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MONTHLY
~ BUSINESS
REVIEW
of
the
FEDERAL
Volume 33
RESERVE
BANK
of
Dallas
Dallas, Texas, August 1, 1948
Number 8
PROBLEMS ASSOCIATED WITH THE UTILIZATION, CONSERV A TION,
AND CONTROL OF WATER RESOURCES IN THE SOUTHWEST
WILLIAM
A.
FAUGHT,
Agricultural Economist, Federal Reserve Bank of Dallas
Water resources of the Southwest have been an important factor in the rapid increase in population and the growth of industrial activity which have characterized the development of the region. An
expanding population and industry, however, have placed a heavy drain on the water resources of the
area. In many sections the demand for water now exceeds the supply, and continued prosperity and
future growth may depend upon increasing the volume of usable water. Moreover, conservation of
soil-a basic consideration in the management of water resources-has been neglected, with the result
that the fertility of the land has been depleted and the problem of providing adequate water supplies
has been complicated further. In many humid areas the supply of water can be enlarged by further
~ exploration or through conservation and more efficient utilization of existing supplies, for, as pointed
out in the article entitled "Water Resources in the Southwest" which appeared 'in the July 1 issue of
the Monthly Business Review, some water supplies in these localities have not been developed and others
are not being utilized completely. In other areas, however, particularly in the arid western portion of
the region where water of usable quality is scarce, it may be impossible to increase the available supply,
or, if it can be increased, costly storage and diversion facilities will be required.
~
,
Utilization of Water
The rate of increase in water requirements in the Southwest is indicated by a report of the United
States Geological Survey which estimates that water demands in Texas increased over 7,000 percent
between 1890 and 1940, although the population of the State increased only 287 percent. The industrial expansion and population growth in the region during the war and postwar periods caused water
requirements to increase at an even greater rate since 1940, Municipalities, industrial plants, and operators of irrigated farms are the three most important groups of consumers of water in the Southwest.
The recent rapid growth of the urban population has expanded the demand for water to fill municipal
requirements. Numerous cities and towns have been forced to develop new sources of supply, and
many others are still confronted with occasional shortages of water. In some instances existing industrial plants have increased their requirements so greatly that they also have had to develop new sources,
and in other cases shortages of water have prevented the construction of new plants. The sharp expansion of irrigation in the Southwest also has been an important factor in increasing water requirements.
In Texas, the irrigated area, which rose from 895,000 acres in 1939 to about 2,400,000 acres in 1947,
now accounts for 8 percent of the harvested acreage in the State. Substantial increases in irrigated
acreage also occurred in Arizona and New Mexico during that period.
Most towns and cities of the South west secure water from ground sources. In Texas, 681 of the
837 communities dependent upon public water supplies secured water entirely from ground sources in
1945, and the total withdrawal averaged about 270,000,000 gallons a day. According to the Texas
Board of Water Engineers, in the Houston area alone the amount of water taken from ground sources
for public use rose from 38,000,000 gallons a day in 1934 to 64,000,000 gallons daily in 1945; at Galveston, the daily withdrawal increased from 4,600,000 gallons in 1935 to 10,300,000 gallons in 1945.
This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org)
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MONTHLY BUSINESS REVIEW
Similar marked increases are known to have occurred in most other municipalities utilizing water from
ground sources. The remaining 156 municipalities in Texas dependent upon public water supplies,
including several of the larger metropolitan areas in the State, secured all or a major part of their
supplies of water from surface sources. The amount of water removed from this source for municipal
use is not known; however, the Texas Board of Water Engineers has issued permits for the appropriation of 6,942,000 acre feet per year or the equivalent of 6,197,000,000 gallons per day for combined municipal and industrial uses. While it is unlikely that the entire amount of water for which
appropriations have been approved is removed from streams in anyone year, it is known that a very
great volume is secured from this source.
~
Industrial users also have increased their use of water substantially in recent years. The extent to
which industry draws upon water resources is indicated by the amount of water consumed in certain
plants established in the area in recent years. A paper mill in the Houston area requires approximately
20,000,000 gallons of water daily, and a nylon plant near Orange needs 30,000,000 gallons of water a
day. An iron smelter in east Texas uses about 17,000,000 gallons, and if a proposed steel mill is placed
in operation in conjunction with the smelter, the requirements will be raised to 70,000,000 gallons per
day. One process of synthetic rubber production requires 85,000 gallons of water per ton of rubber,
and one plant in the Texas Panhandle alone uses 10,000,000 gallons a day. It is estimated that 3,500
gallons of water are required to process 100 cases of green beans, 16,000 gallons for 100 cases of
spinach, and 1,250 gallons in manufacturing one keg of beer. The production of one gallon of aviation
gasoline requires 25 gallons of condensing water, while a single airplane factory in Texas requires
20,000,000 gallons of water each day for cooling purposes alone. Between 1934 and 1945, industrial
plants in Texas which secured supplies of water from ground sources doubled their consumption and
are estimated to have withdrawn approximately 289,000,000 gallons a day from ground water sources
in the latter year. The amount of surface water used in industrial plants is not known, but a similar
increase in consumption is believed to have occurred during the same period.
Operators of irrigated farms- the third most important group of consumers of water-secure
supplies from both ground and surface sources. Approximately 1,600,000 acres or about two-thirds of
the total irrigated land in Texas is watered from surface streams, while the remaining one·third is irrigated with water from ground supplies. There are several distinct areas in the State where irrigation
farming is practiced extensively. The Rio Grande and its tributaries, including the Pecos, are the most
important sources of irrigation water in the Southwest and supply several irrigation districts. Permits
have been issued for the appropriation in Texas alone of over 5,000,000 acre feet of water from this
river system each year, and between 750,000 and 1,000,000 acres of land are watered from the system.
Between ·500,000 and 600,000 acres of land in the Lower Rio Grande Valley are irrigated from this
source, as well as a large acreage in the Laredo-Eagle Pass-Del Rio area. A portion of the irrigated
farms in the Pecos-Fort Stockton section and in El Paso and Hudspeth Counties in Texas, as well as
numerous farms with a very large acreage in New Mexico, secure irrigation water from the Rio Grande
system. In the rice belt of the coastal area of Texas, approximately 475,000 acres of rice were irrigated
in 1947. Of this total, approximately 420,000 acres were irrigated from surface streams, while the
remainder was watered from wells in the area. The increase in the irrigated acreage in the Plains area
of Texas and New Mexico in recent years is believed to have been more rapid than in any other area of
comparable size in the Nation. According to the Texas Board of Water Engineers, in the High Plains
portion of Texas the number of wells drawing upon these ground supplies increased from 600 in 1936
to an estimated total of 5,500 in 1946, and the irrigated acreage rose from 80,000 acres to 650,000
acres during the same period. A further increase in irrigation occurred in the area in 1947, and the
irrigated acreage now is believed to total approximately 700,000. Some increase in irrigation also
occurred in the Winter Garden area southwest of San Antonio, in spite of the decline in water levels
and the apparent reduction in supplies in that area. In addition to these major areas, there is a small
acreage of irrigated land in northern Texas watered from the Red River.
Although complete information is not available on the total .use of water by each of the three
major groups of consumers, it is apparent that requirements of industrial plants now equal or exceed
those of any other user and that these plants already have placed a heavy drain on the flow of unregulated streams, as well as on ground water supplies. If the Southwest is to continue to attract new
industries, particularly such industries as metal smelters, steel mills, airplane factories, or chemical and
associated plants, which are large users of water, an enlarged supply of water suitable for use in these
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MONTHLY BUSINESS REVIEW
127
industries must be provided. Moreover, further industrial development will lead to the concentration
of additional workers in towns and cities, thereby increasing the volume of water required for public
use and necessitating an expansion of municipal supplies.
Withdrawals of water to meet the great increases which have already occurred in requirements
have not been in accordance with the principles of best utilization; some sources have been drawn
upon too heavily, while others have been neglected and their supplies wasted. The removal of water
from ground sources has been at such a rapid rate that a decline in water levels or artesian heads has
occurred in many areas, indicating a reduction of ground water reserves. The decline in water levels
has been particularly marked in the High Plains, Lufkin-Nacogdoches, and the Winter Garden areas,
while the reduction in artesian pressure in the Galveston area has permitted the intrusion of salt into
the supply, thereby necessitating the development of a new source. At the same time, it is estimated
that over three-fourths of the surface water or runoff has been allowed to escape into the Gulf. Moreover, communities depending upon surface water have had difficulty in securing continuous supplies
and in maintaining storage facilities at the constructed capacity because of the rapid silting of reservoirs. This problem of declining supplies is becoming most acute at a time when municipalities are
faced with the greatest increase in demand for water.
It is vitally important that steps be taken now to restore balance between the utilization of water
and its supply, for if the growth potential of the Southwest is to be realized, an increased and continuous supply of water must be assured. The region possesses a variety of resources which can form the
basis for an expanding economy if they are developed. The soils of the region, although their productivity has been impaired, still can support an expansion in agricultural production if the land is utilized
in accordance with its capability and its fertility is increased and conserved. The supply of labor and
the reserves of petroleum and gas are adequate to meet the requirements of a considerably larger industrial plant. The utilization of these resources to support an expansion of economic activity within the
Southwest so that the region will receive the maximum benefits from their development, however, is
contingent upon the availability of water.
The fact that the future growth of the region may be dependent upon the size of its water
resources emphasizes the importance of conserving them and of improving their utilization. The major
problem in the conservation, management, and utilization of water resources may be defined as the
provision of a supply of pure water adequate to assure the future growth of the region. There are,
however, many distinct, though interrelated, parts of the major problem. The first group of problems
is associated with the water on the land: (1) control of runoff on the land in order to check erosion
and silting of surface supplies, (2) progressive depletion of ground water supplies, (3) efficient utilization of water in irrigation districts, and (4) establishment of adequate drainage facilities. The second
group of problems is associated with water in streams: (1) control of floods, (2) regulation of stream
flow to maintain continuous supplies, (3) prevention of pollution and improvement of the quality of
water, and (4) development of hydroelectric power.
Water Resource Problems
The problems of water conservation and control are complex and diverse. In its movement either
above or below the surface, water follows natural channels or slopes extending over wide areas, and
frequently several communities, states, or even nations are concerned with a single source of supply.
The problems are further complicated by the multiplicity of interests found within each community
and by the great diversity of physical conditions encountered in many water supply areas.
Upland farmers are interested in retarding the movement of water across the surface of their
fields in order to check the rate of erosion and in retaining as large a portion as possible of the precipitation which falls on the land so as to assure a supply of stored water for drought periods. On the
other hand, farmers in lowland sections may be primarily interested in preventing deposits on their
land of silt and sand washed down from the hills and in the improvement of surface and internal
drainage. Municipalities and industrial users are directly concerned with the provision of an adequate
supply of unpolluted and good quality water, the prevention of flood damage, and the disposal of
waste and unwanted water. Operators of hydroelectric plants and water transportation facilities are
faced with the problems of maintaining a steady flow of water and preventing destructive silting of
lakes and streams. Sportsmen and operators of commercial fisheries or recreational areas are interested
in preventing the pollution of streams, which might destroy aquatic life.
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MONTHLY BUSINESS REVIEW
In spite of the diverse and often conflicting interests, however, the problems confronting all segments of the population in a water supply area are interrelated and can best be solved if considered
collectively. In order to assure that all interests will be attended, it is frequently necessary to approach
these problems on a regional or even national basis, which permits compromise of the divergent interests and the coordinated conservation and development of the water resources.
Water on the Land. A basic consideration in determining a feasible program for the control
and conservation of water resources should be the relationship of water to the land, because it is on the
individual farms and ranches that the first steps in such a program should be taken. The control of
surface water at its source is essential to the ultimate solution of virtually all other problems of water
conservation and control. Here, effective action can be taken to retain increased proportions of precipitation in the areas where it falls, thereby reducing soil erosion and the rate of water runoff, increasing the filtration of water to underground reservoirs, and aiding in the prevention of floods, the silting
of streams and reservoirs, and the deposition of soil on lowland areas. The necessity of initiating measures to achieve these desirable objectives is emphasized by the steady deterioration of soil fertility
through the years and the ensuing problems. Over large areas of the region the protective cover has
been stripped away, exposing the land to the beating action of rain and increasing the rate of erosion.
The runoff of water into streams and rivers has been speeded up and flood damage has been intensified.
Silting, which results from this erosive process, has impaired navigation, partially filled many storage
reservoirs, and reduced the productivity of lowland fields on which it was deposited.
Through the establishment of a coordinated soil conservation program on individual farms, it
should be possible to bring about a material improvement in existing conditions within a reasonable
period and ultimately to provide for the solution of many basic problems. By increasing the absorptive
capacity of the soil through the use of such conservation measures as the plowing under of green
manure crops, the use of commercial fertilizers and limes, or other measures which would improve the
structure and internal drainage of the soil, the rate of runoff and erosion could be reduced. Where such
measures are needed, the construction of terraces or diversion ditches, contour planting, and the use of
cover crops or the restoration of sod or forest cover on erosive slopes would slow the movement of
water across the land. The building of farm ponds and tanks would reduce the volume of water entering streams during periods of heavy rainfall and would provide an additional supply of water for use
on farms during dry periods. These measures, in addition to conserving the available supply of water
and bringing about more efficient utilization, would be effective in increasing the volume of agricultural production, for by expanding the supply of moisture available to plants, crop yields would be
increased and the wide variations in yields would be reduced. Moreover, such measures would act to
increase the downward filtration of moisture and the replenishment of underground reservoirs. Erosion
also would be reduced, thereby minimizing the problem of maintaining navigable streams and usable
municipal water supplies.
It is apparent, therefore, that the improvement and conservation of the soil are closely related to
the conservation and management of water supplies and that it would be difficult to formulate a satisfactory program to provide a solution for either of these problems if the other were disregarded.
Effective methods of conserving soil and water have been developed, and the public, including both
farmers and business leaders, is aware of the importance of establishing these methods on the land.
Great progress has been made in the organization of individual farmers into soil conservation districts
and in supplying them with the technical advice required to carry out a coordinated conservative program. Conservation measures have been established on a considerable portion of the land in farms, and
the effectiveness of these methods in checking erosion and runoff, in improving the structure of the
soil, in increasing the fertility of the land, and in improving the utilization of water has been demonstrated clearly. The establishment of conservation measures on individual farms, however, is far from
complete, and the need for expanding this program to cover the entire region is urgent. Moreover, if
these two basic resources-soil and water-are to be conserved and utilized most efficiently, it may be
necessary to expand the soil conservation program to include additional measures designed to aid
primarily in the control of water. If the soil conservation program in each district were coordinated
more completely with flood control, drainage, and water improvement work, the progress of each
program would be accelerated. While the job of conserving and improving the utilization of soil and
water must be started on individual farms, it is done most effectively when attacked on a watershed
MONTHLY BUSINESS REVIEW
129
basis. The close cooperation of all groups living within a single drainage area, therefore, will be required
if this task is to be completely successful.
Closely related to the problem of controlling surface water and conserving the soil is a second
serious problem which confronts all portions of the region and which constitutes a threat to the future
of many communities-that of progressive depletion or deterioration of ground water supplies. The
effects of wasteful exploitation of these resources in many areas have been intensified by the reduction
in the recharge of underground reservoirs, due to the removal of the native cover and the deterioration
of the soil structure. As a result, water levels and artesian pressures have declined and supplies have
become contaminated through the intrusion of salt. Although prolonged periods of below normal
'rainfall have contributed to the decline of ground water supplies in many areas, the resulting deficiency in recharge could have been offset partially during years of above average precipitation if the
downward filtration of surface moisture had been increased. As indicated above, a further extension
of the soil conservation program would aid materially in increasing the absorptive capacity of the soil
and in reducing the rate of runoff so that the downward movement of water to underground reservoirs could be expanded. Even if the rate of recharge of ground supplies is increased through the
application of such measures, it will still be necessary in many areas to limit the withdrawal of ground
water if these supplies are to be maintained permanently and their value to the community is to continue unimpaired. Although it appears unlikely that the supply of ground water will be exhausted
completely in any area in the near future, continued declines in the water level or artesian pressure
may require the boring of progressively deeper wells, which eventually may raise the cost of water
withdrawal to prohibitive levels. In other areas, pollution of underground supplies may necessitate the
abandonment of present wells and the development of other sources of supply. If these problems are
not solved, underground sources may be depleted seriously and the future prosperity of communities
depending on these supplies may be jeopardized.
The large and expanding area of farm lands under irrigation has created some serious problems
with respect to water utilization and conservation. In districts where irrigation is already established,
problems have arisen in regard to the efficient use of water. In some cases, a portion of the inadequate
supply is often wasted either through loss from the irrigation system itself or through the unwise use
of water on the land; while in other instances, the productive capacity of the land has been reduced by
raising the water level or increasing the salt concentration in the soil. Construction of improved irrigation systems would reduce the loss of water through seepage and evaporation, and the adoption of
improved irrigation practices already known will direct more of the water to plants and reduce losses
in the fields. To solve this problem completely, however, additional research is needed to discover the
water requirements of various crops and the yields derived with varying applications of water. Additional careful study also is needed of the mineral content of water used for irrigation and the effect of
these minerals on growing crops and the productive capacity of the land. The development of this
information and its widespread dissemination will aid farmers in determining the most profitable and
efficient applications of water.
The studies would be beneficial also to some irrigation areas which have expanded beyond the
capacity of their present water supply and have experienced recurring periods of water shortage.
Overexpansion, of course, should be avoided in all cases, but it is possible that the full and efficient use
of the potential supply of water might overcome the existing shortage and even provide for a considerable increase in the irrigated acreage. The benefits to be derived in the Southwest from the expansion
of the acreage in existing irrigation areas are sufficiently great to warrant extensive investigation of
these possibilities, and studies directed toward that end might well be expanded and accelerated.
Another aspect of water utilization is the possibility of extending irrigation to farms in the humid
or subhumid areas. Even though total precipitation in these areas may be abundant, it is not always
received at the most appropriate time, and the application of irrigation water to certain crops at
critical periods during the growing season has proved beneficial. It has also proved very helpful in
offsetting the effects of periods of drought which occur frequently in all areas. There is a possibility,
therefore, that supplementary irrigation might be practiced profitably in the eastern portion of the
Southwest where adequate supplies of water could be developed. In that event, the more intensive
crop system established with supplementary irrigation might increase substantially the productive
capacity of the area.
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MONTHLY BUSINESS REVIEW
Some areas in the region are confronted with an entirely different problem-that of removing
excess water from the land. Irrigated areas must provide adequate internal drainage to prevent waterlogging of the soil or, in some areas, the accumulation of undesirable and injurious minerals. Surface
drainage is required in all lowland areas in order to prevent damage to growing crops or delay in field
operations due to the collection on the land of excess rainfall or backwater. Properly constructed open
drains are generally effective in the removal of surface water, but to assure good internal drainage it is
frequently necessary to supplement open drains with tile drainage systems. The cost of installing a fully
effective drainage system is usually high, but the most pressing need for drainage exists on the more
productive land in alluvial valleys or irrigated areas where the increase in returns will usually justify
large capital expenditures.
Water in Streams. Falling water levels in underground reservoirs, combined with the tremendom expansion in the requirements of all water consumers, bring to the forefront the necessity of
increasing the downward filtration of water to underground pools and of controlling withdrawals of
water from ground supplies but are also indicative of the extent to which the region must depend upon
surface streams to meet future increases in requirements for water. Under these circumstances, consideration must be given to the problems of management and utilization of surface streams, such as
control of destructive floods, stabilization of stream flow, reduction or elimination of pollution, and,
where feasible, development of hydroelectric power as a means of distributing costs and supplementing
the existing power resources of the region.
A major problem is the recurrence of destructive floods in the Southwest, resulting primarily
from the concentration of rainfall within relatively short periods. These floods continue to cause tremendous loss of life and property each year even though millions of dollars have been spent in efforts
to control them. Major floods in the Southwest are produced by tropical or semitropical storms which
enter the southeastern portion of the area from the Gulf of Mexico or across the northeast corner of
the Republic of Mexico. In the past, a few floods have been caused by tropical cyclones which have
moved in from the Pacific Ocean across either Mexico or the Rocky Mountains, and in the western
part of the region floods sometimes result from summer thunderstorms, which mayor may not be
parts of more general storms.
In that portion of the region lying east of the ninety-ninth meridian drained by the Mississippi,
floods are a serious problem each year, but considerable progress has been made in their control, largely
through the construction of levees supplemented on some streams by storage reservoirs. In the western
gulf drainage area, which includes the Rio Grande and all basins north and east to the Mississippi,
destructive floods occur in the lower reaches of the major streams on an average of once in every four or
five years. Reservoirs in the upper portions of these streams have reduced flood flow somewhat, but
these facilities have little or no effect on the flow resulting from heavy storms below the reservoirs,
particularly in the coastal section. In the Colorado River drainage area in the western part of the
region, the construction of Boulder, Roosevelt, and Coolidge Reservoirs is said to have eliminated the
danger of floods in the lower portions of the river, even though a few small areas above the reservoirs
still are subject to flooding.
Flood control works in the Southwest are of three general types: storage reservoirs to impound
flood waters for later release, channel improvements to increase capacity or facilitate flow, and levees
to protect bottomlands and to hold the streams within relatively narrow limits. Storage reservoirs
generally are believed to provide the most satisfactory method of control if the terrain permits their
construction and if the impounded waters can be put to multiple uses, thereby reducing their costs.
Moreover, their ultimate effectiveness depends on the reduction of silting through soil conservation
measures. The Boulder Reservoir on the Colorado River generally is considered to be the most successful
example of the use of storage reservoirs to control floods. Another important facility is Elephant Butte
Reservoir in New Mexico, which has the dual purpose of controlling floods and of providing irrigation
water. Since the water stored in these reservoirs is used for more than one purpose, the cost of flood
control is reduced accordingly. Channel improvement alone generally does not afford adequate protection from floods, but this development has been a valuable and in some cases necessary supplement to
other flood control measures. The best example of the control of floods through the use of levees is
found along the lower stretches of the Mississippi, where an extensive levee system constructed under
the auspices of the Federal Government has proved completely successful thus far in protecting the
area from floods.
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131
These three methods of flood control have been very beneficial in minimizing flood flows after
the water has reachd the streams and rivers. Their effectiveness, however, has been reduced by other
factors. Because of the increased runoff resulting from the lack or quality of conservation practices on
farms and ranches, beds of some streams have been raised and filled by deposits of soil and other erosion
debris to such an extent that the channels are frequently unable to carry even normal runoff and
storage reservoirs have shown a tendency to silt up rapidly. Much can be done to increase the effectiveness of present fleod control methods if and when the comprehensive soil conservation practices outlined earlier in this article are put into effect on farms and ranches over the whole region. Supplementary practices, such as construction of numerous detention reservoirs, gully control structures,
flood water diversions, revegetation of critical flood and sediment areas, adoption of roadside erosion
control measures, and stream channel improvements, would aid in reducing the amount of runoff or
facilitate the movement of water in streams.
A second serious problem arising out of the irregularity of stream flow is the provision of continuous supplies of water to fill the needs of many municipalities, industries, and irrigation farmers.
Frequently water users depending upon streams for their supplies find that the flow of those streams
drops to such low levels during extended periods of drought that it is inadequate to meet their normal
requirements or that the quality of the water deteriorates to the point where it is unfit for many uses.
This problem is of particular importance now that an increasing number of users are being forced to
develop surface sources of water, due to the depletion of ground supplies and the tremendous increase
in requirements. Since a considerable portion of the surface water of the Southwest is allowed to escape
into the Gulf each year, it appears probable that the requirements of most communities could be filled
if the flood flow of streams were stored for later use. Although many storage reservoirs have been constructed in the region, it is becoming apparent that many more may be needed if the stream flow is to
be regulated and an adequate supply of water assured. Successful control of stream flow and maintenance of storage reservoirs will depend, in part, however, upon slowing the rate of runoff and
increasing the infiltration of water by the application of soil conservation measures.
The irregularity of water flow also affects the problem of stream pollution. The discharge into
streams of sewage from cities or waste from industrial plants and oil fields generally does not pose a
serious problem in the Southwest during periods when the flow of streams is large. When the flow
drops during dry periods, however, the concentration of foreign matter in the streams may become
serious and in some areas water may become so contaminated that it is unfit for use. Regulation of
stream flow to prevent a sharp reduction or disappearance of water in streams during certain periods
would aid in the solution of this problem. There is need, however, in some portions of the region for
further treatment of waste before it is released into the streams. Most urban centers in the Southwest
already treat sewage before discharging it into streams, but in some cases the process is not carried far
enough to prevent some pollution of the surface supply. The need for more careful treatment of waste
both from cities and industries will increase in the Southwest as urban centers increase in size and as
industrial development continues.
The development of hydroelectric power in the Southwest has posed a variety of questions which
are as yet unanswered. Additional power will be required in this region to meet the needs of an
expanded population and increased industrial activity. It has not been determined, however, whether
an extensive expansion of hydroelectric facilities is feasible or whether additional power requirements
can be met more economically by other means. Extensive power facilities already have been constructed
in the Colorado Basin in the far western part of the region, but in the remaining portion the development of power facilities has been limited either by scant and irregular runoff or by the flat terrain. In
Texas, only 9 hydroelectric power facilities have been constructed. Denison Reservoir on the Red
River, constructed for the purposes of flood control and the development of power, is the largest of
these facilities. A series of reservoirs have been constructed along the Colorado River which include
facilities for the development of power. Included among these are: Lake Austin and Lake Travis at
Austin and Buchanan and Inks Reservoirs at Burnet. Power facilities have been installed at the Possum
Kingdom Dam on the Brazos River at Graford. In addition, relatively small facilities have been constructed on the Guadalupe River at Seguin and on the Rio Grande at Orla and at Del Rio. The larger
facilities constructed in Texas have been multiple purpose reservoirs, and the construction of some few
additional facilities of this type may be feasible in the near future. If facilities can be combined in this
manner, many projects could be undertaken which otherwise might not be warranted.
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MONTHLY BUSINESS REVIEW
Conclusion
A study of the water resources in the Southwest and their utilization reveals disturbing and, in
fact, dangerous trends. Ground water resources in areas where they appeared inexhaustible have been
used with reckless abandon as population has increased, new industries with large water requirements
have been established, and farmers have turned to irrigation as a means of increasing crop production.
During recent years of exceptionally heavy water consumption, water levels in underground reservoirs
have fallen lower and lower, indicating that downward infiltration of water from the surface has been
insufficient to replace the large withdrawals. This condition apparently is due in part to heavy withdrawals and in part to the destructive soil erosion which has reduced the absorptive capacity of the soil
and increased the runoff. Numerous communities without adequate ground water supplies turned to
the construction of surface reservoirs. These reservoirs have contributed greatly to the water supplies
of the region, but with the passage of years it has been discovered that their constructed capacity has
been reduced significantly by rapid silting. Associated with these developments have been: (1) the
intensification of floods; (2) the silting of streams and channels resulting from improper land use,
increased water runoff, and soil erosion; and (3) the increased pollution of streams and certain underground reservoirs. A continuation of these trends which reflect waste and misuse of the region's water
resources may mean that the Southwest will soon reach the limits of its expansion and ultimately may
even face a reduction of its industrial activity and farm irrigation.
On the other hand, study of the water resources of the Southwest need not lead only to a discouraging conclusion. Great potentialities for the region are inherent in its water resources, provided a longterm program of development, conservation, and proper utilization of water resources is effected
promptly. Most areas of the region probably receive sufficient rainfall to recharge underground reservoirs or at least to check the rate of decline in water levels and to assure unusually large quantities of
surface water supplies, provided maximum quantities of water are stored and properly utilized. Measures
which would contribute to the attainment of these objectives have been discussed in this article. It
should be emphasized again, however, that the adoption and ultimate successful completion of a wellrounded soil conservation program applicable to the entire region is basic to a solution of the water
resource problem. Such a program would provide the foundation upon which to construct a comprehensive program for the development of water resources and, at the same time, would greatly increase
the agricultural potentialities of the region.
Much of the foundation work for the development of a coordinated water conservation program
has been completed. The United States Geological Survey and the Texas State Board of Water Engineers have assembled extensive information on the flow of all major streams in the region, on the extent
and location of the most important ground water supplies, and on the quality of water obtained from
many of these sources. The Corps of Engineers, United States Army, has compiled a large volume of
basic information which would be invaluable in the development of a water conservation program.
Similarly, the studies made by the Bureau of Reclamation, Department of the Interior, will yield
valuable information for further work in conservation, particularly in regard to irrigation water.
The Soil Conservation Service and the various soil conservation districts working directly with
farmers on the land have developed effective measures to reduce runoff and erosion and to increase
downward filtration of water to underground reservoirs. Moreover, the results obtained from the establishment of these practices on farms in many areas have demonstrated their value in conserving and
improving the soil, in reducing the pollution of streams with silt, and in moderating the irregularities
of water flow. The numerous surface reservoirs either under construction or projected foreshadow
large additions to water supplies and highlight the urgency for extending soil conservation practices.
The steps taken thus far in dealing with the water resource problems of the region indicate that
progress is being made, but an objective appraisal also indicates that these steps represent only segments
of the broad problem of assuring adequate water supplies for the Southwest.
The seriousness of the water problem and the importance of water to the further growth of the
Southwest emphasize the need for the formulation and effectuation of a comprehensive program for
the conservation, management, and utilization of the region's water resources. There is perhaps no
more important basic problem confronting the people of this region today than the problem of its
water resources. The most effective results toward the solution of this problem can be obtained only
through the close cooperation and coordinated effort of all interested groups working in harmony to
achieve the common objective.
MONTHLY BUSINESS REVIEW
133
Review of Business. Industrial. Aqricultural. and Financial Conditions
DISTRICT SUMMARY
Prospective production of most principal crops in the
Eleventh Federal Reserve District is lower than in 1947, due to
acreage reductions and the smaller indicated per acre yields.
While production estimates are not yet available for cotton and
grain sorghums, the brger acreages planted to these crops suggest
the possibility of an increase in production. Although most row
crops and livestock ranges suffered from the dry weather and
hot winds during June, considerable improvement has occurred
since the widespread roins in late June and early July. Under the
stimulus of better grazing conditions, livestock generally are
gaining in weight.
The dollar value of department store sales in the District,
which had been maintained at approximately the same level
during the preceding three months, declined 12 percent from
May to June. This decline, although larger than is usual at this
season, was smaller than that which occurred at the same season
in 1947. In consequence, the increase in sales over the corresponding months last year widened from 6 percent in May to
17 percent in June.
July were about 12 percent higher than those in the corresponding period last year. Factors tending to stimulate sales have been
the widespread clearance sales of summer merchandise and the
frequent special promotional sales.
The dollar value of inventories at department stores, which
turned downward in May for the first time this year, decreased
further by 5 percent in June. However, inventories at the end
of June were 29 percent larger than a year earlier. The trend
of outstanding orders has continued to follow the same pattern
as in 1947. After falling sharply from January to May, outstanding orders rose 55 percent in June and at the end of the month
were 5 percent larger than on the corresponding date last year.
The rate of collections on accounts receivable at department
stores declined by a smaller amount than is usual from May
to June. The ratio of collections during June to regular accounts
outstanding at the first of the month amounted to 52 percent
as compared with 54 percent in May, while the ratio of collections to installment accounts declined to 18 percent in June
from 19 percent in May.
WHOLESALE AND RETAIL TRADE STATISTICS
Daily average production of crude oil in the District and the
Nation reached new peaks in June at levels substantially higher
than a year earlier. Refinery operations were also at peak levels,
and while the strong demand for petroleum products continued,
stocks of most products increased further. The value of construction contracts awarded during June declined sharply from
the postwar peak reached in May this year and was moderately
below the average of awards for the first four months of the
year. The total for June, however, was 24 percent higher than
in the corresponding month last year. According to the Texas
Employment Commission, nonagricultural employment in Texas
rose in May to a new peak which was 5 percent above the level
of May 1947. Further increases in employment were expected in
June and July.
The deposits of weekly reporting member banks increased
further during the four weeks ended July 14. The loans of these
banks increased moderately during the period, counterbalancing the decline that occurred during the preceding five-week
period. Their investment holdings declined slightly, after having
shown an upward trend from mid-April to mid-June.
BUSINESS
Number
or
Retail trade:
Department stores:
Totallllb Disl.....
Chrialj :: : :
gar
Fort Worth .. . ... ,.
Houston .......... .
San Aolooio .•... . .
Shreveport. La.. . . .
Other cities ........
Furniture stores:
Total 1Uh DiaL .....
Dallna ... , •... •. ..
Houston ...........
Port Arthur .... ...
San Antonio ... . . . .
Wholesale b'ade: SurgicaL medical
equip't. !uppbes . .
]"dWltrial supplies ..
relk~ing
48
4
7
4
7
5
3
18
Percentage change in
Net sales
Stocb I
June 1948 from
6 mo. 1948
June 1948 from
May
June
compo with
June
May
1947
6 mo. 1947
1948
1947
1948
-16
12
11
29
-5
-11
12
1
-5
-I
-17
19
6
6
-7
-12
16
21
26
-5
-7
25
33
S9
-5
18
-13
11
23
-1
-I
24
20
13
-2
7
29
-3
39
4
4
4
4
16
35
13
12
16
3
3
6
33
7
6
4
13
49
14
8
6
1
-
- 3
1
8
- I
20
-8
-3
3
17
2
- 2
17
1
26
4
5
-11
H8l"dware ........ .
I
21
-2
-12
Tobaooo & products.
2
- I
-I
No Chg.
- 2
D", goode . •••• • •. •
3
3
1
·Compiled by United States Bureau of CeIllUS. (Ylboleeale tnul", figures preliminary.)
;Stocka at end of month.
tIDdicates change ~ than one-ball of one percent.
8~~::::::::::
-
-1
11
3
7
6
- I
INDEXES OF DEPARTMENT STORE SALES AND STOCKS
Daily a.""...1u-(1ga5-39-100)
Consumer buying at department stores in the District declined by more than the usual seasonal amount from May to
June but exceeded that in June last year by a substantial margin.
The 12 percen t decline in the dollar value of department store
sales between May and June was much smaller than that which
occurred in the same period last year, with the result that the
year-to-year gain amounted to 17 percent in June as compared
to only 6 percent in May. One factor contributing to the better
showing this year, however, was the fact that there was one
more business day in the month than in June last year. The
adjusted index of department store sales, which makes allowance
for seasonal factors and the varying number of business days,
declined in June to 406 percent of the 1935-39 average from
• 418 percent in Mny but was sharply higber than the 362 per, cent registered for June of last year. Despite the decline during
the past two months, the adjusted index for June has been exceeded in only three months-April and May of this year and
November of last year. Data received from we.kly reporting
department stores indicate that sales during the first half of
lIIb District .
])allna . .••.•
IIouston .. . . .
Jun.
1M8
346
293
420
Unadjusted·
May
April
1948
1948
393
390
363
3M
463
463
June
1947
308,
288,
329
JUlie
1948
406
358
483
Adjuated
May
1048
418
377
472
April
1048
448
395
472
June
)947
362r
3.\2
378
Slocka-(I935-39-IOO)
UnadjU8ted·
May
April
June
1948
1948
1948
lltb District. 386
396
409
·Unad.iust.ed for 8OQ8OnaJ variation.
Adjusted
June
1947
298
JUlie
IM8
397
May
April
1M8
1948
417
422
r-ReviseJ.
June
1947
306
The total volume of retail sales at reporting furniture stores
in the District was well sustained during June, showing only a
fractional increase from May sales and a 16 percent increase
over those in June 1947. Cash sales reflected a further decline of
8 percent during June from those in May, while credit sales
increased 2 percent during the same period. Although the ratio
of credit sales to total sales in June showed only a slight increase
from the May level, it has reflected a steady upward trend over
134
MONTHLY BUSINESS REVIEW
the past year. As compared with June last year, the decline of
25 percent in cash sales and the increase of 23 percent in credit
sales have resulted in a 'rise in the ratio of credit sales to total
sales to 89 percent this June from almost 83 percent last June.
The increase in credit sales has been accompanied by an even
larger gain in accounts receivable, the total outstanding at the
end of June being 4 percent larger than a month earlier and 56
percent greater than a year ago. Collections, although 2 percent
smaller in June than in May, have also shown an upward trend
over the past year and in June were 12 percent larger than in
that month of 1947. The much smaller increase in collections
than in accounts receivable is indicative of the general slowing
down in the trend of customer payments on accounts outstanding, as well as some liberalization of terms on installment sales.
The total volume of inventories at reporting furniture stores,
which had increased moderately during the first four months
of the year, declined somewhat during the past two months and
at the end of June was only about 1 percent larger than a year
ago.
The Upward Trend in Business Failures
After the outbreak of World War II, the number of commercial failures in the Eleventh District, in common with the
trend in the United States, declined sharply. In 1945, the last
war year, there were only 5 defaults in the District as compared
with 273 failures in 1941. The virtual disappearance of failures
reflected the usual wartime conditions of rising prices and of a
strong demand for all classes of merchandise, which were conducive to profitable operation of business establishments. In
the three postwar years these same factors have continued to
react favorably upon t he maintenance of business profits, but
the rapid increase in the number of business establishments and
the increase in competition have made it difficult for some concerns to show a satisfactory margin of profits. In consequence,
the number of business failures has shown an upward trend.
From the accompanying table it will be noted that there were
62 failures in 1947 as compared with 16 in 1946 and that there
were 55 failures in the first half of 1948 as compared with 22 in
the comparable period of 1947. While the current rate of failures
is still well below the prewar rate, the upward trend is indicative
of the increasing stresses and strains in business operation.
than last year and sorghum acreage is up about 1,000,000 acres.
Increases in acreages for harvest are indicated also for barley,
rye, flax, and rice, while decreases arc reported for corn, sweet
potatoes, peanuts, and all hay.
The droughty conditions which prevailed over the major
portion of the Eleventh District during most of June caused
extensive damage to row crops in some areas but enabled farmers
to make rapid progress with field work and harvesting operations. Since the widespread rains around the first of July, which
broke the drought in most areas, crops are making good growth.
Grazing conditions, also, arc showing marked improvement in
most range areas, and livestock are gaining in weight but their
condition is still below average for this season.
The United States Department of Agriculture estimated the
cotton acreage in cultivation in the Nation on July 1 this year
at 23,653,000 acres, which is 2,153,000 acres or 10 percent
above that in 1947 and about 2 percent above the 10-year
(1937-46) average. All important states, except Oklahoma,
have increased acreages over last year, with the greatest percentage increases being in the extreme western states, where
cotton is grown under irrigation. The Texas acreage, which
constitutes about 39 percent of the Nation's total this year,
accounted for about one-third of the increase in the national
figure. The State total, estimated at 9, 200,000 acres, is 9 percent
greater than last year and about 10 percent above the 10-year
average and represents the third successive year of increase since
the low level reachd in 1945. Plantings in all major cotton growing areas of Texas have been expanded. The High Plains and
Edwards Plateau counties accounted for the largest percentage
increases, although very significant increases occurred in the
Blacklands, east Texas, and Cross Timbers counties and in the
Lower Rio Grande Valley. The dry weather during June enabled
farmers generally to bring the crop into a good state of cultivation, was conducive to the development of a good taproot on
plants, and assisted in the control of insect infestation. The
rains early in July were very beneficial to cotton, giving the
plants the moisture needed for rapid growth and fruiting,
Recent reports, however, indicate that insect activity is increasing in some areas.
TEXAS PLANTED COTTON ACRES BY CROP REPORTING DISTRICTS
(In thousands)
THE NUMDER AND LIABILITIES OF COMMERCLAL FAILURES
Eleventh Federal Resen6 District
Number of oommereinl failures
MODth
1945
1946
1
2
2
1
November ...........
December . , . , , ......
2
1
2
1
3
2
1947
2
3
5
5
3
4
7
7
7
8
3
8
TotaL ... ,
16
62
January .... . ....... .
February , . . . . . . . . ...
Man:h .... . .........
tr.;l.:::::::: :::::::
JuDe . .• .. •• . • .. . • •••
July ........... .. . ..
Augu.t ..•......... ..
September .. .. ... . ...
October ...•.•.•.••..
1948
10
4
10
8
8
IS
Totalli"bilitics
(In thOU8BDds of dollars)-_
1045
110
1046
5
I
4
150
155
2
B3
I 99
22
1047
12,509
120
309
892
38
269
140
202
84
102
42
310
11,146
16,317
149
14
184
20
m
19.f881i
CroP
reporting
1948
1198
101
525
ISS
324
512
AGRICULTURE
The total acreage of all crops for harvest in Texas during
1948 is estimated by the United States Department of Agriculture at about 1 percent below that harvested last year. Wheat
acreage for harvest is down about 1,600,000 acres from 1947
due principally to the fall and winter drought, which reduced
the acreage seeded and caused substantial acreage abandonment.
The oat acreage is down almost 600,000 acres largely because
of the damage resulting from the March freeze. Since much of
the acreage intended for wheat and oats was planted in cotton
and grain sorghums, cotton acreage is about 775,000 acres larger
districts
I-N .... ... .... ....
I-S .... ...........
2 .. .•. . . . . •.•.•.• ..
3 .. . . . . . . . •.•.•.•... . . . •
4 .. . . . . . •.•.•.......••••
S . . . . . . . •. •
6. . . . .
7.. . .
8. . .
9 .. .
10
State . ...
.... ...... ..... .
1945
54
418
1,326
8S
2,147
611
78
99
668
1946
79
690
1,331
73
2,243
502
79
78
625
1947
179
2,046
1,61S
63
2,332
SSI
91
114
264
684
269
284
319
284
467
6,029
6,283
8,426
1948
Indicated
260
2,300
1,650
75
2,650
625
100
150
700
290
SOO
percent
of 1947
145
112
102
119
109
113
110
132
102
102
107
9,200
109
The estimated 2,798,000 acres of corn for harvest in Texas is
5 percent below last year's acreage and is the lowest acreage
since 1925. The initial production forecast of 43,369,000
bushels compares with 48,592,000 bushels last year and a 10year average of 70,422,000 bushels. The rain came too late to
benefit materially much of the early corn in central and southern
counties of the State, but the late crop has shown rapid improvement and yields are expected to exceed earlier estimates. That
farmers in the Distric t arc shifting rapidly to use of hybrid seed •
for corn planting is indicated by a recent report of the United '
States Department of Agricu lture, which shows that this year
hybrid seed were used to plant 50 percent of the acreage in Texas,
56 percent in Oklahoma, and 18 percent in Louisiana. These
percentages arc more than double those in 1946.
135
MONTHLY BUSINESS REVIEW
~
Harvesting of wheat in Texas is virtually completed, with
yields exceeding earlier expectations. The generally favorable
weather conrlitions, ample supplies of labor and equipment, and
generally adequate transportation and storage facilities accelerated the harvesting .nd movement of the crop. The July 1 estimate of 57,020,000 bushels, while about 2,000,000 bushels
above the estimate a month earlier, is less than half the record
crop of 124,270,000 bushels in 1947. The indicated per acre
yield of 10 bushels this year compares with 17 bushels last year
and a 10-year average of 11.6 bushels.
CROP PRODUCTION-(In tho"",,nds
or bushels)
- - - - Texas
States in Eleventh Dilrtrict.-Average
Estimated Average
Eatimated
1937-46
1947
july 1.1948 1937-46
1947
July 1. 1948
Win ter wheat .
45,686
124,270
57,020
1I3,OOIt 238,712t
169,368t
Corn. ..
70.422
48.592
43.369
123.899
87.11M
89.395
Oat......
34.370
31.248
14.134
66,166
69,006
40.164
Barley . .. ...
",049
2,520
2,370
12,12O t
9,230t
10,887t
Tame hayt. . .
1,193] ,246
J ,217
3,621
4,044
3,9.53
Potat.oes. Irish
4,311
4,536
4,400
9.978
9,260
8,490
5,121
•.675
3,8M
14,3666
12,56S4
IO,4M4
Potatoes. sweet
Rice . . . . . _
15,588
23,700
24,096
36,99145,16547,221·FiJUreI are combined totals ror the five states Iyi~g wholly or partJ.y in t.he Eleventh
Federal Reaerve District: Texas, ."rizona, Louisiana, New Mexico, and Oklahoma. tin thol18&nds
of toM. tAri%ooa, New Mexico, Oklahoma, and Texas. 4Louisiana, Oklahoma, and TeDII.
-.Louisiana and Texas.
SOURCE: United States Department of Agriculture.
Grain sorghums for harvest in Texas are estimated at
6,005,000 acres or about 18 percent above the acreage harvested
last year. Grain sorghum harvesting is active in southern counties
of Texas and is get~ing under way in the central part of the
State. The crop in the High Plains and Low Rolling Plains is in
good condition, although limited planting is being continued
and much of the acreage is later than usual.
~
CROP ACREAGE-(In tho....oda)
States in Eleventh District e__
T....
}I
~or
- - Harvested - _
.For
--Harvested - Avemge
Average
harvest
harvest
1937-46
1947
19.8
1937-46
1947
19.8
Cottont . . ...............
8,357
8,.26
11,444
9.200
10,802
11,705
Corn .
4,392
2,945
2,798
7,M2
5,226
5,350
Wheat ...
3,952
7,310
5,702
14 ,7~41
9,0251
12.8731
Oats.
1,456
1,488
893
2,955
8,078
2,173
Barley :: :
237
144
158
6671
4041
4741
e ..
16
35
11l1"
60
88'
103'
Rlce .....
33G
474
602
8821,0871,127Flax ... ....
36
91
160
199o
700
115°
Tame hay . .
1.244
1,481
1,352
2,831
3,386
3.187
Wild hay .....
186
200
200
6161
G701
MGl
Potatoes, Irish
.
53
42
44
132
92
98
Potatoes, sweet ....
61
47
55
173152"
135e
All sorghum ....... .
6.712
5.629
6.626
9,143
7,317
8,440
Peanuts (alone) .....
636
907
816
1,272+
1,145+
834'
Cowpeaa (alone} ....
272$
.80
186
167
707 41
286·
-Fi~ are combined tatala for the five atate8 lying wbolly o~rtly in the Eleventb
Federal
rye District: Texas AriIOll8 t Louisiana, New Mexico, a Oklahoma. tAcreage
in cultIvation July 1. t,Arizona, New MeDco, Oklahoma, and Tens. 4New Mexico, Oklahoma,
and Texas. -Louisiana and Texas. DAriJona, Oklaboma 1 and Texaa. "Louisiana, Oklahoma,
and Texas. +Louisiana, Oklahoma, Texas, and New M.eXlco.
Rr
SOURCE: United States Department of Agriculture.
Estimates of this year's acreage and production of other import.1nt crops, such as oats, barley, rice, hay, and Irish and
sweet potatoes, arc shown in the accompanying tabks. The oat
crop in Tex.s this year, estimated at 14,734,000 bushels, is less
than one-half the 1947 harvest and the 10-year average production. The Texas rice crop of more than 24,000,000 bushels,
an all-time high, results from an increased acreage with betterthan-average yields. Hay production in the State is estimated
to be about average, although yields are below average. Irish
potato production will be about average, with very good yields
reported. Because of smaller acreage and below average yields,
~ this year's sweet potato production is expected to be considerably
, below normal.
Conrlitions were improved during the second half of June and
early July over most of the commercial truck crop areas of the
District, and local showers were beneficial to late cantaloupes,
potatoes, tomatoes, and watermelon. However, heavy rains in
part of the Rio Grande watershed caused floods from around
Del Rio down to below Laredo, damaging fall-crop seed beds
being prepared in that area but causing no serious damage in
the Lower Valley. These rains replenished supplies of badly
needed irrigation water. Transplanting of peppers and tomatoes
in the Winter Garden area and of tomatoes in the Eagle Pass
district is progressing satisfactorily, and preparation of soil for
fall vegetables is active in the Lower Rio Grande Valley.
Harvesting of potatoes is under way in practically all areas
of the Panhandle district, with good yields and quality reported.
The Texas peach crop of 961,000 bushels is 43 percent below
the average-sized crop of 1,696,000 bushels harvested last year,
while the pear production of 226,000 bushels is only about half
of last year's crop. The condition of Texas citrus declined
further during most of June because of continued dry weather
and shortages of irrigation water but is showing improvement
since the replenishment of water supplies.
Reflecting the effects of the spring drought over the range
areas of the District, the condition of ranges had dropped to an
Wlusually low level on July I, but since the rains a noticeable
improvement has occurred in virtually all areas except in the
Trans-Pecos region of Texas, where droughty conditions still
prevail. Ranges in southern New Mexico and Arizona are in
fair to good condition, although additional moisture is needed.
Livestock were generally in poor to fair condition on July 1,
due principally to the shortages of pastures and range grasses,
but with the recent improvement in grazing conditions they are
showing noticeable gains in weight.
The receipts of livestock into the Fort Worth and San
Antonio markets in June were sustained at the May level, due
largely to forced marketing of sheep and cattle because of the
poor range conditions, but were 11 percent below those in the
corresponding month last year.
LIVESTOCK RECEIPTS-INumOOr)
Class
Cattle ....... . . .
Calves ....... ..
Hogs ..•••• ... . .
Sheep., .••••. . .
- - - F o r t Worth-----=-- San Antonio - - June
June
May
June
June
Ma.y
1948
1947
1948
1948
1947
1948
89,602
112,923
83,269
38.170
42 ,408
33,724
28,797
33.840
22,637
27,488
21,983
21,225
8,709
57,766
38,188
112,227
6,365
5,475
321,$;6
401,016
290,762
79.294
72,834
72,154
COMPARATIVE TOP LIVESTOCK PRICES
(Dollars per hundredweight)
San Antonio - - - - - F o r t Worth
May
June
June
May
June
June
1948
1947
1948
1948
1947
Class
1948
130.00
124.00
Beef steers ... _...
125 .50
132.00
131.75
133 .00
Stocker steers ...... _
22 .60
28.00
28.50
·22:50 30:00
30.00
25 .50
32.60
lieifers and yearlings
36 .00
18.00
24 .00
25.25
25.00
24.50
19.50
Butcher OOW8.
30.15
30.00
23.50
25.00
31.00
Calves ..
31.50
24.76
24. 50
27.50
26.00
25.00
Boga ....
28 . 00
21.50
26.60
26.50
25.75
29.00
30.00
Lambs ..
The mid-June report of the United States Department of
Agriculture indicated that prices received by Texas farmers
made sharp but diverse changes during the month. Prices received for most meat animals, truck crops, poultry, and dairy
products advanced during the month. Wool prices advanced
sharply to a mid-June average of 60 cents per pound. On the
other hand, prices received for potatoes, cotton, hay, and most
grains declined.
Reports from spOt commodity markets indicate that from
June 15 to mid-July, prices received by farmers for livestock
made substantial gains, while prices received for cotton and
grains declined sharply. Cotton was down within about 5 cents
per pound of the interim loan rate. Wheat prices declined within
striking distance of the support level, while other grains sold
appreciably above their support prices.
136
MONTHLY BUSINESS REVIEW
FINANCE
During the four-week period from June 16 through July 14,
total loans of selected m ember banks in leading cities of the
Eleventh Federal Reserve District increased by $14,645,000,
while total investments declined by $3,798, 000. Total deposits
of these banks, which include the largest banks in the District,
:ose by $43,940,000 as all major categories of deposits reflected
Increases.
The weekly trend of commercial, industrial, and agricultural
loans of these selected banks was irregular during the past month,
with decreases of $2,718,000 and $1,037,000 being reported for
the weeks ended June 23 and July 14, respectively, and increases
of $10,837,000 and $6,495,000 during the middle weeks of the
period. Although the total of commercial, industrial, and agricultural loans rose by $13,577,000 during the four-week period,
the amount outstanding on July 14, $702,012,000, continued
lower than the total outstanding at the end of 1947, when commercial, industrial, and agricultural loans of these banks aggregated $711,487,000.
With the exception of loans for security trading, other major
categories of loans, including real-estate and "all other" loans,
showed moderate increases during the four-week period cnded
July 14. In contrast with the trend of commercial, industrial,
and agricultural loans, which have declined since the first of
the year, rea l-estate loans and "all other" loans have shown a
rather steady increase from week to week. Real -estate loans of
the selected member banks in leading cities on J uly 14 totaled
$84, 146,000 as compared with $76,979,000 on December 31,
1947, while "all other" loans increased to $169,599,000 on the
latest reporting date or $10,083,000 more than were reported at
the end of last year.
Changes in the investment portfolios of the selected member
banks in leading cities showed a decline of $6,919,000 in holdings of United States Government sec urities resulting from a
decline in holdings of United States Government bonds and
Treasury certificates of indebtedness, offset in part by an increase of approximately $19,911,000 in Treasury bills and
$1,748,000 in Treasury notes. These banks added to their holdings of other stocks and bonds during the period ended July 14
by $3 ,121,000.
COKDITION STATISTICS OF WEEKLY REPORTING MEMBER BA.'1KS
IN LEADI NG CITIE3--Elevcnth Federcil Reserve District
(In thousands of dollars)
July 14,
July 16,
June lu,
Item
1948
1947
IM8
Total loans and investments .. ,...
. ....... $2,249,773 S2,096,166t $2,238,9261
Total loans- Netto.. ............................
1,016,919
..
Totalloa.ns~Gross.,.""",.,................. 1,023)!J6
829,317t I,008,55i t
Commercial , industrial, and agricultural loans..
702,012
551 ,358
688,435
Loans to brokers and dealers in securities..
6,505
6,176
5,756
Other loans for purchasing or carrying securi ties ..
60,(31)
6G,912
62,002
lWal~state loans .... .. . . ................ , . ...
84,146
73,651
83,790
Loans to banks.. ..
. .. .
4f14
144
404
Allotherloans ... . ......... ,',.,',.
169,599
131,076
168,164
Total investments . ....... . . ,',.......
1,226,577
1,266,840
1,230,375
U. S. Treasury bills..........................
56,251
17 ,508
36,340
U. S. Treasury certificates of indebtedness.....
191,676
229,499
195,836
U. S. Treasury notes,............
95,766
124,H2
94,018
U. S Government bonds (mel. gtd. obligations)
766,948
799,317
791,366
Other securities . . . .. . . .. . . . . . . . .
115,936
96,083
112,815
Reserve with Federal Reserve Bank. . . . . . .
487,298
468,268
493,018
Balances with domestic banks . ....
.
343,187
309,469
337,520
Delll8nd deposits-adjusted- .. . ..... ,""
1,934,961
1,769,560
1,919,033
Time deposits ................ . . . . . .. . ..
411,706
37g,26G
399,908
United States Government deposits ...... , .
34 ,790
11,535
30,738
Interbank dopoaits ....................... ,.
569,316
592,014
557154
Borrowillgll from Federal Resen-e Bank. .
400
2,000
None
-Includes all demand dep06lc.s other than illterbank and UJlitd States Go,'(!rnmcnt less
cash items repor ted as on hand or in process of collectilln,
•
AAfter deductions for reserves and unallocated cbargc-offs.
tPrior to JUlle 30, HH8, the individual classes of Irons were reported net; Dowevu, the
amount of reserves de.::iuct.ed 6ubt!Cqucnt to JUDe 30, 1948, was so small as to !:Jave no significant
effect upon the comparability of the claW!..
Reports of all member banks in the District reflected an increase of $18 ,000,000 in loans and investments during June,
accounted for by all expansion of loans by $10,000,000 and an
increase of approximately $8,000,000 in investment portfolios.
Whereas loans of the selected weekly reporting member banks
of the District declined during the first six months of the year, ~
the loan volume of non-reporting country banks showed an ,
increase of $79,000,000 during the six-month period. In view
of inflationary developments and, in fact, the threat of even
more inflation, the trend of bank loans is being watched very
closely by monetary and credit authorities and by others who
are interested in following the trend of economic events. If
bank credit expansion in the months ahead should exceed normal
seasonal trends significantly, it is feared that the resulting increase in the money supply would give another stimulus to the
inflationary movement.
CONDITION OF TilE FEDERAL RESERVE DANK OF DALLAS
(in thousands of dollars)
July 15.
Item
T otal gold certificate resenrcs. . . . .. . . • . • • • •. •• .
Discounts for member banks.... . .. . . . . .• .• . . ... .
Foreign loans 00 gold ................. , , , . . . , ..
U. S. Government IICcurities.
~oe~lt!r~~t :~e' d~POOib ~ ..... : :: : : ...... , .
Federol Re3Crve notes in actual circuwtion.
IM8
1539,~8
400
7.8M
966.670
974.824
823 ,332
599.792
July 15,
IM7
1484.266
June 15,
1948
2.200
908
720
8.058
939.650
948.428
844.937
694.669
$563,406
920.030
923.138
77B,444
6B4.100
Reflecting the holiday demand for currency, Federal Reserve
notes of this bank in actual circulation increased between June
28 and July 8 by $10,207 ,000. Following the 8th, a return flow
of currency resulted in reducing the amount of this bank's notes
in actual circulation to $599,792,000, a sum approximately
$5,000,000 more than was outstanding on the comparable date
a month earlier. Other changes between June 15 and July 15
in the condition of this Federal Reserve Bank included a decline
in gold certificate holdings amounting to $23,858,000 and an
increase of $26,920,000 in holdings of United States Government securities. This increase in the bank's portfolio of Govern- ~
m ent securities was reflected in a virtually identical increase in 11
total carning assets, as discounts for member banks were relatively insignificant in amount.
BANK DEBITS. END·OF·MONTH DEPOSITS. AND ANNUAL RATE OF TURNOVER
OF DEPOSITS
(Amounts in thousands of dollars)
---Debits---Pctg.rha.nge over EDd..aC-month
May
depositaJune
City
1~8
1947
IM8 June 30, If148
Amona : Tucson . . . . 1 63.274 31
3
1 82.326
Louisiana:
Monroe ....... . ...
15
-6
30,389
40.699
Shreveport ........
130,569 18
2
158.095
New Mexico: Roswell
14,905 28
10
17.343
Tcxaa:
18
Abilene ........... .
33.185
3
41.922
-7
Amarillo .......
17
84 ,771
85.613
Austin ........ .
114,557 21
19
1(14.933
I
Beaumont . .... .
95.280 30
93.805
-I
17
Corpus Christi ... . .
76.995
73.525
10,075 17
Corsicana .. . . ,.
10
19.os8
Dallas .......... .. 1.004.961 25
10
7:14.846
I Hl,516 34
112,281
5
EI Paoo ...........
371.878
14
19
274,276
Fort Worth ........
12
Gal veston . , .......
74.576 26
91,270
Houston . . .. , .. . . . . 1.091 .405 39
7
881.684
19.313 31
8
!Bred.............
23.380
58,733
26
-1
Lubbock ..... .... .
68,0 13
35,748 20
Port Arthur .......
39.970
2
San Angelo ...
34,611 31
11
39.8.5.\
259.462
19
4
&l.n Antooio ....
317.989
14,871
21
22,66 1
Texarkanaf .. .. .
6
40.130 27
3
53.873
~Icr ......... .
ftco .......•.•
62.926
50.804 19
6
Wichita Falls ...
60,432
24
11
80.083
June
---
Annual rate of turnDver
Jun.
IM8
9.1
J une
IM7
7.4
May
IM8
8.6
9.2
10 . 0
10.3
8.5
9.2
8.3
9.8
9.8
9. 2
9.6
8.8
lU
11 .8
10.8
12 .2
5.4
14.8
10.3
14.3
7.9
12 .6
8.6
10.1
9.4
9.0
8 .4
6 .7
8.0
8.4
8 .9
12.4
13.2
12 . 2
12.7
6.4
16 .8
12 . 2
16.2
9.7
15.1
10.0
10.3
10.9
10.7
9.8
8.0
9.1
9.7
9.2
i.5
13.2
11.2
12 .0
12.7
6 .8
16 . 7
lU
13.7
8 .6
14 . 4
9.2
10.3
10.7
9.7
9.6
7.7
9.0
9.2
8.5
Total-24 cities ... ... $3,89 1,282
26
$3,520.514
13.4
11.5
12.6
-Demand a.nd time deposits at the end of tbe month include certified and officers' chew
outstanding but exclude deposits to tbe credit of ban..k.s,
tTbis fip;ure includes only one bank in Texarkana, Texas. Total debits ror aU banks iu
Texarkana., Texas-Arkansas, including two banh located in 'he Eighth District. amounted to
125.201.
Bank debi ts as reported by banks in 24 cities throughout the
District increased 8 percent during June and continued at a
level approximately 25 percent above the corresponding month
of a year ago. The increase in bank debits was general over the
4
137
MONTHLY BUSINESS REVIEW
District, as 20 of the 24 reporting cities showed increases ranging from relatively minor amounts to as much as 19 percent
in Fort Worth and Austin. Accompanying the increase in bank
I debits was a further increase in the annual rate of turnover of
deposits from 12.6 during May to 13.4 in June. Tlus latest figure
compares with a turnover rate during June 1947 of 11.5 and
indicates a rather significant increase in the velocity of bank
deposits.
Gross demand deposits of the member banks of the District
rose during June by approximately $47,000,000, while time
deposits rose by about $6,600,000. Most of the increase in demand deposits occurred at the reserve city banks, where the
total rose from $2,384, 586,000 to $2,415,559,000, although
an increase of approximately $16,000,000 did occur at the
District's country banks. Likewise, a large part of the growth in
time deposits during June occurred at the reserve city banks,
where the total increased by more than $5,600,000 as compared
with an increase of approximately $1,000,000 at the country
banks. After reaching a total of $5,319,138,000 in January
1948, gross demand deposits of the member banks of this District declined until April, when the total was some $331,500,000 less than during the first month of the year. Since April, the
trend of deposits in this District has been upward and is reflecred
by an increase of more than $57,000,000 from the year's low
point which was reached during that month.
GROSS DEMAND AND TIME DEPOSITS OF MEMBER BANKS
Eleventb Federal Reserve District
(Averages of daily figures. In thousands
Combined total
_
Date
June 1946 .......
June 1947 ....
February 1948 .
March 1948 ...
tf,'ilIlH8 ...
ay 1948 ....
June 1948 ... _
G_
demand
.... 14.957.846
4.649.262
...... 5.088.150
.... 5.019.464
... 4.987.655
4,097.789
5.044,942
or dollars)
Reeerve city banks
Country bang
G.....
Time
1486,139
540,000
564,973
569.1m
574,507
509,650
576,282
G.....
demand
Time
dellland
Time
12,461,342 1310.839 12,496,504 Sli5,500
2,234,857 338,684 2,414,405 201,316
2,392,425 355.853 2,SgS,725 209,120
2,357,864 357,605 2,661,600 212 ,195
2;154,48'> 362,106 2,633,171 212,201
2,384 ,586 358.943 2,613,203 210,713
2,415,559 364,548 2,629,383 211,734
SAVINGS DEPOSITS
Eleventh Federal Rese"e District
June 30, 194 8
Number of
a
32,719
Amount of
aaviOWJ
deposata
I 25,545,100
Dallaa .. .. . .......... .
E1Paoo ...............
Fort Worth ............
Galveston .. . ..... .... .
Houawn . ... . ........ . .
Lubbock . .............
Port Arthur . ......... .
San Ant.ouio ......... ..
W.co ........ .........
Wichita Falla .. . ... ....
All other .... ........ ....
3
8
2
4
4
8
2
2
5
3
3
55
12,086
141,151
32,291
43,173
23,202
106,015
1,415
6,274
38,841
10,112
6,937
62,930
6,276,843
79,099,636
22,824,206
34,731,691
21,924,346
72,970,498
1,824,523
4,846,055
46,955,352
9,698,643
4,516,221
04,204,922
Total .........
102
517,146
1385,410,327
City
Louisiana: Shreveport ....
esn:s:
Beaumont ..... ... .....
reporllnl
bow
Number of
lavinp
depositors
Percentage chanll:~ in
aavingB deposita from
lune 30,
1947
- 3.2
May 31,
-10.5
- 0.01
- 5.1
-1.7
2.5
2.9
- 1.0
- 8.6
- 0.4
- 0.5
- 2.S
- 0.2
- 0.6
0.6
0.2
0.7
- 0.03
O.S
2.9
- 1.0
0.6
1.6
0.3
0.2
-
0.5
lIHS
0.7
0. 5
Statements of the United States Treasury show that the gross
public debt amounted to $252,292,000,000 on June 30, 1948,
a decrease of $5,994,000,00 0 during the year. Interest-bearing
marketable public debt issues were reduced $8,356,000,000
during the fiscal year just closed, but that reduction was offset
~ in part by increases in special issues, a net increase in savings
, bond s outstanding, and net sales of 2 y., percent investment
series bonds. Since February 28, 1946, when the highest point of
the public debt was reached, interest-bearing marketable public
debt obligations have been reduced $39,464,000,000. During
that period from the end of February 1946 until June 30, 1948,
decreases totaling $3,275,000,000 of Treasury bills, $18,825,000,000 of certificates of indebtedness, $8,176,000,000 of
Treasury notes, and$9,173,000,000 of Treasury bonds were recorded. During the fiscal year just closed, reductions included
$6,861,000,000 of Treasury bonds, $2,708,000,000 certificates
of indebtedness, and $2,018,000,000 Treasury bills, offset in
part by an increase in the issue of Treasury notes amounting to
$3,233,000,000,
MEMBER BANK RESERVES AND RELATED FACTORS
Eleventh Federal Reserve Diatrict
(In millions of dollars)
Changes in weeka ended
Cumulati.,e changes
• weeks
Item
Federal Reserve creditlocal ............. .. .. .
Interdislriet commercial &;
financial transaetions . . .
Treaaury operationl . .....
Currency transaetions .....
Other ~t.s at the
Fede Reserve Bank . .
Ot.her Federal Reeerve
aecounta . ......... ....
Member bank: reeerve
balances ........... ....
July 14,
1948
July 7,
1948
June 30,
1948
June 23,
1948
euded
July 14,
104S
-1.8
I.l
- 0.4
- 5.6
-
-10 .1
12 .6
1.5
- 4.2
25.9
- 6.7
2.0
3.3
- 2.5
-7.3
- IS.4
-19 .6
23 .4
- 9.4
-78.3
18 .6
24 .3
0.1
0.2
-
0.2
-0.1
- 0.1
0.1
- 0 .1
3.6
- 0.1
-
1.7
6.7
Jan. 1 to
July 14,
1945
-
6.8
0 .7
-12 .4
-37.9
16.3
2.1
-33 .0
2.2
Note: Amount" preceded by a minus sign reduce reserves; &11 othe1'3 add to rceervC6.
Interest payments on the public debt during the fiscal year
1948 amounted to $5,211,000,000, an increase of $253,000,000
compared with fiscal 1947. The over-all computed average rate
on the interest-bearing public debt outstanding on June 30,
1948, was 2.182 percent, compared with 2.107 percent a year
ago. That increase in the average interest rate was due to the
continued issue of nonmarketable and special issues at higher
than average rates. Of course, it should be pointed out that,
although the rate on 91-day Treasury bills during the fiscal year
was allowed to rise from VB percent to approximately 1 percent,
the Treasury recovers a substantial amount of that increased
interest cost Cas well as the increased interest cost on certificates
of indebtedness), since Federal Reserve banks hold the greater
part of such securities and pay 90 percent of their net current
earnings after dividends into the Treasury. The increase whjch
has occurred in the interest rate on one-year certificates of indebtedness will not be reflected in interest payments until the
maturity of such certificates, which occurs in the fiscal year
1949.
INDUSTRY
Nonagricultural employment in Texas and in the Eleventh
Federal Reserve District during the first half of 1948 resumed
the upward trend which had prevailed during most of 1947.
Following the normal seasonal decline in the first two months
of the year, employment turned upward in March and continued to increase in April and May, exceeding the previous alltime high of December 1947. Employment in May was about
2.5 percent above the February low, about 1 percent above the
December 1947 peak, and about 5 percent above that in May
1947.
From the February low through May, employment increased
in all of the 18 major labor market areas of Texas except Corpus
Christi, which showed nO change. The largest increases in numbers employed were in the Dallas, Fort Worth, Beaumont-Port
Arthur, and Houston-Baytown areas.
The gains in employment were shared by nearly all major
nonagricultural industries. Construction led the advance, largely
due to the normal spring expansion of this industry.
138
MONTHLY BUSINESS REVIEW
Reports received by the Texas Employment Commission indicate some further expansion in employment for June and
July, with most of the increase occurring at manufacturing
plants.
NONAGRICULTURAL EMPLOYMENT-TEXAS
(In tbousands)
_:-:----:-N umber or employees ----:.,..---May
MIlY
April
1948
1947
1948
Total nonagricult.ural emploYlUent. ...... 2,255.6
over May
1~7
2,2.18 . 8
Manufacturing employmeut........ . . 379,9
Nonmanufacturing emploYlUcut , .•.. 1,875. 7
C banKe - May 194.8
375.2
1,863.6
Major labor market areas:
Abilene........ ... . .. .. ........
Amarillo....... .... . . .... .........
17 .2
34.. 1
17 .8
27.7
16.8
34 .0
Beaumont-Port Arthur... .
69.4
65.7
68.3
Austin... ... .........
43.1
4U
2~U
49 . 1
126. 1
47 .3
120,9
48.8
124.6
56.6
24 .2
M .O
20 .6
66.4
24.0
H ouston-Baytown.. .. ..............
304 .7
200.2
Longview-Kilgore-Gladewater.. . . ....
21."
20 .6
20 . 9
25. 1
16 .3
25.0
25.0
14.6
148.4
20 .2
42 .6
16.2
151.6
28.8
43.0
Lubboek.. ........................
Ban Angelo... .... . .. ........ ..... .
San Antonio..................... ..
Tenrkana......... . ......... . .....
151.4
29.5
43.1
-
0 .6
-
3.7
2 .6
U
1.1
42 .9
El P.... . . . .. ....................
i'ort Worth............ ...........
Galveston-Texas City.
Harlingen-Brownsville ...........
If.j~':. Cbri$i: ::: :::
.... .. AU
42. 0
303,0
a.7
1.8
5.2
2 .6
3.7
14.5
0.9
0,1
1.7
29.9
27.6
29.6
3.0
0.3
0.6
2 .3
TotaL ........... "" ..... 1.310 .4
1,251.1
1.300.7
69 .3
Waco ................ .. .. .. ...
WicbitaF.US............... ...... .
41.3 percent in June as compared with the year's low of about
37.6 percent in February and with about 40.1 percent in June
last year. On the other hand, the percentage yield of other major I
products has shown a corresponding decline. Due to the high I
level of refinery operations, supplies of most refined products
have been increasing during the past three months and the decline in stocks of gasoline has been less pronounced that is usual
at this season. At the end of June, stocks of the principal refined products ranged from 15 percent to 27 percent higher
than on the corresponding date last year. Stocks of crude oil
have shown litde change during the past three months because
the expanding refinery operations have absorbed the increased
output, but current stocks are about 13,000,000 barrels lower
that a year ago.
CRUDE OIL PRODUCTION-(Barrcls)
June 1948
productioo
Ana
Tcma:
District I ............... . .
2 ... . " .... ".,,"
3. " " ...... " " ..
L " .. "." " " ..
6,." ....... " .. "
SOURCE: Teua Employment Commisaion.
Since agricultural employment will reach its normal seasonal
peak during the summer or fall months, total employment in
Texas and in the District is expected to reach another all-time
high at that time.
Unemployment generally has moved downward in recent
months. The May 1948 figure of 51,970 unemployed reported
for the 18 major labor market areas of Texas is about a third
lower than the figure for a year ago. Young workers who left
school around the end of May added somewhat to the number
of unemployed, but the increases in total employment are
likely to absorb a considerable portion of these additions to the
labor force.
The daily average production of crude petroleum in the
Eleventh Federal Reserve District and in tbe United States
again reached new peaks during June. Production in the District,
which totaled 2,695,900 barrels daily, was 37,100 barrels larger
than in May and 206,100 barrels in excess of that in June last
year. Production outside the Eleventh District rose to 2,789,900
barrels daily, exceeding by 19,100 barrels the total during May
and by 181,800 barrels the total for June 1947. On the basis
of recent studies of maximum efficiency production rates, the
Texas Railroad Commission reduced production allowables in
Texas by about 50,000 barrels daily for July and August, but
it is anticipated that the effect of this reduction will be counterbalanced largely by production from new wells completed during the period.
The consumption of petroleum products has continued to
expand, and estimates of probable consumption during the next
nine to twelve months are being revised upward. In order to
meet the heavy current demand for petroleum products and to
build up supplies of certain products in anticipation of increased requirements later in the year, refinery operations are
being increased steadily. In the Eleventh District, crude oil runs
to refinery stills were maintained during June at about 1,760,000
barrels daily or about 19 percent higher than in June 1947, and
in the United States, reached a new peak of 5,642,000 barrels
daily or about 10 percent higher than a year ago. The yield of
gasoline, which had been reduced substantially earlier in the
year to permit a greater production of heating and fuel oils,
has risen steadily in recent months and averaged approximately
Daily ug.
ptociueLioo
Total
6." .... ".,,"" .
Other 6 . .. .. ......
7b" .. " " . " ... "
7c • ••.............
8 ..... " " ..... ...
9" .. . " ... .... ...
10" .. .... ........ .
868.260
5,209,600
14.926,900
7.692,500
1,409,100
9,33 1,860
3,686,460
1,449,250
1,380,800
20,928,760
4,196,450
2,588,160
Increase or decreue in daily
average production from
28,608
173,653
497,603
256.4 17
46.970
311,062
May 1948
1.708
1.613
4,456
791
601
721
122,881
942
48,308
46,027
697,625
139,882
86,272
2,455,268
127,763
112,877
2,695,008
2,789,918
5,486,826
3.164
988
9.602
1,395
1,700
Total Te.IaI .•............. 73,6S8,050
34.178
New Mexico .... . ...... ......
3,832,900
1.605
North lAuiaiana ........ ......
3,386,300
377
37,098
Total Elevent.h District .. ... 80,877,250
HI,IIS
Outside Eleventh District . .... 83,697,550
United States ....... . ........ 164,575,800
56,216
SOURCE: Estimated from American Petroleum Institute weekly reporb.
June 1947
6.931
7,223
363
8.947
706
- 22,508
6.884
8,001
7,034
137,086
- 1,008
-
1.328
168.791
21,268
16,084
206,143
181, 770
387,913
Drilling operations, as measured by the number of wells com- •
pleted, have risen sharply during the past three months, which
brought total completions in the Eleventh District during the
first half of the year to 6,692 wells, an increase of about 36
percent over completions during the corresponding period of
1947. In the United States, completions totaled 18,302 wells
or nearly 20 percent more than in the same period of 1947.
The value of construction contracts awarded in the District
during June declined sharply from the postwar peak of $94,865,000 reached in May, In that month the increased volume
reflected the letting of several large contracts, which coincided
with awards for an increased volume of smaller projects. The
June volume of $54,714,0 00, while 41 percent under that of
May, was only moderately below the average for the first
four months of the year and was 24 percent larger than in the
corresponding month of 1947. Total awards of $395,000,000
during the first half of 1948 were 20 percent larger than in the
corresponding period of 1947, While awards for residential
building were up only 1 percent, those for all other classes
of construction showed an increase of 26 percent.
°
VALUE OF CONSTRUCTION CONTRACTS AWARDED
(In thousands or dollars)
June
Eleventh District-totaL . .
Residential. ,. . . . . . . .
All other , ...... , .. .
United States·- total ..
1948
$ 60,70..1
18,550
42,153
June
1947
, 43,967
20,086
23,881
935,188
605,070
355,296
209,458
579,892
395,612
-:17 states east or the Rocky Mount.aills.
SOURCE: F, W, Dodge Co'JlOration.
Residclltiai. . . .
All other. .
)'1ay
1948
, 92,6 17
29,099
63,518
970,789
369.780
601,009
January 1 to June 30
1948
1947
'400,501
'329,58.,
140,120
128,346
260,381
201,230
3,492,645
4.766,795
1,824,569
1.468.902
2,023.;43
2,942,226
The detailed data on construction contract awards in Texas
during the first five months of 1948 show that some marked
changes from the corresponding period of last year have occurred
4
139
MONTHLY BUSINESS REVIEW
in the distribution of awards among the various classifications
of construction. In the classifications comprising the bulk of
awards. the major increases included: office and store buildings.
1947. declined 78 percent, In the residential classifications.
awards for one-family dwellings being built for sale or rent
declined 25 percent,
BUILDING PERMITS
COTIONBEED AND COTIONBEED PRODUCTS
JUDe 1948
_ - - T.... ---_-U.iled Stat..- August 1 to June 30
August I to June 30
Tbis season Lnst season This seuon Last season
568,069
3,980,210
3,005,026
Cottonseed received at mills (tons) . .... 1,131,862
3,983,923
3,015,377
1,151,414
608,930
Cottonseed crushed (tons) . .. . . . . .
34,876
16,393
95,815
108,255
Cottonseed on hand June ao (tODS)
Production of product:a:
~
June 1948
City
No. Valuation
Louisiana:
Shreveport . . ... 432 ,12,012,515
Texas:
Abilene ..... . . .
688,62 1
90
Amarillo .... . ..
221
780,834
Au&tin ...... . ..
321 2,034 ,886
Beaumont. ... . . 368 1,044,360
Ptroeotaae
Percentage change Jan. 1to June 30,1948 chaD@:e
valuation from
valuatlOD
June 1947 May 1948 No.
Valuation from 1ut7
117
2,069 , 21,421,820
411,150
157
- 17
69
98
- 2
72
223
84
91
-42
28
-6
-4
31
-6
55
-38
8
42
42
-19
2
46
82
-35
40
9
-35
88
1M
Total." . . .. . 6,714 530,008,261
19
-7
321
~r ?b.r~~t~:: 1,55.5
EI Paoo ...
113
Fort Worth.
593
Galveston .... .
176
Houston . . ....
731
Lubbock .. .... . 252
137
Port Arthur . ...
San Antonio .... 1,153
Waoo . .... .....
183
Wichita Falls . . .
Il8
1,307,101
7,361,639
1,005,355
3,567,463
400,630
5,170,980
1,345,982
225,687
2,191,735
1,400,253
-----
56D
1,137
2,000
2,084
1.812
8,291
700
3,244
072
4,710
1,440
742
7,699
929
416
296
3,03D,336
29
5,446,510
45
13,158,085
47
4,810,465
102
0,800,270
36
53,188,466
120
5,772,023
74
14,983,551
30
1,726,482
45
52,735,107
60
6,525,573
II
1,149,645 - 2
18,319,601
61
7,202,746
87
2,378,461
108
38,813 5221,748,148
74
257 percent; relig ious buildings. 245 percent; educational buildings. 96 percent; apartment buildings. 140 percent, On the other
hand. awards for manufacturing buildings. which constituted
23 percent of total awards during the first five months of
Crude oil {thousand pounds) ... .
358,338
M2,041
Cake a.nd meal (tone) .. ..... . . .
262,007
Hulh (tons) . .. ... ... . ... . . .. .
381,840
Lintera (running \)alee) ... . . . .. .
Stoeb on hand June 30:
Crude oil (thousand pounds).........
2,698
Cake and meal (tons).. .. .. .. .. . . ...
30,030
H,i1s (Ions) .. , .... .. .. .. .. .. .. .. ..
13,065
unt.e1'8 (running bales) . .. . . . . . . . . . . .
43,854
SOURCE: United Stal.ea Bureau of CeDJUL
184,724
286.143
135.250
207,757
J,242,385
J,847,711
899,096
1,249,464
948,871
1,328,672
709,263
968,435
85S
10,157
94,516
45,331
108,208
7,360
87,958
40,069
90,740
16,619
7,779
13,087
DOMESTIC CONSUMPTION .\.ND STOCKS OF CO'ITON-(Balea)
August 1 to June 30
May
June
JIlD.
Tbis season Last leaSOO
1948
1947
1948
Consumption at:
143,311
187,403
12,435
J 1,600
13,m
Texas mills . ..... . .. .
9,347,03 1
785,HO 8,719,452
729,412
801,.42
United BtaLes mills .. .
U. S. stoc.ka---end or month:
1,684,658 2,006,617
In consuming estabru'ts... 1,741,450
1,233,283 2,232,274
Public stg. &: comprC88C8 . • 1,673,619
140
MONTHLY BUSINESS REVIEW
August 1, 1948
NATIONAL SUMMARY OF BUSINESS CONDITIONS
(Compiled by the Board of Governorl of the Fedua.l Reserve System)
Total output at factories and mines showed little change in
June and the early part of July after allowance for seasonal
influences. Department store sales were at record levels for this
season. Price of meats and steel increased sharply in July, while
cotton and grains declined.
allowance for seasonal changes. Total loadings in the first half
of July were above the same period a year ago, reflecting mainly
a larger volume of coal shipments.
INDUSTRIAL PRODUCTION
Production of crops this year, as indicated by July 1 conditions, will be substantially larger than in 1947 and in record
volume. The most important increase is forecast for corn, output of which is expected to be about 40 percent larger than
last year's drought-damaged crop. Estimated wheat production, although smaller than last year's crop of 1.4 billion bushels,
would still be the second largest crop on record. Cotton acreage
is officially estimated to be up 10 percent from last year. Marketings of livestock have expanded following the end of the
packing strike, but the volume has remained 5 to 10 percent
below year-ago levels.
Industrial production in June continued close to the May
level, and the Board's seasonally adjusted index was 192 percent
of the 1935-39 average as compared with 191 in May and 188
in April, when output was reduced by a strike at bituminous
coal mines.
Output of durable goods increased further in June, reflecting
mainly larger production of automobiles following settlement
of an industrial dispute at the plants of a leading producer.
Activity in the automobile industry reached earlier postwar peak
rates in the first half of July.
Steel production in June continued at the May rate. Output
of open hearth steel was slightly smaller, while electric steel
production increased further by 5 percent to a new record
level, exceeding the wartime peak. Output of nonferrous metals
was reduced somewhat owing largely to a curtailment of
aluminum production during the Columbia River floods.
Production of nondurable goods in June continued at a seasonally adjusted level of 178 percent of the 1935-39 average.
This level has prevailed, with slight variations, since the beginning of the year. Coccon consumption and paperboard production declined somewhat in June. Meat production, however,
increased substantially following the end of a labor dispute which
had curtailed packing operations since the middle of March.
Activity in most other nondurable goods industries was maintained at the May rate or advanced slightly.
Minerals output declined 2 percent from the exceptionally
high May rate, as bituminous coal output was reduced owing to
the beginning of the miners' 10-day holiday on June 28. Crude
petroleum production continued to advance.
CONSTRUCTION
About 93,500 dwelling units were started in June, according
to preliminary estimates of the Bureau of Labor Statistics. This
number was somewhat smaller than the postwar high of 97,000
in May, but still considerably larger than the 77,000 units
started in June 1947. Dollar volume of all new construction
put in place, according to joint estimates of the Departments of
Commerce and Labor, continued to increase in June and reached
a record amount of $1,600,000,000.
DISTRIBUTION
AGRICULTURE
COMMODITY PRICES
The general wholesale price level rose ~urther in July, reflecting sharp increases in prices of meats and steel products. Meat
and livestock prices in mid-July were about 25 percent higher
than a year ago. Prices of most other farm products and foods
continued to show little change or declined in July. Cotton and
grain prices were somewhat below year-ago levels.
Prices of most iron and steel products were raised by 10 percent or more in July. Coal prices were also advanced, while
prices of petroleum products eased and prices of cotton goods
declined somewhat further.
4
BANK CREDIT
Quarterly income tax payments by businesses and individuals
during the last half of June substantially increased Treasury
deposits at Reserve Banks and reduced commercial bank reserves
and deposits. Banks met rhe drain on reserve funds largely
through sales of Government securities to the Reserve Banks
and through reductions in their excess reserves. During the first
three weeks of July, reserves at banks increased somewhat.
The Treasury drew down its balances to retire bills. Federal Reserve Bank holdings of bills were thereby reduced, but the System
made net market purchases of Government securities in approximately equal volume and thereby supplied banks with additional
reserves.
Commercial and industrial loans increased moderately in
banks in leading cities during June and the first half of July.
Consumer and real-estate loans continued to expand. Banks reduced further their holdings of Government securities.
SECURITY MARKETS
Value of department store sales showed about the usual seasonal decline in June and the first half of July. The Board's
adjusted index remained around a record level of 310 percent
of the 1935-39 average, which was about 7 percent higher
than in the corresponding period a year ago.
Common stock prices declined sharply in the third week of
July, following four weeks of relatively little change. A substantial portion of the mid-March to mid-June gain in prices .411
was lost.
..
Rail shipments of grain and forest products were in substantially larger volume in June, while loadings of most other
classes of freight declined somewhat from the May rate after
Prices of Government bonds changed little in the first three
weeks of July, following some decline in June, but prices of
corporate bonds declined further.
@FedFRASER