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MONTHLY
REVIEW
Agricultural and Business Conditions
TENTH FEDERAL RESERVE DISTRICT
VoL. 38, No. 10
FEDERAL REsERVE BANK OF KANSAS CITY
OCTOBER
31, 1953
Meeting Capital Requirements in the Wheat Belt
T
of acquiring the capital necessary
to farm in an efficient manner is important
both to the young man who wishes to start farming
and to the farmer who desires to reorganize his
farm business. Both the quantity and kind of capital needed to establish a farming unit have been
changing more rapidly than have the methods of
acquiring capital. Although these methods change
slowly over time, their relative importance may
shift as capital requirements and the capital structure of agriculture change.
HE PROBLEM
The material presented in this report
is based mainly upon data collected by
the United States Department of Agriculture on family-operated farms in the wheat belt
of Kansas and Nebraska. Figure 1 indicates the
area which is to be studied. For simplicity, this area
The Area
Studied
Figure
1.
THE AREA STUDIED
NEBRASKA
KANSAS
CO LO.
OKLAHOMA
SOURCE: U. S. Department of Agriculture.
will be called the wheat belt, although this description also could be applied to a much larger region.
The data presented are collected from family-operated farms that produce primarily for the market.
These farms represent the predominate type of farm
organization in the area. Consequently, the data
are not based on all of the farms in this section.
Rather, they are from those family-operated farms
that have similar organizations.
There are numerous indicators of the
size of a farm. One measure of size
is the quantity of resources a farmer
uses in production. Another indicator is the output
of the farm, which may be measured by physical
production or gross income. Over a long period, the
best single indication of size probably is some measure of output. However, in a particular year, such
a statistic may be misleading because of variations
in yield. In Figure 2, four measures of size are
shown for a group of family farms in the wheat
belt. Three of these measures deal with the resources the farmers use-land, labor, and power
machinery. The other, physical production, is a
measure of output. Each of these methods of
measurement has limitations; all must be considered
to understand trends in size of farm. These indicators of size will be discussed in the succeeding
paragraphs.
Figure 2 shows that acres per farm have not
varied to any great extent, although there has been
a persistent increase. Labor inputs, on the other
hand, have fluctuated considerably. Because of the
difficulty in obtaining accurate labor estimates,
part of the fluctuations may be caused by variations
in accuracy of measurement from year to year. It
Trends in
Farm Size
2
REVIEW OF AGRICULTURAL AND BUSINESS CONDITIONS
--=-=== = = ~ ~ ~ ~ ~ ~ ~ ~ = = = = = = = = = = = = = = = = = =
Figure 2.
INDEX
SIZE OF FARM IN THE WHEAT BELT*
1930-44•100
INDEX
225.-------------------,225
200
200
PHYSICAL
175
175
150
/\
150
POWER$ MACH
125
125
~------- -',
RES~
100
,,-- "
100
LABOR __.;:f'"'
75
75
50
50
2 5 U---'---'--"--'---'.........----'----'---'---'---'-........._,__........._.__....__._______" y_ 2 5
1930
'35
'40
'45
'50 ' 51
*Physical production data not available beyond 1948.
SOUP.CE: U. S. Department of Agriculture.
does appear, however, that there has been a decline in labor requirements since 1930. The decline
during the poor crop years in the 1930's probably
was caused by a lack of cash available to hire labor
and by the fact that smaller crops required less
labor to harvest. From 1944 to 1948, however, there
was a steady decrease in the amount of labor used,
while in recent years there has been an increase.
This probably has been caused by the increased
availability of labor since World War II. The index
which measures power and equipment has increased
every year since 1936. Prior to that time, there was
a decline jn the index. It is probable that the high
price of labor and the availability of capital caused
by improved agricultural incomes has led to a substitution of machinery for labor. In the early portion of the period, both the labor and machinery indexes declined, with the machinery index falling at
a more rapid rate.
As contrasted with the input indexes, the index
of physical production has fluctuated violently. To
a great extent, this fluctuation has been caused by
yield variability. Part of the increase in recent
years, however, was caused by improved production
techniques. Changes in the efficiency of production
will be treated subsequently.
Figure 3 has been presented to give
a better indication of the change
in efficiency that has been brought
about in the last two decades. The chart is misleading without careful examination, because it appears
that tremendous gains in efficiency have been made,
since production per man hour of labor has risen
and inputs per unit of output have fallen. Observance of the third line on the chart, yields per
harvested acre, will indicate the reason for much of
the behavior in the other two lines. What appears
to be a considerable gain in efficiency of production
turns out to be the effect of favorable yields on production. Variations in crop yields have been caused
largely by weather conditions, although varietal improvements in recent years have increased wheat
yields. In addition, there have been other improvements in production, such as increased mechanization and better insect and weed control. Most of
these improvements are reflected in the yield per
acre figures. These data do not provide precise
measures of gains in efficiency of agricultural production in the wheat belt. They do suggest that
some progress has been made in the past two
decades. Prior to 1930, considerable improvement
in wheat production was made by the adoption of
machinery. This progress is not reflected in Figure 3.
The significance of the preceding material is that
the size of farm in the wheat belt has increased
when measured in almost any way except by the
amount of labor used. This indicates that capital
requirements have increased. The increase in capital requirements has occurred at the same time that
efficiency has improved. That is, fewer inputs are
required per unit of output than was formerly the
case. Because of these advances in product:on, it has
become possible for the farmer to increase the size
of his farm and, hence, his output.
Efficiency of
Production
Figure 3.
PRODUCTION EFFICIENCY IN THE WHEAT BELT
INDEX
1930-44•100
INDEX
220.--------------------,220
PRODUCTION
PER LABOR HOUR~
/'\
180
140
100
60
180
~\ VII
/ \ ,\ '\
I
I
l \\II
i
140
100
PER
\
\.. /
/\
.,_ "'
- ,,.../
60
INPUT PER UNIT OUTPUT
2
P9 v3o'V----'-----'--....L...-,....1.35--'--'----'-----'--.4......0__,___,____,__....l..-,--'-45--'----'----'----'--:,5""'-0,v_·51 2 0
SOURCE: U. S. Department of Agriculture.
FEDERAL RESERVE BANK OF KANSAS CITY
Figure 4.
FARM INVESTMENT STRUCTURE IN THE WHEAT BELT
PER CENT
OF TOTAL INVESTMENT
PER CENT
OF TOTAL INVESTMENT
100
100
80
80
60
60
40
40
20
20
0
1930
•35
'40
'45
'50 '51
0
SOURCE: U. S. Departmer.t of Agriculture.
The structure of farm investment has remained relatively
stable since 1930. This is illustrated by Figure 4. Land and building investment
constitutes only a slightly smaller portion of total
investment than it did in 1930 ; although it declined
in relative importance until 1943, it has recovered
considerably since that time. This is to be expected,
since land values remained relatively stable until the
beginning of World War II, while other prices increased. On the other hand, investment in livestock
has increased from approximately 5 per cent of total
investment in 1930 to 11 per cent in 1951. Since
1951, however, livestock prices have declined substantially, and livestock investment undoubtedly is
a smaller proportion of total investment today than
it was in 1951. Crops on hand have comprised a
larger proportion of total investment in recent
years than in an earlier period. This probably can
be explained by the fact that farmers have more
capital than they had previously. Therefore, they
can afford to carry larger quantities of crops from
one year to the next. They may do this in the hope
of obtaining a price rise on the commodity, and they
may look upon grain stocks as a form of financial
reserve. The Commodity Credit Corporation loan
program also has provided a stimulus to this type
of activity and probably is a major factor in the
increase of this type of investment. Another important reason for this change is that crop prices
have increased much more during this period than
the prices of other investment items.
The conclusion to be drawn from the above data
is that the structure of farm investment has not
changed significantly. Land and building investment in 1930 comprised approximately 82 per cent
of total farm investment, while in 1951 it accounted
for 75 per cent. Although land and building investThe Structure of
Farm Investment
8
ment has declined slightly in importance, crop and
livestock investment has increased. At the same
time, total investment has increased significantly.
This is borne out by Figure 2, which indicates that
both machinery and land used on the family farm
have increased when measured in physical terms.
Although the structure of farm
investment has remained relatively stable over the years,
there has been a substantial shift between cash expenditures and long-run capital investment. In
Figure 5, cash expenditures have been deflated by
prices paid by farmers for production items. The
resulting line on the chart should serve as a rough
measure of the quantity of production items that
are purchased during the year. It includes all cash
payments for feed, seed, and fertilizer; livestock
and livestock equipment and supplies; machinery
and equipment purchases, repairs, replacements,
and operations; repair and upkeep of farm buildings, excluding dwelling; custom work and hired
labor; and taxes, telephone, electricity, and miscellaneous items. It is apparent that the major expense items not included are rent, interest, and
additions to land and buildings, and that some capital expenditures such as livestock and equipment are
included. As shown by Figure 5, it was not until
1941 that the index of cash expenditures (deflated)
exceeded the index of acres per farm. By 1951,
however, the index of cash expenditures was 152,
while the index of acres per farm was 110. These
data indicate that the use of those items financed
by short- and intermediate-term credit has increased
much more rapidly then the use of those items requiring long-term financing.
The implications of this increase in short-term
expenditures relative to longer-term capital investCash Expenditure
Trends
Figure 5.
INDEX
CASH EXPENDITURES AND ACRES PER FARM
IN THE WHEAT BELT
1930-44=100
INDEX
1 6 0 , . : . . ; . . . . - - - - - - - - - - - - - - - - - - - , 160
140
CASH EXPENDITURES~
120
100
-- -
80
----- ---"-._ACRES
140
120
IOO
80
6 ?9"30-v-..l-....L......t..-,..1..35--..l..--'--'-...l-,....l.40'=-'"--'-__.__._,~4-=-5...,__.....__...,__-'-:-::,5~0~•5160
SOURCE: U. S. Department of Agriculture.
4
REVIEW OF AGRICULTURAL AND BUSINESS CONDITIONS
~ent are quite important. Such a shift undoubtedly
mcreases the vulnerability of the wheat farm to
year-to-year fluctuations in agricultural prices. If
agricultural prices should continue to fall, more difficulty will be experienced in meeting cash outlays
than there would have been in an earlier period.
Cash expenditures may be reduced as income declines, because operating capital may become more
difficult to obtain. It is somewhat more difficult to
predict with confidence whether output will decline
more than it did in earlier depression periods. It
should be kept in mind that, in the wheat belt,
natural factors are quite important in determining
output. This is borne out by Figure 2, which indicates output has fluctuated much more than have
inputs, and that they moved in different directions
in some years. In 1943, for example, output declined substantially from 1942 levels, while all of the
~gricultural inputs increased. The important point
1s that agricultural production in the wheat belt
although it may be controlled more in the short-ru~
than previously, still is highly dependent upon natural forces.
The increase in capital requirements in the wheat belt
cited above has definite farm
management implications. The problem of acquiring the additional capital necessary for carrying on
farming operations has become increasingly important. Means of obtaining this capital will be
discussed in the following paragraphs.
Reference to Figure 4 indicates that land is the
largest single investment item on wheat belt farms.
It is not necessary, however, for each farmer to own
the land he farms. He may rent all or part of his
land. In view of the large capital requirements in
agriculture at the present time, it appears that the
renting of land is one of the most important capitalreducing techniques available to the farm manager.
By renting land, his capital becomes available for
other purposes. Table 1 indicates that the larger
farmers in this wheat belt area are those who rent
all or part of the land they use. This has persistently been the case since 1930, even though favorable agricultural years have prevailed generally during the last decade. It should be emphasized that
these data are taken from the Census of Agriculture
and represent all the farms in the area. Table 1 also
indicates that the difference in acreage between
renters and owners and part-owners has been increasing. In 1930, the average size of farm operated
by tenants was 16 acres larger than the average
size of farm operated by owners. By 1950, the difference had increased to 69 acres. The average
Implications for
the Farm Manager
Table 1.
AVERAGE ACREAGE PER FARM IN THE WHEAT BELT
BY TENURE OF OPERATOR
Year
Owners
1930........................ 422
1935........................ 398
1940........................ 436
1945........................ 446
1950........................ 481
Part-Owners
717
759
861
872
931
Tenants
438
426
466
510
550
SOURCE: U. S. Depa r tm ent of Commerce.
acreage operated by part-owners in 1930 was 295
acres larger than the average acreage of owners. By
1950, it was 450 acres larger. If agricultural conditions become less favorable for a period of years
than they have been, farmers may turn increasingly
to the renting of land as a means of acquiring the
necessary capital to farm.
Various types of rental contracts exist. The most
common arrangements in the wheat belt are cropshare, crop-share plus cash, and cash leases. The
crop-share plus cash is merely a combination of the
crop-share and the cash leases. Each of these leases
has certain advantages and disadvantages. The
chief disadvantage of the crop-share lease is that,
unless expenses are shared in the same proportion
as the crop, the farm may not be operated in the
most profitable fashion. This is due to the fact that
neither the tenant nor the land owner shares in the
product in the same way the expense is shared. On
the other hand, the crop-share lease has the advantage to the tenant of having the owner bear part
of the risk of crop failure. For this reason, the cash
lease has been called a "risky" lease from the
tenant's standpoint, since he must meet a fixed cash
commitment regardless of cost. Conversely, the
owner views the crop-share lease as being more
risky than the cash lease.
The average size of farm for each of the three
principal types of leases is presented in Table 2.
This table indicates that the average acreage per
farm operated under the various types of leases has
increased in size. The farms operated under cash
leases, however, have increased their acreage much
more than those operated under other types of
leases.
Figure 4 indicates that machinery investment
comprises an important part of a farmer's total investment. Consequently, farmers have become quite
interested in methods of reducing machinery investment. One method of reducing the individual farmTable 2.
ACREAGE PER FARM IN THE WHEAT BELT
BY TYPE OF LEASE
Year
Cash Lease
1940............... ......... 264
1945........................ 463
1950........................ 671
Crop-Share
Plus Cash
~
-5- -
SOURCE : U. S. Depar tm ent of Commerc e.
625
606
Crop-Shnre
461
501
524
FEDERAL RESERVE BANK OF KANSAS CITY
er' s machinery investment is by joint ownership
of machines. Joint ownership has been most prevalent for machines used to harvest forages. Hay
balers and field forage choppers are outstanding
examples. The reasons for this probably are that
these tasks do not have to be performed at the same
time on all farms, and that the investment in these
implements is substantial. Unless a considerable
volume of work is assured for these machines, ownership is of doubtful benefit.
The other method commonly used by farmers to
prevent a large machinery investment is custom
hiring of machines. Custom combining has become
a major enterprise in the Great Plains. This practice permits some farmers to have a smaller machinery investment; it also permits the owners to
use their machines more intensively than if they
were confined to their own farms.
Another large investment item on many farms is
livestock. In the case of dairy herds, artificial insemination has become rather widespread. This is
an excellent example of the purchase of the service
of the asset, while the ownership rests elsewh er e.
Consequently, it is a capital reducing techniqu e
which also improves the quality of the product. The
use of artificial insemination has never become
widespread in beef production. Breeding beef cattle
in this way is not as convenient as with dairy cattle,
since beef cattle usually are handled less and are
not inspected as closely.
Most of the above methods of reducing investment result in an even greater increase in cash expenditures during the farming year. It previously
has been pointed out that cash expenditures have increased rather rapidly in recent years. To a certain
extent, this has added flexibility to the farm business, since somewhat greater control exists in the
short run. On the other hand, it has increased the
vulnerability of the farm business to price movements within the year and to crop failure. This is
true because it is necessary each year to meet large
quantities of cash expenditures. Gross income at the
present time can drop below cash expenditures much
more easily than it could in an earlier period. This
is important to farmers and to the people who loan
them money, because decisions must be made regarding cash expenditures when prices begin to
fall. If a farmer is operating at the most efficient
point possible and agricultural product prices fall
relative to agricultural costs, it will be possible for
him to economize on his expenditures. On the other
hand, if he is not operating at the most efficient
point when prices begin to fall, it may be false
economy to reduce expenditures. Farmers who are
not using enough sprays and fertilizer and who are
5
not spending enough on seed bed preparation at the
present time, probably should not reduce expenditures on these items if prices fall relative to costs.
These trends in farm costs and farm investment
have an additional implication to the lender of agricultural funds. As cash operating expenditures become more important, the operating expense loan
should receive additional attention from lenders, because it is for this type of expense that the additional demand for funds is likely to develop. Operating expense loans usually do not provide adequate
security unless account is taken of the financial
statement of the farmer. This probably is desirable,
because it encourages the lender to view the entire
farm business, rather than to consider only a particular enterprise.
Not only are these trends
in capital requirements of
interest to the individual
farmer, but they also have implications for national
agricultural policy and for the rest of the economy.
One of the traditions of American agriculture is
that of famil y farm s. It is obvious that the increased size of farm and the corresponding increase
in capital requirements have definite implications
for this tradition.
As the size of farm increases, it follows that the
number of farmers decreases. Machinery has been
substituted for labor, and it is possible with a given
amount of labor to farm larger acreages and produce a larger volume of agricultural commodities
than formerly. This trend is viewed with fear by
some people who believe that if it is allowed to continue it will mean the end of the family farm. The
answer to this question depends largely upon an acceptable definition of the family farm. Probably
the most common definition is that it is a farm on
which most of the labor is supplied by the farm
Implications for
the National Economy
Table 3.
FARM LABOR SUPPLY IN THE WHEAT BELT, 1950
F amHv and / or F amily Workers
Hired
Hired W orkers Including Operator_ Workers
Number of
farms reporting..
Per cent of total... ...
16,560
100
16,330
2,811
99
14
SOURCE: U . S. Depa r tm ent of Commerce.
family. If this is an acceptable definition, reference
to Table 3 will indicate that the family farm still is
the predominate type of organization in the wheat
belt. Of all the farms in the area, 99 per cent used
some type of family 1abor. Only 14 per cent of the
farms reporting had hired labor. It appears that
the introduction of labor-saving machinery may
have strengthened the family farm if it is defined
in this way. The nature of agricultural production
6
REVIEW OF AGRICULTURAL AND BUSINESS CONDITIONS
probably is such that large scale chain farming is
not feasible. Although the most efficient size of
farm has increased, it apparently has not increased
more rapidly than the farm family's capacity to
farm it.
Another tradition of American agriculture relates to the establishment of young men in farming.
The importance of retaining young men of quality
in agriculture is apparent. Increased capital requirements have made it difficult for the young man
without capital to become established on an economic sized unit. It is impossible for all of the
young people reared by farm families to remain in
agriculture because the agriculture population more
than reproduces itself and the average size of farm
is increasing. Father-son transfers fail to solve the
problem, because there is more than one son in many
families. If a farm of efficient size is divided into
parts, uneconomic farming units will result.
These problems caused by increased capital requirements probably will have to be met by society
as laws and national policies are proposed. Tradition and efficiency may conflict and a choice will
have to be made.
PROSPECTIVE AGRI CULTURAL PRODUCTION FOR 1953
Agricultural production in 1953 nationally probably will equal or approach the record production
of 1952, according to reports of the United States
Department of Agriculture. Tenth District agricultural production, although not as large as last
year's, still will be substantial. Currently, the physical volume of farm marketings nationally ic:; running slightly above a year ago. This is because of
high production in 1953 and large carry-over stocks
from 1952. Although total crop production probably
will be down from 1952, it is expected to be about
offset by increased livestock production. Increased
cattle production probably will more than compensate for the decrease in hog production. Both milk
and egg output are slightly above the levels of a
year ago.
Expected 1953 production figures for the principal crops of Tenth District states are shown in Table
1. Although the 1953 production data are estimates,
the growing season is sufficiently well advanced to
permit rather accurate forecasting. In the case of
wheat, oats, and barley, harvest is completed in
Tenth District states and in most of the United
States, but final production figures are not yet
available.
The Nation's wheat crop for 1953 has been estimated at about 107 per cent of the 1942-51 average, which is 90 per cent of the good crop of 1952.
In District states, the 1953 crop was about 2 per
cent less than the 10-year average, but was down
about 34 per cent from 1952. Even though the 1953
v.rheat crop was substantially below the huge 1952
production, the better-than-average crop, plus the
carry-over, compelled the Secretary of Agriculture
to call for a referendum on wheat marketing quotas.
It is a matter of history that these quotas were accepted by wheat growers and that the producers
now are limited as to the number of acres of wheat
they can plant without penalty. No restriction has
been placed on the use of the excess wheat acreage,
except that it cannot be planted to other crops that
have acreage restrictions.
Drought conditions affected the corn crop of
District states much more severely than they did
the crop for the entire Nation. The 1953 corn crop
for District states is estimated at approximately 80
per cent of the 1942-51 average, but only about 75
per cent of the 1952 crop. Much of the 1953 crop
has been or will be made into silage, because drought
conditions have severely reduced the grain yield of
CROP PRODUCTION
TENTH DrnTRICT STATES
Crou
Wheat_ _______________
Corn________________ ___
Cotton**----- ------Grain sorghum.
Oats____________________
Barley____________ ____
Est.
1953
1952
1942-51
--T!rousand;-;;;bushels*
405,230
601.690
398,~331
487,451
520.8~0
393.525
602
594
715
48,630
27,578
39,268
162,365
110,870
122,137
46,628
21,426
22,317
• Except for cotton which is in bales.
** Oklahoma and N ew Mexico.
SOURCE: U. S. Department of Agriculture.
1953 as 1953 as
% of
% of
1942-51
1952
- -P-;r ce-;;,-98.3
66.2
80.7
75.6
118.8
120.4
80.7
142.4
75 .2
110.2
47.9
104.2
UNITED STATES
Est.
1953
1952
1942-51
~1011sa11ds of bttshels*
1.088,548
1,291,447
1,163,231
3,036,380
3,306,735
3,196,101
12,215
15,136
15,596
137,263
83,316
114,590
1,324.614
1,268,280
1,205,106
295,299
227,008
237,476
1953 as 1953 as
% of
% of
1942-51
1952
Pere~
106.9
90.1
105.3
96.7
127.7
103.0
83.5
137.5
91.0
95.0
80.4
104.6
FEDERAL RESERVE BANK OF KANSAS CITY
corn and have placed roughage at a premium in
much of the District. For the Nation as a whole,
the 1952 corn crop was estimated on September 1 at
approximately 105 per cent of 1942-51 average and
about 97 per cent of the 1952 crop.
Although the Nation's production of both corn and
wheat is below that of a year ago, 1953 cotton production is estimated at 103 per cent of the 1952
crop. If a crop of this size is realized, it will be
nearly 28 per cent greater than the 1942-51 average.
This increase in production over the 10-year average is partially accounted for by increased acreage,
but also is caused by increased yield per acre. The
average yield per acre in 1953 was 16 per cent
greater than the 1942-51 average yield. This large
production in 1953, plus the carry-over from 1952,
made it necessary for the Secretary of Agriculture
to call for a referendum of growers to be held by
December 15 to decide if they will accept marketing
quotas. If these marketing quotas are accepted, the
acreage planted to cotton in 1954 will be reduced approximately 28 per cent from the 24.6 million acres
planted in 1953. The District states important in
cotton production--Oklahoma and New Mexicoare expected to produce about 20 per cent more cotton this year than they did in 1952, and about 19
per cent more than they averaged during the 194251 period.
Grain sorghum production in District states in
1953 is expected to be substantially greater than it
was in 1952, although down 20 per cent from the
1942-51 average production. Nationally, also, the
1953 crop is expected to be better than the 1952
crop, although not as good as the 1942-51 average
production.
The production of oats for the Tenth District
states in 1953 is expected to be better than for the
previous year, but considerably below the 10-year
average production. For the Nation, the crop is ex-
7
pected to be smaller than both the 1952 crop and
the 10-year average. Barley production nationally
is about 5 per cent above the production of 1952 but
approximately 20 per cent less than the 10-year average. It is expected to be up slightly from 1952 in the
Tenth District, but this estimate is only about 50
per cent of the production for the 1942-51 period.
It is likely that more acreage will be seeded to barley
in 1954 as some of the land taken out of wheat production undoubtedly will be used in this way.
MEMBER BANK CREDIT
The reports of member banks in the Tenth District continue to reflect a slackened demand for
credit. On September 30, total loans and discounts
outstanding at reserve city banks were 20 million
dollars less than at the end of August, and this decline brought the reduction since March 25 to 47
million. Loans and discounts of country member
banks increased 12 million dollars in September,
making a total increase of 86 million since the seasonal low on May 27. The seasonal expansion last
year from May 28 to September 24 was 133 million
dollars. While the lesser gain this year is attributable
in part to the smaller 1953 wheat crop, the effect of
lower prices on the need for agricultural credit also
has been an important influence. At the end of September, total loans and discounts were below yearago levels at both reserve city and country member
banks-at the former by 4 million and at the latter
by 30 million dollars. The major part of the decline
from last year at country banks occurred in Kansas
and Nebraska as the country banks in Missouri,
Oklahoma, and New Mexico showed a gain over last
year, while the loans of country banks in the other
two District states were only nominally lower. At
reserve city members, a similar geographic d_isparity
was displayed as these banks in Colorado and Okla-
!
SELECTED ITEMS OF CONDITION OF TENTH DISTRICT MEMBER BANKS
In millions of dollars
ALL MEMBER BANKS
Sept. 30 Aug. 26 Sept. 24
1953
1953
1952
Loans and investments ...................................
Loans and discounts ....................................
U. S. Government obligations .............. ......
Other securities ............................................
Reserve with F. R. Bank ................................
Balances with banks in U. S .........................
Cash items in process of collection ................
Gross demand deposits ....................................
Deposits of banks .........................................
Other demand deposits ................................
Time deposits ....................................................
Total deposits ....................................................
Borrowings ........................................................
5,440
2,208
2,668
564
874
700
325
5,942
961
4,981
968
6,910
46
5,464
2,216
2,685
563
904
651
300
5,921
925
4,996
960
6,881
71
5,351
2,242
2,567
542
959
686
339
6,010
963
5,047
850
6,860
117
RESERVE CITY BANKS
Sept. 30 Aug. 26 Sept. 24
1952
1953
1953
2,980
1,238
1,431
311
522
319
300
3,393
897
2,496
480
3,873
35
3,021
1,258
1,447
316
549
277
278
3,390
86 1
2,529
475
3,865
49
2,966
1,242
1,416
308
584
311
316
3,437
900
2,537
434
3,871
107
COUNTRY BANKS
Sept. 30 Aug. 26 Sept. 24
1953
1953
1952
2,460
970
1,237
253
352
381
25
2,549
64
2,485
488
3,037
11
2,443
958
1,238
247
355
374
22
2,531
64
2,467
485
3,016
22
2,385
1,000
1,151
234
375
375
23
2,573
63
2,510
416
2,989
10
8
REVIEW OF AGRICULTURAL AND BUSINESS CONDITIONS
homa showed gains in loans over the 12-month
period, while the city banks in Kansas, Missouri,
and Nebraska registered declines.
The seasonal expansion of loans at country banks
this year has been accompanied by a less favorable
trend of deposits than prevailed last year. In 1952,
from the low of the spring until the latter part of
September, loans increased 133 million dollars and
deposits 193 million. This year, the gain in deposits
has been somewhat less than the rise of loans. Moreover, in certain states, the expansion of loans in
the current year has markedly exceeded the growth
of deposits. For example, the country member banks
of Kansas have experienced a seasonal expansion of
38 million dollars in loans while adding only 5.6
million to deposits in the period. On the other hand,
District reserve city banks have gained 147 million
dollars of deposits since the low point of the spring.
Dollar volume of sales at reporting department
stores in this District in September, as in August,
was 5 per cent less than a year earlier, and sales in
the first half of October fell 7 per cent below a year
ago. The fall pickup in sales during September was
much less pronounced than usual, and the seasonally
adjusted index of daily average sales dropped sharply from 112 per cent of the 1947-49 average in August to 103 per cent in September. This was the
lowest point since mid-1951 and was well below the
average of about 115 per cent in the first half of
1953. The lag in sales in recent months has been
attributed in part to prolonged drought, abnormally
hot weather, and a marked decline in farm income
this year in much of this area.
DEPARTMENT STORE SALES AND STOCKS
SALES
STOCKS
Sept. 1953 9 Mos. 1953 Sept. 30, 1953
Metropolitan Area,
comp. to
comp. to
comp. to
Except as Noted
Sept. 1952 9 Mos. 1952 . Sept. 30, 1952
Per cent increase or decrease
Denver, Colo......................... -6
Pueblo, Colo.......................... -7
Hutchinson, Kans. (city).... -6
Topeka, Kans........................ -3
Wichita, Kans...... ................ -3
Joplin, Mo. (city)................ -5
Kansas City, Mo. (city)..... -3
St.Joseph, Mo....... ...............
0
Omaha, Nebr........................ -2
Enid, Okla. (city) ................ -19
Oklahoma City, Okla ........... -11
Tulsa, Okla........................... -5
All other areas and cities.... -6
0
+4
+2
+3
+2
+3
+1
0
+3
-2
+3
+1
*
+8
+20
+10
District..................................
+1
+12
- 5
*Not shown separately but included in District total.
BANK DEBITS
Sept.
1953
9 Mos.
1953
Thousand dollars
COLORADO
Colo. Springs ....
Denver ...............
Gr. Junction ......
Greeley ..............
Pueblo ................
Change from '52
. Sept. 9 Mos.
Per cent
59,963
768,173
20,976
27,758
56,040
496,905
6,856,911
183,964
242,409
506,863
+7
-2
+5
-14
+7
+2
+5
+14
-5
+12
Atchison ............
10,469
Dodge City........
12,249
Emporia ............
10,043
Great Bend** ....
11,449
Hutchinson .......
34,300
Independence ....
8,289
Kansas City ......
91,606
Lawrence ..........
14,638
Manhattan ........
11,655
Parsons ..............
10,744
Pittsburg ...........
11,860
Salina ................
35,402
Topeka ...............
108,8 58
Wichita ..............
326,535
MISSOURI
Independence ....
14,697
Joplin ................
33,021
Kansas City...... 1,386,422
St. Joseph .........
106,689
92,359
126,789
95,667
+8
-25
-16
+2
*
-6
373,GlO
85,830
826,943
131,857
108,576
98,626
124,129
335,013
1,005,640
3,049,622
·-28
- 16
+4
+5
-1
-7
-13
-14
-6
-2
-8
+6
+ 7
+7
+1
- 2
+5
-5
+6
+4
137,152
295,342
12,266,629
920,821
+9
-1
+2
-5
+7
+2
+7
-4
20,880
29,935
18,191
100,608
650,955
189,728
275,583
157,725
905,095
5,661,525
+5
-11
0
+10
+5
+4
-2
+9
+8
+2
127,406
36,008
1,211,100
323,043
+9
+5
+18
+7
192,881
34,787
4,657
18,417
27,197
9,446
406,809
8,630
21,402
706,017
1,758,944
324,727
44,979
176,922
252,246
88,806
3,808,905
71,581
199,932
6,436,479
-16
-5
-14
-14
0
-1
+4
+7
0
+8
+2
-8
-3
-8
0
+12
+4
+9
+1
+10
48,587
33,217
419,724
301,117
+3
-10
+5
+4
District, 41 cities ... 5,656,417
50,969,818
U.S., 345 cities .... .147,873,000 1,301,314,000
+1
+9
+5
+8
KANSAS
DEPARTMENT STORE TRADE
-5
Department store inventories increased less than
usual during September, and the seasonally adjusted
index of stocks declined from 145 per cent of the
1947-49 average at the end of August to 142 per cent
at the end of September, showing some further easing from the peak level of 146 per cent reached in
July. Stocks of merchandise on hand at the end of
September still were 12 per cent larger in value than
a year earlier, but the volume of outstanding orders
was 19 per cent lower than a year ago.
+18
+25
*
*
+11
+11
+6
*
*
NEBRASKA
Fremont ............
Grand Island ....
Hastings ............
Lincoln ..............
Omaha ...............
NEW MEXICO
Albuquerque .....
Santa Fe ...........
OKLAHOMA
Bartlesville .......
Enid ...................
Guthrie ..............
Lawton ..............
Muskogee ..........
Norman .............
Oklahoma City.
Okmulgee ..........
Ponca City ........
Tulsa ..................
WYOMING
Casper ................
Cheyenne ...........
• f9e{;_entage
** Not
change not computed; new reporting center beginning May,
included in totals; new reporting center beginning July, 1953.
@FedFRASER