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MONTHLY BUSINESS REVIEW oft h e Volume 32 FEDERAL RESERVE BANK Dallas, Texas, Decembel' 1, 1947 of Dallas Number 12 INCOME PAYMENTS TO INDIVIDUALS IN THE SOUTHWEST, 1929-1946 O. TANNER, Economist Federal Reserve Bank of Dallas EUGENE The economic health of the Southwest, as of any other region, may be judged by the income generated through the total of its productive efforts and paid out in individual shares to its population. For the amount of personal income received in relation to satisfaction of wants felt is the measure of the extent to which each person who devotes his labor or his property to the production of goods and services has achieved his immediate economic objective. Accordingly, personal income payments are an index of a region's ability to sustain its people and to retain or expand its productive resources and organization. One may expect, therefore, to find the economic development of the Southwest, over a period of years, closely associated with the trend of income payments to individuals in the area during those years. For each year of the period 1929-1946, the United States Department of Commerce has prepared and published estimates of income payments to individuals in each state of the Union. This period began and ended in years of abnormal national prosperity. The estimates of income payments make it possible to analyze the composition and trends of such payments in the five southwestern states which lie wholly or partly in the Eleventh Federal Reserve District. It is these five states-Texas, Louisiana, Oklahoma, New Mexico, and Arizona- which constitute the region referred to above as the Southwest. They are the same, except for the inclusion of Louisiana, as the Southwest Region referred to by the Department of Commerce in reporting income estimates. For convenience in the discussion which follows, they will be referred to also as the states of the Eleventh District, though portions of all of them except Texas lie outside the district's boundaries. These five southwestern states had an estimated population of 11,035,000 in 1929, and of 13,013,000 in 1946 -an increase during the period of about 18 percent. In 1929, their population was 9.1 percent of the population of the continental United States; in 1946 it was 9.2 percent. Total Income Payments Total income payments to individuals in this five-state region fluctuated widely between 1929 and 1946, with the trend generally, but unevenly, upward after 1933. Reflected in these fluctuations are the great economic depression of the early 1930's, the 1934-1940 period of slow recovery interrupted by recession in 1938, the spirited response of the economy to the expanded national defense program of 1940-1941, and the unprecedented upsurge of production and income during the war period and the first postwar year. From $5,015,000,000 in 1929, the figure dropped to considerably less than $3,000,000,000 in 1932 and 1933. Then, by painful stages of both induced and natural recovery, and with one backset in 1938, it climbed to $4,755,000,000 in 1940, or to within five percent of the 1929 level. The next year it reached $5,800,000,000, setting a new record some 15 percent above 1929. The first war year (1942) saw it rise to approximately $8,000,000,000; the next year it topped $10,400,000,000, more than doubling the 1929 total; and then continuing to rise but at a diminishing rate, it exceeded $11,000,000,000 in each of the next three years (1944-1946). This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org) 176 MONTHLY BUSINESS REVIEW Percentagewise, total income payments in the states of the Eleventh District declined 44 percent-the same as in the Nation-during the deep depression years, 1929-1933, rose 71 percent from 1933 to 1940, compared with a rise of 64 percent in the country as a whole, and spiraled upward 146 percent from 1940 to 1946, while the national total was climbing 123 percent. A slowing down in the rate of increase occurred after 1944, concurrently with the slackening of the impetus which the war effort had provided, and total individual income payments in the Southwest increased only one percent during 1945 and three percent during 1946, compared with respective increases of three percent and nine percent in the national totals. Payments in the region, during the last year of the TABLE 1. TOTAL INCOME PAYMENTS TO INDIVIDUALS IN THE SOUTHWEST, 1929-1946 Year Amount (millions of dolla.rs) 1929 1929 1930 1931 1932 1933 1934 1935 1936 1937 1938 1939 1940 1941 1942 1943 1944 1945 1946 5,015 4,153 3,428 2,698 2,786 3,218 3,565 4,150 4,596 4.372 4,584 4,755 5,800 7,928 10,402 11,247 11,356 11,696 -17 - 32 --46 --44 -36 - 29 - 17 - 8 - 13 - 9 - 5 16 58 107 124 126 133 .Les8 than on ~hlC PCfccut..age change rrom 1930 1031 -17 -35 - 21 -33 -19 -23 - 6 - 14 4 - • 21 11 34 5 28 10 34 14 39 40 69 91 131 150 203 171 228 173 231 182 241 1032 3 19 32 54 70 62 70 76 115 194 286 317 321 334 1033 16 28 49 65 57 65 71 108 185 273 304 308 320 1034 11 29 43 36 42 48 80 146 223 250 253 263 1935 16 29 23 29 33 63 122 192 215 219 228 1936 11 5 10 . 15 40 91 151 171 174 182 1937 1038 1030 1940 1941 1942 1943 1944 Southwest total &II per cent of 1945 United Sta.tes tota - 5 - • 3 26 72 126 145 147 154 5 9 33 81 138 157 159 168 4 27 22 73 67 14 127 119 79 145 137 94 96 148 139 155 146 102 31 42 43 47 8 9 12 1 4 3 6.07 5 .66 5.53 5.69 6.02 6.07 6.09 6.10 6.36 6.65 6.49 6.27 6.29 6.81 7.43 7.44 7.32 6.91 of oue percent. SOURCE: United Statts Department of Commerce. 1929-1946 period, exceeded those of the first year by 133 percent, while in the Nation as a whole, the rise was 105 percent. Between the depth of the depression (1933) and 1946, total annual payments in the Southwest rose 320 percent; in the Nation, 266 percent. These greater percentage gains in the Southwest than in the Nation in total payments to individuals during periods of rising income reflect a relatively rapid rate of increase over a low base rather than a regional level of income higher than the national level. Comparatively, the Southwest is an area of lower than national-average income, due, in part at least, to the relative importance of farm wages in its total income, to its limited industrial production, and to the fact that both its agricultural and industrial wage rates are below the national averages. In 1929 its inhabitants, though comprising 9.1 percent of the national population, received only a little more than six percent of the national total of personal income payments. In 1946 they constituted 9.2 percent of the population and received 6.9 percent of the income payments. At the 1944 peak of wartime concentration of industry in certain parts of the area, they comprised 9.4 percent of the population and received 7.4 percent of the total individual income payments. Examination of the column in Table 1 which shows total income payments to individuals in the Southwest as percentages of such payments in the United States will reveal several significant developments. The effects of the depression from 1930 through 1933 were relatively more severe in the predominantly agricultural Southwest than in the country at large, since the ratio of regional to national income payments in each of those years was lower than in 1929. After returning in 1934 to the same relation to national income payments as in 1929, regional payments continued slightly and irregularly above the 1929 ratio until 1942, indicating a slow relative improvement in the income status of the Southwest. The rate of this region's wartime increase (1942-1945) in total income payments to individuals was considerably more rapid than the national average rate. Between 1929 and the wartime peak in 1944, the share of national income payments received by inhabitants of this region increased from $6.07 ou t of each $100 to $7.44-a rise of 22 percent. Even with total income payments at a new peak, however, the first postwar year witnessed a moderate recession in the income position of the Southwest relative to that of the country as a whole, reflecting the end MONTHLY BUSINESS REVIEW 177 of the abnormal influence of war industries on regional income and the sharp reduction in numbers and pay rolls of military personnel in the region. Whether this trend has continued during 1947 is as yet unknown; but in view of the rapid expansion of peacetime industries, both small and large, especially chemical, refining, metallurgical, and TABLE 2. PERCENTAGE CHANGES IN TOTAL INCOME textile, in the towns and cities of the Southwest, OF UNITED STATES, SOUTHWEST, AND SOUTHit seems likely that the region will hold most of WESTERN STATES FOR INDICATED PERIODS the wartime gain it made in income status relaSouth. New tive to that of the Nation at large. United lleriod 1929-1933 1929-1940 1929-1941 1929- 1946 1933-1937 1933-1940 1933- 1941 1937-1938 1941-1942 1942-1943 1943-1944 1944-1945 1941- 1945 1945-1946 States -44 - 8 12 105 56 64 99 - 9 26 west Texas - 44 - 5 16 133 65 71 108 - 5 37 31 8 -42 Oklahoma Louisiana - 50 - 23 -11 71 57 -44 - 2 24 130 63 74 119 • 32 33 Mexico Ari1.Ona -44 18 38 - 51 - 3 17 156 Data in Tables 2 and 3 reveal that, over the full period, 1929-1946, each of the five states of 205 the Eleventh District experienced a great increase 97 93 54 111 98 in total income payments to individuals, the 78 147 139 gains ranging from 71 percent in Oklahoma to 9 -5 -7 - 8 24 38 35 55 205 percent in New Mexico. Texas ranked first 20 34 20 25 34 each year in total payments, as would be expected 8 13 7 12 8 -3 • - 1 3 1 1 7 2 from its primacy in area, population, and natural 68 96 100 102 88 86 107 3 • 9 resources. In 1929, its inhabitants received 53 3 3 10 6 ·Y.es8 than oue-hnlr of ouc percent.. percent of the total income paid to individuals SOUnCE: United Stale! Department or Commerce. in the area; 54 to 56 percent each year from 1930 to 1942; 57 percent during the last three war years; and 58 percent in 1946. Oklahoma ranked second among the five states, and Louisiana third, from 1929 through 1937 except for one year (1934), although their shares of the area income were sometimes less than one percent apart. From 1938 through 1946, however, Louisiana held second rank and Oklahoma dropped to third. Arizona and New Mexico ranked TABLE 3. INCOME PAYMENTS TO INDIVIDUALS IN THE SOUTHWEST, 1929-1946--STATE TOTALS: AMOUNT AND AS PERCENT fourth and fifth, respectively, each OF SOUTHWEST TOTAL year. - 1 23 153 65 71 III (Amounts in millions of dollars) The rise in Texas' ratio of the _ __ _ Totalpayments _ _ _ __ _Per cent of Southwest total- Texas Okla . La. ~. Mex. Ariz. Texas Okla. La. N. Mel:. Mil. Yea, region's total income payments from 862 161 245 53 22 17 3 5 1929 2,668 1,079 53 percent to 58 percent during the 20 18 3 5 844 725 137 208 54 2,239 1930 659 640 116 170 54 19 19 3 5 1,843 1931 period appears to have been due to sev507 499 86 122 55 19 18 3 5 1,484 1932 eral factors. The State's cash farm in537 487 90 120 56 19 18 3 4 1,552 1933 18 18 4 5 583 595 113 149 55 1934 1,778 come increased more rapidly than that 641 131 167 55 18 18 4 5 666 1,960 1935 of the area as a whole, though less 753 748 162 202 55 18 18 4 5 2,285 1936 56 18 17 4 5 841 792 177 232 2,554 1937 rapidly percentagewise than that of 56 17 18 4 5 767 789 165 213 2,438 1938 Arizona and New Mexico. Industrial56 17 18 4 5 796 828 179 227 2,554 1939 56 17 18 4 5 829 847 190 237 2,652 1940 ization, particularly oil refining and 287 56 17 18 4 5 956 1,066 222 1941 3,269 chemical industries along its Gulf 299 445 56 16 18 4 6 1942 4,451 1,322 1,411 15 18 4 6 .\962 1,593 1,874 375 598 57 1943 Coast, expanded substantially before 420 582 57 16 18 4 5 6,436 1,S08 2,001 1944 57 16 18 4 5 the war and with great rapidity during 1945 6,527 1,SOl 1,986 448 594 627 58 16 17 4 5 6.748 1,848 1,982 191 1IH6 the war. Also, during the war, aircraft sounCE: United States Departwent of Commercel factories, other war production plants, and military installations and training bases were located in many parts of Texas, and their operations and pay rolls contributed heavily to the 100 percent increase in total income payments to individuals which occurred in the State between 1941 and 1945. During 1946 the heavy postwar demand for petroleum and its products ikept the Texas oil industry in all its branches operating at near capacity; and rapid reconversion and expansion of the State's prewar mills and factories, together with an upsurge of civilian construction, an expansion of utilities, and the opening up of a considerable number of new trade and service establishments, apparel, metals, ceramics, and other industrial plants, sustained nonagricultural employment and pay rolls at high levels. Except for a less notable rise in cash farm income, similar factors seem to have contributed in varying degrees to the rise of Louisiana from third to second rank in its share of the total income payments made to individuals in the five-state area. 178 MONTHLY BUSINESS REVIEW The smaller gain made by Oklahoma than by the other four states in total individual income payments between 1929 and 1946, and its decline from second to third rank and from 22 percent to 16 percent in its proportion of the total individual income of the Southwest, may be attributed to a number of developments occurring at different times during the period. Severe droughts and dust storms during the Thirties greatly reduced agricultural income and caused migration qf many farm families to other states. The State's production of crude oil began a sharp decline in 1930, which, in spite of occasional yearly upturns, reduced the average annual output after 1937 to little more than half the peak production of 1927. The decline in this basic industry affected the rate of development of oil refining and other related industries and may have contributed to the slow but steady decrease in the State's population from 1931 to 1940. During the war the State experienced relatively less economic stimulation than Texas and Louisiana received from war production industries and expansion of military and naval training bases. Loss of a considerable number of its wage earners to war industries in other states was reflected in a sharp reduction in its population during the war period, which was only partially restored by the return of its ex-servicemen in 1946. Arizona and New Mexico, with total income payments far below those in the other, more populous states of the Southwest, nevertheless made gre'a t gains both dollarwise and percentagewise between 1929 and 1946, These gains were associated with large increases in cash farm income, almost uninterrupted anilUal gains in population, expansion of vacation resort facilities, exploitation of nonferrous mineral resources, and, during the war, heavy concentration of military and scientific research personnel in the Los Alamos section of New Mexico. Per Capita Income Payments The annual estimates of per capita income made by the Department of Commerce for the United States as a whole and for regions and states are derived by division of total individual income payments in the respective areas by national, regional, and state populations, excluding Federal civilian and military personnel stationed outside the continental United States. Thus, per capita income in a state or region may decline while total payments increase, as was true in 1946 when the return of great numbers of servicemen from overseas to their homes reduced per capita payments in the Southwest and in each of the component states except New Mexico, in spite of an increase of more than $300,000,000 over the previous year in the regional total of income payments. TABLE 4. Year 1929 1930 1931 1932 1933 1934 1935 1936 1937 1938 1939 1940 1941 1942 1943 1944 1945 1946 United States 680 596 500 380 368 420 460 531 561 509 539 575 693 870 1,045 1,145 1,177 1,200 PER CAPITA INCOME PAYMENTS IN THE SOUTHWEST AND COMPONENT STATES, 1929·1946 COMPARED WITH PER CAPITA INCOME PAYMENTS IN THE UNITED STATES &uth- Per capita. pa.d'kb~ts iJ.:~il~T8 New west Texas homa siana Mexico Arizona 454 370 302 236 242 277 305 352 387 365 380 391 478 640 800 905 923 899 465 383 312 248 257 292 319 369 409 387 401 413 496 665 859 947 975 954 455 352 275 212 226 246 281 319 358 327 340 356 465 636 691 886 849 415 344 299 230 222 269 286 330 346 341 354 357 433 564 735 815 832 825 784 SOURCE: United States Department or Commerce. 383 322 265 192 196 240 272 330 353 322 341 356 416 568 712 802 850 911 573 475 382 271 263 322 355 425 482 436 461 473 539 751 889 957 1,026 995 . South- weat 67 62 60 62 66 66 66 66 69 72 71 68 69 74 77 79 78 75 of Southwest ptr capit a - Percent °b~~~ed S~:tpcr crfei~--- - -Percent OklR.. ~uiNew To.." homa siano. Mlaieo Arizonll Texas homB Slana Mexico Arizona 68 64 62 65 70 70 69 69 73 76 74 72 72 76 82 83 83 80 67 59 55 56 61 59 61 60 64 64 63 62 67 73 66 77 72 69 61 58 60 61 60 64 62 62 62 67 66 62 62 65 70 71 71 65 56 54 53 51 53 57 59 62 63 63 63 62 60 65 68 70 72 76 84 80 76 71 71 77 77 80 86 86 86 82 78 86 85 84 87 83 102 104 103 105 106 105 105 105 106 106 106 106 104 102 105 105 106 106 100 95 91 90 93 89 92 91 93 90 89 91 87 92 91 98 92 92 91 93 99 97 92 97 94 94 89 93 93 91 91 86 90 90 90 87 84 87 88 81 81 87 89 94 91 88 90 91 87 87 87 89 92 101 126 128 126 115 109 116 116 121 125 119 121 121 118 123 108 106 III 111 Per capita income payments in the Southwest reflected generally the same developments in the area as were mirrored in the fluctuating totals of individual income. The rate of decline, recovery, and gain in the economic health of the region between 1929 and 1946 is indicated by the fact that the decline in per capita payments during the depression years (1929-1933) was 46 percent, the rise from 1933 to 1940, slowed by recession in 1938, was 62 percent, and the upward spiral from 1940 to 1946 was 130 percent. Dollarwise, the drop during the depression was from $454 to $242; MONTHLY BUSINESS REVIEW 179 the rise during national recovery brought the per capita to $391, or $63 short of the 1929 lev~l; and wartime prosperity boosted it to $923 in 1945, from which it declined moderately to $899 In the first postwar year. The percentage gains in per capita income in the Southwest during the period of national recovery and the war years were somewhat greater than for the country at large--62 percent compared with 56 percent between 1933 and 1940, and 93 percent compared with 70 percent between 1941 and 1945. Nevertheless, per capita payments considered dollarwise reveal the same fact regarding this region that was pointed out above in the discussion of total income payments. The Southwest is a low-income area when compared with the Nation generally or with any other geographical region of the country except the Southeastern States. Neither the area as a whole nor any of the states composing it has ever equaled the national average of per capita income payments. In 1929, the regional per capita payment of $454 was only 67 percent of the national, and during the PER CAPITA INCOME PAYMENTS depression years it fell still lower by compariUNITED STATES AND SOUTHWEST ,':;'6 son, dropping to 60 percent of the national per - ~" capita in 1931. In 1941 it stood at 69 percent. /' I 000 During the war years, with the region experi100 0 ./ ,00 encing a percentage increase in total individual income exceeding that of the Nation and prob,.. I UNITED STATES=:--yV 600 6 00 portionately greater than the regional gain in ~ I I population, per capita income payments moved <00 ~ '" I -.,... •00 up in relation to the national per capita. The .' ., ._.1.-._'- ' -:::::::StlUTHWEST peak ratio of 79 percent was reached in 1944, 200 200 although, dollarwise, the regional per capita was 0 0 1929 slightly higher in 1945. By 1946 the regional per 45 1946 " " capita declined to 75 percent of the national, reflecting a partial return of population and industry to prewar regional groupings. Even so, the regional per capita income in relation to the national was eight percentage points higher than in 1929 and six points higher than in 1941. 2 1/-!.- ' //1 -t_J.-1.---:-.) --4'T/ 1 r The nearest approach by any Eleventh District state to the national per capita occurred in 1945, when the per capita payments of $1,026 in Arizona amowlted to 87 percent of the national average payment of $1,177. Between 1929 and 1946 per capita payments in Texas ranged from 62 percent of the national average in 1931 to 83 percent in 1944 and 1945, receding to 80 percent in 1946. In Oklahoma the range was from 55 percent in 1931 to 77 percent in 1944; in Louisiana, from 58 percent in 1930 to 71 percent in 1944 and 1945; in New Mexico, from 51 percent in 1932 to 76 percent in 1946; and in Arizona, from 71 percent in 1932 and 1933 to 87 percent in 1945. In 1946, the five states of this district ranged between 35th and 44th rank among the states of the Union in per capita income. The fact that the lowest ratio of state to national per capita income occurred in each state of the Southwest between 1930 and 1933 and the highest ratio occurred during or in the wake of W orId War II reveals the heavier than average impact of the depression upon the economy of this region and the greater than average stimulus which the war imparted to regional business and industry. Principal Sources of Income Important sources of individual income payments in the Southwest, as in the United States generally, are manufacturing pay rolls, agriculture, trade and service establishments, and the pay rolls and oilier payments of Federal, State, and local governments. The accompanying table, showing percentages of total income payments derived from each of these principal sources in selected years, makes it possible to compare the United States, the Southwest, and the five states of this region as to the relative importance of each major source of income at four significant dates: 1929, climax of predepression prosperity; 1940, last year of peacetime industrial recovery; 1944, peak year of wartime economy; 1946, first full year of reconversion to peacetime economy. It will be observed that manufacturing pay rolls at each date were far below the national average as an income source in the Southwest and in each of its five states, reflecting considerably less 180 MONTHLY BUSINESS REVIEW than average advancement in industrialization and industrial wages. From 1929 to 1940 the region, as a whole, made only a nominal gain in the ratio of manufacturing pay rolls to total income payments. During these years, two of the five states in the region-Texas and Oklahoma-showed small increases in this source of income while the remaining states showed losses in the relative importance of manufacturing pay rolls. The great expansion of pay rolls in airplane factories, chemical plants, TABLE 5. INCOME PAYMBNTS FROM PRINCIPAL SOURCES AS PERCENT OF TOTAL INCOME PAYMENTS 1929, 1940, 1944, 1946 Area. or State - - Manufacturing payrolls 1029 1940 1944 1946 1920 -- Trade and service incomet --Government income payment-r-- Agricultural incomel 1946 1940 1944 Continental United States 19 .7 20 .3 28.2 21. 3 7.8 7.2 Southwest ....... . ..... . 8. 7 8 .8 15 .1 9 .7 17 .4 14. 9 T exas ... . .. . . .......... 8. 3 9. 0 15. 8 10 .0 18 .3 15. 1 OklahoDla . ... ... ....... 6.8 7 .3 13 .1 7. 6 16 .9 18 .1 Louisiana . ...... . ... . . 14 .0 12 .4 18 .8 13.4 16 .2 10 .2 New Mexico . ... ..... . . . 3.0 2.4 2. 9 4.5 22 .2 20 .9 Arizona ..... ... . .... . . . 6 .7 4.6 10.1 4.8 12 .1 13 . 7 8. 9 13.9 13.9 17 .9 9 .8 16 .9 14.0 9 .8 13 .9 13. 9 16.5 10 .3 15.9 16 .9 1929 1940 1\144 N.A.' N.A. N.A. N.A. N.A. N.A. N.A. 25.2 25.3 25.6 24.0 25.8 23 .5 26.0 21.0 20 .4 20. 6 20 .2 20. 2 18 .7 21.1 1\146 1929 26.6 7.3 27 .5 7 .8 27 .9 7.2 26.0 7.5 27.6 8.2 26.4 12 .5 28. 2 12 .0 lIncludes net income of (arm operators (adj usted (or change in inventories of crope and livestock), Carm wages, and net rents to landlords living 00 1940 1944 5 1946 12.4 12 .8 11.1 14 .6 13 .6 16 .1 18 .6 22.6 30 .9 29.4 32 .2 30. 8 44 .2 33 .7 17 .0 21.1 20 .2 23.2 21.4 26 .8 20 . 1 (arma. :Includes wages a ud so.'lurici:t aud oct income of proprictora. ' Consists of pay of State and local and of fo'ederal civilian emplOYee!, net pay of the armed forces, family.allo ....ance payments to depcndcnt.8 of Cil iisted !1li~~ry persoon~l. vol.untn ry allotment." of military p:oy to individuals, mustering..out payments to discharged servicemen, enlisted men's cash terminal leave payments, iuterest payment.a to mdl\'1duals, public 3581stancc and other direct relief, work relief, veterans' pensions and benefi ts, State government bonuses to World War 11 veterall3, a nd benefit payments from socia.l insurance fu ods. "'N.A.-Not available. ~Percen tage figures in this column are estimated.. SOURCE : Office of Business Economics United States Department 'of Commerce fo r 1929 1940 1946' estimated for 1944 from dnt.a of Office of Business Economics and }o'ederal Security Agenoy. ' - , , '- and other war industries in the Southwest, especially in Texas, Oklahoma, and Louisiana, raised factory wages and salaries from less than nine percent of the region's total income payments in 1940 to more than 15 percent in 1944. Even then, manufacturing pay rolls contributed only a little more than half as much to regional income as to national income. The region's postwar (1946) decline in the relative importance of this source of income appears to have been somewhat sharper than the national average decline, because of the discontinuance of war production. In 1946, however, factory pay rolls in the Southwest accounted for a share of total income payments about one-tenth greater than in 1940 compared with a national average increase of about one-twentieth, indicating that this region held some of its wartime gain in manufacturing industries during the first year of reconversion. Income payments from trade and service in the Southwest since 1940 have not varied greatly from the national average in relation to total income. Before the war they constituted almost exactly one-fourth of all individual income in both the region and the Nation. During the war the diversion of manpower to military duty and war industry, the reduction in number of wholesale and retail establishments and in relative volume of trade in consumer goods, and stricter controls over prices of goods and services than over wages caused trade and service income to drop in 1944 to approximately one-fifth of total income payments. During the first postwar year this component of total income more than regained its prewar importance, reaching 26.6 percent in the Nation and 27.5 percent in the Southwest. This is an obvious reflection of a sharp rise in trade and service employment since the war and of the opening of many new wholesale and retail stores and other service establishments. Among the states of the Southwest Arizona, Texas, and Louisiana slightly exceeded the national and regional averages in the ratio of trade and service income to total income payments. Government income payments increased more rapidly in relative importance between 1929 and 1946 than any other principal income source, both in the Southwest and in the Nation. The rise from 7.8 percent to 21.1 percent in the region, however, was considerably greater than the increase from 7.3 percent to 17 percent in the country as a whole. The sharp upward trend in both areas before and following the war reflects the expansion of government employee payrolls, of public assistance and relief payments, of veterans' pensions and benefits, of social insurance funds, and of interest payments on government debt to individuals. The lower than national-average income in the Southwest from private income sources may account for the more rapid rise in relative importance of government payments in the region than in the Nation at large. The spectacular position of government payments in the national and regional income picture in 1944 was obviously the result of stupendous wartime increases in the number and pay of the MONTHLY BUSINESS REVIEW 181 armed forces and Federal civilian employees and in military allowances and allotments to families and other dependents of military personnel. The heavy concentration of military bases and training fields in the Southwest was reflected in a much greater increase in the regional than in the national ratio of government payments to total income of individuals. After VJ-Day government payments declined regionally more than nationally, but having risen so much higher in the region during the war, these payments in 1946 contributed approximately one-fourth more to the regional than to the national income. The continued maintenance of some major military establishments in the Southwest still adds considerably to the importance of government income payments in some of the states of the Eleventh District, especially New Mexico, Texas, and Louisiana. From agriculture the Southwest draws a share of income considerably larger than the national average from that source. It it worthy of note, however, that between 1929 and 1946 agriculture as a source of income became relatively less important in the region and relatively more important in the Nation as a whole. Moderate increases throughout the period in the relative importance of manufacturing pay rolls and of trade and service income in the Southwest and an approximate trebling in the relative importance of government income payments appear to be responsible for this decline in the share of total income payments derived from agriculture in the region. This decline in the importance of agriculture as an income source occurred, in varying degree, in each state of the area except Arizona. In that State, agriculture was stimulated by the impounding of the waters of the Colorado in the Thirties, making possible since then the irrigation of a considerable acreage of arid fertile lands. Income by Type of Payments The estimates of total income payments to individuals may be broken down into four components, as follows, according to the type of payment: (1) wages and salaries, (2) proprietors'income, (3) property income, and (4) other income.> The approximate percentages shown in Table 6 of total income of individuals in the Southwest paid to each of these four accounts reveal INCOME PAYMENTS TO INDIVIDUALS IN THE SOUTHWEST BY TYPE OF PAYMENT the predominant share of toBIL.LIONS OF DOLLARS' I tal payments going to wages and salaries-ranging from a low of 53 percent in 1936 to a high of 65 per cent in 1932 and 1943 and averaging D OTHER INCOME about 60 percent over the 81-- - ~ PROPERTY INCOME entire period from 1929 to ~ PROPRIETORS' INCOME 1946. It is an interesting coincidence that wages and sal6 1 - - - f§lm WAGES AND SALARIES aries accounted for almost exactly the same percent of total income payments in 1946 as in 1929. The tendency of wages and salaries to fall less rapidly than prices and profits in periods of deflation is reflected in the widening gap beSOURC( U. S DEPARTMCNT Of" COMMERCE tween the shares of income going to employees on the one hand and proprietors on the other in 1930-32 and in 1938. A decrease in the number of proprietary establishments also may be indicated by this same development. During the period of industrial recovery, interrupted by the 1938 recession, income payments to proprietors tended to rise, though unevenly, 1 For definitive statements as to what payments are included in each of these four categories, see notes at the bottom of table 6. 182 MONTHLY BUSINESS REVIEW in relation to wage and salary payments. Government payments to farm operators contributed in some measure to this rise. In the war period total proprietors' income declined relative to wages and salaries, possibly as the result of tighter government controls on prices than on wages. Reduced benefit payments to farmers contributed to the same result. It will be observed that the ratio of property income to total income payments rose in 1930 and remained above the 1929 ratio through the next two years, indicating a delayed reaction to the forces of deflation. Similarly, the effects of the recession of 1938 on property income was not clearly revealed until the following year. To account for the sharp decline of property income in relation to total income payments since 1940, one must recognize the influence of lower interest rates on incomes from bonds, loans, and other investments, as well as the restraining effects of rent control on the profits which owners of residential rent property might have reaped in the absence of such control. TABLE 6. INCOME PAYMENTS IN THE SOUTHWEST AND COMPONENT STATES BY TYPE OF PAYMENT 1929-1946' (Total. in millions of dollars; components as percentages of totals) 1929 1930 1931 1932 1933 1934 1935 1936 1937 1938 1939 1940 1941 1942 1943 1944 19'5 1946 Southwest total. .. . . 5,0154,153 3,428 2,698 2,786 3,218 3.565 4.1504,596 4,372 4,584 4,755 5,800 7,928 10,402 11,247 11,356 11,696 Wages and salaries' . 57.7 64.0 64.4 65.0 57.8 56.5 54.7 53.0 54.7 57.0 56.9 58.0 58.8 61.8 Proprietors' incomes 26.2 18.3 15.8 15.6 22.5 21.4 24.4 23.0 24.5 21.4 22.3 22.6 24.9 25.0 Property income' . .. 14.9 lO.1 15.5 15.1 14.4 15.6 14.8 15.6 15.3 15.1 14.2 12.9 10.7 9.0 4.3 4.4 5.3 6.5 6.1 8.4 5.5 6.5 6.6 6.5 5.6 4.2 Other income' ...... 1.2 1.6 65.0 22.4 7.5 5.1 63.0 2Ui 7.5 8.0 60.0 21.2 7.9 10.9 .57.5 24.2 8.6 9.7 Texas total. .... . ... 2,668 2,239 1,843 1,484 1,552 1,778 1,960 2,285 2,554 2,438 2,554 2,652 3,269 4,451 5,962 6,4.36 6,527 6,748 Wages and salaries .. 55.7 62.0 63.5 63.8 56.1 55.5 53 .7 52.3 53.4 56.3 56.6 57.8 58.7 6l.9 Proprietors' income. 27.6 20.1 16.5 17.2 24.3 22.4 25.3 23.5 25.6 22.0 22.9 23.1 26.0 25.2 Property income . . . 15.6 16.7 16.3 15.8 15.5 17.0 16.1 17.2 16.7 16.7 15.4 13.8 10.7 9.1 Other income .... 1.0 1.2 3.6 3.2 4.1 5.1 4.9 7.0 4.3 5.0 5.1 5.2 4.6 3.8 Oklahoma total . . . . . 1,079 844 659 507 537 583 ;666 753 841 767 796 829 64.8 22.9 7.5 4.8 956 1,322 1.593 Wages and salaries .. 57.6 64.9 64.6 65.9 56.1 57.3 52.4 51.3 51.7 51i.0 53.5 52.2 53.0 54.5 Proprietors' income . 26.2 17.0 15.3 13.6 24.4 19.6 26.7 23.1 26.0 23.2 24.5 26.5 29.1 31.2 Property income ... 14.9 17.0 14.2 13.8 13.2 15.3 14.0 14.7 15.0 13.2 12.7 12.4 10.1 9.0 Other income .. ... . 1.3 1.9 5.8 6.7 6.3 7.8 6.9 10.9 7.7 9.3 9.3 8.8 7.7 5.4 60.8 24.8 7.9 6.5 60.4 21.6 7.9 10.1 58.0 24.4. 8.6 9.0 1.808 1,801 1,848 55.1 23.8 8.3 12.8 51.1 27.4 9.1 12.3 63.3 21.7 7.6 7.4 56.5 26.2 7.8 9.5 122 120 149 167 445 598 582 594 627 Wages and salaries. 68.2 68.3 68.2 70.5 Propriet ors' income. 17.1 15.4 12.9 10.7 Property in come .. . . 12.2 13.5 12.9 12.3 Other income .. .... 2.4 2.8 6.0 6.5 64.2 14.2 11.7 10.0 59.7 14.8 12.1 13.4 61.1 14.9 12.0 12.0 59.4 62.5 61.9 61.7 60.8 61.0 64.5 15.3 17.7 15.5 17.2 19.4 20.2 22.9 11.9 11.2 11.3 11.4 11.0 11.1 8.1 13.4 8.6 11.3 0.7 8.9 7.7 4.5 68.6 21.1 6.0 4.3 65.3 20.1 7.0 7.6 62.0 20.5 7.1 10.1 58.2 2,'j.4 8.0 8.5 90 113 131 162 375 420 448 491 58.3 23.4 7.4 10.9 5,'j.2 27.5 7.7 9.6 Arizona t otal. ...... N ew Mexico total .. 245 161 208 137 170 116 86 202 232 177 213 165 227 179 237 100 287 222 299 Wages and salaries. 55.9 60.6 64.7 69.8 62.2 56.7 55.0 54.3 54.8 58.2 55.3 54.2 5.5.4 57.9 Proprietors' in come. 32.9 25.5 19.8 13.9 21.1 21.2 22.1 22.2 26.6 21.8 24.6 26.8 28.4 28.1 Property income .. . 9.3 10.0 9.5 10.5 10.0 9.7 10.0 9.3 10.2 10.3 10.6 9.5 8.1 9.0 Other income ... ... 1.9 3.0 6.0 5.8 6.7 12.3 12.9 14.2 8.4 9.7 9.5 9.5 8.1 5.0 62.7 24.0 7.7 5.6 60.5 23.6 7.4 8.6 847 1,066 1,411 1,874 2,001 Wages and salaries .. 61.3 68.4 65.6 65.6 63.2 58.2 58.5 55.0 59.9 60.2 60.3 64.0 64.3 68. 1 Proprietors' income . 23.0 13.9 14.2 14.2 16.8 21.8 22.3 23.4 20.8 19.5 19.6 17.2 18. 4 18.7 Property income ... 14.6 16.0 16.1 15.8 13.3 13.6 13.3 14.0 14.1 13.8 13.4 12.0 11.5 8.9 Other income ..... . 1.2 1.7 4.1 4.4 6.6 6.4 5.9 7.6 5.2 6.5 6.8 6.7 5.8 4.3 68.7 18.7 7.3 5.3 67.7 16.5 7.3 8.5 Louisiana total. ... . . 862 725 640 499 487 595 641 748 792 789 828 1,986 1,982 62.9 17.5 7.9 11.7 61.9 19.1 8.9 10.1 lIncludes only payments to residentl! of the cootinernal United States; e.'(c1udc." pay of Ferleml civilian employees and armtd forces stationed out8icle the country with the ex('rJlti()~ of that part flowing into tbis country in the form of voluntary al\otmclltB of pay and contributions to famiiy--allo1'.-ance payments by mihLary personnel t.o their dependents. 2,o\[ter deduction of employees' contributions to Social Security, Railroad Retirement. Rnilroad Unemployment Insurance, and Government retirement program!3. Pa.y of tno armed fo rcCII, net o( contributions to family-aUowance paymenta and of aUotmenta to inclividuals, iB aUoc:atcd by States in terms of the State of duty. 3ReprescnUJ the lIet income of unincorporated establishments, including farms, before owners' withdrawals. 'Includes dividends, interest, net rents and royalties. Ilncludes public ft.S!listance and other direct relief; labor income items such 89 work relief, veterans' pensions :md benefits, Government retirement payment.e, workma.n's ooml:nsation, Bnd Bociol insurance benefi ts; musterini-out payments to discharged servicemcll; and fami ly-al1ownnee payments and allotments of pay to dependents of military personnel (aJ oeate<! to St.ate or dependents' residence.) "Other income" rose sharply both in amount and in relation to total income during the depression years, reaching a peak in 1936, because of large disbursements by Federal, State, and local governments for direct relief, work relief, the redemption of bonus bonds held by veterans of World War I, and other forms of public assistance. The growing importance of public assistance and of unemployment MONTHLY BUSINESS REVIEW 183 compensation and other social insurance benefits in maintaining individual income and purchasing power is revealed in the generally upward trend of "other income" from the middle Thirties through 1940. Reduction in unemployment and unemployment compensation during the war years caused a decline in relative importance of "other income" which was not counteracted until 1944, when veterans' benefits and military allowances and allotments to dependents of servicemen reached large proportions. A further rise in these payments during 1945 and some increase in unemployment compensation brought "other income" to a peak of more than one-tenth of all income payments to individuals in the Southw est, as compared with one-twelfth in the country as a whole. Sharp reductions in allowances and allotments to servicemen's dependents as the result of demobilization during 1946 were largely offset by increased benefit payments to disabled and unemployed veterans and to veterans availing themselves of the educational provisions of the Servicemen's Readjustment Act. Continuation of these benefits to veterans and the growing volume of civilian social insurance benefits and of old-age assistance payments may be counted upon to sustain "other income" as an important element in total income of individuals and in the disposable income and purchasing power of consumers. Compared with the United States as a whole in regard to distribution of income among the four types of payment, the Southwest fell below the Nation every year except 1931 in percent of total income going to wages and salaries, due to lower than national-average wage TABLE 7. PERCENTAGE DISTRIBUTION OF TOTAL INCOME PAYand salary scales. Income payments to MENTS TO INDIVIDUALS BY TYPE OF PAYMENT- SOUTHWEST property were consistently lower reCOMPARED WITH THE CONTINENTAL UNITED STATES gionally than nationally, reflecting smaller investments in rental properties 1929 and corporate securities by inhabitants 57.5 63 .7 26.2 16 .7 14.9 1.2 18.5 1.3 1930 64.9 13.7 16.1 64.0 l S.3 19 .8 1.6 1.5 of the Southwest than by those in cer1931 15.5 64 .4 20 .2 64.4 15 .S 11 .7 4 .3 3.7 1932 65 .0 65.2 15.6 10 . 2 15.1 20 .7 4.4 3.8 tain other regions of the United States. 1933 57 .8 22.5 14 .3 14. 4 lS.9 5.3 61.7 5.1 By contrast, income payments to pro1934 21.4 14 .2 15. 6 18 .2 61.4 56 .5 6 .5 6.2 1935 54.7 60.6 24.4 16.2 14 .S 17.1 6.1 6. 1 prietors of unincorporated businesses, 1936 23 .0 16.0 15 .6 17.5 8.4 53 .0 58.5 8 .0 1937 15.3 16 .8 54. 7 61.5 24 .5 16 .5 5.5 5 .2 including farms, regularly accounted 15. 9 1938 21.4 15.3 57.0 61. 5 15.1 6 .5 7.3 for a substantially greater part of total 1939 15.5 56 .9 62.1 22 .3 14.2 15 .6 6 .6 6.7 1940 22 .6 14 .9 58 .0 63 .2 15 .6 12. 9 65 6 .2 income in the Southwest than in the 13.3 1941 24.9 17.1 58 .8 65 .0 10.7 5.6 4 .6 Nation at large. For example, in 1932 4 .2 1942 11.1 61.8 66.9 25 .0 18 .4 9.0 3 .6 5 .1 1943 22.4 17 . 3 9.7 65 .0 68 .S 7.5 4 .2 the respective percentages in the region 1944 21.5 9.6 67.2 17 . 1 7.5 8 .0 6.1 63.0 1945 21.2 10 .0 17. 8 60 .0 63 .9 7. 9 10 .9 8 .3 and in the Nation were 15.6 and 10.2, 1946 62.1 24.2 20.2 10.2 9 .7 8.6 57 .5 7 .5 and in 1946, 24.2 and 20.2. This trend, running throughout the entire period, suggests the presence of a greater than average number of proprietorships and a smaller than average development of corporate enterprise among the business establishments of the Southwest. The rise in relative importance of proprietors' income throughout the Nation in 1946 apparently reflects the rapid increase in small independent manufacturing, trade, and service enterprises established by veterans returning to civilian life. The greater divergence between the region and the Nation during the war years and 1946 than previously as to the importance of "other income" probably reveals the effects of a greater than average concentration of the recipients of military pay, allowances, and allotments in the Southwest during the war, as well as a sharper percentage rise in the region's "other income" as compared with its smaller than average income from other sources. Disposable Income: Nominal and Real Comparisons made in the foregoing sections of this article between the Southwest and the Nation in terms of various aspects of income payments to individuals have revealed some characteristics and t rends of the economic development of the Southwest from 1929 to 1946. To measure the progress, if any , of the region in increasing the rewards of its inhabitants for their productive labors, however, it is necessary to determine how much the disposable income increased during the period and whether such income constituted an enlargement of the "real" income, or power of the inhabitants of the area 184 MONTHLY BUSINESS REVIEW to satisfy their economic wants. In other words, was there a gain in the amount remaining to individuals for spending and saving after deduction of Federal and State income taxes, and did such amount represent a gain in "real" income when adjusted for changes in the cash purchasing value of the dollar. Approximate figures for total and per capita disposable income of individuals in the Southwest in certain years are shown in Table 8. It will be observed that total disposable dollar income in 1940, reflecting the lingering effects of the depression of the early 30's and the recession of 1938, was less than in 1929. In 1944 and 1946, however, after deduction of greatly increased income taxes, total disposable income was more than twice as great as in either of the earlier years. Disposable per capita income followed the same general trend, but reflected in its smaller ratios to the 1929 base the effects of increasing population. TABL E 8. DISPOSABLE INCOME OF INDIVIDUALS IN T HE SOUTHWEST FOR SELECTED YEARS _____ Total disposable income - P er capita dispos.'lble incomeMillions of Percen t. change Percent chnnge 1929 1940 1944 194.6 dollarn from 1929 Dolla rs 4,984 4,712 10,331 10,683 0 -6 107 114 452 387 832 821 from 1929 0 - 14 84 82 SOURCE: Computation, Luscd on dab r,om Unit ed States Dcpmtmcnt of Comm"". om" of Bu,in'" l!:conorui",. Disposable income may be thought of as either nominal or real. Changes in the nominal disposable income of individuals in the Southwest between 1929 and 1946 were noted in the preceding paragraph. The Consumers' Price Index, computed by the United States Bureau of Labor Statistics on the basis of 1935-39 as 100, provides a means of analyzing changes in real disposable income, since the nominal disposable income for each of the years shown in Table 8 can be measured in terms of a common denominator-the purchasing power of the consumer dolTABLE 9. REAL INCOME OF INDIVIDUALS IN lar in 1935-1939. Measured by that standard, the real income of individuals in the Southwest changed from 1929 THE SOUTHWEST FOR SELECTED YEARS to 1946 as shown in Table 9. (Common denominator = consumer purchasing power of 1935-39 dollar) Comparisons between Tables 8 and 9 will reveal that, whereas nominal income in 1940 was smaller than in 1929, Year dollars £rom 1929 dol!a.rs from 1920 real income was 16 percent greater in total and five percent 1929 4,069 0 369 0 1940 4.703 16 386 5 greater on a per capita basis. Both tables show a definite 1944 80 8,232 102 663 gain in the income of individuals between 1929 and 1946, 1946 7,669 88 589 60 but when nominal is converted into real income, the gain SOURCE: Computations based on data from th e United 5t,a Les Department of Commerce and the Bureau of Labor Statistics. of 114 percent in total income is reduced to 88 percent, and the gain of 82 percent in per capita. falls to 60 percent. The gains shown above in real income of individuals were computed from the price index of "all items" of consumer incomes, and the unit of value might be termed the "general consumer dollar" of 1935-39. When computations are made on the basis of a comparison of the "food dollar" in 1935-39 and in 1946, real income in 1946 on a per capita basis drops to $ 514. Similarly, in terms of power to purchase clothing, real income per capita in 1946 was $512. --Total real income-.- - :Per capita. real inr.omeMillions of Percent change 1935-39 Percen t c.hange To resolve doubts as to the occurrence of the notable gains shown above in both the nominal and the real disposable income of the Southwest between 1929 and 1946, two facts, one statistical and the other economic, may well be borne in mind. First, the figures presented are aggregates and per capita averages, which may be widely at variance with the experience and current status of particular individuals or of wage and salary earners in certain occupations or establishments. Second, the rise in standards of living, that is, in conceptions as to the kinds, quality, and quantity of goods and services essential to satisfactory living, which has occurred during the past two decades has so expanded and multiplied the economic wants of the people that it required considerably greater real incomes in 1946 than in 1929 to achieve even the same relative degree of satisfaction. This fact goes far toward explaining why the average person in the Southwest with greater income had as hard a time "making ends meet" last year as he or his prototype had in 1929. Throughout 1947 incomes have been rising, and currently they are running at a rate which suggests an increase for the year in total income payments to individuals in the Nation as a whole of approximately 10 percent over 1946. Prices of consumer goods also have been going up at a rate which gives rise to the question (which cannot yet be answered) as to whether the real income of individuals in the Nation and in the Southwest will equal that of 1946 and will compare as favorably as the 1946 income compared with that of 1929. 185 MONTHLY BUSINESS REVIEW Review of Business, Industrial, Agricultural, and Financial Conditions DISTRICT SUMMARY General rains during the second half of November brought belated encouragement to farmers and ranchmen in important sections of the district where drought had retarded the planting of winter wheat and had caused deterioration of pastures and ranges, with consequent decline in the condition of cattle and sheep. Harvest of field crops, including a record production of rice and a larger than average Texas cotton crop, was nearing completion under favorable weather conditions before the coming of the rains. Record crops of grapefruit and oranges from the Lower Valley and fall and winter vegetables from commercial garden areas, which made their appearance in trade channels in the latter part of October, moved to market in increasing volume during November. Dollar volume of sales at district furniture and department stores during October moved at levels little changed from tbose of a year ago and of the preceding month. The sharp gain which occured during October in total bank debits in leading cities of the district, as well as the more rapid turnover of deposits, seems to indicate rising levels of general business and industrial activity and the heavy marketing of agricultural commodities at high prices. Pressure of rising demand for petroleum and its products, which accounted for a new peak in daily average production of crude oil in tbe district as well as in the United States during October, is stimulating activity in exploratory and developmental drilling and in extension of pipe lines to transport oil from any areas which are now producing below maximum efficient capacity. The value of construction contract awards in t he dist ric t during October reached the highest total since May 1946, and the volume of construction being started or already under way indicated that the decline in building activity during the remainder of the fall and winter would be less than seasonal. BUSINESS The dollar volume of department store sales in the district during O ccaber showed a moderate gain of three percent over the same month a year ago and of six percent over September. A sharp rev ersal during the last two weeks of the downward trend obs=rva ble in weekly sales during the first half of the m onth accounted for the relatively favorable month-long perform ance. TI,e gain in cumulated sales during tbe first ten months of the year rose to five percent, or one point higber than for the fi rst nine mon ths. The ratio of cash sales to total sales during October was 36 percent, compared with 37 percent the prev ious month. Net sales of reporting retail furniture stores in the district showed a gain of eight percent in October over the same month in 1946, but a slight decrease from the preceding month. The contras t bet ween these relatively small changes in October and gains in Sep lember of 18 percent over a year ago and of 17 percent o\·er the previous month probably reflects the slackening of the impetus giv en to furniture sales in September by the cashing of large numbers of Armed Forces Leave Bonds. The volume of cash sales in October declined II percent from a year ago, but increased slightly over the previous month, while instalment sales showed an exact reverse of those trends in relation to t he comparable periods. Credit sales constituted 74 percent of total sales, as compared with 73 percent in the preceding month and 72 percent a year ago. Although collections at furniture stores during October showed a gain over the same month of last year, their rise was less marked than that of accounts receiva!;le. Collections on instalment accounts at department stores during October amounted to 29 percent of instalment receivab ,es. On charge accounts collections constituted 56 percent of outstandings, indicating an average collection period of 54 days. WHOLESALE AND RET,UL TRADE STATISTICS Retail trade: Department stores: Total II tb ViA .. ... Number of reporting finna 48 4 7 4 7 5 3 l8 perc e,"n~ta,!ge~c~h~.n~..~in-==sit;k*== .:===4~ Net aales-Stocks t October lQ47 from October Sept. 1946 1947 3 6 1 7 - 1 1 7 8 7 13 - 2 5 6 1 4 9 Jan. 1 to Oct. 30, H147 from 1946 5 4 - I 6 6 3 7 13 October 1947 from October Sept. 1946 ID47 8 12 9 0 - 2 9 21 7 23 25 - 3 l4 Dallas .•.• • •. . •.•. Chriati .... . Fort Worth . .. .... . Houston ..... _. . .. . San Antonio . ..... . Shreveport. I.e.••• • • 8 Other cities ....... . Retail furniture: - I 10 Total 11th Din... . . 46 8 -4 Dallas ... . ... . . .. . 4 10 -8 Houston . ..••. . •. . • - 4 6 D 5 Port. Arthur ..•• . •. 4 11 -36 j San Antonio ...... . 10 - 6 Wholeole trade:Drugs (inel. liquors) I) 17 29 t - 13 Grocenf>s . ...... , .. 23 18 8 16 38 6 Hardware.... . .... 10 8 9 18 41 - t Tobacco & products. 9 - 2 - 1 3 - 2 ·Compiled by United States Bureau of Census (whoh.'\le trode figures prelimlnary,) tSt.ocks at end of month. tlndicatM changa of less tha.n one-ha.lf of one per cent. CorpUl is INDEXES OF VEPARTME)!T STORE BALES ANV STOCKS Daily ,,·erage l3!es- (1935-1IJ39- 100) Adjusted _ - - - Unadju!lloo · August October October Sept. AugW:lt October October Sept. 11)46 1947 1946 1947 1947 1947 1947 19.n 351 r 376 327 :160 368 DistricL. . . ' 395 387 386 r 349 362 :147 351 Dallas . 382 3S9 308 384 355, 390, 361 376 419 331 :181 385 Houston . . . . 8'00b-( 1931>-1939 - 1(1O) AJjusled- -- UnadjustedSept . August October Ortober Sept. August Oetober October 1947 1947 1946 l!}4i 1947 1947 1946 1911 :lOG 285 282 2H 345 319 318 30. Dist rict. . . r-Revised. ·Unadjusted for IICl\SOnal variation, A continuation of cautious inventory policies in both department ond furniture stores was reflected in increases of eight percent and 10 percent, respectively, in the value of merchandise stocks as compared with October I ·H6, and of 12 percent and three percent, respectively, in comparison with September of this year. Orders outstanding at department stores, down 19 percent from a year ago and three percent from September, indicated the same cautious attit ude. An increase in total bank debits at banks in 24 leading cities of the district during October, amounting to 23 percent over the same month in 1946 and 13 pe,·cent over September of this year, reflects in part the curren 1 high level of wholesale and retail trade activity throughout the district. Higher prices, especially for new automobiles and Sl)me other durable goods and for many items of food and c!othillg, doubtless account for a considerable increase in the turnover rate of consumer deposit currency. However, the magnitude of the increase in recent months, together with a continuing rise in all forms of consumer credit, suggests that the total unit volume of goods flowing rhrough retail channels to consumers is probably rising. AGRICULTURE Weather conditions in the district prior to general rains at mid-November were mostly fa vorable for the harvesting of crops, but unfavorable for the seedmg of small grains, the development of late feed crops, and "he improvement of pas- 186 MONTHLY BUSINESS REVIEW tures and ranges. November 1 estimates showed cotton production in Texas to be appreciably larger than had been expected a month earlier and the largest in a decade. Estimates of production of corn, grain sorghums, peanuts, and pecans were considerably below those of last year, but record crops of rice, grapefruit, and oranges were forecast. The outlook at midNovember for production of winter vegetables was generally good, except where affect ed adversely by lack of surface moisture and by extreme temperatures. The condition of cattle and sheep continued to decline throughout October and early November as the result of very short pasture and range feeds. The November 1 Cotton Report of the United States Department of Agriculture forecas t a 1947 crop for the United States of 11 ,505,000 bales. This forecast, which is fractionally below the October 1 estimate, compares wi th a 1946 crop of 8,640,000 bales and a 10-year (1936-45) average of 12,3 90,000 bales. The indicated yield per acre for 1947 is 261.2 pounds of lint, or about II percent above the yield of last year and approximately four percent above the 10-year average. The staple length of upland cotton ginned prior to November 1 averaged shorter than during the same period last year, due largely to the dry weather that prevail ed during the growing season in some sections of the Cotton Belt and to increased production in areas which produce a relatively high proportion of the shorter lengths. The grade, however, was higher as the result of the generally favorable harvest weather that prevailed in most sections. Ginnings through October this year were 8,361,685 bales, or 46 percent larger than for the same period last year, and represented about 73 percent of the indicated production as of November I, compared with the ginning of 66 percent of the crop by the same date last year. TEXAS-COTTON PRODUCTION BY CROP REPORTING DISTRICTS (ThOU!8Jlds of 500·pound porns! weight balM) ~ov . 1, 1947 I-N. North High Plains ... " ...•.•.... 1-9. South Hi'i:h Plains ........... . . . . 2. PertUill1l Plains . . . , ..•.•.•.. 3. North CentraL ... . ...... . 4. 5. 6. 7. 8. g. 10. Northern Texas Prairies .. . East Tetsa . ...... . ..... . Traus,Pecos . .... . ... . . . . Edwllrds Plateau .. . Southem Texas Prame! Coostal"Pra iric!I ....... . . •.• South TCXfL3 ..•...... . . .• , . forec ast. 70 825 450 IS 830 105 135 30 320 125 285 1946 35 198 2iO 14 482 96 99 15 185 46 229 lO·ye..'l.r average 1936-H)45 55 462 5.19 51 816 383 74 52 327 133 129 State total........ . ........ 3,250 1,669 3,021 ROURCE: United States Dcpartmrnt of Agriculture, Bureall of A;(riculturuJ Er.onomil'l. The Texas cotton crop was estimated on November 1 at 3,250,000 bales, or 100,000 bales above the estimate of a month earlier. This estimate, which indicates the largest crop since 1937, is 95 percent above the 1946 production and eight percent above the 10-year average. The forecast yield of 189 pounds of lint per acre is 41 percent above the 1946 yield and 13 percent above average. Texas cotton ginned prior to November 1 was considerably higher in grade and shorter in staple length as compared with the same period last season. The grade index through October 31 was 100.2, compared with 96.6 for the same period last year. The average staplc length was a littl e more than 15 / 16 of an inch, or slightly shorter than for the same period last year. Upland cotton ginned in Texas prior to November 1 amounted to 2,320,379 bales, representing 71 percent of the indicated crop, compared with 1,247,596 balcs, or 75 percent of the crop, ginned during the same period last year. Total corn production in Texas this year was estimated on November 1 at 48,672,000 bushels, or about onc and one-half million bushels below the October 1 estimate. This low estimate, which is about 12 perccnt less than laSt year's crop and 32 percent below the 10-year (1936-45) average, is attributed to both lower yields and fewer acrcs this year than last. Virtually all the crop was harvested by November 1. Thc production of grain sorghums was estimated on November 1 at 57,849,000 bushels, somewhat above the 10-year average but 22 percent below last year's crop. Harvest was well under wayan the High Plains and nearing completion in many counties at thc first of November. Dry wcather favored harvesting activities but cut down production on late-planted fields. Thc November 1 estimte of rice production was 23,373,000 bushels, compared with an October 1 estimate of 22,491,000 bushels. CROP PRODUCTION-{Tbousands of units) _ _ _ _ Tex..'l8 States in Elevcath Di3trict·~ Average Estimated A'lerall:e Estimated Ullits 1936-45 1946 ~ov.1,l947 1935-45 1948 Nov . l,1947 Cotton ......... Bales 3,021 1,669 3,250 4,529 2,478 4,420 Winter wheat . . . Bushels 41 ,287 62,916 129,420 102,467t 154,3!J3t 244.492t Com .... ... . . ... Bushels 71.963 55,012 48.672 124,624 08,502 86,838 Oats........... Bushels 33,236 36,366 31,248 63.484 65,022 65.374 Barl,y .... ...... Bush,), 3.913 2,610 2.672 11.6171 8.0051 9.0041 All hay. . Tons 1,348 1,454 1,:310 4,102 4,649 4,690 Potatoes, Irish ... Bushels 4,009 5,883 4,488 9.576 ] !,SlO 9.329 Potatoes, sweet,. Bushels 4,828 6•.570 5,270 13,753t 17,890t 12,965t Rice . . Bushcls 14,877 17,716 23.373 :l6.120§ 40,392§ 44,408§ Grain sorghums,. Bushels 50,164 73,742 57,849 62,414 84,072 66,964 ·Flj.!;urca lire combined Lot.als ror the five state" lying wholly or partly in th.e Eleventh Federal Reserve District: Arizona, J.ouisir'lna, New Mf'Xlco, Oklahoma, and Texas. tArizouu, New Mexico , Oklahoma, a.nd Texas. tLouisiauu, Oklahoma, aud TeXt'S. §LouisiulUl a.nd Texas. SOURCE: United States Department of Agriculture. This year's rice crop, the largest ever produced in Texas and 32 percent above the previous high reached in 1946, is the result of both higher yields and increased acreage. Harvest was nearly completed on November 1. The estimate of Texas peanut production, unchanged from the October 1 forecast of 319,600,000 pounds, is about 19 percent below last year's crop. Harvest was either complete or under way in all areas at the first of November. This year's pecan crop, estimated at 21,000,000 pounds, is seven percent below that of last year and 18 percent below average, due to extensive damage from case-bearer and drought in all excep t extreme northern counties and a few scattered areas elsewhere. Pecan harvest was under way in all areas during November. The Texas grapefruit crop was estimated at 24,500,000 boxes on November I, or 500,000 boxes less than on October 1. The crop has not made the usual progress, and small sizes predominate. Despite reduction in the estilTlate, however, it appears that this year's crop will be more than 50 percent above the 10-year average and will exceed the previous record of 23,300,000 boxes established last yea r. The orange crop, estimated at 5,600,000 boxes, is an all-time high in T xas, 600,000 boxes above last year's crop and n early twice the 10-year average. In the Texas commercial vegetable areas conditions during the latter part of Octobcr were favorable for the progress of fall-crop plantings. Rainfall was limited, and restricted to a small area, but practically all fall-crop plantings are on irrigated tracts. High temperatures during October were favorable for grow th and maturity of beans, green corn, cucumbers, eggplant, peppers, tomatoes, and squash. While conditions favored the development of most tender crops, the progress of hardytype winter crops was retarded in nonirrigated areas because of inadequate moisture. Some of the early plantings in these areas were lost as a result of lack of surface moisture and continued hot weather, but in the irrigated areas of the Lower Valley field work and ha rdy-type vcgetables made good progress, considering the warm weathel". This rathet· pl"omising general outlook for vegetables at the beginning of November was dimmed, however, by a cold spell the morning of November 8 which covered the Eagle Pass and thc La Pryor-Batesville sections of thc \'(finter Garden arca, causing severe damage to all tender 187 MONTHLY BUSINESS REVIEW crops, including thc important peppcr and tomato corps, both of which were being actively harvested. The Laredo and Lower Valley districts were out of the area of low temperatures and frosts, and in those sections harvesting of all tender vegetables continued. Practi cally all vegetable areas received some moisture around the middle of November, with the most effective rains falling in the nonirrigated Coastal Bend, where all planting operations had been delayed because of lack of moisture. Prices received by farmers for most farm and ranch products at October 15 had made sharp, but varied, changes compared with a month earlier. Prices received for wheat, rice, cottonseed, hogs, turkeys, eggs, and hay showed significant gains, while prices of cotton, beef cattle, veal calves, sbeep and lambs, chickens, and butterfa t declined moderately. Range conditions continued to deteriorate in October and ea rly November as normal autumn rains failed to materialize to break the drought which had prevailed since early summer over much of the grazing area of the district. Late October rains in westcentral, northern, and northeastern counties of Texas replenished water supplies in some localities and improved prospects for small grains, winter weeds, and grass, but most of the State continued dry. Reports in early November indicated that much intended wheat acreage had not been seeded because of dry soil conditions, and at that time prospects for wheat pasture in the Plains continued unfavorable. Range feed conditions in Texas on November I, seven percent bclow a month earlier and 15 percent below average for the time of the year, were the lowest reported for this season since the very dry year of 1934. Rainsfell, however, on the 14th of November throughout most of the range and grazing areas of the State, and reports from various localities indicate anticipated improvement in the range feed situation. (Thousands of dollars) 1947-----,-'Total rece i p t s - - - _Receiptfl from- Sept. Sept. Jan. I to Sept. 30 Cropa Liv68tock· lQ47 1946 1947 1946 Arlzona, •.... , ... . .. . .• . I 5.333 I 8.147 I 13.4 80 I 6.137 $ 120.802 $ 105.390 Louisiana ..• , .•. . . . . . . . . . 38.433 17.557 55.990 29.525 176.018 I 26.4S9 New Mexico . ... . ,., ...•. 6.882 7.M4 14.426 11.203 92.354 60.879 Oklahoma ...•........... 17,909 63.066 70.965 35.624 482 .058 310.148 Teras ........... . ,., .. . . 167,711 76.823 244.534 128.867 1.303.1 53 910.696 Cattle and sheep in Texas, having experienced considerable loss in weight and condition during the late summer and fall months because of the dry ranges, are going into the winter much thinner than usual even though supplemental feeding has been heavy. Most ranchers, in order to take advantage of favorable livestock prices, have culled herds closely and marketed the lower-quality animals. The condition of cattle and calves in Texas on November 1 was eight percent below the reported condition on the same date last year and six percont bclow the I O-year seasonal average. Sheep are going into winter in unusually poor flesh except in some western and central counties of the Edwards Plateau that received showers in October. The general condition of sheep and lambs on November 1 was nine percent below that of a year ago and eight percent below average for the season of year. LIVESTOCK RECEIPTS--(Numm.r) _--For~ Worth , - : - - - - - S a n Catlle ... Calves .. Ho~ ... . Sheep ... . OctoUcr J!l47 100,169 68,257 40.347 135.918 October 1946 102,82696.227 41.097 116.282 Sept. 1947 91.7 13 51 ,080 36.11!3 115,947 Odober 1947 62.201 .. O,M!) 6.1 15 51.Sol1 Antonio October 1946 3R.l00 35,009 8.228 53.157 --_ Sept. 1947 46.914 33,558 6.677 85.148 COMPARATIVE TOP LIVESTOCK I'RICES (Dollars per hundred w~ght) - - - F o r t Worth San Antonio - - October October Sept . October October s.pt. 1947 1946 J!l.I7 1M7 1946 1M7 Beer IIteers .... . . ........ 127.00 $23.00 128.00 524.50 $22.00 124.00 22.60 17 .50 22.50 Stocker st.tel'8 .. Heifers aod yenrU'u'is' 27.00 27.50 21.00 24.25 16 .50 23:00 Butcher COWl ••. 17 .60 16 .50 18.00 17.00 16 .00 IUO 22.50 24.00 20.00 20.50 19.00 23.25 Calves .. Hogs .. . .. : ............. '9.75 26.25 29.00 28.50 25.00 27.75 Lambs . . .......•.•.....• 22.50 21.00 23.50 20.00 18 .00 22.00 Total receipts of livestock at Fort Wortb and San ~ntonio were six percent higher in October than in September and slightl y above October last year. Receipts of all major types of li vestock were higher at Fort Worth in October than in September, but on the San Antonio market hog receipts were slightly and sheep receipts substantially lower. The increase in total marketings of li vestock in Texas was in keeping with the usu3.1 scasonJI lUOVClllcnt. CASH ~·ARM I:;COME ..........--...~ptember Total. ........ 1236.268 1163.127 1399.395 1210.356 $2 .174.386 11.519.60S ·Iocludes receipts from the sale or livestock nnd livestock products. SOURCE: United Statea Deportment. or A\triculture. Reports from spot commodity markets indicate that from October 15 to tnid-November prices of cotton, calves, and lambs made slight gains, while grains and slaughter cattle remained virtually lmchanged in price and hogs decl ined considerably. FINANCE During the five weeks ended November 12, changes in t he condition of weekly reporting member banks in the district were accented by a marked elCpansion in loans and deposits and a moderate increase in investments. Total loans rose $79,066,000, and on November 12 stood at a record high of $973,833,000. This increase resulted mainly from an expansion of $70,402,000 in commercial, industrial, and agricultural loans which reflected the continuing high level of prices and business activiry and a strong demand for bank credit to finance the marketing and processing of agricultural commodities, the production of which has been unusually large in the district this year. This type of loan has now moved upward £or five consecutive months at a progressively accelerated rate, and the adva nce during the current reporting period was more than twice that for the corresponding period of last year. "All other" loans, which include loans for purposes of consumption, showed a significant rise of $8,116,000. The bulk of this increase occurred, however, during the last two weeks of October before the termination of instalment credit controls on November 1. Real estate loans declined for the second consecutive month . Loans to brokers and dealers, which had risen during the preceding three months, declined slightly during the fi ve weeks ended November 12, while otber loans for security trading rose for the fourth consecutive month. An increase of $123,845,000 in aggregate deposits of the reporting banks during the live weeks brought the total on November 12 to $2,978,134,000. Demand deposits adjusted and interbank deposits showed significant inct·eases of $64,876,000 and $74,684,000, respectively. The increase in the latter type of deposit reflected a heavy gain in deposits at country banks, resulting from the large marketing of crops at high prices, and the shifting of a portion of their surplus funds to correspondent banks. The large gains in these deposits were counterbalanced to some extent by a small decrease of $2 ,778,000 in time deposits and to a greater extent by a decline of $12,937,000 in Government deposits, which was largely due to the calls made on war loan accounts by the Treasury Department in connection with the cash redemption of Treasury bills and certificates dUl·ing the first week of November. 188 MONTHLY BUSINESS REVIEW Total investments of the reporting banks, which had shown a downward trend during the period between August 13 and October 8, reflected a gain of $ I 9,486,000 during the current period and totaled $1,300,534,000 on November 12. This change directly reflected increases in Treasury bonds and in all other stocks, bonds, and securities of $16,275,000 and $3,925,000, respectively. Treasury notes and certificates declined more than $18,000,000, but the decline was largely offset by an increase of $17,786,000 in holdings of Treasury bills. This rise, by far the largest of the year to date in this item, indicates that the attractiveness of the current yields on Treasury bills is inducing some banks to make increased use of these securities for secondary reserve purposes. CONDlTION STAT[STICS OF WEEKLY REPORTING MEMB}o;l\ BANKS IN LEADING CITIE8-ElcYeotb Federal Reserve District (ThoU83oda of dollan) Nov. 12, 194; Total loans and investment.!. 12,274.367 Total loans . . . . ....... , ....................... . 973.833 Commercial, industrial, and agricultural loon•••.• to brokers and dealers in securities .. . . . . •. Otber loans ror purchasing or carrying secutitiee .. LoaOI Real estate loalls .... . .. . .................... . Loans to banks ...•.. , . , , , ..... . •. AU other loaos ...........•....... investments . ..... . ..... . ... . To~1 U. S. Treasury bills ...... . ........... .. . U. S. Trcasury certificates or indebtedness U. S. Treasury notes ... . . . ........ . .... . U. S. Government bonds (inel. gtd. ob!.) .. Other securitiel . . ...... . . . ............ . Re9Crve8 witb Federal Reserve Bank Balaneea witb domestic banka. .... . . . . ... . ..... . . Demand deposits-adjusted· .. ... . . ft1E1it~~~G~~'emme~t d~p~ts·.·. · .. .... ...... . Interbank deposits .............. . . . . . . . ..... , Borrowioga from }I'ederal Reserve Dank . . . ' . , . . 674,046 7.355 72,600 74,786 161 144,885 1.300.534 36.553 11ll,235 llO.266 850,360 112.120 499.820 325.135 1,850.963 375.406 28.055 723.710 1,500 Nov. 13, 1946 12,203,743 823,294 524,950 11,776 102,324 57,486 1,497 125.261 1,880,449 56.318 290.851 182.738 770,763 79,779 453.753 254.660 1,708.095 353.029 109.239 620,994 None October 8, 1947 12,175,815 894.767 603.644 7,613 71,072 75,542 127 ]36,769 1,281.048 18,767 191,914 128,087 834.085 108,19.5 487.099 313.646 1,786.087 378.184 40.992 649,026 None ·Includes all demand deposits other than interbank and United SLates Government. le!lll cub itema reported all on hl\lld or in process of col1cl.'tion. GROSS DEMAND AND TIME DEPOSITS OF MEMBER BANKS Eleventh Federal Reserve District (Average of daily figures in thousands or dollars) Reserve city bank.! Combined total GrollS uemsnd October 1945 .. ........ 14,562,119 1946. October 4,845,188 June 1947. ....... .. 4,549,262 July 1947. ... 4,7.\8,677 1947 .. August .. . 4,845,031 September 1947 .. 4,925,009 1947 .. October 5,100,591 Gro.. Country banb G.... Time demand Time Time demand 1438.106 12,200,933 1278,9ll1 52.271,186 1159.205 500,813 2,342.242 311,424 2,602.946 183,389 040,000 2.234.857 338,684 2.414,405 201,316 M2,C83 2.288,215 339,500 2.470,462 202,493 540,172 2,324,633 338,401 2.520,398 201,171 Me,fill 2.360,7'\'\ 337.863 2,564,204 202.648 541,504 2,437,292 337,197 2,66.1,299 204,307 creases ran as high as 21, 26, 30, and 39 percent, respectivcly, at Abilene, Corsicana, El Paso, and Lubbock, Texas. Cit ies reporting small increases of five percent or less included Austin, Galveston, San Antonio, and Tyler, Texas, and Shreveport, Louisiana. BANK DEBITS, END·OF·MONTH DEPOSITS, AND ANNUAL RATE OF TURNOVER OF DEPOSITS (Dollar figures in tbouaands) Annual rate of turnover - - - -Debita--- Pctg. change over October October Sept. End-(J{-mooth October Oct.ober Sept. 1946 1947 City 1947 1946 1947 deposits· 1947 TUC80n, Ariz .. . . , . , .. I 58,619 19 14 8 .6 7.8 7.7 I 82.124 10.1 36,180 11 41,205 10 .8 9.1 Monroe, La, .. . . , .. 24 150, 161 10.1 9.0 10.2 Shreve/i.rt, La•... . . . 123,965 14 t 14,308 9.4 8.8 9.2 19,116 Roswe ,N. M ..... . . . 7 t Abilene .......... . . . 21 40,273 11.3 8.9 9.6 36,966 26 Amarillo ..... . . . . . . . 84,800 13.3 11.8 11.6 92,313 30 18 104.276 11.6 10.7 11 .8 Austin . . . . ... . . , . . 100,000 16 2 94,5{).; 10.9 9.7 10.4 Beaumont . . , . , . , . . . . 82,684 21 10 Corpul Chriati . . , . . 76,681 -1 72,738 12.6 10.9 13.0 20 Corsicana ........ 20,212 6.7 6.8 13,877 26 8.4 33 Dal1aa .. , .. ,.,., .. 691,076 17.3 13.9 15.4 989,808 27 16 &1 Paao ........ . .. 119,590 107,974 13.4 11.6 10.6 16 30 Fort Worth . . ... 279,652 14 .4 11.6 13.0 332.908 22 13 Galveston .... . ... . .. 21 7.6 8.3 90,669 8 .4 63,479 2 HOUlton . , ......... ,. 945,153 796,331 14.3 11.8 12.7 28 14 Laredo .. . , .. ", .. . , , 15,640 20.540 9.2 9.1 8.8 6 t 61,130 15.7 10.3 11.9 Lubbock" .. " . .. . , . 77.631 63 39 Port Arthur, .. , ..... 33,124 7 39,825 10.1 8.6 9.6 14 San Angelo .... , . ... , 17 15 39,246 9.8 8.4 8.9 32,092 San Antonio ..... " .. 242,671 12 320.091 9.1 8.0 8.8 5 Texarkanat ......... . 16,375 14 15 22.158 9.0 7.2 7.8 37,707 11 48,949 9.2 9.1 9.0 5 9.0 54,107 13 14 67,160 9.8 9.0 Wicbita Fall1l ....... , 60,000 17 9 75,122 8.0 7.4 7.6 ~I:::::::::::::::: Total-24 cities, ... . . S3,646,658 23 13 Total . . .. 102 514,727 1384,254,424 2.5 - 0.1 The high level of business and banking activity was re£Jected further in the bank debit figures reported by banks in 24 leading cities of the district. These data showed a significant rise of 13 percent during October, which pushed up the an nual rate of turnover to 13.1, compared with 11.9 in September. Corpus Christi was the only city to show a decline in debi ts, while in- 13.1 10.9 11.9 On November 15 Government secuntles held by the Federal Reserve Bank of Dallas t otaled $1,009,5 21,000, or $37,000,000 more than on October 15. Discounts for member banks on November 15 were $2,700,000, and re£Jected the f act that some member banks were borrowing for a short period for the purpose of adjusting their reserve positions. From the middle of October, the amount of Federal R eserve notes of ·the Dallas Bank in actual ciruclation, though showing frequent minor dips, exhibited a strong season al upCONDlTfON OF THE FEDERAL RESERVE BANK OF DALLAS (Thousands of dolla!'9) Nov. 15, 1947 I 530,6ll 2,700 1,247 1.009,521 1,013,468 841 ,167 628,078 SAVINGS DEPOSITS Reporting Danh---Eleventh Federal Reserve District October 31,1947 Percentage change in savings depol!lits from Number Number of Amount or reporting aavingll savlngll October 31. Sept. 30, banks depoaitors depoeits 1946 1947 Beaumont . . ...... , . . . . . 3 12,377 I 6,638,766 -12 ,fI - 2.3 Dallas . . . , . ........ . , 8 134,763 78,129,408 4.3 0.1 El Paso ............ ,. 2 34,566 1.9 23,603,608 - 0.3 Fort Worth ....... . . . . . .. 3 42,283 34,489,147 3.0 - 0.2 Galvellton .. , ..... 4 23,125 22,121,230 7.1 - 0.3 Houston .... , ..... , . . 70,031,248 - 1.0 8 106,908 - 0.5 Lubbock ............ 2 1,250 1,871.538 -13.9 1.3 Port Arthur ........ , 2 6,193 5,054,994 - 5.8 - 0.6 San Antonio .... ,.,. , .... 5 39,424 47,184,536 5.2 0.5 Shreveport, La .... , •• , ••• 3 32.921 0,1 26,255,633 - 0 .5 Waeo .... . . , . . . .. 3 9,832 9,615,017 6.1 - 0.5 Wichita Fall.e .. . , . . . 3 6,897 4,690,134 -0.1 - 0.2 All other, ....... . . .. 56 64,188 54,569,165 4.8 0 .6 13,369.423 ·Demand aud time dcposita at the end of the month include eerti6ed and officers' checka outstanding but exclude deposits to Lhe credit of bauks. tlneludes only one bank in Texarkana Tena. Total debit.!! for all banb in Texarkana , TeDII·ArkanS8.ll, including two banb locat;} in the Eighth Diatrict, amounted to $28,189. flndicates change of less than one-half of one percent. Total gold certificate reserves. Discounts ror member banks., Foreign loans 00 gold,. , . . . . . . U. S. Government securities . . . rfo~~I~r~~t:=~~ 'd~POOi~ . Federal Reserve Not.es in actual circulation .. Nov. 15, 1946 5C3,059 2,275 4,474 913,147 919.896 770,506 606,387 October 15 1947 522,315 100 1,139 972.536 973.775 822.587 621,229 MEMDER DANK RESERVES AND RELATED FACTORS Eleventh Federal Reserve Di~trict (Millions of dollars) Changes in weeki ended Nov. 12, 1947 - 10.3 Federal Reserve Credit-locaL, Interdistr ci ~;;';~;e'r ~ial &' fiolln(' illl transactiolls .. 20.4 Treasury opcrutions . . .. -12 . i Currency tmnsac:tions ,. , . . - 4.0 Cumulative changes Nov, 5, 1947 0.1 Oct,29, 1947 - 3. 8 Oct. 22, 1947 3 .0 4 weeks ended Nov. 12, [947 . - 11.0 14.7 21. 7 4.2 26 . 9 - 16.2 - 1.5 - 35 . 1 13 . 9 - C.1 - 26 . 9 6.7 9 .8 - - 0.2 0.3 0.9 2. 6 - O~:d~yoa~~!et~eank,. 0 .2 Other Federal Reserve Accountll . . . . . .... , , Member Bank reserve balances ..... , .. . , . - 6.4 Note: Amouct8 preceded by a mieu. 0 .1 0 .8 0 .9 o1 1.3 0.1 Jan, 1 to Nov. 12. 1947 -29.8 - 368.4 463,5 15 . 3 - 33 .3 6 .3 -lfI.7 13.5 62.9 liln reduce re",n'ea; otbers iocrease reMrves. 189 MONTHLY BUSINESS REVIEW ward trend. On November 13, note circulation reached a new all-time peak of 631,639,000, which was $4 ,610,000 above the previous record of $627,029,000 set in December 1945. A slight post-Armistice decline then set in, and note circulation stood at $628 ,078,000 on November 15, or $6,849,000 higher than on October 15, proved reserves of crudc oil are located with in its borders, but present rates of production are probably equal to maximum efficient recovery rates in most fields in the Southwest. CRUDE OIL PRODUCTION- (B,melo) Incre<l!le or decrease in d'lily ave-mge production rrom Daily avg. production September 1947 October Hl46 24 ,403 163 4,953 162,073 1,328 17,015 492,658 6,432 42,294 259,507 11,357 44 ,820 41,053 193 1,172 319,803 10,603 3,\09 11 8,300 205 15,777 43,721 2,636 10,269 40,661 499 13,235 645,695 8.095 150,58.\ 135,929 7.744 6,277 89,147 2,81'2 4,197 2,372,950 37,78.\ 323 ,7().\ 117,127 11 8 17,429 103,1 11 2.273 13.875 2,593,188 39,940 35.1.009 2,659,652 14,455 159.9M 5,252,840 54,395 514 .984 October 1947 NEW MEMBER BANKS The First State Bank, Junction, Texas, a newly orgtmjzed illstitution located in tbe territory served by the San Antonio Brallcb of tbe Federal Reserve Bank of Dallas, opened for business 011 N ovelllber 8, 1947, as a ",enlher of tbe Federal Reserve System. This bank bas total capital f'mds of $75,000, including capital $50,000, surplm of $15,000, and undivided profits of $10,000. Its officers are: C. C. Chessber, Presidmt; Cecil H. Allen, Vice President a1ld Casbier; and G1!orge O. Cox, Assistant Cashier, On Nov e'mber 13, 1947, the Texas Bank and Trust Co·mpany of Dallas, T exas, was admitted to 11U!1nbersbip in the Federal Resen'e System. This bank bas total resOitrees of $20,400,000 and total capital fum/s of $1,281,000, including paid in capital of $500,000, mrph.s of $ 500,000, alld undildd'ed profits of $281,000, Included among its officers are: \\7. W, OvertOlI, Jr., CbaiNnan of tbe Board; p, B. Garrett, President; Mike F. Reed, Execlttive Vi ce Presidmt; C. B. Peterson, Jr., Vice Presidmt; M. R, FortS01I, Vice President; Robert Re)",o/ds, Vice Presidellt; C. S, Bisbop, Vice President; R, McRee Davis, Vice President; J. N. Fanni1lg, Vice Preside1lt; Irving Hitt, Vice PresidC1lt; R. H. Collier, Vice Presidenl; and Roy R oberts, Cashier and Auditor. NEW PAR BANK Tbe First State Bank, Hawkins, Texas, a newly organized /l07mlember bank located in tbe territory served by the H ead Office of tbe Federal R eserve Balik of Dallas, lVas added to tbe Federal Reserve Par List all its openillg date, Novell/ber 8, 1947. Tbis bank bas capital of $40,000, surplus of $ 10,000, and "ndivided profits of $4,000, Its officers are: C, C. Sims, President; J. E. Green, Vice Presid""t ; and Jobn T, Hai/mark, Cashier, I I DUSTRY Daily average production of crude oil reached new peaks in October in the Eleventh District and in the United States for the third consecutive month. In the United States, produ ction increased to approxjmately 5,253,000 barrels daily, exceeding that of a year ago by 11 percent and the 1939 average by about 50 percent. In the district, daily production averaged approximately 2,593,000 barrels daily, or about 16 percent above the rate during October 194 6, and 74 percent above the 193 9 rate. The importance of this district in supplying domestic requirements for crude oil has increased substantially during recent years. The district now aCCOUnts for 49.4 percent of total United States production , as compared with 46.8 percent during October 1946, and 43.1 percent in 1939. Potentially, the district is able to supply a still larger portion of total domestic requirements, since approximately 60 percent of the Total production Di!trict 1. .... . ". . ....... . 750,000 2 .. " .. ,' , . • . .... , 5.024,250 3.... .. .. .... ..... 15,272 ,400 4.... .. . ... , ...... 8.044.700 5.... . .......... . . 1.272.650 6.... ........... .. 0.013.900 Other 6.... .. ... .. .. ... . 3,607.300 7b.. . . , _, _, _. . . . . 1,355,350 ?c .... . . • . , _,_. . . . . 1,250,500 8.. .. ............ 20,01 6.550 9.... . ............. 4,213.800 10 .. :. .. . . . . ......... 2,703 ,550 Tolal Texas ... ....... :... . 73,561,450 New 'Mexico . .. . .... " ....... 3,630,950 North Louisian&....... .... .. . 3, 100,450 Tolal Di.kict.. .. . . .. .... .. 80,388.850 Out.8ide District. .. .. .. .. .. . . . 82.449,200 Uni'ed Sta,.................. 162,BaS,().\() SOURCE: Elltimated from American Petroleum lnatitute weekly report3. Acceleration of developmental drilling activity, development of new producing areas, and extension of pipe lines to tap those few areas whjch now arc producing below maximum efficient capacity may permit some increase in output to meet expanding requirements without reducing ultimate recovery from the natural reservoirs. Such developments can not be carried through rapidly, however, and, when completed, they may not increase substantially the quantity of oil which can be obtained without injury to the fields. Moreover, the outlook for important increases in production in areas outside the district js, on the whole, even less optimistic. The value of construction contracts awarded in the Eleventh District during October rose to $70,765,000, substantially exceeding the high le\·el reached in August. Preliminary estimates for the year indicate that total awards in the district probably will be in excess of $600,000,000, as compared with $564,VALUE OF CONSTRUCTION CONTRACTS AWARDED (Thousands of !.lollnrs) Year 1937 .. 1938 1930 .... 1940 .. 1941. . 1942 .. . 1943 ... . 1944 .. . 1945. 1946 ................ .. First ten months 1946.... . First ten months 1947 .... . ElcvcDth District '51 ,660 187,523 199,110 273,692 44 6,043 914,205 356,925 178,224 278,044 564,394 491,306 561 ,059p SOURCE: F. W. Dodge Corporation. 37 St..~ tes 2,913,060 3, 196,928 3,5.10, 543 4,003,957 6.007.474 8,255,061 3, 273,990 1,9114,016 3.299,303 7,489, 722 6,528.699 6,41 9,397 Eleventh Di ~tri ct Pen!cut of 37 SUites 5 . 21 5.87 5 .61 6.84 7.44 11.07 10 .90 8.94 8. 45 754 7.53 8. 74 p-Preliminary. 000,000 in 1946, and an annual average of $ J49,000,000 during the 1935-1939 period. As the accompanying table indicates, the Eleventh District accounted for a somewhat larger portion of total awards in the 37 states east of the Rocky Mountains during the first t en months of this year than in 1946, and a much larger portion than during the prewar years. Even when differences in dollar costs of construction are taken into account , 1947 appears to be establishing a new record for physical volume of construction activity during a peacetime year in this region. The number of residential projects started has increased in rate as 1947 has progressed, although the value of residential awards has declined slightly, Contrary to earlier indications, a larger number of privately financed permanent nonfarm dwellings may be started this 190 MONTHLY BUSINESS REVIEW year than in 1946, when a record 68,000 units were started in Texas and about 95,000 units ' were started in the five southwestern states. Moreover, improved flow of materials and an expanded force of construction workers have permitted acceleration of building schedules, making possible the completion of much larger numbers of permanent nonfarm dwellings in the district this year than in any prior year of record. VALUE OF CONSTRUCTION CONTRACTS AWARDED (Thousands of dollars) Eleventh District- total.. . Re8idcntial. ......... . . All other., .. ... .. . ... . United Statcs·-total. . .. . Rc8idential. AU other ............ . October H.l47p $ 70.765 22,603 48,162 793,286 349,490 443,796 October 11M6 $ 47,337 10,059 37,278 573 ,206 23~,068 338,138 p-Preliminary. ·37 states east of the Rocky Mountains. SOURCE: F. W. Dod.. CO'lXlralio•. September HI47r $ 38,807 13,447 25,360 649,996 268,543 381,453 January 1 to October 31 1947p 1946 $ 561,059 $ 491,306 202,824 204,107 358,235 287,199 6,419,397 6,528,699 2,636,757 2,727,624 3,782,640 3,801,075 initiated. The total value of such awards in 1947 probably will reach a new peak for a peacetime year, and the volume of new construction of this type initiated may exceed that of any prior year except 1942, Commercial and industrial buildings have been important components of this year's large volume of nonresidential construction, but the expansion in this kind of construction as compared with 1946 has reflected principally large increases in awards for public works and utilities projects. Although many of the larger residential, commercial, and industrial projects which have been important sustaining influences during 1947, are nearing completion, work initiated during the fall will sustain building activity at high levels during the winter months, and impressive backlogs of plans for residential, commercial, and utilities construction are reported to be ready for initiation in the district early in 1948. r-Revised. DOMESTIC CONSUMPTION AND STOCKS OF COTTON-(B.lee) October The cumulated value of awards for nonresidential construction projects in the district thus far this year has increased at a rate substantially above that of any prior year except 1942, when large military and wartime industrial facilities were Consumption at: Texas milla . . ....... . United States mills .. U. S. st.ocl<s--end of month: 1947 13,827 826,216 [n cOll.suming eetabm't8 ... 1,479,136 Publicstg. & com presses ... 5,]01,358 October September August 1 to October 31 194.6 Hl47 This season Last season 21,087r 11.646 37,360 58,664r 933,615 727,448 2,264,265 2,609,044 2,019 ,236 5,913,230 r-Revised. BUILDING PERMITS \ October 1947 No. Valuation Percentage Percentage change J••. 1 IoOel.31, 1947 chan,e valuation from valuatton Sept. October No. Valuation from 10'6 1946 77 211 18 42 137 141 109 63 03 183 122 97 50 72 108 44 1947 -35 23 -4 16 131 -4 -18 -36 -46 31 -30 -10 -2 -39 -13 Total. ..... 7,341 $30,225,967 109 fCbange less than one-haIr of ODe per cent. -t A~lene .......... 84$ Amarillo ••...• .•• 201 Austin ., .... , ..... 291 Beaumont ..... . .. 360 C0lf: Chriati . ... 392 Da ..... " .... 1,670 &1 Pa.so.' ." ..... 177 Fort Worth ....... 699 Gdveeton . ....... 160 Houaton .... , 835 Lubbock .... 220 Port Arthur ...... 202 Ban Antonio ...... 1,400 Shreveport, lA.... 378 Waco ............ 187 Wichita Falla ..•. . 85 318,400 1,025,365 1,561,740 562,446 2,243,044 6,873,440 834,505 2,611,797 19R,059 8,289,053 640,142 191,373 2,68 1,3 10 1,098,153 905,200 191,040 ----- 1 918 $ 3,721,052 1 1,817 7,160,811 9 16,589,798 4 3,483 5,412,411 66 3,615 13,362,988 48 14,254 48,612,760 16 1,358 6,317,526 61 6,461 22,529,892 8 1,597 2,160,543 -4 7,162 59,343,444 23 2,0<17 9,383,376 16 1,705 1,943,997 3 12,379 22,471,953 10 3,491 9,790,278 22 1,543 7,781,01 8 73 725 2,171,766 25 4,410 66,9S5 $238,743,613 19 COTTONSEED AND COTTONSEED PRODUCTS _-- TcX'a.~--~_-·Untte<l August ] to October 31 Augu,'!t 1 to This scuson 708,997 Cottonseed received at mills (tons) .... . 312.741 Cottonseed-crushed (tons) ............ . 450.684 Cottonseed on hand October 31 (tons) .. Production of proUuct.s: 93,658 Crude oil <thousand pounds) .. . ...... 147,697 Cake and meal (tons) ..... 69,438 Hulls (tons) .................. 104,637 Linters (running bales) ........ Stock!! on hand October 31 : 14,268 Crude oil (thousand pounds) 13,272 Cake and meal (tons) . ... . . 26,019 H ul15 (tons) ............ 42,684 Linters (running bales) .. SOURCE; United States Bureau of Cen8us. Last season This season 351,967 2,452.91 8 186,012 1,094.707 223,209 1,4~7,739 States-October 31 Last season 1,033,191 034,451 916,546 6:J,431 333,291 504,5142<9,370 339,333 2.;6,828 367,095 191,862 262,760 14,870 13,082 18,739 3 1,656 54,654 62,121 71,842 151,761 52,946 54,240 87,967 41,189 ~B,396 M,989 144,832