Full text of Economic Report of the President : 1971
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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