannot ensure
the simultaneous achievement of low rates of unemployment and reasonable
97
price stability. The relationship between inflation and unemployment depends upon the workings of the Nation's institutions and markets. There is
need for a wide ranging attack on inflation that will bring about pervasive
improvements in the economy's price performance.
To this end, the President established the Cabinet Committee on Price
Stability early in 1968. The Committee has studied many aspects of the
problem and has submitted its report, which covers many of the issues
discussed below.
IMPROVING LABOR AND PRODUCT MARKETS
Our labor and product markets are among the most efficient and flexible
in the world. Yet their further improvement is the key to making higher
levels of employment consistent with price stability. These markets must be
even more responsive to changing patterns of demand, and they must continuously increase the productivity of our resources.
Measures to improve these markets are of two general but related kinds:
those that facilitate the most productive use of our manpower resources, and
those that improve the efficiency of our product markets.
The efficiency of labor markets is reflected in the matching of job opportunities and available manpower. The fit is never perfect: while in some
areas and for some skills "help wanted" signs prevail, there are simultaneously many unemployed persons whose skills or locations do not fit the
needs of employers. Continued job vacancies tend to pull wages up and
thereby attract labor. In areas of excess supply, however, wages are rarely
subject to strong downward pressures. Thus unmanned jobs and jobless
men do not offset each other in influencing average wages. The better the
labor markets operate, the higher the level of employment and the lower
the volume of job vacancies that can accompany any degree of upward
pressure on average wages.
There are a number of ways that a better and more flexible fit of available
manpower and job opportunities can be achieved. Workers can move more
easily between occupations and geographical locations if they are given improved information about job opportunities and if they are not confronted
with barriers to entry into certain occupations. They can be aided by training programs which are more closely oriented toward skills that are in short
supply. And the productivity of employed labor can be improved by the
removal of restrictive work practices.
Measures of these kinds can both alter the level of employment consistent
with reasonable price stability and add significantly to the real output produced at a given level of employment.
Product markets can also be made more efficient. The major thrust must
be the strengthening of competition. Vigorous enforcement of antitrust policy
is essential. Opportunities can be found to remove or reduce existing re-
98
straints on competition. Better information for the consumer can also
strengthen competition. The continued pursuit of freer international trade
can enhance the effectiveness of competition. Standards and policies in regulated industries, in agricultural programs, and in Government procurement
should be kept under constant review, with price stability recognized as one
of the goals of policy.
The major measures discussed below should be viewed as elements of a
comprehensive program to improve price-cost behavior. Other areas and
other possible policy actions could be added to the list. The effects of the
measures vary considerably in potential magnitude, and no single one can
ensure a significant advance by itself. Yet if progress can be achieved on
most of these fronts, the inflationary tendencies that accompany low unemployment should be reduced.
Most of these measures may be expected to yield substantial gains in
other directions. Some would increase employment opportunities for the
disadvantaged. Others would enhance productivity and growth over the long
run.
It must also be recognized that many of these measures involve some social and financial costs that have to be assessed against the potential
benefits. In fact, some of the present problems result from past public
or private policies designed to promote such objectives as job security, public
safety or health, and the protection of small businesses. Frequently these policies were aimed at conditions which prevailed years ago; they require
reexamination in today's high employment economy.
Structural improvements in our product and labor markets usually take
time to institute and require time to show measurable effects. Most of the
strategies cannot be counted upon to assist significantly in the immediate
task of moving toward price stability in 1969. But early efforts are needed
to make timely progress toward the long-run objective of combining high
employment with reasonable price stability.
IMPROVING LABOR MOBILITY
Over the long term, there have been dramatic shifts in the pattern of
demand for labor—from agriculture to manufacturing, from the production of goods to the supply of services, and from less to more highly skilled
occupations. Agricultural workers represent only 5.0 percent of the civilian
labor force as compared with 13.1 percent 20 years ago. The number of
white collar workers has risen from one-third to nearly one-half of total
employment since World War II, with an especially rapid rise in the number
of professionals. The industry shifts in the past 7 years are shown in Table 10.
The needed adjustments to both short- and long-run changes in the
demand for labor have been largely accomplished by the normal operation
of the market. Increases in earnings have been particularly large in those occupations for which demand has been rising rapidly. For example, increased
99
TABLE 10.—Changes in employment, 1961 to 1968
Millions of persons
Percentage
change per
year,
Industry group
1961
Total employment
1961 to
196812
1968 i
Percentage distribution 2
19681
1961
Nonagriculture
Nonagricultural payroll employment
State and local government
Services
Retail trade
Finance, insurance, and real estate
Wholesale trade
Manufacturing
Production workers
Nonproduction workers
_.
Federal Government
Contract construction
Transportation and public utilities..
Mining
65.7
75.9
2.1
100.0
100.0
5.2
60.5
._
Agriculture
3.8
72.1
-4.3
2.5
7.9
92.1
5.0
95.0
54.0
68.1
3.4
100.0
100.0
6.3
7.7
8.3
2.7
3.0
16.3
9.5
10.5
10.4
3.4
3.7
19.7
5.9
4.6
3.3
3.0
2.9
2.7
11.7
14.2
15.4
5.1
5.5
30.2
13.9
15.4
15.3
4.9
5.4
29.0
12.1
4.2
14.5
5.3
2.6
3.1
22.4
7.9
21.3
7.7
2.3
2.8
3.9
.7
2.7
3.3
4.3
.6
2.6
2.1
1.5
-1.0
4.2
5.2
7.2
1.2
4.0
4.8
6.4
.9
1 Preliminary.
2
Based on employment in thousands.
Note.—Detail will not necessarily add to totals because of rounding.
Source: Department of Labor.
needs for workers in retail trade and service occupations have been reflected
in wage gains larger than those in manufacturing (Table 11). Similarly,
earnings in many professions have advanced rapidly.
Although the labor force is highly mobile and able to adjust readily to
substantial shifts in demand, there are still many costly barriers that workers must cross when moving among jobs and occupations. One remedy is
to lower the barriers, allowing workers freer access to jobs. Another is to
bring work to areas of high unemployment. The benefits and limitations of
making jobs available to those living where few opportunities now exist are
explored in Chapter 5.
TABLE 11.—Changes in hourly earnings of production and nonsupervisory workers
on private nonagricultural payrolls, 1961 to 1968
Average hourly earnings
.
Industry group
Total private nonagricultural payrolls2
$2.14
1 Preliminary.
Total includes certain industry groups not shown separately.
Source: Department of Labor.
2
IOO
$2.85
4.2
1.56
3.20
2.09
2.31
2.32
2.64
Retail trade
Contract construction
Finance, insurance, and real estate
Wholesale trade
Manufacturing
Mining
1961 to
19681
19681
1961
Percentage
change per
year,
2.16
4.38
2.75
3.05
3.01
3.34
4.8
4.6
4.0
4.0
3.8
3.4
Information on Job Opportunities
Rapid adaptation of the labor force to changing demands can be aided
by timely information regarding job opportunities. The disadvantaged in
particular are likely to lack such information. Recognizing this handicap,
the Federal-State Employment Services in 1965 began seeking out disadvantaged workers for enrollment in training programs, for job referral, and
for work counseling.
The importance of improved job information was also recognized in the
1968 Amendments to the Manpower Development and Training Act
(MDTA). This legislation authorized the development of a comprehensive
system of labor market information, using electronic data processing and
telecommunication systems for direct contact among recruitment, job training, and placement agencies.
Relocation Assistance
The cost of moving can make it difficult for low-income workers to
respond to job opportunities. The 1965 Amendments to the MDTA authorized an experimental program of relocation assistance to test the value of
helping disadvantaged workers in depressed areas move to places of better
employment opportunity. Thus far, 13,000 workers and their families have
received assistance under the program. The experience from this pilot program suggests that the benefits far outweigh the $750 average cost of
relocation.
Vesting and Portability of Pension Rights
By 1980, private retirement plans will cover some 40 million workers—
about three-fifths of all private nonfarm employees. Nonvested plans, in
which the worker loses his pension rights if his employment terminates, not
only operate inequitably against many long-service employees but also discourage mobility.
Vesting would enable the worker to retain his financial stake in his pension when he changes employers. To encourage more vesting, the Department of Labor has proposed a Pension Benefit Security Act. It would require
full vesting after 10 years of service, to become fully effective 12 years after
passage. At present, only about 20 percent of all workers are in retirement
plans which fulfill this requirement.
Another way to overcome the restrictive effect of pension plans on mobility
would be to increase the ability of employees to transfer pension credits
among employers in a particular industry. This type of portability, largely
found in multi-employer collective bargaining contracts, enhances mobility
within industries but not across industry boundaries. In construction, multiemployer pension plans are common but generally limited to a particular city
IOI
or metropolitan area. Greater reciprocity among these plans would enhance
mobility in this important sector.
Licensing
State licensing provisions affecting some skilled trades and many professions restrict mobility to the extent that there is not full reciprocity among
States. Electricians, plumbers, barbers, and beauticians are examples of the
licensed tradesmen; physicians, dentists, lawyers, accountants, and teachers
are examples of the professionals. In some cases, notably physicians, there is
relatively full reciprocity. But in others, those who have licenses in one State
are required to pass new examinations or to meet different special qualifications if they want to move to other States.
In principle, these requirements are imposed to protect public health
or safety, or the quality of service. Yet they may serve to restrict competition,
particularly in localities or States where pay scales are relatively high.
Mobility could be enhanced by universal reciprocity at generally acceptable
standards.
Discrimination in Employment
One of the most widespread barriers to the full use of our labor force is
discrimination against women and members of minority groups. Great
progress has been made in reducing these and other categoric barriers to
employment; Federal legislation now outlaws discrimination on the basis
of race, religion, national origin, sex, or age. While the policy is now clear,
a very large job of enforcement remains.
In addition, arbitrary barriers to employment may still be imposed by employers who maintain unnecessarily restrictive hiring standards as described
in Chapter 5. Some unions also impose unreasonable restrictions on membership.
Minimum Wages
Minimum wage laws protect the worker against the imperfections of the
labor market which lead to substandard wages. Such laws may also encourage the more efficient use of labor. Although increases in the minimum
wage are likely to be reflected in higher prices, society should be willing to pay
the cost if this is the best way to help low-wage workers. Yet excessively
rapid and general increases in the minimum can hurt these workers by
curtailing their employment opportunities.
Since 1956, the Federal minimum has gone up about in line wTith average
hourly compensation, while coverage has progressively expanded to cover
low-wage industries. In considering the future rate of increase for minimum
wages, careful scrutiny should be made of the possibility of adverse employ-
102
ment effects. The benefits of higher minimums should be weighed against
alternative ways of helping low-wage workers.
EFFICIENT USE OF MANPOWER
Responding to the expanding employment opportunities of our economy,
American workers generally have accepted—and even welcomed—technological change. But there are exceptions; unions have secured management
acceptance of restrictive work rules in such industries as railroads, printing,
longshoring, and construction. These rules reflect a legitimate concern for
job security. But where technological change does adversely affect job security, it would be preferable to avoid restrictive practices and develop
solutions specifically to meet that problem. Workers can be largely compensated for the loss of particular positions and of seniority protection
through such provisions as severance pay, attrition plans, and the option of
early retirement for older workers. The trend of collective bargaining agreements is in this direction, but the exceptions are still costly to the economy.
Legal Restrictions
Legal restrictions designed to protect health and safety may, in some
cases, impose unnecessary barriers to the efficient use of labor.
For example, local building codes sometimes prevent the use of construction labor as efficiently as technology allows, according to a report of
the National Commission on Urban Problems. The Commission also found
that an unnecessary diversity among codes inhibits large-scale operations by
contractors and manufacturers. It recommended that private and public
bodies develop standards that could be accepted and applied throughout
the Nation.
Another example is railroad full-crew laws affecting freight and road
service in seven States. These laws reflect an approach that dates back to
the era of the steam engine. Despite dieselization and modern improvements
in communication, the laws remain.
Seasonality
Instability of work leads to inefficient use of manpower, throwing persons
able and willing to work into unemployment. Seasonal variations are a
major source of such waste, particularly in construction.
More than one-fourth of all wage and salaried workers in contract construction experience some unemployment during the year. This is about
double the proportion in manufacturing and other nonagricultural industries. Besides the waste of valuable manpower, seasonality leads to labor
shortages during peaks of activity in particular occupations and geographical
areas. A number of studies have indicated that, for most types of construction, the added costs of winter work are small and might be offset by just the
savings in unemployment compensation for construction workers. More
103
stable employment might also moderate the sharp upward trend in hourly
wages for construction workers, at the same time improving their annual
incomes.
In light of these considerations, the President recently instructed Government agencies to explore the possibility of scheduling more construction
in winter months. Progress in this direction by the Federal Government could
serve as an example to State and local governments and to private industry.
MANPOWER TRAINING PROGRAMS
Training programs must be oriented toward two main objectives. The
first, and probably most important in both its economic and social implications, is to assist the disadvantaged and the unemployed to acquire new skills.
Such efforts present special and highly important problems, which are discussed in Chapter 5 in the context of the problem of poverty. The second
objective is to help increase the supply of skilled workers and professionals
to keep up with rapidly rising demand.
Skilled Workers
Federal and federally assisted training programs can make an important
contribution to meet the rising demand for skilled workers in periods of
high employment. The Vocational Education Act of 1963 authorized a
large expansion of vocational training programs. Post-secondary day school
vocational enrollments increased from 171,000 in 1964 to 501,000 in 1967,
and enrollments of adults in part-time programs rose from 2.3 to 2.9 million. The total number of persons in trade and industrial programs rose
from 1.1 to 1.4 million between 1964 and 1967.
Establishing and operating flexible, expanding training programs pose
some difficult problems. Ideally, the pattern of training should be related to
forecasts of changing demand for workers in different occupations, thus
meshing the training with emerging needs. In practice, this is not easy to
accomplish.
There is also danger that vocational programs, once established, may continue unchanged despite radical shifts in the demand for skills. For example,
high school enrollments in vocational agriculture remained almost constant
from 1964 to 1967, despite the sharp and persistent drop in agricultural work
opportunities and the movement of many rural youths to other jobs. The
scope of vocational education should be broadened to meet the future manpower needs of the economy. The 5 percent of total enrollees in vocational
classes preparing for health and technical occupations is much too small.
More training should be provided in new occupations such as automatic data
processing and electronics.
In addition, skilled workers will be needed in such traditional trades as
construction. There is every indication that the demand for construction
in the 1970's will be of unprecedented magnitude. Success in meeting the
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national target for housing recently adopted by the Congress will depend
upon the availability of enough skilled workers.
Professions
The demand for professionals has increased sharply. Although their
number has grown at an annual rate of 4.2 percent in 1961-68, as compared
with only a 2.6 percent increase in the number of production workers in
manufacturing, supply has not kept pace with demand. As a result, earnings in many professions have risen at a substantially higher rate than those
of manufacturing production workers.
The rise in demand for professional and technical personnel reflects
numerous factors. In health care, the general rise in affluence has contributed
significantly, along with Medicare, Medicaid, and the rapid increase in the
elderly population. Total spending on health care rose from $26 billion in
fiscal 1960 to $53 billion in fiscal 1968.
The great technological advances of the past decade have vastly increased
the demand for such professionals as physicists, chemists, mathematicians,
and engineers. Expenditures for research and development have grown
rapidly. Between fiscal 1961 and 1966, the dominant factor in the expansion
was Government spending for research and development, which rose at
the rate of 11.5 percent a year, before slowing markedly in 1966-68. For
the National Aeronautics and Space Administration program alone, the
number of scientists and engineers directly involved increased from less
than 11,000 in 1960 to a peak of nearly 92,000 in mid-1966. Private spending on research and development also increased at a rapid rate, growing at
8.8 percent annually between 1961 and 1967.
Newly instituted Federal programs have helped to meet the expanding
demand for professional personnel. The Education Professions Development
Act of 1967 gave the Office of Education authority to assist in the training
of school personnel at all levels and in various occupations. Under the
Health Professions Educational Assistance Amendments of 1965, about
13,500 scholarships have been awarded in medicine, dentistry, and pharmacy. A variety of fellowship, training, and grant programs is providing
assistance to more than 43,000 students in 1968-69, as compared with
10,500 in 1962-63.
Despite these advances, the present programs are not adequate to
meet the growing needs for trained professionals.
Adjusting Job Requirements
In light of the high and growing demand for fully qualified professional
personnel, the more routine or subprofessional tasks should be performed by
such paraprofessionals as teacher's aides, nurse's aides, dental technicians,
and engineering technicians.
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The New Careers Program, administered by the Department of Labor,
is helping to prepare disadvantaged adults for jobs in public and private nonprofit agencies in the fields of health, education, welfare, neighborhood redevelopment, and public service. As of mid-1968, about 5,000 persons were
enrolled under this program. Cooperating institutions have agreed to revise
job requirements and to develop new career opportunities for subprofessional workers.
Future Directions for Manpower Policy
Training programs under the MDTA have the potential for making a
great contribution to price stability and high employment. Accomplishments thus far have been limited, mainly because the programs have
been small relative to need. Only an average of 173,000 persons yearly have
been enrolled from 1963 to 1968. In 1968, 272,000 were enrolled, equal to
three-tenths of 1 percent of the Nation's labor force. Moreover, only 18 percent of the total were trained in critical skills.
The creation of a new system of adult job training proved complex.
Difficulties were inherent and experimentation necessary. But after 5 years
of experience, it is evident that MDTA training and assistance can help
the economy make more efficient use of manpower.
The Federal Government has greatly increased its support of college
students and institutions of higher education. The total funds available
in both grants and loans rose from an estimated $1.5 billion in 1962 to
$4.4 billion in 1968. Federal funds for student loans increased from an
estimated $75 million in 1962 to $251 million in 1968. Nevertheless, there
remains a need for additional support. When properly designed, loans are
a particularly suitable form of aid for college students, although many
youths from low-income families may require special assistance through
direct grants.
Federal aid can also be useful in underwriting the costs of expanding the
capacity of professional schools where training facilities are most critically
short, as in medical education. And better planning of Government programs can lessen the pressure on the limited pool of professional manpower.
The Federal Government directly and indirectly pays the salaries of 10
to 15 percent of all professionals. Because the supply of professionals cannot be expanded quickly, adding significantly to demand can affect salaries
throughout the economy for many years.
COMPETITION AND ANTITRUST POLICY
The prevalence of strong competitive forces in most markets of the U.S.
economy reflects its vast size, the ability and willingness of businessmen to
respond to new opportunities, and a long-standing commitment of public
policy to promote competition—most importantly exemplified in the antitrust
laws.
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Antitrust Laws and Prices
While antitrust action is an effective weapon against collusive price agreements, violations still occur and continuous vigilance is necessary. For
example, since 1965, there have been price-fixing convictions in such diverse
industries as plumbing fixtures, steel, and pharmaceuticals.
Antitrust also has a major role to play in reducing concentration. In highly
concentrated industries—those in which a few firms control a large proportion of sales—price competition is likely to be less intense than it is elsewhere
in the economy. Numerous studies have shown a significant relationship
between high concentration and high profit rates—an indication of weak
competitive pressures. Moreover, the high profits sometimes earned by
firms in the less competitive industries are understandably a tempting target
for large wage demands, which sometimes spread to other industries.
Furthermore, concentrated industries often maintain prices in the face
of declining demand, reducing output instead. As demand fluctuates among
products over time, prices may rise where demand increases, but fail to
decline where demand decreases. This results in an inflationary bias, which
might be substantially reduced by greater competition.
Vigorous antitrust enforcement helps to hold down prices by breaking up
price conspiracies and reducing concentration. A continuing program of
antitrust actions can increase competition and contribute to improved
over-all price performance at high employment.
Mergers and Concentration
The present levels of concentration in many industries are in large part
the result of peaks of merger activity at the turn of the century and during
the 1920's. Although the number of mergers in recent years has reached
gargantuan proportions—1,496 major mergers of manufacturing and mining
concerns in 1967 as compared to 219 in 1950—most of them involved
firms in different industries rather than in the same industry. In part, this
reflects the Celler-Kefauver amendment to the Clayton Act which has
severely restricted combinations that might lessen competition. In 1967, 83
percent of the larger mergers consisted of purchases of firms in unrelated
industries; in comparison, less than 60 percent of larger mergers between
1948 and 1953 were of this conglomerate type.
Reducing
Concentration
In a few major industries, concentration has been very high for many
years. New approaches to reducing concentration in these industries should
be examined. Competitive forces can be enhanced by modifying existing
industry patterns or by promoting entry of additional competitors.
One approach would be to seek court decrees to promote competition by
such measures as altering distribution and patent licensing practices. In
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industries of critical economic importance, the appropriate remedy may be
the divestiture of parts of the operations of the largest firms to create new
competitors.
A second approach is to adopt measures to channel merger activity in
directions that would increase competition. Mergers could have a healthy
impact on concentration if acquiring firms of very large size were barred
from purchasing the leading firms in other concentrated industries. The
major route for entry into a concentrated industry by a very large firm then
would be to build new capacity or to buy an existing smaller firm.
When a very large firm buys a small firm in a concentrated industry, it has
the resources to expand that firm's capacity and to try to increase its share
of the market. Such a merger can infuse new vigor and ideas into that market.
There is also need to review certain provisions of the tax laws which provide incentives for mergers. Consideration should be given to modifying
the statutes so as to make the tax laws more consistent with the objectives
of antitrust policy.
An effective program to deal with very high levels of concentration may
require new legislation, carefully drafted to avoid either penalizing economic
efficiency or placing unnecessary restrictions on the freedom to respond
to competitive opportunities. With these two limitations, measures to
strengthen competitive pressures in a number of highly concentrated industries could further increase the contribution of antitrust policy to price
stability.
LEGAL RESTRICTIONS ON COMPETITION
In spite of the Government's commitment to the strengthening of competitive markets, some existing laws may weaken competition. Most of these
laws were adopted during the 1930's to relieve the especially serious impact
of the depression on small firms in the distributive trades.
Resale Price Maintenance
Major examples of these depression-born laws are the resale price maintenance statutes still in effect in 22 States. These "Fair Trade" acts permit
a manufacturer to require that all the retailers in a State observe a minimum
resale price for that manufacturer's trademarked products. Since these products generally move in interstate commerce, the practice rests on exemptions
from Federal antitrust laws granted under the provisions of the MillerTydings Act (1937) and the Maguire amendment (1952).
Resale price maintenance contracts are used mostly in the sale of drugs,
cosmetics, appliances, and liquors. A survey by the Department of Justice
in 1956 showed that prices were 19 to 27 percent higher on fair-traded
items in States with resale price maintenance laws than in other States.
Some estimates place the annual cost to the consumer of resale price maintenance at $1.5 billion.
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One effect of resale price maintenance is to shift the focus of competition
into less desirable forms. Retailers compete by providing more extensive
consumer services, thereby increasing business costs. Manufacturers often set
resale prices at levels providing generous markups to retailers, in order to induce them to favor the sale of their products.
The principal objective of resale price maintenance is to protect smaller
concerns from their larger competitors. The prohibition of predatory practices is a valid objective of public policy. In practice, however, lower prices
reflecting greater efficiency and lower costs cannot be called predatory.
Moreover, there is no evidence that the efficient small retailer needs such
special protection, which can freeze an inefficient market structure.
For these reasons, the Administration has consistently opposed legislation
designed to extend resale price maintenance. Indeed, it is hard to see a
continuing justification for the existing laws in today's prosperous economy.
Robinson-Patman Act
The Robinson-Patman Act is another important Federal law intended
to protect the small from the large. The Act attempts to prevent chains,
mail-order houses, and other huge buyers from extorting preferential price
concessions from suppliers.
Although public policy should be concerned with preventing improper
use of the advantages conferred by sheer size, some evidence indicates that
the Act has had the unintended effect of accentuating price rigidities in
some markets. A seller may refuse to bargain on price with an individual
customer by contending that under the law any concession granted to one
buyer would have to be made uniformly available to all others. The law may
conflict with the development of more efficient methods of distribution, such
as integrating wholesale and retail functions or dispensing with independent
brokers. By requiring proportionally equal treatment in certain promotional
practices, the Act has discouraged experimentation with marketing techniques. It has been interpreted to prevent sellers from charging different
prices in widely separated geographic markets.
A careful reappraisal of the Act might suggest ways to focus its application more sharply on those particular forms of price discrimination that
constitute a truly serious threat to competition.
IMPROVING CONSUMER INFORMATION
The effectiveness of price competition in consumer markets depends
partly on the purchasing skill of the consumer. Dependable product and
price information are needed to allow consumers to evaluate and compare
the relative costs and merits of the enormous variety of goods and services
offered for sale.
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8
Legislative Achievements and Proposals
In the last two Congresses, 20 bills protecting the consumer were enacted.
Two of the most important were the Truth-in-Packaging and the Truthin-Lending Acts.
The Truth-in-Packaging Act, signed in November 1966, recognizes that
the bewildering multiplicity of package sizes for common household products makes price comparison difficult. While the enforcement provisions
are weak, the Act takes important steps toward remedying the situation.
One provision encourages interested industry groups, with the aid of consumers and government agencies, to develop voluntary standards to limit the
number of package sizes. Another provision requires standardization of the
location and form of the quantity statements on packages.
The 1968 Truth-in-Lending Act requires that the finance charge on consumer credit transactions be expressed in terms of a simple annual rate.
At present such charges are often stated in ways that make it difficult for
the consumer to know the true cost of credit.
Among the legislative proposals remaining from the previous Congress
are those relating to deceptive sales techniques, which in the home improvement field alone are estimated to cost the consumer over $500 million annually. The Deceptive Sales Act, passed by the Senate but not the House
in 1968, would give the Federal Trade Commission authority to obtain
court orders to stop fraudulent and deceptive practices promptly. Other
proposals would permit cancellation without penalty for 3 business days
after the signing of a door-to-door sales contract and would authorize a
Federal Trade Commission study of the home improvement industry.
Sometimes selling practices themselves may restrict consumer choice and
lead to higher prices. Often when a promotional practice is introduced by
one seller, the response from competitors is not to lower prices but to
introduce the same type of promotion. Trading stamps illustrate the
contagious nature of sales techniques. Although many buyers can choose
readily between stores that offer stamps and those that do not, other buyers
can do so only at substantial inconvenience. In fact, almost half of all food
sales in 1963 were made by merchants offering trading stamps. Therefore
consideration should be given to legislation that assures consumers a
choice between stamps and an equivalent cash discount.
Product Testing
Steps can also be taken to provide more complete and reliable product
information. Advertising is a major source of consumer information, but
it needs to be supplemented. The purpose of advertising is to stress the desirable qualities of particular items, not to set forth an objective appraisal
of the relative merits of competing products.
A few independent groups now test products and publicize their results,
but their ability to do so is limited partly because their financial resources
are not large. These activities could be supplemented by making available
HO
to the public the test data which various agencies of the Federal Government
have accumulated in connection with their procurement activities. As a
beginning, the Department of Health, Education, and Welfare and the
Veterans Administration have recently announced that they will release the
results of future product tests.
REGULATED INDUSTRIES
Electric power, most communications, natural gas, banking, securities
markets, insurance, and most public transportation are subject to detailed
regulation by Federal, State, or local agencies. The economic importance of
these sectors is great. They account for about 9 percent of national income,
and their prices and services affect many production and investment decisions throughout the economy.
Problems naturally develop in regulated areas where technology and
demand have changed rapidly. Existing regulatory practices need continuing review to determine whether established measures and institutions are
efficiently responding to changing technology. Moreover, regulatory issues
increasingly span the jurisdictions of several Federal agencies or cut across
the authority of Federal-State-local agencies. Some of the areas where
careful review might be most rewarding are identified below.
Utilities
Public utilities, especially electric and telephone companies, have made
impressive economic gains through high rates of productivity and declining
relative prices. Notwithstanding these gains, utilities might contribute more
to price stability if productivity improvement or cost savings were more
promptly translated into lower rates, with due regard to preserving the
incentives for increased efficiency and the ability of the companies to raise
new capital.
Electric Power* The two major characteristics of the electric power
industry in the last decade have been its rapid growth, now at 7 percent
a year, and the lower unit costs made possible by advances in technology,
increased interstate system coordination, and economies of scale. These
complementary trends have permitted significant reductions in rates charged
consumers, despite increases in many costs to the industry. These trends
should continue in the next decade; the National Power Survey estimated
that cost savings of as much as $11 billion annually (measured in 1962
dollars) are possible by 1980, if full advantage is taken of technological
progress and market potential, and if closer coordination of planning and
operations among the diverse ownership segments of the industry is achieved.
Regulatory programs must be reevaluated periodically and new programs
designed to ensure that these potential cost savings are fully realized and
promptly reflected in rates.
ill
Natural Gas. This important fuel has almost tripled its share of the
energy market in the last 3 decades and now supplies about one-third
of the Nation's energy requirements. Natural gas is subject to comprehensive
Federal, State, and local regulation. The Federal Government regulates
entry into interstate markets, wholesale rates, and conditions of service
and safety. In the 1960's, Federal regulation has resulted in relatively stable
rates, in contrast to the steep price increases that marked the preceding
decade. The new concept of setting a common price schedule for natural gas
sales in each producing area offers the expectation of an improved regulatory procedure.
Recently, rising costs—particularly taxes and bond interest rates—have
caused natural gas companies to file a rash of applications for rate increases.
Some applications also assert that higher rates are necessary to stimulate exploration for, and development of, future reserves. These contentions must
be recognized and dealt with expeditiously. Specifically, careful scrutiny
must be given to costing formulas, evolving technology, and to the future
adequacy of supply.
Securities Markets
A careful review of securities markets revealed several problems in the
thriving mutual funds industry. In particular, a provision of the Investment
Company Act prohibits dealers from reducing sales charges fixed by the
mutual fund underwriter. Many mutual funds have commission charges
considerably higher than those on most other security transactions.
In addition, stock exchange rules prescribe uniform minimum brokerage
commissions. The Securities and Exchange Commission is currently investigating this practice to see whether such limits on price competition can
be eliminated or modified without damage to security markets.
Transportation
The sector that appears to offer the broadest opportunities for further
regulatory improvement is transportation. Regulation was originally imposed
on railroads about 80 years ago, when competition from other modes was
minimal, to protect shippers and travelers from discriminatory treatment.
With the development of new modes of transportation such as pipelines,
trucking, and air carriers, the general pattern of railroad regulation has
been extended to cover them.
But technological change, rising consumer incomes, and extensive public
investment in transport facilities have led to greatly increased competition
among different forms of transportation. In the past two decades, some
regulatory decisions have insulated existing carriers and their patterns
of service and rates from that invigorating competition.
Competition. Statutory exemptions from regulation in water and motor
transport cover about 87 percent of the ton-miles moved on inland waterways
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and 64 percent of intercity ton-miles moved by truck. Free market decisions
involving rates and the amount and quality of service have worked satisfactorily in these exempted areas over a long period. Current antitrust laws
protect against improper carrier conduct.
Reliance on competition permits carriers to adjust rates freely. Regulators,
in contrast, have often required firms to keep rates up to the level of "fully
distributed costs," which reflect an arbitrary allocation of overhead. Air,
truck, and inland water carriers do not have the large indivisible inputs
characteristic of railroads and pipelines, such as rights-of-way and terminals.
Thus railroads have relatively high fixed costs, and if overhead must be allocated to each traffic unit on a rigid basis, the calculated average costs and
rate schedules may differ markedly from the variable expenses of additional
traffic. Minimum rates based on these average costs can divert traffic from
railroads even when they could offer the least costly mode of transportation.
A recent specific case illustrates this problem. The Interstate Commerce
Commission denied a request by the railroads to reduce their rate for handling ingot molds to a level lower than that charged by the competing bargetruck service. The proposed rate was below the railroads' fully distributed
costs, but above their marginal costs. On appeal, the Supreme Court held
that the Commission had the authority to determine which cost base to
use. The decision thus left it to the Commission to base its rulings on
marginal cost criteria when it thought appropriate.
To the extent that minimum rate regulation is continued, marginal
costs rather than fully distributed costs would most closely approximate the
pattern which a competitive market would produce. This principle, if
generally applied, would result in a much more efficient distribution of transportation resources and in lower costs to users of transportation services.
Entry. A better use of our potential transportation resources can also be
achieved by lessening regulatory barriers to entry—particularly for trucks.
A motor carrier now requires a specific grant of operating authority, a
procedure instituted in an earlier period of overcapacity. The problem today
is to serve a growing volume of traffic, which has expanded since 1961 at an
annual rate of 4 percent as measured by intercity ton-miles.
The Interstate Commerce Commission has issued over 100,000 grants
of operating rights to motor carriers, mostly at the time regulation was instituted. At present, securing new rights is difficult; moreover, some existing
rights are restricted to specific commodities, routes, direction of movement,
and territory.
GOVERNMENT PROCUREMENT
The Federal Government, the largest single buyer in our economy, purchased $54.7 billion of goods and services from the private sector in 1967.
Consequently, the manner and care with which the Government carries out
its purchases have a significant impact not only on the prices it pays but on
other prices throughout the economy.
Competitive Procurement
Because competition normally works to improve quality and keep prices
in line with costs, the Government has long relied on competitive bidding
whenever possible. In fiscal 1968, about three-quarters of the dollars spent
by the General Services Administration, the chief purchaser of general
supplies for the Government, involved formal bidding; another fifth involved
other procurement methods that stressed price competition. Currently 82
percent of all Government purchases are made by the Department of
Defense. Since many of these expenditures involve the development and
production of sophisticated weapon systems, they are less suited to conventional price competition. In fiscal 1968, only 38 percent of defense
outlays—up from 33 percent in fiscal 1961—utilized formal bidding or
other methods stressing price competition. However, varying degrees
of competition existed for a substantial portion of the remainder of defense
procurement.
Negotiated Procurement
Competitive procurement is most difficult to achieve for specially built
hardware, such as major defense systems, for which the Federal Government is the only buyer. When competition cannot be relied upon to hold
down costs, contracts providing incentives for cost reduction are desirable.
Fixed-price type contracts, in which the contractor shares in any cost reduction or cost escalation, have increased from 58 percent of all defense purchases in fiscal 1961 to 78 percent in fiscal 1968. Cost-plus-fixed-fee contracts, which provide less incentive for cost reduction, have dropped from 37
percent of the dollar volume to 11 percent over the same period.
Total Package Procurement, a major procurement innovation of the
1960ss, has extended competition and permitted more fixed price contracts.
It requires a binding commitment from the contractor on as much of the
production program as is feasible at the time of the initial award. This is a
significant departure from the earlier practice of conducting design competitions for development followed by cost reimbursement production contracts
with the developer. The new approach emphasizes the use of performance
specifications and provides tightened control over design and contract
changes, thereby reducing expensive modifications. Since the contractor is
committed to cost and performance figures for production units before detailed design begins, he has a strong motive to design for economical production, reliability, and simplicity of maintenance.
Single Source Procurement
Unfortunately, it is not possible to introduce price competition into all
purchasing. For example, Total Package Procurement is unsuited for pro-
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grams where needs or technology are changing rapidly, since technical uncertainties cannot be identified in detail before major work starts.
From the point of view of price stability, the least desirable situation is
the case of a "sole source" supplier, operating under a cost reimbursement
(rather than fixed price) contract. In fiscal 1968, 14 percent of the dollar
volume of defense procurement was in this category.
Such awards often reflect the special experience of one firm as well as
the uncertainties of technology. For example, only one particular firm is considered to have the capability to develop the Sentinel antiballistic-missile
system. Therefore, the Department of Defense will of necessity procure from
one source for this multibillion dollar program for some time. A large number of subcontractors are involved, however; and as soon as possible, major
items will be broken out and procured separately under competitive
conditions.
Great progress has been made in recent years in improving procurement
methods, but further progress is essential for improved price performance.
Efforts to encourage competition and to develop new methods of procurement must be maintained.
AGRICULTURE
Three main problems continue to confront agricultural policymakers.
Returns to the labor of some farmers and their workers are low, particularly
on smaller farms. Price fluctuations are severe as a result of weather, livestock production cycles, and international developments. And price instability
is compounded by excess capacity and a consequent chronic tendency to
produce more of certain major crops than the market can readily absorb at
reasonable prices.
Achievements of Agricultural Policies
In broad perspective, past agricultural programs have been successful
for commercial farmers. They have made it possible to eliminate the
burdensome surpluses of 1960. They have provided higher and more stable
prices than would have existed otherwise and thereby helped moderate
fluctuations in farm income. They have reduced risks associated with farm
planning, permitted more efficient business management, and encouraged
a substantial increase in the capital investment per worker. These factors in
turn have made possible gains in labor productivity of 175 percent since 1950.
Changing Farm Structure
Profound changes have occurred in the structure of the farm economy
in the 35 years since major farm price legislation was first introduced. The
number of farms has been halved. Total farm output and average farm size
have more than doubled. Differences in output per farm have become pro-
nounced. Fifteen percent of the farmers—those grossing $20,000 or more
annually—marketed two-thirds of the value of the 1967 farm output. More
than half of the farmers accounted for less than 7 percent of the total.
Farm income is a progressively less important part of the total income
of many operators of smaller farms. In 1967, farmers selling less than $2,500
in farm products received net farm incomes averaging only $1,018 but
had average off-farm incomes of $5,681. Nevertheless, there are many farm
families without such off-farm income whose total incomes fall below the
poverty line.
New Directions for Policy
In light of the changing structure of U.S. agriculture, proposals have
been advanced to modify price support programs. A reasonable limit on
the amount any one farmer could receive from Government payments
might provide annual savings approaching $200 million. Any such program, however, would have to be carefully designed to avoid major administrative difficulties and to preserve the incentives for acreage limitations. A Department of Agriculture study indicates that, in recent years,
farmers with gross annual incomes at or above $20,000 earned more for
their labor and capital than they would have with the same resources
in the nonfarm sector. This suggests that these highly efficient farmers have
a lessening need for economic aid. On the other hand, those with small
farms derive less than 20 percent of their income, on the average, from
farm sales. Hence some gradual restructuring of farm price supports to
bring market demand and supply into closer balance would have little
effect on their income, and payment limitations would not apply to them.
A better balance of equity among large farms, small farms, and consumers
would be achieved if more market-oriented price supports were accompanied
by: an expansion of the 1965 Cropland Adjustment Program (providing for
voluntary land retirement) ; more job training programs in rural areas;
continued emphasis on community resource development; and more effective
income maintenance programs for farm families in poverty (see Chapter 5).
A restructuring of farm programs along these lines could encourage
large farmers to continue to increase their investments and make full use
of the opportunities constantly being opened by new technology. They
would also have freedom to exercise the option of conserving land resources until market competition made profitable cultivation possible.
INTERNATIONAL TRADE AND PRICE STABILITY
Price competition is enhanced by the availability of imported products.
During periods of high employment, increased import competition helps to
offset the decline in the intensity of competitive behavior among domestic
producers which accompanies high over-all demand. Rising imports also
help to avoid the development of bottlenecks and shortages when demand is
n6
straining domestic capacity. They thus make a vital contribution toward the
moderation of inflationary tendencies.
There is no doubt that prices in industries subject to strong import competition would have risen faster if such competition had been restricted. For
example, steel prices increased by 35 percent between 1953 and 1961 when
imports were small, but only 7^2 percent between 1961 and the end of
1968 when growing world capacity led to an expansion of imports. There
is clear evidence that steel producers have been especially wary about raising
prices for product lines subject to heavy import competition, such as wire
and wire products, or hot rolled sheet.
To the extent that less expensive imported items enter into further
processing or manufacture, they reduce costs and permit lower prices for
final products. Thus the availability of imported yarn and fabrics, by reducing the costs of our apparel manufacturers, permits them to compete more
effectively against apparel imports. The competitiveness of our machinery
manufacturers in export markets is similarly enhanced by their ability to
obtain steel—imported or domestic—at prices lower than they would have
to pay if imports were restricted.
Impact on Domestic Industries
The increased flow of imports entails certain costs that must be weighed
against the benefits. It has cut into the markets of some important industries
(notably steel, textiles, and footwear) and a few agricultural sectors. This
has resulted in pressures for import restrictions, usually in the form of quota
limitations. An international arrangement controlling imports has been
in effect for cotton products since 1962, and a current issue is whether to
extend this type of arrangement to textiles made from wool and synthetics.
Quotas have been imposed on agricultural imports, usually to prevent the
growth of Government stockpiles. For a number of products, informal arrangements limiting imports are in force or are being considered as a more
flexible and less onerous instrument than formal quotas.
While imports are an important factor in a number of domestic markets,
they have not prevented expansion of the industries most affected. Steel,
textile, and apparel output has increased since 1960, and after-tax profits
have risen in all three industries. The rate of return on equity for these
industries has also improved considerably, although it remains below the
average for all manufacturing—as it has for many years.
It is important to emphasize that increased imports in these and other
industries reflect, in part, long-run changes in trade patterns resulting from
the natural development of the industrial structures of the United States and
its trading partners. The dynamic U.S. economy need not and should
not be insulated from these changes. The crucial issue is not whether
barriers to imports would increase employment and sales in the industries
affected, but rather whether our economy is offering ample employment
and investment opportunities, at the same or better conditions, in other
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pursuits. If these interindustry shifts impose transitional costs, such burdens
should be shared and alleviated by Federal adjustment assistance. Furthermore, fundamental shifts in efficiency should be carefully distinguished from
special situations such as dumping practices and export incentives given by
other nations. Some of these situations, as well as adjustment assistance, are
discussed in Chapter 4 along with other measures to ensure the two-way
nature of trade by keeping world markets open and fair.
National Security and Trade
A valid case for protecting a key industry can be made if national security
would be seriously threatened by a sharp increase in imports. The national
security rationale underpins the mandatory oil import program, which
imposes limits on petroleum imports. It may be desirable to reexamine the
security rationale to determine if the present administration of the program
best meets the objective. Some changes may be possible which, while preserving essential security objectives, would permit greater flexibility and ensure
an economical supply of petroleum feedstocks for the petrochemical industry.
VOLUNTARY RESTRAINT IN PRICES AND WAGES
The forces exerting upward pressures on wages and prices in a high
employment economy are broad and impersonal. The responses of wages
and prices to these pressures, however, are expressed through a multitude of
separate decisions by employees and employers, by sellers and buyers.
ROLE OF PRIVATE DECISIONS
These decisions must be made within the constraints imposed by the
market, constraints which operate on even the largest businesses and the
strongest unions. Nevertheless, major companies in highly concentrated industries have substantial discretion in their price and wage decisions, as do
many unions in the determination of wages. The way this discretion is
exercised by the majority of business executives and labor leaders can have
a substantial impact on the trends of prices and wages, even though no
single business or union can by itself have a decisive influence.
This imposes a grave responsibility on decisionmakers who have discretionary market power. Since the economic consequences of private price
and wage decisions bear so importantly on the public welfare, it is appropriate for Government to point the way in which these individual decisions
can best serve the public interest.
STANDARDS FOR DECISIONS
The Government has worked to evoke a general awareness of the importance of price and wage restraint among business, labor, and the public.
These efforts date back to the Economic Reports of President Eisenhower
118
in the late 1950's. A more explicit formulation was proposed in the Council's
1962 Annual Report in the form of the wage-price guideposts. In subsequent Reports, these guideposts evolved gradually—a process described
in detail in the Council's 1967 Annual Report.
As initially set forth in 1962, the guideposts stated:
The general guide for noninflationary wage behavior is that the
rate of increase in wage rates (including fringe benefits) in each
industry be equal to the trend rate of over-all productivity
increase. . . .
The general guide for noninflationary price behavior calls for
price reduction if the industry's rate of productivity increase exceeds the over-all rate—for this would mean declining unit labor
costs; it calls for an appropriate increase in price if the opposite
relationship prevails; and it calls for stable prices if the two rates
of productivity increase are equal.
The guideposts were never intended to apply in highly competitive sectors
where market forces determine prices and wages in an impersonal fashion.
They are applicable to markets in which discretionary power exists. Even in
these markets, short-run exceptions have always been recognized when
changes in relative prices and wages are necessary to facilitate shifts in
the use of labor and capital, or where substandard wages exist.
APPLICATION OF STANDARDS
Between 1961 and 1965, decisionmakers with discretionary power generally conformed to the pattern envisaged by the guideposts. There were
occasional departures, however. In particular, some industries with higherthan-average productivity gains did not reduce prices as unit labor costs fell.
The extent to which the satisfactory performance was enhanced by the
efforts of the Administration to urge the observance of the guideposts cannot be precisely assessed. But the history of key wage and price decisions
during this period indicates that these efforts did exert a distinct and significant influence.
The blemished price-wage record of the past 3 years reflects primarily
an excessive growth of demand. Indeed, the initial departures from the path
of price and cost stability were concentrated in farm products, raw materials,
and services where guideposts have little, if any, applicability. The same
forces also influenced price and wage decisions in areas of discretionary
market power. Once consumer prices started to move up sharply, increases
in compensation no larger than the productivity trend would not have led
to any improvement in real income. Workers could not be expected to
accept such a result, particularly in view of the previous rapid and consistent
rise in corporate profits.
Recognizing this situation, the Council, in its 1967 and 1968 Reports, did
not suggest that wage increases should be limited to the trend growth of
productivity. It did, however, continue to urge maximum possible restraint
in both wage settlements and price adjustments, and it continued to maintain the validity of the basic productivity principle for long-run price
stability.
With wage increases substantially in excess of productivity, it was also
recognized that production costs in many industries would rise and that
some price adjustments were inevitable. At the same time, with profits
generally at a high level, many industries were in a position to absorb
increases in labor costs either wholly or in considerable part. The Administration therefore continued to urge business executives to avoid or minimize
price increases.
This stress on the economy-wide consequences of discretionary price and
wage decisions has served an important educational role in addition to its
direct effects on prices and wages. The discussion of standards for prices
and wages has focused the attention of business, labor, and the public on
the inflationary results of individual actions that add up to demands for
income in excess of what the economy can produce. Awareness of this proposition has spread among key decisionmakers in both the business and labor
communities in recent years.
FUTURE ROLE OF COOPERATION
The cooperation of labor and business in the observance of voluntary
standards of price and wage behavior is an essential part of a full program
to combine high employment and reasonable price stability. Such cooperation must be viewed as a supplement to appropriate fiscal and monetary
policy and to measures for improving the efficiency of the economy.
The task immediately ahead is to make significant progress toward restoring price stability during 1969. The public and private policies essential
to this end are discussed in Chapter 1.
Once this has been achieved, however, the essential task for the longer
run will still remain. Mandatory price and wage controls are no answer.
Such controls freeze the market mechanism which guides the economy in
responding to the changing pattern and volume of demand; they distort
decisions on production and employment; they require a huge and cumbersome bureaucracy; they impose a heavy and costly burden on business; they
perpetrate inevitable injustices. They are incompatible with a free enterprise
economy and must be regarded as a last resort appropriate only in an extreme emergency such as all-out war.
Better ways must be devised of establishing standards for voluntary
restraint, and for eliciting cooperation from those who enjoy discretionary
market power. But if voluntary restraint is to be effective, better means must
be found of focusing the attention and eliciting the cooperation of all private groups concerned—business, labor, the public—in dealing with the
120
issue of maintaining reasonable price stability at high employment. The task
will not be easy since it requires that each group accept some sacrifice of its
apparent short-run interest in order to serve its own and the public's longrun interests.
In the past, neither labor nor business played a major role in the development of the guidepost approach. In the future, effective cooperation is much
more likely if those to whom the standards will apply participate in their
development. Persuasion can be helped by representation.
In view of such considerations, the President instructed the Cabinet
Committee on Price Stability to: "Work with representatives of business,
labor, and the public to enlist cooperation toward responsible wage and price
behavior . . ."
The institutional arrangements for increased business and labor participation can take many forms. This past year, the Labor-Management
Advisory Committee has begun the dialogue necessary to develop standards
that business and labor leaders might be willing to accept jointly. The
development of standards by such a cooperative effort would strengthen
the educational role of voluntary restraint and increase its effectiveness.
It is essential that the system remain on a voluntary basis. The principal
sanction consistent with voluntary restraint is the force of public opinion.
This means that decisions which significantly threaten the public interest
must be spotlighted. Since many wage and price decisions are complicated
and difficult to analyze, some competent authority must call attention to
flagrant departures from standards of responsible decisionmaking. Unpleasant as such a task may be, it is inescapable. The precise way in which this
task is carried out is less important than public acceptance of the necessity,
equity, and reasonableness of the procedures used to review price and wage
decisions.
CONCLUSION
This chapter has reviewed some of the programs which may improve the
ability of the economy to maintain reasonably stable prices at high levels of
employment. It has also reviewed the contribution that can be made by voluntary cooperation toward price and wage decisions consistent with the
public interest. Some conclusions emerge clearly.
It is not inevitable that pressures on labor supply should begin to appear when unemployment falls below 4 percent. It is not inevitable that
wage increases should substantially exceed productivity gains, and that
prices should begin to rise rapidly, as the economy reaches high employment.
It is not inevitable that price stability should be restored only through the
wasteful remedy of repeated doses of economic stagnation and high unemployment.
But to meet the challenge, the Nation must move ahead vigorously and
imaginatively on many fronts. Both labor and product markets require nu-
121
merous structural improvements, and voluntary restraint must make an even
greater contribution than in the past.
The task of reconciling price stability with high employment cannot be
accomplished by Government alone, or by business alone, or by labor alone.
It requires clear comprehension by all groups of the overwhelming importance of this goal.
And it requires an awareness of the bleakness of the alternatives: either
achieving stability by sacrificing high employment or realizing high employment by acquiescing in persistent inflation. We cannot, and need not, accept
either of these alternatives.
122
Chapter 4
The International Economy
I
N THE PAST TWO DECADES, enormous progress has been made in
building a closely knit international economy. Remarkable growth in
the volume of international commerce has gone hand in hand with sustained world prosperity; each has contributed to the other. At times, deep
and obvious strains in the international monetary system have imperiled this
progress, but these financial difficulties have been weathered without a serious setback in economic growth or world trade.
The world economy emerged from the Second World War in a gravely
weakened state, with many countries suffering severely from war damage.
International trade was disrupted, and exchange controls and bilateral trad'
ing arrangements were the order of the day. However, the recuperative
strength of the European nations, assisted by U.S. aid, resulted in rapid
economic recovery.
During the 1950's, the increasingly prosperous countries of western Europe
liberalized trade and capital movements substantially. Meanwhile U.S. capital exports promoted economic growth abroad, and our balance-of-payments
deficits contributed to a desirable expansion of world monetary reserves.
However, by the end of the 1950's, U.S. deficits were beginning to cause
concern. A nagging question was raised: Did the international monetary
system require continuous U.S. deficits and an intolerable, persistent weakening of the reserve position of the United States if serious reserve inadequacies
for other countries were to be avoided?
The growth of world trade and income has continued—indeed, has accelerated—during the 1960's. But there have been periodic monetary disturbances associated with expected or feared realignments of exchange rates.
While financial officials have shown wisdom and ingenuity in modifying and
strengthening the international monetary system, important problems remain. Recent major financial disturbances have emphasized the need for
further evolution to insure that the system can continue to support growing
wrorld trade and income.
This chapter briefly reviews the growth of world trade and output and
some of the key policy issues regarding our trade relationships with the
developed and less developed countries. The review is followed by discussion of international financial problems and by analysis of several current
proposals designed to strengthen the international monetary system.
123
ECONOMIC GROWTH AND WORLD TRADE
In the years since the Second World War growth has come to be accepted
as a normal feature of the world economy. It is easy to forget that this was
not the case in earlier periods. The depression years of the 1930's present
a particularly sharp contrast. But by any historical comparison, the economic
progress of the last 20 years is unprecedented.
World income has more than doubled since 1950. In the fifties, growth was
especially rapid in the western European countries, while in recent years the
United States has grown more vigorously (Table 12). Japan has experienced rapid and sustained growth throughout the period.
With their more rapid population growth, the less developed countries,
taken together, have experienced a slower growth of per capita income than
have the developed countries, even though total income has grown at about
the same rate in both groups of countries. Growth of per capita income
has varied widely among the less developed countries, in recent years ranging from high rates for Iran, Korea, Taiwan, and Thailand to virtual stagnation or even decline for some parts of Asia and Latin America.
TRADE AND TRADE BARRIERS
The rapid growth of recent decades has contributed much to the increase
in world trade (Table 13). A continuing reduction in trade barriers has
TABLE 12.—Growth of gross national product in developed and less developed
countries, 1950-67
[Percentage change per year]
Total real GNP
Per capita real GNP
Region and country
1950
to
1955
1955
to
1960
1960
to
1967
1950
to
1955
1955
to
1960
1960
to
1967
4.7
3.4
4.9
3.5
2.2
3.7
United States
Europe1
EEC2
Other countries3
Japan
.4.3
5.0
6.3
6.2
4 7.7
2.2
4.4
5.3
6.1
9.8
4.7
4.2
4.6
7.7
2.6
4.3
5.5
4.4
* 6.2
.5
3.6
4.4
4.6
8.8
3.3
3.2
3.6
6.3
9.3
Less developed countries5
4.7
4.5
2.8
2.2
2.5
5.1
5.0
5.9
4.2
3.8
2.3
2.1
3.4
2.1
1.2
1.7
3.9
1.9
2.5
1.3
Developed countries
Latin America
Near East6
South Asia
East Asia
Africa
o
3.4
o
o
o
10.4
5.0
46
6.4
4.3
5.2
3.6
°1.3
8
O
* Excludes Spain, Greece, and Turkey.
2 European Economic Community (EEC) consists of Belgium, Luxembourg, France, Germany (Federal Republic and
West Berlin), Italy, and Netherlands.
3 Consists of Canada, Australia, New Zealand, South Africa, and Japan.
i Change from 1952 to 1955.
5
Estimates based on countries for which data are available.
6
Includes Greece and Turkey.
7
Not available.
Note.—Data exclude U.S.S.R., other East European countries, Mainland China, and Cuba.
Source: Agency for International Development.
124
TABLE 13.—Growth of world exports, 1952-67
[Percentage change per year]
1952-53
1959-60
to
Region and country
to
1959-60
World total..
1966-67
1952-53
to
1966-67
5.7
8.1
6.9
Developed countries. _
Industrialized countries *
Other developed countries 2.
6.2
6.5
3.7
8.8
8.9
8.0
7.5
7.7
5.8
Less developed countries...
4.1
5.9
5.0
Latin America
Other Western Hemisphere...
Middle East
Asia excluding Japan
Africa excluding South Africa.
Other countries
2.3
3.1
9.4
4.2
3.4
7.3
5.1
3.5
8.3
4.0
7.8
6.1
3.7
3.3
8.8
4.1
5.6
6.7
By type of export:
Selected exporters of manufactures 3.
Selected oil exporters *
Other less developed countries
5.3
9.7
3.0
15.7
8.2
4.6
10.4
8.9
3.8
1 Includes United States, United Kingdom, industrial Europe, Canada, and Japan.
2 Includes other Europe, Australia, New Zealand, and South Africa.
3
Includes Israel, Hong Kong, Korea, and Taiwan.
* Includes Iran, Libya, Saudi Arabia, Venezuela, and Kuwait.
Note: Data include Yugoslavia, but exclude U.S.S.R., other East European countries, Mainland China, and Cuba.
Source: International Monetary Fund.
also stimulated trade. As a result of six multilateral trade negotiations within
the framework of the General Agreement on Tariffs and Trade (GATT),
levels of protection have been repeatedly lowered during the past 20 years.
As the staged tariff reductions negotiated during the recent Kennedy Round
are completed during the next 3 years, this downward trend will continue.
Even after these reductions, tariffs will remain a significant barrier to trade
and further efforts will be required to reduce them.
Nontariff Barriers
As tariffs have been reduced, other barriers to trade have increased in
relative importance. Nontariff barriers have been adopted for a variety of
reasons. For example, some import quotas are surviving remnants of supposedly temporary restrictions imposed by certain countries during periods
of balance-of-payments difficulties, as permitted under the rules of the
GATT. Other barriers result from domestic laws aimed at protecting
consumers, such as sanitary and health regulations. Government procurement policies discriminating in favor of domestic producers are another
form of nontariff barrier and are at times a serious impediment to international competition for government contracts.
While protection on industrial goods has been reduced in recent years,
restrictions on agricultural trade, including tariffs, have risen. These barriers
are of particular concern to the United States because they have proven to be
a major hindrance to U.S. agricultural exports.
125
323-166 O—69-
The GATT rules are interpreted as permitting a country to exempt exports
from indirect taxes and to impose on imports a charge equivalent to these
indirect taxes. Countries such as the United States that rely heavily on income or other direct taxes may suffer a disadvantage, since similar "border
adjustments" are not permitted for direct taxes. This urgent problem is
under intensive discussion with our trading partners.
Work on other nontariff barriers is going forward in the GATT. Continuing and concerted efforts are necessary both for the United States and for
its trading partners. Meaningful negotiations require that the United States
as well as foreign countries be prepared to make concessions.
The barrier maintained by the United States that is of greatest concern to our trading partners is the "American Selling Price" provision.
Under this practice, applicable to certain benzenoid chemicals and a few
other goods, tariffs are based on the prices of domestic products rather than
actual prices of imports.
During the Kennedy Round, conditional agreement was reached for the
United States to eliminate this provision, in return for commitments by
others to undertake additional reductions in tariffs on chemicals. In addition, Belgium, France, Italy, Switzerland, and the United Kingdom agreed,
as part of the package, to modify certain of their nontariff barriers. Legislation to eliminate the American Selling Price provision would permit this
significant agreement to be carried out.
Adjustment Assistance
The Trade Expansion Act of 1962 provided for adjustment assistance
to those injured by tariff reductions. It recognized that, because the gains
from trade are widely distributed to the consuming public, the Nation as a
whole should share the costs of adjustment associated with trade liberalization. In practice, however, the criteria of the Act have proved too rigorous.
In no actual case has it been possible to demonstrate, as required, both
that tariff reductions have been the major cause of an increase in imports
and that the increase in imports has been the major cause of serious injury
to an industry, firm, or group of workers. Legislative modification of these
criteria is required in order to establish an effective program of adjustment
assistance.
LESS DEVELOPED COUNTRIES
International trade and capital transfers have made important contributions to the growth of many less developed countries during the postwar
period, and they will have a major role to play in the future.
As shown in Table 13, less developed countries have not shared fully
in the growth of world trade. Apart from a few countries which export
manufactured goods or petroleum, exports of the less developed countries
126
have grown only about half as rapidly since 1952 as those of developed
nations.
Most of the less developed countries depend heavily on export earnings
from the sale of primary products. These products are subject to marked
year-to-year price fluctuations and in some cases to declining price trends,
making them a highly unreliable source of foreign exchange. Some experts have proposed formal international commodity agreements aimed
at changing market price behavior. While some commodity agreements are
already in existence, they have not provided a complete solution, and
few additional commodities appear suited to such agreements. Additional
borrowing arrangements to compensate for shortfalls in export earnings,
similar to the facility established by the International Monetary Fund
(IMF) in 1963, have also been suggested. The staffs of the IMF and the
World Bank have been studying the problem of volatile export receipts
and are expected to report soon on the additional part these two institutions might play in arrangements to increase the stability of foreign exchange
inflows to primary producers.
Tariff Preferences
In the long run, dependence of the less developed countries on primary
products can be lessened through increased exports of manufactured goods.
The advanced countries can assist in this process by removing some of their
current restrictions on imports of those manufactured and semimanufactured goods of particular interest to less developed countries. Since further
general tariff reductions seem unlikely in the immediate future, the granting
of tariff preferences to less developed countries may represent a way of
achieving a more rapid reduction of these barriers.
The 1968 United Nations Conference on Trade and Development
(UNCTAD) unanimously endorsed the early establishment of a system
of generalized nonreciprocal tariff preferences for less developed countries.
The United States and other developed nations are now engaged in discussions to determine whether a mutually acceptable system can be devised.
A generalized tariff preference system would help the less developed countries, but it wrould be only a modest step toward meeting their total foreign
exchange needs. The developed countries are likely to insist on excluding
certain products from the preference scheme, and trade in other commodities will continue to be restricted by quotas and other nontariff barriers.
Furthermore, the initial benefits of the preference scheme would go largely
to the minority of less developed countries that have already begun to export
manufactured goods.
Foreign Aid
The experience of the 1950's and the 1960's has demonstrated the value of
foreign assistance in promoting economic development. Foreign capital and
127
technical assistance from both public and private sources have been significant factors in the highly successful development efforts of such countries
as Greece, Israel, Korea, Mexico, Pakistan, and Taiwan.
While the total volume of foreign assistance has been growing during
the 1960's, it has not kept pace with the rising ability of the less developed
countries to make efficient use of such funds. Foreign assistance expenditures
by the United States rose sharply in fiscal 1962 but have not increased significantly since then. Unless the recent declining trend in appropriations is
reversed, expenditures must ultimately fall.
The International Development Association, an affiliate of the World
Bank, was established in 1960 to make credits available to developing countries on liberal terms. It has been an effective channel of multilateral
assistance, of which the United States has been a major proponent. However, its resources have been largely exhausted and replenishment is essential. It is important that the United States authorize its contribution
promptly, because the contributions of other countries depend on the U.S.
decision.
THE BRETTON WOODS SYSTEM
The rapid growth in the world economy in the post war period has been
built on a greatly improved financial base. At the 1944 Bretton Woods
Conference, the major industrial countries created through the IMF an
international monetary system based on pegged exchange rates. The system
has been strengthened by the great strides in cooperation in the IMF and
in other institutions such as the Organization for Economic Cooperation
and Development (OECD) and the Bank for International Settlements
(BIS).
This cooperation has paid handsome dividends in times of crisis. International understanding, carefully nurtured during periods of calm, has
permitted the multilateral assessment of problems and the determination
of mutually acceptable solutions. This was well illustrated in March 1968,
when decisions taken with respect to the private gold market ended the
immediate threat to stability and basically strengthened the system. At times
of severe strain, such as the British devaluation in 1967, international cooperation has contained crises and prevented chain reactions.
To be sure, the international monetary system has had its problems. Crises
have occurred all too frequently. Yet the system has consistently been able
to meet the needs of the day, it has evolved and adapted, and it can be
strengthened further to meet the remaining strains. While conserving proven
arrangements, governments seem increasingly ready to consider additional
improvements. Proposed evolutionary changes require careful study and
deliberation, based on widespread official and public discussions. It
is particularly important that these involve the bankers and traders
who would be directly affected. The following discussion is intended to
contribute to such a dialogue, rather than to make specific recommendations.
128
International monetary disturbances have centered around three interrelated problems: adjustment, confidence, and liquidity.
"Adjustment" is the process of reestablishing balance-of-payments equilibrium when a country is substantially out of balance. An adjustment problem
exists when the relevant forces and policies are either too weak to reestablish
equilibrium within a reasonable period or involve domestic or international
effects that are inordinately costly.
"Confidence" refers to the willingness to hold monetary assets. A problem
arises when holders either become dissatisfied with the safety of some of these
assets or see the possibility of profit in switching them abruptly into a different form. This problem is related to adjustment: dissatisfaction with a
currency often reflects a lack of faith in the ability of the issuing country to
eliminate its balance-of-payments difficulty without resort to a change in its
exchange parity.
"Liquidity" relates to international monetary reserves which are held
by countries to finance temporary balance-of-payments deficits. If world
reserves are too low or too high, or if their rate of growth is inadequate
or excessive, a liquidity problem exists. Liquidity needs are closely related to
adjustment: the less rapidly and effectively the adjustment process works,
the higher the level of reserves needed to finance temporary balance-of-payments deficits, and the less likely it is that any given level of reserves will be
adequate.
THE LIQUIDITY PROBLEM
A country incurs a balance-of-payments deficit when its payments to
other countries exceed its receipts from them, apart from "settlement items"
required to square accounts. The immediate consequence of a deficit is
that the foreign exchange market becomes unbalanced. More of the deficit
country's currency is supplied than demanded at the existing price of the
currency, and this will depress the price—the exchange rate. Because of
their commitment to a fixed exchange rate, however, central banks intervene
to limit the fall in the rate. The floor on the exchange rate is within 1 percent
of the official parity established by the country in agreement with the IMF.
In order to prevent the exchange rate from dropping below this floor, a
country in deficit must use its foreign exchange reserves to buy the excess
supply of its own currency. If the country has ample reserves, it will have
sufficient breathing space to restore equilibrium—without resort to policies
of excessive domestic restraint or direct intervention in external transactions.
If reserves are scanty, however, pressures will develop to deal immediately
with the deficit, even through undesirable means. If a general shortage of reserves should occur, economic growth could be retarded by widespread deflationary policies, and international trade and investment could be burdened
by restrictions. On the other hand, excessive amounts of reserves could unduly weaken the incentives of deficit countries to adjust, thereby encouraging
worldwide inflation.
129
TYPES OF RESERVES
Existing stocks of world reserves include gold, foreign exchange, and IMF
reserve positions.
Gold is the largest component of reserves, but gold holdings have expanded very little for many years; most recently, they have declined. As was
discussed in the Council's 1968 Annual Report, nonmonetary demand for
gold seems to be absorbing a substantial and increasing share of current
new production at existing prices.
The value of official gold reserves would be increased if the official price
of gold were raised. This action is explicitly rejected for compelling reasons.
Although it would immediately increase world reserves, it could not provide
the orderly growth of reserves needed by the world economy. It would grant
unearned windfall gains to private speculators, to gold producers, and to
countries holding their reserves mainly in gold; it would encourage speculation; and it would divert scarce resources into the production of a metal
already adequately supplied for nonmonetary uses.
The foreign exchange component of reserves grows only if the major
reserve currency countries, the United States and the United Kingdom, incur
balance-of-payments deficits; and if surplus countries are willing to hold
more dollars and sterling. Thus, as the foreign exchange component of world
reserves is expanded, the liquidity position of the reserve currency countries may be undermined. It is generally recognized that the United States
should not run large deficits, and policies have been formulated and implemented for reaching an acceptable payments position. The United Kingdom
also is determined not to run deficits and has in fact designed its economic
policy to yield balance-of-payments surpluses in order to retire external debt.
To some extent, such debt repayments will actually contract world reserves.
Thus world reserves cannot be expected to grow substantially through
expansion of official holdings of either gold or foreign exchange. Some limited expansion through normal IMF lending is to be expected. Reserve
positions in the Fund are expanded, however, only when countries draw on
the Fund beyond their "gold tranche" or automatic drawing rights. In so
doing, they accept obligations to repay. The natural reluctance of countries to become overcommitted to the Fund or to other countries through
borrowings sharply limits the probable expansion of reserves in this form.
SPECIAL DRAWING RIGHTS
In order to deal with the liquidity problem, steps have been taken to
create a new international reserve asset, the Special Drawing Right (SDR),
as discussed in the Council's 1968 Annual Report. SDR's will be allocated by
the IMF to member countries. They will be a form of owned reserves, usable
for balance-of-payments needs without an obligation of repayment. Their
use is subject only to the reconstitution provision, which requires that dur-
130
ing the initial 5-year period a country's average holdings of SDR's should
be at least 30 percent of its average net cumulative allocation over this period.
A draft outline of the proposed arrangements for issuing SDR's was approved at the 1967 meetings of the IMF in Rio de Janiero and subsequently
translated into legal form by the Executive Directors of the Fund. In
March 1968, at a meeting in Stockholm of Ministers and Central Bank
Governors of the major industrial countries, a consensus was reached on an
amendment to the IMF Articles of Agreement. The amendment was subsequently approved by an overwhelming majority of the Board of Governors
of the Fund.
The amendment was then submitted to member countries for ratification,
which requires acceptance by 67 member countries (total membership is
111) having 80 percent of the voting power in the IMF. By January 1, 1969,
the amendment had been accepted by 27 countries representing 47 percent of
the voting power. Seven countries have taken the further required step of
depositing with the IMF instruments of participation indicating that they
are prepared to carry out their obligations under the proposed amendment.
The United States, acting with overwhelming bipartisan support in the
Congress, was the first country to complete both of these steps. When participation has been certified by member countries having 75 percent of total
IMF quotas, the new facility will be established in the Fund.
Resolving the world liquidity problem requires actual creation of SDR's—
a major step beyond legal establishment of the facility. The basic decisions
lie ahead—namely when to activate the facility and in what amounts. These
decisions will require collective judgment concerning the desired growth
of world reserves and the portion of that growth which should take the form
of Special Drawing Rights.
THE NEED FOR RESERVE GROWTH
The problem of estimating reserve needs has attracted much interest among
economists and government officials in the last few years. The needed
volume of reserves depends in part on the probable size of temporary
balance-of-payments deficits which must be financed, because this affects
the judgment of monetary authorities as to the amounts of reserves
they need to hold. According to findings by the staff of the IMF, the magnitude of deficits requiring financing has tended to increase at the same rate
as the volume of world transactions. This suggests that the prospective growth
of world transactions might be a helpful guide to the required growth in reserves. Since trade in commodities makes up the largest portion of international transactions and is the one most reliably reported in statistics, it is
useful as an indicator of trends.
The historical relation between the growth of reserves and the growth of
trade (measured by imports) is depicted in Chart 9. Between 1950 and
1968 imports increased 7.6 percent a year, while reserves grew at only 2.5
percent a year. Thus, in the aggregate, reserves declined quite substantially
Chart 9
World Trade and Reserves
BILLIONS OF DOLLARS (ratio scale)
200 ~
150
WORLD TRADE
(ANNUAL IMPORTS)
100 "
20
1950
52
54
56
58
60
62
64
66
68-
.I/ESTIMATES BASED ON DATA FOR FIRST 3 QUARTERS.
NOTE.-TRADE DURING YEAR, RESERVES AT END OF YEAR. DATA INCLUDE YUGOSLAVIA, BUT
EXCLUDE U.S.S.R., OTHER EAST EUROPEAN COUNTRIES, MAINLAND CHINA, AND CUBA.
SOURCE: INTERNATIONAL MONETARY FUND.
in relation to imports, and probably in relation to the average size of deficits.
These over-all results are, however, heavily influenced by the large net decline
in reserves of the United States, the world's largest holder. The United States
was able to give up these reserves because of its excess holdings at the
beginning of the period. But this loss cannot continue. No other country now
appears to have excess reserves sufficient to replace the United States as a
willing and able net loser of reserves.
The relationship between growth of reserves and growth of imports is
significantly altered when the United States is excluded from world totals.
Between 1950 and 1968, reserves of countries other than the United States
grew 5.6 percent a year, on the average, while their imports grew at 7.8
percent.
Some have suggested that reserves in the future should grow at essentially
the same rate as world transactions—about 8 percent a year—to avoid any
further decline in the ratio of average reserves to potential deficits. However, the world economy has been able to adapt to reductions in this ratio in
the past. And a moderate further decline may be appropriate, both because
countries should have increasing access to borrowed reserves and because
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possible improvements in the adjustment process may reduce the need for
reserves.
Some guidance might be derived from the 5.6 percent growth rate of
reserves experienced between 1950 and 1968 by countries other than the
United States. In any case, a major increase from the very slow growth
of the past 2 years is needed. Whatever the desired rate of growth of
reserves, its achievement will depend mainly on the creation of Special
Drawing Rights, since other components of total reserves, as noted above,
are unlikely to expand significantly.
While it is still too early to make a decision about the proper size of the
initial issue of SDR's, amounts of $1 billion or $2 billion a year—which have
been used as illustrative examples of SDR creation—appear to be inadequate. These amounts imply a rate of reserve growth of only about 1.4 to 2.8
percent. With such slow growth, the SDR facility might fail to achieve its
objective of avoiding a destructive competition for reserves.
THE CONFIDENCE PROBLEM
Shifts in confidence can be reflected in two ways: through actions initiated in the private economy and through actions by governments. Private
holders of liquid assets constantly adjust the composition of their holdings.
When they decide to shift from the financial assets of one country to those
of another—a process described for simplicity as shifting from one currency to another—either exchange rates or official reserve holdings or
both are affected. In addition, shifts by private holders between currencies
and gold can have an impact on monetary stability, although the significance
of such shifts has been substantially altered by the gold accord reached in
Washington in March 1968.
PRIVATE SHIFTING AMONG CURRENCIES
Some shifts by private holders out of one currency into another are
merely responses to differentials in short term interest rates. Other shifts
among currencies may be induced by the expectation of, or anxiety about,
a change in exchange rates—and thus can be viewed as reflecting changes
in confidence. Such speculative movements occur when the payments and
reserve positions of some countries create significant uncertainties that
exchange parities will remain fixed. Speculative capital flows can result
from direct sales of the suspect currency for stronger ones, or through the
operation of the so-called "leads and lags" mechanism, under which normal
commercial disbursements denominated in foreign currency are accelerated
while receipts denominated in domestic currency are delayed. (This was an
important element in the 1968 French crisis.) A crisis of confidence can
severely deplete the monetary reserves of a nation. Flows of this kind can
be very large—up to $1 billion in a single day.
Crises resulting from shifts of confidence have occurred from time to
time. At different times in 1968, the Canadian dollar, the British pound,
and the French franc were under downward pressures, and the German
mark was subjected to upward pressures. As international businesses and
financial institutions have matured, additional currencies have been brought
into wide international use. Thus the number of currencies potentially subject to such crises has increased.
It is quite appropriate that countries should borrow reserves, if necessary,
to deal with temporary emergencies of this kind. The "swap network"
has traditionally provided lines of credit among central banks for this
purpose; it was expanded and enlarged during 1968. Further improvements could be made in central bank borrowing procedures through a proposal whereby speculative funds would be immediately "recycled"—returned to countries suffering losses from countries experiencing gains.
Even if generous lines of short term credit are available, they leave countries vulnerable, because crises may be long lasting. Lenders or borrowers
may be reluctant to renew loans, fearing overcommitment. Fortunately, in
recent years, improvements in cooperation among the central banks and in
the procedures of the IMF have reduced such fears.
However generous borrowing facilities may be, they cannot deal fully with
a crisis of private confidence that arises from a major disequilibrium in the
underlying balance-of-payments position of a country. In such circumstances, prompt and decisive measures to achieve a basic adjustment are the
key to the restoration of confidence. But the requirements for adequate adjustment are aggravated when a loss of confidence imposes a heavy drain on
reserves.
PRIVATE DEMAND FOR GOLD
Private asset holders may respond to a loss of confidence in a currency
by buying gold rather than other currencies, particularly when the choice of
a "safe" foreign currency is not obvious. Gold speculation is rather common
in many countries, although not in the United States where it is illegal.
Private imports of gold can be an important channel for currency flight and
thus become a claim on a country's reserves. Furthermore, because the price
of gold in the private market is sometimes used by speculators as a barometer
of confidence in currencies, increases in that price can intensify currency
runs.
While governments still retain some concern over private demands for
gold, they are now much less directly involved than prior to March 1968. For
the preceding 7 years, countries participating actively in the "gold pool" had
stabilized the price of gold in the private market in London by buying and
selling near the official price of $35 an ounce. In March 1968, these countries
agreed to discontinue their activities.
Prior to 1966, the pool was a net purchaser of gold, and the resulting
additions of gold to monetary reserves strengthened the international monetary system. Subsequently, however, the pool became a substantial net
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seller, parting with gold out of monetary stocks to keep the price from
rising. Following British devaluation in late 1967, and in the early months
of 1968, the volume of net gold sales became a serious drain on international monetary reserves. Moreover, the market took on a highly speculative tone. Several large and irregular waves of gold purchases had destabilizing domestic monetary effects in certain countries and transmitted
speculative fever to foreign exchange markets.
In March, the active gold pool countries agreed to cease selling gold in the
private market, and agreed that purchases of gold from the private market
were no longer necessary. They obtained the cooperation of other central
banks in this decision. As a result, the international monetary system has
been substantially insulated from the destabilizing effects of changes in the
private demand for gold, and gold can no longer be drained from monetary
stocks into private uses.
SHIFTS AMONG OFFICIAL RESERVE ASSETS
Problems may arise if monetary authorities decide to shift their holdings
abruptly among the various reserve assets. They may shift for political or
other reasons, but they are often motivated by changes in the relative
degrees of confidence attaching to the future values of these assets. For
example, if official holders, fearing a sterling devaluation, were to shift into
dollars, the United Kingdom would be forced to give up some of its international reserves. Likewise, if official holders of dollars decided to convert
them into gold, the United States would lose some of its reserves. Crises of
confidence may feed on themselves; for example, a significant decline in
U.K. reserves could further weaken the confidence of both official and
private holders of sterling.
Shifts out of officially held sterling by sterling area countries became a
serious problem following the British devaluation of November 1967. The
great majority of the sterling area countries did not devalue along with the
British; thus the purchasing power of the reserves of sterling holders was
reduced in terms of their own currencies as well as in dollars. This loss led
to a movement toward reserve diversification which became particularly
pronounced in the spring of 1968.
In recognition that the burden of such reserve diversification should not be
borne by the British alone, 12 industrial countries, including the United
States, together with the Bank for International Settlements, set up a new
$2 billion loan facility in September 1968. It was designed to provide finance
to Britain to replace reserves lost as a result of the decline of sterling balances within the sterling area. The BIS will act as an intermediary and will
obtain the required funds by borrowing in international markets, by accepting reserve deposits from central banks of the sterling area, and by calling
upon standby lines of credit provided by the cooperating countries. The
United Kingdom has given a dollar-value guarantee to the sterling area on
eligible official sterling reserves, and the sterling-area countries in return have
undertaken to maintain an agreed proportion of their reserves in sterling.
The new facility should go far toward moderating the sterling diversification
problem.
Some observers have pointed to the possibility of large-scale conversions
of dollars into gold by central banks. The likelihood of such an abrupt shift
of preferences must, however, be viewed in perspective. There are several
reasons why countries choose to hold dollars. Dollars are useful because
they can be readily employed in exchange markets and are more easily put
to use in emergencies than gold. Countries recognize that they can convert
dollars to gold as they see fit, although they may at times refrain from gold
conversions through a cooperative desire not to weaken the international
monetary system by reducing total world reserves. Dollars—unlike gold—
earn interest, and the efficient American money and capital markets make
investment easy. Thus there is and should continue to be a strong demand
for dollars by central banks.
Some central banks have a preference—arising mainly from tradition—in
favor of gold as a reserve asset. They often appear unconcerned about earning
interest on reserves, perhaps because their income is usually turned over to
their national treasuries.
When dollars are acquired by countries with a preference for gold from
countries with a preference for currencies as reserves, conversions into gold
may occur. This could happen even with no increase in total dollars held
abroad and no shift in general sentiment toward gold or away from the
dollar. Furthermore, as world reserves grow, there would be a demand for
added gold if countries attempted to maintain their "traditional" ratios of
gold to total reserves. However, countries recognize that gold will decline as
a proportion of total world reserves. And as the SDR agreement indicated,
they seem prepared collectively to adjust the composition of their reserve
holdings.
Preferences that now exist among sterling, dollars, and gold could
become more complicated as SDR's are added, thereby creating further possibilities for shifts in the composition of reserves. Certain safeguards, however, were provided in the plan: the power given the IMF to direct SDR's
to various holders was designed to prevent inadvertent destabilizing shifts
from SDR's into other types of reserves. Furthermore, additional SDR's
could be created to offset world reserve losses arising from shifts among
reserve assets.
PROPOSALS FOR IMPROVING RESERVE MANAGEMENT
It has been suggested that agreement on mutually acceptable rules of
reserve management might help to avoid destabilizing changes in reserve
composition. If deficit countries used each of their reserve assets in proportion to its share in their total holdings, and if surplus countries were
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willing to accept and hold different types of reserves in the exact proportions made available, the system would be internally consistent. Before
such rules could be endorsed, their workings would need to be examined
and agreed upon in detail.
A more sweeping suggested reform would be to eliminate the differences
among reserve assets. Countries could combine all their reserves by depositing them in a joint account, which would be drawn upon when reserves were
used. Such a scheme was discussed in the September 1968 Report of the Subcommittee on International Exchange and Payments, of the Joint Economic
Committee (JEC) of the Congress. In an examination of proposals of
this kind, many questions arise which would require careful study: What
would be the role of the United States? Would participation be voluntary
or compulsory? Would countries be permitted to withdraw from the pool?
In view of the progress already made in dealing with world liquidity and in
strengthening international cooperation, how urgent is such a major reform?
THE ADJUSTMENT PROBLEM
The Bretton Woods system was designed to correct the weaknesses in the
international monetary system that were apparent in the interwar years.
Faced with domestic economic collapse during the 1930's, some countries
attempted, by deliberately undervaluing their currencies, to stimulate exports, retard imports, and thus add to employment. But one country's gain
was another country's loss. Competitive devaluations, and restrictions on
exchange and trade, imposed a heavy toll on international commerce.
The postwar economy was built upon the general understanding that full
employment would be the target of national economic policies, and that this
goal would be sought primarily through domestic monetary and fiscal policies. It was also expected that excessive price increases would normally be
avoided. In the absence of both chronic deflation and chronic inflation, continuous balance-of-payments problems were viewed as unlikely. The IMF
was to help in the adjustment process by granting credit to allow countries
time to adjust without parity changes.
Provisions were included to put pressure on surplus countries to take an
appropriate part in the adjustment process—for example, the "scarce currency" clause, which permits discrimination in trade against persistent surplus countries whose currencies are formally declared to be scarce. Under
these conditions, a system of stable exchange rates was expected to operate
successfully and to stimulate international trade and capital movements,
while removing the temptation for governments to solve domestic problems
by external means.
Although pegged parities were made the normal operating rule of the
system, provision was also made for changing parities to correct fundamental
disequilibria. The meaning of "fundamental disequilibrium" was not fully
clarified, but the expectation at the time was that changes in parities would
not be unusual. Actually, parity changes for developed countries have been
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rare. In part, this is because major countries have been reasonably successful
in avoiding excesses of inflation and deflation; but it also reflects concern
about the serious economic and political consequences of changes in the parities of major currencies, including the possibility of a worldwide chain
reaction. Furthermore, greater freedom for international capital transactions
has complicated the process of changing parities.
CAUSES OF DISTURBANCES
Despite the real accomplishments of stabilization policies, the international
economy has been subject to disturbances. Some have been caused by the
relatively mild cyclical fluctuations that have occurred, and others by differences among countries in long term trends of prices, economic growth, technological advance, and import demand. Countries differ with respect to
the maximum rate of price increase—or the maximum volume of idle
resources—that they view as tolerable. In general, a country incurring price
increases greater than the average of other countries will find its exports
becoming less competitive and its domestic market more accessible to imports.
Countries which grow particularly rapidly tend to experience stronger increases in imports (although they may simultaneously improve the competitive position of their exports). Or a country may experience long term
deterioration in its external position if its demand for imports is more responsive to income growth than is the demand for its exports. These factors,
singly and in combination, have led to some serious imbalances.
Adjustment problems may also reflect, in part, an insufficient growth of
global reserves. When over-all reserves are growing only slowly, there can
be acute pressures on deficit countries to adjust. At the same time, surplus
countries may find that their reserves are not accumulating too rapidly;
hence they may have little incentive to correct their imbalances. A world
shortage of reserves could particularly complicate the adjustment problem
of the United States, subjecting it to intense pressures from other countries
in weak payments positions or from countries not satisfied with their reserve
holdings. The United States might literally be prevented from correcting
its balance-of-payments deficit, because every improvement in the U.S.
position would cause some other countries to take protective actions to
counter any weakening of their own positions.
There are a number of means open to a country for correcting balanceof-payments disequilibria without altering its exchange rate. These means
differ in speed, in effectiveness, and in their side effects. They include internal measures such as fiscal and monetary policies, together with supporting
incomes, manpower, and regional policies; and direct measures affecting
international movements of goods, services, or capital.
INTERNAL ADJUSTMENTS
Often the domestic policies which would contribute to balance-of-payments adjustments are also desirable for domestic reasons. Thus if a country
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faces a balance-of-payments deficit and rapidly rising prices, it should follow
tighter monetary and fiscal measures, supported by incomes policy to help
restrain wages and prices, both to improve its trade balance and to curb
inflation. Indeed, one argument sometimes made in favor of a system of
fixed exchange rates is that balance-of-payments deficits stiffen the resolve
of governments to achieve price stability. Conversely, if high levels of unemployment are accompanied by payments surpluses, expansionary domestic
policies are clearly indicated.
However, a country may face a balance-of-payments deficit at a time
when domestic demand is not excessive. It will then be understandably reluctant to attack its payments problem by restrictive monetary and fiscal
policies. The opposite problem may arise if a payments surplus occurs when
the domestic situation calls for anti-inflationary policies.
While the situations of surplus and deficit countries are symmetrical, incentives to adjust may not be equally strong in the two cases. There is no definite limit on the accumulation of reserves, so surplus countries often are
under little pressure to restore equilibrium. But for deficit countries whose
freedom of action is constrained by a limited supply of reserves, pressures to
take corrective action may become inexorable. If real progress is to be made
in achieving a better balance of world payments, it is crucial that surplus
countries participate in the adjustment process, as was indicated in the 1966
Report on the Balance of Payments Adjustment Process by Working Party
No. 3 of OECD.
Changes in the Policy Mix
There are some opportunities to mitigate conflicts between international
and domestic goals by altering the mix of monetary and fiscal policies. By
influencing interest rates, monetary policies have direct effects on capital flows
as well as on domestic demand. If a country has a balance-of-payments
deficit and a satisfactory or inadequate level of domestic demand, fiscal policy
may be eased and monetary policy simultaneously tightened. This combination can, in principle, avoid any reduction of internal demand, and capture
the benefits of tighter money in reducing capital outflows or attracting
foreign capital. Thus it may be possible to improve the balance of payments
without adding to unemployment. The reverse combination of policies may
be used by countries facing the surplus-inflation dilemma.
While changes in the mix of monetary and fiscal policy have significant
possibilities, and they can be reinforced by appropriate incomes and manpower policies, such adjustments cannot always be relied upon as an escape
from major conflicts in objectives.
Some of the balance-of-payments gains resulting from interest rate adjustments may be temporary. A change in interest rates may initially cause investors to make large adjustments in the composition of their existing portfolios of financial assets. Once this initial stock adjustment is completed, however, further gains from this source may be quite small.
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There are limits on the willingness of countries to alter the mix of
monetary and fiscal policies. A deficit country may hesitate to raise interest rates, fearing that such a move would deter capital formation and
thereby curtail the improvement in productivity that may be a basic solution to its balance-of-payments difficulties. Or high interest rates may be objectionable because of their uneven impact on the domestic economy. Or a
growing level of foreign indebtedness may be undesirable because it will increase the burden of service payments.
Finally, increases in domestic interest rates may lead to higher interest
rates abroad. In that event, the differentials between foreign and domestic
rates may diminish, weakening the impact on capital flows. In the absence
of international coordination of monetary policies, efforts by deficit countries to tighten credit may lead to a worldwide escalation of interest rates.
This may not only impede the immediate objectives of the deficit countries
but may also dampen world economic growth. Clearly, the adjustment
mechanism could benefit from a continued strengthening of international
cooperation in this area of policy.
Thus there are often important limitations on the practical scope for adjustments in the monetary-fiscal mix as a means of reconciling domestic and
international objectives. One important principle stands out. In a country
with a serious balance-of-payments problem, the use of monetary policy for
expansionary domestic purposes may be severely constrained; and primary
reliance may therefore have to be placed on fiscal policy to pursue stabilization objectives. In the United States and in many other countries, this
implies the need for greater speed and flexibility in the implementation of
fiscal measures.
MEASURES DIRECTLY AFFECTING INTERNATIONAL TRANSACTIONS
In the OECD Adjustment Process report, it was recognized that fiscal
and monetary policies, no matter how skillfully combined, cannot always
be relied upon as the exclusive means of balance-of-payments adjustment.
Given the many goals of economic policy, numerous instruments are needed.
Under some circumstances, the report suggests the use of measures directly
affecting international transactions.
Most countries do make use of specific measures affecting trade or capital
movements as part of their adjustment. These policies may help to reconcile
domestic and international objectives. Such measures as import duties or
quotas, export subsidies, changes in border taxes, and taxes and prohibitions
on international capital movements offer opportunities for improving the
payments balance while avoiding major effects on the domestic economy.
Some of these measures, such as special tariffs and export subsidies,
are prohibited by the GATT, but their use has at times been sanctioned, implicitly or explicitly, so long as they were considered temporary. Likewise,
exchange controls on current transactions are generally discouraged for
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countries accepting the full obligations of convertibility in the IMF, but
specific authorizations have been granted under emergency conditions.
Trade Measures
The only trade measure explicitly condoned by the GATT for safeguarding the balance of payments is the use of temporary quantitative restrictions. Quotas on imports can be a very powerful instrument. But they
can be very disruptive of normal commercial arrangements, troublesome to
impose and administer, and difficult to abandon. Over the last few years,
developed countries have shown a growing preference for the use of import
surcharges, export subsidies, or combinations of the two.
At times, countries change their normal pattern of tax adjustments at the
border in an attempt to promote balance-of-payments equilibrium. When a
deficit country is taking only partial advantage of its opportunity under the
GATT to make border adjustments for domestic indirect taxes, it can help itself by moving to full compensation. However, such action by a surplus
country conflicts with the policies that should be followed for balance-of-payments adjustment. For example, on January 1 and July 1, 1968, in conjunction with an internal tax reform, the German government raised its rate
of border adjustment. This tended to increase the German merchandise
surplus—much as a small devaluation of the mark would have done—and
at a time when Germany's balance-of-payments position was very strong
indeed.
Another example of a change in a domestic tax which permitted an increase
in border adjustments was the action taken by the French government in
November 1968. A rise in value-added taxes, which are eligible under the
GATT for border adjustments, was substituted for the existing payroll tax,
which was not eligible. In this case, the aim of the increase in border adjustments was to help restore over-all payments equilibrium.
Also in November, the German government reduced by 4 percentage
points its border charge on most imports and its tax rebate on most exports,
without any corresponding domestic tax changes. This measure was taken
deliberately to reduce the large German trade surplus and had effects somewhat similar to an upward valuation of the mark.
When countries resort to trade measures to affect their balance-of-payments positions, efforts should be made to minimize distortions. General import charges imposed by themselves favor production for the domestic
market, thus shrinking the volume of international trade, while general
export grants alone unduly favor production for export. When general import charges are combined with general export grants at the same rate,
these two tendencies offset each other, with no more distortion of merchandise trade than would result from a devaluation.
Even such a uniform and general combination of import charges and export grants would distort the choice between merchandise transactions and
other international flows, such as tourism. Furthermore, serious misalloca141
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tions could occur if exemptions were given individual industries or classes of
products. Finally, even under the best of circumstances, temporary trade
measures may in practice become embedded and thus should be used with
great caution. Nevertheless, this approach may be useful under some conditions. It should be explored further to determine whether proper safeguards
can be established to ensure that equal use is made by surplus and deficit
countries, and that the goals of liberal commercial policy are maintained.
Capital Account Measures
All major countries take actions at times to influence international capital
flows. The techniques employed range from special incentives for domestic
investment to exchange controls and capital issues committees. There is
some rationale for concentrating on the capital account, since fewer basic
adjustments in the allocation of real resources are required by shifts in
financial flows than by changes in trade. And measures to influence the capital account are generally more easily reversed in response to shifting balanceof-payments fortunes.
Sometimes, however, restraints on capital movements develop into a
patchwork of controls that involve major administrative difficulties, bear
down unevenly and inefficiently on different types of capital flows, and
create a search for loopholes. The distortions can be reduced to the extent that restraints can be applied more equally among categories of capital
flows and interference can be minimized within any particular category.
There may be opportunities to make greater use of the price system by
applying variable taxes to capital flows or by auctioning permits to export
capital. While the allocation of capital might be improved and administrative burdens eased by innovations in the techniques of controlling capital
flows, any system of major restraints is bound to be far from ideal. The
possible need for temporary direct measures on the capital account must be
recognized, but so should the long term benefits of greater freedom in capital
flows among nations.
THE ADJUSTMENT PROBLEM OF THE UNITED STATES
The difficulties of balance-of-payments adjustment for deficit countries
are evident from the recent experience of the United States. In the early
1960's, the United States was faced with a payments deficit at a time when
its economy was operating far below capacity.
The causes of the deficit were numerous. The United States was shouldering an extraordinarily large share of the burden of providing for the security
of the Free World and of supplying aid to less developed countries. The
United States possessed the only large and sophisticated capital market in
which foreigners could borrow freely, and the European countries had
advanced to the point where they desired capital and could attract it. Moreover, because of Europe's general economic progress and the formation of
the EEC and the European Free Trade Association, American companies
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had developed an intense interest in making direct investments there. Finally,
the U.S. competitive position had deteriorated during the 1950's.
The Over-All Strategy
In the early 1960's, U.S. domestic needs called for expansionary policies,
while traditional balance-of-payments remedies would have required greater
restraint on demand. To reconcile this conflict, a mixed strategy was followed. It emphasized those elements in the domestic expansion which
tended to improve international competitiveness, together with specific
measures of a temporary nature to influence the external position. The
selection of balance-of-payments measures reflected several concerns: the
determination to maintain, as far as possible, liberal policies with respect
to international trade and capital flows; the desire not to shift problems
to countries in a weak balance-of-payments position; and the need to maintain the stability of the international monetary system, which was so crucially
dependent on the dollar. Further difficulties in designing appropriate balance-of-payments measures arose from uncertainty over how much correction
was needed, from the unpredictability of the immediate quantitative impact
of particular actions, and from the large and uncertain "feedback" effects
inherent in the large size of the United States.
Some policies were clearly desirable on all counts, such as improving
knowledge with respect to export prospects, trimming unnecessary government expenditures abroad, encouraging other industrial countries to give
larger amounts of aid to less developed countries, pressing for a more
equitable sharing of military burdens, and removing a tax penalty on
foreigners trading in American securities.
Reducing the Impact of Government Activities
A further group of measures to reduce the foreign exchange costs of U.S.
military and foreign aid required more difficult decisions. In principle, savings of foreign exchange in the military area could have been pursued
through three alternative strategies: (1) reducing the level of security, (2)
obtaining increased contributions of military forces from other countries, or
(3) reducing, offsetting, or neutralizing the foreign exchange costs of a maintained level of U.S. military effort. The first alternative was ruled out. The
second was pursued but with little immediate prospect of success. Thus the
third became the approach emphasized in the short run. Domestic producers
were given a preference over foreigners in supplying defense needs, at some
added cost to the Federal budget. Foreign governments were urged to purchase more of their military equipment in the United States. In recent years,
special U.S. Treasury bonds have been sold to countries to neutralize their
balance-of-payments inflows from U.S. military expenditures.
Reducing the foreign exchange costs of U.S. aid presented an equally
difficult choice. Either the amount of foreign aid had to be reduced, or a
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method had to be found to ensure that more of the money provided by the
United States was spent in this country. The second alternative—aid-tying—
was chosen. This tended to reduce the effectiveness of a given dollar amount
of aid, but the alternative of slashing the volume of aid would have been
even more costly to recipient countries.
Restraining Capital Outflows
While gains were obtained through these measures in the early sixties, the
over-all payments problem was intensified by a major increase in private
capital outflows. Faced with an apparently insatiable demand for capital
abroad, the United States had the choice of raising domestic interest rates
enough to price foreigners out of our market, of taxing foreign loans specifically, or of using direct controls to stop capital outflows. The first alternative
was inconsistent with domestic needs for economic expansion. The second
alternative was chosen when the Interest Equalization Tax (IET) was
proposed in 1963. It substantially reduced foreign portfolio investments
by Americans, except new security issues from Canada and investments in
less developed countries, which were exempted. But demand for capital
shifted to American banks, so the IET was extended to longer term loans
of banks. Other types of bank loans and direct investment were not covered
by the tax, and these forms of capital outflow kept expanding.
In response to a large outflow of capital at the end of 1964, voluntary
programs were initiated in February 1965 to cover the major remaining
capital flows. The American corporations which were large direct investors
were asked to help by reducing their capital expenditures abroad, by relying
on foreign financing for a greater share of their investments, or by expanding reflows of dividends to the United States. Banks and other financial
institutions were meanwhile asked to follow guidelines established by the
Federal Reserve Board which suggested quantitative limits on foreign
lending.
Most, if not all, of these measures have been successful in achieving the
objectives for which they were designed. The basic balance-of-payments
position improved through 1964 and 1965, and the liquidity deficit was
sharply reduced. Further progress was interrupted in 1966 by the mounting
foreign exchange costs associated with the war in Vietnam and by the reduced trade surplus resulting from overly rapid domestic expansion.
Because the U.S. external position deteriorated sharply late in 1967
and the stability of the international monetary system seemed in serious
danger, a new set of measures was proposed by the President on January 1,
1968. This program included mandatory restrictions on foreign direct investment, further tightening of the guidelines on lending by banks and other
financial institutions, and various other steps to reduce the deficit. The program was successful. As noted in Chapter 1, the balance of payments has improved. In particular, American direct investors have managed to finance a
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much greater proportion of their investments abroad by foreign borrowing,
and there has been a net reduction in U.S. bank credit to the rest of the
world.
With the exception of more timely action to assure adequate domestic
restraint in recent years, it is hard to see, even in retrospect, any preferable
strategies in U.S. policies to correct the deficit. The eclectic, ad hoc measures
that were taken involved certain costs. But they maintained the strength of
the dollar and the health of the world economy. More basic improvements
lie ahead—pending peace and the restoration of price stability.
EXCHANGE RATE ADJUSTMENTS
An efficient international adjustment mechanism should permit countries to choose their own domestic economic targets for growth, employment, and price-cost performance. Policies that restore balance at home
should not lead to pressures on the international accounts—in the form of
either excessive accumulation or rapid depletion of reserves.
Suggestions have been put forward for amending the adjustment mechanism to lessen the conflict between domestic and balance-of-payments
objectives. It is claimed by some that greater reliance on changes in exchange
rates would work in this direction.
PRESENT SYSTEM
Present IMF rules provide for adjustments of exchange parities as a
means of correcting a fundamental disequilibrium. In practice, however,
the process of exchange rate adjustment may involve major difficulties; and
in consequence, there is often extreme reluctance to change exchange
rates even when balance-of-payments difficulties are severe.
To illustrate, the currency of a country with a large and persistent deficit
will become widely recognized as a candidate for devaluation and this may
touch off a crisis in private confidence, as discussed above. Speculation based
on the prospect of devaluation will aggravate the initial balance-of-payments
difficulties and increase the outflow of reserves. To discourage such speculation, governments tend to make categorical assertions that devaluation is
not being considered; once such assertions have been made, it becomes a
matter of national pride and political reputation to maintain the parity.
Furthermore, an actual adjustment in an exchange rate may generate the
expectation of a further change; once an exchange parity has been adjusted,
a second adjustment seems less unthinkable. Fear of such a perverse reaction
may cause a country to depreciate by an excessive amount in the first instance. This may lead other countries to devalue also, thus reducing the
potential balance-of-payments gain of the initiating country. Such a chain
reaction can severely disrupt foreign exchange markets. Thus the difficulties
*45
associated with parity adjustments have at times driven countries to commit
themselves to existing parities in all but the most extreme situations.
PROPOSALS FOR EXCHANGE RATE FLEXIBILITY
A number of suggestions—ranging from minor adjustments to far-reaching
changes—have been made for altering the current exchange rate arrangements of the IMF.
The most sweeping change, advocated primarily by some academic economists, would be to abandon the pegged exchange system in favor of "floating
rates," completely free to fluctuate in response to market forces.
In contrast, other proposals call for a modest widening of the existing 1
percent limit on fluctuations of rates on either side of parity. Still another
type of proposal would provide for small but frequent changes in parities.
Each of the proposals is intended to make adjustments in exchange rates
a more acceptable and effective means of correcting payments imbalances,
and to reduce the speculative disturbances that sometimes develop under
the present system. Opinions differ widely over the probable effects of the
various proposals; intensive study would be required before serious
consideration could be given to the adoption of any of them. The dramatic
advances in world trade and prosperity achieved under the present system
provide a strong case for conservatism in considering innovations; at the
same time, the recurrence of financial strains has aroused widespread interest in possible amendments to the system.
In general, the wider the latitude for changes in exchange rates, the
greater would be the amount of adjustment provided; but also the greater
would be the uncertainty of those engaged in international commerce and
the possibility of a disturbance to trade and investment relationships.
Floating Rates
While a system of floating exchange rates would ensure essentially automatic adjustment to balance-of-payments disturbances, serious questions
arise about its operation.
Advocates of flexible exchange rates are divided on whether official
intervention in exchange markets should be permitted. A complete ban
on official intervention would be a very radical change, obviating any need
for central banks to hold international reserves. Exchange rates might fluctuate quite widely, causing substantial uncertainty. If, on the other hand,
official intervention were permitted under a system of floating rates, it might
smooth out transitory fluctuations in exchange rates, but it would open up
the danger of exchange rate manipulation. For example, a government might
wish to drive down the price of its currency in order to strengthen the competitive position of its exports. It is difficult to devise rules which would permit desirable smoothing and yet ban manipulation.
146
In general, fluctuating exchange rates would require shifts of resources
among industries that export, those that compete with imports, and others,
as relative prices in world markets reflected changes in exchange rates. Moreover, uncertainty about future exchange rates would concern international
traders and investors. They could obtain some insurance by entering forward
exchange markets, buying or selling foreign currencies at definite prices for
delivery at some specified future date. But such forward transactions might
be quite expensive and thus add to the costs of world trade. Furthermore,
international investors might not be able to satisfy their needs for protection
in forward exchange markets, given the long time horizon of many capital
transactions.
Advocates of floating exchange rates believe that the benefits outweigh
the costs of these uncertainties. They point out that uncertainty about exchange rates is not unique to a system of floating rates. Indeed, no feasible
international system can guarantee against exchange rate adjustments. Moreover, they emphasize that international businessmen live with many uncertainties, both political and commercial. Finally, it is their contention—not
universally accepted—that, under floating rates, there would be an easing
of pressures for exchange controls and trade barriers.
The adoption of floating exchange rates would constitute a drastic
change in the international monetary system. If the present system were
functioning very badly and if no other possibility of reform were available,
there might be a compelling argument for adopting this one; but such is
not the case.
Wider Bands
Under present arrangements, day-to-day market pressures can be reflected
in small fluctuations of each exchange rate within a narrow band. Central
banks of countries other than the United States intervene in the market by
buying and selling foreign exchange to keep the dollar prices of their currencies within 1 percent or less of established parities. The United States
rounds out the system by selling and buying gold in dealings with central
banks at $35 an ounce. Proposals have been made by the JEC Subcommittee
on International Payments and by others to introduce greater flexibility
of rates by widening the permissible band of fluctuation around the par
value. With a band of 2 percent on either side of parity, the exchange rate
between two nondollar currencies could change by as much as 8 percent.
Suggestions for a wider band, like other proposals for greater flexibility in exchange rates, are not directed at the official price of gold. The latter is not
an exchange rate. There is no need whatsoever for it to be altered to accommodate greater flexibility of exchange rates.
A widening of exchange rate bands could contribute to the adjustment
process. The currency of a country with an incipient deficit would fall in
price, thus making imports more expensive and lowering the cost of exports
147
to buyers in world markets. Imports would be discouraged and exports stimulated, strengthening the balance of payments. If the exchange rate approached the floor with its future course expected to be upward, the stimulus
might be particularly strong; there would be an incentive to take advantage
of the temporary low price of the country's exports.
Advocates of a wider band believe that it might deter speculative runs in
two ways. First, the additional adjustment permitted by the wider band
might make discrete changes in parities appear less likely, thus reducing uncertainty. Second, a wider band would increase the potential loss on a
"wrong bet" against a currency. Under the present narrow band, the speculator has relatively little to lose if he bets against a currency and it is not
in fact devalued. With a wider band, the risk of loss would be increased,
because a currency that was initially under pressure could experience a larger
rebound in price. There is, however, no concrete basis for estimating the
extent to which these features would deter speculation.
The wider the band is made, the greater the potential uncertainty about
the course of exchange rates, but also the greater the amount of balance-ofpayments adjustment which may take place within the band. In an evaluation of a wider band, these conflicting considerations would have to be
weighed in determining its optimum width. A very wide band comes close
to a floating exchange rate and thus shares the shortcomings of this drastic
reform. A small widening of the band, on the other hand, might not
markedly reduce the need for, and the expectation of, discrete changes
in parity.
Gradual Adjustment of Parities
The evolution toward greater exchange rate flexibility could involve a
gradual, limited adjustment of exchange parties. Two forms of the so-called
"crawling peg" have been proposed, one discretionary and one automatic.
Under the discretionary variant, a country in disequilibrium would no
longer make one substantial change in its parity, but rather would announce
a rate of increase (or decrease) in its parity of some specified small percentage per month, until further notice. Once the desired effect had been
attained, the country would halt the process. This might make the
transition to an equilibrium parity easier, and perhaps curb speculation. Its
effect on the political obstacles to changes in parities is not entirely clear;
governments might find it just as painful to announce a parity change in a
series of small steps as in a single abrupt one. The discretionary crawling
peg might therefore be used no more frequently than the present "adjustable peg."
The automatic form of gradual adjustment would remove parities from
the direct control of individual countries. Under one variant, the parity
on any business day would be the average of the actual exchange rates over
the preceding 12 months (or some other suitable period). The actual exchange rate would be within a band around the parity prevailing on that
148
day, with official intervention permitted only at the floor or ceiling. For a
period of 1 year and a band of 1 percent, the largest possible change
in the parity—attained only if a currency were continuously at its floor
or ceiling—would be 2 percent a year. Larger or smaller potential changes
could be permitted by adopting a different period for calculating the moving
average, or by altering the width of the band. Again an optimum choice
would depend upon the importance of certainty about future exchange rates,
on the one hand, and on the speed of balance-of-payments adjustment to be
permitted through the crawling peg, on the other.
Unlike fully flexible rates, the crawling peg would not be intended to
offset all cyclical and random fluctuations in international transactions; but,
unlike a widening of the band, it would permit sizable changes in exchange
rates over the long run. Thus it could cope with the problem of modest
trends in the equilibrium values of currencies resulting from divergent
national trends of prices, economic growth, export supply, import demand,
or investment flows.
It might seem that, if a currency showed fundamental weakness and
was therefore expected to move downward for an extended period,
speculation would become a problem because of the predictability of the
exchange rate movement. This kind of speculation could, in principle, be
avoided by raising interest rates above the otherwise prevailing level by an
amount equal to the anticipated rate of downward crawl of the currency.
The exchange gain from moving out of the currency would then be offset by
the loss of interest. Such changes in interest rates might, however, necessitate
offsetting adjustments in fiscal policy and, as discussed earlier, marked
changes in the policy mix are sometimes difficult to achieve. Limits on
tolerable interest rate changes would thus be one constraint on the speed of
parity adjustment which could be permitted in such a system.
The various proposed modifications in the exchange rate system raise
many difficult technical issues, and clearly a proper evaluation of these
proposals must be preceded by a great deal of careful study.
CONCLUSION
By far the most important attribute of the postwar international economy
has been steady and rapid growth. The spectacular nature of recent international monetary disturbances should not obscure the mighty contribution
that the international economic system has made to world prosperity. Worldwide flows of goods and investments have been the cornerstones on which
the prosperity of many nations has rested; at the same time, the growth
of national economies has made possible the tremendous increases in world
trade and international investment.
Trade is the center of the international economic system, and it cannot
prosper in the face of highly restrictive national policies. Only a continuous
149
chipping away at tariffs and other trade barriers can provide assurance
against backsliding. Pressures for protection must be successfully resisted.
The fruits of unprecedented prosperity are still not being fully shared by
many nations in Africa, Asia, the Middle East, and Latin America. The
future growth of these nations must be built primarily on the skills, intelligence, and labor of their citizens. But the developed countries must facilitate
the process by providing technical assistance, capital resources, and access
to markets.
The international monetary system established at Bretton Woods and
developed through the years has made a major contribution to international economic growth. This system has served the world well, but it has
increasingly been subject to serious strains.
To ensure the continuing smooth operation of the monetary system, work
must go forward on the problems of liquidity, confidence, and adjustment.
Great progress has been made in recent years as exemplified by the agreement creating Special Drawing Rights. This achievement required careful
study and long negotiations. Similar extensive efforts will be needed in the
future if progress is to be maintained, but the prospects for eventual success
are bright.
150
Chapter 5
Combating Poverty in a Prosperous Economy
. . . the policy of the United States [is] to eliminate the paradox of
poverty in the midst of plenty in this Nation by opening to everyone the opportunity for education and training, the opportunity
to work, and the opportunity to live in decency and dignity.
F
OR OVER 4 YEARS the United States has had an explicit national
commitment to eliminate poverty in our society, a commitment enunciated by the President in the State of the Union Message of 1964 and
confirmed by the Congress in the above words later that year in the Fconomic Opportunity Act.
Americans are increasingly prosperous. Median family income in the
United States (in constant 1967 prices) rose from $6,210 in 1959 to
$7,974 in 1967, a gain of 28 percent in 8 years. Yet many families are still
not able to attain minimum living standards. A preliminary estimate
indicates that in 1968 about 22 million people lived in households with
incomes below the "poverty line." While this is far fewer than in the past—
more than 40 million were similarly situated in 1960—too many Americans
remain poor.
This chapter examines the recent progress in reducing poverty, the nature
of the task that remains, and the strategies available for eliminating poverty.
THE EXTENT OF POVERTY
A family is "poor" if its income is insufficient to buy enough food, clothing,
shelter, and health services to meet minimum requirements. Universally
acceptable standards for determining these minimum needs are impossible
to formulate since the line between physical necessities and amenities is
imprecise.
The social and psychological aspects of poverty further complicate efforts
to measure poverty. As average incomes rise, society amends its assessment
of basic needs. Individuals who cannot afford more than a small fraction
of the items enjoyed by the majority are likely to feel deprived. Consequently, an absolute standard that seems appropriate today will inevitably be
rejected tomorrow, just as we now reject poverty definitions appropriate
a century ago.
DEFINITION OF POVERTY
Even a rough measure of progress in reducing poverty requires an explicit
definition, although the line drawn is unavoidably arbitrary. In its 1964
Annual Report, the Council used a poverty line of $3,000 annual family
income. Since 1965, the Council has employed the more refined definition of
poverty developed by the Social Security Administration (SSA).
The SSA poverty lines reflect the differing consumption requirements
of families based on their size and composition, the age of members, and
whether their residence is farm or nonfarm. The calculations center around
the U.S. Department of Agriculture's Economy Food Plan, which in December 1967 added up to a per capita weekly food outlay of $4.90. For
families of three or more, the SSA measure assumes all other family needs
can be obtained for an amount equal to twice the family's food requirement.
In 1967, the nonfarm poverty threshold for an average four-person family
was $3,335 as compared to a median income, for families of that size, of
$8,995. Poverty lines for different types of households are shown in
Table 14.
The problems of low-income families neither begin nor end at any arbitrary poverty line. A sharp decline in poverty may be a misleading indicator
TABLE
14.—Poverty
and near-poverty
income
lines, 1967
Poverty
income line
Household characteristic^
Near-poverty
income line
Nonfarm households:
1 member. . .
$1,635
$1,985
1,565
1,685
1,890
2,045
2,115
2,855
1,970
2,185
2,655
2,945
. -..
2,600
3,335
3 930
4,410
5,430
3 425
4,345
5 080
5,700
6,945
1,145
1,390
.
1,095
1,195
1,330
1,450
1,475
1,990
1,380
1,535
1,870
2,075
1,815
2,345
2,755
3,090
3,790
2,400
3,060
3,565
3,995
4,850
65 years and over
Under 65 years
2 members...
Head 65 years and over
Head under 65 years
.
3
4
5
6
7
. . .
members
members...
members
members .
members or more
.
Farm households:
1 member
65 years and over .
Under 65 years .
.
.
.
.
.
.
.
.
2 members
Head 65 years and over
Head under 65 years
3
4
5
6
7
members
members
members
members
members or more
1
-..
Households are defined here as the total of families and unrelated individuals.
Note.—Poverty and near-poverty income standards are defined by the Social Security Administration; they take into
account family size, composition, and place of residence. Income lines are adjusted to take account of price changes
during the year.
Source: Department of Health, Education, and Welfare.
of progress if a large number of families are raised just above the poverty
line. Accordingly, the SSA has also developed a "near poor" standard
averaging about one-third higher than the poverty line but still less than
one-half of median income for many types of families. Near-poor income
standards are shown in Table 14.
The SSA poverty definitions have some limitations. Since they are multiples of food costs, the poverty lines change only when food prices change,
and these prices do not necessarily parallel the prices of other essentials.
Regional differences in living costs are not reflected in the poverty line. The
income data take no account of income in kind such as health care, subsidized
housing, and foodstuffs (except for food grown on farms). No adjustment
is made for either net assets or fluctuating incomes, and yet families with
savings or temporary income interruptions have different problems than the
chronically poor.
These problems are currently under study in an effort to refine the poverty
concept. A different threshold could affect the distribution of measured
poverty among various groups but would probably show much the same
trend in total poverty over the long run.
POVERTY TRENDS
With the general rise in family incomes in the postwar period, the incidence of poverty—the percentage of persons in poor households relative to
the total population—has declined sharply from 30 to less than 12 percent
(see Chart 10). The number of persons in poverty declined about 20 million over the past 20 years, including a drop of 12 million since 1963—an
estimated 4 million in 1968 alone.
Along with the reduction in the number of poor households, the "poverty
gap"—the difference between the actual incomes of the poor and the incomes necessary to place them above the poverty line—has been reduced.
The poverty gap fell from $13.7 billion in 1959 to $9.7 billion in 1967,
measured in current dollars.
Distribution by Community Type
The incidence of poverty is highest—23 percent—in those rural areas
not in metropolitan counties, with the heaviest concentrations in the South
and Appalachia. The incidence is also quite high—19 percent—in the
smaller cities and towns outside of major metropolitan areas. In the central cities, the incidence is 16 percent and in their suburbs about 9 percent.
Racial and Ethnic Distribution
Most of the poor are white. In 1967 (the latest year for which detailed
data on the poor are available), 71 percent of all poor families and 83 percent of all poor unrelated individuals were white. The incidence of poverty
Chart 10
Number of Poor Persons and Incidence of Poverty
MILLIONS OF PERSONS
PERCENT
50
- 50
V
NUMBER OF POOR PERSONS
40
- 40
30
- 30
•
\
_
_
7
20
- 20
INCIDENCE OF POVERTY J /
(Right scale)
^
10 -
-
I
0
1948
50
I
I
52
I
54
I
I
56
I
I
I
58
I
60
I
I
I
62
I
64
I
I
I
66
10
I
68
-I/POOR PERSONS AS PERCENT OF TOTAL NONINSTITUTIONAL POPULATION.
N0TE._P0VERTY IS DEFINED BY THE SOCIAL SECURITY ADMINISTRATION POVERTY-INCOME STANDARD.
SOURCES: DEPARTMENT OF COMMERCE, DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE,
OFFICE OF ECONOMIC OPPORTUNITY, AND COUNCIL OF ECONOMIC ADVISERS.
is far higher among nonwhites: about one household in three compared
with about one in seven among whites.
Of the 2.4 million nonwhite households in poverty, 2.3 million are
Negroes; the remainder are mostly the original Americans—Indians and
Eskimos. A 1964 survey revealed that 74 percent of the 55,000 families living
on Indian and Eskimo reservations had incomes under $3,000.
Only recently has the reduction of poverty among nonwhites matched
the reduction among whites. Between 1959 and 1962, the number of whites
in poverty declined 2.8 million, but during the same period the number of
poor nonwhites rose by 0.9 million. Between 1962 and 1967, white poverty
was reduced another 7 million or about 28 percent, while poverty among
nonwhites fell by 3.2 million—also about 28 percent.
The relative position of nonwhite families, after deteriorating in the late
1950's, has improved since 1961. (See Appendix Table B-20.) Only since
1966 has nonwhite median family income as a fraction of white median
family income surpassed its previous peak of 57 percent in 1952. Unemployment among nonwhite men age 25 to 54 has recently fallen below 1951-53
levels, but unemployment rates for nonwhite women and nonwhite teenage
males are much higher than during the early 1950's.
154
Most poor white families in the United States are not members of identifiable ethnic groups; however, two groups—Mexican-Americans, living
largely in southwestern States, and Puerto Ricans, concentrated in New York
City—exhibit disproportionately high incidences of poverty. In 1966, unemployment rates among Mexican-Americans in southwestern cities ranged between 8 percent and 13 percent, two to three times the national average.
Subemployment—the sum of unemployment, employment producing earnings too low to provide an escape from poverty, and nonparticipation in the
labor force by individuals who have given up hope of finding work—
ranged from 42 to 47 percent in the Mexican-American sections of southwestern cities. And while Puerto Ricans constitute only about 8 percent
of the New York City population, they have been estimated to represent
over one-third of the recipients of welfare and about one-third of all
occupants of substandard housing.
STRATEGIES FOR REDUCING POVERTY
A program for reducing poverty has four principal economic dimensions.
First, sustained high employment and economic growth—key objectives
of economic policy for a wide variety of reasons—are prime essentials.
Second, education, training, medical assistance, and access to well-paying
jobs are needed by many of the poor to escape from chronic unemployment
and low-paying dead end jobs.
Third, three-fifths of the heads of poor households cannot easily enter the
labor force because of age or disability, or because they are mothers with
sole responsibility for the care of young children. Some workers with large
families are not likely—even with training and other types of employment
assistance—to earn an income sufficient to pull their families out of poverty.
Because increased employment opportunities will not eliminate poverty
among these groups, some form of income maintenance is required.
Fourth, poverty is concentrated in "pockets"—city "ghettos" and certain
rural areas. The numbers of poor in poverty pockets can be reduced by
promoting public and private investment in these communities and by
providing relocation assistance to those with employment opportunities
elsewhere.
In addition to economic policies, social and psychological strategies have
an important role to play. These include information about family planning
for those who request it, legal assistance, and the encouragement of self-help
organizations. Such programs lie outside the purview of this Report.
PROSPERITY AND THE REDUCTION OF POVERTY
Virtually all the progress in reducing poverty over the past 20 years
has occurred during periods of general prosperity. In three periods of sustained economic expansion—1949-53, 1954-56, and 1961 to the present—
155
the annual decline in the number of individuals in poverty averaged two
million or more a year. In contrast, during recessions the number of poor
people has increased. The brief recession of 1954 wiped ou,t half of the
gains of the preceding 4-year expansion, and several successive years of
sluggish economic performance in the late 1950's increased the number of
persons in poverty to about the level of 7 years earlier. (See Chart 10.)
EFFECTS OF PROSPERITY
Poor families are affected unequally by economic growth and high employment, depending upon their ability to take advantage of expanded employment opportunities. Recent trends in poverty reduction for different
groups are shown in Table 15.
Households with Heads of Working Age
Economic expansion has caused significant reductions in poverty among
households headed by a working-age man. Tightening labor markets raise
wages for the poor who are employed, and provide better employment
opportunities for the unemployed and for those with very low-paying or
part-time jobs. Furthermore, when prosperity pushes unemployment rates
to low levels among skilled workers, business is more inclined to train poorly
qualified workers for skilled jobs. From 1964 to 1966, the number of poor
households headed by a working-age man with work experience fell 400,000
a year; in contrast, there had been no decline from 1959 to 1961.
The number of poor households headed by a working-age woman with
job experience has not changed during the 1960's. The decline in the incidence of poverty among this group reflected a rise in the total number of
households headed by working-age women.
Prosperity is less effective in reducing poverty among households headed
by women for several reasons. Women are far less likely to be employed
than men; only about three-fifths of the women who head families have
some job experience, compared to about 90 percent for male family heads.
Many women who head families, being the adult solely responsible for young
children, are unable to accept full-time employment unless day care is provided for their children. Furthermore, women are far less likely to escape
poverty even if they do work, because their employment is less steady and
they earn lower wages. Nonwhite families are more than twice as likely—
and white families are more than three times as likely—to be poor if headed
by a woman than if headed by a man.
Elderly Households
During the 1960's, the number of poor elderly households fell slightly,
while the incidence of poverty among this group decreased substantially.
High employment has some immediate effect on poverty among the aged
156
TABLE 15.—Number of poor households and incidence of poverty, selected years,
1959-67
19661
Characteristic of head
of household
1959
1961
1964
Originally
published
1967
Revised
Millions
Number of poor households:2
13.4
Unrelated individualsFamilies 3
11.9
10.9
10.7
10.2
3.9
3.8
3.9
4.0
3.8
2.5
1.4
Head 65 years and over..
13.0
3.9
Total
2.5
1.3
2.8
1.1
2.7
1.2
2.7
1.2
2.7
1.1
9.4
9.1
8.0
7.0
6.8
6.4
Unrelated individuals.
2.6
2.4
2.3
2.1
2.1
2.2
White
Male___
Female.
1.9
.6
1.3
1.8
.6
1.2
1.8
.6
1.2
1.6
ill
1.6
.6
1.0
1.6
.5
1.1
Nonwhite...
Male...
Female.
.7
.3
.4
.7
.3
.4
.5
.2
.3
.5
.2
.3
.5
.2
.3
.5
.2
.3
Head under 65 years
6.8
6.7
5.7
4.9
4.7
4.2
White
Male...
Female.
4.9
3.8
1.1
4.7
3.7
1.0
4.0
3.0
1.0
3.3
2.3
1.0
3.1
2.2
.9
2.8
2.0
.8
Nonwhite...
Male—.
Female.
1.9
1.3
.6
2.0
1.3
.7
1.7
1.1
.6
1.6
.9
.7
1.5
.9
.7
1.4
.7
.7
Families«
Percent
Incidence of poverty: 5
Total households2..
24.0
17.8
17.5
16.2
43.8
40.0
38.5
38.9
36.3
68.1
32.5
Unrelated individualsFamilies 3
19.9
48.6
Head 65 years and over..
22.6
64.4
27.2
59.9
21.6
55.3
23.0
56.3
23.1
53.4
20.3
19.8
18.8
16.0
13.7
13.3
12.2
36.8
33.9
31.0
28.3
28.7
27.0
White
Male...
Female.
32.9
24.6
39.1
29.7
22.8
35.2
28.3
22.0
33.0
25.8
20.1
30.0
25.5
21.0
28.8
24.4
18.0
29.0
Nonwhite__.
Male...
Female.
54.8
47.1
63.5
55.0
45.5
66.8
45.1
34.6
58.1
41.7
29.1
54.1
45.3
35.5
55.1
40.1
29.4
51.7
Head under 65 years
Unrelated individuals..
16.8
16.1
13.3
11.2
10.6
9.5
White
Male...
Female.
13.4
11.4
35.9
12.6
10.7
33.9
10.4
8.5
31.2
8.4
6.5
29.1
7.9
6.1
27.9
7.1
5.4
25.3
Nonwhite...
Male...
Female.
48.6
42.1
71.3
47.8
40.2
72.8
27.8
32.3
62.4
34.3
25.9
61.2
33.4
25.1
60.3
29.9
20.9
54.9
Families *_
1 The revised estimates differ slightly from those originally published because of the use of a somewhat different
estimating procedure. For an explanation of the two methods, see "Current Populat.on Reports Series P-60, No. 54."
2 Households are defined here as the total of families and unrelated individuals.
3 Consists only of two-person families whose head is 65 years or over. All other families included in "head under 65
years."
* All families other than two-person families whose head is 65 years or over.
s Poor households as percent of total households in the category.
Note.—Poverty is defined by the Social Security Administration poverty-income standard; it takes into account family
size, composition, and place of residence. Poverty-income lines are adjusted to take account of price changes during the
period.
Detail will not necessarily add to totals because of rounding.
Sources: Department of Commerce and Department of Health, Education, and Welfare.
157
323-166 0—69- -11
by providing more jobs for elderly individuals wishing to continue work.
This opportunity is particularly important for those with retirement income
below the poverty line.
Over the longer run, prosperity permits more workers to accumulate
assets and to achieve higher pension rights prior to retirement. At present,
an individual earning the minimum wage and working full-time in a job
covered by social security is entitled to old-age benefits of approximately
$120 a month upon retirement—only about $10 a month below the poverty
line.
Reflecting both the higher lifetime earnings of the aged and statutory
improvements, social security retirement benefits have increased greatly
and have been the most important factor in reducing poverty among the
elderly. Since 1961, legislation has increased social security retirement benefits 21 percent across the board,—substantially greater than the increase in
consumer prices. The minimum benefit increased 37 percent.
The Disabled
The ill and disabled have benefited least from recent prosperity and
other efforts to alleviate poverty. Although the incidence of poverty among
households whose heads are under 65 and not working for health reasons
fell from 1959 to 1967, the number actually rose. Some disabled can be retrained, and these individuals can obtain jobs more readily when unemployment is low. But many who are ill or disabled cannot take advantage
of job opportunities.
The Near-Poor
Table 16 shows the number of households and the number of persons
who were in the near-poor category in 1959 and 1967.
The compositions of the poor and the near-poor categories differ considerably. Most striking is the difference in the proportion of nonelderly
households headed by a working-age woman. These households account for
46 percent of all nonelderly poor households; among the near-poor, they
account for 22 percent. Except for the elderly, most near-poor families are
headed by men who are employed, but at low wages.
The number of near-poor showed a considerable decline between 1959 and
1967. Many who rose from poverty were added to the near-poor, but at the
same time an even larger number of the former near-poor moved to a higher
income level.
PROSPECTS FOR FURTHER PROGRESS
As indicated above, prosperity has played a key role in reducing poverty
and is essential to further progress. But sustained growth and high employment—in the absence of other more direct efforts to help the poor—cannot maintain the recent rate of decline in poverty.
158
TABLE 16.—Number of near-poor households and incidence of near-poverty
and sex of head of household, 1959 and 1967
by age
Incidence of near-poverty
(percent) *
Number (millions)
Age and sex of head of household
1959
Near-poor households2
1967
1959
1967
4.3
3.7
7.7
5.9
3.8
2.9
8.3
5.8
Head 65 years and overs
Head under 65 years4
.7
3.1
.8
2.1
15.2
7.6
14.0
4.8
Male head
Female head
3.4
.4
2.4
.5
8.4
8.2
5.5
8.7
Unrelated individuals
.5
.8
5.1
6.0
.2
.3
.5
.3
6.1
4.6
9.1
4.0
.2
.3
.3
.5
5.5
4.9
5.8
6.1
15.8
12.0
9.0
6.1
Families
Head 65 years and over
Head under 65 years
Male head
Female head._
. . . .
Addendum:
Near-poor persons
* Near-poor households as percent of total number of households in the category; near-poor persons as percent of
total persons.
2
Households are defined here as the total of families and unrelated individuals.
3
Consists only of two-person families whose head is 65 years or over. All other families included in "head under 65
years."
4
All families other than two-person families whose head is 65 years or over.
Note.—Near-poverty is defined by the Social Security Administration near-poverty-income standards; it takes into
account family size, composition, and place of residence. Near-poverty-income lines are adjusted to take account of price
changes during the period.
Detail will not necessarily add to totals because of rounding.
Sources: Department of Commerce and Department of Health, Education, and Welfare.
If the 1961-68 reductions in the number of poor persons could be continued, poverty would be eliminated entirely in about 10 years. If the record
of 1968 could be continued, poverty would be eliminated in about 5^2 years.
Maintenance of these rapid reductions will become increasingly difficult
because, as poverty declines, an increasing fraction of the remaining poor
are members of households whose economic status is least affected by prosperity. Households headed by women with children, disabled persons, or
elderly persons accounted for 6.0 million or 59 percent of all poor households
in 1967.
Much of the progress in the 1960's has been due to the lowering of the
unemployment rate. As that rate fell, further declines were increasingly
effective. The hard-core unemployed, the educationally disadvantaged, and
the victims of discrimination are the last to be hired during a return to high
employment and the first to be fired during a slowdown. Upgrading the
unskilled and uneducated to fill shortages in skilled labor takes time. Consequently, if high employment is maintained, these adjustments will continue to reduce poverty, but their effects will gradually diminish. In the
absence of increased direct assistance to the poor or further reductions in
unemployment, present annual declines in poverty must be expected to
become smaller.
The elimination of poverty will be long in coming if the incomes of the
159
poor grow only at the same pace as the incomes of other households. If the
real income (including transfer payments) of each poor household were to
grow at 3 percent a year—approximately the average gain for all households during normal conditions of economic growth—eliminating only half
of poverty would take 12 years for poor families and 17 years for unrelated
individuals. To shorten substantially the period needed to reduce poverty,
the incomes of the poor must grow faster than average income—some redistribution to the poor must be made from the benefits of growth.
INCOME DISTRIBUTION
Only a relatively small redistribution of the benefits of growth is needed
to speed greatly the reduction in poverty. If the approximately 85 percent
of households that are not poor and receive about 95 percent of total income
are willing to make only a small sacrifice of the estimated 3 percent yearly
growth in their real income per capita, the prospects for poverty reduction
can be greatly transformed. If the increase in real income for the nonpoor
is lowered merely from 3 percent to 2*/2 percent a year and if that differential
of about $2.8 billion annually is effectively transferred to those in poverty,
then family incomes for those now poor can grow about 12 percent annually.
This redistribution would eliminate the 1967 "poverty gap" of $9.7 billion in
less than 4 years. Since any program of redistribution would be likely to
reach some of the near-poor and might raise some poor families substantially
above the poverty line before others are affected, perhaps a better projection
of the time required would be 6 to 8 years.
The rapid reductions in poverty during the 1960's paralleled a significant
rise in the share of total family income going to the lowest income groups.
In part, this shift in distribution has been accomplished by increased employment of poor adults at higher wages.
The combined effect of the tax and transfer payment systems at all levels
of Government also operates to redistribute income to the poor. The net
gain or burden from the public sector for any group depends on the difference between all the benefits received from government expenditures and
all the taxes paid. Many programs—like national defense—have benefits that
are difficult to allocate by groups; however, the benefits of transfer payments—such as social security benefits, welfare payments, and unemployment compensation—can be allocated and compared with the tax burden.
The impact of Federal, State, and local taxes and of transfer payments on
the distribution of income in 1965 is shown in Chart 11.
The tax system by itself redistributes income away from the poor. As
a share of income, higher taxes are paid by households in the lower income classes than by those with incomes between $6,000 and $15,000.
This reflects the heavy tax burden on low-income families from State and
local taxes—primarily sales, excise, and property taxes. Federal taxes also
contribute to this burden through the social security payroll tax.
The poor receive nearly as much from transfer payments as from all other
160
Chart 11
Taxes and Transfer Payments as Percent of
Income (Excluding Transfers), by Income Class,1965
PERCENT
60
-
40
_
DERAL TAXES
'
20
-
TAXES AS PERCE NIT OF INCOME
-
/
STATE AND LOCAL TAXES
—
/
///A
0
///A
V
///)
'///At
YAAA
60
TAXES LESS TRANSFER F AYMENTS AS PERCENT OF INCOME
40
20
0
20
-
-
40
-
-
60
-
-
80
Under
2,000
2,0003,999
4,0005,999
6,0007,999
8,0009,999
10,00014,999
15,000
& Over
INCOME CLAS (DOLLARS)
S
SOURCE: COUNCIL OF ECONOMIC ADVISERS, BASED ON DATA FROM A VARIETY OF
SOURCES. DESCRIPTION AVAILABLE ON REQUEST.
sources. While these payments do not go exclusively to the poor, they do have
a powerful redistributive impact. The ratio of receipts to household income
(excluding transfers) is very high in the lowest income classes. As household incomes rise, the proportion of transfers to other income falls sharply.
When government transfer payments and taxes are combined, the concentration of transfer payments in the lower income groups much more
than offsets their tax burden. But since average transfer payments fall
rapidly as income rises, the excess of taxes over transfer payments as a fraction of income rises much more sharply from $0 to $4,000 than in higher
income classes.
EDUCATION, JOBS, AND TRAINING
Education and training measures can improve job opportunities for the
poor and their children.
161
EDUCATION AND POVERTY
Education can help prevent the children of the poor from remaining
poor when they grow up. They are already better schooled than their
parents. About three-fourths of poor youths between 16 and 21 either
are attending school or are high school graduates, whereas more than half
of their parents had no high school education. Yet these youths still have
less schooling than their more fortunate contemporaries, 90 percent of
whom are in school or are high school graduates.
Although most poor children of all ages are now in school, inferior
facilities and poorly qualified teachers lower the value of the education
many of them receive. Even schools equivalent to those of the prosperous
would not yield equal education. Poverty imposes handicaps that children
of more prosperous families do not have.
Children of the poor are less likely to receive good health care and good
nutrition, both of which affect success in school. They are also less likely
to receive the verbal and intellectual stimulation in their early years that
prepares them to master school work. They start school somewhat behind
other youngsters, and they receive less parental assistance. Since school does
not meet the challenge of helping them catch up, it becomes a place of
defeat, leading many to drop out.
Poor children from minority groups suffer another handicap, segregation.
More than 60 percent of all Negro pupils in the first grade attend elementary
schools in which at least 90 percent of the students are Negro. Not only
are facilities and instruction inferior in many of these schools, but studies
of educational performance suggests that segregation itself has an adverse
effect on school performance.
If poor children are to have equal opportunity to compete successfully
for good jobs, they need special help in the preschool years. They also
need compensatory education, with expenditures exceeding those made on
other pupils. Finally, they need financial help and other encouragement to
stay in school and continue their education.
Major efforts have been made to upgrade education provided children
of the poor in programs such as the Elementary and Secondary Education
Act, the Economic Opportunity Act, and the Vocational Education Amendments of 1968. Head Start, Title I of the Elementary Education Act, and
Follow Through are comprehensive programs, combining health care, nutrition, and the involvement of the child's family, as well as education.
Most of these special Federal efforts have been in operation for 3 years or
less. While too little experience has been gained to allow a full evaluation,
enough positive results are evident to justify continuing the programs.
HIRING STANDARDS
Poverty is perpetuated by hiring standards that arbitrarily discriminate
against the disadvantaged.
162
Racial Discrimination
The persistence of racial discrimination in hiring frustrates the efforts
of nonwhites to realize full returns from schooling and discourages the
young from remaining in school. For example, a larger portion of white
male dropouts 16 to 21 years of age secure skilled and semiskilled jobs than
nonwhite males who graduate from high school, and the average earnings
of nonwhite high school graduates are lower than those of white dropouts.
Attacks are being made on discrimination in higher level occupations,
although most of the initial progress is in clerical jobs. The public sector
has a better record than the private sector in eliminating discrimination
in hiring. For example, 20 percent of the Federal and municipal white collar workers in metropolitan New York City are Negro. In contrast, Negroes
hold only 6 percent of the white collar jobs in large private firms in New
York City.
Restrictive Hiring Practices
Arbitrary hiring standards and customary employment practices, as well
as outright racial discrimination, curtail work opportunities. During World
War II, industry successfully adjusted standards and restructured work
patterns to fit jobs to the level of workers' skills.
All too often, recruitment and testing procedures currently used by Government and business do not take sufficient account of innate intelligence
and aptitude.
TRAINING AND JOB ACCESS
On-the-job training is an important route to employment. Consequently,
the Government increased the number of on-the-job trainees financed under the Manpower Development and Training Act from 11,000 in fiscal
1965 to 125,000 in fiscal 1968. By the end of 1968, half the trainees had less
than 4 years of high school, and 53 percent were from families with incomes below the poverty line.
Through the Job Opportunities in the Business Sector (JOBS) program
sponsored by the National Alliance of Businessmen, nearly 12,000 cooperating business firms have helped disadvantaged workers find employment. The
premise of the program is that the best job training is a job. JOBS encourages waiving of some hiring standards and provides counseling and training
to raise the productivity of the trainees. The interim goal of employers
pledging to place 100,000 disadvantaged persons by June 1969 has already
been met far ahead of schedule. JOBS contracts have been issued to about
800 employers who are reimbursed an average of $3,000 per trainee for
the extra costs.
163
The rapidly growing public sector has no counterpart to the JOBS
program. Such a program would usefully supplement the present expansion of job opportunities in the private sector.
Two other major programs are designed for young workers. The Job
Corps helps the most severely disadvantaged youths without job prospects.
As of mid-1968, the program had provided health care, food, and job
training for 195,000 enrollees since 1965. From 1965 to 1968 the Neighborhood Youth Corps provided jobs for over 1.3 million youngsters from lowincome areas. While the part-time and summer work is too low skilled to
provide useful job training, the modest pay helps youths from low-income
families stay in school.
IMPROVEMENTS IN INCOME MAINTENANCE
The United States now has a substantial commitment to income maintenance, spending about $60 billion in fiscal 1968 (Table 17). Each program serves the special needs of a particular group, and many are not designed specifically to help the poor. Individuals who can normally earn
an adequate living are served by social insurance systems which protect
against loss of income through death, disability, and unemployment, and
which provide retirement income. Individuals with inadequate earning
TABLE 17.—Selected major income maintenance programs,fiscalyear 1969
Beneficiaries *
Total outlays
(millions
of dollars)
Program
Number
(thousands)
Percent in
households with
income less
than $3,300 2
100
58,679
All programs3
Aid to families with dependent children
3,206
6,146
Unemployment insurance:
Federal-State unemployment compensation..
Federal employees and ex-servicemen
Railroad.
2,300
111
52
5,196
49
8
92
Disability programs:
Workmen's compensation
Federal employees
Veterans'compensation
_
Railroad
._
Social security
Ajd to the blind
Aid to the permanently and totally disabled
* 1,686
57
2,611
77
2,691
92
726
40
2,390
4
1
2,278
84
71
2
Assistance to those 65 years and over:
Social security retirement and survivors' benefits.
Old-age assistance
Military retirement
Civil service retirement
Railroad retirement
Veterans' pensions
24,681
1,833
2,265
2,364
1,542
2,127
21,931
2,123
681
918
99
6
2,252
3
1
10
0
32
700
100
General assistance
_
Assistance-in-kind«
()
*
()
*
15
24
<)
*
10,226
* Estimated.
2
income including cash benefits.
3 Data exclude State and local government retirement systems and all private retirement and charitable programs.
* Not available.
5
Estimate by Council of Economic Advisers.
6
Federal outlays only. See Table 18.
Source: Bureau of the Budget (except as noted).
164
20
10
39
10
0
10
0
34
80
ability may be assisted by welfare, veterans pensions, in-kind payments (such
as food stamps or public housing), and manpower training allowances.
Despite recent improvements, existing income maintenance progams provide neither adequate coverage nor sufficient benefits to prevent poverty.
Rarely are able-bodied working-age individuals, or families headed by
healthy, nonelderly men, eligible for existing cash benefit programs yet,
these groups make up two-thirds of poor nonelderly households. Even among
some of the groups for which programs are available, coverage is much less
than complete.
Benefits are rarely adequate to raise households above the poverty line.
The average Aid to Families with Dependent Children (AFDC) payment
in mid-1968 was just over $2,000 a year per family; in five States, it was
less than $1,000 a year. Average benefits in mid-1968 for a retired couple
under old-age insurance were about $1,800—below the poverty line for such
families by about $200.
WELFARE PROGRAMS
Important improvements in public assistance have been made. The courts
have overturned the controversial "man in the house" rule, which had denied AFDG benefits to children when a man not legally responsible for their
care lived with the family. Courts have also declared invalid some State
residency requirements for public assistance. States have recently been instructed to determine income need by affidavit, rather than personal investigation, a change to a more efficient and less demeaning method. The
work incentive principle was introduced in the 1967 Social Security Amendments, which call for welfare benefits for AFDC mothers to be reduced by
less than the full amount of earnings. Finally, the average AFDC benefit
rose $17 per family (11 percent) between mid-1967 and mid-1968.
These improvements have led to the paradox of growing welfare rolls
and costs amidst a general reduction in poverty. Not only have welfare applications increased, but between 1960 and 1967, the fraction of applicants
declared eligible for benefits rose dramatically. Reform of eligibility rules
and increased awareness of welfare programs by the poor have probably been
responsible for the substantial rise in applications.
The Freeze on AFDC Rolls
While the welfare system generally has been improved in recent years,
the enactment of a sharp limitation on the number of AFDC beneficiaries,
now scheduled to take effect July 1, 1969, was a major step backward. The
"freeze" forbids Federal financing for any increase in a State's ratio of
deserted or illegitimate children receiving AFDC assistance to the total
child population.
In all States, the freeze places a very tight limit on the expansion of
welfare rolls; in some it will even cause a decline, unless the States are
willing to assume the Federal share of the costs. Eligibility for federally aided
165
public assistance should not be determined on the basis of the place of a
family in the waiting line at the welfare agency, but upon the need of the
family. Repeal of the AFDC freeze is the most urgently required step
toward a more humane and rational welfare system.
Raising and Equalizing Welfare Benefits
In federally assisted welfare programs—AFDC, old-age assistance, aid to
the blind, and aid for the disabled—benefits vary widely among States but
are well below the poverty line nearly everywhere. For example, the monthly
AFDC benefits for a family of four range among the States from a low of
$40 to a high of $290 but exceed the poverty threshold in only one State.
Establishing minimum welfare benefits—wholly financed by the Federal
Government—could raise the lowest benefits significantly. This minimum
could be modest initially and then increased until benefits are adequate in
all States. Since poverty is a national problem which happens to be geographically concentrated, federalization of most of the cost of welfare
expenditures, perhaps including even administrative costs, would be desirable
over the long run. Federal administration would reduce the difficulties arising
from major differences in local standards of benefits, eligibility, and
administration.
Improving Work Incentives in AFDC
Currently, if a State elects, mothers receiving AFDC may earn up to
$30 a month without having their welfare benefits reduced. Beyond $30,
benefits are reduced by two-thirds of additional earnings. By July 1, 1969,
all States must adopt this work incentive formula. While these new provisions are an important advance, work incentives are still too small and
do not extend to other welfare categories.
If child-care facilities are available, welfare mothers may be required
to work or to accept training in order to receive benefits. At present,
shortages of child-care facilities and training assignments limit the impact
of this provision. Nevertheless the rule raises fundamental social issues:
whether children are better off in a child-care center or at home with their
mothers, and whether a mother should be required to work while also
performing household tasks for her family.
These issues are not easily resolved. Nevertheless an equitable system
should not penalize those who work and should provide adequate benefits to those who cannot work.
BENEFITS IN KIND
Many assistance programs provide goods and services rather than cash.
In-kind assistance is often designed to promote those types of consumption
166
by the poor that also benefit other members of society. For example, society
may subsidize housing or health care because eliminating poor housing and
ill health benefits the community as a whole. Some in-kind programs, such
as school lunches, provide specific goods and services especially important to
the young.
In-kind benefits often reflect the standards, tastes, and values of the
majority and their desire to influence the consumption patterns of recipients.
The well-being of the poor is raised by such programs, but the poor would
probably consider themselves better off if they had equivalent amounts in
cash and the accompanying freedom of choice.
Present Programs
Outlays in fiscal 1969 for the major in-kind programs which directly
benefit the poor are summarized in Table 18.
Health. Medicare and Medicaid account for 84 percent of in-kind expenditures. Medicaid benefits go primarily to the poor, and one-third of
Medicare beneficiaries are poor. Because of high maternal and infant mortality rates among the poor, expansion of comprehensive health care for
mothers and babies in poor families is especially desirable.
Food. The next largest in-kind program is food assistance, which includes food stamps, school lunches, and the distribution of commodities
from surplus stocks. Food programs reach a significant number of the poor
but as few as 20 percent in some concentrated poverty areas. The coverage
TABLE 18.—Major Federal income-in-kind programs substantially benefiting the
poor, fiscal year 1969
Beneficiaries1
Federal
outlays
(millions of
dollars)
Program
Total programs
10,226
Food programs...
665
11.3
36
.
39
.
.
2
36
.
29
.
100
100
100
10
0
28
.
.
1
36
.
57
67
9,077
6,222
2,384
193
Food stamps
Child nutrition
Special supplemental r
Other direct distribution
9.5
9.5
3 3.2
36
75
70
273
128
9
255
Housing programs..
484
Public housing
Rent supplements..
456
28
Health service programsMedicare
Medicaid
Maternity and infant care
Public Health Service medical programs:
Indians, seamen, etc
Neighborhood health centers
175
103
1 Estimated.
2
Income including cash benefits.
3
1 ncludes children and mothers benefiting from more than one service of the Children's Bureau.
Source: Bureau of the Budget.
Percent in
households with
income less
than $3,3002
Number
(millions)
167
.6
55
75
of the food stamp program will expand from 2.8 to 3.6 million persons by the
middle of 1969, largely as a result of expansion into new areas and lower
stamp charges. The child nutrition program, providing free or low-cost
school lunches, is now being expanded.
Housing. Two programs to be expanded significantly under the Housing Act of 1968 are directed toward low-income groups—rent supplements
and public housing. By midyear, 19,000 families—nearly all poor—will be
receiving rent supplements. In fiscal 1969, the number of public housing units
available will increase by 75,000, bringing the total to 780,000. Roughly half
the occupants are poor.
The average monthly rental in public housing is about $50, more than
many poor families can afford. In the North, the lowest income families in
public housing spend more than 30 percent of their income on rent. In
contrast, occupants with incomes over $5,000 pay about one-sixth of their
income in rent. Only in the South are the majority of nonelderly public
housing tenants below the poverty line.
Public housing could be made more accessible to the very poor in a number
of ways. First, higher welfare benefits would help recipients pay present rents.
Second, rents could be lowered if the Federal Government subsidized a larger
share of public housing costs. Third, rents for the poorest families could be
reduced if rents for all tenants were more closely tied to income.
SOCIAL INSURANCE SYSTEMS
For the vast majority of Americans, social insurance guards against a fall
in income due to retirement, disability, survivorship, or unemployment.
These programs prevent much of the poverty that in the past resulted from
interruptions in wage income. They make remaining poverty problems more
manageable.
Retirement
The largest American income maintenance program is social security.
About 22 million Americans now receive about $25 billion in annual
benefits from Old Age and Survivors Insurance. The goal of providing every
elderly American citizen with a decent retirement income is becoming a
reality. Similarly, more and more widows with young children and disabled
individuals are being supported above the poverty line.
Rising prices should not be permitted to erode the purchasing power of
the retired. Social security benefits should now be increased 10 percent across
the board, in line with changes in the cost of living since benefits were last
raised and to allow for additional improvement. A revised method of computing benefits, effective in fiscal 1971, would provide another increase.
Many individuals receiving low social security benefits have little if any
other income. Increasing the monthly minimum benefit from $55 to $80—
168
and to $100 for workers with 20 years of coverage—would reduce poverty
by more than half a million persons.
The earnings test should be liberalized. At present every dollar earned in
excess of $1,680 a year reduces benefits by 50 cents; earnings over $2,880
reduce benefits dollar for dollar. Because earnings are subject to other taxes,
additional earnings above $2,880 actually reduce total after-tax income. The
tax-free earnings allowance should be raised to $1,800. Fifty percent of
earnings beyond $1,800 up to $3,000 and 75 percent of earnings thereafter
would be deducted from benefits.
Virtually all workers are now covered either by social security or similar
retirement programs. Regular employment will provide retirement benefits
above the poverty line for all but the very lowest-paid workers. Most future
recipients of low social security benefits will be either individuals covered
by other retirement programs or housewives with only a few years of work
experience. Neither group will constitute an extensive poverty problem. The
most efficient mechanism for assisting the elderly poor is either expansion
of Old Age Assistance or establishment of an income-related social security
minimum—perhaps financed out of general revenues—far above the standard minimum. Under the latter proposal, social security benefits could be
high enough, together with other income, to bring all the elderly above the
poverty line.
Disability
The number of poor households headed by the disabled has not declined
since 1959. Better Disability Insurance under social security can improve
this record.
At present, to qualify for benefits, workers must be disabled 6 months, and
the disablement must be expected to last another 6 months or to result in
death. To remove this hardship, the waiting period for benefit eligibility
should be reduced from 6 to 3 months, and eligibility should not be limited
to disabilities which last more than 1 year.
The burden of unusually high medical expenses could be lifted by extending Medicare to the permanently and totally disabled.
The other major disability income program is workmen's compensation,
intended to pay medical expenses and provide income for workers (and
their survivors) disabled through work-related accidents and diseases.
Workmen's compensation is governed by State laws which require employers to obtain insurance from private companies or a State fund, or to
establish self insurance.
The present weaknesses of workmen's compensation are inadequate benefits and the exclusion of large groups of workers.
In 1966 the maximum cash benefit (including dependents' allowances)
under workmen's compensation was below the poverty line for a fourperson family in 39 States; over half the States have maximum benefits
less than 50 percent of income prior to disability. About 11 million workers—
169
mostly domestics, agricultural employees, and employees of small businesses—currently are not covered at all by workmen's compensation.
Improvements in workmen's compensation ought to come through State
laws. To provide an incentive for such action and to protect workers in its
absence, Federal action may be required. Consideration should be given to
legislation requiring States to extend coverage and to improve benefits. If
States fail to act, the law might require employers to purchase insurance
providing additional coverage and higher benefits.
Unemployment
Insurance
Unemployment insurance contributes significantly to the prevention of
poverty by providing income to regular members of the labor force during periods of involuntary unemployment. Yet more than a fifth of the employed labor force are excluded, a large number of whom are in low-wage
occupations such as domestic service and farm work.
The original aim of unemployment insurance was to restore at least half
of wages lost. Average weekly benefits—about $42 in 1966—are roughly a
third of weekly earnings in covered industries. Most States now pay benefits
for a maximum of 26 weeks in a single year; over one-fifth of the recipients
exhaust their benefits, even in periods of high employment.
For a fair and modern unemployment insurance system, legislation is
needed to broaden protection, ensure higher and more uniform benefits,
provide special training, and eliminate abuses.
MAJOR REFORM
Proposals for more fundamental reforms of the income maintenance system merit consideration along with the more evolutionary suggestions outlined above.
Major reform can be undertaken in two ways. First, the categorical approach can be expanded and improved by reforming eligibility requirements,
raising benefit levels, and—in particular—adding programs for poor families
headed by a working man and for other groups not now covered. Alternatively, present welfare programs could be replaced by a single universal
Federal program—supplemented by social insurance—having no eligibility
requirements other than low income.
Benefits for Poor Families Headed by Working-Age Men
The largest omission from the present income maintenance system is a
program to assist families headed by able-bodied working males who are
not eligible for unemployment insurance or who have exhausted its benefits. Unconditional cash benefits to working-age men are often opposed
on the grounds of possible adverse effects on work incentives. Whatever society's attitude toward fathers in poverty, failure to assist their children
makes the children likely candidates for a new generation of poor. Further-
170
more, under the present system a father can often increase the income of
his family by deserting them to make them eligible for welfare.
Children's Allowances. Children's allowances are systematic payments by
the Government to families with children. The United States is the only
Western industrialized nation without a children's allowance. The program
has been adopted in some nations as a vehicle for both providing income
to the poor and promoting population growth.
Children's allowances can take several forms. To channel aid effectively
to the poor, the allowances have to be related to family income. If children's
allowances are not income-related but go to all families, they are an exceedingly inefficient way to help the poor.
An income-related children's allowance is one method of attacking poverty
among two categories of poor households—those with moderate incomes and
large families and those with low incomes and average-size families.
Guaranteed Work. A program of guaranteed work opportunity for poor,
employable fathers is especially attractive because it offers a workable compromise between those who favor income maintenance and those who favor
expanded employment as a vehicle for ending poverty among these families.
Fathers suffering from long term unemployment would certainly be eligible
for the program. Eventually others with very low incomes might be included.
Each enrollee would receive cash benefits and would be required to participate in steps—including acceptance of placement services or training—
leading to private employment paying at least minimum wages. Those for
whom private employment could not be found would be given meaningful
public service jobs at minimum wages that provide opportunities for
advancement.
The guaranteed work program could ultimately allow any man to earn
the minimum wage, which at present would bring families of 4 or fewer
near the poverty line. By itself, this would not solve the problem of poverty
for large families. Nevertheless, the largest gap in the present income maintenance system would be closed in a manner consistent with the traditional
American attitude toward welfare for able-bodied fathers.
The Negative Income Tax. The negative income tax would provide a
minimum-income guarantee to all individuals. Benefits would be reduced
by a fraction of income, as is currently the practice for AFDC mothers and
individuals receiving social security.
A minimum-income guarantee would end society's attempts to distinguish between the "deserving" and ' 'undeserving" poor, establishing the
principle of social responsibility to aid those in need without questioning
whether the fault was individual or social.
As a substitute for other income maintenance programs, the negative
income tax is bound to be expensive. If the guaranteed income is set at or
near the poverty line—and if the proportion of earnings by which benefits
are reduced is low enough to provide adequate work incentives—substantial
171
benefits must be provided to middle-income families, swelling the cost. To
illustrate, suppose the minimum-income guarantee for a family of four is
$3,300—about the income required to escape poverty in 1967. Suppose that
every dollar earned reduces benefits' by 50 cents—a reduction that probably
approaches the maximum consistent with providing work incentives. Under
this plan, a family earning $5,000 a year would have benefits reduced by
one-half of $5,000 (or $2,500), leaving the family eligible for $800. All
families of four with less than a $6,600 income would receive some assistance.
Adoption of this particular plan now would cost about $20 billion over and
above present income maintenance outlays; roughly half would go to families
not now in poverty.
The cost can be reduced by increasing the rate at which benefits go down
as income increases. But this approach would reduce work incentives. The
cost could also be reduced by setting the guaranteed minimum income well
below the poverty line; however, if a low-income guarantee were adopted,
poverty would not be eliminated. To deal with this problem, the income
guarantee could be supplemented by State—or even Federal—welfare programs for particular categories. But then attempts to distinguish between
the "deserving" and "undeserving" poor would not have been eliminated.
Another way of dealing with the problem of different categories of the
poor within the framework of the negative income tax is to establish separate minimum-income guarantees and benefit-rate reductions for various
types of households. Again such modification would introduce complexities
and reduce the appeal of the plan as simple and universal.
Nevertheless, a minimum-income plan may be acceptable both in terms
of cost and of the beneficiaries served. If the guaranteed minimum income
is at or close to the poverty line, and if the rate of benefit reduction is low
enough to limit adverse incentive effects, the plan would meet the tests of a
good income maintenance system.
The Commission on Income Maintenance has been asked to study in
detail the appropriate long-run direction of policy in this area. The Commission will report at the end of this year.
SPECIAL PROBLEMS OF POVERTY POCKETS
Poverty in the United States is unevenly distributed, both racially and
geographically. Two particularly visible concentrations of poverty are big
city ghettos and declining rural areas.
Many difficulties faced by residents of poverty pockets are simply virulent
local outcroppings of national problems. Others are peculiar to the community in which the concentrations of poor occur. The discussion below
separates the elements of poverty problems in ghettos and rural communities into those amenable to general, national solutions and those that
require special programs aimed at the areas in question.
172
STRATEGIES FOR ATTACKING GHETTO PROBLEMS
The most visible—and certainly most explosive—concentration of poverty
is in the ghettos of large cities. Here deteriorating physical facilities, inadequate public services, low income, and high unemployment combine with
high population density to create a dehumanizing, hostile environment.
The ghetto contains a concentration of people whose health, age, family
status, and limited training are obstacles to full-time employment in wellpaying jobs. It has vastly inferior educational and health services. These
are national problems, and strategies discussed elsewhere in this chapter
could produce significant rewards in the ghetto.
Other ghetto problems—and the programs required to deal with them—
are unique. First, unemployment is extremely high. The Department of
Labor reported that in the fall of 1966 the unemployment rate in the lowincome neighborhoods of eight large cities was 9.3 percent. More striking,
subemployment was an additional 23 percent.
The second problem of ghetto areas is extensive deterioration of the
physical environment—housing, commercial buildings, even open spaces.
Restoration of the cities will be expensive, whether publicly or privately
financed, but a large-scale facelifting of urban America offers the opportunity for a rational, coherent attack on the problems of the ghetto.
Fiscal Disparities Within Metropolitan Areas
Roughly an eighth of welfare benefit costs, half of elementary and secondary education expenditures, and virtually all police, fire protection, and
sanitation costs are borne by local government. Central cities, with their
large concentrations of poor, have difficulty meeting these costs. The property tax base per capita is substantially higher in the suburbs than in the
central cities, but suburbs collect less total tax revenue per capita and spend
far less per capita on social services—health care, welfare, police, fire protection, recreation, and sanitation. Suburbs spend far more per capita (and per
student) on education than does the central city. Responding to lower taxes
and better educational systems, a stream of middle income families flows
from the central city to suburban communities. Central cities must then cut
back on services or raise taxes even higher, in either case increasing incentives to leave the city. The heavy burden of providing services to the poor
thus threatens the viability of the central city.
Access to Employment
The residential patterns of the poor affect their opportunities for employment. Because few lower income families can afford automobiles,
their mobility is severely limited. Jobs, shopping, health care, and social
contacts must all be within walking distance or accessible through inexpensive
public transportation.
173
323-166
Total Employment. Most jobs are in the central cities. Even in sectors
such as manufacturing, wholesale and retail trade, nonprofessional business
services, entertainment, and government, with relatively more jobs in lower
skill occupations, the ratio of employment to population is over 40 percent
higher in the cities than their suburbs. Employment in the city is also less
physically dispersed than in the suburbs, and public transportation is more
readily available.
For the foreseeable future, most ghetto residents will continue to have a
greater chance of finding a job in the central city. Job vacancies created
by normal attrition are far more numerous than those created by entirely
new positions, and consequently the number of job openings is greater in
the city with its much larger total employment. Some big city ghettos—
such as Watts—are isolated from the areas of greatest employment density,
but Harlem and Bedford-Stuyvesant are only a few minutes on the subway
from the most dense center of employment in the world. Job problems
in such areas are not explained by physical isolation from sites of employment.
Job Growth. Most of the growth in employment is occurring in the
suburbs, and job opportunities for low-income people will continue to grow
there. Many ghetto residents already hold suburban jobs. A recent study of
commuting patterns in Pittsburgh indicated that employed, low-income Negroes, on balance, traveled away from the central city to reach their jobs,
while whites in the same employment class traveled toward the central city—
and traveled fewer miles.
Access for ghetto residents to the growing number of suburban jobs can
be improved by both better transportation and less discrimination in suburban housing. The transportation requirements for those taking better paying suburban jobs are greatest in the first few months of employment. After
that, workers tend to buy their own cars or form car pools. Transportation
needs of domestics and other low-paid workers are not so easily solved.
Suburban housing is already becoming more available to ghetto residents.
Between 1966 and 1968, the number of Negroes residing in the suburbs
grew by half a million, although Negroes continued to account for only
about 5 percent of the suburban population. Access to suburban housing
should continue to improve as the fair housing provisions of the Civil Rights
Act of 1968 become effective.
Living Costs for the Poor
The central city ghetto is an expensive place to live. Ghetto residents often pay higher prices for comparable merchandise and are frequently sold
inferior goods. To some extent, these higher prices reflect higher selling costs
resulting from smaller average purchases, increased pilferage, slower turnover of perishable items, and higher insurance rates. Easy credit, along with
high-pressure salesmanship and door-to-door selling techniques, also adds
174
to the costs of ghetto retailers. A Federal Trade Commission study of Washington, D.C., furniture and appliance stores revealed that prices in ghetto
stores averaged $255 for each of $100 of wholesale cost, compared to $159
in the rest of the city. Even so, net return on investment was considerably
lower than for retailers elsewhere.
If ghetto residents had greater access to general market retailers, they
would pay significantly lower prices. This access requires improved transportation facilities in some cities and education—educating general retailers
that low-income families can carry moderate amounts of installment credit,
and educating low-income shoppers about price differentials.
The Role of Private Enterprise in Ghetto Development
Reconstruction of the cities will require deeper involvement of private
enterprise.
The major asset of private business is its efficiency in accomplishing specific tasks at minimum cost. The Federal Government has recognized the
contribution business can make. For example, local housing authorities are
now permitted to turn over much of the planning, site acquisition, and
supervision of construction of public housing to private developers. This
"Turnkey" policy has reduced costs and greatly cut the time required to
produce public housing.
Without government inducements, profits are low in ghetto areas—a
deterrent to private investment. Despite higher prices, retail business
has difficulty thriving in the ghetto. Investing in new housing for low-income
families—particularly in big cities—is usually a losing proposition. Indeed,
the most profitable investment is often one that demolishes the homes of lowincome families to make room for businesses and higher income families.
Much of the blemished reputation of early urban renewal programs came
from pursuing the most profitable development of renewal areas.
Many business leaders are willing to sacrifice some profits in order to
invest in the ghetto, but they cannot be expected to shoulder the major part
of a financial burden that is properly the responsibility of all society.
Participation by the private sector is also limited by the large scale normally
needed to make a ghetto project economically viable. Costs are far lower and
prospects for permanent improvement far greater if redevelopment of an
entire neighborhood is undertaken in a relatively short period. Only the
largest corporations are likely to be able to afford efficient renewal efforts.
Government aid to provide profit opportunities will be needed to induce
significant participation by the private sector. The Federal Government
can provide such aid by direct subsidies to firms willing to build under its
program specifications. Alternatively, a tax credit or a deduction from taxable income could be given for a broad class of ghetto development
expenditures.
175
Three considerations bear on the choice of the proper techniques for
attracting private enterprise into ghetto reconstruction.
First, the efficiency of Federal assistance is reduced if subsidies are paid
for activities that would have been undertaken anyway. Tax incentives automatically apply to all investment in the subsidized category. Even in the
most depressed urban areas, some investments are still being made without
subsidies.
Second, a dollar of direct expenditure and a dollar of tax incentive have
identical effects upon the budget, requiring either a reduction in other
Federal programs or an increase in taxes. One technique adds to Federal
expenditures; the other lowers Federal tax receipts.
Finally, tax incentives are not effective for encouraging indigenous businesses. Large corporations, earning profits in other operations, benefit from
tax incentives, but firms operating only in the ghetto—where profits are
low—receive less benefit. New firms often receive no benefits from tax
incentives since fledgling enterprises typically earn low profits. Since support of new, ghetto-owned businesses is a particularly promising vehicle for
promoting ghetto development, a more direct form of assistance for these
firms is necessary. Such firms need loans and management assistance as well
as the subsidies that would be provided to established businesses through tax
incentives.
The Federal Government has moved to assist indigenous businesses.
Projects in Model Cities areas must, where possible, be constructed by labor
and businesses from the "model neighborhood." The Small Business Administration, through federally guaranteed loans and technical assistance,
aided 2,300 minority-owned businesses in fiscal 1968. It plans to raise this
number to 6,500 new firms in fiscal 1969 and 14,000 in fiscal 1970.
The Federal Government can also assist in establishing other social
institutions. Community Action Agencies, supported by the Office of Economic Opportunity, provide a fulcrum for involving the residents of lowincome areas in the revitalization of their neighborhoods. These agencies
also provide a single, knowledgeable source of information on the programs
available to assist the poor, as well as supplying many of these services
themselves.
STRATEGIES FOR REDUCING RURAL POVERTY
Over two-fifths of America's poor live in rural communities, even
though only about one-fourth of the population is rural. Rural poverty,
though not as visible as urban poverty, is a major national concern.
Rural communities face two special problems. First, average family incomes in these areas are often low. Rural communities have difficulty making
sufficient investments in public facilities and schools. Expansion of Federal
support for income maintenance, education, and other social services for
the poor would relieve rural communities of some of the burden of caring
for their relatively large dependent population.
The second special problem stems from the persistent outmigration of
the past half century. Migration to the city occurs largely because of declines
in the principal sources of rural job opportunities—agriculture, mining,
and foresty. Most migrants improved their living conditions by moving. In
areas where jobs were limited and migration took place, those who stayed
obtained more employment at better wages than if migration had not
occurred.
A reduced rural population creates serious problems of public finance.
Those who leave tend to be more employable, more highly skilled, better
educated, and younger than those who remain. Some rural communities
are thus left with a skilled labor force too small to support new industries.
In many areas, excess capacity has developed in public facilities
built for larger populations than currently exist. The cost of maintaining
these facilities limits the ability of local governments to finance other
public services.
Other rural communities are growing vigorously. Manufacturing employment is increasing more rapidly in the less urbanized States than in
those containing large urban centers. Furthermore, from 1962 to 1966 nonfarm employment grew most rapidly in the counties with the smallest population centers.
Net migration out of most rural counties is continuing, but at a slower
pace than in the 1950's, particularly in the rural South and Midwest. For
example, of the 100 nonmetropolitan counties in Kansas, only 7 gained in
population through migration in the 1950Js; 32 have done so since 1960.
Annual net migration from nonmetropolitan counties in the South has
fallen from 400,000 between 1950 and 1960 to 50,000 since 1960. These
trends indicate that a selective rural development policy, concentrating on
those counties which have begun to grow in the 1960's can produce substantial economic progress in much of rural and smalltown America.
The Federal Role In Rural Communities
Federal aid for education, planning, and public facilities overcomes barriers to future development arising from the low income of rural communities. Title I of the Elementary and Secondary Education Act provides
funds to defray part of the costs of education in areas with high concentrations of poverty. About 30 percent of these funds go to rural areas.
The Federal Government has also taken an active role in promoting
areawide planning in rural areas. Forty million Americans reside in
seven areas served by Regional Action Planning Commissions established
under the provisions of the Public Works and Economic Development Act.
These agencies help to plan over-all regional economic development and to
coordinate Federal, State, and local community assistance.
The Department of Agriculture provides technical assistance to private
and public groups in rural areas undertaking coordinated planning and de-
177
velopment activities. Loans, grants, and technical aid to low-income rural
areas from the major Federal Departments amounted to over $1 billion in
fiscal 1968.
Diversification of the Rural Economy
Since economic development programs are more effective if some growth
has already taken place, Federal rural development assistance should be
oriented toward more densely settled "growth centers," such as smaller
growing cities or small metropolitan areas. With a population of
viable size, a community can diversify its economy and cushion itself against
employment fluctuations in one industry. As more firms settle in an area,
they interact with mutual benefit by forming a sufficient market for the
growth of business services and of cheaper communications and transportation—increasing the attractiveness of the community for further
business development.
This strategy has largely been adopted by the Department of Agriculture
and the Economic Development Administration in aiding depressed, nonmetropolitan regions. In addition, Federal agencies should give explicit
consideration to the development effects of Federal installations. Military
bases and scientific installations, for example, have a profound effect on
the community in which they locate.
Some rural communities, suited only for traditional resource-based industries, will continue to decline. The Federal Government should ensure
that the remaining population is not required to carry the whole burden of
declines in the industries many rural communities have depended upon.
Adequate income maintenance, support for education, and federalization of
other costs associated with economic and population decline are the most
equitable steps that can be taken to assist these areas. Federal support for the
costs of moving low-income individuals to employment opportunities elsewhere is also desirable in certain situations. Job training and job location
services are also needed to help both migrants and those who remain. These
last two measures are discussed in Chapter 3.
FULFILLING THE NATIONAL COMMITMENT
With a "poverty gap" of slightly more than 1 percent of GNP, the United
States can—if it will—rapidly reduce poverty. This effort will require that
the incomes of the poor grow faster than average income. Otherwise, conquering poverty will take a long time indeed.
The long-run objective should be to reduce dependency, as well as
poverty. To this end, education and training will be required so that all
Americans can qualify for a decent job. In addition, programs are needed to
expand employment opportunities in poverty pockets. But many of these
efforts will take years to become fully effective.
To meet the most pressing income needs of the poor promptly, expansion of income maintenance is required. Welfare and social insurance programs have brought us a long way in combating poverty among the covered
groups; further benefit increases can close the poverty gap among those
covered.
The most difficult policy issues pertain to families headed by an ablebodied man, for whom no major income support programs now exist. Most
of these men now work but with insufficient earnings to take their families—
particularly large families—out of poverty.
Maintaining high employment is essential to eliminating poverty among
families headed by a working man. Continued prosperity will raise the incomes of some of these men above the poverty line. For the rest, a desirable
policy could be compounded out of job training, placement, income support,
and public employment. The poverty gap in 1967 for these families—containing 10.7 million persons—was $2.7 billion. The actual costs of a program
to assist this group would exceed this amount. Supplementary employment
services and, for reasons of equity and work incentive, some benefits for the
near-poor, would have to be provided.
Federalization of more of the costs of providing the poor with welfare,
education, health care, training, and public facilities would spread the costs
of combating poverty more equitably. Caring for the poor now places a
severe financial burden on communities with concentrated poverty.
The choice as to how poverty will be eliminated has begun to enter into
public discussion and debate. A number of good alternatives are available.
After appropriate and intensive deliberation, the American public must
find mechanisms for effectively attacking poverty—mechanisms and programs that can command widespread support. The success of any program
is jeopardized if assistance is handed out begrudgingly and becomes demeaning to the recipients. Beyond this, the most essential requirement is a program of a scale adequate to guarantee rapid progress toward ending poverty.
Fulfilling the Nation's commitment is far more important than the details
of the precise tactics used.
179
REPORT TO THE PRESIDENT
FROM THE CABINET COORDINATING COMMITTEE
ON ECONOMIC PLANNING
FOR THE END OF VIETNAM HOSTILITIES
181
LETTER OF TRANSMITTAL
WASHINGTON,
D.C.,
December 31, 1968.
THE
PRESIDENT:
SIR: The Cabinet Coordinating Committee on Economic Planning for
the End of Vietnam Hostilities herewith submits its report on the studies
you requested in your memorandum of March 1, 1967.
Respectfully,
JOSEPH W.
BARR
Secretary of the Treasury.
CLARK M.
CLIFFORD
Secretary of Defense.
C. R.
SMITI
Secretary of Commerce.
WlLLARD WlRTZ
^
Secretary of Labor.
IARLES
J.
ZWIGK
Director, Bureau of the Budget.
ARTHUR
M.
OKUN
Chairman, Council of Economic Advisers.
183
CONTENTS
Page
SUMMARY OF FINDINGS
189
FISCAL-MONETARY POLICIES DURING DEMOBILIZATION
RESOURCES AND PRIORITIES
POLICIES T O ASSIST PARTICULAR COMMUNITIES AND INDIVIDUALS .
189
189
190
LOOKING FORWARD TO PEACE
191
FISCAL-MONETARY POLICIES DURING DEMOBILIZATION
191
DEMOBILIZATION SCENARIO
ECONOMIC IMPACT
191
193
FISCAL-MONETARY ADJUSTMENT
195
RESOURCES AND PRIORITIES
198
PROJECTIONS OF THE PRIVATE ECONOMY
198
BASELINE FEDERAL EXPENDITURES
199
T H E PEACE-AND-GROWTH DIVIDEND
200
ALTERNATIVE USES OF THE DIVIDEND
201
POLICIES T O ASSIST PARTICULAR COMMUNITIES AND
INDIVIDUALS
207
T H E MAGNITUDE OF THE READJUSTMENT
207
READJUSTMENT OPERATIONS COMMITTEE
208
FUNDING READJUSTMENT PROGRAMS
209
ASSISTING DEFENSE-DEPENDENT AREAS
210
ASSISTING DISPLACED INDIVIDUALS
210
List of Tables and Charts
Tables
1. Illustrative Projections for Fiscal Year 1972 and Recent Experience
2. Estimated Gap Between Amounts Currently Authorized and
Funded
3. Illustrative New Programs or Major Expansions of existing
Federal Civilian Programs, Fiscal Year 1972 (derived from
Proposals of Task Forces and Study Groups)
4. Estimated First Year Cost of Readjustment Programs
Charts
1. Federal Purchases for National Defense
2. Illustrative Reduction in Defense Spending with a Vietnam
Demobilization
3. Illustrative Paths of Defense Spending With and Without a Vietnam Demobilization
199
202
204
209
188
192
194
Report to the President
FROM THE CABINET COORDINATING COMMITTEE
ON ECONOMIC PLANNING
FOR THE END OF VIETNAM HOSTILITIES
I
N MARCH 1967 you asked the Secretaries of Treasury, Defense, Commerce, and Labor; the Director of the Bureau of the Budget; and the
Chairman of the Council of Economic Advisers to form a committee to coordinate the economic planning for the end of hostilities in Vietnam.
As initial terms of reference, you instructed the Committee to
—consider possibilities and priorities for tax adjustment
—prepare, with the Federal Reserve Board, plans for quick adjustments
of monetary and financial policies
—determine which high priority programs can be quickly expanded
—determine priorities for the longer range expansion of programs to
meet the needs of the American people, both through new and
existing programs
—study and evaluate the future direction of Federal financial support
to our States and local governments
—examine ways in which the transition to peace can be smoothed for
the workers, companies, and communities now engaged in supplying
our defense needs, and for the men released from our armed forces.
Vietnam hostilities first became a significant economic influence in the
summer of 1965, at a time when the economy was remarkably well-balanced
and was in the midst of the longest peacetime expansion in history. The
increase in the military budget required for Vietnam (evident in Chart 1)
complicated the tasks of fiscal-monetary policies. The economy was subjected to inflationary strains. Although the American economic system
demonstrated the strength and adaptability necessary to carry the extra
load without major disruption and without jeopardizing its fundamental
health, the cost of war has been a load for the economy to carry—not a supporting "prop." Prosperity has not depended on the defense buildup and will
not need high military spending to support it in peacetime. On the contrary,
peace will provide the Nation with welcome opportunities to channel into
civilian use manpower and material resources now being devoted to war.
187
Chart 1
Federal Purchases for National Defense
BILLIONS OF DOLLARS
LEVEL
80
*
i
i
60 -
i
*7
i
1968 PRICES-1-7
/
/
i
t
#
—
.
\
#
/
40 #
/
#
/
# /
# /
—
IN CURRENT PRICES
—
20
0
i
i
1950
I
1
52
1
1
54
1
1
56
1
1
58
1
1
60
1
1
62
1
I
64
1
1
66
68
PERCENT
AS PERCENT OF G N P ^ 7
15
-
10
5
0
- '
I
1950
I
I
52
I
I
54
I
I
56
I
I
58
I
I
60
I
I
62
I
I
64
I
I
66
I/CURRENT PRICES DIVIDED BY IMPLICIT PRICE DEFLATOR FOR TOTAL FEDERAL PURCHASES.
2/BASED ON CURRENT PRICES.
NOTE: DATA RELATE TO PURCHASES OF GOODS AND SERVICES.
SOURCES: DEPARTMENT OF COMMERCE AND COUNCIL OF ECONOMIC ADVISERS.
188
I
68
SUMMARY OF FINDINGS
A self-contained summary of the findings of the Committee is presented
initially under three major headings. It is followed by more detailed discussion of each major section.
FISCAL-MONETARY POLICIES DURING DEMOBILIZATION
Sustaining prosperity during the demobilization and seizing the welcome
opportunities of peacetime will depend upon the careful and forward-looking management of fiscal and monetary policies. If demobilization should
produce a major and rapid decline in defense spending, and if policies were
not adjusted, the Federal budget would have an excessively restrictive effect
on the economy.
An illustrative pattern of demobilization was developed on the assumption
that, within 6 months after cessation of hostilities, a genuine peace would be
secured and a full withdrawal of troops could be initiated. In such a rapid
demobilization, the use of real resources for defense purposes would drop
by $16 billion (annual rate in 1968 prices) below the previously planned
path over a period of six quarters following the truce and, ultimately, by $19
billion at the end of 10 quarters. If there were no compensating fiscalmonetary policy actions, the Nation could be threatened with a recession
similar to that at the end of Korean hostilities.
The magnitude and the timing of the policy adjustment best suited to promote steady and healthy economic growth will depend on the strength of private demand at the time peace arrives and on the specific profile of the
defense cutback. The best possible projections of these elements will be
needed in order to guide fiscal-monetary policy.
A number of possible compensating measures can be foreseen now. If
the current 10 percent income tax surcharge is still in effect when hostilities
end, its early expiration (or phasing out) could provide a major offsetting
element. A detailed plan to speed up expenditures on established high priority projects should be available for the President's consideration. If
further stimulus is appropriate, new program initiatives could be launched.
The objectives of the compensating fiscal action should receive the support
of monetary policy, but credit conditions probably should not be pushed
into a posture of aggressive ease. Meanwhile, the objectives of an improved
price-cost performance and balance-of-payments equilibrium should be
pursued intensively.
RESOURCES AND PRIORITIES
The choices among alternative fiscal adjustments during the demobilization period should be guided by longer run priorities. Such priorities should
be weighed in advance so that the Nation will be ready to take full advantage of any opportunities to launch important new programs, to strengthen
high-priority existing programs, or to reduce taxes.
189
323-166 0—69
13
As revenues expand in a growing peacetime economy, the elbow room
in the budget increases. But about one-half of the growth in revenues
is preempted by essentially built-in commitments of existing expenditure
programs to meet the needs of a growing population and an expanding
economy. These commitments are reflected in the estimated "baseline"
budget for both defense and nondefense expenditures in fiscal 1972. These
estimates assume that the transition to peace is essentially completed by
1972, and that the current 10 percent income tax surcharge and certain
excise taxes have expired by that time.
According to the illustrative calculations, the "peace-and-growth dividend"—available for Federal programs above the baseline or for tax reduction—would amount to $22 billion by fiscal 1972, and would increase $7 to
$8 billion a year thereafter. The peace-and-growth dividend must be used in
order to maintain healthy economic growth, and it can be used constructively.
Some possible uses of the dividend are set forth to illustrate the considerable pressures, demands, and opportunities for Federal efforts in the
years ahead. Some liberalization of social insurance and other cash benefits—in part, to keep up with the cost of living—is viewed as a significant
claim on the dividend. In addition, the full funding of existing civilian programs to authorized levels would cost $6 billion a year.
Beyond that, a variety of major expansions in existing programs and
of new programs are highly eligible claimants. A selection of such items,
based largely on proposals which have been made by experts or study groups,
adds up to $40 billion a year. And other more ambitious, new proposals,
which are currently receiving widespread public discussion must also be
recognized. Furthermore, tax reduction merits consideration as an effective
way to share part of the dividend broadly among Americans.
It is clear that the Nation cannot carry out all these activities—funding
existing programs, undertaking new program initiatives, and reducing
taxes—in the next few years from the peace-and-growth dividend; difficult
choices based on a careful determination of priorities will be necessary. But
for those objectives placed at the top of society's priority list, progress can be
made in a peaceful environment of prosperity and reasonable price stability.
As noted above, our calculations allow for expiration of temporary taxes
now in effect. In view of the urgent needs of the public sector, the Committee would not recommend further large-scale Federal tax reductions in
the years immediately following the end of Vietnam hostilities.
POLICIES TO ASSIST PARTICULAR COMMUNITIES AND INDIVIDUALS
The economic impact of the war has been broadly diffused among all
States and most industries. Only a relatively small number of areas and
industries are likely to be specially affected by the demobilization or to
encounter significant transitional problems. The Committee recommends
190
certain measures to aid people in those areas and industries, including:
community redevelopment assistance, homeowner assistance, and—most
importantly—the strengthening of job placement and training.
We also recorrimend the early establishment of a coordinating group,
which might be called the Readjustment Operations Committee, to assume
responsibility for detailed planning of Federal readjustment assistance, to
work with State and local authorities responsible for demobilization planning, and to coordinate Federal readjustment programs during demobilization.
The steps we propose for readjustment assistance are limited and relatively
inexpensive, reflecting our conviction that the maintenance of general
prosperity is far and away the major part of the economic problem of the
transition. In our dynamic and flexible free market economy, most areas and
industries should be able to make a prompt and healthy adjustment so
long as the Federal Government promotes noninflationary prosperity.
LOOKING FORWARD TO PEACE
We also wish to stress the importance of a responsible and responsive
fiscal policy during the remaining period of hostilities. Only in recent months,
through the enactment of the 1968 program of fiscal restraint, have our
Nation's finances become adequately adjusted to the defense emergency
situation. Maintenance of appropriate fiscal and monetary policy is absolutely essential both to preserve prosperity and to minimize the problem of
transition at the end of hostilities.
FISCAL-MONETARY POLICIES DURING DEMOBILIZATION
Peace may "break out" in any number of ways. For example, hostilities
may decline gradually, accompanied by reduced expenditures on armament
and manpower. Alternatively, there could be a lengthy armed truce which
would permit no significant reduction in our forces in Southeast Asia.
DEMOBILIZATION SCENARIO
In the calculations underlying this report, defense activities in Vietnam are
assumed to continue at essentially present levels until hostilities cease. It is
furthermore assumed that, within 6 months after a truce, there will be a
genuine assurance of peace and hence the beginnings of a full withdrawal
of troops from Vietnam with accompanying cutbacks in other outlays.
An illustrative demobilization scenario developed by the Department of
Defense points to the reductions in manpower, materials, and outlays described below. These are the amounts by which defense activities would
fall short of the path that they would have followed had hostilities continued.
1. The armed services would decline by about 800,000 persons, averaging
200,000 a quarter starting in the third quarter following the truce and
terminating after the sixth quarter.
2. Civilian personnel in the Department of Defense would be reduced
by 170,000, also declining smoothly between the third and sixth quarters.
3. As a result of the manpower reduction, military and civilian compensation would be reduced by $7 billion (annual rate) at 1968 pay rates by the
end of the sixth quarter.
4. Other operating expenditures (annual rate in 1968 prices) would
decline by $4 billion over a slightly longer period.
5. Expenditures for procurement would be reduced by $8 billion over an
interval of 10 quarters. This reduction would take longer in order to rebuild inventories held by the Department of Defense.
6. Total real defense spending (annual rate in 1968 prices) would thus be
reduced by $8 billion at the end of four quarters, $16 billion at the end of
six quarters, and $19 billion at the end of 10 quarters.
The time profile of the assumed reduction in real expenditures is shown
in Chart 2.
Chart 2
Illustrative Reduction in Defense Spending
With a Vietnam Demobilization
BILLIONS O F DOLLARS, 1 9 6 8 PRICES (ANNUAL RATES)
20
TOTAL REDUCTION
IN DEFENSE SPENDING
15
M
-
iiii ~
^PROCUREMENT^X^^^^^^g
10
-
5
•"
PERSONNEL COMPENSATION
1
0
1
2
3
4
5
6
1
7
I
8
}
9
QUARTERS FOLLOWING TRUCE
NOTE—DATA RELATE TO FEDERAL PURCHASES OF GOODS AND SERVICES FOR
NATIONAL DEFENSE.
SOURCE: COUNCIL OF ECONOMIC ADVISERS BASED ON ESTIMATES OF DEPARTMENT
OF DEFENSE.
192
1
10
t
11
12
This is a rapid demobilization—probably the most rapid that could realistically be assumed. Demobilization may in fact turn out to be smaller or
more gradual as a result of any one of at least three developments:
1. A gradual decline in military activity prior to the truce,
2. A long period of uncertainty between the attainment of the truce and
the decision for redeployment, or
3. The need to maintain significant residual forces in Vietnam, even in
peacetime.
The rapid pattern of demobilization is assumed because it represents the
sharpest test of the Nation's ability to adapt to peace—not because it appears
most probable. If the Nation is ready to meet the challenge of rapid demobilization, the lesser challenge of a more gradual transition can surely be
handled.
The estimated decline in defense expenditures is significantly less than
the $29 billion a year currently estimated as the cost of the war. Of resources
currently used for Vietnam, $10 billion would be required in other military
uses in peacetime.
The reduction in Vietnam outlays during the demobilization will appear
as a shortfall from an otherwise increasing path of defense spending. If
hostilities were to continue with undiminished intensity, the total defense
budget would probably continue to rise at least enough to cover increases
in military pay scales and gradual advances in prices paid for defense goods.
A hypothetical example is presented in Chart 3 to illustrate the relationship between the paths of defense spending with and without the demobilization. In this illustration, defense purchases are assumed to be $80 billion
initially and to be rising at the rate of $1 billion a quarter to cover price
and pay increases and to provide for a very modest real growth. In the
absence of peace, defense purchases would reach $86 billion after six quarters and $90 billion after 10 quarters. The demobilization scenario above
implies that defense purchases would be pulled below this rising path by
about $16 billion six quarters after the cessation of hostilities, and by about
$19 billion after 10 quarters. The absolute decline from the initial level of
$80 billion would be considerably less, reaching $10 billion at the end of six
quarters.
ECONOMIC IMPACT
The economic impact of the demobilization (and the required fiscalmonetary adjustment) can be most readily appraised by supposing that the
fiscal program had been appropriately designed initially, under the assumption of continuing hostilities, to promote a balance between aggregate
demand and the economy's supply capabilities. In this situation, a major
policy adjustment would be required to offset the shortfall resulting from
demobilization.
The impact of demobilization on the balance between aggregate demand
and the economy's productive capacity has three aspects.
X
93
Chart 3
Illustrative Paths of Defense Spending With and
Without a Vietnam Demobilization
BILLIONS OF DOLLARS (ANNUAL RATES)
DEFENSE SPENDING
90
UNDER HYPOTHETICAL
CONTINUATION OF HOSTILITIES
85
80
75
UNDER
DEMOBILIZATION
70
65
0
1
2
3
4
5
6
7
8
9
10
QUARTERS FOLLOWING TRUCE
N0TE._DATA RELATE TO FEDERAL PURCHASES OF GOODS AND SERVICES FOR
NATIONAL DEFENSE.
SOURCE: COUNCIL OF ECONOMIC ADVISERS BASED ON ESTIMATES OF DEPARTMENT
OF DEFENSE.
1. The reduced use of resources by the Federal Government, reflected
in the decline of defense spending described above.
2. The short-run downward adjustments of inventories by defense suppliers as their production is adjusted to declining orders and falls below
deliveries to the Government. The economic impact would occur even before
Federal expenditures declined, and would remain significant for only about
four quarters after the truce.
3. An increase in the Nation's potential output resulting from the potential additional employment of released military personnel in civilian
jobs, where productivity is substantially greater. Some women will withdraw
from the labor force when their husbands return to civilian life, and some
veterans will return to school before entering the civilian labor force. After
allowing for these elements, the cumulative net induced increase in the
private labor force is estimated at about 600,000 after six quarters.
This shift toward higher productivity would add about $4 or $5 billion
to potential GNP. To absorb this increment, action would be required to
add nearly $2 billion directly to total demand. The resulting additional
194
incomes could be expected to generate the necessary additional $2 to $3
billion increment in demand.
With no policy offset whatsoever, the direct shortfall of demand by the
sixth quarter following the truce could amount to $18 billion: $16 billion
for the real decline in military spending and $2 billion for the direct increment in demand needed to make use of the addition to potential output.
Shifts in the strength of private demand might either reduce or add to this
gap, but they would be unlikely to change the picture dramatically. Without
compensatory stabilization action, the gap would be multiplied through
induced further cutbacks in demand that spread through the private sector.
Eight quarters after the truce, the total multiplied shortfall below the potential output of the economy could reach $40 billion. Inaction would thus
threaten a recession similar to the 1953-54 experience following the Korean
hostilities.
FISCAL-MONETARY ADJUSTMENT
The instruments of fiscal and monetary policy must be available for
prompt and decisive use to promote noninflationary prosperity and economic
growth. These instruments are clearly capable, in principle, of offsetting
the restrictive fiscal impact of demobilization. Indeed, an excessive or premature stimulative fiscal-monetary program could overdo the job and
generate an inflationary boom. A major challenge will be to determine and
carry out a policy adjustment of proper size and timing.
Determining the Magnitude
The above projections merely suggest the general magnitude of the policy
requirements during a rapid demobilization. The specific dimensions can
only be appraised when peace comes and much more is known about the
prospects for private demand, the budget, and the time-path of the military
cutback. Nevertheless, some important guides can be provided to the problems and procedures involved in determining the magnitude of the compensating actions.
1. When peace comes, the President and the Congress will need advice
based on detailed projections of the GNP, prices, unemployment, and the
balance of international payments. Despite the inherent limitations of projections, prudent reliance on quantitative forecasts—carefully weighed and
interpreted—is preferable to a policy of wait-and-see, a resort to predetermined rules of policy adjustment, or a simple extrapolation of existing
economic conditions.
2. Efforts should begin now to strengthen the quality of statistical information about the economy's performance—such as those improvements recommended in the budget program for fiscal 1969. Information of this
type may be critical in determining the appropriateness of policy during
the demobilization.
3. For the same reasons, the Department of Defense should continue intensive efforts to improve projections of military orders and outlays so as to
aid economic policy during demobilization. Assessing the time-path of the
military cutback will be subject to uncertainties similar to those that were
encountered in appraising the initial defense buildup in Vietnam.
4. Flexibility of fiscal and monetary policy decisions will be important to
the success of adjustment. Even with the best efforts, gauging private demand and defense outlays will be difficult. During the demobilization, prediction of private spending will be complicated by the substantial psychological impacts of peace on private decisionmakers. It is a safe judgment that
Americans will be delighted by peace, but it does not follow that they will
therefore spend more, or alternatively that they will save more. Hence a
successful transition program—marked by steadiness and stability in the
growth, employment, and price performance of the Nation—may require
continuing adjustments in the budgetary balance and in the behavior of
monetary and credit flows.
5. Fiscal-monetary policies for the transition should take into account the
initial economic situation. If the economy is advancing too rapidly when
peace comes, the restrictive effect of demobilization should not be entirely
offset. If the economy is initially sluggish, the adjustment of stabilization
policies should more than compensate for the impact of demobilization.
Types of Compensatory Action
In the event of a rapid demobilization, the required policy adjustment
may be large. This extraordinary "dividend" would be fully available to
provide for "controllable" expenditures or tax reductions, unlike the normal
fiscal dividend from growing tax revenues which must, in part, finance the
built-in growth of Federal expenditures. The various types of action which
might be undertaken should be considered in advance.
1. If the cessation of hostilities occurs while the income tax surcharge is
still in effect, its early expiration (or phasing out) could provide a major
element in the required fiscal offset. Acceleration of the currently scheduled
reductions in excise taxes on automobiles and telephone service could serve
as another element in the fiscal adjustment.
2. There should be available, for the President's consideration, a program of accelerated expenditures that could be initiated on short notice
following the cessation of hostilities. These should be confined to highpriority public expenditures which, in any event, would be made in the
near future. It is currently estimated that such a program could add to
Federal expenditures (at annual rates) by as much as $3 billion in 6
months and $7.5 billion in 12 months following its activation.
3. Decisions on Federal expenditures, as part of the program of fiscal
adjustment, should be made in light of the promptness with which various
types of outlays will add to total demand. For example, according to our
staff studies, some—although not all—Federal grant programs to States
196
and localities involve a significant lag between the expenditure of the funds
by the Federal Government and their translation into additional purchases
by the recipients. Programs with long lags are not ideal for supporting demand during the transition. In contrast, other Federal programs generate
orders or contracts to the private sector which would increase employment
and economic activity promptly even before expenditures are incurred by
the Federal Government.
4. While the precise assignment of responsibilities between fiscal and
monetary policies should be made in full light of the circumstances associated with peace, monetary policy should be expected to play a supportive
role to the fiscal program. Credit policies can undoubtedly help significantly
to ensure an adequate supply of mortgage credit to meet the needs for additional housing. But placing a heavy readjustment burden on monetary
policy would be inadvisable; it probably should not shift toward extreme
ease to provide a maximum economic stimulant. For one thing, balanceof-payments considerations are likely to limit, to some degree, the easing
of credit. Also, the flexibility inherent in monetary policy makes it a useful
instrument to hold in reserve as a means of compensating for deficiencies
or excesses that might develop in the fiscal program or for unforeseen
developments in private demand.
5. In general, fiscal policy adjustments during the transition should advance longer range national objectives. One basic choice will concern the
relative importance in the fiscal program of tax reduction and of increased
Federal expenditures. This decision should not be governed by considerations of economic stabilization; various mixes of increased spending and
reduced taxes can be equally satisfactory from that standpoint. Rather the
choice should depend upon the extent to which the Nation wishes to
channel resources from defense uses into the other areas of the public
sector. Given the allocation between tax cuts and increased civilian programs, further choices will be required to set priorities among various
existing programs and possible new programs. These priorities should be
established in advance.
6. In the event that the Administration plans to initiate, during the
transition, any new programs which would require major legislation, such
legislation might be submitted to the Congress in the near future for discussion and debate and perhaps even for enactment on a standby basis.
Thus these programs could be ready when needed.
Other Objectives
In addition to the objective of steady and sustainable growth at high
employment, policies during the transition should be directed at the price
performance of the economy and the balance of payments.
1. During the transition period, efforts should be redoubled to combat
the troublesome inflationary tendencies of a high-employment economy. The
efforts could include various measures which have been explored recently by
the Cabinet Committee on Price Stability: to strengthen manpower programs, to improve the price performance of particularly troublesome sectors
such as construction and medical care, to increase the efficiency of the private economy generally, to minimize any inflationary effects of the Federal
Government's own activities, and to achieve, through cooperative efforts,
patterns of collective bargaining and of business price determination that
are consistent with over-all price stability.
2. Intensive efforts should be made to take full advantage of the opportunities that peace may bring for improvement in the U.S. balance of payments. The direct foreign exchange cost of our military presence in Southeast
Asia is now about $1.6 billion a year higher than in 1965. Reduction in this
outflow could be reinforced by other measures to yield a more comprehensive solution to our lingering international payments problem.
RESOURCES AND PRIORITIES
Many of the choices that will have to be made during transition should be
guided by a longer range view. To build the best bridge to peacetime prosperity, we should know in advance where we want to go when we cross that
bridge. The following projections are intended to provide an indication of
the resources that will become available in the next few years, and to serve
as an aid in making critical choices about the uses of these resources.
The projections are focused on fiscal 1972. They are based on the assumption that the transition will be essentially completed by that time, an
assumption that is reasonably consistent with the demobilization scenario if
a truce occurs during calendar 1969.
PROJECTIONS OF THE PRIVATE ECONOMY
Underlying the post-demobilization outlook are some fairly detailed economic projections prepared by our staff. While these projections are surely
not to be regarded as precise forecasts of economic conditions, they provide
useful rough indications, on the basis of reasonable assumptions, of what the
economic situation might be.
The economic framework was based on an unemployment rate of 3.8
percent and an over-all rate of price increase which gradually declines to
about 2 percent a year by 1972. These assumptions represent neither a forecast nor a judgment that these rates will necessarily be feasible or appropriate. Lower unemployment would result in a higher GNP and increased
budgetary resources. Greater price stability would also be highly desirable.
What combination of price stability and high employment will prove feasible
depends upon the success of measures to help reconcile these two objectives.
The time-path of real GNP was estimated, using labor force, employment,
and productivity projections supplied by the Bureau of Labor Statistics. On
the basis of the projected path of the over-all price index of GNP, the
estimated GNP (in current dollars) for fiscal 1972 is $1,100 billion
(Table 1).
198
TABLE 1.—Illustrative projections for fiscal year 1972 and recent experience
[Billions of dollars]
Calendar year
Item
1968,
Gross national product
Federal receipts.._
second
half *
879
_
_.
185
Federal expenditures and dividend.
186
Baseline expenditures
_.
186
80
106
Defense purchases..
Other expenditures.
Peace-and-growth dividend.
Federal surplus or deficit ( - ) . _ _
-1
Fiscal year
1972 projected
1,100
226
222
200
73
127
22
4
i Seasonally adjusted annual rates; preliminary.
Note.—Federal receipts, expenditures, and surplus or deficit are the concepts used in the Federal Government sector of
the national income and product accounts.
Detail will not necessarily add to totals because of rounding.
Sources: Department of Commerce and Council of Economic Advisers.
This GNP estimate served as the basis for projecting anticipated Federal
revenue in 1972, in line with the assumed growth of incomes. Projected
revenues are augmented by scheduled increases in social security taxes, and
reduced by the assumed expiration of the current 10 percent income tax
surcharge and of excise taxes on telephone service and automobiles. The net
result of these calculations is an estimate of Federal receipts in fiscal 1972 of
$226 billion.
Next the various components of private demand were projected, allowing
for the effect of tax payments on private incomes and assuming that the
indicated GNP was in fact achieved. Specific allowances for the impact of
the Housing Act of 1968 were incorporated into the projection of residential
construction activity. Additional estimates were also made for anticipated
State and local government expenditures.
BASELINE FEDERAL EXPENDITURES
A baseline level of Federal expenditures was then projected.
Defense
Baseline defense expenditures for fiscal 1972 are calculated on the assumption that non-Vietnam programs now funded or approved will be carried
out on schedule with no stretchout or cancellation. No allowance is made
for possible new defense programs. These baseline defense expenditures are
consistent with the demobilization scenario outlined earlier. The estimate
for defense purchases is $73 billion in fiscal 1972, compared to $80 billion in
the second half of calendar 1968. The $7 billion decline is the result of the
reduction in spending associated with Vietnam (which amounts to $19 bil-
199
lion at 1968 prices, as shown in Chart 2), offset in part by allowances for
higher pay scales, some upcreep in prices paid for defense items, and program
adjustments following the end of the war.
In constant prices, the baseline estimate for fiscal 1972 is nearly 20 percent
below current real defense outlays. Compared with the pre-Vietnam average
level of 1960-64, real baseline expenditures for fiscal year 1972 are roughly
15 percent higher. The calculations of cost increases are necessarily imprecise
because the character of defense equipment and programs changes markedly
over time. After 1972, baseline defense expenditures would move up slowly,
mainly to keep pace with rising costs.
Nondefense
Baseline Federal nondefense expenditures rise over time for several reasons. Some gradual increases must be expected in the prices of the things the
Government buys, and the pay of civilian Government employees must be
raised about in pace with wages and salaries elsewhere. More veterans
become eligible for pensions; more Government employees qualify for retirement benefits; a growing population increases the workload of many Government agencies, such as the Post Office Department and the National Park
Service; and so on. Social security benefits rise even with an unchanged
benefit formula, as more persons become eligible for benefits and as the average past income of applicants rises. As a result, baseline nondefense expenditures will rise nearly $7 billion per year to reach $127 billion in fiscal 1972.
THE PEACE-AND-GROWTH DIVIDEND
The peace-and-growth dividend may be defined as the additional total
demand—over and above normal private demand and baseline Federal
expenditures—needed to achieve the specified GNP target. Estimated total
demand for goods and services—including that in the baseline Federal
budget—adds up to $1,078 billion for fiscal 1972. The difference of $22
billion between the target GNP of $1,100 billion and estimated total demand
is the peace-and-growth dividend. It represents the additional total demand
that would have to be forthcoming to achieve the GNP target.
For the years following 1972, the annual peace-and-growth dividend may
be expected to grow $7 or $8 billion a year, as annual Federal revenues expand by roughly $15 billion and baseline expenditures absorb about half
of that growth.
The peace-and-growth dividend can be viewed in another way. Between now and fiscal 1972, the $19 billion decline in defense expenditures
resulting from peace in combination with normal revenue growth provides
sufficient Federal budgetary resources to cover built-in defense and nondefense commitments, to permit removal of the surcharge, and to allow for a
further $22 billion addition to total demand through expansionary policy
actions.
2OO
The peace-and-growth dividend is thus a rough measure of the resources
available for expansionary action. A dollar of this dividend may be "used up"
either by a dollar of increased Federal purchases or by a dollar of additional private purchases. The latter could be induced by a reduction
in taxes, an increase in Federal transfer payments, or an easing of monetary
policy.
An increase in transfer payments or a reduction in taxes of one dollar will generally not increase private spending by a full dollar; to the extent that these instruments are used, the total of expansionary fiscal action
can be somewhat greater than the peace-and-growth dividend.
The projections implicitly assume certain monetary conditions and interest rates. The appropriate Federal Reserve policy may be either more
restrictive or more stimulative than assumed, thus affecting fiscal policy
requirements.
The appropriate budget deficit or surplus in any given year is determined
by the fiscal action needed to support private demand in light of monetary
conditions. The above calculations imply a $4 billion surplus (national income accounts basis) in fiscal 1972. Private demand may be either weaker or
stronger than assumed, thereby calling for a different budgetary policy. If
private demand is weaker, smaller surpluses (or possibly deficits) will be
needed, and the peace-and-growth dividend in fiscal 1972 will be larger than
$22 billion. Conversely, if private demand is stronger, larger surpluses will
be needed and the dividend will be smaller.
ALTERNATIVE USES OF THE DIVIDEND
The peace-and-growth dividend must be used in some fashion if the
growth and employment targets are to be achieved. And it surely can be
used productively by strengthening valuable Federal programs, enacting tax
reductions, and easing monetary policy. Indeed, the problem will be to
choose among many worthy alternatives.
There is no limit to the portion of the peace-and-growth dividend that
could, in principle, take the form of a lighter tax burden on individuals and
businesses. This use of the dividend would contribute effectively to achieving the growth and employment targets. Our national experience from
1962 to 1965 demonstrates the effectiveness of the stimulus from a markedly
lightened Federal tax burden. But the use of the dividend to reduce
Federal taxes must compete with compelling needs for strengthened and
new public expenditure programs. The ultimate national decisions on priorities must focus on the allocation of the dividend between these two basic
routes.
Some of the possible increases in Federal expenditures are spelled out
below. Two areas of expenditure that would appear to have a significant
claim are: increases in benefits needed to maintain standards under social
security and related Federal programs, and the full funding of existing programs which are currently operating below authorized levels.
201
Maintaining Standards Under Cash Benefit Programs
The baseline expenditure projections allow for growth in social security
and other transfer benefits resulting from an increased number of recipients
and an increase in the lifetime earnings of recipients under the present
benefit formula. But they make no allowance for statutory liberalization of
benefit formulas under Old Age and Survivor's Insurance, unemployment
insurance, Federal retirement, railroad retirement, veterans benefits, and
public assistance programs. If, in fact, there were no legislative liberalization, social insurance trust funds would accumulate a substantial surplus,
while benefits would shrink in terms of purchasing power. A legislated
increase of $4 billion by fiscal 1972 in these benefit formulas would ensure
that benefits at least keep pace with assumed increases in the cost of living.
Full Funding of Existing Programs
Several Federal programs, particularly ones adopted recently, are operating below levels authorized by the Congress. To fund these programs fully,
thus making appropriations match authorizations, would cost about $6
billion a year as distributed in Table 2. These programs are already making
important contributions to the solution of major social and environmental
problems, and increasing their appropriations to authorized levels would
probably command high priority. Nevertheless, in establishing priorities, the
relative value of each of these programs should be weighed against those of
new or expanded programs and of tax reduction.
TABLE 2.—Estimated gap between amounts currently authorized and funded
Billions of
dollars
per year
Program
6.0
Total full cost..
2.0
1.3
.6
.5
.2
Elementary and secondary education
.,
Higher education
Housing and community development
Water and air pollution control
Crime control and prevention
Area redevelopment
_._
Health training and research, etc
__.
Agricultural conservation and adjustment.
'.A
.5
Source: Bureau of the Budget.
New Efforts in Civilian Programs
A variety of new efforts—entirely new programs or major expansions
of existing civilian programs—are also eligible claimants for a share
of the peace-and-growth dividend. A review of recent recommendations
by task forces or study groups indicates the possible desirability of new
domestic programs in the fields of education, health, job and manpower
training, social insurance, welfare, urban development, crime prevention,
202
air and water pollution control, natural resource development, transportation, space technology, and science.
Table 3 contains a list of programs that have been prominently and
generally discussed recently as desirable to meet the needs of the Nation
during the next several years. The table is presented for illustrative purposes
only and does not indicate any program priorities. It sets forth quantitative
estimates of the expenditures that might take place in each of these programs
during fiscal 1972. In many instances, the dollar amounts shown in the table
are considerably below the recommendations of recent task forces or study
groups. By many standards, the list is incomplete and inadequate. Yet, it
totals $40 billion—nearly double the entire estimated peace-and-growth
dividend for that year. The clear lesson emerging from this table—and the
reason for its inclusion in this report—is that some very difficult choices
will have to be made.
New Defense Programs
Depending upon international developments affecting our national security and upon technological changes in weapon systems, added expenditures on new defense programs may be needed. If these are essential to our
national security, they must be given a top priority claim on the peaceand-growth dividend. At the same time, it is clear that the possibilities
for expansion in the defense area are virtually unlimited, and that utmost
efficiency will continue to be needed in budgeting for defense. For
illustrative purposes, the staff of the Department of Defense has assembled
a package of $6j/i billion (annual rate) of expenditures on new DOD programs which may come up for consideration in the next few years. The
major elements in the package are expenditures of $2 billion for aircraft
development and modernization in connection with major new programs,
$0.8 billion for the construction of defense installations and family housing
projects, $0.7 billion for shipbuilding and modernization of naval forces,
and $2 billion for advanced strategic and general purpose weapon systems.
Major New Initiatives
The proposals listed in Table 3 essentially expand or build upon existing
programs. More elaborate proposals have also been advanced as alternatives
to this piecemeal approach.
A comprehensive income maintenance plan, such as the "negative income tax," has been widely discussed as a simple and equitable device to
assist the poor. A negative income tax that succeeded in making major
inroads on poverty while preserving work incentives might cost as much as
$15 to $20 billion a year. Such a program would protect people against the
ravages of poverty, but it would still need to be reinforced by efforts in
housing, health, education, and job training aimed at the long-run sources
and causes of poverty.
203
TABLE 3.—Illustrative new programs or major expansions of existing Federal civilian
programs, fiscal year 1972 {derived from proposals of task forces and study
groups)
Hypothetical
expenditures
(billions of
dollars)
Program
Total expenditures..
39.7
Education
Preschool
Elementary and secondary..
Higher..
Vocational
7.0
1.0
2.5
3.0
Health
Kiddie-care
Medicare for disabled
Comprehensive health centers
Hospital construction and modernization..
3.8
.5
1.8
1.0
Nutrition
1.0
.8
Community service programs.
Jobs and manpower
Public jobs
Manpower Development Training Act.
Employment service
2.5
1.8
.5
.2
Social security and income support
Unemployment insurance
Public assistance
Social security improvements
9.5
2.0
4.0
3.5
.3
Veterans
Economic, area, and other special development programs..
Entrepreneurial aid
Area redevelopment
Rural development
Indian assistance
2.2
Crime, delinquency, and riots
Violence and riot prevention
Safe streets programs
—
Rehabilitation of offenders and delinquents
1.0
.1
.3
.3
.3
L0
—
Prevention of delinquency and crime by special measures for delinquency-prone youthQuality of environment
Air pollution prevention and control
Public water supply construction programs
Water pollution control and sewage treatment
Solid waste disposal
Natural beautification, environmental protection, and recreational development
Natural resource development and utilization
Land and forest conservation...
Water resources and related programs
Mineral and energy (excluding hydroelectric) development
Natural environmental development
_
___
!3
1.0
.1
.2
1.4
!5
.2
.5
5.5
Urban development
_
_
___.
New cities
Land acquisition and financial planning (suburban)..
Urban mass transportation
Model cities
_
Other urban facilities and renewal
Transportation
_
Airway and airport modernization
_
Rapid interurban ground transit..
_
Modernization of merchant marine
Motor vehicle and transportation safety research and safety grants
1.7
.5
.5
2.0
2.0
1.0
.4
.1
._
.3
Science and space exploration
Post-Apollo space program
_
Scientific research in oceanography, communications, social and behavioral sciences, and natural
sciences
_
1.0
Foreign economic aid
1.0
See Notes at end of table.
204
.5
TABLE 3.—Illustrative new programs or major expansions of existing Federal civilian
programs, fiscal year 1972 (derived from proposals of task forces and study
groups)—Continued
NOTES
Education. The preschool program, an extension of Head Start, would provide full-time preschool education for about
500,000 children.The elementary and secondary education funds would about double the Federal support in that area. The
funds proposed for higher education would more than double current Federal support.The vocational education funds would
raise Federal support about halfway toward the recommendation of the 1968 Advisory Council on Vocational Education.
Health. The "kiddie-care" proposal would provide health care for needy mothers and infants. Medicare offered to
beneficiaries of social security disability insurance on a contributory basis would potentially reach 2.2 million persons in
1972. About 350 additional comprehensive neighborhood health care centers a year could be established for the amount
shown. The added funds for health facilities would enable the Federal Government to double the rate of output of such
facilities, in line with estimates of national needs.
Nutrition. Nutritional supplements for needy pregnant women, nursing mothers, and small infants account for about
$200 million, while the remainder would allow a doubling of existing food assistance programs.
Community service programs. This would provide for expanded daycare centers for children of needy working mothers
and for expansion of coordinated services through neighborhood centers.
Jobs and manpower. The funds for jobs in the public sector would permit expansion of about 500,000 jobs to provide
public service employment for the chronically disadvantaged; this program would reinforce expansion in education, health
services, and urban and area redevelopment. The increase in MDTA training would support expansion of the JOBS program and would reinforce efforts to lower unemployment while improving the Nation's price performance. It would also
provide trained manpower for construction. The growth in employment service operations envisions strengthening, decentralizing, and computerizing manpower activities; developing a rural manpower service; and enlarging services to the
disadvantaged.
Social security and income support. The unemployment insurance funds would provide for higher benefits, extended
benefits during recessions, and aid to the unemployed through retraining and mobility assistance. The public assistance
funds could permit revision of benefit standards and extended coverage, or the adoption of a modest new program of income aid with objective standards. The added expenditure could fill as much as 40 percent of the current poverty income
gap. Expansion of the WIN program would provide more job and training opportunities for welfare recipients. The social
security expenditure couid provide a higher minimum benefit for those dependent on social insurance benefits as the
main source of income, and liberalization of eligibility requirements for disability insurance, as well as some general improvement in benefit levels.
Veterans. The higher priority recommendations made by the Veterans' Advisory Commission in March 1968 could be
instituted with these funds.
Economic, area, and other special development programs. The entrepreneurial assistance program could help minority
groups—so-called "black capitalism." Area redevelopment programs would assist growth centers in less populated areas,
while rural redevelopment programs would concentrate on small communities, providing community facility development,
special housing, and family farm assistance.
Crime, delinquency, and riots. Federal aid to State and local governments could be provided to help prevent violence
and riots and permit a higher degree of Federal readiness to cope with such emergencies. The safe streets program funds
would be used to work towards the objectives of the National Crime Commission with respect to strengthening the police
and courts. Rehabilitation of offenders and delinquents would be pursued by intensive retraining and other services.
Quality of environment. Federal funds for pollution abatement may be required to enforce standards, investigate claims,
or abate pollution caused by government or not readily attributable to particular private individuals. Assistance in expanding
the Nation's water supply system would provide a small fraction of the $2.5 billion annual requirement over the next 10
years. Provision of more recreational areas near population centers would be made possible.
Natural resource development and utilization. Department of the Interior, Corps of Engineers, and Department of Agriculture programs relating to land, mineral, energy, forest, recreational, and other fields have large backlogs of useful projects, many already planned and authorized but held back for budgetary reasons.
Urban development. Metropolitan development assistance would support improved planning and coordinated advance
land acquisition. Each of these programs emphasizes these requirements, whether in new communities, suburbs, or older
central cities. The allowances represent only a fractional contribution to the reconstruction and development of the cities.
Transportation. Such expanded investments in the improvement of the principal elements of the Nation's transportation
system would serve the objectives of economic development, safety, and national defense.
Science and space exploration. The allowances would permit the science and space agenices to fund some of the research
opportunities not covered in the stringent budgets of recent years.
Foreign economic aid. This additional amount would help to meet growth targets in Southeast Asia and under the
Alliance for Progress as well as to cover other aid requirements. Even this increase would leave our foreign assistance
program below levels of a few years back.
Source: Bureau of the Budget.
205
323-166 0—69
14
An alternative major program initiative would provide guaranteed employment opportunities for persons willing and able to work but unable to
find jobs. Depending on eligibility criteria and the techniques of implementation, such a program might cost $2 to $10 billion a year.
Another area of mounting public concern is the financial pressure on
State and local governments. As a means of reducing the relative importance
of the more onerous State and local taxes, the Federal Government might
adopt some general scheme of revenue sharing—such as a return of some
personal tax revenues to the States (or localities) or a Federal tax credit
for State income taxes. Some suggested plans would cost $5 to $10 billion
a year. A specific but more limited proposal along these lines would be the
establishment of a trust fund to finance a generalized Model Cities program.
Another major proposal that has much support is the establishment of
an Urban Development Bank, which would raise its funds in the private
capital market. This institution would lend to State and local governments at reduced cost, thereby relieving the pressure on the market
for tax-exempt securities. It would place only a minimal burden on the
Federal budget since the interest subsidies would be offset, at least in part,
by increased Treasury receipts from reduced use of the tax exemption. But
the charge against national resources—and therefore against the peace-andgrowth dividend—would be substantial, depending upon the extent to which
the Bank finances projects that would not otherwise have been undertaken.
There have also been proposals for replacing the present military draft
with a more equitable and efficient method of obtaining the manpower
needed for national defense. One such proposal, which might cost $5 to
$10 billion a year, would be the adoption of a fully volunteer army. Another
would be the establishment of a National Service Corps, in which every
young person would be expected to give at least 2 years of service to the
Nation either as a member of the Armed Forces or in a civilian assignment
that would contribute to the solution of important national problems.
Conclusion
The problems of poverty, human resource development, and the pressing
need to improve our physical environment will impose very heavy demands
on the Federal budget in the years ahead. The end of the struggle in Vietnam, together with increased tax revenues resulting from economic growth,
will make a sizable volume of real resources available to deal with these
problems. But, for years and years ahead, the peace-and-growth dividend
is dwarfed by the magnitude of the needs. Difficult choices must be made—
choices between increased expenditures and tax reductions, between defense
spending and nondefense programs, and among competing civilian programs. The above calculations allow for tax reduction from present rate
levels through the expiration of the 10 percent surcharge and certain excise
taxes. These funds would permit the private sector to engage in extra private
206
consumption or investment above the normal growth of private demand,
But in view of the vast and urgent needs for services that can best be supplied through the public sector, we would not recommend further largescale Federal tax reductions in the years immediately following the end of
Vietnam hostilities.
POLICIES TO ASSIST PARTICULAR COMMUNITIES AND
INDIVIDUALS
Demobilization will require some shifts in employment patterns—from
the Armed Forces to civilian jobs, from defense industries to those producing
civilian goods and services, and from one community or area to another.
Shifts in the composition of activity will not be new or unusual. They are
a regular feature of the highly mobile and dynamic U.S. economy. As
technology and the pattern of demand evolve, the free choices of businesses,
workers, and consumers operate through markets to shift resources among
industries and geographic areas. These movements are largely self-adjusting
and do not usually pose major problems either to workers or communities.
When support is needed, various Federal agencies stand ready to assist
through community development activities, job information, and manpower training. The Office of Economic Adjustment in the Department
of Defense has been dealing since 1961 with the specific economic impact
associated with closings of defense installations and other major changes in
military outlays.
The experience of these activities provides a guide for policies to assist in
the adjustment problems of those communities and individuals likely to be
severely affected by demobilization. Measures to assist in specific adjustments can complement fiscal-monetary policy in producing a smooth, noninflationary transition.
THE MAGNITUDE OF THE READJUSTMENT
Under the particularly rapid demobilization scenario assumed above, an
estimated 600,000 persons would be added to the private labor force during
the six quarters following the truce. In addition, as many as 750,000 civilian
employees could be required to shift jobs as defense purchases from private
businesses decline. Altogether, an additional 1.3 million workers may seek
new civilian employment over a period of six quarters—an average of about
75,000 job shifts a month over and above those normally taking place. The
shifts would be unevenly spaced during the period and might exceed 100,000
in some months.
This is a significant—but not enormous—addition to the normal amount
of job shifting. To provide perspective, in 1966-67 the average number of
layoffs per month in manufacturing alone was about 250,000, and voluntary
207
separations averaged about 470,000 a month, while manufacturing workers were hired at an average monthly rate of 730,000 in 1966 and 640,000
in 1967. While no comparable data exist for nonmanufacturing sectors,
layoffs and hirings for the total economy must be far larger.
The figures indicate the dynamism and the normal adaptations of the
labor market. While specific problems of dislocation in certain areas will
occur, the figures do indicate that the magnitude of the demobilization
problem should be manageable if fiscal-monetary policies ensure that overall demand remains strong.
Particular measures to facilitate the structural transitions of demobilization
should include community redevelopment assistance, homeowner assistance,
and, most importantly, the strengthening of job placement and job training. Efficient planning and implementation of these measures will require
the establishment of a coordinating committee.
READJUSTMENT OPERATIONS COMMITTEE
A Readjustment Operations Committee should be established in the
near future to assume responsibility for detailed planning of Federal readjustment assistance and to work closely with State and local authorities.
The Committee should include the Secretaries of Defense, Commerce, and
Labor; the Director of the Bureau of the Budget; the Chairman of the
Council of Economic Advisers; and the Director of the Office of Emergency
Preparedness.
Prior to demobilization, the Committee should be responsible for:
1. Planning for demobilization, including frequent updating of the estimated expenditures required for adjustment assistance,
2. Undertaking and supporting research on characteristics of individual
communities likely to require special readjustment assistance and in particular developing a system of "early warning,"
3. Providing technical advice and information for State and local government demobilization planning authorities, and
4. Coordinating an inventory by the Departments of Defense, Commerce,
and Labor of the skills and training of defense industry workers and armed
services personnel, and of the skill requirements of potential sources of
employment in defense-dependent areas.
During the demobilization period, the Readjustment Operations Committee should be responsible for: (1) Coordinating Federal assistance programs to communities and individuals with severe readjustment problems,
(2) Identifying areas experiencing, or likely to experience, high unemployment during demobilization, through advance notification by the Department of Defense of impending contract cancellations and military base
closings, and through a careful monitoring of economic developments in
key areas by the Departments of Labor and Commerce, and (3) De-
208
termining, in cooperation with State and local governments, the appropriate
size and mix of Federal assistance programs, and recommending specific
programs and budget allocations for dealing with the problems of severely
disrupted areas.
FUNDING READJUSTMENT PROGRAMS
The activities to assist a smooth transition will rely mainly on existing
programs designed to aid communities faced with structural adjustments
or to help workers gain new skills. How much these programs must be expanded will depend upon many factors which cannot be estimated precisely, but the approximate initial size of the programs is shown in Table 4.
TABLE 4.—Estimated first year cost of readjustment programs
[Millions of dollars]
Estimated first year cost
Program
High
Low
120
EDA community development assistance
SBA loans
HUD homeowner emergency loans _
MDTA training
Employment service
Relocation assistance
Veterans assistance-
. ...
?88
20
Total cost
50
10
1
53
7
4
30
14C
?n
15
50
Note.—Abbreviations used in this table represent the following: EDA (Economic Development Administration), SBA
(Small Business Administration), HUD (Department of Housing and Urban Development), and MDTA (Manpower Development and Training Act).
Source: Bureau of the Budget.
Once hostilities cease or prospects for demobilization appear, supplemental
appropriations for readjustment purposes should be sought promptly. All
expenditures from special appropriations should be coordinated by the
Readjustment Operations Committee.
When demobilization plans are definitely known, more exact program
expenditures should be determined by the Readjustment Operations Committee. Initial appropriations should be at the low end of the estimated
range with the understanding that additional funds may be needed. These
program supplements should be reserved for uses directly related to the
post-Vietnam transition. In addition, funds should be requested to provide
returning servicemen with veterans benefits under existing programs and to
assist State unemployment insurance programs in cases of high localized
unemployment.
Even before demobilization, important permanent improvements should
be made in some existing institutions to make them more effective both
in the transition to peace and in the long run. The Unemployment Insurance program should be strengthened by increasing coverage, raising
benefits, lengthening the possible duration of payments, and improving the
209
financial base of the system. And minimum standards of vesting of private
pension plans should be established, so that as the economy shifts to a peacetime footing, workers can change jobs without losing their benefits.
ASSISTING DEFENSE-DEPENDENT AREAS
One major measure to be coordinated by the Readjustment Operations
Committee is Federal assistance for communities that will experience a
major decline in employment opportunities due to the closing or curtailment of a defense plant or military base. The possible scope of this task is
suggested by the growth in defense employment during the buildup for
Vietnam. From 1965 to 1967, 38 local areas experienced increases in defense
employment exceeding 5 percent of their total work force. A few of these
localities are moderately large metropolitan areas, but some are predominantly rural counties with no urban center exceeding 12,000 population;
these rural areas may be especially vulnerable to defense cutbacks during
demobilization.
The Federal Government can assist severely affected communities with
redevelopment potential to reorient their economies through programs of the
Economic Development Administration and the Small Business Administration. Initial-year funds required for these specific purposes might range
from $20 to $50 million for the Economic Development Administration and
from $5 to $10 million for the Small Business Administration.
These agencies would help defense-dependent communities modernize
public facilities, develop industrial sites, convert defense installations to
other uses, and otherwise make themselves attractive to new industry.
ASSISTING DISPLACED INDIVIDUALS
While most of the individuals who lose defense jobs or who are released
from military service will be readily employable, some will not possess the
required skills, while others will be geographically isolated from job opportunities. Federal programs should be undertaken to ease the impact of
demobilization upon the most seriously affected individuals.
Strengthening the Federal Employment Service
Demobilization will greatly enlarge demands on the resources of the
Federal-State Employment Service. Prior to demobilization, plans should
be made for expanding the staff of the Employment Service offices: to
ensure their capacity for handling veterans and laid-off defense workers,
to improve the flow of information about job opportunities outside the local
labor market, and to station staff temporarily at locations convenient to military personnel about to be discharged. The Employment Service may require
$7 to $20 million in the first year to provide these activities.
2IO
Expanding Manpower Training
Some individuals dislocated from defense employment will need retraining. The preliminary estimate is that $53 million will be needed to prepare
about 26,000 servicemen for civilian employment through Project Transition
and to train about 20,000 enrollees in other MDTA programs. Further
appropriations of up to $140 million may be required for the two programs.
Providing Relocation Assistance
A relocation assistance fund should be established to help low- and middleincome workers move out of defense-dependent communities with inadequate reemployment opportunities. The program should be administered
by the Department of Labor, which should develop general policy on relocation assistance—including eligibility criteria—in cooperation with the Readjustment Operations Committee. The program should provide full grant
assistance for workers taking low-income jobs, and a mix of loans and grants
for those obtaining higher paying jobs.
Relocation assistance should be available only to individuals directly
affected by cutbacks in specified defense-dependent communities. The number assisted could range between 10,000 and 30,000 families, requiring
expenditures between $4 and $15 million.
Funding Veterans Assistance
Current programs available to veterans are generally adequate to cover
the needs of returning servicemen; however, the accelerated separations associated with demobilization will require additional appropriations for these
programs—especially employment consultation services and the educational
assistance program. Adequate financing of veterans programs may cost
$30 to $50 million a year during demobilization.
Providing Homeowner Assistance
The Federal Government should undertake to prevent a widespread loss
of homes in areas suffering temporary unemployment during demobilization.
The Department of Housing and Urban Development should establish a
program to encourage private lenders to declare moratoria on mortgage
payments on homes owned and occupied by individuals dislocated by a defense cutback. When an extension of mortgage payments cannot be obtained,
the Department of Housing and Urban Development should be authorized
to lend the homeowner funds at a reasonable interest rate to cover mortgage
payments. Expenditures of about $2 million should be ample for this
program.
211
Appendix A
REPORT TO THE PRESIDENT ON THE ACTIVITIES OF THE
COUNCIL OF ECONOMIC ADVISERS DURING 1968
213
LETTER OF TRANSMITTAL
COUNCIL OF ECONOMIC ADVISERS,
Washington, D.C., December 31, 1968.
T H E PRESIDENT.
SIR : The Council of Economic Advisers submits this report on its activities during the calendar year 1968 in accordance with the requirements of
the Congress, as set forth in section 4 (d) of the Employment Act of 1946.
Respectfully,
Arthur M. Okun,
Chairman.
Merton J. Peck.
Warren L. Smith.
215
Report to the President on the Activities of the
Council of Economic Advisers During 1968
During the year 1968, the activities of the Council of Economic Advisers
were dominated by the urgent need to preserve the enormous benefits of
prosperity and to head off the threats of serious inflation and international
monetary instability.
It was clear, as the year began, that the delay in enacting your fiscal proposals was contributing to inflationary pressures and jeopardizing the foundations of prosperity. The Council devoted much of its energy during the first
half of the year toward the enactment of the Revenue and Expenditure Control Act, which you signed on June 28. The Council's efforts in the area of
fiscal policy continued to be carried out with the closest coordination and
cooperation of the Treasury Department and the Bureau of the Budget. The
uncertain fiscal situation created a major problem for monetary policy, and
the Council engaged in frequent consultations and exchanges of information
with the Board of Governors of the Federal Reserve System.
Much of the Council's work to meet the challenge of price stability
focused on the fundamental long-run aspect of inflationary tendencies in a
high employment economy. The newly established Cabinet Committee on
Price Stability and its staff studied inflationary tendencies in individual sectors of the economy and ways these could be modified by the structural improvement of freely operating markets. The Cabinet Committee also proved
to be an excellent institution for intensifying, coordinating, and broadening
the base of the Administration's efforts to improve price performance—both
by structural efforts and by enlisting cooperation for voluntary restraint in
price and wage decisions. Particularly in the second half of the year, after an
appropriate fiscal policy was implemented, the Council and the other agencies
of the Committee intensified these efforts, both publicly and privately.
The progress and the strains in the international financial system during
1968 placed a high premium on studies in this area. The Council conducted
analyses and evaluations of a variety of proposals which have been advanced
as ways LU strengthen the system.
Throughout the year, the Council continued to conduct studies and
evaluate programs and proposals on a wide range of economic and social
issues. The most important of these efforts were centered on the challenge
of reducing poverty and drawing disadvantaged groups into the mainstream
of economic life.
217
Another significant activity was the study of preparations for achieving a
smooth economic transition to peace after hostilities cease in Vietnam. Other
important efforts dealt with the analysis of domestic financial markets, industrial markets, housing, collective bargaining, agricultural policy, manpower training and development, and various social insurance and income
maintenance programs.
COUNCIL MEMBERSHIP
On February 15, 1968, Merton J. Peck from Yale University joined the
Council, replacing Gardner Ackley, who became Ambassador to Italy; and
Arthur M. Okun, who had served as a Member since November 16, 1964,
was designated to succeed to the Chairmanship previously held by Mr.
Ackley. On July 1, Warren L. Smith from the University of Michigan replaced James Duesenberry, who returned to his duties at Harvard University.
Following is a list of all past Council members and their dates of service:
Name
Position
Edwin G. Nourse
Leon H. Keyserling
John D. Clark....
Roy Blough
Robert C. Turner
Arthur F. Burns...
NeilH.Jacoby
Walter W. Stewart
Joseph S. Davis
Raymond J. Saulnier
Paul W. McCracken
Karl Brandt
Henry C. Wallich
James Tobin
Kermit Gordon
Walter W. Heller
Gardner Ackley
John P. Lewis
Otto Eckstein
James S. Duesenberry
_
Chairman
Vice Chairman
Acting Chairman
Chairman
Member
Vice Chairman
_ Member
Member
Chairman.
Member
Member
Member
Member
_
Chairman.
Member...
Member
Member
Member
Member...
Chairman...
Member
Chairman
Member
Member
_
Member
Oath of office date
Augusts 1 9 4 6 . - .
August 9,1946
November 2,1949
May 10,1950
Augusts 1946
May 10,1950
June 29,1950
September 8,1952.
March 19,1953
September 15,1953
December 2,1953
May 2,1955
April 4,1955.
December 3,1956
December 3,1956
November 1,1958.
May 7, 1959
January 29,1961
_ January 29,1961
January 29,1961
August 3,1962
November 16,1964
May 17,1963
September 2,1964
February 2,1966
Separation date
November 1,1949.
January 20,1953.
...
February 11,1953.
August 20,1952.
January 20,1953.
December 1,1956.
February 9,1955.
April 29,1955.
October 31,1958.
January 20,1961.
January 31,1959.
January 20,1961.
January 20,1961.
July 31,1962.
December 27,1962.
November 15,1964.
February 15,1968.
August 31,1964.
February 1,1966.
June 30,1968.
COUNCIL STAFF
At the end of 1968, members of the Council's professional staff were
Susan R. Ackerman, F. Gerard Adams, Barry P. Bosworth, Frederick W.
Deming, Marten S. Estey, Catherine H. Furlong, Frances M. James,
Lawrence B. Krause, James W. Kuhn, David W. Lusher, Thomas G. Moore,
Saul Nelson, Roger G. Noll, David J. Ott, Courtenay M. Slater, Luther T.
Wallace, Charles B. Warden, Jr., and G. Paul Wonnacott.
Each year a number of staff members who have joined the Council on a
temporary basis return to their posts in private life or in Government. Those
leaving the Council in 1968 were John F. Burton, Jack W. Carlson,
Christopher K. Clague, Thomas F. Dernburg, Peter P. Dorner, Raymond
W. Goldsmith, Hendrik S. Houthakker, Saul H. Hymans, Carey P. Modlin,
Joseph D. Mooney, and Frank W. Schiff.
218
Continuing its practice of asking leading members of the economics profession to assist in the analysis of economic problems, the Council in 1968
called on the following consultants: Henry J. Aaron, James T. Bonnen,
William H. Branson, William Capron, Richard N. Cooper, John T. Dunlop,
Otto Eckstein, Stephen M. Goldfeld, Kermit Gordon, Walter W. Heller,
Allen H. Lerman, Paul MacAvoy, Edwin S. Mills, Joseph Pechman, George
L. Perry, Paul Samuelson, Charles A. Taff, James Tobin, and Lloyd Ulman.
The Council continued its graduate student intern program, which was
started in 1961. Those working with the Council for various periods in 1968
were Robert E. Anderson, Lucy A. Cardwell, Albert J. Eckstein, Morris
Goldstein, Stephen P. Magee, Richard W. Nelson, David M. Nienhaus,
David F. J. Piachaud, Charles G. Plourde, Craig E. Swan, C. Daniel Vencill,
and William D. Watson, Jr. Research assistants included Rosanna M. Coffey, Katherine Champe, Charles E. Kurlansky, Rosemary D. Marcuss,
Roselee N. Roberts, Joanne C. Turner, and Carolyn T. Welch.
As in the past, the Council received loyal and energetic assistance from
its nonprofessional staff. Members of this staff at the end of 1968 were Teresa
D. Bradburn, Judson A. Byrd, II, Gladys R. Durkin, Mary C. Fibich, James
W. Gatling, Elizabeth F. Gray, Laura B. Hoffman, Christine L. Johnson,
Roberta R. Kirk, Helen H. Knox, Bessie M. Lafakis, Betty Lu Lowry,
V. Madge McMahon, Eleanor A. McStay, A. Keith Miles, Joyce A. Pilkerton, Dorothy L. Reid, Earnestine Reid, Lucille F. Saverino, Bettye T. Siegel,
Nancy F. Skidmore, Barbara E. Skolnik, Margaret L. Snyder, and Elizabeth A. Zea.
In preparing its Annual Report, the Council relied upon the editorial
skills of Robin Elliott.
COUNCIL ACTIVITIES
The Council of Economic Advisers was established as an agency of the
Federal Government nearly 22 years ago by the Employment Act of 1946.
Under the Act the Council is charged with the responsibility of analyzing
and interpreting economic developments and of recommending economic
policies that will promote the goals of "maximum employment, production,
and purchasing power."
The Council's chief responsibility is to keep the President fully informed
of economic developments and emerging problems which may affect the
Nation's economy. To meet this responsibility, the Council continuously reviews economic conditions, undertakes special studies of particular problem
areas, and makes recommendations concerning Government programs and
policies. The Council confers regularly with all major Government agencies
having responsibilities in the economic field.
The Secretary of the Treasury, the Director of the Bureau of the Budget,
and the Chairman of the Council and their respective staffs (the "Troika")
219
provide the President with a continuous joint assessment of the economic
and budgetary outlook for the current and subsequent fiscal years. The heads
of the "Troika" agencies and their associates, together with the Chairman
of the Board of Governors of the Federal Reserve System, meet as the "Quadriad" with the President to discuss domestic and international monetary
problems.
In addition to its regular and informal consultations with other Government agencies, the Council and its staff in 1968 participated with other
agencies in a large variety of more formal committees, task forces, and studies.
The Council and its staff represent the United States in a number of important international conferences. The Council Chairman heads the U.S.
delegation to the meetings of the Economic Policy Committee of the Organization for Economic Cooperation and Development (OECD), and members
of the Council and its staff this year participated in many other international
meetings under the auspices of the OECD. The Chairman also met with the
Chairman and staff of the Economic Council of Canada in Ottawa, and
the Council was involved in activities of the United Nations Economic
Commission for Europe.
An important responsibility of the Council is to explain and clarify the
Administration's economic policies, both within the Government and to
the public at large. This is done through numerous speeches, articles, press
briefings, statements, Congressional testimony, its Annual Report, and by
assisting the President in the preparation of his Economic Report. The
Council meets frequently and informally with many individuals and groups,
both from the United States and abroad, including businessmen, bankers,
labor leaders, government officials, university scholars and students, members of the press corps, and interested private citizens, and more formally
with a number of advisory groups, including the President's Advisory Committee on Labor-Management Policy and the Business Council's Liaison
Committee with the Council of Economic Advisers.
The Council prepares two documents for publication. One is the
Economic Report of the President, together with the Annual Report of the
Council of Economic Advisers. Over 66,000 copies of the 1968 Report were
distributed to Members of the Congress, Government officials, the press, and
depository libraries, or sold to the public by the Superintendent of Documents. The second is the monthly Economic Indicators. This important compilation of current economic statistics has been prepared since 1948 at the
Council under the direction of Miss Frances M. James, and is published by
the Joint Economic Committee of the Congress. More than 12,000 copies
are furnished to Members of the Congress and depository libraries or sold
to the public every month.
220
Appendix B
STATISTICAL TABLES RELATING TO INCOME,
EMPLOYMENT, AND PRODUCTION
221
323-166 0—69
15
CONTENTS
National income or expenditure:
B-l. Gross national product or expenditure, 1929-68
B-2. Gross national product or expenditure, in 1958 prices, 1929-68
B-3. Implicit price deflators for gross national product, 1929-68
B-4. Gross national product by major type of product, 1929-68
B-5. Gross national product by major type of product, in 1958 prices,
1929-68
B-6. Gross national product: Receipts and expenditures by major economic
groups, 1929-68
B-7. Gross national product by sector, 1929-68
B-8. Gross national product by sector, in 1958 prices, 1929-68
B-9. Gross national product by industry, in 1958 prices, 1947-67
B-10. Personal consumption expenditures, 1929-68
B-l 1. Gross private domestic investment, 1929-68
B-12. National income by type of income, 1929-68
B-l 3. Relation of gross national product and national income, 1929-68. . . .
B-14. Relation of national income and personal income, 1929-68
B-l 5. Disposition of personal income, 1929-68
B-l6. Total and per capita disposable personal income and personal consumption expenditures, in current and 1958 prices, 1929-68
B-l 7. Sources of personal income, 1929-68
B-18. Sources and uses of gross saving, 1929-68
B-19. Saving by individuals, 1946-68
B-20. Number and money income (in 1967 prices) of families and unrelated
individuals, by color of head, 1947-67
Population, employment, wages, and productivity:
B-21. Population by age groups: Estimates, 1929-68, and projections,
1970-85
B-22. Noninstitutional population and the labor force, 1929-68
B-23. Civilian employment and unemployment, by sex and age, 1947-68. .
B-24. Selected unemployment rates, 1948-68
B-25. Unemployment by duration, 1947-68
B-26. Unemployment insurance programs, selected data, 1940-68
B-27. Wage and salary workers in nonagricultural establishments, 1929-68.
B-28. Average weekly hours of work in selected nonagricultural industries,
1929-68
B-29. Average gross hourly earnings in selected industries, 1929-68
B-30. Average gross weekly earnings in selected nonagricultural industries,
1929-68
B—31. Average weekly hours and hourly earnings, gross and excluding overtime, in manufacturing industries, 1939-68
B-32. Average weekly earnings, gross and spendable, total private nonagricultural industries, in current and 1957-59 prices, 1947-68. . .
B-33. Average weekly earnings, gross and spendable, in manufacturing
industries, in current and 1957-59 prices, 1939-68
B-34. Indexes of output per man-hour and related data, private economy,
1947-63
223
227
228
230
232
233
234
236
237
238
239
240
241
242
243
244
245
246
248
249
250
251
252
254
255
256
257
258
260
261
262
263
264
265
266
Production and business activity:
B-35. Industrial production indexes, major industry divisions, 1929-68. . . .
B—36. Industrial production indexes, market groupings, 1947—68
B-37. Industrial production indexes, selected manufactures, 1947-68
B-38. Manufacturing output, capacity, and utilization rate, 1948-68
B-39. Business expenditures for new plant and equipment, 1939 and 194569
B-40. New construction activity, 1929-68
B-41. New housing starts and applications for financing, 1929-68
B-42. Sales and inventories in manufacturing and trade, 1947-68
B-43. Manufacturers' shipments and inventories, 1947-68
B-44. Manufacturers' new and unfilled orders, 1947-68
Prices:
B-45.
B-46.
B-47.
B-48.
B-49.
Consumer
Consumer
Consumer
Wholesale
Wholesale
price
price
price
price
price
indexes,
indexes,
indexes,
indexes,
indexes,
by major groups, 1929-68
by special groups, 1935-68
selected commodities and services, 1935-68.
by major commodity groups, 1929-68
by stage of processing, 1947-68
Money supply, credit, and finance:
B-50. Money supply, 1947-68
B-51. Bank loans and investments, 1929-68
B-52. Selected liquid assets held by the public, 1946-68
B-53. Federal Reserve Bank credit and member bank reserves, 1929-68. . .
B-54. Bond yields and interest rates, 1929-68
B-55. Short- and intermediate-term consumer credit outstanding, 1929-68.
B-56. Instalment credit extended and repaid, 1946-68
B-57. Mortgage debt outstanding, by type of property and of financing,
1939-68
B-58. Mortgage debt outstanding, by lender, 1939-68
B-59. Net public and private debt, 1929-68
Government finance:
B-60. Federal budget receipts and outlays, 1929-70
B-61. Federal budget receipts, outlays, financing, and debt, 1959-70
B-62. Relation of the Federal Budget to the Federal sector of the national
income and product accounts, 1967-70
B-63. Receipts and expenditures of the Federal Government sector of the national income and product accounts, 1946-70
B-64. Public debt securities, by kind of obligation, 1929-68
B-65. Estimated ownership of public debt securities, 1939-68
B-66. Average length and maturity distribution of marketable interest-bearing public debt, 1946-68
B-67. Receipts and expenditures of the government sector of the national
income and product accounts, 1929-68
B-68. Receipts and expenditures of the State and local government sector
of the national income and product accounts, 1946-68- • ••
B-69. State and local government revenues and expenditures, selected fiscal
years, 1927-67
224
Page
267
268
269
270
271
272
274
276
277
278
279
280
281
282
284
286
287
288
289
290
292
293
294
295
296
297
298
300
301
302
303
304
305
306
307
Corporate profits and
finance:
B-70. Profits before and after taxes, all private corporations, 1929-68
B-71. Sales, profits, and stockholders' equity, all manufacturing corporations (except newspapers), 1947-68
B-72. Relation of profits after taxes to stockholders' equity and to sales, all
manufacturing corporations (except newspapers), by industry group,
1947-68
B-73. Sources and uses of funds, nonfarm nonfinancial corporate business,
1957-68
B-74. Current assets and liabilities of United States corporations, 1939-68.
B-75. State and municipal and corporate securities offered, 1934-68
B-76. Common stock prices, earnings, and yields, and stock market credit,
1939-68
B-77. Business formation and business failures, 1929-68
Agriculture:
B-78. Income from agriculture, 1929-68
B-79. Farm production indexes, 1929-68
B-80. Farm population, employment, and productivity, 1929-68
B-81. Indexes of prices received and prices paid by farmers, and parity ratio,
1929-68
B-82. Selected measures of farm resources and inputs, 1929-68
B-83. Comparative balance sheet of agriculture, 1929-69
International statistics:
B-84. United States balance of payments, 1946-68
B-85. United States merchandise exports and imports, by commodity groups,
1958-68
B-86. United States merchandise exports and imports, by area, 1962-68. .
B-87. United States overseas loans and grants, by type and area, fiscal years
1962-68
B-88. International reserves, 1949, 1953, and 1963-68.
B-89. United States reserve assets: Gold stock, holdings of convertible foreign
currencies, and reserve position in the International Monetary
Fund, 1946-68
B-90. Price changes in international trade, 1960-68
B-91. Consumer price indexes in the United States and other major industrial countries, 1957-68
General Notes
Detail in these tables will not necessarily add to totals because of rounding.
Unless otherwise noted, all dollar figures are in current prices.
Symbols used:
" Preliminary.
__ Not available (also, not applicable).
* Amount insignificant in terms of the particular unit (e.g., less than
$50 million where unit is billions of dollars).
225
Page
308
309
310
312
313
314
315
316
317
318
319
320
322
323
324
326
327
328
329
330
331
332
NATIONAL INCOME OR EXPENDITURE
TABLE B-l.—Gross national product or expenditure, 1929-68
[Billions of dollars]
Year or quarter
Total
gross
national
product
Personal
sumption
expenditures^
Government purchases of goods and services
Gross
private
domestic
investment2
Net
exports
of goods
and
services 3
Federal*
Total
Total
National
defense5
Other
State
and
local
1929..
103.1
77.2
16.2
1.1
8.5
1.3
1.3
7.2
1930..
1931..
1932..
19331934..
1935..
1936..
1937..
1938..
1939..
90.4
75,8
58.0
55.6
65.1
72.2
82.5
90.4
84.7
90.5
69.9
60.5
48.6
45.8
51.3
55.7
61.9
66.5
63.9
66.8
10.3
5.6
1.0
1.4
3.3
6.4
8.5
11.8
6.5
9.3
1.0
9.2
9.2
8.1
8.0
9.8
10.0
12.0
11.9
13.0
13.3
1.4
1.5
1.5
2.0
3.0
2.9
4.9
4.7
5.4
5.1
1.4
1.5
1.5
2.0
3.0
2.9
4.9
4.7
5.4
1.2
3.9
7.8
7.7
6.6
6.0
6.8
7.1
7.0
7.2
7.6
8.2
1940..
1941..
1942..
19431944..
19451946..
1947..
1948..
1949-
99.7
124.5
157.9
191.6
210.1
211.9
208.5
231.3
257.6
256.5
70.8
80.6
88.5
99.3
108.3
119.7
143.4
160.7
173.6
176.8
13.1
17.9
9.8
5.7
7.1
10.6
30.6
34.0
46.0
35.7
-2.0
-1.8
-.6
7.5
11.5
6.4
6.1
14.0
24.8
59.6
88.6
96.5
82.3
27.0
25.1
31.6
37.8
6.0
16.9
51.9
81.1
89.0
74.2
17.2
12.5
16.5
20.1
2.2
13.8
49.4
79.7
87.4
73.5
14.7
9.1
10.7
13.3
3.8
3.1
2.5
1.4
1.6
.7
2.5
3.5
5.8
6.8
8.0
7.9
7.7
7.4
7.5
8.1
9.8
12.6
15.0
17.7
1950..
1951..
1952..
1953..
1954..
1955..
1956..
1957..
1958..
1959..
284.8
328.4
345.5
364.6
364.8
398.0
419.2
441.1
447.3
483.7
191.0
206.3
216.7
230.0
236.5
254.4
266.7
281.4
290.1
311.2
54.1
59.3
51.9
52.6
51.7
67.4
70.0
67.8
60.9
75.3
1.8
3.7
2.2
.4
1.8
2.0
4.0
5.7
2.2
.1
37.9
59.1
74.7
81.6
74.8
74.2
78.6
86.1
94.2
97.0
18.4
37.7
51.8
57.0
47.4
44.1
45.6
49.5
53.6
53.7
14.1
33.6
45.9
48.7
41.2
38.6
40.3
44.2
45.9
46.0
4.3
4.1
5.9
8.4
6.2
5.5
5.3
5.3
7.7
7.6
19.5
21.5
22.9
24.6
27.4
30.1
33.0
36.6
40.6
43.3
1960..
19611962..
19631964..
1965..
1966..
1967..
1968 p.
503.7
520.1
560.3
590.5
632.4
684.9
747.6
789.7
860.7
325.2
335.2
355.1
375.0
401.2
432.8
465.5
492.2
533.7
74.8
71.7
83.0
87.1
94.0
108.1
120.8
114.3
127.5
4.0
5.6
5.1
5.9
8.5
6.9
5.1
4.8
2.4
99.6
107.6
117.1
122.5
128.7
137.0
156.2
178.4
197.1
53.5
57.4
63.4
64.2
65.2
66.9
77.4
90.6
100.0
44.9
47.8
51.6
50.8
50.0
50.1
60.6
72.4
78.9
8.6
9.6
11.8
13.5
15.2
16.8
16.8
18.2
21.1
46.1
50.2
53.7
58.2
63.5
70.1
78.8
87.8
97.1
]4
.4
.6
!l
.3
1.3
1.1
1.7
1.3
Seasonally adjusted annual rates
1966: L .
IIIII.
IV.
728.4
740.4
753.3
768.2
457.8
461.1
469.3
473.7
116.8
121.0
119.9
125.7
6.0
5.2
4.5
4.5
147.8
153.1
159.5
164.3
72.5
75.6
79.9
81.5
55.3
58.6
63.0
65.4
17.2
17.0
16.9
16.1
75.3
77.4
79.7
82.7
1967: I.
772.2
780.2
795.3
811.0
480.9
490.3
495.5
502.2
113.0
107.6
114.7
121.8
5.2
5.1
5.4
3.4
173.1
177.3
179.6
183.5
87.4
90.0
91.3
93.5
70.0
72.1
72.9
74.6
17.4
17.9
18.4
19.0
85.8
87.2
88.4
90.0
831.2
852.9
871.0
887.8
519.4
527.9
541.1
546.3
119.7
127.3
127.1
136.1
1.5
2.0
3.3
3.0
190.5
195.7
199.6
202.5
97.1
100.0
101.2
101.6
76.8
79.0
79.6
80.0
20.3
21.0
21.5
21.6
93.4
95.6
98.4
100.8
III.
IV..
1968: I....
II...
III...
IV P..
i See Table B-10 for detailed components.
2See Table B-ll for detailed components.
3 See Table B-6 for exports and imports separately.
* Net of Government sales.
5
This category corresponds closely to the national defense classification in the "Budget of the United States Government for the Fiscal Year ending June 30,1970."
Source: Department of Commerce, Office of Business Economics.
227
TABLE B-2.—Gross national product or expenditure, in 1958 prices, 1929-68
[Billions of dollars, 1958 prices]
Persona! consumption
expenditures
Year or
quarter
Total
gross
national
product
Gross private domestic investment
Fixed investment
Total
Durable
goods
Nondurable
goods
Nonresidential
Serv-
Total
Total
Structures
Producers'
durable
equipment
Total
Residential
structures
Change
in businessinventories
1929..
203.6
139.6
16.3
69.3
54.0
40.4
36.9
26.5
13.9
12.6
10.4
3.5
1930..
1931..
1932..
1933..
1934..
1935..
1936..
1937..
1938..
1939..
183.5
169.3
144.2
141.5
154.3
169.5
193.0
203.2
192.9
209.4
130.4
126.1
114.8
112.8
118.1
125.5
138.4
143.1
140.2
148.2
12.9
11.2
8.4
8.3
9.4
11.7
14.5
15.1
12.2
14.5
65.9
65.6
60.4
58.6
62.5
65.9
73.4
76.0
77.1
81.2
51.5
49.4
45.9
46.0
46.1
47.9
50.5
52.0
50.9
52.5
27.4
16.8
4.7
5.3
9.4
18.0
24.0
29.9
17.0
24.7
28.0
19.2
10.9
9.7
12. i
15.6
20.9
24.5
19.4
23.5
21.7
14.1
8.2
7.6
9.2
11.5
15.8
18.8
13.7
15.3
11.8
7.5
4.4
3.3
3.6
4.0
5.4
7.1
5.6
5.9
9.9
6.6
3.8
4.3
5.6
7.5
10.3
11.8
8.1
9.4
6.3
5.1
2.7
2.1
2.9
4.0
5.1
5.6
5.7
8.2
-.6
-2.4
-6.2
-4.3
-2.7
2.4
3.1
5.5
-2.4
1.2
1940..
1941..
1942..
1943..
1944..
1945..
1946..
1947..
1948..
1949..
227.2
263.7
297.8
337.1
361.3
355.2
312.6
309.9
323.7
324.1
155.7
165.4
161.4
165.8
171.4
183.0
203.5
206.3
210.8
216.5
16.7
19.1
11.7
10.2
9.4
10.6
20.5
24.7
26.3
28.4
84.6
89.9
91.3
93.7
97.3
104.7
110.8
108.3
108.7
110.5
54.4
56.3
58.5
61.8
64.7
67.7
72.1
73.4
75.8
77.6
33.0
41.6
21.4
12.7
14.0
19.6
52.3
51.5
60.4
48.0
28.1
32.0
17.3
12.9
15.9
22.6
42.3
51.7
55.9
51.9
18.9
22.2
12.5
10.0
13.4
19.8
30.2
36.2
38.0
34.5
6.8
8.1
4.6
2.9
3.8
5.7
12.5
11.6
12.3
11.9
12.1
14.2
7.9
7.2
9.6
14.1
17.7
24.6
25.7
22.6
9.2
9.8
4.9
2.9
2.5
2.8
12.1
15.4
17.9
17.4
4.9
9.6
4.0
-.2
-1.9
-2.9
10.0
-.2
4.6
-3.9
1950..
1951..
1952..
1953..
1954..
1955..
1956..
1957..
1958..
1959.
355.3
383.4
395.1
412.8
407.0
438.0
446.1
452.5
447.3
475.9
230.5
232.8
239.4
250.8
255.7
274.2
281.4
288.2
290.1
307.3
34.7
31.5
30.8
35.3
35.4
43.2
41.0
41.5
37.9
43.7
114.0
116.5
120.8
124.4
125.5
131.7
136.2
138.7
140.2
146.8
81.8
84.8
87.8
91.1
94.8
99.3
104.1
108.0
112.0
116.8
69.3
70.0
60.5
61.2
59.4
75.4
74.3
68.8
60.9
73.6
61.0
59.0
57.2
60.2
61.4
69.0
69.5
67.6
62.4
68.8
37.5
39.6
38.3
40.7
39.6
43.9
47.3
47.4
41.6
44.1
12.7
14.1
13.7
14.9
15.2
16.2
18.5
18.2
16.6
16.2
24.8
25.5
24.6
25.8
24.5
27.7
28.8
29.1
25.0
27.9
23.5
19.5
18.9
19.6
21.7
25.1
22.2
20.2
20.8
24.7
8.3
10.9
3.3
.9
-2.0
6.4
A. 8
1.2
-1.5
4.8
1960
1961
1962
1963
1964
1965.
1966
1967
1968 v
487.7
497.2
529.8
551.0
581.1
617.8
657.1
673.1
706.9
316.1
322.5
338.4
353.3
373.7
397.7
417.8
430.5
450.7
44.9
43.9
49.2
53.7
59.0
66.6
71.3
72.4
80.0
149.6
153.0
158.2
162.2
170.3
178.6
186.9
191.1
197.0
121.6 72.4
125.6 69.0
131.1 79.4
137.4 82.5
144.4 87.8
152.5 99.2
159.5 108.8
167.0 99.5
173.8 106.8
68.9
67.0
73.4
76.7
81.9
90.1
94.9
93.6
99.8
47.1
45.5
49.7
51.9
57.8
66.3
73.8
73.7
76.7
17.4
17.4
17.9
17.9
19.1
22.3
23.9
22.6
22.5
29.6
28.1
31.7
34.0
38.7
44.0
49.9
51.1
54.3
21.9
21.6
23.8
24.8
24.2
23.8
21.1
19.9
23.1
3.5
2.0
6.0
5.8
5.8
9.0
13.9
5.9
6.9
Seasonally adjusted annual rates
IV...
648.6
653.3
659.5
667.1
415.7
414.8
420.0
420.6
72.9
69.2
71.8
71.4
185.5
186.9
187.8
187.5
157.3
158.7
160.4
161.7
106.1
109.5
107.4
112.3
95.8
94.7
95.5
93.7
72.2
72.7
74.8
75.4
24.4
23.8
24.1
23.4
47.8
48.9
50.7
52.1
23.6
22.0
20.7
18.2
10.3
14.7
12.0
18.6
1967: I . . . .
II
III...
IV...
665.7
669.2
675.6
681.8
424.8
431.2
431.8
434.1
70.1
73.7
72.6
73.0
190.3
191.6
191.1
191.6
164.4 99.8
165.9 94.2
168.1 99.3
169.5 104.7
91.8
92.0
94.0
96.7
74.2
73.3
73.2
74.0
23.8
22.1
22.2
22.1
50.3
51.1
51.0
52.0
17.6
18.7
20.8
22.7
8.0
2.3
5.2
8.0
1968: I . . . .
II...
III..
IV p.
692.7
703.4
712.3
719.1
444.9
447.5
455.7
454.8
77.3
78.9
82.5
81.4
196.5
196.1
198.5
196.8
171.0
172.6
174.8
176.6
101.5 99.5
107.3 97.4
105.8 99.0
112.5 103.4
76.5
74.5
76.6
79.4
23.4
22.1
21.9
22.5
53.0
52.4
54.7
57.0
23.0
22.9
22.4
24.0
2.0
9.9
6.8
9.1
1966: I . . . .
See footnotes at end of table.
228
TABLE B-2.—Gross national product or expenditure, in 1958 prices, 1929-68—Continued
[Billions of dollars, 1958 prices]
Net exports of goods and services
Government purchases of goods and
services
Year or quarter
Net
exports
Exports
Imports
Total
Federal
State and
local
1929
1.5
11.8
10.3
22.0
3.5
18.5
1930
1931
1932
1933
1934
1935
1936
1937
1938
1939
1.4
.9
.6
*
.3
-1.0
-1.2
-.7
1.9
1.3
10.4
8.9
7.1
7.1
7.3
7.7
8.2
9.8
9.9
10.0
9.0
7.9
6.6
7.1
7.1
8.7
9.3
10.5
8.0
8.7
24.3
25.4
24.2
23.3
26.6
27.0
31.8
30.8
33.9
35.2
4.0
4.3
4.6
6.0
8.0
7.9
12.2
11.5
13.3
12.5
20.2
21.1
19.6
17.3
18.6
19.2
19 6
19 4
20.6
22.7
2.1
.4
—2.1
-5.9
-5.8
-3.8
8.4
12.3
6.1
6.4
11.0
11.2
7.8
6.8
7.6
10.2
19.6
22.6
18.1
18.1
8.9
10.8
9.9
12.6
13.4
13.9
11.2
10.3
12.0
11.7
36.4
56.3
117.1
164.4
181.7
156.4
48.4
39.9
46.3
53.3
15.0
36.2
98.9
147.8
165.4
139.7
30.1
19.1
23.7
27.6
21.4
20.1
18 3
16.6
16.3
16.7
18 4
20.8
22.7
25.7
1950.
1951
1952
1953
1954
1955
1956. .
1957.
1958
1959
2.7
5.3
3.0
1 l
3.0
3.2
5.0
6.2
2.2
16.3
19.3
18.2
17.8
18.8
20.9
24.2
26.2
23.1
23.8
13.6
14.1
15.2
16.7
15.8
17.7
19.1
19.9
20.9
23.5
52.8
75.4
92.1
99.8
88.9
85.2
85.3
89.3
94.2
94.7
25.3
47.4
63.8
70.0
56.8
50.7
49.7
51.7
53.6
52.5
27.5
27.9
28.4
29.7
32.1
34.4
35.6
37.6
40.6
42.2
1960
1961
1962
1963
1964
1965
1966
1967
1968 v
4.3
51
4.5
5.6
8.3
6.2
4.0
2.4
.2
27.3
28.0
30.0
32.1
36.5
37.4
40.1
41.8
45.9
23.0
22.9
25.5
26.6
28.2
31.2
36.1
39.3
45.7
94.9
100.5
107.5
109.6
111.2
114.7
126.5
140.7
149.2
51.4
54.6
60.0
59.5
58.1
57.9
65.2
74.8
79.3
43.5
45.9
47.5
50.1
53.2
56.8
61.3
65.9
69.9
-
.
1940
1941
1942
1943
1944
1945
1946
1947
1948
1949
.
. . . .
Seasonally adjusted annual rates
5.3
4.3
3.6
2.9
39.9
39.7
40.4
40.4
34.5
35.4
36.8
37.5
121.5
124.7
128.5
131.3
61.8
64.0
66.9
67.9
59.6
60.7
61.6
63.4
1967- 1
II
Ill
IV
3.0
2.8
3.1
1.0
41.4
41.7
42.1
41.9
38.5
38.9
39.1
40.9
138.1
141.0
141.4
142.0
72.7
75.1
75.6
75.6
65.4
66.0
65.8
66.4
1968: 1
II
Ill
IV v
-.1
-.6
44.0
44.7
47.6
47.1
44.1
45.4
46.9
46.5
146.5
149.2
150.1
151.0
78.1
80.1
79.5
79.4
68.4
69.1
70.6
71.6
1966- 1
II
HI
IV
.
.7
1
Net of Government sales.
Source: Department of Commerce, Office of Business Economics.
229
TABLE B-3.—Implicit price deflators for gross national product, 1929-68
[Index numbers, 1958=100]
Gross private domestic investmentl
Personal consumptior
expenditures
Fixed investment
Total
gross
national
Year or quarter
Nonresident
nrnri
ucti
Total
Durable
goods
Nondurable
goods
Services
Total
Total
Structures
ResiProdential
ducers' strucdurable tures
equipment
1929
50.6
55.3
56.4
54.5
56.1
39.4
39.9
35.7
44.6
38 1
1930
1931
1932
1933
1934..
1935
1936
1937
1938
1939
49.3
44.8
40.2
39.3
42.2
42.6
42.7
44.5
43.9
43.2
53.6
47.9
42.3
40.6
43.5
44.4
44.7
46.5
45.6
45.1
55.3
49.1
43.2
41.9
44.7
43.7
43.6
45.8
46.7
46.0
51.6
44.1
37.7
38.0
42.7
44.5
44.8
46.4
44.0
43.2
55.7
52.7
48.3
43.6
44.3
44.4
45.0
46.8
47.7
47.7
37.9
35.2
31.6
30.6
33.7
34.3
34.6
37.8
38.2
37.7
38.1
35.8
32.9
31.6
34.9
35.9
35.6
38.8
39.3
38.7
34.0
31.1
27.6
27.9
28.9
30.6
30.2
34.4
33.9
33.1
43.0
41 1
39.1
34.5
38.8
38.7
38.5
41.4
43.0
42.2
37.1
33 6
27 3
27.1
30.1
29.8
31.3
34.3
35.5
35.7
1940
1941
1942
1943
1944
1945
1946
1947
1948
1949
43.9
47.2
53.0
56.8
58.2
59.7
66.7
74.6
79.6
79.1
45.5
48.7
54.8
59.9
63.2
65.4
70.5
77.9
82.3
81.7
46.5
50.4
59.3
64.2
71.5
75.9
76.8
82.7
86.3
86.8
43.8
47.7
55.6
62.5
66.2
68.7
74.3
83.6
88.5
85.6
47.9
49.8
52.7
55.3
57.5
58.7
62.7
67.9
72.1
74.3
39.0
42.0
46.5
49.3
51.1
51.5
58.5
66.7
73.9
74.7
40.0
42.7
47.8
49.9
51.0
51.0
56.3
64.5
70.7
72.8
33.9
36.4
41 3
46 8
48.6
49.2
54.4
64.4
71.5
71.2
43.4
46.3
51 5
51.1
51.9
51.7
57.5
64.6
70.3
73.6
36.9
40.3
43 3
47 0
51.6
54.9
59.7
71.7
80.8
78.5
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
80.2
85.6
87.5
88.3
89.6
90.9
94.0
97.5
100.0
101.6
82.9
88 6
90.5
91.7
92.5
92 8
94.8
97 7
100.0
101.3
87.8
94 2
95.4
94.3
92.9
91 9
94.9
98.4
100.0
101.4
86.0
93 3
94.3
93.9
94.2
93.6
94.9
97.7
100.0
99.9
76.3
80.0
83.6
87.7
90.0
92.0
94.6
97.3
100.0
103.0
77.5
83.1
85.3
86.6
86.8
89.0
94.0
98.5
100.0
102.6
74.4
80.4
82.6
84.0
84.8
86.7
92.4
97 9
100.0
102.2
72.9
79 3
83.2
84.9
86.0
88.1
93.4
98 6
1Q0.0
102.7
75.2
80 9
82.2
83.5
84.0
85.9
91.8
97.5
100.0
102.0
82.5
88 6
90.8
91.9
90.4
92.9
97.4
99.8
100.0
103.1
1960
1961
1962
1963
1964
1965
1966
1967
1968 *
»
103.3
104.6
105.8
107.2
108.8
110.9
113.8
117.3
121.8
102.9
103.9
104.9
106.1
107.4
108.8
111.4
114.3
118.4
100.9
100.6
100.8
100.4
100.4
99.6
98.8
100.4
103.1
101.2
101.9
102.8
104.0
104.9
106.9
110.6
112.9
116.9
105.8
107.6
109.0
110.9
113.1
115.1
118.1
122.1
127.2
103.4
103.9
104.9
106.0
107.6
109.3
111.8
115.6
120.2
102.9
103.4
104.1
104.5
105.7
107.5
110.2
113.5
117.2
104.0
105.6
107.1
108.9
111.1
114.7
119.0
123.6
129.7
102.2
102.1
102.3
102.3
103.0
103.9
106.0
109.1
112.0
104.5
105.0
106.7
108.9
112.3
114.2
117.4
123.1
129.9
1966: 1
112.3
113.3
114.2
115.2
110.1
111.2
111.7
112.6
98.1
98.5
98.8
99.6
109.3
110.4
111.0
111.7
116.6
117.6
118.4
119.5
110.6
111.4
112.1
113.0
108.9
109.8
110.4
111.6
117.1
118.4
119.8
120.7
104.7
105.6
106.0
107.5
115.9
117.0
118.2
119.0
1967- 1
116.0
116.6
117.7
118.9
113.2
113.7
114.7
115.7
99.6
99.6
100:7
101.7
111.9
112.4
113.3
114.0
120.5
121.5
122.5
123.7
113.9
114.6
116.2
117.4
112.5
112.9
113.8
114.9
121.7
122.7
124.6
125.5
108.2
108.6
109.1
110.3
119.7
121.4
124.8
125.6
120.0
121.2
122.3
123.5
116.8
118.0
118.7
120.1
102.2
102.7
103.1
104.2
115.2
116.4
117.2
118.6
125.1
126.7
127.8
129.1
118.3
119.6
120.8
121.9
115.8
116.7
117.6
118.6
126.3
128.8
131.3
132.6
111.2
111.7
112.1
113.1
126.3
128.9
131.7
132.7
.
—
II
III
IV
II
III
IV
1968: 1
||
III
. .
IV v
See footnotes at end of table.
230
TABLE B-3.—Implicit price deflators for gross national product, 1929-68—Continued
[Index numbers, 1958=100]
Exports and imports 1
of
goods and services
Government purchases of goods
and services
Gross national product by
sector
Year or quarter
Exports
Imports
Total
Federal
State and
local
Private 2
General
government
1929
59.5
57.3
38.6
36.0
39.1
51.7
34.1
1930
1931
1932
1933
1934
1935
1936
1937
1938
1939
52.3
41.0
34.7
33.7
40.6
42.3
43.4
46.5
43 8
44.1
49.0
39.3
31.5
28.8
33.6
36.0
36.7
40.7
37.9
38.6
37.9
36.3
33.4
34.5
36.8
37.0
37.6
38.4
38 3
37.9
34.1
34.5
31.9
33.1
37.4
37.0
40.5
40.7
40 5
40.8
38.7
36.6
33.8
35.0
36.6
37.0
35.9
37.1
36 8
36.3
50.4
45.7
40.9
39.9
43.0
43.5
43.4
45.3
44 6
43.9
34.1
34.5
33.7
33.5
34.8
34.7
36.5
36.5
37.4
36.8
1940
1941.
1942
1943
1944
1945
1946
1947
1948
1949
48.6
53.0
61.5
65.2
69 9
71.3
75.4
87.3
92.7
87.0
40.8
43.0
48.3
51.2
53.2
56.4
64.9
79.4
86.4
82.2
38.5
44,0
50.9
53.9
53 1
52.6
55.8
62.9
68.1
71.0
40.2
46.6
52.5
54.9
53 8
53 1
57.3
65.6
69 8
73.0
37.3
39.2
42.3
44.6
46.1
48.6
53.2
60.4
66.4
68.9
44.7
48.7
55.5
60.9
62.0
62.6
68.2
76.3
81.4
80.6
36.0
34.7
37.3
39.7
43.3
48.3
55.4
58.5
60.8
64.7
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
84.9
97.0
98.8
95.2
94.3
94.9
97.5
101.3
100.0
98.8
88.7
107.2
103.6
99.1
100.8
100.6
102.5
104.0
100.0
99.3
71.8
78.5
81.0
81.8
84.1
87.1
92.1
96.4
100.0
102.4
72.9
79.4
81.2
81.4
83.5
86.9
91.7
95.8
100.0
102 2
70.8
76.9
80.6
82.8
85.3
87.5
92.7
97.3
100.0
102.6
81.4
87.4
89.0
89.6
90.8
91.6
94.5
97.9
100.0
101.4
67.1
70.5
74.4
76.6
79.5
84.0
88.7
93.3
100.0
104.2
I960..
1961
1962
1963
1964
1965
1966
1967
1968*
99.9
101.9
100.8
100.6
101.5
104.7
107.6
109.5
110.4
101.0
100.1
98.5
99.5
101.5
103.4
105.5
104.2
105.4
105.0
107.1
109.0
111.8
115.7
119.4
123.5
126.8
132.1
104.2
105 2
105.6
108 0
112.2
115.5
118.8
121.2
126.1
105.9
109.4
113.2
116.3
119.5
123.5
128.4
133.3
138.8
102.8
103.7
104.7
105.8
107.0
108.8
111.4
114.8
118.9
108.6
113.6
116.6
121.5
128.4
133.5
139.1
143.7
152.1
105.6
107.1
108.0
109.5
104.5
105.4
106.2
105.9
121.7
122.7
124.2
125.1
117.3
118.2
119.4
120.1
126.2
127.5
129.3
130.5
110.1
111.1
111.8
112.8
137.4
138.0
139.9
141.0
109.8
109.2
109.3
109.7
104.8
103.9
104.0
104.1
125.3
125.7
127.0
129.2
120.2
120.0
120.7
123.7
131.0
132.2
134.3
135.5
113.6
114.1
115.2
116.2
141.5
142.4
143.4
147.6
107.9
111.6
110.6
111.2
104.3
105.6
105.2
106.5
130.1
131.1
133.0
134.1
124.4
124.9
127.2
128.0
136.6
138.4
139.4
140.8
117.2
118.4
119.3
120.4
149.1
150.5
153.4
155.1
.
. .
1966- 1
II.
Ill
IV
.
...
1967- 1
II
III
IV
1968: l
III
IV p . . . .
..
1 Separate deflators are not available for total gross private domestic investment, change in business inventories, and
net exports of goods and services.
2 Gross national product less compensation of general government employees. See also Tables B-7 and B-8.
Source: Department of Commerce, Office of Business Economics.
23I
TABLE B-4-.—Gross national product by major type of product, 1929-68
[Billions of dollars]
Goods output
Year or
quarter
Total
gross
national
prod-
Nondurable goods
Serv- Strucices tures
3 oo
| |
I!
Total Final
goods sales
uct
1929
Durable goods
Total
Final
sales
Final
Total sales
2 =
Final
Total sales
103.1
101.4
1.7
56.1
54.3
1.7
17.5
16.1
1.4
38.5
1930
1931
1932
1933
1934
1935
1936.—
1937..
1938....
1939
90.4
75.8
58.0
55.6
65.1
72.2
82.5
90.4
84.7
90.5
90.7
77.0
60.5
57.2
65.8
71.2
81.2
87.9
85.6
90.1
-.4
-1.1
-2.5
-1.6
-.7
1.1
1.3
2.5
-.9
.4
46.9
37.4
26.7
27.0
34.4
39.9
45.8
51.5
45.3
49.0
47.3
38.6
29.
28.6
35.1
38.8
44.5
48.9
46.2
48.6
-.4
-1.
-2.5
-1.6
-.7
1.1
1.3
2.5
-.9
.4
11.4
7.7
3.6
4.9
7.4
9.3
12.2
13.9
9.9
12.7
12.5 - 1 . 0
9.0 - 1 . 2
5.7 - 2 . 0
5.4 - . 5
7.3
.1
8.9
.3
11.2
13.1
10.8 - . 9
12.4
.3
35.5
29.7
23.1
22.1
27.0
30.6
33.6
37.6
35.4
36.3
1940....
1941....
1942
1943
1944
1945
1946
1947
1948
1949
99.7
124.5
157.9
191.6
210.1
211.9
208.5
231.3
257.6
256.5
97.5 2.2
120.1 4.5
156.2 1.8
192.2 - . 6
211.1 - 1 . 0
213.0 - 1 . 0
202.1 6.4
231.8 - . 5
252.9 4.7
259.6 - 3 . 1
56.0
72.5
93.6
120.4
132.3
128.9
124.9
139.7
154.2
147.5
53.8 2.2
68.0 4.5
91.9 1.8
121.0 - . 6
133.3 - 1 . 0
129.9 - 1 . 0
118.5 6.4
140.1 - . 5
149.4 4.7
150.5 - 3 .
16.6
26.8
35.5
54.2
57.9
48.9
36.9
46.0
48.7
47.8
15.4 1.2 39.3 38.4
23.8 3.0 45.6 44.2
34.5 1.0 58.1 57.4
66.2 66.8
54.2
58.5 - . 6 74.4 74.8
50.2 - 1 . 3 80.0 79.7
31.6 5.3 88.0 86.9
44.3 1.7 93.7 95.9
105.5 101.5
48.0
49.9 - 2 . 1 99.7 100.6
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
284.8
328.4
345.5
364.6
364.8
398.0
419.2
441.1
447.3
483.7
278.0 6.8
318.1 10.3
342.4 3.1
364.1
.4
366.4 - 1 . 5
392.0 6.0
414.5 4.7
439.8 1.3
448.8 - 1 . 5
478.9 4.8
162.4
189.7
195.6
204.1
197.1
216.4
225.4
234.6
230.8
249.1
155.6
179.4
192.5
203.7
198.6
210.4
220.7
233.3
232.3
244.4
60.4
73.7
74.6
79.4
72.1
85.7
90.3
94.4
83.6
95.6
56.3 4.1
66.8 6.9
73.5 1.1
78.5
.9
74.6 - 2 . 5
82.7 3.0
87.5 2.8
93.1 1.3
86.4 -2.8
93.2 2.3
1960
1961
1962
1963
1964
1965
1966
1967
1968 v
503.7
520.1
560.3
590.5
632.4
684.9
747.6
789.7
860.7
500.2 3.6 259.6 256.0 3.6 99.5 97.4 2.1 160.1 158.6
163.7
518.1 2.0 262.3 260.2 2.0 96.5 96.6 - . 1 165.
554.3 6.0 284.5 278.5 6.0 109.0 106.2 2.8 175.5 172.2
584.6 5.9 298.6 292.7 5.9 116.1 113.3 2.8 182.5 179.4
626.6 5.8 319.4 313.6 5.8 127.0 122.8 4.2 192.4 190.7
675.3 9.6 347.2 337.6 9.6 139.6 133.0 6.7 207.6 204.7
732.8 14.7 382.2 367.5 14.7 156.0 145.7 10.2 226.3 221.8
783.6 6.1 396.9 390.8 6.1 159.3 156.4 3.0 237.6 234.5
853.1 7.6 430.9 423.3 7.6 176.7 172.2 4.5 254.2 251.1
102.0
116.0
121.0
124.8
125.0
130.7
135.1
140.2
147.2
153.6
38.2
34.8
29.6
23.6
23.2
27.8
29.9
33.3
35.8
35.4
36.2
Gross
auto
product
1"
0.3
35.6
11.4
34.2
.1 31.7
— 4 27.5
-1.1 25.7
- . 9 27.1
. 7 28.3
31.0
* 32.3
33.
.1 34.0
9.2
6.7
3.8
2.9
3.5
4.0
5.6
6.7
6.2
7.5
1.0
1.4
.7
-.6
-.3
.2
1.1
-2.2
4.0
-1.0
35.4
40.3
50.3
62.5
71.8
76.5
68.0
70.2
75.7
80.8
8.3
11.8
14.0
8.7
6.1
6.5
15.6
21.4
27.7
28.3
7.2
8.8
11.9
99.3 2.7 87.0
112.6 3.4 101.2
119.1 2.0 110.8
125.2 - . 5 118.8
124.1 1.0 123.5
127.7 2.9 132.6
133.2 1.9 142.3
140.2
154.2
145.9 1.3 163.4
151.1 2.4 176.2
35.4
37.5
39.1
41.7
44.2
49.0
51.5
52.3
53.1
58.3
15.4
13.5
12.0
16.3
14.6
21.2
16.9
19.5
14.5
19.1
1.5
2.1
3.2
3.1
1.6
3.0
4.5
3l l|
3.1
187.3
199.5
213.3
226.2
244.2
262.9
288.0
314! 8
342.8
56.8
58.3
62.6
65.7
68.8
74.8
77.3
77.9
87.1
21.4
17.9
22.5
25.1
25.8
31.8
30.3
29.0
35.6
Seasonally adjusted annual rates
1966: I—.
II...
ML.
IV..
728.4
740.4
753.3
768.2
717.5
725.0
740.4
748.4
10.9
15.4
12.8
19.8
371.4
378.0
383.8
395.1
360.5
362.6
371.0
375.3
10.9
15.4
12.8
19.8
150.8
152.1
157.7
163.7
143.3 7.6 220.6
142.2 9.9 225.9
147.3 10.5 226.1
150.2 13.6 231.4
217.3
220.4
223.7
225.1
3.3
5.5
2.4
6.3
277.5
284.7
292.3
298.1
79.5
77.7
77.2
74.9
32.7
29.4
28.4
30.6
1967:
IV..
772.2
780.2
795.3
811.0
763.8
778.0
789.9
802.7
8.4
2.3
5.3
8.3
389.9
394.1
398.9
404.8
381.5
391.8
393.6
396.5
8.4
2.3
5.3
8.3
154.5
157.7
161.1
164.1
151.1
157.1
157.3
159.9
3.3
.6
3.8
4.2
235.4
236.4
237.8
240.7
230.4
234.7
236.2
236.6
5.0
1.7
1.6
4.1
306.3
310.9
317.5
324.7
76.1
75.3
78.8
81.5
26.2
29.2
29.3
31.3
L...
II...
ML.
IV v.
831.2
852.9
871.0
887.8
829.1 2.1 414.9 412.8 2.1 168.2 166.7
842.1 10.8 428.4 417.6 10.8 175.3 169.1
863.5 7.5 436.9 429.5 7.5 180.0 175.1
877.8 10.0 443.3 433.2 10.0 183.1 177.9
1.5
6.2
4.9
5.2
246.7
253.1
256.9
260.2
246.1
248.5
254.4
255.3
.6
4.6
2.5
4.9
330.4
339.2
347.6
354.0
85.8
85.4
86.4
90.6
33.7
36.1
36.1
36.7
1968:
I....
Source: Department of Commerce, Office of Business Economics.
232
TABLE B-5.—Gross national product by major type of product, in 1958 prices, 1929-68
(Billions of dollars, 1958 prices]
Goods output
Final
sales
Total
Total Final
goods sales
Total
Final
sales
II
)ods
Nondurable goods
l
Total
Final
sales
Gross
Serv- Struc- auto
prod>>« ices tures
uct
3.5
33.6
30.9
2.7
70.4
69.5
0.8
69.3
30.3
90.5 91.1 - . 6
83.2 85.7 - 2 . 4
68.7 74.9 - 6 . 2
68.8 73.2 - 4 . 3
77.9 80.5 - 2 . 7
88.6 86.2 2.4
102.2 99.1 3.1
110.2 104.8 5.5
100.5 102.9 - 2 . 4
110.7 109.5 1.2
22.4
16.3
8.3
11.7
16.9
21.5
28.7
31.0
21.1
27.6
24.5
19.2
13.4
13.4
16.7
20.6
26.3
29.
23.4
27.0
-2.1
-3.0
-5.1
-1.7
.2
.9
2.4
1.9
-2.3
.6
68.0
67.0
60.4
57.1
61.0
67.1
73.5
79.2
79.4
83.0
66.5
66.5
61.5
59.8
63.8
65.6
72.8
75.7
79.5
82.5
1.5
.5
-1.1
-2.7
-2.8
1.5
.7
3.6
-.1
.6
67.7
65.8
61.9
63.0
65.3
68.1
73.3
73.9
74.8
76.9
25.3
20.2
13.7
9.8
11.1
12.8
17.5
19.1
17.7
21.8
124.0
143.4
158.1
187.4
204.8
198.0
172.1
172.2
178.4
174.2
119.0
133.8
154.1
187.6
206.7
201.0
162.1
172.4
173.8
178.1
4.9
9.6
4.0
-.2
-1.9
-2.9
10.0
-.2
4.6
-3.9
35.6
50.0
57.2
85.6
95.9
84.3
54.7
60.1
61.3
58.0
32.8 2.7 88.4 86.2 2.2 80.0
43.5 6.6 93.4 90.3 3.1 89.8
54.4 2.9 100.9 99.7 1.2 107.7
85.2
.4 101.7 102.4 - . 6 131.8
97.4 -1.5 108.
109.3 - . 4 144.0
87.4 -3.1 113.7 113.6
.2 144.3
46.1 8.6 117.4 116.0 1.4 113.3
58.6 1.5 112.2 113.8 - 1 . 7 106.5
60.0 1.2 117.1 113.8 3.3 109.3
61.0 - 3 . 0 116.2 117.1 - . 9 112.4
23.2
30.5
31.9
17.9
12.4
12.9
27.2
31.2
36.1
37.5
10.3
11.4
14.8
347.0
8.3
372.5 10.9
391.8
3.3
411.8
.9
409.0 - 2 . 0
431.6
6.4
441.2
4.8
451.2
1.2
448.8 - 1 . 5
471.1
4.8
192.6
208.4
214.0
225.4
215.1
236.1
239.0
239.8
230.8
247.7
184.3 8.3
197.5 10.9
210.7 3.3
224.5
.9
217.1 - 2 . 0
229.7 6.4
234.2 4.8
238.5 1.2
232.3 - 1 . 5
242.9 4.8
73.4
84.1
84.6
91.0
81.9
96.5
96.5
96.2
83.6
94.0
68.3 5.2 119.1 116.0 3.1 117.5
76.1 8.0 124.3 121.4 2.9 130.5
83.2 1.5 129.4 127.6 1.8 136.3
89.9 1.2 134.4 134.6 - . 2 140.3
84.8 - 3 . 0 133.2 132.3
.9 141.8
93.0 3.4 139.7 136.7 3.0 147.5
93.5 3.0 142.5 140.7 1.8 153.0
95.0 1.2 143.6 143.6
* 160.1
86.4 -2.8 147.2 145.9 1.3 163.4
91.6 2.4 153.7 151.2 2.5 171.2
45.2
44.4
44.7
47.0
50.2
54.3
54.0
52.6
53.1
57.0
19.1
15.9
13.5
18.7
17.1
24.6
18.6
20.2
14.5
18.5
484.2
495.2
523.8
545.2
575.2
608.8
643.2
667.2
699.9
256.0
257.3
277.3
289.7
308.6
330.7
355.9
361.0
380.3
252.6 3.5 97.8 95.9
255.3 2.0 94.9 94.9
271.3 6.0 107.0 104.1
283.9 5.8 114.2 111.4
302.!
5.8 124.6 120.4
321.7 9.0 136.5 130.1
342.0 13.9 151.1 141.5
355.1 5.9 150.3 147.6
373.4 6.9 162.1 158.1
1929
203.6
200.1
3.5
1930
1931
1932
1933
1934
1935
1936
1937
1938
1939
183.5
169.3
144.2
141.5
154.3
169.5
193.0
203.2
192.9
209.4
184.1
171.7
150.5
145.9
157.0
167.1
189.9
197.8
195.3
208.2
-.6
-2.4
-6.2
-4.3
-2.7
2.4
3.1
5.5
-2.4
1.2
1940
1941
1942
1943
1945
1946
1947
1948
1949
227.2
263.7
297.8
337.1
361.3
355.2
312.6
309.9
323.7
324.1
222.3
4.9
254.1
9.6
293.8
4.0
337.3 - . 2
363.2 - 1 . 9
358.2 - 2 . 9
302.6 10.0
310.1 - . 2
319.1
4.6
328.1 - 3 . 9
1950
1951
1952
1953
1954
1955
1956..
1957
1958
1959
355.3
383.4
395.1
412.8
407.0
438.0
446.1
452.5
447.3
475.9
1960
1961
1962
1963
1964
1965
1966
1967
1968 v
487.7
497.2
529.8
551.0
581.1
617.8
657.1
673.1
706.9
1944
Durable goods
f1
Inventc
chan
Year or
quarter
Total
gross
national
product
3.5
2.0
6.0
5.8
5.8
9.0
13.9
5.9
6.9
103.9 100.4
2.0
*
2.8
2.8
4.1
6.5
9.6
2.7
4.0
158.2
162.3
170.3
175.6
184.1
194.2
204.8
210.7
218.2
156.7
160.3
167.2
172.5
182.3
191.6
200.5
207.5
215.3
1.5
2.0
3.1
3.1
1.7
2.6
4.3
3.2
3.0
176.6
184.0
193.7
200.9
210.8
221.9
236.4
249.6
260.1
55.0
55.8
58.8
60.4
61.6
65.2
64.8
62.5
66.4
21.0
17.5
22.0
24.7
25.5
31.8
30.9
29.0
34.8
Seasonally adjusted annual rates
1966: I....
II...
339.8
338.4
344.6
345.4
10.3
14.7
12.0
18.6
147.8
147.7
152.6
156.4
140.7 7.1
138.4 9.3
142.9 9.7
143.9 12.5
202.3
205.4
203.9
207.5
199.1
200.0
201.6
201.5
3.2
5.4
2.3
6.1
230.7
234.7
238.9
241.3
67.9
65.5
64.1
61.8
33.5
30.0
29.0
31.0
657.7
666.9
670.4
673.8
8.0 357.2 349.2
2.3 360.3 358.1
5.2 361.9 356.7
8.0 364.4 356.4
8.0
2.3
5.2
8.0
146.7
149.9
151.6
152.8
143.8
149.3
148.2
149.0
3.0
.6
3.4
3.8
210.5
210.5
210.2
211.6
205.5
208.8
2C8.5
207.5
5.0
1.7
1.8
4.1
246.1
247.8
251.2
253.2
62.3
61.1
62.5
64.2
26.6
29.6
29.2
30.7
690.7
693.5
705.5
710.0
2.0
9.9
6.8
9.1
368.4
369.3
378.0
377.7
2.0
9.9
6.8
9.1
155.9
161.2
164.9
166.3
154.5
155.6
160.5
161.7
1.4
5.6
4.4
4.6
214.5
218.0
219.8
220.5
213.9
213.7
217.4
216.0
.6
4.3
2.4
4.6
255.1
258.7
262.3
264.5
67.2
65.5
65.2
67.7
33.0
35.4
35.2
35.4
648.6
653.3
659.5
IV.... 667.1
638.3
638.5
647.6
648.5
665.7
669.2
675.6
681.8
692.7
703.4
III..,- 712.3
IV P . . 719.1
1967: I.
III...
IV...
1968: I . . . . .
10.3
14.7
12.0
18.6
350.1
353.1
356.5
363.9
370.4
379.2
384.7
386.8
Source: Department of Commerce, Office of Business Economics.
233
TABLE B-6.—Gross national product: Receipts and expenditures by major economic groups.
1929-68
(Billions of dollars]
Government
Persons
Disposable personal
income
Year or
quarter
Net receipts
PerPersonal sonal
Equals: consaving
Total sumpor
exclud- tion
disexing inpendi- saving
terest
tures
and
Less:
Interest
paid
and
Total i transfer
payments transfers
to foreigners
Expenditures
Surplus
or
deficit
Tax
Less:
Less: Equals: (-),
naand TransTransPurfers,
nonfers, Equals: Total
chases tional
inintertax
interNet
of
excome
est,
goods
reest,
rependiand
and
and
ceipts
and
ceipts tures
prodsubservor ac- subuct acsidies s
ices
cruals sidies 2
counts
1929
83.3
1.9
81.4
77.2
4.2
11.3
1.8
9.5
10.3
1.8
8.5
1930
1931
1932
1933—
1934
1935
1936
1937
1938.
1939..
74.5
64.0
48.7
45.5
52.4
58.5
66.3
71.2
65.5
70.3
1.2
.9
^8
.9
.8
.9
73.3
63.1
48.0
44.9
51.7
57.8
65.5
70.3
64.6
69.4
69.9
60.5
48.6
45.8
51.3
55.7
61.9
66.5
63.9
66.8
3.4
2.6
-.6
-.9
.4
2.1
3.6
3.8
.7
2.6
10.8
9.5
8.9
9.3
10.5
11.4
12.9
15.4
15.0
15.4
1.9
3.1
2.6
2.7
3.1
3.4
4.1
3.2
3.8
4.2
8.9
6.3
6.3
6.7
7.4
8.0
8.8
12.2
11.2
11.2
11.1
12.4
10.6
10.7
12.9
13.4
16.1
15.0
16.8
17.6
1.9
3.1
2.6
2.7
3.1
3.4
4.1
3.2
3.8
4.2
9.2
9.2
8.1
8.0
9.8
10.0
12.0
11.9
13.0
13.3
1940
1941 . .
1942
1943
1944...
1945
1946
1947
1948
1949
75.7
92.7
116.9
133.5
146.3
150.2
160.0
169.8
189.1
188.6
1.0
1.1
.8
.8
.8
1.0
1.4
1.8
2.2
2.4
74.7
91.6
116.1
132.7
145.5
149.3
158.6
168.0
186.9
186.2
70.8
80.6
88.5
99.3
108.3
119.7
143.4
160.7
173.6
176.8
3.8
11.0
27.6
33.4
37.3
29.6
15.2
7.3
13.4
9.4
17.7
25.0
32.6
49.2
51.2
53.2
50.9
56.8
58.9
56.0
4.4
4.0
4.4
4.7
6.5
10.4
18.5
17.3
18.8
21.3
13.3
21.0
28.2
44.4
44.7
42.8
32.4
39.5
40.1
34.7
18.4
28.8
64.0
93.3
103.0
92.7
45.5
42.4
50.3
59.1
4.4
4.0
4.4
4.7
6.5
10.4
18.5
17.3
18.8
21.3
14.0
24.8
59.6
88.6
96.5
82.3
27.0
25.1
31.6
37.8
-.7
-3.8
-31.4
-44.1
-51.8
-39.5
5.4
14.4
8.5
-3.2
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
206.9
226.6
238.3
252.6
257.4
275.3
293.2
308.5
318.8
337.3
2.9
3.1
3.5
4.3
4.6
5.1
5.9
6.4
6.5
7.1
204.1
223.5
234.8
248.3
252.9
270.2
287.2
302.2
312.3
330.3
191.0
206.3
216.7
230.0
236.5
254.4
266.7
281.4
290.1
311.2
13.1
17.3
18.1
18.3
16.4
15.8
20.6
20.7
22.3
19.1
68.7
84.8
89.8
94.3
89.7
100.4
109.0
115.6
114.7
128.9
22.9
19.9
19.0
19.5
21.9
23.4
25.5
28.7
33.0
34.0
45.8
64.9
70.8
74.8
67.8
76.9
83.5
86.8
81.6
95.0
60.8
79.0
93.7
101.2
96.7
97.6
104.1
114.9
127.2
131.0
22.9
19.9
19.0
19.5
21.9
23.4
25.5
28.7
33.0
34.0
37.9
59.1
74.7
81.6
74.8
74.2
78.6
86.1
94.2
97.0
7.8
5.8
-3.8
-6 9
-7.0
2.7
4.9
.7
-12.5
-2.1
1960
1961
1962
1963
1964
1965
1966
1967
1968 v
350.0
364.4
385.3
404.6
438.1
473.2
511.6
546.3
589.0
7.8
8.1
8.6
9.7
10.7
12.0
13.1
13.9
14.4
342.3
356.3
376.6
394.9
427.4
461.3
498.4
532.4
574.5
325.2
335.2
355.1
375.0
401.2
432.8
465.5
492.2
533.7
17.0
21.2
21.6
19.9
26.2
28.4
32.9
40.2
40.8
139.8
144.6
157.0
168.8
174.1
189.1
213.2
227.4
260.9
36.5
41.3
42.8
44.4
46.7
49.9
55.3
62.9
70.2
103.3
103.3
114.2
124.3
127.3
139.2
157.9
164.6
190.7
136.1
149.0
159.9
166.9
175.4
186.9
211.5
241.3
267.3
36.5
41.3
42.8
44.4
46.7
49.9
55.3
62.9
70.2
99.6
107.6
117.1
122.5
128.7
137.0
156.2
178.4
197.1
3.7
-4.3
-2.9
1.8
—1.4
2.2
1.7
-13.8
-6.4
.7
.6
1 0
-2!s
-1.8
-1.4
-2.4
-2.0
-3.1
-1.8
-2.2
Seasonally adjusted annual rates
1966:
I....
II...
III...
IV...
500.0
505.5
515.4
525.4
12.7
13.1
13.2
13.5
487.3
492.5
502.2
511.8
457.8
461.1
469.3
473.7
29.5
31.4
32.9
38.1
204.3
211.5
216.5
220.5
53.6
53.1
55.8
58.8
150.8
158.4
160.8
161.7
201.3
206.2
215.3
223.1
53.6
53.1
55.8
58.8
147.8
153.1
159.5
164.3
3.0
5.3
1.2
-2.6
1967:
1....
11...
III...
IV...
534.2
541.5
550.0
559.6
13.7
14.2
14.0
13.9
520.6
527.3
536.1
545.7
480.9
490.3
495.5
502.2
39.7
37.0
40.5
43.4
222.2
223.6
229.0
234.8
62.0
62.2
63.4
63.8
160.2
161.4
165.7
171.0
235.2
239.5
243.0
247.4
62.0
62.2
63.4
63.8
173.1
177.3
179.6
183.5
-12.9
-15.9
-14.0
-12.5
1968:
I....
II...
III...
IV p..
574.4
586.3
592.7
602.5
14.1
14.4
14.5
14.7
560.3
571.9
578.2
587.7
519.4
527.9
541.1
546.3
40.8
44.0
37.1
41.4
246.6
254.2
267.2
66.4
69.8
71.8
72 9
180.3
184.4
195.4
256.9
265.5
271.3
275.4
66.4
69.8
71.8
72.9
190.5
195.7
199.6
202.5
-10.3
-11.3
-4.1
See footnotes at end of table.
234
T A B L E B—6.—Gross national product:
Receipts and expenditures
by major economic groups,
1929-68— Continued
[Billions of dollars]
International
Business
Year
or
quarter
1929
1930
19311932
1933
1934
19351936
1937
1938
1939.
1940
1941
1942
1943 .
1944
1945
1946
1947..
1948
1949
1950
1951
1952
1953
1954
1955
1956 .
1957
1958
1959
I960..
1961
1962
1963
1964
1965
1966
1967
1968 v
TransNet exports of goods
Excess
fers to
and services
of
forGross
transpriGross
Excess eigners
fers
revate
of in- by peror
tained domes- vestsons
Less: Equals: of net
earn- tic in- ment
and
ExNet
Imexings 3 vestGovports ports
exports
ernment <
ports
ment
11.2
8.6
5.3
3.2
3.2
5.2
6.4
6.7
7.7
8.0
8.4
10.5
11.4
14.5
16.3
17.1
15.1
14.5
20.2
28.0
29.7
29.4
33.1
35.1
36.1
39.2
46.3
47.3
49.8
49.4
56.8
56.8
58.7
66.3
68.8
76.2
84.7
91.6
93 1
97.5
16.2
10.3
5.6
1.0
1.4
3.3
6.4
8.5
11.8
6.5
9,3
13.1
17.9
9.8
5.7
7.1
10.6
30.6
34.0
46.0
35.7
54.1
59.3
51.9
52.6
51.7
67 4
70.0
67.8
60.9
75.3
74.8
71.7
83.0
87.1
94.0
108.1
120 8
114 3
127.5
-5.1
-1.6
-.3
2.2
1.8
1.9
*
-1.8
-4.0
1.6
-.9
-2.7
-6.5
4.6
10.6
10.0
4.6
-16.1
-13.8
-18.0
-6.0
-24.7
-26.2
-16.8
-16.5
-12.5
-21.1
-22.8
-18.1
-11.5
-18.5
-18.0
-13.0
-16 8
-18.4
-17.8
-23.4
—29 2
-21 1
-30.0
0.4
.3
.3
.2
.2
.2
'.2
.2
.2
.2
.2
.2
.2
.2
.3
.8
2.9
2.6
4.5
5.6
4.0
3.5
2.5
2.5
2.3
25
2.4
2.3
24
2.4
2.4
2.6
2.7
2.8
2.8
2.8
29
31
2.7
7.0
5.4
3.6
2.5
2.4
3.0
3.3
3.5
4.6
4.3
4.4
5.4
5.9
4.8
4.4
5.3
7.2
14.7
19.7
16.8
15.8
13.8
18.7
18.0
16.9
17.8
19.8
23.6
26.5
23.1
23.5
27.2
28.6
30.3
32.3
37.1
39 2
43.1
45.8
50.6
5.9
4.4
3.1
2.1
2.0
2.4
3.1
3.4
4.3
3.0
3.4
3.6
4.6
4.8
6.5
7.1
7.9
7.2
8.2
10.3
9.6
12.0
15.1
15.8
16.6
15.9
17.8
19.6
20.8
20.9
23.3
23.2
23.0
25.1
26.4
28.6
32.3
38 1
41 0
48.2
1.1
1.0
.4
.4
.6
.'l
.3
1.3
1.1
1.7
1.3
*
-1.8
-2.0
-.6
7.5
11.5
6.4
6.1
1.8
3.7
2.2
.4
1.8
20
4.0
5.7
2.2
.1
4.0
5.6
5.1
5.9
8.5
6.9
51
48
2.4
-0.8
—.7
-.2
-.2
-.2
-.4
.1
.1
—l
-1.1
-.9
-1.5
-1.1
.2
2.2
2.1
1.4
-4.6
-8.9
-1.9
-.5
2.2
-.2
.3
2.1
.5
.5
-1.5
-3.4
.2
2.3
-1.7
-3.0
-2.5
-3.1
-5.7
-4.1
-2.2
-1.7
.3
Gross
naTotal Statis- tional
income tical
prodor re- disuct
ceipts crep- or exancy penditure
102.4
91.2
75.1
57.7
55.0
64.5
72.5
81.3
90 5
84.1
89.2
98.7
124.1
159.0
193.6
207.6
208.0
208.4
230.4
259.5
256.2
283.3
325.1
343.3
361.6
362.1
395.9
420.4
441.1
445.8
484.5
504.8
520.8
559.8
590.8
633.7
688.0
750 9
793 2
865.7
1.6
-.8
-1.0
-.8
.5
-.3
-1.3
-3.1
—3 3
-3 5
-4.7
103.1
90 4
75 8
58.0
55.6
65 1
72.2
82.5
90 4
84 7
90.5
99.7
124.5
157.9
191 6
210.1
211.9
208 5
231.3
257.6
256.5
284.8
328.4
345 5
364.6
364.8
398 0
419.2
441.1
447 3
483.7
503.7
520.1
560 3
590.5
632 4
684.9
747 6
789 7
860.7
0.7
- 8
.7
.3
.6
.5
-.2
1.2
*
.6
1.3
1.0
.4
-1.1
-2.0
2.5
3.9
1
.9
-2.0
.3
1.5
3.3
2.2
3.0
2.7
21
-1.1
Seasonally adjusted annual rates
1966: 1
II
III
IV..-
88.9
90.4
91.9
95.3
116.8
121.0
119.9
125.7
-27.9
-30.5
-28.0
-30.4
3.4
2.9
2.8
2.6
42.1
42.6
43.6
44.2
36.1
37.3
39.1
39.7
6.0
5.2
4.5
4.5
-2.7
-2.3
-1.7
-1.9
730.3
744.2
757.7
771.3
-1.9
-3.9
-4.4
-3.1
728.4
740 4
753 3
768.2
1967: 1
91.3
91.9
93.5
95.9
113.0
107.6
114.7
121.8
-21.7
-15.7
-21.2
-25.9
2.9
3.4
3.4
2.6
45.5
45.5
46.1
46.0
40.3
40.4
40.6
42.6
5.2
5.1
5.4
3.4
-2.3
-1.6
-2.1
-.8
775.0
784.0
798.6
815.2
-2.8
-3.8
-3.4
-4.2
772.2
780 2
795.3
811.0
92.8
97.4
99.9
119.7
127.3
127.1
136.1
-26.9
-29.9
-27.2
2.6
2.8
2.8
2.8
47.5
49.9
52.6
52.4
46.0
47.9
49.4
49.5
1.5
2.0
3.3
3.0
1.1
.8
835.9
856.5
876.3
-4.7
-3.6
-5 3
831.2
852.9
871 0
887.8
III—
IV
1968: 1
II
III
IV v
1
-.2
Personal income less personal tax and nontax payments (fines, penalties, etc.).
2 Government transfer payments to persons, foreign net transfers by government, net interest paid by government,
and subsidies less current surplus of government enterprises.
2
Undistributed corporate profits, corporate inventory valuation adjustment, capital consumption allowances, and
wage accruals less disbursements.
* Private business investment, purchases of capital goods by private nonprofit institutions, and residential housing.
See Table B - l l .
• Net foreign investment with sign changed.
Source: Department of Commerce, Office of Business Economics.
235
TABLE B-7.—Gross national product by sector, 1929-68
[Billions of dollars]
Gross private product1
Total
gross
national
product
Year or
quarter
Business
Total
loiai
Nonfarm2
Total
Farm
Households
Rest of
the world
Gross
government
product^
1929..
103.1
98.8
95.1
85.4
9.7
2.9
0.8
4.3
1930..
1931..
1932..
1933..
1934..
1935..
1936..
1937..
1938..
1939..
90.4
75.8
58.0
55.6
65.1
72.2
82.5
90.4
84.7
90.5
85.8
71.2
53.6
50.9
59.5
66.3
75.2
83.5
77.0
82.9
82.4
68.3
51.3
48.9
57.4
64.1
72.9
81.0
74.5
80.3
74.8
62.0
46.8
44.3
52.7
57.1
66.5
72.7
67.9
74.0
7.7
6.3
4.5
4.6
4.7
7.0
6.4
8.3
6.6
6.3
2.7
2.3
1.9
1.7
1.8
1.9
2.0
2.3
2.2
2.3
.7
.5
.4
.3
.3
.4
.3
.3
.4
.3
4.5
4.7
4.4
4.7
5.6
5.9
7.3
6.9
7.6
7.6
1940..
1941..
1942..
1943..
1944..
1945..
1946..
1947..
1948..
1949..
99.7
124.5
157.9
191.6
210.1
211.9
208.5
231.3
257.6
256.5
91.9
115.1
142.8
166.0
177.9
176.8
187.7
214.6
240.1
237.0
89.1
112.2
139.5
162.4
173.8
172.3
182.7
208.6
233.5
230.1
82.6
103.3
126.5
147.2
158.5
156.4
163.9
188.5
210.2
211.4
6.5
8.9
13.0
15.3
15.3
15.9
18.8
20.2
23.3
18.8
2.4
2.5
2.9
3.2
3.7
4.1
4.5
5.1
5.6
5.9
.4
.4
.4
.4
.4
.4
.6
.8
1.0
1.0
7.8
9.4
15.1
25.6
32.2
35.2
20.8
16.7
17.4
19.4
1950..
1951..
1952..
1953..
1954..
1955..
1956..
1957..
1958..
1959..
284.8
328.4
345.5
364.6
364.8
398.0
419.2
441.1
447.3
483.7
263.9
301.0
314.3
332.7
332.4
363.8
382.6
402.0
405.2
439.4
256.3
292.8
305.8
323.6
322.7
352.9
370.8
389.3
391.7
425.0
236.3
269.9
283.7
303.3
303.1
334.1
352.2
370.9
370.9
405.3
20.0
22.9
22.2
20.3
19.6
18.8
18.6
18.4
20.8
19.6
6.4
6.9
7.2
7.8
8.1
9.1
9.8
10.5
11.4
12.2
1.2
1.3
1.3
1.3
1.6
1.8
2.1
2.2
2.0
2.2
20.9
27.4
31.2
31.9
32.5
34.2
36.6
39.1
42.1
44.3
I960..
1961..
1962..
1963..
1964..
1965..
1966..
1967..
1968 P.
503.7
520.1
560.3
590.5
632.4
684.9
747.6
789.7
860.7
456.3
469.2
505.7
532.4
569.4
617.1
671.1
704.8
766.4
440.7
452.3
487.4
513.0
548.2
594.4
646.7
677.9
737.4
420.2
431.4
466.2
491.5
527.6
570.8
622.0
653.7
712.4
20.5
20.9
21.2
21.5
20.6
23.7
24.7
24.2
25.0
13.2
14.0
15.0
16.0
17.3
18.5
20.2
22.3
24.0
2.4
2.9
3.3
3.4
4.0
4.2
4.2
4.6
5.0
47.5
50.9
54.7
58.1
63.0
67.8
76.5
84.8
94.3
Seasonally adjusted annual rates
1966: L
II
IIL.
IV
728.4
740.4
753.3
768.2
655.4
665.3
675.4
688.2
631.5
641.3
650.8
663.1
605.9
616.5
626.5
639.0
25.6
24.8
24.2
24.2
19.9
19.7
20.4
20.7
4.0
4.2
4.1
4.4
73.0
75.1
77.9
80.0
1967: I . —
II
III
IV
772.2
780.2
795.3
811.0
690.4
696.7
709.8
722.3
664.5
670.7
682.4
694.1
640.7
646.7
658.0
669.4
23.8
24.0
24.4
24.8
21.8
22.1
22.5
22.9
4.1
4.0
5.0
5.3
81.8
83.5
85.4
88.6
1968: L —
831.2
852.9
871.0
887.8
740.3
759.9
775.0
790.3
712.4
730.8
745.6
760.7
688.1
706.1
720.2
735.2
24.3
24.7
25.5
25.5
23.5
24.2
24.2
24.2
4.4
4.9
5.2
5.4
90.8
93.0
96.0
97.6
III
V
1
* Gross national product less compensation of general government employees.
2
Includes compensation of employees in government enterprises. Government enterprises are those agencies of
government whose operating costs are 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. The Post Office and public
power systems are examples of government enterprises; on the other hand, State universities and public parks are part of
general government activities.
3
Compensation of general government employees.
Source: Department of Commerce, Office of Business Economics.
236
TABLE B-8.—Gross national product by sector, in 1958 prices, 1929-68
[Billions of dollars, 1958 prices)
Gross private productl
Total
gross
national
product
Year or
quarter
Business
Households
Tntal
1 Oldl
Nonfarm2
Total
Rest of
the world
Gross
government
products
Farm
1929
203.6
190.9
182.1
165.1
17.0
7.4
1.4
12.7
1930
1931
1932
1933....
1934
1935
1936
1937
1938
1939
183.5
169.3
144.2
141.5
154.3
169.5
193.0
203.2
192.9
209.4
170.1
155.8
131.0
127.5
138.3
152.4
173.1
184.3
172.6
188.7
161.4
147.7
123.8
120.6
131.1
144.9
165.4
176.4
164.6
180.7
145.4
129.2
105.8
103.0
116.6
128.4
150.5
158.5
146.8
162.5
16.1
18.5
18.0
17.5
14.6
16.5
14.9
17.9
17.8
18.2
7.1
6.6
6.0
5.7
6.2
6.4
6.8
7.1
6.8
7.1
1.6
1.4
1.3
1.2
1.0
1.1
1.0
.8
1.1
.9
13.3
13.5
13.2
14.0
16.0
17.1
19.9
18.9
20.4
20.6
1940
1941
1942
1943
1944
1945
1946
1947
1948
1949
227.2
263.7
297.8
337.1
361.3
355.2
312.6
309.9
323.7
324.1
205.6
236.6
257.3
272.8
286.9
282.5
275.1
281.4
295.0
294.1
197.1
228.1
248.7
264.9
278.9
274.6
267.0
272.8
286.0
284.7
179.6
209.3
228.0
245.3
259.5
256.5
248.6
255.8
267.0
266.2
17.5
18.8
20.6
19.6
19.4
18.1
18.5
17.0
19.0
18.4
7.6
7.5
7.8
7.2
7.1
7.1
7.1
7.5
7.9
8.2
1.0
.9
.8
.8
.9
.8
.9
1.1
1.2
1.2
21.6
27.2
40.5
64.3
74.4
72.8
37.5
28.6
28.7
30.1
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
355.3
383.4
395.1
412.8
407.0
438.0
446.1
452.5
447.3
475.9
324.2
344.6
353.2
371.1
366.2
397.2
404.8
410.5
405.2
433.4
314.2
334.5
343.2
360.7
355.4
385.4
392.2
397.5
391.7
419.4
294.9
316.2
324.2
340.7
335.0
364.4
371.4
377.2
370.9
398.3
19.4
18.4
19.0
20.0
20.4
20.9
20.8
20.3
20.8
21.1
8.7
8.8
8.8
9.1
9.2
10.1
10.6
10.9
11.4
11.7
1.3
1.2
1.2
1.3
1.6
1.8
2.0
2.1
2.0
2.2
31.1
38.8
4U8
41.7
40.9
40.7
41.3
41.9
42.1
42.5
487.7
497.2
529.8
551.0
581.1
617.8
657.1
673.1
706.9
444.0
452.3
482.9
503.2
532.0
567.0
602.1
614.0
644.8
429.5
436.9
466.7
486.6
514.4
548.9
583.4
594.0
623.8
407.6
414.8
444.6
463.8
492.1
525.2
561.1
569.9
599.9
21.9
22.2
22.1
22.8
22.3
23.7
22.2
24.1
23.9
12.2
12.4
12.9
13.2
13.7
14.0
14.8
15.5
16.1
2.3
2.9
3.4
3.4
3.9
4.1
4.0
4.5
4.9
43.7
44.8
46.9
47 8
49.1
50.8
55.0
59.0
62.0
*
1960
1961
1962
1963
1964
1965
1966
1967
1968*
Seasonally adjusted annual rates
1966: I
II
III
IV
648.6
653.3
659.5
667.1
595.5
598.9
603.8
610.3
577.0
580.3
585.0
591.1
554.3
557.4
563.6
569.3
22.7
22.9
21.4
21.9
14.7
14.5
14.9
15.0
3.8
4.0
3.9
4.2
53.1
54.4
55.7
56.8
1967: I
II
III
IV
665.7
669.2
675.6
681.8
607.9
610.6
616.0
621.7
588.5
591.2
595.6
600.8
564.8
567.5
571.2
576.3
23.7
23.7
24.4
24.5
15.3
15.5
15.6
15.7
4.1
3.9
4.9
5.2
57.8
58.6
59.6
60.1
1968: I
II
III
IV P
692.7
703.4
712.3
719.1
631.8
641.6
649.7
656.2
611.4
620.5
628.5
634.9
587.8
596.2
604.5
610.9
23.6
24.3
24.0
24.0
16.1
16.3
16.2
16.0
4.3
4.8
5.1
5.3
60.9
61.8
62.6
62.9
1
Gross national product less compensation of general government employees.
2 Includes compensation of employees in government enterprises. Government enterprises are those agencies of government whose operating costs are 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. The Post Office and public power
systems are e xamplesof government enterprises; on the other hand, State universities and public parks are part of general government activities.
3
Compensation of general government employees.
SouFCe: Department of Commerce, Office of Business Economics.
237
323-166 0—69
-16
TABLE B-9.—Gross national product by industry, in 1958 prices, 1947-67
[Billions of dollars, 1958 prices]
Manufacturing
Year
AgriTotal culture, Congross fores- tract
nacontry,
tional
strucand
product fishtion
eries
Total
TransGovporta- Whole- Finance,
erntion,
insurment
sale
saie
All
comance, Servand
Non- muniDurand
and
ices govern- other i
able durable cation, retail
real
ment
goods goods
trade
estate
enterindus- indus- and
prises
tries
tries utilities
1947.
1948.
1949.
1950.
1951.
1952.
1953.
1954.
1955.
1956.
1957.
1958.
1959.
309.9
323.7
324.1
17.9
20.0
19.4
12.9
14.1
14.7
91.8
96.3
90.9
52.3
55.0
50.5
39.4
41.3
40.4
29.6
30.4
28.7
52.7
54.2
55.2
35.6
36.5
37.8
30.6
31.9
32.1
32.4
33.2
34.7
6.7
7.1
10.6
355.3
383.4
395.1
412.8
407.0
20.4
19.5
20.2
21.2
21.6
16.2
18.2
18.3
18.9
19.3
105.5
116.2
118.7
128.6
119.5
60.8
69.0
71.5
79.1
71.2
44.7
47.2
47.3
49.5
48.3
30.8
34.3
34.6
35.7
36.4
60.4
61.4
62.9
64.9
65.5
41.0
42.9
44.7
46.8
49.8
33.1
34.0
34.5
35.3
35.4
35.9
43.9
47.2
47.1
46.1
12.1
13.0
14.0
14.3
13.5
438.0
446.1
452.5
447.3
475.9
22.1
22.0
21.5
22.0
22.3
20.8
21.8
21.1
20.7
22.0
133.6
134.1
134.6
123.7
138.9
80.7
79.4
79.6
69.6
79.9
52.9
54.6
54.9
54.0
59.0
38.6
40.5
41.3
40.6
43.3
71.6
73.8
75.1
75.1
80.8
52.7
54.8
57.0
59.2
61.4
38.2
40.2
41.8
42.9
45.1
46.0
46.2
46.9
47.3
47.9
14.4
12.7
13.1
16.0
14.1
1960.
1961.
1962.
1963
1964.
487.7
497.2
529.8
551.0
581.1
23.1
23.4
23.3
24.0
23.6
21.7
21.4
21.7
21.9
23.3
140.9
140.4
154.6
162.4
173.7
81.0
79.7
90.0
95.6
102.4
59.9
60.7
64.7
66.8
71.3
44.9
46.0
48.9
51.9
54.7
82.3
83.5
88.9
92.8
98.9
64.1
67.1
71.2
74.4
78.3
46.7
48.3
50.8
52.2
54.7
49.2
50.6
52.6
53.9
56.1
14.7
16.3
17.9
17.4
17.8
1965
1966
1967
617.8
657.1
673.1
25.0
23.5
25.4
23.5
24.4
23.6
190.5
205.7
206.5
114.8
124.9
124.3
75.7
80.8
82.2
59.2
64.4
68.0
104.8
111.7
113.6
83.1
87.2
90.1
57.7
60.5
62.7
58.0
62.2
66.9
15.8
17.4
16.3
i Mining, rest of world, and residual (the difference between gross national product measured as sum of final products
and gross national product measured as sum of gross product by industries).
Source: Department of Commerce, Office of Business Economics.
238
TABLE B-10.—Personal consumption expenditures, 1929-68
[Billions of dollars]
Durable goods
c
o
"S. n
•
8-
ex.
3
XJ
Is
1
Other
Total
Housi
Trans
Other
77. 2
9.2
3.2
4.8
1. 2
37.7
19.5
9.4
1.8
7. 0
30.3
11.5
4. 0
2. 6
12.2
1930
1931
1932—.
1933
1934
1935
1936
1937
1938
1939
69. 9
60. 5
48. 6
45. 8
51. 3
55. 7
61. 9
66. 5
63. 9
66. 8
7.2
5.5
3.6
3.5
4.2
5.1
6.3
6.9
5.7
6.7
2.2
1.6
.9
1.1
1.4
1.9
2.3
2.4
1.6
2.2
3.9
3.1
2.1
1.9
2.2
2.6
3.2
3.6
3.1
3.5
1. 1
9
6
5
6
7
8
l! 0
9
l! 0
34.0
29.0
22.7
22.3
26.7
29.3
32.9
35.2
34.0
35.1
18.0
14.7
11.4
10.9
12.2
13.6
15.3
16.5
15.6
15.7
8.0
6.9
5.1
4.6
5.7
6.0
6.6
6.8
6.8
7.1
1.7
1.5
1.5
1.5
1.6
1.7
1.9
2.1
2.1
2.2
6. 3
5. 7
4. 8
5. 3
7. 2
7. 9
9. 1
9. 8
9. 5
10.1
28.7
26. 0
22. 2
20.1
20. 4
21. 3
22. 8
24. 4
24. 3
25.0
11.0
10.3
9.0
7.9
7.6
7.7
8.0
8.5
8.9
9.1
3. 9
3. 5
3. 0
2. 8
3. 0
3. 2
3. 4
3. 7
3. 6
3. 8
2. 2
1.9
1. 6
1. 5
1. 6
1. 7
1. 9
2. 0
1. 9
2. 0
11.5
10.3
8.6
7.9
8.2
8.7
9.5
10.2
9.9
10.1
1940
1941
1942
1943
1944
1945....
1946—.
1947....
1948....
1949
70. 8
80. 6
88. 5
99. 3
08. 3
19. 7
43. 4
60. 7
73. 6
7.8
9.6
6.9
6.6
6.7
8.0
15.8
20.4
22.7
24.6
2.7
3.4
.7
.8
.8
1.0
4.0
6.2
7.5
9.9
3.9
4.9
4.7
3.9
3.8
4.6
8.6
10.9
11.9
11.6
1. 1
1. 4
1. 6
1. 9
2. 2
2. 5
3. 2
3. 3
3. 4
3.2
37.0
42.9
50.8
58.6
64.3
71.9
82.4
90.5
96.2
94.5
16.6
19.2
23.3
27.4
29.9
33.2
39.0
43.7
46.3
44.8
7.4
8.8
11.0
13.4
14.4
16.5
18.2
18.8
20.1
19.3
2.3
2.6
2.1
1.3
1.6
1.8
3.0
3.6
4.4
5.0
10. 7
12.2
14. 4
16.5
18.4
20.5
22. 1
24.4
25. 4
25. 4
26. 0
28. 1
30.8
34. 2
37. 2
39. 8
45.3
49.8
54.7
57. 6
9.4
10.2
11.0
11.5
12.0
12.5
13.9
15.7
17.5
19.3
4. 0
4. 3
4.8
5.2
5.9
6.4
6. 8
7. 5
8.1
8. 5
2. 1
2. 4
7
4
3. 7
4. 0
5.0
5.3
5. 8
5. 9
10.4
11.2
12.3
14.0
15.6
16.8
19.7
21.4
23.3
23.9
1950
1951
1952....
1953
1954
1955
1956
1957
1958
1959
91. 0
206. 3
216. 7
30.5
29.6
29.3
230.0 33.2
236. 5 32.8
254. 4 39.6
266.7 38.9
281. 4 40.8
290. 1 37.9
311. 2 44.3
13.1
11.6
11.1
14.2
13.6
18.4
16.4
18.3
15.4
19.5
14.1
14.4
14.3
14.9
15.0
16.6
17.5
17.3
17.1
18.9
3. 3
3.6
3.9
4. 1
4.2
4. 6
5. 0
5. 2
5. 4
5.9
98.1
108.8
114.0
116.8
118.3
123.3
129.3
135.6
140.2
146.6
46.0
52.1
54.7
55.5
56.5
58.1
60.4
63.9
66.6
68.4
19.6
21.2
21.9
22.1
22.1
23.1
24.1
24.3
24.7
26.4
5.4
6.1
6.8
7.7
8.2
9.0
9.8
10.6
11.0
11.6
27. 1
29. 3
30. 5
31. 6
31. 5
33. 1
34. 9
36. 7
37 9
40. 2
62.4 21.3
67. 9 23.9
73. 4 26.5
79. 9 29.3
85. 4 31.7
91. 4 33.7
98.5 36.0
105.0 38.5
112. 0 41.1
120. 3 43.7
9. 5
10. 4
11. 1
12.0
12. 6
14.0
15. 2
16. 2
17. 3
18. 5
6. 2
6. 7
7. 1
7. 8
7. 9
8.2
8.6
9. 0
9 3
10 1
25.4
26.9
28.7
30.8
33.2
35.5
38.6
41.3
44.3
48.0
45.3
44.2
49.5
53.9
59.2
66.3
70.5
72.6
82.5
20.1
18.4
22.0
24.3
25.8
30.3
30.4
30.4
36.5
18.9
19.3
20.5
22.2
25.0
26.9
29.8
31.4
34.3
6. 3 151.3
6 5 155.9
6 9 162.6
7. 5 168.6
70.1
72.1
74.4
76.5
80.5
85.8
92.7
94.9
101.3
27.3
27.9
29.6
30.6
33.5
35.9
39.8
42.1
45.8
12.3
12.4
12.9
13.5
14.0
15.3
16.6
18.1
19.8
41. 6 128. 7
43 5 135 1
45 7 143 0
46.3
48.7
52.0
55.4
59.3
63.5
67.3
70.9
76.2
20. 0
20. 8
22. 0
10 8
10.6
11 0
25.6
27.1
29. 0
31. 2
6
15.0
16.6
51.6
54.9
58.0
62.5
68.1
73.8
80.4
88.9
97.0
'5
1
oo
c
o
•I
I
Housi
T3
Gasol ine an
Cloth ing an
-a
1
|
Total perso
i'
03
Other
1929
quarter
Furnit u r e a
hoid equ
Food, exclu dm
hoi ic bev era;
s
Total
ooaa
Autor nobile
5
3
\
Total
or
1
=
ion
Year
Services
Nondurable goods
76.8
325.2
1960
335. 2
1961
1962.... 355. 1
1963.-.. 375. 0
1964..-. 401. 2
432. 8
1965
1966
465. 5
492 2
1967
1968 p . - 533. 7
8. 5
9 1
10 3
10 9
11 7
178.7
191.1
206.7
215.8
230.2
48. 0 152 4
50.6 163 3
54 1 175 5
57. 5 188 3
60 6 203.8
63. 3 221
o
23. 1
24. 3
i
11
11
12
13
4
6
6
Seasonally adjusted annual rates
1 9 6 6 : 1 . . . 457 8
II . 461 1
III. 469 3
IV. 473 7
71.6
68.2
71.0
71.1
31.8
28.9
30.3
30.5
29.3
29.0
30.4
30.4
10 5 202.8
10 3 206.3
10. 3 208.3
10.2 209.3
91.4
93.1
93.3
93.2
39.2
39.4
40.5
40.3
16.0
16.4
16.7
17.1
56.2
57 4
57 8
58 7
183
186
190
193
4
7
0
3
66.0
66.8
67.6
68.8
26
26
27
27
1 9 6 7 : 1 . . . 480 .9
II- 490.3
III. 495 .5
IV. 502 .2
69.8
73.4
73.1
74.2
28.1
31.2
31.0
31.4
31.1
31.2
31.4
31.8
10.6
11.0
10.8
11.1
212.9
215.3
216.4
218.4
94.4
94.4
94.7
96.2
40.9
42.4
42.8
42.3
17.7
17.8
18.3
18.6
59 9
60 7
60.6
61 3
198
201
205
209
2
6
9
6
69.7
70.4
71.2
72.2
519 .4
527 .9
541 .1
546 .3
79.0
81.0
85.1
84.8
33.3
33.9
35.4
34.4
11.1
11.7
11.5
12.3
226.5 98.6
228.2 101.0
232.7 102.2
233.5 103.1
44.6
44.8
47.2
46.5
19.7
19.4
20.0
20.2
63
63
63
63
6 213 9
0 218 7
74.0
75.4
76.9
78.6
1968:L.
II.
III
IV
34.6
35.4
38.1
38.0
1
3 223.4
6 228.0
Quarterly data are estimates by Council of Economic Advisers.
2 Includes standard clothing issued to military personnel.
s Includes imputed rental value of owner-occupied dwellings.
Source: Department of Commerce, Office of Business Economics (except as noted).
239
13 3
13 6
13 6
13 8
77.9
79.4
81.3
82.9
28.1
28 7
29 2
29 9
14
14
15
15
7
8
1
5
85.7
87.7
90.4
92.0
30.3
31 0
31 5
31 9
16 2
16.3
16 8
17 1
93.3
95.9
98.2
100.5
2
9
5
8
TABLE B-1I.—Gross private domestic investment, 1929-68
[Billions of dollars]
Change in
business
inventories
Fixed investment
Year or
quarter
Total
gross
private
domestic
investment
Nonresidential
Structures
Total
Residential structures
Producers'
durable
equipment
Total
Total
Total
Total
Nonfarm
Total
Nonfarm
0.2
Nonfarm
Farm
Nonfarm
1929..
16.2
14.5
10.6
5.0
4.8
5.6
4.9
4.0
3.8
1930..
19311932..
1933..
1934..
1935..
1936..
1937..
1938...
1939...
10.3
5.6
1.0
1.4
3.3
6.4
8.5
11.8
6.5
9.3
10.6
6.8
3.4
3.0
4.1
5.3
7.2
9.2
7.4
8.9
8.3
5.0
2.7
2.4
3.2
4.1
5.6
7.3
5.4
5.9
4.0
2.3
1.2
.9
1.0
1.2
1.6
2.4
1.9
2.0
3.9
2.3
1.2
.9
1.0
1.2
1.6
2.4
1.8
1.9
4.3
2.7
1.5
1.5
2.2
2.9
4.0
4.9
3.5
4.0
3.7
2.4
1.3
1.3
1.8
2.4
3.3
4.1
2.9
3.4
2.3
1.7
.7
.6
.9
2.2
1.6
1.2
1.6
1.9
2.0
2.9
1940...
1941..
1942...
1943...
1944...
1945...
1946...
1947...
1948...
1949...
13.1
17.9
9.8
5.7
7.1
10.6
30.6
34.0
46.0
35.7
11.0
13.4
8.1
6.4
8.1
11.6
24.2
34.4
41.3
38.8
7.5
9.5
6.0
5.0
6.8
10.1
17.0
23.4
26.9
25.1
2.3
2.9
1.9
1.3
1.8
2.8
6.8
7.5
8.8
8.5
2.2
2.8
1.8
1.2
1.7
2.7
6.1
6.7
8.0
7.7
5.3
6.6
4.1
3.7
5.0
7.3
10.2
15.9
18.1
16.6
4.6
5.6
3.5
3.2
4.2
6.3
9.2
14.0
15.5
13.7
1950...
1951...
1952...
1953...
1954...
1955...
1956...
1957...
1958...
1959...
54.1
59.3
51.9
52.6
51.7
67.4
70.0
67.8
60.9
75.3
47.3
49.0
48.8
52.1
53.3
61.4
65.3
66.5
62.4
70.5
27.9
31.8
31.6
34.2
33.6
38.1
43.7
46.4
41.6
45.1
9.2
11.2
11.4
12.7
13.1
14.3
17.2
18.0
16.6
16.7
8.5
10.4
10.5
11.9
12.3
13.6
16.5
17.2
15.8
15.9
18.7
20.7
20.2
21.5
20.6
23.8
26.5
28.4
25.0
28.4
1960...
1961...
1962...
1963—
1964...
1965—
1966...
1967...
1968*..
74.8
71.7
83.0
87.1
94.0
108.1
120.8
114.3
127.5
71.3
69.7
77.0
81.3
88.2
98.5
106.1
108.2
120.0
48.4
47.0
51.7
54.3
61.1
71.3
81.3
83.6
90.0
18.1
18.4
19.2
19.5
21.2
25.5
28.5
27.9
29.2
17.4
17.7
18.5
18.8
20.5
24.9
27.8
27.1
28.4
30.3
28.6
32.5
34.8
39.9
45.8
52.8
55.7
60.8
1.7
1.8
'.S
.8
1.1
1.5
1.8
1.9
2.8
-.4
-1.1
-2.5
-1.6
-.7
1.1
1.3
2.5
-.9
.4
-.1
-1.6
-2.6
-1.4
.2
.4
2.1
1.7
-1.0
.3
3.4
3.9
2.1
1.4
1.3
1.5
7.2
11.1
14.4
13.7
3.2
3.7
1.9
1.2
1.1
1.4
6.7
10.4
13.6
12.8
2.2
4.5
1.8
-.6
-1.0
-1.0
6.4
-.5
4.7
-3.1
1.9
4.0
.7
-.6
-.6
-.6
6.4
1.3
3.0
-2.2
15.7
17.7
17.6
18.6
18.0
21.2
24.2
25.9
22.0
25.4
19.4
17.2
17.2
18.0
19.7
23.3
21.6
20.2
20.8
25.5
18.6
16.4
16.4
17.2
19.0
22.7
20.9
19.5
20.1
24.8
6.8
10.3
3.1
-L5
6.0
4.7
1.3
-1.5
4.8
6.0
9.1
2.1
1.1
-2.1
5.5
5.1
.8
-2.3
4.8
27.7
25.8
29.4
31.2
36.3
41.6
48.1
51.0
55.8
22.8
22.6
25.3
27.0
27.1
27.2
24.8
24.6
30.0
22.2
22.0
24.8
26.4
26.6
26.7
24.3
24.0
29.4
3.6
2.0
6.0
5.9
5.8
9.6
14.7
6.1
7.6
3.3
1.7
5.3
5.1
6.4
8.6
14.9
5.6
7.2
Seasonally adjusted annual rates
116.8
121.0
119.9
125.7
105.9
105.6
107.0
105.9
78.6
79.8
82.6
84.2
28.6
28.1
28.9
28.2
27.9
27.4
28.2
27.5
50.0
51.7
53.7
55.9
45.5
47.2
49.3
50.4
27.3
25.8
24.4
21.7
26.8
25.2
23.9
21.1
0.5
.5
.6
.6
10.9
15.4
12.8
19.8
10.7
15.4
13.3
20.2
II
Ill
IV.....
113.0
107.6
114.7
121.8
104.6
105.4
109.3
113.5
83.5
82.7
83.3
85.0
29.0
27.2
27.7
27.7
28.3
26.4
27.0
26.9
54.5
55.5
55.6
57.3
49.8
50.7
50.9
52.6
21.1
22.7
26.0
28.5
20.5
22.1
25.4
27.9
.6
.6
.6
.6
8.4
2.3
5.3
8.3
8.3
2.2
4.8
7.1
1968: I
II
III.....
119.7
127.3
127.1
136.1
117.6
116.5
119.6
126.0
88.6
87.0
90.1
94.2
29.6
28.5
28.8
29.8
28.8
27.7
28,0
29.0
59.0
58.5.
61.3
64.4
54.3
53.6
56.4
59.0
29.1
29.5
29.5
31.8
28.5
28.9
28.9
31.2
.6
.6
.6
.6
2.1
10.8
7.5
10.0
1.6
10.4
7.3
9.2
1966:
II
III
IV.....
1967: I
Source: Department of Commerce, Office of Business Economics.
24O
TABLE B-12.—National income by type of income, 1929-68
[Billions of dollars]
Compensation of
employees
Year or
quarter
Total
national
income1
Total
Corporate profits
and inventory
valuation
adjustment
Business and professional income
Income Rental
inof
InSupNet
come Inven- farm come
pleof
Corpo- Inven- interproof
Wages ments
tory
tory
est
perrate
prieunin- valuand
to
valusala- wages Total corpo- ation tors 3 sons Total profits ation
before adjustrated adjustries
and
taxes • ment
enter- ment
salaprises
ries 2
1929
86.8
51.1
50.4
0.7
9.0
8.8
0.1
6.2
5.4
10.5
10.0
0.5
1930
1931
1932
1933
1934
1935
1936
1937
1938
1939
75.4
59.7
42.8
40.3
49.5
57.2
65.0
73.6
67.4
72.6
46.8
39.8
31.1
29.5
34.3
37.3
42.9
47.9
45.0
48.1
46.2
39.1
30.5
29.0
33.7
36.7
41.9
46.1
43.0
45.9
.7
.6
.6
.5
.6
.6
1.0
1.8
2.0
2.2
7.6
5.8
3.6
3.3
4.7
5.5
6.7
7.2
6.9
7.4
6.8
5.1
3.3
3.9
4.8
5.5
6.8
7.2
6.7
7.6
4.3
3.4
2.1
2.6
3.0
5.3
4.3
6.0
4.4
4.4
4.8
7.0
3.8
2.0
2.7 - 1 . 3
2.0 - 1 . 2
1.7
1.7
1.7
3.4
1.8
5.6
2.1
6.8
2.6
4.9
2.7
6.3
3.7
-.4
-2.3
1.0
2.3
3.6
6.3
6.8
4.0
7.0
3.3
2.4
1.0
-2.1
-.6
-.2
-.7
1.0
-.7
49
5.0
4.6
4.1
4.1
4.1
3 8
3.7
3.6
3.5
1940
1941
1942
1943
1944
1945
1946
1947
1948
1949
81.1
104.2
137.1
170.3
182.6
181.5
181.9
199.0
224.2
217.5
52.1
64.8
85.3
109.5
121.2
123.1
117.9
128.9
141.1
141.0
49.8
62.1
82.1
105.8
116.7
117.5
112.0
123.0
135.4
134.5
2.3
2.7
3.2
3.8
4.5
5.6
5.9
5.9
5.8
6.5
8.6
11.1
14.0
17.0
18.2
19.2
21.6
20.3
22.7
22.6
8.6
11.7
14.4
17.1
18.3
19.3
23.3
21.8
23.1
22.2
.8
.6
.3
-.5
-.1
*
- . 1*
.2
-.2
*
-.6
-.4
-.2
9.8
15.2
20.3
24.4
23.8
19.2
19.3
25.6
33.0
30.8
10.0
17.7
21.5
25.1
24.1
19.7
24.6
31.5
35.2
28.9
-.2
-2.5
-1.2
-.8
-.3
-.6
-5.3
-5.9
-2.2
1.9
3.3
3.2
3.1
2 7
2.3
2.2
1.5
1.9
1.8
1.9
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
241.1
278.0
291.4
304.7
303.1
331.0
350.8
366.1
367.8
400.0
154.6
180.7
195.3
209.1
208.0
224.5
243.1
256.0
257.8
279.1
146.8
171.1
185.1
198.3
196.5
211.3
227.8
238.7
239.9
258.2
7.8
9.6
10.2
10.9
11.5
13.2
15.2
17.3
17.9
20.9
24.0
26.1
27.1
27.5
27.6
30.3
31.3
32.8
33.2
35.1
25.1
26.5
26.9
27.6
27.6
30.5
31.8
33.1
33.2
35.3
37.7
42.7
39.9
39.6
38.0
46.9
46.1
45.6
41.1
51.7
42.6
43.9
38.9
40.6
38.3
48.6
48.8
47.2
41.4
52.1
-5.0
-1.2
1.0
-1.0
-.3
-1.7
-2.7
-1.5
-.3
-.5
2.0
2.3
2.6
2.8
3.6
4.1
4.6
5.6
6.8
7.1
1960
1961
1962
1963
1964
1965
1966
1967
1968 v
414.5
427.3
457.7
481.9
518.1
564.3
620.8
652.9
712.8
294.2
302.6
323.6
341.0
365.7
393.8
435.6
468.2
513.6
270.8
278.1
296.1
311.1
333.7
358.9
394.6
423.4
463.5
23.4
24.6
27.5
29.9
32.0
35.0
41.1
44.8
50.1
34.2
35.6
37.1
37.9
40.2
42.4
44.8
46.3
47.8
34.3
35.6
37.1
37.9
40.3
42.8
45.1
46.6
48.4
.2
-.1
.3
-.5
-A
-1.7
-1.5
-.4
.5
-1.1
-.3
.2
-.2
-.2
-.5
-.3
-.1
-.1
*
*
*
*
-.1
-.4
-.3
-.3
-.6
4.5
6.4
9.8
11.7
11.6
12.2
14.9
15.2
17.5
12.7
2.9
3.5
4.5
5.1
5.4
5.6
6.6
s!o
IK
4.7
13.5
15.8
15.0
13.0
12.4
11.4
11.4
11.3
13.4
11.4
8.4
9.4
10.3
11.5
12.7
13.6
13.9
14.3
14.8
15.4
15.6
12.0
12.8
13.0
13.1
12.1
14.8
15.9
14.4
15.1
15.8
16.0
16.7
17.1
18.0
19.0
19.8
20.3
21.0
49.9
50.3
55.7
58.9
66.3
76.1
83.9
80.4
89.2
49.7
50.3
55.4
59.4
66.8
77.8
85.6
81.6
92.3
-L7
-1.7
-1.2
-3.1
8.4
10.0
11.6
13.8
15.8
18.2
20.8
23.3
26.3
Seasonally adjusted annual rates
1966: 1 . . .
||
III .
IV..
604.0
615.1
626.7
637.3
420.6
430 8
441.4
449.7
381.0
390 2
399.8
407.2
39.6
40 5
41.5
42.5
44.5
44 7
44.7
45.2
16.9
16.1
15.5
15.1
19.5
19.7
19.9
20.0
82.7
83.4
84.2
85.3
85.2
85.6
86.7
85.0
-2.6
-2.2
-2.5
.3
19.8
20.4
21.1
22.0
1967: L__
II...
III
IV..
638.6
645.1
656 9
670.9
456.7
461.8
471.5
482.7
413.3
417.6
426 3
436.4
43.4
44.2
45 2
46.2
45.7
46.1
46 6
46.8
14.4
14.4
14.6
14.3
20.1
20.2
20.4
20.5
79.5
79.6
80.2
82.3
79.9
80.3
80.8
85.4
-.4
-.7
-.6
-3.1
22.2
22.9
23.6
24.3
688 1
1968' 1
IL.. 705.4
722.5
Ill
IV P.
^96 8
507.1
519.7
530.7
448 3
457.6
469.0
479.0
48 4
49.4
50.7
51.7
47 2
47.8
48.0
48.2
14.6
14.8
15.4
15 5
20.7
20.9
21.0
21 2
83.8
89.2
91.6
88.9
91.8
92.7
-5.1
-2.7
-1.0
-3.7
25.0
25.8
26.7
27.6
1 National income is the total net income earned in production. It differs from gross national product mainly in that it
excludes depreciation charges and other allowances for business and institutional consumption of durable capital goods,
and indirect business taxes. See Table B-13.
2 Employer contributions for social insurance and to private pension, health, and welfare funds; compensation for
injuries; directors' fees; pay of the military reserve; and a few other minor items.
3 Includes change in inventories.
* See Table B-70 for corporate tax liability and profits after taxes.
Source: Department of Commerce, Office of Business Economics.
241
T A B L E B—13/—Relation of gross national product and national income, 1929—68
[Billions of dollars]
Year or quarter
Gross
national
product
Less:
Capital
consumption
allowances
Plus:
Subsidies
Equals:
less
Net
current
national surplus
of govprodernuct
ment
enterprises
Less:
Indirect business taxes
Total
Federal
State
and
local
Business
transfer
payments
Statistical
discrepancy
0.7
Equals:
National
income
1929-
103.1
7.9
95.2
-0.1
7.0
1.2
5.8
0.6
1930..
1931..
1932..
1933..
1934..
1935..
1936..
1937..
19381939..
90.4
75.8
58.0
55.6
65.1
72.2
.5
82.4
68.0
50.7
48.6
58.2
65.4
75.4
83.3
77.4
83.2
-.1
.1
.2
.5
7.2
6.9
6.8
7.1
7.8
8.2
8.7
9.2
9.2
9.4
1.0
.9
.9
1.6
2.2
2.2
2.3
2.4
2.2
2.3
6.1
6.0
5.8
5.4
5.6
6.0
6.4
6.8
6.9
7.0
.5
.6
90.4
84.7
90.5
8.0
7.9
7.4
7.0
6.8
6.9
7.0
7.2
7.3
7.3
1940..
1941..
1942..
1943..
1944..
1945..
1946..
1947..
1948..
1949..
99.7
124.5
157.9
191.6
210.1
211.9
208.5
231.3
257.6
256.5
7.5
8.2
9.8
10.2
11.0
11.3
9.9
12.2
14.5
16.6
92.2
116.3
148.1
181.3
199.1
200.7
198.6
219.1
243.1
239.9
.4
.1
.2
.2
.7
.8
.9
-.2
-.1
-.1
10.0
11.3
11.8
12.7
14.1
15.5
17.1
18.4
20.1
21.3
2.6
3.6
4.0
4.9
6.2
7.1
7.8
7.8
8.0
8.0
7.4
7.7
7.7
7.8
8.0
8.4
9.3
10.6
12.1
13.3
.4
.5
.5
.5
.5
.5
.5
.6
.7
1950..
1951..
1952..
1953..
1954..
1955.
1956.
1957.
1958.
1959.
284.8
328.4
345.5
364.6
364.8
398.0
419.2
441.1
447.3
483.7
18.3
21.2
23.2
25.7
28.2
31.5
34.1
37.1
38.9
41.4
266.4
307.2
322.3
338.9
336.6
366.5
385.2
404.0
408.4
442.3
.2
.2
-. 1
-.4
-.2
-. 1
.8
.9
.9
23.3
25.2
27.6
29.6
29.4
32.1
34.9
37.3
38.5
41.5
8.9
9.4
10.3
10.9
9.7
10.7
11.2
11.8
11.5
12.5
14.5
15.8
17.3
18.7
19.7
21.4
23.6
25.5
27.0
28.9
.9
1.0
1.2
1.1
1.2
1.4
1.5
1.6
1.7
1960.
1961.
1962.
1963.
1964.
1965.
1966.
1967.
1968 *
503.7
520.1
560.3
590.5
632.4
684.9
747.6
789.7
860.7
43.4
45.2
50.0
52.6
56.1
59.8
64.1
69.2
74.3
460.3
474.9
510.4
537.9
576.3
625.1
683.5
720.5
786.4
45.2
47.7
51.5
54.7
58.4
62.5
65.3
69.6
75.8
13.5
13.6
14.6
15.3
16.1
16.5
15.8
16.2
17.6
31.7
34.1
36.9
39.4
42.3
45.9
49.5
53.4
58.2
1.9
2.0
2.1
2.3
2.5
2.7
3.0
3.1
3.3
-1.0
-.8
.5
-.3
-1.3
-3.1
-3.3
-3.5
-4.7
414.5
427.3
457.7
481.9
518.1
564.3
620.8
652.9
712.8
.3
.4
*
.1
.2
1.4
1.4
.8
1.3
1.3
2.3
1.6
'j
.6
.6
.6
.6
.4
.5
.7
.3
.6
.5
-.2
1.2
*
.6
1.3
1.0
.4
-1.1
-2.0
2.5
3.9
.1
.9
-2.0
.3
1.5
3.3
2.2
3.0
2.7
2.1
-1.1
1.6
86.8
75.4
59.7
42.8
40.3
49.5
57.2
65.0
73.6
67.4
72.6
81.1
104.2
137.1
170.3
182.6
181.5
181.9
199.0
224.2
217.5
241.1
278.0
291.4
304.7
303.1
331.0
350.8
366.1
367.8
400.0
Seasonally adjusted annual rate
728.4
740.4
753.3
768.2
62.3
63.5
64.7
65.9
666.1
676.9
688.6
702.4
1.9
2.2
2.8
2.3
62.9
64.9
66.0
67.5
15.2
15.9
16.0
16.1
47.8
49.0
50.0
51.4
2.9
3.0
3.0
3.0
-1.9
-3.9
-4.4
-3.1
604.0
615.1
626.7
637.3
1967: 1
II
III.
IV
772.2
780.2
795.3
811.0
67.1
68.4
70.0
71.1
705.1
711.8
725.3
739.8
1.8
1,6
1.5
1.3
68.0
69.0
70.1
71.2
15.9
16.1
16.3
16.4
52.1
52.8
53.8
54.7
3.1
3.1
3.2
3.2
-2.8
-3.8
-3.4
-4.2
638.6
645.1
656.9
670.9
1968: 1
II
111
831.2
852.9
871.0
887.8
72.3
73.7
74.9
76.2
758.8
779.1
796.1
811.6
.5
.7
1.0
.7
72.8
74.8
76.7
79.0
17.0
17.5
17.8
18.1
55.8
57.3
58.9
60.9
3.2
3.3
3.3
3.3
-4.7
-3.6
-5.3
688.1
705.4
722.5
1966: 1
II
Ill
IV
.
IVP
Source: Department of Commerce, Office of Business Economics.
242
TABLE B-14.—Relation of national income and personal income, 1929-68
[Billions of dollars]
Less:
Year or quarter
National
income
Corporate
profits
and inventory
valuation
adjustment
Plus:
Wage
GovContributions accruals ernment
for
less
transfer
dispayments
social
insurburseto perments
sons
ance
Interest
paid
by
government
(net)
and by
consumers
Equals:
Dividends
Business
transfer
payments
Personal
income
10.5
0.2
0.9
2.5
5.8
0.6
85.9
75.4
59.7
42.8
40.3
49.5
57.2
65.0
73.6
67.4
72.6
7.0
2.0
-1.3
-1.2
1.7
3.4
5.6
6.8
4.9
6.3
.3
.3
.3
.3
.3
.3
.6
1.8
2.0
2.1
1.0
2.1
1.4
1.5
1.6
1.8
2.9
1.9
2.4
2.5
1.8
1.8
1.7
1.6
1.7
1.7
1.7
1.9
1.9
1.9
5.5
4.1
2.5
2.0
2.6
2.8
4.5
4.7
3.2
3.8
.5
.6
77.0
65.9
50.2
47.0
54.0
60.4
68.6
74.1
68.3
72.8
81.1
104.2
137.1
170.3
182.6
181.5
181.9
199.0
224.2
217.5
9.8
15.2
20.3
24.4
23.8
19.2
19.3
25.6
33.0
30.8
2.3
2.8
3.5
4.5
5.2
6.1
6.0
5.7
5.2
5.7
2.7
2.6
2.6
2.5
3.1
5.6
10.8
11.1
10.5
11.6
2.1
2.2
2.2
2.6
3.3
4.2
5.2
5.5
6.1
6.5
4.0
4.4
4.3
4.4
4.6
4.6
5.6
6.3
7.0
7.2
.4
.5
.5
.5
.5
.5
.5
.6
.7
78.3
96.0
122.9
151.3
165.3
171.1
178.7
191.3
210.2
207.2
241.1
278.0
291.4
304.7
303.1
331.0
350.8
366.1
367.8
400.0
37.7
42.7
39.9
39.6
38.0
46.9
46.1
45.6
41.1
51.7
6.9
8.2
8.7
8.8
9.8
11.1
12.6
14.5
14.8
17.6
14.3
11.5
12.0
12.8
14.9
16.1
17.1
19.9
24.1
24.9
7.2
7.6
8.1
9.0
9.5
10.1
11.2
12.0
12.1
13.6
8.8
8.6
8.6
8.9
9.3
10.5
11.3
11.7
11.6
12.6
.8
.9
1.0
1.2
1.1
1.2
1.4
1.5
1.6
1.7
227.6
255.6
272.5
288.2
290.1
310.9
333.0
351.1
361.2
383.5
414.5
427.3
457.7
481.9
518.1
564.3
620.8
652.9
712.8
49.9
50.3
55.7
58.9
66.3
76.1
83.9
80.4
89.2
20.7
21.4
24.0
26.9
27.9
29.6
38.0
41.9
46.9
26.6
30.4
31.2
33.0
34.2
37.2
41.0
48.6
55.3
15.1
15.0
16.1
17.6
19,1
20.5
22.3
23.6
25.9
13.4
13.8
15.2
16.5
17.8
19.8
21.7
22.9
24.6
1.9
2.0
2.1
2.3
2.5
2.7
3.0
3.1
3.3
401.0
416.8
442.6
465.5
497.5
538.9
586.8
628.8
685.8
0.2
-.2
\l
.6
.6
.6
.6
.4
.5
Seasonally adjusted annual rates
1966: I . . .
II..
III.
IV..
604.0
615.1
626.7
637.3
82.7
83.4
84.2
85.3
36.5
37.3
38.7
39.4
39.5
39.0
41.0
44.3
21.5
22.1
22.4
23.1
21. 6
21. 9
21. 9
21. 6
2.9
3.0
3.0
3.0
570.4
580.3
592.1
604.5
1967: I . . .
II..
III.
IV..
638.6
645.1
656.9
670.9
79.5
79.6
80.2
82.3
40.9
41.6
42.1
43.0
47.5
48.3
48.9
49.7
23.4
23.2
23.5
24.2
22. 5
23. 2
23. 5
22. 5
3.1
3.1
3.2
3.2
614.8
621.6
633.7
645.2
1968: I.
688.1
705.4
722.5
83.8
89.2
91.6
45.8
46.5
47.4
47.8
52.5
55.0
56.3
57.5
24.9
25.7
26.2
26.7
23.6
24. 4
25. 2
25. 4
3.2
3.3
3.3
3.3
662.7
678.1
694.3
708. 2
III.
Source: Department of Commerce, Office of Business Economics.
243
TABLE B-15.—Disposition of personal income, 1929-68
Percent of disposable
personal income
Less: Personal outlays
Year or
quarter
Personal
income
Less:
Personal
tax
and
nontax
payments
Equals:
Disposable
personal
income
Total
PerPerEquals:
sonal Interest sonal
Percontransfer sonal
sump- paid by paysaving
contion
ments
expend- sumers to foreigners
itures
Personal
outlays
Consumption
expenditures
Total
Billions of dollars
Personal
saving
Percent
1929..
85.9
2.6
83.3
79.1
77.2
1.5
0.3
4.2
95.0
92.7
5.0
1930..
1931..
1932..
1933..
1934..
1935..
1936..
1937..
1938..
1939..
77.0
65.9
50.2
47.0
54.0
60.4
68.6
74.1
68.3
72.8
2.5
1.9
1.5
1.5
1.6
1.9
2.3
2.9
2.9
2.4
74.5
64.0
48.7
45.5
52.4
58.5
66.3
71.2
65.5
70.3
71.1
61.4
49.3
46.5
52.0
56.4
62.7
67.4
64.8
67.7
69.9
60.5
48.6
45.8
51.3
55.7
61.9
66.5
63.9
66.8
.9
.7
.5
.5
.5
.5
.6
.7
.7
.7
.3
.3
.2
.2
.2
.2
.2
.2
.2
.2
3.4
2.6
-.6
-.9
.4
2.1
3.6
3.8
.7
2.6
95. 4
95. 9
101. 3
102. 0
99. 3
96. 3
94. 6
94. 7
98. 9
96. 3
93.8
94.4
99.8
100.6
98.0
95.2
93.3
93.4
97.6
95.0
4.6
4.1
-1.3
-2.0
1940..
1941..
1942..
1943..
1944..
1945..
1946..
1947..
1948..
1949..
78.3
96.0
122.9
151.3
165.3
171.1
178.7
191.3
210.2
207.2
2.6
3.3
6.0
17.8
18.9
20.9
18.7
21.4
21.1
18.6
75.7
92.7
116.9
133.5
146.3
150.2
160.0
169.8
189.1
188.6
71.8
81.7
89.3
100.1
109.1
120.7
144.8
162.5
175.8
179.2
70.8
80.6
88.5
99.3
108.3
119.7
143.4
160.7
173.6
176.8
.8
.9
.7
.5
.5
.5
.8
1.1
1.5
1.9
.2
.2
.1
.2
.4
.5
.7
.7
.7
.5
3.8
11.0
27.6
33.4
37.3
29.6
15.2
7.3
13.4
9.4
94.9
88.2
76.4
75.0
74. 5
80.3
90. 5
95. 7
92. 9
95. 0
93.6
86.9
75.7
74.4
74.0
79.7
89.6
94.6
91.8
93.8
5.1
11.8
23.6
25.0
25.5
19.7
9.5
4.3
7.1
5.0
1950..
1951..
1952..
1953..
1954..
1955..
1956..
1957..
1958..
1959..
227.6
255.6
272.5
288.2
290.1
310.9
333.0
351.1
361.2
383.5
20.7
29.0
34.1
35.6
32.7
35.5
39.8
42.6
42.3
46.2
206.9
226.6
238.3
252.6
257.4
275.3
293.2
308.5
318.8
337.3
193.9
209.3
220.2
234.3
241.0
259.5
272.6
287.8
296.6
318.3
191.0
206.3
216.7
230.0
236.5
254.4
266.7
281.4
290.1
311.2
2.4
2.7
3.0
3.8
4.0
4.7
5.4
5.8
5.9
6.5
.5
.4
.4
.5
.5
.5
.8
.6
.6
.6
13.1
17.3
18.1
18,3
16.4
15.8
20.6
20.7
22.3
19.1
93.7
92. 4
92. 4
92. 8
93. 6
94. 3
93. 0
93. 3
93. 0
94. 4
92.3
91.0
90.9
91.1
91.9
92.4
91.0
91.2
91.0
92.3
6.3
7.6
7.6
7.2
6.4
5.7
7.0
6.7
7.0
5.6
I960..
1961..
1962..
1963..
1964..
1965..
1966..
1967..
1968i
401.0
416.8
442.6
465.5
497.5
538.9
586.8
628.8
685.8
50.9
52.4
57.4
60.9
59.4
65.7
75.3
82.5
96.9
350.0
364.4
385.3
404.6
438.1
473.2
511.6
546.3
589.0
333.0
343.3
363.7
384.7
411.9
444.8
478.6
506.2
548.1
325.2
335.2
355.1
375.0
401.2
432.8
465.5
492.2
533.7
7.3
7.6
8.1
9.1
10.1
11.3
12.5
13.1
13.7
.5
.5
.5
.6
.6
.7
.6
.8
.7
17.0
21.2
21.6
19.9
26.2
28.4
32.9
40.2
40.8
95.1
94. 2
94.4
95. 1
94. 0
94. 0
93. 6
92. 6
93 1
92.9
92.0
92.2
92.7
91.6
91.5
91.0
90.1
90.6
4.9
5.8
5.6
4.9
6.0
6.0
6.4
7.4
6.9
3^7
5.4
5.3
1.1
3.7
Seasonally adjusted annual rates
1966: I . . .
III.
IV.
1967: I . .
II..
IV..
1968: I . .
II.
570.4
580.3
592.1
604.5
70.4
74.7
76.8
79.2
500.0
505.5
515.4
525.4
470.5
474.2
482.5
487.3
457.8
461.1
469.3
473.7
12.1
12.4
12.6
12.9
0.6
.7
.6
.6
29.5
31.4
32.9
38.1
94
93
93
92
1
8
6
7
91.6
91.2
91.1
90.2
5.9
6.2
6.4
7.3
614.8
621.6
633.7
645.2
80.5
80.1
83.6
85.6
534.2
541.5
550.0
559.6
494.6
504.5
509.5
516.1
480.9
490.3
495.5
502.2
13.0
13.1
13.2
13.3
.7
1.2
.8
.7
39.7
37.0
40.5
43.4
92 6
93 2
92.6
92.2
90.0
90.5
90.1
89.7
7.4
6.8
7.4
7.8
662.7
678.1
694.3
708.2
88.3
91.9
101.6
105.7
574.4
586.3
592.7
602.5
533.5
542.3
555.6
561.1
519.4
527.9
541.1
546.3
13.4
13.6
13.8
14.0
7
'.8
.7
40.8
44.0
37.1
41.4
92 9
92 5
93 7
93.1
90.4
90.0
91.3
90.7
7.1
7.5
6.3
6.9
Source: Department of Commerce, Office of Business Economics.
244
•
7
TABLE B-16.— Total and per capita disposable personal income and personal consumption
expenditures, in current and 1958 prices, 1929-68
Disposable personal income
Year or quarter
Total (billions
of dollars)
Personal consumption expenditures
Per capita
(dollars)
Total (billions
of dollars)
Current
prices
77.2
139.6
634
1,145
121,875
69.9
60.5
48.6
45.8
51.3
55.7
61.9
66.5
63.9
66.8
130.4
126.1
114.8
112.8
118.1
125.5
138.4
143.1
140.2
148.2
567
487
389
364
406
437
483
516
492
510
1,059
1,016
919
897
934
985
1,080
1,110
1,079
1,131
123,188
124,149
124,949
125,690
126,485
127,362
128,181
128,961
129,969
131,028
70.8
80.6
88.5
99.3
108.3
119.7
143.4
160.7
173.6
176.8
155.7
165.4
161.4
165.8
171.4
183.0
203.5
206.3
210.8
216.5
536
604
656
726
782
855
1,014
1,115
1,184
1,185
1,178
1,240
1,197
1,213
1,238
1,308
1,439
1,431
1,438
1,451
132,122
133,402
134,860
136,739
138,397
139,928
141,389
144,126
146,631
149,188
1,646
1,657
1,678
1,726
1,714
1,795
1,839
1,844
1,831
1,881
191.0
206.3
216.7
230.0
236.5
254.4
266.7
281.4
290.1
311.2
230.5
232.8
239.4
250.8
255.7
274.2
281.4
288.2
290.1
307.3
1,259
1,337
1,381
1,441
1,456
1,539
1,585
1,643
1,666
1,758
1,520
1,509
1,525
1,572
1,575
1,659
1,673
1,683
1,666
1,735
151,684
154,287
156,954
159,565
162,391
165,275
168,221
171,274
174,141
177,073
1,883
1,909
1,968
2,013
2,123
2,235
2,332
2,401
2,473
325.2
335.2
355.1
375.0
401.2
432.8
465.5
492.2
533.7
316.1
322.5
338.4
353.3
373.7
397.7
417.8
430.5
450.7
1,800
1,824
1,902
1,980
2,088
2,224
2,364
2,472
2,653
1,749
1,755
1,813
1,865
1,945
2,044
2,122
2,162
2,240
180,684
183,756
186,656
189,417
192.120
194,592
196,920
199.118
201,166
1958
prices
Current
prices
1958
prices
1929.
83.3
150.6
683
1,236
1930.
1931.
1932.
1933.
1934.
1935.
1936.
1937.
1938.
1939.
74.5
64.0
48.7
45.5
52.4
58.5
66.3
71.2
65.5
70.3
139.0
133.7
115.1
112.2
120.4
131.8
148.4
153.1
143.6
155.9
605
516
390
362
414
459
518
552
504
537
1,128
1,077
921
893
952
1,035
1,158
1,187
1,105
1,190
1940
1941
1942
1943
1944
1945
1946
1947
1948
1949
75.7
92.7
116.9
133.5
146.3
150.2
160.0
169.8
189.1
188.6
166.3
190.3
213.4
222.8
231.6
229.7
227.0
218.0
229.8
230.8
573
695
867
976
1,057
1,074
1,132
1,178
1,290
1,264
1,259
1,427
1,582
1,629
1,673
1,642
1,606
1,513
1,567
1,547
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
206.9
226.6
238.3
252.6
257.4
275.3
293.2
308.5
318.8
337.3
249.6
255.7
263.3
275.4
278.3
296.7
309.3
315.8
318.8
333.0
1,364
1,469
1,518
1,583
1,585
1,666
1,743
1,801
1,^31
1,905
1960
1961
1962
1963
1964
1965
1966
1967
1968
350.0
364.4
385.3
404.6
438.1
473.2
511.6
546.3
589.0
340.2
350.7
367.3
381.3
407.9
435.0
459.2
478.0
497.4
1,937
1,983
2,064
2,136
2,280
2,432
2,598
2,744
2,928
1958
prices
Population
(thousands) *
1958
prices
Current
prices
Current
prices
Per capita
(dollars)
Seasonally adjusted annual rates
500.0
505.5
515.4
525.4
454.1
454.6
461.4
466.6
2,550
2,571
2,613
2,656
2,316
2,312
2,340
2,359
457.8
461.1
469.3
473.7
415.7
414.8
420.0
420.6
2,335
2,345
2,380
2,394
2,120
2,110
2,130
2,126
196,096
196,629
197,216
197,834
1967: I...
IIIll
IV.
534.2
541.5
550.0
559.6
471.9
476.3
479.5
483.7
2,693
2,723
2,758
2,798
2,379
2,395
2,404
2,418
480.9
490.3
495.5
502.2
424.8
431.2
431.8
434.1
2,424
2,466
2,485
2,511
2,142
2,168
2,165
2,170
198,356
198,852
199,425
200,006
1968: I...
574.4
586.3
592.7
602.5
491.8
497.1
499.2
501.6
2,866
2,918
2,942
2,982
2,454
2,474
2,478
2,483
519.4
527.9
541.1
546.3
444.9
447.5
455.7
454.8
2,591
2,628
2,686
2,704
2,220
2,227
2,262
2,251
200,433
200,911
201,462
202,025
1966: I.
III.
IV.
IV p.
1
Population of the United States including Armed Forces overseas. Annual data are for July 1; quarterly data are for
middle of period, interpolated from monthly data.
Sources: Department of Commerce (Office of Business Economics and Bureau of the Census) and Council of Economic
Advisers.
245
TABLE B-17.—Sources of personal income, 1929-68
[Billions of dollars]
Wage and salary disbursements *
Year or quarter
Total
personal
ncome
Propru
inco
CommoditypiUUUUHIg
industries
lotai
Total
Manufacturing
Distrib- Service
utive
indus- industries
tries
ernment
Gov-
Other
labor
income 1
Business
and
professional
1929..
85.9
50.4
21.5
16.1
15.6
8.4
4.9
0.6
9.0
1930..
1931..
1932..
1933..
1934..
1935..
1936..
1937..
1938..
1939..
77.0
65.9
50.2
47.0
54.0
60.4
68.6
74.1
68.3
72.8
46.2
39.1
30.5
29.0
33.7
36.7
41.9
46.1
43.0
45.9
18.5
14.3
9.9
9.8
12.1
13.5
15.8
18.4
15.3
17.4
13.8
10.8
7.7
7.8
9.6
10.8
12.4
14.6
11.8
13.6
14.5
12.5
9.8
8.8
9.9
10.7
11.8
13.2
12.6
13,3
8.0
7.1
5.8
5.2
5.7
5.9
6.5
7.1
6.8
7.1
5.2
5.3
5.0
5.1
6.1
6.5
7.9
7.5
8.2
8.2
.6
.5
.5
.4
.4
.5
.6
.6
.6
.6
7.6
5.8
3.6
3.3
4.7
5.5
6.7
7.2
6.9
7.4
1940..
1941..
1942.
1943..
1944.
1945..
1946..
1947..
1948.
1949.
78.3
96.0
122.9
151.3
165.3
171.1
178.7
191.3
210.2
207.2
49.8
62.1
82.1
105.6
116.9
117.5
112.0
123.0
135.3
134.6
19.7
27.5
39.1
48.9
50.3
45.8
46.0
54.3
61.0
57.7
15.6
21.7
30.9
40.9
42.9
38.2
36.5
42.5
47.2
44.7
14.2
16.3
18.0
20.1
22.7
24.8
31.0
35.2
37.6
37.7
7.5
8.1
9.0
9.9
10.9
12.0
14.4
16.1
17.9
18.6
8.4
10.2
16.0
26.6
33.0
34.9
20.7
17.4
18.9
20.6
.7
.7
.9
1.1
1.5
1.8
1.9
2.3
2.7
3.0
8.6
11.1
14.0
17.0
18.2
19.2
21.6
20.3
22.7
22.6
1950.
1951.
1952.
1953.
1954.
1955.
1956.
1957.
1958.
1959.
227.6
255.6
272.5
288.2
290.1
310.9
333.0
35L1
361.2
383.5
146.7
171.0
185.1
198.3
196.5
211.3
227.8
238.7
239.9
258.2
64.6
76.1
81.8
89.4
85.4
92.8
100.2
103.8
99.7
109.1
50.3
59.4
64.2
71.2
67.6
73.9
79.5
82.5
78.7
86.9
39.9
44.3
46.9
49.8
50.2
53.4
57.7
60.5
60.8
64.8
19.9
21.7
23.3
25.1
26.4
28.9
31.6
33.9
35.9
38.7
22.4
28.9
33,1
34.1
34.6
36.2
38.3
40.4
43.5
45.6
3.8
4.8
5.3
6.0
6.3
7.3
8.4
9.5
9.9
11.3
24.0
26.1
27.1
27.5
27.6
30.3
31.3
32.8
33.2
35.1
1960.
1961.
1962.
1963.
1964.
1965.
1966.
1967.
1968 v
401.0
416.8
442.6
465.5
497.5
538.9
586.8
628.8
685.8
270.8
278.1
296.1
311.1
333.7
358.9
394.6
423.4
463.5
112.5
112.8
120.8
125.7
134.1
144.5
159.4
166.6
180.5
89.7
89.8
96.7
100.6
107.2
115.6
128.0
134.1
145.4
68.1
69.1
72.5
76.0
81.2
86.9
93.9
100.5
109.4
41.5
44.0
46.8
49.9
54.1
58.3
63.6
70.0
77.2
48.7
52.2
56.0
59.5
64.3
69.3
77.7
86.3
96.3
12.0
12.7
13.9
14.9
16.6
18.7
20.8
23.3
26.1
34.2
35.6
37.1
37.9
40.2
42.4
44.8
46.3
47.8
Seasonally adjusted annual rates
1966: I
IL.
III.
IV..
570.4
580.3
592.1
604.5
381.0
390.2
399.8
407.2
154.2
158.2
161.1
163.9
123.2
127.0
129.7
132.2
91.0
92.9
95.0
96.5
61.5
62.9
64.7
65.6
74.3
76.2
79.1
81.2
20.0
20.5
21.1
21.7
44.5
44.7
44.7
45.2
1967: I.
614.8
621.6
633.7
645.2
413.3
417.6
426.3
436.4
164.7
164.1
167.1
170.5
132.5
132.3
134.6
137.1
98.1
99.6
101.4
103.1
67.5
69.1
70.8
72.4
83.1
84.7
86.9
90.4
22.3
22.9
23.7
24.2
45.7
46.1
46.6
46.8
1968: I..
II.
662.7
678.1
694.3
708.2
448.3
457.6
469.0
479.0
175.6
178.6
181.6
186.1
141.2
143.8
146.7
149.7
105.6
108.0
111.1
113.1
74.5
76.2
78.2
79.9
92.6
94.8
98.1
99.9
25.0
25.7
26.5
27.3
47.2
47.8
48.0
48.2
See footnotes at end of table.
246
Farm 2
TABLE B-17.—Sources of personal income, 1929-68—Continued
[Billions of dollars]
Transfer payments
Year or
quarter
Rental
nit#i
ncome UIVIof per- dends
sons
Personal
interest
income
Old-age,
survivors,
disability,
Total and health
insurance
benefits
State
unemployment insurance
benefits
Veterans'
benefits
Less:
Personal
contributions
Other for social
insurance
Nonagricultural
personal
income3
1929..
5.4
5.8
7.2
1.5
0.6
0.9
0.1
77.6
1930..
1931..
1932..
1933..
1934..
1935..
1936..
1937..
1938..
1939..
4.8
3.8
2.7
2.0
1.7
1.7
1.8
2.1
2.6
2.7
5.5
4.1
2.5
2.0
2.6
2.8
4.5
4.7
3.2
3.8
6.8
6.7
6.3
5.7
5.8
5.7
5.5
5.6
5.5
5.5
1.5
2.7
2.2
2.1
2.2
2.4
3.5
2.4
2.8
3.0
*
0.4
.4
.9
L.I
L.4
L.6
L.8
1.9
L.6
1.8
1.9
2.0
.1
.2
.2
.2
.2
.2
.2
.6
.6
.6
70.8
60.8
46.7
43.2
49.8
53.9
63.0
66.7
62.6
66.9
1940..
1941..
1942..
1943..
1944..
1945..
1946..
1947..
1948..
1949..
2.9
3.5
4.5
5.1
5.4
5.6
6.6
7.1
8.0
8.4
4.0
4.4
4.3
4.4
4.6
4.6
5.6
6.3
7.0
7.2
5.4
5.5
5.3
5.3
5.6
6.3
6.8
7.5
7.9
8.5
3.1
3.1
3.1
3.0
3.6
6.2
11.3
11.7
11.2
12.4
*
*
0.1
.1
.2
.2
.3
.4
.5
.6
.7
.6
1.6
.8
.5
.4
.5
1.9
.6
.5
.5
.5
.3
.3
.1
.1
.4
1.1
.8
.8
1.7
.5
.5
.5
.5
.9
2.8
6.7
6.7
5.8
5.1
2.0
2.2
2.2
2.2
2.4
2.7
3.1
3.7
4.1
4.9
.7
.8
1.2
1.8
2.2
2.3
2.0
2.1
2.2
2.2
72.3
87.8
111.0
137.3
151.2
156.4
161.0
173.0
189.4
191.3
1950..
1951..
1952..
1953..
1954..
1955..
1956..
1957..
1958..
1959..
9.4
10.3
11.5
12.7
13.6
13.9
14.3
14.8
15.4
15.6
8.8
8.6
8.6
8.9
9.3
10.5
11.3
11.7
11.6
12.6
9.2
9.9
10.6
11.8
13.1
14.2
15.7
17.6
18.9
20.7
15.1
12.5
13.0
14.0
16.0
17.3
18.5
21.4
25.7
26.6
1.0
1.9
2.2
3.0
3.6
4.9
5.7
7.3
8.5
10.2
1.4
.8
1.0
1.0
2.0
1.4
1.4
1.8
3.9
2.5
4.9
3.9
3.9
3.7
3.9
4.3
4.3
4.4
4.6
4.6
7.9
5.9
6.0
6.3
6.5
6.8
7.2
7.9
8.7
9.4
2.9
3.4
3.8
4.0
4.6
5.2
5.8
6.7
6.9
7.9
210.9
236.4
254.1
271.9
274.7
296.4
318.5
336.6
344.3
368.5
I960..
1961..
1962..
1963..
1964..
1965..
1966..
1967..
1968 p.
15.8
16.0
16.7
17.1
18.0
19.0
19.8
20.3
21.0
13.4
13.8
15.2
16.5
17.8
19.8
21.7
22.9
24.6
23.4
25.0
27.7
31.4
34.9
38.7
43.1
46.8
52.1
28.5
32.4
33.3
35.3
36.7
39.9
43.9
51.7
58.6
11.1
12.6
14.3
15.2
16.0
18.1
20.8
25.7
30.3
2.8
4.0
2.9
2.8
2.6
2.2
1.8
2.1
2.0
4.6
4.8
4.8
5.0
5.3
5.6
5.7
6.6
7.2
10.0
10.9
11.2
12.2
12.9
14.0
15.6
17.3
19.1
9.3
9.6
10.3
11.8
12.5
13.4
17.8
20.4
22.9
385.2
400.0
425.5
448.1
480.9
519.5
566.1
609.3
665.4
*
Seasonally adjusted annual rates
IILIIII
IV
1967: 1
II
111
IV
1968: 1
Ill
IV x
>
19.5
19.7
19.9
20.0
21.6
21.9
21.9
21.6
41.3
42.4
43.4
45.1
42.4
42.0
44.0
47.3
19.4
19.6
21.0
23.2
2.0
1.6
1.8
1.8
5.9
5.4
5.3
6.3
15.2
15.4
15.8
16.0
16.9
17.3
18.3
18.6
548.8
559.4
571.8
584.5
20.1
20.2
20.4
20.5
22.5
23.2
23.5
22.5
45.6
46.1
47.2
48.5
50.5
51.4
52.1
52.9
24.5
25.8
26.0
26.4
2.1
2.1
2.2
2.0
6.5
6.6
6.5
6.8
17.5
16.9
17.3
17.7
19.7
20.3
20.6
20.9
595.3
602.3
614.0
625.7
20.7
20.9
21.0
21.2
23.6
24.4
25.2
25.4
49.8
51.4
52.9
54.3
55.7
58.3
59.5
60.8
28.2
30.5
30.9
31.6
2.2
1.9
2.1
2.0
7.0
7.1
7.2
7.4
18.4
18.8
19.3
19.8
22.3
22.8
23.2
23.4
642.7
658.0
673.5
687.2
1 The total of wage and salary disbursements and other labor income differs from compensation of employees in
Table B-12 in that it excludes employer contributions for social insurance and the excess of wage accruals over
wage disbursements.
2
Includes change in inventories.
3 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.
Source: Department of Commerce, Office of Business Economics.
247
TABLE B-18.—Sources and uses of gross saving, 1929-68
[Billions of dollars]
Gross private saving and government surplus or deficit,
national income and product accounts
Government surplus
or deficit ( - )
Private saving
Year or quarter
Total
Gross investment
Total
Personal
saving
Gross
business
saving
Total
Federal
State
and
local
-0.2
Total
Gross
private
domestic investment
Net
foreign
investment 1
Statistical
discrepancy
1929
16.3
15.3
4.2
11.2
1.0
1.2
17.0
16.2
08
07
1930
1931
1932
1933
1934
1935
1936
1937
1938
1939
11.8
5.1
.8
.9
3.2
6.6
7.2
11.9
7.0
8.8
12.1
8.0
2.5
2.3
5.6
8.6
10.3
11.5
8.7
11.0
3.4
2.6
-.6
-.9
.4
2.1
3.6
3.8
.7
2.6
8.6
5.3
3.2
3.2
5.2
6.4
6.7
7.7
8.0
8.4
—.3
-2.9
-1.8
-1.4
-2.4
-2.0
-3.1
.3
-1.8
-2.2
.3
-2.1
-1.5
-1.3
-2.9
-2.6
-3.6
-.4
-2.1
-2.2
-.6
-.8
— 3
-.1
.5
.6
.5
.7
.4
(2)
11 0
58
1.1
1.6
3.8
64
8.4
11.8
7.6
10.2
10 3
5 6
1.0
1.4
3.3
64
8.5
11.8
6.5
9.3
7
.2
.2
—.1
-.1
.1
1.1
.9
— 8
7
3
.6
.5
_ 2
1.2
1940
1941
1942
1943
1944
1945
1946
1947
1948 . .
1949
13.6
18.6
10.7
5.5
2.5
5.2
35.1
42.0
49.9
35.9
14.3
22.4
42.0
49.7
54.3
44.7
29.7
27.5
41.4
39.0
3.8
11.0
27.6
33.4
37.3
29.6
15.2
7.3
13.4
9.4
10.5
11.4
14.5
16.3
17.1
15 1
14.5
20.2
28.0
29.7
-.7
-3.8
-31.4
-44.1
-51.8
-39.5
5.4
14.4
8.5
-3.2
-1.3
-5.1
-33.1
-46.6
-54.5
-42.1
3.5
13.4
8.4
-2.4
.6
1.3
1.8
2.5
2.7
2.6
1.9
1.0
.1
-.7
14.6
19.0
9.6
3.5
5.0
9.1
35.2
42.9
47.9
36.2
13.1
17.9
9.8
5.7
7.1
10.6
30.6
34.0
46.0
35.7
1.5
1.1
2
-2.2
-2.1
-1.4
4.6
8.9
1.9
.5
1.0
.4
-1.1
-2.0
2.5
3 9
50.4
56.1
49.5
47.5
48.5
64.8
72.7
71.2
59.2
73.8
42.5
50.3
53 3
54.4
55.6
62.1
67.8
70.5
71.7
75.9
13.1
17.3
18.1
18.3
16.4
15.8
20.6
20.7
22.3
19.1
29.4
7.8
9.1
6.2
5.8
33.1
35 1 - 3 . 8 - 3 . 8
36.1 - 6 . 9 - 7 . 0
39.2 - 7 . 0 - 5 . 9
46.3
2.7
4.0
47.3
4.9
5.7
.7
2.1
49.8
49.4 - 1 2 . 5 - 1 0 . 2
56.8 - 2 . 1 - 1 . 2
-1.2
-.4
1
-1.1
-1.3
-.9
-1.4
-2.3
-.8
51.8
59.5
51.6
50.5
51.3
66.9
71.6
71.2
60.7
73.0
54.1
59.3
51.9
52.6
51.7
67.4
70.0
67.8
60.9
75.3
-2.2
.2
-.3
-2.1
-.5
1.5
3.4
-.2
-2.3
1.5
3.3
2.2
3.0
2.7
2.1
-1.1
*
1.6
-.8
77.5
75.5
85.0
90.5
101.0
115.3
126.3
119.5
132.0
73.9
79.8
87.9
88.7
102.4
113.1
124.6
133.3
138.4
17.0
21.2
21.6
19.9
26.2
28.4
32.9
40.2
40.8
3.5
56.8
3.7
58.7 - 4 . 3 - 3 . 8
66.3 - 2 . 9 - 3 . 8
68.8
1.8
.7
76.2 - 1 . 4 - 3 . 0
84.7
2.2
1.2
91.6
1.7
.7
93.1 - 1 3 . 8 - 1 2 . 4
97.5 - 6 . 4 - 5 . 3
.2
-.5
.9
1.2
1.7
1.0
1.1
-1.4
-1.1
76.5
74.7
85.5
90.3
99.7
112.2
123.0
116.0
127.2
74.8
71.7
83.0
87.1
94.0
108.1
120.8
114.3
127.5
1.7
3.0
2.5
3.1
5.7
4.1
2.2
1.7
-.3
-1.0
-.8
.5
-.3
-1.3
-3.1
-3.3
-3.5
-4.7
.
.
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
I960
1961
1962
1963
1964
1965
1966
1967
1968*
(3)
'A
.6
1.3
.1
.9
-2.0
.3
Seasonally adjusted annual rates
1966: 1.
II
Ill
IV
121.4
127.1
126.0
130.7
118.4
121.8
124.8
133.3
29.5
31.4
32.9
38.1
88.9
90.4
91.9
95.3
3.0
5.3
1.2
-2.6
2.0
3.7
-.3
-2.8
1.0
1.6
1.5
.2
119.4
123.3
121.6
127.6
116.8
121.0
119.9
125.7
2.7
2.3
1.7
1.9
-1.9
-3.9
-4.4
-3.1
1967: 1
II
III
IV
118.0
113.0
120.1
126.8
130.9
128.9
134.1
139.4
39.7
37.0
40.5
43.4
91.3
91.9
93.5
95.9
-12.9
-15.9
-14.0
-12.5
-11.2
-13.3
-12.9
-12.2
-1.7
-2.6
-1.1
-.4
115.2
109.3
116.7
122.6
113.0
107.6
114.7
121.8
2.3
1.6
2.1
.8
-2.8
-3.8
-3.4
-4.2
1968: 1 . . .
II
Ill
123.4
130.1
132.9
133.6
141.4
137.0
40.8
44.0
37.1
41.4
92.8 - 1 0 . 3 - 8 . 6
97.4 - 1 1 . 3 - 1 0 . 2
99.9 - 4 . 1 - 2 . 8
-1.7
-1.1
-1.3
118.7
126.5
127.5
136.3
119.7
127.3
127.1
136.1
-1.1
-.8
.5
.2
-4.7
-3.6
-5.3
IVP
* Net exports of goods and services less net transfers to foreigners.
2 Surplus of $32 million.
3 Deficit of $41 million.
Source: Department of Commerce, Office of Business Economics.
248
TABLE B-19.—Saving by individuals, 7946-68 l
[Billions of dollars]
Increase in financial assets
Year or
quarter
Currency
and
Total 2 demand
deposits
Tota
Securitie >
nsurance
Mortand
SavCon- Other gage
Corpopen- Non- sumer tanings
debt Con- Other
Govrate Corpo- sion
acfarm
on sumer debts
dugible
and
re- homes rables assets7 non- credit
ounts ernrate
ment for- stock s serves
farm
bonds* eign
homes
bonds
1946
1947
1948
1949
24. 4
20.
23. 3
18 7
17.5
12.6
8.6
9.3
4.8
-1.1
-1.1
-1.5
6.3
3.4
2.3
2.6
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
?fi 8
?9 8
24. 8
12.9
17.2
20 5
20.6
19.4
25.0
26 7
27.0
29.7
31.4
1.8
4.4
1.7
2.5
4.5
7.7
.4
1.8
.8
8.3
9.2
8.8
1960
1961
1962
1963
1964
1965
1966
1967
23. 9
28. 0
33 8
1966' 1
14 6
28
n
28.2
24.6
30.1
32 1
31 7
29. 9
?8 8
34 6
41 9
47 4
48 6
54 9
III..
IV..
11 7
19 7
1.2
-.5
3.3
.2
24.6
31.9
38.0
43.2
51.1
55.0
51.6
63.5
-1.6
.9
2.8
12.0
10.3
13.3
16.1
-2 4
-1.5
1.1
4.7
4.1
6.6
7.2
1.9
12.5
1967: 1...
II...
III..
IV..
15.0
5.7
13.5
20.8
13.0
11.1
17.4
22.0
1.9
1.7
2.7
6.2
1968: 1...
II...
III..
14 9
8 1
13.6
12.0
16.4
18.5
-4.1
3.6
4.7
Less Increase in
debt
Net investment in
9.5
12.1
14.0
11.4
12.4
17.4
23 4
23.0
23.9
26.5
19.2
32.4
-1.5 -0.9
2.2
-.8
1. 2 - . 2
1. 6 - . 5
1. 1
1 1
1. 0
7
5.4
5.5
5.4
5.6
4. 8
7 9
11. 2
10. 1
5.8
7.5
7.1
7.0
2.7
2 2
6. 7
1 4
4.1
4 7
4.9
4 2
2.7
3 2
2.8
2 9
-0.4
2 3
2.5
2 1
-.9
-.2
7
16
15
6.9
6.3
7.4
15 ?
13 9
13. 4
10.2
49
4?
19
7.5
6.8
7.0
4 1
14.0
14.8
18.4
6.4
4.9
9.9
5 9
1.2
4.8
4.9
3.0
2.9
1. 1
1. 6
? 7
7.6
9.0
12.3
11 0
8 8
9 5
13.0
3.9
1.1
6 4
3 5
2 6
2.4
6.0
7.2
4 3
5 0
6 8
6 4
8.5
10.9
11.3
12 9
15 0
15.8
16.1
11 4
10.9
4.5
1.7
5 5
7 3
8.0
9.4
6 9
4.4
7.0
8.6
10 1
13 8
13.7
15.7
15 0
18.6
8
3 0
1.6
3.1
1 8
9 9
3.4
-.4
1
6
8
2 0
6
4 ?
2
2
-1
6
7
0
7
7
-.2
-.4
.9
.7
.8
.9
*
9
r 71
2.
7.5
7.5
8.1
9.4
1. n 9.3
8
1 5 10.2
7 11.2
4 1
5 0
10 ?
*
3
-.4
4
- . 7 -1 8
-1.0 -2 6
1
-.8
- . 3 -1 7
1.2
8
1.6 - 4 1
11.3
12.0
12.5
14.1
15.5
16.5
17.9
19.0
12
6
8
4?
16. 7
14.
14. 1
5.5
3.6
18.2
4.9
.6
5.5
1
17
8
14
15. 7
14 2
15. 8
5.1
2.9
6 7
8.9
8
6
18
2 1
16.2
15.8
14.1
11.2
14.8
14.9
12.1
1 0
3 1
1
9
16. 3
12 5
8
2
5 7
5.0
37
11
.7
.4
4
4
4.3
4.5
34
3
2 6
3.4
5.1
3 0
2 5
1.0
-.9
2
-1 5
4.3
4.6
4 0
3 3
2.6
6.0
5
4
3 3
3 2
2.6
2.5
c
6
-.*3 - 2
1.9
8
.4
7
.1
1 1
1.2 - 1 1
.8 - 1 1
4.4
5.2
4.7
5.0
2.1
2.3
3.8
4.3
.8
3.7
2.2
5.4
2
7
1
3
1.9 - 2 . 3
1.9
2.3
3.3
1.1
3.8
3.3
1.6
8.0
5.6
3.5
4.8
5.5
4.5
3 8
4 0
4 6
1.6
4.7
4.1
1
10
3.7 - 1 . 4
3.6
3.6
4.2
3.3
.3
10.8
5.7
9.0 - 1 7
9.9 - 3 8
7
7.8
4 0
5.6
8.1
5.0
6.2
19
1 7
2 6
o
3.8
1
4
-
1 Individuals' saving, in addition to personal holdings, covers saving of unincorporated business, trust funds, and
nonprofit institutions in the forms specified.
2 Includes miscellaneous financial assets, not shown separately.
3
Includes shares in savings and loan associations and credit unions and time deposits at banks.
4
U.S. Government and State and local obligations.
s Includes investment company shares.
6
Private insurance reserves, private insured and noninsured pension reserves, and government insurance and pension
reserves.
7
Noncorporate business investments.
s Security credit, policy loans, and noncorporate business debt.
Note.—In addition to the concept of saving shown above, there are other concepts of individuals' saving, with varying
degrees of coverage, currently in use. The personal saving estimates of the Department of Commerce are dehved as the
difference between personal i ncome (after taxes) and personal outlays. For a reconciliation of the two series, see Securities
and Exchange Commission "Statistical Bulletin," August 1968, and "Survey of Current Business," July 1968.
These estimates are compatible with the flow-of-funds system of accounts of the Board of Governors of the Federal
Reserve System. A reconciliation of these estimates with the flow-of-funds accounts will be available in the near future.
Source: Securities and Exchange Commission.
249
TABLE B-20.—Number and money income {in 1967 prices) of families and unrelated individuals,
by color of head, 1947-67
Total
Year
White
With incomes
Total
under $3,000
number Median Num(mil- income ber
Perlions)
(mil- cent
lions)
Families:»
1947
1948
1949
37.2
38.6
39.3
$4,531
4,418
4,348
10.2
11.0
11.8
27.4
28.5
29.9
1950
1951
1952
1953
1954
1955
1956 .
1957
1958
1959 .
39.9
40.6
40.8
41.2
42.0
42.9
43.5
43.7
44.2
45.1
4,611
4,767
4,893
5,314
5,188
5,531
5,882
5,889
5,871
6,210
11.1
10.4
10.0
9.5
10.3
9.4
8.7
8.9
9.0
8.6
27.8
25.7
24.5
23.0
24.5
22.0
20.0
20.4
20.4
19.1
1960
1961 ..
1962
1963
1964
1965 .
1966
45.5
46.3
47.0
47.4
47.8
48.3
48.9
6,350
6,418
6,587
6,822
7,073
7,357
7,651
8.6
8.7
8.3
7.9
7.5
7.1
6.7
1966 2
1967 2
49.1
49.8
7,716
7,974
6.6
6.2
Total
number Median
(mil- income
lions)
34.1
35.3
4,796
4,960
5,183
5,520
5,415
5,766
6,145
6,130
6,122
6,473
18.9
18.7
17.7
16.7
15.7
14.8
13.7
41.1
41.9
42.4
42.7
43.1
43.5
44.0
13.4
12.5
44.1
44.8
With incomes
under $1,500
Total
number Median Num(mil- income ber
Perlions)
(mil- cent
lions)
8.2
8.4
9 0
$1,467
1,423
1,482
4.2
4.4
4.5
50.8
52.3
50.5
1950
1951
1952
1953
1954
1955
1956
1957...
1958
1959
9 4
91
9.7
95
97
99
9.8
10.4
10.9
10 9
1.472
I 535
U 787
756
,519
1,655
1,766
1,818
,777
I 821
4.8
45
4.3
4 4
4.8
4.7
4.4
4.6
4.9
4.8
50.8
49 6
44.8
46 2
49.6
47.1
45.2
44.2
45.0
44.0
1960
1961
1962
1963
1964
1965. _
1966
11 1
11.2
11.0
11.2
12.1
12.1
12.4
I 954
1,963
1.946
l! 969
2,144
2,289
2,340
47
4.6
4.5
4.5
4.7
4.3
4.4
13.1
2,391
4.5
1967
2
8.3
9.0
24.1
25.4
26 9
8.4
7.5
6.8
7.0
7.1
6.7
25.0
22.6
21.3
20.5
21.8
19.4
17.3
17.6
17.6
16.4
6,601
6,701
6,887
7,146
7,388
7,670
7,944
6.8
6.8
6.5
6.0
5.8
5.5
5.3
8,018
8,274
5.1
4.8
3.1
3.3
$2,418
2,453
2 315
1.9
2.0
62.4
60.5
63 1
3.8
3.9
4.0
4.0
4.0
4.2
2,591
2,61b
2,941
3,093
3,003
3,185
3,241
3,278
3,134
3,336
1.9
1.9
1.9
1.9
1.9
1.9
57.7
57.0
51.1
48.5
50.1
47.5
46.5
46.7
48 3
45.6
16.4
16.2
15.3
14.3
13.7
12.8
11.9
4.3
4.5
4.6
4.8
4.8
4.8
4.9
3,644
3, 563
3,680
3,797
4,133
4,256
4,749
1.8
1.9
1.8
1.9
1.7
1.6
1.4
42.0
42.8
40.0
39.2
34.4
33.0
29.2
11.6
10.8
5.0
5.0
4,778
5,141
1.5
1.4
29.2
27.1
Nonwhite
White
Total
Unrelated individuals:3
1947
1948
1949
With incomes
With incomes
under $3,000 Total
under $3,000
number Median NumNumPer- (mil- income ber
ber
Per(mil- cent lions)
(mil- cent
lions)
lions)
$4,720
4,597
4,527
38.2
39.0
39.5
39.7
40.2
40.9
Nonwhite
With incomes
With incomes
under $1,500 Total
under $1,500
Total
numnumber Median Number Median Num(mil- income ber
Per- (mil- income ber
Perlions)
(mil- cent lions)
(mil- cent
lions)
lions)
7.2
7.3
$1,546
1,474
J,589
3.6
3.7
49.3
50.7
48.6
1.0
1.1
$1,119
1,107
1,165
.9
.8
.7
.8
.9
.9
1^769
1,781
.8
.9
.8
.8
.8
.8
.7
56.6
55 6
53.7
52.5
48.7
44.8
44.9
1,834
.8
43.7
3.9
3.9
3.7
3.8
4.0
3.9
15
1.4
1.3
1.5
1.6
1.6
2,098
2,113
2,083
2,071
2,261
2,383
2,430
3.9
3.7
3.7
3.7
3.9
3.5
3.7
40.1
39.1
33.4
38.2
37.1
34.2
34.0
1.5
1.6
1.5
1.5
1.6
1.7
1.6
,?7fi
1,316
391
,416
2,431
3.7
33.2
1.8
8 2
8.5
8.5
8.9
9.2
9.3
42.3
41.4
40.6
40.1
38.8
35.7
35.3
9.6
9.6
9.5
9.7
10.4
10.5
10.8
34.6
11.3
61.6
63.2
61.3
60.1
55 9
55.3
51.2
60.8
58.7
52.2
55 9
56. 7
55.6
49.4
48 4
43.0
45 1
47.6
45.2
44.3
42.3
43.3
42.1
1,546
1,618
1,922
1,854
1,643
1,769
1,819
1,918
1,877
1,924
0.6
.7
1,147
1,256
1,335
J.460
,133
l|414
1,307
?93
,?97
!The term "family" refers to a group of two or more persons related by blood, marriage, or adoption and residing
together; all such persons are considered members of the same family.
2
Based on revised methodology.
3
The term "unrelated individuals" refers to persons 14 years of age and over (other than inmates of institutions) who
are not living with any relatives.
Source: Department of Commerce, Bureau of the Census.
25O
POPULATION, EMPLOYMENT, WAGES, AND
PRODUCTIVITY
TABLE B-21.—Population by age groups: Estimates, 1929-68, and projections, 1970-85
[Thousands of persons]
Age (years)
July 1
Total
Under 5
5-13
20-24
14-19
25-44
45-64
65 and
over
Estimates:
1929..
121,767
11,734
22,131
13,796
10,694
35,862
21,076
6,474
1930..
1931..
1932..
1933..
1934..
123,077
124,040
124,840
125,579
126,374
11,372
11,179
10,903
10,612
10,331
22,266
22,263
22,238
22,129
21,964
13,937
13,980
14,015
14,070
14,163
10,915
11,003
11,077
11,152
11,238
36,309
36,654
36,988
37,319
37,662
21,573
22,031
22,473
22,933
23,435
6,705
6,928
7,147
7,363
7,582
1935..
1936..
1937..
1938..
1939..
127,250
128,053
128,825
129,825
130,880
10,170
10,044
10,009
10,176
10,418
21,730
21,434
21,082
20,668
20,253
14,296
14,442
14,558
14,680
14,748
11,317
11,375
11,411
11,453
11,519
37,987
38,288
38,589
38,954
39,354
23,947
24,444
24,917
25,387
25,823
7,804
8,027
8,258
8,508
8,764
1940..
1941..
1942..
1943..
1944..
132,122
133,402
134,860
136,739
138,397
10,579
10,850
11,301
12,016
12,524
19,936
19,674
19,427
19,319
19,246
14,770
14,682
14,534
14,381
14.264
11,690
11,807
11,955
12,064
12,062
39,868
40,383
40,861
41,420
42,016
26,249
26,718
27,196
27,671
28,138
9,031
9,288
9,584
9,867
10,147
1945..
1946..
1947..
1948..
1949..
139,928
141,389
144,126
146,631
149,188
12,979
13,244
14,406
14,919
15,607
19,326
19,625
20,118
20,990
21,634
13,942
13,597
13,447
13,171
13,006
12,036
12,004
11,814
11,794
11,700
42,521
43,027
43,657
44,288
44,916
28,630
29,064
29,498
29,931
30,405
10,494
10,828
11,185
11,538
11,921
1950..
1951..
1952.
1953.
1954.
152,271
154,878
157,553
160,184
163,026
16,410
17,333
17,312
17,638
18,057
22,423
22,998
24,501
25,701
26,886
12,839
12,727
12,807
12,986
13,230
11,680
11,552
11,350
11,062
10,832
45,672
46,103
46,495
46,786
47,001
30,849
31,362
31,884
32,394
32,942
12,397
12,803
13,203
13,617
14,076
1955.
1956.
1957.
1958.
1959.
165,931
168,903
171,984
174,882
177,830
18,566
19,003
19,494
19,887
20,175
27,925
28,929
29,673
30,651
31,767
13,501
13,981
14,795
15,337
15,816
10,714
10,616
10,603
10,756
10,969
47,194
47,379
47,440
47,337
47,192
33,506
34,057
34,591
35,109
35,663
14,525
14,938
15,388
15,806
16,248
1960.
1961.
1962.
1963.
1964.
180,684
183,756
186,656
189,417
192,120
20,364
20,657
20,746
20,750
20,670
32,985
33,296
33,943
34,606
35,301
16,217
17,565
18,484
19,075
19,812
11,116
11,408
11,889
12,620
13,154
47,134
47,061
46,968
46,932
46,881
36,208
36,756
37,316
37,869
38,438
16,659
17,013
17,311
17,565
17,863
1965.
1966.
1967.
1968.
194,592
196,920
199,118
201,166
20,404
19,811
19,191
18,521
35,889
36,544
36,965
37,239
20,637
21,582
21,697
22,106
13,679
14,063
15,197
15,788
46,807
46,855
47,077
47,614
39,015
39,601
40,194
40,768
18,162
18,464
18,798
19,129
Projections:»
1970: Series C.
Series D.
206,039
204,923
18,740
17,625
} 37,224 } 23,136 } 17,261 } 48,276 j} 41,817
19,585
1975: Series C.
Series D.
219,366
215,367
21,211
18,323
35,319
34,209
1980: Series C.
Series D_
235,212
227,665
24,298
20,736
36,680
32,695
1985: Series C.
Series D.
252,871
241,731
26,645
23,030
41,875
35,933
132
} 19,299
|
!
}24,621 }20,997 | 53,881 } 43,364
23,282 ;
21,699 I
1n 068
i
1 fR
'
} 62,374 || 43,180 }
| 72,083 I) 42,940
21,159
23,063
24,978
i Two of four series projected by the cohort method and based on different assumptions with regard to completed
fertility, which moves gradually toward a level of 2,775 children per 1,000 women for Series C and 2,450 children per
1,000 women for Series D. For further explanation of method of projection and for additional data, see "Population Estimates, Current Population Reports, Series P-25, No. 381," December 1967.
Note.—Data for Armed Forces overseas included beginning 1940
Source: Department of Commerce, Bureau of the Census.
251
TABLE B-22.—Noninstitutional population and the labor force, 1929-68
Civilian labor force
Year or month
Noninstitutional
population
Total
labor
force
(including
armed
forces)
Employment
Armed
forces
Total
Total
Agricultural
Nonagricultural
Unemployment
Total
Unemlabor
force as ploypercent ment
of non- as percent of
institu- civilian
tional
labor
popuforce
lation
Percent
Thousands of persons 14 years of age and over
1929
49,440
260
49,180
47,630
10,450
37,180
1,550
3.2
1930
1931
1932
1933
1934
50,080
50,680
51,250
51,840
52,490
260
260
250
250
260
49,820
50,420
51,000
51,590
52,230
45,480
42,400
38,940
38,760
40,890
10,340
10,290
10,170
10,090
9,900
35,140
32,110
28,770
28,670
30,990
4,340
8,020
12,060
12,830
11,340
8.7
15.9
23.6
24.9
21.7
1935
1936_
1937
1938
1939
53,140
53,740
54,320
54,950
55,600
270
300
320
340
370
52,870
53,440
54,000
54,610
55,230
42,260
44,410
46,300
44,220
45,750
10,110
10,000
9,820
9,690
9,610
32,150
34,410
36,480
34,530
36,140
10,610
9,030
7,700
10,390
9,480
20.1
16.9
14.3
19.0
17.2
1940.
1941
1942
1943
1944
100,380
101,520
102,610
103,660
104,630
56,180
57,530
60,380
64,560
66,040
540
1,620
3,970
9,020
11,410
55,640
55,910
56,410
55,540
54,630
47,520
50,350
53,750
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
56.0
56.7
58.8
62.3
63.1
14.6
9.9
4.7
1.9
1.2
1945
1946
1947
105,530
106,520
107,608
65,300
60,970
61,758
11,440
3,450
1,590
53,860
57,520
60,168
52,820
55,250
57,812
8,580
8,320
8,256
44,240
46,930
49,557
1,040
2,270
2,356
61.9
57.2
57.4
1.9
3.9
3.9
Percent
Thousands of persons 16 years of age and over
1947
1948
1949
103,418
104,527
105,611
60,941
62,080
62,903
1,591
1,459
1,617
59,350
60,621
61,286
57,039
58,344
57,649
7,891
7,629
7,656
49,148
50,713
49,990
2,311
2,276
3,637
58.9
59.4
59.6
3.9
3.8
5.9
1950
1951
1952
1953
1954.
106,645
107,721
108,823
110,601
111,671
63,858
65,117
65,730
66,560
66,993
1,650
3,100
3,592
3,545
3,350
62,208
62,017
62,138
63,015
63,643
58,920
59,962
60,254
61,181
60,110
7,160
6,726
6,501
6,261
6,206
51,760
53,239
53,753
54,922
53,903
3,288
2,055
1,883
1,834
3,532
59.9
60.4
60.4
60.2
60.0
5.3
3.3
3.0
2.9
5.5
1955
1956 .
1957
1958 . .
1959
112,732
113,811
115,065
116,363
117,881
68,072
69,409
69,729
70,275
70,921
3,049
2,857
2,800
2,636
2,552
65,023
66,552
66,929
67,639
68,369
62,171
63,802
64,071
63,036
64,630
6,449
6,283
5,947
5,586
5,565
55,724
57,517
58,123
57,450
59,065
2,852
2,750
2,859
4,602
3,740
60.4
61.0
60.6
60.4
60.2
4.4
4.1
4.3
6.8
5.5
1960
1961
1962
1963
1964
119,759
121,343
122,981
125,154
127,224
72,142
73,031
73,442
74,571
75,830
2,514
2,572
2,828
2,738
2,739
69,628
70,459
70,614
71,833
73,091
65,778
65,746
66,702
67,762
69,305
5,458
5,200
4,944
4,687
4,523
60,318
60,546
61,759
63,076
64,782
3,852
4,714
3,911
4,070
3,786
60.2
60.2
59.7
59.6
59.6
5.5
6.7
5.5
5.7
5.2
1965
1966
1967
1968
129,236
131,180
133,319
135,562
77,178
78,893
80,793
82,272
2,723
3,123
3,446
3,535
74,455
75,770
77,347
78,737
71,088
72,895
74,372
75,920
4,361
3,979
3,844
3,817
66,726
68,915
70,527
72,103
3,366
2,875
2,975
2,817
59.7
60.1
60.6
60.7
4.5
3.8
3.8
3.6
See footnotes at end of table.
252
TABLE B-22.—Noninstitutional population and the labor force,
1929-68—Continued
Civilian labor force
Year or month
Noninstitutional
population
Total
labor
force
(including
armed
forces)
Employment
Armed
forces
Total
Total
Agricultural
Nonagricultural
Unemployment
Thousands of persons 16 years of age and over
Total
labor
force as
percent
of noninstitutional
population
Unemployment
as percent of
civilian
labor
force
Percent
1967: Jan.
Feb.
Mar.
Apr.
May.
June
132,295
132,448
132,627
132,795
132,969
133,168
78,706
79,107
78,949
79,560
79,551
82,464
3,386
3,418
3,436
3,449
3,456
3,444
75,320
75,689
75,513
76,111
76,095
79,020
72,160
72,506
72,560
73,445
73,637
75,391
3,335
3,281
3,410
3,721
3,825
4,395
68,826
69,225
69,149
69,724
69,812
70,996
3,160
3,183
2,954
2,666
2,457
3,628
59.5
59.7
59.5
59.9
59.8
61.9
4.2
4.2
3.9
3.5
3.2
4.6
July.
Aug.
Sept.
Oct..
Nov.
Dec.
133,366
133,645
133,847
134,045
134,224
134,405
82,920
82,571
80,982
81,595
81,582
81,527
3.449
3,459
3,456
3,463
3,469
3,470
79,471
79,112
77,526
78,132
78,113
78,057
76,221
76,170
74,631
75,181
75,218
75,338
4,516
4,378
3,931
4,033
3,759
3,545
71,705
71,792
70,700
71,148
71,460
71,793
3,250
2,942
2,895
2,951
2,894
2,719
62.2
61.8
60.5
60.9
60.8
60.7
4.1
3.7
3.7
3.8
3.7
3.5
1968:Jan..
Feb..
Mar.
Apr..
May.
June.
134,576
134,744
134.904
135,059
135,249
135,440
79,811
80,869
80,938
81,141
81,770
84,454
3,464
3,467
3,491
3,507
3,536
3,567
76,347
77,402
77,447
77,634
78,234
80,887
73,273
74,114
74,517
75,143
75,931
77,273
3,366
3,462
3,537
3,851
3,996
4,516
69,908
70,653
70,980
71,292
71,935
72,757
3,074
3,288
2,929
2,491
2,303
3,614
59.3
60.0
60.0
60.1
60.5
62.4
4.0
4.2
3.8
3.2
2.9
4.5
July.
Aug.
Sept.
Oct__
Nov.
Dec.
135,639
135,839
136,036
136,221
136,420
136,619
84,550
83,792
82,137
82,477
82,702
82,618
3,586
3,589
3,591
3,603
3,517
3,500
80,964
80,203
78,546
78,874
79,185
79,118
77,746
77,432
75,939
76,364
76,609
76,700
4,476
4,107
3,836
3.767
3,607
3,279
73,270
73,325
72,103
72,596
73,001
73,421
3,217
2,772
2,606
2,511
2,577
2,419
62.3
61.7
60.4
60.5
60.6
60.5
4.0
3.5
3.3
3.2
3.3
3.1
Seasonally adjusted
1967:Jan...
Feb_..
Mar..
Apr...
May..
June..
80,319
80,339
80,112
80,263
79,958
80,658
76,933
76,921
76,676
76,814
76,502
77,214
74,094
74,063
73,822
73,939
73,550
74,169
3,990
3,876
3.858
3,843
3,728
3,739
70,104
70,187
69,964
70,096
69,822
70,430
2,839
2,858
2,854
2,875
2,952
3,045
3.7
3.7
3.7
3.7
3.9
3.9
July..
Aug..
Sept..
Oct..
Nov..
Dec.
80,944
81,057
81,263
81,535
81,459
81,942
77,495
77,598
77,807
78,072
77,989
78,473
74,478
74,664
74,638
74,735
75,005
75,577
3,847
3,956
3,697
3,718
3,839
4,216
70,631
70,708
70,941
71,017
71,166
71,361
3,017
2,934
3,169
3,337
2,984
2,896
3.9
3.8
4.1
4.3
3.8
3.7
1968:Jan...
FebMar_.
Apr...
May..
June..
81,386
82,138
82,150
81,849
82,149
82,585
77,923
78,672
78,658
78,343
78,613
79,018
75,167
75,731
75,802
75,636
75,829
76,048
4,003
4,127
4,014
3,980
3,893
3,851
71,164
71,604
71,788
71,656
71,936
72,197
2,756
2,941
2,856
2,707
2,784
2,970
3.5
3.7
3.6
3.5
3.5
3.8
July..
Aug..
Sept..
Oct...
Nov..
Dec.
82,572
82,279
82,422
82,407
82,549
82,956
78,985
78,690
78,831
78,804
79,032
79,456
76,038
75,929
75,957
75,952
76,389
76,867
3,836
3,733
3,602
3,481
3,676
3,874
72,202
72,196
72,355
72,471
72,713
72,993
2,947
2,761
2,874
2,852
2,643
2,589
3.7
3.5
3.6
3.6
3.3
3.3
Note.—Labor force data in Tables B-22 through B-25 are based on household interviews and relate to calendar week
including the 12th of the month. For definitions of terms, area samples used, historical comparability of the data, comparability with other series, etc., see "Employment and Earnings and Monthly Report on the Labor Force."
Source: Department of Labor, Bureau of Labor Statistics.
253
323-166 O—69
17
TABLE B—23.—Civilian employment and unemployment, by sex and age, 1947—68
[Thousands of persons 16 years of age and over]
Unemployment
Employment
Males
Year or
month
Total
20
Total 16-19 years
years and
over
Total
Females
Males
Females
20
16-19 years
years and
over
Total
Total
20
16-19 years
years and
over
Total
20
16-19 years
years and
over
1947
1948
1949
57,039 40,994 2,218 38,776 16,045 1,691 14,354 2,311 1,692
58,344 41
1,726 2,345 39,382 16,618 1,683 14,937 2,276 1,559
57,649 40,
0,926 2,124 38,803 16,723 1,588 15,137 3,637 2,572
270 1,422
619
717
255 1,305
352 2,219 1,065
144
152
223
475
564
841
1950
1951
1952
1953
1954.
58,920 41 ,580
59,962 41 ,780
60,254 41 ,684
61,181 42,431
60,'" 41
1,110 "",620
2,186
2,156
2,106
2,135
39,394 17 ,340
39,626 18,182
18,570
39,578 18i
40,296 18,750
2,239
1,221
1,185
1,202
2,344
318
191
205
184
310
1,922 1,049
1,029
834
698
980
632
1,019
2,035 1,188
195
145
140
123
191
854
689
559
510
.997
1955
1956.
1957.
1958.
1959.
62,171 42,621
63,802 43,380
:, 802 43,
64,071 43,357
63,036 42 423
"!,
64,630 43;
1,466
2,095
2,164
2,117
2,012
2,198
40,526 1
19,550
41,216 20;"0,422
41,239 20,,
1,714
40,411 20,613
.
41,267 21,164
1,548
1,654
1,663
1,570
1,640
18, 002
18,767
19,052
19,043
19,524
2,852
2,750
2,859
4,602
3,740
1,854
1,711
1,841
3,098
2,420
274
269
299
416
398
1,580
1,442
1,541
2,681
2,022
1960.
1961.
1962.
1963.
1964.
65,778 43,
1,904
65,746 43,
1,656
66,702 44,
67,762 44,
i,657
69,305 45,
.,474
;,
71,088 46, 340
i,
72,895 46, 919
74,372 47,,479
75,920 48,
1,114
2,360
2,314
2,362
2,406
2,587
41,543 21 ,874 1,769
41,342 22!,090 1,793
41,815 22! 525 1,833
,
42,251 23,105 1,849
42,886 23;
"1,831 1,929
20,105
20,296
20,693
21,257
21,903
3,852
4,714
3,911
4,070
3,786
2,486
2,997
2,423
2,472
2,205
425
479
407
500
487
2,060 1,366
2,518 1,717
2,016 ",488
1,971 ,598
1,718 ,581
22,630
23,507
24,397
25,281
3,366
2,875
2,975
2,817
1,914
1,551
1,508
1,419
479 1,435
432 1,119
448 1,060
427
993
,452
,324
,468
,397
1,405
1,407
1,402
1,381
1,409
1,445
\,m
1965.
1966.
1967.
1968.
1,517 15,824 3,288
1,611 16,570 2,055
1,612 16,958 1,883
1,584 17,164 1,834
1,985 39,634 18,490 1,490 17,000 3,532
2,918 43,422 24, 748
t,
3,252 43,667 25, 976
i,
3,186 44,293 26,
1,893
3,254 44,859 27,,807
2,118
2,469
2,496
2,525
998
1,039
1,018
1,504
1,320
823
176
832
209
821
197
262 1,242
256 1,063
286
349
313
383
386
1,080
1,368
1,175
1,216
1,195
395 1,056
404
919
390 1,078
412
985
Seasonally adjusted
1967: Jan
Feb....
Mar....
Apr....
May....
June...
74,094 47,,437
74,063 47;,417
73,822 47,,339
73,939 47,,256
73,550 47,,147
74,169 47,,419
3,294
3,241
3,314
3,204
3,158
3,245
44,143 26,657
44,176 26,646
,
.,
44,025 26,
' 025 26,483
44, 052 26,683
43, 989 26,403
44, 174 26,750
2,590 24,
1,067'
2,594 24,
i,052
2,
1,924
1,061
2,503 23i
1,900
2,582 24,
•,168
2,839'
2,858
2,854
2,875
2,952
3,045
1,434
1,451
1,452;
1,494
1,543
1,600
4091 1,025
446 1,005
407 1,045
4371 1,057
443 1,100
465 1,135
July....
Aug
Sept....
Oct
Nov....
Dec...
74,478 47,
,537
74,664 47,1
',630
74,638 47, i
',603
74,735 47,
',532
75; 005 47,553
75,577 47,885
3,191
3,209
3,135
3,072
3,047
3,110
44,346 26,941
44,42127,034
44,468 27,035
44,460 27,203
44,506 27,452
44,775 27,692
2,505
2,457
2,395
2,392
2,416
2,419
24,436
24,577
24,640
24,811
25,036
25,273
3,017
2,934
3,169
3,3371
2,984
2,896
1,521
1,514
1,469
1,671
1,570
1,431
437
446
431
533
498
423
1968: Jan
Feb....
Mar....
Apr
Apr.
Vlay.
May....
June
75,167 47,790
75,731 48,056
7 5 , 802 48,059
""
75,636 48,083
75,829 48,,017
:,
76,048 48, 111
3, 050 44,740
3, 214 44,842
3, 276 44,783
3, 325 44,758
3,275 44t, 742
3,253 44; 858
^
2,575
2,639
2,615
2,584
2,580
2,622
24,802
25,036
25,128
24,969
25,232
25,315
2,756
2,941
2,856
2,707
2,784
2,970
1,433
1,505
1,446
1,344
1,355
1,545
403
438
437
386
384
480
1,160 3,239 44,92127,878 2,514 25,364 2,947
76,038 48,
i,
75,929 48, 216 " 309 44,907 27,713 2,528 25,185 2,761
75,957 48,079
244 44,835 27,878 2,475 25,403 2,874
75,952 48',,002
249 44,753 27,950 2,448 25,502 2,852
76,389 48,145
28,244 2,447 25,797 2,643
76,867 48,622
309 45; 313 28,245 2,378 25,867 2,589
1,452
1,377
1,400
1,487
1,361
1,256
July..
Aug..
Sept..
Oct...
Nov..
Dec...
27,377
27,675
27,743
27,553
27,812
27,937
Note.-See Note, Table B-22.
Source: Department of Labor, Bureau of Labor Statistics.
254
328'
395
381
360
383
383
1,077
1,012
1,021
1,021
1,026
1,062
1,084 1,496
1,068 1,420
1,038 1,700
1,138 1,666
1,072 1,414
1,008 1,465
403
425
422
414
382
390
1,093
995
1,278
1,252
1,032
1,075
1,030
1,067
1,009
958
971
1,065
1,323
1,436
1,410
1,363
1,429
1,425
315 1,008
402 1,034
444
966
414
949
462
967
443
982
442 1,010 1,495
989 1,384
388
390 1,010 1,474
455 1,032 1,365
935 1.282
426
824 1,333
432
466 1,029
977
407
431 1,043
994
371
917
365
947
386
TABLE B-24.—Selected unemployment rates, 1948-68
[Percent]
By sex and age
Year or month
All
workers
Both
sexes,
16-19
years
By cclor
By selected groups
White
Nonwhite
Experienced
wage
and
salary
workers
Married
men*
Fulltime
workers 2
Bluecollar
workers 3
3.6
5.3
3.5
5.6
5.9
8.9
3.7
6.2
3.5
5.4
4.2
8.0
5.1
4.0
3.2
2.9
5.5
4.9
3.1
2.8
2.7
5.0
9.0
5.3
5.4
4.5
9.9
5.6
3.2
2.9
2.6
6.2
4.6
1.5
1.4
1.7
4.0
5.0
2.6
2.5
3.8
3.7
4.0
7.2
Men,
20
years
and
over
Women, 20
years
and
over
1948..
1949..
3.8
5.9
9.2
13.4
1950..
1951.
1952.
1953.
1954.
5.3
3.3
3.0
2.9
5.5
12.2
8.2
8.5
7.6
12.6
3.2
5.4
4.7
2.5
2.4
2.5
4.9
1955.
1956.
1957.
1958.
1959.
4.4
4.1
4.3
6.8
5.5
11.0
11.1
11.6
15.9
14.6
3.8
3.4
3.6
6.2
4.7
4.4
4.2
4.1
6.1
5.2
3.9
3.6
3.8
6.1
4.8
8.7
8.3
7.9
12.6
10.7
4.8
4.4
4.6
7.2
5.7
2.6
2.3
2.8
5.1
3.6
1960.
1961.
1962.
1963.
1964.
5.5
6.7
5.5
5.7
5.2
14.7
16.8
14.7
17.2
16.2
4.7
5.7
4.6
4.5
3.9
5.1
6.3
5.4
5.4
5.2
4.9
6.0
4.9
5.0
4.6
10.2
12.4
10.9
10.8
9.6
5.7
6.8
5.6
5.5
5.0
3.7
4.6
3.6
3.4
2.8
1965.
1966.
1967.
1968-
4.5
3.8
3.8
3.6
14.8
12.7
12.9
12.7
3.2
2.5
2.3
2.2
4.5
3.8
4.2
3.8
4.1
3.3
3.4
3.2
8.1
7.3
7.4
6.7
4.3
3.5
3.6
3.4
5.2
Labor
force
time lost *
7.2
3.9
3.6
3.4
7.2
5.8
5.1
6.2
10.2
7.6
5.1
5.3
8.1
6.6
5.5
4.9
7.8
9.2
7.4
7.3
6.3
6.7
8.0
6.7
6.4
5.8
2.4
1.9
1.8
1.6
4.3
3.4
3.5
3.1
5.3
4.2
4.4
4.1
5.0
4.2
4.2
4.0
6.7
Seasonally adjusted
1967: Jan..
Feb.
Mar.
Apr.
May.
June.
3.7
3.7
3.7
3.7
3.9
3.9
11.1
12.6
11.8
12.0
12.7
12.7
2.3
2.2
2.3
2.3
2.4
2.5
4.3
4.0
4.1
4.1
4.1
4.2
3.3
3.3
3.2
3.3
3.4
3.5
6.7
7.2
7.4
7.2
7.7
7.7
3.5
3.4
3.4
3.4
3.6
3.8
1.7
1.7
1.8
1.9
1.9
1.9
3.2
3.2
3.3
3.4
3.5
3.6
4.2
4.2
4.2
4.6
4.6
4.6
4.1
4.1
4.1
4.0
3.8
4.4
July.
Aug..
Sept.
Oct..
Nov.
Dec.
3.9
3.8
4.1
4.3
3.8
3.7
12.9
13.3
13.4
14.8
13.9
12.8
2.4
2.3
2.3
2.5
2.4
2.2
4.3
3.9
4.9
4.8
4.0
4.1
3.5
3.4
3.6
3.7
3.4
3.3
7.3
6.8
8.0
8.8
7.3
6.9
3.7
3.6
3.9
4.1
3.7
3.5
1.8
1.9
1.8
1.9
1.7
1.7
3.6
3.6
3.6
3.8
3.5
3.3
4.6
4.4
4.6
4.9
4.4
4.3
4.2
4.3
4.6
4.7
4.2
4.1
1968: Jan..
Feb_
Mar.
Apr.
May.
June.
3.5
3.7
3.6
3.5
3.5
3.8
11.3
12.6
13.0
11.9
12.6
13.6
2.3
2.3
2.2
2.1
2.1
2.3
3.9
4.0
3.7
3.7
3.7
3.7
3.2
3.3
3.2
3.1
3.2
3.3
6.4
7.2
6.9
6.7
6.4
7.2
3.3
3.5
3.4
3.2
3.1
3.6
1.6
1.7
1.7
1.5
1.6
1.7
3.3
3.4
3.2
3.1
3.2
3.3
4.3
4.3
4.4
3.9
3.7
4.2
4.0
4.2
4.0
3.7
3.6
4.3
July.
Aug.
Sept.
Oct..
Nov.
Dec.
3.7
3.5
3.6
3.6
3.3
3.3
13.6
12.0
12.6
12.7
12.2
12.6
2.2
2.2
2.2
2.3
2.0
1.8
3.9
3.7
3.9
3.8
3.4
3.5
3.3
3.2
3.2
3.2
3.0
2.9
6.9
6.2
6.7
7.4
6.5
6.0
3.6
3.4
3.4
3.4
3.2
3.0
1.6
1.6
1.6
1.7
1.6
1.4
3.3
3.3
3.2
3.2
3.0
2.7
4.3
4.2
4.1
4.1
3.8
3.6
4.3
4.0
4.0
3.9
3.7
3.6
1 Married men living with their wives. Data for 1949 and 1951-54 are for April; 1950, for March.
2 Data for 1949-61 are for May.
3 Includes craftsmen, operatives, and nonfarm laborers. Data for 1948-57 are based on data for January, April, July,
and October.
* Man-hours lost by the unemployed and persons on part time for economic reasons as a percent of potentially available
labor force man-hours.
Note.-See Note, Table B-22.
Source: Department of Labor, Bureau of Labor Statistics.
255
TABLE B-25.— Unemployment by duration, 1947-68
Duration of unemployment
Total unemployment
Year or month
Less than
5 weeks
5-14
weeks
15-26
weeks
27 weeks
and over
Thousands of persons 16 years of age and over
704
234
164
669
1,194
193
428
116
256
1,450
1,177
1,135
1,142
1,605
1,055
574
516
425
166
148
132 j
495
357
137
84
317
2,852
2,750
2,859
4,602
3,740
1,335
1,412
1,408
1,753
1,585
815
366
336
1,396
1,114
301
321
785
469
1960
1961.
1962.
1963
1964
3,852
4,714
3,911
4,070
3,786
1,719
1,806
1,659
1,751
1,697
1,176
1,376
1,134
1,231
1,117
503
728
534
535
491
454
804
585
553
482
1965.
19fifi
1967
1968.
3,366
2,875
2,975
2,817
1,628
1,535
1,635
1,594
983
404
804
893
810
295 !
271 i
256 ;
351
241
177
156
1947
1948
1949
2,311
2,276
3,637
1,210
1,300
1,756
1950
1951
1952.
1953
1954
3,288
2,055
1,883
1,834
3,532
1955
1956
1957
1958
1959
482
1,116
805
891
78
232
239
667
571
Seasonally adjusted
2,839
2,858
2,854
2,875
2,952
3,045
1967: Jan
Feb..
Mar...
.
Apr
May..
June
.
.
...
July
Aug
Sept
Oct
.
..
....
Dec
..
. .
Nov
...
....
...
Mar
Apr
May
.
.
June.. . .
July
Aug
Sept
..
Oct
Nov
Dec.
.
..
.
.
....
1968 Jan
Feb
.
. .
.
1,496
1,606
1,628
1,618
1,704
1,713
794
789
833
871
871
909
276
257
256
250
291
291
200
190
180
184
142
150
3,017
2,934
3,169
3,337
2,984
2,896
1,662
1,572
1,783
1,789
1,609
1,418
895
934
937
930
968
266
234
111
305
307
259
170
211
163
170
178
186
2,756
2,941
2,856
2,707
2,784
2,970
1,360
1,721
1,689
1,507
1,696
1,753
840
776
755
830
718
841
302
286
268
241
283
260
2,947
2,761
2,874
2,852
2,643
2,589
1,656
1,629
1,647
1,557
1,527
1,352
860
767
819
915
791
841
275
237
235
260
226
171
186
169
180
157
127
163
178
161
134
128
128
152
Note.-See Note, Table B-22.
Source: Department of Labor, Bureau of Labor Statistics.
256
1,105
TABLE B-26.— Unemployment insurance programs, selected data, 1940-68
State programs
All programs
Year or month
Covered
employment i
Insured
unemployment
(weekly
average) 23
Total
benefits
Insured
paid
unem(milploylions
ments
of dollars) 2 *
Initial
claims
Exhaustions s
Unadjusted
Weekly average, thousands
Thousands
Insured unemployment as percent of covered
employment
Seasonally adjusted
Benefits paid
Total
(millions of
dollars)*
Average
weekly
check
(dollars) e
Percent
1940
1941_.
1942
1943
1944
1945
1946
1947
1948
1949
24,291
28,136
30,819
32,419
31,714
30,087
31,856
33,876
34,646
33,098
1,331
842
661
149
111
720
2,804
1,793
1,446
2,474
534.7
358.8
350,4
80.5
67.2
574.9
2,878.5
1,785.5
1,328.7
2,269.8
1,282
814
649
147
105
589
1,295
997
980
1,973
214
164
122
36
29
116
189
187
200
340
5.6
3.0
2.2
.5
.4
2.1
4.3
3.1
3.0
6.2
518.7
344.3
344.1
79.6
62.4
445.9
1,094.9
775.1
789.9
1,736.0
10.56
11.06
12.66
13.84
15.90
18.77
18.50
17.83
19.03
20.48
1950
1951
1952
1953
1954
1955
.
1956
1957...
1958
1959 . . . .
34,308
36,334
37,006
38,072
36,622
40,018
42,751
43,436
44,411
45,728
1,605 1,467.6
1,000
862.9
1,069 1,043.5
1,067 1,050.6
2,051 2,291.8
1,399 1,560.2
1,323 1,540.6
1,571 1,913.0
3,269 4,290.6
2,099 2,854.3
1,513
969
1,044
990
1,870
1,265
1,215
1,446
2,526
1,684
236
208
215
218
304
226
227
270
369
277
4.6
2.8
2.9
2.8
5.2
3.5
3.2
3.6
6.4
4.4
1,373.1
840.4
998.2
962.2
2,026.9
1,350.3
1,380.7
1,733.9
3,512.7
2,279.0
20.76
21.09
22.79
23.58
24.93
25.04
27.02
28.17
30.58
30.41
1960
1961
1962 .
1963
1964
1965
1966
1967
1968 v
46,334
46,266
47,776
48,434
49,637
51,580
54,739
56,341
2,071
2,994
1,946
M,973
1,753
1,450
1,129
1,270
1,180
3.022.8
4,358.1
3.145.1
3.025.9
2,749.2
2,360.4
1,890.9
2,220.0
2.213.2
1,908
2,290
1,783
1,806
1,605
1,328
1,061
1,205
1,110
331
350
302
7 297
268
232
203
226
200
4.8
5.6
4.4
4.3
3.8
3.0
2,3
2.5
2.2
2,726.7
3,422.7
2,675.4
2,774.7
2,522.1
2,166.0
1,771.3
2,101.0
2,060. 0
32.87
33.80
34.56
35.27
35.92
37.19
39.75
41.25
43.25
54,769
54,667
55, 094
*>55,581
1,631
1,654
1,603
1,423
1,197
1,071
235.8
230.9
270.1
210.5
193.1
165.4
1,558
1,582
1,532
1,360
1,142
1,019
300
267
239
244
188
186
3.3
3.4
3.3
2.9
2.4
2.1
2.3
2.5
2.6
2.6
2.7
2.6
224.8
219.5
257.5
200.6
183.6
156.1
41.70
41.97
42.07
41.81
40.99
40.00
1,247
1,123
956
953
1,068
1,339
155.3
184.0
132.3
133.0
146.6
171.8
1,184
1,059
894
889
997
1,259
288
187
158
180
208
278
2.4
2.2
1.8
1.8
2.0
2.6
2.8
2.6
2.5
2.4
2.3
2.3
147.3
172.8
122.6
122.1
135.0
159.2
40.10
41.08
40.10
40.70
41.19
41.85
1,719
1,653
1,480
1,216
1,026
944
264.8
259.4
247.5
207.2
170.2
139.3
1,624
1,556
1,390
1,142
964
883
316
227
183
183
156
157
3.3
3.2
2.8
2.3
2.0
1.8
2.4
2.3
2.3
2.1
2.2
2.2
248.5
243.7
231.1
195.1
159.1
129.1
42.60
43.58
43.64
43.12
42.42
42.26
1,058
1,024
868
861
985
1,245
156.9
162.8
133.4
138.7
134.9
174.3
991
955
802
794
913
1,170
240
174
141
154
189
261
2.0
1.9
1.6
1.6
1.8
2.3
2.3
2.3
2.2
2.1
2.1
2.2
145.6
150.0
121.8
126.0
122.5
163.8
42.39
43.73
43.78
44.37
44.72
45.50
.
1967: Jan
Feb
Mar
Apr
May
June
July
Aug
Sept
Oct
Nov
Dec
P55,977
*57,004
*56,933
P57,354
. .
P57,199
*56,818
*57,117
8 57,577
1968: Jan
Feb
Mar
Apr . .
May
June. ._
July
Aug
Sept
Oct
Nov
Dec p
..
1 includes persons under the State, UCFE (Federal employee, effective January 1955), and RRB (Railroad Retirement
Board) programs. Beginning October 1958, also includes the UCX program (unemployment compensation for ex-servicemen).
2 Includes State, UCFE, RR, UCX, UCV (unemployment compensation for veterans, October 1952-January I960), and
SRA (Servicemen's Readjustment Act, September 1944-September 1951) programs. Also includes Federal and State
programs for temporary extension of benefits from June 1958 through June 1962, expiration date of program.
3 Covered workers who have completed at least 1 week of unemployment.
* Includes benefits paid under extended duration provisions of State laws, beginning June 1958. Annual data are net
amounts and monthly data are gross amounts.
6
Individuals receiving final payments in benefit year.
* For total unemployment only.
7
Programs include Puerto Rican sugarcane workers for initial claims and insured unemployment beginning July 1963.
8
Preliminary; December 1967 is latest month for which data are available for all programs combined. Workers covered
by State programs account for about 88 percent of the total.
Source: Department of Labor, Bureau of Employment Security.
257
TABLE B-27.—Wage and salary workers in nonagricultural establishments, 1929-68
[All employees; thousands of persons]
Total
wage
and
salary
workers
Year or
month
Manufacturing
Total
Durable
goods
Nondurable
goods
(government
Mining
Contract
construction
Transportation
and
public
utilities
Wholesale
and
retail
trade
Finance,
insurance,
and
real
estate
Services
:
1ederal
State
and
local
1929
31,339
10, 702
1,087
1,497
3,916
6,123
1,509
3, 440
533
2,532
1930
1931
1932
1933..
1934
29,424
26,649
23 628
23,711
25,953
9, 562
8, 170
6
7,397
8,501
1,009
873
731
744
883
1,372
1,214
970
809
862
3,685
3,254
2 816
2,672
2,750
5,797
5,284
4 683
4,755
5,281
1,475
1,407
1 341
1,295
1,319
3, 376
3, 183
931
2, 873
3, 058
526
560
559
565
652
2,622
2,704
2 666
2,601
2,647
1935
1936
1937
1938
1939
27,053
29,082
31,026
29.209
30,618
9,069
9,827
10,794
9 440
10,278
4, 715
5, 564
897
946
1,015
891
854
912
1,145
1,112
1 055
1,150
2,786
2,973
3,134
2 863
2,936
5,431
5,809
6,265
6 179
6,426
1 335
,388
1,432
L 425
1,462
3, 142
3, 326
3, 518
473
3, 517
753
826
833
829
905
2,728
2,842
2,923
3,054
3,090
1940
1941 .
1942
1943
1944
32,376
36,554
40 125
42,452
41,883
10,985
13,192
15 280
17, 602
17, 328
363
6, 968
8
11, 084
10, 856
6??
6, 225
6 458
6,518
6,472
925
957
992
925
892
1,294
1,790
2 170
1,567
1,094
3,038
3,274
3,460
3,647
3,829
6,750
7, 210
7, 118
6, 982
7, 058
1,502
1,549
1,538
L.502
1,476
681
i 921
084
996
1,340
4, 148
4, 163
2^905
2,928
3,206
3,320
3,270
3,174
3,116
1945
1946
1947
1948
1949..
40,394
41,674
43,881
44,891
. . . . 43,778
15, 524
14 703
15, 545
15, 582
14 441
9, 074
7 74?
8, 385
8 326
7 489
6,450
6,962
7, 159
7, 256
6, 953
836
862
955
994
930
1,132
1,661
1,982
2,169
2,165
3,906
4,061
4,166
4,189
4,001
7, 314
8 376
8, 955
9, 272
9, 264
1,497
1,697
1,754
1,829
1,857
4, 241
4 719
5, 050
5, 206
5, 264
2,808
?54
1,892
1,863
1,908
3,137
3,341
3,582
3,787
3,948
8 094
9 089
9 349
10 110
9,129
7, 147
7 304
7 ?84
7 438
7 185
901
929
898
866
791
2,333
2,603
2,634
2,623
2,612
4,034
4,226
4,248
4,290
4,084
9, 386
9, 742
10, 004
10,247
10 ?35
1,919
1,991
2,069
2,146
2,234
5, 382
5, 576
5 730
5 867
6 002
1,928
2,302
4?0
? 305
188
4,098
4,087
4,188
4,340
4,563
. .
1950
1951
1952
1953
1954
45,222
47,849
48,825
50,232
49,022
15
16
16
17
16
241
393
63?
549
314
1955
1956
1957
1958
1959
50,675
52,408
52,894
51,363
53,313
16
17
17
15
16
88?
243
174
945
675
9
9
q
8
9
541
834
856
830
373
7
7
7
7
7
340
409
319
116
303
792
822
828
751
732
2,802
2,999
2,923
2,778
2,960
4,141
4,244
4,241
3,976
4,011
10 535
10, 858
10 886
10 750
11 127
2,335
2,429
2,477
2,519
2,594
6 ?74
6, 536
6 749
6 806
7 130
?
191
2,233
4,727
5,069
5,399
5,648
5,850
54,234
54,042
55, 596
! 56,702
58,332
16
16
16
16
17
796
3?6
853
995
?74
q
9
q
9
q
459
070
480
616
816
7
7
7
7
7
336
?f>6
373
380
458
712
672
650
635
634
2,885
2,816
2,902
2,963
3,050
4,004
3,903
3,906
3,903
3,951
11
11
11
11
1?
391
337
566
778
160
2,669
2,731
2,800
2,877
2,957
7
7
8
8
8
664
0?8
3?5
709
770
?79
7 340
,358
/ 348
6,083
6,315
6,550
6,868
7,249
7 656
7 930
8 01?
8,160
632
627
616
625
3,186
3,275
3,203
3,256
4,036
4,151
4,271
4,346
1?
13
13
14
716
?45
613
115
3,023 9 087
3,100 9 551
3.217 10.060
3,357 10 504
/ ,378
/ ,564
/ 719
',736
7,714
8,307
8,897
9,462
1960
1961 .
1962
1963
1964
1965
1966
1967
1968P
...
60,832
64,034
66,030
68,134
18.062
19 214
19 434
19,734
10 406
ii ?84
ii 4??
n ,574
See footnotes at end of table.
258
187
2,209
TABLE B-27.—Wage and salary workers in nonagricultural establishments,
1929-68— Continued
[All employees; thousands of persons)
Manufacturing
Year or
month
Total
wage
and
salary
workers
Total
Durable
goods
Nondurable
goods
Mining
Contract
construction
Transporta- Wholetion
sale
and
and
pubretail
lic
trade
utilities
Government
Finance,
insurance,
and
real
estate
Services
Federal
State
and
local
Seasonally adjusted
1966: Jan...
Feb...
Mar..
AprMay..
June..
62,535
62,884
63,253
63,456
63,714
64,141
18,641
18,818
18,928
19,046
19,143
19,272
10,852
10,976
11,059
11,149
11,226
11,305
7,789
7,842
7,869
7,897
7,917
7,967
633
630
633
593
627
629
3,308
3,316
3,366
3,321
3,262
3,299
4,091
4,109
4,122
4,126
4,142
4,160
13,016
13,047
13,094
13,156
13,195
13,267
3,066
3,067
3,080
3,083
3,091
3,101
9,329
9,371
9,412
9,441
9,486
9,535
2,428
2,453
2,477
2,498
2,523
2,575
8,023
8,073
8,141
8,192
8,245
8,303
July..
Aug..
Sept..
Oct...
Nov..
Dec—
64,273
64,438
64,539
64,779
65,000
65,272
19,289
19,404
19,409
19,491
19,544
19,585
11,334
11,423
11,463
11,521
11,536
11,558
7,955
7,981
7,946
7,970
8,008
8,027
632
634
630
628
625
625
3,292
3,257
3,240
3,218
3,200
3,251
4,136
4,119
4,183
4,195
4,215
4,221
13,309
13,326
13,339
13,366
13,394
13,403
3,110
3,111
3,115
3,116
3,124
3,138
9,572
9,620
9,634
9,682
9,747
9,800
2,582
2,592
2,597
2,620
2,624
2,650
8,351
8,375
8,392
8,463
8,527
8,599
1967: Jan...
Feb...
Mar..
AprMay..
June-
65,524
65,646
65,672
65,619
65,677
65,821
19,628
19,573
19,517
19,425
19,346
19,356
11,576
11,554
11,511
11.418
11,389
11,369
8,052
8,019
8,006
8,007
7,957
7,987
627
626
626
623
622
621
3,262
3,307
3,227
3,204
3,159
3,131
4,247
4,254
4,255
4,216
4,273
4,276
13,444
13,461
13,495
13,529
13,564
13,573
3,146 9,849
3,159 9,898
3,172 9,956
3,186 9,970
3,199 9,996
3,214 10,032
2,667
2,676
2,688
2,688
2,701
2,747
8,654
8,692
8,736
8,778
8,817
8,871
Jury..
Aug_.
Sept..
Oct...
Nov..
Dec...
65,920
66,186
66,123
66,286
66,778
67,060
19,288
19,407
19,285
19,302
19,518
19,593
11,335
11,433
11,272
11,264
11,463
11,498
7,953
7,974
8,013
8,038
8,055
8,095
626
610
606
603
603
603
3,168
3,165
3,182
3,184
3,214
3,275
4,296
4,288
4,278
4,267
4,297
4,302
13,610
13,648
13,684
13,729
13,791
13,793
3,223
3,241
3,251
3,261
3,273
3,289
10,056
10,110
10,139
10,171
10,270
10,316
2,743
2,740
2,718
2,718
2,692
2,709
8,910
8,977
8,980
9,051
9,120
9,180
1968: Jan...
Feb..
Mar_.
Apr...
May..
June..
67,058
67,600
67,656
67,755
67,792
68,039
19,612
19,612
19,607
19,657
19.693
19,777
11,541
11,514
11,495
11,533
11,545
11,571
8,071
8,098
8,112
8,124
8,148
8,206
604
608
609
632
631
632
3,107
3,388
3,330
3,313
3,245
3,174
4,317
4,342
4,332
4,331
4,281
4,336
13,818
13,920
13,999
14,009
14,049
14,086
3,291
3,304
3,311
3,323
3,334
3,335
10,331
10,405
10,415
10,402
10,425
10,467
2,721
2,721
2,718
2,717
2,721
2,795
9,257
9,300
9,335
9,371
9,413
9,437
68,170
68,314
68,382
68,701
NOVP. 68,920
Dec p. 69,186
19,776
19,748
19,755
19,807
19,854
19,918
11,619
11,563
11,577
11,603
11,647
11,685
8,157
8,185
8,178
8,204
8,207
8,233
638
638
639
591
635
638
3,189
3,195
3,252
3,285
3,273
3,353
4,346
4,358
4,365
4,374
4,394
4,369
14,117
14,181
14,222
14,298
14,331
14,310
3,350
3,376
3,387
3,411
3,425
3,441
10,498
10,548
10,545
10,610
10,695
10,758
2,788
2,751
2,716
2,705
2,696
2,697
9,468
9,519
9,501
9,620
9,617
9,702
Juiy_.
Aug..
Sept..
Oct...
Note.—Data in Tables B-27 through B-33 are based on reports from empli ing establishments and relate to full- and
part-time wage and salary workers in nonagricultural establishments who woi ;ed during, or received pay for, any part of
the pay period which includes the 12th ot the month.
Not comparable with labor force data (Tables B-22 through B - 2 5 ) , which include proprietors, self-employed persons,
domestic servants, and unpaid family workers, and which count persons as employed when they are not at work because
of industrial disputes, bad weather, etc.
For description and details of the various establishment data, see "Employment and Earnings and Monthly Report on
the Labor Force."
Source: Department of Labor, Bureau of Labor Statistics.
259
TABLE B—28.—Average joeekly hours of work i n selected nonagricultural
Total
nonagricultural
private i
Year or month
..
.
40.3
40.0
39.4
39.8
39.9
39.9
39.6
39.1
39.6
39.3
38.8
38.5
39.0
38.6
38.6
38.7
38.8
38.7
38.8
38.6
38.0
37.8
32.5
34.7
33.8
37.2
40.9
39.9
34.9
37.9
39.2
42.0
45.0
46.5
46.5
44.0
40.4
40.5
40.4
39.4
41.1
41.5
41.5
41.2
40.1
41.3
41.0
40.3
39.5
40.7
40.1
40.3
40.9
41.1
41.4
42.0
42.1
41.2
41.4
38.4
38.0
38.0
37.9
37.9
37.9
38.0
38.0
38.1
37.9
38.0
37.8
37.6
37.9
37.8
37.6
37.8
37.9
37.9
37 9
38.0
37 7
37.5
37.6
41.0
40.3
40.4
40.5
40.5
40.4
40.5
40.6
40.9
40.7
40.7
40.7
40.2
40.8
40.7
40.1
40.9
40.9
40.9
40.7
41.1
41 0
40.8
40.7
41.6
40.9
41.1
41.0
41.0
41.0
41.1
41.1
41.4
41.2
41.2
41.3
40.9
41.4
41.4
40.7
41.5
41.7
41.5
41 1
41.7
41 6
41.6
41.4
...
.
.. .
Total
NonDurable durable
goods
goods
44.2
42.1
40.5
38.3
38.1
34.6
36.6
39.2
38.6
35.6
37.7
38.1
40.6
43.1
45.0
45.2
43.5
40.3
40.4
40.0
39.1
40.5
40.6
40.7
40.5
39.6
40.7
40.4
39.8
39.2
40.3
39.7
39.8
40.4
40.5
40.7
41.2
41.3
40.6
40.7
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
1955
1956
1957
1958
1959
1960
1961...
1962
1963
1964
1965
1966
1967
1968 v
Manufacturing
Contract
construction
Retail
trade
Wholesale
trade
industries,
Bituminous
coal
mining
Feb
Mar
Apr
May
June
July
Aug
Sept
Oct
Nov..
Dec
1968: Jan
. .
Feb
Mar
Apr
MayJune
July
Aug
Sept
Oct
Nov p
Dec p
Class 1
railroads
Telephone
communication
38.1
41.9
40.0
35.1
36.1
37.7
37.4
36.1
37.4
37.0
38.9
40.3
42.5
43.1
42.3
40.5
40.2
39.6
38.9
39.7
39.5
39.7
39.6
39.0
39.9
39.6
39.2
38.8
39.7
39.2
39.3
39.6
39.6
39.7
40.1
40.2
39.7
39.8
38.2
38.1
37.7
37.4
38.1
38.9
37.9
37.2
37.1
37.5
37.0
36 8
37.0
36.7
36.9
37.0
37.3
37.2
37.4
37.6
37.7
37.3
43.4
43.2
42.8
41.8
40.9
41.0
40.9
41.3
3 40.3
40.2
40.4
40.4
40.4
39.8
39.1
39.2
39.0
38.6
38.1
38.1
38.2
38.0
37.6
37.4
37.3
37.0
36.6
35.9
35.3
34.7
41.6
42.9
43 1
42.3
41.8
41.3
41.1
41.4
42.3
43.0
42.8
41.6
41.1
41.0
40.8
40.7
40.8
40.7
40.6
40.5
40.7
40.5
40.3
40.2
40.6
40.5
40.5
40.6
40.6
40.6
40.8
40.7
40.3
40.0
35.5
35.3
35.4
35.3
35.2
35.4
35.4
35.4
35.3
35.1
35.2
35.1
34.8
34.9
34.7
34.8
34.6
34.9
34.9
34 9
34.7
34 5
34.4
34.3
40.6
40.5
40.4
40.4
40.2
40.3
40.3
40.3
40.3
40.2
40.2
40.1
40.0
40.0
39.9
39.9
39.8
40.3
40.1
40 3
40.2
40 1
40.0
39.8
33 3
28.1
27.0
29.3
26 8
26.2
28.5
27 7
23.3
26.8
27.8
30 7
32.4
36.3
43.0
42.0
41 3
40.3
37.7
32.3
34.7
34.9
33.8
34.1
32.3
37.3
37.5
36.3
33.3
35.8
35.8
35.9
«37.0
< 38.9
*39.2
*40.2
M0. 8
M0.8
«39.5
40.0
39.5
39.5
39.7
39.5
39.6
39.6
39.7
40.0
39.7
39.9
39.9
39.2
40.0
39.8
39.2
39.8
40.0
39.9
39.9
40.1
39 9
39.7
39.9
38.3
37.6
37.4
37.4
36.8
37.4
37.4
37.4
38.0
37.2
39.4
37.2
36.0
37.9
36.8
37.8
37.2
37.6
37.3
37.5
37.9
37 5
36.0
37.9
43.7
44.3
45 8
47.0
48.7
48 9
48.5
46 0
46.4
46.2
43.7
40.8
41.0
40.6
40.6
40.8
41.9
41.7
41.7
41.6
41.9
41.7
42.3
42.6
42.9
43.5
43.6
43.9
43.2
38 8
38 9
39.1
39.5
40 1
40.5
41.9
42 3
2 41.7
39 4
37.4
39.2
38.5
38.9
39.1
38.5
38.7
38.9
39.6
39.5
39.0
38.4
39.2
39.6
39.4
39.9
40.0
40.2
40.4
40.6
39.3
39.8
Unadjusted
Seasonally adjusted
1967: Jan
1929-68
41.1
40.0
39.7
40.1
40.5
41.7
41.1
40.6
40.3
41.8
41.3
40.7
40.6
41.0
40.4
40.5
41.5
40.9
40.6
29.9
39.3
43.1
44.1
43.7
41.9
44.1
43.9
41.4
44.0
42.7
43.1
43.8
42.6
44.3
44.0
42.7
44.3
45.0
43.0
44.7
39.5
39.8
38.8
39.1
38.9
39.4
39.6
39.0
39.7
39.7
39.4
39.3
39.2
39.1
39.1
38.6
38.1
39.9
40.2
39.9
40.6
40.6
41.1
Mn addition to industries shown separately, total includes other mining; other transportation and public utilities;
finance, insurance, and real estate; and services.
2
Nine-month average, April through December, because of new series started in April 1945.
3
Beginning 1947, data include eating and drinking places. Comparable figure excluding eating and drinking places is
41.0 hours for 1947.
4
Eleven-month average; excludes data for July.
Note.—Hours and earnings data in Tables B-28 through B-33 relate to production workers in manufacturing and mining,
to construction workers in contract construction, and generally, to nonsupervisory employees in other industries. See Table
B 31 for unadjusted weekly hours in manufacturing. See also Note, Table B 27.
Source: Department of Labor, Bureau of Labor Statistics.
260
TABLE B-29.—Average gross hourly earnings in selected industries, 1929-68
Total
nonYear or month agricultural
private !
Manufacturing
Total
NonDurable durable
goods
goods
Contract
construction
Retail
trade
Wholesale
trade
Bituminous
coal
mining
Class I
railroads
Telephone
communication
Agricultures
1929._
$0.560
$0.659
$0.241
1930..
1931..
1932..
19331934..
1935..
1936..
1937..
1938..
1939..
.546
.509
.441
.437
.526
.544
.550
.617
.620
.627
$0.492
.467
.550
.571
.580
.667
.679
.691
$0,412
.419
.505
.520
.519
.566
.572
.571
.662
.626
.503
$0.484
19401941..
1942..
1943..
1944..
1945.
1946..
1947..
1948..
1949..
$1,131
1.225
1.275
.655
.726
.851
.957
1.011
1.016
.075
.217
.328
.378
.716
.799
.937
1.048
1.105
1.099
1.144
1.278
1.395
1.453
.590
.627
.709
.787
.844
.886
.995
1.145
1.250
1.295
$1,541
1.713
1.792
.494
.518
.559
.606
.653
.699
.797
4.838
.901
.951
1950..
19511952..
1953..
1954..
1955.
19561957..
1958.
1959.
1.335
1.45
1.52
1.61
1.65
1.71
1.80
1.89
1.95
2.02
.440
.56
.65
.74
.78
1.86
1.95
2.05
2.11
2.19
1.519
1.65
1.75
1.86
1.90
1.99
2.08
2.19
2.26
2.36
1.347
1.44
1.51
1.58
1.62
1.67
1.77
1.85
1.91
1.98
1.863
2.02
2.13
2.28
2.39
2.45
2.57
2.71
2.82
2.93
.983
1.06
1.09
1.16
1.20
1.25
1.30
1.37
1.42
1.47
1960...
1961 —
1962...
1963—
1964...
1965-__
1966...
1967...
1968 p.
2.09
2.14
2.22
2.28
2.36
2.45
2.56
2.68
2.85
2.26
2.32
2.39
2.46
2.53
2.61
2.72
2.83
3.01
2.43
2.49
2.56
2.63
2.71
2.79
2.90
3.00
3.19
2.05
2.11
2.17
2.22
2.29
2.36
2.45
2.57
2.74
3.08
3.20
3.31
3.41
3.55
3.70
3.89
4.11
4.38
1967:Jan
Feb....
Mar..__
Apr
May....
June
2.62
2.63
2.63
2.64
2.66
2.67
2.78
2.79
2.79
2.80
2.81
2.82
2.96
2.96
2.96
2.97
2.99
2.99
2.51
2.53
2.54
2.55
2.55
2.56
July
Aug
Sept....
Oct
Nov_.__
Dec
2.69
2.69
2.72
2.72
2.73
2.73
2.82
2.82
2.85
2.85
2.88
2.91
3.00
3.00
3.03
3.03
3.05
3.09
1968:Jan
Feb....
Mar...
Apr
MayJune
2.76
2.78
2.79
2.80
2.83
2.85
2.94
2.94
2.96
2.97
2.99
3.00
2.86
2.86
2.91
2.92
2.92
2.93
3.00
2.99
3.05
3.06
3.08
3.10
July
Aug
Sept
Oct..._
NOVP..
.485
.651
.720
.768
.828
.849
.858
$0.730
$0.774
.816
.822
.226
.172
.129
.115
.129
.142
.152
.172
.166
.166
.711
.763
.828
.898
.948
.990
1.107
1.220
1.308
1.360
.854
.960
1.030
1.101
1.147
1.199
1.357
1.582
1.835
1.877
.733
.743
.837
.852
.948
.955
1.087
1.186
1.301
1.427
.827
.820
.843
.870
.911
3.962
1.124
1.197
1.248
1.345
.169
.206
.268
.353
.423
.472
.515
.547
.580
.559
1.427
1.52
1.61
1.70
1.76
1.83
1.94
2.02
2.09
2.18
1.944
2.14
2.22
2.40
2.40
2.47
2.72
2.92
2.93
3.11
1.572
1.73
1.83
1.398
1.49
1.59
1.68
1.76
1.82
1.86
1.95
2.05
2.18
.561
.625
.661
.672
.661
.675
.705
.728
.757
.798
1.52
1.56
1.63
1.68
1.75
1.82
1.91
2.01
2.16
2.24
2.31
2.37
2.45
2.52
2.61
2.73
2.88
3.05
3.14
3.12
5
3.12
5 3.15
5 3.30
5 3.49
5 3.66
5 3.75
5 3.84
2.61
2.67
2.72
2.76
2.80
3.00
3.09
3.24
2.26
2.37
2.48
2.56
2.62
2.70
2.79
2.88
3.03
.818
.834
.856
.880
.904
.951
1.03
1.12
1.21
4.03
4.02
4.00
4.00
4.04
4.03
1.97
L98
1.98
1.99
2.00
2.01
2.81
2.83
2.84
2.86
2.86
2.87
3.79
3.71
3.72
3.77
3.73
3.75
3.19
3.26
3.17
3.23
3.19
3.21
2.86
2.88
2.87
2.87
2.88
2.89
2.57
2.57
2.61
2.61
2.62
2.64
4.10
4.11
4.20
4.22
4.22
4.25
2.01
2.00
2.03
2.04
2.05
2.04
2.88
2.87
2.91
2.91
2.93
2.95
3.74
3.76
3.75
3.73
3.79
3.25
3.22
3.27
3.26
3.31
3.33
2.88
2.87
2.90
2.90
2.89
2.91
3.13
3.12
3.14
3.15
3.18
3.18
2.67
2.68
2.69
2.70
2.72
2.73
4,34
4.27
4.28
4.27
4.32
4.29
2.09
2.11
2.12
2.13
2.14
2.16
2.96
3.00
3.01
3.02
3.04
3.05
3.81
3.77
3.77
3.76
3.76
3.80
3.33
3.38
3.35
3.35
3.34
3.40
2.90
2.90
2.91
2.89
2.96
3.05
1.24
3.18
3.17
3.23
3.25
3.27
3.29
2.75
2.75
2.78
2.79
2.80
2.82
4.34
4.38
4.47
4.50
4.52
4.52
2.16
2.16
2.19
2.20
2.21
2.20
3.04
3.05
3.10
3.09
3.12
3.15
3,46
3.04
3.06
1.18
3.76
3.78
3.75
4.09
$0.610
.628
.658
.674
1.88
1.93
1.96
2.12
2.26
2.44
2.54
3.14
3.16
3.18
1.14
"."998
1.10
"i.'iif
i."07~
1.27
* For coverage, see footnote 1, Table B-28.
2 Weighted average of all farm wage rates on a per hour basis.
s Nine-month average, April through December, because of new series started in April 1945.
4
Beginning 1947, data include eating and drinking places. Comparable figure excluding eating and drinking places is
$0,901 for 1947.
s Eleven-month average; excludes data for July.
Note—See Note, Tables B-27 and B-28.
Sources: Department of Labor (Bureau of Labor Statistics) and Department of Agriculture.
26l
TABLE
B-30.—Average
Year or month
Total
nonagricultural
private*
gross weekly earnings i n selected nonagricultural industries,
Manufacturing
Total
Durable
goods
Nondurable
goods
1929
$24.76
$26.84
23.00
20.64
16.89
16.65
18.20
19.91
21 56
23.82
22.07
23.64
24.42
20.98
15.99
16.20
18.59
21.24
23 72
26.61
23.70
26.19
21.40
20.09
17.26
16.76
17 73
18.77
19 57
21 17
20.65
21.36
$45. 58
49.00
50.24
24.96
29.48
36.68
43 07
45.70
44 20
43 32
49.17
53.12
53.88
28.07
33.56
42.17
48.73
51.38
48 36
46.22
51.76
56.36
57.25
21.83
24.39
28.57
33 45
36.38
37 48
40 30
46.03
49.50
50.38
53.13
57.86
60.65
63.76
64.52
67.72
70.74
73.33
75.08
78.78
58.32
63.34
67.16
70.47
70.49
75.70
78.78
81.59
82.71
88.26
62.43
68.48
72.63
76.63
76.19
82.19
85.28
88.26
89.27
96.05
80.67
82.60
85.91
88.46
91.33
95.06
98.82
101.84
107.73
89.72
92.34
96.56
99.63
102.97
107. 53
112.34
114.90
122.51
1967: Jan
Feb
Mar
Apr
May . . .
June
99.82
99.15
99.41
99.26
100. 55
101 73
July
Aug
Sept
Oct
Nov
Dec
1968: Jan
Feb
Mar
Apr
May
June
Retail
trade
Wholesale
trade
$22.47
1930
1931
1932
1933
1934
1935
1936
1937
1938
1939
Contract
construction
1940
1941
1942
1943
1944
1945
1946
1947
1948
1949
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968 p
TIT:
July
Aug
Sept
Oct v
Nov
Dec v
Telephone
communication
$25.11
$21.01
$26.75
25.19
25 44
25.38
26 96
28.36
28.51
28.76
22.04
17 59
13.58
14.21
17 45
18.86
21 89
22.94
19.78
22.99
$31.90
$30 03
31.74
32.14
$58.87
65.27
67.56
21.34
22.17
23.37
24 79
26.77
28 59
32.92
3 33.77
36.22
38.42
29.36
31.36
34.28
37.99
40.76
42 37
46 05
50.14
53.63
55.49
23.74
29.47
33.37
39.97
49.32
50 36
56.04
63.75
69.18
60.63
32.47
34.03
39.34
41.49
46.36
46 32
50.00
55.03
60.11
62.36
32.67
32.88
34.14
36.45
38.54
2 40 12
44 29
44.77
48.92
51.78
53.48
56.88
59.95
62.57
63.18
66.63
70.09
72.52
74.11
78.61
69.68
76.96
82.86
86.41
88.91
90.90
96.38
100.27
103.78
108.41
39.71
42.82
43.38
45.36
47.04
48.75
50.18
52.20
54.10
56.15
58.08
62.02
65.53
69.02
71.28
74.48
78.57
81.41
84.02
88.51
67.46
74.69
75.04
81.84
77.52
92.13
102.00
106. 00
97.57
111.34
64.14
70.93
74.30
76.33
78.74
82.12
88.40
94.24
101. 50
106.43
54.38
58.26
61.22
65.02
68.46
72.07
73.47
76.05
78.72
85.46
97.44
100.35
104.70
108.09
112.19
117.18
122.09
123.60
132.07
80.36
82.92
85.93
87.91
90.91
94.64
98.49
102.03
109. 05
113.04
118.08
122.47
127.19
132.06
138.38
146. 26
154.95
163. 37
57.76
58.66
60.96
62.66
64.75
66.61
68.57
70.95
74.95
90.72
93.56
96.22
99.47
102.31
106.49
111.11
116.06
122. 00
112.41
112.01
114.46
121.43
128.91
140.26
149.74
153. 00
151.68
108.84
112.94
115.87
118.40
121.80
130. 80
135.65
139.97
89.50
93.38
98.95
102.40
105.32
109.08
113.27
113.18
120.59
113.42
111.88
112.44
112.56
113.81
114 49
122.84
120.47
121.36
121.18
122.89
122 89
99.65
99.18
100.08
100. 22
100.73
101 63
149.92
144. 32
147.20
147.60
150.29
153.95
69.15
69.10
69.30
69.45
69.80
71 56
113.81
114.05
114.45
114.97
114.97
115 66
155. 77
148.40
147.68
151.18
151.07
156 38
137.49
143.77
138. 53
135. 34
140.68
140.92
112.97
114.62
111.36
112.22
112.03
113.87
103 03
103.30
103 90
103.36
103.74
103. 74
113.65
114.49
116 85
116.28
117.50
119.60
122.40
123.30
125 75
125.44
125.66
129.16
102. 03
102.80
104.92
104.14
105.06
105. 86
158.67
159.06
162.96
160.78
161.63
155.13
72.96
72.60
71.66
71.20
71.34
72.22
116.93
115.95
117.27
116.98
117.79
119.18
157.00
153.71
152.66
151.13
155.91
156. 53
134.55
141.68
139.63
140. 51
144.98
141.86
114.05
111.93
115.13
115.13
113.87
114.36
102.95
104 53
104.90
104. 44
106.69
108 59
117.60
119 36
120.18
118.21
122.29
123 30
127.70
128. 54
129.68
127.58
132.29
132.92
103.86
106.40
106.79
104.76
108. 26
109.47
151.90
154.57
154.94
159.27
162.43
164.74
72.11
72.80
72.93
73.49
73.40
75.82
118.10
119.40
119.80
119.89
120.99
122.92
155.07
153.06
154. 57
151.90
152.28
157.70
147.52
148.72
143.05
148.41
150.30
146.20
113.68
113.39
113.78
111.55
112.78
121.70
109.25
109 54
110 87
110 38
109 50
110.75
122.10
121 69
125 66
125 77
125 97
127.41
131.02
130.29
135.01
135 85
136 03
137.85
110.00
110 55
112.03
111 88
111 72
113.08
167.52
169.94
172.99
172 80
158.20
168.14
77.33
77.33
75.99
75 46
75.14
76.12
122.82
123.22
124.62
123.91
124.80
126. 32
157.29
153.78
153.47
112 13
160.74
154.66
122.21
122.09
127.48
128.35
130.70
. ...
.
Bitumi- Class 1
nous
railcoal
mining roads
1929-68
1 For coverage, see footnote 1, Table B-28.
2 Nine-month average, April through December, because of new series started in April 1945.
3 Beginning 1947, data include eating and drinking places. Comparable figure excluding eating and drinking places is
$36.94 for 1947.
Note.-See Note, Tables B-27 and B-28.
Source: Department of Labor, Bureau of Labor Statistics.
262
T A B L E B-31.—Average weekly hours and hourly earnings, gross and excluding overtime, in
manufacturing industries, 1939—68
Durable goods manufacturing industries
Ai manufacturing I industries
Average
weekly
hours
Average
weekly
hours
Average hourly
earnings
Average
hourly
earnings
Nondurable goods manufacturing industries
Average
weekly
hours
Average
hourly
earnings
Year or month
ExcludGross
ing
overtime
Gross
$0 627
1939
37.7
1940
1941
1942
1943
1944
1945
1946
1947
1948
1949
38.1
40.6
43.1
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
40 5
1.440
1.56
40.6
40.7
1.65
1.74
40.5
1.78
39 6
1.86
40 7
40.4 37.6 1.95
39.8 37.5 2.05
39.2 37.2 2.11
40.3 37.6 2.19
39.7
39.8
40.4
40 5
40.7
41 2
41.3
40.6
40.7
37.3
37.4
37.6
37.7
37.6
37 6
37.4
37.2
37.1
40.8
40.1
40.3
40.2
40 5
40.6
37.4
36.9
37.1
40.3
40.6
41.0
40.8
40.8
41.1
37.9
Gross
Excluding
overtime
$0.691
39.2
42.0
Gross
Excluding
overtime
37.4
Gross
Excluding
overtime
$0.571
37.0
57.8
63.2
66.1
45.0
46.5
46.5
44.0
40.4
40.5
40.4
39.4
.716
.799 $0.762
.937 .872
1.048 .966
1.105 1.019
1.099 3 1.031
1.144 1.111
1.278 1.24
1.395 1.35
1.453 1.42
1.39
1.51
1.59
1.68
1.73
1.79
1.89
1.99
2.05
2.12
68.2
73.6
77.4
81.6
84.3
86.9
91.5
96.2
100.2
103.4
41.1
41.5
41.5
41.2
40.1
41.3
41.0
40.3
39.5
40.7
38.0
37.9
37.6
38.0
1.519
1.65
1.75
1.86
1.90
i.99
2.08
2.19
2.26
2.36
1.46
1.59
1.68
1.79
1.84
1.91
2.01
2.12
2.21
2.28
39.7
1.347
39.5
1.44
1.51
39.7
1.58
39.6
1.62
39.0
1.67
39.9
39 6 37.2 1.77
39,2 37.0 1.85
38.8 36.6 1.91
39.7 37.0 1.98
1.31
1.40
1.46
1.53
1.58
1.62
1.72
2.26
2.32
2.39
2.46
2.53
2.61
2.72
2.83
3.01
2.20
2.25
2.31
2.37
2.44
2.51
2.59
2.72
2.88
106.8
109.9
112.7
115.5
118.4
121.5
125.6
131.5
139.5
40.1
40.3
40.9
41.1
41.4
42.0
42.1
41.2
41.4
37.7
38.0
38.1
38.2
38.1
38.1
37.8
37,7
37.6
2.43
2.49
2.56
2.63
2.71
2.79
2,90
3.00
3.19
2.36
2.42
2.48
2.54
2.60
2.67
2.76
2.88
3.05
39.2
39.3
39.6
39.6
39.7
40 1
40.2
39.7
39.8
36.7
36.8
36.9
36.9
36.8
36 9
2.05
2.11
2.17
2.22
2.29
2 36
36.8 2.45
36.6 2.57
36.5 2.74
1.99
2.05
2.09
2.15
2.21
2.27
2.35
2.47
2.63
2.78
2.79
2.79
37.1 2.80
37 3 2.81
37.3 2.82
2.67
2.68
2.69
2.70
2.70
2.71
128.9
129.5
129.8
130.4
130.6
131.0
41.5
40.7
41.0
40.8
41.1
41.1
37.8
37.3
37.6
37.6
37.8
37.7
2.96
2.96
2.96
2.97
2.99
2.99
2.84
2.84
2.85
2.86
2 87
2.88
39.7
39.2
39 4
39 3
39 5
39.7
36.7
36.3
36 5
36.4
36 5
36.6
2.51
2.53
2 54
2 55
2.56
2.42
2.44
2.45
2.46
2.46
2.46
37.1
37.2
37.3
37.3
37.4
37.5
2.82
2.82
2.85
2.85
2.88
2.91
2.71
2.71
2.73
2.73
2.76
2.79
131.4
131.7
132.6
133.0
133.9
134.7
40.8
41.1
41.5
41.4
41.2
41.8
37.5
37.6
37.6
37.7
37.7
38.0
3.00
3.00
3.03
3.03
3.05
3.09
2.88
2.88
2.89
2.90
2.93
2.96
39.7
40.0
40.2
39.9
40.1
40.1
36.6
36.7
36.6
36.5
36.8
36.8
2.57
2.57
2.61
2.61
2.62
2.64
2.47
2.47
2.50
2.50
2.52
2.54
40.0
40.6
40.6
39.8
40.9
41.1
1960
1961
1962
1963
1964
1965
1966
1967
1968 '
- -
1967: Jan
Feb
Mar
Apr
May
June
July
Aug
Sept
Oct
Nov
Dec
1968: Jan
Feb
Mar
Apr
May
June
July
Aug
Sept
Nov
32.2
36.7
37.3
37.3
36.9
37.3
37.4
2.94
2.94
2.96
2.97
2.99
3.00
2.83
2.83
2.85
2.86
2.87
2.87
136.1
136.9
137.5
138.2
138.6
138.8
40.8
41.2
41.3
40.5
41.6
41.8
37.3
37.8
37.8
37.5
37.8
37.9
3.13
3.12
3.14
3.15
3.18
3.18
3.00
3.00
3.02
3.03
3.04
3.04
38.9
39.7
39.7
38.8
39.8
40.1
35.9
36.7
36.6
36.1
36.6
36.7
2.67
2.68
2.69
2.70
2.72
2.73
2.57
2.58
2.59
2.61
2.62
2.62
40.7
40.7
41.2
41.1
40.9
37.2
37.1
37.2
37.2
37.1
37.2
3.00
2.99
3.05
3.06
3.08
2.88
2 87
2.90
2.92
2.94
2.96
139.1
139.8
141.2
141.7
142.5
143.4
41.2
41.1
41.8
41.8
41.6
41.9
37.6
37 4
37.6
37.6
37.5
3.18
3.17
3.23
3.25
3.27
40.0
40 2
40.3
40.1
39 9
37.7
3.29
3.05
3 03
3.08
3.09
3.12
3.13
36.6
36 7
36.5
36.6
36 4
36.7
2.75
2 75
2.78
2.79
2 80
2.82
2.63
2.64
2.66
2.67
2.69
2.70
.655
.726 $0.691
.851
793
.881
.957
1.011
.933
1.016 3.949
1.075 1.035
1.217 1.18
1.328 1.29
1.378 1.34
45.0
45.2
43.5
40.3
40.4
40.0
39.1
Oct
Ex- Adjusted
Exclud- hourly
cludearnings,
ing
Gross
ing
(1957overover59=
time
time
100)i
p
Dec *_
41.1
3.10
2
2
2
2
2
2
33.4
37.5
40.8
43.7
45.5
50.4
1
43.1
42.3
40.5
40.2
39.6
38.9
40.1
- Earnings in current prices, adjusted to exclude the effects of overtime and interindustry shifts.
Annual average not available; April used.
3 Eleven-month average; August 1945 excluded because of VJ Day holiday period.
2
Note.—See Note, Tables B-27 and B-28.
See Table B-28 for seasonally adjusted average gross weekly hours.
Source: Department of Labor, Bureau of Labor Statistics.
263
.590
.627 $0,613
.684
.709
.748
.787
.844 .798
.886 3.841
.995 .962
1.145 1.11
1.250 1.21
1.295 1.26
38.9
40 3
42.5
2 55
1.80
1.86
1.92
TABLE B—32.—Average weekly earnings, gross and spendable, total private nonagricultural
industries, in current and 1957-59 prices, 1947-68
Average spendable weekly earnings2
Average gross weekly
earnings
Year or month
Current
prices
1947
1948
1949
1957-59
prices i
Workers with no
dependents
Current
prices
1957-59
prices *
Workers with three
dependents
Current
prices
1957-59
prices *
$45.58
49.00
50.24
$58. 59
58.47
60.53
$39.16
43.11
44.15
$50.33
51.44
53.19
$44.64
48.51
49.74
$57.38
57.89
59.93
1950
1951
1952
1953...
1954
1955
1956
1957
..
1958
1959
53.13
57.86
60.65
63.76
64.52
67.72
70.74
73.33
75.08
78.78
63.40
63.93
65.57
68.41
68.93
72.58
74.70
74.83
74.56
77.62
46.02
48.68
50.07
52.45
53.76
56.27
58.63
60.47
61.83
64.52
54.92
53.79
54.13
56.28
57.44
60.31
61.91
61.70
61.40
63.57
52.04
55.79
57.87
60.31
60.85
63.41
65.82
67.71
69.11
71.86
62.10
61.65
62.56
64 71
65.01
67.96
69.50
69.09
68.63
70.80
1960
1961
1962
1963
1964
1965.
1966
1967 __
1968 v
80.67
82.60
85.91
88.46
91.33
95.06
98.82
101.84
107. 73
78.24
79.27
81.55
82.91
84.49
86.50
87.37
87.57
3 89.11
65.59
67.08
69.56
71.05
75.04
78.99
81.29
83.38
86.71
63.62
64.38
66.00
66.59
69.42
71.87
71.87
71.69
3 71.72
72.96
74.48
76.99
78.56
82.57
86.30
88.66
90.86
95.28
70.77
71.48
73.05
73.63
76.38
78.53
78.39
78.13
3 78. 81
99.82
99.15
99.41
99.26
100. 55
101.73
87.03
86.37
86.44
86.09
86.98
87.70
81.85
81.35
81.54
81.43
82.41
83.30
71.36
70.86
70.90
70.62
71.29
71.81
89.26
88.72
88.93
88.81
89.84
90.78
77 82
77.28
77.33
77.03
77.72
78.26
103.03
103.30
103.90
103.36
103.74
103.74
88.44
88.37
88.73
87.97
88.06
87.77
84.29
84.49
84.95
84.54
84.82
84.82
72.35
72.28
72.54
71.95
72.00
71.76
91.81
92.03
92.50
92.07
92.38
92.38
78.81
78.73
78.99
78.36
78.42
78.16
102.95
104. 53
104.90
104.44
106.69
108. 59
86.80
87.84
87.78
87.11
88.69
89.82
84.23
85.42
85.70
83.91
85.57
86.97
71.02
71.78
71.72
69.98
71.13
71.94
91.75
93.01
93.30
92.68
94.40
95.85
77.36
78.16
78.08
77.30
78.47
79.28
109. 25
109. 54
110.87
110.38
109. 50
110.75
89.92
89.86
90.73
89.81
88.74
87.46
87.67
88.65
88.29
87.64
88.57
71.98
71.92
72.55
71.84
71.02
96.36
96.58
97.59
97.22
96.55
97.50
79.31
79.23
79.86
79.10
78.24
..
1967- Jan
Feb
Mar.
Apr...
May
June
..
..
.
..
July
Aug... .
Sept
Oct
Nov
Dec.
. ... .
.
1968: Jan
Feb
Mar
Apr
May
June
July.. .
Aug
Sept
. .
Oct
Nov p
Dec p
..
..
* Earnings in current prices divided by the consumer price index.
2 Average gross weekly earnings less social security and income taxes.
3 Estimates based on 11-month average of the consumer price index.
Note.—"Total private" consists of manufacturing; contract construction; retail and wholesale trade; mining; transportation and public utilities; finance, insurance, and real estate; and services.
See also Note, Tables B-27 and B-28.
Source: Department of Labor, Bureau of Labor Statistics.
264
TABLE B—33.—Average weekly earnings, gross and spendable, in manufacturing industries, in
current and 1957-59 prices, 1939-68
Average spendable weekly earnings2
Average gross weekly
earnings
Year or month
Current
prices
1957-59
prices 1
Worker with no
dependents
Current
prices
1957-59
prices 1
Worker with three
dependents
Current
prices
1957-59
prices l
1939
$23.64
$48.84
$23.37
$48.29
$23.40
$48.35
1940
1941
1942
1943
1944
1945
1946
1947
1948
1949
24.96
29.48
36.68
43.07
45.70
44.20
43.32
49.17
53.12
53.88
51.15
57.47
64.58
71.43
74.55
70.49
63.71
63.20
63.39
64.92
24.46
27.96
31.80
35.95
37.99
36.82
37.31
42.10
46.57
47.21
50.12
54.50
55.99
59.62
61.97
58.72
54.87
54.11
55.57
56.88
24.71
29.19
36.31
41.33
43.76
42.59
42.79
47.58
52.31
52.95
50.64
56.90
63.93
68.54
71.39
67.93
62.93
61.16
62.42
63.80
58.32
63.34
67.16
70.47
70.49
75.70
78.78
81.59
82.71
88.26
69.59
69.99
72.61
75 61
75.31
81.14
83.19
83.26
82.14
86.96
50.26
52.97
55.04
57.59
58,45
62.51
64.92
66.93
67.82
71.89
59.98
58.53
59.50
61.79
62.45
67.00
68.55
68.30
67.35
70.83
56.36
60.18
62.98
65.60
65.65
69.79
72.25
74.31
75.23
79.40
67.26
65.50
68.09
70.39
70.14
74.80
76.29
75.83
74.71
78.23
89.72
92.34
96.56
99.63
102.97
107. 53
112.34
114.90
122.51
87.02
88.62
91.61
93.37
95.25
97.84
99.33
98.80
3 101.33
72.57
74.60
77.86
79.82
84.40
89.08
91.57
93.28
97.70
70.39
71.59
73.87
74.81
78.08
81.06
80.96
80.21
3 80. 81
80.11
82.18
85.53
87.58
92.18
96.78
99.45
101.26
106.75
77.70
78.87
81.15
82.08
85.27
88.06
87.93
87.07
3 88.30
113.42
111.88
112.44
112.56
113.81
114.49
98.88
97.46
97.77
97.62
98.45
98.70
92.16
91.00
91.42
91.51
92.46
92.97
80 35
79.27
79.50
79.37
79.98
80.15
100.08
98.86
99,30
99.40
100.39
100.93
87.25
86.11
86.35
86.21
86.84
87.01
113.65
114.49
116.85
116.28
117.50
119.60
97.55
97.94
99.79
98.96
99.75
101.18
92.34
92.97
94 76
94.33
95.26
96.85
79.26
79.53
80 92
80.28
80.87
81.94
100.27
100.93
102 83
102.37
103.35
105.04
86.07
86.34
87.81
87.12
87.73
88.87
1968: Jan
Feb
Mar
Apr
May
June
117.60
119.36
120.18
118.21
112.29
123.30
99.16
100.30
100.57
98.59
101.65
101.99
95.33
96.66
97.29
94.07
97.08
97.83
80 38
81.23
81.41
78.46
80 70
80.92
103.43
104.85
105.50
103.23
106.38
107.16
87.21
88.11
88.28
86.10
88.43
88.64
July
Aug
Sept
Oct
Nov
Dec
122.10
121.69
125.66
125.77
125.97
127.41
100.49
99.83
102.83
102.34
102.08
96.94
96.64
99.57
99.65
99.80
100. 86
79.79
79.28
81.48
81.08
80.88
106 23
105.91
108.98
109.06
109.22
110.33
87.43
86.88
89.18
88.74
88.51
.
.
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966 .
1967
1968 v
1967* Jan
Feb
Mar
Apr
May.
June
. .
...
July
. . ..
Aug
Sept
Oct.:::.:;:::::::::::::::
Nov
Dec
* Earnings in current prices divided by the consumer price index.
2 Average gross weekly earnings less social security and income taxes.
Estimates based on 11-month average of the consumer price index.
Note.—See Note, Tables B-27 and B-28.
Source: Department of Labor, Bureau of Labor Statistics.
3
265
TABLE B-34.—Indexes of output per man-hour and related data, private economy, 1947-6
11957-59=100)
Output per man-hour
Output^
Nonfarm industries
Year
Total
private
Farm
Total
Manufacturing
Nonmanufacturing
Man-hours 2
Nonfarm industries
Total
private
Farm
Total
Manufacturing
Nonmanufacturing
Nonfarm industries
Total
private
Farm
Total
Establishment basis 3
1947... 69.0
1948... 72.0
1949... 74.2
49.8
58.0
56.5
74.1
76.5
79.5
72.3
76.4
79.3
75.1
76.3
79.6
67.6
70.8
70.6
82.1
91.8
88.9
66.8
69.8
69.7
69.3
72.7
68.7
65.6
68.3
70.2
1950...
1951...
1952...
1953...
1954...
64.4
64.7
70.3
79.6
83.7
84.4
86.3
87.0
89.6
91.6
85.0
86.9
87.3
90.2
91.8
84.1
85.6
86.7
88.8
91.5
77.9
82.8
84.8
89.1
87.9
93.7
88.9
91.8
96.6
98.6
77.0
82.5
84.5
88.8
87.4
79.7
87.8
89.7
97.1
90.3
75.7
79.8
81.9
84.5
86.0
1955...
1956—
1957...
1958...
1959—
93.9 84.4 95.7 97.2 94.7
94.1 88.0 95.2 96.2 94.3
96.9 93.3 97.2 98.2 96.7
99.8 103.0 99.7 98.1 100.6
103.4 104.8 103.1 103.7 102.9
95.4
97.2
98.6
97.3
104.1
101.0 95.1
100.5 97.1
98.1 98.6
100.5 97.2
101.9 104.2
1960...
1961...
1962___
1963...
1964...
105.0
108.6
113.8
117.9
122.5
110.7
119.4
122.2
133.1
135.5
104.4
107.4
112.3
115.7
120.0
105.5
107.9
114.3
118.9
124.7
103.9
107.4
111.5
114.3
118.0
106.6
108.6
116.0
120.8
127.8
105.8
107.2
106.8
110.1
107.7
1965...
1966...
1967...
1968 p.
126.6
131.4
133.5
137.9
148.1
152.9
171.7
172.1
123.6
127.7
129.0
133.4
129.8
131.6
132.5
136.2
120.5
125.4
127.1
131.9
136.2
144.6
147.5
154.9
114.5
107.2
116.4
114.9
80.3
82.7
84.3
87.8
89.9
95.8
95.1
86.6
87.4
89.5
88.2
91.2 93.8
95.6 101.0
97.1 102.7
99.1 107.7
95.4 98.4
90.0
93.2
94.5
95.2
94.0
100.9 92.2
101.3 94.9
101.7 97.1
93.4 99.1
104.9 103.9
101.6 119.6 99.4 103.8
103.3 114.2 102.0 105.3
101.8 105.1 101.4 103.6
97.5 97.6 97.5 95.2
100.7 97.2 101.1 101.2
97.4
100.6
100.4
98.5
101.0
106.7
108.7
116.5
121.4
128.8
106.4
106.0
116.8
122.7
131.2
106.8
110.1
116.3
120.8
127.7
101.5
100.0
101.9
102.5
104.3
95.6
89.8
87.4
82.7
79.5
102.2
101.2
103.7
104.9
107.3
100.9
98.2
102.2
103.2
105.2
102.8
102.5
104.3
105.7
108.2
137.3
146.6
149.1
157.0
143.9
155.3
156.0
163.0
134.0
142.2
145.7
154.0
107.5
110.1
110.5
112.3
77.3
70.1
67.8
66.8
111.1
114.8
115.6
117.7
110.9
118.0
117.7
119.7
111.2
113.4
114.6
116.8
98.0 164.8
98.4 158.4
95.1 157.3
97.0
100.1
100.6
101.5
97.8
145.6
137.5
130.6
121.4
117.8
90.1
91.3
87.7
Labor force basis *
1947... 67.9
1948... 70.2
1949... 71.9
49.8
58.0
56.1
72.9
74.5
76.8
67.6
70.8
70.6
82.1
91.8
88.9
66.8
69.8
69.7
99.6 164.8
100.8 158.2
98.2 158.6
91.6
93.7
90.8
1950...
1951...
1952...
1953...
1954...
64.1
64.3
69.9
79.1
83.3
82.4
85.7
87.5
90.4
92.8
77.9
82.8
84.8
89.1
87.9
93.7
88.9
8
96.6
98.6
77.0
82.5
84.5
99.2
100.9
100.4
100.8
96.8
93.4
96.3
96.6
98.2
94.2
1955...
1956...
1957...
1958...
1959...
78.5
82.1
84.5
88.4
90.8
94.7 84.0 96.7
94.6 87.5 95.9
97.2 93.3 97.7
99.4 103.1 99.2
103.4 104.7 103.1
87.4
146.2
138.3
1131.3
122.1
118.3
95.4 101.0 95.1
97.2 100.5 97.1
98.1 98.
97.3 100.5 97.2
104.1 101.9 104.2
100.7 120.3 98.3
102.7 114.9 101.2
101.4 105.2 100.9
97.9 97.5 98.0
100.7 97.3 101.1
1960. 104.5
1961
107.3
1962. 113.0
1963
116.7
1964... 121.0
110.7
119.9
|122.3
133.5
135.8
103.1
105.9
111.4
114.4
118.4
106.6
108.6
116.0
120.8
127.8
105.8
107.2
106.8
110.1
107.7
106.7
108.7
116.5
121.4
128.8
102.0
101.2
102.7
103.5
105.6
95.6
89.4
87.3
82.5
79.3
102.8
102.6
104.6
106.1
108.
1965.. 125.0
1966. 130.4
1967. 132.7
1968 v_
138.2
148.3
152.7
171.4
174.0
121.8
126.4
128.1
133.3
136.2
144.6
147.5
154.9
114.5
107.2
116.4
114.9
137.3
146.6
149.1
157.0
108.9
110.9
111.1
112.1
77.2
70.2
67.9
66.1
112.8
115.9
116.4
117.7
1
2
Output refers to gross national product in 1958 prices.
Hours worked by all persons in private industry engaged in production, including man-hours of proprietors and unpaid
family workers.
3 Man-hours estimates based primarily on establishment data.
4
Man-hours estimates based primarily on labor force data.
Note.—For information on sources, methodology, trends, and underlying factors influencing the measures, see Bureau
of Labor Statistics, Department of Labor, Bulletin No. 1249 "Trends in Output per Man-Hour in the Private Economy,
1909-58," December 1959.
Source: Department of Labor, Bureau of Labor Statistics.
266
PRODUCTION AND BUSINESS ACTIVITY
TABLE B—35.—Industrial production indexes, major industry divisions, 1929-68
[1957-59=100]
Year or month
Total
industrial
production
Manufacturing
Mining
Total
Durable
Utilities
Nondurable
1929..
38.4
38.6
38.2
38.3
54.2
12.7
1930..
1931..
1932..
1933..
1934..
1935..
1936..
1937..
1938..
1939..
32.0
26.5
20.7
24.4
26.6
30.7
36.3
39.7
31.4
38.3
31.7
25.9
19.9
23.7
26.0
30.6
36.4
39.7
30.5
37.9
28.4
19.5
11.9
15.5
18.8
24.1
31.2
35.2
22.6
31.4
34.8
32.8
28.9
32.8
33.8
37.4
41.6
44.1
39.1
44.9
47.0
40.3
33.6
38.5
40.3
43.7
50.3
56.7
49.0
53.8
13.1
12.5
11.7
11.5
12.2
13.2
14.9
16.4
16.5
18.3
1940..
1941..
1942..
1943..
1944..
1945..
1946..
1947..
1948..
1949..
43.9
56.4
69.3
82.9
81.7
70.5
59.5
65.7
68.4
64.7
43.8
58.3
73.1
88.7
86.3
73.0
60.0
66.4
68.9
65.1
40.0
57.7
79.9
102.9
100.9
78.2
54.7
64.3
67.0
60.9
47.3
57.6
63.7
70.7
68.2
65.6
64.8
67.2
69.5
68.3
60.1
64.8
67.0
69.0
74.2
73.0
72.2
79.9
84.0
74.5
20.3
22.8
25.6
28.3
30.1
30.6
31.8
36.5
40.8
43.4
1950.
1951..
1952..
1953..
1954..
1955..
1956..
1957..
1958..
1959..
74.9
81.3
84.3
91.3
85.8
96.6
99.9
100.7
93.7
105.6
75.8
81.9
85.2
92.7
86.3
97.3
100.2
100.8
93.2
106.0
74.1
83.5
88.5
99.9
88.4
101.9
104.0
104.0
90.3
105.6
76.0
78.5
80.0
83.6
83.6
91.6
95.4
96.7
96.8
106.5
812
91.3
90.5
92.9
90.2
99.2
104.8
104.6
95.6
99.7
49.5
58.4
61.2
66.8
71.8
80.2
87.9
93.9
98.1
108.0
I960..
1961..
1962..
1963..
1964..
1965..
1966..
1967..
1968*.
108.7
109.7
118.3
124.3
132.3
143.4
156.3
158.1
165.3
108.9
109.6
118.7
124.9
133.1
145.0
158.6
159.7
166.8
108.5
107.0
117.9
124.5
133.5
148.4
164.8
163.7
169.9
109.5
112.9
119.8
125.3
132.6
140.8
150.8
154.6
162.8
101.6
102.6
105.0
107.9
111.5
114.8
120.5
123.8
126.3
115.6
122.3
131.4
140.0
151.3
160.9
173.9
184.9
202.1
Seasonally adjusted
1967: Jan..
Feb..
Mar.
Apr.
May.
June.
158.3
156.7
156.6
156.7
155.6
155.7
160.2
158.5
158.3
158.3
157.2
157.1
165.5
162.9
162.6
162.5
162.2
161.4
153.5
153.0
153. 0
153.0
151.0
151.6
123.9
123.1
121.9
122.5
120.8
123.6
180.2
180.2
181.8
183.0
183.2
183.9
July.
Aug.
Sept.
Oct..
Nov.
Dec.
156.4
158.3
156.8
157.2
159.8
162.1
157.4
159.5
158.1
158.5
161.3
164.1
162.3
163.6
161.0
160.7
164.1
168.1
151.3
154.4
154.5
155.8
157.7
159.0
127.7
128.2
124.5
122.8
124.1
122.8
184.6
185.4
185.6
188.7
191.5
192.6
1968: Jan..
Feb..
Mar.
Apr..
May.
June.
161.2
162.0
163.0
162.5
164.2
165.8
162.7
163.6
164.6
163.7
165.8
167.3
167.2
167.6
168.2
167.2
169.8
171.0
157.1
158.6
160.0
159.5
160.8
162.7
121.6
123.9
126.2
127.1
126.9
129.2
196.7
199.0
198.0
196.5
196.1
197.9
July.
Aug.
Sept.
Oct..
Nov.
Dec i
166.0
164.6
165.1
165.7
167.4
168.9
167.4
165.7
166.3
167.0
168.7
170.1
170.8
167.8
168.7
169.3
171.4
172.6
163.0
163.0
163.3
165.0
165.3
167.0
130.0
129.4
127.0
120.7
126.5
127.1
199.3
202.1
204.8
208.4
210.0
212.5
Source: Board of Governors of the Federal Reserve System.
267
T A B L E B—36.—Industrial production indexes, market groupings, 1947—68
[1957-59=1001
Materials
Final products
Year or month
Total
industrial
production
Consumer goods *
Total
Total
Equipment
Automotive
products
Home
goods
Total,
including
defense
Business
Total
Durable
goods
Nondurable
goods
1947
1948
1949
65.7
68.4
64.7
64.2
66.6
64.5
67.1
69.2
68.8
69.4
72.6
72.0
68.8
71.7
66.3
55.4
58.3
52.0
69.9
72.6
63.5
67.0
70.2
64.8
68.2
71.0
64.2
64.9
68.2
64.2
1950
1951
1952
1953
1954. .
74.9
81.3
84.3
91.3
85.8
72.8
78.6
84.3
89.9
85.7
78.6
77.8
79.5
85.0
84.3
90.6
80.1
72.1
91.3
85.0
91.4
78.7
78.8
90.2
86.0
56.4
78.4
94.1
100.5
88.9
68.0
83.1
94.1
96.6
85.1
76.9
83.8
84.3
92.6
85.9
79.5
87.8
88.9
100.7
88.4
73.3
78.8
79.0
84.1
83.3
1955
1956
1957
1958
1959..
96.6
99.9
100.7
93.7
105.6
93.9
98.1
99.4
94.8
105.7
93.3
95.5
97.0
96.4
106.6
118.3
97.8
105.2
86.7
108.1
97.3
100.9
96.6
92.8
110.7
95.0
103.7
104.6
91.3
104.1
91.9
104.7
105.3
89.8
104.9
99.0
101.6
101.9
92.7
105.4
104.7
105.3
104.8
90.0
105.1
93.0
97.7
98.9
95.4
105.7
1960
1961
1962....
1963
1964
108.7
109.7
118.3
124.3
132.3
109.9
111.2
119.7
124.9
131.8
111.0
112.6
119.7
125.2
131.7
123.2
111.8
131.1
141.2
145.1
110.8
112.2
122.2
129.6
141.1
107.6
108.3
119.6
124.2
132.0
110.2
110.1
122.1
128.3
139.1
107.6
108.4
117.0
123.7
132.8
106.6
104.8
114.1
121.2
131.2
108.7
112.2
120.0
126.3
134.4
1965
1966
1967
1968 P
143.4
156.3
158.1
165.3
142.5
155.5
158.3
165.0
140.3
147.5
148.5
156.6
167.2
163.0
149.1
174.2
154.8
168.9
166.0
175.5
147.0
172.6
179.4
182.9
156.7
181.2
182.8
184.9
144.2
157.0
157.8
165.7
144.3
156.9
151.9
157.8
144.1
157.2
163.9
173.8
Seasonally adjusted
158.3
156.7
156.6
156.7
155.6
155.7
158.3
157.0
157.2
157.6
156.4
156.8
148.3
146.2
146.8
147.6
146.1
147.0
147.0
135.7
144.6
151.3
145.8
151.2
168.0
164.1
162.7
158.9
158.5
156.6
179.9
180.3
179.6
179.1
178.4
177.9
186.9
186.6
184.4
183.5
182.1
181.3
158.4
156.2
155.4
155.9
154.6
155.2
155.4
151.8
151.1
151.0
149.7
149.1
161.6
160.8
159.8
161. C
159.7
161.4
July
Aug
SeDt
Oct
Nov
Dec
156.4
158.3
156.8
157.2
159.8
162.1
156.8
158.6
156.9
157.0
160.1
162.1
146.9
149.1
147.0
148.2
150.2
153.0
155.2
161,1
142.1
145.2
152.4
170.0
157.3
163.6
164.4
166.4
170.8
168.3
178.2
179.1
178.1
176.0
181.5
181.5
180.8
181.4
179.8
176.9
183.5
183.4
155.9
158.1
157.1
157.7
160.1
162.0
149.3
151.8
148.6
148.6
152.4
155.1
162.7
164.6
166. C
167.0
168.1
169.2
1968- Jan
Feb
Mar
Apr
May
June
161.2
162.0
163.0
162.5
164.2
165.8
160.8
162.0
163.5
161.7
163.0
165.2
151.3
152.9
155.0
153.5
154.6
156.8
164.2
162.7
173.4
168.7
178.1
180.7
169.1
171.5
172.9
170.1
170.4
173.4
181.4
181.6
181.8
179.4
181.1
183.2
183.3
182.9
183.3
180.9
182.5
184.3
161.7
161.8
162.8
163.1
165.2
166.7
154.9
155.4
156.7
157.1
159.4
160.4
168.7
168.3
169.1
169.3
171.2
173.9
166.0
164.6
165.1
165.7
167.4
168.9
164.7
164.8
165.7
166.4
167.4
168.2
156.4
156.8
157.3
158.5
158.9
159.4
180.4
177.1
175.6
178.9
180.2
177.3
171.5
174.6
175.9
176.7
178.4
182.6
181.9
183.6
183.3
185.7
187.1
183.4
182.4
185.2
187.1
190.0
192
167.4
164.2
165.1
165.5
167.5
169.6
159.8
153.3
153.3
155.3
158.0
160
175.3
175.5
177.2
176.0
178.3
180
1967: Jan
Feb
Mar
Apr
May
June
. . .
July
Aug
Sept
Oct
Nov
Dec P
* Also includes apparel and consumer staples, not shown separately.
Source: Board of Governors of the Federal Reserve System.
268
TABLE B—37.—Industrial production indexes, selected manufactures, 1947—68
[1957-59=100]
Nondurable manufactures
Durable manufactures
Year or
month
1947
1948
1949
Fabricated
Primary metal
metals products
Machinery
Transportation
equipment
Instruments
and related
products
Clay,
glass,
and
lumber
Textile,
Furni- apparel,
ture
Paper
and
and
and
miscel- leather printing
prodlaneous
ucts
Chemical,
petroleum,
and
rubber
products
Foods,
beverages,
and
tobacco
90.7
94.3
79.4
75.9
77.2
69.8
65.3
66.5
59.0
42.9
46.9
47.1
53.7
55.2
49.2
75.8
79.7
72.3
73.5
77.4
71.6
81.0
84.5
80.6
66.7
69.4
69.3
47.5
50.8
49.4
80.7
80.0
80.8
99.9
108.7
99.3
112.5
91.3
85.4
91.2
89.0
100.3
90.2
72.7
83.0
92.1
100.5
87.7
56.4
62.9
73.1
91.7
83.8
57.3
65.7
78.1
85.3
82.9
87.7
92.0
89.3
92.7
89.6
83.7
80.2
82.4
89.7
86.8
89.1
87.4
89.5
90.7
86.9
76.7
79.4
77.7
82.6
85.0
60.7
67.4
69.9
75.2
74.7
83.6
85.4
87.3
88.2
89.8
1955
1956
1957
1958
1959
118.4
116.4
112.2
87.5
100.4
98.3
98.8
101.5
92.9
105.5
96.5
107.1
104.2
88.8
107.1
102.0
97.4
106.4
89.5
104.0
88.7
95.4
98.0
92.1
109.9
100.7
102.0
97.5
94.1
108.5
97.9
101.0
97.6
93.3
109.0
95.5
98.0
96.9
95.0
108.1
92.5
97.1
97.8
97.0
105.2
86.8
91.4
95.6
95.5
108.9
93.1
96.6
96.7
99.4
103.9
1960
1961
1962
1963
1964
101.3
98.9
104.6
113.3
129.1
107.6
106.5
117.1
123.4
132.7
110.8
110.4
123.5
129.2
141.4
108.2
103.6
118.3
127.0
130.7
116.5
115.8
123.0
130.2
136.4
105.7
104.5
109.3
114.4
121.1
113.3
114.1
124.5
129.1
138.4
107.5
108.4
115.1
118.5
125.2
109.0
112.4
116.7
120.1
127.5
113.9
118.9
131.2
141.8
152.5
106.6
110.2
113.3
116.8
120.8
1965
1966
1967
1968 v
137.6
142.7
132.5
137.1
147.8
163.0
161.9
168.2
160.5
183.8
183.4
184.5
149.2
166.9
165.7
179.6
151.4
176.5
184.8
184.2
127.6
132.9
130.7
137.1
151.8
165.0
162.6
169.8
135.8
141.6
139.4
145.2
135.3
146.4
149.6
155.4
164.6
181.9
190.0
207.2
123.4
128.1
131.7
134.1
1950
1951
1952..
1953
1954
.
Seasonally adjusted
1967: Jan
Feb....
Mar
Apr
May....
June
132.6
131.9
129.2
129.0
128.9
129.0
166.7
165.0
162.9
161.0
160.7
160.8
190.3
186.8
184.5
182.1
180.5
177.5
162.6
157.5
162.6
165.7
167.5
169.3
186.2
183.4
185.8
187.6
185.3
184.1
128.6
128.9
128.3
129.7
127.9
126.8
166.3
163.9
162.4
162.9
162.3
161.5
140.6
137.7
136.9
135.7
135.5
134.7
148.4
148.7
149.5
149.9
149.1
149.4
186.6
187.0
186.9
186.5
182.2
184.1
131.5
131.1
131.3
132.9
131.0
131.3
July....
Aug
Sept....
Oct.....
Nov
Dec
128.7
129.5
129.0
131.7
134.9
140.9
159.8
159.1
158.1
158.2
159.8
162.4
180.0
182.9
182.2
179.6
183.2
182.2
170.8
171.9
159.2
159.2
165.6
177.5
182.9
183.2
183.1
183.2
185.4
186.3
127.4
127.0
129.6
131.4
132.4
137.0
159.1
159.9
161.4
160.9
161.5
163.3
134.9
137.2
138.8
140.1
142.8
146.0
148.6
150.3
148.5
148.6
149.9
149.7
184.7
191.7
192.9
195.3
197.6
199.5
130.0
131.0
130.1
131.4
132.1
133.4
1968: Jan
Feb....
Mar
Apr.. .
May....
June
136.3
139.3
140.2
143.3
148.5
148.6
163.9
165.7
166.6
161.4
165.0
166.1
183.4
183.2
183.3
179.4
179.9
181.7
175.6
175.1
177.6
175.3
180.4
182.6
186.7
184.7
183.8
181.4
181.2
181.3
132.5
130.7
128.8
138.0
137.7
137.1
165.2
166.9
166.9
166.5
169.8
169.5
141.0
141.9
143.9
142.9
144.1
145.2
148.6
150.6
152.0
151.6
154.5
155.2
197.7
200.2
201.6
200.9
203.1
206.6
132.0
133.1
133.7
133.6
132.9
134.5
July....
Aug
Sept
Oct
Nov....
Dec p . . .
145.8
122.8
120.6
123.0
129.6
136
166.2
166.3
167.6
172.2
173.6
175
182.7
183.8
186.4
186.1
188.4
189
183.2
181.7
180.5
180.4
179.9
179
179.2
182.6
184.3
185.8
188.3
190
136.2
135.5
138.8
139.7
140.0
142
169.5
170.1
170.9
171.3
171.7
172
144.2
144.1
144.8
146.2
147.2
148
155.6
156.5
156.8
157.6
158.6
160
208.2
207.6
207.9
211.7
212.5
215
134.2
134.4
134.5
134.7
133.4
135
Source: Board of Governors of the Federal Reserve System.
269
323-166 O—69
-18
TABLE B-38.—Manufacturing output, capacity, and utilization rate, 1948-68
Utilization rate 2
Output
Capacity»
Period
Total
Advanced
products
1957-59 output=100
Primary
products
Percent
1948.
1949.
68.9
65.1
76.8
81.1
89.7
80.2
87.9
80.3
92.2
80.0
1950.
1951.
1952.
1953.
1954.
75.8
81.9
85.2
92.7
86.3
84.3
87.4
92.7
98.4
103.3
90.4
94.0
91.3
94.2
83.5
87.3
91.0
91.9
94.1
83.8
94.8
98.1
90.4
94.4
83.0
1955.
1956.
1957.
1958.
1959.
97.3
100.2
100.8
93.2
106.0
108.4
114.3
120.7
125.8
130.1
90.0
87.7
83.6
74.0
81.5
87.8
86.0
82.3
73.6
81.0
93.2
90.1
85.3
74.6
82.1
I960.
1961.
1962.
1963.
1964.
10a.9
10!). 6
118.7
124.9
133.1
134.9
139.6
144.4
149.8
155.6
80.6
78.5
82.1
83.3
85.7
81.1
78.9
82.5
83.1
84.4
80.0
78.1
81.6
83.6
87.4
1965.
1966.
1967.
1968
145.0
158.6
159.7
166.8
164.0
175.0
186.1
196.8
88.5
90.5
85.3
84.4
87.6
90.5
85.9
83.7
89.7
90.5
84.6
85.5
Seasonally adjusted
116.6
118.6
119.7
119.9
142.4
143.7
145.1
146.4
82.0
82.4
82.4
81.8
81.4
82.8
83.3
82.5
82.7
81.9
81.1
80.7
1963: I—-
II—
III..
IV...
121.3
124.9
126.0
127.2
147.8
149.1
150.5
151.8
82.0
83.9
83.7
83.7
82.2
82.9
83.6
83.7
81.7
85.2
83.9
83.8
1964: I . . . .
II...
III..
IV...
129.4
132.5
134.7
135.9
153.3
154.9
156.4
158.0
84.5
85.7
86.3
86.2
83.8
84.7
84.9
84.4
85.5
87.1
88.3
88.8
1965: I . . . .
II...
III..
IV...
141.4
143.5
146.1
148.9
160.1
162.7
165.3
167.9
88.5
88.4
88.5
88.6
87.2
87.1
87.4
88.7
90.2
90.1
90.1
88.5
1966: I - . .
II...
III..
IV...
154.5
157.7
159.9
161.7
170.7
173.6
176.5
179.3
90.5
90.8
90.6
90.0
90.2
90.4
90.6
90.6
90.9
91.4
90.6
89.1
1967: I . . .
II...
III..
IV...
159.0
157.5
158.3
161.3
182.1
184.8
187.5
190.1
87.1
85.0
84.3
84.8
87.8
86.2
85.1
84.3
86.2
83.4
83.2
85.6
1968: I v...
II *..
III*.
IV p.
163.6
165.6
166.5
168.7
192.8
195.5
198.2
200.9
84.9
84.8
84.0
84.1
84.4
83.6
83.5
83.2
85.5
86.5
84.6
85.3
1962: l.._II —
III
IV
» For description and source of data see "A Revised Index of Manufacturing Capacity," Frank de Leeuw, Frank E. Hopkins,
and Michael D. Sherman, "Federal Reserve Bulletin," November 1966, pp. 1605-1615. See also McGraw-Hill surveys on
"Business Plans for New Plants and Equipment" for data on capacity and operating rates.
2 Output as percent of capacity; based on unrounded data.
Source: Board of Governors of the Federal Reserve System (output) and sources in footnote 1 (capacity and utilization
rate).
270
TABLE B-39.—Business expenditures for new plant and equipment, 1939 and 1945-69
[Billions of dollars]
Manufacturing
Year or quarter
Total i
Total
Durable
goods
Transportation
Nondurable
goods
Mining
Railroad
Other
Public
utilities
Commercial
and
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
28.32
26.83
7 49
10 85
11.63
11.91
11.04
3 14
5.17
5.61
5.65
5.09
4 36
5.68
6.02
6.26
5.95
.71
.93
.98
.99
.98
1 11
1.47
1.40
1.31
.85
1 21
1 49
1.50
1.56
1.51
3.31
3.66
3.89
4.55
4.22
6 78
7.24
7.09
8.00
8.23
1955
1956
1957
1958
1959
28.70
35.08
36.96
30.53
32.54
11.44
14.95
15.96
11.43
12.07
5.44
7.62
8.02
5.47
5.77
6.00
7.33
7.94
5.96
6.29
.96
1.24
1.24
.94
.99
.92
1.23
1.40
.75
.92
1.60
1.71
1.77
1.50
2.02
4.31
4.90
6.20
6.09
5.67
9.47
11.05
10.40
9.81
10.88
1960
1961
1962
1963
1964
35.68
34.37
37.31
39.22
44.90
14.48
13.68
14 68
15.69
18.58
7.18
6.27
7 03
7.85
9.43
7.30
7.40
7.65
7.84
9.16
.99
.98
1.08
1.04
1.19
1.03
.67
.85
1.10
1.41
1.94
1.85
2.07
1.92
2.38
5.68
5.52
5.48
5.65
6.22
11.57
11.68
13.15
13.82
15.13
51.96
60.63
61.66
64.53
22.45
26.99
26.69
26.78
11.05
13.00
13.00
13.19
1.30
1.47
1.42
1.49
1.73
1.98
1.53
1.51
2.81
3.44
3.88
4.46
6.94
8.41
9.88
11.38
16.73
18.36
18.25
18.91
.
. .
1965
1966
1967
19683
.
.
11.40
13.99
13.70
13.58
Seasonally adjusted annual rates
58.00
60.10
61.25
62.80
1967: 1
III
IV
1968: 1
II
III
IV3
1969: |3
11 3
_
13.15
13.85
14.35
14.50
12.45
12.95
13.20
13.25
1.40
1.55
1.45
1.45
1.75
2.00
1.85
2.35
3.30
3.50
3.40
3.50
8.25
8.30
8.55
8.50
17.70
17.95
18.45
19.25
27.85
27.00
26.15
26.00
14.20
13 75
13.50
13.50
13.70
13.25
12.65
12.55
1.40
1.30
1.45
1.50
1.80
1.55
1.40
1.40
3.05
3.90
4.10
4.45
9.20
9.70
9.80
10.65
18.30
18.05
17.95
18.70
64.75
62.65
63.45
67.25
III
IV
25.60
26.80
27.55
27.75
61.65
61.50
60.90
62.70
1966' 1
26.35
25.80
26.65
28.10
13.65
12.80
13.65
14.15
12.70
13.00
13.05
13.90
1.55
1.40
1.35
1.60
1.65
1.45
1.40
1.50
4.35
3.65
4.60
5.35
11.60
11.65
10.90
11.45
19.20
18.70
18.50
19.25
71.15
69.80
29.60
29.70
15.10
15.40
14.50
14.30
1.55
1.80
4.30
13.20
20.65
40^10
1 Excludes agriculture.
2 Commercial and other includes trade, service, finance, communications, and construction.
' Estimates based on anticipated capital expenditures reported by business in late October and November 1968. The
quarterly anticipations include adjustments, when necessary, for systematic tendencies in anticipatory data.
Note.—Annual total is the sum of unadjusted expenditures; it does not necessarily coincide with the average of seasonally
adjusted figures.
These figures do not agree precisely with plant and equipment expenditures included in the gross national product
estimates of the Department of Commerce. The main difference lies in the inclusion in the gross national product of investment by farmers, professionals, institutions, and real estate firms, and of certain outlays charged to current account.
These series are not available for years prior to 1939 and for 1940 to 1944.
Sources: Department of Commerce (Office of Business Economics) and Securities and Exchange Commission.
271
TABLE B-40,—New construction activity, 1929-68
[Value put in place, millions of dollars]
Private construction
Public construction
i
Total
new
construction
Year or month
Residential building (nonfarm)
Nonresidential building and other
construction
Total
Total
Total*
New
housing
units
Total
Commercial 2
Industrial
Federally
owned
State
and
locally
owned *
Others
1929
. . 10,793
8,307
3,625
3,040
4,682
1,135
949
2,598
2,486
155
2,331
1930
1931
1932
1933
1934
1935
1936
1937
1938
1939
8,741
6,427
3,538
2,879
3,720
4,232
6,497
6,999
6,980
8,198
5,883
3,768
1,676
1,231
1,509
1,999
2,981
3,903
3,560
4,389
2,075
1,565
1,570
1,320
893
532
1,010
1,565
1,875
1,990
2,680
485
290
380
710
1,210
1,475
1,620
2,270
1,416
2,028
1,570
1,709
221
74
176
191
158
266
492
232
254
2,858
2,659
1,862
1,648
2,211
2,233
3,516
3,096
3,420
3,809
209
454
223
130
173
211
290
387
285
292
2,383
1,528
630
470
625
3,808
2,203
1,046
2,649
2,388
1,529
1,132
1,585
1,419
2,719
2,320
2,703
3,050
8,682
11,957
14,075
8,301
5,259
5,809
12,627
5,054
6,206
3,415
1,979
2,186
3,411
10,396
2,985
3,510
1,715
2,560
3,040
1,440
1,276
4,752
348
409
155
33
56
203
442
801
346
156
208
642
3 ; 300
2,069
2,696
1,700
1,094
1,371
2,135
5,644
1,153
14,308
20,041
. 26,078
26,722
12,077
16,722
21,374
20,453
6,247
9,850
13,128
12,428
4,795
7,765
10, 506
10,043
5,830
6,872
8,246
8,025
1,153
33,575
35,435
36,828
39,136
41,380
46,519
47,601
49,139
50,153
55,305
26,709
26,180
26,049
27,894
29,668
34,804
34,869
35,080
34,696
39,235
18,126
15,881
15,803
16,594
18,187
21,877
20,178
19, 006
19,789
24,251
15, 551
13,207
12,851
13,411
14,931
18,242
16,143
14,736
15,445
19,233
1960
1961
1962
1963
53,941
55,447
59,576
62,755
38,078
38,299
41,707
43,859
21,706
21,680
24,292
25,843
New series «
1962
1963
1964
....
1965
1966
1967
1968 7
59,667
63,423
66,200
72,319
75,120
76,160
84,167
41,798
44,057
45,810
50,253
51,120
50,587
56,611
24,292
26,187
26,258
26,268
23,971
23,736
28,422
...
..
1940
1941
1942
1943
1944
1945
1946
Mew series 5
1946
1947
1948
1949
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
. .
...
885
815
761
884
989
1,149
1,053
1,163
1,689
1,107
1,290
2,802
3,628
5,751
10,660
6,322
3,073
2,398
2,231
1,397
1,182
1,689
1,702
1,397
972
2,988
4,213
5,452
5,871
2,231
3,319
4,704
6,269
8,583
10,299
10,246
11,300
11,481
12,927
14,691
16, 074
14,907
14,984
1,415
1,498
1,137
1,791
2,212
3,218
3,631
3,564
3,589
3,930
1,062
2,117
2,320
2,229
2,030
2,399
3,084
3,557
2,382
2,106
6,106
6,684
6,789
7,280
7,239
7,310
7,976
8,953
8,936
8,948
16,410
16,189
18,638
20,064
16,372
16,619
17,415
18,016
4,180
4,674
4,955
5,200
2,851
2,780
2,949
2,962
18,638
20,385
20,354
20,351
17,964
17,885
22,374
17,506
17,870
19, 552
23,985
27,149
26,851
28,189
5,144
4,995
5,396
6,739
6,879
6,982
8,297
2,842
2,906
3,565
5,118
6,679
6,131
5,649
710
570
720
See footnotes at end of table.
749
455
520
620
860
272
957
1,279
1,486
1,199
905
271
333
516
626
814
797
776
717
759
1,182
3,751
9,313
5,609
2,505
1,737
2,446
2,000
1,347
713
568
661
865
1,366
865
840
1,177
1,488
1,366
2.479
3,527
4,781
6,866
9,255
10,779
11,242
11,712
11,715
12,732
14,059
15,457
16,070
1,624
2,981
4,185
4,139
3,428
2,769
2,726
2,974
3,387
3,724
5,242
6,274
6,594
7,103
8,284
8,946
10,006
11,085
12,070
12,346
9,341
9,165
9,511
9,854
15,863
17,148
17,869
18,896
3,622
3,879
3,913
3,970
12,241
13,269
13,956
14,926
9,520
9,969
10,591
12,128
13,591
13,738
14,243
17,869
19,366
20,390
22,066
24,000
25,573
27,556
3,913
4,010
3,905
4,018
3,957
3,512
3,415
13,956
15,356
16,485
18,048
20,042
22,061
24,141
TABLE B-40.—New construction activity,
1929-68—Continued
[Value put in place, millions of dollars]
Private construction
Residential building (nonfarm)
Total
Year or month
new
construction
Public construction
Nonresidential building and other
construction
Total
Total
New
Total*
housing
units
Total
Commercial 2
Industrial
Federally
owned
Others
State
and
locally
owned 4
Seasonally adjusted annual rates
1967: Jan
Feb....
Mar....
Apr
May....
June...
74,561
74,525
73,382
72,801
73,655
73,774
48,777
48,277
47, 557
47,023
48,076
48,737
19,873
20,148
20,652
20,924
21,638
22,631
14,203
14,531
15,070
15,514
16,298
17,042
28,904
28,129
26,905
26,099
26,438
26,106
7,804
7,525
7,198
7,000
7,062
6,779
7,218
6,962
6,098
5,737
5,850
5,807
13,882
13,642
13,609
13,362
13,526
13,520
25,784
26,248
25,825
25,778
25, 579
25,037
3,739
3,473
3,512
3,227
3,409
3,272
22,045
22,775
22,313
22, 551
22,170
21,765
July....
Aug
Sept....
Oct.....
Nov....
Dec
75,738
76,741
78,253
78,883
79,609
81,207
50,380
51,641
52,841
53,520
53,946
53,965
23,850
25,015
25,770
26,427
27,222
27,635
17,760
18,688
19,523
20,406
21,286
21,757
26,530
26,626
27,071
27,093
26,724
26,330
6,782
6,576
6,732
6,996
7,018
6,688
6,133
6,061
6,395
6,173
5,681
5,822
13,615
13,989
13,944
13,924
14,025
13,820
25,358
25,100
25,412
25,363
25,663
27,242
3,704
3,566
3,528
3,486
3,603
3,655
21,654
21,534
21,884
21,877
22,060
23,587
1968: Jan
Feb....
Mar....
Apr
May....
June...
82,873
83,884
83,572
85,299
85,707
82,050
55,316
55,380
56,055
57,403
57,260
54,981
26,988
26,754
27,698
29,320
29,628
28,187
21,226
21,282
21,677
22,300
22,312
21,450
28,328
28,626
28,357
28,083
27,632
26,794
7,721
8,328
8,258
8,512
8,111
8,122
6,330
5,740
5,528
5,484
5,275
4,852
14,277
14,558
14,571
14,087
14,246
13,820
27,557
28, 504
27,517
27,896
28,447
27,069
3,528
3,692
3,561
3,381
3,436
3,287
24,029
24,812
23,956
24,515
25,011
23,782
July....
Aug
Sept....
Oct.....
Nov *>.._
Dec 7....
81,328
83,551
84,504
87,151
86,730
87,600
54,658
56,497
57,242
59,455
58,878
59,600
27,440
28,140
29,148
30,019
30,363
31,050
21,248
21,919
22,771
23,562
23,898
24,550
27,218
28,357
28,094
29,436
28,515
28,500
8,272
8,641
8,534
8,939
7,962
7,950
4,752
5,575
5,492
6,096
6,398
6,400
14,194
14,141
14,068
14,401
14,155
14,150
26,670
27,054
27,262
27,696
27,852
28,000
3,052
3,384
3,340
3,539
3,458
3,400
23,618
23,670
23,922
24,157
24,394
24,650
1
Total includes additions and alterations and nonhousekeeping units not shown separately.
2 Office buildings, warehouses, stores, restaurants, and garages.
3 Farm, institutional, public utilities, and all other private.
4
Includes Federal grants-in-aid for State and locally owned projects.
* New series in 1946 reflects differences due to the new higher level series of housing starts and farm construction expenditures and the reduced level value in place series for public utilities. See "Construction Report C30-61 ( S u p p l e m e n t ) "
for a description of the differences.
6 New series differs from old in that it reflects differences in 1962 due to the introduction of new series for private nonresidential buildings and differences in 1963 due to the introduction of new series for State and locally owned public
construction. See "Construction Report C30-65S" for a description of the differences.
7 Preliminary estimates by Council of Economic Advisers.
Source: Department of Commerce, Bureau of the Census, except as noted.
273
TABLE B-41.—New housing starts and applications for financing, 1929-68
[Thousands of units]
Housing starts
Private and
public i
Private i
Total (farm and nonfarm)
Year or
month
Total
(farm
and
nonfarm)
Proposed
home construction s
Nonfarm
Type of
structure2
Nonfarm
Government
home programs
New
private
housing
units
authorized <
Total
Total
One
family
Two or
more
families
FHA3
V
A
AppliRecations quests
for
for
FHA
VA
comappraismitals
ments 3
1929
509.0
509.0
1930
1931
1932
1933
1934
1935
1936
1937
1938
1939
330.0
254.0
134.0
93.0
126.0
221.0
319.0
336.0
406.0
515.0
330 0
254.0
134.0
93.0
126.0
215.7
304.2
332.4
399.3
458.4
13.2
48.8
57.0
106.8
144.7
6 20 6
47 8
49 8
131 1
179.8
1940
1941
1942
1943
1944
602.6
706.1
356.0
191.0
141.8
529.6
619.5
301.2
183.7
138.7
176.6
217.1
160 2
126.1
83.6
231.2
288 5
238.5
144 4
62.9
326.1
1,023.2
1,268.5
1,362.1
1,466.1
324.9
1,015.2
1,265.1
1,344.0
1,429.8
38.9
67.1
178.3
216.4
252.6
7 8.8
91.8
160.3
71.1
90.8
56.6
121.7
286.4
293.2
327.0
1,908.1
1,419.8
1,445.4
1,402.1
1,531.8
1,626.6
1,324.9
1,174.8
1,314.2
282.7 1,494.6
328.2
186.9
229.1
216.5
250.9
268.7
183.4
150.1
270.3
307.0
191.2
148.6
141.3
156.5
307.0
392.9
270.7
128.3
102.1
109.3 1,208.3
397.7
192.8
267.9
253.7
338.6
306.2
197.7
198.8
341.7
369.7
164.4
226.3
251.4
535.4
620.8
401.5
159.4
234.2
234.0
257.4
338.6
471.4
589.6
557.8
509.1
386.5
447.7
1,230.1
1,284.8
1,439.0
1,582.9
1,502.3
1,450.6
1,141.5
1,268.4
225.7
198.8
197.3
166.2
154.0
159.9
1?9.1
141.9
998.0
1,064.2
1,186.6
1,334.7
1,285.8
1,239.8
971.9
1,141.0
242.4
243.8
221.1
190.2
182.1
188.9
153.0
167.2
142.9
177.8
171.2
139.3
113.6
102.1
99.2
124.3
414.7 1,189.3
562.3 1,382.8
132.7
137.2
.
.-
New series
1945
1946
1947
1948
1949
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
.
1,951.9
1,491.0
1,503.9
1,437.6
1,550. 5
1,646.0
1,349.1
1,223.9
1,382. 0
1,553.5 1,531.3 1,516.8 1,234.1
1,296.0
1960
1,365.0
1961
1,492.4
1962
1,642.0
1963
1,561.6
1964 _
1,509.6
1965
1,196.2
1966
1,321.9
1967
First 11 months:
1967
1,238.8
1968 v
1,442.7
1,274.0
1,336.8
1,468.7
1,614.8
1,534.7
1,487.5
1,172.8
1,298.8
1,252.1
994.7
1,313.0
974.4
1,462.7
991.3
1,610.3 1,020.7
1,529.3
971.5
1,472.9
963.8
1,165.0
778.5
1,291.6
843.9
1,216.7 1,211.5
1,419.5 1,406.0
796. 8
843.7
74.6
83.3
77.8
71.0
59.2
49.4
36.8
52.5
1,055.9
8 56.0 1,234.6
s 168. 5 8131.7
Monthly totals, unadjusted
1967:Jan
Feb....
Mar....
Apr
May
June
July
Aug
Sept
Oct
Nov
Dec
61.7
63.2
92.9
115.9
134.2
131.6
60.4
62.0
90.7
114.2
131.9
129.6
59.1
61.4
91.5
113.7
132.0
125.4
40.2
40.3
66.6
79.8
87.3
87.6
18.9
21.1
24.9
33.9
44.7
37.8
57.7
60.2
89.2
112.0
129.7
123.4
8.6
8.3
11.1
11.0
14.8
14.3
3.1
2.9
3.9
4.1
4.7
5.2
58.5
57.0
91.4
99.5
111.2
115.5
10.1
10.7
16.6
14.8
16.0
16.3
7.1
7.7
10.3
11.0
10.9
12.8
126.1
130.2
125.8
137.0
120.2
83.1
124.9
126.5
123.4
134.6
118.6
82.1
125.3
127.4
121.9
135.4
118.4
80.1
82.3
83.7
78.2
81.7
69.1
47.0
43.0
43.7
43.7
53.7
49.3
33.1
124.0
123.6
119.5
133.1
116.8
79.1
12.3
13.9
12.6
14.1
11.7
9.4
4.8
5.6
4.8
5.3
4.5
3.6
97.1
110.6
103.4
111.8
99.8
85.2
12.7
17.1
14.6
15.3
12.9
10.2
12.2
11.6
10.8
12.5
9.5
7.9
See footnotes at end of table.
274
TABLE B-41.—New housing starts and applications for financing, 1929-68—Continued
[Thousands of units]
Housing starts
Private and
public^
Year or
month
Proposed
Private
Total (farm and nonfarm)
Total
(farm
and
nonfarm)
Nonfarm
struction5
1
Nonfarm
Type of
structure 2
Government
home programs
Total
Total
One
family
Two or
more
families
FHA3
V
A
New
private
housing AppliReunits
author- cations quests
for
for
ized*
FHA
VA
comapmitpraisments 3 als
Monthly totals, unadjusted
82.7
87.2
128.6
165.2
145.1
142.9
82.0
85.3
126.0
162.2
143.3
141.1
80.5
84.6
126.6
162.0
140.9
137.9
45.2
55.4
79.3
98.0
86.8
81.4
35.3
29.2
47.3
64.0
54.1
56.5
79.8
82.8
123.9
159.1
139.0
136.0
9.7
10.6
12.0
14.3
13.8
12.3
3.4
4.1
4.5
5.4
5.5
5.0
73.4
88.8
115.5
132.4
130.5
113.9
11.2
12.4
15.9
14.7
15.7
13.7
8.4
10.6
11.6
12.4
11.0
10.4
142.5
July
141.0
Aug
Sept.... 139.8
Oct p . . . 142.5
Nov p . . . 125.0
140.0
138.9
138.0
139.8
123.0
139.8
136.6
134.3
140.0
122.7
86.4
82.5
80.2
85.1
63.3
53.4
54.1
54.1
54.9
59.4
137.3
134.5
132.4
137.3
120.7
12.9
13.6
12.1
14.5
11.4
4.9
4.8
4.6
5.3
4.2
4.3
118.0
113.7
116.3
127.6
101.2
13.2
15.1
13.9
17.1
13.5
12.0
12.5
11.5
10.4
12.7
11.4
9.0
1968: Jan
Feb
Mar....
Apr
May....
June...
Dec p
Seasonally adjusted annual rates
1967' Jan
Feb
Mar
Apr
May
June
July
Aug
Sept
Oct
Nov . .
Dec
1968: Jan..
Feb
Mar
Apr.
May....
June
July .Aug
Sept.. .
Oct p
NOVP . .
1,111
1 149
1,094
1,116
1,274
1,233
806
802
774
759
839
849
305
347
320
357
435
384
1,079
1,132
1,067
1,099
1,254
1,214
146
134
126
125
143
144
50
47
49
50
49
51
1,010
946
985
1,089
1,093
1,174
153
137
151
159
162
169
109
107
103
122
109
135
1 369
1,407
1 445
1 496
1,590
1,250
862
875
923
913
952
797
507
532
522
583
638
453
1 356
1,381
1 415
1,478
1,567
1,235
140
141
150
155
154
149
53
57
56
58
54
55
1,159
1,189
1 223
1,253
1,222
1,390
155
180
176
185
189
162
1,456
1,537
1,511
1,591
1,364
1,365
912
1,075
920
922
838
790
544
462
591
669
526
575
1,430
1,499
1,479
1,562
1,345
1,348
157
164
149
147
133
137
52
63
63
59
57
54
1,148
1,394
1,416
1,340
1,280
1,281
163
152
160
144
161
157
146
122
131
151
136
125
122
141
127
126
110
120
1,531
1,518
1,592
1,562
1,677
904
867
944
960
885
627
651
648
602
792
1,507
1,496
1,570
1,533
1,649
134
144
145
153
158
49
51
54
55
53
64
1,289
1,290
1,393
1,378
1,390
146
167
168
198
211
184
135
127
125
147
172
135
Dec p
1
Military housing starts, including those financed with mortgages insured by FHA under Section 803 of the National
Housing Act, are included in publicly financed starts but excluded from total private starts and from FHA starts.
2
Not available prior to 1959 except for nonfarm for 1929-44.
3 Units are for 1-4 family housing.
< Data beginning 1967 cover approximately 13,000 permit-issuing places. Data for 1963-66 are based on 12,000 places
and 1959-62,10,000 places. The addition of approximately 1,000 permit-issuing places contributed an increase of 3 percent
in 8
total permit authorizations.
Units in mortgage applications or appraisal requests for new home construction.
6
FHA program approved in June 1934: all 1934 activity included in 1935.
7
Monthly estimates for September 1945-May 1950 were prepared by Housing and Home Finance Agency.
8
January-December average.
Sources: Department of Commerce (Bureau of the Census), Department of Housing and Urban Development, Federal
Housing Administration (FHA), and Veterans Administration (VA), except as noted.
275
TABLE B-42.—Sales and inventories in manufacturing and trade, 1947—68
[Amounts in millions of dollars]
Total manufacturing
and trade
Manufacturing
Merchant wholesalers
Retail trade
Year or month
Sales i
InvenRatio 3 Sales i
tories 2
Inventories 2
Ratio 3 Sales i
Inven-
tories2
Ratio 3
Sales i
Inventories 2
Ratio 3
1947..
1948..
1949-
35,260
33,788
52,507
49,497
1.42
1.53
15,513 25,897
17,316 28,543
16,126 26,321
1.58
1.57
1.75
6,!
6,514
7,957
7,706
1.13
1.19
10,200 14,241
11,135 16,007
11,149 15,470
1.26
1.39
1.41
1950..
195U.
1952..
19531954..
38,596
43,356
44, 840
47,987
46,443
59,822
70,242
72,377
76,122
73,175
1.36
1.55
1.58
1.58
1.60
18,634
21,714
22,529
24,843
23,355
1.48
1.66
1.78
1.76
1.81
7,695 9,284
8,597 9,886
8,782 10,210
9,052 10,686
8,993 10,637
1.07
1.16
1,12
1.17
1.18
12,268
13,046
13,529
14,091
14,095
19,460
21,050
21,031
21,488
20,926
1.38
1.64
1.52
1.53
1.51
1955..
1956..
1957..
1958..
1959..
51,694
54,063
55,879
54,233
59,661
79,516
87,304
89,052
86,922
91,891
1.47
1.55
1.59
.-,
.60
.50
26,480 45,069
27,740 50,642
28,736
_-,.--, 51,871
27,280 50,070
30,219 52,707
I960..
1961..
1962..
1963..
1964..
60,746
61,133
65,417
68,969
73,685
94,747
95,728
101,149
105, 525
111,548
.56
.54
.51
1.49
1.47
30,796
30,896
33,113
35,032
37,335
53,814
54,943
58,212
60,027
63,370
1.79
1.74
1.72
1.69
1.64
1965...
1966...
1967_..
1968 4.
80,276
87,184
88,962
97,127
121,140
,184
137;
143,772
153,193
1.45
1.48
1.58
1.53
41,003
44,876
45,712
50,447
68,179
78,125
82,819
88,182
1.60 15,595 18,274
1.62 16,979 20,691
1.77 17,099 21,635
1.70 18,338 22,523
31,078
39,306
41,136
43,948
41,612
1.62 9,893
1.73 10,513
1.80 10,475
1.84 10,257
1.70 11,491
11,678
13,260
12,730
12,739
13,879
1.13 15,321 22,769
1.19 15,811 23,402
1.23 16,667 24,451
1.24 16,696 24,113
1.15 17,951 25,305
1.43
1.47
1.44
1.43
1.40
11,656
11,988
12,674
13,382
14, 527
14,120
14,488
14.936
16,048
16,977
1.22 18,294 26,813
1.20 18,249 26,297
1.16 19,630 28,001
1.15 20, 556 29,450
1.13 21,822 31,201
1.45
1.44
1.38
1.39
1.40
1.14
1.14
1.22
1.20.
23,677 34,687
25.330 38,368
26,151 39,318
28,342 42,488
1.40
1.44
1.47
1.44
Seasonally adjusted
1967: Jan
Feb....
Mar...
Apr.—
May-..
June—
87,987
87,365
87,664
87,684
87,998
89,292
138,251
138,729
139,149
139,681
139,924
139,866
1.57
1.59
1.59
1.59
1.59
1.57
45,011
44,948
45,021
44,744
45,281
45,579
79,084
79,730
80,128
80,612
81,203
81,119
1.76
1.77
1.78
1.80
1.79
1.78
17,239
16,897
16,853
16,972
16,769
17,117
20,780
20,742
20,859
20,785
20,587
20,599
1.21
1.23
1.24
1.22
1.23
1.20
25,737
25,520
25,790
25,968
25,948
26, 596
38,387
38,257
38,162
38,284
38,134
38,148
1.49
1.50
1.48
1.47
1.47
1.43
July...
Aug--_
Sept..Oct....
Nov...
Dec.—
88,679
90,135
89,987
89,043
90,759
91,970
140,336
140,895
141,246
141,461
142,554
143,772
1.58
1.56
1.57
1.59
1.57
1.56
45,038
46,471
45,884
45,748;
46,955
47,961
81,478
81,853
81,719
81,968
82,389
82,819
1.81
1.76
1.78
1.79
1.75
1.73
17,145
17.198
17,330
17,195
17,419
17,641
20,511
20,789
20,810
20,945
21,061
21.635
.20
.21
.20
.22
.21
1.23
26,496
26,466
26,773
26,100
26,385
26,368
38,347
38,253
38,717
38,548
39,104
39,318
1.45
1.45
1.45
1.48
1.48
1.49
1.56
1.54
1.53
1.55
1.54
1.52
48,447
48, 356
48,446
48,755
50,014
50,729
82,890
83,408
83,759
84,382
85,278
85, 582
1.71
1.72
1.73
1.73
1.71
1.69
17,694
17,953
18,021
18,006
17,897
18,374
21,641
21,623
21,618
21,863
21,924
22,098
1.22
1.20
1.20
1.21
1.22
1.20
26,936
27,512
28,145
27,675
28,132
28,451
39,575
39,788
39,776
40,242
40,606
40,842
1.47
1.45
1.41
1.45
1.44
1.44
149- 063 1.51
1.54
149,923
1.52
150,725
1.53
152,122
153,193 -..1.53
51,425
49, 825
51,441
52,560
52,685
85,829
86,713
87,109
87,566
88,182
1.67
1.74
1.69
1.67
1.67
18,269
18,498
18, 792
18,418
18,866
22,169
22,200
22,192
22,336
22,523
1.21
1.20
1.18
1.21
1.19
28,802
29,037
28, 863
28,706
28,891
28,273
41,065
41,010
41,424
42,220
42,488
1.43
1.41
1.44
1.47
1.47
1968: Jan._-_
Feb....
Mar...
Apr....
May...
June...
July...
Aug...
Sept--.
Oct....
Nov *._
Dec p...
93,077 144,106
93,821 144,819
94,612 145,153
94,436 146,487
96,043 147,808
97, 554 148, 522
98,496
97,360
99,096
99,684
100,442
T
1 Monthly average for year and total for month.
2 Seasonally adjusted, end of period.
3 Inventory/sales ratio. For annual periods, ratio of weighted average inventories to average monthly sales; for monthly
data, ratio of inventories at end of month to sales for month.
< Where December data not available, data for year calculated on basis of no change from November.
Note.—The inventory figures in this table do not agree with the estimates of change in business inventories included
in the gross national product since these figures cover only manufacturing and trade rather than all business, and show
inventories in terms of current book value without adjustment for revaluation.
Source: Department of Commerce (Office of Business Economics and Bureau of the Census).
276
TABLE B-4r3.—Manufacturers' shipments and inventories, 1947-68
[Millions of dollars]
Shipmentsl
Inventories 2
Durable goods industries
Year or month
Total
DuraNonble
durable
goods goods
indus- industries
tries
Materials
Work
Finand
in
ished
sup- process goods
plies
Total
Total
8,819 25,897 13,061
9,738 28,543 14,662
8,935 26,321 13,060
Nondurable goods industries
Total
Materials
Work
Finand
in
ished
sup- process goods
plies
1947
1948
1949
15,513
17,316
16,126
6,694
7,579
7,191
1950
1951
1952
1953
1954
18,634
21,714
22,529
24,843
23,355
8,845
10,493
11,313
13,349
11,828
9,789
11,221
11,216
11,494
11,527
31,078
39,306
41,136
43,948
41,612
15,539
20,991
23,731
25,878
23,710
1955
1956
1957
1958
1959
26,480
27,740
28,736
27,280
30,219
14,071
14,715
15,237
13,572
15,544
12,409
13,025
13,499
13,708
14,675
45,069
50,642
51,871
50,070
52,707
26,405 9,194 10,756
30,447 10,417 12,317
31,728 10,608 12,837
30,095 9,847 12,294
31,839 10,585 12,952
1960
1961
1962 . .
1963
1964
30,796
30,896
33,113
35,032
37,335
15,817
15,544
17,103
18,247
19,634
14,979
15,352
16,010
16,786
17,701
53,814
54,943
58,212
60,027
63,370
32,360
32,518
34,609
35,807
38,433
10,286
10,241
10,803
10,997
11,928
12,780 9,190
13,221 9,056
14,210 9,596
15,000 9,810
16,254 10,251
21,454 9,113
22,425 9,463
23,603 9,837
24,220 9,999
24,937 10,179
2,935 9,353
3,192 9,770
3,303 10,463
3,412 10,809
3,519 11,239
___. 41,003 22,216
18,788
20,240
20,739
22,753
68,179
78,125
82,819
88,182
42,204
49,797
53,540
57,124
13,285
15,484
15, 592
16,695
18,144
21,976
24,675
26,198
10,775
12,337
13,273
14,231
25,975
28,328
29,279
31, 058
10,478
11,266
11,247
11,557
3,823
4 255
4,496
4,854
11,674
12,807
13,536
14,647
12, 505
12,650
12,778
12,942
13,080
13,105
28,546
28,680
28,788
28,966
29,125
29,084
1965
1966
1967
1968 3
44,876 24,635
-
- 45,712 24,973
50,447 27,694
12,836
13,881
13,261
8,966 10,720
7,894 9,721
15,539
18,315
17,405
6,206 18,070
6,040 17,902
8,317
8,167
2,472
2,440
7,409
7,415
18,664
20,195
20,143
19,975
20,868
8,556
8,971
8,775
8,671
9,089
2,571
2,721
2,864
2,800
2,928
7,666
8,622
8,624
8,498
8,857
6,348
7,565
8,125
7,749
8,143
Seasonally adjusted
45,011
44,948
45,021
44,744
45,281
45,579
24,575
24,485
24,516
24,207
24,655
24,979
20,436
20,463
20,505
20,537
20,626
20,600
79,084
79,730
80,128
80,612
81,203
81,119
50, 538
51,050
51,340
51,646
52,078
52,035
15,643
15,667
15,643
15,544
15,460
15,377
22,390
22,733
22,919
23,160
23,538
23,553
11,324
11,337
11,414
11,376
11,427
11,435
4,293
4,309
4,329
4,353
4,364
4,393
12,929
13,034
13,045
13,237
13,334
13,256
Sept__Oct—
Nov
Dec
45,038
46,471
45,884
45,748
46,955
47,961
24,417
25,759
25,171
24,802
25, 538
26,610
20,621
20,712
20,713
20,946
21,417
21,351
81,478
81,853
81,719
81,968
82,389
82,819
52,461
52,801
52,582
52,867
53,283
53,540
15,479
15,510
15,369
15,446
15,532
15,592
4,371
4,393
4,369
4,396
4,444
4,496
13,200
13,228
13,376
13,385
13,382
13, 536
1968: Jan
Feb
Mar
Apr
May....
June
48,447
48,356
48,446
48,755
50,014
50,729
26,925
26,711
26,844
26,888
27,509
27,633
21,522
21,645
21,602
21,867
22,505
23,096
82,890
83,408
83,759
84,382
85,278
85,582
53,525
54,009
54,295
54,724
55,234
55,442
15,489
15,648
15,840
16,071
16,379
16,498
4,482
4,497
4,508
4,522
4,604
4,619
13,577
13,653
13,829
13,909
14,128
14,188
July
Aug
Sept....
Oct
Nov ".—
51,425
49,825
51,441
52,560
52,685
28,211
26,837
27,985
28,960
28,917
23,214
22,988
23,456
23,600
23,768
85,829
86,713
87,109
87, 566
88,182
55,461
56,069
56,458
56,657
57,124
16,753
16,781
16,704
16,763
16,695
23,755 13,227 29,017 11,446
23,905 13,386 29,052 11,431
23,954 13,259 29,137 11,392
24,173
29,101 11,320
24,428
29,106 11,280
24,675
29,279 11,247
13,273
24,641 13,395 29,365 11,306
24,926 13,435 29,399 11,249
25,078 13,377 29,464 11,128
25,214 13,439 29,658 11,228
25,392 13,463 30,044 11,312
25,490 13,454 30,140 11,333
25,237 13,471 30,368 11,366
25,544 13,744 30,644 11,508
25,772 13,982 30,651 11,511
25,825 14,069 30,909 11,609
26,198 14,231 31,058 11,557
4,682
4,729
4,679
4,724
4,854
14,320
14,407
14,461
14,576
14,647
1967: Jan
Feb
Mar
Apr.....
May
June
July
Aug
$3
1 Monthly average for year and total for month.
Book value, seasonally adjusted, end of period.
Where December data not available, data for year calculated on basis of no change from November.
Source: Department of Commerce, Bureau of the Census.
2
3
277
TABLE B-44.—Manufacturers*
new and unfilled orders, 1947-68
[Amounts in millions of dollars]
New orders1
Unfilled orders 2
Durable goods
industries
Year or month
Nondurable
goods
industries
Total
Total
Machinery and
equipment
Total
Durable
goods
industries
Nondurable
goods
industries
Unfilled orders-shipments ratio 3
Total
Durable
goods
industries
Nondurable
goods
industries
1947
1948
1949
15,256
17,692
15,614
6,388
8,126
6,633
8,868
9,566
8,981
34,415
30,717
24,506
28,532
26,601
20,018
5,883
4,116
4,488
1950
1951
1952
1953
1954
20,110
23,907
23,203
23,533
22,313
10,165
12,841
12,061
12,105
10,743
2,084
1,770
9,945
11,066
11,142
11,428
11,570
43,055
69,785
75,649
61,178
43,266
36,838
65,835
72,480
58,637
45,250
6,217
3,950
3,169
2,541
3,016
3.42
4.12
0.96
1955
1956
1957
1958
1959
27,423
28,383
27,514
26,901
30,679
14,954
15,381
14,073
13,170
15,951
2,499
2,870
2,566
2,354
2,878
12,469
13,002
13,441
13,731
14,728
60,004
67,375
53,183
48,882
54,494
56,241
63,880
50,352
45,739
50,654
3,763
3,495
2,831
3,143
3,840
3.63
3.87
3.35
2.60
2.85
4.27
4.55
4.00
3.49
3.44
1.12
1.04
.85
.55
1960
1961
1962
1963
1964
30,115
31,085
33,005
35,322
37,952
15,223
15,698
17,026
18,522
20,258
2,791
2,854
3,090
3,412
3,935
14,892
15,387
15,979
16,800
17,694
46,133
48,485
47,351
50,960
58,536
43,401
45,336
44,531
47,980
55,652
2,732
3,149
2,820
2,980
2,884
2.58
2.52
2.46
2.41
2.50
3.21
3.02
2.96
2.89
2.99
.63
.75
.68
.65
.59
41,803
45,938
45,928
50,672
22,986
25,710
25,189
27,924
4,435
5,268
5,250
5,822
18,817
20,228
20,739
22,748
68,208
81,072
83,686
85,684
64,980
77,987
80,578
82,607
3,228
3,085
3,108
3,077
2.63
2.92
2.83
3.13
3.50
3.39
.62
.56
.53
1965...
1966..
1967
1968*
-.-
I
Seasonally adjusted
1967: Jan..
Feb..
Mar..
Apr_.
MayJune.
44.362
44,526
43,966
44,553
45,876
46,332
23,945
24,148
23,540
24,039
25,301
25,768
5,072
5,022
4,982
5,081
5,090
5,376
20,417
20,378
20,426
20,514
20,575
20,564
80,423
80,001
78,946
78,755
79,350
80,103
77,357
77,020
76,044
75,876
76,522
77,311
3,066
2,981
2,902
2,879
2,828
2,792
2.92
2.92
2.88
2.92
2.90
2.90
3.51
3.50
3.46
3.53
3.50
3.48
0.56
.55
.54
.53
.52
.51
July..
Aug..
Sept.
Oct..
Nov_.
Dec.
45,606
46,654
45,942
46,655
47,320
49,463
24,921
25,879
25,177
25,679
25,852
28,056
5,376
5,471
5,350
5,314
5,372
5,495
20,685
20,775
20,765
20,976
21,468
21,407
80,671
80,854
80,912
81,819
82,184
83,686
77,815
77,935
77,941
78,818
79,132
80,578
2,856
2,919
2,971
3,001
3,052
3,108
2.94
2.84
2.90
2.94
2.86
2.83
3.54
3.40
3.48
3.54
3.44
3.39
.52
.53
.54
.53
.53
.53
1968: Jan..
Feb..
Mar..
Apr..
May..
June.
48,353
48,453
49,566
49,237
49,650
49,850
26,837
26,814
28,005
27,373
27,172
26,701
5,466
5,380
5,382
5,492
5,447
5,968
21,516
21,639
21,561
21,864
22,478
23,149
83,592
83,689
84,809
85,291
84,927
84,048
80,490
80, 593
81,754
82,239
81,902
80,970
3,102
3,096
3,055
3,052
3,025
3,078
2.80
2.79
2.82
2.83
2.78
2.72
3.37
3.36
3.39
3.41
3.36
3.28
.52
.52
.52
.50
.49
.50
50,181
50,201
51,877
53,931
53,384
26,925
27,329
28,381
30,280
29,635
5,714
6,027
5,916
6,550
6,263
23,256
22,872
23,496
23,651
23,749
82,806
83,184
83,617
84,991
85,684
79,684
80,177
80,572
81,894
82,607
3,122
3,007
3,045
3,097
3,077
2.64
2.79
2.67
2.64
2.66
3.17
3.38
3.24
3.19
3.21
.50
.50
.48
.48
.48
July...
Aug...
Sept..
Oct...
Nov *>-
1
Monthly average for year and total for month.
2 Seasonally adjusted, end of period.
3 Ratio of unfilled orders at end of period to shipments for period. Annual figures relate to seasonally adjusted data
for December.
* Where December data not available, data for year calculated on basis of no change from November.
Source: Department of Commerce, Bureau of the Census.
278
PRICES
TABLE B^-5.—Consumer price indexes, by major groups, 1929-68
For city wage earners and clerical workers
[1957-59 = 100)
Housing
Year or month
All
ems
Food
Total
Rent
Apparel
and
upkeep
Transportation
Medical
care
'ersonal
care
Reading Other
and
goods
recreaand
tion
services
1929..
59.7
55.6
85.4
55.3
1930..
1931..
1932..
1933..
1934..
1935..
1936..
1937..
1938..
1939..
58.2
53.0
47.6
45.1
46.6
47.8
48.3
50.0
49.1
48.4
52.9
43.6
36.3
35.3
39.3
42.1
42.5
44.2
41.0
39.9
56.3
57.1
59.1
60.1
59.7
83.1
78.7
70.6
60.8
57.0
56.9
58.3
60.9
62.9
63.0
54.1
49.2
43.6
42.1
46.1
46.5
46.9
49.3
49.0
48.3
49.4
49.8
50.6
51.0
49.8
49.4
49.6
50.0
50.2
50.2
42.6
43.2
45.7
46.7
46.5
50.2
51.0
52.5
54.3
54.4
52.7
52.6
54.0
54.5
55.4
1940..
1941..
1942..
1943..
1944..
1945,
1946-.
1947.
1948.
1949-
48.8
51.3
56.8
60.3
61.3
62.7
68.0
77.8
83.8
83.0
40.5
44.2
51.9
57.9
57.1
58.4
66.9
81.3
88.2
84.7
59.9
61.4
64.2
64.9
66.4
67.5
69.3
74.5
79.8
81.0
63.2
64.3
65.7
65.7
65.9
66.1
66.5
68.7
73.2
76.4
48.8
51.1
59.6
62.2
66.7
70.1
76.9
89.2
95.0
91.3
49.5
51.2
55.7
55.5
55.5
55.4
58.3
64.3
71.6
77.0
50.3
50.6
52.0
54.5
56.2
57.5
60.7
65.7
69.8
72.0
46.4
47.6
52.2
57.6
61.7
63.6
68.2
76.2
79.1
78.9
55.4
57.3
60.0
65.0
72.0
75.0
77.5
82.5
86.7
89.9
57.1
58.2
59.9
63.0
64.7
67.3
69. r
75.4
78.9
81.2
1950.
1951.
1952,
1953.
1954,
1955.
1956.
1957.
1958.
1959.
83.8
90.5
92.5
93.2
93.6
93.3
94.7
98.0
100.7
101.5
85.8
95.4
97.1
95.6
95.4
94.0
94.7
97.8
101.9
100.3
83.2
88.2
89.9
92.3
93.4
94.1
95.5
98.5
100.2
101.3
79.1
82.3
85.7
90.3
93.5
94.8
96.5
98.3
100.1
101.6
90.1
98.2
97.2
96.5
96.3
95.9
97.8
99.5
99.8
100.6
79.0
84.0
89.6
92.1
90.8
89.7
91.3
96.5
99.7
103.8
73.4
76.9
81.1
83.9
86.6
88.6
91.8
95.5
100.1
104.4
78.9
86.3
87.3
88.1
88.5
90.0
93.7
97.1
100.4
102.4
89.3
92.0
92.4
93.3
92.4
92.1
93.4
96.9
100.8
102.4
82.6
86.1
90.6
92.8
94.3
94.3
95.8
98.5
99.8
101.8
1960--.
1961...
1962...
1963.-.
1964...
1965...
1966..
1967-..
1968 1..
103.1
104.2
105.4
106.7
108.1
109.9
113.1
116.3
120.9
101.4
102.6
103.6
105.1
106.4
108.8
114.2
115.2
119.2
103.1
103.9
104.8
106.0
107.2
108.5
111.1
114.3
118.8
103.1
104.4
105.7
106.8
107.8
108.9
110.4
112.4
114.9
102.2
103.0
103.6
104.8
105.7
106.8
109.6
114.0
119.8
103.8
105.0
107.2
107.8
109.3
111.1
112.7
115.9
119.6
108.1
111.3
114.2
117.0
119.4
122.3
127.7
136.7
144.6
104.1
104.6
106.5
107.9
109.2
109.9
112.2
115.5
120.0
104.9
107.2
109.6
111.5
114.1
115.2
117.1
120.1
125.5
103.8
104.6
105.3
107.1
108.8
111.4
114.9
118.2
123.5
1967: Jan..
Feb..
Mar..
Apr..
May..
June.
114.7
114.8
115.0
115.3
115.6
116.0
114.7
114.2
114.2
113.7
113.9
115.1
113.1
113.3
113.3
113.6
113.9
114.1
111.4
111.7
111.8
111.9
112.1
112.2
111.3
111.9
112.6
113.0
113.8
113.9
113.4
113.8
114.2
115.1
115.5
115.7
132.9
133.6
134.6
135.1
135.7
136.3
113.8
114.1
114.4
114.9
115.0
115.3
118.5
118.6
118.9
119.4
119.6
119.7
116.2
116.3
116.4
116.6
116.7
116.9
July..
Aug..
Sept..
Oct...
Nov..
Dec.
116.5
116.9
117.1
117.5
117.8
118.2
116.0
116.6
115.9
115.7
115.6
116.2
114.3
114.7
115.0
115.3
115.5
116.0
112.4
112.6
112.8
113.0
113.2
113.5
113.7
113.8
115.1
116.0
116.6
116.8
116.2
116.4
116.8
117.7
118.3
117.9
136.9
137.5
138.5
139.0
139.7
140.4
115.5
116.1
116.4
116.5
116.9
117.2
119.8
120.0
120.5
121.4
122.0
122.2
117.8
118.8
119.7
120.3
121.0
121.4
Jan..
Feb..
Mar..
Apr_.
May__
JuneJuly..
Aug..
Sept.
Oct..
Nov..
118.6
119.0
119.5
119.9
120.3
120.9
117.0
117.4
117.9
118.3
118.8
119.1
116.4
116.9
117.2
117.5
117.8
118.7
113.7
113.9
114.2
114.4
114.6
114.9
115.9
116.6
117.6
118.4
119.5
119.9
118.7
118.6
119.0
119.0
119.1
119.7
141.2
141.9
142.9
143.5
144.0
144.4
117.6
117.6
118.4
119.0
119.6
120.1
122.7
123.0
124.2
124.9
125.3
125.6
121.9
122.1
122.4
122.5
122.6
123.5
121.5
121.9
122.2
122.9
123.4
120.0
120.5
120.4
120.9
120.5
119.5
120.1
120.4
120.9
121.7
115.1
115.4
115.7
116.0
116.3
119.7
120.3
122.2
123.3
124.0
119.8
120.0
119.5
120.6
121.2
145.1
145.5
146.4
147.4
148.2
120.4
120.9
121.5
122.1
122.8
125.9
126.3
126.7
127.5
128.0
123.9
124.2
124.4
125.1
125.4
1968:
i January-November average.
Source: Department of Labor, Bureau of Labor Statistics.
279
TABLE B-46.—Consumer price indexes, by special groups, 1935-68
For city wage earners and clerical workers
[1957-59=100]
Commodities
Year or
month
All
items
All
items
less
food
All
items
less
shelter
Services
Commodities less food
All
commodities
Food
Ail
Durable
Nondurable
Total
nondurable
All
;ervices
Rent
Ail
services
less
rent
47.8
48.3
50.0
49.1
48.4
52.5
53.0
54.9
55.5
55.1
46.1
46.7
48.2
46.8
46.0
45.0
45.6
47.4
45.6
44.7
42.1
42.5
44.2
41.0
39.9
50.2
50.8
53.0
53.0
52.1
47.1
47.8
50.8
51.7
50.6
48.8
49.2
51.2
50.9
50.1
44.5
45.1
46.8
44.7
43.8
52.2
52.8
54.4
55.4
55.5
56.9
58.3
60.9
62.9
63.0
49.3
49.0
49.5
49.9
49.9
48.8
51.3
56.8
60.3
61.3
62.7
68.0
77.8
83.8
83.0
55.3
56.9
60.9
62.6
65.0
66.5
69.4
75.8
81.3
82.1
46.3
49.1
55.3
59.5
60.5
62.1
68.4
79.4
85.6
84.1
45.1
48.2
55.2
60.1
60.8
62.6
69.4
83.4
89.4
87.1
40.5
44.2
51.9
57.9
57.1
58.4
66.9
81.3
88.2
84.7
52.4
55.0
61.2
63.8
67.3
70.0
74.4
83.9
90.3
89.0
50.2
53.6
60.9
62.9
68.7
73.9
77.3
83.8
89.9
91.2
50.6
52.8
58.4
60.9
64.0
66.3
71.1
81.7
88.0
86.3
44.3
47.4
54.3
59.0
59.5
61.2
68.0
82.0
88.0
85.4
55.7
56.4
58.2
59.3
60.7
61.5
62.7
65.3
69.4
72.6
63.2
64.3
65.7
65.7
65.9
66.1
66.5
68.7
73.2
76.4
50.0
50.6
52.8
55.2
57.9
59.1
61.2
64.3
68.0
71.4
83,8
90.5
92.5
93.2
93.6
93.3
94.7
98.0
100.7
101.5
83.1
88.4
90.5
92.3
92.8
93.1
94.7
97.9
100.1
102.0
84.7
91.8
93.6
93.9
93.9
93.4
94.7
97.8
100.7
101.5
87.6
95.5
96.7
96.4
95.5
94.6
95.5
98.5
100.8
100.9
85.8
95.4
97.1
95.6
95.4
94.0
94.7
97.8
101.9
100.3
88.9
95.6
96.4
96.6
95.6
94.9
95.9
98.8
99.9
101.2
92.2
99.2
100.5
99.8
97.3
95.4
95.4
98.5
100.0
101.5
86.2
92.7
93.2
94.0
94.4
94.4
96.5
99.1
99.8
101.0
85.9
94.0
95.1
94.9
94.8
94.1
95.4
98.4
101.0
100.6
75.0
78.9
82.4
86.0
88.7
90.5
92.8
96.6
100.3
103.2
79.1
82.3
85.7
90.3
93.5
94.8
96.5
98.3
100.1
101.6
73.4
77.8
81.5
84.9
87.4
89.4
91.9
96.1
100.2
103.6
103.1
104.2
105.4
106.7
108.1
109.9
113.1
116.3
120.9
103.7
104.8
106.1
107.4
108.9
110.4
113.0
116.8
121.7
103,0
104.2
105.4
106.7
108.0
109.6
112.9
115.9
120.4
101.7
102.3
103.2
104.1
105.2
106.4
109.2
111.2
115.1
101.4
102.6
103.6
105.1
106.4
108.8
114.2
115.2
119.2
101.7
102. 0
102.8
103.5
104.4
105.1
106.5
109.2
113.0
100.9
100.8
101.8
102.1
103.0
102.6
102.7
104.3
107.4
102.6
103.2
103.8
104.8
105.7
107.2
109.7
113.1
117.5
101.9
102.8
103.6
104.9
106.0
107.9
111.8
114.0
118.2
106.6
108.8
110.9
113.0
115.2
117.8
122.3
127.7
134.0
103.1
104.4
105.7
106.8
107.8
108.9
110.4
112.4
114.9
107.4
110.0
112.1
114.5
117.0
120.0
125.0
131.1
138.2
114.7
114.8
115.0
115.3
115.6
116.0
114.8
115.2
115.4
115.9
116.3
116.5
114.2
114.3
114.6
114.8
115.1
115.6
109.9
109.9
110.0
110.2
110.5
111.0
114.7
114.2
114.2
113.7
113.9
115.1
107.3
107.6
107.8
108.4
108.7
108.9
102.7
102.8
102.9
103.4
103.9
104.1
111.0
111.5
111.8
112.4
112.7
112.7
112.7
112.7
112.9
113.0
113.2
113.8
125.5
125.9
126.3
126.6
127.0
127.4
111.4
111.7
111.8
111.9
112.1
112.2
128.8
129.2
129.5
130.0
130.4
130.8
116.5
116.9
117.1
117.5
117.8
118.2
116.8
117.1
117.7
118.2
118.7
118.9
116.1
116.5
116.7
117.1
117.5
117.7
111.5
111.9
112.0
112.4
112.6
112.9
116.0
116.6
115.9
115.7
115.6
116.2
109.1
109.4
110.0
110.6
111.1
111.1
104.4
104.7
104.8
105.7
106.0
106.1
112.8
113.2
114.1
114.5
115.2
115.2
114.3
114.8
114.9
115.1
115.3
115.6
127.7
128.2
128.7
129.1
129.6
130.1
112.4
112.6
112.8
113.0
113.2
113.5
131.2
131.7
132.3
132.7
133.2
133.8
118.6
119.0
119.5
119.9
, 120.3
| 120.9
119.3
119.7
120.2
120.6
121.0
121.6
118.2
118.5
119.1
119.6
120.0
120.4
113.2
113.5
113.9
114.3
114.7
115.1
117.0
117.4
117.9
118.3
118.8
119.1
111.2
111.5
111.9
112.2
112.5
113.0
106.3
106.4
106.6
106.9
106.9
107.4
115.1
115.6
116.1
116.4
117.0
117.5
116.0
116.4
116.9
117.3
117.8
118.2
130.8
131.3
132.1
132.5
133.0
133.9
113.7
113.9
114.2
114.4
114=6
114.9
134.6
135.2
136.1
136.6
137.1
138.1
121.5
121.9
122.2
122.9
123.4
122.1
122.6
123.0
123.8
124.4
120.8
121.2
121.5
122.2
122.5
115.5
115.9
116.1
116.8
117.1
120.0
120.5
120.4
120.9
120.5
113.2
113.5
113.9
114.7
115.3
107.6
107.7
107.6
108.5
109.3
117.6
118.1
118.9
119.7
120.2
118.7
119.2
119.6
120.2
120.3
134.9
135.5
136.0
136.6
137.4
115.1
115.4
115.7
116.0
116.3
139.3
140.0
140.5
141.2
142.0
1
January-November average.
Source: Department of Labor, Bureau of Labor Statistics.
28O
TABLE B-47.—Consumer price indexes, selected commodities and services, 1935-68
For city wage earners and clerical workers
(1957-59 = 100)
Nondurable commodities less food
Durable commodities
Year or
month
Services less rent
NonHouse- Trans- MedHouse- House
Apparel durahold porta- ical
bles
Used hold
furcomcare Other*
tion
less Total services
cars dura- nish- Total modserv- servfood
less
ings
bles
ities
ices
ices
and
rent
apparel
Total i
New
cars
1935
1936 . . .
1937
1938
1939 . . .
47.1
47.8
50.8
51.7
50.6
40.3
40.6
41 4
43.4
42.4
51.2
52.1
56 7
56 7
55.6
48.0
48.8
52 8
52 4
51.3
48.8
49.2
51 2
50.9
50.1
46.7
47.2
49 8
49 4
48.6
51.4
51.9
53 2
53.1
52.4
49.3
49.0
49 5
49.9
49.9
46.6
46.2
45.9
46.2
46.4
46.3
46.5
47.1
47.2
47.3
1940
1941 . . .
1942
1943
1944 .
1945
1946
1947
1948
1949
50.2
53.6
60.9
62.9
68.7
73.9
77.3
83.8
89.9
91.2
42.5
45.7
67.9
74.2
81.2
54.9
58.7
65.7
68.2
74.6
80.3
84.9
93.9
99.9
97.2
50.9
54 4
61.9
63.6
69.1
73.9
80.6
93 4
99.1
95.7
50.6
52.8
58.4
60.9
64.0
66.3
71.1
81.7
88.0
86.3
49.2
51.7
60.4
63.2
67 6
71.2
78.5
90 9
96.5
92.7
52.9
54.7
57.8
60.2
61.9
63.1
65.8
74.9
81.8
81.9
50.0
50.6
52.8
55.2
57.9
59.1
61.2
64.3
68.0
71.4
46.3
46.6
49 1
49.1
49.0
49.1
50 1
51.7
57.7
64.2
47.3
47.6
49.0
51.6
53.7
55.2
58.4
63.3
67.6
70.1
1950
1951 .
1952
1953
1954 .
.
1955
1956
1957 .
1958
1959
92.2 81.8
99.2 85.7
100.5 93.1
99.8 94.0 108.4
97.3 92.5 92.2
95.4 89.2 87.2
95.4 91.7 83.9
98.5 96.5 94.0
100.0 99.6 97.4
101.5 103.9 108.8
98.4
107 8
105.0
103.8
101.0
98.3
97.9
99.6
100.3
100.2
96.3 86.2
106 8 92.7
104.2 93.2
103.7 94.0
101.9 94.4
100.0 94.4
98.9 96.5
100.5 99.1
99.8 99.8
99.8 101.0
91.6
100 2
99.1
98.0
97.5
97.0
98.6
99.7
99.7
100.6
82.5 73.4
87 6 77.8
89.3 81.5
91.6 84.9
92.5 87.4
92.8 89.4
95.1 91.9
98.8 96.1
99.9 100.2
101.3 103.6
1960
1961
1962
1963
1964 . . .
1965
1966 .
1967
1968 3
100.9
100.8
101.8
102.1
103.0
102.6
102.7
104.3
107.4
102.5
102.5
102.1
101.5
101.2
99.0
97.2
98.1
100.6
101.6
105.6
115.2
116.6
121.6
120.8
117.8
121.5
100.1
98.9
98.8
98.5
98 4
96.9
96.8
98.2
101.2
100.1
99.5
98.9
98.5
98 4
97.9
98.8
100.8
104.6
102.6
103.2
103.8
104.8
105.7
107.2
109.7
113.1
117.5
102.0
102.6
103.0
104.0
104 9
105.8
108.5
113.0
118.9
102.8
103.3
104.2
105.3
106.2
108.0
110.3
113.1
116.6
1967: Jan___
Feb...
Mar.._
Apr__.
May...
June..
102.7
102.8
102.9
103.4
103.9
104.1
97.6
97.3
97.2
97.0
96.9
96.8
113.0
114.0
115.9
118.8
121.4
122.4
97.6
97.7
97.8
98.0
98.1
98.0
99.7
100.0
100.3
100.6
100.6
100.7
111.0
111.5
111.8
112.4
112.7
112.7
110.1
110.7
111.5
111.9
112.7
112.8
104.4 97.0 124.8
104.7 96.9 125.2
104.8 96.1 126.2
105.7 101.1 126.0
106.0 101.4 125.6
106.1 101.3 124.8
98.1
98.2
98.4
98.7
98.8
99.1
100.8
100.8
101.2
101.5
101.8
102.1
112.8
113.2
114.1
114.5
115.2
115.2
99.6
99.9
100.4
126." 3" 100.8
126.7 101.1
101.3
102.6
103.1
103.8
104.2
104.4
104.7
107.6 99.8
101.5
107.7 99.1
101.6
107.6 98.4 126.7" 102.0
108.5 102.8
102.3
109.3 103.8
102.8
104.8
104.9
105.4
105.9
106.5
July...
Aug...
Sept..
Oct...
Nov...
Dec..
1968: J a n . . .
Feb...
Mar...
Apr...
May...
June..
July...
Aug...
Sept..
Oct...
Nov...
106.3
106.4
106.6
106.9
106.9
107.4
101.0
100.8
100.6
100.3
100.3
100.1
125.8
123.6
90.4
95.7
100.8
103.6
68.4 71.7
74.8 75.3
80.1 80.1
85 2 83.0
88.9 85.5
89 1 88.0
90.5 91.4
94.8 95.3
100.8 100.0
104.3 104.8
93.5
97.2
100.2
102.6
107.4
110.0
112.1
114.5
117.0
120.0
125.0
131.1
138.2
108.0
109.2
110.6
113.0
114.8
117.0
121.5
127.0
134.0
107.0
109.5
111.2
112.4
115.0
119.3
124.3
128.4
133.2
109.1
113.1
116.8
120.3
123.2
127.1
133.9
145.6
155.8
106.2
109.7
112.6
115.3
118.5
121.8
126.5
131.5
138.5
111.6
111.9
112.0
112.7
112.6
112.7
128.8
129.2
129.5
130.0
130.4
130.8
125.1
125.5
125.6
126.0
126.5
126.7
126.9
127.2
127.4
127.6
127.7
128.1
140.6
141.6
142.9
143.6
144.4
145.2
129.1
129.4
129.7
130.3
130.8
131.3
112.6
112.7
114.1
115.1
115.7
115.9
113.0
113.4
114.1
114.2
114.8
114.7
131.2
131.7
132.3
132.7
133.2
133.8
127.0
127.5
128.1
128.4
128.6
129.1
128.3
128.8
128.9
129.2
130.0
130.4
146.0
146.7
148.0
148.7
149.6
150.4
131.6
131.9
132.4
133.1
133.9
134.3
115.1
115.6
116.1
116.4
117.0
117.5
114.8
115.6
116.6
117.6
118.7
119.1
115.3
115.5
115.8
115.8
116.0
116.6
134.6
135.2
136.1
136.6
137.1
138.1
129.9
130.6
131.1
131.5
132.1
133.7
131.5
131.9
132.4
132.7
132,9
133.3
151.4
152.3
153.6
154.3
155.0
155.5
134.8
135.3
137.0
137.6
138.3
138.9
117.6
118.1
118.9
119.7
120.2
118.9
119.5
121.5
122.7
123.4
116.9
117.3
117.4
117.9
118.3
139.3
140.0
140.5
141.2
142.0
135.6
136.7
137.0
137.6
138.5
133.5
133,6
133.8
134.6
135.2
156.6
157.1
158.2
159.4
160.3
139.2
139.7
140.3
140.9
141.5
'1ncludes certain items not shown separately.
3
Includes the services components of apparel, personal care, reading and recreation, and other goods and services.
' January-November average.
Source: Department of Labor, Bureau of Labor Statistics.
28l
TABLE B-48.— Wholesale price indexes, by major commodity groups, 1929-68
[1957-59 = 100]
Industrial commodities
All commodities
Year or month
Farm
products
Processed
foods and
feeds
Total
Textile
products
and
apparel
Hides,
skins,
leather,
and
related
products
Fuels and
related
products,
and
power
Chemicals
and allied
products
1929
52.1
63.9
51 7
56.6
61.5
1930
1931
- - _ .
1932
1933
1934
1935 . .
1936
1937
1938
1939 . . . . . . .
47.3
39.9
35.6
36.1
41.0
43.8
44.2
47.2
43.0
42.2
54.0
39.6
29.4
31.3
39 9
48.0
49.4
52.7
41 9
39.9
48.1
42.4
39.7
40 2
44 2
44.0
44.9
48.1
46 1
46.0
52.0
44 7
38.0
42.0
44 9
46 5
49.5
54.3
48 2
49.6
58.2
50 0
52.1
49.3
54 3
54 5
56.5
57.5
56 6
54.2
46.6
48 8
50 9
51.2
53.6
51 0
50.7
1940
1941
1942
1943
1944
1945
1946
1947
1948
1949
43.0
47.8
54.0
56.5
56.9
57.9
66.1
81.2
87.9
83.5
41.3
50 1
64.6
74.8
75 3
78.3
90.6
109.1
117.1
101.3
92.6
99.1
90.0
46.8
50 3
53.9
54.7
55 6
56.3
61.7
75.3
81.7
80.0
105.7
110.3
100.9
52.3
56 1
61 1
61.0
60 5
61 3
70.7
96.5
97.5
92.5
53.2
56 6
58 2
59.9
61 6
62 3
66.7
79.7
93.8
89.3
51.6
56 1
62 3
63.1
63 8
64 2
69.4
92.2
94.4
86.2
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
86.8
96.7
94.0
92.7
92.9
93.2
96.2
99.0
100.4
100.6
106.4
123.8
116.8
105.9
104.4
97.9
96.6
99.2
103.6
97.2
93.2
103.5
102.3
97.6
99.3
95.0
94.8
97.6
102.5
99.9
82.9
91.5
89.4
90.1
90.4
92.4
96.5
99.2
99.5
101.3
104.8
116.9
105.5
102.8
100.6
100.7
100 7
100.8
98.9
100.4
99.9
114.8
92.8
94.1
89.9
89.5
94 8
94.9
96.0
109.1
90.2
93.5
93.3
95.9
94.6
94.5
97 4
102.7
98.7
98.7
87.5
100.1
95.0
96.1
97.3
96.9
97.5
99.6
100.4
100.0
100.7
100.3
100.6
100.3
100.5
102.5
105.9
106.1
108.7
96.9
96.0
97.7
95.7
94.3
98.4
105.6
99 7
102.2
100.0
101.6
102.7
103.3
103.1
106.7
113.0
111.7
114.1
101.3
100.8
100.8
100.7
101.2
102.5
104.7
106 3
109.0
101.5
99.7
100 6
100.5
101.2
101.8
102.1
102 1
105.5
105.2
106.2
107 4
104.2
104.6
109.2
119.7
115 8
119.2
99.6
100.7
100.2
99.8
97.1
98.9
101.3
103 6
102.5
100.2
99.1
97.5
96.3
96.7
97.4
97.8
98.4
98.2
106.2
106.0
105.7
105.3
105.8
106.3
102.6
101.0
99.6
97.6
100.7
102.4
112.8
111.7
110.6
110.0
110.7
112.6
105.8
106.0
106.0
106.0
106.0
106.0
102.0
102.0
101.8
101.8
101.6
101.6
117.9
118.0
116.9
115.7
115.2
115.6
102.6
103.4
103.7
103.3
104.4
104.0
98.4
98.5
98.5
98.8
98.8
98.5
106.5
106.1
106.2
106.1
106.2
106.8
102.8
99.2
98.4
97.1
96.4
98.9
113.1
112.1
112.7
111.7
110.9
111.5
106.0
106.3
106.5
106.8
107.1
107.4
101.5
101.7
102.0
102 2
103.0
103.8
115.2
114.4
114.4
114 8
115.4
116.0
103.9
104.7
104.5
103.0
102.8
102.6
98.3
98.0
97.9
98.2
98.2
98.4
107.2
108.0
108.2
108.3
108.5
108.7
99.0
101.3
102.1
102.1
103.6
102.5
112.4
113.3
112.9
112.8
113.6
114.6
107.8
108.3
108.6
108.8
108.6
108.8
104.3
104.6
104.6
104.7
104.8
105.2
116.5
116.7
117.9
118.3
118.8
118.7
101.8
102.5
102.0
102.4
102.4
103.7
98.2
98.1
98.6
98.8
98.7
98.5
109.1
108.7
109.1
109.1
109.6
109.8
103.9
101.4
102.8
101.2
103.1
103.3
115.9
114.9
115.3
114.4
114.7
114.7
108.8
103.9
109.2
109.7
109.9
110.2
105.8
106.0
106.5
107.0
107.2
119.5
119.5
120.7
122.3
122.4
103.3
102.6
102.5
101.9
102.0
98.2
98.1
97.9
97.8
97.8
1960
1961
1962
1963
1964
1965
1966
1967
1968 2
.
..
.
. .
..
..
1967: Jan
Feb
Mar
Apr
May
June
July..
Aug
Sept
Oct
Nov
Dec
1968: Jan
Feb
Mar
Apr
May
June
._
July
Aug_ . . .
Sept
Oct .
Nov
Dec P.
See footnotes at end of table.
282
TABLE B-48.— Wholesale price indexes, by major commodity groups,
1929-68—Continued
[1957-59=1001
Industrial commodities—Continued
Year or month
Pulp,
paper,
and
allied
products
Furnitureand
household
durables
Transportation
equipment:
Motor
vehicles
and
equipment 1
Rubber
and
rubber
products
Lumber
and
wood
products
1929
57.6
26.4
44.1
56.4
53.4
42.8
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
1955
1956
1957
1958
1959
1960.
1961
1962
1963
1964
1965
1966
1967
1968 2
50.4
42.8
37.1
39.0
45.5
45.8
49.4
58.1
57.1
59.3
55.3
59.6
69.4
71.3
70.4
68.3
68.6
68.3
70.5
68.3
24.1
19.6
16.9
20.0
23.5
22.6
23.6
27.9
25.4
26.1
28.9
34.5
37.5
39.7
42.8
43.4
49.7
77.4
88.5
81.9
94.1
102.5
99.5
99.4
97.6
102.3
103.8
98.5
97.4
104.1
100.4
95.9
96.5
98.6
100.6
101.1
105.6
105.4
118.0
102.6
103.6
103.6
104.1
104.2
104.7
105.3
106.1
108.7
107.3
106.7
107.6
39.7
35.7
32.
33.6
37.1
37.0
37.8
43.2
41.6
41.2
41.4
42.2
42.8
42.7
42.7
43.4
48.5
60.2
68.5
69.0
72.7
80.9
81.0
83.6
84.3
90.0
97.8
99.7
99.1
101.2
101.3
100.7
100.0
100.1
102.8
105.7
108.3
109.6
112.3
55.5
51.1
45.0
45.1
49.0
48.6
49.3
54.7
53.4
53.2
54.4
57.8
62.5
62.1
63.8
63.9
67.8
77.8
82.5
83.8
85.6
92.8
91.1
92.9
93.9
94.3
96.9
99.4
100.2
100.4
100.1
99.5
98.8
98.1
98.5
98.0
99.1
101.0
104.0
53.2
49.7
46.5
49.2
52.6
52.6
52.7
53.9
52.2
51.2
51.2
52.4
54.5
54.7
55.8
58.1
61.8
69.1
74.7
76.7
78.6
83.5
83.5
86.9
88.8
91.3
95.2
98.9
99.9
101.2
101.4
101.8
101.8
101.3
101.5
101.7
102.6
104.3
108.0
40.3
38.3
37.3
35.6
37.5
36.0
35.7
38.2
40.8
40.0
41.3
44.2
48.2
48.2
48.5
49.4
57.2
65.5
72.4
77.4
100.4
100.4
100.6
100.6
100.8
100.8
83.2
102.1
92.5
86.3
87.6
99.2
100.6
100.2
100.1
99.7
99.9
96.1
93.3
93.8
92.5
92.9
94.8
97.0
100.2
1967: Jan...
Feb...
Mar..
Apr...
May..
June..
July
Aug
Sept
Oct
Nov
Dec
1968: Jan...
Feb...
Mar..
Apr...
May..
June.
July..
Aug..
Sept..
Oct...
Nov..
Dec p.
95.6
95.8
95.9
95.9
95.8
95.8
95.8
97.8
98.2
98.8
99.1
99.2
99.5
99.5
99.7
99.7
99.8
99.9
100.7
100.6
100.7
101.0
101.1
75.3
78.6
75.2
108.6
111.6
113.9
115.8
117.0
117.2
77.1
91.3
89.0
88.7
88.8
91.1
97.2
99.0
100.1
101.0
101.8
98.8
100.0
99.2
99.0
99.9
102.6
104.0
105.2
103.1
103.3
103.6
103.9
103.9
103.9
104.1
104.0
104.1
104.3
104.6
104.8
105.2
105.7
105.2
105.2
105.5
104.7
119.2
120.5
122.6
124.9
126.8
104.9
104.9
105.1
105.2
105.2
Metals
and
metal
products
Machinery and
equipment
109.4
109.6
109.4
109.1
108.9
108.8
46.3
47.1
47.8
47.4
47.1
47.2
51.9
60.0
65.1
68.2
70.5
78.8
78.9
80.7
82.1
84.6
91.5
97.9
100.0
102.1
102.9
102.9
102.9
103.1
103.8
105.0
108.2
111.8
115.1
108.9
109.2
109.5
109.9
111.0
111.4
112.2
113.3
113.8
113.3
111.7
111.7
111.1
111.2
111.5
111.6
111.6
111.6
111.6
111.8
111.9
112.2
112.6
113.2
100.9
101.0
101.2
101.7
102.0
102.1
113.9
114.1
114.3
114.8
115.0
115.0
103.0
103.3
103.6
103.8
104.0
103.9
103.6
103.7
103.8
103.9
103.8
103.9
104.2
104.5
104.7
104.9
105.1
105.3
106.0
106.9
107.3
107.4
107.8
108.3
111.4
111.3
112.2
112.5
112.4
115.2
115.4
115.8
116.1
116.6
104.1
104.2
104.4
104.5
104.7
108.4
108.7
108.7
108.9
109.2
1
Index tor total transportation equipment not available.
2 Where December data not available, January-November average.
Source: Department of Labor, Bureau of Labor Statistics.
46.2
Nonmetallic
mineral
products
283
77.0
81.1
85.8
85.4
85.6
88.2
93.2
97.2
100.3
102.5
101.0
100.8
100.8
100.0
100.5
100.7
100.8
102.1
104.7
101.6
101.6
101.6
101.6
101.6
101.4
101.3
101.3
101.5
103.7
104.0
104.0
104.3
104.3
104.3
104.3
104.2
104.5
104.2
104.4
104.1
106.5
106.6
Miscellaneous
products
80.3
83.6
85.2
86.6
91.7
91.2
93.6
94.4
94.5
95.8
98.6
100.6
100.8
101.7
102.0
102.4
103.3
104.1
104.8
106.8
109.2
111.7
107.9
108.0
107.7
108.0
108.0
109.6
109.7
110.0
110.2
110.5
110.6
110. 7
111.0
111.3
111.5
111.8
111.8
111.8
111.5
111.6
111.9
112.0
112.5
TABLE B-49.—Wholesale price indexes, by stage of processing, 1947-68
[1957-59=100)
Intermediate materials, supplies, and componentsl
Crude materials
Year or month
Ail
commodities
Materials and components for
manufacturing
.1
Total
Foodstuffs
and
feedstuffs
Nonfood
materials,
except
fuel
Fuel
Total
Materials
for food
Total manufacturing
Materials
for nondurable
manufacturing
Materials
for
durable
manufacturing
Materials
and
Com- components ponents
for for conmanu- strucfactur- tion
ing
1947 .
1948
1949
81.2
87.9
83.5
100.8
110.5
95.6
113.0
122.2
101.5
86.5
96.2
87.5
73.6
87.0
86.5
76.5
82.7
79.4
75.5
81.5
78.0
102.6
105.8
91.0
94.0
99.5
90.7
58.8
66.4
68.2
63.0
68.0
69.3
69.6
77.0
77.2
1950
1951
1952
1953
1954
86.8
96.7
94.0
92.7
92.9
104.2
119.6
109.9
101.5
100.6
108.9
126.0
118.6
106.2
106.2
100.0
115.3
99.9
95.6
93.8
86.1
87.7
88.3
91.4
87.3
83.0
93.0
90.3
90.8
91.3
81.8
92.7
88.8
90.2
90.4
94.7
105.5
101.4
101.6
100.7
95.2
110.3
99.3
98.5
96.9
72.1
80.1
80.3
83.9
85.7
71.9
81.6
81.8
83.3
83.7
81.2
88.8
88.2
89.7
90.1
1955
1956
1957
1958
1959
93.2
96.2
99.0
100.4
100.6
96.7
97.2
99.4
101.6
99.0
96.2
94.2
98.4
104.2
97.4
99.1
102.8
101.4
97.6
101.0
87.1
93.3
98.6
99.8
101.6
93.0
97.1
99.4
99.6
101.0
92.6
96.9
99.3
99.7
101.0
97.5
97.9
99.7
102.0
98.3
97.3
98.8
100.1
99.1
100.8
90.0
95.7
98.8
99.5
101.8
87.4
95.4
99.1
99.9
101.1
93.7
98.5
99.1
99.1
101.8
1960
1961
1962
1963—
1964
100.7
100.3
100.6
100.3
100.5
96.6
96.1
97.1
95.0
94.1
96.2
94.9
96.8
94.0
91.9
96.8
97.9
97.4
96.2
97.8
102.5
102.3
101.8
103.0
102.5
101.0
100.3
100.2
100.5
100.9
101.0
99.8
99.2
99.4
100.4
99.5
102.6
100.5
105.5
104.0
100.8
98.6
98.0
97.1
97.8
101.9
100.5
100.4
100.5
102.5
100.6
99.6
98.8
98.8
99.7
101.1
99.7
99.3
99.6
100.6
1965_.
1966
1967
19684 _
_. 102.5
105.9
106.1
_ _ 108.7
98.9
105.3
99.6
101.1
98.3
107.2
101.2
102.5
99.8
101.9
95.5
97.5
103.3
106.4
110.3
112.5
102.2
104.8
105.6
107.9
102.0
104.0
104.8
107.0
106.6
111.3
109.2
110.6
98.7
99.5
99.0
100.1
104.6
106.6
108.1
111.6
101.3
104.9
107.9
110.4
101.4
104.1
105.4
110.3
1967: Jan
Feb
Mar
Apr
May
June
106.2
106.0
105.7
105.3
105.8
106.3
101.9
100.8
99.7
98.0
100.6
101.4
104.2
102.7
101.3
99.2
103.1
104.2
97.0
96.5
95.7
94.6
94.7
95.1
109.4
109.3
109.4
110.2
110.3
109.8
105.6
105.5
105.5
105.5
105.3
105.4
104.7
104.8
104.6
104.6
104.4
104.4
110.1
109.0
108.7
108.1
109.1
110.2
99.3
99.3
99.1
99.1
98.9
98.6
107.6
107.9
107.7
107.6
107.4
107.4
107.5
107.6
107.9
107.9
107.6
107.5
104.4
104.7
104.8
104.9
104.8
104.9
July
Aug
Sept
Oct_
Nov
Dec
106.5
106.1
106.2
106.1
106.2
106.8
101.7
99.5
98.5
97.9
96.5
98.6
104.7
101.4
99.9
99.1
96.1
98.3
94 6
94.5
94.3
94.2
95.9
98.4
110.2
110.3
111.0
110.9
111.3
111.5
105.4
105.4
105.7
105.7
106.1
106.5
104.4
104.5
104.7
104.8
105.4
105.8
110.2
109.9
110.0
108.6
108.0
108.1
98 4
98.4
98.4
98.8
99.3
99.8
107 5
107.7
108.1
108.4
109.5
109,9
107 5
107.9
108.0
108.1
108.6
109.1
105.2
105.5
106.3
106.2
106.3
106.8
1968: Jan
Feb
Mar
Apr
May
June
107.2
108.0
108.2
108.3
108.5
108.7
99.1
100. S
101.6
101.4
102.0
101.4
99.1
101.8
102.6
102.9
104.1
103.2
98.2
98.4
98.9
97.6
96.6
96.7
111.4
111.7
112.2
112.3
112.4
112.2
106.9
107.6
107.7
107.9
107.7
107.8
106.3
108.9
107.1
107.2
105.9
106.8
108.7
109.9
109.6
109.7
110.6
111.3
99.8
100.1
99.9
100.0
100.3
100.0
110.9
112.0
112.7
112.3
110.9
110.9
109.4
109.9
110.0
110.6
110,5
110.3
107.4
108.5
109.3
109.9
109.8
110.0
109.1
108.7
109.1
109.1
109.6
109.8
102.6
100.8
100.9
100.2
101.5
104.9
102.0
102.1
101.2
103.2
96.8
97.4
97.7
97.0
96.8
112.5
112.4
112.6
113.2
114.3
107.9
107.9
108.3
108.5
108.6
106.9
106.8
107.3
107.4
107.6
112.0
111.3
111.6
110.6
111.3
100.0
100.1
100.4
100.4
100.5
110.9
110.9
111.9
112.2
112.1
110.4
110.5
110.6
111.0
111.3
110.4
110.9
111.7
112.4
112.9
July
Aug
Sept
Oct
Nov
Deep
See footnotes at end of table.
284
TABLE B-49.—Wholesale price indexes, by stage of processing,
1947-68—Continued
11957-59=100]
Special groups of industrial
products
Finished goods
Consumer finished goods
Year or month
Total
Total
Foods
Other
nondurable
goods
Durable
goods
Producer
finished
goods
Crude
materials 2
InterConmediate
sumer
materials, finished
supplies, goods exand com- cluding
ponents s
foods
1947
1948
1949
80.1
86.4
84.0
86.1
92.6
88.3
90.7
99.0
91.0
86.5
92.0
88.2
75.9
81.1
83.2
61.8
67.4
70.7
79.2
92.5
84.0
73.4
79.8
77.8
83.1
88.4
86.5
1950 . _.
1951
1952
1953 _ 1954
85.5
93.6
93.0
92.1
92.3
89.8
98.2
97.0
95.4
95.3
92.8
104.2
103.3
97.9
97.1
89.6
96.5
94.1
95.0
95.3
84.1
89.7
90.4
91.1
91.8
72.4
79.5
80.8
82.1
83.1
93.6
102.9
93.1
92.4
88.0
81.4
91.2
88.3
89.4
89.8
87.8
94.2
92.9
93.7
94.1
92.5
95.1
98.6
100.8
100.6
94.7
96.1
98.9
101.0
100.1
94.7
94.5
97.8
103.5
98.7
95.8
97.7
99.9
99.3
100.8
92.8
95.9
98.7
100.1
101.3
85.6
92.0
97.7
100.2
102.1
96.6
102.3
100.9
96.9
102.3
92.5
97.0
99.6
99.4
101.0
94.8
97.1
99.5
99.6
100.9
1960
1961
1962
1963
1964
101.4
101.4
101.7
101.4
101.8
101.1
100.9
101. 2
100.7
100.9
100.8
100.4
101.3
100.1
100.6
101.5
101.5
101. 6
101.9
101.6
100.9
100.5
100.0
99.5
99.9
102.3
102.5
102.9
103.1
104.1
98.3
97.2
95.6
94.3
97.1
101.4
100.1
99.9
99.6
100.2
101.3
101.2
101.0
101.0
100.9
1965
1966 .
1967
19684
103.6
106.9
108.2
111,2
102.8
106.4
107.0
109.8
104.5
111.2
109.5
113.3
102.8
104.8
107.2
109.3
99.6
100. 2
101.7
103.8
105.4
108.0
111.5
115.2
100.9
104.5
100.0
101.7
101.5
103.6
104.8
107.4
101.6
103.2
105.2
107. 3
1967: Jan
Feb..
Mar
Apr
May
June
107.7
107.6
107.2
107.0
107.6
108.4
106.6
106.5
106.0
105.7
106.4
107.4
110.3
109.3
107.9
106.9
108.5
110.9
105.8
106.3
106.4
106.4
106.9
107.2
101.3
101.3
101.3
101.3
101.3
101.0
110.5
110.6
110.7
110.8
111.1
111.2
101.4
101.1
100.2
99.3
99.4
99.4
104.4
104.6
104.6
104.7
104.5
104.4
104.2
104.5
104.5
104.6
104.8
104.9
108.7
108.3
108.7
108.6
108.9
109.3
107.7
107.2
107.6
107.2
107.5
107.9 •
111.5
109.6
110.5
108.8
109.1
110.1
107.4
108.0
108.0
107.8
107.9
108.0
101.1
101.2
101.4
102.8
103.0
103. 0
111.2
111.4
111.6
112.6
113.0
113.4
99.0
99.0
99.5
99.4
100.6
101.3
104.5
104.6
104.9
105.0
105.5
105.9
105.1
105.5
105.6
106.0
106.1
106.2
109.7
110 2
110.4
110.5
110.9
111.3
108.2
108.9
109.0
109.0
109.5
110.0
110.6
112.0
111.9
111.7
113.0
113.6
108. 0
108.4
108.6
109.0
109.1
109.8
103.5
103.5
103.6
103.5
103.5
103.5
114.0
114.2
114.4
114.8
114.9
115.1
101.4
102.4
103.1
101.7
100.5
100.6
106.3
107.0
107.3
107.5
107.3
107.2
106.4
106.7
106.8
107.0
107.0
107.5
111.9
111.4
112.0
112.0
112.5
110.7
110.0
110.7
110.6
111.0
115.3
113.7
115.6
113.9
114.8
110.0
109.7
103.9
110.0
110.2
103.3
103.6
103.4
104.9
105.0
115.2
115.4
115.7
116.4
116.9
100.9
101.0
101.5
102.2
103.0
107.3
107.4
107.8
108.1
108.2
107.5
107.5
107. 5
108.2
108.4
1955
1956
1957
1958
1959
.
July
Aug .
Sept
Oct.
Nov
Dec
1968: Jan
Feb
Mar
Apr
May
June
July
Aug
Sept
Oct
Nov
Deep
.
. _
.
..
- .
1 Includes, in addition to subgroups shown, processed fuels and lubricants, containers, and supplies.
2 Excludes crude foodstuffs and feedstuffs, plant and animal fibers, oilseeds, and leaf tobacco.
Excludes intermediate materials for food manufacturing and manufactured animal feeds.
Where December data not available, January-November average.
Note.—For a listing of the commodities included in each sector, see monthly report "Wholesale Prices and Price
Indexes," January-February 1967.
Source: Department of Labor, Bureau of Labor Statistics.
3
4
285
MONEY SUPPLY, CREDIT, AND FINANCE
TABLE B-50.—Money supply, 1947-68
[Averages of daily figures, billions of dollars]
Money supply
—
DeCurrency mand
com- deposil
component 1 ponent
Year and month
1947: Dec.
1948: Dec.
1949: Dec.
148.5
147.6
147.6
152.9
160.8
168.6
173.3
180.6
116.2
122.7
127.4
128.8
132.3
151. 0
150.0
150.0
115.9
114. 3
113.9
26.8
26.2
25.5
89. 1
88. 1
88.4
35.1 !
35.7
36.1
1.0
1.8
2.8
155. 6
163. 8
171. 7
176. 4
183. 6
119. 2
125. 8
130.8
132. 1
135. 6
25.4
26.6
27.8
28.2
27.9
93. 8
99 2
103 0
103.9
107 7
36.4
38.0
40.9
44.2
48.0
2.4
2.7
4.9
3.8
5.0
107.4
108.7
107.6
112.6
113.1
188. 2
191. 7
196. 0
209. 3
212. 2
138. 6
140. 3
139. 3
144. 7
145. 6
28.4
28.8
28.9
29.2
29.5
110 2
111 5
110.4
115.5
116.1
49.6
51.4
56.7
64.6
66.6
3.4
3.4
3.5
3.9
4.9
112.1 72.9
115.9 82.7
116.8 97.8
120.5 112.2
125.1 126.6
216. 8
231. 2
248. 2
268. 2
289. 2
144. 7
149. 4
151. 6
157. 3
164 0
29.6
30.2
31.2
33.1
35.0
115.2 72.1
119.2 81.8
120.3 96.7
124.1 111.0
129.1 125.2
4.7
4.9
5.6
5.1
5.5
130.5
132.1
140.9
149.6
317.
332.
369.
401
3
7
1
7
172 0
175.8
187 1
199 2
37.1
39.1
41.2
44.3
134.9
136.7
145.9
154.8
145.2
1156.9
182.0
J202.5
4.6
3.4
5.0
4.7
131.8
133.0
134.3
133.5
135.3
136.7
335
334
338
342
341
347
9
5
6
3
8
2
175 3
170 6
171 9
173 6
171 0
174.2
38.5
38.3
38.5
38.6
38.8
39.2
136.8
132.2
133.4
134.9
132.2
135.0
160.6
164.0
166.7
168.8
170.8
173.0
4.2
5.1
4.9
4.8
6.6
4.0
350
353
357
360
363
369
9
5
3
9
7
1
175 7
175 8
178.3
180 5
182 4
187 .1
39.6
39.6
39.7
40.0
40.4
41.2
136.2
136.2
138.5
140.5
141.9
145.9
175.2
177.8
179.0
180.4
181.3
182.0
5.7
4.3
5.0
6.3
5.3
5.0
35.4
36.0
36.4
113.1
111.5
111.2
1950:
1951:
1952:
1953:
1954:
U.S.
Government
demand
deposits*
Unadjusted
Seasonally adjusted
Dec.
Dec.
Dec.
Dec.
Dec.
Time
25.0
26.1
27.3
27.7
27.4
1955:
1956:
1957:
1958:
1959:
Dec.
Dec.
Dec.
Dec.
Dec
185.2
188.8
193.3
206.6
209.3
135.2
136.9
135.9
141.1
141.9
1960:
1961:
1962:
1963:
1964:
Dec
Dec.
Dec
Dec
Dec
213.9
228.1
245.2
265.2
285.9
141.1
145.4
147.4
153.0
159.3
1965: Dec...
1966: Dec...
1967: Dec.
1968: Dec p.
313.4
328 6
364.8
397.3
166.8
170.4
181.3
193.0
1967: J a n . .
Feb..
Mar .
Apr..
May..
JuneJuly..
Aug..
Sept.
Oct_.
Nov_.
Dec.
331.3
335.2
339.1
340.6
344.5
348.6
170.3
171.8
173.2
172.5
174.4
176.0
38.5
38.7
38.9
39.0
39.1
39.3
352.6
356.2
358.5
360.8
363.0
364.8
177.8
178.9
179.1
180.2
181.0
181.3
39.4
39.5
39.7
39.9
40.1
40.4
1968: J a n . .
Feb.Mar._
Apr .
May..
JuneJuly..
Aug..
Sept.
Oct..
Nov..
Dec p
366.4
367.9
370.1
371.4
373.7
375.6
182.3
182.7
183.4
184.3
186.1
187.4
40.6
40.7
41.1
41.4
41.6
42.0
184.1
185.2
186.7
187.1
187.6
188.2
371 4
367 1
369.6
373.5
370.9
374.1
187 .6
181.4
182.0
185.6
182.5
185.6
40.5
40.3
40.7
41.1
41.3
41.9
147.1
141.1
141.2
144.5
141.1
143.6
183.7
185.8
187.7
187.9
"^8.4
188. 6
5.0
7.2
6.6
4.2
6.4
5.4
379.8
384.0
386.0
389.8
393.9
397.3
189. 4 42. 2
190.3 42.6
189. 5 42. 7
190.2 42.8
192.0 43.2
193.0 43.4
190.4
193.8
1196.6
199.5
201.9
204.3
378.0
381.3
384.8
389.7
394.1
401.7
187.2
186.9
188.6
190.6
193.4
199.2
42.4
42.7
42.7
42.9
43.7
44.3
144.8
144.2
145.8
147.7
149.7
154.8
190. 8
194. 4
196. 2
199.1
200. 7
202. 5
5.7
5.5
5.9
6.1
4.2
4.7
28.9
29.6
30.6
32.5
34.2
1 Currency outside the Treasury, the Federal Reserve System, and the vaults of all commercial banks.
2 Demand deposits at all commercial banks, other than those due to domestic commercial banks and the U S Governbank'
™*h ' t e m S ' " p r o c e s s o f c o l l e c t i o n a n d Federal Reserve float, plus foreign demand balances at Federal Reserve
!AL m ( l, d o P 2 s i t s a d i u s t e d a r e t i m e deposits at all commercial banks other than those due to domestic commercial banks
and the U.S. Government.
* Deposits at all commercial banks.
Source: Board of Governors of the Federal Reserve System.
286
TABLE B-51.—Bank loans and investments, 1929-68
[Billions of dollars]
Weekly reporting large
commercial
banks 3
All commercial banks
End of year or month
!
Total loans
and investments 2
1929 5.
1930 5.
1931 5.
1932 ».
1933 5.
1934 5.
1935...
1936__.
1937._
1938..
1939..
1940...
1941._.
1942..
1943..
1944..
1945..
1946..
1947..
1948..
49.4
48.9
44.9
36.1
30.4
32.7
36.1
39.6
38.4
38.7
40.7
43.9
50.7
67.4
85.1
105.5
124.0
114.0
116.3
114.2
1948.
1949.
1950.
1951.
1952.
1953.
1954.
1955.
1956_
1957.
1958.
1959.
1960.
1961.
1962'
1963'
1964.
1965.
1966.
1967.
1968 <
1967: Jan
Feb
Mar.....
Apr
May.....
June
July.....
Aug
Sept....
Oct
Nov .....
Dec
1968: Jan
Feb
Mar
Apr
May
June
July
Aug
Sept p...
Oct p....
Nov p....
Decs....
Investments
Loans 2
113.0
118.7
124.7
130.2
139.1
143.1
153.1
157.6
161.6
166.4
181.2
185.9
194.5
209.6
227.9
246.2
267.2
294.4
310.5
346.5
384.8
314.3
317.7
321.5
322.9
324.7
326.2
332.5
336.6
339.1
342.0
344.3
346.5
349.9
353.9
352.5
355.2
357.3
357.8
365.9
370.4
374.8
379.6
381.6
384.8
U.S. Government securities
35.7
34.5
29.2
21.8
16.3
15.7
15.2
16.4
17.2
16.4
17.2
18.8
21.7
19.2
19.1
21.6
26.1
31.1
38.1
42.4
Seasonally
41.5
42.0
51.1
56.5
62.8
66.2
69.1
80.6
88.1
91.5
95.6
107.8
113.8
120.4
134.0
149.6
167.7
192.6
7 208.2
225.4
252.8
210.2
210.8
211.9
212.9
213.4
214.1
216.5
218.0
219.9
221.4
222.7
225.4
227.5
229.2
229.0
231.4
232.6
233.5
238.4
241.1
243.8
246.9
250.4
252.8
4.9
5.0
6.0
6.2
7.5
10.3
13.8
15.3
14.2
15.1
16.3
17.8
21.8
41.4
59.8
77.6
90.6
74.8
69.2
62.6
Other
securities
Business loans 4
8.7
9.4
9.7
8.1
6.5
6.7
7.1
7.9
7.0
7.2
7.1
7.4
7.2
6.8
6.1
6.3
7.3
8.1
9.0
9.2
5.1
4.2
4.7
5.3
7.1
6.3
6.4
6.5
7.3
11.3
14.7
15.6
9.2
10.3
12.4
13.4
14.2
14.7
16.4
16.8
16.3
17.9
20.5
20.5
20.8
23.9
29.2
35.0
38.7
44.8
7 48.7
61.4
71.0
49.9
51.1
52.4
53.7
54.9
56.2
56.5
57.3
57.7
58.6
60.4
61.4
62.4
62.7
63.6
63.4
63.6
63.9
64.4
65.5
67.0
68.5
70.2
71.0
15.6
13.9
17.9
21.6
23.4
23.4
22.4
26.7
30.8
31.8
31.7
30.7
32.2
32.9
35.2
38.8
42.1
3
53.1
60.7
65.8
74.0
60.4
60.4
62.0
62.3
61.8
63.8
63.7
62.2
63.4
63.1
63.7
65.8
65.0
65.1
66.5
67.6
67.1
69.2
69.2
68.1
69.4
69.7
71.2
74.0
adjusted
62.3
66.4
61.1
60.4
62.2
62.2
67.6
60.3
57.2
56.9
65.1
57.7
59.8
65.3
64.6
61.7
60.7
57.1
53.6
59.7
61.0
54.1
55.8
57.3
56.3
56.4
55.9
59.4
61.3
61.4
61.9
61.2
59.7
60.0
62.0
59.9
60.3
61.0
60.4
63.1
63.9
64.0
64.2
61.0
61.0
1 Data are for last Wednesday of month (except June 30 and December 31 call dates used for all commercial banks).
2 Adjusted to exclude interbank loans beginning 1948.
3 Loans by weekly reporting large commercial banks beginning 1965 and formerly weekly reporting member banks. See
"Federal Reserve Bulletin," March 1967.
* Commercial and industrial loans and prior to 1956, agricultural loans. Beginning July 1959, loans to financial institutions excluded. Prior to 1943, published data adjusted to include open market paper.
5 June data used because complete end-of-year data not available.
6
Commercial bank data are estimates for December 3 1 .
7
Effective June 1966, balances accumulated for payment of personal loans (about $1.1 billion) are excluded from loans
at all commercial banks, and certain certificates of CCC and Export-Import Bank totaling about $1 billion are included in
other securities rather than in loans.
Source: Board of Governors of the Federal Reserve System.
287
TABLE B-52.—Selected liquid assets held by the public, 1946-68 i
[Billions of dollars, seasonally adjusted]
Time deposits
End of year or month |
Demand
deposits
and
currency2
Total
Commercial
banks3
Postal
savings
system
Mutual
savings
banks
1946..
1947.
1948.
1949.
239.1
246.2
254.1
262.1
108. 5 I
112.4
110.5 I
1950.
1951.
1952.
1953.
1954.
271.4
281.0
296.0
311.5
320.3
1955.
1956.
1957.
1958.
1959.
332.5
343.2
356.0
373.1
393.9
133.3
134.6
133.5
138.8
139.7
1960.
1961.
1962.
1963.
1964.
399.2
424.6
459.0
495.4
530.5
138.4 !
142.6 !
144.8 j
149.6
156.7
73.1
82.5
98.1 i
112.9 |
127.1 |
36.2
38.3
1965.
1966 5
1967.
1968 6
573.1
601.5
650.5
164.1
168.6
180.7
147.1
159.3
183.1
52.6
55.2
60.3
64.3
1967: Jan...
Feb..
Mar..
Apr..
May..
June.
605.2
604.8
615.2
613.2
619.8
620.8
167.0
165.9
171.0
168.7
173.0
173.7
163.6
165.3
167.6
168.6
170.7
172.4
July..
Aug..
Sept..
OcL..
Nov..
Dec.
623.1
630.3
635.7
638.1
645.9
650.5
172.0
174.2
176.3
175.8
177.9
180.7
1968: Jan...
Feb._
Mar..
Apr..
May..
June.
655.9
658.7
665.7
664.6
667.9
670.9
July p..
Aug p..
Sept p..
Octp...
Nov P..
676.6
679.7
684.5
692.6
697.9
Savings
and
loan
shares
U.S.
Government
savings
bonds *
U.S.
Government
securities
maturing
within
1 year *
110.4 I
16.9
17.8
18.4
19.3
3.3
3.4
3.3
3.2
8.5
9.7
11.0
12.5
48.6
50.9
53.4
55.0
19.4
16.6
21.6
25.5
115.5
120.9
125.5
127.3
130.2
36.6
38.2
41.2
44.6
48.2
20.1
20.9
22.6
24.4
26.3 j
2.9
2.7
2.5
2.4
2.1
14.0
16.1
19.2
22.8
27.2
55.8
55.4
55.7
55.6
55.6
26.4
26.8
29.3
34.4
30.6
49.7
52.0
57.5
65.4
67.4
28.1
30.0
31.6
33.9
34.9
1.9 ,
1.6 I
1.3
1.1
.9
32.0
37.0
41.7
47.7
54.3
55.9
54.8
51.6
50.5
47.9
31.6
33.2
38.8
35.6
48.8
.6
.5
.5
.4
61.8
70.5
79.8
90.9
101.4
47.0
47.4
47.6
49.0
49.9
41.9
42.6
46.8
48.1
46.1
109.8
113.4
123.9
130.8
50.5
50.9
51.9
52.5
48.6
53.9
50.5
58.5
55.5
55.9
56.3
56.8
57.4
58.0
113.7
114.8
116.3
117.1
118.0
118.9
51.0
50.9
51.0
51.1
51.1
51.2
54.2
51.7
52.9
50.9
49.5
46.5
174.7
177.2
178.1
180.1
183.8
183.1
58.4
58.7 ;
!
59.1
59.5 i
59.9
60.3 j
119.9
121.0
122.5
123.0
123.7
123.9
51.3
51.3
51.4
51.4
51.5
51.9
46.7
47.8
48.2
48.3
49.1
50.5
179.6
178.3
181.8
181.1
183.9 I
186.8 |
I
33.9
35.3
35.9
36.3
186.5
187.6
187.9
187.6
187.7
187.9
60.6
61.1
61.4 !
61.7 '
62.1 j
62.6
123.6
124.6
125.9
126.0
126.5
126.8
51.9
51.8
51.8
51.8
51.8
51.9
53.6
55.4
57.0
56.5
55.9
54.9
186.2
186.0
186.3
187.6
189.4
191.5
194.0
195.9
200.0
204.4
62.8
63.0 !
63.4
63.8
64.3
64.3
127.2
128.1
129.5
130.0
130.8
130.8
51.9
52.0
52.0
52.0
52.1
52.5
56.9
56.6
57.4
59.2
57.0
58.5
|
i
!
|
!
I
41.4 !
44.5
49.0
.3
.1
1
Excludes holdings of the U.S. Government, Government agencies and trust funds, domestic commercial banks, and
Federal Reserve banks. Adjusted wherever possible to avoid double counting.
2
Agrees in concept with the money supply, Table B-50, except for deduction of demand deposits held by mutual savings
banks and savings and loan associations. Data are for last Wednesday of month.
3
Time deposits at all commercial banks other than those due to domestic commercial banks and the U.S. Government
(same concept as in Table B-50). Data are for last Wednesday of month, except that June 30, and December 31 call
data are used where available.
4
Excludes holdings of Government agencies and trust funds, domestic commercial and mutual savings banks, Federal
Reserve banks, and beginning February 1960, savings and loan associations.
5
Effective June 1966, balances accumulated for the payment of personal loans (about $1.1 billion) are excluded from
time deposits at all commercial banks and from total liquid assets.
6
Estimates by Council of Economic Advisers.
Source: Board of Governors of the Federal Reserve System (except as noted).
288
TABLE B-53.—Federal Reserve Bank credit and member bank reserves, 1929-63
[Averages of daily figures, millions of dollars]
Member bank reserves
Reserve Bank credit outstanding
Year and month
Total
U.S.
Government securities
Member
bank
borrowings
All
other,
mainly
float
;
Required
Total
i
Excess
Member
bank free
reserves
(excess
reserves
less borrowings)
1929: Dec
1,643
446
801
396
2,395
2,347
48
1930: Dec
1931: D e c .
1932: Dec.
1933: Dec
1934: Dec
1935: D e c .
1936: Dec
1937: Dec
1938: D e c
1939: D e c .
1,273
1,950
2,192
2,669
2,472
2,494
2,498
2,628
2,618
2,612
644
777
1,854
2,432
2,430
2,430
2,434
2,565
2,564
2,510
337
763
281
95
10
6
7
16
7
3
292
410
57
142
32
58
57
47
47
99
2,415
2,069
2,435
2,588
4,037
5,716
6,665
6,879
8,745
11,473
2,342
2,010
1,909
il,822
2,290
2,733
4,619
5,808
5,520
6,462
73
60
526
1766
1,748
2,983
2,046
1,071
3,226
5,011
-264
-703
245
671
1,738
2,977
2,039
1,055
3,219
5,008
2,305
2,404
6,035
11,914
19,612
24,744
24,746
22,858
23,978
19,012
2,188
2,219
5,549
11,166
18,693
23,708
23,767
21,905
23,002
18,287
3
4
90
265
334
157
224
134
118
114
180
482
658
654
702
822
729
842
607
14,049
12,812
13,152
12,749
14,168
16,027
16,517
17,261
19,990
16,291
7,403
9,422
10,776
11,701
12,884
14,536
15,617
16,275
19,193
15,488
6,646
3,390
2,376
1,048
1,284
1,491
900
986
797
803
6,643
3,385
2,372
958
1,019
1,157
743
762
663
685
21,606
25,446
27,299
27,107
26,317
26,853
27,156
26,186
28,412
29,435
20,345
23,409
24,400
25,639
24,917
24,602
24,765
23,982
26,312
27,036
142
657
1,593
441
246
839
688
710
557
906
1,119
1,380
1,306
1,027
1,154
1,412
1,703
1,494
1,543
1,493
17,391
20,310
21,180
19,920
19,279
19,240
19,535
19,420
18,899
2 18,932
16,364
19,484
20,457
19,227
18,576
18,646
18,883
18,843
18,383
18,450
1,027
826
723
693
703
594
652
577
516
482
885
169
-870
252
457
-245
-36
-133
-41
-424
29,060
31,217
33,218
36,610
39,873
43,853
46,864
51,268
56, 501
27,248
29,098
30, 546
33,729
37,126
40,885
43,760
48,891
52, 529
87
149
304
327
243
454
557
238
765
1,725
1,970
2,368
2,554
2,504
2,514
2,547
2,139
3,207
19,283
20,118
20,040
20,746
21,609
22,719
23,830
25,260
27,165
18,527
19,550
19,468
20,210
21,198
22,267
23,438
24,915
26,766
756
568
572
536
411
452
392
345
399
669
419
268
209
168
-2
-165
107
-366
46,802
46,587
46,524
46,902
47,323
47,547
44,066
44,215
44,620
45,082
45,699
45,844
389
362
199
134
101
123 1
2,347
2,010
1,705
1,686
1,523
1,580
24,075
23,709
23,405
23,362
23,284
23,518
23,702
23,351
22,970
23,053
22,914
23,098
373
358
435
309
370
420
-16
-4
236
175
269
297
48,590
48,210
48,147
48,993
49,752
51,268
46,807
46,612
46,398
47,367
48,010
48, 891
87
89
90
126
133
238
1,696
1,509
1,659
1,500
1,609
2,139
23,907
23,791
24,200
24,608
24,740
25,260
23,548
23,404
23,842
24,322
24,337 i
24,915 ;
359
387
358
286
403
345
272
298
268
160
270
107
51,287
50,873 !
51,863
52, 509
52,998
53,813
49,046
48,930
49,511
50, 090 i
50,581
51,306
237 ;
361
671
683
746
692 i
2,004
1,582 i
1,681
1,736
1,671
1,815
25,834
25,610
25, 580
25, 546 !
25, 505 !
25,713 !
25,453
25,211 !
25,224 !
25,276
25,085 !
25,362
381
399
356
270
420
351 j
144
38
-315
-413
-326
-341
54, 573 !
55.048 i
54,769
55,741
56,158
56, 501
52,090
52,646 i
52,222 i
53,300
53.388
52,529
525
565
515 i
427 1
569
765 !
1,958
1,837
2,032
2,014
2,201
3,207
26,001
26,069
26,077
26,653
26,760
27,165
•
25,702
25,694
25.694
26,393
26,472 !
26,766
299
375
383 i
260
288
399
-226
-190
-132
-167
-281
-366
1940:
1941:
1942:
1943:
1944:
1945:
1946:
1947:
1948:
1949:
Dec
Dec
Dec.
Dec
Dec
Dec
Dec.
Dec
Dec
Dec
1950:
1951:
1952:
1953:
1954:
1955:
1956:
1957:
1958:
1959:
Dec.
Dec
Dec
Dec
Dec.
Dec
Dec
Dec
Dec.
Dec
1960:
1961:
1962:
1963:
1964:
1965:
1966:
1967:
1968:
Dec
Dec...
Dec
Dec
Dec...
Dec
Dec
Dec
Dec p . .
.
.
.
.
.
.
1967: Jan
Feb
Mar
Apr.
May
June
July
Aug
Sept
Oct
Nov
Dec
1968: J a n . . . .
Feb
Mar
Apr.
May..
June
July..
Aug
Sept.
Oct...
Nov p
Dec p
..
!
1
1
..
,
:
!
i
1 Data from March 1933 through April 1934 are for licensed banks only.
2 Beginning December 1959, total reserves held include vault cash allowed.
Source: Board of Governors of the Federal Reserve System.
289
i
!
i
!
-753
TABLE B-54.—Bond yields and interest rates, 1929-68
[Percent per annum]
Corporate
bonds
(Moody's)
U.S Government securities
Year or month
3-month
Treasury
bills i
9-12
3-5
month
year Taxable
4
issues 2 issues 3 bonds
Aaa
Baa
Average
High- rate on Prime
Fedgrade
shortFHA
comeral
term
municnew
mer- Reserve home
bank
ipal
cial
Bank
loans
bonds
mortdis(Stand- to busi- paper,
gage
4-6
count yields»
ard & n e s s rate
Poor's) selected months
cities
0)
5.85
5.16
8
3.59
2 64
2.73
1.73
1.02
3.04
2 11
2.82
2 56
1.54
2.1
.75
.75
.94
.81
.59
1.50
1.50
1.33
1.00
1.00
2.1
2.0
2.2
2.6
2.4
.56
.53
.66
.69
.73
1.00
1 00
8 1.00
8 1.00
8 1.00
1.67
1 64
2.01
2.40
2.21
2.2
2 1
2.1
2.5
2.68
.75
81
1.03
1.44
1.49
8 1.00
8 1 00
1.00
1.34
1.50
3.24
3.41
3.52
3.74
3.51
1.98
2.00
2.19
2.72
2.37
2.69
3.11
3.49
3.69
3.61
1.45
2.16
2.33
2.52
1.58
1.59
1.75
1.75
1.99
1.60
4.21
4.29
4.61
4.62
3.06
3.36
3.89
3.79
4.38
3.53
3.88
4.71
4.73
5.05
2.53
2.93
3.60
3.56
3.95
3.70
4.20
4.62
4.34
9 5.00
2.18
3.31
3.81
2.46
3.97
1.89
2.77
3.12
2.16
3.36
4.64
4.79
5.42
5.49
5.71
4.02
3.90
3.95
4.00
4.15
4.41
4.35
4.33
4.26
4.40
5.19
5.08
5.02
4.86
4.83
3.73
3.46
3.18
3.23
3.22
5.16
4.97
5.00
5.01
4.99
3.85
2.97
3.26
3.55
3.97
3.53
3.00
3.00
3.23
3.55
6.18
5.80
5.61
5.47
5.45
4.22
5.16
5.07
5.59
4.21
4.65
4.85
5.26
4.49
5.13
5.51
6.18
4.87
5.67
6.23
6.94
3.27
3.82
3.96
4.51
5.06
6.00
io 6.00
6.68
4.38
5.55
5.10
5.90
4.04
4.50
4.19
5.17
5.46
6.29
6.55
7.13
4.89
5.02
4.94
4.86
4.94
5.01
4.43
4.61
4.63
4.55
4.57
4.63
4.74
4.78
4.92
4.96
4.98
5.07
5.06
5.12
5.32
5.41
5.48
5.58
3.52
3.63
3.72
3.59
3.68
3.77
4.82
4.88
5.21
5.38
5.39
5.51
4.50
4.50
4.50
4.50
4.50
4.50
5.62
5.70
5.55
5.63
5.85
5.89
6.00
6.00
6.00
4.50
4.50
4.50
4.50
4.50
4.50
1929
(6)
4.73
5.90
4.27
1930
1931
1932
1933
1934
(6)
1 402
.879
.515
.256
2.66
2.12
4.55
4 58
5.01
4.49
4.00
5.90
7 62
9.30
7.76
6.32
4.07
4 01
4.65
4.71
4.03
1935
1936
1937
1938
1939
.137
.143
447
.053
.023
1.29
1.11
1 40
83
.59
3.60
3.24
3.26
3.19
3.01
5.75
4.77
5.03
5.80
4.96
3 41
3.07
3.10
2.91
2.76
1940
1941
1942
1943
1944
014
.103
.326
.373
.375
0.75
.79
50
73
1 46
1.34
1.33
2 46
2.47
2.48
2.84
2.77
2. S3
2.73
2.72
4.75
4.33
4.28
3.91
3.61
2.50
2 10
2.36
2.06
1.86
1945
1946
1947
1948
1949
.375
375
594
1.040
1.102
.81
82
88
1.14
1.14
1.18
1 16
1.32
1.62
1.43
2.37
2 19
2 25
2.44
2.31
2.62
2.53
2.61
2.82
2.66
3.29
3 05
3.24
3.47
3.42
1950
1951
1952
1953
1954
1.218
1.552
1.766
1.931
.953
1.26
1.73
1 81
2.07
.92
1.50
1.93
2.13
2.56
1.82
2.32
2.57
2.68
2.94
2.55
2.62
2.86
2.96
3.20
2.90
1955
1956
1957
1958
1959
1.753
2.658
3.267
1.839
3.405
1.89
2.83
3.53
2.09
4.11
2.50
3.12
3.62
2.90
4.33
2.84
3.08
3.47
3.43
4.08
1960
1961
1962
1963
1964
2.928
2.378
2.778
3.157
3.549
3.55
2.91
3.02
3.28
3.76
3.99
3.60
3.57
3.72
4.06
1965
1966
1967
1988 . _ -
3.954
4.881
4.321
5.339
4.09
5.17
4.84
5.62
4.596
4.670
4.626
4.611
4.642
4.539
4.83
4.92
4.96
4.87
4.90
4.94
1966' Jan
Feb
Mar
Apr
May
June
Juiy
Aug
Sept
Oct
Nov
Dec
-. .
4.855
4.932
5.356
5.387
5.344
5.007
5.17
5.52
5.80
5 57
5.45
5.10
5.22
5.58
5.62
5.38
5.43
5.07
4.75
4.80
4.79
4.70
4.74
4.65
5.16
5.31
5.49
5.41
5.35
5.39
See footnotes at end of table.
290
5.68
5.83
6.09
6.10
6.13
6.18
3.94
4.17
4.11
3.97
3.93
3.83
o
(7)
(7)
5.82
6.30
6.31
4.34
4.17
6.00
6.32
6.45
6.51
6.58
6.63
6.81
TABLE B-54.—Bond yields and interest rates,
1929-68—Continued
[Percent per annum]
Corporate
bonds
(Moody's)
U.S. Government securities
Year or month
3-month
Treasury
bills i
9-12
3-5
Taxable
year
month
issues 2 issues 3 bonds*
Aaa
Baa
Average
rate on
HighPrime
shortgrade
comterm
municmerbank
ipal
cial
loans
bonds
paper,
(Stand- to busi4 6
—
nessard &
Poor's) selected months
cities
Jan
Feb
Mar
Apr
May
June
4.759
4.554
4.288
3.852
3.640
3.480
4.71
4.64
4.35
4.03
4.09
4.40
4.71
4.73
4.52
4.46
4.68
4.96
4.40
4.47
4.45
4.51
4.76
4.86
5.20
5.03
5.13
5.11
5.24
5.44
5.97
5.82
5.85
5.83
5.96
6.15
3.58
3.56
3.60
3.66
3.92
3.99
July
Aug
Sept
Oct
Nov
Dec
4.308
4.275
4.451
4.588
4.762
5.012
4.98
5.10
5.21
5.32
5.55
5.69
5.17
5.28
5.40
5.52
5.73
5.72
4.86
4.95
4.99
5.19
5.44
5.36
5.58
5.62
5.65
5.82
6.07
6.19
6.26
6.33
6.40
6.52
6.72
6.93
4.05
4.03
4.15
4.31
4.36
4.49
1968: Jan
Feb
Mar
Apr
May
June
5.081
4.969
5.144
5.365
5.621
5.544
5.39
5.37
5.55
5.63
6.06
6.01
5.53
5.59
5.77
5.69
5.95
5.71
5.18
5.16
5.39
5.28
5.40
5.23
6.17
6.10
6.11
6.21
6.27
6.28
6.84
6.80
6.85
6.97
7.03
7.07
4.34
4.39
4.56
4.41
4.56
4.56
July
Aug
Sept
Oct
Nov
Dec
5.382
5.095
5.202
5.334
5.492
5.916
5.68
5.41
5.40
5.44
5.56
6.00
5.44
5.32
5.30
5.42
5.47
5.99
5.09
5.04
5.09
5.24
5.36
5.66
6.24
6.02
5.97
6.09
6.19
6.45
6.98
6.82
6.79
6.84
7.01
7.23
4.36
4.31
4.47
4.56
4.68
4.91
1967:
« 6.13
5.95
5.95
5.96
6.36
6.84
6.89
6.61
Federal
Reserve
Bank
discount
rate
FHA
new
home
mortgage
yields »
5.73
5.38
5.24
4.83
4.67
4.65
4.50
4.50
4.50
4.10
4.00
4.00
6.77
6.62
6.46
6.35
6.29
6.44
4.92
5.00
5.00
5.07
5.28
5.56
4.00
4.00
4.00
4.00
4.18
4.50
6.51
6.53
6.60
6.63
6.65
6.77
5.60
5.50
5.64
5.81
6.18
6.25
4.50
4.50
4.66
5.20
5.50
5.50
6.81
6.81
6.78
6.83
6.94
6.19
5.88
5.82
5.80
5.92
6.17
5.50
5.48
5.25
5.25
5.25
5.36
7.52
7.42
7.35
7.28
7.29
7.36
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 Certificates of indebtedness and selected note and bond issues (fully taxable).
3 Selected note and bond issues. Issues were partially tax exempt prior to 1941, and fully taxable thereafter.
4
First issued in 1941. Series includes bonds which are neither due nor callable before a given number of years as follows: April 1953 to date, 10 years; April 1952-March 1953, 12 years; October 1941-March 1952, 15 years.
« Data for first of the month, based on the maximum permissable interest rate (6% percent beginning early May 1968)
and, thru July 1961, 25-year mortgages paid in 12 years and, thereafter, 30-year mortgages paid in 15 years.
• Treasury bills were first issued in December 1929 and were issued irregularly in 1930.
7
Not available on same basis as for 1939 and subsequent years.
s From October 30, 1942, to April 24, 1946, a preferential rate of 0.50 percent was in effect for advances secured by,
Government securities maturing in 1 year or less.
c Beginning 1959, series revised to exclude loans to nonbank financial institutions.
10
Beginning February 1967, series revised to incorporate changes in coverage, in the sample of reporting banks, and
in the reporting period (shifted to the middle month of the quarter).
Note.—Yields and rates computed for New York City except for short-term bank loans.
Sources: Treasury Department, Board of Governors of the Federal Reserve System, Moody's Investors Service, Standard & Poor's Corporation, and Federal Housing Administration.
291
TABLE B-55.—Short- and intermediate-term consumer credit outstanding, 1929-68
[Millions of dollars]
Instalment credit
End of year or month
Total
Noninstalment credit
Repair
and
modernization
loans i
Total
1929
7,116
.
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
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968 4
1967- Jan
Feb
Mar
Apr
May
June_.
July
Aug
Sept
Oct
Nov
Dec
1968: Jan
Feb
Mar
Apr
May
June
July
Aug._
Sept
Oct.
Nov
Dec 4
6,351
5,315
4,026
3,885
4,218
5,190
6,375
6,948
6,370
7,222
8,338
9,172
5,983
4,901
5,111
5,665
8,384
11,598
14,447
17,364
21,471
22,712
27,520
31,393
32,464
38,830
42,334
44,971
45,129
51,544
56,141
57,982
63,821
71,739
80,268
90,314
97,543
102,132
112 850
96,407
95,271
95,231
95,725
96,427
97,341
97,632
. - . 98,324
98 625
98,870
99,648
. . . 102,132
101,260
. . . 100,771
100,981
102,257
103,411
104,620
105,680
107,090
107,636
108,643
110,035
112,850
Automobile
paper
Other
consumer
goods
paper
3,524
1,384
1,544
27
986
684
356
493
1,432
1,214
834
799
25
22
18
15
889
37
459
992
1,372
1,494
1,099
1,497
2,071
2,458
1,000
1,290
1,505
1,442
1,620
1,827
1,929
1,195
253
364
572
721
3,022
2,463
1,672
1,723
1,999
2,817
3,747
4,118
3,686
4,503
5,514
6,085
3,166
2,136
2,176
2,462
4,172
6,695
8,996
11,590
14,703
15,294
19,403
23,005
23, 568
28,906
31,720
33,868
33,642
39,247
42,968
43,891
48,720
55,486
62,692
71,324
77,539
80,926
89 750
76,855
76,221
76,183
76,360
76,784
77,519
77,860
78,551
78,765
79,006
79,485
80,926
80,379
80,233
80,474
81,328
82,312
83,433
84,448
85,684
86,184
87,058
87,953
89,750
614
742
355
397
455
981
1,924
3,018
4,555
6,074
5,972
7,733
9,835
9,809
13,460
14,420
15,340
14,152
16,420
17,658
17,135
19,381
22,254
24,934
28,619
30,556
30,724
34 150
30,304
30.062
30,056
30,138
30,321
30,626
30,792
30,932
30 741
30,711
30,718
30,724
30,579
30,682
30,942
31,331
31,818
32,364
32,874
33,325
33,336
33,698
33,925
34,150
819
791
816
1,290
2,143
2,901
3,706
4,799
4,880
6,174
6,779
6,751
7,641
8,606
8,844
9,028
10,631
11,545
11,862
12,627
14,177
16,333
18,565
20,978
22,395
24 750
20,744
20,398
20,274
20 200
20,238
20,395
20,442
20 634
20 878
21,055
21,323
22,395
22,117
21,767
21,644
21,841
22,011
22,248
22,452
22,777
22,988
23,248
23,668
24,750
Personal
loans
Total
Charge
accounts
Other 2
569
3,592
1,996
1,596
2,379
579
3,329
2,852
2,354
2,162
2,219
2,373
2,628
2,830
2,684
2,719
2,824
3,087
2,817
2,765
2,935
3,203
4,212
4,903
5,451
5,774
6,768
7,418
8,117
8,388
8,896
9,924
10,614
11,103
11,487
12,297
1,833
1,635
1,374
1,286
1,306
1,354
1,428
1,504
1,403
1,414
1,471
1,645
1,444
1,440
1,517
1,612
2,076
2,381
2,722
2,854
3,367
3,700
4,130
4,274
4,485
4,795
4,995
5,146
5,060
5,104
1,496
1,217
980
876
2 807
3,369
3,806
3 769
3 658
3,540
3,411
3 399
3 389
3,248
3,091
2,919
2,683
2,373
2,134
1,962
1,894
1,937
2,057
2,240
2,413
2,590
2,713
2,914
3,127
3,290
3,519
3,869
4,188
4,618
13,173
14,091
15,101
16,253
17,576
18,990
20,004
21,206
23 100
19,552
19,050
19,048
19,365
19,643
19,822
19,772
19,773
19,860
19,864
20,163
21,206
20,881
20, 538
20,507
20,929
21,099
21,187
21,232
21,406
21,452
21,585
22,082
23,100
5,329
5,324
5,684
5,903
6,195
6,430
6,686
6,968
7,800
543
464
416
219
218
900
927
298
371
376
1,088
1,245
1,322
255
130
119
182
405
718
853
898
974
832
869
1,016
1,085
1,385
1,610
1,616
1,693
1,905
2,101
2,346
2,809
3,148
3,221
3,298
3,437
3,577
3,728
3,818
3,789
3 950
3,772
3] 737
3,722
3,713
3,752
3,780
3,789
3,817
3,814
3,810
3,810
3,789
3,734
3,708
3,688
3,697
3,746
3,769
3,808
3,857
3,881
3,910
3,931
3,950
Addendum:
Policy
loans by
life insurance
companies 3
1,009
1,496
1,910
2,224
2,431
2,814
3,357
4,111
4,781
5,392
6,112
6,789
7,582
8,116
9,386
10,617
11,673
13,414
15,618
17,848
20,412
22,187
24,018
26 900
22,035
22,024
22,131
22,309
22,473
22,718
22,837
23,168
23,332
23,430
23,634
24,018
23,949
24,076
24,200
24,459
24,737
25,052
25,314
25,725
25,979
26,202
26,429
26,900
6,031
5,366
5,320
5,513
5,761
5,948
5,922
5,930
5,956
5,995
6,146
6,968
6,424
5,859
5,710
6,026
6,276
6,368
6,457
6,574
6,550
6,692
6,964
7,800
913
1,019
1,200
1,326
1,281
1,305
1,353
1,442
1,373
1,325
1,418
1,591
2,136
2,522
2,729
2,920
3,401
3,718
3,987
4,114
4,411
5,129
5,619
5,957
6,427
7,193
7,844
8,767
9,417
10,350
11,381
12,560
13,318
14,238
15,300
13,521
13,684
13,728
13,852
13,882
13,874
13,850
13,843
13,904
13,869
14,017
14,238
14,457
14,679
14,797
14,903
14,823
14,819
14,775
14,832
14,902
14,893
15,118
15,300
5,231
5,733
6,234
6,655
7,140
7,678
9,117
10,059
9,222
9,303
9,397
9,499
9,582
9,671
9,734
9,805
9,861
9,933
9,996
10,080
10,167
10,258
10,362
10,474
10,599
10,729
10,813
10,925
11,026
11,117
* Holdings of financial institutions only; holdings of retail outlets are included in "other consumer goods paper."
2
Single-payment loans and service credit.
3 Year-end figures are annual statement asset values; month-end figures are book value of ledger assets. These loans
are not included in consumer credit series.
* Preliminary; December by Council of Economic Advisers.
Sources: Board of Governors of the Federal Reserve System and Institute of Life Insurance (except as noted).
292
T A B L E B—56.—Instalment credit extended and repaid, 1946—68
[Millions of dollars]
Other consumer
goods paper
Repair and modernization loans
Extended
Automobile
paper
Total
Extended
Personal
loans
Year or month
Extended
Repaid
Extended
Repaid
Repaid
Repaid
Extended
Repaid
1946..
1947..
1948..
1949..
8,495 6,785
12,713 10,190
15, 585 13,284
18,108 15,514
1,969
3,692
5,217
6,967
1,443
2,749
4,123
5,430
3,077
4,498
5,383
5,865
2,603
3,645
4,625
5,060
423
704
714
734
200
391
579
689
3,026
3,819
4,271
4,542
2,53d
3,405
3,957
4,335
1950..
1951..
1952..
1953..
1954..
21,558
23,576
29,514
31,558
31,051
18,445
22,985
25,405
27,956
30,488
8,530
8,956
11,764
12,981
11,807
7,011
9,058
10,003
10,879
11,833
7,150
7,485
9,186
9,227
9,117
6,057
7,404
7,892
8,622
9,145
835
841
1,217
1,344
1,261
717
772
917
1,119
1,255
5,043
6,294
7,347
8,006
8,866
4,660
5,751
6,593
7,336
8,255
1955..
1956..
1957.
1958..
1959.
38,972
39,866
42,019
40,110
48,048
33,634
37,056
39,870
40,339
42,603
16,734
15,515
16,465
14,226
17,779
13,082
14,555
15,545
15,415
15,579
10,642
11,721
11,810
11,738
13,981
9,752
10.758
11,574
11,557
12,402
1,393
1,582
1,674
1,871
2,222
1,316
1,370
1,477
1,626
1,765
10,203
11,051
12,069
12,275
14,070
9,484
10,373
11,276
11,741
12,857
1960.
1961.
1962.
1963.
1964.
49,793
49,048
56,191
63,591
70,670
46,073
48,124
51,360
56.825
63,470
17,657
16,029
19,694
22,126
24,046
16,419
16,552
17,447
19,254
21,369
14,525
14,551
15,701
17,920
20,821
13,613
14,235
14,935
16,369
18,666
2,215
2,092
2,084
2,186
2,225
1,876
2,015
2,010
2,046
2,086
15,396
16,377
18,710
21,359
23,578
14,165
15,319
16,969
19,156
21,349
1965.
1966.
1967.
19681.
78,586
82,335
84,693
96,450
69,957
76,120
81,306
87,650
27,227
27,341
26,667
31,300
23,543
25,404
26,499
27,950
22,750
25,591
26,952
30,400
20,518
23,178
25,535
28,000
2,266
2,200
2,113
2,300
2,116
2,110
2,142
2,150
26,343
27,203
28,961
32,450
23,780
25,428
27,130
29,550
Seasonally adjusted
1967: J a n . .
Feb..
Mar .
Apr...
May..
JuneJuly..
Aug..
Sept..
Oct..
NovDec...
6,792
6,735
6,803
6,856
6,744
7,114
6,590
6,617
6,566
6,766
6,554
6,794
2,162
2,146
2,170
2,184
2,173
2,277
2,158
2,219
2,156
2,248
2,168
2,235
2,196
2,144
2,134
2,176
2,113
2,213
2,069
2,034
2,053
2,123
2,055
2,097
168
179
180
179
188
193
173
181
176
185
180
185
2,266
2,266
2,319
2,317
2,270
2,431
2,190
2,183
2,181
2,210
2,151
2,277
7,059
7,272
7,278
7,250
7,304
7,360
6,802
6,874
6,965
6,934
6,913
7,001
2,228
2,259
2,297
2,253
2,262
2,233
2,196
2,215
2,280
2,244
2,190
2,205
2,248
2,320
2,339
2,307
2,303
2,383
2,145
2,172
2,188
2,193
2,193
2,255
169
172
169
169
174
170
179
176
180
176
178
171
2,414
2,521
2,473
2,521
2,565
2,574
2,282
2,311
2,317
2,321
2.352
2,370
1968: J a n . .
Feb...
Mar..
Apr...
May..
June..
7,453
7,847
7,903
7,863
8,033
8,003
7,054
7,111
7,281
7,222
7,301
7,287
2,385
2,559
2,605
2,509
2,590
2,570
2,254
2,275
2,316
2,297
2,327
2,289
2,339
2,458
2,531
2,597
2,535
2,536
2,223
2,269
2,372
2,340
2,312
2,324
169
184
183
189
197
179
182
173
185
176
184
175
2,560
2,646
2,584
2,568
2,711
2,718
2,395
2,394
2,408
2,409
2,478
2,499
8,247
8,187
8,416'
8,533
8,288
8,200
7,390
7,253
7,701
7,586
7,454
7,400
2,673
2,684
2,783
2,782
2,681
2,600
2,352
2,327
2,482
2,391
2,363
2,300
2,622
2,483
2,560
2,645
2,640
2,600
2,374
2,209
2,428
2,451
2,388
2,400
195
185
196
202
191
200
181
170
179
177
175
200
2,757
2,835
2,877
2,904
2,776
2,800
2,483
2,547
2,612
2,567
2,528
2,500
July..
Aug..
Sept..
Oct_.
Nov..
Dec*.
i Preliminary; December by Council of Economic Advisers.
Source: Board of Governors of the Federal Reserve System (except as noted).
293
TABLE B-57.—Mortgage debt outstanding, by type of property and of financing, 1939-68
[Billions of dollars]
Nonfarm properties
Nonfarm properties by type of mortgage
Conventional2
FHA-VA underwritten
End of year
or quarter
All
properties
Farm
properties
Total
1- to 4family
houses
Multifamily
Commercial
properties i
1- to 4-family houses
Total
Total
Total
FHA
insured
VA
guaranteed
1- to 4family
houses
1939..
35.5
6.6
28.9
16.3
5.6
7.0
1.8
1.8
1.8
27.1
14.5
1940..
1941..
1942..
1943..
1944..
36.5
37.6
36.7
35.3
34.7
6.5
6.4
6.0
5.4
4.9
30.0
31.2
30.8
29.9
29.7
17.4
18.4
18.2
17.8
17.9
5.7
5.9
5.8
5.8
5.6
6.9
7.0
6.7
6.3
6.2
2.3
3.0
3.7
4.1
4.2
2.3
3.0
3.7
4.1
4.2
2.3
3.0
3.7
4.1
4.2
27.7
28.2
27.0
25.8
25.5
15.1
15.4
14.5
13.7
13.7
1945..
1946..
1947..
1948..
1949..
35.5
41.8
48.9
56.2
62.7
4.8
4.9
5.1
5.3
5.6
30.8
36.9
43.9
50.9
57.1
18.6
23.0
28.2
33.3
37.6
5.7
6.1
6.6
7.5
8.6
6.4
7.7
9.1
10.2
10.8
4.3
6.3
9.8
13.6
18.1
4.3
6.1
9.3
12.5
15.0
4.1
3.7
3.8
5.3
6.9
0.2
2.4
5.5
7.2
8.1
26.5
30.5
34.1
37.3
39.0
14.3
16.9
18.9
20.8
22.6
1950..
1951..
1952..
1953..
1954..
72.8
82.3
91.4
101.3
113.7
6.1
6.7
7.2
7.7
8.2
66.7
75.6
84.2
93.6
105.4
45.2
51.7
58.5
66.1
75.7
10.1
11.5
12.3
12.9
13.5
11.5
12.5
13.4
14.5
16.3
22.1
26.6
29.3
32.1
36.2
18.9
22.9
25.4
28.1
32.1
8.6
9.7
10.8
12.0
12.8
10.3
13.2
14.6
16.1
19.3
44.6
49.0
54.9
61.5
69.2
26.3
28.8
33.1
38.0
43.6
1955.
1956.
1957.
1958.
1959.
129.9
144.5
156.5
171.8
190.8
9.0
9.8
10.4
11.1
12.1
120.9
134.6
146.1
160.7
178.7
88.2
99.0
107.6
117.7
130.9
14.3
14.9
15.3
16.8
18.7
18.3
20.7
23.2
26.1
29.2
42.9
47.8
51.6
55.2
59.2
38.9
43.9
47.2
50.1
53.8
14.3
15.5
16.5
19.7
23.8
24.6
28.4
30.7
30.4
30.0
78.0
86.8
94.5
105.5
119.4
49.3
55.1
60.4
67.6
77.0
1960.
1961.
1962.
1963.
1964.
206.8
226.3
248.6
274.3
300.1
12.8
13.9
15.2
16.8
18.9
194.0
212.4
233.4
257.4
281.2
141.3
153.1
166.5
182.2
197.6
20.3
23.0
25.8
29.0
33.6
32.4
36.4
41.1
46.2
50.0
62.3
65.5
69.4
73.4
77.2
56.4
59.1
62.2
65.9
69.2
26.7
29.5
32.3
35.0
38.3
29.7
29.6
29.9
30.9
30.9
131.7
146.9
164.1
184.0
204.0
84.8
93.9
104.3
116.3
128.3
1965
1966 v
1967 v
1968 v
325.8
347.0
369.8
396.6
21.2
23.3
25.5
27.8
304.6
323.6
344.3
368.8
212.9
223.6
236.1
251.3
37.2
40.1
43.7
47.2
54.5
59.9
64.5
70.3
81.2
84.1
88.2
73.1
76.1
79.9
42.0
44.8
47.4
31.1
31.3
32.5
223.4
239.5
256.1
139.8
147.5
156.1
1965: L...
II....
l
IV...
305.2
312.3
319.2
325.8
19.5
20.2
20.7
21.2
285.7
292.1
298.5
304.6
200.6
204.8
209.0
212.9
34.3
35.2
36.2
37.2
50.8
52.0
53.2
54.5
77.9
78.7
80.0
81.2
70.0
70.7
72.0
73.1
39.0
39.7
40.9
42.0
31.0
31.0
31.1
31.1
207.8
213.4
218.5
223.4
130.5
134.1
137.0
139.8
1966:
II p . .
III p .
IV p..
331.9
338.6
343.3
347.0
21.8
22.5
23.0
23.3
310.2
316.1
320.3
323.6
216.2
219.6
221.9
223.6
38.2
39.0
39.6
40.1
55.8
57.5
58.9
59.9
82.1
82.6
83.4
84.1
74.1
74.6
75.4
76.1
43.0
43.7
44.4
44.8
31.1
30.9
31.0
31.3
228.1
233.5
236.9
239.5
142.1
145.0
146.5
147.5
1967: \v,_.
II p..
III p .
IV p..
350.1
355.8
362.8
369.8
23.7
24.3
24.9
25.5
326.3
331.4
337.9
344.3
224.9
227.8
232.0
236.1
40.8
41.7
42.6
43.7
60.6
61.9
63.2
64.5
84.4
85.3
86.4
88.2
76.4
77.3
78.3
79.9
45.2
45.7
46.6
47.4
31.2
31.5
31.7
32.5
241.9
246.1
251.5
256.1
148.4
150.6
153.7
156.1
1968: I p__.
II p_III p.
IV p
375.3
382.5
389.4
396.6
26.0
26.8
27.3
27.8
349.3
355.8
362.1
368.8
239.3
243.3
247.3
251.3
44.2
45.2
46.1
47.2
65.8
67.2
68.8
70.3
89.4
90.7
92.0
81.0
82.1
83.2
48.1
48.7
49.6
32.9
33.4
33.6
259.9
265.0
270.1
158.3
161.2
164.1
1 Includes negligible amount of farm loans held by savings and loan associations.
2 Derived figures.
Source: Board of Governors of the Federal Reserve System, estimated and compiled from data supplied by various
Government and private organizations.
294
TABLE B-58.—Mortgage debt outstanding, by lender, 1939-68
(Billions of dollars]
Selected financial institutions
Total
End of year or quarter
Total
Savings
and
loan
associations
Mutual
savings
banks
Other lenders
Commercial
banks i
Life
insurance
U.S.
comagencies 2
panies
Individuals
and
others
1939
35.5
18.6
3.8
4.8
4.3
5.7
5.0
11.9
1940
1941
1942
1943
1944
36.5
37.6
36.7
35.3
34.7
19.5
20.7
20.7
20.2
20.2
4.1
4.6
4.6
4.6
4.8
4.9
4.8
4.6
4.4
4.3
4.6
4.7
4.7
4.5
4.4
6.0
6.4
6.7
6.7
6.7
4.9
4.7
4.3
3.6
3.0
12.0
12.2
11.7
11.5
11.5
1945
1946
1947
1948
1949
35.5
41.8
48.9
56.2
62.7
21.0
26.0
31.8
37.8
42.9
5.4
7.1
8.9
10.3
11.6
4.2
4.4
4.9
5.8
6.7
4.8
7.2
9.4
10.9
11.6
6.6
7.2
8.7
10.8
12.9
2.4
2.0
1 8
1.9
2.4
12.1
13.8
15 3
16.5
17.4
1950
1951
1952
1953
1954
72.8
82.3
91.4
101.3
113.7
51.7
59.5
66.9
75.1
85.7
13.7
15.6
18.4
22.0
26.1
8.3
9.9
11.4
12.9
15.0
13.7
14.7
15.9
16.9
18.6
16.1
19.3
21.3
23.3
26.0
2.7
3.4
40
4.4
4.6
18.4
19.4
20 5
21.8
23.4
1955
1956
1957
1958
1959
129.9
144.5
156.5
171.8
190.8
99.3
111.2
119.7
131.5
145.5
31.4
35.7
40.0
45.6
53.1
17.5
19.7
21.2
23.3
25.0
21.0
22.7
23.3
25.5
28.1
29.4
33.0
35.2
37.1
39.2
5.2
60
7.4
7.8
10.0
25.4
27.3
29.3
32.5
35.4
206.8
226.3
248.6
274.3
300.1
157.6
172.6
192.5
217.1
241.0
60.1
68.8
78.8
90.9
101.3
26.9
29.1
32.3
36.2
40.6
28.8
30.4
34.5
39.4
44.0
41.8
44.2
46.9
50.5
55.2
11.2
11.8
12.2
11.2
11.4
38.0
41.9
44.0
45.9
47.7
325.8
347.0
369.8
396.6
264.6
280.8
298.9
319.3
110.3
114.4
121.9
130.7
44.6
47.3
50.5
53.4
49.7
54.4
59.0
65.6
60.0
64.6
67.5
69.8
12.4
15.8
18.4
21.8
48.7
50.4
52.4
55.3
IV
305.2
312.3
319.2
325.8
245.8
252.3
258.7
264.6
103.2
105.9
108.4
110.3
41.5
42.5
43.5
44.6
44.8
46.5
48.4
49.7
56.3
57.3
58.4
60.0
11.6
11.7
11 9
12.4
47.8
48.2
48.6
48.7
1966: 1 v
II v
III v . .
IV v
331.9
338.6
343.3
347.0
269.6
274.7
278.2
280.8
112.3
114.0
114.4
114.4
45.4
45.9
46.6
47.3
50.7
52.3
53.6
54.4
61.2
62.5
63.6
64.6
13.5
14.4
15.2
15.8
48.8
49.4
50.0
50.4
1967: 1 v
II v
III p
IV v
350.1
355.8
362.8
369.8
282.9
287.7
293.4
298.9
114.8
116.9
119.5
121.9
48.1
48.9
49.7
50.5
54.5
55.7
57.5
59.0
65.5
66.1
66.6
67.5
16 4
16.7
17.5
18.4
50 8
51.4
52.0
52.4
1968: 1 v
II *
III v
\\v
375.3
382.5
389.4
396.6
302.7
308.2
313.6
319.3
123.4
126.0
128.4
130.7
51.2
51.8
52.5
53.4
60.1
62.0
63.8
65.6
68.0
68.4
68.9
69.8
19.6
20.6
21. 1
21.8
53.0
53.8
54.7
55.3
1960
1961
1962
1963
1964
.
.
.
_ .
1965
1966 v
1967 *.
1968 P
.__.
1965: 1
II
III
1
Includes loans held by nondeposit trust companies, but not bank trust departments.
2 Includes former FNMA and new GNMA, as well as FHA, VA, PHA, Farmers' Home Administration and in earlier years
RFC, HOLC and FFMC. Also includes U.S.-sponsored agencies such as new FNMA and Federal land banks. Other U.S.
agencies (amounts small or current separate data not readily available) included with "individuals and others."
Sources: Board'of Governors of the Federal Reserve System, based on data from related Government and private organizations, including Federal Home Loan Bank Board, Federal Deposit Insurance Corporation, Institute of Life Insurance, Federal National Mortgage Association, Government National Mortgage Association, and Department of Commerce.
295
TABLE B-59.—Net public and private debt, 1929-68 *
[Billions of dollars]
Public
Private
Individual and noncorporate
End of year
Total
Federal
FedState
Goveral
and
ern- finan- local
ment
cial 3 govand agency ernagency2
ment
Nonfarm
Total
Corporate
Total
Total
Mortgage
Commercial
and
financial*
Farm *
Consumer
1929
191.9
16.5
13.6
161.8
88.9
72.9
12.2
60.7
31.2
22.4
7.1
1930
1931
1932
1933
1934
192.3
182.9
175 0
168.5
171.6
16.5
18.5
21 3
24.3
30.4
14.7
16.0
16 6
16.3
15.9
161.1
148.4
137.1
127.9
125.3
89.3
83.5
80.0
76.9
75.5
71.8
64.9
57.1
51.0
49.8
11.8
11.1
10.1
9.1
8.9
60.0
53.8
47.0
41.9
40.9
32.0
30.9
29 0
26.3
25.5
21.6
17.6
14 0
11.7
11.2
6.4
5.3
4.0
3.9
4.2
1935
1936
1937
1938
1939
175.0
180.6
182.2
179.9
183.3
34.4
37.7
39.2
40.5
42.6
16.1
16.2
16.1
16.1
16.4
124.5
126.7
126.9
123.3
124.3
74.8
76.1
75.8
73.3
73.5
49.7
50.6
51.1
50.0
50.8
8.9
8.6
8.6
9.0
8.8
40.8
42.0
42.5
41.0
42.0
24.8
24.4
24.3
24.5
25.0
10.8
11.2
11.3
10.1
9.8
5.2
6.4
6.9
6.4
7.2
1940
1941
1942
1343
1944
189 8 44 8
211.4
56.3
258.6 101.7
154.4
313.2
370.6 211.9
16 4
16.1
15.4
14.5
13.9
128.6
139.0
141.5
144.3
144.8
75.6
83.4
91.6
95.5
94.1
53.0
55.6
49.9
48.8
50.7
9.1
9.3
9.0
8.2
7.7
43.9
46.3
40.9
40.5
42.9
26.1
27.1
26.8
26.1
26.0
95
10.0
8.1
9.5
11.8
8.3
9.2
6.0
4.9
5.1
1945
1946
1947..
1948
1949
405.9
396.6
415.7
431.3
445.8
252.5
229.5
221.7
215.3
217.6
0.7
.6
.7
13.4
13.7
15.0
17.0
19.1
140.0
153.4
178.3
198.4
208.4
85.3
93.5
108.9
117.8
118.0
54.7
59.9
69.4
80.6
90.4
7.3
7.6
8.6
10.8
12.0
47.4
52.3
60.7
69.7
78.4
27.0
31.8
37.2
42.4
47.1
14.7
12.1
11.9
12.9
13.9
5.7
8.4
11.6
14.4
17.4
1950
1951
1952 19531954
486.1
518.9
549.7
581.1
605.2
217.4
216.9
221.5
226.8
229.1
.7
1.3
1.3
1.4
1.3
21.7
24.2
27.0
30.7
35.5
246.3
276.5
299.9
322.2
339.3
142.1
162.5
171.0
179.5
182.8
104.2
114.0
128.9
142.7
156.5
12.3
13.7
15.2
16.8
17.5
92.0
100.3
113.7
126.0
139.0
54.7
61.4
68.4
76.2
85.7
15.8
16.2
17.8
18.4
20.8
21.5
22.7
27.5
31.4
32.5
1955
1956
1957
1958
1959
664.3
697.6
727.4
768.2
830.7
229.6
224.3
223.0
231.0
241.4
2.9
2.4
2.4
2.5
3.7
40.2
44.4
48.6
53.2
58.0
391.6
426.5
453.4
481.5
527.6
212.1
231.7
246.7
259.5
283.3
179.5
194.8
206.7
222.0
244.3
18.7
19.4
20.2
23.2
23.8
160.9
175.4
186.5
198.8
220.5
98.1
108.7
117.2
127.2
140.3
24.0
24.4
24.3
26.5
28.7
38.8
42.3
45.0
45.1
51.5
1960
1961 —
1962
1963
1964
872.0
929.4
997.0
1,071.2
1,154.0
239.8
246.7
253.6
257.5
264.0
3.5
4.0
5.3
7.2
7.5
63.0
70.0
78.1
84.7
92.4
565.7
608.7
660.0
721.8
790.1
302.8
324.3
348.2
376.1
409.9
262.9
284.4
311.8
345.7
380.2
25.1
27.5
30.2
33.2
36.0
237.8
256.9
281.6
312.5
344.2
150.9
164.1
180.2
198.5
218.5
30.8
34.8
37.6
42.3
45.4
56,1
58.0
63 J
71.7
80.3
1965
1966
1967
1,243.8
1,335.7
1,424.8
1,547.4
266.4
271.8
286.5
292.5
8.9
11.2
9.0
21.6
99.9 868.6
107.1 945.6
117.9 1,011.4
129.5 1,103.8
452.3
498.3
534.4
586.0
416.3
447.3
477.0
517.8
39.3
42.0
46.0
50.0
377.0
405.3
431.0
467.8
236.4
251.6
265.5
283.5
50.3
56.2
63.4
71.5
90.3
97.5
102.1
112.8
1968<>
1
Net public and private debt is a comprehensive aggregate of the indebtedness of borrowers after eliminating certain
types of duplicating governmental and corporate debt. For a further explanation of the concept, see "Survey of Current
Business," October 1950.
2
Net Federal Government and agency debt is the outstanding debt held by the public, as defined in the "Budget of the
United States Government, for the Fiscal Year ending June 30,1970." Figures shown here are subject to revision.
s This comprises the debt of Federally-sponsored agencies, in which there is no longer any Federal proprietary interest.
The obligations of the Federal Land Banks are included here beginning in 1947; the debt of the Feieral Home Loan Banks
is included beginning in 1951; and the debt of the Federal National Mortgage Association—Secondary Market Operations
is 4included beginning with 1968.
Farm mortgages and farm production loans. Farmers' financial and consumer debt is included in the nonfarm categories.
5
Financial debt is debt owed to banks for purchasing or carrying securities, customers' debt to brokers, and debt owed
to6life insurance companies by policyholders.
Estimates.
Sources: Department of Commerce (Office of Business Economics), Treasury Department, Department of Agriculture.
Board of Governors of the Federal Reserve System, Federal Home Loan Bank Board, Federal Land Banks, and Federal
National Mortgage Association.
296
GOVERNMENT FINANCE
TABLE B-60.—Federal budget receipts and outlays, 1929-70
[Millions of dollars]
Fiscal year
Receipts
Administrative budget:
1929
1930..
1931
1932..
1933...
1934
1935..
Outlays
Surplus or
deficit ( - )
3,861
4,058
.
3,116
1,924
1,997
3,015
3,706
. . .
1936
19371938
1939
Consolidated cash statement:
1940
734
738
3,577
4,659
4,598
6,645
6,497
-462
-2,735
-2,602
-3,630
-2,791
3,997
4,956
5,588
4,979
.
3 127
3,320
8,422
7,733
6,765
8,841
-4,425
-2,777
-1,177
-3,862
6,879
9,589
-2,710
9,202
15,104
25,097
47,818
50,162
13,980
34,500
78,909
93,956
95,184
-4,778
-19,396
-53,812
-46,138
-45,022
43,537
43,531
45,357
41,576
40,940
61,738
36,931
36,493
40,570
43,147
-18,201
6,600
8,864
1,006
-2,207
53,390
68,011
71,495
45,797
67,962
76,769
7,593
49
-5,274
69,920
65,462
71,138
68,503
-1,218
-3,041
74,581
79,958
79,621
79,179
92,470
70,461
76,748
82,575
92,111
92,230
4,121
3,210
-2,954
-12,932
240
1961—
1962
1963...
1964...
1965
94,378
99,657
106,572
112,669
116,813
97,802
106,830
111,314
118,585
118,431
-3,424
-7,174
-4,742
-5,916
-1,618
1966
1967
1968
19691
1970 i
130,864
149,562
153,676
186,092
198,686
134,654
158,352
178,862
183,701
195,272
-3,790
-8,790
-25,187
2,391
3,414
1941
1942
1943
1944...
1945
.
1946...
1947....
1948
1949—
1950
1951
1952
1953 .
Unified budget:
1954
1955...
1956
1957
1958
1959.-.
1960
.
.
.
..
1 Estimate.
Note.—Certain interfund transactions are excluded from receipts and outlays starting in 1932. For years prior to 1932 the
amounts of such transactions are not significant.
Refunds of receipts are excluded from receipts and outlays starting in 1913; comparable data are not available for prior
years.
Source: Bureau of the Budget.
297
TABLE B-61.—Federal budget receipts, outlays,financing,and debt, 1959-70
[Millions of dollars; fiscal years]
Actual
Description
1959
1960
1961
79,179
89,453
92,470
90,348
94,378
96,604
99,657
104,480
106, 572
111,459
112,669
118,041
-10,274
2,122
-2,226
-4,823
-4,887
-5,372
Loan account:
Loan disbursements.
Loan repayments
7,859
5,201
8,310
6,427
7,869
6,671
9,621
7,271
9,646
9,791
10,237
9,693
Net lending.
2,659
1,882
1,198
2,351
-145
545
79,179
92,111
92,470
92,230
94,378
97,802
99,657
106,830
106,572
111,314
112,669
118,585
RECEIPTS, EXPENDITURES, AND NET LENDING :
Expenditure account:
Receipts
Expenditures (excludes net lending)...
Expenditure account surplus or
deficit(-)
Total budget:
Receipts
Outlays (expenditures and net lending).
1962
1963
1964
-12,932
240
-3,424
-7,174
-4,742
-5,916
BUDGET FINANCING:
Borrowing from the public.
Other means of financing...
8,665
4,267
2,142
-2,382
1,465
1,959
9,734
-2,560
6,120
-1,378
3,089
2,827
Total budget financing...
12,932
-240
3,424
7,174
4,742
5,916
287,739
234,970
290,799
237,112
292,869
238,577
303,227
248,311
310,775
254,431
316,728
257,520
Budget surplus or deficit (—)
OUTSTANDING DEBT, END OF YEAR:
Gross Federal debt
Held by the public
79,179
Individual income taxes
Corporation income taxes
Employment taxes and contributions
Unemployment insurance 2
,„
Contributions for other insurance and retirement
Excise taxes...
Estate and gift taxes
Customs duties
Miscellaneous receipts3
MEMORANDUM:
Federal funds..
Trust funds
BUDGET OUTLAYS (EXPENDITURES
NET LENDING)
94,378
99,657
106,572
112,669
40,715
21,494
11,248
2,667
41,338
20,954
12,680
2,902
45,571
20,523
12,835
3,337
47,588
21,579
14,747
4,112
48,697
23,493
16,959
4,045
769
10, 578
1,333
925
594
766
11,676
1,606
1,105
1,193
855
11,860
1,896
982
910
873
12,534
2,016
1,142
826
944
13,194
2,167
1,205
1,036
1,006
13,731
2,394
1,252
1,093
75, 563
16,907
75,118
19,260
79,635
20,022
83,463
23,109
87,111
25,558
92,111
92,230
97,802
106,830
111,314
118,585
46,617
3,267
145
5,365
1,209
4,451
851
1,081
17,690
5,428
7,070
1,173
45,908
3,054
401
3,322
1,019
4,774
971
1,282
18,734
5,426
8,299
1,334
47,383
3,357
744
3,340
1,568
5,048
191
1,480
21,847
5,688
8,108
1,543
51,097
4,492
1,257
4,131
1,686
5,410
589
1,703
23,374
5,625
8,321
1,703
52,257
4,115
2,552
5,139
1,505
5,745
-880
1,706
25,274
5,520
9,215
1,841
53,591
4,117
4,170
5,186
1,972
6,482
-185
1,998
26,598
5,681
9,810
2,103
-2,238
-2,296
-2,495
- 2 , 558
-2,674
-2,939
77,111
17,323
-2,322
74,869
19,986
-2,626
79,339
21,774
-3,311
86,599
23,394
-3,163
90,135
23,898
-2,719
95,761
25,941
-3,118
AND
National defense
International affairs and finance
Space research and technology
Agriculture and agricultural resources
NaturaI resources
Commerce and transportation
Community development and housing
Education and manpower
Health and welfare
Veterans benefits and services
Interest
General government
Allowances.
T —
Undistributed intragovernmental transactions
.
MEMORANDUM:
Federal funds
Trust funds
Intragovernmental transactions.
92,470
36,719
17,309
8,821
2,131
65,679
13,500
BUDGET RECEIPTS.
See footnotes at end of table.
298
TABLE B-61.—Federal budget receipts, outlays,financing,and debt, 1959-70—Continued
[Millions of dollars; fiscal years]
Estimate
Actual
Description
1969
1965
RECEIPTS, EXPENDITURES, AND NET LENDING:
Expenditure account:
Receipts
Expenditures (excludes net lending)
Expenditure account
deficit ( - )
surplus
1966
1967
1968
116,813
117,182
130,864
130,822
149,562
153,299
153,676
172,830
186,092
182,315
198,686
194,356
1970
or
-369
42
-3,736
-19,153
3,777
4,330
Loan account:
Loan disbursements.
Loan repayments
10,911
9,662
14,628
10,796
17,676
12,623
20,422
14,389
12,478
11,092
8,113
7,197
Net lending.
1,249
3,832
5,053
6,032
1,386
916
116,813
118,431
130,864
134,654
149,562
158,352
153,676
178,862
186,092
183,701
198,686
195,272
Total budget:
Receipts
Outlays (expenditures and net lending).
Budget surplus or deficit ( - )
-1,618
-3,790
-8,790
-25,187
2,391
3,414
BUDGET FINANCING;
Borrowing from the public.
Other means of financing...
4,037
-2,419
3,080
710
2,854
5,936
23,095
2,092
-3,091
700
- 4 , 000
586
Total budget financing.._
1,618
3,790
8,790
25,187
1-2,391
-3,414
OUTSTANDING DEBT, END OF YEAR:
Gross Federal debt
Held by the public
323,096
261,557
329,419
264,637
341,309
267,491
369,724
290,586
365,159
276,586
371,482
272,586
BUDGET RECEIPTS..
116,813
130,864
149,562
153,676
186,092
198,686
48,792
25,461
17,359
3,819
55,446
30,073
20,662
3,777
61,526
33,971
27,822
3,659
68,726
28,665
29,223
3,346
84,400
38,100
34,842
3,300
90,400
37,900
39,863
3,575
1,079
14,570
2,716
1,442
1,576
1,127
13,062
3,066
1,767
1,885
1,866
13,719
2,978
1,901
2,120
2,050
14,079
3,051
2,038
2,498
2,366
14,800
3,200
2,300
2,784
2,431
15, 700
3,400
2,300
3,117
90,863
25,950
101,344
29,520
111,732
37,829
114,627
39, 049
141,050
45,042
147,795
50,891
118,431
134,654
158,352
178,862
183,701
195,272
49,578
4,340
5,091
4,807
2,063
7,364
288
2,509
27,209
5,722
10,357
2,276
56,785
4,490
5,933
3,679
2,035
7,135
2,644
4,496
31,320
5,920
11,285
2,360
70,081
4,547
5,423
4,376
1,860
7,652
2,616
6,135
37,605
6,897
12, 588
2,584
80,516
4,619
4,721
5,944
1,702
8,076
4,076
7,012
43,508
6,882
13,744
2,632
80,999
3,938
4,247
5,448
1,898
8,048
2,313
7,165
48,839
7,692
15,171
2,948
100
81,542
3,755
3,947
5,181
1,891
8,969
2,772
7,887
54,966
7,724
15,958
3,275
3,150
-3,174
-3,431
- 4 , 009
- 4 , 570
-5,105
- 5 , 745
94,807
27,081
--3,457
106,513
31,809
-3,668
126,780
36,932
-5,360
143,105
41,529
-5,771
148,160
43,037
-7,496
154,722
48,431
-7,881
Individua! income taxes
^..
Corporation income taxes
Employment taxes and contributions
Unemployment insurance2
Contributions for other insurance and
reti re m e nt
Excise taxes
Estate and gift taxes
Customs duties
Miscellaneous receipts3
MEMORANDUM:
Federal funds..
Trust funds...
BUDGET OUTLAYS (EXPENDITURES
NET LENDING)
AND
National defense
International affairs and finance
Space research and technology
Agriculture and agricultural resources
Natural resources
Commerce and transportation
Community development and housing
Education and manpower
Health and welfare
Veterans benefits and services
Interest
General government
Allowances
Undistributed intragovernmental transactions
MEMORANDUM:
Federal funds
Trust funds
Intragovernmental transactions.
1
2
3
Excludes $10,803 million of net credits for conversion of mixed-ownership enterprises to private ownership.
Includes Federal funds of $321 million in 1959 and $339 million in 1960.
Includes both Federal funds and trust funds.
Source: Bureau of the Budget.
299
TABLE B-62.—Relation of the Federal Budget to the Federal sector of the national income and
product accounts, 1967-70
[Billions of dollars; fiscal years]
Actual
Estimate
Receipts and Expenditures
1967
1968
1970
1969
RECEIPTS
149.6
198.7
2.1
1.4
-.'l
2.2
1.3
.2
-.1
161.1
190.0
202.3
158.4
178.9
183.7
195.3
-5.1
1.7
1.2
-.4
-1.6
-.8
1.1
-6.0
1.9
1.1
-2.1
-1.6
-.7
.9
-1.4
2.1
1.4
1.8
-1.1
-.4
1.1
-.9
2.2
1.3
1.8
-1.0
-.3
1.2
154.4
Federal sector, national income and product accounts,
receipts
186.1
1.9
1.1
4.6
-.2
147.7
Employer share, employee retirement..
Other netting and grossing
Adjustment to accruals
Other
153.7
1.7
1.2
-4.7
-.2
Total receipts, budget.
172.4
187.3
199.6
EXPENDITURES
Total outlays, budget.
Loan account
Employer share, employee retirement
Other netting and grossing
Defense timing adjustment..
Lending inthe expenditure account
_
Dollar expenditures to finance agricultural exports.
Other
Federal sector, national income and product accounts,
expenditures
_
Note.—See Special Analysis A, "Budget of the United States Government for the Fiscal Year Ending June 30, 1970,"
for description of these categories.
Sources: Bureau of the Budget and Department of Commerce (Office of Business Economics).
300
TABLE B-63.—Receipts and expenditures of the Federal Government sector of the national income
and product accounts, 1946-70
[Billions of dollars]
Receipts
Year or quarter
Fiscal year:
1946
1947
1948
1949
1950
1951
1952
1953
1954
1955..
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
19691
19701
Calendar year:
1946
1947..
1948
1949
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968 v
Total
Expenditures
Indirect
Personal Cor- busipo- | ness
tax
rate
tax
and
non- profits and
tax
nontax
actax
receipts cruals accruals
Transfer
payments
Contributions
for
social
insurance
Total
Purchases
of
goods
and
services
To
persons
To
foreigners
(net)
Grantsin-aid
to State
and
local
governments
Net
interest
paid
Subsidies
less
current
surplus
of
government
enterprises
Surplus
or
deficit
national
income
and
product
accounts
38.4
42.7
43.6
40.0
42.0
60.8
65.1
69.3
65.8
67.2
75.8
80.7
77.9
85.4
94.8
95.3
104.2
110.2
115.5
120.5
133.0
147.7
161.1
190.0
202.3
16.9
18.8
20.0
16.3
16.5
23.2
28.8
31.4
30.3
29.7
33.6
36.7
36.3
38.2
42.5
43.6
47.3
49.6
50.7
51.3
57.6
64.5
71.6
88.6
94.0
8.3
10.6
11.2
11.0
11.9
21.5
19.3
19.7
17.3
18.7
21.1
20.6
17.8
21.5
22.3
20.3
22.9
23.5
25.7
27.7
31.2
31.4
34.5
39.3
40.2
7.4
7.9
7.9
8.0
8.2
9.5
9.7
10.7
10.4
10.0
10.8
11.7
11.6
11.9
13.2
13.3
14.2
15.0
15.6
16.9
15.7
16.0
17.1
18.1
19.2
5.8
5.5
4.6
4.8
5.5
6.6
7.3
7.5
7.8
8.7
10.2
11.7
12.2
13.8
16.7
18.1
19.9
22.1
23.5
24.6
28.5
35.8
37.9
44.0
48.9
55.5
29.5
30.9
39.6
42.4
44.6
66.0
75.8
74.2
67.3
69.8
76.0
83.1
90.9
91.3
98.0
106.4
111.4
116.9
118.5
131.9
154.4
172.4
187.3
199.6
40.1
13.0
13.2
19.3
19.0
25.1
46.6
56.1
53.2
43.9
45.2
47.7
50.7
54.7
52.7
55.5
60.9
63.4
65.7
64.4
71.7
84.9
95.6
101.5
105.6
8.3
8.7
8.1
11.3
8.1
8.5
9.3
10.5
12.1
12.8
14.4
17.8
19.8
20.6
23.6
25.1
26.4
27.3
28.3
31.8
37.3
42.4
48.0
52.8
1.8
2.6
5.0
4.3
3.1
2.6
2.1
1.7
2.1
1.8
1.9
1.7
1.8
1.8
2.1
2.1
2.1
2.2
2.2
2.3
2.2
2.1
2.1
2.1
0.9
1.5
1.8
2.1
2.4
2.4
2.5
2.8
2.9
3.0
3.2
3.7
4.7
6.2
6.8
6.9
7.6
8.4
9.8
10.9
12.7
14.8
17.4
19.6
23.0
3.7
4.2
4.2
4.3
4.4
4.6
4.8
4.8
5.0
4.9
5.1
5.5
5.7
5.9
7.0
6.8
6.8
7.5
8.1
8.5
9.0
9.9
10.8
12.0
12.2
2.1 -17.1
.7
13.2
.5
12.7
.8
.4
1.0
-.5
1.3
16.2
1.1 - 1 . 0
.9 - 6 . 5
1.0 -8.5
1.3
-.1
6.0
1.7
2.8
4.7
2.5 - 5 . 1
2.4 - 5 . 5
2.3
3.5
3.2 - 2 . 7
3.8 - 2 . 1
3.6 - 1 . 2
3.8 - 1 . 4
4.1
2.0
4.5
1.0
5.3 - 6 . 7
4.1 -11.3
2.7
4.1
2.7
3.9
39.1
43.2
43.3
38.9
49.9
64.0
67.2
70.0
63.8
72.1
77.6
81.6
78.7
89.7
96.5
98.3
106.4
114.5
115.0
124.7
143.0
151.2
176.9
17.2
8.6
19.6 10.7
19.0 11.8
16.1
9.8
18.1 17.0
26.1 21.5
31.0 18.5
32.2 19.5
29.0 17.0
31.4 20,6
35.2 20.6
37.4 20.2
36.8 18.0
39.9 22.5
43.6 21.7
44.7 21.8
48.6 22.7
51.5 24.6
48.6 26.4
53.8 29.3
61.7 32.4
67.3 I 30.9
79.4 i 38.4
7.8
7.8
8.0
8.0
8.9
9.4
10.3
10.9
9.7
10.7
11.2
11.8
11.5
12.5
13.5
13.6
14.6
15.3
16.1
16.5
15.8
16.2
17.6
5.5
5.1
4.5
4.9
5.9
7.1
7.4
7.4
8.1
9.3
10.6
12.2
12.4
14.8
17.7
18.2
20.5
23.1
23.8
25.1
33.1
36.8
41.5
35.6
29.8
34.9
41.3
40.8
57.8
71.0
77.0
69.7
68.1
71.9
79.6
88.9
91.0
93.0
102.1
110.3
113.9
118.1
123.5
142.4
163.6
182.2
17.2
9.2
12.5
8.8
16.5
7.6
20.1
8.7
18.4 10.8
37.7
8.5
51.8
8.8
57.0
9.5
47.4 11.5
44.1 12.4
45.6 13.4
49.5 15.7
53.6 19.5
53.7 20.1
53.5 21.5
57.4 24.9
63.4 25.5
64.2 27.0
65.2 27.8
66.9 30.3
77.4 33.4
90.6 40.1
100.0 I 45.7
2.2
1.9
3.8
5.1
3.6
3.1
2.1
2.0
1.8
2.0
1.9
1.8
1.8
1.8
1.9
2.1
2.2
2.2
2.2
2.2
2.3
2.2
2.1
1.1
1.7
2.0
2.2
2.3
2.5
2.6
2.8
2.9
3.1
3.3
4.2
5.6
6.8
6.5
7.2
8.0
9.1
10.4
11.1
14.4
15.7
18.4
4.2
4.2
4.3
4.4
4.5
4.7
4.7
4.9
5.0
4.9
5.3
5.7
5.6
6.4
7.1
6.6
7.2
7.7
8.3
8.7
9.5
10.3
11.9
3.5
1.6
13.4
.6
8.4
.7
.8 - 2 . 4
1.2
9.1
1.3
6.2
1.0 - 3 . 8
.8 - 7 . 0
1.1 -5.9
1.5
4.0
2.4
5.7
2.6
2.1
2.7 -10.2
2.1 - 1 . 2
2.5
3.5
3.8 - 3 . 8
4.0 - 3 . 8
3.6
4.2 -3.0
4.3
1.2
5.4
.7
4.8 -12.4
4.2 - 5 . 3
57.6
61.3
62.9
64.9
66.0
65.1
68.2
69.7
72.0
74.9
83.7
86.8
15.2
15.9
16.0
16.1
15.9
16.1
16.3
16.4
17.0
17.5
17.8
18.1
31.8
32.5
33.8
34.5
35.9
36.5
37.0
37.9
40.5
41.2
42.0
42.4
13.3
14.2
14.9
15.1
15.1
14.6
15.9
17.0
17.7
18.3
18.5
19.2
9.1
9.3
9.5
10.0
10.2
9.9
10.2
10.7
11.3
11.8
12.1
12.2
5.0
5.3
5.9
5.5
5.1
4.8
4.8
4.6
3.9
4.1
4.4
4.2
Seasonally adjusted annual rates
136.8
142.1
145.5
147.7
148.1
148.2
152.2
I V . . . 156.4
1968: I . . . . 166.6
I I . . . . 171.8
I I I . . . 182.1
IV v_
1966: l . _ . .
II...
III...
IV..
1967: I . . . .
32.2
32.4
32.8
32.2
30.3
30.5
30.6
32.4
37.0
38.2
38.6
134.8
138.4
145.8
150.5
159.3
161.5
165.1
168.6
175.1
181.9
184.9
186.8
72.5
75.6
79.9
81.5
87.4
90.0
91.3
93.5
97.1
100.0
101.2
101.6
32.2
31.6
33.4
36.4
39.3
39.9
40.3
40.8
43.2
45.6
46.6
47.4
2.7
2.3
2.2
1.9
2.2
2.3
2.6
1.9
1.9
2.1
2.1
2.1
2.0
3.7
-2.8
-11.2
-13.3
-12.9
-12.2
-8.6
-10.2
-2.8
i Estimates.
Note.—Includes the transactions of the trust accounts and excludes certain financial transactions. Corporate profits
taxes are included in receipts on an accrual basis; expenditures are timed with the delivery; and CCC guaranteed pricesupport crop loans are counted as expenditures when the loans are made, not when CCC redeems them.
Sources: Department of Commerce (Office of Business Economics) and Bureau of the Budget.
301
323-166 0—69
TABLE B-64.—Public debt securities by kind of obligation, 1929-68
[Billions of dollars]
Interest-bearing public debt
Total
public
debt
securities i
End of year or month
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
1955
1956
1957
1958
1959
I960
1961
1962
1963
1964
1965
1966
1967
1968
1967- Jan
Feb
Mar
Apr
May
June
July
Aug
Sept
Oct
Nov
Dec
1968: Jan
Feb
Mar
Apr
May
June
July
Aug
Sept
Oct
Nov
Dec
.
.
.
. .
...
.
.
..
.
- -
_
.
...
-.-
_
_
.
_
-
Marketable public
issues
Shortterm
issues 2
16 3
16.0
17.8
20.8
23 6
28.5
30.6
34.4
37.3
39.4
41.9
45.0
57.9
108 2
165.9
230.6
278.1
259.1
256.9
252.8
257.1
256.7
259.4
267.4
275.2
2/8. 7
280.8
276.6
274.9
282.9
290.8
290.2
296.2
303.5
309.3
317.9
320.9
329.3
344.7
358.0
328.9
329.6
330.9
327.8
330.9
326.2
330.6
335.8
335.9
340.5
345.1
344.7
346.3
351.6
349.5
347.0
352.3
347.6
351.1
354.4
354.7
357.2
356.9
358.0
3.3
2.9
2.8
5.9
7.5
11.1
14.2
12.5
12.5
9.8
7.7
7.5
8.0
27.0
47.1
69.9
78.2
57.1
47.7
45.9
50.2
58.3
65.6
68.7
77.3
76.0
81.3
79.5
82.1
92.2
103.5
109.2
120.5
124.6
121.2
115.5
110.4
118.9
131.2
151.5
119.7
120.2
120.9
118.1
118.8
113.3
117.6
120.9
121.3
126.0
130.8
131.2
134.1
139.6
138 0
135.1
140.7
135.5
139.9
144.8
145.2
148.3
149.5
151.5
Treasury
bonds
11.3
11.3
13.5
13.4
14.7
15.4
14.3
19.5
20.5
24.0
26.9
28.0
33.4
49.3
67.9
91.6
120.4
119.3
117.9
111.4
104.8
94.0
76.9
79.8
77.2
81.8
81.9
80.8
82.1
83.4
84.8
79.8
75.5
78.4
86.4
97.0
104.2
99.2
95 2
85.3
99.1
99.1
99.0
99.0
97.9
97.4
97.4
97.4
97.3
97.3
95.3
95.2
95.2
93.6
93 6
93.6
91.1
91.1
91.0
88 4
88.3
88.3
86.2
85.3
Nonmarketable
public issues
United
States
savings
bonds 3
0.2
.5
1.0
1.4
2.2
3.2
6.1
15.0
27.4
40.4
48.2
49.8
52.1
55.1
56.7
58.0
57.6
57.9
57.7
57.7
57.9
56.3
52.5
51.2
48.2
47.2
47.5
47.5
48.8
49.7
50.3
50.8
51 7
52.3
50.8
50.9
51.0
51.1
51.1
51.2
51.3
51.4
51 4
51.6
51.7
51.7
51.7
51.7
51 8
51.8
51.9
51.9
52.0
52 0
52.1
52.2
52.3
52.3
Investment
bonds *
Special
issues«
0.6
.8
.4
.4
4
.6
1.0
1.0
1.0
1.0
13.0
13.4
12.9
12.7
12.3
11.6
10.3
9.0
7.6
6.2
5.1
4.4
3.7
3.4
2.8
2.7
2.6
2.5
2.7
2.6
2.6
2.6
2.6
2.6
2.6
2.6
2.6
2.6
2.6
2.6
2.6
2.6
2 5
2.5
2.5
2.5
2.5
2.5
2.5
2.5
2.5
2.5
.6
2.2
3.2
4.2
5.4
7.0
9.0
12.7
16.3
20.0
24.6
29.0
31.7
33.9
33.7
35.9
39.1
41.2
42.6
43.9
45.6
45.8
44.8
43.5
44.3
43.5
43.4
43.7
46.1
46.3
52.0
57.2
59.1
51.3
51.5
52.1
51.6
55.2
56.2
56.2
58.3
57.7
57.2
57.4
57.2
55.9
57.2
56.7
57.0
59.2
59.5
58.9
60.1
59.7
58.8
59.0
59.1
1
Total includes non-interest-bearing debt, Postal Savings bonds, prewar bonds, adjusted service bonds, depositary
bonds, Armed Forces leave bonds, Rural Electrification Administration series bonds, foreign series certificates and
notes, foreign currency certificates, notes and bonds, Treasury certificates, U.S. retirement plan bonds and U.S. savings
notes not shown separately. Not all of total shown is subject to statutory debt limitation.
2
Bills, certificates of indebtedness, and notes.
3
Includes sales of U.S. savings notes beginning May 1967.
* Series A bonds through September 1965 and, beginning April 1951, series B convertible bonds.
5
Issued to U.S. Government accounts. These accounts also held $17.3 billion of public marketable and nonmarketable issues on December 31, 1968.
Source: Treasury Department.
302
TABLE B-65.- -Estimated ownership of public debt securities, 1939—68
[Par values,* billions of dollars]
Total public debt securities 2
Held by private investors
End of year or
month
Total
Held
Held
by
by
Govern- Federal
ment Reserve
accounts banks
Total
Mutual
State
savings
Misceland
Combanks
Other
Indi- laneous
mercial and in- corpo- 4 local viduals6 inves3
banks surance rations governtors 7
ments 5
companies
0.4
9.4
0.9
8.4
1939
._..
2.0
41.9
2.5
33.8
12.7
5.6
.5
10.0
.8
1940_
45.0
36.2
2.0
6.7
2.2
13.7
9.2
.7
1941
13.0
57.9
47.1
4.0
1.3
85
17.1
11 0
23
3.5
1942 ._ .
1.0
108.2
91.5
15.4
23.3
10.5
38.2
6.2
10.1
6.0
2.1
37.2
165.9
16.4
1943
14.5
139.8
57.3
20.8
11.5
9.3
1944
21.4
4.3
53.1
192.8
76.7
28.0
230.6
19.0
18.8
1945. .
.
11.8
6.5
64.0
230.0
90.8
22.2
278.1
34.7
23.9
24.3
11.5
6.3
64.1
208.4
74.5
1946
259.1
15.3
27.4
36.7
23.3
7.3
11.9
1947
65.7
203.6
68.7
35.9
14.1
256.9
30.8
22.6
12.5
7.9
65.5
1948.
195.8
62.4
32.7
14.8
252.8
33.7
23.3
12.9
66.3
202.4
66.8
31.5
8.1
1949
35.9
16.8
257.1
18.9
13.7
1950
_. 256.7
8.8
61.8
66.3
199.9
29.6
19.7
36.0
20.8
1951
259.4
61.5
9.6
64.6
13.6
39 3
196.3
26.3
20 7
23 8
14.7
63.4
1952.
.
267.4
25.5
11.1
65.2
199.8
19.9
42.9
24.7
12.7
16.0
25.1
1953
45.4
63.7
21.5
64.8
275.2
203.8
25.9
1954
278.7
69.2
24.0
14.4
63.5
16.9
207.1
46.7
24 9
19 1
15.4
1955
18.3
207.0
62.0
23.2
65.0
23.1
280.8
49.0
24.8
16.3
59.5
18.9
1956
200.5
21.2
18.7
65.9
276.6
51.2
24.9
1957
274.9
59.5
20.1
17.7
16.6
64.9
19.0
24 2
197.8
52.8
16.5
67.5
18.9
1958
. .
204.5
19.8
63.7
52.1
282.9
26.3
18.1
18.0
19.4
24.2
1959
69.4
60.3
21.4
212.7
290.8
51.4
26.6
26.3
I960..
62.1
66.1
290.2
210.0
18.1
18.7
27.4
52.8
18.7
17.4
1961
67.2
65.9
26.8
296 2
52 5
214.8
18 5
28 9
19 0
30.2
67.1
17.4
1962
66.0
219.4
303.5
18.6
53.2
30.8
20.1
31.5
16.8
220.5
64.2
68.2
1963
309.3
55.3
18.7
33.6
21.1
33.0
222.5
16.5
1964
69.8
58.4
63.9
317.9
18.2
37.0
21.1
33.2
60.7
72.1
220.4
15.7
1965
15.8
320.9
59.7
40.8
22.9
33.2
219.1
57.4
74.6
14.1
1966- .
329.3
44.3
14.9
65.9
24.9
222.4
34.7
63.8
74.0
1967
344.7
49.1
12.6
12.2
73.1
25.1
358.0
76.5
65.4
11.5
75.1
35.1
1968 $
52.9
228.6
14.6
26.9
34.7
43.5
14.7
74.9
1967: Jan
328.9
64.8
220.6
13.9
57.7
24.7
Feb
329.6
44.0
219.7
57.3
13.7
14.7
74.6
34.5
66.0
24 9
34.7
58.0
13.5
74.0
330.9
44.9
219.3
14.1
Mar... .
66.8
25.0
57.2
72.7
34.7
Apr
327.8
45 5
215.7
13.1
12 9
66.6
25 1
34.6
56.4
71.9
May
214.5
330.9
13.0
70.3
13.6
46.1
25 0
32.6
70.9
55.5
326.2
46.7
207.7
12.7
June . .
71.9
11.1
24.9
33.7
70.8
212.0
58.3
12.7
July...
71.8
46.8
11.9
330.6
24.6
71.4
215.5
60.2
12.4
33.7
Aug.
12.8
335.8
73.8
46.6
25.0
46.9
215.7
12.8
72.5
33.8
Sept
335.9
73.3
61.1
10.7
24 8
34.7
73.2
Oct
340.5
47.4
220.2
63.5
12.7
72.9
11.6
24 5
73.2
48.9
222.9
63.4
12.7
13.0
24.4
73.9
35.5
345.1
Nov
Dec
344.7
73.1
49.1
222.4
63.8
12.6
12.2
25.1
74.0
34.7
36.5
1968: Jan
49 1 225.3
62.8
12.5
25 6
71.9
13.4
74.5
346.3
36.6
229.2
63.7
75.2
73.4
12.5
Feb.. .
49.0
14.8
26.4
351.6
62.0
75.2
72.9
226.8
35.8
Mar
349 5
49 7
12.6
14 1
27 1
35.6
75.2
50.5
223.3
59.8
Apr .
347.0
73.2
12.2
13.6
26.9
75.4
60.8
12.4
34.9
May
75.8
352.3
50 6 225.9
15 6
26 8
33.6
74.2
76.2
219.2
59.8
12.0
52.2
13.0
June
347.6
26.6
34.2
61.2
74.7
July..
52.4
223.0
26.7
351.1
75.6
14.3
11.9
354.4
224.4
62.1
14.5
74.9
34.1
Aug
76.9
53 0
11.9
26.9
34.7
63.5
75.2
76.6
224.9
26.7
Sept
354.7
53.3
11.9
12.9
65.3
75.0
357.2
76.2
227.7
11.7
14.0
26.8
34.9
Oct
53.3
34.9
75.0
53.4
26.7
356.9
76.6
226.9
63.9
Nov
14.8
11.6
35.1
75.1
Decs...
358.0
65.4
76.5
52.9
228.6
11.5
14.6
26.9
1 United States savings bonds, series A-F and J, and U.S. savings notes are included at current redemption value.
2
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 Territories and island
possessions; figures exclude securities held in trust departments. Since the estimates in this table are on the basis of par
values and include holdings of banks in United States Territories and possessions, they do not agree with the estimates
in 4
Table B-51, which are bas id on book values and relate only to banks within the United States.
Exclusive of banks and insurance companies.
8
Includes trust, sinking, and investment funds of State and local governments and their agencies, and of Territories
and possessions.
6
Includes partnerships and personal trust accounts.
7
Includes savings and loan associations, nonprofit institutions, corporate pension trust funds, dealers and brokers
Federal oriented agencies not included in Government accounts, and investments of foreign balances and international
accounts in this country. Beginning with December 1946, the international accounts include investments by the International
Bank for Reconstruction and Development, the International Monetary Fund, the International Development Association,
the Inter-American Development Bank, and various United Nations' funds, in special non-interest-bearing notes and
bonds issued by the U.S. Government.
s Preliminary estimates by Council of Economic Advisers.
Source: Treasury Department (except as noted).
3°3
TABLE B-66.—Average length and maturity distribution of marketable interest-bearing
public debt, 1946-68
Maturity class
End of year or month
Amount
outstanding
Within
1 year
5 to 10
years
1 to 5
years
10 to 20
years
Average length
20 years
and over
Millions of dollars
Fiscal year:
1946
1947
1948
1949
Years
Months
189,606
168,702
160,346
155,147
61,974
51,211
48,742
48,130
24,763
21,851
21,630
32,562
41,807
35,562
32,264
16,746
17,461
18, 597
16,229
22,821
43, 599
41,481
41,481
34,888
1
5
2
9
1950
1951
1952
1953
1954
155,310
137,917
140,407
147,335
150,354
42,338
43,908
46,367
65,270
62,734
51,292
46,526
47,814
36,161
29,866
7,792
8,707
13,933
15,651
27,515
28,035
29,979
25,700
28,662
28,634
25,853
8,797
6,594
1,592
1,606
2
7
8
4
6
1955
1956
1957
1958
1959
155,206
154,953
155,705
166,675
178,027
49,703
58,714
71,952
67,782
72,958
39,107
34,401
40,669
42, 557
58,304
34,253
28,908
12,328
21,476
17,052
28,613
28, 578
26,407
27,652
21,625
3,530
4,351
4,349
7,208
10
4
9
3
7
1960
1961
1962
1963
1964
183,845
187,148
196,072
203, 508
206,489
70,467
81,120
88,442
85,294
81,424
72,844
58,400
57,041
58,026
65,453
20,246
26,435
26,049
37,385
34,929
12,630
10,233
9,319
8,360
8,355
7,658
10,960
15,221
14,444
16,328
4
6
11
1
0
1965
1966
1967
1968
208,695
209,127
210,672
226,592
87,637
89,136
89,648
106,407
56,198
60,933
71,424
64,470
39,169
33,596
24,378
30,754
8,449
8,439
8,425
8,407
17,241
17,023
16,797
16,553
4
11
7
2
1967: Jan
Feb
Mar
Apr
May....
June
218,796
219,245
219,914
217,127
216,650
210,672
106,021
101,549
102,242
99,670
95, 524
89,648
59,434
66,717
66,722
66, 541
70,238
71,424
28,002
25,655
25,650
25,645
25,641
24,378
8,432
8,431
8,430
8,428
8,426
8,425
16,908
16,893
16,870
16,843
16,819
16,797
6
6
5
5
6
7
July
Aug
Sept
Oct.....
Nov
Dec
214,968
218,253
218,637
223,271
226,081
226,476
93,957
95, 040
95,442
100,208
102,158
104,363
71,433
76,244
78,198
78, 088
77,320
78,159
24,376
21,793
19,840
19,837
21,487
18,859
8,423
8,422
8,421
8,419
8,418
8,417
16,780
16,758
16,737
16,719
16,697
16,679
5
5
4
1968: Jan
Feb
Mar....
Apr
May.....
June
229,285
233,273
231,651
228,718
231,761
226,592
107,199
116,253
114,646
111,783
109,012
106,407
78.157
67,967
67,969
67,922
67,017
64,470
18,859
24,005
24,006
24,006
30,752
30,754
8,416
8,414
8,413
8,411
8,409
8,407
16,654
16,635
16,617
16,596
16,571
16,553
0
0
1
2
230,977
233,167
233,556
236,651
235,653
236,812
110,824
106,121
106,534
116,040
104,938
108,611
64,469
64,996
64,997
58,606
70,751
68,260
30,754
37,143
37,143
37,142
35,130
35,130
8,406
8,402
8,401
8,400
8,398
8,396
16,525
16,504
16,482
16,464
16,436
16,415
0
2
1
0
1
0
July
Aug
Sept
Oct
Nov
Dec
2
1
0
Note.—All issues classified to final maturity except partially tax-exempt bonds, which were classified to earliest call
date (the last of these bonds were called on August 14,1962, for redemption on December 15, 1962).
Source: Treasury Department.
304
T A B L E B—67.—Receipts and expenditures of the government sector of the national income and product
accounts, 1929-68
[Billions of dollars]
Total government
Surplus or
deficit
Calendar year or quarter
Receipts
Expenditures
State and local
government
Federal Government *
Surplus or
deficit
national
income
and
product accounts
Receipts
Expenditures
national
income
and
product accounts
Surplus or
deficit
Receipts
Expenditures
national
income
and
product accounts
1929
11.3
10.3
1.0
3.8
2.6
1.2
7.6
7.8
-0.2
1930
1931
1932
1933
1934
1935
1936
1937
1938
1939
10.8
9.5
8.9
9.3
10.5
11.4
12.9
15.4
15.0
15.4
11.1
12 4
10.6
10 7
12 9
13.4
16 1
15.0
16.8
17.6
-.3
-2.9
-1.8
-1 4
-2.4
-2.0
-3.1
.3
-1.8
-2.2
3.0
2.0
1.7
2.7
2.8
4.2
3.2
4.0
7.8
7.7
7.3
7 2
8.4
8 5
7.6
7 2
-.6
- 8
8.6
8.1
.5
4.0
5.0
7.0
6.5
6.7
6.5
8.7
7.4
8.6
8.9
.3
-2.1
-1.5
-1 3
-2.9
-2.6
-3 6
-.4
-2.1
-2.2
9.1
8 6
9.1
9.3
9.6
8.6
8 1
8.4
9.0
9.6
.6
5
.7
.4
17.7
25.0
32.6
49.2
51.2
53.2
50.9
56.8
58.9
56.0
18 4
28.8
64.0
93 3
103.0
92 7
45.5
42.4
50 3
59.1
-.7
-3.8
-31.4
-44.1
-51.8
-39.5
5.4
14.4
8.5
-3.2
8.6
15.4
22.9
39.3
41.0
42.5
39.1
43.2
43.3
38.9
10.0
20.5
56.1
85.8
95.5
84.6
35.6
29.8
34.9
41.3
-^•1 3
-5.1
-33.1
-46 6
-54.5
-42 1
3.5
13.4
8 4
-2.4
10 0
10.4
10.6
10 9
11.1
11 6
12.9
15.3
17 6
19.3
9.3
9.1
8.8
8.4
8.5
9 0
11.0
14.3
17 4
20.0
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
68.7
84.8
89 8
94.3
89.7
100 4
109.0
115 6
114.7
128.9
60.8
79.0
93 7
101 2
96.7
97 6
104.1
114 9
127.2
131.0
7.8
5.8
-3.8
-6.9
-7.0
2.7
4.9
.7
-12.5
-2.1
49.9
64.0
67.2
70.0
63.8
72.1
77.6
81.6
78.7
89.7
40.8
57.8
71.0
77.0
69.7
68.1
71.9
79.6
88.9
91.0
9.1
6.2
-3 8
-7.0
-5.9
4.0
5.7
2 1
-10.2
-1.2
21.1
23.3
25 2
27.2
28.8
31.4
34.7
38 2
41.6
46.0
22.3
23.7
25 3
27.0
29.9
32.7
35.6
39.5
44.0
46.8
1960
1961
1962
1963
1964
1965
1966
1967
1968*
139.8
144.6
157.0
168 8
174.1
189 1
213.2
227.4
260.9
136.1
149.0
159.9
166 9
175.4
186 9
211.5
241.3
267.3
3.7
-4.3
-2.9
1.8
-1.4
2.2
96.5
98.3
106.4
114.5
115.0
124.7
143.0
151.2
176.9
93.0
102.1
110.3
113.9
118.1
123.5
142.4
163.6
182.2
3.5
-3 8
-3.8
49.9
53.6
58.6
63.4
69.5
75 5
84.6
91.9
102.4
49.6
54.1
57.6
62.2
67.8
74 5
83.5
93.3
103.5
-1.4
-1.1
204.3
211.5
216.5
220.5
201.3
206 2
215.3
223.1
222.2
223.6
229.0
234.8
235 2
239.5
243.0
247 4
246.6
254.2
267.2
256.9
265 5
271 3
275.4
.
1940
1941
1942
1943
1944
1945
1946
1947
1948
1949
.
.
.
3.5
1.7
-13.8
-6.4
6.4
-3.0
1 2
7
-12.4
-5.3
-.3
0)
6
1.3
1.8
2.5
2.7
2 6
1.9
1.0
-.7
-1.2
-.4
(3)
.1
-1.3
-.9
-1.4
-2.3
-.8
.2
-.5
.9
1.2
1.7
1 0
1.1
Seasonally adjusted annual rates
1966: 1
III
IV
1967- 1
II
Ill
. . . .
. . .
I
V
1968: 1 . . .
II
III
3.0
5.3
1.2
-2.6-
136.8
142.1
145.5
147.7
134.8
138.4
145.8
150.5
2.0
3 7
-.3
-2.8
80.8
83.6
86.0
87.9
79.8
82.0
84.4
87.7
1.0
1.6
1.5
.2
-12.9
-15.9
-14.0
-12.5
148.1
148.2
152.2
156.4
159.3
161.5
165.1
168.6
-11.2
-13.3
-12.9
-12.2
89.3
90.0
92.7
95.5
91.0
92.6
93.8
95.8
-1.7
-2.6
-1.1
- 4
-10.3
-11.3
-4.1
166.6
171.8
182.1
175.1
181.9
184.9
186.8
-8.6
-10.2
-2.8
97.8
100.8
103.6
99.5
101.9
104.9
107.8
-1.7
-1 1
-1.3
1 See Note, Table B-S3.
2 Surplus of $32 million.
3 Deficit of $41 million.
Note.—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 adjusted to eliminate this duplication.
Source: Department of Commerce, Office of Business Economics.
305
T A B L E B-68.—Receipts and expenditures of the State and local government sector of the national
income and product accounts, 1946-68
[Billions of dollars; calendar years]
Receipts
Year or
quarter
Total
Indirect
PerbusiCorsonal
porate
ness
tax
profits
tax
and
tax
and
nontax
accruals nontax
receipts
accruals
Expenditures
Contributions Fedfor
eral
social grantsinsur- in-aid
ance
Total
Surplus
or
deficit
Less:
PurTransCurrent <-),
chases fer
surplus national
of
payNet
income
goods ments interest of ern-gov- and
and
to
paid
ment prodservperenter- uct acices
sons
prises counts
1946
1947
1948
1949
12.9
15.3
17.6
19.3
1.5
1.8
2.1
2.4
0.5
.6
.7
.6
9.3
10.6
12.1
13.3
0.5
.6
.7
.8
1.1
1.7
2.0
2.2
17.4
20.0
9.8
12.6
15.0
17.7
1.7
2.3
2.9
2.9
0.3
.3
.3
.3
0.7
.8
.8
.9
1.9
1.0
.1
-.7
1950
1951
1952
1953
1954
21.1
23.3
25.2
27.2
28.8
2.6
2.9
3.1
3.4
3.7
.8
.9
.8
.8
.8
14.5
15.8
17.3
18.7
19.7
1.0
1.2
1.3
1.5
1.7
2.3
2.5
2.6
2.8
2.9
22.3
23.7
25.3
27.0
29.9
19.5
21.5
22.9
24.6
27.4
3.5
3.0
3.2
3.3
3.4
.3
.3
.3
.3
.4
.9
1.1
1.1
1.2
1.4
-1.2
-.4
-1.1
1955
1956
1957
1958
1959
31.4
34.7
38.2
41.6
46.0
4.1
4.7
5.2
5.6
6.3
1.0
1.0
1.0
1.0
1.2
21.4
23.6
25.5
27.0
28.9
1.8
2.0
2.3
2.5
2.7
3.1
3.3
4.2
5.6
6.8
32.7
35.6
39.5
44.0
46.8
30.1
33.0
36.6
40.6
43.3
3.7
3.8
4.2
4.6
4.8
.5
.5
.5
.6
.7
1.6
1.7
1.8
1.8
2.0
-1.3
-.9
-1.4
-2.3
-.8
1960
1961
1962
1963
1964
49.9
53.6
58.6
63.4
69.5
7.3
7.7
8.7
9.4
10.8
1.3
1.4
1.4
1.7
1.9
31.7
34.1
36.9
39.4
42.3
3.0
3.2
3.5
3.8
4.1
6.5
7.2
8.0
9.1
10.4
49.6
54.1
57.6
62.2
67.8
46.1
50.2
53.7
58.2
63.5
5.1
5.5
5.7
6.0
6.5
.7
.8
.8
.8
.7
2.2
2.3
2.6
2.8
2.9
1965
1966
1967
1968
75.5
84.6
91.9
102.4
11.8
13.6
15.2
17.5
2.1
2.2
2.6
2.9
45.9
49.5
53.4
58.2
4.5
4.8
5.1
5.3
11.1
14.4
15.7
18.4
74.5
83.5
93.3
103.5
70.1
78.8
87.8
97.1
6.9
7.5
8.5
9.6
.5
.3
.2
.3
3.0
3.1
3.3
3.4
11.0
14.3
.2
-.5
Seasonally adjusted annual rates
1966: I-.-II...
III..
IV—
80.8
83.6
86.0
87.9
12.8
13.4
13.9
14.2
2.2
2.2
2.3
2.2
47.8
49.0
50.0
51.4
4.7
4.8
4.9
5.0
13.3
14.2
14.9
15.1
79.8
82.0
84.4
87.7
75.3
77.4
79.7
82.7
7.3
7.4
7.6
7.9
0.4
.3
.3
.3
3.1
3.1
3.2
3.2
1.0
1.6
1.5
.2
1967:
89.3
90.0
92.7
95.5
14.6
15.0
15.4
15.8
2.5
2.5
2.5
2.7
52.1
52.8
53.8
54.7
5.0
5.1
5.1
5.1
15.1
14.6
15.9
17.0
91.0
92.6
93.8
95.8
85.8
87.2
88.4
90.0
8.2
8.4
8.6
9.0
.3
.2
.2
.2
3.2
3.3
3.3
3.3
-1.7
-2.6
-1.1
1968: I.... 97.8
II — 100.8
III.. 103.6
IV p.
16.3
17.0
17.9
18.9
2.8
2.9
2.9
55.8
57.3
58.9
60.9
5.2
5.3
5.4
5.5
17.7
18.3
18.5
19.2
99.5
101.9
104.9
107.8
93.4
95.6
98.4
100.8
9.2
9.4
9.6
10.1
.2
.3
.3
.4
3.4
3.4
3.4
3.5
-1.7
-1.1
-1.3
l.._II...
III —
IV...
i Deficit of $41 million.
Source: Department of Commerce, Office of Business Economics.
306
TABLE B-69.—State and local government revenues and expenditures, selectedfiscalyears 1927-67
[Millions of dollars]
General revenues by source
Fiscal year 1
Total
Property
taxes
Sales
and
gross
receipts
taxes
Individual
income
taxes
2
General expenditures by function
ReveCorponue
ration
from
net
Federal
income
Governtaxes
ment
All
other
revenue 3
Total
Education
Highways
Public
welfare
2
AM
other<
1927
7,271
4,730
470
70
92
116
1,793
7,210
2,235
1,809
151
3,015
1932
1934
1936
1938
7,267
7,678
8,395
9,228
4,487
4,076
4,093
4,440
752
1,008
1,484
1,794
74
80
153
218
79
49
113
165
232
1,016
948
800
1,643
1,449
1,604
1,811
7,765
7,181
7,644
8,757
2,311
1,831
2,177
2,491
1,741
1,509
1,425
1,650
444
889
827
1,069
3,269
2,952
3,215
3,547
1940
1942
1944
1946
1948
9,609
10,418
10,908
12,356
17,250
4,430
4,537
4,604
4,986
6,126
1,982
2,351
2,289
2,986
4,442
224
276
342
422
543
156
272
451
447
592
945
858
954
855
1,861
1,872 9,229
2,123 9,190
2,269 8,863
2,661 11,028
3,685 17,684
2,638
2,586
2,793
3,356
5,379
1,573
1,490
1,200
1,672
3,036
1,156
1,225
1,133
1,409
2,099
3,862
3,889
3,737
4,591
7,170
1950
1952
1953
1954
20,911
25,181
27,307
29, 012
7,349
8,652
9,375
9,967
5,154
6,357
6,927
7,276
788
998
1,065
1,127
593
846
817
778
2,486
2,566
2,870
2,966
4,541
5,763
6,252
6,897
22,787 7,177
26,098 8,318
27,910 9,390
30,701 10,557
3,803
4,650
4,987
5,527
2,940 8,867
2,788 10,342
2,914 10,619
3,060 11,557
1955....
1956
1957
1958
1959
31,073
34,667
38,164
41,219
45,306
10,735 7,643
11,749 8,691
12,864 9,467
14,047 9,829
14,983 10,437
1,237
1,538
1,754
1,759
1,994
744
890
984
1,018
1,001
7,584
3,131
3,335 8,465
3,843 9,250
4,865 9,699
6,377 10,516
33,724
36,711
40,375
44,851
48,887
11,907
13,220
14,134
15,919
17,283
6,452
6,953
7,816
8,567
9,592
3,168
3,139
3,485
3,818
4,136
12,197
13,399
14,940
16,547
17,876
1960
1961
1962
1963
50,505
54,037
58,252
62,890
16,405
18,002
19,054
20,089
11,849
12,463
13,494
14,456
2,463
2,613
3,037
3,269
1,180
1,266
1,308
1,505
6,974
7,131
7,871
8,722
11,634
12,563
13,489
14,850
51,876
56,201
60,206
64,816
18,719 9,428
20,574 9,844
22,216 10,357
23,776 11,136
4,404
4,720
5,084
5,481
19,325
21,063
22,549
24,423
1962-63 5
1963-64 5
1964-65 5
1965-66 5
1966-67»
62,269
68,443
74,000
83,036
91,626
19,833
21,241
22,583
24,670
26,280
14,446
15,762
17,118
19,085
20,554
3,267
3,791
4,090
4,760
5,835
1,505
1,695
1,929
2,038
2,227
8,663
10,002
11,029
13,214
15,505
14,556
15,951
17,250
19,269
21,227
63,977
69,302
74, 546
82,843
93,770
23,729
26,286
28,563
33,287
38,233
11,150
11,664
12,221
12,770
13,956
5,420
5,766
6,315
6,757
8,249
23,678
25,586
27,447
30,029
33,332
1 Fiscal years not the same for all governments. See footnote 5.
2 Excludes revenues or expenditures of publicly owned utilities and liquor stores, and of insurance-trust activities.
Intergovernmental receipts and payments between State and local governments are also excluded.
3 Includes licenses and other taxes and charges and miscellaneous revenues.
* Includes expenditures for health, hospitals, police, local fire protection, natural resources, sanitation, housing and
urban renewal, local parks and recreation, general control, financial administration, interest on general debt, and other
unallocable expenditures.
5
Data for fiscal year ending in the 12-month period through June 30. Data for 1963 and earlier years include local government amounts grouped in terms of fiscal years ended during the particular calendar year.
Note.—Data are not available for intervening years.
See Table B-59 for net debt of State and local governments.
Source: Department of Commerce, Bureau of the Census.
3°7
CORPORATE PROFITS AND FINANCE
TABLE B-70.—Profits before and after taxes, all private corporations, 1929-68
[Billions of dollars]
Corporate profits (before taxes) and
inventory valuation adjustment
Manufacturing
Year or
quarter
All
dustries
Total
2.6
5.2
1.5
3.9
1.3
-.5 -1 0
4
3
.9
2.1
1.7
3.2
1.7
3.8
.8
2.3
1.7
3.3
1940...
1941...
1942...
1943...
1944...
1945...
1946-..
1947...
1948...
1949...
10.5
7.0
2.0
-1.3
-1.2
1.7
3.4
5.6
6.8
4.9
6.3
9.8
15.2
20.3
24.4
23.8
19.2
19.3
25.6
33.0
30.8
5.5
9.5
11.8
13.8
13.2
9.7
9.0
13.6
17.6
16.2
1950...
1951...
1952...
1953.1954...
1955...
1956-..
1957-..
1958...
1959...
1960...
1961..1962-1963...
1964-..
1965...
1966...
1967...
1968 »_.
37.7
42.7
39.9
39.6
38.0
46.9
46.1
45.6
41.1
51.7
49.9
50.3
55.7
58.9
66.3
76.1
83.9
80.4
89.2
1966: I...
II..
III..
IV..
1967:
1929...
1930___
1931...
1932...
1933.1934...
1935...
1936.._
1937.1938...
1939...
Transportation,
NonDurcomdurable
muniable
goods
goods cation,
inand
induspublic
tries dus- utilities
tries
2.6
2.4
1.3
.5
1.8
1.2
.5
.2
*.
.4
.4
All
other
industries
Corporate profits
after taxes
Corporate
profits
before
taxes
Corporate
tax
liability i
DiviTotal dend
payments
3.4 10.0
1.9
3.7
.2 - . 4
- . 9 -2.3
1.0
-.8
2.3
.3
3.6
.9
6.3
1.7
6.8
2.2
4.0
2.1
7.0
2.0
3.0 10.0
3.7 17.7
5.1 21.5
6.2 25.1
6.7 24.1
6.7 19.7
8.5 24.6
9.9 31.5
12.5 35.2
11.6 28.9
8.6
1.4
2.9
.8
.5 - . 9
.4 - 2 . 7
.5
.4
.7
1.6
1.0
2.6
1.4
4.9
1.5
5.3
1.0
2.9
1.4
5.6
7.2
2.8
7.6 10.1
11.4 10.1
14.1 11.1
12.9 11.2
10.7
9.0
9.1 15.5
11.3 20.2
12.5 22.7
10.4 18.5
12.7
13.5
13.3
12.6
13.4
15.2
15.6
15.8
15.9
18.4
17.9
19.1
20.5
20.6
23.5
25.6
29.0
29.4
32.1
17.8
22.3
19.4
20.3
17.7
21.6
21.7
21.2
19.0
23.7
23.0
23.1
24.2
26.3
28.3
31.3
34.6
33.5
41.3
Undistributed
profits
Corporate
capital
consumption
allow-2
ances
4.2
4.3
4.3
4.0
3.8
3.6
3.6
3.6
3.6
3.7
3.7
4.0
4.4
4.3
4.4
4.6
4.6
5.6
6.3
7.0
7.2
2.8
-2.6
-4.9
-5.2
-1.6
-1.0
-.2
.4
.6
-.2
1.8
3.2
5.7
5.9
6.6
6.5
4.4
9.9
13.9
15.6
11.3
8.8
8.6
8.6
8.9
9.3
10.5
11.3
11.7
11.6
12.6
13.4
13.8
15.2
16.5
17.8
19.8
21.7
22.9
24.6
16.0
13.0
11.0
11.5
11.3
16.5
15.9
14.2
10.8
15.9
13.2
13.5
16.0
16.6
20.6
26.7
29.3
25.2
26.4
Profits
plus
capital
consumption
allowances 3
8.8
10.3
11.5
13.2
15.0
17.4
18.9
20.8
22.0
23.5
24.9
26.2
30.1
31.8
33.9
36.4
39.7
43.4
47.1
5.8
5.5
4.1
2.5
2.0
2.6
2.8
4.5
4.7
3.2
3.8
3.1
6.4
7.2
8.1
7.4
4.5
2.4
5.8
7.5
8.1
1.1
1.5
2.1
1.6
1.7
2.4
3.1
4.6
5.7
5.9
5.2
6.6
7.8
10.0
8.1
1.3
2.0
3.4
4.4
3.9
2.7
1.8
2.2
3.0
3.0
20.9
24.6
21.6
22.0
19.9
26.0
24.7
24.0
19.3
26.3
24.4
23.3
26.6
28.8
32.7
39.3
42.8
39.2
44.3
12.0
13.2
11.7
11.9
10.5
14.3
12.8
13.3
9.3
13.6
12.0
11.4
14.1
15.8
17.8
22.8
24.1
21.2
24.4
8.9
11.4
9.9
10.1
9.4
11.8
11.9
10.7
10.0
12.7
12.4
11.9
12.5
13.0
14.9
16.6
18.8
18.0
19.9
4.0
4.6
4.9
5.0
4.7
5.6
5.9
5.8
5.9
7.0
7.5
7.9
8.5
9.5
10.1
11.1
12.0
11.8
12.8
82.7
83.4
84.2
85.3
42.9
42.6
42.7
43.3
24.4
23.8
23.6
24.5
18.5
18.8
19.0
18.8
11.8
12.1
12.1
12.0
28.0
28.7
29.4
30.1
85.2
85.6
86.7
85.0
34.5
34.6
35.0
34.4
50.8
51.0
51.6
50.7
21.6
21.9
21.9
21.6
29.1
29.1
29.7
29.1
38.4
39.3
40.1
41.0
79.5
79.6
80.2
82.3
39.3
39.1
38.5
39.9
21.0
21.2
20.6
21.9
18.3
17.9
17.9
18.0
11.7
11.8
12.0
11.9
28.4
28.8
29.7
30.6
79.9
80.3
80.8
85.4
32.8
33.0
33.2
35.1
47.1
47.3
47.6
50.3
22.5
23.2
23.5
22.5
24.6
24.1
24.1
27.9
41.9
42.9
44.1
44.9
83.8
89.2
91.6
41.3
44.9
45.3
22.3
25.2
25.0
19.0
19.7
20.3
12.5
12.5
13.0
30.0
31.8
33.3
88.9
91.8
92.7
39.8
41.1
41.5
49.1
50.7
51.2
23.6
24.4
25.2
25.4
25.5
26.3
26.0
45.7
46.7
47.6
48.5
!8
.5
1.0
42.6
43.9
38.9
40.6
38.3
48.6
48.8
47.2
41.4
52.1
49.7
50.3
55.4
59.4
66.8
77.8
85.6
81.6
92.3
24.9
21.6
19.6
20.4
20.6
27.0
27.2
26.0
22.3
28.5
26.7
27.2
31.2
33.1
38.4
46.5
51.0
48.1
51.0
3.8
4.2
5.0
5.4
6.1
6.4
4.7
5.8
7.0
7.9
Seasonally adjusted annual rates
II..
III.
IV..
1968: I —
III
IV p..
1
Federal and State corporate income and excess profits taxes.
2 Includes depreciation and accidental damages.
3 Corporate profits after taxes plus corporate capital consumption allowances.
Note.—Beginning 1962 data reflect the new depreciation guidelines issued by the Treasury Department July 11,1962'
and the investment tax credit provided in the Revenue Act of 1962.
Source: Department of Commerce, Office of Business Economics.
3 o8
TABLE
B—71.—Sales, profits, and stockholders1 equity, all manufacturing corporations (except
newspapers), 1947—68
[Billions of dollars]
All manufacturing
corporations
Year or
quarter
Profits
Sales
(net)
Nondurable goods
industries
Durable goods industries
Profits
Profits
Before
taxes
After
taxes
Stockholders' Sales
equityi (net)
Before
taxes
After
taxes
StockSales
holders'
(net)
equity l
Before
taxes
After
taxes
Stockholders'
equity»
1947..
1948..
1949-
150.7
165.6
154.9
16.6
18.4
14.4
10.1
11.5
9.0
65.1
72.2
77.6
66.6
75.3
70.3
7.6
8.9
7.5
4.5
5.4
4.5
31.1
34.1
37.0
84.1
90.4
84.6
9.0
9.5
7.0
5.6
6.2
4.6
34.0
38.1
40.6
19501951..
1952..
1953..
1954..
181.9
245.0
250.2
265.9
248.5
23.2
27.4
22.9
24.4
20.9
12.9
11.9
10.7
11.3
11.2
83.3
98.3
103.7
108.2
113.1
86.8
116.8
122.0
137.9
122.8
12.9
15.4
12.9
14.0
11.4
6.7
6.1
5.5
5.8
5.6
39.9
47.2
49.8
52.4
54.9
95.1
128.1
128.0
128.0
125.7
10.3
12.1
10.0
10.4
9.6
6.1
5.7
5.2
5.5
5.6
43.5
51.1
53.9
55.7
58.2
1955..
1956..
1957..
1958..
1959..
278.4
307.3
320.0
305.3
338.0
28.6
29.8
28.2
22.7
29.7
15.1
16.2
15.4
12.7
16.3
120.1
131.6
141.1
147.4
157.1
142.1
159.5
166.0
148.6
169.4
16.5
16.5
15.8
11.4
15.8
8.1
8.3
7.9
5.8
8.1
58.8
65.2
70.5
72.8
77.9
136. 3
147.8
154.1
156.7
168.5
12.1
13.2
12.4
11.3
13.9
7.0
7.8
7.5
6.9
8.3
61.3
66.4
70.6
74.6
79.2
I960..
19611962..
1963..
1964..
345.7
356.4
389.9
412.7
443.1
27.5
27.5
31.9
34.9
39.6
15.2
15.3
17.7
19.5
23.2
165.4
172.6
181.4
189.7
199.8
173.9
175.2
195.5
209.0
226.3
14.0
13.6
16.7
18.5
21.2
7.0
6.9
8.6
9.5
11.6
82.3
84.9
89.1
93.3
98.5
171.8
181-.2
194.4
203.6
216.8
13.5
13.9
15.1
16.4
18.3
8.2
8.5
9.2
10.0
11.6
83.1
87.7
92.3
96.3
101.3
1965..
1966.
1967.
492.2
554.2
575.4
46.5
51.8
47.8
27.5
30.9
29.0
211.7 257.0
230.3 291.7
247.6 300.6
26.2
29.2
25.7
14.5
16.4
14.6
105.4 235.2
115.2 262.4
125.0 274.8
20.3
22.6
22.0
13.0
14.6
14.4
106.3
115.1
122.6
1966: I
II
III....
IV....
129.9
141.0
137.8
145.5
12.4
14.0
12.3
13.1
7.2
8.4
7.4
7.9
222.4
228.6
233.4
236.8
68.0
75.4
71.1
77.3
7.0
8.2
6.5
7.5
3.8
4.6
3.7
4.2
110.0
114.2
117.1
119.3
61.9
65.6
66.7
68.2
5.4
5.8
5.8
5.6
3.4
3.7
3.7
3.7
112.4
114.3
116.3
117.5
1967: I
II
III....
IV....
137.0
145.1
141.5
151.8
11.4
12.6
11.0
12.8
6.7
7.6
6.7
7.9
240.9
245.6
249.7
254.3
71.1
77.0
72.6
80.0
6.2
7.2
5.4
7.0
3.4
4.1
3.1
4.0
121.6
123.7
126.0
128.6
65.9
68.2
68.9
71.8
5.2
5.4
5.6
5.9
3.3
3.5
3.6
3.9
119.3
121.8
123.6
125.7
1968: I
II
III....
148.9
158.9
155.7
12.5
14.8
13.2
7.4
8.3
7.6
258.6
263.4
268.4
78.8
86.0
81.0
6.7
8.6
6.8
3.7
4.5
3.7
130.9
134.1
137.2
70.1
72.9
74.8
5.8
6.2
6.4
3.7
3.8
4.0
127.7
129.4
131.2
* Annual data are average equity for the year (using four end-of-quarter figures).
Note.—For explanatory notes concerning compilation of the series, see "Quarterly Financial Report for Manufacturing
Corporations," Federal Trade Commission and Securities and Exchange Commission.
Data are not necessarily comparable from one period to another due to changes in accounting procedures, industry
classifications, sampling procedures, etc. Specific information about the effects of the more significant changes and revisions is contained in the following issues of the "Quarterly Financial Report": third quarter 1953, third quarter 1956,
first quarter 1959, and first quarter 1965.
Sources: Federal Trade Commission and Securities and Exchange Commission.
309
T A B L E B—72.—Relation of profits after taxes to stockholders* equity and to sales, all manufacturing corporations {except newspapers), by industry group, 1947—68
Ail
manufacturmg
corMoporator
tions Total vehi(ex- dur- cles
cept able^ and
equipnewsment
papers)
Year or
quarter
Durable goods industries
Aircraft
and
parts
Electrical
machinery,
equipment,
and
supplies
p.:
PriMa
Stone,
Fab- mary
riclay,
iron for
ery cated and
and
(ex- metal steel motal glass
prodinelec- prod- dusucts
trical) ucts tries dusines
Fur
-nri
fjY
Lumber
and
wood
products
(except
furniture)
Instruments
and
related
products
Miscellaneous
manufacturmg
(including
ordnance)
Ratio of profits after Federal taxes (annual rate) to stockholders equity —percent2
1947. .
1948
1949
1950
1951 .
1952
1953
1954
1955 .
1956
1957
1958
1959 . .
1960
1961
1962
1963
1964
1965
1966
1967
.
.
.
1967: 1
II
III
IV
1968: 1.
II
111
15.6
16.0
11.6
15.4
12.1
10 3
10.5
9.9
12.6
12.3
10.9
8.6
10.4
9.2
8.9
9.8
10.3
11.6
13.0
13.4
11.7
11.2
12.4
10.8
12.5
11.5
12.6
11.4
14.4
15.7
12.1
16.9
13.0
11 1
11.1
10.3
13.8
12 8
11.3
8.0
10.4
8.5
8.1
9.6
10.1
11.7
13.8
14.2
11.7
11.2
13.2
9.8
12.5
11.3
13.4
10.7
16.4
19.9
22.1
25.3
14.3
13.9
13.9
14.1
21.7
13 1
14.2
8.2
14.5
13.5
11.4
16.3
16.7
16.9
19.5
15.9
11.7
12.5
16.4
3.8
14.0
16.5
17.9
7.4
17.7
13 2
8.1
7.3
9.8
12.7
11.3
12.2
15.2
14.4
12.9
11.7
12.5
12.4
14.7
13.6
14.4
14.3
19.0
16.1
13.6
20 9
14.0
13 7
13.1
12 4
12.3
11 4
12l5
10 2
12 5
9 5
8.9
10.0
10.1
11.2
13.5
14.8
12.8
12.2
12.8
11.9
14.1
11.8
11.4
11.5
15.7
16.3
11.6
14 1
13 0
11 3
9.8
86
10 3
12 6
10.7
69
9.7
75
7.8
9.1
9.6
12.5
14.1
15.0
12.9
12.3
15.2
12.2
12.0
11.1
13.6
12.3
17.6
17.0
10.4
16 0
13 4
10 1
9.8
76
10 0
10 7
9.3
73
80
56
5.9
7.9
8.3
10.1
13.2
14 7
12.7
12.7
14.2
11.7
12.1
10.0
12.5
12.1
12.0 12.4
14.7 14.2
10.0
8.1
14 3 15 1
12 3 13 8
8 5 11 6
10.7 11.1
8 1 10 4
13.5 15 5
12 7 16 4
11.4
9.3
72
60
8.0
7.9
72
7.1
7.1
6.1
5.4
7.5
7.0
7.6
8.8
9.8
9.8 11.9
10.2 14.8
7.7 10.9
7.9 13.7
7.9 12.8
6.0
7.8
9.1
9.5
8.6
10.5
4.5
8.9
11.5
9.9
14 0
15.0
13.1
17 7
14 2
11 7
11.8
12 5
15 6
14 9
12.4
10 2
12 7
9.9
8.9
8.9
8.7
9.6
10.3
9.9
8.2
3.3
9.4
10.4
9.5
18.0
15.9
8.1
15 2
11 3
86
8.2
60
92
11 6
8.5
6 3
8.9
6.5
4.9
7.9
8.3
10.1
13.4
14.2
12.1
10.6
12.0
12.4
13.3
3.9
9.1
11.7
12.0
12.8
12.5
22 9
19.2
9.1
17 5
11 9
85
7.1
6 3
11.1
87
4.7
5.7
9.4
3.6
4.1
5.6
8.2
9.9
10.1
10.0
8.6
5.5
8.6
10.5
9.6
10.9
16.1
16.3
6.0
5.5
3.3
5.1
3.4
2.7
2.6
2.1
2.9
3.4
2.6
2.0
2.7
2.1
1.6
2.3
2.4
2.9
3.7
3.9
3.5
3.2
3.5
3.6
3.8
2.8
3.6
3.5
11.4
9.9
5.9
9.4
5.5
4.1
3.5
3.4
5.4
3.9
2.3
2.8
4.2
1.7
1.9
2.5
3.3
3.9
4.0
3.8
3.4
2.4
3.4
4.0
3.7
4.4
5.7
5.8
14.4
14.0
12.1
16 7
13 2
11 6
11.4
12 3
12.5
12 4
12.0
10.6
13.1
11.6
10.6
12.0
12.1
14.4
17.5
20.9
18.0
15.7
16.9
18.7
20.3
14.1
15.5
18.0
14.0
12.2
7.2
12 3
97
70
8.2
7.5
8.5
11 6
7.7
8.2
9.3
9.2
9.9
9,4
8.8
9.5
10.7
15.4
13.1
12.8
12.5
13.2
13.9
12.6
9.6
12.2
7.7
7.8
7.1
8.6
6.1
4.8
4.6
5.5
6.0
5.8
5.7
5.4
6.5
5.9
5.4
5.9
6.0
7.2
8.6
9.5
8.5
8.0
7.9
8.8
9.1
7.4
7.6
8.7
6.3
5.6
3.6
56
3.7
2.7
2.9
2.8
3.1
3.6
?.5
3.0
3.5
3.5
3.6
3.4
3.3
3.6
3.8
4,9
4.2
4.2
4.1
4.2
4.1
4.2
3.1
4.0
Profits after taxes per dollar of sales—cents
1947
1948 ._ .
1949
1950 .
1951
1952 . .
1953
1954
1955... .
1956
1957
1958
1959
1960
1961 . 1962
1963
1964.
1965
1966
1967
1967: 1
II
III.—
IV
1968: 1
II
lll..__
67
7.0
5.8
7.1
4 8
4.3
4.3
4.5
5.4
5.3
4.8
4.2
4.8
4.4
4.3
4.5
4.7
5.2
5.6
5.6
5.0
4.9
5.2
4.7
5.2
5.0
5.2
4.9
67
7.1
6.4
7.7
53
4.5
4.2
46
5.7
5.2
4.8
3.9
4.8
4.0
3.9
4.4
4.5
5.1
5.7
5.6
4.8
4.8
5.3
4.3
5.0
4.7
5.2
4.5
6.0
6.9
7.9
8.3
4.7
4.7
3.9
5.1
6.9
5.2
5.4
4.0
6.3
5.9
5.5
6.9
6.9
7.0
7.2
6.2
4.9
5.3
6.3
1.9
5.4
6.1
6.2
3.4
2.9
2.4
1.6
1.4
1.8
2.4
2.3
2.6
3.3
3.0
2.7
2.6
2.5
2.6
2.9
2.9
3.2
3.4
6.3
5.9
5.7
7.2
50
4.5
4.1
4.5
4.4
3.8
4.2
3.8
4.4
3.5
3.5
3.7
3.8
4.2
4.8
4.8
4.4
4.2
4.4
4.2
4.8
4.2
4.1
4.1
7.2
7.3
6.4
7.3
5.5
4.8
4.2
4.4
5.1
5.4
4.8
3.7
4.8
3.9
4.1
4.5
4.7
5.8
6.2
6.4
5.7
5.7
6.3
5.5
5.3
5.1
5.7
5.6
7.4
7.1
5.1
6.8
5.0
4.0
3.6
3.1
3.8
4.0
3.6
3.1
3.2
2.4
2.5
3.1
3.2
3.7
4.5
4.9
4.5
4.6
4.9
4.2
4.2
3.6
4.4
4.2
See footnotes at end of table.
310
6.6
7.6
6.5
7.9
5.8
4.7
5.3
5.3
7.2
6.7
6.6
5.4
5.4
5.1
4.6
3.9
4 R
5.6
5.7
5.8
4.8
4.8
4.8
3.9
5.7
5.1
5.5
2.9
8.9
9.0
6.9
10.2
7.8
6.7
6.3
6.6
8.3
9.3
6.6
4.7
5.8
5.4
5.3
5.5
5.3
6.5
7.3
8.2
6.8
8.1
7.7
5.3
6.0
5.4
6.4
5.9
7.9
8.6
8.6
10.1
7.1
6.6
6.5
7.4
8.6
8.2
7.5
6.8
7.9
6.6
5.8
5.6
5.3
5.6
5.9
5.6
4.8
2.3
5.4
5.7
5.4
2.6
6.4
6.3
TABLE B—72.—Relation of profits after taxes to stockholders'' equity and to sales, all manufacturing corporations {except newspapers), by industry group, 1947—68—Continued
Nondurable goods industries
Year or
quarter
Total
nondurable i
Food
and
kindred
products
Tobacco
manufactures
Textile
mill
products
Apparel
and
related
products
Paper
and
allied
products
Printing
and
publishing
(except
newspapers)
Chemicals
and
allied
products
Petroleum
refining
Rubber
and
miscellaneous
plastic
products
Leather
and
leather
products
Ratio of profits after Federal taxes (annual rate) to stockholders ' equity—percent2
1947 .
1948
1949
1950
1951
1952
1953
1954
1955 . . .
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1967: I..
IL
III
IV.
1968: I..
IL
III
16.6
16.2
11.2
14.1
11.2
9.7
9.9
9.6
11.4
11.8
10.6
9.2
10.4
9.8
9.6
9.9
10.4
11.5
12.2
12.7
11.8
11.2
11.6
11.7
12.5
11.7
11.7
12.1
17.6
12.8
11.8
12.3
8.1
7.6
8.1
8.1
8.9
9.3
8.7
8.7
9.3
8.7
8.9
8.8
9.0
10.0
10.7
11.2
10.8
9.4
10.3
11.7
11.8
9.9
10.2
11.4
10.1
13.6
12.6
11.5
9.5
8.4
9.4
10.2
11.4
11.7
12.5
13.5
13.4
13.4
13.6
13.1
13.4
13.4
13.5
14.1
14.4
12.1
14.7
15.8
15.0
13.5
13.6
15.9
6.7
6.8
5.4
6.5
4.5
4.1
4.3
4.4
5.1
5.3
4.9
4.4
4.9
4.8
4.7
4.7
4.9
5.4
5.5
5.6
5.3
5.1
5.2
5.2
5.5
5.3
5.2
5.3
4.2
3.3
3.3
3.4
2.0
1.9
2.0
2.1
2.3
2.4
2.2
2.2
2.4
2.3
2.3
2.3
2.4
2.7
2.7
2.7
2.6
2.3
2.5
2.8
2.8
2.5
2.5
2.7
4.1
5.2
5.1
4.9
3.8
3.2
3.7
4.2
4.8
5.0
5.2
5.4
5.4
5.5
5.7
5.7
5.9
5.9
5.9
5.9
5.9
5.1
5.8
6.4
6.2
5.7
5.5
6.0
19.5
18.7
7.6
12.7
8.2
4.2
4.6
1.8
5.7
5.8
4.2
3.5
7.5
5.8
5.0
6.2
6.1
8.5
10.9
10.1
7.6
5.9
7.1
7.8
9.5
7.1
9.1
9.5
18.9
12.1
7.5
10.1
2.9
4.4
5.1
4.5
6.1
8.1
6.3
4.9
8.6
7.7
7.2
9.3
7.7
11.7
12.7
13.3
12.0
9.6
8.6
14.4
15.1
12.0
9.3
15.0
22.0
16.4
10.7
16.2
13.9
10.5
10.1
9.9
11.5
11.6
8.9
8.1
9.5
8.5
7.9
8.1
8.1
9.3
9.4
10.6
9.1
9.0
9.5
8.6
9.3
8.5
10.5
9.2
17.2
14.7
11.4
11.5
10.3
9.1
9.4
9.2
10.2
13.0
11.7
9.0
11.4
10.6
8.5
10.3
9.2
12.6
14.2
15.6
13.0
12.1
13.5
14.1
12.2
10.9
10.7
14.8
15.9
15.8
13.2
17.8
12.2
10.9
10.7
11.6
14.7
14.2
13.3
11.4
13.7
12.2
11.8
12.4
12.9
14.4
15.2
15.1
13.1
13.0
13.7
12.2
13.3
13.4
13.6
12.8
15.2
13.3
13.4
12.7
13.4
13.9
12.5
10.0
9.8
10.1
10.3
10.1
11.3
11.4
11.8
12.4
12.5
12.6
12.3
12.1
13.1
12.9
11.9
12.1
12.4
12.3
8.7
16.9
14.8
11.1
11.3
10.6
13.2
12.2
11.1
9.1
11.0
9.1
9.3
9.6
9.2
10.6
11.7
12.2
10.3
9.3
9.0
9.2
13.7
10.8
13.5
11.8
14.0
10.4
6.2
10.9
2.1
5.8
6.0
5.9
8.5
7.2
7.0
5.7
8.5
6.3
4.4
6.9
6.9
10.5
11.6
12.9
11.9
12.8
7.9
12.1
14.6
13.3
12.0
12.4
11.1
10.1
10.4
10.6
11.1
11.6
10.6
9.5
9.5
9.9
10.3
9.7
10.8
10.9
11.1
11.2
11.0
11.2
10.9
10.7
11.2
11.2
10.6
10.7
4.4
4.7
3.8
5.8
4.5
3.6
3.8
4.0
4.4
4.4
4.2
3.5
4.0
3.6
3.8
3.7
3.6
4.1
4.3
4.4
3.9
3.7
3.4
3.6
5.1
4.2
4.8
4.5
4.3
3.3
2.2
3.7
.6
1.8
1.8
1.9
2.5
2.1
2.0
1.7
2.2
1.6
1.1
1.8
1.8
2.6
2.8
3.G
3.0
3.2
2.1
3.0
3.4
3.3
3.1
3.3
Profits after taxes per dollar of sales—cents
1947
1948
1949
1950
1951
1952
1953
1954
1955
1956
1957
1958........
1959
1960
1961
1962
1963
1964
1965
1966
1967
1967: I
IL...
Ill —
IV....
1968: I
ML-I
8.2
8.3
4.1
5.8
3.4
1.9
2.2
1.0
2.6
2.6
1.9
1.6
3.0
2.5
2.1
2.4
2.3
3.1
3.8
3.6
2.9
2.4
2.7
2.9
3.4
2.7
3.2
3.4
4.6
3.1
2.1
2.8
.6
1.0
1.2
1.1
1.3
1.6
1.3
1.0
1.5
1.4
1.3
1.6
1.4
2.1
2.3
2.4
2.3
1.8
1.7
2.8
2.9
2.5
1.9
2.7
10.7
8.5
6.5
8.8
6.6
5.7
5.4
5.6
6.1
6.1
5.0
4.7
5.2
5.0
4.7
4.6
4.5
5.1
4.9
5.4
4.7
4.8
4.9
4.5
4.7
4.4
5.1
4.5
6.1
5.2
4.5
4.5
3.7
3.3
3.4
3.4
3.6
4.2
3.7
3.1
4.0
3.6
2.8
3.4
3.2
4.3
4.8
5.1
4.4
4.3
4.6
4.9
3.9
3.8
3.6
4.8
8.8
8.8
8.2
10.3
6.5
6.1
6.1
6.8
8.3
8.0
7.6
7.0
7.9
7.5
7.3
7.4
7.5
7.9
7.9
7.8
6.9
6.9
7.0
6.5
7.0
7.0
6.9
6.6
1 Includes certain industries not shown separately.
2
Annual ratios based on average equity for the year (using four end-of-quarter figures). Quarterly ratios based on equity
at end of quarter only.
Note.—Ratios based on data in millions of dollars.
For explanatory notes concerning compilation of the series, see "Quarterly Financial Report for Manufacturing Corporations," Federal Trade Commission and Securities and Exchange Commission. See also Note, Table B-71.
Sources: Federal Trade Commission and Securities and Exchange Commission.
311
T A B L E B—73.—Sources and uses of funds, nonfarm nonfinancial corporate business, 1957—68
[Billions of dollars]
Source or use of funds
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
42.0
42.2
55.5
47.3
54.7
63.3
65.9
70.2
89.3
99.1
94.0
109.1
30.6
29.5
35.0
34.4
35.6
41.8
43.9
50.5
56.6
61.1
61.5
63.8
Undistributed profits 1 .. 11.8
Corporate inventory
valuation adjustment. -1.5
Capital consumption
allowances 1 ...
20.3
8.3
12.6
10.0
10.2
12.4
13.6
-.3
-.5
.2
-.1
.3
-.5
18.3 23.1 24.4 20.7
5 -1.7 -1.7 -1.2
-3.1
21.4
22.9
24.2
25.4
29.2
30.8
32.8
35.2
38.4
42.0
45.6
12.7
20.5
12.9
19.1
21.5
22.0
19.7
32.7
38.0
32.5
45.3
2.5
4.6
1.8
.1
.3
6.6
1.2
1.9
.6
4.6
2.9
2.5
.7
4.4
1.1
4.7
-.3
3.9
3.5
2.9
.5
6.0
1.5
4.0
1.4
4.0
3.3
3.6
1.3
3.4
.9
1.8
5.4
3.1
9.2
1.3
7.4
1.9
4.3
1.2
2.3
10.2 15.1
2.7
3.8
6.9
5.2
2.5
1.7
7.8
3.1
.2 -3.8
6.6
5.1
.2
13.4
2.9
5.5
4.3
11.1
2.1
5.8
88.2
Sources, total
1
Internal sources .
External sources
Stocks..
Bonds
Mortgages
Bank loans, n.e.c...
Other loans
Trade debt
Profits tax liability.
Other liabilities....
11.4
2.1
2.4
6.3
5.7
.4
1.2
1.1 -.6
.7
.2
.5
4.3
-2.1 -2.6
2.2
2.4
Uses, total.
40.0
42.1
Purchases of physical assets.
34.7
27.3
Nonresidential fixed
investment
Residential structures...
Change in business
inventories
33.4
.7
28.4
1.4
Increase in financial assets 2 ..
Liquid assets
Demand deposits and
currency
Time deposits
U.S. Government
securities
Open-market paper
Consumer credit
Trade credit
Other financial assets
Discrepancy (uses less
sources).
2.2
1.6
3.0
3.5
1.2
.7
3.0
1.3
.3
1.0
4.9
3.1
2.4 - 2 . 2
3.6
4.0
54.4
45.2
36.9
39.2
31.1
1.7
34.9
1.3
55.0
61.7
65.8
66.9
37.0
44.7
46.7
53.5
33.2
2.2
37.0
3.0
38.6
3.7
44.0
3.6
21.3
96.7
90.6
105.2
64.9
79.8
74.1
81.3
53.2
3.8
63.0
2.8
64.9
3.7
70.1
3.9
.6 -2.5
41
.
3.0
15
.
4.7
4.3
5.9
7.9
14.1
5.5
7.4
5.3
14.8
17.4
6.1
18.0
16.9
19.1
13.4
23.3
16.9
16.5
24.9
-.1
*
*
2.5
4.3
.6
.8
1.0
.9
7.4
-.4
.3
5 6 -3.9
.
3.5
41
.
1.5 -1.0
.9
* 66
.
.1
-.5
1.3
1.7
1.9
-.9
3.7
-5.4
.7
-.2
.1
.5
.9
.1
10.0
4.6
.9
8.2
4.1
.2
2.6
2.5
7^9
3.4
.8
7.2
3.3
.2
6.3
3.7
-1.9
-i
-1.1
-2.0
1
.3 -1.6
-.8 -2.5 -1.8
3.2
3.9
3.9
.7 -1.7
4.1
-.7
.3
2.0
.5 -1.4 -2.1 -1.2 -3.0
1.4
.7
1.4
.8
2.3
.8
3.6
8] 5
4.8
-i
1.0
9.1
2.5
1.0
8.7
5.3
1.6
13.8
2.2
-3.3 -1.1 -2.3 -3.4
-2.9
1.2
12.8
7.9
1.1
10.8
3.3
The figures shown here for "internal sources," "undistributed profits," and "capital consumption allowances"
differ from those shown for "cash flow, net of dividends," "undistributed profits" and "capital consumption allowances"
in the gross corporate product table in the national income and product accounts of the Department of Commerce for
the following reasons: (1) these figures include, and the statistics in the gross corporate product table exclude, branch
profits remitted from foreigners net of corresponding U.S. remittances to foreigners; and (2) these figures exclude, and
the gross corporate product figures include, the internal funds of corporations whose major activity is farming.
3
Includes some categories not shown separately.
Source: Board of Governors of the Federal Reserve System
312
TABLE B—74.—Current assets and liabilities of United States corporations^ 1939-68
[Billions of dollars]
Current assets
Current liabilities
Ad-
End of year
or quarter
vances
ReNet
Fedand
Cash U.S.
ceiv- Notes
Notes
Other workeral
Other
preon
and
and
ing
Gov- ables
curincurInpayfrom
acacernrent capiTotal hand
venand
U.S. counts tories rent Total ments, counts come
tal
ment
liaastax
U.S.
in securi- Gov- receivPaysets 2
liabili- biliable
Govbanks ties
ern- 1 able
ties
ties
ernment
1
ment
. 54.5
10.8
2.2
22.1
18.0
1.4
30.0
21.9
1.2
6.9
24.5
60.3
72.9
83.6
93.8
97.2
13.1
13.9
17.6
21.6
21.6
2.0
4.0
10.1
16.4
20.9
0.1
.6
4.0
5.0
4.7
23.9
27.4
23.3
21.9
21.8
19.8
25.6
27.3
27.6
26.8
1.5
1.4
1.3
1.3
1.4
32.8
40.7
47.3
51.6
51.7
0.6
.8
2.0
2.2
1.8
22.6
25.6
24.0
24.1
25.0
2.5
7.1
12.6
16.6
15.5
7.1
7.2
8.7
8.7
9.4
27.5
32.3
36.3
42.1
45.6
1945.-.
1946
97.4
108.1
21.7
22.8
21.1
15.3
2.7
.7
23.2
30.0
26.3
37.6
2.4
1.7
45.8
51.9
.9
24.8
31.5
10.4
8.5
9.7
11.8
51.6
56.2
1947
1948
1949
123.6
133.0
133.1
25.0
25.3
26.5
14.1
14.8
16.8
44.6
48.9
45.3
1.6
1.6
1.4
61.5
64.4
60.7
10.7
11.5
9.3
13.2
13.5
14.0
62.1
68.6
72.4
1950
1951
1952 .
1953
1954
161.5
179.1
186.2
190.6
194.6
28.1
30.0
30.8
31.1
33.4
19.7
20.7
19.9
21.5
19.2
1.1
2.7
2.8
2.6
2.4
55.7
58.8
64.6
65.9
71.2
55.1
64.9
65.8
67.2
65.3
1.7
2.1
2.4
2.4
3.1
79.8
92.6
96.1
98.9
99.7
.4
1.3
2.3
2.2
2.4
47.9
53.6
57.0
57.3
59.3
16.7
21.3
18.1
18.7
15.5
14.9
16.5
18.7
20.7
22.5
81.6
86.5
90.1
91.8
94.9
1955
1956
1957
1958
1959
224.0
237.9
244.7
255.3
277.3
34.6
34.8
34.9
37.4
36.3
23.5
19.1
18.6
18.8
22.8
2.3
2.6
2.8
2.8
2.9
86.6
95.1
99.4
106.9
117.7
72.8
80.4
82.2
81.9
88.4
4.2
5.9
6.7
7.5
9.1
121.0
130.5
133.1
136.6
153.1
2.3
2.4
1.7
73.8
81.5
84.3
88.7
99.3
19.3
17.6
15.4
12.9
15.0
25.7
29.0
31.1
33.3
37.0
103.0
107.4
111.6
118.7
124.2
1960
1961
289.0
306.8
37.2
41.1
20.1
20.0
3.1
3.4
126.1
135.8
91.8
95.2
10.6 160.4
11.4 171.2
1.8
1.8
105.0
112.8
13.5
14.1
40.1
42.5
128.6
135.6
New series 3
1961
1962
1963
1964
1965
304.6
326.5
351.7
372.2
410.2
40.7
43.7
46.5
47.3
49.9
19.2
19.6
20.2
18.6
17.0
3.4
3.7
3.6
3.4
3.9
133.3
144.2
156.8
169.9
190.2
95.2
100.7
107.0
113.5
126.9
12.9
14.7
17.8
19.6
22.3
155.8
170.9
188.2
202.2
229.6
1.8
2.0
2.5
110.0
119.1
130.4
140.3
160.4
14.2
15.2
16.5
17.0
19.1
29.8
34.5
38.7
42.2
46.9
148.8
155.6
163.5
170.0
180.7
1966
1967
443.4
464.0
50.1
52.3
15.7
12.4
4.5
5.1
205.1 144.5
23.6 253.2
25.9 262.9
4.4
5.8
176.2
183.6
19.1
15.2
53.6
58.3
190.2
201.1
Ill
IV
415.7
425.7
433.4
443.4
47.5
48.4
47.6
50.1
17.2
15.5
14.8
15.7
3.9
4.0
4.2
4.5
193.2
199.2
203.5
205.1
130.4
134.6
139.5
144.5
23.6
24.0
23.8
23.6
232.2
237.5
244.4
253.2
3.3
3.5
4.0
4.4
160.6
166.4
170.2
176.2
19.1
16.7
18.0
19.1
49.1
51.0
52.3
53.6
183.6
188.2
189.0
190.2
1967: 1
II
Ill
IV
443.9
444.9
452.7
464.0
47.3
47.7
49.1
52.3
14.4
11.5
10.8
12.4
4.4
4.6
4.7
5.1
205.1
207.5
211.5
214.5
148.1
149.2
151.2
153.8
24.8
24.3
25.4
25.9
251.4
251.1
255.4
262.9
4.9
5.7
5.8
173.5
177.0
178.6
183.6
18.6
12.7
13.5
15.2
54.3
55.9
57.6
58.3
192.6
193.8
197.2
201.1
1968: 1
II —
III
471.4
481.9
492.2
50.1
51.4
52.8
14.6
13.3
12.9
4.8
4.7
4.8
216.6 156.6
223.6 159.9
229.5 163.7
28.7 265.4
29.1 272.1
28.6 281.3
6.1
6.2
6.3
181.9
188.0
193.8
17.3
15.4
15.6
60.2
62.5
65.5
206.0
209.8
210.9
1939
. .
1940
1941
1942
1943
1944
1966:
1...
38.3
42 .4
4C .0
214.5 153.8
21.6
39 . 3
31 . 5
2.3
1.7
2.7
3.1
5.4
1
Receivables from and payables to U.S. Government do not include amounts offset against each other on corporations'
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 corporations' books.
2 Includes marketable securities other than U.S. Government.
3 Generally reflects definitions and classifications used in "Statistics of Income" for 1961.
Note.—Data relate to all United States corporations, excluding banks, savings and loan associations, insurance companies, and beginning with the new series for 1961, investment companies. Year-end data through 1965 are based on
"Statistics of Income" (Treasury Department), covering virtually all corporations in the United States. "Statistics of
Income" data may not be strictly comparable from year to year because of changes in the tax laws, basis for filing returns,
and processing of data for compilation purposes. All other figures shown are estimates based on data compiled from many
different sources, Including data on corporations registered with the Securities and Exchange Commission.
Source: Securities and Exchange Commission.
313
TABLE B-75.—State and municipal and corporate securities offered, 1934-68
l
[Millions of dollars]
Corporate securities offered for cash 2
Year or quarter
State
and
municipal securities
offered
for cash
(principal
amounts)
Gross proceeds 3
Proposed uses of net proceeds *
New money
Total
Common
stock
Preferred
stock
Bonds
and
notes
Total
Total
Plant
and
equipment
Working
capital
Retirement
of securities
Other
purposes
1934..
939
397
371
384
32
26
231
95
1935..
1936..
1937..
1938..
1939..
1,232
1,121
908
1,108
1,128
2,332
4,572
2,310
2,155
2,164
22
272
285
25
87
86
271
406
86
98
2,225
4,029
1,618
2,044
1,980
2,266
4,431
2,239
2,110
2,115
208
858
991
681
325
111
380
574
504
170
96
478
417
177
155
1,865
3,368
1,100
1,206
1,695
193
204
148
222
95
1940..
1941..
1942..
1943..
1944..
1,238
956
524
435
661
2,677
2,667
1,062
1,170
3,202
108
110
34
56
163
183
167
112
124
369
2,386
2,390
917
990
2,669
2,615
2,623
1,043
1,147
3,142
569
868
474
308
657
424
661
287
141
252
145
207
187
167
405
1,854
1,583
396
739
2,389
192
172
173
100
96
1945..
1946..
1947..
1948..
1949..
795
1,157
2,324
2,690
2,907
6,011
6,900
6,577
7,078
6,052
397
891
779
614
736
758
127
762
492
425
4,855
4,882
5,036
5,973
4,890
5,902
6,757
6,466
6,959
5,959
1,080
3,279
4,591
5,929
4,606
638
2,115
3,409
4,221
3,724
442
1,164
1,182
1,708
882
4,555
2,868
1,352
307
401
267
610
524
722
952
1950..
1951..
1952..
1953..
1954..
3,532
3,189
4,401
5,558
6,969
811
6,361
7,741 1,212
9,534 ,369
8,898 ,326
9,516 1,213
631
838
564
489
816
4,920
5,691
7,601
7,083
7,488
6,261
7,607
9,380
8,755
9,365
4,006
6,531
8,180
7,960
6,780
2,966
5,110
6,312
5,647
5,110
1,041
1,421
1,868
2,313
1,670
1,271
486
664
260
1,875
984
589
537
535
709
1955.
1956.
1957.
1958.
1959.
5,977
5,446
6,958
7,449
7,681
10,240
10,939
12,884
11,558
9,748
2,185
2,301
2,516
1,334
2,027
635
636
411
571
531
7,420
8,002
9,957
9,653
7,190
10, 049 7,957
10,749 9,663
12,661 11,784
11,372 9,907
9,527 8,578
5,333
6,709
9,040
7,792
6,084
2,624
2,954
2,744
2,115
2,494
1,227
364
214
549
135
864
721
663
915
814
1960.
1961.
1962.
1963.
1964.
7,230
8,360
8,558
10,107
10,544
10,154
13,165
10,705
12,211
13,957
1,664
3,294
1,314
1,012
2,679
409
450
422
343
412
8,081
9,420
8,969
10,856
10,865
9,924 8,758
12,885 10,715
10,501 8,240
12,049 8,898
13,792 11,233
5,662
7,413
5,652
5,340
7,003
3,097
3,303
2,588
3,558
4,230
271
868
754
1,526
754
895
1,302
1,507
1,625
1,805
1965...
1966...
1967.-.
1968 P..
11,148
11,089
14,288
16,295
15,992
18, 074
24,798
22,400
1,547
1,939
1,959
3,860
725
574
885
640
13,720 15,801 13,063
15,561 17,841 15,806
21,954 24,409 22,230
17,900
7,712
12,430
16,154
5,352
3,376
6,076
996
241
312
1,741
1,795
1,867
IIIII.
IV..
2,870
3,177
2,434
2,609
5,094
5,115
4,197
3,669
519
975
171
274
215
115
143
101
4,359
4,025
3,883
3,294
5,036
5,046
4,143
3,617
4,320
4,644
3,663
3,179
3,258
3,668
2,907
2,597
1,062
976
756
582
51
72
52
67
665
331
428
371
IIIII.
IV..
4.046
3,799
3,038
3,404
5,464
6,208
6,832
6,294
298
518
447
696
92
208
231
354
5,074
5,482
6,154
5,244
5,403
6,109
6,716
6,181
5,076
5,672
5,943
5,538
3,808
4,265
4,329
3,752
1,268
1,407
1,614
1,787
39
51
133
89
287
386
640
554
3,658
3,771
4,574
4,295
5,178
740
5,705
832
5,280
980
6,235 1,305
249
124
180
85
4,189
4,749
4,120
4,845
5,081
5,594
5,170
4,627
4,802
4,610
3,591
3,262
2,880
1,036
1,540
1,730
67
50
30
387
742
530
1966:
1967:
1968: I .
III...
IV p . .
1 These data cover substantially all new issues of State, municipal, and corporate securities offered for cash sale in the
United States in amounts over $100,000 and with terms to maturity of more than 1 year.
2 Excludes notes issued exclusively to commercial banks, intercorporate transactions, sales of investment company issues,
and issues to be sold over an extended period, such as offerings under employee-purchase plans.
3 Number of units multiplied by offering price.
* Net proceeds represents the amount received by the issuer after payment of compensation to distributors and other
costs of flotation.
Sources: Securities and Exchange Commission, "The Commercial and Financial Chronicle," and "The Bond Buyer."
TABLE B-76.—Common stock prices, earnings, and yields, and stock market credit, 1939-68
Standard & Poor's common stock data
Price index1
Year or month
Totai
(500
stocks)
Industrials
(425
stocks)
Public
utilities
(50
stocks)
Railroads
(25
stocks)
Dividend
yield >
(percent)
Stock market credit
Price/
earnings
ratio 3
Customer credit (excluding
U.S. Government
securities)
Total
1941-43=10
1939
1940
1941
1942
1943
1944
1945
1946
1947
1948
1949
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1967 Jan...
Feb...
Mar...
Apr...
May...
June..
July...
Aug...
Sept..
Oct...
Nov...
Dec...
1968: Jan...
Feb...
Mar...
Apr...
May...
June..
July...
Aug...
Sept..
Oct...
Nov...
Dec p..
12.06
11.02
9.82
8.67
11.50
12.47
15.16
17.08
15.17
15.53
15.23
18.40
22.34
24.50
24.73
29.69
40.49,
46.62
44.38
46.24
57.38
55.85
66.27
62.38
69.87
81.37
88.17
85.26
91.93
98.70
84.45
87.36
89.42
90.96
92.59
91.43
93.01
94.49
95.81
95.66
92.66
95.30
95.04
90.75
89.09
95.67
97.87
100.53
100.30
98.11
101.34
103.76
105.40
106.48
11.77
10.69
9.72
8.78
11.49
12.34
14.72
16.48
14.85
15.34
15.00
18.33
22.68
24.78
24.84
30.25
42.40
49.80
47.63
49.36
61.45
59.43
69.99
65.54
73.39
86.19
93.48
91.09
99.18
107.49
89.88
93.35
95.86
97.54
99.59
98.61
100.38
102.11
103.84
104.16
100.90
103.91
103.11
98.33
96.77
104.42
107.02
109.73
109.16
106.77
110.53
113.29
114.77
116.01
16.34
15.05
10.93
7.74
11.34
12.81
16.84
20.76
18.01
16.77
17.87
19.96
20.59
22.86
24.03
27.57
31.37
32.25
32.19
37.22
44.15
46.86
60.20
59.16
64.99
69.91
76.08
68.21
68.10
66.42
70.63
70.45
70.03
71.70
70.70
67.39
67.77
68.03
67.45
64.93
63.48
64.61
68.02
65.61
62.62
63.66
62.92
65.21
67.55
66.60
66.77
66.93
70.59
70.54
Net
debit
balances*
Bank
loans
to
'others"*
Bank
loans to
brokers
and
dealers0
Millions of dollars
9.82
9.41
9.39
8.81
11.81
13.47
18.21
19.09
14.02
15.27
12.83
15.53
19.91
22.49
22.60
23.96
32.94
33.65
28.11
27.05
35.09
30.31
32.83
30.56
37.58
45.46
45.78
46.34
46.72
48.84
44.48
46.13
46.78
45.80
47.00
48.19
49.91
50.43
49.27
46.28
42.95
43.46
43.38
42.35
41.68
44.79
48.00
51.72
51.01
48.80
51.11
54.26
53.74
55.19
4.05
5.59
6.82
7.24
4.93
4.86
4.17
3.85
4.93
5.54
6.59
6.57
6.13
5.80
5.80
4.95
4.08
4.09
4.35
3.97
3.23
3.47
2.98
3.37
3.17
3.01
3.00
3.40
3.20
3.07
3.51
3.36
3.29
3.24
3.19
3.19
3.15
3.11
3.07
3.07
3.18
3.09
3.13
3.28
3.34
3.12
3.07
3.00
3.00
3.09
3.01
2.94
2.92
2.93
13.80
10.24
8.26
8.80
12.84
13.66
16.33
17.69
9.36
6.90
6.64
6.63
9.27
10.47
9.69
11.25
11.50
14.05
12.89
16.64
17.05
17.09
21.06
16.68
17.62
18.08
17.08
14.92
17.52
942
473
517
499
821
1,237
1,253
1,332
1,665
2,388
2,791
2,823
2,482
3,285
3,280
3,222
4,259
4,125
5,515
5,079
5,521
5,329
7,883
7,345
7,415
17.86
1,374
976
1,032
968
1,249
1,798
1,826
1,980
2,445
3,436
4,030
3,984
3,576
4,537
4,461
4,415
5,602
5,494
7,242
7,053
7,705
7,443
10,347
5,290
5,349
5,718
5,819
5,926
6,166
6,603
6,607
6,825
7,010
7,053
7,883
7,797
7,419
7,248
7,701
8,268
8,728
8,861
8,489
8,724
8,859
8,994
7,808
7,969
8,085
8,333
8,800
8,869
17.81
9,162
9,433
9,495
17.41 10,347
10,229
9,840
9,622
16.40
10,047
10,625
"17.'23' 11,138
11,277
10,976
11,238
11,336
11,575
17.01
353
432
503
515
469
428
561
573
648
780
1,048
1,239
1,161
1,094
1,252
1,181
1,193
1,343
1,369
1,727
1,974
«2,184
2,115
2,464
2,674
2,055
2,066
2,090
2,150
2,159
2,167
2,197
2,262
2,337
2,423
2,442
2,464
2,432
2,421
2,374
2,346
2,357
2,410
2,416
2,487
2,515
2,557
2,631
2,674
715
584
535
850
1,328
2,137
2,782
1,471
784
1,331
1,608
1,742
1,419
2,002
2,248
2,688
2,852
2,214
2,190
2,569
2,584
2,614
3,398
4,352
4,754
4,631
M,277
4,501
5,082
5,798
4,672
4,045
4,484
4,385
4,075
3,813
4,195
4,685
4,814
4,670
4,296
5,082
5,823
5,052
4,305
4,376
4,282
4,585
6,327
6,156
6,452
5,650
4,960
5,798
* Annual data are averages of monthly figures and monthly data are averages of daily figures.
2
Aggregate cash dividends (based on latest known annual rate) divided by the aggregate monthly market value of the
stocks in the group. Annual yields are averages of monthly data.
3
Ratio of quarterly earnings (seasonally adjusted annual rate) to price index for last day in quarter. Annual ratios are
averages of quarterly data.
* As reported by member firms of the New York Stock Exchange carrying margin accounts. Includes net debit balances
of all customers (other than general partners in the reporting firm and member firms of national exchanges) whose combined accounts net to a debit. Balances secured by U.S. Government obligations are excluded through 1967 and included
thereafter. Data are for end of period.
s Loans by weekly reporting member banks (weekly reporting large commercial banks beginning 1965) to others than
brokers and dealers for purchasing or carrying securities except U.S. Government obligations. Data are for last Wednesday
'Loans'by weekly reporting member banks (weekly reporting large commercial banks beginning 1965) for purchasing
or carrying securities, including U.S. Government obligations. Data are for last Wednesday of period.
toUIWV. BowA O\fcOMttWt*Ot VE» f *tett\ tasww System, Standard & Poor's Corporation, and New York Stock
Exchange.
3*5
TABLE B—77.—Business formation and business failures, 1929-68
Business failures *
Year or month
index
of net
business
formation
(1957-59 =
100)
1929 . . .
1930
1931
1932
1933 3
1934
1935
. _
1936
1937
1938
1939 3_
. . .
1940
1941
1942
1943
1944
1945
1946
1947 .
1948
1949
1950
1951.
1952
.
1953
1954
1955
1956
1957
1958
1959
1960
1
...
1961
1962
.
1963
.
1964
1965
1966
1967
1968
123.1
96.7
102.3
102.8
108.0
103.5
99.8
107.6
103.2
98.3
97.1
104.6
99.8
95.4
98.0
100.6
104.5
106.0
105.5
107.7
New
business
incorporations
(number)
132,916
112,638
96,101
85,491
92,925
83,649
92,819
102,545
117,164
139,915
141,163
137,112
150,781
193,067
182,713
181,535
182,057
186,404
197,724
203,797
200,010
206,569
Amount of current
liabilities (millions
of dollars)
Number of failures
Business
failure
rate 2
Liability size
class
Total
Under $100,000
and
$100,000 over
Liability size
class
Total
Under $100,000
and
$100,000 over
103.9
121.6
133.4
154.1
100.3
61.1
61.7
47.8
45.9
61.1
69.6
63.0
54.5
44.6
16.4
6.5
4.2
5.2
14.3
20.4
34.4
34.3
30.7
28.7
33.2
42.0
41.6
48.0
51.7
55.9
51.8
57.0
64.4
60.8
56.3
53.2
53.3
51.6
49.0
38.6
22,909
26,355
28,285
31,822
19,859
12,091
12,244
9,607
9,490
12,836
14,768
13,619
11,848
9,405
3,221
1,222
809
1,129
3,474
5,250
9,246
9,162
8,058
7,611
8,862
11,086
10,969
12,686
13,739
14,964
14,053
15,445
17,075
15,782
14,374
13,501
13,514
13,061
12,364
9,636
22,165
25,408
27,230
30,197
18,880
11,421
11,691
9,285
9,203
12,553
14,541
13,400
11,685
9,282
3,155
1,176
759
1,002
3,103
4,853
8,708
8,746
7,626
7,081
8,075
10,226
10,113
11,615
12,547
13,499
12,707
13,650
15,006
13,772
12,192
11,346
11,340
10,833
10,144
7,829
744
947
1,055
1 625
979
670
553
322
287
283
227
219
163
123
66
46
50
127
371
337
538
416
432
530
787
860
856
1,071
1,192
1,465
1,346
1,795
2,069
2,010
2,182
2 155
2,174
2,228
2,220
1,807
483.3
668.3
736.3
928.3
457.5
334.0
310.6
203.2
183.3
246.5
182.5
166.7
136.1
100.8
45.3
31.7
30.2
67.3
204.6
234.6
308.1
248.3
259.5
283.3
394.2
462.6
449.4
562.7
615.3
728.3
692.8
938.6
1,090.1
1,213.6
1,352.6
1,329.2
1,321.7
1,385.7
1,265.2
941.0
261.5
303.5
354.2
432.6
215.5
138.5
135.5
102.8
101.9
140.1
132.9
119.9
100.7
80.3
30.2
14.5
11.4
15.7
63.7
93.9
161.4
151.2
131.6
131.9
167.5
211.4
206.4
239.8
267.1
297.6
278.9
327.2
370.1
346.5
321.0
313.6
321.7
321.5
297.9
241.1
221.8
364.8
382.2
495.7
242.0
195.4
175.1
100.4
81.4
106.4
49.7
46.8
35.4
20.5
15.1
17.1
18.8
51.6
140.9
140.7
146.7
97.1
128.0
151.4
226.6
251.2
243.0
322.9
348.2
430.7
413.9
611.4
720.0
867.1
1,031.6
1,015.6
1,000.0
1,064.1
967.3
699.9
54.9
57.1
49.7
52.1
48.6
48.6
43.2
49.3
49.1
47.4
42.2
43.2
38.2
37.5
44.3
43.5
40.9
36.9
41.0
36.5
40.3
37.5
35.7
29.9
1,191
1,216
1,216
1,160
1,100
1,047
843
1,017
913
949
881
831
844
832
1,021
1,003
909
751
810
734
705
768
696
563
1,003
995
981
966
917
850
708
793
758
782
718
673
651
682
839
833
707
616
646
607
598
614
569
467
188
221
235
194
183
197
135
224
155
167
163
158
193
150
182
170
202
135
164
127
107
154
127
96
108.2
113.5
119.3
103,8
93.4
104.6
72.6
108.9
93.9
81.6
70.0
195.4
104.5
79.6
88.6
80.1
91.4
74.7
90.3
65.8
58.7
65.4
58.7
83.4
30.2
29.3
28.7
27.8
27.1
24.7
20.8
23.7
22.2
22.5
21.3
19.6
20.4
21.4
26.1
24.8
21.9
18.6
19.2
18.3
19.1
18.6
17.9
14.8
77.9
84.1
90.6
76.1
66.3
80.0
51.7
85.2
71.8
59.1
48.7
175.8
84.1
58.2
62.5
55,3
69.5
56. C
71.1
47.5
39.5
46.8
40.8
68.6
Seasonally adjusted
1967: Jan....
Feb
Mar
Apr
May
June
July
Aug
Sept
Oct
Nov
Dec
1968: Jan
Feb
Mar
Apr
May
June..,
July
Aug
Sept
oct.:.:
Nov
Dec
102.2
103.2
103.3
103.7
105.0
108.1
108.4
110.7
110.3
110.6
112.7
113.8
113.5
114.5
113.6
113.9
115.1
116.2
119.1
119.7
122.1
125.2
124.6
16,703
15,987
16,244
16,760
17,627
17,799
16,300
17,674
18,118
18,000
18,403
18,168
17,223
18,014
17,974
18,659
18,796
19,197
19,530
20,053
21,237
21,721
20,850
1
Commercial and industrial failures only. Excludes failures of banks and railroads and, beginning 1933, of real estate,
insurance, holding, and financial companies, steamship lines, travel agencies, etc.
2
Failure rate per 10,000 listed enterprises.
3
Series revised; not strictly comparable with earlier data.
Sources: Department of Commerce (Bureau of the Census) and Dun & Bradstreet, Inc.
3l6
AGRICULTURE
T A B L E B—78.—Income from agriculture, 1929-68
Income received from farming
Personal income
received by total
farm population
Net to farm
operators
Realized gross
Year or
quarter
From
From
From
nonTotals
farm 1 farm
all
sources sources sources2
ProducCash tion ex- Exclud- Includreceipts penses ing net ing net
from
inven- invenmarkettory
tory
ings
change change4
Billions of dollars
Net income per
farm, including
net inventory
cha nge
Current
prices
1968
prices8
Dollars
__
13.9
11.3
7.7
6.3
6.2
945
2,054
...
1929
9.1
6.4
4.7
5.3
6.4
7.1
8.4
8.9
7.7
7.9
6.9
5.5
4.5
4.4
4.7
5.1
5.6
6.2
5.9
6.3
4.5
2.9
1.9
2.7
3.9
4.6
5.1
5.2
4.2
4.3
4.3
3.3
2.0
2.6
2.9
5.3
4.3
6.0
4.4
4.4
651
506
304
379
431
775
639
905
668
685
1,514
1,368
950
1,184
1,197
2,095
1,727
2,382
1,856
1,903
5.4
7.7
7.2
9.0
7.2
7.4
3.2
5.4
4.6
6.2
4.7
4.8
2.2
2.3
2.6
2.7
2.5
2.6
11.5
8.4
6.4
7.1
8.6
9.7
10.8
11.4
10.1
10.6
1946
1947
1948.
1949
7.6
10.1
14.1
16.5
16.6
17.2
20.0
21.1
23.8
19.5
4.8
6.8
10.1
12.1
12.2
12.8
15.5
15.8
18.0
13.3
2.8
3.3
3.9
4.4
4.4
4.4
4.6
5.3
5.8
6.2
11.1
13.9
18.8
23.4
24.4
25.8
29.5
34.1
34.7
31.6
8.4
11.1
15.6
19.6
20.5
21.7
24.8
29.6
30.2
27.8
6.9
7.8
10.0
11.6
12.3
13.1
14.5
17.0
18.8
18.0
4.2
6.1
8.8
11.8
12.1
12.8
15.0
17.1
15.9
13.6
4.5
6.5
9.9
11.7
11.7
12.3
15.1
15.4
17.7
12.8
706
1,031
1,588
1,927
1,950
2,063
2,543
2,615
3,044
2,233
1,961
2,644
3,609
3,854
3,750
3,820
4,238
3,683
4,059
3,059
1950
1951.
1952.
1953
1954.
1955
1956
1957.
1958
1959.
20.4
22.7
22.1
19.8
18.4
17.6
17.8
17.7
19.5
18.1
14.1
16.2
15.4.
13.4
12.5
11.4
11.2
11.0
12.8
11.0
6.3
6.5
6.7
6.4
5.9
6.2
6.6
6.6
6.7
7.0
32.3
37.1
36.8
35.0
33.6
33.1
34.3
34.0
37.9
37.5
28.5
32.9
32.5
31.0
29.8
29.5
30.4
29.7
33.5
33.5
19.4
22.3
22.6
21.3
21.6
21.9
22.4
23.3
25.2
26.1
12.9
14.8
14.1
13.7
12.0
11.2
11.9
10.7
12.7
11.4
13.7
16.0
15.1
13.1
12.5
11.5
11.4
11.3
13.5
11.5
2,421
2,946
2,896
2,626
2,606
2,463
2,535
2,590
3,189
2,795
3,316
3,682
3,575
3,282
3,217
3,041
3,091
3,083
3,708
3,250
1960
1961
1962
1963
1964.
1965
1966.
1967
1968 »
18.7
19.7
20.4
20.6
20.6
23.6
24.8
23.7
24.4
11.5
12.2
12.3
12.1
11.3
13.5
14.3
13.0
13.5
7.2
7.5
8.2
8.5
9.3
10.0
10.5
10.7
10.9
38.1
39.8
41.3
42.3
42.6
44.9
49.6
49.1
50.8
34.2
35.1
36.4
37.4
37.2
39.3
43.2
42.8
44.1
26.4
27.1
28.6
29.7
29.5
30.9
33.4
34.8
35.9
11.7
12.6
12.6
12.6
13.1
14.0
16.2
14.2
14.9
12.1
13.0
13.2
13.2
12.3
15.0
16.1
14.6
15.4
3,049
3,399
3,586
3,708
3,564
4 487
4,967
4,654
5,035
3,505
3,907
4,075
4,166
3,960
4,931
5,284
4,848
5,035
1930 .
1931
1932
1933
1934
1935
1936
1937
1938
1939
.
1940
1941
1942
1943
1944.
_.__
Seasonally adjusted annual rates
1967: 1 ________
II
III
IV
48.9
49.3
49.2
48.9
42.5
43.0
43.0
42.7
34.4
34.9
35.0
35.0
14.5
14.4
14.2
13.9
14.6
14.7
14.8
14.5
4,640
4,670
4,700
4,610
4,880
4,860
4,900
4,750
1968: 1
II
III
IV v
49.8
50.7
51.6
51.1
43.2
44.0
44.9
44.3
35.4
35.9
36.2
36.3
14 4
14.8
15.4
14.8
14.8
15.1
15.7
15.8
4,840
4,940
5,130
5,170
4,940
4,940
5,080
5,120
1
Net income to farm operators including net inventory change, less net income of nonresident operators, plus wages
and salaries and other labor income of farm resident workers, less contributions of farm resident operators and workers
to 2social insurance.
Consists of income received by farm residents from nonfarm sources, such as wages and salaries from nonfarm employment, nonfarm business and professional income, rents from nonfarm real estate, dividends, interest, royalties,
unemployment compensation, and social security payments.
3 Cash receipts from marketings, Government payments, and nonmoney income furnished by farms.
4
Includes net change in inventory of crops and livestock valued at the average price for the year.
5
Income in current prices divided by the index of prices paid by farmers for family living Items on a 1968 base.
Source: Department of Agriculture.
323-166 O—69
-21
317
TABLE B-79.—Farm production indexes, 1929-68
[1957-59=1001
Livestock and products
Crops
Year
Farm
output^
Meat
ToOil
Vege- Fruits
Feed Hay
Total 2 grains and Food tables and Cot- bacco crops Total 3 animals
nuts ton
orage rains
1929...
62
73
62
79
68
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..
1955..
1956..
1957..
1958..
1959..
I960..
19611962..
1963..
1964..
1965..
1966..
1967..
1968 v.
61
66
64
59
51
61
55
69
67
68
70
73
82
80
83
81
84
81
88
87
86
89
92
93
93
96
97
95
102
103
106
107
108
112
111
114
113
118
120
69
77
73
65
54
70
59
81
76
75
78
79
89
83
88
85
89
85
97
92
89
91
95
94
93
96
95
93
104
103
108
106
107
111
108
115
111
117
119
56
63
73
56
33
60
38
67
65
65
66
71
81
74
78
75
82
63
9i
80
81
75
79
77
81
86
85
93
101
106
109
99
100
108
95
111
110
124
118
66
72
74
69
64
82
66
75
81
75
86
86
93
91
90
93
87
84
84
83
89
92
90
92
92
98
94
101
102
97
103
102
106
106
107
112
110
115
114
74
79
63
47
45
55
54
74
77
63
69
79
83
72
88
92
95
111
107
92
86
85
109
100
88
83
87
82
121
97
115
106
98
102
114
117
118
134
141
73
74
75
76
73
80
81
75
82
81
81
83
84
89
97
92
94
105
91
97
94
96
89
90
95
93
96
102
98
102
100
102
108
106
106
101
108
109
110
113
75
120
88
73
92
75
76
71
90
70
93
84
96
93
99
98
84
98
89
106
101
92
98
98
100
97
98
99
99
103
94
102
104
98
102
103
100
101
106
108
116
109
113
138
105
105
78
86
101
154
97
96
102
88
105
93
100
74
71
97
122
131
82
124
124
134
111
120
108
89
93
118
116
116
121
125
124
121
78
61
88
95
89
58
80
63
76
68
91
80
110
84
73
81
81
113
114
134
122
115
114
117
135
130
119
130
127
126
96
100
104
112
119
134
135
129
107
109
114
99
13
14
14
13
11
13
21
16
18
22
29
34
37
56
60
50
54
52
55
67
61
71
65
63
63
71
78
92
91
111
98
104
121
122
128
128
153
164
171
188
63
64
65
66
67
61
59
63
62
65
70
71
75
84
91
86
86
83
82
80
85
88
92
92
93
96
99
99
97
99
104
102
107
108
111
114
111
114
117
118
Dairy Poults
prod- and
ucts eggs
62
75
44
63
66
67
70
59
53
60
58
63
71
72
76
87
97
88
84
82
81
79
83
89
95
95
94
98
103
100
96
98
106
103
107
109
114
117
111
116
120
123
76
78
79
79
78
78
79
79
81
82
84
89
92
91
92
95
94
93
90
93
93
92
92
97
98
99
101
101
100
99
101
103
104
103
105
103
100
100
99
45
44
44
44
41
41
44
44
45
48
49
54
62
71
71
74
69
68
67
74
78
81
82
84
87
86
94
95
101
104
104
112
112
115
119
124
132
138
134
» Farm output measures the annual volume of farm production available for eventual human use through sales from
farms or consumption in farm households. Total excludes production of seeds and of feed for horses and mules.
2 Includes production of seeds and of feed for horses and mules and certain items not shown separately.
3 Includes certain items not shown separately.
Source: Department of Agriculture.
318
TABLE B-80.—Farm population, employment, and productivity, 1929-68
Farm population
(April l ) ^
Year
Number
(thousands)
As percent of
total
populations
Farm employment
(thousands)*
Farm output
Per man-hour
Total
Family
Hired
workers workers
Per
unit of
total
input
Total
Crops
Livestock
and
products
Crop
production
per
acre4
Livestock
production
per
breedunit
Index, 1957-59=100
1929..
30,580
25.1
12,763
9,360
3,403
63
28
28
48
69
68
1930..
1931..
1932..
1933..
1934..
30,529
30,845
31,388
32,393
32,305
24.8
24.8
25.1
25.8
25.5
12,497
12,745
12,816
12,739
12,627
9,307
9,642
9,922
9,874
9,765
3,190
3,103
2,894
2,865
2,862
63
69
69
65
59
28
30
30
28
27
27
30
30
27
27
47
47
47
46
43
64
72
68
61
51
70
70
69
68
62
1935..
1936..
1937..
1938..
1939..
32,161
31,737
31,266
30,980
30,840
25.3
24.8
24.2
23.8
23.5
12,733
12,331
11,978
11,622
11,338
9,855
9,350
9,054
8,815
8,611
2,878
2,981
2,924
2,807
2,727
69
62
73
74
72
31
29
33
35
35
31
28
33
35
34
44
46
46
48
50
66
56
76
73
74
69
70
71
75
75
1940..
1941..
1942..
1943..
1944..
30,547
30,118
28,914
26,186
24,815
23.1
22.6
21.4
19.2
17.9
10,979
10,669
10,504
10,446
10,219
8,300
8,017
7,949
8,010
7,988
2,679
2,652
2,555
2,436
2,231
1Z
75
82
79
82
36
39
42
42
44
37
39
43
41
44
50
51
56
58
56
76
77
86
78
83
75
80
81
78
75
1945..
1946..
1947..
1948..
1949..
24,420
25,403
25,829
24,383
24,194
17.5
18.0
17.9
16.6
16.2
10,000
10,295
10,382
10,363
9,964
7,881
8,106
8,115
8,026
7,712
2,119
2,189
2,267
2,337
2,252
82
85
82
88
86
46
49
50
56
57
46
50
50
57
57
58
59
61
62
66
82
86
82
92
85
79
78
79
1950.
1951..
1952.
1953.
1954..
23,048
21,890
21,748
19,874
19,019
15.2
14.2
13.9
12.5
11.7
9,926
9,546
9,149
8,864
8,651
7,597
7,310
7,005
6,775
6,570
2,329
2,236
2,144
2,089
2,081
85
86
89
90
91
61
f2
68
71
74
63
61
67
69
73
68
72
74
76
80
84
85
90
89
88
86
89
89
93
92
1955.
1956.
1957.
1958..
1959.
19,078
18,712
17,656
17,128
16,592
11.5
11.1
10.3
9.8
9.4
8,381
7,853
7,600
7,503
7,342
6,345
5,900
5,660
5 521
5,390
2,036
1,953
1,940
1,982
1,952
94
96
96
103
11
0
80
86
91
103
106
77
83
90
105
105
85
89
92
100
108
91
92
93
105
102
93
95
96
100
104
I960..
1961.
1962.
1963.
1964.
15,635
14,803
14,313
13,367
12,954
8.7
8.1
7.7
7.1
6.7
7,057
6,919
6,700
6,518
6,110
5,172
5,029
4,873
4,738
4,506
1,885
1,890
1,827
1,780
1,604
105
106
107
108
107
115
120
127
137
142
114
116
122
129
132
113
123
130
140
152
109
112
115
118
115
105
109
108
110
113
1965....
1966....
1967
1968 P .
12,363
11,595
10,817
10,500
6.4
5.9
5.4
5.2
5,610
5,214
4,903
4,745
4,128
3,854
3,650
3,550
1,482
1,360
1,253
1,195
no
106
108
107
154
159
169
176
146
150
155
165
159
170
183
187
122
119
122
127
111
118
119
1 Farm population as defined by Department of Agriculture and Department of Commerce, i.e., civilian population
living on farms, regardless of occupation.
2 Total population of United States as of July 1 including Armed Forces abroad.
3 Includes persons doing farmwork on all farms. These data, published by the Department of Agriculture, Statistical
Reporting Service, differ from those on agricultural employment by the Department of Labor (see Table B-22) because of
differences in the method of approach, in concepts of employment, and in time of month for which the data are collected.
See monthly report on "Farm Labor."
* Computed from variable weights for individual crops produced each year.
Sources: Department of Agriculture and Department of Commerce (Bureau of the Census).
319
T A B L E B—81.—Indexes of prices received and prices paid by farmers, and parity ratio, 1929—68
[1957-59=1001
Prices received by farmers
Crops
Year or month
All
farm
prodAll
ucts^ crops
Food
grains
Feed grains
and hay
Total
Feed
grains
Livestock and products
Cotton
Tobacco
Oilbearing
crops
All
livestock
and
products^
Meat
animals
Dairy Poultry
prod- and
ucts eggs
61
55
74
77
57
35
62
50
65
102
1930..
1931..
1932..
1933..
1934_.
1935..
1936..
1937..
1938..
1939..
52
36
27
29
37
45
47
51
40
39
52
34
26
32
44
46
49
53
36
37
44
27
21
31
43
46
51
57
35
34
67
46
31
36
60
68
65
79
45
46
68
44
28
36
60
70
68
84
45
44
40
24
19
26
39
38
38
36
27
28
29
20
18
22
32
35
33
41
36
31
52
38
28
27
32
44
46
49
43
41
43
30
20
19
22
38
38
42
37
36
55
43
33
34
40
45
49
51
45
43
81
62
51
47
56
74
73
70
69
61
1940..
1941..
1942..
19431944..
1945..
1946..
1947..
1948..
1949..
42
51
66
«80
«82
6
86
6 98
114
119
103
41
48
65
84
89
91
102
118
114
100
40
46
57
70
78
81
95
128
118
103
54
58
72
96
108
106
127
161
162
112
54
58
73
97
109
104
131
171
170
109
32
43
60
64
66
69
91
105
104
94
28
32
51
66
72
74
78
77
78
82
97
100
114
158
153
106
42
53
66
77
76
82
94
111
122
106
35
47
46
55
60
63
66 •77
62 6 86
«67 «89
« 81 6 104
107
106
117
117
101
62
77
96
121
112
126
127
141
153
140
1950..
1951..
1952..
1953.
1954..
1955.
1956.
1957..
1958..
1959.
107
125
119
105
102
96
95
97
104
99
104
119
120
108
108
104
105
101
100
99
106
115
116
111
110
107
106
106
98
96
122
143
147
130
128
116
115
105
97
123
147
150
132
130
116
116
105
97
98
108
129
119
102
105
104
103
101
97
102
83
90
89
89
91
90
93
96
100
104
120
148
129
122
133
109
111
106
98
96
108
130
119
104
97
90
88
94
106
100
110
133
115
94
92
80
76
89
109
102
97
112
118
104
96
96
99
101
99
100
118
144
130
140
113
121
112
102
108
90
1960.
1961.
1962..
1963..
1964.
1965.
1966.
1967.
1968.
99
99
101
100
98
103
110
104
107
100
102
104
107
107
104
106
100
102
96
99
107
106
90
77
87
84
76
96
95
98
104
105
110
114
110
100
94
94
96
102
103
108
112
108
97
97
100
104
104
100
94
82
73
72
103
109
109
102
101
106
114
114
117
93
112
108
113
112
116
128
121
115
98
98
99
95
91
101
113
107
112
96
97
101
94
88
104
116
109
112
101
101
99
99
100
102
115
119
124
101
92
92
92
90
92
102
84
89
Febl5.
Mar 15
Apr 15
May 15
June 15
106
104
103
102
104
105
100
99
100
100
99
102
117
116
117
115
115
116
115
114
115
114
114
115
64
65
66
66
64
66
115
116
116
115
115
115
128
125
126
125
124
125
109
107
106
103
108
108
108
107
105
104
114
115
122
120
117
114
113
111
97
90
91
82
80
78
July 15
Augl5
Sept 15
Octl5.
Novl5
Dec 15
106
105
105
104
104
105
99
99
98
101
102
103
113
105
104
101
97
101
112
104
103
97
94
97
68
71
69
88
98
89
115
114
112
111
115
114
122
117
116
113
114
115
110
110
110
107
105
105
116
115
111
108
103
103
114
117
122
125
125
124
84
81
84
77
78
82
1968: Jan 15..
Feb 15..
Mar 15..
Apr 15.
May 15.
June 15
105
106
107
107
108
107
103
102
103
104
105
103
102
104
104
103
104
103
99
101
101
101
102
101
72
64
63
64
69
67
115
116
116
116
116
116
117
119
118
118
118
118
107
109
109
109
109
111
105
111
112
113
113
115
124
122
120
119
119
117
84
83
84
80
78
85
July 15..
Aug 15_.
Sept 15.
Oct 1 5 . .
Nov 15..
Dec 15_.
108
108
110
108
108
108
99
101
103
102
102
99
99
93
95
93
98
100
97
90
92
90
96
97
65
84
85
86
78
70
116
119
119
118
118
120
117
117
111
109
111
112
114
113
116
113
113
115
118
115
114
110
109
111
120
123
128
131
132
131
90
91
104
94
97
103
1929..
1967: Jan 15
See footnotes at end of table.
320
>
TABLE B-81.—Indexes of prices received and prices paid by farmers, and par it ratio, 1929-68—
Continued
[1957-59=100]
Prices paid by farmers
Year or month
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
1955
1956
1957
1958
1959
1960
1961
1962
1963—.
1964
1965
1966—
1967
1968
1967: Jan 15...
Febl5...
Mar 15. .
Apr 15...
May 15..
June 15..
July 15...
Aug 15...
Septl5_.
Octl5__.
Novl5...
Dec 15...
1968: Jan 15...
Feb 15...
Mar 15...
Apr 15...
May 15..
June 15..
July 15..
Aug 15..
Sept 15..
Octl5...
Nov 15...
Dec 15...
All
items,
interest,
taxes,
and
wage
rates
(parity
index)
55
52
44
38
37
41
42
42
45
42
42
42
45
52
58
62
65
71
82
89
86
87
96
98
95
95
94
95
98
100
102
102
103
105
107
107
110
114
116
121
116
115
116
116
116
117
117
117
117
117
117
117
118
119
120
121
121
121
121
121
121
122
123
123
Commodities and services
Production items
FamAll
All
items living
items production
items i
55
51
44
38
38
43
45
45
48
45
44
45
48
55
61
64
66
72
85
92
88
90
100
100
96
96
95
96
98
101
101
101
101
103
104
104
106
109
111
114
110
110
110
110
HI
111
111
111
111
111
111
111
112
113
113
114
114
114
114
114
114
115
115
116
54
50
43
37
38
43
43
43
45
43
42
42
45
52
58
61
64
71
83
88
85
86
94
95
94
94
95
96
99
100
101
102
102
103
104
105
107
110
113
117
112
112
112
111
112
112
113
113
113
114
114
114
115
115
116
117
117
117
118
118
118
119
119
119
56
52
43
38
38
44
46
46
50
47
46
47
50
57
63
66
67
73
85
95
91
94
104
104
97
97
96
95
98
100
102
101
101
103
104
103
105
108
109
111
109
109
109
109
109
110
110
109
109
109
109
109
110
111
111
111
112
112
112
111
111
111
112
113
Feed
68
61
43
32
37
52
53
55
62
47
47
50
54
66
78
87
86
100
118
125
103
105
118
126
114
113
106
103
101
99
100
98
98
100
104
103
104
109
106
102
110
109
109
108
107
107
106
104
104
103
102
103
104
104
103
103
103
102
101
99
100
99
101
101
Motor
vehicles
Farm
machinery
36
35
35
34
34
36
37
38
39
42
40
40
42
45
47
51
53
55
63
71
78
78
83
87
86
86
87
89
96
100
104
102
102
105
109
111
113
117
121
128
43
43
42
40
39
40
41
42
43
44
43
43
43
46
48
49
49
51
58
67
76
78
83
86
87
87
87
92
96
100
104
107
110
111
113
116
119
124
129
136
119
127
121
121
130
1
122
124
124
124
132
126
133
129
129
136
128
138
130
132
Interest 2
Wage
Taxes 3 rates*
Parity
ratio s
Fertilizer
85
83
75
66
61
69
68
64
67
67
66
64
64
71
76
77
79
79
88
96
98
94
100
102
103
102
101
100
100
100
100
100
100
100
100
99
100
100
100
98
100
100
100
101
101
101
101
101
100
100
100
100
100
100
100
98
98 4
98*
98
98
96
96
96
96
116
113
108
101
90
80
74
68
64
60
58
56
54
51
46
43
41
40
42
43
45
49
54
59
63
68
74
83
91
100
109
120
131
145
162
182
206
231
253
273
253
253
253
253
253
253
253
253
253
253
253
253
273
273
273
273
273
273
273
273
273
273
273
273
56
57
56
51
44
38
36
36
36
38
37
38
38
38
37
37
39
43
48
56
60
65
68
71
74
77
81
87
93
100
107
117
125
132
139
147
156
170
181
193
181
181
181
181
181
181
181
181
181
181
181
181
193
193
193
193
193
193
193
193
193
193
193
193
92
83
67
58
64
75
88
92
93
78
77
81
93
105
113
108
109
113
115
110
100
101
107
100
92
92
96
99
105
109
110
114
116
119
125
135
146
158
137
137
137
146
146
146
148
148
148
152
152
152
150
150
150
157
157
157
159
159
159
166
166
166
(66)
(80)
(95)
(95)
(97)
(83)
(85)
(88)
(98)
(109)
(116)
(110)
(111)
(115)
(116)
(111)
(100)
(102)
(108)
(101)
(93)
80
86)
74 (79)
74 (79)
76 (81)
75 (80)
74 (79)
72 (77)
74 (79)
75 (80)
74 (80)
75 (80)
74 (79)
73 (78)
73 (78)
74 (79)
(79)
(80)
79)
79)
79)
79)
(79)
(79)
-- (81)
73 (79)
73 (79)
73 (78)
Includes items not shown separately.
2
Interest payable per acre on farm real estate debt.
3 Farm real estate taxes payable per acre (levied in preceding year).
4
Monthly data are seasonally adjusted.
s Percentage ratio of prices received for all farm products to parity index, on a 1910-14=100 base. The adjusted parity
ratio (shown in parentheses in the table) reflects Government payments made directly to farmers.
6
Includes wartime subsidy payments.
Source: Department of Agriculture.
321
TABLE B-82.—Selected measures offarm resources and inputs, 1929-68
Crops
harvested
(millions
of acres) i
Year
Total
Exclusive of
use for
feed for
horses
and
mules
Index numbers of inputs (1957-59 = 100)
Livestock
breeding
units
(195759 =
100)2
Manhours
of
farm
work
(billions)
Total
_
harm
labor
Farm
real
estate3
MeFeed,
chaniFertiseed,
cl
a
lizer
and
power
and
liveand
liming
stock
ma- materials pur- 4
chinery
chases
Miscellaneous
1929..
365
298
92
23.2
218
92
38
21
27
76
1930..
1931..
1932..
1933..
1934..
369
365
371
340
304
304
303
311
281
247
92
93
95
98
98
22.9
23.4
22.6
22.6
20.2
216
220
213
212
190
91
89
86
87
86
40
38
35
32
32
21
16
11
12
1
4
26
23
24
24
24
76
78
79
76
69
1935..
1936..
1937..
1938..
1939..
345
323
347
349
331
289
269
295
301
286
86
90
87
87
93
21.1
20.4
22.1
20.6
20.7
89
94
91
94
198
192
208
193
194
88
89
90
91
92
33
35
38
40
40"
17
20
24
23
24
23
31
29
30
37
66
68
68
70
72
1940..
1941..
1942..
1943..
1944..
341
344
348
357
362
298
304
309
320
326
95
94
104
117
114
20.5
20.0
20.6
20.3
20.2
97
97
100
101
101
192
188
194
191
190
92
92
91
89
88
42
44
48
50
51
28
30
34
38
43
45
46
57
63
64
73
74
75
76
76
1945..
1946..
1947..
1948..
1949..
354
352
355
356
360
322
323
329
332
338
109
107
104
98
99
18.8
18.1
17.2
16.8
16.2
99
99
99
100
101
177
170
162
158
152
88
91
92
95
95
54
58
64
72
80
45
53
56
57
61
72
69
73
72
69
76
77
78
74
82
1950..
1951..
1952..
1953..
1954..
345
344
349
348
346
326
326
334
335
335
102
103
103
100
104
15.1
15.2
14.5
14.0
13.3
101
104
103
103
102
142
143
136
131
125
97
98
99
99
100
86
92
96
97
98
68
73
80
83
88
72
80
81
80
82
85
91
91
1955..
1956.
1957..
1958..
1959.
340
324
324
324
324
330
315
316
317
318
106
104
101
99
100
12.8
12.0
11.1
10.5
10.3
102
101
99
99
102
120
113
104
99
97
100
99
100
100
100
99
99
100
99
101
90
91
94
97
109
86
91
93
101
106
94
98
95
100
105
1960.
1961.
1962.
1963.
1964.
324
303
295
300
301
319
299
291
296
297
97
98
100
101
101
9.8
9.4
9.1
8.8
8.3
101
101
101
104
104
92
89
85
82
78
101
101
103
104
106
104
101
100
104
102
111
117
125
141
155
109
111
117
123
126
106
109
113
117
120
1965
1966....
1967
1968 v
298
295
308
301
294
291
304
100
97
98
7.9
7.5
7.4
7.2
104
107
109
112
74
71
70
68
106
107
106
106
105
110
112
116
162
182
205
221
127
136
140
149
120
123
120
130
1
3
Acreage harvested (excluding duplication) plus acreages in fruits, tree nuts, and farm gardens.
Animal units of breeding livestock, excluding horses and mules.
' Includes service buildings and improvements on land.
< Nonfarm inputs associated with farmers' purchases.
Source: Department of Agriculture.
322
TABLE B-83.—Comparative balance sheet of agriculture, 1929-69
[Billions of dollars]
Assets
Claims
Financial assets
Other physical assets
Beginning of
year
MaHousechinhold
Real
DeTotal estate
ery
equip- posits
Live- and
2
and
stock i motor Crops ment
and
curvehifurnish- rency
cles
ings
ProReal
Invest- Total estate Other prie;
tors
U.S.
ment
debt equidebt
savings in coties
bonds operatives
48.0
6.6
3.2
47.9
43.7
37.2
30.8
32.2
6.5
4.9
3.6
3.0
3.2
3.4
3.3
3.0
2.5
2.2
33.3
34.3
35.2
35.2
34.1
3.5
5.2
5.1
5.0
5.1
2.2
2.4
2.6
3.0
3.2
52.9
55.0
62.9
. 73.7
84.6
33.6
34.4
37.5
41.6
48.2
5.1
5.3
7.1
9.6
9.7
3.1
3.3
4.0
4.9
5.4
2.7
3.0
3.8
5.1
6.1
4 2
4.2
4.9
5.0
5.3
3.2
3.5
4.2
5.4
6.6
0.2
.4
.5
1.1
2.2
.8
.9
.9
1.0
1.1
52.9
55.0
62.9
73.7
84.6
94.2
. _ 103.5
116.4
127.9
134.9
53.9
61.0
68.5
73.7
76.6
9.0
9.7
11.9
13.3
14.4
6.5
5.4
5.3
7.4
10.1
6.7
6.3
7.1
9.0
8.6
5.6
6.1
7.7
8.5
9.1
7.9
9.4
10.2
9.9
9.6
3.4
4.2
4.2
4.4
4.6
1.2
1.4
1.5
1.7
1.9
1950
1951
1952
1953
1954
132.5
151.5
167.0
164.3
161.2
75.3
86.6
95.1
96.5
95.0
12.9
17.1
19.5
14.8
11.7
12.2
14.1
16.7
17.4
18.4
7.6
7.9
8,8
9.0
9.2
8.6
9.7
10.3
9.9
9.9
9.1
9.1
9.4
9.4
9.4
4.7
4.7
4.7
4.6
4.7
1955
1956
1957
1958
1959
165.1
169.6
178.0
185.8
202.2
98.2
102.9
110.4
115.9
124.4
11.2
10.6
11.0
13.9
17.7
18.6
19.3
20.3
20.2
21.8
9.6
8.3
8.3
7.6
9.3
10.0
10.5
10.0
9.9
9.8
9.4
9.5
9.4
9.5
10.0
1960
1961
1962
1963
1964
203.1
204.0
212.9
221.0
229.8
130.2
131.7
138.0
143.8
152.1
15.2
15.6
16.4
17.3
15.8
22.2
21.8
22.3
22.7
24.1
7.7
8.0
8.8
9.3
9.8
9.6
8.9
9.1
9.0
8.9
1965
1966
1967
1968
1969 v
238.5
256.0
269.8
283.5
297.9
160.9
172.5
182.5
193.7
202.7
14.5
17.5
18.9
18.7
25.5
9.2
27.1
9.7
28.9
10.0
31.0
9.5
72.4
8.6
8.6
8.4
8.5
1929
... .
1930
1931
1932
1933
1934
68.5
1935
1936
1937
1938
1939
1940
1941
1942
1943
1944
1945
1946
1947
1948..
1949
..
9.8
2.5
4.0
3.6
0.6
68 5
9.6
9.4
9.1
8.5
7.7
5.0
53.9
6.6
6.5
6.4
6.0
5.4
34
3.9
4.1
4.0
3.5
42 9
44.6
52.4
63.7
75.7
94.2
103.5
116.4
127.9
134.9
4.9
4.8
4.9
5.1
5.3
3.4
3.2
3.6
4.2
6.1
85.9
95.5
107.9
118.6
123.5
2.1
2.3
2.5
2.7
2.9
132.5
151.5
167.0
164.3
161.2
5.6
6.1
6.7
7.2
7.7
6.8
7.0
8.0
8.9
9.2
120.1
138.4
152.3
148.2
144.3
5.0
5.2
5.1
5.1
5.2
3.1
3.3
3.5
3.7
4.0
165.1
169.6
178.0
185.8
202.2
8.2
9.0
9.8
10.4
11.1
9.4
9.8
9.6
10 0
12.5
147.5
150.8
158.6
165.4
178.6
9.2
8.7
8.8
9.2
9.2
4.7
4.6
4.5
4.4
4.2
4.3
4.7
5.0
5.3
5.7
203.1
204.0
212.9
221.0
229.8
12.1
12.8
13.9
15.2
16.8
12.7
13.4
14.8
16.5
18.1
178.3
177.8
184.2
189.3
194.9
9.6
10.0
10.3
10.9
4.2
4.1
3,9
3.8
22.8
6.0
6.5
6.9
7.4
238.5
256.0
269.8
283.5
297.9
18.9
21.2
23.3
25.5
27.8
18.7
20 4
22.4
24.9
27.6
200.9
214 4
224.1
233.1
242.5
7.6
7.4
7.2
7.0
68
1
2
Beginning with 1961, horses and mules are excluded.
Includes all crops held on farms and crops held off farms by farmers as security for Commodity Credit Corporation
loans. The latter on January 1,1968, totaled $487 million.
Source: Department of Agriculture.
323
INTERNATIONAL STATISTICS
TABLE B-84.—United States balance of payments, 1946-68
[Millions of dollars]
Exports of goods and services
Imports of goods and services
Income on
investments
Year or
quarter
Total
Merchan'
dise i
Military
sales
Private
Government
Total
Other
services
Merchandise1
Military
expenditures
-5,073
-5,979
-7,563
-6,879
-493
-455
-799
-621
1946
1947
1948
1949
14,735
19,737
16,789
15,770
11,707
16,015
13,193
12,149
751
1,036
1,238
1,297
2,226
-6,991
-8,208
-10,349
-9,621
1950
1951
1952
1953
1954
13,807
18,744
17,992
16,947
17,759
10,117
14,123
13,319
12,281
12,799
1,484
1,684
1,624
2 1,658
182 1,955
109
198
204
252
272
2,097
2,739
2,845
2,564
2,551
-12,028
-15,073
-15,766
-16,561
-15,931
-9,108
-11,202
-10,838
-10,990
-10,354
1955
1956
1957
19581959
19,804
23,595
26,481
_ 23,067
23,489
14,280
17,379
19,390
16,264
16,295
200
161
375
300
302
2,170
2,468
2,612
2,538
2,694
274
194
205
307
349
2,880
3,393
3,899
3,658
3,849
-17,795
-19,628
-20,752
-20,861
-23,342
1960
1961
1962
1963
1964
27,325
28,609
30,343
32,432
37,098
19,487
19,944
20,606
22,071
25,297
335
402
656
657
747
3,001
3,561
3,948
4,151
4,930
348
381
471
498
456
4,155
4,320
4,661
5,055
5,668
-23,355
-23,151
-25,358
-26,620
-28,688
1965
1966
1967
19681°
39,196
43,142
45,756
50,219
26,244
830 5,384
29,176
829 5,659
30,468 1,240 6,235
33,452 1,431 6,819
21 2,256
66 2,620
102 2,256
Other
services
Balance
on
goods
and
services
Remittances
and
pensions
-1,425 7,744
-1,774 11,529
-1,987 6,440
-2,121 6,149
-648
-728
-631
-641
-576
-1,270
-2,054
-2,615
-2,642
-2,344
-2,601
-2,874
-2,956
-2,935
1,779
3,671
2,226
386
1,828
-533
-480
-571
-644
-633
-11,527
-12,804
-13,291
-12,952
-15,310
-2,901
-2,949
-3,216
-3,435
-3,107
-3,367
-3,875
-4,245
-4,474
-4,925
2,009
3,967
5,729
2,206
147
-597
-690
-729
-745
-815
-14,744
-14,522
-16,219
-17,014
-18,648
-3,087
-2,998
-3,105
-2,961
-2,876
-5,523
-5,631
-6,035
-6,645
-7,164
3,970
5,458
4,985
5,812
8,409
-697
-724
-779
-891
-896
-2,945 -7,834
-3,735 -8,787
-4,340 -9,658
-4,511 -10,293
6,901
5,080
4,768
2,395
-1,027
-1,015
-1,276
-1,136
509 6,229 -32,295 -21,516
593 6; 885 -38,063 -25,541
624 7,189 -40,989 -26,991
835 7,683 -47,824 -33,020
Seasonally adjusted annual rates
1966: I
II
III
IV...
42,112
42,580
43,648
44,236
1967: I
45,484
II
145,508
III
:46,052
IV.... 45,984
5,316
5,552
5,768
5,996
596
596
588
596
6,648
6,840
6,996
7,064
-36,080
-37,344
-39,112
-39,716
-24,144
-25,052
-26,268
-26,700
-3,488
-3,692
-3,848
-3,916
-8,448
-8,600
-8,996
-9,100
30,644 1,340 5,772
30,812 1,344 5,564
30,504
980 6,684
29,912 1,292 6,916
604
660
624
612
7,124
7,128
7,260
7,252
-40,312
-40,432
-40,616
-42, 592
-26,744
-26,420
-26,164
-28,636
-4,288
-4,260
-4,392
-4,416
-9,280
-9,752
-10,060
-9,540
1,048
1,568
1,432
1,052
792 7,552 -46,136 -31,468 -4,440 -10,228
884 7,680 -47,860 -33,280 -4,492 -10,088
828 7,816 —49,476 -34,312 -4,600 -10,564
1,064
1,144
1,200
28,752
28,716
29,476
29,760
800
876
820
820
47,440 31,696 1,224 6,176
1968: I
50,228 33,300 1,448 6,916
II
III *__ 52,988 35,360 1,620 7,364
See footnotes at end of table.
324
TABLE B-84.—United States balance of payments, 1946-68— Continued
[Millions of dollars]
Year or
quarter
U.S.
Government
grants
and
capital,
net 2
U.S. private capital,
net
Direct
investment
Other
longterm
Shortterm
Balance
Foreign
capital,
net 2
Errors
and
Offiunrecial
corded
l
reserve
transactions qu'dity3 transbasis
actions
basis *
Changes in selected liabilities (decrease ( - ) ) «
To foreign
official holders
Liquid
Nonliquid
Changes
in gold,
convertible currencies,
and
To
IMF
other
gold
foreign
tranche
holders 7 position
(increase
( ) )
1946....
1947....
1948....
1949....
-5,293
-6,121
-4,918
-5,649
-230
-749
-721
-660
127
-49
-69
-310
-189
-116
187
-615
-432
-361
44
218
949
1,193
786
993
4,210
817
136
-623
-3,315
-1,736
-266
1950....
1951....
1952....
1953....
1954....
-3,640
-3,191
-2,380
-2,055
-1,554
-621
-508
-852
-735
-667
-495
-437
-214
185
-320
-149
-103
-94
167
-635
181
540
52
146
249
-11
500
627
366
191
-3,489
1,758
-33
-415
1,256
480
1955....
1956....
1957....
1958....
1959-...
-2,211
-2,362
-2,574
-2, 587
-1,986
-241
-823
-1,951 - 6 0 3
-2,442 - 8 5 9
-1,181 -1,444
-1,372 - 9 2 6
-191
-517
-276
-311
-77
297
615
545
186
736
1960
1961
1962
1963....
1964—.
-2,768
-2,779
-3,013
-3,578
-3,564
-1,674
-1,598
-1,654
-1,976
-2,328
- 8 5 5 -1,349
-1,025 -1,556
-1,227
-546
-1,698 - 7 8 5
-2,103 -2,147
364
702
1,026
690
689
-892
-847
-997
-244
-860
-3,901 - 3 , 4 0 3
-2,371 j-1,347
-2,204-2,702
-2,670 - 2 , 0 1 1
-2,800-1,564
9 1,448
9 681
9 457
1,673
1,075
250
-39
318
308
1,084
214
620
1,554
2,145
606
1,533
377
171
1965....
1966....
1967-..
196810..
-3,370
-3,444
-4,211
-4,252
-3,468 -1,079
753
-3,623 - 2 5 6
-418
-3,020 -1,270 -1,214
-3,348 - 6 0 3 -1,280
270
2,531
3,185
7,448
-315
-210
-532
-304
-1,335 - 1 , 2 8 9
-1,357
266
-3,571 - 3 , 4 0 5
-1,080 1,888
-18
-1,595
2,062
85
761
1,291
131
2,384
1,457
1,222
568
52
-l,206L
-2,184.
-1,541
182
-869
-1,165
2,292
1,035
515 - 1 , 2 4 2
568 - 9 7 3
1,184
578
511 - 3 , 3 6 5
423 - 3 , 8 7 0
Seasonally adjusted annual rates
Quarterly totals unadjusted
- 7 9 2 1 - - 2 , 5 2 0 - -1,636
-580
-372
-464
924 - -1,204 2,768
- 4 0 8 - -1,332
396
-852
54
-598
-199
34
247
90
390
475
27
1,211
61
7
424
68
82
-6
-4,704 -2,612 -696 - 5 9 2
-4,156-2,604
-724 -1,088!
—3,952—3,608 -2,024 -1,520
-4,032-3,260 -1,636 -1,656
3,460 - 1 , 0 0 0 - -2,020 -7,056
4 , r " -1,832 - -2,088 -3,224
988
828 - -3,208!
3,064
- 6 , 9 6 8 - -4,328
1,412
-80
544
21
8
1,317
332
580
19
1
260
-709
95
1,306
765
1,027
-419
-375
-181
-800
-532
- 2 2 8 -1,424
- 7 8 0 -1,884|
5,468
-2,748'- -2,224
9,916 —972 - 6 5 6 6,112
6,960 -1,716
164 1,776
1,776
1,363
2,198
-44
369
772
524
718
2,263
1,065
904
-137
-571
1966: I —
II..
III..
IV.
-3,864' -2,780
-3,936-4,008
-2,992 -3,488
-2,988-4,216
1967: I..
II...
ML.
IV..
1968: I . . . -4,656-1,496
II... -4,288 -4,140
-3,812 -4,408
-988
-256
-28
244
-276
-192
-524
-680
1,112
4,340
1,500
3,184
jj
* Adjusted from customs data for differences in timing and coverage.
2
Includes certain special Government transactions.
s,
3 Equals changes in liquid liabilities to foreign official holders, other foreign holders, and changes in official reserve assets
<
consisting of gold, convertible currencies, and the U.S. gold tranche position in the IMF.
* Equals changes in liquid and nonliquid liabilities to foreign official holders and changes in official reserve assets consisting of gold, convertible currencies, and the U.S. gold tranche position in the IMF.
* Includes short-term official and banking liabilities, foreign holdings of U.S. Government bonds and notes, and certain
nonliquid liabilities to foreign official holders.
* Central banks, governments, and U.S. liabilities to the IMF arising from reversible gold sales to, and gold deposits with
the United States.
* Private holders; includes banks and international and regional organizations, excludes IMF.
8
Not reported separately.
9 Includes change in Treasury liabilities to certain foreign military agencies; excluding these changes, data ($ millions)
are 1,258 (1960), 741 (1961), 918 (1962).
10
Average for the first 3 quarters on a seasonally adjusted annual rates basis.
Note.—Data exclude military grant-aid and U.S. subscriptions to International Monetary Fund.
Source: Department of Commerce, Office of Business Economics.
325
TABLE B—85.—United States merchandise exports and imports, by commodity groups, 1958—68
[Millions of dollars]
Merchandise exports *
Total, including reexports 2
Merchandise imports
Domestic exports
General imports s
Year or quarter
Seasonally Unad- Total 2 4
adjusted
justed
Total*
Food, Crude
Food, Crude
bever- mate- Manbever- mateufacages,
rials
Seaages,
rials
tured
and to- and
and to- and
6 sonally Unadbacco fuels s goods
adjusted bacco fuels s
justed
Gross
merchandise
trade
surplus,
seaManufac- sonally
adtured
goods e justed ^
1958
1959
16,373 16,208
16,418 16,234
2,688
2,852
3,051 11,546
2,996 11,171
13,262
15,629
3,550
3,580
4,062
4,580
5,283
7,090
3,111
789
1960
1961
1962
1963
1964
19,635
20,190
20,973
22,427
25,690
19,434
19,944
20,703
22,143
25,338
3,167
3,466
3,743
4,188
4,637
3,942
3,863
3,355
3,774
4,336
12,559
12,748
13,655
14,259
16,388
15,019
14,716
16,392
17,140
18,684
3,392
3,455
3,674
3,863
4,022
4,380
4,303
4,640
4,692
4,976
6,847
6,523
7,626
8,066
9,096
4,616
5,474
4,581
5,287
7,006
26,699
29,379
30,934
34,000
26,356
28,944
30,550
33,600
4,520
5,186
4,710
4,600
4,274
4,403
4,722
4,800
17,388
19,108
20,752
23,800
21,366
25,542
26,812
33,000
4,013
4,589
4,701
5,400
5,385
5,674
5,334
6,000
11,238
14,413
15,712
20,400
5,333
3,837
4,122
1,000
;;E
1965
1966
1967
1968 s
1966* 1
II
III
IV
7,194
7,257
7,439
7,500
7,078
7,435
7,025
7,841
6,978
7,305
6,919
7,742
1,252
1,257
1,310
1,367
1,024
1,086
1,027
1,266
4,644
4,888
4,530
5,046
6,021
6,335
6,59?
6,661
5,894
6,334
6,5 5
6,769
1,112
1,165
1,112
1,200
1,410
1,438
1,456
1,370
3,184
3,517
3,765
3,947
1,173
921
847
839
1967- 1
II
III
IV
7,770
7,777
7,772
7,688
7,680
7,967
7,273
8,014
7,584
7,867
7,176
7,923
1,127
1,157
1,131
1,295
1,158
1,208
1,123
1,233
5,196
5,431
4,829
5,296
6,684
6,590
6,542
7,105
6,616
6,579
6,405
7,212
1,212
1,125
1,100
1,264
1,385
1,336
1,254
1,359
3,806
3,844
3,779
4,283
1,086
1,187
1,230
583
1968- 1
II
III
IV8
8,012
8,368
8,965
8,600
7,980
8,570
8,369
9,100
7,882
8,463
8,262
9,000
1,196
1,091
1,122
1,200
1,176
1,204
1,166
1,300
5,428
6,061
5,900
6,400
7,823
8,232
8,455
8,300
7,735
8,219
8,420
8,600
1,257
1,308
1,431
1,400
1,437
1,452
1,554
1,600
4,786
5,155
5,123
5,300
189
136
510
300
1
Beginning 1960, data have been adjusted for comparability with the revised commodity classifications effective in 1965
2
Totals exclude Department of Defense shipments of grant-aid military supplies and equipment under the Military
Assistance Program.
3
Total arrivals of imported goods other than intransit shipments.
4
Total includes commodities and transactions not classified according to kind.
6
Includes fats and oils.
6
Includes machinery, transportation equipment, chemicals, metals, and other manufactures. Export data for these items
include military grant-aid shipments.
7
Exports, excluding military grant-aid, less general imports; quarterly data seasonally adjusted.
8Totals based on data for October, November, and estimates for December.
Note.—Data are as reported by the Bureau of the Census. Export statistics cover all merchandise shipped from the U.S.
customs area, except supplies for U.S. Armed Forces. Export values are f.a.s. port of export and include shipments under
Agency for International Development and Food for Peace programs as well as other private relief shipments. I m p o r t
values are defined generally as the market value in the foreign country, excluding the U.S. import duty and transportation
costs such as ocean freight and marine insurance.
Source: Department of Commerce, Bureau of International Commerce.
326
TABLE B-86.—United States merchandise exports and imports, by area, 1962-68
[Millions of dollars]
Area
1962
1963
1964
1965
1966
1967
January-November
1967
Exports (including reexports
and special category shipments): Total
Developed countries
Developing countries
Canada
Other Western HemisphereWestern Europe i
Eastern Europe.
Asia
Australia and Oceania
Africa
..
General imports: Total
Developed countries
Developing countries
Canada
Other Western Hemisphere..
Western Europe1
Eastern Europe
Asia
Australia and Oceania
Africa
Unidentified countries2
1968
21,700
23,347
26,508
27,478
30,320
31,526
28,655
31,282
13,985
7,589
15,124
8,056
17,202
8,966
18,315
9,023
20,010
10,112
21,371
9,960
19,390
9,084
21,272
9,820
4,045
3,679
7,633
125
4,676
519
1,023
4,251
3,692
8,171
167
5,448
565
1,053
4,915
4,292
9,096
340
5,802
804
1,259
5,643
4,274
9,224
140
6,012
956
1,229
6,661
4,769
9,805
198
6,733
805
1,349
7,165
4,718
10,103
195
7,146
1,017
1,182
6,547
4,302
9,174
181
6,504
853
1,094
7,296
4,828
9,967
190
6,877
949
1,175
16,392
17,140
18,684
21,366
25, 542
26,812
24,381
30,093
10,250
6,035
10,807
6,242
11,894
6,676
14,067
7,145
17, 590
7,762
18,943
7,681
17,210
6,999
21,843
8,056
3,660
3,931
4,544
79
2,960
440
754
24
3,829
4,021
4,731
81
3,192
502
777
7
4,239
4,151
5,208
99
3,620
440
917
10
4,832
4,371
6,155
137
4,528
453
878
12
6,125
4,704
7,678
179
5,276
594
979
7
7,107
4,635
8,050
177
5,348
581
906
8
6,438
4,229
7,287
162
4,910
522
825
8
8,042
4,637
9,240
182
6,298
658
1,027
9
1
Includes Finland, Yugoslavia, Greece, and Turkey.
2 Consists of certain low-valued shipments and some uranium imports, not identified by country.
Note.—Developed countries include Canada, Western Europe, Japan, Australia, New Zealand, and the Republic of
South Africa. Developing countries include rest of the world except Communist areas in Eastern Europe and Asia and
unidentified countries.
Source: Department of Commerce, Bureau of International Commerce.
327
TABLE B-87.—United States overseas loans and grants, by type and area, fiscal years 1962-68
[Millions of dollars]
Type of program and fiscal
period
Total
Near
East
and
South
Asia
East
Asia
Other
and
nonregional
Latin
America
Vietnam
516
189
327
397
168
229
274
228
46
459
29
430
562
248
313
337
200
137
162
145
17
604
70
534
Africa
Europe
Total economic loans and grants
(net obligations and loan
authorizations): 1
1962-67 average
Loans
Grants
4,730
2,535
2,195
1,576
1,167
409
1,163
754
409
1968
4,749
2,604
2,145
1,279
1,066
212
1,362
874
488
347
*
347
444
*
444
4,538
4,445
1,576
1,279
1,163
1,362
347
444
446
468
397
337
167
21
442
534
678
976
245
348
273
393
11
4
53
64
27
48
60
113
8
7
2,297
1,891
764
440
557
496
278
304
226
230
209
116
2
*
261
304
196
270
108
148
20
50
11
3
21
26
16
25
17
18
3
1
376
570
80
174
178
301
26
28
27
49
65
18
365
490
71
89
235
307
25
26
8
18
26
49
1,388
1,398
720
652
151
228
69
140
157
185
139
148
101
3
95
178
62
103
10
15
1
4
9
2
3
18
46
Loans
Grants
_
Economic loans and grants to
less developed countries, by
program: 2
Net obligations and loan
authorizations:
1962-67 average
1968
Repayments and interest:
1962-67 average..
1968
Agency for International
Development:
Net obligations and loan
authorizations:
1962-67 average
1968
Repayments and interest:
1962-67 average
1968
Export-Import Bank long-term
loans:
Loan authorizations:
1962-67 average...
1968
---Repayments and interest:
1962-67 average
1968
Food for Freedom:
Obligations:
1962-67 average
1968
Repayments and interest:
1962—67 average
1968
Contributions and Subscriptions
to International Lending Organizations: 3
Obligations:
1962-67 average
1968
Peace Corps and other: 4
Obligations:
1962-67 average
1968
Repayments and interest:
1962—67 average
1968
241
424
51
42
79
124
162
300
236
162
12
13
115
36
37
25
22
24
50
64
22
39
5
8
9
21
3
3
1
1
6
6
*Some data are preliminary.
Countries have been classified "less developed" on the basis of the standard list of less developed countries used
by the Development Assistance Committee of the Organization for Economic Cooperation and Development. On this
basis, "less developed" countries include all countries receiving U.S. loans or grants except the following which are
considered "developed": Japan, Australia, New Zealand, Republic of South Africa, Canada, and all of Europe except
Malta, Spain and Yugoslavia.
3
Includes capital subscriptions and contributions to the Inter-American Development Bank, the International Development Association and the Asian Development Bank.
4
Data for certain programs from Department of Commerce (Office of Business Economics).
Source: Agency for International Development (except as noted).
328
TABLE B-88.—International reserves, 1949, 1953, and 1963-68
[Millions of dollars; end of period]
1968
Area and country
1949
1953
1964
1963
1965
1966
1967
September
December
All countries.
45,635
51,890
66,370
68,670
70,430
71,895
73,510
73,440
Developed a r e a s . . .
37,245
41,390
56,820
58,945
59,445
60,235
61,055
59,850
26,024
23,458
16,843
16,672
15,450
14,882
14,830
14,634
15,710
United Kingdom
1,752
2,670
3,147
2,316
3,004
3,100
2,695
2,717
2,422
Other Western Europe
Austria
Belgium..
France...
Germany
Italy
Netherlands
Scandinavian countries (Denmark,
Finland, Norway,
and Sweden)
Spain
Switzerland...
Othera.
6,457
92
978
580
196
10,515
325
1,144
829
1,773
768
1,232
29,413
1,229
1,970
4,908
7,650
3,619
2,102
32,279
1,317
2,222
5,724
7,882
3,824
2,349
33,583
1,311
2,334
6,343
7,429
4,800
2,416
34,950
1,333
2,350
6,733
8,028
4,910
2,448
1,026
150
1,768
1,500
1,875
1,147
3,074
1,839
2,380
1,513
3,120
1,948
2,324
1,409
3,244
1,973
2,340
1,205
3,324
2,278
2,236
1,049
3,555
2,306
2,451
1,120
2,932
2,394
1,902
2,603
2,881
3,027
2,693
2,709
2,727
892
2,058
2,019
2,152
2,119
2,030
2,380
United States-
(
537
&
1,222
Canada-
1,197
Japan...
Australia, New Zealand,
and South Africa
Less developed areas *
Latin America.
Middle E a s t . . .
Other Asia
Other A f r i c a . . .
36,448 34,469
1 484 1,538
2,590
2,416
6,994
4,374
8,152
9,189
5,463
5,584
2,619
2,471
1,510
2,187
4,201
2,463
2,320
3,932
2,906
(0
1,582
8,390
2,775
1,475
3,395
<290
1,952
2,756
2,777
2,228
2,494
2,341
2,921
10,500
9,550
9,725
10,985
11,660
12,455
13,590
3,400
1,200
3,840
1,800
2,725
2,255
3,085
1,405
2,855
2,320
3,070
1,415
3,280
2,675
3,395
1; 575
3,180
2,845
3,845
1,730
3,460
3,195
3,975
1,750
3,660
3,345
4,240
2,145
i Not available separately.
3 In addition to other Western European countries, includes unpublished gold reserves of Greece and an estimate of
gold to be distributed by the Tripartite Commission for the Restitution of Monetary Gold.
3 Includes unpublished gold holdings not allocable by area.
< Estimate.
Note.—Includes gold holdings, reserve positions in the International Monetary Fund, and foreign exchange of all countries
except U.S.S.R., other Eastern European countries, Communist China and Cuba (after 1960).
Beginning 1959, when most of the major currencies of the world became convertible, data exclude known holdings of
inconvertible currencies, balances under payments agreements, and the bilateral claims arising from liquidation of the
European Payments Union.
Source: International Monetary Fund, "International Financial Statistics."
329
TABLE B-89.—United States reserve assets: Gold stock, holdings of convertible foreign currencies,
and reserve position in the International Monetary Fund, 1946-68
[Millions of dollars]
Gold stock i
End of year or month
Total reserve
assets
Total*
Treasury
Convertible
foreign
currencies3
Reserve
position in
International
Monetary Fund4
1946
1947
1948
1949
20,706
24,021
25,758
26,024
20,706
22,868
24,399
24,563
20,529
22,754
24,244
24,427
1,153
1,359
1,461
1950
1951 _
1952
1953
1954
24,265
24,299
24.714
23,458
22 978
22,820
22,873
23,252
22,091
21 793
22,706
22,695
23,187
22,030
21 713
1,445
1,426
1,462
1,367
1 185
22,797
23,666
24,832
22,540
21,504
21,753
22 058
22,857
20,582
19,507
21,690
21,949
22,781
20,534
19,456
1,044
1,608
1,975
1,958
1,997
19,359
18,753
17,220
16,843
16,672
17,804
16,947
16,057
15,596
15,471
17,767
16,889
15,978
15,513
15,388
99
212
432
15,450
14,882
14,830
15,710
s 13,806
13 235
12,065
10,892
13,733
13,159
11,982
10,367
781
1 321
2,345
3,528
14,196
13,998
13,855
13,906
13,943
14,274
13,202
13,161
13,184
13,234
13;214
13,169
13,157
13,107
13,107
13,109
13,109
13,110
645
14,224
14,605
14,649
14,927
15,438
14,830
13,136
13,075
13,077
13,039
12,965
12,065
14,620
14,790
13,926
13,840
14,348
14,063
14,366
14,427
14,634
14,427
15,660
15,710
1955
1956
1957
1958
1959
.
...
1960
1961
1962
1963
1964
1965
1966
1967
1968
.
. . . .
1967: Jan...
Feb
Mar
Apr
_
May
June
July
Aug
Sept
Oct .
Nov
Dec
1968: Jan....
Feb
Mar.
Apr
May
June
July
Aug.
Sept
Oct
.
Nov
Dec
116
1,555
1,690
1,064
1,035
769
5 863
326
420
1,290
480
349
357
314
315
357
357
363
366
738
367
13,108
13,008
13,006
12,905
12,908
11,982
719
1,162
1,200
1,509
2,092
2,345
369
368
12,003
11,900
10,703
10,547
10,468
10,681
11,984
11,882
10,484
10,484
10,384
10,367
2,176
2,235
2,746
2,804
3,386
2,479
441
655
477
489
494
903
10,676
10,681
10,755
10,788
10,897
10,892
10,367
10,367
10,367
10,367
10,367
10,367
2,773
2,817
2,953
2,703
3,655
3,528
917
929
926
936
372
379
381
420
1,108
1,290
1 Includes gold sold to the United States by the International Monetary Fund with the right of repurchase which
amounted to $800 million on December 31, 1968. Beginning September 1965 also includes gold deposited by the IMF to
mitigate the impact on the U.S. gold stock of purchases by foreign countries for gold subscriptions on increased IMF
quotas. Amount outstanding was $230 million on December 31,1968. The United States has a corresponding gold liability
to 2the IMF.
Includes gold in Exchange Stabilization Fund.
3 Includes holdings of Treasury and Federal Reserve System.
4
In accordance with Fund policies the United States has the right to draw foreign currencies equivalent to its reserve
position in the Fund virtually automatically if needed. Under appropriate conditions the United States could draw additional amounts equal to the United States quota.
5
Reserve position includes, and gold stock excludes, $259 million gold subscription to the Fund in June 1965 for a U.S.
quota increase which became effective on February 23, 1966. In figures published by the Fund from June 1965 through
January 1966, this gold subscription was included in the U.S. gold stock and excluded from the reserve position.
Mote.—Gold held under earmark at Federal Reserve Banks for foreign and international accounts is not included in
the gold stock of the United States.
Sources: Treasury Department and Board of Governors of the Federal Reserve System.
330
TABLE B-90.—Price changes in international trade, 1960-68
11958=100]
1968
Area or commodity class
1961 1962 1963 1964 1965 1966 1967
1960
Third
quarter
Unit value indexes by area
Developed areas
Total:
100
103
101
104
101
105
102
104
103
104
104
104
106
104
106
105
105
105
101
101
103
105
102
107
102
105
103
104
106
106
107
105
112
108
113
108
99
95
97
93
95
95
97
97
97
97
97
99
97
98
97
98
97
93
95
Exports
Terms of trade i .
91
93
94
97
101
103
101
102
103
103
101
100
3 102
3 99
104
104
101
102
102
102
103
100
104
100
106
103
99
99
3 99
3 100
11
0
100
98
97
99
96
84
107
81
109
81
106
98
97
16
0
155
108
178
97
101
98
71
95
104
19
0
13
6
91
101
93
71
96
110
15
0
105
106
115
99
97
110
United States »
Exports
Terms of trade 1.
Developing areas
Total:
Exports
Terms of trade 1.
Latin America
Exports
Terms of trade 1.
Southern and Eastern Asia <
111
109
Exports
Terms of traded
World export price indexes «
Foodstuffs
Coffee, tea, and cocoaCereals
Other agricultural commodities *
Fats, oils, and oilseeds..
Textile fibers
Wool
Rubber
Minerals
Metal ores..
8
Manufactured goods: Total ...
Nonferrous base metals 8_.
100
13
0
100
90
94
90
13
0
72
98
70
103
99
80
101
107
94
104
108
141
13
0
97
105
107
107
99
73
102
13
0
95
112
127
95
16
0
87
105
105
104
92
100
12
0
110
98
116
131
91
94
104
104
15
3
108
105
110
93
93
Primary commodities: Total.
97
95
91
77
96
101
114
89
101
106
102
92
99
12
0
19
0
92
96
13
0
110
1 Terms of trade indexes are unit value indexes of exports divided by unit value indexes of imports.
2 Includes foreign trade of Alaska, Hawaii, and Puerto Rico.
3 Data are for second quarter 1968.
* Excludes Japan.
« Data for manufactured goods are unit value indexes,
e Includes nonfood fish and forest products.
Note.—Data exclude trade of Communist areas in Eastern Europe (except Yugoslavia) and Asia.
Sources: United Nations and Department of Commerce (Bureau of International Commerce).
331
95
104
109
162
TABLE B-91.—Consumer price indexes in the United States and other major industrial countries
1957-68
11963==100]
United
States
Period
Canada
Japan
France
Germany
Netherlands
Italy
United
Kingdom
1957
1958..
1959
91.8
94.4
95.1
91.7
94.1
95.1
79.3
78.9
79.8
69.6
80.1
85.0
88.1
90.0
90.9
83.2
85.5
85.1
88
90
91
86.9
89 5
90.0
1960 .
1961
1962
1963-_
1964
96.6
97.7
98.8
100.0
101.3
96.2
97.1
98.3
100.0
101.8
82.6
87.0
93.0
100.0
103.9
88.1
91.0
95.4
100.0
103.4
92.1
94.3
97.1
100.0
102.3
87.1
88.9
93.1
100.0
105.9
94
95
97
100
106
90.9
94.0
98.0
100.0
103.3
103.0
106.0
109.0
113.3
104.3
108.2
112.0
116.3
110.7
116.4
121.0
127.0
106.0
108.9
111.8
116.4
105.8
109.5
111.1
112.5
110.7
113.3
116.9
118.4
111
118
121
125
108 2
112.4
115.2
120.1
1965: 1.
II. _
III . .
IV
102 1
102.8
103.2
103.7
103 1
103.9
104.8
105.3
108.6
110.8
110.8
112.9
105.0
106.1
106.3
106.9
104.1
105.4
106.5
107.1
109.5
110.1
111.2
111.9
108
113
112
112
105 8
108.5
108.9
109.6
1966: L
II ._
Ill
IV
104 5
105.6
106.6
107.4
106 7
107.9
108.9
109.5
114 9
116.4
116.5
117.6
107 7
108.5
109.2
109.8
108.5
109.8
109.6
110.1
112.7
113.0
113.3
114.2
116
120
118
118
110-4
112.5
112.9
113.8
1967: 1
II
III
IV
107.6
108.4
109.5
110.4
109.9
111.5
113.2
113.6
119.8
119.7
120.2
124.1
110.8
111.2
111.9
113.5
110.9
111.5
111.2
110.8
115.9
116.6
117.5
117.9
119
123
122
122
114.4
115.4
114.8
116.2
1968: 1
II
Ill
IV 2
111.6
112.8
114.2
115.5
114.9
116.0
117.3
117.9
126.2
126.4
127.4
129.8
115.1
115.8
117.2
119.2
112.3
112.5
112.5
112.9
118.2
118.5
118.3
118.5
124
125
126
117.8
120.6
121.3
122.0
1965
1966
1967
1968 !
...
_
1 Averages for January-November for the United States; January-September for the Netherlands; and January-October
for all other countries.
2 October-November average for the United States and October data for ail other countries.
Sources: Department of Labor and Organization for Economic Cooperation and Development.
332
U.S. GOVERNMENT PRINTING OFFICE: 1969
O—323-166
