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April 1954
Irrigating Agricultuml Land
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page
Rolling Adjustment in Bonk Credit
Unemployment Rise General
Current Charts and Statistics
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3
page 10
. page 14
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FEDERAL RESERVE BANK
0} KANSAS CITY
1
Subscriptions to the Monthly Review are
available to the public without charge.
Additional copies of any issue may be obtained from the Research Department, Federal Reserve Bank of Kansas City, Kansas
City 6, Missouri. Permission is granted to
reproduce any material in this publication.
Irrigating Agricultural _,
.
-..
of the West, irrigation has long been used in agricultural production. Rec ntly, it has hccom more important in the semiarid and suhhurnid sections. Although not used for a large percentage of agricultural production, it has become
increasingly important in the Tenth Federal
Reserve District.
Table 1 shows the state-by-state change
in irrigated acreage in the Tenth District between 1939 and 1949. Oklahoma had the sharpest increase in irrigated acreage during the
10-year period. Missouri also showed a considerable increase. Both Oklahoma and Missouri, however, started from a relatively small
base, and, although the percentage increase
was considerable, the absolute increase was
not large. Colorado experienced the greatest
absolute increase in irrigated acreage, al-
-
IN THE ARID SECTIONS
Tobie 1. Trends In Irrigated Acreage
Per Cent
Change
Area
Colorado
Kansas
Missouri
Nebraska
New Mexico
Oklahoma
Wyoming
Tenth District
United States
1939
1944
1949*
2,467,548 2,698,579 2,872,348
82,872
96,248
138,686
960
1,113
2,089
473,775
631,762
876,259
436,402
534,640
655,287
4,437
2,237
34,071
1,284,027 1,353,873 1,431,767
4,750,021 5,318,452 6,010,507
17,982,830 20,539,470 25,787,455
1939-49
16.4
67.3
117.6
85.0
50.2
667.9
11.5
26.5
43.4
*The 1949 irrigated acreage does not check with that of T(!ble 2
because the data in Table 2 were comp!led on a county bas_1s an_d
there is duplication. The acreage of inter-county enterprises 1s
reported for all counties the enterprise serves.
SOURCE: Census of Agriculture, Volume Ill, 19S0.
though her percentage increase was only 16.4
per cent. Nebraska also had a substantial increase in irrigated acreage during the period.
Additional information relating to irrigation
in the Tenth District is presented in Table 2.
This table indicates the distribution of irrigation enterprises and acreage by states. As used
here, an irrigation enterprise is any operation
that supplies water for irrigation purposes.
As such, irrigation enterprises range all the
way from single-farm operations, which provide water for the individual farm and are
operated by the individual farm operator, to
city, state, and federally operated projects,
which may provide irrigation services for
hundreds of farmers.
Almost 50 per cent of the irrigation enterprises in the Tenth District and slightly more
than 50 per cent of the irrigated acreage are
located in Colorado. Nebraska ranks second in
number of enterprises but is replaced by
Wyoming in total acres irrigated. This indicates that the vast majority of enterprises in
Nebraska are one-farm operations, while in
Wyoming the tendency is toward the larger
type of irrigation enterprise.
3
■
Irrigating
Table 2. Irrigation Enterprises and
Acreage, 1949
State
Colorado
Kansas
Nebraska
New Mexico*
Oklahoma*
Wyoming
10th Dist. (exeluding Mo.)*
Per Cent of
Irrigated
Per Cent of
Number of Enterprises Acreage Acreage in
Enterprises in District Irrigated District
9,158
962
5,583
825
163
3,104
46.3
4.8
28.2
4.2
0.8
15.7
2,943,895
140,992
887,239
218,049
44,141
1,474,835
51.6
2.5
15.5
3.8
0.8
25.8
19,795
100.0
5,709,151
100.0
• Missouri is not included in this and subsequent tables, since data
for those counties in the Tenth District are not available. Only
Tenth District parts ot Hew Mexico and Oklahoma have been
included.
SOURCE: Census of Agriculturo, Volume Ill, 1950.
These conclusions arc confirmed by examining the prevalence of various types of irrigation enterprises. In Nebraska and Kansas,
approximately 99 per cent of the enterprises
are single-farm operations, while Wyoming
has only 78 per cent of this type. In terms of
acreage irrigated, single-farm enterprises account for 44 per cent of Nebraska's and 45 percent of Wyoming's irrigated lands.
These data illustrate the fact that, although
most of the land in the Tenth District is not
irrigated, the practice is growing in importance. Some of the characteristics of this
Table 3. Sources of Irrigation Water, 1949
Enterprises
Reporting
Irrigated
Acreage
Comb.
Comb.
State
Surface
Surface
and
and
Surface Ground Ground Surface Ground Ground
Water
Water Water Water
Water Water
Colorado
Kansas
Nebraska
New Mexico*
Oklahoma*
Wyoming
10th Dist. (ex
eluding Mo.)
64.0
12.0
12.0
90.1
31.5
95.2
31.7
80.6
83.5
8.5
63.5
3.5
4.3
52.4
43.6
Per Cent
*Tenth District portion only.
Per Cent
7.4
59.6
37.1
2.4
7.5
2.5
1.5
1.0
1.3
90.2
32.9
60.4
97.5
78.8
98.7
19.9
0.6
0.7
4.0
86.7
11.2
2.1
7.4
4 .5
1.4
5.0
SOURCE: Census of Agriculture, Volume Ill, 1950.
4
1.3
technique, which is new to many communities
and individuals, are discussed in the material
that follows.
Sources of Irrigation Water
Sources of irrigation water are grouped into
two classifications-surface water, such as
lakes, rivers, streams, and flowing wells, and
ground water obtained from pumped wells.
In the Tenth District, 52.4 per cent of the enterprises reporting in the 1950 census listed
surface waters as their only source of irrigation water. Ground water was utilize<l by 43.6
per cent, ancl 4 per cent used some combination of ground an<l surface water.
Surface waters were used on 86. 7 per cent
of the irrigated land in the Tenth District,
while ground water irrigated 11.2 per cent.
The remaining 2.1 per cent, or 128,655 acres,
used a combination of the two classes of
water. Kansas was the only state where
ground water was used to irrigate more acreage than surface water. The importance of
combinations of surface and ground water,
both for enterprises reporting and for acreage
irrigated, was not great in any of the states.
This suggests the conchision that ground
water is used predominantly by single-farm
enterprises, while surface waters probably
are used by most multi-farm operations. This
is particularly true in Nebraska, where 83.5
per cent of the enterprises used ground water,
but represented only 37.1 per cent of the total
acreage. This also is the case in Oklahoma
and, to a lesser degree, in all District states.
Origin of Surface Water
As previously indicated, surface waters supply more than half of the irrigation enterprises in the Tenth Disfrict and better than
80 per cent of the irrigated acreage. The most
important single source of irrigation water is
the lakes and sb·eams of the region. Of the
Agricultural Land
Table 4. Origins of Surface Water For
Irrigation, 1949
Per Cent of Enterprises Reporting
State
Colorado
Kansas
Nebraska
New Mexico*
Oklahoma*
Wyoming
10th Dist. (ex
eluding Mo.)
Lakes &
Streams
Springs
84.2
94.3
86.8
91.0
89.7
90.9
5.6
2.6
2.0
7.5
1.7
5.3
86.8
5.3
Flowing Drainage
Wells
Water Sewage
6.6
3.5
1.6
1.7
1.0
4.5
0.6
8.6
2.0
3.0
4.7
6.4
0.8
-
0.1
0.5
0.2
0.1
0.1
0.1
Per Cent of Acres Irrigated
State
Colorado
Kansas
Nebraska
New Mexico*
Oklahoma*
Wyoming
10t·h Dist. (exeluding Mo.)
Lakes &
Streams
Springs
84.4
95.4
96.3
96.7
99.6
93.0
1.6
0.5
0.2
2.9
0.2
3.6
2 .3
0.8
0.8
0.1
88.5
2.0
Flowing Drainage
Wells
Water Sewage
**
0.1
**
0.1
1.2
11.7
3.2
2.7
0.3
0.1
2.1
0.1
1.8
7.7
**
-
-
*Tenth District portion only.
**less than .05%.
SOURCE: Census of Agriculture, Volume Ill, 1950.
enterprises reporting surface water as the
primary water source in their operations, 86.8
per cent drew their supply from lakes and
streams. In a11 states of the District, the importance of this source was paramount. In
Colorado, where fewer enterprises relied upon
this source than in other states, 84.2 per cent
reported lakes and streams as their main
source of water.
If importance is measured by the number of
acres irrigated from each surface source, lakes
and streams again predominate, ranging from
99.6 per cent of the irrigated acreage in Oklahoma to 84.4 per cent in Colorado and averaging 88.5 per cent for the District as a whole.
In Colorado, the only state where irrigation
from lakes and streams accounted for less than
90 per cent of the irrigated acreage, drainage
water ranked second with 11.7 per cent. This
source supplied 7.7 per cent of the irrigated
land for the District as a whole.
Ground Water
The ultimate determinant of water resources, both ground and surface, is precipitation. Man's control over precipitation is
necessarily limited both as to quantity available and time of availability. In order to insure an adequate supply of water at all times,
he must resort to measures which will afford
him the greatest opportunity of full utilization,
including storage of water which does become
available. This is accomplished to varying degrees by attempting to decrease the amount
of run-off and regulating the rapidity with
which run-off moves heyot1cl control. These
efforts are more disccrnablc as they affect
sources of surface water Lhrough flood-water
impoundment, channel stabilization, and
various soil conservation practices such as
terracing and strip-cropping.
Large areas of the Tenth District will benefit only indirectly by such surface water control methods, since they are wholly lacking or
are inadequately provided with suitable surface waters for future irrigation development.
The future of irrigation in these areas lies in
developing ground water economically and
wisely.
Ground water, contrary to what many people believe, is not an exhaustible resource in
the sense that coal or oil are exhaustible.
Ground water is water in storage during its
journey through the hydrological cycle. It
is being replenished constantly through precipitation and, although there are periodsparticularly during droughts - when withdrawals from ground water exceed additions,
such decreases usually are temporary and are
recovered during periods of above normal
rainfall.
Figures 1 and 2 illustrate the effect that
variation in precipitation has had on two wells
in Kansas during the last 12 years. The relationship between water levels and precipita-
5
Irrigating
Figure 1. Depth to Water Table, Valley
Center, Kansas, Well and Index of
Precipitation, Wichita, Kansas
lndex = 5-month moving average.
SOURCE: U. S. Weather Bureau and U. S. Geological Survey.
tion is noticeably greater in Figure 1 than it
is in Figure 2. This is due to the relative shallowness of the Valley Center well, which
varies from 13 to 22 feet during the period
measured, compared with 84 to 89 feet in the
Grant County well.
In addition to precipitation, other factors
influence the development of irrigation from
ground water. One is the depth of the water
table below ground level. This varies from one
locality to another because of differences in
geological formations underlying the areas.
In some areas, ground water is lacking entirely
or is insufficient to carry on irrigation. Also,
the soils and terrain are not suitable for irrigation in some areas.
In general, within the above limitations, the
outlook for increasing irrigation with ground
water in the Tenth District is favorable. An
overdevelopment of ground water resources
during periods of above normal precipitation
may lead to shortages during an extended
period of subnormal precipitation. However,
irrigation development in the District generally has not progressed to the stage where concern on this point is justified.
6
Capital Requirements
The capital requirements of an irrigation
system for a particular farm will depend upon
the kind of irrigation system ( sprinkler or
gravity), the source of water, the acreage to
be irrigated, and the topography. Consequently, it will not be possible in this article
to present capital requirements data that will
apply to all farms in the Tenth District with
an irrigation potential. Instead, an effort will
be made to present the items necessary for
successful operation of any type of irrigation
system and irrigation investment data for certain locations in the District.
In Table 5, the items necessary for both
sprinkler- and gravity-type irrigation are presented. The original cost of these items varies
from community to community and farm to
farm, while the quantity depends on the acreage to be irrigated. A suggested depreciation
schedule for various items of different irrigation systems is presented in Table 6. Some
modifications are necessary to fit local conditions.
The question of whether surface or sprinkler
irrigation is superior depends on the farm to
Figure 2. Depth to Water Table, Grant
County, Kansas, Well and Index of
Precipitation, Ulysses, Kansas
lndex=5-month moving average.
SOURCE: U. S. Weather Bureau and U. S. Geological Survey.
Agricultural Land
Table 5. Items Included In Initial Investment for an Irrigation System
Gravity
Sprinkler
Water Supply
Land Preparation
Conveyance Systems:
Open ditches
Closed conduits
Drops, division boxes
Distribution Systems:
Checks
Spiles, siphons or both
Gated pipe
Machinery:
Floats
Ditches
Water Supply
Conveyance Systems (mains):
Open ditches
Closed conduits
Distribution Systems:
Sprinkler laterals complete
Pump
Machinery:
For moving pipe
SOURCE: "Sprinkler versus Gravity Irrigation" by Fred B. Hamilton and John F. Schrunk, Agricultural Engineering,
April, 1953.
be irrigated. For irregular topography, where
surface ditches cannot be provided, or where
deep-percolation losses from surface irrigation are great, sprinkler irrigation probably is
the only practical type. On the other hand,
surface irrigation usually requires less investment and, in those areas where it can be used,
may be more profitable. However, the system
that is best for any farm can be determined
only by analysis or experience. This means
that the returns from the two systems must be
compared and balanced against the operator's
Table 6. Suggested Depreciation Period for
Components of an Irrigation System
Gravity
Sprinkler
Well
Pumping Equipment
Farm Ditches
(permanent)
Concrete Structures
Pipe
Misc. Control Equip.
Power Units:
Combustion
Electric
Land Grading
Well
Pumping Equipment
Farm Ditches
(permanent)
Depreciation
Period
years
Pipe
Sprinkler Laterals
Power Units:
Combustion
Electric
2S
15
20
20
15
15
10
25
none
SOURCE: "Sprinkler versus Gravity Irrigation" by Fred B. Hamilton and John F. Schrunk, Agricultural Engineering,
April, 1953.
personal preferences regarding the type of
supervision and labor for each.
Table 7 shows an example of the investment
required for well irrigation in Box Butte
County, Nebraska. It indicates the less than
proportional increase in investment associated
with increased depth of irrigation wells. Power
costs increase quite rapidly with depth of
well. The depth from which it is economically
feasible to pump water will vary with the cost
of power and the price of agricultural products being produced. For example, in southwest Kansas, where cheap power from the
Hugoton Gas Fields is avai]ahle, it may he
Table 7. Investment for Irrigation Wells
In Box Butte County, Nebraska, 1949
Depth of Water After Drawdown
Items
Under
100 Ft.
27 Wells
Power
$1,001
1,456
Pump
2,454
Well
Equipment
272
.___
Total
$5,183
101 to
150Ft.
20 Wells
Over
150 Ft.
8 Wells
Average
55 Wells
$1,946
1,628
3,989
404
$2,856
2,797
2,957
485
$1,615
1,713
3,085
355
-$7,967
-$9,095
-$6,768
SOURCE: Original Cost and Annual Cost for Irrigation Wells, Box
Butte County, Nebraska 1949. University of Nebraska
and U. S. Department of Agriculture, Lincoln, Nebraska.
economical to lift water much farther than
in an area where power is more expensive. It
will be noted that the data in Table 7 were
collected for 1949 operations. Comparable
investment data probably would be different
at present. These data also would vary with
the volume of water pumped and the acreage
irrigated.
Yield Response
Information is inadequate regarding the
income that can be expected from irrigation
development. This is explained by the fact
that conditions are not the same in vaiious
parts of the District. In general, therefore,
7
lrr.igating
little can be said about this important problem. Also, the determination of the amount of
income that irrigation contributes to farm business is extremely complex. It is understandable that there is a lack of information on the
subject.
The contribution that irrigation makes to
farm income is expressed largely through
greater crop yields. Table 8 illustrates the
effect of irrigation in 1952 on crop yields at
one location in the Tenth District. These yield
differences may not apply in other locations
or under different water-supply conditions,
but they serve as an example of the response
of crops to irrigation. Because of the increased
yields on irrigated land, more nutrients are
removed from the soil. Therefore, a more
complete soil nutrient replenishment program
is necessary on irrigated land if crop yields are
to be maintained.
It may be seen in Table 8 that the greatest
increases in crop yields were experienced by
cotton and alfalfa. Grain sorghum also responded quite well to added water. However,
oats and wheat did not show a significant response to irrigation in 1952. Crop responses
to irrigation vary considerably from year to
year. In addition, differences in yields on
irrigated and dryland are greater in dry years.
Farmers in southwestern Oklahoma could
increase dryland yields moderately through
widespread use of improved practices, and
Table 8. Yields On Dry and Irrigated Land"'
Crop
Cotton lint (pounds)
Alfalfa hoy (tons)
Groin sorghum (100 pounds)
Oats (bushels)
Wheat (bushels)
Dry
Irrigated
190.0**
1.0
9.6
15.6
15.0
390.0t
1.9
15.6
18.3
17.1
*W. C. Austin Project, Altus, Oklahoma, 1952.
** Wt. of cotton seed
1.7 wt. of lint.
t Wt. of seed
1.8 wt. of lint.
SOURCE: Income Possibilities and Development Problems of Irrigated Farms in a Subhumid Cotton Area. Unpublished
manuscript ot the U. S. Department of Agriculture and
Oklahoma Agricultural and Mechanical College.
=
8
=
it is believed that substantially greater increases in irrigated yields are possible if irrigation is accompanied by improved crop
rotations, increased use of fertilizer, better
insect control programs, proper land development, and proper water application. Therefore, subsequent increases in yield would not
be due to irrigation alone but to a combination of practices.
Stability Implications of Irrigation
Irrigation in the Great Plains can be used
to increase the stability as well as the amount
of agricnJturnl production. Since instability
of production in this area frequently is caused
by an unreliable supply of moisture, it would
appear that irrigation is an excellent means
of removing some of this variability. There
are, however, numerous problems associated
with the adoption of irrigation.
Many farmers would like to combine a
small irrigated acreage with a larger dryland
acreage. Such a farm organization would
produce a stable feed or cash grain crop on
the irrigated acreage and also would permit
large crops on the dryland in good years. In
other words, a degree of stability would be attained without reducing income possibilities
in years of high rainfall. Some farmers may be
able to develop their water resources to attain such an ideal arrangement, but the number of farms on which this can be done is
small. On many farms, water is not available
or the terrain is such that the land cannot be
irrigated. In such cases, development of irrigation in the community could have indirect
benefits. For example, an irrigation development might produce either forage or grain
crops or both, so that a livestock farmer on a
dryland farm would have a dependable feed
supply by purchasing the feed from a farmer
with considerable irrigated land. This is a
loose type of integration and may not permit
Agricultural Land
an exact balancing of livestock numbers and
feed supplies between the nonirrigated and
irrigated farms.
On some farms, irrigation may be used on
a stand-by basis. That is, in years of average
or better precipitation, the irrigation system
may not be used. Only when precipitation is
inadequate, is the irrigation system put into
operation. Such an organization would have
a considerable amount of flexibility, but it
also involves problems, since there would be
considerable expense in maintaining the system during the years it is not used. This is less
of a problem with p11rnp irrigation than with
an extensive system of reservoirs and canals.
Another factor which must be recognized
when the adoption of irrigation is being considered is the level of management involved.
Such an innovation carries with it a considerable number of problems which are new to
most dryland farmers. Not only will many
of the crops be new, but there also will be
problems associated with the time and amount
of water application. Soil management also
becomes quite important as water is applied
to agricultural crops. A farmer contemplating
the adoption of irrigation would do well to
secure technical advice from his extension
service or other sources.
FinalJy, it should be recognized that the
s11pply of irrigation water also is subject to
fluctuation. If the irrigating is being carried
on from wells, it is possible that a long period
of dry weather, combined with extensive irri-
gation development, may cause a lowering of
the water table. If this occurs, it is obvious
that the farmer may have to curtail his use of
water. This also may occur if the water is supplied from a surface source. For example, in
the unpublished study made by the U.S. Department of Agriculture and Oklahoma A and
M College dealing with the economics of
irrigation development on the W. C. Austin
Project in Oklahoma, it was estimated that
water shortages would have affected crop
yields in 16 of the 39 years from 1914 through
J952. Jt was noted that the years of water
shortage tended to be bunched, hC'ing most
scvC'rc during tl1c H).'3 0's. rl is <luring such a
period that the need for added stability from
irrigation would be greatest. The W. C. Austin
Project docs not have a supply of water adequate for all years. Even with a fully adequate
supply, irrigation should not be viewed as
a perfect stabilizer. Irrigation may prevent
income from falling to disastrous levels during
a period of extended drought. One of its
stabilizing effects is to permit the maintenance
of livestock numbers during periods of
drought. This permits quicker recovery in
more favorable years, while under dryland
farming conditions it may be necessary to
liquidate livestock herds. Consequently, it is
probable that irrigation has a stabilizing influence on the farm organization, but it also
is likely that considerable fluctuation in physical production and income still will exist even
though irrigation is used.
9
Rolling Adjustment In Bank Credit
Loan Volume Reflects Altered Needs
of Business and Consumers
THE
SWING from hyperactivity in the first
half of 1953 to a slower rate of output in recent months reduced national industrial production. The reduction and reallocation of
military spending, reduced farm income, and
a turn from inventory accumulation were
prominent factors in this change of pace. As
could have been expected, these events have
impinged more sharply upon certain industries
and regions than upon others. Aircraft companies whose contracts were increased probably have not expanded production, since
higher delivery schedules were not established; on the other hand, some firms
whose contracts were terminated have experienced a contraction of output not compensated by rising markets for other products.
Companies whose products were overstocked
have cut operations to allow sales to absorb
the surplus. Lower farm income has exercised
a pervasive influence on the tempo of business
in many parts of the country and has particularly affected concerns producing goods for
sale to farmers.
The impact of these developments upon
various types of industries and in the several
sections of the country is registered, in part,
in the loans and deposits of commercial banks.
In most lines of business, the demand for
bank loans in the first quarter of 1954
was below that of last year. Particularly striking was the reduction in bank credit needs of
firms in the metals, petroleum, coal, chemicals,
and rubber industries, and of wholesale and
retail trade firms. Much of the expansion of
10
business loans since 1950 has been to finance
additions to inventory, and the change to a
policy of liquidation probably accounts for a
large part of the difference in the two years.
In addition to lower business credit needs,
banks in leading cities report a slackening in
demand for both long- and short-term consumer loans following the significant increases which accompanied heavy purchases
of houses, a11tomohi]cs, and household durables last year.
The National Situation
The first eleven weeks of the new year witnessed a sharp contraction of total loan volume at all weekly reporting banks in the
United States. Excluding loans to banks, the
decline amounted to 1,054 million dollars up
to March 17. The recorded drop in loan volume undoubtedly would have been greater in
the absence of purchase by reporting banks of
an estimated 130 million dollars of Commodity
Credit Corporation Certificates of Interest in
the week ended February 3. The reduction began immediately after the turn of the year,
with the week ended January 6 registering a
net decline of 608 million dollars. An important, though uncertain, amount of this reduction probably represented repayment of loans
taken to minimize excess profits tax liability.
However, business and agricultural loans continued to decline through February, as inventories were further reduced, and "all other"
loans-chiefly consumer- recorded the second
successive monthly decrease. Temporary borrowing to meet income tax payments appears
to have been the principal cause of an increase
of 532 million dollars in business loans during
the two statement weeks ended March 17.
As a result, total loans, apart from loans to
Rolling Adjustment
banks, increased 724 million dollars between
February 24 and March 17. Nevertheless, the
decline measured from the year end was approximately eight times as great as in the
corresponding period of 1953.
An important part of total repayments since
the beginning of the year originated with
seasonally lower credit requirements of certain borrowers, such as food, liquor, and tobacco manufacturers and commodity dealers.
These firms liquidated 314 million dollars of
loans at a selected gronp of larger banks
which report loans hy industry, and have accounted for about one third of the total contraction in business borrowing thus far this
yC'ar. This amount of repayment is not out of
line with seasonal reduction in borrowings by
these firms in other recent years. Wholesale
and retail trade firms, which also normally
reduce bank borrowing after the first of the
year, appear to have made larger repayments
this year-130 million up to March 3, compared with an increase of 1 million in the same
period last year. There also has been diminution in borrowing by the petroleum and chemical industries. These firms, which had continued to increase bank borrowings through
the close of 1953, repaid approximately 100
million dollars of loans, on balance, in the
month of January. Metal and metal products
firms began making substantial repayments
during the last half of 1953, after steadily increasing their use of bank credit in the
preceding three years, and between December 30, 1953, and March 3, 1954, repaid 148
million dollars. With respect to the more recent period, it may be of interest to note that
metals firms reduced loans 152 million in the
first week of the new year but made no net
reduction of indebtedness in the succeeding
eight-week period.
Sales finance company repayments are the
final major factor in the decline of commercial
and industrial loans at reporting banks in the
country. These firms decreased their use of
bank credit 229 million dollars from December 30 to March 3 following a reduction of
138 million in the preceding six months. In
part, this latest reduction represents a seasonal
decline in demand for credit by consumers.
However, there appear to be other influences.
Sales finance companies funded an important
amount of bank debt through sale of securities
on the market during the latter months of
1953. Beyond this, recent figures show a more
than seasonal decline in the amount of consumer debt ontstanding foJJowing the s]owcr
increase in the last half of 1953.
Changes by Federal Reserve Districts
The reductions in business loans described
for the aggregate of reporting banks in the
United States were not distributed evenly but
were concentrated in certain areas. Developments in some districts were contrary to the
trend for the Nation, showing either increases
or smaller decreases in business and agricultural loans, compared with last year.
In terms of dollars, the greatest change occurred among banks in the New York Federal
Reserve District, where reductions in business
and agricultural loans up to March 3 this year
amounted to 564 million dollars, compared
with 180 million last year. Percentagewise,
however, declines at reporting banks in the
Boston, Philadelphia, Cleveland, and St. Louis
districts also represented notable changes from
the corresponding months of 1953. On the
other hand, changes in business and agricultural loan volume in the Richmond, Atlanta,
Kansas City, and Minneapolis districts, predominantly agricultural regions, vere approximately the same magnitude as in the first two
months of last year.
Consumer loan demand, as revealed by
changes in "all other" loans at reporting banks,
showed signs of slackening in all districts.
11
Rolling Adjustment
BUSINESS LOANS, TOTAL LOANS, AND TOTAL DEMAND DEPOSITS
Denver
Oklahoma City
Omaha
·:;'.'8'0
·
,t''.'.Jl:tljtifi:(,,:)
:•:
~J. •· /· · .·.· ·•
Tulsa
Wichita
; J~i~~i~~;; a;rr0;iifl.!'
.r''.
·. :~ :-·
·-:
·11~
~;~!:!:,:.
l-'...W.a..l..,_L./[#1..:,i...jl.....l.4.;:..t,:,J~J,;;:J;;:;i;,;:i;;:;J;:.;1~µ;;:~~~~~
)/fJ
i!J\:
._.::::::,:,}':t,:::::,;::;::::::::::::::::::::::::::::::::::;:/}:::::::t:;::,{':{;;{}:}:{:::::,::(:{j
12
;{t •~:i:;.;.::.,.·.;:i::;:1.;·.
in Bank Credit
Dollar declines were registered in all but one
district - ranging from less than 1 per cent in
the Kansas City District to more than 5 per
cent in the St. Louis District. There was an
increase among reporting banks in the Cleveland District, but of decidedly smaller proportion than the rise during the first two months
last year.
the volume at reporting banks in all but one
of the six District cities showing reduction.
In the corresponding months of 1953, such
loans were on the increase. Distributors, particularly retailers, have reduced their borrowing generally since the first of the year - in
contrast to increases in January and February
last year.
Tenth District
The combined volume of business and
agricultural loans at Tenth District weekly
reporting banks has been rather stable thus
far this year. Apart from the increase during
the slalcmcnl wc<'k of March 17, when income tax borrowing was an important factor,
business credit alone contracted 5.5 million
dollars up to mid-March. The offsetting gain
in agricultural loans represents an increase in
Commodity Credit Corporation guaranteed
loans and appears to be associated in important measure with purchases of Commodity Credit Corporation Certificates of Interest issued in February. In the same period
last year, commercial and industrial loans increased 5 million dollars. The trend of business loans, total loans, and deposits is recorded
for six principal District cities in the accompanying charts.
Among Disb·ict business borrowers, the
major loan repayments thus far in 1954 have
been made by food manufacturers, commodity
dealers, sales finance companies, and retail
trade firms. Food manufacturers and commodity dealers normally experience lower
credit needs at this period of the year, and
recent liquidations have been within expected
limits. These liquidations have been a particularly important factor in the decreased
business loan volume at Kansas City banks,
although banks in Denver and Omaha also
have felt the contraction. The reduction of
bank indebtedness by sales finance companies
appears to have been more widespread, with
There also have been some notable increases
in credit requirements at District banks since
the beginning of the year by certain industries, which, though suhmcrgccl by the overall downtrend, have furnishctl significant
support to loan volume. I ,oans ('lassificd as
"Petroleum, coal, chemicals, and ruhbcr" have
expanded in each of the six principal District
cities, although city banks in Oklahoma have
experienced the largest gains. The bulk of
these loans probably is associated with the
petroleum industry and may reflect increasing
stocks of gasoline. There also has been growth
in loans to metals and metal products manufacturers and to textile and apparel firms,
principally in Kansas City. In addition, public
utilities and construction firms have shown
net increases in bank borrowing np to midMarch this year, compared with decreases in
the like period last year.
The decline in total deposits this year
has been less than last year among District reporting banks as a whole. However,
the build-up during the preceding six-month
seasonal expansion also was considerably
smaller. The greatest decline in dollar volume was in Kansas City, where interbank deposits accounted for much of the contraction.
Similarly, the decline at reporting banks in
Omaha was influenced by withdrawal of
bankers' balances. Except for Tulsa banks,
private deposits ( deposits of individuals and
businesses) in principal District cities have
contracted decidedly less in the first two
months of 1954 than in the preceding year.
13
UNEMPLOYMENT RISE GENERAL
Unemployment in the United States has
risen substantially during the last several
months. In October, 1953, the U. S. Bureau
of Census reported that only 1.2 million persons were unemployed- a postwar low. By
February of this year, the total was up to
around 3.5 million, the highest point since the
spring of 1950. While greater publicity has
been given to the rapid rise of unemployment
in some of the more heavily industrialized
areas, unemploym nt in Tenth District stales
also has increased rapidly since the fall of
1953. However, the rate of increase has slowed
down recently in most District states. In Nebraska, New Mexico, and Oklahoma, unemployment declined slightly in March. These
developments are revealed by figures from
the state unemployment insurance programs
shown in the accompanying charts. Even
though only 36 million of the 60 million
workers in the Nation are in the insurance
programs, state information on joblessness
among insured workers is broadly indicative
of unemployment conditions.
Seasonal factors account for part of the
increase in unemployment since the first of
the year; however, joblessness generally drops
in March as outdoor work picks up. For the
week ended March 6, 1954, the 6.1 per cent
of the insured workers unemployed in the
U. S. was more than double the level a year
earlier and equaled the March, 1949, percentage. In attaining this level, the rise in
unemployment from the seasonal low of last
October to March of this year represented a
greater increase than during the comparable
1948-49 period. The proportion of insured
workers unemployed in the seven District
states also was double that of a year ago, ex14
cept in Nebraska and Oklahoma. The per
cent unemployed in New Mexico in March
approximated the previous postwar peak
there, while in Colorado and Wyoming, the
ratio was higher than in the comparable
period of 1950. Except for Oklahoma and
Wyoming, the proportion of workers unemployed in District states was below the
national average.
Important factors in the lower rate of activity in the national economy during recent
months were the reduction of business inventories, which accumulated at a rapid rate
through the third quarter of 1953, and the
reduced volume of spending for national defense. For District states, it appears that
reduced defense spending was especially important in lowering the level of activity. Cutbacks at ordnance and military aircraft factories augmented the seasonal increase in
unemployment in Kansas City. Military aircraft employment in Wichita increased
slightly during the past several months, but
remains considerably below the peak reached
in December, 1952. Defense cutbacks at an
aircraft overhaul base in Oklahoma City and
at an aircraft factory in Tulsa have contributed
to the slack in those two areas. In Nebraska
and eastern Kansas, employment at several
ordnance plants has dropped substantially
since mid-1953. While there were reductions
in defense-connected activities in Colorado
and New Mexico, a lower level of activity
in other sectors of their economics also contributed to the growth of unemployment.
Increases in unemployment in Wyoming were
caused mainly by reduced employment in coal
mines and on interstate railroads as a result
of dieselization.
Unemployment Rise General
UNEMPLOYMENT AMONG INSURED WORKERS
NOTE : Based on sample week containing 8th day of month, except for February and Morch, 19S4, when first week of month wa 5 used.
SOURCE : U. S. Bureau of Employment Security.
15
WHEAT EXPORTS AND CARRYOVER
COMMON STOCK PRICES
United States
SEC Index of 265 Stocks
BANKING IN THE TENTH DISTRICT
PRICE INDEXES, UNITED STATES
Loans
District
and
States
Consumer Price Index
Reserve
City
Member
Banks
Reserve
City
Member
Banks
Country
Member
Banks
Feb.
1954
Index
Deposits
Country
Member
Banks
Jan.
1954
Feb.
1953
113.4
(1947-49=100)
115.0
115.2
Wholesale Price Index (1947-49 = 100)
110.5
110.9r 109.6
Prices Rec'd by Farmers (1910-14 = 100)
258
259
264
Prices Paid by Farmers (1910-14 = 100)
282
282
281
r Revised.
Feb. 1954 Percentage Chango From
TENTH DISTRICT BUSINESS INDICATORS
Jan. Feb. Jan. Feb. Jan. Feb. Jan. Feb.
1954 1953 1954 1953 1954 1953 1954 1953
Tenth F. R. Dist. +1
Colorado
Kansas
Missouri*
Nebraska
New Mexico*
Oklahoma*
Wyoming
-1
+1
-1
-1
+1
0 +1
0
0
0
-5 -1
+3
- 2
+1
+6 -1
+2 + 3
+2
+2
+2
-1
+1
**
**
+2
+3
**
+1
+2
+3
-1
+4
0
- 2
- 2
+1
+3 -3 1
+s
+1
**
-1
0 +1
0
0 +3
-2
+3
**
I **
0
+2
+2
+1
+2
**
**
-1
+2
+3
Value of
Department
Store Sales
*Value of
Residential
Building Permits
Percentage change-1954 from 1953
Year
Feb. to date Feb.
Year
to date
Feb.
Year
to date
+2
0
-6
+2
+1
-2
- 2
-7
-4
+34
Denver
0
-4
Wichita
+2
0
-11
-12
+47
+21
0
-2
-at
-6t
+4st
+1st
+9
+8
+3
+2
+41
+Jo
+11
+5
-9
-12
+128
+40
-2
-1
-3
- 7
+62
-8
Tenth F. R. Dist.
Kansas City
Omaha
*Tenth District portion only. **No reserve city banks in this state.
16
District
and Principal
Metropolitan
Areas
Value of
Check
Payments
Okla. City
Tulsa
*City only.
tKansas City, Mo., only.
tKansas City, Mo., and Kans.
@FedFRASER