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~
,
MONcrHLGJf
REVIEW
FEDERAL
Vol.~,
No.4
RES E R V E
BANK
o
F
DALLAS
DALLAS, TEXAS
April I, 1955
POTENTIAL ECONOMIC GROWTH OF THE UNITED STATES
DURING THE NEXT DECADE
There is presented in the foUowing pages of this issue of the Monthly Business
Review a summary of a study released by the loint Committee on the Economic
Report, Eighty·third Congress, Second Session.
To most people the future holds a certain fascination and,
though it means a real difference in their lives, is considered
a topic for mere speculation. To the businessman faced with
the task of matching plant capacity with future demand,
estimates of the economic future of our country are a necessity. Nearly all businesses must make some estimate of future
demands, prices, and production. Some businesses, such as
retail food stores, need only a 6-month forward look, while
others, such as electric power companies, need estimates for
periods ranging from 5 to 10 years into the future. Moreover,
as the national economy becomes more complex, there is a
tendency to require an even longer range estimate of the
future economic potentiaL
Thus, whether the estimates are to be used to guide inventory policies, long-range buying, plant construction, raw
material allocations, pension fund investments, or a multitude
of other management decisions, some basis for such management decisions must be established. Similarly, long-range
projections of economic growth provide a basis for government estimates, particularly with reference to budget policy
and future resource developments. Because of the importance
of these interests and because of the general interest in the
economy on the part of all groups, it is the purpose of this
article to review the projections of the basic economic trends
as prepared by the staff of the Joint Committee on the Economic Report_
from projections. Thus, while a projection of population
accepts the recent rate of growth as its only basis for the
estimate of the future, a forecast might modify or accelerate
that rate of growth according to the personal judgment of
the analyst.
Introduction
The introductory sections of the Report concern the importance of looking farther ahead, the objective of the Report,
and some general assumptions upon which the projections
are based. In discussing the first of these, it is indicated that
long-range projections are being requested more frequently
to aid in management decisions on such problems as capital
budgets, sales objectives, and plant locations. Similarly, Federal, state, and local government analysts sometimes must
project economic trends as far as 25 years into the future
to provide the foundation upon which to decide major policy
questions on such problems as national security, civil works,
and taxes. However, the current Report limits its projections
to a lO-year period - that is, to 1965_
In the case of any set of projections, the Report notes, it is
important to define the major economic goals desired and to
determine the changes in present trends which are necessary
to reach these goals. It also reveals that, for these projections,
"we have set 'maximum' economic growth as the goal. The
word 'maximum' is used here in the sense of a persistent
growth at rates which recent experience indicates to be feasible
on the basis of conservative judgments."
•
At the outset, it should be emphasized that the Report con., tains only projections, not forecasts or predictions. The distinctions implied by the terminology lie in the methods used
Furthermore, the Report states that "the projections for
to obtain results. Projections are extensions of existing trends.
Forecasts or predictions may be based on projections but the year 1965 do not necessarily assume achievement of maxicontain an element of judgment which is entirely missing mum economic growth each and every year between now and
This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org)
46
MONTHLY BUSINESS REVIEW
1965." However, it is assumed " . .. that any slowing up in
expansion of productive capacity or demand in 1 year will
be made up by a later speeding up and vice versa." This
assumption of an over·aIl average growth pattern is a funda·
mental requirement for the projections in the Report, and
any major deviation from this assumption would have a
significant effect upon the results obtained. Moreover, " ... no
allowance is made for the effects on our economic growth of
prolonged recession, major depression, war, or other serious
international complications."
In the presentation of the projections in this Report, all
estimates of output or expenditures, except for government
gross national product, are stated in average 1953 prices.
"The estimates of incomes and of Govcrnment gross national
product, ... assume that (1) as productivity increases, aver·
age hourly earnings and the returns to the other factors en·
gaged in private production will rise in order to maintain
recent relationships between costs, profits, and stock of busi·
ness capital; and (2) rates of compensation of Government
employees, military and civilian, will be adjusted upward to
maintain the 1953 relationship with rates in private
employment. "
Scveral important implications follow from the assump·
tions of a relatively stable price level and the maintenance of
current relationships among the rates of return to factors of
production. The Report indicates that an assumption of price
stability is necessary, first, to emphasize the changes in real
output and incomes and, second, because " ... this is a gener·
ally recognized goal of Government action." It is noted, how·
ever, that individual price fluctuations are not prohibited by
the assumption of general price stability. Nevertheless, this
assumption does imply" ... that the money supply will con·
tinue to rise as the Nation's output grows." Again, any major
deviation from the assumption would affect seriously the
projections in this Report.
Assumptions on Population
In the preparation of the projections in the Report, the
staff of the Joint Committee considered the size and age com·
position of the population as the basic foundation. The analy.
sis thus begins with the trends in population as a prime factor
affecting potential national production and demand for goods
and services. The Report draws upon a study of the United
States Bureau of the Census for the following basic assump·
tions on population in 1965.
ages of 10 and 24, it is expected that there will be an increase
of nearly 14,115,000 persons. Second, in that part of the
population which is 50 years of age or over, an increase of
7,801,000 is indicated by 1965. In fact, these two groups
account for all but 3,218,000 of the total gain expected in the
population between 1955 and 1965. It is of particular sig.
nificance that the population segment where ages range be·
lween 25 and 50 is expected to show an increase of only
664,000 in this period, while the number of persons over age
65 is estimated to rise 3,363,000 in the next decade. These
projections have important implications to the size and structure of the labor force; the type and size of the market for
consumer goods and services; and, ultimately, the capacity
requirements of specific industries.
The population projections provide the basic material from
which other projections are made by the stalI of the Joint
Committee. The Report estimates that " ... the total labor
force in 1965 will be 79 million, which, allowing for 3 mil·
lion in the armed services, would give a civilian labor force
of 76 million." Unemployment is assumed to approximate 4
percent of the civilian labor force, or about the average pre·
vailing during the postwar years. Furthermore, the Report
assumes that the downward trent] of agricultural employment
will continue and that only 5,500,000 persons wiII be em·
ployed in agricultural pursuits in 1965, reflecting a decline
of 1,200,000 from the level in 1953.
Total government employment is expected to rise to about
7,500,000, assuming that the number of Federal employees
remains constant, while state and local government employ·
ment is expected to increase nearly 1,600,000 over the 1953
level. The remaining work force, about 60,000,000, will be
employed in nonagricultural establishments, reflecting a rise
of 10,700,000 from 1953 to 1965.
Average annual hours per man are assumed to decline
about 0.8 percent per year, a reduction of about 4 hours per
week in the 12·year period. On the other hand, output per
man·hour is assumed to rise 3 percent per year in agriculture
and about 2.5 percent per year in nonagricultural industries.
PROJECTIONS OF TOTAL POPULATION IN THE UNITED STATES
8Y AGE GROUPS, JULY I. 1955 AND 1965
(In thou sands)
Age
All ages .. ..................... .
"( 1) Total population for the United Slates is estimated
at 190 million, ...
"(2) Population 14 years of age and over is estimated at
137 million, ...
"(3) The number of households is estimated at 56
million, ... "
The detailed projections of population, as shown in the
accompanying table, reveal several important facts about the
composition of the population of the United States in 1965. It
is apparent that the larger increases are expected in two major
groups. First, in that portion of the population between the
Under 5 years ... ..•.•....•..•.....
5 to 9 yeers .•. .. ..•.. .............
10 to 14 years .................... .
15 to 19 years ..... ... .... .... .... ,
20
25
30
35
40
45
50
55
60
65
70
to 24
to 29
to 34
to 39
to 4.4
to 49
to 54
to 59
to 64
to 69
to 74
years .................... .
yeors •... .. •.... .. . .... • .•
yeors ..... ............... .
years ••• • • ...•.... .... .. . .
years ..... ............... .
yeors ............ . ... . . .. .
years ••••• .. .... ..........
y e ars ..... ............... .
years ...•• ...•.•..•.•....•
years .•.•... .••.•.....•...
years ••.•..•......••......
7S years and over ..... • •..•.......•
1955
1965
164,782
17,917
17,145
13,342
11,190
10,775
11,713
12,367
11,618
11,236
10,118
8,830
7.873
6,685
5,315
4,092
4,566
189,916
18,884
18,732
18,762
17,197
13,463
11,361
10.908
11,761
12,300
11,386
10,741
9,331
7,754
6,381
4,807
6,148
SOURCE: United States Bureau of the Census.
MONTHLY BUSINESS REVIEW
47
PROJECTIONS OF TOTAL POPULATION IN THE UNITED STATES
BY AGE GROUPS. JULY 1,1955 AND 1965
Aoe Classes
75 years and over
70 t074
65 to 69
60 to 64
55 to 59
~ Increase to 1965
~ Decrease from 1955
50 to 54
45 to 49
40 to 44
LClbor force
laroely from
this group
35 to 39
30 to 34
25 to 29
20 to 24
15 to 19
10 to 14
5 to 9
U ndor 5 yeor$
Under 20
0
2
10
4
12
,of Toiol Population)
SOURCE I U. $ . Bureau of the CenIUS,
With the above assumptions, the Report then projects
potential total national production to be $535,000,000,000
in 1965.
factors Making for Growth in Demand
Having projected the output of goods and services to 1965,
the Report turns to the development of the various factors
constituting the demand for that output. The first major
component of demand, government, is estimated by combin·
ing the projections of three parts - national security; Fed·
eral, state, and local construction; and payrolls and miscellaneous goods and services.
The Report states that, in 1965, " ... a continuation of international conditions will result in expenditures for national
security programs of about $40 billion per year compared to
$52 billion in 1953 and a recent rate of slightly under $45
billion." This projected rate of expenditure allows for pay
increases for civilian and military personnel and for expenditures in line with a level of 3,000,000 uniformed personnel
and a maintenance basis of major purchases.
Federal, state, and local public construction expenditures,
according to the Report, " .. . are assumed to increase from
$10.1 billion in 1953 to at least $17 billion by 1965, of which
$4 billion would be for schools, $6 billion for highways, and
$7 billion for all other." Behind this projection is the belief
that the growing population and the backlog of current needs
will maintain a high rate of public construction for many
years. The Report indicates, however, that the backlog should
be filled by 1965.
Payrolls of government employees and other purchases
(except for national security and construction), the third part
of government demand, " ... are assumed to increase from
$23.1 billion in 1953 to $40 billion by 1965, reflecting
largely the assumed changes in State and local government
employment and in Government pay scales." It could be noted
that the expected increase in retired workers also would cause
some increase in service expenses, such as social security.
It is assumed further by the Report that Federal tax rates
will continue to decline and that the Federal budget will be
balanced by 1965. However, state and local government units
are expected to operate at a $2,000,000,000 deficit. Needless
to say, these assumptions could be rendered invalid ' by any
significant change in economic conditions and, therefore,
would have a differing effect upon the projections.
Private Investmen.
The second major component of demand is private investment. The estimates of this demand are based on four assumptions. First, " ... residential nonfarm construction is assumed
to increase from $11.9 billion in 1953 to $16 billion per year
by 1965." This estimate is based upon the housing facilities
needed to accommodate the expected 56,000,000 households
in 1965. The Report continues that the estimate provides
" ... (a) New housing to increase the housing supply to take
care of the additional 800,000 to 900,000 new households
expected each year by the mid-1960's; (b) for replacement of
wornout or destroyed residential structures; (c) for improve·
ments on existing structures; and (d) for conversions." Assuming the same ratio of nonfarm housing starts to residential
nonfarnl construction expenditures in 1965 as in 1953, the
Report indicates that private nonfarm housing starts in 1965
would approximate 1,400,000, compared with 1,068,300 in
1953. Substantiating this projection are the data presented in
48
MONTHLY BUSINESS REVIEW
GROSS NATIONAL PRODUCT(CONSTANT DOLLARS)
PER MAN-HOUR IN AGRICULTURAL AND IN
PRIVATE NONAGRICULTURAL INDUSTRIES,
ES T
=1 =1:j::M=AT:::rE=D=,):::19=6+5=1===1
• .00
,,,,,~,,,.~,,+=1:::r91=O=-l=19=5+3=; r::
' .00
I
I
I
.oo''--+-I:.--tl_-+I_ +I_+-I-+_+--I-I-JI_ -d
J.
1
'·.O"':~~~;~~:~~--1if-'_I"_"+N_'_"'-:l".."..." ,ItF~: :~" _-----j>__- -.j.-I _T_-+-~-J
I
"
,
_L_..J--
, I
/~-'"
1...-;...../"..,
'oo!~~~~~~~~~~~;;r~g~~~
.
.9
~~
7
.60"""
A'ilrlcu ll ural
.....
I
.50
,I
19U
!~~O
19J~
1940
194 5
1950
19!>~
1960
1965
SOURCE Join' Cern",ill .. on lhl [ cOfIornlc Ruo"
E, gM_. rhl,~ CO"9," .. , S I CO"~ SIIIIO<I:
the population table, which shows the largest increases occur·
ring in age groups in which people are looking for new
housing to accommodate new households.
The second part of private investment is business expendi·
tures for plant and equipment. These, the Report assumes
will " ... amount to about $60 billion per year by 1965 com:
pared to $38 billion in 1953." Of this total amount projected
for 1965, $25,000,000,000 will be used to replace fixed assets
actually r.etired each year, and approximately $35,000,000,000 will be needed for expansion and accelerated replaceme?ts. The Report further indicates that the projection implies
a ~Igher ~ate of modernization of facilities than presently pre·
vails. It IS noted that possibilities of atomic energy develop·
~ents, the feasibility of industrial dispersion, and the
Improved corporate profit position resulting from increased
output and lower tax rates should lend support to the expected
level of plant and equipment expenditures.
A third segment of private investment demand concerns the
level of net foreign investment. The Report states that this
item " ... in 1965 is assumed to be $2 billion per year com·
pared to minus $1.9 billion in 1953." However, it is noted
that the estimate reflects primarily a direction of change
rather than an absolute magnitude. Many uncontrollable fac·
tors might affect this level of investment, so the estimates must
be considered very tentative.
tee decided that, first, it was necessary to project disposable
personal income and personal savings. The Report indicates
that " ... disposable personal income is estimated to rise from
$250.1 billion in 1953 to $380 billion in 1965." This estimate
is predicated, in part, upon the following assumptions. First,
personal tax rates will be lowered; second, wages and em·
ployment will increase; and, third , corporations will payout a
larger proportion of net profits in the form of dividends.
Personal savings are assumed by the Report" ... to decline
from the average of 7.9 percent prevailing over the last 3%
years to an average of about 6 percent of disposable personal
income by 1965." This rather sharp change is based upon the
?eed to provide a larger market for consumer goods, which,
In turn, will encourage a higher level of business investment.
The Report continues that the future rate of savings is one of
considerable debate and that the projection given above is
lower than most estimates. Many factors affect the rate of
savings, including the age distribution of the population,
changes in retirement funds, the development of new products, and the changing pattern of consumer debt. It is noted
that after 1965 there will be even more pressure toward a
lower savings rate occasioned by the sharp increase in new
family formations, which, of course, will require substantial
purchases of household goods.
In retrospect, assuming that disposable personal income
reaches $380,000,000,000 and that the savings rate equals 6
percent - or $22,000,000,000 - in 1965, then " ... con·
sumer expenditures could rise from $230.1 billion in 1953 to
$357 billion in 1965 in constant prices." Separate projections
also are made at 1953 prices for durable goods, nondurable
goods, and services expenditures. In brief, the Report shows
durable goods consumer purchases rising from $29,700,000,·
000 in 1953 to $50,000,000,000 in 1965. Nondurable goods
expenditures are assumed to increase from $118,900,000,000
in 1953 to $185,000,000,000 in 1965. Expenditures for servo
ices are expected to rise from $81,400,000,000 in 1953 to
$122,000,000,000 in 1965.
SUMMARY OF PROJECTIONS OF SUPPLY OF GROSS NATIONAL
PRODUCT IN 1965 WITH COMPARATIVE ACTUALS FOR
CALENDAR YEAR 1953
Actuels,
Items
Consumer Demand
The fina]' major component of demand which is considered
i? the Report is consumer demand. In order to make a projec·
tIon of consumer expenditures, the staff of the Joint Commit·
ProieCfed,
1965
Popvlation (in millions):
~~~;~;;~~d'~~~r:::::::::::: :: ::: : ::::: ::::: ::: :: :
Totollabor force (in millions) • •.. .•• • • •• •• ••• • •. • •• •••• . •
. Part f?ur of private investment demand is the change in
InventOrIes. The Report states that the " ... annual increase in
inventories is assumed to be $3 billion per year by 1965 com·
pared to $1.5 billion in 1953." However, it is explained that
this projection reflects an average increase over a period of
years and that a slower rate of accumulation might be pos·
sible, depending upon the relative efficiency of operations.
1953
Arm ed Forees •• . •• • ••• • •••••• • •••• ••• • • • • . ••• • . ••••
Civilian labor fo rce •••..•..•••• ' " •..•••.. . .•• • •.• • •
159.6
116.5
67.0
3.5
63.5
1.6
2.5
190.0
137.0
79.0
3.0
76.0
73.0
5.5
67.5
60.0
7.5
3.0
4.0
2,465
2,0 40
2,240
1,855
$1.314
$1.865
$4 .190
Employe d, tolal • •••.•••• .. • ••.••....•••••.•. • •.• •
Agricultural •• . • • • • •• • •• .• •• ••••..••••.•••..•• ••
61.9
6.7
Nonag ricultural •• •.. • .••.• . ••••. . ..•.•..••• . •••.
55.2
Private •••• •• ••••••••• • •• •• • • • .•..•••••.•• • •
Government •••••• • •••••••••• •• ••••••• •••••••
Unemployment • •• •••••••••• • ••••••••• • •••• • ••••••
Percentage of civilian labor for ce . ........ . ... .. .. .
Avera ge annual hours (private):
Agricultural ••••••••••••••••••••••••••••••••••••••••
Nonag ricultural • •• • • •••••••••••••• . • • •••••••• • • •••••
Output per man-hour (p rivat e) (1953 doll ars):
Agricultural • •• • ••• • •••••••••••• . •••. . •• • •••• • ..•• .•
Nonagricultural • •• ••••••••••••••. .• • .• •• • • . ••• . . .•. •
.4.9.3
5 .•
$3. 100
Potential gros5 nationol p roduct (billions o f 1953 dolla rs):
Agricultural ••• • .• •• •.• ••• . • . • . • . • • ••••• • • • ••••• . •••
Nona gricultura l (privo te) • •••••• .• • • • • • •••••••• • ••• .• •
Government •••••••••••••••••••••••••••••••••••••••
$ 21.7
$311.8
S 3 1.4
$ 23.0
Total • ••••••• • •• • ••••••••••••. . •••••••••• • ••.•
$364 .•
$535.0
SOURCES: Joint Committe e on the Economic Report.
Unit ed States Deportment of Comm erce.
$4 66.0
$ 46 .0
•
49
MONTHLY BUSINESS REVIEW
It is noted by the Report that the latter projection is more
than could be expected on the basis of past trends, but these
are inflated to take into account the assumed effect of increased leisure time, the larger proportion of retired workers,
and the increase in educational expenses resulting from the
expected increase in the number of cbildren at school age. It
could be noted also that the large increase in demand for
consumer durables is based on the increase in population in
age groups wherein people need such goods to furnish new
houses.
SUMMARY OF NATION'S ECONOMIC BUDGET FOR "MAXIMUM"
ECONOMIC GROWTH, ACTUAL CALENDAR YEAR 1953;
ESTIMATED CALENDAR YEAR 1965
(811110ns of 1953 dollars)
Actual,
calendar
1953 1
Estimat.~
Incomes from and expenditures for gross national product
PERSONAL
Income, total disposoble •••••••••••••••••••••••••••••••
250_1
380
297
118.9
81.4
50
185
122
Expendituresl
Durable goods •••••••••••••••••••••••••••••••••••••
Nondurable goods •••• •• ••• • •• •••• ••••••• •• •••••••••
Ser....ic:es •••••• •••• ••••••• • ••••••••••••••••••••• • •••
Total national demand for goods and services at 1953 prices
- obtained by combining the projections of the major components - is revealed by the Report as approximating " ...
$535 billion per year of which Government could account for
$97 billion, business for $81 billion, and consumers for $357
billion." In other words, from 1953 to 1965, government demand as a percent of the total will decline from 23 percent to
18 percent. In contrast, business demand will increase from
nearly 14 percent to 15 percent, and consumer expenditures
will rise from 63 percent to 67 percent of total demand.
calendar
1965
Total expenditures ••••••••••••••••••••••••••••••••
230.1
357
I+J ... ....... ••...••.•.••• ••• •••••••••••••.•
+20.0
+23
S<:lvings
=
8USINESS
Incomes:
Corporate undistributed proflls ••••••••••••••••••••••••
Capital consumption allowances ••••••••••• • ••• • •••••••
Inventory valuation adjuslment •• ••• •••••••••••••••••••
-La
8.9
27.2
12
48
Total incomes •••• • •• •• •••••••••••••••••••••••••••
35_1
60
E.penditureS!
Residentia l nonfa rm construction •••••••••••••••••••••••
Plant and equipment ••••••••••••.•••••••••••••••••••
Chang e in business inventories ••• ••••• •• •• •••••• ••••• ••
Net fo reign investment •••••••••••••••••••••••••••••••
11.9
38.0
1.5
-1.9
16
60
3
2
a
T0101 expenditures ••••••••••••••••••••••••••••••••
49.5
81
(-I ...................................... .
-14.4
-21
36.0
8.8
17.4
43
62
16
26
Total incomes •••••••••••••••• • •••••• • •• •••• • •••••
78.5
95
Expenditures;
Maior nolional security •••••• • • , • • ••• •• •• , ••••••••• , •
Pub lic construction, civilian ••••• •• • • •• •• •• • , •••• , ••••• •
Schools •••••••••••••••••••••••••••••.•••••••••••
Highways • •••••.•• •• •••••••••••• , • •• • •••••••••••
Other public construction ••••••••••.••••••••••••••••
All other • • • • ••••• •• • •••••••••• •• •• ••• ••• • • •••• ••••
52.0
10.1
17
3_2
5_2
23_1
40
17
4
6
7
40
Factors Making for Stablll:zotion at High levels
Dina ....ings
The Report indicates that "the comparison of estimates of
demand and supply for 1965 suggests the possibility of a
balanced economy at 'maximum' employment a decade
hence." On the other hand, problems relating to the changes
necessary to achieve that balance and deliberate alterations in
public and private policies to promote the growth in demand
also are pointed out by a comparison of the demand and
supply projections. Examples of the adjustments needed are
suggested by the Report as:
Income~
Total expenditures ••••••••••••••••••••••••••••••••
85.2
97
"(1) A shift in the pattern of consumer spending and saving such as to reduce the ratio of personal savings to disposable personal income from the recent rate of about 8 percent
to about 6 percent in the face of some forces which may operate in the direction of a higher rate of perhaps 9 to 10
percent_ ...
Savings ( + 1 or dlssovlngs (-) ••••••••••• •• • ••••••••• •••
-6.6
-2
"(2) The pressure of a rapidly growing population upon
State and local governments for increases in traditional government services, such as schools, highways, hospitals, etc.,
will create a need for new means, new methods, new institutional arrangements to enable State and local governments to
meet these demands."
to clear the market at 'maximum' rates of economic growth.
The rigidities introduced into the economy by the growth of
large organized economic groups in business, labor, and agriculture might offer some obstacles to such adjustments."
However, the Report also reveals two other possible adjustments which could bave a marked effect upon the projections.
First, it is stated that " ... a continuation of past trends is
assumed toward shorter weekly hours and increased vacations
and holidays. A greater reduction of annual hours of work per
employee by the equivalent of perhaps two or three hours per
week would reduce the potential output by between $20 to
$30 billion."
Secondly, the Report indicates that " __ . the relationships
between prices, wages, and profits might shi ft in ways not
clear at present to contribute to generating demand sufficient
=
GOVERNMENT'
Personal tax and nontax payments •• •••••••••• • , •••••••
Businen tax and nontax liabilities ••.••• •••••••• ••• •• •••
Contributions for social insuronc • •••••••••••• ••• ••• •• •• •
Less nongrO$s notional product payments ••••••••••••••••
Statistical discrepancy
(+1 or (-I . ........... . ...... ... .
Grand totol •••••••••••••••••••••••••••••••••••••
51.1
=+1.0
=
364.9
=a
-535
I Detail may not add to totals due to rounding.
I Indudes Federal, Stote, and local governmenl.
SOURCESI Joint Committee on the Economic Report.
United Stoles Department of Commerce.
In summary, the projections contained in this Report indio
cate the great potential for economic progress in the United
States during the next decade. Generally, the assumptions in
the Report are those trends and conditions which will allow
for maximum growth. However, it should be pointed out that
a failure to fulfill any or all of these assumptions would alter
considerably the end results. Thus, in evaluating the results,
the user constantly should remember the conditions under
which the Report was prepared. Nevertheless, the Report does
present to the alert businessman a guidepost as to the direction
and relative magnitude of the economic gains expected during
the next 10 years. To the extent that it provides the businessman with a firmer basis for arriving at management decisions,
the Report is a valuable tool.
50
MONTHLY BUSINESS REVIEW
REVIEW OF BUSINESS, AGRICULTURAL, AND FINANCIAL CONDITIONS
Department store sales in the
Consumer buying at District
Eleventh
Distdct during February
department stores during Febcontinued to exceed the year·earlier
ruary was 4 percent above the
level for the sixth consecutive month,
year-earlier level but 9 percent
although on a seasonally adjusted
below the near peak of January. Consumer durable goods are showing a better basis, they were down sharply from the near peak in January.
sales record than the nondurables. Furniture stores The dollar volume of sales was down 9 percent as compared
in the District maintained a high volume of sales in with January but was 4 percent greater than in February
February, registering a 24-percent increase over 1954. Although deparhnent store sales during the latter part
of February were at about the same level as a year ago, sales
February 1954.
Timely rains were received during the latter part
of March, primarily in northern and central Texas
and in the northeastern part of the District. Low temperatures following the rains damaged fruit and
vegetables in northern Texas counties. Green feed
is available in the eastern third of the District; however, supplemental feeding continues in west Texas
and in New Mexico. Cash receipts from farm marketings in the District states in 1954 were 5 percent
below those in 1953.
Aggregate proved reserves of crude oil and natural gas liquids in the District states registered a
small increase during 1954 and at the end of the
year stood at an all-time high of 25,191,000,000
barrels, or 72 percent of the national total. Both
crude production and refinery crude runs in the District rose moderately during the first part of March
to reach record highs.
Nonagricultural employment in the District states
increased moderately during February, with gains
occurring in nearly all industries. Retail trade employment, although showing a further seasonal decrease, experienced gains in certain segments.
Manufacturing employment remained the same as in
January and was slightly below the year-earlier level.
in the first 3 weeks of March showed a more than usual upturn for this time of year. As a result, sales for the first 11
weeks of 1955 were 11 percent higher than in the same period
of 1954.
The sales index for February, adjusted for seasonal vada·
tion , was 125, compared with 121 for the same month in
1954 and 135 in January.
Sales of consumer durable goods continued at an unusually
high level in the District in February, registedng a year·toyear gain of 15 percent. Sales of major household appliances
were 20 percent higher than in February a year ago; domestic
floor coverings, 37 percent higher; and radios and television
sets, 39 percent higher. These percentage increases reflect not
only the high levels of sales this year but also the relatively
poor sales of such items a year ago. Sale! of nondurables during February were less than 1 percent above a year earlier.
Percentage increases of 5 percent in men's and boys' wear,S
percent in small wares, and 2 percent in women's and misses'
ready·to·wear apparel were nearly offset by a decrease of 5
percent in piece goods and household textiles and of 6 percent
in women's and misses' ready.to .wear access odes.
RETAIL TRADE STATISTICS
(Percentage change)
STOCKSl
NET SALES
Fo!b. 1955 from
The value of construction contract awards in the
District during February rose 5 percent above January and 39 percent above February 1954. Residential awards were 71 percent above those of a year
ago.
During the 5 weeks ended March 23, earning assets of the District's weekly reporting member banks
decreased $55,772,000, or 1.5 percent, reflecting
mainly decreases in business and agricultural borrowings, loans to banks, and holdings of United
States Government securities. Deposit trends were
mixed, with demand deposits declining 1.6 percent
and time deposits increasing 4.4 percent.
line of trade
by area
Feb. 1955 from
2 mo. 1955
compo with
2 mo. 1954
1954
Jon.
1955
4
13
5
7
2
2
-4
4
4
-9
-2
-7
-5
-12
- 12
-10
-5
-10
9
15
12
9
7
-3
8
-6
-3
-5
-3
24
65
12
38
-5
15
23
0
0
28
- 3
2
-13
3
-3
-8
21
37
19
33
- 6
15
10
8
_1 8
13
12
4
- 12
-7
-2
-16
-14
7
13
Feb.
feb.
1954
Jan.
1955
OEPARTMENT STORES
TotoJ Eleventh District ••.••..•••• ••
Corpus Christi ••• . .•••.• . •• .•. •••
Dalles ••••••••••.•.. . .• .• ••.•••
EI Paso •••••••• . ••••.• . ••. •.•.•
Fort Werth •.•••..•• • ••• . •.•••••
Houston ••.••••••.• . ••.•• ••• ••••
Shreveport, La ....... . . .. .. . .....
W'Cco •••.•• •• ••• ••••• .••••.•• •
Other cities •••••••••••••••••••••
9
9
6
3
7
1
9
9
12
11
12
11
11
5
9
2
fURNITURE STORES
TOfol Eleyenth District ••.•..•.•••••
Austin •••••••••••••••••••••• •• •
Dallas •••••••.•••••••••••••••••
Houston •• . • •..•••••••••...•••••
Port Arthur •••.•.•.• • •• • . . .••.. •
San Antonio •..•• •...• ••. • •••• . •
Shreveport, La ... ..... .. ....... . .
Other cities ••••••••••• • •••••••••
HOUSEHOLD APPLIANCE STORES
Total Eleyenth Di,trict ... ..... .. . ..
DallaL ••. . •••••.••••••••.•••••
I
Sfocks et end of month.
0
4
-5
9
14
9
- 1
-2
1
t
MONTHLY BUSINESS REVIEW
INDEXES OF DEPARTMENT STORE SALES AND STOCKS
(1947-49
= 100)
ADJUSTEDl
UNADJUSTED
Area
SALES-Dai ly average
Eleventh District • •••••••••• •
Dallas ................... .
Houston .................. .
STOCKS-End of month
Eleventh District • .••........
Feb.
Jen.
101
107
112
107
110
122
225
226
251
126p 115
121
Dec.
Feb.
Jan.
Dec.
feb.
98
102
110
125
126
143
135
138
154
134
135
149
121
120
140
125r
129p 128
133
,28r
Feb.
1955 1955 1954 1954
1955 1955 1954 1954
1 Adjusted for seosonol variation.
p-Preliminary,
r-Revised.
Department store instalment credit outstanding in the District at the end of February was 12 percent above a year ago
although down seasonally 2 percent from the end of January.
Charge accounts outstanding decreased 18 percent from
January to February, a little more than the usual seasonal
decline, but were 3 percent above a year earlier. Collections
on charge accounts during the month, which were 8 percent
above those in February 1954, amounted to 4.6 percent of the
first-of-month balances.
Cash, charge, and instalment sales in District department
stores decreased sharply from January to February. Compared with year-earlier figures, however, instalment sales rose
31 percent, while cash sales were down 2 percent and charge
sales declined 1 percent_
Department store inventories rose seasonally 9 percent
during February and at the end of the month were 1 percent
higher than a year earlier. The February adjusted stock index
was 129 percent of the 1947-49 average, compared with an
average of 13] for the preceding 6 months and 128 for February last year. Although orders outstanding declined 5 percent
during the month, the total outstanding at the end of February
was 13 percent above that of a year ago.
The improvement in District furniture store sales which
became apparent in the fall of last year was maintained
through February. Total sales were unchanged from the
January level but were 24 percent higher than in February
1954. Credit sales, with a 3-percent increase during February, continued to show a marked gain over the year-earlier
level; cash sales were up 3 percent from the February 1954
volume. Furniture store inventories were up seasonally 4
percent from January but were about the same as a year ago.
Light to moderate rains were received over the eastern third of the
District during the latter part of
February. In much of this same area,
light and widely scattered showers
fell during mid-March, but the moisture was dissipated largely
by warm temperatures and strong winds_ Additional precipi.. tation fell during the latter part of March, with the larger
, amounts occurring in central and north Texas and in the
northeastern parts of the District. Except for a few localized
showers, there was little or no precipitation in west Texas or
in New Mexico. Low temperatures following the rains damaged fruit and vegetables in northern Texas counties.
51
Recent rainfall will be beneficial to wheat in the Low RoIling Plains, but the crop in the High Plains of Texas and New
Mexico continues to suffer from lack of moisture. Warmer
temperatures and strong winds during March caused further
deterioration of wheat, necessitating emergency tillage in the
High Plains area.
Corn planting is nearing completion in much of the eastern
third of the District, and early plantings are up to a stand
as far north as the Red River_ Planting of sorghums in the
Coastal Bend of Texas has been completed, and much of the
crop is already up to a good stand. Cotton seeding is almost
completed in the Coastal Bend area, while planting is under
way along the Upper Coast of Texas. In the Low Rolling
Plains and southern High Plains, seedbed preparation for
sorghums and cotton is almost complete.
Vegetables in the commercial areas of Texas have made
good progress in overcoming the effects of low temperatures
in February. Warm weather in the past few weeks has been
favorable for the rapid development of early spring-planted
cantaloupes, sweet corn, tomatoes, and watermelons. Transplanting of tomatoes is well advanced in the Yoakum and
Milano-Rockdale areas of the State. In most south-central and
central Texas counties, planting of watermelons has been
active. Irrigated onions are making good growth in south
Texas, although rain is needed in the non irrigated sections.
Commercial acreage of early spring tomatoes in the Lower
Valley of Texas, as of March 1, 1955, is indicated at 34,000
acres, 1,000 acres less than that harvested in 1954. The Texas
early spring onion crop is indicated at 37,600 acres, or about
5 percent below the acreage harvested in 1954. The indicated
acreage of early summer watermelons in District states is 12
percent greater than in 1954. Increases in 1955 are expected
for Texas, Louisiana, and Oklahoma; Arizona growers intend to plant fewer acres.
The harvest of Texas grapefruit and oranges is nearing
completion. Early February frosts caused little damage to
fruit, although many young trees were partially to totally
defoliated and the 1955 bloom was delayed. Because of the
severe freeze in Arizona from February 18 to 22, the forecast
for 1955 grapefruit production in that State declined from
3,000,000 boxes to 2,000,000 boxes, and production estimates
for Valencia oranges were lowered from 700,000 boxes to
600,000 boxes.
Clovers, rescue grass, and small grains are making excellent
growth over the eastern third of the District, and surplus
LIVESTOCK RECEIPTS
(Number)
FORT WORTH MARKET
february
Class
1955
58,899
16,339
10.035
3.283
21.133
10,924
29,682
20,636
1]0,070
2,595
'20,730
1954
44,595
Cattle .... ..... .
43,679
Calves • ........ .
14.266
57,540
13,909
43,043
Sheep . ........ .
55,582
50.420
1 Includes goats.
1955
february
1954
January
1955
January
Hogs •.•••••••• •
SAN ANTONIO MARKET
February
February
I B,235
67,952
68,203
17,392
1955
MONTHLY BUSINESS REVIEW
52
CASH RECEIPTS FROM FARM MARKETINGS
(In thousands of dollars)
January-December
December
Stale
1954
1953
1954
1953
t~~i~~~~·.:::::::::: :
$ 60,177
$ 364,786
362,16"
186,600
527.911
1,894,159
$ 415,123
.411.935
188.476
577,362
1,922,480
$3,335,620
$3,515,376
Oklahoma ... • . •.••••
Texas •••• • .•. • •. , ••
43,377
21,190
38,472
214,469
$ 78,819
58,387
23,181
..U ,450
227,215
Total .........•.••
$377,685
$432,052
New Mexico ........•
SOURCE: United Sialel Department of Agriculture.
green feed is available in most of the area. I n the eastern
Plateau, Cross Timbers, and parts of the Low Rolling Plains
of Texas, ranges and pastures are green, and the recent rains
provided moisture needed to maintain development. Over the
western half of Texas and in southeastern and southern New
Mexico, heavy supplemental feeding continues, with little
prospect for recovery of ranges until additional moisture is
received.
Goat shearing is nearing completion in Texas, and the
spring movement of yearling lambs is. under way. In south·
eastern New Mexico, sheep shearing is in progress, and early
lambing and calving are occurring under favorable weather
conditions.
Total wool production in District states in 1954 is esti·
mated at 59,227,000 pounds, or 2 percent above production in
1953, according to the United States Department of Agricul.
ture. Increases were about 20 percent in Oklahoma and 4
percent in both Arizona and Texas. Wool production in New
Mexico in 1954 was about 7 percent below that in 1953, while
production in Louisiana remained unchanged.
Cash receipts from wool in District states in 1954 were
about 3 percent below those in 1953 because of lower average
prices. Production of mohair in Texas, New Mexico, and
Arizona was larger in 1954 than in 1953, but cash receipts in
1954 were below those in the preceding year.
In both the Nation and the District states, cash receipts
from farm marketings in 1954 wer.!'! 5 percent below those in
1953, according to the United States Department of Agricul·
ture. Decreases in District states were 12 percent in Arizona
and Louisiana, about 9 percent in Oklahoma, approximately
2 percent in Texas, and 1 percent in New Mexico.
FARM COMMODITY PRICES
Top Prices Paid in Local Southwest Markets
Commodity and marke t
COTTON, Middling 15 / 16·inch, Dallas..••
WHEAT, No.1 hard, Fort Warth . ••••.. ..•
OATS, No.2 white, Fort Worth ••••• .....•
CORN, No.2 yellow, Fort Worth •••..•..•
SORGHUMS, No.2 yellow, Fort Worth ••.•
HOGS, Choice, Fort Worth .• • •.•..•..•••
SLAUGHTER STEERS.. Choic e, Fort Wo rth •..
SLAUGHTER CALVES, Choice, Fort Worth . .•
STOCKER STEERS, Choice, Fori Worth .••••
SLAUGHTER SPRING LAMBS, Choice,
Fort Worth •.. ..• . •• • •. .....• •••••••
BROILERS, south Tuas .. ....... . ..... . . .
Week ended Comparable Comparable
March 23,
wflek
week
Unit
1955
last month
last year
lb.
b,.
b,.
b,.
$
.3275
2.67
,97
1.76~
.3370
2.74
1.00
1.80
2.71
17.75
cwt.
cwt.
cwt.
17.00
CWI.
cWI.
22.00
22.50
26.00
22.00
23.00
cWI.
23,50
.31
.27
Ib,
2.63
$
25.00
$
.34 15
2.71V2.
1.03*
1.82!,4
2.98
26.75
23.00
20.50
21.00
25.50
National average price support levels have been set at 90
percent of parity for 1955 upland cotton and 75 percent for
extra-long staple cotton, according to the Department of
Agriculture. The minimum level of support for Middling
% .inch cotton will be 31.70 cents per pound, gross weight,
while the support price for extra.long staple cotton will be
55.20 cents per pound, net weight.
Flaxseed and cottonseed will be supported at 65 percent of
parity, compared with 70 percent during the past year. The
national average support price for flaxseed will be $2.91 per
bushel compared with $3.14 per bushel in 1954, and that for
cottonseed, $46 per ton compared with $54 per ton for the
.
,
prevIOus year 8 crop.
During the 5 weeks ended March
23, total resources of the District's
weekly reporting member banks declined $43,848,000 - or less than 1
percent. The decline resulted primarily from decreases of $23,640,000 in loans and discounts
and $32,132,000 in total investments that were offset partially
by a rise in cash assets. Changes in liabilities included a
$63,882,000 decrease in demand deposits, a $32,774,000 increase in time deposits, and a $17,203,000 reduction in other
liabilities.
The largest decline in loans was the $21,486,000 decrease
in borrowings of businesses and farmers. However, during
most of the 5·week period, strong demand~ were evident on
the part of sales finance companies, construction firms, and
manufacturers of petroleum and related products while com·
modity dealers sharply reduced their borrowings. Other
changes in loans included a $13,050,000 decrease in loans to
banks and a rise of $13,856,000 in all other loans, which con·
sist mainly of consumer credits.
.
The decrease in total investments was caused by the $39,·
289,000 decline in United States Government securities, which
CONDITION STATISTICS OF All MEMBER BANKS
Eleventh Federal Reserve District
(In millions of dollars)
Feb. 23,
1955
Feb. 24,
Loans and discounts • .. ..... .•• ..... ••. •• ••••.•
United States Government obligations .•.•. •....•.
Other securities . .•. . .........•... . ....••...•.•
Reserves with Federal Reserve Bank ••. ........•..
Cash In vaulte .• •• .... .....•. .. ....•.••.....• .
Balances with banks in the United States .• .•.••.•.
Balances with banks in for.ign counlriese •• .• •••• •.
Cash items in proc.ss of collection ••• • .• .•. . ..•• . •
Other anets e . ... .... .........•••.•...•..•.. .
$3,513
$3.120
2,400
457
898
132
Item
ASSETS
2,505
547
960
127
1.076
2
422
185
1954
Jan. 26,
1955
2
39'
160
$3,494
2,553
539
1,019
135
1,077
3
348
187
1,048
TOTAL ASSETSe ........... •.••• . ••..•.•.. . .
9,337
8,6 11
9,355
LIABILITIES AND CAPITAL
D.mand d.posits of banks • . • . ••• .. .... •.•....•
Other demand depolits .•• • . ..•••...•...•.•. ...
TIme deposits •.. •.••........•••.•.•. . .••••...
1,0 03
6,420
1,177
967
5,955
1,093
6,369
1,161
Tota l deposits . .........••••... .. ..•.•..•...
Borrowings· . ..........•• • .. ....•.. •. . ...•...
Other Ilabllltles e .........• ••...• ............ ..
Totcl capitol accounts••••• .. .. .. •• . •• .. • .... ..
8,600
23
84
630
7,939
28
71
573
8,623
26
89
617
TOTAL LIABILITIES AND CAPiTAL. ... ..... .... .
9,337
8,611
9.355
.24
e-Estlmated.
1,0 17
MONTHLY BUSINESS REVIEW
CONDITION STATISTICS OF WEEKLY REPORTING
MEMBER BANKS IN LEADING CITIES
CHANGES IN FACTORS AFFECTING
MEMBER BANK RESERVE BALANCES
Eleventh Federal Reserve District
Eleventh Federal Reserve District
(In thousands of dollars)
(In thousands of dollars)
Morch 23,
1955
hem
March 24,
1954
All other loons ••• •••••••.•••••••••••••••••
174,338
10,155
455,571
133,580
14,509
399,277
173,229
23,205
441,715
Gron loans .............................
leu reserves and unallocated charge-offs . .
2,178,913
22,948
1,937,133
17,196
2,202,095
22,490
Net loans ..............................
2,155,965
1,919,937
2,179,605
U. S. Treasury bills .........................
U. S. Treasury certiAcotes of indebtedness ..... .
U. S. Treasury rtOles ........................
U. S. Govomment bonds {inc. gtd. obligations}...
Other securities ............................
62,253
47,150
273,655
867,499
255,214
138,851
169,838
161,190
772,202
204,085
60,400
71,619
283,434
874,393
248,057
Total investmenh ........................
Cosh items in process of collection .............
Balanc&s with banks in the United States ... ....
Balances with banks in foreign countries .. ......
Currency and coin ..... ....................
Reserves with Federal Reserve Bank ........ . ..
Other auets ..............................
1,505,771
363,388
452,280
1,635
44,828
589,013
124,975
1,446,166
294,618
446,534
1,044
46,378
557,544
97,128
1,537,903
362,970
446,251
1,576
43,196
574,427
135,775
Reol estote loans . ..............•..•...••.•
loons to banks . ...........................
CHANGEl
Feb. 16,
1955
ASSETS
Commercial, industrial, and agricultural loans •••• $1,'21,280 $1,301,041 $1,442,766
locns to brokers and dealers in securities . .....
13,588
10,875
16,300
Other l()(lns for purchasing or carrying securities.
103,981
77,851
104,880
t
53
TOTAL ASSETS ••••••••••••••••••••••••
5,237,855
4,809,349
5,281!703
LIABILITIES AND CAPITAL
Demand dersOliis
Individua s, partnerships, and corporations ....
United Stotes Government .................
States ond political subdivisions . ...........
Banks in the United States . ................
Banks in 10reign countries . ................
Certifted and officers' checks. etc.... ....•...
2,787,889
84,525
191,919
875.191
16,100
64,583
2,542,270
117,663
199,887
827,949
8,711
55,785
2,818,139
93,490
176,220
903,384
15,666
77,190
Total demand deposits ..................
4,020,207
3,752,265
Time deposits
IndjvjdlJOls, partnerships, and corporations ....
United States Government .. . .... . .. . ......
Postal savings .. ........... ... ...........
States and political subdlvi,ions . ...........
Banks in the U. S. and foreign countries . .. . ..
---
653,792
13,361
452
109,657
602
540,740
9,812
450
125,912
2,083
635,229
13,362
452
94,934
1,113
4,084,089
Total time deposits .•..................•
777,864
678,997
745,090
Total deposits .................•• .. ..
Bills payable, rediscounts, etc... . . . . ...... . . . .
All other liabilities .........................
Total capital accounts . .....................
4,798,071
17,050
60.101
362,633
4,431,262
0
47,524
330,563
4,829,179
12,700
77,304
362,520
TOTAL LIABILITIES AND CAPITAL. ........
5,237,855
4,809!349
5,281,70~
more than offset the increase of $7,157,000 in other investments. Although the banks increased their holdings of Treasury bills $1,853,000, they liquidated certificates in the amount
of $24,469,000 and effected moderate reductions in holdings
of notes and bonds.
The decline of $63,882,000 in demand deposits reflected
primarily reductions of $30,250,000 in demand deposits of
individuals and businesses and $28,193,000 in domestic interbank funds_ Public funds increased on balance, since the
GROSS DEMAND AND TIME DEPOSITS OF MEMBER BANKS
5 weeks ended Dec. 29, 1954 _
March 23, 1955 March 23, 1955
FACTORS
federal Reserve credit-local .................. .
Interdislrict commercial and flnanciClI transactions .•.•
Treasury operations ............ ... .....•...•..
Currency transactions .. .. ... .... . ... . ......... .
Other deposits at Federal Reserve Bonk ......... .
Other federal Reserve accounts .... .. .......... .
RESERVE 8ALANCES
March 23, 1955 ............. ..
February 16, 1955 .... .. . ... ..
Change......................
1
-$30,632
- 60,979
+ 99,251
+
8,047
34
+
396
-$34,158
- 74,536
+ 51,762
+ 43,687
638
+
3,403
+$16,117
-$10,480
+
5996,031
979,914
+$
16,117
Sign of change indicates effect on reserve balances.
$8,965,000 withdrawal of United States Government deposits
was more than offset by an increase of $15,699,000 in funds
of states and political subdivisions.
During the 5 weeks ended March 23, member bank reserve
balances at the Federal Reserve Bank of Dallas increased
$16,117,000 to total $996,031,000. Treasury operations added
$99,251,000, currency transactions contributed $8,047,000,
and changes in "other deposits" and "other Federal Reserve
accounts" increased balances $430,000. Partially offsetting
these factors were a $60,979,000 flow of funds out of the District and a $30,632,000 decline in local Federal Reserve credit.
The 510,480,000 decrease in member bank reserve balances
since the beginning of the year contrasts with a reduction of
$59,765,000 during the comparable 1954 period.
Gross demand deposits of District member banks averaged
$7,329,237,000 in February, reflecting a 3.5-percent seasonal
decline from January but a 6.4-percent increase over February 1954. Time deposits, at an all-time high of $1,170,172,000,
were up 1.3 percent from January and 16.0 percent from a
year earlier. The increase for the month in average time deposits, reflecting the continued high level of savings in the
Southwest, was divided almost equally between reserve city
and country banks.
Debits to demand deposit accounts at banks in 24 cities in
the District totaled $6,087,218,000 in February. Although 12
percent above February 1954, total debits for the month were
14 percent below those in January 1955, mainly because of
NEW PAR BANK
Eleventh Federal Reserve ' District
(Averages of daily figures. In Ihousc:nds of dollars)
COMBINED TOTAL
Date
Gron
demand
Time
RESERVE CITY BANKS
Gross
demand
Time
COUNTRY BAHKS
Gross
demand
Time
Feb. 1953 . . .. $6,850,152 $ 808,429 $3,223,325 $433,931 $3,626,827 $374,498
Feb. 1954 ....
6,886,847 1,008,497 3,277,961 565,389 3,608,886 443,108
Oct. 1954 ..... 7,259,916 1,109,374 3,591,134 622,569 3,668,782 486,805
Nov. 1954 . ... 7,464,379 1,126,793 3,650,354 635,036 3,814,025 491,757
Dec. 1954 .... 7,551,892 1,131,996 3,687,178 629,548 3,B64,714 502,448
Jan. 1955 ..... 7,594,952 1,155,178 3,679,808 644,814 3,915,144 510,364
feb. 1955 .... 7,329,237 1,170,172 3,504,599 652,808 3,824,638 517,364
The Shreveport Bank & Trust Company, Shreveport,
Louisiaoo, an insured, nonmember bank located in the
territory served by the Head Office of the Federal Reserve Bank of Dallas, was cu1ded to the Par List on its
opening date, March 23,1955. The officers are: Arthur
N. Sample, Jr., Chairman of the Board; Ira E. Moss,
President; W_ 0_ Lacy, Vice President; and M. V.
Dark, Cashier.
MONTHLY BUSINESS REVIEW
54
BANK DEBITS, END-OF-MONTH DEPOSITS
AND ANNUAL RATE OF TURNOVER OF DEPOSITS
(Amounts In thousands of dollau)
DEBITSl
DEPOSITS'
Percentage
change from
February
City
1955
Annual rate of turnOVer
Fob. 28~
1955
Feb. Jan.
1954 1955
Feb. Feb. Jan.
1955 1954 1955
ity in payment of June 15 income taxes. Subscriptions of
banks were limited to an amount not exceeding 50 percent of
combined capital stock, surplus, and undivided profits as of
December 31, 1954, and were payable by credit to the
Treasury Tax and Loan Account. Investors in the Eleventh
District subscribed to $247,752,000 and were allotted
3101,954,000 of the securities_
ARIZONA
Tucson ••••••••••••• •
$ 118,504
25 -11
45,998
211,422
12 -17
13 -11
94,722
15.1
13.2
17.3
43,875
199,955
12.6
13.1
11..4.
13.6
14.6
1 5.2
$
LOUISIANA
Monroe ••. .•• •••••••
Shre"eport .•..••.•••
NEW MEXICO
Roswell •••••••••••••
25,746
3
-9
30,290
10.2
10.1
10.9
58,914
137,956
124,284
111,172
152,932
13,073
1,754,200
215,233
513,850
72,812
1,650,811
18,602
133,533
49,541
38,818
397,591
16,575
63,773
77,527
84,351
12
18
16
2
13
3
16
12
11
1
8
-1
34
18
11
12
1
18
5
7
-8
-8
-11
-7
-16
-19
-20
_8
-15
-10
-9
-11
-25
-2
-8
-12
-8
-6
-13
-13
60,710
109,503
112,906
102,267
11.9
14.3
132,169
352,952
69,269
1,195,566
19,076
103,781
40,197
45,732
340,191
17,231
56,690
70,424
105,879
11.6
14.8
13.1
13.1
16.7
7.1
21.7
19.4
17.4
12.7
16.8
11.6
12 -14
$4,399,807
TEXAS
Abilene ••••• • •••••• •
Amarillo ••••••• • ••••
Austin ••.•••••••••••
Beaumont •••••••••• •
Corpus Christi ••...••.
Corsicana .. ...... • ..
Dallas ............. .
EI Paso ••.•• ••• ...••
Fort Worth •..•... •.•
Galveston •.••. .....•
Houston •••• •• •• • ••• •
Loredo •••••••••.•.•
lubbock •.•••..••.. .
Port Arthur • •••••• •••
San Angelo ••••••••••
San Antonio •••......
Texarkana' ••• . ••. ...
Tyler •••••••••••••••
Waco ••..••••.••...
Wichita Falls •••••• •••
Tolol-24 cities ........ $6,087,218
110,558
21,902
963,962
10.8
12.7
16.0
14.4
13.8
19.0
8.5
26.0
20.8
20.6
14.3
14.5
10.1
14.2
11.4
13.3
13.3
9.6
16.9
12.1
13.3
13.0
9.2
13.8
10.9
11.5
13.4
9.4
13.0
19.1
15.0
10.8
16.1
12.1
13.8
15.1
10.8
16.7
16.0
19.1
15.0
13.0
13.0
15.8
7.0
20.0
18.6
16.8
18....
Estimated proved reserves of
crude oil and natural gas liquids in
the four producing District statesLouisiana, New Mexico, Oklahoma,
and Texas - rose to a new high during 1954, but the increase was the smallest since at least 1947_
Total reserves in these states on December 31,1954, amounted
to 25,191,000,000 barrels, or 160,000,000 barrels higher than
a year earlier_ Proved reserves in the District comprised 72
percent of the national totaL
CRUDE Oil, ESTIMATED PROVED RESERVES
(In millions of barrels of 42 U. S. gallons)
1954
New supplies added
I Debits to demand delOSI! accounts of individuals, partnerships, and corporations and
of states and political sub ivisions.
, Demand deposit accounts of individuals, partnerships, and corporations and of stCltes
and political subdivisions.
I These flgures include only one bonk in Texarkana, Tex05. Total debits for all bonks in
Texarkana, Texas-Arkansas, including two bonks localed in the Eighth District, Clmounfed to
$32,546,000 for the month of February 1955.
the smaller number of business days in February. The annual rate of deposit turnover declined from 19.1 in January
to 16.7 in February but was still above the 16_0 rate established a year earlier_
Between February 15 and March 15, earning assets of the
Federal Reserve Bank of Dallas declined $19,466,000, primarily as a result of an $11,200,000 decrease in discounts for
member banks and a $7,639,000 reduction in holdings of
United States Government securities_ Gold certificate reserves
decreased $64,082,000, or 7_6 percent, reflecting the movement of funds out of the Eleventh District_ Federal Reserve
notes in actual circulation declined $2,918,000 during the
period to total $717,983,000 but were $9,226,000 above the
year-earlier amount.
On March 22 the Treasury accepted cash subscriptions for
$3,000,000,000 of the 1%-percent Tax Anticipation certificates dated April 1 and maturing June 22, 1955_ The certificates will be receivable at par plus accrued interest to matur-
Reserves
Extensions
Discoveries
of new
flelds and
new pools Production
Area
Dec. 31,
1953
o,d
revisions
Louisiona l . . . . .. .
New Meltico . .. ..
Oklahoma .•.. •• .
Texas 1••• •• • ••• •
2,760
815
1,752
14,999
276
56
354
680
153
8
33
255
Total Eleventh
District stotel ...
United States ....
20.325
28,945
1,366
2.287
449
586
Change
Reserves
;,
Dec. 31
reserves
227
73
184
952
2,962
806
1,955
14,982
202
-9
203
-17
1,435
2,257
20,705
29,561
379
616
~
Includes offshore reserves.
NOlE: Detail will not necessarily odd 10 total, due to rounding.
SOURCE: Americon Petroleum Institute.
1
An appreciable downward reV1S1011 in estimated proved
reserves of natural gas liquids in Texas was an important
factor limiting the increase in total proved reserves in the
District states in 1954_ Estimated proved reserves of crude oil
alone in the District increased 379,000,000 barrels during
1954 to 20,705,000,000 barrels. The rise in crude reserves
was accounted for by Louisiana and Oklahoma, as Texas and
New Mexico showed small decreases_
NATURAL GAS LIQUIDS, ESTIMATED PROVED RESERVES
(In millions of barrels of 42 U. S. gallons)
1954
New supplies added
CONDITION OF THE FEDERAL RESERVE BANK OF DALLAS
Area
(In Ihousands af doJ[au)
March 15,
Item
1955
Tolal gold certificate reserves ....... . . . . ••..
Discounts for member bonks . ........ •.•• . .•
Other discounts and advgnc;es ... .. . ........ .
U. S. Government securities . ......... ..... . .
Tolell earning assets ................... . .. .
Member bank reserve deposits ....... . .... . .
Federal Reserve notes in actual circulalion .... .
$779,026
700
5,013
927,519
933,232
981,413
717,983
March IS,
195.4
787.085
10,175
705
976,484
987,364
1,016,009
708,757
Feb. 15,
1955
$ 843,108
11,900
5,640
935,158
952,698
1,022,6 82
720,901
Reserves
Extensions
Dec. 31,
1953
ond
revisions
Discoveries
of new
fields and
new pools Production
Change
Reserves
;,
Dec. 31
reserves
louisia na l •... .. .
New Mexico .....
Oklahoma . . .... .
Texos1... ...... .
813
321
304
3,267
87
29
51
-221
19
4
7
50
35
13
28
169
884
340
334
2,928
71
19
30
-339
Totol Eleventh
Di5frict stot.s. . .
United States ••..
4,705
5,438
-54
21
79
87
245
301
4,486
5,244
-219
-193
I Includes offshore reserves.
NOTE: Detail will not neceuarily add to latol, due to rounding.
SOURCE: American GgS Association.
4
MONTHLY BUSINESS REVIEW
NATURAL GAS, ESTIMATED PROVED RES~RVES
(In billions of cubic feet-14.65 psio, at 60" FI
1954
New supplies added
Reserves
E,·
Discoveries
Net
change
tensions
of new
in under-
a,d
Oec.31,
flelds and
1953
revisions new pools
Area
louisiana I, ....
New Mexico ...
34,459
17,522
Oklahoma .... .
12,228
Texas l , , . . . . . • 106,530
ground
Net
pro-
Reserves
;,
storage
duction
Dec. 31
reserves
Change
2,595
-331
772
1,278
1,253
550
247
2,079
0
1,507
36,800
2,341
-27
7
6
474
858
4,763
17,241
12,396
-282
168
105,129
-1,401
4,314
4,632
4,128
4,967
-14
91
7,602
9,427
171,566
211,711
827
264
Tolal Eleventh
Dist rict sloles. 170,739
United Stotes .. 211,447
1
Ineludes offshore reserveS.
NOlE: Detail will not naceuorily odd to total, due to rounding,
SOURCE: American GOI Association.
Proved recoverable reserves of natural gas in District
states, after registering marked gains each year since the end
of World War II, showed only a small rise during 1954, Re·
serves at the end of the year totaled 171,566 billion cubic feet,
or about 800 billion cubic feet more than at the end of the
preceding year. As was the case for oil, an appreciable increase in Louisiana's reserves was offset substantially by declines in reserves in New Mexico and Texas. Total proved
reserves of natural gas in the District states constituted 81
percent of such reserves in the Nation in 1954_
Crude oil production in thc District, continuing the rising
• trend which has prevailed since November, reached an all·
time high during the first part of March with a daily average
of 3,303,000 barrels, or about 5,000 barrels higher than the
previous record of December 1952. At this level, District
production was 43,000 barrels higher than in February and
213,000 barrels higher than in March a year ago. Meanwhile,
production in the Nation set a new record for the third suc·
cessive month, averaging 6,842,000 barrels per day, or 83,000
barrels above the February average and 335,000 barrels
above March 1954,
t
In April the District's daily average crude production appears likely to show a small decline, as Texas oil allowables
have been reduced about 59,700 barrels from the mid-March
level. Part of this decrease, however, may be offset by production from new wells completed; moreover, Louisiana's
April allowables have been raised slightly to take care of new
production,
55
Refinery crude runs in the District during the first part of
March rose moderately to a new all·time high, but in the
l\ation. runs declined somewhat from the record February
level. District runs were 213,000 barrels per day higher than
the March ]954 average, and runs in the Nation's refineries
were 549,000 barrels higher,
Crude stocks in the Nation registered little change during
February and then increased moderately during the first few
weeks of March. Except for gasoline, stocks of refined products were in a fairly satisfactory position at the middle of
March, Despite reductions in refiners' gasoline yields, gasoline stocks on March 18 were at an all· time peak of 184,000,000 barrels, which is 4 percent above the very high
level of a year earlier and is 14 percent higher than 2 years
earlier.
Nonagricultural employment in
the District states during February
increased 10,000 over January to
reach a total of 3,788,500, which is
51,900 more than in February 1954,
Gains occurred in nearly all District industries, but the largest proportion was accounted for by mining, construction,
finance, and government. Retail trade employment, although
showing a further seasonal decrease, experienced gains in
certain segments, such as automobile distribution and filling
stations,
Manufacturing employment was unchanged, with the
February total showing 696,700, which is slightly below the
year-earlier level. Gains occurred in fabricated metals, nonelectrical machinery, apparel, and printing and puhlishing
industries,
The value of construction contracts awarded in the District
during February totaled $132,860,000, or nearly 5 percent
above the January total. The most important factor in the
February volume of construction was residential awards,
which were 59 percent above January and 71 percent above
February 1954, Other awards, while 8 percent above their
year.carlier level, decreased 32 percent from the preceding
month.
NONAGRICULTURAL EMPLOYMENT
Five Southwestern States1
CRUDE OIL, DAILY AVERAGE PRODUCTION
Pereent change
Feb. 1955 from
Number of persons
(In thouscnds of berrels)
Type of employment
February
1955e
February
1954r
January
Feb.
Jan.
1955
1954
1955
3,788,500
696,700
3,091,800
233,800
256,800
3,736,600
698,000
3,038,600
230,600
252,300
3,778,500
696,700
3,081,800
232,400
248,300
1.4
-.2
1.8
1.4
1.8
.3
0
.3
.6
3.4
383,800
968,900
395,100
952,700
151,800
432,600
623,500
384,900
975,000
156,700
439,600
644,900
-2.9
1.7
4.2
1.6
4.4
-.3
-.6
.9
-.03
.9
Change from
February
february
January
1955 1
1954 2
1955 1
February
1954
ElEVENTH DISTRICT .•.... ...
2,992.5
3,232.7
Texo s .. .. ...... ........
266.9
2,680.1
588.1
1,018.7
228.2
83.0
2,913.8
252.0
18.3
628.4
1.,444,9
2.40.2
85.2
762.1
196.8
815.1
212.9
42.9
139.7
8.7
3.0
57.7
20.9
115.6
106.0
3,386.2
3,432 .3
-6.0
112.9
6,378.7
6,665.0
379.8
2.6
-286.5
-3.3
.8
4.7
4.8
3.6
66.8
93 .5
Area
3,259.4
2,932.1
631.0
West Tellos ........ . .. 1,158.4
Eos' Texas (proper) .....
236.9
Panhandle . .... .... ... .
86.0
Rest of Stote ...........
819.8
Southeastern New Mexico ..
217.7
Northern louisiana . .....••
109.6
OUTSIDE ELEVENTH DISTRICT. 3,499.1
UNITED STATES ............ 6,758.5
Gulf C()(]st . . ....... ...
SOURCES: t Estimated from American Petroleum Institute weekly reports.
2 United States Bureau of Mines.
January
1955
26.7
Tolal nonagricultural
wage and salary workers ..
Manufaeturing . ..•.......
Nonmanufacturing . .......
Mining ............... .
Con5truc:tion ... . .......
Transportation and public
utilitie5 •••• ..........
Trade ............... .
Finance . .......•. . .•. .
Service . ..............
Government . .•.......•
158,100
439,500
651,000
I Arizona, louisiana, New Mexico, Oklahoma, and TeJtas.
a-Estimated.
r-Revised.
SOURCES: State employment agendes.
Federal Reserve Bank of Dallas.
MONTHLY BUSINESS REVIEW
56
VALUE OF CONSTRUCTION CONTRACTS AWARDED
DOMESTIC CONSUMPTION AND STOCKS OF COTTON
(In thousands of dollars)
(Boles)
August-January
Jonuary-Febrva ry
February
February
January
1955p
1954
1955
Area ond type
ElEVENTH DiSTRICT ••.• $
Residential ••• • ••• • •
All other • . • ••• • .•••
UNITED STATESt •.• •• •
1,58 1,1.43
Residential .•• • • •• ••
744,102
All other .....•.• •• •
837,041
1954
1955p
95,466 $ 126,872 $ 259,732 $ 187,373
132,2.44
96,947
47,467
51,096
127,488
90,426
.47,999
75,776
1,221 ,260 1,504,450 3,085,59 3 2,373,247
508,773
690,355 1,434,457
971,255
712 ,487
814,095 1,651,136 1,401,992
132,860 $
81,148
51,712
1 37 stales eosl of the Rocley Mountains.
p- Prellmlnary,
SOURCE, f . W. Dodg. Corporation.
During the first 2 months of 1955, the value of construction
contract awards in the District was up 37 percent from the
same period in 1954, while residential awards rose 36 percent and all other awards gained 41 percent, In the Nation,
total awards during January and February increased 30 percent over last year; residential awards, 48 percent; and all
other awards, 18 percent_
The record level of home building has caused the Dallas
Office of the Federal Housing Administration to suspend temporarily the making of loan commitments on speculative
housing until a study of the local situation is made. Residential construction, however, wiII not be affected immediately,
as firm commitments already obtained by builders will take
BUILDING PERMITS
January
1955 1
Areo
January
1954
December
1954'
This season last season
CONSUMPTION
Total
73,178
11,465
68,183
11,528
10,967
Texas mills ... .•.....
801,748 4,406,092 4,421,670
678,472
711,286
U. S. mills .•. • . • .....
Oailyover<lge
567
529
576
459
548
Texas mills ....•.•...
34,343
34,222
32,070
35,564
33,923
U. S. mills ....... . ...
STOCKS, U. S.-End of period
Consuming estab lishments . 1,801,753 1,744,6 83 1,671,745
Public storage and
compresses . •..••.... 13,47 1,230 12,089,993 13,850,756
1 Four weeks ended Jonu(JrY 29.
2 Five weeks ended J<lnuary 1.
SOURCE: United States Bureau of the Census.
care of construction activity for several months_ The suspension does not apply to commitments on houses which are not
built for speculative purposes.
The east Texas economy is receiving a considerable boost
from the rapid industrialization and manufacturing construction taking place at Tyler. In recent weeks one company has
announced the beginning of construction on a $1,000,000
plant for the building of prefabricated houses, and another
company is planning to construct a $15,000,000 plant to
manufacture air-conditioning and heating equipment. At
least two other industries are constructing or recently have
completed construction of large manufacturing plants or
office buildings in Tyler,
2 months 1955
February 1955
City
Number
Percentage
Percentage
change In
change in
vo luation from
valuation
fro m 2
Valuation
Feb.
Jan.
1954 1955
LOUISIANA
Shreveport .•.•
417 $ 1,679,713
-3
17
TEXAS
Abilene •......
161
2,187,956 99
116
Amarillo . .. . ..
203
2,071,820 149
13
_ 5
Austin ........
292
2,824,250 -1 9
Beaumont .....
257
799,029 67
27
Corpus Christl .•
397
1,941,452 -2 -38
Dallas ........ 2,163 19,459,185 117
49
£1 Paso .. . ... •
5 37
3,404,705 183
33
Fort Wort" . •..
813
5,415,020 55
73
Galveston •...•
108
200,285
32
89
Houston .•.... . 1,102 10,760,846 -1
4
Lubbock . ....•
261
1,885,600 -41 -25
Port Arthur ....
UI
688,343 174
97
San Antonio .•. 1.882
5,587,002 70 -2
Waco •• .• .. ..
262
1,318,301
44 -19
Wichita Falls...
US
1,083,325
16
30
To101-16 cities . • 9,141 $61,306,832
44
19
COTTONSEED AND COTTONSEED PRODUCTS
month,
Number
796
290
476
543
529
977
ValuQlion
$
1954
3,410,029
12
3,200, 374
4,267
5,800,160
1,426,936
5.094,B31
32,51 2,668
941
5,967,950
1,451
465
265
8,536,730
351,915
21,130,072
4.391,159
1,037,510
11,272,753
2,952,045
1.916,59.01
105
112
20
-30
16
66
96
43
29
-6
-17
195
87
32
47
17,367
$112,900,426
34
198
2,074
476
238
3,381
3,898,700
Item
TEXAS
UNITED STATES
August 1 to January 31
August 1 to January 31
This ,eolon
ConONSEED (tons)
Receive d at mills .. . ... . .... 1,404,251
Crushed .. .. .......... . ... . 1,000,542
547,575
Stocks, end of pe riod .......•
COTTONSEED PRODUCTS
Production
331,746
Crude oil (thousand pounds) .
470,065
Coke and meal (tons) ......
227,156
Hulls (tons) . ... ....... . ..
288,908
linters (running b<lles) .... .
Stocks, end of pl!lriod
15,425
Crude oil (thousand pounds) .
Cake <lnd meal (Ions) ......
45,383
Hulls (tons) ....... . .. . .. .
20,309
92,840
linters (running bales)_ ....
SOURCE: United States Bureau of the Census.
lod se050n
This season
l<lst season
1,59 8,456
4,943,549
3,331,559
5,904,273
962,015
724,572
1,841 ,597
2,390,245
311,616
462,387
217,117
282,835
1,077,034
1,619,683
713,744
1,079,397
1,183,351
1,736,599
802,970
1,161,695
24,410
32,259
27,137
47,366
78,645
242,133
78,01 5
389,254
108,889
109,229
64,737
216,728
3,662,146
@FedFRASER