Full text of Economic Report of the President : 1971
The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
ECONOMIC
TRANSMITTED
TO THE CONGRESS
FEBRUARY 1971
Economic Report
of the President
Transmitted to the Congress
February 1971
TOGETHER WITH
THE ANNUAL REPORT
OF THE
COUNCIL OF ECONOMIC ADVISERS
UNITED STATES GOVERNMENT PRINTING OFFICE
?N
: 1971
For sale by the Sup^iiit^iiSl^^^vrrileHiis, U.S. Government Printing Office
l^i^l-ftX. iu62 - Price $1.50
LIBRARY
CONTENTS
Page
ECONOMIC REPORT OF THE PRESIDENT
1
T H E DUAL TRANSITION OF 1970
4
T H E ROAD TO ORDERLY EXPANSION
5
PRICE STABILITY AND FULL PROSPERITY
7
ANNUAL REPORT OF THE COUNCIL OF ECONOMIC
ADVISERS*
11
A QUARTER CENTURY OF THE EMPLOYMENT ACT OF 1946
19
CHAPTER 1. T H E RECORD OF 1970
23
CHAPTER 2. OUTLOOK AND POLICY
75
CHAPTER 3. NATIONAL PRIORITIES AND THE NATIONAL O U T P U T . . .
86
CHAPTER 4. ECONOMIC GROWTH AND THE EFFICIENT USE OF R E SOURCES
107
CHAPTER 5. T H E UNITED STATES IN THE INTERNATIONAL ECONOMY. .
138
APPENDIX A. CORPORATE LIQUIDITY IN 1969 AND 1970
165
APPENDIX B. REPORT TO THE PRESIDENT ON THE ACTIVITIES OF THE
COUNCIL OF ECONOMIC ADVISERS DURING 1970
APPENDIX C. STATISTICAL TABLES RELATING TO INCOME, EMPLOYMENT, AND PRODUCTION
*For a detailed table of contents of the Council's Report, see page 15.
Ill
179
191
ECONOMIC REPORT
OF THE PRESIDENT
ECONOMIC REPORT OF THE PRESIDENT
To the Congress of the United States:
1970 was the year in which we paid for the excesses of 1966, 1967,
and 1968, when Federal spending went $40 billion beyond full employment revenues. But we are nearing the end of these payments, and 1971
will be a better year, leading to a good year in 1972—and to a new
steadiness of expansion in the years beyond.
We are facing the greatest economic test of the postwar era. It is a
test of our ability to root out inflation without consigning our free economy to the stagnation of unemployment. We will pass that test. But it is
a real test and we shall pass it only by doing all we are capable of
doing.
The key to economic policy in 1971 is orderly expansion. While continuing to reduce the rate of inflation, total spending and total output
should rise as rapidly as possible to lift the economy to full employment
and full production. Fiscal policy must play its full and responsible role,
and the economy's course in the year ahead will also reflect the extent
to which the monetary and credit needs of economic expansion are
met. With the stimulus and discipline from the budget that I have put
forward, and with the Federal Reserve System providing fully for the
monetary needs of the economy, we can look forward confidently to
vigorous and orderly expansion during 1971.
At the same time we must be relentless in our efforts toward the
greater stability of costs and prices that is the foundation for an enduring and full prosperity. Much has already been accomplished. Prices
in the market place have been rising less rapidly, and some that usually
change early have actually declined, responding to changing pressures
in the market.
In some cases the response of costs and prices has been slow, as the
result of insulation from market forces. Often these market problems
have been created by the Government itself. Accordingly, the Government has a responsibility to prevent misuses and imbalances of market
power which impede orderly operation of our free economic system.
This Administration intends to carry out that responsibility fully and
fairly.
To get the economy rising at the right rate, neither too rapidly nor too
slowly, is never an easy task. Economic policy does not operate with the
precision needed to keep the economy exactly on a narrow path. But
fortunately absolute precision is not required. What is required is that
we operate within a range where both unemployment and inflation are
moving unmistakably downward toward our goal. The full resources of
Government, with the understanding and cooperation of the citizens, can
accomplish that.
THE DUAL TRANSITION OF 1970
Faced with one of the largest inflations in American history we have
sought first to stop its rate from speeding up and then to get the rate
down. This has been done. The annual rate of increase of the consumer
price index, which was 6.0 percent from June 1969 to June 1970, dropped
to 4.6 percent in the last half of 1970. Wholesale prices, which usually
move before the prices consumers pay, have slowed down even more,
from a 5.3 percent rate in the first half of 1969 to a 2.1 percent rate in
the second half of 1970. Because productivity began to rise, after earlier
sluggishness, labor costs per unit of output rose much less in 1970 than
they did in 1969, and this contributed to slower price increases.
While the Nation was making the transition to a less inflationary
economy it was also making the transition to a lower level of defense
spending. Men released from the Armed Forces have been out of touch
with the civilian labor market and need time to readjust. Workers laid off
from defense production are likely to be concentrated in particular areas,
which are often not the areas where nondefense activity is expanding.
Their curtailed purchasing power further tends to lower employment of
others in their area. During 1970, the number of persons in military and
civilian employment for defense was reduced by about 1 million. Most of
these people have found work, and others will soon do so. But during the
transition many were unemployed, and their number added to the total
unemployment rate.
These two simultaneous transitions, from a wartime to a peacetime
economy and from a higher to a lower rate of inflation, would inevitably
be accompanied by some decline in output and rise in unemployment.
The aim of our policy was to keep the decline in output and the rise in
unemployment as small as possible.
Fiscal and monetary policy both became more expansive early in 1970,
in order to get output rising again while the cost of living slowed its
rise. This result was achieved. Total output declined only 1 percent from
its high reached in the third quarter of 1969 to the first quarter of 1970;
it leveled out in the second quarter and rose in the third. Fourth-quarter
output was held down by the auto strike; without it, another increase
would have been shown.
The timely shift of policy limited the decline of output; it also
helped counter the increase in unemployment caused by the dual transition. The average unemployment rate for the year was 4.9 percent. At
the end of the year, partly as a result of the auto strike, the unemployment rate was about 6 percent. About half of the unemployed had been
without work for less than 6 weeks. Most of the unemployed who had lost
their most recent job were receiving unemployment compensation.
THE ROAD TO ORDERLY EXPANSION
Our first task now must be to assure more rapid expansion and so to
reduce the unemployment rate. We are now in a position to do that, while
the progress against inflation continues. The restraint of 1969 and the
slowdown of 1970 have set in motion strenuous efforts at cost reduction.
These actions, as the pace of the economy quickens, will bear fruit in
better productivity and costs. Prices have begun to rise less rapidly. There
are the first faint signs of a retardation in wage increases in some sectors.
Much of the anti-inflationary effect of the 1970 slowdown still has to be
felt. And if the expansion is properly controlled in 1971 the conditions
for further slackening of the inflation rate will remain. The expectation
of continued rapid inflation has been weakened by the firm policies of the
past 2 years and we must strengthen this growing confidence in the future
value of money.
Forces now present in the economy, partly resulting from policies of
1970, make economic expansion in 1971 probable.
—The greater supply and lower cost of mortgage money has
stimulated a 40-percent increase in the rate at which construction of new houses is started.
—Improved financial conditions are leading to a strong increase
of State and local spending.
—Interest rates have dropped; the prime rate is down sharply
from its peak of 8 ^ percent.
—Consumers' after-tax incomes have increased and their saving has
been high.
—In the early part of 1971 the economy will get a boost as the
production lost during last year's auto strike is made up.
—Exports have been strong, and in 1970 were 14 percent above
those of a year earlier.
These are powerful upward pressures, but existing and foreseeable expansionary forces in the economy are not strong enough to assure that
output will rise as much as is desired and feasible. These forces must,
therefore, be supplemented by expansive fiscal and monetary policies.
The full employment budget that I have submitted will do its full
share in stimulating a solid expansion. Outlays will rise by $16/ 2 billion, or about ll/2 percent, between the current fiscal year and the next—
appropriate for orderly expansion, but far short of the inflationary 15
percent average annual increases from 1965 to 1968. In addition, receipts have been reduced $2.7 billion by the depreciation reform which
I have initiated to stimulate investment, jobs, and growth.
In fiscal 1971, the Federal Government will spend $212.8 billion,
which is equivalent to the revenues the economy would be generating at
full capacity. The actual deficit is expected to be $18/2 billion. In fiscal
1972, also, the planned expenditures are equivalent to the revenues we
would get at full employment. How big the actual deficit will be next year,
in fiscal 1972, will depend on economic conditions. If the economy follows
the expected path of a vigorous, noninflationary expansion, the deficit
will decline to $111/2 billion. This combination of deficits is appropriate
to the situation through which the economy has been passing. The budget
moved into deficit during calendar 1970 as the economy lagged below its
potential. Accepting this deficit helped to keep the decline in the economy moderate. It was a policy of not subjecting individuals and businesses to higher tax rates, and of not cutting back Federal spending,
when the economy is weak because such actions would have weakened
economic conditions further.
To say that deficits are appropriate in certain conditions is not to
say that deficits are always appropriate or that the size of the deficit is
ever a matter of indifference. Such a policy of free-for-all deficit financing
would be an invitation to inflation and to wasteful spending.
As I stated last June, we need to abide by a principle of budget policy
which permits flexibility in the budget and yet limits the inevitable
tendency to wasteful and inflationary action. The useful and realistic
principle of the full employment budget is that, except in emergencies,
expenditures should not exceed the revenues that the tax system would
yield when the economy is operating at full employment. The budget for
fiscal 1972 follows this principle.
Balancing the budget at full employment does not deny or conceal
the deficit that will exist this year and almost certainly next year. It does,
however, avoid large deficits when they would be inflationary, like
the swing to a big deficit in fiscal 1968. It means that even when the
economy is low we must not allow our expenditures to outrun the
revenue-producing capacity of the tax system, piling up the prospect of
dangerous deficits in the future when the economy is operating at a high
level. Moreover, to say that expenditures must not exceed the full employment revenues draws a clear line beyond which we must not raise the
budget unless we are willing to pay more taxes. This is an irreplaceable
test of the justification for spending. It keeps fiscal discipline at the center
of budget decisions.
Fiscal policy should do its share in promoting economic expansion, and
our proposed budget would do that. But fiscal policy cannot undertake
the responsibility of doing by itself everything needed for economic
expansion in the near future. To try to do that would drive taxes and
expenditures off the course that is needed for the longer run. The task
of economic stabilization must be accomplished by a concert of economic
policies. The combined use of these policies, starting near the beginning of 1969, finally checked the accelerating inflation that had kept the
economy overheated for years. A turn of fiscal and monetary policies in
a more expansive direction at the beginning of 1970 limited the economic
decline and initiated an upturn. Concerted policies of expansion are
needed now to lift the economy fast enough to make rapid progress
toward full employment, and these needs will be fully met.
PRICE STABILITY AND FULL PROSPERITY
In a fundamental sense, as I have always emphasized, the control of
inflation and the achievement of full employment are mutually supporting, not conflicting, goals. Nothing would contribute more to the new
expansion than confidence that the threat of inflation is fading. As part
of my program of expansion I propose to justify that confidence.
The basic conditions to bring about a simultaneous reduction of un' employment and inflation are coming into being. We are going to continue to slow down the rate of inflation in the middle of an orderly
expansion. And we are going to do it by relying upon free markets and
strengthening them, not by suppressing them. Free prices and wages are
the heart of our economic system; we should not stop them from working
even to cure an inflationary fever. I do not intend to impose wage and
price controls which would substitute new, growing and more vexatious
problems for the problems of inflation. Neither do I intend to rely upon
an elaborate facade that seems to be wage and price control but is not.
Instead, I intend to use all the effective and legitimate powers of
Government to unleash and strengthen those forces of the free market
that hold prices down. This is a policy of action, but not a policy of action
for action's sake.
The process of reducing inflation is a process of learning. Business and
labor must learn a pattern of behavior different from the one they have
learned and practiced during the inflationary boom. Labor contracts and
price lists cannot embody the expectation that prices will continue rising
at the peak rates of recent years. Businesses cannot expect to pass all cost
increases along in higher prices. The ritual of periodic increases in prices
has no place in an economy moving toward greater stability.
These lessons are being learned. Most of all they are being taught by
the facts of economic life today. Consumers are already imposing stern
discipline in markets where sellers have not begun to adapt their pricing
to the new, less-inflationary conditions of the economy.
But there are cases where these lessons are not being learned and
actions have been taken or are under review. In those cases the Government will act to correct the conditions which give rise to excessive price
and wage increases.
Actions were taken to augment the supply of lumber, and to deal with
domestic copper prices that were out of line with world markets. To
restrain increases in the price of crude oil, this Administration took steps
to permit greater production on Federal offshore leases and to increase
oil imports. Faced with inflationary price increases for some steel products, I have ordered a review of the conditions which permit or cause
such increases, and threaten jobs in steel-using industries.
We have been particularly concerned with increases in the costs of
construction. It is now more critical than ever to check inflationary
wage and price increases in an industry where unemployment is high.
The 1972 Budget provides for a large increase in construction expenditures. This should support increased employment in construction, but
will do so only if the larger appropriations are not eaten up by higher
wages and other costs. I have asked the leaders of labor unions and
contractors in the industry to propose a plan for bringing the behavior
of construction wages, costs, and prices into line with the requirements
of national economic policy. A workable voluntary plan will avert the
need for Government action.
Those of us who value the free market system most cannot disregard
the cases where it is being kept from working well. In some of these cases
it is Government which limits the free market's effectiveness and Government has the means to make it work better. We must constantly review
our economic institutions to see where the competitive market mechanism that has served us so well can replace restrictive arrangements
originally introduced in response to conditions that no longer exist.
We must also devise efficient solutions to problems that have become
more urgent recently, such as those of pollution and adequate health
8
care. Where inadequate market arrangements are delaying our advance
toward full employment with price stability, we have a responsibility
now to correct them.
In our market-oriented policy, our domestic goals and our international goals are interrelated. Success in our struggle against inflation will help to safeguard our international economic strength, and
allow our highly productive enterprises and workers to compete in world
j markets. The liberal policy with respect to international trade to which
this Administration is committed will help keep price increases in check
here while giving our farms, factories, and banks a profitable market
abroad. At the same time we have to make sure that the burden of adjustment to changing conditions in world markets does not fall entirely
on a few exposed industries.
With the cooperation of the private sector, an expansionary public
economic policy will achieve a goal we have not seen in the American
economy in many years: full prosperity without war, full prosperity
without inflation.
In the record of progress toward that new prosperity, I am convinced
that economic historians of the future will regard 1970 as a necessarily
difficult year of turnaround—but a year that set the stage for strong and
orderly expansion.
February 1, 197 L
THE ANNUAL REPORT
OF THE
COUNCIL OF ECONOMIC ADVISERS
11
LETTER OF TRANSMITTAL
COUNCIL OF ECONOMIC ADVISERS,
Washington, D.C., January 30, 1971.
T H E PRESIDENT:
SIR: The Council of Economic Advisers herewith submits its Annual
Report, February 1971, in accordance with Section 4(c) (2) of the Employment Act of 1946.
Respectfully,
PAUL W.
MCCRACKEN,
Chairman.
HENDRIK S. HOUTHAKKER.
HERBERT STEIN.
411-364 O—71
CONTENTS
Page
A Quarter Century of the Employment Act of 1946. .
CHAPTER 1. T H E RECORD OF 1970
23
Demand Patterns
Consumer Income and Spending
Business Fixed Investment
Inventory Investment
Housing
State and Local Government Purchases
The Fourth Quarter of 1970
Output, Employment, and Unemployment
Employment and Unemployment
Defense Spending and Employment
Prices and Wages
.....
Prices, Costs, Wages, and Productivity
Consumer Prices
Wholesale Prices—Industrial
Farm Prices
Wages and Compensation
Why Is the Inflation So Stubborn?
Wage-Price Policy
Financial Developments in 1970
Financial Intermediation and the Mortgage Market
The Stock Market
Liquidity Squeeze
Appendix: Measures of Changes in Fiscal Policy
CHAPTER 2. OUTLOOK AND POLICY
28
29
32
33
33
34
34
36
37
42
49
49
51
54
55
57
60
62
63
66
68
68
70
75
The Unemployment-Inflation Dilemma
The Goals of Policy
Improving the Unemployment-Inflation Choice
The Path of the Economy in 1971
CHAPTER 3. NATIONAL PRIORITIES AND THE NATIONAL OUTPUT. . . .
Introduction
Taxes and Growth
The National Commission on Productivity
Economic Growth and National Priorities
Future National Output and Claims Upon It
Allocation of the National Output Among Functions
Conclusion
Appendix: Definitions of Functional Components
19
15
75
77
78
82
86
86
90
91
92
94
98
103
104
CHAPTER
4.
ECONOMIC GROWTH
AND THE
EFFICIENT
USE
OF
RESOURCES
Page
107
Population Growth and Economic Growth
Growth and Size: Implications
Population Distribution
Safeguarding the Environment
Social Role of Property Rights
Transportation
Surface Freight Transportation
Rail Passenger Service.
Air Transportation
Natural Resources
Energy
Timber Resources
Health Care
The Supply of Medical Services
Increases of Medical Care Prices
Who Pays the Bills
108
109
Ill
114
115
122
123
128
128
130
130
134
135
135
136
136
CHAPTER 5. T H E UNITED STATES IN THE INTERNATIONAL ECONOMY.
138
Domestic Economic Conditions and the Balance of Payments.
Current Account
Capital Flows and Monetary Conditions
Overall Deficit
Managing Capital Movements
The United States in the International Monetary System
Measures of the U.S. Balance-of-Payments Position
Adjustments in International Trade
U.S. Trade Policy
Regional Trading Arrangements
Enlargement of the European Economic Community
(EEC)
Generalized Tariff Preferences for Lower Income Countries
Aiding Development in Lower Income Countries
Foreign Assistance
Private Capital Flows
Relationships Among International Economic Policies
139
139
141
142
143
146
146
154
154
158
159
160
161
161
163
164
APPENDIXES :
A.
B.
C.
Corporate Liquidity in 1969 and 1970
Report to the President on the Activities of the Council of
Economic Advisers During 1970
Statistical Tables Relating to Income, Employment, and
Production
16
165
179
191
List of Tables and Charts
Tables
Page
1. Federal Government Receipts and Expenditures, National Income Accounts Basis, 1969-70
24
2. Changes in Gross National Product, by Component, 1967 III
to 1970 III
29
3. Changes in Personal Income, Taxes, Disposable Income, and
Consumption, 1967 III to 1970 III
30
4. Personal Saving and Alternative Measures of Saving, 1965-70.
31
5. Changes in Auto and Other Gross National Product During
1970
35
6. Changes in Real Gross National Product, 1967 III to 1970 I I I .
36
7. Selected Unemployment Rates, 1961-70
40
8. Employment Status of Persons 16-21 Years of Age in the
Civilian Noninstitutional Population, 1969-70
41
9. Unemployment and Unemployment Rates in Selected Occupational and Industry Groups, 1969 III and 1970 III
42
10. Employment Attributable to Department of Defense Expenditures and Personnel Requirements, 1965 and 1968-71
44
11. Private Nonagricultural Employment Attributable to Vietnam
in Fiscal Year 1968, and Employment Changes From 1968
III to 1970 III
45
12. Civilian Employment Attributable to Defense Expenditures,
by Occupational Group, Fiscal Year 1968
46
13. Civilian Employment Attributable to Defense Expenditures
for Selected Narrow Occupational Categories, Fiscal Year
1968
46
14. Geographical Distribution of Employment Reductions in
Defense-Related Manufacturing Industries, December 1967
to June 1970
47
15. Changes in GNP Deflators (Total and Excluding Autos) and
in Real Gross Auto Product, 1969 1-1970 IV
49
16. Alternative Measures of Price Changes for Gross National
Product, 1969 1-1970 IV
50
17. Changes in Costs and Prices in the Total Private Nonfarm
Economy and in Nonfinancial Corporations, 1967 III to 1970
III
51
18. Changes in Consumer Prices, 1969-70
52
19. Changes in Wholesale Prices, 1969-70
55
20. Increases in Average Gross Hourly Earnings of Private Nonagricultural Production or Nonsupervisory Workers, 196070
57
21. Wage and Benefit Decisions, 1965-70
58
22. First-Year Changes in Wage Rates in Collective Bargaining
Agreements Covering 1,000 Workers or More Negotiated in
the First 9 Months of 1970
59
Page
23.
24.
25.
26.
27.
28.
29.
30.
31.
32.
33.
34.
Funds Raised in Credit Markets by Nonfinancial Sectors, 196970
Flows of Savings Deposits Through Savings Institutions, 196970
The Full Employment Receipts and Expenditures Estimates,
National Income Accounts Basis, 1960-70
Real Gross National Product, 1955, 1966, and 1969, and Projections for 1975-76
Projections of Federal Government Expenditures, National
Income Accounts Basis, 1975-76
Percentage Distribution of GNP in Current Prices, by Function, 1955, 1966, and 1969
Percentage Distribution of Total Federal Government Expenditures by Function, 1955, 1966, and 1969
Total Direct and Indirect Federal Government Expenditures
as Percent of Output Used, by Function, 1955, 1966, and
1969
Total Direct and Indirect Federal and State and Local Government Expenditures as Percent of Output Used, by
Function, 1955, 1966, and 1969
Composition of U.S. Exports and Imports, by Major Categories, 1965-70
U.S. Balance of Payments, 1961-70
Percent of Private Employment Related to U.S. Merchandise
Exports, 1960, 1965, and 1969
Charts
1. Changes in GNP, Money Stock, and Full Employment Surplus.
2. Comparison of Projected and Actual GNP, Prices, and Unemployment Rate
3. Unemployment Rate
4. Changes in Consumer Prices
5. Changes in Wholesale Prices
6. Interest Rates
7. Growth in Real GNP, Total and Per Capita
8. Population Density by Counties, 1970
18
66
66
73
95
95
99
100
101
101
139
148
157
25
28
38
53
56
65
109
112
A Quarter Century of the Employment Act
of 1946
MEET TO CONSIDER what I profoundly believe to be as important a proposal as any before the Congress within my memory."
With these words Senator Wagner of New York, on July 30, 1945, convened
the subcommittee of the Senate Banking and Currency Committee to begin
hearings on S. 380, "The Full Employment Act of 1945." In February 1946,
a quarter of a century ago this month, President Truman signed into law
the "Employment Act of 1946." The 25th anniversary of that Act provides
a useful opportunity to look at the road that we have been traveling and
where we may be going.
The Employment Act of 1946 made two major contributions to the
management of economic policy. Section 2 explicitly declares the objectives
of national economic policy, the most familiar passage of that section
being the last eight words: "to promote maximum employment, production, and purchasing power." More than a hundred other words in this
one-sentence statement concern national economic objectives and they are
all important. Economic programs and policies, for example, are to be consistent with "other essential considerations of national policy" and all are to
be carried out by means "calculated to foster and promote free competitive
enterprise and the general welfare. . . ." While the closing words are the
most widely quoted of Section 2, the framers of the Act did not ignore the
complex nature of our economic objectives and the fact that we must strive
for an optimum balance among competing objectives, since the single-minded
pursuit of one would inevitably mean sacrifices elsewhere.
The Employment Act of 1946 also provided for some additions to the
structure and activities of Government. It created the Joint Economic
Committee of the Congress as well as the Council of Economic Advisers
in the Executive Office of the President. During the quarter of a century
that this structure has been in operation, 58 Members of the Senate and
House (including the present Committee members) have served on the
Joint Economic Committee. Mr. Patman of Texas, alternating Chairman of
the Committee, played a major role and was floor manager for the bill in
the House; and Senator Fulbright of Arkansas, a present member of the
Joint Economic Committee, was a member of Senator Wagner's subcommittee that conducted the initial hearings. Two of the present members
have served on the Joint Economic Committee since its inception. During
19
this period 25 of the Nation's economists have served as Members of the
Council of Economic Advisers under five Presidents. There have been eight
Chairmen of the Council, five of whom had previously served as Members.
Have this structure and the operations that have evolved within it made
any significant impact on policy? Considering their nature, this is a reasonable question. The Joint Economic Committee does not have legislative
functions: proposed legislation that deals with the building blocks of economic policy is handled by other committees of the Congress. The Council of Economic Advisers is one of the smallest agencies in the Federal
Government. It advises; it does not manage. On almost any issue of economic policy another senior official of the Administration will have immediate responsibilities—the Secretary of the Treasury for taxes, the Secretary of Agriculture for farm policy, the Director of the Office of Management and Budget for expenditure policy.
Even so the Joint Economic Committee and the Council of Economic
Advisers have clearly influenced Government policy. To some extent this
result was planned by those who framed the Act. They did not leave entirely to chance and the evolution of experience the responsibilities for
implementing Section 2. They also added Sections 3, 4, and 5, which set
up some quite explicit responsibilities. They call, for example, on the President to transmit each year an economic report that sets forth such matters as
current and foreseeable trends in employment, production, and purchasing power and outlines a program for carrying out the policy declared in
Section 2. They direct the Council, among other things, "to appraise the
various programs and activities of the Federal Government in the light of
the policy declared in Section 2 for the purpose of determining the extent
to which such programs and activities are contributing, and the extent
to which they are not contributing, to the achievement of such policy and
to make recommendations to the President with respect thereto. . . ." They
call on the Joint Economic Committee to make a continuing study of programs and their coordination and to report to the Congress. And the Act
calls for cooperation among all groups in our society in attaining these
objectives.
Within this general framework a substantial complex of activities has
emerged. For one thing the Joint Economic Committee has come to be one
of the major, ongoing, national seminars on economic policy. Witnesses at
its hearings include Government officials, a wide range of scholars from the
universities, leaders of unions and businesses, and students of economic policy
from abroad. The membership of this Committee includes chairmen and
senior members of major legislative committees; and the published Proceedings of Hearings and other Committee publications have had a marked
influence on national thinking about public policy and have increased the
understanding in government and public circles of the problems and issues
of economic policy and economic performance.
20
The Council of Economic Advisers has also had a pervasive influence
in shaping policy. Through it the discipline of economic thinking has been
introduced at a level where it directly affects decisions. While Government
agencies have long had economists, the Council of Economic Advisers is an
agency in which economists are the principals. Though small, it reports directly to the President. And having no particular constituency it can look
at the broader public interest. The Council assists in the preparation of the
President's Economic Report, which has become the major statement
of national economic developments, programs, and policies. The requirement to submit an annual economic report subjects the Administration to
the discipline of specifying its targets and appraising the adequacy of its
policies for reaching the targets.
Have the results of efforts by these two bodies shown up in the performance of the economy during this quarter of a century? In employment the
performance has been reasonably good. The unemployment rate during
the past 25 years has averaged 4.6 percent, and the highest yearly rate was
6.8 percent in 1958. In the 25 years before the war, ending with 1940, the
average unemployment rate was 10.9 percent, and its peak was 24.9 percent
in 1933. This 25-year period includes the Great Depression, however, which
dominates the record. If we look at the quarter of a century before the
Great Depression, ending with 1929, the average was 4.7 percent, the
highest unemployment rate was 11.7 percent in 1921, and in three other
years (1908, 1914, and 1915) the 1958 rate was exceeded. This suggests
that we have not appreciably reduced the incidence of small departures
from maximum employment but that we have reduced the incidence of
large departures, which is just what one would expect aggregate economic
policy to be able to do.
During the quarter of a century since World War II, the goods and
services made available to each consumer increased by 62 percent in real
terms, and our stock of productive capital has increased by close to $800
billion (in 1970 prices). In the quarter of a century ending with 1929 the
per capita output of goods and services produced grew about 50 percent,
somewhat below our postwar performance.
A recurring question throughout these years has been whether the Employment Act of 1946 has caused an imbalance in our management of
economic policy by lessening the attention paid to price stability. While
Section 2 recognizes that "other essential considerations of national policy"
must be weighed, there is no explicit recognition of a stable price level as
an objective of economic policy. It is clear both from policies and statements about policies that all Administrations have considered a reasonably
stable price level to be an important objective of policy, and such stability
is one of the concerns implicitly expressed in the Employment Act of 1946.
Indeed, it is clear from early comments that the Congress interpreted "maximum purchasing power" to involve concern about inflation.
21
During most of the first 20 years of the Act this question about the role
of the price level in the objectives of national economic policy had a certain leisurely and academic quality. The basic trend of the price level was
moderately upward. Between 1948, the time that prices established a new
plateau, and 1965 the consumer price index rose 31 percent. Over one-half
of this rise, however, is accounted for by two 2-year surges in the price
level—one from 1950 to 1952, and a second from 1956 to 1958. And one of
these surges could be attributed to the large rise in defense outlays incident
to the Korean conflict. Apart from these, the price level was performing in
a reasonably quiescent manner.
Concern about the price level as a consideration in the objectives and
management of economic policy has come into sharper focus and taken
on a new sense of urgency with the rise in prices since 1965. While the
inflation was clearly set off by excessively expansive fiscal and monetary
policies, its persistence as the overheating of the economy subsided has
raised urgent questions. Can a free economy have a reasonably stable price
level with its productive resources fully utilized? Has the concentration on
"maximum employment, production, and purchasing power," as specified
in the Employment Act, caused a bias in our policies that leaves us exposed to a sustained deterioration in the purchasing power of the dollar?
Have new institutional structures and forces come into play that keep driving the price-cost level upward regardless of the state of the economy?
This much seems clear: The Employment Act of 1946, and the concerns that gave rise to its passage, moved the quality of our economic
performance to a higher place on the Nation's agenda. The Act provided
a flexible and general statement of what our economic activity ought to do
for us. The structures that it called for have evolved and adjusted to changing circumstances and problems. Our most urgent task, as we move into
the second quarter century of the Employment Act of 1946, is twofold:
to find ways of keeping the Nation consistently concerned about the problems raised by experience with inflation since 1965, and, with full regard for
the requirements of a free economy and a free society, to develop new policies
and programs needed to meet this national concern. We can be confident
that this twofold task will be performed.
CHAPTER 1
The Record of 1970
1 Q 1 C\ W A S T H E Y E A R w h e n P o l i c i e s o f restraint initiated earlier
A +J I VJ to curb the long inflation had their first major effects on the
economy. It was also the year when a large part of the transition from
a wartime level of defense spending to a peacetime level was accomplished.
Alongside these major forces were others that visibly affected the shape of
the year. A long upsurge of business investment in plant and equipment came
to an end and a strong rise in residential construction began. The stock
market experienced one of its most severe declines in 40 years, one of the largest corporations in the country went into reorganization, and there was a 10week strike of an even larger industrial corporation, whose products account
directly and indirectly for about IV2 percent of the total national output.
The primary goal of anti-inflation policy in 1970 was to limit the decline
of output that had been initiated by earlier restrictive measures and then to
get output rising again in the second half. The increase of output that was
desired was an amount sufficient to keep the rise of unemployment moderate
but not so large as to prevent progress toward a lower inflation rate. The
primary instruments for achieving this goal were monetary and fiscal
policies aimed at influencing the rate of increase of the total demand for
goods and services. Three requirements of the policy were important. First,
policy should turn in an expansive direction early in the year. The turn
in policy from its earlier restrictiveness would not affect the behavior of the
economy immediately. To make sure the economy was rising again in the
second half of 1970, the policy change would have to come well before
that. Second, the combined fiscal and monetary stimulus should be sufficient to assure the desired rate of expansion in the economy. Third, both
policies—fiscal and monetary—should become moderately expansive. A combination of a highly expansive fiscal policy and a restrictive monetary policy
(or in principle a highly expansive monetary policy and a restrictive fiscal
policy, although this combination was not in prospect in early 1970) was not
wanted, partly because it was not certain that primary reliance on either
alone could be counted on to yield the desired overall results.
These requirements of policy were all met. The change in monetary policy
was reflected in two decisions of the Federal Reserve Open Market Committee, first on January 15, 1970, and then more decisively on February 10.
23
The stock of money (currency plus demand deposits), which had increased
at an annual rate of 1.2 percent in the second half of 1969, rose at the rate of
about 5J/2 percent during 1970 (Chart 1). In the Federal Reserve policy
of 1970 more attention than formerly was paid to achieving a specified
rate of growth of money and credit and less was paid to achieving predetermined conditions in money markets. By and large the Federal Reserve
was able to achieve its overall targets despite the necessity to act quickly
from time to time to prevent disorderly conditions in credit markets.
The sequence from monetary tightness in 1969, which slowed down the
economy and reduced the demand for credit, to the easier monetary
policy of 1970, which increased the supply of credit, produced a dramatic
decline of interest rates. Short-term rates declined by about 3 percentage
points from their peaks reached at the end of 1969. Long-term rates surged
upward in May and June during the period when the demand for liquidity
was at a maximum because of uncertainties in both foreign and domestic
affairs, but thereafter they declined substantially, particularly in November
and December.
Fiscal policy also changed sharply in-1970. The net budget position in the
national income accounts shifted from a surplus of $9 billion in calendar
1969 to a deficit of $11 billion in 1970. Most of this $20 billion swing was the
result of the lower level of the economy in 1970 than in 1969, measured
against a full employment path. If the economy had been at full employment
in both years there would have been a surplus, but it would have declined
by $5 billion. (See the appendix to this chapter, "Measures of Changes in
Fiscal Policy.") Most of the shift in the budget position occurred after the
first quarter of the year (Table 1).
Expenditures increased about $15 billion, a decline of $2 billion in defense
purchases being much more than offset by an increase in other categories.
TABLE 1.—Federal Government receipts and expenditures, national income accounts basis, 1969-70
[Billions of dollars, seasonally adjusted annual rates]
Actual
Period
Receipts
1969
1970 .
.
1969: 1
II
III
IV
1970- 1
II.
Ill
IV
.
. .
.
Expenditures
Full employment estimates
Surplus
or deficit ( - )
Expenditures
Surplus
200.6
U95.4
191.3
i 206.2
9.3
i -10.8
203.3
212.0
191.7
205.3
11.7
6.7
197.2
202.5
200.8
202.0
187.7
189.1
192.5
195.9
9.5
13.4
8.3
6.1
197.2
203.4
204.3
208.3
188.1
189.5
192.8
196.2
9.1
13.9
11.5
12.1
195.9
196.7
194.9
»194.1
197.7
210.9
206.7
i 209.5
-1.7
-14.2
-11.8
1-15.4
208.0
211.9
211.9
216.2
197.6
209.9
205.5
208.3
10.4
2.0
6.4
7.9
i Preliminary.
Note.—Detail will not necessarily add to totals because of rounding.
Sources: Department of Commerce and Council of Economic Advisers.
Receipts
24
Chart 1
Changes in GNP, Money Stock,
and Full Employment Surplus
PERCENTAGE CHANGE V
GROSS NATIONAL PRODUCT
10
2/
2/
5
n
PERCENTAGE CHANGE^
10
-
-
M(DNEY STOCK
(D emanc Deposits and Currency)
5
ml
n
CHANGE, BILLIONS OF DOLLARS 1/
10 _
FULL EMPLOYMENT SURPLUS
OF FEDERAL GOVERNMENT
(Inverted Scale
VA
-5
-10
IV
IV
1969
1970
J/SEAS0NALLY ADJUSTED ANNUAL RATES.
^/ADJUSTED FOR THE EFFECTS OF THE AUTO STRIKE.
SOURCES: DEPARTMENT OF COMMERCE, BOARD OF GOVERNORS OF THE FEDERAL RESERVE
SYSTEM, AND COUNCIL OF ECONOMIC ADVISERS.
The increase in expenditures included $1 billion more for unemployment
compensation because of higher unemployment rates. Receipts declined by
about $5 billion. Expiration of the surcharge in two steps reduced revenues
by $8.3 biliion, and other tax changes during 1970 cut them by $0.6 billion.
Because of the slowdown of the economy only a small part of this reduction
was offset by expansion of the tax base.
A shift in the budget position in 1970 that would have eliminated the
large surplus of 1969 was implicit in the Administration's plans at the
beginning of the year.* This was due partly to the projected path of the
economy below full employment and partly to the combined effect of changes
in expenditures and taxes. The actual shift, which ended in a substantial
deficit, exceeded the plan, however, one reason being lower economic activity
than projected and the other being unplanned expenditure increases.
The Administration's position was to accept the deficit resulting from the
economic slowdown as an aid to limiting the slowdown. It also accepted
some moderate expenditure increases beyond its budget. However, it
strongly resisted program expansions which would substantially raise commitments for expenditures beyond 1970.
The policies of 1969 and 1970 were intended to achieve at first a slowdown in the rate of increase of money demand and then a moderate revival of that rate. This general pattern was accomplished. The increase of
rnoney GNP, which had been running at an annual rate of about 7^4 percent in the first three quarters of 1969, subsided to about half of that in the
fourth quarter of 1969 and in the first quarter of 1970. The rate then
increased to about 5 percent in the second quarter and to a little over
6 percent in the third. The fourth-quarter picture is obscured by the great
effect of the auto strike, but with a minimum allowance made for that
factor it would seem likely that underlying demand increased at an annual
rate of about 7 percent in the fourth quarter.
This early revival of the growth of demand limited the decline of real
output. From its peak in the third quarter of 1969 to the first quarter of 1970,
real GNP fell by 1 percent (at an annual rate of 2 percent). After stabilizing in the second quarter it rose in the third, almost regaining its previous
peak. The Council estimates that real output in the fourth quarter, instead
of decreasing, would have increased at least as rapidly as in the third if it
had not been for the strike. From 1969 to 1970, total output declined by
about one-half of 1 percent.
In the early part of the slowdown employment was well maintained, as
employers held on to labor against the possibility that a tight labor market
might soon return. By early 1970, however, with sales sluggish and profits
weak, businesses were making intensive efforts to reduce payrolls in order
to cut costs. Together with an extraordinary rise in the labor force, this
development boosted the unemployment rate from 3.5 percent in December
*The above statement refers to the national income accounts for calendar 1970.
On a unified budget basis small surpluses were planned for both fiscal 1970 and
fiscal 1971.
26
to 5.0 percent in May. Thereafter the rate leveled off for some months but
began to rise again in the latter part of the year, partly under the influence
of the auto strike, until it reached around 6.0 percent in December.
In some degree, though it cannot be measured precisely, the rise of unemployment was aggravated by the 1.1 million reduction in defense employment during the year, of which about 0.6 million occurred in the private
sector. Unemployment between jobs may be longer than average for persons
released from defense production, because of their geographic location, the
specialized nature of their skills, and their above-average incomes, when
employed. Moreover, given the slowdown in the rise of money demand, there
would probably have been more restraining effect on prices and less reduction
of output and employment, if the reduction of demand had been less heavily
concentrated in defense industries.
The purpose of the policy of restraint, which had as one consequence the
reduction of output and employment, was to stop the rate of inflation from
accelerating and to slow it down. Many signs now show that this is being
accomplished. The seasonally adjusted annual rate of increase of the consumer price index, which had been 5.9 percent in the second half of 1969 and
6.0 percent in the first half of 1970, was 4.6 percent from June to November.
Wholesale prices, after a 4.2 percent rise in the second half of 1969, rose at
the rate of 2.6 percent in the first half of 1970 and 2.1 percent in the second
half of 1970. Although 1970 brought only a faint sign of abatement in the
rate of increase of wages, the reduction in overtime reduced costs per hour of
work, and productivity rose more rapidly in 1970 than in 1969. Labor costs
per unit of output therefore rose more slowly.
The policies of .1969 and 1970 set a ceiling to the mounting inflation and
turned the inflation down; they set a floor to declining output and turned it
upward. The strongest American inflation in over a century, aside from
periods of major war, was countered by deliberate acts of policy; another
change of policy checked the accompanying decline in the real economy
before it had gone far.
Although total output declined slightly from 1969 to 1970, this decline
was less than the decrease in production for defense; the output devoted to
nondefense purposes increased. The real per capita disposable income of
persons (that is, after allowing for changes in both taxes and prices) reached
a record high in 1970. Real compensation per hour of work increased by 1.1
percent over 1969, a little more than the increase in real output per hour.
Real personal consumption expenditures for the year were 2 percent above
those for 1969. The increase in the real per capita disposable incomes of
persons was made possible in part by the cuts in defense. These cuts also
contributed to the rise in unemployment. But at its 1970 peak aiound
the end of the year, while the influence of the General Motors strike was still
being felt, the rise of the unemployment rate had not been as large as in
earlier transitions from inflation and war. At the end of the year, about
half the unemployed had been out of work for less than 6 weeks.
27
Chart 2
Comparison of Projected and Actual GNP,
Prices, and Unemployment Rate
PERCENTAGE CHANGE, 1969 TO 1970
PERCENT, 1970
Projected 1/
Actual
GNP
REAL GNP
IMPLICIT GNP
PRICE DEFLATOR
UNEMPLOYMENT
RATE
-2
^PROJECTED BY COUNCIL OF ECONOMIC ADVISERS, FEBRUARY 1970.
SOURCES: DEPARTMENT OF COMMERCE, DEPARTMENT OF LABOR, AND COUNCIL OF ECONOMIC ADVISERS.
The performance of the economy disappointed many expectations
and intentions, including those of this Council. Aggregate demand in money
terms and real output were lower than expected, while the rate of inflation
and the unemployment rate were higher (Chart 2). The momentum
of rising costs and prices, a legacy of the long inflation, proved to be extremely
powerful. The continuing rise of prices and wages creates the main uncertainties for economic policy in 1971. It is the inflation that has prevented an
all-out attack on unemployment and that contains the possibility of frustrating the recovery policies which are being adopted.
Some people have been hurt in the transition to a lower level of defense
expenditure. Some have suffered the hardship of unemployment. Others
have experienced shorter hours, or loss of profits. The entire economy has
been hit by inflation. These hardships are the price that is now being paid for
the earlier inflationary boom. The memory of this price should stay with us
as economic policy is made in the future.
DEMAND PATTERNS
The part played by the principal components of demand in the slowdown
and initial phase of revival is best seen in the period from the third quarter
of 1969 to the third quarter of 1970. The results for the fourth quarter of
1970 are so influenced by the temporary supply constraint caused by the auto
strike that they yield little reliable evidence on the trend of demand either in
TABLE 2.-—Changes in gross national product, by component, 1967 III to 1970 III
[Billions of dollars]
Change in seasonally adjusted annual rates
Component
1968 III
to
1969 III
1969 III
to
1970 ill
42.9
16.9
26.0
9.3
65.6
1.8
65.0
-3.9
46.8
-.2
17.1
-3.7
29.7
-.5
66.1
3.1
61.9
-5.8
52.6
-9.7
26.8
3.9
25.8
48.3
5.0
3.3
-2.2
11.5
38.3
13.2
1.1
-.8
10.2
40.0
2.1
-1.8
1.6
10.8
21.0
1.1
-1.9
.9
19.0
1.0
.1
.7
5.0
1967 III
to
1968 III
Total GNP_.
Federal Government purchases.
AlrotherGNP
Change in business inventories.
Final sales..
Personal consumption expenditures._.
Nonresidential fixed investment
Residential structures
Net exports
State and local government purchases.
74.9
1969 III
to
1970 I
5.8
1970 I
to
1970 ill
Note.—Detail will not necessarily add to totals because of rounding.
Source: DeDartment of Commerce.
the aggregate or by sectors. We shall return later, however, to the interpretation of the fourth quarter, because it is important as the starting point for
1971. Here we shall concentrate on the less uncertain picture presented by
the period through the third quarter of 1970 (Table 2).
Total demand, as measured by total expenditures for gross national
product, increased much less in the year ending in the third quarter of 1970
than in the same period a year earlier—$42.9 billion as compared to $66.8
billion. The slower increase, or decline, of four categories of demand—Federal purchases, change in business inventories, residential structures, and
business fixed investment—amounted to more than the total slowdown. The
total of the other categories—personal consumption, net exports, and State
and local purchases—rose a little more in the later period than in the earlier
one.
Expenditures rose more from the first to the third quarter of 1970 than
they did over the preceding two quarters. Changing rates of inventory
accumulation were mainly responsible for this shift. In part, the changing
pattern of demand—from 1969 to 1970 and in 1970—reflected thefiscaland
monetary policies of the time. The decline of Federal defense purchases
continued, but tax reductions and increases in transfer payments helped
to sustain consumer spending when earned income was weak. Monetary
ease helped promote the flow of funds into savings institutions and thus
supported the turnaround in housing. An increase of Federal grants-in-aid
to the States helped to keep State and local purchases growing fairly steadily
despite the economic slowdown.
CONSUMER INCOME AND SPENDING
Consumer spending rose about as much from the third quarter of 1969
to the third quarter of 1970 as in the preceding four-quarter period despite
the sluggish economy (Table 2). It constituted an important force sustaining
aggregate demand early in the year when the economy was contracting, and
it contributed to the recovery. This pattern of consumption resulted from
fiscal measures that buttressed consumer disposable income in 1970 against
forces of contraction as well as from the automatic stabilizing influence
of the tax system.
With little change in real output and employment during 1970, private
wages and salaries, the largest component of income, rose much less rapidly
from the third quarter of 1969 to the third quarter of 1970 than in the year
before—4.6 percent as compared to 9.8 percent (Table 3). Government payrolls, however, continued to rise rapidly notwithstanding cutbacks in the size
of the Armed Forces. Part of the slowdown in private payrolls was offset by
the rise in State unemployment insurance benefits, but there was also a large
expansion in Social Security benefits in the spring. Corporations maintained
dividend payments in the face of a pronounced decline in profits, a practice
evident in earlier periods of slowdown. All told, the increase in personal
income came to 6.5 percent as compared to the 8.7 percent rise during the
preceding year.
The decline in personal taxes affected after-tax disposable income even
more than did the rise in transfers. After increasing over $15 billion from the
third quarter of 1968 to the third quarter of 1969, personal taxes declined
more than $3 billion in the same period a year later/Reductions in taxes,
amounting to $10 billion, more than offset the moderate rise that would have
occurred at 1969 rates. Disposable income during the later period rose substantially^ 8.2 percent compared to 7.6 percent over the preceding period.
Only part of the fiscal stimulus created in 1970 was translated into an
TABLE 3.—Changes in personal income, taxes, disposable income, and consumption, 1967 III
to 1970 III
[Billions of dollars]
Change in seasonally adjusted annual rates
Item
Personal income
Wage and salary disbursements .
GovernmentPrivate
Transfer payments
Other personal income
Less: Personal contributions for social insurance
1967 III
to
1968 III
1968 III
to
1969 III
1969 III
to
1970 III
60.5
49.1
24.2
24.9
44.6
11.3
33.3
45.4
8.9
36 5
55
12.9
27.4
8.4
19 0
13.2
10.1
15.5
2.8
12 7
11.9
5.6
ti
4.7
1.0
-2.8
7.9
12.8
2.4
3.3
1.6
18.1
15.4
-3.3
Equals: Disposable personal income
Personal consumption expenditures
44.9
48.3
45.0
38.3
52.4
40.0
Note.—Detail will not necessarily add to totals because of rounding.
19701
to
1970111
62.9
Less: Personal tax and nontax payments
Source: Department of Commerce.
1969 III
to
19701
4>3
6.3
8.9
.6
21.0
24.7
27.7
19.0
increase in consumer spending during the year, the shortfall from expectations
being most pronounced after the midyear. This is best seen in the saving rate,
which rose in the second quarter to a level that has occurred in the past but
that must be judged high by historical standards. The rate was maintained
in the third quarter. The rise in the second quarter came mainly from the
lagged response of consumers to the large increase in income caused by the
statutory rise in Social Security benefits and the Federal pay raise, both of
which included payments retroactive to the first of the year. The severe
decline in the stock market in May might have been a contributing factor,
although it is of interest that, despite the decline in consumer net worth that
this implied, purchases of automobiles were higher in the second quarter
than in the first. But by the third quarter consumers had clearly become
cautious, since with incomes no longer rising rapidly, some decline in the
saving rate might reasonably have been expected.
Sometimes shifts in the saving rate are a reflection of shifts in consumption
patterns. Table 4 provides alternative measures of the saving rate, obtained
by adding to the saving rate either all consumer purchases of durable goods
or consumer purchases of autos and parts (as a percentage of income).
Although sluggish demand for automobiles affected the saving rate in the
first quarter, it does not explain the continued high rate through the third.
The method of adding all consumer durables to the saving rate makes it clear
that saving was indeed high in the second and third, quarters. The data,
which are still preliminary, suggest that consumers may have shifted purchases to nondurables in the strike-affected fourth quarter.
TABLE 4.—Personal saving and alternative measures of saving, 1965-70
Percent of disposable personal income I
Personal consumption expenditures
Period
Personal
saving
1965
1966
1967
1968
1969* I. .
11...
III
IV
1970: I
II
III..
IV J
1
3
Total
durables
Automobiles
and parts
Total
durables
Automobiles
and parts
6.0
6.4
7.4
6.8
14.0
13.8
13.4
14.2
6.4
5 9
5.6
6.3
20.0
20.2
20.8
21.0
12.4
12.3
13.0
13.1
5.6
5.3
6.5
6.3
14.6
14.5
14.0
14.0
6.5
6.4
6.3
6.3
20.2
19.9
20.5
20.3
12.1
11.8
12.8
12.6
6.7
75
7.6
7.3
13.4
13 4
13 2
12.3
5.7
58
5.7
4.7
20.1
21 0
20.8
19.6
12.4
13.3
13.3
12.0
Quarterly percents based on seasonally adjusted data.
Preliminary.
Note.-Detail will not necessarily add to totals because of rounding.
Source: Department of Commerce.
Saving plus-
BUSINESS FIXED INVESTMENT
The policies of restraint pursued in 1969 and their effects on the cost and
availability of financing played an important role in bringing the long boom
in capital investment almost to a halt during 1970. After rising 12 percent
from calendar 1968 to 1969, nonresidential fixed investment increased only
3 percent, less than the rise in the index of plant and equipment costs.
Businessmen scaled back by a few percentage points the plans that had been
reported early in the year in surveys of investment intentions; this was a
somewhat larger shortfall from plans than occurred in 1968 and 1969.
The effects of the general slowdown on investment were quite varied. In
some industries like electric utilities and communications, which increased
their outlays by substantial amounts, the response was slight, the need for
additional facilities having been accentuated by service breakdowns in some
areas. To a considerable extent these industries, which enjoy strong growth
trends, tend to budget their capital outlays over long periods. Since they are
regulated noncompetitive industries facing inelastic demands, they also have
the ability to pass on high interest costs in the form of higher rates, once
authority has been granted by regulatory commissions. The strength of
investment in these industries and increased spending by the airlines were
important in offsetting the more common response—either a decline in
investment outlays or a much smaller rise than that of the preceding year.
Sharp drops in profits, relatively low operating rates, high interest costs,
and other financing difficulties brought decreases in the amounts spent
by manufacturing companies and railroads, whose spending patterns tend
to be more sensitive to business conditions. The decline in corporate profits
after taxes was pronounced—8J/2 percent from 1969—and was especially severe in the first and fourth quarters, when automobile output was
depressed. In addition, the termination of the investment tax credit probably
had a general dampening effect on investment outlays.
Demand for new plant and equipment was not strong but appeared to
be holding up at a high level as the year progressed. Appropriations by
manufacturers, which had fallen in the fourth quarter of 1969 and the
first quarter of 1970, leveled out in the second quarter and rose in the third.
The results of the surveys of businessmen's spending intentions for 1971
pointed to small increases in current dollar outlays and small decreases in
real terms. In view of such adverse developments as the stock market decline
and the Penn Central problems in May and June and the automobile strike
after mid-September, these indicators of business investment decisions made
in the second half of 1970 suggest that business confidence held up reasonably well.
INVENTORY INVESTMENT
Businessmen pursued cautious inventory policies in 1970; for the year
as a whole they added $5 billion less to their stocks than they had in
1969. The most significant fact about inventory behavior was the quarterly
pattern and its effect on movements in GNP. The more rapid rise in GNP
from the first to the third quarter of 1970 as compared to the preceding
half-year reflected a shift in inventory investment. In the earlier period the
rate of inventory accumulation declined, subtracting from the change in
GNP, while in the latter period an increase in the rate of accumulation
added to the rise in GNP.
The year started with stocks somewhat high in relation to sales or output
mainly because of the slowdown in sales late in 1969. However, it was expected that businessmen would make a gradual reduction in their inventory investment, rather than an abrupt change, because for much of 1969
they had been expecting a slowdown in business to follow the Administration's announced intention of cooling off the economy.
Early in the year, however, investment in stocks was slashed, from an
annual rate of $11 billion in the third quarter of 1969 to $1/2 billion in the
first quarter of 1970. Indeed, this sharp decrease explains much of the
weakness in the economy early in the year. A good part of the decline came
from the automobile industry, where a softening in auto demand led to a
severe reduction in output. In addition, work-in-process inventories in the
aerospace industry were reduced as companies increased their deliveries
and were forced to cut back on new work. Automobiles and aircraft together
accounted for about $6 billion of the $10-billion decline in inventory accumulation. The recovery of the auto industry in the spring and summer was
one reason for the somewhat higher rates of accumulation in the second and
third quarters.
HOUSING
Nowhere have the effects of policies been more visible in the past 2 years
than in homebuilding, where 1970 brought substantial recovery after the
sharp decline of 1969. The year began with private housing starts at the low
seasonally adjusted annual rate of 1.25 million units in the first quarter,
down from a high of 1.64 million in the first quarter of 1969. By the fourth
quarter, however, starts had exceeded that earlier peak. The increased
availability of funds for mortgages, which will be described later in this
report, was the driving force for this turnaround.
The total of 1.43 million units started in calendar 1970 represented a 3percent decrease from the number of starts in 1969. Expenditures, however,
fell 8 percent in the face of a 5-percent increase in the index of housing costs.
The decrease reflected a decline in the average value of single-family starts,
the first in many years. New homes were apparently smaller in floor area
and had fewer of the amenities associated with housing quality.
This decline in the average quality of single-family houses, which started
33
before 1970, has been influenced heavily by changes in costs. From 1969
to 1970 wage rates in construction rose 9.2 percent. With productivity gains
small, most of these exceptionally large adjustments were reflected in higher
building costs. Land prices and property taxes have also been increasing
persistently. And yields on new FHA home mortgages reached 9.29 percent
in March 1970, 130 basis points higher than the yield a year earlier, although
by December the figure had fallen to 8.90 percent.
The rising costs of home ownership have been dramatic in recent years.
The average home built in 1965 with FHA financing obligated the buyer to
$118 per month in mortgage payments. In 1970, for a house of the same
size, the corresponding figure was $212, an increase of 80 percent at a time
when median family incomes rose about 45 percent. Because of higher costs,
however, the average size of the home sold in 1970 was smaller than its
counterpart in 1967, 1968, and 1969. An increase in the proportion of houses
financed with Federal subsidies also contributed to a reduction in the average value of houses built in 1970, because the subsidies go to smaller and
cheaper houses.
STATE AND LOCAL GOVERNMENT PURCHASES
State and local government purchases, which have been rising steadily for
many years, continued to increase at a rapid rate and were an important
sustaining force in 1970. The 9-percent rise in such purchases was a little less
than that of the year before despite a faster rise in prices. Most of the slowdown reflected the difficulties that States and localities experienced in
financing their construction projects, except for federally aided highways,
in 1969 and early 1970.
With expenditures continuing to rise very rapidly, employment by State
and local governments rose almost 5 percent over the average level in 1969, a
somewhat faster rate than the year before but about 1 percent less than
the average annual percentage increase in the period from 1964 to 1968. The
rise in wage and salary rates was especially large last year. At the same time
strikes by State and local government employees, as in the last few years,
were a much more common occurrence.
THE FOURTH QUARTER OF 1970
According to preliminary estimates, GNP in the fourth quarter of 1970
rose at an annual rate of about 2 percent, compared to the 6 percent rate
of increase in the third quarter. During 2 months of the fourth quarter
the motor vehicle plants of General Motors Corporation were closed
down as the result of a work stoppage. The basic demand for output was
clearly rising but was kept from expressing itself in purchases by
the strike. Although the question cannot be answered precisely, it is useful
to estimate the rate at which the underlying demand was actually rising.
WTe could then judge better how well the expansive policies initiated earlier
34
were working and also have a better base for appraising the prospects for
the economy as 1971 begins.
Those components of demand where the strike impact was either nonexistent or not large on balance—private construction, purchases by Federal,
State, and local governments, and net exports—as a group rose about as
much in the fourth quarter as in the third. Consumer purchases of nondurable goods, which were indirectly affected by the loss of income resulting
from the strike, nonetheless rose more in the fourth quarter than in either
the second or third. Declines were pronounced, however, in those sectors
affected by the strike—consumer durable goods expenditures and producers' durable equipment. In aggregate, inventory investment declined
by about $ l / 2 billion, as a severe reduction in auto stocks offset increased
accumulation in other industries.
A partial notion of the strike's impact on GNP may be obtained from
gross auto product (the value of automobile production and distribution),
which declined $12 billion from the third to the fourth quarter. GNP,
excluding automobiles, rose $17J/s> billion over the same period (Table 5).
The decline in auto GNP in the fourth quarter does not tell everything
of the strike's impact. It ignores the effect on truck production. Furthermore with so large a loss in output there must have been substantial multiplier effects (which may well have started even before the strike) as workers
cut back on their consumption, particularly their purchases of durable
goods, in the face of drastic cuts in income. Then too, because of the uncertain length of the strike, some businessmen may have adopted conservative buying policies while the strike was still on. On the other hand, strike
benefits helped to hold up income, and dissaving helped to support the
consumption of workers affected. Two other developments may have mitigated the negative impact of the strike. One is the possibility that suppliers
accumulated more stocks of parts and supplies than would have occurred
in the absence of the strike. And it is possible that some consumers, unable
to buy their new cars, purchased other things.
A minimum estimate of the strike's impact may be put at approximately
$14 billion. This is based on an estimate that domestic automobile output
would have been at a seasonally adjusted annual rate of 8 million units (as
TABLE 5.—Changes in auto and other gross national product during 1970
[Billions of dollars, seasonally adjusted annual rates]
Change from preceding quarter
Period
GNP
1970: 1
7 8
11 6
14.4
II
III
IV»
1
5.4
Preliminary.
Source: Department of Commerce.
Auto GNP
35
All other GNP
-4.7
12.5
-12.0
15.1
17.4
4.3
7.3
compared to 8J/2 million in the period from June through August) } plus an
allowance for lost truck production minus some offset for suppliers' inventories. The total impact on GNP was greater than these effects but because
of difficulties in estimation a specific figure is not presented. On this basis
GNP in the fourth quarter would have been $1,005 billion. This would
represent a rise over the third quarter amounting to 7 percent at an annual
rate.
OUTPUT, EMPLOYMENT, AND UNEMPLOYMENT
Between 1969 and 1970, when the value of output rose by 4.9 percent,
prices rose 5.3 percent and real output fell by 0.4 percent. Without
the automobile strike, which began in mid-September, real output for the
full year would probably have been slightly higher in 1970 than in 1969. Real
output declined from the third quarter of 1969 to the first quarter of 1970
by about 2 percent (annual rate), leveled out in the second quarter, and then
rose slightly in the third and decreased in the fourth. If the strike had not
occurred, the annual rate of increase in output in the third quarter would
have been about 1 percent greater, while in the fourth quarter the rate of
rise would have been in the neighborhood of 2-3 percent.
From the third quarter of 1969 to the third quarter of 1970 real output
declined by one-half of 1 percent (without strike adjustment). Since Federal purchases, mainly for defense, declined significantly, total real output
available for non-Federal use rose by 0.8 percent. The latter reflected a
rise in real expenditures of consumers, net exports, and State and local government purchases that more than offset a decline in real private investment
(Table 6). Looked at another way, the decline in output was concentrated
TABLE 6.—Changes in real gross national product, 1967 III to 1970 III
[Billions of dollars, 1958 prices]
Change in seasonally adjusted annual rates
Component
Total GNP.
Federal Government purchases..
All other GNP
Change in business inventories.
Final sales
Personal consumption expenditures
Nonresidential fixed investment...
Residential structures
Net exports
State and local government
purchases
1968 III
to
1969 III
1969 III
to
1970 III
33.7
18.3
-3.5
-7.1
3.6
3.5
30.2
-3.7
22.0
-9.0
5.5
-4.1
-3.0
-4.9
8.5
-.9
31.1
2.5
19.5
-5.3
10.8
-8.6
5.6
3.3
5.2
26.1
2.0
1.5
-2.7
11.0
7.0
-.5
-.7
10.9
-2.3
-2.3
2.3
5.3
-1.0
-1.6
1.1
5.6
-1.3
-.7
1.2
4.1
2.7
2.3
1.7
.6
1967 III
to
1968 III
Note.—Detail will not necessarily add to totals because of rounding.
Source: Department of Commerce.
1969 III
to
1970 1
1970 I
to
1970 III
in construction and in durable commodities, mainly motor vehicles. Output
of nondurable goods and services was up slightly.
EMPLOYMENT AND UNEMPLOYMENT
The decline of output that began toward the end of 1969 did not immediately affect total employment. Indeed, the rise in employment (as estimated
from the household survey) from the fourth quarter of 1969 to the first
quarter of 1970 was at a rate only moderately less than it was during 1969,
a year of considerable employment expansion. Although manufacturers had
begun to cut their employment in the fourth quarter, nonmanufacturing
firms continued to increase theirs. Experience with labor shortages for several years, when the economy was operating above its potential, probably led
many employers to take on workers as they were available and to postpone
laying off workers until the slackening in demand was clearly not temporary.
Hours of work were reduced, however, a trend that had been in progress
during most of 1969.
The first-quarter rise in employment proved to be short lived. The output
decline, coming at a time when payrolls were increasing because of rapidly
rising wage rates, led to a pronounced increase in unit labor costs and a
sharp decrease in profits. Employers began examining their costs much
more carefully and took measures to reduce them or at least to hold down
their rise. After declining in the spring quarter, employment (household
basis) leveled out after midyear. Manufacturing employment declined
through the year, nonmanufacturing employment was about unchanged,
and government employment rose. The average level of employment in
1970 increased by only 0.7 million workers over 1969, the smallest rise since
1961 and roughly half of the normal growth in the labor force.
With real output declining or rising very little, unemployment rose in
each quarter of 1970. The unemployment rate increased sharply in the first
half of the year, rising from 3.6 percent in the fourth quarter of 1969 to 4.1
percent in the first quarter and 4.8 percent in the second. The rate of increase
diminished somewhat in the summer months but speeded up again in the
final quarter to a rate of 5.8 percent (Chart 3). The 4.9-percent rate for
the full year was the highest since 1964, and represented an average of 4.1
million persons out of work.
Last year's rise in unemployment was greater than had been anticipated
in most projections, including that of the Council. Explanations for the
large rise in unemployment are found in the behavior of the labor supply
and production costs. The civilian labor force increased by 1.9 million
workers from the final quarter of 1969 to the corresponding 1970 quarter.
This was less than the 2.4-million increase over the preceding 4 quarters,
but it was larger than the average of the 1960's.
One special circumstance that contributed to the large increase in the
civilian labor force was the reduction in the Armed Forces. During 1970,
400,000 persons left the armed services, and most of them entered the labor
37
Chart 3
Unemployment Rate
PERCENT OF CIVILIAN LABOR FORCE*
SEASONALLY ADJUSTED
0
i i 11 i i 11 I I I 1 l I I I 1 l l I I I 11 I I I 1 ) I 11 l I 11 I I I I 11 l I ) I I I I I 11 I I I 1 1 I 11 I I I I 1 I 11 I I 1 I I I I I I I I I I I 11 I I 11 I I
1948
50
52
54
56
58
60
62
64
66
68
70
* DATA RELATE TO PERSONS 16 YEARS OF AGE AND OVER.
SOURCE: DEPARTMENT OF LABOR.
force. The change in selection procedures for drafting young men may also
have contributed to the very large increase in the number of adult men
entering the labor force during the year. Although adult women and teenagers entered the labor force in smaller numbers during 1970 than during
1969, the increases were not markedly lower than in other recent years.
There is little evidence, therefore, that the increased difficulty which workers
experienced in finding jobs in 1970 led to a significant withdrawal from the
labor force; it has apparently shown up almost entirely in increased
unemployment.
The first-quarter rise in the labor force was especially large—3.7 million
persons at an annual rate. The reduction in the Armed Forces may have
contributed to the rise, as noted above, but in addition women and teenagers
continued to enter the labor force in large numbers at a time when labor
demand, although still strong, had begun to slacken. The slower rise in the
civilian labor force after the first quarter was more nearly in line with the
experience of the 1960's.
The other explanation for the large unemployment increase would appear
to be related to the rapid increase in wage rates and the very poor performance of productivity in 1969, and to attempts by businessmen to compensate
for this cost increase in 1970. From mid-1968 to mid-1969, for example,
output per man-hour in the private nonfarm sector showed no growth
whatever. This was a period when demand was still very high and the
38
economy was operating well above its potential. Demand for labor was
intense. The unemployment rate for all persons averaged less than 3.5 percent, and the rate for married men 1.5 percent, the lowest since the Korean
war. This was a period of rapid employment growth for women and teenagers who lacked experience and whose productivity tended to be below
average. Labor turnover was also very high and absenteeism common.
The situation started to change in the fall of 1969 when policies of restraint
began to make themselves felt. Crosscurrents began to appear. In manufacturing, hiring slowed down and layoffs started to increase. Output declined
in the fourth quarter of 1969 and fell more in the first quarter of 1970. The
sharp decrease in productivity in the first quarter of 1970 reflected the usual
practice among employers of retaining workers in the face of falling output;
the decline in output per hour was not markedly different from the decreases
that accompanied other downturns. Employment increased in nonmanufacturing industries.
The situation changed much more after the first quarter as businessmen
stepped up their efforts to cut their costs. It was natural that operations had
become inefficient after the long period of expansion, and a correction of the
excesses of the past was clearly going to take more than a month or two.
Moreover, the increase in wage rates showed little evidence of receding. The
attempt to cut labor costs by letting workers go was a reversal of the practice
followed for several years, when employers had difficulty in attracting and
keeping productive, experienced workers. In the second quarter, productivity
rose at an annual rate of 3.9 percent, and in the third quarter the gain was
4.5 percent. In the fourth quarter, however, productivity declined as a result
of the strike.
Characteristics of the Unemployed
The increased unemployment in 1970 was not accompanied by a marked
lengthening in the duration of unemployment, although there was a strong
trend in that direction during the year. The median duration of unemployment increased from 4.3 weeks in 1969 to 4.8 weeks in 1970; over half
those unemployed were unemployed for less than 5 weeks. In fact, fewrer
than half those unemployed in an average month in 1970 were unemployed
in the following month. The reason for this is that persons who have been
unemployed for a relatively long period have a higher probability of remaining unemployed in succeeding weeks than persons who have only recently
become unemployed. The median duration of completed spells of unemployment is much shorter than the median duration pertaining to persons unemployed at any given time. Although net additions to employment totalled only
0.7 million, there was a great deal of flux in the labor market; in an average
month at least 2 million workers were taken off the unemployment rolls,
and a slightly larger number of persons newly searching for jobs were added.
The relative increase in unemployment among adult men was more than
twice that for adult women and teenagers. As a result, the unemployment
39
rate for adult men, which had decreased year by year starting in 1962, increased substantially, from 2.1 to 3.5 percent. The rate for married men rose
from 1.5 to 2.6 percent. The rate for persons of Negro and other races increased from 6.4 to 8.2 percent but remained significantly below its historical
relationship of twice the rate for whites (Table 7). Long-term unemployment (15 weeks and over) increased from 0.5 percent to 0.8 percent of the
labor force.
TABLE 7.—Selected unemployment rates, 1961-70
(Percent11
Group of workers
1961-65
average
1966
1967
1968
1969
1970
5.5
3.8
3.8
3.6
3.5
4.9
Sex and age:
Both sexes 16-19 years._Men 20 years and over
Women 20 years and over.
15.9
4.4
5.4
12.8
2.5
3.8
12.8
2.3
4.2
12.7
2.2
3.8
12.2
2.1
3.7
15.3
3.5
4.8
Race:
White
Negro and other races
4.9
10.4
3.4
7.3
3.4
7.4
3.2
6.7
3.1
6.4
4.5
8.2
Selected groups:
White-collar workers
Blue-collar workers
Craftsmen and foremen..
Operatives
Nonfarm laborers
2.8
7.1
4.8
7.3
11.8
2.0
4.2
2.8
4.3
7.4
2.2
4.4
2.5
5.0
7.6
2.0
4.1
2.4
4.5
7.2
2.1
3.9
2.2
4.4
6.7
2.8
6.2
3.8
7.1
9.5
Private wage and salary workers in nonagrr
cultural industries
Construction
Manufacturing
5.9
12.8
5.6
3.8
8.1
3.2
3.9
7.4
3.7
3.6
6.9
3.3
3.5
6.0
3.3
5.2
9.7
5.6
All workers.
1
Number of unemployed in each group as percent of civilian labor force in that group.
Source: Department of Labor.
The unemployment rate for young persons 16 to 21 years old increased
in 1970, for those both in school and out of school (Table 8). Unemployment
rates for young persons are typically high because many of them are new
entrants into the labor force and are looking for short-term and part-time
jobs. For example, about 85 percent of those unemployed and in school were
looking for only part-time work. Although the fraction of the young people
in the labor force who were unemployed was high (13.3 percent), particularly for those in school, the fraction of all young people who were unemployed and not in school during the year was relatively low.
Recent changes in unemployment are better seen in a comparison of the
third quarter of 1970 with the third quarter of 1969, since this approach
minimizes distortions associated with the auto strike in the fourth quarter.
Unemployment was 1.4 million higher in the third quarter of 1970 than
for the same quarter of 1969, and the rate increased from 3.6 to 5.2 percent.
Among the 4.3 million persons unemployed in the third quarter of 1970,
a total of 1.9 million had lost their previous jobs, whereas only 575,000 had
quit the job they had last held. State-insured unemployment totaled
2.0 million in the third quarter of 1970. Thus, most unemployed workers
40
TABLE 8.—Employment
status of persons 16—21 years of age in the civilian noninstitutional
population, 1969-70
Percentage distribution
Employment status
1970
1969
Total civilian noninstitutional population 16-21 years of age
100.0
100.0
Major activity—going to school:
Civilian labor force
Em ploy ed
U nemployed
14.7
13.0
1.7
13.8
11.6
2.2
30.8
30.0
39.4
35.5
3.9
40.7
35.7
5.1
15.1
15.5
Not in labor force
Major activity—other:
Civilian labor force
Employed
U nem ployed
Not in labor force._
Percent
Unemployment rate of persons 16-21 years of age:
Total
In school
Not in school
10.4
13.3
11.7
9.9
15.9
12.5
Note.—Detail will not necessarily add to totals because of rounding.
Source: Department of Labor.
who had lost their most recent job apparently were covered by unemployment insurance programs.
Both the average number unemployed and the rates of unemployment increased more for blue-collar than for white-collar workers (Table 9). Within
both these occupational categories there was a tendency for the relative
increases in unemployment and unemployment rates to be larger among the
more highly skilled. Among white-collar occupations, professional, technical,
and manage rial workers were more sharply affected than sales and clerical
workers; and among blue-collar wrorkers, relatively more craftsmen and
operatives became unemployed than laborers. In part, the explanation lies
in the declines in employment related to defense and aerospace, since a larger
proportion of highly skilled workers were employed in defense and aerospace
jobs than in the rest of the economy. Service occupations are less cyclically
sensitive and their unemployment consequently increased less than for other
occupations.
Among industries, experienced workers in manufacturing had the largest
increases in unemployment, although the relative increase in construction
was also substantial. About 40 percent of the increase in unemployment during the year was in manufacturing and two-thirds of this was in durable
goods. The concentration of increased unemployment in durable goods
manufacturing reflects the combined effect of reduced defense and space
procurement and the slowdown in demand generally.
TABLE 9.—Unemployment and unemployment rates in selected occupational and industry groups,
1969 III and 1970 III
[Seasonally adjusted]
Unemployment
(thousands of persons)
Group of workers
1969 III
Total unemployment *
1970 III
Unemployment rate
(percent)
1969 ill
1970 III
2,945
4,338
3.6
5.2
817
1 131
22
2.9
151
229
1.4
78
444
144
127
574
200
1.0
3.2
3.0
2.0
1.5
4.1
3.9
1,182
2,087
4.0
7.0
232
22
4.4
4.9
282
515
1,129
443
7.2
10.6
452
577
4.5
5.6
74
103
2.2
3.2
Occupation:
White-collar workers...
..
Professional and technical
Managers, officials, and proprietors
Clerical workers
Sales workers
. ...
. .
Blue-collar workers
Craftsmen and foremen
Operatives
Nonfarm laborers.^
668
Service workers
Farmworkers
7.6
Industry:
Private wage and salary workers2
3,434-
3.7
5.7
253
707
485
1,268
6.8
3.3
12.3
5.9
373
334
742
526
2.9
3.8
6.0
90
556
531
144
753
772
2.0
4.3
3.5
3.1
5.6
4.8
Government wage and salary workers
230
255
1.9
2.0
Agricultural wage and salary workers
90
115
7.3
9.0
2,147
Construction
Manufacturing
Durable
Nondurable
Transportation and public utilities
Wholesale and retail trade
Finance and service industries.. .
5.9
1 Includes workers with no previous work experience—444,000 in 1969 111 and 502,000 in 1970 III.
2 Includes mining, not shown separately.
Note.—Detail will not necessarily add to totals because of independent seasonal adjustment of the various series.
Occupational and industry groups relate to experienced workers.
Source: Department of Labor.
DEFENSE SPENDING AND EMPLOYMENT
De-escalation of the Vietnam war and changes in our general purpose
force planning have led to a significant reduction in the resources used for
national defense. By the third quarter of 1970 defense purchases had declined by $11.4 billion (measured in 1958 prices using the Federal Government purchases deflator), or 18 percent, from its recent peak in the second
quarter of 1968. Over the same period total GNP in 1958 prices increased by
$22.0 billion. An additional $33.4 billion of real output, therefore, became
available for nondefense uses as the combined result of economic growth and
the redirection of resources away from defense.
Consumers, whose real expenditures rose by $31.2 billion, were the major
beneficiaries of this change. Also, State and local government purchases
increased by $5.0 billion, and net exports by $1.6 billion. The main off-
42
setting decline occurred in gross private investment ($3.0 billion), where
a $2.0 billion increase in fixed investment was accompanied by a drop of
$4.9 billion in investment in business inventories. A decline of $1.5 billion
also occurred in Federal nondefense purchases.
The reduction in defense spending was itself related to the general program
of restraint to reduce inflation. The overall program of restraint, however,
permitted continued growth in some sectors of the economy, primarily the
sectors producing goods and services for personal consumption, and at the
same time reduced resources used to produce defense goods and services.
National economic policies were aimed at two objectives simultaneously,
namely, a reduction in inflation and a redirection of resources from defense
to nondefense uses.
Each of these transitions could have been more easily accomplished if
it had not been necessary at the same time to effect the other. If the past
and current inflation had not been in the picture it would have been
possible safely to maintain more expansionist pressures in the economy and
the labor market; resources released from defense uses could have been
more quickly redeployed to new uses; and workers affected by defense cutbacks would have found it easier to obtain new jobs. On the other hand, the
program of fiscal restraint would have had more effect on prices and less
on unemployment if the restraint had been more generally spread over the
economy, because the required job shift would have been smaller and the
downward pressure on prices of nondefense output greater. A large fraction of the reduction in demand occurred in sectors of the economy producing defense products, with little direct effect on the prices of most interest
to consumers. A significant cutback in any large sector of the economy, particularly one that is geographically concentrated, is likely to result in a disproportionate amount of transitional unemployment relative to its effect on
the general price level.
Employment Attributable to Defense Expenditures
Employment attributable to Department of Defense expenditures will
have decreased nearly 1.8 million workers from its highest recent
level in fiscal year 1968 to fiscal 1971 (Table 10). Most of the drop is in
private employment attributable to defense expenditures, which is estimated
to decline by 1.3 million workers over the period. A reduction in the Armed
Forces accounts for much of the rest of the decrease.
The estimates of average employment for fiscal years indicate that the
largest reductions in defense employment took place during calendar years
1969 and 1970, and the decline was most pronounced during 1970. The
number of persons in the Armed Forces was reduced about 400,000 during 1970, and civilian employment for the Department of Defense declined
by nearly an additional 100,000 during the year. Private employment may
have been reduced by approximately 600,000 during the year. All told, there
43
TABLE 10.—Employment attributable to Department of Defense expenditures and
personnel requirementss 1965 and 1968—71
[Thousands; fiscal years]
1965
Type of employment
Total Department of Defense-generated employment
1968
1969
1970
197H
6,354
5,759
8,129
7,944
7,374
3,657
4,555
4,644
4,474
4,054
Federal military
Federal civilian
State and local
2,716
13
3,460
1,075
20
3,534
1,090
20
3,398
1,056
20
3,034
1,000
20
Private employment
2,102
3,574
3,300
12,900
2,300
Public employment
928
i Estimate.
Source: Department of Labor.
was an estimated decline of 1.1 million jobs attributable to Department of
Defense expenditures during 1970.
Defense-Related Private Employment
Private employment generated by defense spending is diffused over a
broad range of industries and occupations. About two-thirds of the private
employment generated by defense spending, however, has been in the manufacturing sector, although this sector accounts for about one-third of the
private nonagricultural employment of wage and salary workers. Within
manufacturing, employment attributable to defense spending has been most
heavily concentrated in ordnance and aircraft. It was also concentrated
among relatively skilled workers. A remarkably high proportion of workers
in certain jobs calling for extremely specialized skills have been dependent on
defense spending.
Estimates of private employment attributable to defense spending have
been constructed for fiscal year 1965, just prior to the increase in Vietnam
spending, and for fiscal year 1968, when private employment generated by
defense spending reached its peak. Estimates of increases in private employment attributable to increased defense spending occurring during the
Vietnam buildup are shown for selected industries in Table 11 along with the
changes in employment in these industries that have occurred since 1968.
The two industries where defense generated the highest share of total
employment were ordnance and accessories and aircraft and parts. Both
industries, but particularly the aircraft and parts industry, employed large
numbers of workers in supplying defense products. Defense employment was
also relatively high in the manufacture of machine shop products, radios,
television and communication products, electronic components and accessories, and other transportation equipment. Although a large number of
workers were employed in transportation and warehousing services, the
industry was not heavily dependent on defense even in 1968.
Employment attributable to the increase in defense expenditures during
the Vietnam buildup was generally concentrated in those industries already
44
TABLE 11.—Private nonagr{cultural employment attributable to Vietnam in fiscal year 1968,
and employment changes from 1968 III to 1970 III
Vietnam-attributed employment in
fiscal year 1968
Change in total employment, 1968 III to 1970 III
Percent
of total
industry
Percentage
change
Industry
Total i
Manufacturing.
Ordnance and accessories
Aircraft and parts
Machine shop products
Radio, television, and communications
equipment
Electronic components and accessories.
Other transportation equipment
Metals manufacturing
Other manufacturing
Services.
Transportation and warehousing
Business services
Medical and educational services and
nonprofit organizations
Other services
1
Change in
number
(thousands)
employment
Number
(thousands)
Percent
distribution
1,392.5
100.0
2.4
1,684
3.0
948.1
68.1
4.9
-493
-2.5
140.3
232.6
32.8
73.9
41.4
20.1
57.0
350.0
10.1
16.7
2.4
42.3
27.3
14.4
-30.2
-21.9
-3.2
5.3
3.0
1.4
4.1
25.1
11.1
11.1
6.7
4.4
2.3
-103
-187
-7
-52
-38
4
7
-103
-J
412.6
29.6
1.3
164.8
49.8
11.8
3.6
6.2
2.3
2,164
21
232
34.6
163.4
2.5
11.7
.7
.8
724
1,187
-7.7
-10.0
1.3
6.6
.8
10.2
14.2
5.2
Construction.
14.7
1.1
.5
9
.3
Mining
17.1
1.2
2.8
4
.6
Includes wage and salary employment; excludes self-employed.
Source: Department of Labor.
employing large numbers of defense workers. Aircraft, ordnance, and transportation together accounted for about 40 percent of the additional defenserelated employment generated by the Vietnam buildup. These industries
have consequently been most strongly affected by the cutbacks in defense
spending occasioned by the withdrawal.
As shown in Table 11, manufacturing employment declined by 2.5 percent from the third quarter of 1968 to the third quarter of 1970, while
total private wage and salary employment in nonagricultural industries increased by 3.0 percent. Most of the decline occurred in those manufacturing
industries where a significant part of the employment was attributable to increased defense spending during the Vietnam buildup. Over half the decline
in manufacturing employment occurred in the ordnance and aircraft industries, precisely those where employment attributable to Vietnam spending
was particularly high.
Workers producing goods and services for defense are generally more
skilled than the civilian labor force as a whole. Among white-collar workers
a higher percentage of professional and managerial workers were employed
in defense-generated jobs than in the entire economy. Among bluecollar workers, craftsmen and operatives were also more strongly represented
in defense-generated employment (Table 12). The larger relative increases
in unemployment from the third quarter of 1969 to the third quarter of
1970 for more highly skilled white-collar and blue-collar workers were in
411-364 O—71
45
TABLE 12.—Civilian employment attributable to defense expenditures•, by occupational
group, fiscal year 1968
Defense-generated employment1
Occupational group
Number
(thousands)
Total
Professional and technical workers
Managers, officials, and proprietors
Sales workers
.. .
Clerical and kindred workers
Craftsmen, foremen, and kindred workers
Operatives (semiskilled)
Service workers
. .
Laborers and farm workers
Percentage
distribution
Percentage
distribution of
total wage and
salary
employment
4,700
100.0
100.0
680
414
112
830
949
1,233
219
260
14.4
8.8
2.4
17.6
20.1
26.4
4.6
5.5
14.1
8.3
6.3
18.8
14.1
20.8
10.6
6.9
1
Employment estimates cover wage and salary employees in the United States where pay is attributable to military
functions of the Department of Defense. They do not include self-employed or domestic workers or U.S. citizens employed
abroad other than military personnel. Farm employment, however, does include self-employed and unpaid family workers.
Note.—Detail will not necessarily add to totals because of rounding.
Source: Department of Labor.
part a consequence of the sharp reduction in defense employment, in which
these workers were more heavily concentrated.
Skilled workers in certain categories, such as engineers, were heavily
dependent on defense spending for their employment (Table 13). The estimated unemployment rate for engineers increased from 0.5 percent in the
third quarter of 1968 to 2.4 percent in the third quarter of 1970. Nearly 60
percent of all the jobs for aeronautical engineers were generated by defense
spending in 1968. Nearly 40 percent of all physicists were dependent
on defense spending. A large number of airplane mechanics were employed
in defense-related work, and over 50 percent of the skilled workers in this
category relied on defense spending.
The geographic concentration of defense-related employment (Table 14)
has also been an important factor in the uneven impact on the economy of
TABLE 13.—Civilian employment attributable to defense expenditures for selected
narrow occupational categories^fiscalyear 1968
Defense-generated employment
Occupational category
Percent of total
employment
in group
Technical engineers^
Aeronautical engineers
Electrical engineers
Mechanical engineers
Physicists
Machinists
Pattern and modelmakers
Sheetmetal workers
Airplane mechanics
_
i Includes some groups not shown separately.
Source: Department of Labor.
46
reduced defense spending. Major declines in demand for defense production
have, of course, directly reduced the jobs available in affected areas and
often prompted specialized workers to look for new employment in other
locations. The multiplier effects applicable to areas with significant reductions in defense employment have further reduced demand in those areas
for a wide range of economic activities.
TABLE 14.—Geographical distribution of employment reductions in defense-related manufacturing
industries, December 1967 to June 1970
Percentage
distribution of
reductions
State
Total
100.0
.
California
Pennsylvania
Missouri .
New York
..
Maryland
Texas
Illinois, Indiana, Massachusetts, Michigan, Minnesota. New Jersey Ohio, Virginia and
Washington 1
"
.
All other States
34.8
8.1
7.2
4.5
3.9
3.9
19.8
17.6
i Range from 1.3 to 3.0 percent of total.
Note.—Detail will not necessarily add to totals because of rounding.
Source: Department of Defense.
Employment attributable to defense spending is most heavily concentrated in the Pacific Coast States and New England. Military procurement,
the major category of defense spending that grew most rapidly from fiscal
year 1965 to 1968 during the Vietnam buildup and also accounted for twothirds of the decline in budget outlays from fiscal 1969 to 1971, appears
to be even more highly concentrated geographically. In recent years prime
contracts for military procurement awarded to firms based in California accounted for nearly 20 percent of the total value of all contracts. In fiscal
year 1970, firms based in California, Connecticut, Massachusetts, New
York, and Texas received almost 50 percent of the total value of prime
contract awards for procurement. Actual production work may of course
take place in other States; these data indicate only where most of the final
processing and assembly occurs.
State-insured unemployment in California, Connecticut, and Massachusetts showed larger than average increases from the third quarter of 1969 to
the third quarter of 1970—about 2 percentage points compared to 1.4
for the Nation as a whole. In contrast, State-insured unemployment rose by
only 1.3 percentage points in New York, and 0.7 percentage points in Texas.
The increases in New York and Texas may have been smaller than average because the relative impact of defense cutbacks was small in both
States, but of course other factors are also at work. In the State of Washington, for example, insured unemployment increased by 5.7 percentage
points as a result of declines not only in military procurement but also in
the demand for civilian aircraft and lumber. Michigan also experienced a
relatively large increase of 2.6 percentage points in insured unemployment
47
during the year, because production of consumer durables and autos is
heavily concentrated there.
Nearly 35 percent of reported reductions in defense-related employment
occurred in California (Table 14), disproportionately affecting the jobs of
scientists and engineers in the aerospace industry in Southern California.
Several other States experienced significant shares of the reduction in defenserelated manufacturing employment, but the other reductions in employment
were in general smaller and less concentrated geographically than in California. Local labor market adjustment problems were experienced by many
communities throughout the Nation, of course, where firms producing defense
products were a major source of employment in the locality.
To assist in the adjustment of communities seriously affected by defense
cutbacks, the President on March 4, 1970, set up an Interagency Economic
Adjustment Committee under the chairmanship of the Secretary of Defense.
The Committee brings together two kinds of agencies. One group has economic adjustment itself as a primary function; this includes the Manpower
Administration of the Department of Labor, the Economic Development
Administration, the Small Business Administration, the Department of Agriculture, and the Council of Economic Advisers. The other group carries on
functions that significantly affect the location of economic activity although
this effect may not be the main purpose; this includes the Departments of
Interior, Health, Education, and Welfare, Housing and Urban Development,
and Transportation, as well as the General Services Administration. The
Department of Defense, drawing upon its long experience with base-closings
and similar problems, provides leadership as well as other resources.
The fundamental purpose in the Committee's approach is to assure that
all the services and facilities of the Federal Government are available to the
affected communities. Although the Committee provides general guidance
and support, its work is carried on by task forces organized for each community being served. The task force visits the community and assists the
local leaders, whose initiative is indispensable, to prepare a plan for action.
Heavy emphasis is placed on the involvement of the private sector in the
community leadership structure and the execution of the economic adjustment plan. The plan would be tailored to the local situation; there is no
common blueprint. Each plan would attempt to mobilize private, municipal,
State, and Federal resources to create an economic base which will utilize
the local labor and capital. The Federal contribution to the combined effort,
in addition to advice, may include economic and engineering surveys, public
facilities grants, small business loans, surplus real property, and funds for
manpower training programs, as well as Federal expenditures to carry out
a variety of programs. Not all of this help is available or would be useful in
each case. Moreover, some hardships and dislocations are unavoidable as
cutbacks are made in areas where defense employment has been a large part
of the total. However, the Committee's operations have served in a number
of cases to ease the transition from defense-related industry.
PRICES AND WAGES
The purpose of slowing down the rise in demand from 1969 to 1970
was to moderate the rise of prices. On this subject two things can be said.
First, the evidence for the year suggests that the purpose is being achieved:
the rate of inflation is subsiding and the impact upon different prices and
costs is approximately in line with what might have been expected. Prices,
first of raw materials and then of finished goods, began rising less rapidly;
and wages of unorganized workers also began to rise more slowly, although
the rate of increase for organized workers has not yet shown this change.
Second, the process of disinflation during the year, given the degree of economic slack that has existed, has been disappointingly slow.
PRICES, COSTS, WAGES, AND PRODUCTIVITY
The rate of inflation for the most comprehensive price measure, the GNP
deflator, reached a peak in the first quarter of 1970; in the next three
quarters it recorded smaller rates of increase than in the first (Table 15).
The difference is accentuated by the fact that the first-quarter index includes
a Federal Government pay raise, which had the effect of adding 1.2 percentage points to the annual rate of increase in that quarter. The movement
of the deflator within the year was slightly upward in the third quarter and
sharply upward in the fourth, but these changes are mainly a reflection of
the auto strike, given the nature of the deflator.
The deflator employs current period weights and is sensitive to shifts in
output toward or away from goods and services whose prices have risen
much more or much less than the average since the index base period
(1958). The price of new automobiles has risen much less than average
since 1958, and the overall deflator is greatly influenced by shifts in auto
production. This is brought out clearly in Table 15, which shows the deTABLE 15.—Changes in GNP deflators {total and excluding autos) and in real gross auto
product, 1969 1-1970 IV
[Seasonally adjusted]
Percentage change from preceding quarter
Implicit price deflators
(annual rates)
Quarter
Real gross
auto product
Total GNP
1969: 1
II
III
IV
1970: 1
II
.
Ill
IV i
1
.
Preliminary.
4.7
50
5.6
4.9
5.2
45
6.1
4.7
2.8
-9.8
7.5
-5.3
6 4
43
46
6 2
-13 9
13.7
-3.3
-36.8
5.7
Source: Department of Commerce.
49
GNP excluding
autos
4.9
4.2
4.2
flator, the deflator calculated by excluding auto GNP (column 2), and the
associated movement in real auto GNP (column 3).
A partial solution to this problem is provided by the use of base period
weighted indexes, which is the method used to construct conventional
indexes like the consumer price index and wholesale price index. It is not an
ideal solution mainly because weights may become outdated as relative prices
and buying habits change. For such a purpose the Commerce Department
has calculated three alternative measures of total price change that use base
period weights; for two of these alternatives the weights are fixed (columns
2 and 3 of Table 16). All three of the alternatives show a retardation of the
price rise as compared to the first quarter, but in varying degrees. Two of the
three show an acceleration from the third to the fourth quarter.
Although it is helpful to look at prices for the whole economy a better
picture is obtained by looking at the private nonfarm sector, where some of
the relationships among prices, costs, and wages may be seen. When this is
done for the past 2 years or so it is apparent that both the rate of price increases and the rate of wage increases have been fairly stable (Table 17).
However, the rate of increase of productivity improved markedly after the
first quarter of 1970 and correspondingly reduced the rate of increase of unit
labor costs. During the earlier quarters, the rapid rise of unit labor costs was
absorbed in a reduction of other components of price, essentially in profits
per unit. As unit labor costs slowed down, profits per unit recovered somewhat later but they remained exceptionally low.
More cost detail is available for the nonfinancial corporate sector. Here
too it may be seen that a slower rise in unit labor costs from the first to the
third quarter was not matched by a slower rise in prices. All nonlabor costs
taken together continued to rise very rapidly, even though the pace was
somewhat less than it had been over the preceding half year. Profits per unit
TABLE 16.—Alternative measures of price changes for gross national product,
1969 1-1970 IV
[Seasonally adjusted annual rates]
Percentage change from preceding quarter
Quarter
Alternative deflators for GNP
Implicit
GNP
deflator
I
1958
weights
1965 IV
weights
•
Chain
1969: I
II
III
IV
4.7
5.0
5.6
4.9
4.5
5.2
6.5
5.3
4.5
5.0
6.1
5.0
4.5
4.9
6.0
4.9
1970: I
II
III
IV i
6.4
4.3
4.6
5.7
6.4
5.1
4.9
4.9
5.9
5.0
4.7
5.0
5.9
5.0
4.4
5.0
i Preliminary.
Source: Department of Commerce.
50
TABLE 17.—Changes in costs and prices in the total private nonfarm economy and in
nonfinancial corporations, 1967 III to 1970 HI
Percentage change (seasonally adjusted annual rates)
Item
1967 III
to
1968 III
1968 III
to
1969 III
1969 III
to
1970 III
1969 III
to
1970 1
7.2
2.5
4.5
2.7
3.5
6.8
.0
6.8
1.2
4.5
7.0
1.4
5.5
1.2
4.7
7.2
-1.3
8.6
1.1
4.5
6.8
4.2
2.5
1.3
4.9
2.5
4.2
1970 1
to
1970 III
Total private nonfarm economy:
Labor compensation per man-hour
Output per man-hour
Unit labor costs
Real compensation per man-hour
Prices (deflator)
.
..
Nonfinancial corporations:
3.7
4.2
4.1
Labor compensation
Corporate profits and inventory valuation adjustment. .
Other costs
2.4
5.6
5.7
8.5
3.0
3.6
2.2
-5.8
5.5
-12.4
9.2
-25.5
10.7
2.9
7.7
Capital consumption allowances
Indirect business taxes plus transfer payments
less subsidies
Net interest
.0
3.7
8.9
11.0
6.9
2.0
13.0
4.9
15.4
9.3
10.0
9.5
13.8
9.0
6.3
Total price per unit of output i
* Current dollar cost per unit of 1958 dollar gross product originating in nonfinancial corporations.
Sources: Department of Labor and Department of Commerce.
rose moderately as businessmen attempted to bolster margins that had been
squeezed badly in the preceding half year and had declined the year before.
Even with the rise in the second and third quarters of 1970, unit profits were
lower than at any time since 1961, except for early 1970.
CONSUMER PRICES
The consumer price index increased at a seasonally adjusted annual rate
of 5.6 percent from the end of 1969 to November 1970 after a 6.1-percent
rise during 1969; the latter was the largest increase since 1947. There was
little evidence of a slowdown in the first half of 1970, when the total index
rose at an annual rate of 6.0 percent; but from June to November the rate of
advance eased to 4.6 percent (Table 18 and Chart 4). Sharply reduced rates
of increase for food and more moderate reductions in the rise of service prices
accounted for the general deceleration from June to November. Because
services carry a larger weight than food in the CPI, the slowdown in the total
CPI from the first to the second half of 1970 was influenced more by services,
with its lesser slowdown, than by food, with its sharp deceleration. Prices of
nonfood commodities showed about the same rate of increase in both periods.
Prices of services continued to rise much more rapidly than average in
1970 but slowed down from a 9.2 percent annual rate of increase in the
first half to 7.1 percent in the second. Most of the broad categories of services showed a similar pattern. The most pronounced slowdown, although
rates were very high to begin with, occurred in household services excluding
rent, where as a result of easing in credit markets interest rates leveled out
after very sharp increases in the first half (mortgage interest rates are in-
TABLE 18.—Changes in consumer prices, 1969-70
[Seasonally adjusted except as noted]
Percentage change (annual rate)*
1969
Contribution to
total percentage
change in 1970 2
1970
Group
First
half
All Items
Second
half
First
half
Second
half 3
First
half
Second
half s
6.4
5.9
6.0
4.6
6.0
6.2
8.2
3.3
.9
.7
.2
5.3
3.5
4.6
4.5
1.9
1.8
Durable commodities*
New cars
- . _.
Household durable commodities...
5.6
2.4
5.1
3.4
2.0
1.7
5.5
1.9
2.8
5.3
8.7
3.2
.9
.0
.1
.9
.2
.2
Nondurable commodities
Apparel commodities
Other nondurable commodities * . _
Fuel oil and coal
5.0
5.7
4.6
6.0
4.0
5.0
3.3
3.6
2.9
4.1
7.0
4.1
5.0
4.2
8.9
.9
.3
.6
.0
1.0
.5
.6
.1
7.7
3.1
9.6
8.0
9.3
4.3
7.1
4.3
9.4
9.0
4.8
5.2
9.2
4.0
11.1
11.8
8.8
6.1
7.1
4.5
8.3
10.4
7.4
5.3
3.3
.2
1.6
.6
.5
.4
2.6
.2
1.2
.5
.4
.3
6.6
5.4
7.0
5.3
6.8
5.0
3.5
4.9
8.0
3.2
6.1
6.0
6.7
4.7
6.9
5.4
Food
--
Commodities less food
Services 5
Rents
.
Household services less rent
Transportation services
Medical care services
Other services.
Special groups:
Housing5
Apparel and upkeep
Transportation
Health and recreation 5
4.6
1 Percentage change over the period indicated, i.e., from December 1968 to June 1969 for the first half of 1969.
2 Based on the relative importance of groups in the December 1969 index, not seasonally adjusted. Calculations by Council
of Economic Advisers.
3
June to November; December not available.
4
Includes some groups not listed.
5
Not seasonally adjusted.
Source: Department of Labor (except as noted).
eluded in the service section of the CPI). Cuts in conventional mortgage
rates in late 1970 are already being reflected in the CPI, but the reduction,
announced in early December, in the maximum permissible rates on VA
and FHA mortgages will not be apparent until January and February,
respectively.
Perhaps the greatest disappointment on the price front has been the behavior of nonfood commodities, which in the past have typically responded
with a lag to a weakening in demand. In the second half of 1969, for example, there was some suggestion that this pattern would be repeated, since
prices rose at a distinctly slower pace than was evident in the first half of that
year. However, the rate of inflation in this category accelerated in the first
half of 1970 to 4.6 percent and failed to slow down in the second, at least
through November.
The most pronounced acceleration was evident for new cars. Car prices
failed to show the usual discounts this past summer, apparently because
dealers expected a strike. In October and November, substantially higher
suggested retail prices on the 1971 models were announced by car manufacturers. The BLS index for new cars in November showed a 5-percent
rise over a year earlier, the largest such gain in over 10 years.
52
Chart 4
Changes in Consumer Prices
PERCENTAGE CHANGE FROM 6 MONTHS EARLIER
1/
SEASONALLY ADJUSTED ANNUAL RATES
10 -
SERVICES.!/
\
/
\
/
V
8
i
i
_
\
*
/
^
6
\
/
_ /
^ ^
4
\
f
ALL ITEMS
-
2 -
n
-
I
I 1
1 1
1 1i i i
|
1
1 1 1 1 1
1 1 1 1 1 1 1 1 1
1969
1968
11
1 1
1 1 1
1970
10
SEASONALLY ADJUSTED ANNUAL RATES
FOOD
%
/
- ^ ^ —
/
NONFOOD
COMMODITIES
v
I
I I I I 1 I I I I I 1 1 I I I I 1 I I I I I I I 1 I I I 1 I I I \\ I
1968
1969
1970
i/CHANGES BASED ON UNADJUSTED INDEXES SINCE THESE PRICES HAVE LITTLE SEASONAL MOVEMENT.
SOURCE: DEPARTMENT OF LABOR.
53
An acceleration of price increases was also evident in apparel, where demand has not been strong and where competitive markets are the rule. The
failure of these prices to slow down would support the cost-push explanation of price behavior unless what we now see is only the prelude to a very
slow response to the weakening in demand. Prices of fuel oil and coal and
gasoline also rose more rapidly in the second half.
Retail food prices continued to increase in the first quarter of 1970 after
having risen sharply in the final quarter of 1969. Although the rise from
March to November was only 1 percent at an annual rate some decline
might have been expected in view of falling farm prices. Two conditions
explain the fact that food prices did not fall. First, about 60 percent of the
final costs of food are accounted for by the spread between farm prices and
the retail prices of food purchased for home consumption. In 1969 this
spread rose 1.9 percent, somewhat more than in previous years. But in the
third quarter of 1970 the spread broadened substantially to 7.1 percent above
the spread in the same period a year earlier. The spread normally widens
when farm prices are falling and narrows, at least temporarily, when farm
prices are rising. In part, the sharp gains in 1970 reflect the acceleration of
the increases in wages and other processing and marketing costs that have
resulted from the inflation of the late 1960's. The second factor was the
continuing rapid rise in the prices of food eaten away from home, a reflection
of substantial increases in restaurant operating costs.
WHOLESALE PRICES—INDUSTRIAL
Wholesale prices rose 2.3 percent from December 1969 to December
1970 after a 4.7-percent rise during 1969. The pronounced slowdown was
mainly a reflection of the easing of upward pressures on prices of farm
products and foods, which had led the inflationary surge in 1969. The slowdown in the rise of industrial products was much smaller—from 3.9
to 3.6 percent. The deceleration of the WPI within 1970 was mainly a reflection of industrial prices, which advanced at a 3.8 percent annual rate
from December to June and at a 3.4 percent rate from June to December
(Table 19 and Chart 5).
Prices of several industrial categories either declined or rose more slowly
in the second half than in the first—textiles, paper, metals, furniture, and
nonmetallic mineral products—and for some of those that accelerated, such
as hides and rubber, the rate of inflation from June to December was not
high. Prices of metals and metal products declined in the second half after
rising at a 10-percent rate from the beginning of 1969 to mid-19 70. The
falling world market for copper and other nonferrous metals was a major
factor in this development. Prices of ferrous and nonferrous scrap dropped
late in the year. Prices of iron and steel mill products rose little after midyear
following exceptionally large increases in the first half.
Prices of three important groups showed accelerated increases during
1970—fuel, transportation equipment, and machinery and equipment. A
54
TABLE 19.—Changes in wholesale prices, 1969-70
[Seasonally adjusted except as noted]
Percentage change (annual rate) l
Commodity group
1969
First half
All commodities..
Farm products
Processed foods and feeds..
Industrial commodities
Textile products and apparel
Hides, skins, leather, and related products..
Fuels and related products and power
Chemicals and allied products
Rubber and plastic products
Lumber and wood products
Pulp, paper, and allied products
Metals and metal products
Machinery and equipment
Furniture and household durables..
Nonmetallic mineral products
Transportation equipment 2
Miscellaneous products
1970
Second half
First half
Second half
5.3
4.2
2.6
2.1
10.5
9.0
3.6
5.8
4.7
4.2
-5.3
1.0
3.8
-3.4
.7
3.4
.6
3.7
4.5
1.0
1.0
-7.3
5.3
9.5
3.3
2.5
5.6
.6
3.9
2.9
2.3
3.3
1.4
5.3
-9.5
3.1
10.0
5.2
2.0
4.1
4.8
3.7
1.0
.3
3.5
3.1
.4
-5.2
4.2
9.0
4.1
3.0
5.0
1.2
6.5
-1.7
1.9
17.3
2.6
2.4
-3.6
1.5
-2.8
4.6
2.0
4.6
11.1
2.6
16.2
4.1
4.6
1.3
3.8
5.0
2.0
4.3
1.3
-5.0
2.3
3.1
8.1
2.5
2.0
3.4
7.9
4.0
2.2
5.5
-2.8
2.6
2.7
3.7
-2.0
4.8
5.9
6.2
By stage of processing:
Crude materials for further processing
Intermediate materials, supplies, and components.
Finished goods (including raw food and fuel)
Consumer finished foods
Other consumer nondurable goods..
Consumer durable goods
Producer finished goods
1
Changes are shown over the period indicated; i.e., December 1968 to June 1969 for first half of 1969.
2 Not seasonally adjusted.
Source: Department of Labor.
variety of supply problems, discussed in Chapter 4, was mainly responsible
for substantial rises of spot prices of coal, coke, petroleum, and gas. Electric
power rates quickly responded to these increased costs of primary energy
with the largest increases in many years. Rising costs, chiefly of labor, in the
face of sluggish demand were the key factors in the accelerated rise in
equipment prices.
FARM PRICES
Prices received by farmers reached high levels in early 1970, after a rise
that began late in 1968. Reduced supplies of livestock commodities, particularly of eggs and hogs, accounted for much of the increase. Fruit and vegetable prices also rose substantially, but field crop prices were relatively stable
in the early part of 1970. As a whole, farm prices were 8J4 percent higher
in the first quarter of 1970 than in the first quarter of 1969.
Beginning in April, farm prices started a downward path, and by October
they were lower than a year earlier. Prices of livestock led the declines. A
sharp increase in supplies of hogs in the third and fourth quarters continued
the downward pressure on livestock prices.
Crop prices followed a pattern just the reverse of livestock. After sta-
55
Chart 5
Changes in Wholesale Prices
PERCENTAGE CHANGE FROM 6 MONTHS EARLIER
SEASONALLY ADJUSTED ANNUAL RATES
ALL COMMODITIES
1
I
I
I
I
I
I
1 I
I
I
I
I
1 I
I
1968
I
I
I
I
1 I
I
I
I
I
I
1 I
I
I
I
I
1970
1969
SEASONALLY ADJUSTED ANNUAL RATES
8
-
INDUSTRIAL COMMODITIES
EXCLUDING LUMBER AND
W O O D PRODUCTS
6 -
4
ALL INDUSTRIAL
COMMODITIES
\
\
_-
/
2
-
j
-
1
1 1 1 1 1 |
|
|
|
|
1968
SOURCE: DEPARTMENT OF LABOR.
1 1 1
1 1 11
1969
I
1 1 1 1
1 1 1 1
1970
1 1 1 I 1
bilizing in the first quarter, crop prices were stronger through the remainder
of the year. To some extent the rise in these prices was a consequence of
Federal cropland adjustment programs, which had diverted substantial
acreage from production in the past 2 years, and the large stocks of commodities built up earlier were thus somewhat diminished. In addition, export
demand, particularly for wheat and soybeans, was strong during the year.
But the most important influence was an unexpected loss of 15 percent of
the anticipated corn crop because of poor weather in the western corn belt
and a new strain of corn leaf blight, which spread from the South into several
major States in the corn belt.
Higher crop prices in the second half of 1970 were more than offset by
declining livestock prices, so that farm prices as a group declined through
the year. Because prices were relatively high early in 1970, however, the
1970 average exceeded that of 1969 and indeed was the highest since the
peaks of 1951-52.
WAGES AND COMPENSATION
The large wage increases that have become common in recent years continued with few exceptions in 1970. Compensation per hour in the
private economy increased by 7.1 percent in 1970, showing little change from
the 7.2-percent rate of increase in 1969. Although increases in average gross
hourly earnings (Table 20) were smaller in 1970 than in 1969 in all industries except contract construction and wholesale trade, most of this
slowdown appears to have been due to reductions in overtime and to relative
and absolute declines in employment in high-wage industries. Large numTABLE 20.—Increases in average gross hourly earnings of private nonagricultural production
or nonsupervisory workers, 1960-70
Percentage change per year
Industry
1960
1965
to
1966
to
1965
1967
to
1968
to
1968
1969
1969
to
19701
4.5
4.7
6.3
6.7
5.9
2.3
3.7
2.9
4.5
5.1
4.2
4.6
5.7
4.0
5.0
7.3
6.4
7.5
8.4
6.0
6.7
9.2
5.3
Durable goods
Nondurable goods..
2.8
2.9
3.9
3.8
3.4
4.9
6.3
6.6
6.3
6.2
5.0
5.8
Wholesale and retail trade..
3.5
4.9
5.2
7.1
6.7
5.9
Wholesale trade..
Retail trade
3.1
3.7
4.6
4.9
5.5
5.2
5.9
7.5
5.9
6.5
6.5
6.1
3.4
25.7
2
5.2
3.3
5.9
2.6
4.5
5.5
4.2
6.6
6.1
5.6
6.2
8.2
6.1
5.1
8.0
6.1
Mining
Contract construction.
Manufacturing
..
Finance, insurance, and real estate..
Services
Transportation and public utilities..
2
to
1967
3.2
Total private-
1
1966
Preliminary.
Data not available for years 1960 through 1963; percentage change from 1964 to 1965.
Note.—Data relate to production workers in mining and manufacturing, to construction workers in contract construction,
and, generally, to nonsupervisory workers in all other industries.
Source: Department of Labor.
57
bers of relatively high-wage automobile workers were, of course, off the
payroll during the General Motors strike and their omission accentuated the
apparent slowdown in average earnings. Moreover, quarterly data show that
in most industries hourly earnings were rising more rapidly in the second
half of the year than in the first.
Wage increases negotiated under major collective bargaining agreements
continued to accelerate in 1970. Median first-year increases in wages and
benefits were 12.4 percent compared to 10.9 percent in 1969 and 8.1 percent
in 1968 (Table 21). Median increases averaged over the life of the contract
were 8.8 percent in 1970, indicating the continuation of "front-end loading"
of collective bargaining agreements.
Reports of large wage increases in individual collective bargaining agreements can give a misleading view of wage and compensation changes in the
entire economy. Although the collective bargaining calendar was heavy in
1970, only about 6 percent of the civilian labor force was involved in major
collective bargaining settlements during 1970, that is, settlements involving
1,000 or more employees. Furthermore, the size of settlements and the pattern
of increases during the past few years have varied widely among industries.
First-year wage settlements in manufacturing industries, which include
about 50 percent of all the workers covered by agreements negotiated in
TABLE 21.—Wage and benefit decisions, i \965-70
Median an fiual
perceni age rate of increase in decisions reached in—
Measure
1966
1965
1967
1968
1969
19701
Major collective bargaining situations'. 2
Wage and benefit change (packages):
Over life of contract
First year
---
3.3
(3)
4.0
5.8
5.2
7.3
6.0
8.1
7.4
10.9
8.9
12.4
Negotiated wage-rate increases averaged over
life of contract:
-
*3.3
3.9
5.0
5.2
6.8
8.8
Manufacturing
Nonmanufacturing
<3)
(3)
3.8
3.9
5.1
5.0
4.9
5.9
5.8
8.5
6.6
12.3
3.9
4.8
5.7
7.2
8.0
10.2
7.0
10.0
8.0
15.7
All industries
Negotiated first-year wage-rate increases:
All industries
--
Manufacturing
Nonmanufacturing
4.1
3.7
4.2
5.0
6.4
5.0
6.9
7.5
3.7
4.2
5.3
6.0
6.2
7.0
3.6
4.0
4.1
4.4
5.5
5.0
6.5
5.0
6.9
6.0
7.7
5.5
Wage increases in manufacturing:
All establishments
Union establishments
Nonunion establishments
i Preliminary. Based on final dafa for first 9 months.
» Except for packages, data are for contracts affecting 1,000 workers or more. Package cost estimates are limited to settlements affecting 5,000 workers or more (10,000 in 1965). The package cost of a few settlements affecting relatively few
workers has not been determined.
' Not available.
* Based on settlements affecting 10,000 workers or more.
Note.—Possible increases in wages resulting from cost-of-living escalator adjustments (except those guaranteed in
the contracts) were omitted.
Source: Department of Labor.
1970, averaged 8.5 percent (mean). Quarterly increases in negotiated firstyear wage adjustments in manufacturing have shown no acceleration since
the second quarter of 1969. During the same period, mean first-year wage
adjustments in nonmanufacturing rose substantially, from 10.7 to 15.1
percent.
Wage rate increases in nonmanufacturing industries accelerated much
more rapidly than those in manufacturing (Table 21), mainly because of
the large settlements in contract construction and trucking. First-year wage
increases in construction were 15.7 percent in the first 9 months of 1970; increases over the life of the contract were 13.4 percent. As shown in Table
22, over 50 percent of the construction workers affected by these settlements received first-year wage increases of 15 percent or more, compared to
only 5 percent of similarly affected manufacturing workers.
The contrast between the rate of increase in wages in manufacturing and
the rate in nonmanufacturing is also evident in the deferred wage adjustments that go into effect in 1971. Deferred increases averaged 4.9 percent in
manufacturing, as compared to 10.8 percent in nonmanufacturing and 13.3
percent in construction.
Changes in overall wage rates reflect both the proportion of workers receiving increases and the size of the increases they receive. Although new
wage increases for nonunion workers in manufacturing have been lower
than those for unionized workers since 1963, median increases in
overall (effective) wages for nonunion workers have exceeded those for
unionized workers in 4 out of 5 years ending with 1969. The prevalence of
long-term collective bargaining agreements in recent years has resulted in a
TABLE 22.—First-year changes in wage rates in collective bargaining agreements
covering 1,000 workers or more negotiated in the first 9 months of 1970
Percent of workers affected
Type and amount of wage-rate actionl
Nonmanufacturing
All industries
Manufacturing
Construction
Total
Total increases.
Under 5 percent
5 and under 7 percent...
7 and under 9 percent...
9 and under 11 percent..
11 and under 13 percent.
13 and under 15 percent.
15 percent and over
Number of workers (thousands)_
Mean adjustment (percent)
Median adjustment (percent)
100
100
100
100
1
6
25
20
10
5
33
1
11
46
31
3
2
5
1
2
12
12
15
6
52
(2)
2,601
13.2
10.2
1 Percent of estimated average hourly earnings, excluding overtime.
2
Less than 0.5 percent.
Note.—Data are preliminary.
Detail will not necessarily add to totals because of rounding.
Source: Department of Labor.
59
1,009
8.5
8.0
1,592
16.0
15.7
(2)
5
11
14
16
53
504
17.5
15.7
more sluggish response of overall wage changes of unionized workers to economic conditions, but the new increases they received were correspondingly
larger.
Agreements negotiated in the first 9 months of 1970 called for wage
increases for unionized workers in manufacturing that were higher than those
specified in agreements in the same period of 1969, and almost all workers
received some increase. For the nonunion sector, however, both the relative
number of workers receiving increases and the size of the increases they
received in 1970 were lower than in the first three quarters of 1969. Hence,
overall wage increases in the nonunion sector of manufacturing can be expected to show a significant slowdown for the year as a whole.
WHY IS THE INFLATION SO STUBBORN?
Even though there are now signs that the rate of inflation is subsiding,
it is certainly also true that the inflation has been and remains exceptionally persistent. Observation of previous inflationary experience, such as that
of 1955-57, suggests that, while the absolute level of prices is unlikely to fall,
the rate of increase of prices is likely to decline after a moderate lag as slack
in the economy emerges. More sophisticated econometric analysis of the relation between the behavior of prices and a large number of variables that
might help to explain it—such as the level and rates of change of unemployment, the gap between actual and potential output, past prices, and the
like—did not generally predict the rate of inflation experienced in 1970,
given the actual conditions in 1970.
Though the reasons for the stubbornness of the inflation in 1970 are not
fully clear, two main explanations are usually offered. One relates the persistence of the inflation, after corrective measures have been taken, to the
duration and magnitude of the preceding inflationary boom and to the historical context in which it occurred. The other would trace the cause to
structural changes in the economic system, especially but not exclusively connected with the concentration of economic power.
The first explanation relies heavily on the momentum built up by the
inflationary pressure which began in mid-1965 and continued well into
1969, although by then steps had been taken to curb it. This was already
a long inflation that had reached a rate not equaled since the first quarter
of 1951, and it generated a momentum exponentially greater than, although not qualitatively different from, that experienced earlier. The meaning of "momentum" can be illustrated by the behavior of wages. There
were in 1970 a large number of built-in wage increases—the second- and
third-year increases provided for by contracts negotiated in 1968 and
1969. Since these contracts had been negotiated in highly inflationary circumstances, the second- and third-year increases they provided were large,
larger than the corresponding increases of earlier years. Many new contracts negotiated in 1970 were successors to those that had been arranged in
1967, a year when demand was weak and some thought that the inflation
6o
might be ending. There was naturally great pressure in the new 1970 contract negotiations to catch up not only with the wage increases others had
already gained but with the increases that had already occurred in the cost
of living. After so many years of rising prices there was also a strong desire to
incorporate in wage increases some protection against cost-of-living increases
expected for the future.
These demands and expectations were not confined to union members.
They were also present in the relations between unorganized workers and
their employers. Such demands might not always have been fully met, but if
they were to be resisted a marked or long period of economic slack and consequently poor profits would be required. This was especially true because the
expectation of continued inflation had pervaded the whole system. Such an
expectation, whose origins and strength may not be found entirely in price
statistics, may have a powerful effect. For example, the outbreak of the
Korean war revived the memories of World War II shortages and inflation
and probably caused more inflation in 1950 than the objective situation
justified. Similarly, in the late 1960's the fact that prices kept rising, despite
the jawboning of 1966, despite the slowdown of 1967, and despite the tax
increase of 1968 fortified the expectation of more inflation.
The momentum of inflation was not confined to wages. It can also be seen
in the lagged rise of interest costs, taxes, regulated rates, and other costs or
prices that joined the inflationary stream late and have kept it running.
The other explanation of the persistent inflation is that the structure of
economic power and the motivation behind its use have changed in ways
that push prices and wages up more violently. Various observers with different viewpoints are impressed with the apparently irresistible agglomerations of power represented by large corporations or unions. It is difficult to
find objective evidence that this powrer on either side has increased in recent
times, but it may have. There may also be in the economic sphere, as apparently in other aspects of our social life, a new impatience and restiveness about
the use of power. The militancy of many union members may be a manifestation of the more general disinclination to have regard for authority.
These hypotheses are intended to explain the same phenomenon, and
for the time being they may lead to the same results. But in a longer view
they have different implications. The implication of the first is that persistence in general restraint of demand will finally check the momentum of the
cost-price spiral and lead to a reasonably stable price-cost level. It is not
a theory of a permanent dilemma between rapid inflation and high unemployment; it is only a theory of slow response. The second does imply
that a permanent change in the response system has occurred, which could
not be controlled by ordinary anti-inflationary policy but might require
revision of economic and even social structures.
The two theories are not necessarily exclusive. It may be that the
economic power structure, though it is not radically different from that
of two decades ago and would not on its own cause persistent inflation,
6i
411-364 O—71
5
does tend to prolong a high rate of inflation, once such a movement is
generated by excessive demand. Reduction in the rate of inflation would
still be achievable in the face of that type of structure, but it would come
faster if the economic system were more competitive.
All of the foregoing discussion is based on the assumption that what we
observe about the behavior of prices and wages in the published statistics is
an accurate representation of events in the real world. We do not wish to
suggest that in broad terms what is actually occurring is different from what
the statistics indicate. But the statistics are far from perfect; and improved
statistics, particularly at a time of transition like the present, would be of
genuine help both to the policymaker and to the public at large. For the past
several months, for example, there have been scattered reports of discounting
from list prices in a number of industries. List prices tend to be reported in
the industrial component of the wholesale price index. It may well be that
discounting is not uncommon at present, just as premiums above list price
may have been common when excess demand was the rule. Similarly, our
data on wage rate changes in the non-unionized sector of construction and
other industries leave much to be desired.
The problem goes beyond prices and wages and indeed can be extended to
virtually all aspects of our economic statistics. Although this country has
better statistics than any other country, the appropriate criterion is not
whether we rank first but whether our data are doing the job that has to be
done. There is some evidence of a lag. For example, if we take account of
the Federal resources that have been devoted to the development of economic statistics since 1963 we find that the level of support has remained the
same while the real economy has increased by almost one-third. Furthermore,
we find we are asking much more of our data than formerly. If policy is
aimed at achieving specific responses in economic activity, we must have
more accurate statistical tools for measuring such changes. Better statistics
are the surest way we now have of improving our economic knowledge.
WAGE-PRICE POLICY
The persistence of inflation during 1970 in the face of mounting unemployment heightened interest in the possibility of doing something more
direct about rising prices and wages, in addition to restraining demand.
This subject had been under almost continuous consideration in the Administration since February 1969. During 1969 certain steps had been taken,
mainly with respect to the construction industry. In 1970, as the period
of general excess demand was left behind, opportunities for direct action
increased. In the absence of excess demand it was less likely that restraint
exerted upon particular prices and wages would only cause some others
to rise more, and it was more likely that the restraint would exert a cumulative anti-inflationary effect. Moreover, it was more probable that large price
increases would result rather from inertia and erroneous expectations than
from equilibrium adjustments to market conditions.
62
The Administration took action designed to supplement the effects of fiscal
and monetary policy on inflation in two ways. First, it sought to improve the
functioning of markets so that they would be less likely to generate unnecessary price and wage increases. Second, it sought to help business, labor, and
the public at large to recognize the kinds of behavior that would favor
progress towards a lower rate of inflation.
Actions to make the market a less likely source of inflationary pressure
continued to focus heavily on the construction industry, where costs had
kept on rising sharply. Steps were taken to increase the supply of skilled
labor, encourage technological advances, reduce the cost of seasonal variation in construction activity, and improve the structure of collective bargaining in the industry.
The Administration also conducted a study of pricing procedures in the
copper industry which may have contributed to subsequent price reductions.
Restrictions on importation and production of crude oil were relaxed in
order to restrain price increases for that commodity. Two, more general,
measures were the establishment of an interagency Regulations and Purchasing Review Board, to determine where Federal actions were driving up
prices and costs, and a National Commission on Productivity, to recommend public and private measures that would increase productivity and
thus, among other things, hold down the rise of costs and prices. (The activities of both of these bodies are described in later chapters of this report.)
The Administration's attempts to inform the public about the nature and
consequences of inflationary wage and price behavior were embodied in two
major addresses by the President, in June and in December. In his June
address the President announced that he was asking the Council of Economic
Advisers to prepare a periodic Inflation Alert to "spotlight the significant
areas of wage and price increases and objectively analyze their impact on the
price level." The Council has published two issues of the Inflation Alert and
intends to continue its publication at approximately quarterly intervals. The
more general findings in the 1970 issues of the Inflation Alert are described
in Chapter 2.
FINANCIAL DEVELOPMENTS IN 1970
The effects of the easier monetary policy of 1970 were evident throughout the money and capital markets, though other forces had a counter effect.
Long-term interest rates had reached historical highs at the end of 1969
as a result of heavy demands for credit and the tight monetary policy then
being pursued. After some decline early in 1970, these rates were surpassed
in June 1970, when greater .uncertainties in foreign and domestic affairs,
due particularly to increased tensions over developments in Southeast Asia
and the reorganization of the Penn Central Railroad, produced an increased
demand for liquidity. But since the middle of 1970 long-term bond rates
have declined, as signs of a weakening in inflationary pressures became
plainer and as other tensions subsided.
Rates on high-grade (Aaa) corporate bonds and municipals showed the
most decline (Chart 6). The rate on Baa corporate bonds has remained
almost unchanged. The spread between the Aaa and Baa bonds reflects the
premium that investors demand for holding riskier securities. This spread
typically increases during slack periods, when the economic outlook is uncertain. The demand for liquidity precipitated by the Penn Central reorganization, however, placed an added premium on quality investments. Short-term
rates reached their peaks at the end of 1969. Rates turned upward in May
and June of 1970 but did not surpass their previous highs. Since mid-1970,
short-term rates have declined substantially, showing more improvement
than long-term rates.
From the last, part of November 1970 through the middle of December
there was a sharp decline in both short- and long-term interest rates. The
Aaa corporate bond rate dropped 46 basis points to 7.59 percent, and the
Treasury bill rate fell 50 basis points to 4.78 percent between November 20
and December 18. Explanations for this abrupt decline in rates commonly
point to four causes: the reduction in the demand for short-term credit because of the General Motors strike, expectations of an easier money policy,
the present and expected sluggishness of business, and a reduction of inflationary expectations. It is still not certain, however, how important each of
these causes has been and why, aside from the strike, they became so
powerful in November and December.
Greater fluctuations in short-term rates compared with long-term rates
are consistent with the past cyclical behavior of interest rates. The traditional
behavior of these rates was accentuated during 1970 by the character of
the demand for funds during the year. Table 23 lists the funds raised in
the credit markets during 1969 and 1970 by type of credit market instrument. During 1970, corporations made special efforts to improve their
liquidity positions by turning much of the short-term debt accumulated in
1969 into long-term obligations. This is why the supply of new corporate
bonds in the second and third quarters of 1970 was substantially above the
flow during 1969, and why the equity market was tapped despite depressed
stock prices. The pronounced slowdown in bank loans not elsewhere classified (which include commercial and industrial loans) during the second
and third quarters of 1970 compared with the same period in 1969 confirms
this pattern of financing. The large volume of corporate bond flotations last
spring and summer explains why long-term bond rates did not decline more
during that period, just as the weak demand for bank loans was a major
factor causing a series of cuts in the prime rate charged by commercial
banks, from 8.50 percent to 6.75 percent by the end of the year and to 6.00
percent early in 1971.
Many State and local governments were forced to postpone security issues during the last half of 1969 because of rising interest rates and statutory
limitations on the interest rates that could be paid. A liberalization of these
statutory ceilings, combined with lower interest rates later in the year, ac-
e4
Chart 6
Interest Rates
PERCENT PER A N N U M
12
SHORT-TERM
v \ \\
10
EURO-DOLLAR
/
DEPOSIT RATE
(3-Month)
8
_
/
N .
PRIME COMMERCIAL
-
\
\v
**^— —
*
PAPER
V
A
A\
6 -
/V *•
J
_
v
/ y /
v
\
-
/
2
3-MONTH
~-
FEDERAL RESERVE
DISCOUNT RATE
TREASURY BILLS
( N e w Issues)
I I I I I I I| | | |
I I I I I I I I I I I I I I I I I I I I I I I
1966
1965
1967
I II I I I I I I I I I II I I I
1968
111 I I I I I I I
1969
ll
I I I I I
1970
12
LONG-TERM
10 —-
—
FHA NEW HOME
MORTGAGES
/ *
/
CORPORATE Aaa BONDS
\
\
6 -
/
'
N
J
•
\
\
\
v. .*• ^
**
2
HIGH-GRADE
MUNICIPAL BONDS
\
\
U.S. GOVERNMENT BONDS
--
-
I I I I I I I I I I I
II
1965
11
Mill
1966
I I I I I I I II I I
1967
I I I I I I I I I I II
1968
lll
I I I I I I I I I I I I I I I I I I I I
1969
1970
SOURCES: TREASURY DEPARTMENT, BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM, FEDERAL
HOUSING ADMINISTRATION, MOODY'S INVESTORS SERVICE, AND STANDARD & POOR'S CORPORATION.
TABLE 23.—Funds raised in credit markets by nonfinancial sectors, 1969—70
[Billions of dollars, seasonally adjusted annual rates]
1969
1970
Financial sector
1
Total funds raised by nonfinancial sectors._. . . .
U.S. Government2
All other nonfinancial sectors
Corporate equity shares
State and local government securities
Corporate and foreign bonds. . .
Mortgages
Bank loans not elsewhere classified
Consumer credit
Open-market paper
...
Other
1
2
II
III
IV
1
II
III i
88.9
88.8
93.4
82.2
80.0
101.3
-5.3
-13.3
3.7
.4
3.3
17.2
18.8
94.2
102.0
89.7
81.8
76.7
84.1
84.2
.2
10.2
15.8
28.6
16.4
9.9
5.1
7 9
3.2
9.8
13.3
28.6
19.5
10.4
3.9
P 3
5.3
6.7
12.8
26.8
11.5
8.8
3.2
14.6
9.2
7.1
11.1
25.4
9.7
8.4
1.2
9.6
6.3
9.2
14.7
22.5
7.8
4.8
5.0
6.4
6.2
11.0
22.3
23.6
4.5
6.2
2.2
8.1
5.6
11.7
19.7
27 2
4.5
6.4
.5
8.8
103.0
Preliminary.
Includes public debt securities and budget agency issues.
Source: Board of Governors of the Federal Reserve System.
counts for the increase in security issues by State and local governments
from the last half of 1969 to the second and third quarters of 1970.
FINANCIAL INTERMEDIATION AND THE MORTGAGE MARKET
Mortgage rates tend to be sticky and have declined relatively little in
response to monetary ease. For example, the rate on FHA-insured mortgages
declined from a high of 9.29 percent in March to 8.90 percent at the beginning of December. However, according to preliminary estimates, mortgage rates declined sharply during December. As can be seen in Table 24,
savings flows to the mortgage institutions, such as savings and loan associations and mutual savings banks, which were severely depressed in the second
half of 1969, rose substantially in the second and third quarters of 1970.
Much of the total net outflow of deposits in the second half of 1969
and the inflow during the second and third quarters of 1970 can be attribTABLE 24.—Flows of savings deposits through savings institutions, 1969-70
[Billions of dollars, seasonally adjusted annual rates]
1970
1969
Institution
II
1
III
II
IV
III i
6.5
.6
-15.7
-3.6
17.9
42.3
87.9
Savings deposits at commercial banks..
-6.8
-7.9
-21.5
-7.8
12.8
26.6
65.7
Large certificates of deposit..
Other time deposits
-16.7
9.9
-15.4
7.5
-12.3
-9.2
-3.5
-4.3
5.3
7.5
7.6
19.1
32.4
33.2
8.0
3.8
1.6
4.6
2.7
1.2
3.0
1.5
1.3
.5
2.4
1.4
1.8
1.6
1.6
9.8
4.3
1.5
15.5
5.2
1.5
Total net increase
Savings at savings and loan associations.
Savings at mutual savings banks
Savings at credit unions
i Preliminary.
Source: Board of Governors of the Federal Reserve System.
66
uted to the movement of large certificates of deposit (CD's) at commercial
banks. For example, the suspension of deposit ceilings on large CD's in
June 1970 stimulated a huge inflow of these deposits between the second
and third quarters. In addition to generally easier monetary conditions
(and lower rates on competing open market securities), the inflow of funds
to savings and loan associations and mutual savings banks during the second and third quarters of 1970 was encouraged by the increase in January
1970 in the legal deposit rates that the Federal Home Loan Bank Board
and the Federal Deposit Insurance Corporation permitted such institutions
to pay. At the same time, similar action by the Federal Reserve Board in
increasing the maximum rate that commercial banks may pay on most
categories of time and savings deposits also contributed to large inflows of
time deposits into commercial banks (Table 24).
To some extent savings and loan associations and savings banks used
these inflows of deposits during the second and third quarters of 1970 to
restore their liquidity positions rather than to make mortgage loans.
Each of these institutions, for example, increased its holdings of Government securities significantly during the second and third quarters. For this
reason the mortgage-supporting activities of the Federal Home Loan Banks
and the Federal National Mortgage Association (FNMA) during 1970
were quite essential and entailed amounts that almost matched the substantial operations in the last half of 1969. For example, FNMA made net
purchases of home mortgages at a seasonally adjusted annual rate of $5.0
billion during the first three quarters of 1970, as compared to a rate of $5.6
billion in the last half of 1969.
The enactment in July of the Emergency Home Finance Act of 1970
created the Federal Home Loan Mortgage Corporation to supplement the
mortgage-market activity of FNMA. During the year, this new corporation
purchased $326 million of loans that had been made with the guarantee of
the Federal Housing Administration and the Veterans Administration. In
December, the Federal Home Loan Mortgage Corporation began to purchase participations in conventional mortgage loans, introducing a national
market for these mortgages for the first time. The Federal National Mortgage Association is also preparing to create a secondary market for conventional mortgages.
In December 1970, the Federal Housing Administration and Veterans
Administration lowered the maximum rates permitted on FHA- and VAinsured mortgages from 8.5 percent to 8.0 percent. (In January 1971 rates
were further reduced to 7.5 percent.) Such action does not by itself reduce
mortgage rates, but lowers the maximum rate that can be paid on mortgages
that are insured by the FHA and VA. Lowering these ceiling rates when
market conditions require a higher rate would reduce the availability of
funds for such mortgages. However, since conditions in the money and
capital markets seemed to warrant a lower mortgage rate, the only problem
being the sluggish behavior of this rate, it was hoped that the lowering of
the FHA and VA ceilings would stimulate a downward movement in actual
rates. Present indications are that market rates have begun to decline.
THE STOCK MARKET
Stocks traded on the securities exchange suffered substantial declines in
the first half of 1970. For example, the New York Stock Exchange index of
all stocks (December 31, 1965 = 50) declined 19 percent from a level of
50.86 in December 1969 to 41.15 in July 1970. By the end of December 1970
the index had recouped nearly all of its loss and stood at 50.23. The sharp
decline in stock prices in May 1970 and their depressed state through July
were due in part to the increased tensions over developments in Southeast
Asia and the Penn Central reorganization. Throughout the first half of 1970
investors were concerned with inflation, the stabilization policies needed to
control it, and the extent of the business downturn that would result from
control measures.
Although it is often assumed that stock prices move with prices of real
goods, and hence mirror any inflation, this is not always the case, as events in
1970 again demonstrated. Profit expectations were uncertain, and the threat
of a return to relatively tight monetary policy to ensure success on the inflation front created further uncertainty among investors. These factors combined to produce a large erosion in the value of equities. Progress on the
inflation front, evidence before the auto strike that the upturn in business
activity was getting underway, an end to the decline in corporate profits by
midyear, and the maintenance of a moderately expansionary monetary policy
all helped to stimulate the stock market recovery.
An important side effect of the excessive exuberance in the stock market
that accompanied the inflation, and the subsequent steep decline in stock
prices as anti-inflationary policies were instituted, has been unusual strains
on the institutions of the market. At least 30 broker-dealer firms have ceased
to operate since mid-1968. Although most of these companies were relatively
small, a few larger firms had to merge with stronger ones.
The stock exchanges have voluntarily maintained a fund to reimburse
customers of firms that have failed. The experience after 1968, however,
indicated that a more formal arrangement for greater consumer protection
was needed. The Securities Investor Protection Corporation, which was
established by Congress in December 1970 with support from the Administration, insures investors against financial loss (within specified limits) caused
by the bankruptcy of their brokerage firm.
LIQUIDITY SQUEEZE
The concern over a possible "liquidity crisis" mounted in mid-1970 when
the Penn Central Railroad filed for reorganization. The immediate stress on
the financial markets in June was lessened by the Federal Reserve Board's
suspension of interest rate ceilings on 30- to 89-day certificates of deposit
issued by large commercial banks. The Federal Reserve Banks also made it
68
clear that the borrowing facilities at the discount window would be fully
available to banks needing to accommodate their customers. Commercial
banks were thus able to bid more freely for funds in the open market,
to borrow from the Federal Reserve, and to channel the funds thus obtained
into business loans. As summarized in Table 24, there were huge inflows of
time deposits to commercial banks in the third quarter. Borrowings at the
Federal Reserve did, in fact, increase to $1.36 billion in July after having
averaged $940 million during the first half of 1970.
Corporate liquidity is a general term that refers to the ability of a firm to
make payments as obligations fall due. A firm faces a liquidity crisis if its
near-term obligations threaten to exceed its ability to raise the cash needed
to cover payments. Bankruptcies can result, of course, simply from an uneconomic operation, when costs, for example, persistently exceed revenues. In
a liquidity crisis funds to cover immediate obligations may be temporarily
lacking even though a firm's prospects for long-term profits are satisfactory.
The question whether a genuine liquidity crisis existed in mid-1970,
in the sense that firms otherwise sound were going bankrupt because of
a liquidity squeeze, can be answered in the negative. It is quite true that
certain statistical measures of business liquidity showed substantial declines from 1968 through mid-1970. But these declines can be explained in
part by the longer trend toward more efficiency in managing corporate
reserves of cash and marketable securities.
Much of the reduction in overall liquidity can be attributed to the reaction of the more liquid corporations to tighter monetary conditions and
high interest rates, although some firms had overextended themselves financially. A comprehensive analysis of this point and of overall corporate
liquidity in 1970 is presented in Appendix A. Confronted by high interest rates during 1969, business firms in general relied on short-term
credit, with the intention of converting this short-term debt into long-term
liabilities during 1970 at lower interest rates. Since many firms experienced
low earnings in the first half of 1970, this need to refinance short-term debt
made the demand for long-term funds in the capital market particularly
heavy in 1970 (Table 23). A sharp increase in interest rates thus occurred
and some borrowers were inevitably squeezed out of the capital markets.
Nonetheless, there was no liquidity crisis if this term is taken to connote skyrocketing interest rates, a complete absence of bids for established securities,
and numerous bankruptcies of sound corporations. The actions of the Federal Reserve and the resiliency of the money and capital markets led to significantly improved financial conditions during the second half of 1970.
APPENDIX
Measures of Changes in Fiscal Policy
When the effects of budget policy on the overall economy first came to
general attention 35 years ago, the expansiveness of the budget was commonly measured by changes in the actual deficit or surplus. This measure
can be grossly misleading, however. Even if existing tax and spending legislation remains unchanged, the actual budget balance will rise and fall, as
changes in incomes influence tax receipts and call for different unemployment and welfare payments. In fact, the actual deficit can rise in the face of
restrictive policy actions of Government. For example, a fall in tax revenues
can coincide with an increase in tax rates if incomes decline sufficiently.
A given change in the actual deficit (or surplus) between two years has a
very different significance if economic activity is rising between those two
years than if it is falling.
Clearly, a need has existed for a better measure of Government budget
policy and its effects—one that would show what effects were the result of
tax and expenditure decisions and what effects the economy itself had exerted
on the budget. There are a number of possible solutions to the problem.
Econometric models, for example, can be used to estimate the impact of
various combinations of tax rate and expenditure changes on the level of
economic activity. Different models utilize different assumptions regarding
the nature and relative importance of various determinants of economic
behavior, and therefore they provide different estimates of the economic
impact of various fiscal policy changes. Consequently, fiscal policy
analysts cannot place too much reliance on the results of a particular model,
although the distribution of estimates provided by a variety of available
models is a useful guide.
For the purposes of public discussion, it is convenient to use simple
measures of the stance of fiscal policy which summarize the more complicated
policy changes used in the complex models. As noted below, however,
considerable care must be exercised in using simple measures of changes in
fiscal policy to estimate the effects of these policies on economic activity.
One simple measure of changes in policy can be obtained by calculating
the effect of changes in revenue and expenditure legislation at a particular
level of economic activity. This technique abstracts from the effect of changes
in economic activity on the budget and provides a clearer view of purely
discretionary policy changes. For example, at the level of economic activity
prevailing in 1970, changes in tax rates occurring during 1970 reduced
revenues by roughly $9 billion while expenditures increased by about $15
billion. In other words, exogenous policy actions during 1970 provided a
fiscal stimulus of $24 billion.
While changes in the surplus or deficit at a given level of money GNP
provide a convenient measure of discretionary policy changes, fiscal policy
70
planning requires a measure containing somewhat more information. Because
the labor force and productivity normally rise and prices rarely fall, money
GNP normally grows. Consequently revenues also rise and over time the
budget surplus would tend to grow rapidly if spending and tax rates remained
unchanged. Spending and tax programs that would yield an unchanged
surplus in an economy with a constant GNP would thus tend to hold down
growth at the normal rate by generating larger and larger surpluses.
It has been found of interest to ask how the surplus or deficit would change
if the economy moved along a specific path. Conceptually, any number of
growth paths could be selected for this purpose; it is the change in the budget
position along the assumed path that will indicate whether the budget policy
has been or will be restrictive relative to that path—that is, whether the
budget is tending to push the economy above or below the assumed path.
In order to give the measure more relevance it is common to select a
growth path that has some normative significance. The full employment
growth path has been used most frequently since the concept of a full employment budget was developed and publicized by the Committee for Economic Development in 1947. Changes in the full employment surplus measure changes in spending and tax legislation as well as the effect of full
employment growth on revenues. The difference between the full employment budget balance and the actual balance reveals the effects of short-run
variations in economic activity around the full employment growth path.
A particular target growth path could serve as an alternative to the full
employment path. Sometimes this path is identical to the full employment
path, but in 1970 it was necessary to be below full employment temporarily in
order to moderate the inflationary pressures which had become excessive in
1969 and early 1970. In other circumstances the desired path may be steeper
than the full employment growth path, if it is necessary to regain full employment from a less than full employment position. The target path budget
would reveal the effect of discretionary tax and spending changes and the
effect of target growth on tax revenues, but would abstract from the effect
on the budget of deviations of economic activity away from the target.
Method of Computation
The figures for the full employment budget provided in Tables 1 and 25
are computed in the following manner: First, the full employment growth
path is estimated in terms of the real value of production. Second, the real
growth path is converted into current dollar terms using the actual rate of
price inflation. This step suffers from the difficulty that a revenue change
resulting from price changes would alter the estimate of the full employment surplus even though there were no changes in discretionary tax and
expenditure policies. One way out of this difficulty might be to convert
real output to money income using the inflation rate that would have
occurred if the economy had actually been at full employment. But this
figure is so difficult to estimate, if indeed there is any unique rate, that the
actual inflation rate despite its shortcomings is used as a convenient
approximation.
Next, full employment income must be distributed into various tax bases,
such as corporate profits, personal income, and other categories. The calculations used in this chapter are based on an estimate of the distribution which would emerge if the economy were actually operating continuously
at full employment. For the purposes of comparing full employment budgets
at different points of time it is important that a constant distribution pattern
be used. Otherwise the estimates would shift with distributional changes that
are unrelated to fiscal policies.
Average tax rates are then estimated for different types of income under
current legislation. On the basis of these estimates full employment revenues
can then be calculated. Full employment expenditures are estimated by
adjusting actual expenditures to allow for the difference between actual
outlays on unemployment compensation and those that would occur at full
employment.
It is clear that the full employment estimate depends on numerous assumptions and that these create the possibility of error. This problem should
not, however, be exaggerated. For most purposes interest focuses on changes
between years, and if the assumptions are consistent between years the errors
in the estimated changes in the budget position are likely to be small. Moreover, estimates of the full employment budget for the future are probably
subject to less error than estimates of the actual budget, because the actual
future path of the economy is more variable and uncertain than the full
employment path.
The Full Employment Budget as a Measure of Fiscal Impact
The absolute level of the full employment surplus or deficit is of limited
significance for indicating how much restraint or stimulus the budget would
exert on the economy if it followed the full employment path, or indeed for
indicating which of these directions its influence would take. Changes in
the full employment surplus from period to period are much more important
indicators of how much fiscal policy is moving toward contraction or expansion. The fact that the full employment budget has a surplus does not imply
that the budget is not having an expansionary impact on the economy; the
effects may be expansionary if the surplus is declining. Similarly a budget
with a deficit may be restrictive if the deficit is declining.
Although changes in the full employment budget balance provide a
convenient summary measure of changes in fiscal policy, they do not tell
the whole story. A given change in the balance may exert a different force,
depending on whether the change stems from a change in transfer payments,
purchases of goods and services, corporate taxes, personal taxes, or other
instruments of fiscal policy. Results vary because different policy changes
affect economic behavior differently, even though the same amounts of
money are involved. Some of the most important differences can be con-
72
sidered in complex models of the economy, but no model can capture all
of the subtle effects of fiscal policy. For example, virtually identical policy
changes may have different results depending on circumstances. A longanticipated increase in Social Security benefits may have a different
consequence from that of an unexpected increase. Similarly, a permanent
cut in income taxes probably has a more powerful impact than an equivalent
reduction that is known to be temporary. Conceptually models could be
constructed to take account of such differences, but they would be extremely
difficult to manage.
Recent Changes in the Full Employment Budget
The table below illustrates changes in the full employment budget during
the last decade. If fiscal policy changes are measured by the annual change
in the surplus relative to full employment GNP, the largest stimulus of the
decade came with the tax cut of 1964. The largest shift toward restraint
came in 1969, or, on a 2-year basis, in 1968 and 1969.
The full employment budget can be computed by using either national
income accounting concepts or the concepts applied in deriving the unified
budget, which appears in the President's annual budget statement. Economists generally favor the national income accounting approach in the belief
that on balance it provides a more accurate measure of fiscal effects; but
both concepts have advantages and disadvantages.
On both the expenditure and revenue sides these concepts embody important differences of timing. In the national accounts budget, purchases
of goods and services are recorded when delivery is made. The unified
budget records them when checks are issued for payment; this might occur
before or after delivery. It is sometimes argued that neither method of timing truly captures the fiscal impact and that for such a purpose the timing
of orders should be used.
TABLE 25.— The full employment receipts and expenditure estimates, national income accounts
basis, 1960-70
Billions of dollars
Calendar year
Receipts
I Expenditures
Surplus or
deficit ( - )
Change in
surplus from
preceding year
Change as a
percent of
full employment GNP
1960
1961
1962
1963
1964
105.0
109.2
113.8
121.8
119.2
92.0
100.4
109.4
112.8
117.5
13.0
8.8
4.4
9.0
1.8
8.3
-4.2
-4.4
4.6
-7.2
1.5
-.7
1
'.7
-1.1
1965
1966
1967
1968
1969
124.2
139.3
153.1
175.7
203.3
123.2
142.9
163.6
181.7
191.7
1.0
-3.6
-10.5
-6.0
11.7
-4.6
-6.9
4.5
17.7
-.1
-.6
-.9
.5
1.9
212.0
205.3
6.7
-5.0
-.5
....
..
1970
Note.—Detail will not necessarily add to totals because of rounding.
Source: Council of Economic Advisers.
73
On the revenue side the unified budget again uses cash receipts. In the
national income accounts budget most receipts, such as corporate income
and excise taxes, are recorded on an accrual basis, but personal income taxes
are recorded when paid by individuals. Steps are now being taken to put
the unified budget more on an accrual basis.
The national accounts budget omits the direct lending activities of Government except for Commodity Credit Corporation (CCC) "nonrecourse"
commodity loans, which are treated as expenditures rather than loans. The
unified budget also treats as expenditures CCC loans as well as foreign loans
made on noncommercial terms and domestic loans where repayment may
be waived. A unified budget deficit can be computed for the expenditure
account alone, or it can be defined to include the net lending not already
considered in the expenditure account. In fiscal 1970 such lending amounted
to $2.1 billion.
Neither budget considers the loan guarantee and insurance programs of
Government, and besides these there are a number of Government-sponsored
lending institutions which operate outside of the budget. During fiscal 1971
it is expected that Government net guaranteed and insured loans will increase by about $13 billion, while the increase in the net lending of Government-sponsored institutions will be about $8 billion.
74
CHAPTER 2
Outlook and Policy
T
HE GOALS FOR THE PERFORMANCE OF THE ECONOMY
IN 1971 ARE CLEAR. Our objectives should be to move along a
path through 1971 that will bring the unemployment rate in 1972 down to
the zone of reasonably full employment, and at the same time to get the
rate of inflation dowrn to the 3-percent range. The general nature of the
policies that would help to achieve each of these goals is also clear. We can
reduce unemployment, at least in the short run, by expansive economic
policies which would make the demand for output rise rapidly and so raise
employment. We can reduce the rate of inflation by restrictive economic
policies which would repress the demand for output, increase unemployment and unutilized capacity, and thereby encourage business and labor
to settle for smaller advances in prices and wages. While these "solutions"
are clear, the problem is also clear. We cannot do as much as would be
possible in one direction without injurious results in the other. This is not
to say that it is impossible to make progress in both directions at the same
time. It is possible, but only if we do not move too fast in either direction.
THE UNEMPLOYMENT-INFLATION DILEMMA
The dilemma of having to balance our efforts between reducing unemployment faster and reducing inflation faster is not new. This itself is worth
recognizing, because if the problem were truly new, the thinking and experience of the past would be of little value. In fact the dilemma has been
one of the central concerns of economics and of economic policy throughout
this generation. The problem came to the fore as early as 1936 and 1937
when the economy, although still at a very low level, was recovering from the
Depression and prices began to rise. President Roosevelt called public attention to what he believed to be the dangers of the price increases. There
wrere many who thought that the ending of the recovery in the sharp
recession of 1937-38 wras due to the earlier price rise, which they attributed
to concentrations of economic power. This belief was one of the motives for
the establishment of the Temporary National Economic Committee
(TNEC) to investigate the concentration of economic power.
The work of the TNEC led to no conclusions on this point, because its
report did not come until the war had superseded earlier concerns. Never-
75
theless, the problem of reconciling full employment and price stability was
prominent in wartime thinking about the postwar economy. This was one
of the reasons why some were reluctant to accept what they interpreted
as the overly ambitious commitment to full employment implicit in the original "Full Employment Bill," an attitude that led to a less ambitious
commitment in the Employment Act as enacted in 1946.
Discussion of the possibility of full employment without inflation continued in the first 10 years after the war. This was a period in which contemporary experience was dominated by the effects of wars, controls, and
their aftermath, and it was not generally considered that it could provide
much light on the characteristics of a normal peacetime economy. The
events of 1955-57 intensified the concern with the problem. We then had
the first full employment achieved in normal conditions since 1929, and it
was accompanied by a disturbing increase in the inflation rate. From the
third quarter of 1954 to the third quarter of 1957, prices (as measured by
the GNP deflator) rose at an annual rate of 3.1 percent, reaching a peak
annual rate of 5.4 percent in one quarter. Six quarters after the recession
began the inflation rate was still 2 percent, and this contributed to the idea
of inflation as a permanent problem. This experience lay behind the statements contained in the Economic Report of the President during that period
about the need for responsible restraint in raising prices and wages.
In the upswing that followed, however, most measures of the general
price level stabilized, and this stability continued through 1965. From mid1958 to the end of 1965 the rate of inflation averaged 1.5 percent per year, as
measured by the GNP price deflator, and 1.3 percent by the consumer price
index. At the time this moderate rate of inflation was considered as being, for
all practical purposes, "reasonable price stability." The experience, however,
did not resolve questions about the compatibility of full employment and
price stability. Unemployment was high during all of this period, although
declining from 7.1 percent in early 1961 to 5.0 percent by the end of 1964
and to 4.5 percent in mid-1965. Some thought that the prolonged period
of little inflation would create an environment stable enough so that a
gradual reduction of the unemployment rate to 4 percent could be achieved
without speeding up the inflation. Evidence that the inflation rate was
holding steady at a low level as unemployment fell towards 4.5 percent encouraged this hope. But in fact the GNP price deflator began to rise soon
after unemployment fell below 4 percent at the end of 1965, and there had
been evidence of the beginnings of a rise in wholesale prices before that.
This rise in the inflation rate and its sequel left several important questions
unanswered. Would the inflation rate have increased if the drop in the unemployment rate from 5 percent to 4 percent had occurred more gradually?
Would the inflation rate have stabilized at the still moderate figures registered late in 1965 if demand had remained just sufficient to keep unemployment at 4 percent? Or was some higher rate of inflation the inevitable
accompaniment of the 4-percent unemployment rate?
Demand kept rising rapidly, although not without some interruptions,
after the end of 1965, reducing the unemployment rate below 4 percent and
pushing the inflation rate still higher. While this was happening, that is, until
about the middle of 1969, the dilemma of policy disappeared. Unemployment had been driven down to a level where symptoms of labor shortages and
tight labor markets were widespread. In those circumstances the proper
course of policy was clear. Restrictive policy which would restrain inflation
would carry with it little, if any, cost in the form of undesirable effects
on employment. For the time the appropriate direction of policy was
unambiguous.
The dilemma reasserted itself in early 1970 when we again experienced
high and, for a time, rising inflation rates along with rising unemployment
rates. This was a natural transitional combination, in view of the rapid
inflation we had been experiencing. Once the rise of total demand was restrained, the effects were first felt on the real side of the economy—on output, employment, and unemployment—with prices continuing to rise as a
result of forces set in motion earlier.
THE GOALS OF POLICY
There are several reasons for believing that from this point forward a
further reduction of the inflation rate will be consistent with reduction of
the unemployment rate:
1. A reduction of the inflation rate has already begun. This is reflected
in most broad measures of the price level.
2. There is a lag between the emergence of slack in the economy and its
effect on the inflation rate so that the full effects on prices of the sluggish
economy in 1970 have yet to be felt.
3. If, as expected, employment rises at a moderate rate during 1971,
sufficient slack will still remain in the economy to exert downward pressure
on the rate of inflation.
4. With output rising fast enough to cut into the unemployment rate, a
high rate of productivity growth should continue through 1971. Stern costcutting measures in 1970 have put businesses in a position to achieve more
favorable trends in costs per unit of output as operating rates improve. This
will help to limit the pressures of these costs on prices.
To go beyond these general statements of direction and try to estimate
how much unemployment and inflation could be reduced, we must move
cautiously. However, some approximate judgments seem consistent with
recent as well as earlier experience. Confining the economic expansion to a
pace which would keep unemployment about where it now is, in the neighborhood of 5.5 to 6.0 percent, would permit a significant decline in the
rate of inflation during 1971 and 1972. To allow so high an unemployment rate to persist for so long a time, however, would be inconsistent with
the Employment Act—and undesirable even if there were no Act. On the
other hand, trying to restore what has been commonly regarded as "full
411-364 0—71
6
employment"—a 4-percent unemployment rate—within the present planning period that extends to the end of fiscal year 1972 would entail risks on
the inflation side. Although this latter path might be consistent with some
further reduction of the inflation rate, there is a serious risk that the inflation rate would start rising again if the 4-percent unemployment rate were
approached as rapidly as such timing would imply.
There is a feasible path between these extremes that would better meet
the Nation's present requirements by allowing significant progress to be
made against both inflation and unemployment. This is a path that would
see the unemployment rate reduced to the 4 ^-percent zone by the second
quarter of 1972 and the inflation rate, as measured by the GNP deflator,
declining to approach the 3-percent range at the same time. Total output
would have to rise significantly faster than the growth of potential output,
or employment would rise only in proportion to the growth of the labor
force and would not cut into unemployment. The necessary rate of increase
of total output, however, would not have to exceed the rates that have
been achieved during past periods of economic recovery.
The general goal, which is more important than the precise numbers, is
that the rate of unemployment should decline as fast as is consistent with
a reasonably steady and durable decline in the rate of inflation. We believe
that the numbers we have proposed—an unemployment rate in the 4 *4-percent zone and an inflation rate declining to approach the 3-percent range by
mid-1972—are feasible representations of that goal. But the numbers are
themselves not the fundamental goal.
It has to be recognized that achievement of this goal would still leave
the economy short of the ideal with respect to both unemployment and
inflation. As things turn out, the economy may yield better results on both
sides than are projected here. But it would be unrealistic to count on such
an outcome, and irresponsible to hold out to the American people the
idea that there are readily available policies which would achieve it. The
long and accelerating inflationary boom that was set off beginning in late
1965 left the country with this unemployment-inflation dilemma, whose
severity was only subsequently appreciated. But to move firmly along the
path laid out would relieve the anxiety about the economy from which the
country has been suffering for many years and generate confidence in further progress.
IMPROVING THE UNEMPLOYMENT-INFLATION CHOICE
Howr rapidly we can move in expansion of the demand for output, with
associated increases in production and employment, will depend heavily on
the capability of the economy to resist the inflation of prices and costs. In
many directions we see accumulating evidence of public weariness with a
continuing' deterioration in the purchasing power of its money. Surveys of
public sentiment reveal it sharply. Widespread public support for direct
price and wage controls clearly reveals public frustration with inflation
even if the full consequences that these controls would have in distortions
and black markets are not perceived. Developments which persistently
force costs and prices upward will simply prolong unemployment and the
sluggish spending inclination of consumers. And growing confidence in
prospects for a reasonably stable price level would make a major contribution to invigorated consumer spending and improved economic conditions generally.
Broad fiscal and monetary policies must continue to play the basic role.
How expansive these policies can be, however, will depend on what more
can be done to enable the economy to translate rising demand into rising
output, employment, and real incomes rather than into a more rapidly rising
cost-price level. This list of other possible actions, beyond the prudent management of fiscal and monetary policies, is long and varied. The problem is to
select those which would be, on balance, helpful. It is not solved by saying
that reliance on fiscal and monetary restraint alone will make the process of
disinflation slower and more painful than we would like. That is a restatement of the problem, not a solution to it.
As a basis for thinking about the problem, several points must be borne
in mind:
1. The free market system of determining prices and wages, even with
its imperfections, serves exceedingly well in shaping what gets produced
and by whom, and how the resulting income gets distributed. These are key
questions in any economy, and no effective substitute for this market economy
has been found that answers them better. We take the free market system
for granted, like the air we breathe, and become conscious of the benefits
of either only after they have been lost.
2. There is now a great deal of experience to indicate that the superficially attractive route of voluntary controls is unlikely to lead to a solution.
By "voluntary controls" is meant a system in which the Government, or a
quasi-independent board selected by the Government, specifies comprehensive standards of wage-price policy to be observed voluntarily by labor
and business, without any similarly comprehensive means of enforcement
by Government. The basic deficiency in this approach is that it counts on
a large number of people to acquiesce in conduct that they find contrary
not only to their own interests but also to theiiwiew of fairness, propriety,
and efficiency. The great initial attraction of the idea, that it makes the
public think something effective is being done, is also one of its adverse
consequences because it distracts attention from the real nature of the
problem.
3. At the same time, it is evident that some price and wage increases
that are going on are not adaptations to current basic market conditions
and are not consistent with efficient operation of the economy. To some extent this simply reflects a lag in adjustment to the change in market conditions that has taken place in the past year. But in some cases the behavior
79
of prices or wages can be explained only by a combination of this factor
with an unusual degree of insulation from competitive market forces.
4. In some cases the insulation from market forces is due to acts of commission or omission by the Federal Government. This may be true, for
instance, in industries that are protected from foreign competition by import
quotas or voluntary arrangements with similar effect. In these cases the
Government has the instruments at hand for correcting the problem. This
does not, in itself, make the correction easy. Those who have been the beneficiaries of a shelter from competitive forces would certainly feel aggrieved
by changes in conditions on which they have come to rely.
Government policy must find its way among all these considerations.
Short of an emergency of a kind which does not exist, mandatory comprehensive price and wage controls are undesirable, unnecessary, and probably unworkable. The Government should not rely upon pseudo-solutions for
real problems and should not delude the public about doing so. But there
are cases where price or wage increases not justified by competitive market
forces are contributing to the prolongation of the inflation and to unemployment as well. In some of these cases the Government has means of
correction available that do not interfere with market performance but
tend rather to improve it.
What is called for is a policy of doing what can effectively be done,
wherever it can be done, and not pretending to do more. The Administration
set out on this course with the President's speech of June 17, 1970, and
has since then been following it with increasing force.
In June the President directed the Council of Economic Advisers to issue
a periodic Inflation Alert to call attention to specific cases or general features
of exceptionally inflationary wage or price behavior. The purpose of these
reports was to bring to bear on important wage and price decisions a more
informed and sharply focused public attention. The Council will continue
to issue the Inflation Alert approximately every 3 months. Certain points
made in the December 1970 issue, prompted by developments in the immediately preceding period, are worth reiterating.
1. Apart from temporary aberrations the general price level tends to rise
by the excess of wage increases over productivity increases. Productivity cannot be counted on for long to rise more than about 3 percent per year, although this rate will probably be exceeded during the next year. This means
that a continuing 7-percent annual rate of increase of employee compensation per hour would commit the economy to a continuing inflation rate of
about 4 percent.
2. We shall not make progress in reducing the inflation rates if the gains
we hope to make on the labor cost front are offset by too rapid increases of
profit margins.
3. If the inflation is to be slowed down, all wages that have not kept up
with the inflation of prices cannot catch up in any short period. On the average, labor compensation has kept pace with the inflation and productivity
8o
increases, but some wages have led and some have lagged. If those that have
lagged were to catch up quickly, while the leaders did not fall back—as they
surely would not in a short period—then the cost-price spiral is given another
turn, prices rise further, and new laggards are created who feel they have to
catch up.
4. To embody in wage agreements covering two or three future years
provisions for wage increases based on the assumption that prices will continue to rise at recent peak rates is not a reasonable response to our present
situation. If this were done generally it would be a recipe not only for permanent rapid inflation but also for persistent unemployment, because the Government would be bound to try to check the inflation by generally restrictive
policies. On the other hand, in some cases escalator clauses, which relate
future wage changes to actual variations in the cost of living rather than to
the expectation of continued inflation at its peak rate, may have a role to play
during the adjustment to a more stable price level.
The President's June 1970 speech also announced the establishment of the
Regulations and Purchasing Review Board to correct Government policies
which unnecessarily contribute to inflation. It has under consideration a
number of problem areas on which recommendations will be forthcoming.
Examples of these are the management of import restrictions, regulations
which unduly increase the cost of bidding on small Government projects,
design and procurement methods for Government buildings, and the administration of the Davis-Bacon Act, which requires that contractors on Federal
construction projects pay "prevailing" wages (a provision which in practice
may have exerted an inflationary effect on construction wage rates and
costs).
It is the general policy of this Administration that where it has a legitimate
role the Government should act to correct market conditions that prolong inflation, or whose correction can have a favorable effect on the price level.
In line with this policy the Administration last fall took two steps to restrain
increases of crude oil prices. It relaxed limitations on the importation of oil
from Canada and permitted production of oil on Federal offshore leases
without restriction by State regulatory commissions.
Following the announcement of a large increase in prices of some steel
products in January 1971 the President directed the Cabinet Committee
on Economic Policy to investigate economic conditions in the steel industry
which were giving rise to such increases. To be taken into account in this
review is the voluntary agreement by producers of steel in Japan and the
European Economic Community to limit their sales of steel in the United
States, an agreement negotiated by the U.S. Government. One subject to
be investigated is how the interests of U.S. users of steel, including many
industries which themselves face foreign competition, can best be correlated
with the interests of U.S. producers in these international steel arrangements.
Rapidly rising construction costs have been a serious concern for the past
2 years. In 1969 the Administration took steps to reverse price increases
8i
in lumber; the impact on construction is one reason for concern about steel
price increases. The Administration has also moved to check the extraordinary wage and price increases in the construction industry. The wage increases have been occurring despite high unemployment in the industry. On
January 18, 1971, the President met with leaders representing construction
workers and employers and asked them to submit a plan for stopping the
exceptionally large wage and price increases that are raising the cost of
new homes and other buildings and causing unemployment in the industry itself. An effective resolution of these problems by parties in the industry would avert the need for changes in the legal provisions affecting
the construction labor market. The public interest cannot condone continuing massive increases in these costs at a time when American families
need more homes and many in the industry are unemployed and need jobs.
The rising demand for houses, highways, and buildings must produce more
construction and not be dissipated in higher costs and prices.
To regularize the increasingly active Federal role in particular labor or
product markets, the Council's function of alerting against inflation has
been broadened. By a decision taken in January the Council of Economic
Advisers will report immediately to the Cabinet Committee on Economic
Policy on any exceptionally inflationary wage or price developments so that
the Cabinet Committee can consider appropriate Federal action.
The measures the Administration is taking will contribute to the capability
of the economy to resist inflation as it moves along a rising path in 1971-72.
They will not relieve the country of the consequences of past errors which
have caused us to live for a longer time with both more unemployment and
more inflation than anyone would like. They will still leave us dependent
upon a course of steady but not excessive economic expansion as the way
out of this dilemma. But they give the Nation additional assurances that
1971 can be a year not only of diminishing rates of inflation but also of rising
employment and output.
THE PATH OF THE ECONOMY IN 1971
Some of the factors that will determine the course of the economy in
1971 are present and visible, others may be present but not now clearly
seen, and still others are, from the standpoint of the Federal Government,
matters of policy still to be decided or at least subject to revision.
The most obvious of the present conditions is that the year 1970 ended
with unemployment in the neighborhood of 6 percent and output in the
fourth quarter about 6^4 percent below its potential. As explained in
Chapter I, the fourth quarter was significantly depressed by the automobile
strike. This carries with it the probability of a large rise in output in early
1971 to rebuild inventories and meet customers' demands for motor vehicles.
Also, apprehension that there may be a steel strike after midyear is likely
to cause some larger than usual additions to steel inventories in advance.
These two factors will provide a special boost to total output in the first
82
half of the year but they also involve the danger of a subsequent letdown.
The assurance of a reasonably smooth and even expansion throughout the
year must be a special concern of economic policy in 1971.
Aside from these transitory influences, there are several conditions that
promise a strong rise of output during the year. The sharp rise in housing
starts which occurred in the second half of 1970, the large inflows of savings
into thrift institutions in the same period, and the beginning of a decline in
mortgage interest rates all point to a much increased rate of residential
construction in 1971 as compared with 1970. How fully these promising
developments translate into more housing and more jobs will depend heavily
on progress in stabilizing labor and other costs in the industry.
The increased availability of funds and lower interest rates, especially
during the second half of 1970, permitted State and local governments to
increase their borrowing substantially, and this will support an acceleration
of State and local expenditure.
On the other hand, the most recent survey of anticipated plant and equipment expenditure of business, made by the Department of Commerce and
the Securities and Exchange Commission in late November and December,
suggests a year-to-year rise of \l/z percent. This does not allow for 1971 business purchases of automobiles and trucks not bought in 1970 because of the
strike. It also does not allow for the effects of the liberalization of depreciation allowances for tax purposes that was announced in early January 1971
and went into effect retroactively to January 1. This liberalization will initially add about $2.6 billion in calendar 1971 to the after-tax cash flow of
business. It will stimulate investment by increasing the after-tax rate of
return on machinery and equipment.
The catch-up after the auto strike and the stocking up in anticipation of a
steel strike are likely to lead to a high temporary rate of inventory accumulation in the first half of 1971. Apart from this, however, there is nothing in
the relationship between inventories and sales as the year opens to suggest
that a change in the rate of inventory accumulation will be an active element
in the economy for the year as a whole.
The Federal Budget proposed by the President implies an increase of
$17.0 billion in expenditures on the national income accounts basis between
calendar 1970 and calendar 1971. Federal purchases of goods and services
would decline $1.9 billion, the reduction in defense spending more than
offsetting a rise in nondefense purchases.
The first instalment of revenue sharing together with other programs
would result in $6.6 billion of increased grants to the States, and these will
support increased State and local expenditures. Also, there would be an increase of $12.0 billion in transfer payments to individuals, resulting in part
from a proposed 6-percent increase in Social Security benefits effective January 1, 1971. On the other side of the Budget there will be the reduction of
revenues resulting from the depreciation revision.
83
There is, of course, no counterpart of the Federal Budget to represent the
probable course of monetary policy during 1971. In practice one of the important features of monetary policy as an instrument of economic stabilization is its capability for being adapted quickly and flexibly to emerging
developments. As a basis for considering what the outcome for the year
would be with a specified combination of policies, it is convenient to assume
that the money stock will continue to grow at about the rate that has prevailed since the turn early last year.
There is little doubt that this combination of conditions and policies
will bring forth a substantial rise of total output during the year. But the
rate of expansion is critical for attainment of the Nation's economic goals,
and this rate is uncertain. The outcome will depend upon the level of personal savings, the response of business investment to an actual upturn of
sales and profits, the effects of rising construction costs on the housing market,
the influence of the depreciation reform on business planning, the degree
to which individuals and businesses want to rebuild their liquidity, and many
other factors. The combination of such variables will determine whether,
under present policies, there is a vigorous cumulative cyclical recovery such
as has occurred after some economic declines or only a gradual rise.
There is a considerable body of opinion that expects the gross national
product for 1971 to be in the range between $1,045 billion and $1,050
billion, which would be an increase of 7 to 7 ^ percent above that for 1970.
This is a possible outcome. However, it seems more likely that with present
policies the outcome would be higher than that and could be as high as
$1,065 billion.
A $1,065 billion GNP for 1971 would be consistent with satisfactory progress towards the feasible targets suggested above—that is, towards an unemployment rate in the 4 J/2-percent zone and an inflation rate approaching
the 3-percent range by mid-1972. This calculation involves estimates of
the rates of increase of productivity and the labor force, which may in fact
turn out differently, so that the connection between the unemploymentinflation targets and the 1971 GNP is not a rigid one. Nevertheless, although
emerging information may later suggest a different view, the figure of $1,065
billion for the GNP in 1971 is an appropriate intermediate target of a
policy whose ultimate goal is not a dollar total but a desired behavior of
prices, unemployment, and real output. It is reasonable to expect that with
an increase of the GNP to $1,065 billion in 1971, the rate of price increase
would be declining through the year, the unemployment rate would also
end the year significantly lower than at the end of 1970, and real output
would show a strong gain.
For the GNP to reach $1,065 billion in 1971 would require an increase
comparable to the increases after the low points of the economy in 1954,
1958, and 1961. If the rise in the money stock were to continue at the 1970
rate, the ratio of money to the GNP would then decline at about the average
rate of the period 1952-70. Although this is a possible development, it is not
a certainty. In the earlier recoveries cited, a major stimulus to the sharp rise
of demand and output was a change from running down inventories to building them up. This is less likely in 1971 than after the earlier adjustments,
which were much more severe.
A GNP in the neighborhood of $1,065 billion in 1971 is a good present
estimate of the figure consistent with the targets for unemployment and inflation. It is feasible, and its realization with the proposed budget and complementary monetary policy is a reasonable expectation.
It will be necessary to maintain an appropriate balance between our international responsibilities and domestic objectives of economic policy in decisions about how to combine or "mix" the different instruments of policy.
And the economy remains a highly complex system which, even with its patterns of regularity, does not respond to policy changes in simplistic and invariant ways. For these reasons we must be prepared, as new evidence
appears, to make promptly the necessary policy adjustments.
The President's Budget for 1972 is based on the principle that expenditures should not exceed the revenues that the tax system would yield under
conditions of full employment. This is an important principle. It permits
the Federal budget to support the economy when the economy is weak, by
allowing the Federal budget to move into a deficit under those conditions.
But it retains the fiscal discipline of budget balancing by drawing a line
beyond which expenditures may not go without tax increases. Moreover,
keeping the full employment budget balanced, even when the economy is
below full employment, prevents the Government from incurring commitments to higher expenditures and lower taxes that would unduly encumber
the future. The Budget for fiscal 1972 provides for the most urgent needs
that should be met through Federal expenditures. Moreover, the yield of the
present tax system will be required later to meet foreseeable expenditures
to which the Government is already largely committed. Therefore, still
further increases of expenditures beyond this Budget or cuts in taxes would
not have been consistent \vTith fiscal discipline.
In the past year monetary policy has moved towards a greater degree
of stability in the rate of increase of the moneary aggregates, notably the
stock of currency plus demand deposits. This is, as wras stated in last year's
Economic Report of the President, a desirable direction. The financial and
economic system is thus given a more stable monetary framework within
which to operate.
The reasons for a new stability in fiscal and monetary policy are weighty.
But the need to press forward to reduce unemployment and inflation is also
great. After the economic instability we have experienced in the past 5 years
the parameters of the system cannot be located with precision and may well
be in flux. It would be unwise to try to freeze a course of policy which is expected to carry us through the difficult months ahead without change. A
course of flexibility and determination, with cooperation and division of
labor among the several instruments of economic policy, will be needed, and
if followed will lead to the goals we all seek.
CHAPTER 3
National Priorities and the National Output
INTRODUCTION
T
HE COUNTRY'S ATTENTION THIS YEAR is focused on the
problem of raising total production and employment to the point
where we are fully using the Nation's capacity to produce. But we cannot
afford to neglect measures that will promote continued rapid growth of that
capacity and bring about its utilization for the most important purposes. Our
success in achieving these goals will significantly affect the quality of
American life for years to come.
In recent years the desirability of increasing production has been more
strongly challenged than previously, and at the extreme there are some who
look upon economic growth as the mere enlargement of a quantity without
human meaning or value. But economic growth means increasing capacity
to produce what is wanted—as is indicated by the term "goods and services,"
meaning a good for or service to someone. The product is not measured in
tons or miles or calories. It is measured by the value that someone puts on it.
The key question is whose value counts.
In the measures of total output commonly used in the United States, the
value of products is what purchasers pay for them. That is determined not
only by the purchasers' preferences but also by conditions of supply. The
conditions of supply in turn reflect the natural and technological circumstances at a given time as well as the preferences of suppliers of labor and
capital. Thus the value by which a product is measured synthesizes the
preferences of consumers and suppliers of resources as expressed in markets
and in the political process. For example, a pound of butter counts for more
economic output than a pound of coal because it combines a higher consumer valuation and a higher cost to produce. The most comprehensive
measure of economic output, gross national product, is in fact defined as
the market value of the Nation's output of goods and services. The same
decentralized process that determines the values used in measuring the output also determines what gets produced.
For anyone whose values differ greatly from those of the general synthesis,
the measurement of economic growth will be different from that commonly
made. For anyone to whom clean water is the only valuable product there
has been no economic growth since the time of Hiawatha. The argument is
86
ultimately a matter of taste, and the only comment one can make on it is
that most people do not feel that way. The capacity of the economic system
to produce what is valued by today's population—as represented in the market and in the political process—has increased rapidly and continues to do so.
One can say no more about economic growth than that those whose decisions
are reflected in the composition of output are better able to satisfy their
desires in a growing economy. But if the markets are competitive and the
decisionmaking process is democratic, that is saying a good deal.
The case for production is not necessarily the case for a particular statistic
of production such as the gross national product, and the case for economic
growth is not necessarily a case for increasing the gross national product. The
GNP is not a perfect measure of all the activities comprehended in the idea of
economic output. This has long been recognized, and it has most recently
taken on new meanings and a new sense of urgency through growing concern
for the environment. Many deteriorations or improvements of the environment are not accounted for in the gross national product, even when they are
incidents of the production process. This is only a newly conspicuous example
of those limitations of the GNP statistic which have been well known for a
long time.
On the other hand, the gross national product measured in real terms
does not count as "product" many benefits which are provided as a part of
the production process, such as training, education, health care, and even cars
and subsidized meals for employees. Only the cost of developing a public
park goes into GNP, though the new park may add economic value to other
properties in the neighborhood. Nor does the GNP include the value of the
large amount of productive but unpaid work done in and out of the home,
such as the housewife's services. It can take no account of changes in the
burdensomeness of work, or the length of the workweek, or the wider choice
of products available; and it only inadequately accounts for the consequences
of the introduction of new products.
Despite these limitations the GNP statistic has made a great contribution
to understanding how the economy is working. And, although GNP is not
a complete measure of economic production, still less of "welfare," its level
and rate of increase are positively associated with what most people and
most societies consider an improvement in the quality of life. All over the
world, in countries whose cultures and values differ widely, we see a drive
for increasing the measured gross national product. Moreover, insofar as
we are able to measure conditions of life not incorporated in the GNP, such
as mortality and morbidity rates, educational attainment, and cultural
facilities, these tend to improve in countries with higher per capita GNP.
Evidence of a relation between GNP and the popular preference is seen in
migration within the United States. There is a large net movement to
those parts of the country, especially the metropolitan areas, where all the
attributes, desirable and undesirable, of a high-income industrial society are
most intensely present.
87
While the Nation has been engaged in a new and earnest soul searching
about the role of growing material affluence in the good life, it is probably
true that in general the American people prefer a rapid growth of GNP
and its consequences. There is, in fact, a good deal of evidence that in the
years ahead the demands on our capability to produce will be growing in
intensity rather than diminishing. One of the great merits of the American
system, however, is that those who do not share this common preference
have the opportunity to make alternative choices. An important virtue of
the market system for organizing economic activity is, therefore, precisely
that we can more closely tailor our productive activities to the wide-ranging
diversity of individual wants and preferences.
This is not to say that growth of measured GNP is an absolute to be
furthered at all costs. As individuals and as citizens we clearly do many
things that reduce the growth of GNP, and we fail to do manv things that
would accelerate it. This is perfectly reasonable; growth of GNP has its costs,
and beyond some point they are not worth paying. Man wants more than is
counted in GNP. People's values change. Conditions of life change. These
may lower the point beyond which more growth of GNP is not worth its
costs. Even so, growth of GNP would still be an objective about which we
are not indifferent.
In any case, whatever may be true or become true about the relative values
of the product' included in the GNP and the product excluded from it—
the automobile on the one hand and the clean air on the other—there is
little evidence that we are witnessing a decline in the value assigned to
economic output as a whole. This means that great importance must be
assigned to the basic factors which influence our total capacity to produce.
These are in the long run essentially the same for producing GNP as for
producing other benefits. They are the size and competence of the population, the state of knowledge, the stock of capital, and the effectiveness with
which these are combined. We can foresee no diminution in the need for
these factors if we as a people are to come closer to meeting our objectives.
In fact, as we shall show below, the existing propensities of the population
and the policies of the Government constitute claims upon the GNP itself
that can only be satisfied by rapid economic growth.
In the long view of history, the average rate of economic growth in the
United States has been exceptionally high. In the latter part of the 19th
century per capita real incomes in the United States and industrial Europe
were roughly equal. But by the middle of this century U.S. real per capita
income and output were roughly double those in advanced European economies. We expect that the rate of growth of real per capita income m the
1970's will be even higher in this country than our historical average. This
will happen solely because we will have unusually rapid growth of the labor
force relative to the growth of the population. Without special policies to
encourage productivity gains, a faster rate of growth of output per worker
or per worker-hour than the country has experienced since the end of World
War II does not seem to be a reasonable expectation. There is some evidence
that the higher rate of growth of the labor force might also affect productivity
favorably, but there are also reasons for fearing that productivity may rise
less than in the past. One reason commonly cited is the increased proportion
of the population that will be employed in industries whose gains in productivity are slow. Although there is no assurance that productivity in the
U.S. economy will rise as fast as in the recent past, extraordinary increases
in the rate of productivity have been achieved by some other countries,
notably Japan. This fact at least raises, though it does not answer, the
question whether there are applicable policies that would also accelerate
productivity here.
The rates of growth of total capacity to produce and of output per hour
of work will depend principally on the decisions of individuals and businesses—decisions about saving and investing, about the education of children
and the training of adults, about the pursuit of opportunities to earn higher
incomes. Still, the actions of Government also affect the rate of growth and
must be evaluated from that standpoint. The policy of this Administration
has been aimed at sustaining the rate of growth of productivity to which we
have been accustomed and if possible raising that rate moderately. A drop
in the rate of growth of productivity below the expected increases in real
wages and in real taxes would generate difficult tensions, especially when
the illusions of inflation were fully recognized. A higher rate of productivity
growth would be desirable to satisfy escalating demands, but in the American
free market economy the Government's ability to stimulate growth in
productivity is limited.
Some of the major policies of the Administration to promote growth may
be briefly noted:
The struggle against inflation is itself critical for economic growth. The
institutions for mobilizing savings in the United States and channeling them
into investment depend basically upon reasonable confidence in the value of
the dollar. Many kinds of investment which make a valuable contribution to
growth would suffer if the future stability of the general level of prices
became highly uncertain.
The Administration has kept Federal spending on a path that would not
exceed the revenues the tax system would yield under conditions of full
employment. With this policy the Federal Government does not absorb
private funds to finance a deficit when the amount of private investment is
crowding against the supply of savings.
Despite the stringency of the budget position, the Administration has
supported a continued strong Federal effort to promote research and development. Total obligations for the conduct of research and development in
fiscal 1972 will be $16.7 billion, according to the Budget just submitted, up
8 percent over 1971. For research alone the increase will be 9 percent, and
most of that is outside the defense program. Obligations of the National
89
Science Foundation for research will be 44 percent higher than in 1971 and
71 percent higher than in 1970.
The Administration has supported an increase in manpower training
programs as a means of speeding up the improvement of the capabilities of
the labor force. Training is also a way of helping workers to adapt to
changing requirements in labor markets and thus of reducing the amount
of unemployment. The Budget submitted by the President in January provided for an increase of 40 percent in outlays for manpower programs, between fiscal year 1970 and fiscal year 1972. In addition the Administration
has proposed a reorganization of the training programs to improve their
effectiveness and adaptation to local needs.
A new expanded program of student loans, grants, and work-study payments with subsidies based on need has been proposed to ensure that the
post-secondary education of those persons whose higher education would be
most valuable to themselves and to the Nation is not limited for financial reasons. It is estimated that 2.5 million students will receive benefits from
this program in fiscal 1972.
The Federal Government is the largest employer in the country, having
over 2.5 million civilians on its payroll at the end of 1970. An increase in
the productivity of these wrorkers would have a marked effect on average
productivity in the economy as a whole. The Administration is making
a determined effort to improve management and personnel utilization
throughout the Federal service. Probably the most fundamental step in this
direction w7as the reorganization of the postal service to permit the application of businesslike standards of investment and management.
TAXES AND GROWTH
In 1969 the Administration supported repeal of the investment tax credit.
At that time it was an excessive stimulus to business investment in view of
competing demands on the economy. In the Tax Reform Act of 1969 the
Congress went considerably beyond this. By changing a number of provisions of the tax law, it raised the tax burden on investment, through
higher levies on corporate profits, and thereby reduced both the supply of
internal funds available for business investment and the incentive to invest.
At the time the Administration suggested that if Congress considered the particular changes essential for reasons of equity or other considerations it should
offset their overall effect by reducing the corporate profits tax rate. Congress
did not, however, accept that suggestion.
The repeal of the investment tax credit, combined with the other features
of the Tax Reform Act of 1969, yielded a tax revision that was excessively
burdensome on business investment, and the Administration recognized that
this imbalance would need to be redressed at an early date. Surveys of business investment for the period immediately ahead now indicate a flattening
in money terms and probably some decline in real terms in this key ingredient
for future economic growth. This is an appropriate time to reduce the bur-
90
den on business investment. Accordingly, the President has announced a re^
vision of the depreciation rules that will provide greater incentive for business
to invest in capital equipment. This will be accomplished by permitting tax
lives which are shorter by 20 percent for most types of equipment. Although
the effects may build slowly, the stimulus to business investment will help
to support the recovery of the economy as well as to stimulate economic
growth and productivity.
THE NATIONAL COMMISSION ON PRODUCTIVITY
Recognizing the importance of economic growth in the future of America
and the contribution that all sectors of the society could make to it, the
President in June 1970 established the National Commission on Productivity.
The Commission included representatives of business, labor, the general
public, and the Federal Government. Its basic function is to recommend
policies, not only for the Federal Government but for others as well, to
speed up the rise in productivity.
The Commission was established against the background of concern with
the inflation problem. The importance of productivity as an offset to increases in labor costs per hour is well recognized. However, the purposes
of productivity improvement and the interests of the Commission extend
beyond the control of inflation. Improvement in our levels of living, including improvement of our physical environment, depends on productivity
gains. The stakes here are high. If we could, for example, increase the rate of
productivity growth by only one-tenth of 1 percent a year, we could produce
$15 billion of additional output per year by the end of this decade.
In pursuit of its objectives the Commission has organized itself into four
working groups, designated by the general topic which each will examine.
They are:
1. Education and research.
2. Management organization and capital.
3. Labor and management policies and practices.
4. Government activities.
Each of the working groups has within its scope a large number of potential policy questions and programs for review. Each group will consider the
broad, aggregative issues coming under its jurisdiction—such as the impact
of education and of research and development on productivity; capital
investment needs and their implications for savings; practices in collective
bargaining that lead to higher productivity and higher rewards to workers;
and the influence of Government actions such as procurement, regulation,
and construction contracting. The Commission also plans to make studies or
recommendations about specific industries, especially where productivity is
relatively low; the utilization of scientific and technical manpower; and
methods of improving productivity in Federal, State, and local government.
ECONOMIC GROWTH AND NATIONAL PRIORITIES
If it is agreed that economic output is a good thing, it follows by definition
that there is not enough of it. This fact means in turn that choices must be
made among uses of it. Each of us is constantly encountering this necessity
in the management of his private affairs. By and large the way the national
output is used is decided by millions of decisions of private households. But
the question of how it ought to be used—commonly labeled the question of
national priorities—has been a matter of increasing national concern. There
are several reasons for this. First, the degree to which the Federal Government influences the uses of the national output has increased, and the degree and pattern of Federal influences that are desirable is itself an open question. Second, the validity of private decisions about the use of resources
is increasingly being challenged.
The effects that Federal policy may have on the uses of the national output are usually considered in the context of the annual budgetmaking and
appropriations process. The underlying notion is that a certain amount of
money, presumably representing claims on the national output, is to be allocated to Federal use and then divided up among alternative Federal uses,
such as defense, health, or highways. The annual budgetary process is essential because it forces periodic evaluation of many Federal programs, and it
will undoubtedly continue to be a basic framework for making decisions.
However, if we are to understand and control what we are doing, it is necessary to go beyond the annual allocation of the Federal budget total and
consider over a longer span of time and within a wider framework the Federal
influence on the allocation of the total national output.
There are several reasons for viewing national priorities in a larger context. One is that many Federal budget decisions strongly influence State
and local decisions as well as private decisions. It is often difficult to quantify exactly how and to what degree these other decisions will be affected,
but in some cases the influence is clearly substantial. There are many ways
in which Federal budget decisions influence private and State and local
decisions. The volume of Federal transfer payments affects the level and
composition of private consumption. The volume and character of Federal
grants-in-aid affect the level and character of expenditures by State and
local governments. The volume and character of Federal loans, interest
subsidies, and tax provisions affect the volume and character of private
investment. Federal provision of services and facilities, such as highways,
influences the level and character of private and State and local spending,
since these services and facilities in some cases compete with and discourage
non-Federal expenditures and in other cases complement and encourage
them.
Although it is often difficult to define precisely how these Federal decisions influence non-Federal decisions, the pervasiveness of the phenomenon means that the influence of Federal on non-Federal decisions cannot
be ignored. One major purpose behind the projections of GNP and its com-
92
ponents that were presented in the 1970 Economic Report of the President
and are continued this year is to account for some of the indirect effects of
Federal budget decisions.
A second major reason for analyzing Federal budget decisions in a broader
context is that the consequences of decisions almost always extend well beyond the annual reach of the budget. For example, the Housing and Urban
Development Act of 1968 stipulated a goal of 26 million housing units for
the 10-year period 1968-78. This Federal decision about national priorities
actually concerned the share of GNP devoted to housing, not the share of
the Federal budget related to housing. But it was also a declaration
which had an important bearing on the targets for national investment and
savings and on use of resources for the entire 1968—78 period. Such decisions
are, of course, not irrevocable and need to be reconsidered in the light of
changing conditions and goals. This is not, however, a substitute for initially
exercising as much foresight as possible. There are many other examples of
Federal laws or budget decisions that have important and long-lasting implications for the determination of national priorities. The recent act to increase
Federal pay commensurately with private wages and salaries links the Federal budget to wage increases in the private sector. The proposed automatic
increases in Social Security payments in response to increases in the consumer
price index is another example of budget decisions for the future that are
built into current law and are therefore beyond control except by further
legislation. Another extreme example that illustrates the degree to which
future decisions about priorities are made today is Federal loan subsidies.
Such subsidies may be very small for any one year, including the initial year,
but they do commit the budget to large and growing outlays in future years.
Sections 235 and 236 of the National Housing Act, for example, provide for
mortgage payments and interest subsidies entailing new commitments for
1971 amounting to an estimated $400 million. If the programs remain on the
books and new commitments continue at the 1971 rate, the annual outlay
would ultimately stabilize at $14 billion per year, since the subsidized mortgages have an average term of 35 years. While these programs are playing an
important role in the achievement of social objectives, they do limit flexibility
in changing the budget in the future and in changing the composition of
future national output.
A third reason for making projections for the entire economy rather than
for the budget only is that many Federal decisions which affect the allocation
of the national output do not pass through the Federal budget. This is true
of many regulatory decisions and decisions about monetary policy, for
example. A Federal decision to require antipollution devices will require
additional investment that can only be made at the expense of other uses of
our national output. This investment will then not be available for projects
that improve efficiency in the more orthodox sense, and therefore gains in
measured productivity may be smaller, product prices higher, and increases
in the array of goods and services available to consumers smaller. While this
93
411-364 0—71—7
decision to require antipollution devices does not enter the budget, it does
require or imply an important decision about national priorities and the uses
of national output.
The pervasive effects of Federal decisions throughout the rest of the
economy and through time require close scrutiny of Federal decisions to
ascertain their total impact. Unfortunately, many of the linkages are not well
known and can only be approximated at this time. Even such a rough outline,
however, may be more helpful than ignoring the problem entirely.
FUTURE NATIONAL OUTPUT AND CLAIMS UPON IT
This section presents estimates of the total output that would be available
in 1975-76 if the capacity of the economy were fully utilized. It also offers
some very tentative estimates of the uses that would be made of that output as a result of existing Federal programs and of the claims and propensities observed among private businesses, households and State and local
governments. The estimates are summarized in Table 26.
The procedures for deriving the potential supply of GNP and the visible
private and government demands when the economy is operating at potential are similar to those used in the 1970 Economic Report of the President.
The projections of Federal expenditures incorporated in the estimates are
shown in Table 27.
The gross national product available is estimated on the basis of assumed
characteristics of supply in the economy in the next 5 years. The principal
element in this computation is an assumed 3-percent trend rate of increase of
productivity (output per labor-hour) in the private economy. No method
exists for estimating precisely the productivity growth of the economy over
a long period, since it is subject to the rate of technical progress, the industrial
composition of output, the mobility of the labor force, and many other complex influences. Behind the assumption of 3-percent productivity growth is
an industrial composition of output that shifts fairly rapidly toward the service sector and the government sector. This shift toward sectors with historically low rates of productivity gain and low levels of productivity tends to
generate a lower rate of productivity increase for the entire economy. The
assumed rate of technical progress varies, of course, from industry to industry. The specific detail behind this productivity assumption is available in
Table A-15: The U.S. Economy in 1980, Bureau of Labor Statistics Bulletin
No. 1673. The total labor force and the civilian labor force are assumed to
rise about 1.8 percent per year in line with projections of the population
and of labor force participation rates. It is also assumed that average hours
worked will decline by 0.2 percent per year in the private sector.
These assumptions, and others about how output will rise as the total
labor force increases and about the private and government composition
of final output, yield a potential growth rate of GNP of about 4.3 percent.
The actual real GNP could in any year be above or below the potential,
94
TABLE 26.—Real gross national product, 1955, 1966, and 1969, and projections
for 1975-76
Actuals
Projections
Claim
1955
1966
1969
1975
1976
Billions of dollars, 1969 prices
Gross national product available-
569.0
845.5
931.4
1,199
1,251
Claims on available GNP
569.0
845.5
931.4
1,188
1,232
69.8
53.8
344.3
96.9
88.3
94.4
519.2
137.5
101.3
110.8
577.5
139.8
83
140
768
192
83
144
802
198
55.1
34.5
92.0
29.4
16.1
99.3
32.0
8.5
128
52
12
134
52
13
6.1
1.9
5
5
.0
.0
11
19
Federal Government purchases
State and local government purchases..
Personal consumption expenditures
Gross private domestic investment
Business fixed investment
Residential structures
Change in business inventories.
7.3
Net exports of goods and services...
4.2
Unallocated resources
Addendum: Federal surplus or deficit (—), national income
accounts basis
.0
Per capita personal consumption expenditures
5.6
-.2
9.3
25
32
2,083
2,637
2,842
3,529
3,641
Percent of total GNP available
Gross national product available.
100.0
100.0
100.0
100
100
Claims on available GNP
100.0
100.0
100.0
99
99
12.3
9.5
60.5
17.0
10.4
11.2
61.4
16.3
10.9
11.9
62.0
15.0
7
12
64
16
9.7
6.1
1.3
10.9
3.5
1.9
10.7
3.4
.9
11
4
1
7
12
64
16
11
4
1
.8
.7
.2
O)
O)
.0
.0
.0
1
2
1.0
.0
1.0
2
Federal Government purchases
State and local government purchases..
Personal consumption expenditures
Gross private domestic investment
Business fixed investment
Residential structures
Change in business inventories.
Net exports of goods and services...
Unallocafed resources
Addendum: Federal surplus or deficit ( - ) , national income
accounts basis
.
1
Less than 0.5 percent.
Note.—Projections are based on projected Federal expenditures (see Table 27) and their influence on various components of GNP.
Detail will not necessarily add to totals because of rounding.
Sources: Department of Commerce and Council of Economic Advisers.
TABLE 27.—Projections
of Federal Government expenditures, national income
accounts basis, 1975—76
[Billions of dollars, 1969 prices; calendar years]
Projections
Type of expenditure
1976
1975
Federal Government expenditures
.
_
Purchases of goods and services
Transfer payments to persons l
Grants-in-aid
Other .
1
_.
.
Excludes transfer payments to foreigners, which are included under "other".
Note.—Detail will not necessarily add to totals because of rounding.
Sources: Office of Management and Budget and Council of Economic Advisers.
95
_
216
?17
83
84
30
18
83
86
30
18
though it is the object of policy to keep a reasonable balance between actual
and potential output. This chapter is concerned with the allocation of the
total output when it is equal to potential.
Briefly stated the other major components are determined as follows:
1. Claims on Available GNP. These are the sum of the demands for
output (items 2 through 7).
2. Federal Purchases. These involve a projection of the costs of existing
Federal programs and new initiatives proposed by the Administration.
The dollar costs of existing programs have been increased where this is
proper to allow for the growing population, the rising workload, Federal
pay increases, and relative price increases of the goods the Federal Government buys. These dollar costs are then deflated to 1969 prices.
3. State and Local Purchases. The growth of these purchases in real
terms is assumed to be a function of the rise in real GNP, Federal grantsin-aid, and the population.
4. Personal Consumption. Purchases by consumers are assumed to be a
function of real GNP, Federal personal taxes, State and local taxes, Federal
transfers, State and local transfers, and a level of personal saving that
averages 6.5 percent of personal disposable income.
5. Business Fixed Investment. In real terms this component is estimated
to be about 12 percent of real private GNP in 1976. This proportion has
been adjusted upwards from the assumption used in the 1970 Economic
Report of the President because of the shortfall of actual below expected
investment in 1970 and 1971 and because of the effects of the recently
adopted accelerated depreciation allowances.
6. Residential Construction. In real terms this component is estimated to
follow a path that achieves the 26 million housing units explicitly called for
in the Housing and Urban Development Act of 1968.
7. Inventory Investment and Net Exports. Both are expected to rise slowly
at about the same rate as total real GNP.
According to these estimates, present programs and tendencies would
leave unallocated to any specified use 1 to 2 percent of the potential output
in 1975-76. This does not mean that this proportion will find no demand
and will therefore remain unproduced. Whether that happens or
not will depend on factors such as fiscal and monetary policy discussed elsewhere in this report. What it does mean is that the simple relationships
used here do not tell how that 1 to 2 percent of the potential output will
be used. There are various possibilities for its use. If the economy is kept at
its potential by monetary policy, for example, then an excess supply of
savings implicit in the projected excess supply of output would depress
interest rates; it would probably also reduce planned saving and raise investment, including residential construction. Another possibility is that taxes
would be reduced, presumably with the effect of increasing private consumption and perhaps investment. A third possibility would be an increase
96
of Federal expenditures; in that case the effects on the pattern of output
would depend on the nature of the expenditure.
The estimates also reveal a Federal budget surplus in the national income
accounts of about 2 to 3 percent of potential output in 1975-76. This surplus
does not by itself explain the existence of unallocated resources. In fact, as
Table 26 shows, there were substantial surpluses in 1955 and 1969, when
obviously there was no unallocated output, and actual output was approximately at the potential. So in 1975-76 the unallocated resources could be
used without reducing the surplus. Still, two of the three methods listed above
for allocating the unallocated resources—increasing expenditures and reducing taxes—would also reduce the budget surplus. In the simplest case, if all
the unallocated resources were devoted to Federal purchases, the annual
surpluses would be reduced to about 1 percent of potential output—which
would be about the same as in 1955 or 1969. These surpluses would be an
addition to private saving to finance private investment and State and local
deficits.
However, the lesson in the estimates is not that there are unallocated resources for the mid-1970's, but that they are already so small There is a
natural tendency in the political process to add commitments for continuing
expenditures while clipping away—slow7ly and gradually, or occasionally
with bigger strokes—at the revenues. The margin for these actions is already
small. Adding $3 billion each year to the cost of existing programs, in
1969 dollars, would exhaust the unallocated economic resources that now
appear for 1975-76. To insist on doing more, taking the expenditure and
revenue sides of the budget together, would draw resources from other uses.
If the lid were kept on the economy by tight money to prevent inflation,
high interest rates would tend to draw these resources out of housing, State
and local government outlays, and business fixed investment. If inflation were
permitted, the share of the national income going to taxes would rise and cut
real consumption. With higher prices there would be higher money incomes,
but taxes would rise still more rapidly, since the Federal tax system is progressive. This is the simplest way in which excessive Government spending or a
reduction of nominal tax rates restores the effective tax rate needed to equate
aggregate supply with aggregate demand.
The estimates presented here reveal an increase in real consumption between 1969 and 1976 that is much faster than occurred from 1955 to 1969. In
the earlier period real per capita consumption increased only 2.2 percent a
year, while in the period ahead it is estimated to rise by 3.6 percent a year.
Most of this difference is due to an expected faster rise in per capita output
in the later period—3.1 percent against 2.1 percent. This estimated rise
is in turn the result of the projected faster growth of the labor force relative to population in the years ahead. The remainder of the difference results
from a faster increase in the share of consumption in the GNP, due mainly to
reductions of tax rates and an increase of transfer payments. The reduction of
taxes, the increase in transfer payments, and the consequent increase in the
97
consumption share are made possible by a reduction in Federal purchases, a
reduction that shows up absolutely and even more as a share of the potential
output. It is mainly a consequence of the projected absolute and relative
decline of defense spending in real terms.
The sum of the growth in available resources and the decline in Federal
purchases between 1969 and 1976 may be viewed as a "peace and growth
dividend." It amounts to $338 billion in 1969 dollars. About 66 percent
of this would be absorbed by personal consumption according to the estimates presented here, almost 10 percent by State and local purchases, and
the remainder, including 6 percent which still is unallocated, by the other
categories.
The share of State and local purchases in the total remains almost unchanged despite the effect of revenue sharing, which is estimated to add
about $5 billion in 1969 dollars to State and local purchases by 1975. This
means that per capita State and local purchases would be rising at a slightly
lower rate than per capita output, about 2.6 percent a year in real terms
compared with 3.8 percent from 1955 to 1969. During the years ahead the
school-age population will be increasing much less rapidly than in the
earlier period; since education counts for a very large proportion of the
cost of State and local governments, we should therefore expect a slower
increase in per capita State and local services.
The present estimate of unallocated resources in 1975 is slightly smaller
than was estimated in last year's Economic Report of the President. Many
of the components have changed but tended to have offsetting effects on the
level of unallocated resources. On the one hand, the Federal budget, especially in transfers, grew much more rapidly than was projected a year ago,
a fact which has tended to increase private consumption and State and local
spending and to reduce the unallocated portion. On the other hand, the
higher inflation than was expected in the last year has increased "real"
Federal personal tax receipts at full employment (because of the progressiveness of the tax system) ; as a consequence projected private consumption
has been reduced because the relatively higher Federal personal taxes reduce
disposable income. More succinctly, higher inflation rates act like a tax on
real income, but the rapid growth of transfer payments has sustained real
disposable income.
ALLOCATION OF THE NATIONAL
AMONG FUNCTIONS
OUTPUT
For many purposes the discussion above covering the past and prospective uses of the national output classified by the purchaser (Federal, State
and local governments, consumers, businesses) is significant. We are interested in the buyers who will claim the output and the size of the different
markets that will absorb it. But "priorities" are also reflected in the distribution of the national output by functions or uses, such as health and educa-
tion, regardless of who is the purchaser. There is, for example, interest in
how much of the national output is devoted to education, and whether it is
paid for privately, by State and local governments, or by the Federal
Government.
This section presents estimates of the allocation of the national output by
certain broad functions and also the share that Government expenditures
represent in the total for each function. It should be noted that the estimates
are crude in many respects, the existing national accounts statistics not having been developed for the uses made of them here. The following discussion
is offered as much to illustrate a fruitful approach that deserves more work
as to suggest substantive conclusions.
The share of Government expenditures in a functional category is not an
adequate measure of the amount of the total that is'"due to" Government,
with the implication that the total would be correspondingly lower if the
Government's share were lower. Obviously, Government cannot be adding
to the share of all functions. The output would be divided among all the
functions somehow even if there were no Government. It cannot even be
assumed that Government always enlarges those functions when it spends
more than the average. Government expenditures on occasion may displace
private or State and local expenditures—or it may attract them. Nevertheless, the figures provide an initial basis for thinking about how the national
output is used and how the Federal Government may be influencing the
process.
The allocation of the national output over the past 15 years is shown in
Table 28. The appendix to this chapter gives a more exact definition of the
different functions. The years that were chosen for Table 28 are years when
the economy was at or near full employment; the comparisons between these
years are therefore not affected by substantial differences in the economy's
operating rate.
TABLE 28.—Percentage distribution of GNP in current prices, by function, 1955, 1966, and 1969
Percent of tot 3l GNP, current prices
Function
1955
Total GNP
Basic necessities
Education and manpower
Health
.
Transportation
General government
Defense.
.
...
New housing
Business fixed investment
Net exports and inventory change
All other
..
-
.. - ... ... .
1969
1966
100.0
100.0
45.7
3.7
4.1
10.6
2.0
9.3
5.9
9.6
2.0
7.1
42.3
5.7
5.6
9.9
2.7
7.8
3.5
10.9
2.7
9.0
100 0
41 R
6.3
R 4
in n
3.1
83
3.7
10.7
1.1
8.8
Note.—Detail will not necessarily add to totals because of rounding.
Sources: Department of Commerce and Council of Economic Advisers.
Changes over the past 15 years have been substantial but are not unexpected. With the advance in per capita incomes, it is not surprising that
99
spending for basic necessities, such as food, clothing, and rents (actual and
imputed), has declined in relation to GNP. There has also been a general
trend away from defense and housing investment.
The sectors where strong growth in demand has occurred are education,
health, and general government. The general government category includes
expenditures for fire and police departments and natural resource programs,
including pollution abatement. Those sectors where expenditures are increasing are also the sectors where prices have risen very rapidly. If the
GNP and its functional components were adjusted for these relative price
increases, the distribution of the functional components would be different,
and shifts in the distribution probably would not be as marked.
The role of the Federal Government in this shift in the character of output
has been important. It is simple to measure the direct Federal and State and
local purchases in each of the functional categories. But the direct share of
national output that the Federal Government purchases does not fully
represent its influence in determining the composition of national output.
For example, the Federal Government influences the functional composition
of GNP through its grants programs. Large grants have been made to State
and local governments, and these grants, which are tied to particular uses,
have accounted for an increasing portion of the Federal budget. Also, transfer programs, such as Medicare, have been increasing rapidly in recent years.
These transfers are often tied to particular end uses of GNP, and so they are
also important determinants of the final composition of GNP. Table 29
lists the functional composition of the Federal budget.
TABLE 29.—Percentage distribution of total Federal Government expenditures,
by function, 1955, 1966, and 1969
[Percent]
Function
1955
Total Federal Government expenditures l_.
100.0
23.2
2.3
1.7
1.8
3.4
60.0
-.3
7.8
Basic necessities
Education and manpower
Health
Transportation
General government
Defense
.
New housing-.
Allother
1G66
100.0
27.2
3.7
4.3
4.3
3.8
45.9
.7
10.0
1969
100.0
29.5
3.8
8.0
3.5
3.6
44.2
1.2
6.2
i Include purchases of goods and services, grants-in-aid, and transfer payments; exclude net interest and subsidies
less current surplus of Government enterprises.
Note.—Detail will not necessarily add to totals because of rounding.
Sources: Department of Commerce and Council of Economic Advisers.
The direct and indirect share of the national output for each function that
can be traced back to total Federal expenditures is shown in Table 30. The
general trends toward education and health care are evident in this table
because the Federal contribution in these areas is made primarily through
grants and transfers. It is assumed here that a transfer or a grant for a specific
function is equivalent to a direct purchase by the Federal Government. This
ioo
is a reasonable assumption because many of the grants and transfers for these
purposes are directly tied to purchases by the private sector or by State and
local government sectors.
TABLE 30.—Total direct and indirect Federal Government expenditures as
percent of output used, by junction, 1955, 1966, and 1969
Percent of output used 1
Function
1955
Total Federal Government expenditures
Basic necessities
Education and manpower
Health .
Transportation.. . . .
General government
.
Defense
...
New housing
All other
.
2
. . .
.......
.
.
. . . . . .
1966
1969
15.5
17.0
18.6
7.9
9.8
6.4
2.7
25.5
99.9
-.7
17.1
11 0
11.0
13.2
7.5
24.3
99.9
3.6
18.9
13.2
11.2
23.4
6.5
21.2
99.8
6.1
13.2
1
Federal expenditures for each function as percent of GNP for that function. See footnote 2.
2
Total Federal expenditures as percent of total GNP. Expenditures include purchases of goods and services, grants-in-aid,
and transfer payments; exclude net interest and subsidies less current surplus of government enterprises.
Sources: Department of Commerce and Council of Economic Advisers.
Transfers and grants that are not tied to specific purchases in a sector are
assigned to "basic necessities." For example, Federal welfare payments and
Social Security payments are rarely tied to specific purchases, but it may be
assumed that they are used by and large for food, clothing, and rents. On
this assumption, it is evident that the Federal share in this sector has grown
very rapidly in the past 15 years.
Finally, the total public share of these functions—both direct and indirect—is shown in Table 31. This table is similar to Table 30 except that
it emphasizes the important traditional role of State and local governments in
such functions as general government and education.
TABLE 31.—Total direct and indirect Federal and State and local government
expenditures as percent of output used, by function, 1955, 1966, and 1969
Percent of outp ut used 1
Function
1955
Total Federal and State and local government expenditures
Basic necessities
Education and manpower
Health
Transportation
General government
Defense
New housing
Allother
.
1966
1969
23.2
26.7
29.6
9.9
89.3
23.4
16.3
100.0
100.0
.1
18.8
13.2
86.7
28.8
20.4
100.0
100.0
4.7
20.8
15.8
87.0
39.9
20.2
100. C
100.0
6.3
15. C
1 Government expenditures for each function as percent of GN P for that function See footnote 2.
2
Total Federal and State and local government expenditures as percent of total GNP. Expenditures include purchases
of goods and services and transfer payments; exclude grants-in-aid, net interest, and subsidies less current surplus of
government enterprises.
Sources: Department of Commerce and Council of Economic Advisers.
IOI
What do these data suggest about the uses of the Nation's output? While
the estimates are tentative and involve more than the usual quota of statistical uncertainties, several conclusions are at least suggested.
First, it is clear that since the mid-1950's the Nation has been increasing
steadily the share of its economic resources devoted to education and manpower training, health, general government, and business investment.
In effect we made room for their rising shares by reducing the proportion of
our economic resources devoted to national defense, residential construction,
and basic necessities. Since prices rose most rapidly in those markets where
productivity growth wras low and demand was strong, changes in the pattern
of output would be more moderate if output were expressed in constant
prices throughout, but the same pattern would be evident. This is a judgment
that cannot be verified for the economy as a whole with existing price deflators; it can be verified, however, and is true for the private sector of the
economy. Since the decline in resources absorbed by the provision of basic
necessities was small, and would be expected in an economy with rising
incomes, the significant shift was from national defense and residential
construction to education, health, business capital formation, and general
government.
Second, the data provide some indication of the extent to which public
budgets have led the way in changing national priorities. The question itself
is, however, a difficult one. Growing government outlays for a function
which is itself growing in importance would suggest that this government
activity was resulting in the allocation of more total economic resources to
that function. Indeed, an increment of public outlays may attract private
resources to the same use. Government's influence on the allocation of
resources might, however, work the other way. If the Government assumes
more direct responsibility for certain functions, private claims on resources
may be increasingly devoted to other functions. Therefore we cannot be
certain that more resources are being used in those areas where Government
contributions have increased. Government inevitably provides all services for
some functions such as general government or national defense through
public budgets, and it therefore has direct control over the share of the
national output devoted to these functions.
Nevertheless, in spite of the ambiguities in the interaction of public and
private decisions, some things can be said about the impact of government
fiscal activities on changes in the use of our economic resources. For one
thing, public outlays, as indicated in Table 31, have been growing in importance relative to the size of the economy. They have risen from an amount
equal to 23.2 percent of GNP in 1955 to 29.6 percent in 1969, the growth
being about evenly divided between Federal outlays and outlays of State and
local government units. The most dramatic and clear-cut effect of public
budgets on uses of output seems to have occurred in health-related outlays.
The share of our total economic output used for health care rose from 4.1
percent of GNP in 1955 to 6.4 percent in 1969. And the share of these out-
102
lays that was financed by public expenditures rose dramatically from 23.4
percent in 1955 to 39.9 percent 14 years later. Public outlays also increased
as a share of the total economic resources devoted to basic necessities, housing, and transportation.
Within the public sector the Federal Government increased its share
in financing most of the categories of uses of output, health expenditures
being the most striking example, with housing expenditures next. State and
local governments, however, are providing a larger share of total general
government services than in 1955.
These data suggest that there are many different forces influencing the
final composition of the national output. Most of these express themselves
in the private sector of the economy, primarily because it is still the largest
sector. There has been a marked shift in the composition of the Federal
budget, but that shift is only weakly translated into a similar shift in the
composition of national output. However, it is important to recognize that
some Government programs are designed to change not the composition
of final output but the distribution of income. For example, the growth in
Federal expenditures associated with basic necessities is related to the large
increases in income maintenance payments between 1955 and 1969. This
type of program is designed primarily to redistribute income and not to
change the functional allocation of the GNP. Consequently, expansion of
programs to redistribute income could very well have substantial, little,
or no effect on the functional allocation of GNP. This means that neither
the breakdown of GNP by purchasers given in Table 26 nor the functional
breakdown of GNP given in Table 28 is a completely appropriate framework for the analysis of government policies designed to change income
distribution.
CONCLUSION
The illustrative projections of GNP and the claims on GNP establish a
broad framework for the analysis of priority decisions.
Federal budget decisions influence many of the demand components of
GNP, and this influence will be quite pervasive in the next 5 years. The
magnitude of demands on resources according to this long-range outlook is
very great when consideration is given to projections of existing tax and
expenditure programs. The potential output left over after visible claims
are met is small. If new claims are to be satisfied beyond that, some existing
claims will have to be cut. This can be done by tax or expenditure changes.
Such changes require explicit decisions which are difficult to make, but they
are necessary if a significant shift in the composition of output is desired.
One alternative to making hard choices is inflation, since inflation is a
process by which competitive claims on output are finally arbitrated. But
this is a capricious way to resolve these conflicting demands.
When the allocation of GNP among certain functional components is examined, it is clear that there have been substantial changes in the past 15
years. Most of these changes are attributable directly to private decisions,
103
since many of the Federal budget changes were not closely related to changes
in the allocation of GNP. This reflects the fact that the private sector is by
far the largest sector in the economy, and there are probably some important
substitutions between private decisions and Federal budget decisions.
APPENDIX
Definitions of Functional Components
The composition of each of the eight functional components of GNP
(basic necessities, education and manpower, health, transportation, general
government, defense, new housing, and all other) is described below. Each
function is defined as the sum of private purchases and government purchases. The sum of the eight functions, together with business fixed investment, the change in inventories, and net exports, comprises GNP. Private
expenditures were obtained from the Survey of Current Business, Table 2.5:
Personal Consumption Expenditures by Type of Product. The source of
the government expenditures was Table 3.10: Government Expenditures by
Type of Function. Federal purchases and State and local purchases were
added to obtain total government purchases.
The government sector contributes directly to the functions through purchases and indirectly through transfer payments. Within the government
sector, the Federal Government contributes to the State and local expenditures through grants-in-aid. A more detailed description of the functional
categories and the data used are available from the Council of Economic
Advisers.
The descriptions below broadly identify the functional components that
are used in the national income accounts and were arranged to form eight
principal functional categories. The descriptions do not attempt to justify
the inclusion or exclusion of different kinds of spending in different functional categories. It is often difficult to determine in any precise way how the
categories should be defined, and in the classification process there are many
serious problems that cannot be resolved without some judgment. But it is
hoped that the composition of the final output and the trends in the relative
shares of the categories are not seriously affected by the ambiguities of
classification.
It is worth noting again that these GNP components do not measure intermediate products that often serve a useful purpose aside from their contribution to the real value of the final product. On-the-job training is a good
example of an educational function that is not counted as real output.
Furthermore, the functional categories are not wholly consistent since the
functional categories for government spending are only partly consistent
with those for private spending. There are other shortcomings of these data,
104
but they are probably sufficiently accurate to present a broad view of the
composition of output.
Education
Under education are included private expenditures on education and
research, together with government expenditures on education, on the education and training of veterans, and on labor.
Health
In the private sector the health expenditures consist of medical care expenses, and in the government sector expenditures cover health and hospitals, veterans' hospitals and medical care, Medicare, and Medicaid.
Transportation
In the private sector the transportation category consists of expenditures on
transportation, excluding the purchases of mobile homes, which come under
basic necessities. The public sector includes outlays on highways, water and
air transportation, and transit.
Basic Necessities
The function labeled basic necessities contains several different parts. The
private sector includes expenditures on food and tobacco, clothing, accessories
and jewelry, personal care, housing (rents and the purchase of mobile
homes), household operation, and religious and welfare activities. The government sector purchases include purchases for public utilities (electricity,
water and gas), for agriculture and agricultural resources, and for social security and special welfare. Most transfer payments not given for specific purposes are included as indirect government contributions to basic necessities,
since they are assumed to support private purchases of food, clothing, and
rents. These transfers are principally in the form of veterans' pensions, welfare payments, unemployment compensation, and Social Security payments.
New Housing
Expenditures on new housing included in this function are private investment in residential structures (National Income Accounts, Table 1.1) and
government expenditures on public housing, urban renewal, and community development. The government sector has a negative value for housing in 1955 because some housing built in World War II was sold by the
Federal Government to the private sector.
Defense
The defense function is defined as government defense purchases, excluding atomic energy expenditures. There are no private sector purchases associated with defense. The State and local functions in this sector pertain to
the National Guard.
105
General Government
The general government function consists of government purchases in
general government administration, sanitation, civilian safety (fire, police,
correction), and natural resources (conservation and recreation). There
are, of course, no private expenditures for general government.
All Other
The function labeled all other contains expenditures on those activities not
included in the other seven categories. In the private sector are thus included
personal business, recreation, and foreign travel. In the public sector are
included atomic energy development, space research and technology, international affairs and finance, regulation of commerce and finance, and postal
services.
106
CHAPTER 4
Economic Growth and the Efficient Use of
Resources
W
E ARE, AS THE ANALYSIS IN CHAPTER 3 MAKES CLEAR,
at the beginning of a decade during which claims on our productive
resources will be unusually intense. In addition to continuously rising demands for goods and services for private and public use, urgent new claims
on our economic resources have also emerged, such as the call for an improved environment. While the growth in our productive capability will
also be rapid, 50 percent during this decade being a reasonable expectation,
we must think in new terms about the deployment and organization of our
economic resources if this growth is to be reasonably balanced. The purpose
of this chapter is to explore selected program and policy issues that will
require some new thinking if our economic system is to make its maximum
contribution to national well-being.
The success of our economic system in achieving this goal requires that
the full social cost be paid for the use of resources. Most of our productive resources are, of course, privately owned and can only be used if they are
compensated according to their cost. The worker must be paid for his labor;
the property owner expects a return for the use of his investment in land
or productive facilities. Competition in the free market will normally
lead to the optimal use of these resources. Under certain circumstances,
however, the cost to society as a whole will not be the same as the
private cost of the resources. For example, when a person drives his car
during the rush hour he pays the cost of the gasoline he uses; but he pays
none of the cost of the additional congestion he helps create, except to the
relatively small extent that he himself is adversely affected. This means that
resources may not always be allocated in a way which best serves the national welfare.
Social costs may exceed or fall short of private costs for many different
reasons. For example, when there is no clear private ownership of a resource, the market cannot operate in such a way that the consumer pays
the full social cost. When a monopoly controls a good or service, the price
will tend to be above both the private and the social cost of production.
Government regulation of prices or output can also force prices above or
107
below true social costs; examples in the fields of transportation and energy
will be discussed in this chapter.
In cases where goods are overpriced or underpriced compared with
their true social cost, their consumption patterns tend to be distorted and
the value of national output is diminished. A striking example of this problem, recently and forcibly brought to public attention, is the underpricing
of clean air and water in many communities. Because there are no property
rights for the air and for most bodies of water, air and water have traditionally been treated as free goods to be used at no cost for disposal of wastes.
This arrangement does not necessarily cause problems. As long as the wastes
do not exceed its assimilative capacity, the environment itself performs valuable services free. But when the assimilative capability of the environment is
exceeded, pollution imposes real physical and psychic costs on the community. Clean air and water are then no longer free for society as a whole.
The growing number of such cases has led to numerous demands for
Government action.
In other areas where Government has intervened to set prices for certain
goods and services and otherwise to control their availability, the results
have often prevented the efficient use of resources. Many Government regulatory policies, for example, were formulated under conditions which no
longer exist, and these policies may have to be reconsidered if we are to
have the growth and efficiency in our economic system to meet rapidly
mounting claims on output.
POPULATION GROWTH AND ECONOMIC GROWTH
The growth of population and its concentration in metropolitan areas
have raised increasingly urgent questions bearing on public policy and the
efficiency and growth patterns of our economy. Historically, a growing and
mobile population has been a major source of economic development in
the United States. The waves of migration and the push, westward encouraged by our early land settlement policies accelerated the process of converting an undeveloped land into the world's most productive economy. As
the population grew and spread over the country, agriculture, transportation,
manufacturing, and commerce expanded dramatically. Large markets stimulated production and permitted economies of scale to be realized. Although
the population is now growing at a lower rate than in the past, the absolute
increase continues to be high. The population has also remained unusually
mobile, and this mobility has helped people find the jobs for which they are
best suited. Along with industrialization, there has been steady migration
to urban centers, where economic, social, and cultural opportunities are
more abundant, but where new problems are being created. Conversely,
the problems in many rural areas are those associated with a declining
population.
108
GROWTH AND SIZE: IMPLICATIONS
The magnitude of these changes is striking. Since the first census in 1790,
the U.S. population has increased from 3.9 million to 205 million. Economic
growth, as measured by real GNP, has proceeded even more rapidly than
population growth. In the past 60 years, population has increased by 122
percent while real GNP increased sixfold, so that per capita real GNP
increased by 171 percent (Chart 7). Historically, then, population growth
has clearly not prevented a rapid rise in levels of living as reflected in GNP
(see Chapter 3 for conceptual limitations).
Chart 7
Growth in Real GNP, Total and Per Capita
BILLIONS OF DOLLARS
DOLLARS
ouu
700
RATIO SCALE
—
600 -
/
500 TOTAL GNP IN 1958 PRICES
(Left Scale) \
400 -
y/
/
\
300 -
200 -
^
/
1
y
/v/
1
/-A
\
100
'
/
>/
/
4,000
3,500
•
3,000
2,500
PER CAPITA GNP
IN 1958 PRICES
(Right Scale)
-
2,000
-— 1,500
V
11 1II 1 1II 111 1 11111
1111
1910
1920
1930
1
1
1
1
1
1
1
1
1
1 1 1 11 1 1 11 1 1 11 1 1 11 1 1 11,000
1
1940
1950
1960
1970
SOURCE: DEPARTMENT OF COMMERCE.
The role of population growth in the country's future economic development is less clear cut. While population growth can be expected to lead to
growth in total output, the key question is whether it will continue to bring
about or be associated with growth in output per capita. With as large a
population as ours and with our opportunities for trading with other coun109
411-364 0—71
tries, we may have exhausted many economies of scale. The past conjunction
of rapid population growth and rapid economic growth does not imply that
population growth is necessary for economic growth in the future.
Indeed many people are asking whether population growth may even be
detrimental to further growth of output per capita or of some more comprehensive measure of individual well-being. While there appears to be
no immediate threat, it is less clear that we can be equally sanguine about
the next century. Population projections point toward a substantial further
growth in the number of people. According to the "high" census projection, 321 million persons will be living in the United States in the year 2000,
and the numbers will rise to 440 million in 2020. The "low" census projection estimates 266 million persons in 2000, and 299 million in 2020. Even if
the fertility rate were to drop now to the level required for an eventually
stable population, and no further immigration occurred, the population
would not actually stabilize until the year 2037 because of the high proportion of young people in the present population. At that time, there would be
about 276 million people in the United States.
Why are questions now being raised about the impact of population
growth when such a rise in the numbers of people did not prevent, and
indeed may have encouraged, the Nation's economic growth during most
of its history? The present concern centers on the limited supply of certain
types of resources. While it is impossible to specify the future adaptations in
technology and consumption patterns that will conserve resources, past experience indicates that many unforeseen ways of meeting demands will
be found. But some natural resources could become much more costly than
they are now. Costs have risen, for example, as poorer deposits of minerals
have been extracted and as water and other resources are recycled. The costs
in terms of environmental damage, or in terms of the resources used to prevent such damage, will also increase. Certain natural scenic areas are almost
fixed in supply; and, as they become more crowded, they may provide less
enjoyment for those who use them.
Some of these problems will arise because of our increasing affluence, not
because there are more people. Even by the year 2020 the high census
projection would give us a population density of only 124 persons per
square mile, about one-fourth that in Western Europe today. Each person
will, however, demand more manufactured products, more housing, more
transportation, more recreation, and more services, and this will affect
environmental conditions. Rising affluence is at least as important as a
growing population in creating additional demands on the supply of natural
resources. At the same time, increased affluence makes it easier to bear
the costs that thereby arise. The same factory that could well be denied a
place in a rich country because it creates pollution would be welcomed in
a low income country because it creates jobs. And more costly production
processes which cause less pollution can be used in factories that do locate
in a rich country.
no
POPULATION DISTRIBUTION
Many of the problems that are commonly attributed to excessive population in the United States are actually caused by uneven distribution
(Chart 8). We now have only 58 persons per square mile, about oneeighth of the density in Western Europe and less than one-tenth of Japan's.
The density of the population, however, varies greatly within the United
States. It ranges from 5,327 persons per square mile in the New York City
area to 3.4 for Wyoming, and Alaska has only one person for each 2 square
miles. Although areas with the lowest density at present have always been
sparsely populated, the population of many rural areas has declined. The
proportion of the population living in urban areas has been increasing
steadily and now comprises more than 70 percent of the total.
An important factor in the changing distribution of population is the
shifting composition of national output. When the country was largely
agricultural, settlement was heavily influenced by the distribution of arable
land. A substantial share of the population not employed directly in agriculture was employed in serving the agricultural population. Because of
high transportation costs these persons located close to the farming areas.
A multitude of small centers served the everyday needs of farmers, while
larger, more widely spaced centers undertook activities which were needed
less frequently or in which there were substantial economies of scale. As with
agriculture, clusters of people also developed around such natural resource
industries as forestry, mining, and fishing.
These primary industries no longer have a major influence on the distribution of population. The farm population, for instance, is now less
than 5 percent of the U.S. total, compared to 15 percent in 1950 and 35
percent in 1910. The relatively slow growth of industries dependent on
natural resources, the efficiency with which people and goods can be moved,
and the more rapid expansion of manufacturing and service industries
have encouraged further expansion of the already large population centers.
These centers provide opportunities for specialization and economies of
scale that would otherwise be impossible.
The distribution of populations within cities is also affected by changing
cost factors. The lower the cost of transportation and the higher the value
of spacious living, the more people will spread out around centers. As
people spread out to the suburbs, industries follow. The factors that affect
the distribution of people and jobs tend to reinforce each other. Jobs move
in search of people and people move searching for jobs. As a result an
initially small change in activity at a center can eventually have a large
impact on its size.
The consequences of the tendencies discussed above can be seen in the
population statistics. The population of the 24 metropolitan areas of more
than a million people in 1960 grew 14 percent between 1960 and 1970,
as compared to 10 percent for the remainder of the country. Metropolitan
areas with more than a million persons now contain 39 percent of the total
in
Chart 8
Population Density by Counties, 1970
r
_"_l j
UNDER 10
H I
10-49.9
50-249.9
250 OR MORE
SOURCE: DEPARTMENT OF COMMERCE
population. At the same time, the population within metropolitan areas is
shifting from the central city to the suburban fringe. Fifty-seven percent
of the people in metropolitan areas of more than a million lived outside
the central city in 1970, compared to 51 percent in 1960. In 1969, families
living in metropolitan areas of a million or more had average incomes 13
percent higher than those of families in smaller metropolitan areas and 37
percent higher than those of families outside metropolitan areas. (These
figures do not take account of differentials in living costs.)
Concentration of people and economic activity, however, involves costs
as wrell as benefits. Unless actions are taken to offset the effects of concentration, traffic congestion and air pollution increase with city size. Commuting
time rises and recreation areas become less accessible. Expenditures for
police protection, welfare, and waste disposal are higher per person in very
large cities than in smaller ones.
These costs of larger cities do not necessarily mean that cities should
be smaller. The fact that people continue to move to large cities implies that
they believe they can gain more there than the costs they incur, though costs
imposed on others, such as higher welfare payments or increased congestion
and pollution, may make large concentrations inefficient. If cities are too
large to be efficient or are poorly organized, the problem can be traced in
large part to a failure to charge people for all the costs they impose or to
reward them fully for the benefits of their action.
Traffic congestion provides a clear example of problems that arise when
costs to users fall short of total social costs. When congestion occurs, every
additional car on the streets increases travel costs for all other vehicles. Yet
no driver is required to pay for these costs that he imposes on others. Nor
is there any compensation for a person w7ho leaves the streets, permitting
others to travel faster. A more efficient use of streets would occur if people
were to pay in some way for the consequences of their actions. It has been
suggested, for example, that people should have to buy special permits to
operate cars in congested areas during rush hours, or that a charge for
congestion might be collected through parking lots.
The movement of population to metropolitan areas also creates problems
for declining rural areas. As population density falls, the range of goods and
services offered in an area shrinks. The outmigration of working-age people
lowers per capita incomes and makes it more difficult to finance social
services. Because of declining travel costs, more and more people who work
in outlying areas live in nearby small cities, though the opposite also occurs.
As the labor markets in these cities attain a sufficient size, they may also
attract industrial employers. Some small cities are already experiencing rapid
growth as many business operations and government facilities have been
located in such areas.
Last year the President appointed the Commission on Population Growth
and the American Future. The Commission is now examining how population growth will affect the quality of life and how all levels of government
"3
can best respond to the demands posed by population growth and its distribution. Its work should help the Nation to make better choices among
alternative ways of using some scarce resources.
SAFEGUARDING THE ENVIRONMENT
As the economy grows, more waste of various types is produced. This does
not cause major problems as long as the population is widely dispersed and
the environment is not overloaded. As the population is increasingly concentrated in urban areas, however, the assimilative capacity of the environment in these areas tends to be exceeded. It then becomes more and more
important that these limited environmental resources be used to the best
advantage.
While it might be tempting to say that no one should be allowed to do
any polluting, such a ban would require the cessation of virtually all economic activity. Since society places a value both on material goods and on
clean air and water, arrangements must be devised that permit the value
we place on each to determine our choices. Additional industrial development, increased use of pesticides on farms, and a growing volume of municipal sewage mean dirtier water downstream and fewer opportunities for
recreation. On the other hand, stricter rules for pollution control generally
mean either higher taxes or higher prices for goods. What we seek, therefore, is a set of rules for use of the environment which balances the advantages of each activity against its costs in other activities forgone. We
w7ant to eliminate pollution only when the physical and aesthetic discomfort
it creates and its damage to people and things are more costly than the value
of the good things—the abundance of industrial or farm products and efficient transportation—whose production has caused the pollution.
One of the ways that the competing claims on environmental resources
could be balanced is through the development of "new towns" and resort
communities. In these cases, a developer essentially buys title to a whole
community's environment. He then has an economic incentive to avoid
excessive damage to that environment. If, for example, he lets a factory
buy the right to locate in the community even though it would substantially damage the community's environment, the value of potential residential property will thereby be lowered. Only when the advantages of
industrial activity, such as increased income, outweigh the environmental
disadvantages would the developer permit the factory to locate there. The
same incentives would operate to limit pollution from such activities as
municipal waste disposal.
The concept of unified development does not provide much guidance
for solving pollution problems in areas that are already developed. With
substantial capital invested in existing industrial facilities, a company that
must pay large additional costs for pollution control may find continuing
operations economically infeasible. A major change in liability for pollution costs may, in effect, expropriate the capital of some even while it
114
enhances that of others. Nearby homeowners, on the other hand, may feel
that pollution has always been harmful, and that its existence in the past
does not justify its continuation.
This kind of dispute is central to the pollution problem and has become
increasingly widespread as the various users of air and water seek to assert
their claims to the limited environmental resources. A solution requires
procedures and rules for the use of clean air and water that permit an
orderly settlement of the competing claims on these limited resources, and
that take account of the fact that these resources are not inexhaustible. The
homeowner, the factory owner, and the farmer cannot simultaneously enjoy unlimited use of air and water. Industry and agriculture must recognize
the new sense of urgency and concern about environmental problems. At
the same time we must not overlook the fact that people also want more
and more of the jobs and products of farms and factories.
SOCIAL ROLE OF PROPERTY RIGHTS
Problems similar to those arising from pollution have frequently been
handled by granting private title to limited resources. Agricultural and
forest land were once common property with poorly defined usage rights.
As demands on these resources grew, their use by one party inflicted damage on others. The adjudication of conflicting claims to these resources by
granting private title to them served the important social purpose of providing an incentive for these resources to be used more efficiently.
Air and water resources are harder to divide into meaningful private
parcels than land. If each landowner had title to clean air around his property, a factory in New York that would emit air pollutants might have to
deal with 8 million "property owners," making it difficult to operate any
factories at all.
Because private property arrangements cannot be applied generally to
our air and water resources, environmental problems connected with their
use have to be solved within a framework of common property. The procedures and rules that we develop for resources regarded as common property
must encourage their efficient use., just as would be true if they were private property.
A set of rules for the efficient use of air and water should not only permit
no more fouling of air and water than we wish to tolerate, but it should
also ensure that the tolerated degree of pollution occurs for the most productive reasons. The rules should also encourage the use of resources to
limit the damage done by the pollution that is allowed. Finally, the rules
and procedures should not themselves entail a higher cost of administration
and enforcement than the cost of having no rules.
Specific Rules
As our society has become increasingly aware of the conflicting claims
on air and water, specific rules have been developed for the use of these
"5
resources that recognize their limited nature. As early as 1899 a Federal law
was passed regulating the disposal of waste in rivers and harbors. However,
only with recent legal opinions and legislation has it become clear that the
law could be used to reduce pollution, and the President has recently issued
an Executive Order to use the law in this way.
Two problems must be faced in setting up rules for use of the environment. First, it must be decided how much pollution, if any, will be tolerated and under what circumstances changes in this amount will be permitted. Toward this end, the Federal Government has established the
Environmental Protection Agency. This Agency, together with State and
local authorities, develops standards for ambient air and water quality.
These standards are statements of environmental quality goals considered
desirable for particular areas or for the Nation as a whole. Since past arrangements, which imposed no cost on those who polluted the environment, led to excessive pollution, these air and water quality goals have uniformly sought reduction of pollution. Once such goals are developed,
the next problem is to devise a system of rules for attaining them. Particular polluters must be led to change their actions so that, in fact, less pollution
is produced. The Federal Government and other authorities have also been
active in devising rules to implement attainment of environmental goals.
Foremost among the new rules has been the setting of Government standards applicable to particular pollution sources. Under this system, the Government requires that each source reduce its emissions of pollutants by an
amount sufficient to keep the total of all emissions within the environmental
quality standard. All sources are ordinarily required to reduce emissions
by the same percentage. For example, under recently enacted amendments
to the Clean Air Act of 1967, cars of the 1975 model year will have to reduce
emissions of carbon monoxide and hydrocarbons by 90 percent from 1970
levels. While such Government standards have been applied most extensively to automobiles, similar standards are now being developed and
implemented for other pollution sources.
This system of Government standards provides one mechanism for
attaining environmental goals that recognizes the increasing scarcity of environmental resources. If this system is to generate efficient results, the goal
must, of course, be appropriate. That is, the control of emissions that is
required at each source must produce a high enough quality of air and
water so that further improvements is not worth the costs of further control.
If Government standards are to achieve the best use of environmental resources, there must also be substantial uniformity of the cost of control
among pollution sources. Where these costs differ, the same environmental
quality could be attained more cheaply by having the source with low
control costs undertake more control than the source with high costs; but
this would not occur if uniform standards were applied to all sources. The
standards might, of course, be made nonuniform to account for differences
in control cost, but only at considerable administrative cost because the
n6
Government agency setting the standards would need detailed knowledge
about many different pollution-causing activities. It is also difficult politically
to set variable standards. Many, including of course the owner, would think
it unfair to penalize a plant with low control costs for its efficiency in pollution control by imposing an especially tough standard on such a plant.
Differences in control cost were perhaps an unimportant problem when
attention focused on automobile exhausts. While there are some differences
among types of cars in the cost of controlling exhaust emissions, the common technology of the internal combustion engine limited these differences
and seemed to justify the application of common standards to all cars.
In other cases a pollutant may prove so damaging that a common standard,
namely, an outright ban on all discharges, would also be called for even
if there are differences in control costs. However, as attention focuses on
industrial and agricultural pollutants that are not to be eliminated completely, differences in control cost will prove to be more of a problem.
Particular pollutants are emitted from sources with diverse processes, sizes,
and ages; and large differences in the cost of control can be expected. For
example, sulphur oxides, which are one of the most damaging pollutants of
the air, are emitted by electric powerplants, steel mills, nonferrous metal
smelters, and home-heating systems. The differences in the size of these
sources and the diversity of their processes make it almost certain that a
given reduction of sulphur oxides cannot be accomplished at the same cost
at each source. It is already known that there are economies of scale in
sulphur oxide abatement, so that, for example, a given degree of control
could be attained less expensively at one large powerplant than in many
home-heating systems.
One way that differences in control costs could be taken into account would
be to set "prices" for the use of the air and water. If each potential polluter
were faced with a price for each unit of pollutant he discharged, he would
have to compare this with the costs of pollution control in his particular circumstance. If control costs were relatively low, he wrould engage in extensive
control to avoid paying the price being charged for polluting. If control
costs were high, less control would be undertaken. Since sources with low
control costs would carry out more than average control and those with high
control costs less than average, a given level of environmental quality could
be attained with expenditure of less productive resources than if all sources
had to meet a common standard. At the same time, discovery of new techniques to control pollution would be encouraged, because every reduction
in pollution would lower the payments for the right to emit pollutants. Of
course, a price system, like a system of standards must be employed in a way
that is consistent with environmental goals. The right to use air and water
must be priced high enough so that the abatement encouraged improves the
quality of the environment enough to justify the abatement expenses, while
further improvement would not be worth additional expenditures.
117
There are three methods by which prices may be established for use of
air and water: subsidies for control of pollution, charges for emissions of
pollution (also called effluent fees), and sales of transferable environmental
usage rights.
In the case of pollution abatement subsidies, the "price" paid by the
polluter is the subsidy he forgoes. The more he fouls the air and water,
the less he receives in subsidies. This approach can attain the efficiency
inherent in a price system, but it entails substantial administrative as well
as fiscal costs. In order to keep its subsidy payments down, the Government
agency will have to incur the expense of ascertaining the level of pollution
that would have occurred without any pollution control. As new products
and processes are developed, this administrative task would grow more
expensive, because in their case no record of past pollution would be
available.
Alternatively charges could be levied on pollution. A charge on emissions
of harmful substances would limit the amount of emissions indirectly. The
higher the charge, the more a polluter would be willing to spend to avoid
contaminating the environment (and thereby avoiding the charge). Another
alternative would be an environmental usage certificate system. It would
limit the amount of pollutants directly, but allow the price for pollution
to be set indirectly. Under this system, as under a system of pollution
standards, a Government agency would set a specific limit on the total
amount of pollutants that could be emitted. It would then issue certificates
which would each give the holder the right to emit some part of the total
amount. Such certificates could be sold by the Government agency at
auction and could be resold by owners. The Government auction and
private resale market would thus establish a price on use of the environment.
The more pollution a user engaged in, the more certificates he would have to
buy. Groups especially concerned about the environment, such as conservation groups, would have a direct method of affecting the environment. They
could themselves buy and hold some of the certificates, thus directly reducing the amount of emissions permitted and increasing the cost of
pollution.
In general, any choice between emission charges and usage certificates
should depend on which is easier to determine: the right price for pollution
or the right quantity. If the amount of damage done by a pollutant can be
measured easily and it appears that each unit of pollutant does roughly the
same damage, an emission charge would be called for. If the damage per
unit of pollutant may rise substantially with higher total emissions, a usage
certificate system would be in order. Both the charge and the certificate approach would, like a system of standards, reduce the total amount of air
and water pollution. However, by introducing a price mechanism, charges
or certificates would allow the limited amount of tolerable pollution to be
allocated efficiently when differences in the cost of control are present.
Such efficiency would reduce the resource cost of pollution control and would
118
therefore enable us to afford cleaner air and water than we could if common standards were imposed in the face of differences in control costs.
Pollution charges and certificates have not yet been widely used in this
country, though some municipalities have levied charges on industrial sewage
discharge. A system of water pollution charges has been used in the Ruhr
basin for some time, and new proposals for pollution charges have been advanced in this country. This Administration has already proposed a tax
on lead additives in gasoline which reduce the effectiveness of certain devices used to control auto exhaust emissions. This tax should encourage
drivers to switch to unleaded or low-lead gasoline, refiners to produce such
gasoline, and carmakers to equip their cars with the low-cost catalytic
filters which work only with unleaded gasoline.
There is currently under study a charge on atmospheric emissions of sulphur oxides from combustion of fossil fuels. This charge would be sufficiently high to encourage substantial control of sulphur oxide emissions,
and the consequent reduction of damage to health and property should
substantially exceed the control costs.
A charge on sulphur oxide emissions provides a good illustration of one
of the important benefits of a price system—namely, the information produced by prices about the most efficient way of handling pollution problems. Sulphur oxide emissions are now regulated by Government standards.
The State of Washington, for instance, has proposed a standard whereby
copper smelters there would be required to control 90 percent of the sulphur
content of copper ore entering smelters. This, according to a study done
for the State, could be accomplished at a cost equal to about 2 cents per
pound of copper (about 4 percent of the price). The copper smelters there,
however, claim that such a level of control is technologically impossible
to attain, and that imposition of the standard would force the smelters
to close. Such disputes over Government standards are not surprising where
there is uncertainty over control costs. Advocates of the standard will tend
to minimize its costs so that the chances of having the standard adopted
are increased, while those facing the burden of complying with the standard
have an incentive to overstate the costs so that chances are improved of
having the standard, and hence their costs, lowered. In the absence of
accurate independent information on the costs of control, such disputes are
difficult to resolve.
Much of the gap in information could be eliminated quickly if an emission charge were instituted. If, for example, a charge were applied to
smelters equivalent to 3 cents per pound of copper when emissions were
not controlled, then with 90-percent control the smelter would save
about 2.7 cents in charges per pound of copper produced. If this 90-percent
control could indeed be achieved at a cost of 2 cents per pound, the smelter
would not hesitate to incur such costs and thus avoid the larger charge.
If, on the other hand, 90-percent control were "technologically impossible"
or cost much more than 2.7 cents per pound, the smelter would engage in
less complete control. Perhaps 80-percent control could be achieved more
"9
cheaply than the 2.4 cents in payments which this control would save. However, the company would still have an incentive to find new control methods
that might be less costly than its remaining tax burden. Not only would
the factual dispute be settled by this charge but incentives would be created
for an efficient response to an environmental problem.
While transferable environmental usage certificates have the same kind
of efficiency advantages as emission charges, they have not yet been applied
to the solution of environmental problems. One area where their use may
merit attention is the control of offshore dumping of waste, which constitutes
a growing hazard to the environment. It is feared that damage, especially to
food sources, may escalate sharply unless steps are taken to limit the waste
dumped into the ocean. At the same time, the cost of alternative means of
waste disposal differs among the many current users of the ocean. Ocean
dumping could be limited and individual differences in the cost of control
of dumping taken into account under a certificate system. This would require that anyone who wished to dump wastes in the ocean have a Government license to do so. The license would specify the amount and type
of material that could be dumped at a particular ocean site, and the number
of such licenses would be limited to permit no more dumping activity
than is considered safe. These licenses could be auctioned off by the Government, and sold later by a purchaser who no longer required them.
The Administration has proposed legislation under which licenses will
be required for ocean dumping. A possibility worth considering is to make
such licenses transferable. If this were done, prospective ocean dumpers
would either have to pay the going price for licenses or find a cheaper way
of disposing of their waste products. Those who were able to find such
alternatives would not buy the licenses; those for whom alternatives were
very costly would purchase them. The Government's prime concern should,
of course, be limited to the total amount and kind of dumping, not who
is doing it.
As choices are made between applying Government standards and instituting prices, the grounds on which the choice is made must be kept clear.
Prices for pollution have, for example, been regarded by some as a form
of 'evasion of standards, as a "license to pollute." Actually every system of
rules for use of the environment, other than outright and total prohibition
of certain uses, involves granting someone the right or "license" for some
polluting. The amount of pollution that results does not depend on which
system of rules is adopted, but on how each is administered.
It is sometimes said that administration of emission charges is unduly
complicated, since they must be varied continually as pollution damages
change, and they require close measurement of the pollution against which
the charge is to be made. When damage estimates can change frequently,
administration of a system of charges can become costly, and a certificate
or standard system would save this cost. However, the cost of measuring
pollution is not unique to a charge or certificate system. It would be just as
120
great if standards are to be enforced. If measurement of pollution is too
expensive to permit an effective system of standards, charges, or licenses,
we face a choice between outright prohibition of the pollution, tolerating
the present level, or requiring adoption of some conventional control
procedure.
Problems in the Application of Rules
As rules for the use of common property are developed, whether these
are embodied in Government standards, emission charges, or usage certificates, several problems will have to be resolved. We shall, for example,
have to decide at what level of Government the rules will be made. Since
these rules require that the gains and losses entailed by different levels of
environmental quality be weighed, the Government agency making the
rules must be responsive to those who bear the gains and losses. This
is especially important because part of the damage from pollution cannot
be measured directly but depends on such things as the aesthetic preferences
of those affected. As a practical matter, much of the damage from pollution
will be "measured" by political pressures from those damaged. Many, though
not all, pollution problems are local in character, and therefore determination of the appropriate level of environmental quality in these cases is
likely to be more accurate if it is done locally rather than by the Federal
Government.
Where the environmental effects of a particular activity are in fact
nationwide, as is true when poisons enter the food chain in a river and
eventually damage fish caught in a distant waterway, the Federal Government must ensure that certain minimum standards are set. Some degree
of uniformity may also be desirable where the cost of altering a given
production process or product to meet differing local standards is great.
It is not clear, however, that the Federal role should extend beyond the
setting of such minimum standards where most benefits and costs of pollution are borne locally. In such cases, a pollution source generates income
as well as pollution damage in the community where it is located. The
seriousness of the damage will depend in part on such local factors as
topography, wind patterns, and population density; and the right amount
of control will depend on how much income would be lost to achieve abatement. It would not be sensible to impose the same abatement costs on a
factory or farm located in a lightly populated area or where the environment
has substantial assimilative capacity as on one in an area without these
favorable characteristics.
Where environmental damage crosses local political boundaries but is not
national in scope, the appropriate Federal role might be to foster the creation of interstate agencies, such as regional air quality boards and river
basin authorities, which would be responsible to residents of areas affected
by common environmental problems. The recent amendments to the Clean
Air Act of 1967 will permit interstate air quality agencies to set regional
121
air quality standards, which will have to meet minimum Federal standards.
It is important, however, that these minimum standards permit these agencies to adopt standards appropriate to local circumstances.
New rules for use of the environment are bound to affect competitive
relationships within and among industries, localities, and nations. As industries are forced to bear the costs of using the environment, those who have
high costs will lose part of their market to those with lower costs of using
the environment. Inevitably, there will be pressures for Government action
to prevent this reallocation of production. It should be realized, however, that
such reallocation is necessary if environmental resources are to be used efficiently. Government interference with this process should therefore be
limited to mitigating the transitional effects.
The same considerations apply internationally as well as domestically.
Our high level of material wealth has caused us to place a higher value
on clean air and water than they are assigned in countries which have lower
incomes or where clean air and water may still be abundant. As this value
becomes reflected in the costs imposed on our producers, those for whom
the costs of pollution control are high will find it harder to compete with
producers in countries where clean air and water are less valuable or
where pollution is lower. The resulting reallocation of production among
nations should benefit all nations. We will tend to concentrate on the production of goods which make small added demands on our valuable environmental resources, while other countries will produce goods which increase the
use of their relatively abundant environmental resources or whose lower incomes make growing industrialization more urgent than extensive control
of damage to their environment. International agreements to restrict this
reallocation would, however, be desirable when pollutants emitted in one
country damage residents of another.
TRANSPORTATION
Even as Government creates new rules and institutions to promote an
efficient use of resources, it must constantly examine the utility of its existing
institutions. The transportation industry is a case where special care must
be taken to assure that Government policies do not promote inefficiency
by permitting private costs to diverge unnecessarily from social costs.
The transportation industry is important both to the Nation's rate of
overall growth and to the way that this economic activity is distributed
geographically. Much of this industry is subject to Federal and State regulation instituted under conditions that no longer exist. Such regulation
today may be one factor that interferes with an efficient use of resources
in transportation, and it appears that regulatory patterns may have to be
reexamined if the industry is to contribute its full potential to the Nation's
welfare. While the focus here will be on regulation, this is not the only
Government policy that creates a divergence between private and social
costs. Inland waterways, for example, are developed and maintained out
122
of general tax funds. There is no direct charge levied on the barge operators
who use them. Many barge rates consequently fall short of the social cost of
such traffic and lead to uneconomic diversion of traffic to barges. In addition some States have laws that inhibit the efficient utilization of labor on
railroads.
SURFACE FREIGHT TRANSPORTATION
When the Interstate Commerce Commission (ICC) was established in
1887, the railroads had a near monopoly of freight transportation. Public
demand for control of this monopoly was one of the factors leading to the
creation of the Commission. Another source of pressure for railroad regulation, however, may also have played a role in the development of ICC regulation. While railroads as a group had a near monopoly of freight traffic, there
were often several railroads along the same traffic routes. The absence of
antitrust laws made it attractive for rival railroads to collude among themselves in setting rates. As is frequently the case, such private cartels tended to
break down when some members secretly reduced rates to lure business away
from others. The railroads themselves supported the establishment of a Government agency that would end the instability of these private rate cartels.
The powers given to the ICC in 1887 and subsequently may therefore not
have been designed primarily to promote competition among railroads.
The ICC now regulates all rail traffic, 39 percent of truck traffic, and
10 percent of inland water traffic. The regulation is comprehensive, covering
rates, types of service offered, and the ability of firms to enter and leave
the industry or particular markets. While groups outside the transportation
industry do influence the exercise of the Commission's powers, the main
thrust of regulation has been to ameliorate the effects of competition among
the carriers and to mediate competitive disputes among them.
Early attempts by railroads to eliminate rate competition under regulation were not completely successful. Early in the 20th century, therefore,
and with the support of the railroads, the ICC was given power to approve
minimum rates—rates below which a particular railroad could not go. The
railroads used this power to institutionalize the value-of-service rate structure whereby goods of higher value were charged the highest freight rates
even if it cost no more to carry them. Private costs to shippers were thus
allowed to diverge from the social costs of transportation. This rate structure was most profitable to the railroads at the time, but its institutionalization under minimum rate regulation eventually became a source of their
present problems.
The value-of-service rate structure helped expose the rails to competition
from trucks. Because rates did not correspond to costs there were substantial
differences in the profitability of carrying different goods. New trucking
companies saw the prospect of capturing some of the profitable high-rate
traffic from the railroads. With the spread of the highway network, the then
123
unregulated truckers undercut rates on the high-rate traffic and diverted
some of it from the rails.
This reduced the profitability of the railroads and they argued for suppression of the truck competition. In 1935, ICC regulation was extended to
cover much of intercity trucking (and barge traffic in 1940). In order to
resolve the competitive dispute between rails and trucks, the existing rate
competition was suppressed. The value-of-service rate structure was carried
over from rails to trucks. At the same time, minimum rate regulation was
applied to all common carrier motor carriers, so that existing rate competition between trucking firms was reduced. All carriers were left to compete
on nonprice grounds, such as speed and the quality and frequency of service.
As the highway network grew, however, trucks continued to attract highvalued freight from the rails. Much of this was manufactured goods, where
superior service offered by trucks frequently gave them an advantage. Thus
the railroads' share of the freight market continued to fall. From 1939 to
1969, their share of intercity freight traffic fell from 62 to 41 percent, while
the truckers' share rose from 10 to 21 percent. At the same time, the railroads
became more heavily dependent on low-valued, low-rate traffic.
Inefficiencies Due to Regulation
This shift of traffic from railroads to trucks did not always come about
because trucking costs were below those of the rails. Part of it occurred because the value-of-service rate structure was unrelated to the costs of transportation. Even on long-haul traffic, where rail costs are much below truck
costs, a shipper would frequently choose to ship by truck if trucks offered
better service. By preventing carriers from fully reflecting cost advantages
in their rates, regulation maintained high-cost transportation. In some rate
cases where a low-cost carrier sought to exercise its advantage by offering
a lower rate, the ICC prevented this so that the high-cost carrier would
not be damaged financially, even though the public interest would have
been better served by lower rates. More recently there has been some increase in competition between modes of transportation, but the ability of
carriers to set minimum rates in concert continues to suppress competition
among railroads and among motor carriers.
The application of the value-of-service rate structure to all modes also
contributed to the problems of rural depopulation and metropolitan congestion which were mentioned earlier. Under the value-of-service rate structure,
rates on finished goods tend to be higher than those on raw materials. These
higher rates on finished goods give manufacturers an incentive to locate
close to or in the metropolitan areas where their major consumer markets
are found, rather than in the areas where raw materials are produced.
The preservation of value-of-service rates also induces excessive reliance on
unregulated private or contract carriage. Wherever regulated rates are held
above costs, some shippers have an incentive to buy or rent their own vehicles, usually trucks. This may save money for the shipper even if the cost
124
of operating these vehicles is above the cost to the regulated carriers, as it
might be because under present regulations these trucks must often return
empty to the shipper's location. These added costs represent wasted economic resources.
Transport regulation extends beyond rates. Under existing legislation, a
firm that seeks to enter the industry or a particular market must first obtain
a certificate from the ICC. This has protected existing carriers from competition because new carriers have not been permitted to enter freely even if
they could meet safety and reliability standards. This restriction of entry has
inhibited the formation of new trucking firms, though trucking is the most
rapidly growing form of regulated surface freight transportation. Further, a
certificate to enter a market often contains numerous service restrictions designed to protect established carriers. There are, for example, restrictions on
the commodities which may be carried and the number of towns between
two points which may be served. In the absence of these restrictions, the same
service could be performed equally well by fewer trucks.
This restriction of competition has had in the long run an increasingly
adverse effect on many of the intended beneficiaries, especially the railroads. With rate competition among carriers minimized, carriers sometimes
strive to gain customers by having the most equipment available and offering the most frequent service. This is one reason why the transportation
industry as a whole has had more capacity than the total traffic requires;
another reason is to be found in the obstacles to abandonment of unprofitable
service. The costs of carrying this excess capacity have in turn tended to
dissipate some of the financial gains to carriers that resulted from suppression of rate competition.
An Alternative to Regulation
The development of the transportation industry under regulation suggests that the public as well as large sections of the industry would be well
served by relying more on the forces of competition. The rationale for
regulation found in the railroads' monopoly position in the 19th century
has become increasingly obsolete. Transportation could be a viably competitive industry today since most shippers already have a choice among
modes, and with fewer entry restrictions they would have more choice
among carriers. By frustrating this potential for competition, regulation
appears to have promoted high freight rates and numerous inefficiencies,
and in the long run to have weakened firms financially. This raises the question of whether the introduction of competition in transportation may require
fundamental institutional reform. Legislative attempts to promote competition under the present regulatory system have had only limited success. This
is illustrated by experience with the Transportation Act of 1958, which
sought to increase competition among trucks, rails, and barges within the
present regulatory framework. While such intermodal competition has inJ
411-364 0—71
9
25
creased somewhat, it has often not been permitted when the financial viability of some carrier was threatened.
If it appears that the full benefits of competition can not be attained within
the framework of the existing regulatory process, substantial deregulation
of surface freight transportation may have to be considered. This approach
would involve the removal of regulatory obstacles to competition so that
free market forces would ultimately be allowed to establish prices and allocate resources in the same way that they do in other industries. In view of
the magnitude of the changes that would be brought about by such deregulation, it would probably be advisable to introduce competition gradually.
Carriers, for example, might initially be given freedom to set rates within
a narrow band above and below the present regulated levels, and this band
could widen over time. Freedom to enter markets could be initiated by removal of the service restrictions on existing ICC truck certificates and of the
restrictions on intermodal ownership by existing carriers. At some future
point, restrictions on entry by new firms could be lifted. Restrictions against
carriers' leaving unprofitable markets could also be lessened gradually by,
for example, permitting them to abandon without ICC approval a fixed
percentage of service each year for several years. As regulatory restraints on
competition in transportation are removed, it would appear appropriate that
transportation firms become subject to the antitrust laws, from which they are
now substantially exempt. In particular, it would be necessary to guard
against predatory pricing, intended to establish a monopoly, and against
monopolistic pricing, of which there are instances even under present
arrangements.
Deregulation would, of course, produce profound changes extending
beyond the transportation industry itself. With restrictions on competition
removed, transport rates would be likely to fall; and since high-cost carriers
would no longer be protected from competition the rate structure woujd
change. Rates based on the costs of efficient carriers would tend to replace the
current value-of-service rate structure. Under a cost-based rate structure,
commodity distinctions would tend to disappear, and rates would be based
primarily on such factors as the size and weight of shipment.
Deregulation and a shift to cost-based rates would also lead to a better
use of transport resources. For many long-haul shipments, rail costs are
below truck costs, while the reverse is true for short-haul shipments. Once
carriers are permitted to compete and take advantage of these cost differences, some long-haul shipments would shift from trucks to the rails and
some short-haul shipments would shift the other way. More generally, since
traffic would flow to carriers with the lowest costs, the total resource cost
of transportation would be reduced.
Many shipments that now move by rail over branch lines to main lines
would instead originate by truck, transferring to the rails at the main line.
To reduce the costs of such transfer, many of these multimodal freight
shipments would be sealed in containers which could be interchanged among
126
modes. In this way, both those shippers located close to the main line and
those farther away could take advantage of the flexibility and short-haul
cost advantage of trucks as well as the long-haul cost advantage of rails.
At the same time, much of the cost to the rails of maintaining excess track
and underutilized equipment on these lines would be removed.
Many shippers in small towns oppose railroad abandonments of branch
lines today, because they fear that under present regulation lower-cost truck
service would not be substituted. However, if carriers were free to compete
on rates as well as to enter and leave markets as they saw fit, the abandonment
of high-cost rail branch lines would create a new market for trucks. Competition among trucks would frequently result in lower freight rates for
branch-line shippers than they now face. Such shippers would also greatly
benefit by the savings from the multimodal long-haul shipments that increased competition in transportation would stimulate. Regulation is sometimes justified as protecting shippers in nonmetropolitan areas from loss of
service. It is argued that without the service requirements imposed by regulation not only railroads but trucks as well would abandon nonmetropolitan
areas for the more populous markets. It appears, on the contrary, that
regulation prevents many nonmetropolitan shippers from realizing the benefits of competition.
Evidence that nonmetropolitan shippers can and do benefit from a competitively organized transportation industry is provided by experience in
agriculture. In response to farm pressures, truckers of agricultural products
were exempted from the 1935 extension of ICC regulation to trucking.
In the 1950's fresh-dressed and frozen poultry and frozen fruits and
vegetables were added to the list of exempt agricultural commodities. The
Department of Agriculture found that this resulted in rate decreases averaging about 30 percent for poultry and 20 percent for frozen fruits and
vegetables. At the same time shippers reported that the quality of service
offered by the nonregulated truckers was generally superior to that previously offered by the regulated truckers. This experience indicates that residents in nonmetropolitan areas may receive substantial benefits from a
fully competitive transportation industry. In addition, with cost-based competitive rates, some of the manufacturing activity now carried on in the
large population centers, because of the high finished-goods rates in the
current value-of-service rate structure, would then shift to smaller towns
and generate increased incomes there.
In evaluating the distribution of the gains from competition in transportation the broad national gains should not be overlooked. Residents
of all areas are affected by transport rates both as producers and consumers, so that the lower transportation rates brought about by increased competition would benefit residents in all parts of the Nation. This, in the final
analysis, is why a deregulated transportation industry would better serve
the public interest.
Indeed, recent developments in the railroad industry suggest that deregulation of transportation may have to be considered as a matter of urgent
127
national priority. Several railroads, including the Nation's largest, are in
reorganization; and the Congress has approved Federal Government guarantees for $125 million in loans to these railroads. These significant developments, however, are only symptoms of more far-reaching problems that appear to be incapable of permanent solution without regulatory reform. The
over-investment and misallocation of capital in railroad facilities, and the
regulatory restriction on the ability of railroads to set rates that would capture
profitable long-haul traffic where they are most efficient, have led to a steady
decline in the railroads' own rate of return on investment from an average
of 3.7 percent in 1950-59 to 2.8 percent in 1960-69. As the financial condition of the railroads has deteriorated, investment of funds in the railroad
business has also become more risky. Today the average rate of return on the
railroads' investment, with its increased risk, is less than half that on riskfree Government bonds.
In the absence of regulatory reform it may not be possible for the railroad
industry to attract sufficient private capital to prevent further deterioration
of service in the years ahead. The Federal Government would then become
increasingly involved in the preservation of freight service, as has already
happened in passenger service.
RAIL PASSENGER SERVICE
Rail passenger traffic has declined steadily in recent years, and now accounts for only 8 percent of intercity passenger movements by public carriers. Railroads have long been seeking to abandon unprofitable trains,
but this was difficult under existing rules. The Railroad Passenger Act of
1970 permits a railroad to discontinue all its intercity passenger service
on May 1, 1971, provided that it invests in the newly-created National Rail
Passenger Corporation. Most of the capital for the Corporation will come
initially from a Federal Government subsidy and guaranteed loans, and a
majority of its Board of Directors is to be appointed by the President. The
Corporation must raise any additional capital without Federal assistance.
It will at the outset eliminate many of the passenger trains which are now
unprofitable, and operate an integrated system of passenger trains serving
all regions of the country that, it is hoped, will ultimately be profitable.
AIR TRANSPORTATION
Like surface transportation, the air transportation industry is subject to
Government regulation which has restricted price competition and appears
to have created some inefficiency. This regulation was instituted at the
request of the carriers in 1938. Entry into the industry or into a particular
market almost always requires a certificate from the Civil Aeronautics
Board (CAB), and carriers may not charge rates below those approved by
that agency.
This regulation has probably resulted in rates that in many cases are
higher than they would otherwise be. In the segments of the industry where
128
entry has sometimes been permitted—namely, nonscheduled, commuter, and
air taxi service—new firms have entered quickly. Some indication of the
degree to which regulation has raised rates is provided by the air transportation experience in California. Airlines operating wholly within a State are
exempt from CAB regulation. Until recently, California permitted free
entry into intrastate markets and did not regulate rates. Competition from
intrastate airlines has resulted in fare levels per-mile within California that
are approximately 40 percent below those for comparable services in the
rest of the Nation. As a result, air traffic between Los Angeles and San
Francisco far exceeds that between any other two cities in the world.
Nonscheduled carriers provide further evidence of the benefits of competition. In the late 1940's, a few carriers were permitted to enter the market
in order to provide unscheduled service as a supplement to scheduled service.
The nonscheduled entrants took an increasing share of the market by
undercutting the rates of established carriers in longer-distance markets
where rates most exceeded costs. The scheduled carriers responded by promoting low-cost coach service. The regulatory authorities also took action
to curb nonscheduled lines. While the public is thus denied the benefits of
extensive domestic nonscheduled competition today, the rapid growth of
coach service is, in part, an important legacy of the earlier competition.
In 1970, many airlines experienced excess capacity and low profits. This
partly reflected the absence of normal traffic growth. From 1960 to 1969,
domestic air passenger miles increased at the rate of 12 percent per year. In
1970 there was virtually no growth, while many airlines were taking on another generation of aircraft. In that sense the problems of the airlines are
similar to those a decade earlier when they were shifting to jets, while traffic
growth decreased and for a time reported earnings were also down sharply.
There is also, however, a more fundamental problem. As is true in surface
transportation, the substitution of service competition for rate competition
tends tQ-result in excess capacity. Fares higher than a more openly competitive market would establish have not, therefore, led to correspondingly
high rates of return. Through the inducement to excess capacity, overinvestment in facilities and planes occurred. Costs were thereby increased,
and the financial performance of the companies, even with sheltered fares,
has recently been unsatisfactory. Faced with some excess capacity, airlines
have asked the CAB to approve intercarrier agreements to reduce flight
frequencies in selected markets. Such a remedy tends to treat the symptoms
of the problem without removing the cause. The original cause of the excess
capacity was regulatory restriction of price competition. If price competition
had not been inhibited, the incentive for airlines to provide excess capacity
would have been reduced.
The resumption of a more vigorously expanding economy will ameliorate
part of this problem by increasing air traffic. It must be remembered, however, that these problems will be recurrent if prices are held substantially
above what they would be in a more openly competitive market. Para-
129
doxically, the earnings performance of the airlines themselves is apt to be
adversely affected if this basic principle is persistently ignored.
NATURAL RESOURCES
The utilization of natural resources normally proceeds from lower-cost
to higher-cost sources. As the best sources are depleted, new supplies can be
obtained only by exploiting those that involve lower grades and higher costs.
Copper is an example. The average ton of copper ore mined in the United
States in 1911 contained 1.82 percent copper. By the late 1960's the copper
content of ore had dropped to six-tenths of 1 percent, and some new mines
now produce ore with less than five-tenths of 1 percent of copper. Technological improvements have counteracted this tendency toward higher costs
of production. The number of man-hours of direct labor required to produce
a ton of copper ore has declined from 4 hours in the 192(Ts to one-quarter
of an hour in the 1960's. The net effect of these tendencies is that the price
of copper in peacetime has moved from a range of 10 to 20 cents in the
earlier part of this century to between 30 and 60 cents per pound in recent
years, or roughly in line with the general price level.
Not all natural resources have increased in price over the years. Aluminum prices, after bottoming out in the 1940's, are now at about the
same level as in the 1920's. As a result of these relative price changes aluminum has replaced copper in many applications. In spite of technological
advance and substitution there nevertheless remains a concern about the
ability of this Nation to continue producing a high proportion of the industrial raw materials it consumes. Accordingly, Congress has established a
National Commission on Materials Policy to estimate the supply-demand
situation that will be confronting us toward the end of this century and to
recommend appropriate policies.
ENERGY
Sharp price increases in two major energy products, combined with concern about the extent of their supply, have focused particular attention on
the Nation's energy resources. In late 1970 the price of heavy fuel oil,
which is used by electric utilities, industrial plants, and other large institutions, was almost twice as high as a year before in some markets. Bituminous coal, used primarily by electric utilities, was also priced substantially
higher in the spot market than a year before. Natural gas supplies were
not available to meet desired consumption at prevailing prices, and
therefore the demand for substitute fuels increased. Nevertheless these
recent price increases and shortages are not symptoms of a growing scarcity
of energy resources. They are the result of unanticipated developments that
the energy industry has been unable to offset completely in a short timespan, in particular a stronger demand for energy than was expected from
past experience. Programs to reduce air pollution by prohibiting highsulphur fuels contributed to the problem.
130
Coinciding with the acceleration of demand, there have been several
disappointments on the supply side. The generation of electric power, particularly in atomic plants, has not met the expectations of electric utilities
because of construction delays, licensing problems, and environmental concerns. In part, these difficulties reflect the assumption a few years ago that
atomic power would become profitable, an assumption that slowed coal
mine development. Heavy fuel oil supplies have been limited by a world
tanker capacity that has not yet adjusted to the longer delivery runs required from the Mideast after the Trans-Arabia Pipeline was severed. This
limitation on supply has resulted in higher prices for heavy fuel oil. Since
heavy fuel oil can be imported to the east coast without quotas, that area has
come to rely on these normally lower-priced foreign sources for a large share
of its supply, and domestic refiners have had no incentive to construct refineries with much capacity for these heavy products.
These short-run problems are being resolved by Federal action and by
adjustments in the market. Higher domestic prices of heavy fuel oil have
attracted more supplies from abroad; these higher prices have also induced domestic refiners to increase their yields of heavy fuel oil. Actions
by the Interstate Commerce Commission to increase the efficiency of utilization of hopper cars, including a doubling of the demurrage charge, have
helped to correct another bottleneck by adding about 3 percent to the
hopper car fleet's delivery capability. As a result, the previously low level of
coal stocks at electric utilities has been raised to the normal range, and
spot coal prices have turned downward.
In anticipation of local supply problems in the winter of 1971 a Joint
Board on Fuel Supply and Fuel Transport, chaired by the Director of the
Office of Emergency Preparedness, was created last September. Actions by
this Board and its New England field board have resulted in increased supplies in that area. The field board, in cooperation with local and State
authorities and industry, has resolved more than 50 complaints in the area.
Barring extraordinary events—such as a rail strike, or extremely severe
weather in the remaining winter months, or disturbances of international
oil supplies—fuel consumption in the United States should not be significantly curtailed in the winter of 1971.
With tankers being built as rapidly as world shipyard capacity permits
and with improvement in the efficiency of our rail system, the transportation problem should begin to abate. Although transportation bottlenecks
can arise from time to time, the principal long-run energy problem in the
future is to increase the amount of energy produced while avoiding a substantial increase in its price.
Domestic energy consumption between now and the year 2000 is likely to
exceed all of the energy consumed by this Nation in its history. This enormous
future demand raises questions about the supply of energy fuels, their price,
and the role that different sources of energy will play.
Once current technical and environmental problems are resolved, nuclear
energy promises to contribute significantly to the electric power supply.
While oil and natural gas supplies from conventional sources in the United
States appear to be small relative to current consumption, this is not true
of coal. However, technology that will inexpensively reduce the air pollution now produced by coal burning may have to be developed if the cost
of using coal is not to increase. Coal can also be liquefied and refined to
substitute directly for gasoline or fuel oil. It can also be gasified to substitute
for natural gas. Liquefaction and gasification of coal are both approaching
the margin of economic feasibility. The production of oil from oil shale
is another marginal economic proposition, and it is expected that with
production experience costs will be reduced further. In the States of Colorado, Utah, and Wyoming there are enormous reserves of oil shale. These
sources of energy are not now being exploited because there are less costly
ways to supply energy, another illustration of the principle that least-cost
resources will be used before those that are more costly.
Even the potential supply of some traditional sources of energy has increased since World War II. An enormous production potential in the
Middle East has been hanging over the world petroleum market, production
costs there being less than one-tenth the selling price for typical Middle
Eastern crudes. Close cooperation among foreign producing countries has
thus far enabled them to prevent world prices from falling sharply. Attempts
at price increases will, of course, be made, but discoveries of new sources
throughout the world will tend to exert countervailing pressure. The increasing number of supertankers should reduce transportation costs, and
thereby help to keep delivered prices down.
Within the United States there has been persistent overcapacity in crude
oil production. Excess capacity in Texas and Louisiana has typically been
over 30 percent in the last decade and has at times exceeded 40 percent of
total production capacity. The State prorationing agencies have held back
domestic production, and this, together with strict national security limitations on imports, has maintained relatively high U.S. oil prices.
It is important to distinguish between two main functions of State
agencies that regulate crude oil production. The first function arises because crude oil is mobile underground and will flow to where it is being
drained. If a pool of oil is not produced as one unit, owners of individual
portions of the pool have an incentive to lift oil to the surface in their segment rapidly; whatever oil they do not remove themselves will be left for
others or may become irrecoverable. Since excessively high rates of production tend to result in lower ultimate recovery, competitive production from a single pool will often be wasteful. By prorating production
to individual producers in a pool, State prorationing agencies can enforce
the same rate of production that would occur if the pool were being operated
economically by a single operator. This is the conservation function of State
prorationing agencies.
132
In some cases, however, these efforts go beyond conservation and limit
total production to the market demand for crude oil in the State at prevailing prices. Since the quantity of oil demanded is related to its price, limiting
production to the quantity demanded at a particular price tends to support
that price. This market demand prorationing, as opposed to conservation
prorationing, has often kept production in the United States below efficient
capacity. On the other hand, the idle capacity has given us a standby supply
of oil that has sometimes been useful in times of international stress.
In the second half of 1970 domestic production was close to capacity. One
reason is that imports changed little, and another is that production capacity itself has not grown as rapidly as domestic demand. In part, capacity
may have shown little growth because of the negative incentive effects of
market demand prorationing. The value of an oil discovery depends not
only on the price of oil but also on the rate at which production is permitted.
If production is restricted to low levels, the potential value of a new oilfield
is reduced. The effect of market demand prorationing on the development
of new capacity is therefore similar to that of a lower price.
The action announced by the President in December 1970 to remove
market demand restrictions on Federal offshore leases not only promises
increased production from existing offshore wells but will also encourage
exploration for and development of new productive capacity on Federal
offshore land. Supporting this view is the fact that bonus bids received by
the Federal Government on the December 15, 1970, Gulf of Mexico sale
of leases exceeded earlier expectations and resulted in more revenue than
any previous Federal sale.
There appears to be a shortage of one major energy fuel, natural gas;
that is, its production is clearly falling short of desired consumption at current prices. Current prices for interstate sales have been kept low7 by the
Federal Power Commission, which sets these prices under law. Not only have
prices been too low for desired consumption to be met, but they appear also
to have retarded development of new gas supplies. The only satisfactory
solution of this problem is to allow the price, at least of new gas not previously committed, to approach the market-clearing level.
It is important to recognize that increased gas supplies, even at higher
prices, would offer direct benefits to the consumer. Some users would
switch to natural gas if it were available because the price of gas in terms
of heating value, though higher than before, would still be lower than the
price of the fuel they had been using. Industrial users would switch because
gas contains little sulphur and would be the cheapest way for them to meet
air quality standards. The added competition of these new supplies would
also tend to reduce prices for consumers of other fuels. If the price of natural
gas on old commitments remained under control, consumers would be protected from unnecessary price increases on current supplies.
133
TIMBER RESOURCES
Timber is another natural resource whose supply is affected by Government policies. In fact, there are few areas where Government has as much
direct control over the supply of natural resources as it has in timber. About
65 percent of the more than 2 trillion board feet of our Nation's inventory
of softwood sawtimber is on public lands. More than half of the total is on
land owned by the Federal Government. These softwoods, principally evergreens, provide the major wood materials used by the building industry, and
as the economy has grown so also has the demand for softwood.
With only 16 percent of the inventory, the private forest industry has
accounted for almost a third of the softwood sawtimber harvests. Public
lands have provided some 40 percent, the remainder coming from the private holdings of farmers and other small private landowners. In times of
increased demand it is to these private holdings that the forest industry has
commonly turned to augment supply. As a result of past cuttings, however,
this source of supply has been reduced, and time will be required to regrow
much of the timber on private lands.
This decline in supply occurs at the same time that the Nation's demand
for softwood lumber products is expected to grow substantially. If the
Nation's housing demand for this decade is to be met, the annual consumption of softwood lumber and plywood by the housing industry may have
to increase by as much as 75 percent over current levels. And as the economy
resumes a course of vigorous expansion, nonhousing demand for softwood
will increase as well. It has been estimated that for the economy as a whole
the annual demand for softwood sawtimber, assuming that prices remain at
their 1962-67 levels, could reach 70 billion board feet by 1978, some 40
percent above the level of consumption in 1969. Accordingly, the President
has directed the Secretary of Agriculture to formulate plans for increasing
timber yields on Federal lands.
An increase in the timber harvest through intensified management promises broad public benefits. Not only will consumers of wood products, particularly purchasers of housing, benefit through lower prices, but this can
be achieved while keeping our timber resources intact. Unlike other natural
resources, forests are renewable, so increased cuttings need not imply a permanent reduction in the annual lumber supply. Indeed, it appears that, with
proper planning and management, the permanent yield of forest lands can
be increased.
Growing concern for our environment necessitates that increases in timber
supply be achieved in a manner which is consistent with the preservation
of natural surroundings. In the past, cutting has frequently been synonymous
with denuding the land, but this is by no means inevitable. By partial cutting
and careful selection the negative aesthetic and environmental impact of
harvesting can often be kept to a minimum. Indeed, increased harvests can
offer benefits beyond the increased supply of timber, for intensified forest
management can also result in a natural increase in wildlife and improved
opportunities for recreation.
134
HEALTH CARE
Expenditures for health care have grown rapidly as families' incomes have
increased and as Government has assumed greater responsibility for the
medical bills of the aged and many of the poor. Total private and public
health expenditures grew from $42.3 billion in fiscal year 1966, the year
before the introduction of Medicare and Medicaid, to $67.2 billion in 1970,
or at a rate of 12 percent per year. (Health expenditures are defined more
broadly here than in Chapter 3.) Hospital and nursing home expenditures
have grown most rapidly, with expenditures for physicians' services and other
types of expenditures rising somewhat more slowly.
Price increases account for a considerable portion of the change in expenditures. The medical care component of the consumer price index increased
at an annual rate of 6.4 percent between fiscal years 1966 and 1970. The
price of daily service charges in hospitals rose at the rate of 14.4 percent per
year, while physicians' fees rose at a 6.7-percent rate. Yet in 1966 prices, expenditures for health still grew by 24 percent during these years, rising to
6.4 percent of real GNP in 1970 from 5.9 percent in 1966.
THE SUPPLY OF MEDICAL SERVICES
Between 1966 and 1970 the number of active physicians grew at more
than twice the rate of the total population; from 151 active physicians per
100,000 people the figure rose to 159. This growth has been accompanied by
a decline in the proportion of physicians who provide primary patient care
(general practitioners, pediatricians, and internists) and an increase in the
proportion who enter the other specialties. Despite some debate over whether
the total increase in services has been sufficient to meet the recent increase
in demand, there is agreement that the uneven geographic distribution of
physicians presents problems for sparsely populated and inner city areas.
There is also growing interest in the possibility of improving the organization
and delivery of health services to provide more services for people throughout the country. If more doctors were to practice in groups, where they could
take advantages of timesaving equipment and allied health personnel, their
productivity could be increased. Group practice might be more suitable
than solo practice in some of those areas where health services are difficult
to obtain.
Between 1966 and 1969, beds in short-term non-Federal hospitals, where
most of the acute hospital care is provided, increased by 7.6 percent. Patients'
days in the hospital rose somewhat more, by 10.7 percent between 1966 and
1969, and annual patient-days per person in the country rose from 1.095 to
1.178. This rise in patient-days was due primarily to the increased rate of
hospital admission of the aged following Medicare and to their longer average stay after entering a hospital. Hospital use among people under age 65
increased only slightly.
135
INCREASES OF MEDICAL CARE PRICES
The rapid increase in medical care prices cannot be completely explained
by the lack of rapid growth in the supply of the services of physicians and
hospitals. The recent increase in fees may be partly a result of the fact that
many patients no longer have to pay their own medical bills. The itemized
billing required by public and private insurance has also encouraged charging for services which were previously including in a package.
The increased price of hospitalization reflects an increase in the cost of
their operation more than a shortage of hospitals. As the financial position of
the hospitals has improved following Medicare, they have been more willing
to consent to doctors' requests for better equipment and expanded facilities
and to pay their employees higher wages. Because Government and most private insurers pay the hospitals according to their costs, these increases are
rapidly passed on to the consumer directly or through Government.
WHO PAYS THE BILLS
While the organization and delivery of health care services has been changing relatively slowly, the method of paying for personal health care has
altered dramatically. Private health insurance has grown rapidly in the past
two decades and now pays 24 percent of all medical bills as compared to 8
percent in fiscal 1950. Government has expanded its financing of medical
care from a responsibility for the Armed Forces, veterans, municipal hospitals, and various public health services to the assumption of a large share of
medical bills of the aged and poor. The fraction of medical care expenditures
paid by Government has increased from 20 percent in 1950 to 35 percent in
fiscal 1970. The consumers of medical services are as a consequence directly
paying a decreasing portion of medical care costs. Of the $280 of personal
health care services provided per person in fiscal year 1970, individuals paid
out of pocket an average of $110, or less than 40 percent.
The out-of-pocket share of medical expenses which a family must pay
depends greatly on the age of the family members. In fiscal year 1969, Medicare, Medicaid, and other Government programs paid about 72 percent of
the medical care expenditures of the aged and, after some smaller contributions from private sources, left them with out-of-pocket expenses averaging
$163 per person. In contrast, the Government paid only about 23 percent
of the expenses of persons under age 65. Private insurance paid about 29
percent, and the individual paid 46 percent of the total or an average of $98.
These out-of-pocket expenses are less than those made by the aged, even
though the aged pay a lower fraction of their medical bills.
Among persons under age 65, out-of-pocket expenses vary considerably
depending upon the type and level of expenditures and upon the income of
the family. In 1969 about 81 percent of individuals under age 65 had some
form of hospitalization insurance and 79 percent had surgical insurance.
Physicians' office visits and many services which prevent serious illness were
much less likely to be covered, thereby encouraging resort to hospitalization
136
even though it tends to involve higher costs. Insurance paid about 70 percent
of consumer expenditures for hospital care, about 45 percent of consumer
expenditures for physicians' fees, and considerably less of other types of services. Private insurance covers an increasing fraction of a person's expenses
as these rise up to some level, but a declining fraction as expenses become
very large.
Middle and upper income families are much more likely to be covered by
private insurance than are low income families. In 1968, for example, over
90 percent of the persons under age 65 in families with incomes of $7,000 or
more had some type of hospital insurance, while only 36 percent of people
in families with incomes below $3,000 had coverage. Of these low income
people, those aged 56-64 were twice as likely to be covered as were children under age 17. The Medicaid program, which pays the medical bills of
welfare recipients and certain low7 income people with high medical expenses, is putting an increasing burden on many States but is often inadequate to meet the needs of the people it is designed to serve. The program
also reduces the incentive of poor persons to earn more income by making
them ineligible for benefits if their income rises above a certain level.
There have been three broad problems in the Nation's health programs.
The distribution of health services is uneven by income groups and geographic areas. There has been an imbalance between programs which increase the demand for these services and programs which augment the supply of trained personnel and improve the organization and delivery of health
care services. Finally, there has been the problem of assuring an efficient
utilization of the resources devoted to health care. While the increase in
real expenditures on health has benefited large groups of the population,
further efforts are needed to resolve these remaining problems.
137
CHAPTER 5
The United States in the International Economy
HHHE VAST EXPANSION OF INTERNATIONAL TRADE AND
-*- CAPITAL MOVEMENTS has produced an increasingly complex network of relationships linking domestic economic conditions and domestic
economic policies across national boundaries. New and urgent questions
have therefore emerged concerning the management of domestic economic
policies and the international machinery developed to make it easier for
national economies, with their differing policies and objectives, to adjust,
to each other. The first part of this chapter is devoted to examining the
ways in which the various subdivisions of our balance of payments have
been affected by changes in economic policies and conditions during 1970.
The relative calm imparted to the international monetary system by the
recent correction of persistent disequilibria in several major currencies provides an opportunity to evaluate the system without the pressure of emergency conditions. Such an analysis, placing special emphasis on the unique
role of the U.S. dollar in the international monetary system, comprises the
second part of this chapter.
A third section reviews international trade policy, which became an
urgent issue again in 1970 because protectionist pressures were building
up in a number of industrialized countries and threatened to reverse the
broad trade-liberalization movement of the postwar years. Two policy
problems were particularly important. One was the future of U.S. trade
policy, and the other stemmed from the proposed enlargement of the
European Economic Community and its implications for the future of an
open world trading system.
The final section of this chapter focuses on the continuing search for
more effective ways to aid the economic development of the lower income
countries and the role played by transfers of both official and private capital in this process. The President's Foreign Aid Message of September
1970 suggested a number of wide-ranging measures to increase the effectiveness of the total U.S. aid effort.
138
DOMESTIC ECONOMIC CONDITIONS AND THE
BALANCE OF PAYMENTS
CURRENT ACCOUNT
There is an important relationship between the domestic economy and
the balance of trade. Policies that stimulate the domestic economy tend to
raise imports and restrain exports. With domestic economic expansion, increases in personal incomes and prices as well as greater pressures on productive capacity at home cause a growing proportion of rising domestic demand
to be taken care of through purchases from abroad. And such factors as
higher domestic prices, buoyant demand in the convenient and more familiar
domestic market, and lengthening delivery schedules limit the rise in exports.
Economic policies in other countries also have an important impact on the
U.S. balance of trade. For example, the deterioration in the trade balance
resulting from a rapid domestic expansion is greater when other countries
are not using their own productive resources fully or expanding as rapidly.
Moreover, such developments as the long-term decline in the relative importance of transportation costs, the reduction of barriers to international
trade, and the increasing similarity of cost structures among industrial nations have tended to increase the responsiveness of trade flows to price
and income fluctuations. The composition of U.S. exports and imports has
shifted toward finished manufactured goods, the demand for which is more
responsive to movements in incomes and relative prices prevailing among the
different economies. Finished manufactured goods accounted for only 41
percent of U.S. imports in 1965, a figure which rose to 56 percent in the
first 11 months of 1970 (Table 32). And the share of finished manufactured
goods in total U.S. exports increased from 58 percent to 62 percent in the
same period of time.
TABLE 32.—Composition of U.S. exports and imports, by major categories, 1965-70
[Percent of total value]
1965
Category
Total domestic exports (excluding military grantaid).
. . .
Crude foods.
Manufactured foods.
. .
Crude materials
Semimanufactures
Finished manufactures
Total imports
Crude foods.
Manufactured foods
Crude materials
Semimanufactures
Finished manufactures
1
. .
1966
1968
1969
19701
100.0
100.0
100.0
100.0
100.0
9.8
6.0
11 0
8.5
5.2
6.9
5.0
10.9
15.6
57.7
10.8
15.0
57.7
10.3
15.2
62.6
15.7
64.3
10.5
16.4
62.1
100.0
100.0
100.0
100.0
100.0
9.4
9.4
8.7
8.4
6.5
9.0
6.9
5.9
8.8
8.3
10.7
14.6
60.9
100.0
7.4
5.7
4.8
9.5
17.3
23.2
41.4
15.2
21.9
45.6
13.8
20.8
48.7
12.1
21.5
50.9
11.4
18.8
55.4
10.3
18.1
56.4
5.4
Based on first 11 months.
Note.—Detail will not necessarily add to totals because of rounding.
Source: Department of Commerce.
1967
139
100.0
6.4
4.6
8.8
Inflation and relatively full employment in the U.S. economy from 1965
through 1969 and underutilization of resources in several other major industrial countries at various times during that period contributed to a striking
deterioration in the U.S. trade balance in the latter half of the 1960's.
Beginning with the second quarter of 1969, the U.S. merchandise trade
surplus rose sharply. The surplus was $2.7 billion (on the Census basis) in
1970 compared to $1.3 billion in 1969. Since mid-1970, however, the trade
surplus has declined irregularly. To a considerable degree, the levels of exports and imports in 1969 were affected by temporary distortions arising
from the dockworkers' strike. When adjusted to eliminate the effect of these
distortions, the figures indicate a somewhat smaller improvement in the
trade balance in 1970 over 1969.
Superficially, it would appear that the slowdown in the domestic economy
which began in the second half of 1969 failed to exercise a restraining influence on the growth of imports. The value of recorded merchandise imports
was 11 percent more in 1970 than in 1969, compared with annual increases
of 8.5 percent in 1969 and 23.6 percent in 1968. However, when adjustments
are made for strike-related distortions in the flow of imports during both
1968 and 1969, the growth of imports in 1970 shows a slowdown from that
of the previous year. Moreover, an unusually large part of the increase in the
recorded value of imports in 1970 compared to the previous year—about
two-thirds—was accounted for by price increases as measured by the unit
value index. The rise in the price index of imports was much sharper than
the increase in the U.S. wholesale price index in 1970, suggesting a possible
decline in the price competitiveness of foreign goods on the domestic market.
A marked acceleration in the growth of exports (excluding shipments
under military grants) occurred in 1970, from an average annual rate of
increase of 8.7 percent in the period 1965—69 to an increase of about 14 percent in 1970 over 1969. While continued high levels of economic activity
abroad and the slowdown in the U.S. economy undoubtedly helped sustain
the growth of exports, the acceleration in this growth in 1970 can be attributed largely to the gain in agricultural exports, initial deliveries of jumbo
jets, and recovery from the 1969 dockworkers' strike.
Recent price and cost developments here and abroad appear to favor
U.S. exports. From 1960 to 1965, labor costs per unit of output in manufacturing declined in the United States, while they rose in each of the ten
other major industrial countries except Canada. This trend was reversed
in the latter half of the 1960's. As capacity utilization rose to high levels in
the United States, unit labor costs increased at an average annual rate of
3.6 percent in the period 1965-69, substantially higher than in the economies
of other major industrial nations, with the exception once again of Canada.
Since 1969, labor costs per unit of output have risen faster in several major
U.S. trading partners—notably Germany, Italy, and the United Kingdom—
than in the United States. There is also some evidence that since the end of
140
1969 U.S. manufacturing export prices have risen at a slower rate than the
comparable export prices and wholesale prices of competitor nations, in
marked contrast to the earlier performance. If these developments continue,
they should help improve the international competitiveness of U.S. export
industries.
The net effect that divergent cyclical movements at home and abroad
during 1970 have had on other items in the current account (as defined in
Table 33) is unclear. Improvement in the transportation account during
the first three quarters reflected in part a large rise in U.S. port expenditures
by foreign shippers and in freight receipts by U.S. shippers, both accompanying the surge in trade. The easing of monetary conditions in the
United States and the general tightening of credit conditions abroad tended
to decrease the rate of interest on foreign-held claims on the United States
and raise the rate of interest paid on U.S. claims on foreigners. However,
the balance on investment income showed only a slightly larger surplus in
the first three quarters of 1970 than during the corresponding period of
1969. Military spending abroad showed little increase as higher living costs
and wages in other countries were largely offset by troop reductions, the
shutdown of a number of military bases, and smaller outlays for military
construction projects. Overall, the current account in the first three quarters of 1970 showed a surplus of $0.7 billion (seasonally adjusted), an improvement of $1.6 billion over the corresponding period of 1969.
On the whole, the improved U.S. performance on the current account in
1970 can be attributed to progress in restabilizing the economy and the
price-cost level, and to the probability that we were more advanced in this
process than much of the rest of the industrial world. Undoubtedly the
excess of exports over imports in 1970 would have been smaller under conditions of full employment in the United States and less intense demand
pressures abroad. In fact, the irregular decline in exports from the peak
reached in mid-1970 may be attributable to a general flattening out of the
economic cycle in Canada, Europe, and Japan during the latter part of the
year.
CAPITAL FLOWS AND MONETARY CONDITIONS
The lessening of demand pressures in the market for goods and services in
the United States during 1970, together with an easing of monetary policy,
were gradually reflected in the financial markets. In a number of other important countries, however, demand pressures continued to increase, at least
in the first part of 1970, with the result that financial conditions abroad
continued to tighten after they had begun to ease in the United States. This
shift in relative monetary conditions contributed to substantial net outflows
of private liquid capital from the United States during 1970.
Tight monetary conditions in France, Italy, the United Kingdom, and,
most particularly, Germany, encouraged large capital inflows into those
nations. Much of these came from the United States via the Eurodollar mar141
411-364 0—71
10
ket, despite German efforts to discourage such inflows by imposing additional
reserve requirements on increases in the foreign liabilities of German banks.
The largest such flow occurred in November, when the Bundesbank's
reserves rose by $1.6 billion. In an apparently successful effort to halt these
inflows, the German authorities reduced the discount rate by 1 percentage
point in two successive cuts within a 3-week period.
U.S. banks reduced their borrowing from their foreign branches substantially during 1970. The liabilities of U.S. banks to their foreign branches
were lowered by about $1 billion during the first quarter of the year, as the
easing of credit conditions in the United States made less expensive funds
available in this country while interest rates in the Eurodollar market remained higher than comparable U.S. rates throughout most of 1970. In late
June, the Federal Reserve suspended the interest-rate ceiling on 30- to 89day large-denomination certificates of deposit. American banks increasingly
tapped this source of funds, and their borrowings of Eurodollar deposits from
their foreign branches fell sharply, from $11/4 billion to $7 billion, during
the second half of 1970.
There were also substantial changes in long-term capital movements between 1969 and 1970. U.S. direct investment outflows increased from $2.8
billion during the first three quarters of 1969 to $3.6 billion during the
corresponding period of 1970, reflecting the projected 16-percent increase
in plant and equipment expenditures for 1970 by foreign affiliates of U.S.
corporations. At the same time foreign direct investment inflows to the
United States increased to $0.8 billion. Net foreign purchases of U.S. stocks
and bonds (exclusive of U.S. agency bonds) declined substantially, from $1.9
billion during the first three quarters of 1969 to $1.1 billion during the
comparable period in 1970. This decrease was largely a response not only
to a sharp decline in U.S. security prices during the spring but to the difficulties experienced by several of the large offshore investment funds and the
consequent regulations imposed by several European nations. Net U.S.
purchases of foreign securities also declined dramatically, from $1.4 billion
during the first three quarters of 1969 to $0.6 billion during the corresponding period in 1970.
OVERALL DEFICIT
The net effect of changes in the current and capital accounts during 1970
was a considerable reduction in the recorded U.S. liquidity deficit but a
marked deterioration in the official reserve transactions balance. In response
to the latter, the Federal Reserve Board took steps in December to discourage
further repayment of Eurodollar borrowings by U.S. banks. This action was
undertaken partly because of concern that the capital inflows which were
causing some countries to gain dollar reserves might undermine the efforts
of their monetary authorities to maintain restrictive monetary policies for
domestic purposes.
142
Preliminary estimates indicate that the U.S. liquidity deficit in 1970 was
somewhat less than $4 billion, or more than $4j/2 billion excluding the allocation of Special Drawing Rights (SDR's), a sharp reduction from the 1969
liquidity deficit of $7.0 billion. Preliminary estimates of the 1970 balance on
the official reserve transactions basis indicate a deficit of about $9j/i billion,
including the allocation of SDR's, as compared with a surplus of $2.7 billion
in 1969. (These figures differ from those in Table 33, which are figures for
the first three quarters of 1970, seasonally adjusted, stated at annual rates.)
While the recorded liquidity deficit showed a sharp improvement in 1970,
this balance was distorted by special financial transactions and flows of U.S.
funds to the Eurodollar market which, particularly in 1969, enlarged the
"errors and omissions" item. In addition, the 1970 figure included the
initial allocation of SDR's to the United States. If adjustments are made for
these factors, the underlying deficit in the first three quarters of 1969 was
about $4J/2-$5 billion and about $3*/2-$4 billion in the corresponding period
of 1970. This moderate improvement largely reflected the increase in the
trade surplus, partly offset by larger net outflows of private capital.
The sharp deterioration in the official reserve transactions balance in 1970,
despite the improvement in the liquidity balance, reflected the very sharp
shift in the flow of foreign private liquid funds—from a net inflow of $8.7
billion in 1969 to an outflow of $3.3 billion in the first three quarters of 1970.
(This is shown in Table 33, but the 1970 figures there are reported at annual
rates.) These flows were largely associated with the shift, referred to earlier,
in U.S. banks' Eurodollar borrowings through their foreign branches.
The U.S. official reserve transactions deficit in 1970 was financed partly by
decreases in our total stock of reserve assets. Such assets registered a decline of
$2.5 billion during 1970, even with a nearly $1 billion increase in holdings of SDR's that largely reflected the $867 million initial allocation in
January. The remainder of the deficit was financed by increases in liquid
liabilities to foreign official agencies.
Despite the substantial buildup of dollar balances in the hands of foreign
official holders, 1970 was a year of general calm in the foreign exchange
markets. It was free of any crises like those that had occurred intermittently in preceding years.
MANAGING CAPITAL MOVEMENTS
The large capital movements occurring, as described above, in response
to changes in relative interest rates and monetary conditions are the outgrowth of the increasing internationalization of capital markets, especially
the development of the Eurodollar market. The increasing mobility of capital
is a reflection of the growing flexibility and responsiveness of capital markets,
which contribute to the efficient international allocation of investment and
production. This mobility nevertheless involves some problems. The responsiveness of short-term capital flows to variations in timing and degree in the
use of monetary policy can both undermine the effectiveness of monetary
policy as a domestic stabilization tool and produce significant balance-ofpayments disturbances. It is possible to argue that such short-term capital
flows are largely temporary and usually self-reversing, and therefore that one
need not be concerned about their balance-of-payments consequences. Traditionally, however, several courses of action have been suggested to alleviate
problems arising from international movements of interest-sensitive funds.
One is to offset these capital flows through flexible official financing; another
is to reduce reliance on monetary policy as an internal stabilization tool; and
a third is to insulate domestic money markets by direct control of capital
movements.
Important steps to facilitate the offsetting of large international flows of
liquid capital through international cooperation have been taken by developing flexible arrangements for short- and medium-term official financing, and
by other forms of cooperation among national monetary authorities and
such international institutions as the International Monetary Fund (IMF),
the Bank for International Settlements, and the Organization for Economic
Cooperation and Development. But the experience so far with such arrangements indicates that, while they are helpful in preventing balance-of-payments difficulties arising from such flows, in general they cannot completely
offset the problems that such flows pose for domestic monetary management.
The second alternative would imply achieving a domestic fiscal-monetary
mix that would place heavier reliance on fiscal measures for the achievement
of domestic goals; monetary measures would then be directed more toward
international goals. Whether such a shift in the policy mix is desirable is a
question which must be decided with reference to its domestic effects rather
than on the grounds of balance of payments alone. There are, moreover,
rather obvious practical limitations to this option. Changes in tax rates and
in the level of Government expenditures are difficult and time-consuming.
Even more important, any major effort to rely more heavily on changing the
"mix" of domestic monetary and fiscal policies presupposes a more precise
knowledge than now exists of the different effects of monetary and fiscal
policies on internal stability and external balance.
The third alternative is to take policy actions which directly affect capital
movements. The United States, for balance-of-payments purposes, instituted
three programs to control capital outflows during the 1960's. One was the
Interest Equalization Tax in 1963, which applies to securities sold in U.S.
capital markets by developed countries (except new Canadian issues) and
long-term bank loans (with similar exemptions). The second was the Federal
Reserve's Voluntary Credit Restraint Program, initiated in 1965, which provides guidelines for capital flows from banks and other financial institutions.
Also in 1965, voluntary restraints on direct investment were established
under the direction of the Department of Commerce; this program was converted into the mandatory Foreign Direct Investment Program at the beginning of 1968.
144
Controls on capital movements are widely used; they are permitted by
the International Monetary Fund Articles of Agreement and are generally
regarded as less undesirable than controls on current account transactions.
But they involve some economic costs of their own, and their duration poses
problems. With respect to the Foreign Direct Investment Program, for
example, the passage of time is likely to bring more and more ways of
bypassing the controls. Insofar as the controls are effective, the longer they
remain the greater will be the potential capital outflow when they are lifted
and corporations attempt to repay foreign lenders. Finally, there is some concern about what effect the heavy foreign borrowing, induced by the direct
investment controls, might have on the debt structure of foreign affiliates
of U.S. corporations.
This Administration has affirmed its view that such controls are temporary measures and must not become part of the permanent tool kit of policy
instruments because they distort the efficient allocation of capital. The
relaxation of the Foreign Direct Investment Program which began in 1969
has been continued with due regard to the balance-of-payments situation. In
1970, the "minimum allowable investment" (i.e., the amount not subject
to restraint) was increased from $1 million to $5 milion per year, provided that the additional $4 million was used in the designated group
of lower income countries. Changes in the regulations concerning foreign
borrowings which may be offset against direct investment expenditures
permitted greater flexibility in financing foreign investment projects, as
did new provisions regarding the amount of earnings which may be reinvested and the conditions under which earnings may be transferred among
designated groups of countries. In January 1971 the annual investment
amount not subject to the controls was raised from $1 million to $2 million
without geographical restriction and the proportion of the previous year's
earnings which may be reinvested was increased.
Offsetting official financing, changes in the mix of monetary and fiscal
policies, and the use of direct controls on capital movements do not, however, provide a fully satisfactory answer to the policy problems posed by the
increasing integration of capital markets, and this fact has led to a growing
interest in finding alternative solutions. One answer might lie in no longer
trying to insulate national capital markets but substituting instead a greater
conscious international coordination of monetary policies. A solution relying
on international coordination is often limited, however, by the fact that it
implies restrictions on the freedom to direct monetary policy toward domestic economic problems. Where full coordination is not practicable, one
mechanism for providing greater insulation of domestic capital markets,
and therefore a somewhat more independent monetary policy, would be
greater flexibility of exchange rates within the framework of the present
system established at Bretton Woods. If there were more scope for changing
exchange rates in response to market forces, the sensitivity of short-term
145
capital movements to differences in national monetary conditions might be
somewhat reduced.
While the concern about how the balance of payments is affected by
interest-sensitive flows of short-term capital may be exaggerated, it must be
recognized that major countries will continue to rely heavily on monetary
policy to influence the domestic economy. The management of the resulting
flows of short-term capital will therefore continue to occupy monetary and
financial authorities.
THE UNITED STATES IN THE INTERNATIONAL
MONETARY SYSTEM
The U.S. dollar plays a number of key roles in the international monetary
system. It is widely used to finance private international transactions, even
if no American is involved. It is also the currency used by national authorities in their operations in foreign exchange markets, and dollar holdings are
an important component of world reserves. Because of its international roles,
the dollar further serves as the yardstick by which the values of many free
world currencies are measured. As a result, developments in the United
States economy and balance of payments, and the attitudes other countries
take toward these developments, are of key importance in the smooth
functioning of the international monetary system.
MEASURES OF THE U.S. BALANCE-OF-PAYMENTS POSITION
The measures of our payments balance officially published by the U.S.
Government tend to be widely interpreted as indicators of how close to—
or far from—the most desirable situation we stand at a given time, even
though there is no clear consensus on how the optimum situation is to
be defined. A great deal of attention has been devoted to assessing the
adequacy of the two overall measures of the payments balance now used.
One is the liquidity balance, which is equal to the change in our holdings
of international reserve assets less the change in our liquid liabilities to all
foreigners, official and private. The second is the official reserve transactions
balance, which is equal to the change in our stock of international reserve
assets less the change in liquid and certain nonliquid claims on the United
States by foreign official monetary institutions. From the search for improved
measures has emerged increasing agreement that no one measure can adequately summarize the changes in this country's international financial
position.
The most commonly used measure of the U.S. payments position, the
liquidity balance, was originally intended as a measure of changes in this
country's ability to maintain conversions of dollars into gold at a fixed price
ratio. There has been considerable discussion as to whether the statistical
presentation of the liquidity balance is the best possible reflection of its
underlying concept. This problem was discussed in detail in the 1970 Economic Report of the President.
146
More fundamentally, however, some liquidity deficit will normally arise
when a reserve country acts as an international banking center. Foreigners
tend to accumulate short-term claims on such a country, and in turn the
country may build up a growing net investment in foreign countries at
longer term. At the same time, a continuing liquidity deficit means that the
ratio of reserves to liquid foreign claims is being lowered. The present situation results partly from the growth of world liquidity which was necessary
to accommodate the expansion of world trade and investment over the past
two decades—that is, in part it reflects the successes of the international
economy. Variations in the volume of our liquid liabilities relative to their
reserve backing are therefore not the primary determinant of how desirable
the dollar is as a reserve asset.
The U.S. responsibility for converting foreign liquid claims into other
reserve assets is limited to the holdings of foreign official institutions. Since
the adoption in March 1968 of the two-tier gold system, the possibility of
flows of gold from the U.S. reserve stock through foreign official institutions
into private hands has been eliminated. As a result, the liquidity balance
has lost much of its significance.
In recent years, increasing attention has been focused on the official
reserve transactions balance. This balance, with appropriate adjustments,
measures the quantity of claims on the United States which foreign authorities have acquired or given up in the process of maintaining the exchange
value of their currencies within the prescribed margins. There are considerable difficulties in reading the signals given by the official reserve transactions balance, however. For one thing, it is volatile, exhibiting wide
year-to-year swings as shown in Table 33. Moreover, a movement of dollars
from foreign private accounts to foreign official accounts will increase the
official reserve transactions deficit; movement in the other direction will
decrease it. Such movements may in some cases signal shifts in the degree
of foreign confidence in the dollar relative to other currencies. In other
cases they may simply be due to changes in monetary conditions and interest
rates which alter the attractiveness of dollar assets to foreign private holders,
quite apart from speculative considerations. Because of the obligation to
keep their countries' exchange rates within 1 percent or less of the par value,
central banks are essentially passive in such transactions. In still other cases,
shifts of dollar holdings between the central bank and commercial banks may
represent the deliberate exercise of selective measures designed to reduce
or to enlarge published reserves.
For all these reasons, no single concept of the balance will suffice for all
purposes. Beyond the liquidity and official reserve transactions balances, at
least two other "balance" concepts can be useful. One is the balance on
current account or balance on goods, services, and unilateral transfers (both
government and private). Such a balance indicates the extent to which our
country is currently earning the foreign exchange it needs to carry out its
international lending and investment expenditures. Properly adjusted for
147
TABLE 33.—U.S. balance of payments, 1961-70
[Billions of dollars]
1961-65
average
Type of transaction
Merchandise trade balance.
Exports
Imports
Balance on investment income
U.S. investments abroad
Foreign investments in the United States...
Balance on other services
BALANCE ON GOODS AND SERVICES 2
Unilateral transfers, net; transfers (—) 3
BALANCE ON CURRENT ACCOUNT
Balance on direct private investments
U.S. direct investments abroad
Foreign direct investments in the United
States
Transactions in securities
Transactions in U.S. long-term assets
Transactions in U.S. long-term bank liabilities
to other than official foreign agencies, and all
long-term nonbank liabilities
T_.
Certain transactions
assets 5
in
U.S.
1966
3.9
1967
1968
1969
1970
first 3
quarters^
5.4
23.0
-17.6
29.4
-25.5
3.9
30.7
-26.8
0.6
33.6
-33.0
0.6
36.5
-35.8
2.7
42.1
-39.4
3.5
4.9
4.1
6.3
4.5
6.9
4.8
7.7
-2.9
4.4
8.8
-4.5
4.3
9.6
-1.3
-2.1
-2.4
-2.9
-3.1
-2.5
-2.7
-3.2
2.5
1.9
6.5
5.3
5.2
-2.8
-2.7
-2.8
-2.8
-3.0
Transactions in U.S. short-term assets.
Nonscheduled repayments on U.S. Government
credits
Long-term bank liabilities to foreign official
agencies
Transactions in U.S. short-term nonbank private
liabilities, and nonmarketable liabilities of
U.S. Government
BALANCf ON LIQUIDITY BASIS...
BALANCE ON OFFICIAL RESERVE TRANSACTIONS BASIS
Addendum:
Special financial transactions.
BALANCE ON LIQUIDITY BASIS EXCLUDING
SPECIAL FINANCIAL TRANSACTIONS AND
SDR ALLOCATIONS
3.9
-2.9
-.3
3.8
2.5
-.9
2.2
-3.6
-3.7
-2.9
-3.1
-2.9
-3.2
-2.2
-3.1
-3.8
-4.8
.1
-.8
-.6
.1
.4
.2
.3
.3
.3
3.1
.1
.8
1.6
-.1
1.0
1.0
-.6
.1
.4
.2
-1.8
-2.0
-2.4
-2.5
-2.1
-1.8
-1.4
-2.0
-3.1
-1.7
-2.8
-3.3
-.9
-.4
-1.2
-1.1
-.6
-.3
4
.4
(4)
.2
-. 1
.3
0)
.8
.9
.5
1.0
.9
.4
.9
2.7
.2
.9
-.5
-1.1
-.5
-2.8
2.0
.9
-2.3
-1.4
-3.5
.2
-7.0
-4.4
\l
.8
2.4
1.3
2.3
3.8
-1.0
8.7
-.2
-4.5
-1.8
.3
-3.4
1.6
2.7
-8.7
.6
1.6
1.3
2.7
-.6
.5
-2.9
-2.9
-4.8
-2.6
-6.4
-5.8
.5
Errors and unrecorded transactions...
Allocations of special drawing rights..
Less: Certain nonliquid liabilities to foreign
official agencies
Plus: Foreign private liquid capital, net
-3.1
-2.2
-2.2
Government
BALANCE ON CURRENT AND LONG-TERM
CAPITAL ACCOUNTS6
-5.3
quarters at seasonally adjusted annual rates.
Excludes transfers under military grants.
Excludes military grants of goods and services.
* Less than $0.05 billion.
5
Transactions in U.S. Government assets, excluding official reserve assets, net, less nonscheduled repayments on
credits (including sales of foreign obligations to foreigners).
6 One version of the "basic balance" under consideration. Another variant is the "nonmonetary balance" used by the
International Monetary Fund.
3
3
Note.—Detail will not necessarily add to totals because of rounding.
Source: Department of Commerce.
earnings reinvested abroad, for errors and omissions, and for changes in the
valuation of domestic and foreign assets, the current account also indicates
148
changes in our net international investment position or "net worth," which
may well be considered more meaningful than any other measure of changes
in the basic strength or weakness of our international financial position. At
the end of 1969, for example, our net foreign assets amounted to $67 billion,
an increase of $1.5 billion over the total a year earlier.
Another concept, currently being considered for inclusion in the Government's table of balances, is the basic balance. Such a balance would measure
our net position on current account plus "nonliquid" or "nonvolatile"
capital transactions, treating changes in private liquid assets and liabilities
as financing items. The aim underlying the basic balance is to group together
those balance-of-payments items which best reflect broad, persistent forces
or underlying trends, treating more volatile classes of transactions among
the financing items. Because of the difficulties of approximating such a
distinction with available statistical data, several variants of the basic balance
have been suggested as best reflecting the fundamental concept.
The four balances just discussed—the liquidity balance, the official reserve
transactions balance, the current account balance, and the balance on current
and long-term capital accounts, which is one of several versions of the basic
balance currently under consideration—are shown for the past decade in
Table 33. Despite their conceptual and statistical differences, all these measures of our payments balance suffer from a common difficulty, namely, that
none of them can give more than one side of the picture. The other side,
which because of measurement problems does not appear in any presentation
of the U.S. balance of payments, is the demand side: the number of dollars
foreigners want to add to their reserve stocks in any given year. Rather than
the quantity of dollars flowing into foreign hands, it is the difference between
this amount and the amount they want to hold, given existing conditions,
that would be a true indicator of disequilibrium in the international economic
and financial position of the United States.
The Composition of Reserves
It is generally thought that, aside from political considerations and
questions of confidence, the quantity of dollars foreign authorities want to
add to their reserves depends partly on the desired rate of growth of aggregate international reserves and partly on the availability and desirability of
alternative sources for increasing reserves. The expansion in the supply of
monetary gold has for some time been erratic and insufficient to meet the
increasing reserve needs which have accompanied the rapid growth of world
trade and capital transactions. Under these circumstances, a steady accretion
of foreign exchange, primarily dollars, to world reserves has filled this gap
and prevented a general inadequacy of international reserves.
With the IMF's decision to allocate $9.5 billion of Special Drawing
Rights to member countries over the 3-year period 1970-72, an important
alternative source of new reserves was created. A first allocation of $3.4
billion was made on January 1, 1970, a second allocation of $2.9 billion
149
was distributed at the beginning of 1971, and a third allocation of $3.0
billion is planned for the beginning of 1972. It is envisaged that SDR's will
eventually supplant dollars as the major source of reserve growth, although
the SDR allocations for the 1970-72 period were determined with the expectation that dollars and other traditional sources of increases in official
reserves would supplement this new reserve "money."
The question of the size of foreign official demand for dollars, however,
involves another complication. In addition to wanting growth of reserves,
foreign official institutions generally have preferences concerning the composition of their reserve stocks: what proportion will be represented by
gold, SDR's, and dollars (as well as, in some cases, smaller amounts of
other convertible currencies). In part these preferences may arise from the
differing characteristics of the three major reserve assets. The yield, for
example, is zero on gold holdings, 1.5 percent on SDR's, and substantially
higher on dollar holdings. Also, unlike dollars, SDR's and monetary gold
(since the institution of the two-tier gold system) can be transferred only
among central banks or other official institutions; they cannot be used for
commercial transactions. Much more important, however, is that most
industrial countries wrould apparently like to run some sort of basic balance
surplus or a current account surplus with the rest of the world. The demand
for reserve dollars, therefore, seems to be affected not only by countries'
reserve goals but also by their balance-of-payments goals, measured "net"
of newr SDR allocations. SDR's help to satisfy the first of these goals but
not tlje^second, unless the goals themselves are modified.
The combined growth of official and private foreign demand for dollars
determines the equilibrium size of the liquidity deficit of the United States.
How much the private component of this demand grows will also depend
both on the rate at which nonofficial holders want to increase their aggregate
working balances of international currencies and on the desired composition
of these balances.
A number of characteristics have made the U.S. dollar particularly suited
to its role as the most widely used currency for international transactions.
Among them are the scale and efficiency of the American banking system,
the size and depth of our capital markets, and the freedom of the dollar
both from changes in its foreign-exchange value and from exchange controls
affecting foreigners. So far, the development of European capital markets seems to have enhanced rather than reduced the role of the dollar as
a vehicle currency, although it is too early to tell what ultimate effect
the European Economic Community's proposed movement toward a currency union will have through the decade of the 1970's.
The economic well-being of the United States does not require that
foreign demand for dollar balances continue growing at any particular
rate. What is important is to distinguish clearly between measured U.S.
deficits and the strength or weakness of our international financial position.
Throughout most of the 1950's, while the United States had a measured
150
deficit in its balance of payments nearly every year, there was widespread
concern about a worldwide "dollar shortage." This concern suggested that
the measured U.S. deficit during those years was below its equilibrium size
as determined by the growth of world demand for dollar reserves. The
point is that it is essential that consideration of the foreign demand for
dollars should temper any use of measured balance-of-payments deficits as
the basis for policy decisions affecting our domestic economy or our international economic relationships.
Balance-of-Payments Goals
In the present international monetary system, in which the dollar serves
as a yardstick, other countries, by selection of their exchange rates, in
effect determine the exchange value of the dollar. The balance-of-payments
position of the United States, however it is measured, depends therefore
not only on the state of our domestic economy and on the economic behavior of our citizens and Government but on the economic performance
and policies of other countries, including their decisions about exchange
rates. Individual countries take actions that they consider appropriate to
their particular circumstances. Collectively, those actions are not always
easily reconciled with other countries' statements about the most desirable
payments position for the United States. During the 1960's, for example,
there were frequent expressions of foreign concern about the size and persistence of the U.S. deficit. Yet the net result of exchange-rate changes by
leading industrial countries was a very slight actual appreciation of the
dollar—a development which would inevitably have some tendency to
weaken our current account balance.
The United States has full responsibility for maintaining a noninflationary
expansion of its domestic economy. This responsibility was not met in the
latter half of the 1960's, and U.S. performance during this period clearly
contributed to the deterioration of our balance of payments. Nevertheless,
regardless of our domestic performance, there are no measures which the
United States can take to satisfy balance-of-payments demands of various
countries if these demands are fundamentally inconsistent. No matter what
constraints the Government imposes on the domestic economy, and no matter
how many measures it adopts to alter or control individual categories of
international transactions, the United States will not be able to abolish
its balance-of-payments deficits if most of its major trading partners establish exchange rates and follow other balance-of-payments policies that
enable them to run surpluses over and above their SDR allocations.
This problem of the possible inconsistency of balance-of-payments goals
cannot, in short, be solved through unilateral policy action by the United
States. Instead it requires multilateral action by the members of the International Monetary Fund—the present framework for international monetary relationships among the countries of the free world. One step toward
the solution of this problem has already been taken with the establishment
of Special Drawing Rights, international reserves which do not depend on
a persistent deficit in the balance of payments of the United States or any
other country. The purpose in instituting SDR's and related arrangements
with respect to reserve creation is, of course, to provide a situation in which
all countries can satisfy their demands for reserve increases simultaneously,
so that the reserve center need not be forced into persistent deficit through
policies adopted by other countries to run net surpluses in their balance-ofpayments transactions.
Ideally, the rate of reserve creation should be neither too small nor too
great. If it is too small, at least some countries will find their reserve goals
frustrated, and their efforts to prevent the inadequacy of their reserves from
imparting deflationary pressures to their domestic economies are likely to
lead to increasing restrictions on international transactions and a competitive
upward pressure on interest rates. If the rate of reserve creation is too
great, the excess liquidity will be a vehicle for transmitting inflationary
pressures internationally and will make it more difficult for national authorities to control domestic inflation.
In practice, however, it is not possible to find a rate of creating world
reserves that is just right for every country. The objective must be a rate
which best reflects an international consensus as to the most desirable trend
of reserve growth. Moreover, even with such a consensus, problems would
still arise if, as suggested earlier, other countries were to formulate balanceof-payments goals that were inconsistent with their aims regarding the
composition of international reserves.
Exchange Rates
Because of the possibility that reserve creation and reserve management
alone cannot solve the dilemmas just described, interest has recently focused
on increased, though limited, flexibility of exchange rates. Changes in official
parities have occurred in the past, of course, and have played a role in
stabilizing the international monetary system. But the political consequences
inherent in exchange-rate decisions have made countries hesitant to undertake such adjustments. As noted earlier, exchange-rate changes by industrial
countries in the 1960's resulted in a small net depreciation of these currencies
against the dollar, in part perhaps because political inhibitions against exchange-rate changes tend to be stronger in the case of appreciation than in
the case of depreciation. To the extent that such an asymmetry exists,
its effect is to favor a devaluation against the international standard—
the dollar. Opinions about the quantitative significance of this tendency
differ, but there is a widespread feeling that modifications which would make
exchange-rate changes less politically charged and less likely to lead to speculative disturbances would contribute to the smoother and more effective
operation of the existing system.
More frequent and smaller changes in the dollar parities of currencies
would reduce the tendency for sizable payments imbalances to build up. This
152
in itself would be an advantage, but an added advantage would arise insofar
as the calculation of the appropriate new par became less critical. With
smaller and more frequent changes in par value it would be easier to modify
those which turned out to be either inadequate or excessive.
Smaller and more frequent changes in parity would not necessarily involve
a change in the present IMF rules, but only a change in the practices which
member nations have generally followed. A recent report by the Executive
Directors of the IMF notes that the Fund is empowered "to concur in members' proposals for prompter and smaller changes in parities, whenever these
are necessary to correct a fundamental disequilibrium."
On two recent occasions the difficulty of identifying an appropriate new
par value has led countries to move away from the existing exchange-rate
parity without immediately choosing a new one. At the end of September
1969 the German Government closed its foreign exchange markets under
the pressure of a large capital inflow. When the markets were reopened
several days later, no attempt was made to defend the old parity, thus introducing a period of "transitional float." The mark moved upward on the
exchanges, and when a new par value was declared toward the end of
October it exceeded the previous one by more than 9 percent. A somewhat
different case arose at the end of May 1970 when, in the face of a very
strong payments position and domestic inflation, the Canadian Government
withdrew its defense of the existing par value; it has not yet declared a
new one.
There is also the possibility of introducing greater flexibility by some widening of the margin permitted under the present IMF rules for exchange-rate
variation around each country's par value. This margin or "band" is now 1
percent each way. Such an increase in the scope for market-induced movements of exchange rates might have several advantages. By increasing the
risk of exchange-rate loss and thereby reducing the sensitivity of some types
of short-term capital movements to differing degrees of tightness or ease in
national money markets, it would make possible greater independence in
national monetary policies. It could also be expected to reduce pressure on
official reserves by encouraging stabilizing movements of private funds in
cases where payments disturbances are regarded as temporary and selfreversing, and by decreasing the potential profitability of speculative flows
based on anticipations of a change in parity. Such potential profitability
would be reduced not only because the speculators would lose more if
they guessed wrong but because the broader scope for exchange movements
within the margins might in some cases reduce the need for actual parity
changes.
All of the possible modifications just described are at present under study
by the IMF in its consideration of whether amendments to its Articles of
Agreement are necessary or desirable to encourage the most effective utilization of exchange-rate policies as a tool of international adjustment. The need
is to find modifications of law or practice that will alleviate in the best pos-
153
sible way the recurring financial strains in the existing system while still
maintaining the essential characteristics of a monetary system under which
steady and dramatic advances in world trade and prosperity have been
achieved.
ADJUSTMENTS IN INTERNATIONAL TRADE
Improvement in the monetary system has been one of the two major
developments in the international economy since World War II. The other
is the cooperative effort to dismantle the network of barriers that had
obstructed the international exchange of goods and services prior to and
during the war. Although many obstacles to trade still exist, gradual tariff
reductions have been an important stimulus to the rapid postwar expansion
of world trade. A number of international institutions, in particular the
General Agreement on Tariffs and Trade (GATT), have been instrumental in reducing the hindrances to freer trade on a multilateral basis. Some
problems of adjustment have emerged, however, as international trade has
become more important in each country's affairs.
During the 1960's the volume of world trade (excluding that of Communist countries) grew considerably faster than real income in this group
of countries, and the relative importance of trade to the American economy
has increased as well. For example, the trend rate of growth of real imports of goods and services in the United States during the period 1955-68
was 1.6 times as great as that of real domestic production. In the same
period the trend rate of growth of exports in real terms was 1.4 times
that of output. Among broad categories of manufacturing industries, sharp
increases in penetration by imports were registered in the latter half of
the 1960's in apparel, leather goods, electrical machinery, transportation
equipment, and other durable goods. The ratio of exports to total output
rose significantly in the lumber, electrical machinery, transportation equipment, and primary and fabricated metals industries. Clearly, the growth of
U.S. trade has signified not only greater availability of foreign manufactures,
but also wider markets for many domestic products.
U.S. TRADE POLICY
The liberal trade policies followed since World War II have not only expanded our exports and imports but have also contributed to a higher standard of living with a richer choice of products both here and abroad. At the
same time, these gains require domestic adjustments in certain industries
that grow more slowly, or even contract, as a result of trade liberalization.
Despite the overall gains, the problems of adjustment and the natural
tendency for an industry to resist foreign competition have brought renewed
pressures in recent years to reverse trade liberalization. Pressures have also
grown because of protectionist actions by some of our trading partners and
because the reduction in our merchandise trade surplus has led to a
belief that the United States is now benefiting less from trade.
All these pressures converged during 1970 when Congress considered
new trade legislation. The trade bill recommended by the President in
1969, and described more fully in the 1970 Economic Report of the President, included several measures that represented continued progress in
our trade policy. In addition to authority for limited tariff reductions and
elimination of the controversial use of the American selling price as a basis
for setting certain import duties, the bill proposed new authority to act
against countries that employ export subsidies in competition with U.S.
exports in third markets. Most important, perhaps, was the bill's proposal
to liberalize criteria for providing adjustment assistance to workers and businesses adversely affected by imports.
Certain additional features were subsequently added to the President's
proposal. Some of these, including an amendment to allow Domestic International Sales Corporations that would provide tax deferrals to U.S.
exporting firms, and the addition of textile quota provisions designed to
assist in the conclusion of international agreements on textiles, were supported by the Administration. Other amendments, many of them unacceptable to the Administration, were eventually included in a bill
passed by the House of Representatives. The most questionable was
a provision to impose increased restrictions on imports of products which
met certain quantitative criteria in cases where the Tariff Commission
found injury. This and several other amendments threatened to reverse
the steady progress that had been achieved in liberalizing our trade policy.
The bill opened the prospect of retaliation by other countries against U.S.
exports, and it would have weakened the fight against domestic inflation.
U.S. trade policy clearly reached a critical juncture in 1970. Although
Congress did not adopt protectionist trade legislation, the pressures for
greater import restrictions remain strong at the beginning of 1971. If the
broad gains to the economy that have resulted from increasingly open access
to markets here and abroad are to be sustained, it is important that the
wider public interest be voiced as strongly as the complaints of adversely
affected parties. At the same time, better means must be found to meet
legitimate problems of adjustment in some industries affected by rapidly
increasing imports.
Domestic Adjustments to Changes in Trade Patterns
The burdens of adjustment to foreign competition are too often ignored
by those who advocate free trade. Much fixed capital, such as specialized
machinery, is not transferable to other industries. Workers will have the
difficulty of changing jobs, of moving and starting a new home; some who
have acquired skills not needed in other industries may face unemployment
or lower incomes.
Import restrictions, however, are neither the only solution to these problems nor in principle the best one. A better approach, taking into consideration the interests of both consumers and producers, is to do more to facilitate
the adjustments that injured firms and workers must make. As the President
recognized in his original trade bill proposal, adjustment assistance should
become available at an earlier point in an industry's struggle to compete with
imports. Moreover, it should become available more quickly after the application for aid.
Use of the adjustment assistance provisions of the Trade Expansion Act
of 1962, although still limited, expanded notably during 1970. For the first
time since the program's inception, the President authorized firms and
workers in three industries to apply directly to the Secretaries of Commerce
and Labor for assistance. The number of workers and firms actually certified
for assistance, including some in other industries that had requested assistance
individually from the Tariff Commission, increased greatly during 1970.
There are, of course, costs in administering and financing adjustment assistance programs. These costs, which would be substantial in the case of a
large industry such as textiles, are ultimately paid by taxpayers. The aim
of such programs, however, is not to provide compensation payments indefinitely to injured firms and employees, but to ease the transfer of labor and
other resources to more productive sectors of the economy. For workers, this
means retraining and assistance in job hunting. The costs to taxpayers should
thus decrease eventually as workers in the injured firms obtain new jobs or
reach retirement age. On the other hand, the costs that import quotas create
for consumers in the form of higher prices and a narrower choice of goods
continue as long as the quota remains in effect.
There may occasionally be sound reasons for reducing the burden of adjustment on import-competing industries by obtaining agreement from foreign exporters to restrict their shipments. This has been done for a number of
commodities, including cotton textiles, meat, and steel. The Administration
has attempted to negotiate similar restraints for manmade textiles and woolen
goods. Such voluntary agreements affect prices in the importing country in
the same way that quotas permitting a like volume of imports would do, but
their provisions tend to be more flexible than those of legislated quotas.
The main drawback of a quota as compared to a tariff is that unless a
tariff is prohibitive it does not inhibit competition as much as a quota, unless
the quota is ineffective. This is so because a tariff allows imported goods to
enter if, even with the tariff, they are competitively priced. A tariff therefore
puts a limit on the amount by which the domestic price can exceed the world
price. An effective quota, on the other hand, does not put any limit on the
rise in domestic prices. Those who are permitted to import under a quota
system are under no obligation to pass on the lower world price to their customers ; their right to import gives them a windfall profit. Under a tariff the
difference between the world price and the domestic price accrues to the
Treasury. In those schemes for quotas or voluntary restraints which do not
call for import licenses, the quotas are in effect controlled by the foreign
exporter, who is therefore in a position to capture the windfall. In the case
of imported beef, for instance, export prices to the United States from the
156
principal supplier are between 10 and 20 percent higher than the export
prices to other countries. It is clear therefore that quotas should only be used
where no satisfactory alternatives are available.
All these reasons make it important for countries participating in the
world trading system not only to reduce tariff barriers but also to work
toward eliminating various nontariff barriers to trade. Preliminary efforts
to develop a common framework for negotiating reductions in such barriers
have begun within GATT, and it is hoped that they will be intensified
during 1971.
While much attention has been focused on adjustment problems where
labor and capital have been hurt by foreign competition, it is often overlooked that erecting barriers to trade would cause similar problems for
firms and workers in exporting industries if other countries reduced their
imports from the United States either in retaliation or as a result of the
normal response mechanisms in international transactions. It has been
estimated that in 1969, 3.8 percent of the private labor force was directly
or indirectly dependent upon exports for employment, the same percentage as in 1965 (Table 34). This figure includes not only labor employed
directly in producing exports but also labor involved in producing items
used in the final export goods. The proportion of agricultural workers whose
output found a market abroad has been relatively high for many years.
Between 1965 and 1969, however, the proportion of employment accounted
for by exports in manufacturing rose and that in agriculture, forestry, and
fisheries declined.
Wages in export industries are usually higher than in import-competing
industries. For example, a weighted index of wage rates for production
workers in manufacturing whose jobs depended on exports in 1966, the
latest year for which information is available, was 8 percent higher than
the average earnings in jobs which might have been created by import
replacement.
TABLE 34.—Percent of private employment related to U.S. merchandise exports, I960, 1965,
and 1969
Export employment as percent of total private
employment i
Industry or sector
1960
Total employment..
Agriculture, forestry, and fisheries.
Mining
Construction
Manufacturing
Services
Government enterprises
1969
1965
3.9
3.8
3.8
9.8
9.1
.6
6.1
1.8
2.9
10.9
8.4
.6
6.2
1.8
2.8
9.4
9.2
.6
6.9
1.9
3.3
1
Employment covers wage and salary employees, self-employed, and unpaid family workers; Federal, State, and local
general government employment and private household employment are excluded.
Source: Department of Labor.
411-364 O—71
-11
Import Restrictions and the Domestic Price Level
For a country to benefit from trade liberalization, it is not necessary
that its trading partners also have liberal policies, although worldwide trade
liberalization would, of course, yield still greater benefits both here and
abroad. But the opportunity to obtain some goods at lower cost through
exchange for exports rather than through domestic production provides
net gains to our consumers and to U.S. industries which use imports as raw
materials, whether that opportunity arises from lower-cost production or
from subsidized production in other countries.
Import restrictions tend to aggravate inflation by limiting the total supply
of goods to the domestic market. When imports are free to expand, some
of the excess demand can be diverted from the domestic economy and
thus moderate the pressures on the domestic price level. In addition, competitive pressure from imports gives U.S. industries a strong incentive to
increase their productivity and cut costs. Such pressure also encourages
more competitive pricing, particularly in industries which are highly
concentrated.
Nevertheless, experience suggests that progress toward freer trade is
more likely to be achieved through reciprocal action than through unilateral moves. The domestic advantages of freer access to imports have
usually had to be reinforced by the attraction of better markets for a country's exports. Moreover, a country that imposes fewer restrictions on imports than do its major trading partners makes its industries bear a disproportionate share of the burden of adjustment to changes in the pattern
of international trade. The United States has maintained an open market
in manmade textiles, for example, while many European countries subject
them to quantitative import restrictions.
The benefits of freer trade can therefore be defended most effectively if
we not only avoid actions that would unnecessarily deny our consumers
access to the lower-cost products of other countries but also keep a careful
watch over developments abroad that threaten the achievement of liberal
trade policies. The President made this clear in a message to the Congress
in December 1970, in which he said:
The Administration remains committed to the objective of expanding mutually advantageous world trade. The record of the
United States demonstrates clearly its willingness to assume its
obligations in this field. We must continue to do our part, while
at the same time defending vigorously the rights of our traders
under international agreements.
REGIONAL TRADING ARRANGEMENTS
One argument cited by proponents of protection against imports has
been the rapid expansion of special trading arrangements among groups of
countries. Numerous groups of countries in all parts of the world have
initiated special trading arrangements. Although its objectives are much
broader, the European Economic Community is the largest and most important such trading unit. The principal grounds for concern about such
arrangements are that they may unduly discriminate in favor of trade among
member countries, and therefore against trade with the United States and
other nonmember countries. The General Agreement on Tariffs and Trade
has rules governing these matters, but constant review is needed to ensure
that the rules are observed and to prevent adverse consequences for third
countries.
ENLARGEMENT OF THE EUROPEAN ECONOMIC COMMUNITY (EEC)
The prospective enlargement of the EEC will affect world trading relations substantially. The EEC entered into enlargement negotiations with
four other countries in June 1970. If negotiations culminate in the admission of the four applicant countries (Denmark, Ireland, Norway, and the
United Kingdom), the combined GNP of the enlarged EEC would be about
60 percent as large as that of the United States, and the total imports of
these countries from nonmember countries would be nearly 50 percent larger
than U.S. imports. It is anticipated that several other Western European
countries would also become associated with the EEC in subsequent negotiations.
The United States has long supported the integration of Western Europe
because the broad political gains expected from a strong, united, and outward-looking Europe should exceed whatever economic costs might be incurred. In supporting the enlargement of the EEC for the same reasons,
however, the United States has the right to expect that the interests of
nonmember countries will be taken fully into account in the process of enlargement and that the policies of the enlarged Community will be responsive to the needs of the world community. With this goal in view, the United
States has intensified its consultative arrangements with the EEC.
Enlargement could create significant changes for all U.S. economic relations with Western Europe. Although on balance the effects of the formation
of the EEC on industrial trade have so far been favorable, several studies
have shown that the EEC's agricultural policies have damaged some major
U.S. agricultural exports. The United States is concerned that British entry
into the Community at its current high levels of agricultural price supports
might lead to further deterioration of U.S. agricultural exports. The solution
lies in making the Common Agricultural Policy of an enlarged Community
respond better to the needs of both consumers and farmers. Such a change
would be to the benefit not only of the member countries but also of efficient
outside suppliers. The United States has found over the years that it is better
to maintain farm income through direct payments rather than through high
price supports.
159
GENERALIZED TARIFF PREFERENCES FOR LOWER INCOME
COUNTRIES
Another set of basically discriminatory trading arrangements are "special
preferences" which the EEC countries grant to imports from selected lower
income countries and which the United Kingdom and other members of
the Commonwealth grant to each other. Frequently, these arrangements
also entail "reverse preferences," whereby the less developed nation opens
its market to exports from those developed countries which grant it special
preferences. Reverse preferences are maintained in most of the EEC's special
preference arrangements and in some of the special arrangements between
developed and less developed members of the British Commonwealth. There
has been a tendency in recent years for such arrangements to spread, thus
undermining still further the principle of nondiscrimination on which the
international trading system is based and damaging the commercial interests
of countries that are not parties to the arrangement.
Recognizing the need to assist the lower income countries in accelerating
their economic growth and to avoid the adverse consequences of selective
trading arrangements, the President announced in his speech on Latin
American policy in October 1969 that he had decided to press for the adoption by all developed countries of a liberal system of generalized tariff preferences for the exports of all lower income countries.
The decision to pursue this course was based on the belief that the best
way to assist the lower income countries is for the developed countries to
join in a common effort without seeking special trading benefits for themselves. Establishing a nonreciprocal preference system open equally to all
lower income countries will have several advantages. It will enable them
to increase their exports and their foreign exchange earnings and thus
hasten their economic development; it will reduce the present discrimination
among lower income countries that arises from special preferences favoring some countries at the expense of others—notably the Latin American
countries—with no preferential access to any developed country's market;
and, by eliminating reverse preferences, it will allow the lower income
countries to buy from the cheapest source of supply.
In the months following the President's announcement the United States
engaged in a series of intensive consultations—both bilateral and multilateral—with the prospective preference-granting countries and with the
lower income countries in an effort to work out the details of a preference system.
Eighteen developed countries (including the six members of the European
Economic Community acting as a unit) have agreed, subject to necessary
legislative authorization, to grant generalized tariff preferences for a temporary period, now set at 10 years, and have made specific proposals. Under
the U.S. proposal, most manufactures and semimanufactures (excepting
only textiles, shoes, and petroleum products) imported from lower income
countries, and a selected list of processed and primary agricultural products
160
and raw materials, would be admitted duty free. In order to qualify for
generalized preferences, lower income countries must provide adequate
assurance that reverse preference arrangements will be eliminated within a
reasonable period of time. Proposals by the other major developed countries
also call for the elimination of duties on a broad range of products. While
the proposals of individual countries differ somewhat in their form, they are
designed to achieve similar results. In October 1970 these proposals were
accepted by the United Nations Conference on Trade and Development as
providing a "mutually acceptable" basis for the establishment of a generalized preference system.
AIDING DEVELOPMENT IN LOWER INCOME COUNTRIES
Stimulation of exports from the lower income countries by means of
generalized preferences promises to aid these countries materially; but capital
flows, both official and private, must play a major role in the economic
development of these nations. While increased trade allows lower income
countries to use their existing supply of resources more efficiently, capital
flows provide them with additional working resources.
FOREIGN ASSISTANCE
Although the United States still provides more aid than any other
developed nation, net official assistance for development has fallen from
$3.6 billion, or 0.6 percent of GNP in 1963, to less than $3:2 billion, or 0.3
percent of GNP in 1969. In 1970, there probably was a further slight
reduction in the net official flow. However, there are indications that, in
line with the President's declared policy^ the downward trend in the absolute
level of U.S. aid will be reversed. After falling for 3 years, budget authorizations for the portion of gross official flows covered by the Foreign Assistance
Act and for other multilateral flows increased slightly in fiscal 1970, and a
significant increase has been voted for fiscal 1971.
The fall in the share of our national product devoted to aid has reflected
a disillusionment both with the effect of such aid on the growth rates of less
developed countries and with the efficiency of our aid institutions. The complexities of the development process were underestimated when the United
States first began to assist the less developed world. Aid institutions which
were highly successful in implementing the Marshall Plan have lagged in
meeting the quite different challenges which lower income countries have
recently confronted. On the other hand, there have been some outstanding
successes. The economic progress of Israel, South Korea, Taiwan, and several
other nations demonstrates that aid can be used efficiently.
The Administration believes that the number of successes can be greatly
increased and has assigned high priority to the task of improving the probability of scoring positive gains. In 1969 the President appointed a Task
Force on International Development, whose report played an important
role in the formulation of his 1970 message on "Foreign Assistance for
161
the Seventies" with its proposal for a fundamental reform of the U.S.
effort. According to this proposal, aid would be divided into three components : development assistance, humanitarian assistance, and security
assistance. Because each would be administered through a different organizational structure, responsibilities could be more clearly fixed and the success of
each program in meeting its specific objectives could be more easily assessed.
The President's message recommends that a much higher portion of American aid be channeled through multilateral institutions than at present.
This change would allow greater coordination of international assistance
and reduce some of the political frictions associated with bilateral aid.
The President also proposed a major reform in our bilateral aid program.
He recommended the creation of two new organizations: a U.S. International Development Corporation to manage bilateral lending activities on a
businesslike basis, and a U.S. International Development Institute to manage a portion of our technical assistance and to mobilize private scientific
expertise and technology to help solve specific problems of lower income
countries. The present Agency for International Development would be
phased out; the number of U.S. employees working overseas on development projects would be reduced; and greater reliance would be placed on
the information gathered by multilateral agencies.
It is important to ensure that each dollar flowing to recipients is used
with maximum efficiency. Currently, the usefulness of international aid is
limited by the requirement that a large portion of the funds be used to purchase goods from the donor country, even though the necessary items might
be cheaper elsewhere. It is estimated that in many countries these "tying"
provisions directly reduce the value of aid by at least 20 percent. In addition,
tying may force recipients to engage in projects calling for a high import
content, although they would otherwise have low priority and although they
draw scarce local resources, both administrative and physical, away from
more essential activities. In order to eliminate these serious problems, the
President's message recommends that donor countries move together to
abolish tying restrictions. A joint effort will mitigate any negative effects on
the balance of payments of individual donor countries. Most donor countries
have agreed to this principle. The United States has already decided to
allow the use of development lending for procurement in any of the lower
income countries themselves.
Improvements in the form of our aid and in our institutions represent
only one approach to the problem. The impact of aid also depends crucially
on the policies of the recipient countries. Thus far, some countries' efforts
to use aid effectively have been hampered by a lack of administrative talent
and technical skills. To meet this problem it is essential to supplement aid
for capital formation with technical assistance. The United States has recognized this need, and in recent years technical assistance has been growing
more rapidly than capital assistance, even though it still constitutes a smaller
portion of our total aid compared to most other donors. One of the most
162
important tasks for the U.S. International Development Institute proposed
by the President in his Foreign Aid Message will be to emphasize technical
assistance and to provide the research necessary for its most effective use.
Even efficient technical assistance will do little to help development, however, if the recipient does not have the will to use it effectively. The
effectiveness of the recipient's development efforts must therefore be an
important determinant of how aid is distributed.
PRIVATE CAPITAL FLOWS
In the period from 1962 through 1969, net flows of private American
capital to the lower income countries were about 40 percent as large as the
official flows. Direct investment constituted more than two-thirds of the total
private flow, while the rest consisted of private export credits and portfolio
investment.
By the end of 1969 the book value of U.S. direct investment in less developed countries totaled $20 billion, of which $7.8 billion was in petroleum and
$5.2 billion in manufacturing. Almost $12 billion of the total was invested in
Latin America, the rest being almost evenly spread among less developed
economies in other parts of the Western Hemisphere, as well as in Africa,
the Middle East, and Asia.
Because private capital can confer important benefits, the U.S. Government has adopted a number of policies to encourage direct foreign investment in lower income countries in which it is welcomed! The Overseas
Private Investment Corporation was created late in 1969. It will take over
and expand the Agency for International Development programs to encourage private investment and will provide financial assistance to private enterprises operating in lower income countries. Its lending policies will follow
regular business practices, and in 5 years its formal constitution will be
reviewed with the possibility of transferring this agency to the private sector.
To the extent that the programs of the Overseas Private Investment
Corporation can reduce the risks associated with investing in the underdeveloped world, those with capital will be more ready to consider a wide
range of investment opportunities in the lower income countries. These lower
income countries, however, will reap the benefits of this and other policies to
stimulate private capital flows only if they create an environment that will
attract private foreign investment.
In its program to control capital outflows for direct investment, the U.S.
Government has discriminated in favor of investment in the lower income
countries. Under the 1968 regulations, the formula setting an upper limit to
the flow of direct foreign investment to the lower income countries was
much more generous than the formula applying to direct investment in developed countries. In addition, not only can the limits be exceeded in special
cases, but a company with unused allocations for direct investment in developed countries or Middle East oil-producing countries could reallocate the
funds for use in developing nations. As a result of these policies, restraints on
direct foreign investment have had little if any adverse effect on flows to the
lower income countries.
163
While most private capital is moved to lower income countries in search of
profits, there has also been a significant flow of aid financed by private foundations and other charitable groups. In 1969, this flow amounted to over
$400 million. Private foundations also played a significant role in one of
the most dramatic successes among aid programs by contributing to the
technological developments culminating in the new varieties of wheat, rice,
and other grains which have created the "green revolution." The resulting
increase in agricultural productivity greatly heightens the chances of a
continual rise in the level of living despite rapidly growing populations. The
technological improvement has been so overwhelming, however, that serious
adjustment problems are emerging. The benefits do not accrue evenly to
the agricultural population, and new job opportunities will have to be
created to absorb the labor force released from agriculture. In short, even
success can create problems, and this example well illustrates the complexity
of the growth process.
RELATIONSHIPS AMONG INTERNATIONAL ECONOMIC
POLICIES
The various issues reviewed in this chapter are best considered, not independently, but in terms of the important interrelationships which tie them
all together. U.S. trade policy, for example, must be considered in the light
of domestic economic conditions as well as of the responsibilities implied
by the key role of the dollar in the international monetary system. The relationship between the United States and the European Economic Community
is a major consideration in the formulation of both our trade and our balance-of-payments policies. And generalized preferences for the exports of
lower income countries, official aid flows, and private investment in these
countries all play an important part in the effort to find the most effective
contribution which this country, along with other industrialized countries,
can make to the economic development of lower income nations.
In the light of these interrelationships, the President has recently moved
to assure coordination at the highest level of all aspects of our foreign
economic policy and to provide consistency with domestic economic policy
and basic foreign policy objectives. Such coordination and overall direction
is to be provided by the new Council on International Economic Policy, of
which the President will be Chairman, and whose membership will include
the Secretaries of State, Treasury, Agriculture, Commerce, and Labor, the
Director of the Office of Management and Budget, the Chairman of the
Council of Economic Advisers, the Special Representative for Trade Negotiations, the Executive Director of the Domestic Affairs Council, the Assistant to the President for National Security Affairs, and the Ambassadorat-Large. The newly-appointed Assistant to the President for International
Economic Affairs will serve as Executive Director. In announcing the formation of this Council, the President pointed out that its purpose is to deal
with the international economic policies of the United States as a coherent
whole.
164
Appendix A
CORPORATE LIQUIDITY IN 1969 AND 1970
165
CONTENTS
Page
169
CORPORATE LIQUIDITY IN 1969 AND 1970
DESCRIPTION OF THE STUDY
169
MEASURES OF CORPORATE LIQUIDITY
170
HISTORICAL BACKGROUND
172
BEHAVIOR OF CORPORATE LIQUIDITY: 1969 I THROUGH I
1970
III
Manufacturing Corporations With Low Liquidity Ratios in 1970 I. .
Manufacturing Corporations With Negative Profits in 1970 1
Conclusion
173
175
177
178
List of Tables and Charts
Tables
A-l. Average Liquidity Ratios of Large Manufacturing Corporations, 1969
1-1970 III
A-2. Percentage Change in Average Liquidity Ratios for High and Low Groups
of Large Manufacturing Corporations, 1969 1 to 1970 III
A-3. Average Ratios and Operating Measures of Large Manufacturing Corporations With a Low Quick and/or a Low Solvency Ratio in 1970 I, 1969
1-1970 III
A-4. Average Ratios and Operating Measures of Large Manufacturing Corporations With a Negative Return on Equity in 1970 I, 1969 1-1970 III.
174
175
176
178
Chart
A-l. Liquidity Ratios of Large Manufacturing Corporations
167
173
Corporate Liquidity in 1969 and 1970
Measures of liquidity refer to the capability of a corporation to make payments as obligations fall due. In reality, liquidity is a dynamic concept involving the total inflows and outflows of cash, and it extends beyond the
static financial values expressed in a company's balance sheet. Gash inflows result not only from the current selling of inventory and subsequent
collection of accounts, but also from the conversion of existing financial
assets and real properties into cash, as well as from short- and longterm borrowings, and the raising of additional ownership funds. Gash
outflows result from current payments for goods and services, but they are
also influenced by the pace of capital investments, payment of dividends
to owners, and the repayment of borrowed funds. Liquidity, therefore, is
determined not only by the interrelationship between current assets and
liabilities, but also by the general economic status and prospects of the firm,
its access to alternative sources of funds from the money and capital markets,
and of course the impact of national monetary and fiscal policies. Unfortunately, a general analysis of liquidity is difficult because there are extreme
variations in the liquidity requirements of different industries. Even within
the same industry, individual firms have divergent policies reflecting unique
management goals and techniques. Nevertheless, it is important to analyze*
the general status of corporate liquidity in appraising the entire economy.
During 1969 and the first half of 1970 there was particular concern about
the liquidity of corporate businesses. With the sustained period of credit restraint in 1969 and early 1970, some financial imbalances that had accumulated during the long inflation became more apparent. Capital expenditures
of businesses were high and large increases were projected for 1970, but it was
also clear that the financing of these expansion plans had relied heavily
on short-term borrowing. Some companies were therefore in an exposed position if a deterioration of earnings or some development in credit markets
should incline holders of these short-term liabilities to demand payment. As
the economy responded to measures of restraint, corporate profits did decline,
and confidence was even more generally disturbed by the financial problems
of the Penn Central Railroad.
DESCRIPTION OF THE STUDY
This appendix summarizes liquidity developments in a sample of large
U.S. manufacturing corporations during 1969 and the first three quarters of
169
1970. Nonmanufacturing corporations are not included because liquidity information is not available for this category prior to the third quarter of 1969.
Particular attention is given to the question of whether the financial difficulties of 1969 and the first three quarters of 1970 produced a situation in
which a large number of sound and profitable corporations were threatened
with bankruptcy as a result of their inability to meet short-term obligations.
The financial information summarized in this appendix was collected by
the Securities and Exchange Commission as part of its regular quarterly survey of manufacturing corporations. To preserve the absolute confidentiality
of the information submitted to the SEC, the material is presented only on
an aggregate basis. Only large manufacturing corporations (those with total
assets of $100 million or more in 1970 I) were included in the aggregate
analysis. Nevertheless, the sample group has control of about 75 percent
of the assets of all manufacturers. A total of 553 large manufacturing corporations submitting quarterly income statements and balance sheets met
the size criterion used; of these, 18 were omitted because they did not report
in each quarter throughout the 1969 I to 1970 III period.
The liquidity ratios reported in this appendix differ from the statistics published by the Securities and Exchange Commission in its Quarterly Financial
Report. The Commission's figures refer to ratios of aggregates; for example,
the current ratio for a specific industry is determined by totaling the current
assets of all corporations in that industry and dividing this sum by the total
of current liabilities of the same corporations. Figures reported in this
appendix are the arithmetic means of all the individual corporation ratios;
that is, the individual corporate ratios are totaled and then divided by the
number of corporations. By averaging the ratios, an equal weight is given
to each individual ratio regardless of the size of the corporation. This
approach avoids the distortion that occurs if an aggregate statistic is dominated by a few large corporations whose characteristics may not be typical
of the majority.
MEASURES OF CORPORATE LIQUIDITY
A corporation's difficulty in meeting its short-term obligations could arise
from a number of causes: (1) a deficiency of cash and other assets which
can be quickly converted into cash; (2) excessive reliance on short-term
sources of funds to finance long-term asset requirements; (3) the absence of
an active market for financial securities often held by corporations as liquid
assets, with the result that these assets lose their marketability or can only
be sold at a large loss; and (4) an inability to arrange for additional financing
to meet maturing liabilities.
This analysis concentrates on whether the first two conditions associated
with a liquidity crisis existed in the first three quarters of 1970. The financial
markets never became so disorganized that active trading of liquid short-term
securities disappeared. While interest rates remained at high levels, measured
in historical terms, and the spread of interest rates on securities with differing
170
default risks widened to reflect a greater sensitivity of lenders to the varying
quality of corporate borrowers, a record volume of corporate financing was
accomplished; and the financial markets remained orderly throughout the
year. The issue of whether or not there was a shortage of the additional
financing needed by corporations, particularly a shortage of short-term
credit, cannot be examined because the aggregate data collected by the Securities and Exchange Commission from corporate balance sheets and income statements do not record items such as "lines of credit" at financial
institutions. Furthermore, the ability of a corporation to arrange for additional credit to meet short-term obligations depends on such nonquantifiable
factors as credit ratings and subjective evaluation of the corporation's future
prospects.
A simple assessment of the adequacy of a corporation's liquidity position
can be made from a detailed examination of its balance sheet and income
statement. The degree of liquidity varies, however, between different types
of assets. Similarly, the need to pay maturing obligations, whenever they
cannot be replaced with new credits, varies between categories of liabilities.
A number of financial ratios must therefore be used to measure the adequacy
of corporate liquidity, particularly when many different corporations are
being compared on an aggregate basis. Although each individual ratio may
present an incomplete picture, a comprehensive set of ratios does summarize most of the information about corporate liquidity that can be obtained from balance sheets and income statements.
The liquidity ratios used in the analysis are as follows (the term "current"
conventionally refers to an asset or liability maturing within 1 year) :
Total Current Assets
(1) The Current Ratio= — - 7 7 ;
^ T . u.r .
v l
Total Current Liabilities
This ratio gives a general description of the liquidity position of a
corporation, showing the extent to which current liabilities are covered by
current assets. Its major weakness is its use of such broad financial categories.
Current asset accounts differ considerably in their convertibility into cash.
Similarly, there is great variation in the characteristics of current liabilities.
Total Current Assets — Inventories
(2) The Acid-Test R a t i o ^
.„
_ . .... .
v
'
Total Current Liabilities
While in certain cases inventories could be readily converted to cash,
such liquidation would normally impair a corporation's ability to carry on
its business.
Cash + Government Securities
(3) The Quick R a t i o - —
.
'
^
Total Current Liabilities
This ratio relates only the most liquid assets to current liabilities. While the
quick ratio is very selective about liquid assets, it does not distinguish between
171
liability accounts. Nor does it take into account other prime sources of
liquidity, such as holdings of commercial paper, prepayments, State and
local government bonds, and short-term holdings of other corporate securities.
(4) The Solvency Ratio=
Cash + Government Securities + Other Current Assets
Total Current Liabilities — Accounts Payable
The solvency ratio compares highly liquid assets to near-term obligations
that do not arise from normal day-to-day business—hence the removal of
accounts payable from the denominator. The category "other current assets" is composed of commercial paper holdings, State and local government
securities, and prepayments, which are all quite liquid. The denominator
focuses on short-term loans, the current portion of long-term debt (payments due within 1 year), and commercial paper obligations.
(5) The Short-Term Debt Ratio=
Short-Term Bank Loans + Other Current Liabilities
Total Current Assets
This debt ratio indicates the extent to which a firm finances its assets with
short-term credit. "Other current liabilities" include commercial paper
borrowing. One source of. difficulty which may have been encountered in
the first half of 1970 is that expectations of a drop in long-term interest rates
led to the use of short-term credit when longer-term instruments should have
been used. A rise in the short-term debt ratio would reflect this development.
HISTORICAL BACKGROUND
Chart A-l summarizes the current and quick ratios for large manufacturing corporations over the period of 1948-69. The liquidity position of these
corporations has shown a downward trend during the last two decades. The
other liquidity ratios analyzed in this appendix have followed the same
pattern. The downward trend reflects three significant developments:
1. Liquidity was high following World War II for a variety of reasons,
and much of the early decline was an adjustment of the enlarged volume of
liquid assets created during the war to the new levels of business activity.
2. The absence of severe depressions since World War II has caused
corporations to reduce cash and liquid assets to a lower proportion of
total assets. With greater confidence in the stability of the economy, corporate
financial managers have been attracted by the profit opportunities of investing such funds in inventories and other forms of working assets. Modern
techniques of short-term portfolio management have also encouraged the
shift from cash balances into short-term marketable securities in response to
rising interest rates.
172
Chart A-l
Liquidity Ratios of Large
Manufacturing Corporations
RATIO (END OF
YEAR)
4
,
2
CURRENT
A
RATIO 1/
-
^ ^
QUICK RATIO2/
/
I
I
1949
I
I
51
I
I
53
I
55
I
I
57
I
I
59
I
I I
61
I
63
)
I
65
I
I
67
I I
69
J/RATIO OF CURRENT ASSETS TO CURRENT L I A B I L I T I E S , NET OF GOVERNMENT ADVANCES.
2 RATIO OF CASH ON HAND AND IN BANKS PLUS U.S. GOVERNMENT SECURITIES, INCLUDING TREASURY
SAVINGS NOTES, TO CURRENT L I A B I L I T I E S , NET OF GOVERNMENT ADVANCES.
NOTE: DATA R E L A T E TO MANUFACTURING CORPORATIONS WITH ASSETS OF $100 MILLION AND OVER.
SOURCES: FEDERAL TRADE COMMISSION AND SECURITIES AND EXCHANGE COMMISSION.
3. The rising rate of inflation after 1965 probably influenced corporations
to shift from cash and other financial assets into inventories and physical
capital assets. This was a preventive measure, aimed at protecting profits
and the real value of assets because during periods of inflation the purchasing power of most financial assets is eroded, but the value of inventories and
physical assets tends to appreciate.
In addition to the basic trend, individual corporations may experience
deterioration in their liquidity positions for reasons beyond their control,
particularly during periods of economic change. The remainder of this
appendix reviews liquidity developments during the 1969-70 period, as
measured by the five liquidity ratios.
BEHAVIOR OF CORPORATE LIQUIDITY: 1969 I THROUGH 1970 III
Measures of corporate liquidity declined steadily from the beginning of
1969 through the first quarter of 1970 and then leveled off (Table A - l ) .
Part of the reduction in the current and acid-test ratios is a continuation of
173
411-364 0—71
12
the postwar trend. However, the restrictive monetary policy in the second
half of 1969, the reduced level of corporate profits in the first half of 1970,
the rapid pace of business investment in plant and equipment throughout
1969 and early 1970, and efforts by corporate management to minimize the
effects of inflation all contributed to the decline. For example, the 6.5-percent
decrease in the current ratio was caused by the more rapid 19.5-percent
growth of current liabilities, compared with only an 11.3-percent expansion
of current assets between the first quarter of 1969 and the third quarter of
1970. An absolute decline in holdings of cash and U.S. Government securities
accounts for much of the change. Corporations were evidently willing to hold
inventories in expectation of future sales at higher prices, or they were
trapped into carrying large stocks when sales volume became sluggish. Inventories of large manufacturing corporations increased 16.6 percent during
the period, while all other current assets increased by only 6.7 percent.
TABLE A-l.—Average liquidity ratios of large manufacturing corporations,
1969 1-1970 III
Liquidity ratio i
1969
Type of ratio
Current
Acid-test
Quick
Solvency
Short-term debt
......
...
1
1970
1
II
III
IV
1
II
III
2.63
1.38
.31
.85
.22
2.60
1.37
.28
.82
.23
2.55
1.35
.26
.76
.23
2.48
1.29
.26
.79
.23
2.45
1.27
.23
.68
.24
2.46
1.27
.23
.68
.25
2.46
1.27
.23
.67
.24
Percentage
change,
1969 1 to
1970 III
-6.5
-8.0
-25.8
-21.2
9.1
1
Averages of individual corporations' ratios for all manufacturing corporations with assets of $100 million and over in
1970 I, when this study began.
Source: Securities and Exchange Commission.
The behavior of the quick ratio and the solvency ratio was very different, and it is the sharp drop in these two ratios that has caused most of the
concern. Both ratios fell because of long-term management policies designed
to minimize holdings of cash and marketable securities, combined with the
decline in cash flows as corporate profits dipped in 1970. Corporate policies
to replenish cash and marketable securities through short- and long-term
financing efforts during the second half of 1970 should stabilize both ratios,
and a stronger corporate profit performance would result in improvement
of both measures. Continuation of an easy monetary policy in 1971 should
enable the banks to meet the credit needs of financially sound borrowers.
The leveling off of business spending for plant and equipment in 1971 and
the traditional lagged response of dividend increases as corporate profits rise
should help curtail cash outflows.
In general, the various liquidity measures for large manufacturing corporations declined during the period, some in line with historical trends,
and others more sharply. However, a more detailed analysis indicates that a
significant part of the decline can be attributed to the reaction of the most
^74
liquid firms to monetary restraint. For each liquidity ratio the entire sample
of firms was divided into two groups, those whose average ratio during the
entire period was below the mean and those whose average ratio was above
the mean (Table A-2). Four of the five ratios show that the firms with
above-average liquidity experienced larger declines in liquidity during the
period than the firms in the below-average category. Because the current
ratio is the least discriminating of these measures of liquidity, its failure to
corroborate the trend does not invalidate the general conclusion. Increases
in the short-term-debt ratio imply a deteriorating liquidity position; hence
firms in the "below-average liquidity" category had short-term debt ratios
above the mean, but they showed a smaller rise in that ratio. While part of
this pattern might be attributed to purely statistical phenomena, the fact
that the below-average liquidity group experienced a less pronounced deterioration in liquidity reduces the severity of the problem.
TABLE A—2.—Percentage change in average liquidity ratios for high and low groups
of large manufacturing corporations, 1969 I to 1970 HI
Percentage change in liquidity ratios, 1969 1
to 1970 III
Liquidity ratio
All firms»
Current
Acid-test
Quick
Solvency
Short-term debt
-6.5
-8.0
-25.8
-21.2
9.1
Firms with
Firms with
above-average below-average
liquidity
liquidity
during 1969 1- during 1969 11970 III
1970 III
-5.2
-8.6
-29.7
-22.8
17.5
-7.6
-6.2
-16.1
-17.1
7.9
i Change in averages of individual corporations' ratios for all manufacturing corporations with assets of $100 million and
over in 1970 I, when this study began.
Source: Securities and Exchange Commission.
Manufacturing Corporations With Low Liquidity Ratios in 1970 I
Although the aggregate data for large manufacturing corporations do not
reveal a major crisis in the liquidity position of the entire sample analyzed,
many individual corporations with relatively low liquid assets and large
current obligations undoubtedly experienced serious problems. A closer
examination of these corporations was undertaken.
Corporations with a quick ratio of 0.06 or less and corporations with a
solvency ratio of 0.15 or less in the first quarter of 1970 were analyzed.
As a result of these cutoff points approximately 10 percent of the sample
group of large manufacturing corporations was included in the followup
study. The quick ratio was chosen as a standard because of its wide use
as an indicator of liquidity and because it focuses only on holdings of quite
liquid assets. Fifty-nine out of the 535 corporations in the sample were found
to have a quick ratio of 0.06 or less. The solvency ratio was useful in identifying corporations with liquidity problems, because it measures the availability of highly liquid assets to cover current liabilities other than accounts
175
payable. Since 28 of the 50 corporations with this characteristic were also
included in the group with a low quick ratio, the net total was 81
corporations.
Table A-3 summarizes the average liquidity and operating ratios for
the special sample of low-liquidity manufacturing corporations. Their
average liquidity position, of course, is lower than the average for the entire
sample of 535 large manufacturing corporations. However, even these
specially selected corporations do not appear to have liquidity problems
serious enough to threaten a crisis. In fact, among the original 535 corporations analyzed in the study, not one bankruptcy was reported. This record is
not too surprising in view of the very large size of these corporations.
TABLE A-3.—Average ratios and operating measures of large manufacturing corporations with a low quick and/or a low solvency ratio in 1970 I, 1969 1—1970 III
1970
1969
Type of ratio or measure
III
Liquidity ratios: i
Current
Acid-test
Quick
Solvency
Short-term debt..
Operating measures: i
Receivables collection period (days).
Inventory turnover (times per year).
Return on equity (percent)
Profit margin (percent)
III
2.19
1.00
.11
.39
.30
2.11
.99
.10
.39
.31
2.07
.98
.10
.38
.31
1.91
.85
.08
.28
.33
1.85
.81
.05
.21
.36
1.87
.84
.07
.24
.36
1.96
.90
.10
.34
.33
55.36
1.11
2.60
3.98
52.83
1.20
2.80
4.08
55.33
1.21
2.78
3.97
53.98
1.17
2.56
3.51
60.99
1.04
2.16
3.23
58.40
1.10
2.16
3.25
61.21
1.12
1.79
2.89
i Average ratio or average operating measure of 81 manufacturing corporations with assets of $100 million and over
in 1970 I and with a low quick ratio (0.06 or less) and/or a low solvency ratio (0.15 or less) in 1970 I.
Source: Securities and Exchange Commission.
Detailed analysis of the balance sheets and income statements of the corporations with either a low quick or a low solvency ratio, or both of these,
identified three general types of financial experience. The first group of corporations (approximately one-quarter of the total) had relatively high
liquidity as measured by the current and acid-test ratios. Many of these
corporations had very low cash balances, however, and virtually no holdings
of U.S. Government securities, a fact which accounts for their very low
quick and solvency ratios. Nevertheless, corporations in this first group had
strong general liquidity positions and high cash flows relative to assets.
Furthermore, the operating ratios of these corporations were generally better
than the average figures for the sample group of 535 manufacturing corporations. The data suggest that this group of corporations reacted to monetary restraint and rising interest rates by reducing their holdings of very
liquid assets and increasing their use of short-term debt financing, without
impairing either their earnings potential or their access to money and capital
markets.
A second group, approximately one-half of the sample of 81 corporations,
can be described as having generally low liquidity positions, but high operating ratios, indicating efficient operations and good profit returns. The average collection period for receivables is generally lower for these corporations than the average for the entire sample of 535 large manufacturing
firms, and their inventory turnover is generally higher. These corporations, as a whole, had no difficulty in arranging necessary financing during
the period examined. Financing difficulties could arise, however, as a result
of severe strains in the money and capital markets. The continued financial
health of these corporations depends in large measure upon stable conditions in the financial markets and a moderate increase in their overall
liquidity.
A third group, which includes approximately one-fourth of the special
sample of low liquidity firms, apparently did experience serious liquidity
problems. Their operating ratios remain low, an indication that the problems facing those corporations are quite distinct from those brought about
by a shortage of liquid assets. Most of the corporations in this group have
low profit margins and low returns, or none at all, on their equity investment. Their average collection period for receivables is generally higher
than the average in their industry, in some cases even three or four times
higher. They also appear to turn over their inventories less frequently
than the average turnover for their industry. These corporations would
undoubtedly have difficulty in arranging new financing in the money and
capital markets. The source of their problems, and their low liquidity position, can more accurately be attributed to their general economic weakness
and their competitive position in their markets than to the impact of monetary restraint on the money and capital markets.
Manufacturing Corporations With Negative Profits in 1970 I
Thirty-nine out of the total of 535 large manufacturing corporations
reported losses in the first quarter of 1970. Table A—4 summarizes the
liquidity ratios and operating ratios of this group. Surprisingly, the average
liquidity position of these corporations appears to be adequate. The current
and acid-test ratios are only slightly lower than those for the entire sample
of large manufacturing corporations, and the amount of decline in these
ratios has been moderate. The fact that the short-term debt ratio is higher
than that for the entire sample of 535 corporations indicates that these
corporations, along with the group of low-liquidity corporations referred to
in Table A-3, rely heavily on short-term financing. The maintenance of
stability in the money markets, particularly in the commercial paper market,
is important for the continued viability of these corporations.
177
TABLE A-4.—Average ratios and operating measures of large manufacturing corporations with a negative return on equity in 1970 I, 1969 1-1970 III
1969
1970
Type of ratio or measure
Liquidity ratios: l
Current
Acid-test
Quick
Solvency
Short-term debt_.
Operating measures:l
Receivables collection period (days).
Inventory turnover (times per year).
Return on equity (percent)
Profit margin (percent)
III
IV
III
2.47
1.22
.23
.72
.24
2.29
1.16
.21
.63
.25
2.28
1.19
.22
.71
.25
2.33
1.18
.22
.67
.27
2.28
1.12
.20
.62
.30
2.25
1.14
.19
.65
.28
2.18
1.13
.20
.77
.28
54.62
1.30
.94
1.42
49.61
1.49
1.54
2.70
51.38
1.54
.85
1.63
50.90
1.48
.31
61.77
1.14
-1.19
-2.24
54.70
1.37
-.51
-.15
52.54
1.46
.31
.33
1
Average ratio or average operating measure of 39 manufacturing corporations with assets of $100 million and over
in 1970 I that reported a negative return on equity in 1970 I.
Source: Securities and Exchange Commission.
CONCLUSION
This study suggests that the deterioration of corporate liquidity during
1969 and 1970 has been generally moderate for the group of large manufacturing corporations analyzed. There was some decline in the aggregate
liquidity ratios but not enough to approach the crisis zone. To the extent
that the sample of large manufacturing firms is not completely representative of all business firms this general conclusion might have to be qualified.
Small businesses as well as firms in certain nonmanufacturing industries
may have had more liquidity problems than is indicated in this analysis.
Furthermore, the severe difficulties experienced by some of the large manufacturing corporations in the analysis are concealed within the general averages. Nevertheless, during the period under review, when there was growing public concern about business liquidity, the responsibility for evaluating
the situation and taking necessary policy actions needed to avert a genuine
liquidity crisis was assumed by the appropriate agencies of the Government.
Continued study of the money and financial markets, and the role of Government agencies in improving the operation of these markets will be a vital
part of the future development of the economy.
Appendix B
REPORT TO THE PRESIDENT ON THE ACTIVITIES OF THE
COUNCIL OF ECONOMIC ADVISERS DURING 1970
LETTER OF TRANSMITTAL
COUNCIL OF ECONOMIC ADVISERS,
Washington, D.C., December 31,1970.
T H E PRESIDENT:
SIR : The Council of Economic Advisers submits this report on its activities
during the calendar year 1970 in accordance with the requirements of the
Congress, as set forth in Section 4 (d) of the Employment Act of 1946.
Respectfully,
PAUL W.
MCCRACKEN,
Chairman.
HENDRIK S. HOUTHAKKER.
HERBERT STEIN.
181
Report to the President on the Activities of the
Council of Economic Advisers During 1970
The Council of Economic Advisers was established by the Employment
Act of 1946 as part of the Executive Office of the President. The Council
is responsible for analyzing economic conditions and formulating policies
that will achieve long-term goals of "maximum employment, production,
and purchasing power." As advisers to the President on economic matters,
the Council in 1970 devoted its professional capabilities to a wide range
of issues.
The Council formed February 4, 1969, following a change of Administration, remains intact with Paul W. McCracken as Chairman and
Hendrik S. Houthakker and Herbert Stein as Members. Mr. McCracken
is on leave of absence from the University of Michigan, where he is Edmund
Ezra Day University Professor of Business Administration. Mr. Houthakker
is on leave of absence from Harvard University, where he is Professor of
Economics. Mr. Stein came to the Council from his post as Senior Research
Fellow at the Brookings Institution.
Below is a list of all past Council Members and their dates of service:
Name
Edwin G. Nourse
Leon H. Keyserling
John D. Clark
Roy Blough
Robert C. Turner
Arthur F. Burns
N e i l H . Jacoby
Walter W . S t e w a r t
Raymond J. Saulnier
Joseph S. Davis
Paul W. McCracken
Karl Brandt
Henry C. Wallich
James Tobin
Kermit Gordon
Walter W. Heller
Gardner Ackley
John P. Lewis
Otto Eckstein
Arthur M. Okun
James S. Duesenberry
Merton J. Peck
Warren L. Smith
Position
Oath of office date
Separation date
Chairman
Vice Chairman
Acting Chairman
Chairman
Member
Vice Chairman
Member
Member
Chairman
Member
Member
Member
Chairman
Member
Member
Member
Member
Member
Member
Chairman..
Member
Chairman
Member
Member
Member
Chairman
Member
Member
Member
.
August 9, 1946
August 9 , 1 9 4 6
November 2, 1949
May 10, 1950
August 9, 1946
May 10, 1950
June 2 9 , 1 9 5 0
September8, 1952
March 19, 1953
September 15,1953
December 2, 1953
April 4, 1955
December 3, 1956
May 2, 1955
December 3, 1956
November 1, 1958.
May 7, 1959
January 2 9 , 1 9 6 1
January 2 9 , 1 9 6 1
January 2 9 , 1 9 6 1
August 3, 1962
November 16, 1964
May 17, 1963
September 2, 1964
November 16,1964
February 15, 1968
February 2, 1966
February 15, 1968
July 1, 1968 -
November 1,1949.
-
183
January 20,1953.
February l h , 1953.
August 20, 1952.
January 2 0 , 1 9 5 3 .
December 1, 1956.
February 9, 1955.
April 29,1955.
January 2 0 , 1 9 6 1 .
October 3 1 , 1958.
January 3 1 , 1959.
January 20, 1961.
January 2 0 , 1 9 6 1 .
July 3 1 , 1962.
December 27,1962.
November 15, 1964.
February 15,1968.
August 3 1 , 1964.
February 1,1966.
January 20, 1969.
June 30,1968.
January 20, 1969.
January 20,1969.
ECONOMIC POLICY MAKING AND THE COUNCIL OF
ECONOMIC ADVISERS
RESPONSIBILITIES OF THE COUNCIL
The Employment Act of 1946 describes the objectives of national economic policy as "creating and maintaining, in a manner calculated to foster
and promote free competitive enterprise and the general welfare, conditions under which there will be afforded useful employment opportunities."
The basic responsibility of the Council is to advise the President concerning Federal activities to achieve that goal. Statistical analyses of economic
conditions and of the results of stabilization policies are an important part
of the assignment, along with the preparation of economic forecasts, using
a variety of analytical tools. Final output of all Council activities is presented
in personal consultations with the President, in communications from the
Chairman to the President, in presentations to the Cabinet and Domestic Affairs Council, and in reports to other Executive Offices and the Congress.
While the Employment Act specifically directs the Council "to appraise
the various programs and activities of the Federal Government," this function is largely an internal operation. The Council staff constantly works
with other agencies to assist the Administration in developing new legislative programs and in appraising existing activities. It also makes recommendations to the Administration concerning pending legislation. In 1970,
the Council prepared responses to legislative referrals involving 180 bills. In
preparing these recommendations the Council considers the broader viewpoint of the general public and the effects on the entire economy. Specifically, the Council helped formulate new Administration programs relating
to manpower training and development, unemployment compensation, national emergency strikes, housing and community development, regional economic development, welfare and social security, health, education, consumer
interests, agriculture, trade policies, transportation systems, protection of
the physical environment, Federal credit programs, financial institutions,
and assistance to small business. In addition, the Council and its staff contributed to numerous interagency efforts to improve Federal Government
programs, policies, and procedures in such diverse areas as the regulation
of financial institutions; meat and dairy import restrictions; international
finance; expansion of exports; foreign investment; development of natural
resources; transportation systems and their regulation; Federal procurement policies; use of national land; Federal sponsorship of research; programs in health and education; national problems concerning energy; antitrust; telecommunications; resource stockpiling; studies of basic industries,
such as copper; environmental programs; and many others.
184
POLICY COORDINATION
The broad range of economic policy issues confronting the Council requires it to work very closely with other Government officials. There is
especially close coordination between the Treasury Department, the Office
of Management and Budget, and the Council of Economic Advisers. Approximately once each week the Secretary of the Treasury, Director of the
Office of Management and Budget, and Chairman of the Council meet
to discuss the economic situation, Federal budget matters, and broad economic policy issues. This is the group known as the "Troika." A second
tier consists of one of the other Council Members, the Economist for the
Office of Management and Budget, and the Assistant Secretary of the Treasury for Economic Policy. A third tier, consisting of senior staff economists
from the three agencies, meets frequently to appraise the economic situation and its policy implications. The outlook is summarized in memoranda
which they prepare and clear through the second tier of the "Troika" for
use by the principals. The "Troika" meets with the President frequently.
From time to time the Chairman of the Board of Governors of the Federal
Reserve System participates in these meetings, forming the "Quadriad."
The Cabinet Committee on Economic Policy, established by Executive
Order of the President on January 24, 1969, provides for coordination of
economic policies within the Executive Office. Members include the
President; the Vice President; the Secretaries of the Treasury, Agriculture,
Commerce, Labor, and Housing and Urban Development; Mr. Moynihan,
Counselor to the President in 1970; the Director of the Office of Management and Budget; the Deputy Under Secretary of State for Economic Affairs;
and the Chairman of the Council of Economic Advisers (who coordinates
the work of the Committee).
This Committee considers a broad spectrum of economic issues, such as
interest rate ceilings for financial institutions, national housing requirements,
establishment of a commission to review Federal statistics, lumber and plywood resources, post-Vietnam economic planning, the copper industry, agricultural trade, antitrust, operation of capital markets, transportation, and
Federal budgeting procedures.
Council Members participate in a number of other Cabinet and interagency committees. In 1970, the Chairman served as Chairman of the
Cabinet Committee on Construction and of the Domestic Affairs Council
Subcommittee on the National Energy Situation. The Chairman is a member of the Domestic Affairs Council and several of its various subcommittees,
the Property Review Board, the National Commission on Productivity, the
Regulations and Purchasing Review Board, and the Defense Programs
Review Committee. He also attends meetings of the National Security
Council when agenda items require his attention.
The other two Council Members and the Senior Staff Economists also
participate in the task forces and study groups designated by these committees. The Chairman of the Council regularly attends Cabinet meetings.
The Council has a particularly close association with the Joint Economic
Committee of the Congress, which was created by the Employment Act of
1946 "to make a continuing study of matters relating to the Economic Report" and to contribute to the achievement of the economic objectives of
that Act. During 1970, the Council testified three times before the Joint
Economic Committee. On February 16, the Council presented testimony
following submission of the Economic Report to Congress. The Joint Economic Committee is required by the Act to file a report to Congress by
March 1, evaluating the recommendations and content of the Economic
Report. On June 15, Mr. Stein testified before the Joint Economic Committee Subcommittee on Economy in Government Hearings on Changing
National Priorities. On July 20, the Chairman reviewed economic conditions
and the outlook before the Joint Economic Committee. Council Members
also presented testimony to Congress four other times during 1970. On
February 9, the Council presented testimony to the House Committee on
Banking and Currency concerning national housing objectives. The same
day the Chairman appeared before the House Committee on Appropriations. On March 3, Mr. Houthakker presented testimony to the National
Commission on Product Safety. And on October 6, Mr. Stein appeared
before the House Select Committee on Small Business, Subcommittee on
Special Small Business Problems, to discuss the national energy situation.
At the international level, Council Members and staff are active in meetings of the Economic Policy Committee of the Organization for Economic
Cooperation and Development. The Chairman leads the U.S. delegation
to the Economic Policy Committee and serves as its Vice Chairman. This
Committee attempts to improve the mutual understanding and coordination
of domestic economic policies among member nations. Council Members
and Senior Staff Economists also participated in several Economic Policy
Committee subcommittees, including Working Party III on the balance of
payments and international financial problems, the Working Group .on
Short-Term Economic Prospects, Working Party II on policies for the
promotion of long-term economic growth, the Manpower and Social Affairs
Committee considering manpower policies in member countries, and a
new committee created by the Organization for Economic Cooperation and
Development to study environmental problems. In 1970, Council personnel
attended 14 international meetings.
PUBLICATIONS
The annual Economic Report is the major publication through which the
Council explains economic policies to the general public. About 52,000
copies of the February 1970 Economic Report have been distributed. The
186
Statistical Office of the Council also prepares Economic Indicators, a monthly
publication issued by the Joint Economic Committee. The current circulation of Economic Indicators is approximately 10,000 copies. On August 7,
the Council published its first Inflation Alert, which summarized the historical relationship of wages, prices, and productivity, reviewed changes
in the major wage and price indexes during the first half of 1970, and
evaluated several major wage and price decisions made during that time
period. The second Inflation Alert was released on December 1.
PUBLIC CONTACTS
During 1970, the Council continued to hold periodic meetings with
groups of academic, business, and labor union economists to exchange views
on economic policies. Many individual businessmen and labor leaders, students, educators, foreign visitors, news media representatives, and interested
citizens have also visited with Council Members to discuss a wide range of
economic issues. Finally, to communicate Council viewpoints concerning
current economic conditions and necessary policy decisions, Council Members
and the Special Assistant to the Chairman made a substantial number of
speeches throughout the year and participated in frequent interviews with
representatives of all types of news media.
ORGANIZATION AND STAFF OF THE COUNCIL
OFFICE OF THE CHAIRMAN
As stipulated in the Employment Act, as amended by Reorganization
Plan No. 9 in 1953, the Chairman is responsible for reporting the Council's
views to the President. The Chairman fulfills this charge through direct
conferences with the President and reports describing current developments
and economic policy requirements. The Chairman also represents the Council at Cabinet meetings; at congressional briefings; in U.S. delegations to
international activities; in meetings with the Chairman of the Federal
Reserve System and Chairman of the Federal Home Loan Bank Board;
in sessions of the "Troika" and "Quadriad" and as the chairman of numerous
Cabinet and interagency committees; in the coordination of professional
staff activities; and in contacts with other Government offices.
COUNCIL MEMBERS
Specific professional activities are directed by the other two Council Members. While the Council is not departmentalized, and all three Members
frequently work together on major projects, there is an informal division
of responsibilities by subject area. Mr. Houthakker's responsibilities include
direction of staff assignments covering such matters as international finance
and trade policy, foreign aid and economic development, agriculture, transportation, telecommunications, industrial organization and antitrust, labor
relations, long-term economic growth, consumer affairs, natural resources,
technology, and environmental problems. He also supervises the preparation
of Inflation Alert.
Mr. Stein's responsibilities include forecasting and analyses of economic
conditions, medium-term economic projections, fiscal policy and taxation,
Federal budget concepts and reform, Federal credit programs, monetary
policy, financial institutions, housing and urban affairs, welfare and social
security problems, problems relating to education, health, manpower, and
human resources, as well as national defense programs and the problems of
transition from a wartime to a peacetime economy.
In addition, Mr. Houthakker and Mr. Stein represent the Council at a
wide variety of official gatherings, including meetings of the Cabinet Committee on Economic Policy, the Cabinet Committee on Construction, and
the Economic Policy Committee of the Organization for Economic Cooperation and Development. The entire Council meets frequently with the Board
of Governors of the Federal Reserve System. One of the Members is always
designated as Acting Chairman when the Chairman is absent.
PROFESSIONAL STAFF
At the end of 1970, the professional staff included 14 Senior Staff Economists, two Statisticians, six Junior Economists, and one Research Assistant.
Each member of the professional staff is responsible for economic analysis
and policy recommendations in a major subject area involving Council
interests. In addition, the staff economists carry out many different Council
and interagency assignments requiring a broad application of their general
knowledge and analytical skills. The professional staff and their special
fields are:
Senior Staff Economists
John D. Darroch
Murray F. Foss
Sidney L. Jones
Marvin H. Kosters
Irene Lurie
Edward J. Mitchell
Michael H. Moskow
Sam Peltzman
Rudolph G. Penner
Frank C. Ripley
Gary L. Seevers
William L. Silber
T. Nicolaus Tideman
Marina v. N. Whitman
Industry Problems and Prices.
Economic Analysis and Forecasting.
Special Assistant to the Chairman.
Labor Economics and Manpower Programs.
Welfare and Social Programs.
Industry Problems and Natural Resources.
Labor Economics and Manpower Programs.
Industry Problems, Regulation, and Environment.
Fiscal Policies and Foreign Aid.
Economic Analysis and Forecasting.
Agricultural Programs and Policies.
Money and Capital Markets.
Urban Economics and Construction.
International Finance and Trade.
188
Statisticians
Frances M. James
Catherine H. Furlong
Senior Statistician.
Statistician.
Junior Staff Economists
Christine H. Branson
William R. Keeton
Robert A. Kelly
David C. Munro
Lydia Segal
J. Michael Swint
Money and Capital Markets.
International Finance and Trade.
Transportation, Natural Resources, and Housing.
Economic Analysis and Forecasting.
Economic Analysis and Forecasting.
Fiscal Policies.
Research Assistant
Joanne M. Nusrala
Labor Economics and Manpower Programs.
Frances M. James, Senior Staff Statistician, is in charge of the Council's
Statistical Office. Miss James has major responsibility for managing the
Council's economic and statistical information system. She also supervises
the preparation of Economic Indicators for publication, the preparation of
tables and charts for a wide variety of meetings throughout the year and
for the Economic Report, and the fact checking of memoranda, speeches,
and testimony. Assisting Miss James are Teresa D. Bradburn, Catherine H.
Furlong, V. Madge McMahon, and Natalie V. Rentfro.
The Council also conducts a student intern program, employing a limited
number of outstanding students of economics, both graduate and undergraduate for various periods, particularly during the summer months. The
1970 interns were Victoria A. Dailey (University of Virginia), Michael C.
Deppler (Georgetown University), Ronald G. Ehrenberg (Northwestern
University), Richard J. Herring (Princeton University), and Charles F.
Revier (Massachusetts Institute of Technology). Professor Raymond G.
Lloyd (Tennessee A. and I. State University) also joined the staff during
the summer.
At the end of 1970 the list of economists serving as active consultants
to the Council included William H. Branson (Princeton University), John
T. Dunlop (Harvard University), Ray C. Fair (Princeton University),
Milton Friedman (University of Chicago), Alan Greenspan (TownsendGreenspan & Co.), Gottfried Haberler (Harvard University), Arnold C.
Harberger (University of Chicago), George W. Hilton (University of California, Los Angeles), George Katona (University of Michigan), Stephen P. Magee (University of California, Berkeley), Thomas G. Moore
(Michigan State University), Saul Nelson (private consultant), David J.
Ott (Clark University), Ezra Solomon (Stanford University), George J.
Stigler (University of Chicago), Stephen J. Tonsor (University of Michigan), Lloyd Ulman (University of California, Berkeley), Thomas D. Willett (Harvard University), and G. Paul Wonnacott (University of
Maryland).
189
411-364 0—17
13
SUPPORTING STAFF
The Administrative Office coordinates the activities of all supporting
personnel responsible for preparation and analysis of the Council's budget,
procurement of equipment and supplies, processing of legislative referrals,
distribution of Council speeches, reports, and congressional testimony,
and responding to correspondence and inquiries from the general public.
Mr. James H. Ayres serves as Administrative Officer, assisted by Nancy F.
Skidmore, Elizabeth A. Kaminski, Margaret L. Snyder, and Bettye T. Siegel.
The duplicating, messenger, and mail department is operated by James W.
Gatling, Judson A. Byrd, and A. Keith Miles.
Secretarial staff members are Daisy S. Babione, Mayme Burnett, Mary
Catherine Fibich, Elizabeth F. Gray, Dorothy L. Green, Lillie M. Hayes,
Laura B. Hoffman, Bessie M. Lafakis, Patricia A. Lee, Karen J. MacFarland,
Eleanor A. McStay, Joyce A. Pilkerton, Dorothy L. Reid, Earnestine Reid,
Linda A. Reilly, and Alice H. Williams.
In preparing this Economic Report, the Council relied upon the editorial
skills of Rosannah C. Steinhoff.
DEPARTURES
The Council's professional staff is drawn primarily from universities and
research institutions. Economists are normally selected to serve for 1 or
2 years. Senior Staff Economists who resigned during the year were William
H. Branson (Princeton University), Phillip D. Cagan (Columbia University), Harold O. Carter (University of California, Davis), Charles E.
McLure, Jr. (Rice University), Thomas G. Moore (Michigan State University), Saul Nelson, Robert J. Rene de Cotret (Ministry of Finance,
Canada), ThomasD. Willett (Harvard University), and G. Paul Wonnacott
(University of Maryland). Mr. Albert H. Cox, Jr. also resigned from the
position of Special Assistant to the Chairman. Junior Economists who
resigned in 1970 were Leslie J. Barr, Paul N. Courant, and Rosemary D.
Marcuss. Research Assistants Karen J. Horowitz, Barry M. Levenson, and
Timothy B. Sivia also resigned. Other resignations included Patricia C.
Byfield and Betty Lu Lowry, Secretaries, and Christine L. Johnson from
the Statistical Office.
190
Appendix C
STATISTICAL TABLES RELATING TO INCOME,
EMPLOYMENT, AND PRODUCTION
CONTENTS
National income or expenditure:
G-l. Gross national product or expenditure, 1929-70
G-2. Gross national product or expenditure, in 1958 prices, 1929-70
C-3. Implicit price deflators for gross national product, 1929-70
C-4. Gross national product by major type of product, 1929-70
G-5. Gross national product by major type of product, in 1958 prices,
1929-70
C-6. Gross national product: Receipts and expenditures by major economic
groups, 1929-70
C-7. Gross national product by sector, 1929-70
C-8. Gross national product by sector, in 1958 prices, 1929-70
C-9. Gross national product by industry, in 1958 prices, 1947-69
.
C-10. Personal consumption expenditures, 1929-70
C-l 1. Gross private domestic investment, 1929-70
C-12. National income by type of income, 1929-70
C-l 3. Relation of gross national product and national income, 1929-70. . . .
C-14. Relation of national income and personal income, 1929-70
C-15. Disposition of personal income, 1929-70
G-l 6. Total and per capita disposable personal income and personal consumption expenditures, in current and 1958 prices, 1929-70
C-17. Sources of personal income, 1929-70
G-18. Sources and uses of gross saving, 1929-70
G-19. Saving by individuals, 1946-70
C-20. Number and money income (in 1969 prices) of families and unrelated
individuals, by race of head, 1947-69
Population, employment, wages, and productivity:
C-21. Population by age groups: Estimates, 1929-70, and projections,
1975-85
C-22. Noninstitutional population and the labor force, 1929-70
C-23. Civilian employment and unemployment, by sex and age, 1947-70. .
C-24. Selected unemployment rates, 1948-70
C-25. Unemployment by duration, 1947-70
C-26. Unemployment insurance programs, selected data, 1940-70
C-27. Wage and salary workers in nonagricultural establishments, 1929-70.
C-28. Average weekly hours of work in private nonagricultural industries,
1929-70
C-29. Average gross hourly earnings in private nonagricultural industries
and in agriculture, 1929-70
C-30. Average gross weekly earnings in private nonagricultural industries,
1929-70
C-31. Average weekly hours and hourly earnings, gross and excluding overtime, in manufacturing industries, 1939-70
C-32. Average weekly earnings, gross and spendable, total private nonagricultural industries, in current and 1967 prices, 1947-70
C-33. Average weekly earnings, gross and spendable, in manufacturing
industries, in current and 1967 prices, 1939-70
C-34. Indexes of output per man-hour and related data, private economy,
1947-70
193
Page
197
198
200
202
203
204
206
207
208
209
210
211
212
213
214
215
216
218
219
220
221
222
224
225
226
227
228
230
231
232
233
234
235
236
Production and business activity:
C-35. Industrial production indexes, major industry divisions, 1929—70
C-36. Industrial production indexes, market groupings, 1947—70
C-37. Industrial production indexes, selected manufactures, 1947-70
C-38. Manufacturing output, capacity, and utilization rate, 1948-70
C-39. Business expenditures for new plant and equipment, 1947-71
C-40. New construction activity, 1929-70
C-41. New housing starts and applications for financing, 1929—70
C—42. Sales and inventories in manufacturing and trade, 1947—70
C—43. Manufacturers' shipments and inventories, 1947—70
C—44. Manufacturers' new and unfilled orders, 1947—70
Prices:
G-45.
C-46.
C-47.
C-48.
C-49.
C—50.
Consumer price indexes, by major groups, 1929-70
Consumer price indexes, by special groups, 1935-70
Consumer price indexes, selected commodities and services, 1935-70. .
Wholesale price indexes, by major commodity groups, 1929-70
Wholesale price indexes, by stage of processing, 1947-70
Percentage changes from previous month in indexes for major
groupings of the consumer price index, 1968—70
C—51. Percentage changes from previous month in indexes for major
groupings of the wholesale price index, 1968-70
Money stock, credit, and finance:
C-52. Money stock, 1947-70
C-53. Bank loans and investments, 1930-70
C—54. Total funds raised in credit markets by nonfinancial sectors, 1962—70..
C-55. Selected liquid assets held by the public, 1946-70
C-56. Federal Reserve Bank credit and member bank reserves, 1929-70
C-57. Bond yields and interest rates, 1929-70
C-58. Short- and inter mediate-term consumer credit outstanding, 1929-70. .
C-59. Instalment credit extended and repaid, 1946-70
C—60. Mortgage debt outstanding, by type of property and of financing,
1939-70
C-61. Mortgage debt outstanding, by lender, 1939-70
C-62. Net public and private debt, 1929-69
Government finance:
C-63. Federal budget receipts and outlays, 1929-72
C—64. Federal budget receipts, outlays, financing, and debt, 1961—72
C-65. Relation of the Federal budget to the Federal sector of the national
income and product accounts, 1969-72
C—66. Receipts and expenditures of the Federal Government sector of the
national income and product accounts, 1948-72
C-67. Public debt securities by kind of obligation, 1946-70
C-68. Estimated ownership of public debt securities, 1939-70
C—69. Average length and maturity distribution of marketable interestbearing public debt, 1946-70
C-70. Receipts and expenditures of the government sector of the national
income and product accounts, 1929-70
C-71. Receipts and expenditures of the State and local government sector of
the national income and product accounts, 1946-70
C—72. State and local government revenues and expenditures, selected fiscal
years, 1927-69
194
Page
237
238
239
240
241
242
244
246
247
248
249
250
251
252
254
256
257
258
259
260
262
263
264
266
267
268
269
270
271
272
274
275
276
277
278
279
280
28 1
Corporate profits and
finance:
C-73. Profits before and after taxes, all private corporations, 1929-70
C—74. Sales, profits, and stockholders' equity, all manufacturing corporations (except newspapers), 1947-70
G-75. Relation of profits after taxes to stockholders' equity and to sales, all
manufacturing corporations (except newspapers), by industry group,
1949-70
C-76. Sources and uses of funds, nonfarm nonfinancial corporate business,
1959-69
C-77. Current assets and liabilities of U.S. corporations, 1939-70
C-78. State and municipal and corporate securities offered, 1934-70
C-79. Common stock prices, earnings, and yields, and stock market credit,
1939-70
C-80. Business formation and business failures, 1929-70
Page
282
283
284
286
287
288
289
290
Agriculture:
C-81.
C-82.
C-83.
C-84.
Income of farm people and farmers, 1929-70
Farm production indexes, 1929-70
Farm population, employment, and productivity, 1929-70
Indexes of prices received and prices paid by farmers, and parity ratio,
1929-70
C-85. Selected measures of farm resources and inputs, 1929-70
C-86. Comparative balance sheet of the farming sector, 1929-71
291
292
293
294
296
297
International statistics:
C-87. U.S. balance of payments, 1946-70
C-88. U.S. merchandise exports and imports, by commodity groups,
1958-70
:
C-89. U.S. merchandise exports and imports, by area, 1964-70
C—90. U.S. overseas loans and grants, by type and area, fiscal years,
1962-70
C-91. International reserves, 1949, 1953, and 1965-70
C-92. U.S. reserve assets, 1946-70
C-93. Price changes in international trade, 1962-70
C-94. Consumer price indexes in the United States and other major industrial countries, 1957-70
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).
195
298
300
301
302
303
304
305
306
NATIONAL INCOME OR EXPENDITURE
TABLE CM.—Gross national product or expenditure, 1929-70
(Billions of-dollars]
Total
pross
Year or quarter
national
product
Personal
consumption
Government purchases of goods and services^
expenditures^
domestic
investment*
Net
exports
of goods
and
services'
Gross
private
Federal
Total
Total
National
defense«
Other
State
and
local
103.1
77.2
16.2
1.1
8.5
1.3
1. 3
7.2
1930
1931..
1932.
1933
1934
1935.
1936.
1937
1938
1939
90.4
7*.8
58.0
55.6
65.1
72.?
*7.5
90.4
84.7
90.5
69.9
60.5
4R.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
.5
.4
.4
.6
.1
.1
.3
1.3
1.1
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
1.2
1. 4
1. 5
1. 5
2.0
3. 0
2.9
4. 9
4. 7
5. 4
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
1943
1944...
99.7
174. R
157.9
191.6
210.1
211.9
20*. 5
231.3
257.6
256.5
70. R
80.6
8R.5
99.3
10S.3
119.7
149.4
1*0.7
173.6
176.8
13.1
17.9
9.8
5.7
7.1
10.6
30.6
34.0
46.0
35.7
1.7
1.3
.0
-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
284.8
378.4
345. 5
364.6
364.8
39*. 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
67.9
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
1963
1964
1965
19B6
1967
1968
1969
503.7
520.1
560.3
590.5
63?. 4
684.9
749.9
7P3.9
865.0
931.4
375. 2
335.2
355.1
375.0
401,2
4*>. 8
466.3
497.1
535.8
577.5
74.8
71.7
83.0
87.1
94.0
108.1
121.4
116.6
126.5
139.8
4.0
5.6
5.1
5.9
8.5
6.9
5.3
5.2
2.5
1.9
99.6
107.6
117.1
122.5
128.7
137.0
156.8
180.1
200.2
212.2
53.5
57.4
63.4
64.2
65.2
66.9
77.8
90.7
99.5
101.3
44.9
47.8
51.6
50.8
50.0
50.1
60.7
77.4
78.0
78.8
8.6
9.6
11.8
13.5
15.2
16.8
17.1
18.4
21.5
22.6
46.1
50.2
53.7
58.2
63.5
70.1
79.0
89.4
100.7
110.8
1970"
976.8
616.8
135.8
3.6
220.5
99.7
76.6
23.1
120.8
1929.....
1945..
1946
1947
1948
1949
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
-
I960...
1961
1962
Seasonally adjusted annual rates
834.9
858.1
875.8
891.4
519.7
529.1
543.8
550.8
119.8
127.3
126.5
132.6
1.8
3.4
3.4
1.4
193.6
198.3
202.1
206.7
96.4
98.9
100.7
101.9
76.3
77.8
78.6
79.2
20.1
21.1
22.1
22.7
97.2
99.4
101.4
104.7
1969' L
IL.
III.
IV..
907.6
923.7
942.6
951.7
561.8
573.3
582.1
592.6
136.0
139.3
143.8
140.2
1.3
1.3
2.6
2.6
208.5
209.9
214.1
216.3
100.9
99.8
102.5
102.1
78.6
77.9
79.8
78.8
22.4
21.9
22.7
23.3
107.5
110.1
111.6
114.2
1970: I.
II..
III.
959.5
971.1
985.5
990.9
603.1
614.4
622.1
627.6
133.2
134.3
138.3
137.5
3.5
4.1
4.2
2.7
219.6
218.4
221.0
223.2
102.3
99.7
98.6
98.4
79.3
76.8
75.8
74.6
23.0
22.9
22.9
23.8
117.4
118.7
122.4
124.8
1968: I
III..
IV
'See Table C-10 for detailed components.
'See Table C-ll for detailed components.
»See Table C-6 for exports and imports separately.
< Net of Government sales.
• This category corresponds closely to the national defense classification in the "Budget of the United States Government for the-f iscal Year ending June 30,1972."
Source: Department of Commerce, Office of Business Economics.
197
TABLE C-2.—Gross national product or expenditure, in 1958pricesy 1929-70
[Billions of dollars, 1958 prices]
Personal consumptio
expenditures
Year or
quarter
otal
jross
naional
roduct
Gross private domestic investment
Fixed investment
Total
Durable
goods
NonduraLI
Die
goods
Nonresidential
Services
Total
Total
Total
Structures
Producers'
durable
equipment
Residential
structures
Change
in businessinventories
!03.6
139.6
16.3
69.3
54.0
40.4
36.9
26.5
13.9
12.6
1930..
1931..
1932._
1933..
1934..
1935..
1936..
1937..
1938..
1939..
83.5
.69.3
.44.2
41.5
54.3
69.5
.93.0
!03.2
92.9
109.4
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
12.1
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
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
81.8
84.8
87.8
91.1
94.8
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
25.8c
24.
27.7
28.8
29.1
25.0
27.9
23.5
19.5
18.9
19.6
21.7
22.2
20.2
20.8
24.7
-2.0
6.4
4.8
1.2
-1.5
4.8
I960....
1961
1962
1963
1964....
1965....
1966....
1967...
1968 ...
1969
487.7
497.2
529.8
551.0
581.1
617.8
658.1
675.2
707.2
727.1
316.1
322.5
338.4
353.3
373.7
397.7
418.1
430.1
452.3
467.7
44.9
43.9
49.2
53.7
59.0
66.6
71.7
72.9
81.4
84.9
149.6
153.0
158.2
162.2
170.3
178.6
187.0
190.2
196.5
201.2
121.6
125.6
131.1
137.4
144.4
152.5
159.4
167.0
174.4
181.6
72.4 68.9
69.0 67.0
79.4 73.4
82.5 76.7
87.8 81.9
99.2 90.1
109.3 95.4
101.2 93.5
105.7 98.8
111.3 104.1
47.1
45.5
49.7
51.9
57.8
66.3
74.1
73.2
75.5
80.8
17.4
17.4
17.9
17.9
19.1
22.3
24.0
22.6
22.7
24.0
29.6
28.1
31.7
34.0
38.7
44.0
50.1
50.6
52.7
56.9
21.9
21.6
23.8
24.8
24.2
23.8
21.3
20.4
23.3
23.3
3.5
2.0
6.0
5.8
5.8
9.0
13.9
7.7
6.9
7.2
1970 v
724.3
477.2
82.1
207.9 187.3 103.0
79.3
23.1
56.2
20.6
3.1
1929..
99.3
136.2 104.1
138. V 108.0
140.2 112.0
146.8 116.8
99.9
10.4
25.1
3.5
-L9
-2.9
10.0
-.2
4.6
-3.9
8.3
10.9
3.3
.9
Seasonally adjusted annual rates
76.1
73.8
74.9
77.1
23.4
22.3
22.3
22.9
52.7
51.5
52.6
54.3
22.9
23.8
22.8
23.9
2.4
9.5
7.4
8.5
103.6
104.8
104.2
103.9
79.3
80.2
81.9
82.1
23.8
23.1
24.6
24.3
55.4
57.0
57.3
57.8
24.3
24.7
22.3
21.8
6.1
6.6
9.9
6.1
102.9 101.5
103.1 100.1
104.1 99.6
101.8 98.3
80.9
80.2
79.6
76.6
24.4
23.5
22.6
21.8
56.5
56.7
56.9
54.8
20.7
20.0
20.0
21.7
1.3
2.9
4.6
3.5
1968: I . —
II...
III..
IV...
693.5
705.4
712.6
717.5
445.0
448.4
457.7
458.1
78.1
80.2
83.9
83.2
195.5
194.9
197.9
197.6
171.3
173.2
175.9
177.4
1969: I...
II..
III..
IV..
722.1
726.1
730.9
729.2
463.3
467.1
468.7
471.7
84.9
85.7
84.1
84.9
199.7
200.9
201.9
202.4
178.7
180.5
182.7
184.4
109.7
111.5
114.1
110.0
1970: I...
II..
III.
IV P.
723.8
724.9
727.4
721.3
474.0
478.1
479.6
477.1
82.7
84.9
83.6
77.1
205.6
206.6
208.2
211.2
185.8
186.6
187.8
188.8
' 101.3 98.9
107.1 97.6
105.1 97.7
109.5 101.0
See footnotes at end of table.
198
TABLE C-2.—Gross national product or expenditure, in 1958 prices,
1929-70—Continued
[Billions of dollars, 1958 prices]
Net exports of goods and services
Government purchasesl of goods and
services
Year or quarter
Net
exports
Exports
Imports
Total
Federal
State and
local
1.5
11.8
10.3
22.0
3.5
18.5
1930
1931
1932
1933
1934
1935
1936
1937
1938
1939
14
.9
.6
.0
.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
1940
1941
1942
1943
1944
1945
1946
1947
1948
1949
2 1
4
-2.1
-5.9
-5 8
-3.8
8.4
12 3
61
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
53
3 0
1.1
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
1969.
4.3
5.1
4.5
5.6
8.3
6.2
4.2
3.6
.9
.2
27.3
28.0
30.0
32.1
36.5
37.4
40.2
42.1
45.7
48.5
23.0
22.9
25.5
26.6
28.2
31.2
36.1
38.5
44.8
48.2
94.9
100.5
107.5
109.6
111.2
114.7
126.5
140.2
148.3
147.8
51.4
54.6
60.0
59.5
58.1
57.9
65.4
74.7
78.7
75.7
43.5
45.9
47.5
50.1
53.2
56.8
61.1
65.5
69.6
72.1
1970 i>
2.3
52.2
49.9
141.8
67.7
74.1
1929
.
Seasonally adjusted annual rates
1968: 1
II
Ml
IV
1969: 1
II
III
IV
1970:
1
II
III
IV v
0.8
1.5
1.5
-.2
43.8
45.4
47.8
45.6
43.1
43.9
46.3
45.8
146.4
148.5
148.3
150.0
77.5
79.1
78.9
79.4
68.9
69.4
69.4
70.6
-.4
-.3
.8
.9
42.3
50.7
50.8
50.0
42.6
51.1
50.0
49.1
149.5
147.9
147.3
146.6
78.0
75.8
75.2
73.8
71.5
72.1
72.1
72.9
1.9
2.4
3.1
1.9
52.0
52.9
52.0
51.8
50.1
50.5
48.9
50.0
145.0
141.3
140.6
140.5
71.1
67.8
66.2
65.8
73.8
73.5
74.4
74.7
i Net of Government sales.
Source: Department of Commerce, Office of Business Economics.
199
TABLE C-3.—Implicit price deflators for gross national product, 1929-70
[Index numbers, 1958=1001
Gross private domestic investmentl
Personal consumDtion
expenditures
Year or quarter
Fixed investment
Total
gross
national
Nonresidential
ucti
Total
Durable
goods
Nondurable
goods
Services
Total
Total
Structures
Producers'
durable
equipment
Residential
structures
1929
50.64
55.3
56.4
54.5
56.1
39.4
39.9
35.7
44.6
38.1
1930
49.26
44.78
40.25
39.29
42.16
42.62
42.73
44.50
43.88
43.23
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
33.6
27.3
27.1
30.1
29.8
31.3
34.3
35.5
35.7
43.87
47.22
53.03
56.83
58.16
59.66
66.70
74.64
79.57
79.12
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
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
1956
1957
1958
1959
80.16
85.64
87.45
88.33
89.63
. .
90.86
93.99
97.49
. . . . 99.97
101.66
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
196*
1964
1965
1966
1967
1968
103.29
104.62
105.78
107.17
108.85
110.86
113.95
117.59
122.31
100.9
100.6
100.8
100.4
100.4
99 6
98.7
100.3
103.3
106.0
101.2
101.9
102.8
104.0
104.9
106.9
110.7
113.0
117.1
122.2
105.8
107.6
109.0
110.9
113.1
115.1
118.3
122.2
127.1
133.1
103.4
103.9
104.9
106.0
107.6
109.3
111.8
115.9
120.4
126.2
102.9
103.4
104.1
104.5
105.7
107.5
110.2
113.8
117.5
122.8
104.0
105.6
107.1
108.9
111.1
114.7
118.9
124.0
130.3
141.1
102.2
102.1
102.3
102.3
103.0
103.9
106.0
109.3
111.9
115.1
104.5
105.0
106.7
108.9
112.3
114.2
117.4
123.1
129.7
137.7
109.0
127.3
140.3
132.4
129.4
152.2
120.0
144.0
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
1969
128.11
102.9
103.9
104.9
106.1
107.4
108.8
111.5
114.4
118.5
123.5
1970*
134.86
129.2
88.1
93.4
98.6
100.0
102.7
37.1
59.7
71.7
80.8
78.5
Seasonally adjusted
1968: 1
II
III
IV
.. .
1969: 1
if
III
IV
1970: 1
II
III
IV v
120.39
121.65
122.90
124.25
116.8
118.0
118.8
120.2
102.3
102.9
103.4
104.6
115.4
116.8
117.5
118.8
125.0
126.4
127.6
129.1
118.4
119.9
121.1
122.1
116.1
117.0
117.9
118.8
127.5
129.6
131.7
132.6
111.1
111.6
112.1
113.0
126.0
128.6
131.5
132.5
125.68
127.22
128.97
130.52
121.3
122.8
124.2
125.6
105.0
105.7
106.4
107.0
119.8
121.5
122.9
124.5
130.6
132.3
133.8
135.5
124.2
125.4
127.1
128.0
120.7
121.6
123.9
125.1
136.8
139.5
143.3
144.7
113.7
114.4
115.6
116.8
135.5
137.4
138.9
139.3
132.57
133.98
135.50
137.39
127.2
128.5
129.7
131.5
107.8
108.2
109.2
110.8
125.9
127.1
127.7
128.6
137.3
139.3
141.1
143.3
129.6
131.0
133.3
135.6
126.8
128.2
130.2
132.4
146.4
150.0
154.8
158.5
118.4
119.2
120.4
122.0
140.6
142.4
145.7
147.1
See footnotes at end of table.
200
TABLE C-3.—Implicit price deflators for gross national product, 1929—70—Continued
[Index numbers, 1958=100]
Exports and imports of
goods and services 1
Government purchases of goods
and services
Gross national product by
sector
Year or quarter
Exports
Imports
Total
Federal
State and
local
Private *
General
government
1929
59.5
57.3
38.6
36.0
39.1
51.73
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
50.45
45.67
40.91
39.92
43.01
43.51
43.45
45.33
44.65
43.93
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
44.69
48.66
55. 51
60.85
62.02
62.59
68.25
76.27
81.40
80.60
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
81.41
87.35
88.99
89.65
90.77
91.57
94.53
97 92
99.97
101.41
67.1
70.5
74.4
76.6
79.5
84.0
88.7
93.3
100.0
104.2
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
99.9
101.9
100.8
100.6
101.5
104.7
107.7
109.7
110.9
114.6
101.0
100.1
98.5
99.5
101.5
103.4
105.6
106.5
107.5
111.1
105.0
107.1
109.0
111.8
115.7
119.4
124.0
128.5
135.0
143.5
104.?
105,2
105.6
108.0
112.2
115.5
118.8
121.5
126.4
133.9
105.9
109.4
113.2
116.3
119.5
123.5
129.4
136.4
144.7
153.7
102 76
103.73
104.73
105 80
107 05
108 83
111.56
114.79
118.92
124.22
108.6
113.6
116.6
121.5
128.4
133.5
140.3
147.7
159.1
170.8
1970i»
119.5
117.7
155.5
147.3
163.1
130.12
186.6
. ..
Seasonally adjusted
108.9
111.8
111.2
111.5
106.6
107.8
107.5
108.1
132.2
133.5
136.3
137.8
124.4
125.0
127.6
128.4
141.1
143.3
146.1
148.3
117.22
118.38
119.37
120.66
154.5
157.1
161.1
163.6
1969: 1
II
Ill
IV
113.0
112.7
114.6
117.7
109.0
109.5
111.2
114.5
139.5
141.9
145.4
147.5
129.5
131.7
136.3
138.4
150.4
152.6
154.9
156.7
122.08
123.55
124.90
126.32
165.4
167.6
173.6
176.5
1970: 1
II
Ill
IV*
117.5
118.8
120.8
120.8
114.9
116.2
119.9
119.9
151.5
154.6
157.2
158.9
143.8
147.0
149.1
149.5
158.9
161.5
164.5
167.2
127.96
129.24
130.73
132. 55
182.9
185.9
187.9
189.9
1968: 1
II
III..
IV
» Separate deflators are not available for total gross private domestic investment, change in business inventories, and
net exports of goods and services.
> Gross national product less compensation of general government employees. See also Tables C-7 and C-8.
Source: Department of Commerce, Office of Business Economics.
201
TABLE C-4.—Gross national product by major type of product, 1929-70
{Billions of dollars]
Goods output
Year or
quarter
1970 p . . . .
Total
gross
national
product
Durable goods
Total
Final
sales
Final
Total sales
Final
Total sales
Nondurable goods
II Total
I
Final
sales
1.4 38.5 38.2
103.1
101.4
1.7
56.1
54.3
1.7
17.5
16.1
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
ill
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
29.2
28.6
35.1
38.8
44.5
48.9
46.2
48.6
-.4
-1.1
-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
9.0
5.7
5.4
7.3
8.9
'.3
11.2
.9
13.1
.8
10.8 - . 9
12.4
.3
99.7
124.5
157.9
191.6
210.1
211.9
208.5
231.3
257.6
256.5
97.5
120.1
156.2
192.2
211.1
213.0
202.1
231.8
252.9
259.6
2.2
4.5
1.8
-.6
-1.0
-1.0
6.4
-.5
4.7
-3.1
56.0
72.5
93.6
120.4
132.3
128.9
124.9
139.7
154.2
147.5
53.
68.0
91.9
121.0
133.3
129.9
118.5
140.1
149.4
150.5
2.2
4.5
1.8
-.6
-1.0
-1.0
6.4
284.8
328.4
345.5
364.6
364.8
398.0
419.2
441.1
447.3
483.7
278.0 6.8 162.4 155.6 6.8
318.1 10.3 189.7 179.4 10.3
342.4 3.1 195.6 192.5 3.1
204.1 203.7
.4
364.1
197.1 198.6 - 1 . 5
366.4
392.0 6'.0 216.4 210.4 6.0
414.5 4.7 225.4 220.7 4.7
439.8 1.3 234.6 233.3 1.3
448.8 - 1 . 5 230.8 232.3 - 1 . 5
478.9 4.8 249.1 244.4 4.8
503.7
520.1
560.3
590.5
632.4
684.9
749.9
793.9
865.0
931.4
500.2 3.6 259.6 256.0 3.6 99.5 97.4 2.1 160.1 158.6
518.1 2.0 262.3 260.2 2.0 96.5 96.6 - . 1 165.8 163.7
554.3 6.0 284. r 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
735.1 14.8 383.3 368.5 14.8 156.7 146.2 10.5 226.6 222.3
785.7 8.2 398.9 390.7 8.2 1.61.1 156.5 4.7 237.7 234.2
857.4 7.6 430.6 422.9 7.6 176.1 170.4 5.7 254.5 252.5
922.9 8.5 460.0 451.6 8.5 190.2 183.9 6.4 269.8 267.7
976.8
973.2
3.6 474.1 470.5
16.6
26..
35.5
54.2
57.9
48.9
36.9
46.0
A. 7 48.7
-3.1 47.8
60.4
73.7
74.6
79.4
72.1
85.7
90.3
94.4
83.6
95.6
"I
35.5
29.7
23.1
22.1
27.0
30.6
33.6
37.6
35.4
36.3
Gross
Serv- Struc- auto
ices tures product
S
0.3
35.1
11.4
34.8
.7
29.6
.1
23.6 - . 4
23.2 -1.1
27.8 - . 9
29.9
.7
33.3
35.8 \.S
35.4
.0
36.2
.1
34.2
31.7
27.5
25.7
27.1
28.3
31.0
32.3
33.2
34.0
9.2
6.7
3.8
2.9
3.
4.0
5.6
6.7
6.2
7
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
2.7 87.0
3.4 101.2
2.0 110.8
118.8
l'.O 123.5
2.9 132.6
1.9 142.3
.0 154.2
1.3 163.4
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
187.3
199.5
213.3
226.2
244.2
262.9
289.
316.5
347.1
377.6
56.8
58.3
62.6
65.7
68.8
74.8
77.5
78.6
87.4
93.8
21.4
17.9
22.5
25.1
25.8
31.8
30.0
28.9
36.1
36.6
4.0 410.3
92.4
31.0
15.4 1.2 39.3 38.4
23.8 3.0 45.6 44.2
34.5 1.0 58.1 57.4
54.2
.0 66.2 66.8
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
48.0
105.5 101.5
49.9 - 2 . 1 99.7 100.6
56.3 4.1 102.0 99.3
66.8 6.9 116.0 112.6
73.5 1.1 121.0 119.1
78.5
.9 124.8 125.2
74.6 - 2 . 5 125.0 124.1
82.7 3.0 130.7 127.7
87.5 2.8 135.1 133.2
93.1 1.3 140.2 140.2
86.4 - 2 . 8 147.2 145.9
93.2 2.3 153.6 151.1
3.6 185.0 185.3 - . 4 289.1 285.2
1.0
1.4
.7
-.6
-.3
l!i
-2.2
4.0
-1.0
2.1
3.2
3.1
1.6
3.0
4.3
3.5
2.0
2.1
Seasonally adjusted annual rates
1968: I . . .
IIIII.
IV..
834.9
858.1
875.8
891.4
832.3 2.6 414.2 411.6 2.6 167.7 165.2
847.8 10.4 428.2 417.8 10.4 175.1 168.0
867.6 8.2 437.2 429.0 8.2 178.9 173.1
882.1 9.3 442.6 433.3 9.3 182.6 175.3
1969: I . . .
IIIII.
IV
907.6
923.7
942.6
951.7
900.2 7.4 448.3
915.9 7.9 456.7
931.2 11.3 466.2
944.5 7.2 468.9
1970: I
II...
III..
IV P.
959.5
971.1
985.5
990.9
957.9
968.1
980.0
986.8
1.6
3.1
5.5
4.1
467.1
474.9
479.8
474.5
246.5
253.0
258.3
260.0
246.4
249.8
255.9
258.0
0.1
3.2
2.4
2.1
334.7
343.1
352.2
358.4
86.0
86.8
86.3
90.5
34.2
36.6
36.5
37.2
440.9 7.4 186.1
448.8 7.9 189.4
454.9 11.3 192.7
461.7 7.2 192.7
180.5
182.7
184.8
187.4
5.6
6.7
7.9
5.3
262.1
267.3
273.5
276.2
260.4
266.1
270.1
274.3
1.8
1.2
3.5
1.9
364.8
372.3
383.0
390.3
94.5
94.8
93.3
92.5
38.2
34.8
37.6
35.8
465.5
471.8
474.2
470.4
185.5 - . 3
188.5 - 1 . 9
188.3 5.2
179.0 - 4 . 5
281.8
288.3
286.3
300.0
280.0
283.3
286.0
291.4
1.9
5.0
.3
8.6
400.1
405.8
413.2
422.2
92.3
90.4
92.6
94.2
31.1
35.4
34.7
22.7
1.6
3.1
5.5
4.1
185.3
186.6
193.5
174.5
Source: Department of Commerce, Office of Business Economics.
2.5
7.1
5.8
7.2
2O2
TABLE C-5.—Gross national product by major type of product, in 1958 prices, 1929-70
(Billions of dollars, 1958 prices)
Goods output
Year or
quarter
Total
gross
national
product
Final
sales
Total
Is
Durable goods
Final
Total sales
| |
Final
Total sales
|l
Nondijrable g
Final
Total sales
Serv- Strucices tures
I!
Gross
auto
product
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
29.1
23.4
27.0
-2.1
-3.0
-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
4.9
96
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
43.5 6.6
54.4 2.9
.4
85.2
97.4 - 1 . 5
87.4 - 3 . 1
46.1 8.6
58.6 1.5
60.0 1.2
61.0 - 3 . 0
88.4
93.4
100.9
101.7
108.8
113.7
117.4
112.2
117.1
116.2
86.2
90.3
99.7
102.4
109.3
113.6
116.0
113.8
113.8
117.1
2.2
3.1
1.2
-.6
-.4
.2
1.4
-1.7
3.3
-.9
80.0
89.8
107.7
131.8
144.0
144.3
113.3
106.5
109.3
112.4
23.2
30.5
31.9
17.9
12.4
12.9
27.2
31.2
3R 1
37.5
10.3
11.4
14.8
355.3
383.4
395.1
412.8
407.0
438.0
446.1
452.5
447.3
475.9
347.0
8.3 192.6 184.3 8.3
372.5 10.9 208.4 197.5 10.9
391.8
3.3 214.0 210.7 3.3
411.8
.9 225.4 224.5
.9
409.0 - 2 . 0 215.1 217.1 - 2 . 0
431.6
6.4 236.1 229.7 6.4
441.2
4.8 239.0 234.2 4.8
451.2
1.2 239.8 238.5 1.2
448.8 - 1 . 5 230.8 232.3 - 1 . 5
471.1
4.8 247.7 242.9 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
.0 160.1
95.0 1.2 143.6 143.6
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
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
487.7
497.2
529.8
551.0
581.1
617.8
658.1
675.2
707.2
727.1
484.2
495.2
523.8
545.2
575.2
608.8
644.2
667.5
700.3
719.9
176.6
184.0
193.7
200.9
210.8
221.9
236.3
249.1
760.0
268.2
55.0
55.8
58.8
60.4
61.6
65.2
65.0
63.0
66.6
66.6
21.0
17.5
22.0
24.7
25.5
31.8
30.6
29.0
35.3
35.0
1970 v
724.3
721.2
3.5 274.5
61.3
28.7
2.7 262.1
1.6 263.1
67.1
66.7
64.9
67.4
33.6
35.9
35.7
35.9
3.5 103.9 100.4
1929
203.6 200. 1
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
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
222.3
4.9
254.1
9.6
4.0
293.8
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....
-.6
-2.4
-6.2
-4.3
-2.7
2.4
3.1
5.5
-2.4
1.2
3.5
2.0
6.0
5.8
5.8
9.0
13.9
7.7
6.9
7.2
124.0
143.4
158.1
187.4
204.8
198.0
172.1
172.2
178.4
174.2
756.0
257.3
277.3
289.7
308.6
330.7
356.8
363.1
380.7
392.2
119.0
133.8
154.1
187.6
206.7
201.0
162.1
172.4
173.8
178.1
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
302.8 5.8 174.6 120.4
321.7 9.0 136.5 130.1
347.9 13.9 151.8 141.9
355.4 7.7 152.2 148.0
373.8 6.9 162.1 157.1
385.0 7.2 170.1 164.7
3.1 388.5 385.4
—S 1
2.0
.0
2.8
2.8
4.1
6.5
9.8
4.3
5.1
5.3
3.1 160.2 160.5 - . 4
158.2
162.3
170.3
175.6
184.1
194.2
205.1
2^.9
218.6
222.1
156.7
160.3
167.2
172.5
182.3
191.6
701.0
207.4
216.7
220.3
228.4 224.9
1.5
2.0
3.1
3.1
1.7
2.6
4.1
3.5
1.8
1.8
Seasonally adjusted annual rates
693.5
705.4
712.6
717.5
691.1
695.9
705.2
709.0
2.4
9.5
7.4
370.5
379.8
385.6
8.5 387.0
368.2
370.3
378.2
378.5
2.4
9.5
7.4
8.5
156.0
161.8
164.1
166.7
153.7
155.4
159.4
159.8
c
2.3 214.
6.5 217.9
4.7 221. *
6.9 220.4
214.5
214.9
2^.8
218.7
0.0 255.8
3.0 258.9
1969:1....
II...
III..
IV...
722.1
726.1
730.9
729.2
716.1
719.4
720.9
723.0
6.1
6.6
9.9
6.1
382.4
384.5
385.8
387.4
6.1
6.6
9.9
6.1
168.4
170.0
171.6
170.3
163.6
164.5
164.9
165.9
4.8 220.1
5.5 221.1
6.7 ?24.1
4.4 223.3
218.8
220.0
220.9
221.5
1.3
1.1
3.2
1.8
264.7
267.2
269.8
271.3
68.9
67.8
65.4
64.4
36.9
33.3
35.8
33.9
1970:1....
II...
III..
IV r .
723.8
724.9
727.4
721.3
722.4
721.9
722.8
717.8
1.3 387.3 3«6.0
2.9 391.1 388.2
4.6 392.1 387.5
3.5 383.6 380.1
223.4
223.8
224.7
227.6
1.6
4.5
.2
7.5
273.1
272.8
274.8
277.2
63.4
60.9
60.5
60.5
29.2
33.2
32.1
20.3
1968:1....
ll_._
III..
IV...
388.5
391.1
395.7
393.5
1.3 162.3 162.6 - . 3
2.9 162.9 164.4 - 1 . 5
4.6 167.1 162.7 4.3
3.5 148.5 152.5 - 4 . 0
Source: Department of Commerce, Office of Business Economics.
203
225.1
228.3
225.0
235.2
TABLE C-6.—Gross national product: Receipts and expenditures by major economic groups,
1929-70
[Billions of dollars]
Persons
Government
Disposable personal
income
Net receipts
Expenditures
PerPersonal sonal
Equals:
conTax
Less:
Less: Equals:
Total sump- saving and
TransTransPurexcludfers,
tion
nonEquals:
fers,
Total
chases
and
disinterininterex- saving
tax
Net
exof
Total» trans- ing
est,
est,
terest pendirerependigoods
fer
and
and
and
tures
ceipts
ceipts
tures
and
paysubor ac- subservments transsidies 3 ices
fers
cruals sidies 3
to foreigners
Less:
Interest
Year or
quarter
1929
83.3
1 9
81 4
77 2
42
11 3
1 8
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
7
.7
.6
7
.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
21
36
3 8
.7
26
10
9
8
9
10
11
12
15
15
15
1
3
2
2
3
3
4
3
3
4
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 l
.8
.8
.8
1 0
1.4
1.8
2.2
24
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
73
13.4
9 4
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
29
3 1
3.5
4 3
4.6
51
59
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
I960
1961
1962
1963
1964
1965
1966
1967
1968
1969
350.0
364 4
385.3
404.6
438 1
473.2
511.9
546.3
591.2
631.6
7.8
8 1
8.6
9.7
10 7
12.0
13.0
13.9
15.0
16.5
342.3
356 3
376.6
394.9
427 4
461.3
498.9
532.4
576.2
615.1
1970*.
684.7
17.9
666.8
.
9 5
10 3
1 8
9
1
6
7
1
4
1
2
8
2
89
6 3
6 3
67
74
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
19
3 1
26
27
3.1
3 4
41
32
3 8
42
17 7
25 0
32 6
49 2
51.2
53 2
50 9
56 8
58.9
56 0
44
40
44
47
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
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
325.2
335 2
355.1
375.0
401 2
432.8
466 3
492.1
535.8
577.5
17.0
21 2
21 6
19.9
26 2
28 4
32 5
40.4
40.4
37.6
139.8
144 6
157.0
168.8
174 1
189.1
213.3
228.9
263.3
298.7
36.5
41 3
42.8
44.4
46 7
49.9
55.5
62.8
70.5
77.9
616.8
50.0
303.4
92.4
8
5
9
3
5
4
9
4
0
4
8 5
Surplus
or
deficit
(-),
national
in-
come
and
product accounts
1 0
2
2
1
0
8
0
0
9
0
3
_ 3
29
—1 8
—1 4
-2 4
—2 0
—3 1
3
—1 8
—2 2
4.4
40
44
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
54
14.4
8.5
—3 2
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
27
4.9
7
-12.5
-2.1
103.3
103 3
114.2
124.3
127 3
139.2
157.9
166.2
192.8
220.8
136.1
149.0
159.9
166.9
175 4
186.9
212.3
242.9
270.7
290.1
36.5
41.3
42.8
44.4
46.7
49.9
55.5
62.8
70.5
77.9
99.6
107.6
117.1
122.5
128.7
137.0
156.8
180.1
200.2
212.2
3.7
-4.3
-2.9
1.8
—1.4
2.2
1.1
-13.9
-7.3
8.7
211.0
313.0
92.4
220.5
-9.6
260.5
268.2
273.9
280.1
283.5
287.4
292.3
297.0
301.5
314.5
315.3
320.6
66.9
70.0
71.8
73.5
75.1
77.4
78.3
80.8
81.8
96.1
94.3
97.4
193.6
198.3
202.1
206.7
208.5
209.9
214.1
216.3
219.6
218.4
221.0
223.2
-10.7
-11.2
-4.5
-2.9
7.7
11.8
8.0
7.1
-1.2
-10.9
-11.2
9
9
8
8
9
10
12
11
13
13
Seasonally adjusted annual rates
1968: I . . . .
II-..
lit
IV
1969: L . . .
II....
III...
IV...
1970: L . . .
II....
III...
IV»_.
574.9
588.4
595.6
606.0
612.0
623.0
640.6
650.6
665.3
683.6
693.0
696.9
14.4
14.8
15.3
15.6
16.0
16.4
16.7
16.9
17.3
17.8
18.2
18.5
560.5
573.6
580.3
590.4
596.0
606.6
623.9
633.7
648.0
665.8
674.8
678.4
519.7
529.1
543.8
550.8
561.8
573.3
582.1
592.6
603.1
614.4
622.1
627.6
40.8
44.6
36.5
39.6
34.3
33.3
42.0
41.1
44.8
51.5
52.7
50.9
249.7
257.0
269.4
277.2
291.2
299.2
300.4
304.1
300.2
303.6
304.2
See footnotes at end of table.
204
66.9
70.0
71.8
73.5
75.1
77.4
78.3
80.8
81.8
96.1
94.3
97.4
182.8
187.0
197.6
203.7
216.1
221.8
222.1
223.3
218.4
207.4
209.9
T A B L E C-6.—Gross national product:
Receipts and expenditures by major economic groups,
1929- 70—Continued
[Billions of dollars]
Business
Year
or
quarter
Gross
Gross
prirevate
tained domesearntic
ings 3 investment*
International
Transfers to
forExcess eigners
by perof insons
vestand
ment
Government
Net exports of goods
and services
Exports
Less:
Imports
2.4
2.6
2.7
2.8
2.8
2.8
2.8
3.0
2.8
2.8
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
43.4
46.2
50.6
55.5
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
48.1
53.6
-37.2
2.9
62.3
58.7
119.8
127.3
126. 5
132.6
-28.3
-31.0
-28.7
-35.8
2.5
2.7
3.0
3.1
47.7
50.7
53.2
50.9
45.9
47.3
49.8
49.5
96.5
97.4
99.1
96.0
136.0
139.3
143.8
140.2
-39.4
-41.9
-44.7
-44.2
2.4
3.2
2.8
2.9
47.8
57.2
58.3
58.8
95.7
97.9
99.1
133.2
134.3
138.3
137.5
-37.5
-36.4
-39.2
2.8
3.0
2.8
2.9
61.1
62.8
62.8
62.6
1929..
11.2
16.2
-5.1
0.4
1930..
193L.
1932..
1933..
1934..
1935..
1936..
1937..
1938..
1939..
8.6
5.3
3.2
3.2
5.2
6.4
6.7
7.7
8.0
8.4
10.3
5.6
1.0
1.4
3.3
6.4
8.5
11.8
6.5
9.3
-1.6
-.3
2.2
1.8
1.9
.0
-1.8
-4.0
1.6
-.9
.3
.3
.2
.2
.2
.2
.2
.2
.2
.2
1940..
1941..
1942..
1943..
1944..
1945..
1946..
1947..
1948..
1949..
10.5
11.4
14.5
16.3
17.1
15.1
14.5
20.2
28.0
29.7
13.1
17.9
9.8
5.7
7.1
10.6
30.6
34.0
46.0
35.7
-2.7
-6.5
4.6
10.6
10.0
4.6
-16.1
-13.8
-18.0
-6.0
.2
.2
.2
.2
.3
.8
2.9
2.6
4.5
5.6
1950..
1951..
1952..
1953..
1954..
1955..
1956..
1957..
1958..
1959..
29.4
33.1
35.1
36.1
39.2
46.3
47.3
49.8
49.4
56.8
54.1
59.3
51.9
52.6
51.7
67.4
70.0
67.9
60.9
75.3
-24.7
-26.2
-16.8
-16.5
-12.5
-21.1
-22.8
-18.1
-11.5
-18.5
4.0
3.5
2.5
2.5
2.3
2.5
2.4
2.3
2.4
2.4
I960..
1961..
1962..
1963..
19fi4_.
1965..
1966..
1967.
1968.
1969.
56.8
58.7
66.3
68.8
76.2
84.7
91.3
93.0
95.6
97.3
74.8
71.7
83.0
87.1
94.0
108.1
116.6
126.5
139.8
-18.0
-13.0
-16.8
-18.4
-17.8
—2"? 4
-30.1
-23.5
-31.0
-42.5
1970 P .
98.6
135.8
1968: I . . .
II..
III.
IV..
91.5
96.3
97.8
96.8
1969: I . .
II..
HI.
IV..
1970: I . . .
Equals:
Net
exports
1.1
1.0
.5
.4
.4
.6
.1
.1
Excess
of
transfers
or
of net
exports
Total Statisincome tical
disor recrepceipts
ancy
Gross
national
product
or expenditure
()
-0.8
102.4
0.7
103.1
-.7
-.2
-.2
-.2
-.4
.1
.1
-. 1
-1.1
-.9
91.2
75.1
57.7
55.0
64.5
72.5
81.3
90.5
84.1
89.2
-.8
.7
.3
.6
.5
-.2
1.2
.0
.6
1.3
90.4
75.8
58.0
55.6
65.1
72.2
82.5
90.4
84.7
90.5
-1.5
-1.1
.2
2.2
2.1
1.4
-4.6
-8.9
-1.9
-.5
98.7
124.1
159.0
193.6
207.6
208.0
208.4
230.4
259.5
256.2
1.0
99.7
124.5
157.9
191.6
210.1
211.9
208.5
231.3
257.6
256.5
2.2
-.2
.3
2.1
.5
.5
-1.5
-3.4
.2
2.3
283.3
325.1
343.3
361.6
362.1
395.9
420.4
441.1
445.8
484.5
1.5
3.3
2.2
3.0
2.7
2.1
-1.1
.0
1.6
-.8
284.8
328.4
345.5
364.6
364.8
398.0
419.2
441.1
447.3
483.7
-1.7
-3.0
-2.5
-3.1
-5.7
-4.1
-2.4
-2.2
.3
.9
504.8
520.8
559.8
590.8
633.7
688.0
750.9
794.6
867.4
936.1
-1.0
-.8
.5
-.3
-1.3
-3.1
-1.0
-.7
-2.4
-4.7
503.7
520.1
560.3
590.5
632.4
684.9
749.9
793.9
865.0
931.4
-.7
979.3
-2.5
976.8
1.8
3.4
3.4
1.4
0.7
-.7
-.4
1.7
837.3
859.6
878.7
894.0
-2.5
-1.6
-2.9
-2.6
834.9
858.1
875.8
891.4
46.5
55.9
55.6
56.2
1.3
1.3
2.6
2.6
1.1
2.0
.1
.3
911.0
929.0
947.9
955.9
-3.6
-5.3
-5.5
-4.3
907.6
923.7
942.6
951.7
57.6
58.7
58.6
59.9
3.5
4.1
4.2
2.7
7
-ill
-1.2
.2
964.9
974.1
986.7
-5.4
-3.1
-1.1
959.5
971.1
985.5
990.9
l!3
1.1
1.7
1.3
.0
-2.0
-1.8
-.6
7.5
11.5
6.4
6.1
1.8
3.7
2.2
.4
1.8
2.0
4.0
5.7
2.2
.1
4.0
5.6
5.1
5.9
8.5
6.9
5.3
5.2
2.5
1.9
3.6
-l!l
-2.0
2.5
3.9
.1
.9
-2.0
Seasonally adjusted annual rates
III.
1 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,
subsidies less current surplus of government enterprises, and disbursements less wage accruals.
3
Undistributed corporate profits, corporate inventory valuation adjustment, capital consumption allowances, and
private wage accruals less disbursements.
* Private business investment, purchases of capital goods by private nonprofit institutions, and residential housing.
See Table C - l l .
5
Net foreign investment less capital grants received by the United States, with sign changed.
Source: Department of Commerce, Office of Business Economics.
205
411-364 0 — 7 1 -
-14
TABLE C-7.—Gross national product by sector, 1929-70
[Billions of dollars]
Gross private product l
Total
gross
national
product
Year or
quarter
Business
Total
Nonfarm 2
Total
1929
1930
1931
1932
1933
1934
1935
1936
1937
1938
1939 .
1940
1941
1942
1943
1944
1945
1946
1947
1948
1949
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
.
.
..
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970 v
._.
Farm
Households
ad
Institutions
Rest of
the world
Gross
government
product*
103.1
98.8
95.1
85.4
9.7
2.9
0.8
4.3
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
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
10
1.0
7.8
9.4
15.1
25 6
32.2
35.2
20.8
16 7
17 4
19.4
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
69
7.2
7.8
8.1
9.1
9.8
10.5
11.4
12.2
1.2
13
1.3
1.3
1.6
1.8
2.1
2.2
2.0
2.2
?0.9
27 4
31 2
31.9
32.5
34.2
36.6
39.1
42.1
44.3
503.7
520.1
560.3
590.5
632.4
684.9
749.9
793.9
865.0
931.4
456.3
469.2
505.7
532.4
569.4
617.1
673.3
708.8
770.1
827.8
440.7
452.3
487.4
513.0
548.2
594.4
648.9
681.6
740.1
795.4
420.2
431 4
466.2
491.5
527.6
570.8
624.0
657.0
714.6
767.9
20 5
20 9
21.2
21 5
20.6
23.7
24.9
24.6
25.5
27.5
13.2
14.0
15.0
16.0
17.3
18.5
20.2
22.8
25.3
28.1
2.4
2.9
3.3
3.4
4.0
4.2
4.1
4.5
4.7
4.3
47 5
50 9
54.7
58 1
63.0
67.8
76 6
85.1
94.9
103.6
976.8
863.5
828.6
800.5
28.1
30.3
4.6
113.3
Seasonally adjusted annual rates
1968: 1
II
III
IV
834.9
858.1
875.8
891.4
743.8
764.4
778.9
793.4
714.7
734.0
749.0
762.9
689.7
709.0
723.4
736.5
24.9
25.0
25.6
26.4
24.9
25.5
25.1
25.6
4.3
5.0
4.8
4.9
91.1
93.7
96.9
98.0
1969: 1
II
ill
IV
907.6
923.7
942.6
951.7
808.2
822.3
836.6
844.0
776.2
790.3
804.2
810.8
749.1
762.7
776.6
783.0
27.1
27.6
27.6
27.8
27.4
27.8
28.3
29.0
4.6
4.2
4.1
4.2
99.4
101.4
106.0
107.7
1970: 1 . . .
II.
Ill
IV P . . . .
959.5
971.1
985.5
990.9
848.5
858.4
871.7
875.4
814.3
824.5
836.5
839.0
785.5
796.0
808.5
811.9
28.8
28.5
28.0
27.1
29.6
30.0
30.5
31.1
4.5
3.9
4.7
5.2
111.0
112.8
113.9
115.6
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.
* Compensation of general government employees.
Source: Department of Commerce, Office of Business Economics.
206
TABLE C-S.—Gross national product by sector, in 1958 prices, 1929-70
[Billions of dollars, 1958 prices]
Gross private product1
Year or
quarter
Total
gross
national
product
Business
Tntal
1 OT3I
Nonfarm2
Total
Farm
Households
and
institutions
Rest of
the world
Gross
government
product*
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
35<\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
^24.2
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
1960
1961
1962...
1963...
1964...
1965...
1966...
1967...
1968...
1969...
487.7
497.2
529.8
551.0
581.1
617.8
658.1
675.2
707.2
727.1
444.0
452.3
482.9
503.2
532.0
567.0
603.5
617.5
647.6
666.4
429.5
436.9
46$. 7
486.6
514.4
548.9
584.9
597.8
627.2
646.0
407.6
414.8
444.6
463.8
492.1
525.2
562.5
573.9
603.4
622.5
21.9
22.2
22.1
22.8
22.3
23.7
22.4
23.9
23.8
23.6
12.2
12.4
12.9
13.2
13.7
14.0
14.6
15.4
15.9
16.4
2.3
2.9
3.4
3.4
3.9
4.1
3.9
4.3
4.5
4.0
43.7
44.8
46.9
47.8
49.1
50.8
54.6
57.6
59.7
60.7
1970 P . .
724.3
663.6
642.8
619.6
23.1
16.6
4.3
60.7
31.1
38.8
41.8
41.7
40.9
40.7
41.3
41.9
42.1
42.5
Seasonally adjusted annual rates
1968: I.
II
Ill
IV
693.5
705.4
712.6
717.5
634.5
645.7
652.5
657.5
614.6
624.9
632.2
637.1
590.4
601.7
608.6
612.9
24.2
23.2
23.5
24.2
15.9
16.1
15.7
15.8
4.1
4.7
4.6
4.7
58.9
59.7
60.1
59.9
1969: I.
II
Ill
IV
722.1
726.1
730.9
729.2
662.1
665.6
669.8
668.1
641.5
645.3
649.7
647.6
616.7
622.0
626.2
624.7
24.7
23.3
23.5
22.8
16.3
16.3
16.3
16.6
4.3
3.9
3.8
4.0
60.1
60.5
61.0
61.1
1970: I.
II
III....
IV v.. _
723.8
724.9
727.4
721.3
663.1
664.2
666.8
660.4
642.1
644.0
645.9
639.1
619.5
621.0
622.9
615.1
22.6
23.0
22.9
24.0
16.7
16.5
16.5
16.5
4.3
3.6
4.4
4.9
60.7
60.7
60.6
60.9
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 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.
207
TABLE C-9.—Gross national product by industry, in 1958 prices, 1947-69
[Billions of dollars, 1958 prices]
Year
AgriTotal culture, Congross fores- tract
nacontional
strucand
product fishtion
eries
Manufacturing
Total
Transportation,
comDurNon- muniable durable
goods goods cation,
and
indus- indus- utilitries
tries
ties
GovWhnlo
sale
and
retail
trade
ernFinance,
insurment
ance, Servand
All
and
ices govern- other i
real
ment
estate
enterprises
1947
1948
1949
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
67
7.1
10.6
1950
1951..
1952.
1953
1954
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
1955
1956
1957...
1958.
1959
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
1968
1969
617.8
658.1
675.2
707.2
727.1
25.0
23.7
25.2
25.1
24.9
23.5
24.7
23.1
23.6
23.8
190.5
205.7
205.4
219.0
227.5
114.8
125.1
123.9
132.0
137.5
75.7
80.7
81.4
87.1
89.9
59.2
64.0.V
104.8
111.6
113.9
120.7
124.8
83.1
86.8
91.6
95.2
96.7
57.7
60.6
63.4
65.7
68.5
58.0
61.8
65.5
68.6
70.2
15.8
19.4
20.6
18.5
15.4
66. 5
70.9
75.2
* Mining, rest of the world, and residual (the difference between gross national product measured as sum of fi nal products and gross national product measured as sum of gross product by industries).
Source: Department of Commerce, Office of Business Economics.
208
TABLE C-10.—Personal consumption expenditures, 1929-70
[Billions of dollars]
Year
or
quarter
r
Q.
•a
IS
1
15
OJ
Q.
•s
<
77.2
1929
1
o c:
"c.S-
•a
XJ
•a
CO 3
9.2
3.2
P
u.
4.8
a>
O
1.2
'o
H-
u.
37.7
19.5
|
a>
o
Q
•a
OQ
a>
c
"o
to
S
Services
Nondurable goods
Durable goods
1o.
o
T3
O
c
o
I
C5
1o
"o
9.4
1.8
7.0
30.3
6.3
5.7
6.2
6.7
28.7
26.0
22.2
20.1
20.4
21.3
22.8
24.4
24.3
25.0
7.1
8.0
9.3
10.6
11.7
13.0
13.8
15.7
17.5
17.7
19.2
O
X
"1
1
o
1
1
2
X
a>
O
11.5
4.0
2.6
12.2
11.0
2.2
1.9
1.6
1.5
1.6
1.7
11.5
10.3
7.9
7.6
7.7
8.0
8.5
8.9
9.1
3.9
3.5
3.0
2.8
3.0
3.7
3.6
3.8
2.0
1.9
2.0
7.9
8.2
8.7
9.5
10.2
9.9
10.1
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
2.7
3.4
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
62.4
67.9
73.4
79.9
85.4
91.4
98.5
105.0
112.0
120.3
21.3
23.9
26.5
29.3
31.7
33.7
36.0
38.5
41.1
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
20.0
20.8
10.8
10.6
51.6
54.9
25.6
27.1
29.1
31.2
33.9
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
1.0
.9
1.0
34.0
29.0
22.7
22.3
26.7
29.3
32.9
35.2
34.0
35.1
11.5
14.2
16.2
18.4
19.9
18.9
19.1
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
7.8
9.6
6.9
6.6
6.7
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
7.4
8.8
28.4 11.0
33.2 13.4
36.7 14.4
40.6 16.5
47.4 18.2
52.3 18.8
54 2 20.1
52.5 19.3
2.3
2.6
2.1
1.3
1.6
1.8
3.0
3.6
4.4
5.0
191.0
206.3
216.7
230.0
236.5
254.4
266.7
281.4
290.1
311.2
30.5
29.6
29.3
33.2
32.8
39.6
38.9
40.8
37.9
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 98.1
3.6 108.8
3.9 114.0
4.1 116.8
4.2 118.3
4.6 123.3
5.0 129.3
5.2 135.6
5.4 140.2
5.9 146.6
67.2
69.9
73.6
76.4
78.6
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
325.2
335.2
355.1
375.0
401.2
432.8
466.3
492.1
535.8
577.5
45.3
44.2
49.5
53.9
59.2
66.3
70.8
73.1
84.0
90.0
20.1
18.4
22.0
24.3
25.8
30.3
30.3
30.5
37.2
40.3
20.5
22.2
25.0
26.9
29.9
31.4
34.6
36.7
18.9
19.3
6.3 151.3
6.5 155.9
6.9
7.5
8.5
9.1
10.5
11.2
12.3
80.5
82.9
85.7
88.2
92.9
98.8
105.8
108.5
115.1
121.7
27.3
27.9
29.6
30.6
33.5
35.9
40.3
42.3
46.1
49.9
12.3
12.4
12.9
13.5
14.0
15.3
16.6
17.6
19.0
21.1
31.2 128.7
32.7 135.1
241.6
46.3
48.7
52.0
55.4
59.3
63.5
67.5
71.8
77.4
84.0
16.7
58.0
62.5
68.1
73.8
80.4
88.5
97.5
107.1
616.8
89.4
37.3
38.5
13.7 264.7 131.7
52.3
22.9
57.9 262.7
91.8
36.3
18.1
116.4
69.9
60.5
1930
1931
1932....
1933—
1934
1935
1936
1937
1938
1939
45.8
51.3
55. 7
61.9
66.5
63.9
66.8
1940....
1941....
1942
1943
1944
1945....
1946—.
1947....
1948
1949
70.8
80.6
88.5
99.3
108.3
119.7
143.4
160.7
173.6
176.8
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970P_...
48.6
8.0
162.6
168.6
178.7
191.1
206.9
215.0
i 230.2
13.1 245.8
18.0
14.7
11.4
20.2
23.4
53.9
60.4
63.4
64.4
65.4
4.8
4.6
5.2
5.4
5.9
6.3
21.1
21.7
22.7
22.6
24.0
25.4
27.1
28.2
30.1
34.4
36.3
38.2
41.1
44.4
46.6
50.0
53.2
143.0
152.4
163.3
175.5
188.6
204.0
221.6
10.3
9.0
3.2
3.4
22.0
23.1
24.3
1.9
11.0
11.4
11.6
12.6
13.6
14.5
15.6
8.6
Seasonally adjusted annual rates
1968:1.. 519.7
II. 529.1
Ill 543.8
IV. 550.8
1969:1.. 561.8
79.9
82.6
86.7
86.9
89.1
90.6
34.9
36.0
39.1
38.8
39.8
40.0
II. 573.3
Ill 582.1
IV. 592.6
89.5
90.8
40.2
41.1
1970:1._ 603.1
II. 614.4
Ill 622.1
IVP 627.6
89.1
91.9
91.2
85.4
37.7
39.4
39.2
32.8
45.2
47.1
47.2
18.8
18.6
19.2
19.3
49.3
49.1
50.2
51.3
214.2
218.9
224.5
229.0
75.2
76.6
77.9
79.8
30.4
30.8
31.5
32.1
15.2
15.3
15.6
16.1
93.4
96.2
99.4
101.1
248.1 122.4
252.0 124.6
47.9
50.0
50.7
50.9
20.3
20.8
21.5
21.7
52.0
52.4
53.5
54.9
233.5
238.7
244.5
249.8
81.4
83.0
84.7
87.0
32.7
33.3
34.5
34.8
16.2
16.5
16.8
17.1
103.2
105.9
108.5
110.9
13.1 258.8 128.8
13.6 262.6 131.2
13.9 265.8 132.3
14.1 271.7 134.5
51.3
51.8
52.3
53.7
22.4
22.7
23.0
23.4
56.3
56.9
58.3
60.0
265.1
270.5
255.2
259.9
89.0
90.8
92.6
95.0
35.2
35.9
36.9
37.4
17.7
17.9
18.2
18.5
113.3
115.4
117.4
119.6
35.4
35.2
11.4
12.5
12.3
13.0
225.6
227.6
232.6
234.8
35.8
37.2
36.7
36.9
13.5
13.4
12.6
12.7
239.2 119.1
244.0 120.8
38.3
38.9
38.1
38.5
33.7
34.1
112.7
114.7
116.1
117.0
44.8
1 Includes standard clothing issued to military personnel.
2 Includes imputed rental value of owner-occupied dwellings.
Source: Department of Commerce, Office of Business Economics.
209
TABLE C-ll.—Gross private domestic investment, 1929-70
[Billions of dollars]
Change in
business
inventories
Fixed investment
Year or
quarter
Total
gross
private
domestic
investment
Nonresidential
Producers'
durable
equipment
Structures
Total
Residential structures
Total
Total
Nonfarm
Total
Nonfarm
Farm
4.0
3.8
0.2
1.7
1.8
.1
— 4
-LI
-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
2.2
4.5
1.8
-.6
-1.0
-1.0
6.4
-.5
4.7
1.9
4.0
.7
-.6
-.6
-.6
6.4
Nonfarm
Total
Nonfarm
Total
5.0
4.8
5.6
4.9
2.3
1.7
.7
.6
.9
1.2
1.6
1.9
2.0
2.9
2.2
1.6
.7
.5
.8
1.1
1.5
1.8
1.9
2.8
1929..
1930..
1931..
1932..
19331934..
1935..
1936..
1937..
1938..
1939..
16.2
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
1940..
1941__
1942..
19431944..
1945..
1946..
1947..
1948..
1949..
1950..
1951..
195219531954..
1955..
1956..
19571958..
1959..
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
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
-3.1
-2.2
54.1
59.3
51.9
52.6
51.7
67.4
70.0
67.9
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
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
.4
-1.5
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
1960..
19611962..
1963..
1964..
1965..
1966..
1967 _
1968.
1969.
74.8
71.7
83.0
87.1
94.0
108.1
121.4
116.6
126.5
139.8
71.3
69.7
77.0
81.3
88.2
98.5
106.6
108.4
118.9
131.4
48.4
47.0
51.7
54.3
61.1
71.3
81.6
83.3
88.7
99.3
18.1
18.4
19.2
19.5
21.2
25.5
28.5
28.0
29.6
33.8
17.4
17.7
18.5
18.8
20.5
24.9
27.8
27.3
28.9
33.0
30.3
28.6
32.5
34.8
39.9
45.8
53.1
55.3
59.1
65.5
27.7
25.8
29.4
31.2
36.3
41.6
48.4
50.0
54.3
60.8
22.8
22.6
25.3
27.0
27.1
27.2
25.0
25.1
30.3
32.0
22.2
22.0
24.8
26.4
26.6
26.7
24.5
24.5
29.7
31.5
3.6
2.0
6.0
5.9
5.8
9.6
14.8
8.2
7.6
8.5
3.3
1.7
5.3
5.1
6.4
8.6
15.0
7.5
7.5
8.0
1970P
135.8
132.2
102.6
35.1
34.3
67.4
63.0
29.7
29.0
3.6
3.0
14.5
10.6
!o
.0
3!0
Seasonally adjusted annual rates
1968: I
ll.._.
III
IV
1969:
I
II
III __.
IV.__.
1970: I
II....
Ill
119.8
127.3
126.5
132.6
117.2
117.0
118.3
123.3
88.3
86.4
88.3
91.6
29.8
28.9
29.4
30.3
29.1
28.2
28.6
29.6
58.5
57.5
59.0
61.3
53.4
52.8
54.3
56.7
28.8
30.6
29.9
31.7
28.3
30.1
29.4
31.1
0.6
.6
.5
.5
2.6
10.4
8.2
9.3
2.5
10.3
8.1
9.3
136.0
139.3
143.8
140.2
128.7
131.4
132.4
133.0
95.7
97.5
101.5
102.6
32.6
32.3
35.2
35.1
31.9
31.5
34.4
34.3
63.1
65.2
66.3
67.5
58.5
60.6
61.8
62.3
33.0
33.9
31.0
30.4
32.4
33.3
30.4
29.8
.5
.6
.6
.6
7.4
7.9
11.3
7.2
7.3
7.6
10.8
6.5
133.2
134.3
138.3
137.5
131.6
131.2
132.7
133.4
102.6
102.8
103.6
101.4
35.7
35.3
35.0
34.6
34.8
34.5
34.2
33.8
66.9
67.5
68.6
66.8
62.4
63.2
64.1
62.6
29.1
28.4
29.2
32.0
28.4
27.8
28.6
31.4
.6
.6
.6
.6
1.6
3.1
5.5
4.1
.9
2.6
5.0
3.6
Source: Department of Commerce, Office of Business Economics.
210
TABLE G-12.—National income by type of income, 1929-70
[Billions of dollars]
Compensation of
employees
Year or
quarter
Total
national
income1
Total
Business and professional income
SuppleWages ments
and
to
sala- wages
ries
and
sala-2
ries
Income
Rental
in
in-
Inof
come Inven- farm
proof
tory
prieunin- valuTotal corpoation tors 3
rated adjustenter- ment
prises
come
of
persons
Corporate profits
and inventory
valuation
adjustment
Net
Corpo- Inven- intertory
est
rate
Total profits valubefore ation
taxes * adjustment
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
4.7
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
10
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
.8
.6
.3
5
-.'l
.0
-.1
.0
.2
-.2
4.3
3.4
2.1
3.0
5.3
4.3
6.0
4.4
4.4
7.0
4.8
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
.0
1.0
-.7
4.9
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
14L0
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
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
.0
-.6
-.4
-.2
-.1
-.1
-1.7
-1.5
- 4
.5
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
7.1
8.0
8.4
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 6 146 8
180^7 171.1
195.3 185.1
209.1 198.3
208.0 196.5
224.5 211.3
243.1 227.8
256.0 238.7
257.8 239.9
279.1 258.2
78
24 0
26! 1
27.1
27.5
27.6
30.3
31.3
32.8
33.2
35.1
25 1
10.2
10.9
11.5
13.2
15.2
17.3
17.9
20.9
26.9
27.6
27.6
30.5
31.8
33.1
33.2
35.3
-1 1
-.3
.2
-.2
.0
-.2
-.5
-.3
-.1
-.1
13 5
15.8
15.0
13.0
12.4
11.4
11.4
11.3
13.4
11.4
94
10.3
11.5
12.7
13.6
13.9
14.3
14.8
15.4
15.6
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
1969
414.5
427.3
457.7
481.9
518.1
564.3
620.6
653.6
712.7
769.5
294.2
302.6
323.6
341.0
365.7
393.8
435.5
467.2
514.1
564.2
270.8
278.1
296.1
311.1
333.7
358.9
394.5
423.1
464.8
509.0
23.4
24.6
27.5
29.9
32.0
35.0
41.0
44.2
49.3
55.1
34.2
35.6
37.1
37.9
40.2
42.4
45.2
47.3
49.1
50.5
34.3
35.6
37.1
37.9
40.3
42.8
45.6
47.6
49.8
51.3
15.8
16.0
16.7
17.1
18.0
19.0
20.0
21.1
21.3
22.0
49.9
50.3
55.7
58.9
66.3
76.1
82.4
78.7
85.4
85.8
49.7
50.3
55.4
59.4
66.8
77.8
84.2
79.8
88.7
91.2
.2
-.1
.3
-.8
12.0
12.8
13.0
13.1
12.1
14.8
16.1
14.«
15.0
16.4
-1.7
-1.8
-1.1
-3.3
-5.4
8.4
10.0
11.6
13.8
15.8
18.2
21.4
24.4
27.8
30.7
1970 p . . . . 801.0
599.8
540.1
59.7
51.4
52.1
-.7
16.2
22.7
77.4
82.3
-4.9
33.5
6i5
9i 6
261 5
.0
.0
.0
.0
-.1
-.4
-.4
-.3
-.7
2.6
H
-.5
-.5
Seasonally adjusted annual rate:
6*7.2
706 1
722.2
735.2
495.3
507 6
520 9
532 5
447.9
458 9
471 0
481 4
47.4
48 7
49 9
51 1
48.5
49 2
49 2
49 4
14.4
14 6
15 3
15.8
21.3
21 3
21 3
21.3
81.3
86.0
87.4
87.1
86.7
88 6
88.4
91.3
-5.4
-2.6
-.9
-4.2
26.4
27.3
28.2
29.1
1969: L . . .
IL_.
III._
IV..
749.3
764.0
779.5
785.2
544.9
557.5
572.2
582.1
491.6
502.9
516.4
525.3
53.3
54.6
55.8
56.8
49.9
50.5
50.9
50.6
16.2
16.2
16.6
16.6
21.6
22.0
22.1
22.3
87.1
87.4
86.8
82.0
93.0
93.4
89.9
88.5
-5.9
-6.0
-3.2
-6.5
29.7
30.4
31.0
31.7
1970:1....
II...
III..
791.5
797.4
806.6
592.2
596.4
603.8
606.8
534.4
537.4
543.4
545.4
57.9
59.0
60.4
61.4
50.6
51.2
51.7
52.0
17.0
16.5
16.1
15.3
22.5
22.6
22.7
23.0
76.7
77.5
78.4
82.6
82.0
84.4
-5.8
-4.5
-5.9
-3.3
32.4
33.1
33.8
34.5
1968: 1
II
III
IV
IV p .
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 C-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 C-73 tor corporate tax liability and profits after taxes.
Source: Department of Commerce, Office of Business Economics.
211
TABLE C-13.—Relation of gross national product and national income, 1929-70
[Billions of dollars]
Year or quarter
Gross
national
product
Less:
Capital
consumption
allowances
Equals:
Net
national
product
Plus:
Subsidies
less
current
surplus
of government
enterprises
Less:
Indirect business tax and
nontax liability
Total
Federal
State
and
local
Business
transfer
payments
Statistical
discrepancy
Equals:
National
income
1929..
103.1
7.9
95.2
-0.1
7.0
1.2
5.8
0.6
0.7
86.8
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
8.0
7.9
7.4
7.0
6.8
6.9
7.0
7.2
7.3
7.3
82.4
68.0
50.7
48.6
58.2
65.4
75.4
83.3
77.4
83.2
-. 1
.0
.0
.0
.3
.4
.0
.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
.7
.7
.6
.6
.6
.6
.4
.5
-.8
.7
.3
.6
.5
-.2
1.2
.0
.6
1.3
75.4
59.7
42.8
40.3
49.5
57.2
65.0
73.6
67.4
72.6
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
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
-!l
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
.8
1.0
.4
-1.1
-2.0
2.5
3.9
.1
.9
-2.0
.3
81.1
104.2
137.1
170.3
182.6
181.5
181.9
199.0
224.2
217.5
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
-!i
.8
.9
.9
.1
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
.8
.9
1.0
1.2
1.1
1.2
1.4
1.5
1.6
1.7
1.5
3.3
2.2
3.0
2.7
2.1
-1.1
.0
1.6
-.8
241.1
278.0
291.4
304.7
303.1
331.0
350.8
366.1
367.8
400.0
1960.
1961.
1962.
1963.
1964.
1965.
1966.
1967
1968!
1969
503.7
520.1
560.3
590.5
632.4
684.9
749.9
793.9
865.0
931.4
43.4
45.2
50.0
52.6
56.1
59.8
63.9
68.9
74.0
78.9
460.3
474.9
510.4
537.9
576.3
625.1
685.9
725.0
791.1
852.5
.2
1.4
1.4
.8
1.3
1.3
2.3
1.4
.7
1.0
45.2
47.7
51.5
54.7
58.4
62.5
65.7
70.4
78.1
85.2
13.5
13.6
14.6
15.3
16.1
16.5
15.7
16.3
18.0
19.1
31.7
34.1
36.9
39.4
42.3
45.9
49.9
54.1
60.1
66.1
1.9
2.0
2.1
2.3
2.5
2.7
3.0
3.1
3.3
3.5
-1.0
-.8
.5
-.3
-1.3
-3.1
-1.0
-.7
-2.4
-4.7
414.5
427.3
457.7
481.9
518.1
564.3
620.6
653.6
712.7
769.5
1970 p.
976.8
84.3
892.4
1.7
92.0
19.6
72.4
3.6
-2.5
801.0
Seasonally adjusted annual rates
1968: I.
IV.
1969: I.
IV.
1970: l_
834.9
858.1
875.8
891.4
72.3
73.7
74.6
75.5
762.6
784.4
801.2
816.0
0.8
.7
.7
.5
75.5
77.4
79.2
80.4
17.4
17.8
18.2
18.4
58.0
59.5
61.0
61.9
3.2
3.3
3.4
3.5
-2.5
-1.6
-2.9
-2.6
687.2
706.1
722.2
735.2
907.6
923.7
942.6
951.7
77.0
78.2
79.4
80.7
830.6
845.5
863.1
871.0
.8
1.1
1.0
1.2
82.1
84.3
86.6
87.7
18.5
19.0
19.5
19.3
63.6
65.3
67.1
68.4
3.5
3.5
3.5
3.5
-3.6
-5.3
-5.5
-4.3
749.3
764.0
779.5
785.2
959.5
971.1
985.5
990.9
82.1
83.6
85.0
86.5
877.4
887.5
900.5
904.4
1.6
1.5
1.8
2.0
89.3
91.1
93.3
94.3
19.3
19.4
20.1
19.6
70.0
71.7
73.2
74.6
3.6
3.6
3.6
3.7
-5.4
-3.1
-1.1
791.5
797.4
806.6
Source: Department of Commerce, Office of Business Economics.
212
TABLE C-14.—Relation of national income and personal income, 1929-70
[Billions of dollars]
Year or quarter
National
income
Corporate
profits
and inventory
valuation
adjust-
Equals:
Plus
Less:
Interest
Contributions
for
social
insur-
ance
Wage
Govaccruals ernment
transfer
less
payments
disto perbursements
sons
ment
paid
by
government
Busi-
Dividends
(net)
and by-
ness
transfer
pay-
Personal
income
ments
consumers
1929..
86.8
10.5
0.2
0.0
0.9
2.5
5.8
0.6
85.9
1930..
19311932..
1933..
1934..
1935..
19361937..
1938..
1939..
75.4
59.7
42.8
40.3
49.5
57.2
65.0
73.5
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
.0
.0
.0
.0
.0
.0
.0
.0
.0
.0
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
.7
.7
.6
.6
.6
.6
.4
.5
77.0
65.9
50.2
47.0
54.0
60.4
68.6
74.1
68.3
72.8
1940..
1941..
1942..
1943..
1944..
1945..
19461947..
1948..
1949..
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
.0
.0
.0
.2
-.2
.0
.0
.0
.0
.0
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
.8
78.3
96.0
122.9
151.3
165.3
171.1
178.7
191.3
210.2
207.2
1950..
1951..
1952..
19531954..
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
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
.0
.1
.0
-.1
.0
.0
.0
.0
.0
.0
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
1960..
196L.
1962..
1963..
196419651966..
1967..
19681969-
414.5
427.3
457.7
481.9
518.1
564.3
620.6
653.6
712.7
769.5
49.9
50.3
55.7
58.9
66.3
.0
.0
.0
.0
.0
.0
.0
.0
.0
.0
26.6
30.4
31.2
33.0
34.2
37.2
41.1
48.7
55.7
61.6
15.1
15.0
16.1
17.6
19,1
20.5
22.2
23.6
26.3
29.0
13.4
13.8
15.2
16.5
17.8
19.8
20.8
21.4
23.3
24.7
1.9
2.0
2.1
2.3
76.1
82.4
78.7
85.4
85.8
20.7
21.4
24.0
26.9
27.9
29.6
38.0
42.4
47,1
53.6
3.5
401.0
416.8
442.6
465.5
497.5
538.9
587.2
629.3
688.7
748.9
1970 v.
801.0
77.4
57.1
.0
73.9
31.8
25.2
3.6
801.0
2.5
2.7
3.0
3.1
3.3
Seasonally adjusted annual rates
1968: I . . .
II..
III.
IV..
687.2
706.1
722.2
735.2
81.3
86.0
87.4
87.1
45.5
46.7
47.7
48.7
0.0
.0
.0
.0
52.9
55.3
56.6
58.0
25.1
25.9
26.7
27.5
22.3
23.1
23.8
24.1
3.2
3.3
3.4
3.5
664.0
680.9
697.6
712.5
1969: I.
749.3
764.0
779.5
785.2
87.1
87.4
86.8
82.0
51.9
53.1
54.2
55.1
.0
.0
.0
.0
59.8
61.0
62.0
63.4
28.0
28.6
29.1
30.2
24.1
24.4
25.0
25.2
3.5
3.5
3.5
3.5
725.8
741.1
758.1
770.5
791.5
797.4
806.6
76.7
77.5
78.4
56.0
56.7
57.6
58.0
2.5
-2.1
-.4
.0
66.3
75.8
75.1
78.4
31.0
31.4
32.2
32.6
25.2
25.1
25.4
25.1
3.6
3.6
3.6
3.7
782.3
801.3
807.2
813.4
III.
IV..
1970: I .
II..
III.
IV i
Source: Department of Commerce, Office of Business Economics.
213
TABLE C-15.—Disposition of personal income, 1929-70
Percent of disposable
personal income
Less: Personal outlays
Year or
quarter
Personal
income
Less:
Personal
tax
and
nontax
payments
Equals:
Disposable
personal
income
Total
PerPersonal
sonal
interest transfer
consump- paid by
paytion
conments
expend- sumers to foritures
eigners
Equals:
Personal
saving
Personal
outlays
Total
85.9
2.6
83.3
Personal
saving
Percent
Billions of dollars
1929....
Consumption
expenditures
0.3
4.2
95.0
92.7
5.0
.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
.7
3.7
5.4
5.3
1.1
3.7
.8
.9
.7
.5
.5
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
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
.6
.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
333.0
343.3
363.7
384.7
411.9
444.8
479.3
506.0
550.8
593.9
325.2
335.2
355.1
375.0
401.2
432.8
466.3
492.1
535.8
577.5
7.3
7.6
8.1
9.1
10.1
11.3
12.4
13.2
14.3
15.7
.5
.5
.5
.6
.6
.7
.6
.7
.7
.8
17.0
21.2
21.6
19.9
26.2
28.4
32.5
40.4
40.4
37.6
95.1
94.2
94.4
95.1
94.0
94.0
93.6
92.6
93.2
94.0
92.9
92.0
92.2
92.7
91.6
91.5
91.1
90.1
90.6
91.4
4.9
5.8
5.6
4.9
6.0
6.0
6.4
7.4
6.8
6.0
634.7
616.8
17.0
.9
50.0
92.7
90.1
7.3
79.1
77.2
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
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
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
1960...
1961....
1962...
1963....
1964....
1965....
1966....
1967..
1968....
1969....
401.0
416.8
442.6
465.5
497.5
538.9
587.2
629.3
688.7
748.9
50.9
52.4
57.4
60.9
59.4
65.7
75.4
83.0
97.5
117.3
350.0
364.4
385.3
404.6
438.1
473.2
511.9
546.3
591.2
631.6
1970 p
801.0
116.4
684.7
1.5
Seasonally adjusted annual rates
1968: I . . .
II . .
III..
IV..
664.0
680.9
697.6
712.5
89.1
92.6
102.1
106.5
574.9
588.4
595.6
606.0
534.1
543.8
559.1
566.4
519.7
529.1
543.8
550.8
13.8
14.1
14.5
14.9
0.7
.7
.8
.7
40.8
44.6
36.5
39.6
92.9
92.4
93.9
93.5
90.4
89.9
91.3
90.9
7.1
7.6
6.1
6.5
1969: L . . .
II ..
III..
IV..
725.8
741.1
758.1
770.5
113.8
118.1
117.5
119.9
612.0
623.0
640.6
650.6
577.7
589.7
598.7
609.6
561.8
573.3
582.1
592.6
15.3
15.6
15.8
16.1
.7
.8
.9
.8
34.3
33.3
42.0
41.1
94.4
94.7
93.5
93.7
91.8
92.0
90.9
91.1
5.6
5.3
6.5
6.3
1970: I . . .
11...
III
782.3
801.3
807.2
813.4
117.0
117.7
114.2
116.5
665.3
683.6
693.0
696.9
620.5
632.1
640.2
646.0
603.1
614.4
622.1
627.6
16.4
16.8
17.2
17.5
.9
1.0
1.0
1.0
44.8
51.5
52.7
50.9
93.3
92.5
92.4
92.7
90.7
89.9
89.8
90.0
6.7
7.5
7.6
7.3
Source: Department of Commerce, Office of Business Economics.
214
TABLE C-16.— Total and per capita disposable personal income and personal consumption
expenditures, in current and 1958 prices, 1929-70
Personal consumption expenditures
Disposable personal income
Year or quarter
Total (billions
of dollars)
Current
prices
1958
prices
Per capita
(dollars)
Current
prices
1958
prices
Total (billions
of dollars)
Current
prices
1958
prices
Population
(thou- l
sands)
Per capita
(dollars)
Current
prices
1958
prices
1929..
83.3
150.6
683
1,236
77.2
139.6
634
1,145
121,875
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
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
1,187
1,105
1,190
69.9
60.5
48.6
45.8
51.3
55.7
61.9
66.5
63.9
66.8
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
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
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
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
1,831
1,905
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
1960.
1961.
1962.
1963.
1964.
1965.
1966.
1967.
1968.
1969.
350.0
364.4
385.3
404.6
438.1
473.2
511.9
546.3
591.2
631.6
340.2
350.7
367.3
381.3
407.9
435.0
458.9
477.5
499.0
511.5
1,937
1,983
2,064
2,136
2,280
2,432
2,599
2,744
2,939
3,108
1,883
1,909
1,968
2,013
2,123
2,235
2,331
2,398
2,4bO
2,517
325.2
335.2
355.1
375.0
401.2
432.8
466.3
492.1
535.8
577.5
316.1
322.5
338.4
353.3
373.7
397.7
418.1
430.1
452.3
467.7
1,800
1,824
1,902
1,980
2,088
2,224
2,368
2,471
2,663
2,842
1,749
1,755
1,813
1,865
1,945
2,044
2,123
2,160
2,248
2,301
180,684
183,756
186.656
189,417
192.120
194,592
196,907
199,119
201,177
203,213
1970 P.
684.7
529.7
3,333
2,579
616.8
477.2
3,003
2,323
205,395
1,158
934
Seasonally adjusted annual rates
1968: I .
IL
III
IV
574.9
588.4
595.6
606.0
492.3
498.6
501.2
504.0
445.0
448.4
457.7
458.1
2,593
2,634
2,699
2,726
2,220
2,232
2,272
2,268
200,435
200,908
201,465
202,028
1969: I.
II.
III
IV
612.0
623.0
640.6
650.6
504.7
507.5
515.9
517.8
463.3
467.1
468.7
471.7
2,775
2,825
2,860
2,904
2,288
2,302
2,303
2,311
202,475
20?, 953
203, 505
204,091
1970: I .
II.
III
665.3
683.6
693.0
696.9
522.9
532.0
534.2
529.8
474.0
478.1
479.6
477.1
2,948
2,995
3,024
3,042
2,317
2,331
2,331
2,312
204,586
205,113
205, 706
206,336
3,252
3,333
3,369
3,378
i Population of the United States including Armed Forces overseas; includes Alaska and Hawaii beginning 1960.
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.
215
TABLE C-17.—Sources of personal income, 1929-70
[Billions of dollars]
Wage and salary disbursements1
Year or quarter
Total
personal
income
Commodityproducing
industries
Total
Total
Manufacturing
Distributive
industries
Proprietors'
income
Service
industries
Government
Other
labor
income1
Business
and
professional
Farm 2
1929
85.9
50.4
21.5
16.1
15.6
8.4
4.9
0.6
9.0
6.2
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
6il
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
4.3
3.4
2.1
2.6
3.0
5.3
4.3
6.0
4.4
4.4
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
4.5
6.4
9.8
11.7
11.6
12.2
14.9
15.2
17.5
12.7
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
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
13.5
15.8
15.0
13.0
12.4
11.4
11.4
11.3
13.4
11.4
1960.
1961.
1962.
1963.
1964
1965.
1966
1967.
1968.
1969.
401.0
416.8
442.6
465.5
497.5
538.9
587.2
629.3
688.7
748.9
270.8
278.1
296.1
311.1
3*3. 7
358.9
394.5
423.1
464.8
509.0
112.5
112.8
120.8
125.7
134.1
144.5
159.3
166.5
181.5
197.5
89.7
89.8
96.7
100.6
107.2
115.6
128.1
134.2
145.9
157.5
68.1
69.1
72.5
76.0
81.2
86.9
93.8
100.3
109.2
119.8
41.5
44.0
46.8
49.9
54.1
58.3
63.7
70.5
78.4
87.7
48.7
52.2
56.0
59.5
64.3
69.3
77.7
85.8
95.7
104.1
12.0
12.7
13.9
14.9
16.6
18.7
20.7
22.3
24.9
27.6
34.2
35.6
37.1
37.9
40.2
42.4
45.2
47.3
49.1
50.5
12.0
12.8
13.0
13.1
12.1
14.8
16.1
14.8
15.0
16.4
1970
801.0
540.1
201.2
158.9
128.4
96.6
114.0
30.4
51.4
16.2
Seasonally adjusted annual rates
1968: I . . .
II
III
IV.
664.0
680.9
697.6
712.5
447.9
458.9
471.0
481.4
175.2
179.3
183.2
188.1
141.0
144.1
147.4
150.9
105.2
107.7
110.9
113.1
75.6
77.6
79.2
81.3
92.0
94.3
97.6
98.9
23.8
24.6
25.3
26.0
48.5
49.2
4.9.2
49.4
14.4
14.6
15.3
15.8
1969: I . . .
II...
III.
IV.
725.8
741.1
758.1
770.5
491.6
502.9
516.4
525.3
191.5
196.0
199.9
202.5
153.2
156.4
159.7
160.8
115.5
118.5
121.3
123.8
84.5
86.7
88.7
90.9
100.0
101.7
106.5
108.1
26.7
27.3
27.9
28.5
49.9
50.5
50.9
50.6
16.2
16.2
16.6
16.6
1970: I...
II..
ML
782.3
801.3
807.2
813.4
531.9
539.5
543.8
545.4
202.7
201.5
201.9
198.7
160.7
159.6
159.7
155.8
125.9
127.0
129.7
131.0
93.9
95.5
97.3
99.5
109.3
115.5
114.9
116.1
29.3
30.0
30.8
31.5
50.6
51.2
51.7
52.0
17.0
16.5
16.1
15.3
IVP
See footnotes at end of table.
2l6
TABLE C-17.—Sources of personal income,
7929-70—Continued
[Billions of dollars]
Transfer payments
Year or
quarter
Rental
ncome Diviof per- dends
sons
Personal
interest
income
Total
Old age,
survivors,
disability,
and health
insurance
benefits
State
unemployment insurance
benefits
veterans
Other
honofitc
Ud lull to
Less:
Personal
contributions
for social
insurance
Nonagricultural
personal
income*
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
0.0
.0
.0
0.0
.4
.4
.6
1.6
.8
.5
.4
.5
1.9
.6
.5
.5
.9
1.1
1.4
1.6
1.8
1.9
1.6
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
.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
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
15.8
16.0
16.7
17.1
18.0
19.0
20.0
21.1
21.3
22.0
13.4
13.8
15.2
16.5
17.8
19.8
20.8
21.4
23.3
24.7
23.4
25.0
27.7
31.4
34.9
38.7
43.6
48.0
54.0
59.7
28.5
32.4
33.3
35.3
36.7
39.9
44.1
51.8
59.0
65.1
11.1
12.6
14.3
15.2
16.0
18.1
20.8
25.7
30.3
33.0
2.8
4.0
2.9
2.8
2.6
2.2
1.8
2.1
2.1
2.1
4.6
4.8
4.8
5.0
5.3
5.6
5.7
6.6
7.2
8.3
10.0
10.9
11.2
12.2
12.9
14.0
15.7
17.5
19.5
21.6
9.3
9.6
10.3
11.8
12.5
13.4
17.7
20.5
22.8
26.0
385.2
400.0
425.5
448.1
480.9
519.5
566.3
609.4
668.2
726.7
1970 v
22.7
25.2
65.3
77.5
38.5
3.9
9.5
25.6
27.8
778.6
Seasonally adjusted annual rates
1968: I — .
II...
Ill
IV
21.3
21.3
21.3
21.3
22.3
23.1
23.8
24.1
51.5
53.2
54.8
56.6
56.1
58.6
60.0
61.4
28.2
30.3
30.9
31.8
2.2
1.9
2.1
2.0
7.1
7.2
7.2
7.4
18.7
19.2
19.8
20.2
21.9
22.6
23.1
23.5
644.2
661.0
676.8
690.9
1969: I.
21.6
22.0
22.1
22.3
24.1
24.4
25.0
25.2
57.7
59.0
60.1
61.9
63.3
64.5
65.5
67.0
32.3
32.9
33.1
33.5
2.1
1.9
2.2
2.3
7.9
8.4
8.3
8.7
21.0
21.4
21.8
22.4
25.2
25.8
26.4
26.8
703.9
719.1
735.7
747.9
22.5
22.6
22.7
23.0
25.2
25.1
25.4
25.1
63.4
64.5
66.0
67.1
69.8
79.4
78.7
82.1
34.2
41.5
39.0
39.5
2.9
3.6
4.3
4.8
9.0
9.5
9.7
10.1
23.8
24.9
25.8
27.7
27.4
27.7
28.0
28.1
759.2
778.6
784.9
791.8
IV
1970: I .
II
Ill
IV p . . . .
1
The total of wage and salary disbursements and other labor income differs from compensation of employees in
Table C-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.
217
T A B L E C—18.—Sources and uses of gross saving,
1929-70
[Billions of dollars]
Gross private saving and government surplus or deficit,
national income and product accounts
Total
1929
1930
1931
1932
1933
1934
1935
1936
1937
1938
1939
Government surplus
or deficit ( - )
Private saving
Year or
quarter
. .
Total
Personal
saving
Gross
business
saving
16.3
15.3
4.2
11.8
5.0
.8
.9
3.2
6.6
7.2
11.9
7.0
8.8
12.1
8.0
2.5
2.3
5.6
13.6
18.6
10.7
8.6
10.3
11.5
8.7
11.0
1940
1941
1942
1943
1944
1945
1946
1947
1948
1949
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
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
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
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
77.5
75.5
85.0
90.5
101.0
115.3
124.9
119.5
128.6
143.7
1970 v
139.0
5.5
2.5
5.2
3.4
2.6
-.6
-.9
.4
2.1
3.6
3.8
.7
2.6
3.8
11.0
27.6
33.4
37.3
29.6
15.2
7.3
13.4
Capital
grants
received
by the
United
States
Total
Gross
private
domestic investment
Net
foreign
investment i
Statistical
discrepancy
Total
Federal
State
and
local
11.2
1.0
1.2
-0.2
17.0
16.2
0 8
0.7
8.6
5.3
3.2
3.2
-.3
-2.9
-1.8
-1.4
-2.4
-2.0
-3.1
.3
-.6
-2.1
-1.5
-1.3
-2.9
-2.6
-3.6
-.8
11.0
5.8
1.1
1.6
.7
2
2
2
4
-1.8
-2.2
-2.1
-2.2
10.3
5.6
1.0
1.4
3.3
6.4
8.5
11.8
6.5
-.8
7
3
.6
.5
-.2
1.2
0
.6
-.7
-3.8
-31.4
-44.1
-51.8
-39.5
-1.3
-5.1
-33.1
-46.6
-54.5
-42.1
5.4
3.5
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
-.3
-.1
.5
-.4
14.4
13.4
.7
.4
11.8
(2)
10.2
.6
1.3
1.8
2.5
2.7
2.6
1.9
1.0
14.6
19.0
13.1
17.9
9.6
3.5
5.0
9.1
9.8
5.7
7.1
8.5
8.4
-2.4
-.7
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
33.1
5.8
35.1 - 3 . 8 - 3 . 8
-7.0
36.1 - 6 . 9
39.2 - 7 . 0 - 5 . 9
4.0
2.7
46.3
5.7
47 3
4.9
2.1
49 8
1
2
.
5
-10.2
49.4
56.8 - 2 . 1 - 1 . 2
-1.2
73.9
79.8
87.9
88.7
102.4
113.1
123.8
133.4
135.9
135.0
17.0
21.2
21.6
19.9
26.2
28.4
32.5
40.4
40.4
37.6
3.7
3.5
56.8
-3.8
58.7 - 4 . 3
66.3 - 2 . 9 - 3 . 8
1.8
68.8
76.2 - 1 . 4 - 3 . 0
2.2
1.2
84.7
- 2
91 3
1.1
93.0 - 1 3 . 9 - 1 2 . 4
95.6 - 7 . 3 - 6 . 2
8.7
97.3
9.3
.2
-.5
.9
1.2
1.7
1.0
1.3
-1.6
-1.1
-.6
148.6
50.0
98.6
-10.8
1.2
-9.6
3.8
6.4
8.4
.6
.5
-3.2
9.4
Gross investment
7.6
.1
-1.1
-1.3
-.9
-1.4
-2.3
-.8
0.9
9.3
-.1
1
1.1
9
15
1.1
-.2
-2.2
-2.1
-1 4
1.3
1.0
.4
-1.1
-2.0
2.5
3.9
35.2
42.9
47.9
36.2
10.6
30.6
34.0
46.0
35.7
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
67.9
60.9
75.3
-2.2
.2
-.3
-2.1
1.5
3.3
2.2
-.5
15
34
-1.1
-2.3
-.8
76.5
74.7
85.5
90.3
99.7
112.2
123.9
118.8
126.2
138.9
74.8
71.7
83.0
87.1
94.0
108.1
121.4
116.6
126.5
139.8
1.7
3.0
2.5
3.1
5.7
4.1
-1.0
24
2.2
-.3
-.9
.5
3
-1.3
-3.1
-1.0
-.7
-2.4
-4.7
137.4
135.8
1.6
-2.5
4.6
8.9
1.9
—.2
.9
-2.0
.3
3.0
2.7
2.1
.0
1.6
-.8
Seasonally adjusted annual rates
1968- 1
II
III
121.6
129.6
129.8
133.5
132.3
140.8
134 3
136.4
40.8
44.6
36 5
39.6
91.5 - 1 0 . 7
-9.2
96.2 - 1 1 . 2 - 1 0 . 5
97 8 —4 5 —4 1
96.8 - 2 . 9 - 1 . 1
-1.6
-.7
— 4
-1.9
119.1
128.1
126.9
130.9
119.8
127.3
126.5
132.6
-0.7
.7
.4
-1.7
-2.5
-1.6
-2.9
-2.6
1969: 1
II
III
IV
138.5
142.5
149.1
144.2
130.8
130.7
141 1
137 1
34.3
33.3
42 0
41 1
96.5
97.4
99 1
96 0
77
11.8
80
7 i
9.5
13.4
8 3
61
-1.8
-1.5
_ 3
10
134 9
137.3
143.6
139.9
136.0
139.3
143.8
140.2
-1.1
-2.0
-.1
-.3
-3.6
-5.3
-5.5
-4.3
1970: 1
139.3
II
138.5
I I I . . . . 140.6
140.5
149.4
151.8
44.8
51.5
52.7
50.9
95.7 - 1 . 2 - 1 . 7
97.9 - 1 0 . 9 - 1 4 . 2
99.1 - 1 1 . 2 - 1 1 . 8
.5
3.4
.7
134.8
136.3
140.4
138.1
133.2
134.3
138.3
137.5
1.6
2.0
2.1
.6
-5.4
-3.1
-1.1
IV
P
.
* Net exports of goods and services less net transfers to foreigners.
'Surplus of $32 million.
»Deficit of $41 million.
Source: Department of Commerce, Office of Business Economics.
2l8
0.9
.9
.9
.9
TABLE C-\9—Saving by individuals, 1946-70 J
[Billions of dollars]
Increase in financial assets
Net investment in
Less:Increase in
debt
Securities
Year or
quarter
Total
Currency
and
Total 2 demand
deposits
nsurNon- Mortance
gage
and
Con- corSavCorpodebt Con- Other
pen- Non- umer poings
Govrate
farm
on
rate
umet debt«
sion
duCorpoacand
re- homes rables busi- non- credit
rate
ounts ernlent for- itocM erves
ness farm
assets homes
eign
bonds
1946..
1947..
1948..
1949..
25.4
20.7
23.6
19.2
18.4
13.3
9.2
10.0
4.8
5
-2'. 5
-1.9
6.3
3.4
2.3
2.6
1.2
2.3
1.2
1.8
-0.9
-.8
-.2
-.4
1.1
1.1
1.0
.7
5.3
5.4
5.3
5.5
4.2
6.9
10.5
9.0
5.8
7.5
7.1
7.0
3.3
3.2
7,4
2.4
3.8
4.3
5.0
4.1
2.7
3.2
2.8
2.9
-0.2
2.6
2.6
2.4
1950..
1951._
1952..
1953..
1954..
27.3
30.3
26.3
29.9
27.9
13.7
18.0
21.4
22.1
22.3
2.2
4.6
1.7
.5
1.9
2.5
4.5
7.7
8.3
9.2
.4
-.5
.8
2.4
.9
-.2
.0
.0
-.4
.7
1.6
1.6
.9
.7
6.9
6.2
7.6
7.9
7.9
13.7
13.5
12.8
13.5
13.7
10.2
5.5
3.6
6.4
4.9
6.4
4.5
2.5
1.6
2.7
7.4
7.1
6.4
7.7
8.6
4.1
1.2
4.8
3.9
1.1
5.2
2.8
2.9
2.1
6.0
1955.1956..
1957..
1958..
1959..
33.6
34.9
33.5
32.5
33.2
27.9
28.9
28.0
31.1
34.9
5.9
9.5
3.4
12.1
1.9
14.0 - 1 . 9
11.4
8.1
1.1
.9
1.0
1.1
.3
1.1
2.0
1.5
1.5
.6
8.4
9.6
9.5
10.1
11.5
17.7
16.4
13.8
12.7
16.5
9.9
5.9
4.9
.6
5.5
3.5
1.9
2.4
3.3
3.2
12.2
11.2
8.8
8.8
12.6
6.4
3.5
2.6
.2
6.4
6.8
3.5
4.2
6.2
7.9
I960..
1961..
1962..
1963..
1964..
28.7
31.3
37.3
38.9
45.2
27.7
34.9
39.3
44.9
51.3
-1.9
1.3
2.9
5.5
6.5
12.4
17.4
23.4
23.0
23.9
2.9
.7
.8
4.3
4.2
.2
.3
-.6
-.6
-.5
-.4
.4
-2.1
-2.8
.0
11.7
12.2
12.8
13.9
15.3
14.5
12.0
12.8
12.6
12.5
5.1
2.9
6.7
8.9
11.2
2.1
3.2
5.6
6.9
6.2
10.8
10.9
12.7
14.8
16.0
4.6
1.8
5.8
7.9
8.5
5.4
8.8
8.5
11.9
11.4
1965..
1966..
1967..
1968..
1969..
52.5
56.1
62.7
57.3
55.3
56.0
54.4
66.6
63.6
56.4
7.3
3.1
11.5
6.9
3.4
26.4
4.4
19.1
9.5
32.5 - 1 . 4
27.7
6.9
11.3 16.8
.7
2.0
4.0
4.6
4.9
-1.9
-1.0
-4.8
-7.7
-4.3
17.2
18.0
20.0
19.5
20.3
12.0
11.5
9.2
13.0
13.2
14.8
15.2
12.4
17.0
17.3
9.0
7.2
8.2
7.6
15.2
12.3
10.5
4.9
116.3
10.0
7.2
4.6
11.1
9.3
13.9
12.7
18.6
17.9
14.7
1.2
l!3
.4
Seasonally adjusted annual rates
IV..
56.0
44.2
61.3
54.7
53.8
47.2
62.8
62.0
-7.9
5.5
-1.5
17.3
19.6
14.5
5.1
5.9
21.0
3.8
27.5
15.1
1970: I . . .
II
Ill-
54.1
63.3
67.9
53.3
61.1
79.4
-3.2
-.7
1.4
13.2
24.8
40.2
16.5
.6
4.7
1969: I-
4.8
5.3
4.7
4.7
-5.4
-5.3
-2.3
-3.8
18.5
19.9
24.5
18.5
13.6
15.4
13.2
10.5
17.8
17.7
14.8
14.5
8.6
8.1
9.6
8.9
17.0
16.9
16.0
15.2
9.9
10.4
8.8
8.4
10.9
16.8
14.2
17.6
8.2 - 7 . 0
10.4
1.4
7.1 - 1 . 5
20.0
20.2
21.9
10.2
9.5
8.2
11.1
12.2
10.0
6.8
8.8
8.4
12.3
12.6
14.0
4.8
6.2
6.4
10.1
9.2
17.7
1
Individuals'savingsectorincludeshouseholds, privatetrustfunds, nonprofit institutions, farms, and other noncorporate
businesses.
2
Includes miscellaneous financial assets, not shown separately.
3
U.S. Government and agency securities and State and local obligations.
4
Includes investment company shares.
5
Private life insurance reserves, private insured and noninsured pension reserves, and government insurance and
pension reserves.
6
Security credit, policy loans, noncorporate business debt, and other debt.
Source: Board of Governors of the Federal Reserve System.
219
T A B L E C-20.—Number and money income {in 1969 prices) of families and unrelated individuals,
by race of head, 1947-69
Year
Total
number
(millions)
With incomes
under $3,000
Median
income
Number
(millions)
Percent
FAIVHUES:i
1947
1948
1949
37.2
38.6
39.3
$4,972
4,855
4,779
9.1
9.5
10.3
24.4
24.7
26.1
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
5,069
5,239
5,386
5,807
5,675
6,055
6,449
6,456
6,441
6,808
9.7
9.1
8.9
8.5
9.3
8.4
7.7
7.8
8.0
7.6
24.4
22.4
21.7
20.6
22.1
19.7
17.8
17.9
18.1
16.8
1960
1961..
1962...
1963...
1964...
1965...
1966—
45.5
46.3
47.0
47.4
47.8
48.3
48.9
6,962
7,034
7,228
7,487
7,758
8,082
8,396
7.6
7.8
7.4
7.0
6.6
6.3
5.9
1966 2.
1967 2.
1968 2
1969 2,
49.1
49.8
50.5
51.2
8,467
8,764
9,102
9,433
5.8
5.5
4.9
4.8
UNRELATED
INDIVIDUALS:
1947
1948
1949
With incomes
under $3,000
Total
number
(millions)
With incomes
under $3,000 Total
number
Median
(milincome NumPerber
lions)
cent
(millions)
Median
income
34.1
35.3
$5,194
5,051
4,973
3.1
3.3
$2,660
2,694
2,538
38.2
39.0
39.5
39.7
40.2
40.9
5,290
5,455
5,688
6,029
5,913
6,332
6,744
6,723
6,714
7,106
16.8
16.9
15.7
14.8
13.8
13.0
12.2
41.1
41.9
42.4
42.7
43.1
43.5
44.0
11.9
10.9
9.6
9.3
44.1
44.8
45.4
46.0
7.3
7.7
21.1
21.7
23.4
Number
(millions)
1.8
1.8
Percent
56.7
55.1
58.1
3.8
3.9
4.0
4.0
4.0
4.2
2,848
2,871
3,230
3,390
3,292
3,485
3,548
3,598
3,451
3,661
1.8
1.7
1.7
1.7
1.8
1.8
52.4
52.3
45.7
43.6
46.3
43.4
42.0
42.3
44.1
41.9
14.3
14.4
13.4
12.6
11.9
11.2
10.4
4.3
4.5
4.6
4.8
4.8
4.8
4.9
4,001
3,913
4,037
4,165
4,533
4,666
5,224
1.7
1.8
1.7
1.6
1.5
1.4
1.3
38.4
39.2
36.2
35.3
30.8
29.5
26.2
10.2
9.6
8.3
8.1
5.0
5.0
5.1
5.2
5,275
5,641
5,895
6,191
1.3
1.2
1.1
1.1
25.9
24.2
21.4
20.4
7.5
6.7
6.0
6.1
6.2
5.8
21.6
19.5
18.7
18.3
19.6
17.2
15.4
15.5
15.5
14.3
7,252
7,361
7,564
7,841
8,101
8,424
8,718
5.9
6.0
5.7
5.4
5.1
4.9
4.6
8,797
9,086
9,433
9,794
4.5
4.3
3.8
3.7
With incomes
under $1,500
With incomes
under $1,500
With incomes
under $1,500
Number
(millions)
Percent
Number
(millions)
Per-
Number
(millions)
3.3
3.5
45.9
47.9
46.0
8.2
8.4
9.0
1,640
1,531
1,641
3.9
4.2
4.3
47.6
49.4
47.7
1950..
1951...
1952..
1953..
1954..
1955..
1956..
1957..
1958..
1959..
9.4
9.1
9.7
9.5
9.7
9.9
9.8
10.4
10.9
10.9
1,612
1,685
1,947
1,912
1,667
1,804
1,922
1,960
1,918
1,970
4.5
4.3
4.1
4.2
4.6
4.4
4.2
4.3
4.5
4.4
48.4
47.7
42.3
44.1
47.4
44.4
42.8
41.2
41.9
40.9
I960..
1961.
1962.
1963_
1964..
1965..
1966.
11.1
11.2
11.0
11.2
12.1
12.1
12.4
2,131
2,152
2,130
2,165
2,351
2,502
2,570
4.3
4.3
4.0
4.0
4.1
3.9
3.8
1966
1967
1968
1969
12.3
13.1
13.8
14.5
2,644
2,945
2,931
4.0
3.7
3.8
2.
2.
2.
2.
Negro and other races
White
Total
7.2
7.3
1,736
1,618
1,760
36.9
36.0
34.4
34.3
33.1
30.4
29.7
1.5
1.6
1.5
1.5
1.6
1.7
1.6
1,392
1,436
1,522
1,561
1,756
1,931
1,954
53.5
52.1
49.4
48.7
44.7
40.6
40.5
29.2
25.1
24.6
1.6
1.8
1.8
2.0
2,016
2,138
2,170
39.1
36.7
38.1
3.5
3.5
3.3
3.3
3.4
3.2
3.2
2,760
3,090
3,078
3.3
3.0
3.1
9.6
9.6
9.5
9.7
10.4
10.5
10.8
30.5
26.7
26.5
11.3
12.0
12.5
57.7
60.2
58.2
1.5
1.4
1.3
1.5
1.6
1.6
2,305
2,316
2,285
2,276
2,471
2,618
2,683
39.1
38.3
36.6
36.2
34.7
31.8
31.0
0.6
.7
57.3
54.1
51.3
48.3
58.8
55.7
50.5
53.2
52.9
52.7
3.7
3.6
3.5
3.5
3.7
3.6
8.2
8.5
8.5
8.9
9.2
9.3
1,224
1,202
1,261
1,245
1,347
1,457
1,587
1,237
1,320
1,485
1,405
1,408
1,406
47.0
46.7
40.6
43.2
45.2
42.5
41.7
39.4
40.2
38.9
1,714
1,775
2,108
2,022
1,794
1,917
1,973
2,082
2,019
2,093
1.0
1.1
Percent
10.7
iThe 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 old and over (other than inmates of institutions) who are
not living with any relatives.
Source: Department of Commerce, Bureau of the Census.
220
POPULATION, EMPLOYMENT, WAGES, AND
PRODUCTIVITY
TABLE C-21.—Population by age groups: Estimates, 1929-70, and projections, 1975-85
[Thousands of persons]
Age (years)
Total
July 1
Under 5
5-15
16-19
20-24
25-44
45-64
65 and
over
Estimates:
1929
121,767
11,734
26,800
9,127
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
26,983
26,984
26,969
26,897
26,796
9,220
9,259
9,284
9,302
9,331
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
26.645
26,415
26,062
25,631
25,179
9,381
9,461
9,578
9,717
9,822
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
24,811
24,516
24,231
24,093
23,949
9,895
9,840
9,730
9,607
9,561
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
23,907
24,103
24,468
25,209
25,852
9,361
9,119
9,097
8,952
8,788
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
26,721
27,279
28.894
30,227
31,480
8,542
8,446
8,414
8,460
8,637
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
32,682
33,994
35,272
36,445
37,368
8,744
8,916
9,195
9,543
10,215
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
180,684
183,756
186 656
189.417
192,120
20,364
20,657
20,746
20.750
20,670
38,504
39,768
41,168
41,620
42,294
10,698
11,093
11,258
12,061
12,819
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_.
1969
194,592
196,920
199,114
701,152
203, 216
20,404
19,811
19,168
18, 506
17,960
42,963
43,822
44,488
44,978
45, 260
13,563
14,304
14,167
14,338
14,655
13,679
14,063
15,178
15, 748
16, 484
46,807
46,855
47,084
47, 621
47, 994
39,015
39,601
40, 224
40, 827
41, 393
18,162
18,464
18,804
19,134
19,470
19701
41, 893
19,825
43, 583
21, 503
43, 533
23,492
43,439
25,474
. .
1960
1961
1962
1963
1964
.. .
17,176
205, 395
17, 741
45, 289
Projections^
1975: Series C-...
Series D
217, 557
215, 588
19,968
18,187
42,761
42, 572 } 16,610
19, 205
53,927
1980: Series C . . .
Series D
232, 412
227, 510
23, 245
20, 305
42,037
40,074 ] 16,892
20,911
62, 302
1985: Series C . . .
Series D
249,248
240, 925
25,791
22, 356
47,301
42,412 } 14,442
20,933
15,082
48,388
71, 867
i Data for 1970 are based on the 1960 Census. The total tabulation for July 1, 1970 based on the 1970 Census is
204,835,000.
Data by age on this basis are not yet available.
2
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 and Projections, Current Population Reports, Series P-25, No. 448," August 6, 1970.
Note.—Data for Armed Forces overseas included beginning 1940. Includes Alaska and Hawaii beginning 1950.
Source: Department of Commerce, Bureau of the Census.
221
411-364 O—71
-15
TABLE G-22.—Noninstitutional population and the labor force, 1929-70
Civilian labor force
Noninstitutional
population
Year or month
Total
labor
force
(including
Armed
Forces)
Employment
Armed
Forces
Total
Total
Agricultural
Nonagricultural
Unemployment
Thousands of persons 14 years of age and over
Total
Unemlabor
ployforce as
ment
percent as perof non- cent of
institu- civilian
tional
labor
popuforce
lation
Percent
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
53,140
53,740
54,320
54,950
55,600
270
300
320
340
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
370
52 870
53,440
54,000
54,610
55,230
.
1935
1936
1937
1938
1939.
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
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
Thousands of persons 16 years of age and over
9.9
4.7
1.9
1.2
Percent
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
59.6
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
3,59?
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
60.4
60.4
60.2
60.0
5.3
3.3
3.0
2.9
5.5
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
1969
129,236
131,180
133,319
135,562
137,841
77,178
78,893
80,793
82.272
84,239
2,723
3,123
3,446
3,535
3,506
74,455
75,770
77,347
78,737
80,733
71,088
72,895
74,372
75.920
77,902
3,979
3,844
3.817
3,606
66,726
68,915
70 527
72.103
74,296
3,366
2,875
2,975
2.817
2,831
59.7
60.1
60 6
60.7
61.1
4.5
3.8
3.8
3.6
3.5
1970
140,182
85,903
3,188
82,715
78,627
3,462
75,165
4,088
61.3
4.9
136,802
136,940
137,143
137,337
137,549
137,737
81,711
82,579
82,770
83,137
83.085
85,880
3,477
3,475
3,504
3,516
3,522
3,524
78,234
79,104
79,266
79,621
79,563
82,356
75,358
76,181
76,520
77,079
77,264
78,956
3,165
3,285
3,327
3,607
3,894
4,367
72,192
72,896
73,193
73,471
73,370
74,589
2,876
2,923
2,746
2,542
2,299
3,400
59.7
60.3
60.4
60.5
60.4
62.4
3.7
3.7
3.5
3.2
2.9
4.1
137,935
138,127
138,317
138,539
138,732
138,928
86,318
86, 046
84,527
85,038
84,920
84,856
3,521
3,530
3,543
3,528
3,493
3,440
82,797
82. 516
80,984
81,510
81,427
81,416
79,616
79,646
78, 026
78,671
78,716
78,788
4,155
3,977
3,629
3,561
3 322
2,984
75,460
75,669
74,397
75,110
75 395
75,805
3,182
2,869
2,958
2,839
2,710
2,628
62.6
62.3
61.1
61.4
61.2
61.1
3.8
3.5
3.7
3.5
3.3
3.2
1955
1956
1957
1958 _
1959
.
1969: Jan
Feb
Mar
.
Apr
May
June
July
Aug
Sept
Oct
Nov
Dec
..
-
.
See footnotes at end of table.
222
4,361
58.9
59.4
59.9
3.9
3.8
5.9
TABLE G-22.—Noninstitutional population and the labor force,
1929-70—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
1970: Jan
Feb
Mar
Apr
May
June
139,099
139,398
139,497
139,687
139,884
140,046
84,105
84,625
85,008
85,231
84,968
87,230
3,386
3,342
3,318
3,271
3,227
3,180
80,719
81,283
81,690
81,960
81,741
84,050
77,313
77,489
77,957
78,408
78,357
79,382
2,91,5
2,994
3,171
3,531
3,725
4,208
74,398
74,495
74,786
74,877
74,632
75,174
3,406
3,794
3,733
3,552
3,384
4,669
60.5
60.8
60.9
61.0
60.7
62.3
4.2
4.7
4.6
4.3
4.1
5.6
July
Aug
Sept
140,259
140,468
140,675
140,886
141,091
141,301
87,955
87,248
85,656
86,225
86,386
86,165
3,154
3,133
3,109
3,050
3,039
3,013
84,801
84,115
82,547
83,175
83,347
83,152
80,291
79,894
78,256
78,916
78,741
78, 516
4,118
3,782
3,525
3,394
3,226
2,952
76,173
76,112
74,730
75, 522
75,515
75, 564
4,510
4,220
4,292
4,259
4,607
4,636
62.7
62.1
60.9
61.2
61.2
61.0
5.3
5.0
5.2
5.1
5.5
5.6
Oct
Nov
Dec
Seasonally adjusted
1969: Jan...
Feb...
Mar..
Apr...
May..
June..
83,233
83,674
83,833
83,950
83,652
84,028
79,756
80,199
80,379
80,434
80,130
80, 504
77,081
77,524
77,650
77,589
77,321
77,741
3,717
3,836
3,710
3,661
3,777
3,683
73,364
73,688
73,940
73,928
73,544
74,058
2,675
2,675
2,729
2,845
2,809
2,763
3.4
3.3
3.4
3.5
3.5
3.4
July..
Aug..
Sept..
Oct...
Nov..
Dec...
84,310
84,517
84,868
85,051
84,872
85,023
80,789
80,987
81,325
81, 523
81,379
81,583
77,931
78,142
78,194
78,445
78,528
78,737
3,561
3,614
3,498
3,446
3,434
3,435
74,370
74, 528
74,696
74,999
75,094
75,302
2,858
2,845
3,131
3,078
2,851
2,846
3.5
3.5
3.8
1970: Jan...
Feb,_.
Mar..
Apr...
May..
June..
85, 599
85, 590
86,087
86,143
85,783
85, 304
82,213
82,249
82,769
82,872
82, 555
82,125
79,041
78,822
79,112
78,924
78,449
78,225
3,426
3,499
3,550
3,586
3,613
3,554
75,615
75,323
75, 562
75, 338
74,836
74,671
3,172
3,427
3,657
3,948
4,106
3,900
3.9
4.2
4.4
4.8
5.0
4.7
July..
Aug..
Sept..
OcLNov..
Dec.-
85,967
85,810
86,140
86,432
86,432
86, 459
82,813
82,676
83,031
83,353
83,393
83, 446
78,638
78,445
78,424
78,686
78,535
78, 472
3,519
3,420
3,399
3,288
3,333
3,411
75,119
75,025
75,025
75,398
75,202
75, 061
4,175
4,231
4,607
4,667
4,858
4,974
5.0
5.1
5.5
5.6
5.8
6.0
t
3.5j
Note.—Labor force data in Tables C-22 through C-25 are based on household interviews and relate to the 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."
Source: Department of Labor, Bureau of Labor Statistics.
223
TABLE C-23.—Civilian employment and unemployment, by sex and age,
1947-70
[Thousands of persons 16 years of age and over]
Unemployment
Employment
Males
Females
Males
Females
Year or
month
Total
20
Total 16-19 years
years and
over
20
20
20
16-19 years Total 16-19 years
and
years and
over
over
Total
Total years
Total
1947...
1948...
1949...
57,039 40,994 2,218 38, 776 16,045 [,691 14.354 2,311 1,692
58,344 41,726 2,345 39, 382 16,618 1,683 14,937 2,276 1,559
57,649.40,926 2,124,38, 803 16,723 1,588 15,137 3,637 2,572
619
270 1,422
255 1,305
717
352 2,219 1,065
144
152
223
475
564
841
1950...
1951...
1952...
1953...
1954...
58,920
59,962
60,254
61,181
60,110
41,580
41,780
41,684
42,431
41,620
2,186 39, 394 17,340 1,517. 15,824 3,288 2,239
2,156 39. 626 18,182 1,611 16,570 2,055 1,221
2,106 39, 578 18,570 -,612,16,958 1,883 1,185
2,135 40. 296 18,750 ,584117,164 1,834 1,202
1,985:39, 634.18,490 ,490,17,000 3,532 2,344
318
191
205
184
310
1,922 1,049
1,029
834
980
698
1,019
632
2,035 1,188
195
145
140
123
191
854
689
559
510
997
1955...
1956...
1957...
1958...
1959...
171
802
071
036
630
42,621
43,380
43,357
42,423
43,466
2.095
2,164
2,117
2,012
2,198
40,526 19,550
41,216 20,422
41,239 20,714
40,411 20,613
41,267.21,164
,548118.002
,654,18,767
,663 19,052
,570 19,043
,640 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
998
1,039
1,018
1,504
1,320
823
176
832
209
821
197
262 1,242
256 1,063
1960...
1961...
1962...
1963...
1964...
778
746
702
762
305
43,904
43,656
44,177
44,657
45,474
2,360
2,314
2,362
2,406
2,587
41,543
41,342
41,815
42,251
42.886
21,874
22,090
22,525
23,105
23,831
,769 20,105
,793 20,296
,833 20,693
,849 21,257
,929,21,903
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
2,518
2,016
,971
,718
1,366
1,717
1,488
1,598
1,581
286
349
313
383
386
1965....
1966...
1967...
1968....
1969....
1970....
088 46,340
895 46,919
372 47,479
920 48,114
90248,818
2,918
3,252
3,186
3.255
3,430
43,422
43,668
44,293
44.859
45,388
24,748
25,976
26,893
27,807
29,084
2,118 22,630
2,469 23,510
2,497,24,397
2. 525 25.281
2,686,26,397
3,366
2,875
2,975
2,817
2,831
1,914
1,551
1,508
1,419
1,403
479
432
448
427
441
,435
,120
,060
993
963
1,452
1,324
1,468
1,397
1,428
599 1,636 1,853
395 1,056
921
404
391 1,078
985
412
412 1,016
506 1,347
1,357
1,305
1,327
1,369
1,369
1,338
454
425
446
448
426
405
903
880
881
921
943
933
1,318
1,370
1,402
1,476
1,440
1,425
962
356
978
392
976
426
442 1,034
426 1,014
406 1,019
July
Aug
77,931 48,702 3, 367 45,33529,229
2,,717 26, 512 2,858 1,452
29,
78,142 48|!,819 3,334 45,485 29, 323 2,697 26,626 2,845 1,381
Oct
.,949 3,438 45)511
78,445 48,949
45,511 29,496 2, 797 26,699 3,078 1,546
449
423
474
458
466
434
1,003
958
1,121
1,088
998
1,025
1,406
1,464
1,536
1,532
1,387
1,387
394
426
445
464
379
409
1,012
1,038
1,091
1,068
1,008
978
1970: Jan.....
Feb....
Mar . .
Apr....
May....
June...
79, 041 49, 204
78, 822 49;
•\058
79,112 49,i,313
78,924 49,i,099
78,449 49,1,081
78, 225 48, 778
,060 3,172
3, 530 45,674 29,837 2,777 27,
3, 524 45,534 29,764 2,839 26,925 3,427
3,604 45, 709 29, 799 2,783 27,n 016 3,657
3,432 45,667 29,825 2, 803 ~27;, 022 3,948
488 45, 593 29, 368 2,892 26,
., 476 4,106
26,
3] 257 45; 52129,447 2,675 "1,772
3,900
1,662
1,827
1,865
2,147
2,250
2,201
510
525
514
615
617
568
1,152
1,302
1,351
1,532
1,633
1,633
1,510
1,600
1,792
1,801
1,856
1,699
497
459
513
549
447
445
1,013
1,141
1,279
1,252
1,409
1,254
July....
Aug
Sept....
Oct
Nov .._
Dec
78,638 48,,855
78,445 48,,662
78, 424 48,
1,899
78,686 48,1,864
78,535 48,
1,950
78,472 48,,869
3,331 45, 524 29, 783
i,783
3,238 45,424 29,
1,525
3, 377 45, 522 29,
3,326 45, 538 29822
3,439 45,511 29; 585
3,504 45,365 29,603
2,710 27,,073 4,175
2,691 27, 092 4,231
2,775 '
26!, 7504,607
2, 740 27,
,082 4,667
2,623 26,,962 4,858
2, 578 27,025 4,974
2,316
2,362
2,592
2,648
2,678
2,763
546
608
675
684
686
708
1,770
1,754
1,917
1,964
1,992
2,055
1,859
1,869
2,015
2,019
2,180
2,211
432
514
565
557
601
582
1,427
1,355
1,450
1,452
1,579
1,629
78,627,48,960 3,407 45,553 29,667 2,734 26,932 4,088 2,235
1,080
1,368
1,175
1,216
1,195
Seasonally adjusted
1969: Jan.....
Feb . . .
Mar....
Apr _.
May....
June...
77, 081 48,!, 612
77, 524 48,1,754
77,650 48,,822
77, 589 48,1,745
77, 321 48,654
77, 741 48,697
3,418 45,194 28,469 2,527 25,942 2,675
3,431 45, 323 28, 770 2, 570 26», 200 2,675
448 45, 374 28,828 2,612 26,i, 216 2,729
3,'463 45; 28,844 2,651 26,193 2,845
26| 041 2,809
3, 403 45, 28,667 2,626 26,
3,394 45, 303 29, 044 2,722 26, 322 2,763
" "" 29,238 2,695 26,543
26,
Sept.... 78,194 48,,956 3,491 45,465
3,131 1,595
9,067
"'" 3, 534 45, 533 29, 4612,798 26,663 2,851 1,464
Nov . . 78,528 49,
9,055 3, 502 45, 553 29,682 2,!, 785" 26,
,897 2,846 1,459
D e c . . . 78, 737 49,
Note—See Note, Table C-22.
Source: Department of Labor, Bureau of Labor Statistics.
224
TABLE C-24.—Selected unemployment rates, 1948-70
IPercent]
Year or month
All
workers
By selected groups
By color
By sex and age
Both
sexes
16-19
years
Men
20
years
and
over
Women 20
years
and
over
White
Negro
and
other
races
Experienced
wage
and
salary
workers
Married
men*
Fulltime
workers 2
Bluecollar
workers 3
4.2
8.0
1948.
1949.
3.8
5.9
9.2
13.4
3.2
5.4
3.6
5.3
3.5
5.6
5.9
8.9
3.7
6.2
3.5
5.4
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
4.7
2.5
2.4
2.5
4.9
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
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
2.8
2.6
2.8
5.1
3.6
3.8
3.7
4.0
7.2
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.
1969.
4.5
3.8
3.8
3.6
3.5
14.8
12.8
12.8
12.7
12.2
3.2
2.5
2.3
2.2
2.1
4.5
3.8
4.2
3.8
3.7
4.1
3.4
3.4
3.2
3.1
8.1
7.3
7.4
6.7
6.4
4.3
3.5
3.6
3.4
3.3
1970.
4.9
15.3
3.5
4.8
4.5
8.2
4.8
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
5.4
4.8
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
1.5
4.2
3.4
3.5
3.1
3.1
5.3
4.2
4.4
4.1
3.9
5.0
4.2
4.2
4.0
3.9
2.6
4.5
6.2
5.4
6.7
Seasonally adjusted
1969: Jan...
Feb..
Mar..
Apr..
May..
June.
3.4
3.3
3.4
3.5
3.5
3.4
12.0
12.0
12.6
12.7
12.4
11.7
2.0
1.9
1.9
2.0
2.0
2.0
3.6
3.6
3.6
3.8
3.7
3.7
3.0
3.0
3.1
3.1
3.1
3.0
6.2
5.9
6.1
7.0
6.4
6.8
3.2
3.1
3.1
3.3
3.2
3.2
1.4
1.4
1.4
1.5
1.5
1.5
3.0
2.9
3.0
3.2
3.1
3.1
3.8
3.6
3.7
4.0
3.8
3.7
3.7
3.7
3.7
3.8
3.8
3.8
July..
Aug..
Sept..
Oct...
Nov..
Dec.
3.5
3.5
3.8
3.8
3.5
3.5
12.2
12.3
12.9
12.9
11.8
11.8
2.2
2.1
2.4
2.3
2.1
2.2
3.7
3.8
3.9
3.8
3.6
3.5
3.2
3.2
3.5
3.5
3.2
3.2
6.5
6.4
6.7
6.6
6.2
5.7
3.3
3.3
3.6
3.6
3.4
3.4
1.6
1.5
1.7
1.6
1.5
1.7
3.1
3.1
3.3
3.1
3.1
3.2
3.8
3.8
4.4
4.2
4.2
4.3
4.0
4.0
4.3
4.3
4.0
3.9
1970: Jan
Feb..
Mar..
Apr_.
May..
June.
3.9
4.2
4.4
4.8
5.0
4.7
13.8
13.4
13.9
15.7
14.3
14.6
2.5
2.8
2.9
3.2
3.5
3.5
3.6
4.1
4.5
4.4
5.1
4.5
3.6
3.8
4.1
4.3
4.6
4.2
6.3
7.0
7.1
8.7
8.0
8.7
3.6
3.9
4.2
4.2
4.7
4.6
1.8
2.0
2.2
2.4
2.6
2.5
3.4
3.7
4.0
4.4
4.7
4.3
4.6
5.0
5.2
5.7
6.2
6.3
4.2
4.5
4.8
5.1
5.4
4.9
July..
Aug..
Sept..
Oct...
Nov.
Dec.
5.0
5.1
5.5
5.6
5.8
6.0
13.9
15.9
16.8
17.1
17.5
17.5
3.7
3.7
4.0
4.1
4.2
4.3
5.0
4.8
5.1
5.1
5.5
5.7
4.7
4.8
5.1
5.2
5.5
5.5
8.3
8.4
9.0
9.3
8.8
9.3
5.1
5.0
5.4
5.7
5.6
5.9
2.7
2.8
2.9
3.1
3.2
3.3
4.6
4.7
5.0
5.0
5.5
5.8
6.6
7.0
7.5
7.2
7.3
7.7
5.4
5.5
6.0
6.2
6.2
6.3
* 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 C-22.
Source: Department of Labor, Bureau of Labor Statistics.
225
TABLE C-25.— Unemployment by duration, 1947-70
Duration of unemployment
Year or month
Total unemployment
Less than
5 weeks
5-14
weeks
15-26
weeks
27 weeks
and over
Thousands of persons 16 years of age and over
1947
1948
1949
2,311
2,276
3,637
1,210
1,300
1,756
704
669
1,194
234
193
428
164
116
256
1950
1951
195?
1953
1954
3,288
2,055
1,883
1,834
3,532
1,450
1.177
,135
14?
,605
1,055
574
516
482
1,116
425
166
148
132
495
357
137
84
78
317
1955
1956
1957
1958
1959
2,852
2,750
2,859
4,602
3,740
335
41?
,408
,753
,585
815
805
891
1,396
1,114
366
301
321
785
469
336
232
239
667
571
I960
1961
196?
1963
1964
3,852
4,714
3,911
4,070
3,786
,719
,806
,663
,751
,697
1,176
1,376
1,134
1,231
1,117
503
728
534
535
491
454
804
585
553
482
1965
1966
1967
1968.
1969
3,366
2,875
2,975
2,817
2,831
1,628
,573
,634
,594
.629
983
779
893
810
827
404
287
271
256
242
351
239
177
156
133
1970
4,088
2,137
1,289
427
235
Seasonally adjusted *
1969* Jan
Feb
Mar .
Apr _
May
June
July
Aug
Sept
Oct
Nov
Dec
1970- Jan
Feb
Mar
Apr .
May
June
July
Aug
Sept
Oct
Nov
Dec
2,675
2,675
2,729
2,345
2,809
2,763
1,507
,461
,625
,711
,720
,578
767
833
111
748
639
812
203
238
240
246
263
255
121
113
119
135
137
130
2,858
2,845
3,131
3,078
2,851
2,846
1,656
,646
1,756
,882
1,558
1,515
824
854
995
882
912
893
233
250
240
233
249
272
167
135
152
130
140
120
3,172
3,427
3,657
3,948
4,106
3,900
1,756
1,973
1,995
2,295
2,219
1,961
914
1,016
1,154
1,075
1,214
1,303
276
306
363
372
352
450
133
159
182
197
260
235
4,175
4,231
4,607
4,667
4,858
4,974
2,061
2,206
2,331
2,447
2,289
2,299
1,334
1,320
1,501
1,507
1,756
1,591
470
479
501
496
550
697
241
257
291
249
320
348
i Because of independent seasonal adjustment of the various series, detail will not add to totals.
Note.—See Note, Table C-22.
Source: Department of Labor, Bureau of Labor Statistics.
226
TABLE G-26.— Unemployment insurance programs, selected data, 1940-70
All programs
Year or month
Covered
employ-1
ment
Total
Insured
unem- benefits
ploypaid
ment
(mil(weekly
lions
averof dolage) 2 3 lars) 2 *
Thousands
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
1969
1970 v
1969: Jan...
Feb..
Mar..
Apr..
May..
June.
July..
Aug..
Sept..
Oct..
Nov..
Dec.
1970: Jan...
Feb..
Mar..
Apr..
May..
June.
July..
Aug..
Sept..
Oct..
Nov..
Dec p.
24,291
28,136
30,819
32,419
31,714
30,087
31,856
33,876
34,646
33,098
34,308
36,334
37,006
38,072
36,622
40,018
42,751
43,436
44,411
45,728
46,334
46,266
47,776
48,434
49.637
51,580
54.739
56,342
57,976
*60,003
*57, 880
57, 898
>58,476
*>59, 274
?59,838
*60,941
*60,938
*61,276
*61,087
*>60,755
P60, 603
»61,070
-58, 960
58,848
8 59,167
1,331
842
661
149
111
720
2,804
1,793
1,446
2,474
1,605
1,000
1,069
1,067
2,051
1,399
1,323
1,571
3,269
2,099
2,071
2,994
1,946
U.973
1,753
1,450
1,129
1,270
1,187
1,177
1,950
1,585
1,551
1,385
1,163
971
912
1,089
1,016
903
930
1,106
1,465
1,958
1,988
1,917
1,885
1,778
1,696
1,897
1,855
1,746
1,886
2,233
2,615
State programs
nsured
unemployments
Initial
claims
Exhaustions «
Unadjusted
Weekly average, thousands
534.7
358.8
350.4
80.5
67.2
574.9
2,878. 5
1,785.5
1,328.7
2,269.8
1,467.6
862.9
1,043. 5
1,050.6
2,291.8
1,560.2
1,540.6
1,913.0
4,290.6
2.854.3
3, 022. 8
4,358.1
3,145.1
3,025.9
2,749.2
2.360.4
1,890.9
2,220.0
2,191.0
2,298.6
3,960.0
264.6
250.8
242.6
214.9
164.9
145.7
171.8
169.7
148.3
152.2
149.1
231.2
320.8
331.4
355.1
345.6
315.5
315.4
340.8
340.5
328.2
332.0
321.8
392.5
1,282
814
649
147
105
589
1,295
997
980
1,973
1,513
969
1,044
990
1,870
1,265
1,215
1,446
2,526
1,684
1,908
2,290
1,783
1,806
1,605
1,328
1,061
1,205
1,111
1,101
1,810
1,491
1,459
1,300
1,090
906
852
1,021
948
840
864
1,030
1,375
1,847
1,874
1,798
1,770
1,667
1,583
1,761
1,710
1,607
1,724
2,017
2,367
Insured unemployment as percent of covered
employment
214
164
122
36
29
116
189
187
200
340
236
208
215
218
304
226
111
270
369
111
331
350
302
7 298
268
232
203
226
201
200
295
275
219
173
167
144
162
246
172
146
167
213
289
355
290
245
298
246
248
333
248
244
278
335
398
50
30
21
4
2
5
38
24
20
37
36
16
18
15
34
25
20
23
50
33
31
46
32
30
26
21
15
17
16
16
24
16
17
17
19
17
17
15
14
13
13
14
15
18
20
20
23
24
25
24
26
26
26
26
28
Seasonally adjusted
Benefits paid
Total
(millions of
dollars) <
Average
weekly
check
(dollars) «
Percent
5.6
3.0
2.2
.5
.4
2.1
4.3
3.1
3.0
6.2
4.6
2.8
2.9
2.8
5.2
3.5
3.2
3.6
6.4
4.4
4.8
5.6
4.4
4.3
3.8
3.0
2.3
2.5
2.2
2.1
3.4
3.0
2.9
2.6
2.2
1.8
1.7
2.0
1.8
1.6
1.6
2.0
2.7
3.6
3.6
3.5
3.4
3.2
3.0
3.3
3.2
3.0
3.2
3.7
4.4
2.1
2.1
2.1
2.1
2.0
2.1
2.2
2.2
2.2
2.2
2.3
2.4
2.5
2.6
2.8
3.2
3.6
3.7
3.6
3.7
4.1
4.4
4.4
4.0
518.7
344.3
344.1
79.6
62.4
445.9
1,094.9
775.1
789.9
1,736.0
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
2,726.7
3,422.7
2,675.4
2,774.7
2, 522.1
2,166. 0
1,771.3
2,092. 3
2,031.6
2,127.9
3,700.0
246.1
234.2
226.5
200.1
153.0
135.0
159.2
156.7
136.2
139.5
136.9
213.6
299.5
310.8
331.1
321.5
293.6
292.3
314.2
312.3
300.2
304.2
298.7
369.8
10.56
11.06
12.66
13.84
15.90
18.77
18.50
17.83
19.03
20.48
20.76
21.09
22.79
23.58
24.93
25.04
27.02
28.17
30.58
30.41
32.87
33.80
34.56
35.27
35.92
37.19
39.75
41.25
43.43
46.17
50.10
46.16
46.80
46.70
46.03
45.14
44.83
45.30
46.16
45.70
46.25
46.47
47.42
48.51
49.11
48.93
49.20
49.46
49.68
49.57
50.63
50.64
51.45
53.01
53.64
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 1960), 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.
4
Includes benefits paid under extended duration provisions of State laws, beginning June 1958. Annual data are net
amounts and monthly data are gross amounts.
* 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; March 1970 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, Manpower Administration.
227
TABLE C-27.—Wage and salary workers in nonagricultural establishments, 1929—70
[All employees; thousands of persons]
Year or
month
Total
wage
and
salary
workers
Manufacturing
Total
Durable
goods
Nondurable
goods
Mining
Contract
construction
Transportation
and
public
utilities
Wholesale
and
retail
trade
Finance,
insurance,
and
real
estate
Government
Services
Fed-
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
6,931
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
2,931
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
1,388
1,432
1,425
1,462
3,142
3,326
3,518
3,473
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
5,363
6,968
8,823
11,084
10,856
5,622
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
1,502
1,476
3,681
3,921
4,084
4,148
4,163
996
1,340
2,213
2,905
2,928
3,206
3,320
3,270
3,174
3,116
1945..
19461947..
1948..
1949..
40,394
41,674
43,881
44,891
43,778
15,524
14,703
15,545
15, 582
14,441
9,074
7,742
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
2,254
1,892
1,863
1,908
3,137
3,341
3,582
3,787
3,948
1950..
19511952..
19531954-
45,222
47,849
48,825
50,232
49,022
15,241
16,393
16,632
17,549
16,314
8,094
9,089
9,349
10,110
9,129
7,147
7,304
7,284
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
10,235
1,919
1,991
2,069
2,146
2,234
5,382
5,576
5,730
5,867
6,002
1,928
2,302
2,420
2,305
2,188
4,098
4,087
4,188
4,340
4,563
1955..
1956..
1957..
19581959..
50,675
52,408
52,894
51,363
53,313
16,882
17,243
17,174
15,945
16,675
9,541
9,834
9,856
8,830
9,373
7,340
7,409
7,319
7,116
7,303
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
6,274
6,536
6,749
6,806
7,130
2,187
2,209
2,217
2,191
2,233
4,727
5,069
5,399
5,648
5,850
1960..
1961..
1962..
1963..
1964..
54,234
54,042
55,596
56,702
58,331
16,796
16,326
16,853
16,995
17,274
9,459
9,070
9,480
9,616
9,816
7,336
7,256
7,373
7,380
7,458
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
11,391
11,337
11,566
11,778
12,160
2,669
2,731
2,800
2,877
2,957
7,423
7,664
8,028
8,325
8,709
2,270
2,279
2,340
2,358
2,348
6,083
6,315
6,550
6,868
7.248
1965..
1966..
1967..
1968..
1969.
60,815
63,955
65,857
67,915
70,274
18,062
19,214
19,447
19,781
20,169
10,406
11,284
11,439
11,626
11,893
7,656
7,930
8,008
8,155
8,277
632
627
613
606
619
3,186
3,275
3,208
3,285
3,437
4,036
4,151
4,261
4,310
4,431
12,716
13,245
13,606
14,084
14,645
3,023 9,087
3,100 9,551
3,225 10,099
3,382 10,623
3,557 11,211
2,378
2,564
2,719
2,737
2,758
7,696
8,227
8,679
9,109
9,446
1970 v
70,669
19,401
11,210
8,190
622
3,346
4,499
14,947
3,679 11,577
2,707
9,893
See footnotes at end of table.
228
TABLE G-27.—Wage and salary workers in nonagricultural establishments,
1929-70—Continued
[All employees; thousands of persons]
Manufacturing
Year or
month
Total
wage
and
salary
workers
Total
Durable
goods
Nondurable
goods
Mining
Contract
construction
Transportation
and
public
utilities
Government
Wholesale
and
retail
trade
Finance,
insurance,
and
real
estate
Services
Federal
State
and
local
Seasonally adjusted
1968: Jan...
Feb...
Mar..
Apr...
May..
June..
66,751
67,166
67,306
67,500
67,567
67,809
19,612
19,627
19,637
19,704
19,746
19,793
11,556
11,543
11,539
11,592
11,610
11,621
8,056
8,084
8,098
8,112
8,136
8,172
596
599
599
614
611
612
3,109
3,278
3,290
3,296
3,269
3,250
4,285
4,301
4,303
4,298
4,248
4,293
13,786
13,887
13,938
13,987
14,016
14,048
3,314
3,327
3,336
3,347
3,358
3,363
10,398
10,455
10,480
10,494
10,529
10, 583
2,721
2,721
2,721
2,726
2,726
2,771
8,933
8,971
9,002
9,034
9,064
9,096
July..
Aug..
Sept..
Oct...
Nov..
Dec...
67,962
68,152
68,288
68, 547
68,805
69,039
19,788
19,810
19,838
19,864
19,939
20,010
11,633
11,629
11,639
11,652
11,718
11,769
8,155
8,181
8,199
8,212
8,221
8,241
615
615
616
566
615
616
3,275
3,280
3,300
3,336
3,335
3,386
4,307
4,318
4,329
4,333
4,348
4,355
14,097
14,159
14,215
14,280
14,308
14,255
3,375
3,398
3,412
3,436
3,451
3,463
10,614
10,675
10,693
10,778
10,859
10,925
2,772
2,740
2,719
2,713
2,712
2,726
9,119
9,157
I 9,166
9,241
9,238
9,303
1969: Jan...
Feb...
Mar..
Apr...
May..
June..
69,352
69,605
69,827
69,992
70,172
70,347
20,023
20,092
20,171
20,182
20,195
20,248
11,818
11,843
11,893
11,903
11,915
11,957
8,205
8,249
8,278
8,279
8,280
8,291
617
619
616
615
614
614
3,391
3,410
3,422
3.425
3,441
3,442
4,359
4,370
4,385
4,414
4,420
4,445
14,412
14,466
14,495
14,546
14,606
14,647
3,487
3,500
3,514
3,529
3,540
3,556
10,986
11,047
11,112
11,146
11,170
11,174
2,763
2,764
2,759
2,761
2,757
2,782
9,314
9,337
9,353
9,374
9,429
9,439
July..
Aug..
Sept..
Oct...
Nov..
Dec...
70,400
70,497
70,567
70,836
70,808
70,842
20,247
20,246
20,252
20,233
20,082
20,082
11,955
11,950
11,968
11,965
11,782
11,773
8,292
8,296
8,284
8,268
8,300
8,309
618
621
623
622
624
627
3,439
3,420
3,436
3,445
3,473
3,496
4,454
4,457
4,459
4,463
4,464
4,469
14,673
14,713
14,7^9
14,824
14,848
14,750
3,567
3,580
3,584
3,596
3,611
3,626
11,205
11,248
11,289
11,361
11,383
11,431
2,765
2,749
2,747
2,739
2,730
2,721
9,432
9,463
9,438
9,553
9,593
9,640
1970: Jan... 70,992
Feb... 71,135
Mar_. 71,242
Apr... 71,149
May.. 70,839
June.. 70,629
20,018
19,937
19,944
19,795
19,572
19,477
11,679
11,625
11,648
11,529
11,386
11,286
8,339
8,312
8,296
8,266
8,186
8,191
625
626
626
622
620
620
3,394
3,466
3,481
3,426
3,351
3,324
4,507
4,496
4,502
4,468
4,478
4,511
14,938
14,987
14,984
14,991
14,968
14,927
3,648
3,652
3,665
3,673
3,677
3,679
11,472
11,530
11,537
11,564
11,572
11,532
2,717
2,718
2,766
2,838
2,768
2,689
9,673
9,723
9,737
9,772
9,833
9,870
70,587
70,414
70,531
70,182
70, 076
Dec p. 70, 364
19,402
19,271
19,285
18,684
18,547
18,920
11,217
11,134
11,145
10,602
10,460
10,836
8,185
8,137
8,140
8,082
8,087
8,084
618 3,314
619 3,305
621 3,262
621 3,278
626 3,300
625 3,308
4,539
4,520
4,511
4,509
4,494
4,443
14,933
14,912
14,961
15,011
14,931
14,827
3,676
3,670
3,684
3,696
3,711
3,720
11,514
11,521
11,622
11,665
11,695
11,718
2,668 9,923
2,659 9,937
2,649 9,936
2,654 10,064
2,661 10,111
2,652 10,151
July..
Aug..
Sept.
Oct...
Note.—Data in Tables C-27 through C-33 are based on reports from employing establishments and relate to full- and
part-time wage and salary workers in nonagricultural establishments who worked during, or received pay for, any part of
the pay period which includes the, 12th of the month.
Not comparable with labor force data (Tables C-22 through C-25), 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."
Source: Department of Labor, Bureau of Labor Statistics.
229
T A B L E G-28.—-Average joeekly hours of work i n private
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
1969
1970 v
Total
nonagricultural
private
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
37.7
37.2
Manufacturing
Total
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
NonDurable durable
goods
goods
39.2
42.0
45.0
46.5
46.5
44.0
40.4
40.5
40.4
39.4
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
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
40.6
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
41.3
39.8
40.3
32.5
34.7
33.8
37.2
40.9
39.9
34.9
37.9
Mining
Contract
construction
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
39.7
40.8
39.4
36.3
37.9
38.4
38.6
38.8
38.6
40.7
40.8
40.1
38.9
40.5
40.4
40.5
40.9
41.6
41.9
42.3
42.7
42.6
42.6
43.0
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
37.4
37.9
39.1
42.6
37.4
nonagricultural
Transporta- Wholetion
sale
and
trade
public
utilities
41.1
41.3
41.2
40.5
40.6
40.7
40.5
indus fries, 1929-70
Retail
trade
Finance,
insurance,
and
real
estate
Services
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
43.4
43.2
42.8
41.8
40.9
41.0
40.9
41.3
140.3
40.2
40.4
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
^0.7
40.3
40.1
40.2
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
34.2
37.9
37.9
37.8
37.7
37.7
37.8
37.7
37.6
37.6
36.9
36.7
37.1
37.3
37.2
36.9
37.3
37.5
37.3
37.2
37.3
37.0
37.0
37.1
40.0
33.8
36.8
36.0
35.9
35.5
35.1
34.7
34.7
34.5
40.1
40.1
40.2
40.2
40.2
40.0
40.0
40.3
40.3
40.3
40.3
40.5
40.3
40.2
40.1
40.1
40.1
39.9
40.0
39.9
39.7
39.9
39.8
39.9
34.4
34.2
34.4
34.2
34.3
34.3
34.2
34.2
34.1
34.0
34.0
33.8
33.8
33.7
33.8
33.7
33.9
33.8
33.9
33.9
33.8
33.8
33.9
33.6
37.2
37.2
37.1
37.1
37.1
37.1
37.1
37.0
37.1
37.0
37.2
36.9
36.9
37.0
37.0
36.9
36.8
36.7
36.8
36.9
36.7
36.7
36.8
36.4
34.5
34.4
34.6
34.6
34.7
34.7
35.0
35.0
34.7
34.6
34.7
34.6
34.4
34.4
34.7
34.4
34.5
34.4
34.6
34.7
34.5
34.4
34.4
34.3
Seasonally adjusted
1969:Jan..
Feb..
Mar..
Apr..
May.
JuneJuly.
Aug.
Sept.
Oct..
Nov.
Dec.
1970:Jan..
Feb..
Mar.
Apr..
May.
June.
July.
Aug.
Sept.
Oct..
NOVP
Dec p
37.9
37.5
37.7
37.8
37.8
37.7
37.7
37.7
37.7
37.5
37.6
37.6
37.5
37.3
37.4
37.2
37.1
37.2
37.3
37.2
36.8
36.9
37.0
37.0
40.6
40.1
40.9
40.8
40.7
40.7
40.6
40.6
40.7
40.5
40.5
40.7
40.3
39.9
40.2
40.0
39.8
39.8
40.1
39.8
39.3
39.4
39.6
39.7
41.4
41.0
41.5
41.4
41.4
41.3
41.3
41.2
41.4
41.2
41.1
41.3
41.0
40.5
40.7
40.4
40.3
40.4
40.7
40.3
39.8
39.9
40.0
40.1
39.8
39.1
39.9
39.8
39.8
39.7
39.8
39.7
39.7
39.6
39.6
39.8
39.6
39.3
39.4
39.4
39.1
39.0
39.3
39.1
38.6
38.9
38.9
39.0
43.2
43.2
42.9
43.5
43.3
41.8
42.6
43.1
43.1
43.0
43.5
43.2
42.7
43.4
43.2
43.1
42.6
42.4
42.5
42.2
42.0
42.7
42.9
41.8
37.7
37.9
37.9
37.9
38.2
37.6
37.6
37.9
38.1
37.6
38.1
38.2
36.7
38.2
38.0
38.3
38.1
37.6
37.4
37.3
35.1
36.9
37.1
38.2
40.9
40.8
40.8
40.8
40.7
40.6
40.7
40.5
40.8
40.9
40.7
40.8
40.7
40.7
40.6
40.2
40.6
40.6
40.7
40.6
40.5
40.5
40.4
40.2
i Beginning 1947, data include eating and drinking places.
Note.—Hours and earnings data in Tables C-28 through C-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 C-31 for unadjusted weekly hours in manufacturing. See also Note, Table C-27.
Source: Department of Labor, Bureau of Labor Statistics.
230
TABLE C-29.- -Average gross hourly earnings in private nonagricultural industries and in agriculture,
1929-70
Total
nonYear or month agricultural
private
Manufactur ng
Total
Durable
goods
Nondurable
goods
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
1969
$0. 560
.546
.509
.441 $0 492 $0,412
.437
.419
.467
.505
.526
.550
.544
520
571
.550
580
.519
.617
667
.566
.620
.572
.679
.627
.571
.691
590
.655
716
627
.726
799
.851
709
937
.957 1.048
.787
1.011 1.105
.844
1.016 1.099
.886
1 075 1 144
995
$1 131 1 217 1 278 1 145
1.225 1 328 1 395 1 250
1.275 1 378 1 453 1 295
1 335 1 440 1 519 1 347
1 45 1 56 1 65 1 44
1.51
1.75
1 52 1.65
1.58
1.86
1 61 1.74
1.62
1.90
1.78
1.65
1 67
1 99
1 71 1.86
1 80 1.95
2 08 1.77
2 19 1.85
1 89 2.05
2.11
1.91
2.26
1.95
2.19
2.02
1.98
2.36
2 43 2 05
2 09 2.26
2 14 2.32
2 49 2.11
2.22
2.39
2.17
2.56
2.46
2.22
2.28
2.63
2.53
2.29
2.36
2.71
2.61
2.45
2.79
2.36
2.72
2.56
2.90
2.45
2.83
2.68
3.00
2.57
3.01
2.85
3.19
2.74
3.19
3.04
3.39
2.91
1970P
3.22
3.36
3.56
3.08
1969: Jan
3.12
2.95
2.83
3.31
Feb . 2.96
3.12
3.31
2.84
Mar
2.97
3.13
3.32
2.85
2.99
Apr
3.15
3.34
2.87
May.... 3.02
3.35
3.16
2.88
3.04
3.37
June
3.18
2.89
3.19
July.... 3.05
2.92
3.38
Aug
3.20
2.92
3.06
3.39
Sept..-_ 3.11
3.24
2.95
3.44
Oct
2.96
3.25
3.45
3.12
Nov... 3.13
2.97
3.26
3.46
Dec
2.99
3.49
3.29
3.12
3.29
1970: Jan
3.01
3.13
3.49
Feb . . 3.15
3.29
3.01
3.48
Mar
3.03
3.17
3.31
3.51
Apr
3.04
3.18
3.52
3.32
May.... 3.20
3.05
3.55
3.34
June
3.06
3.21
3.57
3.36
3.09
3.37
3.57
July.._. 3.23
3.08
3.37
Aug
3.25
3.58
3.14
Sept.-.. 3.29
3.42
3.63
Oct
3.28
3.13
3.37
3.56
Nov P . _ . 3.29
3.15
3.39
3.58
Decp.-- 3.30
3.17
3.46
3.68
Contract
Mining construction
$1 469
1 664
1 717
1 772
1.93
2.01
2.14
2.14
2.20
2.33
2.46
2.47
2.56
2.61
2.64
2.70
2.75
2.81
2.92
3.05
3.19
3.35
3.60
3.84
3.51
3.53
3.54
3.56
3.58
3.56
3.59
3.60
3.65
3.69
3.72
3.71
3.76
3.77
3.78
3.79
3.80
3.82
3.82
3.84
3.89
3.92
3.95
3.94
Transportation Wholeand
Retail
sale
public trade trade
utilities
$1 541
1 713
1 792
1.863
2.02
2.13
2.28
2.39
2.45
2.57
2.71
2.82
2.93
3.08
3.20
3.31
3.41
3.55
$2.88
3.70
3.03
3.89
3.11
4.11
3.24
4.41
3.42
4.78
3.63
5.22
3.85
4.59
3.52
4.57
3.55
4.64
3.54
4.65
3.58
3.61
4.72
3.62
4.73
3.65
4.76
3.67
4.80
3.71
4.92
3.70
4.96
3.72
4.97
3.72
5.03
5.07
3.73
5.06
3.75
5.06
3.75
5.09
3.75
5.10
3.79
5.13
3.84
5.20
3.87
5.30
3.90
5.36
3.93
5.42
3.94
5.43
3.95
5.42
3.98
Note—See Note, Tables C-27 and C-28.
Sources: Department of Labor (Bureau of Labor Statistics) and Department of Agriculture.
Services
$0,610
.628
.658
.674
.688 $0.484
.711
494
.763
.518
.828
.559
.898
.606
.948
.653
.990
.699
1.107 2 .797
1.220
838 $1 140
1.308
.901 1 200
1.360
.951 1 260
1.427
.983 1 340
1.52
1.06
1 45
1.61
1.09
1.51
1.70
1.16
1.58
1.76
1.20
1.65
1.83
1.25
1 70
1.94
1.30
1 78
2.02
1.37
1.84
2.09
1.42
1.89
2.18
1 47 1 95
2.24
1.52
2 02
2.31
1.56
2 09
2.37
1.63
2.17
2.45
1 68 2 25
2.52
$1.94
1.75
2.30
2.61
1.82
2.05
2.39
2.73
1.91
2.47
2.17
2.88
2.01
2.58
2.29
2.16
3.05
2.75
2.43
2.30
2.92
3.23
2.63
3.44
2.84
2.44
3.07
3.12
2.25
2.53
2.87
3.16
2.26
2.57
2.90
3.16
2.27
2.57
2.90
3.18
2.28
2.58
2.88
3.20
2.29
2.60
2.90
3.24
2.30
2.61
2.93
2.30
2.91
2.63
3.23
2.30
2.62
3.24
2.92
2.33
2.67
3.28
2.93
2.35
2.69
3.29
2.95
2.36
2.72
3.33
2.99
2.35
2.72
3.34
2.98
2.74
3.35
3.02
2.38
2.77
3.38
3.04
2.40
3.40
3.05
2.79
2.41
3.40
3.03
2.41
2.79
3.41
3.04
2.43
2.80
3.42
3.04
2.43
2.81
2.44
3.42
2.83
3.06
2.44
3.45
2.85
3.08
2.48
3.47
3.09
2.90
2.48
3.12
3.49
2.91
3.14
2.49
3.52
2.94
3.14
2.47
3.53
2.96
1 Weighted average of all farm wage rates on a per hour basis.
2 Beginning 1947, data include eating and drinking places.
231
Finance,
insurance,
and
real
estate
Agriculture i
$0,241
.226
.172
.129
.115
.129
.142
.152
.172
.166
.166
.169
.206
.268
.353
.423
.472
.515
.547
.580
.559
.561
.625
.661
.672
.661
.675
.705
.728
.757
.798
.818
.834
.856
.880
.904
.951
1.03
1.12
1.21
1.33
1.42
1.38
1.21
1.29
1.37
1.50
1.29
1.38
1.46
TABLE C-30.—Average gross weekly earnings in private nonagricultural industries, 1929-70
Year or
month
Total
nonigricultural
private
Manufacturing
Total
urable
goods
Nonlurable
goods
Mining
Translontract portacontion and Wholesale
strucpublic
trade
tion
utilities
Retail
trade
Finance,
insurance,
and real
estate
Services
$24.76
$26.84
$22.47
1930
1931
1932
1933
1934 .
1935 . ....
1936
1937
1938
1939
23.00
20.6-.
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
$26.75
25.19
25.44
25.38
26.96
28.36
28.51
28.76
$21.01
1940
1941
1942
1943
1944
1945
1946
1947
1948
1949
$45. 58
49.00
50.24
24.96
29. T8
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
^8.36
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
$59.94
65.56
62.33
$58. 87
65.27
67.56
29.36
31.36
34.28
37.99
40.76
42.37
46.05
50.14
53.63
55.49
21.34
22.17
23.37
24.79
26.77
28.59
32.92
33.77
36.22
38.42
$43. 21
45.48
47.63
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
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
53.48
56.88
59.95
62.57
63.18
66.63
70.09
72.52
74.11
78.61
67.16
74.11
77.59
83.03
82.60
89.54
95.06
98.65
96.08
103.68
69.68
76.96
82. F6
86.41
83.91
90.90
96.38
100.27
103.78
108.41
58.08
62.02
65.53
69.02
71.28
74.48
78.57
81.41
84.02
88.51
39.71
42.82
43.38
45.36
47.04
48.75
50.18
52.20
54.10
56.15
50.52
54.67
57.08
59.57
62.04
63.92
65.68
67.53
70.12
72.74
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
80.67
82.60
85.91
88.46
91.33
95.06
98.82
101.84
107.73
114.61
89.72
92.34
96.56
99.63
102.97
107. 53
112.34
114.90
122.51
129. 51
97.44
80.36
100.35
82.92
104.70
85.93
108.09
87.91
112.19
90.91
117.18 94.64
122. 09 98.49
123.60 102. 03
132.07 109.05
140.01 115.53
105.44
106.92
110.43
114.40
117.74
123. 52
130.24
135. 89
142.71
154.80
113.04
118.08
122.47
127.19
132. 06
138.38
146.26
154.95
164.93
181.16
90.72
93.56
96.22
99.47
118.37 102. 31
125.14 106. 49
128.13 111.11
131.22 116.06
138.85 122.31
147. 74 129. 85
57.76
58.66
60.96
62.66
64.75
66.61
68.57
70.95
74.95
78.66
75.14
77.12
80.94
84.38
85.79
88.91
92.13
95.46
101.75
108.33
$69.84
73.60
77.04
80.38
84.32
91.26
1970 v
119.78
133.73
143.47
120.43
163. 58 195.23
155.93
137.60
82.47
112.98
97.98
1969: J a n . . .
Feb...
Mar...
Apr...
May...
June..
110.33
110.11
111.38
112.13
113.55
115.22
126. 05
124.80
127.39
127.58
128.61
130.06
136.04
135.05
137.45
137.61
138.69
139.86
111.50
110.48
113.15
113.08
114.34
115.31
150.23
149.67
149.03
154.86
155.37
150. 59
167.99
166.81
172.14
174.38
180.30
181.63
143.26
144.13
143.02
144.63
146.21
147.33
124.80
126.08
126.72
127.20
128.00
129.92
76.50
76.39
77.18
77.06
77.63
79.58
106.76
107.88
107. 59
106.85
107.30
108.70
87.03
88.15
88.92
89.01
89.70
90.83
July...
Aug...
Sept..
Oct..._
Nov...
Dec.
115.90
116.59
117.87
117.31
117.38
117.62
128.88
129.92
132.84
132.28
132.36
134.89
138.24
139. 33
143.45
142.83
142. 55
145.53
116.22
116.51
118.00
117.51
118.21
119.60
154.37
156.96
158.41
159.78
161.08
160.64
184.21
187.68
193. 36
189.97
184.39
189.13
150.02
149.74
152.11
151.70
152.15
151.78
130.17
131.22
132.18
132.59
133.87
135.94
80.96
81.19
79.69
79.20
79.30
80.14
107.96
108.04
108.41
109.45
111.23
110.26
92.84
92.49
92.38
92.81
94.11
94.11
1970: J a n . . .
Feb..
Mar..
Apr...
May..
June..
116.12
116.55
117.92
117.34
118.40
120.05
131.93
130.94
132.40
131.80
132.93
134.40
142.04
140.24
142. 51
141.50
143.07
144.94
117.99
117.69
118.78
118.56
118.95
119.95
159.05
160.60
160.27
163.35
162.26
163.88
181.00
186.21
188.23
192.91
194.31
196.99
151.07
151.88
150.75
149.25
153.12
156.29
134.67
135.20
136.00
135.66
136. 06
136.80
79.49
79.92
80.49
80.25
81.41
82.86
111.44
112.48
112.85
111.81
111.57
111.57
93.98
95.01
96.81
95.70
96.04
96.95
JulyAug._
Sept..
Oct...
121.4
122.20
121.73
121.36
121.40
122.43
134.46
134.13
135.43
133.45
134.58
138.40
143.87
143.9;
145. 56
142.76
143.56
149.04
121.44
121.04
122.15
122.07
123.17
124.26
163.88
163.97
164.55
168.56
168.67
165.09
200.20
204.05
194.03
203.79
196.57
203.79
159.06
159.51
159.95
159.96
160.37
160.00
137.83
138.35
137.76
139.25
139.74
141.55
85.16
85.40
84.07
83.08
83.42
83.73
112.61
113.65
113.09
114.82
115.55
114.61
98.77
99.75
99.76
99.81
100.84
101. 53
1929
NOV r>_
Dec p.
i Beginning 1947, data include eating and drinking places.
Note.—See Note, Tables C-27 and C-28.
Source: Department of Labor, Bureau of Labor Statistics.
232
TABLE C-31.—Average weekly hours and hourly earnings, gross and excluding overtime, in
manufacturing industries, 1939—70
Durable goods manufacturing industries
Al 1 manufacturing 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
Gross
Excluding
overtime
Gross
Ex- Adjusted
ExExclud- hourly
cludcluding earnings, Gross ing Gross ing
overover- (1967=
overtime
100)i
time
time
$0.627
2 25.4
2 28.5
2 31.0
2 33.2
2 34.6
2 38.3
44.0
48.1
50.3
.716
.799 $0.762
937
87?
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
37.0
38.9
40.3
42.5
43.1
42.3
40.5
40.2
39.6
38.9
.590
.627 $0.613
709
fiR4
.787 .748
.844 .798
.886 3.841
.995 .962
11
1.145
1 250 ?1
1 295 ?6
1.39
1.51
1.59
1.68
1.73
1.79
1.89
1.99
2.05
2.12
51.9
56.0
58.9
62.1
64 1
66.1
69.6
73.2
76.2
78.6
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
1 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
39 5
39.7
39.6
39 0
39.9
39.6
39.2
38, 8
39.7
37.2
37.0
36.6
37.0
1.347
31
40
1 44
1.51
46
1.58
.53
1 62
58
fi?
1 67
,7?
1.77
,80
1.85
1,91 1.86
1.98 1.92
2.26
2.32
2.39
2.46
2.53
2.61
2.72
2.83
3.01
3.19
2.20
2.25
2.31
2.37
2.44
2.51
2.59
2.72
2.88
3.06
81.2
83.6
85.7
87.8
90.0
92.4
95.5
100.0
106.1
112.3
40.1
40.3
40.9
41.1
41.4
42.0
42 1
41.2
41.4
41.3
37.7
38.0
38.1
38.2
38.1
38.1
37 8
37.7
37.6
37.5
2.43
2.49
2.56
2.63
2.71
2.79
2.90
3.00
3.19
3.39
2.36
2.42
2.48
2.54
2.60
2.67
2.76
2.88
3.05
3.24
39.2
39,3
39.6
39.6
39 7
40,1
40.2
39.7
39 8
39.7
36.7
36.8
36.9
36.9
36.8
36.9
36.8
36.6
36.5
36.3
? 05
? ,11
?. 17
2.22
? ?9
?,36
2.45
?.57
? 74
2.91
1.99
2.05
2.09
?.15
?.?1
2.27
? 35
2.47
2.63
2.79
36.8
3.36
3.24
119.6
40.3
37.4
3.56
3.44
39.1
36.1
3.08
2.97
36 8
36.7
37 2
37.0
37 1
37.2
3.12
3.12
3.13
3.15
3.16
3.18
2.99
3.00
3.00
3.02
3.03
3.04
109.8
110.2
110.4
111.0
111.5
111.7
41.1
40.8
41.4
41.2
41.4
41.5
37.4
37.2
37.7
37.6
37.7
37.6
3.31
3.31
3.32
3.34
3.35
3.37
3.17
3.18
3.18
3.20
3.20
3.22
39.4
38.9
39.7
39,4
39.7
39.9
36.1
35.9
36.5
36.2
36.4
36.5
2.83
2.84
2.85
2.87
2.88
2.89
2.72
2.73
2.74
2.76
2.77
2.77
40.4
40.6
41.0
40.7
40.6
41.0
36.9
36.9
37.0
37.0
37.0
37.4
3.19
3.20
3.24
3.25
3.26
3.29
3.06
3.06
3.09
3.11
3.12
3.15
112.4
112.9
113.7
114.2
114.8
115.6
40.9
41.1
41.7
41.4
41.2
41.7
37.3
37.3
37.5
37.5
37.5
37.9
3.38 3.24
3.39 3.24
3.44 3.28
3.45 3.29
3.46 '3.31
3.49 3.34
39,8
39.9
40.0
39.7
39.8
40.0
36.4
36.4
36.3
36.2
36.4
36.6
?.92
2.92
2.95
2.96
?.97
2.99
2.80
2.80
2.82
2.84
2.85
2.87
40.1
39.8
40.0
39.7
39.8
40.0
36.9
36.8
37.0
36.9
36.9
36.9
3.29
3.29
3.31
3.32
3.34
3.36
3.17
3.17
3.19
3.21
3.22
3.23
116.3
116.7
117.4
118.0
118.8
119.1
40.7
46.3
40.6
40.2
40.3
40.6
37.4
37.3
37.5
37.4
37.4
37.4
3.49
3.48
3.51
3.52
3.55
3.57
3.36
3.36
3.38
3.40
3.42
3.44
39.2
39.1
39.2
39.0
39.0
39.2
36.1
36.1
36.2
36.2
36.1
36.2
3.01
3,01
3.03
3 04
3 05
3.06
2.90
2.90
2.92
2.93
2.94
2.95
. . 39.9
39.8
39.6
39.6
39.7
40.0
37.0
36.8
36.5
36.7
36.9
37.3
3.37
3.37
3.42
3.37
3.39
3.46
3.25
3.25
3.29
3.26
3.28
3.35
119.7
120.3
121.5
121.0
121.7
124.4
40.3
40.2
40.1
40.1
40.1
40.5
37.4
37.3
37.1
37.3
37.5
37.8
3.57
3.58
3.63
3.56
3.58
3.68
3.45
3.46
3.49
3.44
3.46
3.56
39.3
39.3
38.9
39.0
39.1
39.2
36.4
36.2
35.8
36.0
36.2
36.4
3.09
3.08
3.14
3.13
3 15
3.17
2.98
2.97
3.02
3.01
3.04
3.06
38 1
40.6
43 1
45 0
45.2
43.5
40 3
40 4
40 0
39 1
.655
.726 $0.691
.851 .793
.957 .881
1.011 .933
1.016 3.949
1.075 1.035
1.217 1.18
1 328 1.29
1.378 1.34
1950
1951
1952
1953
1954
1955
1956
1957
1958...
1959
40 5
40 6
40.7
40.5
39 6
40 7
40.4
39.8
39.2
40.3
37 6
37.5
37.2
37.6
1.440
1 56
1.65
1.74
1 78
1 86
1.95
2.05
2.11
2.19
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
39.7
39.8
40.4
40.5
40.7
41.2
41 3
40.6
40.7
40.6
37.3
37.4
37.6
37 7
37.6
37.6
37 4
37.2
37.1
37.0
1970 P .
39.8
1969: Jan
Feb
40.4
40.0
40 7
40.5
40.7
40.9
Apr.
May
July
Aug
Sept
Oct
Nov
Dec
1970: Jan
Feb
Mar
Apr
May
June
July
Aug
Sept
Oct
NOVP
Dec p
$0.571
39.2
42.0
45.0
46.5
46.5
44.0
40.4
40.5
40 4
39 4
1940
1941
1942
1943
1944
1945
1946
1947
1948
1949
June _
37.4
37.9
37.7
Mar
ExExcludcluding Gross ing
overovertime
time
24.5
1939
.
Gross
$0.691
1 Earnings in current prices adjusted to exclude the effects of overtime and interindustry shifts.
2 Annual average not available; April used.
3 Eleven-month average; August 1945 excluded because of VJ Day holiday period.
Note—See Note, Tables C-27 and C-28.
See Table C-28 for seasonally adjusted average gross weekly hours.
Source: Department of Labor, Bureau of Labor Statistics.
233
T A B L E G—32.—Average weekly earnings, gross and spendable, total private
industries, in current and 1967 prices, 1947—70
nonagricultural
Average spendable weekly earnings 2
Average gross weekly
earnings
Year or month
Current
prices
1967
prices^
Worker with no
dependents
Current
prices
1967
p rices i
Worker with three
dependents
Current
prices
1967
prices i
1949
$45.58
49.00
50.24
$68.13
67.96
70.36
$39.16
43.11
44.15
$58.54
59.79
61.83
$44.64
48.51
49.74
$66.73
67.28
69.66
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
73.69
74.37
76.29
79.60
80.15
84.44
86.90
86.99
86.70
90.24
46.02
48.68
50.07
52.45
53.76
56.27
58.63
60.47
61.83
64.52
63.83
62.57
62.98
65.48
66.78
70.16
72.03
71.73
71.40
73.91
52.04
55.79
57.87
60.31
60.85
63.41
65.82
67.71
69.11
71.86
72.18
71.71
72.79
75.29
75.59
79.06
80.86
80.32
79.80
82.31
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
80.67
82.60
85.91
88.46
91.33
95.06
98.82
101.84
107.73
114.61
90.95
92.19
94.82
96.47
98.31
100. 59
101.67
101.84
103.39
104.38
65.59
67.08
69.56
71.05
75.04
78.99
81.29
83.38
86.71
90.96
73.95
74.87
76.78
77.48
80.78
83.59
83.63
83.38
83.21
82.84
72.96
74.48
76.99
78.56
82.57
86.30
88.66
90.86
95.28
99.99
82.25
83.13
84.98
85.67
88.88
91.32
9h21
90.86
91.44
91.07
1970*
119.78
3 103.17
96.18
3 82.84
104.86
3 90.32
1969: Jan
Feb
Mar
Apr
May
June
110.33
110.11
111.38
112.13
113. 55
115.22
103.40
102.81
103.13
103.16
104.17
105.03
87.76
87.65
88.80
89.14
90.18
91.40
82.25
81.84
82.22
82.01
82.73
83.32
96.68
96.57
97.76
98.11
99.19
100.46
90.61
90.17
90.52
90.26
91.00
91.58
July
Aug
Sept
Oct
115.90
116. 59
117.87
117.31
117.38
117.62
105.17
105.32
106.00
105.12
104.62
104.18
91.90
92.41
93.35
92.94
92.99
93.17
83.39
83.48
83.95
83.28
82.88
82.52
100.98
101. 51
102.49
102.06
102.11
102.30
91.63
91.70
92.17
91.45
91.01
90.61
1970: J a n . .
Feb
Mar
Apr..
May
June
116.12
116. 55
117.92
117.34
118.40
120.05
102.49
102.33
102.99
101.86
102.33
103.22
93.43
93.76
94.78
94.35
95.14
96.38
82.46
82.32
82.78
81.90
82.23
82.87
101.97
102.32
103.39
102.95
103.77
105.08
90.00
89.83
90.30
89.37
89.69
90.35
July
Aug
Sept.
Oct.
121.45
122.20
121.73
121. 36
121.40
122.43
104.07
104. 53
103.60
102.76
102.45
97.43
97.99
97.64
97.36
97.39
98.16
83.49
83.82
83.10
82.44
82.19
106.18
106.78
106.40
106.11
106.14
106.96
90.99
91.34
90. 55
89.85
89.57
1947
1948..
Nov
Dec.
Deep
1 Earnings in current prices divided by the consumer price index on a 1967 base.
2 Average gross weekly earnings less social security and income taxes.
3 Based on 11-month average for the consumer price index.
Note.—"Total private" consists of manufacturing; mining; contract construction; transportation and public utilities;
wholesale and retail trade; finance, insurance, and real estate; and services.
See also Note, Tables C-27 and C-28.
Source: Department of Labor, Bureau of Labor Statistics.
234
TABLE C-33.—Average weekly earnings, gross and spendable, in manufacturing industries, in
current and 1967 prices, 1939-70
Average spendable weekly earnings 2
Average gross weekly
earnings
Year or month
Current
prices
1967
prices
l
Worker with no
dependents
Current
prices
1967
prices 1
Worker with three
dependents
Current
prices
1967
prices *
1939
$23.64
$56.83
$23.37
$56.18
$23.40
$56.25
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
59.43
66.85
75.16
83.15
86.72
82.00
74.05
73.50
73.68
75.46
24.46
27.96
31.80
35.95
37.99
36.82
37.31
42.10
46.57
47.21
58.24
63.40
65.16
69.40
72.09
68.31
63.78
62.93
64.59
£6.12
24.71
29.19
36.31
41.33
43.76
42.59
42.79
47.58
52.31
52.95
58.83
66.19
74.41
79.79
83.04
79.02
73.15
71.12
72.55
74.16
1950.
1951
1952
1953
1954
1955.
1956
1957
1958
1959
58.32
63.34
67.16
70.47
70.49
75.70
78.78
81.59
82.71
88.26
80.89
81.41
84.48
87.98
87.57
94.39
96.78
96.79
95.51
101.10
50.26
52.97
55.04
57.59
58.45
62.51
64.92
66.93
67.82
71.89
69.71
68.08
69.23
71.90
72.61
77.94
79.75
79.40
78.31
82.35
56.36
60.18
62.98
65.60
65.65
69.79
72.25
74.31
75.23
79.40
78.17
77.35
79.22
81.90
81.55
87.02
88.76
88.15
86.87
90.95
1960
1961
1962..
1963
1964
1965
1966
1967
1968
1969
89.72
92.34
96.56
99.63
102.97
107. 53
112.34
114.90
122.51
129. 51
101.15
103.06
106. 58
108.65
110.84
113.79
115.58
114.90
117.57
117.95
72.57
74.60
77.86
79.82
84.40
89.08
91.57
93.28
97.70
101.90
81.82
83.26
85.94
87.04
90.85
94.26
94.21
93.28
93.76
92.81
80.11
82.18
85.53
87.58
92.18
96.78
99.45
101.26
106.75
111.44
90.32
91.72
94.40
95.51
99.22
102.41
102.31
101.26
102.45
101.49
1970*
133.73
3 115.19
106.62
3 91.83
115.90
3 99.83
1969: Jan.
Feb
Mar_
Apr_
May_
June
126.05
124.80
127.39
127. 58
128.61
130.06
118.13
116.53
117.95
117.37
117.99
118.56
99.36
98.44
100.34
100.48
101.24
102.30
93.12
91.91
92.91
92.44
92.88
93.25
108.78
107.82
109.81
109.95
110.74
111.86
101.95
100.67
101.68
101.15
101.60
101.97
Jiily.
Aug.
Sept
Oct.
Nov.
Dec
128.88
129.92
132.84
132.28
132. 36
134.89
116.95
117.36
119.46
118.53
117.97
119.48
101.43
102.20
104. 34
103.93
103.99
105.85
92.04
92.32
93.8?
93.13
92.68
93.76
110.95
111.75
114.01
113.57
113.63
115.61
100.68
100.95
102.53
101.77
101.27
102.40
1970: Jan
Feb.
Mar.
Apr.
May.
June
131.93
130.94
132.40
131.80
132.93
134.40
116.44
114.96
115.63
114.41
114.89
115.56
105.28
104. 53
105.63
105.18
106.02
107.13
92.92
91.77
92.25
91.30
91.63
92.12
114.48
113.69
114.85
114.37
115.27
116.43
101.04
99.82
100.31
99.28
99.63
100.11
July.
Aug.
Sept
Oct..
Nov
Dec
134.46
134.13
135.43
133.45
134.58
138.40
115.22
114.74
115.26
113.00
113.57
107.17
106 92
107.90
106.41
107.26
110.12
91.83
91.46
91.83
90.10
90.51
116.48
116.22
117.25
115.68
116.58
119.62
99.81
99.42
99.79
97.95
98.38
1 Earnings in current prices divided by the consumer price index on a 1967 base.
2 Average gross weekly earnings less social security and income taxes.
Based on 11-month average for the consumer price index.
3
Note—See Note, Tables C-27 and C-28.
Source: Department of Labor, Bureau of Labor Statistics.
235
TABLE C-34.—Indexes of output per man-hour and related data, private economy, 1947-70
[1967=100]
Nonfarm industries
Year
Total
private
Farm
Total
Manufacturing
Nonmanufacturing
Nonfarm industries
Total
private
Farm
Total
Outputx
Manufacturing
Nonmanufacturing
Nonfarm industries
Total
private
Farm
Total
Man-hours 2
Manufacturing
Nonmanufacturing
Output per man-hour
1947... 45.6
1948... 47.8
1949... 47.6
71.1
79.5
77.0
44.5
46.5
46.4
44.7
46.9
44.2
44.5
46.3
47.6
88.8 243.4
89.2 233.9
86.2 232.4
78.0
79.1
76.0
81.5
80.9
73.7
76.4
78.2
77.1
51.3
53.6
55.3
29.2
34.0
33.1
57.1
58.8
61.1
54.8
57.9
60.0
58.2
59.2
61.8
1950...
1951...
1952...
1953...
1954...
1955...
1956...
1957...
1958...
1959...
52.5
55.8
57.2
60.1
59.3
64.3
65.6
66.5
65.6
70.2
81.2
77.0
79.5
83.7
85.4
87.4
87.0
84.9
87.0
88.3
51.3
55.0
56.3
59.1
58.3
63.4
64.7
65.7
64.8
69.5
51.3
56.5
57.8
62.6
58.2
65.0
65.3
65.5
60.2
67.6
51.4
54.1
55.5
57.3
58.3
62.5
64.4
65.9
67.2
70.4
87.9 215.1
90.7 203.1
91.2 192.8
92.0 179.3
88.6 173.9
92.1 176.7
93.7 168.6
92.3 155.3
88.4 144.2
91.2 143.6
79.0
82.9
84.1
85.9
82.6
86.1
88.4
87.9
84.5
87.6
79.8
85.9
87.3
91.6
83.7
88.2
89.5
88.1
80.9
86.1
78.6
81.5
82.6
83.2
82.2
85.2
87.9
87.8
86.1
88.3
59.7
61.5
62.7
65.3
66.9
69.9
70.0
72.0
74.3
76.9
37.7
37.9
41.2
46.7
49.1
49.5
51.6
54.7
60.4
61.5
65.0
66.3
66.9
68.9
70.5
73.6
73.2
74.8
76.7
79.3
64.4
65.9
66.2
68.3
69.5
73.7
72.9
74.4
74.4
78.5
65.3
66.4
67.2
68.9
71.0
73.4
73.3
75.0
78.0
79.8
1960...
1961...
1962...
1963...
1964...
1965...
1966...
1967...
1968—
1969...
71.9
73.2
78.2
81.5
86.2
91.8
97.7
100.0
104.9
107.9
91.6
92.9
92.5
95.4
93.3
99.2
93.7
100.0
99.6
98.7
71.1
72.5
77.6
80.9
85.9
91.5
97.9
100.0
105.1
108.3
68.6
68.3
75.2
79.0
84.5
92.7
100.1
100.0
106.7
110.9
72.5
74.6
78.9
81.9
85. 6
90.9
96.7
100.0
104.3
106.9
92.0
90.6
92.4
92.9
94.5
97.4
99.7
100.0
101.9
104.1
141.2
132.6
129.0
122.1
117.4
114.1
103.6
100.0
98.2
92.0
88.6
87.7
89.8
90.9
92.9
96.3
99.5
100.0
102.1
104.9
85.8
83.5
86.9
87.7
89.4
94.3
100.2
100.0
101.9
103.7
89.9
89.6
91.2
92.3
94.6
97.2
99.1
100.0
102.3
105.5
78.2
80.9
84.7
87.7
91.1
94.2
98.0
100.0
102.9
103.7
64.9 80.3 79.9
70.0 82.7
81.8
71.7
86.4 86.6
78.1 89.1 90.1
79.5 92.4 94.5
86.9 95.1 98.3
90.5 98.4 99.9
100.0 100.0 100.0
101.4 102.9 104.7
107.3 103.2 106.9
80.6
83.3
86.5
88.7
91.5
93.5
97.6
100.0
101.9
101.4
1970 *__ 107.5
96.7
107.9
106.4
108.7
102.7
85.5
103.9
98.5
104.6
113.1
102.1
Compensation per man-hour3
103.8
108.1
Implicit price deflator4
Unit labor cost
1947... 36.2
1948... 39.5
1949— 40.1
38.3
41.8
43.0
37.1
40.7
42.6
38.9
42.3
43.3
70.6
73.7
72.5
67.1
71.0
70.3
67.7
70.3
71.0
66.9
71.4
70.0
66.4
70.9
70.2
63.8
68.2
68.7
66.9
71.3
72.8
62.3
66.6
66.6
1950.
1951.
1952.
1953.
1954.
1955.
1956.
1957.
1958...
1959
42.8
46.9
49.8
52.9
54.5
55.9
59.5
63.3
66.0
69.0
45.3
49.3
52.0
54.9
56.6
58.6
62.0
65.5
68.1
71.0
44.7
49.3
52.4
45.7
49.1
51.5
54.2
55.9
57.6
60.8
64.3
67.0
69.7
71.7
76.3
79.4
81.0
81.5
80.1
85.0
87.9
88.9
89.8
69.7
74.3
77.6
79.7
80.3
79.6
84.7
87.6
88.7
89.5
69.5
74.8
79.1
80.9
83.2
81.4
87.6
91.1
94.9
93.7
69.9
73.9
76.6
78.7
78.8
78.4
82.9
85.7
85.9
87.3
70.9
76.1
77.5
78.1
79.1
79.8
82.3
85.3
87.1
88.3
69.4
74.0
75.9
77.2
78.5
79.5
82.3
85.3
86.8
88.3
73.0
77.9
79.6
80.0
81.6
83.1
86.9
89.7
91.9
93.3
67.7
71.8
74.0
75.9
76.9
77.9
80.0
83.2
84.3
85.9
1960
1961
1962
1963—
1964
1965—
1966...
1967.
1968.
1969...
71.7
74.4
77.7
80.8
84.9
88.4
94.5
100.0
107.6
115.4
73.9
76.3
79.3
82.2
86.1
89.2
94.6
100.0
107.
114.5
76.6 72.6
79.0 75.2
82.3 77.9
85.0 80.9
89.0 84.8
91.2 88.3
95.3 94.2
100.0 100.0
107.1 107.5
113.9 115.0
91.8
92.1
91.8
92.1
93.1
93.8
96.5
100.0
104.6
111.3
92.0 95.9 90.0
92.3 96.5 90.2
91.8 95.0 90.1
92.3 94.4 91.2
93.2 94.1 92.7
93.9 92.8 94.4
96.2 95.5 96.5
100.0 100.0 100.0
104.3 102.3 105.4
111.0 106.6 113.5
89.5
90.
91.2
92.2
93.2
94.8
97.2
100.0
103.6
108.2
89.6 94.1
90.4 94.4
91.2 94.4
92.3 94.5
93.4 95.4
94.8 95.7
96.8 97.4
100.0 100.0
103.6 102.3
108.0 104.5
87.3
88.5
89.7
91.1
92.4
94.3
96.6
100.0
104.3
109.9
1970
123.6
122.3
121.6
123.3
118.1
117.8
113.4
113.2
P..
57.8
60.0
63.9
67.7
70.6
73.5
112.5
120.8
1 Output refers to gross national product in 1958 prices.
2 Hours of all persons in private industry engaged in production, including man-hours of proprietors and unpaid family
workers. Man-hours estimates based primarily on establishment data.
3 Wages and salaries of employees plus employers' contribution for social insurance and private benefits plans. Also
includes an estimate of wages, salaries, and supplemental payments for the self-employed.
4
Current dollar gross product divided by constant dollar product.
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.
236
PRODUCTION AND BUSINESS ACTIVITY
TABLE C-35.—Industrial production indexes, major industry divisions, 1929-70
[1957=100]
Total
industrial
production
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
1969
1970 v . . .
24.3
20.2
16.8
13.1
15.4
16.8
19.4
23.0
25.1
19.9
24.2
27.8
35.7
43.8
52.4
51.7
44.6
37.6
41.6
43.3
40.9
47.4
51.4
53 3
57.7
54.3
61.1
63.2
63.7
59.3
66.8
68.8
69.4
74.8
78.6
83.7
90.7
98.9
100 0
104.7
109.3
106
. . .
Manufacturing
Mining
Total
24.2
19.8
16.2
12.5
14.8
16.3
19.2
22.8
24.9
19.1
23.7
27.4
36.5
45.8
55.5
54.0
45.7
37.6
41.6
43 1
40.8
47.5
51.3
53 4
58.0
54.0
60.9
62.7
63.1
58.4
66.4
68.2
68.6
74.3
78.2
83.3
90.8
99.3
100.0
104.5
108.9
104
Durable
23.3
17.3
11.9
7.3
9.5
11.5
14.7
19.1
21.5
13.8
19.2
24.4
35.2
48.8
62.9
61.6
47.8
33.4
39.3
40.9
37.2
45.3
51.0
54.1
61.0
54.0
62.2
63.5
63.5
55.2
64.5
66.3
65.4
72.0
76.1
81.6
90.7
100.7
100.0
103.7
107.8
101
Utilities
Nondurable
24.8
22.5
21.2
18.7
21.2
21.9
24.2
26.9
28.5
25.3
29.0
30.6
37.3
41.2
45.7
44. i
42.4
41.9
43.5
45.0
44.2
49.2
50.8
51.7
54.1
54.1
59.2
61.7
62.5
62.6
68.9
70.8
73.0
77.5
81.0
85.8
91.1
97.5
100.0
105.6
110.3
110
43.8
38.0
32.6
27.1
31.1
32.6
35.3
40.6
45.8
39.6
43.5
48.5
52.3
54.1
55.7
59.9
59.0
58.3
64.5
67.9
60.2
67.2
73.7
73.1
75.0
72.9
80.1
84.7
84.5
77.2
80.5
82.1
82.9
84.8
87.2
90.1
92.7
97.3
100.0
102.3
105.2
110
6.9
7.1
6.1
6.8
6.3
6.2
7.6
8.1
8.9
8.9
9.9
11.0
12.3
13.8
15.3
16.3
16.5
17.2
19.7
22.1
23.5
26.8
30.5
33.1
36.1
38.8
43.4
47.5
50.8
53.1
58.4
62.5
66.1
71.1
75.7
81.8
87.0
94.1
100.0
109.5
119.6
128
101.6
100.8
102.3
104.0
105.3
108.6
107.6
106.0
106.3
105.2
107.1
108.6
106.4
108.4
109.1
108.2
108.9
109.5
108.1
110.7
112.2
113.0
113.1
112
116.3
116.2
116.3
117.0
115.5
116.6
120.2
120.4
120.3
122.2
122.2
123.3
124.4
125.9
124.6
126.4
127.0
127.3
127.8
127.5
131.3
132.4
129.5
129.8
Seasonally adjusted
1969: Jan
Feb -.
Mar
Apr
. .
May
June
July
Aug
Sept
Oct
Nov
Dec
1970: Jan
Feb
Mar
Apr . .
May
June
July
Aug
Sept
Oct
Nov p
Dec p
. ..
107.0
107.6
108.4
108.6
109.1
109.9
110.4
110.2
110.0
109.5
108.4
108.2
107.8
107.8
108.2
107.7
106.9
106.8
107.0
106.8
104.9
102.7
102.2
103.7
106.6
107.6
108.4
108.3
108.8
109.5
110.0
109.8
109.7
108.9
107.6
107.3
106.6
106.6
107.0
106.4
105.3
105.2
105.5
105.0
102.5
99.8
99.4
101.2
105.7
106.6
107.5
107.3
107.9
108.9
109.2
109.2
109.2
108.3
105.1
104.5
103.7
103.6
104.5
102.9
102.4
102.2
102.3
101.8
98.0
93.8
92.7
95.4
107.8
108.9
109.6
109.7
110.2
110.3
111.1
110.8
110.5
109.6
110.9
110.9
110.6
110.8
110.3
111.2
109.1
109.2
110.0
109.3
108.5
107.8
108.5
109
Note.—The indexes in this table were converted to a 1967 base from the Federal Reserve indexes published on a 1957-59
base.
Source: Board of Governors of the Federal Reserve System.
237
411-364 0 — 7 1 -
-16
TABLE C—36.—Industrial production indexes, market groupings, 1947—70
[1967=100]
Materials
Final products
Year or month
Total
industrial
production
Consumer goods i
Total
Total
Equipment
Automotive
products
Home
goods
Total,
including
defense
Total
Business
Durable
goods
Nondurable
goods
1947.
1948.
1949.
41.6
43.3
40.9
40.6
42.1
40.7
45.2
46.6
46.3
46.5
48.7
48.3
41.4
43.2
39.9
30.9
32.5
29.0
38.2
39.7
34.7
42.5
44.5
41.1
44.9
46.7
42.3
39.6
41.6
39.2
1950.
1951.
1952.
1953
1954.
47.4
51.4
53.3
57.7
54.3
46.0
49.7
53.3
56.8
54.1
52.9
52.4
53.5
57.2
56.8
60.8
53.7
48.4
61.2
57.0
55.1
47.4
47.5
54.3
51.8
31.4
43.7
52.5
56.0
49.6
37.2
45.5
51.5
52.8
46.6
48.7
53.1
53.4
58.7
54.4
52.3
57.8
58.5
66.3
58.2
44.7
48.1
48.2
51.3
50.8
1955.
1956.
1957.
1958.
1959.
61.1
63.2
63.7
59.3
66.8
59.3
62.0
62.8
59.9
66.8
62.8
64.3
65.3
64.9
71.8
79.3
65.6
70.6
58.1
72.5
58.6
60.8
58.2
55.9
66.7
53.0
57.8
58.3
50.9
58.0
50.3
57.3
57.6
49.1
57.4
62.7
64.4
64.6
58.7
66.8
68.9
69.3
69.0
59.2
69.2
56.7
59.6
60.3
58.2
64.5
1960.
1961.
1962.
1963
1964.
68.8
69.4
74.8
78.6
83.7
69.4
70.2
75.6
78.9
83.3
74.7
75.8
80.6
84.3
88.7
82.6
75.0
87.9
94.7
97.3
66.7
67.6
73.6
78.1
85.0
60.0
60.4
66.7
69.2
73.6
60.3
60.2
66.8
70.2
76.1
68.2
68.7
74.1
78.4
84.2
70.2
69.0
75.1
79.8
86.4
66.3
68.5
73.2
77.1
82.0
1965.
1966.
1967.
1968
1969.
90.7
98.9
100.0
104.7
109.3
90.0
98.2
100.0
104.3
107.9
94.5
99.3
100.0
105.7
109.4
112.1
109.3
100.0
116.9
116.2
93.3
101.7
100.0
105.7
110.8
81.9
96.2
100.0
101.8
105.1
85.7
99.1
100.0
101.0
107.0
91.4
99.5
100.0
105.1
110.6
95.0
103.3
100.0
103.9
109.0
87.9
95.9
100.0
106.2
112.2
1970
106
105
109
101
108
103
108
102
113
98
Seasonally adjusted
1969: Jan__.
Feb._.
Mar...
Apr._.
May..
June..
107.0
107.6
108.4
108.6
109.1
109.9
106. 3
106. 9
107. 9
107. 5
107. 4
107. 8
108.4
108.9
109.6
109.0
108.2
108.8
118.2
117.2
117.6
111.4
111.2
119.9
111.0
110.2
112.2
112.1
112.0
112.1
102.3
103.4
104.7
105.0
105.9
106.1
104.7
105.0
105.5
106.2
107.1
107.8
107.5
108.2
109.1
109.6
110.6
111.7
106.1
107.0
108.0
109.2
109.0
109.9
108.8
109.3
110.0
110.0
112.1
113.4
July..
Aug...
Sept..
Oct...
Nov...
Dec.
110.4
110.2
110.0
109.5
108.4
108.2
109.2
109. 1
108.8
108. 0
106. 4
106. 4
110.7
110.6
109.6
108.6
108.1
108.2
123.8
120.4
118.4
115.9
112.7
107.9
111.1
111.1
109.2
108.1
100.4
100.5
106.4
106.1
107.2
107.0
103.5
103.2
107.7
107.8
109.6
109.9
106.3
106.0
111.9
111.5
111.5
111.2
110.6
110.2
109.9
110.1
109.7
109.2
107.6
106.5
113.7
112.7
113.2
113.1
113.5
113.8
1970: Jan..
Feb..
Mar..
Apr_.
May._
June.
107.8
107.8
108.2
107.7
106.9
106.8
106. 4
107. 3
107. 2
106. 4
105. 9
105.6
108.8
109.4
109.1
109.9
109.9
109.6
104.2
103.8
107.3
106.2
111.6
114.2
102.2
105.3
108.1
108.4
107.5
107.0
102.3
103.8
103.8
100.3
98.8
98.3
105.5
107.7
108.3
105.6
103.2
102.8
109.3
108.7
108.8
108.9
108.0
108.5
105.4
103.9
104.7
105.1
103.7
103.9
113.1
113.2
112.7
112.6
112.1
112.8
107.0
106.8
104.9
102.7
102.2
103.7
105. 4
110.1
110.1
107.8
105.7
105.6
108.1
115.9
112.3
89.3
73.4
74.3
99
109.9
110.7
107.8
108.6
108.6
96.8
96.4
94.5
92.5
91.8
91.9
101.8
101.7
99.7
97.9
97.4
98
108.6
108.5
107.0
104.6
103.9
105.0
104.3
103.6
100.0
95.3
93.7
96
112.8
113.1
113.7
113.5
113.7
114
July __
Aug...
Sept._
Oct....
Nov p.
Dec p.
105 2
103 0
101 0
100 6
102.2
* Also includes apparel and consumer staples, not shown separately.
Note.—The indexes in this table were converted to a 1967 base from the Federal Reserve indexes published on a 195759 base.
Source: Board of Governors of the Federal Reserve System.
238
TABLE C-37.—Industrial production indexes, selected manufactures, 1947-70
[1967=100]
Durable manufactures
Year or
month
Primary
metals
Fabricated
Mametal chinery
products
Transportation
equipment
Nondurable manufactu
InstruFurni- Textiles,
ments
Clay,
ture apparel, Paper
and re- glass,
and
and
lated
and
and
miscelprod- lumber laneous leather printing
ucts
Chemicals,
petroleum,
and
rubber
Foods,
beverages,
and
tobacco
1947..
1948..
1949..
68.5
71.2
59.9
46.9
47.7
43.1
35.6
36.3
32.2
25.9
28.3
28.4
29.1
29.9
26.6
58.0
61.0
55.3
45.2
47.6
44.0
58.1
60.6
57.8
44.6
46.4
46.3
25.0
26.7
26.0
61.3
60.7
61.4
1950..
1951..
1952..
1953..
1954..
75.4
82.0
74.9
84.9
68.9
52.7
56.3
55.0
62.0
55.7
39,6
45.3
50.2
54.8
47.8
34.0
38.0
44.1
55.3
50.6
31.0
35.6
42.3
46.2
44.9
67.1
70.4
68.3
70.9
68.6
51.5
49.3
50.7
55.2
53.4
63.9
62.7
64.2
65.1
62.3
51.3
53.1
51.9
55.2
56.8
31.9
35.5
36.8
39.6
39.3
63.5
64.8
66.3
67.0
68.2
1955..
1956..
1957—
1958..
1959..
89.4
87.8
84.7
66.0
75.8
60.7
61.0
62.7
57.4
65.2
52.6
58.4
56.8
48.4
58.4
61.6
58.8
64.2
54.0
62.8
48.0
51.6
53.0
49.8
59.5
77.0
78.0
74.6
72.0
83.0
60.2
62.1
60.0
57.4
67.0
68.5
70.3
69.5
68.1
77.5
61.8
64.9
65.4
64.8
70.3
45.7
48.1
50.3
50.3
57.3
70.7
73.3
73.4
75.5
78,9
I960..
1961..
1962..
1963..
1964..
76.5
74.6
78.9
85.5
97.4
66.5
65.8
72.3
76.2
82.0
60.4
60.2
67.3
70.4
77.1
65.3
62.5
71.4
76.6
78.9
63.0
62.7
66.6
70.5
73.8
80.9
80.0
83.6
87.5
92.7
69.7
70.2
76.6
79.4
85.1
77.1
77.8
82.6
85.0
89.8
72.9
75.1
78.0
80.3
85.2
59.9
62.6
69.1
74.6
80.3
80.9
83.7
86.0
88.7
91.7
1965..
1966..
1967..
1968..
1969..
103.8
107.7
100.0
103.4
112.5
91.3
100.7
100.0
103.7
111.1
87.5
100.2
100.0
100.5
106.7
90.0
100.7
100.0
108.3
105.4
81.9
95.5
100.0
99.7
105.2
97.6
101.7
100.0
105.1
109.0
93.4
101.5
100.0
104.5
108.7
97.4
101.6
100.0
103.9
103.4
90.4
97.9
100.0
103.9
109.9
86.6
95.7
100.0
109.3
117.2
93.7
97.3
100.0
102.7
105.5
1970
106
106
103
102
105
104
108
118
107
P.
90
98
Seasonally adjusted
1969: J a n . . .
Feb...
Mar..Apr...
May...
June..
105.3
108.4
110.3
111.6
112.7
115.5
109.0
109.7
110.3
110.1
110.7
111.6
104.6
105.1
106.2
106.1
107.4
107.5
103.3
104.5
105.1
104.0
103.7
106.6
103.7
103.0
104.3
105.7
105.7
105.9
110.0
111.4
111.0
109.6
109.9
107.6
108.6
108.1
108.5
109.7
110.1
110.1
103.0
102.3
103.8
103.1
104.9
104.7
107.1
107.8
108.4
108.6
109.5
109.9
112.7
114.7
115.6
116.7
117.2
117.5
104.8
105.9
106.2
104.9
103.9
104.0
July...
Aug...
Sept..
Oct_.
Nov...
Dec...
115.0
114.2
112.7
113.5
113.4
111.5
110.6
111.6
110.6
110.8
110.7
110.2
108.0
108.7
109.7
108.5
102.2
102.9
109.3
108.1
107.9
106.0
101.6
98.9
105.4
105.5
105.7
104.9
106.1
106.8
105.8
107.3
107.6
107.7
107.6
107.0
108.4
108.4
107.9
107.4
107.7
107.8
104.3
102.8
101.2
101.9
102.5
101.5
110.9
111.2
110.8
110.5
111.0
111.5
118.5
117.1
117.5
117.2
118.6
118.3
105.1
107.1
106.6
103.4
105.7
106.4
1970: J a n . . .
Feb...
Mar...
Apr...
May...
June..
108.0
105.1
107.1
104.8
107.6
107.7
111.2
110.5
110.1
108.2
105.9
106.4
103.4
106.8
108.6
106.3
104.1
103.9
96.3
93.1
94.1
92.4
94.9
96.5
105.4
105.0
104.8
105.7
103.5
101.7
108.0
108.0
105.2
107.3
106.5
102.6
108.2
107.0
107.1
106.7
104.0
103.5
101.4
99.6
98.6
99.6
98.1
97.4
110.0
110.0
109.9
110.3
109.0
108.1
116.9
117.9
118.3
119.5
115.9
118.1
108.4
109.0
107.3
108.0
107.3
105.7
July...
Aug...
Sept..
Oct...
Nov *>_.
Dec v.
109.6
109.9
107.6
101.4
97.6
100
106.5
106.2
104.5
99.3
98.3
101
104.3
103.8
101.5
99.7
97.5
97
95.4
94.6
83.9
73.6
73.9
86
101.2
99.2
98.4
98.1
98.4
96
103.1
104.7
102.4
102.8
103.4
103
102.9
102.2
101.4
101.6
102.5
101
97.5
97.5
97.0
97.1
96.4
96
108.2
108.4
105.3
104.9
105.7
106
119.4
117.6
116.8
116.4
117.3
118
106.3
106.4
107.1
105.1
106.2
107
Note.—The indexes in this table were converted to a 1967 base from the Federal Reserve indexes published on a
1957-59 base.
Source: Board of Governors of the Federal Reserve System.
239
TABLE G-38.—Manufacturing output, capacity, and utilization rate, 194S-70
Utilization rate J
Period
Output
Capacity'
Total
Advanced
products
1967 output=100
Primary
products
Percent
1948
1949.
43.1
40.8
48.1
50.8
89.7
80.2
87.9
80.3
92.2
80.0
1950
1951
1952
1953
1954.
47.5
51.3
53.4
58.0
54.0
52.8
54.7
58.0
61.6
64.7
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.
60.9
62.7
63.1
58.4
66.4
67.9
71.6
75.6
78.8
81.5
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.
68.2
68.6
74.3
78.2
83.3
84.5
87.4
90.4
93.8
97.4
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
1969
90.8
99.3
100.0
104.5
108.9
102.7
109.6
116.5
123.2
130.0
88.5
90.5
85.3
84.6
83.7
87.6
90.5
85.9
83.8
81.6
89.7
90.5
84.6
85.8
86.7
1970
104.0
136.8
76.6
73.9
80.2
Seasonally adjusted
1965: I . .
II.
III
IV
88.5
89.9
91.5
93.2
100.3
101.9
103.5
105.1
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
96.7
98.7
100.1
101.3
106.9
108.7
110.5
112.3
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.
II
IV.
99.6
98.6
99.1
101.0
114.0
115.7
117.4
119.0
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: l._
II..
Ill
IV.
102.6
104.0
104.5
105.9
120.7
122.4
124.1
125.8
85.0
85.1
84.2
84.2
84.5
83.8
83.7
83.2
85.7
86.9
84.9
85.6
1969: I . .
II.
ML
IV.
107.5
108.9
109.8
107.9
127.5
129.2
130.8
132.5
84.5
84.5
84.2
81.7
82.7
82.3
82.3
79.1
87.0
87.8
86.7
85.3
1970: I v
II
III
IV
106.8
105.6
104.4
110.1
134.2
135.9
137.6
139.3
79.8
78.0
76.2
72.3
77.5
75.6
73.4
69.2
83.1
81.2
80.1
76.5
»For description and source of data see "A Revised Index of Manufacturing Capacity," Frank deLeeuw, 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.
5
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).
24O
TABLE G-39.—Business expenditures for new plant and equipment, 1947—71
1
[Billions of dollars]
Transportation
Manufacturing
Year
or quarter
Mining
Total
Total
Durable
goods
Nondurable
goods
Railroad
Air
Other
Public
utilities
Communication
Commercial
and
other 2
1947
1948
1949
19.33
21.30
18.98
8.44
9.01
7.12
3.25
3.30
2.45
5.19
5.71
4.68
0.69
.93
.88
0.91
1.37
1.42
0.17
.10
.12
1.13
1.17
.76
1.54
2.54
3.10
1.40
1.74
1.34
5.05
4.42
4.24
1950
1951
1952
1953 . . .
1954
20.21
25.46
26.43
28.20
27.19
7.39
10 71
11.45
11.86
11.24
2.94
4.82
5.21
5.31
4.91
4.45
5 89
6.24
6.56
6.33
.84
1.11
1.21
1.25
1.28
1.18
1.58
1.50
1.42
.93
.10
.14
.24
.24
.24
1.09
1.33
1.23
1.29
1.22
3.24
3.56
3.74
4.34
3.99
1.14
1.37
1.61
1.78
1.82
5.22
5.67
5.45
6.02
6.45
29.53
35.73
37.94
31.89
33.55
11.89
15.40
16 51
12.38
12.77
5.41
7.45
7 84
5.61
5.81
6.48
7.95
8 68
6.77
6.95
1.31
1.64
1.69
1.43
1.36
1.02
1.37
1.58
.86
1.02
.26
.35
.41
.37
.78
1.30
1.31
1.30
1.06
1.33
4.03
4.52
5.67
5.52
5.14
2.11
2.82
3.19
2.79
2.72
7.63
8.32
7.6C
7.48
8.44
1960
1961
1962
1963
1964
36.75
35.91
38.39
40.77
46.97
15 09
14.33
15.06
16.22
19 34
7 23
6 31
6.79
7.53
9 28
7 85
8.02
8.26
8.70
10 07
1.30
1.29
1.40
1.27
1.34
1.16
.82
1.02
1.26
1.66
.66
.73
.52
.40
1.02
1.30
1.23
1.65
1.58
1.50
5.24
5.00
4.90
4.98
5.49
3.24
3.39
3.85
4.06
4.61
8.75
9.13
9.99
10.99
12.02
1965
1966
1967
1968
1969
54.42
63.51
65.47
67.76
75.56
23.44
28.20
28.51
28.37
31.68
11.50
14.06
14.06
14.12
15.96
11.94
14.14
14 45
14.25
15.72
1.46
1.62
1.65
1.63
1.86
1.99
2.37
1.86
1.45
1.86
1.22
1.74
2.29
2.56
2.51
1.68
1.64
1.48
1.59
1.68
6.13
7.43
8.74
10.20
11.61
5.30
6.02
6.34
6.83
8.30
13.19
14.48
14.59
15.14
16.05
1970s
19713
80.58
81.67
32.26
31.39
15.91
15.42
16.36
15.97
1.86
1.84
1.83
1.56
2.94
2.16
1.24
1.28
13.33
15.24
1955
1956
1957
1958
1959
..
.
.
16.86
10.24
28720
Seasonally adjusted annual rates
68.09
66.29
67.77
69.05
28.02
27.84
28.86
28.70
14.11
13.51
14.47
14.39
13.91
14.33
14.40
14.31
1.80
1.66
1.57
1.52
1.68
1.49
1.29
1.34
2.88
1.98
2.69
2.87
1.43
1.49
1.65
1.75
10.08
10.24
9.82
10.63
6.83
6.42
6.67
7.34
15.37
15.17
15.22
14.91
1969: 1
IL...
III...
72.52
73.94
77.84
77.84
29.99
31.16
33.05
32.39
15.47
15.98
16.53
15.88
14.52
15.18
16.52
16.50
1.83
1.88
1.89
1.85
1.68
1.76
2.06
1.94
2.89
2.22
2.23
2.80
1.87
1.66
1.65
1.63
11.52
11.68
11.48
11.80
7.74
7.92
8.71
8.76
15.00
15.67
16.78
16.67
1970: 1
11....
III...
IV3 .
78.22
80.22
81.88
81.72
32.44
32.43
32.15
32.13
16.40
16.32
15.74
15.30
16.05
16.11
16.40
16.82
1.92
1.84
1.86
1.81
1.74
1.88
1.96
1.76
2.94
2.88
3.24
2.72
1.37
1.12
1.22
1.27
12.14
12.72
13.84
14.36
1971: | 3 . . _ .
II 3 . . .
81.40
82.20
31.49
31.11
15.70
14.85
15.79
16.26
1.86
1.56
2.03
1.15
15.92
1968: 1
III"."
IV....
16.52
9.14
16.98
10.38
17.00
10.62
27.18
27.38
51.09
1
Excludes agricultural business; real estate operators; medical, legal, educational, and cultural service; and nonprofit
organizations. These figures do not agree precisely with the fixed investment data in the gross national product estimates,
mainly because those data include investment by farmers, professionals, institutions, and real estate firms, and certain
outlays charged to current account.
2 Commercial and other includes trade, service, construction, finance, and insurance.
3
Estimates based on expected capital expenditures reported by business in October-December 1970. Includes adjustments for systematic biases in expectations data.
Note.—Annual total is the sum of unadjusted expenditures; it does not necessarily coincide with the average of seasonally adjusted figures.
Sources: Department of Commerce (Office of Business Economics) and Securities and Exchange Commission.
241
TABLE CM-O.—New construction activity, 1929-70
[Value put in place, millions of dollars]
Private construction
Total
new
construction
Year or month
Residential building (nonfarm)
Public construction
Nonresidential building and other
construction
Total
Total
TotaM
New
housing
units
Total
Commercial
Industrial
Federally
owned
State
and
locally
owned •
Others
10,793
8,307
3,625
3,040
4,682
1,135
949
2,598
2,486
155
2,331
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
630
1,570
1,320
485
3,808
2,203
1,046
893
454
223
532
221
74
2,383
1,528
749
209
271
333
625
1,010
1,565
1,875
1,990
2,680
380
710
1,210
1,475
1,620
2,270
884
989
1,416
2,028
1,570
1,709
173
211
290
191
158
266
520
620
860
387
285
292
492
232
254
1,149
1,053
1,163
2,858
2,659
1 862
1 648
2,211
2 233
3 516
3,096
3,420
3,809
2,649
2,388
1 529
1 132
1,585
1 419
2 719
2,320
2,703
3,050
1940
1941
1942
1943
1944
1945
1946
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
348
442
409
155
33
56
203
801
346
156
208
642
1 279
1,486
1,199
1 182
3,751
9,313
5,609
2,505
1,737
3,300
1,153
1,689
1,107
1,290
2,802
3 628
5,751
10,660
6,322
3,073
2,398
2,231
2 446
2 000
1,347
1,276
4,752
2,069
2,696
1,700
1,094
1,371
2,135
5,644
865
1,366
New series 5
1946
1947
1948
....
1949
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
957
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
840
1,177
1,488
865
1,366
2,479
3,527
4,781
1950.
1951
1952
1953
1954
1955
1956
1957
1958
1959
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
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
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
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
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
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
New series 9
1962
1963
1964
1965
1966
1967
1968
1969
59,667
63,423
66,200
72,319
75,120
76,160
84,690
90,866
41,798
44,057
45,810
50,253
51,120
50,587
56,996
62, 806
24,292
26,187
26,258
26,268
23,971
23,736
28,823
30,603
18,638
20,385
20,354
20,351
17,964
17,885
22,423
23,689
17,506 5,144
17,870 4,995
19,552 5,396
23,985 6,739
27,149 6,879
26,851 6,982
28,173 8,333
32, 203 10,136
2,842
2,906
3,565
5,118
6,679
6,131
5,594
6,373
9,520
9,969
10, 591
12,128
13,591
13,738
14,246
15,694
17, 869
19,366
20,390
22,066
24,000
25, 573
27,694
28,060
3,913
4,010
3,905
4,018
3,957
3,512
3,455
3,409
13,956
15,356
16,485
18,048
20,043
22,061
24.238
24,651
1970 7
90,690
62, 850
29, 040
21,880
33,810
27,840
3,320
24, 520
1929
1930
1931
193?
1933
1934
1935
1936
1937
1938
1939
...
.
470
885
815
290
710
570
720
761
See footnotes at end of table.
242
130
176
455
905
516
626
814
797
776
717
759
713
568
661
TABLE C-40.—New construction activity,
1929-70—Continued
[Value put in place, millions of dollars]
Private construction
Year or month
Total
new
construction
Residential building (nonfarm)
Total
Total i
New
housing
units
Public construction
Nonresidential building and other
construction
Total
Commercials
Industrial
Total
Other*
State
Fedand
erally locally
owned owned«
Seasonally adjusted annual rates
1969: Jan
Feb....
Mar....
Apr . .
May....
June...
91,972
92,066
91,722
92, 784
92, 359
91,475
62,875
62, 550
62, 762
63, 050
63, 669
63, 027
31, 084
31,436
32,423
33, 018
32,971
31,635
24,972
25,472
25,458
24,995
24, 490
23,887
31,791
31,114
30,339
30, 032
30, 698
31,392
9,971
9,941
9,751
9; 066
9,284
10, 020
6,800
6,318
6,019
5,857
5,923
6,050
15,020
14, 855
14, 569
15,109
15,491
15, 322
29, 097
29, 516
28,960
29,734
28,690
28, 448
3,551
3,463
3,530
3,784
3,488
3,574
25,546
26, 053
25, 430
25,950
25, 202
24, 874
July....
Aug
Sept...
Oct....
Nov .
Dec...
90,806
89, 889
91,105
90,657
88, 791
89, 759
63,161
62,412
63, 725
63, 561
61,805
61,878
30, 304
29, 284
29,214
29, 280
28, 778
28,926
23,214
22, 577
22,615
23, 027
22, 760
22,468
32,857
33,128
34,511
34, 281
33, 027
32,952
10,417
10,343
11,118
10,856
10,168
10,337
6,404
6,414
6,714
6,946
6,571
6,419
16, 036
16, 371
16,679
16,479
16,288
16,196
27,645
27,477
27, 380
27, 096
26,986
27, 881
3,114
3,413
3,431
3,437
3,062
3,234
24, 531
24,064
23,949
23,659
23,924
24,647
1970: J a n . . . .
Feb....
Mar....
Apr....
May....
June...
90, 790
91,978
90,718
90, 721
89, 702
90, 090
62, 737
63, 340
64,159
63,606
62, 656
61,652
28,711
28,658
29, 381
29,829
29,150
27,698
21,667
21,196
21,404
21,340
20, 572
19,972
34, 026
34,682
34, 778
33, 777
33, 506
33,954
11,029
11,724
11,831
10,577
10,553
10,903
6,433
6,000
5,916
6,230
5,864
5,892
16, 564
16,958
17, 031
16,970
17, 089
17,159
28, 053
28,638
26, 559
27,115
27, 046
28,438
3,240
3,322
3,069
3,534
3,225
3,321
24,813
25,316
23,490
23, 581
23, 821
25,117
July
Aug
Sept v
Octp..".
Nov »___
89, 235
90, 031
90,684
91,327
91,059
60, 795
61, 596
62, 489
63,655
63,285
27,134
27,639
28 532
29,698
30, 540
20, 380
21,430
22,290
23,173
24,019
33,661
33,957
33,957
33, 957
32, 745
10,027
10,188
10,375
10,210
8,924
5,915
6,241
5 741
5,983
6,086
17,719
17,528
17,841
17,764
17,735
28,440
28,435
28,195
27,672
27,774
2,869
3,479
3 549
3,550
3,398
25, 571
24,955
» Total includes additions and alterations and nonhousekeeping units not shown separately.
Office buildings, warehouses, stores, restaurants, and garages.
Farm, institutional, public utilities, and all other private.
* 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 (Supplement)"
for a description of the differences.
* 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.
i Preliminary estimates by Council of Economic Advisers.
2
3
Source: Department of Commerce, Bureau of the Census, except as noted.
243
TABLE C-41.—New housing starts and applications for financing, 1929-70
[Thousands of units]
Housing starts
Private and
public^
Year or
month
Proposed
home construction «
Private i
Nonfarm
Total (farm and nonfarm)
Total
(farm
and
nonfarm)
Selected
Government
home programs 3
Type of
structure 2
Nonfarm
New
private
housing
units
authorized s
Total
Total
One
family
Two or
more
families
FHA<
VA
AppliRecations quests
for
for
FHA
VA
comapmitpraisments * als
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
7 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
88.8
91.8
160.3
71.1
90.8
56.6
121 7
286 4
293.2
327.0
1,908.1
1,419.8
1,446.0
1,402.1
1,531.8
1,626.6
1,324.9
1,174.8
1,314.2
282.5 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
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 1,234.3
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1,296.0
1,365.0
1,492.4
1,642.0
1,561.0
1,509.6
1,195.9
1.321.9
1,545.5
1,499.6
1,274.0
1,336.8
1,468.7
1,614.8
1,534.0
1,487.5
1,172.8
1.298.8
1,5?1.4
1,482.3
1970*
1,462.7
<9)
1,252.1
994.7
1,313.0
974.4
1,462.7
991.3
1,610.3 1,020.7
1,528.8
970.5
1,472.9
963.8
1,165.0
778.5
1.291.6
843.9
1,507.7
899.5
1,466.8
810.6
257.4
338.6
471.4
589.6
558.3
509.1
386.5
447.7
608.2
656.2
1,230.1
1,284.8
1,439.0
1,582.9
1,501.9
1,450.6
1,141.5
1,268.4
1,483.6
1,449.1
225.7
198.8
197.3
166.2
154.0
159.9
129.1
141.9
147.7
153.6
74.6
83.3
77.8
71.0
59.2
49.4
36.8
52.5
56.1
51.2
998.0
1,064.2
1,186.6
1,334.7
1,285.8
1,239.8
971.9
1,141.0
1,353.4
1,322.3
242.4
243.8
221.1
190.2
182.1
188.9
153.0
167.2
168.9
187.6
142.9
177.8
171.2
139.3
113.6
102.1
99.2
124.3
131.7
138.2
1,429.3
618.6
(8)
233.5
61.0 1,324.9
315.0
143.7
810.7
See footnotes at end of table.
244
TABLE C-41.—New housing starts and applications for financing, 1929-70—Continued
[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 6
Nonfarm
Selected
Government
home programs 3
Type of
structure 2
Nonfarm
Total
New
private
housing
units
authorized s
Total
One
family
Two or
more
families
FHA*
VA
Applications
for
FHA
commitments 4
Requests
for
VA
appraisals
Seasonally adjusted annual rates
1969: Jan...
Feb..
Mar..
Apr..
May..
June.
1,705
1,639
1,588
1,505
1,533
1,507
926
864
824
797
877
826
779
775
764
708
656
681
1,674
1,618
1,571
1,490
1,519
1,483
138
139
156
164
137
149
58
52
53
49
47
48
1,474
1,452
1,416
1,414
1,332
1,346
180
171
162
169
169
178
148
132
135
127
124
130
July..
Aug_.
Sept.
Oct...
Nov..
Dec.
1,429
1,376
1,481
1,390
1,280
1,402
803
752
828
766
762
776
626
624
653
624
518
626
1,406
1,362
1,462
1,377
1,261
1,346
138
142
151
160
178
191
47
47
54
51
52
57
1,290
1,325
1,248
1,212
1,213
1,175
176
169
193
224
230
210
142
152
128
127
177
147
1970: Jan...
Feb_.
Mar..
1,059
1,306
1,392
1,224
1,242
1,393
577
725
708
697
728
835
482
581
684
527
514
558
?!
170
182
187
205
194
215
54
58
62
60
57
51
1,051
I,ll8
1,085
1,178
1,309
1,284
251
250
258
282
269
290
141
142
142
134
131
125
1,603
1,425
1,509
1,583
1,688
1,987
827
838
881
890
930
1,204
776
587
628
693
758
783
228
236
243
265
292
300
50
64
60
63
71
78
1,309
1.378
1,389
1,521
1,489
1,737
294
319
338
327
350
350
127
153
138
166
163
151
MayV.
June..
July..
Aug..
Sept..
Octp..
NOVP.
Decp.
1(9999)
((99))
i Units in structures built by private developers for sale upon completion to local public housing authorities under the
Department of Housing and Urban Development " T u r n k e y " program are classified as private housing. 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.
* Not available prior to 1959 except for nonfarm for 1929-44.
* Data are not available for new homes started under the Department of Agriculture, Farmers Home Administration
program.
* Units are for 1- to 4-family housing.
5 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 in 1957 contributed an increase of
3 percent in total permit authorizations.
«U
Units
mortgage
requests
for new home construction.
i t s iin m
t g g e applications
p p t s or appraisal
pp
q
d in
i June
J
1934
934; all
ll 1934 activity
t i i t included
i l d d in
i 1935.
1935
7 FHA program approved
1934;
8
thly e
s t i m t e s for September
p b e r 1945-May
1950 were preparedd by
Housing and Home Finance Agency.
Monthly
estimates
1945M
b H
9 Not available separately beginning January 1970.
Sources: Department of Commerce (Bureau of the Census), Department of Housing and Urban Development,(Federal
Housing Administration ( F H A ) ) , and Veterans Administration ( V A ) , except as noted.
245
TABLE G—4-2.—Sales and inventories in manufacturing and trade, 1947-70
[Amounts in millions of dollars]
Total manufacturing
and trade
Manufacturing
Merchant wholesalers
Retail trade
Year or month
InvenSales i tories 2
Ratio 3
1947...
1948...
1949...
35,260 52, 507
33,788 49, 497
.42
.53
1950—
1951...
1952...
1953...
1954...
38,596
43,356
44,840
47,987
46,443
59,822
70,242
72,377
76,122
73,175
1955..
1956—
1957...
1958...
1959...
51,694
54,063
55,879
54,233
59,661
Sales i
Inventories 2
InvenInvenRatio 3 Sales i
tories2
tories 2
Ratio s
Sales i
15,513 25,897
17,316 28, 543
16,126 26,321
1.58
1.57
1.75
6,808
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
.36
.55
.58
1.58
1.60
18,634
21,714
22, 529
24,843
23,355
31,078
39, 306
41,136
43,948
41,612
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
79,516
87,304
89,052
86,922
91,891
1.47
1.55
1.59
1.60
1.50
26,480
27,740
28,736
27,280
30,219
45,069
50,642
51,871
50,070
52,707
1.62 9,893 11,678
1.73 10,513 13,260
1.80 10,475 12,730
1.84 10,257 12,739
1.70 11,491 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
1960...
196H1962...
1963..
1964...
60,746 94,747
61,133 95,648
65,417 101,090
68,969 105,477
"",457
73,685 111
1.56
1.54
1.51
1.49
1.47
30,796
30,896
33,113
35,032
37,335
53,814
54,939
58,213
60,043
63, 386
1.76
1.74
1.72
1.69
1.64
11,656
11,988
12,674
13,382
14, 527
1965...
1966...
1967...
1968...
1969—
80,276 120,900
87,184 136,988
88,962 143,334
96,989 152,699
103, 755 164,917
1.45
1.47
1.57
1.52
1.53
41,003
44,876
45,712
50,384
54, 726
68,221
78,224
82,825
88, 567
95,931
1.60
1.62
1.77
1.70
1.69
15,595
16,979
17,099
18,329
1970s.
106, 529 170,857
1.57 55,613 100, 032
Ratio 3
14,120
14,488
14,936
16,048
16,977
1.22
1.20
1.16
1.15
1.13
18,294
18,249
19,630
20, 556
21,823
26,813
26,221
27,941
29,386
31,094
1.45
1.43
1.38
1.39
1.40
18,274
20,691
21,557
22, 528
19, 726 24,363
1.14
1.14
1.21
1.20
1.19
23,677
25,330
26,151
28,277
29,303
34,405
38,073
38,952
41,604
44,623
1.39
1.44
1.46
1.43
1.47
1.23 30,364 44, 507
1.47
1.76 20, 551 26,318
Seasonally adjusted
1969: Jan...
Feb...
Mar..
Apr...
May..
June..
100,192 153,227
101,418 154,536
101, 776 "".,671
155;
i,698
102, 704 156,
103,349 157, 584
104, H O 158, 553
1.53
1.52
1.53
1.53
1.52
1.52
52,890
53, 362
53,379
53, 683
53,858
54,799
89,027
89,636
90,371
91, 039
91,885
92,193
1.68
1.68
1.69
1.70
1.71
1.68
18,347
18, 799
19,516
19,612
20,105
19,970
22,441
22, 769
23,080
23, 341
23, 438
23,611
28,955
29,257
28, 881
29,409
29; 386
29, 371
41, 759
42,131
42,220
42,318
42, 261
42, 749
1.44
1.44
1.46
1.44
1.44
1.46
July..
Aug..
Sept..
Oct...
Nov..
Dec..
103,668 159,634
105,295 160,734
106,078 161,841
106, 593 163, 331
105, 566 163,763
105,021 164,917
1.54
1.53
1.53
1.53
1.55
1.57
54, 859
55,890
56,609
56,685
55,888
55, 540
1.70
1.67
1.66
1.68
1.71
1.73
19, 719
20,059
20,210
20,288
20,207
20,062
23, 591
23,609
23, 716
23,956
24,021
24,363
29,090
29,346
29,259
29,620
29,471
29,419
42,999
43,535
43,897
44,411
44, 268
44, 623
1.48
1.48
1.50
1.50
1.50
1.52
1970: Jan...
Feb...
Mar..
Apr
May..
June..
104,932 164,698
106,164 165, 638
105, 487 166,149
105, 087 167, 059
106, 847 166,734
107, 612 167,375
1.57
1.56
1.58
1.59
1.56
1.56
55,070
55, 613
55,223
54, 539
55, 661
56,438
93,044
93, 590
94, 228
94,964
95,474
95,931
96, 200
96, 652
96, 982
97,791
97, 635
97, 706
1.75
1.74
1.76
1.79
1.75
1.73
20,292
20, 571
20,463
20,012
20, 684
20, 656
24,484
24, 853
24, 842
24,942
24,990
25,142
29, 570
29,980
29,801
30, 536
30, 502
30, 518
44,014
44,133
44.325
44.326
44,109
44, 527
1.49
1.47
1.49
1.45
1.45
1.46
July..
Aug..
Sept..
Octp.
Nov v_
Dec..
108,393 168,635
108,175 169,364
108,074 170,038
106,224 170,352
104, 824 170, 857
1.56
1.57
1.57
1.60
1.63
57,025
56,696
56,475
54,936
54, 0S8
98, 260
98, 488
98, 658
99, 466
100, 032
1.72
1.74
1.75
1.81
1.85
20,639
20,698
20,714
20, 754
20, 583
25,410
25,423
25,689
26, 003
26,318
30,729
30, 781
30,885
30, 534
30,173
'30,593
44,965
45, 453
45,691
44, 883
44, 507
1.46
1.48
1.48
1.47
1.48
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.
4
Manufacturing data prior to 1961 not completely comparable with later data. See Department of Commerce, Bureau
of the Census, "Series M3-1.1," September 1968.
5
Based on seasonally adjusted data through November.
6
Unofficial estimate.
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).
246
TABLE C-43.—Manufacturers* shipments and inventories^ 1947-70
[Millions of dollars]
1 nventories 2
Shipments i
Durable goods industries
Year or month
Total
Durable
goods
industries
Nondurable
goods
industries
Materials
and
supplies
Total
Total
FinWork
in
ished
process goods
Nondurable goods industries
Total
Materials
and
supplies
Work
Finin
ished
process goods
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
13,571
15,545
12,409
13,025
13,499
13,708
14,674
45,069
50,642
51,871
50,070
52,707
26,405 9,194 10,756
30,447 10,417 11,317
31,728 10,608 12,837
30,095 9,847 12,294
31,839 10,585 12,952
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
54,939
58,213
60,043
63,386
32,360
32,509
34,605:
35,813
38,436
10,286
10.242
10.798
11,001
11,927
12,780 9,190
13.211 9,056
14.205 9,602
14,997 9,815
16,253 10,256
21,454 9,113
22,430 9,464
23,608 9,841
24,230 10,003
24,950 10,185
2,935 9,353
3,193 9,773
3,304 10,463
3,410 10,817
3,519 11,246
1965
1966
1967
1968
1969
41,003
44,876
45,712
50,384
54,726
22,216
24,635
24,973
27,653
30,415
18,788
20,240
20,739
22,731
24,311
68,221
78,224
82,825
88,567
95,931
42,227
49,849
53,530
57,399
63,547
13,299
15,507
15,604
16,634
17,606
18,152
22,004
24,664
26,327
29,790
25,994
28,375
29,295
31,168
32,384
3,823
4,257
4,482
4,834
5,072
1970*
55,613 30, 214
1960
1961 3
1962
1963
1964
.
8,819 25,897 13,061
9,738 28,543 14,662
8,935 26,321 13,060
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
10,776
12,338
13,262
14,438
16,151
10,488
11,289
11,264
11,617
11,821
25,399 100,032 65,920 17.867 30, 551 17,502 34,112 12,260
11,683
12,829
13, 549
14,717
15,491
4,973 16,879
Seasonally adjusted
1969: Jan
Feb....
Mar..
Apr....
May....
June
52,890
53,362
53,379
53,683
53,858
54,799
29,358
29,842
29,641
29,862
29,708
30,292
23,532
23,520
23,738
23,821
24,150
24,507
89,027
89,636
90,371
91,039
91,885
92,193
57,931
58,311
58,968
59,427
60,074
60,505
16,762
16,699
16,983
16,940
17,021
17,011
26,636
26,934
27,208
27,426
27,777
28,092
14,533
14,678
14,777
15,061
15,276
15,402
31,096
31,325
31,403
31,612
31,811
31,688
11,513
11,585
11,567
11,716
11,772
11,696
4,972
5,000
4,944
4,972
5,004
4,945
14,611
14,740
14,892
14,924
15,035
15,047
July....
Aug....
Sept....
Oct
Nov
Dec-...
54,859
55,890
56,609
56,685
55,888
55,540
30,210
31,548
31,914
31,680
31,011
30,603
24,649
24,342
24,695
25,005
24,877
24,937
93,044
93,590
94,228
94,964
95,474
95,931
61,356
61,653
62,100
62,704
63,089
63,547
17,045
16,959
17,024
17,101
17,217
17,606
28,729
29,007
29,292
29,552
29,693
29,790
15,582
15,687
15,784
16,051
16,179
16,151
31,688
31,937
32,128
32,260
32,385
32,384
11,660
11,743
11,803
11,997
11,966
11,821
4,948
4,985
5,047
5,078
5,076
5,072
15,080
15,209
15,278
15,185
15,343
15,491
1970: Jan
Feb
Mar..._
Apr....
May_...
June
55,070
55,613
55,223
54,539
55,661
56,438
29,930
30,273
29,757
29,633
30,488
30,638
25,140
25,340
25,466
24,906
25,173
25,800
96,200
96,652
96,982
97,791
97,635
97,706
63,909
63,977
64,263
64,689
64,447
64,395
17,663
17,702
17,698
17,570
17,447
17,438
29,998
29,965
30,060
30,309
30,308
30,263
16,248
16,310
16,505
16,810
16,692
16,694
32,291
32,675
32,719
33,102
33,188
33,311
11,647
11,818
11,936
11,950
11,921
11,910
5,076
5,013
4,958
4,993
5,013
5,002
15,568
15,844
15,825
16,159
16,254
16,399
July....
Aug
Sept....
Oct.....
Nov p..
Dec p
57,025
56,696
56,475
54,936
54,068
31,315
31,270
30,863
29,369
28,815
29,925
25,710
25,426
25,612
25,567
25,253
98,260
98,488
98,658
99,466
100,032
65,079
65,290
65,323
65,628
65,920
17,470
17,621
17,652
17,708
17,867
30,605
30,555
30,539
30,522
30, 551
17,004
17,114
17,132
17,398
17, 502
33,181
33,198
33,335
33,838
34,112
11,849
11,856
11,877
12,117
12,260
4,977
4,896
4,887
4,940
4,973
16,355
16,446
16,571
16,781
16,879
1 Monthly average for year and total for month.
2 Book value, seasonally adjusted, end of period.
> Data prior to 1961 not completely comparable with later data. See Department of Commerce, Bureau of the Census,
"Series M3-1.1," September 1968.
* Based on seasonally adjusted data through November.
Source: Department of Commerce, Bureau of the Census.
247
TABLE C-44.—Manufacturers'
new and unfilled orders, 1947-70
[Amounts in millions of dollars]
New orders1
Durable goods
industries
Year or month
Total
Total
Producers'
capital
goods
industries
Unfilled orders >
Nondurable
goods
industries
Total
Durable
goods
industries
Nondurable
goods
industries
Unfilled ordersshipments ratio*
Total
Durable
goods
industries
Nondurable
goods
industries
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
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
48,266
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
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
.88
1960
1961 *
1962
1963
1964.
30,115
31,086
33,005
35,322
37,952
15,223
15,699
17,025
18,521
20,258
2,791
2,854
3,090
3,412
3,935
14,892
15,387
15,980
16,801
17,694
46,133
48,395
47,307
50,940
58, 506
43,401
45,241
44,485
47,958
55,623
2,732
3,154
2,822
2,982
2,883
2.58
2.52
2.46
2.40
2.49
3.21
3.01
2.95
2.89
2.99
.63
.72
.65
.63
.57
1965
1966
1967
1968
1969
41,803
45,938
45,928
50,670
54,933
22,986
25,709
25,189
27,942
30,624
4,435
5,268
5,250
5,804
6,553
18,817
20,229
20,739
22,728
24, 309
68,146
80,944
83,410
86,718
89,221
64,920
77,864
80,321
83,665
86,206
3,226
3,080
3,089
3,053
3,015
2.62
2.90
2.80
2.74
2.59
3.12
3.48
3.36
3.32
3.11
.60
.54
.51
.45
.42
1970s
54,958
29,549
6,421
25,410
82,014
78,883
3,131
1947
1948
1949
_
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
_
.
.
—-
Seasonally adjusted
53,459
53,740
53,740
54,715
54,621
54,101
29,942
30,198
29,949
30,859
30, 501
29,556
6,309
6,527
6,419
7,052
6,516
6,460
23,517
23,542
23,791
23,856
24,120
24, 545
87,287
87,665
88,026
89,058
89,821
89,123
84,249
84,605
84,913
85,910
86,703
85,967
3,038
3,060
3,113
3,148
3,118
3,156
2.66
2.64
2.66
2.66
2.69
2.63
3.21
3.17
3.20
3.20
3.23
3.16
.44
.45
.45
.45
.45
.45
July
Aug
Sept
Oct
Nov
Dec
55,641
55,779
56,669
56,430
55,912
55,138
31,063
31,463
31,986
31,436
31,048
30,209
6,397
6,294
7,086
6,349
6,744
6,536
24,578
24,316
24,683
24,994
24,864
24,929
89,905
89,794
89,854
89,599
89,623
89,221
86,820
86,735
86,807
86, 563
86,600
86,206
3,085
3,059
3,047
3,036
3,023
3,015
2.63
2.62
2.58
2.54
2.57
2.59
3.18
3.15
3.08
3.05
3.09
3.11
.42
.43
.43
.42
.42
.42
1970: Jan
Feb
Mar
Apr
May
June
54,119
54,714
54,339
53,374
55,139
55,778
29,046
29,368
28, 861
28,449
29,977
30,028
6,542
6,627
5,998
5,984
6,302
6,281
25,073
25,346
25,478
24,925
25,162
25,750
88,270
87,371
86,487
85,322
84,797
84,146
85,322
84,417
83,521
82,337
81,824
81,221
2,948
2,954
2,966
2,985
2,973
2,925
2.58
2.54
2.55
2.53
2.47
2.44
3.13
3.07
3.08
3.07
2.97
2.95
.43
.43
.43
.44
.44
.42
57,111
55,968
55,523
54,190
54,291
31,399
30, 537
29,856
28, 504
29,009
30,08d
6,411
6,299
6,759
6,552
6,873
6,224
25,712
25,431
25,667
25,686
25,282
84,229
83,492
82, 544
81,797
82,014
81,301
80,561
79, 559
78,693
78,883
2,928
2,931
2,985
3.104
3,131
2.39
2.39
2.34
2.38
2.42
2.90
2.88
2.81
2.87
2.92
.41
.43
.43
.45
.46
1969: Jan
Feb
Mar
Apr
May
June
.
.
..
...
July
Aug
Sept
. .
Oct
Nov ?-- - - . .
Dec v
i Monthly average for year and total for month.
> Seasonally adjusted, end of period.
3 Ratio of ui,filled orders at end of period to shipments for period; excludes industries with no unfilled orders. Annual
figures relate to seasonally adjusted data for December.
* Data prior to 1961 not completely comparable with later data. Comparable data for new orders (total, durable, and nondurable) are available for 1958, 1959, and 1960 only. See Department of Commerce, Bureau of the Census, "Series
M3-1.1," September 1968, for these data.
• Based or seasonally adjusted data through November.
Source: Department of Commerce, Bureau of the Census.
248
PRICES
TABLE C-45.-—Consumer price indexes, by major groups, 1929-70
For city wage earners and clerical workers
[1967=100]
Housing
Year or month
All
items
Food
Total
1929
1930
1931
1932
1933
1934......
1935
1936
1937
1938
1939
1940
1941
1942
1943.
1944
1945
1946
1947
1948
1949
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965......
1966
1967
1958
1989
1970i
1969: Jan..
Feb.
MarApr.
May.
June.
July.
Aug.
Sept.
Oct..
Nov.
Dec.
1970: Jan.
Feb.
Mar.
Apr.
May.
June
July.
Aug.
Sept.
Oct..
Nov.
51.3
50.0
45.6
40.9
38.8
40.1
41.1
41.5
43.0
42.2
41.6
42.0
44.1
48.8
51.8
52.7
53.9
58.5
66.9
72.1
71.4
72.1
77.8
79.5
80.1
80.5
80.2
81.4
84.3
86.6
87.3
88.7
89.6
90.6
91.7
92.9
94.5
97.2
100.0
104.2
109.8
116.1
106.7
107.1
108.0
108.7
109.0
109.7
110.2
110.7
111.2
111.6
112.2
112.9
113.3
113.9
114.5
115.2
115.7
116.3
116.7
116.9
117.5
118.1
118.5
48.3
45.9
37.8
31.5
30.6
34.1
36.5
36.9
38.4
35.6
34.6
35.2
38.4
45.1
50.3
49.6
50.7
58.1
70.6
76.6
73.5
74.5
82.8
84.3
83.0
82.8
81.6
82.2
84.9
88.5
87.1
88.0
89.1
89.9
91.2
92.4
94.4
99.1
100.0
103.6
108.9
114.9
105.9
105.8
106.3
106.9
107.4
108.9
110.0
110.6
110.7
110.4
111.2
112.8
113.5
114.1
114.2
114.6
114.9
115.2
115.8
115.9
115.7
115.5
114.9
Rent
Apparel
and
upkeep
Transportation
48.5
47.5
43.2
38.2
36.9
40.4
40.8
41.1
43.2
43.0
42.4
42.8
44.8
52.3
54.6
58.5
61.5
67.5
78.2
83.3
80.1
79.0
86.1
85.3
84.6
84.5
84.1
85.8
87.3
87.5
88.2
89.6
90.4
90.9
91.9
92.7
93.7
96.1
100.0
105.4
111.5
115.8
108.2
108.7
109.6
110.2
111.1
111.4
111.2
111.1
112.9
113.9
114.6
114.7
113.4
114.0
114.6
115.0
115.7
116.0
115.3
115.4
117.2
118.2
119.0
42.6
43.0
43.7
44.0
43.0
42.7
44.2
48.1
47.9
47.9
47.8
50.3
55.5
61.8
66.4
68.2
72.5
77.3
79.5
78.3
77.4
78.8
83.3
86.0
89.6
89.6
90.6
92.5
93.0
94.3
95.9
97.2
100.0
103.2
107.2
112.3
104.1
105.3
107.2
107.5
107.0
107.5
107.2
107.2
106.6
108.5
108.4
109.1
109.8
109.8
109.7
111.2
112.1
112.7
113.4
112.7
113.0
115.2
116.0
76.0
49.3
50.0
51.7
52.6
52.2
52.4
53.7
56.2
56.8
58.1
59.1
60.6
65.2
69.8
70.9
72.8
77.2
78.7
80.8
81.7
82.3
83.6
86.2
87.7
88.6
90.2
90.9
91.7
92.7
93.8
94.9
97.2
100.0
104.2
110.8
118.6
107.3
107.9
108.8
109.6
110.1
110.5
111.1
111.8
112.5
113.0
113.6
114.2
114.7
115.7
116.9
117.6
118.2
118.6
119.2
119.9
120.6
121.2
121.9
73.9
70.0
62.8
54.1
50.7
50.6
51.9
54.2
56.0
56.0
56.2
57.2
58.5
58.5
58.6
58.8
59.2
61.1
65.1
68.0
70.4
73.2
76.2
80.3
83.2
84.3
85.9
87.5
89.1
90.4
91.7
92.9
94.0
95.0
95.9
96.9
98.2
100.0
102.4
105.7
109.8
104.0
104.3
104.5
104.8
105.1
105.4
105.7
106.1
106.5
106.9
107.2
107.7
107.9
108.4
108.8
109.1
109.4
109.8
110.1
110.5
110.9
111.4
111.8
Reading
and
Medical Personal
recreacare
care
tion
Other
goods
and
services
41.8
42.5
43.7
45.2
45.3
46.1
47.7
50.0
54.1
60.0
62.4
64.5
68.7
72.2
74.9
74.4
76.6
76.9
77.7
76.9
76.7
77.8
80.7
83.9
85.3
87.3
89.3
91.3
92.8
95.0
95.9
97.5
100.0
104.7
108.7
113.1
106.9
106.9
107.2
107.9
108.4
108.6
108.8
109.2
109.6
109.9
110.2
110.5
110.8
110.9
111.2
111.9
112.6
113.3
113.7
114.2
114.7
115.2
116.0
44.6
44.5
45.7
46.1
46.9
48.3
49.2
50.7
53.3
54.7
56.9
58.8
63.8
66.8
68.7
69.9
72.8
76.6
78.5
79.8
79.8
81.0
83.3
84.4
86.1
87.8
88.5
89.1
90.6
92.0
94.2
97.2
100.0
104.6
109.1
115.7
106.3
106.4
106.7
107.1
107.4
108.2
109.2
110.1
111.1
111.8
112.6
112.9
113.3
113.6
114.0
114.7
115.1
115.7
116.2
116.8
117.4
118.0
118.3
36.1
36.3
36.6
36.7
36.7
36.8
37.0
38.0
39.9
41.1
42.1
44.4
48.1
51.1
52.7
53.7
56.3
59.3
61.4
63.4
64.8
67.2
69.9
73.2
76.4
79.1
81.4
83.5
85.6
87.3
89.5
93.4
100.0
106.1
113.4
120.3
109.9
110.7
111.6
112.4
113.0
113.5
114.0
114.7
115.3
114.8
115.1
115.7
116.3
117.1
118.2
119.1
119.7
120.5
121.3
122.0
122.6
122.8
123.4
36.9
37.4
39.6
40.4
40.3
40.2
41.2
45.2
49.9
53.4
55.1
59.0
66.0
68.5
68.3
68.3
74.7
75.6
76.3
76.6
77.9
81.1
84.1
86.9
88.7
90.1
90.6
92.2
93.4
94.5
95.2
97.1
100.0
104.2
109.3
113.0
107.1
107.4
108.1
108.7
108.9
109.3
109.6
109.8
110.2
110.2
110.6
110.9
111.3
111.7
112.2
112.4
112.8
112.7
113.1
113.7
114.0
114.4
114.5
* Eleven-month average.
Note.—The indexes in this table were converted to a 1967 base from the Bureau of Labor Statistics indexes published
on a 1957-59 base.
Source: Department of Labor, Bureau of Labor Statistics.
249
TABLE C-46.—Consumer price indexes, by special groups, 1935-70
For city wage earners and clerical workers
[1967=100]
Commodities
Year or
month
All
items
All
items
less
food
All
items
less
shelter
Services
Commodities less food
Tntol
All
Mil
commodities
Food
All
Durable
Nondurable
lotai
All
nondura- services
ble
Rent
All
services
less
rent
1935..
1936..
1937.
1938..
1939..
41.1
41.5
43.0
42.2
41.6
44.9
45.4
47.0
47.5
47.2
39.8
40.3
41.6
40.4
39.7
40.5
41.0
42.6
41.0
40.2
36.5
36.9
38.4
35.6
34.6
46.0
46.5
48.5
48.5
47.7
45.2
45.8
48.7
49.6
48.5
43.1
43.5
45.3
45.0
44.3
39.0
39.6
41.1
39.2
38.4
40.9
41.3
42.6
43.4
43.5
50.6
51.9
54.2
56.0
56.0
37.6
37.4
37.8
38.1
38.1
1940..
1941..
1942..
1943..
1944..
1945..
1946..
1947..
1948..
1949..
42.0
44.1
48.8
51.8
52.7
53.9
58.5
66.9
72.1
71.4
47.3
48.7
52.1
53.6
55.7
56.9
59.4
64.9
69.6
70.3
39.9
42.4
47.7
51.3
52.2
53.6
59.0
68.5
73.9
72.6
40.6
43.3
49.6
54.0
54.7
56.3
62.4
75.0
80.4
78.3
35.2
38.4
45.1
50.3
49.6
50.7
58.1
70.6
76.6
73.5
48.0
50.4
56.0
5g.4
61.6
64.1
68.1
76.8
82.7
81.5
48.1
51.4
58.4
60.3
65.9
70.9
74.1
80.3
86.2
87.4
44.7
46.7
51.6
53.8
56.6
58.6
62.9
72.2
77.8
76.3
38.9
41.6
47.6
51.8
52.2
53.7
59.6
71.9
77.2
74.9
43.6
44.2
45.6
46.4
47.5
48.2
49.1
51.1
54.3
56.9
56.2
57.2
58.5
58.5
58.6
58.8
59.2
61.1
65.1
68.0
38.1
38.6
40.3
42.1
44.2
45.1
46.7
49.0
51.9
54.5
1950
1951..
1952..
1953..
1954..
1955..
1956..
1957..
1958..
1959..
72.1
77.8
79.5
80.1
80.5
80.2
81.4
84.3
86.6
87.3
71.1
75.7
77.5
79.0
79.5
79.7
81.1
83.8
85.7
87.3
73.1
79.2
80.8
81.0
81.0
80.6
81.7
84.4
86.9
87.6
78.8
85.9
87.0
86.7
85.9
85.1
85.9
88.6
90.6
90.7
74.5
82.8
84.3
83.0
82.8
81.6
82.2
84.9
88.5
87.1
81.4
87.5
88.3
88.5
87.5
86.9
87.8
90.5
91.5
92.7
88.4
95.1
96.4
95.7
93.3
91.5
91.5
94.4
95.9
97.3
76.2
82.0
82.4
83.1
83.5
83.5
85.3
87.6
88.2
89.3
75.4
82.5
83.4
83.2
83.2
82.5
83.7
86.3
88.6
88.2
58.7
61.8
64.5
67.3
69.5
70.9
72.7
75.6
78.5
80.8
70.4
73.2
76.2
80.3
83.2
84.3
85.9
87.5
89.1
90.4
56.0
59.3
62.2
64.8
66.7
68.2
70.1
73.3
76.4
79.0
I960..
1961..
1962..
1963..
1964..
1965..
1966..
1967..
1968..
1969..
88.7
89.6
90.6
91.7
92.9
94.5
97.2
100.0
104.2
109.8
91.5
92.0
92.8
93.6
94.6
95.7
98.2
100.0
103.7
108.4
88.0
89.1
89.9
91.2
92.4
94.4
99.1
100.0
103.6
108.9
93.1
93.4
94.1
94.8
95.6
96.2
97.5
100.0
103.7,
108.1
96.7
96.6
97.6
97.9
98.8
98.4
98.5
100.0
103.1
107.0
90.7
91.2
91.8
92.7
93.5
94.8
97.0
100.0
104.1
108.8
89.4
90.2
90.9
92.0
93.0
94.6
98.1
100.0
103.9
108.9
83.5
85.2
86.8
88.5
90.2
92.2
95.8
100.0
105.2
112.5
91.7
92.9
94.0
95.0
95.9
96.9
98.2
100.0
102.4
105.7
81.9
83.9
85.5
87.3
89.2
91.5
95.3
100.0
105.7
113.8
89.
90.
92.
93.
94.
96.
100.
104.
110.
116.1
116.4
114.2
113.3
114.9
112.3
111.4
112.9
113.9
121.3
109.8
123.4
Jan
Feb.--.
Mar.__.
Apr
May
June
106.7
107.1
108.0
108.7
109.0
109.7
106.9
107.5
108.6
109.2
109.5
109.9
106.2
106.6
107.3
107.9
108.2
109.0
105.6
105.9
106.7
107.3
107.6
108.4
105.9
105.8
106.3
106.9
107.4
108.9
105.3
106.0
107.0
107.3
107.6
108.1
104.1
105.2
106.5
106.8
106.7
107.1
106.2
106.5
107.3
107.8
108.2
108.8
106.1
106.2
106.8
107.5
107.9
108.9
108.8
109.4
110.3
111.2
111.7
112.2
104.0
104.3
104.5
104.8
105.1
105.4
109.8
110.3
111.4
112.4
113.0
113.5
July
Aug
Sept....
Oct
Nov
Dec
110.2
110.7
111.2
111.6
112.2
112.9
110.3
110.7
111.3
112.0
112.5
112.9
109.3
109.7
110.1
110.5
111.0
111.7
108.8
109.2
109.4
110.1
110.5
111.2
110.0
110.6
110.7
110.4
111.2
112.8
108.2
108.2
108.7
109.7
110.1
110.2
107.3
107.3
107.0
108.5
108.8
108.9
108.8
109.0
110.0
110.6
111.0
111.1
109.4
109.8
110.4
110.6
111.1
112.0
112.8
113.5
114.3
114.7
115.3
116.1
105.7
106.1
106.5
106.9
107.2
107.7
114.1
115.0
115.7
116.2
116.8
117.7
1970: Jan
Feb
Mar
Apr
May
June
113.3
113.9
114.5
115.2
115.7
116.3
113.3
113.9
114.6
115.4
116.0
116.5
112.0
112.4
112.8
113.5
114.0
114.4
111.2
111.7
112.0
112.6
113.1
113.5
113.5
114.1
114.2
114.6
114.9
115.2
110.0
110.3
110.6
111.4
112.0
112.5
109.0
109.0
109.4
110.1
111.1
111.9
110.7
111.2
111.5
112.3
112.7
112.9
112.1
112.6
112.9
113.4
113.9
114.0
117.1
118.0
119.3
120.1
120.7
121.4
107.9
108.4
108.8
109.1
109.4
109.8
118.8
119.8
121.2
122.1
122.8
123.5
July
Aug
Sept
Oct
Nov
116.7
116.9
117.5
118.1
118.5
117.0
117.2
118.0
118.9
119.6
114.8 113.8
114.9 113.8
115.4 i 114.2
116.0 ' 114.8
116.3 115.1
115.8
115.9
115.7
115.5
114.9
112.5
112.6
113.4
114.5
115.1
112.1
112.2
112.5
113.9
114.7
113.0
113.0
114.1
114.9
115.4
114.4
114.5
114.9
115.2
115.3
122.0
122.7
123.5
124.1
124.9
110.1
110.5
110.9
111.4
111.8
124.2
124.9
125.8
126.5
127.3
1970 i.
1969:
* Eleven-month average.
Note.—The indexes in this table were converted to a 1967 base from the Bureau of Labor Statistics indexes published
on a 1957-59 base.
Source: Department of Labor, Bureau of Labor Statistics.
250
T A B L E C-47.—Consumer price indexes, selected commodities and services, 1935—70
For city wage earners and clerical workers
[1967=100]
Nondurable commodities less food
Durable commodities
Year or
month
durables
House
furnishings
Total
Apparel
commodities
Nondurables
less
food
and
apparel
Household
services
less
rent
Transportation
services
Medical
care Other 2
services
Total i
New
cars
1935
1936
1937
1938
1939
45.2
45.8
48.7
49.6
48.5
41.1
41.4
42.2
44.2
43.2
52.1
53.1
57.7
57.7
56.6
47.6
48.4
52.4
52.0
50.9
43.1
43.5
45.3
45.0
44.3
41.3
41.8
44.1
43.7
43.0
45.4
45.9
47.0
46.9
46.3
37.6
37.4
37.8
38.1
38.1
36.3
36.0
35.7
36.0
36.1
31.8
31.9
32.3
32.4
32.5
1940
1941
1942
1943
1944
1945
1946
1947
1948
1949
48.1
51.4
58.4
60.3
65.9
70.9
74.1
80.3
86.2
87.4
43.3
46.6
50.5
54.0
61.4
63.1
68.6
73.3
80.0
92.7
98.3
94.9
44.7
46.7
51.6
53.8
56.6
58.6
62.9
72.2
77.8
76.3
43.5
45.8
53.5
69.2
75.6
82.8
55.9
59.8
66.9
69.5
76.0
81.8
86.5
95.6
101.7
99.0
55.9
59.8
63.0
69.5
80.4
85.4
82.0
46.8
48.4
51.1
53.2
54.7
55.8
58.2
66.2
72.3
72.4
38.1
38.6
40.3
42.1
44.2
45.1
46.7
49.0
51.9
54.5
36.1
36.3
38.2
38.2
38.2
38.2
39.0
40.3
44.9
50.0
32.5
32.7
33.7
35.4
36.9
37.9
40.1
43.5
46.4
48.1
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
88.4 83.4
95.1 87.4
96.4 94.9
95.7 95.8
93.3 94.3
91.5 90.9
91.5 93.5
94.4 98.4
95.9 101.5
97.3 105.9
89.2
75.9
71.8
69.1
77.4
80.2
89.5
100.2
109.8
106.9
105.7
102.9
100.1
99.7
101.4
102.1
102.0
95.5
106.0
103.4
102.9
101.1
99.2
98.1
99.7
99.0
99.0
76.2
82.0
82.4
83.1
83.5
83.5
85.3
87.6
88.2
89.3
81.1
88.7
87.7
86.7
86.3
85.8
87.3
88.2
88.2
89.0
72.9
77.5
79.0
81.0
81.8
82.1
84.1
87.4
88.3
89.6
56.0
59.3
62.2
64.8
66.7
68.2
70.1
73.3
76.4
79.0
71.2
75.4
79.4
81.6
53.3
58.3
62.4
66.4
69.2
69.4
70.5
73.8
78.5
81.2
49.2
51.7
55.0
57.0
58.7
60.4
62.8
65.5
68.7
72.0
71.1
73.9
76.2
78.0
104.5 83.6
104.5 86.9
104.1 94.8
103.5 96.0
103.2 100.1
100.9 99.4
99.1 97.0
100.0 100.0
102.8
104.4
101.9
100.7
100.6
100.3
100.2
98.7
98.6
100.0
103.3
107.4
99.3 90.7
98.7 91.2
98.1 91.8
97.7 92.7
97.6 93.5
97.1 94.8
98.0 97.0
100.0 100.0
103.9 104.1
108.1 108.8
90.3
90.8
91.2
92.0
92.8
93.6
96.0
100.0
105.6
111.9
90.9 81.9
91.3 83.9
92,1 85.5
93.1 87.3
93.9 89.2
95.5 91.5
97.5 95.3
100.0 100.0
103.3 105.7
107.0 113.8
85.0
86.0
87.1
89.0
90.4
92.1
95.7
100.0
105.9
115.3
83.3 74.9
85.3 77.7
86.6 80.2
87.5 82.6
89.6 84.6
92.9 87.3
96.8 92.0
100.0 100.0
104.0 107.3
111.3 116.0
80.8
83.4
85.6
87.7
90.1
92.6
96.2
100.0
105.6
110.6
1960...
1961...
1962...
1963...
1964...
1965...
1966...
1967...
1968...
1969...
96.7
96.6
97.6
97.9
98.8
98.4
98.5
100.0
103.1
107.0
Used
Household
Services less rent
Total
1970*..
111.4 107.0 103.8
110.1
111.3 112.9
116.2
111.0 123.4
126.3
122.7 123.8
116.4
1969: J a n . . .
Feb...
Mar...
Apr...
May...
June..
104.1
105.2
106.5
106.8
106.7
107.1
104.3
104.3
104.4
103.9
103.8
103.8
95.1
100.9
107.4
108.0
104.4
105.5
105.2
105.6
106.3
106.9
107.5
107.7
105.8
106.3
106.9
107.4
107.9
108.1
106.2
106.5
107.3
107.8
108.2
108.8
108.5
108.9
110.0
110.5
111.5
111.9
104.9
105.1
105.8
106.3
106.4
107.0
109.8
110.3
111.4
112.4
113.0
113.5
110.1
110.7
112.2
113.5
114.2
114.7
108.4
108.9
109.7
110.1
110.4
110.8
111.8
112.8
113.9
114.8
115.5
116.1
108.2
108.5
108.9
109.7
110.0
110.4
July...
Aug...
Sept..
Oct...
Nov...
Dec...
107.3
107.3
107.0
108.5
108.8
108.9
103.6
103.0
101.4
106.2
107.1
106.9
104.5
103.2
99.9
103.5
102.8
102.0
107.9
107.9
108.1
108.4
108.5
108.5
108.4
108.5
109.0
109.3
109.5
109.7
108.8
109.0
110.0
110.6
111.0
111.1
111.7
111.4
113.4
114.4
115.4
115.3
107.3
107.6
108.0
108.4
108.4
108.8
114.1
115.0
115.7
116.2
116.8
117.7
115.7
116.7
117.7
118.4
119.2
120.0
111.0
111.4
112.1
113.0
113.6
115.6
116.8
117.5
118.3
117.6
118.0
118.7
110.8
111.4
111.9
112.2
112.7
113.2
1970: J a n . . .
Feb...
Mar...
Apr__.
May...
June..
109.0
109.0
109.4
110.1
111.1
111.9
106.7 99.3
106.6 97.0
106.4 96.8
106.3 99.7
106.1 104.9
105.8 108.6
108.6
108.9
109.4
109.8
110.0
110.2
109.6
110.2
110.8
111.1
111.3
111.5
110.7
111.2
111.5
112.3
112.7
112.9
113.8
114.4
115.0
115.4
116.1
116.3
108.9
109.4
109.5
110.5
110.8
111.0
118.8
119.8
121.2
122.1
122.8
123.5
120.6
122.0
124.2
125.3
126.0
126.5
119.1
120.0
120.3
121.1
121.6
122.4
119.4
120.3
121.6
122.5
123.1
124.0
113.6
113.9
114.3
115.1
115.8
116.7
July...
Aug...
Sept..
Oct...
Nov...
112.1
112.2
112.5
113.9
114.7
05.7
105.5
105.1
110.8
112.5
110.3
110.4
110.6
111.0
111.4
111.6
111.5
111.8
112.2
112.7
113.0
113.0
14.1
114.9
115.4
115.5
115.6
117.6
118.8
119.7
111.6
111.6
112.0
112.6
113.0
124.2
124.9
25.8
126.5
127.3
127.2
128.1
129.1
129.8
130.7
123.5
123.8
124.8
125.9
126.9
124.9
125.8
126.5
126.7
127.5
117.0
117.5
118.1
118.8
119.1
108.5
106.3
104.9
107.2
108.8
i Includes certain items not shown separately.
-' Includes the services components of apparel, personal care, reading and recreation, and other goods and services.
3 Not available.
4
Eleven-month average.
Note.—The indexes in this table were converted to a 1967 base from the Bureau of Labor Statistics indexes published
on a 1957-59 base.
Source: Department of Labor, Bureau of Labor Statistics.
TABLE C-48.—Wholesale price indexes, by major commodity groups, 1929-70
[1967=1001
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 Chemicals
products, and allied
and
products
power
1929
49.1
64.1
48.6
48.9
59.4
1930
1931
1932
1933
1934
1935
1936
1937
1938
1939
44.6
37.6
33.6
34.0
38.6
41.3
41.7
44.5
40.5
39.8
54.2
39.7
29.5
31.4
40.0
48.1
49.5
52.9
42.0
40.0
45.2
39.9
37.3
37.8
41 6
41.4
42.2
45.2
43.4
43.3
44 9
38 6
32.8
36.3
38.8
40 2
42 7
46 9
41.6
42.8
56 2
48 3
50.3
47.6
52.4
52 6
54 5
55.5
54.6
52.3
47.4
49.6
51 7
52 0
54 5
51.8
51.5
1940
1941
1942
1943
1944
1945
1946
1947
1948
1949
40.5
45 1
50.9
53.3
53.6
54.6
62.3
76.5
82.8
78.7
41.4
50.3
64.8
75.0
75.5
78.5
90.9
109.4
117.5
101.6
82.9
88.7
80.6
44 0
47.3
50.7
51.5
52.3
53.0
58.0
70.8
76.9
75.3
103.6
108.1
98.9
45.2
48 4
52 8
52 7
52.2
52.9
61 1
83.3
84.2
79.9
51.4
54 6
56.2
57.8
59.5
60.1
64.4
76.9
90.5
86.2
52.4
57 0
63 3
64.1
64.8
65.2
70 5
93.7
95.9
87.6
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
81.8
91.1
88.6
87.4
87.6
87.8
90.7
93 3
94.6
94.8
106.7
124.2
117.2
106.2
104.7
98.2
96.9
99 5
103.9
97.5
83.4
92.7
91.6
87.4
88.9
85.0
84.9
87.4
91.8
89.4
78.0
86.1
84.1
84.8
85.0
86.9
90.8
93 3
93.6
95.3
102.7
114.6
103.4
100.8
98.6
98.7
98.7
98 8
97.0
98.4
86.3
99.1
80.1
81.3
77.6
77.3
81.9
82.0
82.9
94.2
87.1
90.3
90.1
92.6
91.3
91.2
94.0
99.1
95.3
95.3
88.9
101.7
96.5
97.7
98.9
98.5
99.1
101.2
102.0
101.6
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
94.9
94.5
94.8
94.5
94 7
96.6
99.8
100.0
102.5
106.5
97.2
96.3
98.0
96.0
94.6
98.7
105.9
100.0
102.5
108.8
89.5
91.0
91.9
92.5
92.3
95.5
101.2
100.0
102.2
107.3
95.3
94.8
94.8
94.7
95.2
96.4
98.5
100.0
102.5
106.0
99.5
97.7
98.6
98.5
99.2
99.8
100.1
100.0
103.7
105.9
90.8
91.7
92.7
90.0
90.3
94.3
103.4
100.0
103.2
108.6
96.1
97.2
96.7
96.3
93.7
95.5
97.8
100.0
98.9
101.0
101.8
100.7
99.1
97.9
98.3
99.0
99.4
100.0
99.8
99.9
1970
110.4
111.0
112.0
110.0
107.2
110.1
105.9
102.2
1969: Jan
Feb
Mar
Apr
May
June
104.3
104.7
105.3
105.5
106.3
106.7
105.2
105.3
106.8
105.9
110.8
111.5
103.8
104.1
104.2
105.0
106.9
108.7
104.3
104.8
105.4
105.5
105.6
105.6
105.3
105.1
105.0
105.0
104.*
105.1
106.6
106.6
106.6
108.8
108.9
108.5
98.8
99.1
100.6
100.9
100.9
101.4
99.2
99.4
99.6
99.5
99.7
99.9
106.8
106.9
107.1
107.4
108.1
108.5
110.8
109.2
108.7
108.2
111 4
112.0
109.2
108.8
108.6
108.9
109.0
109.8
105.7
106.1
106.5
107.1
107.4
107.8
105.6
106.6
106.9
107.0
107.1
107.1
109.2
109.2
110.7
110.0
109.5
109.2
101.4
101.1
101.1
101.7
101.8
102.4
99.8
100.3
100.5
100.2
100.5
100.4
1970: Jan
Feb
Mar
Apr
May
June
109.3
109.7
109.9
109.9
110.1
110.3
112.8
114.0
114.6
111.6
111.3
111.6
112.0
112.1
111.8
111.8
111.1
111.7
108.3
108.7
108.9
109.3
109.7
109.8
107.4
107.3
107.4
107.2
107.2
107.2
109.3
109.4
109.5
111.0
110.4
109.9
101.9
102.7
102.6
103.8
105.3
104.8
100.7
101.1
101.6
102.0
102.2
102.1
July
Aug
Sept
Oct
Nov
Dec
110.9
110.5
111.0
111.0
110.9
111.0
113.4
108.5
112.1
107.8
107.0
107.1
113.3
112.9
113.0
111.8
111.7
110.7
110.0
110.2
110.4
111.3
111.3
111.7
107.1
107.4
107.5
107.3
107.1
106.7
109.8
109.8
109.9
110.4
110.9
110.4
105.1
105.8
107.1
108.7
109.7
112.8
102.5
102.7
102.5
103.0
103.3
103.3
--.
July
Aug
Sept
Oct
Nov
Dec
.
. -
See footnotes at end of table.
252
TABLE C - 4 8 . — Wholesale price indexes, by major eomtnodity groups, 1929—70—Continued
11967 100|
Industrial cc)mmo(lities -Continued
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
1969
1970
1969: Jan..
Feb..
Mar.
Apr..
May.
June.
July.
Aug.
Sept.
Oct..
Nov.
Dec.
1970: Jan..
Feb..
Mar.
AprMay.
June.
July.
Aug..
Sept.
Oct..
Nov.
Dec.
Pulp,
Metals
Rubber Lumber
paper,
and
and
and
and
metal
wood
plastic
allied
products
products products products
25.0
59.4
52.0
44.2
38 3
40.2
47.0
47.3
51.0
60.0
58.9
61.2
57.1
61.5
71.6
73.6
72.7
70.5
70 8
70.5
72.8
70.5
85.9
105.4
95.5
89.1
90.4
102.4
103.8
103.4
103.3
102.9
103.1
99.2
96.3
96.8
95.5
95.9
97.8
100.0
103.4
105.4
108.6
103.2
103.7
104.1
104.4
104.3
104.4
105.8
106.3
106.0
106.8
107.7
107.8
108.0
107.9
107.7
107.5
107.5
107.4
109.0
109.7
109.4
109.5
109.1
109.4
22.9
18.6
16.0
19.0
22.3
21.4
22.4
26.5
24.1
24.8
27.4
32.7
35.6
37.7
40.6
41.2
47.2
73.4
84.0
77.7
89.3
97.2
94.4
94.3
92.6
97.1
98.5
93.5
92.4
98.8
95.3
91.0
91.6
93.5
95.4
95.9
100.2
100.0
113.3
125.2
113.7
130.7
137.1
141.8
136.0
130.9
123.1
118.9
117.6
116.9
116.3
117.6
116.2
115.4
114.0
113.4
113.9
114.8
114.0
113.5
114.0
114.2
113.1
111.9
111.1
72.5
75.7
72.4
74.3
88.0
85.7
85.5
85.5
87.8
93.6
95.4
96.4
97.3
98.1
95.2
96.3
95.6
95.4
96.2
98.8
100.0
101.1
104.2
108.2
102.3
102.9
103.5
104.0
104.1
104.3
104.4
104.7
104.8
105.0
105.3
105.5
107.0
107.7
108.0
108.4
108.2
108.1
108.4
108.2
108.3
108.9
108.7
108.5
40.2
36.2
32.6
29 9
30.7
33.9
33.8
34 5
39.4
38.0
37.6
37.8
38.5
39.1
39.0
39.0
39.6
44 3
54.9
62.5
63.0
66.3
73.8
73.9
76.3
76.9
82.1
89.2
91.0
90.4
92.3
92.4
91.9
91.2
91.3
93.8
96.4
98.8
100.0
102.6
108.5
116.7
104.4
105.1
105.7
106.3
107.2
107.6
108.3
109.9
111.0
111.7
112.1
113.0
114.0
115.1
115.9
116.6
117.4
117.8
117.7
117.5
117.4
117.7
116.8
116.2
Machinery and
equipment
41.3
41.4
42.1
42.8
42.4
42.1
42.2
46.4
53.7
58.2
61.0
63.1
70.5
70.6
72.2
73.4
75.7
81.8
87.6
89.4
91.3
92.0
91.9
92.0
92.2
92.8
93.9
96.8
100.0
103.2
106.4
111.4
104.7
104.9
105.4
105.5
105.8
106.1
106.4
106.5
107.2
107.8
108.2
109.0
109.6
109.8
110.1
110.4
110.6
111.0
111.5
111.6
11?. 1
112.7
113.1
113.8
Transportation
Furniequipture and Nonmement:
Misceltallic
houseMotor
laneous
mineral vehicles
hold
products
products
durables
and
equipment i
55.8
54.9
50.5
44.5
44.6
48.5
48.1
48.8
54.1
52.8
52.6
53.8
57.2
61.8
61.4
63.1
63.2
67 1
77.0
81.6
82.9
84.7
91.8
90.1
91.9
92.9
93.3
95.8
98.3
99.1
99.3
99.0
98.4
97.7
97.0
97.4
96.9
98.0
100.0
102.8
104.9
107.5
104.2
104.3
104.5
104.6
104.7
104.7
104.9
105.0
105.2
105.3
105.7
106.0
106.3
106.7
106.9
107.1
107.1
107.4
107.6
107.7
107.8
108.0
108.4
108.7
51.2
51 0
47.7
44.6
47.2
50.4
50.4
50 5
51.7
50.0
49.1
49.1
50.2
52.3
52.4
53.5
55.7
59.3
66.3
71.6
73.5
75.4
80.1
80.1
83.3
85.1
87.5
91.3
94.8
95.8
97.0
97.2
97.6
97.6
97.1
97.3
97.5
98.4
100.0
103.7
108.1
113.3
106.0
106.6
107.3
107.7
108.0
108.1
108.3
108.3
108.8
109.1
109.2
109.8
111.7
112.1
112.5
112.9
113.0
113.0
113.2
113.6
113.8
114.2
114.6
115.1
1 Index for total transportation equipment is not shown but is available beginning December 1968.
Source: Department of Labor, Bureau of Labor Statistics.
411-364 O—71-
-17
253
41.9
39 4
37.5
36 5
34! 8
36.7
35 2
34^9
37.4
39.9
39.1
40.4
43.2
47.2
47 2
47.5
48.3
56.0
64.1
70.8
75.7
75.3
79.4
84.0
83.6
83.8
86.3
91.2
95.1
98.1
100.3
98.8
98.6
98.6
97.8
98.3
98.5
98.6
100.0
102.8
104.7
108.5
104.2
104.1
104.0
104.1
104.2
104.3
104.3
103.7
103.8
106.4
106.7
106.7
106.8
106.8
107.0
106.9
107.0
107.1
107.0
107.1
107.3
11?.5
112.8
113.4
73.5
76.5
78.0
79.2
83.9
83.4
85.6
86.4
86.5
87.6
90.2
92.0
92.2
93.0
93.3
93.7
94.5
95.2
95.9
97.7
100.0
102.2
104.9
109.9
102.9
102.9
102.9
103.1
103.2
105.3
105.7
106.0
106.5
106.8
107.0
107.0
107.4
107.5
107.8
107.8
108.1
110.7
111.1
111.2
111.5
111. 6
111.8
111.9
TABLE G-49.—Wholesale price indexes, by stage of processing, 1947-70
[1967=100]
Intermediate materials, supplies, and components1
Crude materials
Materials and components for
manufacturing
All
Year or month
com-
modities
Materials
and
components
For
For
Comfood nonconTotal For
ponents for
manu- durable durable
strucmanufactur- manu- facturtion
ing
facturing
ing
Materials
Total
Foodstuffs
and
feedstuffs
Nonfood
materials,
except
fuel
Fuel
Total
1947.
1948.
1949
76.5
82.8
78.7
101.2
110.9
96.0
111.7
120.8
100.3
90.6
100.7
91.6
66.6
78.7
78.3
72.4
78.3
75.2
72.1
77.8
74.5
94.0
96.9
83.3
95.2
100.8
91.9
54.4
61.4
63.1
58.3
63.0
64.2
66.0
73.1
73.2
1950.
1951
1952
1953.
1954.
81.8
91 1
88.6
87.4
87.6
104.6
120.1
110.3
101.9
101.0
107.6
124.5
117.2
104.9
104.9
104.7
120.7
104.6
100.1
98.2
77.9
79.4
79.9
82.7
79.0
78.6
88.1
85.5
86.0
86.5
78.1
88.5
84.8
86.2
86.3
86.7
96.6
92.9
93.0
92.2
96.5
111.8
100.6
99.8
98.2
66.7
74.1
74.3
77.6
79.3
66.6
75.6
75.7
77.1
77.5
77.0
84.3
83.7
85.1
85.5
1955
1956.
1957.
1958
1959.
87.8
90.7
93.3
94 6
94.8
97.1
97.6
99.8
102.0
99.4
95.1
93.1
97.2
103.0
96.2
103.8
107.6
106.2
102.2
105.8
78.8
84.4
89.2
90.3
91.9
88.1
92.0
94.1
94.3
95.6
88.4
92.6
94.8
95.2
96.5
89.3
89.7
91.3
93.4
90.0
98.6
100.1
101.4
100.4
102.1
83.3
88.5
91.4
92.0
94.2
80.9
88.3
91.8
92.5
93.6
88.9
93.5
94.0
94.0
96.6
1960
1961
1962.
1963
1964
94 9
94 5
94.8
94 5
94 7
97.0
96.5
97.5
95.4
94.5
95.1
93.8
95.7
92.9
90.8
101.4
102.5
102.0
100.7
102.4
92.8
92.6
92.1
93.2
92.8
95.6
95.0
94.9
95.2
95.5
96.5
95.3
94.7
94.9
95.9
91.1
94.0
92.0
96.6
95.2
102.1
99.9
99.3
98.4
99.1
94.3
93.0
92.9
93.0
94.8
93.1
92.2
91.5
91.5
92.3
95.9
94.6
94.2
94.5
95.4
1965
1966.
1967.
1968
1969
96 6
99.8
100.0
102 5
106.5
99.3
105.7
100.0
101.6
108.3
97.1
105.9
100.0
101.3
109.1
104.5
106.7
100.0
102.1
106.8
93.5
96.3
100.0
102.3
106.4
96.8
99.2
100.0
102.3
105.9
97.4
99.3
100.0
102.2
105.8
97.6
101.9
100.0
101.5
107.0
100.0
100.8
100.0
101.3
102.5
96.8
98.6
100.0
103.3
109.3
93.8
97.1
100.0
102.3
105.6
96.2
98.8
100.0
104.9
110.9
1970
110 4
112.2
112.1
109.8
122.3
109.8
110.0
112.9
104.0
115.1
111.1
112.6
104.3
104 7
105 3
. 105.5
106.3
106.7
103.2
104.2
105.6
106.1
110.1
111.6
103.3
104.6
106.3
106.3
112.2
114.2
102.5
102.9
104.2
105.9
106.6
106.9
104.7
104.4
104.8
105.2
105.3
105.7
104.3
104.8
105.5
105.5
105.5
105.5
103.6
104.2
104.7
104.9
105.3
105.4
103.2
103.6
103.8
104.5
106.5
107.9
101.8
101.9
102.0
102.1
102.2
102.4
106.2
107.3
108.2
108.5
108.7
108.3
103.2
103.6
104.1
104.3
104.7
105.0
110.3
112.2
113.6
112.3
111.6
110.1
106.8
106.9
107.1
Oct
107.4
Nov. . . 108.1
Dec
108.5
110.6
109.9
109.1
109.1
109.4
110.3
112.5
110.8
109.1
109.2
109.7
110.9
107.4
109.0
109.7
108.9
108.9
109.1
106.0
106.1
106.9
108.5
109.6
110.0
105.5
106.0
106.4
106.8
107.1
107.5
105.6
106.4
106.8
107.2
107.5
107.8
107.9
108.4
108.3
109.2
109.9
109.8
102.5
103.0
103.0
102.8
103.0
102.9
108.6
109.8
110.6
111.0
111.4
112.3
105.5
105.8
106.6
107.5
108.1
108.3
109.5
109.6
109.9
110.2
110.7
110.8
Jan
1969* Jan..
Feb
Mar
Apr
May
June
July
Aug
Sept
1970
Mar
Apr
May
June
109.3
109.7
109.9
109.9
110.1
110.3
111.1
113.5
114.7
113.9
113.3
113.5
111.6
114.1
115.9
113.9
113.0
113.4
110.3
111.9
111.6
112.0
111.9
110.9
110.6
112.9
113.3
119.0
119.3
121.6
108.3
108.6
108.7
109.2
109.6
109.8
108.5
108.8
109.3
109.8
110.1
110.2
110.9
111.3
112.5
113.0
112.2
112.6
103.6
103.6
103.7
104.1
104.2
103.7
113.0
113.5
114.2
115.2
116.0
116.2
109.0
109.3
109.5
109.9
110.2
110.8
111.3
111.3
111.7
112.1
112.5
112.8
July
Aug
Sept
Oct
Nov
Dec
110.9
110.5
111.0
111.0
110.9
111.0
114.3
111.3
113.0
111.3
108.7
108.6
115.2
111.1
113.0
110.1
106.9
106.3
109.3
108.5
108.8
108.5
106.7
107.7
123.0
123.9
126.4
132.3
132.0
132.9
110.2
110.4
110.6
110.9
110.9
111.0
110.5
110.6
110.5
110.8
110.6
110.3
113.8
113.7
113.6
114.0
114.5
112.5
104.0
104.2
103.9
104.1
103.9
104.0
116.1
115.9
115.4
115.6
115.0
114.3
111.4
111.9
112.6
113.0
113.0
113.3
113.0
113.5
113.6
113.6
113.1
113.1
Feb
See footnotes at end of table.
254
TABLE C-49.—Wholesale price indexes, by stage of processing, 1947-70—Continued
(1967=100]
Special groups of industrial
products
Finishec1 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 >
foods
1947
1948
1949
74.0
79.9
77.6
80.5
86.5
82.5
82.8
90.4
83.1
80.7
85.8
82.3
74.6
79.7
81.8
55.4
60.4
63.4
79.2
92.5
84.0
70 0
76.1
74.2
79.0
84.0
82.2
1950
1951
1952
1953
1954
79.0
86.5
86.0
85.1
85.3
83.9
91.8
90.7
89.2
89.1
84.7
95.2
94.3
89.4
88.7
83.6
90.0
87.8
88.6
88.9
82.7
88.2
88.9
89.6
90.3
64.9
71.2
72.4
73.6
74.5
93.6
102.9
93.1
92.4
88.0
77.7
87.0
84.3
85.3
85.7
83.5
89.5
88.3
89.1
89.4
1955
1956
1957
1958
1959
85.5
87.9
91.1
93.2
93.0
88.5
89.8
92.4
94.4
93.6
86.5
86.3
89.3
94.5
90.1
89.4
91.1
93.2
92.6
94.0
91.2
94.3
97.1
98.4
99.6
76.7
82.4
87.5
89.8
91.5
96.6
102.3
100.9
96.9
102.3
88.3
92.6
95.0
94.8
96.4
90.1
92.3
94.6
94.7
95.9
1960
1961
1962
1963 .
1964
93.7
93.7
94.0
93.7
94.1
94.5
94.3
94.6
94.1
94.3
92.1
91.7
92.5
91.4
91.9
94.7
94.7
94.8
95.1
94.8
99.2
98.8
98.3
97.8
98.2
91.7
91.8
92.2
92.4
93.3
98.3
97.2
95.6
94.3
97.1
96.8
95 5
95.3
95.0
95.6
96.3
96.2
96.0
96.0
95.9
1965
1966
1967
1968
1969
95.7
98.8
100.0
102.9
106.6
96.1
99.4
100.0
102.7
106.5
95.4
101.6
100.0
103.7
109.9
95.9
97.8
100.0
102.2
104.8
97.9
98.5
100.0
102.2
104.0
94.4
96.8
100.0
103.5
106.9
100.9
104.5
100.0
102.0
110.5
96.9
98.9
100.0
102.6
106.2
96.6
98.1
100.0
102.1
104.5
1970
110.4
109.9
113.4
108.2
107.1
111.9
118.8
110.0
107.7
1969:Jan
Feb
Mar
Apr
May. . .
June.. . .
104.6
104.7
105.1
105.2
106.0
106.7
104.5
104.4
104.9
105.0
106.1
106.7
106.7
106.3
106.9
106.8
109.7
110.8
103.0
103.3
103.7
104.0
103.9
104.7
103.3
103.3
103.5
103.6
103.6
103.7
105.4
105.6
105.7
105.8
106.2
106.4
105.0
105.5
107.2
109.0
109.7
110.2
104.7
105.3
106.0
105.9
106.0
105.7
103.0
103.3
103.6
103.8
103.8
104.3
July
Aug.
Sept
Oct
Nov
Dec.
107.1
106.9
107.2
107.7
108.7
109.1
107.3
106.9
107.2
107.6
108.6
108.9
111.7
110.7
111.1
110.7
113.2
113.7
105.0
105.4
105.7
106.0
106.2
106.4
103.8
103.4
103.5
105.1
105.3
105.4
106.9
106.9
107.4
108.2
108.9
109.6
110.7
112.5
113.9
113.7
114.1
114.5
105.8
106.2
106.7
107.1
107.4
107.7
104.6
104.7
104.8
105.6
105.8
106.0
1970:Jan
Feb
Mar
Apr
May
June.
109.8
109.8
110.0
109.6
109.7
110.0
109.6
109.6
109.7
109.2
109.3
109.6
115.4
115.0
115.1
113.3
112.9
113.4
106.5
106.9
107.0
107.2
107.8
108.1
105.6
105.8
106.0
106.0
106.2
106.3
110.1
110.3
110.7
110.8
111.1
111.3
116.0
118.5
118.5
120.3
120.0
119.5
108.3
108.7
109.0
109.4
109.9
110.1
106.2
106.4
106.6
106.7
107.1
107.3
110.6
110.1
110.8
110.9
111.4
111.5
110.3
109.5
110.4
110.1
110.5
110.5
115.0
112.6
114.2
111.3
112.0
111.0
108.2
108.6
109.0
109.2
109.5
110.4
106.5
106.5
106.6
109.7
109.9
109.9
111.6
111.9
112.3
113.8
114.2
115.1
118.0
117.2
118.7
120.6
118.2
119.8
110.3
110.5
110.7
111.0
111.0
111.0
107.5
107.7
108.0
109.4
109.6
110.2
.
July . .
Aug
Sept
Oct
Nov
Dec
.-
.
» Includes, in addition to subgroups shown, processed fuels and lubricants, containers, and supplies,
s3 Excludes crude foodstuffs and feedstuffs, plant and animal fibers, oilseeds, and leaf tobacco.
Excludes intermediate materials for food manufacturing and manufactured animal feeds.
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.
255
TABLE C—50.—Percentage changes from previous month in indexes for major groupings of the
consumer price index, 1968-70
(Percent]
All items
Food
Commodities less food Services *
Year and month
1968: Jan
Feb
Mar
Apr.. .
May
June
.
.
.
July
Aug
Sept . .
Oct
Nov
Dec
1969: Jan
Feb
Mar
Apr..
May....
June
July....
Aug
Sept
Oct . .
Nov
Dec
.
_.
.
1970: Jan
Feb.
Mar
Apr
May
June.
July
Aug
Sept
Oct
Nov
.
....
Unadjusted
Seasonally
adjusted
Unadjusted
Seasonally
adjusted
Unadjusted
Seasonally
adjusted
0.3
.3
.4
.3
.3
.5
0.5
.4
.3
.3
.4
.4
0.7
3
.4
.3
.4
3
0.5
.4
.6
.3
.5
-.3
0.1
3
.4
.3
.3
.4
0.5
.3
.3
.2
.3
.4
0.5
4
.6
.3
.4
.7
.5
.3
.2
.6
.4
.2
.4
.4
.3
.5
.4
.3
.8
.4
-.1
.4
-.3
.6
.3
.3
.4
.8
.1
.5
.2
.3
.4
.7
.5
-.1
.3
.4
.3
.4
.3
.2
.7
.4
.4
.4
.6
.5
.3
.4
.8
.6
.3
.6
.5
.4
.7
.5
.4
.5
.7
1
.4
.7
.4
1.5
.4
.0
.6
.7
.5
.8
-.2
.6
1.0
.3
.3
.4
.3
.7
.5
.9
.8
.5
.4
.5
.4
.5
.4
.5
.6
.4
.4
.6
.3
.5
.6
1.0
.5
.5
.6
.1
1.1
1.3
.1
.1
.4
.9
.3
.1
.2
.2
.3
.5
.2
.4
.5
.7
. 1
-.2
.7
1.4
.4
.5
.5
.6
.4
.4
.6
.5
.4
.5
.5
.3
.6
.6
.1
.3
.3
.2
.4
.8
.2
.3
.4
-.4
-.2
.2
.3
.7
.6
.4
.3
.1
.2
.6
.6
.4
.9
.7
1.1
.7
.5
.6
.4
.2
.4
.6
.3
.3
.5
.5
.3
.5
.1
-.1
-.2
-.5
.1
-.1
.4
.1
1
.1
.1
.7
1.0
.6
.2
.2
.6
.6
.4
.5
.6
.6
.5
.6
.6
.9
.3
.3
.4
Unadjusted
.7
.3
.7
i Percentage changes for services are based on unadjusted indexes since these prices have little seasonal movement.
Note.—The percentage changes are calculated from indexes on a 1957-59 base; therefore, the unadjusted changes may
differ slightly from those calculated from indexes on a 1967 base as shown in Table C-46. The seasonally adjusted changes
for the all items index are based on seasonal adjustment factors and seasonally adjusted indexes carried to two decimal
places.
Source Department of Labor, Bureau of Labor Statistics.
256
TABLE C-51.—Percentage changes from previous month in indexes for major groupings of the
wholesale price index, 1968-70
[Percent]
All commodities
Farm products
and processed
foods and
feeds
Farm products
Processed foods
and feeds
Industrial
commodities
Year and month
Unadjusted
1968: Jan
0.4
Feb
Mar . .
Apr
May,
June
.2
.0
.3
.1
July
Aug
Sept
Oct
Dec.
1969: Jan
Feb
Mar
Apr...
May
June
July.
Aug...
Sept
Oct
Mar.
Apr
May
June
-0.5
1.8
.8
.4
.0
-1.4
0.8
.8
-.3
!l
-.9
0.1
22
.8
.0
1.6
-1.2
1.4
-2.4
1.4
-1.6
2.0
.2
i!o
.2
.2
-.1
.1
1.3
-.6
1.9
-.4
1.4
-.4
• 1.0
-.9
.3
-.8
.3
.1
.7
-.1
.2
-.1
.7
-.1
.1
.1
.3
.5
.1
.4
.2
.1
.3
.4
.0
.4
.4
.3
.7
.4
.5
.2
.8
.4
.5
.2
.6
.4
.6
.3
1.2
.2
.6
.2
2.9
1.2
.8
.0
.9
.8
1.6
.4
1.5
.1
1.4
-.8
4.6
.6
1.0
-.4
1.4
-.1
2.5
.6
1.0
.3
.1
.8
1.8
1.7
.5
.3
.7
1.2
1.2
.3
.5
.5
.5
.1
.1
.0
.1
.1
.2
.4
.6
.1
.0
-.8
-.3
.0
1.2
.6
-.2
.7
-.3
.8
1.2
.4
-.6
-1.4
-.5
-.5
3.0
.5
-.8
.6
.1
.6
2.1
.3
.5
-.4
-.2
.2
.2
.7
.2
.3
-.3
1.0
.6
.5
.2
.4
.4
.5
.4
.4
.8
.3
.2
.0
.2
.5
1.5
.4
.1
-1.0
1.0
.3
.3
-.4
-1.7
.7
1.1
.5
-2.6
-.3
.1
.6
2.0
.1
-.2
.0
-.6
1.5
.2
.4
.4
-1.3
.4
.3
.3
.3
.3
.2
.6
.3
.1
.4
-.4
.6
1.5
1.3
-.1
.5
.2
-1.9
1.3
-2.1
-.4
1.3
-1.4
—.1
.1
—.1
.0
-.3
-.5
-.3
-.7
.3
-L8
-2.3
.2
1.5
.6
-.7
.1
.2
1.4
1.1
-4.3
3.3
-3.8
-2.3
-.4
-L0
.1
-2.8
-1.6
.4
-.2
-.2
-.2
-1.0
-1.2
1.6
3.9
-.1
CM CO OC
.6
-.4
.5
.0
Dec
0.3
.4
.2
'.S
-1.0
.9
.1
Sept
Oct
Nov
0.4
0.4
1.0
.4
.2
.4
-.4
.0
.4
.3
1.2
July
Aug
Seasonally
adjusted
1.1
-.2
.7
-.2
1.0
-.4
CMCOCMO
Feb
0.1
1.2
SeasonUna^
ally
adjusted justed
.0
.3
!o
.2
'.2
.2
.1
.3
.4
.4
.4
C*5
1970: Jan
.2
.1
.0
0.5
1.4
.1
-.1
1.1
.1
Season- Unadally
justed
adjusted
COCO
Nov
Dec.-..
.
0.1
6
SeasonUnadally
adjusted justed
.3
.0
.5
.2
.4
.2
.4
-.4
Nov
Season- Unadally
justed
adjusted
.2
.2
.5
.4
.2
.3
.2
.3
.6
.0
.3
Note.—The percentage changes are calculated from indexes on a 1957-59 base; therefore, the unadjusted changes
may differ slightly from those calculated from indexes on a 1967 base as shown in Table C-48.
Source: Department of Labor, Bureau of Labor Statistics.
257
MONEY STOCK, CREDIT, AND FINANCE
T A B L E C-52.— Money stock, 1947-70
[Averages of daily figures, billions of dollars]
Year and month
Total
money
stock
and
time
deposits
adjusted
Money stock
Total
CurDerency
mand
com- deposit
pocomnent^ ponent2
Time
deposits
adjusted 3
Total
money
stock
and
time
deposits
adjusted
Money stock
Total
Seasonally adjusted
CurDerency
mand
com- deposit
pocomnent 1 ponent2
Time
deposits
adjusted 3
U.S.
Government
demand
deposits*
Unadjusted
1947: Dec.
1948: Dec.
1949: Dec.
148.5
147.6
147.6
113.1
111.5
111.2
26.4
25.8
25.1
86.7
85.8
86.0
35.4
36.0
36.4
151.1
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
1950: Dec.
1951: Dec.
1952: Dec.
1953: Dec.
1954: Dec.
152.9
160.8
168.6
173.3
180.6
116.2
122.7
127.4
128.8
132.3
25.0
26.1
27.3
27.7
27.4
91.2
96.5
100.1
101.1
104.9
36.7
38.2
41.1
44.5
48.3
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
1955: Dec.
1956: Dec.
1957: Dec.
1958: Dec.
1959: Dec.
1960: Dec.
1961: Dec.
1962: Dec.
1963: Dec.
1964: Dec.
185.2
188.8
193.3
206.6
210.0
135.2
136.9
135.9
141.1
142.6
27.8
28.2
28.3
28.6
28.9
107.4
108.7
107.6
112.6
113.7
50.0
51.9
57.4
65.4
67.4
188.2
191.7
196.0
209.3
212.9
138.6
140.3
139.3
144.7
146.3
28.4
28.8
28.9
29.2
29.5
110.2
111.5
110.4
115.5
116.8
49.6
51.4
56.7
64.6
66.6
3.4
3.4
3.5
3.9
4.9
214.6
228.7
245.9
265.8
287.1
141.7
146.0
148.1
153.6
160.5
28.9
29.6
30.6
32.5
34.2
112.8 72.9
116.5 82.7
117.6 97.8
121.1 112.2
126.3 126.6
217.6
231.9
249.0
268.9
290.5
145.5
150.1
152.3
157.9
165.3
29.6
30.2
31.2
33.1
35.0
115.9 72.1
120.0 81.8
121.1 96.7
124.8 111.0
130.3 125.2
4.7
4.9
5.6
5.1
5.5
1965: Dec
1966: Dec.
1967: Dec.
1968: Dec.
1969: Dec.
314.8
330.0
366.6
402.2
398.2
168.0
171.7
183.1
197.4
203.6
36.3
38.3
40.4
43.4
46.0
131.7
133.4
142.7
154.0
157.7
146.8
158.3
183.5
204.8
194.6
318.3
333.8
370.7
406.6
403.0
173.1
176.9
188.6
203.4
209.8
37.1
39.1
41.2
44.3
46.9
136.0
137.8
147.4
159.1
162.9
145.2
156.9
182.1
203.2
193.2
4.6
3.4
5.0
5.0
5.6
1970: Dec*
445.0
214.6
48.9
165.6 230.4
449.8
221.1
50.0
171.1 228.7
7.1
1969: J a n . . .
Feb...
Mar...
Apr...
May..
June..
401.8
402.5
402.6
403.1
403.3
403.6
198.1
199.3
200.1
201.0
201.6
202.4
43.6
43.8
44.1
44.2
44.5
44.8
154.5
155.5
156.0
156.8
157.1
157.6
203.7
203,2
202.5
202.1
201.7
201.2
407.1
400.4
401.5
405.0
400.2
401.8
204.2
197.8
198.3
202.0
197.7
200.5
43.5
43.4
43.7
43.8
44.2
44.7
160.7
154.4
154.6
158.2
153.5
155.8
202.9
202.6
203.2
203.0
202.5
201.3
4.9
6.9
4.8
5.4
9.2
6.0
July...
Aug...
Sept..
Oct...
Nov...
Dec.
401.2
398.0
397.6
397.4
397.5
398.2
203.1
202.6
202.8
203.2
203.5
203.6
45.0
45.2
45.3
45.6
45.9
46.0
158.1
157.4
157.6
157.6
157.6
157.7
198.1
195.4
194.8
194.2
194.0
194.6
399.6
395.6
396.3
397.6
398.7
403.0
201.5
199.6
201.4
203.2
205.3
209.8
45.2
45.4
45.3
45.6
46.4
46.9
156.4
154.3
156.1
157.6
158.9
162.9
198.1
196.0
194.9
194.4
193.4
193.2
5.6
4.3
5.3
4.2
5.2
5.6
1970: Jan..
Feb..
Mar..
Apr..
May..
June.
398.5
398.0
401.9
406.8
409.5
411.8
205.2
204.5
206.6
208.3
209.2
209.6
46.2
46.4
46.7
47.1
47.7
47.8
159.0
158.1
159.8
161.2
161.6
161.9
193.3
193.5
195.3
198.5
200.3
202.2
404.1
395.8
400.6
408.6
406.4
410.1
211.4
202.8
204.7
209.3
205.3
207.8
46.1
45.9
46.3
46.6
47.3
47.7
165.4
156.8
158.4
162.6
158.0
160.1
192.7
193.0
195.9
199.3
201.1
202.3
4.8
7.1
6.9
5.3
6.4
6.5
418.8
425.0
431.3
435.2
438.5
445.0
210.6
211.8
212.8
213.0
213.5
214.6
48.1
48.2
48.2
48.5
48.7
48.9
162.5
163.7
164.6
164.5
164.8
165.6
208.2
213.2
218.5
222.2
225.0
230.4
417.1
422.7
429.8
435.5
439.9
449.8
209.0
208.7
211.4
213.0
215.3
221.1
48.3
48.3
48.2
48.5
49.2
50.0
160.7
160.4
163.1
164.5
166.1
171.1
208.1
214.0
218.4
222.5
224.6
228.7
6.8
7.1
6.8
6.1
5.6
7.1
July...
Aug...
Sept..
Octp..
Nov p.
Dec p..
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. Government, less cash items in process of collection and Federal Reserve float, plus foreign demand balances at Federal Reserve
Banks.
s Time deposits adjusted are time deposits at all commercial banks other than those due to domestic commercial banks
and the U.S. Government.
* Deposits at all commercial banks.
Note.—Effective June 1E66, balances accumulated for payment of personal loans were reclassified for reserve purposes
and are excluded from time deposits reported by member banks. The estimated amount of such deposits at all commercial banks ($1.1 billion) is excluded from time deposits adjusted thereafter.
Source: Board of Governors of the Federal Reserve System.
258
TABLE C-53.—Bank loans and investments, 1930-70
[Billions of dollars]
Weekly reporting large
commercial
banks 3
All commercial banks
l
End of year or month
1930: June
1931: June
1932: June
1933: June
1934: June
1935..
1936
1937
1938
1939
1940
1941.
1942
1943
1944
1945
1946
1947
1948
Total loans
and investments 2
.
...
.
.
.
.
1948
1949
1950
1951
1952 '
1953
1954
1955
.
1956
1957...
1958
1959
1960
1961
1962 . .
1963
1964
1965
1966
1967
1968
1969 6 .
1970 p
1969:Jan
Feb
Mar
.. .
Apr
May
June 6
June
. . . .
July
Aug
Sept
Oct
Nov
Dec
1970- Jan
Feb
Mar
Apr
May
.
June
---._..
July
Aug
.-... ...
Sept
Oct p
Nov p
Dec p
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
Investments
Loans 2
U.S. Government securities
34.5
5.0
29.2
60
21.8
6.2
16.3
7.5
15.7
10 3
15.2
13.8
16.4
15.3
17.2
14.2
16.4
15.1
17.2
16 3
18.8
17.8
21.7
21.8
19.2
41.4
19.1
59.8
21.6
77.6
26.1
90.6
31.1
74.8
38.1
69.2
42.4
62.6
Seasonally adjusted
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
5 310.5
346.5
384.6
401.3
432.5
385.9
387.9
386.6
390.7
392.2
392.5
397.3
397.7
397.5
396.5
397.6
401.2
401.3
398.5
399.7
400.9
403.5
405.9
406.4
412.8
418.3
423.7
424.0
427.3
432.5
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
s 208.2
225.4
251.6
278.1
288.9
253.7
258.4
257.3
261.0
264.1
264.3
269.2
269.9
270.3
271.3
273.8
276.4
278.1
276.6
278.5
277.6
277.0
278.0
211A
281.5
284.1
287.3
286.9
287.7
288.9
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
61.5
51.9
58.0
60.8
58.1
57.4
57.7
56.1
56.2
56.3
56.8
56.9
54.7
53.5
53.4
51.9
50.4
49.8
50.3
52.4
53.4
54.1
55.8
57.5
57.6
56.3
56.5
58.0
Other
securities
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
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
5 48.7
61.4
71.5
71.3
85.6
71.4
71.5
71.9
72.1
72.0
72.0
71.8
71.0
70.3
70.5
70.3
71.4
71.3
71.5
71.4
73.0
74.0
74.5
75.0
75.5
76.7
78.8
80.8
83.2
85.6
Business loans*
5.1
4.2
4.7
5.3
7.1
6.3
6.4
6.5
7.3
11.3
14.7
15.6
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
73.1
81.5
81.5
72.9
73.7
75.0
76.7
76.6
78.4
78.4
77.6
76.7
78.1
77.6
78.0
81.5
78.0
78.0
78.5
78.5
77.8
79.6
79.3
79.2
81.2
80.0
79.9
81.5
1 Data are for last Wednesday of month (except June 30 and December 31 call dates used for all commercial banks).
* Adjusted to exclude interbank loans beginning 1948.
Weekly reporting large commercial banks beginning 1965 and weekly reporting member banks prior to 1965.
* 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 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.
e New series beginning June 1969; for details see "Federal Reserve Bulletin," August 1969.
Source: Board of Governors of the Federal Reserve System.
3
259
TABLE C-54.—Total funds raised in credit markets by nonfinancial sectors, 1962—70
[Billions of dollars]
1962
Nonfinancial sector
Total funds raised
U.S. Government-.
Public debt securities
1963
1964
Capital market instruments
Corporate equity shares
Debt capital instruments
State and local governments
Corporate and foreign
bonds
Mortgages
Home
Other residential..
Commercial
Farm
Other private credit
Bank loans n.e.c
Consumer credit
Open-market paper
Other
Total funds supplied directly
U.S. Government
U.S. Government credit agencies, net.
Funds advanced
Less funds raised
Federal Reserve System
Commercial banks, net
Private nonbank finance
Savings institutions, net
Insurance
Finance n.e.c, net
Funds advanced
..
Less funds raised
Foreign
Private domestic nonfinancial
Business
State and local government,
general funds
Households
Less net security credit
1967
1968
1969
57.7
66.9
70.4
68.5
82.6
97.4
88.2
7.0
4.0
6.4
1.7
3.5
13.0
13.4
-3.6
6.2
.8
4.1
-.1
5.4
1.0
1.3
.4
2.3
1.2
8.9
4.1
10.3
3.0
-1.3
-2.4
64.9
69.6
84.1
91.9
39.9
48.0
50.5
53.6
.9
39.0
2.4
45.7
-.7
51.2
4.5
49.1
47.1
53.7
60.5
68.7
33.1
35.7
37.9
39.1
.6
32.6
-.2
35.9
1.6
36.3
.3
38.8
5.3
5.9
5.7
7.3
5.7
7.7
9.9
8.5
5.5
21.7
4.9
25.1
4.5
26.1
5.9
25.6
11.0
22.3
15.9
22.0
14.0
27.3
13.3
27.4
12.8
2.8
4.8
1.3
15.1
3.2
5.1
1.6
15.6
4.5
3.8
2.1
15.4
3.6
4.4
2.2
11.4
3.1
5.7
2.1
11.6
3.6
4.7
2.1
15.2
3.5
6.6
2.1
15.7
4.4
5.2
2.0
14.0
18.0
22.6
29.5
25.0
21.6
33.6
38.3
5.2
5.8
.1
2.8
6.0
7.9
.0
4.1
8.3
8.5
.7
5.1
14.2
10.0
-.3
5.7
10.3
7.2
1.0
6.4
9.6
4.6
2.1
5.2
13.4
11.1
1.6
7.5
14.2
9.3
3.3
11.3
54.1
57.7
66.9
70.4
68.5
82.6
97.4
88.2
4.9
.3
4.6
.5
5.2
-.2
2.6
.1
5.1
4.8
-.1
-.6
3.2
3.5
8.9
2.0
.1
1.5
.1
2.8
.4
1.6
1.5
1.6
1.4
.7
.4
2.8
.0
2.2
2.3
2.0
19.5
26.6
2.9
19.1
29.9
3.4
21.8
31.0
3.8
28.3
30.1
3.5
16.7
25.9
4.8
36.8
36.1
3.7
39.0
33.5
4.2
9.4
30.9
12.9
14.4
15.5
14.3
16.0
15.6
-.5
13.7
17.9
-1.4
7.8
19.3
-1.3
16.9
20.4
—1.3
14.5
21.5
-2.4
10.3
22.3
—1.7
4.6
5.3
5.8
5.8
5.5
6.1
6.9
8.3
5.8
7.1
4.3
5.6
9.8
12.3
10.0
11.7
1.5
.9
.6
-.3
-1.8
2.8
2.5
2.0
2.4
3.4
7.0
5.6
19.1
—2.9
13.7
39.0
1.8
2.9
2.0
1.0
3.6
—.6
9.0
11.4
1.2
-.8
-.2
1.1
1.3
2.0
.9
4.0
-.2
2.5
2.5
.3
3.4
11.9
-.2
1.2
—1.3
2.2
.7
5.4
1.4
7.2
18.8
—1.6
See footnote at end of table.
1966
54.1
Budget agency issues
All other sectors
1965
260
TABLE C-54.—Total funds raised in credit markets by nonfinancial sectors,
1962-70—Continued
[Billions of dollars]
1970 unadjusted quarter- 1970 seasonally adjusted
annual rates
ly totals
Nonfinancial sector
1
Total funds raised
U.S. Government
Public debt securities
II
III
1
II
III
12.8
21.4
26.5
80.0
101.3
103.0
2.0
-6.4
9.7
3.3
17.2
18.8
2.5
-.5
-5.9
9.9
-.2
5.6
-2.3
17.8
-.6
18.4
.4
10.8
27.8
16.7
76.7
84.1
84.2
11.4
17.0
16.4
52.7
63.1
64.1
1.6
9.9
1.5
15.5
1.4
15.0
6.3
46.4
6.2
56.9
5.6
58.6
1.9
3.5
4.5
3.4
5.7
6.3
2.7
5.1
7.1
9.2
14.7
22.5
11.0
22.3
23.6
11.7
19.7
27.2
2.1
1.4
1.0
.0
3.1
1.4
1.3
.5
4.1
1.4
1.3
.4
11.4
6.0
5.0
.1
11.8
5.5
4.8
1.5
15.2
5.5
4.9
1.6
Budget agency issues
All other sectors
Capital market instruments
Corporate equity shares
Debt capital instruments
State and local governments
Corporate and foreign bonds
Mortgages
Home
Other residential
Commercial
Farm
Other private credit
Bank loans n.e.c
Consumer credit
Open-market paper
Other
Total funds supplied directly
U.S. Government
U.S. Government credit agencies, net
Funds advanced
Less funds raised
Federal Reserve System
Commercial banks, net
Private nonbank finance
Savings institutions, net
Insurance
Finance n.e.c, net
Funds advanced
Less funds raised
Foreign
Private domestic nonfinancial
Business..
State and local government, general funds
Households
Less net security credit
Source: Board of Governors of the Federal Reserve System.
261
-.6
10.8
.3
24.0
21.0
20.1
-1.7
-2.8
1.6
2.2
5.2
2.8
.3
2.4
-2.6
1.4
.5
1.0
7.8
4.8
5.0
6.4
4.5
6.2
2.2
8.1
4.5
6.4
.5
8.8
12.8
21.4
26.5
80.0
101.3
103.0
.9
j
.6
.5
.6
-.6
2.7
-.6
2.8
1.9
2.7
-.6
3.5
3.6
2.0
1.6
1.6
2.2
14.2
14.7
6.6
4.7
8.6
9.1
-1.3
-8.1
7.2
2.0
7.7
8.4
2.2
12.1
11.6
1.3
3.8
25.9
5.9
23.9
36.7
7.5
60.5
44.5
1.8
6.0
-.6
3.5
4.6
.3
5.4
6.5
-.3
5.3
22.7
-2.1
15.6
21.0
.2
20.6
25.2
-1.3
-1.5
g
.4
.2
2.6
2.9
-.8
1.2
-1.7
-1.9
17.3
18.6
2.0
2.0
3.3
8.1
9.4
7.8
12.3
.3
-2.8
38.8
20.7
-19.5
.8
1.3
8.9
-1.4
-.3
.5
-.7
-.8
-7.8
-2.7
7.6
-.1
10.7
1.4
21.5
-5.2
.9
2.0
15.2
-2.7
-23.2
-7.8
11.3
-.2
TABLE C-55.—Selected liquid assets held by the public, 1946-70
l
[Billions of dollars, seasonally adjusted]
End of year or month
Total
Time d eposits
Demand _
deposits
Mutual
and
Commercial
savings
currency2
banks 3
banks
Postal
savings
system
Savings
and
loan
shares
U.S.
Government
savings
bonds4
U.S.
Government
securities
maturing
within
1 year 4
1946
1947
1948
1949
239.1
246.2
254 1
262.1
108.5
112.4
110 5
110.4
33.9
35.3
35 9
36.3
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
1950
1951
1952.
1953
1954
271.4
281 0
296.0
311.5
320.3
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
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
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
49.7
52.0
57 5
65.4
67.4
28.1
30.0
31 6
33.9
34.9
1.9
1.6
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
399.2
424.6
459.0
495 4
530.5
138.4
142.6
144.8
149 6
156.7
73.1
82.5
98.1
112 9
127.1
36.2
38.3
41.4
44 5
49.0
.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
1965
1966 a
1967
1968
1969
573 1
601.5
650.4
709.6
731 6
164 1
168.6
180.7
e 199.2
206 8
147 1
159.3
183.1
203.8
197 1
52 6
55.2
60.3
64.7
67.3
.3
.1
109.8
113.4
123.9
131.0
134.8
50.5
50.9
51.9
52.5
52.4
48.6
53.9
50.5
58.5
W3.2
1970 v
787.9
, 208.1
233.7
71.2
145.7
52.7
76.4
1969:Jan
Feb
Mar
Apr
May
June - - - - -
703.7
705.7
713.2
711.3
714.3
713.8
188.8
189.9
192.4
190 8
191.5
194.2
203.4
202.9
201.9
201 8
202.7
200.4
64.8
65.2
65.5
65.7
66.1
66.3
131.0
132.0
133.4
133.3
133.5
133.6
52.5
52.3
52.2
52.2
52.2
52.2
7 63.4
63.4
67.7
67.5
68.3
67.3
709.5
713 2
718.1
714 9
722.1
731 6
2 191.9
193 3
194.1
194 0
195.8
206 8
197.5
195 6
195.5
195 7
197.9
197 1
66.3
66.4
66.6
66.7
67.0
67.3
133.6
134.1
135.3
134.9
135.3
134.8
52.2
52.1
52.0
52.0
52.0
52.4
68.1
71.6
74.6
71.7
74.2
73.2
720.5
721.8
733.4
731.2
734.0
738.5
195.4
194.8
199.3
196.7
197.9
199.8
196.0
196.7
198.8
201.5
201.7
202.9
67.0
67.4
67.5
68.0
68.4
68.7
133.5
134.1
135.7
136.4
136.8
137.4
52.2
52.1
52.0
52.0
52.0
52.0
76.3
76,6
80.1
76.8
77.2
77.7
749.7
750 8
765 4
764.5
773 5
787.9
198.7
199 3
203.6
199.6
201 1
208.1
211.8
215 4
221.5
224.5
230 3
233.7
69.2
69 4
69.9
70.4
70 9
71.2
139.0
140.0
142.3
143.4
144.6
145.7
52.4
52.0
52.1
52.1
52.2
52.7
78.5
74.6
76.0
74.5
74.3
76.4
1960
1961
1962
1963
1964..
.
.
.
.
July
.
Aug
Sept . .
Oct
Nov
.
Dec
1970: Jan
Feb.
Mar
Apr
May
June
--.
July
Aug
Sept
Octp _
Nov v
Dec p
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 stock, Table C-52, except for deduction of demand deposits held by mutual savings
banks and savings and loan associations. Data are for last Wednesday of month. Data prior to July 1969 have not been revised to conform to the money stock revision.
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 C-52). Data are for last Wednesday of month, except that June 30 and December 31 call
data are used where available.
4
Excludes holdings ot 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.
0
Estimates for Tuesday, December 31, rather than last Wednesday of December.
7 Beginning 1969, data have been adjusted to conform to the new budget concept.
Source: Board of Governors of the Federal Reserve System.
262
TABLE G-56.—Federal Reserve Bank credit and member bank reserves, 1929-70
[Averages of daily figures, millions of dollars]
Reserve Bank credit outstanding
Year and month
U.S.
Government securities
Member
bank
borrowings
1,643
1,273
1,950
2,192
2,669
2,472
2,494
2,498
2,628
2,618
2,612
2,305
2,404
6,035
11,914
19,612
24,744
24,746
22,858
23,978
19,012
21,606
25,446
27,299
27,107
26,317
26,853
27,156
26,186
28,412
29,435
29,060
31,217
33,218
36,610
39,873
43,853
46,864
51,268
56,610
64,100
66,676
446
644
111
1,854
2,432
2,430
2,430
2,434
2,565
2,564
2,510
2,188
2,219
5,549
11,166
18,693
23,708
23,767
21,905
23,002
18,287
20,345
23,409
24,400
25,639
24,917
24,602
24,765
23,982
26,312
27,036
27,248
29,098
30,546
33,729
37,126
40, 885
43,760
48,891
52,529
57, 500
61,688
801
337
763
281
396
292
410
57
95
142
10
6
7
16
7
3
3
5
4
32
58
57
47
47
99
114
180
482
90
658
265
334
654
702
56, 476
55, 786
55, 477
58,821
59,999
60, 565
52,665
52,265
52,122
52,463
53, 390
54, 028
60, 887
60, 876
60, 459
61,516
62,788
64,100
54, 298
54, 599
53,840
54, 708
56,499
57, 500
62, 867
61,468
61,388
62, 424
63, 087
62, 843
56,273
55, 949
55, 780
55, 982
57,265
57,630
63,912
64,134
64, 619
64, 708
65,132
66,676
58, 219
59, 544
59,903
59, 533
60,393
61,688
Total
1929:
1930:
1931:
1932:
1933:
1934:
1935:
1936:
1937:
1938:
1939:
1940:
1941:
1942:
1943:
1944:
1945:
19461947:
1948:
1949:
1950:
1951:
1952:
1953:
1954:
1955:
1956:
1957:
1958:
1959:
1960:
1961:
1962:
1963:
1964:
1965:
1966:
1967:
1968:
1969:
1970-
Dec . . .
Dec
Dec . . .
Dec.
Dec
Dec
Dec
Dec
Dec
Dec
Dec
Dec
Dec
Dec .
Dec
Dec
Dec . .
Dec
Dec
Dec .
Dec
Dec . . .
Dec
Dec
Dec _
Dec
Dec
Dec
Dec . .
Dec
Dec
Dec
Dec
Dec
Dec
Dec
Dec
Dec . . .
Dec
Dec
Dec
Dec v
1969: Jan
Feb
Mar
Apr
May
June
July
Aug
Sept...
Oct
Nov
Dec
_ .
1970: Jan
Feb
Mar
Apr
May
June
July
Aug _Sept
Oct
Nov v
Deep
_
Member bank reserves
All
other,
mainly
float
Total
Excess
2,347
2,342
2,010
1,909
i 1,822
2,290
2,733
4,619
5,808
5,520
6,462
7,403
9,422
10,776
11,701
12,884
14,536
15,617
16,275
19,193
15,488
16,364
19,484
20,457
19,227
18,576
18,646
18,883
18,843
18,383
18,450
18,527
19,550
19,468
20,210
21,198
22,267
23,438
24,915
26,766
27,774
28,989
48
73
60
526
1766
1,748
2,983
2,046
1,071
3,226
5,011
6,646
3,390
2,376
1,048
1,284
1,491
1,119
1,380
1,306
1,027
1,154
1,412
1,703
1,494
1,543
1,493
1,725
1,970
2,368
2,554
2,504
2,514
2,547
2,139
3,316
5,514
4,667
2,395
2,415
2,069
2,435
2,588
4,037
5,716
6,665
6,879
8,745
11,473
14,049
12,812
13,152
12,749
14,168
16,027
16,517
17,261
19,990
16,291
17,391
20,310
21,180
19,920
19,279
19,240
19,535
19,420
18,899
2 18,932
19,283
20,118
20,040
20,746
21,609
22,719
23,830
25,260
27,221
28,031
29,233
28, 063
27,291
26,754
27, 079
27, 903
27,317
27, 846
27, 063
26, 537
26, 927
27, 603
26,974
217
1,402
1,407
3,114
2,697
2,437
5,362
5,207
5,130
228
217
152
300
343
-480
-596
-701
-844
-1,102
-1,064
1,190
1,249
1,067
1,135
1,241
1,086
5,399
5,028
5,552
5,673
5,048
5,514
26, 980
27, 079
26,971
27,340
27,764
28,031
26,864
26, 776
26,735'
27,197
27,511
27,774
116
303
236
143
253
257
-1,074
-946
-831
-992
-988
-829
965
5,629
4,427
4,712
5,620
4,846
4,325
28, 858
27, 976
27, 473
28,096
27,910
27, 567
28,692
27,703
27,358
27, 978
27,729
27,380
166
273
115
118
181
187
-799
-819
-781
-704
-795
-701
4,335
3,763
4,109
4,713
4,314
4,667
28,128
28,349
28, 825
28,701
28, 558
29,233
27,987
28, 204
28, 553
28,447
28,438
28,989
141
145
111
254
120
244
-1,217
-682
-335
-208
-305
157
822
224
134
729
842
118
142
657
1,593
441
246
839
688
710
557
906
87
149
304
327
243
454
557
238
765
1,086
321
697
824
918
996
1,092
896
822
976
888
1,358
849
607
462
425
321
607
1 Data from March 1933 through April 1934 are for licensed banks only.
Beginning December 1959, total reserves held include vault cash allowed.
2
Source: Board of Governors of the Federal Reserve System.
Required
Member
bank free
reserves
(excess
reserves
less borrowings)
263
900
986
797
803
1,027
826
723
693
703
594
652
577
516
482
756
568
572
536
411
452
392
345
455
257
244
-753
-264
-703
245
671
1,738
2,977
2 039
1,055
3,219
5,008
6,643
3,385
2,372
958
1,019
1,157
743
762
663
685
885
169
-870
252
457
-245
-36
-133
-41
-424
669
419
268
209
168
-2
-165
107
-310
-829
-77
-77
TABLE C-57.—Bondyields and interest rates, 1929-70
[Percent per annum]
Corporate
bonds
(Moo dy's)
U.S. Government securities
Year or month
3-month
Treasury
bills i
9-12
month
issues2
3-5
Taxable
year
4
issues 3 bonds
1929.
1930..
1931
1932
1933
1934
()
1.402
.879
.515
.256
1935
1936
1937
1938
1939
.137
.143
.447
.053
.023
1940
1941....
1942....
1943
1944
.014
.103
.326
.373
.375
0.75
.79
.375
.375
.594
1.040
1.102
.81
.82
.88
1.14
1.14
1945.
1946.
1947.
1948.
1949.
Aaa
Baa
Highgrade
municipal
bonds
(Standard &
Poor's)
Average
rate on
shortterm
bank
loans
to businessselected
cities
Prime
commercial
paper,
4-6
months
Federal
Reserve
Bank
rlie
aiscount
rate
FHA
new
home
mortgage
yields 5
4.73
5.90
4.27
(7)
5.85
5.17
5.90
7.62
9.30
7.76
6.32
4.07
4 01
4.65
4 71
4.03
(0
2.66
2.12
4.55
4.58
5.01
4.49
4.00
(7)
3.59
2.64
2.73
1.73
1.02
3.04
2.12
2.82
2 56
1.54
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 40
3.G7
3 10
2.91
2.76
(7)
.75
(0
.75
94
2.1
.81
.59
1.50
1.50
1.33
1.00
1.00
2.46
2.47
2.48
2.84
2.77
2.83
2.73
2.72
4.75
4.33
4.28
3.91
3.61
2.50
2.10
2 36
2 06
1.86
2.1
2.0
2.2
2.6
2.4
.56
.53
.66
.69
.73
1.00
1.00
8 1.00
8 1.00
8 1.00
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
1.67
1 64
2 01
2.40
2.21 %
2.2
.75
81
1.03
1.44
1.49
8 1.00
8 1.00
1.00
1.34
1.50
/1.17
.18
.16
.32
.62
.43
(7)
(7)
(7)
(7)
(7)
2 1
2 1
2.5
2.68
4.34
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
3.24
3.4L
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
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
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
« 5.00
2.18
3.31
3.81
2.46
3.97
1.89
2.77
3.12
2.15
3.36
4.64
4.79
5.42
5.49
5.71
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
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
1965.
1966.
1967.
1968..
1969.
3.954
4.881
4.321
5.339
6.677
4.09
5.17
4.84
5.62
7.06
4.22
5.16
5.07
5.59
6.85
4.21
4.65
4.85
5.26
6.12
4.49
5.13
5.51
6.18
7.03
4.87
5.67
6.23
6.94
7.81
3.27
3.82
3.98
4.51
5.81
5.06
6.00
io 6.00
6.68
8.21
4.38
5.55
5.10
5.90
7.83
4.04
4.50
4.19
5.17
5.87
5.46
6.29
6.55
7.13
8.19
1970.
6.458
6.90
7.37
6.58
8.04
9.11
6.51
8.48
7.72
5.95
9.05
1968: J a n . .
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
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
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
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
r.36
See footnotes at end of table.
264
6.36
6.84
6.89
6.61
t1.21
i
129
1.61
162
TABLE G-57.—Bond yields and interest rates,
1929-70—Continued
(Percent per annum]
u.s. Government securities
Corporate
bonds
(Moody's)
Year or month
3-month 9-12
3-5
Taxable4
Treas- month
year
ury
issues 2 issues3 bonds
bills i
Aaa
Baa
Average
Highrate on
grade
shortterm
municbank
ipal
loans
bonds
(Stand- to businessard &
Poor's) selected
cities
1969: Jan
Feb
Mar
Apr
May
June
6.177
6.156
6.080
6.150
6.077
6.493
6.26
6.21
6.22
6.11
6.26
7.07
6.04
6.16
6.33
6.15
6.33
6.64
5.74
5.86
6.05
5.84
5.85
6.05
6.59
6.66
6.85
6.89
6.79
6.98
7.32
7.30
7.51
7.54
7.52
7.70
4.95
5.10
5.34
5.29
5.47
5.83
July
Aug
Sept
Oct
Nov
Dec
7.004
7.007
7.129
7.040
7.193
7.720
7.59
7.51
7.76
7.63
7.94
8.34
7.02
7.08
7.58
7.47
7.57
7.98
6.07
6.02
6.32
6.27
6.52
6.81
7.08
6.97
7.14
7.33
7.35
7.72
7.84
7.86
8.05
8.22
8.25
8.65
5.84
6.07
6.35
6.21
6.37
6.91
1970: Jan
Feb
Mar
Apr
May
June
7.914
7.164
6.710
6.480
7.035
6.742
8.22
7.60
6.88
6.96
7.69
7.50
8.14
7.80
7.20
7.49
7.97
7.86
6.86
6.44
6.39
6.53
6.94
6.99
7.91
7.93
7.84
7.83
8.11
8.48
8.86
8.78
8.63
8.70
8.98
9.25
6.80
6.57
6.14
6.55
7.02
7.06
July
Aug
Sept
Oct
Nov
Dec
6.468
6.412
6.244
5.927
5.288
4.860
7.00
6.92
6.68
6.34
5.52
4.94
7.58
7.56
7.24
7.06
6.37
5.86
6.57
6.75
6.63
6.59
6.24
5.97
8.44
8.13
8.09
8.03
8.05
7.64-
9.40
9.44
9.39
9.33
9.38
9.12
6.69
6.33
6.45
6.55
6.20
5.71
7.32
7.86
8.82
8.83
8.86
8.49
8.50
8.07
months
Federal
Reserve
Bank
discount
rate
6.53
6.62
6.82
7.04
7.35
8.23
5.50
5.50
5.50
5.95
6.00
6.00
7.99
8.05
8.06
8.06
8.65
8.33
8.48
8.56
8.46
8.84
6.00
6.00
6.00
6.00
6.00
6.00
8.35
8.36
8.36
8.40
8.48
8.48
8.78
8.55
8.33
8.06
8.23
8.21
6.00
6.00
6.00
6.00
6.00
6.00
9.29
9.20
,9.10
9.11
8,29
7.90
7.32
6.85
6.30
5.73
6.00
6.00
6.00
6.00
5.85
5.52
9.16
9.11
9.07
9.01
8.97
8.90
Prime
commercial
FHA
new
home
mortgage
yields*
7.50
8.62
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).
•Selected note and bond issues. Issues were partially tax exempt prior to 1941, and fully taxable thereafter.
* 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.
5
Data for first of the month, based on the maximum permissible interest rate (8 percent beginning December 2, 1970).
Through July 1961, computed on 25-year mortgages paid in 12 years and thereafter, 30-year mortgages prepaid in 15 years.
8
Treasury bills were first issued in December 1929 and were issued irregu larly in 1930.
1
Not available on same basis as for 1939 and subsequent years.
« From October 30, 1942, to April 24, 1946, a preferential rate of 0.50 percent was in effect for advances secured by
Government securities maturing in 1 year or less.
• 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.
265
TABLE C-58.—Short- and intermediate-term consumer credit outstanding, 1929—70
[Millions of dollars]
Instalment credit
End of year or month
Total
Total
1929
1930
1931
1932
1933
1934
1935
1936
1937
1938
1939
1940
1941
1942
1943
1944
1945
1946
1947
1948
1949
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970 4
Apr
May
June
July
Aug
Sept
Oct
Nov
Dec
1970: Jan
Feb
Mar
Apr
May .
June
July
..
Sept
Oct
..
Aug
Nov4
Dec
Other
consumer
goods
paper
1,384
1,544
986
684
356
493
614
992
1,432
1,214
Home
repair
and
modernization
loans i
Personal
loans
27
25
22
18
15
37
253
364
219
218
569
579
543
464
416
459
572
721
900
927
298
371
1,088
1,245
1,322
3,524
7,116
3,022
6,351
2,463
- - . - 5,315
1,672
4,026
3,885
1,723
4,218
1,999
2,817
5,190
6,375
3,747
4,118
6,948
6,370
3,686
7,222
4,503
5,514
8,338
6,085
9,172
3,166
5,983
4,901
2,136
5,111
2,176
2,462
5,665
4,172
8,384
6,695
11,598
14,447
8,996
17,364 11,590
21,471 14,703
22,712 15,294
27,520 19,403
31,393 23,005
32,464 23,568
38,830 28,906
42,334 31,720
44,971 33,868
45,129 33,642
51, 544 39,247
56,141 42,968
57,982 43,891
63,821 48,720
71,739 55,486
80,268 62,692
90,314 71,324
97,543 77,539
102,132 80,926
113,191 89,890
122,469 98,169
126,200 100,900
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
34,130
36,602
35,700
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
24,899
27,609
29 400
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
3,925
4,040
4,100
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
26,936
29,918
31,700
89,492
89,380
89,672
90,663
91,813
93, 087
93,833
94,732
95,356
95,850
96,478
98,169
34,013
34,053
34,262
34,733
35,230
35,804
36,081
36,245
36,321
36, 599
36,650
36, 602
24,682
24,404
24,306
24,399
24,636
24,956
25,172
25,467
25,732
25,855
26,223
27, 609
3,886
3,875
3,874
3,903
3,964
4,022
4,039
4,063
4,096
4,084
4,076
4,040
121,074 97, 402
120,077 96, 892
_ 119,698 96,662
120,402 97,104
121, 346 97, 706
122, 542 98, 699
123,092 99, 302
123,655 99, 860
_ 123, 907 100,142
123, 866 99,959
123 915 99 790
126,200 100,900
36, 291
36,119
36,088
36, 264
36, 455
36, 809
36,918
36,908
36, 738
36, 518
36 011
35,700
27, 346
26, 987
26, 814
26, 850
27,055
27, 303
27, 538
27, 801
28,055
28,152
28 378
29,400
3,991
3,970
3,951
3,960
4,003
4,040
4,081
4,104
4,123
4,126
4 133
4,100
112,117
111,569
111,950
113,231
114,750
115,995
116,597
117,380
118,008
118,515
119,378
122,469
1969:Jan
Feb
Mar
Automobile
paper
Noninstalment credit
1,372
1,494
1,099
1,497
2,071
2,458
742
355
397
455
981
834
799
889
1,000
1,290
1,505
1,442
1,620
1,827
1,929
1,195
819
791
816
376
255
130
119
182
405
718
853
898
Total
3,592
Charge
accounts
Addendum:
Policy
loans by
life inOther 2 surance
companies 3
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
1,996
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
13,173
14,091
15,101
16,253
17,576
18,990
20,004
21,206
23,301
24,300
25,300
5,329
5,324
5,684
5,903
6,195
6,430
6,686
6,968
7,755
8,234
8,600
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
15,546
16,066
16,700
26,911
27,048
27,230
27,628
27,983
28,305
28, 541
28,957
29,207
29,312
29, 529
29,918
22,625
22,189
22,278
22,568
22,937
22,908
22,764
22,648
22,652
22,665
22,900
24,300
7,097
6,403
6,340
6,557
6,971
7,002
7,039
6,988
7,005
7,085
7,238
8,234
15,528
15,786
15,938
16,011
15,966
15,906
15,725
15,660
15,647
15,580
15,662
16,066
11,416
11,522
11,734
11,939
12,126
12, 366
12, 663
12,933
13,184
13,418
13,580
13,805
29,774
29,816
29, 809
30,030
30,193
30,547
30,765
31,047
31, 226
31,163
31,268
31,700
23, 672
23,185
23,036
23, 298
23, 640
23, 843
23, 790
23, 795
23, 765
23,907
24 125
25,300
7,539
6,789
6,645
6,900
7,273
7,473
7,509
7,508
7,489
7,656
7,757
8,600
16,133
16, 396
16, 391
16, 398
16, 367
16, 370
16, 281
16, 287
16, 276
16, 251
16, 368
16,700
14,060
14,295
14,535
14,759
14,951
15,180
15,354
15, 517
15, 674
15,813
974
832
869
1,596
1,496
1,217
980
876
913
2 379
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
5,231
5,733
6,234
6,655
7,140
7,678
9,117
10,059
11,305
13. 825
'Moldings of financial institutions only; holdings of retail outlets are included in "other consumer goods paper."
3 Single-payment loans and service credit.
* 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).
266
TABLE C-59.—Instalment credit extended and repaid, 1946—70
[Millions of dollars]
Automobile
paper
Total
Other consumer
goods paper
Home repair and
modernization
loans
Extended
Extended
Personal
loans
Year or month
Extended
Repaid
1946.
1947.
1948.
1949.
8,495
12,713
15,585
18,108
6,785
10,190
13,284
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
2,539
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.
1968.
1969.
78,586 69,957
82,335 76,120
84,693 81,306
97, 053 88, 089
102, 888 94,609
27,227
27,341
26,667
31,424
32,354
23,543
25,404
26,499
28,018
29,882
22,750
25,591
26,952
30,593
33, 079
20,518
23,178
25,535
28, 089
30,369
2,266
2,200
2,113
2,268
2,278
2,116
2,110
2,142
2,132
2,163
26,343
27,203
28,961
32,768
35,177
23,780
25,428
27,130
29,850
32,195
1970 i
103,850 101,150
30,000
30,900
36,200
34,450
2,200
2,100
35,450
33,700
2,877
2,899
2.828
2,966
2,947
2,893
2,648
2,624
2,593
2,687
2,656
2,665
Extended
Repaid
Repaid
Repaid
Extended
Repaid
Seasonally adjusted
8,371
8,414
8,381
8,720
8,680
8,705
7,730
7,616
7,735
7,960
7,834
7,910
2,661
2,716
2,730
2,772
2,757
2,725
2,467
2,468
2,501
2,519
2,488
2,460
2,654
2,598
2,625
2,763
2,767
2,869
2,442
2,352
2,461
2,569
2,507
2,602
179
201
198
219
209
218
173
172
180
185
183
July..
Aug..
Sept.
Oct..
Nov.
Dec.
8,521
8,680
8,669
8,661
8,632
8,344
7,899
8,080
7,971
7,992
8,012
7,929
2,582
2,634
2,794
2,808
2,683
2,472
2,471
2,562
2,498
2,463
2,503
2,499
2,777
2,819
2,740
2,707
2,841
2,838
2,511
2,574
2,600
2,615
2,623
2,552
185
177
180
175
164
169
191
185
156
189
179
185
2,977
3,050
2,955
2,971
2,944
2,865
2,726
2,759
2,717
2,725
2,707
2,693
1970: Jan...
Feb..
Mar...
Apr...
May..
June..
8,521
8,625
8,392
8,491
9,004
8,683
8,141
8,207
8,194
8,195
8,589
8,242
2,479
2,536
2,496
2,571
2,595
2,587
2,469
2,550
2,501
2,527
2,600
2,573
2,925
3,018
2,922
2,843
3,183
2,925
2,722
2,761
2,792
2,729
2,888
2,750
160
179
165
183
180
189
168
171
169
173
174
174
2,957
2,892
2,809
2,894
3,046
2,982
2,782
2,725
2,732
2,766
2,927
2,745
July..
Aug...
Sept..
Oct.
Nov_.
Deci.
9,065
8,809
8,849
8,580
8,414
8,500
8,622
8,577
8,490
8,662
8,716
8,500
2,685
2,537
2,621
2,349
2,127
2,200
2,752
2,632
2,599
2,550
2,577
2,500
3,124
3,168
3,071
3,113
3,113
3,100
2,874
2,967
2,913
3,036
3,082
3,000
192
173
186
182
180
200
170
175
174
179
176
200
3,064
2,931
2,971
2,936
2,994
3,000
2,826
2,803
2,804
2,897
2,881
2,800
1969 : Jan..
Feb..
Mar..
Apr..
May..
June.
* Preliminary; December by Council of Economic Advisers.
Source: Board of Governors of the Federal Reserve System (except as noted).
267
183
TABLE C-60.—Mortgage debt outstanding, by type of property and of financing, 1939-70
[Billions of dollars]
Nonfarm properties
Nonfarm properties by type of mortgage
FHA-VA underwritten
End of year
or quarter
All
properties
Farm
properties
Total
1- to 4family
houses
Multifamily
Commercial
properties i
Conventional'
1- to 4-family houses
Total
Total
Total
FHA
insured
VA
guaranteed
l-to4family
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
27.1
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
30.6
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
226.2
248.6
274.3
300.1
12.8
13.9
15.2
16.8
18.9
194.0
212.3
233. 4
257.4
281.2
141.3
153.0
166.5
182.2
197.6
20.3
22.9
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
164.0
184.0
204.0
84.8
93.9
104.3
116.3
128.3
1965
1966
1967
1968 v
325.8
347.4
370.2
397.5
425.3
21.2 304.6
23.3 I 324.1
25.5 344.8
27.5 370.0
29.5 395.9
212.9
223.6
236.1
251.2
266.8
37.2
40.3
43.9
47.3
52.2
54.5
60.1
64.8
71.4
76.9
81.2
84.1
88.2
93.4
100.2
73.1
76.1
79.9
84.4
90.2
42.0
44.8
47.4
50.6
54.5
31.1
31.3
32.5
33.8
35.7
223.4
240.0
256.6
276.6
295.7
139. o
450.0
31.2
418.8
279.9
57.6
81.4
350.5
356.2
363.3
370.2
23.7
24.3
24.9
25.5
326.8
331.9
338.3
344.8
224.9
227.8
232.0
236.1
41.0
41.9
42.8
43.9
60.9
62.2
63.5
64.8
84.5
85.3
86.4
88.2
76.4
77.2
78.3
79.9
45.2
45.7
46.6
47.4
31.2
31.5
31.7
32.5
242.3
246.6
251.9
256.6
148.4
150.6
153.7
156.1
375.8
382.9
389.8
397.5
26.0
26.7
27.2
27.5
349.8
356.1
362.6
370.0
239.1
243.2
247.0
251. 2
44.6
45.3
46.2
47.3
66.1
67.6
69.3
71.4
89.4
90.7
92.0
93.4
81.0
82.1
83.2
84.4
48.1
48.7
49.6
50.6
32.9
33.4
33.6
33.8
260.4
265.4
270.6
276.6
158.1
161.1
163.8
166.8
1969 : I p... 403.7
II ".. 411.7
HI ' 418.7
425.3
IV p .
28.1
28.8
29.2
29.5
375.7
382.9
389.5
395.9
254.8
259.5
263.5
266.8
48.3
49.4
50.6
52.2
72.6
74.0
75.4
76.9
94.5
96.6
98.5
100.2
85.3
87.1
88.9
90.2
51.4
52.2
53.4
54.5
33.9
34.9
35.5
35.7
281.2
286.3
291.0
295.7
169.5
172.6
174.6
176.4
429.4
435.6
442.7
450.0
29.8
30.3
30.8
31.2
399.6
405.2
411.9
418.8
268.5
271.7
275.8
279.8
53.2
54.5
56.0
57.7
77.8
79.0
80.1
81.4
102.9
103.2
91.6
92.1
55.6
56.1
36.0
36.0
36.9
297.7
302.0
176.9
179.6
_
1969 p
1970 v
1967: !...._
II
111
IV
1968: I p...
II".III v_
IV p..
1970: I p...
II v
III v
IV p
147.?
156.?
166. \
176.?
i Includes negligible amount of farm loans held by savings and loan associations.
' Derived figures.
Source: Board of Governors of the Federal Reserve System, estimated and compiled from data supplied by various
Government and private organizations.
268
TABLE G-61.—Mortgage debt outstanding^ by lender, 1939-70
[Billions of dollars]
Selected financial institutions
End of year or quarter
Total
Total
Savings
and
loan
associations
Mutual
savings
banks
Other lenders
Commercial
banks i
Life
insurance
U.S.
comagencies2
panies
Individuals
and
others
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
4.9
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
4.0
4.4
4.6
18.4
19.4
20.5
21.8
23.4
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
6.0
7.4
7.8
10.0
25.4
27.3
29.3
32.5
35.4
206.8
226.2
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
41.8
44.0
45.9
47.7
325.8
347.4
370.2
397.5
425.3
450.0
264.6
280.8
298.8
319.9
339.1
355.2
110.3
114.4
121.8
130.8
140.2
149.9
44.6
47.3
50.5
53.5
56.1
58.0
49.7
54.4
59.0
65.7
70.7
72.9
60.0
64.6
67.5
70.0
72.0
74.3
12.4
15.8
18.4
21.7
26.8
32.1
48.7
50.9
53.0
55.8
59.4
62.7
350.5
356.2
363.3
370.2
282.9
287.6
293.3
298.8
114.8
116.9
119.5
121.8
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
51.3
51.9
52.5
53.0
375.8
382.9
389.8
397.5
302.6
308.1
313.5
319.9
123.3
125.9
128.3
130.8
51.2
51.8
52.5
53.5
60.1
62.0
63.8
65.7
68.0
68.4
68.9
70.0
19.6
20.6
21. 1
21.7
53.5
54.2
55.1
55.8
403.7
411 7
418.7
425.3
324.7
331.0
335.7
339.1
133.0
136.2
138.6
140.2
54.2
54.8
55.4
56.1
67.1
69.1
70.4
70.7
70.4
70.9
71.3
72.0
22.6
23.4
24.9
26.8
56.4
57 2
58.1
59.4
429.4
435.6
442.7
450.0
340.6
344.4
349.5
355.2
140.8
143.1
146.4
149.9
56.4
56.9
57.4
58.0
70.9
71.3
72.1
72.9
72.6
73.2
73.5
74.3
28.6
30.0
31.3
32.1
60.2
61.2
61.9
62.7
1939
.
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
-..
-
---.
1965
1966
1967
1968 P
1969 P
1970 p
1967:
1
II
III
...
IV
1968:
-.
1 p
II p
III p
IVP
1969: i» _.
II
P
III '
IVP
1970:
1 p
II p
III v
IV v
1
2
Includes loans held by nondeposit trust companies, but not bank trust departments.
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 various Government and private organizations.
269
411-364 O—71
-18
TABLE C-62.—Net public and private debt, 1929-69*
[Billions of dollars]
Public
Private
Individual anc noncorporate
End of year
Total
Federals
Federal
financial
agencies 3
Nonfarm
State
and
local
Corporate
Total
Total
Farm *
Total
Mortgage
Commercial
and
financial s
Consumer
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
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
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
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
189.8
211.4
258.6
313.2
370.6
44.8
56.3
101.7
154.4
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
26.1
27.1
26.8
26.1
26.0
9.5
10.0
8.3
9.2
8.1
9.5
6.0
4.9
7.7
43.9
46.3
40.9
40.5
42.9
11.8
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
1953
1954
486.2
519.2
550.2
581.6
605 9
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
246.4
276.8
300.4
322.7
340.0
142.1
162.5
171.0
179.5
182.8
104.3
114.3
129.4
143.2
157.2
12.3
13.7
15.2
16.8
17.5
92.0
100.6
114.2
126.4
139.7
54.8
61.7
68.9
76.7
86.4
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
665 8
698.4
728.3
769.6
833.0
229.6
224.3
223.0
231.0
241.4
2.9
2.4
41.1
44.5
48.6
53.7
59.6
392.2
Ml.2
454.3
482.4
528.3
212.1
231.7
246.7
259.5
283.3
180.1
195.5
207.6
222.9
245.0
18.7
19.4
20.2
23.2
23.8
161.4
176.1
187.4
199.7
221.2
98.7
109.4
118.1
128.1
141.0
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
874 2
930.3
996 0
1,070 9
1,151.6
239.8
246.7
253.6
257.5
264.0
64.9
70.5
77.0
83 9
90.4
566.1
609.1
660.1
722.3
789.7
302.8
324.3
348.2
376.4
409.6
263.3
284.8
311.9
345. 8
380.1
25.1
27.5
30.2
33.2
36.0
238.2
257.3
281.7
312.6
344.1
151.3
164.5
180.3
198.6
218.9
30.8
34.8
37.6
42.3
45.0
56.1
58.0
63.8
71.7
80.3
1965
1966
1967
1968
1969
1, 244.1
1,341.4
1,435.5
1, 567. 8
1, 699. 5
266.4
271.8
286.5
291.9
289.3
870.4
98.3
953.5
104.8
112.8 1,027.2
123.2 1,131.4
132.4 1,247.3
454.3
506.6
546.6
610.9
692.2
416.1
446.9
480.6
520.5
555.1
39.3
42.4
48.3
52.3
56.7
376.8
404.5
432.3
468.2
498.4
236.8
251.6
256.9
285.3
304.5
49.7
55.4
63.3
69.7
71.4
90.3
97.5
102.1
113.2
122.5
1929
1940
1941.
1942
1943
1944
..
-.
. .
2.4
2.5
3.7
3.5
4.0
5.3
7.2
7.5
8.9
11.2
9.0
21.4
30.5
9.1
8.9
8.6
9.0
8.8
9.0
8.2
4.0
3.9
4.2
6.9
6.4
7.2
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.
i 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, 1972."
3 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 beginning with 1947, the debt of the Federal Home Loan Banks
is included beginning with 1951, and the debts of the Federal National Mortgage Association, Federal Intermediate Credit
Banks, and Banks for Cooperatives are included beginning with 1968.
* Farm mortgages and farm production loans. Farmers' financial and consumer debt is included in the nonfarm categories.
* Financial debt is debt owed to banks for purchasing or carrying securities, customers' debt to brokers, and debt owed
to life insurance companies by policyholders.
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.
270
GOVERNMENT FINANCE
TABLE G-63.—Federal budget receipts and outlays, 1929-72
[Millions of dollars]
Receipts
Fiscal year
Administrative budget:
1929 .
1930
1931
1932
1933
1934
.
1935
1936
1937
1938
1939
Consolidated cash statement:
1940
1941
1942
1943
1944
1945
1946
1947
1948
1949
.
.
1950
1951
1952
1953
Unified budget:
1954
1955
1956
1957
1958
1959
.
. .
1960
1961— . .
1962.
1963
1964 . . .
1965 . .
1966
1967
1968
1969
1970 . .
19711
19721
. .
. .
....
Outlays
Surplus or
deficit ( - )
3,862
3,127
734
4,058
3,116
1,924
1,997
3,015
3,320
3,577
4,659
4,598
6,645
387
-462
-2,735
-2,602
-3,630
3,706
3,997
4,956
5,588
4,979
6,497
8,422
7i 733
6,765
8,841
-2,791
-4,425
-2,777
-1,177
-3,862
6,879
9,202
15,104
25,097
47,818
9,589
13,980
34,500
78,909
93,956
-2,710
-4,778
-19,396
-53,812
-46,138
50,162
43,537
43,531
45,357
41,576
95,184
61,738
36,931
36,493
40,570
-45,022
-18,201
6,600
8,864
1,006
40,940
53,390
68,011
71,495
43,147
45,797
67,962
76,769
-2,207
7,593
49
-5,274
69,719
70,890
-1,170
65,469
74,547
79,990
79,636
79,249
68, 509
70,460
76,741
82, 575
92,104
-3,041
4,087
3,249
-2,939
-12,855
92,492
94,389
99,676
106,560
112,662
92,223
97,795
106,813
111,311
118,584
269
-3,406
-7,137
-4,751
-5,922
116,833
130,856
149, 552
153,671
187,784
118,430
134,652
158,254
178,833
184,548
-1,596
-3,796
-8,702
-25,161
3,236
193,743
194,193
217,593
196,585
212,755
229,232
-2,845
—18,562
-11,639
1 Estimate.
Note.—Certain interfund transactions are excluded from receipts and outlays starting in 1932. For years prior to 1932 the
arrountsof such transactions are not significant.
Refunds of receipts are excluded from receipts and outlays starting in 1913.]
Sources: Treasury Department and Office of Management and Budget.
271
T A B L E C-64.—Federal budget receipts, outlays, financing, and debt, 1961—72
[Millions of dollars; fiscal years]
Actual
Description
1961
RECEIPTS, EXPENDITURES, AND NET LENDING:
Expenditure account:
Rece i pts
Expenditures (excludes net lending)...
Expenditure account
deficit ( - ) .
surplus
1962
1963
1964
94,389
96,597
99,676
104,462
106,560
111,456
1965
1966
112,662
118,039
116,833
117,181
130,856
130,820
-347
or
-2,208
-4,786
-4,896
-5,377
Loan account:
Loan disbursements.
Loan repayments
7,869
6,671
9,621
7,271
9,646
9,791
10,237
9,693
10,911
9,662
14,628
10,796
Net lending.
36
1,198
2,351
-145
545
1,249
3,832
Total budget:
Receipts
Outlays(expenditures and net lending).
94,389
97,795
99,676
106,813
106,560
111,311
112,662
118,584
116,833
118,430
130,856
134,652
Budget surplus or deficit ( - )
-3,406
-7,137
-4,751
-5,922
-1,596
-3,796
1,427
1,979
9,769
-2,632
6,088
-1,337
3,092
2,830
4,061
-2,465
3,076
720
3,406
7,137
4,751
5,922
1.596
3,796
292,895
238,604
303,291
248,373
310,807
254,461
316,763
257,553
323,154
261,614
329,474
264,690
94,389
41,338
20,954
12,679
2,902
99,676
45, 571
20, 523
12,835
3,337
106,560
47, 588
21,579
14, 746
4,112
112,662
48,697
23,493
16,959
4,045
116,833
48,792
25,461 j
17,359
3,819
130,856
55,446
30,073
20,662
3,777
857
11,860
1,896
982
919
875
12,534
2,016
1,142
843
946
13,194
2,167
1,205
1,023
1,008
13,731
2,394
1,252
1,084
1,081
14,570
2,716
1,442
1,594
1,129
13,062
3,066
1,767
1,875
75,179
21,800
79,703
22,652
83, 550
25,799
87,205
28,518
90,943
29,230
101,427
32,997
BUDGET FINANCING:
Net borrowing from the public or repayment of borrowing (—)
Other means of financing
Total means of financing.
OUTSTANDING DEBT, END OF YEAR:
Gross Federal debt
Held by the public
BUDGET RECEIPTS
Individual income taxes
Corporation income taxes
Employment taxes and contributions
Unemployment insurance
Contributions for other insurance and
retirement
Excise taxes
Estate and gift taxes
Customs duties
Miscellaneous receipts l
MEMORANDUM:
Federal funds..
Trust f u n d s . . .
BUDGET OUTLAYS (EXPENDITURES AND
NET LENDING)
National defense
International affairs and finance
Space research and technology
Agriculture and rural development
Natural resources
Commerce and transportation
Community development and housing
Education and manpower
Health
Income security
Veterans benefits and services
I nterest
General government
Allowa nces....
Undistributed intragovernmental transactions
97,795
47,381
3,357
744
3,340
1,554
5,032
191
1,227
873
21,227
5,688
8,108
1,491
106,813
51,097
4,492
1,257
4,123
1,665
5,430
589
1,406
1,139
22, 530
5,625
8,321
1,650
111,311
52,257
4 115
2,552
5,139
1,483
5,765
-880
1,502
1,393
24, 084
5.520
9,215
1,810
118,584
53,591
4,117
4,170
5,185
1,944
6,511
-185
1,751
1,737
25,110
5,681
9,810
2,040
118,430
49,578
4,340
5,091
4,807
2,028
7,399
288
2,284
1,730
25,702
5,722
10,357
2,210
134,652
56,785
4,490
5,933
3,679
1,999
7,171
2,644
4,258
2,543
29,016
5,920
11,285
2,292
-2,443
-2,513
-2,644
-2,877
-3,109
-3,364
MEMORANDUM:
Federal funds
Trust funds
Intragovernmental transactions.
79,336
21,048
-2,589
86,594
22,898
-2,680
90,141
23,958
-2,788
95,761
25,884
-3,061
94,807
26,962
-3,339
106,512
31,708
— 3 , 568
See footnotes at end of table.
272
TABLE C-64.—Federal budget receipts, outlays,financing,and debt, 1961-72—Continued
[Millions of dollars; fiscal yearsl
Actual
Estimate
Description
RECEIPTS, EXPENDITURES, AND NET LENDING:
Expenditure account:
Receipts
Expenditures (excludes net lending)
Expenditure account
deficit(-)
surplus
1967
1968
149,552
153,201
153,671
172,802
1970
1971
187,784
183, 072
193,743
194,456
194,193
211,143
217,593
228,286
1969
1972
or
-3,649
-19,131
4,712
-714
-16,951
-10,693
Loan account:
Loan disbursements.
Loan repayments
17,676
12,623
20,327
14,297
13,117
11,640
8,313
6,182
8,807
7,196
9,440
8,494
Net lending.
5,053
6,030
1,476
2,131
1,611
946
149,552
158,254
153,671
178,833
187,784
184,548
193,743
196,588
194,193
212,755
217, 593
229, 232
- 8 , 702
-25,161
3,236
- 2 , 845
-18,562
-11,639
2,838
5,863
23,100
2,061
-1,044
-2,192
3,814
-969
17,600
962
10, 600
1,039
8,702
25,161
2-3,236
2 2, 845
18, 562
11,639
341,348
267,529
369,769
290, 629
367,144
279,483
382, 603
284,880
407,033
302,480
429,400
313, 080
149,552
153,671
187,784
193,743
194,193
217, 593
61,526
33,971
27,823
3,659
68,726
28,665
29,224
3,346
87, 249
36,678
34,236
3,328
90,412
32, 829
39,133
3,464
88, 300
30,100
42,297
3,604
93,700
36,700
50, 225
4,183
1,867
13,719
2,978
1,901
2,108
2,052
14,079
3,051
2,038
2,491
2,353
15,222
3,491
2,319
2,908
2,701
15,705
3,644
2,430
3,424
3,072
16,800
3,730
2,490
3,800
3,151
17,500
5,300
2,700
4,134
MEMORANDUM:
Federal funds.
Trust funds
111,835
42,935
114,726
44,716
143,321
52,009
143,158
59, 362
139,137
66,165
153.720
75,490
BUDGET OUTLAYS (EXPENDITURES AND NET
LENDING)
158,254
178,833
184,548
196,588
212,755
229,232
70,081
4,547
5,423
4,376
1,821
7,594
2,616
5,853
6,721
31,164
6,897
12,588
2,510
80, 517
4,619
4,721
5,943
1,655
8,094
4,076
6,739
9,672
34,108
6,882
13,744
2,561
81,232
3,785
4,247
6,221
2,081
7,921
1,961
6,525
11,696
37,699
7,640
15,791
2,866
80, 295
3,570
3,749
6,201
2,480
9,310
2,965
7,289
12,995
43, 790
8,677
18,312
3,336
76,443
3,586
3,368
5,262
2,636
11,442
3,858
8,300
14,928
55, 546
9,969
19.433
4, 381
77,512
4,032
3,151
5.804
4,243
10,937
4,495
8, 808
16, 010
60,739
10,644
19, 687
4,970
5,969
-3,936
-4,499
-5,117
-6,3
-7,197
-7,771
126,779
36,693
-5,218
143,105
41,499
-5,771
148,811
43, 284
-7,547
156, 301 164,665
59, 200
49,065
-8,778 -11,109
63, 992
-11,617
Total budget:
Receipts
Outlays (expenditures and net lending)..
Budget surplus or deficit (—)
BUDGET FINANCING:
Net borrowing from the public or repayment of borrowing (—)
Other means of financing
Total means of financingOUTSTANDING DEBT, END OF YEAR:
Gross Federal debt
Held by the public
BUDGET RECEIPTS.
Individual income taxes
Corporation income taxes
Employment taxes and contributions
Unemployment insurance
Contributions for other insurance and retirement
Excise taxes
Estate and gift taxes
Customs duties
Miscellaneous receipts i
National defense
International affairs and finance
_.
Space research and technology
Agriculture and rural development
Natural resources
Commerce and transportation
Community development and housing
Education and manpower
Health
Income security
Veterans benefits and services
I nterest
General government
Allowances
Undistributed Intragovernmental transactions
MEMORANDUM:
Federal funds
Trust funds
Intragovernmental transactions.
1
175,857
Includes both Federal funds and trust funds.
Excludes changes due to ^classification and to conversion of mixed-ownership enterprises to private ownership. (See
footnotes to Table 9, "Budget of the United States Government for the Fiscal Year Ending June 30, 1971," and footnotes
to Table 10, "Budget of the United States Government for the Fiscal Year Ending June 30, 1972.")
2
Sources: Treasury Department and Office of Management and Budget.
273
TABLE C-65.—Relation of the Federal budget to the Federal sector of the national income and
product accounts, 1969-72
[Billions of dollars; fiscal years]
Actual
Estimate
Receipts and expenditures
1969
1970
1972
1971
RECEIPTS
Total receipts, budget-
187.8
193.7
194.2
217.6
Government contribution for employee retirement (grossing)
Other netting and grossing
Adjustment to accruals
Other
2.1
1.3
.2
-.1
2.7
1.5
.9
-.1
2.8
1.5
1.5
-.1
2.7
1.6
4.4
-.4
Federal sector, national income and product accounts,
receipts
191.3
198.7
200.0
225.9
184.5
196.6
212.8
229.2
-1.5
-1.0
-2.1
-1.8
-1.6
-2.4
-.9
-2.2
2.1
1.3
.4
.7
2.7
1.5
1.5
-.5
2.8
1.5
1.6
.3
2.7
1.6
.5
-.7
186.7
197.9
215.0
230.1
EXPENDITURES
Tota I outlays, budget
Loan account
Financial transactions in the expenditure account..
Government contribution for employee retirement
(grossing)
Other netting and grossing
Defense timing adjustment
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, 1972," for
description of these categories.
Sources: Treasury Department, Office of Management and Budget, and Department of Commerce (Office of Business
Economics).
274
TABLE C-66.—Receipts and expenditures of the Federal Government sector of the national income
and product accounts, 1948-72
[Billions of dollars]
Receipts
Year or quarter
1Surplus
Expenditures
Indirect
Por
rer- Cor- busi- ConPursonal
poness tribuchases
tav
13 X
rate
tax tions
of
Total and profits and
for Total i goods
non* tax non- social
and
tax
actax insurservance
ices
ceipts cruals accruals
Transfer
payments
To
persons
Grantsin-aid
to State
To
and
forlocal
eign- governers
ments
(net)
Net
interest
paid
Subsirlioc
uies
less
current
surplus
of
government
enterprises
or
deficit
<-),
national
income
and
product
ac:ounts
Fiscal year:
1948
1949
1950
1951
1952
1953
1954
1955
1956
1957._
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
19712
19722
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
132.8
147.2
160.4
191.3
198.7
200.0
225.9
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
71.0
89.5
93.7
90.6
99.0
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
31.0
31.2
34.0
38.9
36.8
35.8
43.5
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
15.8
17.1
18.6
19.4
20.3
21.8
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
35.7
38.3
44.2
48.9
53.2
61.6
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
22
2.2
2.3
2.2
2.1
2.2
2.0
2.2
2.5
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
17.6
19.1
22.1
27.0
34.4
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
10.9
12.3
14.0
14.6
14.3
.5
12.7
.8
-.5
1.0
16.2
1.3
1.1 - 1 . 0
.9 - 6 . 5
1.0 - 8 . 5
1.3
-.1
6.0
1.7
4.7
2.8
2.5 - 5 . 1
2.4 - 5 . 5
3.5
2.3
3.2 - 2 . 7
2
.1
3.8
3.6 - 1 . 2
1
.4
38
4.1
2.0
.9
4.5
5.1 - 7 . 2
4.1 -11.9
4.6
4.1
.8
4.6
6.2 -15.0
4.2 - 4 . 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
142.5
151.2
175.4
200.6
195.4
19.0
16.1
18.1
26.1
31.0
32.2
29.0
31.4
35.2
37.4
36.8
39.9
43.6
44.7
48.6
51.5
48.6
53.8
61.7
67.5
79.3
95.9
91.8
11.8
9.8
17.0
21.5
18.5
19.5
17.0
20.6
20.6
20.2
18.0
22.5
21.7
21.8
22.7
24.6
26.4
29.3
32.1
30.7
37.5
39.2
34.8
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
15.7
16.3
18.0
19.1
19.6
3.8
4.5
34.9
16.5
7.6
4.9
41.3
20.1
8.7
5.1
5.9
40.8
18.4 10.8
3.6
7.1
57.8
37.7
8.5
3.1
7.4
71.0
51.8
8.8
2.1
7.4
77.0
57.0
9.5
2.0
8.1
69.7
47.4 11.5
1.8
9.3
68.1
44.1 12.4
2.0
10.6
71.9
45.6 13.4
1.9
12.2
79.6
49.5 15.7
1.8
12.4
88.9
53.6 19.5
1.8
14.8
91.0
53.7 20.1
1.8
17.7
93.0
53.5 21.5
1.9
18.2 102.1
57.4 24.9
2.1
20.5 110.3
63.4 25.5
2.2
23.1 113.9
64.2 27.0
2.2
23.8 118.1
65.2 27.8
2.2
25.1 123.5
66.9 30.3
2.2
33.0 142.8
77.8 33.4
2.3
36.7 163.6
90.7 40.0
2.2
40.7 181.6
99.5 45.7
2.1
46.5 191.3 101.3 50.0
2.1
49.3 206.2
99.7 60.0
2.0
Seasonally adjusted annual rates
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
15.8
18.4
20.2
24.4
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
10.2
11.8
13.1
14.5
.7
.8
1.2
1.3
1.0
.8
1.1
1.5
2.4
2.6
2.7
2.1
2.5
3.8
4.0
3.6
4.2
4.3
5.4
4.6
4.1
4.6
5.5
8.4
-2.4
9.1
6.2
-3.8
-7.0
-5.9
4.0
5.7
2.1
-10.2
-1.2
3.5
-3.8
-3.8
197.2
202.5
200.8
202.0
195.9
196.7
194.9
93.7 39.9
97.3 40.2
95.6 38.6
96.9 38.1
93.4 34.8
93.5 34.9
89.4 35.7
90.8 -\1 ±.
18.5
19.0
19.5
19.3
19.3
19.4
20.1
19.6
45.1
46.0
47.0
47.7
48.4
48.9
49.7
49.9
19.3
19.6
20.0
21.8
23.0
25.1
24.4
25.2
12.6
12.9
13.2
13.9
14.3
14.3
14.8
14.7
4.3
4.6
4.6
4.9
5.3
5.3
5.6
5.9
9.5
13.4
8.3
6.1
-1.7
-14.2
-11.8
Calendar year:
1948
1949
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970*
1969: I
II
III . .
IV....
1970: I
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
154.5
172.3
186.7
197.9
215.0
230.1
187.7
189.1
192.5
195.9
197.7
210.9
206.7
209.5
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
85.3
95.2
100.6
100.8
97.9
102.2
100.9
99.8
102.5
102.1
102.3
99.7
98.6
98.4
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
37.2
42.4
48.3
54.5
67.0
72.5
48.9
49.8
50.3
51.2
53.4
62.4
61.0
63.3
1.8
2.5
1.9
2.1
1.9
2.0
1.9
2.0
-10
1.2
2
-12*4
-6.2
9.3
-10.8
* Wage accruals less disbursements have been subtracted from total. These were (in billions of dollars, at seasonally
adjusted annual rates) 2.5, - 2 . 1 , - 0 . 4 , and .0 in the 4 quarters of 1970, respectively.
' Estimates.
Sources: Department of Commerce (Office of Business Economics) and Office of Management and Budget.
275
TABLE C-67.—Public debt securities by kind of obligation, 1946-70
[Billions of dollars]
Interest-bearing public debt
Total
public
debt
securities
End of year or month
Marketable public issues
by maturity class
Special
issues'
U.S.
savings
bonds 2
60 1
60 0
57.7
53.9
24
29
31
33
49
52
55
56
50 5
56 7
62.2
50 4
64 7
68.6
58.9
56.9
71 0
83 7
52.5
38.8
28.7
30 3
30.2
32.9
32.9
32.0
32 0
24.6
33 7
35 9
39.1
41 2
42.6
43.9
45.6
45.8
44 8
43.5
58 0
57 6
57.9
57 7
57 7
57.9
56.3
52.5
51 2
48 2
89.5
84.7
95.6
94.2
100.4
95 6
87.5
97.0
103 4
93.3
24.2
25.4
20.1
24.0
23.6
25.6
25.4
25.1
24 8
24.4
44.3
43.5
43.4
43.7
46.1
46.3
52.0
57.2
59.1
71.0
47.2
47.5
47.5
48.8
49.7
50 3
50.8
51.7
52.3
52.2
104.9
19.4
78.1
103.4
111 5
109 2
109.1
97.6
97.6
24.8
24 7
24 7
24.7
24.6
24.6
59.8
60.9
61.1
62.3
64.9
66.8
97.6
94.1
94 1
101.0
93.3
93.3
24.6
24.5
24.5
24.5
24.4
24.4
66.8
68.4
68.9
68.1
69.3
71.0
118.6
117.8
121.3
117.1
109.4
105.5
93.3
96.4
95.2
95.2
105.5
105.5
24.4
21.7
21.7
21.7
21.6
21.6
110.8
109.8
108.7
111.6
120.1
123.4
105.5
109.2
109.2
109.1
104.9
104.9
21.5
21.5
21.5
21.4
19.5
19.4
Within
1 year
1 to 10
years
259.1
256.9
252.8
257.1
54 8
49.6
44.6
49.4
61 7
56 1
55.1
51.8
1950
1951
1952
1953
1954 . .
1955
1956
1957
1958
1959 .
256.7
259.4
267.4
275.2
278.7
280.8
276.6
274.9
282.9
290.8
49.4
47.1
57.7
73 9
62.8
61.7
68.6
75.3
72 6
79.9
1960
1961
1962 .
1963
1964
1965
1966
1967
1968
1969
290.2
296.2
303.5
309.3
317.9
320 9
329.3
344.7
358 0
368.2
75.3
85.9
87.3
89.4
88.5
93 4
105.2
104.4
108 6
118.1
1970
389.2
123.4
1969: Jan
Feb
Mar
Apr .
May
June
359.4
358 8
359 5
358.5
360.1
353.7
110.4
100 3
103 3
101.2
111.9
103.9
July
Aug
Sept
Oct
Nov
Dec
357.0
360.2
360 7
364.4
368.1
368.2
107.4
112.6
112 6
109.6
120.1
118.1
1970: Jan
Feb
Mar
Apr
May
June _ - - .
367.6
368.8
372.0
367.2
371.1
370.9
376.6
380.9
378.7
380.2
383.6
389.2
1946
1947
1948 . .
1949
July
Aug
Sept
Oct
Nov
Dec
....
- ---
10
years
and
over
Nonmarketable public issues
6
0
7
9
Foreign
and
international
8
1
1
7
Other
6
7
6
9
7
4
3
3
Matured
public
debt
and
debt
bearing no
interest
1
2
2
2
5
7
2
1
10 1
20 9
19 6
19 3
17 7
12 7
11.9
10.4
9 2
7 8
2 4
2 3
2 1
2 3
3 0
30
2.4
2.0
2 1
3 1
0.5
.7
1.3
1.8
2 4
1.5
3.2
4 4
4.7
6.3
5.3
4.6
3.8
3.5
2 9
2.7
2.6
2 6
2.5
3.4
3.5
4.3
4.1
4.4
4 4
4.3
3.5
2 9
2.0
52.5
6.5
2.4
1.9
52.3
52.3
52 3
52.2
52.2
52.2
4.4
4 5
4.5
4.5
4.4
4.1
2.6
2 6
2 6
2.5
2.5
2.5
1.8
2 0
1 9
1.9
1.9
2.0
52.2
52.1
52.1
52.1
52.1
52.2
4.1
4.0
4.1
4.7
4.4
4.7
2.5
2.5
2.5
2.5
2.5
2.5
1.9
1.9
1 9
2.0
1.8
2.0
70.1
71.4
72.1
71.8
73.3
76.3
52.1
52.1
52.0
52.0
52.0
52.0
4.6
4.9
5.2
4.9
4.8
5.6
2.5
2.5
2.5
2.5
2.5
2.5
2.0
2.0
2.0
2.1
1.9
1.9
76.1
77.5
76.7
75.4
75.6
78.1
52.0
52.1
52.1
52.2
52.4
52.5
6.2
6.3
6.2
6.0
6.7
6.5
2.5
2.5
2.5
2.5
2.5
2.4
1.9
2.0
1.9
1.0
2.0
1.9
1 Issued to U.S. Government accounts. These accounts also held 519.2 billion of public marketable and nonmarketable issues on December 31, 1970.
2 Includes sales of U.S. savings notes from May 1967 through June 30, 1970.
Source: Treasury Department.
276
TABLE C-68.—Estimated ownership of public debt securities, 1939-70
[Par values,* billions of dollars]
Total public debt securities *
Held by private investors
End of year or
month
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
.
1969
1970
1969: Jan
Feb
Mar
Apr
May
June
July
Aug
Sept
Oct
Nov
Dec
1970: Jan
Feb .
Mar
Apr
May
June
July
Aug
Sept
Oct
Nov
Dec
Held
Total
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
__. 278.7
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
368.2
389.2
359.4
358.8
359.5
358.5
360.1
353.7
357.0
. . . 360.2
360.7
364.4
368.1
368.2
367.6
368.8
372.0
! 367.2
371.1
370.9
376.6
380.9
378.7
380.2
383.6
389.2
Held
by
, by
Govern- Federal
ment Reserve
accounts Banks
6.1
6.7
8.5
10.5
14.5
19.0
23.9
27 4
30.8
33.7
35.9
36.0
39.3
42 9
45.4
46.7
49.0
51.2
52.8
52.1
51 4
52 8
52.5
53.2
55.3
58.4
59 7
65.8
73.1
76.6
89.0
97.1
77.3
78.7
79.0
79.8
82.7
84.8
85.0
86.6
86.9
86.1
87.0
89.0
88.6
89.4
90.4
90.2
92.3
95.2
94.8
96.4
95.5
94.4
94.5
97.1
2.5
2.2
2.3
6 2
11.5
18.8
24.3
23 3
22.6
23.3
18.9
20.8
23.8
24.7
25.9
24.9
24.8
24.9
24.2
26.3
26.6
27 4
28.9
30.8
33.6
37.0
40.8
44.3
49.1
52.9
57.2
62.1
52.1
52.3
52.4
53.1
53.8
54.1
54.1
54.9
54.1
55.5
57.3
57.2
55.5
55.8
55.8
56.5
57.3
57.7
58.6
59.9
60.0
60.0
61.2
62.1
Total
Mutual
savings
State
Miscelbanks
Comand
Other
Indi- 8 laneous
mercial and in- corpo-4 local viduals
invesbanks' surance rations governtors 1
comments «
panies
33.4
36.2
47.1
91.5
139.8
192.8
230.0
208.3
203.6
195.8
202.4
199.9
196.3
199.8
203.8
207.1
207.0
200.5
197.9
204.5
212.7
210.0
214.8
219.5
220.5
222.5
220.5
219.2
222.4
228.5
222.0
229.9
230.0
227.8
228.1
225.6
223.6
214.8
217.9
218.6
219.6
222.7
223.8
222.0
223.5
223.6
225.9
220.5
221.4
218.0
223.2
224.6
223.2
225.8
227.9
229.9
12.7
13.7
17.1
38.2
57.3
76.7
90.8
74.5
68.7
62.4
66.8
61.8
61.5
63.4
63.7
69.1
62.0
59.5
59.5
67.5
60.3
62.1
67.2
67.1
64.2
63.9
60.7
57.4
63.8
66.0
56.8
62.5
64.4
61.2
61.0
53.9
56.7
55.3
56.3
55.0
54.7
56.0
56.7
56.8
54.6
53.0
55.5
54.5
53.9
53.3
55.1
53.0
56.9
58.9
59.9
62.5
8.4
9.2
11.0
15.4
20.8
28.0
34.7
36.7
35.9
32.7
31.5
29.6
26.2
25.5
25.1
24.1
23.1
21.2
20.1
19.8
19.4
18.0
17.4
17.5
16.8
16.5
15.6
14.1
12.7
11.6
10.0
9.6
11.5
11.4
11.3
11.1
11.6
11.0
10.6
10.4
10.2
10.1
10.2
10.0
10.1
10.0
9.9
9.9
9.8
9.7
9.9
10.1
10.0
9.8
9.7
9.6
2.0
2.0
4.0
10.1
16.4
21.4
22.2
15.3
14.1
14.8
16.8
19.7
20.7
19.9
21.5
19.1
23.2
18.7
17.7
13.1
21.4
18 7
18.5
18.6
18.7
18.2
15.8
14.9
12.2
14.2
13.3
11.0
15.4
16.2
15.6
15.0
15.4
12.6
13.3
14.3
12.7
13.9
14.3
13.3
13.9
13.2
12.7
11.9
12.5
11.1
12.0
11.7
10.3
11.1
10.8
11.0
0.4
.5
.7
1.0
2.1
4.3
6.5
6.3
7.3
7.9
8.1
8.8
9.6
11.1
12.7
14.4
15.4
16.3
16.6
16.5
18.0
18 7
19 0
20.1
21 1
21.1
22 9
24 3
24.1
24 4
25.4
23.0
25 2
25.9
25.6
26.2
26.0
25.2
25.3
25.7
25.8
25.4
25.9
25.4
26.1
26 2
25.5
24.7
25.2
24.6
24.2
24.2
24.0
24.1
23.2
23.0
9.4
10.0
13.0
23.3
37.2
53.1
64.0
64.1
65.7
65.5
66.3
66.3
64.6
65.2
64.8
63.5
65.0
65.9
64.9
63.7
69.4
66.1
65.9
66.0
68.2
69.8
72.1
74.6
74.0
75.8
80.9
82.2
76.9
77.1
77.9
78.1
78.3
77.9
78.4
78.7
79.3
80.0
80.2
80.9
82.1
82.8
83.2
82.7
83.0
82.5
82.9
82.3
82.7
82.3
82.4
82.2
0.5
.8
1.3
3.5
6.0
9.3
11.8
11.4
11.9
12.5
12.9
13.6
13.7
14.7
16.1
16.9
18.3
18.9
19.1
18.9
24.3
26.5
26.9
30.1
31.5
33.0
33.4
33.9
35.7
36.7
35.5
41.6
36.6
35.9
36.6
36.3
35.6
32.9
33.9
34.7
36.8
37.2
36.4
35.5
36.6
38.4
39.1
36.8
37.1
36.8
39.3
38.3
39.5
39.6
42.1
41.6
1 U.S. savings bonds, series A-F and J, and U.S. savings notes are included at current redemption value.
1 Not all of total shown is subject to statutory debt limitation.
* 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 Table C-53, which are based on book values and relate only to banks within the United States.
*5 Exclusive of banks and insurance companies.
Includes trust, sinking, and investment funds of State and local governments and their agencies, and of Territories
and possessions.
* Includes partnerships and personal trust accounts.
* 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.
Source: Treasury Department.
277
TABLE C-69.—Average length and maturity distribution of marketable interest-bearing
public debt, 1946-10
Maturity class
Amount
End of year or month
outstanding
Within
1 year
Ito5
years
5 to 10
years
10 to 20
years
20 years
and over
Millions of dollars
Fiscal year:
Average length
Years
Months
1946
1947
1948
1949—.
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
8,088
10
4
9
3
7
I960..
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..
1969..
208,695
209,127
210,672
226,592
226,107
87,637
89,136
89,648
106,407
103,910
56,198
60,933
71,424
64,470
62,770
39,169
33,596
24,378
30,754
34,837
8,449
8,439
8,425
8,407
8,374
17,241
17,023
16,797
16,553
16,217
11
7
2
0
1970..
232,599
105, 530
89,615
15,882
10,524
11,048
1969: Jan..
Feb..
Mar..
Apr..
May..
JuneJuly..
Aug...
Sept..
Oct...
Nov..
Dec.
238,543
236,535
237,272
234,968
234,097
226,107
110,377
100,282
103,342
101,159
111,855
103,910
68,260
75,778
73,494
73,407
62,769
62,770
35,129
35,727
35,726
35,726
34,837
34,837
8,395
8,394
8,390
8,386
8,379
8,374
16,382
16,354
16,320
16,291
16,257
16,217
11
0
11
11
11
0
229,581
231,230
231,203
235,029
237,919
235,863
107,416
112,618
112,616
109,550
120,144
118,124
62,763
69,519
69,522
74,762
73,305
73,302
34,837
24,553
24,553
26,247
20,026
20,026
8,372
8,370
8,367
8,363
8,360
8,358
16,194
16,170
16,145
16,107
16,083
16,054
11
10
10
9
8
8
1970: Jan...
Feb...
Mar..
Apr...
May..
June..
236,321
235,968
238,195
233,998
236,561
232,599
118,633
117,796
121,272
117,148
109,432
105, 530
73,294
77,104
75,889
75, 855
89,631
89,615
20,026
19,329
19,329
19,329
15,879
15,882
8,354
10,557
10,551
10, 542
10, 534
10,524
16,014
11,182
11,155
11,124
11,085
11,048
7
7
6
6
8
8
July..
Aug..
Sept..
Oct...
Nov..
Dec.
237,821
240,511
239,330
242,180
244,447
247,713
110,813
109,830
108,671
111,636
120,125
123,423
89,614
91, 075
91,066
90,992
82,302
82,318
15,876
18,122
18,140
18,138
22,555
22,553
10,514
10, 507
10, 501
10,493
8,566
8,556
11,004
10,978
10,951
10,922
10,900
10,863
6
7
6
5
6
4
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.
278
TABLE C-70.—Receipts and expenditures of the government sector of the national income and product
accounts, 1929-70
[Billions of dollars]
Federal Government
Total government
Surplus or
deficit
Calendar year or quarter
Receipts
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...
1969....
1970 P.
11.3
10.8
9.5
8.9
9.3
10.5
11.4
12.9
15.4
15.0
15.4
17.7
25.0
32.6
49.2
51.2
53.2
50.9
56.8
58.9
56.0
68.7
84.8
89.8
94.3
89.7
100.4
109.0
115.6
114.7
128.9
139.8
144.6
157.0
168.8
174.1
189.1
213.3
228.9
263.3
298.7
303.4
Expenditures
10.3
11.1
12.4
10.6
10.7
12.9
13.4
16.1
15.0
16.8
17.6
18.4
28.8
64.0
93.3
103.0
92.7
45.5
42.4
50.3
59.1
60.8
79.0
93.7
101.2
96.7
97.6
104.1
114.9
127.2
131.0
136.1
149.0
159.9
166.9
175.4
186.9
212.3
242.9
270.7
290.1
313.0
State and local
government
Surplus or
deficit
(-),
national
income
and
product accounts
1.0
-.3
-2.9
-1.8
-1.4
-2.4
-2.0
-3.1
.3
-1.8
-2.2
-.7
-3.8
-31.4
-44.1
-51.8
-39.5
5.4
14.4
8.5
-3.2
7.8
5.8
-3.8
-6.9
-7.0
2.7
4.9
.7
-12.5
-2.1
3.7
-4.3
-2.9
1.8
-1.4
2.2
1.1
-13.9
-7.3
8.7
-9.6
Receipts
3.8
3.0
2.0
1.7
2.7
3.5
4.0
5.0
7.0
6.5
6.7
8.6
15.4
22.9
39.3
41.0
42.5
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
142.5
151.2
175.4
200.6
195.4
Expenditures
nation a
income
and
product accounts
2.6
2.8
4.2
3.2
4.0
6.4
6.5
8.7
7.4
8.6
8.9
10.0
20.5
56.1
85.8
95.5
84.6
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
142.8
163.6
181.6
191.3
206.2
1.2
.3
-2.1
-1.5
-1.3
-2.9
-2.6
-3.6
-.4
-2.1
-2.2
-1.3
-5.1
-33.1
-46.6
-54.5
-42.1
3.5
13.4
8.4
-2.4
9.1
6.2
-3.8
-7.0
-5.9
4.0
5.7
2.1
-10.2
-1.2
3.5
-3.8
-3.8
.7
-3.0
1.2
-.2
-12.4
-6.2
9.3
-10.8
Surplus or
deficit
Receipts
Expenditures
7.6
7.8
7.8
7.7
7.3
7.2
8.6
9.1
8.6
9.1
9.3
9.6
10.0
10.4
10.6
10.9
11.1
ll.fi
12.9
15.3
17.6
19.3
21.1
23.3
25.2
27.2
28.8
31.4
34.7
38.2
41.6
46.0
49.9
53.6
58.6
63.4
69.5
75.5
85.2
93.5
106.3
118.3
132.4
8.4
8.5
7.6
7.2
8.1
8.6
8.1
8.4
9.0
9.6
9.3
9.1
8.8
8.4
8.5
9.0
11.0
14.3
17.4
20.0
22.3
23.7
25.3
27.0
29.9
32.7
35.6
39.5
44.0
46.8
49.6
54.1
57.6
62.2
67.8
74.5
83.9
95.1
107.4
118.9
131.2
(-),
national
income
and
product accounts
-0.2
-.6
-.8
-.3
-.1
.5
.6
.5
.7
.4
0)
.6
1.3
1.8
2.5
2.7
2.6
1.9
1.0
.1
-.7
-1.2
-.4
.1
-1.1
-1.3
-.9
-1.4
-2.3
-.8
.2
-.5
.9
1.2
1.7
1.0
1.3
-1.6
-1.1
-.6
1.2
Seasonally adjusted annual rates
249.7
257.0
269.4
277.2
260.5
268.2
273.9
280.1
-10.8
-11.2
-4.5
-2.9
165.3
170.0
180.1
186.2
174.5
180.5
184.2
187.2
-9.2
-10.5
-4.1
-1.1
102.1
105.3
107.9
110.0
103.7
106.0
108.3
111.9
-1.6
1
-.4
-1.9
III.
IV.
291.2
299.2
300.4
304.1
283.5
287.4
292.3
297.0
7.7
11.8
8.1
7.1
197.2
202.5
200.8
202.0
187.7
189.1
192.5
195.9
9.5
13.4
8.3
6.1
113.3
116.3
119.6
123.9
115.1
117.9
119.8
122.9
-1.8
-1.5
-.3
1.0
1970: I . . .
II..
III.
300.2
303.6
304.2
301.5
314.5
315.3
320.6
-1.3
-10.9
-11.2
195.9
196.7
194.9
197.7
210.9
206.7
209.5
-1.7
-14.2
-11.8
127.3
132.0
133.7
126.8
128.7
133.0
136.3
.5
3.4
.7
1968:
II..
III.
IV..
1969: I.
IV t
1 Surplus of $32 million.
2 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.
279
T A B L E C-71.—Receipts and expenditures of the State and local government sector of the national
income and product accounts, 1946-70
[Billions of dollars]
Receipts
Calendar
year or
quarter
Expenditures
Indirect ContriPerbusi- butions FedCorsonal porate
ness
tax
eral
for
tax
Total
profits
and
social grantsand
tax
nontax accruals nontax
insur- in-aid
receipts
accruals ance
Total
Surplus
or
Less: deficit
Pur- TransCurrent
chases fer
national
of
payNet surplus income
goods ments interest of gov- and
ernand
to
paid
prodment uct
servperacenterices
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
11.0
14.3
17.4
20.0
9.8
12.6
15.0
17.7
1.7
2.3
2.9
2.9
0.3
.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
25
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
30
32
3.3
3.4
.3
3
3
-1.2
— 4
'.4
.9
1 i
1 l
1.2
1.4
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
0
0
?
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
I960
1961
1962
1963
1964 . . .
49.9
53.6
58.6
63.4
69.5
7.3
77
8.7
9.4
10.8
3
14
I7
iq
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
.2
-.5
75.5
85.2
. 93.5
106.3
118.3
11.8
13.7
15.5
18,3
21.4
2.1
2.2
2.4
3.1
3.5
45.9
49.9
54.1
60.1
66.1
4.5
5.0
5.7
6.4
7.1
11.1
14.4
15.8
18.4
20.2
74.5
83.9
95.1
107.4
118.9
70.1
79.0
89.4
100.7
110.8
6.9
11
8.7
10.0
11.5
.5
.3
.2
.2
.1
3.0
3.1
3.2
3.4
3.6
3
.6
1
-.6
132.4
24.6
3.2
72.4
7.8
24.4
131.2
120.8
13.9
.3
3.8
1.2
1965
1966
1967 ..
1968
1969
.
1970P
.1
-1.1
7
n
Seasonally adjusted annual rates
1968: 1
II
III
IV
102.1
105.3
107.9
110.0
17.2
18.0
18.6
19.3
3.1
3.1
3.1
3.2
58.0
59.5
61.0
61.9
6.2
6.3
6.5
6.7
17.7
18.3
18.6
19.0
103.7
106.0
108.3
111.9
97.2
99.4
101.4
104.7
9.6
9.8
10.2
10.5
0.2
.2
.1
.1
3.3
3.4
3.4
3.5
-1.6
-.7
-.4
-1.9
1969: 1
II
III
IV
113.3
116.3
119.6
123.9
20.0
20.8
21.9
23.0
3.6
3.6
3.4
3.3
63.6
65.3
67.1
68.4
6.8
7.0
7.2
7.4
19.3
19.6
20.0
21.8
115.1
117.9
119.8
122.9
107.5
110.1
111.6
114.2
11.0
11.2
11.7
12.2
.1
.1
.2
.2
3.5
3.6
3.6
3.7
-1.8
-1.5
-.3
1.0
127.3
132.0
. 133.7
23.6
24.2
24.9
25.7
3.2
3.2
3.3
70.0
71.7
73.2
74.6
7.5
7.7
7.9
8.1
23.0
25.1
24.4
25.2
126.8
128.7
133.0
136.3
117.4
118.7
122.4
124.8
12.9
13.5
14.1
15.1
.2
.3
.3
.3
3.7
3.8
3.8
3.9
.5
3.4
.7
1970: 1
III...
i Deficit of $41 mi'lion.
Source: Department of Commerce, Office of Business Economics.
280
T A B L E C—72.—State and local government revenues and expenditures, selected fiscal years,
1927-69
[Millions of dollars]
General revenues by source 2
Fiscal year»
Total
Property
taxes
Sales
and
gross
receipts
taxes
General expenditures by function
ReveCorponue
Indiration
from
vidual
net
Federa
income
income
Govern
taxes
taxes
ment
All
other
revenues 3
Total
Education
Highways
Public
welfare
2
All
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
8C
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
19401942..
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
42;
543
156
272
451
447
592
945
858
954
855
1,861
1,872
2,123
2,269
2,661
3,685
9,229
9,190
8,863
11,028
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 10,43"
1,237
1,538
1,754
1,759
1,994
744
890
984
1,018
1,001
3,131 7,584
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
I960..
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
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'
1963-64 5
1964-65*
62,269 19,833 14,446
68,443 21,241 15,762
74,000 22,583 17,118
3,26;
3,79
4,090
1,505
1,695
1,929
8,663 14,556 63,977 23,729 11,150
10,002 15,951 69,302 26,286 11,664
11,029 17,250 74,546 28,563 12,221
19,085
20,530
22,911
26, 519
4,76'
5,826
7,308
8,908
2,038
2,22
2,518
3,180
13,214 19,269 82,843
15,370 21,197 93,350
02,411
17,181 23,598102;
19,153 26, I P 116,727
1965-66*
1966-67*....
1967-68 5 . . . .
1968-69 5
83,036
91,197
101,264
114,550
24,670
26,047
27,747
30,673
11,634
12,563
13,489
14,850
33,287
37,919
41,158
47,238
5,420 23,678
5,766 25,586
6,315 27,447
12,770 6,75;
13,932 8,218
14,481 9,857
15,417 12,110
30,029
33,281
36,915
41,962
i Fiscal years not the same for all governments. See footnote 5.
* 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.
»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 unallocable expenditures.
* 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 C-62 for net debt of State and local governments.
Source: Department of Commerce, Bureau of the Census.
28l
CORPORATE PROFITS AND FINANCE
TABLE G-73.—Profits before and after taxes, all private corporations, 1929-70
[Billions of dollars]
Corporate profits (before taxes) and
inventory valuation adjustment
Corporate
profits
before
taxes
Corporate
tax
liability i
3.4
1.9
10.0
3.7
-.9
-.8
3
.9
1.7
2.2
2.1
2.0
30
37
5.1
6.2
6.7
67
8.5
99
12.5
11.6
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
27.9
29.1
32.1
33.4
34.2
l'.O
2 3
3.6
6.3
6.8
4.0
7.0
10 0
17.7
21.5
25.1
24.1
19 7
24.6
31 5
35.2
28.9
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
84.2
79.8
88.7
91.2
82.3
1.4
8.6
2.9
.8
.5 - . 9
.4 - 2 . 7
.4
.5
1.6
1.0
2.6
1.4
4.9
1.5
5.3
1.0
2.9
1.4
5.6
2.8
7.2
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
17.8 24.9
22.3 21.6
19.4 19.6
20.3 20.4
17.7 20.6
21.6 27.0
21.7 27.2
21.2 26.0
19.0 22.3
23.7 28.5
23.0 26.7
23.1 27.2
24.2 31.2
26.3 33.1
28.3 38.4
31.3 46.5
34.3 49.9
33.2 46.6
40.6 48.2
42.7 48.5
37.9 44.4
Manufacturing
Year or
quarter
All
industries
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
1969
1970 P . . . .
10.5
7.0
2.0
-1.3
-1.2
17
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
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
82 4
78 7
85.4
85.8
77.4
1968: 1
II .
III
IV
1969: 1.
II
III
IV . . . .
1970: 1
II
III
IV p .
81.3
86.0
87.4
87.1
87.1
87.4
86.8
82.0
76.7
77.5
78.4
Transportation,
All
Dur- Noncomother
able durmuniinable cation, dusTotal goods
in- goods
and
tries
induspubHc
dus- utilities
tries tries
5.2
2.6
1.5
3.9
1.3
.0
- . 5 -1.0
-.4 -.4
1 l
.3
.9
2.1
1.7
3.2
1.7
3.8
.8
2.3
1.7
3.3
55
3.1
6.4
9.5
11.8
7.2
13.8
8.1
13.2
7.4
97
4.5
2.4
9.0
5.8
13 6
7.5
17.6
16.2
8.1
20.9 12.0
24.6 13.2
21 6 11.7
22.0 11.9
19.9 10.5
26.0 14.3
24.7 12.8
24 0 13 3
9.3
19.3
26.3 13.6
24 4 12.0
23 3 1-1.4
26.6 14.1
28 8 15 8
32.7 17.8
39 3 22.8
42 6 24.0
38 7 20.7
42.4 23.3
41.8 22.4
34.1 15.6
2.6
2.4
1.3
.5
.0
.8
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
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
18.6
18.0
19.1
19.3
18.5
21.5
23.9
23.6
24.4
24.0
23.0
22.7
20.0
16.9
17.2
16.3
18.6
18.9
19.4
19.2
19.4
19.9
19.1
19.0
18.3
18.2
18.3
1.8
1.2
.5
.2
.0
.4
.7
.8
.5
1.0
1.3
2.0
3.4
4.4
3.9
2.7
1.8
2.2
3.0
3.0
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
11.9
10.8
11.0
10.7
9.1
Corporate profits
after taxes
UndisDivi- tribTotal dends
uted
profits
5.8
5.5
4.1
2.5
2.0
26
2.8
4.5
4.7
3.2
3.8
40
4.4
4.3
4.4
4.6
4.6
5.6
6.3
7.0
7.2
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
20.8
21.4
23.3
24.7
25.2
2.8
-2.6
-4.9
-5.2
-1.6
-1 0
-.2
22.3
23.1
23.8
24.1
24.1
24.4
25.0
25.2
25.2
25.1
25.4
25.1
24.7
25.2
24.2
25.5
25.5
25.2
22.9
21.9
19.4
18.8
20.0
'.6
-.2
1.8
32
5 7
5.9
6.6
6.5
44
9.9
13 9
15.6
11.3
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
29.1
25.3
24.9
23.9
19.2
Corporate
capital
consumption
allow-2
ances
Profits
plus
capital
consumption
allowances '
4.2
4.3
4.3
4.0
3.8
3.6
3.6
3.6
3.6
3.7
3.7
3.8
4.2
5.0
5.4
6.1
6.4
4.7
5.8
7.0
7.9
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
39.5
43.0
46.5
49.8
53.5
12.8
7.2
3.5
1.3
4.2
5.2
6.3
8.5
8.9
6.6
9.3
11 0
14 4
15.2
16.4
17.2
15 4
20.2
26 0
29.7
26.5
33.7
31.8
31.0
33.5
35.5
44.4
46.1
46 8
44.3
52.0
51.6
53 5
61.3
64 8
72.3
82 9
89.5
89.6
94.7
98.3
97.9
45.3
46.4
46.9
47.4
48.5
49.3
•50.1
51.0
52.0
53.0
54.0
55.0
92.3
94.6
94.8
97.0
98.1
99.0
98.0
98.1
96.6
96.9
99.4
Seasonally adjusted annual rates
40.1
42.8
42.9
43.7
43.4
42.9
41.8
39.1
35.2
35.5
34.7
11.1
1L0
11.2
10.7
11.0
10. a
10.6
10.3
8.6
9.1
30.1
32.2
33.3
32.6
32.7
33.7
34.4
32.6
32.4
33.4
34.6
86.7
88.6
88.4
91.3
93.0
93.4
89.9
88.5
82.6
82.0
84.4
39.8
40.4
40.4
41.7
43.5
43.8
42.1
41.4
38.0
38.1
38.9
1
Federal and State corporate income and excess profits taxes.
> Includes depreciation and accidental damages.
* Corporate profits after taxes phis corporate capital consumption allowances.
Source: Department of Commerce, Office of Business Economics.
282
46.9
48.3
48.0
49.6
49.5
49.7
47.9
47.1
44.6
43.9
45.4
TABLE
Q-74.—Saless profits, and stockholders1 equity, all manufacturing corporations (except
newspapers1), 1917-70
[Billions of dollars]
All manufacturing
corporations
Year or
quarter
Nondurable goods
industries
Durable goods industries
Profits
Sales
(net)
Profits
StockBefore After holders'
Federal :ederal equity 2
income ncome
taxes taxes
StockStock- Sales
Before After holders'
olders'
equity - (net) Federal Federal equity 2
income income
taxes
taxes
1947..
19481949.
150.7
165.6
154.9
16.6
18.4
14.4
10.1
11.5
9.0
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
1950..
1951..
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
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..
19561957..
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
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
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...
1968...
1969L
492.2
554.2
575.4
631.9
694.6
46.5
51.8
47.8
55.4
58.1
27.5
30.9
29.0
32.1
33.2
105.4
115.2
125.0
135.6
147.6
235.2
262.4
274.8
296.4
328.1
20.3
22.6
22.0
24.8
26.6
13.0
14.6
14.4
15.5
16.4
106.3
115.1
122.6
130.3
142.3
1968: I
II
III....
IV....
148.9
158.9
155.7
168.4
12.5
14.8
13.2
14.9
7.4
8.3
7.6
8.7
130.9
134.1
137.2
140.4
70.1
72.9
74.8
78.6
5.8
6.2
6.4
6.3
3.7
3.8
4.0
4.1
127.7
129.4
131.2
132.9
1969: P . . . .
II-..
lll..._
IV....
162.8
176.1
172.4
183.3
14.1
15.8
13.9
14.4
7.9
8.9
8.0
8.4
281.5
288.0
293.0
297.1
143.4
146.8
148.9
151.1
76.8
81.9
82.7
86.8
6.3
6.9
6.8
6.6
3.8
4.2
4.2
4.2
138.0
141.2
144.1
146.0
1970: I
170.4
181.3
176.7
12.1
13.7
11.7
6.9
8.0
7.0
300.9
306.0
309.5
152.2
155.1
156.6
83.2
86.0
87.0
6.2
6.4
6.4
3.7
4.0
4.0
148.7
151.0
152.9
iIncludes newspapers beginning 1969.
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.
283
TABLE C—75.—Relation of profits after taxes to stockholders* equity and to sales, all manufacturing corporations (except newspapers*), by industry group, 1949-70
IDurable goods industries
All
manufacp.;
ElecturrTItrical Ma
ing
PriiviaFabcormary mary Stone,
maMoporacninAirchin- rhin
nonclay,
riiron
tor
cated and
for
tions Total vehi- craft
ery,
ierand
ery
rous glass
metal steel
cles
dur(exand equip- (exmetal prodcept able 2 and
parts ment, cept prodindusand elec- ucts
equipnewsucts
tries dussup- trical)
ment
pa Ptries
ersi)
plies
Year or
quarter
MisLumcellaber
Inneous
and
stru- manFur
r Hiwood ments ufacfi itu re prod- and
turand
ucts
fjy
reing
TlA"
(exlated (incept prod- cludfurni- ucts
ing
ordture)
nance)
Ratio of profits after Federal income taxes (annual rate) to stockholders' equity—percent 3
1949
1950
1951
1952
1953
1954...
1955
1956
1957
1958
1959
1960
1961
.
1962
1963
1964
1965
1966
1967 . .
1968 .
1969 i
1969: M
II
III—
IV
1970: 1
II
III
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
12.1
11.5
11.3
12.4
10.9
11.3
9 2
10.4
9.0
12.1
16.9
13.0
11.1
11.1
10.3
13.8
12.8
11.3
8.0
10.4
85
8.1
9.6
10.1
11.7
13.8
14.2
11.7
12.2
11.4
11.4
12.9
10.3
11.1
83
10.3
7.5
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
15.1
12.6
15.4
14.5
7.2
13.4
91
12.5
1.0
17.7
13.2
8.1
7.3
9.8
12.7
11.3
12.2
15.2
14.4
12.9
14.2
10.6
12.1
11.0
9.7
9.5
78
7.5
6.1
13.6
20.9
14.0
13.7
13.4
12.4
12.3
11.4
12.5
10.2
12.5
9.5
8.9
10.0
10.1
11.2
13.5
14 8
12.8
12.2
11.1
11.2
11.3
11.2
10.7
77
9.9
8.5
11.6
14.1
13.0
11.3
9.8
8.6
10.3
12.6
10 7
69
9.7
75
7.8
9.1
96
12 5
14.1
15 0
12.9
12.3
12.2
11.2
14.6
11.7
11.4
97
11.3
9.5
10.4
16.0
13.4
10.1
9.8
7.6
10.0
10.7
9.3
7.3
8.0
5.6
5.9
7.9
8.3
10.1
13.2
14.7
12.7
11.7
11.3
10.8
12.5
11.1
10.7
88
10.4
9.1
10.0
14.3
12.3
8.5
10.7
8.1
13.5
12.7
11.4
7.2
8.0
7.2
6.1
5.4
7.0
8.8
9.8
10.2
7.7
7.6
7.6
7.4
8.7
6.1
8.3
5 3
5.3
3.8
8.1
15.1
13.8
11 6
11.1
10.4
15.5
16.4
93
60
7.9
7.1
7.1
7.5
7.6
9.8
11.9
14 8
10.9
10 8
12.2
11.3
12.9
11.5
13.0
12 7
13.2
9.1
8.1
15.2
11.3
8.6
8.2
6.0
92
11.6
8 5
6.3
8.9
65
4.9
7.9
83
10 1
13.4
14 2
12.1
12 2
12.6
11.0
4.9
11.9 13.4
12.2 13.5
7.9 12.6
1 5 70
7.6
9.3
9.2
9.8
13.1
17.7
14.2
11 7
11.8
12.5
15 6
14.9
12 4
10* 2
12.7
99
8 9
8.9
8 7
96
10.3
99
8*2
92
9.2
9.1
17.5
11.9
8.5
7.1
6.3
11.1
8.7
4.7
5.7
9.4
3 6
4.1
5.6
82
9.9
10.1
10.0
8.6
14.6
13.0
17.1
18.9
8.6
8.0
51
7.1
7.1
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
16.6
15.6
13.8
16.0
15.7
16.8
12 7
13.9
14.8
7.2
12.3
9.7
7.0
8.2
7.5
8.5
11.6
7.7
8.2
9.3
92
9.9
9.4
8.*
9.5
10.7
15.4
13.1
12.4
11.6
11.5
10.5
11.5
13.0
72
10.3
10.7
3.6
5.6
3.7
2.7
2.9
2.8
3.1
3.6
2.5
3.(
3.5
3.5
3.6
3J
3.3
3.6
3.8
4.9
4.2
4.0
3.8
4.1
3.5
3.8
3.8
2.6
3.5
3.6
Profits after Federal income taxes per dollar of sales—cents
1949
1950
1951
1952
1953
1954
1955 . .
1956
1957
1958 .
1959.....
I960
1961
1962
1963
1964 . . .
1965
1966
1967
1968
1969 1
1969: M
II
Ill
IV
1970: 1
II
Ill
.
.
.
.
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
5.1
4.8
4.9
5.1
4.6
4.6
4.0
4.4
3.9
6.4
7.7
5.3
4.5
4.2
4.6
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
4.9
4.6
4.8
5.0
4.3
4.4
3.6
4.2
3.3
7.9
8.3
4.7
4.7
3.9
5.1
6.9
5.2
54
4.0
6.3
5.9
5.5
6.9
6.9
7.0
7.2
6.2
4.9
5.7
4.7
5.6
5.2
3.1
4.8
3.8
4.6
.5
29
2.4
1.6
1.4
1.8
2.4
2.3
2,6
3.3
3.0
2.7
3.2
3.0
3.5
3.3
3.0
2.5
2.3
2.1
1.9
5.7
7.2
5.0
4.5
4.1
4.5
4.4
3.8
42
3.8
4.4
3.5
3.5
3.7
3.8
4.2
4.8
4. &
4.4
4.3
3.9
4.0
3.9
4.0
3.6
2.9
3.6
3.2
6.4
7.3
5.5
4.8
4.2
4.4
5.1
5.4
48
3 7
4.8
3.9
4.1
4.5
4.7
5.8
6.2
6.4
5.7
5.5
5.4
5.2
6.1
5.3
5.1
4.6
5.0
4.5
See footnotes at end of table.
284
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
4.1
3.8
3.8
4.1
3.6
3.5
3.3
3.6
3.2
6.5
7.9
5.8
4.7
5.3
5.3
7 2
6.7
66
5.4
5.4
5.1
4.6
3.9
4.8
5.6
5.7
5.8
4.8
4.6
4.4
4.5
4.8
3.6
4.7
3.0
3.0
2.2
6.9
10.2
78
6.7
6.3
6.6
83
9.3
66
4.7
5.8
5.4
5.3
5.5
5.3
6.5
7.3
8.2
6.8
6.2
6.6
6.4
6.8
6.2
6.9
7.1
7.3
5.4
8.6
10.1
7.1
6.6
6.5
7.4
8 6
8.2
75
6.8
7.9
6.6
5.8
5.6
5.3
5.6
5.9
5.6
4.8
5.2
4.7
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
3.4
3.5
5.9
9.4
5.5
4.1
3.5
3.4
5.4
3.9
23
2.8
4.2
1.7
1.9
2.5
3.3
3.9
4.0
3.8
3.4
5.3
4.8
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
8.1
7.8
2.9
5.7
5.9
4.0
.9
4.7
4.6
3.1
3.6
3.8
3.5
2.2
2.4
2.9
6.3
6.6
3.2
3.1
2.3
2.9
2.8
7.3
7.8
8.1
7.9
6.9
7.2
7.6
TABLE G—75.—Relation of profits after taxes to stockholders' equity and to sales, all manufacturing corporations (except newspapers1), by industry group, 1949-70—Continued
Nondurable goods industries
Printing
Year or
quarter
Food
and
kindred
products
Total
nondurable a
Tobacco
manufactures
Textile
mil!
products
Apparel
and
related
products
Paper
and
allied
products
and
publishing
(except
newspapers i)
Chemicals
and
allied
products
Petroleum
refining
Rubber
and
miscellaneous
plastic
products
Leather
and
leather
products
Ratio of profits after Federal income taxes (annual rate) to stockholders' equity—percenta
1949
1950
1951
1952
1953 1954.
1955.......
1956. .
1957
1958
1959
1960 .
1961.
1962
1963 . .
1964
1965
1966. . .
1967
1968
19691
1969: 1 i.._.
ll..._
III...
IV... _
1970: 1
II —_
III...
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
11.9
11.5
11.1
11.9
11.5
11.4
10.0
10.5
10.5
11.8
12.3
8.1
76
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
10.8
10.9
9.6
10.7
11.9
11.2
10.0
10.4
11.8
5.4
1949
1950
6.5
1951........
4..5
1952...:...
4.1
1953
4.3
1954
4.4
1955
IJ.-l ." ; 5.1
5.3
1956
1957
4.9
1958 . . .
4.4
4.9
1959
1960 _ .
4.8
1961
4.7
1952 . . .
4.7
4.9
1963
1964... .
5.4
5.5
1965
1966 . . .
5.6
5.3
1967..-—.
1968
52
5.0
19691
5.0
1969: 11--._.
5.1
II....
III...
5.0
IV_.__
4.8
WO: 1
4.5
4.6
IL._
4.6
in
33
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
27
2.7
2.6
26
2.6
2.4
2.6
2.8
2.5
2.4
2.4
2.7
12.6
11.5
9.5
84
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
14 4
14 5
12.1
14.8
15.6
15.1
13.7
15.0
17.4
7.6
12.7
8.2
42
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
8.8
7.9
7.2
8.8
7.7
7.8
5.4
4.8
5.4
7.5
10.1
2.9
44
5.1
4.5
6.1
8.1
6.3
4.9
8.6
7.7
7.2
93
7.7
11.7
12 7
13,3
12.0
13 0
11 9
10.3
11.4
1-5.9
10.1
8.3
7.2
14.4
10 7
16 2
13.9
10 5
10 1
9.9
11.5
11 6
8.9
8.1
95
8.5
7.9
81
8.1
9.3
94
10.6
9.1
97
10 1
9.8
11.1
9.6
9.9
8.3
8.2
6.2
11.4
11 5
10.3
91
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 5
12 6
10.8
13.1
12.4
14.1
9.2
12.7
11.2
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 3
12 8
12.9
13.8
12.4
12.0
11.9
12.2
11.2
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
12.3
11.7
12.0
11.9
11.4
11.6
10.5
10.8
10.7
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
12.3
10.3
9.6
11.9
9.5
10.4
7.7
8.5
7.4
62
10 9
2.1
58
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
13.0
9.3
8.6
8.0
9.4
11.0
9.0
9.1
10.5
3.8
5.8
4.5
3.6
3.8
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
3.0
3.0
3.3
2.6
2.4
2.3
2.6
3.0
2.5
2.6
2.7
Profits after Federal income taxes per dollar of sales—cents
51
49
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
59
5.9
5.9
5 5
5.2
4.6
5.2
5.6
5.2
5.4
5.4
6.2
41
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
3.1
2.9
2.7
3.2
2.8
2.7
2.1
1.8
2.0
21
28
.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
?. 1
23
2.4
2.3
24
2.3
2.2
2.2
3.0
1.9
1.7
1.5
2.9
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
49
5.4
4.7
47
4.8
4.7
5.2
4.7
4.6
4.2
3.9
3.1
45
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
4.1
4.7
4.1
4.9
4.7
4.9
3.6
4.9
4.2
82
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
6.8
6.5
6.7
6.8
6.3
6.1
6.2
6.1
5.9
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
10.7
10.1
10.6
10.2
10.0
9.8
9.1
9.3
9.2
4.Q
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
4.5
3.8
3.7
4.1
3.5
3.7
3.0
3.1
2.9
Mncludes newspapers beginning 1969.
Mncludes certain industries not shown separately.
3 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.—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 C-74.
Sources: Federal Trade Commission and Securities and Exchange Commission.
285
T A B L E C-76.—Sources and uses of funds, nonfarm nonfinancial corporate businessy 1959—69
[Billions of dollars]
1959
1960
1961
Sources, total
57.9
48.1
56.6
Internal sources *
35.0
34.4
35.6
Undistributed profits 1 _
12.6
Corporate inventory valuation ad-.5
justment
Capital consumption allowances'. 22.9
10.0
10.2
.2
24.2
22.9
2.2
3.0
3.0
3.5
-.3
5.5
2.4
3.6
Uses, total
53.1
Purchases of physical assets
36.9
Nonresidential fixed investment- 31.1
Residential structures
1.7
Change in business inventories.. 4.1
Source or use of funds
External sources
Stocks
Bonds
Mortgages
Bank loans n e e
Other loans
Trade debt
Profits tax liability
Other liabilities
Increase in financial assets
Liquid assets .
Demand deposits and currency
Time deposits
U.S. Government securities
Open-market paper
State and local obligations
Consumer credit
Trade credit
Other financial assets
Discrepancy (sources less uses)
1962
1963
1964
1965
1966
1967
1968
64.9
67.1
71.8
93.1
100.6
94.4
109.8
118 4
41.8
43.9
50.5
56.6
61.2
61.5
62.5
62.5
12.4
13.6
18.3
23.1
24.7
21.1
20.9
19.9
-.1
25.4
.3
29.2
-.5
30.8
-.5
32.8
-1.7
35.2
-1.8
38.2
-1.1
41.5
—3.3
44.9
—5 4
48.0
13.7
21.0
23.1
23.2
21.3
36.5
39.4
33.0
47 3
56 0
1.6
3.5
2.5
1.9
1.9
.6
-2.2
4.0
2.5
4.6
3.9
5.4
1.4
1.7
.6
4.6
4.5
3.0
.0
4.6
.6
5.2
-.3
3.9
4.9
3.7
.2
5.3
1.9
3.7
1.4
4.0
3.6
3.8
.9
3.6
.5
3.5
.0
5.4
3.9
10.6
.6
9.1
2.2
4.6
1.2
10.2
4.2
8.4
1 4
7.3
2.3
14.7
4.5
6.4
1 4
2.6
-4.1
5.2
6! 5
g
12! 9
5.8
9.6
3 6
5.7
3.7
6.9
4.3
12.1
4.3
10.9
6 2
10.9
8
6.5
43.7
52.2
60.0
63.2
64.9
85.8
92.5
85.5
103.5
111.2
39.0
36.7
44.0
45.6
52.1
62.8
77.1
72.0
76.9
87.0
34.9
1.1
3.0
33.2
1.9
1.5
37.0
2.3
4.7
38.6
2.6
4.3
44.1
2.1
5.9
52.8
2.0
7.9
61.6
1.1
14.4
62.5
2 3
7.3
67.5
2 4
7.0
76.9
2 9
7.2
16.2
4.7
15.6
16.0
17.7
12.8
23.1
15.5
13.5
26.6
24.2
5.6
-3.2
3.7
3.5
4.7
1.2
1.7
1.9
.0
10.1
2.3
-.5
-1.0
4
1.3
6! 6 5 . 4
-.2
1.7
-.2
.7
1.7
1.9
-.2
.4
.0
-.9
3.7
.5
.6
-.3
-.8
3.9
.5
.9
.2
-2.3
3.2
-1.5
1.6
.2
-1.5
3.9
-1.6
.5
.5
7 -2 2
4.1
-.7
-1.2 -3.1
2.0
1.5
1.0
-.4
1 3
2.2
1.8
4.5
.4
5
-7.8
—1 4
8.7
2.3
.8
7.7
2.0
.4
5.3
2.2
.2
9.5
2.1
.7
8.5
3.2
1.0
8.1
3.9
1.3
8.1
2.2
1.2
15.1
5.1
1.2
11.3
1.0
.9
8.8
3.8
1.7
14.8
.1
1.3
17.3
3.4
4.8
4.3
4.3
5.0
3.8
6.9
7.2
8.0
9.0
6.3
7.2
1969
'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.
'
Source: Board of Governors of the Federal Reserve System.
286
TA3LE C-77.—Current assets and liabilities of U. $. corporations, 1939-70
[Billions of dollars]
Current liabilities
Current assets
End of year
or quarter
Cash
on
hand
Total and
in
banks*
U.S.
Government
securities 2
54.5
60.3
. . 72.9
33.6
93.8
. . 97.2
97.4
108.1
10 8
13.1
13.9
17.6
21.6
21.6
21.7
22.8
2.2
2.0
4.0
10.1
16.4
20.9
21.1
15.3
123.6
133.1
161.5
179.1
186.2
190.6
194.6
224.0
237.9
244.7
255.3
277.3
289.0
306.8
25.0
25.3
26.5
28.1
30.0
30.8
31.1
33.4
34.6
34.8
34.9
37.4
36.3
37.2
41.1
14.1
14.8
16.8
19.7
20.7
19.9
21.5
19.2
23.5
19.1
18.6
18.8
22.8
20.1
20.0
304.6
328.5
351.7
372.2
410.2
1965
442.6
1966
470.4
1967
513.8
1968
555.9
1969
1968: L . . . . 478.2
II
488.7
M L . . - - . 499.0
IV
513.8
1969: 1
523.3
II
534.5
III
544.7
IV
555.9
1970: 1
561.0
II
566.3
III
567.6
40.7
43.7
46.5
47.3
49.9
49.3
54.1
58.0
54.9
52.0
53.2
54.6
58.0
54.6
55.4
53.9
54.9
52.9
52.5
53.7
19.2
19.6
20.2
18.6
17.0
15.4
12.7
14.2
12.7
15.0
13.6
13.1
14.2
16.0
13.5
12.4
12.7
12.5
10.7
9.3
1939
1940
1941
1942
1943
1944
..
.
1945
1946
1947
1948
1949
.
. . 133.0
1950
1951
1952
1953..-.
1954
1955
1956
1957
1958
1959
1960
1961
New series 5
1961 . .
1962
1963
1964
AdRevances
Net
ceiv- Notes
and
Notes FedworkOther
eral Other
ables
and
preand
curing
curIninfrom
acpayaccapirent Total ments,
vencome rent
U.S. counts tories
counts
liatal
astax
Gov- receivU.S.
Paybilisets*
able liabili- ties
ern- 3 able
Govties
ment
ernment3
22.1
23.9
27.4
23.3
21.9
21.8
23.2
30.0
18.0
19.8
25.6
27.3
27.6
26.8
26.3
37.6
1.4
1.5
L4
1.3
1.3
1.4
2.4
1.7
30.0
32.8
40.7
47.3
51.5
51.7
45.8
51.9
.
.3
38
42.4
43 .0
55.7
1.1
58.8
2.7
2.8
64.6
2.6
65.9
2.4
71.2
86.6
2.3
95.1
2.6
99.4
2.8
2.8 106.9
2.9 117.7
3.1 126.1
3.4 135.8
44.6
43.9
45.3
55.1
64.9
65.8
67.2
65.3
72.8
80.4
82.2
81.9
88.4
91.8
95.2
1.6
1.6
1.4
1.7
21
2.4
2.4
31
4.2
5.9
6.7
75
9.1
10.6
11.4
61.5
64.4
60.7
79.8
92.6
96.1
98.9
99.7
121.0
130.5
133.1
136.6
153.1
160.4
171.2
3.4
3.7
3.6
3.4
3.9
4.5
5.1
5.1
4.8
4.8
4.7
4.8
5.1
4.8
4.8
4.6
4.8
4.7
4.4
4.2
95.2
100.7
107.0
113.5
126.9
143.1
153.4
165.8
184.8
156.1
159.4
163.2
165.8
170.4
175.2
180.0
184.8
188.0
190.2
191.8
12.9
14.7
17.8
19.6
22.3
25.1
29.0
33.6
37.8
32.2
32.8
32.4
33.6
36.1
36.9
37.4
37.8
38.5
39.9
38.5
155.8
170.9
188.2
202.2
229.6
254.4
271.4
301.8
342.7
273.6
280.9
290.4
301.8
308.7
318.9
330.9
342.7
347.7
352.7
353.6
0.1
.6
4.0
5.0
4.7
2.7
.7
-
133.3
144.2
156.8
169.9
190.2
205.2
216.0
237.1
261.0
218.0
225.0
230.9
237.1
241.3
248.6
256.3
261.0
264.5
268.7
270.0
21.9
0.6
22.6
.8
25.6
2.0
24.0
2.2
24.1
1.8
25.0
24.8
.9
.1
31.5
— ^37 .3
.6
39
37 .5
47.9
.4
53.6
1.3
57.0
2.3
57.3
2.2
2.4
59.3
73.8
2.3
81.5
2.4
84.3
2.3
17
88.7
99.3
1.7
1.8 105.0
1.8 112.8
1.2
2.5
7.1
12.6
16.6
15.5
10.4
8.5
6.9
7.1
7.2
8.7
8.7
9.4
9.7
11.8
24.5
27.5
32.3
36.3
42.1
45.6
51.6
56.2
10.7
11.5
9.3
16.7
21.3
18.1
18.7
15 5
19.3
17.6
15.4
12 9
15.0
13.5
14.1
13.2
13.5
14.0
14.9
16.5
18.7
20.7
22.5
25.7
29.0
31.1
33 3
37.0
40.1
42.5
62.1
68.6
72.4
81.6
86.5
90.1
91.8
94 9
103.0
107.4
111.6
118 7
124.2
128.6
135.6
110.0
119.1
130.4
140.3
160.4
179.0
190.6
209.8
238.1
188.9
195.3
201.2
209.8
210.7
220.1
227.9
238.1
238.4
244.1
243.0
14.2
15.2
16.5
17.0
19.1
18.3
14.1
16.4
16.6
15.9
14.3
14.6
16.4
18.5
15.0
15.9
16.6
18.0
14.6
15.4
29.8
34.5
38.7
42.2
46.9
52.8
60.8
69.1
80.6
62.7
65.0
68.2
69.1
72.7
76.5
79.6
80.6
84.2
87.1
88.3
148.8
155.6
163.5
170.0
180.7
188.2
198.9
212.0
213.2
204.7
207.8
208.6
212.0
214.6
215.6
213.8
213.2
213.3
213.6
214.0
1.8
2.0
2.5
2.7
3.1
4.4
5.8
6.4
7.3
6.1
6.2
6.3
6.4
6.9
7.2
7.5
7.3
7.2
7.0
6.8
» Includes time certificates of deposit.
3 Includes Federal agency issues.
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.
4
Includes marketable investments (other than Government securities and time certificates of deposit) as well as sundry
current assets.
* Generally reflects definitions and classifications used in "Statistics of Income" for 1961.
Note.—Data relate to all U.S. corporations, excluding banks, savings and loan associations, insurance companies, and beginning with the new series for 1961, investment companies. Year-end data through 1967 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.
3
287
TABLE C--78.—State and municipal and corporate securities offered, 1934-70
[Millions of dollars]
Corporate securities offered for cash
Year or quarter
State and
municipal
securities
offered
for cash
(principal
amounts)
Type of corporate security
Total
corporate
offerings
Common
stock
Preferred
stock
Bonds
and
notes
Industry of corporate user
Manufacturing *
Electric,
gas
and
water 2
Transportations
Communication
Other
1934
939
397
19
6
371
67
133
176
21
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
797
1,332
1 120
848
604
1,284
2 040
771
1 234
1,271
126
797
344
55
186
125
401
74
18
103
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
992
848
539
510
1,061
1,203
1,357
472
477
1,422
324
366
48
161
609
159
96
4
21
109
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
1 127
762
492
425
4,855
4,882
5,036
5,973
4,890
2 026
3 701
2,742
2,226
1,414
2 319
2 158
3 257
2,187
2,320
1 454
711
286
755
800
902
571
211
329
293
1,008
946
3,532
3,189
4,401
5,558
6,969
6,361
7,741
9,534
8,898
9,516
811
1,212
1,369
1,326
1,213
631
838
564
489
816
4,920
5,691
7,601
7,083
7,488
1,200
3,122
4,039
2,254
2,268
2,649
2,455
2,675
3,029
3,713
813
4S4
992
595
778
399
612
760
882
720
1,300
1 058
1,068
2,138
2,037
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
2,994
3,647
4 234
3 515
2,073
2,464
2,529
3 938
3 804
3,258
893
724
824
824
967
1,132
1,419
1 462
1 424
'717
2,757
2,619
2 426
1 991
2,733
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
1,011
2,679
409
450
422
343
412
8,081
9,420
8,969
10,856
10, 865
2,152
4,077
3 249
3,514
3,046
2,851
3,032
2 825
2,677
2,760
718
694
567
957
982
1,050
1,834
1,303
1,105
2,189
3,383
3,527
2,761
3,957
4,980
1965
1966
1967
1968
1969
11,148
11,089
14,288
16,374
11,460
15,992
18,074
24,798
21,966
26, 744
1,547
1,939
1,959
3,946
7,714
725
574
885
637
682
13,720
15, 561
21,954
17,383
18,348
5,417
7,070
11,058
6 979
6,356
2,936
3 665
4,935
5,281
6,736
1,013
1,972
2,067
1,875
2,146
947
2,003
1,979
1 766
2 188
5,680
3,364
4,759
6,064
9,318
1945
1946..
1947
1948
1949
1950
1951
1952
1953
1954
..
. .
. .
.
17,740
38,965
7,275
1,390
30, 300
10,620
10,985
2,270
5,140
" 9,945
1968:1
II
III
IV
3,658
3 771
4,511
4,435
5,178
5,705
5,133
5,950
740
832
986
1,389
249
124
179
85
4,189
4 749
3,967
4,477
1,907
1,703
1,657
1,712
1,442
1,244
1,160
1,435
404
470
427
574
422
536
490
319
1,003
1,753
1,398
1,910
1969:1
||
III
IV
2,738
3,426
2,376
2,920
6,219
7,354
6,332
6,839
1,786
2,141
1,616
2,171
236
128
182
135
4 197
5,085
4,534
4,533
1,407
1,774
1,862
1,314
1,345
1,879
1,544
1,967
808
612
371
356
474
432
684
598
2,187
2,657
1,871
2,604
1970:1 .
II
III
IV v.
4,017
3,656
4,278
5,790
7,977
10,469
8,559
11,960
1,938
1,832
1,303
2,200
200
359
356
475
5,839
8,278
6,900
9,285
2,584
2,445
2,315
3,280
2,085
2,813
2,714
3,375
772
336
492
670
766
2,163
868
1,340
1,771
2,711
2,171
3,290
1970 v
1
Prior to 1948, also includes extractive, radio broadcasting, airline companies, commercial, and miscellaneous company
issues.
2
Prior to 1948, also includes telephone, street railway, and bus company issues.
' Prior to 1948, includes railroad issues only.
Note.—Covers 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; excludes notes issued exclusively
to commercial banks, intercorporate transactions, investment company issues, and issues to be sold over an extended period, such as employee-purchase plans.
Sources: Securities and Exchange Commission, "The Commercial and Financial Chronicle," and "The Bond Buyer"
288
T A B L E C—79.—Common stock prices, earnings, and yields, and stock market credit,
Standard & Poor's common stock data
Price index1
Year or month
Total
(500
stocks)
Industrials
(425
stocks)
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
97.84
83.22
102 04
101.46
99.30
101 26
104.62
99.14
94.71
94.18
94.51
95.52
96.21
91.11
90.31
87.16
88.65
85.95
76.06
75.59
75.72
77.92
82.58
84.37
84.28
90.05
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
91.08
99.18
107.49
107.13
91.29
110 97
110.15
108.20
110 68
114.53
108. 59
103 68
103.39
103.97
105.07
105.86
100.48
99.40
95 73
96.95
94.01
83.16
82.96
83.00
85.40
90.66
92.85
92.58
98.72
Public
utilities
(55
stocks)
Railroads
(20
stocks)
Dividend
yield 2
(percent)
Price/
Customer credit (excluding
U.S. Government
securities)
ings
ratio s
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...
1969 .
.
1970 v . . .
1969: Jan
Feb
Mar
Apr
May
June
July..
Aug
Sept
Oct
Nov
Dec
1970: Jan . .
Feb
Mar..
Apr
May..
June
July
Aug...
Sept
Oct.
Nov
Deep
.
.
..
.
.
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
62.64
54.48
68 65
69.24
66.07
65 63
66.91
63.29
61 32
59 20
57.84
58.80
59 46
55.28
55.72
55 24
59.04
57 19
51.15
49.22
50.91
52.62
54.44
53.37
54.86
59.96
1939-70
Stock market credit
Net
debit
bal- 4
ances
Bank
loans
to
"others" 5
Bank
loans to
brokers
and
dealers 6
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
46.78
46.34
46.72
48.84
45.95
31.13
54 11
54 78
50.46
49 53
49 97
46.43
43 00
42 04
42.03
41.75
40 63
36.69
37 62
36 58
37.33
36 05
31 10
28.94
26.59
26.74
29.14
31.73
30.80
32.95
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
3.24
3.83
3 06
3 10
3.17
3 11
3 02
3.18
3 34
3 37
3.33
3.33
3 31
3.52
3 56
3 68
3.60
3 70
4 20
4.17
4.20
4 07
3.82
3.74
3.72
3.46
13.80
10.25
8.27
8 80
12 84
13.66
1,374
16.33
976
17.69
1,032
9.36
968
6.91
1,249
6.64
1,798
6.63
9.27
1,826
1,980
10.47
2,445
9.69
3,436
11.25
11 51 4,030
3,984
14.05
3,576
12.89
4,537
16.64
17.05
4,461
4,415
17.09
5,602
21.06
5,494
16.68
7,242
17.62
18.08
7,053
7,770
17.08
7,444
14.92
17.52 10,347
17.20 12,488
16.57 10,010
17.68
16.59
15.42
16.58
17.31
13.33
11,793
11,949
11,099
10 807
11,240
10,960
10,224
9,692
9,656
9,816
9,632
10,010
9 117
8 936
8,718
8 316
7 727
7,567
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
9,790
7,445
9 042
9,148
8,318
8 044
8,474
8,214
7 515
7,019
7,039
7,243
7,111
7,445
6,683
6 562
6,353
5 985
5 433
5,281
(8)
15 77
/8\
(8)
(8)
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
5 2,249
2,115
2,464
2,698
7 2, 565
2,329
2,751
2,801
2,781
2,763
2,766
7 2,746
2,709
2,673
2,617
2,573
2,521
2,565
2 434
2 374
2,365
2 331
2 294
2,286
2,287
2 296
2,329
2,270
2,317
2,329
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
«4,277
4,501
5,082
5,796
7 5,141
6,091
4,740
4,334
3,697
4 364
4,051
7 4, 379
4 462
3,388
3,577
3,586
4,197
5,141
3,465
3 782
4,135
4 067
3 790
3,368
3,528
3 856
3 658
4,063
4,086
6,091
* 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.
5
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
of period.
6 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.
7 Revised series beginning June 1969; not strictly comparable with earlier data.
8
Series discontinued beginning July 1970.
Sources: Board of Governors of the Federal Reserve System, Standard & Poor's Corporation, and New York Stock
Exchange.
289
TABLE C-80.—Business formation and business failures\ 1929—10
Business failures l
Index
of net
business
formation
(1967 = 100)
Year or month
1929 .
1930
1931
1932 s
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
1969
1970
New
business
incorporations
(number)
..
.
..
.
..
.
.
114 3
89.8
95.0
95.5
100 3
96 1
92 7
99.9
95 8
91 3
90.2
97.1
92 7
88 6
91.0
93 4
97 0
98.4
98 0
100 0
109 4
114.8
4 106. 7
..
.
.
_
132,916
112 897
96,346
85.640
93,092
83.778
92 946
102 706
117,411
139,915
141 163
137,112
150,781
193,067
182 713
181,535
182,057
186 404
197 724
203, P97
200 010
206,569
233 635
274,267
245, 234
Amount of current
liabilities (millions
of dollars)
Number of failures
Business
failure
rate'
Liability size
class
Total
Liability size
class
$100,000
and
over
Total
Under
$100,000
Under
$100,000
$100,000
and
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
54.4
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
37.3
43.8
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
9,154
10,748
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
1,003
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
7,192
8,019
744
947
1,055
1,625
979
670
553
322
287
283
111
219
163
123
66
46
50
126
371
397
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
1,962
2,729
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
1,142.1
1,887.8
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
231.3
269.3
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
910.8
1,618.4
32.0
35.6
38.0
36.4
36.9
39.8
34.9
36.0
39.9
39.5
40.9
38.2
33.7
39.4
40 1
43.7
42.1
43.4
46.8
47.4
50.0
45.9
50.8
44.5
689
731
868
823
812
792
689
702
726
815
759
748
734
817
921
992
891
912
916
910
906
941
939
869
545
566
722
643
661
630
537
563
573
600
570
582
555
622
704
737
662
703
650
692
614
728
729
623
144
165
146
180
151
162
152
139
153
215
189
166
179
195
217
255
229
209
266
218
292
213
210
246
75.0
90.0
84.1
118.8
92.6
91.9
112.7
62.8
73.7
116.4
127.1
96.8
137.3
139.4
120.0
131.9
147.9
170.5
251.9
169.6
232.9
144.8
119.8
121.7
18.2
17.7
23.4
19.7
21.6
19.0
17.8
18.6
17.9
19.2
18.7
19.4
17.6
21.6
24.6
25.0
22.6
24.0
21.9
22.5
20.4
23.8
24.4
21.0
56.9
72.3
60.7
99.1
71.0
72.9
95.0
44.2
55.8
97.2
108.4
77.4
119.6
117.8
95.4
106.9
125.3
146.5
230.0
147.1
212.6
121.0
95.5
100.7
Seasonally adjusted
1969: Jan
Feb
Mar
Apr
May
June
July
Aug
Sept
Oct
Nov
Dec
1970: Jan
Feb
Mar
Apr
p
.
..
..
....
June
July
Aug. . _
Sept
Oct
Nov
Dec
116.2
116 8
114.4
114.9
114 3
114.8
115 7
115.3
114.3
114.4
113.0
113.6
113.2
113.0
108 7
107.7
105.8
104.7
104.6
103.8
104.7
103.4
103.7
20, 578
22 199
21,353
23,220
23,185
23, 528
23,554
22 967
23,138
24, 046
23,308
22,137
22,072
23,249
21 091
21 876
22,401
22,276
22,264
22,078
23,126
21,409
23,392
» 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.
* Failure rate per 10,000 listed enterprises.
> Series revised; not strictly comparable with earlier data.
4
Eleven-month average of data shown.
Sources: Department of Commerce (Bureau of the Census) and Dun & Bradstreet, Inc.
29O
AGRICULTURE
TABLE G-81.—Income of farm people and farmers, 1929-70
Income received from far ning
Personal income
received by total
farm population
Net to farm
operators
Realized gross
Year or
quarter
From
From
From
nonall
farm
farm 2 Totals
sources sources i sources
ProducCash tion exreceipts penses
from
marketings
Exclud- Including net ing net
inven- inventory
tory
change change4
1950 . . .
.
1951
1952
1953 .
1954 . . .
.
1955
1956
1957
1958
1959
1960
1961
1962.......::-.
1963 . . . _
1964
1965
1966 .
1967
1968 . .
1969
1970*
5.4
7.7
7.2
9.0
7.2
7.4
7.6
10.1
14.1
16.5
16.6
17.2
20 0
21.1
23.8
19.5
20.4
22.7
22 1
19.8
18.4
17.6
17.8
17.7
19.5
18.1
18.7
19.7
20.4
20.6
20 6
23.6
24.9
24.0
25.4
27.5
27.9
3.2
5.4
4.6
6 2
4.7
4.8
4.8
6.8
10 1
12.1
12.2
12.8
15 5
15.8
18.0
13.3
14.1
16.2
15 4
13 4
12.5
11.4
11.2
11.0
12.8
11.0
11.5
12.2
12.3
12.1
11 3
13.5
14.4
13 1
13.5
14.7
14.6
2 2
2.3
2.6
2 7
2.5
2.6
2.8
3.3
3 9
4.4
4.4
4.4
4 6
53
5.8
6.2
6.3
6.5
6 7
6 4
5.9
6.2
6.6
6.6
6.7
7.0
7.2
75
8.2
8.5
93
10.0
10.5
10 9
11.8
12.8
13.3
13.9
11.5
8.4
6.4
7 l
8 6
9.7
10.8
11 4
10.1
10.6
11.1
13.9
18 8
23.4
24.4
25.8
29 5
34 1
34.7
31.6
32.3
37.1
36 8
35 0
33.6
33.1
34.3
34.0
37.9
37.5
38.1
39 8
41.3
42.3
42 6
44.9
49.7
49 0
51.0
54.6
56.2
11.3
91
6.4
4.7
5 3
6 4
7.1
8.4
8 9
7.7
7.9
8.4
11.1
15 6
19.6
20.5
21.7
24 8
29 6
30.2
27.8
28.5
32.9
32 5
31 0
29.8
29.5
30.4
29.7
33.5
33.5
34.2
35 1
36.4
37 4
37 2
39.3
43.3
42 7
44.2
47.2
48.7
Current
prices
1967
pricess
Dollars
Billions of dollars
1929
1930
1931
1932
1933 .
1934
1935
1936
1937
1938
1939
1940
1941
1942
1943
1944
1945
1946
1947..
1948
1949
Net income per
farm, including
net inventory
cha nge
7.7
6.9
5.5
4.5
4 4
4.7
5.1
5.6
6 2
5.9
6.3
6.9
7.8
10 0
11.6
12.3
13.1
14 5
17.0
18.8
18.0
19.4
22.3
22 6
21 3
21.6
21.9
22.4
23.3
25.2
26. 1
26.4
27 1
28.6
29.7
29 5
30.9
33.4
34 8
36.0
38.4
40.4
6.2
6.3
4.5
4.3
2.9
3.3
2.0
1.9
2 7
2 6
2 9
3 9
4.6
5.3
5.1
4.3
60
5 2
4.4
4.2
4.3
4.4
4.5
4.2
6.5
6.1
88
9 9
11.8
11.7
12.1 " 11.7
12.8
12.3
15 1
15 0
15.4
17 1
15.9
17.7
13.6
12.8
12.9
13.7
14.8
16.0
15 1
14 1
13 1
13 7
12.5
12.0
11.2
11.5
11.9
11.4
10.7
11.3
12.7
13.5
11.4
11.5
12.1
11.7
12 6
13 0
12.6
13.2
12.6
13 2
12 3
13 1
14.0
15.0
16.3
16.3
14 2
14 9
15.0
15 1
16.2
16.5
15.8
16.3
945
651
506
304
379
431
775
639
905
668
685
706
1,031
1,588
1,927
1,950
2,063
2,543
2,615
3,044
2,233
2,421
2,946
2,896
2,626
2,606
2,463
2,535
2,590
3,189
2,795
3,049
3 399
3,586
3,708
3 564
4,487
5,019
4 730
4,957
5,563
5,563
1,969
1,447
1,297
921
1 115
1,134
1,987
1,638
2,262
1,758
1,851
1,858
2,578
3 452
3,706
3,611
3,619
4 037
3,534
3,903
2,977
3,186
3,549
3 448
3 126
3,102
2,932
2,982
2,943
3,583
3,140
3,388
3 777
3,941
4 030
3 832
4,723
5,121
4 730
4,766
5,104
4,880
5,490
5,490
5,620
5,650
5,850
5,680
5,540
5,270
5,130
5,040
5,160
5,090
5,220
5,030
4,860
4,580
Seasonally adjusted annual rates
1969: 1
||
Ml
IV
1970: 1
II.. . .
Hi
IV v
53.7
54.6
54.8
55.2
56.3
56.2
56.5
55.8
46.5
47 4
47.4
47.6
49.0
49.0
48.8
48.0
37.5
38.6
38.6
39.0
39.8
40.1
40.8
40.9
16.2
16.0
16.2
16.2
16.5
16.1
15.7
14.9
16.3
16 3
16.7
16.8
17.1
16.6
16.2
15.4
*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.
s Cash receipts from marketings, Government payments, and nonmoney income furnished by farms (excluding net
inventory change).
4
Includes net value of physical change in inventory of crops and livestock valued at the average price of the year.
* Income in current prices divided by the index of prices paid by farmers for family living items on a 1967 base.
Source: Department of Agriculture.
29I
TABLE C-82.—Farm production indexes, 1929-70
11967=1001
Crops
Year
Farm
output i
Livestock and products
Hay Food Vege- Fruits
Feed
Total J grains
and
and
forage grains tables nuts
Cotton
Meat
ToOil
bacco crops Total' animals
Dairy
products
Poults
and
eggs
65
67
200
77
8
54
52
76
32
55
59
47
35
33
66
67
68
65
71
65
82
67
68
63
188
230
175
175
130
83
78
51
70
55
8
8
8
6
8
55
56
56
57
52
52
55
56
58
49
77
79
80
80
79
33
32
32
32
30
71
57
65
70
65
41
40
55
57
72
67
73
72
47
72
80
62
83
75
86
143
168
257
162
160
67
60
80
70
96
12
9
11
13
17
50
54
53
56
60
44
50
48
52
59
79
80
80
82
83
30
32
32
33
35
53
57
65
60
63
75
75
81
79
78
51
59
61
53
65
74
75
79
87
82
83
88
87
75
87
170
147
175
155
167
74
64
71
71
99
20
22
33
35
29
61
64
72
78
74
60
63
72
81
73
85
90
93
92
93
36
39
45
51
51
60
66
51
73
65
81
76
73
73
74
73
76
73
83
79
72
68
70
82
79
68
84
94
81
87
84
79
95
90
82
87
123
118
162
203
218
100
118
107
101
100
32
31
32
39
36
74
71
70
68
73
70
68
67
66
69
96
95
94
91
94
54
50
49
49
54
73
75
78
79
79
76
78
81
80
79
65
60
64
62
65
77
80
78
80
80
64
63
81
74
65
86
79
80
85
83
88
89
87
88
88
137
207
207
223
185
103
118
114
104
114
42
38
37
37
42
75
79
79
79
82
74
79
79
78
82
94
93
93
98
99
57
59
59
61
63
1955...
1956...
1957...
1958...
1959...
81
82
81
86
87
82
81
79
89
88
69
69
75
81
85
85
82
88
89
84
61
64
61
90
72
86
91
88
91
89
88
92
84
91
93
200
180
148
155
197
111
111
84
88
91
46
54
54
65
58
• 85
85
83
85
89
86
83
80
82
88
100
102
102
62
68
69
73
100
75
1960...
1961...
1961...
1963...
1964...
90
91
92
95
94
92
91
91
95
92
88
80
81
87
85
79
73
76
84
91
96
95
95
90
88
91
92
89
90
193
193
202
208
207
98
104
118
118
113
61
71
72
75
75
87
91
92
95
97
86
89
91
95
97
102
104
105
104
106
75
81
81
77
90
89
92
92
93
1965...
1966 ..
1967...
1968...
1969...
97
96
100
102
104
98
95
100
103
104
90
89
100
95
99
97
96
100
100
103
87
87
100
105
96
96
97
100
103
100
95
96
100
93
117
202
130
100
148
135
94
96
100
87
91
90
96
100
113
116
95
97
100
100
101
92
97
100
102
102
104
101
100
99
99
90
%
100
98
101
1970 P..
103
101
90
101
91
100
111
138
96
118
104
107
99
107
1929...
53
62
50
69
1930...
1931...
1932...
1933...
1934...
52
56
54
50
43
59
66
62
56
46
45
51
59
45
27
57
63
64
60
56
1935...
1936...
1937...
1938...
1939...
52
47
58
57
58
60
50
69
65
64
48
31
54
52
52
1940...
1941...
1942...
1943...
1944.;.
59
62
69
68
70
67
68
76
71
75
1945...
1946...
1947 ..
1948...
1949...
69
71
69
75
1950...
1951...
1952...
1953...
1954...
50
10,1
83
86
i 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.
a Includes production of seeds and of feed for horses and mules and certain items not shown separately.
• Includes certain items not shown separately.
Source: Department of Agriculture.
292
TABLE C-83.—Farm population, employment, and productivity, 1929-70
Farm population
(April l ) i
Year
Number
(thousands)
As percent of
total
population^
Farm employment
(thousands)1
Total
Family
Hired
workers workers
Farm output
Per
unit of
total
input
Per man-hour
Total
Crops
Livestock
and
products
Crop
production
per
acre*
Index, 1967=100
1929.
30,580
25.1
12,763
9,360
3,403
59
17
17
26
57
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
58
64
64
60
54
17
17
17
16
15
17
18
18
17
16
26
26
25
25
23
52
59
56
50
42
1935.
1936.
1937.
1938.
1939.
32,181
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
64
57
67
69
67
18
17
19
20
20
19
17
20
21
21
24
25
25
26
27
54
46
62
60
61
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
66
70
75
73
75
21
22
24
24
25
23
24
26
26
27
27
28
30
32
31
62
63
70
64
68
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
76
78
76
82
80
27
29
29
32
33
29
31
31
35
36
32
32
33
34
36
67
70
67
75
70
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
78
79
83
84
84
35
36
39
41
43
39
38
42
43
45
37
39
40
41
43
69
70
74
73
72
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
86
88
89
95
93
46
50
53
59
61
48
51
56
65
65
47
49
51
55
59
75
75
76
86
84
1960.
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
97
98
99
100
99
67
71
74
80
83
71
73
76
82
84
62
67
71'
77
83
89
92
94
97
94
1965.
1966.
1967.
1968.
1969
12,363
11,595
10.875
10,454
10,307
6.4
5.9
5.5
5.2
5.1
5,610
5,214
4,903
4,749
4,590
4,128
3,854
3,650
3,536
3,416
1,482
1,360
1,253
1,213
1,174
102
98
100
100
101
91
94
100
106
110
92
95
100
106
107
87
93
100
105
112
100
98
100
103
107
1970
9,700
4.7
4,486
3,319
1,167
99
112
107
118
103
* Farm population as defined by Department of Agriculture and Department of Commerce, i.e., civilian population
living on farms, regardless of occupation.
* Total population of United States as of July 1 including Armed Forces overseas.
* 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 C-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).
293
TABLE G-84.—Indexes of prices received and prices paid by farmers, and parity ratio, 1929—70
[1967 = 1001
Prices received by farmers
Livestock and products
Crops
Year or month
All
farm
prod-
Feed grains
and hay
All
Food
crops » grains
Cot- Toton bacco
Total
Feed
grains
Oilbearing
crops
All
livestock
and
prod-1
ucts
Meat
mals
Dairy Pouland
ucts eggs
68
71
79
31
52
57
46
54
122
53
32
25
37
51
55
61
68
42
41
61
43
28
33
55
61
59
72
41
41
63
41
25
33
56
64
63
78
42
41
54
34
26
36
53
51
52
49
37
39
25
18
15
19
28
31
29
36
31
27
40
26
16
21
37
46
43
47
34
35
48
35
26
25
29
41
43
45
40
39
40
27
19
18
20
34
35
39
34
33
46
36
97
74
61
56
67
88
87
84
83
73
47
55
68
84
94
97
114
153
141
123
126
137
138
132
131
129
126
127
117
114
115
118
128
126
107
93
104
100
91
87
92
49
53
66
87
99
96
116
147
148
102
49
54
67
90
101
97
122
158
157
101
114
136
139
122
120
107
107
97
90
91
87
87
89
94
95
100
104
100
90
94
101
43
58
82
87
90
94
125
143
142
129
148
176
162
140
144
142
140
138
132
140
133
137
142
142
137
128
113
100
100
91
96
86
87
91
92
89
94
24
28
45
57
63
65
68
67
68
72
104
105
106
106
109
111
111
109
108
109
111
112
44
55
70
85
87
92
104
122
127
111
103
117
118
106
107
102
104
99
99
98
99
100
103
106
106
103
105
100
101
97
100
96
98
100
99
100
100
98
96
93
95
98
95
37
50
66
73
80
83
94
132
127
88
100
123
107
101
110
90
93
88
82
79
77
93
90
94
93
96
106
100
96
91
96
93
94
94
95
96
95
39
50
62
71
71
76
87
104
114
98
101
121
110
97
90
84
82
88
99
93
91
91
92
89
85
94
105
100
104
117
118
109
109
112
112
116
119
120
119
119
119
121
124
113
114
114
111
111
111
113
109
111
108
106
104
96
98
98
97
103
103
104
100
104
101
102
100
32
43
55
60
57
62
74
98
107
93
101
122
105
86
84
73
70
82
100
93
88
89
92
86
80
95
106
100
103
119
120
104
108
112
115
125
129
126
125
122
120
118
122
125
130
132
128
124
125
126
120
116
113
105
102
1940
1941
1942
1943
1944
1945
1946
1947
1948
1949
1970
1969: Jan 15
Feb 15
Mar 15
Apr 15
May 15
June 15
July 15
Augl5
Sept 15
Oct 15
Nov 15
Dec 15
1970: Jan 15
Feb 15
Mar 15
Apr 15
May 15
June 15
July 15
Augl5
Sept 15
Oct 15
Nov 15
Dec 15
no
88
88
88
88
89
85
80
82
86
89
89
90
89
90
89
91
90
86
85
91
96
98
99
96
111
130
134
118
117
105
105
96
88
90
87
87
89
95
96
100
104
100
91
96
101
93
95
94
96
99
99
98
96
95
95
93
94
97
97
96
96
98
99
100
101
109
107
106
110
91
93
92
94
99
99
98
95
95
94
91
93
94
95
94
94
97
99
101
102
110
108
106
110
See footnotes at end of table.
294
96
91
86
96
94
88
84
90
92
94
98
99
100
100
97
101
98
93
73
79
78
78
80
79
81
84
87
91
90
95
96
89
88
92
99
100
102
107
109
104
105
105
105
105
105
107
109
111
110
108
109
108
109
109
109
109
109
109
110
110
106
109
110
95
90
85
85
87
88
90
91
91
93
93
96
99
97
99
103
104
103
125
126
125
121
117
117
119
115
116
113
110
108
39
46
53
65
73
75
88
89
98
82
81
94
99
87
80
81
com co
... .
39
49
63
76
78
81
93
109
113
98
102
119
113
100
97
91
91
92
98
95
94
94
96
96
93
98
105
100
103
108
37
41
43
38
36
OOOO 00
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
43
45
48
38
37
ooooc
66
55
38
29
31
40
48
50
54
43
42
CMCM C
65
to co in
58
49
34
CM CMC*!
1929
1930..
1931
1932
1933
1934. . .
1935
1936
1937
1938 . . . .
1939
84
85
85
83
83
84
85
96
100
104
108
112
109
108
106
104
102
101
104
106
112
115
116
116
115
112
110
109
108
106
108
111
114
117
120
119
74
92
115
145
134
150
152
169
183
167
141
172
156
167
135
145
133
122
129
108
121
111
110
111
108
110
122
100
108
123
115
127
119
121
114
104
107
123
118
125
123
141
152
149
137
129
111
101
100
112
104
116
103
110
112
TABLE C-84.—Indexes of prices received and prices paid byfarmers, andparity ratio, 1929-70—Con .
[1967=100]
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
1969
1970
1969: Jan 15...
Febl5...
Mar 15...
Apr 15...
May 15.June 15_.
July 15...
Augl5...
Sept 15 .
Oct15___
Novl5...
Dec 15...
1970: Jan 15...
Febl5...
Mar 15...
Apr 15..
May 15 .
June 15..
July 15..
Augl5__
Sept 15..
Oct 15 .
Novl5__
Dec 15..
'rices paid by farmers
All
Commodities and services
items,
inProduction items
terest,
taxes,
Family
and
All
All
Motor Farm
wage items living
maverates
items produc- Feed
tion
hicles chin(parity
items *
ery
index)
47
44
38
33
32
35
36
36
38
36
36
36
39
44
50
53
56
61
70
76
73
75
82
84
81
81
81
81
84
86
87
88
88
90
91
92
94
98
100
104
109
114
106
107
108
109
110
110
109
109
110
110
111
111
112
113
113
113
113
114
114
114
115
115
115
116
50
46
39
34
34
39
41
41
43
40
40
40
43
49
55
58
59
65
76
83
79
81
90
90
86
87
86
86
88
90
91
91
92
92
94
93
96
98
100
103
107
111
104
105
106
107
108
108
108
107
108
108
108
109
109
110
110
111
111
111
111
111
112
113
113
113
48
45
39
33
34
38
39
39
40
38
37
38
40
46
52
54
57
63
74
78
75
76
83
84
84
84
84
85
88
89
89
90
90
91
92
93
95
98
100
104
109
114
106
107
108
108
109
109
109
109
110
110
111
111
112
112
112
113
113
114
114
114
115
115
115
116
51
47
39
34
34
40
43
43
46
43
42
43
45
52
57
60
81
67
78
87
83
86
95
95
89
89
87
87
90
92
93
92
93
94
95
94
96
99
100
102
106
109
103
104
105
106
107
107
106
106
106
106
107
107
108
109
108
109
109
109
109
109
110
111
111
111
64
58
41
30
34
49
50
51
58
44
44
47
51
62
74
82
81
94
111
118
97
99
111
118
107
107
100
97
95
93
94
92
93
94
98
97
98
102
100
95
97
102
96
96
96
97
98
97
97
97
97
96
96
98
100
101
100
99
100
100
100
101
105
105
105
107
30
29
29
28
28
30
30
32
33
35
33
33
35
37
39
42
44
45
52
58
64
64
69
72
71
71
72
74
79
83
85
84
84
87
90
91
93
96
100
105
109
114
33
33
32
31
30
31
32
32
33
34
34
33
34
35
37
38
38
39
45
52
58
60
65
67
67
68
68
71
74
77
81
82
84
86
88
90
92
96
100
105
110
117
109
108
109
110
111
110
112
111
111
113
113
114
113
113
117"
114
119
118
118
"119
1
Inter- Taxess Wape
est 2
rates «
Parity
ralio •
Fertilizer
85
82
75
65
61
69
68
64
67
67
66
64
64
71
76
77
78
79
88
95
98
94
99
102
103
103
101
99
100
100
99
100
100
100
99
99
100
99
100
97
93
96
96
96
96
93
93
93
93
93
93
93
93
93
93
93
93
96
96
96
96
96
98
98
98
98
45
43
41
39
34
31
28
26
24
23
22
21
2i
20
18
17
16
15
16
16
17
19
21
23
24
26
28
32
35
38
42
46
51
56
63
71
80
90
100
110
119
129
119
119
119
119
119
119
119
119
119
119
119
119
129
129
129
129
129
129
129
129
129
129
129
129
31
32
31
29
25
21
20
20
20
21
21
21
21
21
21
21
22
24
27
31
34
36
38
39
41
43
45
49
52
56
60
65
70
74
77
80
85
92
100
111
122
131
122
122
122
122
122
122
122
122
122
122
122
122
131
131
131
131
131
131
131
131
131
131
131
131
22
21
16
12
10
12
13
13
15
15
15
15
18
23
31
38
42
46
49
52
51
50
55
59
61
60
61
63
66
68
72
74
76
78
80
82
86
93
100
108
119
128
114
114
114
121
121
121
119
119
119
123
123
123
124
124
124
129
129
129
127
127
127
131
131
131
92
83
67
58
64 (fifi)
75 [80)
88
9?
93 (97)
78 (83)
77 (85)
81 (88)
93 (98
105 109
113 116
108 110
109 111
113 115
115 116)
110 111)
100 100)
101 (102)
107 (108)
100 (101)
92 (93)
89 89)
84 85)
83 84)
82 85'
85 88
81 82)
80 (82)
79 (83)
80 (83)
78 (81)
76 (80)
77 (8?)
80 (86
74 (79
73 (79)
74 (80)
72 (77)
72 (78)
73 (78)
73 (79)
72 (78)
74 (80)
75 (81)
75 (81)
74 (80)
73 (79)
73 (79)
75 (81)
75 (81)
75 81)
75 81)
75 81)
72 78)
73 78)
72 (77)
74 (79)
71 (76
72 (77
70 (75
68 (73
67 (72
Includes items not shown separately.
Interest payable per acre on farm real estate debt.
3
Farm real estate taxes payable per acre (levied in preceding year).
* Monthly data are seasonally adjusted.
4
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.
Source: Department of Agriculture.
J
295
TABLE G-85.—Selected measures of farm resources and inputs, 1929-70
Index numbers of inputs (1967=100)
Crops
larvested
(millions
of
acres)l
Year
Manhours
of
farm
work
(billions)
Farm
real
estate >
Farm
labor
Total
Mechanical
power
and
machinery
Fertilizer
and
liming
materials
Feed,
seed, and
livestock
purchases 3
Miscellaneous
1929
365
23.2
90
319
85
34
10
19
60
1930
1931
1932
1933
1934
369
365
371
340
304
22.9
23.4
22.6
22.6
20.2
89
88
85
83
79
315
322
311
310
278
84
82
80
81
80
36
34
31
29
29
10
8
5
6
7
19
17
17
17
17
60
61
62
60
54
345
323
347
349
331
21.1
20.4
22.1
20.6
20.7
81
82
86
83
86
290
281
304
283
284
81
82
83
84
85
29
31
34
36
36
8
10
12
11
12
16
22
21
22
27
52
54
54
55
57
341
344
348
357
362
20.5
20.0
20.6
20.3
20.2
89
89
92
93
93
282
276
283
279
277
85
85
84
82
81
38
39
43
45
46
14
15
17
19
21
32
33
41
45
46
57
58
59
60
60
1945
1946
1947
1948
1949
354
352
355
356
360
18.8
18.1
17.2
16.8
16.2
91
91
91
92
93
259
249
237
232
223
81
84
85
88
88
48
52
57
64
71
22
26
28
28
30
52
50
53
52
50
60
61
61
58
65
1950
1951
1952
1953
1954
345
344
349
348
346
15.1
15.2
14.5
14.0
13.3
93
95
94
94
94
208
209
200
192
183
90
91
92
92
93
77
82
86
87
88
33
36
39
41
43
52
58
58
58
59
67
69
69
72
72
1955
1956
1957
1958
1959
340
324
324
324
324
12.8
12.0
11.1
10.5
10.3
94
93
91
91
94
176
165
152
145
142
93
92
93
93
93
88
88
89
88
90
44
45
46
48
54
62
65
67
73
76
74
77
75
79
83
1960
1961
1962
1963
1964
324
303
295
300
301
9.8
9.4
9.0
8.7
8.2
93
93
93
95
95
135
129
124
119
113
94
94
95
96
98
93
90
89
93
91
55
58
62
69
76
78
80
84
88
91
83
86
89
92
94
1965
1966
1967
1968
1969
298
295
308
303
294
7.8
7.4
7.3
7.0
6.9
95
98
100
102
103
107
102
100
96
94
98
99
100
99
99
94
98
100
102
103
80
90
100
105
107
91
98
100
103
106
94
97
100
102
106
1970 *____
297
6.7
104
92
98
104
114
111
106
1935
1936
1937.
1938
1939
1940
1941
1942
1943
1944
.
..
....
1 Acreage harvested (excluding duplication) plus acreages in fruits, tree nuts, and farm gardens.
2 Includes service buildings and improvements on land.
3 Nonfarm portion of feed, seed, and livestock purchases.
Source: Department of Agriculture.
296
TABLE C—86.—Comparative balance sheet of the farming sector, 1929-71
[Billions of dollars]
Asset
Claims
Other physical assets
Beginning of
year
MaHouseReal
chinhold
DeTotal estate
ery
equip- posits
Live2
and
ment
Crops
and
stock i motor
and
curvehiurnish- rency
cles
ings
1929
68.5
1930
1931
1932
1933
1934
Financial assets
1935
1936
1937.
1938
1939
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
22
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
32
ProReal Other prieInvest- Total estate
tors'
ment
U.S.
debt debt equisavings in coties
bonds operatives
9.8
2.5
40
36
0.6
68.5
9.6
9.4
9.1
8.5
77
5.0
53.9
7.6
7.4
7.2
70
6 8
1940
1941
1942
1943
1944
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
40
4.9
5.4
2.7
3.0
3.8
5.1
6.1
4.2
4.2
49
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. S
73.7
84.6
6.6
6.5
6.4
6.0
5.4
3.4
3.9
4.1
4.0
3.5
42.9
44.6
52 4
63.7
75.7
1945
1946
1947
1948
1949.
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
54
5.3
7.4
10.1
6.7
6.3
7.1
9.0
8.6
56
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
12
1 4
1.5
1.7
1.9
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
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
2.1
2.3
25
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
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
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
I960.
1961
1962
1963
1964
203.1
2G4.0
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
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
1965
1966
1967.
1968
1969
238.5
256.0
269.9
284.0
299.1
160.9
172 5
182.5
193.1
202.6
14.5
17.5
18.9
18.8
20.2
25.5
27.1
28.9
31.4
33.1
8.6
8.6
8.4
9.0
9.6
9.6
10.0
10.3
10.9
11.5
4.2
4.1
3.9
3.8
3.7
6.0
6.5
7.0
7.4
7.8
238.5
256.0
269.9
284.0
299.1
18.9
21.2
23.3
25.5
27.1
18.6
20.4
22.4
24.9
27.5
201.0
214.4
224.2
233.6
244.5
1970
311.4 208.9
23.5
34.3
9.2
9.7
10.0
9.6
10.6
10.8
10.1
11.9
3.7
8.2 311.4
28.4
29.7
253.3
1950
1951
1952
1953
1954
.
.
24.4
80.4
i Beginning with 1961, horses and mules are excluded.
s 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, 1971, totaled approximately $676 million.
Source: Department of Agriculture.
297
INTERNATIONAL STATISTICS
TABLE G-87.— U.S. balance of payments, 1946-70
[Millions of dollars]
Exports of goods and services
Year or
quarter
Total
Merchandise i
Military
sales
Imports of goods and services
Income on
investments
Other
services
Total
Private
Government
751
1,036
1,238
1,297
21
66
102
98
2,256 - 6 , 9 8 5
2,620 - 8 , 2 0 2
2,256 - 1 0 , 3 4 3
2,226 - 9 , 6 1 6
Balance
on
goods
and
services
Remittances
and
pensions
-1,425
-1,774
-1,987
-2,121
7,807
11,617
6,518
6,218
-648
-728
—631
—641
Merchandise i
Military
expenditures
Other
services
-5,067
-5,973
—7,557
—6, 874
—493
-455
—799
-621
1946
1947
1948
1949
14,792
19,819
16,861
15,834
11,764
16,097
13,265
12,213
<22)
( 2)
<2 )
()
1950
1951
1952
1953
1954
13, 893
18,864
18,122
17,078
17,889
10,203
14,243
13,449
12,412
12,929
8
%
1,484
1,684
1,624
1,658
182 1,955
109
198
204
252
272
2,097
2,739
2,845
2,564
2,551
- 1 2 , 001
-15,047
-15,766
—16, 546
—15,930
-9,081
—11,176
—10,838
-10,975
-10,353
-576
—1,270
-2,054
-2,615
-2,642
—2,344
—2,601
—2,874
-2,956
—2,935
1,892
3,817
2,356
532
1,959
-533
—480
-571
-644
-633
1955
1956
1957
1958
1959
19,948
23,772
26,653
23,217
23,652
14,424
17,556
19,562
16,414
16,458
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
—19,627
-20,752
-20,861
-23,342
—11,527
- 1 2 , 803
-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
2,153
4,145
5,901
2,356
310
-597
—690
-729
—745
—815
1960
1961
1962
1963
1964
27,488
28,770
30, 506
32,601
37,271
19,650
20,107
20, 779
22,252
25,478
335
402
656
657
747
3,000
3,561
3,948
4,151
4,930
348
381
471
498
456
4,155
4,318
4,651
5,043
5,659
-23,355
-23,148
-25,357
-26,617
-28,691
-14,744
- 1 4 , 519
-16,218
-17,011
—18,647
-3,087
-2,998
-3,105
-2,961
-2,880
- 5 , 523
-5,631
- 6 , 035
-6,647
-7,164
4,133
5,622
5,149
5,984
8,580
-596
-632
—695
-798
-809
1965
1966
1967
1968
1969
39,399
43,360
46,203
50,622
55,514
830 5,384
26,447
829 5,659
29,389
30,681 1,240 6,235
33,588 1,395 6,922
36,473 1,515 7,906
509
593
638
765
932
6,230
6,891
7,409
7,952
8,688
-32,278
- 3 8 , 060
-40,990
-48,129
- 5 3 , 564
-21,496
-25,463
-26,821
-32,964
-35,835
- 2 , 9 5 2 —7, 831
-3,764 -8,833
-4,378 -9,791
-4,535 -10,630
-4,850 -12,879
—950
7,121
-898
5,300
5,213 - 1 , 1 6 7
2,493 - 1 , 1 2 1
1,949 - 1 , 1 9 0
1970s
62,907 42,148 1,375 8,656
955 9,773 - 5 8 , 9 6 4
-39,409
- 4 , 863 - 1 4 , 6 9 2
3,943 - 1 , 3 9 7
Seasonally adjusted annual rates
-31,280 -4,412
-32,528 -4,448
- 3 4 , 2 7 6 - 4 , 588
-33,772 -4,692
-10,216
-10,352
-10,912
-11,032
1,820
3,412
3,404
1,360
-1,068
-1,028
-1,288
-1,104
-4,792
-4,748
- 4 , 880
-4,980
-11,376
-12,740
-13,704
-13,704
1,320
1,252
2,624
2,604
-1,080
-1,176
-1,272
-1,236
1968:
1
II
III..
IV....
47,728
b0,740
53,180
50,856
31,784
33, 544
35,512
33,512
1,208
1,376
1,572
1,428
6,236
7,136
7,160
7,164
824
824
840
576
7,676
7,860
8,096
8,176
-45,908
-47,328
-49,776
-49,496
1969:
1
II....
III...
IV....
47,792
57,164
58,260
58, 848
29,888
38,340
38,324
39,340
1,564
1,252
1,832
1,408
7,444
7,676
8,172
8,332
912
924
972
924
7,984
8,972
8,960
8,844
-46,472 -30,304
-55,912 -38,424
-55,636 -37,052
-56,244 -37,560
1970:
61,368 40,912 1,032 9,020
1
63,656 42,820 1,728 8,232
II
III*... 63,696 42,712 1,364 8.716
976 9,428 - 5 8 , 0 4 0 - 3 8 , 8 9 2 - 4 , 7 1 2 - 1 4 , 4 3 6
976 9,900 - 5 9 , 2 4 0 - 3 9 , 504 - 5 , 020 - 1 4 , 7 1 6
912 9,992 - 5 9 , 6 1 2 - 3 9 , 8 3 2 - 4 , 8 5 6 - 1 4 , 9 2 4
See footnotes at end of table.
298
3,328 - 1 , 3 1 2
4,416 - 1 , 4 4 0
4,084 - 1 , 4 4 0
TABLE C-87.—(7. S. balance of payments, 1946-70—Continued
[Millions of dollars]
Year or
quarter
U.S. private capital,
net
U.S.
Government
grants
and
Direct Other
capi- invest- long- Shortterm
tal,
ment
term
net*
Balance
Foreign
capital,
net*
Errors
and
unrecorded
Litransactions quidity
basis ^
Official
reserve
transactions
basiss
Changes in selected liabilities (decrease ( - ) ) *
Changes
in U.S.
official
To
reserve
other
assets
foreign (increase
Non- hold())
liquid ers'
To foreign
official holders8
Liquid
-623
3,315
-1736
-266
1946...
1947...
1948..
1949..
-5,293
-6,121
-4,918
-5,649
-230
-749
-721
-660
127
-49
-69
-80
-310
-189
-116
187
-615
-432
-361
44
155
861
1,115
717
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
-124
354
497
220
60
-1,206
-2,184
-1,541
1,758
-33
-415
1,256
480
1955...
1956...
1957...
1958...
1959...
-2,211
-2,362
-2,574
-2,587
•1,986
- 8 2 3 -241
-1,951 - 6 0 3
-2,442 -859
-1,181 -1,444
-1,372 -926
-191
-517
-276
-311
-77
297
615
545
186
736
371 -1,242
390
-973
1,012
578
361 -3,365
260 -3,870
182
-869
-1,165
2,292
1,035
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 - 5 4 6
-1,698 - 7 8 5
-2,103 -2,147
364 -1,156
702 -1,103
1,026 -1,246
690 - 5 0 9
689 -1,118
-3,403
-1,347
-2,702
-2,011
-1,564
ioi f 448
1068I
it>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..
1968..
1969..
1970 3.
-3,406
-3,444
-4,223
-3,975
-3,828
-3,119
-3,468
-3,661
-3,137
-3,209
-3,070
-4, 805
-1,079
753
-256 - 4 1 5
-1,292 -1,209
-1,116 -1,087
-1,588 - 5 7 5
-1,427 -297
270 - 5 7 6 - 1 , 3 3 5 - 1 , 2 8 9
2,531 -514 -1,357
266
3,360 -1,088 - 3 , 544 -3,418
8,701 -514
171
1,641
4,131 -2,841 - 7 , 0 1 2
2,700
3,859 -2,04011n-4,415 ii-8,667
-18
-1,595
2,020
-3,101
-517
85
761
1,346
2,340
-996
131
2,384
1,472
3,810
8,716
1,222
568
52
-880
-1,187
-3,489
-3,901
-2,371
-2,204
-2,670
-2,800
Quarterly totals unadjusted
Seasonally adjusted annual rates
-976
424
580
656
-244
6,608
1,632
-1,432
1,358
2,190
-38
485
721
363
777 2,222
537 1,031
663 -164
904
-137
-571
-1,076
7,096 -4,784 -5,408
1,652 -3,688 -15,204
1,244 -3,708 -9,116
6,540
816
1,680
5,812
5,260
-2,328
2,056
1,708
-538
2,235
-506
45 3,024
-367 4,653
-509 1,423
-165 -384
-48
-299
-686
-154
2,254 -728 n-5,756 n-11,572
5,280 -3,680 "-4,936 ii-7,108
4,044 - 1- 1, 7, "1"2 " -2,552 ii-7,320
2,762
526
2,046
-413 -1,695
513 -122
-236 -1,186
-386
1,022
801
1968: I. „
II...
III..
IV...
-4,340
-4,240
-3,852
-3,468
-1,804 - 5 2 0 -412 6,672 -1,316
-3,512 -616 -1,588 10,124 -2,112
-4,192 -876 -1,272 7,308 1,340
-3,324 -2,456 -1,076 10,696
32
1969: L . . .
II...
III..
IV...
-3,108
-4,636
-4,088
-3,480
-3,1 _
- 4 , 060
- 3 , 508
-1,104
-1,072 -172
-2,352 -2,192
-1,796 1,384
-1,132 -1,320
828
1970: L . . . -3,420 -5,644 -1,936
460 -2,204
II . -2,900 -5,736
484
III*. -3, 036 - 3 , 036 -2, 804
» Adjusted from customs data for differences in timing and coverage.
* Not reported separately.
Average of the first 3 quarters on a seasonally adjusted annual rates basis.
* Includes certain special Government transactions.
» Equals changes in liquid liabilities to foreign official holders, changes in liabilities to other foreign holders, and changes
in official reserve assets consisting of gold, Special Drawing Rights, 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, Special Drawing Rights, convertible currencies, and the U.S. gold tranche position in the IMF.
7
Includes short-term official and banking liabilities, foreign holdings of U.S. Government bonds and notes, and certain
nonliquid liabilities to foreign official holders.
s 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.
io Includes change in Treasury liabilities to certain foreign military agencies; excluding these changes, data ($ millions)
are 1,258 (1960), 741 (1961), 918 (1962).
II
Includes allocation of Special Drawing Rights.
I
Note.—Data exclude military grant-aid and U.S. subscriptions to International Monetary Fund.
Source: Department of Commerce, Office of Business Economics.
299
TABLE C-88.—U.S. merchandise exports and imports; by commodity groups, 1958-70
[Millions of dollars]
Merchandise exports *
Total, including reexports 2
Year or quarter
Merchandise imports
General imports9
Domestic exports
Total 3
Food, Crude ManFood, Crude
Seabever- mate- Manbever- mate- ufacufacsonally Unadages,
rials
rials
Seaages,
Total
2«
adtured sonally Unad- and totured
justed
and
and to- and
5
justed
goods 5
adjusted bacco fuels < goods
bacco fuels «
justed
Gross
merchandise
trade
surplus,
seasonally
adjusted 1
1953
1959 .
16,375 16,211
16,426 16,243
2,638
2,852
3,052 11,547
2,996 11,179
13,392
15,690
3,550
3,580
4,164
4,615
5,311
7.117
2,983
1960
1961
1962
1963
1964
19,659
20,226
20,986
22,467
25,832
19,459
19,982
20,717
22,182
25,479
3,lfi7
3,466
3,743
4,188
4,637
3,942
3,884
3,356
3,775
4,337
12,583
12,784
13,668
14,297
16, 529
15,073
14,761
16,464
17,207
18,749
3,392
3,455
3,674
3,883
4,022
4,418
4,334
4,691
4,755
5,029
6,863
6,537
7,649
8,070
9,106
4,586
5,465
4,522
5,260
7,083
1965
1966
1967. .
1968
1969
26,751 26,408
29,490 29,054
31,030 30,646
34 063 33 626
37,332 36,788
4,520
5,186
4,710
4 592
4,446
4,275
4,404
4,726
4,865
5,006
17,439
19,218
20,844
23 818
26,785
21,429
25,618
26,889
33,226
36,043
4,013
4,590
4,701
5,365
5,308
5,440
5,718
5,367
6,031
6,391
11,245
14,446
15,756
20,624
23,011
5,322
3,872
4,141
1970
42,662 42, 028
5,051
5,696 29,340
39,963
6,234
6,553 25,903
2,699
7,922
8,596
8,317
8,792
1.195
090
,122
,185
1,1*0
1,217
1,174
1,293
5,465
6 182
7,887
8,151
8,548
8,527
7,764
8,256
3,457
8,750
1,257
1,308
1,430
1,369
1,443
1,463
1,570
1,555
7,604 7,585 7,468
9,860 10,151 10,010
9,862 9,257 9,118
9,966 10,333 10,192
699
,757
, 148
1,342
877
6,598
7,129
7,643
9,635
9,297
9,438
7,410
9,781
9,191
9,652
1,013
1,478
1,331
1,487
1.476
640
583
1,692
4,647
1,388
1,234
1,507
5,791
7,266
6,324
5,927
6,113
-39
225
564
528
10,195 10,061
11,221 11,057
10,150 9,987
11, 096 10,923
117
144
757
1,532
1,489
1,728
1,608
1,870
7,247 9,716 9,453
7,931 9,918 10,071
6,872 10,003 9,879
7,289 10, 311 10, 560
1,513
1,580
1,500
1,641
1,669
,602
,619
1,663
5,994
6,574
6,422
6,912
584
997
816
376
II
II!
8,028
8 465
9,019
IV.
. . . 8,581
1968: 1
1969* 1
II
III
IV
1970: 1
II
III
IV...
10, 300
10,915
10,819
. . 10,687
8,022
8,704
8,425
8,911
5,955
6,217
4,804
5,180
5,142
5,499
73S
837
1, 289
161
314
471
54
» Beginning I960, data have been adjusted for comparability with the revised commodity classifications effective in 1965.
2Totals exclude Department of Defense shipments of grant-aid military supplies and equipment under the Military
Assistance Program.
3Total includes commodities and transactions not classified according to kind.
* Includes fats and oils.
8
Includes machinery, transportation equipment, chemicals, metals, and other manufactures. Export data for these items
include military grant-aid shipments.
•7 Total arrivals of imported goods other than intransit shipments.
Exports, excluding military grant-aid, less generai imports; quarterly data seasonally adjusted.
Note.—Data are as reported by the Bureau of the Census adjusted to include silver ore and bullion reported separately
prior to 1969. 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. Import 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.
300
TABLE G-89.—US. merchandise exports and imports, by area, 1964-70
[Millions of dollars]
Area
Exports (including reexports and special category
sh ipments): Total
Developed countries...
Developing countries
.
Canada
Other Western Hemisphere._.
Western Europe 1
Eastern Europe
Asia
Australia and Oceania
Africa _
General imports: Total
Developed countries..
Developing countries.._
Canada
Other Western HemisphereWestern Europe!. _
..
Eastern Europe
Asia
Australia and Oceania
Africa
Unidentified countries 2 .
-
._
1968
1969
31,622
34,636
38,006
43,226
20,120
10,112
21,467
9,960
23,600
10,821
26,479
11,277
29, 884
12, 989
5,658
4,275
9,257
140
6,015
956
1,229
6,679
4,769
9,891
198
6,740
805
1,348
7,172
4,718
10,187
195
7,150
1,018
1,182
8,072
5,339
11,132
215
7,582
1,026
1,269
9,137
5,576
12, 392
249
8,261
998
1,392
9,084
6,534
14,465
353
10,023
1,188
1,579
18,749
21,429
25,618
26,889
33,226
36,043
39,963
11,924
. 6,711
14,101
7,174
17,632
7,795
18,993
7,709
24,130
8,886
26,460
9,373
29,262
10,450
4,265
4,185
5,209
99
3,620
442
917
12
4,858
4,399
6,155
137
4,528
455
883
14
6,152
4,737
7,679
179
5,277
596
992
6
7,140
4,662
8,052
177
5,349
583
920
6
9,005
5,143
10,139
198
6,911
697
1,122
11
10, 384
5,163
10.138
195
8,275
828
1,046
12
11,091
5,840
11,175
226
9,626
871
1,111
24
1964
1965
1966
1967
26,650
27,530
30,430
17,343
8,967
18, 366
9,023
4,921
4,293
9,222
340
5,811
804
1,259
1970
1 Includes Finland, Yugoslavia, Greece, and Turkey.
2 Consists of certain low-valued shipments 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.
301
TABLE C-90.—U.S. overseas loans and grants, by type and area,fiscalyears; 1962-70
[Millions of dollars]
Type of program and fiscal
period
Total
Near
East
and
South
Asia
Latin
America
Vietnam
East
Asia
Africa
Europe
Other
and
nonregional
Total economic loans and grants
(net obligations and loan
authorizations): l
1962-69 average...
Loans
Grants
4,604
2,435
2,169
1,425
1,071
354
1,164
740
424
359
0
359
539
222
316
376
166
210
238
200
38
503
35
468
1970
4,716
2,611
2,105
914
745
169
1,048
511
537
420
76
344
846
633
213
294
118
177
454
447
7
740
82
658
1962-69 average
1970
4,413
4,103
1,425
914
1,164
1,048
359
420
473
676
376
294
138
69
478
682
Repayments and interest:
1962-69 average
1970
764
1,205
279
438
306
454
10
5
57
95
34
82
73
127
6
4
2,140
1,665
664
330
516
378
278
304
223
180
184
139
1
274
334
217
305
120
173
27
54
9
5
23
26
19
28
17
18
2
0
416
615
90
122
206
186
28
187
32
27
60
69
23
403
628
78
126
254
345
26
41
12
41
33
76
1,343
1,159
660
452
152
153
81
115
189
281
137
108
76
120
235
76
137
12
25
0
6
26
3
13
23
34
Loans
Grants
Economic loans and grants to
less developed countries, by
program^
Net obligations and loan
authorizations:
Agency for International
Development:
Net obligations and loan
authorizations:
1962-69 average
1970
Repayments and interest:
1962-69 average
1970
...
Export-Import Bank long-term
loans:
Loan authorizations:
1962-69 average
1970
Repayments and interest:
1962-69 average
1970
Food for Peace:
Obligations:
1962-69 average
1970
...
Repayments and interest:
1962-69 average
1970
....
Contributions and Subscriptions
to International Lending Organizations:3
Obligations:
1962-69 average
1970
Peace Corps and other:
294
480
196
300
49
50
97
180
4
Obligations:
1962-69 average
1970
Repayments and interest:
1962-69 average
1970
....
220
184
13
9
94
32
33
29
22
20
24
36
5
2
12
29
2
1
1
0
57
94
3
4
iSome data are preliminary.
2 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.
* Data for certain programs from Department of Commerce (Office of Business Economics).
Source: Agency for International Development (except as noted).
302
TABLE C-91.—International reserves, 1949, 1953, and 1965-70
[Millions of dollars; end of period]
1970
Area and country
1949
1953
1965
1966
1967
1968
1969
September
December
All countries
45, 635
51, 780
70, 830
72,420
74,140
77, 005
77, 735
86,885
Developed areas
37, 245
41,375
59, 511 60,306
61,136
62, 893
62,179
68, 867
26, 024
23, 458
15, 450
14, 881
14, 830
15,710
16, 964
15, 527
14,487
United Kingdom
1,752
2,670
3,004
3,100
2,695
2,422
2,527
2,666
2,827
Other Western Europe
Austria
Belgium
France
Germany
Italy
Netherlands
Scandinavian countries (Denmark,
Finland, Norway,
and Sweden)
Spain
Switzerland ._ _.
Others
6,455
92
10, 500
325
1,144
829
1,773
768
1,232
33,694
1,311
2,334
6,343
7,431
4,800
2,416
35, 091
1,333
2,350
6,733
8,029
4,910
2,448
36, 588 35,819
1,484
1,510
2,590
2,187
6,994
4,201
8,153
9,948
5,463
5,342
2,619
2,463
33,157
1,537
2,388
3,833
7,129
5,013
2,529
39,206
1,672
2,790
4,743
11,301
4,519
2,987
1,757
2,847
4,960
13,610
5,299
3,234
1,026
150
1,768
2,324
1,422
3,244
2,069
2,341
1,253
3,324
2,370
2,236
1,100
3,555
2,394
2,320
1,150
3,932
2,766
2,213
1,281
3,995
3,239
2,197
1,591
4,080
3,326
2,533
1,817
4,701
Canada
1,197
3,037
2,702
2,717
3,046
3,106
4,553
4,679
2,152
2,119
2,030
2,906
3,654
3,996
4,839
2,826
United States
Japan
Australia, New Zealand,
and South Africa
978
580
196
537
0)
1,692
1,222
0)
1,484
1,902
892
1,587
1,953
2,174
2,413
2,276
2,990
2,771
3,027 !
Less developed areas3
8,390
10,405
11,320
12,115
13,000
14,110
15,535
17,885 |.
Latin America
Middle East
Other Asia
Other Africa
2,775
1,475
3,395
«290
3,400
1,200
3,840
1,800
3,245
2,735
3,425
1,860
3,175
2,910
3,875
2,100
3,450
3,295
4,080
2,115
3,935
3,310
4,215
2,480
4,495
3,035
4,815
3,065
5,445 i
3,005 I
5,155 !
4,145
1 Not available separately.
2 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."
303
TABLE C-92.—U.S. reserve assets, 1946-70
[Millions of dollars]
Gold stock i
End of year or
month
Total reserve
assets
Total 2
1946
1947
1948
1949
1950
1951
1952.
1953
1954
.
1955
1956
1957
1958
1959
. . .
1960.
1961
1962
1963
1964 .
1965
1966
1967
1968
1969.
.
.
Treasury
Special
drawing
rights 3
Convertible
foreign
currencies 4
Reserve
position in
International
Monetary Fund 5
20,706
24,021
25,758
26, 024
20,706
22,86a
24,399
24, 563
20,529
22,754
24,244
24,427
1 153
1 359
1 461
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
432
15,450
14,882
14,830
15,710
716,964
s 13,806
13,235
12,065
10,892
11,859
13,733
13,159
11,982
10,367
10, 367
781
1,321
2,345
3,528
7 2,781
6
116
99
212
851
1,555
1,690
1 064
1 035
769
6 863
326
420
1,290
2,324
1970
14,487
11,072
10,732
629
1,935
1969:Jan
Feb
15,454
15,499
15,758
15,948
16,070
16,057
10,828
10,801
10,836
10,936
11,153
11,153
10,367
10,367
10,367
10,367
10,367
10, 367
3,338
3,399
3,601
3,624
3,474
3,355
1,288
1,299
1,321
1,388
1,443
1,549
15,936
16,195
16, 743
716,316
16, 000
16,964
11,144
11,154
11 164
11,190
11 171
11,859
10, 367
10,367
10,367
10,367
10, 367
10,367
3,166
3,399
3 797
7 3,341
2 865
2,781
1,626
1,642
1 782
1,785
1 964
2,324
17,396
17,670
17,350
16,919
16,165
16,328
11,882
11,906
11,903
11,902
11,900
11,889
11,367
11,367
11,367
11,367
11,367
11,367
899
919
920
926
925
957
2,294
2,338
1,950
1,581
980
1,132
2,321
2,507
2,577
2,510
2,360
2,350
16,065
15,796
15,527
15,120
14,891
14,487
11,934
11,817
11,494
11,495
11,478
11,072
11,367
11,367
11,117
11,117
11,117
10,732
961
961
991
991
961
851
716
695
1,098
811
640
629
2,454
2,323
1,944
1,823
1,812
1,935
Mar
Apr
May
June .
July
Aug
Sept
Oct
Nov
Dec
1970: Jan.
Feb
.
Mar
Apr
May
June
July
Aug
Sept
- .
Oct
Nov
Dec
1
Includes gold sold to the United States by the International Monetary Fund with the right of repurchase which
amounted to $400 million on December 31, 1970. 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 $166 million on December 31, 1970. The United States has a corresponding gold liability
to the IMF.
2
Includes gold in Exchange Stabilization Fund.
3 Includes initial allocation by the IMF of $867 million of Special Drawing Rights on January 1,1970, plus net transactions
of SDR's since that time.
4
Includes holdings of Treasury and Federal Reserve System.
5
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.
6
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.
7 I ncludes gain of $67 million resulting from revaluation of German mark in October 1969, of which $13 million represents
gain on mark holdings at time of revaluation.
Note.—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.
3°4
TABLE C-93.—Price changes in international trade, 1962-70
[1963 = 100]
1970
Area or commodity class
1962
1963
1964
1965
1966
1967
1968
1969
Third
quarter
Unit value indexes by area
Developed areas
Total:
Exports
Terms of trade i_
104
101
108
101
113
101
102
111
103
115
103
122
99
104
101
103
100
103
101
106
102
109
101
107
102
108
105
106
102
107
102
110
101
3 116
3 102
101
99
101
100
99
99
97
100
103
104
3 105
3 104
99
100
100
100
102
100
103
100
105
100
100
101
100
100
101
99
104
101
107
101
100
100
103
101
103
99
100
100
107
105
100
100
100
99
105
101
United S t a t e s 2 :
Exports
Terms of t r a d e r -
no
Developing areas
Total:
Exports
Terms of trade i
Latin America:
Exports
Terms of trade i
Southern and Eastern Asia 4 :
Exports
Terms of trade *
100
102
World export price indexes »
96
100
103
103
104
101
100
104
107
94
100
105
103
105
104
102
106
112
Coffee, tea, and cocoa..
Cereals
96
99
100
100
121
103
111
99
113
104
111
106
111
102
120
102
142
99
Other agricultural commodities«
97
100
102
103
104
96
96
101
99
Fats, oils, and oilseeds..
Textile fibers
Wool
Rubber
94
91
84
107
100
100
100
100
104
102
103
95
114
92
86
97
111
92
90
91
102
88
77
75
100
88
74
73
101
85
73
99
110
83
65
79
Minerals
Metal ores..
99
100
100
100
102
108
104
114
104
105
103
109
102
108
104
114
107
120
Manufactured goods: Total 5 __.
99
100
101
103
106
107
106
110
117
Nonferrous base metals 5_.
100
100
119
135
156
142
150
168
168
Primary commodities: Total.
Foodstuffs
1 Terms of trade indexes are unit value indexes of exports divided by unit value indexes of imports.
Includes foreign trade of Alaska, Hawaii, and Puerto Rico.
Data are for second quarter 1970.
< Excludes Japan.
5
Data for manufactured goods are unit value indexes.
6
Includes nonfood fish and forest products.
2
3
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).
3°5
TABLE G—94.—Consumer price indexes in the United States and other major industrial countries*
1957-70
[1963 = 100]
United
States
Period
Canada
Japan
France
Germany
Italy
Netherlands
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
I960
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
1965
1966
1967
1963
1989
103.0
106.0
109.0
113.6
119.7
104.3
108,2
112.0
116 7
122.0
110.7
116.4
121.0
127.5
134.1
106.0
108.9
111.8
116 9
124.4
105.8
109.5
111.1
113 1
116.1
110.7
113.3
116.9
118.5
121.6
111.0
117.4
121.4
125.9
135.3
103.2
112.4
115.2
120 6
127.2
1970i
126.5
126. 0
143.5
130.5
120.2
126.9
140.7
134.5
1968- 1
||
III
IV
111.6
112.8
114.2
115.6
115 0
116.0
117.3
118.5
126.2
126.4
127.4
129.8
115 1
115.8
117.2
119.6
112,8
113.0
112. S
113.8
118.2
118.5
118.3
113.8
124.3
125.5
126.2
127.7
117 8
120.6
121.3
122.7
116.9
119.0
120.7
122.3
119.4
121.6
123.0
123.8
130.4
132.8
135.8
137.5
121.6
123.2
124.6
126.5
115.4
115.9
116.0
117.0
119.7
120.9
122.3
123,5
133.6
135.7
135.3
136.5
125.2
127.2
127.4
129.0
124.2
126.2
127.6
129.0
125.0
126.1
126.7
126.6
141.1
142.9
144.6
149.4
128.5
130.3
131.9
132.8
119.4
120.4
120.6
121.2
125.4
127.1
128.1
128.7
138.2
140.4
142.5
144.2
131.5
134.6
136.1
138.0
1969: 1
H
III
IV
1970: 1
II
lit
IV2
.-
..
1 For United States, January-November average; for all other countries, January-October average, except Italy,
January-September average.
2 October-November average for United States; October data for all other countries, except September data for Italy.
Sources: Department of Labor and Organization for Economic Cooperation and Development.
306
U.S. GOVERNMENT PRINTING OFFICE:I97l
O—411-364
@FedFRASER